This License
Agreement (the “Agreement”) is entered into as of
April 18, 2007 between DermaVentures, LLC an Illinois limited
liability company with its principle place of business at 440 S.
LaSalle St., Suite 3400, Chicago, IL 60605
(“Licensee”) and Helix BioMedix, Inc., a Delaware
corporation with its principle place of business at 22118 20th
Avenue SE, Suite 204, Bothell, WA 98021
(“Licensor”).
WHEREAS, Licensee
was formed on December 21, 2006 for the purpose, without
limitation, of marketing and selling skin care products;
WHEREAS, RMS
Group, LLC, an Illinois limited liability company (“
RMS ”) and Licensor are the sole members of
DermaVentures, LLC and are bound by the terms and conditions of
that certain Operating Agreement of DermaVentures, LLC dated as of
January 31, 2007 (the “ DermaVentures LLC
Agreement ”);
WHEREAS, Licensee,
Licensor, and RMS are parties to a Management Services Agreement of
even date herewith (the “ Management Agreement
”) that specifies certain management services that Licensor
will provide and imposes certain terms and conditions on the
parties thereto in connection with the operation and management of
Licensee under the DermaVentures LLC Agreement; and
WHEREAS, the
parties wish to enter into this Agreement to provide for the
license by Licensor to Licensee of certain technology.
1.1
An “Affiliate” of a party means an entity directly or
indirectly controlling, controlled by or under common control with
that party, where control means the ownership or control, directly
or indirectly, of more than 50% of all of the voting power of the
shares (or other securities or rights) entitled to vote for the
election of directors or other governing authority, as of the date
of this Agreement or hereafter during the term of this Agreement;
provided that such entity shall be considered an Affiliate only for
the time during which such control exists.
1.2
“Disclosing Party” means a party hereto that discloses
its Proprietary Information to the other party.
* * *
Confidential treatment requested
1.4
“Peptide(s)” means Licensor’s proprietary
bioactive peptide(s) described in Exhibit A .
1.5
“Product” means the final, marketable cosmetic or
over-the-counter personal care formulations incorporating
Peptide(s) that are set forth in Exhibit B . Additional
Products may be added to Exhibit B by agreement of the
parties.
1.6
“Proprietary Information” of a Disclosing Party means
the following, to the extent previously, currently or subsequently
disclosed to the other party hereunder or otherwise: information
relating to the properties, composition, or structure of technology
or the manufacture or processing thereof or machines therefor or to
the Disclosing Party’s business (including, without
limitation, names and expertise of employees and consultants,
know-how, formulas, processes, ideas, inventions (whether
patentable or not), schematics, and other technical, business,
financial, customer and product development plans, forecasts,
strategies and information). In particular, but without limitation,
the Peptides and their properties, composition, or structure, and
the Technology, are Proprietary Information of Licensor.
1.7
“Proprietary Rights” means patent rights, copyrights,
trade secret rights and all other intellectual and industrial
property rights of any sort.
1.8
“Receiving Party” means a party hereto that receives
Proprietary Information of the other party.
1.9
“Technology” means inventions (whether or not
patentable), ideas, processes, formulas and know-how owned by
Licensor as of the date of this Agreement and relating to the
Peptides.
1.10
“Territory” means geographic territories as listed in
Exhibit C , without limitation to marketing channel or
class of trade.
2.
License Grant . Subject to all the terms and limitations of
this Agreement, Licensor hereby grants Licensee a license under its
Proprietary Rights in the Technology. The license is limited to and
may be exercised solely for the purposes of: (i) performing
evaluation and testing of the Peptide to determine suitability as a
functional ingredient in Products, including without limitation
toxicity and effectiveness tests and trials; (ii) making
Products; and (iii) marketing (including selling and offering
to sell) Products to distribution customers and end consumers, in
each case solely in the Territory. Licensee will not market pure
Peptide or sublicense rights hereunder with respect to Peptide, but
may sell Products at wholesale to other marketers within the
Territory and may combine two or more Peptides into a Product for
marketing under this license.
3. License
Scope . Licensee’s license is non-exclusive. Licensee may
grant rights by way of sublicense through wholesale sales of
Product to distribution customers to permit those customers to
market Product (but not to market or otherwise distribute the
Peptides other than as incorporated into Product); provided that
each such Product customer is bound to all the limitations and
restrictions on Licensee hereunder. Licensee shall give notice to
Licensor promptly upon any such wholesale sale to a third party
hereunder. No such grant of rights to a wholesale customer of
Licensee may be further sublicensed; Product sold by Licensee on a
wholesale basis may only be sold directly or through Affiliates of
that wholesale customer to end consumers within the Territory.
Notwithstanding the restrictions on sublicensing set forth in this
Section 3, Licensee may extend the licenses granted above
to
2
its Affiliates
(for so long as they remain Affiliates), provided that all such
Affiliates become bound in writing (for Licensor’s benefit)
to Licensee’s obligations under this Agreement, that Licensee
assumes full responsibility for compliance by such Affiliates with
such obligations, and that all payments and reports from Affiliates
will be made through Licensee together with Licensee’s
payments and reports.
4.
Transfer of Technology . To carry out the physical transfer
of Peptides to Licensee, Licensee will have the right to purchase,
at Licensee’s expense, the Peptides from a manufacturer
approved in advance by Licensor, such approval not to be
unreasonably withheld. Licensee may also purchase the Peptides from
Licensor, at Licensee’s expense, subject to availability and
on terms as may be agreed between Licensee and Licensor.
5.
Improvements . Any modifications or improvements to or on
the Peptides or Technology (whether or not patentable or
copyrightable) that either party develops shall be owned solely by
Licensor. Licensor shall have the right, at its own expense and
solely in its own name, to apply for, prosecute and defend its
Proprietary Rights with respect thereto. Licensor’s existing
relevant patents and patent applications in the Territory are
listed on Exhibit A . Licensee will promptly disclose
to Licensor and hereby assigns to Licensor any modifications or
improvements to or on the Peptides or Technology that may be made
by or for Licensee (the “ Licensee Improvements
”) (provided that this provision will not be deemed to grant
to Licensee any right or license not expressly granted herein,
including, without limitation, any right to disclose Proprietary
Information of Licensor). Licensor hereby grants back to Licensee a
worldwide, royalty-free, non-exclusive, sublicensable license to
fully exploit the Licensee Improvements. Licensee shall not license
or otherwise grant rights in any modifications or improvements
derived from or based on any Licensor Proprietary Information to
third parties.
6.
Marketing Efforts . Licensee will use best commercial
efforts to successfully market the Products under its license on a
continuous basis. As part of such efforts, but without limitation,
Licensee will spend the money, dedicate the people and resources
and perform the promotional and other obligations specified in
Exhibit D .
7. Marks
and Marking . Except to the extent otherwise decided by
Licensor, all promotional materials and packaging of Licensee
relating to the subject matter of this Agreement will include (in
easily readable, non-obscured type that is of reasonable size in
light of the other names and notices) any reasonable patent, patent
application or other proprietary markings and notices of Licensor
or its licensors. Licensor will have the right of prior approval
with respect to any promotional materials, packaging or statements
regarding the Peptides and Products, and the use of any mark, name,
or designation of Licensor. Except as expressly provided herein,
(i) Licensee will not use or register any mark, name, or
designation of Licensor or its licensors anywhere in the world and
(ii) Licensee has no right or license with respect to any
mark, name, or designation of or used by Licensor. Use of any
Licensor mark and any related goodwill will inure to
Licensor’s benefit.
8.1
Licensee will pay Licensor a royalty of ***%.
8.2
Royalties will be paid within 30 days of the end of each month
with respect to royalty-bearing sales occurring in that month, and
will be accompanied by a statement indicating the associated ***
and royalties payable (including currency conversions), itemized by
Product. At Licensor’s request, Licensee will also provide to
Licensor records of Licensee (and its Affiliates, as applicable)
that fairly reflect the *** attributable to a particular month.
Royalties shall be paid by Licensee in U.S. dollars from a location
in the U.S., with currency conversions calculated based upon the
applicable closing exchange rates quoted by the Citigroup foreign
exchange desk on the last business day
* * *
Confidential treatment requested
3
of the
applicable month. Any amount payable hereunder that is not paid on
the date that it becomes due will bear interest, calculated based
on the number of days such payment is late and compounded monthly,
at a rate of the lesser of (i) 1% per month or (ii) the
maximum rate permitted by applicable law.
8.3
Licensee and its Affiliates shall keep and maintain detailed and
accurate books and records with regard to *** and the calculation
thereof, except to the extent that Licensor is responsible for
keeping and maintaining such records pursuant to the Management
Agreement. Licensor or its representatives (or, at Licensor’s
option, a reputable independent certified public accounting firm
selected by Licensor) shall be entitled to review and audit such
books and records from time to time, but no more than once per
year, during normal business hours upon reasonable notice to
Licensee and at Licensor’s expense; provided that Licensee
will bear any such expense if the review or audit shows an
underpayment of more than 5% for any calendar month or in the
aggregate.
8.4
At Licensor’s request, the parties agree to discuss, via
teleconference or other agreed-upon means, progress under this
Agreement (such request not to be made for more than discussion per
month during the term hereof), in connection with which Licensee
shall: (i) describe any evaluation, testing, and
commercialization activities with respect to the Products and any
other work relating to the Peptides and Products that it has
performed, or caused to be performed, since the last such report;
(ii) evaluate the work performed in relation to the goals of
this Agreement and Licensee’s work plans; and
(iii) provide such other information as may be required by
this Agreement or reasonably requested by Licensor.
9. No
Restriction on Competition . Nothing in this Agreement shall be
deemed to prohibit Licensee from developing, making, using,
marketing or otherwise distributing or promoting products
competitive with Products produced hereunder, provided that
Licensee does not breach any provision of this Agreement
(including, without limitation, Section 10 (Confidentiality))
or disparage the Peptides or any Products produced
hereunder.
10.
Confidentiality . Each party recognizes the importance to
the other of the other’s Proprietary Information. In
particular Licensee recognizes that the Peptides and Technology and
other of Licensor’s Proprietary Information (and the
confidential nature thereof) are critical to the business of
Licensor and that Licensor would not enter into this Agreement
without assurance that such technology and information and the
value thereof will be protected as provided in this Section 10
and elsewhere in this Agreement. Likewise, Licensor recognizes that
the product formulation and marketing methods of Licensee are
valuable trades secrets of Licensee and are critical to the
business of Licensee and that Licensee would not enter into this
Agreement or the Management Agreement without assurance that such
technology and information and the value thereof will be protected
as provided in this Section 10 and elsewhere in this
Agreement.
Accordingly, each
party agrees as follows:
10.1
The Receiving Party agrees: (i) to hold the Disclosing
Party’s Proprietary Information in confidence and to take
reasonable precautions to protect such Proprietary Information
(including, without limitation, all precautions the Receiving Party
employs with respect to its confidential materials); (ii) not
to divulge (except pursuant to a sublicense expressly authorized in
this Agreement) any such Proprietary Information or any information
derived therefrom to any third person; (iii) not to make any
use whatsoever at any time of such Proprietary
Informatio
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