DEVELOPMENT AND EXCLUSIVE OPTION AGREEMENT
EXHIBIT
10.1
This
Development and Exclusive Option Agreement (this “Agreement”),
effective as of February 1st, 2007 (the “Effective
Date”)
is
entered into by and between HANESBRANDS
INC.,
having
an address and contact person at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇,
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Attention: ▇▇▇▇ ▇▇▇▇▇▇) (“HBI”)
and
QUICK-MED
TECHNOLOGIES, INC.,
having
an address and contact person at ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, President) (“Quick-Med”).
HBI
and Quick-Med are sometimes referred to herein individually as a “Party”
and
collectively as the “Parties”.
RECITALS
WHEREAS,
HBI and Quick-Med are negotiating a license agreement, substantially in the
form
of Exhibit
A
(the
“License
Agreement”),
pursuant to which Quick-Med will grant to HBI a license under certain of
Quick-Med’s technology relating to the control of ***** and ***** on clothing
and apparel products;
WHEREAS,
HBI desires to obtain an option to enter into the License Agreement and obtain
an exclusive license to the Quick-Med technology pursuant to the terms and
conditions thereof and Quick-Med desires to grant such option to HBI upon
the
terms and conditions set forth herein.
Now,
therefore, in consideration of the mutual promises contained herein, the
parties
agree as follows:
1.
DEFINITIONS
| 1.1 |
“Confidential
Information”
shall have the meaning set forth in Section 5.1 of this
Agreement.
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| 1.2 |
“Field”
shall mean the application of the
Composition (as defined in the License Agreement) and Process (as
defined
in the License Agreement) to Underwear (as defined in the License
Agreement) for the purpose of controlling ***** and
*****.
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| 1.3 |
“Option”
shall have the meaning set forth in Section 3.1 of this
Agreement.
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| 1.4 |
“Option
Period”
shall mean the Term.
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| 1.5 |
“Licensed
Products”
shall mean the apparel and products identified
in the definition of the Field.
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| 1.6 |
“Licensed
Technology”
shall have the meaning set forth in Section 1.14 of the License
Agreement.
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| 1.7 |
“Term”
shall mean the life of this Agreement, which shall commence on the
Effective Date and shall remain in effect for six months (the
“Term”),
unless earlier terminated in accordance with the provisions of this
Agreement.
|
| 1.8 |
“Territory”
shall have the meaning set forth in Section 1.27 of the License
Agreement.
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| 2. |
DEVELOPMENT
AND FUNDING OF DEVELOPMENT
COSTS
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|
2.1
|
Development
Activities.
Subject to the terms and conditions of this Agreement, Quick-Med
will use
commercially reasonable efforts during the Term to continue to
develop the
Licensed Technology for use in the Field. HBI
and Quick-Med agree that HBI will be conducting a ***** test during
the
Term. Quick-Med and HBI will reasonably cooperate on the development
of
the ***** test.
|
*****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange
Commission.
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2.2
|
Consulting
Work.
To the extent that during the Term HBI requires consulting work
from
Quick-Med in connection with the wear tests or for other work due
to
requests made by HBI (and accepted by Quick-Med) for development
work,
then the rate for such work shall be at $1000 per day per person.
In
addition, the reasonable out-of-pocket expenses for food, lodging,
travel,
and consumables incurred and for third party expenses (including,
without
limitation, independent third party consultants and laboratory
expenses)
incurred by Quick-Med will be separately billed as incurred and
paid by
HBI, subject to submission to HBI of evidence of such out-of-pocket
expenses in form and substance reasonably satisfactory to HBI.
All bills
shall be issued on the last day of the month in which the work
is
performed and paid within fifty-five (55) days of the date
thereof.
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| 3. |
GRANT
OF OPTION
|
|
3.1
|
Quick-Med
hereby grants to HBI an exclusive option (the “Option”)
during the Option Period to enter into the License Agreement in
substantially the form attached hereto and, pursuant to and subject
to the
terms and conditions thereof, to obtain an exclusive license to
use the
Licensed Technology to make, sell, offer to sell, and import Licensed
Products. During the Term and so long as this Agreement is not
terminated,
Quick-Med shall not enter into negotiations or an agreement with
a third
party granting to such
third party an
exclusive, royalty bearing license in the
Territory to use the Licensed
Technology to
make, sell, offer to sell and import any apparel products in the
Field
utilizing the Licensed Technology.
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|
3.2
|
In
consideration of this Option, HBI
shall pay Quick-Med payments (“Option
Payments”)
in the amount of $45,000 every three month period during the Term
to
maintain the Option, commencing on the Effective Date, and payable
no
later than the 55th day following the first day of each three month
period
thereafter during the Term (each, an “Option
Payment Date").
All Option Payments due to Quick-Med and actually paid by HBI shall
be
***** to ***** of the first ***** payable to Quick-Med under the
License
Agreement if and when such License Agreement is executed. During
the Term,
HBI agrees to run and complete three studies as follows and at
the
following time periods:
|
|
Study
|
Period
of Study
|
|
Study
1: ***** study
|
Execution
through February 28, 2007
|
|
Study
2***** Study
|
March
1, 2007 through April 30, 2007
|
|
Study
3: ***** Study
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May
1, 2007 through end of Term
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Quick
Med
and HBI shall cooperate on the design and execution of each study. The results
of each of these studies shall be reported to Quick-Med in writing and shall
be
maintained as confidential information of both HBI and Quick-Med. At the
conclusion of the ***** Study, the ***** Study and the *****Study, HBI shall
provide to QMT with notice of “go/no-go” decision made in good faith as to
whether NIMBUS shall be the preferred solution for each product line within
the
***** Category as set forth in the attached License Agreement. In such notice,
HBI shall inform QMT if it is proceeding with NIMBUS as a preferred solution
for
its ***** Longer program or not and identify which product categories, it
will
not be proceeding with to the next study, whereupon such product categories
shall be no longer subject to the exclusivity requirement set forth in this
Section 3. At the conclusion of the *****Study, the final “go/no-go” decision
shall be made by HBI as to all product categories on or before the expiration
of
the Term.
4.
EXERCISE OF OPTION
4.1
HBI
may
exercise the Option by sending Quick-Med written notice of such exercise
during
the Option Period.
*****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange
Commission.
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4.2
|
Upon
Quick-Med’s receipt of the written notice described in Section 4.1, the
parties shall complete, acting reasonably and in good faith, and
date the
License Agreement with the date of the Option Notice and execute
and
deliver to each other signed copies of the License Agreement, whereupon
the License Agreement shall immediately become effective. Such
terms to be
completed include the product lines selected by HBI, the formula
at
Exhibit 3.1(a) and the minimum sales in Sections 2.1(f) and 3.1(b)
shall
be adjusted to reflect additional minimum sales as reasonably agreed
by
the parties for the addition of product lines above and beyond
***** and
***** and *****.
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4.3
|
If
HBI fails to exercise the Option during the Option Period, this
Agreement
and all rights granted hereunder, including without limitation
the Option,
shall immediately terminate and neither Party shall have any further
obligation to the other except to the extent such obligation was
incurred
prior to the effective date of such
termination.
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5.
CONFIDENTIALITY
|
5.1
|
Each
Party acknowledges that, in furtherance of this Agreement, it may
wish to
disclose to the other Party certain business, technical or other
information that the disclosing party considers confidential, whether
or
not such information is in writing and whether or not it is identified
as
confidential (“Confidential
Information”).
During
the Term and for a period of five (5) years following the expiration
or
termination of this Agreement (provided, that with respect to any
Confidential Information related to the Composition and Process
(as
defined in the License Agreement), any patents owned or controlled
by
Quick-Med for so long as such patents remain unpublished, and any
know-how
of Quick-Med, the term of this confidentiality obligation shall
be
perpetual because such information constitutes trade secrets of
Quick-Med), each Party shall maintain in confidence any and all
Confidential Information of the other Party. Each Party further
agrees
that it shall not use for any purpose not authorized under this
Agreement
or disclose the Confidential Information to any third party, except
that
either party may disclose Confidential Information under a similar
obligation of confidentiality and non-use on a need-to-know basis
to its
directors, officers, employees, licensors, consultants and agents.
Upon
termination of this Agreement (unless the Option is exercised and
the
License Agreement becomes effective), each party shall return to
the other
Party Confidential Information received from the other in tangible
form.
Notwithstanding the foregoing, this Agreement and the contents
hereof
(excluding Exhibit 1.5 of the License Agreement) may be disclosed
by
either Party to its actual or potential investors and their
representatives in a private financing transaction, or to actual
or
potential acquirers or targets and their representatives in an
acquisition
transaction; provided that such investors, acquirers or targets
and their
representatives agree to keep the Confidential Information confidential
and not use it for any purpose not authorized under this Agreement.
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5.2 Each
party shall be relieved of its obligations under Section 5.1 with respect
to any
Confidential Information which:
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(a)
|
was
already known to the receiving Party
as
demonstrated by the receiving Party by clear and convincing
evidence,
other than under an obligation of confidentiality, at the time
of
disclosure by the other Party;
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(b)
|
was
generally available or known to the public or otherwise part of
the public
domain at the time of its disclosure to the receiving Party
as
demonstrated by the receiving Party by clear and convincing
evidence;
|
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(c)
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became
generally available or known to the public or otherwise part of
the public
domain after its disclosure through no fault attributable to the
receiving
Party
as
demonstrated by the receiving Party by clear and convincing
evidence;
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(d)
|
was
disclosed to the receiving Party by a third party who had no obligation
to
the disclosing Party or another party not to disclose such information
to
others
as
demonstrated by the receiving Party by clear and convincing evidence;
or
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(e)
|
was
independently discovered or developed by the receiving Party without
the
use of Confidential Information belonging to the disclosing
Party
as
demonstrated by the receiving Party by clear and convincing
evidence.
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*****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange
Commission.
In
addition to the foregoing, nothing in this Agreement shall restrict the right
of
either Party from disclosing Confidential Information pursuant to a judicial
order issued by a court of competent jurisdiction, or other valid and binding
court ordered discovery or if specifically obligated to make such disclosure
under any law, regulation or rule (including without limitation under any
applicable securities laws), in the reasonable opinion of its legal counsel,
but
only to the extent so ordered or required, provided, however, that the Party
so
ordered shall notify the other Party, in writing, of such pending action
to
compel disclosure, legal requirement or such order in sufficient time to
permit
adequate time for response by the affected Party, if available. The receiving
Party shall provide all reasonable assistance, at the disclosing Party’s expense
and direction, in opposing such disclosure order.
6. INTELLECTUAL
PROPERTY
|
6.1
|
Quick-Med
shall retain sole and exclusive ownership of all Licensed Technology,
any
improvements or modifications thereto, and any other inventions
or works
of authorship conceived or reduced to practice, or otherwise created,
during the performance of the development activities hereunder.
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6.2
|
Nothing
in this Agreement shall be construed to grant HBI any licenses,
expressed
or implied, or any other similar rights in the Licensed Technology
or any
other technology or information of Quick-Med, other than the express
Option grant under Section 4 of this
Agreement.
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7. TERMINATION
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7.1
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Neither
party may terminate this Agreement without cause during the Term.
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| 7.2.1 |
Either
Party may terminate this Agreement upon any material breach of this
Agreement by the other Party that is not cured within fifteen (15)
days
after written notice thereof by the non-breaching
Party.
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| 7.3 |
All
rights and obligations applicable under this Agreement through the
effective date of termination shall continue to apply until such
date
irrespective of any delivery of notice of
termination.
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8. DISCLAIMER
OF WARRANTIES;
LIMITATION OF LIABILITY
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8.1
|
HBI
ACKNOWLEDGES THAT THE DEVELOPMENT ACTIVITIES ARE EXPERIMENTAL IN
NATURE
AND QUICK-MED MAKES NO REPRESENTATION, EITHER EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR
A PARTICULAR PURPOSE WITH RESPECT TO ANY LICENSED TECHNOLOGY, OR
ANY
DATA,
PRODUCTS
OR
OTHER RESULTS OF THE DEVELOPMENT ACTIVITIES
HEREUNDER.
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9. PUBLICITY
Except
as
required by law, regulation or rule, both Parties agree not to use the name
of
the other, nor of any member of the other’s personnel, in any publicity,
advertising, or news release without the prior written approval of the other
Party.
10.
NOTICES
|
Notices,
payments and other communications hereunder shall be deemed to
have been
made when delivered, sent by telex or telegram, or when mailed
first
class, postage prepaid, and addressed to the Party at its address
first
set forth above, or such other address as may hereafter be designated
by
notice in writing.
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*****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange
Commission.
11. MISCELLANEOUS
|
11.1
|
This
Agreement embodies the entire understanding of the parties and
supersedes
all prior agreements, oral or written, and all other communications
between the parties relating to the subject matter hereof; provided
that
the License Agreement shall supersede this Agreement upon becoming
effective as set forth herein.
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11.2
|
No
amendment or modification of this Agreement shall be valid or binding
upon
the parties unless made in writing and signed by their duly authorized
employees.
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11.3
|
HBI
shall not assign its rights or obligations under this Agreement,
in whole
or in part, without the prior written consent of Quick-Med. This
Agreement
shall be binding on and inure to the benefit of the successors
or
permitted assigns of the Parties, and all entities controlled by
them.
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11.4
|
If
a court of competent jurisdiction declares any provision of this
Agreement
invalid or unenforceable, or if any government or other agency
having
jurisdiction over either Party deems any provision to be contrary
to any
laws, then that provision shall be severed and the remainder of
the
Agreement shall continue in full force and effect. To the extent
possible,
the Parties shall revise such invalidated provision in a manner
that will
render such provision valid without impairing the Parties’ original
intent.
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11.5
|
The
failure of a Party in any one or more instances to insist upon
strict
performance of any of the terms and conditions of this Agreement
shall not
constitute a waiver or relinquishment, to any extent, of the right
to
assert or rely upon any such terms or conditions on any future
occasion.
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11.6
|
No
expiration or termination of this Agreement shall relieve either
party of
any obligation accruing prior to such expiration or termination.
The
provisions of Sections 2
(to the extent applicable to payments or reports due after termination
or
termination of this Agreement), 5, 6, 8, 9, 10, this 11.6, 11.7,
and 11.8
shall
survive the expiration or termination of this
Agreement.
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11.7
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The
relationship between the Parties is that of independent contractors.
The
Parties are not joint venturers, partners, principal and agent,
master and
servant, employer or employee, and have no other relationship other
than
independent contracting parties. Neither Party has the right or
authority
to assume, create, or incur any third party liability or obligation
of any
kind, express or implied, against or in the name of or on behalf
of
another except as expressly set forth in this
Agreement.
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11.8
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This
Agreement shall be governed by and construed in accordance with
the laws
of the
State of Florida
without regard to the conflicts of law principles thereof. With
respect to any dispute under this Agreement, if
HBI brings suit against Quick-Med it shall have the exclusive option
to do
so in the courts (state or federal) of Florida, and the Parties
shall
submit to the exclusive jurisdiction of such courts. If Quick-Med
brings
suit against HBI it shall have the exclusive option to do so in
the in the
courts (state or federal) of North Carolina, and the Parties shall
submit
to the exclusive jurisdiction of such
courts.
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11.9
|
The
Agreement may be executed in two or more counterparts, each of
which shall
be deemed an original, but all of which together shall constitute
one and
the same instrument.
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*****
This material has been omitted pursuant to a request for confidential treatment
and filed separately with the Securities and Exchange
Commission.
IN
WITNESS WHEREOF, the parties have executed the Agreement as of the date first
set forth above.
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HANESBRANDS
INC.
By:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:
VP Purchasing
Date:
February 5, 2007
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QUICK
MED TECHNOLOGIES, INC.
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Title:
President
Date:
February 5, 2007
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EXHIBIT
A
LICENSE
AGREEMENT