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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended
December 31, 2010
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 93-0979187 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification No.) |
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11500 South Eastern Avenue, Suite 240
Henderson, Nevada 89052 (Address of principal executive offices) |
Title of Each Class
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Name of Each Exchange on Which
Registered
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Common Stock, $0.001 par value
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The NASDAQ Stock Market, LLC | |
Common Stock Purchase Warrants
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Rights to Purchase Series B Junior Participating Preferred
Stock
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Large accelerated
filer
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Accelerated filer þ |
Non-accelerated
filer
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(Do not check if a smaller reporting company) |
Smaller reporting company o |
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Item 1.
Business
Maximizing the growth potential of our marketed drugs,
Zevalin and Fusilev.
Our near-term outlook
largely depends on sales and marketing successes for our two
marketed drugs. For Zevalin, we stabilized sales in 2009,
increased sales in 2010 and believe we can continue to grow
sales in 2011 and beyond. For Fusilev, which we launched in
August 2008, we were able to benefit from broad utilization in
community clinics and hospitals and recognized a dramatic
increase in sales during 2010 due to a shortage of generic
leucovorin. While we cannot predict how long the shortage may
continue, our focus now is to obtain approval for Fusilev in
advanced metastatic colorectal cancer. As part of its review of
our supplemental new drug application (sNDA) for metastatic
colorectal cancer, the FDA requested additional data to which we
submitted a response on October 29, 2010. The FDA formally
accepted the submission and established a decision date (PDUFA)
of April 29, 2011.
Optimizing our development portfolio and maximizing the asset
values of its components.
While over the recent
few years, we have evolved from a development-stage to a
commercial-stage pharmaceutical company, we have maintained a
highly focused development portfolio. Our strategy with regard
to our development portfolio is to focus on late-stage drugs and
to develop them rapidly to the point of regulatory approval. We
plan to develop some of these drugs ourselves or with our
subsidiaries and affiliates, or secure collaborations such that
we are able to suitably monetize these assets.
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Expanding our pipeline of late stage and commercial drugs
through licensing and business development.
It is
our goal to identify new strategic opportunities that will
create strong synergies with our currently marketed drugs and
identify and pursue partnerships for out-licensing certain of
our drugs in development. To this end, we will continue to
explore strategic collaborations as these relate to drugs that
are either in advanced clinical trials or are currently on the
market. We believe that such opportunistic collaborations will
provide synergies with respect to how we deploy our internal
resources. In this regard, we intend to identify and secure
drugs that have significant growth potential either through
enhanced marketing and sales efforts or through pursuit of
additional clinical development. We believe our in-licensing of
belinostat, a novel histone deacetylase (HDAC) inhibitor, is
demonstrative of such licensing and business development efforts
outlined above.
Managing our financial resources
effectively.
We remain committed to fiscal
discipline, a policy which has allowed us to become well
capitalized among our peers, despite a very challenging capital
markets environment during 2009 and continuing through 2010.
This policy includes the pursuit of non-dilutive funding
options, prudent expense management, and the achievement of
critical synergies within our operations in order to maintain a
reasonable burn rate. Even with the continued
build-up
in
operational infrastructure to facilitate the marketing of our
two commercial drugs, we intend to be fiscally prudent in any
expansion we undertake. In terms of revenue generation, we plan
to become more reliant on sales from currently marketed drugs
and intend to pursue out-licensing of select pipeline drugs in
select territories, as discussed above. When appropriate, we may
pursue other sources of financing, including non-dilutive
financing alternatives. While we are currently focused on
advancing our key drug development programs, we anticipate that
we will make regular determinations as to which other programs,
if any, to pursue and how much funding to direct to each program
on an ongoing basis, based on clinical success and commercial
potential, including termination of our existing development
programs, especially if we do not expect value being driven from
continued development. We ended 2010 with over $100 million
in cash, cash equivalents and investments which was net of the
$30 million license fee paid for belinostat in early 2010
offset by cash received from out-license of apaziquone of
approximately $17.5 million.
Further enhancing the organizational structure to meet our
corporate objectives.
We have highly experienced
staff in pharmaceutical operations, clinical development,
regulatory and commercial functions who previously held
positions at both small to mid-size biotech companies, as well
as large pharmaceutical companies. We have strengthened the
ranks of our management team, and will continue to pursue talent
on an opportunistic basis. Finally, we remain committed to
running a lean and efficient organization, while effectively
leveraging our critical resources.
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*
Pivotal Trial under Special
Protocol Assessment (SPA)
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are already approved for sale or have demonstrated initial
safety and efficacy in clinical trials
and/or
we
believe have a higher probability of regulatory approval than
that of a typical compound at a similar stage of development;
target cancer indications with significant unmet medical need,
where current treatments either do not exist or are not deemed
to be effective; and
we believe we can acquire at a fair value based on our judgment
of clinical success and commercial potential.
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On December 15, 2008, we closed a transaction to enter into
a
50
/
50
owned joint venture called RIT, with CTI. CTI previously
acquired the U.S. rights to develop, market and sell
Zevalin from Biogen Idec, Inc. or Biogen on December 21,
2007.
Upon entering into the joint venture arrangement, CTI
contributed the Zevalin product assets to RIT in exchange for a
50% membership interest in RIT and the cash payments to CTI
noted below. CTI received an initial cash payment of
$7.5 million at the closing of the joint venture
transaction on December 15, 2008, and received an
additional $7.5 million cash payment in early January 2009.
CTI also had the option to sell its remaining 50% membership
interest in RIT to us, subject to adjustment for any amounts
owed between RIT and CTI at the time of sale. CTI exercised this
Put option in February 2009. On March 15, 2009,
we entered into an agreement with CTI to complete such sale for
an aggregate amount of $16.5 million subject to certain
adjustments for, among other things, payables determined to be
owed between CTI and RIT. CTI disputed the adjustments, but in a
May 2009 arbitration proceeding, we were awarded approximately
$4.3 million. As a result of the sale, we own 100% of RIT
and are its sole member and therefore, we have, through
licenses, all of the U.S. rights to Zevalin.
In connection with obtaining the required consent of Biogen to
the foregoing joint venture arrangement, we entered into certain
agreements with Biogen. Such agreements included:
an amendment to the original asset purchase agreement between
CTI and Biogen (CTI/Biogen Agreement), modifying future
milestone payments, to provide that (i) concurrently with
the execution of the amendment CTI was required to pay Biogen
$0.2 million (which was reimbursed to CTI by RIT from the
initial capital contributions made by CTI and us),
(ii) upon the December 2008 closing of the joint venture
transaction, CTI was required to pay Biogen an additional
$2.0 million (which was paid by RIT as successor to CTI
under the amendment), (iii) upon the achievement of the
specified FDA approval milestone, RIT (as successor to CTI) was
required to pay Biogen an additional amount of $5.5 million
if the milestone event occurred in 2009 (provided that RIT may
elect to defer any such payment until January 1, 2010, but
upon such election the required payment will increase to
$6.0 million), $7.0 million if the milestone event
occurs in 2010, $9.0 million if the milestone event occurs
in 2011, or $10.0 million if the milestone event occurs in
2012 or later. As disclosed above, we received FDA approval for
the treatment of patients with previously untreated follicular
NHL who achieve a partial or complete response to first-line
chemotherapy and in accordance with the amendment, we paid
Biogen $5.5 million. No other material terms of the
CTI/Biogen Agreement were modified. CTIs rights and
obligations, including its payment obligations to Biogen,
including royalties on net sales of Zevalin and an additional
regulatory milestone payment, under both the CTI/Biogen
Agreement and the amendment were assigned to and assumed by RIT
in connection with the closing of the joint venture transaction.
an amendment to the original supply agreement between Biogen and
CTI (CTI/Biogen Supply Agreement), modifying certain of the
pricing and manufacturing technology transfer terms contained in
the CTI/Biogen Supply Agreement and also providing that the term
of the agreement may be shortened in some instances in the event
of a mid-term manufacturing technology transfer. CTIs
rights and obligations, including its payment obligations to
Biogen, under both the CTI/Biogen Supply Agreement and the
amendment were assigned to and assumed by RIT in connection with
the closing of the joint venture transaction.
a security agreement, by and between RIT and Biogen whereby RIT
granted to Biogen a first priority security interest in all of
RITs assets, including the assets contributed to RIT by
CTI in connection with the closing of the joint venture
transaction, to secure certain payment, indemnification and
other obligations of RIT to Biogen.
a guarantee, by us for the benefit of Biogen whereby we have,
among other things, guaranteed the payment and performance all
of RITs obligations to Biogen (including its obligations
as assignee of CTI under all contractual arrangements between
CTI and Biogen that were assigned to and assumed by RIT in
connection with the closing of the joint venture transaction).
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pursuant to the transfer of Zevalin assets from CTI to RIT in
December 2008, RIT assumed certain license and sublicense
agreements with various third parties related to Zevalin
intellectual property under which RIT is required to make
certain payment obligations including milestone payments and
royalties.
In April 2006, we acquired all of the oncology drug product
assets of Targent, Inc. Targent is eligible to receive payments,
in the form of our common stock
and/or
cash,
upon achievement of certain regulatory and sales milestones. At
our option, any amounts due in cash under the purchase agreement
may be paid by issuing shares of our common stock having a
value, determined as provided in the purchase agreement, equal
to the cash payment amount.
In May 2006, we amended and restated a license agreement with
Merck & Cie AG, a Swiss corporation, that we assumed
in connection with the acquisition of the assets of Targent.
Pursuant to the license agreement with Merck & Cie, we
obtained the exclusive license to use regulatory filings related
to Fusilev and a non-exclusive license under certain patents and
know-how related to Fusilev to develop, make, have made, use,
sell and have sold Fusilev in the field of oncology in North
America. In addition, we have the right of first opportunity to
negotiate an exclusive license to manufacture, have
manufactured, use and sell Fusilev products outside the field of
oncology in North America. Also, under the terms of the license
agreement, we paid Merck & Cie $100,000 for the
achievement of FDA approval of Fusilev. Eprova is also eligible
to receive a payment upon achievement of another regulatory
milestone, in addition to royalties on net sales. The term of
the license agreement is determined on a
product-by-product
and
country-by-country
basis until
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royalties are no longer owed under the license agreement. The
license agreement expires in its entirety after the date that we
no longer owe any royalties to Merck & Cie. We have
the unilateral right to terminate the license agreement, in its
entirety or on a
product-by-product
or
country-by-country
basis, at any time for any reason and either party may terminate
the license agreement due to material breach of the terms of the
license agreement by or insolvency of the other party.
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In October 2008, we terminated our 2001 license agreement for
apaziquone with INC
Research
®
,
formerly NDDO Research
Foundation
®
(INC) in the Netherlands, as the patents underlying the
agreement were all about to expire. Pursuant to the termination,
INC assigned to us all rights it had in the know-how or
intellectual property licensed under the agreement and all
rights in may have had in any know-how or intellectual property
created during the term of the agreement. In exchange, we paid
INC a nominal amount of cash and issued them a nominal number of
shares of our common stock. In addition, INC is entitled to up
to 25,000 additional shares of our common stock and an
additional payment of $300,000 upon achievement of certain
regulatory milestones.
In October, 2008, we entered into a license, development, supply
and distribution agreement with Allergan pursuant to which we
and Allergan agreed to a collaboration for the development and
commercialization of a formulation of apaziquone suitable for
use in treating cancer or precancerous conditions via
instillation. The agreement with Allergan also provides that
Allergan has the exclusive right to make, develop and
commercialize apaziquone for the treatment of bladder cancer, or
pre-bladder cancer conditions worldwide except for Asia (as is
defined in the agreement). We also entered into a co-promotion
agreement with Allergan providing for the joint
commercialization of apaziquone in the United States, whereby we
and Allergan will share equally all profits and
commercialization expenses. We also have the right, in our sole
discretion, to opt-out of the co-promotion agreement before
January 1, 2012. If we elect to opt-out of the co-promotion
agreement, our share of any future development costs shall be
significantly reduced. Part of the aggregate development costs
and marketing expenses incurred by us since January 1, 2009
shall be reimbursed by Allergan in the form of a one-time
payment. In addition, if we opt-out of the co-promotion
agreement, the co-promotion agreement will terminate and instead
of a sharing of profit and expenses, Allergan will pay us
royalties on a percentage of net sales of the apaziquone in the
United States that are slightly greater than the royalties paid
on net sales outside the United States. In addition, Allergan
will pay us up to $245 million in additional milestones
based upon the achievement of certain sales milestones in the
United States.
In consideration for the rights granted under our license,
development, supply and distribution agreements with Allergan,
Allergan paid us an up-front fee of $41.5 million. In
addition, Allergan will pay us up to $304.0 million based
on the achievement of certain development, regulatory and sales
milestones. For example, for completing enrollment of both
aforementioned Phase III trials by year-end 2009, Allergan
paid us a $1.5 million milestone payment. Also, Allergan
has agreed to pay us tiered royalties starting in the mid-teens
based on a percentage of net sales of the apaziquone outside of
the United States.
We will continue to conduct the current Phase 3 clinical trials
as well as certain future planned clinical trials pursuant to a
joint development plan, of which Allergan will fund 65% of the
development costs. In November 2009, we entered into a
collaboration agreement with the Nippon Kayaku Co., LTD. for the
development and commercialization of apaziquone in Asia, except
North and South Korea (the Nippon
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Kayaku Territory). In exchange, Nippon Kayaku paid
Spectrum an up-front payment of $15 million and agreed to
make additional payments of up to $136.0 million based on
the achievement of certain regulatory and commercialization
milestones contained in the agreement. In addition, Nippon
Kayaku received exclusive rights to apaziquone for the treatment
of NMIBC in Asia (other than North and South Korea), including
Japan and China. Nippon Kayaku will conduct apaziquone clinical
trials in the Nippon Kayaku Territory pursuant to a development
plan. In addition, Nippon Kayaku will be responsible for all
expenses relating to the development and commercialization of
apaziquone in the Nippon Kayaku Territory. In January 2011
Nippon Kayaku initiated a Phase 1 study with the first patient
being dosed in Japan. The Phase 1 study is required by the local
regulatory authorities and is designed to enroll up to
6 patients.
Also in November 2009, we entered into a collaboration agreement
with Handok Pharmaceuticals for the development and
commercialization of apaziquone in North and South Korea. Under
the terms of the Handok collaboration agreement, Handok paid us
an up-front payment of $1.0 million and potential milestone
payments totaling approximately $19 million. The potential
milestone payments will be based on the achievement of certain
regulatory and commercialization milestones. Handok received
rights to apaziquone for the treatment of NMIBC in North and
South Korea. Additionally, Handok will conduct the apaziquone
clinical trials in North and South Korea pursuant to a
development plan and will be responsible for all expenses
relating to the development and commercialization of apaziquone
in North and South Korea.
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In February 2010, we entered into a licensing and collaboration
agreement with TopoTarget, for the development and
commercialization of belinostat, pursuant to which TopoTarget
and we agreed to a collaboration for the development and
commercialization of belinostat. The agreement provides that we
have the exclusive right to make, develop and commercialize
belinostat in North America and India, with an option for China.
The agreement also grants TopoTarget a co-promote option if and
only if we do not maintain a minimum number (subject to
adjustment for certain events outside of our control) of field
personnel (as defined in the agreement) for a certain number of
years post-approval of the PTCL indication.
In consideration for the rights granted to us under the license
and collaboration agreement with TopoTarget, we paid TopoTarget
an up-front fee of $30.0 million. In addition, we will pay
up to $313 million and one million shares of Spectrum
common stock based on the achievement of certain development,
regulatory and sales milestones. as well as certain royalties on
net sales of belinostat.
Under the terms of the agreement, all development, including
studies, will be conducted under a joint development plan and in
accordance with a mutually agreed upon target product profile
provided that we have final decision-making authority for all
developmental activities in North America and India (and China
upon exercise of the option for China) and TopoTarget has final
decision-making authority for all developmental activities in
all other jurisdictions, We will assume all responsibility for
and future costs of the ongoing registrational PTCL trial while
TopoTarget will assume all responsibility for and future costs
of the ongoing Phase 2 CUP trial. We and TopoTarget will conduct
future planned clinical trials pursuant to the joint development
plan, of which we will fund 70% of the development costs
and TopoTarget will fund 30% of the development costs.
We and TopoTarget will each pay 50% of the costs for chemical,
pharmaceutical and other process development related to the
manufacturing of the product that are incurred with a mutually
agreed upon budget in the joint development plan. TopoTarget is
responsible for supplying us with both clinical and commercial
product.
In 2004, we entered into a license agreement with a subsidiary
of Aeterna Zentaris, Inc., Aeterna Zentaris GmbH, whereby we
acquired an exclusive license to develop and commercialize
ozarelix in North America (including Canada and Mexico) and
India. In addition, we have a 50% financial interest in any
income Aeterna Zentaris derives from ozarelix in Japan. We are
contingently obligated to pay amounts based upon achievement of
milestones and a royalty based on any future net sales. In
November 2010, we amended the terms of the agreement to expand
the territory covered by the exclusive license.
The term of the license agreement expires ten years after the
first commercial sale of a product in any country within the
territory or as long as any product is covered by a patent in
any country in the territory, and where there is no generic
competition in such country of the territory, whichever term is
longer, although some obligations survive termination. In
addition, the agreement may be terminated earlier by either
party (in
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some cases either in whole or on a
product-by-product
and/or
country-by-country
and/or
indication-by-indication
basis), based upon material breach or the commencement of
bankruptcy or insolvency proceedings involving the other, or by
us upon sixty days notice to Aeterna Zentaris.
Under the terms of the license agreement with Indena, we are
obligated to make payments based on the achievement of certain
development, regulatory filing and sales milestones. We will
also pay Indena certain royalties on worldwide sales of
ortataxel, if and when the product is approved. On
October 11, 2010, we amended the agreement to extend
payments of certain development and regulatory milestones.
Also, we are obligated to purchase all of our requirements of
ortataxel active pharmaceutical ingredient from Indena.
We entered into a license agreement with Dr. Robert E.
Bases, the inventor of a method of treating cancer of the
central nervous system through the administration of lucanthone
and radiation, whereby we acquired worldwide exclusive rights to
develop and commercialize a product based upon his invention in
May 2005. Under the terms of the license agreement, we made a
small up-front payment and are obligated to make additional
periodic payments, a payment upon achievement of a certain
regulatory milestone and royalties on potential net sales, if
any.
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We acquired an exclusive worldwide license to develop and
commercialize SPI-1620 for the prevention and treatment of
cancer from Chicago Labs, Inc. in February 2005. We paid Chicago
Labs a small up-front fee and are obligated to make future
payments contingent upon the successful achievement of certain
development and regulatory milestones. In addition, we will pay
royalties and sales milestones on net sales, after marketing
approval is obtained.
We entered into a license agreement with Altair Nanomaterials,
Inc. and its parent Altair Nanotechnologies, Inc., whereby we
acquired an exclusive worldwide right to develop and
commercialize RenaZorb for all human therapeutic and diagnostic
uses in January 2005. Under the terms of the license agreement,
we made up-front and milestone payments and are obligated to
make additional payments upon achievement of certain clinical
development and regulatory and sales milestones, in addition to
royalties on potential net sales.
In August 2009, we entered into an acquisition agreement with
Altair, in which we acquired 100% of the rights to Renazorb and
all of Altairs life science technology. Our acquisition of
RenaZorb expands upon our prior license agreement with Altair,
pursuant to which Altair granted us human uses. Our acquisition
of RenaZorb provides us with access to all uses of and
intellectual property for RenaZorb. In consideration for the
acquisition, we paid Altair a total of $750,000 in the form of
restricted shares of our common stock.
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Year Ended December 31,
2010
2009
2008
($ in 000s)
$
6,165
$
10,915
$
5,477
1,916
1,168
2,435
716
311
150
1,281
1,125
2,096
421
563
151
36,045
3,469
1,535
1,304
50,013
15,617
11,613
14,838
16,652
15,070
(7,550
)
(11,211
)
$
57,301
$
21,058
$
26,683
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Item 1A.
Risk
Factors
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conforming standards, controls, procedures and policies,
business cultures and compensation structures;
conforming information technology and accounting systems;
consolidating corporate and administrative infrastructures;
consolidating sales and marketing operations;
retaining existing customers and attracting new customers;
retaining key employees;
identifying and eliminating redundant and underperforming
operations and assets;
minimizing the diversion of managements attention from
ongoing business concerns;
coordinating geographically dispersed organizations;
managing tax costs or inefficiencies associated with integrating
operations; and
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making any necessary modifications to operating control
standards to comply with the Sarbanes-Oxley Act of 2002 and the
rules and regulations promulgated thereunder.
maintaining compliance with foreign legal requirements,
including employment law;
unexpected changes in foreign regulatory requirements, including
quality standards and other certification requirements;
tariffs, customs, duties and other trade barriers;
changing economic conditions in countries where our products are
manufactured;
exchange rate risks;
product liability, intellectual property and other claims;
political instability;
new export license requirements; and
difficulties in coordinating and managing foreign operations.
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unwillingness on the part of a partner to pay us milestone
payments or royalties that we believe are due to us under a
collaboration;
uncertainty regarding ownership of intellectual property rights
arising from our collaborative activities, which could prevent
us from entering into additional collaborations;
unwillingness by the partner to cooperate in the development or
manufacture of the product, including providing us with product
data or materials;
unwillingness on the part of a partner to keep us informed
regarding the progress of its development and commercialization
activities or to permit public disclosure of the results of
those activities;
initiation of litigation or alternative dispute resolution
options by either party to resolve the dispute;
attempts by either party to terminate the collaboration;
our ability to maintain or defend our intellectual property
rights may be compromised by our partners acts or
omissions;
a partner may utilize our intellectual property rights in such a
way as to invite litigation that could jeopardize or invalidate
our intellectual property rights or expose us to potential
liability;
a partner may change the focus of its development and
commercialization efforts due to internal reorganizations,
mergers, consolidations and otherwise;
unwillingness of a partner to fully fund or commit sufficient
resources to the testing, marketing, distribution or development
of our products;
unwillingness or ability of a partner to fulfill their
obligations to us due to the pursuit of alternative products,
conflicts of interest that arise or changes in business strategy
or other business issues; and/or
we may not be able to guarantee supplies of development or
marketed products.
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a covered benefit under its health plan;
safe, effective and medically necessary;
appropriate for the specific patient;
cost-effective; and
neither experimental nor investigational.
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the effectiveness of the drug product;
the prevalence and severity of any side effects;
potential advantages or disadvantages over alternative
treatments;
relative convenience and ease of administration;
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the strength of marketing and distribution support;
the price of the drug product, both in absolute terms and
relative to alternative treatments; and
sufficient third-party coverage or reimbursement.
warning letters;
fines;
changes in advertising;
revocation or suspension of regulatory approvals of products;
product recalls or seizures;
delays, interruption, or suspension of product distribution,
marketing and sales;
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civil or criminal sanctions;
suspension or termination of ongoing clinical trials;
imposition of restrictions on our operations;
close the facilities of our contract manufacturers; and
refusals to approve new products.
require sponsors of marketed products to conduct
post-approval clinical studies to assess a known serious risk,
signals of serious risk or to identify an unexpected serious
risk;
mandate labeling changes to products, at any point in a
products lifecycle, based on new safety
information; and
require sponsors to implement a Risk Evaluation and Mitigation
Strategy, or REMS, for a product which could include a
medication guide, patient package insert, a communication plan
to healthcare providers, or other elements as the FDA deems are
necessary to assure safe use of the drug (either prior to
approval or post-approval as necessary).
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in certain jurisdictions, we or our licensors might not have
been the first to make the inventions covered by each of our or
our licensors pending patent applications and issued
patents, and we may have to participate in expensive and
protracted interference proceedings to determine priority of
invention;
we or our licensors might not have been the first to file patent
applications for these inventions;
others may independently develop similar or alternative product
candidates or duplicate any of our or our licensors
product candidates;
our or our licensors pending patent applications may not
result in issued patents;
our or our licensors issued patents may not provide a
basis for commercially viable products or may not provide us
with any competitive advantages or may be challenged by third
parties;
others may design around our or our licensors patent
claims to produce competitive products that fall outside the
scope of our or our licensors patents;
we may not develop or in-license additional patentable
proprietary technologies related to our product
candidates; or
the patents of others may prevent us from marketing one or more
of our product candidates for one or more indications that may
be valuable to our business strategy.
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pay damages, including up to treble damages and the other
partys attorneys fees, which may be substantial;
cease the development, manufacture, use and sale of our products
that infringe the patent rights of others through a
court-imposed sanction such as an injunction;
expend significant resources to redesign our products so they do
not infringe others patent rights, which may not be
possible;
discontinue manufacturing or other processes incorporating
infringing technology; or
obtain licenses to the infringed intellectual property, which
may not be available to us on acceptable terms, or at all.
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recognition on up-front licensing or other fees or revenues;
payments of non-refundable up-front or license fees, or payment
for cost-sharing expenses, to third parties;
adverse results or delays in our clinical trials;
fluctuations in our results of operations;
timing and announcements of our technological innovations or new
products or those of our competitors;
developments concerning any strategic alliances or acquisitions
we may enter into;
announcements of FDA non-approval of our drug products, or
delays in the FDA or other foreign regulatory review process or
actions;
changes in recommendations or guidelines of government agencies
or other third parties regarding the use of our drug products;
adverse actions taken by regulatory agencies with respect to our
drug products, clinical trials, manufacturing processes or sales
and marketing activities;
concerns about our products being reimbursed;
any lawsuit involving us or our drug products;
developments with respect to our patents and proprietary rights;
public concern as to the safety of products developed by us or
others;
regulatory developments in the United States and in foreign
countries;
changes in stock market analyst recommendations regarding our
common stock or lack of analyst coverage;
the pharmaceutical industry generally and general market
conditions;
failure of our results of operations to meet the expectations of
stock market analysts and investors;
sales of our common stock by our executive officers, directors
and five percent stockholders or sales of substantial amounts of
our common stock;
changes in accounting principles; and
loss of any of our key scientific or management personnel.
49
Table of Contents
the ability of our board of directors to amend our bylaws
without stockholder approval;
the inability of stockholders to call special meetings;
the ability of members of the board of directors to fill
vacancies on the board of directors;
the inability of stockholders to act by written consent, unless
such consent is unanimous; and
the establishment of advance notice requirements for nomination
for election to our board of directors or for proposing matters
that can be acted on by stockholders at stockholder meetings.
50
Table of Contents
interpretations of existing tax laws,
the accounting for stock options and other share-based
compensation,
changes in tax laws and rates,
future levels of research and development spending,
changes in accounting standards,
changes in the mix of earnings in the various tax jurisdictions
in which we operate,
the outcome of examinations by the Internal Revenue Service and
other jurisdictions,
the accuracy of our estimates for unrecognized tax benefits,
realization of deferred tax assets, and
changes in overall levels of pre-tax earnings.
Item 1B.
Unresolved
Staff Comments
Item 2.
Properties
51
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Item 3.
Legal
Proceedings
Item 4.
[Reserved]
52
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59
73
74
75
76
80
83
88
Item 5.
Market
for Registrants Common Equity Related Stockholder Matters
and Issuer Purchases of Equity Securities
High
Low
$
5.48
$
4.28
$
5.24
$
3.79
$
4.66
$
3.67
$
7.08
$
4.05
$
2.10
$
1.39
$
8.15
$
1.75
$
10.00
$
4.76
$
6.74
$
3.97
53
Table of Contents
Among
Spectrum Pharmaceuticals, Inc., the Russell 2000 Index,
and a Peer Group
*
$100 invested on 12/31/05 in stock or index, including
reinvestment of dividends. Fiscal year ending December 31.
Affymax Inc
Immunomedics Inc
Allos Therapeutics Inc
Intermune Inc
Amicus Therapeutics Inc
Isis Pharmaceuticals Inc
Arena Pharmaceuticals Inc
Mannkind Corp
Biocryst Pharmaceuticals Inc
Medivation Inc
Biomarin Pharmaceutical Inc
Onyx Pharmaceuticals Inc
Cell Therapeutics Inc
Sangamo Biosciences Inc
Cytokinetics Inc
Seattle Genetics Inc
Dendreon Corp
Supergen Inc
Enzon Pharmaceuticals Inc
Theravance Inc
Exelixis Inc
Vertex Pharmaceuticals Inc
54
Table of Contents
12/31/05
12/31/06
12/31/07
12/31/08
12/31/09
12/31/10
100.00
130.73
64.30
35.22
104.96
162.41
100.00
118.37
116.51
77.15
98.11
124.46
100.00
123.99
126.64
92.09
128.95
134.43
(1)
The information in this section is not soliciting
material, is not deemed filed with the SEC and
is not to be incorporated by reference in any filing of the
Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before
or after the date hereof and irrespective of any general
incorporation language in any such filing.
Item 6.
Selected
Financial Data
Years ended December 31,
2010
2009
2008
2007
2006
(In thousands, except per share data)
$
74,113
$
38,025
$
28,725
$
7,672
$
5,673
17,439
8,148
1,193
97
48,550
33,607
15,156
11,577
7,736
57,301
21,058
26,683
33,285
23,728
3,720
3,720
158
4,700
(52,897
)
(28,508
)
(19,165
)
(37,190
)
(25,888
)
2,731
8,075
1,271
12,055
(2,485
)
1,279
662
1,165
3,139
2,606
(48,887
)
(19,771
)
(16,729
)
(21,996
)
(25,767
)
43
(421
)
(5
)
(5
)
(5
)
1,146
2,538
20
3
$
(48,844
)
$
(19,046
)
$
(14,196
)
$
(21,981
)
$
(25,769
)
$
(0.99
)
$
(0.48
)
$
(0.45
)
$
(0.76
)
$
(1.06
)
55
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As of December 31,
2009
2008
2007
2006
(In thousands)
$
104,243
$
113,341
$
75,938
$
55,659
$
50,967
58,543
86,758
54,677
48,813
46,054
163,631
173,133
129,509
57,540
53,117
3,904
6,635
765
2,035
14,090
25,833
25,310
42,822
992
1,035
74,476
108,324
53,116
46,714
31,759
Item 7.
Managements
Discussion and Analysis of Financial Condition and Results of
Operations
Maximizing the growth potential of our marketed drugs,
Zevalin and Fusilev.
Our near-term outlook
largely depends on sales and marketing successes for our two
marketed drugs. For Zevalin, we stabilized sales in 2009,
increased sales in 2010 and believe we can continue to grow
sales in 2011 and beyond. For Fusilev, which we launched in
August 2008, we were able to benefit from broad utilization in
community clinics and hospitals and recognized a dramatic
increase in sales during 2010 due to a shortage of generic
leucovorin. While we cannot predict how long the shortage may
continue, our focus now is to obtain approval for Fusilev in
advanced metastatic colorectal cancer. As part of its review of
our supplemental new drug application, or sNDA, for metastatic
colorectal cancer, the FDA requested additional data to which we
submitted a response on October 29, 2010. The FDA formally
accepted the submission and established a decision date, or
PDUFA, of April 29, 2011.
56
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Optimizing our development portfolio and maximizing the
asset values of its components.
While over
the recent few years, we have evolved from a development-stage
to a commercial-stage pharmaceutical company, we have maintained
a highly focused development portfolio. Our strategy with regard
to our development portfolio is to focus on late-stage drugs and
to develop them rapidly to the point of regulatory approval. We
plan to develop some of these drugs ourselves or with our
subsidiaries and affiliates, or secure collaborations such that
we are able to suitably monetize these assets.
Expanding our pipeline of late stage and commercial drugs
through licensing and business
development.
It is our goal to identify new
strategic opportunities that will create strong synergies with
our currently marketed drugs and identify and pursue
partnerships for out-licensing certain of our drugs in
development. To this end, we will continue to explore strategic
collaborations as these relate to drugs that are either in
advanced clinical trials or are currently on the market. We
believe that such opportunistic collaborations will provide
synergies with respect to how we deploy our internal resources.
In this regard, we intend to identify and secure drugs that have
significant growth potential either through enhanced marketing
and sales efforts or through pursuit of additional clinical
development. We believe our in-licensing of belinostat, a novel
histone deacetylase, or HDAC, inhibitor, is demonstrative of
such licensing and business development efforts outlined above.
Managing our financial resources
effectively.
We remain committed to fiscal
discipline, a policy which has allowed us to become well
capitalized among our peers, despite a very challenging capital
markets environment during 2009 and continuing through 2010.
This policy includes the pursuit of non-dilutive funding
options, prudent expense management, and the achievement of
critical synergies within our operations in order to maintain a
reasonable burn rate. Even with the continued
build-up
in
operational infrastructure to facilitate the marketing of our
two commercial drugs, we intend to be fiscally prudent in any
expansion we undertake. In terms of revenue generation, we plan
to become more reliant on sales from currently marketed drugs
and intend to pursue out-licensing of select pipeline drugs in
select territories, as discussed above. When appropriate, we may
pursue other sources of financing, including non-dilutive
financing alternatives. While we are currently focused on
advancing our key drug development programs, we anticipate that
we will make regular determinations as to which other programs,
if any, to pursue and how much funding to direct to each program
on an ongoing basis, based on clinical success and commercial
potential, including termination of our existing development
programs, especially if we do not expect value being driven from
continued development. We ended 2010 with over $100 million
in cash, cash equivalents and investments which was net of the
$30 million license fee paid for belinostat in early 2010
offset by cash received from an out-license of apaziquone of
approximately $17.5 million.
Further enhancing the organizational structure to meet our
corporate objectives.
We have highly
experienced staff in pharmaceutical operations, clinical
development, regulatory and commercial functions who previously
held positions at both small to mid-size biotech companies, as
well as large pharmaceutical companies. We have strengthened the
ranks of our management team, and will continue to pursue talent
on an opportunistic basis. Finally, we remain committed to
running a lean and efficient organization, while effectively
leveraging our critical resources.
57
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58
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Year Ended December 31,
2010
2009
2008
($ in 000s)
$
6,165
$
10,915
$
5,477
1,916
1,168
2,435
716
311
150
1,281
1,125
2,096
421
563
151
36,045
3,469
1,535
1,304
50,013
15,617
11,613
14,838
16,652
15,070
(7,550
)
(11,211
)
$
57,301
$
21,058
$
26,683
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$13.6 million increase attributable to sales and marketing
expenses, including payroll costs, incurred with the sales of
Zevalin and Fusilev. We expect sales and marketing expenses
related to Zevalin and Fusilev to increase in 2011
$1.8 million increase in non-cash compensation expenses.
60
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$10.6 million increase attributable to sales and marketing
expenses, including payroll costs, incurred with the launch of
Zevalin and Fusilev.
$3.3 million increase in general and administrative costs
due to increased activities, including payroll costs and higher
professional costs due to business development activities
$1.6 million increase in non-cash compensation expenses.
61
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Chargebacks
Data and
and
Distribution
Doubtful
Discounts
Rebates
Returns
Fees
accounts
Total
($ in 000s)
$
860
388
$
1,176
$
213
$
150
$
2,787
1,750
14,721
3,540
3,029
359
23,389
(1,935
)
(635
)
(2,716
)
(1,368
)
(170
)
(6,824
)
$
675
$
14,474
$
2,000
$
1,874
$
339
$
19,352
$
1,631
$
$
3,144
$
$
150
$
4,925
3,760
469
95
1,212
5,536
(4,531
)
(81
)
(2,063
)
(999
)
(7,674
)
$
860
$
388
$
1,176
$
213
$
150
$
2,787
62
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63
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Less than
After
($ in 000s)
Total
1 Year
2-3 Years
4-5 Years
5 Years
90
45
45
3,245
568
1,233
1,152
292
6,323
5,931
392
204,043
6,089
69,058
37,926
90,970
213,701
12,633
70,728
39,078
91,262
(1)
The table of contractual and commercial obligations excludes
contingent payments that we may become obligated to pay upon the
occurrence of future events whose outcome is not readily
determinable. Such significant contingent obligations are
described below under Employment Agreement.
(2)
The capital lease obligations are related to leased office
equipment.
(3)
The operating lease obligations are primarily related to the
facility lease for our principal executive office in Henderson,
Nevada expiring April 30, 2014; and for our research and
development facility in Irvine, California expiring
June 30, 2016
(4)
Purchase obligations represent the amount of open purchase
orders and contractual commitments to vendors for products and
services that have not been delivered, or rendered, as of
December 31, 2010. Approximately 90% of the purchase
obligations consist of expenses associated with clinical trials
and related costs for apaziquone and ozarelix for each of the
periods presented. Please see Service Agreements
below for further information.
(5)
Milestone obligations are payable contingent upon successfully
reaching certain development and regulatory milestones as
further described below under Licensing Agreements.
While the amounts included in the table above represent all of
our potential cash development and regulatory milestone
obligations as of December 31, 2010, given the
unpredictability of the drug development process, and the
impossibility of predicting the success of current and future
clinical trials, the timelines estimated above do not represent
a forecast of when payment milestones will actually be reached,
if at all. Rather, they assume that all development and
regulatory milestones under all of our license agreements are
successfully met, and represent our best estimates of the
timelines. In the event that the milestones are met, we believe
it is likely that the increase in the potential value of the
related drug product will exceed the amount of the milestone
obligation.
64
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65
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66
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67
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68
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Item 7A.
Quantitive
and Qualitative Disclosures About Market Risk
Item 8.
Financial
Statements and Supplementary Data
Item 9.
Changes
in and Disagreements with Accoutants on Accounting and Financial
Disclosure
Item 9A.
Controls
and Procedures
(i)
Disclosure
Controls and Procedures
69
Table of Contents
(ii)
Internal
Control Over Financial Reporting
(a)
Managements
annual report on internal control over financial
reporting
(b)
Changes
in internal control over financial reporting
70
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71
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Item 9B.
Other
Information
Item 10.
Directors,
Executive Officers and Corporate Governance
Dr. Arora, 70, has been a director of Spectrum since June
2010. Prior to his election, Dr. Arora had been providing
consulting services to Spectrum since February 2010.
Dr. Arora is a business executive with global experience in
driving strategic thinking, management and implementation of
operations for drug development worldwide. Dr. Arora has
provided consulting services to senior management at several
pharmaceutical companies, including Astellas Pharma Global
Development, Inc., for global drug development, from May 2008 to
June 2009, and UCB, Inc., for applications in global regulatory
affairs, electronic document management, pharmacovigilance and
worldwide quality assurance and compliance, from November 2003
to February 2006. Prior to that, Dr. Arora held senior
management positions with several pharmaceutical companies,
including Vice President of R&D Global Regulatory Affairs
for Management Information at Pfizer Inc. from 1998 to 2003,
Senior Director of Regulatory Affairs at Novartis AG from 1993
to 1998 and Group Director of Biometrics Operations at
Sanofi-Aventis. In addition, from 1994 to 2003, Dr. Arora
served as Chairman of the Electronic Regulatory Submissions
Working Group at PhRMA, which consisted of business and
information technology experts from the FDA and 20
biopharmaceutical companies and was the PhRMA lead at ICH on
establishing electronic standards for submission of marketing
applications to regulatory authorities. Dr. Arora received
a B.Sc. in Mathematics, Physics and Chemistry from Lucknow
University in India, a B.Sc. (Honors) in Agriculture and a M.Sc.
in Animal Genetics from G. B. Pant University of Agriculture
& Technology in India and a Ph.D. in Population Genetics
from Iowa State University.
Dr. Arora has significant experience in the pharmaceutical
industry, which includes 11 years experience in
global regulatory affairs and 18 years experience in
biometrics operations, including statistics, clinical data
systems, clinical data management and medical writing.
Furthermore, Dr. Arora has operational management
experience, a keen understanding of the regulatory environment
in which pharmaceutical companies operate and extensive
knowledge in drug development operations and regulatory
submissions and approvals. As a result, Dr. Arora is well
qualified to serve on our board of directors.
72
Table of Contents
Sc.D., Psy.D
Dr. Krassner, 75, has been a director of Spectrum since
December 2004 and was previously a member of our Scientific
Advisory Board from 1996 to 2001. Dr. Krassners
career spans four decades of experience in various positions at
the University of California, Irvine, or UCI, most recently as
Professor Emeritus of Developmental and Cell Biology at the
School of Biological Sciences. While at UCI, he developed and
reinforced FDA and NIH compliance procedures for UCI-sponsored
human clinical trials, established UCIs first
Institutional Review Board, and at one time headed all contract
and grant activities. Dr. Krassner has also been retained
by a number of public and private pharmaceutical, medical device
and other companies to provide scientific and regulatory
advisory services, including FDA compliance.
Dr. Krassners work has been published in numerous
peer-reviewed U.S. journals. Dr. Krassner has been awarded
grants from the National Institute of Health, the National
Science Foundation and the World Health Organization.
Dr. Krassner has been a member of the American Society of
Protozoology, the American Society of Tropical Medicine and
Hygiene, the Corporation of the Marine Biological Laboratories,
Woods Hole, MA, and Sigma Xi, among others. Dr. Krassner
received a B.S. in Biology from Brooklyn College and an Sc.D.
from the Bloomberg School of Public Health at Johns Hopkins
University.
Dr. Krassners extensive and distinctive experience in
business and academia brings valuable perspective to our board.
He has a strong background in research in the area of
developmental and cell biology and his work in the area has been
published in numerous peer-reviewed U.S. journals. Moreover, his
expertise in scientific and regulatory advisory services,
including FDA compliance, makes him well qualified to serve on
our board of directors.
Dr. Lenaz, 70, has been a director of Spectrum since June
2010. Dr. Lenaz served as Spectrums Chief Scientific
Officer from February 2005 to June 2008 and as President of
Spectrums Oncology Division from 2000 to 2005. Since
retiring as Spectrums Chief Scientific Officer in June
2008, Dr. Lenaz provided consulting services to Spectrum
from June 2008 to June 2010. From 1997 to 2000, Dr. Lenaz
served as Senior Vice President of Clinical Research, Medical
Affairs at SuperGen, Inc., a NASDAQ listed pharmaceutical
company dedicated to cancer drug development. From 1978 to 1997,
Dr. Lenaz held several senior management positions with
Bristol- Myers Squibb, a NYSE-listed pharmaceutical company,
including Senior Vice President of Oncology Franchise Management
from 1990 to 1997 and Director of Scientific Affairs,
Anti-Cancer from 1985 to 1990. Dr. Lenaz is also a
prominent researcher, having conducted research in the areas of
pharmacology, experimental chemotherapy, histology, general
physiology, and experimental therapeutics at various
institutions for cancer research, including Roswell Park
Memorial Institute, Memorial Sloan-Kettering Cancer Center and
the National Cancer Institute in Milan. He is a member of
several scientific societies, including the American Association
for Cancer Research, American Association for Clinical Oncology,
European Society for Medical Oncology, and International
Association for the Study of Lung Cancer. Dr. Lenaz has
served as a director of Pharmaco-Kinesis Corporation, a
privately held medical device company, since January 2009.
Dr. Lenaz is a graduate of Liceo Scientifico A. Righi in
Bologna, Italy and he received a medical degree from the
University of Bologna Medical School in 1966.
Table of Contents
Dr. Lenaz is a renowned and accomplished oncologist who
will bring to the board of directors over 35 years
experience in the pharmaceutical industry and a wealth of
knowledge in the field of cancer drug development.
Dr. Lenazs qualifications to serve on the board of
directors include his expertise in the development of cancer
drugs, his tenure as our Chief Scientific Officer, as well as
his subsequent consulting services for our company, his
significant management experience with Bristol-Myers Squibb, and
his prominent research in the field of oncology. As a result,
Dr. Lenaz is well qualified to serve on our board of
directors.
M.A., M.B.A., Ph.D.
Dr. Maida, 59, has been a director of Spectrum since
December 2003. Dr. Maida is currently Vice President of
Clinical Research and General Manager, Oncology, world-wide for
PharmaNet, Inc. Dr. Maida has been the acting Chairman of
Dendri Therapeutics, Inc., a startup company focused on the
clinical development of therapeutic vaccines for patients with
cancer, since 2003. Dr. Maida has been serving as Chairman,
Founder and Director of BioConsul Drug Development Corporation
and Principal of Anthony Maida Consulting International since
1999, providing consulting services to large and small
biopharmaceutical firms in the clinical development of oncology
products and product acquisitions and to venture capital firms
evaluating life science investment opportunities. Additionally,
Dr. Maida formerly served as a member of the board of
directors of Sirion Therapeutics, Inc., a privately held
ophthalmic-focused company, and GlycoMetrix, Inc., a startup
company focused on the development of tests to identify
carbohydrates that can indicate cancer. Dr. Maida served as
the President and Chief Executive Officer of Replicon
NeuroTherapeutics, Inc., a biopharmaceutical company focused on
the therapy of patients with tumors (both primary and
metastatic) of the central nervous system, where he successfully
raised financing from both venture capital and strategic
investors and was responsible for all financial and operational
aspects of the company, from June 2001 to July 2003. From 1999
to 2001, Dr. Maida held positions as Interim Chief
Executive Officer for Trellis Bioscience, Inc., a privately held
biotechnology company that addresses high clinical stage failure
rates in pharmaceutical development, and President of CancerVax
Corporation, a biotechnology company dedicated to the treatment
of cancer. From 1992 until 1999, Dr. Maida served as
President and CEO of Jenner Biotherapies, Inc., a
biopharmaceutical company. From 1980 to 1992, Dr. Maida
held senior management positions with various companies
including Vice President Finance and Chief Financial Officer of
Data Plan, Inc., a wholly owned subsidiary of Lockheed
Corporation. Dr. Maida serves on the Advisory Boards of
EndPoint BioCapital and Sdn Bhd (Kuala Lumpur, Malaysia) and
serves or has served as a consultant and technical analyst for
several investment firms, including CMX Capital, LLC, Sagamore
Bioventures, Roaring Fork Capital, North Sound Capital, The
Bonnie J. Addario Lung Cancer Foundation and Pediaric
BioScience, Inc. Additionally, Dr. Maida has been retained
by Abraxis BioScience, Inc., Northwest Biotherapeutics, Inc.,
Takeda Chemical Industries, Ltd. (Osaka, Japan), and Toucan
Capital to conduct corporate and technical due diligence on
investment opportunities. Dr. Maida is a speaker at
industry conferences and is a member of the American Society of
Clinical Oncology, the American Association for Cancer Research,
the Society of Neuro-Oncology, the International Society for
Biological Therapy of Cancer, the American Association of
Immunologists and the American Chemical Society. Dr. Maida
received a B.A. in History from Santa Clara University in
1975, a B.A. in Biology from San Jose State University in
1977, an M.B.A. from Santa Clara University in 1978, an
M.A. in Toxicology from San Jose State University in 1986
and a Ph.D. in Immunology from the University of California in
2010.
Table of Contents
Dr. Maidas qualifications to serve on the board of
directors include the extensive experience he has gained holding
senior management positions, including chairman, president,
chief financial officer and chief executive officer, at various
biotechnology and biopharmaceutical companies. He has
successfully raised financing from venture capital and strategic
investors for biopharmaceutical companies and he currently
provides consulting services to hedge funds, venture capital
firms interested in biopharmaceutical firms. Furthermore,
Dr. Maidas vast knowledge in the area of clinical
development of oncology products and product acquisitions, in
addition to his continuous research in the field of oncology,
provides unique and valuable insight to our board of directors.
As a result, Dr. Maida is well qualified to serve on our
board of directors.
Dr. Mehta, 78, has been a director of Spectrum since June
2010. Dr. Mehta served on Spectrums board of
directors from June 2003 to July 2007. Dr. Mehta has been
self-employed as a pharmaceutical consultant since 1998 and
provided consulting services to Spectrum from July 2007 to June
2010. Dr. Mehta is a venture partner at Radius Ventures,
LLC in New York. From 1982 until his retirement in 1997,
Dr. Mehta held several senior management positions with
Pfizer Inc., including Senior Vice President, U.S. Clinical
Research, with responsibility for clinical research (Phases 1, 2
and 3) including data processing and statistical analysis for
Pfizers drugs in the U.S., as well as supervised
submissions of new drug applications for Cardura, Norvasc,
Zoloft, Zithromax, Diflucan, Unasyn, Trovan, Viagra, Geodon, and
a number of other drugs/supplements. Dr. Mehta served as
Chairman of the board of directors of Quintiles Spectral (India)
Limited (Ahmedabad, India) from 1998 to 2001 and as a member of
the board of directors of Bharat Serums & Vaccines Limited
(Mumbai, India) from 2006 to 2008 and Targanta Therapeutics
Corporation, a NASDAQ-listed biopharmaceutical company acquired
by The Medicines Company in February 2009, from 2005 to 2009.
From 1993 to 1997, Dr. Mehta served as Chair, Efficacy
Section for the Pharmaceutical Research and Manufacturers of
America, or PhRMA, in the International Conference on
Harmonization and was a PhRMA topic leader for one of the Expert
Working Group in Efficacy. From 1966 to 1982, Dr. Mehta
held the position of Group Director, Clinical Research in the
U.S. for Hoechst AG with supervision of Internal Medicine,
Metabolic and Infectious Diseases and Cardiovascular groups.
Dr. Mehta received an M.D., an M.B.B.S. (Bachelor of
Medicine and Bachelor of Surgery equivalent to an
M.D. degree in the U.S.) and a Ph.D. from the University of
Bombay. Dr. Mehta was a Research Fellow in Clinical
Pharmacology at Cornell University Medical College.
Dr. Mehta brings to the board of directors over
28 years experience in the pharmaceutical industry
and a wealth of knowledge in the field of clinical research and
drug development. Dr. Mehtas qualifications to serve
on the board of directors include his expertise in clinical
research, drug development and FDA matters, his prior service on
Spectrums board of directors, as well as his service on
the boards of directors of other publicly traded and privately
held biopharmaceutical companies and his significant management
experience with Pfizer. As a result, Dr. Mehta is well
qualified to serve on our board of directors.
Table of Contents
Dr. Shrotriya, 66, has been Chairman of the Board, Chief
Executive Officer and President since August 2002 and a director
of Spectrum since June 2001. From September 2000 to August 2002,
Dr. Shrotriya served as President and Chief Operating
Officer of Spectrum. Dr. Shrotriya also serves as a member
of the board of directors of Antares Pharma, Inc., an
AMEX-listed drug delivery systems company. Prior to joining
Spectrum, Dr. Shrotriya held the position of Executive Vice
President and Chief Scientific Officer from November 1996 until
August 2000, and as Senior Vice President and Special Assistant
to the President from November 1996 until May 1997, for
SuperGen, Inc., a publicly-held pharmaceutical company focused
on drugs for life-threatening diseases, particularly cancer.
From August 1994 to October 1996, Dr. Shrotriya held the
positions of Vice President, Medical Affairs and Vice President,
Chief Medical Officer of MGI Pharma, Inc., an oncology-focused
biopharmaceutical company. Dr. Shrotriya spent
18 years at Bristol-Myers Squibb Company in a variety of
positions, most recently as Executive Director, Worldwide CNS
Clinical Research. Previously, Dr. Shrotriya held various
positions at Hoechst Pharmaceuticals, most recently as Medical
Advisor. Dr. Shrotriya was an attending physician and held
a courtesy appointment at St. Joseph Hospital in Stamford,
Connecticut. In addition, he received a certificate for Advanced
Biomedical Research Management from Harvard University.
Dr. Shrotriya received an M.D. from Grant Medical College,
Bombay, India, in 1974; a D.T.C.D. (Post Graduate Diploma in
Chest Diseases) from Delhi University, V.P. Chest Institute,
Delhi, India, in 1971; an M.B.B.S. (Bachelor of Medicine and
Bachelor of Surgery equivalent to an M.D. degree in
the U.S.) from the Armed Forces Medical College, Poona, India,
in 1967; and a B.S. in Chemistry from Agra University, Aligarh,
India, in 1962.
Dr. Shrotriya is a demonstrated leader in the
biopharmaceutical industry. His significant leadership
experience includes 8 years of serving as our Chairman and
Chief Executive Officer as well as his service on the board of
directors of Antares Pharma, Inc. Dr. Shrotriya has held
prior leadership roles in the biopharmaceutical industry
including his positions as our President and Chief Operating
Officer, as the executive vice president and chief scientific
officer for a publicly-held pharmaceutical company, and
18 years of experience in various positions he held in
Bristol- Myers Squibb. Dr. Shrotriyas significant
leadership experience in the biopharmaceutical sector, along
with his experience as a physician and his expertise in drug
development, position him well to serve on our board of
directors.
Table of Contents
Information regarding Dr. Shrotriya is provided above.
Dr. Tidmarsh has served as Senior Vice President, Chief
Scientific Officer and Head of Research & Development at
Spectrum since July 2010. Before joining Spectrum,
Dr. Tidmarsh served as the Chief Executive Officer of
Metronome Therapeutics, a privately held biopharmaceutical
company focused on novel cancer drug development from 2006 until
2010. From 2005 through 2008, he was the Founder and Chief
Executive Officer of Horizon Therapeutics, Inc., a venture
funded private company, where he successfully completed four
Phase 1 and two large Phase 3 trials, and authored all patent
applications. Dr. Tidmarsh also has published over twenty
articles. He earned his Bachelor of Science, M.D., and
Ph.D. from Stanford University and is currently an Associate
Professor of Pediatrics and Neonatology at Stanford University.
Senior Vice President, Chief Commercial Officer
Mr. Shields has served as Senior Vice president, Chief
Commercial Officer since May 2010. Previously Mr. Shields
served as Area Business Director for a Division of TEVA
Pharmaceutical Industries Limited from September 2007 through
April 2010 and Regional Business Director and National Director
of Sales for Commercial Divisions of Altana AG from March 2001
until the US Commercial Division was dissolved in December
2006. Mr. Shields also held positions of increasing
responsibility with several pharmaceutical companies, including
Centocor, Bristol-Myers Squibb, and ICI Stuart Pharmaceuticals.
Mr. Shields earned his Bachelors Degree from the
University of Kentucky.
Senior Vice President of Finance
Mr. Kumaria has served as Vice President of Finance since
December 2003. From 1996 to 2003, he provided financial and
management consulting services to private companies. From 1984
to 1996, he served in senior executive and management positions
for several companies including Deloitte & Touche. Mr.
Kumaria became a Chartered Accountant in London, England in 1973
and a Certified Public Accountant in 1978. He received an
Executive M.B.A. from Columbia University in 1984.
Senior Vice President and Acting Chief Financial Officer
Mr. Scott has served as Senior Vice President and Acting Chief
Financial Officer since October 2010. Previously Mr. Scott
served as Chief Financial Officer at Biolase Technology a
Southern California-based medical device company. Prior to
Biolase, Mr. Scott was Executive Vice President and Chief
Financial Officer of North American Scientific, Inc., a Southern
California-based medical device company. In March 2009, North
American Scientific sought protection under Chapter 11 of the
U.S. Bankruptcy Code, and as part of an orderly plan to sell its
assets, during the following two months successfully completed
the sale of its prostate and breast cancer businesses to Best
Theratronics, Ltd. and Portola Medical Inc. respectively. Prior
to North American Scientific, Mr. Scott was Chief Financial
Officer of Irvine, California-based Alsius Corporation from
January 2006 to August 2008. Mr. Scott is a Certified Public
Accountant and received a bachelor of science degree in business
administration from the University of Southern California.
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Table of Contents
Item 11.
Executive
Compensation
Record product revenues of both of our marketed, proprietary
anticancer drugs
ZEVALIN
®
and
FUSILEV
®
Overall revenue for the company grew by almost 95% to
$74 million from $38 million in 2009
Closing the year with $104 million in cash, cash
equivalents and investments during difficult economic times and
market conditions,
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Strengthening the leadership and streamlining operations at each
of the Companys functions,
Growing the Companys market capitalization by
approximately 40% to levels which greatly exceeded the
Boards expectations and peer company performance.
Chairman & CEO; between the 75th and 90th percentile
of the peer group and industry in general
Other Named Executive Officers: between the median and 75th
percentile of the peer group and industry in general
Chairman and Chief Executive Officer
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Chief Scientific Officer
Chief Commercial Officer
Acting Chief Financial Officer
Senior Vice President, Finance
Affymax Inc
Immunomedics Inc
Allos Therapeutics Inc
Intermune Inc
Amicus Therapeutics Inc
Isis Pharmaceuticals Inc
Arena Pharmaceuticals Inc
Mannkind Corp
Biocryst Pharmaceuticals Inc
Medivation Inc
Biomarin Pharmaceutical Inc
Onyx Pharmaceuticals Inc
Cell Therapeutics Inc
Sangamo Biosciences Inc
Cytokinetics Inc
Seattle Genetics Inc
Dendreon Corp
Supergen Inc
Enzon Pharmaceuticals Inc
Theravance Inc
Exelixis Inc
Vertex Pharmaceuticals Inc
Base salary;
Annual bonuses; and
Equity incentive awards.
Table of Contents
81
Table of Contents
2009
2010
$
600,000
$
650,000
$
400,000
$
240,000
$
225,000
$
275,000
$
290,000
ZEVALIN: Grow sales 25% over 2009 sales of $15.7M; Submit data
to FDA for bioscan removal; Arrange alternate back-up supplier
for Yttrium; Reduce cost of goods; Secure reimbursement in HOPPs
and community setting.
All of the Zevalin goals have been accomplished, including Sales
of $29 million representing an 84% increase, compared to a
target growth of 25%, for a drug that had experienced a
declining sales trend prior to our acquisition of rights to the
drug in 2009. Zevalin cost of goods was reduced significantly in
2010.
FUSILEV: Maximize FUSILEV sales, with a goal of $4 million for
2010; while advancing an sNDA for its use in the treatment of
colorectal cancer.
All of the Fusilev goals have been accomplished: Sales of $32
million represent an increase of over 150% compared 2009 sales;
and the FDA has established a PDUFA date of April 29, 2011 for a
decision on our sNDA for colorectal cancer.
Achieved profitability in the fourth quarter of 2010
Fourth quarter 2010 product revenues in excess of $30 million,
up 500% as compared to approximately $5 million in the fourth
quarter of 2009
Fiscal year 2010 product revenues in excess of $60 million, up
114% as compared to approximately $28 million in fiscal year
2009.
Acquire a late stage (in Phase II or III/pivotal trial) or
marketed drug
We in-licensed rights to belinostat, a HDAC inhibitor from
TopoTarget Inc. and have accelerated the clinical trial timeline
in a difficult to enroll study, with the objective of filing an
NDA in 2011, or early 2012.
Continue active monitoring of apaziquone clinical trials
The apaziquone clinical trials are on track for NDA submission
in 2012.
Active management of alliances with drug development partners
We have continued to maintain excellent relations with our
alliance partners.
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Maintain tight control over the Companys expenses.
We continued to exercise tight control over cash used in
operations. In spite of the approximately $30 million paid for
the licensing of belinostat, we closed the year with $104
million cash,cash equivalents and investments, compared to $125
million at the start of the year; a net decrease of $21 million.
Continue to manage expenses and capital such that we close 2010
with at least $50M in the bank (if we do acquire an asset for
about $30 million cash)
During the fourth quarter cash, cash equivalents and investments
increased from $92 million as of September 30, 2010 to
approximately $104 million as of December 31, 2010, reflecting a
net increase of approximately $12 million.
Enhance leadership capabilities of personnel.
Maintained the companywide training and employee development to
enhance corporate
Hire appropriate personnel to support ZEVALIN sales growth; and
personnel to support development of belinostat and other
pipeline drugs.
During 2010 we reviewed our staffing and strengthened the leadership in all functions Commercial, Development, Legal and compliance, Finance and Business Development; at the same time reduced headcount by approximately 20 personnel compared to the start of the year.
Continue to present at strategic healthcare and partnership
conferences.
The Company presented at several strategic healthcare and
partnership conferences and continued to build on its investor
base.
Continue to build a base of strategic investors while
maintaining relationships with NASDAQ and current investors.
During 2010, the Company experienced an increase in its market
capitalization of approximately 40%.
Table of Contents
Stock Options
Restricted Stock
# Granted
Exercise price
# Granted
Fair Market Value
1,000,000
$
6.87
250,000
$
6.87
50,000
$
6.87
20,000
$
6.87
50,000
$
6.87
20,000
$
6.87
50,000
$
6.87
20,000
$
6.87
(1)
Mr. Scott was not awarded stock options or restricted Stock
due to his limited tenure with the Company.
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85
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Fees Earned or
Option
Paid in Cash
Awards
(1)($)
(2)($)
Total ($)
25,000
69,000
94,000
85,000
157,200
242,200
50,000
69,000
119,000
85,000
157,200
242,200
60,000
69,000
129,000
1.
This column reports the dollar amount of cash compensation paid
in 2011 for board and committee service. Effective as of
June 26, 2009, each non-employee director received annual
retainers for the period of service from the date of election
(or reelection) as a director to the subsequent annual
stockholder meeting, each retainer being payable on annually or
semi-annually at the election of the director as follows:
$25,000 director retainer, $25,000 retainer in lieu of
meeting fees of the board and committees of the board, and
$10,000 each to the chairs of the Audit and Compensation
Committees. Our directors are also reimbursed for certain
out-of-pocket
expenses incurred in connection with attendance at board
meetings. Directors who are also our employees receive no
compensation for service as directors.
2.
The amounts reflect the aggregate grant date fair value of the
following option awards made to such non-employee director. On
April 20, 2010, each Board member of record on that date
received a stock option to purchase up to 30,000 shares of
our common stock at $5.05 per share; with 100% of the shares
vesting on the last day of service as a Board member for the
2009-2010
period. On July 1, 2010, upon confirmation of election as a
Board member for the
2010-2011
period, each elected non-employee director received an option to
purchase up to 30,000 shares of our common stock at $3.92
per share; 25% of the shares vested on the date of grant and the
remaining shares vested equally in three annual increments from
the date of grant; and on. For
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Table of Contents
additional information, refer to note 12 of our financial
statements that are included elsewhere in this annual report.
3.
Includes $30,000 related to Board, Committee and Committee Chair
service from January 1, 2011 until June 30, 2011, or
date of Annual Stockholder Meeting.
4.
Includes $25,000 related to Board and Committee service for the
period from January 1, 2011 until June 30, 2011, or
date of Annual Stockholder Meeting.
5.
Excludes $119,250 compensation as consultant prior to election
as director. Such consulting arrangement terminated effective
July 1, 2010.
6.
Excludes $127,399 compensation as consultant prior to election
as director. While his consulting agreement expired
December 31, 2010. Dr. Lenazs consulting
arrangements terminated effective July 1, 2010.
7.
Excludes $3,000 compensation as consultant prior to election as
director. Such consulting arrangement terminated effective
July 1, 2010.
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Stock
Option
All Other
Awards
Awards
Compensation
Year
Salary ($)
Bonus ($)
($)(1)
($)(1)
($)
Total ($)
2010
650,000
950,000
930,000
2,530,000
454,195
(2,4)
5,514,195
2009
600,000
1,000,000
2,159,000
33,956
(2)
3,792,956
2008
600,000
1,000,000
388,000
839,500
34,694
(2)
2,862,194
2010
181,258
50,000
60,300
472,000
6,276
769,835
2010
290,000
100,000
46,500
394,000
97,524
(3,4)
928,024
2009
275,000
60,000
429,900
21,449
(3)
786,349
2008
250,000
50,000
65,850
113,000
22,113
(3)
500,963
2010
138,433
86,975
288,234
17,566
531,208
2010
49,959
247,000
2,374
299,333
(1)
The amounts reflect the aggregate grant date fair value of
awards made to such named executive officers. For additional
information, refer to note 12 of our financial statements
that are included elsewhere in this annual report.
(2)
Amounts include: (a) annual 401(k) matching contribution
made by us in shares of our common stock and healthcare
premiums, which is a benefit offered to all our employees,
(b) premiums paid on life insurance policies covering his
life and having as beneficiary his estate or other
beneficiaries, (c) amounts related to the personal use of a
leased company car, gas and repairs, and (d) legal fees
related to negotiations of his employment agreement. No
individual component of this amount exceeds $25,000.
(3)
Amounts include annual 401(k) matching contribution made by us
in shares of our common stock, and premiums paid on healthcare
and life insurance policies,which are benefits that are offered
to all of our employees.
All Other
All Other
Option
Stock
Awards:
Awards:
Grant Date
Number of
Number of
Exercise or
Fair Value
Securities
Shares of
Base Price
of Stock
Underlying
Stock or
of Option
and Option
Grant Date
Options (#)
Units (#)
Awards ($)
Awards ($)(1)
1/8/2010
500,000
4.65
$
1,380,000
7/1/2010
500,000
3.92
$
1,150,000
1/8/2010
200,000
$
930,000
7/15/2010
200,000
4.02
$
472,000
7/15/2010
15,000
$
60,300
1/8/2010
50,000
4.65
$
138,000
2/5/2010
10,000
4.39
$
26,000
7/1/2010
100,000
3.92
$
230,000
1/8/2010
10,000
$
46,500
5/10/2010
100,000
4.65
$
275,000
6/30/2010
1,080
3.9
$
2,473
7/1/2010
1,000
3.92
$
2,300
9/30/2010
3,570
4.09
$
8,461
10/11/2010
100,000
4.28
$
247,000
Table of Contents
(1)
The amounts reflect the grant date fair value dollar amount for
financial statement reporting purposes. Fair value assumptions
can be found in Note 11 to our financial statements.
Option Awards
Stock Awards
Equity
Number of
Number of
Equity
Incentive
Securities
Securities
Incentive
Plan Awards:
Underlying
Underlying
Plan Awards:
Market Value of
Unexercised
Unexercised
Option
Option
Number of
Shares of
Options (#)
Options (#)
Exercise
Expiration
Shares of
Stock Not Vested
Exercisable
Unexercisable
Price
Date
Stock Not Vested (#)
($)(7)
12,000
4.75
06/17/12
75,000
1.06
09/25/12
225,000
1.99
09/05/13
215,000
4.90
09/12/13
200,000
4.23
01/01/16
150,000
5.08
09/26/16
350,000
5.53
01/01/17
100,000
3.15
12/06/17
500,000
2.55
03/25/18
112,500
37,500
(1)
1.43
12/06/18
50,000
(4)
343,500
175,000
175,000
(1)
1.47
01/16/19
250,000
250,000
(1)
6.09
06/26/19
125,000
375,000
(1)
4.65
01/08/20
125,000
375,000
(1)
3.92
07/01/20
150,000
(5)
1,030,500
200,000
(3)
4.02
07/15/20
15,000
(6)
103,050
40,000
4.26
12/06/15
20,000
3.15
12/06/17
50,000
2.55
03/25/18
37,500
12,500
(1)
1.43
12/06/18
7,500
(4)
51,525
25,000
25,000
(1)
1.47
01/16/19
2,500
2,500
(1)
4.89
05/21/19
50,000
50,000
(1)
6.09
06/26/19
12,500
37,500
(1)
4.65
01/08/20
10,000
(2)
4.39
02/05/20
25,000
75,000
(1)
3.92
07/01/20
7,500
(5)
51,525
100,000
(3)
4.65
05/10/20
250
750
(1)
3.92
07/01/20
1,080
(2)
3.90
06/30/20
3,570
(2)
4.09
09/30/20
100,000
(3)
4.28
10/11/20
(1)
Option shares vest annually in equal 25% increments, with 25%
immediately vested on the grant date.
(2)
Option shares vest immediately.
(3)
Option shares vest 25% on anniversary date, and in 36 equal
monthly increments thereafter.
89
Table of Contents
(4)
Shares granted on December 6, 2008 with 25% vesting on the
grant date, and continuing to vest in equal 25% increments every
December 6th thereafter.
(5)
Shares granted on January 8, 2010 with 25% vesting on the
grant date, and continuing to vest in equal 25% increments every
January 8th thereafter.
(6)
Shares granted on July 15, 2010, and vesting in equal 25%
increments every July 15th thereafter.
(7)
Calculation based on the closing price of the common stock on
December 31, 2010 of $6.87 per share.
Stock Awards
Number of
Shares
Value realized
acquired on
on Vesting
Vesting (#)
($)(1)
125,000
602,250
15,000
71,975
(1)
The value realized on vesting in the above table was calculated
based on the price of the common stock on the vesting date.
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91
Table of Contents
Voluntary
Involuntary
Change in
Termination
Termination
Involuntary
Control
Without
Without
Termination
(Qualifying
Change in
Cause ($)
Retirement
Death ($)
Disability ($)
Cause ($)
For Cause
Termination) ($)
Control ($)
162,500
162,500
3,200,000
4,800,000
600,000
173,690
263,036
3,282,750
3,282,750
3,282,750
3,282,750
3,282,750
1,374,000
1,374,000
1,374,000
1,374,000
2,251,286
3,282,750
0
4,819,250
4,819,250
8,030,440
11,971,072
600,000
570,000
103,050
673,050
551,450
103,050
654,500
224,213
224,213
259,000
0
259,000
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Table of Contents
Item 12.
Security
Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.
Common
Shares and
Percent of
Preferred
Percent of
Common
Percent of
Shares Eligible
Shares
Preferred
Equivalents
Common
to Vote on
Name and Address
Beneficially
Stock
Beneficially
Shares
February 25,
Owned(1)
Outstanding(2)
Owned(3)
Outstanding(3)
2011(4)
3,161,135
6.08
%
6.08
%
New York, NY 10022
4,737,307
9.11
%
9.11
%
20
100.00
%
40,000
*
*
*
Less than 1%
(1)
The amount relates to the shares of our Series E Preferred
Stock owned by the entity as of February 25, 2011. There
are no outstanding shares of any other series of our preferred
stock.
(2)
Represents the percentage ownership of the total number of our
outstanding shares of Series E Preferred Stock.
(3)
Shares of common stock owned as of February 25, 2011 and
shares of common stock subject to preferred stock and warrants
currently convertible or exercisable, or convertible or
exercisable within 60 days of February 25, 2011, are
deemed beneficially owned and outstanding for computing the
percentage of the person holding such securities, but are not
considered outstanding for computing the percentage of any other
person.
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Table of Contents
(4)
Reflects actual voting percentage. Each holder of Series E
Preferred Stock shall be entitled to the number of votes equal
to the number of shares of common stock into which such shares
of Series E Preferred Stock could be converted on the
record date at the then current conversion value as determined
pursuant to the Certificates of Designations. At the current
conversion value, each share of Series E Preferred Stock is
entitled to 2,000 votes on each matter at the annual meeting.
Consequently, the holders of our Series E Preferred Stock
shall have a total of 40,000 votes on each matter at the annual
meeting.
(5)
The information set forth herein is based solely on information
contained in a Schedule 13G filed with the SEC on
February 8, 2011 by BlackRock, Inc.
(BlackRock). According to the Schedule 13G,
BlackRock has sole voting and dispositive power over
3,161,135 shares of our common stock.
(6)
The information set forth herein is based solely on information
contained in a Schedule 13G filed with the SEC on
February 14, 2011 by Eastern Capital Limited. Eastern
Capital Limited is a direct wholly-owned subsidiary of Portfolio
Services Ltd. Kenneth B. Dart is the beneficial owner of all of
the outstanding shares of Portfolio Services Ltd., which in
turns owns all the outstanding shares of Eastern Capital
Limited. As of the date of the Schedule 13G filing, Eastern
Capital Limited and Mr. Dart beneficially own in the
aggregate 4,737,307 shares of our common stock. Eastern
Capital Limited and Mr. Dart have shared voting and
dispositive powers with respect to 4,737,307 shares of our
common stock.
(7)
Based upon the information provided to us by the holder, SB
Venture Capital Management I-IV, LLCs are the Investment
Advisors to Sands Brothers Venture Capital LLC
(SBV), Sands Brothers Venture Capital II LLC
(SBV II), Sands Brothers Venture Capital LLC III
(SBV III) and Sands Brothers Venture Capital IV
LLC (SBV IV) (collectively, the Funds).
The Funds beneficial ownership includes the effect of
converting the 20 shares of Series E Preferred Stock
into 40,000 shares of common stock. Martin S. Sands and
Steven B. Sands are co-Member Managers of SB Venture Capital
Management LLC, SB Venture Capital Management II LLC, SB
Venture Capital Management III LLC, and SB Venture Capital
Management IV LLC, each a New York limited liability
company and each the member-manager of SBV, SBV-II, SBV-III and
SBV-IV, respectively, and are the natural persons exercising
voting and investment control over securities beneficially owned
by the Funds.
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Table of Contents
Percent of
Total
Shares
Options
Shares(1)
Owned
Outstanding
3,077,000
1,423,466
4,500,466
8.2
%
310,000
221,798
531,798
1.0
%
12,500
42,818
55,318
*
17,400
26,269
43,669
*
4,000
4,000
*
152,500
10,750
163,250
*
174,500
2,250
176,750
*
52,500
21,877
74,377
*
7,500
7,500
*
7,500
32,000
39,500
*
3,811,400
1,785,228
5,596,628
10.0
%
*
less than 1%
(1)
The holders of restricted stock are entitled to vote and receive
dividends, if declared, on the shares of common stock covered by
the restricted stock grant.
(2)
The number of shares includes 337,500 unvested restricted shares
of our common stock subject to future vesting within
60 days of February 25, 2011.
(3)
The number of shares includes 27,500 unvested restricted shares
of our common stock subject to future vesting within
60 days of February 25, 2011.
(4)
The number of shares includes 30,000 unvested restricted shares
of our common stock subject to future vesting within
60 days of February 25, 2011.
(5)
The number of shares includes 15,000 unvested restricted shares
of our common stock subject to future vesting within
60 days of February 25, 2011.
(6)
The number of shares includes 410,000 unvested restricted shares
of our common stock held as a group subject to future vesting
within 60 days of February 25, 2011.
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Table of Contents
Number of
Number of Securities
Securities to
Remaining Available
be Issued
for Future Issuance
Upon Exercise
Weighted-average
Under Equity
of Outstanding
Exercise Price of
Compensation Plans
Options,
Warrants
(excluding securities
Warrants or Rights
and Rights
reflected in column (a))
8,756,594
4.16
10,816,185
445,000
5.04
N/A
N/A
4,766,002
9,201,594
4.20
15,582,187
(1)
We have three stock incentive plans: the 1997 Stock Incentive
Plan, or the 1997 Plan, the 2003 Incentive Award Plan, or the
2003 Plan, and the 2009 Plan collectively as the Plans. We are
not granting any more options pursuant to the 1997 Plan or the
2003 Plan. The 2009 Plan authorizes annual increases in the
number of shares of our common stock available for issuance
under the 2009 Plan by an amount equal to the greater of
(i) 2,500,000 and (ii) a number of shares such that
the total number of shares available for issuance equals 30% of
the then number of shares of our common stock issued and
outstanding. Thus, the authorized and available shares may
fluctuate over time.
(2)
The number represents 445,000 shares of common stock
issuable upon exercise of warrants issued to our non-employees
under plans approved by our board of directors that we believe
are not required to be approved by our stockholders pursuant to
the rules of the NASDAQ Stock Market. We issued these warrants
in circumstances that enable us to adequately compensate,
without the payment in cash, for outside consultant services, in
order to conserve our cash for operating activities. The number
of securities remaining available for future issuance under
these types of equity compensation plans is zero; however, our
Board of Directors may approve additional issuances of warrants
under circumstances that it decides are appropriate.
Item 13.
Certain
Relationships and Related Transactions, and Director
Independence.
96
Table of Contents
Item 14.
Principal
Accountant Fees and Services
Ernst &
Ernst &
Young LLP
Young LLP
Kelley & Co.
2010($)
2009($)
2009($)(1)
416,000
210,000
85,280
5,200
27,210
253,825
24,800
675,025
210,000
137,290
(1)
Represents fees billed to us by K&C as our independent
registered public accounting firm through December 3, 2009.
97
Table of Contents
Item 15.
Exhibits and
Financial Statement Schedules
Page
F-2
F-4
F-5
F-6
F-7
F-8
98
Table of Contents
Exhibit
2
.1
Asset Purchase Agreement by and between the Registrant, Targent
Inc. and Certain Stockholders of Targent, Inc., dated March 17
2006. (Filed as Exhibit 2.1 to
Form 10-K/A,
Amendment No. 1, as filed with the Securities and Exchange
Commission on May 1, 2006, and incorporated herein by
reference.)
2
.2
Asset Purchase Agreement by and between the Registrant and Par
Pharmaceutical, Inc., dated as of May 6, 2008. (Filed as
Exhibit 2.1 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 11, 2008, and incorporated herein by reference.)
2
.3#
Purchase and Formation Agreement, dated as of November 26,
2008, by and among the Registrant, Cell Therapeutics, Inc. and
RIT Oncology, LLC. (Filed as Exhibit 2.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
December 19, 2008, and incorporated herein by reference.)
2
.4#
Limited Liability Company Interest Assignment Agreement, dated
as of March 15, 2009, by and between the Registrant and
Cell Therapeutics, Inc. (Filed as Exhibit 2.1 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
May 15, 2009, and incorporated herein by reference.)
3
.1+
Amended Certificate of Incorporation, as filed.
3
.2
Form of Amended and Restated Bylaws of the Registrant. (Filed as
Exhibit 3.1 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 16, 2004, and incorporated herein by reference.)
4
.1
Rights Agreement, dated as of December 13, 2010, between
the Registrant and ComputerShare Trust Company, N.A.
(formerly U.S. Stock Transfer Corporation), as Rights Agent,
which includes as Exhibit A thereto the form of Certificate
of Designation for the Series B Junior Participating
Preferred Stock, as Exhibit B thereto the Form of Rights
Certificate and as Exhibit C thereto a Summary of Rights of
Stockholder Rights Plan. (Filed as Exhibit 4.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
December 13, 2010, and incorporated herein by reference.)
4
.2
Registration Rights Agreement, dated as of September 26,
2003, by and among the Registrant and the persons listed on
Schedule 1 attached thereto. (Filed as Exhibit 4.4 to
Form 8-K,
as filed with the Securities and Exchange Commission on
September 30, 2003, and incorporated herein by reference.)
4
.3
Investor Rights Agreement, dated as of April 20, 2004, by
and among the Registrant and the persons listed on
Schedule 1 attached thereto. (Filed as Exhibit 4.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
April 23, 2004, and incorporated herein by reference.)
4
.4
Form of Warrant, dated September 15, 2005. (Filed as
Exhibit 4.35 to
Form 10-K,
as filed with the Securities and Exchange Commission on
March 15, 2006, and incorporated herein by reference.)
4
.5
Registration Rights Agreement, dated as of April 20, 2006,
by and among the Registrant and Targent, Inc. (Filed as
Exhibit 4.2 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
May 8, 2006, and incorporated herein by reference.)
10
.1+
Sublease Agreement, dated as of December 2, 2010, between
the Registrant and Del Webb Corporation.
10
.2
Industrial Lease Agreement, dated as of January 16, 1997,
between the Registrant and the Irvine Company. (Filed as
Exhibit 10.11 to
Form 10-KSB,
as filed with the Securities and Exchange Commission on
March 31, 1997, and incorporated herein by reference.)
10
.3
Preferred Stock and Warrant Purchase Agreement, dated as of
September 26, 2003, by and among the Registrant and the
purchasers listed on Schedule 1 attached thereto. (Filed as
Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
September 30, 2003, and incorporated herein by reference.)
10
.4
First Amendment, dated March 25, 2004, to Industrial Lease
Agreement dated as of January 16, 1997 by and between the
Registrant and the Irvine Company. (Filed as Exhibit 10.1
to
Form 10-Q,
as filed with the Securities and Exchange Commission on
May 17, 2004, and incorporated herein by reference.)
10
.5
Common Stock and Warrant Purchase Agreement, dated as of
April 20, 2004, by and among the Registrant and the
purchasers listed on Schedule 1 attached thereto. (Filed as
Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
April 23, 2004, and incorporated herein by reference.)
10
.6#+
Amended and Restated License and Collaboration Agreement by and
between the Registrant and Aeterna Zentaris GmbH (formerly
Zentaris GmbH), dated as of November 5, 2010.
99
Table of Contents
Exhibit
10
.7*
Form of Stock Option Agreement under the 2003 Amended and
Restated Incentive Award Plan. (Filed as Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
December 17, 2004, and incorporated herein by reference.)
10
.8#
License Agreement by and between the Registrant and Chicago
Labs, Inc. (Filed as Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
February 25, 2005, and incorporated herein by reference.)
10
.9*
Form of Non-Employee Director Stock Option Agreement under the
2003 Amended and Restated Incentive Award Plan. (Filed as
Exhibit 10.5 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
May 10, 2005, and incorporated herein by reference.)
10
.10*
Restricted Stock Award Grant Notice and Restricted Stock Award
Agreement under the 2003 Amended and Restated Incentive Award
Plan. (Filed as Exhibit 10.44 to
Form 10-K,
as filed with the Securities and Exchange Commission on
March 15, 2006, and incorporated herein by reference.)
10
.11#
License Agreement between the Registrant and Merck Eprova AG,
dated May 23, 2006. (Filed as Exhibit 10.1 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 8, 2006, and incorporated herein by reference.)
10
.12*
Third Amended and Restated 1997 Stock Incentive Plan. (Filed as
Exhibit 10.2 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
November 3, 2006, and incorporated herein by reference.)
10
.13#
Agreement by and between the Registrant and Glaxo Group Limited
(d/b/a GlaxoSmithKline), dated November 10, 2006. (Filed as
Exhibit 10.38 to
Form 10-K,
as filed with the Securities and Exchange Commission on
March 14, 2007, and incorporated herein by reference.)
10
.14*
2003 Amended and Restated Incentive Award Plan. (Filed as
Exhibit 10.3 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 9, 2007, and incorporated herein by reference.)
10
.15#
License Agreement by and between the Registrant and Indena,
S.p.A., dated July 17, 2007. (Filed as Exhibit 10.4 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
November 9, 2007, and incorporated herein by reference.)
10
.16*
Executive Employment Agreement by and between the Registrant and
Rajesh C. Shrotriya, M.D., entered into June 20, 2008
and effective as of January 2, 2008. (Filed as
Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
June 26, 2008, and incorporated herein by reference.)
10
.17*
Consulting Agreement by and between the Registrant and Luigi
Lenaz, M.D., effective as of July 1, 2008. (Filed as
Exhibit 10.2 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 11, 2008, and incorporated herein by reference.)
10
.18*+
Amendment Number One to Consulting Agreement by and between the
Registrant and Luigi Lenaz, M.D., effective as of
March 16, 2010.
10
.19*+
Amendment Number Two to Consulting Agreement by and between the
Registrant and Luigi Lenaz, M.D., effective as of
July 2, 2010.
10
.20*
Form of Indemnity Agreement of the Registrant. (Filed as
Exhibit 10.32 to
Form 10-K,
as filed with the Securities and Exchange Commission on
March 31, 2009, and incorporated herein by reference.)
10
.21#
License, Development, Supply and Distribution Agreement, dated
October 28, 2008, by and among the Registrant, Allergan
Sales, LLC, Allergan USA, Inc. and Allergan, Inc. (Filed as
Exhibit 10.33 to
Form 10-K,
as filed with the Securities and Exchange Commission on
March 31, 2009, and incorporated herein by reference.)
10
.22*
2009 Employee Stock Purchase Plan. (Filed as Exhibit 99.1
to
Form S-8,
as filed with the Securities and Exchange Commission on
June 29, 2009, and incorporated herein by reference.)
10
.23*
2009 Incentive Award Plan. (Filed as Exhibit 99.2 to
Form S-8,
as filed with the Securities and Exchange Commission on
June 29, 2009, and incorporated herein by reference.)
10
.24*
2003 Amended and Restated Incentive Award Plan. (Filed as
Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
July 2, 2009, and incorporated herein by reference.)
10
.25
Fourth Amendment, dated July 29, 2009, to Industrial Lease
Agreement dated as of January 16, 1997 by and between the
Registrant and the Irvine Company. (Filed as Exhibit 10.29
to
Form 10-K,
as filed with the Securities and Exchange Commission on
April 5, 2010, and incorporated herein by reference.)
100
Table of Contents
Exhibit
10
.26*
Term Sheet for 2009 Incentive Award Plan Stock Option Award.
(Filed as Exhibit 10.8 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 13, 2009, and incorporated herein by reference.)
10
.27*
Term Sheet for 2009 Incentive Award Plan, Nonqualified Stock
Option Award Awarded to Non-Employee Directors. (Filed as
Exhibit 10.9 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 13, 2009, and incorporated herein by reference.)
10
.28*
Term Sheet for 2009 Incentive Award Plan, Restricted Stock
Award. (Filed as Exhibit 10.10 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 13, 2009, and incorporated herein by reference.)
10
.29#
License Agreement, dated November 6, 2009, by and between
the Registrant and Nippon Kayaku Co., Ltd. (Filed as
Exhibit 10.36 to
Form 10-K,
as filed with the Securities and Exchange Commission on
April 5, 2010, and incorporated herein by reference.)
10
.30#
License and Collaboration Agreement, dated February 2,
2010, by and between the Registrant and TopoTarget A/S. (Filed
as Exhibit 10.37 to
Form 10-K,
as filed with the Securities and Exchange Commission on
April 5, 2010, and incorporated herein by reference.)
10
.31
Asset Purchase Agreement, dated August 15, 2007, by and between
Cell Therapeutics, Inc. and Biogen Idec Inc. (Filed as Exhibit
10.1 to Cell Therapeutics, Inc.s Form 8-K, No. 001-12465,
as filed with the Securities and Exchange Commission on August
21, 2007, and incorporated herein by reference.)
10
.32
First Amendment to Asset Purchase Agreement, dated December 9,
2008, by and between Cell Therapeutics, Inc. and Biogen Idec
Inc. (Filed as Exhibit 10.48 to Cell Therapeutics, Inc.s
Form 10K, No. 001-12465, as filed with the Securities and
Exchange Commission on March 16, 2009, and incorporated herein
by reference.)
10
.33
Supply Agreement, dated December 21, 2007, by and between Cell
Therapeutics, Inc. and Biogen Idec Inc. (Filed as Exhibit 10.2
to Cell Therapeutics, Inc.s Form 8-K, No. 001-12465, as
filed with the Securities and Exchange Commission on December
31, 2007, and incorporated herein by reference.)
10
.34#+
First Amendment to Supply Agreement, dated December 15, 2008, by
and between Cell Therapeutics, Inc. and Biogen Idec Inc.
10
.35+
Security Agreement, dated December 15, 2008, by and between RIT
Oncology, LLC and Biogen Idec Inc.
16
.1
Letter from Kelly and Company to the Securities and Exchange
Commission, dated December 3, 2009. (Filed as
Exhibit 16.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
December 8, 2009, and incorporated herein by reference.)
21
+
Subsidiaries of Registrant.
23
.1+
Consent of Ernst & Young LLP, Independent Registered
Public Accounting Firm.
23
.2+
Consent of Kelly & Company, Independent Registered
Public Accounting Firm.
24
.1
Power of Attorney (included in the signature page.)
31
.1+
Certification of Principal Executive Officer, pursuant to
Rule 13a-14(a)/15d-14(a)
of the Securities Exchange Act of 1934.
31
.2+
Certification of Principal Financial Officer, pursuant to
Rule 13a-14(a)/15d-14(a)
of the Securities Exchange Act of 1934.
32
.1+
Certification of Principal Executive Officer, pursuant to
Rule 13a-14(b)/15d-14(b)
of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350.
32
.2+
Certification of Principal Financial Officer, pursuant to
Rule 13a-14(b)/15d-14(b)
of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350.
*
Indicates a management contract or compensatory plan or
arrangement.
#
Confidential portions omitted and filed separately with the U.S.
Securities and Exchange Commission pursuant to
Rule 24b-2
promulgated under the Securities Exchange Act of 1934, as
amended.
+
Filed herewith.
101
Table of Contents
By:
Chairman of the Board, Chief Executive
Officer, and President
(Principal Executive Officer)
March 9, 2011
Senior Vice President and Acting Chief
Financial Officer
(Principal Financial and Accounting Officer)
March 9, 2011
Director
March 9, 2011
Director
March 9, 2011
Director
March 9, 2011
Director
March 9, 2011
Director
March 9, 2011
102
Table of Contents
Table of Contents
Page
F-2
F-4
F-5
F-6
F-7
F-8
F-1
Table of Contents
F-2
Table of Contents
F-3
Table of Contents
December 31,
2010
2009
$
53,557
$
82,336
42,117
31,005
21,051
8,658
4,234
3,230
906
1,028
121,865
126,257
8,569
11,438
3,158
1,928
29,605
33,325
434
185
$
163,631
$
173,133
LIABILITIES AND STOCKHOLDERS EQUITY
$
38,704
$
16,606
3,313
3,360
12,300
8,300
3,904
6,635
5,101
4,598
63,322
39,499
40
69
25,495
24,943
298
298
89,155
64,809
160
419
51
49
384,757
369,482
(92
)
(70
)
(310,400
)
(261,556
)
74,476
108,324
$
163,631
$
173,133
F-4
Table of Contents
Year Ended December 31,
2010
2009
2008
$
60,921
$
28,225
$
8,049
13,192
9,800
20,676
$
74,113
$
38,025
$
28,725
17,439
8,148
1,193
48,550
33,607
15,156
57,301
21,058
26,683
3,720
3,720
158
4,700
127,010
66,533
47,890
(52,897
)
(28,508
)
(19,165
)
2,731
8,075
1,271
1,279
662
1,165
(48,887
)
(19,771
)
(16,729
)
43
(421
)
(5
)
(48,844
)
(20,192
)
(16,734
)
1,146
2,538
$
(48,844
)
$
(19,046
)
$
(14,196
)
$
(0.99
)
$
(0.48
)
$
(0.45
)
49,502,854
39,273,905
31,551,152
F-5
Table of Contents
Accumulated
Other
Total
Non-
Preferred Stock
Common Stock
Additional
Comprehensive
Accumulated
Stockholders
Controlling
Shares
Amount
Shares
Amount
Paid-In Capital
Income (Loss)
Deficit
Equity
Interest
Total
170
$
1,048
31,233,798
$
31
$
273,455
$
493
$
(228,313
)
$
46,713
$
$
46,713
(14,196
)
(14,196
)
(2,538
)
(16,734
)
(493
)
(493
)
(493
)
(146
)
(146
)
(146
)
(639
)
(14,196
)
(14,835
)
(2,538
)
(17,373
)
16,800
16,800
(102
)
(629
)
204,000
629
125,000
305
305
305
75,000
74
74
74
362,088
1
6,322
6,323
6,323
166,430
274
274
274
68
$
419
32,166,316
$
32
$
281,059
$
(146
)
$
(242,510
)
$
38,854
$
14,262
$
53,116
(19,046
)
(19,046
)
(1,146
)
(20,192
)
101
101
101
(25
)
(25
)
(25
)
76
(19,046
)
(18,970
)
(1,146
)
(20,116
)
15,187,715
15
81,779
81,794
81,794
2,067
2,067
(1,798
)
(1,798
)
(15,183
)
(16,981
)
432,200
1
1,166
1,167
1,167
(2,520
)
(2,520
)
(2,520
)
139,795
448
448
448
65,715
292
292
292
488,750
1
1,261
1,262
1,262
207,014
6,860
6,860
6,860
125,000
185
185
185
113,809
750
750
750
68
$
419
48,926,314
$
49
$
369,482
$
(70
)
$
(261,556
)
$
108,324
$
$
108,324
(48,844
)
(48,844
)
(48,844
)
(22
)
(22
)
(22
)
(22
)
(48,844
)
(48,866
)
48,866
(42
)
(259
)
84,000
259
136,121
598
598
598
168,283
554
554
554
1,135,340
1
3,073
3,074
3,074
257,270
7,687
7,687
7,687
751,956
1
3,104
3,105
3,105
26
$
160
51,459,284
$
51
$
384,757
$
(92
)
$
(310,400
)
$
74,476
$
$
74,476
F-6
Table of Contents
Year Ended December 31,
2010
2009
2008
$
(48,844
)
$
(20,192
)
$
(16,734
)
(12,300
)
(9,186
)
4,506
4,244
610
8,285
7,423
6,537
4,700
3,105
935
379
(2,731
)
(8,075
)
(1,271
)
359
50
11
(12,752
)
1,118
(4,811
)
(1,054
)
(1,389
)
(1,841
)
(134
)
(250
)
101
21,546
7,097
2,387
(47
)
404
1,845
503
1,149
995
15,958
(912
)
93
(22,544
)
(17,634
)
(8,005
)
32,391
25,783
(40,649
)
(13,056
)
(30,940
)
(10,202
)
(1,576
)
(673
)
(1,518
)
(9,834
)
(5,830
)
(24,776
)
95,810
3,074
1,262
1,167
554
292
41,500
(71
)
(2,520
)
(29
)
3,599
95,940
41,500
(28,779
)
72,476
8,719
82,336
9,860
1,141
$
53,557
$
82,336
$
9,860
$
27
$
45
$
5
$
17
$
28
$
36
$
451
$
$
$
259
$
$
F-7
Table of Contents
1.
Nature of
Business
2.
Summary
of Significant Accounting Policies
F-8
Table of Contents
F-9
Table of Contents
Fair Value Measurements
($ in 000s)
Level 1
Level 2
Level 3
Total
$
53,557
$
$
$
53,557
29,985
29,985
15,488
15,488
2,909
2,909
2,304
2,304
53,557
50,686
104,243
26
26
$
53,583
$
50,686
$
$
104,269
3,904
3,904
$
$
$
3,904
$
3,904
$
82,336
$
$
$
82,336
20,948
20,948
4,800
4,800
16,542
16,542
153
153
82,336
42,443
124,779
35
35
$
82,371
$
42,443
$
$
124,814
6,635
6,635
$
$
$
6,635
$
6,635
F-10
Table of Contents
Fair Value Measurements of
Common Stock Warrants
Using Significant
Unobservable Inputs (Level 3)
($ in 000s)
$
765
14,016
(394
)
323
(8,075
)
6,635
(788
)
(1,943
)
$
3,904
F-11
Table of Contents
F-12
Table of Contents
3 to 5 years
5 to 7 years
2 to 7 years
F-13
Table of Contents
F-14
Table of Contents
F-15
Table of Contents
Year Ended December 31,
2010
2009
2008
($ in 000s except per share data)
$
(48,844
)
$
(19,046
)
$
(14,196
)
$
(48,844
)
$
(19,046
)
$
(14,196
)
49,502,854
39,273,905
31,551,152
$
(0.99
)
(0.48
)
(0.45
)
Year Ended December 31,
2010
2009
2008
52,000
136,000
136,000
5,157,935
4,451,733
5,097,835
4,142,312
8,379,912
5,444,555
9,352,247
12,967,645
10,678,390
Year Ended December 31,
2010
2009
2008
($ in 000s)
$
2,484
$
3,192
$
3,925
5,801
4,231
2,612
$
8,285
$
7,423
$
6,537
F-16
Table of Contents
F-17
Table of Contents
3.
Commercial
and Drug Development Drug Products
F-18
Table of Contents
(In thousands)
$
23,100
14,100
4,700
(2,200
)
(902
)
$
12,500
(1,898
)
$
10,602
(8,798
)
$
30,000
F-19
Table of Contents
F-20
Table of Contents
F-21
Table of Contents
4.
Cash,
Cash Equivalents and Investments
F-22
Table of Contents
Gross
Gross
Estimated
Amortized
Unrealized
Unrealized
Fair
Marketable Security
Cost
Gains
Losses
Value
Cash
Current
Long Term
$
53,557
$
$
$
53,557
$
53,557
$
$
29,985
29,985
21,416
8,569
15,488
15,488
15,488
2,909
2,909
2,909
2,304
2,304
2,304
35
9
26
26
$
104,278
$
$
9
$
104,269
$
53,557
$
42,117
$
8,595
$
82,336
$
$
$
82,336
$
82,336
$
$
20,948
20,948
12,260
8,688
4,800
4,800
4,800
16,542
16,542
13,792
2,750
153
153
153
47
12
35
35
$
124,826
$
$
12
$
124,814
$
82,336
$
31,005
$
11,473
5.
Inventories
December 31,
2010
2009
($ in 000s)
$
962
$
280
3,272
2,950
$
4,234
$
3,230
F-23
Table of Contents
6.
Property
and Equipment
December 31,
2010
2009
($ in 000s)
$
1,299
$
1,195
892
724
889
697
2,742
1,255
146
146
5,968
4,017
(2,810
)
(2,089
)
$
3,158
$
1,928
7.
Accounts
Payable and Other Accrued Obligations
December 31,
2010
2009
($ in 000s)
$
8,734
$
5,611
14,474
388
4,026
1,911
2,000
1,176
1,874
213
350
851
7,246
6,456
$
38,704
$
16,606
F-24
Table of Contents
Data and
Distribution
Chargebacks
Rebates
Returns
Fees
$
851
388
$
1,176
$
213
862
14,721
3,540
3,029
(1,363
)
(635
)
(2,716
)
(1,368
)
$
350
$
14,474
$
2,000
$
1,874
$
1,439
$
$
3,144
$
3,454
469
95
1,212
(4,042
)
(81
)
(2,063
)
(999
)
$
851
$
388
$
1,176
$
213
8.
Income
Taxes
For the Years Ended December 31,
2010
2009
2008
($ in 000s)
$
(128
)
$
78
82
343
$
5
3
$
(43
)
$
421
$
5
$
(43
)
$
421
$
5
F-25
Table of Contents
2010
2009
2008
($ in 000s)
$
(16,658
)
$
(6,697
)
$
(6,086
)
(2,082
)
(981
)
(1,039
)
32,236
8,097
(406
)
(1,644
)
(928
)
(2,745
)
(432
)
1,397
1,533
1,548
(737
)
(15,150
)
3,595
7,562
$
(43
)
$
421
$
5
2010
2009
($ in 000s)
$
36,279
$
58,597
7,044
10,230
2,535
2,641
9,611
12,839
14,451
1,466
1,914
1,211
(71,834
)
(86,984
)
$
$
F-26
Table of Contents
2010
($ in 000s)
1,310
387
1,697
9.
Commitments
and Contingencies
F-27
Table of Contents
Operating
Capital
Leases
Leases
($ in 000s)
$
568
$
45
601
45
632
582
570
292
$
3,245
$
90
F-28
Table of Contents
10.
Stockholders
Equity
F-29
Table of Contents
F-30
Table of Contents
March 2008: 125,000 shares with a fair value of $305,000.
March 2009: 125,000 shares with a fair value of $185,000.
F-31
Table of Contents
52,000
8,397,094
4,192,312
12,641,406
F-32
Table of Contents
Weighted
Number of
Average
Shares
Exercise Price
9,652,051
$
6.51
50,000
1.79
(157,450
)
6.62
(4,100,046
)
5.43
5,444,555
7.28
6,931,607
6.55
(95,238
)
6.62
(1,252,005
)
10.03
11,028,919
6.52
275,000
5.59
(180,000
)
5.16
(6,931,607
)
6.55
4,192,312
$
6.45
4,142,312
$
6.48
Weighted-
Average
Remaining
Weighted-
Weighted-
Number
Contractual
Average
Number
Average
Outstanding
Life (Years)
Exercise Price
Exercisable
Exercise Price
50,000
2.3
$
1.79
50,000
$
1.79
75,000
4.5
$
3.82
25,000
$
3.82
120,000
2.7
$
5.13
120,000
$
5.13
3,947,312
0.9
$
6.60
3,947,312
$
6.60
4,192,312
4,142,312
11.
Share-Based
Compensation
F-33
Table of Contents
Year Ended December 31,
2010
2009
2008
4.93
5.0
5.0
1.04% - 2.75%
2.27
%
2.66
%
70.7%
72.4
%
65.9
%
0%
0
%
0
%
F-34
Table of Contents
Weighted-
Weighted-
Average
Average
Remaining
Aggregate
Number of
Exercise
Contractual
Intrinsic
Shares
Price
Term (Years)
Value
6,482,260
$
5.91
2,148,000
2.10
(294,521
)
4.38
(1,219,967
)
6.08
7,115,772
4.80
4,141,000
4.70
(488,750
)
2.58
(551,130
)
5.35
(2,165,372
)
7.75
(106,275
)
4.62
7,945,245
4.04
3,350,070
4.26
(1,135,340
)
3.21
(1,347,786
)
4.04
(415,095
)
5.45
8,397,094
$
4.17
7.4
$
22,747,151
5,157,935
$
4.12
6.6
$
14,250,135
3,239,159
$
4.26
8.7
$
8,492,016
Weighted-
Average
Weighted-
Weighted-
Remaining
Average
Average
Number
Contractual
Exercise
Number
Exercise
Outstanding
Life (Years)
Price
Exercisable
Price
110,000
2.6
$
1.09
104,176
$
1.08
1,180,665
6.7
$
1.61
810,750
$
1.64
1,019,542
7.2
$
2.70
929,224
$
2.65
4,353,942
7.8
$
4.45
2,206,612
$
4.67
1,732,945
7.4
$
6.28
1,107,173
$
6.35
8,397,094
5,157,935
F-35
Table of Contents
Number of
Weighted Average
Restricted
Grant Date
Shares
Fair Value
277,500
$
5.03
372,500
1.65
(272,500
)
3.17
377,500
3.04
262,500
1.86
(284,375
)
2.82
(2,500
)
5.45
353,125
2.32
390,000
4.48
(261,500
)
3.58
(122,125
)
1.87
359,500
$
3.96
F-36
Table of Contents
12.
Quarterly
Financial Data
(Unaudited)
Quarter Ended
March 31
June 30
September 30
December 31
$
11,089
$
12,343
$
16,735
$
33,946
$
(40,492
)
$
(12,266
)
$
(6,880
)
$
6,742
$
(39,014
)
$
(9,676
)
$
(4,594
)
$
4,440
$
(0.80
)
$
(0.20
)
$
(0.09
)
$
0.09
$
(0.80
)
$
(0.20
)
$
(0.09
)
$
0.08
$
14,163
$
8,141
$
7,101
$
8,620
$
(626
)
$
(9,831
)
$
(8,761
)
$
(9,290
)
$
1,146
$
$
$
$
115
$
(29,819
)
$
474
$
10,184
$
0.00
$
(0.87
)
$
0.01
$
0.21
$
0.00
$
(0.87
)
$
(0.07
)
$
0.20
F-37
Table of Contents
13.
Subsequent
Events
F-38
Table of Contents
Exhibit
2
.1
Asset Purchase Agreement by and between the Registrant, Targent
Inc. and Certain Stockholders of Targent, Inc., dated March 17
2006. (Filed as Exhibit 2.1 to
Form 10-K/A,
Amendment No. 1, as filed with the Securities and Exchange
Commission on May 1, 2006, and incorporated herein by
reference.)
2
.2
Asset Purchase Agreement by and between the Registrant and Par
Pharmaceutical, Inc., dated as of May 6, 2008. (Filed as
Exhibit 2.1 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 11, 2008, and incorporated herein by reference.)
2
.3#
Purchase and Formation Agreement, dated as of November 26,
2008, by and among the Registrant, Cell Therapeutics, Inc. and
RIT Oncology, LLC. (Filed as Exhibit 2.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
December 19, 2008, and incorporated herein by reference.)
2
.4#
Limited Liability Company Interest Assignment Agreement, dated
as of March 15, 2009, by and between the Registrant and
Cell Therapeutics, Inc. (Filed as Exhibit 2.1 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
May 15, 2009, and incorporated herein by reference.)
3
.1+
Amended Certificate of Incorporation, as filed.
3
.2
Form of Amended and Restated Bylaws of the Registrant. (Filed as
Exhibit 3.1 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 16, 2004, and incorporated herein by reference.)
4
.1
Rights Agreement, dated as of December 13, 2010, between
the Registrant and ComputerShare Trust Company, N.A.
(formerly U.S. Stock Transfer Corporation), as Rights Agent,
which includes as Exhibit A thereto the form of Certificate
of Designation for the Series B Junior Participating
Preferred Stock, as Exhibit B thereto the Form of Rights
Certificate and as Exhibit C thereto a Summary of Rights of
Stockholder Rights Plan. (Filed as Exhibit 4.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
December 13, 2010, and incorporated herein by reference.)
4
.2
Registration Rights Agreement, dated as of September 26,
2003, by and among the Registrant and the persons listed on
Schedule 1 attached thereto. (Filed as Exhibit 4.4 to
Form 8-K,
as filed with the Securities and Exchange Commission on
September 30, 2003, and incorporated herein by reference.)
4
.3
Investor Rights Agreement, dated as of April 20, 2004, by
and among the Registrant and the persons listed on
Schedule 1 attached thereto. (Filed as Exhibit 4.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
April 23, 2004, and incorporated herein by reference.)
4
.4
Form of Warrant, dated September 15, 2005. (Filed as
Exhibit 4.35 to
Form 10-K,
as filed with the Securities and Exchange Commission on
March 15, 2006, and incorporated herein by reference.)
4
.5
Registration Rights Agreement, dated as of April 20, 2006,
by and among the Registrant and Targent, Inc. (Filed as
Exhibit 4.2 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
May 8, 2006, and incorporated herein by reference.)
10
.1+
Sublease Agreement, dated as of December 2, 2010, between
the Registrant and Del Webb Corporation.
10
.2
Industrial Lease Agreement, dated as of January 16, 1997,
between the Registrant and the Irvine Company. (Filed as
Exhibit 10.11 to
Form 10-KSB,
as filed with the Securities and Exchange Commission on
March 31, 1997, and incorporated herein by reference.)
10
.3
Preferred Stock and Warrant Purchase Agreement, dated as of
September 26, 2003, by and among the Registrant and the
purchasers listed on Schedule 1 attached thereto. (Filed as
Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
September 30, 2003, and incorporated herein by reference.)
10
.4
First Amendment, dated March 25, 2004, to Industrial Lease
Agreement dated as of January 16, 1997 by and between the
Registrant and the Irvine Company. (Filed as Exhibit 10.1
to
Form 10-Q,
as filed with the Securities and Exchange Commission on
May 17, 2004, and incorporated herein by reference.)
10
.5
Common Stock and Warrant Purchase Agreement, dated as of
April 20, 2004, by and among the Registrant and the
purchasers listed on Schedule 1 attached thereto. (Filed as
Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
April 23, 2004, and incorporated herein by reference.)
10
.6#+
Amended and Restated License and Collaboration Agreement by and
between the Registrant and Aeterna Zentaris GmbH (formerly
Zentaris GmbH), dated as of November 5, 2010.
Table of Contents
Exhibit
10
.7*
Form of Stock Option Agreement under the 2003 Amended and
Restated Incentive Award Plan. (Filed as Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
December 17, 2004, and incorporated herein by reference.)
10
.8#
License Agreement by and between the Registrant and Chicago
Labs, Inc. (Filed as Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
February 25, 2005, and incorporated herein by reference.)
10
.9*
Form of Non-Employee Director Stock Option Agreement under the
2003 Amended and Restated Incentive Award Plan. (Filed as
Exhibit 10.5 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
May 10, 2005, and incorporated herein by reference.)
10
.10*
Restricted Stock Award Grant Notice and Restricted Stock Award
Agreement under the 2003 Amended and Restated Incentive Award
Plan. (Filed as Exhibit 10.44 to
Form 10-K,
as filed with the Securities and Exchange Commission on
March 15, 2006, and incorporated herein by reference.)
10
.11#
License Agreement between the Registrant and Merck Eprova AG,
dated May 23, 2006. (Filed as Exhibit 10.1 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 8, 2006, and incorporated herein by reference.)
10
.12*
Third Amended and Restated 1997 Stock Incentive Plan. (Filed as
Exhibit 10.2 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
November 3, 2006, and incorporated herein by reference.)
10
.13#
Agreement by and between the Registrant and Glaxo Group Limited
(d/b/a GlaxoSmithKline), dated November 10, 2006. (Filed as
Exhibit 10.38 to
Form 10-K,
as filed with the Securities and Exchange Commission on
March 14, 2007, and incorporated herein by reference.)
10
.14*
2003 Amended and Restated Incentive Award Plan. (Filed as
Exhibit 10.3 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 9, 2007, and incorporated herein by reference.)
10
.15#
License Agreement by and between the Registrant and Indena,
S.p.A., dated July 17, 2007. (Filed as Exhibit 10.4 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
November 9, 2007, and incorporated herein by reference.)
10
.16*
Executive Employment Agreement by and between the Registrant and
Rajesh C. Shrotriya, M.D., entered into June 20, 2008
and effective as of January 2, 2008. (Filed as
Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
June 26, 2008, and incorporated herein by reference.)
10
.17*
Consulting Agreement by and between the Registrant and Luigi
Lenaz, M.D., effective as of July 1, 2008. (Filed as
Exhibit 10.2 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 11, 2008, and incorporated herein by reference.)
10
.18*+
Amendment Number One to Consulting Agreement by and between the
Registrant and Luigi Lenaz, M.D., effective as of
March 16, 2010.
10
.19*+
Amendment Number Two to Consulting Agreement by and between the
Registrant and Luigi Lenaz, M.D., effective as of
July 2, 2010.
10
.20*
Form of Indemnity Agreement of the Registrant. (Filed as
Exhibit 10.32 to
Form 10-K,
as filed with the Securities and Exchange Commission on
March 31, 2009, and incorporated herein by reference.)
10
.21#
License, Development, Supply and Distribution Agreement, dated
October 28, 2008, by and among the Registrant, Allergan
Sales, LLC, Allergan USA, Inc. and Allergan, Inc. (Filed as
Exhibit 10.33 to
Form 10-K,
as filed with the Securities and Exchange Commission on
March 31, 2009, and incorporated herein by reference.)
10
.22*
2009 Employee Stock Purchase Plan. (Filed as Exhibit 99.1
to
Form S-8,
as filed with the Securities and Exchange Commission on
June 29, 2009, and incorporated herein by reference.)
10
.23*
2009 Incentive Award Plan. (Filed as Exhibit 99.2 to
Form S-8,
as filed with the Securities and Exchange Commission on
June 29, 2009, and incorporated herein by reference.)
10
.24*
2003 Amended and Restated Incentive Award Plan. (Filed as
Exhibit 10.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
July 2, 2009, and incorporated herein by reference.)
10
.25
Fourth Amendment, dated July 29, 2009, to Industrial Lease
Agreement dated as of January 16, 1997 by and between the
Registrant and the Irvine Company. (Filed as Exhibit 10.29
to
Form 10-K,
as filed with the Securities and Exchange Commission on
April 5, 2010, and incorporated herein by reference.)
Table of Contents
Exhibit
10
.26*
Term Sheet for 2009 Incentive Award Plan Stock Option Award.
(Filed as Exhibit 10.8 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 13, 2009, and incorporated herein by reference.)
10
.27*
Term Sheet for 2009 Incentive Award Plan, Nonqualified Stock
Option Award Awarded to Non-Employee Directors. (Filed as
Exhibit 10.9 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 13, 2009, and incorporated herein by reference.)
10
.28*
Term Sheet for 2009 Incentive Award Plan, Restricted Stock
Award. (Filed as Exhibit 10.10 to
Form 10-Q,
as filed with the Securities and Exchange Commission on
August 13, 2009, and incorporated herein by reference.)
10
.29#
License Agreement, dated November 6, 2009, by and between
the Registrant and Nippon Kayaku Co., Ltd. (Filed as
Exhibit 10.36 to
Form 10-K,
as filed with the Securities and Exchange Commission on
April 5, 2010, and incorporated herein by reference.)
10
.30#
License and Collaboration Agreement, dated February 2,
2010, by and between the Registrant and TopoTarget A/S. (Filed
as Exhibit 10.37 to
Form 10-K,
as filed with the Securities and Exchange Commission on
April 5, 2010, and incorporated herein by reference.)
10
.31
Asset Purchase Agreement, dated August 15, 2007, by and between
Cell Therapeutics, Inc. and Biogen Idec Inc. (Filed as Exhibit
10.1 to Cell Therapeutics, Inc.s Form 8-K, No. 001-12465,
as filed with the Securities and Exchange Commission on August
21, 2007, and incorporated herein by reference.)
10
.32
First Amendment to Asset Purchase Agreement, dated December 9,
2008, by and between Cell Therapeutics, Inc. and Biogen Idec
Inc. (Filed as Exhibit 10.48 to Cell Therapeutics, Inc.s
Form 10K, No. 001-12465, as filed with the Securities and
Exchange Commission on March 16, 2009, and incorporated herein
by reference.)
10
.33
Supply Agreement, dated December 21, 2007, by and between Cell
Therapeutics, Inc. and Biogen Idec Inc. (Filed as Exhibit 10.2
to Cell Therapeutics, Inc.s Form 8-K, No. 001-12465, as
filed with the Securities and Exchange Commission on December
31, 2007, and incorporated herein by reference.)
10
.34#+
First Amendment to Supply Agreement, dated December 15, 2008, by
and between Cell Therapeutics, Inc. and Biogen Idec Inc.
10
.35+
Security Agreement, dated December 15, 2008, by and between RIT
Oncology, LLC and Biogen Idec Inc.
16
.1
Letter from Kelly and Company to the Securities and Exchange
Commission, dated December 3, 2009. (Filed as
Exhibit 16.1 to
Form 8-K,
as filed with the Securities and Exchange Commission on
December 8, 2009, and incorporated herein by reference.)
21
+
Subsidiaries of Registrant.
23
.1+
Consent of Ernst & Young LLP, Independent Registered
Public Accounting Firm.
23
.2+
Consent of Kelly & Company, Independent Registered
Public Accounting Firm.
24
.1
Power of Attorney (included in the signature page.)
31
.1+
Certification of Principal Executive Officer, pursuant to
Rule 13a-14(a)/15d-14(a)
of the Securities Exchange Act of 1934.
31
.2+
Certification of Principal Financial Officer, pursuant to
Rule 13a-14(a)/15d-14(a)
of the Securities Exchange Act of 1934.
32
.1+
Certification of Principal Executive Officer, pursuant to
Rule 13a-14(b)/15d-14(b)
of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350.
32
.2+
Certification of Principal Financial Officer, pursuant to
Rule 13a-14(b)/15d-14(b)
of the Securities Exchange Act of 1934 and 18 U.S.C.
Section 1350.
*
Indicates a management contract or compensatory plan or
arrangement.
#
Confidential portions omitted and filed separately with the U.S.
Securities and Exchange Commission pursuant to
Rule 24b-2
promulgated under the Securities Exchange Act of 1934, as
amended.
+
Filed herewith.
|
STATE OF DELAWARE | |
|
SECRETARY OF STATE | |
|
DIVISION OF CORPORATIONS | |
|
FILED 09:00 AM 05/07/1997 | |
|
971149762 2742853 |
/s/ Matthew P. Thullen | ||||
Matthew P. Thullen, Esq. | ||||
2
STATE OF DELAWARE
|
||
SECRETARY OF STATE
|
||
DIVISION OF CORPORATIONS
|
||
FILED 02:30 PM 06/18/1997
|
||
971200917 2742853
|
A-2
A-3
A-4
A-5
NEOTHERAPEUTICS, INC.,
a Colorado corporation |
||||
/s/ Alvin J. Glasky | ||||
Alvin J. Glasky, President and Chief Executive Officer | ||||
ATTEST:
|
||||
/s/ Rosalie H. Glasky | ||||
Rosalie H. Glasky, Secretary | ||||
NEOTHERAPEUTICS, INC.,
a Delaware corporation |
||||
/s/ Alvin J. Glasky | ||||
Alvin J. Glasky, | ||||
President and Chief Executive Officer | ||||
ATTEST:
|
||||
/s/ Rosalie H. Glasky | ||||
Rosalie H. Glasky, Secretary | ||||
A-6
/s/ Rosalie Glasky | ||||
Rosalie Glasky, Secretary | ||||
|
STATE OF DELAWARE
SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 01/29/1999 991037228 2742853 |
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
-11-
-12-
-13-
-14-
-15-
-16-
-17-
-18-
NEOTHERAPEUTICS, INC.
|
||||
By: | /s/ Samuel Gulko | |||
Samuel Gulko, Chief Financial Officer | ||||
-19-
Date to Effect Conversion | ||||
Number of shares of Preferred Stock to be Converted | ||||
Number of shares of Common Stock to be Issued | ||||
Applicable Conversion Price | ||||
Signature | ||||
Name | ||||
Address | ||||
|
STATE OF DELAWARE | |
|
SECRETARY OF STATE | |
|
DIVISION OF CORPORATIONS | |
|
FILED 09:00 AM 12/18/2000 | |
|
001634048 2742853 |
2
3
4
5
/s/ Alvin J. Glasky | ||||
Alvin J. Glasky, Ph.D. | ||||
Chief Executive Officer | ||||
ATTEST : |
||||
/s/ Samuel Gulko | ||||
Samuel Gulko | ||||
Chief Financial Officer |
NeoTherapeutics, Inc.,
a Delaware corporation |
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By: | /s/ Samuel Gulko | |||
Samuel Gulko | ||||
Senior Vice President Finance,
Chief Financial Officer, Secretary and Treasurer |
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STATE OF DELAWARE | |
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SECRETARY OF STATE | |
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DIVISION OF CORPORATIONS | |
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FILED 09:00 AM 04/06/2001 | |
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010170629 2742853 |
STATE OF DELAWARE |
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SECRETARY OF STATE |
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DIVISION OF CORPORATIONS |
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FILED 09:00 AM 06/27/2001 |
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010310057 2742853 |
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NEOTHERAPEUTICS, INC.
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By: | /s/ Samuel Gulko | |||
Samuel Gulko, Chief Financial Officer | ||||
Conversion calculations: |
Date to Effect Conversion
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Number of shares of Preferred Stock to be Converted
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Number of shares of Common Stock to be Issued
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Applicable Conversion Price
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Signature | ||||
Name | ||||
Address | ||||
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STATE OF DELAWARE | |
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SECRETARY OF STATE | |
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DIVISION OF CORPORATIONS | |
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FILED 09:00 AM 08/31/2001 | |
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010433982 2742853 |
NEOTHERAPEUTICS, INC.
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By: | /s/ Samuel Gulko | |||
Samuel Gulko
Senior Vice President Finance, Chief Financial Officer, Secretary and Treasurer |
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NeoTherapeutics, Inc.
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By: | /s/ Alvin J. Glasky | |||
Alvin J. Glasky | ||||
Chief Executive Officer | ||||
By: | /s/ Samuel Gulko | |||
Samuel Gulko | ||||
Senior Vice President Finance,
Chief Financial Officer, Secretary and Treasurer |
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Advanced ImmunoTherapeutics, Inc.
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By: | /s/ Alvin J. Glasky | |||
Alvin J. Glasky | ||||
Chief Executive Officer | ||||
By: | /s/ Samuel Gulko | |||
Samuel Gulko | ||||
Senior Vice President Finance,
Chief Financial Officer, Secretary and Treasurer |
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STATE OF DELAWARE | |
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SECRETARY OF STATE | |
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DIVISION OF CORPORATIONS | |
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FILED 01:45 PM 09/05/2002 | |
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020556295 2742853 |
NEOTHERAPEUTICS, INC., a Delaware corporation |
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By: | /s/ Rajesh C. Shrotriya, M.D. | |||
Rajesh C. Shrotriya, M.D. | ||||
Chairman of the Board, Chief
Executive Officer and President |
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STATE OF DELAWARE | |
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SECRETARY OF STATE | |
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DIVISION OF CORPORATIONS | |
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FILED 09:00 AM 12/10/2002 | |
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020757696 2742853 |
NEOTHERAPEUTICS, INC. |
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By: | /s/ Rajesh C. Shrotriya | |||
Rajesh C. Shrotriya, M.D. | ||||
Chairman, Chief Executive Officer and President |
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State of Delaware | |
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Secretary of State | |
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Division of Corporations | |
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Delivered 08:36 AM 05/07/2003 | |
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FILED 08:36 AM 05/07/2003 | |
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SRV 030294814 2742853 FILE |
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/s/ Rajesh G. Shrotriya | ||||
Name: | Rajesh G. Shrotriya, M.D. | |||
Title: | Chairman, Chief Executive Officer and President | |||
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Conversion Information: |
[NAME OF HOLDER]
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By: | ||||
Name: | ||||
Title: | ||||
Address of Holder: | ||||
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Issue Common Stock to (if different than above): | ||||
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Name: | |||
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Address: | |||
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Name of Holder
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By: | ||||
Name: | ||||
Title: | ||||
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State of Delaware | |
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Secretary of State | |
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Division of Corporations Delivered 02:43 PM 05/13/2003 | |
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FILED 02.43 PM 05/13/2003 | |
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SRV 030309508 2742853 FILE |
SPECTRUM PHARMACEUTICALS, INC.
a Delaware corporation |
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By: | /s/ Rajesh C. Shrotriya | |||
Rajesh C. Shrotriya, M.D. | ||||
Chairman, Chief Executive Officer and President | ||||
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State of Delaware | |
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Secretary of State | |
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Division of Corporations | |
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Delivered 11:17 AM 09/26/2003 | |
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FILED 11:17 AM 09/26/2003 | |
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SRV 030620403 2742853 FILE |
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(i) | Any amendment, alteration or repeal of any provision of the Certificate of Incorporation or the Corporations Bylaws which adversely affects the terms of the Series E Preferred Stock or the relative rights, preferences and privileges of the Holders of the Series E Preferred Stock as such holders; | ||
(ii) | Any amendments or changes to the Rights Plan or the adoption of any other similar plans or arrangements, provided that nothing herein shall be deemed to restrict the right of the Corporation to redeem all, but not less than all, of the outstanding Rights (as defined in the Rights Plan (as defined in Section 5(b) hereof)) or otherwise terminate the Rights Plan; | ||
(iii) | The offer, sale, designation or issuance by the Corporation or any of its Subsidiaries of any equity or debt security senior to or pari passu with the Series E Preferred Stock in any respect; | ||
(iv) | The sale or issuance of any shares of Common Stock, any warrant, option, subscription or purchase right with respect to shares of Common Stock, any security convertible into, exchangeable for, or otherwise entitling the holder thereof to acquire shares of Common Stock, or any warrant, option, subscription or purchase right with respect to any such convertible, exchangeable or other security at a price below the Conversion Value (as hereinafter defined), other than (A) options, warrants, and other rights outstanding on the date hereof to acquire, directly or indirectly, Common Stock, and the Common Stock acquirable thereunder (including, without limitation, shares of Common Stock acquirable upon conversion of, or issuable as dividends on, the Series D Preferred Stock), and (B) options granted hereafter to any employee, officer, Director or consultant pursuant to any plan approved by stockholders for the benefit of employees, officers, Directors and consultants (Incentive Options), and the Common Stock acquirable thereunder, and (C) awards presently outstanding or hereafter awarded under the Sellers employee stock purchase plan effective as of January 26, 2001 (the ESPP); | ||
(v) | The entering into by the Corporation or any subsidiary of any bank or other non-trade indebtedness for borrowed money; | ||
(vi) | The granting or making by the Corporation or any of its Subsidiaries of any mortgage or pledge, or the assumption or suffering to exist on, or the imposition on, any of its material properties or assets any Lien; |
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(vii) | The liquidation, dissolution or winding-up of the Corporation or any of its subsidiaries or any merger or consolidation of the Corporation or any of its subsidiaries with or into another entity or the sale, conveyance or other disposition of all, or substantially all, the assets, property or business of the Corporation or any of its subsidiaries; | ||
(viii) | The reorganization, recapitalization, sale, conveyance, or other disposition of or encumbrance of all or substantially all of the property or business of the Corporation or any of its Subsidiaries or the merger into or consolidation with any other corporation (other than a wholly owned subsidiary corporation) or effect any transaction or series of related transactions in which, in any case, more than 20% of the voting power of the corporation is disposed of, calculated on a post-transaction basis; | ||
(ix) | The redemption, purchase, repurchase or other acquisition, directly or indirectly, of any shares of capital stock of the Corporation or any of its Subsidiaries or any option, warrant or other right to purchase or acquire any such shares; | ||
(x) | The declaration or payment of any dividend or other distribution (whether cash, stock or property) with respect to the capital stock of the Corporation, other than the Series E Preferred Stock and the Series D Preferred Stock; and | ||
(xi) | The taking of any action by the Corporation with the primary intent of causing the Common Stock to be delisted from any securities exchange or quotation system upon which the Common Stock is then listed. |
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(A) | The number of shares of Series E Preferred Stock to be redeemed; and | ||
(B) | the address to which the payment of the Product-Triggered Redemption Price shall be delivered, or, at the election of the Holder, wire instructions with respect to the account to which payment of the Product-Triggered Redemption Price shall be required. |
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/s/ Rajesh C. Shrotriya, M.D. | ||||
Rajesh C. Shrotriya, M.D. | ||||
Chairman, President and Chief Executive Officer |
[NAME OF HOLDER]
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By: | ||||
Name: | ||||
Title: | ||||
Address of Holder: | ||||
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Issue Common Stock to (if different than above): | ||||
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Name: | |||
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Address: | |||
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Name of Holder
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By: | ||||
Name: | ||||
Title: | ||||
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State of Delaware | |
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Secretary of State | |
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Division of Corporations | |
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Delivered 12:45 PM 07/07/2006 | |
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FILED 12:45 PM 07/07/2006 | |
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SRV 060647116 2742853 FILE |
The aggregate number of shares of all classes of stock which the Corporation shall have authority to issue is 105,000,000 shares, consisting of (a) 100,000,000 shares of common stock, $.001 par value per share (the Common Stock), and (b) 5,000,000 shares of preferred stock, $.001 par value per share (the Preferred Stock). |
Dated: July 6, 2006
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SPECTRUM PHARMACEUTICALS, INC.
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By: | /s/ Rajesh C. Shrotriya | |||
Rajesh C. Shrotriya, M.D. | ||||
Title: | Chief Executive Officer and President |
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State of Delaware | |
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Secretary of State | |
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Division of Corporations | |
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Delivered 12:45 PM 07/07/2006 | |
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FILED 12:50 PM 07/07/2006 | |
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SRV 060647118 2742853 FILE |
Dated: July 6,
2006
SPECTRUM PHARMACEUTICALS, INC. |
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By: | /s/ Rajesh C. Shrotriva | ||||
Rajesh C. Shrotriva, M.D. | |||||
Title: | Chief Executive Officer and President | ||||
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State of Delaware
Secretary of State |
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Division of Corporations | |||||||
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Delivered 02:37 PM 12/13/2010 | |||||||
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FILED 02:37 PM 12/13/2010 | |||||||
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SRV 101179514 - 2742853 FILE |
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/s/ Shyam Kumaria | ||||
Name: | Shyam Kumaria | |||
Title: | Senior Vice President, Finance |
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State of Delaware
Secretary of State |
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Division of Corporations | |||||||
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Delivered 02:37 PM 12/13/2010 | |||||||
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FILED 02:38 PM 12/13/2010 | |||||||
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SRV 101179534 - 2742853 FILE |
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SPECTRUM PHARMACEUTICALS, INC.
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By: | /s/ Shyam Kumaria | |||
Name: | Shyam Kumaria | |||
Title: | Senior Vice President, Finance | |||
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Section | Page | |||||
1.
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Sublease of Sublease Premises | 3 | ||||
2.
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Term of Sublease | 3 | ||||
3.
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Security Deposit | 4 | ||||
4.
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Base Rent | 4 | ||||
5.
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Additional Services and Charges | 5 | ||||
6.
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Use | 5 | ||||
7.
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Condition of Sublease Premises | 5 | ||||
8.
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Assignments and Subletting | 5 | ||||
9.
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Alterations | 5 | ||||
10.
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Master Lease Terms Apply | 5 | ||||
11.
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Insurance: Casualty | 6 | ||||
12.
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Notice | 7 | ||||
13.
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Termination | 8 | ||||
14.
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Access & Security | 8 | ||||
15.
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Services Furnished by Sublessor | 8 | ||||
16.
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Parking | 9 | ||||
17.
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Entry by Sublessor | 9 | ||||
18.
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Signage | 10 | ||||
19.
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Indemnification | 10 | ||||
20.
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Environmental Matters | 10 | ||||
21.
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Americans with Disabilities Act | 10 | ||||
22.
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Miscellaneous | 11 |
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Exhibit A: | Floor Plan | ||||
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Exhibit B: | Master Lease | ||||
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Exhibit C: | Rules and Regulations |
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1. | Sublease of Sublease Premises . Sublessor hereby subleases Suite 240, totaling approximately 4,687 rentable square feet on the second floor (the Sublease Premises) of the Master Lease Premises to Sublessee, and Sublessee hereby takes and subleases the Sublease Premises from Sublessor. Sublessee acknowledges that it has inspected the Sublease Premises and accepts it AS-IS. |
a. | Subordinate to the prior rights of other existing sublessees in the Building, and subject to the approval by the Master Lessor, if required under the Master Lease, when Suite 220 on the second floor of the Building becomes available (Expansion Space), Sublessor shall provide Sublessee with written notice (Expansion Space Notice) of the availability of the Expansion Space. The Expansion Space Notice shall provide (i) the rentable and useable feet of the Expansion Space, (ii) Sublessors required rent for the Expansion Space, (iv) the security deposit required for the Expansion Space, if any, and (v) the date Sublessee can occupy the Expansion Space (Available Occupancy Date). | ||
b. | Sublessee shall have until 5:00 pm Pacific time on the date that is five business (5) days after Sublessees receipt of the Expansion Space Notice (Expansion Space Acceptance Period) to accept the Expansion Space upon the same terms and conditions of this Sublease except as modified by the Expansion Space Notice. In the event the Sublessee provides Sublessor with Sublessees written acceptance of the Expansion Space prior to |
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the expiration of the Expansion Space Acceptance Period, the Expansion Space shall become part of the Sublease Premises on the Available Occupancy Date, in which case the Base Rent shall be increased by the amount in the Expansion Space Notice and the Security Deposit shall be increased by the amount of the Expansion Space Notice, if any. Sublessees failure to provide acceptance prior to the expiration of the Expansion Space Acceptance Period shall constitute a rejection of the Expansion Space and Sublessee shall have no further rights in the Expansion Space. |
2. | Term of Sublease . The term of this Sublease shall commence on December 3, 2010, (Commencement Date) and terminate on April 30, 2014 (Initial Term) unless terminated earlier in accordance with this Sublease. |
a. | Notwithstanding anything to the contrary contained in this Sublease, Sublessee shall be permitted access to the Sublease Premises prior to the Commencement Date effective on the date this Sublease is executed by both Sublessor and Sublessee (Early Occupancy Fixturization Period) for the sole purpose of the installation of furniture, fixtures, and equipment; provided, however, during the Early Occupancy Fixturization Period, Sublessee shall be subject to all the terms and conditions of this Sublease except for the obligation to pay Base Rent which shall begin on the Commencement Date. | ||
b. | Prior to entry upon the Sublease Premises, Sublessee shall provide Sublessor with proof of insurance required by this Sublease which shall be effective during the Early Occupancy Fixturization Period as well as the term of the Sublease. |
3. | Security Deposit . Sublessee shall deposit upon the mutual execution of this Sublease (i) one month Base Rent in advance equal to Six Thousand Six Hundred Sixty-Three and 00/100 Dollars ($6,663.00), which shall be applied to the third month of the Initial Term, and (ii) a security deposit (Security Deposit) equal to Nine Thousand Six Hundred Eight and 35/100 Dollars ($9,608.35). If Sublessee fails to pay rent or other charges due hereunder or otherwise defaults with respect to any provision of the Sublease, Sublessor may use, apply, or retain all or any portion of said Security Deposit for the payment of any rent or other charge, or to compensate Sublessor for any loss or damage which Sublessor may suffer thereby. If Sublessor uses or applies all or any portion of said Security Deposit, Sublessee shall within thirty (30) days after receipt of written demand deposit to the full amount stated above. Sublessees failure to do so shall constitute a material breach of this Sublease. At the expiration of this Sublease and upon proper vacation of the premises by Sublessee, any unused portion of the Security Deposit shall be returned to Sublessee within ten (10) business days, providing the Sublessee has performed all of its obligations hereunder and provided an address for deposit return. Sublessee shall not be entitled to interest on the Security Deposit. | ||
4. | Base Rent . | ||
Sublessee covenants and agrees to pay Sublessor as full service monthly rent, including utilities, taxes and insurance (collectively, Base Rent), for the Sublease Premises during the term of this Sublease as follows: |
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5. | Additional Services and Charges . In addition to the Base Rent, Sublessee agrees to pay Sublessor, on an as used basis, for business services that Sublessor may furnish Sublessee. The business services may include, but not limited to, additional telephone service, mail and courier service. Charges for these additional business services shall be defined as additional rent for purposes of exercising Sublessors remedies against Sublessee should Sublessee default on or breach this Sublease. Such business services will be provided in accordance with established/posted rate sheet and such charges will billed every thirty (30) days and due within thirty (30) days of receipt. Sublessee is responsible for the payment of all reasonable telephone and data installation charges and any additional reasonable charges associated with same. |
a. | As of January 1, 2012, Sublessee shall be responsible for paying its proportionate share of increases in Building Operating Expenses (as defined below) directly attributable to the operation and maintenance of the building above a 2011 base year. For the purposes of this Sublease, Building Operating Expenses shall mean property taxes, utilities, common area maintenance and repair costs, operating costs, and commercially reasonable management fees, but shall specifically exclude (1) costs of items considered capital repairs, replacements, improvements and equipment under generally accepted accounting principles consistently applied or otherwise, including, but not limited to, the roof of the Building and any HVAC units; (2) costs incurred by Sublessor for the repair of damage to the Building, to the extent that Sublessor is or should be reimbursed by insurance proceeds, and costs of all capital repairs, regardless of whether such repairs are covered by insurance; (3) depreciation, amortization, and interest payments, except as provided herein and except on materials, tools, supplies, and vendor-type equipment purchased by Sublessor to enable Sublessor to supply services that Sublessor might otherwise contract with a third-party when such depreciation, amortization, and interest payments would otherwise have been included in the charge for such third-party services, all as determined in the accordance with generally accepted accounting principles consistently applied, and when depreciation or amortization is permitted or required, the items shall be amortized for its reasonably anticipated useful life; (4) marketing costs, including, without limitation, leasing commissions, attorneys fees in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases, subleases and/or assignments, space planning costs and other costs and expenses incurred in connection with lease, sublease and/or assignment negotiations and transactions with present or prospective tenants or other occupants of the Building; (5) expenses for services or other benefits that are not offered to Sublessee for which Sublessee is charged directly but that are provided to another tenant or occupant of the Building; (6) cost incurred by Sublessor due to the violation by Sublessor or any tenant of the terms and conditions of any lease of space in the Building; (7) overhead and profit increment paid to Sublessor or to subsidiary or affiliates of Sublessor for goods and/or services in or to the Building to the extent that same exceeds the costs of such goods and/or services rendered by an affiliated third party on a competitive basis; (8) Sublessors general corporate overhead and general and administrative expenses; (9) costs incurred in connection with upgrading any portion of the Building other than the Subleased Premises to comply with life, fire and safety codes, ordinances, statutes or other laws, including, without limitation, the ADA, including penalties or damages incurred because of such non-compliance; (10) tax penalties incurred as a result of Sublessors failure to make payments and/or to file any tax or informational returns when due; and (11) in-house legal and/or accounting fees. |
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b. | Beginning thirty (30) days prior to the end of the first calendar year of the Initial Term and each calendar year thereafter, Sublessor shall provide to Sublessee a statement that estimates the Building Operating Expenses that are expected to be allocated to the Sublease Premises on a rentable square foot basis per month for the following year (such proportionate expenses and costs shall be referred to as the Sublease Premises Costs). Based upon the estimate and commencing on January 1 and each month thereafter, Sublessee agrees to pay Sublessor the increase in the Sublease Premises Costs per rentable square foot for the Sublease Premises for that calendar year over the Base Year Sublease Premises Costs. The term Base Year Sublease Premises Costs shall mean the Sublease Premises Costs per rentable square foot per month for the Sublease Premises for the calendar year 2011. For illustrative purposes only, if the Base Year Sublease Premises Costs are $1.25 per rentable square foot, the Sublease Premises are 1000 rentable square feet, and the estimated Sublease Premises Costs for 2012 are $1.30 per rentable square foot, the Sublessee shall be obligated to pay to Sublessor with Base Rent an additional amount of $50 (1.30-1.25 x 1000) each month in the calendar year of 2012. If the Sublease Premises Costs for calendar year 2013 are $1.35 per rentable square foot, the Sublessee shall be obligated to pay Sublessor with Base Rent an additional amount of $100 (1.35-1.25 x 1000) each month in the calendar year 2013. Beginning ninety (90) days after the end of each calendar year, Sublessor shall provide Sublessee with a statement with the actual Sublease Premises Costs for the prior calendar year (a Reconciliation Statement). If the Sublease Premises Costs are more than the estimate and amount paid by Sublessee, the Sublessee shall be obligated to pay to Sublessor the difference within thirty (30) days after Sublessees receipt of the applicable statement. Likewise, if the Sublease Premises Cost are less than the estimate and the amount paid by Sublessee, the Sublessor shall reimburse the Sublessee the difference within thirty (30) days after Sublessees receipt of the applicable statement. | ||
c. | Sublessor agrees that it will maintain complete and accurate records of all costs, expenses and disbursements paid or incurred by Sublessor, its employees, agents and/or contractors, with respect to the Building Operating Expenses and the Sublease Premises Costs. Provided Sublessee is not then in default under this Sublease, Sublessee shall have the right to audit Sublessors Buidling Operating Expenses and Sublease Premises Costs. Subessee shall give notice (an Audit Notice) to Sublessor of Sublessees intent to audit within ninety (90) days following Sublessees receipt of Sublessors Reconciliation Statement for each calendar year (Audit Notice Period). Provided Sublessee provides the Audit Notice to Sublessor within the Audit Notice Period, such audit shall be conducted by an independent reputable accounting firm acceptable to Sublessor who shall not be compensated on a contingency fee basis at a mutually agreeable time during normal business hours at the office of Sublessor or its management agent where the records are maintained. If Sublessees audit determines that the Reconciliation Statement has been understated, Sublessee shall be obligated to pay to Sublessor the difference within thirty (30) days after Sublessees receipt of the audit results. Likewise, if Sublessees audit determines that the Reconciliation Statement has been overstated, then Sublessor shall reimburse the Sublessee the difference within thirty (30) days after Sublessees receipt of the audit results. Furthermore, if Sublessees audit determines that the Reconciliation Statement has been overstated by more than five percent (5%), then subject to Subessors right to review and/or contest the audit results, Sublessor shall reimburse Sublessee for the reasonable out-of-pocket costs of such audit. |
6. | Use . Sublessee shall use the Sublease Premises as a commercial office and all legally related uses but for no other purposes without Sublessors written consent, which may be granted in Sublessors sole discretion; provided, however, in no event shall the use violate the permitted uses under the Master Lease. The Master Lease in Section 1.3, which Sublessee should review, permits the Building to be used for general office use... and for any other purpose permitted by applicable zoning and the covenants, conditions and restrictions governing the Premises. |
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7. | Condition of Sublease Premises . Sublessee accepts the Sublease Premises in its present as-is condition, provided, however, Sublessor hereby represents and warrants to Sublessee that (a) the Master Lease is in full force and effect, and neither Sublessor or Master Lessor are in breach or default thereunder; (b) Sublessor is not aware of any encumbrances, liens, agreements, or covenants in effect that would materially or unreasonably limit Sublessees rights hereunder; (c) to the actual knowledge of Jay Haunschild, the Vice President of Finance of Sublessor, without any duty to investigate, Sublessor is unaware of any impending condemnation plans, proposed assessments or other adverse conditions relating to the Subleased Premises or the Building, and (d) to the actual knowledge of Jay Haunschild, the Vice President of Finance of Sublessor, without any duty to investigate, Sublessor is unaware of any existing violations at the Building of any Hazardous Materials Laws (as defined in the Master Lease). Subject to the foregoing representations and warranties by Sublessor, Sublessee shall be deemed to have agreed by accepting occupancy that the Sublease Premises are in good order, condition and repair. With the exception of the items Sublessor is obligated to maintain pursuant to Section 15 below, Sublessee, at Sublessees own expense, shall keep the interior of the Sublease Premises in good order, condition, and repair, including all fixtures and equipment installed by Sublessee, ordinary wear and tear and damage caused by casualty or condemnation excepted. |
a. | Sublessee shall not be responsible for maintenance and repair of plumbing, mechanical, windows, doors, HVAC or any items for which Sublessor is responsible pursuant to Section 15 hereof, unless such maintenance and repairs are necessitated due to the negligence or willful misconduct of Sublessee. | ||
b. | In the event Sublessor does not promptly maintain or make repairs pursuant to Section 15 hereof and the failure to perform such maintenance and/or repairs will materially or unreasonablely limit Sublessees use of the Sublease Premises, and Sublessor has failed to commence and diligently pursue the maintenance and/or repairs within ten (10) business days after receipt of written notice from Sublessee identifying the necessary maintenance and/or repairs required to be made pursuant to Section 15, Sublesee may arrange for such maintenance or repairs and charge Sublessor the actual cost of such repairs, which amounts shall be paid to Sublessee within thirty (30) days after delivery of an invoice to Sublessor. In the event such amounts are not time timely paid by Sublessor, Sublessor shall pay interest on such amounts at the rate of ten percent (10%) per annum from the date such amount was due until such time as the payment is made to Sublessee, and Sublessee may deduct such invoiced amounts from Base Rent and any other amounts due to Sublessor under this Sublease. |
8. | Assignment and Subletting . Notwithstanding Paragraph 6 of the Master Lease, which shall not be applicable to Sublessee and Sublessor, Sublessee shall not assign, mortgage or encumber this Sublease or any interest herein or sublet all or any part of the Sublease Premises or permit the Subleased Premises or any part thereof to be used by others (any and all of which hereinafter shall be referred to as a transfer), without the prior written consent of Sublessor which consent may be withheld or granted in Sublessors sole discretion. Any attempted transfer without the Sublessors prior written consent shall be void and shall confer no rights upon any third person and shall constitute a default under the Sublease. Notwithstanding the foregoing, and subject to the Master Lease and the rights of Master Lessor to approve the sublease or assignment, Sublessee shall have the right to sublease or assign the Subleased Premises or any portion thereof, without Sublessors consent, (a) to any affiliate of Sublessee (including, but not limited to, a parent, subsidiary or entity under common or related control with Sublessee), (b) in connection with a merger, consolidation or non-bankruptcy re-organization of Sublessee, (c) in connection with the sale of all or substantially all Sublessees assets, or all such assets as are used in connection with Sublessees use of the Subleased Premises (each of the foregoing a Permitted Transfer). In the event of a Permitted Transfer, Sublessee agrees to provide Sublessor with thirty (30) days prior written notice of such Permitted Transfer so that Sublessor can provide the written notice to Master Lessor. |
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9. | Alterations . Except for the initial alterations to be performed by Sublessee at the outset of this Sublease, which are subject to prior approval of Master Lessor and Sublessor in their sole discretion, Sublessee covenants and agrees not to improve, alter, add to, remove or demolish any improvements on the Sublease Premises, or use any contractors or workmen to make alterations, without the prior written consent of Sublessor, which shall not be unreasaonably withheld, conditioned or delayed by Sublessor, subject however, to the terms and provisions of the Master Lease. Master Lessor and/or Sublessor may condition the approval of Sublessees proposed alterations upon Sublessor removing the alterations upon the expiration of the term of the Sublease. In connection with any alterations to be performed by Sublessee, Sublessee agrees to use subcontractors reasonably approved by the Sublessor and Sublessee shall be responsible for all costs, expenses, and liability arising from and in connection with the alterations. | ||
10. | Master Lease Terms Apply . |
a. | This Sublease is subject to and subordinate to the Master Lease. All of the terms, covenants and conditions of the Master Lease shall be applicable to this Sublease as if Sublessor were the landlord under the Master Lease and Sublessee was the tenant thereunder except for (i) those terms, covenants and conditions that are specifically inconsistent with the terms of this Sublease, (ii) those terms, covenants and conditions that are excluded by the express terms of the Sublease, and (iii) Section 8 thereof. Except as otherwise expressly provided above or otherwise in this Sublease, and only with respect to the Sublease Premises, Sublessee hereby assumes and agrees to perform and observe all covenants and obligations of Sublessor under the Master Lease. | ||
b. | If Sublessee defaults or commits an act or fails to act under this Sublease and such event would cause Sublessor to be in default of the Master Lease, Sublessee shall be in default under this Sublease, subject to all applicable cure periods. | ||
c. | Sublessee will indemnify and hold Sublessor harmless from and against all claims made by Master Lessor by reason of any breach or default on the part of Sublessee, subject to all applicable cure periods, which causes Sublessor to be in default under the Master Lease. | ||
d. | Sublessor will indemnify and hold Sublessee harmless from and against all claims made by Master Lessor by reason of any breach or default under this Sublease or the Master Lease by reason of any breach or default not caused by a breach or default by Sublessee. | ||
e. | Sublessee acknowledges that Master Lessor retains all of its rights and remedies under the Master Lease with respect to the Sublease Premises to the same extent as it would have if the Sublease did not exist and has the right to exercise such rights and remedies against Sublessee. |
11. | Insurance: Casualty . |
a. | Sublessee shall not do or suffer any act upon the Sublease Premises (and Master Lease Premises) or bring into or keep upon the Sublease Premises (and Master Lease Premises) any article which would affect the fire risk or increase the rate of fire insurance or any other insurance on the Building. Sublessee shall comply with the rules and requirements of all boards of fire underwriters, rating bureaus, bureaus of fire prevention and like bodies, and with requirements of all insurance companies having policies of any kind in effect covering the Building, including policies insuring against tort liability, and with the requirements of all companies which have at any time been requested to issue such policies. Should the rate of any type of insurance on the Building be increased by reason of any action or omission by Sublessee, Sublessor, in addition to all other remedies, may following five days written notice thereof to Sublessee, pay the amount of such increase, and the amount so paid shall become due and payable on demand as additional rent. In |
9
no event shall any flammable materials, except for kinds and quantities customarily used for ordinary office occupancy, or any explosives whatsoever be taken into the Sublease Premises and the Building or retained therein. | |||
b. | Sublessee shall carry and maintain, at its own expense, with insurance companies rated at least A-XII in Bests Insurance Guide, which are authorized to do business in the state of Nevada and are acceptable to the Sublessor: (I) all risk insurance coverage subject to reasonable deductibles, as determined by Sublessor in its reasonable discretion, covering personal property, trade fixtures and improvements to the Sublease Premises to cover the replacement costs thereof; (II) comprehensive general public liability and property damage coverage, covering contractual liability of Sublessee and personal injury insurance applicable to the Sublease Premises in minimum limits of liability of $2,000,000 combined single limit for bodily injury and comprehensive property damage liability; and (III) appropriate Workers Compensation and Employers Liability Insurance, with an insurance carrier licensed to do business in Nevada, covering all persons employed by Sublessee at the Subleased Premises and satisfying the Workers Compensation Act of the local state. | ||
c. | Insurance required to be maintained by Sublessee pursuant to this Section of this Sublease shall name the Sublessor and Master Lessor as additional insured, and all of the policies shall provide that no cancellation or substantial alteration shall be effective until at least thirty (30) days after receipt by Sublessee of written notice thereof or expiry of this Sublease, whichever is sooner. | ||
d. | Sublessor and Sublessee each hereby release the other, as well as the Master Lessor, from any and all liability or responsibility to the other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property caused by fire or any of the extended coverage casualties covered by the insurance maintained hereunder, even if such loss or damage shall have been caused by the fault or negligence of the other party, provided, however, that this release shall be applicable and in force and effect only with respect to loss or damage occurring during such times as the releasers insurance policies shall contain a clause or endorsement to the effect that any release shall not adversely affect or impair said policies or prejudice the right of the releaser to recover thereunder. | ||
e. | Sublessor covenants and agrees that Sublessor will maintain in force and effect at all times during the term of this Sublease insurance required of Sublessor under the terms of the Master Lease. Sublessee covenants and agrees that Sublessee will maintain in force at all times during the term of this Sublease insurance covering Sublessees improvements as required by this section of the Sublease. Sublessor will not be required to reinsure Sublessees improvements. | ||
f. | Sublessee shall deliver to Sublessor, prior to occupancy, and prior to the expiration or replacement, adequate certificates of insurance showing that insurance required by Sublease is in full force and effect and an endorsement showing the Sublessor and Master Lessor as additional insured as required by this section of the Sublease. | ||
g. | If there is damage to the Sublease Premises by fire or other casualty, Sublessee shall promptly give notice to Sublessor, but in no event later than thirty (30) days after the casualty. If the damage is such that Sublessee reasonably believes that it would not be possible to conduct business in the Sublease Premises in a manner reasonably comparable to that conducted immediately before such damage, Sublessee may terminate this Sublease on thirty (30) days written notice, effective as of the day of the casualty. |
12. | Notice . Any bill, statement, notice, demand or other communication which either party may desire or be required to give shall be in writing and shall be given by personally delivering a |
10
copy thereof to the person specified below at the following address or by sending a copy thereof by overnight delivery or certified or registered United States mail, postage prepaid, with return receipt requested, addressed as follows: |
If to Sublessee:
Spectrum Pharmaceuticals, Inc. 11500 South Eastern Avenue, Suite 240 Henderson, Nevada 89052 Attention: Legal Department |
|||
With a copy to: | |||
Spectrum Pharmaceuticals, Inc.
157 Technology Drive Irvine, CA 92618 Attention: Chief Financial Officer |
|||
If to Sublessor:
Del Webb Corporation 8345 West Sunset Road Las Vegas, NV 89113 Attn: Jay Haunschild |
|||
Any communication given as herein provided shall be deemed given when personally delivered (if sent via overnight delivery) or three (3) days after being mailed (if sent by certified or registered United States mail). Each party shall have the right to designate a different address or a different person, or both, to which or to whom communications shall be sent or delivered, by written notice given as provided herein. | |||
13. | Termination . Sublessee, upon termination of this Sublease or upon the expiration of the term heretofore or as herein otherwise provided, shall quit and surrender the Sublease Premises in good order, condition and repair, reasonable wear and tear and casualty and condemnation excepted. | ||
14. | Access and Security . Sublessee shall have access 24 hours per day, 7 days per week, and 52 weeks per year to the Sublease Premises, the common areas (as may be changed and modified by Sublessor at its sole discretion from time to time) of the Building and the parking facilities. Sublessee shall (1) lock the doors to the Sublease Premises and take other reasonable steps to secure the Sublease Premises and the personal property of all parties upon the Sublease Premises and any of Sublessees transferees, contractors or licensees in the common areas and parking lot of the Building and Property from unlawful intrusion, theft and other hazards; (2) keep and maintain in good working order all security and safety devices installed in the Sublease Premises by or for the benefit of the Sublessee (such as locks, fire sprinklers and burglar alarms); and (3) cooperate with Sublessor and all other sublessees in the Building on Building safety matters. Sublessee acknowledges that any security or safety measures employed by Sublessor are for the protection of Sublessors own interests; that Sublessor is not a guarantor of security or safety of the Sublessee or their property; and that security and safety matters are the responsibility of Sublessee and local law enforcement authorities. | ||
15. |
Services Furnished by Sublessor.
Subject to the provisions of this Sublease, Sublessor agrees
to furnish (or cause a third party to furnish) the following services to Sublessee during the
the Term: |
a. | Water service for use in the lavatories, drinking fountains, kitchens and hospitality areas, if any, on each floor on which the Sublease Premises are located. |
11
(i) | Notwithstanding the foregoing, if as a result of the direct actions of Sublessor, its agents, contractors or employees, for more than twenty-four (24) consecutive hours following written notice to Sublessor, there is no HVAC or electricity services to the Subleased Premises, or such an interruption of other essential utilities and building services, such as fire protection or water, so that the Subleased Premises cannot be used by Sublessee, in Sublessees judgment reasonably exercised, then Sublessees Base Rent shall thereafter be abated until the Subleased Premises are again usable by Sublessee; provided, however, that if Sublessor is diligently pursuing the repair of such utilities or services and Sublessor provides substitute services reasonably suitable for Sublessees purposes, as for example, bringing in portable air-conditioning equipment, then there shall not be an abatement of Base Rent. | ||
(ii) | If any of the foregoing maintenance or repair is due to the acts or omissions of any Sublessee, Sublessee shall pay the costs of such repairs or maintenance to Sublessor within thirty (30) days after receipt of an invoice, together with an administrative charge in an amount equal to ten percent (10%) of the cost of the repairs. |
12
16. | Parking . The Building parking facility is designed to accommodate 5 parking privileges per 1,000 rentable square feet of Premises for the Term of the Sublease. The covered parking is not owned by the Original Landlord and as such, is not available for tenant use. The Sublessee, its agent, employees and customers shall have the non-exclusive right in common with the Master Lessor, Sublessor, and other sublessees in the Building to use the common area and designated parking areas for ingress/egress and automobile parking, subject to such rules and regulations as the Sublessor and/or Master Lessor may impose at its reasonable discretion from time to time. Overnight parking is not allowed. | ||
17. | Entry by Sublessor . Sublessor, Master Lessor, its agents, contractors and representatives may enter the Sublease Premises to inspect or show the Sublease Premises, to clean and make repairs, alterations or additions to the Sublease Premises, and to conduct or facilitate repairs, alterations, or additions to any portion of the Building, including other sublessees premises after giving Sublessee reasonable notice thereof and allowing a representative of Tenant to accompany Sublessor and such third parties. Except in emergencies or to provide janitorial and other routine Building services (which do not require prior notice to Sublessee and may occur at any time), Sublessor shall enter the Sublease Premises only during Normal Business Hours and with reasonable prior notice. | ||
18. | Signage . Sublessee agrees that during the term hereof, no signs may be placed on the Sublease Premises or Building without the prior consent of the Sublessor and Master Lessor, which may be withheld or granted in their sole discretion. Sublessee, at Sublessees cost, will be provided one (1) name on the Building directory board in the main lobby and Building Standard suite identification at the entrance to the Premises. | ||
19. | Indemnification . |
13
20. | Environmental Matters . Sublessee, its agents, employees, contractors and invitees shall use the Sublease Premises and conduct any operations thereon in compliance with all applicable federal, state and local environmental statutes, regulations, ordinances and any permits, approvals or judicial or administrative order issued thereunder. Sublessee hereby agrees to indemnify, defend and hold harmless the Sublessor and Master Lessor, their agents, affiliates, officers, directors and employees (all such entities and persons being referred to herein individually as Indemnified Person and collectively as the Indemnified Parties) from and against any and all liability, claims, demands, actions and causes of action whatsoever (including, without limitation, reasonable attorneys fees and expenses, costs and expenses reasonably incurred in investigation, preparing or defending against any litigation or claim, action, suit, proceeding or demand of any kind or character) to which any Indemnified Person may be subject insofar as they arise out of or relate to any alleged contamination of the Sublease Premises arising from any violation of Sublessees obligation under this section. The obligations of Sublessee set forth in this section of this Sublease shall survive the expiration or termination of this Sublease or the exercise by Sublessor and/or Master Lessor of any of its rights hereunder. Sublessor knows of no violation of any laws at the Sublease Premises or the Building as of the date of this Sublease. |
21. | Americans With Disabilities Act . In the event Sublessee elects to make any alterations to the Subleased Premises, Sublessee shall be responsible at its sole cost and expense for compliance with the Americans with Disabilities Act (ADA) within the Sublease Premises. To the actual knowledge of Jay Haunschild, the Vice President of Finance of Sublessor, without any duty to investigate, is unaware of any actual existing violations of ADA in the Sublease Premises. |
22. | Miscellaneous . |
14
SUBLESSOR | SUBLESSEE | ||||
Del Webb Corporation,
a Delaware corporation |
Spectrum
Pharmaceuticals, Inc.,
a Delaware corporation |
||||
|
|||||
By: |
/s/ Jay Haunschild
|
By: | /s/ Shyam Kumaria | ||
|
|||||
Print: Jay Haunschild
|
Print: Shyam Kumaria | ||||
|
|||||
Its: VP Finance
|
Its: Sr. V.P., Finance | ||||
|
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16
17
Page | ||||
1. PREMISES; PERMITTED USE
|
1 | |||
1.1 Lease of Premises
|
1 | |||
1.2 As Is
|
1 | |||
1.3 Permitted Use
|
1 | |||
|
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2. TERM; POSSESSION
|
2 | |||
2.1 Lease Term
|
2 | |||
2.2 Options to Renew
|
2 | |||
|
||||
3. MONTHLY BASE RENT; RENTABLE AREA
|
3 | |||
3.1 Payment of Rent
|
3 | |||
3.2 Rentable Area
|
4 | |||
|
||||
4. PAYMENT OF ADDITIONAL CHARGES BY TENANT
|
4 | |||
4.1 Tenants Obligation to Pay Additional Charges
|
4 | |||
4.2 Taxes and Assessments
|
4 | |||
|
||||
5. ADDITIONAL TAXES
|
5 | |||
|
||||
6. ASSIGNMENT, SUBLETTING
|
5 | |||
6.1 Tenant Affiliate
|
5 | |||
6.2 Right to Recapture
|
6 | |||
6.3 Assignment and Assumption
|
7 | |||
|
||||
7. UTILITIES
|
7 | |||
|
||||
8. CARE AND REPAIR OF PREMISES
|
7 | |||
8.1 Tenants Obligations
|
7 | |||
8.2 Failure by Tenant to Perform Its Maintenance Obligations
|
7 | |||
|
||||
9. COVENANTS OF TENANT
|
8 | |||
9.1 Compliance with Laws
|
8 | |||
9.2 Access to Premises
|
8 | |||
9.3 Signage
|
8 | |||
9.4 Overload Premises
|
8 | |||
|
||||
10. ALTERATIONS
|
9 | |||
10.1 Permitted Alterations
|
9 | |||
10.2 Mechanics Liens
|
9 | |||
|
||||
11. INDEMNITY
|
9 | |||
11.1 By Tenant
|
9 | |||
11.2 By Landlord
|
10 |
Page | ||||
12. CASUALTY LOSS
|
10 | |||
12.1 Repair of Premises
|
10 | |||
12.2 Tenants Right to Terminate
|
10 | |||
12.3 Landlords Right to Terminate
|
10 | |||
12.4 Waiver of Statutory Rights
|
10 | |||
|
||||
13. CONDEMNATION
|
11 | |||
13.1 Termination of Lease
|
11 | |||
13.2 Condemnation Award
|
11 | |||
|
||||
14. MUTUAL RELEASE/WAIVER OF SUBROGATION; INSURANCE
|
11 | |||
14.1 Waiver of Subrogation
|
11 | |||
14.2 Use of Premises by Tenant
|
11 | |||
14.3 Insurance to be Maintained by Tenant
|
11 | |||
14.4 Requirements for All Insurance
|
12 | |||
|
||||
15. HAZARDOUS MATERIALS
|
12 | |||
15.1 Definitions
|
12 | |||
15.2 Activities by Tenant
|
12 | |||
15.3 Indemnity by Tenant
|
13 | |||
15.4 Discovery of Hazardous Materials
|
13 | |||
15.5 Notification by Tenant
|
14 | |||
15.6 Survival
|
14 | |||
|
||||
16. DEFAULT; WAIVER OF TRIAL BY JURY
|
14 | |||
16.1 Default by Tenant
|
14 | |||
16.2 Remedies of Landlord
|
14 | |||
16.3 Cumulative Remedies of Landlord
|
15 | |||
16.4 Attorneys Fees and Costs
|
15 | |||
16.5 Limitation on Landlords Liability
|
15 | |||
16.6 Waiver of Jury Trial
|
15 | |||
|
||||
17. SURRENDER
|
15 | |||
|
||||
18. HOLDING OVER
|
16 | |||
|
||||
19. SUBORDINATION
|
16 | |||
|
||||
20. ESTOPPEL CERTIFICATE
|
17 | |||
20.1 Delivery by Tenant
|
17 | |||
20.2 Delivery by Landlord
|
17 | |||
|
||||
21. SERVICE CHARGE
|
17 | |||
|
||||
22. BINDING EFFECT
|
17 |
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Page | ||||
23. QUIET ENJOYMENT
|
18 | |||
|
||||
24. BROKER
|
18 | |||
|
||||
25. NOTICES
|
18 | |||
|
||||
26. FORCE MAJEURE
|
19 | |||
|
||||
27. GENERAL
|
19 | |||
27.1 Captions
|
19 | |||
27.2 No Partnership; No Third Party Rights
|
19 | |||
27.3 Entire Agreement
|
20 | |||
27.4 Authority to Execute
|
20 | |||
27.5 Nevada Law
|
20 | |||
27.6 Incorporation of Exhibits
|
20 | |||
27.7 Impartial Interpretation
|
20 | |||
27.8 No Recording
|
20 | |||
27.9 Consent
|
20 | |||
27.10 Time of Essence
|
20 | |||
27.11 Counterparts
|
20 | |||
|
||||
28. MULTIPLE OWNERS
|
20 |
-iii-
-2-
April 19, 1999-April 30, 2000:
|
$ | 734,292 | ||||||
May 1, 2000-April 30, 2001:
|
$ | 752,649 | ||||||
May 1, 2001-April 30, 2002:
|
$ | 771,465 | ||||||
May 1, 2002-April 30, 2003:
|
$ | 790,751 | ||||||
May l,
2003-April 30, 2004:
|
$ | 810,519 | ||||||
May 1, 2004-April 30, 2005:
|
$ | 830,781 | ||||||
May 1, 2005-April 30, 2006:
|
$ | 851,550 | 70,962,50 | |||||
May 1, 2006-April 30, 2007:
|
$ | 872,838 | ||||||
May 1, 2007-April 30, 2008:
|
$ | 894,658 | ||||||
May 1, 2008-April 30, 2009:
|
$ | 917,024 | ||||||
May 1, 2009-April 30, 2010:
|
$ | 917,024 | ||||||
May 1, 2010-April 30, 2011:
|
$ | 917,024 | ||||||
May 1, 2011-April 30, 2012:
|
$ | 917,024 | ||||||
May 1, 2012-April 30, 2013:
|
$ | 917,024 | ||||||
May 1, 2013-April 30, 2014:
|
$ | 917,024 |
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Tenant:
|
Del Webb Corporation | |
|
11500 South Eastern Avenue | |
|
Las Vegas, Nevada 89012 | |
|
Attn: Vice President of Finance | |
|
||
And to:
|
Del Webb Corporation | |
|
6001 North 24 th Street | |
|
Phoenix, Arizona 85016 | |
|
Attn: General Counsel |
-18-
And to:
|
Streich Lang, P.A. | |
|
Renaissance One | |
|
Two North Central Avenue | |
|
Phoenix, Arizona 85004 | |
|
Attn: Diane M. Haller, Esq. | |
|
||
Landlord:
|
c/o Bradley Associates Partnership | |
|
111 East Wacker Drive, Suite 1409 | |
|
Chicago, Illinois 60601 | |
|
Attn: Sherwin Jarol | |
|
||
And to:
|
Much, Shelist, Freed et al. | |
|
200 North LaSalle Street | |
|
Suite 2100 | |
|
Chicago, Illinois 60601 | |
|
Attn: Morrie Much, Esq. | |
|
FAX: (312) 621-1750 |
-19-
-20-
HENDERSON PROPERTY, L.P., a Nevada
limited partnership |
||||
BY: | BRADLEY ASSOCIATES, L.L.C., an Illinois limited liability company, which is its sole General Partner |
By: | /s/ Sherwin Jarol | |||
Name: | Sherwin Jarol | |||
Its: Initial Manager |
By: | /s/ Morris D. Ziegler | |||
Name: | Morris D. Ziegler | |||
Its: Initial Manager | ||||
NEWTOWN, L.P., an Illinois limited partnership
|
||||
BY: | NEWTOWN INVESTMENTS, INC., an | |||
Illinois corporation, which is the sole | ||||
general partner |
By: | /s/ Sherwin Jarol | |||
Name: | Sherwin Jarol | |||
Its: President | ||||
GURNEE VENTURE, LP., an Illinois limited
|
||||
BY: | BRADLEY ASSOCIATES, L.L.C., an | |||
Illinois limited liability company, which is
its sole general partner Its sole general partner |
By: | /s/ Sherwin Jarol | |||
Name: | Sherwin Jarol | |||
Its: Initial Manager |
-21-
By: | /s/ Morris D. Ziegler | |||
Name: | Morris D. Ziegler | |||
Its: Initial Manager | ||||
DEL WEBB CORPORATION, a Delaware corporation | ||||
By: | /s/ Robert Son C. Jones | |||
Name: | Robert Son C. Jones | |||
Its: Senior Vice President | ||||
-22-
ANTHEM H554 G.C, WALLACJ, INC. S3 (C4 MVADA arO ADMINISTRATION BUILDING cALc. U SITE PLAN (us: AMN-TLflI QF?Af1 SCALE: I OO OA?C: 04/t9/P9 CNECKCO BY: PAtI f 36j 31 116 SECT/ON / CORN jfJ? 4 N 1?,tL 1 FiLE 93, PACE 74 OF PARCEL MAPS |
EXHIBIT R |
-25-
-2-
-3-
-4-
Landlord
11500 South Eastern Avenue , L.L.C., A Nevada limited liability company |
||||
By: | /s/ [ILLEGIBLE] | |||
Its: | MANAGER | |||
Tenant
Del Webb Corporation , a Delaware corporation |
||||
By: | /s/ Michelle Ross | |||
Its: | VP of Finance | |||
18
19
20
1
For purposes of this Agreement, the following terms shall have the following meanings: | ||
1.1 | Affiliate shall mean and include in relation to each Party, any person, firm, corporation or other entity: (i) if at least fifty percent (50%) of the voting stock or other equity interest thereof is owned, directly or indirectly, by that Party; (ii) which owns, directly or indirectly, at least fifty percent (50%) of the voting stock or other equity interest of that Party; or (iii) if at least fifty percent (50%) of the voting stock or other equity interest thereof is owned, directly or indirectly, by a person, firm, corporation or other entity that owns, directly or indirectly, at least fifty percent (50%) of the voting stock or other equity interest of that Party. | |
1.2 | Agreement shall mean this agreement and all Exhibits attached hereto, and the terms herein, hereunder, hereto and such similar expressions shall refer to this Agreement. | |
1.3 | Confidential Information shall mean and include all of know-how, data and information, not in the public domain, relating to D-63153, the Contract Products, the Indications, or the business, affairs, research and development activities, results of clinical trials, national and multinational regulatory proceedings and affairs, finances, plans, contractual relationships and operations of the Parties. | |
1.4 | Contract Products shall mean and include all pharmaceutical products, manufactured by Spectrum hereunder, whether as mono-preparations or combination-preparations, with the D-63153 as an active ingredient, for use in the Field, in any form of administration whatsoever. | |
1.5 | Copyright means any copyright, mask work or other right of authorship, whether registered or unregistered and including any registrations and applications therefore. | |
1.6 | D-63153 shall mean the compound described in Exhibit 1.6 hereto, which may be covered by one or more of Zentaris Patent Rights as listed in Exhibit 1.27 for use in the Field. | |
1.7 | Development Data shall mean reports of clinical studies and all other documentation containing or embodying any pre-clinical, clinical and chemistry, manufacturing and controls data relating to the application for Regulatory Approval for the Contract Products and/or D-63153 or the use of Contract Products and/or D-63153 in the Field, including, but not limited to, registration dossiers. |
2
1.8 | Domain Name means any Internet domain name, including top-level Internet domain names and all lower-level Internet domain names for which such top-level domains are a root or parent, whether in the form of an address for use in electronic mail transfer, a Universal Resource Locator, a File Transfer Protocol location, or other form suitable for specifying the location of an electronic data file over a distributed computer network. | |
1.9 | Effective Date of this Agreement shall mean the date first set forth above. | |
1.10 | Field shall mean all uses. | |
1.111 | First Commercial Sale shall mean in relation to each country within the Territory, first sale by Spectrum or its Affiliates, licensees, or distributors of any of the Contract Products for use in the Field in that country, after obtaining all of the applicable Regulatory Approvals. | |
1.12 | Improvements to the Contract Products and/or D-63153 shall mean and include any and all Inventions, and any and all changes, modifications and amendments to Zentaris Know-How which: (i) improve the performance or efficacy of the Contract Products and/or D-63153; (ii) reduce any side effects, drug interactions or other adverse effects of the Contract Products and/or D-63153; or (iii) reduce the cost and/or increase the efficiency or productivity of the manufacturing and production processes for the Contract Products. | |
1.13 | Indication(s) shall mean the Initial Indications and all other indications within the Field. | |
1.14 | Initial Indication(s) shall mean the use of D-63153 and/or Contract Products for (i) prostate cancer and (ii) benign prostate hyperplasia (BPH). | |
1.15 | Intellectual Property means, collectively, Trademarks, Patents, Copyrights, Domain Names, Trade Secrets and any other proprietary, intellectual property and other rights relating to any or all of the foregoing anywhere in the world. | |
1.16 | Inventions shall mean any new or useful method, process, manufacture, compound or composition of matter, whether or not patentable or copyrightable, or any improvement thereof. | |
1.17 | LHRH Patents shall mean the composition in matter patents regarding [***]. | |
1.18 | Net Sales shall mean the amount received by Spectrum, its Affiliates, its sublicensees or distributors on account of sales of a Contract Product to Third Parties in the Territory, less the following deductions to the extent actually allowed or specifically allocated to the Contract Product by the selling party using generally accepted accounting standards: |
(i) | sales and excise taxes and duties paid or allowed by the selling party and any other governmental charges imposed upon the production, importation, use or sale of such Contract Product; | ||
(ii) | customary trade, quantity and cash discounts allowed on Contract Product; |
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(iii) | allowances or credits to customers on account of rejection or return of Contract Product or on account of retroactive price reductions affecting such Contract Product; | ||
(iv) | freight and insurance costs, if they are included in the selling price for the Contract Product invoiced to Third Parties, provided always that such deduction shall not be greater than the balance between the selling price actually invoiced to the Third Party and the standard selling price which would have been charged to such Third Party for such Contract Product exclusive of freight and insurance in the respective country or in a comparable country. |
For the avoidance of doubt, for each Contract Product the Net Sales shall be calculated only once for the first sale of such Contract Product by either Spectrum, its Affiliate, its sublicensees or its distributor, as the case may be, to a Third Party which is neither an Affiliate, sublicensee or distributor of Spectrum. A sale of Contract Products by Spectrum, its Affiliate, its sublicensee or its distributor to a wholesaler shall be regarded as the first sale of the Contract Product for the purpose of calculating Net Sales. | ||
1.19 | Party or Parties shall mean Spectrum or Zentaris, or Spectrum and Zentaris, as the context admits. | |
1.20 | Patent means any patent or patent application, Invention disclosure, and other rights of Invention worldwide including, but not limited to, any continuations, continuations-in-part, divisionals, reissues, renewals, provisional patents, reexamined patents, applications for any of the foregoing or other applications or patents claiming the benefit of the filing date of any such application or patent. | |
1.21 | Regulatory Approvals shall mean and include all licenses, permits, authorizations and approvals of, and all registrations, filings and other notifications to, any governmental agency or department within the Territory, including, without limitation, the United States Food and Drug Administration (FDA) and the European Medicines Agency (EMA), necessary or appropriate for the manufacture, production, distribution, marketing, sale and use of the Contract Products and/or D-63153 within the Field in the Territory. | |
1.22 | Territory shall mean worldwide except Japan, Korea, Indonesia, Malaysia, the Philippines and Singapore. | |
1.23 | Third Party shall mean any other party that is independent from Spectrum and its Affiliates and Zentaris and its Affiliates. | |
1.24 | Trade Secret means any confidential information and proprietary information, including any formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts to maintain its secrecy. | |
1.25 | Trademark means trademark, service mark trade dress, trade name, design, logo, product name and slogan, (whether registered or unregistered, and including any common law rights, registrations, and applications for registration for any of the foregoing) and general intangible of like nature, together with all goodwill related to the foregoing. |
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1.26 | Zentaris Know-How shall mean and include all specifications, results of clinical trials, technical data and other information relating to the design, formulation, manufacture, production, quality control, Regulatory Approvals, distribution, sale and/or use of D-63153 in the Field in the Territory, to which Zentaris has rights as at the Effective Date. Without limiting the generality of the definition set forth in this Section 1.26, the Zentaris Know-How is described in more detail in Exhibit 1.26 hereto. | |
1.27 | Zentaris Patent Rights shall mean patents, patent applications, divisions, continuations, continuation-in-part applications, divisionals, extensions, substitutions, renewals, confirmations, supplementary protection certificates and reissues that are owned by Zentaris relating to, embodied in, or associated with the Contract Products and/or D-63153. Without limiting the generality of the definition set forth in this Section 1.27, the Zentaris Patent Rights are listed in more detail in Exhibit 1.27 hereto. |
2.1 | Zentaris hereby grants to Spectrum and Spectrum hereby accepts an exclusive (even as to Zentaris) license as of the Effective Date to use Zentaris Patent Rights and Zentaris Know-How to develop, use, make, have made, sell, offer for sale, have sold, import and export, commercialize Contract Products and/or D-63153 in the Field and in the Territory, in accordance with the terms and conditions, and subject to the limitations of this Agreement. The license shall include the right to use Zentaris Patent Rights and Zentaris Know-How in conducting research and development activities with respect to the use of Contract Products and/or D-63153 in the Field and in the Territory. [***] | |
2.2 | Spectrum shall be entitled to sublicense all or any of its rights under this Agreement to any Affiliate and to any Third Party. Any sublicense granted is subject to the participation payments specified in Section 4.3 below. In case Spectrum grants sublicenses hereunder, Spectrum always shall secure appropriate covenants, obligations and rights from any such sublicensee so as to ensure that such sublicensee is also able to comply with Spectrums covenants and obligations hereunder to the extent that Spectrum shall not be performing such covenants and obligations. Spectrum shall inform Zentaris of any sublicenses granted hereunder, and provide to Zentaris a copy of the sublicense agreement concluded with such sublicensee. Zentaris acknowledges that all and any information provided by Spectrum to Zentaris under this Section 2.2 will be deemed to be Confidential Information of Spectrum and will be subject to the terms of Section 12. However, Spectrum may redact confidential portions of any such sublicense agreement, but only to the extent that any such redactions do not impair Zentaris ability to ensure compliance with the provisions of this Agreement, including but not limited to the calculation of the participation payments specified in Section 4.3. | |
2.3 | Subject to Section 2.4 below, Zentaris will not at any time during the continuance of this Agreement grant to any person, firm, corporation or entity a license to develop, use, sell, offer for sale or import Contract Products and/or D-63153 in the Field and in the Territory. | |
2.4 | The grant of licenses by Zentaris to Spectrum under Section 2.1 hereof shall not preclude Zentaris and/or its Affiliates from utilizing Zentaris Patent Rights and Zentaris Know-How |
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and any Improvements relating thereto for the purpose of carrying out by itself or through a University, a contract research organization or a non-profit organization (provided that a material transfer agreement is in place to protect any intellectual property rights generated) any further non-commercial exploratory and development work relating to D-63153. Other than the limited use described in this Section 2.4, the license granted to Spectrum under Sections 2.1 and 2.2 shall be exclusive even as to Zentaris. | ||
2.5 | In furtherance of the rights and licenses granted by Zentaris to Spectrum under this Agreement, within thirty (30) days after the Effective Date of this Agreement, Zentaris shall furnish (with a continuing obligation to furnish) to Spectrum a data package that shall include to the extent not previously provided to Spectrum (i) all of the Zentaris Know-How as well as (ii) any and all information, including, without limitations data and reports for IND submission to the FDA, and other health regulatory agencies in the Territory, [***] has on the Contract Products and D-63153 to the extent such information is available to Zentaris and under Zentaris control [***]. Spectrum shall not use any of the Zentaris Know-How and [***] furnished by Zentaris under this Section 2.5 for any purpose whatsoever, except as specifically authorized in this Agreement, or as otherwise specifically authorized in writing by Zentaris. In the event that Spectrum reasonably believes that the Zentaris Know-How or [***] included in the data package furnished by Zentaris under this Section 2.5 is incomplete, Spectrum shall provide written notice thereof to Zentaris, and Zentaris shall furnish corrected copies of such Zentaris Know-How and [***] within sixty (60) days after receipt of Spectrums written notice hereunder. Zentaris shall use its reasonable endeavors to answer all questions received from Spectrum regarding the Zentaris Know-How and [***] as soon as reasonably possible after receipt. | |
2.6 | Zentaris shall execute all documents, give all declarations regarding the licenses granted hereunder and reasonably cooperate with Spectrum at the costs of Spectrum to the extent such documents, declarations and/or cooperation are required for the recordal or registration of the licenses granted hereunder at the various patent offices in the Territory for the benefit of Spectrum. | |
2.7 | Without limiting the generality of Section 2 hereof, Spectrum specifically acknowledges and agrees that the license granted to Spectrum hereunder is limited to development, use, and commercialization of the Contract Products and D-63153 in the Field within the Territory, and subject to any mandatory legal provisions which may apply, Spectrum shall not knowingly develop, distribute, market, sell or use any of the Contract Products or D-63153 for any other application or purpose whatsoever, and shall not actively promote, or solicit orders for the sale of the Contract Products outside the Field and outside the Territory, without the prior written authorization of Zentaris, which Zentaris may grant or withhold in its sole discretion. |
3.1 | Spectrum shall use its commercially reasonable efforts to develop, market and sell the Contract Products in the Territory in order to maximize the Net Sales derived from the Contract Products throughout the continuance of this Agreement. Without limiting the |
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generality of Spectrums commercially reasonable efforts obligation under this Section 3.1, Spectrum shall: |
(i) | apply for all required Regulatory Approvals in the countries, where commercially reasonable, within the Territory following completion of all appropriate clinical trials; | ||
(ii) | make the First Commercial Sale of the Contract Products in each country following the issuance of the Regulatory Approvals required for the manufacturing, distribution, marketing, sale and use of the Contract Products in the respective country and if appropriate, the completion of reimbursement negotiations; and | ||
(iii) | not manufacture, produce, distribute, market or sell any products which are directly competitive with the Contract Products in any country within the Territory, to the extent that any such activities would involve the use of any of Zentaris Patent Rights, Zentaris Know-How or any other Zentaris Confidential Information. |
3.2. | Notwithstanding Section 15.2 below, in the event that Spectrum materially breaches any of its obligations under Section 3.1 hereof, and if after having received written notice of such breach from Zentaris, Spectrum fails to cure such breach within ninety (90) days after receipt of Zentaris notice thereof, Zentaris shall have the right to convert the exclusive license rights granted to Spectrum in the relevant country and for the relevant Initial Indication into non-exclusive license rights, by furnishing written notice thereof to Spectrum and shall be entitled to use all Development Data generated by Spectrum hereunder for the development and commercialization of Contract Products and/or D-63153 in the relevant country. | |
3.3 | After the First Commercial Sale in the Territory, Spectrum shall furnish Zentaris with quarterly reports of all of Spectrums sales of Contract Products under this Agreement. Each such quarterly report shall (i) be furnished to Zentaris together with payment of royalties in accordance with Section 4.9 within ninety (90) days after the close of the calendar quarter to which it corresponds; and (ii) state Spectrums total sales of the Contract Products, broken down by country, during the calendar quarter, the Net Sales derived by Spectrum from such sales, and the royalties payable by Spectrum to Zentaris with respect to such Net Sales pursuant to Section 4.5 of this Agreement. In addition, commencing on first April 1 following the date of the First Commercial Sale in the Territory, Spectrum shall provide Zentaris on or before April 1 in each calendar year with a summary of its marketing activities performed in the major international markets in the previous calendar year and its marketing plans for that calendar year. |
4.1 | The Parties acknowledge the previous upfront payments by Spectrum prior to the Effective Date of: (i) EURO One Million ( 1,000,000) in cash and (ii) [***] in common stock of Spectrum. | |
The Parties acknowledge the previous payment by Spectrum prior to the Effective Date of a milestone payment equal to EURO One Million ( 1,000,000) for completion of the first Phase II study conducted by or on behalf of Spectrum, its Affiliates or sublicensees. |
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4.2 | In addition to the upfront and milestone payments specified in Section 4.1 hereof and as further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall make the following milestone payments to Zentaris: |
(i) | upon the Effective Date: One-time payment of [***] in the form of Spectrum stock (the Shares) under Rule 144 of the United States Securities Act of 1933, as amended (the Securities Act) | ||
The number of Shares of common stock of Spectrum shall be determined by (a) converting [***] to U.S. dollars at the exchange rate [***], and then (b) dividing the resulting dollar amount by [***]. The Shares shall be issued to Zentaris on the Effective Date. | |||
(ii) | upon acceptance by the FDA of the first submission of a Contract Product for Regulatory Approval for any Indication: [***]; | ||
(iii) | upon the first grant of Regulatory Approval for marketing for a Contract Product in the United States for any Indication: [***]; | ||
(iv) | upon acceptance by the EMA of the first submission of a Contract Product for Regulatory Approval for any Indication: [***]; | ||
(v) | upon the first grant of Regulatory Approval for marketing for a Contract Product in a country in the European Union for any Indication: [***]. | ||
(vi) | upon the first grant of Regulatory Approval for marketing for a product with D-63153 as an active ingredient in Japan: [***]. | ||
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Spectrum shall inform Zentaris on the occurrence of a milestone event as soon as possible, however, not later than within fourteen (14) days following the occurrence of such milestone event. Milestone payments are payable within thirty (30) days after Spectrums receipt of an invoice issued by Zentaris for such milestone payment. |
4.3 | In case Spectrum grants sublicenses under Section 2.2 hereof, Spectrum shall pay to Zentaris [***] percent ([***]%) of any lump sum, periodic or other consideration (other than royalties based on Net Sales) received by Spectrum from sublicensees including, but not limited to, equity, any upfront fees, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris Patent Rights and/or Zentaris Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made Contract Products. For the avoidance of doubt, the foregoing obligation shall not apply in respect of any sums received from sublicensees on which Spectrum has or is obliged to pay royalties pursuant to Section 4.5 hereof. | |
4.4 | All fees payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 hereof are non-refundable upon expiration or termination of this Agreement for any reason whatsoever assuming such fees have become due during the term of this Agreement. None of the fees |
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payable by Spectrum to Zentaris under Sections 4.1, 4.2 and 4.3 may be credited against any of Spectrums royalty obligations under Section 4.5 hereof. |
4.5.1 | As further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay royalties to Zentaris on Net Sales in the United States, Canada and Mexico equal to [***] percent ([***]%) of Net Sales for annual Net Sales up to [***] US dollars ($[***]), [***]% of Net Sales for annual Net Sales between [***] US dollars ($[***]) and [***] US dollars ($[***]) and [***]% of Net Sales for annual Net Sales exceeding [***] US dollars ($[***]). | |
4.5.2 | As further consideration for the rights and licenses granted by Zentaris to Spectrum under this Agreement, Spectrum shall pay royalties to Zentaris on Net Sales in the Territory outside the United States, Canada and Mexico equal to [***] percent ([***]%) of Net Sales for annual Net Sales up to [***] US dollars ($[***]),[***]% of Net Sales for annual Net Sales between [***] US dollars ($[***]) and [***] US dollars ($[***]) and [***]% of Net Sales for annual Net Sales exceeding [***] US dollars ($[***]). | |
4.6 | As consideration for the payment by Spectrum to Zentaris under Section 4.2 (vi), Zentaris shall pay to Spectrum for sales of products with D-63153 as an active ingredient in Japan either (i) fifty percent (50%) of profits on sales of products with D-63153 as an active ingredient in Japan, or (ii) fifty percent (50%) of any lump sum, periodic or other consideration received by Zentaris from licensees including, but not limited to, royalties, equity, sublicense fees, marketing rights, or other consideration paid for the authorization to use the Zentaris Patent Rights and/or Zentaris Know-How to develop, use, sell, offer for sale, have sold, import and export, commercialize, make and have made products with D-63153 as an active ingredient in Japan. Sections 4.8 et seq. hereof shall apply mutatis mutandis regarding the payments of Zentaris to Spectrum under this Section 4.6. | |
4.7 | In the event that a Contract Product is sold in the form of a combination-preparation for which Spectrum is required to pay a royalty for an active ingredient to a Third Party (that is not an Affiliate of Zentaris), the Net Sales attributable to such combination preparation shall be calculated on a country by country basis by the formula: A/(A+B)*C, where A is Spectrums (or its Affiliates, sublicensees or distributors) average selling price for D-63153 and B is Spectrums (or its Affiliates, sublicensees or distributors) average selling price for the Third Party ingredient(s) when sold in a mono-preparation in the relevant country during the period to which the Net Sales calculation applies or the fair market price if sold to an Affiliate and C is Spectrums (or its Affiliates, sublicensees or distributors, as applicable) actual Net Sales of the combination preparation during such period or the fair market price if sold to an Affiliate. | |
4.8 | Royalty payments shall be made on a country-by-country and a Contract Product-by Contract Product basis, however, in countries of the Territory where the Contract Products are no longer covered by a valid claim of a Zentaris Patent Right and Spectrum does not have exclusive commercialization rights in respect of Contract Product as a result of generic competition by a Third Party (other than an Affiliate or sublicensee of Spectrum), Spectrum |
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shall not pay any royalties on Net Sales for such Contract Product in such country, provided that in case of such generic competition in India the Parties agree to discuss a payment of royalties for such Contract Product. | ||
4.9 | All payments by Spectrum to Zentaris under this Agreement shall be paid in EURO to the following account: [***] | |
For purposes of calculating the amounts payable by Spectrum under Sections 4.3 and 4.5 hereof, such payments shall be converted into Euros at the prevailing open market currency conversion rate (commercial selling rate) as quoted by the Wall Street Journal fixing rate, issued by Reuters at 3 pm on the last day of the calendar quarter in which such payments were received by Spectrum. | ||
4.10 | Participation payments and royalties under Sections 4.3 and 4.5 shall be paid on a calendar quarterly basis. Each quarterly payment by Spectrum under Sections 4.3 and 4.5 shall be paid within ninety (90) days after the close of the calendar quarter to which it corresponds. | |
4.11 | In the event that any fee payable by Spectrum under Sections 4.1 and 4.2 is not paid to Zentaris on or before the due date therefore, as specified herein, or any quarterly participation or royalty payment under Sections 4.3 and 4.5 is overdue, the unpaid overdue amount shall bear interest at a rate equal to three (3) percentage points over LIBOR. | |
4.12 | All payments by Spectrum to Zentaris under this Section 4 shall be paid in full, without deduction for any sales, use, excise or other similar taxes which shall be Zentaris obligation. All payments are exclusive of value added tax, which shall, if applicable, be invoiced separately. In the event that Spectrum is required to withhold any taxes on any amount payable to Zentaris hereunder, under the applicable laws of any country within the Territory, Spectrum shall at Zentaris request and cost use its best efforts to obtain and furnish Zentaris with official tax receipts, or other evidence of payment of such withholding taxes, sufficient to permit Zentaris to demonstrate the payment of such withholding taxes, in order to establish Zentaris right to a credit for such withholding taxes against Zentaris German income tax liability. Spectrum shall provide Zentaris with all assistance reasonably requested by Zentaris in connection with any application to any competent tax authorities in any country within the Territory to qualify for the benefit of a reduced rate of withholding taxation under any applicable Double Tax Treaty. | |
4.13 | For the term of this Agreement and for a term of three (3) years thereafter, Spectrum shall maintain complete and accurate books and records of account, in accordance with generally accepted accounting principles, of all transactions and other business activities under this Agreement, sufficient to confirm the accuracy of all reports furnished by Spectrum to Zentaris under Section 3.3 hereof, and all payments by Spectrum to Zentaris under this Section 4. Upon reasonable written notice to Spectrum, Zentaris may request Spectrums certified public accountant to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit. If Zentaris disagrees with the report provided by Spectrums accountant, with reasonable justification for such disagreement, then |
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upon reasonable written notice to Spectrum, a certified public accountant designated by Zentaris and acceptable to Spectrum shall have the right to audit such books and records of account of Spectrum and to review the terms of any sublicenses granted by Spectrum, in order to confirm the accuracy and completeness of all such reports and all such payments. Zentaris shall bear all costs and expenses incurred in connection with any such audit; provided, however, that if any such audit reveals an underpayment of [***] percent ([***]%) or more between the amount of payments actually due and the amount of payments made to Zentaris for the audit period, then, in addition to paying the full amount of such underpayment, plus accrued interest, Spectrum shall reimburse Zentaris all such audit costs and expenses incurred. If the audit reveals an overpayment, Zentaris shall pay the full amount of such overpayment to Spectrum. |
5.1 | Spectrum shall be solely responsible for conducting research and development activities (pre-clinical, chemistry, manufacturing and controls and clinical development) for the Field in the Territory and for bearing all costs and expenses related to such development activities of the Contract Products in the Field and in the Territory. | |
5.2 | If D-63153 or Contract Products obtains approval for prostate cancer (PC Approval) from the FDA, EMA or in Japan, then the Steering Committee (defined in Section 5.3 below) will prepare a plan for the development of D-63153 or Contract Products in endometriosis, if scientifically, medically and commercially warranted. Spectrum may pursue additional indications. | |
5.3 | Within sixty (60) days after the PC Approval, the Parties shall form a Steering Committee, which shall be comprised of up to six (6) professionally and technically qualified representatives, three (3) from each Party. The Steering Committee shall meet for the first time within four (4) weeks after the PC Approval, and thereafter as often as necessary. The meeting place shall be mutually agreed to by the Parties. Each Party shall provide the other Party with written notice of its representatives for the Steering Committee within ten (10) days after the PC Approval and, thereafter, immediately upon replacement. | |
5.4 | All decisions of the Steering Committee shall be made in good faith in the best interest of this Agreement and the Parties shall use their reasonable efforts to take decisions unanimously. In the event that the Steering Committee is unable to agree on any matter after good faith attempts to resolve such disagreement in a commercially reasonable fashion, then the Chief Executive Officer of Spectrum and the Chairman and Managing Director of Zentaris shall meet to discuss the matter and user their best efforts to resolve the matter. If they are unable to do so, the Chief Executive Officer of Spectrum shall decide the matter. | |
5.5 | Each Party shall keep the other Party informed of relevant or material development activities performed by it in connection with the development and commercialization of Contract Products and/or D-63153 and shall provide the other Party with written notice of all clinical studies, including any known investigator initiated trials, together with the results thereof, when available. |
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6.1 | Subject to Section 6.2 below, each Party will disclose to the other Party all Development Data, which it generates or which is generated by in Zentaris case, its licensees and in Spectrums case, its sublicensees during the continuance of this Agreement. Each Party shall be entitled to disclose such Development Data to in Zentaris case, its licensees and in Spectrums case, its sublicensees. Spectrum shall ensure that its sublicensees agree to (i) permit Spectrum to disclose their Development Data to Zentaris and its licensees and (ii) keep confidential all Development Data disclosed to them pursuant to this Section 6.1. Zentaris shall ensure that its licensees agree to (i) permit Zentaris to disclose their Development Data to Spectrum and its sublicensees and (ii) keep confidential all Development Data disclosed to them pursuant to this Section 6.1. All Development Data disclosed pursuant to this section shall be deemed Confidential Information. | |
6.2 | Each Party, licensees and sublicensees (as the case may be) shall be entitled to use the Development Data disclosed to it pursuant to Section 6.1 for the development and commercialization of D-63153 and/or Contract Product in accordance with the terms of this Agreement free of charge. |
7.1 | Spectrum hereby acknowledges that Zentaris is the owner of all Inventions and/or Improvements developed by Zentaris and Spectrum shall acquire no rights, title or interest whatsoever in or to any such Inventions and/or Improvements, except as specifically provided herein. | |
7.2 | In the event that, during the continuance of this Agreement, Zentaris, its Affiliates or its licensees develops any Improvements with respect to the use of Contract Products and/or D-63153, Zentaris shall furnish Spectrum with timely written notice of such Improvements, and shall furnish Spectrum with a data package which, in Zentaris reasonable opinion, contains all information, know-how and other data as Spectrum will require in order to implement such Improvements. Zentaris shall, and hereby does, grant Spectrum an exclusive, perpetual, royalty-free license to use all Improvements developed by Zentaris and/or its Affiliates and all information, know-how and other data pertaining to such Improvements furnished by Zentaris to Spectrum hereunder for the purpose of developing, selling, offering for sale and importing Contract Products and/or D-63153 in the Field and in the Territory, and subject to the limitations as provided for in Section 2 above. Zentaris shall, and hereby does, ensure that its licensees grant Spectrum and Spectrums sublicensees a non-exclusive, perpetual, royalty-free license to use all Improvements developed by Zentaris licensees and all information, know-how and other data pertaining to such Improvements furnished by Zentaris to Spectrum hereunder for the purpose of developing, selling, offering for sale and importing Contract Products and/or D-63153 in the Field and in the Territory, and subject to the limitations as provided for in Section 2 above. | |
7.3 | Zentaris hereby acknowledges that Spectrum is the owner of all Inventions and/or Improvements developed by Spectrum and Zentaris shall acquire no rights, title or interest whatsoever in or to any such Inventions and/or Improvements, except as specifically provided herein. |
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7.4 | In the event that, during the continuance of this Agreement, Spectrum, its Affiliates or its sublicensees develops any Improvements with respect to the use of Contract Products and/or D-63153 in the Field, Spectrum shall furnish Zentaris with timely written notice of such Improvements, and shall furnish Zentaris with a data package which, in Spectrums reasonable opinion, contains all information, know-how and other data as Zentaris will require in order to implement such Improvements in Zentaris Regulatory Approvals and for manufacture, production, distribution, marketing, sale and/or use of any products whatsoever. Spectrum shall, and hereby does, grant Zentaris an exclusive, perpetual, royalty-free license to use all Improvements developed by Spectrum and/or its Affiliates and all information, know-how and other data pertaining to such Improvements furnished by Spectrum to Zentaris hereunder, outside the Field in the Territory and outside the Territory, and subject to the limitations as provided for in Section 2 above. Spectrum shall, and hereby does, ensure that its sublicensees grant Zentaris and Zentaris licensees a non-exclusive, perpetual royalty-free license to use all Improvements developed by Spectrums sublicensees and all information, know-how and other data pertaining to such Improvements furnished by Spectrum to Zentaris hereunder, outside the Field in the Territory and outside the Territory, and subject to the limitations as provided for in Section 2 above. | |
7.5 | Each Party shall be entitled to disclose all Improvements disclosed to it by the other Party during the period of this Agreement to, in Zentaris case, its licensees and, in Spectrums case, its sublicensees. During the term of this Agreement, the use of Zentaris Improvements by any sublicensees of Spectrum and the use of Spectrums Improvements by any licensee of Zentaris is free of charge. All information regarding such Improvements and Inventions shall be deemed Confidential Information and each Party, and each of its licensees, shall keep such information confidential pursuant to the terms of Section 12. |
8.1 | Spectrum shall be responsible for obtaining its own supply of D-63153 bulk substance and finished dosage form for both clinical and commercial supplies. Zentaris shall provide to Spectrum the remaining 450 g of cGMP D-63153 bulk substance at a price of EURO [***] ( [***]) per [***] to the extent Spectrum chooses to request it. At the time when Spectrum procures additional supply beyond its current inventory of D-63153 bulk substance and, if it chooses, the additional bulk substance mentioned in this Section 8.1 from Zentaris, Spectrum will also assume responsibility for supplying D-63153 bulk substance to Zentaris licensees outside the Territory. Zentaris shall also provide to Spectrum the remaining approximately 1200 vials of D-63153 at [***] if Spectrum chooses to request it. At the time when Spectrum procures additional supply beyond its current inventory of finished dosage form and, if it chooses, the additional finished dosage form from Zentaris mentioned in this Section 8.1, Spectrum will also assume responsibility for supplying D-63153 finished dosage form to Zentaris licensees outside the Territory. For avoidance of doubt, if at any time, Spectrum chooses to discontinue development of D-63153 or Contract Products, then Spectrum will notify Zentaris licensees outside the Territory of such decision and Spectrums obligation to supply such licensees outside the Territory will terminate eighteen (18) months after such notification. |
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8.2 | During the period when bulk substance or finished dosage form supplied by Zentaris remains in use, Zentaris shall, at its sole cost and expense, maintain in full force and effect usual and customary commercial general liability insurance, which shall include product liability coverage. |
9.1 | Spectrum hereby acknowledges that Zentaris is the owner of all of Zentaris Patent Rights and Spectrum shall acquire no rights, title or interest whatsoever in or to any of Zentaris Patent Rights, except as specifically provided in the Agreement. Without limiting the generality of this Section 9.1, Spectrum shall not utilize any Zentaris Patent Rights for any purpose whatsoever, except as specifically authorized in this Agreement. Spectrum shall not register, or attempt to register, any of Zentaris Patent Rights, or otherwise assert any ownership rights with respect to any of Zentaris Patent Rights, in any country within the Territory. | |
9.2 | During the term of this Agreement, Spectrum shall be responsible for prosecuting the patent applications comprised within the Zentaris Patent Rights and for maintaining the patents comprised within the Zentaris Patent Rights. Zentaris shall at Spectrums request take such actions, and shall provide Spectrum with such assistance, as Spectrum shall reasonably request in order to protect, perfect, maintain and prosecute the Zentaris Patent Rights within the Territory. Spectrum shall bear the costs incurred by it in relation to prosecution of the patent applications comprised within Zentaris Patent Rights and in relation to maintenance of the patents comprised within Zentaris Patent Rights, which relate exclusively to D-63153 in the Territory. | |
9.3 | Spectrum shall keep Zentaris informed and shall consult with Zentaris on an ongoing basis regarding prosecution of the patent applications and maintenance of the patents comprised within the Zentaris Patent Rights and any actions which require to be taken in relation thereto. | |
9.4 | In the event that Spectrum elects not to continue prosecuting or maintaining any of the Zentaris Patent Rights, Spectrum shall give to Zentaris, if possible, sixty (60) days, but in any event not less than thirty (30) days, written notice before any relevant deadline relating to or any public disclosure of the relevant Zentaris Patent Rights. Upon receipt of a notice from Spectrum indicating that it intends to cease prosecuting or maintaining any of the Zentaris Patent Rights, Zentaris shall have the right to continue, at its own expense, prosecution or maintenance (as the case may be) of the relevant Zentaris Patent Rights and Spectrum shall at the request and cost of Zentaris do all such acts and execute all such documents as may be necessary to (i) transfer title to the relevant Zentaris Patent Rights to Zentaris and (ii) assist Zentaris with the prosecution and maintenance of the relevant Zentaris Patent Rights. | |
9.5 | Each Party shall furnish the other with timely written notice of any and all infringements and other unauthorized uses by any other person, firm, corporation or other entity of any of Zentaris Patent Rights that come to its attention during the continuance of this Agreement. Spectrum shall be responsible at its expense for taking all actions, in the courts, administrative agencies, or otherwise, including a settlement, to prevent or enjoin any and all such infringements and other unauthorized uses of Zentaris Patent Rights, and Zentaris shall take no action with respect to any such infringement or unauthorized use of Zentaris Patent Rights, without the prior written authorization of Spectrum; provided, however, that Zentaris |
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shall provide at the request and cost of Spectrum such assistance as Spectrum shall reasonably request in connection with any action to prevent or enjoin any such infringement or unauthorized use of any of Zentaris Patent Rights. In the event Spectrum is unable or unwilling to take action against the alleged infringer within (i) one hundred twenty (120) days of the date of notice of such infringement, or (ii) thirty (30) days before the time limit, if any, set forth in the applicable laws and regulations for the filing of such actions, whichever comes first, Zentaris may, but shall not be required to, take such action as Zentaris may deem appropriate to prevent or enjoin the alleged infringement or threatened infringement of a Zentaris Patent Right. In such event, Zentaris shall act at its own expense, and Spectrum shall co-operate reasonably with Zentaris, at the expense of Zentaris, and Spectrum agrees to be named as a nominal party, if necessary. To the extent there is paid any settlement amount or awarded damages, costs or expenses, such amount shall first be applied to reimburse the Party who enforced such action for all reasonable costs and expenses it incurred in enforcing the action. Any amount remaining after this reimbursement shall be considered Net Sales and Zentaris shall receive a royalty pursuant to Section 4.5, with the balance paid to Spectrum. |
10.1 | All patentable Inventions created, generated, conceived, made, developed, or reduced to practice jointly by Spectrum and Zentaris (including their Affiliates or other persons or entities on behalf of Spectrum and Zentaris) as a result of the work performed under this Agreement shall be the joint property of Spectrum and Zentaris each of whom shall have a one-half pro indiviso share. Neither Party shall assign or transfer their respective shares in any such jointly owned patentable Inventions or in any patent applications filed therefore or in any patent granted in respect of any such jointly owned patentable Inventions (all together the Joint Patent Rights) to any Third Party without the other Partys prior written consent such consent not to be unreasonably withheld. | |
10.2 | Spectrum will have the responsibility for handling the filing, prosecution and maintenance of any Joint Patent Rights. Unless agreed otherwise, the Parties will equally bear the costs of such filing, prosecution and maintenance of Joint Patent Rights. In making such a decision, the principles observed by the Parties will be the relative contributions of each Party to the joint Invention, the standards and customs in the industry and expected efficiency in patenting procedures. | |
10.3 | Joint Patent Rights shall be filed in the name of both Parties and each Party shall procure that its respective inventors assign all of their rights and interests to such Joint Patent Rights to both Parties. Each Party shall be free to use and exploit the Joint Patent Rights for any purpose whatsoever. Neither Party shall grant licenses of the Joint Patent Rights to any Third Party without the other Partys prior written consent and on terms and conditions to be agreed with the other Party acting reasonably such consent not to be unreasonably withheld. | |
10.4 | Spectrum shall keep Zentaris informed of the filings, prosecution, and maintenance of the Joint Patent Rights reasonably in advance of any relevant actions and deadlines to allow for review and consultation. In the event that Spectrum elects not to continue prosecuting or maintaining any of the Joint Patent Rights, Spectrum shall give to Zentaris, if possible, sixty (60) days, but in any event not less than thirty (30) days, written notice before any relevant deadline relating to or any public disclosure of the relevant Joint Patent Rights. Upon receipt |
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of a notice from Spectrum indicating that it intends to cease prosecuting or maintaining any of the Joint Patent Rights, Zentaris shall have the right to continue, at its own expense, prosecution or maintenance (as the case may be) of the relevant patent rights and to request the assignment of such right. Spectrum shall at the request and cost of Zentaris do all such acts and execute all such documents as may be necessary to assist Zentaris with the prosecution or maintenance of such patent right as well as with the assignment and transfer of such patent right to Zentaris. | ||
11. | Exchange of Safety Information | |
11.1 | The Parties shall keep each other informed on all reports including publications of adverse events coming to either Partys knowledge with regard to Contract Products and/or D-63153, regardless of the origin of such reports. | |
11.2 | Each Party will report all serious adverse events with a reasonable suspicion of causal relationship (suspected adverse drug reactions) occurring in clinical trials under the use of the Contract Products to the other Party within ten (10) business days after they come to the attention of that Party. In the event of fatal or life-threatening situations related to the Contract Products, adverse events will be reported to the other Party within five (5) business days after they come to the attention of that Party. Details of an exchange of safety information will be agreed separately between the Parties after the Effective Date, which agreement should adhere to the standards required by the appropriate regulatory agencies. | |
11.3 | Each Party is responsible for submitting its own Periodic Safety Update Reports in accordance with the applicable guidelines including the Notice to Marketing Authorization Holders: Pharmacovigilance Guidelines and the ICH E2C Guidelines Clinical Safety Data Management: Periodic Safety Update Reports for Marketed Drugs and will provide a copy of each such Periodic Safety Update Report to the other Party. When data received from the other Party might contribute meaningfully to the safety analysis and influence any proposed or effected changes in the reporting marketing authorization holders product information, these data should be included, with source indicated and discussed in the Periodic Safety Update Reports. | |
12. | Confidentiality Information | |
12.1 | All Confidential Information disclosed, revealed or otherwise made available by one Party (Disclosing Party) to the other Party (Receiving Party) under, or as a result of, this Agreement is furnished to the Receiving Party solely to permit the Receiving Party to exercise its rights, and perform its obligations, under this Agreement. The Receiving Party shall not use any of the Disclosing Partys Confidential Information for any other purpose, and shall not disclose, reveal or otherwise make any of the Disclosing Partys Confidential Information available to any other person, firm, corporation or other entity, without the prior written authorization of the Disclosing Party. | |
12.2 | In furtherance of the Receiving Partys obligations under Section 12.1 hereof, the Receiving Party shall take all appropriate steps, and shall implement all appropriate safeguards, to prevent the unauthorized use or disclosure of any of the Disclosing Partys Confidential Information. Without limiting the generality of this Section 12.2, the Receiving Party shall disclose any of the Disclosing Partys Confidential Information only to those of its officers, |
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employees, agents, consultants, directors, Licensees, sublicensees, potential sublicensees and financial investors that have a need to know the Disclosing Partys Confidential Information, in order for the Receiving Party to exercise its rights and perform its obligations under this Agreement, and only if such officers, employees, agents, consultants, directors, Licensees, sublicensees, potential sublicensees and financial investors have executed appropriate non-disclosure agreements containing substantially similar terms regarding confidentiality as those set out in this Agreement or are otherwise bound by obligations of confidentiality effectively prohibiting the unauthorized use or disclosure of the Disclosing Partys Confidential Information. The Receiving Party shall furnish the Disclosing Party with immediate written notice of any unauthorized use or disclosure of any of the Disclosing Partys Confidential Information by any officer, employee, agents, consultants, directors, licensee or sublicensee of the Receiving Party, and shall take all actions that the Disclosing Party reasonably requests in order to prevent any further unauthorized use or disclosure of the Disclosing Partys Confidential Information. |
12.3 | The Receiving Partys obligations under Sections 12.1 and 12.2 hereof shall not apply to the extent, but only to the extent, that any of the Disclosing Partys Confidential Information: |
(i) | passes into the public domain, or becomes generally available to the public through no fault of the Receiving Party; | ||
(ii) | was known to the Receiving Party prior to disclosure hereunder by the Disclosing Party; | ||
(iii) | is disclosed, revealed or otherwise made available to the Receiving Party by a Third Party that is under no obligation of non-disclosure and/or non-use to the Disclosing Party; | ||
(iv) | is required to be disclosed under applicable law or by court order, or in connection with any application by the Receiving Party for any Regulatory Approvals; provided, however, that the Receiving Party shall furnish the Disclosing Party with as much prior written notice of such disclosure requirement as reasonably practicable, so as to permit the Disclosing Party, in its sole discretion, to take appropriate action, including seeking a protective order, in order to prevent the Disclosing Partys Confidential Information from passing into the public domain or becoming generally available to the public; or | ||
(v) | is independently developed by the Receiving Party without breach of this Agreement as evidenced by contemporaneous written records. |
12.4 | Subject to Section 15, upon expiration or termination of this Agreement for any reason whatsoever, the Receiving Party shall return to the Disclosing Party, or destroy, as the Disclosing Party shall specify in writing, all copies of all documents and other materials that contain or embody any of the Disclosing Partys Confidential Information, except to the extent that the Receiving Party is required by applicable law to retain such documents and materials. Within thirty (30) days after the date of expiration or termination of this Agreement, the Receiving Party shall furnish the Disclosing Party with a certificate, duly executed by an officer of the Receiving Party, confirming that the Receiving Party has complied with it obligations under this Section 12.4. |
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12.5 | All of the Receiving Partys obligations under Sections 12.1 and 12.2 hereof, with respect to the protection of the Disclosing Partys Confidential Information, shall survive the expiration or termination of this Agreement for any reason whatsoever. | |
13. | Warranties and Liabilities of Zentaris | |
Zentaris warrants and represents as follows: | ||
13.1 | As of the Effective Date, the LHRH Patents are in compliance with all legal requirements in the United States regarding the filing, examination, and maintenance fees. To Zentaris present knowledge, as of the Effective Date, all Zentaris Patent Rights are in compliance with all legal requirements regarding the filing, examination, and maintenance fees. The above shall not apply to a requirement that, if not satisfied, would not result in a revocation or lapse or otherwise adversely affect the enforceability of the patents in question. To Zentaris present knowledge, Zentaris has not taken any action or, failed to take any action (including a failure to disclose material prior art in connection with the prosecution of any patent), or used or enforced or, failed to use or enforce any of the Zentaris Patents Rights in a manner that would result in the abandonment or unenforceability of any of the Zentaris Patents Rights. | |
13.2 | To Zentaris present knowledge, as of the Effective Date, no Zentaris Patents Rights have been or are now involved in any interference, reissue, reexamination or opposing proceeding in any jurisdiction within the Territory. To Zentaris present knowledge, no such action has been threatened. To Zentaris present knowledge, other than US Patent number [***], there is no patent of any person that claims the same subject matter as the LHRH Patents, and Zentaris is not aware of any prior art that invalidates any claim of any LHRH Patents for use in the Initial Indications. Spectrum confirms that it is aware of the International Search Reports issued by the International Searching Authority for [***]. | |
13.3 | Zentaris is the owner of all right, title and interest in and to all of the Zentaris Patents Rights. The LHRH Patents are free and clear of any and all encumbrances, covenants, conditions and restrictions or, other adverse claims or interests of any kind or nature, and Zentaris has not received any written notice or claim or, any oral notice or claim, challenging Zentaris complete and exclusive ownership of the LHRH Patents or suggesting that any other person has any claim of legal or beneficial ownership with respect thereto, and there is no agreement, decree, arbitral award or other provision or contingency which obligates Zentaris to grant licenses in the LHRH Patents. To Zentaris present knowledge, the warranties of this Section 13.3 shall also apply to all other Zentaris Patents Rights. | |
13.4 | To Zentaris present knowledge, Zentaris owns or possesses adequate licenses or other rights to use all of the Zentaris Patents Rights necessary to develop, make, have made, use, sell, offer for sale, have sold, import and export and commercialize Contract Products and /or D-63153 in the Field and in the Territory. | |
13.5 | To Zentaris present knowledge, the use of the Zentaris Patents Rights to develop, make, have made, use, sell, offer for sale, have sold, import and export and commercialize Contract Products and/or D-63153 in the Field and in the Territory, would not infringe upon, violate or constitute the unauthorized use of any rights owned or controlled by any Third Party, |
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including any Patent of any Third Party. No litigation is now pending and no notice or other claim has been received by Zentaris, (A) alleging that Zentaris has engaged in any activity or conduct that infringes upon, violates or constitutes the unauthorized use of the Patents of any Third Party, or (B) challenging the ownership, use, validity or enforceability of the LHRH Patents. To Zentaris present knowledge, no litigation is now pending challenging the ownership, use, validity or enforceability of the Zentaris Patent Rights. | ||
13.6 | To Zentaris present knowledge, no Third Party is misappropriating, infringing, diluting or violating any Zentaris Patent Rights, and no claims for any of the foregoing have been brought against any Third Party by Zentaris. Zentaris has taken reasonable steps in accordance with normal industry practice to protect its Zentaris Patent Rights. | |
13.7 | Zentaris has experience as an investor in securities of companies and acknowledges that it can bear the economic risk of its investment in the Shares and [***] issuable to Zentaris pursuant to the terms of this Agreement. Zentaris either (a) has a pre-existing personal or business relationship with Spectrum or any of its officers, directors or controlling persons that is of a nature and duration which enables Zentaris to be aware of the character, business acumen and general business and financial circumstances of Spectrum or (b) by reason of its business or financial expertise or the business or financial experience of its professional advisors who are unaffiliated with and who are not compensated by Spectrum or any affiliate or selling agent of Spectrum, directly or indirectly, has the capacity to protect its own interests in connection with its acquisition of the Shares. Zentaris is an accredited investor as defined under Rule 501(a) of the Securities Act. | |
13.8 | The Shares to be acquired by Zentaris will be acquired for investment for Zentaris own account not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and Zentaris has no present intention of selling, granting any participation in, or otherwise distributing the same. Zentaris does not presently have any contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participations to such person or entity or to any third person or entity, with respect to any of the Shares. Zentaris has not been formed for the specific purpose of acquiring solely the Shares. | |
13.9 | Zentaris has received and reviewed information about Spectrum and has had an opportunity to discuss Spectrums business, management and financial affairs with its management and to review Spectrums facilities in order to reach an informed and knowledgeable decision to acquire the Shares. Zentaris understands and acknowledges that such discussions, as well as any written information issued by Spectrum (i) were intended to describe the aspects of Spectrums business and prospects which Spectrum believes to be material, but were not necessarily an exhaustive description, and (ii) may have contained forward-looking statements involving known and unknown risks and uncertainties which may cause Spectrums actual results in future periods or plans for future periods to differ materially from what was anticipated and that no representations or warranties were or are being made with respect to any such forward-looking statements or the probability of achieving any of the results projected in any of such forward-looking statements. | |
13.10 | Zentaris understands that the Shares will be issued without registration under the Securities Act and without qualification and/or registration under applicable state securities laws (Blue |
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Sky Laws), in reliance upon specific exemptions there from, which exemptions depend upon, among other things, the bona fide nature of the investment intent and the accuracy of Zentaris representations as expressed herein. Zentaris understands that the Shares are restricted securities under applicable U.S. federal and state securities laws and that, pursuant to these laws, Zentaris must hold the Shares indefinitely unless they are registered with the SEC and qualified by state authorities, or an exemption from such registration and qualification requirements is available. Moreover, Zentaris understands that Spectrum is under no obligation to register and/or qualify the Shares. In addition, Zentaris acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and on requirements relating to Spectrum which are outside of Zentaris control, and which Spectrum is under no obligation and may not be able to satisfy. Zentaris acknowledges that Spectrum will make a notation on its stock books regarding the restrictions on transfers set forth in this section and will transfer securities on the books of Spectrum only to the extent not inconsistent therewith. | ||
13.11 | Without in any way limiting the provisions of Section 13.10 above, Zentaris agrees that it will not sell or otherwise dispose of any of the Shares unless such sale or other disposition has been registered or is exempt from registration under the Securities Act and has been registered or qualified or is exempt from registration or qualification under applicable state securities laws. | |
13.12 | Zentaris understands that the Shares, and any securities issued in respect of or exchange for the Shares, may bear one or all of the following legends until they are no longer required by law or the provisions of this Agreement: |
(i) | THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE, AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. NO HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY BE CONDUCTED EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT. | ||
(ii) | Any legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended. | ||
(iii) | The legend set forth above shall be removed by Spectrum from any certificate evidencing Shares upon transfer of such Shares in compliance with Rule 144 under the Securities Act or upon delivery to Spectrum of an opinion, in form and substance and by counsel reasonably satisfactory to Spectrum, that a registration statement under the Securities Act is at that time in effect with respect to the legended security or that such security can be freely transferred without such a registration statement being in effect and that such transfer will not jeopardize the exemption or exemptions from registration pursuant to which the securities were issued. |
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13.13 | Zentaris acknowledges and agrees that Spectrum makes no representation with respect to observance of the laws of Zentaris jurisdiction in connection with any invitation to subscribe for the Shares, including (i) the legal requirements within its jurisdiction for the purchase of the Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences to Zentaris, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Shares, and Zentaris acknowledges and agrees that Spectrum shall have no responsibility for any effects of such laws on Zentaris as a result of Zentaris subscription and payment for and continued beneficial ownership of the Shares. | |
13.14 | Zentaris makes no representation or warranty and specifically disclaims any guarantee that the development of Contract Products and/or D 63153 will be successful, in whole or in part, or that the Zentaris Patent Rights and Zentaris Know-How will be suitable for commercialization. Zentaris expressly disclaims any warranties or conditions, express, implied, statutory or otherwise with respect to Zentaris Patent Rights and Zentaris Know-How, including without limitation, any warranty or merchantability of fitness for a particular purpose or non-infringement. | |
13.15 | Zentaris, as a condition to receiving the Shares and [***], agrees to provide the above representations and warranties in Sections 13.7 through 13.13 as of the Effective Date. | |
13.16 | Zentaris is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of formation. | |
13.17 | Zentaris has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and to perform its obligations under this Agreement, which actions have been duly and validly authorized and approved by all necessary corporate action of Zentaris. | |
13A. Warranties and Liabilities of Spectrum | ||
Spectrum warrants and represents as follows: | ||
13A.1 | Spectrum is aware of the patent USP number [***] and corresponding patents. | |
13A.2 | Spectrums most recent annual report on Form 10-K and quarterly report on Form 10-Q as on file with the SEC are accurate and complete in all material respects and since the date of its most recent Annual Report on Form 10-K no event has occurred or circumstance existed that has had, or is reasonably expected to cause, a Material Adverse Effect on Spectrum. A Material Adverse Effect for purposes of this Section 13A means any effect or change that would be (or could be reasonably expected to be) materially adverse to the business, assets, financial condition or operating results of Spectrum, excluding any adverse change, event, development, or effect arising from or relating to (a) general business or economic conditions, including such conditions related to the business of Spectrum, (b) national or international political or social conditions, including the engagement by the United States in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack upon the United States, or any of its territories, |
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possessions, or diplomatic or consular offices or upon any military installation, equipment or personnel of the United States, (c) financial, banking, or securities markets (including any disruption thereof or any decline in the price of securities generally or any market or index), (d) changes in United States generally accepted accounting principles, and (e) changes in law, rules, regulations, orders, or other binding directives issued by any government entity. | ||
13A.3 | Spectrum is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of formation. Spectrum has full corporate power and authority to conduct its business as it is now being conducted and to own or use the properties and assets that it purports to own or use. Spectrum is duly qualified and in good standing to do business in each jurisdiction in which such qualification is necessary because of the nature of the business conducted by it except where the failure to be so qualified would not reasonably be expected to have a Material Adverse Effect. | |
13A.4 | Spectrum has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and to perform its obligations under this Agreement, which actions have been duly and validly authorized and approved by all necessary corporate action of Spectrum. | |
13A.5 | When issued in accordance with the provisions of this Agreement, the Shares will be duly and validly issued, fully paid, and non-assessable, and to Spectrums present knowledge, will be free of restrictions on transfer other than the restrictions set forth or referred to in Sections 4.2 and 13 of this Agreement. | |
14. | Indemnification and Insurance | |
14.1 | Zentaris shall defend, indemnify and hold Spectrum harmless against any Third Party claims, suits, actions, proceedings, losses, liabilities, damages, costs and expenses (collectively Claims and Liabilities) arising from, related to, or attributable to: |
(i) | any breach of any of Zentaris representations, warranties or covenants set forth in this Agreement; and | ||
(ii) | any other negligent, willful or intentionally wrongful act, error or omission on the part of Zentaris, or any officer, director, employee, agent or representative of Zentaris. |
Zentaris indemnification obligation under this Section 14.1 shall be subject to each of the following conditions: (i) Spectrum shall furnish Zentaris with written notice of any such Claims and Liabilities within thirty (30) days of the date on which Spectrum receives notice thereof; (ii) Zentaris shall be solely responsible for the investigation, defense, settlement and discharge of such Claims and Liabilities (provided that such settlement does not impose any material obligation on the indemnitee or the other Party); and (iii) Spectrum shall at Zentaris cost furnish Zentaris with all assistance reasonably requested by Zentaris in connection with the investigation, defense, settlement and discharge of such Claims and Liabilities. Spectrums failure to comply with its obligations pursuant to this Section 14.1 shall not constitute a breach of this Agreement or relieve Zentaris of its indemnification obligations pursuant to this Section 14.1, except to the extent, if any, that Zentaris defense of the effective claim, action or proceeding actually was materially impaired thereby. |
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14.2 | In the event that it is determined by any court of competent jurisdiction that Spectrums use of Zentaris Patent Rights and/or Zentaris Know-How in accordance with the terms and conditions of this Agreement infringes, or Zentaris reasonably determines that Spectrums use of Zentaris Patent Rights and/or Zentaris Know-How is likely to infringe any Intellectual Property Right of a Third Party, Zentaris shall in consultation with Spectrum use commercially reasonable efforts to (i) procure at Zentaris expense a license from such Third Party authorizing Spectrum to continue to utilize Zentaris Patent Rights; or (ii) modify the Zentaris Know-How, so as to render it non-infringing. In the event that neither of the foregoing alternatives is reasonably available or commercially feasible, Spectrum may at its option either cease using the Zentaris Patent Rights and/or Zentaris Know-How for so long as and to the extent that such Zentaris Patent Rights and/or Zentaris Know-How are infringing the relevant Third Party rights or terminate the rights and licenses granted to Spectrum solely with respect to that county or those countries in which the infringement of Third Party rights has occurred or is likely to occur. | |
14.3 | Zentaris obligations under Sections 14.1 and 14.2 hereof shall not apply to any allegations of infringement of the intellectual property rights of another person, firm, corporation or other entity that would not have arisen but for: (i) Spectrums use of Zentaris Patent Rights and/or Zentaris Know-How in violation of the terms and conditions of this Agreement; (ii) any modification, adaptation or application of Zentaris Know-How made by Spectrum without the prior authorization of Zentaris; or (iii) any combination of the Contract Products with any other products, compounds or materials but only if the allegation of infringement does not relate to D-63153. | |
14.4 | Spectrum shall defend, indemnify and hold Zentaris harmless against any and all Claims and Liabilities arising from, related to, or attributable to: |
(i) | any claim, including any product liability claim, by any Third Party with respect to any of the Contract Products regardless of whether such claim is based on contract, breach of warranty, any form of tort, strict liability, or otherwise | ||
(ii) | any allegation that any of the Contract Products fail to conform with the requirements of any applicable laws and/or any applicable Regulatory Approvals, including, but not limited to, the failure by Spectrum to obtain any required Regulatory Approvals for the Contract Products; | ||
(iii) | any breach of any of Spectrums representations, warranties or covenants set forth in this Agreement; or | ||
(iv) | any other negligent, willful or intentionally wrongful act, error or omission on the part of Spectrum, or any officer, director, employee, agent or representative of Spectrum. |
Spectrums indemnification obligation under this Section 14.4 shall be subject to each of the following conditions: (i) Zentaris shall provide Spectrum with written notice of any such Claims and Liabilities within thirty (30) days after Zentaris receives notice of such Claims and Liabilities; (ii) subject to Spectrum confirming in writing that the indemnity will apply to the relevant Claims and Liabilities, Spectrum shall be solely responsible for the investigation, defense, settlement and discharge of such Claims and Liabilities (provided that such |
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settlement does not impose any material obligation on the indemnitee or the other Party); and (iii) Zentaris shall at Spectrums cost furnish Spectrum with all assistance reasonably requested by Spectrum in connection with the investigation, defense, settlement and discharge of such Claims and Liabilities. Zentaris failure to comply with its obligations pursuant to this Section 14.4 shall not constitute a breach of this Agreement or relief Spectrum of its indemnification obligations pursuant to this Section 14.4, except to the extent, if any, that Spectrums defense of the effective claim, action or proceeding actually was materially impaired thereby. |
14.5 | Spectrum shall, at its sole cost and expense, obtain no later than on the date of First Commercial Sale of the Contract Products in any country within the Territory, and shall maintain in full force and effect during the continuance of this Agreement and thereafter in accordance with Section 14.7 hereof, usual and customary commercial general liability insurance, which shall include product liability coverage. | |
14.6 | Spectrum shall, if possible, and, if any additional expense is involved, subject to reaching agreement with Zentaris as to which Party shall bear the costs thereof, cause Zentaris and Zentaris licensees to be named as additional insured under Spectrums commercial general liability insurance policies under Section 14.5 hereof. Each such commercial general liability insurance policy obtained and maintained by Spectrum under Section 14.5 shall provide for at least thirty (30) days written notice to Zentaris and Zentaris licensors prior to cancellation, non-renewal or material change in such insurance policy. In the event of cancellation or non-renewal of any such commercial general liability insurance policy, Spectrum shall, at its sole cost and expense, obtain replacement insurance coverage, in accordance with the requirements of Section 14.5 hereof, prior to the effective date of such cancellation or non-renewal. | |
14.7 | Zentaris indemnification obligation under Section 14.1 hereof, Spectrums indemnification obligation under Section 14.4 hereof, and Spectrums obligation to maintain commercial general liability insurance under Section 14.5 hereof, shall survive the expiration or termination of this Agreement for any reason whatsoever for a period of five (5) years after the date of expiration or termination hereof. | |
14.8 | Zentaris liability in case of simple negligence shall be excluded. Except in case of willful misconduct, Zentaris shall not be liable to Spectrum for any indirect, punitive or consequential damages, whether based on contract or tort, or arising under applicable law or otherwise. [***] | |
15. | Term and Termination | |
15.1 | This Agreement shall enter into effect on the Effective Date, and shall remain in full force and effect on a country-by-country basis for a period of ten (10) years from the First Commercial Sale of the Contract Products in any country within the Territory or as long as any Contract Product is covered by a valid claim of a Zentaris Patent Right and where there is no generic competition in such country of the Territory, whichever term is longer. | |
15.2 | In the event that either Party (the Breaching Party) commits a material breach or default of |
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any of its obligations hereunder, such material breach to include, but not to be limited to, a material breach of the obligations under Section 3.1 above, the other Party hereto (the Non-Breaching Party) may give the Breaching Party written notice of such material breach or default, and shall request that such material breach or default be cured as soon as reasonably practicable. In the event that the Breaching Party fails to cure such material breach or default within ninety (90) days after the date of the Non-breaching Partys notice thereof, the Non-Breaching Party may terminate this Agreement as a whole or on an Indication-by-Indication basis by giving written notice of termination to the Breaching Party. Termination of this Agreement in accordance with this Section 15.2 shall not affect or impair the Non-Breaching Partys right to pursue any legal remedy, including, but not limited to, the right to recover damages, for any harm suffered or incurred by the Non-Breaching Party as a result of such material breach or default. For purposes of this Agreement, it is not a material breach of this Agreement by Spectrum if the development is delayed due to the following: (i) scientific, medical or technical reasons; (ii) circumstances that are beyond the control of Spectrum; or (iii) the fault of Zentaris. | ||
15.3 | In addition to the termination rights provided for in Section 15.2 hereof, each Party shall have the right to terminate this Agreement, immediately by giving written notice of termination to the other Party, if the other Party files a voluntary petition, or if an involuntary petition is granted in respect of the other Party and appeal proceedings are not commenced within a period of seven (7) days from the date of such petition under the bankruptcy provisions of applicable law, or the other Party is declared insolvent, undergoes voluntary or involuntary dissolution, or makes an assignment for the benefit of its creditors, or fails or is unable to pay its debts as they come due, or suffers the appointment of a receiver or trustee over all, or substantially all, of its assets or properties. | |
15.4 | Notwithstanding any other provision of this Agreement, Spectrum shall have the right to terminate this Agreement in its entirety or with respect to any particular Contract Product and/or country in the Territory, at any time upon sixty (60) days notice to Zentaris. | |
15.5 | Except as set out in Section 15.10 hereof, immediately upon the expiration or termination of this Agreement for any reason whatsoever, Spectrum shall cease all distribution, marketing and sale of the Contract Products under the licenses granted hereunder; provided, however, that, if this Agreement is terminated for any reason other than a breach or default hereunder by Spectrum, Spectrum shall have the right to distribute and sell its existing inventory of the Contract Products for a period of not more than one hundred and twenty (120) days following the date of expiration or termination hereof, subject to Spectrums continuing obligation to pay royalties with respect to the Net Sales derived from the distribution and sale of such existing inventory of the Contract Products, in accordance with the requirements of Section 4.5 hereof. | |
15.6 | Termination of this Agreement for any reason whatsoever shall not relieve Spectrum of its obligations: (i) to pay all royalties and other amounts payable to Zentaris which have accrued prior to, but remain unpaid as of, the date of expiration or termination hereof, or which accrue thereafter, in accordance with Section 15.5 hereof; (ii) to defend, indemnify and hold Zentaris, its licensors and their respective officers, directors, shareholders, employees, agents and representatives harmless against claims and liabilities, as provided in Section 14.4 hereof; and (iii) to maintain commercial general liability insurance coverage, in accordance with the requirements of Sections 14.5 and 14.6 hereof. In addition, termination of this |
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Agreement for any reason whatsoever shall not relieve Zentaris of its obligations to defend, indemnify and hold Spectrum, its licensors and their respective officers, directors, shareholders, employees, agents and representatives harmless against claims and liabilities, as provided in Section 14.1 hereof, or any other surviving obligations. |
15.7 | Except in the case of termination of this Agreement by Spectrum under Sections 15.2 or 15.3, the expiration or termination of this Agreement shall not adversely affect or impair Zentaris, Zentaris Affiliates and Zentaris licensees right to continue to use any and all Improvements licensed by Spectrum to Zentaris under Section 7.4 hereof. Except as otherwise specifically provided in this Agreement, upon expiration or termination of this Agreement for any reason whatsoever, Zentaris shall have no further obligations to Spectrum hereunder. | |
15.8 | Except in the case of termination of this Agreement by Zentaris under Sections 15.2 or 15.3, the expiration or termination of this Agreement shall not adversely affect or impair Spectrums, Spectrums Affiliates and Spectrums sublicensees right to continue to use any and all Improvements licensed by Zentaris to Spectrum under Section 7.2 hereof. Except as otherwise specifically provided in this Agreement, upon expiration or termination of this Agreement for any reason whatsoever, Spectrum shall have no further obligations to Zentaris hereunder. | |
15.9 | In the event of termination of this Agreement by Zentaris pursuant to Sections 15.2 or 15.3 or by Spectrum pursuant to Sections 15.4, Zentaris shall have the right to use all the Development Data in the Field and in the Territory and to demand from Spectrum the transfer of Regulatory Approvals for the territory concerned to Zentaris or a person or company named by Zentaris within ninety (90) days after the termination date against payment of all external costs which Spectrum incurred in connection with obtaining the Regulatory Approvals to be transferred. If Regulatory Approvals have not been obtained by Spectrum, Zentaris may claim from Spectrum that Spectrum transfers to Zentaris the status of an applicant for the Regulatory Approvals and notifies the competent regulatory authority thereof and supplies Zentaris with all documents already prepared by Spectrum for the filing of applications for Regulatory Approvals. | |
15.10 | In the event of termination of this Agreement by Spectrum pursuant to Sections 15.2 or 15.3, the license rights contained in Sections 2.1 and 2.2 shall continue in full force and effect, Spectrums obligations under Sections 4 to 10 hereof shall terminate and from the date of such termination the participation payment and the royalty rates set out in Sections 4.3 and 4.5 will be reduced by [***] percent ([***]%). | |
15.11 | Notwithstanding the foregoing, in the event of any termination of this Agreement by Spectrum pursuant to Sections 15.2 or 15.4 or by Zentaris pursuant to Section 15.2 with respect to fewer than all of the Contract Products and/or fewer than all of the countries in the Territory, the Development Data and/or Regulatory Approvals to be transferred, granted and otherwise assigned to Zentaris under Section 15.9 shall be expressly limited to those pertaining to the Contract Products and/or the countries in the Territory to which such termination applies. |
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16. | General Provisions | |
16.1 | Assignment | |
Subject to the other terms of this Agreement, neither Party shall have the right or the power to assign any of its rights, or delegate or subcontract the performance of any of its obligations under this Agreement, without the prior written authorization of the other Party, such written authorization not to be unreasonably withheld or delayed; provided, however, that the prior written authorization of the other Party shall not be required for a Party to assign any of its rights, or delegate or subcontract the performance of any of its obligations hereunder to an Affiliate or pursuant to a sale of substantially all of the assets of the Party, merger, consolidation, reorganization or other similar transaction. Any permitted assignment or delegation hereunder by either Party, whether to an Affiliate or pursuant to a sale of substantially all of the assets of the Party, merger, consolidation, reorganization or other similar transaction pursuant to this Section 16.1, or pursuant to the prior written authorization of the other Party, shall not relieve such Party of any of its obligations under this Agreement, including, but not limited to, the Partys obligation to make royalty payments with respect to any and all Net Sales derived by any of the Partys assignees or sublicensees from the distribution, marketing and sale of any of the Contract Products. | ||
16.2 | Force Majeure | |
Neither Party shall be liable for any failure to perform, or any delay in the performance of, any of its obligations under this Agreement to the extent, but only to the extent, that such Partys performance is prevented by the occurrence of an event of force majeure. For purposes of this Section 16.2, an event of force majeure shall mean and include, war, civil war, insurrection, rebellion, civil unrest, fire, flood, earthquake, adverse weather conditions, strike, lockout, labor unrest, unavailability of supplies, materials or transportation, acts of the public enemy, acts of government authorities, and, in general, any other cause or condition beyond the reasonable control of the party whose performance is affected thereby. In the event that a Partys performance is affected by the occurrence of any event of force majeure, that Party shall furnish immediate written notice thereof to the other Party hereto. | ||
16.3 | Notices | |
All notices, reports and other communications between the Parties under this Agreement shall be sent by registered air mail, postage prepaid and return receipt requested, by international air courier, or by facsimile, with a confirmation copy sent by registered air mail or international air courier, addressed as follows: |
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To: Zentaris | Aeterna Zentaris GmbH | ||
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Weismullerstrasse 50 | |||
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D-60314 Frankfurt/Main | |||
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Germany | |||
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Attention: Prof. Dr. Jürgen Engel | |||
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Facsimile: +49 69 42602 3444 | |||
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With a cc to: | |||
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Aeterna Zentaris GmbH |
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Weismiillerstrasse 50 | |||
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D-60314 Frankfurt/Main | |||
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Attention: Legal Department | |||
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Facsimile: +49 69 42602 3444 | |||
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To: Spectrum | Spectrum Pharmaceuticals, Inc. | ||
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701 N. Green Valley Parkway, Suite 200 | |||
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Henderson, NV 89074 | |||
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Attention: Rajesh C. Shrotriya, M.D. | |||
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Facsimile: (702) 990-3309 | |||
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With a cc to: | |||
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Spectrum Pharmaceuticals, Inc. | |||
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157 Technology Drive | |||
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Irvine, CA 92602 | |||
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Attention: Legal Department | |||
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Facsimile: (949) 788-6706 |
16.4 | Governing Law, Jurisdiction | |
This Agreement shall be governed by, and interpreted in accordance with the laws of Switzerland, without reference to conflicts of laws principles. The United Nations Conventions on Contracts for the International Sale of Goods shall not be applicable to this Agreement. The validity of the intellectual property rights shall be subject to an evaluation under the law of the country in which the intellectual property rights were applied for or have been issued. Exclusive jurisdiction shall vest with the Geneva courts. | ||
16.5 | Severability | |
If any provision of this Agreement is determined by any court or administrative tribunal of competent jurisdiction to be invalid or unenforceable, the Parties shall negotiate in good faith a replacement provision that is commercially equivalent, to the maximum extent permitted by applicable law, to such invalid or unenforceable provision. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of the other provisions of this Agreement. | ||
16.6 | Entire Agreement and Amendments | |
This Agreement, together with all Exhibits attached hereto, constitutes the entire agreement between the Parties, and supersedes all prior agreements, understandings and communications between the Parties, with respect to the subject matter hereof. No modification or amendment of this Agreement shall be binding upon the Parties unless in writing and executed by the duly authorized representative of each of the Parties; this shall also apply to any change of this clause. | ||
16.7 | Waivers | |
The failure by either Party hereto to assert any of its rights hereunder, including, but not limited to, the right to terminate this Agreement due to a breach or default by the other Party |
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hereto, shall not be deemed to constitute a waiver by that Party of its right thereafter to enforce each and every provision of this Agreement in accordance with its terms. |
16.8 | Section References | |
Any reference to a Section in the Agreement shall be the reference to the total of the new Sections, e.g. a reference to Section 4.5 shall now be a reference to Sections 4.5.1 and 4.5.2. | ||
17. | Public Announcements | |
17.1 | Except as required by law (including, without limitation, the applicable disclosure requirements of any relevant regulatory authority or stock exchange) and as permitted by Section 12.3, neither Party shall make any public announcement concerning this Agreement, any Contract Product or any other subject matter hereof without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed. It shall not be unreasonable for a Party to withhold consent with respect to any public announcement containing any of such Partys Confidential Information. In the event of any required or proposed public announcement, (i) the Parties shall consult with each other in good faith as to the timing thereof, and (ii) the Party making such announcement shall provide the other Party with a copy of the proposed text prior to such announcement sufficiently in advance of the scheduled release of such announcement to afford such other Party a reasonable opportunity to review and comment upon the proposed text. Notwithstanding the foregoing, the Parties agree to prepare a mutually agreeable press release that may be used by either Party in connection with this Agreement, and any further announcement containing substantially the same information may be used without the need to seek the consent of the other Party. In the case of unintentional public disclosure concerning this Agreement, any Contract Product or any other subject matter hereof, the disclosing Party shall promptly inform the other Party of such disclosure and the other Party shall be entitled to make a public announcement regarding the subject matter of the disclosure. The other Party shall notify the disclosing Party of their intention to make such an announcement. | |
17.2 | Following a Partys consent to or approval of the public announcement of any information pursuant to this Section 17, both Parties shall be entitled to make subsequent public announcements of such information without renewed compliance with this Section 17, unless the scope and/or duration of such consent or approval is expressly limited. | |
17.3 | Upon conclusion of this Agreement, the Parties will publish a press release on their future cooperation. |
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Aeterna Zentaris GmbH
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Spectrum Pharmaceuticals, Inc. | |||||
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By: /s/ Jürgen Engel
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By: /s/ Rajesh C. Shrotriya
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Title: Managing Director
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Title: Chairman, CEO and President | |||||
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By: /s/ Matthias Seeber
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Title: Managing Director
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1. | Section 1, shall be replaced, in its entirety, as follows : | ||
Consulting Services. The Consultant agrees to perform consulting and advisory services as may be requested by Spectrum, related to Spectrums products, and as Spectrum and the Consultant shall agree from time to time. The Consultant shall render such services either in person (at Spectrum or at such other location as is reasonably acceptable to Spectrum and the Consultant) or by telephone, as Spectrum may reasonably request. | |||
2. | Section 2, shall be modified, as follows : |
| Spectrum will pay Consultant a retainer of $33,333 per month from this Amendment No. 1 Effective Date through June 18, 2010. | ||
| For services rendered on or after June 18, 2010, Consultant will revert to a payment rate of $400 per hour. | ||
| Spectrum will also reimburse Consultant for all travel (Business Class for flights 3 or more hours in duration) and other out of pocket expenses reasonably incurred by Consultant in connection with his consultation services, so long as, in the case of a travel assignment, the assignment is undertaken at the Spectrums request or otherwise preapproved by Spectrum in advance. Consultants travel time during any travel assignment hereunder, including visits to Spectrums office, will be deemed to be time incurred in the performance of services hereunder. Appropriate documentation should be forwarded to Spectrum showing expenses, substantially in accordance with Spectrum documentation requirements applicable to its employees in the ordinary course. |
Spectrum Pharmaceuticals, Inc. | Luigi Lenaz, M.D. | |||||
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By:
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/s/ Shyam Kumaria | By: | /s/ Luigi Lenaz, M.D. | |||
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Shyam Kumaria | Signature | ||||
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V.P., Finance |
1. | Section 1, shall be replaced, in its entirety, as follows : | ||
Consulting Services. The Consultant agrees to perform consulting and advisory services as may be requested by Spectrum, related to Spectrums products, and as Spectrum and the Consultant shall agree from time to time. The Consultant shall render such services either in person (at Spectrum or at such other location as is reasonably acceptable to Spectrum and the Consultant) or by telephone, as Spectrum may reasonably request. | |||
2. | Section 2, shall be modified, as follows : |
| For consulting services rendered on or after July 2, 2010, Consultant will revert to a payment rate of $250 per hour. | ||
| Spectrum will also reimburse Consultant for all travel (Business Class for flights 3 or more hours in duration) and other out of pocket expenses reasonably incurred by Consultant in connection with his consultation services, so long as, in the case of a travel assignment, the assignment is undertaken at the Spectrums request or otherwise preapproved by Spectrum in advance. Consultants travel time during any travel assignment hereunder, including visits to Spectrums office, will be deemed to be time incurred in the performance of services hereunder. Appropriate documentation should be forwarded to Spectrum showing expenses, substantially in accordance with Spectrum documentation requirements applicable to its employees in the ordinary course. |
Spectrum Pharmaceuticals, Inc. | Luigi Lenaz, M.D. | |||||
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By:
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/s/ Shyam Kumaria | By: | /s/ Luigi Lenaz, M.D. | |||
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Shyam Kumaria
S.V.P., Finance |
Signature |
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BIOGEN IDEC INC. |
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By: | /s/ Paul J. Clancy | |||
Name: | Paul J. Clancy | |||
Title: | Chief Financial Officer | |||
CELL THERAPEUTICS, INC.
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By: | /s/ Louis A. Bianco | |||
Name: | Louis A. Bianco | |||
Title: | Exec. Vice President, Finance and Admin. | |||
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RIT ONCOLOGY, LLC
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By: | /s/ Shyam Kumaria | |||
Name: | Shyam Kumaria | |||
Title: | Manager | |||
BIOGEN IDEC INC
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By: | /s/ Paul J. Clancy | |||
Name: | Paul J. Clancy | |||
Title: | Chief Financial Officer | |||
SUBSIDIARY NAME | INCORPORATION | DATE | ||
Spectrum Pharmaceuticals GmbH
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Switzerland | 04/26/97 | ||
Spectrum Pharma Canada Inc.
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Canada | 01/25/08 | ||
OncoRx Pharma Private Limited
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India | 05/01/08 | ||
RIT Oncology, LLC
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Delaware | 11/05/08 |
1. | I have reviewed this Annual Report on Form 10-K of Spectrum Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
1. | I have reviewed this Annual Report on Form 10-K of Spectrum Pharmaceuticals, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |