EXHIBIT 10.1
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as **. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.
EXECUTION COPY
AGREEMENT
by and between
ADOLOR CORPORATION
and
TORAY INDUSTRIES, INC.
dated
March 5, 2002
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................................ 1
1.1. Adolor Patent Rights....................................................... 1
1.2. Affiliate.................................................................. 1
1.3. Agreement Term............................................................. 2
1.4. Business Day............................................................... 2
1.5. Compound................................................................... 2
1.6. FDA........................................................................ 2
1.7. Field...................................................................... 2
1.8. First Commercial Sale...................................................... 2
1.9. GAAP....................................................................... 2
1.10. Japanese Fiscal Year....................................................... 2
1.11. NDA........................................................................ 2
1.12. Net Sales.................................................................. 3
1.13. Product.................................................................... 3
1.14. Proprietary Information.................................................... 3
1.15. Royalty Term............................................................... 3
1.16. Semi-Annual Period......................................................... 4
1.17. Territory.................................................................. 4
1.18. Toray Patent Rights........................................................ 4
1.19. USA........................................................................ 4
ARTICLE II COVENANT NOT TO XXX........................................................ 4
2.1. Covenant Not To Xxx........................................................ 4
ARTICLE III CONFIDENTIALITY AND PUBLICITY.............................................. 5
3.1. Non-Disclosure and Non-Use Obligations..................................... 5
3.2. Permitted Disclosure of Proprietary Information............................ 5
3.3. Use of Names............................................................... 6
ARTICLE IV PAYMENTS AND REPORTS....................................................... 6
4.1. Initial Payment............................................................ 6
Confidential Page i March 5, 2002
4.2. Milestone Payments......................................................... 6
4.3. Royalties.................................................................. 6
4.4. Records; Reports; Payment of Royalty....................................... 6
4.5. Method for Payment......................................................... 7
4.6. Late Payments.............................................................. 7
4.7. Audits..................................................................... 7
4.8. Taxes...................................................................... 8
4.9. Status Report.............................................................. 8
ARTICLE V TERM AND TERMINATION....................................................... 8
5.1. Term and Expiration........................................................ 8
5.2. Termination, for Cause..................................................... 9
5.3. Effect of Expiration or Termination........................................ 9
5.4. The Payment upon Termination............................................... 10
ARTICLE VI MISCELLANEOUS.............................................................. 10
6.1. Force Majeure.............................................................. 10
6.2. Assignment................................................................. 10
6.3. Severability............................................................... 10
6.4. Notices.................................................................... 11
6.5. Applicable Law............................................................. 11
6.6. Dispute Resolution......................................................... 11
6.7. Entire Agreement........................................................... 12
6.8. Independent Contractors.................................................... 13
6.9. Interpretation; Negotiation................................................ 13
6.10. Waiver..................................................................... 13
6.11. Headings................................................................... 13
6.12. Counterparts............................................................... 13
Confidential Page ii March 5, 2002
AGREEMENT
THIS AGREEMENT ("Agreement"), effective as of March 5, 2002 ("Effective
Date"), is made by and between Adolor Corporation, a corporation organized and
existing under the laws of the State of Delaware, United States, and having its
principal office at 000 Xxxxxxxxxxxx Xxxxx, Xxxxx, XX 00000 ("Adolor"), and
------
Toray Industries, Inc., a corporation organized and existing under the laws of
Japan and having its principal office at 2-1, Xxxxxxxxxx-Xxxxxxxxx 0-xxxxx,
Xxxx-xx, Xxxxx 000-0000, Xxxxx ("Toray") (each, a "Party," and collectively, the
-----
"Parties").
W I T N E S S E T H:
WHEREAS, Adolor is the owner of, or has certain rights to, the Adolor
Patent Rights as defined herein; and Toray is the owner of, or has certain
rights to, the Toray Patents as defined herein.
WHEREAS, the United States patents included in the Adolor Patent Rights and
the Toray Patents Rights are presumed valid in the United States.
WHEREAS, Toray and Adolor desire to enter into a covenant not to xxx upon
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless specifically set forth to the contrary herein, the following terms,
where used in the singular or plural, shall have the respective meanings set
forth below:
1.1. "Adolor Patent Rights" shall mean United States Patent **, all
--------------------
reissues and reexaminations thereof, and all foreign equivalents
thereof listed in Attachment 1 hereto, registrations, extensions, and
any supplemental protection certificates and the like based thereon.
Adolor represents and warrants that, Attachment 1 hereto is complete
and accurate as of the date hereof.
1.2. "Affiliate" shall mean any corporation or other business entity, in
---------
whatever country organized and/or existing: (a) of which fifty percent
(50%) or more of the securities or other ownership interests
representing the equity, the voting stock or general partnership
interest are owned, or otherwise controlled or held, directly or
indirectly, by Toray or Adolor, as the case may be; (b) which,
directly or
**=Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
indirectly, owns, or otherwise controls or holds fifty percent (50%)
or more of the securities or other ownership interests representing
the equity, voting stock or general partnership interest of Toray or
Adolor, as the case may be; or (c) of which fifty percent (50%) or
more of the securities or other ownership interests representing the
equity, voting stock or general partnership interest thereof is
owned, or otherwise controlled or held by an entity which, directly
or indirectly, also owns or otherwise controls or holds fifty percent
(50%) or more of the securities or other ownership interests
representing the equity, voting stock or general partnership interest
in Adolor or Toray, as the case may be.
1.3. "Agreement Term" shall mean the period from the Effective Date
--------------
through the expiration of the last-to-expire of the patents within
the Adolor Patent Rights.
1.4. "Business Day" shall mean any day that the New York Stock Exchange is
------------
open and which is not a Saturday or a Sunday.
1.5. "Compound" shall mean any drug substance, including **, which
--------
usage is covered by the claims of United States Patent ** and
any claims of equivalent scope contained in any foreign equivalent
thereof included in the Adolor Patent Rights.
1.6. "FDA" shall mean the United States Food and Drug Administration and
---
any successor agency having substantially the same functions.
1.7. "Field" shall mean the treatment of **.
-----
1.8. "First Commercial Sale" shall mean the first transfer for value of
---------------------
the Product or the Compound in the Field by Toray in the United
States to another party (including any Affiliate of Toray) for end
use or consumption.
1.9. "GAAP" shall mean generally accepted accounting principles in the
----
United States, consistently applied.
1.10. "Japanese Fiscal Year" shall mean the period beginning on April 1 and
--------------------
ending on March 31.
1.11. "NDA" shall mean any new drug application regarding the Product filed
---
with the FDA, including a reactivation, refiling, resubmission and/or
amendment of any new drug application previously filed with the FDA
regarding the Product.
1.12. "Net Sales" shall mean the gross sales of any Product and/or any
---------
Compound invoiced in the Field in the United States for commercial
uses by Toray or its Affiliates to unrelated third parties (herein
after "Customers") calculated at fair market value, less deductions,
in accordance with GAAP, for: (a) statutory or
**=Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to the omitted portions.
Confidential Page 2 March 5, 2002
contractual liability rebates to any governmental entity or Customer;
(b) rebates paid to any state or governmental entity in the United
States of America pursuant to medicaid or medicare rebate legislation
and any other state or governmental rebate program; (c) cash
discounts for prompt payment by Customers generally available at the
time of sale; (d) adjustments, allowances, or credits to Customers
for Products returned for any reason to Toray; and (e) chargebacks,
floor stock price adjustments, or other trade discounts whether or
not paid directly to the Customer.
1.13. "Product" shall mean any finished pharmaceutical formulations
-------
containing the Compound in any dosage form.
1.14. "Proprietary Information" shall mean any and all information or data,
-----------------------
including the terms of this Agreement, which is provided by one Party
to the other Party in connection with this Agreement, whether
communicated in writing, marked "Confidential," or communicated
orally or by other means, and identified as confidential, then is
summarized in reasonable detail in a writing marked "Confidential,"
but not including information which:
(a) is known to the receiving Party at the time of its initial
disclosure hereunder, as documented by the receiving Party's
records;
(b) is in the public domain or knowledge, or comes into the public
domain without breach of any duty hereunder by the receiving
Party;
(c) the disclosing Party permits, in writing, the receiving Party to
disclose; or
(d) is independently developed by or for the receiving Party without
benefit of any Proprietary Information received from the other
Party, as documented by the receiving Party's records.
1.15. "Royalty Term" shall mean the period from the First Commercial Sale
------------
of the Product or the Compound in the Field in the United States,
continuing until the earlier of either the expiration of the
last-to-expire of the patents within the Adolor Patent Rights in the
United States or the termination of this Agreement.
1.16. "Semi-Annual Period" shall mean the respective period of six
------------------
consecutive calendar months ending on September 30 or March 31 of any
consecutive twelve-month period, beginning on April 1, comprising a
calendar year, or it shall mean the part of such six-month period at
the beginning or end of the Royalty Term at issue that has been
shortened due to the timing of the start or end of such Royalty Term.
Notwithstanding the foregoing, in the case that this Agreement is
terminated in the middle of such six-month period due to any breach
by either
Confidential Page 3 March 5, 2002
Party in accordance with Section 5.2, royalties shall be
determined following Section 5.4.
1.17. "Territory" shall mean all countries of the world.
---------
1.18. "Toray Patent Rights" shall mean United States Patent **, all
-------------------
reissues and reexaminations thereof, and all foreign counterparts
thereof, are included in patents listed in Attachment 2 hereto,
registrations, extensions, and any supplemental protection
certificates and the like based thereon. Toray represents and
warrants that Attachment 2 hereto is complete and accurate as of the
date hereof.
1.19. "USA" shall mean the United States of America.
---
ARTICLE II
COVENANT NOT TO XXX
2.1. Covenant Not To Xxx. The Parties, on behalf of themselves and their
-------------------
respective Affiliates (including, but not limited to, their licensees
or sublicensees under the Parties' respective Patent Rights) agree
not to take, directly or indirectly, any steps or actions to
challenge the validity of, revoke or oppose any patent included in
the Adolor Patent Rights or the Toray Patent Rights, as the case may
be, or to assist, procure or incite any person to do so in the
Territory for the duration of the Agreement Term, unless earlier
terminated. In consideration of Toray's payment referred to in
Article IV, Adolor, on behalf of itself and its Affiliates
(including, but not limited to, its licensees, sub-licensees or
assigns under the Adolor Patent Rights) for the duration of the
Agreement Term, unless earlier terminated in accordance with Article
V, waives any claim anywhere in the Territory against Toray, on
behalf of itself and its Affiliates (including, but not limited to,
its licensees or sub-licensees under the Toray Patent Rights) prior
to or after the Effective Date in respect of any Product
manufactured, supplied, sold or offered for sale by or on behalf of
Toray or Toray's Affiliates (including, but not limited to, their
licensees or sub-licensees under the Toray Patent Rights) for damages
or any other remedy for infringement of the Adolor Patent Rights in
the Territory. In addition, Adolor, on behalf of itself and its
Affiliates (including, but not limited to, its licensees,
sub-licensees or assigns under the Adolor Patents Rights) agrees not
to develop, sell or manufacture in the Territory any product in the
Field using Toray Patent Rights for as long as this Agreement is in
effect.
**=Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to the omitted portions.
Confidential Page 4 March 5, 2002
ARTICLE III
CONFIDENTIALITY AND PUBLICITY
3.1. Non-Disclosure and Non-Use Obligations. All Proprietary Information,
--------------------------------------
including but not limited to royalty reports and other reports
required hereunder shall be maintained in confidence and shall not be
disclosed to any independent third party or used for any purpose
except as expressly permitted herein without the prior written
consent of the Party that disclosed the Proprietary Information to
the other Party or to which the information is otherwise Proprietary
Information.
3.2. Permitted Disclosure of Proprietary Information. Notwithstanding the
-----------------------------------------------
provisions of Section 3.1, either Party may disclose the other
Party's Proprietary Information:
(a) to obtain authorization to market, offer for sale or sell the
Product, but such disclosure may be only to the extent
reasonably necessary to obtain such authorizations;
(b) related to a Product to which it has rights, to a third party
conducting a due diligence investigation of the disclosing
Party's business in connection with a possible business
combination, financing transaction, or the like, solely for the
purpose of evaluating any such transaction, on the condition
that any such third party agrees in writing to be bound to Toray
or Adolor, as the case may be, in such a way that Toray or
Adolor can fulfill its obligations hereunder; and/or
(c) if required to be disclosed by administrative or judicial
authority of competent jurisdiction, provided that advance
notice is promptly delivered to the original disclosing Party,
or the other Party in the case of jointly-held Proprietary
Information, in order to provide an opportunity for the original
disclosing Party or the other Party to challenge or limit the
disclosure obligations, with the reasonable cooperation of the
Party immediately subject to such law or court order; provided,
however, without limiting any of the foregoing, it is understood
that either Party may make disclosure of this Agreement and the
terms hereof in any filings required by the Securities and
Exchange Commission ("SEC"), may file this Agreement,
appropriately redacted, as an exhibit to any filing with the
SEC, and may distribute any such filing in the ordinary course
of its business.
3.3. Use of Names. Neither Party shall use the name of the other Party in
------------
any publicity or advertising campaign without the prior written
approval of the other
Confidential Page 5 March 5, 2002
Party. Upon execution of this Agreement, either Party may issue a
written press release in a form mutually agreed upon by the Parties in
writing, in advance. Any consent required hereunder shall not be
untimely or unreasonably withheld by either Party.
ARTICLE IV
PAYMENTS AND REPORTS
4.1. Initial Payment. Toray shall pay Adolor, within thirty (30) days after
---------------
the Effective Date and Toray's receipt of an invoice from Adolor
referred to in Article 4.5, a non-refundable initial payment of Two
Hundred Thousand Dollars ($200,000.00).
4.2. Milestone Payments. Toray shall pay Adolor a milestone payment of
------------------
** Dollars ($**) within thirty (30) days after the ** for any Product
and Toray's receipt of an invoice from Adolor referred to in Article
4.5. Toray shall notify Adolor of such ** in writing within ten (10)
Business Days after the receipt of **.
4.3. Royalties. During the Royalty Term, Toray shall pay to Adolor a
---------
royalty of **% of annual Net Sales for the first ** Dollars ($**)
in annual Net Sales and a royalty of **% of annual Net Sales in excess
of ** Dollars ($**).
4.4. Records; Reports; Payment of Royalty. Toray shall keep complete and
------------------------------------
accurate records in sufficient detail to enable the royalties due
hereunder to be calculated. During the Royalty Term, Toray shall
furnish to Adolor a reasonably-detailed, semiannually written reports
showing the Net Sales in the Territory of all Products and Compounds
sold by Toray during the reporting period and the royalties due on
account of such sales. If all of such information was not reasonably
available to Toray by the reporting date, estimated gross sales will
be utilized for the purpose of calculating the royalties due for that
period. Any overpayments or underpayments based on actual gross sales
will be reconciled during the next Semi-Annual Period. These reports
shall be due on the 45/th/ day following the close of each Semi-Annual
Period and the Royalties shall be paid within thirty (30) days after
such reports are received by Adolor and Toray's receipt of an invoice
from Adolor referred to in Article 4.5.
4.5. Method for Payment. All payments shall be made in U.S. dollars by wire
------------------
transfer to the account identified below upon Toray's receipt of an
invoice which specifies the amount of the payment:
**=Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to the omitted portions.
Confidential Page 6 March 5, 2002
Bank Name and Address: **
ABA Route Number: **
For Account Number: **
Remittance Name: **
International Wires: **
4.6. Late Payments. Any payments due hereunder to Adolor shall bear
--------------
interest from and after the date when such payment is due up to and
including the date when such payment is paid by Toray at a rate,
compounded daily, equal to the prime rate plus ** per annum (but in no
event in excess of the maximum rate then allowed by law), using the
prime interest rate as quoted in The Wall Street Journal (or, if The
Wall Street Journal ceases to publish such information, Reuters
Information Service, or, if neither publishes such information,
another similar service or source reasonably acceptable to Toray and
Adolor) on the date such payment is due, or if such date is not a
Business Day, the first Business Day following such date.
4.7. Audits. Upon the written request of Adolor and not more than twice in
-------
any 12-month period, Toray shall permit an independent certified
public accounting firm selected and paid by Adolor, and reasonably
acceptable to Toray, to have access, during normal business hours,
upon twenty-one (21) days notice to Toray, to such of the records of
Toray as may be reasonably necessary to verify the accuracy of the
royalties due hereunder for any Japanese Fiscal Year ending not more
than 36 months prior to the date of such request. The accounting firm
shall disclose to Adolor only whether the royalty reports are correct
or incorrect and the specific details concerning any discrepancies.
If such accounting firm concludes that additional royalties were owed
during such period, Toray shall pay the additional royalties to Adolor
within thirty (30) Business Days following the date Adolor delivers to
Toray such accounting firm's written report so concluding and Toray's
receipt of an invoice from Adolor referred to in Article 4.5, and if
such deficiency was ** percent (**%) or more of the amount actually
paid, Toray shall pay the reasonable costs and expenses of the
**=Certain information on this page has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to the omitted portions.
Confidential Page 7 March 5, 2002
accounting firm; provided, however, that, in the event that Toray
shall not be in agreement with the conclusion of such report, such
matter shall be resolved pursuant to the provisions of Section 6.6. In
the event such accounting firm concludes that Toray overpaid the
amounts actually due Adolor for such period, Toray shall have a credit
against future royalties payable to Adolor in the amount of such
overpayment. Subject to the determination of fraud and/or other
criminal wrongdoing, upon the expiration of thirty-six (36) months
following the end of any Japanese Fiscal Year during which royalties
were due from Toray to Adolor hereunder, the calculation of royalties
payable by Toray with respect to such year shall be binding and
conclusive upon Adolor and Toray, and Toray shall be released from any
liability or accountability with respect to additional royalties for
such year.
4.8. Taxes. All payments due from Toray under this Article IV are gross and
-----
inclusive of any and all income, transfer, remittance or patent taxes,
fees or assessments of whatever kind or nature (including any interest
or penalties assessed thereon) now or hereafter required by any
governmental authority to be paid or withheld for or on account of any
such payments ("Taxes"). Toray shall provide Adolor with a receipt
certificate of tax payments made by Toray pursuant to this Agreement.
4.9. Status Report. Toray will provide Adolor with a status report at the
-------------
end of each Japanese Fiscal Year, which summarizes the progress of
Compounds or Products in development in United States. The status
report will include a description of the progress of clinical studies
and a projected date for an NDA submission.
ARTICLE V
TERM AND TERMINATION
5.1. Term and Expiration. This Agreement shall commence as of the Effective
-------------------
Date and continue through the Agreement Term, unless terminated
earlier pursuant to Section 5.2 below.
5.2. Termination, for Cause. Either Party may terminate this Agreement by
----------------------
thirty (30) days prior written notice to the other Party at any time
during the Agreement Term, as follows:
(a) if the other Party is in material breach of any material
obligation hereunder and has not cured such breach within thirty
(30) days after notice from the non-breaching Party, requesting
cure of the breach and threatening to terminate this Agreement if
such breach is not cured; provided, however,
Confidential Page 8 March 5, 2002
that if the breach is not capable of being cured within thirty
(30) days of such written notice, the Agreement may not be
terminated so long as the breaching Party commences and is taking
commercially reasonable actions to the satisfaction of the
non-breaching Party to cure such breach as promptly as
practicable; or
(b) upon the filing or institution of bankruptcy, reorganization,
liquidation or receivership proceedings, or upon an assignment of
a substantial portion of the assets for the benefit of creditors,
in either case, by the other Party; provided, however, in the
case of any involuntary bankruptcy, reorganization, liquidation,
receivership or assignment proceeding against the other Party,
such right to terminate by the first Party shall only become
effective if the Party against which the action was taken
consents to the involuntary proceeding or such proceeding is not
dismissed within 60 days after the filing thereof. If either
Party is a debtor in a bankruptcy proceeding, whether voluntary
or involuntary, all rights and licenses granted pursuant to this
Agreement are, and shall otherwise be deemed to be, for purposes
of Section 365(n) of 11 U.S.C.(S)101 et seq. (the "Bankruptcy
Code"), licenses of rights to "intellectual property" as defined
under Section 101(35A) of the Bankruptcy Code; provided that, the
non-breaching Party shall be entitled to all applicable rights
under Section 365 of the Bankruptcy Code, including but not
limited to, the right to receive a complete duplicate of (or
complete access to, as appropriate) any relevant intellectual
property and all embodiments of such intellectual property, upon
written request therefor by the non-breaching Party.
5.3. Effect of Expiration or Termination. The provisions of Article III
-----------------------------------
shall survive the expiration or termination of this Agreement. Any
expiration or termination of this Agreement shall be without prejudice
to the rights of any Party against the other accrued or accruing under
this Agreement prior to termination.
5.4. The Payment upon Termination. In the case that this Agreement is
----------------------------
terminated in accordance with Section 5.2(a) hereinabove and,
i) such termination is caused by the breach of Adolor during the
Semi-Annual Period, Toray shall be exempt from the royalty
obligation set forth in Section 4.3 during the Semi-Annual Period
when such Adolor breach occurred;
ii) such termination is caused by the breach of Toray during the
Semi-Annual Period, Toray shall make the royalty payment set
forth in Section 4.3 during the Semi-Annual Period when such
Toray breach occurred.
Confidential Page 9 March 5, 2002
ARTICLE VI
MISCELLANEOUS
6.1. Force Majeure. Except for payment of monetary amounts due hereunder,
-------------
neither Party shall be held liable or responsible to the other Party,
nor be deemed to have defaulted under, or materially breached, this
Agreement for failure or delay in fulfilling or performing any term of
this Agreement, but shall be excused to the extent and for the
duration of time when such failure or delay is caused by or results
from causes beyond the reasonable control of the affected Party,
provided, however, that the duration is not more than three (3)
months, and the affected Party shall have used its reasonable best
efforts to have avoided, and be using its reasonable best efforts to
remove, such cause(s), and such Party shall perform its obligation(s)
under the terms of this Agreement with the utmost dispatch when the
cause is removed.
6.2. Assignment. This Agreement may not be assigned or otherwise
----------
transferred; provided, however, that Adolor may assign this Agreement
to an Affiliate or to any successor in connection with the transfer or
sale of all or substantially all of its business assets related to the
Adolor Patent Rights or its total business, or in the event of its
merger, consolidation, or change of control, so long as such assignee
or transferee agrees in writing to abide by the terms and conditions
hereof.
6.3. Severability. In the event that any provision contained in this
------------
Agreement is held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions
contained herein shall not, in any way, be affected or impaired
thereby, and, if the absence of the invalidated provision(s) adversely
affect(s) the substantive rights of the Parties, the Parties shall
replace the invalid, illegal or unenforceable provision(s) with valid,
legal and enforceable provision(s) which, insofar as practical,
implement the purposes of this Agreement.
6.4. Notices. All notices or other communications which are required or
-------
permitted hereunder shall be in writing and sufficient, if delivered
personally, if sent by nationally-recognized overnight courier or sent
by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:
if to Adolor:
Confidential Page 10 March 5, 2002
Adolor Corporation
000 Xxxxxxxxxxxx Xxxxx
Xxxxx, XX 00000
Attention: President & CEO
with copies to:
Dechert
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
if to Toray:
Toray Industries, Inc.
2-1, Xxxxxxxxxx-Xxxxxxxxx 0-xxxxx
Xxxx-xx, Xxxxx 000-0000
Xxxxx
Attention: Masanobu Naruto, Ph.D.
General Manager, Pharmaceuticals Planning Department
or to such other address as the Party to whom notice is to be
given may have furnished to the other Party, in writing, in
accordance herewith. Any such communication shall be deemed to
have been given when delivered, if personally delivered or
sent by courier; or on the fifth (5/th/) Business Day
following the date of mailing, if sent by registered or
certified mail.
6.5. Applicable Law. This Agreement shall be governed by and
--------------
construed in accordance with the laws of the United States of
America and the State of New York, without reference to any
conflict of laws principles.
6.6. Dispute Resolution. This Section governs any dispute,
------------------
disagreement, claim or controversy between the Parties arising
from or related to this Agreement (a "Disputed Matter"). All
Disputed Matters shall be submitted to the following dispute
resolution process:
a) Internal Escalation. First, the Disputed Matter
-------------------
shall be referred jointly to senior executives of each of
the Parties. If such executives do not agree upon a
resolution within ten (10) Business
Confidential Page 11 March 5, 2002
Days after referral of the matter to them, the
complaining Party shall proceed to the next stage of
this dispute resolution procedure.
b) Mediation. The complaining Party shall, upon written
---------
notice and within ten (10) Business Days after the
conclusion of the internal escalation procedure,
elect to have the Disputed Matter referred to
non-binding mediation before a single impartial
mediator to be jointly agreed upon by the Parties.
The mediation meeting shall be attended by executives
of both parties possessing authority to resolve the
Dispute Matter, and shall be conducted no more than
twenty (20) Business Days after a Party serves a
written notice of an intention to mediate. The
mediation shall be held in accordance with
International Chamber of Commerce ADR Rules in USA if
initiated by Toray and shall be conducted in Japan if
initiated by Adolor. The Parties shall share equally
all costs of such mediation.
c) Arbitration. In the event mediation proves
-----------
unsuccessful, the Disputed Matter shall be finally
submitted to the International Chamber of Commerce
and settled under the rules of arbitration of the
International Chamber of Commerce. Such arbitration
proceedings shall be conducted in USA using the
Commercial Law of the United States if initiated by
Toray and shall be conducted in Japan using the
Commercial Law of Japan if initiated by Adolor. The
award and the final decision of the arbitrator(s)
shall be conclusive and binding upon all parties
hereto and judgement upon the award may be entered
into any court of general jurisdiction. Each Party
shall be responsible for its own expenses related to
such procedure, and shall share equally in the costs
and expenses related to the site, the arbitrator(s),
and filing the final resolution(s), unless the
arbitrator(s) shall award otherwise.
This Agreement to resolve a Disputed Matter shall continue in
full force and effect subsequent to and notwithstanding the
expiration or termination of this Agreement.
6.7. Entire Agreement. This Agreement contains the entire
----------------
understanding of the Parties with respect to the subject
matter hereof. All express or implied agreements and
understandings, either oral or written, heretofore made, are
expressly merged in and made a part of this Agreement. This
Agreement may be amended, or any term hereof modified, only by
a written instrument duly executed by both Parties hereto.
Confidential Page 12 March 5, 2002
6.8. Independent Contractors. It is expressly agreed that the
-----------------------
Parties shall be independent contractors and that the
relationship between the Parties shall not constitute a
partnership, joint venture or agency. Neither Party shall have
the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be
binding on the other Party, without the prior consent of such
other Party.
6.9. Interpretation; Negotiation. Each Party acknowledges that it
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has participated in the negotiation of this Agreement and no
provision of this Agreement shall be construed against or
interpreted to the disadvantage of either Party hereto by
any court or other governmental or judicial authority by
reason of such Party having or being deemed to have
structured, dictated or drafted such provision. Each party
at all times has had access to an attorney in the negotiation
of the terms of and in the preparation and execution of this
Agreement, and each Party has had the opportunity to review
and analyze this Agreement, for a sufficient period of time
prior to the execution and delivery thereof. All of the terms
of this Agreement were negotiated at arm's-length. This
Agreement was prepared and executed without fraud, duress,
undue influence or coercion of any kind exerted by either
Party upon the other. The execution and delivery of this
Agreement is the free and voluntary act of each of Adolor and
Toray.
6.10. Waiver. The waiver by a Party hereto of any right hereunder or
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the failure to perform or of a breach by the other Party
shall not be deemed a waiver of any other right hereunder or
of any other breach or failure by said other Party, whether of
a similar nature or otherwise.
6.11. Headings. The captions to the several Articles and Sections
--------
hereof are not a part of this Agreement, but are merely guides
or labels to assist in locating and reading the several
Articles and Sections hereof.
6.12. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument.
Confidential Page 13 March 5, 2002
IN WITNESS WHEREOF, the Parties have executed this Agreement, effective
as of the Effective Date.
ADOLOR CORPORATION TORAY INDUSTRIES, INC.
By:/s/ Xxxx X. Xxxxxx By:/s/ X. Xxxxxxxx
------------------------ ----------------------------
Name: Xxxx X. Xxxxxx Name: Kiyoteru Wakasugi
Title: President & CEO Title: Senior Managing Director,
General Manager, Pharmaceuticals & Medical
Products Division
Confidential Page 14 March 5, 2002
Attachment 1:
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**
**=Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
Confidential Page 15 March 5, 2002
Attachment 2:
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**
**=Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
Confidential Page 16 March 5, 2002
