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 This Manufacturing Agreement involves

ADAMIS PHARMACEUTICALS CORP | Adamis Pharmaceuticals Corporation | Beximco Pharmaceuticals Ltd

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Date: 2/15/2011
Industry: Biotechnology and Drugs     Sector: Healthcare

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Adamis Pharmaceuticals Corporation 10-Q


Exhibit 10.16





















Adamis Pharmaceuticals Corp., USA






Beximco Pharmaceuticals Ltd., Bangladesh










Page 1 of 23




This agreement is entered into on the 1st day of November, 2010




BEXIMCO PHARMACEUTICALS LTD., a public limited company established according to the laws of the Peoples’ Republic of Bangladesh with its head office located at 17, Dhanmandi R/A, Road No. 2, Dhaka, Bangladesh (hereinafter referred to as BEXIMCO , which expression shall unless repugnant to the context shall include its successors and permitted assigns).




ADAMIS Pharmaceuticals Corp. , a company registered and established according to the laws of USA having its office at 2658 Del Mar Heights Rd. Suite 555, Del Mar, California, 92014, USA   (hereinafter referred to as ADAMIS , which expression shall unless repugnant to the context shall include its successors and permitted assigns).


witnesseth as follows



BEXIMCO is engaged in the manufacturing of pharmaceutical finished dosage forms and bulk raw materials (APIs) and marketing of those PRODUCTS both at home and abroad.



ADAMIS is willing to authorize BEXIMCO to manufacture certain pharmaceutical products for the United States of America (USA) hereinafter referred to as the TERRITORY.



BEXIMCO is interested to manufacture certain pharmaceutical products for ADAMIS in its facilities at Tongi, Gazipur, Bangladesh.


Now therefore, the parties in consideration, premises and covenants hereto agree as follows:


1.           DEFINITIONS



In this Agreement (including the recitals above) the following terms will have the meanings set out below:


Certificate of Analysis ” is a document, which is signed and dated by a duly authorised representative of the manufacturer of a Product certifying that that Product conforms to the Product Specification;


Confidential Information ” will mean and include all information which may be disclosed by one party to the other party either pursuant to this Agreement including but not limited to information disclosed pursuant to clause 13.1 or pursuant to any preceding agreement concerning the Products, and any technology, marketing strategies and business of the disclosing party relating directly or indirectly to the Products but does not include information which the other party can show:



either is or becomes available to the public other than as a result of disclosure by the other party;




Page 2 of 23




at the time of receipt is already in the possession of the other party or becomes lawfully available to the other party on a non-confidential basis from a third party entitled to make that disclosure; or



is independently developed by the other party without reference to Confidential Information received hereunder, as evidenced by the other party's own records.


" Formulation " is the formulation of the Products;


" GMP " is the Code of Good Manufacturing Practice in the Territory, any requirements of the relevant regulatory authority in the Territory for the Marketing Authorisation, and the requirements of any GMP licence granted to a Manufacturer of a Product in the country of manufacture of the Products;


GMP Agreement ” is the agreement specified in Annexure 2;


" Independent Analyst " is an analyst qualified to analyse the Product and appointed by agreement between the parties;


Intellectual Property Rights ” includes all rights and interests, vested or arising out of any patent, copyright, design, trade mark, trade secrets, goodwill or Confidential Information rights whether arising by common law or by statute or any right to apply for registration under a statute in respect of those or like rights;


" Marketing Authorisation " is the grant of registration approval from the relevant regulatory authority in the Territory for the importation, storage, promotion, sale or other distribution of the Products;


“Products ” mean those Pharmaceutical Products with label, leaflet and carton as listed in Annexure-1 with indications to the generic name, pharmaceutical form and strength, and pack sizes. Such list may be amended from time to time on mutual agreement. The operations to be carried out by BEXIMCO under this Agreement shall be indicated next to the products.


 “ Product Specification ” is, in relation to a Product, per Annexure 1;


  “Quality Control” shall mean that part of GMP dealing with sampling, specifications, and testing as well as organization, documentation and release procedures. “ Term ” means the period of this Agreement described in clause 17.1;


Territory ” means the United States of America or USA and any other territory that may be subsequently agreed upon in writing by the parties, provided that the terms and conditions herein will apply with the necessary amendments being made to this Agreement.



In this Agreement, unless the context otherwise requires:




Headings and under linings are for convenience only and do not affect the interpretation of this Agreement;




Words importing the singular include the plural and vice versa;




Words importing a gender include any gender;




A reference to a part, clause, party, annexure, exhibit or schedule is a reference to a part, clause, party, annexure, exhibit or schedule to, this Agreement; and




A reference to a person includes any individual or individuals, corporation, partnership or other body, entity or other legal person.



Page 3 of 23







Subject to the terms and conditions of this Agreement, BEXIMCO agrees to support commercialization of certain Products for ADAMIS and to contract manufacture these products for ADAMIS, listed in Appendix 1



The manufacturing of the Products shall be carried out at BEXIMCO’s premises at Tongi, Gazipur, Bangladesh.






For existing formulations of BEXIMCO, ownership will remain with BEXIMCO. For any newly developed formulation(s) ownership will be determined after mutual discussion.



BEXIMCO and ADAMIS will contribute their efforts and cooperate in activities related to assessment of regulatory issues, product definition and analysis relating to the Products for the Territory.




BEXIMCO will contribute its knowledge in development, regulatory, pharmaceutical / laboratory science and manufacturing capabilities necessary to commercialize the Products.



BEXIMCO will provide for and oversee raw materials and primary packaging materials (where applicable) sourcing, manufacturing, and provide contract management for suppliers.




ADAMIS will conduct or oversee clinical research studies, product testing necessary to obtain market clearance/regulatory approvals for Products, and additional indications as applicable.



ADAMIS will ensure all Intellectual Property, regulatory and registration requirements are satisfactorily addressed for the Territory.




When a third party involvement is necessary, such involvements will be discussed mutually, including costs sharing matters and needs to be approved by both BEXIMCO & ADAMIS.






ADAMIS will be responsible for the regulatory dossier development, USFDA interactions including filings. Beximco will be responsible for site inspections required by the FDA or other governing body.  Adamis will require support and data from Beximco to complete the dossier.  Adequate support will be provided by Beximco at agreed upon rates.



ADAMIS will be responsible for the payment of annual fees and charges payable in respect of receiving and maintaining the Marketing Authorisations for the Products and other costs related to any variation of a Marketing Authorisation for the Products. ›



BEXIMCO warrants that all information supplied to ADAMIS in relation to the Products is true to the best of BEXIMCO’s knowledge after all due enquiries and that it is legally entitled to supply this information to ADAMIS.



BEXIMCO warrants that BEXIMCO will maintain any GMP licence granted to it under any scheme in the United States of America or Australia or any scheme recognised by the USFDA and will use reasonable endeavours to promptly provide ADAMIS with evidence of this when requested by ADAMIS to do so.




Page 4 of 23







ADAMIS will bear the expense of regulatory filings including any clinical studies performed for the purpose of obtaining regulatory clearance or approval for marketing of the Products. This may be decided on a product by product basis



ADAMIS will bear the expense of all studies and development activities required for the purpose of obtaining regulatory clearance or approval for marketing of the Products in the Territory. However, this agreement may change with changes to individual product agreements.




In the case of newly formulated drug products i.e., truly novel formulations, BEXIMCO will bear cost and retain ownership of any patent specific to the drug unless parties agree to a separate development and cost-sharing agreement pertaining to such new drug(s).




ADAMIS and BEXIMCO will agree on a transfer price (CIF) for the Products supplied on a contract manufacturing basis.  ADAMIS  shall open irrevocable Letter of Credit at sight in favor of BEXIMCO, payable at 30 days from the date of the shipment for required Products as per mutually agreed price list and BEXIMCO would supply to ADAMIS the Products in accordance with the irrevocable letter of credit opened by ADAMIS.




Any price change with respect to a Product will be determined by written agreement between the parties following an annual review of prices.




ADAMIS will pay for any royalties from the utilization of any third parties formulation/Intellectual Property or Patents (if necessary).




Title in respect of the Products shipped under this Agreement shall pass from BEXIMCO to ADAMIS upon BEXIMCO’s receipt of full payment in respect thereof and risk in the Products will pass on delivery.






BEXIMCO will maintain stocks of Products as agreed upon by both parties.



After the grant of the Marketing Authorisation by USFDA, ADAMIS will provide BEXIMCO with an initial schedule of its anticipated requirements for the Products for the remainder of the then current calendar year and thereafter on an annual basis for each succeeding calendar year by 30 September, provided however that ADAMIS may provide BEXIMCO with amendments to any such schedule on a quarterly basis.  Such schedules are estimates only and do not constitute firm orders. ADAMIS shall have the right to revise the forecast in accordance with the market situation informing BEXIMCO, 90 days in advance. But any firm order, for which Beximco has already commenced manufacturing, cannot be cancelled and will be paid for in full by ADAMIS.



ADAMIS will place written orders for the Products with BEXIMCO, specifying quantities (which must be in accordance with the batch sizes for a Product set mutually by both parties), Product Mix and delivery dates (not being less than 90 days in advance and preferably no less that 120 days in advance) and BEXIMCO will be deemed to have confirmed these if advice to the contrary, in writing, is not received by ADAMIS within 10 days. After confirmation by BEXIMCO, ADAMIS shall not be entitled to cancel such written orders but may reschedule if  Beximco has not commenced manufacturing of the batch.



BEXIMCO will use its reasonable endeavours to supply or arrange the supply of the ordered quantities of Products by the confirmed delivery dates.



The supply of the Products will be CIF to a single location point in USA as specified at the time of ordering.




Page 5 of 23




ADAMIS will bear all expenses related to tax, customs clearance, storage, transportation, maintenance and delivery of PRODUCTS in the Territory.



In case of any adverse conditions affecting the supply or delivery of any Products to ADAMIS, BEXIMCO will immediately inform ADAMIS of the same and ADAMIS shall grant reasonable time for BEXIMCO to supply the Products.



BEXIMCO will supply a Certificate of Analysis with each delivery of the Products.






BEXIMCO warrants that all quantities of the Products supplied by BEXIMCO to ADAMIS pursuant to this Agreement will:




Conform in all respects to the Product Specification; and




Be of merchantable or satisfactory quality; and




Upon delivery at Bangladesh port, have a shelf life, which is at least 75% of the longest registered shelf life for the Products in the Territory.



BEXIMCO and ADAMIS agree to execute the GMP Agreement after the execution of this Agreement. Said Agreement will be attached hereto as Annexure 2.



BEXIMCO will supply ADAMIS with adequate written directions concerning suitable conditions for storage and transportation of the Products and ADAMIS represents it will store and transport the Products materially in accordance with those directions.



If the Product is to be supplied unpackaged, BEXIMCO will supply ADAMIS with adequate written directions concerning the packaging of the Products and ADAMIS represents it will materially accord with those directions and pack the product at a USFDA approved facility.



In the event that either of the parties becomes aware of any defect in the Products or that the Products are unsuitable for the use designated in the Market Authorisation, it will immediately notify the other party and provide them with a full disclosure of that defect or unsuitability.



ADAMIS assumes all risk of loss and indemnifies and holds harmless BEXIMCO and its employees, agents successors and assigns from and against any and all loss, liability, damage, fee, cost, expense, suit, claim, demand, judgement and prosecution directly or indirectly arising from or incidental to or resulting solely from the storage and distribution and sale of the Products by ADAMIS or its employees, agents successors and assigns EXCEPT where such liability arises out of the Formulation, the manufacture of the Products or the storage of the Products by ADAMIS in accordance with the written directions detailed in  clause 7.4.



Notwithstanding clause 7.7, where any defect or unsuitability in the Products arises either partially or wholly as a result of a defect or unsuitability in raw material supplied to BEXIMCO by a third party, BEXIMCO will use its reasonable endeavours to have the third party conform to any demands of the regulatory authority concerning the defect.



BEXIMCO will not assume any risk of loss, liability, damage, fee, cost, expense, suit, claim, demand, judgement and prosecution directly or indirectly arising from or incidental to any defect or unsuitability in the Product arising either partially or wholly as a result of tampering by any person after delivery to ADAMIS’s nominated warehouse.




Page 6 of 23







ADAMIS will plan and execute product launch and ongoing marketing activity, including introduction into wholesale distribution channels, detailing to pharmacies and clinicians, and marketing to managed care organizations, government entities, and other payors.



 ADAMIS will arrange for co-promotion and/or license to sub-distributors as desirable in the judgment of ADAMIS management, in consultation with BEXIMCO for the purpose of expanding the market presence or ability to reach specific physician specialties.




ADAMIS will put efforts to evaluate market opportunity for the Products, including defining candidate medications, defining marketing strategy, including identifying targeted clinical indications, product naming and branding strategy, and product pricing, promotion and sales strategy.




ADAMIS shall make no representation to any person about the Products that is false or misleading in any material particular.  In no event will the ADAMIS make any representation beyond those contained in the Product claims or supporting material supplied by BEXIMCO.




Each party warrants that it has in place from a reputable insurer product liability insurance covering the party’s respective products with limits of not less than $5 million USD in aggregate. Requirements for insurance levels will increase as products are introduced and approved for marketing and sales in the US.  Insurance requirements should be reviewed on an annual basis by each party.  Each party shall promptly deliver a certificate of insurance to the other party upon the other party’s written request.  Further, a party shall, during the Term of this Agreement, promptly notify the other party of the cancellation or lapse of said insurance. If the party fails to rectify the same within thirty (30) calendar days after notice from the other party, any such failure shall be deemed a material breach of this Agreement.






The obligations of the parties for when an adverse drug event occurs are set out in Annexture 3.






If a law applicable in the Territory requires that any quantity of the Products should be recalled by ADAMIS for any reason, ADAMIS will give to BEXIMCO written notice of its intention to recall that quantity and specify its reasons for the need to carry out the recall, including by providing copies of documents of a competent Authority requiring the recall.



If within 7 days of the receipt of the notice the parties are unable to agree upon the need to carry out the recall, the parties agree to submit a sample of the Product to an Independent Analyst for a report.  The determination of the Independent Analyst shall be binding upon the parties.



The cost of the report of the Independent Analyst will be paid by the party against which the report is unfavourable.



Notwithstanding clauses 10.1 to 10.3, ADAMIS may recall that quantity of Products at any time and will administer any such recall in the Territory at its own cost.



Notwithstanding anything to the contrary herein, in the event that the sole reason for recall of the Products is that the Products do not conform with the Product Specification due to storage or transport of the Products by ADAMIS or its affiliates or delegates which is not in accordance with the written directions given to ADAMIS under clause 8.4, then ADAMIS will be liable for the cost of the recall and any replacement quantities of Products.




Page 7 of 23







BEXIMCO warrants that at the time of delivery all Product manufactured and supplied under this Agreement shall meet the Specification, be manufactured and supplied in accordance with cGMP and will be free of defects in material and workmanship.



With regard to the Product, ADAMIS’s sole remedy for breach of the warranty in clause 11.1 above shall be at ADAMIS’s determination either a full refund or that BEXIMCO will as soon as is reasonably practicable, and without charge to ADAMIS, repair or (at BEXIMCO’s option) replace Products which are proven to the reasonable satisfaction of BEXIMCO to not conform with the Specification. This obligation will not apply where:




The Products have been improperly altered in any way whatsoever, or have been subject to misuse or unauthorized repair;




Any instructions as to storage of the Products have not been complied with in all respects; or





ADAMIS has failed to notify BEXIMCO in writing of any defect or suspected defect within 30 days of delivery of Products.



BEXIMCO agrees to indemnify ADAMIS from and against all losses, claims, demands, cost (including any costs incurred from return of defective Products) and other reasonable legal fees incurred by ADAMIS or arising from any injury to any person as a result of any breach by BEXIMCO of the warranty in clause 11.1, provided that ADAMIS (i) promptly gives BEXIMCO written notice of such claim, (ii) neither negotiates nor makes any settlement of nor makes any admission in relation to such claim and (iii) provides reasonable assistance (at BEXIMCO’s cost) to BEXIMCO to defend or settle such claim.



BEXIMCO does not exclude its liability (if any) to ADAMIS:




For personal injury or death resulting from BEXIMCO’s negligence;





For any matter for which it would be illegal for BEXIMCO to exclude or to attempt to exclude its liability; or




For fraud.



Except as expressly provided otherwise in clause 11.2 , BEXIMCO will be under no liability to ADAMIS whatsoever (whether in contract, tort (including negligence), breach of statutory duty, restitution or otherwise) for any of the following losses or damage (whether such losses or damage were foreseen, foreseeable, known or otherwise):  loss of revenue, loss of actual or anticipated profits (including for loss of profits on contracts), loss of the use of money, loss of anticipated savings, loss of business, loss of opportunity, loss of goodwill, loss of reputation, loss of, damage to or corruption of data, or any indirect or consequential loss or damage howsoever caused.



The aggregate liability of BEXIMCO to ADAMIS with respect to all claims arising out of this Agreement with the exception of any claims made pursuant to clause 11.3 (or the subject matter hereof) during any period of 12 months either (a) during the period of this Agreement, and/or (b) after the termination or expiration of this Agreement, shall be limited to damages not exceeding the purchase price paid by ADAMIS for Products in 12 months preceding the date of any claim.



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Except as set out in clause 11.1 , BEXIMCO hereby excludes to the fullest extent permissible by law, all conditions, warranties and stipulations, express (other than those set out in this Agreement) or implied, statutory, customary or otherwise which, but for such exclusion, would or might subsist in favour of ADAMIS.






Up to two employees of ADAMIS or its authorised representatives will have the right, upon giving reasonable notice to BEXIMCO, to visit BEXIMCO's manufacturing plant in respect of Products specified in Annexure 1.  Unless for cause, ADAMIS may visit BEXIMCO’s manufacturing plant once a year for a maximum of two days each during normal business hours. During any such visit, ADAMIS will have the right to:




Inspect the manufacturing facilities;




Inspect quality control procedures; and




Inspect records and reports pertinent to the manufacture, quality control or transport of those of the Products manufactured by BEXIMCO.



BEXIMCO will permit the inspection by any relevant regulatory authority of the Territory, which is required, as part of the Marketing Authorisation, including the inspection of:




The manufacturing facilities;




Quality control procedures; and




Records and reports pertinent to the manufacture, quality control or transport of those of the Products manufactured by BEXIMCO



BEXIMCO warrants that for the duration of the Agreement, its manufacturing facilities for the Products comply with the regulatory requirements for the Marketing Authority of the Territory and GMP.



If in the manufacture of any of the Products BEXIMCO uses raw material supplied from a third party or sources Products from a third party, BEXIMCO will use all reasonable commercial endeavours to procure the agreement of that third party to permit the inspection by any relevant regulatory authority of the Territory, which is required as part of the Marketing Authorisation, including the inspection of the third party’s:




Manufacturing facilities;




Quality control procedures; and




Records and reports pertinent to the manufacture, quality control or transport of the   Products






If providing Product in packaged form, BEXIMCO will apply a trademark nominated by ADAMIS to such Product according to the directions and specifications provided by ADAMIS from time to time.



Other than as set out in this clause 12, BEXIMCO makes no warranty or representation in relation to the Intellectual Property Rights contained in the Product

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