Exhibit 10.1

 

TERMINATION AND NON-ASSERTION AGREEMENT

 

This Termination and Non-Assertion Agreement is entered into on May 15, 2014
(“Effective Date”) by and between TSRL, Inc., a Michigan corporation with its
principal place of business at 540 Avis Drive, Suite A, Ann Arbor, Michigan
48108 (“TSRL”), and Simulations Plus, Inc., a California Corporation, with its
principal place of business at 42505 10th Street West, Lancaster, CA 93534-7059
("Simulations Plus") (each a “Party” and collectively, the “Parties”).

 

RECITALS:

 

A.TSRL and Simulations Plus are parties to that certain Exclusive Software
Licensing Agreement dated June 30, 1997 (“License Agreement”) under which TSRL
licensed to Simulations Plus rights to use certain Software Technology and
Databases (as defined in the License Agreement);

 

B.Certain disputes have arisen between the Parties regarding the scope of
Simulations Plus’ royalty obligations, what constitutes Software Technology and
Databases, and regarding other issues under the License Agreement;

 

C.The Parties have agreed to settle their differences and disputes concerning
the License Agreement by the mutual termination thereof and the non-assertion by
each party of certain Claims (defined below), mutual general releases as set
forth herein, certain payments by Simulations Plus to TSRL pursuant to the terms
set forth below, and in consideration of the covenants, agreements and releases
hereinafter set forth.

 

NOW THEREFORE, in consideration of the foregoing recitals, and the mutual
provisions contained herein, the receipt and sufficiency of which are hereby
acknowledged, the Parties to this Agreement agree as follows:

 

TERMS:

 

1.RESPECTIVE OBLIGATIONS OF THE PARTIES    

 (a)Termination of License Agreement. The Parties hereby agree that the License
Agreement shall be terminated in its entirety and shall be of no further force
or effect as of the Effective Date.     (b)Payment to TSRL. Simulations Plus
shall pay to TSRL total consideration in the amount of Six Million Dollars
($6,000,000.00) as follows:    

(i)Not later than five (5) days following the execution of this Agreement,
Simulations Plus shall:    

(1)pay to TSRL the sum of Two Million Five Hundred Thousand Dollars
($2,500,000.00); and    

(2)transfer to TSRL common stock in Simulations Plus having a total value of $1
million ($1,000,000.00) based upon the April 25, 2014 closing price per share of
Simulations Plus common stock of $6.07 for a total number of shares equaling
164,745.

 

 

 

 

   

(ii)On or before April 25, 2015, Simulations Plus shall pay TSRL by wire
transfer the total sum of Seven Hundred and Fifty Thousand Dollars
($750,000.00);    

(iii)On or before April 25, 2016, Simulations Plus shall pay TSRL by wire
transfer the total sum of Seven Hundred and Fifty Thousand Dollars
($750,000.00); and    

(iv)On or before April 25, 2017, Simulations Plus shall pay TSRL by wire
transfer the total sum of One Million Dollars ($1,000,000.00).    

The foregoing payments shall be made to TSRL via wire transfer pursuant to bank
wire transfer instructions provided by TSRL.

The foregoing payments shall not accrue interest.

 

(c)No Legal Proceedings. Each Party warrants and represents to the other that no
legal proceedings have been instituted by such Party as of the Effective Date.

 

2.NON-ASSERTION

 

(a)Definitions

 

(i)“Affiliates” means any corporation or business entity that, directly or
indirectly controls, is controlled by, or is under common control with a Party
at any time during the Term. The term “control” means, in the case of a
corporation, ownership, directly or indirectly, of fifty percent (50%) or more
of the votes for the election of directors, or in the case of a non-stock
company, the legal power to direct or cause the direction of the general
management and policies of such company. A corporation or business entity shall
be deemed an Affiliate hereunder only during the term of the requisite control;
   

(ii)“Claims” refers to and includes all claims, demands, rights, causes of
action, rights of action, rights of subrogation, rights of indemnity, rights to
reimbursement, rights to payments, rights to ownership interests, liens and
remedies of each and every kind or nature whatsoever, whether the same or any of
the same is at law, in equity, or otherwise, and whether the same are or any of
the same is known or unknown to any Party at the time of its execution of this
Agreement;    

(iii)“GastroPlus Products” means any and all products developed by Simulations
Plus or its Affiliates, whether prior to of subsequent to the Effective Date,
relating to gastrointestinal tract absorption prediction or any other related or
ancillary modules or products, including, but not limited to GastroPlus™,
Optimization, Metabolism & Transporter, IVIVCPlus™, PBPKPlus™, PDPlus™, PKPlus™,
Drug-Drug Interaction, Additional Dosage Routes and ADMET Predictor™, and any
improvements, enhancements, localizations or other versions or releases thereof;
   

(iv)“Intellectual Property Rights” means all United States and worldwide
trademarks, service marks, trade dress, logos, copyrights, rights of authorship,
inventions, patents, rights of inventorship, trade secrets, rights under unfair
competition and unfair trade practices laws, and all other intellectual and
industrial property rights related thereto;    

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(v)“Obligations” refers to and includes all obligations, duties, covenants,
liabilities, royalties, license fees, damages, costs, fees (including, without
limitation, all attorneys’ fees), expenses and debts of each and every kind or
nature whatsoever, whether the same are or any of the same is known or unknown
to any Party at the time of its execution of this Agreement;    

(vi)“On Account Of” means directly or indirectly arising out of, resulting from,
connected with, based upon or in any manner related to, in the past, or at
present, the subject to which that phrase refers.    

(b)Non-Assertion by TSRL. TSRL, on behalf of itself and any of its Affiliates,
covenants not to assert any Claims, including, but not limited to, claims of
infringement under Intellectual Property Rights owned or licensable by TSRL or
any TSRL Affiliate, against Simulations Plus, Simulations Plus Affiliates, or
Simulations Plus’ direct or indirect customers or distributors, in any case On
Account Of the development, marketing, sale or use of any GastroPlus Products
(including components thereof) or any new products, improvements or services in
any way related thereto.

 

(c)Non-Assertion by Simulations Plus. Simulations Plus, on behalf of itself and
any of its Affiliates, covenants not to assert any Claims, including, but not
limited to, claims of infringement under Intellectual Property Rights owned or
licensable by Simulations Plus or any Simulations Plus Affiliate, against TSRL,
its Affiliates, licensees, direct or indirect customers or distributors, in any
case On Account Of the development, marketing, sale or use by such entities of
any content licensed by TSRL to Simulations Plus pursuant to the License
Agreement; provided, however, the Parties expressly agree that this paragraph is
not intended to, nor shall it be construed to, apply to any development,
marketing, sale or use of GastroPlus Products by TSRL, its Affiliates,
licensees, or direct or indirect customers or distributors.

 

(d)No Further Obligations or Limitations. Notwithstanding anything in the
foregoing to the contrary, no further Obligations, including, but not limited
to, royalty or other payments, are or will be due from Simulations Plus to TSRL
pursuant to the License Agreement, such obligations having been fully terminated
herein. For the avoidance of doubt, any limitations placed on the parties in the
License Agreement are also terminated.

 

(e)Further Assurances. Each Party is executing this Agreement in consideration
of all of the promises, covenants, agreements and acknowledgments described
herein. Each Party promises to take or cause to be taken all lawful acts to
execute or cause to be executed all documents necessary to implement this
Agreement.

 

3.MUTUAL GENERAL RELEASES

 

(a)General Release. Except for the Obligations of the Parties set forth in
Sections 1 and 2 above, each Party hereto, on its own behalf and on behalf of
its predecessors-in-interest, successors-in-interest, transferees, officers,
directors, shareholders, Affiliates, employees, representatives and assigns, and
each of them (collectively, the “Releasors”), hereby unconditionally and
irrevocably relieves, releases, forgives, remises, acquits and forever
discharges the other Party hereto, and each of their predecessors-in-interest,
successors-in-interest, assigns, officers, shareholders, Affiliates,
representatives, agents, any other fiduciary or representative, and attorneys
(collectively, “Releasees”), and each of them, from any and all Claims and
Obligations, of any kind or nature whatsoever, known or unknown, foreseen or
unforeseen, suspected or unsuspected, vested or contingent, accrued or
unaccrued, which the Releasors either together or severally now have, or may
hereafter have against the Releasees, or any of them, by reason of any matter,
cause of thing whatsoever, from the beginning of time, through and including the
Effective Date. For purposes of clarity and the avoidance of doubt, and without
in any manner limiting the scope of the foregoing, the foregoing includes, but
is not limited to, any Claims and Obligations On Account Of the License
Agreement, including, but not limited, any Obligations thereunder or their
termination hereby, and any other prior business relationship between the
Releasees and the Releasors related to the License Agreement, the Software
Technology and Databases or otherwise (the “Released Matters”). Notwithstanding
the foregoing, this release is not intended by the Parties to operate as a
release of any claim which relates or arises out of conduct or actions which
arise from this Agreement or any breach hereof.

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(b)Waiver of Unknown Claims. It is the intention of each Party in accepting the
consideration provided for herein and in executing this Agreement that this
instrument shall be effective as a full and final accord and satisfaction and
release of each and every Released Matter. In furtherance of this intention,
each Party acknowledges that it is familiar with, or has had explained to it,
Section 1542 of the California Civil Code, which provides as follows:

 

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."

 

Each Party waives and relinquishes every right or benefit which it has or may
have under Section 1542 of the Civil Code of the State of California (and any
statute or common law rule of similar effect in any State or Territory of the
United States) to the full extent that it may lawfully waive such right or
benefit pertaining to the subject matter of this Agreement. In connection with
such waiver and relinquishment, each Party acknowledges that it is aware that it
may hereafter discover facts in addition to or different from those which each
Party now knows or believes to be true with respect to the subject matter of
this instrument, but that it is each Party's intention hereby fully, finally and
forever to settle and release all Released Matters, disputes and differences,
known or unknown, suspected or unsuspected, which now exist, or heretofore have
existed between Simulation Plus’ Releasees and TSRL’s Releasees, and that in
furtherance of such intention, this Agreement given herein shall be and remain
in effect as a full and complete general release, upon the terms herein,
notwithstanding the discovery or existence of any such additional or different
facts.

 

(c)No Admission of Liability. The execution of this Agreement effects a
settlement of claims which are denied and contested. Nothing contained herein
shall be construed as an admission of any liability of any kind by any Party
hereto to the other or to any other person. This Agreement shall constitute an
absolute bar to any claim of any kind, whether any such claim is based on
contract, tort, warranty, mistake or any other theory, whether legal, statutory
or equitable.

 

4.REPRESENTATIONS AND WARRANTIES

 

Each of the Parties to this Agreement represents, warrants and agrees as
follows:

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(a)Each Party acknowledges and warrants that it has been represented by
independent counsel of its own choice throughout all negotiations which preceded
the execution of this Agreement.

 

(b)Each Party hereby warrants and represents to the other Party that it has not
heretofore assigned or transferred, or purported to assign or transfer, to any
person whomsoever not a party hereto any Released Matters which it has released
in this instrument. The assigning or transferring Party shall indemnify and hold
the other Party harmless from and against any claims, demand, damage, debt,
liability, account, reckoning, obligation, cost, expense, lien, action or cause
of action, including reasonable attorneys’ fees, based on, in connection with or
arising out of any such assignment or transfer or purported or claimed
assignment or transfer by such Party of the Released Matters.

 

5.MISCELLANEOUS

 

(a)Waiver of Fees and Costs. Each Party will bear its own costs, expenses and
attorneys’ fees, whether taxable or otherwise, incurred in or in any way arising
out of or relating to the matters released herein.

 

(b)No Reliance on Representations of Another Party. This Agreement is entered
into and executed without reliance upon any promise, warranty or representation
or the lack of any promise, warranty or representation by any Party or any
representative of any Party, other than those expressly contained in this
Agreement.

 

(c)Governing Law. This Agreement shall be deemed to have been made and entered
into in the State of California and shall all respects be interpreted, enforced
and governed by and under the laws of the State of California. In the event of
litigation or arbitration relating to this Agreement, the prevailing Party shall
be entitled to reasonable attorneys' fees and costs.

 

(d)Terms to be Construed Neutrally. The Parties acknowledge that the drafting
and negotiation of this Agreement has been participated in by each of the
Parties and, for purposes of interpreting this Agreement, it shall be deemed to
have been jointly drafted by the Parties.

 

(e)Entire Agreement. This Agreement contains the entire agreement among the
Parties and constitutes the complete, final and exclusive embodiment of their
agreement with respect to the subject matter hereof, and all prior or
contemporaneous agreements, understandings, representations and statements,
whether oral or written, concerning the subject matter hereof are hereby merged
into and superseded by this Agreement. The terms of this Agreement are
contractual and not mere recitals.

 

(f)Modification. The Parties agree that no waiver, amendment or modification of
any of the terms of this Agreement shall be effective unless in writing and
signed by an authorized representative of all Parties affected by the waiver,
amendment or modification. No waiver of any term, condition or default of any
term of this Agreement shall be construed as a waiver of any other term,
condition or default.

 

(g)Execution in Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, all of which together
shall constitute one and the same instrument. The Parties agree that a facsimile
signature on this Agreement shall have the same effect as an original source.

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(h)Invalid Provisions. If any term or provision of this Agreement is held by any
court, arbitrator or tribunal to be void, invalid or unenforceable, in whole or
in part, then the remaining terms and provisions shall nevertheless remain in
full force and effect.

 

IN WITNESS WHEREOF, the Parties have each executed this Agreement on the dates
set forth below.

 

 

SIMULATIONS PLUS, INC.   TSRL, INC.             /s/ Walter Woltosz   /s/ Gordon
Amidon Walter Woltosz, Chairman and CEO   Gordon Amidon, Ph.D.,Chairman      
May 15, 2014   May 15, 2014

 

 

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