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LICENSE AGREEMENT
THIS AGREEMENT entered into in Israel 27th day of March, 1997,
by and between AGRICULTURAL GLYCOSYSTEMS, INC., a Michigan
corporation having a place of business at Xxx Xxxxxxx Xxxxxx,
Xxxxxxxx 000, Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000 ("AGI") and
Agrogene Ltd., a corporation doing business in Israel, with a
business address at 00 Xxxxxxxx Xxxxxx, Xxxxxx-Xxx 00000
(collectively "Agrogene").
WHEREAS, Agrogene is the owner of particular, patent
applications and Licensed Technologies as set forth hereinbelow;
WHEREAS, AGI is desirous of obtaining a license under the
Licensed Technology (as defined hereinbelow);
WHEREAS, the parties wish to enter into a program of Work as
detailed hereinbelow; and
WHEREAS, Agrogene agrees to grant AGI a license to
commercialize the Licensed Products;
NOW THEREFORE, in consideration of the mutual covenants set
forth hereinbelow and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties do agree as
follows:
I. Definitions.
A. "Licensed Technology shall mean the technology disclosed
in pending U.S. Patent Applications Serial No. 08/690,423 filed
July 27, 1996; and Serial No. 08/739,699 filed October 29, 1996
both of which are entitled "Preparation and Use of Inula Extracts
as a Fungicide for the Control of Plant Disease," as well as any
patents issuing from said applications, and any division,
continuation, continuations-in-part, or re-issues of said patents
and patent applications, as well as all equivalents of the
foregoing anywhere in the world. Licensed Technologies shall also
include all Improvements to the technology disclosed in the
aforementioned patent applications. As used herein "Improvements"
shall mean all improvements, modifications or changes made, during
the term of this Agreement, to the materials or methods, and
therapies described in the patents and patent applications, whether
patented, unpatented or unpatentable.
B. "Licensed Products" shall mean all products whose
manufacture, use or operation is covered by an unexpired claim of
a patent included within the Licensed Technology.
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C. "Net Selling Price" shall mean the price at which
Licensed Products are sold, by AGI to third parties ex factory, and
shall be exclusive of costs of shipping, insurance, taxes directly
related to the sale of Licensed Products, exported or import
duties, discounts and rebates. If a Licensed Product is
incorporated into another product, the Net Selling Price of the
other product which is attributable to the incorporated Licensed
Product, and the proportion of each component shall be agreed to by
the parties, in writing, and shall by annexed to this Agreement.
D. "Sale" shall mean the sale, lease or other transfer of
Licensed Products.
II. The Grant
A. Agrogene hereby grants to AGI an exclusive, worldwide,
royalty-bearing license under the Licensed Technology, to use the
Licensed Technology; and to make, use, have made, and sell Licensed
Products.
B. AGI shall have the right to grant one or more sub-license
hereunder provided Agrogene first gives its written consent to any
said sublicense, and provided AGI shall be responsible for payment
of Sublicense Royalties to Agrogene in accord with section III-B
below.
C. AGI shall notify Agrogene, in writing, of each sublicense
which it grants.
D. AGI shall be responsible for assuring that its
sublicensees shall comply with all obligations of this Agreement.
III. Royalty.
A. Royalties shall be calculated on the basis of 3% of the
Net Selling Price of Licensed Products and shall attach quarterly,
each year.
B. Sublicense Royalties shall comprise 20% of the amount of
any licensing fee or royalty payment received by AGI pursuant to
any sublicense granted by AGI hereunder. Sublicense Royalties
shall attach when payment is received by AGI, and paid to Agrogene
in accord with section IV-A hereinbelow.
IV. Record and Reports.
A. AGI will make written royalty reports to Agrogene
quarterly, within 30 days after the first day of each January,
April, July and October during which the Agreement is in force and
30 days after termination of this Agreement, setting forth the
total income received from the sale, lease or other transfer of
Licensed Products by AGI and its sublicensee during the previous
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quarter and the amount of royalties due thereupon. Each report
shall be accompanied by a check for any royalties then due and
owing. Should no Licensed Products have been sold and/or royalties
due, the report shall so state.
B. During the terms of this Agreement, and for five years
after the termination thereof, AGI shall keep records of income
received from Licensed Products sold, leased or otherwise
transferred under this Agreement and any sublicenses, said records
being of sufficient detail to enable Agrogene to verify all
royalties payable and paid under this Agreement. Agrogene shall
have the right to appoint a Certified Public Accountant to inspect
such records, upon reasonable notice to AGI, during regular
business hours and no more often than once each year; provided that
the cost of said inspection shall by borne by Agrogene and said
Certified Public Accountant shall report to Agrogene only the
amount of royalty payable for the period under audit.
V. Joint Inventions.
Any invention made through the joint efforts of Agrogene and
AGI during the term of this Agreement, and to the extent that said
invention relates to Licensed Technology, shall be deemed to be
jointly owned by Agrogene and AGI, and any products incorporating
said invention in their manufacture, use or operation shall be
Licensed Products which are subject the royalties as set forth
herein.
VI. Research and Development.
A. During the first five (5) years this Agreement is in
force, AGI shall in accord with the schedule in section B
hereinbelow, fund a program of work to be carried out by Agrogene
and directed to making Improvements in the Licensed Technology (the
"Program").
B. AGI shall contribute $150,000 per year, during each of
the first five years this agreement is in force, to fund the
Program. The yearly periods shall be calculated on the basis of
Program Years, with the first Program Year commencing on the
effective date of this Agreement. In the first Program Year, AGI
shall contribute funding according to the following schedule:
$25,000 - on the effective date of the Agreement.
$25,000 - within 3 months of the effective date of this
Agreement.
$25,000 - within 6 months of the effective date of this
Agreement.
$25,000 - within 9 months of the effective date of this
Agreement.
$50,000 - within 12 months of the effective date of this
Agreement.
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During each of the four (4) subsequent Program Years, AGI shall
make said payment of $150,000 to Agrogene in one to five
installments. Should this Agreement terminate in a year in which
a payment is due in accord with this section, the amount of said
payment shall be prorated, based upon the fraction of the Program
Year which has transpired.
C. Agrogene shall provide AGI with a written Research Plan
and Budget on an annual basis, for each Program Year in which AGI
is to fund the Program of Work. The first Research Plan and Budget
shall be submitted by the effective date of this Agreement, and
subsequent Research Plans and Budgets shall be submitted prior to
the start of subsequent Program Years. AGI's obligation to fund
the Program of Work shall be conditional upon its receipt of the
Research Plans and Budgets; and AGI shall have the right to discuss
the Research Plan and Budget with Agrogene and to make
modifications or revisions thereto.
D. Agrogene shall open and maintain a special account which
shall receive all monies which AGI is obligated to pay Agrogene for
funding the program of work, and funds for carrying out the Program
shall be expended from said account,
E. Agrogene shall keep and maintain the records and books of
said account during the Program of work and for (5) years
thereafter. AGI shall have the right, during the term of the
program of work, and for (5) years thereafter, to appoint a
Certified Public Accountant to inspect such records and books, upon
reasonable notice to Agrogene during regular business hours and no
more often than once each year; provided that the cost of said
inspection shall be borne by AGI.
F. In carrying out the Program and expending the funds
Agrogene shall act reasonable and to carry out the goals of the
Program and to maximize the value of the license granted herein.
G. Agrogene and AGI shall mutually disclose the results of
the Program to one another on a regular basis and no less
frequently than once per quarter.
VII. Procurement and Maintenance of Patents.
A. During the term of this Agreement AGI shall pay all
filing fees, maintenance fees, and costs of patent application
preparation and prosecution to perfect and maintain all necessary
patents covering the Licensed Technology.
B. Agrogene shall provide AGI with all information and
assistance which is reasonably necessary to enable AGI to secure,
maintain and enforce worldwide patent protection for the Licensed
Technology.
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C. Should AGI elect to abandon, or to not file, refile,
reissue or take any other steps necessary to perfect any patent,
patent application or right licensed hereunder, it shall so inform
Agrogene at least 60 days in advance of any deadline for taking
action in connection with said patent, patent application or right;
and Agrogene shall have the right, but not the obligation to assume
responsibility for maintaining or perfecting said patent, patent
application or right, and if Agrogene elects to do so, it may at
its sole option, and immediately upon written notice to AGI, remove
that patent, patent application or right from the body of Licensed
Technology, and such patent, patent application or right shall
become the property of Agrogene by operation of this agreement.
VIII. Enforcement.
A. During the term of this License, AGI shall have the
right, but not the obligation, to take all actions necessary to
enforce the rights transferred hereunder, including the right to
bring suit at its own expense and in its own name, or if required
by law jointly with, or in the name of, Agrogene.
B. Should AGI institute any enforcement action, it shall
have the sole right to direct and control said enforcement action,
including the right to settle said action. Agrogene shall be
entitled to 3% of any recovery, award or settlement resultant from
said enforcement, after recovery of all of AGI's expenses and costs
associated with said enforcement action, AGI shall be entitled to
retain the remainder of said recovery award or settlement.
C. Agrogene shall extend all reasonable and necessary
cooperation to AGI in connection with its efforts to enforce any of
the rights licensed hereunder including giving testimony, executing
documents and providing technical assistance, providing that
reasonable costs thereof are borne by AGI.
D. Agrogene may agree to share in the costs of any such
enforcement action, in which case Agrogene's share in any recovery,
award or settlement resultant therefrom shall be in proportion to
its respective contribution to the costs of said enforcement.
IX. Confidentiality.
A. During the term of this Agreement, and for three (3)
years thereafter, the parties agree to maintain confidentiality
with regard to data, documents, know-how, marketing information and
other information relating to the Licensed Technology of the
Program (collectively "Confidential Information"). This obligation
shall apply to Confidential Information which either party
generates itself and to Confidential Information either party
receives from the other party as well as to Confidential
Information generated on behalf of either of the parties by a third
party. This obligation shall not apply to any information which:
is in, or enters into, the public domain through no breach of this
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Agreement; is communicated to either of the parties hereto by a
third party who has not improperly obtained such information; or
which was developed by AGI independently of Agrogene and prior to
this Agreement.
B. The parties recognize that Confidential Information may
have to be disclosed to third parties in connection with
sublicensing negotiations, regulatory approval, marketing and the
securing of intellectual property protection; and the parties agree
that in order to maximize the value of this license, neither will
unreasonably deny or delay approval of such disclosure.
C. Neither party shall be entitled to publish the fact of
the performance of the Program and the result thereof, without
receiving the consent of the other party. Where one of the parties
is interested in publishing the fact of performance of the Program
and/or the results thereof, it shall request the other party's
consent. Should the other party's objection not be received within
thirty (30) days of such request, the party interested in
publishing shall be entitled to publish the information which was
the subject of said request. A party shall not be entitled to
object to publication unless it might reasonably cause it any
damage.
D. The parties shall assure that their employees, persons
working on their behalf and sub-contractors comply with all
provisions of this Section.
X. Transferability.
A. AGI shall have the right to transfer the rights granted
hereunder to a third party provided Agrogene first gives its
written consent, and said third party agrees, in writing, to be
bound by all terms and conditions of this Agreement. Any profit
realized by AGI for the transfer of said rights shall be shared
with Agrogene. Agrogene's share of said profits, computed after
deduction of AGI's reasonable costs associated with said transfer,
shall be 15%, but in no instance shall Agrogene's share by less
than 10% of the sale price attributed to said license.
B. Section X-A notwithstanding, AGI shall be free to
transfer the rights granted under this Agreement to a party which
is purchasing substantially all of the business assets of AGI,
without prior approval of Agrogene and without further payment to
Agrogene; provided that the purchasing party agree, in writing, to
by bound by all of the terms and conditions of this Agreement.
XI. Term and Termination.
A. This Agreement shall by effective as of the date set
forth above when signed by both of the parties hereto, and with
regard to patents licensed hereunder, shall, unless earlier
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terminated in accord with paragraphs B-D hereinbelow, run until the
last of the patents covering the Licensed Technology expires. With
regard to any unpatented technology licensed hereunder, the
Agreement shall run until terminated in accord with paragraphs B-D
hereinbelow.
B. During the first five (5) Program Years, AGI may
terminate this Agreement upon sixty (60) days written notice given
to Agrogene, given prior to the end of any said year. In
subsequent years, AGI may terminate this Agreement upon sixty (60)
days written notice to Agrogene.
C. Should either party breach any material provision of this
Agreement, the other party shall have the right to terminate this
Agreement upon (60) days written notice to the breaching party
setting forth the nature of said breach; however, should the
breaching party cure said breach within the 60-day notice period
this Agreement shall continue in effect as if said notice had not
been given.
D. This Agreement shall terminate automatically if AGI is
unable to pay its debts in the normal course of business, or it
enters into a compulsory or voluntary bankruptcy proceeding or
liquidation, or if it has a trustee or receiver or manger appointed
to oversee its assets, or if it ceases, for any reason to carry on
its business.
E. Upon termination of this Agreement for any reason, all
rights and obligations established hereunder shall terminate,
including any sublicenses granted hereunder, except that; (1)
Agrogene shall still be obligated to maintain and permit access to
records as set forth in section VI-E above; (2) AGI shall still be
obligated to make a final report and royalty payment, and maintain,
and permit access, to records as set forth in Section IV
hereinabove; (3) AGI's rights to Enforcement as established in
section VIII above, including Agrogene's duty to cooperate shall
continue, by only with regard to causes of action which arose prior
to termination; and (4) in the event that the Agreement is
terminated in accord with section XI-C because of an uncured
material breach on the part of Agrogene, the license granted herein
to AGI, under Licensed Technology, shall be considered paid up and
shall continue in force. Termination for any reason shall not
relieve either party of its obligation with regard to Confidential
Information.
F. Upon termination of this agreement for any reason,
Agrogene shall not be required to return to AGI, any royalty
payments, or sublicensing royalty payments, nor shall Agrogene by
required to return to AGI any payments made in accord with section
VI for funding the Program of Work; however, Agrogene shall be
required to refund any overpayments or prepayments made by AGI
prior to said termination.
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G. Beginning in the sixth Program Year, the minimum annual
royalty payable hereunder shall be $15,000.00. If sales of
licensed products in any year are insufficient to generate
$15,000.00 in royalty payments, AGI shall have the right, at its
sole option, to make supplemental royalty payments to meet said
minimum royalty obligations. Should the aforementioned minimum
royalty payment of $15,000.00 not be made in any year, Agrogene
shall have the right, but not the obligation, to terminate this
Agreement upon written notice to AGI, given within 60 days of the
end of the Program Year in which said minimum royalty payment is
not made.
XII. Marking.
AGI agrees to xxxx all Licensed Products sold or otherwise
disposed of (or containers for said Licensed Products if marking of
said Licensed Products is impractical), with the word "patent" or
"patents" and the number of the Licensed Product or Licensed
Patents applicable thereto, and to require it sublicensees to do
likewise.
XIII. Warranty.
Agrogene warrants that it has the right to grant and hereby
transfers, to AGI all intellectual property rights in its
possession, including know-how, data and information necessary for
AGI to practice fully the Licensed Technology; and that it is not
aware to any intellectual property rights of any party which would
prevent, or limit, AGI's practice of the Licensed Technology.
XIV. Miscellaneous.
A. During the term of this Agreement, both parties shall use
their best efforts to maximize the value of this Agreement and the
rights granted hereunder.
B. If any provision in the License Agreement is, for any
reason whatsoever, held to be void or of no effect, it shall not
affect the validity of the remaining provisions of this License
Agreement, except in the case such void provision make the License
Agreement unworkable.
C. Any notice required or permitted to be given under this
License Agreement shall be deemed sufficiently given if mailed by
registered mail, postage prepaid, addressed to the party to be
notified at its address listed above, or at such other address as
may have been previously furnished in writing to the notifying
party.
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D. This Agreement is a complete statement of the entire
understanding of the parties with respect to the subject matter
thereof, and no prior representation, promises or understanding
related to this subject matter, which are not incorporated herein,
shall be binding upon the parties hereto.
E. This Agreement may only be modified by a writing signed
by both of the parties hereto.
F. No association, combination or relation is created
between the parties, except as provided herein.
G. This Agreement shall be binding upon the successors,
heirs and assigns of the parties hereto.
AGROGENE, LTD.
By: /s/ Xxxxx Xxxxx
Its: President
AGI INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Its: President
