Exhibit 10.1
SUPPLY AGREEMENT

     
BETWEEN:
  QUANTRX BIOMEDICAL CORPORATION, a Nevada corporation (“QuantRx”);
 
   
AND:
  CYTOCORE, INC., a Delaware corporation (“CytoCore”).
 
   
DATED:
  May 19, 2008.

R E C I T A L S:
     A. QuantRx® has developed and/or owns the rights to certain technology
relating to the collection, transfer and use for diagnostics of vaginal fluids,
including all biological materials contained in same, which QuantRx® has branded
“PadKit®”. CytoCore is engaged in the business of developing and commercializing
products for the screening and/or diagnosis of cancers and other diseases of the
female reproductive system.
     B. CytoCore desires to pursue the development of a diagnostic product
utilizing QuantRx’ “PadKit®” technology for specific uses, and to utilize
QuantRx® for manufacturing of one or more products employing QuantRx’s “PadKit®”
technology, all subject to and on the
terms and conditions set forth below.
A G R E E M E N T:
     In consideration of the foregoing Recitals, which are by this reference
incorporated in this Development and Supply Agreement (this “Agreement”), and in
consideration of the mutual promises, representations, warranties and covenants
set forth below, the parties agree as follows:
     1. DEFINITIONS. When used in this Agreement, the following terms have the
meanings set forth below.
          1.1 “Pad” means the untreated QuantRx PadKit® miniform interlabial pad
as specified in Schedule B (the “Specifications”). Without limiting the other
provisions of this Section, the Pad specifically does not include PadChek™,
where the pad comprises or contains the diagnostic method.
          1.2 “Product” means an assembly or kit as specified in Schedule B
comprising one or more Pads plus one or more ancillary components packaged
together.
          1.3 “Technology” means the detection, identification, diagnosis,
staging, evaluation and/or classification of reactive, dysplastic and malignant
changes in human cervical, endometrial, ovarian and other cells as contained in
samples collected using and/or recovered from the Pad.
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          1.3.1 For the purposes of this agreement, the “Technology” shall also
include the ability to use samples collected using or recovered from the Pad
with any method for detecting and identifying or typing Human Papilloma Virus,
herein “HPV”.
          1.4 “Data” means descriptive; clinical, scientific; manufacturing and
other information related to the Pad, the Product and the Technology as
described in 1.1 - 1.3 above that has been, is being, and/or will be collected
or developed by QuantRx, including any such information that is required in
order to obtain and/or maintain regulatory approvals.
          1.5 “Distribution Channels” means: (a) sales to physicians; (b) sales
to hospitals for their own use on their premises; (c) sales to laboratories; and
(d) sales to distributors for use in (a) and (b) above.
          1.6 “Territory” means all countries of the world.
     2. LICENSE FEES. CytoCore agrees to pay the following fees to QuantRx:
          2.1 Upon mutual execution of this Agreement, CytoCore will pay to
QuantRx a fully earned, nonrefundable license fee for use of the Data of
$100,000.00 (the “License Fee”). CytoCore shall additionally pay to QuantRx a
milestone payment of $50,000 upon or before Regulatory approval of the first
CytoCore product utilizing the Technology; and a milestone payment of $50,000
upon or before the sale of $1,000,000 of CytoCore products which utilize the
Technology. In addition, CytoCore will pay to QuantRx a fee of $5,556 per month
for eighteen (18) months, starting the 1st day of the month following the
Effective date provided that this Agreement is not previously terminated by
either Party. CytoCore reserves the right to prepay without penalty any amounts
due QuantRx under this Section.
          2.2 CytoCore shall purchase such number of units of Product per year
as set forth in Section 7, at such prices as are set forth on Schedule D.
          2.3 All fees payable pursuant to this Section 2 shall be made by wire
transfer, cashier’s check or other good funds payment. Any undisputed fee not
paid within five days of its due date shall bear interest at 12.0% per annum
from its due date until paid in full.
          2.4 In the event any undisputed fee payable pursuant to this Section 2
is not paid within 10 days after written demand from QuantRx for payment,
including any accrued interest thereon, QuantRx may terminate this Agreement
with respect to the items attributable to the unpaid portion. In such event, the
rights and duties of the parties shall be as set forth in Section 18 below,
except that any fully paid license shall survive termination or expiration for
any reason.
3.0 GRANT. QuantRx grants to CytoCore an exclusive right to use, market, sell,
have sold, and distribute the Product and Technology in the Distribution
Channels in the Territory, whether directly or contractually through independent
agents or distributors. The foregoing Grant and rights are subject to all terms
and conditions set forth in this Agreement. The Grant does not act to relinquish
QuantRx’ rights to the Technology nor to the Product in other Distribution
Channels and does not grant, by implication or otherwise, any other rights to
CytoCore of any other technologies owned, invented or discovered by QuantRx,
whether past, present or future. Upon
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payment of the license fees set forth above, QuantRx further grants to CytoCore
a perpetual, irrevocable worldwide right and license to use the Data as needed,
at CytoCore’s discretion, to obtain regulatory approval for marketing CytoCore’s
products and services.
CytoCore shall have the right to sub-license portions or all of its rights under
this Agreement in those countries where CytoCore’s ability to enter the market
directly is limited or precluded by local content and/or local ownership laws
and/or regulations assign to the JV.
4.0 REGULATORY CLEARANCE. CytoCore shall be solely responsible, during the term
of this Agreement for pursuing, obtaining and maintaining each regulatory
clearance required for CytoCore’s sale of the Products to be distributed and
sold in the Distribution Channels within the Territory, and for fulfilling the
obligations as the holder of such clearances.

4.1   Without limiting the foregoing, CytoCore shall be responsible for the
payment of all costs and expenses for all submissions and clinical trials
required to obtain such clearance, except that CytoCore may use Data as set
forth above. CytoCore shall also be responsible for compliance with the medical
device reporting (“MDR”) requirements of the FDA, as specified in 21 CFR
Part 803 and foreign counterparts thereto, and corrections or removal
requirements, as specified in 21 CFR Part 806 and foreign counterparts thereto,
and to notify QuantRx of all MDR and corrections or removal filings. CytoCore
agrees to immediately notify QuantRx in writing of recalls, and corrections or
removal actions.

5. SUPPLY OBLIGATIONS. During the term of this Agreement and provided the
Products remain compliant with the Specifications therefore and subject to
permitted terminations as set forth in Section 14.4, CytoCore shall only
purchase Products from QuantRx and no others.

5.1   During the term of this Agreement, QuantRx will exclusively manufacture
and supply to CytoCore such quantities of the Products as CytoCore shall require
from time to time in accordance with this Agreement.

5.1.1   Notwithstanding the foregoing, if QuantRx or its designee is unable to
supply the quantities of Product required by CytoCore or if within a market the
ability of QuantRx or its designee to supply Product or Product components is
restricted or precluded by law or regulation, CytoCore shall be granted a
license to have made and sell Product, and to procure Product or components
thereof from suitable parties other than QuantRx, provided that CytoCore pays
QuantRx for such right a royalty of 8% of the price, net of shipping, taxes, and
duties paid to such a party for Pads.   5.2   No QuantRx Right to Distribute and
Market. No right to market, sell or distribute any Product, as defined herein,
in any Distribution Channel is granted by CytoCore to QuantRx under this
Agreement. Additionally, QuantRx has no right to the use of CytoCore trademarks,
copyrights or similar property, except as required and approved by CytoCore for
the marking of packages and other manufacturing operations, intended for the
exclusive use by CytoCore. QuantRx will mark the Products, packaging and
packaging inserts with patent markings appropriate to reflect the Patents and as
otherwise directed by CytoCore.

5.3   Shipping. CytoCore will issue Purchase Orders for the Products to QuantRx,
and QuantRx will ship such orders to CytoCore or to such location or recipient
as directed by CytoCore

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    after receipt of the order from CytoCore, and in accordance with shipping
instructions on purchase orders received by QuantRx from CytoCore. Shipping and
handling charges will be charged on the invoices, or be collect to CytoCore as
agreed upon by the Parties. Shipping times will be mutually and reasonably
agreed upon by the Parties, and based on the size of the order and type of
shipping. Notwithstanding the foregoing, all orders will be shipped within
60 days of receipt of purchase order, unless otherwise agreed.   5.4  
Regulatory. QuantRx shall be solely responsible, during the term of this
Agreement and prior to its first commercial order for Product from QuantRx, to
pursue, obtain and maintain all records, filings, approvals, and materials
necessary to comply with manufacturing the Product in full compliance with US
FDA, European EC, and other agency requirements. without limiting the foregoing,
QuantRx shall maintain current establishment registration and device listings,
as specified in 21 CFR Part 807 and as required by the country in which
manufacture of Product is performed.   5.5   Samples. QuantRx shall supply to
CytoCore such amounts of product samples as mutually agreed to be necessary to
generate customers or potential customers for the Products and for the purpose
of clinical trials of Product at a price equal to its direct cost plus 35%.  
5.6   Force Majeure. QuantRx will use its best efforts to fill accepted orders
as promptly as practicable, subject to unanticipated delays caused by
governmental orders, actions or requirements, transportation conditions,
inclement weather, labor or material shortage, strike, riot, terrorist act,
fire, natural disaster or other cause beyond QuantRx’ control. In all cases,
QuantRx will use its best efforts to advise CytoCore in advance of any inability
to make full and timely delivery of Products to CytoCore. Each party shall not
be liable for failure to perform hereunder due to governmental orders, actions
or requirements, transportation conditions, inclement weather, labor or material
shortage, strike, riot, terrorist act, fire, natural disaster or other causes
beyond such non-performing party’s reasonable control.   5.7   Forecasting.
CytoCore will provide to QuantRx every month a written nonbinding 3-month
rolling forecast of CytoCore’s proposed requirements for the Products, including
Product samples by SKU. QuantRx agrees to maintain the capacity to supply up to
15.0% over such monthly forecast.   5.8   Failure of Supply. If QuantRx is
unable to timely supply ordered Product within 10 days after request to cure
same from CytoCore, then CytoCore may pursue manufacturing of the Product by a
qualified third party. However all other terms and conditions of this Agreement
will remain in effect.   6.0   MINIMUM QUANTITIES.   6.1   Amounts. CytoCore
agrees to purchase from QuantRx the following minimum quantities of Product in
each of the following annual periods, beginning with the date of first
commercial order. Quantities will be determined after unit pricing has been
agreed to. CytoCore Inc. agrees to purchase a minimum of $25,000 the first year
rising $15,000 each subsequent year to $40,000 year 2, $65,000 year 3,
$80,000 year 4 and $95,000 year 5.

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    The parties will negotiate in good faith commercially reasonable amounts for
subsequent annual periods and years. Any excess purchases above the agreed
minimum in one annual period shall not be carried over to the following annual
period. In the event the parties cannot agree on minimum volumes after the third
annual period, such disagreement shall be legitimate basis for termination
without cause of this Agreement by one party under Section 18 below, upon not
fewer than 90 days’ prior written notice.   6.2   Cure by CytoCore. In the event
that at the end of any annual period, CytoCore has not met the agreed minimum
purchase requirement for such period, CytoCore shall, within 45 days after the
end of such annual period, in its sole discretion, either (a) pay the difference
between the units actually purchased and the minimum purchase requirement; or
(b) purchase such additional units in order to meet the minimum purchase
requirement for such prior period.   7.0   MANUFACTURING.   7.1   Manufacturing
Obligations. QuantRx shall manufacture the Products in compliance with the
Specifications, which may be changed by prior written agreement of the parties,
and in compliance with Quality System Regulation (“QSR”) requirements set forth
in 21 CFR Part 820 and in conformance with the requirements of ISO 13485.   7.2
  Quality Control. QuantRx shall, at its cost, perform all quality control tests
required by regulatory authorities and reasonably required by CytoCore. In
addition, prior to the shipment of each order to CytoCore, for each
manufacturing lot included in said shipment, QuantRx shall deliver to CytoCore
lot qualification samples in accordance with a mutually agreed upon sampling
plan. CytoCore shall perform acceptance testing on such samples from each lot
and shall in a timely manner notify QuantRx whether each lot satisfies the
mutually agreed upon acceptance criteria. Acceptance of a manufacturing lot of
Product by CytoCore constitutes approval for QuantRx to ship the balance of said
lot to CytoCore in accordance with Section 5.3 above. Lot qualification samples
will not be considered to be part of the Amounts listed in Section 7.1 above.  
7.3   Changes to Product. QuantRx shall notify CytoCore in writing at least
90 days prior to any proposed changes in its manufacturing procedures,
materials, equipment or processes which affect Product design, form or function.
As and to the extent reasonably agreed in writing by the parties and as
permitted by applicable law. QuantRx may change a Product and any Specifications
related to it. QuantRx agrees that no such changes will cause CytoCore to lose
regulatory approvals for the Products, and shall pay the cost of any
resubmissions to regulatory agencies required as a result of such changes.   7.4
  Non-Conformity and Defective Products. If CytoCore notifies QuantRx that any
Products supplied by QuantRx do not conform to the Specifications or are
otherwise defective (including notification of why CytoCore believes the
Products to be defective), then QuantRx shall, at its cost, replace such
defective quantity of the Products and at QuantRx’ cost ship the replacement
Products as reasonably directed by CytoCore to CytoCore or CytoCore’s customer
at the location of such defective quantity of the Products, to be shipped within
30 working days after the receipt of the defective Product. QuantRx shall

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    keep and maintain adequate records of all quality control testing,
instrumentation validation and stability studies and, upon CytoCore’s reasonable
request, shall provide CytoCore with access to such records and the results of
any testing. At its sole discretion and cost, QuantRx may instruct CytoCore to
return some or all of the non-conforming and/or defective Product to QuantRx or
to destroy such product.   7.5   Recalls, Corrections and Removals. QuantRx and
CytoCore agree that if either party should discover or become aware of any fact,
condition, circumstance or event (whether actual or potential) concerning or
related to the Products which may reasonably require recall, correction or
removal, such party shall promptly communicate such fact, condition,
circumstance or event to the other party within 24 hours. In the event any
governmental entity or regulatory body requests that a Product be recalled, or
the parties agree, after consultation with each other, that a Product should be
recalled or removed, the parties shall take all appropriate remedial actions
with respect to such recall or withdrawal of the Product.   7.6   Audit.
CytoCore reserves the right to audit QuantRx’ (and its subcontractors’ and
designees’) facilities, at CytoCore’s sole expense, as reasonably necessary to
verify compliance by QuantRx with the terms and conditions of this Agreement.
Exercise by CytoCore of such right shall be subject to the following conditions:
(a) with good cause (for example, QuantRx’ failure to remedy problems) as needed
to verify that the cause has been successfully resolved in accordance with all
applicable regulatory requirements; (b) without good cause shown, CytoCore shall
be entitled to conduct up to two audits per 12-month period; (c) CytoCore audits
shall be conducted only after at least five days’ advance written notice of the
audit is provided by CytoCore to QuantRx; and (d) all information gathered and
data reviewed during any such audit shall be “Confidential Information” subject
to the provisions of Section 16 below. QuantRx shall at all times maintain
complete and accurate books and records pertaining to performance of its
manufacturing and other obligations set forth in this Agreement. QuantRx shall
provide commercially reasonable cooperation to CytoCore in the performance of
audits by or on behalf of CytoCore, including without limitation, providing
reasonable access to documents relevant to the manufacture of Products sold to
CytoCore, subject to the provisions of Section 16.

8. CUSTOMER SERVICE AND COMPLAINTS. CytoCore shall, at its cost, furnish all
technical service, assistance and support required by its customers or users of
the Products and arising out of sales of Products made by or on behalf of
CytoCore. CytoCore will provide QuantRx with copies of all inquiries, complaints
and requests pertaining to the Products in a timely manner. QuantRx shall be
solely responsible for investigation of any Product complaints, such
investigations being carried out in accordance with the requirements of 21CFR820
and the results of such investigations being provided to CytoCore in a timely
manner.
9. LIMITED WARRANTY OF MANUFACTURER. CytoCore’s sole remedies for defective
Products are set forth in Section 7.4 above. Except as expressly provided above,
Manufacturer shall not be liable for any damages, costs, expenses or claims
(whether based on contract, tort or otherwise), or for breach of any warranty,
express or implied, or for any other obligation or liability on account of the
Products covered by this Agreement, including special, punitive or consequential
damages, even if advised of the possibility thereof. EXCEPT AS REQUIRED BY
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APPLICABLE LAW, AND EXCEPT AS EXPRESSLY PROVIDED ABOVE, QUANTRX DISCLAIMS ALL
WARRANTIES WITH RESPECT TO THE PRODUCTS, EXPRESS OR IMPLIED, INCLUDING
WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE.
10. PACKAGING.

10.1   Packaging. CytoCore will procure and provide to QuantRx, all required
artwork, in any or all appropriate languages, for bulk or individual unit
packaging, labeling and package insertions (collectively, “Packaging”) to be
used by QuantRx for the Products to be shipped to CytoCore. CytoCore shall also
provide any necessary EAN codes. All Products shall be packaged in lots as set
forth in the Specifications. All Packaging shall include the brand name of the
Product as designated by CytoCore.   10.2   Packaging Ownership Rights. CytoCore
is and shall be the copyright owner or licensee of all designs and artwork used
in connection with packaging for the Product. To the extent third-party
trademarks or other rights are necessary for certain customers, CytoCore
represents that it has or will have obtained the right from such third parties
for CytoCore the right to use such trademarks or other rights solely for such
purpose.   10.3   Product Inserts. All Product Inserts must be pre-approved by
CytoCore and be in full compliance with all labeling laws in each jurisdiction
in which Products are distributed.   10.4   Advertising. All advertising and
contents thereof shall the sole responsibility of CytoCore.

11. PRODUCT PRICING AND PAYMENT.

11.1   Purchase Price. QuantRx shall charge CytoCore, and CytoCore shall pay for
the quantities of Product delivered by QuantRx pursuant to this Agreement, at
the purchase prices set forth in the attached Schedule C to be completed in good
faith and initialed by the parties. If the parties are unable to agree on the
purchase prices (each, a “Purchase Price”) by the date of receipt by CytoCore of
the 510k clearance for the Product to be manufactured by QuantRx, then the
provisions of Section 19.3 below shall be utilized by the parties to establish
same, with all costs and expenses to be borne 50/50 by QuantRx and CytoCore.
Each Purchase Price is and shall be CIF/POE. Duties, fees, and local
transportation shall the responsibility of CytoCore.   11.2   Price Adjustment.
No adjustment in a Purchase Price shall be permitted during the initial annual
period following CytoCore’s first order. Thereafter, but not more than once
during any calendar year. QuantRx may adjust a Purchase Price according to the
formula provided in Schedule C (QuantRx direct cost plus 35%, direct costs being
verifiable by audit) upon at least 90 days’ advance written notice to CytoCore.
Adjusted Purchase Prices shall apply to Product orders quoted by CytoCore after
the effective date of said notice. In no event shall any annual increase in the
Purchase Price exceed the previous year’s Purchase Price by greater than 10.0%,
unless approved, in writing, by both parties hereto. QuantRx shall use best
efforts to achieve price reductions each year through volume discounts and
manufacturing efficiencies 11.3 Payment. CytoCore agrees to pay each undisputed
invoice of QuantRx within 30 days after CytoCore’s receipt of the Products that
are the subject of

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    the invoice. If CytoCore reasonably disputes any invoice for good cause and
in good faith, CytoCore will notify QuantRx within 10 days of invoice receipt,
stating the specific reason(s) for the dispute.   11.4   Late Payment. Unpaid
amounts will bear interest at 12.0% per annum from the due date until paid in
full, calculated on a non-compounding daily basis, in addition to QuantRx’ other
rights and remedies set forth in Section 18 below.   11.5   Title; Risk of Loss.
Title to ordered Products will pass to CytoCore upon the later of tender of
delivery or payment. Risk of loss will pass to CytoCore upon tender of delivery.

12. INTELLECTUAL PROPERTY. QuantRx will retain full ownership of the
Intellectual Property which underlies the Technology and Product(s).
13. TERM AND TERMINATION.

13.1   This Agreement shall become effective when fully executed by both parties
and the License Fee is paid. This Agreement shall have an initial term of five
years (beginning on its execution), with automatic renewals of five years each,
unless (a) terminated by either party, (b) one party gives notice of termination
at least 90 days prior to the end of the initial or any renewal term, or
(c) terminated as set forth below.

13.2   CytoCore may terminate this agreement by providing thirty (30) day
advance written notification of such termination to QuantRx at any time within
18 months of the effective date or providing ninety (90) day advance written
notice thereafter. In the event of such termination, CytoCore shall be
responsible for the payment of any milestone payments and/or fees earned by
QuantRx prior to the termination date and for payment for any Product ordered,
but not yet paid for, during this period.   13.3   QuantRx may either terminate
this agreement 24 months from the Execution Date, or accept $100,000 to delay
this option for an additional 12 months, should CytoCore not achieve the
milestones found in Section 2.1 herein.

  13.3.1   Should the milestones shown in 2.1 herein not be met within 36 months
from the Execution Date hereon, the agreement shall be deemed to be terminated.

13.4   CytoCore may terminate this Agreement for cause upon notice and failure
to cure within 10 days of notice under the following conditions:

  13.4.1   Defective Products are received more than twice in any year    
13.4.2   QuantRx fails to timely supply Products in the amounts ordered by
CytoCore; or     13.4.3   QuantRx’s supply of the Products are enjoined by
reason of alleged infringement or found to be infringing and a non-infringing
substitute is not timely provided.

13.5   Termination of this Agreement for any reason by either party shall not
relieve the parties of any obligations accrued prior to the effective date of
the termination.

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13.6   If a party should fail to perform under this Agreement or should violate
any term of this Agreement, then the other party may give written notice of the
default and, if the defaulting party fails to fully correct the default within
60 days, then the other party shall have the right to terminate this Agreement  
13.7   Upon termination of this Agreement:

     (a) All rights, licenses and privileges granted to CytoCore under this
Agreement shall immediately cease and terminate, but any such termination will
not affect the rights and obligations of the parties respecting remedies for
breach of this Agreement;
     (b) All obligations arising out of events prior to the effective
termination date, including without limitation orders previously accepted and
obligations to pay for delivered Products, shall be performed in accordance with
the terms and conditions of this Agreement;
     (c) If terminated by QuantRx, CytoCore shall have the right to fulfill any
contract obligations for the sale of Products that it may have upon its books
when termination notice was received by CytoCore. If, at the time of
termination, CytoCore does not have sufficient Product in inventory to meet
these contract obligations, QuantRx shall supply CytoCore with sufficient
product to meet these obligations under the then existing terms and conditions.
In addition, CytoCore has the right to sell unsold Product in its inventory for
a period of six months after termination; and
     (d) All sublicenses shall also be terminated by CytoCore unless otherwise
extended by QuantRx.
14. INDEMNITY AND LIMITATION OF LIABILITY.

14.1   Indemnification by CytoCore. CytoCore shall indemnify, defend and hold
QuantRx and its Affiliates and the officers, directors, employees, agents and
independent contractors of each of them harmless from and against any and all
claims, demands, actions, suits, losses, damages, liabilities, settlement
amounts, costs or expenses (including reasonable attorneys’ fees and costs)
(collectively, “Claims”) arising out of or relating to: (a) CytoCore’s breach of
this Agreement; or (b) CytoCore’s gross negligence or willful misconduct or
(c) any products liability claims relating to CytoCore products excluding the
Products provided by QuantRx hereunder.

14.2   Indemnification by QuantRx. QuantRx shall indemnify, defend and hold
CytoCore, its Affiliates and the officers, directors, employees, agents and
independent contractors of each of them harmless from and against any and all
Claims arising out of or relating to: (a) QuantRx’ breach of this Agreement; or
(b) QuantRx’ gross negligence or willful misconduct; or (c) any products
liability claims relating to use the Products.   14.3   Indemnification
Procedure. The party seeking indemnification (the “Indemnified Party”) will give
prompt written notice of any Claim of which the Indemnified Party is aware to
the other party (the “Indemnifying Party”); provided, however, that the failure
by an Indemnified Party to give such notice will not relieve the Indemnifying
Party of its

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  obligations under this Section 15, except to the extent that the failure
results in the failure of actual notice and the Indemnifying Party is damaged as
a result. The Indemnified Party will allow the Indemnifying Party to direct the
defense and settlement of any such Claim, with counsel of the Indemnifying
Party’s choosing, and will provide the Indemnifying Party, at the Indemnifying
Party’s expense, with information and assistance reasonably necessary for the
defense and settlement of the Claim. In the event that the Indemnifying Party
fails to assume the defense or settlement of any such Claim within 30 days after
receipt of notice of same from the Indemnified Party, the Indemnified Party
shall have the right to undertake the defense, appeal or settlement of such
Claim at the expense of and for the account of the Indemnifying Party. An
Indemnifying Party will not be liable for any settlement of a Claim affected
without its reasonable written consent, nor will an Indemnifying Party settle
any such Claim without the reasonable written consent of the Indemnified Party.
No Indemnifying Party will consent to the entry of any judgment or enter into
any settlement that does not include as an unconditional term the giving by the
claimant or plaintiff to the Indemnified Party a release from all liability with
respect to the Claim.

14.4   Limitation of Liability. EXCEPT AS RELATED TO INDEMNIFICATION OBLIGATIONS
HEREUNDER, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL,
INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES. EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

15.0 REPRESENTATIONS AND WARRANTIES.

15.1   No Conflicts. Each of QuantRx and CytoCore represents and warrants to the
other that it is not a party to any agreement or covenant with any other person,
and knows of no statute, law, ordinance, regulations, rule, order or decree of a
governmental authority, which prohibits or restricts it from entering into and
performing pursuant to this Agreement.

15.2   Compliance with Law. QuantRx and CytoCore each represents and warrants
that it is, and will remain, in compliance with all applicable international,
federal, provincial, state and local laws, regulations and orders related to its
respective business and duties under this Agreement. QuantRx specifically
represents and warrants that the Product shall, as of the date of shipment to
CytoCore or its customers, not be adulterated or misbranded within the meaning
of the U.S. Food, Drug, and Cosmetic Act, and any similar provisions of state
and local laws, regulations and orders, and shall comply with GMP requirements
for such products including but not limited to ISO 13485 and foreign
equivalents. CytoCore specifically represents and warrants that it will maintain
the 510(k) clearance(s) for the manufacture of the Products from the FDA,
including for any Product modification requiring 510(k) clearance, and shall
maintain such rights throughout the term of this Agreement.

15.3   Authorization – OuantRx. QuantRx represents and warrants that:
(a) QuantRx has the right to enter into this Agreement; (b) all necessary
actions, corporate and otherwise, have been taken to authorize QuantRx’
execution and delivery of this Agreement and the same is the valid and binding
obligation of QuantRx; (c) all licenses, consents and approvals necessary for
QuantRx to cany out all of the transactions contemplated in this Agreement have
been

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  obtained and (d) QuantRx has the experience and technical and physical
capacity to fulfill its obligations under this Agreement.

15.4   Authorization – CytoCore. CytoCore represents and warrants that: (a)
CytoCore has the right to enter into this Agreement; (b) all necessary actions,
corporate and otherwise, have been taken to authorize CytoCore’s execution and
delivery of this Agreement and the same is the valid and binding obligation of
CytoCore; (c) all licenses, consents and approvals necessary for CytoCore to
carry out all of the transactions contemplated in this Agreement have been
obtained; and (d) CytoCore has the experience and technical and physical
capacity to fulfill its obligations under this Agreement.   15.5   QuantRx
represents and warrants that the Products will comply to the specifications
therefore and that such Products do not infringe any proprietary right of any
third party.

15.6   Insurance. Each party shall, during the term of this Agreement, at its
sole cost and expense, obtain and keep in force a policy of comprehensive
general liability insurance with bodily injury, death and property damage limits
of at least $2,000,000 per occurrence and $2,000,000 aggregate, including
product liability coverage. On execution of this Agreement, and on each
anniversary of same, each party shall furnish a certificate of insurance, in
form reasonably acceptable to the other party, evidencing such insurance and
providing for 30 days’ prior written notice to the other party of any
cancellation, nonrenewal or change of such insurance coverage.

16. CONFIDENTIALITY.

16.1   Confidential Information. The term “Confidential Information” means:
(a) the terms and conditions of this Agreement; and (b) a party’s information,
data, knowledge and know-how (in whatever form and however communicated)
relating directly or indirectly to the disclosing party (or to its Affiliates or
contractors), as to its or their respective businesses, employees, operations,
methods, processes, trade secrets, plans, properties, products, markets or
financial positions) that is delivered or disclosed by such party, its Affiliate
or any of their respective officers, directors, partners, members, employees,
contractors, agents or shareholders to the other party in writing,
electronically, orally or through visual means, or that such party learns or
obtains aurally, through observation or analyses, interpretations, compilations,
studies or evaluations of such information, data, knowledge or know-how, and
(c) any information that would be reasonably deemed to be confidential when
considering the nature of such information and the circumstances surrounding its
disclosure. Without limiting the foregoing, CytoCore acknowledges and agrees
that the proprietary information and technology comprising the components,
design and makeup of the Products are proprietary and trade secrets of QuantRx
and constitute Confidential Information. Without limiting the foregoing, QuantRx
acknowledges and agrees that all information submitted by CytoCore in support of
regulatory approvals, excluding such Data as are licensed hereunder, are the
Confidential Information of CytoCore. Each party will limit access to
Confidential Information to only those of its employees, agents and consultants
having a need-to-know in connection with this Agreement and will take reasonable
steps to ensure no unauthorized person has access to the Confidential
Information. Each party will advise in writing its employees, agents and
consultants to whom disclosure of Confidential Information is made

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  of the obligations under this Agreement to protect the Confidential
Information. Each party will be liable for the unauthorized disclosure of
Confidential Information by its employees, agents and consultants.

16.2   Loss of Status. Confidential Information shall not include information,
data, knowledge and know-how that, as shown by written records: (a) is known to
the receiving party prior to disclosure to or receipt by such party without
breach of an obligation of confidentiality; (b) is in the public domain prior to
disclosure to a party; (c) enters the public domain through no violation of this
Agreement after disclosure to such party; or (d) is independently developed by a
party without reliance in any way on Confidential Information.   16.3   Use and
Disclosure. Each party shall keep the Confidential Information communicated to
it by the other party confidential and shall not either itself use or disclose
such information or provisions to any third person without the prior written
approval of the other party in each instance, except that either party may
disclose such provisions to the extent required by law or other demand under
lawful process, provided the receiving party gives the disclosing party prompt
notice prior to such disclosure to allow the disclosing party to make a
reasonable effort to obtain a protective order or otherwise protect the
confidentiality of such information. Subject to the requirements of applicable
securities laws and regulations of applicable stock exchanges, neither CytoCore
nor QuantRx shall make any news releases or any other public disclosure with
respect to the transactions contemplated by this Agreement without the prior
written consent of the other party, which consent may be withheld by such other
party in its sole discretion; provided, however, that the foregoing shall not
prohibit the disclosure of this Agreement, subject to customary written
confidentiality restrictions, to persons with whom either party intends to enter
into a sale, merger, capital raising or other similar strategic transaction.

16.4   Injunction. Either party aggrieved by breach or threatened breach of this
Section 21 shall be entitled to bring an action to prevent, stop or otherwise
obtain redress, including specific performance, injunctive relief or other
available equitable remedy, without having to post bond or other undertaking
therefor, and without necessity of providing 60 days’ notice pursuant to
Section 17.3 above.

17. SUBCONTRACTING AND ASSIGNMENT.

17.1   Assignment. Except as provided in this Agreement, CytoCore may not assign
or transfer this Agreement or any rights or duties under it, voluntarily or by
operation of law, without the prior written consent of QuantRx. Any attempted
assignment or transfer not in compliance with this Agreement shall be void and
of no force or effect. A reorganization or merger with another corporation or
other person shall not itself, however, constitute a prohibited assignment.

17.2   Sale or Sale of Division. Notwithstanding Section 17.1 above, either
party hereto may sell and transfer its entire rights and obligations under this
Agreement to a third person at any time without prior written consent of the
other Party.

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17.3   Subcontracting. Either Party may subcontract its obligations hereunder
provided that each Party is responsible for the actions of its subcontractors.

18. NOTICES. Any notice, under this Agreement shall be in writing and be deemed
given upon written receipt of delivery, delivered via overnight courier in each
case addressed to the following addresses:

         
 
  If to QuantRx:   QuantRx Biomedical Corporation
 
      Attn: CFO
 
      100 South Main Street, Ste. 300
 
      Doylestown, PA 18901
 
      Fax (267) 880-1596
 
       
 
  If to CytoCore:   CytoCore, Inc.
 
      Attn: legal counsel
 
      414 North Orleans St., Ste. 510
 
      Chicago, IL 60610
 
      Fax (312) 222-9580

or to such other address as a party may provide by notice given in the same
manner.
19. MISCELLANEOUS.

19.1   Definition of Affiliate. The term “Affiliate” means any person controlled
by, under common control with or which controls a party to this Agreement,
control being defined as either having ownership of a majority of the equity of
such party generally eligible to elect a majority of the governing body of such
party, or the right by agreement or otherwise to direct the actions of such
party (including, without limitation as a general partner of a partnership or as
a managing member of a limited liability company).   19.2   Applicable Law. This
Agreement shall be governed by and construed in accordance with the laws and
decisions of the state of Deleware, without regard to the conflicts of law rules
of such state.   19.3   Mediation. In the event of a dispute between the
parties, which cannot be resolved in the course of ordinary business, either
party may submit a written request for a meeting of senior executives to resolve
such dispute. In the event that such a request is submitted, the receiving party
shall make a senior executive available to discuss the matter within 10 business
days. If the matter is not resolved by such meeting, either party may send a
written request that the dispute be submitted to mediation. Such request shall
include the names of at least three U.S. based mediators or mediation services,
each of which must have appropriate professional training and experience in
business mediation. The parties shall work in good faith to agree on a mediator
within five business days of receipt of the request, and the mediation shall be
scheduled as soon as reasonably practicable, but in any case within 30 days of
receipt of the request. The mediation shall occur in the principal office city
of the request recipient. All costs of mediation shall be borne equally by the
parties. In the event that a mutually agreeable resolution cannot be reached
through mediation, either party may proceed to use the courts or other legal
methods to achieve resolution. Nothing in this Section 19.3 shall be construed
as

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    preventing either party from using the courts directly and immediately for
injunctive relief pursuant to Section 16 in the event that imminent harm is
threatened, or as preventing either party from proceeding to litigation in the
event that mediation is unsuccessful.   19.4   Further Assurance. Each party
shall execute and deliver, at the request of the other party, such further
documents or instruments, and shall perform such further acts, that may be
reasonably required to fully accomplish the intent of this Agreement.   19.5  
Waiver of Breach. The waiver by either party of a breach of any term or
provision of this Agreement shall not be construed as a waiver of any subsequent
breach of the same or any other term or provision by either party.   19.6  
Modification. This Agreement may not be amended or modified except in a writing
executed by the parties.   19.7   Assignment. This Agreement shall be binding
upon and operate to the benefit of the parties and their successors and
permitted assigns.   19.8   Relationship of Parties. The relationship of the
parties under this Agreement is that of independent contractors. Nothing
contained in this Agreement is intended or is to be construed so as to
constitute the parties as partners or joint venturers, or either party as an
agent or employee of the other. Neither party has any express or implied right
under this Agreement to assume or create any obligation on behalf of or in the
name of the other, or to bind the other party to any contract, agreement or
undertaking with any third party, and no conduct of the parties shall be deemed
to infer such right.   19.9   Severability. If any provision of this Agreement
is finally held to be invalid, illegal or unenforceable by a court or agency of
competent jurisdiction, that provision shall be severed or shall be modified by
the parties so as to be legally enforceable (and to the extent modified, it
shall be modified so as to reflect, to the extent possible, the intent of the
parties), and the validity, legality and enforceability of the remaining
provisions shall not be affected or impaired in any way.   19.10  
Interpretation. Time is of the essence of this Agreement in all particulars. All
monetary figures are in U.S. Dollars. The term “days” means calendar days. As
the context may require in this Agreement, the use of any gender (male, female
or neuter) shall include any other gender, and the singular shall include the
plural and the plural the singular. The word “person” includes individual, joint
venture, partnership, limited liability company, corporation, association, trust
or any other entity or organization. The captions heading the sections and
subsections of this Agreement are inserted for convenience of reference only,
and are not to be used to define, limit or describe the scope or Intent of any
term, provision, section or subsection of this Agreement. Each Schedule
described in and attached to this Agreement is incorporated in it. This
Agreement may be executed in several counterparts, each of which shall be deemed
an original but all of which taken together shall constitute one and the same
instrument.   20.11   Integration. THIS AGREEMENT CONTAINS THE FINAL AND
CONCLUSIVE AGREEMENT AND UNDERSTANDING OF THE PARTIES WITH RESPECT TO

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THE SUBJECT MATTER OF IT, AND SUPERSEDES ALL PRIOR AND CONTEMPORANEOUS
AGREEMENTS, PROMISES, REPRESENTATIONS, AGREEMENTS OR UNDERSTANDINGS, ORAL OR
WRITTEN, BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT,
including without limitation any Heads of Agreement.
EXECUTED by the parties through their duly authorized representatives as of the
date first written above.

                      QUANTRX BIOMEDICAL CORPORATION       CYTOCORE, INC.    
 
                   
By
  /s/ William H. Fleming
 
      By   /s/ Robert F. McCullough Jr.
 
   
 
  William H. Fleming, Ph. D., CSO           Robert F. McCullough Jr., CEO      
 
  QUANTRX           5/14/08               CYTOCORE    

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Schedule A — DATA
Data includes all data from all clinical trials utilizing the Products and all
information pertaining to manufacturing and regulatory approvals as exists or
becomes available during this Agreement. Data also means that descriptive and
manufacturing information that is required for use in regulatory submissions.
Schedule A

 

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Schedule B — Products and Specifications
Schedule B of this Agreement comprises a Bill of Materials that defines a
composition of the Product that is intended for use in clinical trials in the
US. The Parties recognize that laws, regulations, customs and/or practices in
various countries may dictate or otherwise require that the labeling and/or
other aspects of the composition of Product for clinical trial use or commercial
sale differ from that specified in Schedule B. Therefore, from time to time
CytoCore may request and QuantRx may agree to produce a version of the Product
that conforms to the laws and regulations of a particular country or market.
Each such version shall be defined by a Bill of Materials and shall be assigned
a unique identification. Each such Bill of Materials agreed upon in writing by
the Parties shall be incorporated by reference into Schedule B of this
Agreement.
Initial Specifications:
          1. Outer carton (SKU), having the outside dimensions of: 5.5x7x2.5
inches
          2. Tyvek envelop, self sealing, having the outside dimensions of: 9x6
inches
          3. Sarstadt five (5) part biological mailing vial
          4. 19ml CytoLyt® per kit, dispensed into (3) vial
          5. Miniforms, untreated (2)
          6. Vinyl glove (1)
          7. Clinical study label for envelop (1) and SKU
          8. Single color Product Insert for Clinical (trial) use
NOTE: the above applies to Product for use in clinical trials and will be
revised to reflect the configuration of the commercial product upon receipt of
regulatory clearance.
NOTE: Multiple versions of the Product, each with a unique SKU, will be
required. A separate Bill of Materials (Specification) will be prepared for each
version. These versions will differ in terms of labeling and package inserts
based upon the laws and regulations of the intended destination country; whether
the Product is intended for use in a clinical trial; or whether the product is
intended for use as a professional sample.
Schedule B

 

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Schedule C
Purchase Prices: CytoCore will purchase each “PadKit®” at QuantRx’s direct cost
plus a 35% markup.
Price for each PadKit in CY2008 shall be US$5.00 each. To be revised based upon
year 1 order quantity
Schedule D