EXHIBIT 10.2
LICENSE AGREEMENT
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This LICENSE AGREEMENT ("Agreement") is made this 30th day of March,
2006 by and between AzurTec, Inc. ("AzurTec" or the "Licensor"), a Pennsylvania
corporation, and PhotoMedex, Inc. ("PHMD" or the "Licensee"), a Delaware
corporation.
WITNESSETH:
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WHEREAS, PHMD and AzurTec are parties to that certain Investment
Agreement (the "Investment Agreement"), that certain Security Agreement (the
"Security Agreement") and that certain Development Agreement (the "Development
Agreement"), as amended, all of even date herewith;
WHEREAS, pursuant to the Investment Agreement, PHMD and AzurTec have
agreed to enter into this License Agreement.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Definitions. Unless otherwise defined herein, capitalized
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terms used herein shall have the meanings set forth in the Investment Agreement.
(a) "Adjunctive Use" is defined in Section 2(c).
(b) "AzurTec IP" shall mean the intellectual property
rights owned by AzurTec and described on Schedule 1(b) attached hereto and made
a part hereof.
(c) "Beta-Testing Period" is defined in Section 3(b)(i).
(d) "Covered Product Launch Date" is defined in
Section 3(b)(i).
(e) "Covered Products" shall mean Licensor's existing MLS
System and any and all modifications or improvements thereof, whether developed
by Licensor or Licensee, and any further or related technology which is covered
in whole or in part by any issued, unexpired claim or a pending claim contained
in the Patent Rights.
(f) "Development Agreement" is defined in the foregoing
preamble.
(g) "Extension Period" is defined in Section 3(b)(ii).
(h) "Grantee" is defined in Section 2(d).
(i) "Indemnitor" and "Indemnitee" shall have the meanings
so ascribed in Section 7(d) hereof.
(j) "Initial Launch Period" is defined in
Section 3(b)(ii).
(k) "Investment Agreement" is defined in the foregoing
preamble.
(l) "License" is defined in the foregoing preamble.
(m) "Licensee Affiliate" shall mean any person or entity
directly or indirectly controlling, controlled by or under common control with
Licensee, including any person that is an officer, director or employee of any
such entity. As used in this definition, "controlling" (including, with its
correlative meanings, "controlled by" and "under common control with") means
possession, directly or indirectly, of the power to have decisive influence on
the voting of the Board of Directors or the decisions of the entity's management
regardless of the quantity of stock or other equity interests owned in the
entity.
(n) "Minimum Amount" is defined in Section 3(b)(iii)
hereof.
(o) "Net Sales" means gross revenues actually received by
Licensee or any Licensee Affiliate on account of the sale of a Covered Product
to any customer of Licensee or of any Licensee Affiliate, including unaffiliated
distributors of Licensee or any Licensee Affiliate, less the following amounts:
(i) reasonable and customary trade discounts and
rebates, sales returns or allowances, costs of freight, insurance, and excise
taxes (including without limitation value-added taxes) actually paid by Licensee
or any Licensee Affiliate, reasonable and customary commissions actually paid to
any person who is not a Licensee Affiliate, and reasonable costs and expenses of
collection; and
(ii) the cost of that number of demonstration
items of Covered Products that is reasonable and customary in the industry and
that are transferred at no consideration to customers or potential customers,
and revenues from sales of Covered Products by Licensee to Licensee Affiliates
for resale to customers, to the same extent that such sales would or would not
be recognized under generally accepted accounting principles;
provided, however, that if Licensee or any Licensee Affiliate receives on a
customer's behalf an irrevocable letter of credit securing the customer's
purchase of a Covered Product from Licensee or any Licensee Affiliate and
Licensee or such Licensee Affiliate discounts such letter of credit, then
Licensee or such Licensee Affiliate shall upon such discounting be deemed to
have received payment for Covered Products, and no deduction shall be allowed to
Licensee or such Licensee Affiliate from Net Sales for any cost it may incur in
discounting such letter of credit.
(p) "Next-Generation Product" is defined in Section 2(b).
(q) "Patent Rights" shall mean, collectively, all rights
in and to US patent application serial no. 11/073845, and any subsequently filed
US or foreign patent application(s) claiming priority to application serial no.
11/073845, including without limitation, PCT applications and associated
national phase applications and US utility patent applications claiming priority
to such patent application, and each patent that issues or reissues from any of
these patent applications.
(r) "Quarter" or "Quarterly" refers to the first, second,
third or fourth consecutive three-month period within the Initial Launch Period,
the Secondary Launch Period or any Extension Period.
(s) "Secondary Launch Period" is defined in
Section 3(b)(ii).
(t) "Security Agreement" is defined in the foregoing
preamble.
(u) "Stand-Alone Use" is defined in Section 2(c).
2. Grant of Exclusive License.
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(a) Licensor hereby grants to Licensee a worldwide,
royalty-bearing license in and to the AzurTec IP for use solely for applications
related to ex-vivo biopsy tissue, and subject to the further limitations on use
hereinafter set forth (the "Licensed Rights"). Pursuant to the License granted
hereunder, Licensee shall have the rights to use, sell, make or have made and
otherwise commercialize and exploit (including the right to advertise) the
Licensed Rights over any and all medical, surgical or veterinary fields of use,
all at its sole discretion. In the event that Licensee desires to assign this
Agreement, it shall first obtain the written consent of Licensor, which consent
Licensor shall not be unreasonably withheld or delayed. In the event that
Licensee desires to sub-license any of its rights hereunder, it shall do so in
accordance with Section 2(d). Licensee shall use its commercially reasonable
efforts to bring one or more Covered Products to market through a diligent
program for exploitation of the Licensed Rights and to continue active, diligent
marketing efforts for one or more Covered Products throughout the life of this
Agreement.
(b) During the term of this Agreement, neither Licensor
nor any of its affiliates shall develop, use, market or sell any products which
draw on technology which directly competes with Covered Products.
Notwithstanding the foregoing of this Section 2(b), Licensor shall have the
right, subject to Section 3(h), to commercialize a Covered Product which
determines the presence or absence of cancerous cells in situ (a
"Next-Generation Product"), and such right shall not be included in the Licensed
Rights. Conversely, during the term of this Agreement, neither Licensee nor its
affiliates shall market or sell any products which directly compete with Covered
Products.
(c) Notwithstanding Section 2(a), and subject to Section
2(b), Licensor reserves to itself the right to use the AzurTec IP, including
without limitation the Patent Rights, for research conducted in furtherance or
improvement of the AzurTec IP or in the conduct of clinical trials in
furtherance of the AzurTec IP. Licensor and Licensee acknowledge that, under the
terms of the Development Agreement, as amended, Licensor has agreed to fund and
Licensee has agreed to conduct clinical trials to establish the right to market
the use of Covered Products in the
United States not only on an ex vivo adjunctive basis with instruments
corroborating negative findings in tissue excised from the patient (the
"Adjunctive Use"), but also on an ex vivo stand-alone basis without the
necessity of such corroboration on negative findings as well as for the
detection of squamous carcinomas in addition to basal carcinomas (the
"Stand-Alone Use"). Licensee shall promptly disclose to Licensor any and all
improvements or modifications to the Covered Products developed by or for
Licensee during the term of this Agreement, all of which improvements and
modifications, if developed at Licensor's expense, shall be the property of
Licensor included in the license of rights hereunder, and if such improvements
or modifications were developed at Licensee's expense, then they shall be the
property of Licensee but shall be licensed back to Licensor on a worldwide,
royalty-free, perpetual basis.
(d) If Licensee proposes to grant any third party (a
"Grantee") rights (e.g. a sub-license) in the Licensed Rights under this
License, Licensee shall:
(i) disclose to Licensor the identity of the
proposed Grantee on or before the date on which such rights are proposed to be
granted, and request Licensor's written consent for the same, which consent
Licensor shall not unreasonably withhold or delay; and
(ii) include in any agreement or document
purporting to grant any such rights provisions which (A) set forth in language
substantially identical to that set forth in this Agreement the existence and
scope of Licensor's rights in the Licensed Rights, including without limitation
the right to receive royalties and reports of sales of Covered Products; and (B)
require the Grantee, as a condition to any further assignment or sublicense by
it of the rights proposed to be transferred by Licensee, to comply with the
requirements of this Section 2(d).
If Licensee assigns or sub-licenses rights hereunder, Licensee shall
not thereby be released from any of its obligations to Licensor hereunder,
including without limitation the obligation to ensure that any permitted
assignee or sub-licensee pays royalties and makes reports to Licensor as herein
required. Any such permitted assignment or sub-license shall automatically
terminate and be of no further force or effect if Licensor terminates this
Agreement as hereinafter provided. In addition to royalties payable hereunder
based on Net Sales, Licensee shall pay to Licensor an amount equal to 20% of the
amount or amounts paid to Licensee or any Licensee Affiliate in connection with
any permitted assignment or sub-license of the Licensed Rights, when and as
Licensee or such Licensee Affiliate is paid by the assignee or sub-licensee and
such payment shall be treated as a prepaid royalty to Licensor.
(e) Licensee shall have sole discretion to determine and
implement marketing strategies for the Covered Products, subject only to the
restrictions herein set forth. Licensee shall also have discretion to modify or
improve the Covered Products, subject to the written consent of Licensor, which
consent Licensor will not unreasonably withhold or delay.
(f) In the event that Licensor, as a result of its
research and development work on the AzurTec IP for use of a Covered Product for
in situ detection of cancerous cells, proposes to introduce a product for in
situ detection, whether directly or indirectly, or through a business
combination with a third party or any other means, then before introducing such
product, Licensee shall have the first right of negotiation for such rights, as
set forth in Section 3(h).
3. Royalty.
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(a) In exchange for the License described in Section 2,
Licensee shall pay to Licensor, or its nominees or distributees, a royalty on
sales made by Licensee of Covered Products. Such obligation to pay royalty shall
begin on the Covered Product Launch Date and continue for the term of this
License, as set forth in Section 4. The royalty rate shall be as set forth in
Section 3(b)(iv) or as adjusted by other provisions hereof, and the rate shall
be applied to the Net Sales.
(b) The royalty shall be subject to the following terms
and conditions:
(i) From the date that the US Food and Drug
Administration ("FDA") gives permission to Licensor or to Licensee to market
Covered Products in the United States for Adjunctive Use, Licensee shall have 6
months in which to conduct beta testing of the Covered Products for marketing
for Adjunctive Use (the "Beta Testing Period"). The Covered Product Launch Date
shall begin on the earlier of (A) the first day of the month which follows the
month in which falls the end of the six-month beta testing period, (B) that date
that beta testing is completed.
(ii) Beginning on the Covered Product Launch
Date, Licensee shall have 18 months in which to launch the Covered Product for
Adjunctive Use, as well as for Stand-Alone Use if this use should become
marketable (the "Initial Launch Period"), and following the Initial Launch
Period will be a further period of 12 months in which the launch may be
furthered (the "Secondary Launch Period"). Following the Secondary Launch Period
will be further periods of 24 months each (the "Extension Periods") in which the
Covered Product may be marketed, each Extension Period having a first year
comprising the first 12 months, and a second year comprising the second 12
months.
(iii) For each of the periods described in
subparagraph (ii) above, Licensee is to pay to Licensor a minimum amount (the
"Minimum Amount") of royalty in order to maintain its rights under this License.
The Minimum Amounts are as follows:
Period Minimum Amount
------------------------------- ----------------------------------
Beta Testing Period None
Initial Launch Period $100,000
Secondary Launch Period $250,000, if Stand-Alone Use is
cleared by the midpoint of the
period; $125,000 if it is not.
First & Later Extension Periods For each year in an Extension
Period, the greater of (a)
$75,000 or (b) royalty payable on
50% of the actual Net Sales of the
prior 12 months.
In order to maintain its rights under this License, Licensee shall be required
to pay to Licensor the Minimum Amount for each applicable period. If the amount
of royalty paid, or deemed paid, over a period to which a Minimum Amount applies
is less than the applicable Minimum Amount, then Licensee shall be permitted in
the last report applicable to such period to pay an amount equal to the deficit
from the Minimum Amount, and thus shall maintain its rights under this
Agreement. In the case of a Minimum Amount that applies to an Extension Period,
Licensee shall be required to pay the Minimum Amount applicable to such period,
and upon satisfaction of such requirement, Licensee may, without notice to
Licensor, continue this License, or, upon notice to Licensor at least 60 days
prior to the end of such period, elect to terminate this Agreement.
(iv) The following royalty rates shall apply to
Net Sales within any period to which a Minimum Amount applies:
Net Sales Bracket Royalty Rate
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1st $1 million Net Sales 20%
2nd $1 million Net Sales 15%
Net Sales above $2 million 10%
(c) Sales of a Covered Product into a jurisdiction that
does not recognize, or no longer recognizes, a patent claim deriving from the
AzurTec IP and covering such product, or in which no patent application for the
Covered Product was made, shall bear royalty at 50% of the rates set forth in
Section 3(b)(iv); provided, however, that this provision shall not apply if an
application has been filed in such jurisdiction but is still pending, or if the
failure to apply for patent protection constitutes a breach of Licensee's
obligations under Section 5 of this Agreement.
(d) Royalties shall be payable in US dollars within 45
days following the close of a Quarter, and shall be accompanied by a Quarterly
report detailing Net Sales of Covered Product. Licensee shall also submit a
Quarterly report of sales for which royalty must be paid in favor of Licensor.
The reports shall be in form reasonably acceptable to the parties, and shall
indicate the number of Covered Products sold during the preceding Quarter and
the Net Sales (including the net proceeds received thereon), the royalty rate
and the royalty due upon such Net Sales.
(e) Licensee shall keep true and accurate records, files
and books of account containing all the data necessary for the full computation
and verification of the royalty to be paid and the information to be given in
the report herein provided for, and also permit (subject to execution of
appropriate confidentiality agreements) Licensor to examine Licensee's records
relating solely to sales of the Covered Products from time to time, upon
reasonable prior written notice and during business hours, to the extent
necessary for Licensor to verify the royalty due and payable hereunder. Licensor
shall have two (2) years in which to examine Licensee's records underlying its
Quarterly reports, after which time such reports, if unexamined, shall be deemed
accepted by Licensor. In the event that an audit of Licensee's records
determines that further royalties were due to Licensor, then Licensee shall
promptly pay the deficiency to Licensor as well as interest at the statutory
rate applicable in Pennsylvania to such payment. Notwithstanding the foregoing,
to the extent that Licensor has as of the date of this License amounts due and
owing to Licensee or amounts due and owing and actually encumbering the Licensed
Rights, Licensee shall be entitled to offset from its royalties to Licensor
until the amount due and owing to Licensee or encumbering the AzurTec IP has
been settled (or the encumbrance otherwise removed).
(f) In the event that a Covered Product is sold in
combination with other products that are not Covered Products, then the royalty
rate shall be applied to that portion of the Net Sales price of the combination
product that is attributable to the Covered Product, where the amount of the Net
Sales price so attributable shall be calculated to be a fraction thereof, the
numerator of which is the fully burdened cost of the Covered Product and the
denominator of which is the fully burdened cost of the combination product.
(g) In the event that Licensee sub-licenses to a third
party any part of a patent that is within the AzurTec IP, then sales made by
such sub-licensee in respect of Covered Product shall be treated as Net Sales
made by Licensee of Covered Product and bear royalty in favor of Licensor. Net
Sales made in a currency other than US dollars shall be converted into US
dollars in accordance with generally accepted accounting principles in the
United States.
(h) In the event that Licensor develops, or would license
the technology and rights to develop, a Next-Generation Product that is a
patentable improvement of or involves AzurTec IP in detecting cancerous cells in
situ and, in either case, is or would be competitive with the Covered Product
and/or Licensor proposes to introduce such competitive product to the health
care market, then Licensor shall provide Licensee with written notice thereof
and hereby grants Licensee the first right of negotiation with respect to each
such invention. Licensee shall within thirty (30) days after receipt of such
notice notify Licensor in writing either that (i) Licensee is interested in
negotiating to add such invention to this License, or (ii) Licensee has no
interest in such invention and therefore rejects such right of negotiation with
respect thereto. If Licensee notifies Licensor within thirty (30) days that
Licensee desires to negotiate to incorporate such invention into this License,
the parties shall negotiate in good faith for up to sixty (60) days after such
notification regarding the terms pursuant to which Licensor would license its
rights in such invention to Licensee. Failure by Licensee to give notice of its
interest or lack of interest in negotiating for such rights with respect to such
invention within thirty (30) days after receipt of written notice from Licensor
as described in the first sentence of this Section 3(h) shall be deemed to
constitute a waiver by Licensee of its right of first negotiation with respect
to such invention. In addition, failure of the parties to agree on the terms of
incorporating
the invention into this License within such sixty (60) day negotiation period
shall be deemed to constitute rejection by Licensee of such right of negotiation
with respect to such invention. If Licensee waives or otherwise fails to
exercise its right of first negotiation with respect to such invention, or if
the parties fail to agree on the terms of a commercial license within such sixty
(60) day negotiation period, then Licensor shall be free to negotiate and/or
enter into a license arrangement with any third party with respect to such
invention on terms that are not substantially more favorable to such third party
than terms proposed by Licensee in a written offer delivered to Licensor during
the aforesaid 60 day negotiation period, and Licensee shall have no further
rights with respect thereto; provided, however, that Licensor shall not enter
into any such arrangement with any third party prior to the end of the Secondary
Launch Period and if Licensor enters into such an arrangement after such date,
and if the product that incorporates the applicable invention competes with the
Covered Products, then the royalty rates set forth in Section 3(b)(iv) above
shall be reduced by 50%; and Licensee's obligation to pay Minimum Amounts of
royalties shall terminate. Licensee shall further have the right to terminate
this License under Section 4(c). Moreover, Licensee shall have the right to pay
up to 30% of the consideration offered for a license to the Next-Generation
Product by means of its capital stock in AzurTec, valued at its then fair market
value.
4. Term and Termination.
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(a) In the event that no patent shall have been issued
with substantially the claims that are in the Patent Rights by the end of the
first year of the first Extension Period, then the royalty rates set forth in
Section 3(b)(iv) and the Minimum Amounts set forth in Section 3(b)(iii) shall be
reduced by 50% until such time as a patent shall have issued as aforesaid, at
which time the 50% reductions will be reversed and the original rates will be
restored. Moreover, in the event that a patent shall not have issued with
substantially the claims that are in the Patent Rights by the end of the first
year of the first Extension Period, Licensee shall have the right to terminate
this Agreement upon notice given within 30 days after the end of the first year
or second year within any Extension Period, but such right of Licensee to
terminate shall lapse if and when a patent shall have issued with substantially
the claims that are in its Patent Rights.
(b) Notwithstanding Section 4(a), at the end of each
Extension Period and provided Licensor shall not have breached any of its
obligations under this License Agreement, the Investment Agreement or the
Development Agreement, Licensor may elect to terminate this License upon 180
days' prior written notice of the same to Licensee and upon payment to Licensee
of the sum set forth in confidential Schedule 4(b).
(c) In the event that Licensee is not licensed under
Section 3(h) in the Next- Generation Product, then Licensee shall have the right
to terminate this Agreement on 180 days' prior written notice of the same to
Licensee, in which case Licensor shall pay to Licensee the sum set forth on
confidential Schedule 4(c).
(d) If Licensee fails to make any payment due and payable
to Licensor hereunder, Licensor shall have the right to terminate this Agreement
effective on fifteen (15) days' notice, unless Licensee shall make all such
payments to Licensor within said fifteen (15) day period. Upon the expiration of
the fifteen (15) day period, if Licensee shall not have made all such payments
to Licensor, the rights, privileges and license granted hereunder and under the
Development Agreement shall at the option of Licensor automatically terminate.
(e) Upon any material breach or default of this Agreement
or of the Development Agreement by Licensee, other than those occurrences set
out in paragraph (d) above, which shall always take precedence in that order
over any material breach or default referred to in this paragraph (e), Licensor
shall have the right to terminate this Agreement and the Development Agreement
and the rights, privileges and license granted hereunder and thereunder
effective on thirty (30) days' notice to Licensee. Such termination shall become
automatically effective at the option of Licensor unless Licensee shall have
cured any such material breach or default prior to the expiration of the thirty
(30) day period.
(f) Upon termination of this Agreement by Licensor
pursuant to paragraphs (b), (d) or (e) above, Licensee shall promptly return all
AzurTec IP and related documentation to Licensor, including without limitation
any and all modifications or improvements developed by Licensee, and shall have
no further rights therein or thereto.
(g) Upon termination of this Agreement for any reason,
nothing herein shall be construed to release either party from any obligation
that matured prior to the effective date of such termination, and except as
herein expressly provided, neither party shall be prevented from pursuing any
and all other remedies available to it at law or in equity or otherwise under
the terms of this Agreement.
5. Maintenance, Prosecution and Defense.
------------------------------------
(a) Licensee shall be responsible for all patent
maintenance fees and expenses accruing by reason of the AzurTec IP from the date
of this License. Licensee shall be responsible for prosecution of any patent
applications within the AzurTec IP, subject to notice to and comment from
Licensor, and shall thus be responsible for fees and expenses which it may
choose to incur in the prosecution of any patent applications within the AzurTec
IP. Notwithstanding the foregoing, Licensor shall be solely responsible for
prosecution, and expenses therefor, of patent applications, if any, for use of
AzurTec IP with respect to in situ applications, which Licensor shall use
commercially reasonable efforts to diligently and timely pursue, including
without limitation not only method patents but also apparatus patents.
(b) In the event Licensee or Licensor becomes aware of
any possible infringement of the AzurTec IP, it shall promptly notify the other
party of such potential infringement. Thereafter, the parties shall confer with
each other and shall proceed as follows.
(i) Licensee may elect to bring a patent
infringement action at its expense, acting in Licensor's name, and shall control
such action, and Licensor shall cooperate with Licensee in such action at no
charge to Licensee. If Licensee prevails, it shall first recover its out of
pocket expenses from such damages and shall retain 75% of any remaining damages
(including for lost profits from its lost sales) from such action, with 25%
being allotted to Licensor for its cooperation.
(ii) If Licensee elects not to bring such an
infringement action under Section 5(b)(i), then Licensor may bring such an
action, acting in its own name and with Licensee's cooperation at no charge to
Licensor, and if Licensor prevails, it shall first recover its out of pocket
expenses from such damages and shall retain 75% of any remaining damages from
such action, with 25% being allotted to Licensor for its cooperation.
6. Confidentiality and Public Announcements.
----------------------------------------
(a) In the course of performing this Agreement, one party
may disclose to the other or receive information from the other relating to the
subject matter of this Agreement, which information shall be considered to be
the disclosing party's Confidential Information. Each party shall protect and
keep confidential and shall not use, publish or otherwise disclose to any third
party, except as permitted by this Agreement or with the other party's written
consent, the other party's Confidential Information. The recipient of
Confidential Information shall exercise reasonable care to prevent its
disclosure to any third party and shall limit internal dissemination of
Confidential Information within the recipient's own organization to individuals
whose duties justify the need to know such information, and then only provided
that there is a clear understanding by such individuals of their obligation to
maintain the trade secret status of such information and to restrict its use
solely to the purpose specified herein. Licensee shall protect all portions of
the Patent Rights, Covered Products and AzurTec IP under this provision as
Confidential Information of Licensor. The parties acknowledge that Licensee's
distributors' names and practices are specifically incorporated in this Section
6 as confidential and proprietary information of Licensee, subject only to the
following limitations. For the purposes of this Agreement, Confidential
Information shall not include such information that: (i) was known to the
receiving party at the time of disclosure without obligations of
confidentiality; (ii) was generally available to the public or was otherwise
part of the public domain at the time of disclosure or became generally
available to the public or otherwise part of the public domain after disclosure
other than through any act or omission of the receiving party in breach of this
Agreement; or (iii) became known to the receiving party after disclosure from a
source that had a lawful right to disclose such information to others. The
parties agree that all of the provisions of all existing confidentiality
agreements relating in any way to the Patent Rights and AzurTec IP shall
continue in effect in accordance with their terms.
(b) Neither Licensor nor Licensee shall make any public
announcement concerning the Covered Product or this Agreement without the
other's prior written consent.
7. Indemnification.
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(a) Licensee agrees to indemnify and hold Licensor
harmless from and against: (i) any and all loss, liability, damage or deficiency
asserted by a third party and resulting from any misrepresentation, breach of
warranty or representation, or non-fulfillment of any covenant or agreement on
the part of Licensee under the terms of this Agreement or any document or
instrument executed by Licensee in connection herewith; (ii) any and all
third-party claims for
product liability relating to Covered Products; (iii) any and all loss,
liability, damage or deficiency resulting from any misrepresentation, breach of
representation or warranty or non-fulfillment of any covenant or agreement on
the part of Licensee under the terms of this Agreement or any document or
instrument executed by Licensee in connection herewith; and (iv) any and all
actions, suits, proceedings, claims, demands, assessments, judgments, costs and
expenses, including, without limitation, reasonable attorneys' fees, incident to
the foregoing subparagraphs (i), (ii) and (iii) and only the foregoing
subparagraphs (and on appeal therefrom), regardless of whether or not Licensor
prevails in such matter.
(b) Licensor agrees to indemnify and hold Licensee
harmless from and against: (i) any and all loss, liability, damage or deficiency
asserted by a third party and resulting from any misrepresentation, breach of
warranty or representation, or non-fulfillment of any covenant or agreement on
the part of Licensor under the terms of this Agreement or any document or
instrument executed by Licensor in connection herewith; (ii) any and all
third-party claims for product liability relating to Covered Products, to the
extent such claims relate to any Covered Products directly manufactured or
produced by Licensor (even if in contravention of the terms of this Agreement);
(iii) any and all loss, liability, damage or deficiency resulting from any
misrepresentation, breach of representation or warranty or non-fulfillment of
any covenant or agreement on the part of Licensor under the terms of this
Agreement or any document or instrument executed by Licensor in connection
herewith; and (iv) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including, without limitation,
reasonable attorneys' fees, incident to the foregoing subparagraphs (i), (ii)
and (iii) and only the foregoing subparagraphs (and on appeal therefrom),
regardless of whether or not Licensee prevails in such matter.
(c) Notwithstanding Section 7(b), Licensee shall have the
right to recover by set-off any and all amounts for which Licensee is entitled
to indemnification under this Agreement from Licensor against all payments due
or which may become due hereunder, in the order of their maturity or in any
other order that Licensee shall elect, until the cumulative amount so set off
shall equal the total amount due to Licensee, and in such manner of
apportionment among the parties as is, in the reasonable exercise of Licensee's
discretion, equitable in the circumstances.
(d) The party to this Agreement entitled to
indemnification under this Section 7 (hereinafter for purposes of this Section 7
referred to as "Indemnitee") shall notify the party required to indemnify
pursuant to this Section 7 (hereinafter for purposes of this Section 7 referred
to as "Indemnitor") within 15 days after the Indemnitee's receipt of notice from
any third party of any claim, demand, suit or proceeding with respect to which
indemnification may be sought under the terms of this Agreement. Indemnitor
shall be entitled, at its expense, to contest or otherwise defend against any
such claim, demand, suit or proceeding through representatives and counsel of
its own choice, in which event Indemnitee shall, upon Indemnitor's request,
cooperate in connection with such defense or contest by the preparation and
furnishing of evidence and by making employees available to testify, at no cost
to Indemnitor except for the reimbursement of costs and expenses incurred by
Indemnitee in connection therewith. Nothing set forth herein shall preclude
Indemnitee from participating in the defense of such claim, demand, suit or
proceeding on its own behalf and at its own expense, in which case Indemnitor
shall cooperate with Indemnitee to the same extent contemplated by the foregoing
sentence. If Indemnitor fails to protest or defend any such claim, demand, suit
or proceeding within 30 days after receipt of the notice specified in the first
sentence of this Section 7(d), Indemnitee shall have the right following such
30-day period, in the good faith exercise of its reasonable discretion, to
settle, defend or pay the same, in which event Indemnitor's indemnification
shall extend to and include the amount of such settlement or payment and/or the
costs and legal expenses of such defense. The failure to notify Indemnitor
promptly as set forth above of any such claim, demand, suit or proceeding shall
not relieve Indemnitor's liability to indemnify Indemnitee under this Section 7,
except to the extent such delay has prejudiced the Indemnitor's ability to
defend the claim.
(e) Except for litigation between Licensor and Licensee,
each of the parties hereto shall fully cooperate with the other in the defense
or prosecution of any existing or future litigation or proceeding against or by
such other party relating to or arising out of the business sold hereunder prior
to or after the effective date of this License. The party receiving cooperation
shall pay the expenses, including legal fees and disbursements, of the
cooperating party and its officers, directors and employees reasonably incurred
in connection with such litigation.
8. Waivers; Modification. No course of dealing between Licensor
---------------------
and Licensee, nor any failure to exercise, nor any delay in exercising, on the
part of Licensee or Licensor, any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. This
Agreement cannot be altered, amended or modified in any way, except by a writing
signed by the parties hereto.
9. Severability. The provisions of this Agreement are severable,
------------
and if any clause or provision shall be held invalid and unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction, and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
10. Cumulative Remedies. All of Licensee's and Licensor's
-------------------
respective rights and remedies with respect to the AzurTec IP, whether
established hereby or otherwise by law or other agreements between the parties
hereto shall be cumulative and may be exercised singularly or concurrently. In
the event of a breach of the foregoing provisions, the non-defaulting party
shall be entitled to equitable and injunctive relief in addition to any other
available remedies.
11. Notices. All notices for purposes under this Agreement shall
-------
be sent either by registered mail (and such notice shall be deemed to be
properly served upon proof of posting by registered mail) or by recognized
overnight courier, when addressed as follows:
If to Licensor: AzurTec, Inc.
00 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: President
With copy to: Xxxxx Xxxxxx LLP
00 Xxxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxx Xxxx, Esq.
If to Licensee: PhotoMedex, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxxxxx, XX 00000
Attn: President
With copy to: Jenkens & Xxxxxxxxx, LLP
00000 Xxxxxxxx Xxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxx, Esq.
or to such other address as either party shall designate in writing to the other
party.
12. Binding Effect; Benefits; Independence. This Agreement shall
--------------------------------------
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Except as specifically provided otherwise
herein, Licensee may not assign, sell, hypothecate, or otherwise transfer any
interest in or obligation under this Agreement. Neither party shall be deemed to
be the agent or partner of the other. The parties to this Agreement are
independent of each other.
13. Further Assurances. Each of the parties agrees to execute and
------------------
deliver to the other such further agreements, instruments and documents, and to
perform such further acts, as shall be reasonably requested from time to time in
order to carry out the purposes of this Agreement and the transactions
contemplated hereby.
14. Governing Law; Choice of Forum. This Agreement shall be
------------------------------
interpreted and the rights and liabilities of the parties hereto determined in
accordance with the internal laws (as opposed to the conflict of laws
provisions) of the Commonwealth of Pennsylvania. Any legal action or proceeding
with respect to this License Agreement may be brought in the courts of the
Commonwealth of Pennsylvania or of the US located in Philadelphia County,
Philadelphia, and by execution, and delivery of this License Agreement, each of
the Licensor and the Licensee consents, for itself and in respect of its
property, to the exclusive jurisdiction of those courts.
15. Waiver of Jury Trial. EACH OF THE PARTIES HERETO IRREVOCABLY
--------------------
WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS LICENSE AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING, OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ONE PARTY AGAINST THE OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT
CLAIMS, TORT CLAIMS, OR OTHERWISE. THE LICENSOR AND LICENSEE EACH AGREE THAT ANY
SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY.
16. Whole Agreement. This Agreement, including by incorporation by
---------------
reference the Investment Agreement, the Security Agreement and the Development
Agreement, as amended, contains all of the understandings, representations,
warranties and obligations between Licensor and Licensee to the subject matter
hereof, and no party shall be bound by any prior agreement, oral or in writing,
or by any representations, conditions, definitions, or warranties with respect
to the subject matter of this Agreement other than as expressly provided herein
or as otherwise expressly noted elsewhere. This Agreement shall inure solely to
the benefit of and shall be binding upon the permitted successors and assigns of
the parties hereto. The captions in this Agreement are for convenience only and
shall not be considered a part of or affect the construction or interpretation
of any provision hereof. This License Agreement may be authenticated in any
number of separate counterparts, each of which shall collectively and separately
constitute one and the same agreement. This Agreement may be authenticated by
manual signature, facsimile, or, if approved in writing by the other party,
electronic means, all of which shall be equally valid. A telecopy of any such
executed counterpart shall be deemed valid as an original.
IN WITNESS WHEREOF, the Licensor and Licensee have duly executed this License
Agreement as of the date first written above.
AZURTEC, INC. PHOTOMEDEX, INC.
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx X. X'Xxxxxxx
------------------- ------------------------
Xxxx X. Xxxxxxx Xxxxxxx X. X'Xxxxxxx
Title: President Title: President & CEO
