Exhibit 4.38


 


CONFIDENTIAL COPY


 


DISTRIBUTION
AGREEMENT


 


This Distribution
Agreement (this “Agreement”) is entered into this 12th day of July,
2000, by and between Draximage, Inc., a Canadian corporation (“Draximage”), and Syncor International
Corporation, a Delaware corporation (“Syncor”).


 


WHEREAS, Draximage
manufactures Sodium Iodide I-131 solution (the “Product”) for oral
administration;


 


WHEREAS, Syncor is in the
business of compounding, marketing and selling radiopharmaceuticals; and


 


WHEREAS, Draximage wishes
to grant, and Syncor wishes to obtain, the right to market, sell and distribute
the Product in the Territory (as defined below) under the terms and conditions
hereof;


 


NOW, THEREFORE, in
consideration of mutual covenants, agreements and conditions set forth herein,
the parties hereby agree as follows:


 


1.                                      DEFINITIONS


 


A.                                   “Calibration
Date” shall have the meaning ascribed to it in Section 4B.


 


B.                                     “First
Sale” shall have the meaning ascribed to it in Section 3.


 


C.                                     “Initial
Term” shall have the meaning ascribed to it in Section 3.


 


D.                                    “Product”
shall mean Sodium Iodide I-131 solution for oral administration, formulated in
accordance with the product specifications described on Exhibit A attached
hereto, whether labeled as generic, private or other label.


 


E.                                      “Territory” shall mean all the states,
territories and possessions of the United States of America and Puerto
Rico.


 


F.                                      “Trade” shall mean commercial
radiopharmacies, hospitals, clinics and other private and governmental health
institutions in the Territory.


 


G.                                     “Trademarks” shall mean all those trademarks
owned by Draximage and associated with the Product.


 


H.                                    “Independent
Radiopharmacies” shall mean ***


 


1





















 


2.                                      APPOINTMENT


 


A.                                   Grant.   Draximage
hereby appoints Syncor as its authorized distributor to market, sell and
distribute the Product to the Trade in the Territory. For purposes of the
appointment, Syncor shall be entitled to compound unit doses for, and
distribute the Product in bulk form to, end users, such as hospitals, clinics
and mobile imaging services, as well as to distribute the Product to third
party radiopharmacy operators. ***


 


B.                                     Acceptance
of Appointment.   Syncor hereby accepts this appointment as
distributor for the Product in the Territory.


 


3.                                      TERM


 


Subject to the provisions
of Section 11, this Agreement shall remain in effect from the date hereof
until five years after Draximage makes the first sale of the Product to Syncor
(the “First Sale”) after the Product has been approved by the U.S. Food and
Drug Administration (the “FDA”) for commercial sale as an oral therapy solution
in the United States (such five-year period hereinafter referred to as the “Initial
Term”). This Agreement shall be automatically renewed for additional three-year
terms at the end of the Initial Term or any renewal term, as the case may be,
unless either party notifies the other party at least six (6) months prior
to the expiration of the Initial Term or a renewal term, as the case may be,
that it does not intend to renew this Agreement upon expiration.


 


4.                                      RESPONSIBILITIES
OF SYNCOR


 


A.                                   Compliance
With Regulations.   Syncor shall obtain, and shall maintain
in good standing, all required permits and licenses necessary or advisable to
distribute the Product in the Territory. Syncor shall comply with all laws, rules and
regulations in force in the Territory, including those covering the sale of,
and the payment for, the Product.


 


B.                                     Standing
Order Quantity.  Syncor shall
purchase from Draximage a *** sufficient to calibrate at least 20 Curies of the
Product by the time of the Calibration Date, at the purchase price set forth in
Section 6 below.  The Product shall
be calibrated for noon on each *** that the Product is delivered to Syncor (the
“Calibration Date”), except for Product shipped on the *** pursuant to Section 5D
herein, which shall be calibrated for ***. 
The maximum pre-calibration period for any shipment of Product shall be
five (5) days from the date the shipment is shipped by Draximage.


 


C.                                     Shipping
Containers.   Syncor shall provide
Draximage, at Syncor’s expense, sufficient quantities of shielded shipping
containers to be used by Draximage to transport


 


2





















 


shipments of the Product
from its Kirkland, Quebec manufacturing facility to the destinations designated
by Syncor.


 


5.                                      RESPONSIBILITIES
OF DRAXIMAGE


 


A.                                   Draximage
shall manufacture, package and label, store and ship the Product in a manner
appropriate for the Product and consistent with all applicable United States
Federal, state, and local laws, rules, and regulations, including but not
limited to those regulations established by the FDA and the U.S. Nuclear
Regulatory Commission.


 


B.                                     Draximage
shall use its best efforts to obtain as soon as reasonably possible, but before
September 30, 2000, the approval from the FDA for the commercial sale of
the Product in the U.S., and to have its manufacturing facility in Kirkland,
Quebec be fully licensed by the FDA to produce the Product for sale in the U.S.


 


C.                                       Draximage shall ensure that each Product
conforms to the specifications described on Exhibit A attached hereto and
to Draximage’s then current technical specifications or other descriptive
materials supplied by Draximage for the Product, and is not adulterated or misbranded
within the meaning of the U.S. Food, Drug and Cosmetic Act, 21 U.S.C. Sec. 201 et
seq.


 


D.                                      Draximage shall make *** shipments of the
Product to Syncor on ***. The total quantity shipped to Syncor each *** shall
equal Syncor’s ***. Draximage shall ship to Syncor ***, provided that on each
shipping day the quantity of Product shall not exceed current activity
possession limits as measured on the day of calibration. Shipments of the
Product to Syncor shall commence *** of the approval from the FDA for the
commercial sale of the Product.


 


E.                                        Draximage
shall maintain in its facility a ***
surplus of the Product equal to *** requirements to cover potential spot orders.
Syncor shall not be responsible for the costs and expenses to manufacture and
store such surplus stock, it being understood that Syncor’s sole obligation
with respect to such surplus is the payment for any quantities of the Product
actually ordered by Syncor from such stock.


 


F.                                        At the request of Syncor, Draximage shall
provide supplies of technical sales aids, such as an approved Product
monograph, to Syncor in quantities appropriate in light of Syncor’s sales of
the Product in the Territory.


 


G.                                       ***


 


3





















 


6.                                   PRICE


 


Syncor’s price for any standing order and spot order
purchases shall be as follows:


 


	
  ***
  Minimum

  	
   

  	
   

  	
   

  
	
  Standing
  Order Quantity (Curies)

  	
   

  	
  Price Per MilliCurie (U.S.$)

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  
	
  ***

  	
   

  	
  ***

  	
   

  



 


All prices are per
milliCurie as of the Calibration Date. ***


 


***


 


4





















 


7.                                      ORDERS;
TERMS OF SALE


 


Syncor shall order from Draximage such quantities of the Product as are
necessary to fulfill the requirements of the Trade in the Territory. Draximage
will ship such quantities of the Product, FOB Draximage’s facility, either to
Syncor or to third party end users or other customers as agreed upon by Draximage
and Syncor.


 


8.                                      PAYMENT TERMS


 


                ***


 


9.                                      REGISTRATION
AND LABELING


 


A.                                   In the event that local laws or regulations
prevent Draximage from filing product registration application(s), or if
Draximage otherwise decides not to file any such application(s) on its own
behalf, at the direction of Draximage, Syncor hereby agrees to file and maintain
product registration application(s) on behalf of Draximage at Draximage’s
expense.


 


B.                                     Syncor agrees and recognizes that Draximage
is the sole owner of the registration in the Territory of the Product,
regardless of whether any of these registrations is in the name of Syncor or a
third party. In the event of termination of this Agreement, Syncor will return
all copies of any registration application(s) and accompanying documentation in
its possession to Draximage. At the request of Draximage, whether during the
pendency of this Agreement or after termination, Syncor shall legally transfer
any and all Product registration(s), to Draximage or its designee, and shall
provide full support to Draximage to facilitate the prompt execution of such
legal transfer. Draximage shall reimburse Syncor for any costs incurred by
Syncor in connection with effecting such transfer.


 


10.                               PRODUCT
RECALLS


 


In the event that Draximage determines, after consultation with Syncor,
that a Product recall in the Territory is necessary, then Syncor shall take all
actions appropriate in order to recall said Product Draximage shall reimburse
Syncor for all out-of-pocket expenses associated with any such recall caused in
whole or in part by the negligence of Draximage or by Draximage’s failure to
manufacture, package, label, store or ship Product in accordance with the
requirements of this Agreement; provided, however, that if any Product recall
or withdrawal is caused in part by the negligence of Syncor, such direct
out-of-pocket expenses shall be apportioned between Draximage and Syncor in
relation to each party’s respective negligent acts or omissions.


 


5





















 


11.                              TERMINATION RIGHTS


 


Upon breach of any term of this Agreement, the breaching party will be
given an opportunity to cure such breach within thirty (30) days after written
notice of the breach is delivered to the breaching party. Both parties hereby
agree that failure to remedy any such breach within this time period will
constitute sufficient grounds for termination without any further notice.
Syncor may also terminate this Agreement upon thirty (30) days’ prior written
notice if Draximage is unable to begin regular shipments of the Product to
Syncor by December 31, 2000.


 


12.                               CONFIDENTIAL
INFORMATION


 


A.                                   During
the duration of this Agreement and for a period of two (2) years from the
date of termination or expiration hereof, Syncor and Draximage agree to hold in
strict confidence, and shall use all reasonable efforts to maintain the secrecy
of, any and all information disclosed by the other and either identified in
writing as confidential or by its proprietary and non-public nature should be
treated as confidential (“Confidential Information”), and shall not disclose
any such Confidential Information to a third party without the express, written
consent of the disclosing party, with the exception of the following: (i) information
which, at the time of disclosure, is in the public domain; (ii) information
which, after disclosure, becomes part of the public domain by publication or
otherwise, other than by breach of this Agreement by the receiving party; (iii) information
that the receiving party can establish by competent proof was in its possession
at the time of disclosure and was not acquired, directly or indirectly, from
the disclosing party; (iv) information that the receiving party obtains
from a third party, provided, however, that such information was not obtained
by said third party, directly or indirectly, from the disclosing party under an
obligation of confidentiality toward the disclosing party; and (v) information
that the receiving party can establish by competent proof was independently
developed by persons in its employ or otherwise who had no contact with and
were not aware of the content of the Confidential Information.


 


B.                                 The receiving party shall not use the
Confidential Information for any purpose other than in connection with
exercising its rights and fulfilling its obligations hereunder. The receiving
party will not disclose any such Confidential Information to any person other
than to its officers or employees, and only then if they have a clear need to
know such Confidential Information in connection with the performance of their
professional responsibilities.


 


C.                                 The receiving party shall take all reasonable
steps, including but not limited to those steps taken to protect its own
information, data or other tangible or intangible property that it regards as
proprietary or confidential, to insure that the Confidential Information is not
disclosed or duplicated for the use of any third party, and shall take all
reasonable steps to prevent its officers and employees, or any others having access
to the Confidential Information, from disclosing or making unauthorized use of
any Confidential Information, or from committing any acts or making any
omissions that may result in a violation of this Agreement.


 


6





















 


D.                                    Title to, and all rights emanating from the
ownership of, all Confidential Information disclosed under this Agreement shall
remain vested in the disclosing party. Upon written request of the disclosing
party, the receiving party shall return promptly to the disclosing party all
written materials and documents, as well as any computer software or other
media, in their possession, made available or supplied by the disclosing party
to the receiving party that contains Confidential Information, together with
any copies thereof, except that the receiving party may retain one copy of each
such document or other media for archival purposes, subject to protection and
non-disclosure in accordance with the terms of this Agreement.


 


E.                                      The receiving party agrees that the
disclosure of Confidential Information without the express written consent of
the disclosing party will cause irreparable harm to the disclosing party, and
that any breach or threatened breach of this Agreement by the receiving party will
entitle the disclosing party to injunctive relief, in addition to any other
legal remedies available to it, in any court of competent jurisdiction.


 


13.                               TRADEMARKS


 


A.                                   Syncor shall have the right to resell the
Product in packages bearing the Trademarks and the right to use the Trademarks
in promotional materials related to the Product. The rights granted to Syncor
hereunder shall in no way affect Draximage’s ownership of such Trademarks. No
other right, title or interest in the Trademarks is established hereby, and
nothing herein shall be construed to grant any right or license to Syncor to
use the Draximage trademark, or the name Draximage, other than as specifically
set forth herein.


 


B.                                     Syncor shall not make any use or take any
action with respect to the Trademarks to prejudice or infringe Draximage’s
rights thereto including the use of any confusingly similar trademark, and
shall forthwith, upon objection by Draximage, desist from any use thereof or
action therewith which is in violation of this Agreement.


 


C.                                     Upon
termination of this Agreement, Syncor will cease all use of the Trademarks.


 


D.                                    In
the event of any claim or litigation by a third party against Syncor alleging that
any of the Trademarks imitates or infringes a trademark of such third party or
is invalid, Syncor shall promptly give notice of such claims or litigation to
Draximage and Draximage shall assume responsibility for, and control of, the
handling, defense, or settlement thereof.


 


14.                               WARRANTY


 


Draximage warrants that each Product supplied hereunder is free from
defects in material and workmanship and conforms to the technical
specifications for the Product. DRAXIMAGE MAKES NO OTHER WARRANTY, EXPRESSED OR
IMPLIED, WITH


 


7





















 


RESPECT TO THE PRODUCT,
INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE.


 


15.                               INDEMNIFICATION


 


A.                                   Draximage
shall indemnify and hold Syncor, its parent companies, affiliates and subsidiaries,
and the officers, directors and employees of each of them, harmless from any
and all liability, including liability for death or personal injury, and costs,
losses and expenses, including reasonable attorneys’ fees, that stem from any
Product that was damaged or defective at the time of delivery to Syncor, or
resulting from the negligence or recklessness or willful misconduct of
Draximage.


 


B.                                     Syncor shall indemnify and hold Draximage,
its parent companies, affiliates and subsidiaries, and the officers, directors
and employees of each of them, harmless from any and all liability, including
liability for death or personal injury, and costs, losses and expenses, including
reasonable attorneys’ fees, that stem from its negligence, recklessness or
willful misconduct in the compounding, sale, marketing and distribution of the
Product.


 


C.                                     In
the event that the negligence, recklessness or willful misconduct of each of Draximage
and Syncor contributes materially to any such liability, cost, loss or expense stemming
from any Product supplied or distributed and sold hereunder, then Draximage and
Syncor each shall be responsible for that portion of said liability, cost, loss
or expense to which such negligence, recklessness or willful misconduct
contributed.


 


D.                                    Draximage
shall indemnify and hold Syncor, its parent companies, affiliates and subsidiaries,
and the officers, directors and employees of each of them, harmless from any
and all liability stemming from any claim of patent, trademark, copyright or
trade secret infringement based upon the otherwise permissible distribution and
sale of the Product under the terms of this Agreement.


 


E.                                      In
the event that one party receives notice of a claim, lawsuit, or liability for which it is entitled to indemnification
by the other party, the party receiving notice shall give prompt notification
to the indemnifying party. The party being indemnified shall cooperate fully
with the indemnifying party throughout the pendency of the claim, lawsuit or
liability, and the indemnifying party shall have complete control over the
conduct and disposition of the claim, lawsuit, or liability.


 


F.                                      Title
to and risk of loss of the Product purchased by Syncor pursuant to this Agreement
shall pass to Syncor upon delivery by Draximage of the Product in question to
the carrier designated by Syncor for the purpose of shipping the Product to its
customers.


 


8





















 


16.                               MISCELLANEOUS


 


A.                                   Headings.   The headings and captions used herein are for
the convenience of the parties only and are not to be construed to define,
limit or affect the construction or interpretation hereof.


 


B.                                     Severability.   In the event that any provision of this
Agreement is found to be invalid or unenforceable, then the offending provision
shall not render any other provision of this Agreement invalid or
unenforceable, and all other provisions shall remain in full force and effect
and shall be enforceable, unless the provisions which have been found to be
invalid or unenforceable shall substantially affect the rights or obligations
granted or undertaken by either party.


 


C.                                     Entire Agreement.  
This Agreement, together with any schedules attached hereto which are
hereby fully incorporated by reference, contains the entire agreement of the parties
regarding the subject matter hereof and supersedes all prior agreements,
understandings or conditions (whether oral or written) regarding the same. This
Agreement may not be changed, modified, amended or supplemented except by a
written instrument signed by both parties.


 


D.                                    Assignability.
  This Agreement and the rights hereunder
may not be assigned or transferred by either party without the prior written
consent of the other party hereto (other than for rights to payment), provided
however, that either party may assign this Agreement to a person or entity who
acquires all or substantially all of the assets or business of a party, whether
by sale, merger, or otherwise. In the event that this Agreement is assigned, it
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns.


 


E.                                      Further Assurances.  
Each party hereto agrees to execute, acknowledge and deliver such
further instruments, and to take such other actions, as may be necessary or appropriate
in order to carry out the purposes and intent of this Agreement.


 


F.                                      Notices and Reports.   All
notices, consents or approvals required by this Agreement shall be in writing
and sent by certified or registered air mail, postage prepaid or by facsimile
or cable (confirmed by such certified or registered mail) to the parties at the
following addresses or such other addresses as may be designated in writing by
the respective parties.


 


9





















 


If to Draximage:


 


Draximage, Inc.


16751 TransCanada Highway


Kirkland, Quebec H9H 4J4


Canada


Attention: President


 


If to Syncor:


 


Syncor International Corporation


6464 Canoga Avenue


Woodland Hills, CA 91367


Attention: General Counsel


 


Notices
shall be deemed effective on the date of mailing.


 


G.                                     Relationships
of the Parties.   Both parties are independent contractors under
this Agreement. Nothing contained in this Agreement is to be construed so as to
constitute Draximage and Syncor as partners or agents with respect to this
Agreement. Neither party hereto shall have any express or implied right or
authority to assume or create any obligations on behalf of, or in the name of,
the other party or to bind the other party to any contract, agreement or
undertaking with any third party.


 


H.                                    Waiver.   The waiver by either party of
a breach of any provisions contained herein shall be effective only if made in
writing and shall in no way be construed as a waiver of any succeeding breach
of such provision or the waiver of the provision itself.


 


I.                                         Applicable Law.   This
Agreement shall be governed by and construed in accordance with the laws of the
State of California, without regard to the conflicts of laws provisions
thereof.


 


J.                                        Force Majeure.   A party shall not be liable for nonperformance
or delay in performance (other than of obligations regarding any payments or of
confidentiality) caused by any event reasonably beyond the control of such
party including, without limitation, wars, hostilities, revolutions, riots,
civil disturbances, national emergencies, strikes, lockouts, unavailability of
supplies, epidemics, fires, floods, earthquakes, other forces of nature,
explosions, embargoes, or any other Acts of God, or any laws, proclamations,
regulations, ordinances, or other acts or orders of any court, government or
governmental agency, and the inability of such party to obtain material from
its suppliers or to obtain equipment or transportation, for the time during
which such conditions continued, and for a reasonable time thereafter.
Purchases and deliveries of the Product under this Agreement may at either
party’s option be suspended, in whole or in part, during the period of the
continuance of such cause or event. Any occurrence of force majeure shall be
reported promptly to the other party.


 


10





















 


K.                                    Counterparts.
  This Agreement may be executed in
multiple shall be considered and shall have the force and effect of an
original.


 


L.                                      Language.
  The parties declare that they have
required that this Agreement and any documents relating thereto be drawn up in
the English language. Les parties aux presentes declarent qu’elles ont exige
que cette entente et tous les documents y afferant soient rediges en langue
anglaise.


 


IN WITNESS WHEREOF, by
their duly authorized representatives, the parties have executed this Agreement
as of the day and year first above written.


 


	
  SYNCOR INTERNATIONAL
  CORPORATION

  	
  DRAXIMAGE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John S. Baumann

  	
   

  	
  By:

  	
  /s/ R. M. Doré

  	
   

  
	
  Name:

  	
  John
  S. Baumann

  	
   

  	
  Name:

  	
  R.
  M. Doré

  	
   

  
	
  Title:

  	
  Senior
  Vice President &

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
  General
  Counsel

  	
   

  	
   

  	
   

  
								



 


11





















 


EXHIBIT A


 


Product Specification.


 


***


 


12