SUBLICENSE AGREEMENT
Exhibit 10.1
This
Sublicense Agreement (this “Agreement”) is entered into August
27, 2018, and shall become effective the 28th day of August, 2018,
(the “Effective
Date”), by and between CGI Cellerate RX, LLC, a Texas
limited liability company, having its principle place of business
at 00000 Xxxxxxx Xxxx, Xxxxx X-000, Xxx Xxxxxxx, XX 00000
(“Sublicensor”),
and Cellerate, LLC, a Texas limited liability company having its
principal place of business at 0000 Xxxxxx Xxxxxxxxx, Xxxxxxxx XX,
Xxxxx 000, Xxxxxx, XX 00000 (“Sublicensee”). Sublicensor and
Sublicensee are sometimes each referred to herein as a
“Party” and
collectively, as the “Parties”.
RECITALS:
A. Sublicensor
has executed a certain Manufacturing & Technology Agreement
with Applied Nutritionals, LLC, a Delaware limited liability
company (“Applied
Nutritionals”) as of April 24, 2018 (the
“Manufacturing
Agreement”).
B. Sublicensee
has entered into a certain Consent and Partial Assignment with
Sublicensor and Applied Nutritionals as of even date herewith
pertaining to the Manufacturing Agreement.
C. The
Parties desire to provide for the sublicense of the Licensed IP, as
hereinafter defined.
I.
DEFINITIONS
The
following terms shall have meanings ascribed to them
below:
1.1 “Affiliate” means, with respect to
any person (i) any Person directly or indirectly controlling,
controlled by or under common control with such Person, (ii) any
officer, director, general partner, member or trustee of such
Person, or (iii) any Person who is an officer, director, general
partner, member or trustee of any Person described in clauses (i)
or (ii) of this sentence. For purposes of this definition, the
terms “controlling,” “controlled by” or
“under common control with” shall mean the possession,
direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person or entity, whether
through the ownership of voting securities, by contract or
otherwise, or the power to elect at least 50% of the directors,
members, general partners, or Persons exercising similar authority
with respect to such Person or entities.
1.2 “Business Day” means a day other
than a Saturday, Sunday or other day on which commercial banks in
New York City, New York are authorized or required by Law to be
closed for business.
1.3 “Business Manufacturing
Documentation” means the United States Food & Drug
Administration records, files and documents necessary to explain
the designs, concepts and processes required to manufacture the
Products and to permit a reasonably skilled Person knowledgeable in
the manufacture of devices similar to the Products to manufacture
the Products.
1.4 “Commercially Reasonable Efforts”
means the carrying out of each of the Party’s obligations
under this Agreement with the exercise of prudent scientific and
business judgment and a level of effort and resources consistent
with the judgment, efforts and resources that the Party who bears
the performance obligation or a comparable third party in the
industry would employ for products of similar strategic importance
and commercial value that result from its own research efforts
taking into consideration competitive market conditions in effect
at the time the Party's obligations are carried out.
1.5 “Field of Use” means the sale of
collagen-based products or other products into the wound care and
surgical markets and subject to the exceptions set forth in Section
2.2 below.
1.6 “Knowledge” including the phrase
“the best Knowledge of Sublicensor” shall mean, with
respect to Sublicensor, the actual knowledge of any Sublicensor’s
executive officers or managers relating to a particular subject
matter, including all information that a reasonably prudent Person
in such position would be expected to have obtained in the course
of his or her duties and after making a reasonable inquiry of those
Persons who would reasonably be expected to have knowledge with
respect to such subject matter
1.7 “Law” means any statute, law,
ordinance, regulation, rule, code, order, constitution, treaty,
common law, judgment, award, decree, other requirement or rule of
law of any federal, state, local or foreign government or political
subdivision thereof, or any arbitrator, court or tribunal of
competent jurisdiction.
1.8 “Licensed IP” shall mean the
CellerateRX trademark, technology, trade secrets, know-how, all of
the materials currently held by Applied Nutritionals, Inc. in a
fireproof safe, by Iron Mountain under Depositor Number 26694-26706
which includes but is not limited to manufacturing processes,
Business Manufacturing Documentation, regulatory approvals and
licenses, and any other CellerateRX information cleared for market
by the FDA 510(k) Number 955506.
1.9 “Losses”
means all losses, damages, liabilities, deficiencies, claims,
actions, judgments, settlements, interest, awards, penalties,
fines, costs or expenses of whatever kind, including reasonable
attorneys' fees and the cost of enforcing any right to
indemnification hereunder and the cost of pursuing any insurance
providers.
1.10 “Net
Sales” means gross invoiced sales by Sublicensee, or
any sub-licensee, from sales of Products to third parties
consummated following the first commercial sale of Product
(excluding pilots and/or marketing assessments to the extent they
are complimentary as opposed to being sold) after the Effective
Date, less sales taxes (including value-added taxes, goods and
services taxes), excise duties, import and export duties, shipping
costs if separately invoiced to the customer, chargebacks, trade
and early payment discounts, refunds, rebates, samples, returns and
other reasonable and customary allowances, in each case as
determined from the financial statements of Sublicensee maintained
by Sublicensee and prepared in the ordinary course of business
according to United States generally accepted accounting
principles.
1.11 “Person”
means an individual, corporation, partnership, joint venture,
limited liability company, governmental authority, unincorporated
organization, trust, association, or other entity.
1.12 “Prime
Rate” means the prime rate of interest reported by the
Wall Street Journal from time to time.
1.13 “Products”
means all products listed in Schedule A, and any other
products that may be agreed upon in writing by Sublicensor and
Sublicensee from time to time.
1.14 “Quarterly
Period” means each three-month period commencing on
the 1st of January, 1st of April, 1st of July, and 1st of
October.
1.15 “Territory”
means the human Wound Care Market and surgical market in the United
States, Canada and Mexico, and such future additions as may be
agreed to by the Parties.
1.16 “Wound
Care Market” means the care for external wounds,
including but not limited to the treatment of external, tunneled or
undermined wounds (including, without limitation, pressure ulcers
(Stages I-IV), venous stasis ulcers, diabetic ulcers, ulcers
resulting from arterial insufficiency, surgical wounds, traumatic
wounds, first and second degree xxxxx, superficial wounds, cuts,
scrapes, skin tears, skin flaps and skin grafts.
1.17 “Year”
means the annual time period commencing on the Effective Date and
ending one (1) year thereafter, and each subsequent annual time
period so long as this Agreement remains in effect.
II.
GRANT OF EXCLUSIVE LICENSE BY SUBLICENSOR TO
SUBLICENSEE
2.1 Subject to the
terms and conditions of this Agreement, and except as provided in
Section 2.2 below, during the Term, Sublicensor hereby grants to
Sublicensee an exclusive, non-revocable, transferrable right in and
to the Licensed IP to sell, export, market and distribute, Products
for Wound Care (including, without limitation, the Products listed
on Schedule A
attached hereto) within the Territory in the Field of Use (the
“Sublicense”).
2.2
Notwithstanding anything in Section 2.1 to the contrary,
Sublicensor shall own and retain all rights, titles, and interest
in, to and under the Licensed IP except as otherwise provided in
this Agreement.
III.
IMPROVEMENTS
3.1 No Grant-backs to Sublicensor.
Except as otherwise agreed by the Parties, all right, title and
interest in an improvement conceived solely by Sublicensee that
does not violate or infringe the Licensed IP, made, or reduced to
practice solely by Sublicensee during the Term of this Agreement,
and all of Sublicensee's patents and patent applications by
Sublicensee claiming its improvements shall:
(a) remain
the sole and exclusive property of Sublicensee and not subject to
this Agreement; and
(b) not
be licensed to Sublicensor
unless the Parties otherwise specifically agree in
writing.
3.2 No Grant-backs to Sublicensee.
Except as otherwise agreed by the Parties, all right, title and
interest in an improvement conceived solely by Sublicensor and that
is not made or reduced to practice solely by Sublicensee during the
Term of this Agreement shall:
(a) remain the sole and exclusive property of
Sublicensor; and
(b) not be licensed to Sublicensee pursuant to Section
3.1 of this Agreement if it is not within the Field of Use and the
Territory unless the Parties otherwise specifically agree in
writing.
IV.
TITLE AND OWNERSHIP
4.1 Ownership. Except as provided
in this Agreement, Sublicensor shall own and retain all rights,
titles and interests in, to and under the Licensed IP.
V.
ROYALTIES AND
SUBLICENSOR DISPUTES
5.1 Royalties. As additional
consideration for the granting of the Sublicense, Sublicensee shall
pay the following royalties to Sublicensor:
(a) Sublicensee agrees
to pay Sublicensor a royalty of:
i.
three percent (3%)
of all collected Net Sales during each Year up to an aggregate
amount of Net Sales of $12,000,000;
ii.
(ii) four percent
(4%) of all collected Net Sales on that portion of Net Sales, if
any, that exceed $12,000,000 up to an amount of $20,000,000 for
each such Year; and
iii.
(iii) five percent
(5%) of all Net Sales, if any, that exceed $20,000,000 for each
such Year (collectively, the “Royalty”). The
Royalty shall be paid within thirty (30) days after the end of each
Quarterly Period, together with a quarterly report detailing the
quantity of Products sold broken down by a list of unidentified
customers and the quantity per such unidentified customer, amounts
received, the total Royalty due for the immediately preceding
Quarterly Period and the calculations used to arrive at those
amounts (the “Royalty
Report”).
(b) Notwithstanding
anything to the contrary contained herein, for the first five (5)
Years of this Agreement, Sublicensee is required to pay a Royalty
to Sublicensor of at least $400,000 per Year (the
“Minimum
Royalty”); provided, however, if Sublicensor is in
default under this Agreement or the Manufacturing Agreement, during
the time of any such default, the Minimum Royalty obligation of
Sublicensee shall not be applicable.
5.2
Verification by
Sublicensor.
(a)
Sublicensor, at its own expense, may, for a period of one year
after receiving any Royalty Statement from Sublicensee, nominate an
independent certified public accountant acceptable to Sublicensee
(the “Auditor”),
who will have access to Sublicensee's sales records for the
Products upon reasonable, but not less than fifteen (15) Business
Days' prior written notice to Sublicensee and during Sublicensee's
normal business hours solely for the purpose of verifying the
Royalty payments made under this Agreement. The Auditor shall not
in any way be compensated (in whole or in part) contingent on the
outcome of the audit and shall conduct such audit in a manner
designed to minimize disruption of Sublicensee's normal business
operations. All information and materials made available to or
otherwise obtained or prepared by or for the Auditor in connection
with such audit shall be deemed Sublicensee's Confidential
Information and shall be subject to the Auditor's entry, prior to
conducting the audit, into a written agreement with Sublicensee
containing customary confidentiality and restricted use obligations
at least as restrictive as those set out in Article VIII.
Sublicensor may not exercise this right more than once in any
calendar year and the Auditor shall only disclose to Sublicensor
information directly related to the accuracy of the Royalty
Statement and any deficiency in the payment made, or
overpayment.
(b)
Sublicensor shall provide to Sublicensee a copy of all of the
Auditor's audit reports within five (5) Business Days of
Sublicensor's receipt of such audit report. If the audit report
shows that payments made by Sublicensee are deficient, Sublicensee
shall pay Sublicensor the deficient amount within fifteen (15)
Business Days after Sublicensee's receipt of the audit report, with
the deficient amount bearing interest in the amount of the average
Prime Rate over the time of deficiency. If the deficiency is
greater than five percent (5%) of the total payments owed by
Sublicensee to Sublicensor, then Sublicensee agrees to pay for the
reasonable direct costs of such audit. If the report shows that
payments made by Sublicensee are in excess of the required payment,
Sublicensor shall credit Sublicensee the excess amount to
Sublicensee’s next order with the excess amount bearing
interest in the amount of the Prime Rate over the time of the
overpayment.
(c)
In the absence of fraud, the failure of Sublicensor to request
verification of any Royalty Statement during the one-year period
after receipt of such Royalty Statement is deemed acceptance by
Sublicensor of the accuracy of the Royalty Statement and the
payment made by Sublicensee in accordance with the Royalty
Statement.
5.3
Payment Disputes.
Sublicensee may
withhold from payment any and all payments and amounts Sublicensee
disputes in good faith, including but not limited to a dispute of
the audit report, within thirty (30) days after Sublicensee first
becoming aware of the event causing the dispute (the
“Dispute
Event”), pending resolution of the dispute provided
that Sublicensee:
(a) timely
pays Sublicensor all amounts not subject to the Dispute
Event;
(b) provides
Sublicensor written notice of the Dispute Event prior to the due
date, specifying in such notice:
(i)
the
amount in dispute; and
(ii)
the reason for the Dispute Event set out in
sufficient detail to facilitate investigation by Sublicensor and
resolution by the Parties (the “Dispute Event
Notice”);
and
(c) works
with Sublicensor in good faith to resolve the Dispute Event
promptly; and promptly pays any
amount determined to be due by resolution of the Dispute Event
either by agreement of the Parties within thirty (30) days of the
Dispute Event Notice, or such longer time as may be mutually agreed
upon by the Parties. If the Dispute Event is not resolved in such
time frames, either or both Parties, as the case may be, may send
written notice of default to the other Party pursuant to Section
6.2 and pursue any remedies under this
Agreement.
5.4
Taxes. Each Party shall bear
and pay all taxes (including, without limitation, sales, excise,
value added, use taxes and similar taxes) applicable to such Party
pertaining to this Agreement, the payments hereunder and the
manufacture, sale or distribution of the Products.
VI.
TERM AND TERMINATION
6.1 Term. The term of this
Agreement commences on the Effective Date and shall run until
August [ ], 2028 (the “Initial Term”) and then
automatically renew for successive one-year periods (so long as
Sublicensee is not in default of this Agreement) unless terminated
under Section 6.2 or with written notice provided by either Party
at least 180 days prior to the end of the then existing renewal
period (the “Term”). This agreement shall
continue to renew automatically (unless either Party terminates per
this Section 6) until January 1, 2050.
6.2 Default. In addition to Section
6.1 above, upon the showing of default of any material term or
provision of this Agreement, the non-defaulting Party may terminate
this Agreement without liability, but only after sending the
defaulting Party a written notice specifying and explaining in
detail the nature and character of such default and the failure of
the defaulting Party to cure such default within thirty (30) days
of receiving such written notice, except in the case of a default
in the payment of any amounts owed, for which the cure period shall
be five (5) days.
6.3 Termination of Manufacturing
Agreement. In the event a Party is in default of the
Manufacturing Agreement and the non-defaulting Party terminates the
Manufacturing Agreement in accordance with the terms thereof, the
non-defaulting Party shall have the option for a period of thirty
(30) days after such termination of the Manufacturing Agreement at
its sole option to terminate this Agreement which shall be
effective immediately upon sending written notice to the defaulting
Party.
VII.
REPRESENTATIONS AND WARRANTIES
7.1 Mutual Representations
and Warranties. Each Party
represents and warrants to the other Party
that:
(a) it is duly
organized, validly existing and in good standing as a corporation
or other entity as represented herein under the Laws and
regulations of its jurisdiction of incorporation, organization or
chartering;
(b) it has, and
throughout the Term shall retain, the full right, power, and
authority to enter into this Agreement and to perform its
obligations hereunder;
(c) the execution of
this Agreement by its representative whose signature is set forth
at the end hereof has been duly authorized by all necessary
corporate/organizational action of the Party; and
(d) when executed and
delivered by such Party, this Agreement shall constitute the legal,
valid, and binding obligation of that Party, enforceable against
that Party in accordance with its terms except as such enforcement
is subject to the effect of (a) any applicable bankruptcy,
insolvency, reorganization or similar Laws relating to or affecting
creditors' rights generally, and (b) general principles of equity,
including concepts of reasonableness, good faith and fair dealing,
and other similar doctrines affecting the enforceability of
agreements generally (regard less of whether considered in a
proceeding in equity or at Law).
7.2 Sublicensor's
Representations and Warranties. Sublicensor represents and
warrants with respect to the Products that:
(a) Sublicensor has a
legally valid, exclusive license (with rights to sublicense) of the
Licensed IP;
(b) excluding all
applications outside the Territory, Field of Use and Products, as
well as any products and new inventions not subject to this
Agreement, it has sole and exclusive control (by ownership, license
or otherwise) of the right, title, and interest in and to the
Licensed IP;
(c) it has, and
throughout the Term, will retain the unconditional and irrevocable
right, power and authority to grant the sublicense
hereunder;
(d) neither its grant
of the sublicense, nor its performance of any of its obligations,
under this Agreement does or to its Knowledge will at any time
during the Term:
i.
conflict with or
violate any applicable Law; or
ii.
require the
consent, approval, or authorization of any governmental or
regulatory authority or other third party.
(e) Except as expressly
provided in this Agreement, it has not granted and will not grant
any sublicenses or other contingent or non-contingent right, title
or interest under or relating to the Licensed IP within the
Territory for the Field of Use, or is or will be under any
obligation, that does or will conflict with or otherwise affect
this Agreement, including any of Sublicensor's representations,
warranties, or obligations or Sublicensee's rights or licenses
hereunder, such as making the Licensed IP no longer exclusive as to
the Sublicensor and/or Sublicensee as provided for
herein;
(f) there neither are
nor at any time during the Term will be any encumbrances, liens, or
security interests involving the Licensed IP other than a lien or
security interest granted to a lender financing Sublicensor’s
business operations;
(g) to the best
Knowledge of Sublicensor, no prior art or other information exists
that would adversely affect the validity, enforceability, term, or
scope of the Licensed IP;
(h) there is no
settled, pending or threatened litigation or reissue application,
re-examination, post-grant, inter parties or review, interference,
derivation, opposition, claim of invalidity, or other claim or
proceeding (including in the form of any offer to obtain a
license):
i.
alleging the
unpatentability, invalidity, misuse, unregistrability,
unenforceability, or noninfringement of, or error in the Licensed
IP;
ii.
challenging
Sublicensor's right to practice or license, the Licensed IP, or
alleging any adverse right, title, or interest with respect
thereto; or
iii.
alleging that the
Licensed IP or the making, using, offering to sell, sale, or
importation of any Product does or would infringe, misappropriate,
or otherwise violate any patent, trade secret, or other
intellectual property of any third party.
(i) it has no
Knowledge, after reasonable investigation, of any factual, legal,
or other reasonable basis for any litigation, claim, or proceeding
relating to the Licensed IP;
(j) it has not received
any written, oral, or other notice of any litigation, claim, or
proceeding relating to the Licensed IP;
(k) Except as disclosed
on Schedule B, the
Licensed IP does not violate the intellectual property rights of
any third party, neither Sublicensor nor, to the best Knowledge of
Sublicensor, Applied Nutritional, LLC, has brought or threatened
any claim against any third party alleging infringement of the
Licensed IP, nor to the best Knowledge of Sublicensor, is any
third-party infringing or, to its Knowledge, preparing or
threatening to infringe any patent, or practicing any claim of any
patent application, included in the Licensed IP;
(l) all of its
registered trademarks contained anywhere in the Territory are
listed on Schedule
C and it does not own any other registered or common law
trademarks;
(m) it has full power
and authority to execute and deliver this Agreement and to perform
its obligations hereunder; and
(n) this Agreement
constitutes the valid and legally binding obligation of
Sublicensor, enforceable in accordance with its terms and
conditions, except as such enforcement is subject to the effect of
(a) any applicable bankruptcy, insolvency, reorganization or
similar Laws relating to or affecting creditors' rights generally,
and (b) general principles of equity, including concepts of
reasonableness, good faith and fair dealing, and other similar
doctrines affecting the enforceability of agreements generally
(regardless of whether considered in a proceeding in equity or at
Law).
7.3 Sublicensee Representations and
Warranties. Sublicensee has full power and authority
(including full limited liability company power and authority) to
execute and deliver this Agreement and to perform its obligations
hereunder. This Agreement constitutes the valid and legally binding
obligation of Sublicensee, enforceable in accordance with its terms
and conditions, except as such enforcement is subject to the effect
of (a) any applicable bankruptcy, insolvency, reorganization or
similar Laws relating to or affecting creditors' rights generally,
and (b) general principles of equity, including concepts of
reasonableness, good faith and fair dealing, and other similar
doctrines affecting the enforceability of agreements generally
(regard less of whether considered in a proceeding in equity or at
Law).
7.4 Disclaimer. Sublicensor makes
no representations or warranties of any kind concerning the market
for the Products or Sublicensee's potential earnings through sales
of the Product.
Sublicense
Agreement
VIII.
CONFIDENTIALITY
8.1 Confidential Information. For
the term of the Agreement, each Party will protect any documents,
reports or communications, as well as, any information marked
“confidential” or “proprietary” received
under this Agreement (collectively “Confidential
Information”), against disclosure to unauthorized
third parties. The Parties agree that in handling the Confidential
Information, they will employ the same standard of care and
diligence generally exercised by the receiving party with respect
to its own confidential or proprietary information. The Parties
further agree to only disclose such Confidential Information
internally within their own organizations, to those employees with
a strict need to know the Confidential Information and its
professional advisors only to the extent necessary to effectuate
the purposes of the Agreement, all of whom are advised of the
confidential nature of such Confidential Information. For purposes
of this provision, third parties not authorized for the disclosure
of Confidential Information do not include, a Party’s own
auditors or accountants, governmental authorities with a legal
right to view such information, or court ordered disclosures. For
purposes of this provision, third parties not authorized for the
disclosure of Confidential Information specifically include,
without limitation, competitors or potential competitors, other
license holders under the Intellectual Property, and any third
party, individual, corporation or other entity, without the prior
written consent of the other Parties.
8.2 Binding Obligations. Recipient
has no rights or interest in any Confidential Information of
Discloser, and during the term of this Agreement and thereafter,
Recipient shall not use, for Recipient's own benefit (except to
perform its obligations under and to strictly effectuate the intent
of this Agreement), or disclose to any other Person, corporation or
other entity any Confidential Information disclosed to or acquired
by Recipient, except with the prior written authorization of an
officer of Discloser. Recipient shall ensure that any of its
members, shareholders, directors, officers, employees, agents,
servants, independent contractors, subsidiaries, Affiliates or any
other persons or entities that are given access to Discloser's
Confidential Information will be bound, by contract, work rules or
otherwise, by the same obligations of confidentiality as are
provided for herein.
8.3 Exclusions from Confidential
Information. Information, documents and communications
received by a Party under this Agreement will be deemed NOT to be
Confidential Information if such information document or
communication is:
(A)
Published or
otherwise made available to the public other than by a breach of
this Agreement;
(B)
Furnished to a
Party by an independent third party without any restrictions on its
disclosure;
(C)
Approved for
release in writing by the Party to whom the information, documents
or communications belong; or
Sublicense
Agreement
(D)
Known to or
independently developed by the Party receiving such, without
reference to or use of any Confidential Information.
In
addition, the Parties acknowledge and agree that WNDM, (the parent
company of a Sublicensee member) is a publicly-traded company that
is subject to the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder (collectively, the
“Securities
Laws”), and that notwithstanding anything in this
Agreement to the contrary, to the extent that WNDM is legally
required to make disclosures pursuant to the Securities Laws,
certain information (including, without limitation, this Agreement,
the Contribution Agreement, and the Operating Agreement, the
Parties and the operations of the Company) may be required to be
disclosed under the Securities Act and the Exchange Act, and WNDM
may disclose any such information to the extent required by law.
The Parties will mutually agree on what information, if any, will
be disclosed by WNDM prior to such disclosure.
8.4 Return of Confidential
Information. Upon the termination of this Agreement for any
or no reason, Recipient shall, upon request by Discloser, return
all physical embodiments, including but not limited to documents,
and/or other manifestations of Confidential Information in any
medium, of the Confidential Information received from Discloser,
and Recipient shall continue for a period of five (5) years to
treat as strictly confidential all Confidential Information
received from Discloser. Recipient shall not release any
Confidential Information to any other Person or entity, either by
declaration, deposition or as a witness except upon prior written
notice to Discloser, which notice shall provide reasonable
opportunity for Discloser to take any appropriate measures, and
Recipient shall fully cooperate with Discloser, to provide for the
confidential treatment of all such Confidential Information so
disclosed. Discloser shall be entitled to obtain an injunction or
restraining order by any court of competent jurisdiction to enjoin
or restrain the unauthorized use or disclosure by Recipient of any
Confidential Information without the necessity for any bond, along
with all other remedies available at Law and the costs and
reasonable attorneys' fees related to enforcing this
Agreement.
8.5 Survival. The provisions of
this Article VIII shall survive for a period of five (5) years
following the termination or expiration of this
Agreement.
Sublicense
Agreement
IX.
INDEMNIFICATION; INFRINGEMENT BY OTHERS; INTELLECTUAL PROPERTY
MATTERS
9.1 Indemnification by Sublicensor.
Sublicensor shall indemnify, defend, and hold harmless Sublicensee
and its officers, directors, agents, customers and members from any
and all Losses, incurred or suffered by them on account of any
actual or alleged injury to Person or property by reason of the
negligence of or breach of the Agreement by Sublicensor, including
trademark or patent infringement claims related to the Licensed IP,
unless such damage is solely due to an unauthorized representation
by Sublicensee regarding the Product or due to the negligence, of
Sublicensee, in which case there shall be no obligation upon
Sublicensor to indemnify Sublicensee hereunder.
9.2 Indemnification of Sublicensee.
Sublicensee shall indemnify and hold harmless Sublicensor and its
officers, directors, agents and members from any and all Losses
incurred or suffered by them on account of any actual or alleged
damage to Person or property arising out of the actions, omissions,
negligence or intentional misconduct of Sublicensee in selling or
marketing of the Products, unless such damage is solely due to the
actions, omissions, negligence or intentional misconduct of
Sublicensor, in which case there shall be no obligation upon
Sublicensee to indemnify Sublicensor hereunder.
9.3 Infringement of Licensed IP.
Each Party shall promptly inform the other Party in writing of any
alleged infringement of the Licensed IP by a third party of which
it has knowledge and provide any available evidence of such
infringement to the other Party. In the event it is alleged that a
third party is or has infringed the Licensed IP in or to the
Products or in the use or composition of the Products (the
"Property Rights"),
Sublicensor shall have the initial right to institute and
diligently prosecute proper legal proceedings at its own expense.
In the event that Sublicensor fails to institute such proceedings
within thirty (30) days from receipt of written notice by
Sublicensee advising Sublicensor that a third party is infringing,
allegedly infringing or substantially preparing to infringe upon
the Property Rights, or Sublicensor otherwise first acquiring
Knowledge of the infringement, Sublicensee, at its own expense, may
institute suit for infringement under its own name and join
Sublicensor at its option, as a party-plaintiff to such suit. In
the event that Sublicensee institutes a suit in accordance with the
foregoing sentence, Sublicensor may be represented by its own
counsel at its own expense, and any recovery of damages in the suit
shall belong to Sublicensee. Notwithstanding the foregoing, in the
event that Sublicensor is joined as a party-plaintiff and
participates in the suit or participates in the suit as an
intervenor, Sublicensor shall be entitled to recover a portion of
any damages, including any damage enhancements, based on its
financial contribution with respect to such participation as well
as any damages Sublicensor suffered.
9.4 Settlement. Neither Party shall
settle or otherwise compromise the Licensed IP without the prior
written consent of the other Party, such consent not to be
unreasonably withheld, delayed or conditioned, regardless of
whether such other Party is a party to any suit for infringement of
the Licensed IP.
Sublicense
Agreement
9.5 Adjustment to Royalties. Should
Sublicensor fail to take Commercially Reasonable Efforts to attempt
to stop any infringement of the Licensed IP: (i) within the
Territory and the Field of Use, or (ii) if outside the Territory
and/or Field of Use, any infringement of the Licensed IP that is
reasonably likely to affect the value of the Licensed IP to
Sublicensee, or (iii) otherwise decline to protect the value of the
Licensed IP within the Territory and the Field of Use after receipt
of reasonable notice of infringement of the Licensed IP, the
Parties shall renegotiate the Royalties payable hereunder, to
reflect the value of such Licensed IP in the absence of the right
to exclude third party practice. Should the Parties be unable to
reach agreement within thirty (30) days of Sublicensee’s
notice to Sublicensor to commence negotiations, Sublicensee shall
have the right to institute litigation pursuant to Section
10.2.
9.6 Cooperation. Sublicensor shall
execute any and all papers, documents or other instruments which
may be reasonably necessary or desirable to effect the right to
file suit and litigate granted to Sublicensee under Section 9.3
above, and also to execute any and all papers which may be found
necessary or desirable in any suits brought under and pursuant to
this Agreement; and Sublicensor further agrees that any employees
or principals of relevant licensors of Sublicensor reasonably
requested by Sublicensee, will testify in any litigation, whenever
requested to do so by Sublicensee, provided, however, that if
Sublicensor is not a party to the suit, Sublicensor shall be
reimbursed for all costs and expenses associated with such
testimony, including but not limited to reasonable and necessary
attorney's fees. Likewise, if not a party to the suit, Sublicensee
shall be reimbursed for all reasonable third party out-of-pocket
costs and expenses associated with any required cooperation with
Sublicensor’s suit, including but not limited to reasonable
and necessary attorney’s fees.
9.7 Invalidity. If any Property
Right is declared to be invalid or unenforceable by a court having
jurisdiction, then Sublicensee may at its sole option elect in
writing to be immediately released of, and from, any and all
obligations under this Agreement, and this Agreement shall be
deemed to be terminated.
9.8 Assurance by Sublicensee.
During the Term, Sublicensee shall reasonably assist Sublicensor in
Product development of any Products which might be the subject of
this Agreement; provided, however that any reasonable third-party
costs and expenses incurred by Sublicensee in providing such
assistance shall be reimbursed by Sublicensor.
9.9 Regulatory
Clearance. Sublicensor shall be responsible for obtaining
and maintaining all clearances from governmental agencies required
to manufacture and market the Products, including but not limited
to any required approvals from the U.S. Food and Drug
Administration, and Sublicensee shall cooperate and provide
Commercially Reasonable Efforts in assisting Sublicensor; provided,
however that any reasonable third party costs and expenses incurred
by Sublicensee in providing such assistance shall be reimbursed by
Sublicensor.
Sublicense
Agreement
9.10
Compliance with
Laws. Each Party shall be responsible, at its own cost, to
comply substantially with all Laws, rules, and regulations of the
Territory pertaining to the Licensed IP and the commercialization
and sale of the Products.
9.11 Exclusion
of Consequential and Other Direct Damages. To the fullest
extent permitted by Law and except as contemplated elsewhere in
this Agreement, neither Sublicensor nor Sublicensee shall be liable
to the other for any injury to or loss of goodwill, reputation,
business production, revenues, profits, anticipated profits,
contracts, or opportunities (irrespective of how these are
classified as damages), or for any consequential, incidental,
indirect, exemplary, special, punitive or enhanced damages whether
arising out of breach of contract, tort (including negligence) or
otherwise (including the entry into, performance or breach of this
Agreement), regardless of whether such damage was foreseeable and
whether or not the other Party has been advised of the possibility
of such damages.
9.12 Survival.
The provisions of this Section Article IX shall survive termination
of this Agreement.
X.
GENERAL PROVISIONS
10.1 Assignment.
The provisions of this Agreement shall be binding upon and inure to
the benefit of the Parties, and their respective successors and
permitted assigns. Without the prior written consent of each of the
other Parties, no Party may assign, delegate, or transfer the
Agreement or any of its rights or duties hereunder, (including, but
not limited to, the sale or transfer of any amounts owed by one
party to the other) to any third party. Any attempted assignment or
delegation in violation of this section shall be void and at no
time shall have any legal validity. Notwithstanding the foregoing,
each Party may assign its rights and duties hereunder in connection
with a merger, consolidation, sale of a majority of its equity, or
sale of all or substantially all the assets of such Party provided
that the assigning Party shall remain liable thereon.
10.2 Law;
Venue. This Agreement shall be governed by and construed
under the Laws of the state of Texas, without regard to its choice
of Laws principles. The parties hereto agree that the exclusive
jurisdiction of any case or controversy arising under or out of
this Agreement shall be in the state or federal courts located in
the state of Texas and each of the parties hereby consents to the
jurisdiction of such courts.
10.3 Independent
Contractor. In performing their respective duties under this
Agreement, each of the Parties will be operating as an independent
contractor. Nothing contained herein will in any way constitute any
association, partnership, or joint venture between or among the
Parties, or be construed to evidence the intention of the Parties
to establish any such relationship. No Party will have the power to
bind any other Party or incur obligations on any other
Party’s behalf without such other Party's prior written
consent.
Sublicense
Agreement
10.4 Modification.
Except as otherwise specifically provided herein, no modification
to this Agreement will be effective unless assented to in writing
by the Party to be charged.
10.5 Notice.
Any notification that is to be given to either Party by the other
Party pursuant to the provisions of this Agreement shall not be
effective unless delivered by a nationally recognized overnight
delivery service or by certified mail, return receipt requested at
the addresses first written above. All such notices shall be deemed
effective on the Business Day after such notice is placed with the
overnight delivery service or two Business Days after being sent by
certified mail.
10.6 Headings.
The headings contained in this Agreement are for reference purposes
only and will not affect in any way the meaning or interpretation
of this Agreement.
10.7 Severability.
The invalidity or unenforceability of any provision of this Agreement shall not affect or limit the
validity or enforceability of any other provision hereof. If for
any reason any provision of this Agreement shall be held by a court
of competent jurisdiction to be illegal, invalid or unenforceable,
the remaining provisions of this Agreement shall remain in full
force and effect. In lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this
Agreement a provision as similar in terms to such illegal, invalid
or unenforceable provision as may be legal, valid and
enforceable.
10.8 Complete
Agreement. This Agreement constitutes the full and entire
understanding and agreement among the Parties with regard to the
subject matter hereof and supersedes all prior or contemporaneous
proposals, oral or written, understandings, representations,
conditions and all other communications among the Parties relating
to such subject matter. Any other terms or conditions shall not be
incorporated herein or be binding upon any of the Parties unless
expressly provided herein or agreed to in writing by all of the
Parties.
10.9 Waiver.
No delay or omission by any Party to exercise any right or power
hereunder shall impair any right or power or be construed to be a
waiver thereof. A waiver by any of the Parties of any of the
covenants, conditions or agreements to be performed by any of the
other Parties or any breach thereof shall not be enforceable
against the waiving Party unless in writing and executed by the
waiving Party, and shall not construed to be a waiver of any
succeeding breach thereof or of any other covenant, condition or
agreement contained herein. All remedies provided for in this
Agreement shall be cumulative and in addition to and not in lieu of
any other remedies available to any Party at Law, in equity or
otherwise, and may be enforced concurrently therewith or from time
to time.
10.10 Bankruptcy.
All rights and licenses granted by Sublicensor under this Agreement
are and shall be deemed to be rights and licenses to
“intellectual property”' and all Products are and shall
be deemed to be “embodiment(s)” of “intellectual
property” for purposes of, and as such terms are used in and
interpreted under, Section 365(n) of the United States Bankruptcy
Code (the “Bankruptcy
Code”). Sublicensee shall have the right to exercise
all rights and elections with respect to all Licensed IP and all
Products. Without limiting the generality of the foregoing,
Sublicensor acknowledges and agrees that, to the extent legally
permissible, if Sublicensor or its estate shall become subject to
any bankruptcy or similar proceeding:
Sublicense
Agreement
(a) subject to
Sublicensee's rights of election, all rights and licenses granted
to Sublicensee hereunder will continue subject to the terms and
conditions of this Agreement and will not be affected, even by
Sublicensor's rejection of this Agreement; and
(b) Sublicensee shall
be entitled to a complete duplicate of (or complete access to, as
appropriate) all such Licensed IP and embodiments of Licensed IP
comprising or relating to any Product, and the same, if not already
in Sublicensee's possession, shall be promptly delivered to
Sublicensee, unless Sublicensor elects to and does in fact continue
to perform all of its obligations under this
Agreement.
10.11 Force
Majeure. Neither Party shall be liable or responsible to the
other Party, nor be deemed to have defaulted under or breached this
Agreement, for any failure or delay in fulfilling or performing any
term of this Agreement, when and to the extent such failure or
delay is caused by:
(a)
acts of
nature;
(b)
flood, fire, or
explosion;
(c)
war, terrorism,
invasion, riot, or other civil unrest;
(d)
embargoes or blockades in effect on or after the date of this
Agreement;
(e)
national or
regional emergency;
(f)
strikes, labor
stoppages or slowdowns, or other industrial
disturbances;
(g) any
passage of Law or governmental order, rule, regulation or
direction, or any action taken by a governmental or public
authority, including imposing an embargo, export or import
restriction, quota, or other restriction or prohibition;
or
(h)
national or regional shortage of adequate power or
telecommunications or transportation facilities:
(each of the foregoing, a “Force Majeure
Event”), in each case,
provided that (i) such event is outside the reasonable control of
the affected Party; (ii) the affected Party provides prompt notice
to the other Party, stating the period of time the occurrence is
expected to continue; and (iii) the affected Party uses diligent
efforts to end the failure or delay and minimize the effects of
such Force Majeure Event.
Either
Party may, in its sole discretion, terminate this Agreement if a
Force Majeure Event affecting Sublicensor continues substantially
uninterrupted for a period of thirty (30) days or more. Unless a
Party terminates this Agreement pursuant to the preceding sentence,
all dates by which a Party must perform any act or on which a Party
obligation is due shall automatically be extended for a period up
to ten (10) days after the duration of the Force Majeure
Event.
10.12 Further
Assurances. Each Party shall, upon the reasonable request,
and at the sole cost and expense, of the requesting Party, promptly
execute such documents and perform such acts as may be reasonably
necessary to give full effect to the terms of this
Agreement.
10.13 No
Public Announcements. Sublicensor shall not issue or release
any announcement, statement, press release, or other publicity or
marketing materials relating to this Agreement without the prior
written consent of Sublicensee. Unless expressly permitted under
this Agreement, neither Party shall use the other Party's
trademarks, service marks, trade names, logos, domain names, or
other indicia of source, association, or sponsorship, in each case,
without the prior written consent of the other Party, which shall
not be unreasonably withheld, delayed or conditioned.
Sublicense
Agreement
10.14 No
Third-Party Beneficiaries. This Agreement is for the sole
benefit of the Parties hereto and their respective successors and
permitted assigns and nothing herein, express or implied, is
intended to or shall confer upon any other Person any legal or
equitable right, benefit, or remedy of any nature whatsoever, under
or by reason of this Agreement.
10.15 Waiver
of Jury Trial. Each Party irrevocably and unconditionally
waives any right it may have to a trial by jury in respect of any
legal action arising out of or relating to this Agreement or the
transactions contemplated hereby.
10.16
Equitable
Relief. Each Party
acknowledges that a breach by the other Party of this Agreement may
cause the non-breaching Party irreparable harm, for which an award
of damages would not be adequate compensation and agrees that, in
the event of such a breach or threatened breach, the non-breaching
Party will be entitled to seek equitable relief, including in the
form of a restraining order, orders for preliminary or permanent
injunction, specific performance and any other relief that may be
available from any court, and the Parties hereby waive any
requirement for the securing or posting of any bond or the showing
of actual monetary damages in connection with such relief. These
remedies shall not be deemed to be exclusive but shall be in
addition to all other remedies available under this Agreement at
Law or in equity, subject to any express exclusions or limitations
in this Agreement to the contrary.
10.17 Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together will
constitute one instrument.
10.18 Survival.
Notwithstanding any provisions herein to the contrary, upon the
termination of this Agreement for any reason whatsoever, the
provisions of this Agreement which by their nature require some
action or forbearance after such termination (including but not
limited to those related to payment, indemnities, insurance,
warranties, audit and confidentiality) shall survive such
termination and be binding until any actions, obligations and/or
rights therein provided have been completely satisfied or
released.
Signature Page follows
SIGNATURE PAGE
SUBLICENSE AGREEMENT
IN WITNESS WHEREOF, and expressly intending to be legally
bound, the duly authorized representatives of each
of the Parties have executed this
Agreement as of
the Effective Date.
|
|
CGI
Cellerate RX, LLC,
as
Sublicensor
By
/s/ Xxxxxx. X.
Xxxxx
Xxx
Xxxxx
President
CELLERATE,
LLC,
as
Sublicensee
By
/s/ Xxxxxxx
Xxxxxxxx
Xxxx
Xxxxxxxx
Vice
President
|
SIGNATURE PAGE
SUBLICENSE AGREEMENT
SCHEDULE A
PRODUCTS
CellerateRX®
Medical Hydrolysate of Type 1 bovine collagen without any
additional additives chemicals or ingredients, in gel (>60%
collagen), powder (>90% collagen) and spray (not yet offered)
form.
SCHEDULE B
VIOLATION OF INTELLECTUAL PROPERTY RIGHTS
There
are certain disputes between Applied Nutritionals and Wound Care
Innovations, LLC with respect to certain of Applied
Nutritionals’ intellectual property and the former
contractual relationship between such entities.
SCHEDULE C
TRADEMARKS
Cellerate Rx
