Exhibit 10.46
SUPPLY AGREEMENT
This Agreement is made and entered into as of the last day signed below (the
"Effective Date") by and between Xxxxxxxxx-Xxxxx Laboratories LLC, having a
principal place of business at 0000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx,
00000-0000 ("Xxxxxxxxx-Xxxxx") and Hemispherx Biopharma, Inc., having a
principal place of business at 0000 Xxxx X. Xxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx, 00000 ("Hemispherx" or "Client"). Both Xxxxxxxxx-Xxxxx and
Hemispherx are referred to herein individually as "Party" and collectively as
the "Parties."
WITNESSETH THAT:
WHEREAS, Client has a commercial interest in the manufacture of the Product (as
hereafter defined) and requests the services of Xxxxxxxxx-Xxxxx in the
manufacturing of the Product pursuant with the terms and conditions contained
herein, and Xxxxxxxxx-Xxxxx desires to manufacture the Product on behalf of
Client pursuant to the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1. Certain terms are defined in the text of this Agreement. In addition,
as used in this Agreement, the following definitions shall apply:
1.1. "Act" shall mean the U.S. Food, Drug and Cosmetics Act of 1934
(21 U.S. C.ss.301 et seq.) and the regulations promulgated
thereunder, as the same may be amended from time to time.
1.2. "Polymer I and Polymer C12U" or "Polymer" shall mean the
polymer pharmaceutical starting material of the Product
further defined in Specifications.
1.3. "Affiliate" shall mean any individual, firm, corporation or
other legal entity that directly or indirectly controls, is
controlled by, or is under common control with, a Party. As
used in the preceding sentence, "control" means possession,
whether direct or indirect, of the power to direct or cause
the direction of the management and policies of such entity,
whether pursuant to the ownership of voting securities, by
contract or otherwise.
1.4. "Batch" or "Lot" shall mean each separate and distinct
quantity of Product processed under continuous conditions and
designated by Xxxxxxxxx-Xxxxx with a batch or lot number.
1.5. "cGMP Regulations" means the applicable current Good
Manufacturing Practices as promulgated by the FDA from time to
time under the Act, as presently codified in 21 CFR Parts 210
and 211.
1.6. "Certificate of Analysis" or "COA" shall mean a document
executed by Xxxxxxxxx-Xxxxx to certify
that a Batch or Lot of Product meets the Specifications.
1.7. "Client's Technology Package" shall mean the technical
information supplied by Client to Xxxxxxxxx-Xxxxx to enable
Xxxxxxxxx-Xxxxx to carry out its obligations hereunder. Items
in Client's Technology Package may include, but are not
limited to, raw material and manufacturing component
specifications, intermediate Product specifications,
analytical and microbiological method validation reports,
analytical method transfer protocols, filter validation
reports, and storage specifications.
1.8. "Confidential Information" shall mean any nonpublic
information of Xxxxxxxxx-Xxxxx or Client including without
limitation, trade secrets, business methods, operating
procedures, manufacturing methods and processes, prices, and
customer information, whether of a written, oral, or visual
nature.
1.9. "FDA" shall mean the United States Food and Drug
Administration.
1.10. "Intellectual Property" shall mean patents, copyrights,
trademarks, trade names, service marks, licenses and other
intellectual property rights of a Party.
1.11. "Master Batch Record" shall mean a written description of the
procedure to be followed by Xxxxxxxxx-Xxxxx in processing of a
Batch or Lot of Product, which description shall include, but
not be limited to, a complete list of all active and inactive
ingredients, components, weights and measures used in
processing the Product within the meaning of 21 CFR part
211.186, or its successor as in effect from time to time.
1.12. "Product" shall mean the pharmaceutical product described in
the Specifications.
1.13. "Quality Systems Agreement" shall mean an agreement to be
executed by the Parties relating to quality systems.
1.14. "Regulatory Authority" shall mean any federal, state, local,
or international regulatory agency, department, bureau, or
other governmental agency.
1.15. "Specifications" shall mean the performance parameters for the
Product. Specifications may be amended from time to time by
written agreement of the Parties.
1.16. "Third Party" shall mean any party other than Client or
Xxxxxxxxx-Xxxxx and their respective Affiliates.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2. The Parties agree to the following representations and warranties:
2.1. Each Party represents and warrants to the other as follows:
2.1.1. It has full power and authority to enter into this
Agreement and perform its obligations hereunder.
2.1.2. Subject to Section 3.2 of this Agreement, it has such
permits, licenses, and authorizations of Regulatory
Authorities, including, with respect to Client,
Regulatory Authorities with jurisdiction over the
Product, as are necessary to own its respective
properties, conduct its business and perform its
obligations hereunder.
2.1.3. It is not currently debarred, suspended, or otherwise
excluded by the FDA or any other Regulatory Authority
from conducting business and shall not knowingly use
in connection with this Agreement the services of any
person debarred by the FDA.
2.2. Xxxxxxxxx-Xxxxx represents and warrants to Client as follows:
2.2.1. Xxxxxxxxx-Xxxxx shall process the Product in
compliance in all material respects with the Quality
Systems Agreement, the Master Batch Record, the Act
and the cGMP Regulations.
2.2.2. The Product when delivered shall comply in all
material respects with the Specifications; provided,
however, that Xxxxxxxxx-Xxxxx shall have no liability
to Client or any Third Party for any breach of the
foregoing representation and warranty to the extent
that any such breach is caused in whole or in part by
Client or by any materials provided by Client.
2.2.3. The manufacturing facilities for the Product shall
conform in all material respects to the standards of
those Regulatory Authorities with jurisdiction over
such facilities, including, but not limited to, those
set forth in the cGMP Regulations.
2.3. Client represents and warrants to Xxxxxxxxx-Xxxxx as follows:
2.3.1. Neither Client's Technology Package, nor the use
thereof by Xxxxxxxxx-Xxxxx, shall infringe, violate
nor misappropriate the rights of any Third Party.
2.3.2 Client has all necessary rights to enable
Xxxxxxxxx-Xxxxx to process the Product for Client in
accordance with the terms and conditions of this
Agreement.
2.3.3 All laboratory, scientific, technical and/or other
data submitted by or on behalf of Client (including
Client's Technology Package) relating to the Product,
to the best of Client's knowledge, shall be complete
and correct and shall not contain any falsification,
misrepresentation or omission.
2.3.4. All materials supplied by or on behalf of Client for
use in processing the Product
shall conform to the Specifications.
2.4. THE WARRANTIES SET FORTH HEREIN ARE THE SOLE AND EXCLUSIVE
WARRANTIES MADE BY EITHER PARTY UNDER THIS AGREEMENT, AND
NEITHER PARTY MAKES ANY OTHER WARRANTIES EXPRESS OR IMPLIED OR
ARISING BY LAW, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE OR ARISING FROM THE COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OF TRADE.
2.5. EXCEPT AS NECESSARY TO SATISFY A THIRD PARTY CLAIM INDEMNIFIED
UNDER ARTICLE 6 OF THIS AGREEMENT, CLIENT'S SOLE AND EXCLUSIVE
REMEDY, AND XXXXXXXXX-XXXXX'X SOLE AND EXCLUSIVE LIABILITY AND
OBLIGATION FOR ANY BREACH OF A REPRESENTATION AND WARRANTY SET
FORTH IN SECTION 2.2 SHALL BE FOR XXXXXXXXX-XXXXX TO PEFORM
ITS OBLIGATIONS UNDER SECTIONS 4.1 AND 4.2 OR UNDER SECTION
4.4, AS THE CASE MAY BE.
2.6 EXCEPT AS NECESSARY TO SATISFY A THIRD PARTY CLAIM INDEMNIFIED
UNDER ARTICLE 6 OF THIS AGREEMENT, AND/OR IN THE EVENT OF A
BREACH OF THE CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE
9 OF THIS AGREEMENT, UNDER NO CIRCUMSTANCES WILL EITHER PARTY
BE LIABLE TO THE OTHER UNDER ANY CONTRACT, TORT, STRICT
LIABILITY, NEGLIGENCE OR OTHER LEGAL OR EQUITABLE THEORY, FOR
THE COST OF COVER OR FOR ANY INDIRECT, INCIDENTAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS) IN
CONNECTION WITH THE SUBJECT MATTER OF THIS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, THE PRODUCT OR ANY SERVICES
PROVIDED IN CONNECTION WITH THE PRODUCT, EVEN IF A PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
2.7 EXCEPT AS NECESSARY TO SATISFY A THIRD PARTY CLAIM INDEMNIFIED
UNDER ARTICLE 6 OF THIS AGREEMENT, AND/OR IN THE EVENT OF A
BREACH OF ITS CONFIDENTIALITY OBLIGATIONS SET FORTH IN ARTICLE
9 OF THIS AGREEMENT, UNDER NO CIRCUMSTANCES SHALL
XXXXXXXXX-XXXXX'X TOTAL LIABILITY TO CLIENT IN CONNECTION WITH
THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, WITHOUT
LIMITATION, THE PRODUCT OR ANY SERVICES PROVIDED IN CONNECTION
WITH THE PRODUCT, EXCEED THE TOTAL AMOUNT PAID BY CLIENT TO
XXXXXXXXX-XXXXX UNDER THIS AGREEMENT.
2.8 NOTHING SET FORTH IN THIS AGREEMENT SHALL RESTRICT OR LIMIT
XXXXXXXXX-XXXXX'X RIGHT TO RECOVER DIRECT DAMAGES, INCLUDING
LOST PROFITS, FOR ANY BREACH BY CLIENT OF ITS OBLIGATION TO
PAY THE PRICE FOR DELIVERED PRODUCT IN ACCORDANCE WITH ARTICLE
3.
ARTICLE 3
SUPPLY AND PROCESSING OF PRODUCT; FORECASTS, PURCHASE ORDERS AND PAYMENT
3. The Parties agree to the following supply and processing provisions:
3.1. Except as set forth in the following sentence, Client shall be solely
responsible for obtaining and maintaining all permits, licenses, and
authorizations necessary for Xxxxxxxxx-Xxxxx to process, ship and otherwise deal
with Product. Xxxxxxxxx-Xxxxx shall be solely responsible for securing and
maintaining approval of Xxxxxxxxx-Xxxxx'x facility as a registered FDA facility.
3.2 Polymer:
3.2.1Client will supply, at its expense, sufficient quantities of Polymer to
Xxxxxxxxx-Xxxxx'x facility prior to the date of delivery set forth in any
purchase order to enable Xxxxxxxxx-Xxxxx to meet its obligations hereunder.
All such Polymer shall conform to the Specifications. Title to Polymer
shall remain at all times with Client. Except as expressly provided
otherwise in Sections 3.2.2, 3.2.3 or 3.2.4, risk of loss of the Polymer
shall remain at all times with Client.
3.2.2If Polymer is lost or damaged prior to processing as a result of
Xxxxxxxxx-Xxxxx'x negligent acts or omissions, Xxxxxxxxx-Xxxxx will allow
Client a purchase price credit for that number of Batches for which Polymer
was lost or damaged as its sole liability and Client's sole remedy. For
example, if Client has provided Xxxxxxxxx-Xxxxx with sufficient Polymer to
process three Batches, and such Polymer is lost or damaged prior to
processing as a result of Xxxxxxxxx-Xxxxx'x negligent acts or omissions,
Xxxxxxxxx-Xxxxx will process three replacement Batches at no charge to
Client (except that Client shall provide replacement Polymer at Client's
expense).
3.2.3If Polymer is lost or damaged in processing as a result of
Xxxxxxxxx-Xxxxx'x negligent acts or omissions, Xxxxxxxxx-Xxxxx will replace
the spoiled Batch at no charge to the Client (except that Client shall
provide replacement Polymer at Client's expense) as Xxxxxxxxx-Xxxxx'x sole
liability and Client's sole remedy.
3.2.4In the event any loss or damage of Polymer is caused by the gross
negligence or willful misconduct of Xxxxxxxxx-Xxxxx, as Xxxxxxxxx-Xxxxx'x
sole liability and Client's sole remedy with respect to such gross
negligence or willful misconduct Xxxxxxxxx-Xxxxx, at its option, shall (i)
reimburse Client for the documented actual direct manufacturing cost to
Client of the lost or damaged Polymer or (ii) allow Client a purchase price
credit equal to the documented actual direct manufacturing cost to Client
of the lost or damaged Polymer, up to a maximum credit of Five Hundred
Thousand Dollars ($500,000), which purchase price credit shall be applied
against future purchase orders of the Product.
3.3. Client shall be responsible for release of Product for sale or
distribution.
3.4. Client shall be responsible for any stability testing program for the
Product required by the Act and the cGMP Regulations.
3.5. Client shall be responsible for maintaining any retention samples of the
Product required by the Act and the cGMP Regulations.
3.6. Client shall have the right, upon reasonable advance notice to
Xxxxxxxxx-Xxxxx, to conduct an annual audit to observe and inspect
Xxxxxxxxx-Xxxxx'x facilities and procedures for processing Product. Such annual
inspections will be made by no more than four (4) Client representatives, who
shall execute confidentiality agreements as requested by Xxxxxxxxx-Xxxxx. Each
annual inspection shall last no more than two (2) business days. During such
inspection, Client's representatives shall (a) be accompanied by a
representative of Xxxxxxxxx-Xxxxx, (b) follow such security and facility access
procedures as are reasonably requested by Xxxxxxxxx-Xxxxx, and (c) use good
faith efforts to avoid disrupting Xxxxxxxxx-Xxxxx'x operations.
3.7 Unless specifically requested otherwise by Client in writing,
Xxxxxxxxx-Xxxxx will purchase or manufacture reasonable quantities of components
and raw materials (other than Polymer, which will be supplied by Client in
accordance with Section 3.3), based on the estimates set forth in the Forecast
(as defined below). If the quantity of Product set forth in any purchase order
deviates from the estimate set forth in the immediately preceding Forecast, and
Xxxxxxxxx-Xxxxx'x reliance thereon causes obsolescence of any such components or
raw materials, Client shall reimburse Xxxxxxxxx-Xxxxx for its out-of-pocket
costs incurred in association therewith (including, but not limited to, any
out-of-pocket costs related to returning such component or raw materials to the
vendor or otherwise disposing thereof).
3.8. Forecasts, Purchase Orders, Price, Terms of Payment:
3.8.1. Forecasts: At least 90 days in advance of Client's first purchase order
for Product, Client shall supply Xxxxxxxxx-Xxxxx with a written, rolling
twelve (12) month forecast of Client's estimated requirements for Product
from Xxxxxxxxx-Xxxxx during such 12 month period (the "Forecast"). Every 90
days thereafter, Client will update and extend the Forecast to cover the 12
months beginning with the date of such updated Forecast. Each Forecast
shall include an estimated number of Batches and requested delivery dates
for the 12 months covered by such Forecast. Amounts set forth in a Forecast
are estimates, to be used for planning purposes only, and Forecasts shall
not constitute purchase orders.
3.8.2. Purchase Orders: Client will provide Xxxxxxxxx-Xxxxx with a firm purchase
order at least sixty (60) days prior to the earliest delivery date
specified in such purchase order. All purchase orders will be sent by
facsimile or electronic mail to the address specified by Xxxxxxxxx-Xxxxx.
3.8.2.1. Each purchase order and any acknowledgment thereof shall be governed by
the terms of this Agreement. In the event a Party uses forms or documents
to place or accept purchase orders that contain terms and conditions that
are in addition to or contrary to those in this Agreement, the Parties
agree and acknowledge that such forms or documents will be used for
convenience only, and that no terms or conditions set forth therein, except
with respect to quantity, shall be of any force or effect. Xxxxxxxxx-Xxxxx
shall be deemed to have accepted a purchase order unless it objects within
ten business days after receiving a purchase order. If Xxxxxxxxx-Xxxxx'x
objection is based on its belief that it cannot accommodate the delivery
date requested in the purchase order then the Parties will agree on an
alternative delivery schedule. If Xxxxxxxxx-Xxxxx'x objection is based on
Xxxxxxxxx-Xxxxx'x inability to supply the quantity of Product set forth in
the purchase order, Client may cancel the purchase order without penalty,
payment or consequence. Once a purchase order is accepted or deemed
accepted by Xxxxxxxxx-Xxxxx, Xxxxxxxxx-Xxxxx will be required to use
commercially reasonable efforts to produce the quantity of Product set
forth in the purchase order for delivery on the dates(s) set forth in such
purchase order.
3.8.2.2. Client reserves the right to cancel or postpone any purchase order
after acceptance by Xxxxxxxxx-Xxxxx. However, should Client cancel or
postpone any purchase order within fourteen (14) calendar days prior to the
scheduled delivery date, Client shall pay Xxxxxxxxx-Xxxxx a cancellation
fee equivalent to 50% of the purchase price for the Product described in
the purchase order.
3.8.3. Price and Shipping: Client shall pay Xxxxxxxxx-Xxxxx, in U.S. dollars,
the price per quotation 576-2-9-0 attached as Exhibit A annexed hereto. The
price excludes all taxes, duties, shipping, insurance and other expenses.
Beginning on the first anniversary of the Effective Date, and on each
succeeding anniversary of the Effective Date during the term of this
Agreement, the then current price shall be increased by the annual
percentage increase, if any, for the most recent twelve (12) month period
for which figures are available in the "Producer Price Index -
Pharmaceutical Preparations" (code PCU2834) (the "PPI") published by the
U.S. Bureau of Labor Statistics (the "BLS") or, if the same is no longer
published, the successor index published by the BLS that is most similar
thereto. If the PPI is discontinued and not replaced with a corresponding
or similar index, then the Parties shall, in good faith, agree upon a
replacement PPI. Price increases shall be effective for all new purchase
orders placed after the applicable anniversary. Product shall be delivered
FOB Xxxxxxxxx-Xxxxx'x facility, Spokane, Washington, either freight collect
or freight prepaid, and Xxxxxxxxx-Xxxxx will ship Product to the
destination, and via the carrier, that Client specifies in the purchase
order. Risk of loss shall pass to Client when the Product is tendered to
the carrier for shipment. Shipment and insurance of Product shall be
arranged by Client and the price and liability of such shipment shall be
borne by Client.
3.8.4. Terms of Payment: Invoices shall be payable to Xxxxxxxxx-Xxxxx within
thirty (30) calendar days after Client's acceptance or deemed acceptance of
Product as set forth in Article 4. All amounts not paid when due shall bear
interest from the due date at the rate of one and one-half percent (1.5%)
per month.
3.8.4.1. Invoices shall be sent to the following address:
Hemispherx BioPharma, Inc.
Attention: Accounts Payable
0000 Xxxx X. Xxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
3.8.4.2. All payments due hereunder to Xxxxxxxxx-Xxxxx shall be sent by wire
transfer of funds via the Federal Reserve Wire Transfer System to:
Xxxxx Fargo Bank
ABA# 000000000
Beneficiary:Xxxxxxxxx-Xxxxx Laboratories LLC
Account # 4131352601
Swift Code XXXXXX0X
Or by mail to:
Xxxxxxxxx-Xxxxx Laboratories LLC
X.X. Xxx 000000
Xxxxxx, XX 00000-0000
3.9. Right of First Refusal to Manufacture:
In the event Client makes any material modifications,
enhancements, or improvements to the Product, or develops a
derivative thereof, Client shall notify Xxxxxxxxx-Xxxxx and
provide Xxxxxxxxx-Xxxxx with a written description of the
proposed specifications for such modified, enhanced, improved,
derived or new Product (the "Descriptive Notice"), as well as
any related information which may be reasonably requested by
Xxxxxxxxx-Xxxxx within ten (10) days of Xxxxxxxxx-Xxxxx'x
receipt of the Descriptive Notice. Xxxxxxxxx-Xxxxx shall have
thirty (30) days following the receipt of such information in
which to agree with Client upon satisfactory terms for the
price and terms for the manufacture of such Product before
Client may begin negotiations with any Third Party regarding
such manufacture.
ARTICLE 4
INSPECTION AND REJECTION OF PRODUCT; QUALITY CONTROL
4. The Parties agree to the following provisions for acceptance or rejection of
Product and certain matters relating to quality control:
4.1. Each Batch of Product delivered to Client hereunder shall be accompanied by
a Certificate of Analysis signed by a duly authorized representative of
Xxxxxxxxx-Xxxxx. Client shall have 30 days from the date of receipt of
Product to inspect and reject acceptance by written notice to
Xxxxxxxxx-Xxxxx; provided, however, that any such notice shall set forth
Client's reasons for rejection in reasonable detail and provided, further,
that Client may reject Product only if: (i) Client claims a material breach
of Xxxxxxxxx-Xxxxx'x representations and warranties in Section 2.2 of this
Agreement with respect to such Product; or (ii) Xxxxxxxxx-Xxxxx has failed
to deliver a Certificate of Analysis for such Product. If Xxxxxxxxx-Xxxxx
does not receive Client's written notice of rejection within such 30 day
period, Client shall be deemed to have accepted Product.
4.2 In the event Client provides Xxxxxxxxx-Xxxxx with a timely notice of
rejection as set forth in Section 4.1, Client shall return the rejected
Product to Xxxxxxxxx-Xxxxx at Xxxxxxxxx-Xxxxx'x expense. Xxxxxxxxx-Xxxxx
shall have 30 days following receipt of rejected Product in which to test
such Product. If Xxxxxxxxx-Xxxxx does not dispute a rejection,
Xxxxxxxxx-Xxxxx shall rework or replace the rejected Product promptly, at
Xxxxxxxxx-Xxxxx'x expense (except for replacement Polymer, which will be
provided by Client at Client's expense) and such rework or replacement
shall constitute Client's exclusive remedy and Xxxxxxxxx-Xxxxx'x sole
liability with respect to such rejection (unless Sections 3.3.3 or 3.3.4
apply, in which case, Client shall have the remedy set forth therein). If
Xxxxxxxxx-Xxxxx disputes a rejection, Xxxxxxxxx-Xxxxx shall provide Client
with written notice of such dispute within 30 days after receiving the
returned Product, and the Parties shall use commercially reasonable efforts
to resolve the dispute amicably and promptly. If the Parties are unable to
reach a resolution within 30 days after Client's notice of rejection, the
returned Product shall be submitted to any independent laboratory or
consultant mutually acceptable to the Parties, whose decision as to the
conformity of such Product with the Specifications shall be final and
binding. The Party against whom the dispute is decided shall pay any
charges for such laboratory or consultant. If the laboratory or consultant
determines that the returned Product did not conform to the Specifications,
Xxxxxxxxx-Xxxxx shall replace the rejected Product at no charge to Client
(except that Client shall provide replacement Polymer at Client's expense),
and such replacement shall constitute Client's exclusive remedy and
Xxxxxxxxx-Xxxxx'x sole liability with respect to such rejected Product
(unless Sections 3.3.3 or 3.3.4 apply, in which case, Client shall have the
remedy set forth therein).
4.3 In addition to any safety requirements set forth in the Quality Systems
Agreement or the Master Batch Record, Xxxxxxxxx-Xxxxx shall develop, adopt
and enforce safety procedures for processing Product in compliance in all
material respects with the Act and the cGMP Regulations. Xxxxxxxxx-Xxxxx
shall be responsible for treating and/or disposing, in compliance with the
Act and the cGMP Regulations in all material respects, all waste generated
as a result of such processing, and for maintaining required records
related thereto.
4.4 In the event (a) any Regulatory Authority issues a request, directive or
order that any of the Product be recalled, withdrawn, or corrected, (b) a
court of competent jurisdiction orders such an action, or (c) either Party
reasonably determines that any Product should be recalled, withdrawn or
corrected, the Parties shall take all appropriate corrective actions as
they reasonably mutually determine, and shall cooperate in any governmental
investigations relating to the Product. As between Xxxxxxxxx-Xxxxx and
Client, Client shall be solely responsible for initiating, conducting, and
managing any recall, withdrawal or correction effort. Client shall be
solely responsible for all related expenses, except that Xxxxxxxxx-Xxxxx
shall be liable for such expenses to the extent that the recall, withdrawal
or correction resulted solely from a breach by Xxxxxxxxx-Xxxxx of any of
its representation and warranties set forth in Section 2.2 of this
Agreement.
4.5 Client shall provide to Xxxxxxxxx-Xxxxx copies of all material regulatory
submissions that relate to Xxxxxxxxx-Xxxxx'x services under this Agreement,
which copies shall be provided reasonably in advance of submission.
Xxxxxxxxx-Xxxxx shall consult with Client in responding to questions from
the Regulatory Authorities regarding processing of the Product. Each Party
shall notify the other promptly after receipt of any notice of any
Regulatory Authority inspection, investigation or other inquiry involving
the Product. The Parties shall cooperate with each other during any such
inspection, investigation or other inquiry including, but not limited to,
allowing, upon reasonable request, a representative of the other to
participate during such inspection, investigation or other inquiry, and
providing copies of all relevant documents.
4.6. The Parties agree to the following provisions regarding adverse events and
complaints:
4.6.1 Client shall be responsible to (a) report adverse
events involving the Product to the FDA and other
Regulatory Authorities, and (b) respond to quality
complaints and medical and technical inquiries,
respecting the Product.
4.6.2 In the event Xxxxxxxxx-Xxxxx (a) receives information
regarding any adverse event
relating to the Product, (b) receives any complaints
relating to the Product, (c)
receives any medical or technical inquiry relating to
the Product, or (d) discovers or
is notified of any material defect in the Product, it
shall (i) promptly notify Client
and (ii) conduct an investigation in accordance with
its normal procedures for
complaints, inquiries or discoveries of that nature
and promptly report the results of
such investigation to Client. The Parties shall
reasonably cooperate with and assist
each other, at Client's cost, in connection with any
such matter.
ARTICLE 5
INTELLECTUAL PROPERTY RIGHTS
536: 5.The Parties agree to the following provisions regarding Intellectual
Property:
5.1 License Grant: Client hereby grants Xxxxxxxxx-Xxxxx a
nonexclusive, United States, royalty-free license during the
term of this Agreement to use Client's Technology Package and
Client's Intellectual Property rights in the performance of
Xxxxxxxxx-Xxxxx'x obligations under this Agreement.
5.2. Limitation of Use: Except as expressly stated in this
Agreement, no Intellectual Property rights of any kind or
nature are conveyed by this Agreement and except as set forth
in Section 5.1, neither Party shall have any right, title or
interest in or to the other Party's Intellectual Property
rights for any purpose whatsoever without such other Party's
prior written consent. Upon termination of this Agreement for
whatever reason, neither party shall use or exploit in any
manner whatsoever any Intellectual Property rights of the
other Party.
ARTICLE 6
INDEMNIFICATION FOR THIRD PARTY CLAIMS
6. The Parties agree to the following clauses regarding indemnification for
Third Party claims:
6.1. Indemnification by Client: Client shall indemnify, defend and
hold Xxxxxxxxx-Xxxxx, its
Affiliates and their respective directors, officers,employees,
agents, successors and assigns
harmless from and against any damages, losses, judgments,
claims, suits, actions, liabilities,
costs and expenses (including, but not limited to, reasonable
attorneys' fees) (collectively,
"Liabilities") resulting from any Third Party claims or suits
arising out of (1) the ownership,
use, handling, distribution, marketing or sale of the Product,
(2) Client's breach of any of
its warranties or representations, or failure to perform any
of its obligations, hereunder, or
(3) Client's negligent acts or omissions or willful
misconduct.
6.2. Indemnification by Xxxxxxxxx-Xxxxx: Xxxxxxxxx-Xxxxx shall
indemnify, defend and hold Client, its Affiliates and their
respective directors, officers, employees, agents, successors
and assigns harmless from and against any Liabilities
resulting from any Third Party claims arising out of (1)
Xxxxxxxxx-Xxxxx'x services in manufacturing, processing or
assembling the Product,(2) Xxxxxxxxx-Xxxxx'x breach of any of
its warranties or representations, or failure to perform any
of its obligations, hereunder or (3) Xxxxxxxxx-Xxxxx'x
negligent acts or omissions or willful misconduct.
6.3. Indemnification Procedures:
6.3.1. Any Party hereto seeking indemnification hereunder
(in this context the "Indemnified Party") shall
notify the other Party (in this context the
"Indemnifying Party") in writing reasonably promptly
after the assertion against the Indemnified Party any
claim by a Third Party (a "Third Party Claim") in
respect of which the Indemnified Party intends to
base a claim for indemnification hereunder.
6.3.2. (1) The Indemnifying Party shall have the right, upon
written notice given to the Indemnified Party within
thirty (30) calendar days after receipt of the notice
from the Indemnified Party of any Third Party Claim,
to assume the defense and handling of such Third
Party Claim, at the Indemnifying Party's sole
expense, in which case the provisions of Section
6.3.2(2) below shall govern.
(2) The Indemnifying Party shall select counsel
reasonably acceptable to the Indemnified Party in
connection with conducting the defense and handling
of such Third Party Claim, and the Indemnifying Party
shall defend or handle the same in consultation with
the Indemnified Party, and shall keep the Indemnified
Party appraised of the status of the Third Party
Claim. The Indemnifying Party shall not, without the
prior written consent of the Indemnified Party, which
consent will not be unreasonably withheld, agree to a
settlement of any Third Party Claim that could
directly or indirectly lead to liability or create
any financial or other obligation on the part of the
Indemnified Party for which the Indemnified Party is
not entitled to indemnification hereunder. The
Indemnified Party shall cooperate with the
Indemnifying Party and shall be entitled to
participate in the defense or handling of such Third
Party Claim with its own counsel at its own expense.
6.3.3. (1) If the Indemnifying Party does not give written
notice to the Indemnified Party, within thirty (30)
calendar days after receipt of the notice from the
Indemnified Party of any Third Party Claim, of the
Indemnifying Party's election to assume the defense
or handling of such Third Party Claim, the provisions
of Section 6.3.3(2) below shall govern.
(2) The Indemnified Party may, at the Indemnifying
Party's expense, select counsel in connection with
conducting the defense or handling of such Third
Party Claim and defend or handle such Third Party
Claim in such manner as it may deem appropriate,
provided, however, that the Indemnified Party shall
keep the Indemnifying Party timely appraised of the
status of such Third Party Claim and shall not settle
such Third Party Claim without the prior written
consent of the Indemnifying Party, which consent
shall not be unreasonably withheld. If the
Indemnified Party defends or handles such Third Party
Claim, the Indemnifying Party shall cooperate with
the Indemnified Party and shall be entitled to
participate in the defense or handling of such Third
Party Claim with its own counsel and at its own
expense.
6.3.4. The indemnification remedies in this Article 6, shall
constitute the sole and exclusive remedies of the
Parties with respect to any Third Party Claims
arising under or relating to this Agreement.
6.4. Limitation of Liability: Notwithstanding any other provisions
of this Agreement, Xxxxxxxxx-Xxxxx'x aggregate indemnification
liability to Client and its Affiliates for Third Party Claims
pursuant to this Article 6 shall not exceed Five Million
United States Dollars (US $5,000,000).
ARTICLE 7
INSURANCE
Each of Client and Xxxxxxxxx-Xxxxx shall obtain and maintain, either
itself or through one or more of its Affiliates, with reputable
carriers, product liability insurance with limits of not less than One
Million United States Dollars (US $1,000,000) per claim, and Three
Million United States Dollars (US $3,000,000) annual aggregate by no
later than the scheduled delivery date for the first Batch of Product
delivered under this Agreement. Upon request, each Party shall furnish
the other Party with a certificate that such insurance is in force. In
the event of any proposed cancellation, non-renewal, or material
adverse change in such coverage, the other Party hereto shall be given
at least thirty (30) calendar day's advance written notice thereof.
ARTICLE 8
TERM AND TERMINATION
8. The Parties agree to the following clauses regarding the term and termination
of this Agreement:
8.1. Term: This Agreement shall remain in full force and effect for a period of
five years.
8.2. Termination for Default: This Agreement may be terminated by either Party
in the event of material breach or default by the other Party of the terms and
conditions hereof; provided, however, the other Party shall first give to the
defaulting Party written notice of the proposed termination or cancellation of
this Agreement, specifying the grounds therefor. Upon receipt of such notice,
with respect to such defaults as are capable of being cured, the defaulting
Party shall have sixty (60) calendar days to respond by curing such default. If
the breaching Party does not respond or fails to work diligently and to cure
such breach within such sixty (60) day period, then the other Party may
terminate this Agreement.
8.3. Bankruptcy or Insolvency:
8.3.1. Either Party may terminate this Agreement upon the
occurrence of any of the following
with respect to the other Party:
8.3.1.1. The filing of an involuntary petition
under the U.S. Bankruptcy Code, or
any other similar law, which is not
dismissed within sixty (60) days after
the filing date;
8.3.1.2. The filing of a voluntary petition by
such other Party for relief under
the U.S. Bankruptcy Code or other similar
law; or
8.3.1.3. The failure of such other Party to pay
its debts when they become due.
8.4. Rights and Duties Upon Termination:
Termination of this Agreement for whatever reason, shall not
affect the obligations of either Party, including payment of
obligations which have accrued prior to such termination. Upon
termination of this Agreement, other than due to an uncured
breach of this Agreement by Xxxxxxxxx-Xxxxx, Client shall
purchase from Xxxxxxxxx-Xxxxx, at the out-of-pocket cost to
Xxxxxxxxx-Xxxxx, any components and raw materials purchased
for the Product which Xxxxxxxxx-Xxxxx has purchased based upon
any Forecast. Xxxxxxxxx-Xxxxx shall ship such components and
raw materials to Client at Client's expense and in accordance
with Client's instructions promptly after receiving such
payment. Articles 1 and 2, Sections 3.9.3 and 8.4, and
Articles 6, 9, 10, 11 and 12 , and all other provisions that
may reasonably be construed as surviving the termination of
this Agreement shall survive the termination.
ARTICLE 9
CONFIDENTIALITY
9. In carrying out their respective obligations under this Agreement, it
is recognized by Xxxxxxxxx-Xxxxx and Client that each may disclose to
the other Confidential Information of the disclosing Party, and they
hereby agree as follows with respect to any such disclosure:
9.1. Form of Disclosure: Confidential Information may be disclosed
in oral, written or electronic form.
9.2. Obligations: The receiving Party shall hold Confidential
Information in confidence and use it only for the purpose of
performing its obligations under this Agreement. Except as
provided below, the receiving Party shall not disclose,
disseminate or distribute any such Confidential Information to
any Third Party unless prior written authorization has been
obtained from the disclosing Party. These obligations shall
not apply to:
9.2.1. Information which, at the time of disclosure, is
generally known to the public;
9.2.2. Information which, after disclosure, becomes
generally known to the public by
publication or otherwise, except by breach of this
Agreement by the receiving Party;
9.2.3. Information which the receiving Party can demonstrate
by its written records was in the receiving Party's
possession at the time of the disclosure, and which
was not acquired directly or indirectly, from the
disclosing Party under an obligation of
confidentiality;
9.2.4. Information which is lawfully disclosed to the
receiving Party on a non-confidential
basis by a Third Party who is not obligated to the
disclosing Party or any other Third
Party to retain such information in confidence;
9.2.5. Information which results from independent research
and development by the receiving
Party, as shown by competent evidence; or
9.2.6. Information which is required to be disclosed by
legal process; provided that the Party so disclosing
such Confidential Information timely informs the
other Party and uses commercially reasonable efforts
to limit the disclosure, maintain its confidentiality
to the extent possible, and permit the other Party to
attempt by appropriate legal means to limit such
disclosure.
9.3. Each Party covenants and agrees that it has and shall use
commercially reasonable efforts to
prevent the unauthorized use, disclosure, copying,
dissemination or distribution of
Confidential Information. Without limiting the foregoing,
the receiving Party shall make
Confidential Information of the other Party available only
to those of its employees, agents
and other representatives who have a need to know the same
for the purpose carrying out this
Agreement, who have been informed that the Confidential
Information belongs to the disclosing
Party and is subject to this Agreement, and who have agreed
or are otherwise obligated to
comply with the confidentiality provisions of this Agreement.
ARTICLE 10
FORCE MAJEURE/DISPUTE RESOLUTION
10. The Parties agree to the following:
10.1.Effect of Force Majeure: Neither Party shall be held liable or
responsible for any loss or damages resulting from any failure or
delay in its performance due hereunder (other than payment of money)
caused by force majeure. As used herein, force majeure shall be deemed
to include any condition beyond the reasonable control of the affected
Party including, without limitation, strikes or other labor disputes,
war, riot, earthquake, tornado, hurricane, flood or other natural
disasters, fire, civil disorder, explosion, accident, sabotage, lack
of or inability to obtain adequate fuel, power, materials, labor,
containers, transportation, supplies or equipment, compliance with
governmental requests, laws, rules, regulations, orders or actions;
inability despite good faith efforts to renew operating permits or
licenses from local, state or federal governmental authorities;
breakage or failure of machinery or apparatus; national defense
requirements; or supplier strike, lockout or injunction.
10.2.Notice of Force Majeure: In the event either Party is delayed or
rendered unable to perform due to force majeure, the affected Party
shall give notice of the same and its expected duration to the other
Party promptly after the occurrence of the cause relied upon, and upon
the giving of such notice the obligations of the Party giving the
notice will be suspended during the continuance of the force majeure;
provided, however, such Party shall take commercially reasonable steps
to remedy or mitigate the force majeure with all reasonable dispatch.
The requirement that force majeure be remedied with all reasonable
dispatch shall not require the settlement of strikes or labor
controversies by acceding to the demands of the opposing party.
10.3.Dispute Resolution: The Parties hereto agree to perform the terms of
this Agreement in good faith, and to attempt to resolve any
controversy, dispute or claim arising hereunder in good faith. Any
dispute regarding the validity, construction, interpretation, or
performance of this Agreement (other than provisions, hereof relating
to any Intellectual Property rights, or the confidentiality
obligations contained in Article 9 hereof) shall be (1) first
attempted to be resolved between the CEO/President of each Party and
failing that (2) submitted to binding arbitration in Spokane,
Washington, U.S.A. to be conducted in accordance with the Arbitration
Rules of the American Arbitration Association; provided, however, that
nothing in this Section 10.3 shall be construed to preclude either
Party from seeking provisional remedies, including, but not limited
to, temporary restraining orders and preliminary injunctions, from any
court of competent jurisdiction, in order to protect its rights
pending arbitration, but such preliminary relief shall not be sought
as a means of avoiding arbitration. Further, in the event of a dispute
under Section 4.2, the Parties shall comply with the dispute
resolution provisions set forth in Article 4. Any arbitration
hereunder shall be submitted to an arbitration tribunal made up of
three (3) members, one of whom shall be selected by Client, one of
whom shall be selected by Xxxxxxxxx-Xxxxx, and one of whom shall be
selected by the other two arbitrators. The third arbitrator selected
by the first two shall chair the panel. All arbitration proceedings
shall be conducted in English. The order or award of the arbitrators
shall be reasoned and shall be final and may be enforced in any court
of competent jurisdiction. The substantially prevailing Party shall be
entitled, in addition to any other rights and remedies it may have, to
reimbursement for its expenses incurred thereby, including court cost
and reasonable attorneys' fees, from the substantially non-prevailing
Party.
ARTICLE 11
NOTICES
Except as otherwise specifically set forth in Section 3.9.2
with respect to purchase orders, all notices and other
communications provided herein shall be in writing and shall
be deemed to be delivered when deposited in the United States
mail, postage prepaid and certified, or hand-delivered, or
sent by facsimile, or express service courier, charges
prepaid, to the address of the other Party designated below:
------------------------------------- --------------------------------------
Client Xxxxxxxxx-Xxxxx
Hemispherx Biopharma, Inc. Xxxxxxxxx-Xxxxx Laboratories LLC
1716 Xxxx X. Xxxxxxx Boulevard 0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000 Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, M.D. Attention: Xxxxxxx X. Xxxxxxxxx, Ph.D.
FAX: (000) 000-0000
------------------------------------- ---------------------------------------
The addresses and persons provided above may be changed by either Party
by providing the other Party with written notice of such change.
ARTICLE 12
MISCELLANEOUS
12. The Parties agree to the following miscellaneous clauses:
12.1. Entire Agreement: This Agreement and attached exhibit
contains the entire understanding
between the Parties with respect to the subject matter hereof,
and may be modified only by a
written instrument duly executed by each Party's authorized
representative.
12.2. Independent Contractors: The Parties are independent
contractors and nothing contained in this Agreement shall be
construed to place them in the relationship of partners,
principal and agent, employer/employee or joint venturers.
Neither Party shall have power or right to bind or obligate
the other, nor hold itself out as having such authority.
12.3. Publicity: Except as explicitly set forth below in Section
12.4, any press release, publicity or other form of public
written disclosure related to this Agreement prepared by one
Party shall be submitted to the other party prior to release
for written approval, which approval shall not be unreasonably
withheld or delayed by such other Party.
12.4. Use of Party's Name: Except as expressly provided or
contemplated hereunder and except as
otherwise required by applicable law, no right is granted
pursuant to this Agreement to either
Party to use in any manner the trademarks or name of the other
Party, or any other trade name,
service xxxx, or trademark owned by or licensed to the other
Party in connection with the
performance of the Agreement. To the extent required by
applicable law, the Parties shall be
permitted to use the other Party's name and disclose the
existence and terms of this Agreement
in connection with required public regulatory filings, public
securities filings and private
placement memoranda and documentation, using reasonable
commercial efforts to protect the
confidentiality of the terms of this Agreement.
12.5. Severability: If any provision of this Agreement or any
Exhibit is held to be invalid or unenforceable to any extent,
then (a) such provision shall be interpreted, construed or
reformed to the extent reasonably required to render it valid,
enforceable and consistent with the Parties' original intent
underlying such provision and (b) such invalidity or
unenforceability shall not affect any other provision of this
Agreement or any other agreement between the Parties.
12.6. Assignment: This Agreement may not be assigned or otherwise
transferred by either Party
without the prior written consent of the other Party;provided,
however, either Party may,
without such consent, assign this Agreement
(a) in connection with the transfer or sale of all or
substantially all of the assets of
such Party or the line of business of which this
Agreement forms a part, or
(b) in the event of a merger or consolidation of a Party.
Any purported assignment in violation of the preceding shall
be void. Any permitted assignee shall assume all obligations
of its assignor under this Agreement. No assignment shall
relieve either Party of responsibility for the performance of
any obligation which accrued prior to the effective date of
such assignment.
12.7. Governing Law: This Agreement shall be governed by and
construed in accordance with the laws of the state of
Washington, irrespective of any conflicts of law rule which
may direct or refer such determination of applicable law to
any other state, and if this Agreement were performed wholly
within the state of Washington.
12.8. Headings: Paragraph headings and captions used herein are for
convenience of reference only
and shall not be used in the construction or interpretation
of this Agreement.
12.9. Waiver: Neither Party's waiver of any breach or failure to
enforce any of the terms and conditions of this Agreement at
any time, shall in any way affect, limit or waive such Party's
right thereafter to enforce and compel strict compliance with
every term and condition of this Agreement. Any such waiver
shall be made in writing.
12.10. Construction: This Agreement has been jointly prepared on
the basis of the mutual
understanding of the Parties and shall not be construed
against either Party by reason of such
Party's being the drafter hereof or thereof.
12.11. Exhibits: Any and all exhibits referred to herein form an
integral part of this Agreement and
are incorporated into this Agreement by this reference.
12.12 Counterparts: This Agreement may be executed in counterparts,
each of which shall be deemed an original and both of which
together shall constitute a single instrument.
IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of the
Effective Date.
FOR: XXXXXXXXX-XXXXX LABORATORIES LLC FOR: HEMISPHERX BIOPHARMA, INC.
/s/ /s/
---------------------------- -----------------------
Signature Signature
Xxxxxxx X. Xxxxxxxxx, Ph. D. Xxxxxxx X. Xxxxxx, M.D.
---------------------------- -----------------------
Printed Name Printed Name
President and CEO Chairman and CEO
---------------------------- -----------------------
Title Title
---------------------------- -----------------------
Date Signed Date Signed
EXHIBIT A
QUOTATION 576-2-9-0
