Exhibit
10.27


 


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.


 


	
  CONFIDENTIAL

  	
   

  	
  EXECUTION COPY

  



 


MANUFACTURING AND SUPPLY
AGREEMENT


 


This Manufacturing and Supply Agreement (this “Agreement”),
dated as of April 6, 2009 (the “Effective Date”), is hereby entered into
by and between Lantheus Medical Imaging, Inc., a
corporation organized and existing under the laws of Delaware with its
principal place of business at 331 Treble Cove Road, North Billerica, MA 01862
(“LMI”), and Mallinckrodt Inc.,
a corporation organized and existing under the laws of Delaware with a place of
business at 675 McDonnell Blvd., Hazelwood, MO 63042, and its Affiliates, as
applicable (“COV”). LMI and COV are referred to herein individually as a
“Party” and collectively as the “Parties”.


 


RECITALS


 


WHEREAS, COV is experienced in the manufacture and
supply of contrast imaging agents, including the gadolinium-based contrast
agent currently identified by the trademark VasovistTM (the “Base
Product”), which has been approved by the FDA (as hereinafter defined) for use
in certain indications in the field of magnetic resonance imaging;


 


WHEREAS, LMI has acquired all rights in and to the
manufacturing and commercialization of the Product in the Territory (as
hereinafter defined) from EPIX Pharmaceuticals, Inc. (“EPIX”);


 


WHEREAS, LMI desires that COV manufacture the
Product for and supply the Product to LMI on the terms and conditions set forth
in this Agreement; and


 


WHEREAS, COV has experience manufacturing and
formulating the Product pursuant to that certain Manufacturing and Supply
Agreement, dated June 9, 2000, as amended by the First Amendment to
Manufacturing and Supply Agreement, dated as of September 11, 2006, by and
between COV and Bayer Schering Pharma AG, a German corporation, which was
formerly known as Schering Aktiengesellschaft (such corporation being
hereinafter referred to as “Bayer/Schering”); and


 


WHEREAS, COV is willing to manufacture the Product
for and supply the Product to LMI on the terms and conditions set forth in this
Agreement;


 


NOW, THEREFORE, in consideration of the mutual
covenants and agreements contained herein, the Parties, intending to be legally
bound, hereby agree as follows:


 


1.                                      DEFINITIONS


 


1.1                               Defined
terms. As used herein, the following terms shall have the following meanings:


 


(a)                                 “Affiliate”
means any corporation or other entity which controls, is controlled by, or is
under common control with, a Party to this Agreement. A corporation or other
entity shall be regarded as in control of another corporation or entity if it
owns or


 

















 


directly or indirectly controls more than fifty
percent (50%) of the voting stock or other ownership interest of the other
corporation or entity, or if it possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of the corporation
or other entity or the power to elect or appoint fifty percent (50%) or more of
the members of the governing body of the corporation or other entity.


 


(b)                                 “Batch”
means a specific quantity of Product that is intended to have uniform character
and quality, within specified limits, and is produced according to a single
manufacturing order during the same cycle of manufacture.


 


(c)                                  “cGMPs”
means the current good manufacturing practices required by the FDA pursuant to
21 CFR Parts 210 and 211 and ICH Q7, each as amended from time to time.


 


(d)                                 “CMC”
means (i) manufacturing process development for Drug Substance, Ligand
Excipient and all presentations of Product; (ii) all chemistry, manufacturing
and control procedures necessary for the manufacturing, testing and quality
control release of Drug Substance, Ligand Excipient and all presentations of
the Product; and (iii) sourcing and testing of all raw materials and components
used in the production of Drug Substance, Ligand Excipient, and all
presentations of Product.


 


(e)                                  “Calendar
Quarter” means any period of three consecutive calendar months commencing
with the first day of any January, April, July, or October.


 


(f)                                   “DMF”
means a Drug Master File as described in 21 CFR 14.420.


 


(g)                                  “Drug
Substance” means the pharmacologically active drug substance whose chemical
name is ****, and which is also known by the code name MS-32520-R, in bulk
chemical form, which can be used to manufacture Unlabeled Vials and Product
pursuant to the Product NDA.


 


(h)                                 “FDA”
means the United States Food and Drug Administration or any successor entity
thereto.


 


(i)                                     “Intellectual
Property” means all right, title and interest in or relating to
intellectual property, whether protected, created or arising under the laws of
the United States or any other jurisdiction in the Territory, including: (i)
all patents and applications therefor, including all continuations,
divisionals, and continuations-in-part thereof and patents issuing thereon,
along with all reissues, reexaminations and extensions thereof (collectively, “Patents”);
(ii) all copyrights and all mask work, database and design rights, whether or
not registered or published, all registrations and recordations thereof and all
applications in connection therewith, along with all reversions, extensions and
renewals thereof; (iii) all trade secrets; and (iv) all other intellectual
property rights arising from or relating to Technology.


 


(j)                                    “Ligand
Excipient” means the excipient whose chemical name is ****, in


 


2

















 


bulk chemical form, which can be used to manufacture
Unlabeled Vials and Product pursuant to the Product NDA.


 


(k)                                 “Lot”
means a Batch, or a specific identified portion of a Batch.


 


(1)                                 “Producer
Price Index” or “Index” or “PPI” means the ****, published by the United
States Department of Commerce. In the event that publication of the Producer
Price Index is discontinued, the Parties will agree on an appropriate
substitute index that is substantially similar in substantive coverage.


 


(m)                             “Product”
means the final finished dosage form presentations of Vasovist (or such other
name as LMI may choose to use in the Territory) manufactured from the Drug
Substance and Ligand Excipient pursuant to the Product NDA, tested, released,
and suitable for distribution in commerce in the Territory without further
processing or packaging. The Product sizes will be 10 mL and 15 mL glass vials.


 


(n)                                 “Product NDA”
means the New Drug Application filed with the FDA for the Product pursuant to
the federal Food, Drug and Cosmetic Act and the regulations promulgated
thereunder, and any amendments or Supplemental New Drug Applications thereto,
or documents incorporated by reference.


 


(o)                                 “Quality
Agreements” means the agreements described in Section 5.7.


 


(p)                                 “Raw
Materials” means ****


 


(q)                                 “Specifications”
means the written specifications for the Product, Drug Substance and Ligand
Excipient, respectively, attached hereto as Exhibit 1.1(q), as the same
may be amended from time-to-time pursuant to the provisions of Section 2.8.


 


(r)                                    “Technology”
means, collectively, all information, designs, formulae, algorithms,
procedures, methods, techniques, ideas, know-how, research and development,
technical data, programs, subroutines, tools, materials, specifications,
processes, inventions (whether patentable or unpatentable and whether or not
reduced to practice), apparatus, creations, improvements, works of authorship
and other similar materials, and all recordings, graphs, drawings, reports,
analyses, and other writings, and other tangible embodiments of the foregoing,
in any form whether or not specifically listed herein, and all related
technology, that are used in, incorporated in, embodied in, displayed by or
relate to, or are used in connection with the foregoing.


 


(s)                                   “Territory”
means (i) the United States of America, including the states thereof, the
District of Columbia and the Commonwealth of Puerto Rico, but excluding each of
its other territories, (ii) Canada and (iii) Australia. Additional countries or
regions may be added to the Territory upon mutual written agreement of the
Parties.


 


3

















 


(t)                                    “Term”
shall have the meaning set forth in Section 3.1 of this Agreement.


 


(u)                                 “Unlabeled
Vials” means the Base Product fully manufactured and packaged into glass
vials or other primary glass packaging described in the Product NDA, tested,
and released but without commercial or clinical labels or labeling.


 


1.2                               Interpretation.
References in this Agreement to the singular include references to the
plural and vice versa. Unless the context otherwise requires, references in
this Agreement to Articles, Sections, and Exhibits shall be deemed references
to Articles and Sections of, and Exhibits to, this Agreement. Unless the
context otherwise requires, the words “hereof”, “hereby” and “herein” and words
of similar meaning when used in this Agreement refer to this Agreement in its
entirety and not to any particular Article, Section or provision of this
Agreement. Any reference to any federal, state or local statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder,
unless the context requires otherwise.


 


2.                                      PRODUCT
MANUFACTURE: SUPPLY; TERMS


 


2.1                               Purchase
and Sale.


 


(a)                                 COV (or any
appropriately licensed and qualified Affiliate, approved in advance by writing
by LMI, such approval not to be unreasonably withheld or delayed) shall
manufacture, sell and deliver to LMI, and LMI shall purchase from COV, the
Product on the terms and conditions and in the quantities set forth in this
Agreement.


 


(b)                                 The Parties
anticipate that LMI will generally purchase Product, but not Drug Substance or
Ligand Excipient, during the Term. If LMI desires at any time during the Term
to purchase Drug Substance or Ligand Excipient, it shall notify COV through the
forecasting and ordering procedures set forth in Section 2.4(a); provided that
any order for Drug Substance or Ligand Excipient (i) for less than **** kg of
Drug Substance or Ligand Excipient will require no more than six (6) months’
prior written notice from LMI to COV and (ii) for **** kg or more of Drug
Substance or Ligand Excipient will require no more than twelve (12) months
prior written notice from LMI to COV. LMI will not order more than **** kg of
Drug Substance and Ligand Excipient, in the aggregate, during the Term.


 


2.2                               Existing
Drug Substance and Ligand Excipient at COV. As of the Effective Date,
COV has inventories of Drug Substance and Ligand Excipient as set forth on Exhibit
2.2. The following provisions shall apply with respect to these materials:


 


(a)                                 Subject to and
upon successful completion of the re-testing contemplated by Section 2.2(c),
COV will sell usable Drug Substance and Ligand Excipient as set forth on Exhibit
2.2, which (i) has not yet expired or (ii) has expired but passes
re-testing, to LMI, and LMI will  purchase such materials from COV, for
the amount of **** Dollars ($****) per kilogram of either Drug Substance or
Ligand Excipient. COV will invoice LMI for the amount of the purchase price
payable for such Drug Substance and Ligand Excipient and LMI will pay such
invoice in accordance with the provisions set forth in Section 2.6 below.


 


4

















 


(b)                                 On or before
the later of (A) July 1, 2009, and (B) sixty (60) days after receipt by COV
from LMI of all required packaging information, artwork and materials (as
provided for in Section 2.9), COV will formulate the Drug Substance and Ligand
Excipient referred to in Section 2.2(a) and which passed re-testing, into
Product for a fee of **** Dollars ($****) per vial, and deliver such resulting
Product to LMI. COV will fill approximately **** percent (****%) of this Base
Product in 10 mL vials, and **** percent (****%) of this Base Product in 15 mL
glass vials. LMI will provide COV with not less than one hundred twenty (120)
days prior written notice of any anticipated change in this ratio. COV will
invoice LMI concurrent with shipment for the amount payable under this
provision and LMI will pay such invoice in accordance with the provisions set
forth in Section 2.6 below.


 


(c)                                  LMI
acknowledges that the materials set forth on Exhibit 2.2 will require
re-testing by COV in order to assess their continuing compliance with
applicable Specifications for use in formulating Product. The protocol for such
re-testing shall be mutually agreed upon by the Parties. COV will not have any
liability or other financial exposure for materials that fail testing under
these provisions (it being agreed that LMI will not be obligated to purchase
such materials which failed testing), nor will COV have any obligation to
manufacture Product in replacement thereof, unless otherwise agreed to by the
Parties in writing.


 


2.3                               Existing
Product and Drug Substance at Bayer/ Schering. As of the Effective Date,
Bayer/Schering has existing inventories of Base Product and Drug Substance as
set forth on Exhibit 2.3 to this Agreement, reflecting Base Product and
Drug Substance, respectively, that it previously purchased from COV under the
Manufacturing and Supply Agreement referenced in the recitals to this
Agreement.


 


(a)                                 Existing
Inventory of Base Product. The following provisions
shall apply with respect to this existing inventory of Base Product held by
Bayer/Schering:


 


(i)                                     LMI will, in
its discretion, purchase the existing inventory of Base Product held by
Bayer/Schering from Bayer/Schering and will, at LMI’s cost and risk of loss,
deliver or cause such Base Product to be delivered to COV at such location as
COV directs in writing.


 


(ii)                                  Within thirty
(30) business days after receiving the existing inventory of Base Product held
by Bayer/Schering from Bayer/Schering, COV will test this Base Product for
continuing conformance with the applicable Specifications. The protocol for
such testing shall be mutually agreed upon by the Parties. LMI will reimburse
COV for such testing in an amount equal to COV’s actual reasonable testing
costs (including employee time) plus **** percent (****%). If any  such
Base Product fails testing, COV will promptly notify LMI with a description of
the basis for such failure. Upon receipt of such notice, LMI will (i) promptly
arrange for the disposal of or (ii) request that COV ship to such location as
LMI shall designate in writing any Base Product that failed to meet
Specifications. COV will not have any liability or other financial exposure for
Base Product that fails testing under these provisions, nor will COV have any
obligation (i) for the cost and expense of disposal or shipment of such


 


5

















 


Base Product or (ii) to manufacture Product in
replacement thereof, unless otherwise agreed to by the Parties in writing.


 


(iii)                               On or before
the later of (A) July 1, 2009, or (B) sixty (60) days after receipt by COV from
LMI of both (1) the Base Product currently held by Bayer/Schering and (2) all
required packaging information, artwork and materials (as provided for in
Section 2.9), COV will complete labeling, packaging and final release testing
for the existing inventory of Base Product acquired from Bayer/Schering, and
deliver such resulting Product to LMI, for a fee of **** Dollars ($****) per
vial. COV will invoice LMI concurrent with shipment for the amount payable
under this provision and LMI will pay such invoice in accordance with the
provisions set forth in Section 2.6 below.


 


(iv)                              The Parties
acknowledge that any Product and/or Base Product described in this Section
2.3(a) will continue to bear the same shelf life as presently pertains to such
Product and/or Base Product (i.e., the existing shelf life of these vials will
not change).


 


(b)                                 Existing
Inventory of Drug Substance. The following provisions
shall apply with respect to this existing inventory of Drug Substance held by
Bayer/Schering:


 


(i)                                     Within thirty
(30) days after receiving the Drug Substance described on Exhibit 2.3,
COV will test this Drug Substance for continuing conformance with the
applicable Specifications. The protocol for such testing shall be mutually
agreed upon by the Parties. LMI will reimburse COV for such testing in an amount
equal to COV’s actual reasonable testing costs plus **** percent (****%). If
any such Drug Substance fails testing, COV will promptly notify LMI with a
description of the basis for such failure. Upon receipt of such notice, LMI
will (i) promptly arrange for the disposal of or (ii) request that COV ship any
Drug Substance that failed to meet Specifications to a destination specified by
LMI. COV will not have any liability or other financial exposure for Drug
Substance that fails testing under these provisions, nor will COV have any
obligation (i) for the cost and expense of disposal or shipment of such Drug
Substance or (ii) to manufacture Drug Substance in replacement thereof, unless
otherwise agreed to by the Parties in writing.


 


(ii)                                  On or before
the later of (A) October 1, 2009 or (B) sixty (60) days after receipt by COV
from LMI of both (1) the Drug Substance currently held by Bayer/Schering and
(2) all required packaging information, artwork and materials (as provided for
in Section 2.9), COV will formulate **** percent (****%) of the existing Drug
Substance acquired from Bayer/Schering that successfully passes testing, as
described above, into Base Product for a fee of **** Dollars ($****) per vial
(either 10 mL and/or 15 mL glass vials), and deliver such resulting Base
Product to LMI. On or before the later of (A) December 31, 2009 or (B) sixty
(60) days after receipt by COV from LMI of both (1) the Drug Substance
currently held by Bayer/Schering and (2) all required packaging information,
artwork and materials (as provided for in Section 2.9), COV shall formulate the
remaining **** percent (****%) of the existing Drug Substance acquired from
Bayer/Schering that successfully passes testing, as described


 


6

















 


above, into Base Product for
a fee of **** Dollars ($****) per vial (either 10 mL and/or 15 mL glass vials),
and deliver such resulting Base Product to LMI. In each instance, COV will fill
approximately **** percent (****%) of this Base Product in 10 mL vials, and ****
percent (****%)  of
this Base Product in 15 mL glass vials. LMI will provide COV with not less than
one hundred twenty (l20) days prior written notice of any anticipated change in
this ratio. COV will invoice LMI concurrent with shipment for the amount
payable under this provision and LMI will pay such invoice in accordance with
the provisions set forth in Section 2.6 below.


 


2.4                               Newly-Manufactured
Drug Substance, Product and Ligand Excipient. COV will manufacture and
supply Drug Substance, Product and Ligand Excipient to LMI, and LMI will
purchase Drug Substance, Product and Ligand Excipient, in accordance with the
schedule attached hereto as Exhibit 2.4. The following provisions shall
apply with respect to these materials:


 


(a)                                 Forecasts;
Orders. (i) As soon as practicable following the execution
of this Agreement, but no later than the submission of LMI’s initial purchase
order for newly-manufactured product pursuant to Section 2.4(b), LMI shall send
to COV LMI’s initial forecast by Calendar Quarter of the volume of Product
(indicating the presentation desired), and for Drug Substance and/or Ligand
Excipient (if any), which LMI expects to have delivered from COV during the
four (4) Calendar Quarters commencing July 1, 2010. Each forecast submitted by
LMI must reflect not less than the Minimum Volumes of Product as shown for each
Calendar Quarter on Exhibit 2.4 to this Agreement. LMI shall thereafter
update each such forecast on a quarterly basis, providing COV with a rolling ****
(****) month forecast of its requirements for Product, and for Drug Substance
and/or Ligand Excipient (if any). It is understood that, except for the first
Calendar Quarter of each forecast and subject to LMI’s obligation to purchase
the Minimum Volumes of Product for each Calendar Quarter as described in
Section 2.4(c), this forecast will not be binding on the Parties. In addition,
and having regard for the forecast hereinabove referred to and the Minimum
Volume obligation described in Section 2.4(c), at least three (3) months prior
to the beginning of each Calendar Quarter, commencing with the Calendar Quarter
beginning July 1, 2010, LMI will furnish COV with purchase orders for the
volume of Product (including the presentations desired), and for Drug Substance
and /or Ligand Excipient (if any), which LMI shall purchase, and which COV
shall deliver, during such quarter. The Parties anticipate that LMI will place
orders for Product at a ratio of **** percent (****%) for 10 mL vials and ****
percent (****%) for 15 mL vials, which percentages will be confirmed for each individual
purchase order. LMI will provide COV with not less than one hundred twenty
(120) days prior written notice of any anticipated change in this ratio.


 


(b)                                 Initial
Order. LMI will submit its initial purchase order for newly-manufactured
Product (which shall comply with LMI’s Minimum Volume purchase requirement as
described in Section 2.4(c)), Drug Substance and/or Ligand Excipient (if any)
to COV, in writing, not later than January 1, 2010. LMI shall provide all
applicable artwork and labeling with respect to the initial order of Product,
as provided for in Section 2.9, to COV not later than March 31, 2010.


 


7

















 


(c)                                  Minimum
Purchase Requirement. Notwithstanding anything to the contrary set
forth in this Agreement, each forecast and purchase order submitted by LMI must
not be less than the Minimum Volumes of Product as shown for each Calendar
Quarter on Exhibit 2.4 to this Agreement. COV will use commercially
reasonable efforts to accommodate any increase in quantities of Product ordered
by LMI; provided, that LMI will communicate any such increased orders to COV
not less than six (6) months prior to the Calendar Quarter in which delivery of
such additional Product is requested.


 


(d)                                 Rejection
of Orders. COV shall use commercially reasonable efforts to accept
each purchase order and confirm the date of shipment within ten (10) business
days of receipt thereof; provided, however, that COV may refuse confirmation of
a purchase order and/or the requested delivery date if and to the extent that:


 


(i)                                     the purchase
order is for quantities of Product for which an appropriate forecast and order
were not submitted in accordance with the foregoing provisions of this Section
2.4;


 


(ii)                                  the purchase
order otherwise fails to comply with the terms and conditions of this
Agreement; or


 


(iii)                               COV cannot meet
the requested delivery date as a result of a Force Majeure Event.


 


(e)                                  Prices.
Pricing for Drug Substance, Product and Ligand Excipient supplied by
COV under this Section 2.4 shall be as follows:


 


·                       Drug Substance:
$**** / kg


·                       Ligand
Excipient: $**** / kg


·                       Product (10 mL
vial): $****/vial for 2010, $ **** for 2011 and 2012


·                       Product (15 mL
vial): $****/vial for 2010, $ **** for 2011 and 2012


 


On each (anniversary of the Effective Date (“Measurement
Date”), COV shall invoice LMI for the amount, if any, by which the aggregate
cost of the Raw Materials utilized by COV in manufacturing Drug Substance,
Ligand Excipient and Product under this Agreement during the 12-month period
then ending has increased by a percentage that exceeds the increase in the Producer
Price Index for the same time period. The calculation of the increase of the
Producer Price Index shall be based on the difference between the most recently
available Producer Price Index on the Effective Date and on each Measurement
Date thereafter for the duration of the Term. LMI will pay any invoice
submitted by COV under this provision within **** (****) days of receipt.


 


(f)                                   Pre-payment
of Cost of Intermediates. Effective as of the first
day of each Calendar Quarter beginning April 1, 2010, and continuing for the
remainder of the Term, LMI will pay COV an amount equal to (i) $**** / kg
multiplied by (ii) the quantity of Drug Substance and Ligand Excipient required
to be used by COV in the formulation of Product that is scheduled for delivery
in the next following Calendar


 


8

















 


Quarter. For purposes of example only, the amount
owed by LMI on April 1, 2010, would be determined by reference to the quantity
of Product scheduled for delivery by COV to LMI in the Calendar Quarter
beginning July 1, 2010. The amount of each pre-payment will be deducted from
the amount payable by LMI upon actual delivery of the corresponding Product.


 


(g)                                  Superiority
of Agreement. The terms of this Agreement and of the Quality Agreements
shall prevail over any inconsistent terms in any purchase order, acknowledgment
or invoice, and no additional terms other than those set forth in this
Agreement and the Quality Agreements or allowed pursuant to the terms of this
Section 2.4 in a purchase order, acknowledgement or invoice shall be binding on
either Party.


 


2.5                               Delivery.


 


(a)                                 Schedule;
Quantities. COV  will ship, and LMI will take
delivery, of all newly-manufactured Drug Substance, Product and Ligand
Excipient on or about the first business day of the corresponding Calendar
Quarter for which delivery is specified in Exhibit 2.4. Product provided for in
Sections 2.2 and 2.3 of this Agreement will be delivered at the times specified
in such Sections. Volumes supplied by COV will have a variance of plus or minus
five percent (5%); invoices will reflect actual quantities delivered. COV
agrees to provide LMI with thirty (30) days advance notice in the event COV is
unable to supply the volumes of Drug Substance, Product and Ligand Excipient as
specified in this Agreement or in each relevant purchase order.


 


(b)                                 Terms
of Delivery. Delivery terms shall be ****’s manufacturing
facility (which shall be either **** in **** or ****), at which time risk of
loss and responsibility for Product, Drug Substance and/or Ligand Excipient
will transfer to LMI, but not in the event of deliveries between COV
facilities. COV shall ship the Product, Drug Substance or Ligand Excipient
using COV’s designated carrier in accordance with LMI’s instructions regarding
destination, delivery date, temperature control and such other factors as LMI
reasonably believes are relevant for purposes of the delivery. COV shall ship
all Product, Drug Substance or Ligand Excipient to one location designated by
LMI.


 


2.6                               Payment
Terms.


 


(a)                                 Terms.
All payments to be made by LMI or credits to be issued to LMI under
this Agreement shall be made within **** (****) days after the date of receipt
of the corresponding invoice. Such payments shall be made in U.S. dollars by
wire transfer as designated by COV or LMI, as applicable, or by such other
method as COV or LMI shall reasonably designate from time to time. In no event
shall LMI be responsible for any payments related to Drug Substance, Ligand
Excipient and Product for which COV was unable to satisfy its obligations under
this Agreement, whether by Force Majeure Event or otherwise.


 


(b)                                 Late
Payment. Interest shall be payable on all amounts not paid on
the due date at a rate of 1% for each whole or partial month the amounts remain
unpaid.


 


9

















 


(c)                                  Taxes.
LMI will reimburse COV for all tariffs, duties and excise, sales or
use, value added or other taxes or levies (collectively, “Taxes”) that may be paid by COV with respect to
the sale to LMI of Drug Substance, Ligand Excipient and Product under this
Agreement. The parties shall work together to minimize any such Taxes. For the
avoidance of doubt, LMI will have no reimbursement obligations under this
Section to the extent that Taxes are based on COV’s net income.


 


2.7                               Technology
Transfer. During the Term, LMI shall have the right to qualify
itself, or an Affiliate or third party as a manufacturer of Drug Substance,
Ligand Excipient or Product, and to seek and obtain regulatory approval of such
manufacturing site or sites. If LMI desires to exercise its rights in this
Section 2.7, LMI shall notify COV of such decision in writing, specifying the
Technology to be transferred (“Technology Transfer Notice”). Upon receipt of
such Technology Transfer Notice, the Parties will agree in good faith upon a
schedule for commencement and completion of the Technology transfer, which in
no event will continue for a period of more than **** (****) months. COV shall
only be required on one occasion during the Term to make a Technology transfer
for each component or process hereunder (e.g., Drug Substance manufacture,
Product formulation, Product packaging, etc.). Any transfer of Technology under
this provision will be pursuant to a protocol established by LMI and shall
include the delivery of all documents required to carry out the Technology
transfer. Subject to the immediately preceding limitations, at the reasonable
request of LMI, COV will provide LMI with reasonable assistance in effecting a
Technology transfer (including laboratory methods) at the rate of **** Dollars
($****) per employee hour, plus reimbursement of COV’s out-of-pocket costs. No
in-field work will be required of COV personnel in connection with a Technology
transfer.


 


2.8                               Specifications
Ex-United States; Change in Specifications.


 


(a)                                 Ex-United
States. Before placing purchase orders for any Drug
Substance, Ligand Excipient and/or Product for sale or distribution in any
country within the Territory other than the United States, LMI will ensure that
the Specifications in such country are identical to the Specifications as are
then in effect in the United States.


 


(b)                                 Changes.
LMI shall have the right (subject to obtaining approval of the FDA and any
other applicable regulatory authority), to change, on a country-by-country
basis, with COV’s consent, which shall not be unreasonably withheld and upon
six (6) months’ advance written notice to COV, the Specifications and/or the
package size, packaging configuration, label design and content in which or
with which it chooses to have COV deliver the Product; provided, however, that
(i) any change which COV is reasonably able to implement in less than six (6)
months shall be implemented within the time period agreed upon by the Parties,
and (ii) any such change occasioned by the requirements of law, safety
considerations, or the request of FDA or other applicable regulatory authority,
shall be implemented as soon as possible. In the event of any change described
above, (A) COV shall assist LMI in accomplishing the same; (B) inventory of
obsolete materials and reasonable disposal costs thereof shall be charged to
LMI, (C) funding for capital improvements specifically required by the change
(and which COV would not undertake


 


10






 










 


but for the change in Specifications), subject to
LMI’s prior approval therefor, shall be provided by LMI, and (D) any other
incremental cost incurred as a consequence of such change shall be for the
account LMI. The Parties acknowledge that any change in Specifications will
result in a corresponding delay in the delivery by COV of Product under this
Agreement.


 


2.9          Packaging Information. LMI shall provide COV with all packaging
and labeling information and designs, including without limitation, all art work
and pharmacological information, usage instructions and warnings to be applied
to each Product at least sixty (60) days in advance of any requirement that
Product be delivered in packaged form to enable COV to obtain the necessary
packaging materials and meet such delivery requirements. LMI will be fully
responsible and liable for the content and format of all labeling and artwork
used in connection with the supply of Product hereunder. COV shall be solely
responsible for ensuring that the content and format of all labeling and
artwork used in connection with the supply of the Product, Drug Substance or
Ligand Excipient, as provided by LMI, are accurately and consistently produced
in accordance with the Specifications. The Parties shall cooperate to ensure
that all packaging and labeling information and materials are compatible with
COV’s equipment and specifications. LMI will reimburse COV for COV’s
out-of-pocket costs in obtaining plates and related supplies necessary for the
printing of packaging information as described herein, and upon termination
hereof, such plates shall become the property of LMI. LMI agrees to reimburse
COV to the extent COV incurs additional costs and expenses arising from any
changes requested by LMI to the packaging, labeling information and designs to
be applied to each Product as necessary for the distribution of the Product in
Canada, Australia or any additional countries as the Parties mutually agree.


 


2.10        Changes in
Manufacturing Processes. COV reserves the right to implement reasonable process changes and
improvements during the Term but in all instances subject to LMI’s prior
written approval. COV agrees to notify LMI promptly of any such change or
improvement. If any such change or improvement requires, in COV’s reasonable
judgment, regulatory approval, COV will provide drafts of the proposed
filing(s) to LMI for review and LMI will provide its approval or comments
within thirty (30) days from the date of receipt. LMI will in all events
reasonably cooperate with COV in effecting any process changes or improvements
reasonably requested by COV.


 


3.           TERM; TERMINATION


 


3.1          Term; Renewal. This Agreement shall commence on the
Effective Date and unless terminated sooner in accordance with the terms and
conditions hereof shall continue in effect until September 30, 2012 (such
period being referred to in this Agreement as the “Term”). This Agreement may
be extended for an additional term only in accordance with the mutual written
agreement of the Parties.


 


3.2          Termination by Mutual Agreement.
This Agreement
may be terminated by mutual written agreement of COV and LMI at any time.


 


3.3          Termination for Cause. This Agreement may be terminated by a
Party as follows:


 


11

















 


(a)           If a Party institutes for
its protection or is made a defendant in any proceeding under bankruptcy,
insolvency, reorganization or receivership law, or such Party is placed in
receivership, makes an assignment for benefit of creditors or is unable to meet
its debts in the regular course of business, the other Party may elect to
terminate this Agreement immediately by written notice to the first Party
without prejudice to any right or remedy the other Party may have, including
damages for breach.


 


(b)           In the event that a Party
materially defaults under or materially breaches any of the provisions of this
Agreement or the Quality Agreements, the other Party shall have the right to
terminate this Agreement upon sixty (60) days’ prior written notice, unless
such material default or breach is cured during such sixty (60) day period (or
in the event any breach is incapable of being cured in such time period, the
other Party presents a plan to attempt cure of such breach and prevent similar
breaches, which plan is reasonably acceptable to the terminating Party), in
which event this Agreement shall continue in full force and effect.


 


(c)           If LMI is the Party with the
right to terminate this Agreement in accordance with Sections 3.3(b) due
to the uncured material breach of COV, LMI shall have the option to delay the
termination and continue to have COV supply LMI under this Agreement upon
written notice to COV detailing the same, until such time as the Technology
transfer described in Section 2.7 is complete and LMI has qualified and
obtained regulatory approval for itself, an Affiliate or a third party as
manufacturer of Drug Substance, Ligand Excipient and Product. COV shall be
responsible for any costs or expenses reasonably incurred by LMI as a result of
COV’s breach.


 


(d)           If COV is the Party with the
right to terminate this Agreement in accordance with Section 3.3(b) due to
an uncured material breach of LMI, LMI shall continue to make all payments
associated with the Minimum Volume purchase requirements for the remainder of
the Term.


 


3.4          Effect of Expiration or
Termination; Accrued Rights; Surviving Obligations. Upon any
expiration or termination of this Agreement:


 


(a)           Product
and Intermediates on Hand. COV shall notify LMI of the
amount of Product, Drug Substance, Ligand Excipient and intermediates it has on
hand as of the effective date of any termination or expiration as a result of
purchase orders placed by LMI, and LMI shall purchase such Product, Drug
Substance, Ligand Excipient and intermediates at the applicable price as set
forth in this Agreement (or at COV’s cost with respect to intermediates), but
LMI shall not be required to purchase any Product, Drug Substance, Ligand
Excipient or intermediates (i) that fails to meet Specifications, (ii) for
which COV is unable to provide the certificates of analysis specified in
Section 5.4 of this Agreement, (iii) for which COV is unable to
provide the certificates of manufacturing compliance specified in Section 5.5,
or (iv) that is appropriately rejected by LMI pursuant to Section 5.6.


 


(b)           Regulatory
Information. On and as of the effective date of any termination
or expiration, or such earlier date as LMI may reasonably request prior to an
upcoming


 


12

















 


termination or expiration, COV shall, promptly
transfer to LMI or its nominee all information and Technology in COV’s
possession and used in connection with the manufacture of the Product, Drug
Substance and Ligand Excipient, all information and Technology relevant to
specific methods of Product, Drug Substance and Ligand Excipient manufacture or
Product characterization, all information relevant to obtaining an FDA
regulatory approval and any other applicable regulatory approval of the
Product, all information contained in COV’s regulatory submissions in
connection with the development and approval of the Product, and all other
information relating to the manufacture of the Product, Drug Substance and
Ligand Excipient, which is useful to enable LMI or a third party to manufacture
and obtain regulatory approval for the Product for commercial sale. LMI and its
nominees may only use any information or Technology received pursuant to this
Section 3.4(b) in connection with the Product.


 


(c)           Orders in
Progress. In the event of any termination or expiration of
this Agreement, COV shall, unless such termination has occurred because of a
material uncured default by LMI under this Agreement, notwithstanding the
effective date of any termination or expiration, complete any purchase orders
for Product, Drug Substance or Ligand Excipient that were placed by LMI and
accepted by COV prior to such date and LMI shall pay COV for any Product, Drug
Substance or Ligand Excipient produced in accordance with such purchase orders
at the applicable price as set forth in this Agreement.


 


(d)           Post-Termination
Acceptance of Orders. Any acceptance by COV of any purchase order
from LMI or the sale of any Products by COV to LMI after the delivery of notice
of termination or after the expiration or termination of the Term shall not be
construed as a renewal or extension of this Agreement or as a waiver of
termination thereof.


 


(e)           Prior
Obligations. Termination or expiration of this Agreement, in
whole or in part, for any reason shall be without prejudice to any rights which
shall have accrued to the benefit of either Party prior to such termination or
expiration, and such termination or expiration shall not relieve either Party
from obligations which are expressly indicated to survive termination or
expiration of the Term.


 


4.             REGULATORY
ISSUES.


 


4.1          Regulatory Obligations. All obligations
relating to the Product NDA and DMF shall, at all times during the Term, remain
with LMI, including without limitation (A) the obligation to prepare and
make any updates or amendments to the Product NDA, DMF or CMC, (B) to pay
any fees or other costs associated with such filings or otherwise relating to
the Product, or (C) to collect, investigate and report to the FDA and
other appropriate regulatory authorities any Product-related adverse drug
experience reports, quality reports, and complaint reports. COV shall provide
LMI with access to any such information reasonably required to enable LMI to
comply with its obligations under this Section 4.1. COV shall remain
solely responsible at its expense during the Term for compliance with (A) cGMPs
(including any comparable requirements imposed by foreign authorities, but
limited to those jurisdictions that are within the Territory as set forth in
any amendment to this Agreement); (B) obtaining or


 


13

















 


maintaining establishment registrations and all other required permits
and licenses for all relevant facilities; and (C) the preparation and
submission of all records and reports required by FDA and other appropriate
regulatory authorities in connection with the manufacture and sale to LMI of
the Drug Substance, Ligand Excipient and Product.


 


4.2          Product Recalls.


 


(a)           If either Party reasonably decides or is required by
any government authority or court of competent jurisdiction, to initiate a
product recall, withdrawal or field correction with respect to, or if there is
any governmental seizure of, the Product, the Party initiating or required to
initiate such action will notify the other Party promptly of the details
regarding such action, including providing copies of all relevant documentation
concerning such action. The Parties will assist each other in investigating any
such situation and all regulatory contacts that are made and all activities concerning
seizure, recall, withdrawal or field correction will be jointly coordinated by
COV and LMI.


 


(b)           If any such recall, withdrawal, field correction or
seizure occurs due solely to (i) failure of any Product produced by COV
hereunder to conform to Specifications (including, without limitation, being
adulterated or misbranded) or any warranty or other requirement set forth in
this Agreement, (ii) the failure of COV to comply in all material respects
with any applicable law, rule, regulation, standard, court order or decree or
(iii) the negligent or intentional wrongful act or omission of COV in
connection with the production of Product hereunder, then COV shall bear the
full cost and expense of any such seizure, recall, withdrawal or field
correction and shall reimburse LMI for any purchase price payments made to COV
and related taxes to the extent related to such Product. If any such recall,
withdrawal, field correction or seizure occurs solely for any reason other than
that set forth in the immediately preceding sentence, then LMI shall bear the
full cost and expense of any such seizure, recall, withdrawal or field
correction. If both COV and LMI contribute to the cause of a seizure, recall,
withdrawal or field correction, the cost and expense thereof will be shared in
proportion to each Party’s contribution to the problem. For the purposes of
this Agreement, the expenses of any recall, withdrawal, field correction or
seizure shall include, without limitation, the out-of-pocket expenses of
notification and destruction or return of the recalled Product and all other
out-of-pocket costs incurred in connection with such recall, but shall not
include lost profits of either Party under any circumstances or any
administrative or overhead charge.


 


4.3          Sharing of Information. Each Party
shall promptly advise the other Party of any information of which it obtains
knowledge that may affect the safety, efficacy or labelling of the Products and
any actions in response to such information.


 


5.             WARRANTIES AND
QUALITY ASSURANCE


 


5.1          COV Warranties. COV warrants
that all Drug Substance, Ligand Excipient and Product delivered to LMI: (a) will
have been manufactured, packaged, labeled, tested and/or re-tested in
compliance with applicable provisions of the Federal Food, Drug and Cosmetic
Act (the “Act”), regulations thereunder, and any other comparable laws and
regulations applicable in the Territory, relating to manufacture and supply
under this Agreement, and in compliance with the


 


14

















 


specific U.S. or other applicable regulatory approvals regarding the
Drug Substance, Ligand Excipient and/or Product; (b) shall conform to the
Specifications; and (c) will, at the time of such delivery, not be
adulterated within the meaning of the Act or other applicable law, as such Act
or law is constituted and effective at the time of delivery, and will not be an
article which may not, under the provisions of such Act, be introduced into
interstate commerce. Except for Product and/or Base Product described in Section 2.3(a),
at the time of delivery, the Product shall have a minimum shelf life of **** (****)
months.


 


5.2          LMI Warranties. LMI warrants
that the marketing, distribution and sale of the Products in the Territory
shall at all times comply with the Act and all other applicable laws, rules and
regulations.


 


5.3          DISCLAIMER
OF ALL OTHER WARRANTIES. THE WARRANTIES SET FORTH IN
THIS AGREEMENT ARE THE PARTIES’ ONLY WARRANTIES WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT AND ARE MADE EXPRESSLY IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED, INCLUDING ANY
IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, OR
OTHERWISE.


 


5.4          Certificates of Analysis. COV shall
perform, or cause to be performed, sample tests on each Lot or Batch of Drug
Substance, Ligand Excipient or Product supplied pursuant to this Agreement
before delivery to LMI, and shall produce a test report setting forth the
results of such testing. Each test report shall set forth, for each Lot or
Batch of Drug Substance, Ligand Excipient or Product delivered hereunder, the
items tested, specifications and test results in a certificate of analysis,
containing the types of information reasonably agreed upon by COV and LMI. COV
shall send such certificates to LMI concurrent with delivery of each Lot or
Batch of Drug Substance. In addition, if LMI orders Ligand Excipient or
Product, COV shall send such certificates to LMI concurrent with delivery of
these items.


 


5.5          Certificates
of Manufacturing Compliance. COV shall provide or cause
to be provided for each Lot or Batch of Drug Substance, Ligand Excipient or
Product purchased under this Agreement a certificate of manufacturing
compliance, containing the type of information reasonably agreed upon by COV
and LMI, which will certify that the Lot or Batch of Drug Substance, Ligand
Excipient or Product was manufactured in accordance with the Specifications and
cGMP, including without limitation 21 CFR 210 and 211 and ICH Q7, as the same
may be amended from time to time. COV agrees that it shall maintain all of the
facilities used for the manufacture of the Drug Substance, Ligand Excipient or
Product in accordance with all applicable FDA, state, local, and federal laws
and regulations and shall permit the FDA to inspect the manufacturing
facilities used for the manufacture of the Drug Substance, Ligand Excipient or
Product whenever deemed necessary by such regulatory agency. COV shall advise
LMI immediately if an authorized agent of the FDA visits any of COV’s
facilities where the Drug Substance, Ligand Excipient or Product is being
manufactured, or where any component of the Drug Substance, Ligand Excipient or
Product is manufactured, processed or controlled, or of any official contact
concerning the Drug Substance, Ligand Excipient or Product. COV shall furnish
to LMI the report by such agency of such visit to the extent that such report
relates to the Drug Substance, Ligand Excipient or Product, within (i) forty
eight (48) hours of COV’s receipt of such report if such report relates to
urgent matters such as Product recall, facility shutdown or


 


15

















 


similar events (“Urgent Incident”) and (ii) five (5) business days
after COV’s receipt of such report for other matters. Upon reasonable advance
notice to COV, COV shall allow LMI and its consultants reasonable access during
normal business hours throughout the Term to any of COV’s facilities where the
Drug Substance, Ligand Excipient or Product is being manufactured, or where any
component of the Drug Substance, Ligand Excipient or Product is manufactured,
processed or controlled to verify compliance with COV’s obligations under this
Agreement; provided that such access shall be limited to once during any
consecutive twelve (12) months, except in the event of an Urgent Incident, in
which event COV shall allow LMI and its consultants reasonable access during
normal business hours as necessary to allow LMI to evaluate COV’s planned
response to the Urgent Incident.


 


5.6          Acceptance.


 


(a)           LMI shall have **** (****) days from the date of
receipt of both the shipment of Drug Substance, Ligand Excipient or Product and
the corresponding certificate of manufacturing compliance to confirm
conformance with the Specifications and to claim any shortage in quantity of
any shipment of the Drug Substance, Ligand Excipient or Product. Any notice of
rejection or shortage of any shipment of Drug Substance, Ligand Excipient or
Product must be given in writing, must contain a report of the reason for such
rejection or shortage and be received by COV within said **** (****) day period
or such shipment will be deemed to have been accepted; provided, however that
this limitation shall not apply to hidden defects, it being understood that in
that case LMI shall have **** (****) days from the date it becomes aware or reasonably
should have become aware of any hidden defect to reject any Drug Substance,
Ligand Excipient or Product in accordance with applicable terms and conditions
hereof. COV shall assist in necessary analytical Technology transfers to
accomplish such testing by LMI.


 


(b)           In the event of a rejection or shortage as set forth
in Section 5.6(a) above, upon LMI’s request, COV shall replace such
Drug Substance, Ligand Excipient or Product as soon as commercially
practicable, but in no event later than the following Calendar Quarter,
provided that if COV is unable to replace the rejected Drug Substance, Ligand
Excipient or Product within such time period, then LMI shall have the right to
recover such damages from COV as may be provided by law (subject to the
provisions of Section 9.6). COV shall make arrangements with LMI for the
return or disposal of any rejected Product, Drug Substance or Ligand Excipient,
such return shipping or disposal charges to be paid by COV.


 


5.7          Quality
Agreements. The Parties agree that they will enter into one or
more separate Quality Agreements that will cover arrangements for quality
control, testing documentation, quality assurance and other related matters no
later than thirty (30) days after the Effective Date. The Parties acknowledge
that stability testing for Product manufactured during the Term will continue
after termination or expiration of the Agreement for the Product’s remaining
shelf life, unless LMI decides in its sole discretion to undertake such
stability testing or to assign such responsibilities to a third party. LMI will
reimburse COV for such post-termination or post-expiration stability testing in
an amount equal to COV’s actual reasonable testing costs (including employee
time) plus **** percent (****%).


 


16

















 


6.             INTELLECTUAL
PROPERTY; NONDISCLOSURE; CONFIDENTIALITY


 


6.1          Intellectual Property.


 


(a)           As between the Parties,
subject to the licenses granted under Section 6.1(b) below, each
Party retains all right, title and interest in and to the Intellectual Property
and Technology that each Party currently owns and/or uses to the extent related
to the purposes of this Agreement (“Pre-Existing Intellectual Property and
Technology”). Under no circumstances will the licenses granted in Section 6.1(b) below
be construed as a sale of any of the Pre-Existing Intellectual Property and
Technology by either Party. As between the Parties, each Party shall, subject
to the licenses granted in Section 6.1(b) below, own all right, title
and interest in and to any modifications, derivative works, enhancements or
improvements of or to any of the Pre-Existing Intellectual Property and
Technology related to this Agreement (“Improvements”) that such Party creates,
develops, discovers, conceives and/or reduces to practice during the Term. The
Parties shall jointly own all inventions and developments, whether
modifications, derivative works, enhancements or improvements to any
Intellectual Property and/or Technology related to this Agreement, which are
jointly created or developed during the Term.


 


(b)           COV grants to LMT as of the
date of receipt by COV of the Technology Transfer Notice, a non-exclusive,
perpetual, irrevocable and royalty-free license, with right to sublicense, in
and to all COV-owned (i) Pre-Existing Intellectual Property and Technology
and (ii) Improvements for use solely in connection with the Product. This
license shall survive any expiration or termination of the Agreement and shall
be included within the scope of the Technology transfer set forth in Section 2.7.


 


6.2          Nondisclosure Obligations.


 


(a)           Except as otherwise
specifically contemplated by Section 2.7 or as provided in this Article 6,
during the Term of this Agreement and for a period of five (5) years
thereafter, both Parties shall maintain in confidence (i.e., not disclose to any third party)
and use only for purposes specifically authorized under this Agreement
confidential information and data received from the other Party, whether such
information is contained in a written or electronic document, whether it is
oral or whether it is disclosed by means of inspection.


 


(b)           For purposes of this Article 6,
information and data described in clause (a) shall be referred to as
“Information.” To the extent it is reasonably necessary or appropriate to
fulfill its obligations or exercise its rights under this Agreement, a Party
may disclose Information it is otherwise obligated under this Section not
to disclose, to its Affiliates, employees, officers, directors, lenders,
sublicensees, consultants, outside contractors and clinical investigators on a
need-to-know basis and on condition that such entities or persons agree in
writing to keep the Information confidential for the same time periods and to
the same extent as such Party is required to keep the Information confidential;
notwithstanding the foregoing the Party so disclosing Information will be
liable to the other Party hereunder for any misuse or improper disclosure of
any such Information by any such firms or individuals. A Party or its
sublicensees may disclose such Information to government or other regulatory
authorities to the extent that such disclosure is reasonably necessary to obtain
patents or authorizations to conduct clinical


 


17

















 


trials of, and to commercially market, the Product.
The obligation not to disclose Information shall not apply to any part of such
Information that (i) is or becomes part of the public domain other than by
unauthorized acts of the Party obligated not to disclose such Information or
its Affiliates or sublicensees, (ii) can be shown by written documents to
have been disclosed to the receiving Party or its Affiliates or sublicensees by
a third party, provided such Information was not obtained by such third party
directly or indirectly from the other Party under this Agreement pursuant to a
confidentiality agreement, (iii) prior to disclosure under this Agreement
can be shown by written documents to have been already in the possession of the
receiving Party or its Affiliates or sublicensees, provided such Information
was not obtained directly or indirectly from the other Party under this
Agreement pursuant to a confidentiality agreement, (iv) can be shown by
written documents to have been independently developed by the receiving Party
or its Affiliates without breach of any of the provisions of this Agreement, or
(v) is disclosed by the receiving Party pursuant to oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand of a court or governmental agency, provided that the
receiving Party notifies the other Party immediately upon receipt of any such
official requests (and provided that the disclosing Party furnishes only that
portion of the Information which is legally required). The Party asserting the
applicability of one of the exclusions set forth in the immediately preceding
sentence shall have the burden of proving the applicability of any such
exclusion in any particular circumstance.


 


6.3          Terms of this Agreement.


 


(a)           LMI and COV each agree not
to disclose, whether by press release or in any other manner, the existence of
this Agreement or any terms or conditions of this Agreement, to any third party
without the prior written consent of the other Party or except as required by
applicable law. Notwithstanding the foregoing, however, each Party may disclose
the terms and conditions of this Agreement to a lender or third party to which
it is considering transferring all or substantially all of its interest in the
assets to which this Agreement relates; provided, however, that such lender or
third party executes a confidentiality agreement by which such lender or third
party is bound to hold the disclosed information in confidence.


 


(b)           The Parties shall agree in
good faith upon the substance of Information that can be used as a routine
reference in the usual course of business to describe the terms of this
transaction and each of them may disclose such Information, as modified by
mutual agreement from time to time, without the other Party’s consent.


 


6.4          Injunctive Relief. The Parties
hereto understand and agree that remedies at law may be inadequate to protect
against any breach of any of the provisions of this Article 6 by a Party
or its employees, agents, officers or directors or any other person acting in
concert with it or on its behalf. Accordingly, each Party shall be entitled to
seek injunctive relief or any other equitable relief appropriate under the
circumstances by a court of competent jurisdiction against or with respect to
any action that constitutes any such breach of this Article 6.


 


18

















 


7.             INDEMNIFICATION;
INSURANCE.


 


7.1          By COV. COV  will indemnify
and hold LMI and its Affiliates, their directors, officers, agents and
employees harmless against any and all liability, damages, losses, costs or
expenses, including without limitation, reasonable fees and disbursement of
attorneys (collectively, “Liability”) resulting from any third party claims
made or suits brought against them to the extent such Liability arises from (i) COV’s
negligence or willful misconduct in the manufacture, storage, packaging,
labeling, handling or shipping of the Drug Substance, Ligand Excipient or
Product or (ii) COV’s  breach of any warranty set forth
in Section 5.1.


 


7.2          By LMI. LMI will
indemnify and hold COV and its Affiliates, their directors, officers, agents
and employees harmless against any and all Liability resulting from (i) any
packaging or labeling of any Product to the extent that such packaging or
labeling has been supplied by or at the direction of LMI and applied in
accordance with instructions from LMI, (ii) any third party claims made or
suits brought against COV to the extent such Liability arises from LMI’s
negligence or willful misconduct in the storage, packaging, labeling, handling,
shipping, use, marketing, distribution or sale of the Drug Substance, Ligand
Excipient or Product, (iii) any third party claims made or suits brought
against COV for bodily injury, death or property damage arising out of or in
connection with the use of any Product supplied under this Agreement except to
the extent such damage arises from COV’s negligence or willful misconduct in
the manufacture, storage, handling or shipping of the Product or COV’s breach
of any express warranty set forth in Section 5.1, or (iv) a breach of
a representation or warranty made by LMI to its customers or users with respect
to the Drug Substance, Ligand Excipient or Product other than the
representations or warranties contained in Section 5.2 above.


 


7.3          Conditions of Indemnification. A Party or any
of its Affiliates or their respective directors, officers, employees or agents
(the “Indemnitee”) that intends to claim indemnification under this Article 7
shall promptly notify the other Party (the “Indemnitor”) of any Liability in
respect of which the Indemnitee intends to claim such indemnification
reasonably promptly after the Indemnitee is aware thereof, and the Indemnitor
shall assume the defense of any related third party action, suit or proceeding
with counsel mutually satisfactory to the Parties; provided, however, that an
Indemnitee shall have the right to retain its own counsel and participate in
the defense thereof at its own cost and expense. The indemnity agreement in
this Article 7 shall not apply to amounts paid in settlement of any claim,
loss, damage or expense if such settlement is effected without the consent of
the Indemnitor, which consent shall not be withheld unreasonably. The failure
of an Indemnitee to deliver notice to the Indemnitor within a reasonable time
after becoming aware of any such matter, if prejudicial to the Indemnitor’s
ability to defend such action, shall relieve the Indemnitor of any liability to
the Indemnitee under this Article 7. The Indemnitee under this Article 7
and its directors, officers, employees and agents shall cooperate fully with
the Indemnitor and its legal representatives in the investigation and defense
of any matter covered by this indemnification.


 


7.4          Insurance. LMI and COV
will each, at its own cost and expense, obtain and maintain in full force and
effect, during the term of this Agreement and for a period of one year
following the expiration or other termination of this Agreement, commercial
general liability insurance either through self-insurance or with an insurance
carrier generally acceptable to the other Party, with limits of liability,
including excess coverage, of not less than $20,000,000  combined single
limit bodily injury and property damage covering its duties and obligations
under the Agreement.


 


19

















 


8.             ALTERNATIVE
DISPUTE RESOLUTION.


 


(a)           The Parties will attempt in
good faith to resolve any controversy, claim or dispute (“Dispute”) arising out
of or relating to this Agreement promptly by negotiations. Any such Dispute
which is not settled by the Parties within thirty (30) days after notice of such
Dispute is given by one Party to the other in writing shall be referred to a
senior executive of LMI and a senior executive of COV who are authorized to
settle such Disputes on behalf of their respective companies (“Senior
Executives”). If the Dispute has not been resolved within thirty (30) days
after the end of the thirty (30) day negotiation period referred to above
(which period may be extended by mutual agreement), subject to any rights to
injunctive relief and unless otherwise specifically provided for herein, any
Dispute may be settled by binding arbitration as described in subsection (b) below,
if the Parties so choose. However, unless the Parties agree to submit any such
Dispute to binding arbitration, they shall have the right to seek any relief available
at law or equity from court of competent jurisdiction for resolution of any
such Dispute.


 


(b)           Any Dispute which is not
resolved by the Parties within the time period described in subsection (a) and
which the Parties agree to submit to arbitration shall be settled by final and
binding arbitration to be conducted by a three person arbitration panel in
Chicago, Illinois, pursuant to the then-existing Commercial Rules of
the American Arbitration Association. The decision or award of the arbitration
panel shall be final, and judgment upon such decision or award may be entered
in any competent court or application may be made to any competent court for
judicial acceptance of such decision or award and an order of enforcement. The
arbitration panel shall allocate the costs of the arbitration to one or both of
the Parties as it sees fit.


 


(c)           Nothing contained in this
Section or any other provision of this Agreement shall be construed to
limit or preclude a Party from bringing an action in any court of competent
jurisdiction for injunctive or other provisional relief to compel the other
Party to comply with its obligations hereunder before or during the pendency of
mediation or arbitration proceedings.


 


9.             MISCELLANEOUS.


 


9.1          Relationship of the Parties. In making and
performing this Agreement, the Parties are acting, and intend to be treated, as
independent entities and nothing contained in this Agreement shall be construed
or implied to create an agency, partnership, joint venture, or employer and
employee relationship between LMI and COV. Each Party shall retain the
exclusive right of control with respect to its employees and agents, and shall
be responsible for all taxes, withholdings, and other statutory or contractual
obligations of any sort in respect of its employees and agents providing
Products and services hereunder including, but not limited to, workers’
compensation insurance. Except as otherwise provided herein, neither Party may
make any representation, warranty or commitment, whether express or implied, on
behalf of or incur


 


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any charges or expenses for or in the name of the other Party. No Party
shall be liable for the act of any other Party unless such act is expressly
authorized in writing by both Parties hereto.


 


9.2          Expenses.  Except as
specifically provided herein, each Party shall each pay its own expenses
(including the fees and expenses of their respective agents, representatives,
counsel and accountants) incidental to the preparation, negotiation, and
consummation of this Agreement and the transactions contemplated hereby.


 


9.3          Survival. The following
provisions shall survive the termination or expiration of this Agreement for
any reason in accordance with their respective terms:


 


Article 1 (Definitions)


Section 3.4
(Effect of Expiration or Termination; Accrued Rights; Surviving Obligations) 


Article 4
(Regulatory Issues)


Article 5
(Warranties and Quality Assurance)


Article 6
(Intellectual Property; Nondisclosure; Confidentiality)


Article 7
(Indemnification)


Article 8
(Alternative Dispute Resolution)


Article 9
(Miscellaneous)


 


9.4          Notices.
All notices, demands and other communications to be given or delivered under
or by reason of the provisions of this Agreement shall be in writing and shall
be deemed to have been given (a) when personally delivered or sent by
confirmed telecopy (with hard copy to follow); (b) one (1) business
day after sent by reputable overnight express courier (charges prepaid); or (c) five
(5) business days following mailing by certified or registered mail,
postage prepaid and return receipt requested. Unless another address is
specified in writing, notices, demands and communications to LMI and COV shall
be sent to the addresses indicated below:


 


Notices to LMI:


 


Lantheus Medical Imaging, Inc.


331 Treble Cove Road


North Billerica, Massachusetts 01862 


Attn: Michael Duffy, Esq.


Facsimile: (978) 671-8724


 


Notices to COV:


 


Mallinckrodt Inc.


675 McDonnell Blvd.


Hazelwood, MO 63042


Attn: President, Mallinckrodt Imaging Solutions 


Facsimile: 314-654-3440


 


with a copy to:


 


Mallinckrodt Inc.


 


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675 McDonnell Blvd.


Hazelwood, MO 63042


Attn: Mallinckrodt Imaging Solutions, Vice President/Chief
Corporate Counsel


Facsimile: 314-654-


 


9.5          Force
Majeure. If the performance of any obligation under this
Agreement by either Party is prevented, restricted, interfered with or delayed
by reason of natural disaster, casualty, acts of God, riots, acts of terrorism
or such other event of similar nature (“Force Majeure Event”), the Party so
affected shall, upon giving prompt written notice to the other Party (including
a full description of particulars), be excused from such performance to the
extent of such prevention, restriction, interference or delay; provided that
the affected Party shall use its reasonable commercial efforts to avoid or
remove such causes of non-performance and shall continue performance whenever
such causes are removed.


 


9.6
         LIMITATIONS
ON LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY OR TO ANY THIRD PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL,
PUNITIVE, EXEMPLARY, OR CONSEQUENTIAL DAMAGES ARISING FROM THIS AGREEMENT OR
FOR ANY AMOUNTS REPRESENTING LOSS OF PROFITS OR LOSS OF BUSINESS, WHETHER THE
BASIS OF THE LIABILITY IS BREACH OF CONTRACT, TORT, STATUTES, OR ANY OTHER
LEGAL THEORY, EXCEPT TO THE EXTENT SUCH LIABILITY ARISES FROM COV’S OR LMI’S
(AS THE CASE MAY BE) WILLFUL MISCONDUCT, AND WHETHER SUCH FIRST PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR NOT.


 


9.7          Successors
and Assigns; Assignment. This Agreement shall be binding upon and inure
to the benefit of the Parties and their respective successors and permitted
assigns. This Agreement or any part thereof, may not be assigned, in whole or
in part, without the prior written consent of the other Party, which consent
may be withheld in the sole discretion of the other Party; provided,
however, that either Party may assign this Agreement without the consent of
the other Party, (i) in whole or in part to any Affiliate of such Party,
it being agreed that no such assignment to a Party’s Affiliate shall release
the assigning Party from its obligations hereunder, or (ii) in connection
with the direct or indirect (x) transfer and sale of all or substantially
all of the assets or business of such Party or any of its Affiliates or (y) the
transfer and sale of all or substantially all of the assets or business of the
specific business line, division or unit of such Party or any of its Affiliates
to which this Agreement relates.


 


9.8          Entire
Agreement; Modification. This Agreement supersedes all prior
agreements and understandings between the Parties or any of their respective
Affiliates (written or oral) relating to the subject matter hereof, including
any term sheets, and this Agreement is the entire and complete statement of the
terms of the agreement between the Parties with respect to the subject matter
hereof. This Agreement may be amended, modified, or supplemented only in a
writing signed by LMI and COV.


 


9.9          EPIX and
Bayer/Schering. For the avoidance of doubt, the Parties hereby agree
that LMI shall have no liability arising from or related to COV’s past and
current relationship and contractual arrangements with EPIX and/or
Bayer/Schering.


 


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9.10        Waivers. The failure of a
Party at any time or times to require performance of any provision hereof shall
in no manner affect its right at a later time to enforce the same. No waiver by
a Party of any condition or of any breach of any term, covenant, representation
or warranty contained in this Agreement shall be effective unless in writing,
and no waiver in any one or more instances shall be deemed to be a further or
continuing waiver of any such condition or breach in other instances or a
waiver of any other condition or breach of any other term, covenant,
representation or warranty.


 


9.10        Section and
Other Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.


 


9.11        Governing
Law. This Agreement shall be exclusively interpreted in accordance with and
governed by the laws of New York, without regard to the conflicts of law rules thereof.


 


9.12        Severability.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition and unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.


 


9.13        No Third
Party Beneficiaries. Neither this Agreement nor any provision
hereof is intended to confer upon any person (other than the Parties hereto)
any rights or remedies hereunder.


 


9.14        Construction.
The Parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the Parties and no presumption or burden of proof shall arise favoring or
disfavoring any Party by virtue of the authorship of any of the provisions of
this Agreement.


 


9.15        Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, and such counterparts shall together
constitute one and the same instrument. A facsimile transmission of an executed
counterpart signature page shall be deemed an original.


 


IN WITNESS WHEREOF, the Parties have caused this
Agreement to be executed by their respective duly authorized representatives as
of the date first above written.


 


	
  LANTHEUS MEDICAL IMAGING, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


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IN WITNESS WHEREOF the Parties have caused this
Agreement to be executed by their respective duly authorized representatives as
of the date first above written.


 


 


	
   

  	
  LANTHEUS MEDICAL IMAGING, INC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael P. Duffy

  
	
   

  	
   

  	
  Name: Michael P. Duffy

  
	
   

  	
   

  	
  Title: Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MALLINCKRODI INC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Timothy R. Wright

  
	
   

  	
   

  	
  Title: President, Imaging
  Solutions and Pharmaceutical Products

  



 


 


Signature Page to
Manufacturing and Supply Agreement


 

















 


	
   

  	
  MALLINCKRODT INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew J. Kraus

  	
   

  
	
  

  	
   

  	
  Name: Matthew J. Kraus

  	
   

  
	
   

  	
  Title: Vice President, Business Development

  	
   

  
	
   

  	
   

  	
   

  



 


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