EXHIBIT 10.19
DEVELOPMENT AND MARKETING AGREEMENT
THIS AGREEMENT ("Agreement") between SUPERIOR TOMATO ASSOCIATES, L.L.C.,
a Delaware limited liability company ("STA"), AGRITOPE, INC., a Delaware
corporation ("Agritope"), SUNSEEDS COMPANY, a _______________ corporation
("Sunseeds"), and XXXXXX AND XXXXXXXXXX SALES COMPANY, INC., a _______________
corporation ("A&W") is effective as of the 19th day of February, 1996
("Effective Date").
1. Background.
1.1 Concurrently with this Agreement, Agritope, Sunseeds and A&W are
entering into an Operating Agreement of even date (the "Operating Agreement")
for Superior Tomato Associates, L.L.C.
1.2 The parties desire to combine Sunseeds' tomato seed genetics and
know-how with Agritope's SAMase technology and know-how and A&W's growing,
packing and distribution know-how to produce and commercialize in North
America economically superior tomatoes for the fresh market; the product shall
be fresh market cherry, roma and vine-ripened large fruited tomato varieties
using seed developed by STA.
2. Definition Of Terms.
The words appearing in capitalized form throughout this Agreement shall
have the meanings assigned to them in this Section 2.
Affiliate means, for the company, an entity controlling, controlled by,
or under common control with such company. "Control" for the purposes of this
definition shall mean ownership of fifty percent (50%) or more of voting
securities.
Agritope Know-How means unpatented inventions, data, processes,
compositions, techniques and other technical information proprietary to
Agritope, which is solely owned by Agritope or which Agritope has the right to
control the use of, relating to methods for ethylene regulation in the Field.
Agritope Licensed Know-How means all Agritope Know-How in existence as of
the Effective Date or created or acquired during the term of the Cooperative
Development Work.
Agritope Licensed Patents means all Agritope Patents in existence as of
the Effective Date of this Agreement, or claiming an invention conceived or
discovery made, or which are acquired, during the term of the Cooperative
Development Work.
Agritope Patents means all those United States and foreign patent
applications and patents (a) listed on Schedule B to this Agreement to the
extent of claims reading on methods for regulation of ethylene production, (b)
all United States and foreign patent applications and patents, including
continuations and divisions, claiming an invention conceived or discovery made
(including any discovery or breeding of a Novel Variety) solely by employees
and/or agents of Agritope pursuant to the Cooperative Development Work, that
is necessary or useful to apply inventions in clause (a) to the Field, and (c)
any reissues, re-examinations and foreign counterparts of the foregoing. As
used in this definition, the word "patent" includes a certificate issued under
the U.S. Plant Protection Act (and foreign counterparts thereof) and the words
"patent application" includes an application for such certificate.
Applicable Royalty Percentage for a particular variety of Product means
the royalty percentage established pursuant to Section 6.1 of this Agreement
as a function of the Savings Per Box for such variety of Product that is
determined pursuant to Section 3.2 of this Agreement.
Approved Grower means a grower approved pursuant to Section 10.1 of the
Operating Agreement.
Box means, for any variety of tomatoes, a box of a size in which such
variety of tomatoes is most customarily packed.
Comparison Tomato has the meaning set forth in Section 3.2.
Cooperative Development Work means the Cooperative Development Work
described in Section 3 of this Agreement.
Cost of Goods for a product means the full cost of producing or acquiring
the product, as determined by generally accepted cost accounting procedures.
Cost of Goods shall not include general corporate allocations or other
allocations which are not directly related to production of the item and shall
not include amortization of development expenditures. In the event any item
is acquired by a party from an Affiliate of such party, "cost of manufacturing
or acquiring" shall be deemed to mean such Affiliate's cost of manufacturing
or acquiring.
The Field means seeds and fruit for fresh market cherry, roma and vine-
ripened large fruited tomato varieties, which seeds and fruit contain
recombinant genetic material that regulates production of ethylene.
Joint Patents means all United States and foreign patent applications and
patents, including continuations and divisions, claiming an invention
conceived or discovery made (including any discovery or breeding of a Novel
Variety) jointly by employees and/or agents of both Agritope and Sunseeds,
including any reissues, re-examinations and all foreign counterparts thereof.
Ownership of an invention shall conclusively be considered "joint" when one or
more employees or agents from Agritope and one or more employees or agents
from Sunseeds must be indicated as co-inventors or joint breeders under United
States laws on the patent application. As used in this definition, the word
"patent" includes a certificate issued under the U.S. Plant Protection Act
(and foreign counterparts thereof) and the words "patent application" includes
an application for such certificate.
Net Sales means the gross invoice price of each variety of Product sold
by A&W or its agents, on A&W's own behalf or on behalf of any growers, less
the following items, but only insofar as such items are separately invoiced
and included in the gross selling prices: (i) customs duties, import, export,
excise, and sales taxes directly imposed with reference to particular sales;
(ii) costs of transportation; and (iii) credit for returns of defective
Products. In the event of any transfer of Product in other than a bona fide
arm's-length transaction exclusively for money, or any transfer of Product
which otherwise does not result in customary sales revenue, such transfer
shall be (unless the parties agree otherwise) deemed to constitute a sale at
the then current average selling price for the Product.
Novel Variety shall mean "novel variety", as such term is defined in the
U.S. Plant Protection Act (7 U.S.C. Section 2541), as the same may be amended
from time to time.
Product means any product in the Field developed through the Cooperative
Development Work under this Agreement.
Project means the Cooperative Development Work performed by the Parties
to develop, obtain regulatory approval and market a particular variety within
the Field.
Regulatory Approval means (1) in the United States, deregulation from the
U.S.D.A. (or successor agency) and completion of food safety consultations
with the FDA (or successor agency) for production and sales of the Product, or
(2) outside of the United States, analogous order(s) by non-U.S. governmental
agencies which require regulatory approval prior to production and sales of a
Product in such non-U.S. country.
Savings Per Box has the meaning set forth in Section 3.2.
Sharing Payment means any payment provided for in Section 6 hereof.
Sunseeds Know-How means unpatented inventions, data, processes,
compositions, techniques and other technical information proprietary to
Sunseeds, and biological material, which is solely owned by Sunseeds or which
Sunseeds has the right to control the use of, relating to use of tomato
varieties potentially applicable to the Field, including without limitation
proprietary germplasm.
Sunseeds Licensed Know-How means all Sunseeds Know-How in existence as of
the Effective Date or created or acquired during the term of the Cooperative
Development Work.
Sunseeds Licensed Patents means all Sunseeds Patents in existence as of
the effective date of this Agreement, or claiming an invention created, or
discovery made, or which are acquired, during the term of the Cooperative
Development Work.
Sunseeds Patents means all those United States and foreign patent
applications and patents (a) listed on Schedule C to this Agreement, (b) all
United States and foreign patent applications and patents, including
continuations and divisions, claiming an invention conceived or discovery made
(including any discovery or breeding of a Novel Variety) solely by employees
and/or agents of Sunseeds pursuant to the Cooperative Development Work that is
necessary or useful to apply the inventions in clause (a), and any other
matter included within the definition of Sunseeds Patents, to the Field, and
(c) any reissues, re-examinations and foreign counterparts of the foregoing.
Sunseeds Patents also includes Sunseeds' biological material, including
proprietary germplasm, to the extent it is covered by a patent or patent
application. Without limiting the foregoing, Sunseeds Patents shall include
all patent applications and patents on those varieties of tomatoes that may
become the subject of Projects under this Agreement. As used in this
definition, the word "patent" includes a certificate issued under the U.S.
Plant Protection Act (and foreign counterparts thereof) and the words "patent
application" includes an application for such certificate.
Territory means the United States and Canada.
3. Cooperative Development Work.
3.1 Period; Objective. From the Effective Date, Agritope, Sunseeds and
A&W shall work together to develop and obtain any required Regulatory Approval
for Products for STA. STA shall from time-to-time approve specific Projects
for different varieties of Product within the Field. In connection with such
efforts, Sunseeds will furnish to Agritope tomato germplasm for the particular
varieties to be developed in the Projects. Agritope will implant its genetic
material into such germplasm. Sunseeds will make the foundation seed and
hybrid seed. Sunseeds will conduct the breeding activities. Agritope and A&W
will participate in the breeding activities, including selection of hybrid
seed from foundation seed. A&W will supply the production acreage and
distribution infrastructure for the development and testing of the Product.
3.2 Production Testing; Agreement On Cost Savings. At such time as
Agritope and Sunseeds conclude that a particular variety of Product is ready
for production testing, they will so notify A&W. Using seeds provided by
Sunseeds, A&W will then provide approximately 3-5 acres for production testing
of such variety (covering as broad a range of growers and as many locations as
possible) and will grow, or cause Approved Growers to grow, fruit under
conditions resembling as nearly as possible the conditions of large scale
commercial growing. STA will keep detailed records of the cost of growing,
picking and packing such fruit, of the quantity produced, and of shrinkage,
and will furnish such records to Agritope and Sunseeds. A&W will cooperate,
and will obtain the cooperation of each Approved Grower, to furnish to STA
information that STA may reasonably require for such record keeping. A&W will
also grow, or cause Approved Growers to grow, and furnish to STA the same
information concerning the cost of growing, picking and packing, and shrinkage
of, an equivalent quantity of fruit of similar variety using seeds of the type
A&W is then using most commonly in its commercial operations (the "Comparison
Tomato"). Based upon such information (and other industry information as is
available concerning growing, picking and packing of such tomato varieties)
STA will determine in good faith the dollar amount per Box that may be
reasonably expected to be saved by use of such Product, instead of the
Comparison Tomato, in large scale commercial growing, picking and packing.
Such dollar amount per Box, will be referred to in this Agreement as the
"Savings Per Box." STA will inform Agritope, Sunseeds and A&W of such
determination and provide them with the data supporting such determination.
3.3 Exchange Of Information. During the term of the Cooperative
Development Work, Agritope and Sunseeds will exchange with each other and
share with STA all material information developed pursuant to the Cooperative
Development Work, excluding the exchange of Agritope Know-How and information
concerning Agritope Patents and Sunseeds Know-How and information concerning
Sunseeds Patents, relating to the Field. Agritope and Sunseeds will also
furnish to A&W all information concerning the Product that is pertinent to its
production testing. A&W will share with STA and the other parties all
material information concerning the Product developed by A&W in the course of
growing, picking and packing the Product, including quantity and cost.
3.4 Funding.
(a) STA shall fund the Cooperative Development Work for each
Project on a full cost-reimbursement basis in accordance with budgets pre-
approved by STA. STA will have no obligations to fund any expenditures that
are not within such approved budgets. STA will not reimburse parties for any
costs incurred prior to the date of this Agreement.
(b) Each party shall maintain detailed records which accurately
identify costs and expenses incurred and paid in connection with the
Cooperative Development Work for each specific Project. Each party shall
submit this information to STA as of the last day of each month (or such
alternative dates as STA may establish) for the preceding month and shall
submit to STA on January 15 and July 15 of each year an estimate of expenses
to be incurred during the current six months.
4. Production And Supply Of Seeds.
4.1 Sunseeds Responsibilities. Sunseeds will produce and store seeds
for Product and ship such seeds on behalf of and at the direction of STA. STA
will remit to Sunseeds Sunseeds' Cost of Goods for such seeds from STA's
proceeds of sale of such seeds. Sunseeds shall at all times use its best
efforts to supply STA's demand for seeds for Product.
4.2 Seed Allocations.
(a) A&W will have the first right each season to obtain its
requirements of seeds for Product. A&W will provide to STA A&W's forecasts
for seed six months prior to anticipated shipment, and firm orders for seed
(which will not deviate from forecast by more than twenty percent (20%)) 60
days prior to shipment, which orders must be placed by June 1 and December 1
of each year. To the extent firm orders are not received by such dates, STA
may allocate available seeds to third parties. A&W will pay to STA, no later
than thirty (30) days after invoice, STA's Cost of Goods for such seeds, plus
fifteen percent (15%) of such Cost of Goods.
(b) If seeds remain in excess of A&W's requirements, STA may
supply such seeds to third party Approved Growers on the such terms as STA
deems advisable.
4.3 Seed Specifications. Sunseeds shall supply seed for Product that
shall meet the specifications for such seed as approved in writing by STA.
4.4 Failure Of Sunseeds To Meet STA Requirements. To the extent that
Sunseeds cannot meet STA's requirements for seed for Product, STA shall be
free to obtain such seeds from a third party or parties. Sunseeds agrees to
provide the third party that STA selects with the necessary information and
Sunseeds Know-How to allow the third party to produce the seeds. As a
condition to the disclosure to the third party, the third party will execute a
non-disclosure agreement substantially in the form of Exhibit A of this
Agreement.
4.5 Restricted Rights; Labels. A&W will have the right to use the seed
furnished under this Agreement solely to produce fruit in accordance with the
terms of this Agreement and shall require Approved Growers not to propagate
the seed or use it for other purposes. Sunseeds and A&W shall insure that all
seeds provided under Section 4 and under Section 3.2 shall be provided under a
label containing either the words "Unauthorized Propagation Prohibited" or
"Unauthorized Seed Multiplication Prohibited" and, after a certificate issues
under the U.S. Plant Protection Act, words such as "U.S. Protected Variety".
Seeds transferred outside the United States will be transferred under
comparable labels appropriate in the country to which the seeds are
transferred.
5. Marketing And Distribution Rights.
5.1 Commercialization. A&W shall use best efforts to arrange for
Approved Growers to grow fresh tomato Product, and to market and sell fresh
tomato Product in the Territory. STA will not fund or reimburse any growing,
picking, packing or distribution costs for production or sale of Product
(including those expenses incurred pursuant to Section 3.2). A&W will market
and sell all tomato Product under a trade name and xxxx to be determined by
STA, which trade name and xxxx will be owned solely by STA.
5.2 Reserved Right To Compete. Each party expressly reserves the right
to research, develop and market products (expressly including tomato products)
which compete indirectly or directly with the Products developed and marketed
under this Agreement.
6. Sharing Of Savings And Premium.
6.1 Applicable Royalty Percentage. STA, in consultation with the other
parties to this Agreement, and with the concurrence of at least two of the
three other parties, will establish an Applicable Royalty Percentage for each
variety of Product based on the Savings Per Box established pursuant to
Section 3.2. In conjunction with its commercialization efforts, A&W will
require each Approved Grower to agree in writing to pay to STA, the Applicable
Royalty Percentage. Any exceptions to the standard Applicable Royalty
Percentage must be approved in writing by STA. In the event that A&W desires
to act as an Approved Grower, the Applicable Royalty Percentage for A&W will
be the Applicable Royalty Percentage established by STA or such other
Applicable Royalty Percentage as STA and A&W shall negotiate. Notwithstanding
any other provision hereof, no Approved Grower (including A&W) will receive
any seed for Product, until such Approved Grower has entered into an agreement
in form and substance satisfactory to STA committing to pay the Applicable
Royalty Percentage.
6.2 Sharing Payments. In consideration of the Cooperative Development
Work to be undertaken and other obligations set forth herein, A&W agrees to
pay STA as follows: No later than thirty (30) days after the first and all
subsequent calendar months following the first sale of Product, A&W shall pay
to STA for each variety of Product an amount equal to the Applicable Royalty
Percentage multiplied by Net Sales of such variety of Product shipped in such
month by A&W and by Approved Growers arranged by A&W. The Sharing Payments
due and payable hereunder shall be computed for each calendar month in the
currency in which the sale was made, but shall be definitively discharged by
payment to STA in U.S. dollars converted from such currency using the closing
spot exchange rate between the two currencies quoted in the Wall Street
Journal (or, if not available, such other mutually agreeable financial
publication of international circulation) in effect on the last business day
of the calendar quarter to which the payment relates.
7. Patents, Know-How, License Grants.
7.1 Agritope Sole Ownership. Agritope shall own all Agritope Patents
and Agritope Know-How.
7.2 Sunseeds Sole Ownership. Sunseeds shall own all Sunseeds Patents
and Sunseeds Know-How.
7.3 A&W Sole Ownership. A&W shall own all A&W patents, trademarks and
labels.
7.4 Joint Patents; Rights In Product.
(a) STA shall own, and is hereby assigned, all Joint Patents on
inventions created or discoveries made in the Cooperative Development Work.
(b) Within the Field STA shall use any Joint Patents solely for
the development and sale of Products pursuant to this Agreement.
(c) Whether or not any Product qualifies as a Joint Patent, the
Product shall be owned by STA, and each party hereby assigns all rights in the
Product to STA.
7.5 Agritope License To STA. Subject to the terms and conditions of
this Agreement, for Product whose production or sale is covered by a claim of
an Agritope Licensed Patent, or which use Agritope Licensed Know-How, Agritope
hereby grants STA a non-exclusive, paid-up, royalty free (except as provided
herein), license, with the right to sublicense with the prior written approval
of Agritope (not to be unreasonably withheld), under Agritope Licensed Patents
and Agritope Licensed Know-How to produce or have produced and use, sell or
have sold such Products, in the Territory.
7.6 Sunseeds License To STA. Subject to the terms and conditions of
this Agreement, for Product whose production or sale is covered by a claim of
a Sunseeds Licensed Patent, or which use Sunseeds Licensed Know-How, Sunseeds
hereby grants STA a non-exclusive, paid-up, royalty free (except as provided
herein), license, with the right to sublicense with the prior written approval
of Sunseeds (not to be unreasonably withheld), under Sunseeds Licensed Patents
and Sunseeds Licensed Know-How to produce or have produced and use, sell or
have sold such Products, in the Territory.
7.7 Notice Of Sole Rights. After the Effective Date of this Agreement,
a party asserting sole ownership of any patent rights or know-how in the Field
developed pursuant to the Cooperative Development Work shall provide
reasonable notice to STA of its intention to seek patent protection or to
assert proprietary interest in such Know-How. STA shall have the right to a
reasonable opportunity to review and comment on such assertions prior to
patent applications being filed. Any dispute among the parties to this
Agreement concerning such assertion shall be resolved by arbitration pursuant
to Section 17.8 hereof.
7.8 Regulatory Files. STA, Agritope and Sunseeds shall each have full
access to all materials filed and correspondence with the U.S.D.A., FDA and
other regulatory agencies in connection with the Cooperative Development Work
and each Product, and shall be entitled to use and rely on such materials with
respect to any regulatory approvals for a product sought by either, whether or
not such product relates to this Agreement.
7.9 Cooperation In Filings, Prosecution and Enforcement. Each party
agrees to take such action and execute such documents as shall be necessary or
appropriate for the filing of notices, certificates and acknowledgments of the
licenses granted and assignments made hereunder, for the prosecution of all
Joint Patents, and for the enforcement against third parties of all
intellectual property rights of STA arising under this Agreement. Each party
hereby grants to STA an irrevocable power-of-attorney coupled with an interest
to undertake such activities and to execute and file all instruments necessary
or appropriate in connection with such activities.
8. Prosecution Of Patent Rights.
8.1 Agritope Patents. Agritope shall have the right, but no
obligation, to timely prepare, file, prosecute and maintain, under its
exclusive control and at its expense, Agritope Patents.
8.2 Sunseeds Patents. Sunseeds shall have the right, but no
obligation, to timely prepare, file, prosecute and maintain, under its
exclusive control and at its expense, Sunseeds patents.
8.3 Joint Patents. STA shall employ counsel acceptable to Agritope and
Sunseeds for the purpose of timely preparing, filing, prosecuting and
maintaining Joint Patents. The reasonable expenses of preparing, filing,
prosecuting and maintaining corresponding Joint Patents shall be borne by STA.
8.4 Prior Art; Review And Comment. Agritope and Sunseeds shall each
cooperate with the other to ensure that all prior art that is pertinent to the
examination of a Joint Patent is brought to the attention of the other party.
Each of the parties shall have the right to review and comment on substantive
documents prepared in connection with the preparation, filing, prosecution and
maintenance of the Joint Patents prior to the filing of such papers; however,
such review and comment shall be performed expeditiously so as not to
negatively affect patent rights.
9. Trademarks.
No party to this Agreement shall have the right to use any trademark of
any other party without such party's prior written consent.
10. Confidential Information.
10.1 Confidentiality Agreement. The use and disclosure of proprietary
information shall be governed by the attached Schedule A Non-Disclosure
Agreement. The Schedule A Non-Disclosure Agreement shall survive termination
of this Agreement.
10.2 Use Of Consultants. The parties contemplate that from time to time
during the term of this Agreement third party technical consultants may be
employed by either party in connection with the development of Products. The
parties agree that information designated as confidential may be disclosed to
such consultants provided that the other party is given reasonable notice of
the circumstances and nature of the intended disclosure and that the
disclosure is limited to information necessary to enable the technical
consultant to provide technical consulting services. The consultant will be
required to sign an agreement committing the consultant to protect such
confidential information.
11. Reports.
11.1 Quarterly Sales Reports. Each monthly payment made to STA under
Section 6 shall be accompanied by a full and accurate accounting by A&W. Each
such report shall include at least the following information for each type of
Product as to each country during the month:
(a) The gross invoice price of each variety of Product shipped;
(b) The applicable deductions from such invoice price to yield
Net Sales for each variety of Product shipped; and
(c) Computation of the sharing payment due to STA pursuant to
Section 6.1 of this Agreement.
11.2 Cost Of Goods. Sunseeds will furnish to STA, and STA will furnish
A&W, reports on such party's Cost of Goods for seed Product shipped to such
party.
12. Books And Records.
12.1 Records. Each party shall keep full and accurate books of account
containing all particulars that may be necessary for the purpose of
calculating all amounts owing to the other parties. Books of account
maintained by the parties shall be kept at their principal place of business.
All such reports and data shall be open for inspection on a confidential basis
at all reasonable times and either Party may conduct at its own expense, once
every year during normal business hours through an independent certified
public accountant, an examination of the accounts contemplated above. If any
audit shall show that the selling party underpaid the amounts due under this
Agreement herein as to the period subject of the audit, then the party which
underpaid shall immediately pay such deficiency with interest thereon in
accordance with Section 12.3. If the underpayment shall exceed five percent
(5%) of the amount owed for any calendar year, the party underpaying shall
also reimburse the other for costs related to such audit.
12.2 Retention. Books and records required to be maintained by the
Parties hereunder shall be retained for at least three (3) years from the date
of the payment to which they pertain.
12.3 Interest. All payments due hereunder that are not paid when due
and payable hereunder shall bear interest at an annual rate equal to 4% (four
percent) above the U.S. dollar reference rate ("prime rate") charged from time
to time by Bank of America N.T. & S.A. from the date due until paid or at such
lower rate as shall be the maximum rate permitted by law.
13. Term.
This Agreement shall continue so long as any Product is being developed
or marketed under this Agreement, unless terminated earlier pursuant to
Section 14.
14. Breach.
14.1 Material Breach. STA may terminate this Agreement as to any party
for any material breach by such party of this Agreement or the Operating
Agreement thirty (30) days after providing the other party with written
details of the breach if the breach remains uncured at the end of the thirty
(30) day notice period. Any party may terminate its obligations under this
Agreement for any material breach by STA thirty (30) days after providing STA
with written details of the breach if the breach remains uncured at the end of
such thirty (30) day notice period. In the event of any such termination as
to a party, except arising from a material breach by STA, such party shall
immediately deliver to STA all information and work in process developed under
the Cooperative Development Work.
15. Representations And Indemnities.
15.1 Agritope Representations. Agritope represents and warrants that as
of the Effective Date:
(a) It has granted no prior license or assignment of rights under
the Agritope Patents in the Field.
(b) There are no foreign or United States administrative,
judicial or Patent and Trademark Office proceedings contesting the
inventorship or ownership of any Agritope Patent that is likely to be embodied
or used in a Product;
(c) Neither the execution and delivery of this Agreement, nor the
performance of the obligations of Agritope hereunder shall result in a
violation, breach or event of default (or any event or condition which with
notice or the passage of time or both would constitute an event of default) of
or with respect to any agreement, mortgage, indenture or order of any court of
competent jurisdiction binding upon Agritope or upon the property of Agritope;
(d) It is party to no contract materially adverse to the
obligations undertaken and rights granted in this Agreement;
(e) It holds a patent to the SAMase gene and has obtained a
license to the binary vector system to be used in developing the Product; it
has consulted with patent counsel concerning the patent rights of third
parties and, to the best of its knowledge, it is free to operate using its
technology as contemplated in this Agreement without infringement of the
rights of third parties. There is no assurance, however, that rights of third
parties will not impinge on such freedom to operate.
EXCEPT AS SET FORTH IN THIS SECTION 15.1, AGRITOPE MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF NON-INFRINGEMENT.
15.2 Agritope Indemnification -- Representations And Warranties.
Agritope shall indemnify STA for any losses sustained or expenses incurred by
STA as a result of a breach by Agritope of any of the foregoing
representations and warranties.
15.3 Sunseeds Representations. Sunseeds represents and warrants to STA
that as of the Effective Date:
(a) It has granted no prior license or assignment of rights under
the Sunseeds Patents that would materially impair its ability to develop,
manufacture or sell Products.
(b) There are no foreign or United States administrative,
judicial or Patent and Trademark Office proceedings contesting the
inventorship or ownership of any Sunseeds Patent that is likely to be embodied
or used in a Product.
(c) Neither the execution and delivery of this Agreement, nor the
performance of the obligations of Sunseeds hereunder shall result in a
violation, breach or event of default (or any event or condition which with
notice or the passage of time or both would constitute an event of default) of
or with respect to any agreement, mortgage, indenture, or order of any court
of competent jurisdiction binding upon Sunseeds or upon the property of
Sunseeds.
(d) It is party to no contract materially adverse to the
obligations undertaken in this Agreement.
(e) It owns all rights in the tomato varieties and germplasm to
be used in developing the Product; it has consulted with patent counsel
concerning the patent rights of third parties and, to the best of its
knowledge, it is free to operate using its technology as contemplated in this
Agreement without infringement of the rights of third parties. There is no
assurance, however, that rights of third parties will not impinge on such
freedom to operate.
EXCEPT AS SET FORTH IN THIS SECTION 15.3, SUNSEEDS MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF NON-INFRINGEMENT OF THE RIGHTS OF THIRD PARTIES.
15.4 Sunseeds Indemnification -- Representations And Warranties.
Sunseeds shall indemnify STA for losses sustained or expenses incurred by STA
as a result of a breach by Sunseeds of the foregoing representations and
warranties.
15.5 A&W Representations. A&W represents and warrants to STA that as of
the Effective Date:
(a) Neither the execution and delivery of this Agreement, nor the
performance of the obligations of A&W hereunder shall result in a violation,
breach or event of default (or any event or condition which with notice or the
passage of time or both would constitute an event of default) of or with
respect to any agreement, mortgage, indenture, or order of any court of
competent jurisdiction binding upon A&W or upon the property of A&W.
(b) It is party to no contract materially adverse to the
obligations undertaken in this Agreement.
EXCEPT AS SET FORTH IN THIS SECTION 15.5, A&W MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
15.6 A&W Indemnification -- Representations And Warranties. A&W shall
indemnify STA for losses sustained or expenses incurred by STA as a result of
a breach by A&W of the foregoing representations and warranties.
15.7 STA Warranty Disclaimer. STA MAKES NO REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF NON-INFRINGEMENT OR
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
16. Infringement; Third Party Licenses.
16.1 Defense Of Third Party Infringement Suits. In the event that a
third party shall make any claim or xxx any party alleging that the production
or sale of a Product (including, without limitation, seeds), infringes a
patent of such third party, then STA shall have the option to control the
defense of such suit. The parties shall provide reasonable cooperation in the
defense of such suit and furnish all evidence in their control. All
attorneys' fees as well as any judgments, settlements, or damages payable with
respect to such claim or suit shall be the responsibility of STA.
Notwithstanding the foregoing, if the claim or suit alleges that the third
party's rights are infringed solely by technology licensed to STA by one of
the three other parties to this Agreement, such party will indemnify, hold
harmless and defend the other two of such parties from and against any
judgments, settlements or damages they may be required to pay with respect to
such suit. The indemnifying party will have the sole right to control the
defense of such claim or suit. No party shall enter into any settlement that
materially affects the other party's rights or interests without such other
party's prior written consent, which consent shall not be unreasonably
withheld.
16.2 Suits For Infringement By Others. In the event any party becomes
aware of any actual or threatened infringement in the Field of the Agritope
Licensed Patents or the Agritope Licensed Know-How, or the Sunseeds Licensed
Patents or Sunseeds Licensed Know-How, that party shall promptly notify STA
and STA shall determine the most appropriate action to take. In the event STA
does not take action against such alleged infringer within a reasonable
period, not to exceed one hundred eighty (180) days, the owner of such patent
rights or know-how shall be entitled to take action against the alleged
infringer.
16.3 Third Party Licenses. In the event that STA determines that it is
necessary or advisable to obtain a license from a third party with respect to
development, production or sale of Products, Agritope, Sunseeds and A&W will
make equal contributions to the capital of STA to pay the amount of any lump
sum license fee payable to such third party and the Applicable Royalty
Percentage will be increased by the amount of royalty payable to such third
party on the sale of Products.
17. General.
17.1 Entire Agreement. This Agreement, the Operating Agreement and the
Schedules hereto and thereto contain the entire agreement between the parties
relating to the subject matter hereof and all prior understandings,
representations and warranties between the parties are superseded; provided,
however, that this Agreement does not limit any agreement restricting
disclosure or use of confidential or proprietary information previously
entered into between the parties. None of the terms of this Agreement shall
be deemed to be waived or amended by any party unless such a waiver or
amendment specifically references this Agreement and is in writing signed by
the party to be bound.
17.2 Relationship Of Parties. Each party acknowledges that it is not an
agent of any other party to this Agreement and has no authority to speak for,
represent, or obligate such other party in any way (except in the case of
Agritope, acting in its capacity as Manager of STA). This Agreement does not
and shall not be deemed to create any relationship of a joint venture or a
partnership.
17.3 Severability. The parties do not intend to violate any public
policy or statutory or common law. However, if any sentence, paragraph,
clause or combination of this Agreement is in violation of any law or is found
to be otherwise unenforceable by a court from which there is no appeal, or no
appeal is taken, such sentence, paragraph, clause, or combination of the same
shall be deleted and the remainder of this Agreement shall remain binding,
provided that such deletion does not alter the basic structure of this
Agreement. In such event, the parties shall renegotiate this Agreement in
good faith, but should such negotiations not result in a new agreement with
ninety (90) days of the initiation of such negotiations, then this Agreement
may be terminated by any party by thirty (30) days notice to the other.
17.4 Force Majeure. Any party shall be excused from the performance of
its obligations under this Agreement and shall not be liable for damages to
the other if such performance is prevented by circumstances beyond its
effective control. Such excuse from performance shall continue so long as the
condition responsible for such excuse continues and for a thirty (30) day
period thereafter. For the purposes of this Agreement, circumstances beyond
the control of a party which excuse that party from performance shall include,
but shall not be limited to, acts of God, acts, regulations or laws of any
government including currency controls, war, civil commotion, commandeer,
destruction of facility or materials by fire, earthquake, storm or other
casualty, labor disturbances, judgment or injunction of any court, epidemic,
and failure of public utilities or common carrier.
17.5 Notices. All notices and demands required or permitted to be given
or made pursuant to this Agreement shall be in writing and shall be effective
when personally given or made or when placed in an envelope and deposited in
the United States certified mail postage prepaid, return receipt requested,
addressed as follows:
If to STA: If to Agritope, in care of:
c/o Agritope, Inc. Agritope, Inc.
0000 XX Xxxxxxxxx Xx. 0000 XX Xxxxxxxxx Xx.
Xxxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer Attention: Chief Executive Officer
with a copy to: with a copy to:
Xxxxxx X. Xxxxx Xxxxxx X. Xxxxx
Xxxxxx Godward Xxxxxx Xxxxxxxxx Xxxxxx Godward Xxxxxx Xxxxxxxxx
& Xxxxx & Xxxxx
One Maritime Plaza, 20th Floor Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000 Xxx Xxxxxxxxx, XX 00000-0000
If to Sunseeds: If to A&W:
Sunseeds Company Xxxxxx and Xxxxxxxxxx Sales Company,
00000 Xxxxxx Xxxx. Xxx.
Xxxxxx Xxxx, XX 00000 0000 Xxxxxxx Xxxxx
Attention: Chief Executive Officer Xxx Xxxxx, XX 00000
Attention: Chief Executive Officer
or to such other address as to which either party may notify the other.
17.6 Binding. This Agreement shall be binding upon and inure to the
benefit of the parties, their successors and assigns. This Agreement shall be
assignable: (1) by either party without the consent of the other to any
Affiliate of the party or more of the voting securities); (2) by either party
with the written consent of the other; or (3) by either party without the
consent of the other in connection with the purchase of substantially all the
assets of its business to which this Agreement relates. Any attempted
assignment which does not comply with the terms of this Section shall be void.
17.7 Governing Law. This Agreement is deemed to have been executed in
and shall be governed by and construed according to the laws of the State of
California.
17.8 Arbitration. Any disputes under this Agreement will be resolved
by binding arbitration in San Francisco, California, in accordance with the
commercial arbitration rules of the American Arbitration Association. Full
discovery will be accorded in accordance with the California Code of Civil
Procedure. The parties shall bear equally the costs and fees of the
arbitration; however, the arbitrator shall be authorized to determine whether
a party is the prevailing party, and if so, to award to that prevailing party
reimbursement for its reasonable attorneys' fees, disbursements (including,
for example, expert witness fees and expenses, photocopy charges, travel
expenses, etc.), and costs arising from the arbitration.
In Witness Whereof, this Agreement is signed by duly authorized
representatives of each party as of the Effective Date.
SUPERIOR TOMATO ASSOCIATES, L.L.C. AGRITOPE, INC.
By: Agritope, Inc.
Its Manager
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxx
President/CEO President/CEO
Date: February 19, 1996 Date: February 19, 1996
XXXXXX AND XXXXXXXXXX SALES COMPANY,
SUNSEEDS COMPANY INC.
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxxxx
President/CEO Pres.
Date: February 29, 1996
Date: February 21, 1996
Exhibit A
NON-DISCLOSURE AGREEMENT
(MUTUAL DISCLOSURE)
This Agreement is incorporated by reference in the Development and Marketing
Agreement by and among, Superior Tomatoes Association, L.L.C. ("STA"),
Agritope, Inc., Sunseeds, Inc. and Xxxxxx and Xxxxxxxxxx Sales Company, Inc.
to assure the protection and preservation of the confidential and or
proprietary nature of information to be disclosed or made available to each
other in connection with the activities under such Development and Marketing
Agreement and the business of STA.
Whereas, the parties desire to assure the confidential status of the
information which may be disclosed to each other;
Now Therefore, in reliance upon and in consideration of the following
undertakings, the parties agree as follows:
1.Subject to the limitations set forth in Paragraph 2, all information
disclosed to another party to this Agreement shall be deemed to be
"Proprietary Information." The term "Proprietary Information" shall include
trade secrets, confidential knowledge, data or any other proprietary
information. By way of illustration but not limitation, "Proprietary
Information" includes (a) inventions, trade secrets, ideas, processes,
formulas, source and object codes, data, programs, other works of authorship,
compounds, cell lines, know-how, improvements, discoveries, developments, test
results, designs and techniques; and (b) information regarding plans for
research, development, new products, marketing and selling, business plans,
budgets and unpublished financial statements, licenses, prices and costs,
suppliers and customers; and information regarding the skills and compensation
of employees of a party.
2.The term "Proprietary Information" shall not be deemed to include
information which the receiving party can demonstrate by competent written
proof: (i) is now, or hereafter becomes, through no act or failure to act on
the part of the receiving party, generally known or available; (ii) is known
by the receiving party at the time of receiving such information as evidenced
by its records; (iii) is hereafter furnished to the receiving party by a third
party, as a matter of right and without restriction on disclosure; or (iv) is
independently developed by the receiving party without any breach of this
Agreement.
3.Each party shall maintain in trust and confidence and not disclose to any
third party, or use for any purpose other than activities under such
Development and Marketing Agreement and the business of STA, any Proprietary
Information received from the other party. Proprietary Information shall not
be used for any purpose or in any manner that would constitute a violation of
any laws or regulations, including without limitation the export control laws
of the United States. No other rights or licenses to trademarks, inventions,
copyrights, or patents are implied or granted under this Non-Disclosure
Agreement.
4.Proprietary Information supplied shall not be reproduced in any form except
as required to accomplish the intent of this Agreement.
5.The responsibilities of the parties are limited to using their reasonable
and best efforts to protect the Proprietary Information received with the same
degree of care used to protect their own Proprietary Information from
unauthorized use or disclosure. Each party shall advise its employees or
agents who might have access to such Proprietary Information of the
confidential nature thereof. No Proprietary Information shall be disclosed to
any officer, employee or agent of either party who does not have a need for
such information.
6.All Proprietary Information (including all copies thereof) shall remain the
property of the disclosing party, and shall be returned to the disclosing
party after the receiving party's need for it has expired, or upon request of
the disclosing party, and in any event, upon completion or termination of
this Agreement.
7.Notwithstanding any other provision of this Agreement, disclosure of
Proprietary Information shall not be precluded to the extent such disclosure
is required to be disclosed by the Receiving Party by judicial action provided
that the receiving party shall immediately notify the disclosing party of any
such action and the disclosing party shall have the opportunity to pursue all
reasonable legal remedies to maintain such information in secret.
8.This Agreement shall continue in full force and effect for so long as the
parties continue to exchange Proprietary Information. The termination of this
Agreement shall not relieve either party of the obligations imposed by this
Agreement with respect to Proprietary Information disclosed prior to the
effective date of such termination, and the provisions of these paragraphs
shall survive the termination of this Agreement.
9.This Agreement shall be governed by the laws of the State of California as
those laws are applied to contracts entered into and to be performed entirely
in California by California residents.
10.This Agreement contains the entire agreement of the parties concerning use
and protection of Proprietary Information and may not be changed, modified,
amended or supplemented except by a written instrument signed by each party.
11.Each party hereby acknowledges and agrees that in the event of any breach
of this Agreement by another party, including, without limitation, the actual
or threatened disclosure of a disclosing party's Proprietary Information
without the prior express written consent of the disclosing party, the
disclosing party will suffer an irreparable injury, such that no remedy at law
will afford it adequate protection against, or appropriate compensation for,
such injury. Accordingly, each party hereby agrees that such other party shall
be entitled to specific performance of a receiving party's obligations under
this Agreement, as well as such further injunctive relief as may be granted by
a court of competent jurisdiction.
