ANDA OWNERSHIP TRANSFER
AND PRODUCT LICENSE AGREEMENT
This license agreement (the "Agreement") dated as of May 17, 2006 (the
"Effective Date") is entered into by and between Nostrum Pharmaceuticals, Inc.
("Nostrum"), a Delaware corporation, and Synovics Laboratories, Inc. ("Synovics
Labs"), a Nevada corporation.
WHEREAS,
A. Nostrum has developed, and is in the process of developing, time
release and other technology for pharmaceutical products.
B. Synovics Labs is researching, developing, manufacturing, marketing
and selling pharmaceutical products.
C. Synovics Labs desires to license from Nostrum the exclusive right to
develop, manufacture, market and sell the Product (as hereinafter defined) in
the United States of America, and Nostrum desires to grant such license to
Synovics Labs, all on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, and the mutual
agreements hereinafter set forth, the parties hereby agree as follows:
ARTICLE 1 - DEFINITIONS
The capitalized terms set forth below (whether in the singular or
plural) shall have the meanings indicated for the purposes of this Agreement.
"Affiliate" means any Person which controls, is controlled by
or is under common control with Synovics Labs or Nostrum, as the case
may be. The term "control" means the ownership, directly or indirectly,
of more than fifty percent (50%) of the voting stock or equity interest
of the subject Person, or the right to receive over fifty percent (50%)
of the profits or earnings of such Person. Such other relationship as
in fact gives a Person the power or ability to control the management,
business and affairs of the subject Person shall also be deemed to
constitute control.
"Biobatch" means a batch suitable for use in the Pivotal
Study.
"cGMP" means current good manufacturing practices for the
methods to be used in, and the facilities and controls to be used for,
the manufacture, storage and handling of the Product, all as set forth
from time-to-time by the FDA pursuant to the federal Food, Drug and
Cosmetic Act and the rules and regulations
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promulgated thereunder (including specifically, Title 21, part 211 of
the Code of Federal Regulations of the United States).
"FDA" means the United States Food and Drug Administration or
any successor agency of the United States government.
"Future Strength" shall mean a to be determined additional
strength of extended release metformin formulation using the Nostrum
Technology that may be developed and filed as a separate ANDA in
Synovics' discretion.
"TRANSFERED FILING" shall mean Nostrum's ANDA No. 76-756 for
the Product and supplements thereto, including all pending or
in-process registrations issued by United States Food and Drug
Administration related to the Products.
"Litigation Expenses" shall mean out-of-pocket costs and
expenses incurred by Synovics Labs (i) connection with the defense of
any claim, suit or other legal action alleging that the Product being
marketed and sold by Synovics Labs hereunder infringes upon or
misappropriates a third party patent or other intellectual property
right or (ii) in connection with the resolution of any such claim, suit
or other legal action, including any judgment or award against Synovics
Labs or any of its Affiliates or subcontractors and any amounts paid in
settlement (including license fees and royalties).
"Nostrum Technology" means all of Nostrum's proprietary
information, know-how, materials and technology related to the Product
(including without limitation, manufacturing information) and any
related patent applications or patents owned or controlled by Nostrum
or its Affiliates to the extent they cover the Product and Future
Strength or any such information, know-how, materials or technology as
applied to the Product and Future Strength, including patent #
6,416,786.
"Net Sales" means, with respect to the Product for any period,
the amounts actually received by Synovics Labs or its Affiliates from
unaffiliated third parties (whether an end-user, a distributor or
otherwise) for the sale of Products in the Territory, and exclusive of
intercompany transfers or sales between and among Synovics Labs and its
Affiliates, less the following reasonable and customary deductions
(without duplication) from such gross amounts:
(i) normal and customary trade, cash and quantity
discounts, allowances and credits;
(ii) credits or allowances actually granted for damaged
goods, returns or rejections of Product and
retroactive price reductions;
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(iii) sales or similar taxes (including duties or other
governmental charges levied on, absorbed or otherwise
imposed on the sale of Product including, without
limitation, value added taxes or other governmental
charges otherwise measured by the billing amount,
when included in billing); and
(iv) all charge back payments, discounts and rebates
(whether mandated or otherwise) granted to managed
health care organizations or to federal, state and
local governments, their agencies, and purchasers and
reimbursers or to trade customers, including but not
limited to, wholesalers and chain and pharmacy buying
groups and charge back payments, discounts and
rebates (whether mandated or otherwise) charged by
national or local government; and
(v) commissions paid to third parties and sales agents
other than Synovics Labs sales personnel and sale
representatives.
(vi) freight, postage, shipping, customs duties and
insurance charges, when included in billing.
"Person" means any natural person, corporation, unincorporated
organization, partnership, association, joint stock company, joint
venture, limited liability company, trust or government, or any agency
or political subdivision of any government, or any other entity.
"Pivotal Study" means the pivotal pharmacokinetic
biostudy(ies) conducted by a fully licensed biostudy facility mutually
satisfactory to Synovics Labs and Nostrum which is reasonably expected
to demonstrate, to the satisfaction of the FDA, the intended AB rated
bioequivalence of the Product with the Reference Product sufficient to
enable Synovics Labs to submit to the FDA an acceptable Abbreviated New
Drug Application ("ANDA") for the manufacture and commercial sale of
the Product.
"Prestudy" means a pharmacokinetic biostudy which is intended
to indicate likelihood of demonstrating bioequivalence of the Product
with the Reference Product, typically carried out in a smaller number
of volunteers than those required by FDA for pivotal biostudies.
"Product" means the AB rated, generic 500mg equivalent
(Metformin ER Tablet) of the branded product Glucophage-XR,.
"ANDA" shall mean an abbreviated new drug application
submitted to the FDA covering the Product.
"Territory" means the United States of America and its
territories, possessions and commonwealths (including Puerto Rico).
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ARTICLE 2 - GRANT OF LICENSE
2.1 LICENSE GRANT. Nostrum hereby grants to Synovics Labs, and
Synovics Labs accepts, ownership of the Transfered Filing and an exclusive
license under the Nostrum Technology to develop, make, have made, use, import,
offer for sale, market and sell the Product and a Future Product in the
Territory.
2.2 RETAINED RIGHTS. Subject to the licenses granted to Synovics
Labs hereunder, Nostrum shall remain the sole owner of any Nostrum Technology
which Nostrum shall have furnished to Synovics Labs in connection with the
performance of Nostrum's obligations pursuant to this Agreement. Nostrum shall
retain all right, title and interest to use or license the Nostrum Technology in
connection with any product, formulation or process except the Product.
ARTICLE 3 - RESEARCH PROGRAM
3.1 NOSTRUM'S OBLIGATIONS.
(a) (i) As of the Effective Date, With respect to the
Future Strength, Nostrum has completed work necessary to develop a bioequivalent
Product (as compared to the Reference Product) suitable for use in the Pilot
Study, and to develop a reliable and efficient manufacturing process suitable
for producing commercial scale quantities of the Product meeting the applicable
specifications, necessary for filing an ANDA for the Product. Nostrum shall
provide to Synovics Labs access to all of the results of the Prestudies
completed by Nostrum with respect to the Product. Such access shall be during
normal business hours and shall include the right to make copies, at Synovics
Labs' expense, of all relevant records, data and results of the Prestudies. In
the event that any modifications or adjustments to the formulation of the
Product are necessary to achieve bioequivalence for the Product as compared to
the Reference Product, or to develop a commercially viable manufacturing
process, Nostrum shall use diligent efforts to complete such work and all
analysis and testing in connection therewith.
(ii) As of the Effective date, with respect to
the 500 mg strength, Nostrum has filed an ANDA - the Transfered Filing.
(b) Nostrum shall provide to Synovics Labs access to all
information and copies of all records relating to the Product, including without
limitation information relating to formulation development, manufacturing and
scale-up (including procedures and batch records), Product specifications,
stability testing, analytical procedures and methods, dissolution testing,
preclinical and clinical testing (including food effect studies) and all data
generated by Nostrum relating thereto. Such access shall be during normal
business hours and shall include the right to make copies, at Synovics Labs'
expense, of all such records.
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(c) Nostrum will cooperate with Synovics Labs in all
phases of the work to be performed under Section 3.2, including, without
limitation, the scale up, any Pivotal Study, process validation, any ANDA and
stability testing relating to the Product performed pursuant to this Agreement,
at any time. Until such time as Synovics Labs has received ANDA approval for the
Product in the Territory, Nostrum shall also make available to Synovics Labs the
Nostrum personnel directly involved with the Product to advise and consult with
regard to the development and manufacture of the Product. In addition, Nostrum
agrees that Nostrum's President, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, will be personally available
to consult and advise during all aspects of the development of the ANDA for the
Product. Synovics Labs shall reimburse Nostrum for its reasonable out-of-pocket
expenses incurred in performance of the obligations set forth in this Section
3.1(c).
(d) Nostrum shall use diligent efforts in the performance
of its obligations under this Section 3.1, as well as any other obligations to
be performed by Nostrum on Synovics Labs' behalf under this Article 3. Nostrum
shall use diligent efforts to comply with all applicable laws, rules and
regulations in the performance of such activities, including without limitation
good laboratory practices, good clinical practices and cGMPs, to the extent
applicable.
3.2 SYNOVICS LABS' OBLIGATIONS.
(a) With respect to the Future Strength and any
modifications of the formulation for both the strengths, Synovics Labs shall
promptly commence and diligently conduct all work preparatory to, and necessary
for, the performance of a Pivotal Study for the Product. Synovics Labs shall use
diligent efforts to complete such Pivotal Study as promptly as practicable.
Synovics Labs shall have the right, in its sole discretion, to contract with
Nostrum or use third party contractors to conduct the Pivotal Study under this
Section 3.2(a). Synovics Labs' obligation to conduct the Pivotal Study shall be
contingent upon successful manufacture and release of finished product for use
in the Pivotal Study.
(b) With respect to the Future Strength and any
modifications of the formulation for both the strengths, in the event that the
Pivotal Study demonstrates bioequivalence for the Product in accordance with FDA
regulations, Synovics Labs in cooperation with Nostrum shall promptly prepare,
submit and diligently prosecute an ANDA for such Product. Synovics Labs will
keep Nostrum fully informed with respect to such activities, and Nostrum shall
have the right to be present at all meetings with FDA regarding the Product, at
its own expense.
The ownership of Transfered Filing shall be transferred to and
in the name of Synovics Labs. Synovics Labs shall be responsible, at Synovics
Labs' expense, for conducting the post-clinical and stability testing of the
Product necessary for the approval thereof and for obtaining of all governmental
approvals for the manufacture and commercial sale of the Product in the
Territory. Synovics Labs shall use diligent efforts to cause such ANDA to be
approved. Synovics Labs will have full and complete ownership thereof.
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(c) Synovics Labs shall be responsible for all costs and
expenses incurred by it in connection with the performance of its obligations
under this Section 3.2.
3.3 DILIGENCE. Following Synovics Labs' receipt of FDA approval
with respect to the manufacture and commercial sale of the Product in the
Territory, Synovics Labs shall use diligent efforts to manufacture, market,
distribute and sell the Product in the Territory. Such diligent efforts shall be
commensurate with the efforts expended by Synovics Labs in the commercialization
of its other products of similar value, stage of development and commercial
potential.
3.4 EXCUSED PERFORMANCE. All of Synovics Labs' diligence
obligations with respect to the development and commercialization of the Product
under this Agreement are expressly conditioned upon the continuing absence of
any adverse condition or event relating to the safety or efficacy of the
Product, or lack of regulatory approval, which warrants a delay in
commercialization of the Product.
3.5 OWNERSHIP OF RESULTS. Subject to the provisions of Section
9.5, all data and results obtained or generated by or on behalf of either
Nostrum or Synovics Labs in performance of the Prestudy, the Pivotal Study or
other development activities related to the Product to be performed pursuant to
this Agreement (the "Results") shall be the sole and exclusive property of
Synovics Labs and shall be treated as Synovics Labs' Confidential Information
pursuant to Article 5 hereof. Nostrum undertakes to execute, without undue
delay, any and all documents deemed necessary to perfect this right, on an
as-needed, as-requested basis.
3.6 MANUFACTURE/SUPPLY. Synovics Labs shall have the right to
contract directly with a suitable third party to manufacture and supply Synovics
Labs' requirements for commercial supplies of the Product. Alternatively,
Synovics Labs may elect to have the Product manufactured and supplied by itself
or one of its Affiliates; provided that the cost of goods for Product
manufactured by Synovics Labs or such Affiliate is competitive with the cost of
goods for the Product as manufactured by a qualified third party manufacturer.
Upon request, Nostrum shall cooperate with Synovics Labs in transferring and
implementing the Nostrum Technology related to manufacture of the Product from
one site of manufacture for the Product to another in accordance with FDA
guidelines applicable to the proposed transfer. Synovics Labs shall reimburse
Nostrum within thirty (30) days of Synovics Labs' receipt of Nostrum's
invoice(s) for all reasonable out-of-pocket expenses which Nostrum may incur in
connection with the performance of its obligations pursuant to this Section 3.6.
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ARTICLE 4 - PAYMENTS
4.1 INITIAL PAYMENT. In partial consideration for the transfer of
ownership of the Transfered Filing and license granted to Synovics Labs
hereunder, Synovics Labs shall pay Nostrum One hundred and fifty thousand
dollars ($150,000) USD within fifteen (15) days of the Effective Date.
4.2 MILESTONE PAYMENTS. In further consideration for the license
granted to Synovics Labs hereunder, Synovics Labs hereby agrees to pay to
Nostrum One hundred and fifty thousand dollars ($150,000) USD upon the receipt
of approval for Transfered Filing by the FDA within thirty (30) days of
achieving the indicated milestone
4.3 ROYALTIES. Synovics Labs agrees to pay to Nostrum royalties on
Net Sales of Product in the Territory equal to Twenty Percent (20%) of Net sales
up to a maximum of One million five hundred thousand ($1,500,000).
4.4 MANNER OF PAYMENT. Within thirty (30) days after the first
commercial sale of the Product in the Territory by Synovics Labs, Synovics Labs
shall provide Nostrum with written notice to that effect. Thereafter, Synovics
Labs shall furnish to Nostrum within sixty (60) days following the close of each
calendar quarter, a written report for the calendar quarter showing the Net
Sales and Gross Profits from the sale of the Product sold by Synovics Labs and
its Affiliates in the Territory during such calendar quarter and the royalties
payable under this Agreement for such calendar quarter. Simultaneously with the
submission of such written report, Synovics Labs shall pay to Nostrum, for the
account of Synovics Labs or the applicable Affiliate, as the case may be, a sum
equal to the aggregate royalty due for such calendar quarter calculated in
accordance with this Agreement (reconciled for any previous overpayments or
underpayments). All payments to Nostrum hereunder shall be made by wire transfer
of immediately available funds to the account designated in writing by Nostrum.
4.5 RECORDKEEPING/AUDITS.
(a) Synovics Labs, and to the extent applicable its
Affiliates, shall keep complete and accurate records in sufficient detail to
enable the royalties payable hereunder to be determined. Upon the written
request of Nostrum and not more than twice in each calendar year, Synovics Labs,
and to the extent responsible for the manufacture of the Product its Affiliates,
shall permit an independent certified public accounting firm of nationally
recognized standing, which is bound by a confidentiality agreement in favor of
Synovics Labs to have access, at Nostrum's expense, during normal business hours
to such records of Synovics Labs and such Affiliates as may be reasonably
necessary to verify the accuracy of the royalty reports hereunder for any twelve
(12) month period(s). Nostrum shall provide such notice at least thirty (30)
days prior to the intended audit. Nostrum shall have no right to audit any such
records with respect to any twelve (12) month period which ended more than
ninety-six (96) months prior to the date of such request. The accounting firm
shall only disclose to Nostrum the relevant Net Sales, Gross Profits and cost of
goods sold information and whether the royalty reports are correct or incorrect
and the specific details concerning any discrepancies. No other information
shall be shared by the accounting firm with
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Nostrum. Nostrum's audit rights under this Section 4.5 shall survive the
expiration or termination of this Agreement for a period of one (1) year.
(b) The cost of each audit conducted under this Section
4.5 shall be borne by Nostrum unless such audit correctly determines that
Synovics Labs underpaid the royalties due to Nostrum hereunder by more than five
percent (5% ) in any five month period in which case, Synovics Labs shall pay to
Nostrum the deficiency (as Synovics Labs is required to do regardless of the
amount thereof or the results, requirement or pendency of any audit) within
fifteen (15) days of the date that a final audit report is issued, and shall
also bear the cost of such audit. In the event that such audit determines that
Synovics Labs overpaid the royalties due to Nostrum, Nostrum shall refund to
Synovics Labs the amount of such overpayment within fifteen (15) days of the
date that a final audit report is issued.
(c) Nostrum shall treat all financial information subject
to review under this Agreement in accordance with the confidentiality provisions
of this Agreement, and shall cause its accounting firm to enter into an
acceptable confidentiality agreement with Synovics Labs obligating it to retain
all such financial information in confidence pursuant to such confidentiality
agreement.
Section 4.6 WITHHOLDING. If at any time, any jurisdiction within the
Territory requires the withholding of income taxes or other taxes imposed upon
payments set forth in this Article 4, Synovics Labs shall make such withholding
payments as required and subtract such withholding payments from the payments
set forth in this Article 4 or if applicable, Nostrum will promptly reimburse
Synovics Labs or its designee(s) of the amount of such payments. Synovics Labs
shall provide Nostrum with documentation of such withholding and payment. Any
withholdings paid when due hereunder shall be for the account of Nostrum and
shall not be included in the calculation of Net Sales or Gross Profits, as
applicable. In addition, if any deficiency in the amount or failure to make any
such withholding payment is caused, in whole or in part, by any intentional or
negligent action or inaction on the part of Nostrum, Nostrum shall be liable for
any fine, assessment or penalty imposed by any taxing authority in the Territory
for such deficiency in the amount of any such withholding or such failure to
make such withholding payment. If Synovics Labs is required to pay any such
deficiency, or any fine, assessment or penalty for any such deficiency, Nostrum
shall promptly reimburse Synovics Labs for any such payments for which Nostrum
is liable in accordance with this Section 4.6, which reimbursement shall not be
included in the calculation of Net Sales or Gross Profits.
ARTICLE 5. CONFIDENTIALITY.
5.1 CONFIDENTIALITY. During the term of this Agreement and for a
period of ten (10) years after its expiration or termination, each party shall
maintain as confidential the Nostrum Technology, any know-how relating to the
Product, the Results and any other proprietary, technical or business
information received from the other party pursuant to this Agreement
("Confidential Information") and shall only use such Confidential
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Information in furtherance of this Agreement. Both parties agree that any
employees provided or given access to the other party's Confidential Information
shall be bound by confidentiality obligations essentially the same as those set
forth herein. The foregoing obligations of confidentiality and use restrictions
shall not apply, however, to the extent that such Confidential Information:
(i) was known to the receiving party, as evidenced by its written
records, prior to receipt from the other party;
(ii) is in the public domain at time of receipt or subsequently
enters the public domain through no breach of this Agreement
by the receiving party;
(iii) after the date of receipt from the disclosing party, is
received without secrecy obligations from a third party with a
bona fide right to disclose it without violating any right of
the disclosing party;
(iv) is independently developed by the receiving party without the
aid, application or use of any of the disclosing party's
Confidential Information (and such independent development can
be properly documented by the receiving party);
(v) is disclosed to governmental or other regulatory agencies in
order to obtain patents or to gain approval to conduct
clinical trials or to market the Product pursuant to this
Agreement, but such disclosure may be only to the extent
reasonably necessary to obtain such patents or authorizations;
(vi) is necessary to be disclosed to agents, consultants,
Affiliates and/or other third parties for the developing,
making, using, selling or importing of Product (or for such
third parties to determine their interest in performing such
activities) in accordance with this Agreement on the condition
that such third parties agree to be bound by confidentiality
obligations and use restrictions at least as restrictive as
those contained in this Agreement; or
(vii) is required to be disclosed by law or court order, provided
that notice is promptly delivered to the disclosing party in
order to provide the disclosing party sufficient opportunity
to seek a protective order or other similar order with respect
to such Confidential Information and the receiving party
thereafter discloses only the minimum information required to
be disclosed in order to comply with the request, whether or
not a protective order or other similar order is obtained by
the disclosing party.
5.2 NO PUBLICITY; DISCLOSURE OF AGREEMENT TERMS. Neither party may
use the name of the other party or its Affiliates in any publicity or
advertising without the prior written permission of such party. Notwithstanding
the provisions of Section 5.1 and this Section 5.2, either party may disclose
the terms
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of this Agreement to the extent necessary to (a) actual or potential lenders or
investors; (b) the party's agents, consultants, Affiliates and/or other third
parties necessary to facilitate such a loan or investment; or (c) the party's
accountants, consultants and attorneys, for other corporate transactions and
business, on a need to know basis.
ARTICLE 6 - PATENTS
6.1 INFRINGEMENT AND THIRD PARTY LICENSES.
(a) In the event that Synovics Labs', or its Affiliates'
making, having made, using, offering for sale, selling or importing the Product
infringes or misappropriates, will infringe or misappropriate or is alleged by a
third party to infringe or misappropriate a third party's patents or other
intellectual property rights, the party hereto becoming aware of same shall
promptly notify the other. The parties shall thereafter attempt to agree upon a
course of action with respect thereto.
(b) Synovics Labs shall be responsible, at Synovics Labs'
expense, for the defense of any claims, demands, actions or proceedings arising
from allegations that development, making, having made, using, offering for
sale, selling or importing the Product infringes or misappropriates or will
infringe or misappropriate a third party's patents or other intellectual
property rights. Upon Synovics Labs' request and expense, Nostrum shall
cooperate with Synovics Labs in such defense; provided that Synovics Labs shall
promptly reimburse Nostrum for reasonable out-of-pocket costs and expenses
incurred by Nostrum in providing such cooperation.
6.2 INFRINGEMENT OF NOSTRUM'S INTELLECTUAL PROPERTY RIGHTS BY A
THIRD PARTY. Synovics Labs and Nostrum shall promptly notify each other of any
infringement of the patent rights included in the Nostrum Technology as applied
to the Product, and/or any misappropriation or unauthorized use of any of the
Nostrum Technology as applied to the Product, in the Territory which may come to
their attention. The parties shall thereafter attempt to agree upon a course of
action with respect thereto. If Nostrum declines to participate in the
prosecution of legal proceedings to prevent such infringement, misappropriation
or misuse of the Nostrum Technology, Synovics Labs may do so at its own expense
using counsel of its choice.
ARTICLE 7 - REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS AND WARRANTIES BY BOTH PARTIES. Each of
Synovics Labs and Nostrum hereby represents and warrants to the other party
that:
(i) it is a corporation duly organized and validly existing under
the laws of the state or other jurisdiction of incorporation
or formation;
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(ii) the execution, delivery and performance of this Agreement by
such party has been duly authorized by all requisite corporate
action;
(iii) it has all requisite power and authority to execute and
deliver this Agreement and to perform its obligations
hereunder;
(iv) the execution, delivery and performance by such party of this
Agreement and its compliance with the terms and provisions
hereof does not and will not conflict with or result in a
breach of any of the terms and provisions of or constitute a
default under (i) a loan agreement, guaranty, financing
agreement, agreement affecting a product or other agreement or
instrument binding or affecting it or its property; (ii) the
provisions of its charter documents or bylaws; or (iii) any
order, writ, injunction or decree of any court or governmental
authority entered against it or by which any of its property
is bound;
(v) except for the governmental and regulatory approvals required
to market the Product in the Territory, the execution,
delivery and performance of this Agreement by such party does
not require the consent, approval or authorization of, or
notice, declaration, filing or registration with, any
governmental or regulatory authority and the execution,
delivery or performance of this Agreement will not violate any
law, rule or regulation applicable to such party;
(vi) this Agreement constitutes such party's legal, valid and
binding obligation enforceable against it in accordance with
its terms subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and
to the availability of particular remedies under general
equity principles; and
(vii) it shall comply with all applicable material laws, rules and
regulations relating to the performance of its obligations
relating to the Product under this Agreement.
7.2 REPRESENTATIONS AND WARRANTIES BY NOSTRUM. Nostrum hereby
represents and warrants to Synovics Labs that:
(i) it owns all right, title and interest in and to the Nostrum
Technology as applied to the Product, free and clear of all
liens, charges, encumbrances and to Nostrum's actual
knowledge, other adverse claims;
(ii) to Nostrum's actual knowledge as of the Effective Date, (1)
the Nostrum Technology as applied to the Product and Future
Product does not, and (2) the use of the Nostrum Technology as
applied to the Product and Future Product, will not, infringe
on or misappropriation the existing intellectual property
rights of any other party;
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(iii) there are no adverse actions, suits or claims pending against
Nostrum or any of its Affiliates in or before any court or
governmental or regulatory authority with respect to the
Product and/or the Nostrum Technology as applied to the
Product, and no such actions, suits or claims have been
threatened against Nostrum or any of its Affiliates;
(iv) to the best of Nostrum's knowledge, all data summaries
provided in writing to Synovics Labs by Nostrum relating to
the Pre-study accurately represent the raw data underlying
such summaries;
(v) as of the Effective Date, to the best of Nostrum's knowledge,
there is no reason (e.g., debarment under the Federal Food,
Drug, and Cosmetic Act) that would prevent Synovics Labs from
using data and information supplied by Nostrum, as part of
Synovics Labs' regulatory submissions for the Product.
7.3 CONTINUING REPRESENTATIONS. The representations and warranties
of each party contained in Sections 7.1 and 7.2 shall survive the execution of
this Agreement.
7.4 NO INCONSISTENT AGREEMENTS. As of the Effective Date, neither
Party has entered into, and during the term of this Agreement, neither party
shall enter into, any oral or written agreement or arrangement that would be
inconsistent with its obligations under this Agreement.
7.5 NO WARRANTY AS TO REGULATORY APPROVAL. Nothing herein shall be
construed as a representation or warranty by either party that the applicable
health regulatory authorities within the Territory will consider the Product to
be safe and effective, or will grant regulatory approval to market and sell the
Product in the Territory even if any additional studies are conducted by or on
behalf of Synovics Labs or its Affiliates.
ARTICLE 8 - INDEMNIFICATION
8.1 INDEMNIFICATION BY NOSTRUM. Nostrum shall, at its sole cost
and expense, defend, indemnify and hold harmless Synovics Labs and its
Affiliate(s), and their respective officers, directors, agents and employees
from and against all claims, liens, demands, damages, liability, actions, causes
of action, losses, judgments, amounts paid in settlement, costs and expenses
(including, without limitation, reasonable attorneys' fees) (collectively
"Claim(s)") to the extent such Claims arise out of or in connection with, result
from, or are caused by: (i) any breach by Nostrum of its representations or
warranties contained in Sections 7.1 or 7.2 of this Agreement; or (ii) the gross
negligence or willful misconduct of Nostrum in the performance of its
obligations under this Agreement; PROVIDED, HOWEVER, that Nostrum shall have no
liability or indemnification obligations hereunder to the extent any such Claim
is caused by the gross negligence or
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willful misconduct of Synovics Labs, its Affiliates or their respective
officers, directors, agents and employees.
8.2 INDEMNIFICATION BY SYNOVICS LABS. Synovics Labs shall, at its
sole cost and expense, defend, indemnify and hold harmless Nostrum and its
Affiliate(s), and their respective officers, directors, agents and employees
from and against all Claims to the extent such Claims arise out of or in
connection with, result from, or are caused by: (i) any breach by Synovics Labs
of its representations or warranties contained in Section 7.1 of this Agreement;
(ii) the gross negligence or willful misconduct of Synovics Labs or its
Affiliates in the performance of its or their obligations under this Agreement;
(iii) the marketing, manufacture, use or sale of the Product in the Territory by
or on behalf of Synovics Labs or its Affiliates; or (iv) allegations that the
manufacture, use or sale of the Product in the Territory by or on behalf of
Synovics Labs or its Affiliates infringes third party patents or misappropriates
the other intellectual property rights of any third party; PROVIDED, HOWEVER,
that Synovics Labs shall have no liability or indemnification obligations
hereunder to the extent any such Claim is caused by the gross negligence or
willful misconduct of Nostrum, its Affiliates or their respective officers,
directors, agents and employees.
8.3 CONDITIONS TO INDEMNIFICATION. The obligations of the
indemnifying party under Articles 8.1 and 8.2 are conditioned upon the delivery
of written notice to the indemnifying party of any potential Claim promptly
after the indemnified party becomes aware of such potential Claim. The foregoing
notwithstanding, the parties acknowledge and agree that failure of the
indemnified party to promptly notify the indemnifying party of a potential Claim
shall not constitute a waiver of, or result in the loss of, such party's right
to indemnification under Articles 8.1 or 8.2, as appropriate, except to the
extent that the indemnifying party's rights, and/or its ability to defend
against such liability are materially prejudiced by such failure to notify. The
indemnifying party is hereby authorized to carry out the sole management and
defense of such potential Claim, and shall have the right to assume the defense
of any suit or claim related to the Claim if it has assumed responsibility for
the Claim in writing. However, if in the reasonable judgment of the indemnified
party, such Claim involves an issue or matter which could have a materially
adverse effect on the business operations or assets of the indemnified party,
the indemnified party may waive its rights to indemnity under this Agreement and
control the defense or settlement thereof. If the indemnifying party defends the
suit or claim, the indemnified party may participate in (but not control) the
defense thereof at its sole cost and expense.
8.4 SETTLEMENTS. Neither party may settle a claim or action
related to a Claim without the consent of the other party, if such settlement
would impose any monetary obligation on the other party or require the other
party to submit to an injunction or otherwise limit the other party's rights
under this Agreement. Any payment made by a party to settle any such claim or
action shall be at its own cost and expense.
8.5 LIMITATION OF LIABILITY. With respect to any claim by one
party against the other arising out of the performance or failure of performance
of the other party under
13
this Agreement, the parties expressly agree that the liability of such party to
the other party for such breach shall be limited under this Agreement or
otherwise at law or equity to compensatory damages only and in no event shall a
party be liable for punitive or exemplary damages. The foregoing limitation will
not prevent a party entitled to indemnification pursuant to this Agreement from
recovering all components of any judgment or award against such a party by an
unaffiliated party.
8.6 INSURANCE. During the term of this Agreement Synovics Labs
shall maintain adequate insurance and/or a self-insurance program for liability
insurance, including products liability insurance, adequately covering Synovics
Labs' obligations under this Agreement. Synovics Labs shall provide Nostrum with
evidence of such insurance and/or self-insurance upon request.
ARTICLE 9 - TERM AND TERMINATION
9.1 TERM AND EXPIRATION. This Agreement shall be effective as of
the Effective Date and unless terminated earlier pursuant to this Article 9
shall continue in effect for the longer of a period of ten (10) years from the
first commercial sale of the Product by or on behalf of Synovics Labs in the
Territory, or until such time as the commercial sale of the Product by or on
behalf of Synovics Labs in the Territory is discontinued.
9.2 RIGHTS OF SYNOVICS LABS TO TERMINATE.
a) With respect to the Future Product, in the event that (i) Synovics Labs
determines that the results of the Pivotal Study do not adequately
demonstrate bioequivalence of the Future Strength with the Reference
Product, or (ii) Synovics Labs fails to obtain FDA approval to market
and sell the Product in the Territory, then Synovics Labs shall have
the right to terminate this Agreement by notifying Nostrum in writing
to that effect.
b) With respect to the Product, Synovics Labs shall have the option to
terminate this Agreement in the event that Synovics Labs determines,
based on the actual results of manufacturing, distribution and sale of
the Product, that the profitability or market size of the Product does
not equal or exceed the profitability or market size, as applicable, of
other Synovics Labs products of similar market size and cost structure.
9.3 TERMINATION FOR CAUSE. Either party shall have the right to
terminate this Agreement upon sixty (60) days written notice in the event the
other party is in breach of one or more of its material obligations under this
Agreement; provided that the breaching party shall have the opportunity to cure
any alleged breach during such sixty (60) day period. To assist with the
interpretation of this Agreement, the parties agree that: a breach by Synovics
Labs of the provisions of any of Sections 3.1(c), 3.2(a), 3.2(b), 3.2(c),
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3.3, 4.1, 4.2, 4.3 and 4.5 shall be a material breach; and a breach by Nostrum
of the provisions of any of Sections 3.1(a), 3.1(b), 3.1(c) and 3.1(d) shall be
a material breach. For avoidance of doubt, the provisions listed in this Section
9.3 do not constitute an exhaustive list of those provisions the breach of which
may be material.
9.4 BANKRUPTCY OR INSOLVENCY. Either party shall be entitled to
immediately terminate this Agreement upon the filing or institution of
bankruptcy, reorganization (in connection with any insolvency), liquidation or
receivership proceedings, or upon an assignment of a substantial portion of the
assets for the benefit of creditors by the other party, or in the event a
receiver or custodian is appointed for such other party's business, or if a
substantial portion of such other party's business is subject to attachment or
similar process; PROVIDED, HOWEVER, that in the case of any involuntary
bankruptcy proceeding or the attachment of a substantial portion of a party's
assets such right to terminate shall only become effective if the proceeding or
attachment is not dismissed within sixty (60) days after the filing thereof.
9.5 EFFECT OF TERMINATION. In the event that this Agreement is
terminated, the license granted to Synovics Labs under Section 2.1 shall
terminate, Synovics Labs shall transfer to Nostrum all of the formulations,
processes and other technology, approvals, applications and records related to
the development and commercialization of the Product, and Nostrum shall
thereafter have the right to develop, manufacture and otherwise commercialize
the Product in the Territory, together with all other countries and their
territories, possessions and commonwealths.
9.6 SURVIVING TERMS. The provisions of Section 9.5, and of
Articles 5, 8 and 11, Nostrum's audit rights under Section 4.5, and such other
provisions of this Agreement which by their expressed terms are to be performed
or complied with subsequent to the termination or expiration of this Agreement,
shall survive such termination or expiration and shall continue in full force
and effect in accordance with their respective terms.
ARTICLE 10. FORCE MAJEURE
(a) No failure or omission by the parties in the
performance of any obligation according to this Agreement shall be deemed a
breach of this Agreement or create any liability if the same shall arise from
any cause or causes beyond the control of the party, including, but not limited
to, strikes, riots, war, acts of God, invasion, fire, explosion, floods, delay
of carrier, energy shortages and acts of government or governmental agencies or
instrumentalities.
(b) In the event that due to force majeure either party
hereto shall be delayed or hindered in or prevented from the performance of its
duties or doing acts required under the terms of this Agreement, the performance
of such act, except for the obligation to pay amounts due under this Agreement,
shall be excused for the period of delay. Notwithstanding the aforementioned,
the party subject to force majeure shall promptly take all reasonable steps to
resolve the condition(s) forming the basis of force
15
majeure; provided, however, that nothing contained herein shall require any
party to settle on terms unsatisfactory to such party any strike, lock-out or
other labor difficulty, any investigation or proceeding by any public authority,
or any litigation by any third party. If a condition constituting force majeure
as defined herein exists for more than ninety (90) consecutive days, the parties
shall meet to negotiate a mutually satisfactory resolution to the problem, if
practicable.
ARTICLE 11 - MISCELLANEOUS
11.1 ASSIGNMENT. (a) Neither this Agreement nor any or all of the
rights and obligations of a party hereunder shall be assigned, delegated, sold,
transferred, sublicensed (except as otherwise provided herein) or otherwise
disposed of, by operation of law or otherwise, to any third party without the
prior written consent of the other party. Any attempted assignment, delegation,
sale, transfer, sublicense or other disposition, by operation of law or
otherwise, of this Agreement or of any rights or obligations hereunder contrary
to this Article 11.1 shall be a material breach of this Agreement by the
attempting party, and shall be void and without force or effect. Notwithstanding
the foregoing, either party may, without the consent of the other party, assign
the Agreement and its rights and obligations hereunder (i) to an Affiliate; (ii)
in connection with the transfer or sale of all or substantially all of its
assets related to the subject division or the subject business; or (iii) in the
event of its merger or consolidation.
(b) Any assignment, sublicense or other transfer by
either party permitted by this Section 11.1 shall not operate to release such
party from its responsibilities under this Agreement.
11.2 NO WAIVER. No failure by a party to exercise any rights
hereunder in the event of a breach or violation hereof by the other party shall
constitute a waiver of any such rights. No waiver by any party of any breach or
violation hereof by the other party, shall constitute a waiver of any rights in
respect of any other or subsequent breach or violation.
11.3 NOTICES. All notices required to be given under this Agreement
shall be in writing and given by personal delivery, facsimile transmission,
nationally recognized overnight courier (prepaid) or registered or certified
mail, postage prepaid with return receipt requested. Notices shall be addressed:
if to Nostrum, at
▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇, Ph.D.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
16
if to Synovics Labs, at
Synovics Laboratories, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
A party may change its address by written notice in accordance with this Section
11.3
11.4 GOVERNING LAW/DISPUTES. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
regard to the conflict of laws provisions thereof. In the event of any dispute
hereunder or otherwise arising out of or relating to this Agreement, the parties
hereto agree that such dispute will be resolved only by arbitration in
accordance with the terms set forth in Article 12, attached hereto.
11.5 INDEPENDENT CONTRACTOR. The parties shall be considered
independent contractors, and neither the making of this Agreement nor the
performance of any of the provisions hereof shall be construed to make either
party an agent, employee or legal representative of the other, nor shall this
Agreement be deemed to establish a joint venture or partnership.
11.6 SEVERABILITY. Should any section, or portion thereof, of this
Agreement be held invalid by reason of any law, statute or regulation existing
now or in the future in any jurisdiction by any court of competent authority or
by a legally enforceable directive of any governmental body, then such section
or portion thereof shall be validly reformed so as to approximate the intent of
the parties as nearly as possible and, if unreformable, shall be deemed
divisible and deleted with respect to such jurisdiction and this Agreement shall
not otherwise be affected.
11.7 EFFECT OF ASSIGNMENT. This Agreement shall be binding upon,
and inure to the benefit of, each party and its permitted successors and
permitted assigns. Each party shall be responsible for the compliance by any of
its permitted assignees with the terms and conditions of this Agreement.
11.8 RECORDING. Each party shall have the right, at any time, to
record, register, or otherwise notify this Agreement in appropriate governmental
or regulatory offices anywhere in the Territory, and Nostrum or Synovics Labs,
as the case may be, shall provide reasonable assistance to the other in
effecting such recording, registering or notifying.
17
11.9 FURTHER ACTIONS. Each party agrees to execute, acknowledge and
deliver such further instruments and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
11.10 COUNTERPARTS. This Agreement shall become binding when any one
or more counterparts hereof, individually or taken together, shall bear the
signatures of each of the parties hereto and is delivered to the other party in
accordance with Section 11.3. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against either party whose
signature appears thereon, but all of which taken together shall constitute but
one and the same instrument.
11.11 ENTIRE AGREEMENT. This Agreement, together with the attached
schedule, represents the entire agreement between the parties with respect to
the subject matter hereof and supersedes and replaces all prior agreements and
understandings, whether written or oral. No terms or provisions of this
Agreement shall be varied or modified and no subsequent alteration, amendment,
change or addition to this Agreement shall be binding upon the parties unless
reduced to writing and signed by an authorized officer of each party.
ARTICLE 12
DISPUTE RESOLUTION PROCEDURES
12.1 Except as otherwise set forth in the Agreement, any dispute,
controversy or claim arising out of or relating to the validity, construction,
enforceability or performance of this Agreement, including disputes relating to
an alleged breach or termination of this Agreement, shall be settled by binding
arbitration in the manner set forth below in this Article 12; provided, however,
that the neutral referred to below shall give effect to the provisions of this
Agreement and shall not adjust, modify or change the effects of termination as
set forth in Article 9 of this Agreement Notwithstanding the foregoing, in the
event of a claim, action, suit or proceeding against or involving any party
entitled to indemnification pursuant to this Agreement brought or asserted by a
third party that is not affiliated with either party to this Agreement, then the
entitled to the indemnification will have the option to include the indemnifying
party to such claim, action suit or proceeding notwithstanding the provisions of
this Article 12.
12.2 If a party intends to begin an arbitration to resolve a
dispute, such party shall provide written notice (the "Request") by certified or
registered mail or properly documented overnight delivery to the other party
informing such other party of such intention and the issues to be resolved. The
notice shall explain the nature of the complaint and refer to any relevant
Articles of the Agreement upon which the complaint is based. The complaining
party shall also set forth a proposed solution to the problem, including a
suggested time frame within which the parties must act.
12.3 The non-complaining party must respond in writing within
thirty (30) calendar days of receiving notice with an explanation, including
references to the relevant
18
provisions of the Agreement and a response to the proposed solution and
suggested time frame for action. The non-complaining party may add additional
issues to be resolved.
12.4 Within ten (10) business days of receipt of the response from
the non-complaining party, the parties shall meet and discuss options for
resolving the dispute. Each party shall make available all appropriate personnel
to meet and confer with the other party within the ten (10) business day period
following the complaining party's receipt of the response by the non-complaining
party.
12.5 Any and all disputes that cannot be resolved pursuant to
Paragraphs (b), (c) and (d) above shall be submitted to an arbitrator selected
by mutual agreement of the parties. If the parties are unable to agree upon an
arbitrator, then the arbitrator shall be selected in accordance with the
procedures of the American Arbitration Association. The arbitrator shall be an
individual who shall preside over and resolve any disputes between the parties.
The arbitrator selected shall be a former judge of a state or federal court and
shall not be an employee, director or shareholder of, or otherwise have any
current or previous relationship with, either party or its respective
Affiliates. The arbitration shall be conducted in accordance with the commercial
arbitration rules of the American Arbitration Association then in effect,
subject to the time periods and other provisions of this Article 12 or as
otherwise set forth in the Agreement.
12.6 Consistent with the time schedule established pursuant to
Paragraphs (g) and (h) below, the arbitrator shall hold a hearing to resolve
each of the issues identified by the parties and shall render a decision as
expeditiously as possible but in no event more than thirty (30) calendar days
after the close of hearings. In rendering the decision the arbitrator shall rule
on each disputed issue and shall adopt in whole or in part the proposed ruling
of one of the parties on each disputed issue.
12.7 During the meeting referred to in Paragraph (d) above, the
parties shall negotiate in good faith the scope and schedule of discovery,
relating to depositions, document production and other discovery devices, taking
into account the nature of the dispute submitted for resolution. If the parties
are unable to reach agreement as to the scope and schedule of discovery, the
arbitrator may order such discovery as the arbitrator deems necessary. To the
extent practicable taking into account the nature of the dispute submitted for
resolution, such discovery shall be completed within sixty (60) calendar days
from the date of the selection of the arbitrator. At the hearing, which shall
commence within twenty (20) business days after completion of discovery unless
the arbitrator otherwise orders, the parties may present testimony (either live
witness or deposition), subject to cross-examination, and documentary evidence.
To the extent practicable taking into account the nature of the dispute
submitted for resolution and the availability of the arbitrator, the hearing
shall be conducted over a period not to exceed thirty (30) consecutive business
days, with each party entitled to approximately half of the allotted time unless
otherwise ordered by the arbitrator. The hearing shall be held in New York, New
York at such place as may be agreed upon by the parties. The arbitrator shall
have sole discretion with regard to the admissibility of any evidence and all
other matters relating to the conduct of the hearing. The arbitrator shall, in
rendering its
19
decision, apply the substantive laws of the State of New York (regardless of its
or any other jurisdiction's choice of law principles). The decision of the
arbitrator shall be final and not appealable, except in the case of fraud or bad
faith on the part of the arbitrator or any party to the arbitration proceeding
in connection with the conduct of such proceedings; manifest disregard of the
law by the arbitrator concerning a material issue in rendering the decision or
upon any other ground for vacating or modifying the decision pursuant to the
Federal Arbitration Act, as amended..
12.8 At least ten (10) business days prior to the date set for the
hearing, each party shall submit to each other party and the arbitrator a list
of all documents on which such party intends to rely in any oral or written
presentation to the arbitrator and a list of all witnesses, if any, such party
intends to call at such hearing and a brief summary of each witness' testimony.
At least five (5) business days prior to the hearing, each party must submit to
the arbitrator and serve on each other party a proposed findings of fact and
conclusions of law on each issue to be resolved. Following the close of
hearings, the parties shall each submit such post-hearing briefs to the
arbitrator addressing the evidence and issues to be resolved as may be required
or permitted by the arbitrator.
12.9 Except as otherwise set forth herein, the arbitrator shall
determine the proportion in which the parties shall pay the costs and fees of
the arbitration, and each party shall pay its own costs (including, without
limitation, reasonable attorneys' fees) and expenses in connection with such
arbitration; provided, however, that if the arbitrator determines that the
action of any party was arbitrary, frivolous or in bad faith, the arbitrator may
award such costs and expenses to the prevailing party.
12.10 The arbitration proceeding shall be confidential and, except
as required by law, neither party shall make (or instruct the arbitrator to
make) any public announcement with respect to the proceedings or decision of the
arbitrator without the prior written consent of the other party. The existence
of any dispute submitted for arbitration, and the award of the arbitrator, shall
be kept in confidence by the parties and the arbitrator, except as required in
connection with the enforcement of such award or as otherwise required by
applicable law.
12.11 Judgment upon any award rendered by the Arbitrator may be
entered in any court having jurisdiction thereof.
12.12 Nothing contained herein shall be construed to permit the
arbitrator or any court or any other forum to award punitive, exemplary or any
similar damages. By entering into this Agreement to arbitrate, the parties
expressly waive any claim for punitive, exemplary or any similar damages. The
only damages recoverable under this Agreement are compensatory damages. The
foregoing limitation will not prevent a party entitled to indemnification
pursuant to this Agreement from recovering all components or any judgment or
award against such party by an unaffiliated third party.
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12.13 The procedures specified in this Article 12 shall be the sole
and exclusive procedures for the resolution of disputes between the parties
which are expressly identified for resolution in accordance with this Article
12.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
NOSTRUM PHARMACEUTICALS, INC. SYNOVICS LABORATORIES, INC.
By: By:
------------------------------ ------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇, Ph.D. Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Lane. Ph.D.
Title: President Title: President
21