- Exclusive agreement for sale of Lodonal in Kenya worth minimum of $31m in revenues in first 3 years. - Exponential growth in guaranteed minimums shows that Omaera Pharmaceuticals is very confident that Lodonal sales will increase rapidly. - First purchase order is contractually guaranteed by November 22nd, 2017. - If sales don't meet the guaranteed minimums, Omaera is still required to purchase at least the minimums.
Item 1.01 Entry into a Material Definitive Agreement.
On August 22, 2017, Immune Therapeutics, Inc. (the “Company”) entered into a Distribution Agreement (the “Agreement”) with TNI BioTech International Ltd. (“TNI”) and Omaera Pharmaceuticals Ltd. (“Omaera”). Pursuant to the Agreement, Omaera will be the sole distributor of the Company’s Products, as listed in Section 2 of the Agreement, for sale in Kenya. The Company’s Products to be distributed by Omaera shall be manufactured by Acromax Dominicana, SA. The term of the Agreement began on August 22, 2017 and shall continue for a period of three (3) years, unless earlier terminated.
The Company will have up to 14 calendar days from receipt of a purchase order from Omaera to deliver the requested Products to Omaera. The Company shall send an invoice to Omaera for each shipment of its Products. During the first 12 months of the Agreement, Omaera will pay the full amount of each invoice in cash, without any deductions, by means of bank transfer on or before the date of shipment. After the first 12 months of the Agreement, the Company will provide 30 days credit terms from the date of invoice for payment. The Company shall have the right to vary the credit made available to Omaera, and to restrict supplies, if Omaera fails to make payments in accordance the Agreement.
Pursuant to the Agreement, Omera is required to purchase a minimum number of pills from the Company for specified periods over the term of the Agreement (the “Minimum Purchase Commitment”). The minimum number of pills required to be purchased by Omaera for each period are as follows:
First Half of First Year 1,080,000 Pills Second Half of First Year 3,600,000 Pills Second Year 14,400,000 Pills Third Year 28,800,000 Pills
If the number of Products purchased by Omaera from the Company does not, in the three-year term beginning on August 22, 2017, or in any of the above-captioned periods, meet the Minimum Purchase Commitment, Omaera shall, at its option, either (a) buy the quantity of Product required to meet that period’s Minimum Purchase Commitment, or (b) pay to the Company the net profit that patent laboratories would have obtained from the sale of that Minimum Purchase Commitment of Product, at the rate specified in Schedule 1 of the Agreement, or a higher rate if to the extent that the Company may have increased the price per pill.
Omaera shall purchase the Products only from the Company and use its best endeavors to actively distribute and sell the Products in Kenya. To this end, Omaera will recruit a sales and promotion team responsible for meeting the agreed business plan and utilize its marketing personnel to promote selling, distributing and all marketing process of the Company’s Products throughout Kenya. At all times, Omaera will liaise with the Company, where requested by the Company, to meet requests for information on the Products by hospitals and pharmacies and at all times Omaera shall monitor the market for the Products in Kenya. No later than three months from the date of the Agreement, Omera shall purchase and hold a minimum of three months stock of the Products on a firm purchase basis throughout the term of the Agreement to meet anticipated market demand. Omaera shall keep full and proper books of account and records showing clearly all enquiries, quotations, transactions, and proceedings relating to Products including details of sales of each type of Product, service stock, outstanding customer orders and orders placed by Omaera with the Company still outstanding and any other information relating to the performance of its obligations under the Agreement which the Company may reasonably require from time to time
Upon termination of the Agreement for any reason, Omaera will immediately and at no charge assign or transfer the benefit of the Product Registrations or Registration applications and all associated rights and any other permits, licenses, registrations or applications obtained in respect of the Agreement or the Products to the Company where legally possible, or to another party as the Company in its sole discretion may direct and the parties shall cooperate in every way to achieve such assignment or transfer including without limitation providing all documents related with the Product registrations within three (3) months of the request.
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