REDACTED - AS FILED THE MARKED PORTIONS OF THIS CLINICAL SUPPLY AGREEMENT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT CARDINAL HEALTH CLINICAL SUPPLY AGREEMENT
Exhibit
10.27
REDACTED
- AS FILED
THE
MARKED PORTIONS OF THIS CLINICAL SUPPLY AGREEMENT HAVE BEEN
OMITTED
AND
FILED SEPARATELY WITH THE COMMISSION PURSUANT TO
A
REQUEST FOR CONFIDENTIAL TREATMENT
CARDINAL
HEALTH
This
Clinical Supply Agreement (“Agreement”)
is
made as of this ___day of September, 2006 (“Effective
Date”),
by
and between Generex Biotechnology Corporation, a Delaware corporation, with
a
place of business at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (hereinafter
“Client”)
and
Cardinal Health PTS, LLC, a Delaware limited liability company, with a place
of
business at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter
“Cardinal
Health”).
RECITALS
A. Client
is
a pharmaceutical company that develops pharmaceutical products; and
B.
Cardinal
Health provides a complete range of analytical, development and clinical
services to the pharmaceutical industry; and
C.
Client
and Cardinal Health desire to enter into this Agreement to provide the terms
and
conditions upon which Client may engage Cardinal Health to provide services
as
defined in individual Project Plans (as defined below) specifying the details
of
the services and the related terms and conditions.
THEREFORE,
in
consideration of the mutual covenants, terms and conditions set forth below,
the
parties agree as follows:
ARTICLE
1
DEFINITIONS
The
following terms have the following meanings in this Agreement:
1.1 “Affiliate(s)”
means
any corporation, firm, partnership or other entity that controls, is controlled
by or is under common control with a party. For purposes of this definition,
“control” shall mean the ownership of at least fifty percent (50%) of the voting
share capital of such entity or any other comparable equity or ownership
interest.
1.2 “API”
means
the active pharmaceutical ingredient used in the performance of a Project as
defined in the Project Plan.
1.3 “Applicable
Laws”
means
all laws, ordinances, rules and regulations within the Territory applicable
to
the Processing of the Product or any aspect thereof and the obligations of
Cardinal Health or Client, as the context requires under this Agreement,
including, without limitation, (A) all applicable federal, state and local
laws
and regulations of each Territory; (B) the U.S. Federal Food, Drug and Cosmetic
Act, and (C) the Good
Manufacturing Practices (“GMPs”),
Good
Laboratory Practices (“GLPs”)
or
Good Clinical Practices (“GCPs”)
promulgated by the Regulatory Authorities, as amended from time to time, as
applicable to the Project.
1.4 “Cardinal
Health Inventions”
has
the
meaning set forth in Article 7.3.
1.5 “Change
Order”
means
an amendment to a Project Plan agreed to by the parties in writing in accordance
with the terms set forth in Article 2.2.
1.6 “Client
Inventions”
has
the
meaning set forth in Article 7.2.
1.7 “Client-Supplied
Materials”
means
any API or other materials provided by Client to Cardinal Health.
1.8 “Confidential
Information”
has
the
meaning set forth in Article 6.2.
1.9 “Dispute”
means
any dispute, controversy or disagreement between the parties in connection
with
this Agreement.
1.10 “Facility”
means
the Cardinal Health facility defined in the applicable Project Plan
1.11 “Initial
Term”
has
the
meaning set forth in Article 12.1.
1.12 “Intellectual
Property”
means
all intellectual property (whether or not patented), including without
limitation, patents, patent applications, know-how, trade secrets, copyrights,
trademarks, designs, concepts, technical information, manuals, standard
operating procedures, instructions or specifications.
1.13 “Product”
means
the product or material that is the subject of the services to be provided
pursuant to a Project Plan.
1.14 “Project
Plan”
means
a
separate quotation or project plan agreed to by the parties in writing
substantially in the form set out in Attachment A and specifically incorporating
by reference this Agreement. A Project Plan shall define the scope of the
services to be performed by Cardinal Health and the responsibilities of the
parties with respect to such services.
1.15 “Regulatory
Authority”
means
any governmental regulatory authority within a Territory involved in regulating
any aspect of the development, manufacture, market approval, sale, distribution,
packaging or use of the Product.
1.16 “Services”
means
all work performed by Cardinal Health for Client pursuant to a Project
Plan.
1.17 “Specifications”
means
all written specifications agreed to by the parties in the Project Plan, and
applicable master batch records, protocols, or standard operating
procedures.
-2-
1.18 “Territory”
means
the United States of America, Canada, the European Union and any other country
which the Parties agree in writing to add to this definition of Territory in
an
amendment to this Agreement.
ARTICLE
2
SCOPE
2.1 Definition
of Scope.
Cardinal Health will perform the services in accordance with the specific terms
set forth in a Project Plan. Each Project Plan shall clearly define the Project,
the Product, and the responsibilities of the parties with respect to such
Project. Each
Project Plan will include, as appropriate, the scope of work, pricing and
payment schedule. Each Project Plan shall be subject to all of the terms and
conditions of this Agreement, in addition to the specific details set forth
in
the Project Plan. To the extent any terms or conditions of a Project Plan
conflict with the terms and conditions of this Agreement, the terms and
conditions of this Agreement shall control, except to the extent that the
applicable Project Plan expressly and specifically states an intent to supersede
this Agreement on a specific matter. Unless specifically agreed to by the
parties, this Agreement shall not apply to softgel, Zydis,
inhalation or
other
proprietary drug delivery proprietary technologies owned or licensed by Cardinal
Health. This Agreement shall supersede the terms of any
purchase order, acknowledgement or delivery document.
2.2 Amendments
to Scope/Change Orders.
Any
material change in the details of a Project Plan or the assumptions upon which
the Project Plan is based (including, but not limited to, changes in an agreed
starting date for a Project or suspension of the Project by Client) may require
changes in the pricing and/or time lines, and shall require a written amendment
to the Project Plan (a “Change
Order”).
Each
Change Order shall detail the requested changes to the applicable task,
responsibility, duty, pricing, time line or other matter. The Change Order
will
become effective upon the execution of the Change Order by both parties, and
Cardinal Health will be given a reasonable period of time within which to
implement the changes. Both parties agree to act in good faith and promptly
when
considering a Change Order requested by the other party. Without limiting the
foregoing, Client agrees that it will not unreasonably withhold approval of
a
Change Order if the proposed changes in pricing or time lines result from,
among
other appropriate reasons, forces outside the reasonable control of Cardinal
Health or changes in the assumptions upon which the initial pricing or time
lines were based. Cardinal Health reserves the right to postpone effecting
material changes in the Project’s scope until such time as the parties agree to
and execute the corresponding Change Order. Notwithstanding the foregoing,
the
original Project Plan shall remain in full force and effect and actively
performed by Cardinal Health until implementation of any Change
Order.
ARTICLE
3
PRICING
AND PAYMENT TERMS
3.1 Price
and Price Changes.
A. Price.
Client
shall pay for the services as provided in this Agreement and all Project
Plans.
-3-
B. Price
Changes.
Cardinal Health may revise the prices provided in a Project Plan if (1) the
parties agree to materially revise a technical test protocol, (2) any
information relating to a Project which is provided by Client is materially
inaccurate or materially incomplete, (3) Client materially revises Cardinal
Health’s responsibilities, the Specifications, applicable test methods, final
review of test methods, procedures, assumptions, development processes, test
methods or analytical requirements, (4) Client requests a materially different
report format, (5) Client requests material revisions to laboratory reports,
(6)
Client requests copies of laboratory records (excluding a single copy of batch
records which will be provided for each batch manufactured hereunder), or (7)
unforeseen circumstances materially affect the work required to complete the
Project.
C. Retesting.
All
retesting performed that is not directly due to a Cardinal Health error will
be
billed to the Client. All required investigational studies or additional Client
requests not outlined in the Project Plan will be invoiced for the cost of
performance at the current standard hourly rate, plus any associated fees.
If,
as
the outcome of an investigation, causality is not determined for retesting,
Cardinal Health and Client will share equally the additional expenditures
required to determine causality
D. Out
Of
Specification Investigations and Reporting.
Cardinal Health reserves the right to expend up to 16 hours per occurrence
to
complete all required investigational work (such as OOS investigations, trouble
shooting chromatographic methods, etc.) without prior approval from the Client.
If the additional work requires going beyond 16 hours, the Client will be
contacted prior to continuation. The additional work will be performed based
on
written agreement from the Client and will be documented on a Cardinal Health
Quotation Amendment Request (QAR).
E. Cancellations
and Postponements by Client.
If
Client
cancels or materially postpone a scheduled batch manufacture as outlined in
the
Project Plan with less than thirty (30) days notice, Client shall pay an
accommodation fee as follows:
|
Notification
prior to Date of Compounding
|
Fee
(% of Total Batch Cost)
|
|
|
20
- 29 days
|
[REDACTED]
|
|
|
10
- 19 days
|
[REDACTED]
|
|
|
4
-
9 days
|
[REDACTED]
|
|
|
0
-
3 days
|
[REDACTED]
|
If
Client
cancels any portion of a Project outlined in the Project Plan which is not
batch
manufacture or packaging, Client shall pay all costs for materials purchased
and
all services rendered by Cardinal Health prior to termination, plus: (1)
[REDACTED] of the total quoted value of the services set forth in the Project
Plan, if the project is cancelled after signing the Project Plan, but prior
to
commencement of the Project work, (2) [REDACTED] of the Project Plan value
if
cancelled after the Project work has commenced, and (3) the [REDACTED] Project
Plan value if cancelled after more than fifty percent of the Project work has
been completed. If Client signs a Project Plan and the Project is delayed by
more than ninety (90) days at Client’s request, Cardinal Health, at its option,
may consider the Project cancelled and will charge Client the applicable
charges.
-4-
F.
Postponements
by Cardinal Health.
If
Cardinal Health materially postpones a scheduled batch manufacture as outlined
in the Project Plan due to an inability to provide the facilities necessary
for
manufacture for reasons other than Force Majeure for a period of greater than
five business days from scheduled date, then Cardinal Health shall reduce the
batch manufacture cost by a percentage as follows:
|
Period
of postponement
|
Reduction
in Batch Cost
|
|
|
6
-
10 days
|
[REDACTED]
|
|
|
11
- 20 days
|
[REDACTED]
|
|
|
21
- 30 days
|
[REDACTED]
|
|
|
Over
30 days
|
[REDACTED]
|
Notwithstanding
the foregoing, both parties will attempt to accommodate batch manufacture
material postponements of less than five business days.
3.2
Invoicing. Cardinal
Health shall invoice Client as follows:
A. For
lot
manufacture and/or packaging, upon the earliest to occur of the following:
(1)
release of a Product lot by Cardinal Health’s Quality Department, whether or not
Client has approved such release; (2) shipment of the Product by Cardinal
Health; or (3) if a third party is to perform finished product testing, then
35
days following shipment of Product samples to a third party testing agency,
but
only if such testing agency has not yet delivered its test results for such
Product and Cardinal Health has performed all of its responsibilities except for
those responsibilities which incorporate test results from the third party
testing agency,
B. For
any
project that can be completed within 30 days (other than lot manufacture),
Cardinal Health shall invoice Client upon completion of the project;
or
C. For
any
project that cannot be completed within 30 days (other than lot manufacture),
Cardinal Health shall invoice Client on a monthly basis.
3.3 Payment
Terms. In
the
event payment is not received by Cardinal Health on or before the [REDACTED]
day
after the date of the invoice, then Cardinal Health may, in addition to any
other remedies available at equity or in law, at its option elect to do any
one
or more of the following remedies: (i) charge a late payment fee on such unpaid
amount equal to one percent (1%) per month until paid in full; (ii) suspend
any
further deliveries hereunder until such invoice is paid in full; or (iii)
terminate the Agreement pursuant to Section 12.3.
3.4 Advance
Payment.
If at
any time, in Cardinal Health’s sole discretion exercised in a reasonable and
objective manner, Client’s credit is materially impaired, Cardinal Health shall
have the right to require payment in advance before making any further shipment
of the Product. If Client shall fail, within a reasonable time, to make such
payment in advance, or if Client shall fail to make payment when due, Cardinal
Health shall have the right, at its option, to suspend any further deliveries
hereunder until such default is corrected, without thereby releasing Client
from
its obligations under this Agreement.
-5-
3.5 Taxes.
All
taxes, duties and other amounts assessed (excluding tax based on net income
and
franchise taxes) on the services, components, API or the Product prior to or
upon sale to Client and on any Client owned tooling and equipment are the
responsibility of Client, and Client shall reimburse Cardinal Health for any
such taxes, duties or other expenses paid by Cardinal Health.
3.6 Shipments.
All
product, raw materials, components and Batch Documentation shipped by Cardinal
Health are shipped EXW, Facility.
ARTICLE
4
CLINICAL
MANUFACTURING AND PACKAGING
4.1 Applicability
of Terms.
The
terms set forth in this Article shall apply only in the event that Cardinal
Health is providing pre-commercial manufacturing and/or packaging services
pursuant to this Agreement.
4.2 Non-Conforming
Product.
Subject
to Section 4.4, Client shall notify Cardinal Health within thirty (30) days
following delivery of Product to Client if
Client
has determined that such Product does not conform to Specifications and shall
provide Cardinal Health a sample of such non-conforming Product. If the batch
is
non-conforming, Client shall not be responsible to pay for such batch, and
Cardinal Health shall, at Client’s option, either (A) reperform the Services at
Client’s expense, or (B) credit any payments made by Client for such batch.
THE
OBLIGATIONS OF CARDINAL HEALTH UNDER THE PRECEDING SENTENCE SHALL BE CLIENT’S
SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT FOR PRODUCT THAT HAS NOT BEEN
RELEASED. If
Cardinal Health does not agree with Client’s determination that such Product
fails to meet the Specifications, then after reasonable efforts to resolve
the
disagreement, either party may submit a sample of such Product to a mutually
agreed upon independent and appropriately qualified third party laboratory
to
determine whether the Product meets the Specifications. The independent party’s
results shall be final and binding. Unless otherwise agreed to by the parties
in
writing, the costs associated with such testing and review shall be borne by
the
non-prevailing party.
4.3 Supply
of Client-Supplied Material for Defective Product.
In the
event Cardinal Health re-performs the Services pursuant to Article 4.2, above,
Client shall supply, at Client’s sole cost, sufficient quantities of the
Client-Supplied Materials for Cardinal Health to complete such
replacement.
4.4 Development/Initial
Batches.
Each
batch of Product manufactured under this Agreement will be considered to be
a
“Development Batch” until Cardinal Health has manufactured three consecutive
batches of Product that meet the applicable Specifications. The term
“Development Batch” shall include without limitation any batch manufactured
following (i) a change in Specifications, or (ii) a scale-up in the
manufacturing process to produce greater quantities of Product, until Cardinal
Health has manufactured three consecutive batches of Product meeting the new
Specifications. Client shall be responsible for the cost of each Development
Batch that fails to meet the Specifications unless Cardinal Health was negligent
in the manufacture of the out of Specification batch.. Cardinal Health and
Client shall cooperate in good faith to resolve any problems causing the
out-of-Specification batch.
-6-
4.5 Unlabeled
Product.
If
Cardinal Health is to provide Client with Product that is not labeled, Client
represents and warrants that it will comply with all applicable regulations,
including without limitation 21 CFR § 201.150.
4.6 Failure
to Take Delivery.
If
Client fails to take delivery on any scheduled delivery date, Client shall
be
invoiced for the stored Product and invoiced
on a monthly basis thereafter for reasonable
administration and storage costs. Any such Product shall be stored by Cardinal
Health in accordance with the Specifications. For
each
such batch of undelivered Product, Client agrees that: (A) Client has made
a
fixed commitment to purchase such Product, (B) title and risk of ownership
for
such Product passes to Client, (C) such Product shall be on a ▇▇▇▇ and hold
basis for legitimate business purposes, (D) if no delivery date is determined
at
the time of billing, Cardinal Health shall have the right to ship the Product
to
Client within four (4) months after billing, and (E) Client will be responsible
for any decrease in market value of such Product that relates to factors and
circumstances outside of Cardinal Health’s control. Within five (5) days
following a written request from Cardinal Health, Client shall provide Cardinal
Health with a letter confirming items (A) through (E) of this Article
for each
Batch of undelivered Product.
ARTICLE
5
REGULATORY
5.1 Audit.
Prior
to the commencement of the Services, and subject to Cardinal Health’s
obligations of confidentiality to third parties, Client shall be permitted
to
conduct an audit of those portions of the Facility where Services will be
conducted. Once annually during
the
Term of this Agreement, and subject to Cardinal Health’s obligations of
confidentiality to third parties, Cardinal Health will permit Client to conduct
an audit of those portions of the Facility where Services are being conducted
upon reasonable advance notice during regular business hours. Upon agreement
of
the parties, Client may conduct additional audits, provided that Client shall
reimburse Cardinal Health for reasonable time and reasonable expenses incurred
by Cardinal Health in connection with such audit. Any and all cited observations
from any Client audit shall be addressed by Cardinal Health in a timely
manner.
5.2 Observation.
Client
may have up to two (2) representatives at the Facilities to observe the Services
provided that Client provides Cardinal Health at least ten (10) days’ advance
written notice of the attendance of such Client representatives. Such
representatives shall comply with Cardinal Health’s reasonable rules and
regulations. Client shall indemnify and hold harmless Cardinal Health for any
action or activity of such representatives while on Cardinal Health’s
premises.
5.3 Regulatory
Inspections.
Each
party shall: (1) notify the other party promptly of any inspection or inquiry
by
any Regulatory Authority concerning any Project or Product of Client; and (2)
forward to the other party copies of any correspondence from any Regulatory
Authority relating to such a Project or Product, including, but not limited
to,
Form FD-483 notices, FDA refusal to file, rejection or warning letters. Where
reasonably practicable, each party will be given the opportunity to have a
representative present during an inspection by a Regulatory Authority. Each
party acknowledges that it may not direct the manner in which the other party
fulfills its obligations to permit inspection by a Regulatory Authority.
-7-
5.4 Record
Retention.
Unless
the parties otherwise agree in writing, Cardinal Health will retain batch,
laboratory and other technical records for the minimum period required by
applicable laws, rules, regulations and guidelines. Should any such records
be
scheduled for destruction, Cardinal Health shall provide 30 days’ advance
written notice to Client, where disposition change may be permitted; Client
may
request in writing the following: “Return Records to Client”.
5.5 Quality
Agreement.
Any
quality agreement executed by the parties related to the Services shall in
no
way determine liability or financial responsibility of the parties for the
responsibilities set forth therein. In the event of a conflict between the
terms
of this Agreement and the quality agreement, this Agreement shall
control.
5.6 Regulatory
Compliance.
Client
shall be solely responsible for all permits and licenses required by any
Regulatory Authority with respect to the Product and the Services under this
Agreement, including any product licenses, applications and amendments in
connection therewith. Cardinal Health will be responsible to maintain all
permits and licenses required by any Regulatory Authority with respect to the
Facility. During the Term, Cardinal Health will assist Client with all
regulatory matters relating to Services under this Agreement, at Client’s
request and at Client’s expense. Each party intends and commits to cooperate to
satisfy all Applicable Laws relating to Services under this
Agreement.
ARTICLE
6
CONFIDENTIALITY
AND NON-USE
6.1 Mutual
Obligation.
Cardinal
Health and Client agree that they will neither use the other party’s
Confidential Information except in the performance of this Agreement nor
disclose the other party’s Confidential Information (defined below) to any third
party without the prior written consent of the other party except as required
by
law, regulation or court or administrative order; provided, however, that prior
to making any such legally required disclosure, the party making such disclosure
shall give the other party as much prior notice of the requirement for and
contents of such disclosure as is practicable under the circumstances.
Notwithstanding the foregoing, each party may disclose the other party’s
Confidential Information to any of its Affiliates
that
(A) need to know such Confidential Information for the purpose of performing
under this Agreement, (B) are advised of the contents of this Article, and
(C)
agree to be bound by the terms of this Article.
6.2 Definition.
As used
in this Agreement, the term “Confidential
Information”
includes all such information furnished by Cardinal Health or Client, or any
of
their respective representatives or Affiliates,
to the
other or its representatives or Affiliates,
whether furnished before, on or after the date of this Agreement and furnished
in any form, including but not limited to written, verbal, visual, electronic
or
in any other media or manner. Confidential Information includes all proprietary
technologies, know-how, trade secrets, discoveries, inventions and any other
Intellectual Property (whether or not patented), analyses, compilations,
business or technical information and other materials prepared by either party,
or any of their respective representatives, containing or based in whole or
in
part on any such information furnished by the other party or its
representatives. Confidential Information also includes the existence of this
Agreement and its terms.
-8-
6.3 Exclusions.
Notwithstanding Section 6.2, Confidential Information does not include
information that (A) is or becomes generally available to the public or within
the industry to which such information relates other than as a result of a
breach of this Agreement, or (B) is already known by the receiving party at
the
time of disclosure as evidenced by the receiving party’s written records, or (C)
becomes available to the receiving party on a non-confidential basis from a
source that is entitled to disclose it on a non-confidential basis, or (D)
was
or is independently developed by or for the receiving party without reference
to
the Confidential Information, as evidenced by the receiving party’s written
records.
6.4 No
Implied License.
The
receiving party will obtain no right of any kind or license under any patent
application or patent by reason of this Agreement. All Confidential Information
will remain the sole property of the party disclosing such information or
data.
6.5 Return
of Confidential Information.
Upon
termination of this Agreement, the receiving party shall, upon request, promptly
return within thirty (30) days all such information, including any copies
thereof, and cease its use or, at the request of the disclosing party, shall
promptly destroy the same and certify such destruction to the disclosing party;
except for a single copy thereof, which may be retained for the sole purpose
of
determining the scope of the obligations incurred under this
Agreement.
6.6 Survival. The
obligations of this Article 6 will terminate five (5) years from the expiration
or termination of this Agreement.
ARTICLE
7
INTELLECTUAL
PROPERTY
7.1 Ownership
of Existing Technologies.
All
rights to and interests in Client’s Intellectual Property and Client’s
Confidential Information shall remain vested solely in Client and no right
or
interest therein is transferred or granted to Cardinal Health under this
Agreement except for use in performing Services hereunder or as expressly set
forth herein. All rights to and interests in Cardinal Health’s Intellectual
Property and Cardinal Health’s Confidential Information shall remain vested
solely in Cardinal Health and no right or interest therein is transferred or
granted to Client under this Agreement except for use in performing services
hereunder or as expressly set forth herein.
7.2 Client
Inventions.
Subject
to the limitations of Sections 7.1 and 7.3, Client shall own all data, work
product, results, reports, inventions, developments, technologies and
information, whether or not patentable, that are generated by Cardinal Health
in
connection with the performance of any Project and arise from, are based upon,
or relate to Cardinal Health’s use of Client’s Confidential Information
(“Client
Inventions”);
provided however, that Client Inventions shall not include any Process
Invention. As used herein, “Process
Invention”
means
any discovery, development, technology or information, including, without
limitation, any manufacturing, packaging or analytical process or methodology,
developed by Cardinal Health, whether or not patentable, that does not relate
exclusively to the use of Client’s patent-protected Product and/or
patent-protected API. Client will be responsible for obtaining patent protection
on inventions relating to the Client Inventions at its own cost. Cardinal Health
agrees to execute all documents necessary to perfect title in any Client
Inventions in Client.
-9-
7.3 Cardinal
Health Inventions.
Subject
to the limitations of Sections 7.1 and 7.2, Cardinal Health shall own Process
Inventions and all inventions, developments, technologies and information,
whether or not patentable that arise from, are based upon, or relate to the
Process Inventions or Cardinal Health’s Confidential Information or Intellectual
Property, provided that no such invention or development shall exclusively
relate to any Client’s Confidential Information (“Cardinal
Health Inventions”).
Cardinal Health will be responsible for obtaining patent protection on Cardinal
Health Inventions at its own cost. Client agrees to execute all documents
necessary to perfect title in any Cardinal Health Inventions in Cardinal Health.
Cardinal Health hereby grants to Client a non-exclusive, royalty free license
to
use the Process Inventions solely in connection with the Product that is the
subject of the Project in which such Process Invention was developed solely
during the Term.
ARTICLE
8
REPRESENTATIONS
AND WARRANTIES
8.1 Cardinal
Health.
Cardinal Health represents and warrants to Client that, unless
otherwise agreed to by the parties in the Project Plan, Cardinal Health will
perform each Project Plan in accordance with (A) the Specifications, (B) the
quality agreement, as indicated in the “Responsibility Delegation checklist”,
and (C) all Applicable Laws.
8.2 Client.
Client
represents and warrants to Cardinal Health that:
A. The
Client-Supplied Materials will comply with all applicable Specifications and
will have been produced in compliance with the Applicable Laws and the
applicable Project Plan;
B. It
has
all necessary authority and all right, title and interest in and to any
Intellectual Property related to each Product or that is otherwise provided
by
Client under this Agreement;
C. It
has
provided all safe
handling instructions, health and environmental information and material safety
data sheets applicable to the Product or to and any Client-Supplied Materials,
except as disclosed to Cardinal Health in writing by Client in sufficient time
for review and training by Cardinal Health prior to delivery;
D. All
Product delivered to Client by Cardinal Health will be held, used and/or
disposed of by Client in accordance with all Applicable Laws;
E. Client
will comply with all Applicable Laws applicable to Client’s performance under
this Agreement and its use of any materials or Products provided by Cardinal
Health under this Agreement or any Project Plan; and
-10-
F. Unless
otherwise agreed by the parties in writing or in the Project Plan, Client has
(1) provided complete and accurate scientific data regarding each Project and
Client’s requirements for each Project, including without limitation test
methods and development, formulation, fill and finish of the Product if
applicable, (2) provided Cardinal Health with complete and accurate information
necessary to develop the scope of work, and estimated or fixed costs for the
Projects, (3) reviewed and approved all Specifications, (4) if applicable,
reviewed and approved all in-process and finished Product test results to ensure
conformity of such results with the Specifications, regardless of which party
is
responsible for finished Product release, and (5) if applicable, prepared all
submissions to Regulatory Authorities.
8.3 Mutual. Each
party hereby represents and warrants to the other party that:
A. Existence
and Power.
Such
party (1) is duly organized, validly existing and in good standing under the
laws of the state in which it is organized, (2) has the power and authority
and
the legal right to own and operate its property and assets, and to carry on
its
business as it is now being conducted, and (3) is in compliance with all
requirements of Applicable Laws, except to the extent that any noncompliance
would not materially adversely affect such party's ability to perform its
obligations under this Agreement;
B. Authorization
and Enforcement of Obligations.
Such
party (1) has the power and authority and the legal right to enter into this
Agreement and to perform its obligations hereunder and (2) has taken all
necessary action on its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder.
C. Execution
and Delivery.
This
Agreement has been duly executed and delivered on behalf of such party, and
constitutes a legal, valid, binding obligation, enforceable against such party
in accordance with its terms;
D. No
Consents.
All
necessary consents, approvals and authorizations of all Regulatory Authorities
and other persons required to be obtained by such party in connection with
the
Agreement have been obtained; and
E. No
Conflict.
The
execution and delivery of this Agreement and the performance of such party's
obligations hereunder (1) do not conflict with or violate any requirement of
Applicable Laws; and (2) do not materially conflict with, or constitute a
material default or require any consent under, any contractual obligation of
such party.
8.4 Limitations.
THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS ARTICLE 8 ARE THE SOLE AND
EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE BY EACH PARTY TO THE OTHER AND
NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS, WARRANTIES OR GUARANTEES OF
ANY
KIND WHATSOEVER, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR
PURPOSE.
-11-
ARTICLE
9
INDEMNIFICATION
9.1 Indemnification
by Cardinal Health.
Cardinal Health shall indemnify and hold harmless Client, its Affiliates, and
their respective directors, officers, employees and agents (“Client
Indemnitees”)
from
and against any and all
suits,
claims, losses, demands, liabilities, damages, costs and expenses (including
reasonable attorneys’ fees) in connection with any suit, demand or action by any
third party (“Losses”)
arising out of or resulting from (A) any breach of its representations,
warranties or obligations set forth in this Agreement or (B) any negligence
or
willful misconduct by Cardinal Health, except to the extent that any of the
foregoing arises out of or results from any Client Indemnitee’s negligence,
willful misconduct or breach of this Agreement.
9.2 Indemnification
by Client.
Client
shall indemnify and hold harmless Cardinal Health, its Affiliates, and their
respective directors, officers, employees and agents (“Cardinal
Health Indemnitees”)
from
and against all Losses arising out of or resulting from (A) any breach of its
representations, warranties or obligations set forth in this Agreement; (B)
any
manufacture, sale, promotion, distribution, use of or exposure to the Product
or
any Client-Supplied Materials, including, without limitation, product liability
or strict liability; (C) Client’s exercise of control over the Project to the
extent that Client's instructions or directions violate Applicable Law; (D)
the
conduct of any clinical trials relating to any material or Product which is
the
subject of this Agreement or any Project Plan; (E) any actual or alleged
infringement or violation of any patent, trade secret, copyright, trademark
or
other proprietary rights provided by Client; or (F) any negligence or willful
misconduct by Client, except to the extent that any of the foregoing arises
out
of or results from any Cardinal Health Indemnitee’s negligence, willful
misconduct or breach of this Agreement.
9.3 Indemnification
Procedures.
All
indemnification obligations in this Agreement are conditioned upon the party
seeking indemnification: (A) promptly notifying the indemnifying party of any
claim or liability of which the party seeking indemnification becomes aware
(including a copy of any related complaint, summons, notice or other
instrument); provided, however, that failure to provide such notice within
a
reasonable period of time shall not relieve the indemnifying party of any of
its
obligations hereunder except to the extent the indemnifying party is prejudiced
by such failure; (B) cooperating with the indemnifying party in the defense
of
any such claim or liability (at the indemnifying party's expense); and (C)
not
compromising or settling any claim or liability without prior written consent
of
the indemnifying party.
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ARTICLE
10
LIMITATIONS
OF LIABILITY
10.1 CARDINAL
HEALTH’S LIABILITY UNDER THIS AGREEMENT FOR ANY AND ALL CLAIMS FOR LOST, DAMAGED
OR DESTROYED API OR CLIENT-SUPPLIED MATERIALS WHETHER OR NOT SUCH API OR
CLIENT-SUPPLIED MATERIALS ARE INCORPORATED INTO FINISHED PRODUCT SHALL NOT
EXCEED [REDACTED] PER PROJECT PLAN EXCEPT FOR LOSSES RESULTING FROM BATCH
MANUFACTURE, IN WHICH CASE CARDINAL HEALTH’S LIABILITY SHALL NOT EXCEED
[REDACTED] PER BATCH
10.2 CARDINAL
HEALTH’S TOTAL LIABILITY, WHETHER IN CONTRACT OR TORT, INCLUDING WITHOUT
LIMITATION ANY OF CARDINAL HEALTH’S INDEMNITY OR OTHER FINANCIAL OBLIGATIONS
UNDER ARTICLE 9, SHALL IN NO EVENT EXCEED, THE TOTAL FEES PAID BY CLIENT TO
CARDINAL HEALTH UNDER THE APPLICABLE PROJECT PLAN GIVING RISE TO THE
CLAIM.
NOTWITHSTANDING
THE FOREGOING, THE TOTAL LIABILITY AMOUNT CALCULATED IN SHALL BE REDUCED BY
ANY
COSTS OR EXPENSES INCURRED BY CARDINAL HEALTH TO PROCURE COMPARATOR PRODUCT.
10.3 NEITHER
PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INDIRECT, INCIDENTAL, SPECIAL
OR
CONSEQUENTIAL DAMAGES ARISING OUT OF PERFORMANCE UNDER THIS
AGREEMENT,
INCLUDING WITHOUT LIMITATION, LOSS OF REVENUES, PROFITS OR DATA, WHETHER IN
CONTRACT OR TORT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH
DAMAGES.
ARTICLE
11
INSURANCE
11.1. Cardinal
Health.
Cardinal
Health shall, at its own cost and expense, obtain and maintain in full force
and
effect the following insurance during the term of this Agreement:
| (A) |
Commercial
General Liability insurance with a per-occurrence limit of not less
than
$1,000,000;
|
| (B) |
Products
and Completed Operations Liability Insurance with a per-occurrence
limit
of not less than $5,000,000;
|
| (C) |
Workers’
Compensation and Employer’s Liability Insurance with statutory limits for
Workers’ Compensation and Employer’s Liability insurance limits of not
less than $1,000,000 per accident;
and
|
| (D) |
Professional
Services Errors & Omissions Liability Insurance with per claim and
aggregate limits of not less than $1,000,000.
|
The
parties hereby acknowledge and agree that Cardinal Health may self-insure all
or
any portion of the above-required insurance. In the event that any of the
required policies of insurance are written on a claims made basis, then such
policies shall be maintained during the entire term of this Agreement and for
a
period of not less than three (3) years following the termination or expiration
of this Agreement. Cardinal Health shall obtain a waiver from any insurance
carrier with whom Cardinal Health carries Workers’ Compensation insurance
releasing its subrogation rights against Client. Cardinal Health shall furnish
certificates of insurance evidencing the required insurance policies to Client
as soon as practicable after the effective date of the Agreement and within
thirty (30) days after renewal of such policies. Each insurance policy that
is
required under this Agreement shall be obtained from an insurance carrier with
an A.M. Best rating of at least A- VII.
-13-
11.2. Client
Insurance.
Client
shall, at its own cost and expense, obtain and maintain in full force and effect
the following insurance during the term of this Agreement:
| (A) |
Commercial
General Liability Insurance with a per occurrence limit of not less
than
$1,000,000;
|
| (B) |
Products
and Completed Operations Liability Insurance with a per occurrence
limit
of not less than $10,000,000;
|
| (C) |
Workers’
Compensation and Employer’s Liability Insurance with statutory limits for
Workers’ Compensation and Employer’s Liability insurance limits of not
less than $1,000,000 per accident;
and
|
| (D) |
All
Risk Property Insurance, including transit coverage, in an amount
equal to
full replacement value covering Client’s property while it is at Cardinal
Health’s facilities or in transit to, from or between Cardinal Health’s
facilities.
|
The
parties hereby acknowledge and agree that Client may self-insure all or any
portion of the above-required insurance. Client shall maintain levels of
insurance or self insurance sufficient to meet its obligations under this
Agreement. In the event that any of the required policies of insurance are
written on a claims made basis, then such policies shall be maintained during
the entire term of this Agreement and for a period of not less than three (3)
years following the termination or expiration of this Agreement. Client shall
obtain a waiver from any insurance carrier with whom Client carries Property
Insurance releasing its subrogation rights against Cardinal Health. Client
shall
not seek reimbursement for any property claim or portion thereof that is not
fully recovered from Client’s Property Insurance policy. Client shall obtain a
waiver from any insurance carrier with whom Client carries Workers’ Compensation
insurance releasing its subrogation rights against Cardinal Health. Cardinal
Health, Inc. and its subsidiaries and affiliates shall be named as additional
insureds under the Products and Completed Operations Liability insurance
policies with respect to the products and completed operations outlined in
this
Agreement. Client shall furnish certificates of insurance evidencing the
required insurance policies and additional insured status to Cardinal Health
as
soon as practicable after the effective date of the Agreement and within thirty
(30) days after renewal of such policies. Each insurance policy that is required
under this Agreement shall be obtained from an insurance carrier with an A.M.
Best rating of at least A- VII.
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ARTICLE
12
TERM
AND TERMINATION
12.1 Term. The
term
of this Agreement shall commence as of the date set forth above and shall
continue until either party terminates this Agreement as set forth in Section
12.2 or 12.3 (“Term”).
12.2 Termination.
Client
may terminate this Agreement or any Project Plan without cause at any time
during the Term of the Agreement on [REDACTED] days’ prior written notice to the
other party
12.3 Immediate
Termination.
Either
party shall have the right to immediately terminate this Agreement if (A) the
other party files a petition in bankruptcy, or enters into an agreement with
its
creditors, or applies for or consents to the appointment of a receiver or
trustee, or makes an assignment for the benefit of creditors, or suffers or
permits the entry of any order adjudicating it to be bankrupt or insolvent
and
such order is not discharged within thirty (30) days; or (B) if the other party
materially breaches any of the provisions of this Agreement, and such breach
is
not cured or corrective actions started within thirty (30) days after the giving
of written notice; provided, however, that in the case of a failure of Client
to
make payments in accordance with the terms of this Agreement, Cardinal Health
may terminate this Agreement if such payment breach is not cured within thirty
(30) days of receipt notice from Cardinal Health.
12.4 Effect
of Termination.
Expiration
or termination of this Agreement shall be without prejudice to any rights or
obligations that accrued to the benefit of either party prior to such expiration
or termination. In
the
event that this Agreement or any Project Plan is terminated, otherwise than
by
Client pursuant to Section 12.3, Client shall pay Cardinal Health for all
Services performed in accordance with the applicable Project Plan up to the
date
of termination plus any applicable cancellation fees, and will reimburse
Cardinal Health for all costs and expenses incurred, and all non-cancelable
commitments made, in the performance of Services pursuant to an approved Project
Plan. In the event that this Agreement or any Project Plan is terminated, all
non-fabricated materials and semi-finished and finished Products shall be
returned to Client at Client’s expense, except in the event that termination is
due to breach by Cardinal Health, in which case materials and Products shall
be
returned to Client at Cardinal Health’s expense.
ARTICLE
13
NOTICE
All
notices and other communications hereunder shall be in writing and shall be
deemed given: (A) when delivered personally; (B) when delivered by facsimile
transmission (receipt verified); (C) when received or refused, if mailed by
registered or certified mail (return receipt requested), postage prepaid; or
(D)
when delivered if sent by express courier service, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice; provided, that notices of a change of address shall be effective
only upon receipt thereof):
To
Client:
Generex
Biotechnology Corporation
Attn:
▇▇▇▇ ▇▇▇▇▇, Chief Operating Officer
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
To
Cardinal
Health:
Cardinal
Health PTS, LLC
Attn:
Manager, Contract Management
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
-15-
With
a
copy to:
Cardinal
Health, Inc.
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
Attn:
Associate General Counsel,
Pharmaceutical
Technologies and Services
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
ARTICLE
14
MISCELLANEOUS
14.1 Entire
Agreement; Amendments.
This
Agreement, the attachments, Project Plans and any amendments thereto constitute
the entire understanding between the parties and supersede any contracts,
agreements or understanding (oral or written) of the parties with respect to
the
subject matter hereof. No term of this Agreement may be amended except upon
written agreement of both parties, unless otherwise provided in this
Agreement.
14.2 Captions. The
captions in this Agreement are for convenience only and are not to be
interpreted or construed as a substantive part of this Agreement
14.3 Further
Assurances. The
parties agree to execute, acknowledge and deliver such further instruments
and
to take all such other incidental acts as may be reasonably necessary or
appropriate to carry out the purpose and intent of this Agreement.
14.4 No
Waiver. Failure
by either party to insist upon strict compliance with any term of this Agreement
in any one or more instances will not be deemed to be a waiver of its rights
to
insist upon such strict compliance with respect to any subsequent
failure.
14.5 Severability.
If any
term of this Agreement is declared invalid or unenforceable by a court or other
body of competent jurisdiction, the remaining terms of this Agreement will
continue in full force and effect.
14.6 Independent
Contractors.
The
relationship of the parties is that of independent contractors, and neither
party will incur any debts or make any commitments for the other party except
to
the extent expressly provided in this Agreement. Nothing in this Agreement
is
intended to create or will be construed as creating between the parties the
relationship of joint ventures, co-partners, employer/employee or principal
and
agent.
-16-
14.7 Successors
and Assigns.
This
Agreement will be binding upon and inure to the benefit of the parties, their
successors and permitted assigns. Neither party may assign this Agreement,
in
whole or in part, without the prior written consent of the other party, except
that either party may, without the other party's consent, assign this Agreement
to an Affiliate or to a successor to substantially all of the business or assets
of the assigning company.
14.8 Governing
Law.
This
Agreement shall be governed by and construed under the laws of the State of
Ohio, excluding its conflicts of law provisions. The
United Nations Convention on Contracts for the International Sale of Goods
shall
not apply to this Agreement.
14.9 Alternative
Dispute Resolution.
If any
Dispute arises between the parties, such Dispute shall be presented to the
respective presidents or senior executives of Cardinal Health and Client for
their consideration and resolution. If such parties cannot reach a resolution
of
the Dispute, then such Dispute shall be resolved by binding alternative dispute
resolution in accordance with the then existing commercial arbitration rules
of
CPR, The International Institute for Conflict Prevention & Resolution, ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇. Arbitration shall be conducted in New York, NY.
14.10 Prevailing
Party.
In any
dispute resolution proceeding between the parties in connection with this
Agreement, the prevailing party will be entitled to its reasonable attorney's
fees and costs in such proceeding.
14.11 Counterparts.
This
Agreement may be executed in one or more counterparts, each of which will be
deemed an original but all of which together will constitute one and the same
instrument. Any photocopy, facsimile or electronic reproduction of the executed
Agreement shall constitute an original.
14.12 Publicity.
Neither
party will make any press release or other public disclosure regarding this
Agreement or the transactions contemplated hereby without the other party's
express prior written consent, except as required under Applicable Laws or
by
any governmental agency, in which case the party required to make the press
release or public disclosure shall use commercially reasonable efforts to obtain
the approval of the other party as to the form, nature and extent of the press
release or public disclosure prior to issuing the press release or making the
public disclosure. Cardinal Health hereby acknowledges and agrees that Client
will be obligated to issue a press release and file a Form 8-K Current Report
in
respect of this Agreement in accordance with Applicable Laws, and such press
release and public disclosure shall accord with the provisions of this
Section.
14.13 Setoff. Without
limiting Cardinal Health’s rights under law or in equity, Cardinal Health and
its Affiliates, parent or related entities, collectively or individually, may
exercise a right of set-off against any and all amounts due to Cardinal Health
from Client. For purposes of this Article, Cardinal Health, its Affiliates,
parent or related entities shall be deemed to be a single creditor.
-17-
14.14 Survival.
The
rights and obligations of the parties shall continue under Articles 6
(Confidentiality), 7 (Intellectual Property), 9 (Indemnification), 10
(Limitations of Liability), 11 (Insurance), to the extent expressly stated
therein, 13 (Notice), 14 (Miscellaneous) and Section 12.4 (Effect of
Termination), notwithstanding expiration or termination of this
Agreement.
14.15 Force
Majeure.
Except
as to payments required under this Agreement, neither party shall be liable
in
damages for, nor shall this Agreement be terminable or cancelable by reason
of,
any delay or default in such party’s performance hereunder if such default or
delay is caused by events beyond such party’s reasonable control including, but
not limited to, acts of God, regulation or law or other action or failure to
act
of any government or agency thereof, war or insurrection, civil commotion,
destruction of production facilities or materials by earthquake, fire, flood
or
storm, labor disturbances, epidemic, or failure of suppliers, public utilities
or common carriers; provided however, that the party seeking relief hereunder
shall immediately notify the other party of such cause(s) beyond such party’s
reasonable control. The party that may invoke this section shall use all
reasonable endeavors to reinstate its ongoing obligations to the other. If
the
cause(s) shall continue unabated for one hundred eighty (180) days, then both
parties shall meet to discuss and negotiate in good faith what modifications
to
this Agreement should result from this force majeure.
IN
WITNESS WHEREOF,
the
parties have caused their duly authorized representative to execute this
Agreement effective as of the date first written above.
| CARDINAL HEALTH PTS, LLC | GENEREX BIOTECHNOLOGY CORPORATION | ||
| By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||
|
|
|
||
|
Its:
VP, Business Division
|
Its: President,
Chief Executive Officer
|
||
|
|
|
| By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ | |||
|
|
|||
|
Its: Chief
Operating Officer
|
-18-
ATTACHMENT
A
PROJECT
PLAN
Scope
of
Work
Activities/Specifications
Scheduling/Deliverables
Cost
Proposal
Invoicing
and Payment Terms
Additional
Project Terms
Project
Approval Authorization
All
work
performed under this Project Plan is subject to the terms and conditions of
the
Clinical Supply Agreement between Client and Cardinal Health dated June __,
2006.
-19-