TREATMENT PROTOCOL
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT (the "Agreement") is
entered into this 9 day of February, 1998, by and between Hemispherx
Biopharma, Inc. ("HEB"), a Delaware corporation, and Xxxxxxxx Home
Health Care, Inc., d/b/a Olsten Health Services ("Olsten"), a Missouri
corporation.
RECITALS
HEB has developed Poly I, Poly C12U, a pharmaceutical product for
the treatment of Chronic Fatigue Syndrome ("CFS") and other indications
to be marketed under the brand name AmpligenTM ("Product");
HEB has developed a protocol with respect to the Product ("AMP-
511 Protocol" attached hereto as Exhibit "A" for reference only) and has
received authorization from the Food and Drug Administration ("FDA") in
a letter from Dr. Xxxxx Xxxxxxxx, dated May 1, 1997 approving HEB's
request for distribution of the Product in accordance with the AMP-511 (all
hereinafter the "Authorization") on a cost recovery basis;
Olsten is a wholesale and retail distributor of numerous
pharmaceutical products, has a nationwide retail and certain international
wholesale distribution networks in place, and has the ability and desire to
serve as a preferred distributor for HEB's Product;
HEB wishes to appoint Olsten to distribute the Product to Patients
under the AMP-511 protocol for CFS on a distributor basis and wishes to
appoint Olsten as one of their distributors of the Product on the terms and
conditions set forth below, and Olsten desires to accept such non-exclusive
appointment, on the terms and conditions set forth below.
NOW THEREFORE, the parties agree as follows:
1. Definitions. For purposes of this Agreement, the following
terms shall have the meanings set forth below, unless the context clearly
requires otherwise.
1.1 "Affiliate" of a Party shall mean any corporation or
non-corporate business entity which controls, is controlled by, or is under
common control with such Party. A corporation or non-corporate business
entity shall be regarded as in control of another corporation if it owns or
directly or indirectly controls at least forty percent (40%) of the voting
stock of the other corporation, or (a) in the absence of the ownership of at
least forty percent (40%) of the voting stock of a corporation or (b) in the
case of a non-corporate business entity, if it possesses, directly or
indirectly, the power to direct or cause the direction of the management
and policies of such corporation or non-corporate business entity, as
applicable.
1.2 "Contract Year" shall mean the period of twelve
consecutive calendar months commencing upon the Effective Date and each
subsequent successive twelve-month period.
1.3 "Effective Date" shall mean the date first written
above.
1.4 An "Event of Default" with respect to a Party shall
mean any of the following event.
(i) Any material breach of this Agreement by such
Party; or
(ii) The entry of a decree or order for relief by a
court of competent jurisdiction in respect of such Party in an involuntary
case under the Federal Bankruptcy Code, as now or hereafter constituted,
or any other applicable federal or state insolvency or other similar law and
the continuance of any such decree or order unstayed and in effect for a
period of sixty (60) consecutive dates; or
(iii) The filing by such Party of a petition for relief
under the Federal Bankruptcy Code, as now constituted or hereafter
amended, or any other applicable federal or state insolvency or other
similar law.
1.5 "Patient" shall mean a person recommended by a MD
or a DO for the treatment of Chronic Fatigue Syndrome (CFS) with
Ampligen, and accepted in writing by HEB under the AMP-511 Protocol,
on either a cost recovery or gratis basis.
1.6 "Party" shall mean either party to this Agreement.
1.7 "Person" shall refer to any natural person,
corporation, partnership or association.
1.8 "Supplies" shall mean the equipment and other
supplies necessary for the safe and effective use of the Product. Said
equipment and other supplies shall include, but not be limited to, those
items set forth on Appendix I.
1.9 "Territory" refers to all of the fifty (50) states in the
United States.
2. APPOINTMENT OF DISTRIBUTOR; SUPPLY
ARRANGEMENT.
2.1 (a) HEB hereby appoints Olsten as a distributor of
HEB's Product in and for the Territory for the treatment of Patients with
CFS in the U.S. under treatment protocol AMP-511.
2.2 Subject to the termination provisions in Article 13,
Olsten hereby agrees to serve as HEB's distributor of HEB's Product in
and for the Territory during the term of this Agreement.
2.3 In the event that HEB obtains FDA approval of its
New Drug Application for the Product in the treatment of CFS ("Product
Approval"), the parties shall negotiate, in good faith the terms and
conditions of an agreement whereby Olsten is a distributor of the Product
in the Territory for HEB ("Distribution Agreement"). If FDA Product
Approval is obtained, and the parties do not enter into a Distribution
Agreement within six (6) months of the date of the FDA Product Approval,
HEB shall pay to Olsten an amount up to but not to exceed, in the
aggregate, the sum of $500,000.00 for all documented costs and expenses
incurred by Olsten in connection with the pharma-economic EPI-Q Study
and dedicated personnel (including salary and benefits) referred to in
Section 2.17 below. HEB shall pay such amount to Olsten within thirty (30)
business days following HEB's receipt of a documented invoice from Olsten
for such costs and expenses.
2.4 Within thirty days following the Effective Date of this
Agreement, HEB shall deliver to Olsten its drug utilization forecast for the
first Contract Year and will provide a list of current and potential clinical
sites. At least two (2) months prior to the beginning of each subsequent
Contract Year, HEB shall furnish Olsten with a good faith forecast for such
Contract Year. In return, Olsten will advance payment at the start of each
month for that month's forecasted drug utilization based on HEB `s Patient
forecast; provided however, that reconciliation of forecast and actual
utilization will be made on a monthly basis and any under utilization will
reduce the next months required advanced payment.
2.5 Olsten agrees to purchase the Product, and to
reconstitute/thaw the Product at the fee schedule set forth in Appendix I.
In addition, if the Product receives FDA approval, then HEB agrees that the
fee schedule shall be in effect for Patients enrolled in the AMP-S 11
Protocol at the time of FDA Product Approval and Olsten shall be entitled
to purchase the Product for said Patients at the prices set forth therein.
The fee schedule shall continue for those Patients for the lesser of one
(1) year following the date of the FDA Product Approval, or the date upon
which the parties execute the Distributorship Agreement described in
Section 2.3 above.
2.6 HEB agrees to use its best efforts to provide Olsten's
requirements for the Product in a timely fashion without interruption. HEB
agrees that if it exercises its rights under Section 13.3, it will
continue to be bound by this Section until the effective date of the
termination of this Agreement.
2.7 Olsten will provide those Distribution and
Warehousing Services described in Appendix II.
2.8 Olsten shall make such Supplies as are required for
the infusion of the Product available for purchase by any Patient serviced
by Olsten Health Services pharmacies or infusion units. In no event,
however, shall Olsten directly or indirectly require any Person (including
without limitation any Patient) to purchase Supplies or any other goods or
services from Olsten or from any other particular source as a condition of
receiving Product.
2.9 Olsten shall make available to each Patient, in
accordance with the Authorization, the Product Services and the
Reimbursement Services described in Appendix III hereto for the fees set
forth below.
2.10 Olsten shall maintain on a current basis in computer
databases and in such other format as may be reasonably requested by
HEB (taking into account Olsten's current information systems
capabilities) the information set forth in Appendix VI. All such information
shall be maintained in duplicate and at least one copy shall be stored in a
safe and secure environment. Olsten shall provide periodic reports to HEB
of such information as provided in Appendix IV.
2.11 Olsten shall have the right to return any expired,
defective or damaged Product to HEB for replacement of the same Product
or for a credit against future purchases (at Olsten's discretion); provided,
however, that any Product with an obvious defect that could reasonably be
expected to be discovered by Olsten in the ordinary course of business
(e.g., a damaged box) may be returned not later than thirty (30) days after
its receipt by Olsten. There will be no additional charge to Olsten for
replacement of the Product.
2.12 Olsten shall take title to the Product when it receives
the Product from HEB, HEB's designated agent, or assignment thereof
from the Patient.
2.13 The medication charges, which will be billed to
Patients by Olsten, without additional markup, are set forth in Appendix I.
2.14 Olsten agrees to distribute the Product in the
Territory through any means it determines to be reasonably appropriate
and which are in compliance with any and all applicable federal or state
statutes and regulations.
2.15 Olsten agrees to administer HEB's corporate
Compassionate Care Program in accordance with the written guidelines
and protocols of HEB. Eligibility guidelines will be set by HEB. The Parties
agree that Olsten shall not be obligated to pay for the Product provided by
Olsten to such indigent Patients under the Compassionate Care Program.
2.16 Olsten agrees to provide a certain amount of nursing
services without charge to such indigent Patients that HEB has identified to
Olsten in accordance with HEB's written Compassionate Care Program
and to whom Olsten has provided the Product (as set forth in Section 2.17).
The Parties agree that Olsten shall only be obligated to provide nursing
services without charge to a number of Patients equal to five (5%) percent
of the total number of Patients, and shall not be obligated for any free
nursing services beyond the five (5%) percent referenced herein.
2.17 Olsten agrees to provide financial support up to a
maximum amount of Five Hundred Thousand Dollars ($500,000) in the
aggregate to HEB in connection with the AMP-511 Protocol upon such
payment schedule as the parties may mutually agree and attach to this
Agreement as Appendix V. This financial support shall be used only for any
of the three purposes set forth herein:
(a) To provide to HEB a pharma-economic study
of the cost/benefit of the Product in comparison with other commercially
available products and services for the treatment of CFS (under PE-100
Protocol). The parties agree that EPI-Q shall be used to perform this study
and that Olsten shall be entitled to review any material relating to this
study and to receive any drafts and final product produced by EPI-Q. The
parties further agree that HEB shall have the right to audit, on an ongoing
basis, all services and obligations to be performed by Olsten and EPI-Q in
relation to the pharma-economic study to be performed in accordance with
the PE-100 Protocol. Olsten shall make payment directly to EPI-Q
pursuant to the EPI-Q contract.
(b) To compensate one Project Manager
(employed by OHS), experienced in clinical trials and knowledgeable about
FDA rules and regulations regarding clinical trials, whose obligations and
responsibilities shall, without limiting same, include: overseeing and
coordinating the performance of all Olsten and Epi-Q obligations under the
Agreement with the AMP-511 and the PE100 Protocols, FDA regulations
and any applicable Federal or State laws or regulations;
(c) To provide adequate coverage by one or more
Clinical Research Nurse(s) (employed by Olsten) at six (6) clinical sites to
carry out the Studies under AMP-511 and the PE- 100 Protocols identified
to Olsten by HEB. The Clinical Research Nurse's obligations and
responsibilities shall without limiting same, include: (1) assisting and
performing tasks with regard to the AMP-511 and PE- 100 Protocols at the
direction of Hemispherx Medical Director; (2) recording, or causing to be
recorded, all data required by the AMP-S 11 and PE-100 Protocols and the
Patient Case Book. The parties acknowledge that Clinical Research
Nurse(s) may be employed by Olsten on a full-time or part-time basis,
provided they meet Olsten's obligations hereunder.
2.18 In the event that the aggregate amount of funds
required to support the three activities described in Section 2.17 (a) - (c)
above exceed Olsten's commitment of $500,000, Olsten shall have no
further obligation to provide additional funding to or on behalf of HEB or
to continue to support any of the activities described therein.
3. COMPENSATION.
3.1 Olsten agrees to pay for the Product based on the
purchase price fee schedule set forth in Appendix I, as set forth in
paragraph 2.4.
3.2 Fees to Distributor.
(a) Warehousing and Distribution Services Fee.
For the Warehousing
and Distribution Services provided by Olsten (as described in Appendix II
hereto), HEB agrees to pay to Olsten every calendar quarter a fee equal to
five (5%) percent of the net wholesale price of each unit of Product
distributed by Olsten during such quarter.
(b) Product and Reimbursement Services Fee. For
the Product and Reimbursement Services and reports provided by Olsten
(as described in Appendix III hereto), HEB agrees to pay to Olsten every
calendar quarter a services fee equal to five (5%) percent of the net
wholesale price of each unit of Product distributed by Olsten during such
quarter.
(c) Information Services Fee. For the Information
Services and reports provided by Olsten (as described in Appendix IV
hereto), HEB agrees to pay to Olsten every calendar quarter a services fee
equal to two (2%) percent of the net wholesale price of each unit of Product
distributed by Olsten during such quarter.
(d) Payment Terms. Promptly after the end of each
quarter, Olsten shall deliver to HEB an invoice showing the amount of such
Product distributed and the calculation of the fee owing for such quarter.
Such invoice shall be due and payable within thirty (30) days following
HEB `s receipt of such invoice.
(e) Post-FDA Approval Fees. In the event that
HEB obtains FDA approvalfor the Product, the parties agree that the fees
set forth above shall be in effect and Olsten shall be entitled to receive
such fees for Patients enrolled in the AMP-S 11 Protocol, for the lesser of
one (1) year from the date of FDA approval, or the date upon which the
parties execute a definitive Distributorship Agreement.
4. PATENT, LICENSE AND OTHER INTELLECTUAL PROPERTY RIGHTS.
4.1 HEB represents that it is the exclusive owner of
various United States issued patents which concern the compound Poly I
:PolyC12U (Hereinafter referred to as Ampligenr), which validly issued
patents concern the clinical utilization of the product in various chronic
viral disorders, including without limitation Chronic Fatigue Syndrome.
Also, HEB represents that it is the exclusive owner of an orphan drug
designation for the disorder CFS, which designation specifically prohibits
for a period of 7 years other pharmaceutical manufacturers from
introducing this product for the treatment of CFS. HEB also represents
that it is the holder of various IND's with the FDA which permit clinical
evaluation of the test compound, and also the company is in good standing
with respect to various manufacturing documents which are necessary to
file with the FDA from time-to-time to support the utilization of the product
in clinical investigation within the United States. To the Company's
knowledge, no other pharmaceutical manufacturers have similar patents
issued in the United States or similar regulatory status with the FDA with
respect to this product. HEB further warrants that Olsten, by virtue of any
of its actions taken pursuant to this Agreement, and the patent/licensing
rights described herein, will not infringe upon or violate the rights of any
third parties. As set forth in Section 8, HEB agrees to protect, indemnify,
and hold Olsten harmless from any and all claims of infringement based on
patent, trademark, copyright, or trade secrets which may be brought by
third parties against Olsten in. respect of the Product.
(a) HEB specifically warrants that there are no
other agreements, amendments or licenses that affect HEB's authority or
ability to enter into this Agreement.
(b) HEB further warrants that it has obtained any
and all necessary governmental and contractual consents for ownership and
distribution rights to the Product under the AMP-511 Protocol, including
all dosage and administration forms (e.g., injectable, IV) described in the
protocol.
4.2 HEB warrants that, prior to the execution of this
Agreement, it has not assigned, encumbered, pledged, mortgaged, used as
collateral, granted a security interest or lien in or otherwise engaged
in any action that affects its ability to xxxxx Xxxxxx the right to
distribute the Product in the Territory.
4.3 HEB agrees that, during the term of this Agreement,
it will not engage in any action that could be anticipated to adversely
affect HEB's ability to xxxxx Xxxxxx the right to distribute the Product as
provided in Sections 2.1 and 2.2.
4.4 Olsten will distribute the Product under a
trademark(s) designated by HEB. HEB warrants and represents that the
designated trademark(s) shall not infringe the rights of any third parties.
HEB also warrants that it will register all trademark designated by it in the
United States Patent and Trademark Office, and further that, it has within
the last three (3) years made commercial use in the United States of the
trademarks Ampligen and that to its knowledge, no third-party is presently
using Ampligen in connection with any product in the United States.
4.5 Olsten agrees that it will distribute the Product in
original packaging (except under the practice of pharmacy) bearing a
notice of copyright and which shall be registered in the United States
Copyright Office. HEB warrants and represents that this original
packaging will not infringe the rights of any third parties.
5. GENERAL WARRANTIES.
5.1 HEB warrants that the Product shall: (i) be free from
defects in design, material and workmanship; (ii) be in compliance with
applicable law and all regulatory requirements of the Food and Drug
Administration ("FDA"), including but not limited to those related to the
adulteration or misbranding of products within the meaning of Section 501
and 502 of the Food Drug and Cosmetics Act; (iii) not be articles which may
not be introduced into interstate commerce pursuant to the requirements of
Section 505, 514, 515, 516 or 520 thereof; (iv) be manufactured in
accordance with current FDA Good Manufacturing Practices as required
by 21 C.F.R. 210 and 820.
5.2 Olsten warrants that it possesses all federal and state
licenses and permits necessary to its performance of this Agreement and
agrees to comply, in all material respects, with all federal and state laws
applicable to it for retail distribution and is a licensed exporter of
pharmaceuticals internationally.
5.3 HEB warrants that it possesses or will possess at time
of Patient treatment all federal and state licenses and permits necessary to
its performance of this Agreement and agrees to comply, in all material
respects, with all federal and state laws applicable to it.
6. REGULATORY MATTERS.
6.1 HEB represents that the Product has received
clearance from the FDA to be administered in the Territory for the
indication of chronic fatigue syndrome, in accordance with the
"Authorization", that current sites in the United States have received
Institutional Review Board approval and that all federal and state permits
for the manufacture, importation, design, testing, inspection, labeling,
warning, instructions for use, sale and distribution of all the Product
in the Territory under the protocol have been obtained. HEB agrees that
it shall be solely responsible for, and comply with, all applicable federal
and state laws governing the regulation of the manufacture, importation,
design, testing, inspection, labeling, sale, warning and instructions for
use of all the Product in the Territory.
6.2 Olsten shall notify HEB promptly of any inspection by
any federal, state or local regulatory representative concerning the Product
and shall provide HEB with a summary of the results of such inspection
and such actions, if any, taken to remedy conditions cited in such
inspections.
6.3 Olsten shall disclose all fees required to be disclosed
under any state or federal program which provides cost or charge based
reimbursement to Olsten for the Product provided under this Agreement as
required by the applicable provisions of 42 U.S.C. 1320a-7b. Olsten
further represents and warrants that it, and any of its Affiliates, are in
compliance with, and during the term of this Agreement covenants that it
and its Affiliates shall remain in compliance with, any federal or state laws
applicable to the fees paid by HEB pursuant to this Agreement, including
without limitation, any laws requiring the proper disclosure and/or
reporting of fees.
6.4 Each party agrees to inform the other party promptly
(but in no event no later than forty-eight (48) hours after becoming aware
of same) of any information concerning any complaint involving the
Product or any adverse drug experience (as defined in 21 CFR 314.80),
injury, toxicity, or sensitivity reaction associated with the clinical
use of the Product, whether or not considered related to the Product.
If the adverse drug experience is serious, as defined in 21 CFR 314.80
(including an adverse drug reaction as detailed in AMP-511 Protocol
(Appendix VI,) then each party shall notify the other party within
twenty-four (24) hours. All notifications to HEB shall be made via facsimile.
6.5 If there is a recall or withdrawal of the Product, then
Olsten agrees to stop shipping recalled lots immediately, and in no event
later than twenty-four (24) hours after Olsten receives written notification
of such recalls. Olsten shall cooperate in any such recall, at HEB's expense
if the recall was prompted by events preceding Olsten's receipt of product.
6.6 Olsten agrees to reasonably cooperate with any
inspection of the Product shipment conducted by a governmental agency.
Olsten shall promptly give notice to HEB of any Product shipment
inspected by a government agency.
6.7 HEB agrees to reimburse Olsten for any costs or
expenses (including attorneys' fees) Olsten may incur due to recalls,
withdrawals, replacements or government inspections of any the Product if
the recall was prompted by events preceding Olsten' s receipt of product.
Olsten shall prepare an invoice of such costs which invoice shall be paid by
HEB within thirty (30) days of its receipt of such invoice.
6.8 Olsten shall at all times during the Term of the
Agreement comply, in all material respects, with all federal and state laws,
regulations and orders applicable to its operations as a wholesale and/or
retail distributor.
7. INDEMNIFICATION.
7.1 HEB will indemnify, defend, and hold harmless
Olsten, its affiliates, parents, subsidiaries, directors, officers,
agents and employees (collectively, "Olsten Indemnitees") from and
against, and reimburse Olsten Indemnitees for, any and all claims,
demands, actions, causes of action, losses, judgements, damages,
costs and expenses (including, but not limited to, attorneys' fees, court
costs and costs of settlement) arising out of claims against a Olsten
Indemnitee based on: (a) HEB's manufacture of the Product; (b) the death of,
or bodily injury to, any person on account of the use of the Product, to
the extent such death or bodily injury results from a defect relating to
the Product or arising out of any negligence or wrongful conduct of HEB;
(c) any recall or withdrawal of the Product if the recall was prompted
by events preceding Olsten's receipt of product; (d) HEB's violation of
any applicable law or government regulation; (e) any claims that Olsten's
distribution or sale of the Product infringes the patent or other
proprietary rights of any third party; or (f) any breach by HEB of
any of its representations, warranties, covenants or agreements in this
Agreement.
7.2 Olsten will indemnify, defend, and hold harmless
HEB, its affiliates, parents, subsidiaries, directors, officers, agents and
employees (collectively "HEB Indemnitees") from and against, and
reimburse HEB Indemnitees for, any and all claims, demands, actions,
causes of action, losses, judgements, damages, costs and expenses
(including, but not limited to, attorneys' fees, court costs and costs of
settlement) arising out of claims against a HEB Indemnitee based on: (a)
the death of, or bodily injury to, any person on account of the use of the
Product, to the extent such death or bodily injury results from Olsten's
negligence or willful misconduct; (b) Olsten's violation of any applicable
law or govermnental regulation as it relates to the distribution of the
Product, the Product Services, and Reimbursement Services; (c) any breach
by Olsten of any of its representations, warranties, covenants or agreements
in this Agreement; or (d) any recall or withdrawal if the recall was
prompted by events following Olsten's receipt of product.
7.3 Olsten agrees that upon receipt of any claim or
liability asserted in writing against it which would give rise to a claim
against HEB under this Section, it shall promptly notify HEB in writing of
the same within fourteen (14) business days. HEB agrees that Olsten is
entitled to retain counsel of its own choosing at Olsten's expense to the
extent necessary, in Olsten's sole discretion, to protect Olsten's interests
and to act as co-counsel in the litigation or settlement of any claim or
threatened claim. Olsten agrees that so long as HEB does not enter any
settlement agreement or consent judgment that admits liability on the part
of Olsten or which fails to include an unconditional release of Olsten from
all liability from all asserted or threatened claims, HEB shall have the
right to control the defense, settlement, and prosecution of any litigation.
Anything in this section notwithstanding:
(i) If there is a reasonable probability in the
opinion of Olsten's counsel that a claim may materially and adversely affect
Olsten other than as a result of monetary damages or other monetary
payments for which HEB will be able to indemnify Olsten, Olsten shall have
the right to defend, and with HEB's prior consent, compromise and settle
such claim. Olsten's right to indemnification in such cases shall be limited
to its attorney's fees and costs plus any monetary settlement amount.
(ii) In the event that Olsten determines in its sole
discretion, based upon the written advice of counsel, that there is a
conflict in the position or defenses to be asserted by HEB and Olsten
regarding liability, Olsten shall be entitled to its own defense,
including the right, with HEB's prior consent, to settle or compromise
all or any of the claims against it, at HEB's expense.
7.4 HEB agrees that upon receipt of any claim or liability
asserted in writing against it which would give rise to a claim against
Olsten under this Section, it shall promptly notify Olsten in writing
of the same within fourteen (14) days. Olsten agrees that HEB is entitled
to retain counsel of its own choosing at HEB's expense to the extent necessary,
in HEB's sole discretion, to protect HEB's interests and to act as co-counsel
in the litigation or settlement of any claim or threatened claim. HEB agrees
that so long as Olsten does not enter any settlement agreement or consent
judgment that admits liability on the part of HEB or which fails to include
an unconditional release of HEB from all liability from all asserted or
threatened claims, Olsten shall have the right to control the defense,
settlement, and prosecution of any litigation. Anything in this section
notwithstanding:
(i) If there is a reasonable probability in the
opinion of HEB's counsel that a claim may materially and adversely affect
HEB other than as a result of monetary damages or other monetary
payments for which Olsten will be able to indemnify HEB, HEB shall have
the right to defend, and with Olsten's prior consent, compromise and settle
such claim. HEB's right to indemnification in such cases shall be limited to
its reasonable attorney's fees and costs plus any monetary settlement
amount.
(ii) In the event that HEB determines in its sole discretion, based
upon the written advice of counsel, that there is a conflict
in the position or defenses to be asserted by HEB and Olsten regarding
liability, HEB shall be entitled to its own defense, including the right,
with Olsten's prior consent, to settle or compromise all or any of the
claims against it, at Olsten's expense.
7.5 The obligation of an indemnifying party under this
Section 7.0 shall not be diminished by the indemnifying party's failure to
provide the notice required above except to the extent such failure actually
and materially adversely affects the indemnifying party's ability to defend
such matter.
8. RECORDS AND ACCOUNTING.
8.1 During the term hereof and for three (3) years
thereafter, or such longer period as may be required by law, Olsten shall
maintain accurate records as required to meet applicable local, state and
federal laws and regulations. Except as otherwise required by any such laws
or regulations, Olsten shall provide HEB access to any requested
documentation related to this Agreement during reasonable business hours.
HEB shall give Olsten seven (7) business days' prior written notice of such
examination. Such examinations will not occur more than twice annually,
and such examination will be undertaken only to such extent necessary to
verify that Olsten has complied with the terms of this Agreement.
9. ASSIGNMENT.
9.1 Neither party may assign any of its rights or delegate
any of its obligations under this Agreement without the prior written
consent of the other party, except in connection with the sale of
substantially all of a party's assets, in which case the party shall assign
this Agreement to the buyer of the assets, and which shall not require consent.
Notwithstanding the previous sentence, either party may assign its rights or
delegate its duties to any of its parents, subsidiaries, or affiliates without
written consent of the other party. Any unauthorized attempted assignment
or delegation shall be null and void and of no force or effect, unless ratified
by the other party once it learns of the attempted assignment or delegation.
10. INSURANCE.
10.1 HEB will maintain in effect during the term of this
Agreement a comprehensive general liability policy and products liability
policy and HEB shall immediately after the Effective Date of this
Agreement designate Olsten as an additional named insured on such
policies. The General Liability Insurance policy shall be in an amount not
less than One Million Dollars ($1,000,000) per incident, and Two Million
Dollars ($2,000,000) in the aggregate. The Product Liability Insurance
policy shall be in an amount not less than One Million Dollars ($1,000,000)
per incident with a deductible of no less than $10,000. These policies shall
provide for ten (10) days notice to Olsten by the Insurer by Registered or
Certified Mail, return receipt requested, in the event of any modifications,
cancellation, or termination thereof. HEB agrees to provide Olsten with a
certificate of insurance evidencing compliance with this section within
fifteen (15) days of execution of this Agreement.
Olsten will maintain in effect during the term of this
agreement a comprehensive general liability policy and Olsten shall
immediately after the effective date of this Agreement designate HEB as an
additional insured on such policy. The General Liability Insurance Policy
shall be in an amount not less than one million Dollars ($1,000,000) per
incident and two million Dollars ($2,000,000) in the aggregate. The policy
shall provide for ten (10) days notice to HEB by the Insurer by Registered
or Certified Mail, return receipt requested in the event of any
modifications, cancellation, or termination thereof. Olsten agrees to provide
HEB with a certificate of insurance evidencing compliance with this section
within fifteen (15) days of execution of this Agreement.
11. CONFIDENTIALITY AND REPORTS.
11.1 "Confidential Information" of a party shall mean any
and all information including, but not limited to, the terms and conditions
of this Agreement, and any other information that is or has been disclosed
in writing or orally by such party to the other party which is either
confidential or proprietary in nature; provided, however, that
"Confidential Information" shall not include information which:
(i) Is or becomes generally available to the public
through no fault of the receiving party;
(ii) Was known to the receiving party before such
party received it under this Agreement and was not acquired, directly or
indirectly, from the disclosing party; or
(iii) Is disclosed in good faith to the receiving party by
a third party lawfully in possession of such information and who was not
under an obligation of nondisclosure with respect of such information.
11.2 Each party acknowledges that it may have heretofore
received and may from time to time hereafter receive Confidential
Information of the other party, and such party receiving such Confidential
Information shall do the following:
(1) Maintain such Confidential Information in
confidence and shall not disclose such Information to any third party;
(ii) Not use such Confidential Information other
than in performance of this Agreement; and
(iii) Disclose such Confidential Information to its
employees or to employees of its affiliates only to the extent that such
employees need to know such Confidential Information to carry out the
receiving party's obligations under this Agreement.
11.3 Each party agrees to maintain confidential both
during the term of this Agreement and for a period of five (5) years
thereafter all Confidential Information provided to it pursuant to this
Agreement and shall not, without the specific written consent of the other
party, disclose it to any third party (except as required by law) or use it
for its own purpose (except as contemplated herein).
12. JOINT PUBLICITY.
12.1 If either party wishes to make a public disclosure
concerning or the relationship established hereunder and such disclosure
mentions the other party by name or description, such other party shall be
provided with an advance copy of the disclosure and shall have ten (10)
business days within which to approve or disapprove such use of its name
or description (including mention of the name of the Product). Either party
shall not unreasonably withhold or delay approval. Failure to respond
within such twenty-one (21) business days shall be deemed to be approval.
Absent approval, no public disclosure shall use the name of or otherwise
describe such party except to the extent required by law, or to the extent
that the description of the other party is limited to public information
about the availability of the Product. Notwithstanding the foregoing, the
parties acknowledge that Olsten and HEB are publicly traded companies, and
they hereby consent to disclosure of this Agreement and their relationship
(to the extent necessary or desirable in the disclosing party's judgment)
in the disclosing party's filings with the Securities and Exchange
Commission and its respective disclosures to its stockholders.
13. TERM AND TERMINATION OF AGREEMENT.
13.1 This Agreement shall become effective on the date
first written above and shall have a term of one (1) year calculated from the
Effective Date. This Agreement shall automatically renew for successive
additional one (1) year terms unless, not less than one hundred eighty (180)
days prior to the anniversary date, either party notifies the other of its
intent to terminate this Agreement as of the anniversary date.
13.2 The initial term of this Agreement or any renewal
term may be terminated only as follows:
(i) This Agreement may be terminated at any time
upon the mutual written consent of both parties.
(ii) At any time after the first Contract Year,
either HEB or Olsten shall have the right to terminate this Agreement
without cause upon not less than one hundred eighty (180) days prior
written notice to the other.
(iii) This agreement will automatically terminate when
HEB receives New Drug Approval for commercial sales of the Product.
13.3 This Agreement may be terminated by either Party
upon the occurrence of an Event of Default with respect to the other Party,
provided that such Party shall first give to the defaulting Party written
notice of the proposed termination or cancellation of this Agreement,
specifying the grounds therefor, and the other Party shall have sixty (60)
days after such notice is given to cure such default. Termination or
cancellation of this Agreement pursuant to this Section 13.3 shall not affect
any other rights or remedies which may be available to the non defaulting
Party nor shall it relieve either Party of obligations incurred prior to
termination, including Olsten's obligation to pay for Product ordered by
and delivered to it pursuant to this Agreement.
13.4 This Agreement may be terminated by either party
immediately upon notice to the other, if the other party shall make an
assignment for the benefit of creditors, shall file a petition in bankruptcy,
is adjudicated insolvent or bankrupt, or if a receiver or trustee is
appointed with respect to a substantial part of such other party's
property or a proceeding is commenced against it which will
substantially impair its ability to perform hereunder.
13.5 Notwithstanding anything to the contrary, all rights
granted under or pursuant to this Agreement by HEB to Olsten are, and
shall otherwise be deemed to be, for purposes of Section 365(n) of the
United States Bankruptcy Code, or replacement provision therefore (the
"Code"), licenses to rights to "intellectual property" as defined in the Code.
The parties agree that Olsten, as the licensee of such rights under this
Agreement, shall retain and may fully exercise all of its rights and elections
under the Code. The parties further agree that, in the event of the
commencement of bankruptcy proceedings by or against HEB under the
Code, Olsten shall be entitled, at its option, to retain all of its
rights under the Agreement, in accordance with the provisions of the Code.
13.6 Each of the parties to this Agreement shall be entitled
to enforce its rights under this Agreement to recover damages and costs
(including reasonable attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor, regardless of any termination of this Agreement by such breaching
party pursuant to Section 13. The parties hereto agree and acknowledge
that money damages would not be an adequate remedy for a breach of any
provisions in Articles 2, 4, 11, and 12 of this Agreement and that any party
may, in its sole discretion, apply to any court of law or equity of competent
jurisdiction (without posting any bond or deposit) for specific performance
and/or other injunctive relief in order to enforce, or prevent any violations
of, these Sections of this Agreement.
14. NON-SOLICITATION.
14.1 HEB agrees that during the term of this Agreement,
and for two (2) years thereafter, it shall not employ or retain on an
independent contractor basis, or solicit for employment or for an
independent contracting basis, any person who was, at any time during the
immediately preceding twelve (12) month period, employed by Olsten or
any of its affiliates, subsidiaries, or parents.
15. ENFORCEMENT OF EXCLUSIVITY VIS-A-VIS THIRD PARTIES.
15.1 Olsten shall not, directly or indirectly, sell or
distribute or cause to be distributed, the Product outside the Territory.
16. MISCELLANEOUS.
16.1 Choice of Law. This Agreement shall be governed by
and construed under the laws of the State of New York regardless of any
conflicts-of-laws rule to the contrary.
16.2 Waiver. No waiver of any default hereunder by either
party or any failure to enforce any rights hereunder shall be deemed to
constitute a waiver of any subsequent default with respect to the same or
any other provision hereof. No waiver shall be effective unless made in
writing with specific reference to the relevant provision(s) of this
Agreement and signed by a duly authorized representative of the party
granting the waiver.
16.3 Force Majeure. Notwithstanding any provision
contained herein to the contrary, neither part shall be deemed to be in
default hereunder for failing to perform or provide any of the services or
other obligations to be performed or provided pursuant to this Agreement
if such failure is the result of any labor dispute, act of God, inability to
obtain labor or materials, governmental restrictions or any other event
which is beyond the reasonable control of the party.
16.4 Notice. All notices and other communications made or
given under or in connection with this Agreement shall be validly given or
made if in writing and shall be effective either (a) when delivered in person
to the other party, or (b) on the same business day that it is transmitted by
facsimile to the facsimile number(s) set forth below, if transmitted prior to
5:00 p.m. Eastern Time on such business day, or on the first business day
following such transmission if transmitted after 5:00 p.m. Eastern Time or
if transmitted on a day other than a business day; provided a hard copy is
deposited within one (1) day after such transmissions in the U.S. mail,
postage prepaid, and addressed as set forth below for notices by U.S. mail;
or (c) on the third business day following its deposit in the U.S. mail,
postage prepaid, and addressed as follows:
If to HEB: Hemispherx Biopharma
One Penn Center
0000 XXX Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
Attn.: Xxxxxxx X. Xxxxxx, M.D., F.A.C.P,
CEO and Chairman
Facsimile No.: (000) 000-0000
If to OLSTEN: Olsten Health Services
000 Xxxxx Xxxxxx Xx.
Xxxxxxxx, XX 00000
Attn.: ____________________
Facsimile No.:_____________
With a copy to: Olsten Health Services
000 Xxxxx Xxxxxx Xx.
Xxxxxxxx, XX 00000
Attn.: Health Care Law Dept.
Facsimile No.: (000) 000-0000
16.5 Amendment. Neither this Agreement nor any of the
terms hereof may be terminated, amended, supplemented, waived or
modified orally, except by an instrument in writing signed by each party.
16.6 Survival of Provisions. Notwithstanding anything to
the contrary, Sections
2.3, 2.5, 2.11, and Article 8 (Records and Accounting), shall survive the
expiration or other termination of this Agreement for the respective periods
set forth therein and Article 7 (Indemnification), and Article 11
(Confidentiality) shall survive the expiration or other termination of this
Agreement for a period of three (3) years and five (5) years respectively.
16.7 Relationship of Parties. Olsten's relationship with
HEB hereunder shall be that of independent contractor, and neither party
shall be considered the agent, partner or employee of or a joint venture
with the other party, in its Performance of all duties under this Agreement.
16.8 Cumulative Remedies. Except as expressly provided
in this Agreement, and to the extent permitted by law, any remedies
described in this Agreement are cumulative and not alternative to any other
remedies available at law or in equity.
16.9 Severability. In the event that any one or more of the
provisions contained in this Agreement are for any reason held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or provisions had never been included.
The parties shall, in good faith, amend this Agreement to provide, to
the extent possible, each party with the benefits provided by such invalid
or unenforceable provision.
16.10 Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
16.11 Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original, but all of
which, when taken together, shall constitute one and the same instrument.
16.12 Signature Authority. Each signatory to this
Agreement has signature authority and is empowered on behalf of his or
her respective party to execute this Agreement.
16.13 Integration. This Agreement, together with all
appendices attached hereto, constitutes the entire agreement between the
parties with respect to the subject matter hereof, and supersedes all prior
oral or written agreements, commitments or understandings with respect
thereto.
In consideration of the mutual promises and covenants contained
herein and other good and valuable consideration, the undersigned have
agreed to be bound by this Agreement between Xxxxxxxx Home Health
Care, Inc., d/b/a Olsten Health Services and Hemispherx Biopharma, Inc.
XXXXXXXX HOME HEALTH CARE, INC., HEMISPHERX BIOPHARMA, INC.
D/B/A OLSTEN HEALTH SERVICES
By: __/s/ Xxxxxx X. Fusco_____ By: _/s/ Xxxxxxx X. Carter_____
Its: President Its: CEO
________________________________ _________________________________
APPENDIX I
Fee Schedule for Product
THIS SCHEDULE IS REFERENCED IN 2.5 AS THE P1UCE OLSTEN AGREES TO
PURCHASE THE PRODUCT FROM HEB.
1) Lyophilized 50mg vials of AmpligenTM -- $18.75 per 50mg vial
a) 200 mg dose -- $75.00 (4 x 50mg vials)
b) 400 mg dose -- $150.00 (8 x 50mg vials)
2) Frozen AmpligenT solution
a) 200 mg dose -- $75.00
b) 400 mg dose -- $150.00
3) AmpligenT solution
a) 200 mg dose - TBD
b) 400 mg dose - TBD
Pharmacy Fees
The Patient will be billed $75.00 (seventy-five dollars) per
prescription for preparation of the drug. Preparation of Ampligenr
solution from bottles will be according to procedures specified by HEB
document, Procedures for Receiving, Storing, and Using Ampligenr
Solution.
Supplies
The supplies listed below are needed for infusion of the Ampligenr
solution. These supplies will be shipped to the Patient with the drug as
needed. Patients without insurance coverage will be billed Olsten's usual
and customary price. If a Patient has insurance coverage, the Patients will
be billed the price the insurance company would allow for these supplies.
Item Inventory Number Item Inventory Number
----------- ---------------- ------------------ ----------------
Hiblcleanse soap ST-0576-04 3M plastic 1" tape 3M-1530-t
IV Pole MS---0500 78" gravity tubing AB-1859-48
Univ. adapter pin AB17015-48 IV catheter 24g DG---8324
Gloves(non-sterile) JJ---5885 Sabratek 3030 pump RL-3030-R
Sharps container WM-01861 7" ext. clave set IC-C2002
IV start kit RMG-5000 Opsites 4 X 5 SAN-4973
Alcohol pads CL---01 10 Non-sterile drapes GR-0187
3m1 syringes BD---9585
APPENDIX II
Warehousing and Distribution Services
1.Reconstitution, storage, and delivery to the Patient of the Product
shall be in a secure location and under the physical (temperature,
humidity, etc.) conditions specified by HEB document, Procedures
for Receiving, Storing, and Using Ampligenr Solution.
2.Cost to HEB for the Services hereunder is 5% of monthly total cost
of goods sold as outlined in section 3.2 (a).
APPENDIX III
Product and Reimbursement Services
Product Services.
1.Payor Education Services. Olsten shall provide payer (excluding
Medicaid and Medicare) education information and presentations from
time to time as necessary to secure reimbursement or
otherwise to affect or improve reimbursement for Product
and/or associated costs.
2.Clinical Site Education Services. Education services in
conjunction with Medical Director of HEB and/or HEB's
Manager of Clinical Research to educate the principal
investigator, clinical study nurse and/or other support health
professionals at the investigators site, to include distribution
of HEB's clinical education material.
3.Clinical Monitoring Services. Clinical monitoring services,
including without limitation, services required by JCAHO,
federal law and state pharmacy laws; monitoring of IV line
maintenance, drug to food and drug to drug interactions,
Patient compliance, proper dose and concentration rates; and
Patient counseling as required.
4.Program Manager. Olsten will assign a program manager to
insure the success of this project.
II. Reimbursement and Hotline Services.
1.Olsten will xxxx the Patient for drug, dispensing fee, and
supplies. Nursing services will also be billed to the Patient if
an Olsten nurse admimstrates the drug.
2.Olsten shall confirm initially whether a Patient, shipped by
Olsten, has insurance coverage or will otherwise be entitled
to reimbursement with respect to the Product or Supplies.
3.Olsten shall provide broad statement comprehensive
counseling services to Patients
with respect to insurance coverage, claims, or other
reimbursement issues.
4.Olsten shall use reasonable efforts to assist the Patient or the
Patient's representative,
as necessary, in securing insurance coverage or other means
of reimbursement for the Product and Supplies, including
without limitation assisting such Patient in pursuing claims
for reimbursement or coverage.
APPENDIX III
(continued)
5.Olsten shall advise and counsel the Olsten Health Services
study Patient or such Patient's representative with respect to
such Patient's insurance coverage and copayment
requirements, if any, with respect to the Product and
Supplies.
6.Olsten shall obtain, set up, operate, staff, and maintain a 1-
800 telephone assistance service. Such telephone service shall
be staffed 24 hours a day with qualified personnel to take
calls from Patients and Patient representatives regarding the
Product and use of the Product and emergency treatment
issues. Title to the telephone number shall be in the name of
HEB, but during the term of this Agreement Olsten shall
have responsibility for the cost of maintaining, staffing, and
operating this 1-800 number. Within (15) days after the end
of each calendar month, Olsten shall deliver to HEB a report
containing a summary of calls and activity on the 1-800
hotline. Such report shall include the number of calls
received, the number of callers by type of caller (e.g., Patient,
physician, nurse, relative, Medicaid/Medicare personnel,
indemnity insurer, etc), the purpose of the calls and such
other information which HEB may reasonably request.
Cost to HEB is 5% of monthly total COGS as outlined in section 3.2 (b).
APPENDIX IV
Information Services and Requirements
Within fifteen (15) days after the end of each calendar month,
Olsten shall deliver to HEB a report containing the following information
with respect to Patients serviced by Olsten Health
Services:
1. Study identification number of the Patient.
2. Exact date each Olsten Health Services Patient-using Product
started on the Product.
3. Current dosing for each Olsten Patient using Product.
4. Insurance coverage type of the Patient.
*Coverage Types: Medicare payers, Medicaid payers, private payers, third
party payers, no insurance coverage, Patient Assistance Patients.
Cost to HEB 5% of monthly total COGS as outlined in section 3.2(C)
