Item
1.01 Entry Into a Material Definitive Agreement
On
July 31, 2019. PetVivo Holdings, Inc. (“PetVivo”), as Licensor, entered into an Exclusive License Agreement (the “Agreement”)
with Emerald Organic Products Inc. (“Emerald”), as Licensee, whereby PetVivo granted an exclusive license to Emerald
to use PetVivo’s proprietary Technology in the formulation, manufacture and sale of Emerald’s nutritional supplements
including its hemp-based CBD wellness products.
The
Technology of PetVivo licensed to Emerald under the Agreement includes Patents and Know-how involved with protein-based active
agent delivery systems and related carrier formulations for utilization in nutritional supplement applications. PetVivo and Emerald
both believe the Licensed Technology will be significantly beneficial for the delivery and consumption of Emerald’s proprietary
hemp-based CBD products as well as other Emerald products.
The
material terms of the Agreement are as follows:
i) The term of the license is the longer of fifteen (15) years following initial commercial sales by Emerald of the
Licensed Products, or such time as all Patents have expired.
ii)
The licensed territory includes the entire United States, Canada, and the European Union.
iii)
Royalties to be paid by Emerald to PetVivo shall be Twenty-five cents ($0.25) for each single dosage Sales Unit of Licensed
Products, provided that the royalty rate shall increase proportionately with any future increase by Emerald in the price(s)
of Licensed Products; and if exclusivity is removed for failure to meet required Minimum Royalties, the royalty rate shall be
reduced to Fifteen Cents ($0.15) per Sales Unit. Royalties are due quarterly and payable within 30 days of the end of each
quarter.
iv)
Minimum Royalties
— Emerald must make a First Commercial Sale in each
territory within 18 months of the date of the Agreement to retain exclusivity in each territory. During each royalty year,
PetVivo and Emerald shall mutually determine the minimum royalty amounts in order for Emerald to maintain its exclusive
license rights in each territory.
v)
Emerald has the right to sublicense the Technology to third parties.
vi)
Emerald is responsible to obtain any regulatory approval for commercial sales of the Licensed Products.
vii)
Assignment
—
Other than to an affiliate of either PetVivo or Emerald, the Agreement and any of its rights cannot be assigned or
transferred by either party without the written approval of the other party.
viii)
The Agreement also contains other standard license terms including keeping of proper accounting records by Emerald and
PetVivo having the right to audit such records, confidentiality requirements of both parties including adhering to the terms
of a Prior Disclosure Agreement, customary indemnification and termination terms, responsibility of PetVivo to protect its
Patent rights, procedures for the parties to address and prosecute any third party infringement of the Technology, standard
warranties and representations by both parties regarding corporate structures and actions and ownership of Technology by
PetVivo, lack of any pending or threatened material litigation, and resolution of any future disputes through a binding
Alternative Dispute Resolution process.