CONFIDENTIAL TREATMENT REQUESTED EXHIBIT 10.68
CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT
IS REQUESTED IS OMITTED AND IS NOTED WITH "[CONFIDENTIAL TREATMENT REQUESTED]."
AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
THIRD AMENDMENT TO AGREEMENT
THIS THIRD AMENDMENT TO AGREEMENT ("Third Amendment") is made and effective
as of this 12th day of November, 2001, by and between MDS (CANADA) INC., MDS
NORDION division, successor to MDS NORDION INC. ("Nordion"), and IDEC
PHARMACEUTICALS CORPORATION ("IDEC").
WHEREAS:
A. Nordion and IDEC are parties to that certain Agreement dated May 14,
1999, whereby Nordion agreed to manufacture and supply Isotope for use with
IDEC's Labelled Drug ("Isotope Agreement").
B. The Isotope Agreement was subsequently amended by a letter agreement
between the parties dated January 25, 2000 (`First Amendment"), a letter
agreement between the parties dated March 21, 2000 relating to Isotope dose size
("Isotope Dose Size Letter") and a Letter Agreement between the parties dated
March 22, 2001 ("Second Amendment"). The Isotope Agreement, as amended by the
First Amendment, Isotope Dose Size Letter and Second Amendment are collectively
referred to herein as the "Agreement."
C. Nordion and IDEC desire to further amend the Agreement as set forth in
this Third Amendment.
D. Unless otherwise defined herein, capitalized items as used herein shall
have the meanings as given thereto in the Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and subject to the terms and conditions hereinafter set out, the
parties agree as follows:
1. INCREASED DOSE SIZE, PRICE AND REPORTING.
1.1 Section 6.2 of the Agreement relating to production planning for
Clinical Trial and Pre-Commercial Phase supply is amended to provide
that Isotope may be shipped in as many as [CONFIDENTIAL TREATMENT
REQUESTED] sizes to be discussed by the parties and approved by IDEC,
however it is anticipated that a dose size of [CONFIDENTIAL TREATMENT
REQUESTED] per vial at Calibration will be required.
1.2 During the Commercial Phase the dose size shall be [CONFIDENTIAL
TREATMENT REQUESTED] at Calibration.
1
CONFIDENTIAL TREATMENT REQUESTED
1.3 Subject to Section 7.6 of the Agreement, the maximum purchase price
for Isotope during the Commercial Phase shall be [CONFIDENTIAL
TREATMENT REQUESTED] per dose. The purchase price includes all
shipping, insurance and customs charges ("Charges") currently
estimated to average [CONFIDENTIAL TREATMENT REQUESTED] per dose. The
parties agree to adjust the minimum purchase price on an annual basis
commencing [CONFIDENTIAL TREATMENT REQUESTED] to reflect any increase
or decrease in the average cost of such Charges incurred by Nordion
during the prior year.
1.4 Upon commencement of the Commercial Phase and notwithstanding the
notice required set out in Section 7.1(ii) of the Agreement, Nordion
shall [CONFIDENTIAL TREATMENT REQUESTED] for use with IDEC's
Monoclonal Antibody. Title in and to Isotope and risk of loss shall
[CONFIDENTIAL TREATMENT REQUESTED]. For the purposes of certainty,
Nordion may refuse to supply Isotope [CONFIDENTIAL TREATMENT
REQUESTED]. Such refusal to supply shall not affect IDEC's minimum
purchase commitment under the Agreement.
1.5 From time to time during the Commercial Phase, but in any event not
less than [CONFIDENTIAL TREATMENT REQUESTED], the parties shall meet
to discuss Isotope vial fill optimization. If the parties determine in
good faith that the amount of Isotope shipped per dose can be reduced
without impacting the [CONFIDENTIAL TREATMENT REQUESTED] at
Calibration dose size requirement or that a smaller dose size meets
Labelled Drug administration requirements, the purchase price shall,
subject to Section 7.6 of the Agreement, be based on a maximum price
of [CONFIDENTIAL TREATMENT REQUESTED] per [CONFIDENTIAL TREATMENT
REQUESTED] at Calibration, plus Charges.
1.6 Once construction of the New Faci1ity is comp1ete and it is capable of
supplying Isotope the readiness fee in Section 6.5 of the Agreement
shall be increased to [CONFIDENTIAL TREATMENT REQUESTED] and
[CONFIDENTIAL TREATMENT REQUESTED], shall not [CONFIDENTIAL TREATMENT
REQUESTED]. In the event Nordion is sourcing radiochemica1 grade
yttrium-90 in house, for the purposes or Section 6.5 of the Agreement,
the [CONFIDENTIAL TREATMENT REQUESTED] shall be [CONFIDENTIAL
TREATMENT REQUESTED].
1.7 Nordion agrees that it shall provide or otherwise cause to be provided
to IDEC the following reports on a per customer basis by e-mail or
fax:
(i) confirmation, within 1 full business day of receipt of Isotope
orders, setting out the total number of orders placed in a
particular day from customers including a summary of declined
orders for reasons including
2
CONFIDENTIAL TREATMENT REQUESTED
but not limited to customer's failure to have a radioactive
materials license;
(ii) advance shipping notice including information with respect to
planned Isotope shipping dates, customer address and quantities
ordered, provided on the day of shipment;
(iii) weekly summary exception reports provided on Friday of each
week setting out missed shipments (arrival after 12 noon in
customer's time zone), product complaints and replaced doses in
such week, if applicable; and
(iv) any and all distribution or other reports required by the FDA.
For the purpose of the audit rights set out in Section 11.1 of the
Agreement, IDEC'S right of audit shall be extended for the purpose of
verification of fulfillment of Nordion's obligations set forth in this
Section 1.7. Any auditor engaged pursuant to Section 11.1 of the
Agreement shall prior to carrying out such audit enter into a
confidentiality agreement reasonably acceptable to Nordion and IDEC
for the purpose of protecting the confidential information of each
respective party.
2. TERMINATION RIGHTS.
2.1 IDEC agrees that it shall not exercise its termination rights set
forth in Section 17.3 of the Agreement and such termination right,
except as set forth below, shall be suspended until such time as
[CONFIDENTIAL TREATMENT REQUESTED] reach [CONFIDENTIAL TREATMENT
REQUESTED] in the aggregate, including [CONFIDENTIAL TREATMENT
REQUESTED] under the Agreement or to third parties during the period
in which the Agreement remains in force [CONFIDENTIAL TREATMENT
REQUESTED]. Nordion shall notify IDEC as soon as Nordion becomes aware
that the [CONFIDENTIAL TREATMENT REQUESTED] has been reached.
2.2 Nordion agrees that it shall not exercise its termination rights set
forth in Section 17.3 of the Agreement and such termination rights
shall be suspended until Nordion has had the capability to
commercially supply Isotope from the KRMF Facility (as such term is
defined in Section 4.1 of this Third Amendment below) for five years.
This five-year period includes the 24-month notice requirement set
forth in Section 17.3 of the Agreement. For purposes of this Section
2.2 and elsewhere in this Third Amendment, Nordion shall be deemed to
be capable of commercially supplying Isotope from the KRMF Facility as
of [CONFIDENTIAL TREATMENT REQUESTED]. Nordion shall timely notify
IDEC of such date.
2.3 Notwithstanding Section 2.1 of this Third Amendment, IDEC may exercise
its termination right pursuant to Section 17.3 of the Agreement at any
time prior to the later of (i) BLA approval of the Labelled Drug or
(ii) the date Nordion is
3
CONFIDENTIAL TREATMENT REQUESTED
capable of commercially supplying Isotope from the KRMF Facility. In
the event that IDEC exercises its right to terminate the Agreement
pursuant to this Section 2.3, or Nordion or IDEC terminate the
Agreement pursuant to Section 17.6 of the Agreement, IDEC,
[CONFIDENTIAL TREATMENT REQUESTED], shall pay Nordion an amount equal
to the sum of:
(a) the lesser of (i) [CONFIDENTIAL TREATMENT REQUESTED] minus
[CONFIDENTIAL TREATMENT REQUESTED] under the Agreement from the
sale of Isotope and/or Yttriurn-90 manufactured by the
[CONFIDENTIAL TREATMENT REQUESTED] up to the effective date of
termination or (ii) Nordion's [CONFIDENTIAL TREATMENT
REQUESTED] associated with the establishment of the
[CONFIDENTIAL TREATMENT REQUESTED] to the date of the
termination notice minus [CONFIDENTIAL TREATMENT REQUESTED]
under the Agreement from the sale of Isotope and/or Yttrium-90
manufactured by the [CONFIDENTIAL TREATMENT REQUESTED] up to
the effective date of termination, plus
(b) an amount equal to [CONFIDENTIAL TREATMENT REQUESTED],
provided, however, in no event shall such amount exceed
[CONFIDENTIAL TREATMENT REQUESTED], plus
(c) any amounts otherwise payable pursuant to Section 17.3 of
the Agreement.
[CONFIDENTIAL TREATMENT REQUESTED]
Upon receipt of notice of termination of the Agreement pursuant to
this Section 2.3, Nordion may cease all work on the KRMF Facility.
2.4 In addition to IDEC's rights set forth in Section 2.3 of this Third
Amendment, and notwithstanding Section 2.1 above, IDEC may terminate
the Agreement with respect to [CONFIDENTIAL TREATMENT REQUESTED], at
any time prior to the later of (i) BLA approval of the Labelled Drug,
or (ii) the date Nordion is capable of commercially supplying Isotope
from the KRMF Facility. In the event that IDEC exercises its right
under this Section 2.4, IDEC, in order to [CONFIDENTIAL TREATMENT
REQUESTED], provided, however, in no event shall such amount exceed
[CONFIDENTIAL TREATMENT REQUESTED].
2.5 Subject to Section 7.6 of the Agreement, Nordion agrees that IDEC may
at any time within [CONFIDENTIAL TREATMENT REQUESTED] following the
effective date of termination pursuant to Sections 2.3, 2.4, 5.11 and
5.13 of this Third Amendment reinstate the Agreement as amended by
this Third Amendment upon [CONFIDENTIAL TREATMENT REQUESTED] prior
written notice to Nordion, and provided the parties agree on an amount
to be secured in Escrow to
4
CONFIDENTIAL TREATMENT REQUESTED
be negotiated in good faith for [CONFIDENTIAL TREATMENT REQUESTED]
after the date of termination, as the case may be. It is acknowledged
and agreed that the Agreement, as reinstated, shall [CONFIDENTIAL
TREATMENT REQUESTED]. Notwithstanding anything to the contrary set
forth in this Section 2.5, in the event Nordion advises IDEC in
writing during the [CONFIDENTIAL TREATMENT REQUESTED] reinstatement
period that it has initiated negotiations with a third party regarding
use of [CONFIDENTIAL TREATMENT REQUESTED]. IDEC shall have
[CONFIDENTIAL TREATMENT REQUESTED] from the date of such notification
to elect with respect to such facility to reinstate the Agreement in
accordance with this Section 2.5 or waive such right of reinstatement.
IDEC's failure to respond within the forgoing [CONFIDENTIAL TREATMENT
REQUESTED] period shall be deemed a waiver of IDEC's right of
reinstatement. In the event IDEC waives such right of reinstatement
and Nordion's negotiations with such third party fail to result in
agreement to utilize the applicable facility, Nordion shall promptly
notify IDEC and IDEC shall again have thc right of reinstatement set
forth in this Section 2.5 until expiration of the original
[CONFIDENTIAL TREATMENT REQUESTED] reinstatement period, subject to
Nordion's continuing right to initiate negotiations with a third party
and to require IDEC to elect to reinstate the Agreement or waive such
right within [CONFIDENTIAL TREATMENT REQUESTED].
2.6 This Article 2 of this Third Amendment hereby supersedes Article 2 of
the Second Amendment. In the event IDEC exercises the termination
rights set forth in Section 2.4 of this Third Amendment, Article 2 of
the Second Amendment shall be reinstated and Sections 2.1 - 2.5, 3.1 -
3.4, 4.1 - 4.4, 51 - 5.13 and 7.4 of this Third Amendment shall no
longer be applicable, provided IDEC has met all of its obligations set
out in Section 2.4 above.
3. MINIMUM PURCHASE COMMITMENT.
3.1 The [CONFIDENTIAL TREATMENT REQUESTED] Commercial Phase minimum
purchase commitment set forth in Section 7.1(i) the Agreement is
hereby amended and replaced with the following Commercial Phase
minimum purchase commitment.
----------------------------------------------------------------------
MINIMUM PURCHASE COMMITMENT
----------------------------------------------------------------------
[CONFIDENTIAL TREATMENT Gross Revenue excluding Charges
REQUESTED] Period ($ US) from the sale of Isotope
----------------------------------- ----------------------------------
Commencement of Commercial Phase
through the date
[CONFIDENTIAL TREATMENT REQUESTED] [CONFIDENTIAL TREATMENT REQUESTED]
following the commencement of the
Commercial Phase
[CONFIDENTIAL TREATMENT REQUESTED]
--------------------------- ------- ----------------------------------
[CONFIDENTIAL TREATMENT REQUESTED] [CONFIDENTIAL TREATMENT REQUESTED]
--------------------------- ------- ----------------------------------
[CONFIDENTIAL TREATMENT REQUESTED] [CONFIDENTIAL TREATMENT REQUESTED]
----------------------------------- ----------------------------------
[CONFIDENTIAL TREATMENT [CONFIDENTIAL TREATMENT
5
CONFIDENTIAL TREATMENT REQUESTED
REQUESTED] REQUESTED]
----------------------------------- ----------------------------------
[CONFIDENTIAL TREATMENT REQUESTED] [CONFIDENTIAL TREATMENT REQUESTED]
----------------------------------- ----------------------------------
Cumulative Total [CONFIDENTIAL TREATMENT REQUESTED]
----------------------------------- ----------------------------------
3.2 Notwithstanding anything to the contrary set forth in Section 7.1(iii)
of the Agreement, commencing as of the end of [CONFIDENTIAL TREATMENT
REQUESTED] of the Commercial Phase, and at the end of each
[CONFIDENTIAL TREATMENT REQUESTED] period thereafter, minimum payments
payable to Nordion as a result of IDEC's Commercial Phase minimum
purchase commitment (as such commitment may be adjusted pursuant to
Sections 3.3, 3.4 and 3.5 below) shall take into account [CONFIDENTIAL
TREATMENT REQUESTED] as well as [CONFIDENTIAL TREATMENT REQUESTED].
For example, if Nordion's [CONFIDENTIAL TREATMENT REQUESTED] was
[CONFIDENTIAL TREATMENT REQUESTED] during [CONFIDENTIAL TREATMENT
REQUESTED], and [CONFIDENTIAL TREATMENT REQUESTED] during
[CONFIDENTIAL TREATMENT REQUESTED], IDEC would owe Nordion
[CONFIDENTIAL TREATMENT REQUESTED] for [CONFIDENTIAL TREATMENT
REQUESTED], since [CONFIDENTIAL TREATMENT REQUESTED] exceeded IDEC's
[CONFIDENTIAL TREATMENT REQUESTED] for such period. At the end of
[CONFIDENTIAL TREATMENT REQUESTED], IDEC, however, would be required
to pay [CONFIDENTIAL TREATMENT REQUESTED] to Nordion. [CONFIDENTIAL
TREATMENT REQUESTED] for [CONFIDENTIAL TREATMENT REQUESTED].
Continuing this example, if [CONFIDENTIAL TREATMENT REQUESTED]was
[CONFIDENTIAL TREATMENT REQUESTED], IDEC would owe Nordion
[CONFIDENTIAL TREATMENT REQUESTED] at the end of [CONFIDENTIAL
TREATMENT REQUESTED], and [CONFIDENTIAL TREATMENT REQUESTED] --
[CONFIDENTIAL TREATMENT REQUESTED] plus prior [CONFIDENTIAL TREATMENT
REQUESTED].
If IDEC were, at the end of any [CONFIDENTIAL TREATMENT REQUESTED]
period designated above, due a refund of any over-payment of a
[CONFIDENTIAL TREATMENT REQUESTED], IDEC shall invoice Nordion for
such [CONFIDENTIAL TREATMENT REQUESTED] and Nordion shall forward
payment to IDEC within thirty (30) days of the date of the invoice.
For example, if during [CONFIDENTIAL TREATMENT REQUESTED] of the
example described above, [CONFIDENTIAL TREATMENT
6
CONFIDENTIAL TREATMENT REQUESTED
REQUESTED], IDEC would be entitled to [CONFIDENTIAL TREATMENT
REQUESTED]. [CONFIDENTIAL TREATMENT REQUESTED] made by IDEC
[CONFIDENTIAL TREATMENT REQUESTED] plus [CONFIDENTIAL TREATMENT
REQUESTED] minus [CONFIDENTIAL TREATMENT REQUESTED].
3.3 In the event Nordion has not submitted an updated DMF (or NDA, if
required) for the KRMF Facility to the FDA on or before [CONFIDENTIAL
TREATMENT REQUESTED]. IDEC's [CONFIDENTIAL TREATMENT REQUESTED] set
forth in Section 3,1 above and the [CONFIDENTIAL TREATMENT REQUESTED]
amount associated with the [CONFIDENTIAL TREATMENT REQUESTED] shall
each be reduced by [CONFIDENTIAL TREATMENT REQUESTED] and shall
continue to be reduced by [CONFIDENTIAL TREATMENT REQUESTED]on the
12th day each month following [CONFIDENTIAL TREATMENT REQUESTED] until
the updated DMF (or NDA, if required) is submitted, provided, however,
in no event shall such reductions cause the [CONFIDENTIAL TREATMENT
REQUESTED] and amount associated with the [CONFIDENTIAL TREATMENT
REQUESTED] to fall below [CONFIDENTIAL TREATMENT REQUESTED].
Attachment 1, incorporated herein by reference, sets forth the
[CONFIDENTIAL TREATMENT REQUESTED] schedules as so reduced by
[CONFIDENTIAL TREATMENT REQUESTED] increments.
3.4 In the event Nordion has not established the capability to commence
commercial supply of Isotope from the KRMF Facility by [CONFIDENTIAL
TREATMENT REQUESTED], provided and to the extent such delay is not the
result of the failure by IDEC to allow Nordion to cross-file the DMF
against IDEC's BLA, IDEC's [CONFIDENTIAL TREATMENT REQUESTED] and the
[CONFIDENTIAL TREATMENT REQUESTED] amount associated with the
[CONFIDENTIAL TREATMENT REQUESTED], as the same may have been reduced
pursuant to Section 3.3 above, shall each be further reduced by
[CONFIDENTIAL TREATMENT REQUESTED] on the 12th day of each month
following [CONFIDENTIAL TREATMENT REQUESTED] until the date by which
Nordion is capable of commercially supplying Isotope from the KRMF
Facility. In no event shall such reductions cause the [CONFIDENTIAL
TREATMENT REQUESTED] and the amount associated with the [CONFIDENTIAL
TREATMENT REQUESTED] to fall below [CONFIDENTIAL TREATMENT REQUESTED].
Attachment 1, incorporated herein by reference, sets forth the
[CONFIDENTIAL TREATMENT REQUESTED] schedules as so reduced by
[CONFIDENTIAL TREATMENT REQUESTED] increments.
3.5 If during the [CONFIDENTIAL TREATMENT REQUESTED], IDEC's demand for
Isotope under-utilizes the capacity of [CONFIDENTIAL TREATMENT
REQUESTED], the [CONFIDENTIAL TREATMENT REQUESTED] and the amount
associated with the [CONFIDENTIAL TREATMENT REQUESTED] shall be
[CONFIDENTIAL TREATMENT
7
CONFIDENTIAL TREATMENT REQUESTED
REQUESTED] to the extent of [CONFIDENTIAL TREATMENT REQUESTED].
Nordion shall have no obligation to seek out sales to third parties
[CONFIDENTIAL TREATMENT REQUESTED].
4. KRMF FACILITY.
4.1 Nordion shall use commercially reasonable efforts to construct a new
automated production suite capable of producing Isotope ("KRMF
Facility"). It is understood and acknowledged by the parties that the
Completion Dates and the sequence for carrying out the activities
shall serve only as a guide. Nordion shall use commercially reasonable
efforts to complete projects on or in advance of stated Completion
Dates. IDEC acknowledges, however, that Nordion's ability to meet
Completion Dates depends heavily on the ability of external vendors,
suppliers and consultants to complete engineering, manufacture,
deliveries and projects in a timely manner. The project schedule shall
be as follows:
COMPLETION DATE
---------------
(IN MONTHS FOLLOWING
EVENT EXECUTION OF THIRD
----- AMENDMENT)
Preliminary Engineering [CONFIDENTIAL TREATMENT
REQUESTED]
Major Equipment purchased [CONFIDENTIAL TREATMENT
REQUESTED]
Dispensing line installation [CONFIDENTIAL TREATMENT
REQUESTED]
Process Validation Completed [CONFIDENTIAL TREATMENT
REQUESTED]
Submission of updated DMF (or NDA, [CONFIDENTIAL TREATMENT
if required) REQUESTED]
Nordion shall provide IDEC with detailed monthly progress reports as
to the status of the project.
4.2 The KRMF Facility shall produce Isotope for [CONFIDENTIAL TREATMENT
REQUESTED] patient treatments or as otherwise agreed. Subject to
Section 7.4 of the Agreement, Nordion shall produce Isotope from the
KRMF Facility for additional patient treatment days provided
[CONFIDENTIAL TREATMENT REQUESTED] or more vials are ordered for such
day. Upon IDEC's request, and provided Nordion has the capacity to
supply, Nordion shall supply Yttrium-90 from the KRMF Facility for
other IDEC applications on the same terms and conditions of the
Agreement subject to equitable adjustments based on dose requirements
and such purchases shall be applied to IDEC's minimum purchase
commitment described in Article 3 above.
8
CONFIDENTIAL TREATMENT REQUESTED
4.3 The capacity of the KRMF Facility shall not be less than [CONFIDENTIAL
TREATMENT REQUESTED], including [CONFIDENTIAL TREATMENT REQUESTED]
required for quality control and to meet regulating requirements,
provided, however, in no event shall the capacity of the KRMF Facility
be less than [CONFIDENTIAL TREATMENT REQUESTED] for commercial
shipment [CONFIDENTIAL TREATMENT REQUESTED].
4.4 Forty five (45) days after the establishment of the capability to
commence Commercial Supply of Isotope from the KRMF Facility, Nordion
[CONFIDENTIAL TREATMENT REQUESTED], provided, however, this Section
shall not reduce or relieve Nordion's supply obligation under the
Agreement.
5. ESCROW.
5.1 Upon execution of this Third Amendment, IDEC shall establish an escrow
account with Union Bank of California, N.A. ("Escrow"). Each party
including Escrow shall execute and abide by the Escrow Agreement
attached hereto as Attachment 2. IDEC shall, as set forth in Section
5.2, 5.3 and 5.4 below, deposit funds into Escrow to ensure payment to
Nordion of the minimum purchase commitment under the Agreement as well
as IDEC's obligation to [CONFIDENTIAL TREATMENT REQUESTED] of this
Third Amendment, or as otherwise set forth below. The cost of
establishing and maintaining the Escrow shall be shared by IDEC and
Nordion equally.
IDEC shall have the right to direct Escrow to invest the funds in
accordance with the investment guidelines attached hereto as
Attachment 3. Subject to the terms of this Third Amendment, IDEC shall
receive the full benefit of investment returns paid on funds in
Escrow. Investment returns may be drawn by IDEC, in accordance with
this Third Amendment, from Escrow on a quarterly basis.
5.2 Upon execution of this Third Amendment, IDEC shall deposit an amount
equal to [CONFIDENTIAL TREATMENT REQUESTED] associated with
[CONFIDENTIAL TREATMENT REQUESTED] (as such [CONFIDENTIAL TREATMENT
REQUESTED] and amounts are defined in Attachment 4 hereto).
5.3 IDEC shall make additional deposits into Escrow equal to the
[CONFIDENTIAL TREATMENT REQUESTED] associated with [CONFIDENTIAL
TREATMENT REQUESTED] as defined in Attachment 4. For purposes of
IDEC's obligations hereunder, Nordion and IDEC agree that the deposits
set forth in Attachment 4 [CONFIDENTIAL TREATMENT REQUESTED]. Nordion
shall notify IDEC in writing not less than [CONFIDENTIAL TREATMENT
REQUESTED] prior to the anticipated commencement of the work
associated with each [CONFIDENTIAL TREATMENT REQUESTED]. During the
[CONFIDENTIAL TREATMENT REQUESTED] prior to each anticipated
commencement date, IDEC shall have the right to inspect the work in
progress to
9
CONFIDENTIAL TREATMENT REQUESTED
determine if the work associated with [CONFIDENTIAL TREATMENT
REQUESTED] is imminent and appropriate based on work completed. IDEC
shall notify Nordion in writing not less than [CONFIDENTIAL TREATMENT
REQUESTED] prior to each anticipated commencement date if IDEC in its
reasonable discretion determines that the work to date is materially
deficient or if commencement of work associated with [CONFIDENTIAL
TREATMENT REQUESTED] is not imminent. If IDEC fails to so notify
Nordion, IDEC shall make the requisite deposit into Escrow on or prior
to the anticipated commencement date of the [CONFIDENTIAL TREATMENT
REQUESTED]. Any notice by IDEC under this Section 5.3 shall include a
detailed explanation of the reasons why the amount associated with the
[CONFIDENTIAL TREATMENT REQUESTED]is not yet payable to Nordion
pursuant to this Section 5.3.
Upon receipt of such notice, if any, Nordion shall commence cure of
any deficiency noted and shall notify IDEC upon completion. IDEC shall
have [CONFIDENTIAL TREATMENT REQUESTED] following such notice to
inspect the work and to determine if the work associated with the
[CONFIDENTIAL TREATMENT REQUESTED] is imminent and appropriate. On or
prior to expiration of such [CONFIDENTIAL TREATMENT REQUESTED] period,
IDEC shall notify Nordion if IDEC in its reasonable discretion
determines that the work remains materially deficient or if
commencement of work associated with the [CONFIDENTIAL TREATMENT
REQUESTED] is not imminent. If IDEC fails to so notify Nordion, IDEC
shall make the requisite deposit into Escrow on or prior to the end of
such [CONFIDENTIAL TREATMENT REQUESTED] period. Upon receipt of any
notice under this second paragraph of Section 5.3, Nordion shall
commence cure of any deficiency noted and reimburse IDEC for its
reasonable travel and other out-of-pocket expenses including the
reasonable expenses and costs of any expert retained by IDEC to review
Nordion's work. Nordion shall notify IDEC upon completion of the work
and the [CONFIDENTIAL TREATMENT REQUESTED] inspection period described
above shall repeat itself until the work is completed.
In the event IDEC fails to make a requisite deposit into the Escrow in
accordance with this Section 5.3, Nordion shall, on [CONFIDENTIAL
TREATMENT REQUESTED] prior written notice to IDEC and Escrow, and
provided IDEC has not cured such failure within such [CONFIDENTIAL
TREATMENT REQUESTED], be entitled to [CONFIDENTIAL TREATMENT
REQUESTED].
5.4 After the later of (i) BLA approval or (ii) the date Nordion is
capable of commercially supplying Isotope from the KRMF Facility, IDEC
shall then deposit into Escrow [CONFIDENTIAL TREATMENT REQUESTED] to
ensure payment to Nordion of the [CONFIDENTIAL TREATMENT REQUESTED]
under the Agreement. In the event IDEC fails to make the requisite
deposit into the Escrow in accordance with this Section 5.4, Nordion
10
CONFIDENTIAL TREATMENT REQUESTED
shall, upon [CONFIDENTIAL TREATMENT REQUESTED] prior written notice to
IDEC and Escrow, and provided IDEC has not cured such failure within
such [CONFIDENTIAL TREATMENT REQUESTED] period, be entitled to
withdraw and retain all sums in Escrow (excluding investment returns),
as reconciled pursuant to Section 5.6 below, and Section 2 of the
Second Amendment shall be reinstated and Sections 2.1 -- 2.5, 3,1 --
34, 4.1 -- 4.4, 5.1--5.13 and 7.4 of this Third Amendment shall no
longer be applicable.
5.5 For the purposes of Sections 5.1, 5.2, 5.3 and 54 above, the remedial
provisions of Section 17.4 of the Agreement shall not apply to any
breach of these Sections by IDEC.
5.6 Notwithstanding anything to the contrary set forth in Sections 5.2,
5.3 and 54 of this Third Amendment, IDEC and Nordion agree that the
amount in Escrow at any time during the term of this Agreement shall
not exceed [CONFIDENTIAL TREATMENT REQUESTED], as the same may be
adjusted pursuant to Sections 3.3 and 3.4 above, minus cumulative
[CONFIDENTIAL TREATMENT REQUESTED]. On the earlier of (i) the date
IDEC would otherwise be required to deposit [CONFIDENTIAL TREATMENT
REQUESTED] into Escrow under Section 5.4 above or [CONFIDENTIAL
TREATMENT REQUESTED] plus (b) the amounts deposited into Escrow under
Sections 5.2 and 5.3 exceed [CONFIDENTIAL TREATMENT REQUESTED] as the
same may be adjusted pursuant to Sections 3.3 and 3.4, IDEC and
Nordion shall meet to reconcile the amount in Escrow against the
amount required to be in Escrow under this Third Amendment. Any amount
held in Escrow which exceeds the amount required under this Third
Amendment shall be immediately disbursed to IDEC. IDEC and Nordion
shall also meet not less than each calendar quarter following the
initial reconciliation to reconcile the amount in Escrow against the
amount required in Escrow and any amount then held in Escrow which
exceeds the amount required under this Third Amendment shall be
immediately disbursed to IDEC.
For example, if [CONFIDENTIAL TREATMENT REQUESTED] was [CONFIDENTIAL
TREATMENT REQUESTED], the amount deposited in Escrow under Sections
5.2 and 5.3 was [CONFIDENTIAL TREATMENT REQUESTED], [CONFIDENTIAL
TREATMENT REQUESTED] was [CONFIDENTIAL TREATMENT REQUESTED, and the
[CONFIDENTIAL TREATMENT REQUESTED] had yet to be established, then
upon reconciliation, IDEC would be entitled to withdraw [CONFIDENTIAL
TREATMENT REQUESTED] from Escrow. (The amount in Escrow [CONFIDENTIAL
TREATMENT REQUESTED] exceeds the [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] minus [CONFIDENTIAL TREATMENT
REQUESTED] [CONFIDENTIAL TREATMENT REQUESTED].
Continuing this example, if during the period until the next
reconciliation the [CONFIDENTIAL TREATMENT REQUESTED] requirement was
reduced
11
CONFIDENTIAL TREATMENT REQUESTED
by [CONFIDENTIAL TREATMENT REQUESTED] pursuant to Section 3.3 of this
Third Amendment and [CONFIDENTIAL TREATMENT REQUESTED] increased by
[CONFIDENTIAL TREATMENT REQUESTED], IDEC would be entitled to withdraw
[CONFIDENTIAL TREATMENT REQUESTED] from Escrow upon the next
reconciliation. (The amount in Escrow [CONFIDENTIAL TREATMENT
REQUESTED] exceeds the [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] minus [CONFIDENTIAL TREATMENT
REQUESTED] [CONFIDENTIAL TREATMENT REQUESTED].
Further continuing this example, if the next reconciliation occurs on
thc date IDEC would otherwise be required to deposit [CONFIDENTIAL
TREATMENT REQUESTED] into Escrow under Section 5.4 of this Third
Amendment and [CONFIDENTIAL TREATMENT REQUESTED] increased by
[CONFIDENTIAL TREATMENT REQUESTED]. IDEC would not be required to
deposit [CONFIDENTIAL TREATMENT REQUESTED] into Escrow, but rather
would be entitled to withdraw [CONFIDENTIAL TREATMENT REQUESTED] from
Escrow. (Thc amount in Escrow [CONFIDENTIAL TREATMENT REQUESTED]
exceeds the [CONFIDENTIAL TREATMENT REQUESTED] [CONFIDENTIAL TREATMENT
REQUESTED] minus [CONFIDENTIAL TREATMENT REQUESTED] [CONFIDENTIAL
TREATMENT REQUESTED].
Finally, if on the next reconciliation date, [CONFIDENTIAL TREATMENT
REQUESTED] had increased by [CONFIDENTIAL TREATMENT REQUESTED], IDEC
would be entitled to withdraw the remaining [CONFIDENTIAL TREATMENT
REQUESTED] in Escrow and would have no further obligation to make
deposits into Escrow. (The amount in Escrow [CONFIDENTIAL TREATMENT
REQUESTED] exceeds the [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED] minus [CONFIDENTIAL TREATMENT
REQUESTED] [CONFIDENTIAL TREATMENT REQUESTED]. Since at any time
following this reconciliation date [CONFIDENTIAL TREATMENT REQUESTED]
would exceed the [CONFIDENTIAL TREATMENT REQUESTED], IDEC would have
no further obligation to make deposits into Escrow.
5.7 In addition to Nordion's right to withdraw funds from Escrow as set
forth in Sections 5.3 and 5.4 above, Nordion shell have the right to
withdraw funds from Escrow as follows:
(i) In the event of termination of the Agreement:
(a) by IDEC pursuant to Sections 2.3 or 2.4 of this Third
Amendment, or
(b) by Nordion or IDEC pursuant to Section 17.6 of the
Agreement,
12
CONFIDENTIAL TREATMENT REQUESTED
Nordion shall have the right to, (i) request and receive
payment from IDEC of those amounts set out in Section 2.3 of
this Third Amendment, as applicable, with respect to
[CONFIDENTIAL TREATMENT REQUESTED], (ii) submit requests for
disbursement and receive payment from Escrow, corresponding to
the amount determined in accordance with Sections 2.3 and 2.4
of this Third Amendment, as applicable, with respect to
[CONFIDENTIAL TREATMENT REQUESTED].
(ii) After the later of (i) BLA approval or (ii) the date Nordion is
capable of commercially supplying Isotope from the KRMF
Facility, Nordion shall have, on notice to IDEC and Escrow, the
right to submit requests for disbursements and receive payment
from Escrow of amounts corresponding to any [CONFIDENTIAL
TREATMENT REQUESTED] of Isotope pursuant to Section 3.2 of this
Third Amendment.
5.8 In addition to IDEC's right to withdraw from Escrow as set forth in
Section 5.6 above, IDEC shall have the right to withdraw investment
returns from Escrow on a quarterly basis to the extent the principal
has not been impaired as a result of negative investment returns.
Requests for disbursement from Escrow of investment returns shall be
submitted in writing to Nordion and Escrow. The request for
disbursement shall include the determination and details of the amount
claimed, signed by an officer of IDEC. Unless IDEC and Escrow receive
written objection signed by an officer of Nordion within five (5)
business days after delivery to Nordion and Escrow of IDEC's request
for disbursement, Escrow shall immediately remit such payment to IDEC.
In its objection, Nordion shall further stipulate those amounts in
dispute and the details and reasons disbursement of such amounts are
in dispute. The amounts not in dispute due and payable to IDEC shall
be immediately disbursed to IDEC from Escrow.
5.9 Requests for disbursement from Escrow by either party under this Third
Amendment shall be submitted to the other party and Escrow. The
requests for disbursement shall include the determination and details
of the amount claimed signed by an officer of the requesting party.
Unless the requesting party and Escrow receive written objection
signed by an officer of the other party within five (5) business days
after delivery to the other party and Escrow of the requesting party's
request for disbursement, Escrow shill immediately remit such payment
to requesting party. In its objection, the objecting party shall
further stipulate those amounts in dispute and the details and reason
such amounts are in dispute. The remaining amounts not in dispute due
and payable to requesting party shall be immediately disbursed to the
requesting party from Escrow.
5.10 Any controversy or dispute arising out of Section 5.9 above shall be
resolved through binding arbitration conducted by the American
Arbitration Association under its Commercial Arbitration Rules
("Rules"). The arbitration shall be
13
CONFIDENTIAL TREATMENT REQUESTED
conducted by a single arbitrator mutually selected by the parties from
the National Panel of Commercial Arbitrators, or failing such
agreement within three (3) days
14
CONFIDENTIAL TREATMENT REQUESTED
of the Arbitration Demand (as defined below), as appointed by the
American Arbitration Association under the Rules. Should the
requesting party described in Section 5.9 disagree with the objecting
party's objection set out above, the requesting party (except if the
parties otherwise agree) shall send a demand of intention to arbitrate
(the "Arbitration Demand") to the objecting party within 10 days of
receipt by the requesting party of objecting party's notice of
objection set out above. The objecting party shall respond to the
Arbitration Demand within seven (7) days of receipt of such demand.
Notwithstanding the submission of an Arbitration Demand, Escrow shall
disburse all amounts not in dispute.
The parties shall commence arbitration on the fifteenth (15th)
business day after receipt by the objecting party of the Arbitration
Demand or such date thereafter at the earliest convenience of the
arbitrator. The arbitrator may for good cause extend any period of
time set out in this Section 5.10. The arbitration shall be held at
the offices of the arbitrator in the City of New York or at such other
location as mutually agreed by the parties. The parties shall use
reasonable efforts to complete such arbitration within one (1) day.
The arbitrator shall render his/her decision as soon as reasonably
possible after the conclusion of the arbitration proceedings. Nordion
and IDEC agree that such decision shall be binding and non-appealable.
The costs of arbitration shall be paid by the losing party with each
party to bear its own attorney fees. The decision of the arbitrator,
pursuant to this section, shall be limited to determination of the
following issues, as the case may be (i) determination of whether or
not thc requesting party's right to draw against the Escrow has been
triggered, and (ii) the amount that may be drawn from Escrow. In
considering the matter the arbitrator shall only be entitled to
consider (i) notices and reports provided in accordance with this
Third Amendment, and (ii) financial records and independent auditor
reports (if any), with respect to Isotope sales activities, prepared
in accordance with generally accepted accounting principles, including
Isotope Batch manufacturing records, Isotope shipping records, Isotope
accounts receivable and bad debts (purged of Confidential
Information), and other such similar information or financial records
as those referenced in this sub item (ii). For the purpose of clarity,
IDEC acknowledges that Nordion's obligations under the Agreement are
generally limited to the manufacture and distribution of Isotope, and
IDEC acknowledges and agrees that under no circumstances shall IDEC
argue or submit or the arbitrator be entitled to raise or consider
objection to payment of amounts under the Agreement from Escrow based
on (a) competitive market conditions encountered by Nordion or IDEC
for the sale of Isotope or Labelled Drug, (b) Nordion's lack of
marketing activities with respect to sale of Isotope to third parties,
(c) the purchase price of Isotope charged by Nordion to third parties
unless in breach of contract, (d) Force Majeure delaying or preventing
IDEC from carrying out its obligations under the Agreement, (e) actual
costs incurred to construct the KRMF Facility, or (f) Nordion's
refusal to supply Isotope to customers who fail to pay invoices as
they become due.
The written decision of the arbitrator shall be sufficient authority
to require and authorize release or withholding by the Escrow of funds
in Escrow in accordance
15
CONFIDENTIAL TREATMENT REQUESTED
with such decision. The arbitrator shall provide a brief written
summary to both parties of the reasons and basis of the decision. Such
decision shall be enforceable by any court of competent jurisdiction.
5.11 In the event the Agreement is terminated by IDEC or Nordion pursuant
to Section 17.5 of the Agreement (bankruptcy), the party not subject
to the proceedings described in section 17.5 of the Agreement shall,
on notice to the other party and Escrow, be entitled to withdraw and
retain the amount in Escrow at such date as reconciled pursuant to
Section 5.6 above. In the event Nordion terminates the Agreement
pursuant to this Section 5.11, IDEC shall have a reinstatement right
equivalent to the reinvestment right set forth in Section 2.5 of this
Third Amendment following dismissal of such proceedings.
5.12 In the event of termination of the Agreement for material breach by
either party pursuant to Section 17.4 of the Agreement (material
breach), all sums in Escrow as of the date of termination shall, in
the event of contested termination by the other party notified to the
terminating parry and Escrow in writing within seven (7) days of
termination, remain in Escrow pending final determination of the
matter by arbitration as described in Section 5.10 above. In the event
the other party is found by the arbitrator to be in material breach of
the Agreement, the terminating party shall be entitled to withdraw all
sums in Escrow. If the other party is found by the arbitrator not to
be in material breach of the Agreement, such other party shall be
entitled to withdraw all sums in Escrow. If a termination by IDEC for
material breach is not contested by Nordion, all sums in Escrow shall
be disbursed to IDEC. If a termination for material breach by Nordion
is not contested by IDEC, all sums in escrow shall be disbursed to
Nordion. Notwithstanding anything to the contrary Set forth in this
Section 5.12, the decision of the arbitrator pursuant to this Section
5.12 shall not limit IDEC or Nordion, as the case may be, from
pursuing its rights and remedies under the Agreement, including the
right to seek damages, including the right to seek the disbursed
funds.
5.13 In the event of termination of the Agreement by IDEC or Nordion
pursuant to Section 24.1 of the Agreement (Force Majeure), the
terminating party shall, on notice to the other party, and Escrow, be
entitled to withdraw and retain the amount in Escrow at such date as
reconciled pursuant to Section 5.6 above. In the event Nordion
terminates the Agreement pursuant to this Section 5.13, IDEC shall
have a reinstatement right equivalent to the reinstatement right set
forth in Section 2.5 of this Third Amendment following termination for
such Force Majeure event.
6. IDEC PROJECTIONS
6.1 Attached to this Third Amendment as Attachment 5 is [CONFIDENTIAL
TREATMENT REQUESTED]. The [CONFIDENTIAL TREATMENT REQUESTED].
16
CONFIDENTIAL TREATMENT REQUESTED
6.2 On or about [CONFIDENTIAL TREATMENT REQUESTED] through the date
Nordion is capable of commercially supplying Isotope from the KRMF
Facility, IDEC shall update the [CONFIDENTIAL TREATMENT REQUESTED] and
taking into account [CONFIDENTIAL TREATMENT REQUESTED]. IDEC and
Nordion shall meet the [CONFIDENTIAL TREATMENT REQUESTED] to review
the [CONFIDENTIAL TREATMENT REQUESTED].
6.3 Without limiting Nordion's supply obligations under the Agreement,
Nordion agrees that if [CONFIDENTIAL TREATMENT REQUESTED] indicates
that [CONFIDENTIAL TREATMENT REQUESTED], Nordion shall adopt the
following strategies as it selects to ensure adequate supply capacity:
STRATEGY TOTAL NET VIALS/WEEK LEAD TIME
[CONFIDENTIAL TREATMENT REQUESTED]
1. [CONFIDENTIAL TREATMENT REQUESTED].
2. [CONFIDENTIAL TREATMENT REQUESTED].
6.4 Notwithstanding Section 6.3 above, if in Nordion's reasonable business
judgment, Nordion determines that strategies 8 and 11 set forth above
are unnecessary or premature, and IDEC requires the implementation of
either such strategy, IDEC shall pay Nordion an amount equal to
[CONFIDENTIAL TREATMENT REQUESTED] of the reasonable out-of-pocket
labor and material costs associated with strategy 8, or [CONFIDENTIAL
TREATMENT REQUESTED] of the reasonable out-of-pocket costs (and
Nordion labour costs at the foregoing rate) associated with strategy
11, if less than, an average of [CONFIDENTIAL TREATMENT REQUESTED] are
required and purchased to meet Isotope demand from the implementation
of such strategies during the period the [CONFIDENTIAL TREATMENT
REQUESTED] excess demand.
6.5 Nordion agrees it shall promptly disclose to IDEC any information it
acquires that would be reasonably indicative of a potential Force
Majeure event, including without limitation, a labor disruption or
strike. In the event of a Force Majeure event, Nordion shall exercise
commercially reasonable efforts to eliminate, cure or overcome such
event, which efforts shall include, without limitation, the
17
CONFIDENTIAL TREATMENT REQUESTED
strategies described in Section 6.3 above and the lawful deployment of
management if possible, to operate the Isotope facilities.
7. OTHER MATTERS
7.1 In the event IDEC is entitled under the Agreement to seek supply of
Isotope from a third party, the minimum purchase commitment described
in Section 3.1 of this Third Amendment shall be reduced
proportionately.
7.2 During the period of supply from both the original and New Facility,
Nordion may be required to produce Isotope in up to [CONFIDENTIAL
TREATMENT REQUESTED]. During thc period of such increased production
from the original or New Facility, the reference in Section 8.4 (c)
(i) of the Agreement to [CONFIDENTIAL TREATMENT REQUESTED] shall be
amended to provide for [CONFIDENTIAL TREATMENT REQUESTED]. After
Nordion has submitted and updated the DMF for and is supplying Isotope
from the KRMF Facility, the reference in Section 8.4 (c) (i) of the
Agreement shall revert back to [CONFIDENTIAL TREATMENT REQUESTED]."
7.3 The references in Section 17.6 of the Agreement to [CONFIDENTIAL
TREATMENT REQUESTED] arc hereby amended to refer to [CONFIDENTIAL
TREATMENT REQUESTED].
7.4 Section 17.2 of the Agreement is hereby deleted and replaced with the
following:
17.2 Extension
IDEC may extend the term of the Agreement by an additional
[CONFIDENTIAL TREATMENT REQUESTED] after the expiration of the
Initial Term by providing written notice to Nordion of its
election to extend [CONFIDENTIAL TREATMENT REQUESTED].
Notwithstanding the foregoing, [CONFIDENTIAL TREATMENT
REQUESTED].
8. NO FURTHER MODIFICATIONS
8.1 Except as set forth in this Third Amendment all of the terms and
conditions of the Agreement shall remain unmodified and in full force
and effect. Effective as of the date hereof, all references to the
Agreement shall refer to the Agreement as amended by this Third
Amendment.
IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment
as of the date first above written.
MDS (CANADA) INC. IDEC PHARMACEUTICALS CORPORATION
By: /s/ Xx. Xxxx Xxxxxxx By: /s/ Xxxx Xxxxxxx
18
CONFIDENTIAL TREATMENT REQUESTED
Its: Senior Vice President Its: Vice President, Marketing and Business
Nuclear Medicine Development
19
CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 1: [CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
20
CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 2: ESCROW AGREEMENT
This Escrow Agreement (`Agreement") is made and entered into as of ________ by
and between IDEC Pharmaceuticals Corporation ("IDEC"), MDS (Canada) Inc., MDS
Nordion division, successor to MDS Nordion Inc. ("Nordion"), and Union Bank of
California, N.A. ("Escrow Agent") as follows;
1.0 ESCROW INSTRUCTIONS
1.1 IDEC has agreed with Nordion to deposit and maintain certain funds in
escrow.
1.2 The Escrow Agent agrees to accept said funds for deposit and to establish
and maintain a separate account for such funds. Within two (2) business
days following receipt of a deposit by IDEC, Escrow Agent shall notify
Nordion thereof in writing.
1.3 Subject to section 1.4 of this Agreement, upon receipt by Escrow Agent of a
written request for disbursement of funds from escrow from either party
signed by an officer of the requesting party, Escrow Agent shall
immediately remit such funds to the requesting party. Thc request for
disbursement shall set forth the determination of the amount to be paid,
the payee and payee's address or wire instructions.
1.4 If the requesting party and Escrow Agent receive written objection signed
by an officer of the other party within five (5) days after delivery to the
other party and Escrow Agent of the requesting party's request for
disbursement, escrow Agent shall, withhold disbursement of the funds and
remain in possession of such funds pending resolution by Nordion and IDEC
of the objection by mutual agreement or by arbitration. In such written
objection, the objecting party shall stipulate those amounts in dispute,
the details and reason such amounts are in dispute and those amounts not in
dispute. If no such objection is received, the Escrow Agent shall
immediately disburse those funds in escrow as requested by the requesting
party or, as the case may be, those amounts that are not in dispute. Escrow
Agent will accept facsimile signatures with original signatures to follow.
1.5 The written request of a requesting parry in accordance with this
Agreement, mutual written agreement of IDEC and Nordion or written decision
of the arbitrator shall be sufficient authority to require and authorize
release or withholding by the Escrow Agent of funds in escrow.
1.6 Escrow Agent shall provide monthly account statements by mail to IDEC and
Nordion setting out the principal amounts deposited into escrow, investment
returns accrued and withdrawn, the extent to which the principal has been
impaired as a result of negative investment returns and any other
withdrawal or disbursement of funds in escrow during the term of the
escrow. Escrow Agent shall provide prompt notice to Nordion, with a copy to
IDEC, if the investment has been impaired as a result of negative
investment returns.
1.7 The escrow shall only bc terminated upon joint written instruction from the
parties to this escrow or the disbursement of all funds in escrow.
21
CONFIDENTIAL TREATMENT REQUESTED
1.8 Escrow Agent shall invest the funds deposited in escrow pursuant to written
instructions from IDEC, provided such instructions are in accordance with
the investment guidelines described in the guidelines attached hereto and
incorporated herein by reference. IDEC shall fail to provide such
instructions, Escrow Agent shall invest funds in the Provident Cash
Management Shares T-Fund and it is understood that Escrow Agent may render
administrative services and receive fees from thc distributor of such Fund.
Upon receipt of notice of request for disbursement from escrow, in
accordance with this Agreement Escrow Agent agrees to liquidate the
investment to the extent required and to disburse the proceeds to the
requesting party.
2.0 RIGHTS OF ESCROW AGENT
2.1 The Escrow Agent shall have no duties or responsibilities except those
expressly set forth herein.
2.2 No person, firm or corporation will be recognized by the Escrow Agent as a
successor or Assignee of this Agreement until acknowledgment by Nordion and
IDEC of such successor or assignment is received by Escrow Agent and
written evidence be presented to the Escrow Agent, which evidence is
satisfactory to the Escrow Agent of such succession or assignment.
2.3 The Escrow Agent shall not be responsible for confirming the identity,
authority or rights of any person, firm or corporation executing or
delivering or purporting to deliver or execute this Escrow Agreement.
2.4 The Escrow Agent may rely upon any instrument in writing believed by it to
be genuine and sufficient and properly presented and shall not be liable or
responsible for any action taken or omitted in accordance with the
provisions thereof.
2.5 The Escrow Agent shall not be liable or responsible for any act it may do
or omit to do except for its negligence or willful misconduct. The Escrow
Agent may consult with an attorney and be fully protected with respect to
any action taken or omitted by it in good faith or on advice of counsel.
2.6 In the event any property held by the Escrow Agent hereunder shall be
attached, garnished or levied upon under any court order or if the delivery
of such property shall be stayed or enjoined by any court order, or if any
court order, judgement or decree shall be made or entered affecting such
property or affecting any act by the Escrow Agent, the Escrow Agent shall
obey and comply with all writs, orders, judgments or decrees so entered or
issued, notwithstanding any provisions of this Escrow Agreement to the
contrary. If the Escrow Agent obeys and complies with any such writs or
decrees, it shall nor be liable to any other parties hereto or to such
other person, firm or entity by reason of such compliance, notwithstanding
that such writs, orders or decree may be subsequently reversed, modified,
annulled, set aside or vacated.
2.7 IDEC and Nordion shall each pay one-half (1/2) of Escrow Agent's reasonable
compensation and shall reimburse the Escrow Agent for all reasonable
expenses incurred by the Escrow Agent in connection with the duties and
compliance in good faith with the
22
CONFIDENTIAL TREATMENT REQUESTED
terms and conditions of this Escrow Agreement. IDEC and Nordion
respectively shall indemnify and hold the Escrow Agent harmless against any
and all losses, claims, liabilities, costs, payments and including
reasonable legal fees for counsel who may be selected by the Escrow Agent,
which may be imposed upon or incurred by Escrow Agent hereunder as a result
of the respective acts or omissions of IDEC or Nordion, as the case may be,
Escrow Agent's fee schedule is attached hereto as Exhibit A. Escrow Agent
may withdraw compensation and expenses from account income in the event
payment is not received by Escrow Agent within thirty (30) days of the date
of invoice.
2.8 The Escrow Agent makes no representation as to the validity, value,
genuineness or the collectibility of any security or other document or
instrument held by or delivered to it.
Escrow Agent may resign on thirty (30) days' written notice to IDEC and
Nordion. IDEC and Nordion may remove Escrow Agent on thirty (30) days'
written notice to all parties hereunder. Upon receipt of such notice, IDEC
and Nordion shall appoint a successor escrow agent in writing delivered to
Escrow Agent. Thereupon, Escrow Agent shall deliver all assets in its
custody to such successor escrow agent and all responsibility of Escrow
Agent under this Agreement shall terminate; provided, however, Escrow
Agent's obligations under this Agreement shall not terminate until delivery
of the assets to the successor Escrow Agent. If the parties fail to appoint
a successor escrow agent, within five (5) days of expiry of the
aforementioned thirty (30) day notice period, the Escrow Agent shall
deliver all assets in escrow in its custody to a court of competent
jurisdiction as IDEC and Nordion shall instruct in writing or, in the
absence of such joint instruction, to an escrow agent appointed by a court
of competent jurisdiction as petitioned by any party to this Agreement.
Escrow Agent may consult with independent legal counsel in the event of any
dispute or question as to the interpretation of any of the provisions
hereof or its duties hereunder and it shall incur no liability and shall be
fully protected in acting in accordance with the opinion and instructions
of such counsel. Escrow Agent shall notify IDEC and Nordion in writing when
it intends to consult with such independent legal counsel and the
anticipated cost. Escrow Agent shall have the right to file legal
proceedings, including an interpleader, to determine the proper disposition
of assets hereunder, all costs thereof constituting an expense of
administration of this Agreement.
The duties and responsibilities of Escrow Agent shall be limited to those
expressly set forth in this Escrow Agreement; provided, however, that, with
Escrow Agent's written consent, the duties and responsibilities in this
Escrow Agreement may bc amended at any time or times by an instrument in
writing signed by the parties. With the exception of this Agreement Escrow
Agent is not responsible for, or chargeable with knowledge of, any terms or
provisions contained in either the underlying agreement referred to in this
Agreement or any other separate agreements and understandings between the
parties. Thc Escrow Agent shall not be liable for the accuracy of any
calculations or the sufficiency of any funds for any purpose. The Escrow
Agent shall not have any liability under this Escrow Agreement except to
the extent of its own gross negligence or willful misconduct. In no event
shall the escrow Agent be liable for any special, indirect or consequential
damages.
23
CONFIDENTIAL TREATMENT REQUESTED
Escrow Agent is authorized, in its sole discretion, to disregard any and
all notices or instructions given by IDEC and Nordion or by any other
person, firm or corporation, except such notices or instructions as are
specifically provided for herein.
3.0 MISCELLANEOUS
3.1 All communications, notices, requests, consents or demands given or
required under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered to, sent by facsimile with acknowledged
receipt or recognized courier service with acknowledged receipt, or five
days after being mailed by prepaid registered or certified mail addressed
to, the party for whom intended, as follows, or to such other address as
may be furnished by such party by notice in the manner provided herein:
IDEC: 0000 Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Attn: Senior Vice President and Chief Financial Officer
Fax: (000) 000-0000
Nordion: 000 Xxxxx Xxxx
Xxxxxx, Xxxxxxx
X0X0X0
Attn: Vice President and Chief Financial Officer
Fax: (000) 000-0000
Escrow Agent: Union Bank of California, N.A.
000 X. Xxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Corporate Trust Department
Fax: (000) 000-0000
3.2 The name, title, and specimen signature of each individual authorized to
provide notices hereunder (including requests for disbursement) is attached
as Exhibit B hereto and IDEC and Nordion represent and warrant that each
individual so listed is authorized to give such notice- IDEC and Nordion
may, from time to time, as each respectively deems appropriate, add such
persons to Exhibit B, who are authorized to provide notices hereunder.
3.3 This Agreement shall be binding upon, enforceable against and inure to the
benefit of, the parties hereto and their respective heirs, administrators,
executors, personal representatives, successors and permitted assigns, and
nothing herein is intended to confer any right, remedy or benefit upon any
other person. This Agreement may not be assigned by any party hereto except
with the prior written consent of all the other parties, which consent
shall not be unreasonably withheld.
If any provision of this Agreement is held to be invalid or unenforceable
by a court of competent jurisdiction, this Agreement shall be interpreted
and enforceable as if such provision were severed or limited, but only to
the extent necessary to render such provision and this Agreement
enforceable.
24
CONFIDENTIAL TREATMENT REQUESTED
3.4 This Agreement shall in all respects be governed by and construed in
accordance with the laws of the State of California applicable to
agreements made and fully to be performed in such state, without giving
effect to conflicts of law principles.
3.5 This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement
or this Escrow Agreement to be duly executed by their duly authorized
representatives, as of the date first written below:
ESCROW AGENT: Union Bank of California, N.A.
By:
--------------------------------------------
Executed this date, November _____, 2001
IDEC:
By:
--------------------------------------------
Executed this date, November _____, 2001
NORDION:
By:
--------------------------------------------
Executed this date, November _____, 2001
25
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
FEE SCHEDULE
UNION BANK OF CALIFORNIA, N.A.
CORPORATE TRUST SERVICES
SCHEDULE OF FEES
FOR
ESCROW AGENT SERVICES
ESCROW AGREEMENT
AMONG
IDEC PHARMACEUTICALS CORPORATION,
MDS (CANADA) INC., MDS NORDION DIVISION
AND
UNION BANK OF CALIFORNIA, NA.
--------------------------------------------------------------------------------
ACCEPTANCE AND SET-UP FEE: [CONFIDENTIAL TREATMENT
(DUE AND PAYABLE ON THE CLOSING DATE) REQUESTED]
ANNUAL ESCROW ADMINISTRATION [CONFIDENTIAL TREATMENT
(FIRST YEAR'S FEE IS DUE AND PAYABLE IN ADVANCE ON THE CLOSING DATE) REQUESTED]
LEGAL COUNSEL FEE: NO CHARGE
(USE OF UNION BANK IN-HOUSE LEGAL COUNSEL)
TRANSACTIONAL CHARGES: [CONFIDENTIAL TREATMENT
DISBURSEMENTS/WIRES (EACH): REQUESTED]
INVESTMENTS (PER SALE/PURCHASE/TRANSFER):
OUT-OF-POCKET EXPENSES: AS INVOICED
ACCEPTED BY:________________________________ DATE:___________________
FEES SUBJECT TO ACCEPTANCE AND REVIEW BY UNION BANK OF CALIFORNIA, N.A. OF ALL DOCUMENTS
PERTAINING TO THIS ISSUE.
26
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT B
IDEC:
Name: Signature
----------------------------------------------------------------------
Name: Signature
----------------------------------------------------------------------
NORDION:
Name: Signature
----------------------------------------------------------------------
Name: Signature
----------------------------------------------------------------------
27
CONFIDENTIAL TREATMENT REQUESTED
IDEC PHARMACEUTICALS CORPORATION
SHORT-TERM INVESTMENT POLICY
INVESTMENT OBJECTIVES
A. [CONFIDENTIAL TREATMENT REQUESTED]
INVESTMENTS SHALL CONSIST OF THE FOLLOWING TYPES OF SECURITIES:
[CONFIDENTIAL TREATMENT REQUESTED]
[CONFIDENTIAL TREATMENT REQUESTED]
28
CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 3: IDEC PHARMACEUTICALS CORPORATION
SHORT-TERM INVESTMENT POLICY
INVESTMENT OBJECTIVES
[CONFIDENTIAL TREATMENT REQUESTED]
29
CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 4: [CONFIDENTIAL TREATMENT REQUESTED]
-------------------------------------------------------------------------------
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[CONFIDENTIAL TREATMENT REQUESTED]
-------------------------------------------------------------------------------
30
CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT 5:
[CONFIDENTIAL TREATMENT REQUESTED]
31
