Exhibit 10.1

 

 

011278-MNCT-0500

 

IRRADIATION SERVICES AGREEMENT

 

THIS AGREEMENT made and entered into by and between THE CURATORS OF THE
UNIVERSITY OF MISSOURI, a public corporation of the State of Missouri,
contracting on behalf of its University of Missouri Research Reactor with
offices at 1513 Research Park Drive, Columbia, MO 65211 (hereinafter “MURR”) and
IsoRay Medical, Inc., a Delaware corporation with its principal place of
business at 350 Hills St., Suite 106, Richland, WA 99354 (hereinafter “IsoRay”
or “Client”).

 

WITNESSETH:

 

WHEREAS, Client wishes to obtain irradiation services; and

 

WHEREAS, MURR has the facilities and technical expertise and is willing and able
to provide such irradiation services to Client;

 

NOW, THEREFORE, in consideration of the individual and mutual promises
hereinafter set forth, the parties agree as follows:

 

1.       DEFINITIONS:

 

a.       “Activated Target” shall mean Target Material having undergone
Irradiation Services at MURR.

 

b.       “Agreement” means this document, including the attached Appendices.

 

c.       “Can” shall mean an aluminum can used to encapsulate Target Material
for irradiation.

 

d.       “Irradiation Services” shall mean the activation of Target Material by
neutron bombardment.

 

e.       “Product” means the Activated Target to be provided to IsoRay by MURR.

 

f.       “Reactor Operating Cycle” shall mean the weekly period during which
MURR’s reactor is operational and at which time the production of Activated
Target shall be undertaken.

 

g.       “Target Material” shall mean the Barium Carbonate (BaCO3) target
provided by Client. Detailed specifications are provided in Exhibit A: Target
Material Specifications.

 

2.       TERM

 

a.       The initial term of this Agreement shall commence on the date the
Agreement is signed. The initial term will be for five (5) years.

 

b.       The Agreement will automatically renew for successive twelve (12) month
periods unless terminated by either party.

 

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c.       The Agreement can be terminated by either party upon three (3) months
written notice.

 

3.       SERVICES: VOLUME COMMITMENTS AND PRICING

 

a.       Client shall provide MURR with Target Material at least one (1) month
prior to the scheduled start of irradiation. Target Material shall be provided
by Client at no cost to MURR in agreed upon form as described in Exhibit A:
Target Material Specifications.

 

b.       MURR agrees to supply Irradiation Services to Client to produce and
supply Activated Target, as specified in Exhibit B: Services and Pricing.

 

c.       Pricing Tiers noted in Exhibit B: Services and Pricing, are on a
per-week basis.

 

d.       Invoicing of Irradiation Fees noted in Exhibit B: Services and Pricing
will be based upon activities calculated by MURR.

 

e.       MURR will provide a weekly irradiation report for each target so that
IsoRay is able to verify the calculation of fees. Exhibit C: Customer
Irradiation Report - Example

 

f.       MURR will ship Activated Target to Client in unopened Can.

 

g.       Client acknowledges that Target Material is the only authorized product
approved for irradiation under this Agreement. MURR reserves the right to
disqualify any Target Material that has an apparent abnormality or if
irradiation, tests or analyses performed by MURR demonstrate that the Target
Material is not as represented in Exhibit A: Target Material Specifications or
otherwise represents a substantial risk of damage to the reactor, its
subsystems, or a safety hazard to MURR personnel.

 

i.       Encapsulation Fee:

 

(1)       IsoRay shall pay MURR’s standard encapsulation fee (currently $100)
per Target encapsulated at MURR.

 

ii.       Rush Order Fee:

 

(1)       Orders received outside the ordering parameters specified may be
filled at MURR’s option. If MURR agrees to fill an order outside the ordering
parameters established in Section 4, a standard Rush Order Fee (currently $700)
will apply. This Rush Order Fee is separate from, and in addition to the Product
Fee.

 

iii.       Handling Fee:

 

(1)       IsoRay shall pay MURR’s standard handling fee (currently $260) per Can
shipped from MURR.

 

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iv.       Shipping Container Fee:

 

(1)       IsoRay shall pay MURR’s standard shipping package lease fee per
shipment from MURR in a MURR-owned package. This fee is subject to change in
case of package change or in accordance with provisions of this Agreement for
Pricing Adjustments.

 

(2)       If shipping package and components are supplied by IsoRay,

 

(a)       The associated shipping container lease fee will be waived.

 

(b)       A shipping container processing fee will be assessed for each
shipment. (currently $168).

 

h.       Pricing adjustments

 

i.       Each July, beginning July 2017, Direct Product Fees shall be increased
annually by 3%. Rush order fees, handling fees, encapsulation fees, and shipping
container fees may be adjusted on the same periodicity by MURR, not to exceed 5%
annually.

 

4.       ORDERING

 

a.       The Customer shall formally communicate orders to MURR using MURR’s
Online Ordering System (MOOS).

 

b.       MURR reserves the right to adjust the irradiation parameters in any
single week due to operational limitations at MURR. This adjustment may require
more or less capsules than ordered for that week and is dependent on MURR’s
ability to produce the same Curie content in the adjusted positions.

 

c.       Orders and/or adjustments to standing orders will be accepted until
0900 CT (UST-6) the Tuesday prior to a Monday beginning of irradiation.

 

5.       DELIVERY TERMS

 

a.       Shipment

 

i.       Risk of loss of Product shall pass to IsoRay FCA (free carrier) MURR
dock (Incoterms 2010) MURR’s facility. Unless otherwise agreed, shipping
arrangements for delivery of Product to IsoRay shall be the responsibility of
IsoRay with assistance from MURR.

 

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ii.       IsoRay will select the freight carrier, and shall bear the costs of
all freight and shipping costs FCA MURR dock (Incoterms 2010) MURR’s facility.

 

iii.       All carriers, containers, and shipment logistics are subject to MURR
approval which shall not be unreasonably withheld.

 

b.       Shipping Containers

 

i.       All Products to be supplied to the Client by MURR must be shipped in
containers which meet all applicable laws and regulations for the transport of
radioactive materials.

 

ii.       Shipping containers owned by MURR, the Client or a third party may be
utilized as mutually agreed.

 

iii.       MURR-owned reusable shipping containers must arrive at MURR within
ten (10) days of their receipt by the Client. The Client shall bear all costs
associated with returning shipping containers to MURR. MURR shall be notified of
the return of these containers prior to their arrival.

 

iv.       Any shipping container to be used for shipments must be in MURR’s
possession seven (7) days prior to shipment departure. MURR shall be notified of
the return of these containers prior to their arrival.

 

v.       Regardless of shipping container ownership, decontamination of the
containers prior return shipment to MURR shall be the responsibility of the
Client.

 

vi.       Regardless of cask ownership, risk of loss or damage to shipping
containers shall pass to the Client on an FCA basis upon presentation of the
containers to the freight carrier at the MURR dock and until the containers are
returned to MURR. In the event of damage, the Client shall bear all costs
associated with replacement of parts up to and including the cost of entire cask
replacement.

 

6.       DISPUTE RESOLUTION

 

a.       The parties shall attempt to resolve disputes arising out of or in
relation to this Agreement by good faith discussions. In the event of the
occurrence of such a dispute, either party may, by written notice to the other
party, have such dispute referred to the individuals designated below or their
respective successors, for attempted resolution by good faith negotiations
within thirty (30) calendar days after such notice is received. If the dispute
cannot be resolved within thirty (30) calendar days, either party may elect to
terminate the Agreement providing notice as specified in Section 2.

 

b.       The initial designated individuals are as follows:

 

i.       For MURR: Manager, Customer Service

 

ii.       For the Client: Manager, Radioisotopes & Facilities

 

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7.       REPRESENTATIONS AND WARRANTIES

 

a.       Client represents, warrants and covenants as follows:

 

i.       Client has the full right, power, and authority to enter into this
Agreement and there is no impediment which would inhibit its ability to perform
the terms and conditions imposed on it by this Agreement.

 

ii.       This Agreement constitutes a valid and binding obligation of Client,
enforceable in accordance with its terms.

 

iii.       To the best of its knowledge, neither the execution nor the delivery
of this Agreement by Client, nor the fulfillment of or compliance with the terms
and provisions hereof by Client shall contravene any provision of law including,
without limitation, any statute, rule, regulation, judgment, decree, order or
permit applicable to Client.

 

b.       MURR represents, warrants and covenants as follows:

 

i.       MURR has the full right, power, and authority to enter into this
Agreement and there is no impediment which would inhibit its ability to perform
the terms and conditions imposed on it by this Agreement.

 

ii.       This Agreement constitutes a valid and binding obligation of MURR,
enforceable in accordance with its terms.

 

iii.       To the best of its knowledge, neither the execution nor the delivery
of this Agreement by MURR, nor the fulfillment of or compliance with the terms
and provisions hereof by MURR shall contravene any provision of law including,
without limitation, any statute, rule, regulation, judgment, decree, order or
permit applicable to MURR.

 

8.       INDEMNITY OBLIGATIONS

 

a.       It is understood and agreed that MURR’s sole responsibility is to
provide encapsulation and Irradiation Services. Client agrees to indemnify and
save harmless MURR, its officers, agents and employees from and against any and
all loss of or damage to property or injuries to or deaths of any person or
persons, and against any and all claims, damages, suits, costs, expense,
liability, actions, or proceedings of any and all nature whatsoever in any way
resulting from or arising out of Client’s negligence or that of its directors,
officers, employees, agents or representatives or arising from the use,
distribution or sale of Activated Targets by Client.

 

b.       To the extent permitted by Missouri law and without waiving sovereign
immunity, MURK shall assume responsibility for any and all loss of or damage to
property or injuries to or deaths of any person or persons, and against any and
all claims, damages, suits, costs, expense, liability, actions, or proceedings
of any and all nature whatsoever in any way resulting from or arising out of
University’s negligence or that of its directors, officers, employees, agents or
representatives in connection with the provision of Irradiation Services.

 

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9.       FORCE MAJEURE

 

a.       Notwithstanding any other provision of this Agreement, neither party
shall be in default hereunder by reason of delay in the performance of, or
failure to perform any of its obligations hereunder, if such delay or failure is
caused by strikes, lockouts, acts of God or the public enemy, riots, fire,
interference by civil or military authorities, inability to obtain raw
materials, delays in transit or delivery, failure to secure necessary
governmental approvals for materials, failure of power supplies, or any other
cause or delay beyond its reasonable control. The affected party shall
immediately inform the other parry of the occurrence of such a delay and provide
an estimate of its probable duration. If such delay extends for a period beyond
sixty (60) days, then such delay shall be deemed to entitle the party not
subject of the force majeure to terminate this Agreement forthwith upon giving
notice to the other party.

 

10.       ASSIGNABILITY

 

a.       This Agreement shall be binding upon the respective successors and
permitted assigns of the parties hereto and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and assigns,
provided however that this Agreement may not be assigned by either party without
the prior written consent of the other party, which will not be unreasonably
withheld.

 

11.       MISCELLANEOUS

 

a.       Client agrees that it shall not advertise any connection with the
University nor make use of the University’s name or other identifying marks or
property, nor make representation, either express or implied, as to University’s
endorsement of Client’s operations without prior written approval by the
University, except as required by Securities and Exchange Commission
regulations. This however shall not be construed as to prevent mention of the
contribution of the University in any scientific publication.

 

b.       No member, individually or collectively, or officers of The Curators of
the University of Missouri incurs or assumes any individual or personal
liability by the execution of this Agreement or by reason of the default of the
University in the performance of any of the terms hereof. All such liability of
members or officers of the Board of Curators of the University of Missouri, as
such, is hereby released by Client as a condition of and in consideration for
the execution of this Agreement.

 

c.       This Agreement shall be deemed to have been entered into under the laws
of the State of Missouri and the rights and obligations of the parties hereunder
shall be governed and determined according to the laws of said state.

 

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IN WITNESS WHERE OF, the parties have executed this Agreement as of the day and
year as signed below.

 

 

THE CURATORS OF THE UNIVERSITY OF MISSOURI   Lisa J. Wimmenauer   November 29,
2016   Name   Date           /s/ Lisa J. Wimmenauer   Dir III, Bus. Admin.  
Signature   Title                   ISORAY, INC.               /s/ Thomas C.
LaVoy   11-29-2016   Thomas C. LaVoy   Date   Chief Executive Officer      

  

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EXHIBIT A: TARGET MATERIAL SPECIFICATIONS

 

Target Material to be provided by the Client to MURR for Irradiation:
Bulk Barium Carbonate powder

 

Specification Limit Target Material and Enrichment Natural Barium or Enriched
Barium-130 up to [**]% Physical form Solid (powder)

  

 

Irradiated Target Material to be provided by MURR to the Client:

 

Specification Limit Mass ≤ [**] g per Can Encapsulation Aluminum Can, [**]
Target Processing for Encapsulation Target will be heated and dried prior to
encapsulation.

 

 

[**] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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EXHIBIT B: SERVICES AND PRICING

 

Service Irradiation of Cans of Ba-131* Pricing Tier 2 (Units per week) Samples,
irradiated for one reactor operating cycle, greater than [**] Ci of Ba-131 and
shipped: $[**] / Ci Pricing Tier 1 (Units per week) Samples, irradiated for one
reactor operating cycle, up to [**] Ci of Ba-131 and shipped: $[**] / Ci
Encapsulation $100 per Can, provided by MURR Handling Fee $260 per Can Shipping
Container Lease Fee $525 per container Shipping Container Processing Fee $168
per container

 

*All activities referenced at End of Irradiation unless otherwise specified

 

Price tiers are identified based upon actual per-week volume rather than average
weekly volume over the invoiced month. Irradiations Services will be invoiced
monthly.

 

Pricing in this Exhibit is effective upon the effective date of this supply
agreement, and until the first annual price adjustment per the terms of this
supply agreement.

 

 

[**] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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EXHIBIT C: Customer Irradiation Report - Example

 

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