EXHIBIT 10.8
EXCLUSIVE LICENSE AGREEMENT
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This Agreement ("Agreement") is effective as of September 15th, 2004
between CepTor Corporation., a Delaware corporation, having its principal place
of business at 000 Xxxxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxx Xxxxxx, Xxxxxxxx
00000-0000 ("CEPTOR") and JCR Pharmaceuticals Co., Ltd., a Japanese corporation,
having its principal place of business at 0-00 Xxxxxx-xxx, Xxxxxx, Xxxxx
659-0021 ("JCR").
RECITALS
Whereas, CEPTOR has conceived and reduced to practice certain
technologies relating to site directed delivery systems, in combination with
therapeutic molecules; and
Whereas, JCR has an interest in the exclusive development of such
technologies for the use of MYODURtm brand PRODUCT (as hereinafter defined) in
the treatment of muscular dystrophy; and
Whereas, CEPTOR is the owner of certain PATENTS (as hereinafter
defined), and has accumulated proprietary know-how and trade secrets pertaining
to MYODURtm brand PRODUCT and its site directed delivery systems and protease
inhibitors; and
Whereas, CEPTOR is interested in licensing said PATENTS, proprietary
know-how and trade secrets for the development, manufacture, use, sale and
distribution of MYODURtm brand PRODUCT for the treatment of muscular dystrophy
in the TERRITORY (as hereinafter defined) to JCR; and
Whereas, JCR is interested in becoming the exclusive licensee and
desires to develop, manufacture, have made, use, sell, offer to sell, have sold,
distribute, have distributed MYODURtm brand PRODUCT for use in muscular
dystrophy throughout the TERRITORY and to be able to sublicense rights in the
foregoing;
NOW THEREFORE, in consideration of the premises, covenants and
conditions herein contained, the parties do hereby agree as follows:
1. Definitions
1.1 The term "AFFILIATE" shall mean:
(i) Any corporation owning or controlling, directly
or indirectly, at least fifty-one percent (51%)
of the stock normally entitled to vote for
election of directors of CEPTOR or JCR, or
(ii) any corporation at least fifty-one percent
(51%) of whose stock normally entitled to vote
for election of directors is owned or
controlled, directly or indirectly, by CEPTOR
or JCR, or
(iii) any other business entity with at least
fifty-one percent (51%) of the equity interest
of which is owned or controlled, directly or
indirectly, by CEPTOR or JCR, or
(iv) any other business entity as to which CEPTOR or
JCR has the possession, directly or indirectly,
of the power to direct or cause the direction
of the management and policies of such business
entity whether through the ownership of equity
securities, by contract, or otherwise, or
(v) any other business entity which has the
possession, directly or indirectly, of the
power to direct or cause the direction of the
management and policies of CEPTOR or JCR
whether through the ownership of equity
securities, by contract, or otherwise.
1.2 "CEPTOR IMPROVEMENTS" shall mean any CEPTOR TECHNOLOGY, related
information included but not limited to proprietary know-how, trade secrets of
disclosures or claims in patent applications filed by CEPTOR, its AFFILIATES,
permitted assigns or SUCCESSOR(S) related to the PRODUCT and/or its use in the
FIELD, or any CEPTOR TECHNOLOGY related information included but not limited to
proprietary know-how, trade secrets or unexpired, valid, enforceable patents
related to the PRODUCT and/or its use in the FIELD licensed on a "no-charge"
basis with the right to sublicense, by CEPTOR, its AFFILIATES, permitted assigns
or SUCCESSOR(S), developed, disclosed or licensed after the EFFECTIVE DATE and
during the term of this Agreement.
1.3 "CEPTOR TECHNOLOGY" shall mean any technology related to the
creation, development, manufacture or use of carnitine and/or taurine in
combination with any therapeutic small molecule (and any analogues, conjugates,
or derivatives thereof) and any related information.
1.4 "COMMON STOCK OF CEPTOR" shall mean the common stock of CepTor
Corporation, a Delaware corporation, par value $0.00001 per share.
1.5 "COGS" shall mean the cost of goods sold, whether purchased
through CEPTOR or manufactured by JCR.
1.6 "EFFECTIVE DATE" shall mean the date first written above.
1.7 "ESCROW" shall mean that account established at a bank or other
financial institution for the receipt of investor funds pending closing under
the PRIVATE PLACEMENT.
1.8 "FAIR MARKET VALUE" on any day means (i) if shares of the Common
Stock are listed or admitted for trading on a national securities exchange, the
reported weighted average sales price or, if no such reported sale occurs on
such day, the average of the closing bid and asked prices on such day, in each
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case on the principal national securities exchange on which the Common Shares
are listed or admitted to trading during the twenty (20) trading days
immediately preceding determination, (ii) if shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the average
of the closing bid and asked prices in the over-the-counter market on for such
twenty (20) day period as reported by NASDAQ or any comparable system or, if not
so reported, as reported by any New York Stock Exchange member firm selected by
the Company for such purpose or (iii) if no such quotations are available on
such day, the fair market value of one share of Common Stock on such day as
determined in good faith by the Board and subject to JCR's agreement.
1.9 "FIELD" shall mean Muscular Dystrophy including but not limited
to Duchenne's Muscular Dystrophy (DMD) and Xxxxxx'x Muscular Dystrophy (BMD).
1.10 "FIRST COMMERCIAL SALE" shall mean the first commercial sale of
the PRODUCT by JCR or its AFFILIATES or sub-licensees after approval by the
regulatory authorities in the country or territory of first commercial sale.
1.11 "MINIMUM OFFERING" shall mean $2.5 million as is the stated
Minimum Offering in the current Private Placement Memorandum for the offer and
sale of CEPTOR securities.
1.12 "NET SALES" shall mean the gross revenues received by JCR, its
AFFILIATES or sub-licensees, for any quantity of PRODUCT subject to royalty
under this Agreement that is sold by JCR or its AFFILIATES or sub-licensees,
LESS (a) discounts and allowances actually given to customers and commissions
paid to distributors and other sales agencies not employees of JCR or its
AFFILIATES or sub-licensees, that are included in its gross selling price; (b)
amounts repaid or credited and allowances including cash, credit or free goods
allowances and amounts given by reason or charge backs, retroactive price
reductions or billing errors and rebates (including government mandated rebates)
actually allowed or paid; (c) amounts refunded or credited for PRODUCT which,
due to CEPTOR, was rejected, spoiled, damaged or outdated; (d) returned; (e)
sales, use or excise taxes and duties and freight and insurance, to the extent
included in the gross selling price charged; and (f) COGS. Except as set forth
above, no deduction from the gross sales shall be made for any item of cost
incurred by the seller in its own operation incident to the research and
development, manufacture, sale or shipment of the PRODUCT sold. PRODUCT shall be
considered sold when billed out or invoiced.
1.13 "XXX XXXXX" shall mean a price of a prescription drug set by
the Japanese government under the National Health Insurance scheme.
1.14 "PATENTS" shall mean any US or foreign issued patent(s) owned
during the term of this Agreement by CEPTOR, its AFFILIATES, permitted assigns
or SUCCESSOR(S) containing one or more claims to CEPTOR TECHNOLOGY, any
continuation-in-part, division or continuation application thereof, any patent
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or the equivalent thereof granted thereon, any reissue, reexamination or
extension of any of these patent(s), and any Supplementary Protection
Certificates of any of these patents subsequently granted in respect of the
PRODUCT. PATENTS are listed in APPENDIX A.
1.15 "PRIVATE PLACEMENT" shall mean the offering for sale by CEPTOR
and recapitalization of CEPTOR in connection with its exchange of shares of
COMMON STOCK OF CEPTOR for shares of a company that maintains a class of common
stock that is registered under the securities laws and for which trading is
permitted.
1.16 "PRODUCT" shall mean the combination of carnitine and leupeptin
(and any analogues, conjugates or derivatives thereof) designated by CEPTOR as
the MYODUR brand.
1.17 "SUCCESSOR(S)" shall mean any successor of JCR's or CEPTOR's
entire business or substantially all of JCR's and CEPTOR's respective assets in
the line of business related to this Agreement.
1.18 "TECHNICAL INFORMATION" shall mean all information included but
not limited to any unpatented proprietary know-how, trade secrets and patent
applications relating to CEPTOR TECHNOLOGY existing prior to the EFFECTIVE DATE
and developed during the term of this Agreement related to the PRODUCT and/or
its use in the FIELD and CEPTOR IMPROVEMENTS.
1.19 "TERRITORY" shall mean Japan, South Korea, China, Taiwan, and
Singapore, and each a "country" within the TERRITORY.
1.20 "TRADEMARK" shall mean the MYODUR brand as used on and in
relation to the PRODUCT.
2. PATENTS
2.1 COSTS. All future patent costs pertaining to PATENTS including
preparation, filing and prosecution of patent applications covered under the
definition of CEPTOR IMPROVEMENTS and issuance, taxation and maintenance costs
of PATENT(s) shall be borne by CEPTOR or its AFFILIATES, permitted assigns or
SUCCESSOR(S).
2.2 CONTROL. All control over CEPTOR PATENTS will be by CEPTOR, and
all CEPTOR patent rights will be filed and prosecuted by attorneys designated by
CEPTOR. In the event that CEPTOR fails to or chooses to not file PATENTS in the
TERRITORY, JCR may make such filings and be issued such PATENTS, subject to a
worldwide royalty-free license to CEPTOR. Costs of such filings would be borne
by JCR.
2.3 PATENT APPLICATIONS. Any patent application or provisional
application covered under TECHNICAL INFORMATION that results in an issued patent
shall thereafter be included under the definition of PATENTS and shall be
included in APPENDIX A.
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3. License Grant to JCR
3.1 EXCLUSIVE LICENSE GRANT. CEPTOR hereby grants to JCR an
exclusive license in the TERRITORY under PATENTS, TECHNICAL INFORMATION and the
TRADEMARK to develop, have developed, use, have used, make, have made, sell,
have sold, distribute and have distributed the PRODUCT in the FIELD, with the
right to grant sublicenses. JCR shall have the right but not the obligation to
use the TRADEMARK in connection with the sale and distribution of the PRODUCT in
any country in the TERRITORY and any use by JCR of the TRADEMARK will enure to
the benefit of CEPTOR. JCR shall have the right but not the obligation to sell
and distribute in any or all of the countries in the TERRITORY at JCR's sole and
absolute option, provided, however, that after First Commercial Sale in any of
the countries of the TERRITORY, JCR shall use its best efforts to obtain all
required regulatory approvals and commence sales in each of the other countries
of the TERRITORY.
3.2 Transfer of TECHNICAL INFORMATION CEPTOR shall provide transfer
of TECHNICAL INFORMATION including technical assistance upon reasonable request
of JCR without charge to JCR other than reasonable travel expenses, including
air travel, hotels, meals, etc. CEPTOR shall provide JCR with periodic updates
of TECHNICAL INFORMATION.
3.3 In the event that CEPTOR fails to obtain FDA approval, or fails
to complete generation of the clinical data necessary for the filing for FDA
approval, or fails to file for FDA approval for whatever reason, the following
provision shall be deemed to be deleted from paragraph 3.1. "provided, however,
that after First Commercial Sale in any of the countries of the TERRITORY, JCR
shall use its best efforts to obtain all required regulatory approvals and
commence sales in each of the other countries of the TERRITORY." Furthermore, if
CEPTOR's failure to obtain FDA approval is primarily due to FDA's rejection of
MYODUR, JCR shall have the option but not the obligation to seek or obtain
approval in any country in the TERRITORY.
4. License Payments by JCR
4.1 EQUITY INVESTMENT IN CEPTOR. JCR shall on the later of the
EFFECTIVE DATE, or the date on which CEPTOR notifies JCR that the MINIMUM
OFFERING has been paid into ESCROW, purchase $1,000,000.00USD of the COMMON
STOCK OF CEPTOR. The JCR purchase of COMMON STOCK OF CEPTOR shall be made by
purchase of 256,000 shares of COMMON STOCK OF CEPTOR at $3.90625 per share,
which shares of COMMON STOCK OF CEPTOR shall be exchangeable by JCR without
further consideration into two million (2,000,000) of the recapitalized shares
of CEPTOR's common stock ("NEW SHARES") with a value of $0.50 per share upon the
closing of the PRIVATE PLACEMENT. Following completion of the recapitalization
contemplated in the PRIVATE PLACEMENT, CEPTOR shall exchange each of the shares
of COMMON STOCK OF CEPTOR owned by JCR for 7.8125 NEW SHARES being the same
ratio as other existing CEPTOR shares are being exchanged for NEW SHARES. CEPTOR
shall be required to cause all NEW SHARES issued to JCR to be registered under
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the Securities Acts at such time following closing of the PRIVATE PLACEMENT as
CEPTOR shall be required to register NEW SHARES acquired by purchasers in the
PRIVATE PLACEMENT.
LICENSE FEE. JCR shall pay CEPTOR $500,000 upon the approval of any IND
received by CEPTOR from the FDA to initiate phase I/II clinical studies for
PRODUCT for Muscular Dystrophy in the United States. Furthermore, upon Ceptor's
receipt of such IND approval from the FDA, JCR shall purchase $1,000,000USD of
NEW SHARES at FAIR MARKET VALUE.
4.2 ROYALTIES
JCR shall pay to CEPTOR royalties for sales of PRODUCT in the
TERRITORY based on the following as determined on an annual basis:
A royalty of twenty five (25%) percent of annual NET SALES shall be
paid, provided such royalty shall be subject to reduction so that COGS plus
royalties shall not exceed thirty-five (35%) percent of XXX XXXXX for PRODUCT;
and
A royalty for other countries in the TERRITORY shall be negotiated
in consideration of the applicable price for PRODUCT recognized by the health
agency of that country.
Upon receipt of the report from JCR as stipulated in Section 5.1,
CEPTOR shall issue an invoice to JCR for the corresponding amount of royalties
payable within thirty (30) days from the date of such invoice, provided,
however, failure to issue such invoice to JCR shall not affect JCR's obligation
to make payment within such thirty (30) day period.
In the event that CEPTOR ceases to pursue US FDA approval or is
rejected for MYODUR, then the ROYALTY payment provided for herein shall be
reduced to five (5%) percent on all NET SALES by JCR or AFFILIATES.
4.3 PATENT EXPIRATION REDUCTION. In the event no patents have been
issued in the jurisdiction or upon expiration of the last to expire of the
PATENTS issued in any jurisdiction within the TERRITORY applicable to PRODUCT
the royalties paid for sales in such jurisdiction shall be reduced to an amount
to be determined based upon good faith negotiations of the parties.
4.4 CURRENCY CONVERSION. Royalties due on sales made in currency
other than United States dollars shall first be calculated in the foreign
currency and then converted to United States dollars on the basis of the
arithmetic average of the applicable closing selling rate publicly quoted by a
prime bank in the TERRITORY for the currency in question for each of the last
ten (10) business days of the period for which royalties are due.
4.5 CURRENCY RESTRICTIONS. If restrictions on the transfer of
currency exist such as to prevent JCR from making royalty payments to CEPTOR in
the United States, JCR shall take all reasonable steps to obtain a waiver of
such restrictions or otherwise to enable JCR to make such royalty payments,
failing which JCR shall make only the royalty payment due upon sales in such
country in local currency and deposit such payments in a local bank or other
depository designated by CEPTOR.
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5. Accounting
5.1 REPORTS. JCR shall report in writing to CEPTOR within sixty (60)
days after the end of each calendar quarter the quantities of PRODUCT subject to
royalties hereunder that were sold by JCR its AFFILIATES and sub-licensees
during said quarter, and the calculation of the royalties thereon. Upon
termination or expiration of this Agreement, the reporting obligations in this
Section 5.1 shall end upon the depletion of inventory of PRODUCT for sale.
Reports, notices, license fees and royalty payments and other communications
hereunder shall be sent to the appropriate party at the following addresses:
(i) For CEPTOR: Attn. Xxxxxx X. Xxxxxx
000 Xxxxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxxx, XX 00000-0000
Facsimile No. (000) 000-0000
(ii) For JCR: Attn: President and Chief Executive Officer
JCR Pharmaceuticals Co., Ltd.
0-00 Xxxxxx-xxx
Xxxxxx, 000-0000, Xxxxx
Facsimile No. x00-000-00-0000
5.2 RECORDS. JCR shall keep, and require each AFFILIATE and
sub-licensees to keep, for a period of three years on an on-going basis,
adequate records in sufficient detail to enable the royalties payable by JCR
hereunder to be determined and, upon reasonable advance notice, permit and
require each AFFILIATE and sub-licensee to permit, said records to be inspected
at any time during regular business hours no more often than one time during a
period of twelve (12) consecutive months by an independent auditor appointed by
CEPTOR and reasonably satisfactory to JCR for this purpose who shall report to
CEPTOR only the amount of the fees and royalties payable hereunder. The record
keeping obligations under this Section 5.2 shall end three years after the
termination or expiration of this Agreement.
5.3 Taxes. In the event that JCR or its AFFILIATES or its
sub-licensees is required to withhold any tax to the tax or revenue authorities
in the TERRITORY regarding any payment (direct or indirect) to CEPTOR due to the
laws of the TERRITORY, JCR shall withhold such tax from the payment due to
CEPTOR and pay such tax directly to such tax or revenue authorities in the
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XXXXXXXXX on CEPTOR's behalf. JCR shall provide CEPTOR with a copy of the
official receipt of such tax payment.
6. Infringement
6.1 REPRESENTATIONS. CEPTOR represents and warrants as follows:
(i) CEPTOR is the exclusive owner of the PATENTS as of the
EFFECTIVE DATE and is free to license same.
(ii) CEPTOR is the exclusive owner of the TECHNICAL INFORMATION
as of the EFFECTIVE DATE and is free to disclose and
license same.
6.2 LITIGATION. There are no actions, suits, or proceedings
commenced, pending or, to the best of CEPTOR's knowledge threatened against or
affecting CEPTOR, the licensed PATENT(s), TECHNICAL INFORMATION or the proposed
PRODUCTS as of the EFFECTIVE DATE. CEPTOR has no knowledge of third party
patents which might be asserted against JCR or its AFFILIATES or sub-licensees
relating to CEPTOR TECHNOLOGY
6.3 NO WARRANTY OF NON-INFRINGEMENT. Nothing in this Agreement shall
be construed as a warranty, assurance, or representation by CEPTOR or its
AFFILIATES that JCR or its AFFILIATES or sub-licensees can make, use, or sell a
PRODUCT free of any proprietary rights, including third party patents rights,
other than those specifically granted in this Agreement. CEPTOR warrants that it
has the right to grant the license granted to JCR in this Agreement.
6.4 INFRINGEMENT BY JCR. If JCR or its AFFILIATES or sublicensees is
sued for infringement by reason of practicing CEPTOR TECHNOLOGY, JCR shall
notify CEPTOR in writing of the suit and JCR shall have the sole right, but not
the obligation, to defend such suit at JCR's own expense or its AFFILIATES or
SUCCESSOR(S) as the case may be. CEPTOR shall have the right to provide advice
and assistance in any such litigation at its expense, unless such advice and
assistance are requested by JCR, in which case it shall be at JCR's expense. JCR
shall have the right to deduct such expense from royalties payable to CEPTOR
under this Agreement, provided, in the event of any award of fees or costs to
JCR from any such litigation, JCR and CEPTOR shall equitably allocate the
proceeds of the award in accordance with the amount of royalties that would have
been paid on JCR's activities and which were deducted from royalties to CEPTOR.
In the event CEPTOR is joined in such litigation, CEPTOR shall have the right to
defend itself with counsel of its choice at CEPTOR's expense.
6.5 INFRINGEMENT BY THIRD PARTY.
(i) JCR shall notify CEPTOR in writing of any infringement by
a third party of any PATENT which is notified to JCR and
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shall provide CEPTOR with the available evidence, if any,
of such infringement.
(ii) CEPTOR shall have the exclusive right and sole discretion
to effect termination of such infringement, including
bringing suit or other proceedings against the infringer
in its own name and JCR shall be kept informed at al times
of all such proceedings taken by CEPTOR. If CEPTOR
requests, JCR may, at JCR's discretion, join with CEPTOR
as a party to the lawsuit or other proceeding at CEPTOR's
expense; however, CEPTOR shall retain control of the
prosecution of such suit or proceedings, as the case may
be. Any monetary recovery in connection with such
infringement action take by CEPTOR shall first be applied
to reimburse CEPTOR for its expenses in prosecuting such
proceedings and any balance shall be applied to compensate
JCR for any losses arising from said third party
infringement with any balance remaining thereafter to be
retained by CEPTOR. If CEPTOR fails to defend against such
infringement, JCR shall have the right, but not the
obligation, to solely bring suit or other proceeding in
its own name and shall keep CEPTOR informed of all such
proceedings taken by JCR. Any monetary recovery in
connection with such infringement action solely taken by
JCR shall be retained solely by JCR.
7. CONFIDENTIALITY, NON-USE AND PUBLICATIONS
7.1 CEPTOR'S RIGHTS. Nothing in this Agreement shall be construed to
prohibit or limit in any manner the right of CEPTOR, its AFFILIATES or
SUCCESSOR(S) to grant any license for PATENTS or TECHNICAL INFORMATION to any
party outside the FIELD. CEPTOR may issue public announcements or press releases
relating to the existence and/or subject matter of this Agreement (excluding any
disclosure of the financial terms hereof unless required by law or regulation)
with reference to JCR as the licensee, only with the advance written consent of
JCR. In no event shall CEPTOR include in such announcement or releases,
explicitly or implicitly, any mention or indication that JCR endorses the
manufacture use or sale of any PRODUCT.
7.2 JCR'S RIGHTS. Nothing in this Agreement shall be construed to
prohibit or limit in any manner the sublicensing rights granted under this
Agreement to JCR, its AFFILIATES or SUCCESSOR(S) relating to PATENTS or
TECHNICAL INFORMATION to any party within the FIELD. JCR may issue public
announcements or press releases relating to the existence and/or subject matter
of the Agreement (excluding any financial terms hereof unless required by law or
regulation) with reference to CEPTOR as the licensor, only with the advance
written consent of CEPTOR. In no event shall JCR include in such announcement or
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releases, explicitly or implicitly, any mention or indication that CEPTOR
endorses the manufacture, use or sale of any PRODUCT.
7.3 JCR'S OBLIGATIONS. JCR shall not use any unpublished TECHNICAL
INFORMATION for any purpose other than as permitted under this Agreement. JCR
shall keep any unpublished TECHNICAL INFORMATION disclosed to JCR by CEPTOR
confidential for a period of five (5) years following the termination of this
Agreement for any reason. Nothing in this Agreement shall prevent JCR from:
(i) seeking issuance of additional patents or otherwise
pursuing patent applications relating to the PATENTS or
PRODUCTS at its own expense; and
(ii) making any disclosure of the text of APPENDIX A of this
Agreement or any unpublished, transferred TECHNICAL
INFORMATION as specifically required by law; and
(iii) publishing or making known JCR's data, results or any
other information, patents, or products of JCR. The
obligations of this Section 7.3 shall apply equally to JCR
and its AFFILIATES, SUCCESSOR(S) and sub-licensees.
7.4 CEPTOR'S OBLIGATIONS. CEPTOR its AFFILIATES and SUCCESSOR(S)
shall keep any reports provided to CEPTOR pursuant to section 6.1, the terms of
this Agreement, and any other confidential or proprietary information of JCR's
disclosed to CEPTOR confidential for a period of five (5) years following the
termination of this Agreement for any reason, unless otherwise required by law.
7.5 EXCEPTIONS TO CONFIDENTIALITY. No first party to this Agreement
shall be under any obligation to maintain information of a second party to this
Agreement in confidence which:
(i) the first party can demonstrate, by written records, was
in its possession at the time of disclosure by the second
party;
(ii) was in the public domain at the time of disclosure by the
second party through no fault of the first party receiving
the information; or
(iii) becomes part of the public domain after disclosure by the
second party through no fault of the first party receiving
the information; or
(iv) was or is disclosed to the first party in good faith by a
third party who was not and is not under any obligation of
confidence to the second party at the time of said
disclosure by said third party.
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(v) which is developed by the first party independently from
information received from the second party.
8. INDEMNIFICATION
Subject to the terms and conditions of this Agreement, JCR shall
defend, indemnify and hold CEPTOR harmless from and against any and all claims,
suits, and expenses, including attorney expenses, arising from the manufacture,
use or sale or other distribution of PRODUCTS by JCR or its AFFILIATES or
sub-licensees or persons purchasing PRODUCTS from them, except to the extent
attributable to the CEPTOR's gross negligence or intentional misconduct.
9. TERM AND TERMINATION
9.1 DEFAULT. If either party fails to perform any of its obligations
under this Agreement, the non-defaulting party may give written notice to the
defaulting party. Unless such default is corrected within sixty (60) days after
receipt of such notice, the notifying party may thereafter terminate this
Agreement. Notwithstanding the foregoing, CEPTOR may in no event terminate or
otherwise seek to terminate or invalidate this Agreement, before the end of the
term as per Section 9.2 hereunder, once JCR, its AFFILIATES and/or SUCCESSOR(S)
have incurred cumulative expenses incident to the research and development of
PRODUCT(S) equal to or greater than one million dollars ($1,000,000), excluding,
without limitation, any equity investments by JCR in CEPTOR, milestone payments
made to CEPTOR by JCR, or any royalty payments made to CEPTOR by JCR hereunder.
9.2 TERM. Unless otherwise terminated, as provided for in this
Agreement, this Agreement will continue on a country-by-country basis for a
period of fifteen (15) years.
9.3 TERMINATION BY JCR. This Agreement may be terminated as a whole
by JCR at any time upon one hundred and eighty (180) days written notice to
CEPTOR, subject to JCR's remittance of any outstanding payments due to CEPTOR
prior to or on the date such written notice becomes effective.
9.4 SURVIVABILITY. Sections 5, 6, 7 and 8 shall survive the
expiration or termination of this Agreement.
10. WARRANTIES
10.1 Each party represents to the other that it is a corporation or
company duly organized, validly existing and in good standing under the laws of
the State or Country of its incorporation or formation.
10.2 Each party represents and warrants to the other that this
Agreement has been duly executed and delivered and constitutes a legal, valid
and binding obligation enforceable against it in accordance with the terms of
this Agreement.
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10.3 Each party represents and warrants to the other that it is not
or will not be a party to any other agreement that will materially interfere
with its due, timely and complete performance of this Agreement.
10.4 Each party represents and warrants to the other that its entry
into this Agreement does not violate any agreement with any other party.
11. MANUFACTURING RIGHTS
11.1 Where applicable, at the request of JCR, CEPTOR shall supply
and/or cause to be supplied to JCR such necessary technology and know-how
(technology transfer) in order for JCR to manufacture the PRODUCT.
11.2 Where applicable circumstances permit JCR to manufacture, and
in the event that CEPTOR desires to purchase PRODUCT from JCR and JCR desires to
supply PRODUCT to CEPTOR, such sales shall be at JCR COGS plus a total $ amount
not to exceed what CEPTOR was paying for its contract manufactured PRODUCT.
12. MISCELLANEOUS
12.1 FORCE MAJEURE. Neither party shall be held liable for any delay
or failure in performance of any part of this Agreement caused by fires,
strikes, embargoes, explosions, power blackouts, computer malfunctions,
earthquakes, volcanic action, floods, wars, water, the elements, labor disputes,
civil disturbances, government requirements, civil or military authorities, acts
of God or the public enemy, inability to secure raw materials, inability to
secure product of outside vendors, terrorist acts, transportation facilities,
acts or omissions of carriers or other causes beyond its control, whether or not
similar to the foregoing conditions (collectively referred to as "Force Majeure
Event"), provided that the hindered party (i) notifies the other party of such
cause, (ii) exercises reasonable effort to cure such delay or failure and resume
performance.
12.2 AMENDMENTS. This Agreement may be amended only by a written
instrument executed by the parties.
12.3 WAIVER. The failure of either party at any time or times to
require performance of any provision hereof shall in no manner affect its rights
at a later time to enforce the same. No waiver by either party of any condition
or term in any one or more instances shall be construed as a further or
continuing waiver of such condition or term or any other condition or term.
12.4 SUCCESSOR(S). This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
SUCCESSOR(S) and permitted assigns.
12.5 ASSIGNABILITY. This Agreement shall not be assigned by either
party without the other party's written consent. Either party, however, shall
have the right to transfer this Agreement to any AFFILIATE or SUCCESSOR without
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the consent of the other party. Such transferee may transfer this Agreement back
to the transferor party without the prior written consent of the other party.
12.6 NOTICES AND PAYMENTS. Payments of fees or royalties required
hereunder shall be deemed paid if mailed by overnight service producing evidence
of delivery or delivered by hand to the party to whom such payment is required
at the address set forth in Section 6.1 hereof. Any notice required or permitted
to be given hereunder shall be in writing and shall be considered given upon the
earlier of (i) when actually received at the address set forth in Section 5.1,
or (ii) two business days after such notice is properly mailed by registered or
certified mail (return receipt requested).
12.7 VALIDITY OF PROVISIONS. If any provision(s) of this Agreement
are or become invalid, are ruled illegal by any court of competent jurisdiction
or are deemed unenforceable under then current applicable law from time to time
in effect during the term hereof, it is the intention of the parties that the
remainder of this Agreement shall not be affected thereby. It is further the
intention of the parties that in lieu of each such invalid, illegal, or
unenforceable provision, there shall be substituted or added as part of this
Agreement a provision that shall be as similar as possible in economic and
business objectives to such invalid, illegal, or unenforceable provision as was
originally intended by the parties, but that shall be valid, legal, and
enforceable.
12.8 TITLES. All titles and subtitles used in this Agreement are for
purposes of illustration and organization and are not legally binding on the
parties.
12.9 RELATIONSHIP OF THE PARTIES. Nothing in this Agreement is
intended or shall be deemed to constitute a partnership, agency,
employer-employee, or joint venture relationship between the parties, and
neither party is authorized or empowered to act as agent for the other for any
purpose or to make any statement, contract, warranty, representation or
commitment on behalf of the other.
12.10 DISPUTE RESOLUTION AND APPLICABLE LAW. The parties shall
attempt in good faith to resolve any dispute arising out of or relating to this
Agreement promptly by negotiations between executives who have the authority to
settle such dispute. Either party may give the other party written notice of any
dispute hereunder not resolved in the normal course of business. Within thirty
(30) days following such delivery of such notice, executives of both parties
shall discuss by telephone or meeting at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to exchange relevant
information, and to attempt to resolve such dispute.
(i) If the matter has not been resolved within sixty (60)
days following the disputing party notice, or if the
parties fail to discuss or meet within the thirty (30)
day period, then within ten (10) days thereafter,
either party may initiate non-binding
arbitration/mediation, which shall be held in New York
City, New York and shall be conducted in accordance
with the rules of the American Arbitration
Association. Once arbitration/mediation is initiated
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by one Party, the other Party agrees to participate in
and conduct mediation in accordance with the
applicable in good faith and not to pursue other
remedies while such arbitration/mediation is
proceeding.
(ii) This Agreement shall be interpreted and governed by,
and all differences of opinion which may rise in the
signing, implementation or termination of this
Agreement shall be adjudicated according to the laws
of the State of New York, United States of America,
without reference to its choice of law provisions and
may only be filed in courts in Southern District of
New York in Manhattan.
(iii) Each party shall pay its own costs and expenses
incurred in attempting to resolve a dispute pursuant
to the procedures set forth in this section.
12.11 INTEGRATION. Except for the Stock Purchase Agreement this
Agreement constitutes the entire understanding between the parties with respect
tot the subject matter hereof, and supersedes and replaces all prior agreements,
understandings, writings, and discussions between the parties relating to said
subject matter.
12.12 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and each of such counterparts shall, for all purposes, be deemed
to be an original, but all of such counterparts shall constitute one and the
same instrument.
12.13 FURTHER INSTRUMENTS AND ACTS. Each party hereto agrees to
execute, acknowledge and deliver such further instruments and to do all such
other acts as may be necessary to effect the purpose and intent of this
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed on its behalf by its duly authorized representatives as of the
EFFECTIVE DATE.
CEPTOR CORPORATION JCR PHARMACEUTICALS CO., LTD.
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Shin Ashida
----------------------- -------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Shin Ashida
Title: Chief Executive Officer Title: President and Chief
Executive Officer
APPENDIX A
o US Patent 4,742,081 [carnitine]
o US Patents 4,866,040, 5,008,288 and 5,876,747
[carnitine, aminocarnitine and cysteic acid (taurine)]
o US and worldwide Patent application for MYODUR
specifically in the field of Muscular Dystrophy filed
[May 31, 2004]
o Other pending and issued foreign and US counterparts to
the foregoing.
o Any and all provisional filings leading to future claims
on MYODUR(TM) and its use in Muscular Dystrophy
This APPENDIX shall be periodically updated.
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