Exhibit 10.1

 

EXECUTION COPY

 

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as [*]. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

 

AMENDMENT TO DEVELOPMENT AND SUPPLY AGREEMENT

(RESEARCH BEADS)

 

This agreement (this “Amendment Agreement”) to amend that certain Development
and Supply Agreement dated as of August 1, 1999, by and between Xcyte Therapies,
Inc., a Delaware corporation (“Xcyte”) and Dynal Biotech ASA, a Norwegian
corporation (“Dynal”), as amended by that certain Letter Agreement dated April
22, 2002 (as amended, the “D&S Agreement”), is made by and between Xcyte and
Dynal as of March 26, 2004 (the “Effective Date”). Xcyte and Dynal desire to
amend certain aspects of the D&S Agreement to add the provisions set forth
herein.

 

Now, therefore, in consideration of the mutual covenants and conditions
contained herein and in the D&S Agreement as amended hereby, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

1. Additional Definitions.

 

(a) “Research Beads” shall mean super-paramagnetic micro beads, Dynabeads®
CD3/CD28, the research grade of Xcyte™ Dynabeads® Product (i.e. [*] conjugated
with XR-CD3 and XR-CD28 (i.e., the Antibodies)) that are labeled and sold solely
for use in research not involving the treatment, diagnosis, or dosing of human
subjects or patients (whether directly with the beads or particles or indirectly
through the introduction into humans of substances made or processed in whole or
in part through use of the beads or particles) and also not involving the
generation of T-cells for use in therapy.

 

(b) “Net Sales” shall mean the gross amount invoiced by Dynal for the sale or
other disposition of Research Beads to Third Parties, less the sum of the
following deductions for amounts actually incurred related to said sale or other
disposition:

 

(i) normal, customary trade discounts (including volume discounts), credits and
allowances and adjustments for rejections, recalls and returns;

 

(ii) cost of freight and insurance, sales, use, excise, value added and similar
taxes, surcharges, duties and other governmental charges (other than income tax)
imposed on the sale and included in the gross amount charged to customers; and

 

(iii) normal, customary wholesaler chargebacks and rebates (including rebates to
government agencies and government mandates and managed healthcare negotiated
rebates).

 

In addition, Dynal and its Affiliates shall be entitled to deduct from gross
sales of Research Beads any receivables which are deemed to be uncollectable in
accordance with GAAP (generally accepted accounting practices). For the
avoidance of doubt, sales between Dynal and its Affiliates shall be excluded
from the computation of Net Sales hereunder, but gross sales shall include the
first sale to Third Parties by any such Affiliates.

 

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(c) For the avoidance of doubt, other terms used herein and defined in the D&S
Agreement shall have herein the meanings so ascribed to them in the D&S
Agreement.

 

2. Research Beads.

 

(a) Xcyte hereby represents and warrants to Dynal that (i) it has the full
right, power and authority to enter into this Amendment Agreement and to grant
the rights granted to Dynal and perform its obligations hereunder, (ii) it has
obtained, and shall at all times during the term of the D&S Agreement hold and
comply with, all Third Party consents and licenses required to enter into this
Amendment Agreement and as may be necessary to grant the rights granted, and to
supply the Antibodies, to Dynal hereunder, and, to Xcyte’s knowledge, without
infringing or otherwise conflicting with the rights of any Third Party.

 

(b) Xcyte hereby grants to Dynal the exclusive right, during the term of the D&S
Agreement, to make, have made, sell, offer for sale, use, distribute and import
Research Beads and to use the Xcyte™ mark as part of the Xcyte™ Dynabeads® mark
in connection therewith. Without limiting Xcyte’s obligations under the D&S
Agreement, Dynal shall purchase from Xcyte, and Xcyte shall supply to Dynal, the
Antibodies, used or expended in connection with the foregoing activities (as set
forth in Section 2(c) below), and Dynal shall pay the royalties on the Research
Beads (as set forth in Section 2(d) below).

 

(c) Dynal shall purchase the Antibodies from Xcyte at the following prices:

 

- Antibody XR CD3 and Antibody XR CD28: $[*] for [*] of each Antibody]

 

Except for the initial shipment of Antibodies as set forth in Section 2(g),
Dynal agrees that the prices set forth above are based on the purchase of
Antibodies in [*] volumes per Antibody. Xcyte may raise the price of the
Antibodies set forth in this Section above no more often than once per year upon
sixty (60) days advance written notice to Dynal, provided that no annual
increase shall have the effect of raising the previous year’s price by more than
[*] percent ([*]%). In no event shall Dynal use the Antibodies for any purpose,
including any internal Dynal research and development projects or external
research and development collaborations, except as specifically allowed under
the D&S Agreement, under this Amendment Agreement or with Xcyte’s prior written
consent. The Antibodies supplied to Dynal hereunder shall be shipped to Dynal
CIP Oslo, Norway (Incoterms 2000).

 

(d) In further consideration for the rights granted hereunder, Dynal shall pay
to Xcyte a royalty of [*] percent ([*] %)] of Net Sales of Research Beads.

 

(e) Dynal hereby acknowledges and agrees that Xcyte shall have no obligation or
responsibility to provide any assistance, consultation, advice, guidance,
recommendation, or training (“Assistance”) to any Third Party interested in
purchasing or receiving, or any Third Party who has purchased or received any
Research Beads from or on behalf of Dynal, and Dynal shall not recommend any
Third Party to contact Xcyte for such Assistance without the prior written
consent of Xcyte unless such Third Party expresses an interest in potential
clinical applications using Xcyte™ Dynabeads®.

 

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(f) Dynal shall submit to Xcyte representative specimens of all promotional
materials, labels and packaging (including inserts) used in connection with the
promotion, marketing or sale of Research Beads, and a description of the manner
in which such materials will be used, pursuant to this Section 2 and Xcyte shall
provide Dynal with its written approval thereof (which approval shall not be
unreasonably withheld), and thereafter, such representative specimens of such
promotional materials, labels and packaging provided to Xcyte shall be deemed
approved for use in connection with the promotion, marketing and sale of the
Research Beads in the manner described by Dynal to Xcyte without any further
approval by Xcyte. Any failure by Xcyte to respond to Dynal’s request for
approval within three (3) weeks after receipt of such materials as
aforementioned shall be deemed approval by Xcyte, except that in no event shall
approval be deemed to have been given on any portion of such promotional
materials, labels and packaging that contains Xcyte’s Confidential Information
or other Xcyte proprietary information, unless Xcyte had previously approved the
use thereof. Xcyte’s review and/or approval of such materials, labels and
packaging shall be solely for purposes of monitoring Dynal’s compliance with its
obligations hereunder and shall in no way constitute an endorsement thereof by
Xcyte, nor limit in any way Dynal’s obligations under Section 2(k) of this
Amendment Agreement.

 

(g) Dynal agrees that, notwithstanding any specifications for the Antibodies
under the D&S Agreement and without limiting any obligations of Xcyte with
respect to the Antibodies under the D&S Agreement, Xcyte has not made and shall
not make any commitment under or in connection with this Amendment Agreement
that any Antibodies supplied specifically to be used on Research Beads will be
manufactured or documented to conform to current Good Manufacturing Practices
(“cGMP”). Other than as expressly set forth in the preceding sentence with
respect to cGMP, Xcyte shall comply with all of its other obligations under the
D&S Agreement relating to the Antibodies that are supplied for use on Research
Beads hereunder, and warrants that the Antibodies shall conform to the
specifications for the Antibodies set forth on Attachment A (as may be amended
from time to time according to Attachment G of the D&S Agreement) of the D&S
Agreement, as tested by Xcyte using its standard methods, at time of shipment by
Xcyte to Dynal. For the first shipment following execution of this Amendment
Agreement, Xcyte will supply Dynal with [*] ([*]) of each of the Antibodies for
use on Research Beads, subject to Section 13.3 of the D&S Agreement. Upon
request from Dynal, Xcyte will supply larger volumes of Antibodies, provided
that Dynal agrees to purchase the Antibodies in [*] volumes per Antibody. Dynal
acknowledges and agrees that lead times for additional volumes of Antibodies
requested by Dynal will be at least [*] ([*]) months for [*] volume sizes. In no
event shall Dynal use or divert any Antibodies supplied to it by Xcyte under the
D&S Agreement for the Products which are necessary for the production of the
Products to be supplied to Xcyte under the D&S Agreement away from such use,
without prior written consent of Xcyte, whether for the production of Research
Beads hereunder, or otherwise.

 

(h) Dynal shall, starting on the Effective Date of this Amendment Agreement, and
thereafter twice a year (by June 30th and December 31st of each year), provide
to Xcyte a good faith non-binding forecast of Dynal’s requirements for the
Antibodies pursuant to this Amendment Agreement for the ensuing twelve (12)
month period.

 

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(i) Records, Reports and Audits.

 

(i) Dynal shall keep true and accurate records (A) of the types and structures
of Antibodies used or expended (inclusive of quantities wasted in the course of
manufacture or handling) in connection with the exercise by Dynal of its rights
under Section 2 of this Amendment Agreement, and (B) of all Net Sales derived
from the sale or transfer of Research Beads pursuant to this Section 2. All such
records shall be retained for a period of at least three (3) years following the
end of the calendar year in which such Net Sales arise and to which they relate.

 

(ii) Dynal shall submit to Xcyte written reports annually (on or before each
anniversary date of this Amendment Agreement), in a form reasonably acceptable
to Xcyte, stating in itemized detail (A) the type and volumes of Antibodies used
or expended (inclusive of quantities wasted in the course of manufacture or
handling) in connection with the exercise by Dynal of its rights under Section 2
of this Amendment Agreement during the preceding calendar quarter, and (B)
Dynal’s Net Sales derived from the sale or transfer of Research Beads made
pursuant to Dynal’s rights under this Section 2.

 

(iii) Within reasonable advance notice to Xcyte, but not more than once per
calendar year, Dynal shall have the right to perform a planned audit (at any
time during regular business hours). The objective with the audit is to verify
that Xcyte follow up on its suppliers in line with the established quality
system within Xcyte, and that the manufacturing and testing of the specified
Antibodies are documented according to agreed specifications between Xcyte and
the contract manufacturer. Any such audit shall be at Dynal’s expense. Dynal
shall permit the records referenced in clause (i) above to be inspected and
audited at any time during regular business hours, at such place or places where
such records are customarily kept, upon reasonable advance notice, but not more
often than once per calendar year, by Xcyte through an independent certified
accountant (which representatives and accountants shall be bound by obligations
of confidentiality), solely to verify the accuracy of the reports and payments.
Any such audit shall be at Xcyte’s expense, unless the audit concludes that,
with respect to the period under audit, Dynal’s reports to Xcyte hereunder
understated any amounts to such an extent that a payment by Dynal to Xcyte made
or called for under this Amendment Agreement was more than five percent (5%) in
error and in Dynal’s favor, in which event Dynal shall pay or reimburse Xcyte
for the reasonable expenses of such audit.

 

(iv) In addition to the foregoing, Dynal agrees to use good faith efforts to
provide information to Xcyte which may come to the attention of Dynal pursuant
to sales of the Research Beads relating to (A) potential clinical sites for the
Research Beads or the Antibodies; and (B) Third Parties who intend to move
Research Beads or Antibodies towards the clinic, including but not limited to
any Third Party who purchases Research Beads in excess of three (3) vials per
month over any consecutive six-month period or who express a clinical intent for
the Research Beads; provided that, Dynal has the right to do so and subject to,
any obligations of confidentiality that Dynal may have to any Third Parties.
Information about a clinical site or Third Party shall include the name of the
site or institution, the name of the investigator and any information relating
to inventions or discoveries made with the Research Beads, to the extent such
information is available to Dynal; provided that, Dynal has the right to do so
and subject to, any obligations of confidentiality that Dynal may have to any
Third Parties.

 

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(v) Royalties payable to Xcyte shall be paid by Dynal quarterly within sixty
(60) days from the end of the fiscal quarter, without invoicing by Xcyte. Each
such payment shall be for unpaid royalties that accrued within or prior to
Dynal’s two most recently completed fiscal quarters. All other payments payable
to Xcyte by Dynal hereunder shall be due and payable within thirty (30) days
from the date of Xcyte’s invoice; provided, however, that Xcyte may at its
election, by notice to Dynal after Dynal’s failure to pay any payments due to
Xcyte within ninety (90) days from the date of Xcyte’s invoice or in the case of
royalties, within ninety (90) days from the end of the applicable fiscal
quarter, set-off any such payments from any amounts then or thereafter to come
due to Dynal from Xcyte under or in relation to the D&S Agreement. Dynal shall
pay interest to Xcyte on any overdue payments under this Amendment Agreement at
a rate of one and one-half percent (1 1/2%) per month from the date due until
payment. All payments due to Xcyte shall be paid in U.S. Dollars. If any
currency conversion shall be required hereunder, such conversion shall be made
by using the exchange rate prevailing at the Bank of America, N.A., on the last
business day of the calendar quarter reporting period to which such royalty
payments relate. In addition to its other rights and remedies, Xcyte reserves
the right upon notice to Dynal to suspend or terminate Dynal’s rights under
Section 2 of this Amendment Agreement if at any time Dynal fails to pay any
amounts due (which are not in dispute) as required hereunder or otherwise
materially breaches its obligations under this Section 2, provided that Dynal
has failed to cure such material breach within thirty (30) days of having been
requested by Xcyte in writing to do so.

 

(j) This Amendment Agreement has been entered by Xcyte to permit Dynal to engage
in certain activities as stated herein that were not expressly permitted under
the D&S Agreement or otherwise. Dynal acknowledges that Xcyte has not specified
or guided the means or manner in which Dynal may engage in any such activities,
and that Xcyte does not expect to earn any substantial financial returns from
such activities by Dynal. Accordingly, but without limiting to Dynal’s rights or
Xcyte’s obligations under the D&S Agreement:

 

(i) Dynal shall, at its risk, bear all expenses associated with the development,
manufacture, certification, marketing approvals, documentation, promotion, sale,
storage, shipment, import, export, and labeling of any and all Research Beads
produced or to be produced by Dynal pursuant to or in relation to this Amendment
Agreement, except with respect to the development, manufacture, certification,
and storage of Antibodies during the period prior to shipment of such Antibodies
by Xcyte to Dynal.

 

(ii) Dynal (and not Xcyte except in relation to Xcyte’s obligations with respect
to whether the Antibodies conformed to the specifications set forth on
Attachment A (as may be amended from time to time according to Attachment G of
the D&S Agreement) of the D&S Agreement at the time of shipment of such
Antibodies from Xcyte to Dynal ) shall be responsible for compliance with all
marketing approval, import, export, and other legal or regulatory requirements
applicable to any and all of Dynal’s activities hereunder.

 

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(iii) EXCEPT AS SET FORTH IN THIS AMENDMENT AGREEMENT AND THE D&S AGREEMENT,
XCYTE MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
ANTIBODIES, AND XCYTE EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF NON-INFRINGEMENT, MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE.

 

(iv) Dynal shall be liable for and shall defend, indemnify, and hold Xcyte
harmless against any and all actions, claims, liabilities, losses, damages, and
costs (including without limitation reasonable attorneys’ fees) (“Losses”), of
Xcyte or its owners, managers, agents, contractors or personnel in connection
with any Third Party claims arising from any development, manufacture,
certification, marketing approvals, documentation, promotion, sale, storage,
shipment, import, export, or labeling of any Research Beads by or for Dynal, or
for any breach of any of Dynal’s representations, warranties or covenants under
this Amendment Agreement; except that in no event shall Dynal be liable for any
Losses arising from any breach of Xcyte of any of its representations,
warranties or covenants under this Amendment Agreement (including, without
limitation, any breach of its representations, set forth in Section 2(a) or any
failure of the Antibodies to meet the specifications as set out in Section 2(g))
at the time of shipment by Xcyte to Dynal, in which event, Xcyte shall be liable
for and shall defend, indemnify, and hold Dynal harmless against any and all
actions, claims, liabilities, losses, damages, and costs (including without
limitation reasonable attorney’s fees), of Dynal or its owners, managers,
agents, contractors or personnel in connection with any Third Party claims
arising therefrom. The provisions of Section 10.4 of the D&S Agreement shall
apply to this clause (iv).

 

(k) IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL OR
INCIDENTAL DAMAGES BASED UPON BREACH OF WARRANTY, BREACH OF CONTRACT,
NEGLIGENCE, STRICT TORT OR ANY OTHER LEGAL THEORY. DYNAL SHALL IN NO EVENT BE
ENTITLED TO, AND XCYTE NOT BE SUBJECT TO, ANY ORDER FOR SPECIFIC PERFORMANCE FOR
THE PROVISION OF RIGHTS OR ANTIBODIES UNDER OR IN RELATION TO THIS AMENDMENT
AGREEMENT. IN NO EVENT (OR EVENTS) WILL EITHER PARTY’S AGGREGATE LIABILITY NOR
EITHER PARTY’S AGGREGATE DAMAGES FOR ANY ONE OR MORE BREACHES OR OTHER FAILURES
OF THE OTHER PARTY UNDER OR IN RELATION TO THIS AMENDMENT AGREEMENT EXCEED THE
SUM OF $50,000.

 

3. Trademarks.

 

The parties shall take such actions and institute such standard and practices as
may be necessary to ensure that any use of the trademark Xcyte™ Dynabeads® in
connection with the Research Beads under this Amendment Agreement, as well as in
connection with the Products under the D&S Agreement, and in connection with any
other use that may be authorized by the parties, does not dilute or in any way
adversely effect Dynal’s right in or to, or the good will associated with, the
DYNABEADS mark (the “Dynal Mark”). Such actions shall include, but not be
limited to, ensuring that each of the Dynal Mark and the XCYTE mark (the “Xcyte
Mark”) when used in combination (e.g., Xcyte™ Dynabeads®) are printed or
displayed as separate and

 

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distinctive marks, such as by way of using separate and distinctive colors,
fonts and/or lettering size for each party’s respective mark and always
including the words “product(s)” or “bead(s)” after the Xcyte™ Dynabeads® mark.
In addition, for the avoidance of doubt, Xcyte shall comply with its obligations
under Section 7.1 of the D&S Agreement, including, but not limited to, by
including a notice stating that” Dynabeads® is a registered trademark of Dynal
Biotech ASA, Oslo, Norway, licensed to Xcyte” on all package insert, label,
packing and promotion and marketing and all other printed materials or displays
that bear or include the Xcyte™ Dynabeads® mark. Dynal shall also include a
notice stating that “Xcyte is a trademark of Xcyte” on all printed materials or
displays that bear or include the Xcyte™ Dynabeads® mark. Xcyte shall not have
any rights to use the Dynal Mark other than in connection with the Products
expressly permitted under this Amendment Agreement and the D&S Agreement, and
Dynal shall not have any right to use the Xcyte Mark other than in connection
with the Research Beads and the Products as expressly permitted under this
Amendment Agreement and the D&S Agreement.

 

4. Termination.

 

Notwithstanding any termination provisions to the contrary in the D&S Agreement,
Xcyte may terminate the rights granted to Dynal under this Amendment Agreement
upon written notice to Dynal if any of the following occur:

 

(a) Dynal is more than sixty (60) days late in paying to Xcyte royalties,
expenses, or any other monies due under this Amendment Agreement pursuant to
Section 2(i)(v), and Dynal has failed to pay Xcyte in full within thirty (30)
days of having been requested by Xcyte in writing to do so; or

 

(b) Dynal enters bankruptcy proceedings, voluntarily or involuntarily; or

 

(c) Dynal breaches any material terms of this Amendment Agreement and does not
cure the breach within thirty (30) days after written notice of the breach.

 

Except as provided herein, upon any termination pursuant to this Section 4, the
rights and obligations of the parties under this Amendment Agreement shall
terminate, but such termination shall not affect any of the other terms or
conditions of the D&S Agreement, which terms and conditions shall remain in full
force and effect in accordance with the terms thereof. Notwithstanding the
foregoing, (i) Sections 2(j)(iv) and 2(k) shall remain in effect during the term
of the D&S Agreement and shall survive termination thereof, and (ii) Section 3
shall remain in effect during the term of the D&S Agreement.

 

5. Continuing Effect.

 

Except as modified herein, the terms and conditions of the D&S Agreement remain
unchanged and in full force and effect and apply to this Amendment Agreement as
if set out in full herein. In the event of any inconsistency between this
Amendment Agreement and the D&S Agreement (prior to this Amendment Agreement),
this Amendment Agreement shall prevail.

 

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Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as [*]. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

 

IN WITNESS WHEREOF, the parties have executed this Amendment Agreement by their
duly authorized representatives.

 

XCYTE THERAPIES, INC.   DYNAL BIOTECH, ASA By:  

/s/ Ronald J. Berenson

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  By:  

/s/ Jon Hindar

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    Ronald J. Berenson       Jon Hindar     President and CEO       CEO     Date
Signed: April 4, 2004       Date Signed: 26 March 2004

 

LEGAL DEPT

/s/ JB

APPROVED

 

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