DISTRIBUTION AGREEMENT
EXHIBIT
10.2
This
Exclusive License Agreement (hereinafter called the Agreement”) to be effective
as of the 20th day of November, 2001 (hereinafter called “Agreement Date”) is by
and between Syntho Pharmaceuticals, Inc. (the “MAKER”), a profit corporation
having its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxxx,
XX
00000 and Medi-Hut Co., Inc., a corporation organized under the laws of Delaware
and having a principal place of business at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxx Xxxxxx 00000, and its Affiliates (hereinafter, collectively referred to
as
the “DISTRIBUTOR.”)
WITNESSETH:
WHEREAS,
MAKER shall manufacture the Subject Technology as defined in paragraph 1.1
below
and incorporated herein by reference; and
WHEREAS,
MAKER is willing to grant exclusive distribution rights to the Subject
Technology to DISTRIBUTOR on the terms set forth herein; and
WHEREAS,
DISTRIBUTOR desires to obtain said exclusive distribution rights for the Subject
Technology.
NOW,
THEREFORE, for and in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
Parties hereto expressly agree as follows:
1. DEFINITIONS
AS USED HEREIN
1.1. The
term
“Subject Technology” shall mean know-how, methods, documents, materials, tests,
all improvements thereto, and all confidential information pertaining to a
Generic Hormone Therapy Replacement Drug which is being developed and
manufactured by Maker.
1.2. The
term
“Product(s)” shall mean all products that incorporate. utilize or are made with
the use of the Subject Technology.
1.3. The
term
“Territory” shall mean the United States of America. including the District of
Columbia.
1.4. The
term
“Affiliates” shall mean any corporation, partnership, joint venture or other
entity of which the common stock or other equity ownership thereof is ten
percent (10%) or more owned by DISTRIBUTOR.
1.5. The
term
“the Parties” shall mean MAKER and DISTRIBUTOR.
2. GRANT
OF
EXCLUSIVE DISTRIBUTION RIGHTS
2.1. MAKER
hereby grants to DISTRIBUTOR an exclusive right to use, market, sell and offer
for sale the Products in the Territory.
2.2. The
grant
in Section 2.1 shall be further subject to, restricted by and non-exclusive
with
respect to:
(i) the
use
of the Products by MAKER for non-commercial research: and
(ii) the
use
of the Products by the MAKER thereof for non-commercial research purposes at
academic or research institutions.
3. MARKETING
EFFORTS
DISTRIBUTOR
shall use reasonable efforts, as defined herein, to effect the sale of Products
in commercial markets in the Territory as soon as practicable. Such efforts
shall include and be conditioned upon, but not be limited to, the successful
conclusion of stability studies by MAKER for the subject technology. DISTRIBUTOR
shall commence sales of the Products In December 2001. DISTRIBUTOR estimates
that net sales of the Products from initiation of sales through the end of
a 12
month period should total twenty five million dollars ($25,000,000). The parties
shall adjust this projection and modify the provisions herein accordingly to
be
determined by market conditions (i.e. competition, brand
aggressiveness).
4. PAYMENTS
AND REPORTS
4.1. As
partial consideration for the rights conveyed by MAKER under this Agreement,
DISTRIBUTOR shall pay to MAKER a fee of Nine Hundred Thousand Dollars
($900,000.00).
4.2. In
addition to the foregoing fees, DISTRIBUTOR agrees to purchase from MAKER the
Products for a price and schedule to be determined by the parties.
4.3. Should
DISTRIBUTOR fail to make any payment whatsoever due and payable to MAKER
hereunder, MAKER may, at its sole option, terminate this Agreement as provided
in Paragraph 7.2.
4.4. All
payments due hereunder are expressed in and shall be paid by check or bank
wire
payable in United States of America currency, without deduction of exchange,
collection or other charges, to MAKER or to the account of MAKER at such other
bank as MAKER may from time to time designate by notice to
DISTRIBUTOR.
4.5. In
the
event that any payment due is not made when due, the payment shall accrue
interest beginning on the tenth day following the due date thereof, calculated
at the annual rate of the sum of (a) three percent (3%) plus (b) the prime
interest rate quoted by The Wall Street Journal on the date said payment is
due,
the interest being compounded on the last day of each calendar quarter,
provided, however, that in no event shall said annual interest rate exceed
the
maximum legal interest rate for corporations. Each such payment when made shall
be accompanied by all interest so accrued. Said interest and the payment and
acceptance thereof shall not negate or waive the right of MAKER to seek any
other remedy, legal or equitable, to which it may be entitled because of the
delinquency of any payment.
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5. PATENTS
AND INFRINGEMENT
5.1. MAKER
agrees to keep DISTRIBUTOR fully informed, at MAKER’s expense, of prosecutions
pursuant to this Section 5 including submitting to DISTRIBUTOR copies of all
official actions and responses thereto; provided, however, DISTRIBUTOR shall
be
responsible for any of its expenses including attorney’s fees that DISTRIBUTOR
incurs in reviewing and commenting on the information DISTRIBUTOR received
from
the MAKER. MAKER shall consult DISTRIBUTOR regarding any abandonment of the
prosecution of the patents.
5.2. DISTRIBUTOR
agrees to reasonably cooperate with MAKER to whatever extent is reasonably
necessary to procure patent protection of any rights, including fully agreeing
to execute any and all documents to provide MAKER the full benefit of the
licenses granted herein.
5.3. Neither
DISTRIBUTOR nor MAKER shall settle any action covered by Paragraph 5.2 without
first obtaining the consent of the other Party, which consent will not be
unreasonably withheld.
5.4. MAKER
shall not be liable for any losses incurred as the result of an action for
Infringement brought against DISTRIBUTOR as the result of DISTRIBUTOR’s exercise
of any right granted under this Agreement. The decision to defend or not defend
shall be in MAKER’s sole discretion.
6. PROPRIETARY
INFORMATION
6.1. DEFINITIONS
“Proprietary
Information” as used herein shall mean all or any portion of only the: (a)
written, recorded, graphical or other information in tangible form disclosed
during the term of this Agreement, by one party to the other party which is
labeled “Proprietary,”“Confidential,” or with a similar legend denoting the
proprietary interest therein of the disclosing party; (b) oral information
which
is disclosed by one party to the other party to the extent it is identified
as
“Proprietary” or “Confidential” at the time of oral disclosure, is reduced to
written or other tangible form within thirty (30) days of oral disclosure,
and
such written or tangible form is labeled “Propriety,”“Confidential,” or with a
similar legend denoting the proprietary interest therein of the disclosing
party; and (c) models and other devices delivered or disclosed, during the
Term
of this Agreement, by one party to the other party which have been identified
in
writing at the time of disclosure as being proprietary to the disclosing party;
and provided further, however, Proprietary Information shall not include any
data, information or device that is: (i) in the possession of the receiving
party prior to its disclosure by the disclosing party and not subject to other
restrictions on disclosure; (ii) independently developed by the receiving party;
(iii) publicly disclosed by the disclosing party; (iv) rightfully received
by
the receiving party from a third party without restrictions on disclosure;
(v)
approved for unrestricted release or unrestricted disclosure by the disclosing
party; or (vi) produced or disclosed pursuant to applicable laws, regulations
or
court order, provided the receiving party has given the disclosing party prompt
notice of such request so that the disclosing party has an opportunity to
defend, limit or protect such production or disclosure. DISTRIBUTOR shall have
no technological access to MAKER’S original formula and/or manufacturing
operational technique.
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6.2. TRADEMARKS
DISTRIBUTOR
may use MAKER’S trademarks only in accordance with MAKER’S then current
published specifications relating to the use thereof on products of equivalent
product quality to those normally bearing MAKER’S trademarks. DISTRIBUTOR
reserves the right to, at its sole discretion, periodically review and monitor
DISTRIBUTOR’S use of MAKER’S marks for proper trademark usage, quality of goods,
and other criteria as may be required by law to preserve DISTRIBUTOR’S rights,
good will, and value in its trademarks.
7. TERM
AND
TERMINATION
7.1. Unless
earlier terminated as hereinafter provided, this Agreement shall extend for
the
life of the last to expire patent issued on the Subject Technology and shall
then expire automatically, or if no patent issues on the Subject Technology,
this Agreement shall continue in full force and effect for a period of five
(5)
years from the first commercial sale of Products by DISTRIBUTOR.
7.2. In
the
event of default or failure by DISTRIBUTOR to perform any of the terms,
covenants or provisions of this Agreement, DISTRIBUTOR shall have thirty (30)
days after the giving of written notice of such default by MAKER to correct
such
default. If such default is not corrected within the said thirty (30) day
period, MAKER shall have the right, at its option, to cancel and terminate
this
Agreement. The failure of MAKER to exercise such right of termination for
non-payment of royalties or otherwise shall not be deemed to be a waiver of
any
right MAKER might have, nor shall such failure preclude MAKER from exercising
or
enforcing said right upon any subsequent failure by DISTRIBUTOR.
7.3. MAKER
shall have the right, at its option, to cancel and terminate this Agreement
in
the event that DISTRIBUTOR shall (i) become involved in insolvency, dissolution,
bankruptcy or receivership proceedings affecting the operation of its business
or (ii) make an assignment of all or substantially all of its assets for the
benefit of creditors, or in the event that (iii) a receiver or trustee is
appointed for DISTRIBUTOR and DISTRIBUTOR shall, after the expiration of thirty
(30) days following any of the events enumerated above, have been unable to
secure a dismissal, stay or other suspension of such proceedings. In the event
of termination of this Agreement all rights to the Subject Technology shall
revert to MAKER.
7.4. At
the
date of any termination of this Agreement pursuant to Paragraph 7.2 hereof
for
breach by DISTRIBUTOR, or pursuant to Paragraph 7.3 hereof, as of the receipt
by
DISTRIBUTOR of notice of such termination, DISTRIBUTOR shall immediately cease
using any of the Subject Technology and return all copies of the same to MAKER;
provided, however, that DISTRIBUTOR may dispose of any Licensed Products
actually in the possession of DISTRIBUTOR prior to the Agreement Date of
termination, subject to DISTRIBUTOR’S paying to MAKER running royalties in
accordance with Paragraph 4.2 with respect thereto and otherwise complying
with
the terms of this Agreement.
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7.5. No
termination of this Agreement shall constitute a termination or a waiver of
any
rights of either party against the other Party accruing at or prior to the
time
of such termination. The obligations of Sections 5 shall survive termination
of
this Agreement.
8. ASSIGNABILITY
This
Agreement shall be binding upon and shall inure to the benefit of MAKER and
its
assigns and successors in interest, and shall be binding upon and shall inure
to
the benefit of DISTRIBUTOR and the successor to all or substantially all of
its
assets or business to which this Agreement relates, but shall not otherwise
be
assignable or assigned by DISTRIBUTOR.
9. GOVERNMENTAL
COMPLIANCE
DISTRIBUTOR
shall at all times during the term of this Agreement and for so long as it
shall
sell Products comply and cause its submakers to comply with all laws that may
control the import, export, manufacture, use, sale, marketing, distribution
and
other commercial exploitation of Products or any other activity undertaken
pursuant to this Agreement.
10. GOVERNING
LAW
This
Agreement shall be deemed to be subject to, and have been made under, and shall
be construed and interpreted in accordance with the laws of the State of New
York. This Agreement is expressly acknowledged to be subject to all federal
laws
including but not limited to the Export Administration Act of the United States
of America. No conflict-of-laws rule or law that might refer such construction
and interpretation to the laws of another state, republic, or country shall
be
considered.
11. ADDRESSES
Any
payment, notice or other communication pursuant to this Agreement shall be
sufficiently made or given on the date of mailing if sent to such Party by
first
class mail, postage prepaid, addressed to it at its address below or as it
shall
designate by written notice given to the other Party:
In
the
case of DISTRIBUTOR with a copy to:
| NAME |
Xxxxxxxx
Xxxxx
|
| TITLE | President |
| ADDRESS | 000 Xxxxxxxx Xxxxxx |
| Xxxxxxxxxxx, XX 00000 |
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In
the
case of MAKER: With a copy to:
| NAME |
Xxxxxxxx
X. Xxxxx NAME Xxxxxx
X. Xxxxxxxxx
|
| TITLE | Chief Financial Officer TITLE President & Chief |
| ADDRESS | 0000 Xxxxxxxxxx Xxx. Xxxxxxxxx Xxxxxxx |
| Xxxxxxxx. XX 00000 ADDRESS 0000 Xxxxxxxxxx Xxx. |
| Xxxxxxxx, XX 00000 |
12. ADDITIONAL
PROVISIONS
12.1. In
addition to the exclusive distribution rights granted herein, MAKER agrees
to
grant to DISTRIBUTOR a right of first refusal covering the sale, use and
distribution of an new generic drugs that MAKER may develop. Pursuant to this
right of first refusal, MAKER shall notify DISTRIBUTOR of the availability
of
new generic drugs or similar technologies and DISTRIBUTOR shall, within ten
days
of receipt of said information, notify MAKER of its desire to distribute the
product. If MAKER and DISTRIBUTOR should agree to distribute new generic drugs
or similar technologies, the costs associated with such undertakings shall
be
divided as agreed upon by the parties. If DISTRIBUTOR does not provide to MAKER
notification of its desire to distribute the new products within the period
described above, MAKER shall be released from this right of first refusal and
may negotiate such distribution agreements with third parties as it deems
advisable.
12.2. Confidentiality.
DISTRIBUTOR agrees to maintain the Subject Technology in confidence, and to
use
the same only in accordance with this Agreement. Such obligation of
confidentiality shall not apply to information which DISTRIBUTOR can
demonstrate: (i) was at the time of disclosure in the public domain; (ii) has
come into the public domain after disclosure through no fault of DISTRIBUTOR;
(iii) was known to DISTRIBUTOR prior to disclosure thereof by MAKER; (iv) was
lawfully disclosed to DISTRIBUTOR by a third party which was not under an
obligation of confidence to MAKER with respect thereto; (v) which DISTRIBUTOR
can reasonably demonstrate was independently developed by DISTRIBUTOR without
use of the Subject Technology; or (vi) which DISTRIBUTOR shall be compelled
to
disclose by law or legal process. The foregoing obligation of confidentiality
shall survive termination of this Agreement.
12.3. Indemnity.
Each Party shall notify the other of any claim, lawsuit or other proceeding
related to the Subject Technology. Subject to the following sentence,
DISTRIBUTOR agrees that it will defend, indemnify and hold harmless MAKER,
its
researchers, employees, officers, trustees, directors, and agents and each
of
them (the “Indemnified Parties”), from and against any and all claims, causes of
action, lawsuits or other proceedings filed or otherwise instituted against
any
of the Indemnified Parties related directly or indirectly to or arising out
of
the design, process, manufacture, or use by any person or party of the Subject
Technology, the Licensed Products or any other embodiment of the Subject
Technology even though such claims, causes of action, lawsuits or other
proceedings and the costs (including attorney’s fees) related thereto result in
whole or in part from the negligence of any of the Indemnified Parties.
Notwithstanding any provisions herein to the contrary, MAKER shall indemnify
DISTRIBUTOR for any claims for injuries to persons or property damage which
occur on MAKER premises or premises under the exclusive control of MAKER.
DISTRIBUTOR will also assume responsibility for all costs and expenses related
to such claims and lawsuits for which it is obligated to indemnify the
Indemnified Parties pursuant to this Paragraph 13.3, including, but not limited
to, the payment of all reasonable attorneys’ fees and costs of litigation or
other defense.
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12.4. Insurance.
DISTRIBUTOR shall for so long as DISTRIBUTOR manufactures, uses or sells any
Product(s), maintain in full force and effect policies of (i) worker’s
compensation and/or employers’ liability insurance within statutory limits, (ii)
general liability insurance (with broad form general liability endorsement)
with
limits of not less than three million dollars ($3,000,000) per occurrence with
no annual aggregate and (iii) products liability insurance, with limits of
not
less than three million dollars ($3,000,000) per occurrence with no annual
aggregate. Such coverage(s) shall be purchased from a carrier or carriers deemed
acceptable to MAKER with no annual aggregate and shall name MAKER as an
additional insured. Upon request by MAKER, DISTRIBUTOR shall provide to MAKER
copies of said policies of insurance.
12.5. MAKER’S
Disclaimers. Neither MAKER nor any of its researchers, trustees, officers,
employees, directors, or agents assume any responsibility for the manufacture,
product specifications, sale or use of the Subject Technology or the Licensed
Products which are manufactured by or sold by DISTRIBUTOR.
12.6. Independent
Contractors. The Parties hereby acknowledge and agree that each is an
Independent contractor and that neither Party shall be considered to be the
agent, representative, master or servant of the other Party for any purpose
whatsoever, and that neither Party has any authority to enter into a contract.
to assume any obligation or to give warranties or representations on behalf
of
the other Party. Nothing in this relationship shall be construed to create
a
relationship of joint venture, partnership, fiduciary or other similar
relationship between the Parties.
12.7. DISCLAIMER
OF WARRANTY. MAKER MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESSED OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF FITNESS OR MERCHANTABILITY,
REGARDING OR WITH RESPECT TO THE SUBJECT TECHNOLOGY OR PRODUCTS AND MAKER MAKES
NO WARRANTIES OR REPRESENTATIONS, EXPRESSED OR IMPLIED, OF THE PATENTABILITY
OF
THE SUBJECT TECHNOLOGY OR PRODUCTS OR OF THE ENFORCEABILITY OF ANY PATENTS
ISSUING THEREUPON, IF ANY, OR THAT THE SUBJECT TECHNOLOGY OR LICENSED PRODUCTS
ARE OR SHALL BE FREE FROM INFRINGEMENT OF ANY PATENT OR OTHER RIGHTS OF THIRD
PARTIES
12.8. Non-Waiver.
The Parties covenant and agree that if a Party fails or neglects for any reason
to take advantage of any of the terms provided for the termination of this
Agreement or if a Party, having the right to declare this Agreement terminated,
shall fail to do so, any such failure or neglect by such Party shall not be
a
waiver or be deemed or be construed to be a waiver of any cause for the
termination of this Agreement subsequently arising, or as a waiver of any of
the
terms, covenants or conditions of this Agreement or of the performance thereof.
None of the terms, covenants and conditions of this Agreement may be waived
by a
Party except by its written consent.
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12.9. Reformation.
All Parties hereby agree that neither Party intends to violate any public
policy, statutory or common law, rule, regulation, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries; that if any word, sentence, paragraph or clause or
combination thereof of this Agreement is found, by a court or executive body
with judicial powers having jurisdiction over this Agreement or any of its
Parties hereto, in a final unappealed order to be in violation of any such
provision in any country or community or association of countries, such words,
sentences, paragraphs or clauses or combination shall be inoperative in such
country or community or association of countries, and the remainder of this
Agreement shall remain binding upon the Parties hereto.
12.10. Force
Majeure. No liability hereunder shall result to a Party by reason of delay
in
performance caused by force majeure, that is circumstances beyond the reasonable
control of the Party, including, without limitation, acts of God, fire, flood,
war, civil unrest, labor unrest, or shortage of or inability to obtain material
as equipment.
12.11. Entire
Agreement. The terms and conditions herein constitute the entire agreement
between the Parties and shall supersede all previous agreements, either oral
or
written, between the Parties hereto with respect to the subject matter hereof.
No agreement of understanding bearing on this Agreement shall be binding upon
either Party hereto unless it shall be in writing and signed by the duly
authorized officer or representative of each of the Parties and shall expressly
refer to this Agreement.
IN
WITNESS WHEREOF, the Parties hereto have executed and delivered this Agreement
in multiple originals by their duly authorized officers and representatives
on
the respective dates shown below, but effective as of the Agreement
Date.
| DISTRIBUTOR | MAKER | ||
| MEDI-HUT CO., INC. | Syntho Pharmaceuticals, Inc. | ||
| /s/ Xxxxxxxx Xxxxx | /s/ Xxxxxx X. Xxxxxxxxx | ||
|
|
|
||
| Title:
President & Chief Executive Officer Date: November 20, 2001 |
Title:
President Date: November 20, 2001 |
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