Exhibit 10.8
MEMORANDUM OF UNDERSTANDING
THIS MEMORANDUM OF UNDERSTANDING made at Bombay between BIO-VED PHARMACEUTICALS
LIMITED, Pune, ("BIO-VED") and ALEMBIC CHEMICALS WORKS CO. LIMITED, Baroda
("ALEMBIC") as follows;
A. Bio-Ved is entitled to use or otherwise have permission in respect of an
ayurvedic pharmaceutical preparation recommended for the treatment of
Rheumatic Arthritis and Osteo Arthritis manufactured and marketed under the
brand name of ARTREX ("the Product");
B. The formulations of ARTREX are patented under US Patent Laws (Patent #
549,4668 issued on Feb 27, 1996) as well as Indian Patent Laws (# 176901
issued on August 26, 1994); and the ownership of these patents is with
AyurCore, Inc., USA the parent Company of Bio-Ved in India;
C. Bio-Ved and Alembic have agreed that the said ARTREX will be manufactured
by Bio-Ved and marketed by Alembic in India on the following broad terms:
1. The trademark ARTREX is owned by Bio-Ved and shall remain an exclusive
property of Bio-Ved. Alembic neither has nor shall claim any right,
title or interest in the said trademark or the product;
2. Initially, Alembic shall test market the said product ARTREX all over
Maharashtra including the Cities of Pune and Bombay to have the
assessment regarding acceptance and effectiveness of the product for
the recommended disorders for a period of six months from the date
hereof.
3. For the purpose of promoting the product ARTREX in the Maharashtra
state for test marketing, Bio-Ved will make available mutually agreed
Physicians samples (3.5 lac capsules) free of cost till March 98. All
other promotional material will be prepared by Alembic at its own cost
and all such promotional materials shall be jointly prepared.
4. Bio-Ved shall furnish requisite Technical Data including the clinical
trials conducted in respect of the Product ARTREX either in India or
abroad. Such technical data and details will be used by Alembic for
the purpose of promotion of the said product ARTREX.
5. Bio-Ved shall be responsible for the product liability, that may arise
out of its use and accordingly shall indemnify Alembic for the same.
However, Alembic through its distributors shall observe the usual
marketing norms and ethical practices such as withdrawal of stocks of
expiry dates, damaged goods in transit
etc.
6. The product ARTREX shall be marketed by Alembic in India only whereas
Bio-Ved shall have manufacturing as well as marketing rights in
respect of the product ARTREX outside India.
7. Alembic shall make available to Bio-Ved the forecast of sales response
as well as place orders atleast 60 days in advance of its required
quantity for the sale.
8 [a] The supply of the product ARTREX shall be made ex-Pune @ Rs.7=00
per blister pack of 10 capsules to Alembic inclusive of excise
duty, if any.
[b] The maximum Retail price shall be decided by Alembic but conveyed
to Bio-Ved well in advance to enable Bio-Ved to do the needful.
[c] Various other details shall be decided mutually by and between
the parties from time to time.
9. It is mutually agreed by and between the parties hereto that Alembic
shall launch the said product with full promotional efforts as a major
product launch. It is further mutually agreed that effective 1st
April, 1998, Alembic will be able to implement all India launch in
respect of the said product ARTREX, subject to satisfactory results
obtained by doctors during test marketing and substantial volumes of
business to make the deal commercially viable.
10. It is further mutually agreed by and between the parties hereto that
the parties will enter into the detail Marketing Agreement on long
term basis for and in respect of the said product ARTREX. In the
event, if such a detail Marketing Agreement is not executed for any
reason whatsoever on or before 31st March, 1998, then, in that event,
this Memorandum of Understanding shall come to an end and none of the
parties shall have any right, title, interest including any claim in
respect of the said product against each other save and except the
recovery for the supplies made by Bio-Ved to Alembic hereunder.
11. The detail Marketing Agreement that will be executed between Alembic
and Bio-Ved shall, inter alia, provide the following:
[a] The maximum retail price of the product ARTREX from time to
time shall be fixed by Alembic;
[b] Transfer price in respect of the product ARTREX shall be reviewed
and revised once in every six months based on the costs of
production incurred by Bio-Ved plus reasonable return of profit
thereon;
[c] An exit clause which would provide that in the event of
termination of the Agreement during the subsistence thereof by
Bio-Ved, it shall compensate Alembic as and by way of liquidated
damages an amount equivalent to three times of the total sales
turnover of previous twelve months calculated/based on the
transfer price given effect to by and between the parties.
12. Alembic shall not, during the period this MoU is in force or any time
thereafter, without the consent of Bio-Ved, for any reason, disclose
or permit the use by any person, firm or corporation of any technical
data, information, details or otherwise or any improvement which may
be received from Bio-Ved and shall take all reasonable efforts to
prevent any such disclosure or use by its officers, directors and
employees both during the terms of office and employment and
thereafter or by any other persons, who for any reason, may access or
use such information, details or data. Alembic has already entered
into a confidentiality Agreement with Bio-Ved in this respect and this
confidentiality Agreement dated January 28, 1997 is binding on both
the parties from that date.
SIGNED & DELIVERED BY SIGNED & DELIVERED BY
For Bio-Ved Pharmaceuticals For Alembic Chemical Works
Pvt. Ltd. Co. Ltd.
s/Ajit P. Chitre 10/9/1997 [Illegible]
Mr. Ajit P Chitre Mr.
Director (Operations) Authorised Signatory