SUBLICENSE AGREEMENT
THIS SUBLICENSE AGREEMENT made as of December 31, 1993, by and between R
& P Liquid Egg Technology Limited Partnership, a New Jersey limited partnership,
(the "Licensor"), 0 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, and Papetti's
Hygrade Egg Products, Inc., a New Jersey corporation, (the "Licensee"), having a
place of business at 0 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
RECITALS:
WHEREAS, Raztek Corporation ("Raztek"), having a place of business at
000 Xxxxxxx Xxxxx, Xxxxx 0, Xxxxxxxxx, Xxxxxxxxxx 00000, is the owner of U.S.
Patent No. 4,739,140 and of a disclosure document filed with the United States
Patent and Trademark Office on July 3, 1989, entitled "Coagulation of Egg Whites
and Yolk by Electro-heating," and has developed and owns various other technical
information relating to the processing and/or treatment of eggs, the processing
and/or treatment of foodstuffs generally, and/or the processing and/or treatment
and/or development of non-food related products and processes;
WHEREAS, Raztek has granted the Licensor (i) the exclusive U.S. license
to make, have made, use, sell and/or sublicense technology applying Raztek's
patent and know-how for liquid egg products and (ii) the nonexclusive right
outside of the U. S. to make, have made, use, sell and/or sublicense Raztek's
liquid egg technology; and
WHEREAS, the Licensee and its affiliates desire to license the
exclusive U.S. right possessed by the Licensor to make, use and sell Raztek's
liquid egg technology;
NOW THEREFORE, in consideration of the mutual promises set forth herein,
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
Article I - Definitions
Section 1.1. The term "Affiliates of Licensee" includes any subsidiary
company in which the Licensee owns a controlling interest, provided that such
subsidiary company agrees in writing to be bound by the terms of this Sublicense
Agreement. The term "Affiliates of Licensee" also includes any corporation,
partnership, joint venture, or limited liability company in which one or more of
the owners of the Licensee singly or collectively own a controlling interest,
provided that any such entity agrees in writing to be bound by the terms of this
Sublicense Agreement. "Controlling interest" for purposes of this Section 1.1
means at least fifty percent (50%) ownership, or, if the entity is a
corporation, such ownership as is sufficient to elect and/or appoint officers
and members of the board of directors.
Section 1.2. The term "Gross Income" means the gross income of the
Licensee and the Affiliates of the Licensee less any credit actually given and
less any charges for delivery.
Section 1.3. The term "Licensee" means Papetti's Hygrade Egg Products,
Inc., and any of its divisions.
Section 1.4. The term "New Technology" shall have the same definition as
set forth in Section 3.15 of the Partnership Agreement.
Section 1.5. The term "Partnership Agreement" means the Agreement of
Limited Partnership organizing the Licensor and dated as of the date of this
Sublicense Agreement, pursuant to which the Licensor has acquired the exclusive
U.S. and a nonexclusive worldwide license to make, use, sell, and sublicense the
Raztek Liquid Egg Technology and the New Technology.
Section 1.6. The term "Raztek Liquid Egg Technology" shall have the same
definition as set forth in Section 3.19 of the Partnership Agreement.
Article II - Grant of License
Section 2.1. The Licensor hereby grants to the Licensee and to the
Affiliates of the Licensee the exclusive license in the United States and the
nonexclusive license outside of the United States to make, have made, use,
and/or sell Raztek Liquid Egg Technology and New Technology.
Notwithstanding the grant of the exclusive U.S. license to the Licensee, the
Licensor and the Licensee agree that the Licensor shall continue to possess the
right to sublicense the right to make, have made, use, and/or sell Raztek Liquid
Egg Technology and New Technology within the United States for so long as the
Licensee's interest as a limited partner in the Licensor has not been assigned
to a person who is admitted as a substituted limited partner in the Licensor in
place of the Licensee.
Section 2.2. The grant of the license in Section 2.1 shall be effective
as to the Licensee as of the date of this Agreement and shall be effective as to
any Affiliates of the Licensee as of the date each such Affiliate consents in
writing to be bound by the terms of this Sublicense Agreement.
Section 2.3. The Licensee and the Affiliates of the Licensee shall have
the option to discontinue the exclusive license in the United States granted in
Section 2.1 and convert it into a nonexclusive license in the United States.
This option must be exercised in writing signed by the Licensee and Affiliates
of the Licensee and delivered to the place of business of the Licensor, with a
copy delivered by telefax and by first class mail to Raztek, at least twelve
(12) months prior to the date that discontinuation of the exclusive license is
to become effective.
Article III - Royalties
Section 3.1. During any period that the Licensee and the Affiliates of
the Licensee retain exclusive license rights in the United States, the Licensee
shall pay the Licensor for the rights granted to said Licensee and Affiliates
with respect to both the Raztek Liquid Egg Technology and the New Technology
__*__ the Affiliates of the Licensee shall pay the Licensor for the rights
granted to said Licensee and Affiliates with respect to both the Raztek Liquid
Egg Technology and the New Technology an amount equal to __*__ processed with
the use of the Raztek Liquid Egg Technology. Royalties shall be paid on a
monthly basis at, generally, a minimum rate of __*__ to reflect the minimum
royalty of __*__ by the Licensee over a 12 month period. Any royalty payment
based on __*__ shall be paid within thirty (30) days of the end of
__*__ Confidentiality requested for this portion.
the month in which such gross income was earned under the accrual method of
accounting. Notwithstanding the requirement that minimum royalties generally be
paid at the rate of __*__, the Licensor and Licensee agree that all minimum
royalties for a 12 month period shall be completely creditable against royalties
paid by the Licensee for such 12 month period based on __*__, but only for such
12 month period.
Section 3.2. During any period that the Licensee and the Affiliates of
the Licensee have discontinued, in accordance with Section 2.2 above, exclusive
license rights in the United states, the Licensee shall pay the Licensor for the
rights granted to said Licensee and Affiliates with respect to both the Raztek
Liquid Egg Technology and the New Technology __*__ with the use of the Raztek
Liquid Egg Technology or (b) __*__ the Affiliates of the Licensee shall pay the
Licensor for the rights granted to said Licensee and Affiliates with respect to
both the Raztek Liquid Egg Technology and the New Technology an amount equal to
__*__ with the use of the Raztek Liquid Egg Technology. Royalties shall be paid
on a monthly basis at, generally, __*__. Any royalty payment based on __*__
shall be paid within thirty (30) days of the end of the month in which such
gross income was earned under the accrual method of accounting. Notwithstanding
the requirement that minimum royalties generally be paid at the __*__ the
Licensor and Licensee agree that all minimum royalties for a 12 month period
shall be completely creditable against royalties paid by the Licensee for such
12 month period based __*__, but only for such 12 month period.
Section 3.3. The Licensee and the Affiliates of the Licensee shall pay
the Licensor __*__. Any royalty payment based __*__ shall be paid within thirty
(30) days of the end of the month in which such gross income was earned under
the accrual method of accounting. The Licensor and Licensee agree that minimum
royalties for a 12 month period payable pursuant to Section 3.1 or Section 3.2,
as the case may be, shall also be completely creditable against royalties paid
by the Licensee for such 12 month period based __*__, but only for such 12 month
period and only to the extent that
__*__ Confidentiality requested for this portion.
such minimum royalties have not been credited against gross income royalties
under Section 3.1 or Section 3.2 or as the case may be.
Section 3.4. The Licensor may, from time to time, within __*__ in which
a royalty payment under this Article III was due, audit the records of relevant
transactions for such month(s), at the Licensor's expense. If, upon performing
such audit, it is determined that the Licensee and the Affiliates of the
Licensee have underpaid the Licensor by __*__ due the Licensor in the period
being audited, the Licensee will bear all reasonable expenses and costs of such
audit in addition to the obligation to make full payment. In all other cases,
the Licensor will bear the cost of such audit; provided, however, that in all
cases in which an audit identifies any underpayment by the Licensee and/or
Affiliates of the Licensee to the Licensor, the Licensor shall be promptly paid
the full amount of any such underpayment, together with interest on all overdue
amounts __*__.
Article IV - Termination
Section 4.1. The Licensor has the right to terminate this Sublicense
Agreement if the Licensee and the Affiliates of the Licensee fail to make the
royalty payments required by Article III. However, prior to termination, the
Licensor will provide the Licensee with a written notice, with a copy delivered
by telefax and first class mail to Raztek, which will state, with particularity,
the grounds for termination. Thereafter, the Licensee and the Affiliates of the
Licensee shall have a period of thirty (30) days from the date of receipt of the
written notice in which to cure any deficiencies or make any necessary payments.
If the Licensee and the Affiliates of the Licensee take such action within such
thirty-day period, the Sublicense Agreement will continue in force.
Section 4.2. The Licensee has the right to terminate this Sublicense
Agreement by written notice for any reason or no reason. The written notice
terminating this Sublicense Agreement must be signed by the Licensee and
Affiliates of the Licensee and delivered to the place of business of the
Licensor, with a copy delivered by telefax and by first class mail to Raztek, at
least twelve (12)
__*__ Confidentiality requested for this portion.
months prior to the date that termination is to become effective (which "date of
termination" must be specified in the written notice).
Section 4.3. This Sublicense Agreement shall also automatically
terminate in the event that the Licensor dissolves as a result of an event of
dissolution specified in Section 19.2(c) or (d) of the Partnership Agreement.
The "date of termination" under this Section 4.3 shall be effective as of the
date of dissolution of the Licensor pursuant to Section 19.2(c) or (d) of the
Partnership Agreement.
Section 4.4. In the event of termination, all of the rights of the
Licensee and Affiliates of the Licensee to the Raztek Liquid Egg Technology and
the New Technology will terminate as of the date of termination. However, the
Licensee and Affiliates of the Licensee shall remain liable for payment of
royalties accrued to the date of dissolution.
ARTICLE V
CONFIDENTIALITY
Section 5.1. Except as provided in Section 5.3, the Licensor,
Licensee, and Affiliates of Licensee mutually agree to maintain in confidence
and not to use any Confidential Information of any other party which is received
during the course of this Agreement. The Licensor's Confidential Information is
the Raztek Liquid Egg Technology, the New Technology, and any other information
marked as confidential. The Confidential Information of the Licensee and
Affiliates of the Licensee is any information marked confidential.
Section 5.2. All parties agree not to use any of the other
parties Confidential Information except in furtherance of this Sublicense
Agreement. Furtherance of this Sublicense Agreement includes the validation of
products and/or procedures to any appropriate agency of the United States
Federal Government, or any state or foreign government, and contracting with
vendors or consultants on various matters in connection with any of the
transactions contemplated by this Agreement.
Section 5.3. Confidential Information will not include information
which:
(a) is now, or hereafter becomes, through no act or failure
to act on the part of the receiving party, generally known or available to the
public;
(b) can be shown by written records to have been acquired by
the receiving party before receiving such information from the disclosing party
and without restriction as to use or disclosure;
(c) is hereafter rightfully furnished to the receiving party
by a third party, without restriction as to use or disclosure;
(d) is information which the receiving party can document was
independently developed by the receiving party;
(e) is required to be disclosed pursuant to law, provided the
receiving party uses reasonable efforts to avoid disclosure; or
(f) is disclosed with the prior written consent of the
disclosing party.
Section 5.4. The obligations of confidentiality in this Article V
shall survive the termination of this Sublicense Agreement.
ARTICLE VI
MISCELLANEOUS
Section 6.1. This Agreement (together with those provisions of the
Partnership Agreement incorporated herein by reference) constitutes the entire
agreement among the parties. It supersedes any prior agreement or understandings
among them, and it may not be modified or amended in any manner other than in
writing signed by the Licensor and the Licensee.
Section 6.2. This Agreement and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the laws of the State of
New Jersey.
Section 6.3. Except as herein otherwise specifically provided, this
Sublicense Agreement shall be binding upon and inure to the benefit of the
parties and their legal representatives, heirs, administrators, executors,
successors and assigns.
Section 6.4. Wherever from the context it appears appropriate, each
term stated in either the singular or the plural shall include the singular and
the plural and pronouns stated in either the masculine, the feminine or the
neuter gender shall include the masculine, feminine and neuter.
Section 6.5. Captions contained in this Sublicense Agreement are
inserted only as a matter of convenience and in no way define, limit, or extend
the scope or intent of this Agreement or any provision hereof.
Section 6.6. If any provision of this Agreement or the application
of such provision to any person or circumstance, shall be held invalid, the
remainder of this Agreement or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
Section 6.7. This Sublicense Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. In addition, this Agreement may contain
more than one counterpart of the signature page, and this Agreement may be
executed by the affixing of the signatures of each of the Partners to one of
such counterpart signature pages; all of such counterpart signature pages shall
be read as though one, and they shall have the same force and effect as though
all of the signers had signed a single signature page.
IN WITNESS WHEREOF, the undersigned have executed this Sublicense
Agreement on the 31 day of December, 1993, intending it to be effective as of
such date.
LICENSOR:
R & P Liquid Egg Technology
Limited Partnership
By: Papetti Electroheating
Corporation,
Its General Partner
By: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx, President
LICENSEE:
Papetti Hygrade Egg
Products, Inc.
By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, President
