Exhibit
10.12


 


CONFIDENTIAL TREATMENT REQUESTED


 


INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED IS OMITTED

AND NOTED WITH “****”.

AN UNREDACTED VERSION OF THIS DOCUMENT HAS ALSO BEEN PROVIDED TO THE

SECURITIES AND EXCHANGE

COMMISSION.


 


Execution
Version / Nordion DOC # 84734

MOLYBDENUM-99 PURCHASE & SUPPLY AGREEMENT


 


THIS AGREEMENT (this
“Agreement”)  is made and entered into effect as of
April 1, 2010 (the  “Effective Date”)  by and between:


 


Lantheus Medical Imaging, Inc.



331 Treble Cove Road,


North Billerica, MA
01862


(“LMI”)


 


and


 


MDS Nordion, a division of
MDS (Canada) Inc. 


447 March Road


P.O. Box 13500


Kanata, Ontario K2K 1X8


(“Nordion”)


 


A.    WHEREAS, Nordion is a
supplier of Sodium Molybdate Molybdenum- 99 (fission) (defined herein as “Product”)


 


B.    WHEREAS, Nordion desires to
make available quantities of Product to LMI for purchase by LMI pursuant to the
terms of this Agreement;


 


C.    WHEREAS, LMI desires to
purchase certain quantities of Product from Nordion on a non-exclusive basis
pursuant to the terms of this Agreement.


 


NOW, THEREFORE, in consideration of the foregoing
recitals, mutual covenants, agreements, representations and warranties
contained herein, the parties hereby agree as follows:


 


1.     Definitions


 


1.1     In this Agreement, the
following terms shall have the respective meanings set forth in this Section 1:


 


1.1.1.       “Agreement”
shall mean this Agreement and Schedules attached hereto.


 


1.1.2.       “Calendar
Week” means the period beginning on Sunday and ending the following Saturday.


 


1.1.3.       “CDA” means the Confidential Disclosure Agreement between
Nordion and LMI dated as of the 1st day of April, 2010, a copy of which is
attached as Schedule A to this Agreement.


 

















 


1.1.4.       “Commencement
Date” means the first date after the Effective Date on which Atomic
Energy of Canada Ltd. (“NRU Reactor”)
begins to supply to Nordion commercial quantities of Molybdenum-99 material
used in the production of Product following the cessation of the shutdown of
the NRU Reactor in effect as of the Effective Date, which date shall be
notified by Nordion to LMT in writing.


 


1.1.5.       “Confidential
Information” shall have the meaning ascribed to such term in the
CDA.


 


1.1.6.       “Contract
Term” means the term of this Agreement, which shall commence as of
the Effective Date and terminate as of July 31, 2011 unless otherwise
extended or terminated pursuant to this Agreement.


 


1.1.7.       “Effective
Date” shall have the meaning ascribed in the preamble. 


 


1.1.8.       “Firm
Order(s)” shall have the meaning ascribed in Section 3.1 


 


1.1.9.       “Force
Majeure” shall have the meaning ascribed in Section 17.1 


 


1.1.10.     “Forecast”
shall have the meaning ascribed in Section 3.1.


 


1.1.11.     “Generator(s)”
shall mean a LMI generator containing Product, which Product has been supplied
by Nordion pursuant to this Agreement.


 


1.1.12.     “Governmental
Agencies” means various applicable federal, state, provincial and
local governmental agencies that control the manufacture, transit, distribution
and usage of Product in any country. Governmental Agencies include, but are not
limited to: U.S. Food and Drug Administration (“FDA”),
U.S. Nuclear Regulatory Commission (“NRC”), U.S.
Department of Transportation (“DOT”), U.S.
Customs and Border Patrol, Health Canada, Canadian Nuclear Safety Commission (“CNSC”), Transport Canada, IATA, IAEA, or corresponding
governmental agencies in any country Product may pass through, and any
successor agency thereto.


 


1.1.13.     “Product(s)” means Sodium Molybdate
Molybdenum-99 (fission). 


 


1.1.14.     “Product Fee”
shall have the meaning ascribed in Section 5.1.


 


1.1.15.     “Specifications”
means the characteristics of the Product, in conformance with Schedule C, as
amended by the mutual written agreement of the parties from time to time.


 


Schedules:


 


Schedule A - Confidential Disclosure Agreement 


Schedule B - Form of LMI Purchase Order


 


2

















 


Schedule C - Product Specifications 


Schedule D - Product Fees


Schedule E - Shipping Schedule


 


1.2     The headings in this
Agreement are inserted only for convenience and shall not affect the
construction hereof.


 


1.3     Where appropriate, words
denoting a singular number only shall include the plural and vice versa.


 


1.4     Reference to any statute,
regulation, regulatory provision or statutory provision includes a reference to
the statute, regulation, regulatory provision or statutory provision, as from
time to time amended, extended or re-enacted.


 


1.5     The words “herein”,
“hereof”, “hereunder”, “hereby” and other words of similar import refer to this
Agreement as a whole, including the schedules, annexes of and exhibits to this
Agreement, and not to any particular provision.


 


2.     Appointment


 


2.1     Pursuant to and subject to
the terms and conditions of this Agreement, LMI agrees on a non-exclusive
basis, to purchase Product from Nordion.


 


3.     Forecast; Orders


 


3.1     Orders. LMI shall, in
writing, submit to Nordion on the 1st  day of each month during the
Contract Term, a good faith, non binding rolling forecast of the estimated
quantity of Product LMI expects to order from Nordion during the **** (****)
day period following the date of the forecast (each such forecast, a “Forecast”). LMI shall issue a purchase order (“Firm Order”) in accordance with LMI’s **** purchase volume
commitments in Section 3.4. LMI’s Firm Order shall be provided to Nordion
at least **** (****) days in advance of the required date of Product shipment.
Nordion shall use commercially reasonable efforts to accept LMI’s Firm Orders
(issued in accordance with this Agreement) with respect to LMI’s **** purchase
volume commitments in accordance with Section 3.4. Each Firm Order shall
be subject to confirmation of acceptance by Nordion in writing. LMI may revise
a Firm Order accepted by Nordion by no more than ****% (subject to and not to
exceed or be inferior to, LMI’s **** purchase volume commitments in accordance
with Section 3.4) up to seven (7) days prior to shipment of Product
by Nordion. Any adjustment upward requested by LMI for Product in a Firm Order
is subject to availability and acceptance by Nordion. Nordion shall use
commercially reasonable efforts to fill such Firm Orders. LMI expects to
provide the first forecast in connection with the execution of this Agreement
with the understanding that this forecast will provide at least **** days
notice as of the Commencement Date.


 


3

















 


Subject to the terms of this Agreement, Nordion
shall notify LMI promptly in writing if at any time Nordion has reason to
believe that it will not be able to accept or fulfill a Firm Order.


 


3.2     Form of Order.  LMI  shall submit purchase orders for
Product in the form of the purchase order set out in Schedule B (the “Form Purchase Order”). Unless expressly agreed to by
Nordion, any standard terms and conditions appearing in LMI’s purchase order
(or reverse side thereof) in conflict with or different from the terms and
conditions contained in this Agreement, shall not apply.


 


3.3     Acceptance of Orders. Nordion shall
indicate its acceptance of LMI’s purchase orders for the Product by promptly
acknowledging acceptance of each purchase order in writing. Each such
acceptance shall include the anticipated ship date of the Product ordered. No
Firm Order issued and/or accepted pursuant to this Agreement shall extend to
delivery of Product beyond the Contract Term.


 


3.4     Purchase Volumes. Subject to
the terms of this Agreement including but not limited to Sections 4.4, 4.7 and
6.2 hereof and as of the Commencement Date and subject to Nordion’s ability to
supply Product to LMI meeting the requirements of this Agreement and acceptance
by Nordion of LMI’s Firm Orders sufficient to meet LMI’s **** purchase volume
commitments in this Section 3.4:


 


3.4.1.    during the portion of the
Contract Term when HFR Petten reactor is shut down and unable to produce
Molybdenum- 99 (the “HFR Shutdown Period”), LMI hereby commits to purchase from
Nordion **** to **** **** of Product (****-day ****) per **** during the HFR
Shutdown Period, and


 


3.4.2.    during the portion of the
Contract Term after the HFR Shutdown Period and return to service, which date
shall be acknowledged by the parties in writing, LMI hereby commits to purchase
from Nordion **** to **** **** of Product (****-day ****) per ****.


 


3.5     Spot Market Purchases. In addition
to the foregoing, LMI may, from time to time during the Contract Term, desire
to purchase from Nordion incremental orders for Product in a given **** in
excess of the LMI’s **** purchase volume commitments in Section 3.4.
Notwithstanding Section 3.1, acceptance by Nordion of any incremental
orders for Product issued by LMI in a given **** in excess of the **** LMI
purchase volume commitment in Section 3.4, shall be entirely at the
unfettered discretion of Nordion. Any such incremental order accepted (or not
accepted) by Nordion in a given **** shall not, in such **** or any other ****,
serve to diminish any LMI purchase volume commitment as set out in Section 3.4.
If such incremental orders are accepted by Nordion, the price for all Product
pursuant to such orders shall be the Product Fee (as hereinafter defined) and
Nordion shall use commercially reasonable efforts to fill such accepted
purchase orders.


 


4

















 


4.     Terms of Supply


 


4.1     Shipping Schedule. Commencing on
the Commencement Date, Nordion shall deliver Product in accordance with the
initial shipping schedule set out on Schedule E. Nordion and LMI agree to enter
into good faith discussions, from time to time, to negotiate in good faith a
revised shipping schedule that reflects the needs of LMI’s customers and, the
parties as required and agreed, shall amend the shipping schedule as reasonably
necessary to meet those needs taking into account Nordion’s Product production
schedule, regulatory requirements, the availability of carriers and other
logistical circumstances that may impact the manufacture and shipping of
Product. In the event that the parties do not agree to a revised shipping
schedule, Nordion shall continue to ship Product in accordance with the initial
shipping schedule set out in Schedule E as unamended.


 


4.2     Product Delivery. Nordion shall
deliver Product to LMI on the date of shipment **** **** (INCO Terms 2000),
provided further, that it shall be LMI’s responsibility to load Product into
the air carrier. All right, title and interest in and to the Product and risk
of loss and damage to Product shall pass to LMI, **** **** (INCO Terms 2000).


 


4,3     Containers. Nordion shall
supply Product to LMI in containers which meet all applicable regulations of
Governmental Agencies having jurisdiction over transport of the Product. LMI
shall not use such containers for any other purpose.


 


4.4     Conformance to
Specification; Warranty. Nordion shall manufacture and supply the
Product in conformance with the Specifications and all applicable laws. Nordion
hereby provides a Product warranty such that on the date of receipt of the
Product at LMI’s facility, the Product shall be free from defects in material
and workmanship, provided further however that Nordion shall have no warranty
obligation in the event that the Product is subject to accident, misuse, abuse
or alteration. Any such warranty claim shall be notified to Nordion in writing
within seven (7) days of the receipt by LMI of Product, specifying the
details of the alleged defect. In the event that the warranty claim is well
founded, Nordion shall replace the defective Product at no charge (if the
purchase price therefore has already been paid by LMI) or alternatively LMI may
cancel such order and Nordion shall not require that LMI pay for such defective
Product that fails to meet the Specification (with a consequential reduction
with respect to the affected Calendar Week purchase volume commitment
requirement as set out in Section 3.4, as the case may be).


 


LMI ACKNOWLEDGES THAT NORDION IS MANUFACTURING AND
SUPPLYING PRODUCT TO MEET SPECIFICATION. EXCEPT AS EXPRESSLY SET OUT IN THIS
AGREEMENT, NORDION HEREBY DISCLAIMS ALL OTHER WARRANTIES OR CONDITIONS, WHETHER
EXPRESS OR IMPLIED STATUTORY OR OTHERWISE INCLUDING BUT NOT LIMITED TO ANY
IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY OR FITNESS FOR PARTICULAR
PURPOSE, APPLICATION OR USE.


 


5

















 


4.5     Quality Control Release. LMI shall upon
receipt of the Product at its facility have the ability and responsibility to
verify, test, or otherwise inspect the Product, for the purpose of
determination of conformance to Specifications. LMI shall test or cause to be
tested all Products prior to LMI quality control (QA) release of Product for
sale to its customers. Notwithstanding the foregoing, the Product shall be
deemed conforming by LMI upon LMI quality control (QC) release of Product for
Generator manufacturing.


 


4.6     Dispute Resolution. In the event
that Nordion disputes LMI’s determination that the Product does not conform to
Specification or there is an unresolved measurement discrepancy, the parties
will appoint a joint technical team to review the issue and provide a
recommendation. In the event the joint technical team is unable to agree on a
recommendation then the parties will select a mutually acceptable outside
consulting firm which will be instructed to make a determination. If the
consulting firm confirms LMI’s determination, Nordion will in accordance with
this Agreement be considered to have failed to meet Specification, and Nordion
will pay the fees of such consulting firm. If the consulting firm dissents from
LMI’s determination, Nordion shall be entitled to be paid for such Product and
LMI shall pay the fees of the consulting firm.


 


4.7     Allocation of Product. In the event
during any **** that the total volume of Product available for sale by Nordion
is not sufficient to meet order commitments to all Nordion customers for such ****
because of any occurrence affecting supply of Molybdenum-99 to or supply of
Product from Nordion, then notwithstanding an accepted Firm Order or accepted purchase
order LMI’s allocation of Product available for purchase from Nordion during
such entire period of insufficiency will be based on the Allocation Percentage
(as hereinafter defined). “Allocation
Percentage” means, with respect to any ****, the percentage of
Product purchased by LMI from Nordion in the immediately previous **** (****)
calendar **** period (or, in the absence of a **** (****) calendar **** period,
such portion thereof) prior to such **** determined as the ratio of (i) LMI’s
Product purchases from and delivered by Nordion divided by (ii) the total
amount of Product purchased from and delivered by Nordion to all Nordion
customers (including LMI) during such **** (****) calendar **** period (or, in
the absence of a **** (****) calendar **** period, such portion thereof).


 


5.     Pricing and
Terms of Payment


 


5.1     Price. The purchase
price of Product shall be as set forth on Schedule D attached hereto (the “Product Fee”). During the Contract Term after the Commencement Date, the
Product Fee LMI pays for the Product shall not be **** than the purchase price
(as calculated consistent with calibration as set out in Schedule C) paid by
each **** (excluding purchases for research or other non-commercial purposes)
from Nordion for delivery into ****. For purposes of calculating the purchase
price paid by **** (excluding purchases for research or other non-commercial
purpose) for delivery into **** pursuant to a written contract with Nordion,
the parties agree that the purchase price, paid by such **** for delivery into ****
in a different currency than is applicable in this Agreement, shall be
determined taking into account the exchange rate of the United


 


6

















 


States dollar against such different currency as at
the execution date of such contract. At any time reasonably requested by LMI
(but no more frequently than **** per calendar ****), Nordion will furnish to
LMI a certificate, executed by a duly authorized officer of Nordion, stating
that such officer has reviewed all of the sales of Product by Nordion during
the Contract Term and that Nordion has complied with this Section 5.1. To
the extent it is determined that Nordion is not in compliance with this Section 5.1,
Nordion will credit LMI with the difference between the Product Fee and the
amount otherwise contemplated by the second sentence of this Section 5.1,
and any such difference will, be paid by Nordion to LMI in the form of a ****
and shall only bear interest at the annual rate of ****%, calculated ****%
monthly, commencing from and after the date which is **** (****) days after the
date that LMI would have been entitled to such adjustment. In addition, the
parties acknowledge that noncompliance with this Section 5.1 will result
in an adjustment to the **** by LMI for Product purchased by LMI only during
the period in which the purchase price of Product to **** (excluding purchases
for research and other non-commercial purposes) for delivery into ****, was ****
than the ****.


 


5.2     LMI Payment. Upon or after
shipment of Product Nordion shall invoice LMI for any Product that LMI orders
and LMI shall pay such invoice within **** (****) days of the date of the
invoice. Nordion shall provide LMI with a copy of each invoice by electronic
mail (e.g., a “pdf” file) or other mutually agreed upon form of electronic communication
within **** (****) hours of the applicable invoice date. Overdue accounts shall
bear interest at the annual rate of ****%, calculated ****% monthly.


 


5.3     Payment Adjustments. In the event
the quantity of the Product shipped is greater or less than the quantity
reflected in Nordion’s invoice for such shipment, then within **** (****) days
after LMI’s receipt of such shipment, LMI shall notify Nordion concerning such
overage or shortage, and, unless Nordion disputes such notice (in which case
the dispute resolution mechanism in Section 4.6 shall apply), the amount
of such invoice shall be increased or reduced, as the case may be, to reflect
the actual quantity of the Product contained in such shipment and received by
LMI. In the event that LMI has already overpaid such invoice any amount of
overpayment shall be reimbursed or credited to LMI at LMI’s election. LMI and
Nordion shall work together to establish a procedure to validate the
instrumentation respectively used by each party to accurately verify the amount
of Product shipped by Nordion and received by LMI.


 


6.     Term;
Termination


 


6.1     Term. The supply of
Product by Nordion pursuant to this Agreement shall commence as of the
Commencement Date and shall continue thereafter during the Contract Term. Any
extension of this Agreement shall be in writing and shall require the mutual
agreement of the parties.


 


6.2     Termination for Breach. Except as
specifically otherwise provided, the failure by either Party (the “Defaulting Party”) to comply with its
material obligations under this Agreement shall entitle the other Party (the “Non-Defaulting Party”) to give to the


 


7

















 


Defaulting Party notice specifying the nature of the
default and requiring the Defaulting Party to cure such default. Subject to the
provisions of Section 17 hereof, if such default (i) is not cured within
30 days after the receipt of such notice or, (ii) if such default cannot
reasonably be cured within such 30-day period and the Defaulting Party shall
not have commenced and be diligently continuing actions to cure such default during
such 30-day period, the Non-Defaulting Party shall be entitled, without
prejudice to any of the other rights conferred on it by this Agreement or
available to it at law or in equity to terminate this Agreement by giving
further notice to the Defaulting Party, to take effect immediately upon receipt
of such termination notice by the Defaulting Party.


 


In addition to and notwithstanding any remedies set
out in this Agreement or available in law or equity, in the event that LMI, in
accordance with this Agreement, fails to purchase any or all of its ****
purchase volume commitments in accordance with (and subject to the terms of)
Section 3.4 (and except in the event of an ongoing bona fide dispute
regarding a shipment of Product from Nordion to LMI), (i) Nordion shall
during the Contract Term be entitled to claim (and invoice) payment from LMI at
the Product Fee for an amount of such Product equal to the shortfall in such
purchase volume commitments and LMI shall make full payment for such Product
and/or (ii) Nordion, upon written notice to LMI, may immediately suspend
further supply of Product to LMI until such time as such amounts are paid in
full. In the event that Nordion suspends supply of Product to LMI, supply of
Product may, at Nordion’s election, not be resumed by Nordion until one (1) Calendar
Week after amounts due and owing by LMI to Nordion are paid in full.
Notwithstanding the foregoing, for the sake of clarity, the parties acknowledge
and agree that, to the extent Nordion exercises its right to suspend further
supply of Product to LMI pursuant to this Agreement, LMI shall have no
obligation to purchase the aforementioned purchase volume commitments during
the period of suspended supply of Product or make any payments with respect
thereto.


 


The right of termination as provided in this Section 6.2,
shall not be affected in any way by either party’s waiver or failure to take
action with respect to any previous default.


 


6.3     Termination for Bankruptcy. Subject to
any limitations imposed by applicable law, a party shall have the right to
terminate this Agreement by giving notice to the other party in the event that
such other party files a petition in bankruptcy, is adjudicated a bankrupt,
makes an assignment for the benefit of its creditors, or otherwise seeks relief
under or pursuant to any bankruptcy, insolvency or reorganization statute or
proceeding, or if a petition in bankruptcy is filed against it which is not
dismissed within ninety (90) days or proceedings are taken to liquidate the
assets of such party or a supervisor, receiver, administrator, administrative
receiver or other encumbrancer taking possession of or being appointed over, or
any distress, execution or other process being levied or enforced (and not
being discharged within seven days) upon, the whole or any substantial part of
the assets of the other party.


 


8

















 


7.     Compliance, Certification, and
Related Matters


 


7.1     Compliance with Law. While Product
is in Nordion’s possession or under its control, Nordion shall be responsible
for complying with and shall comply with all applicable statutory and regulatory
requirements of the United States and Canada regarding the manufacture,
handling, storage, packaging, transportation, shipment and exporting of
Product. In performing its obligations under this Agreement, Nordion shall
comply with all applicable environmental and health and safety laws. Except as
otherwise set forth in this Agreement, Nordion shall be solely responsible for
determining how to carry out these obligations.


 


7.2     Licenses. Nordion shall
be responsible at its own expense for obtaining and maintaining all necessary
licenses including, without limitation, facility licenses, registrations,
authorizations and approvals, which are necessary to develop, manufacture,
handle, store, label, package, and transport Product under the applicable
regulatory requirements including, but not limited to, the possession, storage,
and transportation of radioactive materials. Nordion shall maintain and update
its existing regulatory filings with the FDA, NRC, DOT, CNSC, and any other
regulatory agency as may be required by applicable law.


 


7.3     Certification. For each
shipment of Product, Nordion shall certify in writing that each lot of Product
shipped was produced and tested in compliance with the Specifications.


 


7.4     Access to Nordion’s Facility. LMI shall
have reasonable access to Nordion’s facility and procedures no more frequently
than once per Contract Term (except in the event of Product recall or safety
concerns, in which case as reasonably required) for the sole purpose of
auditing Nordion’s Product manufacturing process. All such information
disclosed during such audit to LMI or its employees or agents shall be deemed
to be Nordion’s Confidential Information as such term is defined in this
Agreement.


 


7.5     Quality Assurance Program. Nordion shall
maintain production and quality assurance as required by government or
regulatory bodies with jurisdiction over Nordion’s manufacture of Product and
its sale and distribution. It is acknowledged by Nordion and LMI that as a
result of any in-house manufacturing and testing of Product, that the
Specifications may require amendment or modification. LMI and Nordion agree
that any such amendment or modification shall be discussed in good faith, and
shall be subject to the approval of LMI which shall not be unreasonably
withheld.


 


8.     Manufacturing Process


 


8.1     Change in Nordion’s
Processes. The parties acknowledge that this Agreement is
based on the current Nordion process for manufacturing and shipping of Product.
Any change in the processes used by Nordion, including, but not limited to, the
reactor used as the source of supply and the characteristics of the materials
used may or will require a new validation of the Product to confirm that it
meets the Specifications. Accordingly, Nordion shall notify LMI at least sixty
(60) days prior to instituting any change in its


 


9

















 


processes. Subject to Nordion approval of the change
in process, where LMI has requested or necessitated the change in process, LMI
will bear the cost of validation. Where Nordion has requested or necessitated
the change in process, Nordion will bear the cost of validation.


 


9.     Contract Currency


 


9.1     All prices and payments
herein by LMI to Nordion shall be in ****.


 


10.  Confidentiality


 


10.1   The  CDA is incorporated by
reference and made a part of this Agreement.


 


11.  Nordion’s Representations


 


11.1   Nordion represents and
warrants as of the Effective Date that:


 


(i)         it has full right, power and
authority to enter into this Agreement;


 


(ii)        to its knowledge it is in
material compliance with all applicable laws and regulations of all relevant
Governmental Agencies in connection with the manufacture, distribution and sale
of the Product as contemplated by this Agreement and has not received any
notice or other correspondence from any relevant Governmental Agency in
connection with any alleged non-compliance in connection therewith;


 


(iii)       it has not received any
notice of adverse claim of infringement of any patent or other intellectual
property right, including, without limitation, misappropriation of trade
secret, in connection with the use and sale of Product or the data, information
and technology used with respect to the manufacture of Product;


 


(iv)       to the best of its knowledge
and belief (i) it is the owner or has the right to use all of the data,
information, know-how, intellectual property and technology to be used by
Nordion in carrying out its obligations hereunder, and (ii) development and
implementation of the process used in the manufacture of Product, and the
performance of Nordion’s obligations hereunder, do not infringe any valid third
party patent or pending published patent application or other intellectual
property right; and


 


(v)        there is no action or
proceeding pending or, to the best of its knowledge, threatened against Nordion
before any court, administrative agency or other tribunal which would have a
material adverse effect on Nordion’s ability to perform under this Agreement.


 


10














 


12.       LMI’s Representations


 


12.1        LMI represents and warrants
as of the Effective Date that:


 


(i)                           it has full
right, power and authority to enter into this Agreement;


 


(ii)                        it has not
received any notice of adverse claim of infringement of any patent or other
intellectual property right, including, without limitation, misappropriation of
trade secret, in connection with the use of the Product or the data,
information and technology used with respect to the manufacture and sale of
Generators; and


 


(iii)                     there is no action or
proceeding pending or, to the best of its knowledge, threatened against LMI
before any court, administrative agency or other tribunal which would have a
material adverse effect on LMI’s ability to perform under this Agreement.


 


(iv)                    to its knowledge it is in
material compliance with all applicable laws and regulations of all relevant
Governmental Agencies in connection with the use and sale of the Product and
has not received any notice or other correspondence from any relevant
Governmental Agency in connection with any alleged non-compliance in connection
therewith.


 


13.       Regulatory
Compliance


 


13.1        In the event that a
Governmental Agency in any country shall allege or prove that a Product does
not comply with applicable rules and regulations in a country where the Product
is marketed, distributed and sold, LMI shall notify Nordion immediately, and
both parties shall cooperate fully regarding the investigation and disposition
of any such matter. If LMI is required to recall or should deem it appropriate,
acting reasonably, to voluntarily withdraw a Product or a Generator, then
Nordion’s liability shall be limited to reimbursement to LMI of the actual cost
of the quantity of Product purchased by LMI subject to the recall to the extent
that such recall or withdrawal is due to Nordion’s negligence, recklessness or
wrongful intentional acts or omissions by, or strict liability of, or breach of
any representation and warranty; otherwise, LMI shall bear all costs and
expenses associated with such recall or withdrawal. For purposes of clarity,
the parties acknowledge that nothing in this Section 13 shall affect or limit
any right that a party may have to seek indemnification from the other party
under Section 14 of this Agreement.


 


14.       Indemnification


 


14.1        Nordion Indemnification
Obligations. Nordion agrees to indemnify, defend and hold
harmless LMI and its affiliates and their respective directors, officers,
employees and agents from and against any damages, claims, liabilities and
expenses (including, but not limited to, reasonable attorney’s fees and
disbursements) resulting from any third party claims or suits (“General Claims against LMI”) arising out
of (a) Nordion’s ****, ****, ****, ****, or **** of ****; (b) Nordion’s
****


 


11

















 


**** ****, **** or **** hereunder; (c) Nordion’s
**** or **** or ****; (d) any failure of Product to meet the ****; or (e) any
failure of Nordion to ****, ****, ****, ****, ****, **** or **** **** in
accordance with any applicable laws, regulations or other requirements of any
applicable Governmental Agency, including, but not limited to, any violation of
applicable laws or regulations concerning radioactive material. Notwithstanding
the foregoing, Nordion will not be required to indemnify, defend and hold
harmless LMI and its affiliates and their respective directors, officers,
employees and agents from and against any General Claims against LMI to the
extent that such claims arise out of (i) LMI’s breach of any of its obligations,
warranties or representations hereunder; (ii) LMI’s or its employees,
representatives, agents contractors or customers negligent acts or omissions or
willful misconduct, including but not limited with respect to the use, handling
or sale, storage combination, labeling, packaging, transport or disposal of
Product or Generators, or (iii) any failure of LMI, its employees,
representatives, agents, contractors or customers to manufacture, handle,
store, label, package, transport or ship Generators (including Product) in
accordance with any applicable laws, regulations or other requirements of any
applicable Governmental Agency, including, but not limited to, any violation of
applicable laws or regulations concerning radioactive material. Notwithstanding
anything in this Section 14.1, General Claims against LMI shall not
include intellectual property claims against LMI as described in Section 14.4.


 


14.2        LMI Indemnification
Obligations. LMI agrees to indemnify, defend and hold harmless
Nordion and its affiliates and their respective directors, officers, employees
and agents from and against any damages, claims, liabilities and expenses
(including, but not limited to, reasonable attorney’s fees and disbursements)
resulting from any third party claims or suits (“General Claims against Nordion”) arising out of (a) LMI’s
or its customer’s use, handling or sale, storage, combination, labeling,
packaging, transport or disposal of Product or Generators; (b) LMI’s
breach of any of its obligations, warranties or representations hereunder; (c) LMI’s
negligent acts or omissions or willful misconduct; or (d) any failure of
LMI to manufacture, handle, store, label, package, transport or ship Product or
Generators in accordance with any applicable laws, regulations or other
requirements of any applicable Governmental Agency, including, but not limited
to, any violation of applicable laws or regulations concerning radioactive
material. Notwithstanding the foregoing, LMI will not be required to indemnify,
defend and hold harmless Nordion and its affiliates and their respective
directors, officers, employees and agents from and against any General Claims
against Nordion to the extent that such claims arise out of (i) Nordion’s
breach of any of its obligations, warranties or representations hereunder; (ii) Nordion’s
or its employees, representatives, agents, contractors negligent acts or
omissions or willful misconduct, including but not limited with respect to the
manufacture, handling, storage, labeling or packaging of Product, (iii) any
failure of Product to meet the Specifications attributable to Nordion; or (iv) any
failure of Nordion, its employees, representatives, agents, contractors to
manufacture, handle, store, label, package, transport or ship Product in
accordance with any applicable laws, regulations or other requirements of any
applicable Governmental Agency, including, but not limited to, any violation of
applicable laws or regulations concerning


 


12

















 


radioactive material. Notwithstanding anything in
this Section 14.2 General Claims against Nordion shall not include
intellectual property claims against Nordion as described in Section 14.3.


 


14.3        Intellectual Property Claims
Against Nordion. LMI agrees to indemnify, defend and hold harmless
Nordion and its affiliates and their respective directors, officers employees
and agents from and against any damages, claims, liabilities and expenses
(including, but not limited to, reasonable attorney’s fees and disbursements) resulting
from any third party claims or suits arising out of any proceeding instituted
by or on behalf of a third party based upon a claim that,


 


(i)                  the use or sale of LMI’s
Generators or use, method of use or application of the Product sold by LMI in
combination with another substance, and


 


(iii)            the performance of any of
LMI’s obligations hereunder,


 


infringes any United States or other patent or any
other proprietary rights of a third party.


 


14.4        Intellectual Property Claims
Against LMI. Nordion agrees to indemnify, defend and hold
harmless LMI and its affiliates and their respective directors, officers,
employees and agents harmless from and against any damages, claims, liabilities
and expenses (including, but not limited to, reasonable attorney’s fees and
disbursements) resulting from any third party claims or suits arising out of
any proceeding instituted by or on behalf of a third party based upon a claim
that the process used in manufacturing Product, the Product, or the performance
of any of Nordion’s obligations hereunder infringes a United States or other
patent or any other proprietary right of a third party.


 


14.5        Indemnification Procedures. A party (the “Indemnitee”) which intends to claim
indemnification under this Section 14
shall promptly notify the other party (the “Indemnitor”) in writing of any action, claim or other matter
in respect of which the Indemnitee or any of its directors, officers, employees
or agents intend to claim such indemnification; provided, however, the failure
to provide such notice within a reasonable period of time shall not relieve the
Indemnitor of any of its obligations hereunder except to the extent the
Indemnitor is prejudiced by such failures. The Indemnitee shall permit, and
shall cause its directors, officers, employees and agents to permit the
Indemnitor, at its discretion, to settle any such action, claim or other
matter. The Indemnitee agrees to the complete control of such defense or
settlement by the Indemnitor, provided, however, such settlement does not adversely
affect the Indemnitee’s rights hereunder, admit liability by Indemnitee or
impose any obligations on the Indemnitee. No such action, claim or other matter
shall be settled without the prior written consent of the Indemnitee, and the
Indemnitee shall not be responsible for any attorney’s fees or other costs
incurred other than provided herein. The Indemnitee and its directors,
officers, employees and agents shall co-operate fully with the Indemnitor and
its legal representatives in the investigation and defense of any action, claim
or other matter covered by this indemnification. The Indemnitee shall


 


13

















 


have the right, but not the obligation, to be
represented by counsel of its own selection and at its own expense.


 


15.       Effect


 


15.1                           This Agreement,
together with the Schedules embodies and sets forth the entire agreement and
understanding of the parties with respect to the subject matter hereof and
there are no promises, terms, conditions or obligations, oral or written,
expressed or implied, other than those contained in this Agreement, the
Schedules and the CDA. The terms of this Agreement supersede all previous oral
or written agreements that may exist or have existed between the parties
relating to the subject matter of this Agreement. Neither party shall be
entitled to rely on any agreement, understanding or arrangement that is not
expressly set forth in this Agreement, the Schedules and the CDA. If LMI issues
any purchase orders in connection with this Agreement, this Agreement shall be
deemed to be incorporated by reference into the purchase order.


 


16.       Miscellaneous


 


16.1                           Binding Effect. The terms of
this Agreement shall bind Nordion and LMI and their respective successors and
permitted assigns.


 


16.2                           Use of Name. Except as
otherwise provided herein, neither party shall have any right, express or
implied, to use in any manner the name or other designation of the other party
or any other trade name or trademark of the other party for any purpose in connection
with the performance of this Agreement.


 


16.3                           Public
Announcements. The parties agree that, except as set out in this
Agreement or may otherwise be required by applicable law, no information
concerning this Agreement and the transactions contemplated herein shall be
made public by either party without the prior written consent of the other
party. Each party shall however, have the right to make any public statements
related to market supply without the consent of the other party provided there
is no anticipated adverse impact or effect on the reputation of the other party
and there is no reference specifically or which could reasonably be implied
identifying the other party or referencing the trade name or trademark of the
other party. In the event either party decides to issue a press release
announcing the execution of this Agreement, it shall not do so without the
prior written approval of the other party. A copy of any proposed press release
shall be provided to the other party for approval at least four (4) business
days prior to any proposed release. In the event that a disclosure is required
pursuant to security exchange rules and regulations or rules and
regulations of other Governmental Agencies or stock exchanges, LMI or Nordion
as the case may be, shall provide reasonable notice to the other party prior to
any such disclosure in order to permit, to the extent possible, such party to
purge or otherwise redact the disclosure of Confidential Information to the
extent permitted by applicable law, while enabling the other party to comply
with the applicable Governmental Agency or applicable law. Each party may
disclose this Agreement and the commercial relationship


 


14

















 


contemplated herein to potential successors and
permitted assigns or financing sources as may be required in connection with
the due diligence (and after receipt of a bona fide expression of interest)
obligations of such persons having a need to know such information. Prior to
LMI or Nordion disclosing this Agreement and the commercial relationship
contemplated herein to a potential successor or permitted assign that is a
direct competitor or customer of the non-assigning party, the assigning party
shall provide the non-assigning party an opportunity to redact or otherwise
protect its information of commercially sensitive nature. In any event any such
permitted disclosure shall be subject to confidentiality obligations of the
type substantially similar to those contained in this Agreement including the
CDA.


 


16.4                           Amendment or
Modification. This Agreement may not be amended, modified,
varied or supplemented, nor any provision hereof waived, except in writing
signed by duly authorized representatives of the both parties.


 


16.5                           Assignment. Neither party
shall be entitled to assign its rights under this Agreement hereunder without
the express written consent of the other party hereto, which shall not be
unreasonably withheld, except that LMI or Nordion may respectively assign their
rights under this Agreement without consent to (i) an Affiliate (as
defined in the CDA); or (ii) any assignee who acquires all or
substantially all of its assets or the relevant product line or business
division to which the Product pertains; or (iii) in the event of such
party’s merger or consolidation or similar transaction. No such assignment
shall be valid and effective unless and until the assignee shall agree in
writing to be bound by the provisions of this Agreement. Any assignment not in
accordance with this Section 16.5 shall be null and void.


 


16.6                           Sub-contracting. Either party
may sub-contract any of the work to be performed hereunder by such party with
the prior written consent of the other party, which consent shall not be
unreasonably withheld. No such sub-contracting shall relieve such party of its
obligations hereunder.


 


16.7                           Severability. If any
provision or term of this Agreement is found unenforceable under any of the
laws or regulations applicable thereto, all other conditions and provisions of
this Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement to effect the original intent of the parties as closely as
possible, in a mutually acceptable manner, in order that the transaction
contemplated hereby be consummated as originally contemplated to the greatest
extent possible.


 


16.8                           No Waiver. No failure or
delay on the part of either Nordion or LMI to exercise or enforce any rights
conferred on it by this Agreement shall be construed or operate as a waiver
thereof nor shall any single or partial exercise of any right, power or
privilege or further exercise thereof operate so as to bar the exercise or
enforcement thereof at any time or times thereafter. Any waiver of a breach of
any provision


 


15

















 


hereof shall not be effective unless in writing and
shall not affect either party’s rights in the event of any additional breach.


 


16.9                           No
Consequential Damages. In no event shall either party or its
respective employees, officers, directors or representatives be liable for
indirect, contingent, special, incidental or consequential damages (including
loss of profit or business opportunity). For purposes of clarity and
notwithstanding the immediately foregoing sentence, the parties acknowledge
that nothing in this Section 16.9 shall affect or limit any right that
Nordion may have to seek full payment from LMI for failure by LMI to purchase
and/or pay for its purchase volume commitments in accordance with Sections 3.4
and 6.2 of this Agreement.


 


16.10                     Survival. Sections 5.2,
14, 16.1 through 16.3, 16.5, 16.7 through 16.9, 18  (in accordance
with its terms), and 20.1 and such other sections which by their nature
survive, shall survive termination or expiration of this Agreement.


 


17.       Force Majeure


 


17.1                           Neither party
shall be liable to the other for failure to perform or delay in performing its
obligations under this Agreement by virtue of the occurrence of an event of
Force Majeure. In the event of Force Majeure, the party affected shall promptly
notify the other and shall exert commercially reasonable efforts to eliminate,
cure or overcome such event and to resume performance of its obligations. In
the event such Force Majeure affecting either party continues for more than ****
(****) days, either party may terminate this Agreement. “Force Majeure” shall mean an occurrence which  prevents,
delays or interferes with the performance by a party of any of its obligations
hereunder, if such event occurs by reason of any act of God, flood, power
failure, fire, explosion, casualty or accident, or war, revolution, civil
commotion, acts of public enemies, acts of terrorism, blockage or embargo, or
any law, order or proclamation of any government, failure of suppliers or usual
suppliers to provide materials, equipment or machinery, or interruption of or
delay in transportation, strike or labor disruption, or other similar cause
beyond the reasonable control of such party.


 


LMI has been informed, acknowledges and agrees that
as of the Effective Date, Nordion was, is and continues to currently be subject
to an event of Force Majeure in that its usual supplier, the NRU Reactor, is
unable to supply Molybdenum-99 material used in the production of Product,
which Force Majeure may endure for a period of time, and as such Nordion may
not be in a position to accept and/or fulfill any purchase order issued by LMI
under this Agreement. LMI further acknowledges and agrees that Nordion has
exerted commercially reasonable efforts to eliminate, cure or overcome such
current Force Majeure.


 


18.       Insurance


 


18.1                           Comprehensive
General Liability Insurance. During the Contract Term
of this Agreement and for a period of **** (****) **** thereafter each
party at its own cost shall


 


16

















 


maintain in full force and effect Comprehensive
General Liability insurance coverage with a reputable insurer including without
limitation product liability, bodily injury, death and property damage, in an
amount of not less than US$**** per occurrence and in the aggregate. Nothing
contained in this Section 18 shall be deemed to limit in any way the
indemnification provisions contained in this Agreement. Upon request each party
shall provide to the other a certificate of insurance evidencing such coverage.


 


19.       Notices


 


19.1                           Contact
Information. Any notice required or authorized to be given by a
party to the other in accordance with the provisions of this Agreement shall,
unless otherwise specifically stipulated, be in writing and delivered
personally, by a nationally recognized overnight courier, or if by electronic
facsimile confirmed by certified or registered mail. Notice shall be deemed
delivered upon receipt.


 


	
  If to NORDION, to:

  	
   

  	
  If to LMI, to:

  
	
  MDS Nordion

  	
   

  	
  Lantheus Medical Imaging, Inc. 

  
	
  447 March Road

  	
   

  	
  331 Treble Cove Road,

  
	
  P.O. Box 13500

  	
   

  	
  North Billerica, MA 01862

  
	
  Ottawa, Ontario K2K 1X8

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: Vice President Global Sales 

  	
   

  	
  Attention: Vice President, Manufacturing 

  
	
  Telephone: (613) 592-2790

  	
   

  	
  Telephone: (978) 671-8853

  
	
  facsimile: (613) 592-0767

  	
   

  	
  Facsimile: (978) 671-9577

  
	
   

  	
   

  	
   

  
	
  and

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
  Attention: Associate General Counsel 

  	
   

  	
  Attention: Vice President and General Counsel 

  
	
  Telephone: 613 592-2790

  	
   

  	
  Telephone: (978) 671-8408

  
	
  Facsimile: 613 592-0571

  	
   

  	
  Facsimile: (978) 671-8724

  



 


20.                               Governing Law


 


20.1                           Applicable Law. The
construction, validity and performance of the Agreement shall be governed and
construed in accordance with the laws of Ontario and the laws of Canada
applicable therein, without giving effect to its choice of law rules. The
application of the United Nations Convention on the International Sale of Goods
is expressly excluded.


 


21.                               Dispute Resolution


 


21.1                           Except as set
forth in Section 4.6 hereof, any and all disputes arising from this
Agreement shall be amicably and promptly settled upon consultation among the
parties. The parties agree that if an amicable settlement is not reached within
seven


 


17

















 


(7) days after commencing consultation, the
disputes shall be escalated to the officers named in Section 19.1 hereof
or their respective designees. In the event such officers fail to meet or, if
they meet, fail to resolve the dispute within an additional ten (10) business
days, then the dispute may be submitted to a court of competent jurisdiction.


 


[The remainder of this page is
intentionally left blank.]


 


18














 


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their representatives thereunto duly authorized as of the Effective
Date.


 


	
  Lantheus Medical Imaging, Inc.

  	
   

  	
  MDS Nordion, a division of

  
	
   

  	
   

  	
  MDS (Canada) Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ William C. Dawes, Jr.

  	
   

  	
  By:

  	
  /s/ Steven M. West

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  William C. Dawes, Jr.

  	
   

  	
  Name:

  	
  Steven M. West

  	
  [SEAL]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  V.P. Manufacturing & Supply Chain

  	
   

  	
  Title:

  	
  CEO MDS INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  4-23-10

  	
   

  	
  Date:

  	
  4-26-10

  	
   

  



 


19