Exhibit 10.9
MEMORANDUM OF UNDERSTANDING
THIS AGREEMENT made and entered into at Pune, this 23rd day of October, 1997,
between: KANCOR FLAVOURS AND EXTRACTS LIMITED, a Company incorporated under the
Companies Act, l956 and having its registered office at Angmaly, Cochin, Kerala
682 002; hereinafter called "Kancor" (which expression shall unless repugnent to
the context or meaning thereof be deemed to mean and include its
successors-in-title and assigns) of the One Part AND BIO-VED PHARMACEUTICALS
PRIVATE LIMITED, a Company incorporated under the Companies Act, 1956 and having
its registered office at 6, Pradeep Chambers, Bhandarkar Institute Road, Pune -
411 005; hereinafter called "Bio-Ved" (which expression shall unless repugnent
to the context or meaning there of be deemed to mean and include its
successors-in-title and assigns) of the Other Part.
WHEREAS:
A. Bio-Ved holds and is otherwise entitled to technology, technical know-how
including expertise and has made available the same to Kancor in respect of
extraction, preservation and processing of a natural herb/root viz.
[*****];
B. Bio Ved, a subsidiary of AyurCore, Inc., USA is engaged in manufacturing
ayurvedic formulations/preparations by using the extracts [*****].
C. The parties hereto have arrived at an agreement in respect of supply of
extracts of certain natural herbs/roots of specified quality and quantity
by Kancor to Bio-Ved to enable later to manufacture ayurvedic formulations/
preparations and are desirous of reducing the same in writing.
NOW THIS AGREEMENT WITNESSETH AND IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES
AS FOLLOWS:
1. Kancor supply to Bio-Ved and Bio-Ved shall purchase from Kancor
[*****]; with concentration/specifications and quality described in
the First Schedule hereunder written (hereinafter called "the Products")
in accordance with the terms, conditions and stipulations appearing
hereinafter.
2. a) Each such consignment shall be at the Kancor's risk whilst in transit
and the property in the goods/products shall pass to Bio-Ved only on
delivery thereof to Bio-Ved or its nominee/s. Kancor shall insure the
products/goods whilst in transit at its own risk and build the cost in
the selling cost of extracts to Bio-Ved.
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* Confidential provisions omitted and filed separately with the Commission.
b) Kancor shall not supply [*****] extracts of the agreed
specification thereof to any person, firm or a company other than
Bio-Ved during the period of this Agreement
c) Kancor shall supply the products to Bio-Ved as per the orders placed
by Bio-Ved at an ex-factory price, (exclusive of Excise, Central Sales
Tax, Octroi, Freight) set out in the Second Schedule hereunder
written. The joint efforts will be focused thereof to prevent delay in
supply by advance planning and shared projections on offtakes. During
the trial marketing such projection will be given to Kancor by Bio-Ved
after six months or latest by 1st July, 1998.
In order to avoid delays, Kancor will at any given time hold inventory
of finished products, to the tune of two months projections at their
own cost as given by Bio-Ved; which will be quality approved by
Bio-Ved and certificates and batch data will be available with Bio-Ved
to call for, on those products on the agreed schedule or earlier as
found necessary. In case, this inventory is not called off within the
two months agreed as above, Bio-Ved will be liable to reimburse the
inventory carrying cost at the rate of 18% per annum for the period
beyond two months.
3. Kancor shall supply the Products accompanying with Certificate of Analysis
thereof Bio-Ved or to any party as may be informed by Bio-Ved from time to
time within 60 days from receipt of the Orders thereof; the time being
essence of the contract. To meet the maximum permissible period, Kancor
shall be at liberty to make or arrange any alternative source at its own
expense and subject to quality assurance as required by Bio-Ved. Supply
shall be C.I.F. destination to be mentioned in the purchase order by
Bio-Ved. Each consignment delivered by Kancor shall be accompanied by a
Test Certificate by Chief Quality Controller of Kancor in accordance with
the specifications set out in the first schedule.
4. Bio-Ved shall in respect of supply of products used to manufacture
formulations in India, pay to Kancor, on a running account basis, at least
50% of the value of invoices raised each calendar month by the end of that
particular month. Provided, all invoices and deliveries will be accompanied
with the certificate of Quality Analysis issued by Kancor laboratories, and
Bio-Ved has received the approval of the lots from any one of its appointed
labs. The balance on all these invoices will be settled fully by the end of
that particular calendar quarter.
It is further agreed that Bio-Ved shall pay and settle all dues to Kancor
in respect of products/consignments used for export within 90 days of
export. Bio-Ved shall be liable to pay to Kancor and Kancor shall be
entitled to receive from Bio-Ved an interest at the rate of 18% per annum
on delayed payment of the purchase price beyond stipulated period.
5. Bio-Ved has already provided and furnished to Kancor its (Bio-Ved's)
technical
know-how and expertise for extraction and processing of [*****] Kancor
shall use Bio-Ved's such technical know-how and expertise in supplying
Ashwagandha extract to Bio-Ved. Kancor hereby agrees and covenants with
Bio-Ved not to make use of Bio-Ved's such technical know-how and expertise
for supplying Ashwagandha extract or any other similar products to any
other party for atleast 5 years from termination or determination of this
Agreement as the case may be. However, Kancor may supply [*****] to
patties other than Bio-Ved subject to the following conditions;
a) Kancor fully meets the [*****] requirements of Bio-Ved without
delaying/disturbing the delivery schedule of other raw materials also
to Bio-Ved.
b) Kancor takes prior written approval/permission from Bio-Ved after
fulfilling condition (a) above.
c) Kancor agrees to pay mutually agreed compensation and royalty to
Bio-Ved for the sales effected to the parties other than Bio-Ved.
6. Kancor hereby declares that it has infrastructure, licences/permissions
from the Government, quasi-government and/or local authorities under
various statutes, rules and regulations necessary for carrying out its
obligations hereunder and shall keep the same valid and subsisting during
the period this Agreement shall remain in force. Kancor shall not carry on
any of the activities/business which may obstruct its obligations hereunder
or which is in any manner detrimental to Bio-Ved's interest.
7. a) Bio-Ved shall appoint/designate a laboratory/ies (hereinafter called
"the Appointed Laboratory/ies") for checking and ascertaining quality
of the Products supplied hereunder. Bio-Ved shall be entitled to
appoint, from time to time, different laboratory/ies in respect of any
or all of the Products. Based on the Quality Analysis Report of the
Appointed Laboratory or otherwise, Bio-Ved shall have the sole
discretion of either accepting or rejecting the Products or any of
them wholly or in part if the quality and/or quantity of the products
do not match with the specifications stipulated by Bio-Ved and
Kancor's liability shall be limited to the precise specifications as
required Bio-Ved only. Bio-Ved's discretion/decision in this regard
shall be final and binding and shall not be disputed by Kancor.
Bio-Ved designates the following laboratories as the Appointed
Laboratories:
Beepharmo Laboratories, Mumbai.
Eisen Pharmaceutical Co. Ltd., Pune.
Poona College of Pharmacy, Bharati Vidyapeeth, Pune.
b) Kancor shall replace free of charge any of the products which is/are
not in accordance with the specifications or is/are damaged or lost in
transit within 10 days from the date of notice/intimation given by
Bio-Ved in that behalf.
c) Kancor shall comply with and complete all necessary Quality Assurance
at the production and ensure storage under conditions specification by
Bio-Ved (i.e. at temperature not exceeding 25 degrees centigrade in
sealed drums of the products).
8. During the course of implementation hereof, Kancor shall:
a) preserve (at cool temperature) at least 500 gms. of original part of
the plant (Control Sample) used for manufacturing every batch of plant
extracts supplied to Bio-Ved for a period of 3 years from the date of
manufacturing,
b) allow Bio-Ved's technical person to quality systems audit, verify
documents related to manufacturing of each/all extract batches
supplied to Bio-Ved. Kancor will try to upgrade its systems/operations
wherever necessary or when Bio-Ved calls upon Kancor to do so;
c) manufacture all batches of plant extracts with GMP with all required
precautions for maintenance of hygiene and hygienic conditions
throughout the manufacturing and packing process of plant extracts.
9. Kancor shall not divulge, disclose or communicate to any person(s) other
than those to whom it is necessary for the purpose hereof; the technical
know-how, expertise, data, specifications, drawings and/or other secret
information provided by Bio-Ved. Kancor shall take all reasonable care and
efforts to ensure that secrecy of such technical
know-how, expertise data, drawings etc., will be maintained during the term
of this Agreement and after its termination or determination also. This
clause shall be binding upon Kancor even after determination or earlier
termination of this Agreement.
10. a) Bio-Ved shall furnish semi-annual volume projections after every six
months to enable Kancor to make suitable arrangements for manufacture
and supply to Bio-Ved. The details of the supply of the minimum
quantity of the four products mentioned in "Schedule 1" will be
specified in the addendum to this agreement by 1st July, 1998.
b) Bio-Ved may increase the above quantities as per its requirements from
time to time. The parties hereto shall be entitled to revise and
mutually agree upon the price at which Kancor shall supply the
products at the end of first six months from the date of execution
hereof. Thereafter the prices will be reviewed and revised annually
only. However, if the projections exceed by 30%, then the prices will
be reviewed and revised, if necessary. The price once fixed by and
between the parties for the products shall hold good for a period of
minimum one year. Kancor shall not divulge any of the agreed prices at
any time to any third party without prior consent from Bio-Ved.
11. Kancor will accept responsibility only to the extent of supply of extracts
to the analytical specifications as given by Bio-Ved. Kancor makes no claim
on the functionality of the extracts.
12. Neither party to this Agreement shall be responsible for non-fulfillment,
part-fulfillment, or
delay in fulfillment of its obligations under the Agreement, directly or
indirectly caused by reason of Act of God, Public enemies, fire, explosion,
flood, earthquake, drought, strike, lockout, labour dispute orders or
restrictions imposed by Government or any other public authority, war,
hostilities, rioting, civil commotion, looting, any circumstances
preventing, restricting, delaying or interfering with transportation,
breakdown or accident and any other cause or circumstances beyond the
control of the parties hereto.
13. a) This Agreement is executed in two originals of the same contents and
validity, one to be retained by each of the parties hereto.
b) This agreement shall be valid and be subsisting for a period of five
years and shall be renewed for further period as may be mutually
agreed.
14. Either of the parties hereto shall be entitled to terminate this Agreement
in the event of breach of material terms hereof. Neither party hereto shall
be considered in default hereunder if its failure to perform or observe any
or all of the terms, conditions or stipulations herein contained shall be
caused by circumstances not within the control of such party. Provided
always that, if either party aforesaid shall commit any breach of, or shall
make any default in the performance or observance of, any of the terms,
conditions or stipulations aforesaid, the other may give notice to it in
writing specifying in detail such breach or default and no responsibility
or liability shall accrue for any such breach or default aforesaid unless
it shall remain uncured for more than three months after the giving of such
notice; Provided that the defaulting party shall be deemed to have cured or
remedied any such breach or default aforesaid if and when it shall, bona
fide, have commenced appropriate action to cure or remedy the same provided
that such action shall be prosecuted thereafter by such defaulting party
with all due diligence.
15. The termination of this Agreement shall be without prejudice to any claim
or right of action previously accrued to either party against the other.
16. This Agreement is valid for the period of Five years from the date of
execution hereof. Unless expressly terminated earlier or in the absence of
any contrary intention communicated in this regard, the Agreement shall
deem to have been renewed for a further period of five years thereafter,
without any further act on the part of any of the parties hereto.
17. The parties designate the following persons and addresses for serving any
notice/communications hereunder:
Mr. Mr. Sanjay Mariwala Mr. Ajit P. Chitre
Kancor Flavours and Extracts Bio-Ved Pharmaceuticals
Pvt. Ltd. Pvt. Ltd.
Angamally, 6, Pradeep Chambers,
Cochin, Bhandarkar Institute Road,
Kerala - 683 573 India Pune - 411 005 India
Fax No.: 0484-452662 Fax No: 0212-357944
Such notice/communication shall come into effect immediately on receipt
thereof by the addressee.
l8. In the event of any dispute or differences of opinion arising out of or in
relation to this Agreement, the same shall be resolved the Arbitration held
at Mumbai in accordance with the Arbitration and Reconciliation Act, 1996.
19. If any of the parties hereto is constrained to have recourse to the Court
of Law for enforcing their rights hereunder, the court of Law within
territorial jurisdiction of Mumbai shall have exclusive jurisdiction in
this regard.
IN WITNESS WHEREOF the parties hereto have set and subscribed their respective
hands and seals on the day and year hereinabove written.
SIGNED & DELIVERED BY SIGNED & DELIVERED BY
For Bio-Ved Pharmaceuticals For Kancor Flavours & Extracts
Pvt. Ltd. Pvt. Ltd.
s/Ajit P. Chitre s/Sanjay Mariwala
Mr. Ajit P. Chitre Mr. Sanjay Mariwala
Director (Operations) Managing Director
In the presence of In the presence of
s/S.V. Kanataki s/V. Muraleedharan
Mr. S.V. Karnataki Mr. V. Muraleedharan
INSERT PAGE HERE
SECOND SCHEDULE
PRICE OF PLANT EXTRACTS TO BE SUPPLIED BY KANCOR FLAVOURS AND EXTRACTS LTD;
KERALA TO BIO-VED PHARMACEUTICALS PVT. LTD.; PUNE
KANCOR shall supply the plant extracts to BIO-VED at the following prices which
are exclusive of excise duty, central sales tax, and octroi.
I.
Sr. No. Plant Extracts Price Rs./Kg.
1 [******] [******]
[******]
2 [******] [******]
[******]
3 [******] [******]
[******]
4 [******] [******]
[******]
Cost of Insurance and Freight will be added to the above price.
*Confidential portions ommitted and filed separately with the Commission.
BIO-VED PHARMACEUTICALS PVT. LTD.
SPECIFICATIONS OF PLANT EXTRACTS TO BE PROCURED FROM
M/s. KANCOR FLAVOURS AND EXTRACTS PVT. LTD., COCHIN, KERALA.
(TO BE REVIEWED AFTER SUPPLY OF 10 BATCHES OF EACH.)
LOD (AT
90 DEG. C
UNDER 15
MM. HG. PH OF 5% %
SR. FOR AQ. TLC VOLATILE MICROBIAL
NO. DESCRIPTION 4 HRS.) SUSPENSION WT./ML (GM) PATTERN OIL QUALITY ASSAY OF ACTIVES
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1 [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****]
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2 [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****]
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3 [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****]
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4 [*****] [*****] [*****] [*****] [*****] [*****] [*****] [*****]
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* Confidential provisions omitted and filed separately with the Commission.
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