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AFH Acquisition IV, Inc. 8-K [afhacq4-8k_0429.htm]
 
 
Exhibit 10.10

Joint Research and Development Agreement
 
This Agreement is made and entered into the 8th day of April, 2011 (“Effective
Date”) by and between
 
CellSeed Inc., having a place of business at R-Bldg, Shinjuku IF, 33-8,
Wakamatsu-cho, Shinjuku-ku, Tokyo 162-0056, Japan (“CELLSEED”)
 
on the one hand
 
and
 
Emmaus Medical, Inc. having a place of business at
20725 S. Western Ave., Suite 136, Torrance, CA 90501-1884
(“EMMAUS”)
 
on the other hand.
 
WHEREAS, EMMAUS has conducted research in the areas of regenerative medicine to
develop certain products. From this regenerative medicine research initiative,
EMMAUS is interested in assessing the products which have been or will be
developed by CELLSEED, either alone or jointly with EMMAUS;
 
WHEREAS, CELLSEED possesses considerable expertise in research and development
of cell sheet engineering regenerative medicine products. Using this expertise,
CELLSEED has identified a number of product leads including Cultured Autologous
Oral Mucosal Epithelial Cell-Sheet (CAOMECS), Cell-Sheet for Cardiac Muscle
Regeneration, Regenerated Cartilage Sheet, and Cell-Sheet for Periodontal Tissue
Regeneration; and,
 
WHEREAS, in order to advance these goals, EMMAUS and CELLSEED have detennined to
enter into a relationship regarding the future research and development of the
cell sheet engineering regenerative medicine products, and commercialization of
such products. Particularly EMMAUS and CELLSEED are interested in the joint
research and development of CAOMECS for generated medicine of cornea, CellSheet
for Cardiac Muscle Regeneration, and Regenerated Cartilage Sheet.
 
NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein made and the mutual benefits to be derived from this Agreement, the
parties agree as follows.
 
Article 1:   DEFINITIONS
 
1.1
“AFFILIATE” shall mean any corporation, partnership or other business
organization which either party directly or indirectly controls or any company
by which either party is controlled or is under common control with. For the
purpose of this Agreement, “control” shall mean the holding of more than fifty
percent (50%) of the voting stock or other ownership interest of the corporation
or business entity involved.

 

 
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1.2
“CELLSEED PATENTS” shall mean the patents and patent applications listed in an
applicable INDIVIDUAL AGREEMENT and made a part thereof and any and all patents
that may be issued from said patent applications, and all other patent
applications and patents in the TERRITORY which CELLSEED presently or hereafter
owns which pertain in any way to the manufacture, development, use or sale of
the PRODUCTS including any and all divisions, continuations,
continuations-in-part, extensions, substitutions, renewals, registrations,
revalidations, reissues or additions of or to any of the aforementioned patents
and patent applications.

 
1.3
“CONFIDENTIAL INFORMATION” shall mean any and all data and information
proprietary or confidential nature that are owned or controlled by either party
hereto and that is exchanged between EMMAUS and CELLSEED pursuant to this
Agreement or an INDIVIDUAL AGREEMENT, or that are directly or indirectly related
to a PRODUCT, or the manufacture, use or sale thereof, including, but without
limitation to, KNOW-HOW, clinical or nonclinical data, compositions, production
information, technical reports and specifications.

 
1.4
“DATA” has the meaning set forth in Article 9.5.

 
1.5
“INDIVIDUAL AGREEMENT” shall mean an agreement separately executed between the
parties to determine the details, including, but not limited to, the work,
and/or timeline, of the PROJECT. If any provision of this Agreement conflicts
with that of an INDIVIDUAL AGREEMENT, the provision of the INDIVIDUAL AGREEMENT
shall prevail.

 
1.6
“INTELLECTUAL PROPERTY RIGHT” has the meaning set forth in Article 9.1.

 
1.7
“JDC” has the meaning set forth in Article 4.1.

 
1.8
“JMC” has the meaning set forth in Article 4.2.

 
1.9
“KNOW-HOW” shall mean technical and scientific information and knowledge
concerning any product of CELLSEED, including, but not limited to, information
concerning the PRODUCTS, or any relevant information and knowledge for
development, registration and marketing of any product of CELLSEED, including,
but not limited to, physico-chemical and manufacturing data, specifications,
quality control, and galenical, toxicological and pharmacological properties,
available from CELLSEED.

 
1.10
“MARKETING APPROVAL” means the marketing authorization of the PRODUCTS granted
by the competent authorities such as but not limited to the U.S. Food and Drug
Administration.

 
1.11
“PRODUCTS” shall mean the regenerative medicines developed by CELLSEED and/or
CELLSEED jointly with EMMAUS that are specified in the respective INDIVIDUAL
AGREEMENT.

 
1.12
“PROJECT” shall mean a project and/or a task which is conducted under this
Agreement and is identified in an INDIVIDUAL AGREEMENT.

 

 
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1.13
“SPECIFICATIONS” shall mean the specifications and quality control requirements
for the respective PRODUCTS as approved by the competent authorities in the
TERRITORY, and modified from time to time following prior approval by the
competent authorities in the TERRITORY.

 
1.14
“SUBSTRATES” shall mean CELLSEED temperature responsive cell culture substrates.

 
1.15
“TERRITORY” shall mean the United States of America.

 
1.16
The use herein of the plural shall include the singular, and the use of the
masculine shall include the feminine and vice versa.

 
Article 2:   SCOPE OF THE PROJECT
 
Prior to the commencement of a PROJECT, both parties will execute an INDIVIDUAL
AGREEMENT to determine the details of the PROJECT, including, but not limited
to, the scope of the PROJECT, and each party’s respective responsibilities.
 
Article 3:   CONSIDERATION
 
In consideration of part of the research and development efforts made and
expense borne by CELLSEED to date in order to develop the essential know-how and
knowledge of Cell-Sheet Regenerative Medicine, all which are to be shared with
EMMAUS under this Agreement and the first INDIVIDUAL AGREEMENT, EMMAUS will pay
to CELLSEED $8,500,000 US Dollars within 30 days of the completion of all of the
following: the fully signing of this Joint Research and Development Agreement;
the fully signing of the INDIVIDUAL AGREEMENT dated April __ 2011 and relating
to Cultured Autologous Oral Mucosal Epithelial CellSheets for generated medicine
of cornea; and the delivery to EMMAUS by CELLSEED of CELLSEED’s accumulated
information package (termed the “PACKAGE” in the INDIVIDUAL AGREEMENT).
 
Article 4:   COMMITTEES
 
4.1
For the purpose of successful development of PRODUCTS in the TERRITORY, a Joint
Development Committee (“JDC”) comprised of an equal number of representatives
from EMMAUS and CELLSEED shall be established. JDC will discuss and determine
such matters as selection of clinical sites, developing key opinion leaders’
meeting, to obtain MARKETING APPROVAL in the TERRITORY for the PRODUCTS.
Decisions regarding development and the conduct of JDC activities shall be made
as follows:

 
 
(a)
The JDC shall be co-chaired by a representative from EMMAUS and CELLSEED. The
JDC shall meet when either party has the need to do so; provided, however, the
JDC shall meet at least twice (2) per year.

 
 
(b)
The JDC shall discuss and decide such items including, but not limited to, the
structure and design of any additional clinical study if required for the
purpose of obtaining MARKETING APPROVAL concerning PRODUCTS in the TERRITORY.

 

 
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(c)
Decisions regarding development and the conduct of JDC activities shall be made
by the unanimous vote of the JDC, with each company having one vote. Each
party’s members in the JDC will reasonably consider the adoption of the other
party’s suggestions and will accept as many of such suggestions as are
reasonable.

 
 
(d)
If the JDC is unable to reach agreement on any decisions required of it, the
issue shall be submitted for consideration in the case of EMMAUS to a designee
of the Head of the Pharma Division of EMMAUS and in the case of CELLSEED to a
designee of the Head of the Pharma Division of CELLSEED. If they are unable to
agree, then the issue shall be resolved by the Head of the Pharma Division of
CELLSEED.

 
 
(e)
A party may change any of its appointments to the JDC at any time upon giving
written notice to the other party.

 
 
(f)
The JDC does not itself have the authority to amend this Agreement and/or any
INDIVIDUAL AGREEMENT in any manner.

 
4.2
In order to guide the successful commercialization of PRODUCTS in the TERRITORY,
a Joint Marketing Committee (“JMC”) will be established between the parties with
the main purpose to oversee and approve all strategic marketing issues such as
marketing objectives, marketing strategies, implementation and feedback. The
authority of the JMC shall be limited to the TERRITORY.

 
 
(a)
The JMC shall be chaired by a representative from EMMAUS. The JMC shall meet
when either party has the need to do so; provided, however, the JDC shall meet
at least twice (2) per year.

 
 
(b)
Decisions regarding the marketing of the PRODUCTS shall be made by unanimous
vote of the JMC with each company having one vote. Each party’s members of the
JMC will reasonably consider the adoption of the other party’s suggestions and
will accept as many of such suggestions as are reasonable.

 
 
(c)
If the JMC is unable to reach agreement on a decision required of it, the issue
shall be submitted for consideration in the case of EMMAUS to a designee of the
Head of the Pharma Division and in the case of CELLSEED to a designee of the
Head of the Pharma Division. If they are unable to agree, then the issue shall
be resolved by the Head of the Pharma Division of EMMAUS.

 
Article 5:   EXPLOITATION
 
5.1
Both parties shall comply with all relevant laws and regulations including but
not limited to U.S. Food and Drug Administration Good Laboratory Practice and/or
Good Manufacturing Practices.

 

 
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Article 6:   TECHNOLOGY TRANSFER
 
6.1
CELLSEED shall transfer the cell sheet engineering technology and provide
scientific and engineering support, training, and KNOW-HOW as agreed in the
INDIVIDUAL AGREEMENT to EMMAUS so that EMMAUS may perform its obligation under
this Agreement and relevant INDIVIDUAL AGREEMENT in effect.

 
Article 7:   EFFORTS
 
7.1
Both parties recognize that quick development and registration of the PRODUCTS
as well as adequate promotional efforts to exploit the commercial potential of
the PRODUCTS in an optimal way are in the mutual interest of both parties.

 
Article 8:   INTELLECTUAL PROPERTY AND INFRINGEMENT
 
8.1
CELLSEED shall defend and hold harmless EMMAUS against any suit, damage claim or
demand based on actual or alleged infringements of any intellectual property of
a third party resulting from the exercise or use of any right or license granted
herein or under an INDIVIDUAL AGREEMENT which arises from the use, or sale, or
the manufacture of the PRODUCTS within the TERRITORY.  The cost of such defense
shall be borne by CELLSEED. CELLSEED may not settle any such third party claim
without the consent of EMMAUS, which shall not be unreasonably withheld. Any
suit, damage claim or demand based on actual or alleged infringements in the
TERRITORY of any intellectual property of a third party resulting from changes
to the PRODUCTS or the process by which they are made in the course of the joint
development efforts by the parties shall be defended by the parties jointly. The
parties shall negotiate to determine which party shall lead the defense and how
the costs of defense should be allocated. Neither party may settle any such
third party claim without the consent of the other party.

 
8.2
Each party shall promptly notify the other party of any suit, damage claim or
demand based on any possible infringement of third party intellectual property
arising from making, using or selling of the PRODUCTS.

 
8.3
In the event that either party becomes aware of a product made, used or sold in
the TERRITORY which it believes to infringe a valid claim of issued CELLSEED
PATENTS, each party shall promptly notify the other party, whereupon the parties
shall consult with each other to determine which party, if any, should take
action. Neither party may settle such claim or action without the consent of the
other party. The parties shall also discuss how the expenses and any recoveries
from such action should be treated. If one party does not agree to participate
in such action, the other can take action at its own expense and shall be
entitled to receive all recoveries.

 
8.4
CELLSEED shall be solely responsible for the prosecution and maintenance of the
CELLSEED PATENTS relating to PRODUCTS (including, but not limited to, the
PRODUCTS, manufacturing process and/or use thereof) in the TERRITORY during the
term of this Agreement. CELLSEED shall grant, pursuant to the terms and
conditions set

 

 
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forth in the relevant INDIVIDUAL AGREEMENT, a license or other appropriate
rights as necessary for EMMAUS to commercially make, use or sell the PRODUCTS to
such relevant CELLSEED PATENTS to EMMAUS in the TERRITORY where CELLSEED PATENTS
are granted. All expenses, including attorney’s fee, in connection with the
prosecution and maintenance of the CELLSEED PATENTS shall be borne by CELLSEED.
 
8.5
CELLSEED shall notify EMMAUS of the issuance of each CELLSEED PATENT relevant to
the PRODUCTS subject to any INDIVIDUAL AGREEMENT then effective, giving the date
of issue and CELLSEED PATENT number for each such CELLSEED PATENT.

 
Article 9:   OWNERSHIP
 
9.1
All intellectual property rights in inventions and/or discoveries created in the
course of this Agreement and each INDIVIDUAL AGREEMENT (the “INTELLECTUAL
PROPERTY RIGHT”) shall be owned by both EMMAUS and CELLSEED jointly, under the
terms and conditions that will be defined by EMMAUS and CELLSEED in a separate
agreement, which shall also state which party shall be responsible for and shall
pay the costs of applying for and prosecuting the patent application(s), and
subsequent maintenance of the patent(s). Such jointly owned inventions and/or
discoveries and related INTELLECTUAL PROPERTY RIGHT shall include those made
jointly by the employee(s) of EMMAUS and CELLSEED, or solely made by the
employee(s) of either party based on CONFIDENTIAL INFORMATION, INTELLECTUAL
PROPERTY RIGHT and/or RIGHTS (as defined below) of the other party. CELLSEED and
EMMAUS shall execute any documents required to perfect such joint ownership.

 
9.2
For intellectual property relating to the PRODUCTS under this Agreement or
INDIVIDUAL AGREEMENT and made independently from CONFIDENTIAL INFORMATION,
INTELLECTUAL PROPERTY RIGHT and/or RIGHTS of the other party and solely by
employee(s) of one of the parties, the ownership of such intellectual property
(“SOLELY OWNED INVENTION”) are held by the party whose employee(s) made the
invention (“LICENSOR”) when LICENSOR obtains written confirmation of the other
party that such SOLELY OWNED INVENTION does not include any of CONFIDENTIAL
INFORMATION, INTELLECTUAL PROPERTY RIGHT and/or RIGHTS of the other party.
Pursuant to the terms and conditions of this Agreement and respective INDIVIDUAL
AGREEMENT(S), LICENSOR will grant a worldwide, perpetual, irrevocable,
non-exclusive, royalty free, fully paid up, sub-licensable, transferable,
license of rights (“LICENSE”) to the other party (“LICENSEE”) to make, use,
sell, have made, offer for sale, have sold products incorporating or made using
such SOLELY OWNED INVENTION and all other rights with regard thereto. In case
LICENSEE desires the LICENSE to be exclusive, LICENSOR shall firstly discuss in
good faith with LICENSEE the terms and conditions to such exclusive license.

 
9.3
Notwithstanding the provision in Article 9.1 through 9.2 above, any and all
INTELLECTUAL PROPERTY RIGHTS in connection with SUBSTRATES shall solely

 
 
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belong to CELLSEED. Any improvement of SUBSTRATES or process of production of
the SUBSTRATES which is patentable shall solely belong to CELLSEED.
 
9.4.1
EMMAUS agrees to disclose promptly to CELLSEED any inventions, discoveries,
improvements, works of authorship, copyrights, trade secrets, know-how and any
equivalents thereof relating to the PRODUCTS (“EMMAUS INVENTIONS”) when arising.

 
9.4.2
Except for any inventions, discoveries or improvements in connection with
SUBSTRATES, CELLSEED agrees to disclose promptly to EMMAUS any inventions,
discoveries, improvements, works of authorship, copyrights, trade secrets,
know-how and any equivalents thereof relating to the PRODUCTS (“CELLSEED
INVENTIONS”) when arising.

 
9.4.3
Both parties acknowledge that EMMAUS INVENTION and CELLSEED INVENTION shall be
deemed as CONFIDENTIAL INFORMATION and agree to treat them in compliance with
Article 10 hereof.

 
9.5
Subject to the obligation of confidentiality under Article 10 hereof and the
publication under Article 11 hereof, all data and results that are created in
the course of this Agreement and/or each INDIVIDUAL AGREEMENT, excluding the
INTELLECTUAL PROPERTY RIGHT (“DATA”) relating to the PRODUCTS, shall be owned by
both EMMAUS and CELLSEED. CELLSEED may use DATA at its sole discretion for its
research and business purpose outside the TERRITORY subject to the restrictions
in the Article 11.2 below.

 
9.6
Each party shall retain all right, title and interest (collectively, “RIGHTS”)
in any patent, patent application, trade secret, know-how and other intellectual
property that was owned by such party prior to the date of this Agreement, or
developed independently of this Agreement, and except for the licenses and
rights granted herein and in a given INDIVIDUAL AGREEMENT with respect to the
RIGHTS, no license grant or assignment, express or implied, by estoppel or
otherwise with respect to the RIGHTS of a party, is intended by, or shall be
inferred from, this Agreement.

 
Article 10:   CONFIDENTIALITY
 
10.1
Each party shall act diligently so as to prevent that any CONFIDENTIAL
INFORMATION, received from the other, might be revealed or disclosed to a
non-authorized third party. The obligation undertaken under this Article 10.1
shall survive for ten (10) years beyond the termination of the last INDIVIDUAL
AGREEMENT executed under this Agreement. The receiving party may disclose
CONFIDENTIAL INFORMATION to its AFFILIATE, provided that the receiving party
shall impose the same degree of confidentiality on the AFFILIATE. Neither party
shall use CONFIDENTIAL INFORMATION of the other party for any purpose other than
to perform the obligations under this Agreement and/or any INDIVIDUAL AGREEMENT.

 
10.2
The obligations undertaken by the parties hereto pursuant to Article 10.1 shall
not, in any event, apply to any information which

 

 
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a)
at the time of disclosure is or thereafter becomes available to the public in
published literature or otherwise through no fault of the receiving party;

 
b)
was known to, or otherwise in the possession of the receiving party prior to the
receipt of such information from the other party as evidenced by the written
records of the receiving party;

 
c)
is obtained by the receiving party from a third party who would not be breaching
a commitment of confidentiality by disclosing such information;

 
d)
was independently developed by the receiving party’s employee who did not have
access to the disclosed information; and,

 
e)
was disclosed in accordance with Article 11.

 
10.3
Each party recognizes that the other party may have in its possession or control
information in respect of which it is bound by confidentiality obligations to a
third party. For the avoidance of doubt, neither party shall be under any
obligation to disclose to the other information in respect of which it is or
reasonably considers itself to be bound by any such obligation.

 
10.4
The parties agree to co-operate in good faith to set up and maintain such
organizational structures, safeguards and procedures as may be required to
prevent disclosure by one party to the other, whether accidentally or otherwise,
of any such information as is referred to in Article 10.3 above.

 
Article 11:   PUBLICITY AND PUBLICATION
 
11.1
CELLSEED and EMMAUS agree not to disclose any press release or other public
statement disclosing the existence of or relating to this Agreement without the
prior written consent of the other party, provided, however, that neither party
shall be prevented from complying with any duty of disclosure (including SEC
filing) it may have pursuant to securities or other applicable law and/or
applicable regulation of stock exchanges.

 
11.2
If each party wishes to publish or present information generated in the course
of performance of this Agreement and/or respective INDIVIDUAL AGREEMENT relating
to the PRODUCTS in a scientific journal or conference proceeding, it shall
furnish a copy of the proposed manuscript or presentation outline to the other
party as soon as practicable, but in no event less than ninety (90) days before
manuscript submission or the presentation date, to permit for the protection of
such information, e.g. by filing of a patent application prior to such proposed
disclosure.

 
Article 12:   INDEMNIFICATION
 
12.1
CELLSEED shall indemnify and hold EMMAUS, its AFFILIATES, and the officers,
directors and employees of each of them, harmless from any and all liability,
including liability for death or personal injury and reasonable attorney’s fees,
which results:

 
a)
from the negligence or willful misconduct of CELLSEED;

 
b)
from the manufacture and/or packaging of PRODUCTS by CELLSEED.

 
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c)
from the breach by CELLSEED of any covenant, representation or warranty
contained in this Agreement and/or each INDIVIDUAL AGREEMENT, and if applicable;
or,

 
d)
from CELLSEED’s or its assigned third party’s failure to manufacture the
PRODUCTS in accordance with the SPECIFICATIONS.

 
12.2
EMMAUS shall indemnify and hold CELLSEED, its AFFILIATES and the officers,
directors and employees of each of them, harmless from any and all liability,
including liability for death or personal injury and reasonable attorney’s fees,
which results:

 
a)
from the negligence or willful misconduct of EMMAUS with regard to the use of,
and/or delivery and supply of, promotion, marketing, sale and distribution of
the PRODUCTS;

 
b)
from the manufacture and/or packaging of PRODUCTS by EMMAUS if EMMAUS deviated
from the applicable SPECIFICATIONS and instructions from CELLSEED;

 
c)
from the breach by EMMAUS of any covenant, representation or warranty contained
in this Agreement and/or each INDIVIDUAL AGREEMENT and if applicable; or,

 
d)
from EMMAUS’s or its assigned third party’s failure to manufacture the PRODUCTS
in accordance with the applicable SPECIFICATIONS.

 
Neither PARTY shall indemnify the other PARTY for any manufacture of any PRODUCT
which is manufactured pursuant to SPECIFICATIONS developed jointly by the
PARTIES pursuant to this AGREEMENT or INDIVIDUAL AGREEMENT.
 
12.3
The obligations of the indemnifying party under Article 12.1 and 12.2 are
conditioned upon the prompt written notification to the indemnifying party of
any of the aforementioned suits or claims. The indemnifying party shall have the
right to assume the defense of any such suit or claim if it has assumed
responsibility for the suit or claim, in writing; however, if in the reasonable
judgment of the indemnified party, such suit or claim involves an issue or
matter which could have a materially adverse effect on the business, operations
or assets of the indemnified party, the indemnified party may control the
defense or settlement thereof without waiving its right to seek indemnity for
such claim. If the indemnified party defends the claim, the indemnified party
may participate in the defense of such suit or claim at its sole cost and
expense. There shall be no indemnification liability against a party as to any
suit or claim for which settlement or compromise or an offer of settlement or
compromise is made without the prior written consent of the indemnifying party.

 
12.4
Both parties shall carry policies of comprehensive general commercial liability
and product liability insurance with respect to their obligations under this
Agreement and/or each INDIVIDUAL AGREEMENT under ordinary terms and conditions,
as well as under standard limits within the pharmaceutical industry. The
existence of such policies shall be confirmed by either party upon request of
the other party.

 
Article 13:   ASSIGNMENT
 
Neither this Agreement, nor any INDIVIDUAL AGREEMENT nor any rights or benefits
or obligations hereunder or under any INDIVIDUAL AGREEMENT shall be assignable
 

 
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or transferable by either of the parties hereto without the prior written
consent of the other party, which shall not be unreasonably withheld, except
that this Agreement may be assigned to an AFFILLIATE of a party, or this
Agreement may be assigned to an acquirer of a party as a result of a change of
control, merger, purchase of substantially all of the assets of a party or a
similar event, without the consent of the other party.
 
Article 14:   TERM
 
14.1
This Agreement shall come into effect on the Effective Date and shall be valid
until the date of the last to expire or terminated INDIVIDUAL AGREEMENT, unless
earlier terminated by a party subject to the provisions of Article 15 hereunder.
In case that neither party notifies the other party of its intention of
non-renewal ninety (90) days prior to the expiration, this Agreement shall
automatically be renewed for successive one (1) year terms.

 
14.2
If this Agreement is terminated, CELLSEED shall forthwith regain the right to
sell PRODUCTS under its own trademark within the TERRITORY.

 
14.3
Article 8: INTELLECTUAL PROPERTY AND INFRINGEMENT, Article 9: OWNERSHIP, Article
10 CONFIDENTIALITY, Article 12: INDEMNIFICATION, Article 13: ASSIGNMENT, Article
16: GOVERNING LAW AND ARBITRATION, Article 18 : ENTIRE AGREEMENT; SEVERABILITY,
Article 22: BINDING AGREEMENT shall survive the termination or expiration of
this Agreement or the last INDIVIDUAL AGREEMENT.

 
Article 15:   TERMINATION
 
15.1
A party shall have a right to terminate this Agreement and/or INDIVIDUAL
AGREEMENT(s) in effect by written notice to the other party upon the occurrence
of any of the following events:

 
 
(a)
Breach by the other party of any material term or condition of this Agreement
and/or INDIVIDUAL AGREEMENT(s) in effect, provided that the party in breach
shall be notified in writing by the non-breaching party of such alleged breach,
and shall have a period of sixty (60) days within which to rectify such breach.

 
 
(b)
In the event the other party is declared bankrupt or insolvent, or make an
assignment for the benefit of its creditors, or if a receiver is appointed or
any proceedings are commenced, voluntary or involuntary, by or against either
party under any bankruptcy or similar law, and such status is not cured within
thirty (30) days from its occurrence.

 
15.2
CELLSEED has the right to terminate this Agreement and/or INDIVIDUAL
AGREEMENT(s) in effect, if during the term of this Agreement or INDIVIDUAL
AGREEMENT (i) EMMAUS commercializes a regenerative product other than PRODUCTS
which compete with PRODUCTS without express prior permission by CELLSEED, or
(ii) besides (i) above, EMMAUS enters into partnership with one of the

 

 
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competitors of CELLSEED who develops, manufactures, sells, and/ or distributes
products which are similar to or have same functionality of the products
developed, manufactured, and/or distributed by CELLSEED.
 
Article 16:   GOVERNING LAW AND ARBITRATION
 
16.1
This Agreement and/or respective INDIVIDUAL AGREEMENT shall be governed by and
construed in accordance with the laws of the state of New York, exclusive of the
choice of law rules thereof.

 
16.2
Other than matters within the responsibility of the JDC and JMC, for which the
procedure of amicable settlement is described in the relevant articles, each
party hereto agrees to settle any dispute and differences arising out of or in
connection with this Agreement and/or respective INDIVIDUAL AGREEMENT, or the
breach thereof, through good faith negotiation in an amicable manner. In the
event a consensus cannot be obtained with regard to such dispute or breach, the
Head of Pharma Division of CELLSEED and the Head of Pharma Division of EMMAUS
shall discuss the matter and attempt to solve it. In case a mutually acceptable
solution to such dispute or breach cannot be found, such dispute or breach shall
be finally settled by arbitration pursuant to the Rules Conciliation and
Arbitration of the International Chamber of Commerce as hereinafter provided by
three (3) arbitrators appointed in the Rules and the decision of the arbitrators
shall be final. Such arbitration shall take place in Wilmington, Delaware.

 
Article 17:   FORCE MAJEURE
 
Neither party shall be responsible nor liable to the other party for failure or
delay in the performance of this Agreement and/or any INDIVIDUAL AGREEMENT
(other than the obligation to make payments) due to any war, fire, accident, or
other casualty, or any labor disturbance or act of God or the Public enemy, or
any other contingency beyond such party’s reasonable control.
 
Article 18:   ENTIRE AGREEMENT; SEVERABILITY
 
18.1
This Agreement sets forth the entire agreement of the parties with respect to
subject matter contained herein and supersedes and replaces any and all previous
agreement between the parties on the subject matter. This Agreement may not be
modified or amended except as expressly stated herein or by a written agreement
duly executed by both parties hereto.

 
18.2
CELLSEED and EMMAUS hereby expressly state that it is the intention of neither
party to violate any rule, law or regulation. If any of the provisions of this
Agreement are held to be void or unenforceable with regard to the TERRITORY,
then such void or unenforceable provisions shall be replaced with valid and
enforceable provisions which will achieve as far as possible the economic
business intentions of the parties.

 

 
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Article 19:   INDEPENDENT CONTRACTOR
 
This Agreement or INDIVIDUAL AGREEMENT shall not be construed to constitute a
partnership joint venture or agency relationship of any kind.
 
Article 20:   NOTICES
 
Any notice or communication required or permitted to be given or made under this
Agreement by one of the parties hereto to the other shall be in writing and
shall be deemed to have been sufficiently given or made for all purposes if
mailed by registered mail, postage prepaid, addressed to such other party at its
respective address as follows:
 
CELLSEED Inc.
R-Bldg, Shinjuku 1F, 33-8,
Wakamatsu-cho, Shinjuku-ku,
Tokyo 162-0056
Japan
Attn: Dr. Yukio Hasegawa, President & CEO
 
Emmaus Medical, Inc.
20725 S. Western Ave., Suite 136
Torrance, CA 90501-1884, U.S.A.
Attn: Dr. Yutaka Niihara, President & CEO
 
Article 21:   HEADINGS
 
The headings in this Agreement are for convenience only and shall not be
considered in construing this Agreement.
 
Article 22:   BINDING AGREEMENT
 
This Agreement shall be binding on and inure to the benefit of the parties and
their successors and permitted assignees.
 
Article 23:   NO THIRD PARTY BENEFIT
 
None of the provisions of this Agreement shall be for the benefit of or
enforceable by any third party.
 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement, through their
duly appointed and authorized representatives, to be executed in duplicate as of
the date executed by both parties.
 
 
Emmaus Medical, Inc.
 
Signed /s/ Yutaka Niihara                                        
 
Name  Yutaka Niihara
 
Title President and CEO
 
Date  April 8, 2011                                                     
CellSeed Inc.
 
Signed /s/ Yukio Hasegawa                                    
 
Name  Yukio Hasegawa
 
Title President and CEO
 
Date April 8, 2011                                                     

 
 
 
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