Exhibit 10.1


 


PATENT AND TECHNOLOGY LICENSE AGREEMENT


 


This Patent and Technology
License Agreement (“Agreement”), effective as of the 12th day of July, 2012 (the “Effective
Date”), is by and between Quick-Med Technologies, Inc., a Nevada corporation having offices at 902 NW 4 Street,
Gainesville, Florida 32601 (“QMT”) and Derma Sciences, Inc., a Pennsylvania corporation having offices
at 214 Carnegie Center, Suite 300, Princeton, New Jersey 08540 (“DERMA”) (each singularly a “Party”
and collectively the “Parties”).


 


WHEREAS, QMT owns or
controls certain Patent Rights and Technology (as such terms are defined below) relating to its proprietary Nimbus®
technology and has the right to grant licenses under such Patent Rights and Technology; and


 


WHEAREAS, QMT has previously
licensed the Patent Rights and Technology to DERMA on an exclusive basis within the United States and Canada pursuant to an Agreement
dated March 23, 2007, as amended (the “Prior Agreement”); and


 


WHEREAS, QMT has now
agreed to license the Patent Rights and Technology to DERMA on an exclusive basis in the Field and Territory (as defined below)
on the terms and conditions of this Agreement.


 


NOW, THEREFORE, in
consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties do hereby agree as follows:


 


1.           Definitions.


 


The following terms,
whether used in the singular or the plural, shall have the following meanings for purposes of this Agreement:


 


1.1           “Affiliate”
means any corporation, firm, partnership or other entity, which controls, is controlled by or is under common control with a Party.
For purposes of this Section 1.1, “control” means direct or indirect ownership of more than fifty percent (50%) of
the outstanding stock or other voting rights entitled to elect directors thereof or the ability to otherwise control the management
of the corporation, firm, partnership or other entity.


 


1.2           “Commercialization”
or “Commercialize” means all activities directed towards obtaining pricing
and Reimbursement Approvals, manufacturing, marketing, promoting, distributing, importing, offering for sale or selling a Product.



 


1.3           “Composition
and Process” means QMT’s confidential and proprietary composition and process for the bonding of certain Materials
to substrates usable on Products.


 



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1.4           “Confidential
Information” has the meaning set forth in Section 10.1 hereof. For purposes of clarification, the Technology shall be
deemed to be Confidential Information of QMT.


 


1.5           “Contract
Year” means the twelve (12) month period beginning on the Effective Date and ending on the first anniversary thereof,
and each consecutive 12-month period thereafter during the Term.


 


1.6           “DERMA
Invention” has the meaning set forth in Section 12.2(b) hereof.


 


1.7           “DERMA
Marks” has the meaning set forth in Section 12.6 hereof.


 


1.8           “Designee”
shall mean a corporation or other entity that is employed by, under contract to, or in partnership with DERMA or an Affiliate thereof,
to make, use, sell, promote, distribute, market, import, or export Products in the Territory, including any sublicensee.


 


1.9           “Disclosing
Party” has the meaning set forth in Section 10.1 hereof.


 


1.10         “Event”
has the meaning set forth in Section 3.1 hereof.


 


1.11         “FDA”
means the United States Food and Drug Administration or any successor agency thereto.


 


1.12         “Field”
means Traditional Wound Care Products sold to the institutional market, and products sold to the veterinary and dental institutional
market except for (i) mouth cotton and (ii) the Biosara 100% rayon products for sale to the sport medicine and institutional market.
For the avoidance of doubt, the Field excludes sales to the OTC/retail market.  


 


1.13         “First
Commercial Sale” shall mean the first sale for use or consumption by the general public in a particular country or region.


 


1.14         “Improvements”
means know-how, technical information, inventions, developments, discoveries, software, methods, techniques, procedures, formulae,
data (including without limitation clinical data), processes and other proprietary ideas, whether or not patentable or copyrightable,
that are conceived, discovered, developed, or reduced to practice during the Term by or on behalf of QMT, DERMA and/or their respective
Affiliates, and which are useful for or useable in the practice of the Patent Rights and Technology.


 


1.15         “Indemnitees”
has the meaning set forth in Section 9.1 hereof.


 


1.16         “Know-how”
means the tangible and intangible information, including, without limitation, data, results, formula, designs, specifications,
methods, processes, techniques, ideas, discoveries, technical information, process information, clinical information and other
information which is owned or controlled (with the right to sublicense) by QMT as of the Effective Date.


 



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1.17         “Materials”
means the chemical components, which are listed on Exhibit B hereto, as modified by any Improvements thereto to the
extent such modification is part of the Composition and Process as agreed by the parties hereto.


 


1.18         “Minimum
Sales Requirement” shall have the meaning set forth in Section 11.3 hereof.


 


1.19         “Net
Sales” means the gross amounts invoiced by DERMA or its Affiliates or Designees, if any, for sales of the Products to
any third party, less deductions with respect to: (a) normal trade, cash and quantity discounts, including charge backs; (b) credits,
allowances or adjustments, including amounts allowed for returned or defective Products; (c) insurance and transportation charges;
(d) custom duties, value added taxes (VAT), sales taxes or other governmental charges paid in connection with such sales (but excluding
any taxes on the income of QMT); and (e) rebates or reimbursements actually granted by DERMA, or its affiliates to managed health
care organizations, federal, state, or local governments (or their agencies), including Medicaid rebates; with each of the deductions
determined in accordance with US GAAP consistently applied.


 


1.20         “Non-Severable
Improvements” means Improvements that fall within the scope of a claim of any of the Patent Rights.


 


1.21         “Patent
Rights” mean the patents, patent applications, patent extensions, certificates of invention, or applications for certificates
of invention, together with any divisions, continuations or continuations-in-part thereof, which are owned or controlled by, or
licensed (with the right to sublicense) to QMT which are listed in Exhibit A hereto or which relate to any Improvements
developed after the date hereof.


 


1.22         “Products”
means all products in the Field that are covered by, derived from, or manufactured using or incorporating, or otherwise use or
contain the QMT Intellectual Property, including the existing Products currently being marketed and sold by DERMA and any additional
products in the Field developed after the date hereof.


 


1.23         “QMT
Intellectual Property” means collectively the Technology, Patent Rights and Improvements.


 


1.24         “QMT
Marks” has the meaning set forth in Section 12.6 hereof.


 


1.25         “Recipient”
has the meaning set forth in Section 10.1 hereof.


 


1.26         “Regulatory
Approval” means the approval of the applicable Regulatory Authority necessary for the marketing and sale of the Product
in the Field in a country in the Territory, excluding separate pricing and/or Reimbursement Approvals that may be required, and
including the expansion or modification of the label in the Field.


 


1.27         “Regulatory
Authority” means any federal, national, multinational, state, provincial or local regulatory agency, department, bureau
or other governmental entity with authority over the marketing and sale of a pharmaceutical product in a country, including the
FDA in the United States and Health Canada in Canada.


 



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1.28         “Reimbursement
Approval” shall mean such governmental and other approvals in the Territory for a buyer to claim reimbursement at any
level for the purchase of the Products from private or public health organizations, including all pricing approvals.


 


1.29         “Royalty”
has the meaning set forth in Section 3.2 hereof.


 


1.30         “Sell-Off
Period” has the meaning set forth in Section 11.7(a) hereof.


 


1.31         “Severable Improvements”
means Improvements that do not fall within the scope of a claim of any of the Patent Rights;


 


1.32         “Technology”
means the Materials and Know-how.


 


1.33         “Term”
has the meaning set forth in Section 11.1 hereof.


 


1.34         “Territory”
means the entire world with the exception of India.


 


1.35         “Third
Party” means any entity other than a Party to this Agreement or their respective Affiliates.


 


1.36         “Traditional
Wound Care Products” means all wound care products based on traditional materials. Traditional materials shall include
without limitation cotton, polyester, viscose, acetate, other cellulosic and non-cellulosic fibers, and rayon blends (but not 100%
rayon). For the absence of doubt, films, alginates, hydrocolloids, foams, and hydrogels are not Traditional Wound Care Products.


 


2.           License.


 


2.1           Grant.
Subject to the terms and conditions of this Agreement, QMT hereby grants to DERMA and its Affiliates during the Term an exclusive,
royalty-bearing right and license, with the right to grant sublicenses, under the QMT Intellectual Property to make, use, sell,
and offer for sale Products within the Field in the Territory.


 


2.2           Transfer
of Know-how. QMT has disclosed the Know-how to DERMA in connection with the Prior Agreement and shall disclose any further
Know-how developed during the Term hereof to DERMA solely for purposes of DERMA’s research, development and manufacture of
Products during the Term. DERMA agrees that such Know-how is QMT’s Confidential Information and shall treat such Confidential
Information in accordance with Section 10 hereof.


 


2.3           Governmental
Rights; University of Florida. All rights and licenses granted by QMT under this Agreement are subject to (i) any limitations
imposed by the terms of any government grant, government contract or government cooperative agreement applicable to the QMT Intellectual
Property that is the subject of this Agreement, and/or (ii) applicable requirements of 35 U.S.C. Sections 200 et seq.,
as amended, and implementing regulations and policies. It is understood that as of the Effective Date, the United States Government
(through any of its agencies or otherwise) has not funded research of any of the inventions embodied in the Patent Rights, but
it may do so in the future. It is further understood that nothing in 35 U.S.C. Section 204 would prevent Derma Sciences from manufacturing
licensed Products in China. Furthermore, certain of the rights granted hereunder are subject to a reservation of rights by the
University of Florida and its affiliates to use the Patent Rights for its research and educational purposes and the licenses granted
hereunder are expressly made subject to such rights.


 



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2.4           No
Other Rights. Except for the express license granted pursuant to Section 2.1 hereof, no license, express or implied, is granted
by either Party to the other Party or its Affiliates under any intellectual property rights owned or controlled by such Party or
its Affiliates.


 


3.          Consideration;
Royalties.


 


3.1           Upfront
Payment. Upon signing, DERMA will pay QMT a one-time licensing payment of $500,000. Within ten (10) days of the Effective Date,
DERMA shall make to QMT a second one-time licensing payment of $800,000.


 


3.2           Royalties.
In consideration of the license granted to DERMA pursuant to Section 2.1 hereof, commencing with the Effective Date, DERMA shall
pay to QMT a royalty (“Royalty”) as set forth in the following table on Net Sales for Products sold in the Territory.
In the event DERMA is required to pay royalties to any Third Party in order to make, use or sell Products, DERMA’s Royalty
obligation to QMT under this Section 3.2 shall not be affected.


 


	Net Sales (Year Basis)	 	Applicable Royalty Percentage	 
	 	 	 	 
	For Net Sales up to ***	 	 	8.5	%
	 	 	 	 	 
	For Net Sales between *** and ***	 	 	***	 
	 	 	 	 	 
	For Net Sales above ***	 	 	***	 



 


3.3           Non-Monetary
Consideration. Without the prior written consent of QMT, DERMA and its Designees and Affiliates shall not solicit any material
consideration for the commercial sale of any Product other than as will be accurately reflected in Net Sales. In the event DERMA
and/or its Designees or Affiliates receive any consideration for the sale or transfer of any Product other than as will be accurately
reflected in Net Sales, QMT and the party accepting such non-cash consideration shall act reasonably and negotiate in good faith
an appropriate value for all such non-cash consideration.


 



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3.4           Milestone
Payments. In addition to the Upfront Payment and the Royalties as set forth in 3.1 and 3.2 above, DERMA shall make the following
milestone payments to QMT:


 


	Milestone	 	Consideration
	 	 	 
	30 days following the first occurrence of four consecutive calendar quarters in which combined quarterly Net Sales has equalled or exceeded *** (the “First Milestone”). 	 	***.  For the avoidance of doubt, this consideration is payable only once. 
	 	 	 
	30 days following the first occurrence of four consecutive calendar quarters (not including any calendar quarter counted towards the achievement of the First Milestone)in which combined quarterly Net Sales has equalled or exceeded ***. 	 	***.  For the avoidance of doubt, this consideration is payable only once. 
	 	 	 
	30 days following the first occurrence of four consecutive calendar quarters in which combined quarterly Net Sales has equalled or exceeded *** (“the Second Milestone”).	 	***.  For the avoidance of doubt, this consideration is payable only once. 
	 	 	 
	30 days following the first four consecutive calendar quarters (not including any calendar quarter counted toward the achievement of the Second Milestone) in which combined quarterly Net Sales has equalled or exceeded *** (the “Third Milestone”).	 	***.  For the avoidance of doubt, this consideration is payable only once.
	 	 	 
	30 days following the first occurrence of four consecutive calendar quarters (not including any calendar quarter counted toward the achievement of the Third Milestone) in which combined quarterly Net Sales has equalled or exceeded ***.	 	***. For the avoidance of doubt, this consideration is payable only once.


 


4.     
     Payments, Reports and Records.


 


4.1           First
Commercial Sale. Within thirty (30) days of its occurrence, DERMA shall notify QMT of the date of First Commercial Sale of
a Product by DERMA or its Designees or Affiliates to a Third Party end user in each country in the Territory in which Products
have not previously been sold.


 



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4.2           Payments.
During the Term, DERMA shall furnish to QMT, within forty-five (45) days from the last business day of each quarter during each
Contract Year, a written report showing the following: (i) number of Products sold; (ii) the Net Sales of all Products sold by
DERMA, its Designees and Affiliates during the reporting period listed by country, and qualifying deductions, as defined in Section
1.23 hereof, listed by category of deduction; (iii) the Royalties payable in United States dollars which shall have accrued hereunder
in respect of such sales; (iv) withholding taxes, if any, required by law to be deducted in respect of such sales, as applicable;
and (v) the exchange rates used in determining the amount of United States dollars, if applicable. All Royalty payments shall be
due and payable on the date such report is due. If no payments are due for any reporting period hereunder, DERMA shall so report.
All reports delivered pursuant to this Section shall constitute the Confidential Information of DERMA and shall be subject to Section
10 hereof. All payments to QMT under this Agreement shall be made in United States dollars by check payable to “Quick-Med
Technologies, Inc.” or, if requested by QMT, by wire transfer to an account designated by QMT.


 


4.3           Withholding
Taxes. In the event that DERMA is required by applicable law to make deductions or withholdings from royalty payments to QMT
hereunder, then DERMA shall be entitled to deduct or withhold any such amounts and the amount of such deduction or withholding
shall be credited against the royalties otherwise payable to QMT.


 


4.4           Exchange
Rates. If DERMA receives revenues from the sale of Products in currency other than United States dollars, revenues shall be
converted to United States dollars using a conversion rate for foreign currency calculated by averaging the conversion rates of
such foreign currency on the last business day of each month within the applicable quarter as published in the eastern edition
of The Wall Street Journal. Royalty Reports shall show sales both in the local currency and US dollars, with the exchange
rate used clearly stated.


 


4.5           DERMA’s
Recordkeeping and Inspection. DERMA shall, and shall cause its Affiliates and Designees to, keep for at least six (6) years
records of all sales of Products in sufficient detail to permit QMT to confirm the accuracy of DERMA’s Royalty payment calculations.
At the request of QMT, no more frequently than once per year, upon at least five (5) business days prior written notice to DERMA
and at the expense of QMT (except as otherwise provided below), DERMA shall permit an independent certified public accountant,
selected by QMT, to inspect, during regular business hours, any such DERMA, Affiliate or Designee records for the then preceding
six (6) years solely to the extent necessary to verify such calculations; provided that such accountant has, in advance,
entered into a confidentiality agreement with DERMA (substantially similar to the confidentiality provisions of this Agreement)
limiting the disclosure of such information to authorized representatives of the Parties. Results of any such inspection shall
be made available to both Parties. If such inspection reveals a deficiency in the calculation of Royalties resulting in an underpayment
to QMT, DERMA shall promptly pay to QMT such deficient amount and if such underpayment is equal to five percent (5%) or more, DERMA
shall pay all costs and expenses of such inspection. If such inspection reveals a deficiency in the calculation of Royalties resulting
in an overpayment to QMT, DERMA may credit such overpayment against future Royalty payments due QMT hereunder. If, during any Contract
Year during the Term, an inspection reveals a deficiency in the calculation of Royalties resulting in an underpayment to QMT by
twenty percent (20%) or more, then DERMA shall, at its sole cost and expense, thereafter supply QMT with annual audits by a mutually
agreeable independent auditing firm for each remaining Contract Year during the Term.


 



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5.    
      Development of Products. 


 


5.1   
      Obligations. 


 


(a)          With
respect to any new Products that DERMA desires to develop during the Term hereof, DERMA shall notify QMT and the parties shall
meet and discuss a product development plan and budget. The sharing of the costs of any Product development shall be negotiated
between DERMA and QMT.


 


(b)          With
respect to any new Products, DERMA will have full responsibility for seeking and obtaining Regulatory Approval and Reimbursement
Approval for the Commercialization of such new Products in the Field in the Territory. DERMA shall provide to QMT periodic written
development status reports describing, in reasonable detail, the efforts undertaken for, and the status of development of, the
new Products by DERMA. Such status reports shall also summarize the clinical trials, Regulatory Filings, applications and Regulatory
Approvals with respect to any new Products that DERMA has made, sought or obtained. If DERMA elects to stop or abandon, either
permanently or temporarily, the development, Regulatory Approval or Commercialization of such New Products, DERMA shall promptly
notify QMT of such decision.


 


(c)          DERMA
agrees that it shall Commercialize and achieve the First Commercial Sale of Product in countries in the following regions by the
following dates:


 


		i.	Europe – *** from the Effective Date;



 


		ii.	Asia, the Middle East and Central and South America –
*** from the Effective Date.



 


(d)          If
Derma does not Commercialize and achieve the First Commercial Sale of Product in any country within a region by the date set forth
for that region above, then QMT may, at its option and as its sole remedy, by notice to DERMA in writing either;


 


		i.	convert the rights granted to DERMA in Section 2.1 to
non-exclusive rights in that country or



 


		ii.	terminate the rights granted to DERMA in Section 2.1
in that country, in which case the term “Territory” as used herein shall be deemed to not include such country.



 


(e)          If
DERMA desires to develop a non-Traditional Wound Care Product utilizing the QMT Technology and Patent Rights, it shall notify QMT.
The expansion of the Field to permit any such product to be included as a Product as defined this Agreement shall be subject to
the further agreement of QMT, which QMT agrees to discuss with DERMA and consider in good faith.


 



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5.2           Advertising
and Promotional Materials. DERMA shall develop relevant written sales, promotion and advertising materials relating to the
Products (“Promotional Materials”) consistent with its standard operating procedures, for use in the Territory
and compliant with all applicable laws and the provisions of the applicable Regulatory Approvals. DERMA will supply copies of same
at QMT’s request. Subject to any limitations imposed by applicable law, all such Promotional Materials and all documentary
information and oral presentations (where practicable) regarding the marketing and promotion of the Products in the Territory shall
acknowledge the Parties’ license arrangement and shall display the QMT names and logos in accordance with Exhibit C.


 


5.3           Product
Label. The Parties agree that DERMA and its Affiliates and Designees, if any, shall include QMT’s name and/or logo, relevant
QMT Marks and patent numbers on all Product packaging, promotional materials and other materials (in written or electronic form)
related to the Product in the Territory in accordance with in Exhibit C.


 


6.        
  Supply.


 


6.1           Suppliers.
It is essential to the use of the QMT Intellectual Property as well as to maintaining the underlying QMT Marks associated therewith
owned by QMT that the quality of the Materials meet the quality standards of QMT and that the suppliers of the necessary Materials
agree to maintain the secrecy of the Materials, including without limitation the Composition and Process, including to the extent
that such suppliers can reverse engineer or determine all or any part of the Materials through the supply of such Materials. Therefore,
subject to the terms and conditions hereof, DERMA shall only purchase Materials from a Supplier approved by QMT. DERMA shall provide
the name of a supplier to QMT, and QMT may disapprove of such Supplier, provided that QMT shall not act unreasonably in such disapproval.
Any manufacturer of the Product using the QMT Intellectual Property shall sign a confidentiality and non-competition agreement
in a form acceptable to QMT before commencing manufacturing.


 


6.2           No
Implied License. Notwithstanding the foregoing, no express or implied license to any QMT Intellectual Property is granted to
any such Third Party in connection with the manufacture, transfer or sale of the Materials; provided however that DERMA’s
use of the Materials shall be covered by the licenses under QMT Intellectual Property granted above so long as DERMA has complied
with the terms of this Agreement.


 


6.3           Inspection.
QMT shall upon its request be entitled to review any and all purchase orders and shipping documents to confirm the use of the Materials
in accordance with the QMT Intellectual Property. DERMA shall be solely responsible for all matters and all obligations between
DERMA and the supplier.


 



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7.     
     Research and Development Data and Regulatory Filings.


 


7.1           Product
Data. DERMA shall be responsible for the development of all data and other information relating to the Products and Product
sales, including without limitation all stability and safety data (collectively the “Product Data”) necessary
to support sales of Products in the Field in the Territory.


 


7.2           Copies
of Product Data. Upon the reasonable written request of QMT, DERMA will provide to QMT copies of all Product Data that DERMA
would reasonably provide publicly to the market or to customers or potential customers during DERMA’s marketing of Products.
For purposes of this Section 7.2, any Confidential Information of DERMA or a Third Party may be redacted from such Product Data
prior to delivery to QMT.


 


7.3           Regulatory
Approvals. Unless otherwise agreed by the Parties, any and all Regulatory Approvals obtained and regulatory filings made and
licenses, registrations, certificates and government approvals (“Regulatory Filings”) obtained by DERMA during
the Term related to the Products in the Field in the Territory, will be in the name of and owned by DERMA.


 


7.4           Access
to Regulatory Filings. QMT, its Affiliates, and its respective sublicensees shall have access in a timely manner to all data
contained or referenced in such submissions or applications for Regulatory Approvals by DERMA, including all reports, correspondence
and conversation logs, in each case as may be reasonably necessary to enable QMT to develop, manufacture and Commercialize products
outside the Field in the Territory or Products in the Field and outside the Territory. DERMA shall provide appropriate notification
of such right of QMT to the Regulatory Authorities. QMT, its Affiliates, and their respective sublicensees shall have the right
to cross-reference and make any other use of the other DERMA’s Regulatory Filings for the Product, including access to all
data contained or referenced in such Regulatory Filings.


 


7.5           Adverse
Events. DERMA shall comply with all applicable laws with respect to reporting any adverse medical event with respect to any
Product and shall notify QMT of any such event within 24 hours of its occurrence along with the results of any follow up investigation.


 


8.     
     Representations and Warranties; Disclaimer; Limitation of Liability.


 


8.1           Representations
and Warranties of DERMA. DERMA covenants, represents and warrants to QMT as follows:


 


(a)          DERMA
is a corporation duly organized, validly existing and in good standing under the laws of Pennsylvania. DERMA has all requisite
corporate power to own and operate its properties and assets and to carry on its business as presently being conducted and as proposed
to be conducted. DERMA has, and will have on all relevant dates, all requisite legal and corporate power to execute and deliver
this Agreement, and to carry out and perform its obligations under the terms of this Agreement;


 


(b)          the
execution and delivery of this Agreement and the performance of the transactions contemplated hereby have been duly authorized
by all appropriate DERMA corporate action. The performance by DERMA of any of the terms and conditions of this Agreement on its
part to be performed does not and will not constitute a breach or violation of any other agreement or understanding, written or
oral, to which it is a party; and


 



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(c)          Neither
DERMA nor its Affiliates is prohibited by any law, rule or regulation or by any order, directive or policy of any Regulatory Authority
from manufacturing or selling any of the Products.


 


8.2          Representations
and Warranties of QMT. QMT represents and warrants to DERMA as follows:


 


(a)          QMT
is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. QMT has all requisite
corporate power to own and operate its properties and assets and to carry on its business as presently being conducted and as proposed
to be conducted. QMT has, and will have on all relevant dates, all requisite legal and corporate power to execute and deliver this
Agreement, and to carry out and perform its obligations under the terms of this Agreement; and


 


(b)          the
execution and delivery of this Agreement and the performance of the transactions contemplated hereby have been duly authorized
by all appropriate QMT corporate action. The performance by QMT of any of the terms and conditions of this Agreement on its part
to be performed does not and will not constitute a breach or violation of any other agreement or understanding, written or oral,
to which it is a party.


 


8.3           Disclaimer
of Warranty. Except as otherwise expressly provided in this agreement, QMT makes no representations and extends no warranty
of any kind, either express or implied, with respect to the QMT Intellectual Property, including without limitation warranties
of the validity or enforceability of the patent rights, merchantability, fitness for a particular purpose and non-infringement
of any Third Party patents or proprietary rights. All Uniform Commercial Code warranties are expressly disclaimed by QMT. 


 


8.4           Limitation
of Liability. Except with respect to liability arising from breach of Section 10 and liability arising under Section 9 herein,
it is agreed by the Parties that neither Party shall be liable to the other Party for any special, consequential, indirect, exemplary
or incidental damages (including lost or anticipated revenues or profits relating to the same), arising from any claim relating
to this Agreement, whether such claim is based on contract, tort (including negligence) or otherwise, even if an authorized representative
of such Party is advised of the possibility or likelihood of same.


 


8.5           Modification
to QMT Intellectual Property. DERMA shall not modify, change or vary from the QMT Intellectual Property as it is applied to
the Products. If DERMA seeks to change or modify the QMT Intellectual Property used in any Product, it shall notify QMT sixty (60)
days prior to making such change whereupon, so long as DERMA is in compliance with this Agreement, the parties shall reasonably
cooperate to adjust the formulation of the QMT Intellectual Property as necessary to meet the Product requirements of DERMA. Any
such reformulation shall constitute an Improvement and shall be owned exclusively by QMT and shall be licensed to DERMA under the
terms of this Agreement.


 



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9.        
  Indemnification and Insurance.


 


9.1           Indemnification
by DERMA. DERMA shall indemnify, defend and hold harmless QMT and its Affiliates and their respective directors, officers,
employees and agents, and their respective successors, heirs and assigns (the “Indemnitees”) against any liability,
damage, loss or expense (including reasonable attorneys’ fees and expenses of litigation) incurred by or imposed upon the
Indemnitees in connection with any claim, demand, suit, action or judgment arising out of any theory of product liability (including
without limitation actions in the form of tort, warranty or strict liability) or based on, or caused by (i) any act or omission
of DERMA, its Affiliates or Designees with respect to the development, manufacture, use sale, offer for sale, importation or exportation
of any Product except to the extent that such liability, damage, loss or expense is directly attributable to the negligence or
misconduct of QMT or its Affiliates or (ii) the breach of this Agreement by DERMA.


 


9.2           Notice
and Cooperation. Any Indemnitee seeking indemnification under Section 9.1 shall provide DERMA with prompt written notice of
any claim, demand, suit, action or judgment for which indemnification is sought under this Agreement. An Indemnitee’s failure
to deliver written notice to DERMA within a reasonable time after the commencement of any such action, to the extent prejudicial
to the DERMA’s ability to defend such action, shall relieve DERMA of liability to the Indemnitee under this Section 9. DERMA
agrees, at its own expense, to provide attorneys reasonably acceptable to the Indemnitees to defend against any such claim. The
Indemnitees shall cooperate fully with DERMA in such defense and will permit DERMA to conduct and control such defense and the
disposition of such claim, suit, or action (including all decisions relative to litigation, appeal and settlement); provided,
however, that any Indemnitee shall have the right to retain its own counsel at the expense of DERMA, if representation of such
Indemnitee by the counsel retained by DERMA would be inappropriate because of actual or potential conflicts in the interests of
such Indemnitee and any other party represented by the counsel retained by the DERMA. DERMA agrees to keep the Indemnitees informed
of the progress in the defense and disposition of such claim and to consult with the Indemnitees with regard to any proposed settlement.
The indemnification under this Section 9 shall not apply to amounts paid in settlement of any liability, claim, lawsuit, loss,
demand, damage, cost or expense if such settlement is effected without the consent of DERMA.


 


9.3           Indemnification
by QMT. QMT shall indemnify, defend and hold harmless DERMA and its Affiliates and their respective directors, officers, employees
and agents, and their respective successors, heirs and assigns (the “Indemnitees”) against any liability, damage,
loss or expense (including reasonable attorneys’ fees and expenses of litigation) incurred by or imposed upon the Indemnitees
in connection with any claim, demand, suit, action or judgment arising out any breach of this Agreement by QMT.


 



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9.4           Notice
and Cooperation. Any Indemnitee seeking indemnification under Section 9.3 shall provide QMT with prompt written notice of any
claim, demand, suit, action or judgment for which indemnification is sought under this Agreement. An Indemnitee’s
failure to deliver written notice to QMT within a reasonable time after the commencement of any such action, to the extent prejudicial
to QMT’s ability to defend such action, shall relieve QMT of liability to the Indemnitee under this Section 9. QMT agrees,
at its own expense, to provide attorneys reasonably acceptable to the Indemnitees to defend against any such claim. The Indemnitees
shall cooperate fully with QMT in such defense and will permit QMT to conduct and control such defense and the disposition of such
claim, suit, or action (including all decisions relative to litigation, appeal and settlement); provided, however, that
any Indemnitee shall have the right to retain its own counsel at the expense of QMT, if representation of such Indemnitee by the
counsel retained by QMT would be inappropriate because of actual or potential conflicts in the interests of such Indemnitee and
any other party represented by the counsel retained by the QMT. QMT agrees to keep the Indemnitees informed of the progress in
the defense and disposition of such claim and to consult with the Indemnitees with regard to any proposed settlement. The
indemnification under this Section 9 shall not apply to amounts paid in settlement of any liability, claim, lawsuit, loss, demand,
damage, cost or expense if such settlement is effected without the consent of QMT.


 


9.5           Insurance.
DERMA shall obtain and carry in full force and effect product liability insurance in amounts that are reasonable and customary
in the pharmaceutical industry for similar products, but in no event shall such insurance be less than *** per occurrence and ***
in the aggregate with a minimum of *** in umbrella coverage. Within thirty days of the start of each Contract Year, DERMA shall
provide QMT with a certificate evidencing the insurance coverage required herein and all subsequent renewals thereof. The insurance
coverage required herein does not constitute a limitation on DERMA’s obligation to indemnify QMT under this Agreement.


 


10.         Confidentiality.


 


10.1         Confidential
Information. As used in this Agreement, the term “Confidential Information” shall mean all scientific, technical,
trade or business information of either Party (the “Disclosing Party”) disclosed to the other Party (the “Recipient”),
whether or not in writing, and regardless of whether it is marked as confidential, including any portion of analyses, compilations,
forecasts, studies or other documents prepared by Recipient which contains such information. By way of illustration, but not limitation,
Confidential Information may include inventions, Know-how, processes, methods, techniques, assays, formulas, compositions, compounds,
projects, developments, plans, research data, clinical data, financial data, personnel data, computer programs, customer and supplier
lists and contacts at or knowledge of customers or prospective customers of the Disclosing Party.


 


10.2         Disclosure
of Confidential Information. Except as expressly permitted in this Section 10, during the Term of this Agreement and for a
period of five (5) years thereafter, the Recipient shall hold in confidence and shall not directly or indirectly disclose, communicate
or in any way divulge to any person any Confidential Information, without the prior written consent of the Disclosing Party. The
Recipient shall use such Confidential Information solely for the purposes of this Agreement. The Recipient shall not provide or
grant access to the Confidential Information to any Third Party, except the Recipient may disclose Confidential Information
received by it under this Agreement only to those of its directors, officers, employees, agents and consultants, and the directors,
officers, employees, agents and consultants of its Affiliates and Designees who have a need to know such Confidential Information
in the course of the performance of their duties and who are bound by a written agreement to protect the confidentiality of such
Confidential Information.


 



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10.3         Limitation
on Obligations. The obligations of the Recipient specified in Section 10.2 above shall not apply to any Confidential Information
to the extent the Recipient can demonstrate, by clear and convincing evidence, that such Confidential Information:


 


(a)          was
in the public domain prior to the time of its disclosure under this Agreement;


 


(b)          entered
the public domain after the time of its disclosure under this Agreement through means other than an unauthorized disclosure resulting
from an act or omission by the Recipient;


 


(c)          is
or was disclosed to the Recipient at any time, whether prior to or after the time of its disclosure under this Agreement, on a
non-confidential basis by a Third Party, provided that such Third Party is not, to the Recipient’s knowledge, bound by an
obligation of confidentiality to the Disclosing Party with respect to such Confidential Party;


 


(d)          is
independently developed by the Recipient without reference to the Confidential Information of the Disclosing Party; or


 


(e)          is
required to be disclosed by the Recipient to comply with applicable laws or to comply with governmental regulations; provided,
that the Recipient provides prior written notice of such disclosure to the Disclosing Party and takes reasonable and lawful actions
to avoid and/or minimize the degree of such disclosure.


 


10.4         Equitable
Relief. The Recipient agrees that any breach of this Section 10 may cause the Disclosing Party substantial and irreparable
damages and, therefore, in the event of any such breach, in addition to other remedies that may be available, the Disclosing Party
shall have the right to seek specific performance and other injunctive and equitable relief.


 


10.5         Ownership
of Confidential Information. The Recipient agrees that the Disclosing Party (or any Third Party entrusting its own confidential
information to the Disclosing Party) is and shall remain the exclusive owner of the Confidential Information disclosed to the Recipient
and all patent, copyright, trademark, trade secret, and other intellectual property rights in such Confidential Information or
arising therefrom. Except as expressly set forth in this Agreement, no option, license, or conveyance of such rights to the Recipient
is granted or implied under this Agreement.


 


11.   
     Term and Termination.


 


11.1         Term.
Unless terminated sooner as provided in this Section 11, this Agreement shall extend from the Effective Date until, with respect
to each country in the Territory, the expiration of the last to expire of the Patent Rights in that country (the “Term”).


 



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11.2         Material
Breach by DERMA. Except as set forth in Section 11.3 below, the failure by DERMA to comply with any of its material obligations
contained in this Agreement, shall entitle the QMT to give to DERMA written notice specifying the nature of the default and requiring
it to cure such default. If such default is not cured within thirty (30) days after the receipt of such notice, then QMT shall
be entitled, without prejudice to any of its other rights conferred on it by this Agreement and in addition to any other remedies
available to it by law or in equity, to terminate this Agreement effective upon written notice to DERMA. QMT shall have the right
to terminate this Agreement immediately if DERMA transfers or assigns its rights in a manner contrary to the terms of this Agreement
or in derogation of the QMT Intellectual Property. The right of QMT to terminate this Agreement, as hereinabove provided, shall
not be affected in any way by its waiver or failure to take action with respect to any previous default.


 


11.3         DERMA’s
Failure to Meet Minimum Sales Requirement. If DERMA fails to achieve at least *** in Net Sales of Products in any calendar
year (the “Minimum Sales Requirement”), then QMT shall have the right upon sixty (60) days’ notice to DERMA to
terminate this Agreement or convert the license in the Territory to a non-exclusive license, provided, however, QMT shall not have
such right (i) if DERMA, before the end of the 60 day notice period, at its sole option, pays to QMT the difference between the
actual Royalties due based on Net Sales and the Royalties that would have been payable had the Minimum Sales Requirement been met
(ii) Net Sales for such calendar year have been materially adversely affected by a change in the coding, allowance, or reimbursement
rate for any one or more of the Products (iii) sales of the Products have been materially adversely affected by a Force Majeure
as defined in Section 13.9 (iv) sales of the Products have been materially adversely affected by sales of infringing products in
the United States. Anything herein contained to the contrary notwithstanding, the remedies set forth in the immediately preceding
sentence shall be the sole remedies available to QMT by reason of the failure of DERMA to meet the Minimum Sales Requirement. The
right of QMT to terminate this Agreement or convert the license in the Territory to non-exclusive, as hereinabove provided, shall
not be affected in any way by its waiver or failure to take action with respect to any previous default. For the purposes of this
Section 11.3, “Net Sales of Products” shall include only royalty-bearing sales.


 


11.4         Material
Breach by QMT. The failure by QMT to comply with any of its material obligations contained in this Agreement shall entitle
DERMA to give to QMT written notice specifying the nature of the default and requiring it to cure such default. If such default
is not cured within thirty (30) days after the receipt of such notice, DERMA shall be entitled, without prejudice to any of its
other rights conferred on it by this Agreement and in addition to any other remedies available to it by law or in equity, to terminate
this Agreement effective upon written notice to QMT. The right of DERMA to terminate this Agreement, as hereinabove provided, shall
not be affected in any way by its waiver or failure to take action with respect to any previous default.


 



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11.5         Bankruptcy.
Either Party may terminate this Agreement immediately by providing written notice if the other Party: (a) applies for or consents
to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its assets, (b)
becomes unable, or admits in writing its inability, to pay its debts generally as they mature, (c) makes a general assignment for
the benefit of its creditors, (d) is dissolved or liquidated in full or in substantial part, (e) commences a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or consents to such relief or to the appointment of or taking possession
of its property by any official in such an involuntary case or such other proceeding commenced against it, (f) takes any action
for the purpose of effecting any of the foregoing, and (g) becomes the subject of an involuntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect that is not dismissed within ninety (90) days of commencement. Notwithstanding the above, the parties
acknowledge that this is a license of “intellectual property” within the meaning of Section 365(n) of the United States
Bankruptcy Code and that DERMA is fully entitled to the protection afforded to a licensee thereunder.


 


11.6         Termination
By Derma. DERMA shall have the right to terminate this Agreement for any reason by giving sixty days’ written notice
of termination to QMT.


 


11.7         Effect
of Termination.


 


(a)          In
the event of termination of this Agreement pursuant to Sections 11.2, 11.3, or 11.6, then (a) all licenses and rights granted to
DERMA hereunder (except as set forth in Section 11.7(d) below) shall terminate and DERMA shall immediately cease to develop, manufacture,
use and sell Products, and (b) DERMA shall be obligated to pay QMT any accrued actual Royalty payments. Notwithstanding the foregoing,
in the event this Agreement is terminated pursuant to Section 11.2, 11.3, 11.5 or 11.6, DERMA shall be permitted to sell-off any
and all inventory of Products existing at the date termination, provided that such sales occur within nine (9) months after such
termination, and provided further that DERMA remains obligated to pay actual Royalties and report to QMT on the sale of any such
Products (the “Sell-Off Period”). Any remaining inventory of Products after such Sell-Off Period shall be destroyed
by DERMA at its sole expense.


 


(b)          Without
limiting any other legal or equitable remedies that QMT may have, if QMT terminates this Agreement in accordance with Section 11.2
or 11.3, or DERMA terminates this Agreement in accordance with Section 11.6, then, at the request of QMT, DERMA shall, as soon
as reasonably possible and to the extent that it has the right to do so or is permitted by applicable law or the applicable Regulatory
Authority, transfer to QMT or QMT’s designee possession and ownership of (i) all governmental or regulatory correspondence,
conversation logs, filings and approvals (including all Regulatory Approvals) relating exclusively to DERMA’s development
or Commercialization of the Product in the Field in the Territory, and (ii) copies of all data, reports, records and materials
in DERMA’s possession or control relating exclusively to DERMA’s development or Commercialization of Products in the
Field in the Territory, including all non-clinical and clinical data relating to the Product in the Field in the Territory, (iii),
all agreements pertaining to CRO, clinical trials and supply of material required to continue development of the Product. DERMA
shall execute all documents and take all such further actions as may be reasonably requested by QMT in order to give effect to
the foregoing subsections (i), (ii) and (iii) herein.


 



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(c)          Any
expiration or termination of this Agreement shall not relieve DERMA from any obligation that accrued prior to such expiration or
termination. Any obligation under any provision of this Agreement which is intended to survive expiration or termination of this
Agreement, including without limitation, Sections 1, 7.4, 8, 9, 10, 11.8, 12, and 14 shall survive.


 


(d)          Upon
expiration or termination of this Agreement, QMT shall grant and hereby grants to DERMA a non-exclusive, royalty-free, fully paid
up, worldwide right and license to use any DERMA Inventions relating solely to improvements to DERMA’s products to the extent
that such improvements relate solely to the manufacture and use of DERMA’s products, and which are not covered by, derived
from, manufactured using or incorporating, or otherwise using or containing the QMT Intellectual Property.


 


11.8         Challenge
to Patent Rights. QMT may terminate this Agreement with immediate effect by giving written notice to DERMA if DERMA directly
or indirectly challenges the validity, enforceability, or ownership of any of the Patent Rights whether or not by legal proceeding,
or assists any other person in such a challenge.


 


11.9         Invalidity
of Patent Rights. Upon determination by a court or agency of competent jurisdiction that all of the material claims that read
on the Products in the following Patents are invalid: U.S. Patent Nos. 7,045,673, 7,709,694, and 8,092,854, then at the option
of DERMA this Agreement shall terminate and all obligations of the parties (including without limitation and obligation of DERMA
to pay Royalties) shall cease except to the extent they are intended to survive the termination of this Agreement.


 


12.  
      Intellectual Property Rights.


 


12.1         Ownership
of Intellectual Property. Except as set forth in Section 12.2(c) below, QMT shall own all right, title and interest in the
copyright, patent, trademark, trade secret or other intellectual property rights in the Patent Rights and Know-how, including without
limitation any derivatives, variations, and/or Improvements thereto.


 


12.2         Ownership
of Inventions. Inventorship shall be determined in accordance with United States patent law at the time the inventor made the
invention. Each Party shall ensure that its employees, consultants, agents, and representatives are contractually required to assign
to such Party all rights, title, and interest to any inventions, to maintain all Confidential Information, and to promptly disclose
to such Party all such inventions.


 


(a)          QMT
Inventions. QMT will have and retains sole and exclusive title to all inventions, developments, Improvements, discoveries and
Know-how relating to the QMT Intellectual Property which are made, conceived or reduced to practice solely by QMT, its Affiliates,
employees, consultants, agents or other Persons acting under its authority in the course of or as a result of this Agreement or
in the course of any activities inside and outside the Field and Territory.


 



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(b)          DERMA
Non-Severable Improvements. In the event any invention, development, Improvement, discovery, or Know-how that necessarily uses
or incorporates the QMT Intellectual Property is made, conceived or reduced to practice by DERMA, its Affiliates, employees, consultants,
agents or other persons acting under its authority in the course of, in connection with or as a result of this Agreement, either
solely or jointly with QMT, an Affiliate or a Third Party (each a “DERMA Non-Severable Improvement”), such DERMA
Non-Severable Improvement shall be promptly disclosed by DERMA to QMT in writing. All DERMA Non-Severable Improvements shall be
owned by QMT and any Patent Rights under any DERMA Non-Severable Improvements shall be owned by QMT. DERMA hereby assigns and agrees
to assign all right, title, and interest to such DERMA Non-Severable Improvements to QMT, shall execute any documents reasonably
necessary to fulfill the purposes of this Section 12.2(b), and hereby appoints QMT as its attorney to execute and deliver any such
documents on its behalf in the event the DERMA should fail or refuse to do so within a reasonable period following QMT’s
request. Any such DERMA Non-Severable Improvement shall be subject to the
license granted to DERMA under this Agreement.


 


(c)          DERMA
Severable Improvements. For any Severable Improvements made, conceived or reduced to practice by DERMA, its Affiliates, employees,
consultants, agents or other persons acting under its authority in the course of, in connection with or as a result of this Agreement
(each a “DERMA Severable Improvement”), DERMA shall own all right, title and interest in the DERMA Severable
Improvements. DERMA hereby grants QMT a first option to negotiate an exclusive, royalty-bearing license to DERMA’s rights
in any DERMA Severable Improvement, which option must be exercised within ninety (90) days of QMT’s receipt of DERMA’s
disclosure of such DERMA Severable Improvement.


 


12.3         Prosecution
of Patent Rights. QMT, by counsel it selects, shall have the right, but not the obligation, to prepare, file, prosecute and
maintain the Patent Rights in QMT’s name and in countries designated by QMT at the sole discretion of QMT. QMT shall bear
all the costs and expenses associated with the filing, prosecution and maintenance of such Patent Rights.


 


12.4         Third
Party Infringement. Each Party shall promptly notify the other Party in writing of any alleged infringement of the Patent Rights
and of any available evidence thereof.


 


(a)          QMT
shall have the first right, but not the obligation, under its own control and at its own expense, to prosecute any Third Party
infringement of the Patent Rights and/or to defend the Patent Rights in any declaratory judgment action brought by a Third Party
which alleges invalidity, unenforceability or non-infringement of the Patent Rights. QMT may enter into any settlement, consent
judgment or other voluntary final disposition of any infringement or declaratory judgment action hereunder without the prior written
consent of DERMA. Any recovery or damages derived from any such action shall be retained by QMT.


 


(b)          In
the event QMT institutes a court proceeding relating to the infringement of the Patent Rights under Section 12.4(a), DERMA shall
have the right to intervene in such proceeding and QMT shall not oppose such intervention, provided that (i) DERMA notifies the
court and QMT of its intention to intervene within 180 days of the commencement of such proceeding, and (ii) DERMA shares equally
with QMT the total costs incurred by QMT (including without limitation attorney and expert fees) of conducting such proceeding.
QMT shall retain control of the conduct and settlement of any such proceeding; provided, however, that no settlement, consent judgment
or other voluntary final disposition of such action may be entered into without the prior written consent of DERMA, which consent
shall not be unreasonably withheld or delayed. Any recovery of damages for any such proceeding (or settlement thereof) shall be
applied first in satisfaction of any out-of-pocket expenses incurred by the Parties relating to the proceeding (including without
limitation attorney and expert fees) and the balance shall be equally divided between the Parties.


 



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(c)          In
the event that QMT declines to commence legal action to defend against a declaratory action alleging invalidity of the Patent Rights
or to prosecute infringements of the Patent Rights, QMT shall notify DERMA of its decision promptly in writing. Thereafter, DERMA
shall have the right, but shall not be obligated, to commence legal action at its own expense to defend or prosecute such infringements
relating to the Patent Rights. No settlement, consent judgment or other voluntary final disposition of the suit may be entered
into without the consent of QMT, which consent shall not be unreasonably withheld or delayed. The total cost of any action commenced
solely by DERMA shall be borne by DERMA, and DERMA shall retain any recovery or damages derived therefrom.


 


12.5         Infringement
Allegations. In the event that a Third Party asserts or alleges that a Product manufactured or sold by DERMA or its Affiliates
infringes a patent or other proprietary right of such Third Party, QMT shall assume the defense of such claim and shall indemnify
DERMA for all reasonable expenses and/or damages incurred by it as a result of such claim. DERMA may participate in the defense
of such claim through counsel of its own choosing and at its sole expense. In the event that DERMA receives notice of such assertion
or allegation, DERMA shall notify QMT of such allegation or assertion. QMT may enter into any settlement, consent judgment, or
other voluntary final disposition of any infringement action under this Section 12.5; provided, however, that QMT shall
not enter into any settlement, consent judgment or other voluntary final disposition that admits or concedes that an aspect of
the Patent Rights is invalid or unenforceable, without the prior written consent of DERMA, which consent shall not be unreasonably
withheld or delayed.


 


In the event that QMT
does not assume the defense of any Third Party infringement claim, then DERMA may assume the defense of such claim with counsel
of its choosing. If DERMA undertakes the defense of any Third Party infringement by litigation, DERMA may withhold the Royalty
payments otherwise thereafter due QMT under Section 3.2 above and apply this withheld amount toward reimbursement of its expenses,
including reasonable in-house and outside counsel attorneys’ fees, in conjunction with such litigation. Any recovery of damages
by DERMA for any such suit shall be applied first in satisfaction of any unreimbursed expenses and legal fees of DERMA relating
to the suit, and next toward reimbursement of QMT for any royalties withheld pursuant to this Section 12.5. DERMA shall be entitled
to the balance remaining from any recoveries, by way of judgment, award, decree or settlement resulting from such suit.


 



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12.6         Trademarks.
QMT is and shall remain the owner of all right, title and interest to the common law trademark and goodwill associated with the
name “Nimbus®,” and any other marks it develops in association with the QMT Intellectual Property (collectively,
the “QMT Marks”) and DERMA agrees that it will not at any time assert or claim any interest in, nor register
or attempt to register the QMT Marks or any marks confusingly similar thereto. DERMA shall be responsible for the selection, registration
and maintenance of all other trademarks and trade names that it employs in connection with Products (collectively, the “DERMA
Marks”). QMT agrees that it will not at any time assert or claim any interest in, nor register or attempt to register
the DERMA Marks or any marks confusingly similar thereto.


 


13.     
   Rights of First Negotiation and Refusal


 


13.1         Right
of First Negotiation. If QMT at any time desires to sell the ownership of any of the QMT Intellectual Property to a third party,
before doing so it shall engage in good faith negotiations with DERMA for a period of at least sixty (60) days to achieve a definitive
agreement with respect to such a sale.


 


13.2         Right of First
Refusal. If during the Term of this Agreement QMT receives a bona fide offer from an unaffiliated third party to purchase any
of the QMT Intellectual Property, QMT shall give DERMA notice in writing of the terms and conditions of the offer. DERMA shall
have thirty (30) days after receipt of notice to respond to QMT as to whether it desires to purchase the QMT Intellectual Property
on the terms and conditions set forth in the offer. If DERMA gives notice that it desires to purchase the QMT Intellectual Property,
QMT and DERMA shall cooperate to close the transaction in accordance with the agreed terms and conditions. If DERMA declines to
purchase the QMT Intellectual Property or fails to respond during the thirty (30) day period, then QMT shall be permitted to sell
the QMT Intellectual Property to the unaffiliated third party purchaser on the same terms and conditions set forth in the offer;
provided that a closing occurs within the ninety (90) day period following the end of the initial thirty (30) day period. If the
sale of the QMT Intellectual Property does not close within the ninety (90) day period, the right of first refusal shall apply
to any subsequent attempts to sell the QMT Intellectual Property.


 


14.         Miscellaneous.


 


14.1         Use
of Name/Public Statements. Except to the extent required by applicable law or regulation, each Party agrees that it will not
at any time during or following termination of this Agreement use the name of the other Party or any names, insignia, symbols,
or logotypes associated with the other Party or any variant or variants thereof or the names of the other Party’s employees
orally or in any literature, advertising, or other materials without the prior written consent of Party whose name is to be used,
which consent shall not be unreasonably withheld.


 



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14.2         Assignment.
This Agreement may not be assigned or otherwise transferred by either Party without the prior written consent of the other Party,
which consent shall not be unreasonably withheld or delayed; provided, however, that either Party may, without such consent,
assign this Agreement and any of its right or obligations hereunder to its Affiliates or in connection with the transfer or sale
of all or substantially all of the portion of its business to which this Agreement relates, or in the event of its merger or consolidation
or change in control or similar transaction; provided, further, that the assigning Party shall deliver written notice of
any such permitted assignment to the other Party and an agreement from the assignee assuming all of the obligations of this Agreement.
Nothing herein shall prohibit DERMA from sublicensing its rights to third parties, provided that each sublicense shall (1)
impose obligations on the sublicense that are equivalent to the obligations of DERMA under this Agreement; (2) terminate automatically
on the termination of this Agreement. DERMA shall provide to QMT a true and complete copy of each sublicense within 30 days following
the grant of a sublicense. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns
of the Parties and the name of a Party appearing herein shall be deemed to include the names of such Party’s successors and
permitted assigns to the extent necessary to carry out the intent of this Agreement. Any attempted assignment not in accordance
with this Section 13.2 shall be void.


 


14.3         Independent
Contractors. QMT and DERMA shall at all times act as independent parties and nothing contained in this Agreement shall be construed
or implied to create an agency or partnership. Neither Party shall have the authority to contract or incur expenses on behalf of
the other.


 


14.4         Notices.
Any notice or communication required or permitted to be given or made under this Agreement by one of the Parties hereto to the
other shall be in writing and shall be deemed to have been sufficiently given or made for all purposes if sent by hand, recognized
national overnight courier, confirmed facsimile transmission, or mailed by certified mail, postage prepaid, return receipt requested,
addressed to such other Party at its respective address as follows:


 



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If to DERMA:


 


Derma Sciences, Inc.


214 Carnegie Center


Suite 300


Princeton, New Jersey 08540


Attn: Barry J. Wolfenson


Fax: (609) 514-8554


 


If to QMT:


 


Quick-Med Technologies, Inc.


902 NW 4 Street,


Gainesville, Florida 32601


Attn: Nam Nguyen, CFO


Fax: (561) 416-1390


 


14.5         Severability.
If any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, that provision shall
be stricken and the remainder of this Agreement shall continue in full force and effect; provided, however, that the Parties
shall renegotiate an acceptable replacement provision so as to accomplish, as nearly as possible, the original intent of the Parties.


 


14.6         Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware and applicable
U.S. Federal law, without regard to any choice of law principles that would dictate the application of the laws of another jurisdiction.
The state and federal courts located in Delaware shall have exclusive jurisdiction over any dispute arising under this Agreement.


 


14.7         Entirety;
Amendment. This Agreement represents the entire agreement of the Parties and expressly supersedes all previous written and
oral communications between the Parties. No amendment, alteration, or modification of this Agreement or any exhibits attached hereto
shall be valid unless executed in writing by authorized signatories of both Parties.


 


14.8         Waiver.
The failure of any Party hereto to insist upon strict performance of any provision of this Agreement or to exercise any right hereunder
will not constitute a waiver of that or any other provision or right.


 


14.9         Force
Majeure. Neither party will be liable to the other party for any breach or failure to perform any of its obligations under
this Agreement where such breach or failure is caused by anything beyond that party’s reasonable control, including (without
limitation) war, civil commotion, hostility, act of terrorism, strike, lockout, other industrial act, weather phenomena or other
act of God, or governmental regulation or direction.


 


14.10         Prior
Agreement. This Agreement shall supersede the Prior Agreement in all respects and the Prior Agreement shall terminate and be
of no further force and effect as of the Effective Date except for any provisions that survive termination.


 



    	*** This material has been omitted pursuant to a request for a confidential treatment and filed separately with the Securities and Exchange Commission.

22



    	 



    

 


IN WITNESS WHEREOF,
the Parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.


 


	 	DERMA SCIENCES, INC.
	 	 	 
	 	By:	 /s/ Edward J. Quilty
	 	 	Edward J. Quilty
	 	 	President and Chief Executive Officer
	 	 
	 	QUICK-MED TECHNOLOGIES, INC.
	 	 	 
	 	By:	 /s/ J. Ladd Greeno
	 	 	J. Ladd Greeno
	 	 	Chief Executive Officer


 



    	*** This material has been omitted pursuant to a request for a confidential treatment and filed separately with the Securities and Exchange Commission.

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EXHIBIT A


 


Patent Rights


 


U.S. Patents


Intrinsically Bactericidal Absorbent Dressing and Method of
Fabrication


U.S. 7,045,673 (May 16, 2006)


 


Materials with Covalently Bonded, Nonleachable Polymeric Antimicrobial
Surfaces


U.S. 7,708,694 (May 4, 2010)


 


Method of Attaching an Antimicrobial Cationic Electrolyte to
the Surface of a Substrate


U.S. 7,790,217 (September 7, 2010)


U.S. 8,092,854 (January 10, 2012)


 


International Patents


Intrinsically Bactericidal Absorbent Dressing and Method of
Fabrication


Australia 773,532 (September 9, 2004)


Canada 2,353,436 (January 8, 2008)


China ZL 99814229.8 (January 12, 2005)


Korea 100689020 (February 23, 2007)


Mexico 248078 (August 15, 2007)


Russia 004160 (February 26, 2004)


 


Method of Attaching an Antimicrobial Cationic Polyelectrolyte
to the Surface of a Substrate


Mexico 297242 (March 20, 2012)


 


Antimicrobial Cationic Electrolyte Coating


South Africa 2008/01601 (May 27, 2009)


 


Antimicrobial Cationic Polyelectrolyte Coatings


Australia 2006283043 (June 16, 2011)


 



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Pending U.S. Patent Applications


Antimicrobial Bandage Material Comprising Superabsorbent and
Non-Superabsorbent Layers


US 2010-0211035 (May 3, 2010)


 


Polyelectrolyte Complex for Imparting Antimicrobial Properties
to a Substrate 


US 2010-0291169 (July 2, 2010)


 


Pending International Patent Applications


Intrinsically Bactericidal Absorbent Dressing and Method of
Fabrication


Europe 1156766


 


Method of Attaching an Antimicrobial Cationic Polyelectrolyte
to the Surface of a Substrate


Brazil PI0617099-4


 


Antimicrobial Cationic Polyelectrolyte Coating


Canada 2620203


China 101291743


 


Method of Attaching an Antimicrobial Cationic Polyelectrolyte
to the Surface of a Substrate


Europe 1937418


Japan 2008-528126


 


Polyelectrolyte Complex for Imparting Antimicrobial Properties
to a Substrate 


 


Australia 2009270715


Brazil P10911004-6


Canada 2731072


China 200980132939.0


Europe 2 320 958


 



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EXHIBIT B


 


Materials


 


Polydiallyldimethyl ammonium chloride.


 


Poly Acrylic Acid Sodium Salt


 



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EXHIBIT C


 


QMT Trademark Standards


 


The Marks and Trademarks
of Quick-Med Technologies, Inc. (“Licensor”) include without limitation: “Quick-Med Technologies” “QMT”,
“Quick-Med”, “NIMBUS”, and accompanying logos and trade dress, including the QMT Cross Official Logo, which
is subject to modification by Licensor from time to time. The foregoing and attached are either registered trademarks or trademarks
of Quick- Med Technologies, Inc., in the United States and worldwide. All rights are reserved.


 


		·	All use and appearance of Marks and accompanying logos and trade dress shall be in accordance with
the following four examples. Any other use shall require the prior written consent of Licensor. The color used in the Licensor’s
Marks, including the Official Logo, is as follows:



  





	First Column = Burgundy
	Second Column = Black
	Third Column = White
	 	 	 	 
	L:	36	0	100
	A:	54	0	0
	B:	1	0	0
	 	 	 	 
	C:	32	75	0
	M:	100 	68	0
	Y:	46	67	0
	K:	14	90	0
	 	 	 	 
	H:	333 	0	0
	S:	82	0	0
	B:	62	0	100
	 	 	 	 
	R:	158 	0	255
	G:	29	0	255
	B:	86	0	255





 


		·	The use of a single or multiple colors will be based on the limitations of the type of print materials and process used.



 



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