TERMINATION AGREEMENT AND MUTUAL GENERAL RELEASE
Exhibit
99.01
TERMINATION
AGREEMENT AND
MUTUAL
GENERAL RELEASE
This
Termination Agreement and Mutual General Release (the “Agreement”) made this
11th day of July, 2007, is entered into by and between Progressive BioActives,
Inc. (hereinafter “PBI”), a Canadian Federally registered business,
which has a principal place of business at 00 Xxxxx Xxxxxx, Xxxxxxxxxxxxx,
Xxxxxx Xxxxxxx Xxxxxx, Xxxxxx and BioAgra, LLC (hereinafter “BioAgra”), a
Georgia, USA limited liability company. (PBI and BioAgra are
hereinafter collectively referred to as the “Parties” and individually referred
to as a “Party”).
Recitals
WHEREAS,
on or about April 15, 2005, the Parties entered into a Technology License
Agreement, a copy of which is attached hereto as Exhibit 1 (PBI was incorrectly
referred to therein as Progressive Probiotics, Inc.);
WHEREAS,
the Parties wish to terminate the Technology License Agreement by mutual consent
as provided in Paragraph 2.2(a) of that Agreement;
WHEREAS,
on June 18, 2007, the Parties entered into a Memorandum Agreement regarding
the
termination of the Technology License Agreement; and
WHEREAS,
this Agreement is intended to more fully set out the terms and conditions for
terminating the Technology License Agreement and is intended to supercede the
Memorandum Agreement.
NOW
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, the Parties hereby agree as follows:
Agreement
1. Termination
of Technology License Agreement. Pursuant to Paragraph 2.2(a) of
the Technology License Agreement, the Parties hereby mutually consent to the
termination of the Technology License Agreement under the terms and conditions
set forth herein. Such termination is and shall be effective as of
June 18, 2007.
2. Termination
Payments. As consideration for termination of the Technology
License Agreement, BioAgra agrees to pay to PBI 2.5% of its Gross Sales of
Beta
Glucan Products from July 1, 2007 through June 30, 2017. BioAgra
shall make the termination payments on a monthly basis into an escrow account
to
be established by separate agreement of the Parties. The monthly
payments shall be made on or before the 15th of the
month,
beginning August 15, 2007, for BioAgra’s sales of Beta Glucan Products in the
prior month. The escrowed funds shall be distributed by the escrow
agent to PBI quarterly by the 30th of the
month
following the end of the quarter. The first quarter shall end on
September 30, 2007, with the first quarterly distribution due and owing on
October 30, 2007. At the time of each quarterly distribution of
escrow funds, BioAgra shall also provide a written statement to PBI, or its
designated representative, setting forth the Gross Sales of Beta Glucan Products
for the prior quarter. “Beta Glucan Products” shall mean yeast
derived, insoluble beta-1,3/1,6-D-glucan. “Gross Sales” shall mean
all sales, less amounts allowed or credited due to returns, and less any amounts
paid for sales commissions and taxes.
PBI,
upon
reasonable notice, shall have the right to conduct an audit of the relevant
sales and payment records of BioAgra to verify the accuracy of the termination
payments made. Audits shall be conducted at PBI’s expense, shall be
restricted to one per year, shall be at the offices of BioAgra during regular
business hours, and shall be limited to two business days. BioAgra
agrees to provide reasonable assistance to PBI to effectively perform any such
audit.
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BioAgra
agrees to pay a penalty equal to 1% of the monthly termination payment (i.e.
balance due), if it fails to make such monthly termination payment on or before
the 15th of the month for such termination payment. Such
penalty shall be added to the termination payment and delivered to the escrow
agent.
3. BioAgra’s
Right to Manufacture Beta Glucan. Subsequent to this Agreement,
BioAgra shall have the right to manufacture Beta Glucan Products utilizing
its
own intellectual property, methods and processes including all modifications
to
such methods and processes. PBI acknowledges that BioAgra declares
its methods and processes are independent of and separate from any patent or
other intellectual property rights of PBI, including without limitation, any
patent that may issue from U.S. Patent Application 10/711,980, PCT Application
PCT/CA2005/001605, and WO 2006/042403 A1, and any continuation,
continuation-in-part, or divisional applications based thereon, as may be
further limited by the prosecution of any such applications (the “PBI
Technology”). PBI also covenants not to xxx BioAgra, or any agent,
customer, affiliate, representative, distributor, or other person acting for
or
on behalf of BioAgra, for infringement of any current or future intellectual
property rights based on BioAgra’s use of such methods and processes or any
reasonable modifications thereof exclusive of any patent that may issue from
the
aforementioned.
4. PBI’s
Right to Manufacture Beta Glucan. Previous and subsequent to this
Agreement, PBI has and shall continue to have the right to
manufacture Beta Glucan Products utilizing its own PBI Technology, property,
methods, processes and all modifications to such. BioAgra covenants
not to xxx PBI, or any agent, customer, affiliate, representative, distributor,
or other person acting for or on behalf of PBI, for infringement of any current
or future intellectual property rights based on PBI’s use of the PBI Technology
(methods, processes or reasonable modifications thereof.
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5. BioAgra
Shall Have No Right to PBI Technology. Following the effective
termination date of the Technology License Agreement, BioAgra shall have no
right to use PBI Technology, data or results. BioAgra represents and
warrants that, upon termination of the Technology License Agreement, it will
not
utilize, and will not enable others to utilize, the PBI Technology property,
methods, knowhow, processes and all modifications to such.
6. BioAgra
Shall Return PBI Intellectual Property and Materials. BioAgra
agrees to return all PBI intellectual property provided and disclosed by PBI
and
its associated or related companies. Such intellectual property
includes, but is not limited to, drawings, designs, engineering specifications,
process flow, equipment lists, and items as disclosed in Exhibit A of the
Technology License Agreement. BioAgra shall also return to PBI all
sales and marketing materials provided by PBI and its associated or related
companies, including all materials relating to PBI’s studies, trials, and
testing of Beta Glucan. BioAgra also shall remove all PBI related
information from the BioAgra website or related websites. PBI shall
provide written instructions to BioAgra to assist in the implementation of
this
section. BioAgra shall make a reasonably diligent effort to return
all such materials to PBI and to remove all PBI materials from the BioAgra
website by July 31, 2007.
7. General
Release by PBI. PBI and its affiliates, generally and
unconditionally release, acquit and forever discharge BioAgra, and any and
all
current, former, and future successors, assigns, officers, directors,
shareholders, managers, employees, attorneys, agents, representatives,
affiliates, parent companies, subsidiaries, and customers from any and all
claims, defenses, demands, causes of action, liability, damages, costs and
expenses arising from or related to the subject matter of the Technology License
Agreement, which they have or may have up through and including the date of
execution of this Agreement, whether such claims are known or unknown,
discovered or undiscovered, anticipated or unanticipated, direct or indirect,
contingent or fixed. PBI is not releasing any right to enforce this
Agreement or to collect the termination payments set forth in Paragraph 2
above.
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8. General
Release by BioAgra. BioAgra generally and unconditionally
releases, acquits and forever discharges PBI and its current, former, and future
successors, assigns, officers, directors, shareholders, managers, employees,
attorneys, agents, representatives, affiliates, parent companies, subsidiaries,
and customers from any and all claims, defenses, demands, causes of action,
liability, damages, costs and expenses arising from or related to the subject
matter of the Technology License Agreement, which it has or may have up through
and including the date of execution of this Agreement, whether such claims
are
known or unknown, discovered or undiscovered, anticipated or unanticipated,
direct or indirect, contingent or fixed. BioAgra is not releasing any
right to enforce this Agreement.
9. No
Admission of Liability. By entering into this Agreement, no Party
is admitting liability to any other Party. Neither this Agreement,
the performance of any act referenced in this Agreement, the payment of any
money, any settlement offer, counter-offer, acceptance, nor any other
circumstance regarding this Agreement shall be considered an admission of
liability, fault, breach, or infringement.
10. BioAgra’s
Agreement Not to Compete. For a period of two (2) years beginning
on July 1, 0000, XxxXxxx agrees to use its best efforts not to pursue marketing
and sales of Beta Glucan Products in the field of livestock, companion animal,
and aquaculture in Canada, South Africa, Australia, Chile, and South
Korea. If BioAgra decides to enter such markets during the two-year
period beginning July 1, 2007, it shall provide written notice of such intention
to PBI to the address listed above, and both Parties agree to enter into good
faith discussions on how to handle BioAgra’s marketing activities in a mutually
beneficial manner. BioAgra also agrees to communicate this
non-compete provision to AHD International (“AHD”) and to use its best efforts
to obtain from AHD a commitment to honor this provision.
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11. Public
Announcement or Disclosure of Termination. Both Parties shall
jointly approve any public announcement or disclosure relating to this
Agreement, except to the extent that such disclosure is: (a) ordered
by a court of competent jurisdiction; (b) in response to a proper discovery
request and subject to a protective order prohibiting further disclosure or
use;
(c) as may be necessary to enforce their respective rights under this Agreement;
or (d) as otherwise required by law. Notwithstanding this provision,
the Parties and their counsel are free to disclose the fact that the Technology
License Agreement has been terminated by mutual consent of the
Parties.
12. Indemnification
by BioAgra. BioAgra agrees to indemnify and hold
PBI, its officers, directors, employees, agents, representatives and
shareholders harmless from any third-party claim arising from BioAgra’s sale of
Beta Glucan into the human nutrition, cosmetic and animal markets.
13. Correction
to Technology License Agreement. The Parties acknowledge and
agree that PBI was incorrectly referred to in the Technology License Agreement
as Progressive Probiotics, Inc., agree that PBI was a party to the Technology
License Agreement, and that PBI has the right to terminate the Technology
License Agreement as set forth herein.
14. Other
Provisions.
a. Entire
Agreement. This Agreement embodies the entire understanding of
the Parties with respect to the subject matter hereof, and supercedes all prior
discussions and agreements between them, including the Memorandum Agreement
dated June 18, 2007. No Party shall be bound by any conditions,
definitions, warranties, understandings or representations with respect to
the
subject matter hereof other than as expressly provided herein. No
oral explanation or oral information by a Party hereto shall alter the meaning
or interpretation of this Agreement. No modification, alteration,
addition or change in the terms hereof shall be binding on a Party unless
reduced to writing and duly executed by the Parties. The Parties represent
and
warrant that there are no other agreements, written or oral, between them with
respect to the subject matter of this Agreement that are not incorporated
herein.
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b. Covenant
Regarding Present and Future Litigation. With
respect to claims released under this Agreement, each Party agrees that it will
not hereafter, either directly or on behalf of any other person or entity,
(i)
commence, maintain, or prosecute any action or proceeding at law or otherwise,
(ii) assert any right of any nature, or (iii) assert any claims against the
other Party to this Agreement arising from the subject matter of the Technology
License Agreement, except to enforce the obligations set forth in this
Agreement. Each Party further represents and warrants that
it has not commenced any action or proceeding at law or otherwise based on
claims arising out of the subject matter of the Technology License Agreement,
or
any of the other facts set forth in the Recitals above, on its own behalf or
on
behalf of any other person or entity against any Party to this Agreement or
its
attorneys, directors, officers, employees, managers, parent companies,
subsidiaries, affiliates, agents, representatives, customers, predecessors,
successors, or assigns.
c. Acknowledgment
of Risk. It is understood by the Parties that
the facts with respect to which this Agreement is made may hereafter prove
to be
other than or different from the facts now known by any of them or believed
by
any of them to be true. Each of the Parties expressly accepts and
assumes the risk of the facts proving to be so different, and each of the
Parties agrees that all of the terms of this Agreement shall be in all respects
effective and not subject to termination or rescission by any such difference
in
facts.
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d. No
Reliance on Representations. Each of the
Parties acknowledges that (i) the other Party has not made any representations,
warranties, or promises, except those specifically set forth in this Agreement,
which have induced the Party to enter into this Agreement; (ii) it has not
relied upon any representations, warranties, promises or conditions made by
the
other Party or the other Party’s attorneys, agents or representatives not
specifically set forth in this Agreement in entering into this Agreement; (iii)
it has executed this Agreement after independent investigation and without
fraud, duress or undue influence; and (iv) it has been independently represented
by legal counsel during the negotiation of this Agreement and has executed
this
Agreement after consulting with its own legal counsel.
e. Future
Legal Developments Not to Apply. The Parties
agree that subsequent changes in state or federal law, through legislation
or
judicial interpretation, which create or find additional or different rights
and
obligations of the Parties, shall not affect this Agreement.
f. Execution
of Other Documents and Further Acts. In
addition to the acts recited in this Agreement to be performed by each of the
Parties, each Party agrees to perform or cause to be performed all further
acts
and to execute or cause to be executed promptly all documents and instruments
necessary to give effect to each term of this Agreement.
15. g. Indemnification. Any
Party that breaches a promise, warranty or representation contained in this
Agreement agrees to indemnify and hold the other Party harmless from and against
any liability, loss, judgment, settlement, costs, or expense (including without
limitation reasonable attorneys’ fees) resulting from, arising out of, or
occasioned by such breach of promises, warranty or
representation. PBI is not releasing any right to enforce this
Agreement or to collect the termination payments set forth in Paragraph 2
above.
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h. Authority
of Signatories. The Parties warrant that the
representatives signing this Agreement are who they purport to be, that each
holds the status disclosed in connection with his or her signature, and that
each is duly authorized to sign this Agreement
i. Non-Waiver. No
waiver of the breach of any of the provisions of this Agreement shall be a
waiver of any preceding or succeeding breach of the Agreement or any other
provisions of it.
j. This
Agreement may not be assigned by either Party without the prior written consent
of the other Party.
k. Construction. As
used herein, the masculine gender shall include the feminine and neuter, and
the
singular shall include the plural, wherever the context and facts require such
construction.
l. Execution
in Counterparts. This Agreement may be
executed in counterparts, all of which, when taken together, shall constitute
one agreement with the same force and effect as if all signatures had been
entered on one document.
m. Agreement
Drafted Jointly. This Agreement was drafted
jointly by the Parties. Therefore, in any legal interpretation of
this Agreement, the Agreement shall not be construed against either
Party.
n. Successors
and Assigns. This Agreement shall inure to
the benefit of and be binding upon each of the Parties and their respective
successors, assigns, heirs, executors, administrators and legal and personal
representatives.
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o. Headings. The
heading of the paragraphs of this Agreement are inserted for convenience only
and shall not be deemed to constitute a part hereof.
x. Xxxxxxxxx. If
any provision of this Agreement pursuant to the terms hereof shall be invalid
or
unenforceable to any extent, the remainder of this Agreement and any other
payments hereunder shall not be affected thereby and shall be enforceable to
the
greatest extent permitted by law.
q. Bankruptcy. The
parties agree that this agreement shall survive the bankruptcy or insolvency
of
BioAgra, LLC or Progressive BioActives, Inc. or any trustee in bankruptcy
of the
assets of BioAgra LLC or Progressive BioActives, Inc., and shall continue
to be
bound by BioAgra, LLC and Progressive BioActives, Incorporated's obligations
under this agreement.
r. Forum
Selection. The Parties agree that any action to enforce the terms
of this Agreement shall be filed in an appropriate court in the State of
Kentucky, USA.
s. Governing
Law. This Agreement shall be governed by the laws of the State of
Kentucky, USA.
t. Electronic
Signatures. The Parties may sign this Agreement and transmit the
executed copy by electronic means, including facsimile or noneditable *.pdf
files. The electronic copy of the executed Agreement is and shall be
deemed an original signature for this Agreement.
u. Agreement
to Be Bound. THE PARTIES HEREBY ACKNOWLEDGE THAT THEY HAVE READ
THIS AGREEMENT, UNDERSTAND THE AGREEMENT, HAVE HAD A REASONABLE OPPORTUNITY
TO
CONSULT LEGAL COUNSEL, AND AGREE TO BE BOUND BY THE TERMS AND CONDITIONS OF
THE
AGREEMENT.
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IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date set
forth in the first page of this Agreement.
PROGRESSIVE
BIOACTIVES, INC.
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By:
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Name:
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Title:
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BIOAGRA,
LLC
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By:
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Name:
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Title:
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11
Schedule
I
Technology
License Agreement
