Attached files
Exhibit
10.3
CHROMADEX,
INC. - DARTMOUTH EXCLUSIVE LICENSE AGREEMENT
This
Agreement, effective this 13th day
of July 2012,
between
TRUSTEES OF
DARTMOUTH COLLEGE, a non-profit educational and research
institution existing under the laws of the State of New Hampshire,
and being located at Hanover, New Hampshire 03755, hereinafter
called Dartmouth,
and
CHROMADEX, INC., a
corporation of the State of California, with a principal place of
business at 10005 Muirlands Blvd., Suite G, Irvine, California
92618; hereinafter called Company.
WHEREAS, Dartmouth,
under the direction of principal investigator Charles Brenner,
Ph.D. has developed Nicotinamide Riboside Assay System and its
uses; and
WHEREAS, Dartmouth
represents that it has the right to grant licenses granted in this
agreement; and
WHEREAS, Company
wishes to obtain a license under the terms and conditions
hereinafter set forth, and to use its expertise and resources to
manufacture and market the technology;
NOW
THEREFORE, in consideration of the premises and the faithful
performance of the covenants herein contained, IT IS
AGREED:
ARTICLE
I. Definitions
Section
1.01 Dartmouth Patent
Rights. "Dartmouth Patent Rights" shall mean United States
Patent No. 8,197,807 Issued June 12, 2012, United States Patent
Application Serial No. 11/542,832 filed October 4, 2006, United
States Patent Application Serial No. 13/260,392, filed September
26, 2011, and United States Patent No. 8,114,626,Issued February
14, 2012 and any United States or Foreign Patents issuing
therefrom, and any continuations, continuations-in-part, divisions,
reissues, reexaminations or extensions thereof. Dartmouth shall be
the assignee and owner of all such Patents and Patent
Applications.
Section
1.02 Licensed
Products. "Licensed Products" shall mean any products or
processes covered by or made, in whole or in part in a given
territory, by the use of Dartmouth Patent Rights.
Section
1.03 Field. The
"Field" of this Agreement shall mean the following
fields:
Field
1: dietary supplements, sports performance enhancing products,
foods with health claims, such as energy bar, skin care/cosmetic
products;
Field
2: food or drink products requiring FDA approval;
Field
3: consumer foods, such as margarine, yogurt, and
cereal;
Field
4: research.
Section
1.04 Territory. The
“Territory” shall mean the world.
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Section
1.05 Subsidiary.
"Subsidiary" shall mean a legal entity at least 50% of the voting
stock of which is owned directly or indirectly by
Company.
Section
1.06 Agreement.
"Agreement" shall mean this License Agreement.
Section
1.07 Net Sales.
"Net Sales" shall mean the gross billing price Company or its
subsidiaries charge to their customers for Licensed Products, less
sales, use, occupation and excise taxes, and transportation,
discounts, returns and allowances in lieu of returns.
Section
1.08 Effective
Date. "Effective Date" shall mean the date first written
above and shall be the Effective Date of this
Agreement.
Section
1.09 License Year.
The "First License Year" shall mean the period commencing on the
Effective Date and ending December 31, 2012. The second and all
subsequent "License Years" shall commence on January 1 and end on
December 31 of each year.
Section
1.10 Calendar
Quarter. "Calendar Quarter" shall mean the periods ending on
March 31, June 30, September 30 and December 31 of each
year.
ARTICLE
II.
Grant
Section
2.01 License Grant.
Dartmouth hereby grants to Company and its Subsidiaries an
exclusive,
royalty-bearing license under Dartmouth Patent Rights to make, have
made, use, and/or sell Licensed Products in the Field in the
Territory subject to any rights which may be required to be granted
to the Government of the United States of America pursuant to 35
U.S.C. §§200-211. Notwithstanding the foregoing,
Dartmouth expressly reserves a non-transferable royalty-free right
to use the Dartmouth Patent Rights in the Field by its faculty,
staff and researchers, for educational and research purposes only.
Company agrees during the period of exclusivity of this license in
the United States that any Licensed Product produced for sale in
the United States will be manufactured substantially in the United
States to the extent it is commercially reasonable.
Section
2.02 Sublicenses.
Company shall have the right to grant sublicenses to third parties
under Dartmouth Patent Rights to make, have made, use and sell the
Licensed Products with the consent of Dartmouth , which consent
shall not be unreasonably withheld, except that such sublicenses
shall be in writing and expressly subject to the terms of this
Agreement. Such consent is given to Opko Health, Inc. as of the
Effective Date. Company agrees to be responsible for the
performance hereunder by its sublicensees. Dartmouth shall have the
right to review such sublicenses to assure conformity with this
Section. Upon termination of this Agreement, any such sublicenses
will revert directly to Dartmouth.
Section
2.03 Patents. Upon
execution of the Agreement, Company shall reimburse Dartmouth for
expenses Dartmouth has incurred for the preparation, filing,
prosecution and maintenance of Dartmouth Patent Rights as of the
Effective Date and in accordance with the amounts
below:
a)
US Patent No.
8,197,807 - $21,482.15
b)
US Patent
Application Serial No. 11/542,832 - Company will reimburse for
future expenses.
c)
US Patent No.
8,114,626 - $8,542.67
d)
US Patent
Application Serial No. 13/260,392 - Company will reimburse for
future expenses.
e)
Australian Patent
Application Serial No. 2006238858 – Company will pay
$1,269.02 Annuity due by August 1 and future expenses
f)
Canadian Patent
Application Serial No. 2,609,633 – Company will pay $1,719.16
Annuity due by August 1 and future expenses
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Dartmouth shall
control all future preparation, filing, prosecution and maintenance
of Dartmouth Patent Rights. Dartmouth shall invoice and Company
shall reimburse Dartmouth for all future expenses in connection
with these activities. Late payments shall be subject to an
interest charge of one and one half percent (11/2%) per month. If
Company chooses to discontinue prosecution or maintenance of any
United States Patent or Patent Application, which is a subject of
Dartmouth Patent Rights, it will so inform Dartmouth within a
reasonable time before implementation of such decision. Dartmouth
then shall have the right to prosecute or maintain such Patent or
Patent Application on its own and at its own expense, in which case
the license to Company under such Patent or Patent Application will
terminate. COMPANY shall notify Dartmouth by at least three (3)
months before a National Phase deadline whether it will support the
filing of patent applications in particular foreign territories. If
COMPANY decides not to support the filing or maintaining foreign
applications, Dartmouth reserves the right to file or maintain such
applications on its own, in which case the license to COMPANY in
the particular territory will terminate.
ARTICLE
III.
Confidentiality and Representations
Section
3.01 Mutual
Confidentiality. Company and Dartmouth realize that some
information received by one party from the other pursuant to this
Agreement shall be confidential. It is therefore agreed that any
information received by one party from the other, and clearly
designated in writing as "CONFIDENTIAL" at the time of transfer,
shall not be disclosed by either party to any third party and shall
not be used by either party for purposes other than those
contemplated by this Agreement for a period of three (3) years from
the termination of the Agreement, unless or until --
(a)
said information shall become known to third parties not under any
obligation of confidentiality to the disclosing party, or shall
become publicly known through no fault of the receiving party,
or
(b)
said information was already in the receiving party's possession
prior to the disclosure of said information to the receiving party,
except in cases when the information has been covered by a
preexisting Confidentiality Agreement, or
(c)
said information shall be subsequently disclosed to the receiving
party by a third party not under any obligation of confidentiality
to the disclosing party, or
(d)
said information is approved for disclosure by prior written
consent of the disclosing party, or
(e)
said information is required to be disclosed by court order or
governmental law or regulation, provided that the receiving party
gives the disclosing party prompt notice of any such requirement
and cooperates with the disclosing party in attempting to limit
such disclosure.
Section
3.02 Corporate
Action. Dartmouth and Company each represent and warrant to
the other party that they have full power and authority to enter
into this Agreement and carry out the transactions contemplated
hereby, and that all necessary corporate action had been duly taken
in this regard.
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ARTICLE
IV. Due
Diligence
Section
4.01 Milestones.
Company has represented to Dartmouth, to induce Dartmouth to issue
this license, that it will commit itself to a diligent program of
exploiting the Licensed Products so that public utilization will
result therefrom. As evidence thereof, Company shall adhere to the
following milestones timeline from the
Effective Date and
associated payments:
|
Field
|
Milestone
|
Timing
|
Payment
|
|
Field
1
|
Commercial-scale
production
|
12
months
|
$2K
|
|
Cumulative
sales >3kg
|
18
months
|
$5K
|
|
|
$200K
cumulative sales
|
24
months
|
$10K
|
|
|
$1M
cumulative sales
|
36
months
|
$15K
|
|
|
Field
2
|
Cumulative
sales >3kg
|
36
months
|
$5K
|
|
Cumulative
sales >20kg
|
48
months
|
$10K
|
|
|
Field
3
|
Cumulative
sales >3kg
|
18
months
|
$5K
|
|
$100K
cumulative sales
|
24
months
|
$10K
|
|
|
$500K
cumulative sales
|
36
months
|
$15K
|
|
|
Field
4
|
$5K
cumulative sales
|
24
months
|
$500
|
|
$10K
cumulative sales
|
36
months
|
$1k
|
It is
acknowledged that if the above milestones are not accomplished by
the dates specified in this Section 4.01, the licenses shall
terminate unless payments in the above amounts are made to
Dartmouth within thirty (30) days of the specified dates in
accordance with Section 9.02.
ARTICLE
V. Payments, Records and
Reports
Section
5.01 Payments. For
the rights and privileges granted under this license, Company shall
pay to Dartmouth
(a) an
earned royalty of 3% based on the value of Net Sales of the
Licensed Products. If Licensed Product is combined with another
product and/or ingredient and sold by Company in such a combination
("Combination Product"), then Net Sales of the Licensed Product for
the earned royalty calculation shall be Net Sales of the
Combination Product multiplied by A divided by B (A/B), where A is
the sale price of the Licensed Product when sold separately and B
is the sale price of the Combination Product; and
(b) a
non-refundable, non-creditable, one-time license access fee of
$50,000 due upon execution of this Agreement; and
(c)
annual license maintenance fee of $35,000 due upon each anniversary
of the agreement and creditable towards preceding annum's royalty
payments per Section 5.01(a); and
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(d)
thirty percent (30%) of any consideration received from an
infringement settlement less litigation expenditures, as described
in Section 8.01, and from each sublicense, on the sale of Licensed
Products (e.g., license issue fees, license maintenance fees, lump
sum payments in lieu of royalty payments, stocks, and earned
royalty, etc.) received from each sublicensee of Company for the
grant of a sublicense
Section
5.02 Reports.
Company shall render to Dartmouth:
(a)
within forty five (45) days after the end of each Calendar Quarter
a written account of all quantities of Licensed Products subject to
royalty hereunder sold by Company, any Subsidiary, and any
sublicensee during such Calendar Quarter, the calculation of
royalty thereon, and sufficient data for Dartmouth to verify the
calculation, including gross sales and allowable deductions to
derive to Net Sales figures, and shall simultaneously pay in United
States dollars to Dartmouth the royalty due with respect to such
sales. Conversion of foreign currency to U.S. dollars shall be made
at the conversion rate existing in the United States on the date of
royalty payments by Company. Such report shall be certified as
correct by an officer of Company. If no Licensed Products subject
to royalty hereunder have been sold by Company, its Subsidiaries
and its sublicensees during any such quarter, Company shall so
report in writing to Dartmouth within forty five (45) days after
the end of said quarter. If royalties for any License Year do not
equal or exceed the minimum royalties established in Section 4.02,
Company shall include the balance of the minimum royalty with the
payment for the Calendar Quarter ending December 31. Late payments
shall be subject to an interest charge of one and one half percent
(11/2%) per month.
(b)
within sixty (60) days after the close of each License Year written
annual reports which shall include but not limited to: reports of
progress on research and development, regulatory approvals,
manufacturing, sublicensing, marketing and sales during preceding
twelve (12) months as well as plans for coming year. Company shall
also provide any reasonable additional data Dartmouth requires to
evaluate Company's performance.
(c)
within thirty (30) days of occurrence report of the date of first
sale of Licensed Products in each country.
Section
5.03 Books of
Accounts. Company, its Subsidiaries and sublicensees shall
keep full, true and accurate books of accounts and other records
containing all particulars which may be necessary for the purpose
of ascertaining and verifying the royalties payable to Dartmouth by
Company hereunder. Upon Dartmouth's request, Company, its
Subsidiaries and sublicensees shall permit an independent Certified
Accountant selected by Dartmouth (except one to whom Company has
some reasonable objection), to periodically have access during
ordinary business hours to such records of Company, its
Subsidiaries and sublicensees as may be necessary to determine, for
any quarter ending not more than three (3) years prior to the date
of such request, the correctness of any report and/or payment made
under this Agreement. In the event that any such inspection shows
an underreporting and underpayment in excess of five percent (5%)
for any twelve (12) month period, then Company shall pay the cost
of such examination.
ARTICLE
VI. Technical Assistance
and Commercial Development
Section
6.01 Technical
Assistance. Throughout the term of the Agreement, Dartmouth
agrees to permit Company and its designees to consult with its
employees and agents regarding developments and enhancements made
subsequent to the Effective Date relating to the Licensed Products,
at such times and places as may be mutually agreed upon; provided
that Company agrees to make suitable arrangements with, and to
compensate the Dartmouth employees and agents for such
consultation.
Section
6.02 Commercial
Development. During the term of this Agreement, Company
agrees to use commercially reasonable efforts to effectively
manufacture and market Licensed Products. Such efforts will include
sublicensing, development of promotional literature, mailings, and
journal advertisements.
Section
6.03 Name. Company
shall not use and shall not permit to be used by any other person
or entity the name of Dartmouth nor any adaptation thereof, or the
name of Dartmouth's employees, in any advertising, promotional or
sales literature, or for any other purpose without prior written
permission of Dartmouth, such permission not to be unreasonably
withheld, except that Company may state that it is licensed by
Dartmouth under Dartmouth Patent Rights and that Company may refer
to publications by Dartmouth personnel which relate to the
Dartmouth Patent Rights.
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ARTICLE
VII. Indemnity, Insurance,
Disclaimers
Section
7.01 Indemnity.
Company shall defend and indemnify and hold Dartmouth and its
trustees, officers, agents and employees (the "Indemnitees")
harmless from any judgements and other liabilities based upon
claims or causes of action against Dartmouth or its employees which
arise out of alleged negligence in the development, manufacture or
sale of Licensed Products by Company, its Subsidiaries, and
sublicensees, or from the use by the end users of Licensed
Products, except to the extent that such judgements or liabilities
arise in whole or in part from the gross negligence or willful
misconduct of Dartmouth or its employees, provided that Dartmouth
promptly notifies Company of any such claim coming to its attention
and that it cooperates with Company in the defense of such claim.
If any such claims or causes of action are made, Dartmouth shall be
defended by counsel to Company, subject to Dartmouth's approval,
which shall not be unreasonably withheld. Dartmouth reserves the
right to be represented by its own counsel at its own
expense.
Section
7.02 Insurance. At
such time as any product, process, service relating to, or
developed pursuant to, this Agreement is being commercially
distributed or sold (other than for the purpose of obtaining
regulatory approvals) by Company or by a sublicensee, Subsidiary or
agent of Company, Company shall at its sole cost and expense,
procure and maintain comprehensive general liability insurance in
amounts not less than $2,000,000 per incident and naming the
Indemnitees as additional insureds. Such comprehensive general
liability insurance shall provide (i) product liability coverage
and (ii) broad form contractual liability coverage for Company's
indemnification under this Agreement. If Company elects to
self-insure all or part of the limits described above (including
deductibles or retentions which are in excess of $250,000 annual
aggregate) such self-insurance program must be acceptable to
Dartmouth and Dartmouth Risk Manager. Such insurance will be
considered primary as to any other valid and collectible insurance,
but only as to acts of the named insured. The minimum amounts of
insurance coverage required shall not be construed to create a
limit of Company's liability with respect to its indemnification
under this Agreement.
Company
shall provide Dartmouth with written evidence of such insurance
upon request of Dartmouth. Company shall provide Dartmouth with
written notice at least fifteen (15) days prior to the
cancellation, non-renewal or material change in such insurance; if
Company does not obtain replacement insurance providing comparable
coverage within such fifteen (15) day period, Dartmouth shall have
the right to terminate this Agreement effective at the end of such
fifteen (15) day period without notice or any additional waiting
periods.
Company
shall maintain such comprehensive general liability insurance
beyond the expiration or termination of this Agreement during (i)
the period that any product, process, or service, relating to, or
developed pursuant to, this Agreement is being commercially
distributed or sold by Company or by a sublicensee, Subsidiary or
agent of Company and (ii) a reasonable period after the period
referred to in (i) above which in no event shall be less than
fifteen (15) years.
Section
7.03 Disclaimer.
Nothing contained in this Agreement shall be construed
as:
(a) a
warranty or representation by Dartmouth as to the validity or scope
of any Patent Rights;
(b) a
warranty or representation that any Licensed Products manufactured,
used or sold will be free from infringement of patents, copyrights,
or rights of third parties, except that Dartmouth represents that
it has no knowledge of any existing issued patents or copyrights
which might be infringed;
(c)
except as provided in Section 7.01, an agreement to defend against
actions or suits of any nature brought by any third
parties.
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DARTMOUTH
MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF LICENSED
PRODUCTS
ARTICLE
VIII. Infringement
Matters
Section
8.01 Infringement by Third
Parties. Company shall give Dartmouth prompt notice of any
incident of infringement of Dartmouth Patent Rights coming to its
attention. The parties shall thereupon confer together as to what
steps are to be taken to stop or prevent such infringement. Company
shall be entitled to commence proceedings in its own name against
the infringer, in which event Company shall be responsible for all
legal costs incurred, without recourse to Dartmouth, however
Dartmouth agrees to appear as a party in any such proceedings if
requested by COMPANY and such request is not unreasonably
burdensome on Dartmouth. Company also agrees to reimburse Dartmouth
for out of pocket costs spent in connection with said request.
Financial recoveries from any such litigation will first be applied
to reimburse Company for its litigation expenditures and 30% of
additional recoveries will be paid to Dartmouth. If Company chooses
not to commence litigation within ninety (90) days from the date
the parties confer regarding the infringement, Dartmouth may
commence proceedings against the infringer, in which case Dartmouth
shall be responsible for any legal costs incurred and will be
entitled to retain any damages recovered. In any action to enforce
Dartmouth Patent Rights, either party, at the request and expense
of the other party shall cooperate to the fullest extent reasonably
possible. Company may not settle any infringement action in any way
detrimental to Dartmouth Patent Rights without the expressed
written consent of Dartmouth.
ARTICLE
IX. Duration and
Termination
Section
9.01 Term. This
Agreement shall become effective upon the date first written above,
and unless sooner terminated in accordance with any of the
provisions herein, shall remain in full force during the life of
the last to expire patents under Dartmouth Patent Rights
contemplated by this agreement in the last to expire territory. If
mutually desired, the parties may negotiate for an extension of
this License. Upon the termination of the Agreement Company shall
have the right to sell the remainder of the Licensed Product on
hand, provided the sales will be subject to the royalty payments of
this Agreement.
Section
9.02 Termination -
Breach. In the event that either party defaults or breaches
any of the provisions of this Agreement, the other party shall have
the right to terminate this Agreement by giving written notice to
the defaulting party, provided, however, that if the said
defaulting party cures said default within thirty (30) days after
said notice shall have been given, this Agreement shall continue in
full force and effect. The failure on the part of either of the
parties hereto to exercise or enforce any right conferred upon it
hereunder shall not be deemed to be a waiver of any such right nor
operate to bar the exercise or enforcement thereof at any time or
times thereafter.
Section
9.03 Termination at
Will. Company shall have the right to terminate this
Agreement by giving three (3) months advance written notice to
Dartmouth to that effect and paying a termination fee of $5,000.
Upon termination, a final report shall be submitted and royalty and
other payments due under Article V, as well as unreimbursed patent
expenses per Section 2.03 due Dartmouth become immediately
payable.
Upon
receipt of the termination notice, Dartmouth should be free to
start negotiations with a Third Party for the rights granted
herein.
Section
9.04 Insolvency. In
the event that Company shall become insolvent, shall make an
assignment for the benefit of creditors, or shall file a petition
for bankruptcy, the Agreement shall terminate.
Section
9.05 Prior Obligations and
Survivability. Termination of this Agreement for any reason
shall not release either party from any obligation theretofore
accrued. Sections 3.01, 5.01 – 5.03, 7.01 – 7.03, 9.03,
10.01 – 10.09 shall survive the termination of this
Agreement.
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ARTICLE
X. Miscellaneous
Section
10.01 Governing
Law. This Agreement shall be construed, governed,
interpreted and enforced according to the laws of the State of New
York.
Section
10.02 Notices. Any
notice or communication required or permitted to be given by either
party hereunder, shall be deemed sufficiently given, if mailed by
certified mail, return receipt requested, and addressed to the
party to whom notice is given as follows:
If to
Company, to:
Frank
Jaksch, CEO
ChromaDex,
Inc.
10005
Muirlands Blvd Suite G
Irvine,
CA 92618
If to
Dartmouth, to:
Alla
Kan
Director
Technology Transfer
Office
Dartmouth
College
11 Rope
Ferry Road
Hanover, NH
03755
Section
10.03. Assignment.
Neither party shall assign or transfer this Agreement without the
express prior written consent of the other. For purposes of this
Agreement, an assignment or transfer of this Agreement by COMPANY
shall be deemed to occur in connection with (a) an express
assignment or transfer or (b) a general assignment for the benefit
of creditors or in connection with any bankruptcy or other debtor
relief law. This section will not be deemed to prohibit an
assignment or transfer of this Agreement in connection to a merger
or consolidation to which COMPANY is a party (regardless of whether
COMPANY is the surviving corporation) or to any other transaction
pursuant to which a change would occur in the "ultimate parent
entity" of COMPANY, applying the rules in effect from time to time
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
Section
10.04 Entire
Agreement. This Agreement represents the entire Agreement
between the parties as of the effective date hereof, and may only
be subsequently altered or modified by an instrument in writing.
This agreement cancels and supersedes any and all prior oral or
written agreements between the parties which relate to the subject
matter of this Agreement.
Section
10.05 Mediation and
Arbitration. Both parties agree that they shall attempt to
resolve any dispute arising from this Agreement through mediation.
Both parties agree that at least one employee, capable of
negotiating an agreement on behalf of his employer, shall, within
three weeks of receipt of written notification of a dispute, meet
with at least one employee of the other party who is also capable
of negotiating an agreement on behalf of his employer. If no
agreement can be reached, both parties agree to meet again within a
four week period after the initial meeting to negotiate in good
faith to resolve the dispute. If no agreement can be reached after
this second meeting, both parties agree to submit the
dispute to binding arbitration under the Rules of the American
Arbitration Association before a single arbitrator.
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Section
10.06 Waiver. A
failure by one of the parties to this Agreement to assert its
rights for or upon any breach or default of this Agreement shall
not be deemed a waiver of such rights nor shall any such waiver be
implied from acceptance of any payment. No such failure or waiver
in writing by any one of the parties hereto with respect to any
rights, shall extend to or affect any subsequent breach or impair
any right consequent thereon.
Section
10.07 Severability.
The parties agree that it is the intention of neither party to
violate any public policy, statutory or common laws, and
governmental or supranational regulations; that if any sentence,
paragraph, clause or combination of the same is in violation of any
applicable law or regulation, or is unenforceable or void for any
reason whatsoever, such sentence, paragraph, clause or combinations
of the same shall be inoperative and the remainder of the Agreement
shall remain binding upon the parties.
Section
10.08 Marking. Upon
Dartmouth's direction and consultation, Company agrees to mark the
Licensed Products with all applicable trademarks, and patent
numbers.
Section
10.09 Headings. The
headings of the paragraphs of this Agree-ment are inserted for
convenience only and shall not constitute a part
hereof.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement,
in duplicate originals, by their respective officers hereunto duly
authorized, the day and year herein written.
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THE TRUSTEES OF
DARTMOUTH COLLEGE
By:
/S/ Alla
Kan
Date: July 11,
2012
Name: Alla
Kan
Title: Director
Technology Transfer Office
CHROMADEX,
INC.
By:
/S/ Thomas C.
Varvaro
Date:
July 13, 2012
Name: Thomas C.
Varvaro
Title:
Chief Financial
Officer
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