EXHIBIT 10.42
Portions of this Exhibit have been omitted
pursuant to a request for confidential
treatment. The omitted portions are marked
*** and have been filed separately with
the Commission.
PACLITAXEL PURCHASE AGREEMENT
THIS PACLITAXEL PURCHASE AGREEMENT (this "Agreement") is made effective as of
this 28th day of September, 2001 (the "Effective Date") by and between Natural
Pharmaceuticals, Inc., a Delaware corporation ("NPI"), having a place of
business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇
and Cell Therapeutics, Inc., a Washington corporation ("CTI"), having a place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, CTI desires to purchase paclitaxel from NPI and NPI desires to
sell such paclitaxel to CTI in accordance with the terms and conditions set
forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Each of the capitalized terms used in this Agreement (other than the heading of
Articles and Sections), whether used in the singular or the plural, shall have
the meaning as set forth below or, if not listed below, the meaning as
designated in places throughout this Agreement.
1.1 "Act" shall mean the United States Food Drug and Cosmetic Act, as amended,
and the rules and regulations promulgated thereunder.
1.2 "Active Pharmaceutical Ingredient" shall mean paclitaxel in any form other
than as incorporated in a finished pharmaceutical product formulated,
packaged, labeled and intended for use in human beings in a clinical
setting as part of the CT-2103 Development Program (as hereinafter
defined).
1.3 "Affiliate" shall mean any entity that directly or indirectly controls, is
controlled by or is under common control with a party to this Agreement. As
used in this Section 1.3, "control" shall mean the possession, direct or
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indirect, of the power to direct or cause the direction of the management
or the policies of the entity, whether through the ownership of voting
securities, by contract or otherwise.
1
1.4 "Business Days" shall mean days other than Saturday, Sunday and legal
holidays.
1.5 "Certificate of Analysis" shall mean the certificate of chemical
analysis in the form of Exhibit A attached hereto accompanying (i) each
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delivery of Product (as hereinafter defined) delivered hereunder in
accordance with Section 9 of this Agreement and the Specifications (as
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hereinafter defined) or (ii) any repurchase of Product by NPI pursuant to
Section 3.2(c) of this Agreement and the Specifications.
1.6 "cGMP" shall mean the current Good Manufacturing Practices regulations
at 21 CFR, Parts 210 and 211, as promulgated by the FDA (as hereinafter
defined) and as may be modified from time to time by the FDA.
1.7 "CT-2103 Development Program" shall mean CTI's development program
using polyglutamate cojugated paclitaxel for the treatment of disease.
1.8 "CTI Product" shall mean any product sold or used by CTI that
incorporates Product.
1.9 "Days" shall mean calendar days, unless otherwise specified, provided
that if a deadline falls on a Saturday, Sunday, or legal holiday, it shall
be extended until the following regular Business Day.
1.10 "DMF" shall mean the Drug Master File submitted to the FDA by NPI or
other similar document submitted to a regulatory authority for the purpose
of registration that maintains the confidentiality of information
proprietary to NPI in connection with Product.
1.11 "FDA" shall mean the United States Food and Drug Administration, or
any successor entity thereto.
1.12 "ICH" shall mean the International Conference on Harmonization, or any
successor entity thereto.
1.13 "Kg" shall mean kilograms.
1.14 "Liquidation" shall mean any liquidation, reorganization, dissolution
or winding up of the affairs of an entity, whether voluntary or
involuntary, or the appointment of any trustee, receiver or conservator for
any assets of such entity.
1.15 "Price" shall mean *** of Product, exclusive of any commissions,
bonds, levees, insurance, taxes, delivery charges and other similar
amounts. All Prices and other amounts in this Agreement shall be construed
to be in U.S. dollars ($U.S.).
1.16 "Product" shall mean *** of paclitaxel to be supplied by NPI pursuant
to this Agreement and in accordance with cGMP, conforming to the
Specifications and the DMF.
____________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
2
1.17 "Specifications" shall mean the specifications for Product set forth
in Schedule A attached to, and made a part of, this Agreement. The
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Specifications shall not be modified without the written agreement of both
parties expressly referring to this Agreement and the Specifications.
ARTICLE 2
MANUFACTURE AND SALE
2.1 Subject to the terms and conditions set forth herein, NPI agrees to make
commercially reasonable efforts to manufacture, or have manufactured, and
sell Product to CTI, and CTI agrees to purchase Product as provided herein.
2.2 The purchase and sale of Product shall be made in the amounts and on the
dates as set forth in Schedule B attached to, and made a part of, this
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Agreement.
ARTICLE 3
CERTAIN COVENANTS
3.1 NPI hereby covenants and agrees with CTI that NPI shall conduct its, and
shall use commercially reasonably efforts to cause its Affiliates and
subcontractors to conduct their, Product manufacturing operations in
compliance with all applicable U.S. regulations, including, but not limited
to, those dealing with occupational safety and health, public safety and
health, protection of the environment and the disposal of wastes.
3.2 CTI hereby covenants and agrees with NPI as follows:
(a) CTI shall store Product in compliance with cGMP and maintain the cGMP
status of such Product from the time of delivery by NPI;
(b) CTI shall provide written notice to NPI of any adverse reaction with
Product that is attributed, or which may be attributed, to Product and
in any event, no later than *** following the determination of such
adverse reaction, and shall provide NPI with such details as NPI may
reasonably request relating thereto; and
(c) ***.
3.3 Each of NPI and CTI covenants and agrees with the other as follows:
(a) If the FDA or any other U.S., foreign or international regulatory
agency requires a change in the Specifications including, but not
limited to, the raw materials,
____________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
3
sources of raw material or analytical testing method with respect to
Product, NPI shall at its expense use its reasonable commercial
efforts to make the change so required by the FDA, or such other
regulatory agency in the lawful exercise of its jurisdiction. In the
event that NPI fails to initiate action to make any such required
change within *** of any request for such change from the FDA or any
other U.S., foreign or international regulatory agency, CTI may
immediately terminate this Agreement by providing written notice in
accordance with the terms hereof;
(b) If either CTI or NPI sends a written request to the other party for a
change in the manufacturing process and the DMF, the Specifications,
the raw materials, sources of raw material, other than originating
from Yew trees, or analytical testing method with respect to Product,
that is not the result of a requirement of the FDA or any other U.S.,
foreign or international regulatory agency, such other party shall use
its reasonable commercial efforts to accommodate such request. The
party requesting such change shall pay all reasonable expenses of the
other party which are required to make such change and the parties
will negotiate in good faith a new price for Product taking into
account any reduced or increased costs associated with such change;
(c) Each of CTI and NPI shall promptly, but in any event no later than
***, forward to the other copies of any written communication received
by them from the FDA or other U.S. (including federal, state or
local), foreign or international regulatory agency that may affect the
manufacture and sale of Product, as contemplated herein and any
response to such communication. CTI may provide any such communication
forwarded to CTI by NPI to third parties upon written notification to
NPI; and
(d) During the term of this Agreement and at all times thereafter, NPI and
CTI shall keep each other promptly and fully informed of any
notification or other information received directly or indirectly that
may affect the marketability, safety or effectiveness of Product.
ARTICLE 4
PRICE AND TERMS OF PAYMENT
4.1 The Price for each kilogram of Product delivered pursuant to this Agreement
shall be ***, with an aggregate Price of ***, payable in United States
dollars. Payment will be made in *** installments of ***. Each shipment
of Product shall be accompanied by an invoice showing the amount, Price and
corresponding deduction from the aggregate amount pre-paid by CTI to NPI
pursuant to this Section 4.1.
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____________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
4
4.2 Notwithstanding any prior inspection or payments, all Product will be
subject to final inspection and acceptance at CTI's location or other
destination point within *** after receipt. In case any Product is
defective or does not meet the Specifications, CTI will have the right to
reject it by written notice to NPI within *** after receipt. Such notice
shall include copies of all test records and results relating to the
returned Product. All Product testing will be done in accordance with the
procedures set forth in Article 9 hereof. The warranty set forth in
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Article 11 hereof shall survive any acceptance of Product by CTI. CTI will
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not be required to pay for any such defective or non-conforming Product, or
its shipping costs or any other costs related thereto, unless and until it
is promptly replaced. CTI will return all defective or non-conforming
Product to NPI at NPI's expense.
4.3 CTI shall be responsible for sales, use, or custom taxes or duties
resulting from the sale or delivery of Product. CTI shall provide tax
exemption numbers, if applicable, for such purchases.
ARTICLE 5
SHIPPING AND DELIVERY
5.1 All deliveries of Product under this Agreement shall be made F.O.B. to a
location within the United States of America as designated by CTI. If the
material is stored by NPI, then delivery shall be deemed to occur when NPI
provides written notice of release and delivery in accordance with the
terms hereof. CTI shall use commercially reasonable efforts to specify
destination of delivery at least *** prior to each of the delivery dates
set forth in Schedule B attached hereto. The packaging for shipment shall
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be in accordance with good commercial practice with respect to protection
of Product during transportation. Environmental conditions during shipment
shall be specified in the Specifications. NPI shall pay all freight,
inspection fees and other charges applicable to the sale and transportation
of Product purchased by CTI. Title and risk of loss and damages to Product
shall pass to CTI upon CTI's receipt of Product at its designated
destination.
5.2 If Product is designated for export, CTI is responsible, at its expense,
for assuring compliance with applicable export, health and safety laws and
all freight and duty regulations and will provide NPI with instructions for
the handling of such export shipments and shall reimburse NPI for all costs
associated therewith.
5.3 NPI shall deliver Product ordered by CTI within *** of each of the delivery
dates set forth on Schedule B. NPI shall immediately notify CTI of any
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anticipated late deliveries and any impending plant or facility shutdowns
for any reason, including vacation, tool repair, labor difficulties or
governmental order, which may adversely impact the scheduled delivery
dates. In the event that NPI is delinquent with respect to delivery of
Product to CTI for reasons other than those reasonably attributable to CTI
or in
____________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
5
accordance with Section 18.9 hereof, NPI shall produce and deliver such
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Product to CTI in the most commercially expeditious manner possible and the
payment of premium costs associated with the production and shipment of
Product shall be at NPI's expense. The rights and obligations of the
parties under this Section 5.3 shall not apply to the extent that any delay
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in delivering Product is caused by a relevant delay in performance by CTI
of its obligations under this Agreement.
5.4 Notwithstanding any of the foregoing provisions of this Article 5, CTI may
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defer any scheduled delivery for *** by providing NPI with written notice
of such deferral *** prior to the scheduled delivery date; provided,
however, CTI may not deter any scheduled delivery if CTI has accelerated
such delivery pursuant to Section 5.5 below or if NPI has accelerated such
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delivery pursuant to Section 5.6 below.
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5.5 NPI and CTI shall negotiate in good faith any request by CTI to accelerate
the delivery schedule set forth in Schedule B. NPI and CTI acknowledge and
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agree that such acceleration may increase the cost of production of Product
and therefore may require an increase in the price of Product.
5.6 NPI and CTI hereby agree that NPI may, at its sole discretion, accelerate
the delivery schedule set forth in Schedule B; provided, however, NPI shall
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provide CTI with written notice of such acceleration at least *** prior to
each of the scheduled delivery dates subject to such acceleration. If NPI
accelerates the delivery schedule pursuant to this Section 5.6, there shall
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be no increase in the price of Product.
ARTICLE 6
***
6.1 ***.
6.2 ***.
6.3 ***.
ARTICLE 7
TITLE
7.1 Title to Product will pass to CTI upon delivery to the site designated by
CTI. Subject to ***, NPI will grant to CTI a security interest in Product
scheduled to be delivered to CTI hereunder and NPI's rights and obligation
under *** pursuant to the terms and conditions of the Security Agreement
executed contemporaneously with this Agreement.
____________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
6
7.2 In the event of a Liquidation of NPI, NPI hereby agrees that NPI shall (i)
assign its rights and obligations under *** to CTI, (ii) grant CTI a
royalty-free sublicense in all of NPI's information, know-how, trade
secrets, and intellectual property required to produce Product, (iii) give
CTI access to the DMF and all records that support the DMF including, but
not limited to, batch production records; provided, however, such
Liquidation occurs prior to the earlier of (a) NPI's delivery and CTI's
acceptance of an aggregate of *** of Product and (b) such time that (x)
Product delivered and accepted by CTI equals or exceeds *** and (y) Product
in NPI's inventory designated for CTI as set forth in this Agreement
exceeds ***.
ARTICLE 8
PACKING
8.1 All Product shipped hereunder shall be packed by NPI in accordance with the
DMF, at no additional charge to CTI, in containers that comply with FDA
and International Air Transport Association regulations.
8.2 All Product (i) *** or (ii)
rejected by CTI pursuant to Section 4.2 above shall be packed by CTI in
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containers that comply with FDA and International Air Transport
Association regulations. ***
ARTICLE 9
SAMPLE TESTING & FDA QUALIFICATION
9.1 NPI or its subcontractor shall assay and analyze samples from each batch of
Product and prepare a Certificate of Analysis stating compliance with the
Specifications. NPI shall provide CTI with a copy of such Certificates of
Analysis with each shipment.
9.2 In testing Product shipped hereunder, NPI or its subcontractor and CTI
shall use the analytical testing methods that are documented, validated to
meet ICH guidelines by NPI and mutually agreed upon in good faith in
writing by NPI and CTI. At the request of CTI, NPI shall provide such
methods for CTI's, or its designees, use and shall assist in their transfer
to CTI or its designee for the purposes of testing Product, at CTI's
expense. Pursuant to Section 4.2 hereof, CTI shall analyze Product within
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*** from the date of receipt of Product and shall report any non-
conformance with Specifications to NPI within *** from such date of
receipt. NPI shall use commercially reasonable efforts to replace each
shipment or Product that does not conform with the Specifications with
Product that does so conform as soon as reasonably practical after receipt
of notice of rejection thereof, and in any event shall do so within ***.
9.3 CTI shall represent to NPI that any Product returned to NPI for replacement
shall have been properly stored by CTI in accordance with the
Specifications at all times and CTI shall be responsible for any Product
not so stored.
____________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
7
9.4 NPI shall analyze Product that is returned to NPI by CTI for replacement
pursuant to Section 4.2 and shall inform CTI within *** upon receipt of
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such rejected Product of the results of NPI's analysis. In the event that
CTI and NPI agree that any quantity of Product failed to comply with the
Specifications at the time of receipt by CTI, the shipping cost of
replacement (including freight and insurance) shall be borne by NPI, and
otherwise by CTI. In case of a disagreement between the parties, Product in
question shall be submitted for tests, according to mutually agreed
procedures, and decision to a mutually acceptable laboratory, the
appointment of which shall not be unreasonably withheld or delayed by
either party. The determination of such entity with respect to all or part
of any shipment of Product shall be final and binding upon the parties.
The fees and expenses of the laboratory making such determination shall be
paid by the party against which the determination is made.
9.5 NPI will provide full support and comply with all requests for reasonable
documentation, information or analyses that CTI may require in connection
with submissions to, or audits required by, any U.S. or foreign regulatory
authorities. CTI shall submit all such requests to NPI in writing.
ARTICLE 10
INSPECTIONS
10.1 NPI will allow CTI into its facility, and the facilities of its Affiliates,
used in manufacturing Product, and will use commercially reasonable efforts
to cause its subcontractors to allow CTI into their facilities
manufacturing Product pursuant to this Agreement, so that any of the
Product and manufacturing or testing processes may be inspected, upon
reasonable prior written notice as long as any such inspection will not
unduly interfere with NPI's or its Affiliates' and subcontractors'
operations and is conducted at times reasonably acceptable to NPI, its
Affiliate or subcontractor. CTI, its agents and its employees shall comply
with all NPI rules and procedures when in or on NPI's premises and all
rules and procedures of NPI's Affiliates and subcontractors when in or on
their respective premises.
10.2 NPI shall maintain manufacturing records, logs and other traceability
information for Product delivered as NPI would create in the normal course
of operations or as required by FDA regulations, for a period of *** (or
such longer period as may be required for CTI to comply with FDA or other
applicable U.S. or foreign rules and regulations and as to which it has
informed NPI in writing) after either the expiration or termination of this
Agreement and shall make such information available to CTI on request.
ARTICLE 11
WARRANTY
______________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
8
11.1 NPI warrants that, at the time of delivery, Product manufactured hereunder
will comply with the Specifications and the DMF and conform with the DMF
and the information shown on the Certificate of Analysis provided with
shipment of such Product. The foregoing warranty does not apply if damage
arises from mishandling, abuse, improper storage, improper other service or
maintenance, or misuse (including, without limitation, any use of Product
beyond the environmental parameters set forth in the applicable
Specifications and the DMF) in each case other than by NPI, its Affiliates
or subcontractors; or damage by fire, explosion, power failure, power surge
or other power irregularity (beyond such parameters which are set forth in
the Specifications and the DMF), in each case after Product has been
delivered to CTI pursuant to this Agreement.
11.2 NPI further warrants that Product delivered to CTI hereunder is free and
clear of all liens and encumbrances at the time of delivery other than
those created by CTI.
11.3 NPI has good and marketable title to Product, and the right to sell Product
to CTI in accordance with this Agreement.
11.4 NPI warrants that Product shipped by NPI to CTI hereunder shall not be
"adulterated" or "misbranded" within the meaning of the Act.
11.5 NPI represents and warrants that (i) it has power to assign its rights and
obligations under *** to CTI, (ii) its rights in and under *** are free and
clear of all adverse claims, security interests and restrictions on
transfer or pledge except as created by the Security Agreement, dated as of
the date of this Agreement, between NPI and CTI and (iii) NPI has the right
to grant to CTI a royalty-free sublicense in all NPI information, know-how,
trade secrets and intellectual property required to produce Product.
11.6 NPI is not debarred under the Act and it does not and will not knowingly
use in any capacity the services of any person debarred under the Act.
Neither, NPI, nor, to the best of its knowledge, any of its employees,
agents or contractors has engaged in any activity that could lead to NPI
becoming debarred under the Act.
11.7 As of the Effective Date of this Agreement, NPI warrants to that, to the
best of its knowledge, the NPI processes for manufacture of Product do not
infringe upon any third party rights including, but not limited to,
intellectual property rights.
11.8 DISCLAIMER. THE FOREGOING WARRANTIES CONSTITUTE THE ONLY WARRANTIES,
GUARANTEES OR CONDITIONS WITH RESPECT TO PRODUCT. SUCH WARRANTIES ARE IN
LIEU OF ALL OTHER WARRANTIES, GUARANTEES OR CONDITIONS, WRITTEN OR ORAL,
STATUTORY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.
______________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
9
ARTICLE 12
INDEMNIFICATION
12.1 CTI will defend, indemnify and hold harmless NPI, each Affiliate of NPI,
and their respective officers, directors, employees and agents against any
out-of-pocket loss, damage, fine, penalty, action, suit, claim, demand,
prosecution, liability or expense, including, without limitation, product
liability claims and costs (all referred to hereinafter as "Claim") that
may be brought, instituted or arise against or be incurred by NPI or any
such Affiliate, officer, director, employee or agent to the extent such
Claim is based on, or arises out of, the use or sale by CTI or its
Affiliates of Product, or any intermediate or final products into which CTI
or its Affiliate incorporates Product, including, without limitation, any
investigation by a government agency or any claim for personal injury or
property damage asserted with respect to the use of Product, or any
intermediate or final products into which CTI or its Affiliate
incorporates Product; provided, however, that CTI will not indemnify and
hold harmless NPI, each Affiliate of NPI, and their respective officers,
directors, employees and agents from any Claim to the extent such Claim is
based on, or arises out of, a breach of the warranties set forth in Article
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11 or NPI's gross negligence or willful misconduct in performing its
--
obligations hereunder.
12.2 NPI will defend, indemnify and hold harmless CTI, each Affiliate of CTI,
and their respective officers, directors, employees, and agents against any
out-of-pocket Claim that may be brought, instituted or arise against, or be
incurred by, CTI or any such Affiliate or, officer, director, employee or
agent to the extent such Claim is based on injury to a third party arising
out of NPI's breach of warranties set forth in Article 11 or NPI's gross
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negligence or willful misconduct in performing its obligations hereunder.
12.3 NPI shall maintain comprehensive general liability ("CGL") insurance,
including broad form contractual liability and product liability coverages,
in an amount of at least *** for bodily injury and property damage. CTI
shall be named as an additional insured under NPI's CGL policy. NPI shall
also purchase and maintain adequate insurance coverage for damage to
Product during shipment and during storage by NPI pursuant to Section 5.1
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hereof. NPI shall maintain such insurance for a period of five (5) years
from the date of this Agreement. Upon request, NPI shall provide CTI with
a certificate of insurance as evidence of the requested coverages and shall
give CTI at least thirty (30) Days notice of any cancellation, termination
or change in such insurance.
ARTICLE 13
LIMITATION OF LIABILITY
EXCEPT FOR SECURITY INTERESTS REFERENCED IN ARTICLE 7 AND WITH THE EXCEPTION OF
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VIOLATIONS OF ARTICLE 14 BELOW, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
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INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL
______________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
10
DAMAGES, LOSS OF PROFITS, LOSS OF USE, OR DATA OR INTERRUPTION OF BUSINESS,
WHETHER SUCH ALLEGED DAMAGES ARE LABELED IN TORT, CONTRACT, OR INDEMNITY, EVEN
IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. WITH THE
EXCEPTION OF VIOLATIONS OF ARTICLE 14 BELOW AND PURSUANT TO ARTICLE 12 ABOVE,
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IN NO EVENT SHALL NPI BE LIABLE FOR DAMAGES FOR ANY CAUSE WHATSOEVER, INCLUDING
BUT NOT LIMITED TO BREACH OF CONTRACT (INCLUDING FUNDAMENTAL BREACH), TORT
(INCLUDING NEGLIGENCE), INDEMNITY OR OTHERWISE, IN AN AMOUNT IN EXCESS OF, IN
THE AGGREGATE, THE PAYMENTS RECEIVED BY NPI FROM CTI PURSUANT TO THIS AGREEMENT
TO THE DATE OF SUCH LIABILITY, OR ***, WHICHEVER IS GREATER. EXCEPT FOR
SECURITY INTERESTS REFERRED IN ARTICLE 7 AND WITH THE EXCEPTION OF VIOLATIONS
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OF ARTICLE 14 BELOW AND PURSUANT TO ARTICLE 12 ABOVE, IN NO EVENT SHALL CTI BE
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LIABLE FOR DAMAGES FOR ANY CAUSE WHATSOEVER, INCLUDING BUT NOT LIMITED TO BREACH
OF CONTRACT (INCLUDING FUNDAMENTAL BREACH), TORT (INCLUDING NEGLIGENCE),
INDEMNITY OR OTHERWISE, IN AN AMOUNT IN EXCESS OF, IN THE AGGREGATE, THE
PAYMENTS PAID AND/OR DUE TO NPI FROM CTI PURSUANT TO THIS AGREEMENT TO THE DATE
OF SUCH LIABILITY, OR ***, WHICHEVER IS GREATER.
ARTICLE 14
INTELLECTUAL PROPERTY RIGHTS AND CONFIDENTIALITY PROVISIONS
All technical information, specifications, drawings, documentation and "know-
how" of every kind and description whatsoever disclosed in writing and
identified as confidential by either party to the other under this Agreement
(the "Information"), except insofar as it may be in the public domain or be
established to have been independently developed and so documented by the other
party or obtained by any person not in breach of any confidentiality obligations
to the disclosing party, is the exclusive property of the disclosing party. The
recipient party, except as specifically authorized in writing by the disclosing
party, or as permitted hereunder, shall treat and protect the Information as
confidential, shall not reproduce the Information except to the extent
reasonably required for the performance of this Agreement, shall not divulge the
Information in whole or in part to any third parties (except for, in the case of
NPI, NPI Affiliates, subcontractors and suppliers as necessary for NPI's
performance under this Agreement and except in the case of CTI, CTI Affiliates,
and in each such case, who have agreed, in writing, to be bound by the
confidentiality provisions set forth above) and shall use the Information only
for purposes necessary for the performance of this Agreement or as may be
required for the use of Product provided hereunder. This obligation shall
survive the completion of this Agreement for a period of five (5) years. Each
party shall disclose the Information only to those of its employees or agents
who shall have a "need-to-know" the Information for the purposes described
herein after such employees or agents have agreed, in writing, to be bound by
the confidentiality obligations set forth above. CTI acknowledges and agrees
that NPI shall be the owner of all
______________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
11
patent, copyright, trademark, trade secret and other industrial or intellectual
property rights in any Product supplied by NPI to CTI. NPI acknowledges and
agrees CTI shall be the owner of all patent, copyright, trademark, trade secret
and other industrial or intellectual property rights in CTI Product, except as
set forth in the preceding sentence.
ARTICLE 15
TERMINATION
15.1 Unless earlier terminated pursuant to the terms hereof, this Agreement
shall terminate on the date upon which all of the purchase, sale and
delivery obligations of the parties hereunder have been satisfied in
accordance herewith or *** from the Effective Date hereof, whichever is
later.
15.2 This Agreement may be terminated by either party upon written notice by
reason of a material breach by the other party; provided, that the
breaching party fails to remedy such breach within *** after written notice
thereof. Notwithstanding the foregoing, (i) in the event of a non-monetary
breach that cannot be cured within such *** period, the notifying party
cannot terminate this Agreement if the breaching party continues to use
diligent efforts to cure such breach until actually cured; provided,
however, that the notifying party may terminate this Agreement if such
breach is not cured within *** of the original notice of breach, and (ii)
in the event a breach cannot in good faith be cured using commercially
reasonable efforts, the breaching party may terminate this Agreement by
notice to the other party given in writing *** after the occurrence of such
breach.
15.3 Either party may terminate this Agreement upon the Liquidation of the other
party.
ARTICLE 16
ACCRUED OBLIGATIONS
No termination or expiry of this Agreement shall release any party from any
obligation (including payment obligations) that have accrued or become payable
at or prior to the date of termination or expiry.
ARTICLE 17
ARBITRATION
Except with respect to the provisions contained in Article 14 hereof, any
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dispute or controversy relating to the validity, construction and performance of
this Agreement or the breach or termination of this Agreement will be settled by
binding arbitration before three arbitrators. Each party shall select one
arbitrator and the two arbitrators selected by the parties shall select a third.
If the arbitration proceeding is requested by NPI, such proceeding shall take
place in the
______________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇. If the arbitration proceeding is requested by
CTI, such proceeding shall take place in the City of Seattle, Washington. Such
arbitration shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, as modified by this Article 17 or
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by further written agreement of the parties. No discovery shall be permitted by
the arbitrators under the aforesaid rules. The arbitrators shall be selected
from a panel of persons (such as retired jurists or distinguished legal or
business professionals) knowledgeable in the specific areas that may be relevant
to the dispute or controversy and who have had more than ten (10) years of
relevant experience in such areas. Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The parties
each shall give the other not less than sixty (60) Days prior written notice of
any intention to submit any controversy or claim relating to this Agreement to
arbitration. During such 60-Day period, the parties shall engage in discussions
and pursue alternative dispute resolutions mechanisms (such as the appointment
of a mutually agreeable mediator if deemed appropriate by either party) in a
good faith effort to resolve such controversy or claim without resorting to
arbitration. The arbitrators shall have the right to award to the prevailing
party in such arbitration an amount equal to some or all of the attorney's fees
and other costs and expenses incurred by such prevailing party in the
arbitration. In furtherance of the foregoing, neither party shall commence any
legal proceeding relating to this Agreement against the other party in any court
in any jurisdiction, except for a proceeding to enforce any award by the
arbitrators.
ARTICLE 18
GENERAL
18.1 SEVERABILITY. In the event that any provision of this Agreement is found
to be invalid, voidable or unenforceable, the parties agree that unless
such provision materially affects the entire intent and purpose of this
Agreement, such invalidity, voidability or unenforceability shall affect
neither the validity of this Agreement nor the remaining portions hereof,
and that the provision in question shall be deemed to be replaced with a
valid and enforceable provision most closely reflecting the intent and
purpose of the original provision.
18.2 SURVIVAL. Notwithstanding any termination or expiry of this Agreement, the
provisions of Articles 1 (Definitions), 4 (Price and Payment Terms), 7
(Title), 11 (Warranty), 12 (Indemnification), 13 (Limitation of Liability),
14 (Intellectual Property Rights and Confidentiality Provisions), 15
(Termination), 16 (Accrued Obligations), 17 (Arbitration), 18 (General),
the provisions of Sections 3.3d, 6.2 and 10.2 and all consequent rights,
obligations and liabilities shall survive the termination or the expiry of
this Agreement.
18.3 ASSIGNMENT. Neither party shall assign its rights or delegate its duties
under this Agreement without the prior written consent of the other;
provided, such consent shall not be unreasonably withheld; provided,
further, that CTI may assign all of its rights hereunder as part of a sale
of substantially all of the assets or business of CTI and NPI may assign
all of its obligations hereunder as part of a sale of substantially all of
the
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assets or business of NPI or its Affiliates used in fulfilling such
obligations, subject to the terms hereof. Notwithstanding the foregoing,
NPI shall have the right to delegate or assign this Agreement to any
Affiliate subject to the prior written consent of CTI, which consent shall
not be unreasonably withheld. NPI may subcontract any of its obligations
hereunder with the prior written consent of CTI, provided such consent is
not unreasonably withheld. This Agreement shall inure to the benefit of
its successors and assigns.
18.4 WAIVER. The failure of either party to enforce at any time or for any
period of time any of the provisions of this Agreement shall not constitute
a waiver of such provisions or the right of either party to enforce each
and every provision.
18.5 GOVERNING LAW. The rights and obligations arising under the Agreement
shall be governed by and construed in accordance with the laws of the State
of New York and the federal laws of the United States applicable therein,
without regard to its conflicts of law rules.
18.6 NOTICES.
18.6.1 Any and all notices or other information required to be given
by one of the parties to the other shall be deemed
sufficiently given when forwarded by prepaid registered mail
return receipt requested, overnight delivery service, cable,
telegrams, facsimile, telex or hand-delivery to the other
party at the following address:
CTI -
Cell Therapeutics, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: Chief Operating Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
Cell Therapeutics, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Affairs
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
______________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
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NPI
-Natural Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ White & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
18.6.2 Such notices shall be deemed to have been received seven (7)
Days after mailing if forwarded by mail, and the following
Day if forwarded by telegram, telex, overnight service,
facsimile or hand delivery.
18.6.3 The aforementioned address of either party may be changed at
any time by giving fifteen (15) Days prior notice to the
other party in accordance with the foregoing.
18.6.4 In the event of a generally prevailing labor dispute or
other situation which will delay or impede the giving of
notice by any such means, the notice shall be given by such
specified mode as will be most reliable and expeditious and
least affected by such dispute or situation.
18.7 U.N. CONVENTION ON CONTRACTS. The parties agree that the U.N. Convention on
Contracts for the International Sale of Goods (Vienna, 1980) and the 1974
Convention on the Limitation Period in the International Sale of Goods (the
"1974 Convention") and the Protocol amending the 1974 Convention, done at
Vienna April 11, 1980, shall not apply to this Agreement nor to any dispute
or transaction arising out of this Agreement.
18.8 PUBLICITY. Prior to the publication or use by a party hereto of any
advertising, sale promotions, press releases or other publicity matters
relating to Product or this Agreement in which the names or logo of the
other party is mentioned or can be reasonably inferred, the party shall
obtain the prior written consent of the other party. Such consent shall not
be unreasonably withheld. Terms, conditions, and general terms of this
Agreement shall be held in confidence by both parties and only disclosed as
may be agreed to in writing by both parties or as may be required to meet
securities disclosure or export permit requirements or as may be otherwise
required by applicable law. Neither party shall make public statements or
issue publicity or media releases with regard to this Agreement or the
relationship between the parties without the prior written approval of the
other party, except as may be otherwise required by law, securities
regulators or stock exchange regulations. Nothing herein shall prevent a
party from
_________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
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disclosing the terms of this Agreement to potential investors as
reasonably required by such potential investors to evaluate a potential
investment in, or purchase of assets of, such party, provided that all
such potential investors agree in writing to keep such information in
confidence and to use such information solely for purposes of evaluating
the business and financial condition of such party. Notwithstanding
anything to the contrary, CTI shall have the right to issue a press
release announcing the execution of this Agreement subject to the
approval, that shall not be unreasonably withheld, of such press release
by NPI.
18.9 FORCE MAJEURE. Neither party shall be responsible or liable to the other
party for any delay or failure to perform hereunder, other than the
failure to pay money when due, if such delay or failure results from
fire, explosion, labor dispute, earthquake, casualty or accident, lack or
failure of transportation facilities, epidemic, flood, drought, or by
reason of war, declared or undeclared, revolution, civil commotion, the
act of a public enemy, blockade or embargo, act of God, any inability to
obtain any requisite license, permit or authorization, or by reason of
law, proclamation, regulation, ordinance, demand, or requirement of any
government or by reason of any other cause whatsoever, whether similar or
dissimilar to those enumerated, beyond the reasonable control of the
party. With respect to labor disputes as described above, no party shall
be obligated to accede to any demands being made by employees or other
personnel. All such causes will delay performance hereunder for a period
equal to the delay resulting from any such causes and such additional
period as may be reasonably necessary to allow the party to resume its
obligations (not to exceed sixty (60) Days).
18.10 REPRESENTATION OF CORPORATE AUTHORITY. Each of NPI and CTI represents and
warrants to the other that (i) it has the full right, power and corporate
authority to enter into this Agreement and to make the promises set forth
in this Agreement and that there are no outstanding agreements,
assignments or encumbrances in existence inconsistent with the provisions
of this Agreement, and (ii) the execution, delivery and performance of
this Agreement does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it is
bound, nor to its knowledge, violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction
over it.
18.11 ENTIRE AGREEMENT. This Agreement and the Exhibits and Schedules hereto
set forth the entire agreement and understanding between the parties and
supersede and cancel all previous negotiations, agreements, commitments
and writings in respect of the subject matter hereof and there are no
understandings representations, conditions, warranties, express or
implied, statutory or otherwise made or assumed by the parties, other
than those expressly contained in this Agreement. Neither party shall be
bound by any term, clause, provision or conditions save as expressly
provided herein or as duly set forth on or subsequent to the date of this
Agreement in writing signed by duly authorized officers of each of the
parties.
_________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
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18.12 COUNTERPARTS. This Agreement may be signed in two or more counterparts,
each of which shall be an original, but all of which together shall
constitute one and the same instrument.
_________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal attested by the hands of their duly authorized representative on dates
indicated below.
CELL THERAPEUTICS, INC. NATURAL PHARMACEUTICALS, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------- -------------------
By: By:
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Title:President and Chief
Officer Executive Officer
_________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
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SCHEDULE A
Specifications
***
_________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
19
SCHEDULE B
***
_________________________
* The information above marked by *** has been omitted by a request for
confidential treatment. The omitted portion has been separately filed with the
Commission.
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