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AGREEMENT TO SUBLICENSE

Real Estate License Agreement

AGREEMENT TO SUBLICENSE | Document Parties: NATURAL ALTERNATIVES INTERNATIONAL INC | Compound Solutions, Inc | Natural Alternatives International, Inc You are currently viewing:
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NATURAL ALTERNATIVES INTERNATIONAL INC | Compound Solutions, Inc | Natural Alternatives International, Inc

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Title: AGREEMENT TO SUBLICENSE
Date: 5/13/2009
Industry: Biotechnology and Drugs     Sector: Healthcare

AGREEMENT TO SUBLICENSE, Parties: natural alternatives international inc , compound solutions  inc , natural alternatives international  inc
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Exhibit 10.44

AGREEMENT TO SUBLICENSE

This Agreement to Sublicense (“ Agreement ”) is made and entered into effective as of March 3, 2009 (“ Effective Date ”), by and between Natural Alternatives International, Inc., a Delaware corporation (“ NAI ”), and Compound Solutions, Inc., a California corporation (“ CSI ”).

RECITALS

A. NAI is a party to that certain License Agreement effective as of April 28, 1997, by and among Roger Harris and Mark Dunnett (collectively, the “ Licensors ”) and NAI, as amended by that certain Amendment to License Agreement dated March 17, 2001, as further amended by that certain Second Amendment to License Agreement dated March 26, 2007, and as may be further amended from time to time (the “ License Agreement ”).

B. The License Agreement grants NAI a sublicenseable, exclusive, worldwide license to manufacture, use, sell, offer for sale and otherwise commercially dispose of certain Licensed Products (as hereinafter defined) made in accordance with or incorporating the Licensed Rights (as hereinafter defined).

C. NAI is also the owner of certain registered trademarks related to the mark “Carnosyn” (as further described herein below and collectively, the “ Trademark Rights ”).

D. CSI is in the business of raw material sourcing and sales, including the sourcing and sale to third parties of certain raw materials set forth on Exhibit A attached hereto that are necessary for the design, research, development and formulation of Licensed Products (the “ Raw Materials ”).

E. CSI desires NAI grant to third parties who purchase the Raw Materials from CSI a sublicense of certain of its Licensed Rights under the License Agreement and a license to use its Trademark Rights, and NAI desires to grant such sublicenses and licenses in accordance with the terms and conditions of this Agreement.

Incorporating the foregoing recitals and in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

 

1.

DEFINITIONS .

1.1 “Field of Use” means dietary supplements and other foods for human performance nutrition. For avoidance of doubt, the Field of Use does not include the use of the Raw Materials and/or Licensed Rights to treat dogs, horses and/or camels or for any human medical related use.

1.2 “Licensed Products” means those products made from or in accordance with, produced or manufactured using, or otherwise incorporating in whole or in part any of the Licensed Rights, including, without limitation, any products incorporating or made from the Raw Materials or any material, substance, organism, component or product derived or developed from or based upon the Raw Materials and covered in whole or in part by any of the claims of the Licensed Rights.


1.3 “Licensed Rights” means NAI’s rights in information, discoveries, concepts, techniques, designs, processes and technology claimed in the following United States patents, and any reissues, reexaminations, or extensions, continuations, continuations-in-part, or divisionals of any of the following and any international counterparts, and in the inventions and discoveries described, covered and claimed therein:

(a) US 5,965,596 filed August 12, 1997, entitled “Methods and Compositions for Increasing the Anaerobic Working Capacity in Tissues;”

(b) US 6,172,098 filed May 25, 1999, entitled “Methods and Compositions for Increasing the Anaerobic Working Capacity in Tissues;”

(c) US 6,426,361 filed January 9, 2001, entitled “Methods and Compositions for Increasing the Anaerobic Working Capacity in Tissues;”

(d) US 6,680,294 filed July 30, 2002, entitled “Methods and Compositions for Increasing the Anaerobic Working Capacity in Tissues;” and

(e) Allowed US application serial no. 10/717,217 filed November 18, 2003, entitled “Methods and Compositions for Increasing the Anaerobic Working Capacity in Tissues.”

1.4 “Trademark Rights” means NAI’s rights as the owner of the following registered trademarks:

(a) CARNOSYN (standard character mark), Registration No. 3,146,289;

(b) CARNOSYN CARNOSINE SYNTHESIZER (standard character mark), Registration No. 3,121,544; and

(c) CARNOSYN CARNOSINE SYNTHESIZER & Design, Registration No. 3,091,092.

 

2.

SUBLICENSE .

2.1 Subject to the terms and conditions of this Agreement, NAI hereby agrees to grant to the customers of CSI who purchase the Raw Materials from CSI a worldwide, non-exclusive, non-transferable, non-assignable, non-sublicenseable, royalty-free (i) sublicense of NAI’s rights under the Licensed Rights to manufacture, offer for sale, and/or sell Licensed Products within the Field of Use (the “ Sublicense ”), and (ii) license to use and reproduce the trademarks comprising the Trademark Rights solely to advertise, market, and promote the Licensed Products within the Field of Use (the “Trademark License”). The term of such Sublicense and Trademark License shall automatically expire upon the expiration of NAI’s Licensed Rights under the License Agreement and/or expiration of NAI’s Trademark Rights.


2.2 CSI agrees to provide to each of its customers that purchases Raw Materials from CSI a copy of the Sublicense Agreement, in the form set forth in Exhibit B attached hereto (the “ Sublicense Agreement ”), which Sublicense Agreement may not be altered, amended, or modified except with the express written consent of an authorized officer of NAI. No Sublicense or Trademark License shall be granted or deemed to have been granted to any customer of CSI that does not receive and accept the Sublicense Agreement and, except as expressly provided in this Section 2, nothing contained in this Agreement is intended to confer by implication, estoppel, or otherwise, upon CSI or any customer of CSI a license or rights in any intellectual property or other rights of NAI.

 

3.

RESERVATION OF RIGHTS .

3.1 CSI acknowledges and agrees that during the term of this Agreement, NAI and its affiliates will continue to design, develop, manufacture, sell, and distribute Licensed Products using the Licensed Rights and Trademark Rights and NAI may grant sublicenses and/or licenses of its rights under the Licensed Rights and Trademark Rights to manufacture, offer for sale and/or sell Licensed Products to third parties who are not customers of CSI and/or who did not purchase Raw Materials from CSI. Nothing in this Agreement shall be interpreted to limit in any manner or to any extent NAI’s rights and ability to act in accordance with the foregoing and NAI hereby expressly reserves such rights.

3.2 CSI acknowledges and agrees the Licensed Rights and the Trademark Rights are and will remain the sole and exclusive property of NAI, subject to the rights of the Licensors, and that NAI is the owner of all proprietary rights and intellectual property rights associated therewith including without limitation all trademarks, trade dress, trade names, logos, domain names and service marks, together with all translations, adaptations, derivations and combinations, including all associated goodwill, and all applications, registrations, reservations and renewals in connection therewith, whether or not registered for the Licensed Rights or the Trademark Rights. Except as otherwise permitted herein, CSI will not take any action inconsistent with NAI’s ownership of and rights under the Licensed Rights and Trademark Rights. CSI will not contest or aid others in contesting the validity, enforceability or NAI’s ownership of and/or rights in the Licensed Rights and Trademark Rights.

 

4.

FEES .

4.1 In consideration of NAI’s agreement to grant Sublicenses and licenses to use the Trademark Rights pursuant to the terms of this Agreement, CSI agrees to pay to NAI, in United States dollars, the fees and amounts set forth on Schedule 1 attached hereto (the “ Sublicense Fees ”).

4.2 The Sublicense Fees must be paid to NAI within thirty (30) days after the end of the calendar quarter in which such Sublicense Fees are earned. CSI shall submit to NAI with its payment of the Sublicense Fees a quarterly report summarizing total sales of Raw Materials to third parties during the immediately preceding calendar quarter. The report shall be in form and content as agreed to by the parties.


4.3 If any Sublicense Fees to be paid by CSI to NAI under this Agreement become delinquent, the delinquent amount shall bear interest until paid in full with such interest. The interest will be compounded annually and will accrue at the lesser of (i) the highest annual rate allowed under applicable law at the time the outstanding amount becomes delinquent, or (ii) 0.0005 multiplied by the outstanding amount per day of delinquency.

4.4 CSI agrees to keep and maintain accurate and adequately detailed accounting records, including copies of all purchase orders, for all sales of Raw Materials sold to third parties. Such accounting records shall be kept for a minimum of three (3) years following the end of the calendar quarter in which such sales were made. During the term of this Agreement and for one year thereafter, copies of all purchase orders for the sale of Raw Materials to third parties shall be made available to NAI upon request and NAI or its agents shall otherwise have the right, upon reasonable prior notice and during ordinary business hours, to inspect the relevant accounting records of CSI to verify the accuracy of the Sublicense Fees paid or payable to NAI. Any such inspection shall be conducted so as to not unreasonably interfere with CSI’s normal business activities.

4.5 CSI agrees to take commercially reasonable actions to promote, market and sell the Raw Materials.

 

5.

PROSECUTION AND ENFORCEMENT OF LICENSED RIGHTS .

5.1 NAI will have sole control over, but, subject to Section 5.2, no obligations to CSI with respect to, the filing, prosecution, and maintenance (collectively, the “ Prosecution ”) of the Licensed Rights and the Trademark Rights. CSI will not have any right to participate in the Prosecution of any Licensed Rights and/or Trademark Rights.

5.2 During the term of this Agreement, NAI agrees to use commercially reasonable efforts to maintain and protect the Licensed Rights and Trademark Rights, to make any necessary filings, and to pay any necessary fees or other amounts due with respect thereto.

5.3 During the term of this Agreement, CSI agrees to promptly notify NAI in writing upon becoming aware of any known or suspected infringement or other improper use of any Licensed Rights or Trademark Rights. Such notice will include the identity of the third party or parties known or suspect to have infringed the Licensed Rights and/or Trademark Rights and any available information that is relevant to such infringement. NAI shall have sole control over enforcement and defense of all Licensed Rights and Trademark Rights. CSI shall not take any action to notify a known or suspected infringing party but shall use best efforts and cooperate with NAI, at NAI’s request, in litigating, settling or otherwise terminating any such infringement of the Licensed Rights and/or Trademark Rights. NAI shall be entitled to any and all damages awarded as a result of or agreed to in a monetary settlement of any such claim of infringement.

 

6.

REPRESENTATIONS AND WARRANTIES OF CSI .

6.1 CSI represents and warrants that all Raw Materials provided to customers of CSI that receive a Sublicense shall be of the best quality and pure and free from adulteration within the guidelines of the Food, Drug and Cosmetic Act of the United States as amended.


6.2 CSI further represents, warrants and guarantees that at the time of delivery of the Raw Materials to its customers the Raw Materials will, when delivered, conform to the description on the face of the purchase order relating to such Raw Materials, and be free of defects in materials and workmanship and further, that the Raw Materia


 
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