EXHIBIT 10.4
STRATEGIC ALLIANCE AGREEMENT
THIS AGREEMENT is made as of the 8th day of April, 2004 (the "Effective
Date"), by and between XXXXXX-XXXXXXX-MIDLAND COMPANY, a Delaware corporation
("ADM"), and XXXXXX SCIENCE INC., a Korean corporation ("EUGENE").
WITNESSETH
WHEREAS, ADM is engaged in the business of procuring and processing
fatty acid distillate ("Distillate") into, among other things, products
containing sterols and steryl esters using multiple technologies, and marketing
those products worldwide; and
WHEREAS, EUGENE is engaged in the business of producing and marketing
products containing sterols and steryl esters utilizing EUGENE proprietary
technology (the "XXXXXX Products"); and
WHEREAS, the parties desire to enter into a strategic alliance
involving the procurement of Distillate, the procurement and sale of sterols and
the sale and distribution of EUGENE Products, all pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, it is agreed as follows:
1. Term
(a) The term of this Agreement commence on the Effective Date, and
shall continue for an initial term of five (5) years from the date ADM commences
offering one or more EUGENE Products for commercial sale unless earlier
terminated as hereinafter provided. After the initial term, this Agreement shall
be automatically renewed for successive one (1) year periods unless and until
terminated as hereinafter provided. The initial term and each of the successive
renewal terms, if any, are hereinafter referred to as the "Term".
(b) Notwithstanding anything to the contrary, either party may
terminate this Agreement, without liability, at the end of the initial term or
any renewal term by providing the other party with at least ninety (90) days
advance written notice prior to the end of such term.
(c) Upon the happening of any one or more of the following events,
in addition to all other rights and remedies available to it, either party shall
have the right to cancel and terminate this Agreement immediately by written
notice to the other party:
(i) The failure of the other party to perform or comply
with any one or more of any of the terms or
conditions of this Agreement and the failure to cure
such failure within thirty (30) days from receiving
written notice of such failure;
(ii) The insolvency of the other party; or the assignment
by the other parry for the benefit of creditors; or
the filing of a voluntary or involuntary bankruptcy,
judicial liquidation, or reorganization petition by
or against the other party; or the appointment of a
receiver, liquidator or judicial administrator, or a
trustee for either party, of any part or interest of
its business; or the failure of either party to
vacate, set
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aside or have dismissed any insolvency proceeding
under any law governing, or in effect for, the
Territory, within sixty (60) days from the date of
the commencement of any such proceeding; or the
dissolution of the entity of the other party for any
cause whatsoever; or the suspension of check/note
clearance privilege;
(iii) The failure to commence the sales of EUGENE Products
to any customers in the Territory within one year
after obtaining final regulatory approval to market
the XXXXXX Products.
2. RIGHTS AND OBLIGATIONS UPON TERMINATION
(a) Neither party shall be liable for compensation or
consequential damages of any kind, whether on account of the loss of present or
prospective profits, or anticipated sales, expenditures, investments, or
commitments made in connection with-this Agreement.
(b) The parties shall abide by and uphold any rights or
obligations accrued or existing on the date of such termination.
(c) For a period of six (6) months after the expiration or earlier
termination of this Agreement, ADM shall have the right to sell its inventories
of EUGENE Products through its regular channels of distribution and upon terms
consistent with those offered before expiration or termination.
3. PROCUREMENT OF DISTILLATE Subject to the terms and conditions
set forth in this Agreement, ADM shall and hereby does appoint EUGENE as its
exclusive agent to purchase Distillate from vegetable oil refining in. Korea. As
needed in ADM's discretion. ADM shall inform EUGENE of the price,
specifications, terms and conditions upon which ADM is willing to purchase
Distillate. EUGENE shall use commercially reasonable efforts and diligence to
purchase Distillate at or below the price requested by ADM, conforming with the
specifications, terms and conditions requested by ADM. To the extent EUGENE is
able to source such Distillate, EUGENE shall procure such Distillate for
EUGENE's account. EUGENE shall then sell such Distillate to ADM at the price
requested by ADM, conforming with the specifications, terms and conditions
requested by ADM. To the extent EUGENE is able to procure the Distillate at a
price lower than requested by ADM, EUGENE shall retain such margin for its
account. In addition, the parties may mutually agree upon a commission payable
from ADM. to EUGENE for procuring Distillate pursuant to this section ADM will
remit payment to EUGENE by wire transfer of irrevocable funds within one (1)
business day of receiving the faxed documents outlined in ADM's request, which
will include, but is not necessarily limited to, xxxx of lading, invoice, kosher
certificate and wash certificates. ADM shall reserve for EUGENE the
equivalent-quantity of sterols (finished product basis) in the Distillate that
EUGENE procured for ADM for sale to EUGENE pursuant to Section 4 below.
4. STEROL SUPPLY For EUGENE Products sold in North America and
Europe, EUGENE shall purchase all of its requirements for sterols from ADM, The
contract with respect to any such sale shall consist of this Agreement, plus
EUGENE'S purchase order, and ADM'S sales confirmation and/or invoice; however,
any provisions in EUGENE'S purchase order or ADM'S sales confirmation and/or
invoice that are inconsistent with the provisions of this Agreement shall be of
no force or effect. The terms and conditions shall include those set forth
below:
(a) PRICE The price for sterols sold hereunder shall be ADM's
weighted average resale price of sterols and sterol steryl esters (on a pure
sterol basis deducting processing costs of intersterification) for food
applications and pharmaceutical applications (the "ADM's Weighted Average Sterol
Price"). The price shall be set at the commencement of the Term using ADM's
Weighted Average
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Sterol Price for the immediately preceding six-month period, and shall be
adjusted each six months based upon ADM's Weighted Average Sterol Price for the
immediately preceding six month period.
(b) LIMITATIONS The sterols sold hereunder are for EUGENE's
internal use for the production of EUGENE Products, and are not for resale. To
the extent EUGENE requires sterols for resale to third parties in Korea, Eugene
would purchase all of its requirements from ADM upon the terms and conditions
set forth herein, except for the price, which is to be mutually agreed.
(c) RELEASE To the extent EUGENE requires quantities of sterols
hereunder in excess of the amounts reserved for EUGENE pursuant to Section 3
above, and ADM is unable to supply such quantities, EUGENE may purchase such
sterols from a third party.
(d) DELIVERY The product shall be sold CIF Busan. All
interpretation of the delivery terms shall be in accordance with the Incoterms,
latest edition.
(e) PAYMENT ADM shall invoice EUGENE for sterols purchased, and
EUGENE shall make payment within 45 days of shipment.
(f) ORDERS EUGENE shall place all orders in writing for sterols at
least 30 days prior to the date of shipment. Orders shall set out the quantity
of product desired, any special instructions and the requested date product
should be available. EUGENE shall order sterols in approximately equal amounts
each month during the Term.
(g) WEIGHTS ADM's weights shall govern settlement; provided,
however, if any substantial discrepancy with EUGENE's weights exists, the
parties shall attempt in good faith to resolve the same.
(h) WARRANTIES; INDEMNIFICATION ADM warrants that the sterols
shall conform to the specifications set forth in Schedule A, attached hereto.
EXCEPT AS SET FORTH IN THIS PARAGRAPH, SELLER MAKES NO WARRANTIES, WHETHER
EXPRESS OR IMPLIED. THE IMPLIED WARRANTIES OF MERCHANTABILITY, IMPLIED WARRANTY
OF FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT ARE HEREBY DISCLAIMED.
IN NO EVENT WHATSOEVER SHALL EITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL,
SPECIAL OR INCIDENTAL DAMAGES UNDER ANY TORT, CONTRACT, STRICT LIABILITY OR
OTHER LEGAL OR EQUITABLE THEORY, EVEN IF SAID PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF OR COULD HAVE FORESEEN SUCH DAMAGES.
5. DISTRIBUTION OF EUGENE PRODUCTS Subject to the terms and
conditions set forth in this Agreement, EUGENE shall and hereby does appoint ADM
as the exclusive distributor of the EUGENE Products for shipment and sale to
customers in North America and Europe (the "Territory"). ADM shall and hereby
does accept such appointment. The terms of such appointment are as follows:
(a) PRE-COMMERCIALIZATION ADM shall use commercially reasonable
efforts and diligence to proceed with the regulatory approval, promotion,
marketing and sale of the XXXXXX Products in the Territory. As part of such
efforts, ADM shall pursue regulatory approval and conduct a review of
intellectual property rights in the Territory. These expenses ADM incurs and
other expenses ADM incurs related to preparing for the commercial sale of the
XXXXXX Products in the Territory, and that are pre-approved by EUGENE, such
approval not to be unreasonably withheld, shall be defined as
"Pre-Commercialization Expenses." As further set forth below, EUGENE shall
reimburse ADM for one-half of the Pre-Commercialization Expenses. In the event,
ADM has not been reimbursed for one-half of the Pre-
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Commercialization Expense pursuant to the method set forth below, then EUGENE
shall promptly remit such unpaid amounts, including accrued interest, to ADM
unless the parties mutually agree to extend the period of repayment.
(b) PURCHASE OF PRODUCTS From time to time during the Term, ADM
may place purchase orders with EUGENE for the purchase of the XXXXXX Products,
and to the extent EUGENE has EUGENE Products available or capacity to produce.
EUGENE Products available, EUGENE shall accept such purchase orders. EUGENE
shall produce the XXXXXX Products at its production facility in Korea. The
contract with respect to any such sale shall consist of this Agreement, plus
ADM'S purchase order, and EUGENE'S sales confirmation and/or invoice; however,
any provisions in ADM'S purchase order or EUGENE'S sales confirmation and/or
invoice that are inconsistent with the provisions of this Agreement shall be of
no force or effect. The terms and conditions of such purchase and sale shall
include those set forth below:
(i) Price The price for EUGENE Products sold hereunder
shall be (y) 115% of EUGENE's cost of manufacture
calculated in accordance with Generally Accepted
Accounting Principles, as have been consistently
applied by EUGENE (the 'Transfer Price"), plus (z)
50% of ADM's net margin from the resale of EUGENE
Products less an amount described below for EUGENE's
one-half share of the Pre-Commercialization Expenses
(the "Bonus Price"). For purposes of this paragraph,
EUGENE's cost of manufacture shall only include
actual costs incurred by EUGENE for raw materials,
labor, depreciation of production facility, utilities
and overhead necessary for the production. For
purposes of this paragraph, ADM's net margin shall be
calculated by subtracting from ADM's gross margin any
expenses, including rebates, returns, commissions and
license fees payable to any third parties, but not
including any Pre-Commercialization Expenses. For
purposes of this paragraph, ADM's gross margin shall
equal the sales received from ADM's sale of EUGENE
Products less the Transfer Price, less freight, taxes
and duties. The amount to be deducted for EUGENE'S
one-half share of the Pre-Commercialization Expenses
shall be calculated by amortizing-one-half of the
Pre-Commercialization Expenses over a period of three
(3) years, accruing interest per annum at an interest
rate equal to the Prime Rate, as published in THE
WALL STREET JOURNAL, plus 3%, such rate to be
adjusted semi-annually.
(ii) DELIVERY The product shall be sold CIF US port or
European port to be mutually agreed. All
interpretation of the delivery terms shall be in
accordance with the Incoterms, latest edition.
(iii) PAYMENT EUGENE shall invoice ADM for the XXXXXX
Products purchased, and ADM shall make payment within
45 days of shipment.
(iv) ORDERS ADM shall place all orders in writing for
sterols at least 60 days prior to the date of
shipment. Orders shall set out the quantity of
product desired, any special instructions and the
requested date product should be available.
(v) WEIGHTS EUGENE'S weights shall govern settlement;
provided, however, if any substantial discrepancy
with ADM's weights exists, the parties shall attempt
in good faith to resolve the same.
(vi) WARRANTIES; INDEMNIFICATION EUGENE warrants that the
XXXXXX Products shall conform to the specifications
set forth in Schedule B, attached hereto. EXCEPT AS
SET FORTH IN THIS PARAGRAPH, SELLER MAKES NO
WARRANTIES, WHETHER EXPRESS OR IMPLIED. THE IMPLIED
WARRANTIES OF MERCHANTABILITY
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IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE
AND NON-INFRINGEMENT ARE HEREBY DISCLAIMED. IN NO
EVENT WHATSOEVER SHALL EITHER PARTY SHALL BE LIABLE
FOR ANY CONSEQUENTIAL, SPECIAL OR INCIDENTALDAMAGES
UNDER ANY TORT, CONTRACT, STRICT LIABILITY OR OTHER
LEGAL OR EQUITABLE THEORY, EVEN IF SAID PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF OR COULD HAVE
FORESEEN SUCH DAMAGES.
(c) TRADEMARKS ADM may, but shall have no obligation, to, use the
tradenames, trademarks or get-up of EUGENE in connection with the sale of the
XXXXXX Products.
6. LICENSE TO XXXXXX TECHNOLOGY In the event EUGENE is unable to
supply the volume of EUGENE Products required by ADM for distribution in the
Territory from its facility in Korea, upon request by ADM. EUGENE shall be
deemed to have granted to ADM a license on the terms and conditions set forth
below:
(a) LICENSE GRANT For the Term, and subject to the terms and
conditions hereof, EUGENE hereby grants to ADM (i) a sole and exclusive right
and license, with the right to assign and sublicense, to the XXXXXX Technology
and Licensed Patents to manufacture, have manufactured on its behalf, import,
use, sell and offer to sell EUGENE Products in the Territory. EUGENE shall not
grant other licenses under the XXXXXX Technology or the Licensed Patents in the
Territory. Further, EUGENE does not retain any rights under the XXXXXX
Technology and the Licensed Patents to manufacture, have manufactured, use,
sell, offer for sale or import Eugene Products in the Territory.
(b) TECHNOLOgY TRANSFER EUGENE shall furnish to ADM copies of
EUGENE'S plans, drawings, schematics, manuals and other drawings related to the
manufacture of EUGENE Products utilizing the XXXXXX Technology and Licensed
Patents. EUGENE shall further provide support and assistance to ADM as may be
reasonably requested to transfer the XXXXXX Technology to ADM for purposes of
the license granted above.
(c) RUNNING ROYALTIES In consideration of the rights and licenses
granted to ADM by EUGENE under the License, ADM shall pay EUGENE a running
royalty ("Running Royalty") in United States dollars for each calendar quarter
equal to a percentage of Net Sales between 8% and 12%, the exact percentage to
be based upon the net sales price in a manner to be mutually agreed by the
parties. Running Royalties shall be paid by ADM to EUGENE within forty-five (45)
days after the close of the calendar quarter.
(d) ENFORCEMENT ADM if it so desires, shall have the right to
institute and prosecute any infringement action for the infringement of the
XXXXXX Technology and/or Licensed Patents against any third party at ADM's own
expense. In such event, and, in the event that such suit results in a favorable
determination for ADM, ADM shall be entitled to keep any and all monies received
from such third party infringer for infringement of the XXXXXX Technology and/or
Licensed Patents regardless of whether such monies are obtained by way of
judgment or by way of settlement. In any such infringement action brought by
ADM, EUGENE shall at ADM's request and subject to reimbursement by ADM for
EUGENE's reasonable out-of-pocket expense and management costs, cooperate with
ADM in all respects, and make available to ADM all relevant information and
witnesses who are employees or within the control of XXXXXX or its affiliates.
EUGENE shall join to the extent necessary in any infringement action instituted
by ADM.
(e) MAINTENANCE EUGENE may, at its expense, make such payments,
filings, and declarations in the relevant patent office necessary to keep the
Licensed Patents in effect. However, EUGENE shall not be required to do so. If
EUGENE determines, as it is entitled to do, that it does not
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wish to maintain one' or more of the Licensed Patents, EUGENE shall provide
'prompt written notice to ADM of the same so that ADM may take the necessary
action to keep such patents in effect. In that event, EUGENE shall, at ADM's
request, cooperate with ADM in all respects, and make available to ADM all
relevant information and individuals who are employees or within the control of
XXXXXX or its affiliates necessary to keep such patents in full force and
effect. Any costs incurred by .ADM to keep the Licensed Patents in effect shall
be a credit towards any future payments due pursuant to this Agreement.
(f) LIMITED WARRANTY EUGENE represents and warrants that (a)
EUGENE possesses the full legal right, authority and power to enter into this
Agreement and to grant the licenses to ADM set forth herein; (b) EUGENE is not
aware of any existing or threatened litigation concerning the Licensed Patents
or the XXXXXX Technology; (c) EUGENE's rights in the Licensed Patents are
genuine and valid; (d) EUGENE has not granted any licenses to the Licensed
Patents or the XXXXXX Technology in the Territory; (e) the Licensed Patents are
all of EUGENE's patents and patent applications relating to EUGENE's sterol and
steryl ester based products: (f)the information provided by EUGENE to describe
the XXXXXX Technology shall be, in all material respects, an accurate
description of the information EUGENE possesses concerning the development and
manufacture of the XXXXXX Products; (g) EUGENE has included in the definition of
Licensed Patents all of its patents and patent applications which would be
infringed by ADM's manufacturing, having manufactured, using, selling or
offering to sell the XXXXXX Products in the Territory; provided that if any such
patent application was not included in the definition of Licensed Patents, such
definition shall be construed as if such patent or patent application had been
so included; (h) EUGENE has no actual knowledge of any material safety concerns
with respect to the XXXXXX Products. EUGENE DOES NOT MAKE ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER CONCERNING THE XXXXXX TECHNOLOGY.
(g) DEFINITIONS The following terms shall have the meanings set
forth below:
(i) "EUGENE Improvements" shall mean all Intellectual
Property invented, conceived, made, developed,
discovered or created by or on behalf of EUGENE
during the Term relating to, or necessary or
appropriate for the commercialization of, the XXXXXX
Products.
(ii) "XXXXXX Technology" shall mean all inventions,
innovations, improvements, discoveries, works,
designs or technical developments conceived, reduced
to practice, discovered or developed by or on behalf
of EUGENE and relating to, or necessary or
appropriate for the commercialization of the XXXXXX
Products, confidential information (including trade
Secrets), copyright, methods, processes, techniques,
concepts, ideas, information, data, materials,
know-how, industrial design or any other property
right or any applications therefore, and including
all information and tangible items of a scientific,
technical or business nature in any form or medium
and all information or records relating thereto, in
any and all relevant jurisdictions, and expressly
including the Licensed Patents and the XXXXXX
Improvements.
(iii) "Intellectual Property" shall mean all forms of
intellectual property existing on or after the date
of this Agreement under the laws of any state or
country including, but not limited to, patentable
inventions, patentable designs, patentable plants,
copyrightable works, mask works, novel plant
varieties, trademarks, service marks, trade secrets,
and trade dress.
(iv) "Licensed Patents" shall mean the following patents
and patent applications, and any foreign
counterparts, reissues, extensions, substitutions,
confirmations, registrations, revalidations,
additions, continuations, continuations-in-part, and
divisions of the foregoing as well as any
improvements or patent applications related .
thereto: See Schedule C, attached hereto and
incorporated herein by reference.
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(v) "Licensed Products" shall mean any EUGENE Product or
pan thereof the manufacture, use, sale, offer for
sale, or importation of which is covered by one or
"more Valid Claims of the issued, unexpired Licensed
Patents.
(vi) "Net Sales" shall mean ADM's invoiced sales price
billed for Licensed Products, and received, less (a)
credits, allowances, discounts and rebates to, and
charge backs from the account of, such, customers for
spoiled, damaged, out-dated, rejected or returned
product; (b) (to the extent included in the invoiced
sales price) actual freight and insurance costs
incurred in transporting such product in final form
to such customers and any brokerage fees associated
therewith; (c) any license fees or royalties payable
to third parties arising from the sale-of EUGENE
Products; (d) cash, quantity and promotional
discounts; and (e) sale, use, valued-added and other
taxes, duties, custom charges or governmental charges
incurred in connection with the exportation or
importation of such products in final form.
(vii) "Valid Claim" shall mean a claim contained in the
Licensed Patents which has issued, has not expired,
has not been held invalid or unenforceable by final
decision of a court or other governmental agency of
competent jurisdiction, unappealable or unappealed
within the time allowed for appeal, and which has not
been admitted to be invalid or unenforceable through
reissue, disclaimer or otherwise.
7. AUTHORITY Nothing herein authorizes either party to act as an
agent for the other party, or to assume or create any obligation on their behalf
or to constitute a relationship of agency, partnership or joint venture between
EUGENE and ADM. The parties agree that in all matters relating to this Agreement
each shall be acting as an independent contractor. Each party shall make all of
its own credit arrangements with its supplier and customers, and neither party
assumes any responsibility for credit extended by the other party.
8. REPRESENTATIONS AND WARRANTIES Each party represents and
warrants to the other party as follows;
(a) The party is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization and
has full corporate power to own, lease or operate its assets, properties and
businesses and to enter into this Agreement.
(b) The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated hereby:
(1) Have been duly authorized and approved by the party;
(2) Do not conflict with any provision of the articles of
incorporation, or other organizational documents of
the party;
(3) Do not violate any law, regulation, order of judgment
or decree by which the party is subject; and
(4) Do not conflict with or result in a breach of any
agreement, contract, or commitment to which the party
is subject.
(c) There are no material actions or proceedings pending, or to
the knowledge of the party, threatened, at law or in equity, before any court or
before or by any governmental agency, or by any
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private person or entity which would (i) challenge the validity or
enforceability of this Agreement, and the transactions contemplated hereby, or
(ii) interfere with the performance by the party of its obligations hereunder.
9. INSURANCE
a. Without in any way limiting ADM's obligations, indemnities, or
liabilities hereunder, ADM shall maintain at all times, at its expense, minimum
insurance as follows: Comprehensive General Liability Insurance including but
not limited to products and contractual liability (for ADM's obligations
hereunder to defend and/or indemnify EUGENE) with a limit of five million
dollars ($5,000,000) per each occurrence for bodily/personal injury and property
damage combined or a combination of such coverage and Umbrella Excess Liability
Coverage acceptable to EUGENE. ADM shall furnish evidence of such insurance
satisfactory to EUGENE upon request.
b. Without in any way limiting EUGENE'S obligations, indemnities,
or liabilities hereunder, EUGENE shall maintain at all times, at its expense,
minimum insurance as follows: Comprehensive General Liability Insurance
including but not limited to products and contractual liability (for EUGENE'S
obligations hereunder to defend and/or indemnify ADM) with a limit of five
million dollars ($5,000,000) per each occurrence for bodily/personal injury and
property damage combined or a combination of such coverage and Umbrella Excess
Liability Coverage acceptable to ADM EUGENE shall furnish evidence of such
insurance satisfactory to ADM upon request.
10. INDEMNITY
a. Notwithstanding the availability and policy limits of any
insurance, XXXXXX shall defend, indemnify and hold ADM, its subsidiaries,
divisions and affiliates and their respective officers, directors, agents and
employees, harmless from and against any and all losses, claims, liabilities,
damages (including but not limited to special, incidental and consequential
damages and damages relating to lost profits or loss of market share, whether
arising in contract, tort or otherwise) and legal actions, including reasonable
attorneys' fees and court costs, resulting from, arising out of, or relating to
any breach, negligence or willful misconduct by XXXXXX, its affiliates or
agents, except to the extent the claims or legal actions are the result of ADM's
own breach, negligence or willful misconduct. This provision shall survive the
termination, completion or expiration of this Agreement.
b. Notwithstanding the availability and policy limits of any
insurance, ADM shall defend, indemnify and hold XXXXXX, its subsidiaries,
divisions and affiliates and their respective officers, directors, agents and
employees, harmless from and against any and all losses, claims, liabilities,
damages (including but not limited to special, incidental and consequential
damages and damages relating to lost profits or loss of market share, whether
arising in contract, tort or otherwise) and legal actions, including reasonable
attorneys' fees and court costs, resulting from, arising out of, or relating to
any breach, negligence or willful misconduct by ADM, its affiliates or agents,
except to the extent the claims or legal actions are the result of EUGENE's own
breach, negligence or willful misconduct. This provision shall survive
termination, completion or expiration of this Agreement.
11. CONFIDENTIALITY Each party agrees (the "Receiving Party') on
behalf of its officers, directors, employees, agents and representatives not to
disclose to any third party or appropriate for its own use any confidential
information disclosed by the other party (the "Disclosing Party'). Confidential
information consist of the terms and conditions of this Agreement, pricing, all
nonpublic sales and financial data, sales forecasts, specifications, models,
samples, marketing information, all rights, title and interest in copyrights,
trade secrets, trademarks, service marks and other intellectual property owned
by the Disclosing Party, and all non-public information regarding the business
affairs and operations of the
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Disclosing Party disclosed by the Disclosing Party to the Receiving Party during
the course and related to this Agreement. Confidential information shall not
include information which: (i) becomes generally available to the public other
than as a result of disclosure by the Receiving Party, (ii) Receiving Party can
establish by competent proof was disclosed to Receiving Party from a third party
having a right to make such disclosure prior to its disclosure to Receiving
Party by Disclosing Party, (iii) becomes available to Receiving Party on a
non-confidential basis from a source other than Disclosing Party having a right
to disclose such information to Receiving Party; or (iv) is independently
developed by Receiving Party. The obligations imposed by this provision shall
survive for a period of five (5) years from the date of disclosure.
12. ASSIGNMENT This Agreement shall not be assigned by either
party without the prior written consent of the other party, which consent will
not be unreasonably withheld.
13. FORCE MAJEURE Neither party shall be held responsible for
failure or delay in performing if such failure or delay is due to an act of God.
war, fire, strike, differences with workmen, accident, equipment breakdown,
governmental acts or requirements, shortages of labor, materials, containers of
transportation equipment, delays in transportation, or other causes, either
similar or dissimilar to the foregoing, beyond the party's control.
14. SEVERABILITY The parties hereby agree that if any part, term
or provision of this Agreement is held by a court of competent jurisdiction to
be illegal or in conflict with any controlling law the validity of the remaining
portions or provisions shall not be affected thereby, and the rights and
obligations of the parties shall be construed and enforced as if this Agreement
did not contain the particular part, term or provision held to be invalid.
15. ARBITRATION Any controversy, dispute or claim arising out of,
or relating to, this Agreement or any breach thereof, shall be resolved by
arbitration, to be held in Los Angeles, California, in accordance with the rules
established by the American Arbitration Association. The arbitration shall be
conducted in the English language. Judgment upon any award rendered by all or a
majority of the arbitrators may be entered in any court having jurisdiction
thereof. Ail-costs of the arbitration shall be divided equally between the
parties, provided each party shall bear its own legal fees and expenses.
16. GOVERNING LAW This Agreement shall be deemed made in Decatur,
Illinois, and the validity and interpretation thereof shall be governed by the
laws of the State of Illinois without regard to its conflict of law principles:
The United Nations Convention on Contracts for the International Sale of Goods
shall not apply to this Agreement.
17. DISPUTES In the event XXXXXX disputes ADM's calculation of
ADM's Weighted Average Sterol Price pursuant to Section 4, or ADM disputes
EUGENE's calculation of Eugene's costs of manufacture pursuant to Section 5,
either party may request an audit by a mutually agreeable internationally
recognized independent public accounting FIRM. The results of any such audit
shall be final and binding upon the parties. The party requesting the audit
shall pay for the cost of the audit, except in the event where the audit reveals
an error in the requesting party's favor in an amount greater than 5%, in which
case the other party shall pay for the costs of the audit.
18. NOTICES Any notice given or required to be given hereunder
shall be deemed to have been effectively given when written in English and
delivered personally or sent by certified mail, return receipt requested, with
postage prepaid, to the addresses set forth below and/or to such other (or
additional) address(es) requested by a notice given in accordance with this
section:
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If to XXXXXX: If to ADM:
Xxxxxx Science, Inc. ADM Natural Health & Nutrition
00-0, Xxxxxxx-Xxxx, Xxxxx-Xx 4666 Faries Parkway
Bucheon, Kyunggi-Do Xxxxxxx, Xxxxxxxx 00000
Korea USA
Attn: President Attn: President
Copy to:
Xxxxxx Science, Inc. Xxxxxx-Xxxxxxx-Midland Company
00-0, Xxxxxxx-Xxxx, Xxxxx-Xx 4666 Faries Parkway
Bucheon, Kyunggi-Do Xxxxxxx, Xxxxxxxx 00000
Korea USA
Attn: President Attn: President
Nothing contained herein shall justify or excuse failure to give oral notice or
notice by facsimile for the purpose of informing the other party thereof when
prompt notification is appropriate, but such oral notice or notice by facsimile
shall not satisfy the requirement of written notice.
19. ENTIRE AGREEMENT This Agreement contains the entire agreement
between the parties and the undersigned are not relying upon any representations
or agreements other than contained herein. Any additions, modifications or
amendments to the Agreement shall not be binding unless made in writing and
signed by the parties, This Agreement supersedes all previous agreements,
written or oral, which have existed or now exist between the parties.
20. WAIVER Neither party's failure to insist on full performance
of any term or condition of this Agreement or a waiver of any breach hereunder
shall not be considered a waiver of that term or condition in the future or any
other terms, conditions or rights under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement in
duplicate as of the date first above written.
XXXXXX-XXXXXX-MIDLAND COMPANY
By: /s/ S. Fish
---------------------------------------------
Title: PRESIDENT - NATURAL HEALTH & NUTRITION
XXXXXX SCIENCE, INC.
By: /s/ Xxxxx Xxxx Noh
---------------------------------------------
Title: President and CEO
------------------------------------------
-10-
Schedule A
CardioAid Phytosterols
ADM product code 040095
Technical Data Sheet
DESCRIPTION:
CardioAid Phytosterols is an off-white powder having a. slight odor and taste.
CardioAid Phytosterols is derived from vegetable oils. Structurally similar to
cholesterol, phytosterols have been found, in studies, to reduce the absorption
of dietary cholesterol which can impact serum cholesterol levels. [J. of Nutr.,
107:1139-1146 (1977); Can. J. Physiol. Pharmacol., 75:217-227(1997)]. CardioAid
Phytosterols is GRAS (Generally Recognized As Safe) for use in vegetable oil
spread, dressings for salad, health drinks, health bars, and yogurt-type
products and can also be used in nutritional supplements. The FDA has allowed
the following claim, for products containing CardioAid Phytosterols: "FOODS
CONTAINING AT LEAST 0.4 GRAM PER SERVING OF PLANT STEROLS, EATEN TWICE A DAY
WITH MEALS FOR A DAILY TOTAL INTAKE OF AT LEAST 0.8 GRAM, AS PART OF A DIET LOW
IN SATURATED FAT AND CHOLESTEROL, MAY REDUCE THE RISK OF HEART DISEASE. A
SERVING OF [NAME OF THE FOOD] SUPPLIES GRAM(S) OF PLANT STEROI."
CardioAid Phytosterols can be formulated into cosmetics such as skin creams,
lipsticks, soap and hair care products.
Typical Chemical and Physical Properties
Appearance: Fine powder
Odor Slight
Total Phytosterols 95% minimum
Beta-sitosterol 80% maximum
Beta-sitostanol 15% maximum
Campesterol 40% maximum
Campestanol 5% maximum
Stigmasterol 30% maximum
Brassicasterol, 3% maximum
Other sterols and Stanols 3% maximum
Tocopherols 0-15 mg/g
Melting Point 135(degree)C - 145(degree)C
Heavy Metals 10 ppm maximum
Solubility in Water Insoluble
STORAGE AND SHELF-LIFE
CardioAid Phytosterols should be stored in closed packaging under dry
conditions.
PACKAGING AND PRODUCT CODES
00 xx xxxx (XXX Xxxx 000000-0X)
000 xx xxxx (XXX Xxxx 000000-0X)
PS-006-G4Q317
THE INFORMATION CONTAINED HEREIN IS CORRECT TO THE BEST OF OUR KNOWLEDGE. THE
RECOMMENDATIONS OR SUGGESTIONS CONTAINED IN THIS DATA SHEET ARE MADE WITHOUT
GUARANTEE OR REPRESENTATION AS TO RESULTS. WE SUGGEST THAT YOU EVALUATE THESE
RECOMMENDATIONS AND SUGGESTIONS IN YOUR OWN LABORATORY PRIOR TO USE. OUR
RESPONSIBILITY FOR CLAIMS ARISING FROM BREACH OF WARRANTY, NEGLIGENCE, OR
OTHERWISE IS LIMITED TO THE PURCHASE PRICE OF THE MATERIAL. FREEDOM TO USE ANY
PATENT OWNED BY ADM OR OTHERS IS NOT to BE INFERRED FROM ANY STATEMENT CONTAINED
HEREIN.
-11-
Schedule B
SPECIFICATION OF THE XXXXXX PRODUCTS (EUCHOL)
DESCRIPTION:
EuChol is a phytosterol-based food ingredient developed by Xxxxxx
Science, Inc. EuCho is consisted of phytosterols and emulsifier.
TYPICAL CHEMICAL AND PHYSICAL PROPERTIES
Appearance Fine Powder
Total Phyosterols 47.0% minimum
Loss on Drying 1.0% maximum
Residue of ignition 1.0% maximum
Heavy metals 10 ppm maximum
Arsenic 4 ppm maximum
STORAGE AND SHELF-LIFE
EuChol should be stored in closed packaging under dry conditions.
PACKAGING
10 Xx Xxx
-00-
00-0, Xxxxxxx-xxxx, Ojung-gu, Xxxxxxx, Xxxxxxx-xx 000-000 Xxxxx
Phone: x00-0-000-0000, Fax: x00-0-000-0000
[PATENT LIST]
PCT
------------------------------------------------------------ --------------------- ---------------------- ---------------------
Title Application No. Raid-open No. Priority
Date Date Date
------------------------------------------------------------ --------------------- ---------------------- ---------------------
Method for dispersing plant sterol for beverage and a
plant sterol-dispersed beverage, of which particle size is PCT/KR01/01640 WO 02/28204 KR2000-57652
nanometer-scale in dispersed beverage 2002-04-11 2002-04-11 000-00-00
------------------------------------------------------------ --------------------- ---------------------- ---------------------
Plant sterol-containing foods, and method for preparing PCT/KR02/00472 WO 03/077679
the same 2002-03-20 2003-09-25
------------------------------------------------------------ --------------------- ---------------------- ---------------------
Mixing powder of plant sterol and amulsifier, and method PCT/KR02/00473 WO 03/077680
for preparing the same 2002-03-20 2003-09-25
------------------------------------------------------------ --------------------- ---------------------- ---------------------
Chewing gum composition containing plant sterol for
decrease of blood cholesterol levels and prevention of PC/KR03/00211 WO 03/063605 KR2002-005948
periodontal disease 2003-01-29 2003-08-07 2002-02-01
------------------------------------------------------------ --------------------- ---------------------- ---------------------
Japan
------------------------------------------------------------ --------------------- ---------------------- ---------------------
Title Application No. Raid-open No. Priority
Date Date Date
------------------------------------------------------------ --------------------- ---------------------- ---------------------
Method for dispersing plant sterol for beverage and a
plant sterol-dispersed beverage, of which particle size is 2002-531841 KR2000-57652
nanometer-scale in dispersed beverage 2000-09-30
------------------------------------------------------------ --------------------- ---------------------- ---------------------
PCT
------------------------------------------------------------ ------------------------------ ---------------------
Title Designated States Field
------------------------------------------------------------ ------------------------------ ---------------------
Method for dispersing plant sterol for beverage and a U.S.A., China, Japan,
plant sterol-dispersed beverage, of which particle size is Europe, Australia, Brazil, CholZero Drinks
nanometer-scale in dispersed beverage Singapore, Indonesia
------------------------------------------------------------ ------------------------------ ---------------------
Plant sterol-containing foods, and method for preparing (Designation Due date) CholZero foods
the same 2004-09-20 except drinks
------------------------------------------------------------ ------------------------------ ---------------------
Mixing powder of plant sterol and amulsifier, and method (Designation Due date) EuChol Powder
for preparing the same 2004-09-20
------------------------------------------------------------ ------------------------------ ---------------------
Chewing gum composition containing plant sterol for
decrease of blood cholesterol levels and prevention of (Designation Due date) Chol Zero
periodontal disease 2004-08-01 Chewing Gum
------------------------------------------------------------ ------------------------------ ---------------------
Japan
------------------------------------------------------------ ------------------------------ ---------------------
Title STATUTE Field
------------------------------------------------------------ ------------------------------ ---------------------
Method for dispersing plant sterol for beverage and a
plant sterol-dispersed beverage, of which particle size is Registration Complete CholZero Drinks
nanometer-scale in dispersed beverage
------------------------------------------------------------ ------------------------------ ---------------------
Date: Feb. 16, 2004
ADM-A patent list
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