EXHIBIT 10.3
MANAGEMENT AGREEMENT
This Management Agreement (this "Agreement") is made as of this 16th
day of April, 2002, by and between NeoTherapeutics, Inc. ("NEOT"), a Delaware
corporation, and NeoJB LLC, a Delaware limited liability company ("NeoJB"), and
is entered into with reference to the following facts:
A. J.B. Chemicals & Pharmaceuticals, Ltd., an Indian company
("JBCPL") holds rights to patented and/or proprietary pharmaceuticals that it
desires to market in the United States.
B. NEOT is an established Delaware corporation, maintaining
facilities in Irvine, California. NEOT is familiar with the process of obtaining
approval to market pharmaceuticals from the U.S. Food and Drug Administration
(hereinafter the "FDA").
C. NeoJB has been formed by NEOT and JBCPL for the purpose of
obtaining FDA approval of one or more Products; and, following such approval, to
introduce and market the Products in the United States.
D. As partial consideration for its membership interest in NeoJB,
NEOT has agreed to provide office space, equipment, initial personnel and
financing (collectively, the "Services") to NeoJB on and subject to the terms of
this Agreement, such services to be provided solely at ▇▇▇▇'▇ expense pursuant
to Section 3.7.1 of the Limited Liability Company Agreement of NeoJB (the "LLC
Agreement").
NOW THEREFORE, in consideration of the promises and mutual agreements
contained herein, the parties hereto agree as follows:
1. TERM
(a) NEOT shall provide the Services described herein to
NeoJB from and after the effective date of the first Supply Agreement (as
defined in the LLC Agreement) until the earliest time at which all Products then
subject to a Supply Agreement have been approved by the United States Food and
Drug Administration to be marketed and sold in the United States, unless the
Board of Managers of NeoJB elects to earlier terminate this Agreement.
(b) ▇▇▇▇'▇ commitment to provide the Services described
herein may be extended by mutual agreement of NEOT and NeoJB on such terms as
the parties may agree.
2. OFFICE SPACE AND OFFICE EQUIPMENT
(a) NEOT will provide NeoJB with furnished office space
and office equipment as determined by NeoJB's Board of Managers from time to
time to be reasonably
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necessary for NeoJB's operations. NeoJB's offices will initially be co-located
with ▇▇▇▇'▇ existing operations located in Irvine, California. NeoJB will have
access to ▇▇▇▇'▇ existing offices, office furniture and office equipment on a
shared basis. NeoJB's access to ▇▇▇▇'▇ offices, telephones, computer network,
files, records and data bases will be subject to the rules and regulations that
apply to ▇▇▇▇'▇ employees and such additional restrictions required by NEOT to
maintain the confidentiality of ▇▇▇▇'▇ independent businesses.
(b) If NEOT moves its operations while NeoJB is still
co-located with NEOT, NEOT will notify NeoJB on a timely basis that NEOT will
either continue to accommodate NeoJB's operations at ▇▇▇▇'▇ new site or of the
requirement for NeoJB to locate and lease a suitable, separate facility for
NeoJB. NEOT will arrange for the relocation of NeoJB's offices, if NeoJB will
continue to be co-located with NEOT at ▇▇▇▇'▇ new site. If, because of the move,
NEOT will no longer accommodate NeoJB at ▇▇▇▇'▇ new site, NEOT will assist
NeoJB, as needed, in making arrangements to identify, lease and relocate NeoJB
to a separate facility, and, if requested in writing by NeoJB, NEOT shall be
obligated to pay to NeoJB an amount equal to NeoJB's lease costs related to such
separate facility as provided in Section 4 below.
(c) The Parties anticipate that either NEOT or NeoJB will
at some point decide to terminate NeoJB's co-location with NEOT, because of the
internal growth of either or both of NEOT and NeoJB, or for other business
reasons. At that point, NEOT or NeoJB, depending on which company desires to end
the co-location, will timely notify the other so that the companies can plan for
an orderly transition. NEOT will assist NeoJB as needed in making arrangements
to identify, lease and relocate NeoJB to a separate facility, and, if requested
in writing by NeoJB, NEOT shall be obligated to pay to NeoJB an amount equal to
NeoJB's lease costs related to such separate facility as provided in Section 4
below.
3. PERSONNEL
(a) NEOT will provide NeoJB with management and staff
personnel as determined by NeoJB's Board of Managers from time to time to be
reasonably necessary for NeoJB's operations. NEOT will provide the personnel on
a full and part-time basis depending on the respective needs of NeoJB and NEOT.
The NEOT personnel assigned to NeoJB on a full or part time basis will continue
to be employees of NEOT subject to the applicable NEOT rules, policies and
procedures including ▇▇▇▇'▇ terms of employment, compensation and benefit plans.
(b) The Parties anticipate that the Board of Managers of
NeoJB, because of NeoJB's internal growth or for other business reasons, will at
some point decide to hire its own employees to staff NeoJB. At that point, NeoJB
will timely notify NEOT so that both of the
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companies can plan for an orderly transition. NEOT, if requested in writing by
NeoJB, will assist in locating and recruiting future NeoJB employees.
4. EFFECT OF ASSIGNMENT
It is agreed that no part of this Agreement shall be assigned except
upon prior written consent of both Parties, as well as the express agreement of
the assignee to be bound by each and every term of this Agreement. Furthermore,
no assignment shall be considered a release of the obligations of the original
Parties to this Agreement to perform each and every covenant herein contained.
5. SEVERABILITY
If any provision under this Agreement is, at any time, deemed
unenforceable under applicable law, that portion shall be severed from this
Agreement, and all remaining provisions shall continue in full force and effect.
6. INTEGRATION
This Agreement constitutes the entire agreement and understanding of
the parties with respect to confidentiality, and replaces the prior secrecy
agreements between the Parties and/or their affiliates. Each Party hereby
warrants, acknowledges, and agrees that no additional representations, promises,
or agreements have been made by either Party concerning the matters herein
contained.
7. APPLICABLE LAW; VARIANCES
It is expressly agreed that this Agreement shall be governed and
interpreted in accordance with the laws of the State of California, U.S.A. This
Agreement may not be amended except by written agreement duly executed by all
parties hereto. In addition, either party may waive compliance with any
provision of this Agreement by the other party in writing, provided that any
such waiver shall not be deemed to be a waiver of future compliance except to
the extent specified in the waiver.
8. NOTICES
All notices or communications required or permitted under this
Agreement shall be given in writing and delivered personally or sent by telefax
transmission, by United States registered or certified mail with postage prepaid
and return receipt requested or by nationally recognized overnight delivery
service. In each case, notice shall be delivered or sent to:
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If to NEOT, addressed to:
NeoTherapeutics, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Secretary
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
If to NeoJB, addressed to:
NeoJB LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Secretary
Telefax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as either party may provide to the other in accordance
with this Section 11.
9. COUNTERPARTS
This Agreement may be executed in any number of multiple counterparts,
each of which shall be deemed to be an original copy and all of which shall
constitute one agreement, binding on all parties hereto. Delivery of an executed
copy of a signature page to this Agreement by facsimile transmission shall be
effective as delivery of a manually executed copy of this Agreement and shall be
effective and enforceable as the original.
10. ATTORNEY FEES
In case any proceeding, whether at law, in equity or in arbitration,
shall be brought by any party to enforce the terms of this Agreement or with
respect to any breach hereof, the prevailing party in each such proceeding, as
determined by the court or arbitrator, shall be
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entitled to the payment of reasonable attorneys' fees and costs from the
non-prevailing party or parties (as determined by the court or arbitrator).
11. TITLES
Section titles are for descriptive purposes only and shall not control
or alter the meaning of this Agreement as set forth in the text.
12. SUCCESSORS
This Agreement shall bind and inure to the benefit of each respective
successors and assigns.
13. ARBITRATION
Any disputes which arise involving any of the parties to this
Agreement, shall be subject to final, binding arbitration upon written request
by any Member involved in the dispute in accordance with this Section 13. The
dispute shall be submitted before JAMS/Endispute ("JAMS") within thirty (30)
days after the requesting notice in accordance with the then existing JAMS
Arbitration Rules as modified by this Section 13; a decision shall be issued
within thirty (30) days after the close of the record; and judgment upon the
award may be entered in any court having jurisdiction over the judgment. Within
thirty (30) days after selection of the arbitrator as provided herein, each
party to the dispute shall submit to each other and the arbitrator their
respective proposals for resolution of the dispute, and the arbitration shall be
limited to the sole question of determining which written proposal is to be
accepted. The arbitrator shall have no authority to compromise between the
proposals. If a party to a dispute fails to appear at any properly noticed
arbitration proceeding, an award may be entered against such party
notwithstanding such failure to appear. If the parties disagree on the
arbitrator, the parties shall jointly request JAMS to furnish a list of five (5)
available arbitrators. After receipt of such list and an opportunity to consider
the names, each party may designate in writing to JAMS not more than two (2)
names to be eliminated from the selection process. If more than one (1) name
remains after such eliminations are made, the selection of the arbitrator shall
be made by lot from the remaining names. If either party makes demand upon the
other for arbitration, the arbitration shall be conducted in Orange County,
California at the location designated by the arbitrator. The parties may
mutually agree to another location. Subject to Section 10, the expenses, wages
and other compensation of any witnesses called before the arbitrator shall be
borne by the party calling the witnesses. Subject to Section 10, other expenses
incurred, including wages of participants and experts shall be borne separately
by the respective parties.
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IN WITNESS WHEREOF, the Parties hereto have executed this Management
Agreement as of the date first set forth hereinabove.
NEOTHERAPEUTICS, INC. NEOJB LLC
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------- ----------------------------------
NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, PHD. NAME: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D.
TITLE: CHIEF EXECUTIVE OFFICER TITLE: PRESIDENT
