EXHIBIT NO. DESCRIPTION
10.1 License Agreement between the Company and
Global Dairy Products Ltd. 2/5/96
PRODUCT LICENSE AGREEMENT
THIS AGREEMENT is dated for reference the day of February, 1996.
BETWEEN:
GLOBAL DAIRY PRODUCTS LTD., a Bahamian company,
with its address at 00 Xxxxxxxxxx Xxxxxx, X.X. Xxx X-0000,
Nassau, Bahamas
(hereinafter referred to as "Licensor")
OF THE FIRST PART
AND:
SAY YES FOODS INC., a Nevada corporation, with its offices at
Park 2000, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0, Xxx Xxxxx,
Xxxxxx, 00000
(hereinafter referred to as "Licensee")
OF THE SECOND PART
WHEREAS:
A. The Licensor is the owner of a product (the"Product") which it has
developed as a substitute for milk in beverages and other products in
which milk is used and such Product has certain stated and represented
advantages, including a low lactose formulation, a low fat content, and
other benefits, including a competitive cost of formulation (the
Commercial Products produced from the Product are hereinafter referred
to as "Commercial Product");
B. The Licensor has agreed, on the terms of this Agreement, to grant unto
the Licensee the sole right and capacity to employ the Product to
produce, manufacture and market Commercial Product for a territory
encompassing the entirety of the United States, including Alaska,
Hawaii, and its administered territory of Puerto Rico (such
geographical jurisdictions hereinafter referred to as the "Territory").
ARTICLE I
GRANT
1.1 Grant of License. The Licensor hereby grants unto the Licensee an
exclusive license to employ the Product in the Territory for the
production and manufacture and marketing of Commercial Product for all
uses including, without limitation, as a beverage, as a frozen product,
for cheeses, and as an ingredient for other food products.
1.2 Delivery of Product. The Licensor will deliver to such location or
locations as the Licensee may reasonably require the Product in such
quantity as the Licensee may require for its production and
manufacture. Payment terms of such deliveries will be net thirty (30)
days.
1.3 Specifications. The Licensor will, at cost, provide to the Licensee all
necessary technical assistance and marketing assistance as may be
required by the Licensee to produce Commercial Product.
ARTICLE II
FEE
2.1 License Fee. As consideration for the grant of the license herein for
the Territory, the Licensee will pay to the Licensor an aggregate of Five
Hundred Thousand Dollars ($500,000.00) (U.S.) In the following portions:
(a) Twenty-five Thousand Dollars ($25,000.00) (U.S.) within thirty (30)
days of execution of this Agreement;
(b) One Hundred and Twenty-Five Thousand Dollars ($125,000.00) (U.S.) upon
the first non-private financing of the Licensee;
(c) One Hundred and Twenty-Five Thousand Dollars ($125,000.00) (U.S.) upon
the second non-private financing of the Licensee; and
(d) the balance on the third non-private financing of the Licensee.
In addition, the Licensee will distribute, on demand, Two Million, Five Hundred
Thousand (2,500,000) common shares (qualified pursuant to Rule 144) and such
shares shall have all of the same rights of common shares on the date of this
Agreement, and accordingly, shall be altered for any re-designation of the
authorized capital of the Company, the issued capital, in respect to any merger
or amalgamation, or any other capital change affecting common shares generally,
but shall not be adjusted for the mere issuance of common shares for cash for
the purpose of financing the Company or acquiring services or rights.
2.2 Product Fee to Licensor. Licensor shall publish a price list of its
products applicable to the Licensee. The initial base cost per litre of
concentrate will be twenty dollars ($20.00) (U.S.) And Licensor states
that such product is sufficient for production of four hundred and nine
(409) U.S.
gallons of end fluid milk product.
Such price lists may be amended annually at January 1st and no price increase
will exceed five percent (5%) unless mutually agreed to by both parties. It is
acknowledged that during the first twelve (12) months of this Agreement, the
base cost will be jointly reviewed every ninety (90) days and amended if
required.
2.3 Payment of Product Fees. The fee for Product delivered by the Licensor
shall be paid for by the Licensee on a net thirty (30) day basis.
ARTICLE III
TRADEMARKS AND PATENTS
3.1 Trademarks and Patents. The Licensee agrees that all trademarks,
patents and other intellectual property and proprietary information of
the Product and all improvements, derivatives or successors (all
collectively referred to as the "Technology") belong to and shall
belong to the Licensor and that the fee for the trademark, patents and
proprietary information for use by the Licensee is acknowledged to be
included in the price of concentrate sold by the Licensor.
3.2 Prohibition Against Dispute. The Licensee covenants and agrees that,
during and after the term of this Agreement, it will not contest the
Licensor's Technology, nor will it in any way dispute or impugn the
validity of the Licensor's ownership and trademark or patent therein.
3.3 Challenges to Trademark or Proprietary Information. The Licensee shall
immediately notify the Licensor of any infringement or challenge to the
trademark or patent or proprietorship of the Technology as soon as the
Licensee becomes aware of such infringement or challenge, and such
challenge shall be defended or prosecuted by the Licensor at the cost
of the Licensee where such infringement or challenge occurs within the
Territory of the Licensee.
ARTICLE IV
RELATIONSHIP OF PARTIES
4.1 Independent Contractor. The relationship between the Licensee and the
Licensor is that of independent contractors. The parties to this
Agreement are not partners, nor shall they be construed as the same,
nor, except as specifically permitted from time to time, shall either
party hold itself out as the agent or representative of the other
party.
4.2 Production Responsibility. It is specifically agreed that all
manufacturing or processing, services, or other work performed by the
Licensee in the production of the Commercial Product from the Product
shall be the sole responsibility of the Licensee, with the provision
that such work shall be performed in accordance with the specifications
and quality standards required by the Licensor and performed in such
manner and with such intent as shall protect the Technology of the
Licensor.
ARTICLE V
TERM
5.1 Term. This Agreement shall be effective commencing the date of
execution hereinbelow stated, and shall continue for a term of
ninety-nine (99) years, subject to termination in accordance with this
Agreement.
ARTICLE VI
INSURANCE
6.1 Product Liability Insurance. Both parties will obtain, and will
maintain throughout the term of this Agreement, product liability
insurance of the Product, with coverage limits considered reasonable in
the industry and in accordance with specifications required by the
Licensor. Licensor will also require any manufacturer that contracts
any Product production on behalf of the Licensor to also maintain such
insurance.
ARTICLE VII
RESTRICTIONS TO TERRITORY
7.1 Restriction to Territory. The Licensee covenants, agrees and warrants
with the Licensor that it will not at any time manufacture, market,
sell or distribute, whether directly or indirectly, Commercial Product
or engage or license others to do so, in any geographical area other
that the Territory.
ARTICLE VIII
PROPRIETARY INDEMNITY
8.1 Indemnity. During the term of this Agreement, and after termination for
default or otherwise, the Licensee covenants, warrants and agrees that
it will indemnify and compensate the Licensor for any loss of the
Technology or damage to the Technology or its reputation by any act,
commission, negligence, failure to act, or failure to defend the
Technology.
8.2 Product Protection. The Licensor covenants and agrees to protect the
Territory from any infringement by other parties attempting or
purporting to produce Product, or any competing equivalent which
infringes the Technology, and the Licensee shall indemnify the Licensor
for all such endeavors to protect the Territory and the Technology in
the Territory.
ARTICLE IX
RIGHT OF ENTRY
9.1 Investigation of Licensee Operations and Accounts. The Licensor shall
have unimpeded right and authority to enter on the premises of the
Licensee, its representatives, its agents, its counsel or any other
party having control or possession of records or premises of the
Licensee or in relation to its production of the Commercial Product for
the purpose of all such investigations as the Licensor may require to
assure itself as to the compliance by the Licensee with appropriate
technical standards, quality controls, security of the of the
Technology and use of the Technology. The Licensee covenants to allow
and assist the Licensor, and its duly authorized representatives,
access to all the aforesaid premises and locations and access to all
such personnel and other persons as the Licensor may require, and the
Licensee shall make such premises, records and persons available within
forty-eight (48) hours of notice by the Licensor.
ARTICLE X
ASSIGNMENT
10.1 Assignment. Neither this Agreement nor any rights or interests
hereunder may be assigned without the prior written permission of the
Licensor to all of the terms and conditions of an assignment or
sub-license.
ARTICLE XI
CONFIDENTIALITY
11.1 Confidential Information. All information in respect to the Technology,
whether documentary, electronic storage, or otherwise, shall be
maintained in confidence by the Licensee and the Licensee shall
establish security systems and control systems to the satisfaction of
the Licensor to protect the Technology.
ARTICLE XII
LICENSEE BUSINESS CONDUCT
12.1 Product Goodwill and Licensee Conduct. In the event that the Licensor
has a reasonable concern that the business of the Licensee, or the
conduct of any individual thereof, is being conducted in a way contrary
to law or is reasonably likely to bring disrepute to the Licensee, the
Technology or the Licensee's reputation, and thereby the reputation of
the Licensor, and the Licensee warrants and agrees to comply with, the
Licensor may require that the Licensee make such alterations in its
business conduct, personnel, or structure, whether of management or
board representation or employee representation, as the Licensor may
reasonably require, failing which the Licensor, at its discretion, may
cancel the licence with sixty (60) days' notice. In the event of any
debate or dispute as to the reasonableness of the Licensor's request or
requirements, the judgment of the Licensor shall be deemed correct
until such time as the matter has been determined by arbitration and,
accordingly, all such persons as have been determined by the Licensor
to be of concern shall be suspended from the Licensee's operations and
its premises at the cost of the Licensee until determination of the
matter.
ARTICLE XIII
DEFAULT AND TERMINATION
13.1 Default. In the event that a party hereof breaches a term of this
Agreement, the injured party may terminate the Agreement if the
defaulting party has not remedied the default within thirty (30) days
of notice of the default. If the injured party does not wish to
terminate the Agreement for default, it may instead insist and enforce
specific performance.
13.2 Termination. In the event that this Agreement is terminated, or at its
natural termination, the Licensee shall return to the Licensor all
information and documents it may have in respect to the Technology,
return all Technology in its possession, and cease the business of
producing Commercial Product. It shall not produce Commercial Product,
or any competing product for a period of five (5) years after
termination. Further, the Licensee shall not enter into any
partnerships, share ownerships, or any other relationship with any
party to produce products similar to the Product or the Commercial
Product for the said term of five (5) years, nor shall it provide any
assistance to any parties, whether technical, informational, or
otherwise, to compete with the Product or Commercial Products.
ARTICLE XIV
NOTICES
14.1 Notices. All notices, directions, or payments required to be given
hereunder shall be made at the addresses first herein set forth, or at
such other addresses as may be notified by the parties hereto. Any
notice, if sent by mail, shall be deemed delivered on the third
business day following mailing, absent postal disruption, and if
delivered or sent by facsimile transmission, shall be deemed to be
given or made on the business day following such delivery or facsimile
transmission.
14.2 Time of the Essence. Time shall be of the essence of this Agreement
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and shall continue to be of the essence of this Agreement.
ARTICLE XV
ENUREMENT
15.1 Enurement. This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted
assigns.
ARTICLE XVI
ENTIRE AGREEMENT
16.1 Entire Agreement. This Agreement contains and constitutes the entire
agreement of the parties hereto and there are no representations,
inducements, promises, or agreements, whether verbal or otherwise,
collateral hereto.
ARTICLE XVII
GOVERNING LAW
17.1 Jurisdiction. This Agreement shall be governed in accordance with the
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laws of the State of Nevada.
ARTICLE XVIII
ARBITRATION
18.1 Arbitration. The parties hereto agree that any dispute arising between
them in regard to this Agreement shall be resolved by arbitration
before a panel of three (3) arbitrators. One arbitrator shall be
selected by the Licensor, one by the Licensee, and the third by the two
appointed arbitrators. The arbitration shall determine by majority
vote, all matters, including matters of procedure and evidence of the
arbitration. Notwithstanding the within requirement for arbitration,
the Licensor, if it reasonably suspects that a breach of this Agreement
is occurring which may jeopardize the Technology, compromise
confidentiality of the Technology and information thereto, or assists
or causes any other party to acquire information thereto, or in the
event of non-compliance by the Licensee of Technical and Quality
Standards, or of clauses 9.1 or 12.1, and Licensor may immediately
apply to a court of competent jurisdiction, without notice to the
Licensee, and acquire thereto an injunction and the Licensee agrees
hereby to attorn to such injunction for the period of any dispute and
arbitration.
18.2 Decision of Arbitrators. The parties hereto agree that the decisions of
the arbitrator panel shall be binding as to issues of fact and may only
be appealed in the event of mistake by law.
IN WITNESS WHEREOF the parties hereto have executed this Agreement by their duly
authorized officers as of the 5 day of February , 1996.
GLOBAL DAILY PRODUCTS, LTD.
For:
Authorized Signatory
SAY YES FOODS, INC.
For:
Authorized Signatory
