EXHIBIT 10.1
CONFIDENTIAL TREATMENT REQUEST
[ * ] INDICATES INFORMATION THAT HAS BEEN OMITTED PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST AND THIS INFORMATION
HAS BEEN FILED UNDER SEPARATE COVER WITH THE COMMISSION
LICENSE AND SUPPLY AGREEMENT
THIS LICENSE AND SUPPLY AGREEMENT (the "AGREEMENT") is entered into as
of this 11th day of April, 2007, (the "EFFECTIVE DATE") by FLUID AIR INC. DOING
BUSINESS AS PHARMPRO. a corporation pursuant to the laws of the State of
Illinois, with its principal office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ (hereinafter referred to as "FAI") and SYNOVICS LABORATORIES INC., a
corporation pursuant to the laws of the State of Nevada, with its principal
office at Suite ▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ (hereinafter
referred to as "SYNOVICS"). FAI and SYNOVICS are referred to herein individually
as a "PARTY" and collectively as the "PARTIES."
WHEREAS, FAI is in the business of manufacturing and developing generic
product and owns intellectual property rights related to the manufacture of this
Product (as defined below);
WHEREAS, SYNOVICS has expertise in the marketing of generic and
over-the-counter pharmaceutical products; and
WHEREAS, SYNOVICS desires to contract with FAI to develop and
manufacture a generic version of Omeprazole with a novel manufacturing method
developed by FAI for marketing worldwide by SYNOVICS and FAI is willing to grant
such rights subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, covenants and conditions set forth below, the Parties,
intending to be legally bound, hereby agree as follows:
1. DEFINITIONS.
1.1 "ACCEPTABLE COMPOUND" has the meaning set forth in SECTION
7.5(a) hereof.
1.2 "AFFILIATE" means: (a) any entity that owns, directly or
indirectly, a controlling interest in a Party, by stock ownership or otherwise;
(b) any entity in which a Party owns a controlling interest, by stock ownership
or otherwise; or (c) any entity, under direct or indirect common control of a
Party. For purposes of this paragraph, "controlling interest" and "control" mean
ownership of fifty percent (50%) or more of the voting stock permitted to vote
for the election of the Board of Directors or any other arrangement resulting in
control or the right to control the management and the affairs of the Party.
1.3 "ANDA" means an abbreviated new drug application or any
equivalent of the foregoing, filed with the FDA and necessary for beginning the
bioequivalence review trials for the use of Products in humans or any equivalent
or similar application filed with the Regulatory Authorities of a country other
than the United States prior to beginning
bioequivalence review trials of the Products in humans in that country.
1.4 "CALENDAR QUARTER" means the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30 or
December 31, for so long as this Agreement is in effect.
1.5 "CERTIFICATE OF ANALYSIS" means the certificate for each batch
of a particular Product delivered hereunder, in the form contemplated by SECTION
7.4(c).
1.6 "CHANGE OF CONTROL" means a corporate transaction involving
the sale of all or substantially all the assets of FAI, or a merger or
acquisition involving a Third Party, such that the stockholders of FAI
immediately prior to the transaction hold less than fifty percent (50%) of FAI's
or the other surviving entity's outstanding voting securities or capital stock
immediately following the closing of the transaction.
1.7 "CMC" means that portion of the ANDA application responsible
for the chemistry, manufacturing and controls review required for Regulatory
Approval.
1.8 "COMMERCIALLY REASONABLE EFFORTS" means those efforts and
resources that would reasonably be used by a company in the industry to develop
and/or commercialize a Product having similar market potential (E.G., market
size) and at a similar stage in its product life (E.G., stage of development or
number of years post-launch), taking into account the competitiveness of the
marketplace, the proprietary position of the compound or product, the regulatory
structure involved, and the profitability of the applicable products, and other
relevant factors affecting such profitability.
1.9 "COMMERCIAL MANUFACTURING QUALITY AGREEMENT" means a checklist
of activities and responsibilities attached as Exhibit "C" and made part of this
LICENSE AND SUPPLY AGREEMENT.
1.10 "COMPOUND" means a generic version of OTC Omeprazole.
1.11 "COMPOUND IMPROVEMENT" means any analog or derivative of a
Compound or any use of a Compound or any such analog or derivative, that is
discovered or made by or on behalf of or otherwise comes into the Control (other
than through the grant of a license by SYNOVICS under this Agreement) of FAI,
its Affiliates or sublicensees during the Term.
1.12 "CONTROL" means, with respect to any information or
intellectual property right, possession by a Party of the ability (whether by
ownership, license or otherwise) to grant access, a license or a sublicense to
such information or intellectual property right without violating the terms of
any agreement or other arrangement with any Third Party as of the time such
Party would first be required hereunder to grant the other
2
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
Party such access, license or sublicense.
1.13 "COST OF GOODS SOLD" means the price that SYNOVICS will
purchase from FAI, individual capsules in bulk form of the Product at a price
based upon the following quantities produced in a batch sizes of:
(a) [*]
(b) [*]
1.14 "DETAILED FORECAST" has the meaning set forth in SECTION
7.3(b).
1.15 "FAI KNOW-HOW" means all know-how, processes, information and
data that is: (a) controlled by FAI as of the Effective Date or during the Term;
and (b) necessary or useful for the development or commercialization of Products
in the Field.
1.16 "FAI PATENT RIGHTS" mean (a) those United States patents and
patent applications listed on EXHIBIT "A" attached hereto, and (b) all
divisionals, continuations, continuations-in-part, reissues, extensions,
supplementary protection certificates and foreign counterparts of such patents
and patent applications that are existing as of the Effective Date or filed or
issued during the Term, in each case (i) that are controlled by FAI; and (ii)
for which SYNOVICS requires a license from FAI to use, sell, offer for sale or
import the Compounds or Products in any country of the Territory.
1.17 "FDA" means the United States Food and Drug Administration,
and any successor thereto.
1.18 "FD&C ACT" means the United States Federal Food, Drug and
Cosmetics Act and applicable regulations promulgated thereunder, as amended from
time to time.
1.19 "FIELD" means the use of the Product as a Proton Pump
Inhibitor for the prevention or treatment of gastrointestinal diseases.
1.20 "FIRST COMMERCIAL SALE" means, with respect to any Product,
the first sale of such Product to a Third Party in any country of the Territory
after such Product has been granted Regulatory Approval by the competent
Regulatory Authorities in such country.
1.21 "GOOD CLINICAL PRACTICE" or "GCP" means the then-current
standards for clinical trials for pharmaceuticals, as set forth in the FD&C Act
and such standards of good clinical practice as are required by the European
Union and other organizations and governmental agencies in countries in which
the Product is intended to be sold, to the extent such standards are not in
contravention with United States GCP.
3
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
1.22 "GOOD LABORATORY PRACTICE" or "GLP" means the then-current
standards for laboratory activities for pharmaceuticals, as set forth in the
FD&C Act and such standards of good laboratory practice as are required by the
European Union and other organizations and governmental agencies in countries in
which the Product is intended to be sold, to the extent such standards are not
in contravention with United States GLP.
1.23 "GOOD MANUFACTURING PRACTICE" or "GMP" means the then-current
standards for the manufacture of pharmaceuticals, as set forth in the FD&C Act
and such standards of good manufacturing practice as are required by the
European Union and other organizations and governmental agencies in countries in
which the Licensed Product is intended to be sold, to the extent such standards
are not in contravention with United States GMP.
1.24 "HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder.
1.25 "OMEPRAZOLE" means the compound having the chemical name 5-
methoxy-2-((4-methoxy-3,5-dimethylpyridin-2yl)methylsulfinyl)-1H-benzimidazole.
1.26 "OTC" means the over-the-counter version of the Product
1.27 "NET PRODUCT SALES" means, with respect to the Product, the
gross amounts invoiced for sales of the Product(s) by SYNOVICS, to its
Customers, its Affiliates or Sublicensees, less the sum of:
(a) trade, quantity and cash discounts actually allowed
or paid;
(b) credits or allowances given or made for rejection or
return of previously sold products;
(c) to the extent included in the invoiced price, taxes,
duties or other governmental charges levied on or measured by the billing
amount, as adjusted for rebates and refunds;
(d) to the extent included in the invoiced price, charges
for shipping, freight and insurance directly related to the distribution of the
Product by SYNOVICS (excluding amounts reimbursed by Third Party customers); and
(e) discounts, refunds, rebates, charge backs,
retroactive price adjustments and any other allowances granted to managed health
care organizations or to federal, state and local governments, their agencies,
purchasers and reimbursers;
PROVIDED, HOWEVER, that during any Calendar Quarter the sum of the items
described in (a) and (d) above, for any Product shall not exceed [*] of the
gross sales for such Product during such Calendar Quarter and any amounts in
excess of such [*] limitation
4
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
shall not be deductible in any other Calendar Quarter.
Sales of a Product for use in conducting clinical trials of such Product in a
country of the Territory in order to obtain Regulatory Approval of such Product
in such country shall not be considered as "sales" for purposes of this SECTION
1.27.
1.28 "PRODUCT(s)" means capsules supplied in bulk form that
contains the Compound manufactured by FAI filled into SYNOVICS supplied bulk
shipping containers in accordance with the Specifications.
1.29 "REGULATORY APPROVAL" means all approvals, licenses,
registrations or authorizations of any national or international or local
regulatory agency, department, bureau or other governmental entity, necessary
for the commercial sale of the Product.
1.30 "REGULATORY AUTHORITY" means any national, supra-national,
regional, state or local regulatory agency, department, bureau, commission,
council or other governmental entity in the Territory involved in the granting
of Regulatory Approval for any Product.
1.31 "RESULTS" means all data, information and results obtained or
developed by or on behalf of FAI or any of its Affiliates in connection with the
evaluation of the Compound for use in any Product, the development of any
Product, and/or obtaining Regulatory Approval for any Product, which data,
information and results relate solely to the Compound and shall include, without
limitation, results obtained or developed in connection with any control arm of
any study performed by or on behalf of FAI or any of its Affiliates.
1.32 "SPECIFICATIONS" means the specifications developed during the
performance of this LICENSE AND SUPPLY AGREEMENT as approved by the Joint
Development Committee for the manufacturing and testing of the Compound and the
Product.
1.33 "SUPPLY TERM" has the meaning set forth SECTION 11.
1.34 "TERM" means the period commencing on the Effective Date and,
unless this Agreement is terminated sooner as provided in SECTION 11, ending on
the date when no payment obligations under this Agreement are or will become
due.
1.35 "TERRITORY" means all countries of the world.
1.36 "THIRD PARTY(IES)" means any person(s) or entity(ies) other
than SYNOVICS, FAI or their respective Affiliates.
1.37 "USA" means the United States of America and its territories.
1.38 "VALID CLAIM" means an unexpired claim of an issued and
unexpired
5
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
patent forming part of the Patent Rights, which claim has not been declared
invalid by an unappealed or unappealable order of a court or other tribunal of
competent jurisdiction.
2. GRANT OF RIGHTS.
2.1 GRANT OF LICENSE. Subject to the terms and conditions of this
Agreement, FAI hereby grants to SYNOVICS during the Term and SYNOVICS accepts an
exclusive license under the FAI Patent Rights and to use the FAI Know-How and
Regulatory Approvals, to use, sell, offer for sale and export the Product in the
Territory; PROVIDED, HOWEVER, that, except as expressly provided in SECTION 7.7
or 11.3 below, such license shall not include any right on the part of SYNOVICS
or its Affiliates or permitted sublicensees to make or have made the Compound.
2.2 DILIGENCE. SYNOVICS or its sub-licensee, shall be responsible
for the performance and coordination of stability and bioequivalence testing,
drafting and submission of the ANDA application to obtain Regulatory Approval
for the Product for sale in each country within the Territory. SYNOVICS shall be
the owner and shall register such ANDA application in its own name. FAI shall
assist SYNOVICS in the preparation of the ANDA application. FAI shall prepare
and be financially responsible for its contribution to the CMC portion of the
ANDA application.
2.3 SUBLICENSING. SYNOVICS may sublicense the rights granted to it
by FAI under this Agreement to any of SYNOVICS's Affiliates or to one or more
Third Parties, PROVIDED, HOWEVER, that: (a) SYNOVICS shall remain responsible
for the performance of all of its obligations under this Agreement, whether such
obligations are performed by SYNOVICS, its Affiliates or any of its
sublicensees; (b) SYNOVICS shall be responsible for all payment obligations
resulting from the commercialization of any Product, whether such
commercialization activities are performed by or on behalf of SYNOVICS, its
Affiliates or any of its sublicensees; and (c) SYNOVICS shall provide FAI with a
true, accurate and complete copy of each sublicense agreement within ten (10)
business days after entering into such sublicense agreement.
2.4 RETAINED RIGHTS; NO IMPLIED LICENSES. FAI retains all rights
in and to the FAI Patent Rights and the FAI Know-How that are not otherwise
expressly granted to or conferred upon SYNOVICS under this Agreement.
2.5 GOVERNMENT APPROVALS.
(a) GOVERNMENT APPROVALS. Each of SYNOVICS and FAI shall
use its good faith efforts to eliminate any concern on the part of any court or
government authority regarding the legality of the proposed transaction,
including, if required by federal or state antitrust authorities, promptly
taking all steps to secure government antitrust clearance, including, without
limitation, cooperating in good faith with any government investigation
including the prompt production of documents and information
6
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
demanded by a second request for documents and of witnesses if requested.
SYNOVICS shall be responsible for paying any fees required to be paid to any
governmental agency in connection with making any such filings that may be made
to secure government antitrust clearance or any filings that may be made
pursuant to SECTION 2.5(b) below, and each Party shall bear its own expenses,
including, without limitation, legal fees, incurred in connection with preparing
such filings.
(b) COOPERATION. SYNOVICS and FAI will cooperate and use
respectively all reasonable efforts to make all other registrations, filings and
applications, to give all notices and to obtain as soon as practicable all
governmental or other consents, transfers, approvals, orders, qualification
authorizations, permits and waivers, if any, and to do all other things
necessary or desirable for the consummation of the transactions as contemplated
hereby. Neither Party shall be required, however, to divest products or assets
or materially change its business if doing so is a condition of obtaining
approval under any governmental approvals of the transactions contemplated by
this Agreement.
(c) VALUATION OF TRANSACTION. SYNOVICS represents to FAI
that it (a) has valued the transactions contemplated hereby in accordance with
and pursuant to the requirements of the HSR Act and the rules promulgated
thereunder (16 CFR 801.1 et seq.), and (b) has determined that, based on such
valuation, no filing, including, without limitation, the filing of a notice and
report, is required under the HSR Act or the rules promulgated thereunder.
3. PRODUCT DEVELOPMENT.
3.1 PRODUCT DEVELOPMENT PLAN. FAI has provided to SYNOVICS a
Product Development Plan, which is attached hereto as EXHIBIT "B". FAI shall
notify SYNOVICS in writing within ten (10) days of making any material
modification to the Product Development Plan, which notification shall specify
the modification made and the reason for making such modification. The Product
Development Plan will serve as the basis of communication between FAI and
SYNOVICS concerning the development of the ANDA and CMC application. FAI will
provide updates to SYNOVICS with monthly updates with regards to the progress
executing the Product Development Plan.
3.2 APPROVAL DATE. FAI shall use Commercially Reasonable Efforts
to complete the Product Development Plan by no later than July 30, 2007. In
addition, upon SYNOVICS's request, FAI shall use its Commercially Reasonable
Efforts to provide SYNOVICS with advice and assistance in SYNOVICS's efforts to
develop and register the Products in other countries in the Territory outside of
the USA in the name of SYNOVICS. The assistance to be provided by FAI hereunder
shall include, without limitation, providing SYNOVICS reasonable access via
telephone and/or in-person contact during normal business hours with FAI's
technical personnel having knowledge about the Compounds as well as providing
any and all documentation necessary for submission.
7
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
3.3 PROGRESS REPORTS. Within ten (10) days after each calendar
month, FAI shall provide SYNOVICS with a written report setting forth in
reasonable detail the progress made by or on behalf of FAI in the development,
registration and Regulatory Approval of Products within the USA. Each such
report shall include, without limitation, a detailed description of all studies
conducted during the period covered by the report, a summary of all data
generated as part of FAI's Product development efforts during the period covered
by the report and other content as may be requested by ▇▇▇▇▇▇▇▇.
3.4 DILIGENCE OF SYNOVICS. SYNOVICS shall be solely responsible
for and shall use its Commercially Reasonable Efforts, at its sole expense, to
conduct all research and development activities required to obtain Regulatory
Approval of the Product in the USA, provide timely laboratory analysis for
assay, Product uniformity and dissolution for samples generated during the
development, scale-up, tech transfer and submittal/testing batch production and
to perform all studies and activities set forth in the Product Development Plan.
3.5 DILIGENCE OF FAI. FAI shall be solely responsible for and
shall use its Commercially Reasonable Efforts, at its sole expense, to conduct
all research and development activities required to prepare for submission, the
CMC portion of the ANDA application in the Territory and to perform all studies
and activities set forth in the Product Development Plan. ▇▇▇ further agrees to
comply with all applicable GLP, GCP and GMP in its design, development and
manufacture of Products hereunder.
3.6 COMMUNICATIONS. To ensure orderly communications between the
Parties with respect to the development and registration of Products, each Party
shall address all communications and inquiries pertaining to such matters only
to the other Party's representative designated in accordance with SECTION
14.6(a) hereof.
4. REGULATORY MATTERS.
4.1 REGULATORY FILINGS. SYNOVICS shall be responsible for the
preparation and filing, in SYNOVICS name, with the appropriate Regulatory
Authorities all documents, including, without limitation, all ANDAs (but
including any drug master files for the Compound) that are necessary to conduct
clinical studies of the Products and submit applications for Regulatory Approval
that are necessary to market and sell Products in all countries within the
Territory. In conjunction with such filings and at SYNOVICS's reasonable
request, FAI shall furnish to SYNOVICS all information that is (a) already in
the possession and control of FAI or its Affiliates and (b) necessary to obtain
such Regulatory Approval for such Product. Such information may include
information on the manufacturing and toxicity of the Product.
4.2 EVENT REPORTING. SYNOVICS shall be responsible for reporting
all Events (as defined below) associated with the Product to the appropriate
Regulatory
8
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
Authorities in accordance with applicable laws, rules and regulations.
Additionally, if either Party receives information regarding Events related to
the use of a Product, such Party shall promptly provide the other Party with
such information. For purposes of this SECTION 4.2, "EVENT" shall mean any
adverse event, adverse drug reaction, including, without limitation,
malfunctions, product failure, improper or inadequate design, manufacturer
labeling or user error reported during the use or sale of any Product or any
Products by or on behalf of SYNOVICS, its Affiliates, sublicensees and customers
(including, without limitation, end users purchasing any Product or using any
Product purchased from any of the foregoing
4.3 MUTUAL COVENANTS. Each Party covenants that during the Term:
(a) it shall comply with all federal, state, provincial, territorial,
governmental and local laws, rules and regulations applicable to the
development, manufacture and commercialization of Product and Products by such
Party; and (b) it shall disclose to the other Party all information in its
possession or control concerning side effects, injury, toxicity or sensitivity
reaction and incidents or severity thereof with respect to the Product.
5. JOINT DEVELOPMENT COMMITTEE
5.1 FORMATION; COMPOSITION. Within thirty (30) days after the
Closing Date, the Parties shall establish a committee (the "JOINT DEVELOPMENT
COMMITTEE" or "JDC") to coordinate the development and Regulatory Approval of
the Product. Each Party shall initially appoint one (1) representative to the
JDC. The JDC may change its number of representatives from time to time by
mutual consent of its members, provided that the JDC shall consist at all times
of an equal number of representatives of each Party. Each Party may replace its
JDC representatives at any time upon written notice to the other Party. The JDC
may invite non-members to participate in the discussions and meetings of the
JDC, provided that such participants shall have no vote. The Parties shall
alternate designating a representative to act as the Chairperson of the JDC,
with each Party having its designated representative Chairperson for a period of
twelve (12) months (or such other term as the JDC establishes). SYNOVICS shall
designate the first Chairperson. The Chairperson shall be responsible for
administering JDC meetings and circulating the agenda prior to each meeting, but
shall have no additional powers or rights beyond those held by the other
representatives of the JDC.
5.2 SPECIFIC RESPONSIBILITIES OF THE JDC. In addition to its
general responsibilities, the JDC shall in particular:
(i) review the overall strategy for and design of all clinical
trials and other studies conducted under the Product Development Plan;
9
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
(ii) discuss the requirements for Regulatory Approval for the
Territory and oversee and coordinate regulatory matters;
(iii) arrange for and coordinate initial commercial supply of the
Product;
(iv) facilitate the flow of information between the Parties with
respect to the development of, and obtaining Regulatory Approval for the
Products for use worldwide;
(v) perform such other functions as may be appropriate to further
the purposes of this Agreement, as directed by the JDC; and
(vi) create the Specifications based upon Phase 1 and 2 of the
Product Development Plan.
5.3 MEETINGS. During the period in which Licensed Products are
being developed, the JDC shall meet at least once per [calendar quarter], or
such other frequency as the Parties mutually agree in writing. The JDC shall
typically meet in person, but may meet by videoconference or teleconference if
requested by a Party. In-person JDC meetings will be held at locations
alternately selected by SYNOVICS and FAI. Each Party will bear the expense of
its respective JDC members' participation in JDC meetings. The chairperson of
the JDC shall be responsible for keeping reasonably detailed written minutes of
all JDC meetings that reflect, without limitation, material decisions made at
such meetings. The chairperson shall use reasonable efforts to distribute the
meeting minutes to each member of the JDC for review and approval within ten
(10) business days after a meeting. Minutes will be deemed approved unless a
member of the JDC objects to the accuracy of such minutes within ten (10)
business days of receipt.
5.4 DECISION-MAKING. The JDC shall act by unanimous vote at
meetings. Should the JDC become deadlocked on or otherwise not be able to agree
upon any issue before it, and such issue remains unresolved after a period of
thirty (30) days, then it shall be resolved by means of the dispute resolution
provision of SECTION 14.8.
6. COMMERCIALIZATION.
6.1 MARKETING AND SALE. SYNOVICS shall at its own expense be
solely responsible for and shall use its Commercially Reasonable Efforts to
promote, market, distribute and sell the Product. SYNOVICS shall be solely
responsible for establishing the price of the Products sold by or on behalf of
it pursuant to this Agreement.
6.2 USE OF TRADEMARK/TRADENAME. SYNOVICS shall promote, market,
distribute and sell each Product under tradenames and trademarks of its choice.
SYNOVICS further agrees to include on the packaging, label and advertising or
promotional materials for each Product a statement indicating that such Product
is being made, distributed and sold by SYNOVICS pursuant to a license from FAI,
which
10
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
statement shall be in both form and substance acceptable to FAI.
6.3 PERIODIC REVIEW. SYNOVICS and FAI shall periodically meet, at
such times and places as are mutually agreed upon by the Parties, for SYNOVICS
to provide FAI with a status of the progress of SYNOVICS's commercialization of
the Product. Such meetings shall occur at least once per calendar year. SYNOVICS
and FAI shall each be responsible for its own expenses incurred in connection
with attending such meetings.
7. SUPPLY OF PRODUCTS.
7.1 EXCLUSIVE SUPPLY. In accordance with and subject to the terms
of this Agreement, SYNOVICS agrees to purchase its and its Affiliates' and
sublicensees' entire requirements of the Product from FAI during the Supply Term
and FAI shall supply SYNOVICS with all amounts of the Product ordered by
SYNOVICS in accordance with the forecasting and ordering provisions of this
SECTION 7 until the latter of: (i) the expiration of the last to expire of the
FAI Patent Rights containing a Valid Claim in such country; and (ii) ten (10)
years from the First Commercial Sale of such Product in such country after which
point SYNOVICS shall not be obligated to purchase any further Product from FAI.
All quantities of Products supplied to SYNOVICS hereunder are to be supplied as
capsules in bulk form filled in SYNOVICS supplied bulk shipping containers in
compliance with the specifications provided by SYNOVICS. SYNOVICS acknowledges
that FAI currently obtains the Omeprazole, excipients and coating solutions from
Third Party manufacturers.
7.2 MANUFACTURE OF PRODUCTS.
(a) COMPLIANCE. All quantities of the Compound and the
Product supplied by FAI to SYNOVICS hereunder shall be manufactured in
accordance with GMP, the Specifications and the Commercial Manufacturing Quality
Agreement, Exhibit "C", attached hereto. The Specifications may only be revised
as provided in SECTION 7.2(B). While any quantity of the Products is in its
possession, FAI shall comply with all applicable federal, state and local
statutory and regulatory requirements regarding the manufacture, handling and
storage of the Product.
(b) CHANGE CONTROL.
(i) FAI INITIATED CHANGES. If FAI or any of its
Affiliates or subcontractors desires or is required pursuant to a change in the
applicable Regulatory Approval for a Products to make a change in the
Specifications, configuration, packaging or manufacturing processes for such
Products to be supplied to SYNOVICS hereunder, FAI shall notify SYNOVICS, in
writing, of the proposed change and SYNOVICS shall have thirty (30) days in
which to submit to FAI its comments regarding the proposed change. FAI shall
implement any comments received from SYNOVICS
11
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
during such thirty (30) day period prior to completing the proposed change(s).
(ii) SYNOVICS INITIATED CHANGES. If SYNOVICS
requests that FAI make a change in the Specifications, configuration, packaging
or manufacturing processes for any Products to be supplied to SYNOVICS
hereunder, FAI shall complete such change within thirty (30) days of receipt of
such change.
(iii) REGULATORY APPROVAL. SYNOVICS will be
responsible for applying for and obtaining any Regulatory Approval that may be
necessary as a result of the proposed change(s) described in SECTIONS 7.2(b)(i)
or 7.2(b)(ii) above for its manufacture and supply of the Products to SYNOVICS.
(iv) COSTS. FAI shall be solely responsible for
the costs incurred by FAI or its subcontractors in connection with activities
undertaken by FAI or its subcontractors in implementing the proposed change(s)
described in SECTION 7.2(a)(i) AND (ii) above. SYNOVICS shall be solely
responsible for the reimbursement of costs to FAI or its subcontractors in
connection with activities undertaken by FAI or its subcontractors in
implementing the proposed change(s) described in Section 7.2 (b)(ii) above.
(c) SAFETY STOCK. SYNOVICS will include in its forecasts
made pursuant to SECTION 7.3 below and, to the extent available from FAI, will
purchase a sufficient quantity of the Product from FAI to maintain in SYNOVICS's
inventory a minimum of that amount of Product that is equal to the lesser of (i)
[*] of the quarterly average amount of Products ordered by SYNOVICS during the
preceding four (4) Calendar Quarters or (ii) [*].
7.3 FORECASTS.
(a) LONG TERM FORECASTS. During the Supply Term, SYNOVICS
shall provide FAI with a rolling, good faith, non-binding forecast (by Calendar
Quarter) of the quantity of each Products expected to be purchased, in the next
year following the date of such forecast (with the first calendar year being the
date on which such forecast is due), by SYNOVICS for the use in the development
and manufacture of the Products. The first such forecast shall be submitted in
writing to FAI no later than June 30, 2008 and thereafter updated forecasts
shall be submitted to FAI no later than January 1 of each year.
(b) DETAILED BINDING FORECASTS. During the Supply Term,
SYNOVICS shall deliver to FAI a detailed rolling forecast setting forth
SYNOVICS's requirements and anticipated delivery schedules for the Product for
each Calendar Quarter during the succeeding twelve (12) month period (the
"DETAILED FORECAST"). The Detailed Forecast shall thereafter be updated by
SYNOVICS quarterly, no later than the first day of each Calendar Quarter, so
that each Calendar Quarter FAI shall have been provided with a rolling Detailed
Forecast for each Calendar Quarter during the twelve (12) month period
12
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
commencing on the first day of the next Calendar Quarter following the date on
which such Detailed Forecast is submitted. The Detailed Forecast shall be firm
and binding on SYNOVICS, subject to the permissible variances set forth in
SECTION 7.3(c) below. If SYNOVICS fails to provide any updated Detailed Forecast
in accordance with this SECTION 7.3(b), the Detailed Forecast last provided by
SYNOVICS shall be deemed to be SYNOVICS's binding Detailed Forecast for the next
succeeding twelve (12) month period.
(c) DETAILED FORECAST VARIANCES. Each updated Detailed
Forecast may modify the amount of the quantity of a Products estimated in the
previous Detailed Forecast in accordance with the following limitations:
(i) for the first Calendar Quarter covered by
such updated Detailed Forecast, [*];
(ii) for the second Calendar Quarter covered by
such updated Detailed Forecast, [*];
(iii) for the third Calendar Quarter covered by
such updated Detailed Forecast, [*]; and
(iv) for the fourth Calendar Quarter covered by
such updated Detailed Forecast, [*].
7.4 ORDERS AND DELIVERY.
(a) PURCHASE ORDERS. From time to time, SYNOVICS shall
place purchase orders with FAI, in a format agreed upon by the Parties,
specifying the quantities (which shall be consistent with the terms of SECTION
7.3) of each Product desired, and the place(s) to which and the manner and dates
by which delivery is to be made; such delivery dates to be no earlier than
ninety (90) calendar days (or such shorter period of time as the Parties may
mutually agree upon in writing) after the date on which FAI receives such
purchase order from SYNOVICS. Without prior written approval of FAI, SYNOVICS
shall not submit more than one purchase order for delivery of any Products
during any one (1) calendar month and shall specify no more than a single
delivery date during any one (1) calendar month. All purchase orders shall be
sent by SYNOVICS to the attention of the following employee of FAI or as
otherwise instructed by FAI:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
Fluid Air, Inc. doing business as PharmPro
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
13
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
To the extent the terms of any purchase order or acknowledgment thereof are
inconsistent with the terms of this Agreement, the terms of this Agreement shall
control. FAI will provide an acknowledgment of any purchase order within five
(5) business days. If at any time FAI has reason to expect it will be unable to
comply with any purchase order, it shall immediately inform SYNOVICS of such
expectation and reasons. If any ordered shipment of a Product has not arrived
more than thirty (30) days later than the scheduled delivery date, SYNOVICS may,
as its sole and exclusive remedy, at its option cancel that particular
corresponding purchase order, or adjust future Detailed Forecasts (only to the
extent necessary to account for the quantity not delivered).
(b) DELIVERY. FAI shall deliver to SYNOVICS or SYNOVICS's
designee each order of the Product, packed in SYNOVICS supplied bulk shipping
containers in accordance with FAI's or its subcontractor's customary practices
and the Specifications, EXW (Incoterms 2000) FAI's or its subcontractor's
production point or storage facilities. SYNOVICS shall be solely responsible for
all shipping and transportation costs and duties incurred in and arranging for
any customs clearances that may be necessary for transporting the ordered
Product and return of bulk shipping containers from such site to SYNOVICS's or
its subcontractors' facilities. Title and risk of loss will pass to SYNOVICS
when each order of a Product is delivered to the designated carrier of SYNOVICS
at FAI's or its subcontractor's production point or storage facilities. Failure
of FAI to deliver the Product within the time period specified in any purchase
order provided by SYNOVICS or failure by FAI to comply with any provision of
this Section 7 may be considered to be a material breach of this agreement.
(c) CERTIFICATE OF ANALYSIS. As of the time of such
delivery by FAI or its subcontractor, each lot of Product will conform to its
applicable Specifications. FAI shall perform or require its subcontractor to
perform release testing in a manner consistent with testing methods agreed upon
by the Parties. FAI shall provide or require its subcontractor to provide to
SYNOVICS testing data for assay, product uniformity and dissolution for the
purposes of demonstrating conformance to the Specifications, with each shipment
of Product to SYNOVICS or its designated recipient stating that the Product
conforms to the Specifications and meets release specifications as of the time
such Product is delivered to SYNOVICS's carrier. The Certificate of Analysis
shall be in a format agreed upon by the Parties.
(d) STORAGE CONDITIONS. SYNOVICS shall be solely
responsible for ensuring that, upon delivery of any Product to its carrier and
thereafter, such Product is properly stored and shipped in accordance with the
storage and shipping conditions set forth in the applicable Specifications or as
otherwise mutually agreed upon by the Parties in writing. With respect to any
Product not so properly stored and shipped, FAI shall have no liability to
SYNOVICS under SECTIONS 7.5 or 12.1.
14
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
7.5 INSPECTION OF PRODUCTS.
(a) ANALYSIS BY ▇▇▇▇▇▇▇▇. SYNOVICS may analyze or may
have analyzed on its behalf, in accordance with the testing methods set forth in
the applicable Specifications, all Products delivered to SYNOVICS for purposes
of determining whether the same meets the Specifications and was manufactured in
accordance with GMP ("ACCEPTABLE PRODUCTS") and will do so within thirty (30)
days from the date of delivery of such Products to SYNOVICS carrier. SYNOVICS
shall notify FAI in writing within such thirty (30) day period of any quantity
of a Product that SYNOVICS is rejecting because it is not Acceptable Product. If
SYNOVICS does not so notify FAI within the specified thirty (30) day period,
such quantity of Products shall be deemed Acceptable Products.
(b) THIRD PARTY TESTING. If FAI, after good faith
consultation with SYNOVICS, disputes any finding by SYNOVICS that any Product
order or portion thereof is not Acceptable Product, representative samples of
such Product shall be forwarded to a Third Party jointly selected by FAI and
SYNOVICS, in their reasonable discretion, for analysis, which analysis shall be
performed in compliance with applicable FDA regulations for re-testing of
pharmaceutical products. The findings of such Third Party regarding whether the
Product was Acceptable Product shall be binding upon the Parties. The cost of
such analysis by such Third Party shall be borne by the Party whose findings
differed from those generated by such Third Party.
(c) REPLACEMENT OF PRODUCT. FAI shall replace any Product
order, or portion thereof, which is not Acceptable Product (unless such
non-conformance is due to any negligent or wrongful act or omission by SYNOVICS
or its agents or sub-contractors), at its cost and expense, including shipping
costs; PROVIDED, HOWEVER, that to the extent SYNOVICS has not previously paid
for that quantity of Product which is not Acceptable Product, SYNOVICS shall
remain obligated to pay FAI for such replacement quantities of Product.
(d) DISPOSITION OF REJECTED ORDERS. FAI shall instruct
SYNOVICS as to the disposition of any Product order or portion thereof
determined not to be Acceptable Product. At the sole option of FAI, said Product
may be returned to FAI, at FAI's expense including shipping costs, or destroyed
in an environmentally acceptable manner, at FAI's expense.
7.6 INSPECTION OF AND ACCESS TO FACILITIES AND RECORDS.
(a) INSPECTION BY REGULATORY AUTHORITIES. Upon the
request of any Regulatory Authority having jurisdiction over the manufacture of
either Product hereunder, such agency shall have access to observe and inspect
FAI's facilities and procedures used for the manufacture, testing or warehousing
of the Products and to audit such facilities for compliance with GMP and/or
other applicable regulatory standards. If FAI is obtaining Compound from a Third
Party manufacturer, FAI shall
15
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
use Commercially Reasonable Efforts to ensure that such manufacturer's
facilities and procedures are similarly subject to the provisions of this
SECTION 7.6(a).
(b) NOTIFICATION OF INSPECTIONS. ▇▇▇ also agrees to
notify SYNOVICS within ten (10) business days of any written or oral inquiries,
notifications or inspection activity by any Regulatory Authority in regard to
either the Compound or the Product to be supplied to SYNOVICS hereunder. FAI
shall provide a reasonable description of any such governmental inquiries,
notifications or inspections promptly (but in no event later than ten (10)
business days) after such visit or inquiry. FAI shall furnish to SYNOVICS (i)
within ten (10) business days after receipt, any report or correspondence issued
by any Regulatory Authority in connection with such visit or inquiry, including
but not limited to, any FDA Form 483 (List of Inspectional Observations) or
applicable portions of any FDA Warning Letters that pertain to the Products in
the Territory and (ii) not later than five (5) business days prior to the time
it provides to any Regulatory Authority, copies of proposed responses or
explanations relating to items set forth above (each, a "PROPOSED RESPONSE"), in
each case redacted of trade secrets or other confidential or proprietary
information of FAI that are unrelated to the obligations under this Agreement or
are unrelated to any Products. FAI shall discuss with SYNOVICS and consider in
good faith any comments provided by SYNOVICS on the Proposed Response. After the
filing of a response with the FDA or other regulatory agency, FAI will notify
SYNOVICS of any further contacts with such agency relating to the subject matter
of the response.
(c) INSPECTION BY SYNOVICS. FAI shall permit SYNOVICS to
inspect once annually, or more than once annually in the event SYNOVICS has good
reason to be concerned regarding the quality of any Products, that portion of
the FAI's facility where any Product is manufactured or stored and review such
related documents as is reasonably necessary for the purpose of assessing FAI's
compliance with applicable regulations. Such inspection and document review
shall be conducted upon reasonable prior notice by SYNOVICS, but not less than
thirty (30) days prior to the proposed inspection (except in the event of a
reasonable concern by SYNOVICS regarding the quality of any Products), at a time
and date mutually agreeable to the Parties.
7.7 ALTERNATE SUPPLIERS. [*]
7.8 PURCHASE PRICE.
(a) PRODUCTS. SYNOVICS shall purchase from FAI and FAI
shall sell to SYNOVICS each Product for use by SYNOVICS for commercial
activities at a purchase price equal to [*].
(b) [*].
(c) METHOD OF PAYMENT. SYNOVICS shall make payments to
FAI for
16
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
the purchase price of delivered quantities of the Products by check or
electronic transfer, to be received by FAI within thirty (30) days after the
date of receipt of the Product by SYNOVICS.
7.9 RECALLS.
(a) RESPONSIBILITY. In the event of a recall of any
Product required or recommended by a governmental agency or authority of
competent jurisdiction within the Territory or if recall of any Product is (i)
reasonably deemed advisable by SYNOVICS or FAI, or (ii) jointly deemed advisable
by SYNOVICS and FAI, such recall shall be promptly implemented and administered
by SYNOVICS in a manner that is appropriate and reasonable under the
circumstances and in conformity with accepted trade practices. The costs of any
such recall shall be borne by the Party or Parties whose actions or omissions
caused the recall to be necessary.
(b) COMMUNICATION. Each Party shall keep the other fully
and promptly informed of any notification, event or other information, whether
received directly or indirectly, which might affect the marketability, safety or
effectiveness of Product or might result in a recall or seizure of Products by
the FDA.
(c) REPLACEMENT; REFUND. In the event of any recall or
seizure of Product arising out of or resulting from FAI's failure to manufacture
a Product in accordance with reasonable expectations in following the master
batch record, Specifications and GMP, FAI shall, at the election of SYNOVICS,
either:
(i) supply conforming replacement Product,
without charge to SYNOVICS (provided SYNOVICS has already paid for the quantity
of Product being replaced), in an amount sufficient to replace the amount of the
Product required to manufacture the Product recalled or seized, or
(ii) refund to SYNOVICS, or give credit to
SYNOVICS against outstanding receivables due from SYNOVICS against the price of
the same Product to be delivered to SYNOVICS in the future, in amounts equal to
the price paid by SYNOVICS to FAI for the Product required to manufacture the
Product so recalled or seized, plus the reasonable transportation costs incurred
by SYNOVICS and not recovered by SYNOVICS in respect of such recalled or seized
Product.
(d) DEFINITIONS.
(i) RECALL. For purposes of this SECTION 7.9,
"recall" shall mean any action by SYNOVICS and/or its Affiliates, or FAI and/or
its Affiliates, to recover title or possession or halt distribution,
prescription or consumption of any Products sold or shipped to Third Parties by
SYNOVICS, its Affiliate or sublicensee. The term "recall" also applies to any
Product that would have been subject to recall if it had been sold or shipped.
17
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
(ii) SEIZURE. For purposes of this SECTION 7.9,
"seizure" shall mean any action by the FDA to detain or destroy any Product or
prevent the distribution, prescription, consumption or release of such Product.
8. CONSIDERATION.
8.1 LICENSE FEE. As partial consideration for the rights granted
to SYNOVICS pursuant to this Agreement, SYNOVICS shall pay to FAI a license fee
equal to Five Hundred Thousand US Dollars (US$500,000). The Parties acknowledge
that SYNOVICS has paid a deposit of Two Hundred and Fifty Thousand US Dollars
(US$250,000) to FAI. SYNOVICS shall pay the remaining Two Hundred and Fifty
Thousand US Dollars (US$250,000) upon the date in which FAI provides SYNOVICS
with a copy of certificate from the API supplier in compliance with Section 10.2
(d).
8.2 MILESTONE PAYMENTS. As further consideration for the rights
granted to SYNOVICS pursuant to this Agreement, SYNOVICS shall pay to FAI the
following one-time, non-refundable, non-creditable amounts within thirty (30)
days of achievement of the development events set forth below, with respect to
the first Product to achieve the respective event:
------------------------------------------ -------------------
DEVELOPMENT EVENT PAYMENT
------------------------------------------ -------------------
Completion of the formulation for scale-up US$[*]
to the satisfaction of SYNOVICS
------------------------------------------ -------------------
Completion of scale-up to FAI Pilot US$[*]
facility and Pilot production of submittal
batches for stability and pivotal
bioequivalency studies
------------------------------------------ -------------------
Submission of the ANDA to the FDA in the US$[*]
USA by SYNOVICS
------------------------------------------ -------------------
Acceptance of ANDA by the FDA in the USA US$[*]
------------------------------------------ -------------------
Completion of scale-up studies and Tech US$[*]
Transfer to FAI Production facility and/or
approval of the ANDA by the FDA in the USA
------------------------------------------ -------------------
18
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
Within five (5) days of achieving each event listed in above, FAI shall
notify SYNOVICS, in writing, that such event has been achieved.
8.3 ROYALTIES.
(a) ROYALTY RATES. As further consideration for the
rights granted to SYNOVICS pursuant to this Agreement, SYNOVICS shall pay to FAI
royalties ("ROYALTY PAYMENTS"), as follows:
(i) [*] on the first [*] of Net Product Sales in
any calendar year;
(ii) [*] on the amount of Net Product Sales in
excess of [*] but less than [*] in any calendar year; and
(iii) [*] on the amount of Net Product sales in
excess of [*] in any calendar year.
(b) DURATION OF ROYALTY PAYMENTS. SYNOVICS shall
calculate and pay to FAI Royalty Payments under this SECTION 8.3 commencing on
the First Commercial Sale in the Territory. Royalty Payments due on each Product
sold by or on behalf of SYNOVICS, at the rates set forth in SECTION 8.3(a) above
shall continue on a country-by-country basis until the latter of: (i) expiration
of the last to expire of the FAI Patent Rights containing a Valid Claim in such
country; and (ii) ten (10) years from the First Commercial Sale of such Product
in such country after which point SYNOVICS shall not be obligated to pay any
royalty to FAI.
(c) PAYMENTS AND REPORTS. Within thirty (30) days
following the close of each Calendar Quarter, following the First Commercial
Sale of a Product, SYNOVICS shall furnish to FAI a written report for the
Calendar Quarter showing: the aggregate Net Product Sales of each Product sold
by SYNOVICS during such Calendar Quarter; and the Royalty Payments payable under
this Agreement for such Calendar Quarter. Simultaneously with the submission of
the written report, SYNOVICS shall pay to FAI, for the account of SYNOVICS, a
sum equal to the aggregate Royalty Payment due for such Calendar Quarter
calculated in accordance with this Agreement (reconciled for any previous
overpayments, underpayments or credits).
8.4 METHOD OF PAYMENT. The payments to be made by SYNOVICS to FAI
pursuant to SECTIONS 8.1, 8.2 and 8.3 of this Agreement shall be made in United
States dollars by way of wire transfer to FAI on the date each such payment is
due and payable. Whenever calculation of Net Product Sales requires conversion
from any foreign currency, SYNOVICS shall convert the amount of Net Product
Sales in foreign currencies into U.S. Dollars, using the average year-to-date
rate of exchange for such currencies published in THE WALL STREET JOURNAL on the
last business day of the
19
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
Calendar Quarter during which such Net Product Sales were made.
8.5 LATE PAYMENTS. Any amounts not paid by SYNOVICS when due under
this Agreement shall be subject to interest from and including the date payment
is due through and including the date upon which FAI has collected immediately
available funds in an account designated by FAI at a rate equal to two percent
(2%) plus the prime rate of interest quoted in the Money Rates section of THE
WALL STREET JOURNAL, calculated daily on the basis of a 360-day year, or similar
reputable data source.
8.6 MAINTENANCE OF RECORDS; AUDITS. SYNOVICS shall maintain and
cause its Affiliates and sublicensees to maintain books of account at their
principal place of business containing all information that may be necessary for
the purpose of calculating all payments under this Agreement. FAI shall have the
right to engage an independent, certified public accountant, selected by FAI and
reasonably acceptable to SYNOVICS, to perform, on behalf of FAI, an audit of
such books and records of SYNOVICS and its Affiliates and sublicensees as is
necessary to confirm any amounts payable to FAI under this Agreement for the
period or periods requested by FAI, and the correctness of any report or
payments made under this Agreement. Such audits shall be conducted during normal
business hours upon reasonable prior written notice from FAI in such a manner as
to not unnecessarily interfere with SYNOVICS's normal business activities, and
shall include results of no more than [*] preceding calendar years prior to
audit notification. FAI shall have a right to request from the independent
certified public accountant full access to review all work papers and supporting
documents pertinent to such audit. Such audit shall not occur more frequently
than [*] per calendar year nor more frequently than [*] with respect to records
covering any specific period of time. The use of all information, data,
documents and abstracts referred above shall be for the sole purpose of
verifying statements or compliance with this Agreement, shall be treated as
SYNOVICS Confidential Information subject to the obligations of this Agreement
and, except in the event of a dispute between the Parties regarding amounts
payable hereunder or the results of any audit, need not be retained more than
[*] years from the end of the calendar year to which each shall pertain. If any
audit hereunder reveals an underpayment, SYNOVICS shall promptly make up such
underpayment, and if such underpayment is more than [*], together with accrued
interest calculated in accordance with SECTION 8.5. FAI shall bear the full cost
of any audit under this SECTION 8.6, unless such audit discloses an underpayment
by SYNOVICS of more than [*] of the amount owed hereunder, in which case
SYNOVICS shall bear the full cost of such audit as performed by FAI's
independent, certified public accountant.
8.7 TAXES AND WITHHOLDING. All taxes, assessments and fees of any
nature levied or incurred on account of any payments from SYNOVICS to FAI
accruing under this Agreement, by national, state or local governments known by
FAI at the Effective Date that have been included in the Cost of Goods, will be
assumed and paid by SYNOVICS, except taxes with respect to income of FAI, and if
such taxes are required
20
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
to be withheld by SYNOVICS they will be deducted from payments due to FAI and
will be timely paid by SYNOVICS to the proper taxing authority for the account
of FAI, a receipt or other proof of payment therefore secured and sent to FAI as
soon as practicable. ▇▇▇▇▇▇▇▇ agrees to assist FAI in claiming exemption from
such deductions or withholdings under any double taxation or similar agreement
or treaty from time to time in force and will apply the relevant provisions of
any such agreement or treaty to minimize the amount required to be so withheld
or deducted.
9. INTELLECTUAL PROPERTY.
9.1 FILING, PROSECUTION AND MAINTENANCE OF PATENT RIGHTS. FAI
shall file, prosecute and maintain the Patent Rights in the Territory and
licensed to SYNOVICS under this Agreement for FAI'S Method of Producing Small
Granules.
9.2 ENFORCEMENT OF PATENT RIGHTS. If SYNOVICS becomes aware of any
infringement within the Territory of any Valid Claim within the FAI Patent
Rights, it will notify FAI in writing to that effect. Any such notice shall
include any available evidence to support an allegation of infringement by such
Third Party. FAI shall have the sole right, but not the obligation, to take (or
to permit any of its licensees to take) any such action which it reasonably
deems necessary to obtain a discontinuance of such infringement or to bring (or
to permit any of its licensees to bring) suit against the Third Party infringer.
In no event shall FAI enter into any settlement, consent judgment or other
voluntary final disposition of such suit which would adversely affect SYNOVICS's
rights under this Agreement in any way without first obtaining SYNOVICS's
written consent to do so, which consent shall not be unreasonably withheld.
SYNOVICS will reasonably cooperate with FAI in any such suit or action and shall
have the right to consult with FAI and be represented by its own counsel at its
own expense. Any recovery or damages derived from a suit which SYNOVICS has not
joined and shared costs shall be retained by FAI.
10. REPRESENTATIONS AND WARRANTIES.
10.1 REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES. As of the
Effective Date, each of SYNOVICS and FAI hereby represents and warrants to the
other Party hereto as follows:
(a) it is a corporation or entity duly organized and
validly existing under the laws of the state or other jurisdiction of
incorporation or formation;
(b) the execution, delivery and performance of this
Agreement by such Party has been duly authorized by all requisite corporate
action and do not require any shareholder action or approval;
(c) it has the power and authority to execute and deliver
this
21
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
Agreement and to perform its obligations hereunder; and
(d) 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 or operative 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.
10.2 REPRESENTATIONS AND WARRANTIES OF FAI. In addition to the
representations and warranties made by FAI under SECTION 10.1, FAI hereby
represents and warrants to SYNOVICS that:
(a) FAI Controls the FAI Patent Rights and has the right
to grant the licenses granted to SYNOVICS under SECTION 2 of this agreement;
(b) each Product supplied under this Agreement: (i) will
conform to its applicable Specifications at the time of delivery to SYNOVICS's
carrier; (ii) will be manufactured in accordance with the GMP; and (iii) will
not be adulterated or misbranded at the time of delivery to SYNOVICS's carrier;
and
(c) FAI has not and will not use in any capacity the
services of any persons debarred under 21 USC ss. 335(a) or 335(b) in connection
with the manufacture of the Products to be supplied to SYNOVICS hereunder.
(d) the Compound and Product supplied to SYNOVICS shall
be manufactured in accordance with the Product Development Plan attached to
Exhibit "B" to this Agreement, in such a manner so as to circumvent and not
breach or infringe the patent, copyright or other intellectual property right of
a third party which is listed in the FDA's Orange Book regarding OTC Omeprazole
relative to Application Number 021229 or any patent which is indicated in
Exhibit "B" to this Agreement. FAI shall further obtain a certificate from its
API suppliers in a form that is acceptable to SYNOVICS that states that the
materials or Compound that they supply are manufactured in such a manner so as
to circumvent and not breach or infringe the patent, copyright or other
intellectual property right of any other party. FAI shall supply SYNOVICS with a
copy of each such supplier certificate for approval and acceptance by SYNOVICS.
Failure to obtain such a certificate to the satisfaction of SYNOVICS may, at the
sole option of SYNOVICS, result in immediate termination of this Agreement.
10.3 REPRESENTATION BY LEGAL COUNSEL. Each Party hereto represents
that it has been represented by legal counsel in connection with this Agreement
and acknowledges that it has participated in the drafting hereof. In
interpreting and applying
22
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
the terms and provisions of this Agreement, the Parties agree that no
presumption shall exist or be implied against the Party which drafted such terms
and provisions.
10.4 WARRANTY DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT, THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF, AND EACH
PARTY EXPRESSLY DISCLAIMS, ANY AND ALL REPRESENTATIONS AND WARRANTIES OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NON-INFRINGEMENT OF
THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES.
11. TERM AND TERMINATION.
11.1 TERM. The term of this Agreement shall commence upon the
Effective Date. Unless this Agreement is terminated sooner as provided in this
SECTION 10, this Agreement shall expire for the Product on a country-by-country
basis on the expiration of SYNOVICS's obligation to make Royalty Payments with
respect to such country as provided in SECTION 7.3, at which time the license
granted to SYNOVICS by FAI under this Agreement to use the FAI Know-How for the
Product shall be fully-paid.
11.2 TERMINATION FOR CAUSE. Either Party may terminate this
Agreement upon written notice provided to the other Party at any time during the
Term:
(a) if the other Party commits a material breach of its
obligations under this Agreement, and such breach remains uncured for ninety
(90) days from the date of written notice of such breach is given to the
breaching Party; or
(b) upon the filing or institution of bankruptcy,
reorganization, liquidation or receivership proceedings, or upon an assignment
of substantially all of the assets for the benefit of creditors by the other
Party, or in the event a receiver or custodian is appointed for such Party's
business, or if substantially all of such Party's business is subject to
attachment or similar process; PROVIDED, HOWEVER, that in the case of any
involuntary bankruptcy proceeding such right to terminate shall only become
effective if the proceeding is not dismissed within sixty (60) days after the
filing thereof.
11.3 EFFECT OF TERMINATION. Upon expiration or any termination for
cause by SYNOVICS of this Agreement all rights and licenses granted by FAI to
SYNOVICS shall fully transferred to SYNOVICS without any further obligation by
SYNOVICS to make any further royalty or payment of any kind to FAI. SYNOVICS
shall be free to and shall be granted a fully paid up license manufacture the
Compound or the Product using any FAI Patent Rights and FAI Know-How. FAI shall
provide to SYNOVICS, without charge, such information as may be required to
manufacture the Product at a site specified by SYNOVICS. The following
provisions shall survive expiration or any termination of this Agreement:
Sections 4, 6, 7, 8, 9, 10, 11, 12, and 13. Upon
23
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
termination for cause by FAI of this Agreement, all rights and licenses granted
by FAI to SYNOVICS shall be fully terminated
12. INDEMNIFICATION AND INSURANCE.
12.1 INDEMNIFICATION BY FAI. Unless otherwise provided herein, FAI
shall indemnify, hold harmless and defend SYNOVICS and its Affiliates, and each
of their respective directors, officers, employees and agents (each, an
"SYNOVICS INDEMNIFIED PARTY") from and against any and all liability, loss,
damage, cost and expense (including without limitation reasonable attorneys'
fees) ("LIABILITY") incurred by a SYNOVICS Indemnified Party in connection with
suits, claims, actions or demands ("CLAIMS") brought or made by a Third Party,
to the extent that such Claims arise out of: (a) the breach by FAI of any
representation or warranty contained in this Agreement; or (b) the manufacture
or use of Products by FAI. Notwithstanding the foregoing, FAI shall have no
obligation under this Agreement to indemnify, defend or hold harmless any
SYNOVICS Indemnified Party with respect to Liability that results from willful
misconduct or negligent acts or omissions of SYNOVICS, its Affiliates, or any of
their respective directors, officers, employees and agents.
12.2 INDEMNIFICATION BY ▇▇▇▇▇▇▇▇. SYNOVICS shall indemnify, defend
and hold harmless FAI and its Affiliates, and each of their respective
directors, officers, employees and agents (each, an "FAI INDEMNIFIED PARTY")
from and against any Liability incurred by an FAI Indemnified Party in
connection with Claims brought or made by a Third Party, to the extent that such
Claims arise out of: (a) the breach by SYNOVICS of any obligation, covenant,
representation or warranty contained in this Agreement; or (b) the storage,
promotion, packaging, distribution, use, marketing, sale or other disposition of
Products by SYNOVICS, its Affiliates, its permitted sublicensees or their
respective subcontractors; or (c) submittal of the ANDA for the Product to the
FDA. Notwithstanding the foregoing, SYNOVICS shall have no obligation under this
Agreement to indemnify, defend, or hold harmless any FAI Indemnified Party with
respect to Liability that results from willful misconduct or negligent acts or
omissions of FAI, its Affiliates, or any of their respective directors,
officers, employees or agents.
12.3 CONDITIONS TO INDEMNIFICATION. In the event of a Claim by a
Third Party against a Party entitled to indemnification under this Agreement
("INDEMNIFIED PARTY"), the Indemnified Party shall promptly notify the other
Party ("INDEMNIFYING PARTY") in writing of the Claim and the Indemnifying Party
shall undertake and solely manage and control, at its sole expense, the defense
of the Claim and its settlement. The Indemnified Party shall cooperate with the
Indemnifying Party, including, as requested by the Indemnifying Party entering
into a joint defense agreement. The Indemnified Party may, at its option and
expense, be represented in any such action or proceeding by counsel of its
choice. The Indemnifying Party shall not be liable for any litigation or
settlement costs or expenses incurred by the Indemnified Party without the
Indemnifying Party's written consent. The Indemnifying Party may not settle a
Claim
24
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
without the consent of the Indemnified Party, if such settlement would impose
any monetary obligation on the Indemnified Party or require the Indemnified
Party to submit to an injunction or otherwise limit the Indemnified Party's
rights under this Agreement.
12.4 INSURANCE. SYNOVICS and FAI shall each obtain and maintain at
all times during the Term, Commercial General Liability Insurance, including
Products Liability Insurance, with insurance carriers having an A.M. Best rating
of A- VII or better, with limits for SYNOVICS of not less than [*] per
occurrence and [*] in the aggregate, or self-insurance, in either case to cover
its indemnification obligations under SECTION 12.2 hereof and for FAI of not
less than [*] per occurance and [*] in the aggregate for General Liability and
[*] per occurance for Completed Operations Liability Insurance. Each party shall
furnish the other with a certificate of insurance evidencing said coverage.
12.5 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THIS AGREEMENT, COMPOUNDS OR
THE PRODUCTS, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR
OTHERWISE, EVEN IF SUCH PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES;
PROVIDED, HOWEVER, that the foregoing shall not be construed to limit either
Party's indemnification obligations under SECTION 12.
13. CONFIDENTIALITY.
13.1 NONDISCLOSURE OBLIGATION. In carrying out rights and
obligations under this Agreement, the Parties will share proprietary information
and data ("CONFIDENTIAL INFORMATION") with each other. A Party receiving
Confidential Information under this Agreement ("RECIPIENT") from the other
disclosing Party ("DISCLOSER") shall maintain such Confidential Information as
follows: During the Term and for a period of five (5) years following expiration
or termination of this Agreement, the Recipient agrees: (a) not to use such
Confidential Information for any purpose other than in connection with the
purpose of carrying out its rights and obligation under this Agreement; (b) to
treat such Confidential Information as it would its own information of the same
nature and importance, and in any event, to use no less than a reasonable degree
to care to protect the proprietary nature of such Confidential Information; and
(c) to take all reasonable precautions to prevent the disclosure of such
Confidential Information to any Third Party without the prior written consent of
the Discloser.
13.2 EXCEPTIONS. A Recipient's obligations regarding Confidential
Information shall not apply to information that:
(a) was known to the Recipient prior to receipt hereunder
as demonstrated by ▇▇▇▇▇▇▇▇▇'s written records in existence at the time of
disclosure by the Discloser;
25
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
(b) at the time of disclosure by the Discloser to the
Recipient, was generally available to the public, or which after disclosure
hereunder becomes generally available to the public through no fault
attributable to the Recipient;
(c) is hereafter made available to the Recipient for use
and unrestricted disclosure by the Recipient from any Third Party having a right
to do so; or
(d) is generated by the Recipient by its employees or
contractors who have not had access to or knowledge of the Confidential
Information disclosed hereunder, as demonstrated by Recipient's written
records;.
13.3 AUTHORIZED DISCLOSURES.
(a) Nothing in this Agreement shall prohibit disclosure
by a Party of Confidential Information to its sublicensees, consultants,
advisors, clinical investigators and contract manufacturer, if any, but only on
a need-to-know basis for purposes provided for in this Agreement; PROVIDED that
such disclosure occurs pursuant to a written confidentiality agreement
containing provisions substantially as protective as those of this SECTION 13.
(b) The restrictions set forth in this Section shall not
prevent disclosure pursuant to a law, regulation, rule, act or order of any
governmental authority or agency; provided that the Recipient gives the
Discloser prompt prior notice in order to permit an opportunity to seek a
protective order or other similar order with respect to such Confidential
Information, and thereafter the Recipient discloses to the requesting entity
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 Discloser.
13.4 RETURN OF INFORMATION. If this Agreement is terminated for any
reason, then each Party, upon the request of the other Party, shall return to
such other Party all copies of Confidential Information received from such other
Party hereunder; PROVIDED, HOWEVER, that each Party's legal counsel may retain
one copy of such Information in a secure location solely for purposes of
determining such Party's continuing obligations hereunder. Notwithstanding the
foregoing, this Section 13.3 shall not apply to any Results provided to FAI
under SECTION 11.5.
13.5 PUBLICITY; PRESS RELEASE. The Parties shall issue a mutually
agreed upon joint press release promptly following the Effective Date. FAI and
▇▇▇▇▇▇▇▇ will jointly discuss and agree in writing on any statement to the
public regarding this Agreement or any aspect of this Agreement, subject in each
case to disclosure otherwise required by law or regulation or any listing or
trading agreement concerning its publicly traded securities as determined in
good faith by each Party. When a Party elects to make any such statement it will
give the other Party at least five (5) day's prior notice (unless disclosure is
required by law, or any listing or trading agreement
26
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
concerning its publicly traded securities, in a shorter period of time) to the
other Party to permit review and comment on such statement. Notwithstanding the
foregoing, either Party shall have the right to publicly disclose information
regarding this Agreement or the Parties' activities hereunder, to the extent
such information has already been made publicly available in a manner consistent
with this SECTION 12.5.
14. MISCELLANEOUS.
14.1 FORCE MAJEURE. Neither Party shall be liable to the other for
delay or failure in the performance of the obligations on its part contained in
this Agreement if and to the extent that such failure or delay is due to
circumstances beyond its reasonable control (including, without limitation,
FAI's inability to obtain from a Third Party materials needed for the
manufacture Products in sufficient quantities to meet its supply obligations
under SECTION 7.1). The affected Party shall notify the other Party promptly
should such circumstances arise, giving an indication of the likely extent and
duration thereof, and shall use all Commercially Reasonable Efforts to resume
performance of its obligations as soon as practicable.
14.2 ASSIGNMENT. This Agreement shall not be assignable or
transferred in part or in whole by any Party without the prior written consent
of the other; provided, however, that either Party, without notice and at any
time for any reason, may assign or transfer this Agreement in whole or in part
to (a) any of its Affiliates who agree to be bound by the terms and conditions
of this Agreement or (b) any successor of such Party as part of consolidation or
merger, corporate reorganization or sale of all or substantially all of its
business assets to which this Agreement relates.
14.3 NO WAIVER. The failure of either Party to require performance
by the other Party of any of that other Party's obligations hereunder shall in
no manner affect the right of such Party to enforce the same at a later time. No
waiver by any Party hereto of any condition, or of the breach of any provision,
term, representation or warranty contained in this Agreement, whether by conduct
or otherwise, in any one or more instances, shall be deemed to be or construed
as a further or continuing waiver of any such condition or breach, or of any
other condition or of the breach of any other provision, term, representation or
warranty hereof.
14.4 SEVERABILITY. If a court or other tribunal of competent
jurisdiction should hold any term or provision of this Agreement to be
excessive, or invalid, void or unenforceable, the offending term or provision
shall be deleted or revised to the extent necessary to be enforceable, and, if
possible, replaced by a term or provision which, so far as practicable achieves
the legitimate aims of the Parties.
14.5 RELATIONSHIP BETWEEN THE PARTIES. Both Parties are independent
contractors under this Agreement. Nothing herein contained shall be deemed to
create an employment, agency, joint venture or partnership relationship between
the Parties hereto or any of their agents or employees, or any other legal
arrangement that would
27
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
impose liability upon one Party for the act or failure to act of the other
Party. Neither Party shall have any express or implied power to enter into any
contracts or commitments or to incur any liabilities in the name of, or on
behalf of, the other Party, or to bind the other Party in any respect
whatsoever.
14.6 CORRESPONDENCE AND NOTICES.
(a) ORDINARY NOTICES. Correspondence, reports,
documentation, and any other communication in writing between the Parties in the
course of ordinary implementation of this Agreement shall be delivered by hand,
sent by facsimile, or by airmail to the employee or representative of the other
Party who is designated by such other Party to receive such written
communication.
(b) EXTRAORDINARY NOTICES. Extraordinary notices and
communications (including, without limitation, notices of termination, force
majeure, material breach, change of address) shall be in writing and delivered
to the addressees identified below by hand or sent by nationally recognized
overnight delivery service, prepaid registered or certified air mail, or by
facsimile confirmed by any of the foregoing means, and shall be deemed to have
been properly served to the addressee upon receipt of such written
communication.
If to FAI:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
Fluid Air, Inc. doing business as PharmPro
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇ ▇▇▇ ▇▇▇▇
If to SYNOVICS:
▇▇▇▇▇▇ ▇▇▇▇, CEO
Synovics Laboratories Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇ ▇▇▇ ▇▇▇▇
14.7 GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of Delaware, excluding any choice of law rules that
may direct the application of the law of another jurisdiction.
14.8 DISPUTE RESOLUTION. The Parties recognize that a bona fide
dispute as to certain matters may from time to time arise during the Term.
Unless otherwise set forth in this Agreement, in the event of such a dispute
either Party may, by written notice to the other Party, have such dispute
referred to their respective officers (designated
28
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
below) or their successors or designees for attempted resolution by good faith
negotiations within thirty (30) calendar days after such notice is received.
Said designated officers are as follows:
For FAI: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
For SYNOVICS: ▇▇▇▇▇▇ ▇▇▇▇, CEO
If the designated officers are not able to resolve such dispute through good
faith negotiations within such thirty (30) calendar day period, either Party may
have the given dispute settled by binding arbitration in the manner described
below:
(a) ARBITRATION REQUEST. If a Party intends to begin an
arbitration to resolve a dispute arising under this Agreement, such Party shall
provide written notice (the "ARBITRATION REQUEST") to the other Party of such
intention and the issues for resolution. From the date of the Arbitration
Request and until such time as the dispute has become finally settled, the
running of the time periods as to which Party must cure a breach of this
Agreement becomes suspended as to the subject matter of the dispute.
(b) ADDITIONAL ISSUES. Within ten (10) business days
after the receipt of the Arbitration Request, the other Party may, by written
notice, add additional issues for resolution.
(c) NO ARBITRATION OF PATENT/CONFIDENTIALITY ISSUES.
Unless otherwise agreed by the Parties, disputes relating to patents and
non-disclosure, non-use and maintenance of Confidential Information shall not be
subject to arbitration, and shall be submitted to a court of competent
jurisdiction.
(d) ARBITRATION PROCEDURE. Discovery shall be under the
local rules of evidence of the jurisdiction under which arbitration occurs. The
Arbitration shall be held under the rules of the American Arbitration
Association. The Arbitration shall be in English, using three (3) independent
arbitrators. Each Party shall select one independent arbitrator within forty
five (45) days of the Arbitration Request, and the two (2) arbitrators selected
by the Parties shall select the third independent arbitrator within ninety (90)
days after the Arbitration Request.
The arbitrators may award any remedy allowed by law, excluding punitive damages
and attorneys' fees. Promptly after rendering a decision, the arbitrators shall
issue to both Parties a written opinion of the findings of fact and conclusions
of law. The decision of the arbitrators shall be binding upon the Parties
without the right of appeal. Either Party may enter a judgment upon the decision
rendered by the arbitrators in any court having jurisdiction thereof.
The Parties shall share equally the reasonable documented cost of such
Arbitration procedure. Each Party shall bear its own cost in participating in
such proceeding.
29
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
14.9 ENTIRE AGREEMENT; AMENDMENT. This Agreement, including its
exhibits, sets forth the complete, final and exclusive agreement between the
Parties and supersedes and terminates all prior and contemporaneous agreements
and understandings between the Parties, whether oral or in writing, relating to
the subject matter hereof. No subsequent alteration, amendment, change, waiver
or addition to this Agreement shall be binding upon the Parties unless reduced
to writing and signed by an authorized officer of each Party.
14.10 HEADINGS. The headings and captions used in this Agreement are
solely for the convenience of reference and shall not affect its interpretation.
14.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be an original and all of which shall
constitute together the same document.
14.12 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all other acts, as may be necessary
or appropriate in order to carry out the purposes and intent of this Agreement
including, without limitation, any filings with any antitrust agency which may
be required.
IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized representatives of the Parties as of the date set forth below.
FLUID AIR INC., DOING BUSINESS AS PHARMPRO SYNOVICS LABORATORIES INC.
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------- ---------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: President Title: CEO
30
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
EXHIBIT "A"
FAI PATENT RIGHTS
[*]
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
EXHIBIT "B"
PRODUCT DEVELOPMENT PLAN
[*]
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
EXHIBIT "C"
COMMERCIAL MANUFACTURING QUALITY AGREEMENT
This Commercial Manufacturing Quality Agreement, dated as of this 11th
day of APRIL, 2007 (together with the Appendixes attached hereto, this
"AGREEMENT"), defines the duties of, Fluid Air, Inc. DBA PharmPro, an Illinois
corporation, ("FAI"), and Synovics Laboratories Inc., a Nevada corporation
("SYNOVICS"), for the contract pharmaceutical manufacture of the "Product" as
defined in that certain LICENSE AND SUPPLY AGREEMENT ("LSA") dated April 11,
2007, by and among FAI and SYNOVICS. In particular, this Agreement is intended
to clearly state which party is responsible for the cGMP (defined below) aspects
of Manufacturing (defined below) the Product, and specify the way in which
PharmPro shall ensure that the Product complies with the approved Specifications
per the LSA and the Marketing Authorizations (defined below).
This Agreement takes the form of a detailed checklist of all the
activities associated with pharmaceutical production, analysis, release and
distribution. Responsibility for each activity is assigned to FAI, SYNOVICS, or
both in the appropriate box in the Responsibility Delegation Checklist attached
hereto as Appendix A.
In order to provide better quality assurance, each party shall perform
the activities defined herein as its responsibility in accordance with Standard
Operating Procedures (defined below) to the extent that a Standard Operating
Procedure is applicable to such activity. In the event of a conflict between the
terms of this Agreement and a Standard Operating Procedure, the Standard
Operating Procedure shall control.
This Agreement is incorporated in and subject to the terms of the LSA.
In the event of a conflict between this Agreement and the LSA, the LSA shall
control. This Agreement shall automatically terminate upon any termination of
the LSA.
This Agreement is intended to comply with the guidance and directives
set forth in the cGMPs, as applicable, establishing certain principles and
guidelines of good manufacturing practice for medicine products for human use.
The contact information for the Quality Assurance Representative from
each party is set forth on Appendix B attached hereto. In the event of any
controversy or claim arising out of, relating to or in connection with any
provision of this Agreement, or the rights or obligations of the parties
hereunder, the Quality Assurance Representatives from each party shall try to
settle their differences amicably between themselves. If the Quality Assurance
Representatives are unable to resolve such disputed matter within thirty (30)
days of initiating such negotiations, the dispute shall be referred to at least
one member of senior management of each of the parties. If the members of senior
management are unable to resolve such disputed matter within thirty (30) days of
initiating such negotiations, then either party may seek a remedy under Section
14.8 of the LSA.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
Capitalized terms used in this Agreement, but not otherwise defined,
shall have the same meaning ascribed to them in the LSA. In addition, for
purposes of this Agreement, the following definitions shall apply:
A. "API" means the active pharmaceutical ingredient used in the
Manufacture of the Product as identified in the Specifications.
B. "APPLICABLE LAWS" means all laws, ordinances, rules and regulations
within the Territory applicable to the Manufacturing of Product and the
obligations of PharmPro or SYNOVICS thereunder, as the context
requires, including, without limitation, (i) all applicable federal,
state and local laws and regulations of the Territory including without
limitation the U.S. Federal Food, Drug and Cosmetic Act, and (ii) the
cGMPs.
C. "DEVIATION/FAILURE" means any OOS result and/or any manufacturing,
packaging, labeling or testing deviation that affects the Product.
D. "FACILITIES" means the PharmPro manufacturing facility located in
Aurora, Illinois or such other facility as agreed upon by the parties.
E. "FDA" means the Food and Drug Administration or any successor agency.
F. "cGMPS" means the current Good Manufacturing Practices for finished
pharmaceuticals promulgated by the FDA, as amended from time to time.
G. "MARKETING APPLICATION" means an application for marketing
authorization which has not yet been approved by the FDA or other
Regulatory Authority, including without limitation, FDA New Drug
Application, FDA Abbreviated New Drug Application and other similar
marketing applications promulgated by Regulatory Authorities.
H. "MANUFACTURE" or "MANUFACTURING" means to process, produce, package,
label and test the Product in accordance with the Specifications and
the terms and conditions set forth in the Contract Service Agreement
and this Agreement.
I. "MARKETING AUTHORIZATIONS" means any approved application for marketing
authorization, including without limitation, FDA New Drug Application,
FDA Abbreviated New Drug Application, and other similar marketing
authorizations promulgated by Regulatory Authorities.
J. "OOS" means Out-Of-Specification.
K. "PRODUCT" means the Product identified on the first page of this
Agreement.
L. "REGULATORY AUTHORITY" means any governmental or regulatory body, court
or arbitrator, including the U.S. Environmental Protection Agency and
the FDA.
M. "SPECIFICATIONS" means the procedures, requirements, standards, quality
control testing, other data and scope of services set forth in the LSA.
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
2
N. "STANDARD OPERATING PROCEDURES" or "SOPS" shall mean the standard
operating procedures in effect at PharmPro which have been approved by
the PharmPro Quality Assurance department and which are applicable to
the Manufacturing.
O. "TERRITORY" means the United States and its territories and
possessions, including Puerto Rico.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
3
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the date first stated above.
SYNOVICS LABORATORIES, INC.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: CEO
FLUID AIR, INC., doing business as PHARMPRO
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
[CONFIDENTIAL GRAPHIC]
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
APPENDIX A
RESPONSIBILITY DELEGATION CHECKLIST
[*]
[CONFIDENTIAL GRAPHIC]
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.
APPENDIX B
QUALITY ASSURANCE REPRESENTATIVES
CONTACT INFORMATION
FOR SYNOVICS:
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▇▇▇▇▇▇ ▇▇▇▇, CEO
Synovics Laboratories Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: ▇▇▇ ▇▇▇ ▇▇▇▇
FOR PHARMPRO:
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▇▇▇ ▇▇▇▇▇▇▇▇
Vice President - Operations
Phone: ▇▇▇-▇▇▇-▇▇▇▇, Ext. 112
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.