Portions of the exhibit have been excluded because it is both not material and is the type of information that the registrant treats as private or confidential. COMMERCIALIZATION AND DISTRIBUTION AGREEMENT
Exhibit 10.55
*Portions of the exhibit have been excluded because it is both not material and is the type of information that the registrant treats as private or confidential.
COMMERCIALIZATION AND DISTRIBUTION AGREEMENT
This Commercialization and Distribution Agreement (“Agreement”) is made and entered into as of the 10th day of February, 2023 (“Effective Date”), by and between CAPRICOR THERAPEUTICS, INC., a corporation organized under the laws of the State of Delaware, with its principal office located at 00000 Xxxx xx xxx Xxxx, Xxx. 000, Xxx Xxxxx, Xxxxxxxxxx 00000 XXX (“Capricor”) and NIPPON SHINYAKU CO., LTD. a corporation organized under the laws of Japan, with its principal office located at 00, Xxxxxxxxxx-Xxxxxxxx-xxx, Xxxxxxxx, Xxxxxx-xx, Xxxxx 000-0000, Xxxxx (“Distributor”). Capricor and Distributor may sometimes individually be referred to herein as a “Party” and together as the “Parties”.
In consideration of the mutual promises contained herein, the Parties agree as follows:
1.DEFINITIONS. For purposes of this Agreement, the words, terms and phrases when used in this Section 1 or throughout the Agreement with an initial capital letter, shall have the meanings assigned to them unless the context otherwise requires:
1.1“Affiliate” means any person or entity directly or indirectly controlling or controlled by, or under direct or indirect common control with a Party, during the term of this Agreement and only so long as such control exists. For purposes of this definition, “control” means the power to direct the management and policies of such person or entity directly or indirectly, whether through ownership of voting or other equity securities, by contract or otherwise, and shall include entities which become Affiliates after the Effective Date.
1.2“Cell Therapy” means the administration of living cells to a patient for the treatment of a disease or condition.
1.3“Chemistry, Manufacturing and Controls (“CMC”)” means the body of information that defines the manufacturing process and the quality control release testing, specifications and stability of the Product together with the manufacturing facility and all of its support utilities, including their design, qualification, operation and maintenance for regulatory compliance in the Territory.
1.4 “Commercially Reasonable Efforts” means with respect to a Party, those efforts and resources consistent with those typically applied by a biopharmaceutical or biotechnology company of comparable size and resources to such Party and its Affiliates to a product that is at a similar stage of development or commercialization and has similar market potential, taking into account efficacy, safety, patent and regulatory exclusivity, anticipated or approved labelling, present and future market potential, competitive conditions, the profitability of the product in light of pricing and reimbursement issues, and all other relevant factors.
1.5“Competing Products” means any Cell-Therapy product used as a therapeutic for DMD.
1.6“Customers” means hospitals or other healthcare providers equipped with pharmacy services and cold storage capabilities.
1.7“DMAH” has the meaning defined in Section 2.5.
1.8“DMD” means Duchenne muscular dystrophy.
1.9“FDA” means the United States Food and Drug Administration.
1.10“First Commercial Sale” means, with respect to a Product in the Territory, the first bona fide commercial sale to a third party of such Product following Manufacturing and Marketing Approval. Sales or other dispositions by Capricor for clinical trial or other scientific testing purposes, or under early access or compassionate use programs, shall not constitute a First Commercial Sale.
1.11“GCTP” means the Good Gene, Cellular, and Tissue-based Products Manufacturing Practice.
1.12“GCP” means the Good Clinical Practice.
1.13“GDP” means Good Distribution Practices.
1.14“GMP” means Good Manufacturing Practice as set forth in the Quality Agreement.
1.15 “Governmental Authority” means any government or any court, administrative agency or commission or other governmental or regulatory authority or agency and shall also include any quasi-governmental authority or agency with jurisdictional or regulatory authority over any activity contemplated by this Agreement.
1.16“Manufacturing and Marketing Approval” means all approvals, licenses, registrations or authorizations of any Governmental Authority necessary for the manufacturing, use, storage, import, transport, marketing and sale of Products in the Territory.
1.17“Marketing Authorization Holder” means, with respect to a Product, the Party that holds Manufacturing and Marketing Approval in the Territory.
1.18 “MHLW” means the Ministry of Health, Labor and Welfare who has authority to issue final approval of a new drug application and the marketing authorization for the Product.
1.19“NDA” means New Drug Application as defined by the MHLW as a request for permission to introduce, or deliver for introduction, a biologic product into commerce in Japan.
1.20 “Net Sales” is defined on Exhibit A hereto.
1.21“NHI” means the Japanese national health insurance system, or its successor system.
1.22 “XXX Xxxxx” means the reimbursement price of the maximum daily dose of the Product for purposes of the NHI.
1.23 “XXX Xxxxx Listing” means the listing of the XXX Xxxxx by Central Social Insurance Medical Council (Chuikyo) of the MHLW.
1.24“Person” means an individual, corporation, partnership, limited liability company, unincorporated syndicate, association or organization, trust, trustee, executor, administrator or other legal representative, governmental authority or agency, or any group of Persons acting in concert.
1.25 “PMDA” means the Japanese Pharmaceuticals and Medical Devices Agency, and local counterparts thereto, and any successor agency(ies) or authority thereto having substantially the same function.
1.26“Product(s)” means the commercial Cell Therapy product using human allogeneic cardiosphere-derived cells (“CDCs”) developed by Capricor and known as “CAP-1002”, used for the treatment of diseases and symptoms in humans for DMD.
1.27“Product Specifications” means specifications for the Product set forth in the Quality Agreement (as hereinafter defined).
1.28“Purchase Order(s)” means a formal offer to buy a specified number of units of Product at a specified price within a specified timeframe.
1.29“Regulations” means all laws, statutes, rules, regulations (including, without limitation, all health and safety legislation) of the Territory in which the Products are sold by Distributor.
1.30“Quality Agreement” means the agreement between Capricor and Distributor, which defines the responsibilities of each Party with respect to the practices to be followed to ensure Product quality and compliance with GMP, including, but not limited to, requirements for packaging, labeling and distributing the Products. The terms of the Quality Agreement shall be incorporated by reference into this Agreement.
1.31“Supply Price” means the price at which Capricor shall sell the Products to Distributor determined in accordance with the provisions set forth on Exhibit A.
1.32“Territory” means the country of Japan.
1.33“Trademarks” means the Trademarks of Capricor listed on Exhibit B, together with any further trademarks and trade names of which Capricor may become the proprietor or which Capricor may have the right to use on or in relation to the Products at any time during the term of this Agreement, and in each case which Capricor adds to Exhibit B in its sole discretion.
1.34“Transfer Price” means the price paid by Distributor to Capricor on the Delivery of the Product to the Distribution Warehouse (as hereinafter defined), as set forth on Exhibit A.
1.35 “Wholesaler” means a company or individual designated by Distributor to purchase or facilitate the distribution of Product to Distributor’s Customers.
2. PRODUCT DEVELOPMENT BY CAPRICOR
2.1 Obligations Regarding Preclinical Development. Capricor shall, at its responsibility and expense, conduct non-clinical studies required to apply for the Manufacturing and Marketing Approval of the Product for DMD in the Territory and shall complete any tests or studies necessary and/or desired to complete the preclinical development of the Product for DMD which Capricor, in its discretion, believes to be necessary to advance the clinical development of the Product and the ability to obtain regulatory approval thereof in the Territory. The costs and expense associated with preclinical tests or studies shall be the sole responsibility of Capricor.
2.2 Obligations Regarding Clinical Development of CAP-1002. After the execution of this Agreement, Capricor shall, at its responsibility and expense, have the obligation to engage with the PMDA to determine a clinical program (the “Clinical Program”) for CAP-1002 for the treatment of DMD in the Territory and use Commercially Reasonable Efforts to obtain Manufacturing and Marketing Approval for the Product in the Territory at its sole cost and expense. For such purpose Capricor shall (a) conduct clinical studies and (b) manufacture the Product for clinical purposes. The protocol for the Clinical Program will be determined by Capricor pursuant to guidance given by the PMDA. Capricor will keep Distributor advised as to the progress of the Clinical Program and Distributor may offer advice to Capricor in connection therewith. Notwithstanding the foregoing, all decisions with respect to the conduct of the Clinical Program will be made by Capricor including whether to submit an NDA based on the results of the Clinical Program. The costs and expense of the Clinical Program shall be the sole responsibility of Capricor. Capricor shall also be responsible for manufacturing, packaging, supplying and distributing any CAP-1002 Product required for the Clinical Program at its expense.
2.4 NDA Documents and Pre-approval Inspections. Capricor shall, at its responsibility and expense, prepare the NDA documents (CTD Module 1 to Module 5) required for application and approval review for the Manufacturing and Marketing Approval of the Product in the Territory, and apply for and deal with the GCP compliance inspection, data integrity assessment and GCTP compliance inspection which are to be conducted by the PMDA in the course of approval reviews for the Manufacturing and Marketing Approval of the Product. Capricor will keep Distributor advised as to any significant communications from the PMDA with respect thereto and Distributor may offer advice to Capricor in connection therewith.
2.6 Pharmacovigilance and Post-Marketing Surveillance. Capricor shall be responsible for conducting any safety surveillance related to pharmacovigilance and post-marketing surveillance, and shall maintain a global safety database, required for the Product in the Territory with such assistance from Distributor as may be reasonably requested by Capricor. Distributor will provide Capricor with ready access to all materials, data and other information on clinical use and related matters on a timely basis to enable compliance with all regulatory and quality requirements. Capricor shall be responsible for the out-of-pocket costs incurred by Distributor in connection therewith but shall not be required to reimburse Distributor for Distributor’s time or efforts by its employees or other representatives of Distributor in providing such information to Capricor. The details of each Party’s role in relation to the above-mentioned safety surveillance shall be separately set forth in a Post Marketing Surveillance Agreement and a Pharmacovigilance Agreement to be negotiated by the Parties.
2.7 Life Cycle Management. If Xxxxxxxx decides to develop the Product for any additional indications and/or any label extensions in the Territory or Distributor considers that such development is desirable, both Parties shall discuss such development. Should Capricor and Distributor agree on developing any such label extension for DMD indications in the Territory and on how to share the costs for such development, unless otherwise agreed by the Parties, Capricor will be responsible for conducting development and regulatory activities required to obtain approval thereof. If Xxxxxxxx decides to develop the Product for indications outside of DMD or Distributor considers that such development is desirable, both Parties shall discuss such matter and the details thereof.
2.8.1 Establishment of Committee. Within thirty (30) days after the Effective Date, Capricor and Distributor will assemble a Japanese Joint Steering Committee (the “J-JSC”). Initially, the J-JSC will be composed of at least two, but no more than four, representatives of each Party, with an equal number appointed by each of Capricor and Distributor. Each Party will provide a list of its representatives to the other Party within thirty (30) days after the Effective Date. Each Party will promptly notify the other Party in writing of any change in its appointed representatives. Each Party may invite its employees and its Affiliates’ employees and consultants to attend meetings of the J-JSC who are bound to obligations of confidentiality, non-use, and assignment of inventions similar to those of that Party’s members of the J-JSC.
2.8.2 Meetings. The J-JSC will hold its first meeting within ninety (90) days of the Effective Date. While in existence, the J-JSC will meet at least on a quarterly basis by audio or video teleconference or in person, to be agreed by the Parties. After Manufacturing and Marketing Approval is obtained for the Product, the J-JSC will meet at least on a quarterly basis by audio or video teleconference or in person, to be agreed by the Parties. Each Party will bear its own costs relating to any J-JSC meeting. The Parties will endeavour to schedule meetings of the J-JSC at least two (2) months in advance or as necessary to resolve any matters requiring a joint decision. All meetings of the J-JSC shall be conducted in the English language.
2.8.3 Responsibilities. The duties of the J-JSC will include, but not be limited to, reviewing the progress of the Clinical Program, discussing the application for the Manufacturing and Marketing Approval and making determinations as to forecasts, a pricing strategy, Minimum Sales Requirements (as hereinafter defined), monetary disputes and such other matters that may require the joint decision of the Parties, in each case, subject to the applicable provisions set forth in this Agreement. Distributor shall have the right to render advice to Capricor with respect to the Clinical Program and Capricor will give good faith consideration to Distributor’s suggestions provided on a timely basis, but all final decisions with respect to the conduct and operations of the Clinical Program shall be made by Xxxxxxxx and all final decisions with respect to the marketing, promotion and pricing of the Product in the Territory shall be made by Distributor, provided such decisions are made in accordance with this Agreement (including Section 5.8), applicable law and Regulations.
3.PAYMENTS TO CAPRICOR FOR PRODUCT DEVELOPMENT
3.1 Upfront Payment. In consideration of the costs and expenses incurred and to be incurred by Capricor in connection with all pre-clinical, clinical, CMC and commercial development of the Product, Distributor shall pay to Capricor Twelve Million U.S. Dollars (US$12,000,000) upon the execution of this
Agreement (the “Upfront Payment”), provided that such payment shall be made by Distributor [***] from Distributor’s receipt of the invoice thereof from Capricor. The payment made to Capricor specified in this Section 3.1 shall be non-refundable and non-creditable.
3.2 Product Development Milestones. In addition to the payment set forth in Section 3.1 above, Distributor shall pay to Capricor [***] of the milestone payment and documents evidencing the achievement of the relevant milestone, the following amounts:
3.2.1 [***];
3.2.2 [***]; and
3.2.3 [***].
4.1Appointment.
4.1.1Subject to the terms and conditions set forth herein, Capricor hereby appoints Distributor, and Distributor hereby accepts such appointment, to serve during the term of this Agreement as Capricor’s exclusive distributor (even as to Capricor, subject further to Section 4.1.2) of the Product in the Territory (subject to Section 4.4), including, without limitation, having the right to sell, have sold, promote, market, advertise, commercialize, and import the Product in the Territory. Except as may be permitted under Section 4.2 hereof, Distributor shall only distribute the Products directly to Wholesalers located in and for use exclusively in the Territory. Distributor shall be entitled to describe itself as Capricor’s “Authorized Distributor” solely for the Products in the Territory. Distributor is not authorized to, and shall not, do business in Capricor’s name or hold itself out as Capricor’s sales agent (but rather as an authorized distributor) of the Products or as being entitled to bind or obligate Capricor in any way.
4.1.2For so long as this Agreement is in full force and effect and Distributor is not in breach or default hereunder, which breach or default has not been cured pursuant to Section 15.2.1 of this Agreement, Capricor shall not sell nor appoint any other distributors to sell the Product in the Territory, without the written consent of Distributor; provided, that Capricor shall have the right (directly and/or through its distributors) to:
(a) distribute Products to customers within the Territory other than through Distributor if and to the extent Distributor is unable to so distribute the Products due to (a) regulatory requirements; (b) Distributor's failure to meet its Minimum Sales Requirements, subject to Section 5.2; or (c) Distributor being otherwise prohibited or prevented from selling and/or distributing the Products or refusing or being unable to sell and/or distribute the Products to any Customer or class of Customers other than by Customer’s decision; and
(b) subject to Section 2.7, sell and distribute CAP-1002 through relationships that do not include Distributor for indications other than for DMD; provided that Capricor shall clearly indicate to any third parties to whom Capricor intends to sell Products, that Distributor is Capricor’s “Authorized Distributor” for the Products in the Territory for the DMD indication and Capricor shall promptly forward all inquiries regarding purchase of the Product in the Territory received by Capricor for use in the DMD indication to Distributor.
4.1.3 If the Parties agree to expand the grant of rights to Distributor to cover indications other than DMD, the terms of such expansion shall be set forth in an addendum to this Agreement which will set forth the responsibilities of the respective Parties, remuneration to Capricor, sales and other milestones, and other matters to be agreed upon by the Parties.
4.1.4 This Agreement shall in no way limit the right of Capricor, its Affiliates, sublicensees, distributors or other appointees to market, sell or otherwise distribute the Product outside the Territory, excluding the U.S. for so long as the US Agreement (as defined below) is in force and effect.
4.1.5 If during the term of this Agreement, both Parties concur that any patent rights held by third parties would be infringed by the sale of Product in the Territory pursuant to this Agreement, Capricor shall use Commercially Reasonable Efforts to acquire such rights at its sole responsibility and expense.
4.2Subdistributors. Distributor shall not, without the prior written consent of Capricor, which consent shall not be unreasonably withheld, appoint any subdistributors or agents (including the replacing of any previously approved subdistributors) to promote, market, sell and distribute the Product within the Territory. For the avoidance of doubt, subdistributors shall not include Wholesalers which purchase the Product from Distributor. In addition, notwithstanding Capricor’s consent to any subdistributor, Distributor shall at all times remain fully liable for the acts or omissions of its subdistributors and/or agents as if such act or omission was undertaken directly by Distributor, and Distributor hereby agrees to indemnify and hold harmless Capricor from any and all damages, losses, liabilities or expenses (including reasonable attorneys’ fees and costs) arising from the promotion and distribution of the Product in any manner from any act or omission on the part of Distributor’s subdistributors or agents. In addition, any subdistributors permitted to be appointed pursuant to the terms and conditions of this Agreement shall comply with all applicable obligations under this Agreement to the same extent as Distributor. Without amending or limiting Distributor’s obligations in this Section 4.2 or elsewhere in this Agreement, (including in respect of any nonperformance or omissions by any approved subdistributor), with respect to Article 4, 5, 6, 7, 8, 9, 12 and 15 and Exhibit A and Exhibit D, Distributor may cause any such subdistributor to perform and exercise Distributor’s obligations and rights in whole or part. For the avoidance of doubt, subdistributor shall, in addition to Distributor, be responsible for any breach of Distributor’s obligations under this Agreement assumed by subdistributor, and any action or claim by Xxxxxxxx in respect of any breach, act, error or omission hereunder by Distributor or subdistributor may be brought against either Distributor or subdistributor, and each of Distributor and subdistributor shall be jointly and severally liable hereunder.
Distributor and Distributor’s U.S. subsidiary, NS Pharma, Inc. pursuant to that certain Commercialization and Distribution Agreement between the Parties dated January 24, 2022 (the “U.S. Agreement”).
4.4.1 market or promote any product or accept orders through agents or otherwise, to or from any Customer or any Affiliate of any Customer for any Competing Product in the Territory; or
4.4.2 develop or manufacture any Competing Product in the Territory.
4.5Independent Contractors. The relationship of Distributor to Capricor established by this Agreement is that of an independent contractor, and nothing contained in this Agreement shall be construed so that Distributor will be deemed to be an employee, agent, joint venturer, co-owner or otherwise a participant in a common undertaking. Each Party shall be solely responsible for its own financial obligations associated with its respective business. Neither Party shall have, nor represent itself as having, any right or authority to obligate or bind the other in any manner whatsoever.
4.6 Reservation of Rights. Except as expressly provided in this Article 4, no right, title, license or interest is granted, whether express or implied, by Capricor to Distributor, and nothing in this Agreement shall be deemed to grant to Distributor rights in any products or technology other than the Products (and with respect to the Products solely as set forth herein), nor shall any provision of this Agreement be deemed to restrict Capricor’s right to exploit the technology or other intellectual property rights relating to the Products in products other than the Products. Notwithstanding the foregoing, the Parties acknowledge that Xxxxxxxx has agreed to discuss label extensions and additional indications with Distributor in accordance with Section 2.7. Distributor acknowledges and agrees that Xxxxxxxx has and retains the right to appoint other authorized distributors, licensees or resellers of the Products outside the Territory without restriction and without any obligations to Distributor, except as set forth in the U.S. Agreement.
4.7 Wholesalers. The Parties acknowledge that a Wholesaler performs its activity independently from Distributor and Distributor shall not be responsible for Wholesaler’s performance. All sales and other agreements between Distributor and a Wholesaler are Distributor’s exclusive responsibility, provided, however, that Distributor shall select a Wholesaler with an experience of handling a cell therapy product.
5.GENERAL OBLIGATIONS OF DISTRIBUTOR
5.1Forecasts. At least ninety (90) days prior to the anticipated approval of the NDA, the J-JSC shall meet to decide upon a twelve (12) month unit forecast indicating Distributor’s intended purchases of Products during each month of such period as well as such other information as Capricor may reasonably request in the format reasonably specified by Capricor from time to time. The intended purchase amounts of the Product will be specified by Distributor on a unit basis (not on a lot basis) in such forecast. Such forecasts shall be updated by Distributor on a rolling quarterly basis for each new twelve (12) month period following the preceding quarter, which updated forecast must be received by Capricor
no later than the last day of the second month of the applicable quarter during the term of this Agreement. Such rolling forecasts shall be used for the purpose of meeting the lead times required by Capricor. The first three months of this initial forecast and the first three months of each subsequent updated 12-month forecast delivered hereunder shall be binding on the Parties upon the Parties’ agreement thereon and shall be covered by a firm Purchase Order for a quantity of Products not less than that forecasted for such quarterly period, provided that any forecast shall be non-binding until the PMDA’s approval of a package insert of the Product for DMD and after such approval, the Parties shall discuss a 12-month forecast and agree on the first three months of the forecast. Capricor may, in its discretion, reject Purchase Orders calling for quantities exceeding forecasted quantities in such binding first three months of the forecast but shall be under no obligation to do so. If the Parties are unable to agree on the first three months of the forecast herein, such forecast shall be determined by Expert Determination pursuant to the procedure set forth in Section 17.3.2 below. The cost of such Expert Determination shall be borne equally by the Parties.
5.2Sales. Distributor shall use its Commercially Reasonable Efforts to achieve the First Commercial Sale of the Product as promptly as practicable following the XXX Xxxxx Listing of the Product and notification by Capricor that the Products are ready for Delivery, and to make sales of the Products to Wholesalers in the Territory. For clarification, Xxxxxxxx agrees that (a) Distributor has the right to choose to whom it sells the Products in its sole discretion so long as such sale is to a Wholesaler (as defined in Section 1.35), and (b) Distributor may refuse a Wholesaler’s order in its sole discretion. Distributor shall not sell any expired Products, and Capricor shall not have any responsibility under this Agreement with respect to any such expired Products, including, without limitation, any obligation to repurchase or replenish expired Products.
5.2.2 Shortfall in Minimum Sales. Distributor shall notify Capricor within thirty (30) days following the end of each calendar year whether it has achieved the Minimum Sales Requirements for that year and shall include a reasonably detailed calculation of any shortfall in sales of Products. [***].
5.2.3 Failure to Meet Minimum Sales Requirements.
(a) Initial 24-Month Period. [***].
(b) Subsequent 12-Month Periods. Following the end of initial 24-month period, the Minimum Sales Requirements shall be determined no later than the last day of September in the preceding year of each calendar year for which such Minimum Sales Requirements shall be applicable. If Distributor fails to meet its Minimum Sales Requirements for any such calendar year, [***].
(c) Continuous Failure to Meet Minimum Sales Requirements. If Distributor fails to meet its Minimum Sales Requirements for [***] during the term of this Agreement, [***].
5.2.4 Payment of Sales Milestones. Upon reaching the Sales Milestones set forth in Exhibit C, Distributor shall pay to Capricor those amounts set forth on said Exhibit C, attached hereto. Distributor shall notify Capricor within [***] of achieving each applicable Sales Milestone and Distributor shall pay Capricor the respective accrued and payable Sales Milestones [***] from Capricor with respect thereto. For purposes of calculating the Sales Milestones, the Net Sales shall be calculated based on the quarterly gross sales of the Product by Distributor, subdistributors, Wholsagents or other Persons during the term of this Agreement. If Distributor achieves more than one Sales Milestone in a given calendar year, each Sales Milestone amount [***].
5.3Customer Training. Distributor shall train its Customers with respect to the use, handling, storage and administration of the Products sold in the Territory pursuant to the instructions for use accompanying the Products.
5.4 Market Access, Pricing, Marketing and Promotion of the Products. Distributor shall at its own expense, be responsible for market access, patient advocacy, and patient support in the Territory, and shall at its own expense, vigorously promote the sale of the Product in a manner that preserves the existing goodwill and promotes the good image of the Product and of Capricor in the Territory following the Manufacturing and Marketing Approval for the Product. Such promotion shall include, without limitation, distributing promotional and marketing materials in the Territory, detailing the Product on the Product website, and advertising the Product as permitted by the applicable Regulations within the Territory to the extent determined by Distributor. Upon Capricor’s request, Distributor shall provide assistance and support to Capricor or the DMAH in its dealings with the MHLW to obtain the XXX Xxxxx for the Product in the Territory.
5.4.1 Promotional Materials. Distributor shall discuss with Capricor the contents of any promotional or marketing literature or materials to be presented to a third party for promotion or marketing of the Product (“Promotional Materials”) created by Distributor for the Products prior to their use or distribution in the Territory. Such Promotional Materials must be consistent with Capricor’s approved indications for use and guidelines for the Products and all Regulations and related requirements and must be approved by Capricor. Capricor shall not unreasonably withhold or delay such approval. If Capricor fails to make comments on the Promotional Materials within fourteen (14) days after the submission by Distributor, it shall be deemed that Capricor has approved such Promotional Materials. Capricor shall allocate an adequate sales and marketing staff to discuss with Distributor regarding the contents of such Promotional Materials. Distributor may use any marketing materials which may be provided by Capricor. Capricor will own all right, title, and interest in all Promotional Materials, provided that Capricor shall not own any right, title, and interest related to Distributor’s pharmaceutical products other than those related only to the Products. Distributor hereby irrevocably transfers, conveys and assigns to Capricor in perpetuity all right, title, and interest in such Promotional Materials, including all copyrights, the right to make derivative works and collective works with respect thereto. For clarification, Distributor shall have a non-exclusive right to use such Promotional Materials and with respect thereto solely in the performance of its obligations hereunder during the term of this Agreement.
5.5.1to comply with all quality requirements as set forth in a quality agreement to be prepared and executed by the Parties (“Quality Agreement”);
5.5.2 to respond in a timely fashion, to inquiries from Customers, including complaints and reports of adverse events and other Product incidences necessary for Capricor to perform its obligations of the Marketing Authorization Holder imposed by the PMDA in accordance with the Quality Agreement and Pharmacovigilance Agreement in which the details of handling of pharmacovigilance related information and quality related information will be set forth;
5.5.3to investigate diligently all leads with respect to potential Customers in the Territory referred to it by any source, including Capricor, and to provide adequate contact with existing and potential Customers within the Territory on a regular basis, consistent with good business practices;
5.5.4to permit, upon reasonable notice, (a) Capricor personnel and/or (b) individuals designated by Capricor and bound to a duty of confidentiality by written agreement with Capricor, to visit Distributor’s place of business and Distribution Warehouse (as hereinafter defined) and inspect its inventories, records, and other relevant documents pertaining to the Products and/or Distributor’s performance of its obligations under this Agreement, which inspections shall be limited to records relating to GMP, GDP, inventory management and product traceability for the sole purpose of ensuring compliance by Distributor with the terms and conditions of this Agreement; and
5.5.5to maintain an adequate staff of trained and qualified sales and medical affairs personnel dedicated to the Product and, upon the request of Capricor, to make such personnel available for orientation and training with respect to the selling, use and handling of the Products.
5.5.6 Distributor shall establish a distribution warehouse (the “Distribution Warehouse”) whereat it will receive all Products purchased from Capricor. The Distribution Warehouse will have the storage capabilities designed to hold the Products in accordance with the specifications set therefor in accordance with the Quality Agreement. Once Product is delivered to the Distribution Warehouse, Distributor shall bear the risk of loss thereof. Except as otherwise agreed, Distributor will adhere to existing receiving, storage, and shipping practices including such practices applicable to time/temperature-sensitive requirements set forth in the Quality Agreement and Distributor will be responsible for the management of the Distribution Warehouse at its own cost and expense.
5.6Shipments to Wholesalers. Distributor shall, at its discretion, by itself, or shall cause its subdistributor to (a) establish a supply-chain necessary to be able to distribute the Products from the Distribution Warehouse to Wholesaler; and (b) upon receipt of an order from a Wholesaler, deliver the Product to the Wholesaler at appropriate times. The cost of shipping and transportation of the Product from the Distribution Warehouse to each Wholesaler shall be borne solely by Distributor and Distributor shall be responsible for freight claims and resolving any disputes with Wholesalers regarding product deliveries, shortages and overages. Distributor shall also be liable for any accident or unexpected incident occurring within the scope of Distributor’s obligations herein (e.g. temperature deviations, damage to containers, accidents etc.). Distributor shall ensure that distribution of the Products in the Territory, including shipment, is performed in accordance with GMP, GDP and the Quality Agreement.
5.7.1Credit and Collection. Distributor shall be responsible for all collection and credit approval processes for all invoices. Distributor shall have the sole authority to issue credits and resolve Wholesaler issues. Distributor shall communicate with Capricor regarding same if there are recurring problems that may affect Capricor’s responsibilities.
5.7.2Product Complaints. Customer complaints will be logged by Distributor in accordance with the Quality Agreement and forwarded to Capricor’s Vice President of Regulatory Affairs (or such person's designee) at a frequency to be agreed upon by the Parties or otherwise required by the Regulations. Such complaints may be escalated for resolution per applicable regulatory procedures.
5.8 Pricing/Billing. Within [***] after the filing of the NDA, the J-JSC shall meet to discuss (i) a pricing strategy of the Product and (ii) the suggested wholesale price at which Distributor will be selling the Product to its Wholesalers (“Wholesale Price”) based on a projected drug price of the Product in the XXX Xxxxx list, provided that Distributor is not bound by such discussion at the J-JSC and shall be ultimately free to determine the Wholesale Price so as not to violate Japanese anti-trust laws. Capricor shall be responsible for applying for the NHI pricing of the Product in the Territory through close consultation with Distributor. Capricor shall advise and shall keep Distributor informed on the status of the discussion with the MHLW on application for the XXX Xxxxx Listing for the Product in the Territory, including any material discussions with any Governmental Authority with respect thereto and the price proposed by the MHLW. If requested by Distributor, Capricor shall allow Distributor to attend any discussion with the MHLW or any other Governmental Authority to the extent that the MHLW and any other Governmental Authority do not have any objection to Distributor’s attendance. Capricor and Distributor shall use Commercially Reasonable Efforts to pursue a drug price of the Product in the XXX Xxxxx list that maximizes the revenue for the Product in the Territory. As soon as reasonably practicable but within ten (10) business days after MHLW notifies Capricor of a projected drug price of the Product in the XXX Xxxxx list, whether officially or unofficially, the J-JSC shall meet and discuss (i) whether Capricor should accept such projected drug price and (ii) whether to list the Product in the XXX Xxxxx List. The Parties shall invite an expert consultant to participate in the J-JSC meeting to assist the Parties in making their determination. Such consultant shall have the qualifications and be subject to the requirements and appointment process of a Presiding Expert described in Section 17.3.2 (b), and shall provide advice to the Parties taking into due consideration the commercial viability of the business on the Product for both Parties. Such advice shall include, if advisable, a proposal for adequate revisions of Exhibit A with respect to the Supply Price. If the Parties fail to come to an agreement on either of (i) pricing strategy of the Product, (ii) whether to list the product in the XXX Xxxxx List or (iii) whether to accept the notified projected drug price within thirty (30) business days after the holding of the J-JSC meeting mentioned above, then the Parties shall refer the matter for Expert Determination pursuant to Section 17.3.2. Notwithstanding the provisions of Section 17.3.2 (g), the Presiding Expert’s decision shall be at first non-binding. Such non-binding decision shall take into due consideration the commercial viability of the business on the Product for both Parties, and shall include, if advisable, a proposal for adequate revisions of Exhibit A with respect to the Supply Price. After receipt of the non-binding decision from such Presiding Expert, the Parties will discuss in good faith the implications thereof with respect to subsections (i), (ii) and (iii) above for up to thirty (30) days. Should the Parties not be able to agree on the commercial viability of the decision of the Presiding Expert for both Parties and on the path forward with regards to the XXX Xxxxx Listing, then the Parties agree that the non-binding decision of the Presiding Expert will become binding. Neither Party shall implement any of (i), (ii)
or (iii) above until the Parties agree upon the same or the decision of the Presiding Expert becomes binding.
5.9.1 Distributor shall comply fully with all Regulations as they relate to the Products in the Territory, including the storage, promotion and sale of the Products. Distributor shall monitor the appropriate information sources closely for changes in such Regulations and other requirements in the Territory and will notify Capricor promptly in writing of any and all such changes.
5.9.2 Without limiting the foregoing provisions of this Section 5.9, subject to the obligation of the DMAH appointed by Capricor in the Territory to comply with all Regulations which apply to such DMAH, Distributor shall comply with all necessary government and regulatory requirements regarding the marketing, and distribution of Products in the Territory. These include, but are not limited to, specific requirements for traceability, vigilance, complaint reporting and handling. Distributor shall not sell or distribute Products in the Territory until such time as all regulatory/marketing licenses and approvals required by the specific Regulations of the Territory have been obtained. Distributor shall allow Capricor or a Capricor-authorized party to assess, periodically, Distributor’s compliance with the aforementioned standards.
5.10Representations. Neither Distributor nor any of its agents, employees, representatives, or subdistributors shall (i) market or promote the Product for uses other than the indications and protocols approved by the MHLW (i.e., no “off-label” promotion), (ii) make any false or misleading representations to Customers or others regarding Distributor, Capricor or the Products, or (iii) make any representations, warranties or guarantees with respect to the specifications, features or capabilities of the Product that are not consistent with Capricor’s documentation accompanying the Product or Capricor’s literature describing the Product. Neither Distributor, nor any of its agents, employees, representatives, or subdistributors may change, extend, or alter any representation or obligation which is binding upon Capricor or its Affiliates.
5.11Governmental Requirements; Regulatory Affairs. Except as otherwise provided herein, Distributor shall be responsible for compliance with all requirements established by Governmental Authorities within the Territory applicable to its activities under this Agreement. Distributor shall provide Capricor with all reasonably required support to enable it to comply with any local regulatory law and requirements including, but not limited to, assisting and executing all documents necessary to satisfy all regulatory requirements in the Territory where the Products are distributed under this Agreement, whenever it is mandatory or necessary to register the Product.
employees, representatives and subdistributors under this Agreement. [***]. Such policies shall not be cancellable without thirty (30) days prior written notice to Capricor. Capricor shall have the option to be designated as an additional named insured under each such policy and shall be provided with a certificate of insurance within thirty (30) days after the issuance of such policy and each renewal thereof. All policies of insurance maintained by Distributor under this Section 5.13 shall be taken out with insurance companies holding a Financial Strength Rating of at least “A-VII”, as set forth in the most current issue of Best’s Insurance Reports.
5.14Translation. If requested by Capricor in writing, Distributor shall initiate the translation of all user and technical manuals, advertising and marketing information provided by Capricor into the languages of its Customers in the Territory and provide Capricor with advance copies of all such materials for written approval by Capricor (which approval shall not be unreasonably withheld). Any translations in the possession of Capricor as of the Effective Date shall be offered to Distributor free of charge. Capricor shall own all such translations and all related intellectual property rights in and to such translations, and Distributor hereby assigns to Capricor all right, title and interest it may have therein and thereto; provided, however that Distributor shall have a non-exclusive right to use such translations solely in the performance of its obligations hereunder during the term of this Agreement.
5.15Tracking of Products. Distributor shall keep adequate records to enable the tracking of the Products sold as more particularly set forth in the Quality Agreement (collectively, “Traceability Information”). During the term of this Agreement and for a period of at least that time required by applicable Regulations (but in no case for less than ten (10) years following termination or expiration of this Agreement), subject to the compliance of the DMAH with the Regulations applicable to the DMAH, Distributor shall comply with all applicable information security and privacy legal requirements with respect to the collection, storage and processing of Traceability Information, including privacy notice requirements and data subject rights under applicable Regulations, and Distributor shall be solely responsible for the protection and security of Traceability Information while under its or any third party agent’s control, including with respect to any data security incidents that may affect such data. Distributor shall keep complete and accurate historical records of the information described in this Section 5.15. Capricor shall have the right, at any time upon no less than seven (7) days’ notice, to verify that such records are being properly maintained by Distributor and to receive copies of such records upon Xxxxxxxx’s request. The requirements of this Section 5.15 shall survive the termination or expiration of this Agreement for the duration of Distributor’s collection and storage obligations. In the event at the expiration of the tenth year following the termination or expiration of this Agreement (or such longer period if required by applicable Regulation), Distributor does not want to retain such records, Distributor may notify Capricor of its intention to destroy such records, and upon Xxxxxxxx’s election, shall deliver such records to Capricor for its retention thereafter.
5.16 Sales Reports. No later than thirty (30) days after the end of each month during the term of this Agreement, Distributor shall provide Capricor with a comprehensive monthly sales report (the “Monthly Sales Report”) summarizing the sales of the Product during the preceding month. Such Monthly Sales Report shall include, at a minimum, the following: (a) the total number of units sold to Wholesalers (whether by Distributor, its Affiliates (and its or their subdistributors)); (b) gross revenue in U.S. Dollars, (c) the selling price in U.S. Dollars; (d) any deductions from gross revenue or average selling price taken with respect to such Product to arrive at Net Sales (with reasonable supporting detail provided to enable Capricor to affirm and verify such deductions) of Product during such period; and (e) the approximate
figure of the aggregate Supply Price that has accrued and is payable with respect to Product sales during such period.
5.17Record Retention. During the term of this Agreement and for a period of at least ten (10) years following the termination or expiration hereof, Distributor shall keep complete and accurate historical records of the sales information described in this Section 5.17. Within thirty (30) days after completion of Distributor’s annual audit, Distributor shall have its independent auditors confirm in writing to Capricor that the sales reports delivered to Capricor by Distributor are consistent with the findings of the annual audit. Nothing contained in this Section shall reduce the obligations of Distributor set forth in Section 5.16 above.
6.GENERAL OBLIGATIONS OF CAPRICOR
6.2 Information. Capricor shall provide Distributor with (a) technical information concerning the Products, (b) limited quantities of Capricor’s instructional materials, sales literature, if any, and (c) available clinical, preclinical, CMC, data and other Product data that Capricor has or obtains during the term of this Agreement, with all such information, materials and data printed in the English language unless the PMDA requires that any of such materials be provided in the Japanese language. If so required, the cost of the translations shall be borne by Capricor. The costs of any translations not required by the PMDA shall be the responsibility of Distributor.
6.4 Package Insert, Medication Guide for Patients, Interview Form. Capricor shall, at its responsibility and expense, prepare and revise a package insert (in electronic form), medication guides
for patients and interview form for the Products. The package insert (in electronic form), medication guides for patients and interview form for the Products shall be reviewed and approved by Distributor before they are issued or revised, which approval shall not be unreasonably withheld. Capricor and Distributor shall cooperate as needed in the preparation of such package insert (in electronic form), medication guides for patients and interview form for the Products. For clarification, Capricor shall bear the out of pocket costs and expenses incurred by Distributor’s cooperation.
6.5 Product Labelling. Capricor shall provide labelling for the Products which is compliant with the Regulations. If Distributor requests that Capricor label a serial barcode and/or packaging of the Product in Japanese, Capricor shall cooperate with respect to such requests and discuss in good faith with Distributor how to meet such requests. Any costs for labelling a serial barcode and packaging in Japanese (including but not limited to the procurement of materials) shall be borne by Capricor. Distributor will prepare a serial barcode and information such as a drawing for packaging in Japanese at its expense.
6.6.1 NDA Approval. As soon as reasonably practicable, Capricor shall use Commercially Reasonable Efforts to obtain the Manufacturing and Marketing Approval for the Product in the Territory at its own expense including appointing, at its discretion, a DMAH. Capricor shall provide Distributor with notice and a copy of the NDA related to the Product promptly after receipt thereof.
patient damages for bodily injury that are a direct result of the use of the Products in accordance with the instructions for use. Distributor shall have the option to be designated as an additional named insured under each such policy and shall be provided with a certificate of insurance within thirty (30) days after the issuance of such policy and each renewal thereof. All policies of insurance maintained by Capricor under this Section 6.7 shall be taken out with insurance companies holding a Financial Strength Rating of at least “A-VII”, as set forth in the most current issue of Best’s Insurance Reports.
6.9 Customer Leads. During the term of this Agreement, Capricor shall refer to Distributor any request it receives either directly or via its Affiliates for the purchase of Products in the Territory.
6.11 Decision of Release. Capricor shall, at its responsibility and expense, (i) release the Product at its manufacturing site and (ii) release the Product for market, and then shall supply the Product to Distributor.
6.12 Transportation. Capricor shall transport into the Territory (including through customs clearance) the Product, which have been manufactured and packaged at Capricor’s or its contractor’s manufacturing facility and of which Capricor has confirmed quality assurance. Following the decision of release as provided in Section 6.11, Capricor shall, at its responsibility and expense, transport the Product to the Distribution Warehouse where Distributor shall transfer it to an ultra-low-temperature unit (such as a deep freezer etc.). Capricor shall properly handle the Product in accordance with any applicable regulations in the Territory including GDP in transportation to the Distribution Warehouse including, but not limited to, monitoring the temperature etc. Capricor shall bear any costs for transportation from the manufacturing facility to the Distribution Warehouse. Capricor shall be liable for any accident or unexpected incident occurring within the scope of Capricor’s obligations herein (temperature deviation, damage to containers, accidents during handling liquid nitrogen etc.) until delivery to the Distribution Warehouse. The title of the Product shall be transferred from Capricor to Distributor at the time when the Product has been delivered from Capricor to Distributor at the Distribution Warehouse. Any costs incurred until the title of the Product is transferred to Distributor, including costs for transportation from the manufacturing facility of Product to the Distribution Warehouse shall be borne by Capricor.
6.13 Patent Management. Capricor shall be responsible for maintaining and managing its patents that cover the sale of the Product in the Territory at Capricor’s expense and responsibility. For the avoidance of doubt, even if Capricor pays royalties or license fees to any third party in connection with the sale of Products in the Territory, Distributor shall have no responsibility for the payment of any such royalties or license fees. Distributor shall promptly notify Capricor if it learns of any use by any third party of the use of Capricor’s patents which may constitute an infringement thereof. Capricor shall have the right in its sole discretion to institute any proceedings against such third party infringers. Distributor agrees to cooperate fully with Capricor in any action taken by Capricor against such third parties, provided that all expenses of such action shall be borne by Capricor and all damages which may be awarded or agreed upon in settlement of such action shall accrue to Capricor.
7.2 Delivery. All Products delivered pursuant to the terms and conditions of this Agreement shall be suitably packed for shipment in Capricor’s designated shipping containers, marked for shipment to the Distribution Warehouse at the address specified by Distributor. All freight, insurance, all applicable taxes, import duties, customs fees, similar charges and other shipping expenses for shipments to the Distribution Warehouse, as well as any special packing expense, shall be paid by Capricor pursuant to the DDP (Delivered Duty Paid) the Distribution Warehouse, INCOTERMS 2020 (Distributor’s receipt of the Product at the Distribution Warehouse shall be hereinafter referred to as “Delivery” with a correlative meaning for “Deliver” and “Delivered”). Distributor shall bear all applicable taxes, duties, customs fees and similar charges that may be assessed against the Products following Delivery.
7.3 Purchase Orders. Pursuant to this Agreement, Distributor will submit written purchase orders (“Purchase Orders”) for the Products consistent with the binding first three months of the forecasts set forth in Article 5. For clarity, the amount of the Product will be specified in Purchase Orders and purchased by Distributor on a unit basis (not on a lot basis). Except with respect to the quantity of Products ordered in accordance with the terms and conditions of this Agreement, no additional terms and conditions contained in a Purchase Order shall be binding on Capricor. Such Purchase Orders shall be subject to Capricor’s standard terms and conditions which may be established during the term of this Agreement and shall be agreed by Distributor when such standard terms and conditions are established or revised. If any issue that Capricor or Distributor considers needs to be addressed arises, such issue shall be discussed in good faith between the Parties prior to Distributor’s submission of Purchase Orders and the agreement between the Parties on such issue shall be documented and signed in accordance with Section 19.3.
7.4Acceptance of Purchase Orders.
7.4.1 No Purchase Order shall be binding upon Capricor until accepted by Capricor in writing, and Capricor shall have no liability to Distributor with respect to Purchase Orders that are not accepted if such Purchase Order is inconsistent with the binding first three months of the forecast set forth in Article 5. Within ten (10) days after receipt of a Purchase Order, Capricor shall notify Distributor of the acceptance or rejection of a Purchase Order and of the assigned date of Delivery (the “Delivery Date”) for accepted Purchase Orders. Partial acceptances by Capricor shall be permitted. Any portion of a Purchase Order that has not been rejected within such ten (10) day period shall be deemed to have been accepted by Capricor, and Capricor shall notify Distributor of the Delivery Date for the accepted Purchase Order immediately after such ten (10) day period. The Minimum Sales Requirements shall be reduced by an amount equal to any portion of a Purchase Order that has been rejected by Capricor without Due Cause (as hereinafter defined) for the year in which delivery for the rejected quantities was requested by Distributor. Notwithstanding the foregoing, no such reduction shall occur if the Purchase Order, or portion thereof, was rejected for Due Cause. For purposes hereof, the term “Due Cause” shall mean (a) the orders exceed the forecast; (b) the orders were placed during such period of time when Distributor is in arrears with respect to payments to be made pursuant to this Agreement; and (c) Distributor is in material default
of its obligations under this Agreement, which default has not been cured within the applicable cure periods set forth in Section 15.2.1 hereof.
7.4.2 No partial shipment of a Purchase Order shall constitute the acceptance of the entire Purchase Order. Capricor shall use Commercially Reasonable Efforts to deliver the Products at the times specified in its written acceptance of Distributor’s Purchase Orders; provided, however, that the failure to Deliver Products by the agreed upon Delivery Date (or Delivery in advance of such Delivery Date) shall not give Distributor any right of rescission with respect to this Agreement or any right to refuse Delivery. However, Distributor shall have the right to rescind the Purchase Order if Capricor has not completed a Delivery of the Products ordered within thirty (30) days after the accepted Delivery Date. In the event Capricor fails to Deliver the quantities which have been ordered by Distributor and accepted by Capricor within thirty (30) days after the scheduled Delivery Date therefor, the Minimum Sales Requirements for the month in which delivery was scheduled shall be reduced by the quantities accepted but not Delivered by the end of such thirty (30) day period.
8.PRICING AND TERMS OF PAYMENT
8.1 Transfer Prices and Supply Prices.
8.1.1Capricor shall supply the Products to Distributor at the Supply Price in U.S. Dollars determined in accordance with Exhibit A. Upon Delivery of the Products to Distributor, Distributor shall be obligated to pay to Capricor the Transfer Price for such Products as set forth on Exhibit A. Shipping charges and insurance associated with the shipment of the Products to the Distribution Warehouse shall be borne by Capricor.
8.1.2Payment of Transfer Prices. Payments of Transfer Prices to be made hereunder shall be due and sent to Capricor by wire [***] for all Products Delivered to Distributor in accordance with Section 7.2 during that month. Until payment for the Products is received by Capricor, there shall be no quantities applied to satisfy the Minimum Sales Requirements.
8.1.3Payment of Supply Prices. Distributor shall report to Capricor the approximate figure of the aggregate Supply Price that has accrued and is payable to Capricor during each monthly period (which amount shall correspond to the Monthly Sales Reports for such period) and revise such approximate figure to the definitive figure quarterly. Payments of Supply Prices accruing under this Agreement shall be due and sent to Capricor by wire transfer [***] upon receipt of an invoice from Capricor with respect thereto.
8.1.4Revisions of Conditions. Following XXX Xxxxx Listing of the Product, should MHLW subsequently decide to significantly reduce such XXX Xxxxx or the cost of the Product increases significantly such that the then current arrangement becomes economically unfeasible for one or both Parties, then both Parties shall discuss in good faith revisions of Exhibit A and the other terms and conditions of this Agreement. If the Parties are unable to agree on the revisions of Exhibit A and the other terms and conditions of this Agreement [***], then Distributor shall have the right to terminate this Agreement [***] written notice to Capricor.
8.2 Overdue Payments. For so long as any payment from Distributor to Capricor shall be overdue, Distributor shall pay (a) interest on the overdue amount at a rate which is [***] of the overdue amount from the date on which such amounts were originally due, or such lower rate as may be the
maximum legally permissible rate of interest under similar circumstances in the State of California. Such amounts shall automatically become due on all balances outstanding, and any payments received thereon shall be applied first to the payment of accrued interest.
8.3Taxes. Each Party shall be solely responsible for the payment of all taxes imposed on its share of income arising directly or indirectly from the activities of the Parties under this Agreement. Except as otherwise provided in this Agreement, Distributor agrees to pay, indemnify and hold Capricor harmless from any sales, use, excise, value-added, or similar tax or duty, and any withholding taxes or duties not based on Capricor’s net income (“Transfer Taxes”), and all government permit fees, license fees or similar fees (“Fees”) levied upon any deliverables under this Agreement or due to any payment to be made pursuant to this Agreement or the sale of the Products, and any governmental penalties for the non-payment of Transfer Taxes, interest, collection costs and withholding costs associated with any of the foregoing items (“Additional Costs”). Transfer Taxes, Fees and Additional Costs required to be paid by Distributor pursuant to this Section 8.3 are in addition to and may not be claimed as a reduction or offset against, any payment due to Capricor hereunder. For clarification, Distributor shall deduct the withholding taxes, if required by applicable laws and Regulations, from the amount paid to Capricor when Distributor pays the amount of the payment provided in this Agreement (including but not limited to the amount specified in Article 3 and Sales Milestones).
8.5Audit. Capricor shall have the right to audit Distributor’s books and records to the extent necessary to determine Distributor’s compliance with the terms and conditions of this Agreement. Capricor may use independent auditors who may participate fully in such audit. Such independent auditors shall enter into an agreement with the Parties hereto, on terms that are agreeable to both Parties hereto, under which such independent auditors shall agree to maintain the confidentiality of the information obtained during the course of such audit. Any such audit shall be conducted during regular business hours and in a manner that does not interfere unreasonably with the operations of Distributor. Capricor may perform such an audit one time in each twelve-month period during the term of this Agreement and one time within two (2) years following the expiration of the term; provided that Capricor may perform an additional audit at any time if the preceding audit reveals a failure to conform to the terms and conditions of this Agreement. Each audit shall begin upon the date specified by Capricor in a notice to Distributor a minimum of fifteen (15) days prior to the commencement of the audit and shall be performed diligently and in good faith and shall be completed within a reasonable period of time. If the results of the audit reveal an underpayment to Capricor of more than five percent (5%), then the costs of the audit shall be borne by Distributor.
9.ACCEPTANCE AND REJECTION OF PRODUCTS
9.1Acceptance and Rejection. Distributor shall inspect all shipments of the Products promptly upon Delivery thereof. In the event of any damage, visible defect, shortage or discrepancy in or
to a shipment of the Products, Distributor shall inspect all incoming shipments as soon as reasonably practicable and, no later than ten (10) days after the Delivery (the “Rejection Period”), promptly report the same to Capricor and furnish such written evidence or other documentation as Capricor may reasonably deem appropriate. Capricor shall not be liable for any such damage, visible defect, shortage, or discrepancy unless Capricor has received notice and substantiating evidence thereof from Distributor within the Rejection Period. Any Product not properly rejected within the Rejection Period shall be deemed accepted and any claims thereto, except for claims in relation to Latent Defects as provided in Section 9.4, shall be deemed waived. If any unit of a Product is shipped by Distributor to its Wholesaler/Customer prior to expiration of the Rejection Period, then that unit shall be deemed accepted upon shipment by Distributor. If the substantiating evidence delivered by Distributor reasonably demonstrates that the damage, visible defect, shortage or discrepancy in or to a shipment of the Products meets the criteria for rejection of the Product by Distributor, Capricor shall promptly deliver additional or substitute Products to Distributor in accordance with the delivery procedures set forth herein, but in no event shall Capricor be liable for any additional costs, expenses or damages incurred by Distributor, directly or indirectly, as a result of such damage, visible defect shortage or discrepancy in or to a shipment discovered in Distributor’s acceptance inspection provided above in this Section 9.1. Such criteria for rejection of the Product shall be specified in the Quality Agreement. Capricor shall not be liable for any such damage, visible defect, shortage, or discrepancy unless Capricor has received notice and such substantiating evidence thereof from Distributor within the Rejection Period.
9.3Title and Risk of Loss. Title and risk of loss of the Product will transfer from Capricor to Distributor upon Delivery of the Product to the Distribution Warehouse.
9.4Latent Defects. If Distributor becomes aware of any damage, defect or non-conformance to Product Specifications in or to the Products which was not discoverable at its visual inspection described in Section 9.1, Distributor shall promptly report such damage, defect or non-conformance to Capricor and furnish Capricor with such written evidence or other documentation. If the written evidence delivered by Distributor shall demonstrate that such damage, defect or non-conformance meet the criteria for the latent defect (“Latent Defect”), Capricor shall promptly deliver additional or substitute
Products to Distributor in accordance with the delivery procedures set forth in Section 9.1. The criteria for the Latent Defect shall be specified in the Quality Agreement.
10.WARRANTIES; LIMITATION OF LIABILITY
10.1.1The Product and its package are returned to Capricor (or destroyed at its instruction), at which time they become the sole property of Capricor; and
10.1.2The Product has not been altered, mishandled, improperly stored, reprocessed, misused, or subject to unusual physical stress, nor has it been subject to temperature incursions, and the tamper proof seal has not been removed.
10.2Disclaimer. THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES OF ANY KIND, WHETHER STATUTORY, WRITTEN, ORAL, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND MERCHANTABILITY. IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, TORT LIABILITY (INCLUDING NEGLIGENCE) OR OTHERWISE, SHALL CAPRICOR BE LIABLE TO DISTRIBUTOR FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
10.3Limitation of Liability. [***].
10.4 Capricor shall not be liable with respect to any Product labeling or package inserts provided or used by Distributor or for any noncompliance with the foregoing due to the handling or packaging of Products by Distributor in a manner inconsistent with Xxxxxxxx’s instructions.
10.5 Capricor’s warranty shall not apply to or cover any Product which Capricor can demonstrate has not been stored under the required conditions after Delivery of the Products, or to any Product that has in any way been affected by handling or distribution by anyone other than Capricor after Delivery of the Products, or any adulteration occurring after Delivery of the Products unless this has been directed by Capricor.
11.1.1 any tort claim (including any claim for personal injury, wrongful death or property damage) to the extent such claim arises from any negligent act or omission or willful misconduct by Distributor (or its employees, agents, subdistributors or contractors) in the course of its performance pursuant to this Agreement, including any misrepresentation concerning the characteristics or method of usage of Products or relating to the storage, handling or delivery of Products;
11.1.2 the creation, extension or alteration of any warranty, representation or obligation by Distributor or any of its agents, employees, representatives or subdistributors, which is inconsistent with the provisions of this Agreement;
11.1.3 any action taken or omitted to be taken by Distributor or Distributor’s agents, employees, representatives or subdistributors which is inconsistent with the provisions of this Agreement;
11.1.4 claims arising from the use of materials created or prepared by or on behalf of Distributor without obtaining the written approval of Capricor;
11.1.5any violation by Distributor, its agents, employees, representatives or subdistributors of any law, Regulation or order of any Governmental Authority in the Territory applicable to Distributor including, without limitation, any sale or import of the Products into any countries or regions outside the Territory (other than to the extent that any violation is caused by a breach of this Agreement by Capricor or any of its agents, employees, representatives or Affiliates or any negligence or intentional act or omission of any such persons or entities);
11.1.6any material breach by Distributor of this Agreement or any of the representations, warranties or covenants of Distributor contained in this Agreement; and
11.1.7 any actual or alleged patent, copyright or trademark infringement, or misappropriation or violation of any other proprietary right, arising out of Distributor's performance pursuant to this Agreement (but not arising out of or relating to any of the proprietary rights in the Products as delivered); provided that this Section 11.1 shall not apply to any Third-Party Claim or Expense to the extent that the Parties agree, or it is finally determined pursuant to Article 10 that the Third-Party Claim or Expense is within the scope of Capricor’s indemnity obligation set forth in Section 11.2 below. The "Capricor Indemnified Parties" shall mean and include (i) Capricor’s Affiliates (ii) the respective directors, officers, agents and employees of and counsel to Capricor and its Affiliates, (iii) each other Person, if any, controlling Capricor or any of its Affiliates, and (iv) the successors, assigns, heirs and personal representatives of any of the foregoing.
11.2.1any actual or alleged breach of any warranty (including written warranties included within the Product packaging) or obligation, if any, accompanying the Products, subject to the limitations provided in Section 10.3;
11.2.2the creation, extension or alteration of any warranty, representation or obligation by Capricor or any of its agents, employees or representatives which is inconsistent with the provisions of this Agreement;
11.2.3any action taken or omitted to be taken by Capricor or Capricor’s agents, employees or representatives which is inconsistent with the provisions of this Agreement;
11.2.4 claims arising from the use of materials created or prepared by or on behalf of Capricor;
11.2.5 death or bodily injury to patients on whom a Product was properly used in accordance with the instructions for use accompanying the Product; provided, however, that such indemnification shall not apply to the extent that such death or personal injury was caused by (a) any breach of this Agreement by Distributor; (b) any act of negligence, willful misconduct or intentional act or omission to act by Distributor, its agents, employees, representatives, subdistributors, Wholesalers, Customers and/or the hospital at which the Product was used, its employees, medical staff, contractors, agents and the medical personnel administering the Product; or (c) any material violation of any applicable Regulations by Distributor. Capricor will be entitled to offset from its indemnification obligation described herein all collateral sources, including amounts covered by third-party payers or any other source;
11.2.6any violation by Capricor of any Regulation, law or order of any Governmental Authority in the Territory applicable to Capricor (other than to the extent that any violation is caused by the breach of this Agreement by Distributor or any of its agents, employees, representatives, subdistributors or Affiliates or any negligence or intentional act or omission of any such persons or entities);
11.2.7any material breach by Capricor of this Agreement or any of the representations, warranties or covenants of Capricor contained in this Agreement; and
11.2.8 actual or alleged infringement or misappropriation alleged by third parties of patents, copyrights, trademarks, or other intellectual property rights by the using or selling of Product(s) (except to the extent arising from Distributor’s use or sale of the Product(s) in a manner not approved by Capricor);
provided that this Section 11.2 shall not apply to any Third-Party Claim or Expense to the extent that the Parties agree, or it is finally determined pursuant to Article 10 that the Third-Party Claim or Expense is within the scope of Distributor's indemnity obligation set forth in Section 11.1 above. The "Distributor Indemnified Parties" shall mean and include (i) Distributor's Affiliates, (ii) the respective directors, officers,
agents and employees of and counsel to Distributor and its Affiliates, (iii) each other Person, if any, controlling Distributor or any of its Affiliates, and (iv) the successors, assigns, heirs and personal representatives of any of the foregoing.
11.3Neither Party shall be liable to the other or to such other Party’s Indemnified Persons for any indirect, special, consequential, punitive or incidental damages resulting from any claim arising out of this Agreement, nor shall the foregoing indemnification obligations extend to any such damages.
11.4.1If any third party shall make any claim or commence any arbitration proceeding or suit against any one or more of Distributor’s Indemnified Parties or Capricor’s Indemnified Parties (“Indemnified Persons”) with respect to which an Indemnified Person intends to make any claim for indemnification against Capricor under Section 11.2 or against Distributor under Section 11.1 (as the case may be, the “Indemnitor”) such Indemnified Persons, (each an “Indemnitee”) shall promptly (but in no event more than thirty (30) days after learning of such Third-Party Claim) give written notice to the Indemnitor of such Third Party Claim, arbitration proceeding or suit and the following provisions shall apply. The Indemnitee shall provide the Indemnitor all information and documentation necessary to support and verify the losses so claimed and the Indemnitor and its representatives shall be given access to all books and records in the possession or control of the Indemnitee which the Indemnitor reasonably determines to be related to such Third-Party Claim. Indemnitee shall tender the defense thereof to the Indemnitor. Indemnitor shall have the right, but not the obligation, to assume sole control of the defense, settlement or disposition thereof, including, without limitation, the selection of defense counsel reasonably acceptable to Indemnitee. The Indemnitee will reasonably cooperate with the Indemnitor in the defense and settlement of all such Third-Party Claims at the Indemnitor’s request and expense. The Indemnitor will keep the Indemnitee advised concerning the relevant Third-Party Claim(s), and the Indemnitor shall not admit liability with respect thereto without the express prior written consent of the Indemnitee. A failure to promptly notify the Indemnitor of a claim shall serve to reduce the indemnity rights of the Indemnitee only to the extent that such delay or failure to promptly notify the Indemnitor actually prejudiced or damaged the Indemnitor’s defense of the claim. If the Indemnitor elects to assume any such defense, the Indemnitor shall not be liable for any legal or other expenses subsequently incurred directly by the Indemnitee in connection with such defense.
11.4.2 So long as the Indemnitor is conducting the defense of the Third Party Claim in accordance with this Article 11, (a) the Indemnitee will not consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnitor, and (ii) the Indemnitor will not consent to the entry of any judgment or enter into any settlement with respect to the Third-Party Claim without the prior written consent of the Indemnitee, which consent will not be unreasonably withheld or delayed; provided, however, that such consent of the Indemnitee will not be required if the judgment or settlement contains a full release of claims against the Indemnitee with no admission of liability or wrongdoing. Notwithstanding any other provision of this Section 11.4, if an Indemnitee withholds its consent to a bona fide settlement offer, where, but for such action, the Indemnitor could have settled such Third-Party Claim, the Indemnitor will be required to indemnify the Indemnitee only up to a maximum of the bona fide settlement offer for which the Indemnitor could have settled such Third-Party Claim.
11.4.3 If the Indemnitor does not assume and conduct the defense of any such Third Party Claim for which it is obligated to provide indemnification under Section 11.4.1 or Section 11.4.2 (as applicable), notwithstanding anything to the contrary in this Agreement, (a) the Indemnitee may defend against, consent to the entry of any judgment, or enter into any settlement in any manner the Indemnitee may deem reasonably appropriate and the Indemnitee need not consult with, or obtain any consent from, the Indemnitor, and (b) the Indemnitor shall remain liable to indemnify the Indemnitee for any damages, losses and expenses (including without limitation the attorney’s fee and arbitration costs) as provided in this Agreement.
12.1Safety Notifications. In case a Product is potentially deviating from Capricor’s Product Specifications, or under any other circumstance where such Product might cause, or already has caused, harm to a patient, user or other person, each Party shall notify the other Party in writing (“Safety Notification”), irrespective of the time or location of detection of the potentially faulty Product, as soon as the respective party gains knowledge of such. It is Capricor’s sole right and responsibility to file safety reports or vigilance reports to any legal authority for the Products in order to comply with the applicable Regulations in the Territory. Nothing in this Agreement shall prevent Distributor from complying with any applicable law or Regulation that requires Distributor to report medical incidents, provided that Distributor shall concurrently provide Capricor with a copy of any such reports. Safety Notifications and any other complaints with respect to the Product are to be promptly delivered to the following addresses:
NIPPON SHINYAKU, INC. | |
00000 Xxxx to the Cure Suite 000 Xxx Xxxxx, XX 00000 XXX Xxxx: Director of Regulatory Affairs General Counsel 8840 Xxxxxxxx Xxxx., 0xx Xxxxx Xxxxxxx Xxxxx, XX 00000 XXX | 14 Nishinosho-Monguchi-cho Kisshoin, Minami-ku, Kyoto 601-8550, Japan Attn: Head of Regulatory Affairs Supervision and Assurance Div. |
00.XXXXXXXX RIGHTS AND CONFIDENTIALITY
13.1Property Rights. Distributor agrees that Capricor and/or its Affiliates own all right, title, and interest in the Product and in all of Capricor’s patents, trademarks, trade names, inventions, copyrights, know-how, and trade secrets relating to the design, manufacture, operation and/or use of the
Products. The use by Distributor of any of these property rights is authorized only for the purposes set forth in this Agreement, and upon termination of this Agreement for any reason, such authorization shall cease.
13.2Transfer Conveys No Right to Manufacture or Copy. The Products are being transferred hereunder by Capricor subject in every case to the condition that such transfer does not convey any license, expressly or by implication, to manufacture, duplicate, modify or otherwise copy or reproduce the Product. Distributor shall take appropriate steps with its subdistributors, Wholesalers and Customers, as Capricor may request, to inform them of and assure compliance with the restrictions contained in this Section 13.2.
13.3Confidentiality.
13.3.1 Confidential Information. This Section 13.3 applies to all Confidential Information disclosed by a Party (the “Disclosing Party”) and/or its Affiliates to a receiving Party (the “Receiving Party”). “Confidential Information” means confidential and/or proprietary information of the Disclosing Party and its licensors and Affiliates, whether in written, printed, verbal or electronic form, including, without limitation: (a) research and development activities, preclinical study information, clinical trial information and data, results, product design details and specifications, manufacturing processes, CMC development, protocols, technology and know-how, regulatory processes and information, sales and marketing plans, finances and business forecasts, procurement requirements, vendor information, customer lists, personnel information, and strategic plans; (b) other information that the Disclosing Party identifies in writing as confidential to the Receiving Party; (c) information that the Receiving Party knows or has reason to know is confidential or proprietary information of the Disclosing Party; (d) information which is of such a nature or the manner or circumstance in which such information is disclosed is such that it may be reasonably inferred to be confidential and/or proprietary to the Disclosing Party; and (e) all notes, analyses, compilations, studies, interpretations or other documents prepared by the Receiving Party or its representatives to the extent they contain, reflect or are based upon, in whole or in part, Confidential Information of a Disclosing Party furnished to the Receiving Party or its representatives in connection with this Agreement by or on behalf of the Disclosing Party and (f) information obtained during an audit or tour of the Disclosing Party’s (or its Affiliates’ facility).
13.3.2 Exclusions. Confidential Information will not include information that: (a) is now, or hereafter becomes generally known or available to the public through no act or failure to act on the part of the Receiving Party; (b) was acquired by the Receiving Party before receiving such information from the Disclosing Party through no breach of any duty of confidentiality owed to the Disclosing Party and without restriction as to its use or disclosure; (c) is hereafter rightfully furnished to the Receiving Party by a third party without any breach of any duty of confidentiality owed to the Disclosing Party and without restriction as to its use or disclosure; or (d) is information that the Receiving Party can document was independently developed by the Receiving Party without any use of the Confidential Information of the Disclosing Party or its Affiliates.
13.3.3 Restriction on Use and Disclosure. Distributor and Xxxxxxxx each agree that during the term of this Agreement and for a period of seven (7) years after the termination hereof, to hold the Disclosing Party’s Confidential Information in confidence and not to use it in any way for their own
account or for the account of any third party, nor disclose to any third party, any Confidential Information of the Disclosing Party, except as specifically permitted or required for their respective performances hereunder. Distributor and Xxxxxxxx each agree to take all necessary measures to prevent any disclosure of the other Party’s Confidential Information and to ensure compliance with the above obligations by its employees, agents, contractors, subdistributors, or consultants. Distributor shall not publish any technical description of the Products beyond the description published by Capricor. Distributor shall not manufacture or have manufactured any pharmaceutical or biologic product utilizing any of Capricor’s Confidential Information and shall not alter, amend or modify all or any part of the Product. The Receiving Party shall be responsible for any unauthorized use or disclosure of the Confidential Information by the Receiving Party’s employees, agents, contractors, representatives, subdistributors, directors, or consultants.
13.3.4 Securities Matters. The Parties acknowledge that each of them is a publicly traded corporation and each agrees that it shall observe the restrictions imposed by applicable United States securities laws and the laws of Japan on the purchase or sale of securities by any person who has received material, non-public information from the issuer of such securities and on the communication of such information to any other person when it is reasonably foreseeable that such other person is likely to purchase or sell such securities in reliance upon such information. Nothing in this Agreement shall be deemed to prohibit a Party from disclosing the existence of this Agreement, the terms and conditions hereof, or any information related hereto where such disclosure is required under the rules of any securities exchange on which such Party is listed, or any other applicable law or regulation.
13.3.5 Ownership of Confidential Information. The Receiving Party acknowledges and agrees that all of the Disclosing Party's Confidential Information is owned solely by the Disclosing Party (or its Affiliates or licensors) and that nothing contained in this Agreement will be construed as granting any rights to the Receiving Party, by license or otherwise, to any of the Disclosing Party's Confidential Information or other proprietary rights, all of which rights are specifically reserved by the Disclosing Party. The Receiving Party further agrees not to copy all or any part of the Confidential Information or any documentation related thereto except as may be required to perform its obligations hereunder and further, not to modify, adapt, translate, reverse engineer, decompile, disassemble, or otherwise attempt to discover any additional information with respect to the Confidential Information of the Disclosing Party.
13.3.6 Equitable Relief. The Receiving Party agrees that its obligations hereunder are necessary and reasonable to protect the business interests of the Disclosing Party and its Affiliates and that the unauthorized disclosure or use of the Disclosing Party’s Confidential Information may cause irreparable harm and significant injury, the degree of which may be difficult to ascertain. The Receiving Party further acknowledges and agrees that in the event of any actual or threatened breach of this Agreement, the Disclosing Party and its Affiliates may have no adequate remedy at law and accordingly, that the Disclosing Party and its Affiliates will have the right to seek specific performance or an immediate injunction enjoining any breach or threatened breach of this Agreement, without the necessity of proving actual damages, as well as the right to pursue any and all other rights and remedies available at law or in equity for such breach or threatened breach.
13.3.7 Applicability of Obligations. The terms contained in Section 13.3 shall apply to any Confidential Information disclosed to the Receiving Party during the Term of this Agreement and shall
apply to any Confidential Information disclosed earlier to the Receiving Party to the extent the Parties began discussions concerning this Agreement prior to the Effective Date. The obligations of the Receiving Party and any of its representatives as to the Confidential Information it has received hereunder shall continue in full force and effect for the periods set forth in Section 13.3.3 of this Agreement regardless of any attempted or actual termination or expiration hereof.
13.3.8 Return of Confidential Information. All documents and other materials, in whatever medium, in the possession of the Receiving Party or its representatives to the extent they embody any of the written Confidential Information of the other Party, regardless of whether such documents or materials were prepared by the Receiving Party or its representatives, will be returned to the Disclosing Party immediately upon its request or destroyed, at the Disclosing Party’s option, and the destruction promptly confirmed to the Disclosing Party in writing. Except as required in connection with its obligations under this Agreement, by law or judicial or investigative process, no copies, extracts or other reproductions shall be retained by the Receiving Party or its representatives. If any notes, analyses, compilations, studies, interpretations or other documents prepared by the Receiving Party or its representatives contain, reflect or are based upon, in whole or in part, Confidential Information furnished to the Receiving Party or its representatives along with other information which is not Confidential Information received from the Disclosing Party, the Receiving Party may redact or remove such non-confidential information from the materials to be returned to the Disclosing Party. Notwithstanding the foregoing, the Receiving Party’s legal counsel may retain one (1) copy of the Disclosing Party's Confidential Information in its files for archival purposes. Notwithstanding the return or destruction of the documents and materials, the Receiving Party will continue to be bound by its obligations under this Agreement.
13.3.9 Legal Process. In the event the Receiving Party or any of its representatives is required to disclose Confidential Information of the Disclosing Party by any applicable law, regulation, legal process, judicial order or by any applicable order or requirement of any Governmental Authority, it may do so only to the extent required; provided, however, the Receiving Party shall (a) first give prompt notice to the Disclosing Party of the required disclosure sufficiently in advance (to the extent reasonably possible) of making the required disclosure to allow the Disclosing Party a reasonable opportunity to take steps to object to, prevent, and/or limit its disclosure or obtain a protective or other similar order with respect to the required disclosure (collectively “Protective Measures”); (b) if requested by the Disclosing Party, cooperate with the Disclosing Party in seeking such Protective Measures; and (c) restrict disclosure to only that portion of the Confidential Information which is required to be disclosed. Notwithstanding anything in the foregoing to the contrary, the disclosure by the Receiving Party or its representatives of Confidential Information to the Person compelling disclosure does not mean that any such information is no longer Confidential Information and the Receiving Party and its representatives must continue to treat such information as Confidential Information pursuant to the terms hereof with respect to all other Persons.
13.3.10 Compliance with Export Laws and Regulations. The Receiving Party shall comply with all applicable laws and regulations with respect to its receipt, possession and use of Confidential Information, including without limitation the export laws and regulations of the United States, including but not limited to, applicable requirements of the Federal Food, Drug, and Cosmetic Act (as amended) and the FDA, and other applicable jurisdictions. Without limiting the foregoing, the Receiving Party shall not (a) export, directly or indirectly, any technical data acquired pursuant to this
Agreement or any product utilizing any such technical data to any proscribed country in violation of applicable export laws and regulations; and (b) permit any Person or entity to access or use the Confidential Information in violation of any applicable export embargoes, prohibitions or restrictions.
14.TRADEMARKS
14.1.1 During the term of this Agreement, Distributor shall have:
(a)the exclusive, non-transferable right to indicate to the public that it is the exclusive distributor of the Product in the Territory; and
(b)the right to advertise, sell, distribute, promote, and market such Product in the Territory under the Trademarks listed on Exhibit B, provided such Trademarks are used by Distributor in accordance with Capricor’s standards, specifications and instructions, but in no event beyond the term of this Agreement.
(c) Notwithstanding the foregoing, Distributor may sublicense such rights to the approved subdistributors, subject to the provisions set forth in Section 4.2.
14.1.2 Except as set forth in this Section 14.1, nothing contained in this Agreement shall grant to Distributor any right, title, or interest in the Trademarks, and all goodwill accruing from the use of the Trademarks shall inure solely to the benefit of Capricor. At no time during or after the term shall Distributor, directly or indirectly, challenge or assist others to challenge the Trademarks or the registration thereof. Distributor shall afford Capricor reasonable opportunities during the term hereof to inspect and monitor the activities of Distributor in order to ensure Distributor’s use of the Trademarks in accordance with Capricor’s standards and instructions. Distributor shall acquire no right, title or interest in such Trademarks other than the foregoing limited license and all rights in the Trademarks shall be in the name of Capricor and/or its Affiliates, and Distributor shall not use any Trademarks as part of Distributor’s corporate or trade name or permit any third party to do so without the prior written consent of Capricor. In the event Capricor determines in its sole discretion that it is necessary or advisable to enter into a Registered User Agreement or a similar document in connection with protection of such Trademarks, Distributor shall enter into such an agreement.
14.3Markings. Distributor shall not, without the prior written consent of Capricor, remove or alter any patent numbers, trade names, trademarks, notices, serial numbers, labels, tags or other identifying marks, symbols or legends affixed to any Product or containers or packages.
14.4Infringements. Distributor shall promptly notify Capricor of any use by any third party of the Trademarks or any similar marks which may constitute an infringement or passing off of the Trademarks. Capricor reserves the right in its sole discretion to institute any proceedings against such
third party infringers and Distributor shall refrain from doing so without Capricor’s prior written consent. Distributor agrees to cooperate fully with Capricor in any action taken by Capricor against such third parties, provided that all expenses of such action shall be borne by Capricor and all damages which may be awarded or agreed upon in settlement of such action shall accrue to Capricor. If Capricor elects not to pursue any such action against a third party infringer, Distributor shall have the right, but not the obligation, to pursue such action at its own cost and expense and shall be subject to Capricor’s consent, not to be unreasonably withheld. In such case, the costs to be borne and allocation of any recovery Distributor is awarded for any action against the third party infringer shall first be allocated to reimburse Distributor for costs and expenses incurred under such action, and any remaining amounts shall be allocated between the Parties as agreed between the Parties prior to Distributor’s initiation of such action.
15.2Termination
15.2.1 Termination By Capricor. In addition to any termination provisions contained elsewhere in this Agreement, Capricor shall have the right to terminate this Agreement by written notice to Distributor in the following circumstances:
(a)Distributor shall have failed to pay all undisputed amounts for its purchases of Products in accordance with Article 8 or breached any other monetary obligation hereunder, which failure is not cured within sixty (60) days after receiving notification thereof from Capricor; provided, however, that all amounts that are subject to a bona fide dispute (“Disputed Amounts”) raised by a Party in writing within such sixty (60) day period may be withheld from the specific invoice to which it relates and submitted first to the J-JSC for resolution, and if not resolved, then to General Arbitration
pursuant to Section 17.3.1 hereof. All Disputed Amounts that Distributor subsequently agrees in writing to pay or that are required to be paid pursuant to a proper arbitration determination shall be paid within thirty (30) days from the date of such agreement or determination.
(b)Distributor shall have breached a material obligation (other than under Section 15.2.1) under this Agreement and failed to cure such breach within ninety (90) days after receiving notice thereof from Capricor; provided, however, that if there is a bona fide dispute as to any non-monetary obligation raised by a Party in writing within such ninety (90) day period, such dispute shall first be submitted to the J-JSC for resolution, and if not resolved, then to General Arbitration pursuant to Section 17.3.1 hereof.
(c)In the event Distributor shall have failed to pay any monetary amounts or failed to cure any non-monetary obligation after determination by the arbitrator that it is obligated to do so, Capricor shall have the right to terminate this Agreement upon thirty (30) days’ written notice thereof by Capricor to Distributor.
(d) Upon ten (10) days’ written notice, in that event that any Regulation or Governmental Authority enactment or decree suspends or prohibits the performance by Capricor of its obligations hereunder, and, after using Commercially Reasonable Efforts to do so, Xxxxxxxx is unable to resume its responsibilities hereunder.
15.2.2 Termination By Distributor. In addition to any termination provisions contained elsewhere in this Agreement, Distributor shall have the right to terminate this Agreement by written notice to Capricor in the following circumstances:
(a) Capricor shall have breached a material obligation under this Agreement and failed to cure such breach within [***] after receiving written notice thereof from Distributor; provided, however, that if there is a bona fide dispute as to any obligation raised by a Party in writing within such [***] period, such dispute shall first be submitted to the J-JSC for resolution, and if not resolved, then to General Arbitration pursuant to Section 17.3.1 hereof.
(b) Upon ten (10) days’ written notice, in that event that any Regulation or Governmental Authority enactment or decree suspends or prohibits the performance by Distributor of its obligations hereunder, and, after using Commercially Reasonable Efforts to do so, Distributor is unable to resume its responsibilities hereunder.
15.2.3 Either Party may terminate this Agreement immediately upon written notice to the other Party if:
(a)The other Party shall be or become bankrupt or insolvent or if there are instituted by or against it proceedings in bankruptcy or under insolvency laws or for its reorganization, receivership, liquidation or dissolution;
(b)The Product is adjudicated to infringe the intellectual property of a third party and it is not commercially or technically feasible for Capricor or Distributor to obtain a license from the third party or to replace or modify the Product so that it is no longer infringing any third party’s intellectual property rights or such replacement or modification of the Product is not acceptable for Distributor.
(c)A failure to meet the primary endpoint in either the HOPE-3 Phase 3 trial in the U.S. or any clinical trial conducted in the Territory.
15.2.4 Termination for Change of Control. [***].
15.3.1 Termination of this Agreement shall not release the Parties from the obligation to make payments of all amounts then due and payable, including, without limitation, any Supply Price payments, Transfer Price payments and Milestone payments accruing through the date of such termination or expiration.
15.3.2 Subject to any provision contained elsewhere in this Agreement, Capricor shall have the right at its option to either (i) cancel any or all accepted Purchase Orders which provide for delivery after the effective date of termination; or (ii) continue to fulfill, subject to the terms of Section 7.4 above, all orders accepted by Capricor prior to the effective date of termination which specify a Delivery Date no later than ninety (90) days after the acceptance of such order, provided that Capricor shall continue to fulfill orders accepted by Capricor prior to the effective date of termination to enable Distributor to fulfill its remaining obligations under any orders which have been given to Distributor prior to the applicable notice of termination, and provided further, that (i) Distributor is in material compliance with Distributor’s obligations under this Agreement; and (ii) Capricor is otherwise not restricted in its ability to sell additional Products to Distributor
15.3.3 In case of termination by Capricor pursuant to Section 15.2.1 (a), (b) or (c) or Section 15.2.3(a), Capricor shall have the right, but not the obligation, to repurchase all or any part of the inventories of Products in Distributor’s possession as of the termination date at Capricor’s invoiced Transfer Price to Distributor for such Products, less freight to Capricor’s place of business. Capricor shall exercise its option under this subsection by notifying Distributor in writing no later than fifteen (15) days after the effective termination date. In case of any termination other than a termination by Capricor specified above in this Section 15.3.3, Capricor shall (i) repurchase all or any part of the inventories of Products in Distributor’s possession as of the termination date which are unsold, not expired and which have been properly stored and maintained at Capricor’s invoiced Transfer Price to Distributor for such Products, and (ii) bear the cost of the freight of the Products to be repurchased by Capricor to Capricor’s designated place of business.
15.3.4 In the event Capricor exercises its right to terminate this Agreement pursuant to the foregoing termination provisions, Capricor shall continue to sell Products to Distributor to enable Distributor to fulfill its remaining obligations under any orders which have been given to Distributor prior to the applicable notice, provided that (i) Distributor is in material compliance with the terms and conditions of this Agreement; and (ii) Capricor is otherwise not restricted in its ability to sell additional Products to Distributor.
16.FORCE MAJEURE. The obligations of either Party to perform under this Agreement shall be excused during each period of delay caused by matters (not including lack of funds or other financial causes) such as fires, floods, explosions, accidents, acts of God, war, riots, strikes, lockout or other concerted acts of workers, pandemic, epidemic, communicable diseases, acts of Governmental Authorities, supplier delays, shortages of raw materials, actions or failures to act by Governmental Authorities, and Government orders, in each case that are reasonably beyond the control of the Party obligated to perform; provided that nothing contained in this Agreement shall affect either Party's ability or discretion with respect to any strike or other employee dispute or disturbance and all such strikes, disputes or disturbances shall be deemed to be beyond the control of such Party. A condition of force majeure shall be deemed to continue only so long as the affected Party shall be taking all reasonable actions necessary to overcome such condition. If either Party shall be affected by a condition of force majeure, such Party shall give the other Party prompt notice thereof, which notice shall contain the affected Party's estimate of the duration of such condition and a description of the steps being taken or proposed to be taken to overcome such condition of force majeure. Any delay occasioned by any such cause shall not constitute a default under this Agreement, and the obligations of the Parties shall be suspended during the period of delay so occasioned. During any period of force majeure, the Party that is not directly affected by such condition of force majeure shall be entitled to take any reasonable action necessary to mitigate the effects of such condition of force majeure.
17.1General. Any dispute arising out of or relating to this Agreement shall be resolved in accordance with the procedures specified in this Article 17, which shall be the sole and exclusive procedures for the resolution of any such disputes.
17.2Escalation. The Parties will attempt in good faith to resolve any claim or controversy arising out of or relating to the execution, interpretation and performance of this Agreement (including the validity, scope and enforceability of this mediation and arbitration provision) promptly by negotiations between executives of each Party who have authority to settle the controversy and who are at a higher level of management than the persons with direct responsibility for the administration of this Agreement. Any Party may give the other Party written notice of any dispute not resolved in the normal course of business. Within fifteen (15) days after delivery of the notice, the receiving Party shall submit to the other a written response. The notice and the response shall include (a) a statement of each Party's position and a summary of arguments supporting that position, and (b) the name and title of the executive who will represent that Party and of any other person who will accompany the executive. Within thirty (30) days after delivery of the notifying Party's notice, the executives of both Parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to
resolve the dispute. All reasonable requests for information made by one Party to the other will be honored. All negotiations pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. All applicable limitation periods and defenses based upon the passage of time shall be automatically tolled while the negotiations pursuant to this section are pending.
17.3Arbitration.
17.3.1 General Arbitration.
(a) Except as controlled by Section 17.3.2, any matter submitted to arbitration pursuant to any provision contained in this Agreement or any dispute arising out of or relating to this Agreement or its breach, termination or validity, including whether the claims asserted are arbitrable, which has not been resolved by the specified binding procedure pursuant to Section 17.2 within sixty (60) days of the initiation of the date of delivery of notice shall be settled by binding arbitration under the Rules of Arbitration of the International Chamber of Commerce (“ICC Rules”), except as modified in this Agreement, in effect on the date of this Agreement, by three independent and impartial arbitrators, one of whom shall be appointed by each Party and the third by the two appointees. The arbitration and this arbitration clause shall be governed by United States Arbitration Act, 9 U.S.C. §§ 1-16, and judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction thereof. The place of the arbitration shall be New York, New York or Los Angeles, California and shall be determined by the Party that initiated the arbitration. The arbitrators may award attorneys' fees in their discretion. Otherwise, the arbitrators are not empowered to award damages in excess of compensatory damages, and each Party hereby irrevocably waives any right to recover such damages. The arbitration shall be conducted in the English language and all writings, documents and other communications shall be in the English language.
(b) The Parties may request limited discovery in accordance with the IBA Rules on the Taking of Evidence in International Arbitration. In addition, the Parties hereby confirm that (i) the arbitrators shall have the power to compel the production of documents at their discretion, (ii) in principle, discovery shall be limited to the minimum necessary scope to allow the Parties a reasonable opportunity to present their cases and fairly establish the facts of the dispute, and (iii) any request for production of documents made by a Party shall be sufficiently detailed in its description of the requested document and accompanied by a statement explaining how such document is relevant to the dispute and why the requesting party believes the requested document is in the possession of the other Party. The statute of limitations under the law of the State of New York shall apply with respect to any notification of a dispute under this Agreement and shall be extended until commencement of arbitration if all interim deadlines have been complied with by the notifying Party.
17.3.2 Expert Determination. If the Parties, through the J-JSC or otherwise, are unable to agree on Minimum Sales Requirements, forecasts, issues regarding the XXX Xxxxx Listing as provided in Section 5.8 and a material safety risk, either Party may submit such dispute to binding Expert Determination for resolution in accordance with the following provisions:
(a) The submitting Party shall notify the other Party of its decision to initiate the Expert Determination proceeding pursuant to this Section 17.3.2 through written notice;
(b) Within ten (10) days following receipt of such notice, the Parties shall use Commercially Reasonable Efforts to agree on an independent third party expert with at least ten (10) years of experience in a managerial position regarding the marketing, sales and distribution of pharmaceutical compounds or products, or if such dispute is with respect to the XXX Xxxxx Listing, an independent third party expert with at least ten (10) years of experience in regulatory matters and direct experience negotiating or advising as an expert on matters related to the XXX Xxxxx determination. If the Parties cannot agree on such expert within such time period, each Party shall nominate one independent expert within such ten (10)-day period, and the two experts so selected shall nominate one independent expert within ten (10) calendar days of their nomination. Such independent expert agreed by the Parties or nominated by the two experts nominated by the Parties shall be referred to as the “Presiding Expert”. No person nominated by a Party or appointed by the experts shall be entitled to act as the Presiding Expert unless such person satisfies the qualications set out above. Any person appointed or selected as the Presiding Expert in accordance with the above provisions shall be entitled to act as such expert provided that before accepting such appointment, the proposed Presiding Expert shall have fully disclosed in writing any interest or duty which conflicts or may conflict with the function under the appointment and/or may prejudice an opinion. No person shall, without the prior written agreement of both Parties, be appointed as expert who is, or has been, an employee of either Party or either Party’s Affiliate or who is, or has been, a consultant to or contractor of either Party or either Party’s Affiliate or who holds any financial interest in either Party or either Party’s Affiliate. No person shall be appointed as a Presiding Expert who has not agreed to hold in confidence any and all information furnished by the Parties in connection with the dispute and the existence of the dispute and the outcome thereof;
(c) Within ten (10) days of its appointment, the Presiding Expert shall set a date for the hearing, which date shall be no more than thirty (30) days after the date the Presiding Expert has accepted the appointment;
(d) The Expert Determination shall be in an accelerated form; accordingly, at least fourteen (14) calendar days prior to the hearing, each Party shall provide the Presiding Expert with a proposed resolution, along with supporting documentation (each, a “Proposed Resolution”) to the issue in question. Such Proposed Resolution may be no more than thirty (30) pages, single spaced, single-sided (inclusive of any graphs or exhibits, and secondary materials), and must clearly provide and identify the Party’s position with respect to the disputed matter(s) (“Position”) and shall be written in the English language;
(e)After receiving both Parties’ Proposed Resolutions, the Presiding Expert will distribute each Party’s Proposed Resolution to the other Party. Seven (7) calendar days in advance of the hearing (described in clause (f) below), the Parties shall submit to the Presiding Expert and exchange response briefs of no more than ten (10) pages, with the same rules applied as to the Proposed Resolution. The Parties’ Proposed Resolution and responsive briefs may also include or attach demonstratives and/or expert opinion based on the permitted documentary evidence, subject to the page limits. Neither Party may have any other communications (either written or oral) with the Presiding Expert other than for the sole purpose of engaging the Presiding Expert or as expressly permitted in this Section 17.3.2;
(f) The hearing shall consist of a one (1) day hearing of no longer than eight (8) hours, such time to be split equally between the Parties, in the form of presentations by counsel and/or employees and officers of the Parties. No live witnesses shall be permitted except expert witnesses whose
opinions were provided with the Parties’ briefs. The Presiding Expert shall determine whether to hold the meeting in person, in which case it will be held in Tokyo, Japan or by video or teleconference and all hearings and meetings shall be conducted in the English language;
(g) No later than ten (10) calendar days following the hearing, the Presiding Expert shall issue his or her written decision. The Presiding Expert shall take into due consideration each Party’s Position and changes in the market environment of the Product but shall be under no obligation to select one Party’s Proposed Resolution as his or her decision. The Presiding Expert’s decision shall be final and binding on the Parties and the written decision by the Presiding Expert shall constitute a binding agreement between the Parties that may be enforced in accordance with its terms. Each Party shall bear its own costs and expenses in connection with such Expert Determination, and shall share equally the experts’ fees and expenses;
(h) The violation of one of the time limits prescribed in this Section 17.3.2 by the expert shall not affect the expert’s competence to decide on the subject matter, and shall not affect the final and binding decision rendered by the expert, unless otherwise agreed by the Parties; and
(i) The above Expert Determination shall be the exclusive and binding remedy of either Party if the Parties cannot agree on those matters designated in this Agreement as being subject to Expert Determination, with the exception of Section 12.5 regarding material safety risk.
17.3.3 Injunctive Relief. Nothing contained in this Article 17 shall prevent either Party from resorting to judicial process if injunctive or other equitable relief from a court is necessary to prevent serious and irreparable injury to one Party or to others. The use of arbitration procedures will not be construed under the doctrine of laches, waiver or estoppel to affect adversely either Party's right to assert any claim or defense.
18.1On or after the Effective Date of this Agreement, the Parties shall issue a press release substantially in a form to be agreed upon by the Parties. Thereafter, Distributor and Capricor may each disclose to third parties the information contained in such press release without the need for further approval by the other Party, provided that such information is still accurate. Any subsequent press release will contain the same accuracy and truthfulness as the original press release. No other press releases or public disclosures of the transaction contemplated by this Agreement may be made that discloses additional information about such transactions without the mutual consent of the other Party or to the extent required by applicable law, rule or regulation (including stock exchange requirements). To the extent that a release of information is required by applicable law, rule or regulation (including stock exchange requirements), the disclosing Party will use Commercially Reasonable Efforts to ensure that the content is accurate and in accordance with reasonable business standards and will, to the extent practicable, provide the other Party with advance notice of the proposed disclosure and an opportunity to review and comment upon such disclosure. A copy of this Agreement may be filed with the Securities and Exchange Commission, The New York Stock Exchange, the NASDAQ Market and/or the Tokyo Stock Exchange as required by applicable Regulations. In connection with such filing, the Parties will endeavor to obtain confidential treatment of economic and trade secret information.
18.2The restrictions contained in Section 18.1 will not apply to any disclosures to any prospective investor, acquirer, financing source, analyst, consultant, agent, representative, successor or finder, or any licensee of Capricor, or any other third party with whom Xxxxxxxx is considering entering into a commercial relationship including but not limited to business alliance or M&A provided that Capricor takes reasonable precautions to maintain confidentiality prior to disclosure. Capricor will have taken reasonable precautions for purpose of this Agreement if it obtains a written confidentiality agreement with the intended recipient containing confidentiality provisions substantially similar to those contained in Article 13 of this Agreement. Capricor shall indemnify and hold harmless Distributor for any subsequent breach of such confidentiality agreement by such recipient. Any information that is now, or hereafter becomes generally known or available to the public will be excluded from the prohibitions of this Article 18. In addition to the foregoing, Capricor shall have the right to use without further consent, the names or marks of Distributor on Capricor’s website, corporate presentations, and in media segments, provided that Capricor shall not change or modify such names, marks, or logos of Distributor.
19.1Governing Law and Jurisdiction. This Agreement shall be governed by and construed under the laws of the State of New York, USA. The UN Convention on Contracts for the International Sale of Goods shall not apply.
19.3 Amendment; Modification. No modification or amendment to any provision of, nor any consent required by, this Agreement, nor any consent to any departure by either Party there from, shall in any event be effective unless the same shall be in writing and signed by the other Party and then such modification, amendment, or consent shall be effective only in the specific instance and for the purpose for which it is given. No notice to or demand on either Party in any case shall entitle such Party to any other or further notice or demand in the same, similar or other circumstances.
If to Distributor:
NIPPON SHINYAKU CO., LTD.
14, Xxxxxxxxxx-Xxxxxxxxxxx,
Kisshoin, Minami-ku, Kyoto 601-8550, Japan
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If to Capricor:With a copy to:
Capricor Therapeutics, Inc. General Counsel
00000 Xxxx to the Cure8840 Xxxxxxxx Xxxx., 0xx Floor
Suite 000Xxxxxxx Xxxxx, XX 00000
San Diego, CA 92121
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19.10Binding Effect. Subject to the limitations on assignment contained in Section 19.6 above, this Agreement shall be binding on and inure to the benefit of the parties to this Agreement and their respective heirs, personal representatives, successors, and assigns.
19.12 Construction; Rules of Construction. Interpretation of this Agreement will be governed by the following rules of construction: (a) words in the singular will be held to include the plural and vice versa, and words of one gender will be held to include any other gender as the context requires; (b) references to the terms "Section", "Exhibit", or "Schedule" are to a Section, Exhibit, or Schedule of this Agreement unless othenvise specified; (c) the terms "hereof', "hereby", "hereto", and derivative or similar words refer to this entire Agreement; (d) the word "including" and “includes” and words of similar import when used in this Agreement will mean "including without limitation," unless othenvise specified; (e) the word "or" will not be exclusive; (f) references to "written" or "in writing" include in electronic form; (g) each of the Parties has participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise favoring or burdening either Party by virtue of the authorship of any of the provisions in this Agreement or any interim drafts of this Agreement; (h) the word "shall" will be construed to have the same meaning and effect as the word "will"; (i) references to "days" will mean calendar days, unless otherwise specified; and (j) a reference to any Person includes such Person's successors and permitted assigns.
19.13Survival. Notwithstanding any other provision of this Agreement to the contrary, the provisions of Articles 1, 3, 11, 17 and 19 and Sections 2.6, 4.2, 5.2.4, 5.5.2, 5.5.4, 5.7.1, 5.7.2, 5.9.2, 5.11, 5.13, 5.15, 5.16, 5.17, 6.8, 8.1.3, 8.2, 8.3, 8.5, 10.2, 10.3, 10.4, 10.5, 12.1, 12.2, 12.3, 12.4, 13.3, 14.1.2, 14.5, 15.3, 15.4, 15.5 and 18.1 shall survive the expiration or termination of this Agreement as necessary to give full effect to all of the provisions contained therein, provided that (i) the provisions of Sections 2.6, 5.5.2 and 5.7.2 shall survive the expiration or termination of this Agreement for three (3) months, (ii) the provisions of Sections 5.5.4 and 5.9.2 shall survive the expiration or termination of this Agreement for twelve (12) months and (iii) the provisions of Article 3, Sections 5.2.4, 5.7.1, 5.16, 8.1.3, 8.2 and 8.3 shall apply only to the payment obligations accruing through the date of the expiration or termination of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
CAPRICOR THERAPEUTICS, INC.NIPPON SHINYAKU CO., LTD.
By: /s/ Xxxxx Xxxxxx_______________Xx: _/s/ Xxxx Xxxxx__________________
Name: Xxxxx XxxxxxXxxx: Xxxx Xxxxx
Its: Chief Executive OfficerIts: President
Date: _February 10, 2023____________ Date: _February 13, 2023_____________
LIST OF EXHIBITS
EXHIBIT APRODUCT PRICING
EXHIBIT BTRADEMARKS
EXHIBIT CSALES MILESTONES
EXHIBIT DPROCEDURES FOR PRODUCT RETURNS
EXHIBIT EPATENTS COVERING THE PRODUCT OR USE OF THE PRODUCT IN THE TERRITORY
EXHIBIT A
PRODUCT PRICING
Transfer Price
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During the term of the Agreement, Distributor shall pay to Capricor in US Dollars the amount calculated by the following formula on an annual basis
Formula,
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“Net Sales” means the gross amounts billed or invoiced with respect to sales of the Product by Distributor, Distributor’s Affiliates, agents, representatives or subdistributors to any Wholesaler within the Territory during the term of this Agreement, calculated in the same manner as reported in such entity’s audited financial statements, less the following to the extent actually incurred:
(a)Credits, refunds or allowances granted upon returns, rejections or recalls and for retroactive price reductions or billing errors;
(b)Rebates, chargeback payments or credits or other equivalents thereof to formularies, government or government agency programs, trade customers, managed health care organizations and pharmacy benefit managers (or equivalents thereof) to obtain listing or purchase of the applicable Products; and
(c)Bad debts, uncollectible amounts, and collection costs relating to the sale of Products that are actually written off.
The rate of exchange to be used in computing any conversion of the Net Sales from Japanese Yen to US Dollars (which will be used to calculate the definitive figure of the Supply Price quarterly) shall be the arithmetic average of Monthly-Average TTS rate (published by Mitsubishi UFJ Research and Consulting Co., Ltd.) during an applicable quarter.
EXHIBIT B
TRADEMARKS
To be determined
EXHIBIT C
SALES MILESTONES
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EXHIBIT D
PROCEDURES FOR PRODUCT RETURNS
1.General Principles
All returned goods must include a Return Goods Authorization number (“RGA”) issued by Capricor. Any goods returned to Capricor without an RGA will not be eligible for credit and/or replacement, and will not be returned to Distributor. This policy applies to all returns for any reason, including but not limited to transportation errors, damaged products, defective products, product complaints and/or warranty claims.
2.Return Authorization Process
Prior to returning any Capricor product for credit consideration or product replacement, Distributor must request pre-approval for the return by contacting Capricor’s Customer Service and completing the RGA Form.
To receive an RGA, Distributor must provide all of the following information on the RGA form: (a) Distributor name; (b) lot number; (c) quantity of each item to be returned; (d) invoice number and (if available) purchase order number; and (e) reason for return.
Upon receipt of a complete RGA form, Customer Service will issue an RGA, which Distributor can use to return the goods, following the procedure in Section 3 (Return Location) below.
3.Return Location
After receiving a completed RGA from Distributor, Capricor will validate that all required information has been provided and that all conditions for return of goods have been met. Upon validation, Customer Service will confirm to Distributor that the RGA has been authorized. Within ten (10) business days of receiving RGA authorization, Distributor should return the approved units (and only the approved units) to Capricor via prepaid freight to the following address:
_____________________________________________________________________________________
All returned products must be accompanied with the RGA Form in its proper protective packaging and the RGA Number must be written on outside of the box used to return the shipment.
EXHIBIT E
PATENTS COVERING THE PRODUCT OR USE OF THE PRODUCT IN THE TERRITORY
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