NON-EXCLUSIVE LICENSE
AGREEMENT
This
Non-Exclusive License Agreement (the “ Agreement
”) is entered into and effective as of December 12, 2006
(“ Effective Date ”), by and between Helix
BioMedix, Inc. a Delaware corporation with its principal place of
business at 22122 — 20th Avenue SE, Bothell, WA 98021
(“ Licensor ”), and Grant Industries, Inc. a New
Jersey corporation with its principal place of business at 103 Main
Avenue, Elmwood Park, NJ 07407 (“ Licensee ”).
Licensor and Licensee each may be referred to in this Agreement
individually as a “ Party ” or collectively as
the “ Parties .”
WHEREAS,
Licensor has developed a library of proprietary bioactive peptides;
and
WHEREAS,
Licensee desires to obtain a non-exclusive license to market, sell
and distribute certain of such peptides, either alone or in
conjunction with other products, upon the terms and conditions
hereinafter set forth.
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, do agree
as follows:
For
the purposes of this Agreement, the following words and phrases
shall have the following meanings:
1.1
“ Affiliate ” means any entity that directly or
indirectly through one or more intermediaries, controls, is
controlled by or is under common control with another entity. For
purposes of this definition only, “control”, and, with
correlative meanings, the terms “controlled by” and
“under common control with” shall mean (a) the
possession, directly or indirectly, of the power to direct the
management or policies of a party, whether through the ownership of
voting securities or by contract relating to voting rights or
corporate governance, or (b) the ownership, directly or
indirectly, of more than twenty-five percent (25%) of the voting
securities or other ownership interest of a party; provided that,
if local law restricts foreign ownership, control will be
established by direct or indirect ownership of the maximum
ownership percentage that may, under such local law, be owned by
foreign interests.
1.2
“ Applicable Law ” means the applicable laws,
rules, and regulations, including any rules, regulations,
guidelines, or other requirements of the Regulatory Authorities,
that may be in effect from time to time in the
Territory.
Confidential
treatment has been requested for portions of this exhibit. This
exhibit omits the information subject to the confidential treatment
request. Omissions are designated as [***]. A complete version of
this exhibit has been filed separately with the Securities and
Exchange Commission.
1
1.3
“ Confidential Information ” means the terms and
conditions of this Agreement, all non-public information related to
the Peptides, all Know-How, and all other information, data,
reports and other records that a Party to this Agreement receives
from the other Party to this Agreement.
1.4
“ GAAP ” means United States generally accepted
accounting principles consistently applied.
1.5
“ Know-How ” means trade secrets, knowledge,
information, expertise, data, materials and know-how that are
owned, have been developed and/or created or are developed during
the term of this Agreement by or for the Licensor related to the
research, development, use or manufacture of the
Peptides.
1.6
“ Market ” means the cosmetic- and
over-the-counter- personal-care products market.
1.7
“ Net Revenue ” means [***].
1.8
“ Patents ” means the patents and patent
applications set forth in Exhibit A .
1.9
“ Peptides ” means Licensor’s proprietary
bioactive peptides described in Exhibit A attached to
this Agreement. Licensor may add peptides that are proprietary to
Licensor to Exhibit A at its sole
discretion.
1.10
“ Premix ” means a formulation other than a
final formulation that is manufactured by Licensee and that
incorporates any single Peptide (as defined above), regardless of
what ingredients (of Licensee or any third party) other than
Peptide may be included in such formulation.
1.11
“ Regulatory Authorities ” means any applicable
governmental entities regulating or otherwise exercising authority
in the Territory.
1.12
“ Royalties ” means the royalties payable by
Licensee set forth in Exhibit C , which shall be paid
in accordance with Section 3.
1.13
“ Sublicensee ” means any third party to which
rights hereunder are sublicensed in accordance with
Section 2.2 (including any further sublicensees of a
sublicensee).
1.14
“ Territory ” means the countries or other
geographic areas set forth in Exhibit B , as such
exhibit may be amended from time to time pursuant to the terms
hereof.
2.1
License . Subject to the terms and conditions of this
Agreement, Licensor hereby grants to Licensee a non-exclusive right
and license, under the Patents and the Know-How, to (i) purchase
the Peptides in pure form, at Licensee’s expense, from [***]
or another manufacturer
[***] Certain
information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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approved in
advance by Licensor in writing (or from Licensor, subject to
availability and on terms as may be agreed between Licensee and
Licensor); (ii) formulate the Peptides into Premix; provided
that no Premix may contain more than one Peptide; and
(iii) market, sell and distribute the Premix to manufacturers
in the Market in accordance with Section 2.2, in each case in
the Territory and for commercial purposes only. The licenses
granted herein shall be non-exclusive, and Licensee acknowledges
and agrees that Licensor intends to grant the same or similar
rights to other parties.
2.2
Sublicense . Subject to the terms and conditions of this
Agreement, Licensee may grant rights to third parties that purchase
Premix from Licensee to (i) market, sell and distribute such
Premix to manufacturers in the Market and (ii) incorporate
such Premix into final products within the Market and market, sell
and distribute such final products, in each case in the Territory
and for commercial purposes only. Licensee shall notify Licensor of
the identity of each Sublicensee promptly after any sublicense of
rights is made hereunder. Licensee shall recommend in writing to
each Sublicensee that Peptide (considered in pure form) be present
in any final formulation at a concentration level not less than
those set forth in Exhibit A with respect to each
Peptide, and as agreed between the Parties with respect to any
Peptide that may be added to Exhibit A pursuant to
Section 1.9. Further, Licensee shall use its best efforts to
prevent any use, sale, marketing or distribution of Premix or any
product containing Premix by any third party in a manner
inconsistent with the terms or intent of this Agreement, and
failing such prevention, to promptly notify Licensor of any such
inconsistent use, sale, marketing or distribution by a third
party.
2.3
No Other Rights . Except as expressly set forth in this
Agreement, Licensor shall retain all right, title and interest in
and to the Patents, the Peptides and all Know-How, and nothing in
this Agreement shall be construed to confer any rights upon
Licensee by implication, estoppel or otherwise other than as
expressly set forth in this Agreement.
2.4
Modification of Territory . Exhibit B may be
amended from time to time upon request by Licensee and with the
consent of Licensor, which consent shall not be unreasonably
withheld. Without limiting the generality of the foregoing,
Licensor’s withholding of consent shall be deemed reasonable
as to a country or geographic region if at the time of the request
by Licensee, Licensor is or is considering doing business (directly
or indirectly) with respect to such country or geographic region,
which business involves or may involve any Peptide.
2.5
No Assignment of Improvements . For avoidance of doubt,
Licensee does not assign or otherwise transfer to Licensor
hereunder any right, title or interest in or to any improvements or
inventions relating to, based upon, or derived from the Peptides
that may be made by Licensee in connection with its performance
under this Agreement.
3.1
Royalties . Within thirty (30) days after the end of
each calendar month during the term of this Agreement, Licensee
shall provide to Licensor records that fairly reflect the
Net
[***] Certain
information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
3
Revenue
attributable to such calendar month and the concentration of
Peptide in any Premix from which such Net Revenue was derived. The
Royalties owing on the basis of such records shall be invoiced to
Licensee by Licensor and shall be paid by Licensee within thirty
(30) days of the date of each invoice.
3.2
Minimum Royalties . Licensee agrees to comply with the
minimum Royalty payment obligations set forth in
Exhibit C hereto during the term of this
Agreement.
3.3
Payment Method . All amounts payable by Licensee to Licensor
pursuant to this Agreement shall be paid in U.S. dollars by wire
transfer in immediately available funds to an account designated by
Licensor. Any payments or portions thereof due hereunder which are
not paid on the date such payments are due under this Agreement
shall bear interest at a rate equal to the lesser of (i) the
prime rate as published in The Wall Street Journal, Western
Edition, on the first day of each calendar month in which such
payments are overdue, plus seven percentage points, or if less,
(ii) the maximum rate permitted by law, calculated on the
number of days such payment is delinquent, compounded
monthly.
4.1
Progress Reports . Each month during the term, the Parties
shall discuss via teleconference or other agreed-upon means the
progress of the Agreement, in connection with which Licensee shall
(a) describe any commercialization activities with respect to
the Peptides and any other work relating to the Peptides that it
has performed, or caused to be performed, since the last such
report, (b) evaluate the work performed in relation to the
goals of this Agreement and Licensee’s work plans and
(c) provide such other information as may be required by this
Agreement or reasonably requested by Licensor relating to such
activities.
4.2
Record Retention . Licensee shall maintain complete and
accurate books, records and accounts that fairly reflect Peptide
concentrations and quantities sold by customer in sufficient detail
and in accordance with GAAP to confirm Licensee’s compliance
with the terms and conditions of this Agreement and the accuracy of
any payments required hereunder, which books, records and accounts
shall be retained by Licensee until the later of (i) three
(3) years after the end of the period to which such books,
records and accounts pertain and (ii) such longer period as
may be required under Applicable Law.
4.3
Audit . Licensor shall have the right to have an independent
certified public accounting firm of nationally recognized standing,
reasonably acceptable to Licensee, have access during normal
business hours, and upon reasonable prior written notice, to such
records of the Licensee as may be reasonably necessary to verify
compliance by Licensee with the terms and conditions of this
Agreement and the accuracy of any payments required hereunder for
any calendar month ending not more than forty-eight
(48) months prior to the date of such request; provided,
however, that Licensor shall not have the right to conduct more
than one such audit in any twelve (12)-month period. Licensor shall
bear the cost of such audit unless the audit reveals a variance in
any payments required hereunder of more than 5%, in which case
Licensee shall bear the cost of the audit.
[***] Certain
information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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4.4
Payment of Additional Amounts . If, based on the results of
an audit, additional payments are owed by Licensee, it shall make
such additional payments, with interest from the date originally
due at the rate of 1% per month, within thirty (30) days after
the date on which the accounting firm’s written report is
delivered to Licensee.
4.5
Confidentiality . Licensor shall treat all information
subject to review under this Section 4 in accordance with the
confidentiality provisions of Section 6 of this
Agreement.
5.1
Infringement . In the event that Licensee learns of
(i) any infringement of any of the Patents or (ii) any
misappropriation of any of the Know-How, Licensee shall promptly
inform Licensor in writing and Licensor may elect to initiate and
prosecute legal proceedings with respect thereto at
Licensor’s cost and expense. In the event that Licensor
elects not to pursue such legal proceedings, Licensee shall have
the right to do so at Licensee’s cost and expense.
5.2
Cooperation . In any infringement suit instituted by
Licensor or Licensee pursuant to this Agreement, Licensor or
Licensee as the case may be shall, at the other Party’s
request and expense, cooperate in all reasonable respects and, to
the extent possible, have its employees testify when requested and
make available relevant records, papers, information, samples,
specimens and the like.
6 – CONFIDENTIAL
INFORMATION
6.1
Confidential Information . Each Party (“ Receiving
Party ”) shall treat the terms and conditions of this
Agreement and all of the Confidential Information that it receives
from the other Party (“ Disclosing Party ”) as
secret, confidential, and proprietary of the Disclosing Party and
shall not disclose or use such Confidential Information of the
Disclosing Party without the prior written consent of the
Disclosing Party for any purpose except as expressly permitted
under this Agreement. The Receiving Party shall develop and
implement such procedures as may be required to prevent the
intentional or negligent disclosure to third parties of such
Confidential Information of the Disclosing Party, including, but
not limited to, requiring each of its employees having access to
Confidential Information of the Disclosing Party to enter into a
proprietary information agreement consistent with, and no less
protective of the Disclosing Party’s rights in the
Confidential Information than, the terms set forth in this
Section 6 and in this Agreement. Notwithstanding the
foregoing, each Party shall have the right to disclose Confidential
Information as required by law (using reasonable best efforts to
redact, where permitted by law), and to its auditors, accountants,
potential investors and potential acquirers under appropriate
non-disclosure agreements.
6.2
Exclusions . Notwithstanding the foregoing, nothing in this
Agreement shall prevent the disclosure or use by the Receiving
Party of the Disclosing Party’s Confidential Information
that:
[***] Certain
information has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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(a) prior
to the transmittal thereof to the Receiving Party was of general
public knowledge;
(b) becomes, subsequent to the time of
transmittal to the Receiving Party, a matter of general public
knowledge otherwise than as a consequence of a breach by the
Receiving Party of any obligation under this Agreement;
(c) is
made public by the Disclosing Party;
(d) was in
the possession of the Receiving Party in documentary form prior to
the time of disclosure thereof to the Receiving Party by the
Disclosing Party, and is held by the Receiving Party free of any
obligation of confidence to the Disclosing Party or any third
party; or
(e) is
received in good faith from a third party having the right to
disclose it, who did not obtain such Confidential Information from
the Disclosing Party and who imposes no obligation of secrecy on
the Receiving Party with respect to such Confidential
Information.
7 – REPRESENTATIONS AND
WARRANTIES
7.1
Representations and Warranties of Licensor . Licensor
represents and warrants that: (i) there are no actions or
claims pending, nor to the best of its knowledge, threatened,
against Licensor alleging infringement of any patent, copyright,
trademark or other intellectual property right relative to the
Peptides; (ii) the grant of rights and licenses by Licensor to
Licensee under this Agreement is not inconsistent with the terms
and conditions of any obligations of Licensor; (iii) no
authorization or consent is required for Licensor to grant the
rights and licenses under this Agreement or for Licensor to enter
into this Agre
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