Attached files
| file | filename |
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| 8-K - Charlie's Holdings, Inc. | form8k-12202019_031225.htm |
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT
BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY
HARMFUL IF PUBLICLY DISCLOSED. SUCH PORTIONS ARE MARKED AS
INDICATED WITH BRACKETS (“[***]”) BELOW
FDA Regulatory Services Agreement
This FDA Regulatory
Services Agreement (this “Agreement”) is entered
into as of this 25th day of November
2019, by and between Avail Vapor,
LLC, a Virginia limited liability company
(“Avail”), and Charlie’s Chalk Dust, a California
Limited Liability Company (“Customer”). Avail and
Customer are sometimes hereinafter referred to individually as a
“Party”
and collectively as the “Parties.” This Agreement
becomes effective as of the date that Avail receives from Customer
the Advance Payment (as hereinafter defined) (“Effective
Date”).
Recitals:
A. Avail is a manufacturer of
e-liquid products and provides regulatory analysis, strategy, and
other consulting services in connection with regulation by the U.S.
Food and Drug Administration (“FDA”) of certain e-liquid
products and vapor devices (collectively, “Products”).
B. Customer
is in the vapor products business.
C. Customer
desires to engage Avail, and Avail desires to be engaged by
Customer, to perform certain services in connection with certain
analytical and strategic services, all as more particularly set
forth herein.
Agreement:
Now,
Therefore, the Parties hereby agree as follows:
1. Definitions.
Words whose initial letters are capitalized are defined terms. When
used in this Agreement, such terms shall have the meaning assigned
to them in the context of this Agreement.
2. Engagement and
Term. Customer
hereby engages Avail, and Avail hereby agrees, upon the terms and
subject to the conditions set forth herein, to provide to Customer
the services described in Section 3.
The term of this Agreement (“Term”) shall commence on
the Effective Date and shall expire upon the completion of the
Strategic Services, unless sooner terminated as provided in Section
5.1.
3.1 Scope of Services.
During the Term, Avail shall provide to Customer one or more
“Service Types” as designated on Schedule 1 to this Agreement
(collectively, the “Strategic
Services”).
3.2 Customer Information and
Responses. Customer agrees to promptly and as soon as is
commercially reasonable, deliver all information, documents, and
data that Avail reasonably requests and to respond to each of
Avail’s enquiries related to Avail’s performance of
Strategic Services, and all such information shall be true and
accurate to the best knowledge of Customer.
3.3 Acknowledgment Regarding
Payment. Customer acknowledges and agrees that: (a) Avail
shall have no obligation to commence any Strategic Services until
Customer has paid the Advance Payment pursuant to Section 6.1(a); and (b) if Customer has engaged Avail
to perform more than one “Service Type” as designated
on Schedule 1,
Avail shall have no obligation to commence any Strategic Services
with respect to such additional “Service Type” until
Customer has paid the applicable “Service Fee Subtotal”
as indicated on Part 2 of Schedule 2 to this Agreement
(the “Fee
Schedule”).
4. Certain
Understandings with Respect to the Strategic
Services.
4.1 Performance of
Services. Avail shall use commercially reasonable efforts in
its performance of the Strategic Services. Customer acknowledges
and agrees that: (a) Avail is authorized to subcontract with one or
more vendors or contract research organizations
(“CROs”)
to perform certain aspects of the Strategic Services so long as a
non-disclosure agreement (“NDA”) is in place to govern
the handling of Customer’s confidential information that is
at least equivalent to the NDA in place between Avail and Customer;
(b) nothing in this Agreement shall in any way preclude Avail or
Customer from
Page 1
engaging in any
business activities or from performing services for its own account
or for the account of others, including entities which may be in
competition with Customer or Avail; and (c) the Strategic Services
provided do not constitute, nor has Avail represented that the
Strategic Services shall constitute, legal advice or legal
services.
4.2 Time is of the
Essence. Each Party acknowledges and agrees that time is of
the essence with respect to its obligations hereunder, including
Customer’s delivery of information, data, and documents to
Avail, and Customer’s responses to Avail’s enquiries
and requests, and that prompt and timely performance of all such
obligations is strictly required. Customer will make best efforts
in performing its obligations.
4.3 Assumption of Risk and No
Guarantee of FDA Approval. Customer acknowledges and agrees
that: (a) Avail’s provision of the Strategic Services may not
result in Customer obtaining FDA approval of any premarket tobacco
product application (“PMTA”) for any Product,
and that Avail may not be able to obtain such approval; (b)
Customer shall have the burden of selecting, in its sole
discretion, which of its Product(s) it will submit PMTA’s for
to the FDA; and (c) Products that may generate the highest revenue
to Customer may be those that FDA might seek to remove from the
marketplace. Customer acknowledges that Avail has disclaimed any
guarantee that FDA will approve any PMTA and that Avail’s
deliverable to Customer is a PMTA for each Product designated on
Schedule 1 (whether
a “Designated
Flavor” or “Device”) following
strategies outlined by Avail in the PMTA e-Liquids Roadmap, which
is included as Attachment 1 to this Agreement. For purposes of this
Agreement, “Flavor
Family” means, with respect to any Designated Flavor,
each nicotine strength designated in Schedule 1 by Customer for
such particularly Designated Flavor.
5. Termination;
Effect of Termination.
5.1 Termination.
Notwithstanding anything in Section 2
to the contrary, Avail may terminate this Agreement if Customer:
(a) fails to pay any amount when due under this Agreement and does
not cure such breach within 10 business days; (b) is in material
breach of any representation, warranty, or covenant of Customer
under this Agreement and either the breach cannot be cured or, if
the breach can be cured, Customer does not cure such breach within
10 business days after Customer’s receipt of written notice
of such breach. Customer may terminate this Agreement in the event
Avail: (a) fails to perform any or all of the Strategic Services
contracted for, when due under this Agreement; (b) is in material
breach of any representation, warranty, or covenant of Avail made
under this Agreement and either the breach cannot be cured or, if
the breach can be cured, Avail does not cure such breach within 10
business days after Avail’s receipt of written notice of such
breach; or (c) has (i) made an assignment for the benefit of
creditors, (ii) had substantially all of its assets placed in the
control of a receiver or trustee, (iii) filed a voluntary petition
for bankruptcy, or sought to effect a plan of liquidation or
reorganization, or (iv) had bankruptcy proceedings brought against
it by any party or (v) the purpose of this Agreement is frustrated
for any reason including but not limited to government regulations
which ban all or any types of flavors or products which are the
subject of the Strategic Services contracted for.
Should
Customer make the strategic decision to terminate this agreement
prior to conclusion of the Strategic Services due to regulatory
action by the FDA, such as a permanent US flavor ban, which renders
the submission of a PMTA or PMTA’s for Customer’s
products to be of negligible commercial value, the Parties agree
that any amount due by Customer shall be resolved according to
Section 5.2 of this Agreement.
5.2 Effect of Expiration or
Termination. Upon the expiration of this Agreement pursuant
to this Section 5, all accrued and unpaid amounts due under Section
6 shall become immediately due and payable to Avail, without
further notice to Customer. Customer acknowledges and agrees that:
(a) Avail shall not be liable to Customer for any damage of any
kind (whether direct or indirect) incurred by Customer by reason of
the expiration or earlier termination of this Agreement; and (b)
Any Parties’ termination of this Agreement will not
constitute a waiver of any of its rights, remedies, or defenses
under this Agreement, at law, in equity, or otherwise.
Page 2
Upon
termination by Customer of this Agreement due to FDA action
pursuant to Section 5.1, Customer shall only be liable to Avail for
the following amounts:
(a) Avail will make
all commercially reasonable efforts to cancel any CRO contracts
related to Customer’s product(s), minimize any amounts due to
the CRO upon cancellation, and recover as much as possible of any
payments already made by Avail for such work to the CRO(s). Any
amount of money provided by Customer to Avail related to CRO
payments that was not already either paid to or committed to a CRO
and any amounts recovered from CRO’s will be refunded to
Customer.
(b) Customer will
forfeit 50% of all amounts paid to Avail prior to cancellation that
are not related to CRO expenses (“Avail’s fees”),
to cover Avail’s work to-date and benefit of access to
Avail’s IP on the Strategic Services.
(c) Avail will
provide to Customer a line-item summary of the above termination
amounts, either remaining to be paid by Customer due to
non-cancelable CRO commitments related to Customer’s
Strategic Services or refundable to Customer upon termination under
this Section 5.2.
(d) Should Customer
dispute the line-item summary, a mutually agreeable independent
accounting firm will be employed at Customer expense to conduct an
audit of the Strategic Services work done by Avail on behalf of the
Customer. The accounting firm will be bound by a non-disclosure
agreement related to Avail’s Confidential Information which
prohibits it from disclosing Avail’s confidential information
to Customer in its performance or reporting of the audit findings,
but will have access to all files, contracts, invoices, etc.
related to the Strategic Services for the performance of a project
financial audit. Both Parties agrees to be bound by the outcome of
the financial audit and to make any adjustments to the amount due
to Customer upon early termination that are indicated by the
outcome of the audit.
(e) Avail shall refund any amount due to
Customer within 30 days of final agreement of the amount due.
Notwithstanding anything else within this Section 5 of the
Agreement to the contrary, under no circumstances shall the amount
due to be refunded to Customer exceed 70% of the total amount paid
by customer for the Strategic Services.
6. COMPENSATION
AND REIMBURSMENT
6.1 Fees for Services.
As consideration payable to Avail for providing the Strategic
Services, Customer shall pay to Avail, in the manner described in
Section 6.4, the following amounts:
(a) The initial
payment described on Part 1 of the Fee Schedule (the
“Advance
Payment”), due within seven (7) days after the
Effective Date; and
(b) The applicable
payments described on Part 2 of the Fee Schedule (each a
“Service
Payment”), due within seven (7) days after Customer
receives an invoice for such Service Payment.
6.2 CRO Costs. The
payments required under Section 6.1(b)
are inclusive of any amounts incurred by Avail to engage any CRO in
connection with the Strategic Services; provided, however, that in the event
that the FDA notifies Avail that additional studies are required
with respect to any Product (“Supplemental Studies, Avail
shall notify Customer in writing of the scope of required work and
corresponding cost and payment terms to Customer to complete such
work, and upon receiving Customer’s pre-approval in writing,
Avail will initiate the Supplemental Study with the understanding
that Customer shall reimburse Avail for the agreed amounts (or such
lesser amount as Avail may determine in its sole discretion) in
connection with such Supplemental Studies (collectively,
“Supplemental
Costs”). Upon Avail’s completion of Supplemental
Studies or at agreed progress points, Avail shall provide to
Customer a statement describing the Supplemental Cost due in
connection with the Supplemental Studies and an invoice, and
Customer shall reimburse Avail for such invoice amount within seven
(7) days after Customer receives such statement.
Page 3
6.3 Master File Option.
Customer shall have the option to obtain a limited license to
reference certain agreed sections of Avail’s “tobacco
product master file” (“Master File”) for the
sole purpose of submission of one or more PMTAs, as more
particularly described in Section 7.3.
Avail shall determine the relevant sections for reference shall be
determined based on the range of services Strategic Services. In
the event that Customer exercises such option, Customer shall first
pay to Avail, in the manner described in Section 6.4, the access
fee described on Part 1 of the Fee Schedule (the
“Master File Access
Fee”). Customer acknowledges and agrees that
Customer’s rights to the limited license described in Section
7.3 shall not commence until such time as Customer pays the Master
File Access Fee.
6.4 Payment Terms; No Reduction
in Amounts Due. Customer shall make all payments required
pursuant to this Section 6 by wire transfer of immediately
available funds to Avail’s account designated on Part 3 of
the Fee Schedule. Customer acknowledges and agrees that
Customer’s payment of any amount required under this Section
6 shall not result in any reduction to any other amount required
pursuant to this Section 6.
7.1 Intellectual Property;
Ownership and Use.
(a) For purposes of
this Agreement, “IP Rights” means any and all
registered and unregistered rights granted, applied for, or
otherwise now or hereafter in existence under or related to any
patent, copyright, trademark, trade secret, database protection, or
other intellectual property rights laws, and all similar or
equivalent rights or forms of protection, in any part of the
world.
(b) Customer
acknowledges and agrees that, subject only to the limited license
granted to Customer under Section 7.3 of this Agreement, Avail is
and will remain the sole and exclusive owner of all right, title,
and interest in and to: (i) the Strategic Services, including all
strategies, procedures, and methodologies in connection therewith;
(ii) the Master File and all information that Avail has prepared
and published at FDA excluding any portions of the Master File and
any information which are Customer IP; (iii) any information
derived exclusively from any Avail owned e-liquid that is included
in this Agreement, including any applicable Flavor Family, that is
generated by Avail or by any CRO; (iv) the identity of any CRO
retained by Avail and the nature of any testing methodologies used
in connection with providing the Strategic Services; and (v) all
Licensed Data (as hereinafter defined), including all IP Rights
thereto (collectively, “Avail IP”).
(c) Avail acknowledges
and agrees that Customer is the sole owner of all right, title, and
interest in and to (i) each PMTA, if any, created for Customer in
connection with the Strategic Services; (ii) all documentation,
resources, data, results, reports and deliverables that (A) are
created specifically for Customer pursuant to this Agreement and
that do not and could not also relate to other PMTA’s for
other customers or Avail, in which case Customer is granted
non-exclusive ownership of
this information, and that do not reveal the identity of any CRO,
and if so, Avail shall provide a redacted version that removes such
information but is unaltered in any other material respect or (B)
that use, incorporate or rely on Customer’s Confidential
Information; and (iii) information and documentation in any form
regarding, or derived specifically and solely from,
Customer’s Products (collectively, “Customer
IP”).
7.2 Protection of Intellectual
Property.
(a) Each Party
acknowledges and agrees that neither Party shall, during the Term
and thereafter: (i) acquire any ownership interest in any of the
other Party’s IP Rights as described in Section 7.1; (ii)
take any action that interferes with any of the other Party’s
IP Rights as described in Section 7.1, including such other
Party’s ownership or exercise thereof; (iii) challenge any
right, title, or interest of the other Party in or to its IP Rights
as described in Section 7.1; or (iv) make any claim or take any
action adverse to the other Party’s ownership of its IP
Rights as described in Section 7.1.
Page 4
(b) Each Party shall,
during the Term and thereafter: (i) use the other Party’s IP
Rights only in accordance with this Agreement and any instructions
of the Party owning such IP Rights; and (ii) safeguard the other
Party’s IP (including, in the case of Avail, any Licensed
Data), including all copies thereof, from infringement,
misappropriation, theft, misuse, or unauthorized
access.
(a) Avail hereby grants
to Customer a non-exclusive, limited, non-transferable irrevocable
right and license to use during the Term (or applicable part
thereof) the following Avail IP: (i) the Master File, but only upon
Customer’s payment to Avail of the Master File Access Fee
described in Section 6.3; and (ii) testing reports that Avail may
produce or obtain with respect to the Strategic Services
(collectively, “Licensed Data”). Avail is
providing the applicable Licensed Data “AS IS” and
hereby disclaims all warranties, whether express or implied, and
Avail specifically disclaims all implied warranties of
merchantability, fitness for a particular purpose, title, and
non-infringement, and all warranties arising from course of
dealing, usage, or trade practice. Should there be a Customer
breach of this Agreement that results in Avail terminating the
Agreement, the license provided for in this Section 7.3(a) may be
revoked by Avail with immediate effect upon written notification of
Customer.
(b) Customer hereby
grants to Avail a non-exclusive, limited, non-transferable
revocable right and license to use during the Term the Customer IP
for the sole purpose of performing the Strategic
Services.
(c) Customer
acknowledges and agrees that: (i) the Licensed Data (or applicable
part thereof) is being licensed, not sold, to Customer by Avail,
and that Customer shall not acquire under or in connection with
this Agreement any ownership interest in the Licensed Data, or in
any of Avail’s IP Rights; and (ii) Avail shall retain all of
its rights to exploit, commercialize, and otherwise use the Master
File for any other purpose, including licensing the Master File to
others.
(d) Customer shall not
market, assign, grant, or otherwise transfer to any third party the
right to use or access any or all of the Licensed
Data.
7.4 Use and Ownership of
Confidential Information.
(a) In connection with
this Agreement, each Party (“Discloser”) may disclose
or make available to the other Party (“Receiver”) certain
Confidential Information. “Confidential Information”
means and includes: (i) information regarding Discloser’s
business, goods and services, confidential information and
materials comprising or relating to IP Rights, and other sensitive
or proprietary information, whether such information is given
orally or in written, electronic or other form, and whether or not
marked, designated or otherwise identified as
“confidential”; (ii) with respect to Customer, the
Avail IP and all IP Rights related thereto; and (iii) with respect
to Avail, the Customer IP and all IP Rights related thereto.
Notwithstanding the foregoing, Confidential Information does not
include information that: (a) Avail provides to FDA or to a CRO in
performing Strategic Services under this Agreement; (b) is or
becomes generally available to and known by the public other than
as a result of, directly or indirectly, any breach of this Section
7 by Receiver or any of its
representatives; (c) is or becomes available to Receiver on a
non-confidential basis from a third-party source, provided that
such third party is not and was not prohibited from disclosing such
Confidential Information; (d) was known by or in the possession of
Receiver prior to being disclosed by or on behalf of Discloser; (e)
was or is independently developed by Receiver without reference to
or use of, in whole or in part, any Confidential Information; or
(f) is required to be disclosed under applicable law.
(b) Receiver may use
the Confidential Information only as expressly permitted by the
terms of this Agreement in exercising its rights or performing its
obligations hereunder. Receiver may not disclose or permit access
to Confidential Information other than to its representatives who
(1) need to know such Confidential Information in order for
Receiver to exercise its rights or perform its obligations
hereunder, and (2) have been informed of the confidential nature of
the Confidential Information and
Page 5
Receiver’s
obligations hereunder. Receiver shall safeguard the Confidential
Information from unauthorized use, access, or disclosure using at
least the degree of care it uses to protect its own Confidential
Information and in no event less than a reasonable degree of care,
and shall be responsible and liable for any of its
representatives’ non-compliance with the terms of this
Section 7. Notwithstanding anything to
the contrary in this Section 6.4, Customer acknowledges and agrees
that otherwise Confidential Information of Customer that Avail
provides to FDA is not a disclosure for purposes of Section 6.
Receiver acknowledges and agrees that this Agreement does not
constitute any license or other conveyance of any rights (including
any IP Rights) with respect to any of Discloser’s
Confidential Information (except for the limited license created in
Section 7.3) and that, as between the Parties, such Confidential
Information is and shall remain the sole and exclusive property of
Discloser. Receiver shall not, and shall cause its representatives
not to, remove any copyright, confidentiality or proprietary rights
notice attached to or included in any of Discloser’s
Confidential Information and shall reproduce all such notices on
any copies thereof. Receiver shall not, nor shall it allow its
representatives to, take any action inconsistent with
Discloser’s ownership in and to its Confidential
Information.
(c) Supply
of e-liquid. To the extent any PMTA submitted by or on
behalf of Customer in connection with the Strategic Services is for
a Product that is manufactured by Avail, upon Customer’s
request, the Parties shall negotiate in good faith the terms of a
commercial supply agreement for Avail’s supply of e-liquid to
Customer (a “Supply
Agreement”). The Supply Agreement will provide that,
for a period to be agreed as part of the Supply Agreement
discussions, but in any case no less than five years after FDA
approval (if any) of the applicable PMTA, (a) Avail shall not at
any time sell the same product to a different customer at more
favorable commercial terms (which is inclusive of unit price,
freight, duties, packaging, supply duration, volumes, and payment
terms) than those stated in the Supply Agreement with
Charlie’s, (b) if Avail charges a different buyer better more
favorable commercial terms for such e-liquid, Avail must
immediately agree to modify the Supply Agreement to include the
improved terms for the e-liquid to future purchases by Customer
under the Supply Agreement, and (c) shall further be governed by
the pricing terms shown in Schedule 2 Part 4 which have been agreed
to by the Parties. This Section 7.4(c) shall not be construed to
give Avail any ownership rights whatsoever in Charlie’s Mint
Leaf, Fuji Apple Strawberry Nectarine, Head Bangin’ Boogie or
Wonder Worm products (collectively, “Charlie’s
Products”).
(d) Remedies. If either
Party violates any of the provisions of this Section 7, the
non-breaching Party, at its option, may: (a) seek any equitable or
injunctive relief, without the requirement to post bond or other
security, enjoining the breaching Party from continued violation of
those provisions in addition to any other remedies that may be
available to the non-breaching Party; or (b) seek damages for the
violation of the provisions of this Section 7 or pursue any and all other rights and
remedies that may be available at law, in equity or otherwise, all
of which shall be cumulative and not mutually exclusive. Each Party
acknowledges and agrees that any breach or threatened breach of
this Section 7 will injure the other
Party irreparably and that any remedy at law for any breach or
threatened breach shall be inadequate.
8. Disclaimer;
Limitation of Liability; Waiver and Release.
8.1 Disclaimer. Avail
makes no representations or warranties, express or implied, in
respect of the Strategic Services to be provided by Avail
hereunder.
8.2 Limitation of
Liability. Neither Avail nor any of its officers, directors,
managers, members, employees, representatives and affiliates (each
a “Related
Party” and collectively, the “Related Parties”) shall
be liable to Customer or any of its affiliates for any loss, claim,
action, damage, liability, or expense (“Losses”) arising out of
or in connection with the performance of any Strategic Services,
unless such Loss shall be proven in a court of law to be the result
directly from such person’s negligence, gross negligence,
fraud, or willful misconduct.
8.3 Release of Claims.
Customer hereby releases Avail and its successors and permitted
assigns, and any Related Parties from any and all claims, dues and
demands, proceedings, causes of action,
Page 6
orders,
fees and liabilities of any kind or nature, including by or before
any governmental authority, whether known or unknown, suspected or
unsuspected, liquidated or unliquidated, choate or inchoate, fixed
or contingent, both at law and in equity, which Customer now has
against Avail, its successors and permitted assigns, or any Related
Party on account of or arising out of any actual or alleged act,
omission, transaction, practice, conduct, cause, event, or other
matter.
9. Referral
fees
. The Parties agree that Avail shall pay the
Customer a fee (the “Referral Fee”) for any client that
Customer refers to Avail and a.) who signs a contract with Avail
for PMTA related consulting services to be submitted to the FDA, in
whole or in part, prior to May 11, 2020, and b.) was not already in
documented discussions with Avail for such services prior to the
date of referral. This Referral Fee shall be $[***] per client that
is referred to Avail prior to September 6, 2019, and $[***] for any
client after September 6, 2019. The decision on if to agree to any
PMTA contract with any referred client shall be entirely at
Avail’s discretion. Furthermore, the Parties agree that Avail
shall pay Customer a fee (the “Assistance Fee”) of
$[***] per company that Avail is successful in contracting as a
PMTA client that is not already the subject of a Referral Fee, but
that Avail requests Customer’s assistance in writing to
secure as a PMTA consulting services client. No Referral Fee shall
be paid under this Section 9 for any PMTA consulting services
contract if the contract value is less than $[***] per Flavor
Family, calculated as total contract value divided by the number of
Flavor Families included in the contract.
10. Miscellaneous.
10.1 Interpretation. For
all purposes of this Agreement, unless otherwise expressly provided
or unless the context otherwise requires: (a) the singular form of
nouns shall include the plural, and vice versa; (b) the words
“include” and “including,” and variations
thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words, “without
limitation”; (c) the words “herein”,
“hereto” and “hereby”, and other words of
similar import, refer to this Agreement as a whole and not to any
particular section or other subdivision of this Agreement; and (d)
section headings are for reference only and do not affect the
interpretation of this Agreement.
10.2 Survival of
Provisions. The provisions of Sections 6, 7, 8, and 9 shall
survive the expiration or early termination of this
Agreement.
10.3 Governing Law. This
Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Virginia, without
regard to its conflicts of law rules.
10.4 Relationship of
Parties. Nothing contained herein shall create a contractual
relationship between the Parties other than that of Avail being
specifically commissioned as an independent contractor to perform
the Strategic Services. It is further agreed that the specifically
commissioned Strategic Services shall be deemed “work for
hire” as that term is defined by Section 101 of the Copyright
Act (title 17 of the U.S. Code). This Agreement shall not be deemed
to make either Party in any way or for any purpose a partner,
employer, or employee of the other Party.
10.5 Further Assurances.
Upon a Party’s reasonable request, the other Party shall, at
its sole cost and expense, execute and deliver all such further
documents and instruments, and take all such further acts,
necessary to give full effect to this Agreement.
10.6 Assignment; Successors and
Assigns. Neither Party may assign any of its rights or
delegate any of its obligations under this Agreement without the
prior written consent of the other Party, not to be unreasonably
withheld; provided,
however, that Avail may delegate any of its obligations,
except the overall project management of the Strategic Services
contracted here, to one or more qualified and capable vendors or
CROs. Avail shall notify Customer in a timely manner and in writing
of any and all delegations that are made to vendors or CRO’s.
This Agreement shall be binding upon and shall inure to the benefit
of the Parties and their respective successors and permitted
assigns.
Page 7
10.7 No Third-Party
Beneficiaries. Except as otherwise provided in Sections
8.2, 8.3,
and 9, this Agreement is for the
benefit of the Parties and their respective successors and
permitted assigns, and nothing herein, express or implied, confers
on any other person any legal or equitable right, benefit, or
remedy of any nature under or by reason of this
Agreement.
10.8 Entire Agreement;
Amendment. This Agreement and the Schedules referred to
herein constitute the entire agreement of the Parties and supersede
all prior or contemporaneous agreements, undertakings and
understandings of the Parties in connection with the subject matter
hereof. All Schedules are hereby incorporated herein by reference.
This Agreement may be amended, modified, or superseded only by a
written instrument signed by both Parties.
10.9 No Waiver. Neither
Party shall be deemed to have waived compliance by the other Party
of any provision of this Agreement unless such waiver is contained
in a written instrument signed by the waiving Party and no waiver
that may be given by a Party will be applicable except in the
specific instance for which it is given. No course of dealing shall
operate as a waiver or modification of any provision of this
Agreement or otherwise prejudice such Party’s rights, powers
and remedies.
10.10 Notices. To be
effective, all notices and other communications required or agreed
to be given under this Agreement shall be deemed delivered to the
Parties (a) on the date of transmission by e-mail with confirmation
from the recipient of the successful delivery of such transmission,
(b) on the second day following the date of delivery to U.P.S. or
FedEx, or (c) the third day following the date of deposit in the
United States Mail, postage prepaid, or by certified mail, in each
case, addressed as follows:
|
If to
Avail:
|
Avail
Vapor, LLC
820
Southlake Blvd.
North
Chesterfield, VA 23236
Attn:
Russ Rogers
E-mail:
russr@availvapor.com
|
If to
Customer:
|
Charlies Chalk
Dust, LLC
1007
Brioso Drive
Costa
Mesa, CA 92627
Attn:
Ryan Stump
E-mail:
ryan@charlieschalkdust.com
|
|
With
copy to (which shall not constitute notice):
|
Bingham
Greenebaum Doll LLP
3500
PNC Tower
101
South Fifth Street
Louisville, KY
40202
Attn:
Mark Loyd
E-mail:
mloyd@bgdlegal.com
|
With
copy to (which shall not constitute notice):
|
Daman
LLP
369
Lexington Ave, 3rd Floor
New York, New
York 10019
Attn:
Phil Daman
E-mail:
Phillip.Daman@DamanLLP.com
|
10.11 Severability. If any
provision of this Agreement is determined to be invalid or
unenforceable, the remaining provisions shall nevertheless be
binding with the same effect as though the invalid or unenforceable
provision was deleted.
10.12 Waiver of Jury
Trial. Except as otherwise provided in Section 7.5, if any
dispute shall arise between the Parties as to their rights or
liabilities under this Agreement, the dispute shall be exclusively
determined, and the dispute shall be settled, by arbitration in
accordance with the commercial rules of the American Arbitration
Association (“AAA”). The arbitration
shall be held in Chicago, Illinois, before a panel of three
arbitrators, all of whom shall be chosen from a panel of
arbitrators selected by the AAA. Each Party to the dispute shall
select one arbitrator and the two arbitrators so selected shall
select a third arbitrator. If the two arbitrators are unable to
agree on the third arbitrator, the third arbitrator shall be
selected by the AAA. The decision of the arbitrators shall be final
and binding upon the Parties and judgment upon such award may be
entered in any court of competent jurisdiction. The costs of the
arbitrators and of the arbitration shall be borne equally between
the Parties. The costs of each Party’s counsel and
accountants, as well as any costs solely for their benefit, shall
be borne separately by each Party. Each Party acknowledges that this
provision constitutes a waiver of their right
to
Page 8
commence a lawsuit in any jurisdiction with respect to the matters
which are required to be settled by arbitration pursuant to this
Section 10.12.
10.13 Counterparts. This
Agreement may be executed in any number of counterparts, which
shall constitute one and the same instrument when taken together.
Any executed counterpart of this Agreement may be delivered by PDF
or other electronic copy and, if so delivered, shall be deemed to
be and enforceable to the same extent as an original.
[Signatures
Appear on the Following Page]
Page 9
In Witness
Whereof, the Parties have entered into this Agreement as of
the date first written above.
Avail Vapor, LLC
By:
/s/ Russ Rogers
11/20/2019
Russ
Rogers, Chief Operating Officer
(“Avail”)
Charlie’s Chalk Dust, LLC
By:
/s/ Ryan Stump
11/27/2019
Ryan
Stump, Chief Operating Officer
("Customer")
Page
10
Schedule 1
Strategic Services
For purposes of
this Agreement, the term “Strategic Services” is
inclusive of each “Service Type” denoted
below
|
Service Type
|
Scope of Services
|
Designated Flavors
|
Nicotine Strengths
|
|
Analytical Services
|
[***]
|
[***]
|
[***]
|
|
Perception Services
|
[***]
|
||
|
Shared Services
|
[***]
|
||
|
Clinical Trials - Applies ONLY to THREE Charlie’s Flavors
listed in the “Designated Flavors” column (coordinated
with a device company to be identified by Avail)
|
[***]
|
||
|
Publishing & Submission Services
|
[***]
|
Page
11
Schedule 2
Fee Schedule
Part 1 – Pricing Summary
|
Type
|
Amount,
US$
|
|
PMTA
|
$[***]
|
|
Clinical
Trials
|
$[***]
[***]
|
|
Total Pricing: $ 4,440,000 (not including TPMF)
|
|
Part 2 – Service Fees
|
Type
|
Service
Fee Subtotal, USD ($,000)
|
Payment
Plan Schedule
|
|
Analytical
Services Fee
|
$[***]
|
1. Payment#1
HPHC, Toxicology, Stability/Shelf Life and Perception/ Behavior
schedules, approve purchase of standards, assays. Hire focus group
people and initiate human factors work, create master project plan
- $[***] on
Nov27th,
2019
2. Payment#2
to secure Clinical site, build clinical protocols, hire people and
establish study schedule. Start analytical work, shared access -
$[***] on Dec 9th, 2019
3. Payment#3
to continue Analytical, P&B and Clinical studies, shared access
- $[***] on Jan
20th,
2020
4. Payment#4
to complete Analytical testing, begin statistical compilation,
initiate scientific review and initiate Publishing services -
$[***] on Feb 16th, 2020
5. Payment#5
for final reporting of HPHC and Tox studies, Perception &
Behavior services, continue publishing, shared access -
$[***] on Mar 20th, 2020
6. Payment#6
for Clinical studies completion, medical reporting, begin report
and initiate Clinical data integration - $[***] on April 20th , 2020
7. Payment to complete
Publishing services, PMTA compilation, project management, ESG
filing, add partial Stability/Shelf Life data - $[***] on May 8thth,
2020
|
|
Perception
Services Fee
|
$[***]
|
|
|
Shared
Services
|
$[***]
|
|
|
Clinical
Trials - Applies ONLY to THREE Charlie’s Flavors listed in
the “Designated Flavors” column (coordinated with a
device company to be identified by Avail)
|
$[***]
|
|
|
Publishing
& Submission Services Fee
|
$[***]
|
Page
12
|
TOTAL
(US$)$4,440K
|
$4,440K
|
|
Part 3 – Payment Instructions
|
Account
Name:
|
[***]
|
|
Bank
Name:
|
[***]
|
|
Account
No.:
|
[***]
|
|
ABA
No.:
|
[***]
|
Part 4 – Supply Agreement Pricing Terms
|
Product
|
Per
60ml Bottle
|
Per
Gallon
|
|
[***]
|
$[***]
|
$[***]
|
|
[***]
|
$[***]
|
$[***]
|
●
Starting prices
won’t exceed the prices those in table above as year 2020
prices
●
Prices shown do not
include freight
●
Prices shown are
for any nicotine strength below 1.8
●
Bottled liquid
prices assume Charlies’ supplied bottles, boxes, and
labels
●
Bulk liquid price
per gallon assumes packaged in 55-gallon food grade
drum
●
As the requested
agreement might be as much as 10 years in length, annual price
increase need to be considered, but will be capped to not exceed 4%
in any 12 month period, however, should Avail incur a cost increase
on any material for the Products greater than 15% cumulative in any
12-month period, the Parties will work to agree on temporary
modified pricing until the increase situation is resolved. At that
time, pricing will be reduced to the pre-increase level. Avail has
the responsibility to mitigate all increases, and all increases
will be justified by third-party documentation.
Page
13
ATTACHMENT 1
E-LIQUIDS PMTA ROADMAP
Page
14
ATTACHMENT 2
E-LIQUIDS CLINICAL ROADMAP
Page
15
ATTACHMENT 3
PROFILES OF ACCREDITED CROS WITH TOBACCO / NICOTINE
EXPERTISE
Page
16