Exhibit 10.2

 

SETTLEMENT AGREEMENT

Under

RLS — Epirus BOW015 Manufacturing and Supply Agreement

 

This Settlement Agreement, dated as of 22 April, 2015 (the “Settlement Effective
Date”), is by and between Epirus Switzerland GmbH, a Swiss corporation having
its principal place of business at General-Guisan-Strasse 6, 6303 Zug,
Switzerland (“Epirus”), and Reliance Life Sciences Pvt. Ltd. having its
registered office at Dhirubhai Ambani Life Sciences Centre, Plot no. R-282, TTC
Area of MIDC, Thane Belapur Road, Rabale, Navi Mumbai - 400 701, India
(“Reliance”).

 

RECITALS:

 

WHEREAS, Epirus and Reliance are parties to that certain Manufacturing and
Supply Agreement dated 14 May, 2014 (as amended or supplemented, the “Supply
Agreement”; capitalized terms defined in the Supply Agreement shall have the
same meanings when used in this Settlement Agreement), pursuant to which
Reliance supplies Epirus and Epirus Licensees with BOW015, in accordance with
the terms and conditions stated therein; and

 

WHEREAS, the Parties are in dispute on the scope of Reliance’s manufacturing
supply rights under the Supply Agreement and whether Epirus is in breach of its
obligations thereunder (the “Dispute”), and Reliance has initiated an
arbitration proceeding under the auspices of the International Chamber of
Commerce (the “ICC”) entitled Reliance Life Sciences Private Limited (India) v.
Epirus Switzerland GmbH (Switzerland), ICC Case No. 20894/RD (the
“Arbitration”); and

 

WHEREAS, to avoid the delay, uncertainty, and expense of arbitration, the
Parties desire to resolve the Dispute, and Reliance is prepared to withdraw its
arbitration demand, without any admission of liability by either Party, on the
terms and conditions set forth in this Settlement Agreement; and

 

NOW THEREFORE, in consideration of the foregoing premises, the mutual promises
and covenants of the Parties hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties, intending to be legally bound, do hereby agree as follows.

 

TERMS AND CONDITIONS

 

1.                                      Final BOW015 Batch Demand; Technology
Transfer.

 

a.                              Attached as Annex A is Epirus’s final batch
demand for BOW015 to be manufactured by Reliance under the Supply Agreement, on
the schedule and in the amounts reflected thereon (the “Final BOW015 Batch
Demand”), with (i) the initial fifteen (15) batches indicated thereon, to be
manufactured on or before 30 June 2016, being a binding forecast on both Parties
(the “Binding Forecast”), and (ii) the final five (5) batches indicated thereon,
to be manufactured on or before 31 December 2016, being a non-binding forecast
(the “Non-Binding Forecast”), subject to Epirus’s obligation, by no later than
31 December 2015, to finalize and

 

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make binding the Non-Binding Forecast (it being understood that Epirus shall be
permitted to request fewer, but not more than, five (5) batches as part of such
final demand).  The finalized version of the Non-Binding Forecast so made by
Epirus shall be fully binding on Reliance in the same manner as the Binding
Forecast.  Epirus or an Epirus Licensee shall deliver Purchase Orders for the
respective Batches on a quarterly basis, including identifying if such Batch
shall be delivered as Drug Substance (with an agreed Supply Price of US$300,000
per 640L Batch, Ex-Works (INCOTERMS 2010), equal to approximately 380 to 420
grams of BOW015 API) or BOW015 Finished Product at $85/vial, and Reliance shall
be responsible for Manufacturing such Batches and fulfilling the related
Purchase Order on the terms and conditions set forth in the Supply Agreement. 
The Parties further agree that all of the price, payment, delivery, inspections,
quality, and other supply terms under the Supply Agreement shall remain in full
force and effect in respect of the Final BOW015 Batch Demand.

 

b.                              For clarity, the BOW015 technology transfer
contemplated by Section 7.5 of the Supply Agreement shall continue in full force
and effect during the term of this Settlement Agreement, and Epirus shall
compensate Reliance as per Section 7.5 for any such technology transfer.

 

2.                                      Reliance Transfer of BOW015 Marketing
Authorization.  Reliance shall use all reasonable commercial efforts to
transfer, to Epirus or its designee, the BOW015 marketing authorization (the
“BOW015 MA”) granted by the Drug Controller General of India (“DCGI”), currently
held in the name of Reliance on behalf of Epirus, provided that (i) Epirus shall
compensate Reliance for such BOW015 MA transfer in accordance with Annex B
attached hereto, and (ii) Reliance shall provide no assurance or guarantee to
Epirus or any Epirus Licensee that the BOW015 MA transfer shall be approved or
otherwise permitted by DCGI, or the scope of the final terms to be required by
DCGI in respect thereof.

 

3.                                      Settlement Fee.  Epirus shall pay to
Reliance a fee of US$2,250,000 (the “Settlement Fee”), payable as follows:

 

a.                              An initial payment of US$750,000, payable within
ten (10) days of the Settlement Effective Date; and

 

b.                              Three (3) installments of US$500,000 each,
payable within ten (10) days of each of the following dates: 31 August, 2015, 31
January, 2016, and 30 June, 2016, for total installment payments equal to
US$1,500,000.

 

The Settlement Fee shall be made by means of transfer to a bank account
designated by Reliance in writing.

 

If Epirus fails to make the initial payment or any installment payment to
Reliance under this Settlement Agreement within the applicable payment due dates
as mentioned above, Reliance shall be entitled to reject any Purchase Order
placed by Epirus until such time as Epirus has made payment to Reliance, in
full, of the outstanding amount due.

 

4.                                      Termination of Supply Agreement and All
Related Agreements.  Following the satisfaction in full of the requirements set
forth in this Settlement Agreement, the Parties agree that the Supply Agreement,
the Quality Agreement dated May 14, 2014 between Epirus

 

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and Reliance, the Safety Data Exchange Agreement dated October 2014 between
Ranbaxy Laboratories Limited (“Ranbaxy”), Epirus and Reliance, and the
Tripartite Letter for Quality Agreement dated October 2014 between Ranbaxy,
Epirus, and Reliance, shall be terminated and no longer in force and effect,
without any action required by either Party, subject to the survival of any
terms expressly stated therein to survive any such termination.

 

5.                                      Mutual Release and Withdrawal of All
Claims Arising Under the Supply Agreement.

 

a.                              Definition of “Claim” and “Claims”.  As used
herein, the term “Claim” or “Claims” means any and all manner of action or
actions, claim or claims for relief in law or in equity, suits, debts, liens,
contracts, promises, liabilities, controversies, injury to person or property,
claims, predicate acts, demands, judgments, damages, losses, attorneys’ fees,
costs or expenses, whether fixed or contingent, direct or indirect arising under
or relating to the Supply Agreement that were or that could have been raised
under the Supply Agreement.

 

b.                              Release by Reliance.  Reliance, for itself, its
successors, assigns, subsidiaries, parent companies, affiliated companies,
officers, directors, employees, and agents, including attorneys, whether past or
present, hereby releases and forever discharges Epirus, its successors, assigns,
subsidiaries, parent companies, affiliated companies, officers, directors,
employees, and agents, including attorneys, whether past or present, including
all other entities controlled by or under common control with Epirus, from any
and all causes of Claims arising under the Supply Agreement of every kind and
nature whatsoever, whether known or unknown, that Reliance has or may have,
whether at law or equity, including but not limited to any claims that could
have been asserted in the Arbitration, provided, however, that nothing herein
shall in any way impair or restrict the rights of any of the Parties to enforce
the terms of this Settlement Agreement.

 

c.                               Release by Epirus.  Epirus, for itself, its
successors, assigns, subsidiaries, parent companies, affiliated companies,
officers, directors, employees, and agents, including attorneys, whether present
or past, hereby releases and forever discharges Reliance, its successors,
assigns, subsidiaries, parent companies, affiliated companies, officers,
directors, employees, and agents, including attorneys, whether past or present,
including all other entities controlled by or under common control with
Reliance, from any and all causes of Claims arising under the Supply Agreement
of every kind and nature whatsoever, whether known or unknown, whether at law or
equity, that Epirus has or may have, including but not limited to any claims
that could have been asserted in the Arbitration, provided, however, that
nothing herein shall in any way impair or restrict the rights of any of the
Parties to enforce the terms of this Settlement Agreement.

 

d.                              No Ongoing Exclusivity Obligation.  For the
avoidance of doubt, to the extent any obligation on Epirus to use Reliance as
its exclusive supplier of BOW015 ever existed, it is extinguished as of the
Settlement Effective Date and may not serve as basis for any future Claims by
Reliance.

 

e.                                       Reliance Rights Relating to Infliximab
Product.  For the avoidance of doubt, Reliance may manufacture, sell, market and
distribute or offer to sale the product containing infliximab, or that is
biosimilar to infliximab (a “Reliance Infliximab Product”),

 

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provided that (a) such Reliance Infliximab Product has been developed without
the benefit of, and (b) the manufacture, distribution and sale of such Reliance
Infliximab Product does not require, use, refer to, incorporate or rely upon,
any (i) Epirus Materials or (ii) Epirus Confidential Information.

 

f.                                        Withdrawal of Arbitration Proceeding. 
Reliance shall notify the ICC of its desire and intent to discontinue the
Arbitration within fifteen (15) days of the Settlement Effective Date, subject
to Reliance receiving the initial payment of US$750,000 from Epirus.  Reliance
agrees to a further stay of Epirus’s obligation to file its Answer to Reliance’s
Request for Arbitration and to the appointment of an Arbitrator for fifteen (15)
days from Settlement Effective Date.

 

6.                                      Miscellaneous Provisions.

 

a.                                      Construction.                       Each
of the Parties acknowledges that this Settlement Agreement has been negotiated
at arms-length among persons knowledgeable in the matters dealt with herein, and
each party participated in its drafting.  Any rule of law or other statutes,
legal decisions or common law principles which would require the interpretation
of any ambiguities in this Settlement Agreement against the party that drafted
it is of no application and hereby is expressly waived.

 

b.                                      Costs; Expenses.  Except as provided
herein, each Party shall be responsible for its own costs and expenses,
including attorney’s fees, related to the resolution of the Dispute and/or the
Arbitration.

 

c.                                       No Admission of Liability.  The Parties
understand and agree that neither the execution of this Settlement Agreement, or
the Releases provided for herein, nor the performance of this Settlement
Agreement, shall be construed as an admission of any liability by either of the
Parties.

 

d.                                      Confidentiality.  This Settlement
Agreement, including the terms and conditions set forth herein, shall be covered
by Section 12 of the Supply Agreement, including provisions for required
disclosure to comply with applicable laws or government regulations, including
securities exchange regulations.

 

e.                                       Counterparts; Signatures.  This
Settlement Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.  This Settlement Agreement may be executed by
facsimile signatures and such signatures shall be deemed to bind each Party as
if they were original signatures.

 

f.                                        Entire Agreement.  This Settlement
Agreement sets forth the entire understanding and agreement between the Parties
with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements, arrangements and understandings related thereto.

 

g.                                       Understanding of Agreement.  The
Parties, and each of them, represent and warrant that they have read this
Settlement Agreement, that they have had adequate time to

 

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consider it, that they have consulted with an attorney prior to executing this
Settlement Agreement, that they understand the meaning and application of this
Settlement Agreement, that they have not relied on any representations or
statements of any other Party or its respective counsel with respect to the
subject matter of this Settlement Agreement, and that they have signed this
Settlement Agreement knowingly, voluntarily, and of their own free will with the
intent of being bound by it.

 

h.                                      Waiver; Amendments.  Failure by either
Party to enforce any rights under this Settlement Agreement shall not be
construed as a waiver of such rights nor shall a waiver by either Party in one
or more instances be construed as constituting a continuing waiver or as a
waiver in other instances.  No modification or amendment to this Settlement
Agreement, nor any waiver of any rights, will be effective unless assented to in
writing by the party to be charged, and the waiver of any breach or default will
not constitute a waiver of any other right hereunder or any subsequent breach or
default.

 

i.                                          Choice of Law; Venue.  The validity,
performance, construction and effect of this Settlement Agreement shall be
governed by the laws of the State of New York, without regard to any conflicts
of laws principles.  All disputes arising out of or in connection with this
Settlement Agreement shall be finally settled under the Rules of Arbitration of
the International Chamber of Commerce by one arbitrator appointed in accordance
with the said Rules.  The place of the arbitration shall be New York, New York. 
The language of the arbitration shall be English.  Judgment upon any
award(s) rendered by the arbitrator may be entered in any court having
jurisdiction thereof.  Except as may be required by law, neither a party nor its
representatives nor a witness nor an arbitrator may disclose the existence,
content, or result of any arbitration hereunder without the prior written
consent of both parties.

 

j.                                         Severability.  If any provision of
this Settlement Agreement is held to be illegal or unenforceable, such provision
shall be limited or eliminated to the minimum extent necessary so that the
remainder of this Settlement Agreement will continue in full force and effect
and be enforceable.  The Parties agree to negotiate in good faith an enforceable
substitute provision for any invalid or unenforceable provision that most nearly
achieves the intent of such provision.

 

k.                                      Further Assurances.  Consistent with the
terms and conditions hereof, to the extent possible and permitted by law, each
Party shall do and perform or cause to be done and performed all such further
acts and things and shall execute and deliver all such other instruments,
certificates, and other documents as any other Party hereto may reasonably
require in order to carry out the intent and accomplish the purposes of this
Settlement Agreement.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Settlement Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first written above.

 

 

For and on behalf of

For and on behalf of

 

 

EPIRUS SWITZERLAND GMBH

RELIANCE LIFE SCIENCE PVT LTD

 

 

Signature :

/s/ Amit Munshi

 

Signature :

/s/ K.V. Subramaniam

 

 

 

 

 

Name :

 

 

Name :

K.V. Subramaniam

 

 

 

 

 

Title :

Amit Munshi, Managing Director

 

Title :

President

 

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ANNEX A

 

FINAL BOW015 BATCH DEMAND

 

2015

 

2016

Binding Portion of Forecast

 

Non-Binding

Portion of

Forecast**

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Q3

 

Q4

5*

 

1

 

1

 

2

 

3

 

3

 

2

 

3

 

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* Batches already under POs delivered by Epirus and Epirus Licensee.

** Epirus shall make final changes and commitment to these batches by no later
than 31 December, 2015.

 

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ANNEX B

 

Details of Professional Fees for Regulatory Support Services

 

Hourly Rates of Non-Clinical Staff

 

Resources

 

Fee Rate (USD per hour)

Group Head

 

150

Manager

 

100

Associate

 

70

Administrative Support

 

50

 

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* Pass through expenses will be charged extra at actuals plus 5% basis.

 

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