Back to top

LICENSE AND SUPPLY AGREEMENT

IP Intellectual Property License Assignment Agreement

LICENSE AND SUPPLY AGREEMENT | Document Parties: FLUID AIR INC | SYNOVICS LABORATORIES INC You are currently viewing:
This IP Intellectual Property License Assignment Agreement involves

FLUID AIR INC | SYNOVICS LABORATORIES INC

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: LICENSE AND SUPPLY AGREEMENT
Date: 5/7/2007
Industry: Biotechnology and Drugs     Sector: Healthcare

LICENSE AND SUPPLY AGREEMENT, Parties: fluid air inc , synovics laboratories inc
50 of the Top 250 law firms use our Products every day

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 2550 White Oak Circle, Aurora, Illinois,
60502 (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 450, 2575 E. Camelback Rd, Phoenix, Arizona, 85016 (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


<PAGE>

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.
<PAGE>

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.
<PAGE>

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 Hart-Scott-Rodino 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.
<PAGE>

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.
<PAGE>

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.
<PAGE>

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.
<PAGE>

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 SYNOVICS.

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. FAI 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.
<PAGE>

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.
<PAGE>

(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.
<PAGE>

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.
<PAGE>

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.
<PAGE>

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:

Thomas E. Tappen, Vice President
Fluid Air, Inc. doing business as PharmPro
2550 White Oak Circle
Aurora, IL 60502
Facsimile No.: 630-851-1244
Email: tet@fluidairinc.com


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.
<PAGE>

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 neces


 
SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)


Try our advanced search >>
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates
Email:
This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more