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  SETTLEMENT STIPULATION AND RELEASE
 

 This Settlement Stipulation and Release (“Stipulation”) is made and entered into as of March 25, 2011 (the “Settlement Date”), by and among NATIONAL AUTOMATION SERVICES, INC., a Nevada corporation (“NAS”), INTECON, INC., an Arizona corporation (“Intecon”), INTUITIVE SYSTEMS SOLUTIONS, INC., a Nevada corporation (“ISS”), and ROBERT CHANCE, individually (“Chance”) (NAS, Intecon, ISS and Chance shall collectively be referred to herein as the “NAS Parties”), TRAFALGAR CAPITAL SPECIALIZED INVESTMENT FUND, LUXEMBOURG, a Luxembourg SICA V Fund, also known as TRAFALGAR CAPITAL SPECIALIZED INVESTMENT FUND, FIS, a foreign general partnership (“Trafalgar Luxembourg”), TRAFALGAR CAPITAL Sarl (“Trafalgar Sarl”), TRAFALGAR CAPITAL ADVISORS, a Florida corporation (“TCA”) (Trafalgar Luxembourg, Trafalgar Sarl, Trafalgar FIS and TCA shall collectively be referred to herein as the “Trafalgar Parties”), (the NAS Parties and Trafalgar Parties shall collectively be referred to herein as the “Parties”), with reference to the following facts: 
 

 (Each of the above Parties shall include singular and plural, their past, present and future representatives, legal representatives, assigns, transferees, successors, heirs, members, partners, subsidiaries, affiliates, including, without limitation, all subsidiaries and affiliates, parents and venturers, including, without limitation, their past, present and future principals, attorneys, agents, officers, directors, shareholders, employees, and predecessors wherever the context so admits or requires of either Party)
 

 WHEREAS, on or around March 26, 2008, July 15, 2008 and December 18, 2008 the Parties entered into a series of financing transactions as more particularly described and set forth in Exhibit “A” hereto and fully incorporated herein by reference (collectively, the “Transaction Documents”);
 

 WHEREAS, the Parties stipulate and agree that the Transaction Documents are the only agreements that exist between the Parties as of the date hereof; 
 

 WHEREAS, on April 23, 2009, NAS, Intecon and ISS filed the following styled action in the U.S. District Court for the Southern District of Florida against the Trafalgar Parties: National Automation Services, Inc., et al. v. Trafalgar Capital Specialized Investment Funds, FIS, et al.; Southern District of Florida, Case No. 09-CV-60599 (the “NAS Action”); 
 

 WHEREAS, on October 23, 2009 the Trafalgar Parties filed the following styled action in the U.S. District Court for the Southern District of Florida against the NAS parties: Trafalgar Capital Specialized Investment Fund v. National Automation Services, Inc., et al.; Southern District of Florida; Case No. 09-CV-61739 (the “Trafalgar Action”); 
 

 WHEREAS, the NAS Action and the Trafalgar Action have been consolidated for discovery purposes (the “Consolidated Action”); 
 

 

 
 WHEREAS, the Parties agree that there has been no determination as to the nature of the Financing Transaction; 
 

 NOW, THEREFORE, in consideration of the promises, covenants, warranties, and representations set forth herein, the Parties agree as follows:
 

 1.
 Recitals. Each of the recitals set forth above are true and correct.
 2.
 Liens and Encumbrances. The Parties agree that to the best of their knowledge that the following are the only liens and/or encumbrances that any of the Trafalgar Parties own and/or hold with respect to any of the NAS Parties (collectively, the “Encumbrances”): 
 i.
 the UCC-1 Financing Statements attached, referenced and/or mentioned in Composite Exhibit “B” attached hereto as pages B-1 through and including B-69 (the “Financing Statements”);
 ii.
 that certain Security Agreement by and between National Automation Services, Inc. (the “Company”) and the Buyers listed on Schedule I attached to the Securities Purchase Agreement dated July __, 2008; 
 iii.
 Security Agreement by and between National Automation Services, Inc., Intuitive Systems Solutions, Inc., Intecon, Inc. and Trafalgar Capital Specialized Investment Fund, FIS dated December 18, 2008; and 
 iv.
 Pledge Agreement by and between National Automation Services, Inc. and Trafalgar Capital Specialized Investment Fund, FIS dated December 18, 2008. 
 b)
 Authorization to File and Record UCC-3 Termination Statements. Provided that NAS does not file for bankruptcy protection within ninety days from the Settlement Date (the “Release Stay Period”), then on the ninety-first (91st) day from the Settlement Date , the NAS Parties shall be authorized to file and/or record, at their sole and absolute discretion, UCC-3 Termination Statements terminating the effectiveness of each and every one of the Encumbrances including, without limitation, the Financing Statements in any state, county, city or other jurisdiction that the NAS Parties in their sole and absolute discretion deem appropriate.
 c)
 Non-Interference and Non-Disparagement Covenant. The Trafalgar Parties covenant and agree not to interfere, disparage, defame or otherwise impede any of the NAS Parties from obtaining debt or equity financing from any third party during the Release Stay Period and thereafter. Specifically, and without limitation, the Trafalgar Parties shall not seek to enforce and/or foreclose upon any of the Encumbrances and/or Financing Statements during the Release Stay Period and thereafter provided that the NAS does not file for bankruptcy protection during the Release Stay Period.
 d)
 No Other Liens or Encumbrances. To the best of the Parties’ knowledge, other than the Encumbrances, the Trafalgar Parties, or any of them, do not own or hold any other liens and/or encumbrances of any kind against any of the NAS Parties including, without limitation, against any of the NAS Parties’ assets including, without limitation, goods, inventory, contract rights, general intangibles, documents, warehouse receipts, instruments, chattel paper, account receivables, 
 

 
 future authorizations, permits, licenses, franchises, products, proceeds, equity interests, securities, investments and/or real property. Also to the best of the Parties’ knowledge, other than the Encumbrances, including the Financing Statements, no other liens and/or encumbrances have been filed and/or recorded by any of the Trafalgar Parties and/or by any of their direction with respect to any of the NAS Parties.
 e)
 Further Execution. The Trafalgar parties shall execute, or cause to be executed, any other releases or other documents that may be necessary to release any encumbrances and/or liens not released by this Stipulation.
 3.
 Payment to Trafalgar Luxembourg. NAS, by and through a third party payor, shall deliver payment in cleared funds to the Trafalgar Parties in the sum of $300,000.00 made payable to Schoeppl & Burke, P.A. Trust Account f/b/o Trafalgar Capital Specialized Investment Fund, Luxembourg (the “Settlement Sum”) forthwith upon receipt of the fully executed Stipulation by all of the Parties hereto. The payment of the Settlement Sum shall be made via wire transfer in accordance with the wire instructions attached hereto as Exhibit “H.” In the event payment of the Settlement Sum is delivered prior to the full execution of this Stipulation, counsel for the Trafalgar Parties shall hold the Settlement Sum in escrow and shall be authorized to disburse upon full execution of this Stipulation. In addition to the Settlement Sum, NAS shall execute and deliver to Trafalgar Luxembourg a promissory note in the form attached hereto as Exhibit “I” in the principal amount of $200,000 payable within 6 months from the Settlement Date accruing interest at the rate of seven percent (7%) simple interest per annum with interest only due in arrears and principal due at maturity, with no pre-payment penalty (the “NAS Note”). Chance shall also execute and deliver to Trafalgar Luxembourg a personal guaranty in the form attached hereto as Exhibit “J” guarantying NAS’s payment of the NAS Note (the “Chance Guaranty”).
 4.
 Delivery of Additional Stock. Within a reasonable period of time, not to exceed 20 days from the full execution of this Stipulation by all Parties hereto, the NAS Parties shall cause 7,645,821 shares of NAS common stock to be issued and delivered to the Trafalgar Parties which shall be registered in the name of DZ PrivatBank FBO Trafalgar Capital Specialized Investment Fund (“Additional Stock”) and delivered to Trafalgar c/o Carl Schoeppl, Esq., Schoeppl & Burke, P.A., 4651 North Federal Highway, Boca Raton, Florida, as counsel for the Trafalgar Parties. NAS agrees to provide Trafalgar with piggy back registration rights on NAS’s next S-1 filing with respect to the Additional Stock delivered pursuant to this Stipulation.
 5.
 Registration. NAS shall provide Trafalgar with piggy back registration rights in NAS’s next S-1 filing for the 2,150,000 shares of NAS common stock issued to Trafalgar prior to the Settlement Date or, alternatively, shall deliver to Trafalgar a Rule 144 opinion letter in the form acceptable to the Parties once NAS is permitted to do so under applicable law, whichever to occur first.
 6.
 Conditional Delivery of Additional Stock. Within a reasonable period of time, not to exceed 20 days from the full execution of this Stipulation by all Parties hereto,, NAS shall execute and deliver to its Transfer Agent the irrevocable instructions for issuance of common stock in the form attached hereto as Exhibit “D” (“Irrevocable Instructions”).
 7.
 Dismissal with Prejudice of Litigation. Immediately upon delivery of the Payment, Additional Stock, and Irrevocable Instructions as set forth above, the Parties shall execute 
 

 
 a Joint Stipulation of Dismissal, With Prejudice, in the Consolidated Action, in the form attached hereto as Exhibit “M”, which shall provide for the dismissal with prejudice of the NAS Action and the Trafalgar Action, with each party to bear their own attorneys’ fees and costs together with a proposed order of dismissal, in the form attached hereto as Exhibit “N”, providing that the Court shall retain jurisdiction to enforce the terms of this Stipulation and specifically finding that the Transaction Documents including, without limitation, that certain Revolving Note in the amount of $1,000,000.00 made by National Automation Services, Inc., Intuitive System Solutions, Inc. and Intecon, Inc. in favor of Trafalgar Capital Specialized Investment Fund, FIS are cancelled, void and of no further force or effect.
 8.
 Satisfaction of Transaction Documents and Release of Liens. Simultaneous with the delivery of the Payment, Additional Stock, and Irrevocable Instructions as set forth above, the Trafalgar Parties shall execute and deliver to the NAS Parties that certain Satisfaction of Note, Security Agreements, Transaction Documents and UCC-1 in the form attached hereto as Exhibit “E” (the “Satisfaction”). The Trafalgar Parties shall execute, or cause to be executed, such other and further documents that may reasonably be necessary to effectuate the release of liens and encumbrances called for by this Paragraph; provided, however, that the NAS Parties prepare, at their sole cost and expense, such other and further documents and the foregoing are in acceptable form to counsel for the Trafalgar Parties.
 9.
 Default Judgment. In the event that NAS files for bankruptcy protection during the Release Stay Period, the Trafalgar Parties shall be entitled to the immediate entry of a default final judgment in their favor and against NAS for the liquidated amount of $2.7 Million, less any payments received from any of the NAS Parties from and after the Settlement Date. In conjunction with the execution of this Agreement, NAS shall execute and deliver to the Trafalgar Parties a Consent to the Entry of Final Judgment in the form attached hereto as Exhibit “K” for entry of a Final Consent Judgment Against NAs in the form attached hereto as Exhibit “L.”
 10.
 Press Release. Upon the full execution of this Agreement, the Parties shall issue a mutually agreeable press release stating that the Consolidated Action has been amicably resolved and in a manner satisfactory to all Parties.
 11.
 Release of Claims and Covenant Not to Sue.
 a)
 Release of NAS Parties. Simultaneous with the NAS Parties’ satisfaction of the conditions set forth in Paragraphs 3 through 6 above, the Trafalgar Parties shall execute and deliver to the NAS Parties a General Release and Covenant Not to Sue in the form attached hereto as Exhibit “F.”
 b)
 Release of Trafalgar Parties. Simultaneous with the Trafalgar Parties’ timely satisfaction of the conditions set forth in Paragraphs 7 and 8 above, the NAS Parties shall execute and deliver to the Trafalgar Parties a General Release and Covenant Not to Sue in the form attached hereto as Exhibit “G.”
 12.
 Choice of Law. The laws of the State of Florida shall govern the construction, enforcement and interpretation of this Stipulation, regardless of and without reference to whether any applicable conflicts of laws principles may point to the application of the laws of another jurisdiction.
 13.
 Venue, Jurisdiction. The Parties hereby agree that the exclusive venue and jurisdiction to resolve any and all disputes between them including, without limitation, any disputes 
 

 
 arising out of or relating to this Stipulation, and any and all alleged underlying obligations of the Released Claims shall be in the U.S. District Court for the Southern District of Florida. The Parties consent to personal jurisdiction and venue in the Southern District of Florida and waive any defense of forum non conveniens, lack of personal jurisdiction, or like defense.
 14.
 Reasonableness. The Parties stipulate and agree that the provisions contained in this Stipulation are reasonable, that no Party had overwhelming bargaining power, and that the terms of this Stipulation are not violative of any state or federal statute or policy.
 15.
 Enforceability. This Stipulation shall be enforced to the maximum extent permitted by law. In the event that any provision of this Stipulation is found to be unenforceable, void, or invalid, that finding shall not affect the enforceability or validity of any other provision hereof.
 16.
 Entire Agreement. This Stipulation embodies the entire agreement and understanding between the Parties, and supersedes any and all prior or concurrent stipulations, understandings, statements, assurances, assumptions, premises, promises, agreements, discussions or representations, oral or written, relating to the subject matter of this Stipulation, and/or the facts underlying the dispute between the Parties. None of the Parties has made any representations upon which either Party has relied that are not contained in this Stipulation. None of the Parties is relying on an unstated assumption, premise or condition not contained in this Stipulation.
 17.
 Construction. It is understood that this Stipulation was negotiated and prepared by the Parties and their counsel as a combined effort designed to meet their desires and needs. This Stipulation shall be interpreted without regard to any presumption or rule requiring interpretation against the drafter or the Party causing this Stipulation to be prepared.
 18.
 No Modification or Waiver. No modification or waiver of any of the terms of this Stipulation shall be valid unless in writing and executed by all the Parties with the same formality as this Stipulation. No waiver of any breach hereof or default hereunder shall be deemed a waiver of any subsequent breach or default of the same or similar or dissimilar nature. No course of dealing or course of conduct shall be effective to amend, modify or change any provision of this Stipulation. Notwithstanding any applicable law, the terms of this Paragraph may not be waived by any course of dealing or course of conduct.
 19.
 Counterparts. The Parties agree that this Stipulation may be executed in counterparts and will become effective immediately upon execution by all the Parties, subject to exchange of signature pages and subject to the stipulations set forth above. Facsimile signatures shall be binding to the same extent as originals.
 20.
 Attorneys’ Fees. Each Party shall bear their own attorneys’ fees and costs in any legal action or other proceeding arising out of or relating to this Stipulation, the prevailing Party shall be entitled to recover from the non-prevailing Party all of the attorneys’ fees and court costs incurred by the prevailing Party, with no exception, (including costs and fees incurred prior to the filing of any lawsuit, costs and fees incurred at the trial court and appellate court levels, and costs and fees incurred as a result of litigating entitlement to, or the amount of, any fees awarded under this Stipulation).
 21.
 Notice. Any and all notices, demands or communications required or permitted to be given hereunder shall be in writing and sent by overnight mail to:
 

 

 
 
 NAS Parties at: 
 Mr. Robert Chance
 2470 St. Rose Parkway, Suite 311
 Henderson, NV 89074
 Copy to: 
 William R. Clayton, Esq. and Avi Benayoun, Esq.
 401 East Las Olas Boulevard
 Suite 2000
 Fort Lauderdale, FL 33301
 Trafalgar Parties at: 
 c/o Carl F. Schoeppl, Esq.
 Schoeppl & Burke, P.A.
 4651 North Federal Highway
 Boca Raton, Florida 33431
 

 Or to such other addresses as any Party may hereafter provide to the other in writing as a notice of change of address. Each such notice, demand or other communication shall be effective upon receipt by any of the Parties’ recipients.
 

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 [SIGNATURES APPEAR ON NEXT PAGE]
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 For The NAS Parties
 NATIONAL AUTOMATION 
 SERVICES,
 INC., a Nevada corporation
 

 By: /s/ Robert W. Chance
 Name: Robert W. Chance
 Title: President and CEO of NAS
 

 INTECON, INC., an Arizona corporation
 By: /s/ Brandon Spiker
 Name: Brandon Spiker
 Title: President
 

 INTUITIVE SYSTEMS SOLUTIONS, INC., 
                                                                                a Nevada corporation
 By: /s/ Jody Hanley
 Name: Jody Hanley
 Title: President
 

 

  
/s/ Robert W. Chance
 ROBERT CHANCE, individually

 
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 For The Trafalgar Parties
 TRAFALGAR CAPITAL SPECIALIZED 
                                                                               INVESTMENT FUND, LUXEMBOURG, a                                                                               Luxembourg SICA V Fund, also known as,                                                                               Trafalgar Capital Specialized Investment                                                                               Fund, FIS, a foreign general partnership
  
 
                                                                                                        By:  Trafalgar Capital Sarl Its: General Partner
 By: /s/ B. Vayderscheldey
 Name: Bruno Vayderscheldey
 Title: Manager
 

 TRAFALGAR CAPITAL Sarl
 By: /s/ B. Vayderscheldey
 Name: Bruno Vayderscheldey
 Title: Manager
 

 TRAFALGAR CAPITAL ADVISORS, a 
                                                                                Florida corporation
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 Listing of Exhibits
 

 

 Exhibit A - 
 Transaction documents
 Exhibit B - 
 UCC-1 Financing Statements
 Exhibit C - 
 INTENTIONALLY OMITTED
 Exhibit D - 
 NAS Transfer Agent the irrevocable instructions for issuance of common stock
 Exhibit E - 
 Documents and UCC-1
 Exhibit F - 
 NAS General Release and Covenant Not to Sue
 Exhibit G - 
 Trafalgar Parties a General Release and Covenant Not to Sue
 Exhibit H - 
 Wire instructions
 Exhibit I - 
 NAS to Trafalgar Luxembourg Promissory note
 Exhibit J - 
 NAS to Trafalgar Luxembourg Personal guaranty
 Exhibit K - 
 Consent to the Entry of Final Judgment
 Exhibit L - 
 Final Consent Judgment against NAS
 Exhibit M - 
 Joint Stipulation of Dismissal, With Prejudice, in the Consolidated Action
 Exhibit N - 
 Proposed order of dismissalexhibit10-32.htm

  

  

  

Exhibit 10.32

 

 

LICENSE AGREEMENT

 

This License Agreement (“Agreement”), effective as of January 5, 2007 (“Effective Date”), is between NovaDel Pharma, Inc., a Delaware corporation located at 25 Minneakoning Road, Flemington, NJ, 08822 USA (“Licensor”), and Kwang Dong Pharmaceuticals, a corporation duly organized and existing under the laws of the Republic of Korea, located at 157-27, Samseong-Dong, Gangnam-Gu, Seoul, 135-526, Korea, (“Licensee”).

 

WHEREAS, Licensor is the owner of certain technologies, know-how and/or patent rights relating to ondansetron oral spray;

 

WHEREAS, Licensee desires to obtain the right and license to use and exploit the above- referenced technologies, know-how and patent rights for the purpose of making and commercializing an ondansetron oral spray product; and

 

WHEREAS, Licensor is willing to grant Licensee such a license pursuant to the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, the parties agree as follows:

 

 

1. DEFINITIONS

 

As used in this Agreement, the following terms, whether used in the singular or plural, shall have the following meanings:

 

 

1.1 “Affiliate” means any legal entity directly or indirectly controlling, controlled by or under common control with a party. For purposes of this Agreement, “control” means the direct or indirect ownership of more than fifty percent (50%) of the outstanding voting securities of a legal entity or the right to direct the policy decisions of a legal entity.

 

 

1.2 “Licensed Product” means an ondansetron oral spray composition, dosage form, or method of treatment (i) the manufacture, use or sale of which is covered by one or more claims of a Licensor Patent; or (ii) which is made or used, at least in part, utilizing Licensor Know-How.

 

 

1.3 “Field” means the making and selling of ondansetron oral spray as an anti-emetic for human use.

 

 

1.4 “Licensor Know-How” means Licensor’s or any of its Affiliates’ trade secrets, information and know-how including, without limitation, non-patented proprietary information, inventions, developments, discoveries, techniques, formulations, designs, materials, processes,

 

  

1

  

 

1.5 manufactures, procedures, works of authorship, compositions of matter or methods of use (whether or not patentable or copyrightable) that is now owned, licensed or controlled or hereafter acquired, developed, owned, licensed or controlled by Licensor or any of its Affiliates during the term of this Agreement and related to the inventions claimed by the Licensor Patents or related to Licensor’s clinical studies or regulatory filings.

 

 

1.6 “Licensor Patents” means the South Korea Patent Applications listed on Exhibit 1 and any extensions, including patent applications filed as, or patents issuing from, any continuation, divisional, re-issue, or continuation-in-part application relating to any of the patents or applications on Exhibit 1.

 

 

1.7 “Licensor Technology” means, collectively, the Licensor Patents and Licensor Know-How.

 

 

1.8 “Net Sales” means the gross amounts billed to third parties, by Licensee or its Affiliates, or in connection with the sale, use or other disposition of a Licensed Product, less (i) any allowances actually made and taken for returns; (ii) shipping and insurance costs actually paid; (iii) cash discounts and promotional allowances actually allowed in amounts and for purposes customary in the trade; and (iv) sales, use, value added and excise taxes and shipping charges incurred in connection with any such sale, use or other disposition.  With respect to any revenues received in currencies other than U.S. Dollars, all aggregate amounts shall be converted into U.S. Dollars in accordance with U.S. generally accepted accounting principles, and reported in U.S. Dollars at the point of calculation of Net Sales for the purpose of Royalty payment.  In the event a Licensed Product is sold or otherwise disposed of in combination with other apparatus or products, or in any other combination, and the Licensed Product is not sold or otherwise disposed of separately and no list price exists for the Licensed Product, the Net Sales of the Licensed Product shall be determined by multiplying the aggregate selling price of the combination by a fraction the numerator of which shall be the cash consideration Licensee would realize from an unaffiliated buyer for the Licensed Product in an arm’s length sale of an identical item sold at the same time and place and in the same quantity (“Fair Market Value”) and the denominator of which shall be the actual cost for the total combination, as determined by generally accepted accounting principals consistently applied, in the quarter of the sale.  In the event that both the Licensed Product and other product have separate list prices but are being sold or otherwise disposed of at a combination price which is less than the total of the separate list prices, then the Net Sales of the Licensed Product shall be determined by multiplying the invoice price charged for the combination by a fraction, the numerator of which is the list price of the Licensed Product and the denominator of which is the sum of the list prices of the Licensed Product and such other products.  In the event that Licensed Products are transferred to Affiliates or other end users or distributors for non-cash consideration or where no invoice is generated, Net Sales of such Licensed Products shall be valued by determining the Fair Market Value of the Licensed Product at the time of transfer.  As used herein, the term “otherwise disposed of” or “other disposition” means any Licensed Product not sold but delivered by Licensee to a third party, regardless of the compensation paid to Licensee, if any.  A Licensed Product will be considered sold or otherwise disposed of on the date it is shipped or invoiced, whichever is earlier.

 

  

2

  

 

1.9 “Term” means the last to expire patent which covers the making, use or sale of a Licensed Product within the Territory, or 10 years from the Effective Date whichever is later.

 

 

1.10 “Territory” means the country of South Korea.

 

 

2. LICENSE; KNOW-HOW DELIVERY.

 

 

2.1 Grant.  Subject to the terms, covenants and conditions of this Agreement, Licensor hereby represents and warrants that it has right to license the Licensor Technology, and grants to Licensee an exclusive license and right, under the Licensor Technology, to manufacture, have manufactured, use, import, distribute and sell Licensed Products in the Field in the Territory during the Term.  Notwithstanding the foregoing, Licensor retains the right to license or otherwise exploit other anti-emetic technologies and products in the Territory. Licensor shall provide reasonable cooperation to Licensee, as may be necessary or appropriate to support Licensee’s efforts, in order that Licensee may register such license and right with the relevant authorities in the Territory.

 

 

2.2 Non-Transferability of License.  The license granted to Licensee in Section 2.1 is personal and may not be sublicensed, transferred or assigned, except that Licensee has the limited right to grant sublicenses to distributors solely for the purpose of reselling, offering for sale and distributing Licensed Products within the Field and solely within the Territory.

 

 

2.3 License Limited to Licensor Technology.  The license granted by Licensor in Section 2.1 is limited to the Licensor Technology.  Under this Agreement, no license is granted or implied under any other patent, know-how, trade secret or other technology or trademark now or hereafter owned or controlled by Licensor or any of its Affiliates.

 

 

2.4 Licensee acknowledges and agrees that Licensor is the owner of the Licensor Technology and intellectual property rights of any kind in relation thereto.  Nothing contained in this Agreement shall be effective to give any rights of ownership to the intellectual property owned by Licensor.

 

 

3. PAYMENT

 

 

3.1 License Fee.  Licensee must pay Licensor one hundred thousand dollars (US$100,000) within fifteen days of the Effective Date.

 

 

3.2 Royalty.  In consideration of the license and rights granted to Licensee hereunder, Licensee will pay Licensor a royalty of ten percent (10%) on the Net Sales of Licensed Products during the Term.

 

 

3.3 Milestones.  Licensee shall pay Licensor one hundred thousand dollars (US$100,000) within thirty (30) days of the approval by the Korean Food and Drug

 

  

3

  

 

3.4 Administration for the sale of the Licensed Product in the Territory. In addition, Licensee shall pay Licensor one hundred thousand dollars (US$100,000) within thirty (30) days of the first commercial sale of the Licensed Product.

 

 

3.5 Payment.  All royalties will be payable quarterly and accompanied by the report described in Section 4.1.  All payments to be made hereunder will be made by Licensee in immediately available funds in United States Dollars by check or by wire transfer to an account designated by Licensor for such purposes.  All payments made are non-refundable and non-creditable.

 

 

4. REPORTS AND RECORDS

 

 

4.1 Reports.  Licensee will deliver to Licensor within forty-five (45) days after the end of each calendar quarter a report setting forth the number and type of Licensed Products sold, the Net Sales figures for such Licensed Products and the amount of Royalties, if any, that are owed to Licensor.

 

 

4.2 Records.  During the Term and for a period of one (1) year following the termination or expiration of this Agreement, Licensee will maintain complete and accurate books and records to enable Licensor to verify compliance with Section 3 and confirm whether and in what amount any royalties or milestones are payable under this Agreement.  Upon reasonable prior notice to Licensee, Licensee will grant an independent certified public accountant chosen by Licensor access to all books and records relating to the Net Sales of Licensed Products to enable such accountant to conduct a review or audit of those books and records.  Access to Licensee’s books and records will be permitted during reasonable business hours and be limited to once each calendar year.  Reviews and audits requested by Licensor will be at Licensor’s expense, unless such review or audit reveals an underpayment or nonpayment of royalties of more than 5% in which case Licensee will reimburse Licensor’s reasonable costs of such review or audit.  This paragraph survives the expiration or termination of this Agreement.

 

 

5. CONFIDENTIALITY

 

 

5.1 Confidentiality.  Licensee agrees to keep confidential and not disclose or transfer to any third party, and will cause its employees, consultants and Affiliates to keep confidential, during the Term any Licensor Know-How or any other proprietary information or material of Licensor that is disclosed or transferred to Licensee, or to any of its employees, consultants or Affiliates, pursuant to or in connection with this Agreement, except to the extent that disclosure or transfer is reasonably required in accordance with the performance of this Agreement, and Licensee hereby agrees to exercise every reasonable precaution to prevent and restrain unauthorized disclosure or use of such confidential information.  Licensee’s nondisclosure obligations herein shall not apply to information that is:  (i) known to Licensee at the time of disclosure as evidenced by written documentation; (ii) or becomes publicly available without the fault of Licensee; (iii) subsequently disclosed to Licensee by a third party not under a secrecy

 

  

4

  

 

5.2 obligation to Licensor; (iv) required by law, regulation or action of any governmental agency or authority to be disclosed; or (v) disclosed by Licensee with the prior written consent of Licensor.

 

 

6. DISCLAIMERS

 

 

6.1 No Representations and Warranties.  LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES (I) OF COMMERCIAL UTILITY; OR (II) OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE.

 

 

6.2 Limitation of Liability.  LICENSOR WILL NOT BE LIABLE TO LICENSEE OR ANY OF ITS SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO ANY CLAIM ARISING FROM LICENSEE’S USE OF THE LICENSOR TECHNOLOGY LICENSED UNDER THIS AGREEMENT OR FROM THE MANUFACTURE, USE OR SALE OF LICENSED PRODUCTS, INCLUDING ANY LICENSED PRODUCTS PURCHASED FROM LICENSOR’S MANUFACTURER; NEITHER PARTY WILL BE LIABLE TO THE OTHER OR TO ANY THIRD PARTY FOR ANY CLAIM OF LOSS OF PROFITS, LOSS OR INTERRUPTION OF BUSINESS, OR FOR INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND. LICENSOR MAKES NO WARRANTY THAT ANY MANUFACTURE, USE OR SALE OF LICENSED PRODUCTS WILL NOT INFRINGE ANY THIRD PARTY INTELLECTUAL PROPERTY, AND MAKES NO WARRANTIES AS TO THE VALIDITY OR ENFORCEABILITY OF THE LICENSED PATENTS.

 

 

7. INDEMNIFICATION;

 

 

7.1 Licensee Indemnity.  Licensee hereby agrees to indemnify, hold harmless, and defend Licensor and its directors, officers, employees and agents, and Hana Biosciences, Inc and its directors, officers, employees and agents, (Licensor’s U.S.A. licensee and the U.S.A. New Drug Application owner for ondansetron oral spray) (collectively the “Licensor Indemnified Parties”), against any and all claims, proceedings, demands, liability and expenses of any kind, including legal expenses and attorneys fees (collectively, “Claims”), arising out of or in connection with the manufacture, sale, use, consumption, advertisement or other disposition of Licensed Products by Licensee, its Affiliates or any end user, or arising from any breach of any material obligation of Licensee hereunder, other than Claims resulting from the gross negligence or willful misconduct of a Licensor Indemnified Party.  The Parties hereby acknowledge and agree that Hana Biosciences, Inc. is an intended third party beneficiary to Licensee’s obligations under this Section 7.1.

 

 

7.2 Licensor Indemnity.  Licensor hereby agrees to indemnify, hold harmless, and defend Licensee, its officers, agents and employees (the “Licensee Indemnified Parties”), against any and all Claims that arise from any breach by Licensor of any material obligation of Licensor hereunder.

 

  

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7.3 Procedure.  The indemnified party/ies shall give the indemnifying party prompt notice of any claims of third parties as to which it proposes to demand indemnification hereunder.  The indemnifying party shall have the right to assume the good faith defense, compromise or settlement of any such claim (without prejudice to the right of the indemnified party to participate in such defense) at its own expense through attorneys reasonably acceptable to the indemnified party, provided that Licensee shall have no right to deny the validity of any patent included in the Licensor Patents in any compromise or settlement of any claim.  If the indemnifying party does not elect to defend such claim or suit within ten (10) days after having received notice thereof or fails to prosecute its defense diligently, the indemnified party may in its sole discretion defend against such claim or suit at the indemnifying party’s expense.  The indemnified party may thereafter elect to settle such claim or suit or otherwise enter into a compromise with the claimant.

 

 

7.4 Limitation on Liability.  Neither party will be liable for any indirect, special, consequential or other damages whatsoever, whether grounded in tort (including negligence), strict liability, contract, or otherwise.

 

 

8. INTELLECTUAL PROPERTY RIGHTS AND CONFIDENTIAL INFORMATION

 

 

8.1 Prosecution.  Licensor shall have the first right to file, prosecute, maintain and enforce patent applications and patents included in the Licensed Patents.  If Licensor elects not to file such a patent application or to allow any such patent application or patent to become abandoned or lapse, it shall give Licensee notice of such election prior to the last date that action must be taken to avoid such abandonment or lapse.  Licensee shall then have the right to request Licensor to commence or continue with the filing, prosecution or maintenance of any such application or patent included in the Licensed Patents in Licensor’s name and expense.  Licensor will consider such request, but retains the rights to grant and to not grant such request at its sole discretion.

 

 

8.2 In the event that either party becomes aware of a potential infringement of intellectual property rights relating to the Licensed Products, their formulation, use or process of manufacture, that party shall immediately notify the other party.  Licensor shall have the sole right to determine what conduct, if any, to take in relation to the infringement of any Licensed Patents and Licensee shall, at the request of Licensor, consult, co-operate with and assist Licensor in any such conduct.

 

 

8.3 Claimed Infringement.  In the event that a third party at any time provides written notice of a claim to, or brings an action, suit or proceeding against, a Party or any of their respective Affiliates or sublicensees, claiming infringement of its patent rights, trademark or copyrights or unauthorized use or misappropriation of its technology, based upon an assertion or claim arising out of the development, manufacture, use or sale of Licensed Products or the Licensed Technology in the Field, such Party shall promptly notify the other Party of the claim or the commencement of such action, suit or proceeding, enclosing a copy of the claim and/or all papers served.

 

  

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8.4 Publications.  Licensor has the right to issue a press release announcing the relationship created by this Agreement.  Licensee has the right to review and consent to such press release, such consent not to be unreasonably withheld.  Licensor shall have the right to review all proposed Licensee publications and press releases related to research findings or analyses of the Licensed Products in advance of Licensee providing such publications and releases to any third party.  Licensee shall give Licensor thirty (30) days to review any and all such publications or press releases.  Licensor shall have the right to have Licensee remove any and all Confidential Information or proprietary information of Licensor from such publications or press releases prior to disclosure to any third party.

 

 

9. ADDITIONAL ITEMS

 

 

9.1 Manufacturing.  Under the license granted herein, Licensee may have the Licensed Product manufactured by any party including itself, but in the case that Licensee wishes to use Licensor’s manufacturer (currently Ferring Pharmaceuticals of Sweden), Licensor consents to such use under the following conditions:

 

 

9.1.1 Licensee must negotiate its own agreement directly with such manufacturer;

 

 

9.1.2 Licensor makes no warranties that manufacturer will enter into any agreement with Licensee nor that any pricing will be satisfactory to Licensee;

 

 

9.2 Regulatory. Licensee shall be responsible for all regulatory submissions and other licensing and governmental approvals necessary to commercialize the Licensed Products in the Territory.  Furthermore, if any additional clinical studies or any other expenses are incurred or required to commercialize the Licensed Products, Licensee shall bear all such costs alone.

 

 

9.3 Diligence.  Licensee agrees to meet the diligence milestones listed in Exhibit 2 by the dates listed in Exhibit 2.  Failure to meet such diligence milestones is considered a material breach of this Agreement and cause for the immediate termination of this Agreement, subject to the cure requirements of section 10.2.1. In addition, Licensee shall provide to Licensor periodic reports on the status of the research and development (including progress toward achieving the Milestones) of Licensed Product conducted during the Research Program. These reports must include all raw data for such research, development, preclinical and clinical data generated during the development of Licensed Product (“Generated Data”), except to the extent that this would be inconsistent with the confidentiality of patient data and/or the integrity of study data. Such reports must be provided to Licensor upon request, but in no event less than once per quarter (where reasonable this info can be added to the reports due under section 4.1 unless the situation dictates a more frequent report). Licensor will have the right to use data provided by Licensee pursuant to this paragraph in any way it sees fit, including but not limited to, including it in its own regulatory filings, subject to (i) advance notification of the same to Licensee and (ii) where data is to be disclosed to third parties, that such third parties have entered into written obligations of confidentiality with Licensor which are at least as onerous as is set out in this

 

  

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9.4 Agreement. Licensee must notify Licensor within one business day of the recognition of any adverse events reported among the participants in any clinical studies being conducted by or on behalf of Licensee with the Licensed Products.

 

 

9.5 Registration Dossiers and Hana Bioscience’s Cooperation.  Within a reasonable time after signing of this Agreement,

 

 

9.5.1 Licensor shall provide Licensee with all the confidential and proprietary registration dossiers and/or materials submitted to FDA to obtain governmental approvals in the US, and the necessary Certificates required for registration of Licensed Product in the Territory.  All such information will be provided “as is” and Licensor makes no warranties as to its fitness for any particular purpose. Notwithstanding the preceding, if any changes or edits to the registration dossiers are required by the US FDA, Licensor shall give copies of the documents filed with the US FDA containing the edits or changes to Licensee as soon as reasonably possible.

 

 

9.5.2 Licensor shall obtain consent from Hana Biosciences, Inc that Hana Biosciences, Inc allows Licensee to purchase and import Licensed Product with US packaging into the Territory from Hana Biosciences’s contract manufacturer.

 

 

9.6 It shall be the responsibility of Licensee to follow all procedures and take all actions which are necessary or required for agreements of this type by the laws, treaties or regulations applicable in the country in which it is developing, manufacturing, selling, using or manufacturing or marketing any Licensed Product .

 

 

9.7 It is further agreed that neither party shall be obligated to carry out or perform any or all of the terms of this Agreement as shall constitute a violation of any treaty, law, code or regulation of any governmental authority whether local, national or international. In any event, the other terms of this Agreement shall nevertheless continue and the Parties shall use all reasonable efforts to re-negotiate this Agreement so that the performance of this Agreement as so amended will not involve any such violation.

 

 

10. TERM AND TERMINATION

 

 

10.1 Term.  This Agreement and the license granted hereunder will terminate at the expiration of the Term.

 

 

10.2 Termination. Each party has the right to terminate this Agreement:

 

 

10.2.1 if the other fails to make any payment due and owing, or commits a breach of any material provision of this Agreement and fails to make such payment or remedy such breach within sixty (60) days after receiving written notice of such default or breach, or

 

  

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10.2.2 if any proceeding is instituted by or against a party seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking an entry of an order for relief or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property or taking any action to authorize any of the foregoing or similar actions.

 

 

10.3 Rights After Termination. Termination or expiration of this Agreement does not release either party from any obligation previously accrued. In the event of termination of this Agreement for other than a breach by Licensee, Licensee will have the right to complete all contracts executed prior to the date of termination for the sale of Licensed Products, provided that all such sales are completed within four (4) months after the date of termination.

 

 

10.4 Remedies. The right of either party to terminate under this Section 10 will not be an exclusive remedy, and either party will be entitled, if the circumstances warrant, alternatively or cumulatively, to seek damages for breach of this Agreement, to seek an order requiring performance of the obligations of this Agreement, or to seek any other legally available remedy.

 

 

11. GENERAL PROVISIONS

 

 

11.1 Assignment. This Agreement may not be transferred or assigned by either party except with the prior written consent of the other party, except that either party may assign this Agreement to its Affiliate or to any party acquiring all or substantially all of the assets and business relating to this Agreement upon written notice to the other party. Any assignment in violation hereof is void.

 

 

11.2 Notice of Infringement. Licensee agrees to notify Licensor promptly of any actual, suspect or threatened infringement of Licensor Patents that may come to its attention.

 

 

11.3 Disputes. In the event of any dispute arising out of or relating to this Agreement the parties agree to first negotiate in good faith to reach a commercially reasonable settlement. Failing a satisfactory resolution of such dispute within sixty (60) days, and in the event one of the parties wishes to litigate the matter, the courts of competent jurisdiction in the State of New Jersey, USA will have exclusive jurisdiction.

 

 

11.4 Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties hereto with respect to the subject matter hereof, and supersedes any prior understandings, agreements or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way.

 

 

11.5 Amendment; Waiver. This Agreement may be amended, and any provision of this Agreement may be waived only if such amendment or waiver is set forth in writing executed by

 

  

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11.6 the parties hereto. No course of dealing between the parties will be deemed effective to modify, amend or discharge any part of this Agreement or any rights or obligations of any party.

 

 

11.7 Severability. The provisions of this Agreement are severable, and in the event that any provision of this Agreement is determined to be invalid or unenforceable under any controlling body of the law, such invalidity or unenforceability will not in any way affect the validity or enforceability of the remaining provisions hereof.

 

 

11.8 Relationship of the Parties. The relationship of the parties shall be that of independent contractors.  Neither party will represent that it has any authority to assume or create any obligation, express or implied, on behalf of the other party, or to represent the other party as agent, employee, or in any other capacity, except as specifically provided herein.

 

 

11.9 Headings. The headings used in this Agreement are for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

 

 

11.10 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument.

 

 

11.11 Survival. The provisions of sections 3, 4.2, 5, 6, 7.1-7.4, 8.3, 9, 10.3 and 10.4 will survive any termination or expiration of this Agreement.

 

 

11.12 Notices. All notices and other communications required under this Agreement will be in writing and if by mail, by overnight mail (e.g. Federal Express), and shall be effective when delivered to the addressee at the address listed below or such other address as a party may designate in a notice actually received by the addressee.

 

 

11.13 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of New Jersey, USA.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

 

 

	
LICENSOR

	  	
LICENSEE

	
NovaDel Pharma Inc.

	  	
Kwang Dong Pharmaceuticals

	
23 Minneakoning Road

	  	
157-27, Samseong-Dong, Gangnam-Gu

	
Flemington, New Jersey  08822

	  	
Seoul, 135-526, Korea

	
USA

	  	  
	  	  	  
	
By:

	
/s/ Jan H. Egberts

	  	
By:

	
/s/ Soo Boo Choi

	
Name:

	
Jan H. Egberts, M.D.

	  	
Name:

	
Soo Boo Choi

	
Title:

	
President & CEO

	  	
Title:

	
Chairman

  

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