Legal Issues - Gentura

CadMex Pharmaceutical Memorandum

To: Mr. Jack Brandt, CEO; Kera Sawyer, International Legal Counsel

From: Dan, Vice President of International Business Development

Date: March 9, 20XX

Subject: Current Gentura Status

I would like to take this opportunity to bring everyone up to date on the status of our relationship with Gentura. We have been working in partnership with Gentura a biotechnology company based in Candore since 2007. Candore, a small developing island country in South East Asia, has been under the dictatorship of President Gwendoz since 2004. President Gwendoz, encourages foreign investments into Camdore however, these investments come with some risk. All Camdore international business transactions are subject to the approval of the Candorean government. The good news is that are relationship with Gentura and the Candorean government has been favorable until recently, and our partnership with Gentura continues to venture into new opportunities.

History of Partnership

When entering into our contractual relationship with Gentura, CadMex choose the choice-of-law-clause of Candorean Regulations for Technology Import Contract (CRTIC), over the option of Contracts for the International Sales of Goods (CISG). It was determined early into the process that CISG was not a valid option since the country of Candore was not a signatory of CISG. Therefore, CRTIC was the chosen as the choice-of-law-clause, although CadMex legal counsel had many concerns about the red-tape Candorean authorities could insist upon. The forum selection clause chose Nonbinding International Arbitration, as the forum to dispute any contractual issues with Gentura. The nonbinding International Arbitration was chosen even after Candore gained WTO membership, because the Candore and US Courts has varying previsions about international contracts.

During March of 2012, the relationship between CadMex and Gentura became fragile. President Gwendoz was overthrown in a coup by a nationalist organization, promising democracy, and Candore in the midst of a rare viral epidemic.

Epidemic vs. legal Issues

Health authorities estimate that 1% of Candor’s population would be infected by the viral outbreak in March of 2012. Gentura was under pressure by the new government to subsidize the price of ViroBlax. The subsidization of ViroBlax would be a breech of contract with CadMex. Furthermore, Gentura is the only licensed manufacture of ViroBlax in Candore. Acting as the Vice President in charge of International Business Development, I directed our legal counsel to take no legal action, but claim compensation from Gentura. I based my decision from the fact that legal actions against Gentura would weaken the partnership between CadMex and Gentura, and could take a great deal of time to arbitrate with nonbinding results. The alternative of asking Gentura for shared marketing rights for another drug was considered, however through conversations with Gentura’s CEO Vail Saman, and our legal counsel of Kera Sawyer I decided that this option was not in our best interest to peruse.

Unfortunately, in April of 2012, the Candore health authority increased the percentage of people infected with the viral outbreak from 1% to 3%. Gentura is unable to meet the demand for ViroBlax due to the increased percentage of people infected with the unidentified viral outbreak. The Candorean government has suspended the CadMex’s patent on ViroBlax, due to the national health emergency. In addition, the Candorean