Document:

Unassociated Document

Execution Version

TOLL MANUFACTURING CONVERSION AGREEMENT

This TOLL MANUFACTURING CONVERSION AGREEMENT (the "Agreement"), effective as of May 27, 2011 (the "Effective Date") is by and between JUBILANT CADISTA PHARMACEUTICALS INC., a Delaware corporation, having offices at 207 Kiley Place, Salisbury, Maryland 21801 ("Cadista") and JUBILANT LIFE SCIENCES LTD., a company organized under the laws of India, having offices at Plot 1-A Institutional Area, Sector 16/A, Noida 201 301, Utter Pradesh, India  ("Jubilant").

WITNESSETH

WHEREAS, subject to the terms and conditions set forth in this Agreement, Jubilant wishes to have Cadista manufacture for Jubilant the Products (as such term is defined below) and Cadista is agreeable to manufacturing and supplying the Products as provided herein;

NOW, THEREFORE, in consideration of the foregoing premises, and the mutual covenants and obligations set forth herein, Cadista and Jubilant hereby agree as follows:

1.           DEFINITIONS.  For purposes hereof the following terms shall have the meanings set forth:

"Affiliate(s)" means any firm, corporation (including, without limitation, service corporation and professional corporation), partnership (including, without limitation, general partnership, limited partnership and limited liability partnership), limited liability company, joint venture, business trust, association or other entity that now or in the future, directly or indirectly, controls, is controlled by or is under common control with a party.  For purposes of the foregoing, "control" shall mean, with respect to:  (a) a corporation, the ownership, directly or indirectly, of greater than fifty percent (50%) of the voting power to elect the directors thereof; and (b) any other entity, managerial control by virtue of a written agreement.  For purposes of this Agreement, Jubilant and Cadista shall be deemed not to be Affiliates, Cadista’s subsidiaries, if any, shall be deemed not to be Affiliates of Jubilant  and Jubilant’s Affiliates shall be deemed not to be Affiliates of Cadista.

"API” means active pharmaceutical ingredient.

“Bankruptcy Code” is defined in Section 7.2(g).

“Business Purpose” is defined in Section 8.1.

"cGMP" or “Good Manufacturing Practice” means the FDA's then-current Good Manufacturing Practices applicable to the manufacture of pharmaceutical products for human use in the United States, the FDA's guidance documents, and all successor regulations.

[***Confidential treatment requested pursuant to a request for confidential treatment filed with the 

Securities and Exchange Commission. Omitted portions have been separately filed with the Commission.]

  

1

  

"Certificate of Analysis" shall mean a document identified as such and provided by Cadista to Jubilant that sets forth the analytical test results, in accordance with the FDA, for a specified lot of Product shipped to Jubilant or its designee hereunder.

"Confidential Information" has the meaning set forth in Section 8.2.

"DEA" means the United States Drug Enforcement Administration.

“Disclosing Party” is defined in Section 8.1.

"Effective Date" is defined in the first paragraph of this Agreement.

“Facility” is defined in Section 2.4.

"FDA" means the United States Food and Drug Administration, or any predecessor or successor agency or division within the Food and Drug Administration of the United States of America.

"FD&C Act" means the Food, Drug and Cosmetic Act and the rules and regulations of the FDA promulgated hereunder.

“Forecast” has the meaning set forth in Section 2.3(a).

“Governmental Authority” shall mean any court, administrative agency or commission or other governmental agency, body or instrumentality, domestic (whether federal, state or local) or foreign.

"Indemnified Party" means, collectively, the party entitled to receive indemnification as provided in this Agreement and such party's Affiliates, distributors, directors, officers, shareholders, employees, representatives, agents, sublicensees, successors and assigns.

"Indemnifying Party" means the party required to provide indemnification as provided in this Agreement.

"Label", "Labeled" or "Labeling" means all labels and other written, printed or graphic matter upon (i) the Products or any container or wrapper utilized with the Products or (ii) any written material accompanying the Products, including without limitation, package inserts.

"Liabilities" has the meaning set forth in Section 4.2 hereof.

 

  

2

  

"Manufacturing Costs of Cadista" shall mean the sum of the costs of labor (including allocable employee benefits and employment taxes), Materials that are not supplied free of charge by Jubilant, energy, utilities and other charges (including packaging and labeling) incurred for the manufacture of the Product (including costs for quality control), and normal production overhead (i.e., indirect labor, maintenance, facilities and utilities and other reasonable allocable overhead of the manufacturing factory), all as recorded in Cadista’s accounting records and determined in accordance with the generally accepted accounting principles of the United States, consistently applied throughout the specified period.

"Manufacturing Process" shall mean any and all operations required or necessary in the manufacture, handling, testing, filling, processing, packaging, labeling and storage of the Products.

"Materials" means (i) all raw materials, chemical intermediates, components, active ingredients (including API) and other ingredients required in the Manufacturing Process for the Products, and (ii) Product Packaging Materials, or any materials described in the package configuration or bill of materials.

“New Price” is defined in Section 2.2(d).

“New Price Documentation” is defined in Section 2.2(d).

"Packaging Specifications" means packaging specifications in effect on the Effective Date, or as subsequently amended in accordance with this Agreement, for each Product sold under the Product name.

"Person" means an individual, corporation, partnership or other entity.

“PO” has the meaning set forth in Section 2.3(b).

"Price" means the price to be paid by Jubilant to Cadista for the Products as set forth on Exhibit A hereto, as the same may be amended by the parties from time to time as provided herein.

“Proceeding” means any action, suit, demand or claim, and any legal, administrative, arbitration or other alternative dispute resolution proceeding, hearing or investigation.

"Products" or "Product" means, collectively, the products (including private labeled Products) in such dosage and strength as set forth in Exhibit A, manufactured in accordance with the Product Specifications.

"Products ANDA" means the ANDA relating to the Products owned and controlled by Jubilant.

“Product Packaging Materials” shall mean all packaging materials used in the Manufacturing Process for, and shipment of, Product as in effect on the Effective Date, including primary and secondary containers, closures, tertiary packaging materials, including product labeling, all as revised from time to time in accordance with the terms and conditions of this Agreement.

  

3

  

"Product Specifications" means the Product Specifications set forth in Exhibit B hereto.

“Proposed Revised Price” is defined in Section 2.1.

“Receiving Party” is defined in Section 8.1.

“Regulatory Approval” means the license or marketing approval necessary as a prerequisite for marketing a Product in the Territory.

"Term" means the term of this Agreement as provided in Section 7.1.

"Territory" means the United States of America (including all of its states, Puerto Rico, the District of Columbia, and all territories and possessions).

“Third Party” means any entity other than Cadista or Jubilant or an Affiliate of Cadista or Jubilant.

“Work in Progress” shall mean any Materials, which have been partially converted into, but are not yet, a Product.

2.             MANUFACTURE AND SUPPLY.

2.1           Supply Obligations. (a) Cadista shall manufacture, package and testfor Jubilant on a made to order basis the Products, in accordance with the Product Specifications and the terms hereof.  Cadista will be paid toll manufacturing charges for manufacturing  the Products at the prices listed on the attached Exhibit A during the Term.  The prices listed in Exhibit A will be reviewed by the Parties on an annual basis not later than thirty (30) days prior to the expiry of each calendar year during the Term.  The Parties shall negotiate adjustments to the prices for the Products in good faith and attempt to reach Agreement on the adjusted prices for the immediately following calendar year.  Without limiting the foregoing, in the event that the Manufacturing Costs of Cadista increase, Cadista shall send notice (the “Cadista Notice”) to Jubilant, documenting in detail the increased Manufacturing Cost of Cadista and proposing revised prices (“Proposed Revised Prices”) for Product, which Proposed Revised Prices shall not reflect an increase on a per unit basis of more than the actual dollar per unit increase in Manufacturing Costs of Cadista not already reflected in the pricing.  The Parties agree to negotiate in good faith any reasonable adjustment to such prices (up to the Proposed Revised Price) for the affected Products. In the event that after negotiating in good faith, in connection with the annual price adjustment described above or in connection with a  Cadista Notice containing a Proposed Revised Price, the parties are unable to reach agreement on the adjusted price (i) prior to the commencement of the next calendar year, in the case of annual price adjustments, on (ii) within thirty (30) days of Jubilant’s receipt of Cadista Notice, in the case of Cadista’s provision of a Proposed Revised Price, either party may terminate this Agreement with respect to such Product in accordance with Section 7.2(d) below.  Cadista may not send the Cadista Notice prior to the one year anniversary of this Agreement.  Products may be added to this Agreement by amending Exhibits A and B by mutual written agreement of the parties, in the form of Exhibit C, or otherwise.

  

4

  

If notice of termination is not sent by Jubilant within forty-five (45) days after receipt of the Cadista Notice, the Proposed Revised Price (or if there was a negotiation, the last price proposed by Cadista (which must be not greater than the Proposed Revised Price)) shall become binding and effective on purchase orders placed forty-five (45) calendar days after Jubilant’s receipt of the Cadista Notice documenting the increase in the Manufacturing Costs of Cadista.

(b) Except as provided in Sections 2.3(h),  3.2 and 3.3, Jubilant shall supply all Materials necessary for the manufacture of Products free of charge to Cadista.  To the extent the parties agree that Cadista shall procure certain Material then Cadista’s out-of-pocket costs for such Material (including, without limitation, all shipping, insurance, tariffs, customs) and its procurement will be added to the purchase price for the affected Product.

 

2.2.           Product Labeling.

(a) Packaging Standards.  Cadista represents and warrants that the Products will be packaged in accordance with the Packaging Specifications provided by Jubilant. Jubilant represents and warrants that the Packaging Specifications it provides to Cadista (including without limitation artwork, names, logos and trademarks of Jubilant and/or its Affiliates) comply with applicable laws, rules and regulations promulgated by any Governmental Authority having jurisdiction over the manufacture and distribution of the Products and to the best of its information and knowledge do not infringe or violate any intellectual property or proprietary rights of any third party.  Jubilant acknowledges that it has reviewed and approved all Product Packaging Materials.

(b) Future Required Revisions.  Subject to the provisions of Section 2.2(d), all costs and expenses incurred as a result of revisions to the Packaging Specifications required by any applicable Governmental Authority from and after the Effective Date shall be borne by Jubilant, including but not limited to Materials costs, and costs of any Materials or Work in Progress rendered redundant, obsolete or unusable as a result of such revisions. Subject to the provisions of Section 2.2(d), all costs and expenses incurred as a result of revisions to Product Specifications or Manufacturing Process required by any applicable Governmental Authority from and after the Effective Date shall be borne by Jubilant, including but not limited to capital expenditures, Materials costs and costs of any Materials or Work in Process rendered redundant, obsolete or unusable as a result of such revisions. Subject to the provisions of the preceding sentence, all printed Product Packaging Materials so rendered redundant, obsolete or unusable as a result of such revisions, shall be owned by Cadista and must be destroyed on instruction from Jubilant at Jubilant’s expense.

  

5

  

(c) Jubilant Requested Specification Revisions.  Cadista shall make such revisions to the Packaging Specifications as are reasonably requested in writing by Jubilant (excluding any revisions described in Section 2.2(b)) with leadtime acceptable to Cadista.  Cadista may, at its option, make such revisions to the Product Specifications as are reasonably requested in writing by Jubilant (excluding any revisions described in Section 2.2(b)) with leadtime acceptable to Cadista.  In connection with any revision described in this Section 2.2(c), Jubilant shall, at its sole cost and expense, and in accordance with Section 2.2(d), provide to Cadista, in a digital format acceptable to Cadista, artwork for changes in Product Specifications or Packaging Specifications, relating to graphics.  For any such revision, Jubilant shall bear all costs and expenses incurred as a result of any revision described in this Section 2.2(c), including but not limited to Materials costs and costs of any Materials or Work in Progress rendered redundant, obsolete or unusable as a result of such revision.

(d) Price Revisions for Changes.  Prior to the implementation of any changes to Product Specifications, Packaging Specifications, Manufacturing Processes, or Product Packaging Materials as described in Sections 2.2(b) and 2.2(c), Cadista will provide a detailed description of Cadista’s incremental costs to be incurred by Cadista with respect to such change (“New Price Documentation”).  The parties agree to negotiate in good faith to reach agreement in writing on the new price (the “New Price”) of any Product manufactured hereunder by Cadista, which is affected by any such change, which price shall be the existing price increased by the amount of any incremental costs to be incurred by Cadista as a result of such change.  In the event that after negotiating in good faith the parties are unable to reach agreement on the New Price Documentation within thirty (30) calendar days of receipt of a detailed description of Cadista’s increased costs by Jubilant, Jubilant may terminate this Agreement in accordance with Section 7.2(e) below, if the new price (or if there is a negotiation, the last price proposed by Cadista, which must be less than or equal to the New Price) is not acceptable. If notice of termination of this Agreement is not sent by Jubilant within forty-five (45) after receipt of the proposed New Price Documentation, the New Price (or if there is a negotiation, the last price proposed by Cadista, which must be less than or equal to the New Price), shall become binding and effective on purchase orders placed after forty-five (45) calendar days after Jubilant’s receipt of Cadista’s proposed New Price Documentation.

(e)  Equipment.  If Cadista requires dedicated equipment to complete its duties hereunder, the cost of such dedicated equipment and its maintenance and installation shall be paid for by Jubilant and shall be the property of Jubilant.  At the termination of Agreement with respect to all affected Products for which said equipment was used, Jubilant will remove such equipment from Cadista’s premises, at Jubilant’s expense unless the parties agree otherwise in writing.

 

2.3  Forecasts; Excess Orders.

(a)           Jubilant shall annually provide a good faith annual forecast (“Forecast”) of the timing and pace of its expected specific orders for each Product broken down on a monthly basis. The first such Forecast shall be given upon execution of this Agreement and shall cover orders during the remainder of the 2011 calendar year, and subsequent Forecasts shall be delivered to Cadista on or before each November 1, with respect to the following calendar year. The estimates in each Forecast shall be good faith forecasts to assist Cadista in planning its production and shall be non-binding and without prejudice to Jubilant’s subsequent firm orders.

  

6

  

(b)           All purchases and sales between Jubilant and Cadista will be initiated by Jubilant’s issuance of written purchase orders sent via e-mail, airmail or facsimile (each a “PO”).  Each PO shall specify the date of delivery to Jubilant (the “Delivery Date”) which shall be no earlier than ninety (90) days after the date of such order (“Leadtime”), the delivery destination within the U.S. (the “Delivery Destination”) for the ordered Product, the transportation carrier to be used for delivery thereof, and the Delivery Date.  If any PO fails to indicate a particular transportation carrier to be used for delivery, Cadista shall have the right to select a transportation carrier.  Cadista is manufacturing the Product on a made to order basis and may deliver the Product to Jubilant on or before the Delivery Date.  Quantities of each SKU of the Products actually shipped by Cadista may vary from the quantities specified in any order by up to ten percent (10%), and shall still be deemed to be in compliance with such orders; provided, however, that Jubilant shall only be invoiced and required to pay for the quantities that Cadista actually ships to Jubilant which will be full case quantities; provided further that any deviation in the ordered quantities of the Products up to ten percent (10%) will at Jubilant’s election increase/decrease, as appropriate, the quantity of the Products specified in Jubilant's next order of the Products (without regard to forecasted quantities).

(c)           In the event that Jubilant shall in any period, submit purchase orders (“Excess Orders”) for a product in excess of one hundred twenty five percent (125%) of the most current Forecast for such period, Cadista shall use commercial reasonable efforts to fill such Excess Orders as promptly as practicable, but shall not be in breach hereof if notwithstanding such efforts, it shall be unable to fill such Excess Orders.

(d)           If Cadista becomes aware that despite using commercially reasonable efforts, it cannot supply at least ninety percent (90%) of any month's estimated purchase quantity of each Forecast, Cadista will inform Jubilant in writing as soon as possible of the specific purchase orders that Cadista cannot fulfill, but in no event later than ten (10) days from Cadista becoming aware of same and the reasons that Cadista cannot fulfill such orders and Jubilant will have the remedies set forth in Section 3.5 (if such failure to supply constitutes a Supply Interruption).

(e)           All Products ordered by Jubilant shall be in amounts consistent with the then-current minimum order sizes and minimum batch sizes, or multiplies thereof. Cadista shall not change the minimum batch size for any Product without providing prior notice to Jubilant.

(f)           In ordering and delivering Product, Cadista and Jubilant may use their respective standard forms, provided that nothing in those forms shall be construed to modify or amend the terms and conditions of this Agreement, and, in the case of any conflict herewith, the terms and conditions of this Agreement shall control.

(g)           Cadista’s obligation to supply is conditioned on the timely receipt of Materials from Jubilant.

  

7

  

(h)           In the event any Materials are lost or wasted (beyond the yield threshold provided in section 3.10) during, before or after processing by Cadista due to the negligence of Cadista or due to Product failing to meet Product Specifications, Cadista shall reimburse Jubilant for such Materials in an amount equal to Jubilant’s cost for such Materials.  Notwithstanding the foregoing, if any failure of Product to meet Product Specifications is caused by Materials not meeting their specifications then the cost of the lost or wasted Materials shall be borne by Jubilant.  To the extent Cadista pays for Materials lost or wasted it will not be responsible for the cost of Materials in a replacement batch.

2.4           Facility and Records Maintenance; Audit.

(a) Cadista shall, at all times, maintain and operate the manufacturing facility or facilities at which the Products are manufactured (collectively, the "Facility"), and implement and maintain such quality control procedures, so as to be able to perform its obligations hereunder in compliance with all applicable laws, including, without limitation, cGMPs. Each party shall promptly notify the other upon receipt by it of any adverse notice from any governmental agency relating to the Products, employees, environmental conditions or the operation of the Facility.  Cadista shall maintain true and complete books and records of all data relating to the manufacture, supply and sale of Products. Such review shall not include any financial records of Cadista or its Affiliates. Such audits shall be performed during normal business hours as soon as can reasonably be arranged but in any case not later than thirty (30) days after written notice to Cadista.  Any of Jubilant’s representatives conducting any audit hereunder, at Cadista’s request, shall enter into an agreement with Cadista, its Affiliates or subcontractors with respect to confidentiality containing provisions substantially similar to those set forth in Section 8.  A Cadista representative shall accompany any of Jubilant’s representatives.  In all cases, Jubilant shall ensure that its representatives conduct each such audit so as to cause minimum interference to the normal operation of Cadista’s and its Affiliates' facilities.  In connection with any such audit, Jubilant and its representatives shall comply with those site procedures, instructions of Cadista’s representatives and instructions applicable to employees of Cadista of which Jubilant has been reasonably notified.  Cadista and its Affiliates shall cooperate with and provide reasonable assistance to Jubilant during such audit.  All audits shall be at Jubilant’s sole expense.  Visits by Jubilant’s representatives to Cadista and its Affiliates’ facilities may involve the transfer of confidential information and shall be subject to the terms of Section 8 hereof.  The results of such audits and inspections shall be considered confidential information under Section 8.

(b)           The parties, shall, at Jubilant’s request jointly appoint an independent audit firm, reasonably acceptable to Cadista to audit the books of account of Cadista in order to determine whether Cadista has properly taken into account its incremental costs under Section 2.2(d) and Manufacturing Costs of Cadista under Section 2.1.  The appointed audit firm may perform audits during regular business hours, not more than once in any calendar year and upon reasonable prior notice to Cadista.  Jubilant shall bear the audit fees unless such third party auditor determines that the amount actually paid by Jubilant, in the aggregate, exceeds the amounts to be paid by Jubilant hereunder by $10,000, in which case Cadista shall bear the audit fees. In addition the price for Products shall be adjusted consistent with the auditors’ determination.   The results of the audit shall be final and binding upon the parties. This Section 2.4(b) shall survive termination of this Agreement.

  

8

  

2.5           Third Party Contractors.  Jubilant and Cadista agree that Cadista shall have the right in connection with Cadista's supply obligations hereunder to contract with one or more Third Parties for the manufacture and supply of the Products to Jubilant, provided, however, that: (i) Jubilant must consent in writing (such consent not to be unreasonably withheld); (ii) Cadista shall cause each and every such Third Party to comply fully with the terms and conditions set forth in this Agreement with respect to the confidentiality, indemnity, manufacture and supply of such Products to Jubilant; (iii) Cadista shall remain fully responsible for the manufacture and supply of such Products to Jubilant; (iv) the use of such Third Party shall not increase the price of the Products to Jubilant; and (v) Cadista shall defend and hold harmless Jubilant from all acts and omissions on part of such Third Party.

2.6           Products ANDA.  Jubilant shall be responsible, at its own cost, for the maintenance of the Products ANDA.

3.           PACKAGING, DELIVERY AND ACCEPTANCE.

3.1           Delivery of Products.  Jubilant shall provide Cadista with appropriate instructions for each shipment of the Products designating the carrier, destination, method of transport and insurance requirements.  Cadista shall ship Products from its Facilities or the facilities of its Affiliates or permitted subcontractors, if any Ex-works such Facility freight prepaid (as defined in the Incoterms 2010 established by the International Chamber of Commerce), in accordance with Jubilant’s instructions set forth in each respective PO, transmitted to Cadista in accordance with the applicable provisions of this Agreement.  Jubilant shall specify a Delivery Destination within the U.S.  Cadista shall not be responsible for delays due to the actions or omissions of Jubilant’s designated carrier.  In the event Jubilant requests that Cadista store a Product for more than thirty (30) days then the parties will agree on the fee payable by Jubilant to Cadista for such storage.  Jubilant shall be responsible for all sales, use, excise and other taxes and duties imposed by any Governmental Authority that are applicable to the purchase or shipment of Product.  In the event Cadista pays any such taxes, or duties applicable to purchase or shipment of such Product, such amounts paid by Cadista shall be invoiced by Cadista to Jubilant and shall be paid by Jubilant in accordance with the terms of this Agreement.  Cadista shall be responsible for all taxes related to Cadista’s, its Affiliates’, or its subcontractors’ manufacture of a Product, including income, payroll, and business licensing (including privilege) taxes.

  

9

  

3.2           Acceptance and Rejection.  Jubilant shall be entitled to reject any shipment of Products that fails to conform to the Product Specifications or Packaging Specifications at the time of delivery to Jubilant.  Jubilant shall notify Cadista of such rejection within thirty (30) days after delivery of such Products shipment to Jubilant, and shall set forth in such notification the basis under this Agreement for such rejection, including any testing or inspection results, provided, however, that in the event any such non-conformity is latent or was not obvious and could not be readily discovered from a physical inspection of the Products shipment, Jubilant may give written notice to Cadista of its rejection of such shipment within thirty (30) days after Jubilant's discovery of such non-conformance.  Failure to so notify Cadista, or failure to identify the basis under this Agreement for rejection of any Product, shall constitute acceptance of such Product, except to the extent the Product fails to conform to the Product Specifications or Packaging Specifications as the case may be.  After such failure to notify, Jubilant shall be obligated to make payment for such Product in accordance with pricing provisions of this Agreement.  If the parties disagree as to whether any Product meets the Product Specifications or Packaging Specifications and the parties are unable to negotiate a commercially reasonable resolution, then samples and/or batch records, as appropriate, from the disputed shipment shall promptly be submitted for testing and evaluation to an independent Third Party as shall be agreed to in writing by both parties.  The determination of such Third Party as to whether the disputed Product shipment meets the Product Specifications or Packaging Specifications shall be final and binding.  The cost of the testing and evaluation by the independent third party shall be borne by the party whose position is found to be erroneous.

If, pursuant to this Section 3.2, any Products are found not to conform to the Product Specifications or Packaging Specifications, as a result of a cause occurring prior to placement thereof with the carrier (and not arising as a result of the Materials being defective or failing to meet their respective specifications), at Cadista’s option, Jubilant shall either (i) deliver such non-conforming Products to Cadista or (ii) destroy such non-conforming Products in accordance with applicable laws, rules and regulations.  Cadista shall reimburse Jubilant for all reasonable costs and expenses in connection such delivery or destruction, and, at Cadista’s option and as Jubilant’s exclusive remedy, Cadista shall either: (i) credit Jubilant for the amount paid or payable by Jubilant to Cadista for such rejected Product shipment (and reimburse Jubilant for the Material of such rejected batch at Jubilant’s cost for such Materials), or (ii) replace such rejected Product shipment (with Cadista paying Jubilant for all Materials or such replacement shipment in an amount equal to Jubilant’s  cost), at no additional cost to Jubilant, as promptly as reasonably practicable, but in no event later than forty-five (45) days from receipt of notice of non-conformity of such shipment from Jubilant.

Jubilant shall notify Cadista in writing of any claim relating to quantitative deficiencies in any shipment of Product that Jubilant considers to have been caused prior to shipment hereunder within thirty (30) days following receipt of any such shipment.  Any claim for a quantitative deficiency which is not made within such thirty (30) days shall be deemed to have been waived by Jubilant and Jubilant shall be obligated to make payment for such Product in accordance with Section 5 of this Agreement.  In the event Jubilant determines there is a quantitative deficiency from the applicable shipping documentation, the parties shall investigate such deficiency and, if the parties agree that such deficiency occurred prior to shipment, Cadista shall, at Jubilant’s option and as Jubilant’s exclusive remedy for such quantitative deficiency, (a) credit Jubilant for the amount paid by Jubilant to Cadista in excess of the aggregate price for actual quantities shipped; or (b) subject to Cadista having Product on hand at the time of request by Jubilant, rectify any such deficiency by promptly shipping the appropriate quantities of any relevant Product to Jubilant, but in no event later than fifteen (15) calendar days following the occurrence of such a deficiency, in which case Jubilant shall be obligated to pay for any such quantities pursuant to Section 5 of this Agreement.

  

10

  

3.3           Product Recall. (a) In the event of any recall of the Products arising out of, relating to, or occurring as a result of, any act or omission by, Cadista (but specifically excluding the use of defective Materials supplied by or for Jubilant):

(A)  upon substantiation, at the election of Jubilant, either:

(i)           replace the amount of Products recalled (with Jubilant supplying all Materials to Cadista at Jubilant’s cost therefor); or

(ii)           give credit to Jubilant against outstanding receivables due from Jubilant and future purchases of the Products (or refund ,at Jubilant’s option ) in an amount equal to the amount paid by Jubilant for the Products (plus Jubilant’s cost of Materials included in such Products)   so recalled or seized; and

(B)  indemnify and save Jubilant harmless from and against any and all damages to or claims by Third Parties associated with or resulting from any such Recall.

(b)             In the event of any recall or seizure of the Products arising out of, relating to or occurring as a result of any act or omission of Jubilant or defective Materials, Jubilant shall remain responsible to Cadista for the purchase price of the recalled Products, shall be solely responsible for any transportation costs, import duties, if any, taxes, insurance, handling and other costs incurred by Jubilant in respect of such recalled or seized Products, and reimburse Cadista for all transportation costs, if any, taxes, insurance, handling and out-of-pocket costs, if any, incurred by Cadista in respect of such recalled or seized Products, shall promptly reimburse Cadista for all Third Party costs and expenses incurred by Cadista  in connection with such Recall, and shall indemnify and save Cadista harmless from and against any and all damages to or claims by Third Parties associated with or resulting from any such Recall.

(c)             For purposes of this Section 3.3, "recall" shall mean (i) any action by Cadista and/or Jubilant to recover title to or possession of the Products sold or shipped and/or (ii) any decision by Jubilant not to sell or ship the Products to Third Parties which would have been subject to recall if it had been sold or shipped, in each case taken in the good faith belief that such action was appropriate under the circumstances.

(d)             Each party shall keep the other fully informed of any notification or other information, whether received directly or indirectly, which might affect the marketability, safety or effectiveness of the Products, or which might result in liability issues or otherwise necessitate action on the party of either party, or which might result in recall or seizure of the Products.

(e)             Prior to any reimbursement pursuant to this Section 3.3 the party claiming reimbursement shall provide the other with reasonably acceptable documentation of all reimbursable costs and expenses.

  

11

  

(f)             Jubilant shall maintain records of all sales of each Product sufficient to administer adequately a Recall for a period of three (3) years after the termination or assignment of this Agreement (or the period ending with the last expiration date of a Product sold by Jubilant, if that is a longer period).  At Jubilant’s request, Cadista shall provide Jubilant with information and records concerning the Products in Cadista’s possession or control as the manufacturer of such Products which are reasonably necessary to implement the Recall.

(g)             This Section 3.3 shall survive the termination of this Agreement and shall continue for the shelf life of the Product affected hereunder.

3.4           Maintenance of Products.  Jubilant shall store and maintain the Products in compliance with the Product Specifications.

 

 

3.5           Interruption of Supply.  Notwithstanding Section 11.2, if: (i) Cadista is unable to supply the Products to Jubilant in accordance with Cadista's obligations under this Agreement for sixty (60) days or more; or (ii) Cadista fails to deliver a shipment of Products within thirty (30) days of the Delivery Date due to Cadista’s actions or omissions at least once during a calendar quarter for three (3) consecutive quarters (each a "Supply Interruption"), and Cadista does not provide Jubilant with assurance of Cadista’s ability to perform such obligations to Jubilant's reasonable satisfaction, then as Jubilant’s sole remedy  Jubilant may immediately terminate this Agreement with respect to such Product or in its entirety, within 180 days of such event,  upon  thirty (30) days' notice in accordance with Section 7.2(c) hereof.   In the case of a Supply Interruption, then Cadista will return any Service Level Charges (as defined in the Distribution Agreement) relating to the Product for which a Supply Interruption occurs, paid to it by Jubilant under the Marketing and Distribution Agreement) between the parties hereto dated the date hereof, arising from such Supply Interruption  (the “Distribution Agreement”).

3.6           Correspondence with Governmental Authority.  The parties shall as soon as reasonably practicable (and in any event, within six (6) business days of the date of receipt of notice) notify the other party in writing of, and shall provide the other party with copies of, any correspondence and other documentation received or prepared in connection with any of the following events:  (i) receipt of a regulatory letter, warning, or similar item, from the FDA or any other Governmental Authority in connection with any Product, and (ii) any regulatory comments relating to any Product requiring a response or action by the other party; provided, however, that the parties’ obligations under this Section shall continue only during such time as Cadista is manufacturing the given Product for Jubilant in accordance with this Agreement.

  

12

  

	
  

	
3.7

	
Complaints.

(a)  Jubilant shall maintain complaint files for Products in accordance with Good Manufacturing Practices and Jubilant’s standard policy. Cadista shall promptly provide to Jubilant copies of any complaints received by Cadista or its Affiliates with respect to Products and, in connection with such complaints, shall promptly report to Jubilant any findings identified in the Manufacturing Process or distribution that could reasonably be expected to affect the safety or efficacy of the Products throughout their respective shelf lives. Jubilant shall promptly provide Cadista with copies of any complaints received by Customer with respect to Products. All Product re-testing conducted by Cadista shall be at Jubilant's sole cost and expense, such re-testing amounts are to be no greater than the costs and expenses incurred by Cadista in similar tests conducted by Cadista in the ordinary course of business; provided, however, if it is determined that the Product that was the subject of such testing is not in compliance with the Product Specifications, then such re-testing shall be at Cadista's sole cost and expense. Jubilant shall have responsibility for responding to all complaints in the Territory and for promptly providing Cadista with a copy of any responses to complaints, relating to Product. Jubilant shall have responsibility for reporting any complaints relating to Product to the FDA and any other Governmental Authority, including, but not limited to, complaints relating to the manufacture of Product as well as adverse drug experience reports.

 

(b)  Section 3.7 shall survive the termination of this Agreement for the three years after shelf life of the Products affected or until the destruction of such affected Products.

3.8           Additional Covenants of Jubilant.  Jubilant shall (i) not give any purchaser of Products any guarantee or warranty on behalf of Cadista, (ii) not represent itself as an agent of Cadista for any purpose, (iii) follow up and investigate customer and tampering complaints related to the Products, in the Territory, and keep Cadista reasonably informed, as appropriate, as to the nature, status and resolution of such complaints on a timely and regular basis and provide reasonably sufficient information to Cadista to investigate such complaints, and (iv) upon receipt by Jubilant or its designee of any Product, handle, use and store pending sale such Product in compliance with Good Manufacturing Practices, applicable laws, rules, and regulations, and the Product Specifications.

3.9           Obtaining Approvals.  Jubilant shall be responsible for obtaining all Regulatory Approvals that are required in relation to the manufacture (other than general permits for the Facility), distribution and sale of the Products, including, without limitation, the Products ANDA.  Cadista shall be responsible to obtain all Regulatory Approvals related generally to the Facility.

3.10           Yield.  In the event the number of units (i.e. tablets or capsules) in batches of a Product is consistently less than 75% of the number of units that could reasonably be expected to be produced using the Materials used to make the batches, the parties shall meet to discuss improvements to the manufacturing process and which party should bear the cost for the lower yield on a going-forward basis.

  

13

  

4.           PRODUCT TESTING; INDEMNIFICATION; INSURANCE.

4.1           Product Testing.  Cadista shall conduct, or cause to be conducted, all physical parameters and in-process testing with respect to each batch of Products to be supplied pursuant hereto prior to delivery thereof to Jubilant.  Cadista shall retain or cause to be retained a sample of each batch tested for at least the shelf life of such batch plus one (1) year, or such longer period as may be required by cGMPs. Cadista will administer the stability program as outlined in the approved Products ANDA.  To the extent requested by Jubilant or as required by applicable law, each shipment of Product by Cadista will be accompanied by a Certificate of Analysis.  Cadista acknowledges that Jubilant has requested that each shipment of Product be accompanied by a Certificate of Analysis.

4.2           Indemnification by Jubilant.  Jubilant shall indemnify, defend and hold harmless Cadista, its Affiliates ,and their respective employees, officers, directors and agents from and against any and all liabilities, losses, claims, demands, assessments, fines, damages, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses and all costs of defense) (collectively, "Liabilities") arising out of, relating to, or incidental to (a) the handling, storage, transportation, use, distribution, promotion, marketing and sale of the Products, in each case  by Jubilant or its Affiliates pursuant to this Agreement in the Territory, except for any Liabilities for which Cadista has agreed to indemnify Jubilant pursuant to and subject to the limitations set forth herein; (b) the material breach or inaccuracy of any representations or warranties made by, or covenants of Jubilant in this Agreement; (c) the infringement or misappropriation of any copyright or trademark arising out of the marketing and/or sale of the Products in or out of the Territory by Jubilant during the term of this Agreement;  (d) the infringement or misappropriation of any patent, trade secret or other proprietary right arising out of or relating to the manufacture or composition of  the Products or Materials;  (e) the gross negligence or willful misconduct of Jubilant or its Affiliates any of their respective agents, directors, officers or employees; and (f) failure of any Material to meet its specifications.

4.3           Indemnification by Cadista. Cadista shall indemnify, defend and hold harmless Jubilant, its Affiliates ,and their respective employees, officers, directors and agents  from and against all Liabilities arising out of, relating to, or incidental to (a) the failure of the Products upon delivery to meet the Product Specifications or for Product warranties contained herein; (b) the material breach or inaccuracy of any representations or warranties made by, or covenants of, Cadista in this Agreement; and (c) the gross negligence or willful misconduct of Cadista or its Affiliates, or their respective agents, directors, officers or employees.

4.4           In no event shall either party be liable to the other for cover, incidental, special, consequential or punitive damages, including any claim for damages based on lost revenues or profits, however caused or on any theory of liability..

 

Cadista shall not be liable for Product defects that have been caused by defective Materials (including, without limitation, Materials that fail to meet their specifications) abnormal or incorrect conditions of use, storage pending use, accident, misuse or negligence by Jubilant, its employees, servants and agents or by Jubilant’s designated carrier after any Product leaves a  Facility.

  

14

  

 

EXCEPT FOR THE REPRESENTATIONS, WARRANTIES, AND COVENANTS UNDER THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.

 

IN NO EVENT WILL CADISTA’S LIABILITY TO JUBILANT FOR DAMAGES OR THIRD PARTY INDEMNIFICATION OR FOR MATTERS RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT EXCEED $500,000 IN THE AGGREGATE DURING OR AFTER THE TERM.

4.5           Procedure for Indemnification.

4.5.1             Notice   Promptly after becoming aware of same, the Indemnified Party shall notify the Indemnifying Party of any claim or discovery of any fact upon which the Indemnified Party intends to base a claim for indemnification. For a period that shall not exceed fifteen (15) business days following any such notification, as provided herein, the Indemnified Party and Indemnifying Party shall investigate and discuss in good faith whether such claim is subject to indemnification. An Indemnified Party's failure to so notify the Indemnifying Party shall not, however, relieve such Indemnifying Party from any liability under this Agreement to the Indemnified Party with respect to such claim except to the extent that such Indemnifying Party is actually denied, during the period of delay in notice, the opportunity to remedy or otherwise mitigate the event or activity(ies) giving rise to the claim for indemnification and thereby suffers or otherwise incurs additional liquidated or other readily quantifiable damages as a result of such failure. The Indemnifying Party, while reserving the right to contest its obligations to indemnify hereunder, shall be responsible for the defense of any claim, demand, lawsuit or other proceeding in connection with which the Indemnified Party claims indemnification hereunder.  The Indemnified Party shall have the right at its own expense to participate jointly with the Indemnifying Party in the defense of any such claim, demand, lawsuit or other proceeding, but with respect to any issue involved in such claim, demand, lawsuit or other proceeding with respect to which the Indemnifying Party has acknowledged its obligation to indemnify the Indemnified party hereunder, the Indemnifying Party shall have the right to select counsel, settle, try or otherwise dispose of or handle such claim, demand, lawsuit or other proceeding on such terms as the Indemnifying Party shall deem appropriate, subject to any reasonable objection of the Indemnified Party.

4.5.2           Cooperation.  The Indemnified Party shall reasonably cooperate with the Indemnifying Party in the defense of such claim, suit or proceeding and may be represented, at the Indemnified Party's expense, by counsel of its choice.  Any settlement or compromise of such claim, suit or proceeding that seeks to impose any material obligation upon the Indemnified Party, or limit any of the material rights of the Indemnified Party under this Agreement, shall require the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld or delayed.

  

15

  

4.6           Insurance.  Each party shall maintain in effect at all times during the Term of this Agreement insurance with a carrier with an A.M. Best rating of A-XII or better.  Such insurance shall include, without limitation, worker's compensation in statutory amounts, and employers' liability insurance, comprehensive general liability insurance (including products liability) and automobile insurance in amounts not less than Five Million Dollars ($5,000,000) per occurrence and in the aggregate. Each party shall designate the other and its Affiliates as "additional insureds" on such insurance policies.  Upon a party’s reasonable request, the other party hereto shall provide the requesting party with copies of all applicable endorsements and certificates of insurance, evidencing such coverage and stating that the other party is named as an additional insured, which shall also state that the additional insured shall be provided a minimum of thirty (30) calendar days prior written notice of any proposed cancellation, or expiration without renewal, and five (5) business days prior written notice of any proposed change in carriers or material terms of coverage.

5.           PRICE AND PAYMENT TERMS.

5.1           Price.  Jubilant shall purchase from Cadista all Products which are accepted pursuant to Sections 2.3 and 3.2 above at the prices set forth on Exhibit A, as such prices may be adjusted by the Parties from time as provided herein.

5.2           Invoicing.  Upon completion of manufacturing of the Products and the Products are ready for shipping Cadista shall submit invoices to Jubilant which provide for the payment of the Price.  Jubilant shall pay each invoice in full within sixty (60) days after the date of invoice.  All payments shall be made in U.S. Dollars.  In the event that payment is not received by Cadista on or before the due date, the unpaid portion of such payment shall accrue interest at a rate of one percent (1%) per month compounded monthly (12.68% per annum) until such unpaid portion is paid to Cadista in full.

6.           REPRESENTATIONS; WARRANTIES; AND COVENANTS  .

6.1           By Cadista.  Cadista hereby represents, warrants, and covenants to Jubilant as follows:

(a)           Cadista is a corporation duly organized and validly existing under the laws of the State of Delaware;

(b)           Cadista has the requisite authority to execute and deliver this Agreement and to perform its obligations hereunder, without limitation, in manufacturing and supplying the Products to Jubilant hereunder in accordance with the terms of this Agreement;

(c)           The execution and performance of Cadista's obligations hereunder are not and will not be in violation of or in conflict with any material obligation it may have to any Third Party;

  

16

  

(d)           Cadista is not debarred and Cadista does not and will not use in any capacity the services of any person debarred under Subsection 306(a) or (b) of the Generic Drug Enforcement Act of 1992;

(e)           To the best of Cadista's knowledge and belief, there are no investigations, adverse Third Party allegations or actions, or claims against Cadista, including any pending or threatened action against Cadista, in any court or by or before any governmental body or agency, with respect to the Products, the manufacture of the Products at the Facility or its obligations set forth herein which may adversely affect Cadista's ability to perform its obligations under this Agreement;

(f)           Cadista currently possesses and shall, at its own cost, maintain all necessary licenses, permits, registrations, or approvals required by the FDA with respect to the Facility;

(g)           The Products delivered to Jubilant under this Agreement (i) shall meet the Product Specifications in effect as of the date that title to such Products passes to Jubilant; (ii) shall be approved by the FDA and satisfy all regulations and laws applicable to the manufacture, packaging, storage and shipment of such Products, (iii) shall not be adulterated or misbranded pursuant to Sections 501 and 502 of the FD&C Act (21 U.S.C.A. §§ 351 & 352); (iv) shall not be an article that may not be introduced into interstate commerce consistent with the intended use for such Products pursuant to the FD&C Act or any other applicable laws; and (v) shall conform with the applicable expiration dating of such Products; and

(h)           The Products delivered to Jubilant pursuant to this Agreement, at the time of delivery, shall be free and clear of all liens, security interests or other encumbrances.

6.2           By Jubilant.  Jubilant represents, warrants, and covenants to Cadista as follows:

(a)           Jubilant is a corporation duly organized and in good standing under the laws of India;

(b)           Jubilant has the requisite corporate authority to execute and deliver this Agreement and to perform its obligations hereunder;

(c)           The execution and performance of Jubilant's obligations hereunder are not and will not be in violation of or in conflict with any material obligations it may have to any Third Party;

(d)           The manufacture, sale or use of the Products according to the Product Specifications under this Agreement will not infringe any patent right of or other government grant of intellectual property to any Third Party, or otherwise violate any applicable laws;

  

17

  

 (e)           The Materials (i) shall meet their respective specifications in effect as of the date that they are delivered to Cadista, (ii) shall be approved by the FDA and satisfy all regulations and laws applicable to the manufacture, packaging, storage and shipment of such Products,  (iii) shall not be adulterated or misbranded pursuant to Sections 501 and 502 of the FD&C Act (21 U.S.C.A. §§ 351 & 352), (iv) shall not be an article that may not be introduced into interstate commerce consistent with the intended use for such Materials pursuant to the FD&C Act or any other applicable laws, and (v) shall conform with the applicable expiration dating of such Materials;

(f)           To the best of Jubilant's knowledge and belief, there are no investigations, adverse Third Party allegations or actions, or claims against Jubilant, including any pending or threatened action against Jubilant, in any court or by or before any governmental body or agency, with respect to the Materials, the Products, or the manufacture of the Products which may adversely affect Jubilant’s or Cadista's ability to perform its obligations under this Agreement;

(g)           Jubilant is not debarred and Jubilant has not and will not use in any capacity the services of any person debarred under Subsections 306(a) or (b) of the Generic Drug Enforcement Act of 1992;

(h) Jubilant shall maintain all necessary permits (other than those relating to the Facility generally), relating to the Products to enable Cadista to manufacture the Product, including without limitation, the Products ANDA,  and Jubilant is in compliance in all material respects with such licenses, permits, registrations and approvals; and

(i) Jubilant will not sell or allow the Products to be sold outside the Territory.

7.           TERM AND TERMINATION.

7.1           Term. The term of this Agreement shall commence on the Effective Date and, unless sooner terminated pursuant to Section 7.2 hereof, shall continue in full force and effect for a period of five (5) years, provided, however, that the term of this Agreement may be extended by mutual written agreement of the parties.

7.2           Termination.  Prior to the expiration of the Term, this Agreement may be terminated:

(a)           in its entirety or with respect to any Product, immediately upon the mutual written consent of Jubilant and Cadista;

(b)           in its entirety or with respect to the affected Product, by either Jubilant or Cadista, upon thirty (30) calendar days prior written notice if the other party materially breaches any provision of this Agreement and fails to cure such breach within thirty (30) calendar days following receipt of written notice from a non-breaching party specifying the breach to be cured;

  

18

  

(c)           in its entirety or with respect to the affected Product, by Jubilant upon thirty (30) days' written notice if any of the conditions set forth in Section 3.5 occur, within 180 days of its occurrence;

(d)           in its entirety or with respect to any Product, by Jubilant  or Cadista pursuant to Section 2.1 upon written notice to the other party in which case the Agreement shall terminate with respect to such Product eighteen (18) months after provision of such notice and during such eighteen (18) month period Cadista may not increase the price of the Products;

(e)           in its entirety or with respect to any Product, by Jubilant  pursuant to Section 2.2(d), in which case the Agreement shall terminate 180 days after Jubilant provides notice to Cadista, and during such 180 day period Cadista may not increase the price of the Products; and

(f)           in its entirety or with respect to any Product, in the event either party ceases conducting business in a normal course, becomes insolvent, makes a general assignment for the benefit of creditors, suffers or permits the appointment of a receiver for its business or assets, or avails itself of, or becomes subject to, any case under the Bankruptcy Code, 11 USC 101 et seq. (“Bankruptcy Code”) or any other statute of any state or country relating to insolvency or the protection of creditor rights, the other party shall have a right to terminate this Agreement, provided that in the case of an involuntary bankruptcy proceeding such right to terminate shall only become effective if the other party consents thereto or such proceeding is not dismissed within ninety (90) days after the filing thereof.  The parties agree that each party may fully exercise all of its rights and elections under the Bankruptcy Code.

7.3           Post-Termination.  Termination of this Agreement shall not affect any payment obligations or other liabilities which have accrued as of the date of such termination, including, without limitation, any damages or liabilities resulting from a party's breach of its obligations under this Agreement.   Upon expiration or termination of this Agreement, whichever is sooner, Cadista shall manufacture and ship to Jubilant and Jubilant shall purchase in accordance with the provisions hereof all amounts of the Products ordered pursuant to POs which have been accepted by Cadista prior to the date of termination.  If this Agreement is terminated by Jubilant or Cadista for any reason Jubilant will reimburse Cadista for any Materials purchased for by Cadista in reliance on POs or the Forecasts, against delivery of same (at the expense of Jubilant) to Jubilant.

8.           CONFIDENTIALITY OBLIGATIONS.

8.1           General.  In order to enable the parties to perform their respective obligations under this Agreement (the “Business Purpose”), each party or its affiliates, parent companies, subsidiaries, divisions or related companies (the “Disclosing Party”) may disclose to the other party or its affiliates, parent companies, subsidiaries, divisions or related companies (the “Receiving Party”) certain confidential information of such party.

  

19

  

8.2           Information Covered.  These confidentiality obligations will apply to all information disclosed by the Disclosing Party (or on the Disclosing Party’s behalf) to the Receiving Party, whether directly or indirectly, in writing, orally, electronically or by drawings or inspection of equipment, products, facilities, software or other property of the Disclosing Party, including, but not limited to, (a) any information, regardless of form, proprietary to or maintained in confidence by the Disclosing Party, including, without limitation, any information, patents, patent applications, technical data or know-how relating to products, formulations, manufacturing, discoveries, ideas, inventions, concepts, software, equipment, designs, drawings, specifications, techniques, processes, systems, models, data, source code, object code, documentation, diagrams, flow charts, research, development, business plans or opportunities, business strategies, marketing plans or opportunities, marketing strategies, future projects or products, projects or products under consideration, procedures, sales data, and information related to finances, costs, prices, suppliers, vendors, licensors, licensees, business partners, customers, consumers and employees; and (b) any other information marked as confidential or, if not disclosed in writing, identified as confidential at the time of disclosure and summarized in a written document that is marked confidential and delivered within thirty (30) days after the disclosure date (“Confidential Information”).

8.3           Obligations.  The parties agree that (a) the Receiving Party will treat all Confidential Information with the same degree of care as the Receiving Party accords to its own confidential information, but in no case less than reasonable care; (b) the Receiving Party will not use, disseminate, or in any way disclose any Confidential Information, except to its personnel or authorized representatives to the extent necessary for the Business Purpose, and for any other purpose the Disclosing Party may hereafter authorize, provided that all such persons shall have agreed in writing to be bound by terms and conditions substantially similar to, and no less restrictive with respect to limitations on use and disclosure than, those of this Agreement; and (c) the Receiving Party will deliver to the Disclosing Party, in accordance with any request from the Disclosing Party, all tangible embodiments of the Confidential Information including copies, notes, packages, pictures, diagrams, computer memory media, and all other materials reflecting or containing Confidential Information.

8.4           Information Not Covered. The Receiving Party will have no obligation with respect to any portion of the Disclosing Party’s Confidential Information that (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party, generally known or available to the public; (b) was acquired by the Receiving Party before receiving such information from the Disclosing Party and without restriction as to use or disclosure; (c) is hereafter rightfully furnished to the Receiving Party by a third party, without restriction as to use or disclosure; (d) is information which the Receiving Party can document was independently developed by it or on its behalf without reference to the Disclosing Party’s Confidential Information received hereunder; or (e) is disclosed with the prior written consent of the Disclosing Party.  The Receiving Party may disclose the Confidential Information pursuant to the requirements of a governmental agency or operation of law, provided that it gives the Disclosing Party reasonable advance notice sufficient to contest such requirement of disclosure, takes all reasonable and lawful actions to avoid and/or minimize the extent of such disclosure, and cooperates with the Disclosing Party, at the Disclosing Party’s cost, if the Disclosing Party wishes to seek a protective order

  

20

  

8.5           Injunctive Relief.  The Receiving Party acknowledges that the unauthorized disclosure or use of the Disclosing Party’s Confidential Information by the Receiving Party may cause irreparable harm and significant injury to the Disclosing Party, the degree of which may be difficult to ascertain.  Accordingly, the Receiving Party agrees that the Disclosing Party will have the right to seek an immediate injunction enjoining any breach of this Agreement, as well as the right to pursue any and all other rights and remedies available at law or in equity for such a breach.

8.6           Survival.  Each party’s duty to protect the Confidential Information disclosed under this Agreement shall survive termination of this Agreement for five (5) years.

9.           DISPUTE RESOLUTION.  The executive officers in charge of manufacturing for each of Jubilant and Cadista shall meet as often as necessary to review the performance of the parties under this Agreement and to resolve any disputes.

10.           RELATIONSHIP OF THE PARTIES.   Cadista shall at all times be deemed to be an independent contractor, solely responsible for the manner by and the form in which it performs this Agreement.  Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or any other type of relationship between Cadista and Jubilant, other than that of buyer and seller of goods and licensor and licensee of a license.  Neither party shall have the authority to represent itself as having the authority to bind or obligate the other party in any manner whatsoever.

11.           MISCELLANEOUS.

11.1         Binding Nature and Assignment.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.  Neither party shall, without the prior written consent (not to be unreasonably withheld or delayed) of the other party having been obtained, assign or transfer this Agreement to any person; provided, however, that (a) Cadista may subcontract its manufacturing and supply obligations, subject to the limitations contained in Section 2.5; (b) each party may assign or transfer this Agreement to any Affiliate or to any successor by merger of such party of its pharmaceutical business or upon a sale of substantially all of a party's assets or the assets of its pharmaceutical business, without the prior written consent of the other party hereto; and (c) in the case of an assignment to an Affiliate of a party, the Affiliate shall in writing assume all the rights and obligations of the transferor under this Agreement.  No permitted assignment of this Agreement or any rights hereunder shall relieve the assigning party of any of its obligations hereunder.

  

21

  

11.2         Force Majeure.  Neither party shall be liable to the other on account of any failure to perform or on account of any delay in performance of any obligation under this Agreement, other than for the payment of money, if and to the extent that such failure or delay shall be due to a cause beyond the control of the relevant party and which, by the exercise of reasonable diligence and care, such party could not reasonably have been expected to avoid, including but not limited to any acts of God, acts of the public enemy, insurrections, riots, embargoes, political upheavals, actions or decrees of governmental bodies, communications failures, work stoppage, natural disaster, fires, explosions, floods, or energy shortages (a “Force Majeure Event”).  The party directly affected shall promptly notify in writing the other party of the specific causes beyond the control of that party and the probable duration of the delay and be excused from such performance of such obligation to the extent that it is necessarily prevented, hindered or delayed thereby during the continuance of any such happening or event.  This Agreement, in so far as it relates to such obligation, shall be deemed suspended so long as and to the extent that such obligation is affected by a Force Majeure Event.  The party directly affected shall use efforts to eliminate or circumvent the Force Majeure Event.

11.3        Governing Law.  This Agreement shall be governed, construed and enforced exclusively in accordance with the laws of the State of New York applicable therein without regard to the applicable principles of conflicts of laws that might otherwise govern.

11.4         Notices. Any written notice required or permitted to be delivered pursuant to this Agreement shall be in writing and shall be deemed delivered:  (a) upon delivery if delivered in person; (b) three (3) business days after deposit in United States registered or certified mail, return receipt requested, postage prepaid; (c) upon transmission if sent via facsimile, (confirmed by a telephone conversation with the recipient); (d) one (1) business day after deposit with a nationally recognized overnight courier; in each case addressed to the following addresses in accordance with this Section 11.4:

If to Jubilant:

Jubilant Life Sciences Ltd.

Plot No 1-A, Institutional Area,

Sector 16/A Noida 201 301,

Uttar Pradesh, India Attn: President

If to Cadista:

Jubilant Cadista Pharmaceutical Inc.

207 Kiley Drive

Salisbury, Maryland   21801

Attn: President

or to such other address as may be specified by either party hereto upon notice given to the other.

11.5         Entire Agreement; Modifications.  This Agreement, together with all of the Exhibits thereto, sets forth the entire, final, and exclusive agreement between the parties as to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, between the parties.  This Agreement may be modified only pursuant to a writing executed by authorized representatives of Cadista and Jubilant. This Agreement does not supersede any other agreement between the parties with respect to Products not supplied pursuant to this Agreement

  

22

  

11.6         Injunctive Relief.  Each party acknowledges that breach of this Agreement may cause irreparable harm and significant injury to the other party, the degree of which may be difficult to ascertain.  Accordingly, each party will have the right to seek an immediate injunction enjoining any breach of this Agreement, without the posting of a bond, as well as, subject to the provisions of this Agreement, the right to pursue any and all other rights and remedies available at law or in equity for such a breach.

11.7         Facsimile Execution.  This Agreement may be executed in facsimile counterparts each of which is hereby agreed to have a legal binding effect of an original signature.  The parties hereto agree to forward the original signatures by overnight mail to the other party upon execution.

 

11.8         Headings.  The headings and subheadings used in this Agreement are only used for convenience of reference, and are not to be considered in construing this Agreement.

11.9         Waiver.  The failure of any party to enforce, at any time, any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision, nor to affect, in any way, the validity of this Agreement or any part thereof or the right of the party thereafter to enforce each and every provision.  Any waiver of a breach under this Agreement shall be in writing and signed by the waiving party and shall not constitute a waiver of any prior, concurrent or subsequent breaches of this Agreement.

11.10       Survival.  Notwithstanding anything to the contrary contained in this Agreement, the provisions of Sections 2.2, 2.4, 3.3, 3.7, 4, 5.2, 6, 7.3, 8, 9 and 11 shall survive the termination or expiration of this Agreement.

11.11       Severability. The provisions of this Agreement are severable.  If any provision of this Agreement shall be found to be invalid or unenforceable in any respect, such provision shall be carried out and enforced only to the extent to which it shall be valid and enforceable, and any such invalidity or unenforceability shall not affect the validity or enforceability of any other provision of this Agreement, all of which shall be fully carried out and enforced as if such invalid or unenforceable provision had not been set forth herein.  In the event a part or provision of the Agreement held invalid or unenforceable or in conflict with the law affecting consideration to either party, the parties agree to negotiate in good faith the amendment of such part or provision in a manner consistent with the intention of the parties as expressed in this Agreement.

11.12       Business Days.  If any payment is required to be made or other action is required to be taken pursuant to this Agreement on a day which is not a business day, then such payment or action shall be made or taken on the next business day.

11.13       Expenses.  All legal and other costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses.

  

23

  

[SIGNATURE PAGE TO FOLLOW]

 

  

24

  

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed as of the Effective Date by their duly authorized representatives.

	  	
JUBILANT CADISTA PHARMACEUTICALS INC.

	  	  
	  	
By:

	/s/ Kamal Mandan  
	  	
Name: Kamal Mandan

	  	
Title: Chief Financial Officer

	  	  
	  	
JUBILANT LIFE SCIENCES LTD.

	  	  
	  	
By:

	
/s/ Neeraj Agrawal

	  	
Name: Neeraj Agrawal

	  	
Title: CEO Generics

  

25

  

EXHIBIT A

Products, Price and Minimum Order Sizes

	
Product

	  	
Minimum

Order Size

	  	
Batch

Size

	  	
Price per

Unit

	
Lamotrgine Chewable  Tablets 5 mg

 

Lamotrigine Chewable Tablets 25mg

	
  

	
1 batch

 

1 batch

	
  

	
[***]

 

[***]

	
  

	
[***]

 

[***]

Any amendments to this Exhibit A shall be evidenced by the Parties executing below:

	
JUBILANT CADISTA

	  	
JUBILANT LIFE SCIENCES LTD.

	
PHARMACEUTICALS INC.

	  	  
	  	  	  
	
By:

	  	  	
By:

	  
	
Name:

	  	  	
Name:

	  
	
Title:

	  	  	
Title:

	  
	
Date:

	  	  	
Date:

	  

 

 

[***Confidential treatment requested pursuant to a request for confidential treatment filed with the

Securities and Exchange Commission. Omitted portions have been separately filed with the Commission.]

 

  

26

  

EXHIBIT B

Product Specifications

See Attached

 

[***Confidential treatment requested pursuant to a request for confidential treatment filed with the

Securities and Exchange Commission. Omitted portions have been separately filed with the Commission.]

 

  

27

  

 

[*** Four Pages of Product Specification Have Been Omitted]

 

 

[***Confidential treatment requested pursuant to a request for confidential treatment filed with the

Securities and Exchange Commission. Omitted portions have been separately filed with the Commission.]

 

  

28

  

EXHIBIT C

FORM OF AMENDMENT TO ADD PRODUCT

The undersigned hereby agree to amend the Toll Manufacturing Conversion Agreement dated as of May ___, 2011 by adding the following Product and other information  to the table in Exhibit A thereto as of  ________ (the “Amendment Date”)and appending the attached specification in Schedule 1 to Exhibit B.

	
Product

	  	
Minimum

Order Size

	  	
Batch

Size

	  	
Price per

Unit

	  	
  

	  	
  

	  	
  

	  

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed as of the Amendment Date by their duly authorized representatives.

	  	
JUBILANT CADISTA PHARMACEUTICALS INC.

	  	  
	  	
By:

	
 

	  	
Name:

	  	
Title:

	  	  
	  	
JUBILANT LIFE SCIENCES LTD.

	  	  
	  	
By:

	
 

	  	
Name:

	  	
Title:

  

Schedule 1 to Amendment

To Be Attached to Exhibit B

 

[***Confidential treatment requested pursuant to a request for confidential treatment filed with the

Securities and Exchange Commission. Omitted portions have been separately filed with the Commission.]

 

  

29

  

[Specifications]

  

30Unassociated Document

 

Tenant: Trigen Laboratories, Inc.

Suite 130, 1155 Business Center Drive

LEASE

THIS LEASE (“Lease”) is entered into as of the 1st day of November 2005, between BRANDYWINE OPERATING GRANDE C, L.P., a Delaware limited partnership (“Landlord”), and TRIGEN LABORATORIES, INC., a Maryland corporation currently with its principal place of business at 207Kiley Drive, Salisbury, Maryland 21801 (“Tenant”).

In consideration of the mutual covenants stated below, and intending to be legally bound, the parties covenant and agree as follows:

1.           PREMISES. Landlord leases to Tenant and Tenant leases from Landlord Suite No. 130, which the parties confirm is 1,638 rentable square feet shown on the space plan attached hereto as Exhibit “A” (“Premises”), located on the first floor at 1155 Business Center Drive, Horsham, Pennsylvania 19044 (“Building”), which is a part of the project located at Horsham Business Center (“Project”).

Landlord’s Work. Tenant agrees to accept the Premises in “AS-IS” condition; however, Landlord agrees, at Landlord’s cost, to (i) repaint interior drywall partitions in the Premises using Landlord’s standard paint and (ii) to replace the existing carpet and cove base in the Premises using Landlord’s standard carpet and cove base (collectively “Landlord’s Work”). Tenant shall select suite finishes (paint color and carpet) on or before execution of this Lease. Also, within ninety (90) days following receipt of all applicable governmental permits and subsequent to the Commencement Date, defined below, Landlord agrees to build, at its cost and expense, one (1) additional office within the Premises (the “Additional Office”). Landlord agrees to commence the permitting process for construction of the Additional Office within five (5) business days following Tenant’s submission to Landlord of the specific location and dimensions for the Additional Office, subject to Landlord’s reasonable approval, and to thereafter diligently prosecute construction of the same to completion in a good and workmanlike manner. The Additional Office will be constructed using suite finishes consistent with the rest of the Premises and will include electrical wiring to code. Tenant shall be responsible for all data and telecommunication wiring and cabling.

Fixed Rent Credit. Provided this Lease is executed by the Tenant on or before November 1, 2005, Landlord shall cause the Landlord’s Work to be substantially completed by December 1, 2005 (the “Target Date”). However, the Target Date shall be extended on a day for day basis for delays caused by Force Majeure or Tenant’s Delay. If the Premises is not delivered by the Target Date, Landlord shall provide to Tenant a day for day Fixed Rent credit for each day beyond the Target Date that the Landlord’s Work is not substantially completed (the “Fixed Rent Credit”). Further, provided this Lease is executed by the Tenant on or before November 1, 2005, if Landlord has not substantially completed Landlord’s Work (excluding the Additional Office work) by December 31, 2005 (“Option Date”), which date shall be extended on a day for day basis for delays caused by Force Majeure or Tenant’s Delay, Tenant shall have the one (1) time right to terminate this Lease without penalty by written notice to Landlord, which notice shall be delivered to Landlord no later three (3) business days following the Option Date.

2.           TERM. The Term of this Lease shall commence (the “Commencement Date”) the date which is the earlier of (i) when Tenant, with Landlord’s prior consent, assumes possession of the Premises for its Permitted Uses, or (ii) upon substantial completion of the improvements required to be made by Landlord, if any under Article 1. The Premises shall be deemed “substantially completed” when the improvements called for by Article 1 have been completed to the extent that the Premises may be occupied by Tenant for its Permitted Uses, subject only to completion of minor finishing, adjustment of equipment, and other minor construction aspects, and Landlord has procured a temporary or permanent certificate of occupancy permitting the occupancy of the Premises, if required by law (hereafter, “substantially completed”). The Term shall expire on the last day of the month which is thirty seven (37) months from the Commencement Date. The Commencement Date shall be confirmed by Landlord and Tenant by the execution of a Confirmation of Lease Term (“COLT”) in the form attached hereto as Exhibit “B”. If Tenant fails to execute or object to the Confirmation of Lease Term within ten (10) business days of its delivery, Landlord’s determination of such dates shall be deemed accepted.

  

1

  

3.           FIXED RENT; SECURITY DEPOSIT.

 

(a) Commencing on the Commencement Date (“Rent Commencement Date”) and on the first day of each month thereafter, during the Term, Tenant shall pay to Landlord without notice or demand, and without set-off, the annual Fixed Rent as set forth below payable in the monthly installments, by i.) check sent to Landlord, P. O. Box 828117, Philadelphia, PA  19182-8117; or ii.) wire transfer of immediately available funds to the account as PNC Bank, account no. 8610818762 ABA #031000053; such transfer to be confirmed by Landlord’s accounting department upon written request by Tenant.  The first month rent shall be prorated for any partial month of occupancy.  “Rent” shall be defined as any sum owed by Tenant to Landlord.  All payments of Rent must include the following information:  Building Number 115 and Lease Number ____.  These numbers shall be provided to Tenant in the COLT;

 

	
LEASE YEAR

(months) 

	 	PER R.S.F.	 	 	MONTHLY INSTALLMENTS	 	 	
ANNUAL

FIXED RENT

	 
	
Month 1

	 	$	0.00	*	 	$	0.00	 	 	$	0.00	 
	
Months 2-12

	 	$	18.00	*	 	$	2,457.00	 	 	$	29,484.00	 
	
Months 13-24

	 	$	18.50	*	 	$	2,525.25	 	 	$	30,303.00	 
	
Months 25-37

	 	$	19.00	*	 	$	2,593.50	 	 	$	31,122.00	 

 

*Plus costs associated with Article 4 and Article 5.

 

(b)   Tenant shall pay the first full month’s installment and any initial partial month and the Security Deposit by two separate checks upon the Tenant’s execution of this Lease. If any amount due from Tenant is not paid to Landlord when due, Tenant shall also pay as Additional Rent a late fee of five (5%) percent of the total payment then due. The late fee shall accrue on the initial date of a payment’s due date, irrespective of any grace period granted hereunder. However, notwithstanding anything herein to the contrary, upon Tenant’s written request, Landlord agrees to waive the above referenced late fee one (1) time during any twelve (12) consecutive months of the Term or extensions thereto.

  

(c)    Tenant shall be required to pay a Security Deposit of $0.00 under this Lease (the “Security Deposit”), as security for the prompt and complete performance by Tenant of every provision of this Lease. No interest shall be paid to Tenant on the Security Deposit. If Tenant fails to perform any of its obligations hereunder, Landlord may use, apply or retain the whole or any part of the Security Deposit for the payment of (i) any rent or other sums of money which Tenant may not have paid when due, (ii) any sum expended by Landlord in accordance with the provisions of this Lease, and/or (iii) any sum which Landlord may expend or be required to expend by reason of Tenant’s default. The use of the Security Deposit by Landlord shall not prevent Landlord from exercising any other remedy provided by this Lease or by law and shall not operate as either liquidated damages or as a limitation on any recovery to which Landlord may otherwise be entitled. If any portion of the Security Deposit is used, applied or retained by Landlord, Tenant agrees, within ten (10) days after the written demand therefor is made by Landlord, to deposit cash with the Landlord in an amount sufficient to restore the Security Deposit to its original amount. In addition to the foregoing, if Tenant defaults (irrespective of the fact that Tenant cured such default) more than once in its performance of a monetary obligation and such monetary defaults aggregate in excess of $6,000.00 under this Lease, Landlord may require Tenant to increase the Security Deposit to the initial amount of the Security Deposit. If Tenant shall fully comply with all of the provisions of this Lease, the Security Deposit, or any balance thereof, shall be returned to Tenant within a reasonable time following the termination of the Lease. Upon the return of the Security Deposit to the original Tenant hereunder, or the remaining balance thereof, Landlord shall be completely relieved of liability with respect to the Security Deposit. In the event of a transfer of the Building, Landlord shall have the right to transfer the Security Deposit and Landlord shall thereupon be released by Tenant from all liability for the return of such Security Deposit. Upon the assumption of such Security Deposit by the transferee, Tenant agrees to look solely to the new landlord for the return of said Security Deposit.

 

  

2

  

 

4.           ADDITIONAL RENT. Commencing January 1, 2007, and in each calendar year thereafter during the Term, Tenant shall pay in advance on a monthly basis to Landlord, Tenant’s Share of the “Recognized Expenses”, without deduction, counterclaim or setoff, to the extent such Recognized Expenses exceed the Recognized Expenses in calendar year 2006 (“Base Year”). Tenant’s Share is 3.19% (“Tenant’s Share”), which is (1,638)/(51,388) expressed as a percentage, which Tenant’s Share may increase or decrease as the Building or Premises size increases or decreases. Recognized Expenses are (i) all reasonable operating costs and expenses related to the maintenance, operation and repair of the Project incurred by Landlord, including but not limited to management fee not to exceed five (5%) percent of Rent; common area electric; and capital expenditures and capital repairs and replacements shall be included as operating expenses solely to the extent of the amortized costs of same over the useful life of the improvement in accordance with generally accepted accounting principles and provided such expenses have the effect of reducing Recognized Expenses or are required by a governmental authority after the date of this Lease; (ii) all insurance premiums payable by Landlord for insurance with respect to the Project and (iii) Taxes payable on the Project, Taxes shall be defined as all taxes, assessments and other governmental charges (“Taxes”), including special assessments for public improvements or traffic districts which are levied or assessed against the Project during the Term or, if levied or assessed prior to the Term, which properly are allocable to the Term, and real estate tax appeal expenditures incurred by Landlord to the extent of any reduction resulting thereby. Nothing herein contained shall be construed to include as Taxes: (A) any inheritance, estate, succession, transfer, gift, franchise, corporation, net income or profit tax or capital levy that is or may be imposed upon Landlord or (B) any transfer tax or recording charge resulting from a transfer of the Building or the Project; provided, however, that if at any time during the Term the method of taxation prevailing at the commencement of the Term shall be altered so that in lieu of or as a substitute for the whole or any part of the taxes now levied, assessed or imposed on real estate as such there shall be levied, assessed or imposed (i) a tax on the rents received from such real estate, or (ii) a license fee measured by the rents receivable by Landlord from the Premises or any portion thereof, or (iii) a tax or license fee imposed upon Premises or any portion thereof, then the same shall be included in the computation of Taxes hereunder. Each of the Recognized Expenses shall for all purposes be treated and considered as Additional Rent. Tenant shall pay, in monthly installments in advance, on account of Tenant’s Share of Recognized Expenses, the estimated amount of the increase of such Recognized Expenses for such year in excess of the Base Year as determined by Landlord in its reasonable discretion. Prior to the end of the calendar year in which the Lease commences and thereafter for each successive calendar year (each, a “Lease Year”), or part thereof, Landlord shall send to Tenant a statement of projected increases in Recognized Expenses in excess of the Base Year and shall indicate what Tenant’s Share of Recognized Expenses shall be. The Base Year shall be adjusted to exclude from the Base Year “extraordinary items” incurred in such calendar year. For purposes of this subparagraph, extraordinary items shall mean either (X) cost increases over the prior calendar year of eleven and one quarter percent (11.25%) or more, or (Y) items which increase Landlord’s total expenses and such items have not been included in the determination of expenses by the Landlord (or the Landlord’s predecessor in interest) for the prior three years of operating the Building. As soon as administratively available, Landlord shall send to Tenant a statement of actual for Recognized Expenses for the prior Lease Year showing the Share due from Tenant. In the event the amount prepaid by Tenant exceeds the amount that was actually due then Landlord shall issue a credit to Tenant in an amount equal to the over charge, which credit Tenant may apply to future payments on account of Recognized Expenses until Tenant has been fully credited with the over charge. If the credit due to Tenant is more than the aggregate total of future rental payments, Landlord shall pay to Tenant the difference between the credit in such aggregate total. In the event Landlord has undercharged Tenant, then Landlord shall send Tenant an invoice with the additional amount due, which amount shall be paid in full by Tenant within thirty (30) days of receipt.

 

5.           ELECTRIC CHARGES. Landlord shall not be liable for any interruption any utility service for any reason unless caused by the gross negligence or willful misconduct of Landlord. Landlord shall have the right to change the electric and other utility providers to the Project or Building at any time. Tenant shall pay to Landlord, as Additional Rent, within fifteen (15) business days of receipt of Landlord’s billing statement therefor, all charges incurred by Landlord for electricity, at Landlord’s cost without markup, such charges to be based upon Tenant’s consumption, as measured by Landlord’s submeter for the Premises. Landlord shall provide the Premises with electricity for lighting and usual office equipment, and heat and air-conditioning “HVAC” in the respective seasons on a seven (7) day a week twenty four (24) hour a day basis.

 

6.           SIGNS; USE OF PREMISES AND COMMON AREAS. Landlord shall provide the original Tenant, hereinabove named, with standard identification signage on all Building directories and at the entrance to the Premises. No other signs shall be placed, erected or maintained by Tenant at any place upon the Premises, Building or Project unless approved by Landlord, in its reasonable discretion, and authorized by any applicable governmental authority. Tenant’s use of the Premises shall be limited to general office use and storage incidental thereto (“Permitted Use”). The Permitted Use shall be subject to all applicable laws and governmental rules and regulations and to all reasonable requirements of the insurers of the Building Tenant shall not install in or for the Premises, any equipment that requires more electric current than is standard. Tenant, at no additional cost, shall have the right, non-exclusive and in common with others, to use (i) the exterior paved driveways and walkways of the Building for vehicular and pedestrian access to the Building, (ii) the internal common area, including elevators and (iii) the designated parking areas of the Project for the parking of automobiles of Tenant and its employees and business visitors; provided that Landlord shall have the right to restrict or limit Tenant’s utilization of the parking areas in the event the same become overburdened and in such case to equitably allocate on proportionate basis or assign parking spaces among Tenant and the other tenants of the Building.

 

7.           ENVIRONMENTAL MATTERS. Tenant shall not generate, manufacture, refine, transport, treat, store, handle, dispose, bring or otherwise cause to be brought or permit any of its agents, employees, contractors or invitees to bring in, on or about any part of the Premises, Building or Project, any hazardous substance or hazardous waste in violation of applicable law.  Except for costs arising from Tenant’s acts or omissions or for which Tenant is liable under applicable law, Tenant shall not be responsible for Landlord’s costs of remediation or clean up of any hazardous substances at the Premises, Building, or Project.

 

  

3

  

 

8.           TENANT’S ALTERATIONS. Tenant will not cut or drill into or secure any fixture, apparatus or equipment or make alterations, improvements or physical additions (collectively, “Alterations”) of any kind to any part of the Premises without first obtaining the written consent of Landlord, such consent not to be unreasonably withheld. Notwithstanding anything in this Lease to the contrary, all furniture, movable trade fixtures and equipment (including telephone, security and communication equipment system wiring and cabling) installed by or for Tenant, its assignees or sublessees shall be removed by Tenant at the termination of this Lease.

 

9.           ASSIGNMENT AND SUBLETTING. Tenant shall not, without the prior written consent of Landlord such consent not to be unreasonably withheld or delayed, assign this Lease or any interest herein or sublet the Premises or any part thereof. Any of the foregoing acts without such consent shall be void. If at any time during the term of this Lease Tenant desires to assign this Lease or sublet all or any part of the Premises, Tenant shall give notice to Landlord of such desire, including the name, address and contact party for the proposed assignee or subtenant, the effective date of the proposed assignment or sublease (including the proposed occupancy date by the proposed assignee or sublessee), and in the instance of a proposed sublease, the square footage to be subleased, a floor plan professionally drawn to scale depicting the proposed sublease area, and a statement of the duration of the proposed sublease (which shall in any and all events expire by its terms prior to the scheduled expiration of this Lease, and immediately upon the sooner termination hereof). Landlord may, at its option, exercisable by notice given to Tenant within forty-five (45) days next following Landlord’s receipt of Tenant’s notice, elect to recapture the Premises if Tenant is proposing to sublet or terminate this Lease in the event of an assignment. Regardless of Landlord’s consent, no subletting or assignment shall release Tenant of Tenant’s obligation or alter the primary liability of Tenant to pay the Rent and to perform all other obligations to be performed by Tenant hereunder. Landlord shall be entitled to a $250 fee for consenting to any sublet or assignment.

For purposes of this Article 9, and without limiting the basis upon which Landlord may withhold its consent to any proposed assignment or sublease, the parties agree that it shall not be unreasonable for Landlord to withhold its consent to such assignment or sublease if: (i) the proposed assignee or sublessee shall have no reliable credit history or an unfavorable credit history, or other reasonable evidence exists that the proposed assignee or sublessee will experience difficulty in satisfying its financial or other obligations under this Lease; (ii) the proposed assignee of sublessee, in Landlord’s reasonable opinion, is not reputable and of good character; (iii) the portion of the Premises requested to be subleased renders the balance of the Premises unleasable as a separate area; (iv) Tenant is proposing a sublease at a rental or subrental rate which is less than the then fair market rental rate for the portion of the Premises being subleased or assigned, or Tenant is proposing to assign or sublease to an existing tenant of the Building or another property owned by Landlord or by its partners, or to another prospect with whom Landlord or its partners, or their affiliates are then negotiating; (v) the proposed assignee or sublessee will cause Landlord’s existing parking facilities to be reasonably inadequate, or in violation of code requirements, or require Landlord to increase the parking area or the number of parking spaces to meet code requirements, or the nature of such party’s business shall reasonably require more than four (4) parking spaces per 1,000 rentable square feet of floor space, or (vi) the nature of such party’s proposed business operation would or might reasonably permit or require the use of the Premises in a manner inconsistent with the “Permitted Use” specified herein, would or might reasonably otherwise be in conflict with express provisions of this Lease, would or might reasonably violate the terms of any other lease for the Building, or would, in Landlord’s reasonable judgment, otherwise be incompatible with other tenancies in the Building.

Notwithstanding anything herein contained to the contrary, Tenant may, after notice to, but without the consent of Landlord, assign this Lease to an affiliate (i.e., a corporation or other entity 50% or more of whose capital stock is owned by the same stockholders owning 50% or more of Tenant’s capital stock), parent or subsidiary corporation of Tenant or to a corporation or other entity to which it sells or assigns all of substantially all of its assets or stock or with which it may be consolidated or merged (“Affiliate”), provided such purchasing, consolidated, merged, affiliated or subsidiary corporation or other entity shall, in writing, assume and agree to perform all of the obligations of Tenant under this Lease, shall have a net worth at least equal to $1,000,000, and it shall deliver such assumption with a copy of such assignment to Landlord within ten (10) days thereafter, and provided further that Tenant shall not be released or discharged from any liability under this Lease by reason of such assignment.

10.         LANDLORD’S RIGHT OF ENTRY. Landlord and persons authorized by Landlord may enter the Premises at all reasonable times during normal business hours (8:00 A.M to 5:30 P.M Monday through Friday) upon reasonable advance notice (or any time without notice in the case of an emergency). Landlord shall not be liable for inconvenience to or disturbance of Tenant by reason of any such entry; provided, however, that in the case of repairs or work, such shall be done, so far as practicable, so as to not unreasonably interfere with Tenant’s use of the Premises. 

11.           REPAIRS AND MAINTENANCE. Tenant, at its sole cost and expense, shall keep and maintain the Premises in good order and condition, free of rubbish, and shall promptly make all non-structural repairs necessary to keep and maintain such good order and condition.  Tenant shall have the option of replacing lights, ballasts, tubes, ceiling tiles, outlets and similar equipment itself or it shall have the ability to advise Landlord of Tenant’s desire to have Landlord make such repairs.  If requested by Tenant, Landlord shall make such repairs to the Premises within a reasonable time of notice to Landlord.  When used in this Article 11, the term “repairs” shall include replacements and renewals when necessary.  All repairs made by Tenant shall utilize materials and equipment which are at least equal in quality and usefulness to those originally used in constructing the Building and the Premises. Landlord shall provide the janitorial services for the Premises set forth on Exhibit “C”.

 

  

4

  

 

Landlord shall make, at its sole cost and expense, all repairs necessary to maintain, as applicable, the Building plumbing, Building air conditioning and electrical systems, windows, elevators, floors, security system and all other items that constitute a part of the Building and are installed or furnished by Landlord, as well as all repairs necessary to maintain the structural soundness and function of the Building (including the roof and exterior walls), parking lot(s), grounds, site lighting and common areas, such costs to be included as operating expenses to the extent permitted under Article 4 hereof; provided, however, that Landlord shall not be obligated for any of such repairs until the expiration of a reasonable period of time after written notice from Tenant that such repair is needed. In no event shall Landlord be obligated to repair any damage caused by any act, omission or negligence of the Tenant or its employees, agents, invitees, licensees, subtenants or contractors; and Tenant shall be solely liable for such repair at Tenant’s sole cost and expense.

12.         INSURANCE; SUBROGATION RIGHTS. Tenant shall obtain and keep in force at all times during the term hereof, at its own expense, commercial general liability insurance including contractual liability and personal injury liability and all similar coverage, with combined single limits of $1,000,000.00 on account of bodily injury to or death of one or more persons as the result of any one accident or disaster and on account of damage to property, or in such other commercially reasonable amounts as Landlord may from time to time reasonably require. Tenant shall also require its movers to procure and deliver to Landlord a certificate of insurance naming Landlord as an additional insured. Tenant shall, at its sole cost and expense, maintain in full force and effect on all Tenant’s trade fixtures, equipment and personal property on the Premises, a policy of “special form” property insurance covering the full replacement value of such property. All liability insurance required hereunder shall not be subject to cancellation without at least thirty (30) days prior notice to all insureds, and shall name Landlord, Brandywine Realty Trust, Landlord’s Agent and Tenant as insureds, as their interests may appear, and, if requested by Landlord, shall also name as an additional insured any mortgagee or holder of any mortgage which may be or become a lien upon any part of the Premises. Prior to the commencement of the Term, Tenant shall provide Landlord with certificates which evidence that the coverages required have been obtained for the policy periods. Tenant shall also furnish to Landlord throughout the term hereof replacement certificates at least thirty (30) days prior to the expiration dates of the then current policy or policies. All the insurance required under this Lease shall be issued by insurance companies authorized to do business in the Commonwealth of Pennsylvania with a financial rating of at least an A-VII as rated in the most recent edition of Best’s Insurance Reports and in business for the past five years. The limit of any such insurance shall not limit the liability of Tenant hereunder. If Tenant fails to maintain such insurance, Landlord may, but is not required to, procure and maintain the same, at Tenant’s expense to be reimbursed by Tenant as Additional Rent within ten (10) days of written demand. Any deductible under such insurance policy in excess of Twenty Five Thousand ($25,000) must be approved by Landlord in writing prior to issuance of such policy. Tenant shall not self-insure without Landlord’s prior written consent. Each party hereto, and anyone claiming through or under them by way of subrogation, waives and releases any cause of action it might have against the other party and Brandywine Realty Trust and their respective employees, officers, members, partners, trustees and agents, on account of any loss or damage that is insured against under any insurance policy required to be obtained hereunder. Each party agrees that it will use its best efforts to cause its insurance carrier to endorse all applicable policies waiving the carrier’s right of recovery under subrogation or otherwise against the other party.

Landlord shall obtain and maintain the following insurance during the Term of this Lease: (i) replacement cost insurance including “special form” property insurance on the Building and on the Project, (ii) builder’s risk insurance for the Landlord Work to be constructed by Landlord in the Project, and (iii) commercial general liability insurance (including bodily injury and property damage) covering Landlord’s operations at the Project in amounts reasonably required by the Landlord’s lender or Landlord.

13.         INDEMNIFICATION.

(a)           Except for claims arising from Landlord’s or Landlord’s agents, contractors, employees or invitees negligence or willful misconduct, Tenant shall defend, indemnify and hold harmless Landlord, Brandywine Realty Trust and their respective employees and agents from and against any and all third-party claims, actions, damages, liability and expense (including all reasonable attorney’s fees, expenses and liabilities incurred in defense of any such claim or any action or proceeding brought thereon) arising from any activity, work or things done, permitted or suffered by Tenant or its agents, licensees or invitees in or about the Premises or elsewhere contrary to the requirements of the Lease, and any negligence or willful act of Tenant or any of Tenant’s agents, contractors, employees or invitees. Without limiting the generality of the foregoing, Tenant’s above referenced indemnification obligations shall include any case, arising from or related to obligations under this Lease, in which Landlord or Brandywine Realty Trust shall be made a party to any litigation commenced by or against Tenant, its agents, subtenants, licensees, concessionaires, contractors, customers or employees, then Tenant shall defend, indemnify and hold harmless Landlord and Brandywine Realty Trust and shall pay all costs, expenses and reasonable attorney’s fees incurred or paid by Landlord and Brandywine Realty Trust in connection with such litigation, after notice to Tenant and Tenant's refusal to defend such litigation, and upon notice from Landlord shall defend the same at Tenant's expense by counsel satisfactory to Landlord.

 

(b) Except for claims arising from Tenant's or any of Tenant's agents, contractors, employees or invitees negligence or willful misconduct, Landlord shall defend, indemnify and hold harmless Tenant and its respective employees and agents from and against any and all third-party claims, actions, damages, liability and expense (including all reasonable attorney's fees, expenses and liabilities incurred in defense of any such claim or any action or proceeding brought thereon) arising from any activity, work or things done, permitted or suffered by Landlord, Brandywine Realty Trust or its agents, licensees or invitees in or about the Building or elsewhere contrary to the requirements of the Lease, and any negligence or willful act of Landlord, Brandywine Realty Trust or any of their agents, contractors, employees or invitees. Without limiting the generality of the foregoing, Landlord's above referenced indemnification obligations shall include any case, arising from or related to obligations under this Lease, in which Tenant shall be made a party to any litigation commenced by or against Landlord, Brandywine Realty Trust and their respective employees and agents, then Landlord shall defend, indemnify and hold harmless Tenant and shall pay all costs, expenses and reasonable attorney’s fees incurred or paid by Tenant in connection with such litigation, after notice to Landlord and its refusal to defend such litigation, and upon notice from Tenant shall defend the same at Landlord’s expense by counsel satisfactory to Tenant.

 

  

5

  

 

14.         FIRE DAMAGE. If (i) the casualty damage is of a nature or extent that, in Landlord’s reasonable judgment, the repair and restoration work would require more than two hundred ten (210) consecutive days to complete after the casualty (assuming normal work crews not engaged in overtime), or (ii) more than thirty (30%) percent of the total area of the Building is extensively damaged, or (iii) the casualty occurs in the last Lease Year of the Term and Tenant has not exercised a renewal right or (iv) insurance proceeds are unavailable or insufficient (taking into consideration landlord’s deductible), either party shall have the right to terminate this Lease and all the unaccrued obligations of the parties hereto, by sending written notice of such termination to the other within thirty (30) days of the date of casualty. Such notice is to specify a termination date no less than fifteen (15) days after its transmission. In the event of damage or destruction to the Premises or any part thereof and neither party has terminated this Lease, Tenant’s obligation to pay Fixed Rent and Additional Rent shall be equitably adjusted or abated.

 

15.         SUBORDINATION: RIGHTS OF MORTGAGEE. This Lease shall be subordinate at all times to the lien of any mortgages now or hereafter placed upon the Premises, Building and/or Project and land of which they are a part without the necessity of any further instrument or act on the part of Tenant to effectuate such subordination. Tenant further agrees to execute and deliver within ten (10) day of demand such further instrument evidencing such subordination and attornment as shall be reasonably required by any mortgagee. In the event Landlord shall be or is alleged to be in default of any of its obligations owing to Tenant under this Lease, Tenant agrees to give to the holder of any mortgage (collectively the “Mortgagee”), of which Tenant has received written notice, now or hereafter placed upon the Premises, Building and/or Project, notice by overnight mail of any such default which Tenant shall have served upon Landlord. Tenant shall not be entitled to exercise any right or remedy as there may be because of any default by Landlord without having given such notice to the Mortgagee; and Tenant further agrees that if Landlord shall fail to cure such default the Mortgagee shall have forty-five (45) additional days within which to cure such default.

 

16.         CONDEMNATION. If in Landlord’s or Tenant’s reasonable judgment a taking renders the Building unsuitable for Tenant’s Permitted Use, this Lease shall, at either party’s option, terminate as of the date title to the condemned real estate vests in the condemnor, and the Fixed Rent and Additional Rent herein reserved shall be apportioned and paid in full by Tenant to Landlord to that date and all rent prepaid for period beyond that date shall forthwith be repaid by Landlord to Tenant and neither party shall thereafter have any liability hereunder. If this Lease is not terminated after any such taking or condemnation, the Fixed Rent and the Additional Rent shall be equitably reduced in proportion to the area of the Premises which has been taken for the balance of the Term. Tenant shall have the right to make a claim against the Condemnor for moving expenses and business dislocation damages to the extent that such claim does not reduce the sums otherwise payable by the condemnor to Landlord.

 

17.         ESTOPPEL CERTIFICATE. Each party agrees at any time and from time to time, within ten (10) days after the other party’s written request, to execute and deliver to the other party a written instrument in recordable form certifying all information reasonably requested.

 

18.         DEFAULT. If: Tenant fails to pay any installment of Rent when due; provided, however, Landlord shall provide written notice of the failure to pay such Rent and Tenant shall have a five (5) business day grace period from its receipt of such Landlord’s notice within which to pay such Rent without creating a default hereunder. The late fee set forth in Article 3 hereof shall be due on the first day after such payment is due irrespective of the foregoing notice and grace period; Tenant “vacates” the Premises (other than in the case of a permitted subletting or assignment) or permits the same to be unoccupied; Tenant fails to bond over a construction or mechanics lien within ten (10) days of demand; Tenant fails to observe or perform any of Tenant’s other non-monetary agreements or obligations herein contained within ten (10) days after written notice specifying the default, or the expiration of such additional time period as is reasonably necessary to cure such default, provided Tenant immediately commences and thereafter proceeds with all due diligence and in good faith to cure such default; then, in any such event, an “Event of Default” shall be deemed to exist and Tenant shall be in default hereunder.

 

  

6

  

 

If an Event of Default shall occur, the following provisions shall apply and Landlord shall have, in addition to all other rights and remedies available at law or in equity, including the right to terminate the Lease, the rights and remedies set forth herein, which may be exercised upon or at any time following the occurrence of an Event of Default. 1. Acceleration of Rent. By notice to Tenant, Landlord shall have the right to accelerate all Rent and all expense due hereunder and otherwise payable in installments over the remainder of the Term; and the amount of accelerated rent to the termination date, without further notice or demand for payment, shall be due and payable by Tenant within five (5) days after Landlord has so notified Tenant, such amount collected from Tenant shall be discounted to present value using an interest rate of six percent (6%) per annum. Additional Rent which has not been included, in whole or in part, in accelerated rent, shall be due and payable by Tenant during the remainder of the Term, in the amounts and at the times otherwise provided for in this Lease. 2. Landlord's Damages. The damages which Landlord shall be entitled to recover from Tenant shall be the sum of: (i) all Fixed Rent and Additional Rent accrued and unpaid as of the termination date; and (ii)(a) all costs and expenses incurred by Landlord in recovering possession of the Premises, including legal fees, and removal and storage of Tenant's property, (ii)(b) the costs and expenses of restoring the Premises to the condition in which the same were to have been surrendered by Tenant as of the expiration of the Term, and (ii)(c) the costs of reletting commissions; and (iii)all Fixed Rent and Additional Rent otherwise payable by Tenant over the remainder of the Term as reduced to present value and all consequential damages relating to Tenant’s breach of this Lease. Less deducting from the total determined under subsections (i), (ii) and (iii) above, all Rent which Landlord receives from other tenant(s) by reason of the leasing of the Premises during any period falling within the otherwise remainder of the Term. Mitigation of Damages. Landlord agrees to use reasonable efforts to mitigate its damages, provided that Landlord shall not be liable to Tenant for its inability to mitigate damages if it shall endeavor to relet the Premises in like mannner as it offers other comparable vacant space or property available for leasing to others in the Project of which the Building is a part. 3. Landlord’s Right to Cure. Without limiting the generality of the foregoing, if Tenant shall fail to perform any of its obligations hereunder, Landlord may, in addition to any other rights it may have in law or in equity, cure such default on behalf of Tenant, and Tenant shall reimburse Landlord upon demand for any sums paid or costs incurred by Landlord in curing such default, including reasonable attorneys’ fees and other legal expenses, together with interest at 12% per annum (“Default Rate”) from the dates of Landlord’s incurring of costs or expenses. 4. Interest on Damage Amounts. Any sums payable by Tenant hereunder, which are not paid after the same shall be due, shall bear interest at the Default Rate. 5. No Waiver by Landlord. No delay or forbearance by Landlord in exercising any right or remedy hereunder, or Landlord’s undertaking or performing any act or matter which is not expressly required to be undertaken by Landlord shall be construed, respectively, to be a waiver of Landlord’s rights or to represent any agreement by Landlord to undertake or perform such act or matter thereafter. Waiver by Landlord of any breach by Tenant of any covenant or condition herein contained (which waiver shall be effective only if so expressed in writing by Landlord) or failure by Landlord to exercise any right or remedy in respect of any such breach shall not constitute a waiver or relinquishment for the future of Landlord’s right to have any such covenant or condition duly performed or observed by Tenant, or of Landlord’s rights arising because of any subsequent breach of any such covenant or condition nor bar any right or remedy of Landlord in respect of such breach or any subsequent breach.

In addition to, and not in lieu of any of the foregoing rights granted to Landlord:

 

WHEN THIS LEASE OR TENANT'S RIGHT OF POSSESSION SHALL BE TERMINATED BY COVENANT OR CONDITION BROKEN, OR FOR ANY OTHER REASON, EITHER DURING THE TERM OF THIS LEASE OR ANY RENEWAL OR EXTENSION THEREOF, AND ALSO WHEN AND AS SOON AS THE TERM HEREBY CREATED OR ANY EXTENSION THEREOF SHALL HAVE EXPIRED, IT SHALL BE LAWFUL FOR ANY ATTORNEY AS ATTORNEY FOR TENANT TO FILE AN AGREEMENT FOR ENTERING IN ANY COMPETENT COURT AN ACTION TO CONFESS JUDGMENT IN EJECTMENT AGAINST TENANT AND ALL PERSONS CLAIMING UNDER TENANT, WHEREUPON, IF LANDLORD SO DESIRES, A WRIT OF EXECUTION OR OF POSSESSION MAY ISSUE FORTHWITH, WITHOUT ANY PRIOR WRIT OF PROCEEDINGS, WHATSOEVER, AND PROVIDED THAT IF FOR ANY REASON AFTER SUCH ACTION SHALL HAVE BEEN COMMENCED THE SAME SHALL BE DETERMINED AND THE POSSESSION OF THE PREMISES HEREBY DEMISED REMAIN IN OR BE RESTORED TO TENANT, LANDLORD SHALL HAVE THE RIGHT UPON ANY SUBSEQUENT DEFAULT OR DEFAULTS, OR UPON THE TERMINATION OF THIS LEASE AS HEREINBEFORE SET FORTH, TO BRING ONE OR MORE ACTION OR ACTIONS AS HEREINBEFORE SET FORTH TO RECOVER POSSESSION OF THE SAID PREMISES.

 

In any action to confess judgment in ejectment or for rent in arrears, Landlord shall first cause to be filed in such action an affidavit made by it or someone acting for it setting forth the facts necessary to authorize the entry of judgment, of which facts such affidavit shall be conclusive evidence, and if a true copy of this Lease (and of the truth of the copy such affidavit shall be sufficient evidence) be filed in such action, it shall not be necessary to file the original as a warrant of attorney, any rule of Court, custom or practice to the contrary notwithstanding.

 

    cjw     (INITIAL). TENANT WAIVER. TENANT SPECIFICALLY ACKNOWLEDGES THAT TENANT HAS VOLUNTARILY, KNOWINGLY AND INTELLIGENTLY WAIVED CERTAIN DUE PROCESS RIGHTS TO A PREJUDGMENT HEARING BY AGREEING TO THE TERMS OF THE FOREGOING PARAGRAPHS REGARDING CONFESSION OF JUDGMENT. TENANT FURTHER SPECIFICALLY AGREES THAT IN THE EVENT OF DEFAULT, LANDLORD MAY PURSUE MULTIPLE REMEDIES INCLUDING OBTAINING POSSESSION PURSUANT TO A JUDGMENT BY CONFESSION AND ALSO OBTAINING A MONEY JUDGEMENT FOR PAST DUE AND ACCELERATED AMOUNTS AND EXECUTING UPON SUCH JUDGMENT. IN SUCH EVENT AND SUBJECT TO THE TERMS SET FORTH HEREIN, LANDLORD SHALL PROVIDE FULL CREDIT TO TENANT FOR ANY MONTHLY CONSIDERATION WHICH LANDLORD RECEIVES FOR THE LEASED PREMISES IN MITIGATION OF ANY OBLIGATION OF TENANT TO LANDLORD FOR THAT MONEY. FURTHERMORE, TENANT SPECIFICALLY WAIVES ANY CLAIM AGAINST LANDLORD AND LANDLORD’S COUNSEL FOR VIOLATION OF TENANT’S CONSTITUTIONAL RIGHTS IN THE EVENT THAT JUDGMENT IS CONFESSED PURSUANT TO THIS LEASE.

 

19.         SURRENDER.  Tenant shall, at the expiration of the Term, promptly vacate and surrender the Premises in good order and condition and in conformity with the applicable provisions of this Lease. Tenant shall have no right to hold over beyond the expiration of the Term and if Tenant does not vacate as required, Tenant's occupancy shall not be deemed a tenancy at sufferance. During the first thirty (30) days of occupancy beyond the expiration of the Term the amount of rent owed to Landlord by Tenant shall automatically become one hundred fifty percent (150%) the sum of the Rent as those sums are at that time calculated under the provisions of the Lease. If Tenant fails to surrender the space within thirty (30) days of the termination date, Landlord may elect to automatically extend the Term for an additional month with a Rent of two hundred percent (200%) the sum of the Rent as those sums are at that time calculated under the provisions of the Lease. The acceptance of rent by the Landlord or the failure or delay of Landlord in notifying or

 

  

7

  

 

evicting Tenant following the expiration or sooner termination of the Term shall not create any tenancy rights in Tenant and any such payments by Tenant may be applied by Landlord against its costs and expenses, including attorney’s fees, incurred by Landlord as a result of such holdover.

 

20.         RULES AND REGULATIONS. Tenant agrees that at all times during the terms of this Lease (as same may be extended) it, its employees, agents, invitees and licenses shall comply with all rules and regulations specified on Exhibit “D” attached hereto and made a part hereof.

 

21.         GOVERNMENTAL REGULATIONS. Tenant shall, in the use and occupancy of the Premises and the conduct of Tenant’s business or profession therein, at all times comply with all applicable laws, ordinances, orders, notices, rules and regulations of the federal, state and municipal governments. Landlord shall be responsible for compliance with Title III of the Americans with Disabilities Act of 1990, 42 U.S.C. §12181 et seq. and its regulations, (collectively, the “ADA”) (i) as to the design and construction of exterior and interior common areas (e.g. sidewalks and parking areas) and (ii) with respect to the initial design and construction of the Premises by Landlord. Except as set forth above in the initial sentence hereto, Tenant shall be responsible for compliance with the ADA in all other respects concerning the use and occupancy of the Premises, which compliance shall include, without limitation (i) provision for full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of the Premises as contemplated by and to the extent required by the ADA, (ii) compliance relating to requirements under the ADA or amendments thereto arising after the date of this Lease and (iii) compliance relating to the design, layout, renovation, redecorating, refurbishment, alteration, or improvement to the Premises made or requested by Tenant at any time following completion of the Landlord’s Work.

 

22.         NOTICES. Wherever a notice is required, notice shall be deemed to have been duly given if in writing and either: (i) personally served; (ii) delivered by pre-paid nationally recognized overnight courier service; (iii) forwarded by Registered or Certified mail, return receipt requested, postage prepaid; (iv) facsimile with a copy mailed by first class U.S. mail or (v) e-mailed with evidence of receipt and delivery of a copy of the notice by first class mail; in all such cases addressed to the parties at the following addresses:

	
Tenant:

	
Trigen Laboratories, Inc.

	  
	  	
1155 Business Center Drive, Suite 130

	  
	  	
Horsham, PA 19044

	  
	  	
Attn: Christopher J. Worrell, CEO

	  
	  	
Fax No:

	  
	  	
E-Mail: Christopher_Worrell@trigenlabs.com

	  
	  	  	  
	
Landlord:

	
Brandywine Operating Grande C, L.P.

	
Brandywine Realty Trust

	  	
401 Plymouth Road, Suite 500

	
401 Plymouth Road, Suite 500

	  	
Plymouth Meeting, PA 19462

	
Plymouth Meeting, PA 19462

	  	
Attn: Phil Schenkel, Vice President

	
Attn: Brad A. Molotsky, General Counsel

	  	
Fax No.: 610-325-5622

	
Fax No.: 610-832-4928

	  	
E-Mail: Phil.Schenkel@brandywinerealty.com

	
E-Mail: brad.molotsky@brandywinerealty.com

Each such notice shall be deemed to have been given to or served upon the party to which addressed on the date the same is delivered or delivery is refused.

23.         BROKERS. Landlord and Tenant each represents and warrants to the other that such party has had no dealings, negotiations or consultations with respect to the Premises or this transaction with any broker or finder, except The Flynn Company (“Broker”). Landlord shall pay the Broker a commission for this transaction based on a separate written agreement between the Broker and Landlord. Each party agrees to indemnify and hold the other harmless from and against all liability, cost and expense, including attorney’s fees and court costs, arising out of any misrepresentation or breach of warranty under this Article.

24.         LANDLORD’S LIABILITY. Landlord’s obligations hereunder shall be binding upon Landlord only for the period of time that Landlord is in ownership of the Building; and, upon termination of that ownership, Tenant, except as to any obligations which are then due and owing, shall look solely to Landlord's successor in interest in the Building for the satisfaction of each and every obligation of Landlord hereunder. Landlord shall have no personal liability under any of the terms, conditions or covenants of this Lease and Tenant shall look solely to the interest of Landlord in the Building (including rents, financing proceeds, insurance proceeds, condemnations awards and sale proceeds) for the satisfaction of any claim, remedy or cause of action accruing to Tenant as a result of the breach of any section of this Lease by Landlord. In addition to the foregoing, no recourse shall be had for an obligation of Landlord hereunder, or for any claim based thereon or otherwise in respect thereof, against any past, present or future trustee, member, partner, shareholder, officer, director, partner, agent or employee of Landlord, whether by virtue of any statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such other liability being expressly waived and released by Tenant with respect to the above-named individuals and entities.

 

  

8

  

 

25.         RELOCATION. Landlord, at its sole expense, on at least ninety (90) days’ prior written notice (“Notice”) to Tenant, may require Tenant to move from the Premises to another suite of substantially comparable quality, size and decor in the Building or in the Project in order to permit Landlord to consolidate the Premises with other adjoining space leased or to be leased to another tenant in the Building, or to allow Landlord to perform work on the Building; provided, however, that Tenant shall have the right to terminate this Lease by written notice given to Landlord not more than thirty (30) days after Tenant’s receipt of Notice to relocate and in such event the Lease shall terminate ninety (90) days following the Notice date. In the event of any such relocation, Landlord shall pay all the reasonable expenses (a) of preparing and decorating the new premises so that they will be substantially similar to the Premises, (b) of moving Tenant’s furniture and equipment to the new premises (including Tenant’s data and communication wiring and cabling), and (c) incurred and documented by Tenant, up to a maximum amount of $2,500.00, in notifying its clients of such relocation, obtaining new letterhead and business cards, and other incidental expenses related directly to Tenant’s relocation. Furthermore, in the event of any such relocation, if the rentable square footage of the new premises is greater than the rentable square footage of the original Premises, Tenant shall not be required to pay any amount of rent, including Fixed Rent and Tenant’s Share of Recognized Expenses, in excess of that which Tenant would pay under this Lease had the Premises not been relocated as aforesaid,.

 

26.         MISCELLANEOUS PROVISIONS. (a) Successors. The respective rights and obligations provided in this Lease shall bind and inure to the benefit of the parties hereto, their successors and assigns; provided, however, that no rights shall inure to the benefit of any successors or assigns of Tenant unless Landlord’s written consent for the transfer to such successor and/or assignee has first been obtained as provided in Article 9 hereof; (b) Governing Law. This Lease shall be construed, governed and enforced in accordance with the laws of the Commonwealth of Pennsylvania, without regard to principles relating to conflicts of law; (c) Entire Agreement. This Lease, including the Exhibits and any Riders hereto, supersedes any prior discussions, proposals, negotiations and discussions between the parties and the Lease contains all the agreements, conditions, understandings, representations and warranties made between the parties hereto with respect to the subject matter hereof, and may not be modified orally or in any manner other than by an agreement in writing signed by both parties hereto or their respective successors in interest. Without in any way limiting the generality of the foregoing, this Lease can only be extended pursuant to the terms hereof, with the due exercise of an option (if any) contained herein pursuant to a written agreement signed by both Landlord and Tenant specifically extending the term. No negotiations, correspondence by Landlord or offers to extend the term shall be deemed an extension of the termination date for any period whatsoever; (d) Time of the Essence. TIME IS OF THE ESSENCE IN ALL PROVISIONS OF THIS LEASE, INCLUDING ALL NOTICE PROVISIONS TO BE PERFORMED BY OR ON BEHALF OF TENANT; (e) Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than any payment of Fixed Rent or Additional Rent herein stipulated shall be deemed to be other than on account of the earliest stipulated Fixed Rent or Additional Rent due and payable hereunder, nor shall any endorsement or statement or any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction. Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other right or remedy provided for in this Lease, at law or in equity; (f) Guaranty. Intentionally Omitted. (g) Force Majeure. If by reason of strikes or other labor disputes, fire or other casualty (or reasonable delays in adjustment of insurance), accidents, orders or regulations of any Federal, State, County or Municipal authority, or any other cause beyond Landlord’s reasonable control, Landlord is unable to furnish or is delayed in furnishing any utility or service required to be furnished by Landlord under the provisions of this Lease or is unable to perform or make or is delayed in performing or making any installations, decorations, repairs, alterations, additions or improvements, or is unable to fulfill or is delayed in fulfilling any of Landlord’s other obligations under this Lease, no such inability or delay shall constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of Fixed Rent, or relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents, by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant’s business, or otherwise. (h) Financial Statements. If Tenant shall incur a monetary Event of Default, Tenant shall furnish to Landlord, Landlord’s Mortgagee, prospective Mortgage or purchaser reasonably requested financial information; (i) Authority. Tenant represents and warrants that (a) Tenant is duly organized, validly existing under the laws of the State of Maryland and legally authorized to do business in the Commonwealth of Pennsylvania, (b) the persons executing this Lease are duly authorized to execute and deliver this Lease on behalf of Tenant, and (c) this Lease has been executed under seal in accordance with the laws of the Commonwealth of Pennsylvania; (j) NAIC NUMBER. Tenant represents and warrants that Tenant’s North American Industry Classification (“NAIC”) number under the North American Industry Classification System as promulgated by the Executive Office of the President, Office of Management and Budget is 325412.

 

27.         CONSENT TO JURISDICTION. Tenant hereby consents to the exclusive jurisdiction of the state courts located in Montgomery County and Philadelphia County and to the federal courts located in the Eastern District of Pennsylvania in connection with any matter or dispute arising out of this Lease.

 

28.         EXPANSION. Tenant may notify Landlord at any time during the Term that Tenant desires to lease additional space within the portfolio of properties owned or controlled by Landlord, Brandywine Realty Trust or any affiliate thereof ("BRT Portfolio"), which additional space must represent an expansion of at least 50% from the Premises on a square foot basis. Subject to Tenant not being in default, nor Tenant ever having been in default under this Lease, Landlord shall notify Tenant with regard to space that is available for lease within the BRT Portfolio that meets the requirements set forth above, if any such space is available, and Landlord shall propose to Tenant the basic economic terms upon which Landlord would be prepared to entertain the negotiation of a new lease for such space. Provided Landlord and Tenant negotiate, execute and deliver a lease for such space containing terms and conditions mutually acceptable to Landlord and Tenant in their sole discretion, Landlord and Tenant shall terminate this Lease.

 

  

9

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Lease, under Seal, the day and year first above written.

	
WITNESS:

	  	
LANDLORD:

	  	  	  	
BRANDYWINE OPERATING GRANDE C, L.P.

	  	  	  	  	  
	  	  	  	
By:

	
Brandywine Grande C Corp.,

	  	  	  	  	
its general partner

	  	  	  	  	  
	  	  	  	
By:

	
/s/ Phil Schenkel

	  	  	  	  	
Phil Schenkel,

	  	  	  	  	
Vice President

	  	  	  	  	  
	
ATTEST:

	  	
TENANT:

	  	  	  	
TRIGEN LABORATORIES, INC.

	  	  	  	  	  
	
/s/ Ram Potti

	  	
By:

	
/s/ Christopher J. Worrell

	
Name:

	
RAM POTTI

	  	
Name:

	
Christopher J. Worrell

	
Title:

	
Secretary

	  	
Title:

	
CEO

IF THIS LEASE IS NOT SIGNED BY TENANT BY NOVEMBER 1, 2005, IT WILL AUTOMATICALLY BECOME NULL AND VOID.

 

  

10

  

 

EXHIBIT “A”

SPACE PLAN

 

  

 

  

 

EXHIBIT “B”

 

Tenant: Trigen Laboratories, Inc.

Premises: 1155 Business Center Drive, Suite 130

  Horsham, Pennsylvania 19044

Square Footage: 1,638 RSF

 

CONFIRMATION OF LEASE TERM

 

THIS MEMORANDUM is made as of the           day of                      , 2005, between BRANDYWINE OPERATING GRANDE C, L.P., a Delaware limited partnership, with an office at 401 Plymouth Road, Suite 500, Plymouth Meeting, PA 19462 (“Landlord”) and TRIGEN LABORATORIES, INC., a Pennsylvania corporation, with its principal place of business at _____________________ (“Tenant”), who entered into a lease dated for reference purposes as of ________ __, 200_, covering certain premises located at 1155 Business Center Drive, Horsham, Pennsylvania 19044. All capitalized terms, if not defined herein, shall be defined as they are defined in the Lease.

1.           The Parties to this Memorandum hereby agree that the date of ________________, 200_ is the “Commencement Date” of the Term, that the date _________, 200_ is the Rent Commencement Date and the date ________ is the expiration date of the Lease.

 

	
  

	
2.

	
Tenant hereby confirms the following:

 

(a)         That it has accepted possession of the Premises pursuant to the terms of the Lease;

 

(b)         That the improvements, including the Landlord Work, required to be furnished according to the Lease by Landlord have been Substantially Completed;

 

(c)         That Landlord has fulfilled all of its duties of an inducement nature or are otherwise set forth in the Lease;

 

(d)         That, to Tenant’s knowledge, there are no offsets or credits against rentals, and the $                   Security Deposit has been paid as provided in the Lease;

 

(e)          That, to Tenant’s knowledge, there is no default by Landlord or Tenant under the Lease and the Lease is in full force and effect.

 

3.     Landlord hereby confirms to Tenant that its Building Number is ________ and its Lease Number is __________. This information must accompany each Rent check or wire payment.

 

	4.     Tenant’s Notice Address is:	 	
Tenant’s Billing Address is:

	  	  	 	  
	
  

	 	
  

	
  

	 	
  

	
  

	 	
  

	
Attn:

	
  

	 	
Attn:

	
  

	
Phone No.:

	
  

	 	
Phone No.:

	
  

	
Fax No.:

	
  

	 	
Fax No.:

	
  

	
E-mail:

	
  

	 	
E-mail:

	
  

 

5.            This Memorandum, each and all of the provisions hereof, shall inure to the benefit, or bind, as the case may require, the parties hereto, and their respective successors and assigns, subject to the restrictions upon assignment and subletting contained in the Lease.

	
WITNESS:

	 	
LANDLORD:

	  	 	
BRANDYWINE OPERATING GRANDE C, L.P.

	  	 	
By:

	
Brandywine Grande C Corp.,

	  	 	  	
its general partner

	 	 	 	 
	 	 	By:	 

 

	
WITNESS:

	 	

TENANT:

	  	 	

TRIGEN LABORATORIES, INC.

	 	 	 	 
	 	 	By:	 

 

  

 

  

 

EXHIBIT “C”

OFFICE CLEANING SPECIFICATIONS

 

DAILY

Empty Trash and Recycle

Remove Spots/Spills from Carpet 

Remove Visible Debris/Litter from Carpet 

Spot Clean Desks and Tables 

Straighten Chair -- Furniture 

Turn Off Lights

 

WEEKLY

Dust Desks and Computer Monitors

Vacuum Carpet 

Clean Wastebaskets

Clean Light Fixtures and Vents 

Clean Telephones

Clean Walls, Switch Plates and Baseboards 

Dust File Cabinets, Partitions and Bookshelves 

Clean Chairs

Clean Doors 

Clean Tables

Dust Pictures and Surfaces Over 5'

Dust Window Sills, Ledges and Radiators 

Spot Clean Side Light Glass

RESTROOM CLEANING SPECIFICIATIONS

DAILY

Sinks 

Floors 

Counters

Trash Receptacle 

Toilet/Urinals 

Dispensers 

Door

Spot Clean Walls 

Spot Clean Partitions

WEEKLY

Dust Lights

Dust Surfaces Over 5' 

Ceiling Vents 

Clean Walls 

Clean Partitions

FLOOR CARE SPECIFICIATIONS

DAILY

Spot Clean Carpet

WEEKLY

Burnish Polished Surfaces

MONTHLY

Machine Scrub Restroom Floors 

Scrub and Recoat Copy Room Floors

Scrub and Recoat Kitchenette Floors

ONCE EVERY FOUR MONTHS

Shampoo Conference Room Carpets

YEARLY

Strip and Refinish all vinyl tile

 

THESE SPECIFICATIONS ARE SUBJECT TO CHANGE, BUT NOT DIMINISHMENT, WITHOUT

NOTICE. THE COST FOR ANY CLEANING OVER AND ABOVE THE STANDARD CLEANING

SPECIFICATIONS IS TO BE BORNE BY THE TENANT.

 

  

 

  

 

	
16.

	
Tenant shall not use the name of the Building, Landlord or Landlord’s Agent in any way in connection with his business except as the address thereof. Landlord shall also have the right to prohibit any advertising by Tenant, which, in its sole opinion, tends to impair the reputation of the Building or its desirability as a building for offices, and upon written notice from Landlord, Tenant shall refrain from or discontinue such advertising.

 

	
17.

	
Tenants must be responsible for all Security Access cards issued to them, and to secure the return of same from any employee terminating employment with them. Lost cards shall cost $35.00 per card to replace. No person/company other than Building Tenants and/or their employees may have Security Access cards unless Landlord grants prior written approval.

 

	
18.

	
All deliveries by vendors, couriers, clients, employees or visitors to the Building which involve the use of a hand cart, hand truck, or other heavy equipment or device must be made via the Freight Elevator. Tenant shall be responsible to Landlord for any loss or damage resulting from any deliveries made by or for Tenant to the Building. Tenant shall procure and deliver a certificate of insurance from Tenant’s movers which certificate shall name Landlord as an additional insured.

 

	
19.

	
Landlord reserves the right to inspect all freight to be brought into the Building, and to exclude from the Building all freight or other material which violates any of these rules and regulations.

 

	
20.

	
Tenant will refer all contractors, contractor’s representatives and installation technicians, rendering any service on or to the premises for Tenant, to Landlord for Landlord’s approval and supervision before performance of any contractual service or access to Building. This provision shall apply to all work performed in the Building including installation of telephones, telegraph equipment, electrical devices and attachments and installations of any nature affecting floors, walls, woodwork, trim, windows, ceilings, equipment or any other physical portion of the Building. Landlord reserves right to require that all agents of contractors/vendors sign in and out of the Building.

 

	
21.

	
Landlord reserves the right to exclude from the Building at all times any person who is not known or does not properly identify himself to Landlord’s management or security personnel.

 

	
22.

	
Landlord may require, at its sole option, all persons entering the Building after 6 PM or before 7 AM, Monday through Friday and at any time on Holidays, Saturdays and Sundays, to register at the time they enter and at the time they leave the Building.

 

	
23.

	
No space within the Building, or in the common areas such as the parking lot, may be used at any time for the purpose of lodging, sleeping, or for any immoral or illegal purposes.

 

	
24.

	
No employees or invitees of Tenant shall use the hallways, stairs, lobby, or other common areas of the Building as lounging areas during “breaks” or during lunch periods.

 

	
25.

	
No canvassing, soliciting or peddling is permitted in the Building or its common areas by tenants, their employees, or other persons.

 

	
26.

	
No mats, trash, or other objects shall be placed in the public corridors, hallways, stairs, or other common areas of the Building.

 

	
27.

	
Tenant must place all recyclable items of cans, bottles, plastic and office recyclable paper in appropriate containers provided by Landlord in each tenant’s space. Removal of these recyclable items will be by Landlord’s janitorial personnel.

 

	
28.

	
Landlord does not maintain suite finishes which are non-standard, such as kitchens, bathrooms, wallpaper, special lights, etc. However, should the need arise for repair of items not maintained by Landlord, Landlord at its sole option, may arrange for the work to be done at Tenant’s expense.

 

	
29.

	
Drapes installed by Tenant, which are visible from the exterior of the Building, must be cleaned by Tenant, at its own expense, at least once a year.

 

	
30.

	
No pictures, signage, advertising, decals, banners, etc. are permitted to be placed in or on windows in such a manner as they are visible from the exterior, without the prior written consent of Landlord.

 

	
31.

	
Tenant or Tenant's employees are prohibited at any time from eating or drinking in hallways, elevators, rest rooms, lobby, or lobby vestibules.

 

	
32.

	
Tenant shall be responsible to Landlord for any acts of vandalism performed in the Building by its employees, agents, invitees or visitors.

 

	
33. 

	
No tenant shall permit the visit to its Premises of persons in such numbers or under such conditions as to interfere with the use and enjoyment of entrances, hallways, elevators, lobby or other public portions or facilities of the Building and exterior common areas by other tenants.

 

  

 

  

 

	
34.

	
Landlord’s employees shall not perform any work or do anything outside of their regular duties unless under special instructions from Landlord. Requests for such requirements must be submitted in writing to Landlord.

 

	
35.

	
Tenant agrees that neither Tenant nor its agents, employees, licensees or invitees will interfere in any manner with the installation and/or maintenance of the heating, air conditioning and ventilation facilities and equipment.

 

	
36.

	
Landlord will not be responsible for lost or stolen personal property, equipment, money or jewelry from Tenant’s area or common areas of the Project regardless of whether such loss occurs when area is locked against entry or not.

 

	
37.

	
Landlord will not permit entrance to Tenant’s Premises by use of pass key controlled by Landlord, to any person at any time without written permission of Tenant, except employees, contractors or service personnel supervised or employed by Landlord.

 

	
38.

	
Tenant and its agents, employees and invitees shall observe and comply with the driving and parking signs and markers on the Building grounds and surrounding areas.

 

	
39.

	
Tenant and its employees, invitees, agents, etc. shall not enter other separate tenants’ hallways, restrooms or premises unless they have received prior approval from Landlord’s management.

 

	
40. 

	
Tenant shall not use or permit the use of any portion of the Premises for outdoor storage.

 

	
41.

	
Tenant shall not overload any floor in the Premises or the Building, including any public corridors or elevators therein, bringing in, placing, storing, installing or removing any large or heavy articles, and Landlord may prohibit, or may direct and control the location and size of, safes and all other heavy articles, and may require, at Tenant’s sole cost and expense, supplementary supports of such material and dimensions as Landlord may deem necessary to properly distribute the weight.

 

	
42.

	
Tenant shall not commit or suffer any waste upon the Premises, Building or Project or any nuisance, or do any other act or thing which may disturb the quiet enjoyment of any other tenant in the Building or Project.

 

***********

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00190-of-00352.parquet"}]]