Exhibit 10.6
NON-EXCLUSIVE PATENT LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("LICENSE AGREEMENT") is made and entered into
this 26th day of January, 1996, by and between BIONOVA U.S. INC., a Delaware
corporation (hereinafter BIONOVA) and DNA PLANT TECHNOLOGY CORPORATION, a
Delaware corporation (hereinafter DNAP).
WITNESSETH
WHEREAS, BIONOVA desires to have a non-exclusive license as recited
herein under the patent and patent applications listed in the attached
Schedule 1; and
WHEREAS, DNAP is willing to grant such license to BIONOVA, subject to
the terms and conditions hereinafter set forth.
NOW THEREFORE, for and in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the parties hereto
agree as follows:
1. Definitions. In this LICENSE AGREEMENT, the following terms shall
have the following meanings:
a. LICENSED PATENTS shall mean the patents and patent
applications listed on the attached Schedule 1, patents to be issued pursuant
thereto, and all divisions, continuations, reissues, reexamination
certificates, substitutes, and extensions thereof.
b. LICENSED PRODUCTS shall mean any product or process covered
by one or more claims of the LICENSED PATENTS.
c. ROYALTY BEARING PRODUCTS shall mean the LICENSED PRODUCTS
that are covered by one or more issued and not lapsed or expired claims of one
or more of the LICENSED PATENTS.
d. NET SALES shall mean the gross invoice price of ROYALTY
BEARING PRODUCTS sold by BIONOVA or its Sublicensees minus documented returns
and allowances for defective goods. The gross invoice price shall not include
any sales, use or value added taxes.
2. License Grant To BIONOVA. DNAP grants to BIONOVA for the term of
this Agreement a non-exclusive license under LICENSED PATENTS to use the
LICENSED PATENTS and to make, have made, use and sell LICENSED PRODUCTS,
except that such license does not include rights in the areas listed in
Schedule 2. The license is non-transferable; provided, that DNAP consents to
BIONOVA'S sublicense of its rights hereunder to its Affiliates as of the date
of this Agreement provided that each such Sublicensee agrees to become bound
by the terms and conditions of this License (the "Sublicensees"). For
purposes of this provision, "Affiliates" means persons or entities
controlling, controlled by or under common control with the party, as well as
any majority owned entities of the party and of its other affiliates, and
"control" of an entity means either the power, directly or indirectly, to
direct or cause the direction of the management and policies of the entity,
whether by contract or otherwise, or the right to receive at least 50% of the
profits from such entity.
3. Royalties.
a. BIONOVA shall pay DNAP a running royalty fee of $250,000.00
for each full quarter during which this LICENSE AGREEMENT is in effect;
provided, however, the fee for the calendar quarter ending March 31, 1996
shall be $50,000 and the fee for the calendar quarter ending June 30, 1996
shall be $125,000.00. For any portion of a quarter during which this LICENSE
AGREEMENT is in effect BIONOVA shall pay DNAP a percentage of the applicable
quarterly fee equal to the number of days of such quarter divided by 91 days,
multiplied by the applicable quarterly fee.
b. BIONOVA may pay any royalty or other amounts due or payable
under this LICENSE AGREEMENT by crediting the amount of such royalty or other
payment against any indebtedness owed to BIONOVA by DNAP pursuant to that
certain Loan Agreement executed by and between DNAP and BIONOVA dated of even
date herewith.
c. BIONOVA shall make the royalty payments set forth in
subparagraphs (a) and (b) hereof sixty (60) days after the close of each
quarter.
d. With each royalty payment, BIONOVA will provide to DNAP a
written royalty statement verified by the President or Chief Financial Officer
of BIONOVA, setting forth the NET SALES identified by product designation upon
which royalties are calculated during the period covered by the statement.
DNAP shall have the right once per year to designate an independent certified
public accountant to inspect BIONOVA's books and records relating to NET SALES
upon which royalties are calculated.
4. BIONOVA's Option To Convert To Fully-Paid License. BIONOVA may,
at any time prior to September 30, 1996, notify DNAP that it is electing to
convert to a fully paid LICENSE with respect to the quarterly license fees
owed by BIONOVA under subparagraph 3(a) by paying the sum of $1,500,000 plus a
royalty equal to 2.5% of the NET SALES of ROYALTY BEARING PRODUCTS sold by
BIONOVA or its Sublicensees during any quarter subsequent to the election
during which this LICENSE AGREEMENT is in effect, which fully paid LICENSE
shall continue in full force and effect and shall not terminate until the last
to expire of the LICENSED PATENTS. At any time subsequent to September 30,
1996, if BIONOVA has not made the above described election, BIONOVA may upon
thirty (30) days notice to DNAP, convert to a fully paid royalty-free license
by paying DNAP the following sum as a lump sum payment for a fully paid up
license to BIONOVA and its Sublicensees: an amount when discounted, at a
discount rate of ten percent (10%), which, if added to the discounted stream
of any and all royalty payments made pursuant to subparagraph 3(a) hereunder
(with the exception of the March 31, 1996 and June 30, 1996 payments), would
yield a total present value as of the date of this Agreement of $5,000,000.00.
5. Enforcement of LICENSED PATENTS. DNAP will be solely responsible
at its own expense for using all reasonable efforts to prosecute and enforce
LICENSED PATENTS owned by DNAP; provided, however if BIONOVA requests that
DNAP take any reasonable action to prosecute and enforce the LICENSED PATENTS
and DNAP refuses or fails to take such action on a timely basis, BIONOVA shall
be permitted and authorized, in the name of DNAP or in the name of BIONOVA as
appropriate, to use all reasonable efforts to prosecute and enforce LICENSED
PATENTS. DNAP will provide BIONOVA with reasonable assistance in such
prosecution and enforcement. BIONOVA shall have no obligation to undertake
any such action, and if BIONOVA should do so, BIONOVA shall have no liability
to DNAP for the sufficiency or adequacy of any such actions taken by BIONOVA.
6. Notices. All notices, demands, requests, and other communications
required or permitted hereunder shall be in writing and shall be deemed to
have been given when received by BIONOVA or DNAP, as the case may be, at the
respective addresses set forth below or as BIONOVA or DNAP may from time to
time designate by written notice to the other:
BIONOVA U.S. INC.
c/o Thompson & Xxxxxx, P.C. (Attn: JAR)
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
With a copy to:
Lic. Xxxxxxxxx Xxxxxxx-Xxxxxx
Edificio Torrealta
Xx. Xxxxx 000 Xxxxxxxxx
00000 Xxxxx Xxxxxx, N.L.
Mexico
DNA PLANT TECHNOLOGY CORPORATION
0000 Xxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Vice President, Business Development (with copy
to DNAP Legal Department, at the same address)
7. Modifications. No provision of this LICENSE AGREEMENT may be
modified, waived, or terminated except by instrument in writing executed by
the party against whom a modification, waiver, or termination is sought to be
enforced.
8. Severability. In case any of the provisions of this LICENSE
AGREEMENT shall for any reason be held to be invalid, illegal, or
unenforceable, such invalidity, illegality, or unenforceability shall not
affect any other provision hereof, and this LICENSE AGREEMENT shall be
construed as if such invalid, illegal, or unenforceable provision had never
been contained herein.
9. Election of Remedies. Each party shall have all of the rights and
remedies granted herein and available at law or in equity, and these same
rights and remedies shall be cumulative and may be pursued separately,
successively, or concurrently against the other party, or to the LICENSED
PATENTS at the sole discretion of the pursuing party. The exercise or failure
to exercise any of the same shall not constitute a waiver or release thereof
or of any other right or remedy, and the same shall be non-exclusive.
10. Form and Substance. All documents, certificates, and other items
required under this LICENSE AGREEMENT to be executed and/or delivered to a
party shall be in form and substance reasonably satisfactory to the receiving
party.
11. No Third Party Beneficiary. This LICENSE AGREEMENT is for the
sole benefit of BIONOVA (and its Affiliates to the extent they become
sublicensees hereunder) and DNAP and is not for the benefit of any third
party.
12. Number and Gender. Whenever used herein, the singular number
shall include the plural and the singular, and the use of any gender shall be
applicable to all genders.
13. Captions. The captions, headings, and arrangements used in this
LICENSE AGREEMENT are for convenience only and do not in any way affect,
limit, amplify, or modify the terms and provisions hereof.
14. Applicable Law. This LICENSE AGREEMENT shall be governed by and
construed in accordance with the laws of the State of California and the laws
of the United States of America.
15. Assignability. Except as provided in paragraph 2 hereof, neither
this LICENSE AGREEMENT nor any interest herein may be assigned, in whole or in
part, by a party without the prior written consent of the other party. The
parties hereto acknowledge that immediately subsequent to the execution of
this LICENSE, DNAP will be granting an Assignment of its ownership of the
LICENSED PATENTS to BIONOVA as security for repayment of its obligations under
the Loan Agreement. The Assignment shall not affect the rights or obligations
of either party hereunder. Notwithstanding the above, a party may assign this
LICENSE AGREEMENT to a successor of all or substantially all of its business
without the prior written consent of the other party, provided however, that
no such assignment shall be valid unless the assignee assumes all of the
duties and obligations of the assigning party.
16. General Assurances. The parties hereto agree to execute,
acknowledge and deliver all such further instruments, and to do all such other
acts, as may be necessary or appropriate in order to carry out the intent and
purposes of this LICENSE AGREEMENT.
17. Negation Of Agency And Similar Relationships. Nothing contained
herein shall be deemed to create any agency, joint venture or partnership
relationship between the parties hereto.
18. Confidentiality.
a. Duties: BIONOVA shall keep confidential and not disclose to
any third person or entity any information regarding the LICENSED PATENTS or
the LICENSED PRODUCTS received from DNAP under this LICENSE AGREEMENT, except
as provided in subparagraph (b) below. Notwithstanding the foregoing, BIONOVA
and any of its Sublicensees shall be free to use and disclose to their
advisors and consultants who agree to treat as confidential such information
for purposes of exercising its rights under this LICENSE AGREEMENT.
b. Exceptions: The duties of confidentiality, access
restrictions and non-use provided by subparagraph (a) above shall not apply to
information received by BIONOVA from DNAP if the information:
(i) is public information at the time of disclosure
by DNAP to BIONOVA;
(ii) subsequently becomes public information other
than by act or omission of BIONOVA;
(iii) is already in the lawful possession of BIONOVA,
as can reasonably be demonstrated by documentary evidence from BIONOVA, at the
time of first disclosure by DNAP to BIONOVA; or
(iv) is independently developed by employees of
BIONOVA who did not have access to the information.
19. Term and Termination. This Agreement shall continue until the
date of the last to expire of the LICENSED PATENTS. In the event of a
material breach of this Agreement by either party and the failure to cure such
breach within 30 days of the receipt of written notice from the other party,
this Agreement shall terminate. In the event of such termination, the non-
breaching party retains all other rights and remedies available to it under
law, including the right to collect payments owed but not made. BIONOVA shall
have the unilateral right to terminate this LICENSE AGREEMENT by giving DNAP
thirty (30) days written notice of such termination together with payment of
all amounts due hereunder through the date of termination; provided, however,
upon termination BIONOVA and its Affiliates shall be required (i) to return
all materials regarding the LICENSED PATENTS that it would be required to keep
confidential under this Agreement except that BIONOVA's outside counsel may
retain a copy thereof to be held in confidence for the sole purpose of
preserving a record for any future litigation. and (ii) to cease any and all
use of the LICENSED PATENTS pursuant to this LICENSE AGREEMENT. BIONOVA's
obligation to pay royalties under this LICENSE AGREEMENT shall cease upon such
termination.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on the date first above written.
BIONOVA U.S. INC.
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title:Chairman of the Board and Chief
Executive Officer
DNA PLANT TECHNOLOGY CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title:Chief Executive Officer
