HELIX BIOMEDIX, INC./ THERAPEUTIC PEPTIDES, INC.
LICENSING AGREEMENT
THIS LICENSING AGREEMENT (this "Agreement"), made and entered into this ___
day of _________, 2001, by and between Helix BioMedix, Inc., a Delaware
corporation having its principal office at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxx 00000 ("Helix" or "Licensor"), and Therapeutic Peptides,
Inc., a Louisiana corporation having its principal office at 0000 Xxxxxx
Xxxxxxxxx, Xxxxx X, Xxxxxxx, Xxxxxxxxx 00000 ("TPI" or "Licensee").
WHEREAS, TPI is the inventor of certain proprietary peptides defined in the
HELIX/TPI RESEARCH ALLIANCE AGREEMENT by and between Helix BioMedix, Inc.
(Louisiana), Helix BioMedix, Inc. (Colorado), TPI, BioSouth Research
Laboratories, Inc., and Xx. Xxxxxx X. Xxxx, dated September 30, 1999, and
pursuant to said agreement TPI has assigned all its rights, title and interest,
in and to said proprietary peptides to Helix; and
WHEREAS, Helix, pursuant to said HELIX/TPI RESEARCH ALLIANCE AGREEMENT, has
agreed to file one or more patent applications with respect to those certain
proprietary peptides to be assigned to it by TPI; and
WHEREAS, certain of the aforementioned proprietary peptides may have useful
application in topical, non-pharmaceutical skin care intermediate concentrates
and end-use products; and
WHEREAS, TPI, pursuant to said HELIX/TPI RESEARCH ALLIANCE AGREEMENT,
desires to acquire from Helix a license of certain of Helix's rights, including
a limited right to sublicense TPI's Affiliates, to make, have made, use, have
used, offer for sale, have sold, sell, and/or otherwise dispose of certain of
the aforementioned proprietary peptides for the purpose of making, having made,
using, having used, offering for sale, having sold, selling and/or otherwise
disposing of topical, non-pharmaceutical skin care intermediate concentrates and
end-use products using, made from, or derived from said proprietary peptides;
and
WHEREAS, Helix desires to grant to TPI such a license under terms and
conditions as are set forth herein below.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
set out herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS
1.1 "Licensed Peptides"
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shall mean the three (3) short chain linear peptides, the amino acid
sequences of which are set forth in Exhibit A.
1.2 "Licensed Products"
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shall mean any topical, non-pharmaceutical skin care intermediate
concentrates and end-use products that contain one or more of the Licensed
Peptides.
1.3 "Licensed Territory"
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shall mean the United States, its territories and possessions, and all
other countries in which Helix has or may have patent applications and
patents which cover or relate to the Licensed Peptides.
1.4 "Effective Date"
-----------------
shall mean the date of this Agreement as first written herein above.
1.5 "TPI's Affiliates"
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shall mean and include BioSouth Research Laboratories, Inc., Biosyn, Inc.
and Vital Assist, Inc., as well as any other entity which owns over 10% of
TPI's voting stock or otherwise controls TPI's business and affairs or in
which 10% of the voting stock of the entity is owned by TPI or which is
otherwise controlled by TPI.
1.6 "Gross Sales"
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shall have the meaning set forth in Section 3.2.
1.7 "Licensed Field of Use"
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shall mean the use of Licensed Peptides and Licensed Products in both
intermediate concentrates and end-use products for topical,
non-pharmaceutical skin care.
1.8 "Licensed Trade Secrets"
------------------------
shall mean the sequences of amino acids set forth in Exhibit A that
constitute the Licensed Peptides.
1.9 "Licensed Patent Rights"
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shall mean all current and future patent applications (which for the
purpose of this Agreement shall be deemed to include certificates of
invention and applications for certificates of invention) and patents in
the Licensed Territory covering or related to the Licensed Trade Secrets
and the Licensed Peptides, including any substitutions, extensions,
reissues, reexaminations, renewals, divisions, continuations, or
continuations-in-part thereof, which Helix owns and controls and under
which Helix has the right to grant licenses, as of the Effective Date of
this Agreement and thereafter including, but not limited to, those patent
applications and patents set forth in Exhibit B.
2. GRANT OF LICENSE Helix hereby grants to Licensee a personal, non-exclusive
license under Helix's Licensed Trade Secrets and Licensed Patent Rights,
including the right to sublicense TPI's Affiliates, to make, have made,
use, have used, offer for sale, sell, have sold, or otherwise dispose of
the Licensed Peptides for the purpose of making, having made, using, having
used, offering for sale, selling, having sold, or otherwise disposing of
Licensed Products for the Licensed Field of Use in the Licensed Territory.
3. ROYALTIES
3.1 Beginning on the Effective Date and to the extent that Licensee sells
or otherwise disposes of Licensed Products, Licensee will, in the manner and
within the time set forth in Section 4 hereof, pay a continuing and cumulative
royalty in U.S. Dollars to Helix with respect to Licensed Products sold or
otherwise disposed of by Licensee in the Licensed Territory after the Effective
Date and before termination of this Agreement, and thereafter as set forth in
Section 6.5. The royalty payable with respect to Licensee's Gross Sales (as
defined below) of Licensed Products will be:
2% of the first $25 million (i.e., for $1.00 to $25,000,000)
3% of the next $50 million (i.e., for $25,000,001 to $50,000,000)
4% for sales above $50 million (i.e., for $50,000,001 and up).
Licensee guarantees, and will pay at the end of each designated period set
forth below, the following minimum royalties during the term of this Agreement:
first thirty (30) months: $0
next twelve (12) months (i.e., months 31 to 42) $10,000
next twelve (12) months (i.e., months 43 to 54) $10,000
next twelve (12) months (i.e., months 55 to 66) $25,000
each additional twelve (12) months (due at the end of each year) $50,000.
3.2 "Gross Sales"
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shall mean Licensee's gross sales (e.g., the gross invoice amount billed
customers) of Licensed Products, less excise taxes, discounts, and allowances
actually shown on an invoice and, further, less any bona fide returns (net of
all returns actually made or allowed as supported by credit memoranda actually
issued to customers) up to the amount of the actual sales of Licensed Products
during the royalty period. No other costs incurred in the manufacturing,
selling, advertising, and distribution of Licensed Products will be deducted.
3.3 Should Licensee sublicense to any of its Affiliates under the
provisions of Section 2 hereof, Licensee shall pay to Helix the same royalty
amounts that Helix would be entitled to receive if Licensee were itself selling
or otherwise disposing of Licensed Products.
3.4 The above royalties shall accrue upon each Licensed Product being sold
or otherwise disposed of in the Licensed Territory by Licensee after the
Effective Date. Licensed Products will be considered "sold" or "otherwise
disposed of" when payment for said Licensed Products is received by Licensee.
3.5 All taxes resulting by operation of this Agreement shall be borne by
the party obligated to pay them under applicable law. Licensee may withhold from
payments to Helix under this Agreement the amount of any national taxes levied
on Licensee's payments hereunder by any government or duly constituted authority
in a country of the Licensed Territory. In such event, Licensee shall effect
payment to the appropriate tax authorities of said government of the national
taxes so withheld, and shall transmit to Helix official receipts issued by said
tax authorities or such other evidence as is reasonably available to support a
claim for income tax credit by Helix in respect of any taxes so withheld and
paid.
4. PAYMENT, REPORTS AND RECORDS
4.1 Licensee will provide quarterly written royalty reports ("Royalty
Reports") to Helix, accompanied by payment for royalties due, within thirty (30)
days after the last day of March, June, September and December of each calendar
year during the term of this Agreement, and thereafter as set forth in Section
6.5. Royalty Reports will be certified as accurate by a duly authorized
representative of Licensee and will separately state for the preceding quarterly
period the following information: the type, quantity and price of Licensed
Products sold or otherwise disposed of by Licensee in the Licensed Territory,
the minimum guaranteed royalty payable, if any, the total royalty payable under
this Agreement, and the applicable withholding tax by country, if any. Royalty
Reports shall be furnished to Helix regardless of whether Licensed Products were
sold or otherwise disposed of during the period or whether any actual royalty
was owed. The receipt or acceptance by Helix of Royalty Reports or royalty
payments shall not prevent Helix from subsequently challenging the validity or
accuracy of Royalty Reports or the accompanying royalty payments.
4.2 The first Royalty Report and royalty payment shall be made with respect
to all Licensed Products sold or otherwise disposed of by Licensee in the
Licensed Territory from the Effective Date to the last day of the first full
quarterly period next ending.
4.3 "Final" Royalty Reports and royalty payments will be made within thirty
(30) days after the expiration or termination of this Agreement, as well as
within the applicable ninety-day period specified in Section 6.5, with respect
to all Licensed Products sold or otherwise disposed of by Licensee in the
Licensed Territory.
4.4 If Licensee fails to make any royalty payment within the required time
for such payment, Licensee will pay interest to Helix at the simple interest
rate of three percent (3%) per month, computed from the due date (which will be
deemed to be the end of the applicable thirty (30) days period specified in
Section 4.1) until such payment and the interest thereon are paid in full.
4.5 Licensee will make and retain, and will cause TPI's Affiliates to make
and retain, for two (2) years following the submission of Royalty Reports to
Helix hereunder, true and accurate records, files and books of account
containing all data reasonably required for the full computation and
verification of the amounts to be paid under this Agreement and set forth in
Royalty Reports. This obligation will survive any termination of this Agreement.
4.6 Upon reasonable notice by Helix, and at any reasonable time during
normal business hours, but no more frequently than once during each consecutive
twelve-month period beginning with the Effective Date of the Agreement, Licensee
will permit, and will cause TPI's Affiliates to permit, the reasonable
inspection of such records, files and books of account by any independent firm
of certified public accountants mutually accepted by both parties. Such
examinations will be solely for the purpose of verifying the information set
forth in Royalty Reports. Licensee will give such independent accounting firm
access to the records described above, only provided that such firm will agree
not to disclose to Helix or any other party any information other than the
information required to be reported in the Royalty Reports under Section 4.1. In
the event that such inspection reveals an underpayment by Licensee of the actual
amounts owed Helix, Licensee will pay the difference within thirty (30) days,
and Licensee will pay interest to Helix at the simple interest rate of three
percent (3%) per month computed from the due date until such payment and the
interest thereon are paid in full. In addition, in the event that such
inspection reveals an underpayment by Licensee of the actual amounts owed Helix,
the cost of such inspection will be borne as follows: (i) if the underpayment is
ten percent (10%) or less, Helix will pay for the inspection; (ii) if the
underpayment is ten percent (10%) through fifteen percent (15%), Helix and
Licensee will share the cost of the inspection equally; (iii) if the
underpayment is fifteen percent (15%) or greater, Licensee will pay for the
inspection.
5. OTHER COVENANTS
5.1 Licensee will indemnify, defend and hold Helix harmless from and
against any and all liabilities, damages, losses, costs and expenses (including
reasonable attorney's fees and expenses) actually incurred by Helix resulting
from or associated with any product liability lawsuit brought against Helix
relating to the Licensed Products. In addition, Licensee shall maintain product
liability insurance covering the sale of Licensed Products in an amount no less
than $1,000,000 for sales of Licensed Products up to and including $5,000,000
and an additional $1,000,000 in coverage for each additional $5,000,000 of
Licensed Product sales. Licensee shall name Helix as an additional insured on
all such insurance policies.
5.2 Licensee shall not arbitrarily or unilaterally replace any Licensed
Peptides in the formulation of a Licensed Product with peptides not licensed
from Helix once the Licensed Product is sold or otherwise qualified and accepted
for marketing, whichever occurs first.
5.3 Licensee hereby grants to Helix an option to license the use of
Licensee-owned delivery systems that TPI or TPI's Affiliates use with the
Licensed Peptides, for use by Helix in non-cosmetic applications, under terms
and conditions that are substantially similar to those contained in this
Agreement. Licensee represents and warrants that it has the requisite authority
to grant this option. Licensee shall grant or cause TPI's Affiliates to grant
such a license within a reasonable period of time after receiving a request from
Helix to exercise its option hereunder.
5.4 During the term of this Agreement, Licensee agrees to share all of its
test data regarding the relative efficacy and toxicity of the Licensed Peptides
and data from Licensee's "in vivo" tests of Licensed Peptides, all said data
being that developed by TPI during its selection of the Licensed Peptides.
5.5 During the term of this Agreement, Helix will timely notify TPI in the
event Helix files any patent application, abandons the prosecution of any patent
application, secures any patent, makes a determination not to maintain any
patent in force or not to seek reissue or reexamination of any patent covering
or related to the Licensed Peptides and the Licensed Trade Secrets.
6. TERM AND TERMINATION
6.1 The term of this Agreement shall be from the Effective Date and shall
continue until the last to expire of an issued patent relating to the Licensed
Peptides, unless terminated earlier as otherwise provided in this Agreement.
6.2 Either party shall have the right to terminate this Agreement by giving
written notice of termination to the other party in the case of a material
breach of this Agreement by the other party. Such written notice of termination
shall specify the nature of the default. The breaching party shall have the
right to cure any such default within sixty (60) days after receipt of the
non-breaching party's notice, but if the default is not cured within such
period, the non-breaching party may terminate this Agreement by written notice
to the breaching party at the end of such period.
6.3 If Licensee should dissolve, or should file a voluntary petition in
bankruptcy for any purpose other than reorganization, or an order should be
entered pursuant to any law relating to bankruptcy or insolvency or appointing a
receiver or trustee for Licensee for any purpose other than reorganization, then
Helix may, within ten (10) days thereafter, give written notice of its desire to
terminate this Agreement. Thereupon, this Agreement shall terminate on the date
specified in such notice, which shall not be less than thirty (30) days after
the date of such notice.
6.4 In the event that any proceeding shall be instituted by or against
Helix seeking to adjudicate it bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief from or
to consolidate its debts under any law relating to bankruptcy or insolvency or
appointing a receiver, trustee or other similar official for it or any
substantial part of its property or it shall take any action to authorize any of
the foregoing actions, Licensee shall have the right to retain and enforce any
and all of the rights granted it hereunder.
6.5 In the event that this Agreement is terminated pursuant to Sections
6.1, 6.2 or 6.3 above, the license granted in Section 2 will automatically
terminate, except as otherwise provided in Section 6.6 below.
6.6 Upon termination of this Agreement (except for uncured failure to pay
royalties), Licensee shall have the right for ninety (90) days to complete any
then existing and outstanding contracts with customers related to Licensed
Products pursuant to the license granted hereunder. Licensee may also for such
ninety-day period dispose of any previously manufactured Licensed Products held
in its inventory as of the date of such termination. The rights granted under
this Section 6.6 will be subject to the provisions of Sections 3 and 4. The
rights granted and obligations imposed under this Section 6.6 shall survive the
termination of this Agreement.
7. DISCLAIMERS
7.1 Helix does not assume any responsibility whatsoever for the performance
or manner of use of Licensed Products manufactured, made, used, sold or
otherwise disposed of by Licensee or TPI's Affiliates. Helix shall have no
liability therefor, nor will it have any obligation to defend, indemnify or hold
harmless any party from any suits, actions or claims arising out of, or relating
to, such performance or manner of use.
7.2 Nothing contained in this Agreement will be construed as:
7.2.1 an admission by either party of any past infringement of any
patent or as an admission of, or a warranty or representation as to, the
validity and/or scope of any patent, and either party is free to contest in
any proceeding the validity and/or scope thereof;
7.2.2 conferring any license or other right, by implication, estoppel
or otherwise, under any patent application, patent or patent right, except
as herein expressly granted;
7.2.3 conferring any license or right with respect to any trade
secrets, copyrights, mask works or know-how of either party except as
required by Section 2 of this Agreement; or
7.2.4 conferring any license or right with respect to any trademark,
trade name or corporate name of Helix or any contraction, abbreviation or
simulation thereof.
8. GENERAL TERMS AND CONDITIONS
8.1 Entire Agreement; Modification and Waiver.
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This Agreement represents the entire understanding and agreement between
the parties with respect to the subject matter hereof, and supersedes all of the
negotiations, understandings and representations made by and between such
parties. None of the terms or provisions hereof may be amended, supplemented,
waived or changed orally, unless by a writing signed by each of the parties
hereto.
8.2 Assignment.
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This Agreement, including the benefits or rights hereunder, may be assigned
by Helix without Licensee's prior written consent and by Licensee without
Helix's prior written consent, except that any attempted sale, merger,
assignment, pledge, hypothecation or other transfer of Licensee's rights,
benefits or interests in and under this Agreement to Demegen, Inc., its
administrators, successors or assigns, shall be void and of no effect and shall
convey no rights or interests in this Agreement or the Licensed Peptides,
Licensed Trade Secrets or Licensed Patent Rights unless Helix's express written
consent to such sale, merger, assignment, pledge, hypothecation or transfer has
first been obtained. Except as provided herein with respect to Demegen, Inc.,
this Agreement will be binding on and will inure to the benefit of the parties
hereto and their permitted administrators, successors and assigns.
8.3 Applicable Law.
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The Agreement will be governed by and interpreted in accordance with the
laws of the State of Louisiana, without regard to conflicts of laws principles.
8.4 Jurisdiction; Service of Process.
---------------------------------
Any action or proceeding seeking to enforce any provision of, or based on
any right arising out of, this Agreement may be brought against either of the
parties in the courts of the State of Louisiana, and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on any party anywhere in the world.
8.5 Court Costs; Limitation of Liability.
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Both parties agree that if either party is held by any court of competent
jurisdiction to be in violation, breach, or nonperformance of any of the terms
of this Agreement, then it will promptly pay to the other party all reasonable
and allocable costs of such action or suit, including reasonable attorneys'
fees. However, in no event will either party be liable to the other party by
reason of breach or termination of this Agreement for any loss of prospective
profits or incidental or consequential damages.
8.6 Relationship of the Parties.
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Nothing in this Agreement will be construed as making either party the
partner, joint venturer, agent, or employer/employee of the other. Neither party
will have the authority to make any statements, representations or commitments
of any kind, or to take any action, which will be binding on the other, except
as provided for herein or authorized in writing by the party to be bound.
8.7 Payments.
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All sums of money referred to in this Agreement as being payable by
Licensee to Helix will be sums payable in U.S. Dollars and may be made by wire
transfer to ______________________ Account No. __________ at
___________________________________________________________________________.
8.8 Patent Marking; Use of Helix's Name.
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Licensee may use Helix's name, trademarks, service marks, logos, trade
names and/or branding on the packaging of Licensed Products, but only with
Helix's prior written consent. All such legends will conform to the marking
requirements of the applicable countries.
8.9 Notices.
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All notices, requests, demands, Royalty Reports and other communications
required under or related to this Agreement will be in writing, in the English
language, and sent to the addresses set forth below:
If to Helix:
Helix BioMedix, Inc.
Attn: R. Xxxxxxx Xxxxxx, President
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxx 00000
If to Licensee:
Therapeutic Peptides, Inc.
Attn: Xx. Xxxxxx X. Xxxx, President
0000 Xxxxxx Xxxxxxxxx, Xxxxx X
Xxxxxxx, Xxxxxxxxx 00000
8.10 Severability.
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The invalidity, illegality or unenforceability of any provision will not in
any way affect, impair, invalidate or render unenforceable this Agreement or any
other provision thereof. If any provision of this Agreement is determined to be
unenforceable by reason of its extent, duration, scope or otherwise, then the
parties contemplate that the court making such determination will reduce such
extent, duration, scope or other provision, and enforce them in their reduced
form for all purposes contemplated by this Agreement.
8.11 Section Headings; Construction.
--------------------------------
The headings of sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding section or sections of this
Agreement unless otherwise specified. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.
8.12 Execution of Agreement.
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This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement, and all of which, when
taken together, will be deemed to constitute one and the same agreement. The
exchange of copies of this Agreement and of signature pages by facsimile
transmission will constitute effective execution and delivery of this Agreement
as to the parties and may be used in lieu of the original agreement for all
purposes. Signatures of the parties transmitted by facsimile will be deemed to
be their original signatures for any purpose whatsoever.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
Helix: Licensee:
HELIX BIOMEDIX, INC. THERAPEUTIC PEPTIDES, INC.
By: /s/ R. Xxxxxxx Xxxxxx By: /s/ Xx. Xxxxxx X. Xxxx
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R. Xxxxxxx Xxxxxx Xx. Xxxxxx X. Xxxx
President President
EXHIBIT A
Licensed Peptides
The peptides licensed under this Agreement are the three (3) short chain
linear peptides identified by the amino acid sequences specified below:
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TPI I.D. Number Amino Acid Sequence
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P 48 VAKLLAKLAKKLL
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P 118 FAKLLAKALKKFL
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P 165 FALALKALKKL
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EXHIBIT B
