Distribution And Product Services Agreement

Exhibit 10.18


DISTRIBUTION AND PRODUCT SERVICES AGREEMENT*


Dated as of May 15, 1998


Between


INTEGRATED COMMERCIALIZATION SOLUTIONS, INC.


and


IMMUNOMEDICS, INC. - -------- * Confidential portions omitted and filed separately with the Securities and
Exchange Commission.


DISTRIBUTION AND PRODUCT
SERVICES AGREEMENT


This Distribution and Product Services Agreement ("Agreement") made as of this 15th day of May, 1998 by and between INTEGRATED COMMERCIALIZATION SOLUTIONS, INC. ("ICS") and IMMUNOMEDICS, INC. ("IMMU").


RECITALS


A. IMMU, a Delaware corporation, is a biopharmaceutical Company that manufactures and sells pharmaceutical products including CEA-Scan(r) (the "Product") which has U.S.F.D.A. approval for human use.


B. ICS, a California corporation and a wholly-owned subsidiary of Bergen Brunswig Specialty Company, a California corporation, which is a major operating division of Bergen Brunswig Corporation, is in the business of providing distribution and product support services to drug manufacturers and other sectors of the healthcare industry.


C. IMMU desires to engage ICS to provide product support services including Customer Account Set-up, Customer Service/Order Management, Warehousing/Distribution, Invoicing/Accounts Receivable Management and Credit/Collection Services for the Product and such other IMMU products as the parties may agree from time to time to add by addendum hereto.


NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:


1. Appointment


1.1. IMMU hereby appoints ICS as its non-exclusive agent to provide product support services for the Product in the U.S.A. and the U.S. territories. ICS represents and warrants that it has the facilities and personnel necessary to satisfactorily and timely perform the services to be provided by it under this Agreement.


1.2. IMMU hereby engages ICS to provide the services described in this Agreement for the fees listed in Schedule "A" attached hereto and by this reference made a part hereof.


2. Services


For the fees listed in Schedule "A", ICS will provide the following services:


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2.1. Customer Account Set-up


ICS will establish, maintain and update a customer data base to support IMMU and perform the following activities.


2.1.1. Obtain all necessary documentation to establish new customer accounts, including, without limitation, a credit application and the appropriate current radioactive materials handling license as issued by the Nuclear Regulatory Commission or other governmental agency having jurisdiction; and


2.1.2. Perform the necessary procedures to verify extension of credit to customers. The cost of third party verification (TRW, D&B, etc.) shall be borne by IMMU.


2.2. Customer Service/Order Management.


ICS will provide customer service representatives to perform the following order process management activities.


2.2.1. Staffing during normal customer service hours (8:00 a.m. CT to 6:00 p.m. CT) including a live operator greeting;


2.2.2. Management of inbound telephone calls, faxes and EDI transmissions relating to ordering, marketing and distribution;


2.2.3. New account processing, including credit verification; and


2.2.4. Coordinating inquiries regarding technical, clinical and medical issues and referring directly to IMMU to assure an appropriate response by IMMU.


2.3. Warehousing/Distribution.


ICS will provide the following warehousing and distribution services:


2.3.1. Warehouse and inventory the Product at the ICS distribution facility at [*]. Product that has met all regulatory product release requirements will be received and placed in inventory for distribution. ICS and IMMU will comply with all FDA regulations including product lot record retention.


2.3.2. Maintain inventory under appropriate conditions as specified by IMMU.


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2.3.3. Provide continuous inventory maintenance, security and control.


2.3.4. Package (including packaging and shipping materials) and ship designated q uantities pursuant to customer requirements and IMMU guidelines.


2.3.5. Shipment/handling of outdated/damaged products in accordance with FDA regulations and IMMU direction.


2.3.6. Maintain a database required to facilitate a recall in accordance with FDA guidelines and requirements should that ever become necessary.


2.4. Invoicing/Accounts Receivable Management


2.4.1. ICS will invoice customers in the name of IMMU, on IMMU invoices.


2.4.2. Product pricing will be determined by IMMU and communicated to ICS. Price changes will be communicated in writing to ICS.


2.4.3. Special handling charges (including drop shipments) will be invoiced to the customers for non-standard shipments, as agreed with IMMU.


2.4.4. ICS will maintain appropriate accounts receivable data (including detailed aged trial balances) to facilitate customer account management and collections.


2.4.5. Payments will be directed to be made to a lockbox at a bank selected by IMMU. IMMU shall cause remittance advices to be forwarded to ICS on a timely basis for cash application.


2.4.6. ICS will be responsible for dispute resolution, deduction management, etc.


2.5. Credit/Collection


2.5.1. ICS will verify and establish credit within the broad guidelines established by IMMU.


2.5.2. Credit holds will be placed on any account which is sixty (60) days past due. Release of credit hold must be authorized by IMMU.


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2.5.3. ICS will establish the capability of accepting credit card payments and IMMU will accept orders for payment via credit card.


2.5.4. All credits to be issued to customers, other than clerical, recording or invoicing errors, require pre-approval of IMMU.


2.5.5. IMMU shall bear the ultimate credit risk for the IMMU accounts.


2.6. Other


2.6.1. IMMU will pay all costs, expenses, insurance, and import duties, if any, for delivery of all Product to the ICS facility. ICS will visually inspect each shipment of Product for external container or package damage or loss in transit (based upon records provided to ICS from IMMU). Contingent upon ICS receiving the appropriate records to enable batch verification, ICS shall notify IMMU when damage or loss has occurred within three business days of receipt of Product by ICS. ICS will store and ship all Product in compliance with good manufacturing practice guidelines and other FDA requirements. ICS will store Product at 2 (degree) to 8 (degree) centigrade at all times.


2.6.2. Upon receipt of the order transmission from customer service Product will be shipped in regulatory compliant refrigerated shippers (which will be directed to maintain the required temperature). Orders received by [*] will be shipped [*]. ICS will make every reasonable effort to process orders received after [*]. in the event of an emergency. Products will be distributed on an FEFO (first expired, first out) basis.


2.6.3. Emergency Deliveries. In emergencies Product will be shipped same day if necessary and costs will be passed through to the customer.


3. Data Management and Reporting (Key Program Activity and Management Reports)


The following types of reports will be available to IMMU for the fees listed in Schedule "A" attached hereto:


3.1. transmission of daily sales by unit and dollars


3.2. sales reports by territory/region


3.3. inventory reports


3.4. credits


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3.5. new accounts


3.6. chargeback, rebate data


IMMU and ICS will jointly determine the types of reports, data elements and formats, and the frequency of reports that will be required to provide key management and program oversight information. IMMU shall receive up to [*] of the above standard reports without additional charge. There will be additional charges for any further reports requested, based upon programming charges.


It is intended that IMMU will have the ability and the right to access via electronic media the data maintained by ICS on behalf of IMMU for reporting purposes.


4. Recalls


4.1. In the event that it becomes necessary to conduct a recall, market withdrawal or field correction (a "Recall") of any Product, IMMU shall conduct the Recall and shall have primary responsibility therefor, and ICS shall cooperate with IMMU in recalling any affected Product. If the Recall was due to the acts or omissions of IMMU, then IMMU shall pay or reimburse, as the case may be, all of ICS's direct out-of-pocket expenses, including but not limited to any reasonable attorney's fees and expenses, incurred by ICS in connection with performing any such Recall. If the Recall was due to the acts or omissions of ICS, then ICS shall pay or reimburse, as the case may be, all of IMMU's direct out-of-pocket expenses, including but not limited to any reasonable attorneys fees or expenses, incurred by IMMU in connection with performing any such Recall. Each of the parties shall use its reasonable best efforts to minimize the expenses of Recall when it occurs. IMMU shall inform ICS of the proposed Recall within forty-eight (48) hours of the initiation of the Recall. IMMU and ICS will jointly develop Recall standard operating procedures.


4.2. FDA Correspondence and Inspections


Each of the parties shall provide the other with a copy of any correspondence or notices received by such party from FDA specifically relating to distribution of the Product within three (3) days of receipt. Each party shall also provide the other copies of any responses to any such correspondence or notices within three (3)days of making the response. ICS shall notify IMMU of any FDA inspections of ICS's facilities specifically relating to any of the Product and, if reasonably possible, shall afford IMMU the opportunity to be present at such inspection.


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5. Delivery of Product/Risk


5.1. IMMU shall deliver, and ICS shall accept, such quantities of the Product as shall be necessary for ICS to fill orders for the Product. All Product delivered to ICS will be held by ICS as agent for IMMU and will remain at all times under and subject to the ownership, direction and control of IMMU until sold through ICS to IMMU's customers. Pricing shall be established by IMMU. Title to the Product held by ICS will pass directly from IMMU to the IMMU customers who purchase the Product through ICS. IMMU shall bear the risk of loss of the Product not yet delivered by ICS to a customer, whether by fire, theft or other casualty; provided, however, that ICS shall indemnify IMMU for Product which is lost or damaged as a result of ICS's negligence. During the term of this Agreement, ICS will store Product at its facility in [*].


5.2. ICS shall accept returns from customers only with prior written approval of IMMU. ICS shall forward unusable Product to IMMU for final disposition in accordance with applicable regulations.


6. Certain Obligations of the Parties


6.1. IMMU and ICS will jointly develop standard operating procedures ("SOP's") as may be required from time to time in accordance with IMMU directives and consistent with FDA regulations.


6.2. IMMU will deliver Product in boxes containing one (1) vial per box.
6.3. IMMU will provide package inserts for all single vial and other quantities.


6.4. IMMU warrants and represents to ICS that the execution and performance of this Agreement will not breach any existing contracts or arrangements that IMMU has entered into with any third parties.


6.5. IMMU will assist ICS in training ICS customer support personnel concerning CEA-Scan.


7. Term And Termination


7.1. Initial Term


This Agreement shall be effective as of May 15, 1998, and shall continue in full force and effect thereafter for a period of [*] from such effective date unless sooner terminated as provided herein. This Agreement shall automatically renew for successive [*] periods unless terminated as provided herein.


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7.2. Termination Without Cause


This Agreement may be terminated by either party without cause on one hundred eighty (180) days written notice to the other.


7.3. A party may terminate this Agreement immediately upon written notice for the following causes:


7.3.1. the commencement of a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the other party of its debts under any bankruptcy, insolvency, corporation or other similar law now or hereafter in effect; or (ii) the other party's making a general assignment for the benefit of creditors, or the other party's becoming insolvent, or the other party taking any corporate action to authorize any of the foregoing;


7.3.2. the other party's failure to pay any amount that is due to the non-breaching party under this Agreement and such failure continues for seven (7)days after the other party receives notice of such breach from the non-breaching party;


7.3.3. the other party's failure to perform any of its material obligations under this Agreement, and such failure continues for thirty (30) days after the other party receives notice of such breach from the non-breaching party; provided, however, if the other party has commenced to cure such breach within such thirty (30) days, but such cure is not completed within said thirty (30)days, the other party shall be afforded the amount of additional time reasonably necessary to complete said cure, provided that the other party diligently pursues curing the breach until completion; and


7.3.4. the other party's failure to perform the services as described in Section 2 for a period of more than thirty (30) days as a result of a force majeure event specified in Section 2 ...