Exhibit 10.2

 

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Double asterisks denote omissions.

 

SUPPLY AND DISTRIBUTION AGREEMENT

 

This Supply & Distribution Agreement is made and entered into as of November 2,
2016 (the “Signing Date”) by and among,

 

Aurobindo Pharma Ltd., a company existing under the laws of India with its
registered office at Plot No.2, Maitri Vihar, Ameerpet, Hyderabad-500038, India,
(hereinafter referred to as “Aurobindo”),

 

Romeo Charlie Acquisition I, LLC., having its offices at 4 Tri Harbor Court,
Port Washington, New York, 11050, United States (hereinafter referred to as
“COMPANY”)

 

and, solely for purposes of Section 27.1, Citron Pharma LLC, having its offices
at 2 Tower Center Blvd, Suite 1101, East Brunswick, New Jersey, 08816, United
States (hereinafter referred to as “Citron”).

 

WHEREAS, Aurobindo owns Abbreviated New Drug Applications (ANDAs) for certain
pharmaceutical products that have been approved by, or are otherwise pending
approval with, regulatory authorities in the United States relating to certain
pharmaceutical formulation products as manufactured by Aurobindo (each a
“Product” and any one or more the “Products); and

 

WHEREAS, COMPANY desires to purchase from Aurobindo, and Aurobindo desires to
supply to COMPANY, the Products for resale/distribution by COMPANY in the
Territory (as defined below), on the terms and conditions hereinafter set forth,

 

NOW THEREFORE, Aurobindo and COMPANY (and solely for purposes of Section 27,
Citron), intending to be legally bound, hereby agree as follows (effective as of
the Effective Time, as defined in Section 27.3):

 

1.Supply and Marketing of the Products;

 

With regards to the products listed, in the Annexure A, Aurobindo will grant
COMPANY Semi-Exclusive Marketing Rights as follows:

 

–For the purpose of sale/distribution of the Products in the Territory (i.e.,
the US, its territories and possessions), Aurobindo agrees to grant COMPANY the
rights and license to import, market, sell and distribute the Products in the
Territory. Notwithstanding anything to the contrary set forth herein, including,
without limitation in the third bullet paragraph of this Section 1, such rights
and license shall be exclusive with respect to each of the six Products as
mentioned in Annexure C which have not been sold or marketed by Aurobindo or
Citron in the Territory as of the Signing Date until the later of (A) the date
that is four (4) years after the Signing Date, and (B) the date that is thirty
six (36) months after the launch of such Product; provided, that with respect to
the foregoing clause (B), such Product is launched within twelve (12) months
after the Signing Date.

 

 

 

  

 

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Double asterisks denote omissions.

 

–Products shall be sold by COMPANY under its own label (including the labels of
affiliates) in the Territory, except that for each Product, COMPANY shall be
permitted to sell such Product on a private label basis with respect to one of
its customers.

 

–Aurobindo shall retain the rights to market, sell or distribute the Products
covered under this Agreement for its own account in the Territory.

 

–COMPANY shall purchase the Products exclusively from Aurobindo for the price
and under the terms set forth in this Agreement for resale/distribution by
COMPANY in the Territory.

 

–Both parties have mutually agreed and acknowledged that the Products that have
been offered to third party marketer(s) before February 29, 2016 by Aurobindo
will not be covered under the Semi-Exclusivity condition. Parties may discuss to
agree for similar condition for any other Product in future if mutually agreed.
Affiliates of Aurobindo established or acquired after the Signing Date shall be
deemed third party marketers for purposes of this paragraph; provided, however,
that if Aurobindo acquires a controlling interest in an entity that, prior to
such acquisition, markets a product that is competitive with any of the Products
covered hereby, sales of any such competitive product by the acquired entity
shall not be limited by the terms of this Agreement.

 

–For purposes of this Agreement, Semi-Exclusivity shall mean that Aurobindo
shall be i entitled to market, sell or distribute any products covered under
this Agreement:

 

a) for its own account in the Territory under the ANDA’s held by Aurobindo in
addition to the other Distributors/Wholesalers existing as of the Signing Date;
and

 

b) for sales to Wholesalers/Retail Pharmacy Chains/Mail Order Companies
including but not limited to [**], under their private label/Aurobindo label.

 

–For purposes of this Agreement, the grant of exclusive rights shall mean that
such grant is exclusive even as to the granting party.

 

–Aurobindo warrants and represents to COMPANY that Annexure B identifies, for
each Product, each third Party distributor appointed by Aurobindo to market such
Product in the Territory as of the Signing Date.

 

2.Price and Terms of Payment

 

2.1Aurobindo shall invoice the Products to COMPANY, at the mutually agreed
Ex-works Prices for invoicing purpose which will be different and higher than
the Floor Prices ( Ex-Works cost) mentioned in the Annexure A attached hereto.

 

 -2- 

 

   

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Double asterisks denote omissions.

 

Effective Supply Price and the differential Price in addition to the invoiced
Price to be paid by COMPANY shall be calculated as mentioned below:

 

Effective Supply Price (FCA Hyderabad) Calculation:

 

(A)For the Products shipped / supplied by Aurobindo during the first 15 months
from the first shipment of the Product on each Product SKU basis;

 

a.[**]

 

b.[**]

 

c.[**]

 

d.[**]

 

e.[**]

 

f.[**]

 

g.[**]

 

(B)For the Products shipped / supplied by Aurobindo after 15 months from the
first shipment of the Product on each Product SKU basis

 

a.[**]

 

b.[**]

 

c.[**]

 

d.[**]

 

e.[**]

 

f.[**]

 

[**]

 

(C)In case of First to File Products (Rosuvastatin and Atomoxetine) for which 6
months exclusivity can be granted by FDA, Gross Contribution sharing ratio
between Aurobindo and COMPANY shall be [**]. COMPANY will retain the exclusive
rights to market these Products during the First to File period.

 

In ease of Duloxetine, the Gross contribution sharing ratio (giving effect to
payments made or required to be made under the Distribution Agreement (as
defined below)).shall be

 

 -3- 

 

   

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Double asterisks denote omissions.

 

a.[**] to Aurobindo up to USI) [**]

 

b.[**] to COMPANY from USD [**] to USD [**]

 

c.In the ratio of [**] between COMPANY and Aurobindo thereafter.

 

For the purpose of calculating the Net Sales Value as mentioned above, COMPANY
agrees to submit sales statements to AUROBINDO detailing the sales made by
COMPANY on a quarterly basis where AUROBINDO shall be entitled to verify the
correctness of the Net sales statements through an independent certified
accountant at its costs, however, the calculation of not exceeding 2% of the Net
Sales Value towards short shelf life and not exceeding 1% of the Net Sales Value
towards Products returned and not sold due to shorter shelf life/expiry, shall
be done on cumulative basis for the financial year considering the cumulative
actuals or cumulative maximum of 2% or 1% (as applicable); whichever is lower
and deducting the deduction allowed in the immediately preceding quarters.

 

“Net Sales Value” means the aggregate gross revenues derived or payable on
account of the sale of the Product, less the sum of the following items, all of
which must directly relate to the sale and distribution of the Product (a)
credits or allowances, including for product returns, actually granted or
accrued, if any, (b) rebates, including government rebates, bill backs, charge
backs and discounts actually granted or accrued.

 

In any case, the Effective Supply Price shall never go below the corresponding
Floor Prices.

 

In addition to the audit rights set forth in section 2.1(c) of this Agreement,
within 90 days after completion of COMPANY’s annual audit, Aurobindo will also
have the right to audit. Any resulting true ups will be completed within 30 days
of Aurobindo’s report. If Aurobindo disputes COMPANY’s calculations, the Parties
will work in good faith during a 30-day period to resolve the dispute. If the
Parties are unable to resolve the dispute, then an accounting expert reasonably
acceptable to both Parties will be appointed to resolve the amounts in dispute.

 

2.2AUROBINDO shall raise invoices at the mutually agreed FCA Hyderabad Prices
which shall be higher than the Floor Prices (Ex-Works cost) and COMPANY shall
pay against such invoice within a) [**] from the date of the invoice for the
supplies made during the first 54 months from the Effective Date (as defined in
the Distribution Agreement); b) [**] for the subsequent supplies.

 

For the payment of the difference between invoiced Price and the Effective
Supply Price as mentioned in Clause 2.1, AUROBINDO shall raise debit note on
COMPANY on a quarterly basis based on the information provided by COMPANY for
the Effective Price to AUROBINDO and such debit notes shall be paid by COMPANY
within [**] from the date of the debit note. In case such difference is
negative, AUROBINDO shall issue Credit Note to that effect.

 

 -4- 

 

  

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Double asterisks denote omissions.

  

2.3COMPANY shall have a grace period of 45 days following the due date for
making the payments against the invoices and/or the debit notes pursuant to the
terms of this Agreement without any interest. In ease of any delay beyond the
period of 45 days from the agreed due date, Aurobindo may impose an interest on
the outstanding amounts at LIBOR+2% starting from the 1e day after the agreed
due date. If the payment is delayed beyond 50% of the original credit period
Aurobindo may have the right to hold further supplies until the payments are
made.

 

2.4In the event that there is a downward trend in the Net Sales Value of a
Product such that the Net Sales Value is equal to or less than [**] of the Floor
Price for such Product, COMPANY and AUROBINDO may discuss for the possibility of
reducing the Floor Price with mutual consent or may terminate this Agreement
with respect to such Product by giving the other Party sixty (60) days prior
written notice if the reduction in Floor Price / increase in Net Sales Price is
not feasible for either of the parties.

 

2.5If Citron destroys any Products due to shelf life expiry, from out of the
Products supplied/shipped by Aurobindo during the first 15 months from the
Effective Date (as defined in the Distribution Agreement), AUROBINDO agrees to
issue credit note for 50% of the Floor Prices for the corresponding quantities
so destroyed due to shelf life expiry/short shelf life, provided that Citron
strictly follows “First in-First out” principle in selling the Product stock.
This is not applicable for the product being shipped/supplied by Aurobindo after
15 months from the Effective Date (as defined in the Distribution Agreement).

 

2.6COMPANY shall have customary information rights with respect to Aurobindo’s
determination of the Floor Price of the Products including (without limitation)
rights to obtain detailed information once each year, upon 30 days prior written
notice to Aurobindo, with respect to any 3 Products covered under this
Agreement, the specific products to be selected by COMPANY in its sole
discretion, which shall include the right to seeking the data and records of
Aurobindo with respect to any costs and expenses included in the calculation of
the applicable Floor Prices. Such investigations shall be conducted via desktop
review. If the review report concludes that an overpayment /underpayment was
made by COMPANY, the amount of such overpayment / underpayment shall be made
good within 30 days by respective parties. If there is any disagreement, the
Parties will work to resolve such dispute in accordance with dispute resolution
terms set forth in Section 22.1 hereof.

 

3.Forecasts and Orders

 

3.1Upon the Effective Time of this Agreement, and thereafter quarterly on
rolling basis, COMPANY shall provide to Aurobindo a forecast of its estimated
requirements for the Products by quarter for the next four (4) quarters. For any
increases in the forecasts in the subsequent quarters while updating on
quarterly rolling basis, COMPANY shall take prior consent of AUROBINDO
especially for the changes in the forecasts for the immediate next 2 quarters.

 

 -5- 

 

  

3.2COMPANY shall use its reasonable best efforts to ensure that its requirements
forecasts are as accurate as possible, but it is agreed and understood that such
forecasts shall not constitute an obligation to purchase the estimated
quantities.

 

3.3COMPANY shall furnish to Aurobindo firm purchase orders (i) at least one
hundred and twenty (120) days in advance of the requested shipment date
excluding the time taken for the approval of artworks for the launch
orders/first orders for each SKU; and (ii) at least ninety (90) days in advance
of the requested shipment date for the subsequent orders. Purchase orders shall
be in multiples of corresponding batch sizes of the Products and shall be at
least for 2,000 packs for each SKU.

 

3.4No purchase order shall be binding upon Aurobindo until accepted in writing
with confirmation of the date of shipment. Aurobindo shall confirm date of
shipment within fifteen (15) calendar days (through its designated executive)
from the date of receipt of the respective purchase order. In case Aurobindo
does not have confirmation within such fifteen (15) calendar days, the
corresponding purchase order shall be deemed accepted by Aurobindo. Further, the
quantities ordered shall be within the forecasted quantities and the purchase
order shall be consistent with the terms of this Agreement Any purchase order
containing or resulting in an increase of more than ten (10%) of the forecasted
quantities for the applicable quarter or otherwise inconsistent with the terms
of this Agreement shall not be binding upon Aurobindo until it is accepted by
Aurobindo in writing. COMPANY shall provide the firm order through emails.

 

3.5In the event of conflict between the terms of any of COMPANY’s purchase
orders and the terms of this Agreement, the terms set forth in this Agreement
shall control and take precedence over the terms of such purchase order.

 

3.6If COMPANY modifies downwards or cancels all or part of any purchase order
issued to Aurobindo hereunder by issuing a written change order or a revised
purchase order to Aurobindo prior to shipment by Aurobindo, COMPANY shall be
liable to pay Aurobindo for such cancelled or modified orders at the agreed
Prices. Further, if COMPANY orders for less than the applicable forecasted
quantities, and Aurobindo has procured the materials pursuant to the forecasts
issued by COMPANY, then Aurobindo shall:

 

(i)utilize such materials to manufacture similar Products under this Agreement;
and

 

(ii)where the foregoing is not applicable, store such materials in accordance
with applicable laws and their storage requirements for future use in the
manufacture of the Products or similar Products under this Agreement.

 

 -6- 

 

  

In the sole event where Sections 3.6(i) and (ii) are not feasible, COMPANY
agrees to reimburse Aurobindo the cost of such materials purchased by Aurobindo
as evidenced by relevant invoice prices.

 

4.Shipment/Delivery

 

4.1Delivery of the Products shall be on CIF Sea (US main Port) basis (INCOTERMS
2010). If the Products are to be air shipped for any reasons, COMPANY shall bear
the differential freight. Risk of loss of the Products and transfer of title to
Products shall pass to COMPANY as per the applicable INCOTERMS. All Products
shall have at least eighty five percent (85%) shelf-life remaining at the time
of shipment. Quantities for each shipment shall be equal to the container load
or in multiples thereof. Less than container load shipments shall be air shipped
and COMPANY shalt bear the air freight costs of the differential.

 

4.2COMPANY may, by written notice to Aurobindo within thirty (30) days of
receipt of a shipment of the Products, reject goods which do not meet the
specifications; provided, however, that Aurobindo shall have no liability for
defective goods to the extent the non-conformity with the specifications was
caused by COMPANY, its selected carrier, or its representative. A written
notification or explanation shall support any rejection of a shipment or
question as to the quality of the Products delivered.

 

4.3If Aurobindo disputes the written notification from COMPANY, the parties
shall submit samples of the rejected Product to a mutually acceptable
independent laboratory for analysis, whose decision in the matter shall be
final. The costs of such analysis shall be borne by Aurobindo unless such
analysis shows that the Product meet the Specifications or the lack of
specifications was caused by an action of COMPANY, in which case COMPANY shall
bear the cost of such analysis. Aurobindo shall be responsible for the disposal
of defective Product where the non-conformity with the Specifications was caused
by Aurobindo and Aurobindo shall either, at Aurobindo’s option, replace such
Product or credit COMPANY the purchase price of such Product against future
purchases. COMPANY shall be responsible for the disposal of defective Product
where the non-conformity with the Specifications was caused by COMPANY and
COMPANY shall credit Aurobindo the purchase price of such Product.

 

4.4COMPANY shall comply with and AUROBINDO shall assist COMPANY as appropriate
in complying with Products recall and crisis management policies regarding
Product issued by/communicated to COMPANY from time to time. In the event of a
Product recall, the Party instituting the recall shall promptly advise the other
Party and the Parties shall take all appropriate corrective actions. AUROBINDO
shall bear the expenses of the recall resulting from any manufacturing defects
in the Products attributable to AUROBINDO; however, AUROBINDO’s aggregate
liabilities shall be limited to its product liability insurance policy coverage.
AUROBINDO agrees to add COMPANY as an additional insured to its product
liability insurance policy

 

 -7- 

 

  

5.Labeling and Packaging

 

5.1Aurobindo and COMPANY shall agree on the labeling, provided that Aurobindo
shall be responsible for determining and maintaining the text of all labeling
for the Products that is required by law while the label shall include COMPANY’s
trade marks and trade dress/livery pursuant to COMPANY’s design. COMPANY shall
provide the label design to Aurobindo and Aurobindo shall be responsible for
procuring all labeling and packaging materials.

 

5.2Aurobindo will be responsible for ordering and maintaining the labeling
inventory. The cost of labels will be borne by Aurobindo.

 

5.3Aurobindo represents and warrants that it shall affix COMPANY labeling to all
Products manufactured for COMPANY hereunder. COMPANY shall not obtain any right,
title or interest in any Aurobindo’s trademark by virtue of this Agreement.
COMPANY may, at Aurobindo’s approval, use any Aurobindo trademark utilized in
connection with the Products. Aurobindo shall not obtain any right, title or
interest in any COMPANY trademark by virtue of this Agreement or by virtue of
the Products bearing COMPANY’s trademark; all Products labeled with COMPANY’s
trademark can only be sold or delivered to COMPANY and not sold or delivered by
Aurobindo to any third party.

 

6.Promotional Materials and Advertising

 

6.1COMPANY represents and warrants that it shall advertise, promote and market
the Products in accordance with the ANDA, the approved labeling and all
applicable laws.

 

6.2COMPANY shall maintain the same controls and supervision over and the
marketing and promotional presentations concerning the Products as it does with
respect its other products.

 

7.ANDA

 

7.1Aurobindo will maintain the product license (including the ANDA) for the
Products and insure the GMP manufacture and release under existing approved
quality standards.

 

8.Products Inquiries and Complaints

 

8.1Inquiries or complaints from users of the Products in the Territory shall be
handled in accordance with the Quality Agreement in effect on the Signing Date
(the “Quality Agreement”).

 

9.Quality Agreement

 

9.1The terms and conditions of this Agreement shall control in the event of any
conflict between the terms and conditions of the Quality Agreement and this
Agreement, except with respect to compliance with cGMPs and regulatory
obligations as they pertain to the Product, in which cases the terms of the
Quality Agreement shall control.

 

 -8- 

 

  

10.Warranties

 

10.1Aurobindo warrants to COMPANY that the Products sold to COMPANY and to
Citron (a) shall at the time of receipt by COMPANY’s or Citron’s, as the case
may be, designated carrier conform to the Specifications, (b) shall have been
manufactured in accordance with GMP practices in its GMP approved and FDA
inspected facility, (c) and shall meet all Specifications throughout the FDA
approved shelf life for the Products. Aurobindo shall supply Certificates of
Analysis with each shipment for each batch of Products and shall provide other
internal quality control records corresponding to the specific batches promptly
upon COMPANY’s reasonable request.

 

10.2Aurobindo further warrants to COMPANY that, in the event any of the Products
do not meet the Specifications set forth in the Quality Agreement as a result of
acts or omissions by Aurobindo (subject to verification as noted in Section
4.3), Aurobindo shall as soon as practicable, at Aurobindo’s option, replace the
nonconforming Products(s) or give COMPANY a credit against future purchases for
the purchase price of such non-conforming goods. In the event COMPANY has to
destroy the product, the cost of the product destruction will be borne by
Aurobindo.

 

10.3Each party warrants that it has the requisite rights to enter into and
perform all aspects of the Agreement.

 

10.4Aurobindo warrants as on the Effective Time of this Agreement, that Products
sold to COMPANY to the best of its knowledge does not infringe any patent or
proprietary rights of any third party.

 

11.Indemnity

 

11.1COMPANY shall indemnify and hold harmless Aurobindo from and against any
claims, damages, liabilities, costs (and including reasonable attorneys’ fees
and expenses) threatened against Aurobindo or suffered by Aurobindo arising from
(i) COMPANY’s performance or breach of its obligations, representations, or
warranties under this Agreement, or (ii) the improper storage or handling of the
Products by COMPANY, or (iii) the improper promotion, marketing, sale, or
distribution of the Products in the Territory by COMPANY, or (iv) other of
COMPANY’s negligence, errors, or omissions.

 

11.2Aurobindo shall indemnify and held harmless COMPANY from and against any
claims, damages, liabilities, costs (and including reasonable attorneys’ fees
and expenses) threatened against COMPANY or suffered by COMPANY arising from (i)
Aurobindo’s performance or breach of its obligations, representations, or
warranties under this Agreement or with respect to Products sold to Citron under
the Distribution Agreement, or (ii) Aurobindo’s negligence, errors, or
omissions, or (iii) any claim or suit involving the Products sold pursuant to
this Agreement or the Distribution Agreement in the nature of Products liability
except with respect 1 to that portion of those claims or suits in which
liability is alleged (or ultimately proven) on the basis that the Products
involved failed to meet the Specifications due to an act or omission on the part
of COMPANY or Citron (in which case COMPANY or Citron shall indemnify
Aurobindo),

 

 -9- 

 

  

11.3In the event that a third-party claim is made or third party suit is filed
for which a party intends to seek indemnification the party seeking
indemnification (the “Indemnitee”) shall promptly notify the other party (the
“Injletnanit9r”) of said claim or suit. The Indemnitor shall have the right to
control, through counsel of its choosing, the defense of such third-party claim
or suit, but may compromise or settle the same only with the consent of the
Indemnitee, which consent shall not be unreasonably withheld. The Indemnitee
shall promptly consult in good faith with the Indemnitor with respect to any
proposed settlement. The Indemnitee shall cooperate fully with the Indemnitor
and its counsel in the defense of any such claim or suit and shall make
available to the Indemnitor any books, records or other documents necessary or
appropriate for such defense. The Indemnitee shall have the right to participate
at the Indemnitee’s expense in the defense of any such claim or suit through
counsel chosen by the Indemnitee.

 

11.4Neither Party shall be liable to the other Party under this agreement for an
special, indirect, incidental or consequential damages, whether in contract,
warranty, tort, negligence, strict liability or otherwise, including loss of
profits or revenue suffered by the other Party due breach of any terms of this
Agreement by a Party.

 

11.5This Section 11 shall survive termination of this Agreement for a period of
three (3) years.

 

12.Term and Termination

 

12.1This Agreement shall become effective as of the Effective Time and unless
earlier terminated pursuant to Section 12.2 or 12.3 hereof, shall remain in
effect for twelve (12) years from the Signing Date (the “Initial Term” and,
together with any renewal period in accordance with this Agreement, the “Term”).
Unless otherwise terminated pursuant to Section 12.2 or 12.3, the Term shall be
automatically renewed for consecutive two (2) year periods, unless either Party
gives the other Party written notice of the termination of this Agreement at
least two (2) years before the upcoming expiration. The notice to terminate can
only be given in any renewal period and not in the initial term; accordingly, if
a party were to send such a notice of termination on the first date on which it
is permitted to do so (i.e., the first day of the first renewal term), this
Agreement would be terminated pursuant to this Section 12.1 fourteen (14) years
from the Signing Date.

 

12.2This Agreement may be terminated by either party if:

 

 -10- 

 

  

(i)The other party commits a material breach of any of its obligations under
this Agreement which shall not have been remedied within 60 days from the
party’s giving of notice of such breach, provided that if such breach is not
reasonably capable of cure within such 60 day period, such period shall be
deemed extended throughout any period that the other party has commenced and is
diligently pursuing a cure in a manner reasonably likely to effect such cure
within a commercially reasonable period and thereafter so completes such cure.
In addition, to the extent a material breach affects only certain Products and
not others, the right of termination pursuant to this Section shall only apply
on a Product by Product basis; or

 

(ii)The other party becomes insolvent, makes an assignment for the benefit of
its creditors, or is placed in receivership, liquidation, or bankruptcy; or

 

12.3On Product by Product basis in accordance with Clause 2.4 herein above.

 

The right of either party to terminate this Agreement shall not be affected in
any way by its waiver of, or failure to take action with respect to, any other
default or by the granting of any time or other indulgence.

 

13.Compliance with Law.

 

13.1Aurobindo shall comply with the laws and regulations of the United States
that are applicable to Aurobindo’s manufacture of the Products and supply of the
Products to COMPANY.

 

13.2COMPANY shall comply with the laws and regulations of the United States that
are applicable to COMPANY’s promotion, marketing, distribution and sale of the
Products.

 

14.Confidentiality

 

14.1Except as may be required by law, neither Aurobindo nor COMPANY shall:

 

(i)Disclose to any third party (except affiliates which may be involved in tl c
performance of this Agreement) any confidential and proprietary information
which may be revealed by one party to the other in connection with the
negotiation and performance of this Agreement; nor

 

(ii)Use, for any purpose whatsoever anywhere, except for the purpose of
affecting the purpose of this Agreement; any such information, which may be
revealed by one party to the other.

 

This requirement of confidentiality shall not apply to information which is or
becomes known to the public through no fault of either party to this Agreement,
or information which is subsequently obtained by either party to this Agreement
from a third party who is not under an obligation of non-disclosure to either
party in this Agreement.

 

 -11- 

 

  

14.2Except to the extent that disclosure may be required by law, or except to
the extent otherwise agreed by the parties in writing, the parties agree not to
disclose the terms of this Agreement to any third parties.

 

14.3The terms of this Section 14 shall survive the expiration or termination of
this Agreement for a period of seven (7) years.

 

15.Force Majeure

 

15.1The performance by either party of any covenant or obligation on its part to
be performed under this Agreement shall be excused by floods, strikes or other
labor disturbances, riots, fire, accidents, war, embargoes, delays of carriers,
inability to obtain materials, failure of power or of natural sources of supply,
acts, injunctions, or restraints of government (whether or not now threatened),
any cause preventing such performance whether similar or dissimilar to the
foregoing beyond the reasonable control of the party bound by such covenant or
obligation (“force majeure”); provided, however, that the party affected shall
not have procured such force majeure, shall have immediately notified the other
party of such force majeure, shall have used reasonable diligence to avoid such
force majeure or ameliorate its effects, and shall continue to take all
reasonable actions within its power to mitigate the effects of such force
majeure and to comply as fully as possible with the terms of this Agreement.

 

16.Inability to Supply

 

16.1If for any reason (including force majeure as defined in Section 15)
Aurobindo foresees an inability to supply COMPANY (or by Citron prior to the
Effective Time) with its requirements for the Products (each Product SKU to be
dealt separately for this purpose) as per the rolling forecast provided by
COMPANY and accepted by Aurobindo, then Aurobindo shall immediately notify
COMPANY. Aurobindo and COMPANY shall meet at either party’s request as soon as
possible to attempt to resolve the problem of supply. Despite the bonafide
efforts made by both the parties to avoid or reduce the penalty claims or
provide supplies from alternate sources at higher cost due to delayed supplies,
if COMPANY pays or incurs Gross Loss (Net Sale price less distribution cost less
Procurement cost from alternate source) for alternate supplies, such actual
gross loss paid by COMPANY in excess of Gross Profit from sales of alternate
supplies, if any, shall be deducted from Net Sales value in addition to the
mutually agreed Distribution cost to arrive at the Gross Contribution for the
purpose of Price Difference and Effective Supply Price calculation detailed in
Section 2 hereinabove, provided that:

 

a.the reason for such claim/cost is solely attributable to Aurobindo (except due
to any Force Majeure reasons on part of Aurobindo) and not due to any acts
and/or omissions of COMPANY;

 

 -12- 

 

   

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Double asterisks denote omissions.

 

b.the purchase orders submitted by COMPANY are in accordance with the terms of
this Agreement in particular Section 3 of this Agreement; and

 

c.in case of delay to supply on part of Aurobindo against the accepted purchase
orders, Aurobindo will inform COMPANY in advance of the likelihood of the delay
and the plan to expedite the dispatch of the Products within 45 days from the
agreed due date. COMPANY shall inform Aurobindo of the penalties that can arise
from its customers if the Products are not supplied within such 45 days grace
period after the agreed due date. In case Aurobindo fails to supply the Products
even after such 45 days grace period after the agreed due date, Aurobindo agrees
to bear [**] of the actual penalty amounts that are claimed by its customers and
paid by COMPANY which are attributable to delay or non-supplies by Aurobindo.
Such penalty payable by Aurobindo to COMPANY under this section shall be paid
promptly by Aurobindo upon receipt of invoices from COMPANY. COMPANY shall try
to mitigate the penalties to the maximum extent possible negotiating with the
customers.

 

17.Assignment

 

17.1This Agreement shall not be assigned by either party without the other
party’s prior written consent, which consent may not be unreasonably withheld or
delayed. For the avoidance of doubt, a direct or indirect change of control of a
Party, by operation of law or otherwise, shall not constitute an assignment for
purposes of this Section 17.1.

 

18.Non-Waiver and Other Remedies

 

18.1The failure of either party to insist upon the strict and punctual
performance of every provision of this Agreement shall not constitute waiver of
nor estoppel against asserting the right to require such performance, nor shall
a waiver and estoppel in one instance constitute a waiver or estoppel with
respect to any other breach whether of a similar nature or otherwise.

 

19.Unenforceable Terms

 

19.1In the event that any provision of this Agreement shall for any reason be
finally adjudged as invalid, illegal, or unenforceable in any respect by any
court, arbitration panel, commission, or agency having jurisdiction over either
party or an affiliate of either party, the validity of the Agreement as a whole
shall not be affected. The parties, rather, shall undertake to replace
ineffective clauses with legally effective ones which come as close as possible
to the sense of the ineffective clauses and the purpose of this Agreement.

 

 -13- 

 

  

20.Notices

 

20.1All notices or other communications, which shall or may be given pursuant to
this Agreement shall be effective upon receipt and shall be in writing and
delivered personally or by registered or certified mail, addressed as follows:

 

If to COMPANY;

Romeo Charlie Acquisition I, LLC 4 Tri Harbor Court

Port Washington, New York 11050 United States

Attn: Chief Legal Officer

 

If to Aurobindo:

AurobindoPharma, Ltd

Survey No. 313, Bachupally

Quthubullapur, R.R District

Hyderabad-72, Andhra Pradesh, India

Attn: Mr. 0 P Prasad, Vice President (Global Finance Operations)

 

20.2Either party may change its address for purposes of this clause by giving
written notice of such change to the other party.

 

21.Agency and Representation

 

21.1The legal relationship between the parties shall be as independent
contractors. Neither party is or shall be deemed a partner or agent of the other
party, nor will this Agreement, upon either party the right or power to bind the
other party in any contract or to the performance of any obligations to any
third party. Each party shall conduct its transactions and operations with the
other and with all third parties independently.

 

22.Governing Law

 

22.1This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey, without regard to the conflict of laws
provisions thereof. Each Party hereby irrevocably submits to the jurisdiction
and venue of the Federal and state courts located in the State of New Jersey,
USA, with respect to any proceeding based upon or arising out of the
negotiation, execution, interpretation or enforcement of this Agreement and
unconditionally waives the defenses of inconvenient forum or lack of
jurisdiction in connection with any such proceeding. Each Party agrees that
service of process upon such Party arising out of or relating to this Agreement
shall be effective if given by internationally-recognized overnight courier to
the address set forth in Section 20 hereof. Any award or judgment may be
enforced in any court of competent jurisdiction, either within or outside the
United States. A certified copy of any such award or judgment shall be deemed
conclusive evidence of the fact and amount of such award or judgment.

 

 -14- 

 

  

23.Amendments

 

23.1Subject to Section 27.6, no amendment, addition, or deletion to this
Agreement shall be effective unless in writing and executed by Aurobindo and
COMPANY.

 

24.Headings

 

24.1The clause headings throughout this Agreement are for convenience and
reference only, and the words contained in them shall in no way be held to
explain, modify, amplify, or aid in the interpretation, construction, or meaning
of the provisions of this Agreement.

 

25.Severability

 

25.1Whenever possible, each provision of this Agreement shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision hereof shall be prohibited by or be invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.

 

26.Entire Agreement

 

26.1This Agreement together with the documents referred to herein constitutes
the entire agreement between the Parties with respect to the Products and
supersedes all prior agreements between the Parties, whether written or oral.

 

27.Termination of the Distribution Agreement

 

27.1Aurobindo and Citron entered into a Second Amended & Restated Supply&
Distribution Agreement dated March 7, 2016 (“Distribution Agreement”) whereby
Aurobindo granted certain rights to Citron to distribute the Products in the
United States and its territories and possessions (the “Territory”), ’~

 

27.2For purposes of this Section 27, (i) the term “Purchase Agreement” means
that certain product purchase agreement, dated the date hereof, by and among
COMPANY, COMPANY’s ultimate parent corporation, Citron and other parties
thereto, providing, among other things, for the purchase and sale of certain
products and related assets of Citron and a related entity, as such agreement
may be amended in accordance with its terms from time to time, and (ii) “Gross
Contribution Obligations” means the obligations to pay the difference between
invoiced prices and the Effective Supply Price in accordance with Section 2.2 of
the Distribution Agreement and Section 2.2 of this Agreement, as applicable. The
assets sold pursuant to the Purchase Agreement will include all inventory of the
Products held by Citron as of the Effective Time. The Purchase Agreement
allocates between the parties thereto the responsibility for paying all Trade
Payables due to Aurobindo, including all outstanding invoices for the Products
and all Gross Contribution Obligations arising under the Distribution Agreement.
COMPANY will be responsible for paying all Gross Contribution Obligations
arising out of the sales under this Agreement after the Effective Time.

 

 -15- 

 

   

27.3The following shall occur as of the consummation of the closing provided for
in the Purchase Agreement (the time of such consummation, the “Effective Time”);
(i) Aurobindo and Citron shall terminate the Distribution Agreement as of the
Effective Time, and (ii) the provisions of the Distribution Agreement shall be
replaced as of the Effective Time by the terms of this Agreement, pursuant to
which (x) COMPANY will purchase from Aurobindo, and Aurobindo will supply to
COMPANY, the Products for resale/distribution by COMPANY in the Territory and
(y) COMPANY shall sell, market and distribute the Products in the form of
finished goods throughout the Territory.

 

27.4Aurobindo and CITRON agree that the Distribution Agreement shall be, and
hereby is, terminated effective as of the Effective Time, subject to the
performance by Aurobindo and CITRON of their respective obligations to each
other arising under the Distribution Agreement through the Effective Time.

 

27.5Without limiting the foregoing, in order to provide for the transition from
the Distribution Agreement to this Agreement, it is agreed that (A) the current
forecast and any unfilled orders of Citron under the Distribution Agreement will
be deemed the forecasts and orders of the Company hereunder as of the Effective
Time, subject only to such changes in delivery instructions as may be timely
provided by the Company; (B) no notices of inability to supply have been
provided by Aurobindo to Citron under the Distribution Agreement as of the
Effective Time; (C) Aurobindo will cooperate with each of the Company and Citron
to apportion the debit notes applicable to Citron and the Company, respectively,
contemplated by the second paragraph of Section 2.2 of the Distribution
Agreement and Section 2.2 of this Agreement, as applicable, in accordance with
the allocation of economic responsibilities’ contemplated by this Section 27;
and (D) COMPANY and Citron shall upon Closing of the Purchase Agreement jointly
communicate in writing the (x) Effective Time; and (y) confirmation and
variation as in (A) above;

 

27.6This Agreement is binding upon the parties hereto Bum the Signing Date but
shall not go into effect until the Effective Time. Prior to the Effective Time,
this Agreement shall not be amended, modified or terminated without the prior
written consent of COMPANY, Citron and Aurobindo. Subsequent to the Effective
Time, this Agreement shall not be amended, modified or terminated without the
prior written consent of COMPANY and Aurobindo Notwithstanding anything
contained herein this Agreement, this Agreement shall be null and void if either
COMPANY or Citron does not notify Aurobindo of the consummation of the closing
provided for in the Purchase Agreement on or before January 31, 2107, subject to
COMPANY’s unilateral right to extend such January 31, 2017 date to a date no
later than May 31, 2017 (or such later date beyond May 31, 2017 as requested by
Citron and agreed by Aurobindo). If this Agreement becomes null and void
pursuant to the immediately preceding sentence, the Distribution Agreement shall
continue as it is between Citron and Aurobindo.

 

 -16- 

 

 

28.Other Matters

 

28.1In addition to and without limitation upon any of COMPANY’s rights under
this Agreement, Floor Prices established under this Agreement will not be
subject to increase except as a result of substantial increases in applicable
API costs or as a result of material changes in relevant currency exchange
rates. Aurobindo will furnish COMPANY such documentation as COMPANY may
reasonably request which supports any such increases in accordance with the
standards of this Section.

 

28.2Aurobindo agrees and covenants that it will not sell or offer to sell
Products that Aurobindo is entitled to sell, by the terms of this Agreement, to
third parties for distribution in the Territory on terms and conditions
(including, without limitation, invoiced prices and profit sharing
participations) more favorable to such third parties than the terms and
conditions then being provided (or then offered) to COMPANY.

 

28.3This Agreement may be executed in one or more counterparts (including by
facsimile or electronic .pdf submission), each of which shall be deemed an
original, and all of which shall constitute one and the same agreement and shall
become effective when one or more counterparts have been signed by each of the
parties hereto, it being understood that the parties hereto need not sign the
same counterpart.

 

28.4Aurobindo has advised COMPANY that Aurobindo and Citron have entered into
two amendments to the Distribution Agreement, Addendum 1 dated July 1, 2016
(“Addendum 1”) and Addendum 2 dated September 3, 2011 (“Addendum 2”, and
together with Addendum I, the “Amendments”). Addendum 1 is replaced in its
entirety by Annexure A. Aurobindo confirms that the pricing reflected in
Annexure A is identical to the pricing reflected in Addendum 1. Addendum 2 is
annexed hereto as Annexure D. Aurobindo and COMPANY agree that effective as of
the Effective Time, the provisions of Addendum 2 shall be deemed to be
incorporated herein verbatim, except that, with respect to periods on and after
the Effective Time, all references to Citron in Addendum 2 shall be deemed to be
references to COMPANY. Aurobindo acknowledges that COMPANY shall have no rights
or obligations under the Amendments with respect to any periods of time prior to
the Effective Time.

 

WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate, by (heir duly authorized officers or representatives as of the day
and year first written below.

 

 -17- 

 

  

For Romeo Charlie Acquisition I, LLC   For Aurobindo Pharma Ltd.            
Name: Salvatore J. Guccione   Name: Title: Chief Executive Officer   Title:
Date:   Date:             For Citron Pharma LLC (as to     Section 27 only)    
            Name: Vimal Kavuru     Title: Manager and Chief Executive Officer  
  Date:    

 

 -18-