DEVELOPMENT AND SERVICES AGREEMENT
EXHIBIT
10.1
This
DEVELOPMENT AND SERVICES
AGREEMENT (this “Agreement”) is dated as of this 30th day of
July, 2009 (the “Effective Date”), by and between QN Diagnostics, LLC, a
Delaware limited liability company (“QND”) and QuantRx Biomedical Corporation, a
Nevada corporation (“QuantRx”).
RECITALS
WHEREAS, as set forth in the
Limited Liability Company Agreement of QN Diagnostics, LLC, of even date hereof,
entered into by and between NuRx Pharmaceuticals, Inc. (“NuRx”) and QuantRx (the
“LLC Agreement”), NuRx and QuantRx each contributed certain capital and assets
and formed QND;
WHEREAS, the LLC Agreement
provides that QuantRx shall enter into a development and services agreement with
QND pursuant to which QuantRx shall provide certain development, regulatory and
manufacturing services to QND with respect to the Lateral Flow Products (as
defined in the LLC Agreement); and
WHEREAS, the parties desire
hereby to set forth the terms and conditions upon which QuantRx shall provide
such services to QND.
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1.
Definitions.
“Affiliate” shall mean
any Person which, directly or indirectly, controls, or is controlled by, or is
under common control with the first Person.
“Budget” shall have
the meaning specified in Section 3.1.
“Claims and Losses”
shall have the meaning specified in Section 9.1.
“Confidential
Information” shall mean all Trade Secrets and other confidential and/or
proprietary information of a party (the “Disclosing Party”), including
information derived from reports, investigations, research, work in progress,
codes, marketing and sales programs, financial projections, cost summaries,
pricing formula, contract analyses, financial information, projections,
confidential filings with any state or federal agency, and all other
confidential concepts, methods of doing business, ideas, materials or
information prepared or performed for, by or on behalf of such Person by its
employees, officers, directors, agents, representatives, or
consultants. Information shall not be deemed Confidential Information
hereunder if (a) such information becomes available to or known by the
public generally through no fault of the party receiving such information (the
“Receiving Party”); (b) disclosure is required by law or the order of any
governmental authority under color of law, provided, however, that prior
to disclosing any information pursuant to this clause (b), the Receiving Party
shall, if possible, give prior written notice thereof to the Disclosing Party
and, at the Disclosing Party’s election, either provide the Disclosing Party
with the opportunity to contest such disclosure or seek to obtain a protective
order narrowing the scope of such disclosure and/or use of the Confidential
Information.
“Copyrights” shall
mean all copyrights, including in and to works of authorship and all other
rights corresponding thereto throughout the world, whether published or
unpublished, including rights to prepare, reproduce, perform, display and
distribute copyrighted works and copies, compilations and derivative works
thereof.
“Fees” shall have the
meaning specified in Section 3.1.
“Intellectual Property
Rights” shall mean any or all rights in and to intellectual property and
intangible industrial property rights, including, without limitation,
(a) Patents, Trade Secrets, Copyrights and Trademarks, and (b) any
rights similar, corresponding or equivalent to any of the foregoing anywhere in
the world.
“Key Employees” shall
mean those persons identified on Exhibit
B.
“Patents” shall mean
all United States and foreign patents and utility models and applications
therefor and all reissues, divisions, re-examinations, renewals, extensions,
provisionals, continuations and continuations-in-part thereof, and equivalent or
similar rights anywhere in the world in inventions and discoveries.
“Person” means an
individual or entity, including a partnership, limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, or a governmental entity (or any department,
agency, or political subdivision thereof).
“Representatives”
shall mean officers, directors, employees, attorneys, accountants, advisors,
agents, distributors, licensees, shareholders, subsidiaries and lenders of a
party. In addition, all Affiliates of QuantRx shall be deemed to be
“Representatives” of QuantRx.
“Service” (and, with
correlative meaning, “Services”) shall have the meaning specified in
Section 2.1.
“Tooling” shall mean
all tools and hardware that are acquired, developed or used in the performance
of the Services.
“Trade Secrets” shall
mean all trade secrets under applicable law and other rights in know-how and
confidential or proprietary information, processing, manufacturing or marketing
information, including new developments, inventions, processes, ideas or other
proprietary information that provide QuantRx with advantages over competitors
who do not know or use it and documentation thereof (including related papers,
blueprints, drawings, chemical compositions, formulae, diaries, notebooks,
specifications, designs, methods of manufacture and data processing software,
compilations of information) and all claims and rights related
thereto.
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“Trademarks” shall
mean any and all trademarks, service marks, logos, trade names, corporate names,
Internet domain names and addresses and general-use e-mail addresses, and all
goodwill associated therewith throughout the world.
“Work Product” shall
mean (a) all Intellectual Property Rights and any related work-in-progress,
improvements or modifications to any Intellectual Property Rights that are
created, developed or conceived (alone or with others) in connection with the
Services, and (b) all regulatory filings, approvals, data and information
related to the Lateral Flow Products. Work Product shall include,
without limitation, all materials required to be delivered to QND under this
Agreement.
2. Provision of Services; Standard of
Performance.
2.1 Commencing
on the date hereof, QuantRx shall provide to QND the services specified on Exhibit A attached
hereto (the “Services”) for the period of time specified thereon, unless this
Agreement is earlier terminated or extended in accordance with the terms
hereof.
2.2 The
parties agree to fully cooperate in good faith with each other in connection
with the provision of the Services and the matters related to or arising
hereunder, including, without limitation, QuantRx’s cooperation with QND to
enable QND to establish its own infrastructure to perform the Services
independently of QuantRx as may be agreed upon by NuRx and QuantRx after the
Effective Date.
2.3 QuantRx
agrees during the term of this Agreement not to accept work or enter into any
agreement or accept any obligation that would cause QuantRx to breach its
obligations under this Agreement.
2.4 In
the performance of the Services, QuantRx shall (a) enter into an employment
offer letter that is reasonably satisfactory to NuRx with Xxxxxxx Xxxxxxx prior
to Closing, and (b) enter into employment offer letters that are reasonably
satisfactory to NuRx with each of Messrs. Buck and Burjess-Xxxxxxx within 45
days after the Closing, and shall use commercially reasonable efforts to
primarily utilize the services of the Key Employees. QuantRx
represents that it has never been, and that none of its employees or other
persons engaged by QuantRx has ever been, (r) debarred (under the provisions of
the Generic Drug Enforcement Act of 1992, 21 U.S.C. §335a (a) and (b)), (s)
convicted of a crime for which a person can be debarred, (t) threatened to be
debarred, or (u) indicted for a crime or otherwise engaged in conduct for which
a person can be debarred. QuantRx immediately shall notify QND in
writing of any such debarment, conviction, threat, or indictment. The
terms of the proceeding sentence shall survive the expiration or termination of
this Agreement for a period of three (3) years.
3. Payment.
3.1 QND
shall pay to QuantRx on the first business day of each month a monthly payment
for the Services performed by QuantRx (the “Fee(s)”) as specified in the
Preliminary Project Plan and Budget attached as Exhibit C (the
“Budget”). The Budget and monthly Fees may be adjusted upon mutual
written agreement of the parties.
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3.2 If
QuantRx has costs for the Services in a month that are in excess of the monthly
Fee, then QuantRx will submit a request for additional funds at the time QuantRx
submits the detailed cost accounting for such month in accordance with
Section 3.3. QND shall have a period of five (5) days after
receipt of such request and detailed cost accounting to accept or reject such
request, provided that such acceptance shall not be unreasonably
withheld. If QND accepts such request, then QND shall pay such
additional amount within five (5) days after notice of
acceptance. Notwithstanding the foregoing, in no event shall the Fees
(including any such additional amounts described in this Section 3.2)
exceed $3,700,000 in the aggregate.
3.3 QND
shall pay the Fees for each month on the first day of such month in
advance. Within ten (10) days of the end of each month, QuantRx shall
deliver a detailed accounting of the costs for the preceding month including a
report of the monthly and project-to-date budget-to-actual costs, costs to
complete each project, and such other reports as reasonably requested by
QND. QuantRx acknowledges and agrees that QND shall not be liable for
making any further payment of the Fees if (i) QuantRx fails to reach any of
the Milestones by the expiration of the applicable Milestone Cure Period (as
such terms are defined in the LLC Agreement), or (ii) QuantRx breaches any
of its obligations under this Agreement, the LLC Agreement or the Related
Agreements (as defined in the LLC Agreement).
3.4 QuantRx
acknowledges that the Fees for a calendar month may be less than the actual
costs to QuantRx to perform the Services for such month, and QuantRx agrees that
QuantRx shall continue to perform the Services and, unless the parties mutually
agree in writing, QND shall not be liable for any additional amounts for the
Services in excess of the Fees.
4. Term and Termination.
4.1 Unless
earlier terminated in accordance with the terms of this Section 4, this
Agreement shall commence on the date hereof and shall terminate one (1) year
after the Effective Date.
4.2 If
QND desires to extend the term of this Agreement, QND shall give QuantRx
thirty (30) days’ prior written notice, which notice shall include
reasonable details relating to such extension. QND and QuantRx shall
negotiate in good faith regarding any such extended term. If the
parties reach agreement during such 30-day period, such agreement not to be
unreasonably withheld by QuantRx, Section 4.1 shall thereafter be amended
to include the extended term. Otherwise, this Agreement shall
automatically terminate.
4.3 QND
shall have the right to terminate this Agreement if QuantRx fails to meet any of
the Milestones or if the LLC Agreement is terminated.
4.4 This
Agreement may be terminated by either party upon written notice to the other
party if the other party defaults in the performance of any of its material
obligations under this Agreement and such default shall continue and not be
remedied for a period of thirty (30) days after receipt of prior written notice
stating that a default has occurred.
4.5 The
provisions of Sections 4.5, 5, 9, 14 and 17 shall survive any termination
of this Agreement.
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5. Intellectual
Property.
5.1 QND
hereby grants to QuantRx, under all Intellectual Property Rights owned by QND, a
non-exclusive right and license to perform the Services in accordance with this
Agreement.
5.2 All
Work Product shall be the sole property of QND, with QND having the right to
obtain and hold in its own name all Intellectual Property Rights in and to such
Work Product. QuantRx hereby irrevocably assigns and agrees to assign
to QND, without additional consideration, all right, title and interest in and
to all Work Product, whether currently existing or created or developed later,
including, without limitation, all Intellectual Property Rights related thereto,
whether existing now or in the future, effective immediately upon the inception,
conception, creation or development thereof. QuantRx shall
(i) disclose promptly to QND all Work Product, and (ii) whether during
or after the term of this Agreement, at QND’s expense, execute such written
instruments and do such other acts as may be necessary in the opinion of QND to
obtain a patent, register a copyright, transfer a regulatory approval or
otherwise evidence or enforce QND’s rights in and to such Work Product (and
QuantRx hereby irrevocably appoints QND and any of its officers as its attorney
in fact to undertake such acts in its name).
5.3 Upon
termination of this Agreement, or at any time QND requests, QuantRx shall
deliver immediately to QND all property belonging to QND, including all
(a) Work Product then in progress, (b) Tooling and (c) all
material in QuantRx’s possession containing Confidential Information of QND and
any copies thereof, whether prepared by QuantRx or others.
6. Representations. QuantRx represents,
warrants and covenants that: (a) QuantRx has the full power and authority to
enter into this Agreement and to perform its obligations hereunder, without the
need for any consents, approvals or immunities not yet obtained; (b) QuantRx’s
execution of and performance under this Agreement shall not breach any written
agreement with any third party or any obligation owed by QuantRx to any third
party to keep any information or materials in confidence or in trust; (c) the
Services, including, without limitation, any deliverables required hereunder,
shall substantially conform to any specifications for such Services and/or
deliverables as set forth or referenced on Exhibit A; (d) the
Work Product shall be the original work of QuantRx, and any persons involved in
the development of Work Product have executed (or prior to any such involvement,
shall execute) a written agreement with QuantRx in which such persons (i) assign
to QuantRx all right, title and interest in and to the Work Product in order
that QuantRx may fully grant the rights to QND as provided herein and (ii) agree
to be bound by confidentiality and non-disclosure obligations no less
restrictive than those set forth in this Agreement; (e) QuantRx has the right to
grant the rights and assignments granted herein, without the need for any
assignments, releases, consents, approvals, immunities or other rights not yet
obtained; and (f) to the knowledge of QuantRx, the Services do not infringe,
misappropriate or violate any Intellectual Property Right of any third
party.
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7. Covenants. The
Services and Work Product shall not infringe, misappropriate or materially
violate any Intellectual Property Right of any third party; and neither the Work
Product nor any element thereof shall be subject to any material
restrictions or to any mortgages, liens, pledges, security interests,
encumbrances or encroachments.
8. Independent
Contractor. Each of QND and QuantRx shall be an independent
contractor in the performance of its respective obligations
hereunder. Nothing in this Agreement shall create or be deemed to
create a partnership, joint venture or a relationship of principal and agent or
of employer and employee between QND and QuantRx, or between any of the
Representatives, contractors or suppliers of QND, on the one hand, and of
QuantRx, on the other hand.
9. Indemnification;
Insurance.
9.1 QuantRx
shall indemnify and hold harmless, and at QND’s request defend, QND and its
Affiliates, successors and assigns (and its and their officers, directors and
employees) from and against any and all claims, losses, liabilities, damages,
settlements, expenses and costs (including, without limitation, attorneys’ fees
and court costs) (collectively, “Claims and Losses”) which arise out of or
relate to (a) any material breach of this Agreement by QuantRx, including,
without limitation, any material breach of any representation or warranty of
QuantRx set forth in Section 6. Notwithstanding anything to the
contrary set forth in this Section 9.1, (i) QuantRx shall not be obligated
to indemnify QND or any of its Affiliate, successors and assigns (and its and
their officers, directors and employees) until Claims and Losses incurred exceed
$25,000 in the aggregate and (ii) the maximum amount of indemnifiable Claims and
Losses that may be recovered under this Section 9.1 shall not exceed
$5,000,000.
9.2 Commencing
on the date that is thirty (30) days after the date hereof, QuantRx will
maintain during the term of this Agreement and for three (3) years after
termination or expiration of this Agreement commercial general liability
insurance from a minimum “A-” AM Bests rated insurance company, including
contractual liability, with coverage limits of not less than five (5) million
per occurrence and ten (10) million in the aggregate. The minimum
level of insurance set forth herein shall not be construed to create a limit on
QuantRx’s liability hereunder. Such policies shall name QND and its
Affiliates as additional insured and provide a waiver of subrogation in favor of
QND and its Affiliates. QND shall pay all premiums and other costs
and expenses related to such commercial general liability insurance to the
extent (i) the Services performed under this Agreement increase such premiums or
directly result in other costs and expenses, and (ii) such premiums, costs and
other expenses are reasonable and customary in nature.
10. Amendments and
Waivers. This Agreement may not be amended, supplemented or
modified, except by an agreement in writing signed by each of the
parties. Either party may waive compliance by the other party with
any term or provision of this Agreement; provided, that such waiver shall not
operate as a waiver of, or estoppel with respect to, any other or subsequent
failure. No waiver shall be effective unless it is in writing and is
signed by the party asserted to have granted such waiver.
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11. Notices. All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and shall be deemed to have been duly given,
made and received (i) when delivered personally or by telecopy,
(ii) one (1) day following the day when deposited with a reputable,
established overnight courier service for delivery to the intended addressee, or
(iii) three (3) days following the day when deposited with the United
States Postal Service as first class, registered or certified mail, postage
prepaid and addressed as set forth below:
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If
to QuantRx:
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QuantRx
Biomedical Corporation
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000
X. Xxxx Xxxxxx, Xxxxx 000
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Xxxxxxxxxx,
XX 00000
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Facsimile
No.: (000) 000-0000
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Attention:
Xxxxx Xxxxxxxxxx, CFO
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If
to QND:
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QN
Diagnostics, LLC
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c/o
QuantRx Biomedical Corporation
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0000
XX 000xx Xxxxxx
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Xxxxxxxx,
XX 00000
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Facsimile
No.: (000) 000-0000
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Attention:
Manager
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12. Severability. If
any provision of this Agreement, or the application of any such provision to any
person or entity or set of circumstances, shall be determined to be invalid,
unlawful, void or unenforceable to any extent, the remainder of this Agreement,
and the application of such provision to persons or entities or circumstances
other than those as to which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and shall continue to
be valid and enforceable to the fullest extent permitted by law.
13. Counterparts. This
Agreement may be executed (including, without limitation, by facsimile
signature) in one or more counterparts, with the same effect as if the parties
had signed the same document. Each counterpart so executed shall be
deemed to be an original, and all such counterparts shall be construed together
and shall constitute one agreement.
14. Governing Law. This
Agreement is to be construed in accordance with and governed by the internal
laws of the State of Delaware, without giving effect to any choice of law rule
that would cause the application of the laws of any jurisdiction other than the
internal laws of the State of Delaware to the rights and duties of the
parties.
15. Successors and
Assigns. QuantRx shall not assign, or suffer or permit an
assignment (by operation of law or otherwise) of, its rights or obligations
under or interest in this Agreement without the prior written consent of QND;
provided, however, that QuantRx shall be permitted to assign its rights and
obligations under this Agreement to any of its Affiliates, provided that in the
case of any such assignment, QuantRx shall remain primarily responsible and
liable for its obligations hereunder and QuantRx shall use commercially
reasonable efforts to ensure that the Key Employees continue to perform the
Services. Any purported assignment or other disposition by QuantRx,
except as permitted herein, shall be null and void. For purposes of
this section, the terms “assign” and “assignment” shall be deemed to include
(i) a merger in which a party hereto is not the surviving entity,
(ii) a consolidation or division of a party hereto, (iii) a sale of
all or substantially all of the assets of a party hereto, or (iv) a change
of control resulting from a sale or repurchase of shares or similar transaction
involving a party hereto. Subject to the foregoing, this Agreement
shall be binding upon and shall inure to the benefit of the parties and their
respective successors and permitted assigns.
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16. Entire
Agreement. This Agreement contains the entire understanding
between the parties hereto with respect to the Services and supersedes all prior
and contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written. The parties intend that this
Agreement be the several, complete and exclusive embodiment of their agreement,
and that any evidence, oral or written, of a prior or contemporaneous agreement
that alters or modifies this Agreement shall not be admissible in any proceeding
concerning this Agreement. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof.
17. Construction. The
construction of this Agreement shall not take into consideration the party who
drafted or whose representative drafted any portion of this Agreement, and no
canon of construction shall be applied that resolves ambiguities against the
drafter of a document. Each party acknowledges that: (a) it has read
this Agreement; (b) it has been represented in the preparation, negotiation and
execution of this Agreement by legal counsel of its own choice or has
voluntarily declined to seek such counsel; and (c) it understands the terms and
consequences of this Agreement and is fully aware of the legal and binding
effect of this Agreement.
[Remainder
of page intentionally left blank]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
effective as of the Effective Date.
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QN
DIAGNOSTICS, LLC
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By: QuantRx
Biomedical Corporation
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By:
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/s/ Xxxxxx Xxxxxxxxx
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Title: Chief
Executive Officer
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By:
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/s/ Xx. Xxxxx
Xxxxx-Xxxxxx
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Title: Chief
Executive Officer
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QUANTRX BIOMEDICAL CORPORATION
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By:
/s/
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Xxxxxx
Xxxxxxxxx
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Name:
Xxxxxx Xxxxxxxxx
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Title: Chief
Executive
Officer
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9
EXHIBIT
A
Services
1. QuantRx
shall provide all services, supplies, equipment and facilities needed by QND to
continue the research, development, regulatory approval and commercialization of
the Lateral Flow Products, such as accounting, administration, management,
research and development, clinical trials management, marketing, procurement,
inventory control, warehousing, office space, insurance, administrations and
communications services.
2. QuantRx
shall arrange and implement manufacturing capabilities for the Lateral Flow
Products, and shall maintain necessary capacity for such
manufacturing.
3. QuantRx
shall plan and conduct any necessary clinical studies, and obtain in QND’s name
any governmental regulatory approvals, which may be needed for manufacturing,
marketing and selling the Lateral Flow Products. All regulatory
approvals for the Lateral Flow Products will be transferred by QuantRx and held
in the name of QND.
1
EXHIBIT
B
Key
Employees
1
EXHIBIT
C
Preliminary
Project Plan and Budget
1
