Exhibit 10.1
AGREEMENT BETWEEN
VCG & A, INC.
AND
SYNOVICS PHARMACEUTICALS, INC.
This Agreement is entered into between VCG & A, Inc., a Delaware
corporation, in conjunction with Xxxxx Xxxxxx Beech (an independent consultant),
hereinafter mutually referred to as "VCG" and SYNOVICS PHARMACEUTICALS INC. A
NEVADA corporation, hereinafter called "COMPANY."
WHEREAS, COMPANY is in the business of marketing and selling pharmaceutical
products, and
WHEREAS, VCG is a health care marketing firm specializing in providing
general consulting for healthcare product launches, national account services,
managed care strategic planning, contracting support, marketing and promotional
campaigns, and COMPANY meetings for the managed care and trade channel
marketplace, which expertise VCG is willing to provide to COMPANY.
NOW, THEREFORE, IN CONSIDERATION OF THE COVENANTS AND UNDERTAKINGS SET
FORTH HEREIN, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HERETO AGREE AS
FOLLOWS:
VCG will provide services listed here as attachments, which are discussed
in detail in the following pages of this Agreement. Other projects may be added
to this Agreement with COMPANY'S consent and will be covered under the same
legalities which are discussed in detail in the following pages of this
Agreement.
1. TERMS AND CONDITIONS
TERM AND TERMINATION. THIS AGREEMENT SHALL BE EFFECTIVE AS OF FEBRUARY 1,
2007, THROUGH JULY 31, 2007 AND SHALL BE AUTOMATICALLY RENEWED FOR A
CONTINUING SIX (6) MONTH RENEWAL PERIOD UNLESS TERMINATED BY EITHER PARTY
BY PROVIDING SIXTY (60) DAYS NOTICE PRIOR THE END OF THE INITIAL TERM OR
SUBSEQUENT RENEWAL PERIOD, IN WRITING, TO THE OTHER PARTY, ADDRESSED AS
FOLLOWS:
VCG & A, INC.
000 XXXX XXXXXX
XX XXX 0000
XXXXXXXXX, XX 00000
OR
SYNOVICS PHARMACEUTICALS INC.
0000 XXXX XXXXXXXXX XXXX
XXXXX 000
XXXXXXX, XXXXXXX 00000
Upon the expiration or termination of this Agreement, VCG shall turn over
to COMPANY all of the work performed in connection with this Agreement
whether or not completed. Such work could include account records and
files, customer information, profiles and other material developed
specifically for COMPANY during the life of this agreement.
NOTICES. All notices or other communications required under this Agreement
shall be in writing and shall be sent via registered or certified mail,
return receipt requested, or by Federal Express or other nationally
recognized overnight courier service providing parcel tracking service to
the parties at the addresses set forth in this Agreement.
GOVERNING LAW. This Agreement shall be governed by the law of the State of
Delaware.
INDEMNIFICATION. VCG shall indemnify and hold COMPANY and its subsidiaries,
divisions, affiliates, directors, officers, shareholders ,employees,
representatives, successors and assigns harmless from any loss, cost, claim
or demand arising from any negligent or dishonest act, misrepresentation,
or error committed by VCG& A, its employees, agents and contractors arising
out of the performance or non-performance of its obligations hereunder. VCG
warrants that it will have and continue to have throughout the term of this
Agreement and for two (2) years thereafter adequate insurance to cover its
indemnification obligations as set forth above.
2. SCOPE OF WORK
VCG & ASSOCIATES hereby represents to COMPANY that VCG has the requisite
facilities, equipment and personnel with the requisite expertise,
experience, and skill, to render the consulting services and VCG shall so
render the consulting services, in a timely, competent and efficient
manner. VCG further represents that the consulting services to be provided
pursuant to this Agreement will represent VCG's best efforts and will be of
the highest professional standards and quality. VCG further represents that
VCG shall abide by all laws, rules and regulations that apply to the
performance of the consulting services, and, when on COMPANY'S premises,
VCG shall comply with COMPANY policies with respect to conduct of visitors.
3. WORKING RELATIONSHIP VCG is and shall be deemed an independent
contractor and not an agent or employee of COMPANY. VCG shall have no power
to bind or to contract for COMPANY, nor shall VCG hold itself out as having
such power or authority unless expressly provided the authority to do so.
During the term of this Agreement, VCG shall perform
consultation and other defined work as mutually agreed and provide services
to COMPANY as outlined herein.
VCG shall account for and report, and be liable for the payment of all
applicable federal and state income taxes, social security taxes, and all
other taxes due on payment received by VCG hereunder.
4. CONTROL OF WORK
All details concerning the performance of the work, including, but not
limited to: (a) the order of sequence of any individual task, (b) the time
of performance, (c) the place of performance, (d) the manner and the
methods implemented in completing the services described above shall be
subject solely to VCG's control, professional judgment and discretion,
consistent only with the requirements of the successful progress and timely
completion of the work that meets or exceeds COMPANY's requirements. VCG,
working in collaboration with COMPANY, shall choose the time and manner for
performance of each part of the work, according to VCG & A's own routines
and schedules, independent of COMPANY' operations and again, consistent
only with the requirements of the successful progress and timely completion
of the work that meets or exceeds COMPANY's requirements. In addition, VCG
will seek and take input from COMPANY regarding policy and operational
procedures, special projects, and meeting appropriate timelines. Nothing
herein shall operate or be construed to prevent COMPANY, during the term of
this Agreement, from suspending work under this Agreement from time to time
as the needs and interests of its business shall require. In the event of
such suspensions, COMPANY shall, within 30 days upon receipt promptly pay
VCG for all fees and expenses (as herein described below) earned or
incurred to the time of notification and as a result of such suspension.
5. FEES
FIXED FEES.
VCG and COMPANY are entering into a Management Consulting agreement whereby
VCG shall provide certain management skills and expertise to COMPANY. VCG
shall be retained on a monthly basis to provide services as outlined in
Attachment A.
COMPANY agrees to pay to VCG all fees pursuant to the payment structure for
the defined services for outlined on Attachment C.
All monthly retainer fees will be due to VCG on a monthly basis, and
payment from COMPANY will be due upon the 15th of each month following the
date of invoice. All other fees will be due 30 days from the date of
invoice otherwise subject to a 1% per month (12% per annum) penalty.
VARIABLE FEES.
[CONFIDENTIAL TREATMENT REQUESTED]
EXPENSE REIMBURSEMENT. COMPANY agrees to reimburse VCG for any reasonable
and necessary business and travel expenses incurred in the course of
performing the work described in Attachment A. Expenses eligible for
reimbursement shall include: travel, lodging, meals, telephone, printing,
postage, duplication, and any other specialty services required to complete
business on behalf of COMPANY. COMPANY shall only be responsible for
reimbursing those business and travel expenses that are covered by
COMPANY's Travel and Entertainment Policy currently in effect and subject
to change from time to time. Expenses will be handled on a pass-through
basis to include a 5% administrative fee. All invoices submitted by VCG for
reimbursement of business and travel expenses, shall be accompanied by a
copy of the original receipts and supporting documentation. Reimbursement
of business and travel expenses by COMPANY shall not be charged against the
project fee, retainer or other fees otherwise due and owing from COMPANY.
Expense reimbursement shall be made to VCG within thirty (30) days of
receipt and approval of said invoice and expense statements.
Unresolved disputes as to fees due and owing, or as to the quality and
quantity of work in question, shall be submitted to the dispute resolution
process of Section 10.
Note: Hotels - When traveling on behalf of COMPANY, VCG employees will stay
at moderately priced hotels (i.e., Marriott, Hilton, Hyatt, etc). Airline
tickets purchased will be for economy class.
6. VCG'S EMPLOYEES, AGENTS AND ASSISTANTS; RELEASE AND INDEMNIFICATION
The work will be performed primarily by VCG and VCG shall be responsible
for engaging its own employees, agents and assistants as VCG may require in
the completion of the work required by this Agreement. VCG shall retain
full responsibility for the hiring, management, direction, control and
compensation of said individuals. VCG shall maintain workers compensation
insurance coverage on all VCG employees performing work under this
Agreement. VCG hereby releases and shall indemnify COMPANY, its
subsidiaries and affiliates and their respective directors, officers,
employees, representatives and assigns from any and all liability for
damage to property or loss thereof, personal injury or death during the
term of this Agreement (and any extensions thereof) or thereafter,
sustained by VCG and any
employee, agent or subcontractor employed or engaged by VCG as a result of
performing work under this Agreement. From time to time COMPANY may elect
to assign its own employees or agents to work with VCG in the completion of
work under this Agreement; however, VCG shall have no management,
direction, control or other responsibility for employees or agents of
COMPANY so assigned.
For a period of two (2) years following termination of this Agreement by
either party, whether with or without cause, COMPANY shall not in any way
knowingly, directly or indirectly, for itself or in conjunction with any
other person, partnership, firm, corporation or other entity, (i) solicit
or divert away or attempt to solicit or divert any employee of VCG to
terminate his or her employment or engagement with VCG, or (ii) employ or
otherwise engage as an employee, independent contractor or otherwise any
person who is an employee or independent contractor of VCG or was such in
the six (6) months preceding the date of termination of this agreement.
7. NON-EXCLUSIVITY & CONFLICT OF INTEREST
Nothing in this Agreement shall operate or be construed to prevent VCG from
performing work or services for any other non-competing client or customer
during the term of this Agreement (and any extension thereof); provided
however, that nothing therein shall operate or be construed to permit,
excuse or authorize VCG's failure to duly and properly discharge the
obligations VCG has agreed to perform under this Agreement.
If during the term of this Agreement VCG is performing or proposes to
perform services for others that may directly or indirectly, conflict with
the interest of COMPANY, VCG shall immediately notify COMPANY. If in the
opinion of COMPANY, such services or proposed services constitute a
conflict of interest and such services are performed by VCG, COMPANY at its
election may terminate this Agreement with VCG. In the event of such
termination, COMPANY, shall, within 30 days upon receipt, promptly pay VCG
for all fees and expenses (as herein described below) earned or incurred to
the time of notification and as a result of such termination.
8. OWNERSHIP, DISCLOSURE AND TRANSFER OF DEVELOPMENTS
All written materials and other works which may be subject to copyright and
all patentable and un-patentable inventions, discoveries and ideas
(including but not limited to any computer software) which are made,
conceived, reduced to practice or written by VCG or VCG's employees during
the term of this Agreement, and after this Agreement expires or terminates,
and which are based upon the consulting services and/or projects completed
by VCG exclusively for COMPANY ("Developments") shall become COMPANY'S
property exclusively and shall be used by COMPANY as COMPANY deems
appropriate. The term "Developments" shall not include any of the foregoing
which are made, conceived, reduced to practice or written by VCG or VCG's
employees and which relate to VCG's business as a whole or to one or more
of VCG's other customers including, but not limited to, databases,
information about wholesale and retail pharmaceutical purchasers, market
trends, and like generic information. VCG, by signing this Agreement,
expressly agrees to COMPANY'S ownership of all developments. VCG agrees to
hold all developments confidential under Section 9 of this Agreement. VCG
shall disclose promptly to COMPANY each Development and, upon COMPANY'S
request and at COMPANY'S expense, VCG shall assist COMPANY, or anyone
COMPANY designates, in filing patent or copyright applications in any
county in the world. Each copyrightable work that is a development, to the
extent permitted by law, shall be, considered a work made for hire (as that
term is defined in U.S. Copyright Act 17 U.S.C. 101) and the authorship and
copyright of the work shall be in the COMPANY'S name. VCG shall execute, or
cause to executed by the inventor(s), all papers and do all things which
may be necessary or advisable, in the opinion of COMPANY, to prosecute such
applications and to vest in COMPANY or its designee, all the right title
and interest in and to the Developments. If, for any reason, VCG is unable
to effectuate a full assignment of any Development, VCG shall transfer to
COMPANY, or its designee, VCG's transferable rights, whether they be
exclusive or non-exclusive, or as a joint inventor or partial owner of the
development.
9. CONFIDENTIALITY
It is understood by the parties hereto that during the performance of the
consulting services and each separate project, VCG may receive from
COMPANY, or otherwise acquire, certain confidential, proprietary and/or
trade secret information which is the property of COMPANY ("Confidential
Information"). VCG hereby warrants and affirms that VCG shall neither use,
nor disclose to any third party, such Confidential Information for any
purpose other than as is specifically allowed by this Agreement. VCG shall
disclose such Confidential Information only to such of VCG's employees,
agents and contractors, who need to know such information to further the
purposes of this Agreement. VCG shall advise such employees, agents and
contractors of the confidential nature of the disclosed Confidential
Information and shall instruct such employees, agents and contractors to
take all necessary and reasonable precautions to prevent the unauthorized
use or disclosure thereof. Upon the expiration or termination of this
Agreement, VCG shall return to COMPANY all tangible forms of Confidential
Information, including any and all copies and/or derivatives of
Confidential Information made by VCG or VCG& A's employees in whatever form
or medium. VCG shall not disclose to any third party or otherwise make
public the terms of this Agreement except as necessary to secure
enforcement of the terms of this Agreement or in response to a lawful
subpoena - in the latter instance, VCG shall, prior to disclosure, provide
COMPANY with a copy of such subpoena and provide COMPANY with the
opportunity to file a motion for a protective order. The term "Confidential
Information", as used in this section and throughout the Agreement, shall
include all information given from COMPANY to VCG related to COMPANY
products or COMPANY business operations other than that information which
is : (i) in the public domain or which comes into the public domain through
no breach of this Agreement: (ii) information which is disclosed to VCG by
a third party who is not under obligation of confidentiality with COMPANY;
or (iii) information which VCG
can show by written records was previously known to VCG prior to disclosure
by COMPANY (and is not otherwise subject to an obligation of
confidentiality). VCG's obligations as set forth in this Section 9 shall
survive the termination of this Agreement, for whatever the reason, for a
period of ten (10) years thereafter.
10. RESOLUTION OF DISPUTES; WAIVER OF LITIGATION
This Agreement shall be construed and interpreted in accordance with the
laws of Delaware. All disputes involving a claimed breach of the Agreement
shall be submitted to mediation and failing resolution, to binding
arbitration pursuant to the commercial mediation and arbitration rules of
the American Arbitration Association in effect at the time of the Agreement
becomes effective. Any arbitration hearing shall be held before an
experienced business law arbitrator, licensed to practice law in Delaware
and shall be held in Delaware, unless the parties agree otherwise. This
agreement to arbitrate shall be enforceable and judgment upon any award
rendered by an arbitrator may be entered in any court of any county having
jurisdiction.
11. SEVERABILITY
Should any provisions of this Agreement be found by any court of competent
jurisdiction to be invalid, null or void, all other provisions shall
continue in force and effect.
12. ASSIGNMENT OF RIGHTS AND OBLIGATIONS
This Agreement is not assignable by VCG. COMPANY may assign this Agreement
in connection with the sale or transfer of all or substantially all of this
business of COMPANY to which this Agreement relates by giving written
notice to VCG. It is further understood that this Agreement inures to the
benefit of the successors and assigns of COMPANY and will be binding upon
VCG and VCG's executors, administrators and representatives.
13. TAXES
All taxes applicable to any amounts paid by COMPANY to VCG under this
Agreement will be VCG's liability and COMPANY shall not withhold nor pay
any amounts for federal, state or municipal income tax, social security
unemployment or worker's compensation.
14. GOVERNMENT ORDERS
If the work involves work under contracts which COMPANY may have as a
government prime contractor or subcontractor, all obligations in such
contracts shall be binding upon VCG. If the work to be performed by VCG
includes the receiving, handling or development of any government
classified materials, VCG will comply with all applicable security
regulations and requirements including qualifications for receiving and
handling such classified information/material. VCG shall submit a
confidential report to COMPANY immediately whenever for any cause it has
reason to believe that there is an active danger of espionage or sabotage
affecting any work under such government contracts.
15. TRIGGERING EVENT.
This agreement will be separated into two distinct Phases. Phase I
(Attachment A) shall be structured to assist COMPANY in the attainment of
capital, the development of an overall business strategy and the
negotiation and purchase of the rights of certain key products currently
identified (i.e. [CONFIDENTIAL TREATMENT REQUESTED]) and is not to exceed
180 days. Phase II shall include ongoing management, sales and marketing
support for the duration of the agreement as outlined in Attachment B.
The triggering event relative to the movement from Phase I to Phase II
shall the attainment of capital in conjunction with the purchase of the
currently identified product opportunity. In the event that there is no
Triggering Event, Phase I shall construe the entirety of this agreement and
therefore shall nullify Phase II of this agreement.
16. DEFINITION OF NET SALES
For purposes of this Agreement, "NET SALES" means, with respect to any
Product sold by the COMPANY, the gross amounts invoiced for sales of the
Product by the COMPANY, its Affiliates and their permitted sublicensees, as
appropriate, less the sum of:
(A) trade, quantity and cash discounts actually allowed or paid, as
may be customary in the trade or otherwise required by law or any
Regulatory Authority;
(B) credits or allowances given or made for rejection or return of
previously sold products;
(C) rebates granted to distributors as part of negotiated managed
health care organizations contracts.
(D) 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;
(E) to the extent included in the invoiced price, charges for
shipping, freight and insurance directly related to the distribution of the
Product; and
(F) 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, as may be customary in the trade or otherwise
required by law or any Regulatory Authority;
PROVIDED, HOWEVER, that during any Calendar Quarter the sum of the items
described in (a), (c) and (f) above, for any Product shall not exceed
[CONFIDENTIAL TREATMENT REQUESTED] percent ([CONFIDENTIAL TREATMENT
REQUESTED]%) of the gross sales for such Product during such Calendar
Quarter and any amounts in excess of such [CONFIDENTIAL TREATMENT
REQUESTED] percent ([CONFIDENTIAL TREATMENT REQUESTED]%) limitation shall
not be deductible in any other Calendar Quarter.
17. BOARD APPROVAL
The COMPANY will ensure that it will undertake the necessary steps required
to obtain the written approval of its Board of Directors in order to fulfill its
obligations and give full effect to this Agreement.
IN WITNESS WHEREOF, The parties have executed the Agreement as of the date set
forth above.
VCG & ASSOCIATES, INC.
By: __________________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Partner
Date: February 1, 2007
SYNOVICS PHARMACEUTICALS INC.
By: __________________________________________
Name: Xxxxxx Xxxxxx Lane
Title: Chief Executive Officer
Date: February 1, 2007
ATTACHMENT A
VCG & A, INC. SERVICES
PHASE I
DURATION: FEBRUARY 1, 2007 - THE SOONER OF THE TRIGGERING EVENT OR JULY 30, 2007
The Phase I Services, to be performed under this Agreement, shall be limited to
the following:
1. Provide advice and counsel on establishing appropriate systems,
facilities, structures, and other business elements to promote the
growth and eventual profitability of Synovics Inc.
2. Provide technical guidance on the selection of products, processes,
vendors, strategies and other required elements to make Synovics R&D
program productive and profitable.
3. Identifying potential market and product opportunities to enhance
Synovics overall growth opportunity.
4. Participate with Synovics Inc. Senior Management Team, and any other
requisite parties to formulate a 3 year business plan for the
enterprise.
5. Participate in Synovics Inc's current fund raising efforts and
represent the COMPANY interests at a Senior Management level in all
discussions with potential investors.
6. Assist Synovics in identifying potential funding sources.
ATTACHMENT B
VCG & A, INC. SERVICES
PHASE II
THE BEGIN AS OF THE SOONER OF THE TRIGGERING EVENT OR JULY 30, 2007
1. Assist COMPANY in identifying and evaluating alternative strategies
for expanding COMPANY's business and augmenting its value;
2. Assist COMPANY in identifying potential parties to transactions with
COMPANY;
3. With the approval of COMPANY, enter into preliminary discussions with
potential parties to transactions with COMPANY;
4. Assist COMPANY by providing industry expertise and advice in
evaluating various potential transactions;
5. Assist in the development of negotiation positions and alternative
structures;
6. Provide business plan development to raise capital for the COMPANY;
7. Financial assessment(s) as necessary;
8. Distribution and sales assessment to maximize market opportunity;
9. Sales assistance with focus on acquiring a larger customer base, A & B
clients versus C clients;
10. Assist COMPANY in branding the organization with a broader customer
base;
11. Manage generic, 505(b)(2), and other opportunities, take to market or
license to other Pharma's;
12. Broker product(s) in-license and out-license opportunities;
13. Build commercialization plan and build sales force for 505 (b)(2)
products if products are retained;
14. Build commercialization plan and build sales force for branded
pharmaceuticals if products are retained:
15. Create business plans and strategies as applicable for all sectors and
platforms;
16. Enhance distribution and sales opportunities to all market segments;
17. Provide the CONFIDENTIAL TREATMENT REQUESTED opportunity;
18. Bring additional products to Synovic/Xxxx Pharmaceuticals;
19. Raise additional funds to drive implementation of the above; and,
20. Other management and strategic services as necessary.
ATTACHMENT C
FEE STRUCTURE
PHASE I
[CONFIDENTIAL TREATMENT REQUESTED]
PHASE II
[CONFIDENTIAL TREATMENT REQUESTED]
