10.22 EcoProgress License
EXCLUSIVE LICENSE AGREEMENT
MEMORANDUM OF VARIATION - EFFECTIVE MARCH 23rd, 1999
BETWEEN:
BioProgress Technology International, Inc., (BTI), a corporation registered in
the State of Delaware, having offices situate at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx,
XX 00000; and, Consolidated Ecoprogress Technology, Inc., (CET), a corporation
registered in British Columbia, having offices situate at Suite 000-000 Xxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxx, X.X. X0X 0X0.
WHEREAS:
A. CET was formerly known as, first, Allmed International Investments, Inc.,
(Allmed), and second, as Ecoprogress Canada Holdings, Inc., (ECH). The change of
name from Allmed to ECH was effected on February 7th, 1997, and the change of
name from ECH to CET was effected on February 25th, 1998.
B. By way of an agreement dated February 15th, 1999 BTI acquired from Trutona
International, Inc., (TI), inter alia, the sole and beneficial interest in an
Exclusive License Agreement (the Exclusive License) made between EcoProgress
International, Limited, Envirofilm Technology, Inc., and Allmed on November
28th, 1994. A copy of the minutes of a meeting of the directors of TI approving
and ratifying the sale of the Exclusive License to BTI is attached hereto as
Schedule 1.
C. The Exclusive License Agreement was varied by way of a Memorandum of
Variation dated August 31st, 1998 a copy, of which, is attached hereto as
Schedule 2.
D. CET wishes to extend the Territory (as defined in the Exclusive Agreement)
and to acquire certain valuable assets (the Assets) being the property of BTI as
set out in Schedule 3 attached hereto, and BTI is willing to extend the
Territory and to sell the Assets on the terms and conditions contained herein.
It is AGREED as follows:
GENERAL
1. Pursuant to Clause 15.2 of the Exclusive License this Memorandum of Variation
shall be legally binding upon the parties hereto with effect from the date
hereof.
2. For the avoidance of doubt the Exclusive License, mutatis mutandis, remains
in full force and effect in all respects.
3. The sole parties to the Exclusive License shall be BTI and CET.
4. The front page and the signature page of the Exclusive License incorrectly
refer to Allmed as being Allmed International Investors.
5. The Effective Date (as defined therein) of the Exclusive License is November
28th, 1994.
VARIATIONS TO THE EXCLUSIVE LICENSE
1. Forthwith upon the execution and delivery of this Agreement the Exclusive
License shall be amended as follows:
1.1. Territory shall be The World, (the Extended Territory);
1.2. Products, as defined in the License, shall be limited in scope to be
disposable absorbent products (feminine hygiene products, baby diapers, adult
incontinence pads and sheets, and such like) until such time as:
(a) cumulative royalties of US $1,000,000 have been paid in respect of the
Extended Territory (excluding Canada), at which time Products shall
automatically and without the need for further documentation be amended to
include Ostomy Products;
(b) cumulative royalties of US $2,500,000 have been paid in respect of the
Extended Territory (excluding Canada), at which time Products, as amended under
1.2(a) hereof, shall automatically and without the need for further
documentation be amended to include disposable medical gowns, drapes, utensils,
wipes and solids for removal and recycling of hazardous materials, and a
processor system for their dissolution, and any and all products that have an
orifice and which can be used for the containment or handling of materials and
powders and for the avoidance of doubt this expressly excludes Encapsulation
Products and Encapsulation Products as defined in the Memorandum of Variation
attached here to; and,
(c) those Products referred to in Subclause (a) hereof, may be sold by CET
within the Extended Territory at any time, provided that, such sales shall be on
a nonexclusive basis and subject to a royalty of 5% payable to BTI in respect of
gross proceeds received by CET from such sales, and such royalty shall be
excluded from the cumulative royalties payable under the Subclause (a) referred
to herein.
(d) those Products referred to in Subclause (b) hereof, may be sold by CET
within the Extended Territory at any time, provided that, such sales shall be on
a nonexclusive basis and subject to a royalty of 5% payable to BTI in respect of
gross proceeds received by CET from such sales, and such royalty shall be
excluded from the cumulative royalties payable under the Subclause (b) referred
to herein.
CONSIDERATION
1. Consideration payable upon execution of this agreement in respect of the
Extended Territory (excluding Canada) shall be US $380,000 cash and US
$1,120,000 payable by way of the issue of free trading shares of common stock
(the Shares) in CET at an agreed price of US $1.05 per share.
2. The initial cash consideration of US $380,000 shall include the sum of
$160,000 being the total sum applicable to the purchase of the Assets, which
shall expressly exclude title to the Patents as defined in the License.
PAYMENT
1. Upon execution of this Agreement CET shall pay to BTI the sum of US $100,000
by way of wire transfer or certified cheque, or a combination thereof at BTI's
direction, and such payment shall be nonrefundable in the event that, for any or
no reason, CET fails to obtain the approvals referred to in Clause 3 hereof.
2. Upon regulatory approval or no later than April 7th, 1999 CET shall to BTI
the sum of US $280,000 by way of wire transfer or certified cheque, or a
combination thereof at BTI's direction.
3. Within seven (7) working days of CET receiving approval to enter into this
Agreement from the Vancouver Stock Exchange and a majority of CET shareholders,
whichever is the later, CET shall deliver up to BTI the Shares deemed fully paid
and registered in the name of BTI.
4. Any and all other sums that become due under this Agreement shall be paid in
full and on time, time being of the essence, in US dollars to a bank account or
bank accounts nominated by BTI from time to time.
ROYALTY
1. A royalty of 5% capped at the cumulative sum of US $3,500,000 shall be
payable by CET to BTI in respect of the sale of Products within the Extended
Territory.
OPTION TO PURCHASE TITLE TO PATENTS
1. Upon payment of the cumulative sum of US $3,500,000 CET may purchase absolute
and beneficial title to the Patents for the sum of US $1.00 per patent.
2. In the event that the Patents are acquired by CET in accordance with 1
hereof, then CET shall grant to BTI a consideration free license to use the
Patents, provided that, such use does not conflict or compete with the Products.
APPOINTMENT OF DISTRIBUTOR
1. CET shall appoint BTI as its exclusive distributor for the Products within
the EEC upon terms and conditions consistent with CET's normal commercial terms
and conditions for such rights.
APPROVAL OF DIRECTORS
1. This Memorandum of Variation has been unanimously approved and ratified at a
meeting of the Directors of CET and BTI respectively, and a copy of the minutes
of each of the said meetings is attached hereto as Schedule 4.
OBLIGATIONS OF BTI
1. Within thirty (30) days of the date hereof, BTI shall deliver up the Assets
to CET, provided that, the cost of delivery (if any) shall be borne by CET.
2. BTI shall procure and deliver to CET all documentation, customer lists,
customer correspondence, sales and marketing collateral, and any and all other
materials or information deemed necessary by CET to enable it to take maximum
commercial advantage of the Products within the Extended Territory.
OBLIGATIONS OF CET
1. CET shall use its best endeavours to maximise the commercial exploitation of
the Products to maximum benefit within the Extended Territory.
2. CET by itself and jointly and severally by its directors and officers shall
take all necessary steps, and sign and deliver all documents deemed necessary,
to ensure that the Shares are properly registered and free from restriction of
sale, transfer, assignment or disposal by other means within the minimum time as
required by statute, law or regulatory authority.
CONTINUITY
1. All other terms and conditions of the Exclusive License, including governing
law, remain unchanged and in full force and effect as if the parties hereto had
been signatories and principals to the Exclusive License at the Effective Date
thereof.
CONFLICT
1. In the event of conflict between the terms, conditions and expression of this
Agreement and the terms, conditions and expression of the Exclusive License,
then the terms, conditions and expression of this Agreement shall prevail upon
the parties in all respects.
The parties hereto have the day first written above signed in agreement.
By:
Duly authorized officer for and on behalf of
BioProgress Technology International, Inc.
Name:
Title:
By:
Duly authorized officer for and on behalf of
Consolidated Ecoprogress Technology, Inc.
Name:
Title:
SCHEDULE 1
MINUTES OF A MEETING OF THE DIRECTORS OF
TRUTONA INTERNATIONAL, INC.
HELD ON FEBRUARY 15TH, 1999.
BY TELEPHONE
Present: Xxxxx X Xxxxxxxxx (Chairman)
Xxxxx X. Xxxxxxxx (President)
Xxxxx X. X. Xxxxxxx (C.F.O., Secretary and Treasurer)
Xxxxxxx X. Xxxxx (V. P. Research & Development)
There was presented to the meeting an agreement between the company and
BioProgress Technology International, Inc., (BTI) The agreement provides for the
Company to sell all of its assets in flushable and biodegradable products for a
total consideration of $1,500,000, to be satisfied by the issue of shares in
BTI, with the proviso that BTI may pay up to $380,000 in cash in lieu of 950,000
shares.
Xx. Xxxxxxxxx, Xx. Xxxxxxx and Xx. Xxxxx declared an interest in the proposed
agreement by virtue of their executive positions with BTI and respective
personal shareholdings in that Company. Accordingly, they refrained from
discussion of the agreement and declared their intention to abstain from voting
on the proposition.
The Proposition:
It was proposed by the President that it is in the best interests of the Company
and its creditors and shareholders to accept and execute the agreement with BTI
and as tabled at the meeting.
Resolution:
It was resolved, and is hereby approved and ratified, that the President is
instructed and authorized to execute and deliver the agreement with BTI in the
form tabled at the meeting. Further, the President is instructed and authorized
to sign, execute, seal, agree and deliver any and all documents deemed necessary
to properly and fully effectuate the BTI agreement in all respects.
There being no other business the meeting was closed.
This is a true and accurate minute of the meeting of the directors held on the
date first written above.
Xxxxx X. Xxxxxxxxx
Chairman
Xxxxx X. X. Xxxxxxx
C.F.O, Secretary and Treasurer.
SCHEDULE 2
EXCLUSIVE LICENSE AGREEMENT
MEMORANDUM OF VARIATION EFFECTIVE AUGUST, 31, 1998
BETWEEN:
EcoProgress International, Limited (EIL), a corporation registered in the State
of Delaware, having offices situate at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000;
and, Trutona International, Inc., (TI), a corporation registered in the States
of Delaware, having offices situate at 0000 Xxxxxxxxx Xxxxx, Xxxxxxx, XX 00000;
and, Consolidated Ecoprogress Technology, Inc., (CET), a corporation registered
in British Columbia, having office situate at 0000 Xxxx Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxx, X.X. X0X 0X0.
WHEREAS:
A. CET was formerly known as, first, Allmed International Investments, Inc.,
(Allmed), and second, as Ecoprogress Canada Holdings, Inc., (ECH). The change of
name from Allmed to ECH was effected on February 7th, 1997, and the change of
name from ECH to CET was effected on February 25th, 1998.
B. By way of an agreement dated September 19th, 1997, TI acquired from
EcoProgress, Inc., (ECO) the sole and beneficial interest in an Exclusive
License Agreement (the Exclusive License) made between EIL, ECO and Allmed on
November 28, 1994.
C. In the period since the effective date of the Exclusive License there has
been numerous changes, amendments, additions and deletions to the terms and
conditions of the Exclusive License, all of which have been agreed to either
orally or in writing by the parties hereto, and the parties now wish to record
by this Memorandum of Variation the aforementioned changes, amendments,
additions and deletions to the terms and conditions of the Exclusive License.
It is agreed as follows:
6. Pursuant to Clause 15.2 of the Exclusive License this Memorandum of Variation
shall be binding upon the parties hereto.
7. For the avoidance of doubt the License Agreement, mutatis mutandis, remains
in full force and effect in all respects.
8. The sole parties to the Exclusive License are EIL, TI and CET.
9. The front page and the signature page of the Exclusive License incorrectly
refer to Allmed as being Allmed International Investors.
10. The Effective Date (as defined therein) of the Exclusive License is November
28, 1994.
11. By way of agreement dated November 12th, 1996, between Allmed and EIL,
Allmed agreed to buyout the R&D Contribution (as defined in the Exclusive
License) for the agreed sum of $189,990 to be satisfied by the issue to EIL of
821,970 shares of Allmed's common stock. The aforementioned agreement has been
completed and there is no accrued, actual or future liability on Allmed or EIL
on any account whatsoever and no matter how arising in respect thereof.
12. At the date hereof the principal sum of US$155,526.74 remains outstanding
and payable by CET to TI in respect of the License Fee (as defined in the
Exclusive License). CET shall pay to TI the sum of US$155,526.74 in the amounts
and at the times following:
12.1. Forthwith, upon completion of a private placement of CET's common shares
in progress at the date hereof, but in any event no later than September 25th,
1998, time being of the essence, the sum of US$44,442.52, such sum to be paid by
way of telegraphic transfer for the account of TI at NationsBank, 0000 Xxxxxxx
Xxxx, Xxxxxxx, XX 00000, ABA Number: 000000000, Account Number: 022 77 945.
12.2. On September 30th, 1998, the sum of: US$11,110.63
12.3. On December 31st, 1998, the sum of: US$11,110.63
12.4. On March 31st, 1999, the sum of: US$23,340.93
12.5. On June 30th, 1999, the sum of: US$23,340.93
12.6. On September 30th, 1999, the sum of: US$23,340.93
12.7. On December 31st, 1999, the sum of: US$18,840.17
13. At the date hereof the amount of US$3,125.41 remains outstanding and payable
by CET to TI in respect interest due on arrears of the License Fee (as defined
in the Exclusive License). CET shall pay to TI the sum of US$3,125.41 forthwith
upon completion of a private placement of CET's common shares in progress at the
date hereof.
14. At the date hereof the amount of US$1,121.48 remains outstanding and payable
by CET to TI in respect of arrears of Royalties (as defined in the Exclusive
License). ). CET shall pay to TI the sum of US$1,121.48 forthwith upon
completion of a private placement of CET's common shares in progress at the date
hereof.
15. Pursuant to an agreement dated April 22, 1997, CET sold to EIL absolute and
beneficial title to any and all rights to encapsulation technologies and
encapsulated products developed, or to be developed by EIL, which would
otherwise be subject of the Exclusive License, in consideration of the issue to
CET of 125,000 ordinary shares of common stock in BioProgress Technology
Limited, a private company incorporated in the United Kingdom.
16. The original patent application No.912452.4 was replaced on February 9, 1995
by patent application No: PCT/GB96/00298. In addition, Patent applications
numbers: Canadian No: 2 212 445 and Canadian No: 2 222 167 became subject of the
Exclusive License on, and claim international priority from February 9, 1995,
and on May 25, 1995 respectively.
17. Other products identified as Products (as Defined in the Exclusive License),
for which a patent application may or may not be submitted but which are subject
to intellectual property, are: organic cotton digital tampons and organic cotton
applicator tampons; breast pads for breast feeding mothers; incontinence pads
for light and medium levels of incontinence; two part flushable and
biodegradable diaper.
18. All other terms and conditions of the Exclusive License, including governing
law, remain unchanged and in full force and effect as if the parties hereto had
been signatories to the Exclusive License at the Effective Date thereof.
The parties have the day first written above signed in agreement.
By:
Name:
Title:
Duly authorized officer for and on behalf of
EcoProgress International, Limited
By:
Name:
Title:
Duly authorized officer for and on behalf of
Trutona International, Inc.
By:
Name:
Title:
Duly authorized officer for and on behalf of
Consolidated Ecoprogress
Technology, Inc.
SCHEDULE 3
THE ASSETS
TRADEMARKS
1. HARMONIES
2. TRUTONA
3. TRUE TO NATURE
4. INVENTORY:
1. ALL HARMONIES: SUPER NAPKINS, REGULAR NAPKINS, PANTYLINERS
2. ALL TRUTONA: SUPER NAPKINS, REGULAR NAPKINS, PANTYLINERS
3. ALL PACKAGING AT HOSPECO AND ONTEX
4. ALL B 9 FILM AT HOSPECO.
5. ALL MATERIALS AT ONTEX: 3.67 TONNES AIR LAID PAPER, 142,260 SQUARE METRES
COVERSTOCK.
SUNDRY:
1. EXHIBITION BOOTH
2. ALL ARTWORKS, DESIGNS, PROOFS, AND ADVERTISEMENT MATERIALS.
SCHEDULE 4
COPIES OF MINUTES OF A MEETING OF THE DIRECTORS OF CET AND OF BTI, RESPECTIVELY,
APPROVING AND RATIFYING THIS AGREEMENT
