Exhibit 10.1
SETTLEMENT AGREEMENT AND AMENDMENT TO THE SUPPLY AGREEMENT
This Settlement Agreement and Amendment to the Supply Agreement as defined
hereinafter by and between Dendreon Corporation, a corporation organized under
the laws of the State of Delaware, and having a place of business at 3005 First
Avenue, Seattle, Washington 98121 (“DENDREON”), and Diosynth RTP Inc, a
corporation organized under the laws of the State of Delaware and having a place
of business at 101 J. Morris Commons Lane, Morrisville, NC 27560 (“DIOSYNTH”)
(DENDREON and DIOSYNTH each individually a “Party”, and collectively the
“Parties”) (the “Settlement and Amendment”) is, notwithstanding the signature
dates, effective as of 24 October, 2008 (“Settlement and Amendment Effective
Date”) .
WITNESSETH:
Whereas, DENDREON and DIOSYNTH are parties to that certain Supply Agreement
dated 22 December, 2005, (the “Supply Agreement”) for the manufacture and supply
of the Ancillary Component (as defined in the Supply Agreement);
Whereas, DENDREON and DIOSYNTH have been discussing resolutions for conflicts
with regard to the certain subjects provided for hereunder and accordingly wish
to settle such conflicts as well as to amend the terms of the Supply Agreement.
Now, Therefore, in consideration of the mutual covenants and promises set forth
herein, the parties agree as follows:

1.   Amendment

  1.1.   Section 3.1 of the Supply Agreement shall be replaced entirely with the
following:

“The term of this Agreement shall commence on the Effective Date and shall
continue until 31 December 2013 with automatic renewal for 5 year terms unless
either Party gives written notice at least 24 months prior to the expiration of
such initial or renewal term, or unless terminated sooner pursuant to
Sections 3.2, 3.3 or 3.4 below (“Term”).”

  1.2.   Section 3.4 of the Supply Agreement shall be replaced entirely with the
following:

“This Agreement may be terminated at DIOSYNTH’S option following DENDREON’s
failure to place an Order for at least a nine-month Campaign prior to the
ninetieth (90th) day following regulatory approval of the BLA (as defined in
Section 3.5), as such will be or may have been amended.
In addition, DIOSYNTH may at its option terminate this Agreement if (i) DENDREON
reasonably finds that the complete clinical data from Dendreon’s IMPACT
(IMmunotherapy for Prostate AdenoCarcinoma Treatment) trial are unfavorable such
that commercial manufacture of Ancillary Component is no longer required and/or
reasonably to be expected within the (then current) Term and accordingly
provides DIOSYNTH with a written reasoned statement to that effect as soon as
commercially reasonably possible but in no event later
 

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than within thirty (30) business days from DENDREON’s receipt of the respective
clinical data, or (ii) if the respective clinical data referred to under
(i) above is not available to DENDREON on or prior to 1 January 2010 with
respect to the complete clinical data, of which unavailability DENDREON must
notify DIOSYNTH within thirty (30) days of such respective dates.”.

  1.3   The first sentence of Section 3.7 of the Supply Agreement shall be
amended as follows:

“Termination of this Agreement for any reason, including without limitation, the
expiry hereof, shall not relieve (...)”

  1.4   Section 4.2(a) of the Supply Agreement shall be replaced entirely with
the following:

“Twenty-five percent (25%) of the Campaign Base Price (as set forth in
Schedule 3, based on the assumption of delivery of the (then current) Minimum
Gram Guarantee) upon the later of (i) receipt of the Order, or (ii) the date
which is twelve (12) months before the Order Campaign Start Date; provided that,
solely with respect to DENDREON’s Order pursuant to Section 3.4, DIOSYNTH may
invoice DENDREON fifty percent (50%) of the Campaign Base Price, plus a premium
of up to five percent (5%) of the Campaign Base Price (“Premium Payment”). For
the avoidance of doubt, such Premium Payment is in addition to, and not part of,
the Campaign Base Price payable by DENDREON for such Order.

  1.5   The first two sentences of Section 6.2 of the Supply Agreement:

“DENDREON shall submit to DIOSYNTH (...) through July 1, 2008.”
shall be replaced entirely with the following:
“DIOSYNTH shall be free to fill its intermediate scale cell culture facility
with other customers until an Order pursuant to Section 3.4 is submitted,
following which DIOSYNTH will schedule a Campaign as soon as it has sufficient
capacity available.”

  1.6   Section 6.3 of the Supply Agreement shall be replaced entirely with the
following:

“Any Order by DENDREON shall be submitted to DIOSYNTH at least twelve
(12) months prior to the requested Campaign Start Date that is specified in the
Order (such specified Campaign Start Date, the “Order Campaign Start Date”).”

  1.7   Section 6.4 of the Supply Agreement shall be replaced entirely with the
following:

“Without detracting from Section 3.4, each Order shall be for a six (6), nine
(9) or twelve (12) month Campaign and shall specify (i) the Order Campaign Start
Date; (ii) the length of
 

*   Confidential Information (indicated by [...]) has been omitted and filed
separately with the Securities and Exchange Commission.

 

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the Campaign; and (iii) the designated carrier for delivery of Ancillary
Component.”

  1.8   The first sentence of Section 6.6 of the Supply Agreement shall be
amended as follows:

“After receiving an Order Acceptance for a Campaign, (...)”

  1.9   The first sentence of Section 6.8 of the Supply Agreement shall be
amended as follows:

“Following the Order Acceptance, the Order shall be binding on both Parties
(...)”

  1.10   The first sentence of Section 6.9 of the Supply Agreement shall be
amended as follows:

“Except with respect to the Order pursuant to Section 3.4, DENDREON shall have
the right to cancel any Order (...)”

  1.11   The first sentence of Section 6.10 of the Supply Agreement shall be
amended as follows:

“Except with respect to the Order pursuant to Section 3.4, DENDREON shall have
the right to reduce any Order (...)”

  1.12   Section 8.3 of the Supply Agreement shall be replaced entirely with the
following:

“Ancillary Component shall be considered non-conforming, and may be rejected by
DENDREON, if it fails to conform to the warranties set forth in section 17.1.”

  1.13   Section 14.10 of the Supply Agreement shall be replaced in its entirety
by the following language:

“During the Term of this Agreement, and for a period of 18 months after its
expiration or any termination, except a termination pursuant to Section 3.4,
DIOSYNTH shall, at DENDREON’s sole expense, cooperate, subject to the
availability of resources in DIOSYNTH’s reasonable determination, in
transferring the manufacture and supply of Ancillary Component to another
manufacturing site, including transferring existing inventories of Ancillary
Component and Process Consumables (“Technology Transfer”). DIOSYNTH shall also
provide copies of batch records, development reports, project correspondence,
process validation protocols, process drawings, product-specific test methods,
applicable subcontractor reports, or other Process Inventions and information
related to and reasonably necessary for DENDREON to make Ancillary Component at
an alternate site (which may include know how that otherwise constitutes
Confidential
 

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separately with the Securities and Exchange Commission.

 

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Information of DIOSYNTH). DIOSYNTH may invoice DENDREON for the time expended in
performing its obligations under this Section 14.10, at a mutually agreed upon
hourly rate, plus any direct expenses. In the event that DIOSYNTH terminates the
Supply Agreement pursuant to Section 3.4 and DENDREON experiences a Change of
Control (as defined below) within eighteen (18) months of the effective date of
such termination, DENDREON’s successor-in-interest may provide DIOSYNTH with a
written request within such eighteen (18) month period that DIOSYNTH either:
(1) supply the successor-in-interest with Ancillary Compound pursuant to the
terms and conditions of the Supply Agreement or (2) conduct a Technology
Transfer pursuant to all the conditions set forth above (including, but not
limited to, the availability of resources in DIOSYNTH’s reasonable
determination); provided that, the determination of whether to supply or conduct
a Technology Transfer is within DIOSYNTH’s sole discretion. For purposes of this
Section 14.10, “Change of Control” shall mean a third party acquires all of the
rights required to operate DENDREON’s business relating to the Ancillary
Compound and the Supply Agreement by merger, sale of assets or otherwise.

2.   Settlement — Batch 5       2.1 As determined by the outcome of the dispute
resolution process set forth in Section 8.5 of the Supply Agreement, the Parties
agree that Dendreon is not obligated to pay Diosynth for Batch 5 of Ancillary
Component (“Batch 5”) in accordance with the opinion of an independent third
party expert that Batch 5 did not conform with cGMP.

3.   Settlement — Freezer Batches

3.1   DENDREON agrees to immediately upon the execution hereof purchase from
DIOSYNTH and take ownership of all Ancillary Component that form part of Batches
9, 10, 13 (limited to bottles 4, 5 and 6 only; see Section 3.3 below) and 14,
all of which were affected by a freezer deviation, with a total of [ ...]*
([...]*) grams (collectively, the “Freezer Batches”), at [...]* percent
([...]*%) of the Campaign Base Price (i.e. [...]*% of USD [...]* per gram = USD
[...]* per gram) (the “Provisional Price”).   3.2   If, at any time, DENDREON
directly or indirectly makes use of any part of the Freezer Batches in humans,
whether for clinical or commercial purposes, it shall forthwith notify DIOSYNTH
thereof and within fifteen (15) days of such notification, pay DIOSYNTH a price
per gram utilized equal to USD [...]* per gram.   3.3   DENDREON will actively
and in a timely manner and at no cost to DIOSYNTH support the sublot designation
of (i) bottles 1, 2 and 3 of Batch 13 (i.e. the bottles of Batch 13 that weren’t
affected by the Freezer Deviation described above) into ‘Sublot Batch 13’ and
(ii) bottles 4, 5 and 6 of Batch 13 (i.e. the bottles of Batch 13 that were
affected by the Freezer Deviation) into ‘Sublot Batch 13A’.   3.4   DENDREON
acknowledges and agrees that the Freezer Batches form part of that certain
Campaign that has been performed in 2007, consisting of a total of twenty-three
(23) batches

 

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of Ancillary Component (the “2007 Campaign”). If it, at any time, is determined
in accordance with the Supply Agreement that the 2007 Campaign, including the
Freezer Batches, does or did not meet the Minimum Gram Guarantee, DENDREON shall
waive its rights with respect to DIOSYNTH’s obligations with respect to the
Minimum Gram Guarantee and accordingly such Minimum Gram Guarantee shall be
deemed to have been met. If it, at any time, is determined in accordance with
the Supply Agreement that the 2007 Campaign, including the Freezer Batches,
exceeds or exceeded the Minimum Gram Guarantee, Section 2.4 of the Supply
Agreement shall apply.

4.   Settlement — Batches 01 and 03

4.1   Promptly following receipt of DENDREON’s documentation supporting such
destruction, DIOSYNTH will destroy the Ancillary Component produced in Batches
01 and 03, at no cost to DENDREON, and accordingly, DENDREON is not in any way
obligated to pay DIOSYNTH for such Ancillary Component. For the avoidance of
doubt, DIOSYNTH is not obligated to replace the said Ancillary Component.

5.   Miscellaneous

5.1   Except to the extent specifically otherwise provided for in this
Settlement and Amendment, the terms of the Supply Agreement (including, for the
avoidance of doubt, all definitions used in this Settlement and Amendment) shall
remain unchanged and intact.

In witness whereof, the Parties have caused this Settlement and Amendment to be
executed by their respective duly authorized representatives as of the day and
year first written above.

                DENDREON CORPORATION     DIOSYNTH RTP INC.
    By:   /s/ David Urdal   By:   /s/ Stephen A. Spearman      Title: Sr. V.P.
and CSO       Title: V.P., Development and Production     Date: Oct. 22, 2008  
    Date: 10/24/08                        By:   /s/ Henrik Edeback              
Title: VP Finance              Date: 10/24/08     

 

*   Confidential Information (indicated by [...]) has been omitted and filed
separately with the Securities and Exchange Commission.