LICENCE AGREEMENT
THIS AGREEMENT made as of the 4 th day of June, 2001.
BETWEEN:
MYCOBIOTECH LTD., a corporation valid arid existing under the laws of the
republic of Singapore and having its registered office at 00 Xxxxxxx Xxxx Xxxxx
# 00-00 Xxx Xxxxxx Xxxxxxxxx Xxxxxxx Xxxx 0, Xxxxxxxxx 000000,
(hereinafter referred to as the "Licensor")
OF THE FIRST PART,
-- and --
EVERBLOOM BIOTECHNOLOGY (CANADA) LTD.. a corporation valid and existing under
the laws of the province of Ontario, Canada and having its registered office at
0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx, X0X 0X0,
(hereinafter referred to as the "Licensee")
OF THE SECOND PART.
WHEREAS the Licensor has the exclusive worldwide rights to certain Proprietary
Marks (as hereinafter defined) and the Know-how/Technology (as hereinafter
defined);
AND WHEREAS the Licensee is desirous of obtaining, and the Licensor is desirous
of granting to the Licensee, the sole and exclusive right to use the Proprietary
Marks and the right to sublicense the Know-how/Technology for the manufacturing,
production, marketing and/or sale of the Products (as hereinafter defined) in
the Territory (as hereinafter defined), upon the terms and subject to the
conditions as hereinafter set out;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the respective
covenants and agreements of the parties contained herein, the sum of one dollar
paid by each party hereto to each of the other parties hereto and other good and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledged by each of the parties hereto) it is agreed as follows:
ARTICLE ONE
DEFINITIONS
1.1 Whenever used in this Agreement the following terms shall be deemed to have
the following meanings unless the context otherwise requires: -
"Business" shall mean the cultivation of Shiitake Mushrooms including the
production of Logs and Spawn as well as other exotic and medicinal mushrooms and
musl;u'oom by-products.
"Chemical Mix" shall mean the nutrients developed by the Licensor for the
cultivation of Shiitake Mushrooms and production of Logs and Spawn as well as
other exotic and medicinal mushrooms and mushroom by-products.
"Confidential Information"shall mean all information (whether written or verbal)
in and relating to the Documentation, Know-how/Technology and all other
information furnished by the Licensor to the Licensee relating to the business
and trade secrets of the Licensor, but shall exclude the following information.
(a) information which is or becomes available to the public through no fault of
the party receiving such information; and
(b) information which is subsequently received by any party from any third
party.
"Documentation" shall mean all drawings, specifications, manuals and any other
applicable media and documentation relating to the Know-how/Technology or its
usage thereof including all materials useful for design (for example, logic
manuals, flow charts and principles of operation) and machine-readable text or
graphic files subject to display or printout, and all advertising, promotional,
commercial and publicity pamphlets, brochures, leaflets and other materials
whatsoever relating to the Products.
"Improvements" shall mean all future improvements relating to
Know-How/Technology and Technical Information and Documentation.
"Know-how/Technology" shall mean all information and data including formulae,
Technology, design specifications, techniques, procedures, plans, discoveries
and inventions (whether patented or not) as used at any time by the Licensor in
growing, marketing and selling Shiitake Mushrooms including the production of
Logs and Spawn as well as other exotic and medicinal mushrooms and mushroom
by-products, at their facilities in Singapore and by any other licensees
wherever legally possible, which pertain to the use and exploitation of the
Process or the cultivation or marketing and sale of Shiitake Mushrooms by means
of the Process, together with any further information or date pertaining thereto
as may be available to the Licensor.
"Logs" shall mean raw materials comprising pre-formulated materials such as
chopped wood and/or sawdust and Chemical Mix mixed with water in the proper
ration according to the Licensor's Know-how/Technology.
"Materials" shall mean Logs, Spawn and Chemical Mix.
"Parties" shall mean the Licensor and the Licensee.
"Plant" shall mean a facility in North America designed and approved by the
Licensor to produce fresh Shiitake Mushrooms or other exotic mushrooms, using
the Technical Information, Documentation and Improvements provided by the
Licensor hereunder. The land and investment for the Plant will be comafiitted by
the Licensee.
"Process" shall mean the process to produce fungi of the species ohlltake by the
means described in USA PatentNos. 4,833,821 / 4,987,698 / 4,542,608
"Products" shall mean the products listed in the Schedule "A" attached hereto.
"Proprietary Marks" shall mean the trade marks, trade names, logos, designs,
symbols, emblems, insignia, fascia, slogans and other identifying marks whether
or not registered or capable of registration now or at any time hereafter
adopted by the Licensor for use in conne, ction with any Product and/or the
Know-how/Technology.
"Shiitake Mushrooms" shall mean the fungi of the species Lentinus edodes
cultivated according to the Process or any part thereof.
"Spawn" shall mean the spawn of the species Lentinus edodes produced according
to the Licensor's Know-how/Technology.
"Technical Information" shall mean the information, know-how, data, formulae,
specifications, techniques, designs, procedures, plans, discoveries and
inventions (whether patented or not) available with the Licensor and relating to
the following, in so far as the same has been commercially tested and used and
found to be successful, including (but not limited to):
(a) design, engineering, fabrication, erection and installation of plant,
machinery and equipment required for the production of Product and sources
of supply thereof;
(b) production processes and methods, operating conditions, pollution and
quality control and testing and product development in respect of Product;
and
(c) chemical mixes and all other materials and ingredients to be used in the
production of the Product including instructions on the required quantities
and the characteristics thereof and their treatment in the production of
Product as well as sources of supply thereof.
ARTICLE TWO
GRANT OF LICENCE
2.1 Provision of Documentation. The Licensor hereby grants to the Licensee, and
the Licensee hereby accepts a sole, perpetual and exclusive license to use,
and the right to sublicense the Proprietary Marks, Know-how/Technology,
Technical Information and Documentation as well as all Improvements thereon
for the cultivation, manufacturing, production, marketing and/or sale of
the Products (the "Rights").
2.2 Territory. The Rights granted to the Licensee pursuant to this Agreement
shall extend to the United States, Mexico and Canada (hereinafter called
the "Territory").
2.3 Cultivation, Marketing and Distribution. The Licensor acknowledges and
agrees that the Liceffsee shall be using the Proprietary Marks,
Know-how]Tedfmology, Documentation, Technical Information and the Process
to cultivate, market and distribute Shiitake Mushrooms and other exotic,
edible and medicinal mushrooms and mushroom by-products throughout the
Territory.
2.4 Sub-licence. The Licensor hereby grants to the Licensee the right to
sub-licence any and all of the rights granted to the Licensee as set out in
this Agreement to sub-licensees at the sole discretion of the Licensee,
such sub-license agreements and the parties therein to be fully disclosed
and communicated to the Licensor.
ARTICLE THREE
CONSIDERATION
3.1 Licence Fees. In consideration of the rights and licence granted: and the
duties and obligations of the Licensor as set out herein, the Licensee
shall pay to the Licensor a technology fee of $1,000,000.00 USD net of all
taxes (including but not limited to withholding taxes), dues, charges and
expenses. Said fee shall be satisfied by the issuance of 99,500 common
shares of the Licensee.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF THE LICENSOR
4.1 The Licensor represents and warrants to the Licensee that the Licensor has
the exclusive worldwide license to the Proprietary Marks,
Know-how/Technology, Documentation and Process including without limiting
the generality of the foregoing all rights in and to the patents,
trademarks and other intellectual property as set out in this Agreement and
that the Licensor has the sole and exclusive right to authorize the use of
such patents, trademarks and other intellectual property by the Licensee in
accordance with the provisions of this Agreement.
ARTICLE FIVE
COVENANTS OF THE LICENSOR AND THE LICENSEE
5.1 The Licensee covenants and agrees to do the following throughout the term
of this Agreement:
(a) to operate and maintain proper accounting procedures in accordance with
generally accepted accounting principles.
(b) to keep at its registered office true and accurate records, accounts, books
and data ("Business Records") which shall accurately reflect all
particulars relating to the Business and shall submit to the Licensor such
information and reports concerning the Business in such form as may be
specified by the Licensor.
(c) to submit quarterly Statement of Sales and Royalties Payable within 60 days
after the end of each quarter.
(d) to submit financial reports relating to the Business on a half-yearly
basis, not later than 60 days after the mid-year and year-end dates.
(e) to submit annual audited accounts of the Business wiithin 180 days after
the year end.
(f) to preserve and keep all Business Records for a price as required by local
tax laws. The Licensee shall further ensure that each and every covenant
referred to above will also be obtained from any and all sub-licensees and
same shall be forwarded to the Licensor.
5.2 The Licensor covenants and agrees to do the following throughout the term
of this Agreement:
(a) to furnish to the Licensee and its sub-licensees all Know-how/Technology,
Technical Information, Documentation and Improvements and render all
assistance necessary to enable the Licensee and its sub-licensees to
successfully establish the Plant and to produce and cultivate the Product.
(b) without limiting the generality of the foregoing, the Licensor shall, from
time to time, provide to the Licensee and its sub-licensees, complete and
up-to-date Know-how/Technology, Technical Information, Documentation and
Improvements as it becomes available.
(c) to enable the Licensee and its sub-licensees to design, engineer, erect,
install and commission the Plant and all machinery and equipment therein
and to successfully produce, develop and sell the Product.
(d) to enable the Licensee and its sub-licensees to procure suitable machinery,
equipment and spares at reasonable prices and to fabricate and manufacture
the same indigenously in Canada;
(e) to enable the Licensor and its sub-licensees to procure in the
international markets, alternative raw materials, consumables and other
imputs necessary for production of Product at reasonable prices.
All Technical Information and Documentation referred to abow~ shall be furnished
in English and shall be delivered to the Licensee within thirty (30) days of the
Effectiw," Date.
ARTICLE SIX
TRAINING OF THE LICENSEE'S PERSONNEL
6.1 During the tenure of this Agreement, the Licensor shall train the
Licensee's personnel at the Plant as well as at other suitable factories
for the proper use and exploitation of Technical Information, Documentation
and Improvements furnished hereunder and for development of new products
and articles. For this purpose, the Licensor shall deploy, for a duration
of not more than one month at any one time, as and when necessary,
sufficiently knowledgeable and experienced consultants to the Plant.
6.2 Any such consultants deployed by the Licensor shall, during their stay in
Canada, observe all rules 2 ~" and regulations that apply to Licensee's
employees.
6.3 The personnel to be trained, the consultants to be deployed and the periods
of such training, shall be as agreed by the parties from time to time.
6.4 All expenses incurred in connection with the training of the Licensee's
personnel at the Plant and elsewhere shall be borne by the Licensee unless
otherwise mutually agreed to by the parties.
6.5 - The Licensee shall pay the Licensor a consultant's fee to benegotiated on
an individual basis and shall meet the actual expense of the Licensor
consultants deployed in Canada, in respect of their travel, board and
lodging; but no daily or other fees or remuneration will be paid to them.
ARTICLE SEVEN
MANAGEMENT OF PLANT
7.1 During the tenure of this Agreement and on mutual agreement, the Licensor
shall deploy its personnel in such numbers, not exceeding three (3) at any
one time, as are necessary to supervise, oversee and manage the operation
of the Plant, as agreed by the Parties from time to time.
7.2 All costs and expenses incurred or accrued to the personnel shall be borne
and paid by the Licensee. The costs and expenses shall include, but are not
limited to, remuneration, salary, board, lodging, travel, transportation
and other reasonable amenities.
7.3 In addition to the deployment of the Licensor's technical persormel to
assist in the operation of the Plant as may be agreed from time to time,
the Licensor shall arrange for a senior consultant to visit the Plant to
review production and technical issues with the Licensee's management once
a year and such traveling, accommodation, meals and out-of-pocket expenses
shall be borne by the Licensee.
ARTICLE EIGHT
ROYALTIES AND PAYMENTS
8.1 As consideration for the continual transfer of the Know-how/Technology, the
Licensee shall pay the Licensor a royalty equivalent to 3% of the ex-farm
value of Shiil:ake mushrooms and other exotic mushrooms produced utilizing
the Know-how/Technology in the Territory by the Licensee or Sub-Licensee(
s). Should product produced utilizing the Know-how/Technology in the
Territory by the Licensee or Sub-Licensee(s) be sold between the Licensee
and Sub-Licensee(s), the value to be used royalty determination shall be
the greater.
8.2 Such royalties due under Clause 8.1 above shall be due immediately after
the end of the quarter and payable within 60 days from that date without
the need for a demand from the Licensor. Any late payment shall attract
interest calculated at the rate of 1.0% per month from the due date.
8.3 Time will run from the date on which domestic production of sawdust and
logs commences on a commercial basis.
8.4 Any improvements to the Know-how/Technology shall be passed on to the
Licensee and its sub-licensees without any further requirement of payments
of fees or royalties.
ARTICLE NINE
MARKETING OF PRODUCTS
9.1 The Licensor agrees to use their best endeavors to assist the Licensee to
market the Products. Such-sales shall be under the brand "EVERBLOOM" or
such other(degree)names as shall be mutually agreed to by the parties.
9.2 As consideration thereof, the Licensee agrees to pay to the Licensor a
commission of 10% on the sales attributed solely or partially to the
Licensor.
9.3 Except with the written consent of the Licensor, the Licensee and its
sub-licensees shall not export its products to territories where the
Licensor already has a presence directly or indirectly.
ARTICLE TEN
SUPPLY OF RAW MATERIALS AND COMMERCIAL SERVICES
10.1 In the event that the Licensee requires any raw materials for the,
production and cultivation of the Product and makes a written request for
the same, the Licensor shall supply the same at such prices and on such
other terms as may mutually be agreed upon.
10.2 The Licensor will assist the Licensee in the sourcing/supply of machinery
and consumables required to set up and operate the Plant, as and when
called upon to do so by the Licensee.
10.3 The raw materials shall include the Chemical Mix, which shall be supplied
by The Licensor at a price to be agreed.
ARTICLE ELEVEN
TERM OF AGREEMENT
11.1 Term of Agreement. This Agreement shall come into effect on its date of
execution and shall continue in full force and effect for an indefinite
period of time, unless terminated earlier in accordance with the terms set
out below.
11.2 Termination of Agreement. The Licensor shall be entitled to terminate this
Agreement where the Licensee breaches any of its covenants and obligations
in this Agreement including without limiting the generality of the
foregoing:
(a) if the Licensee fails to submit when due the Statement of Sales and
Royalties Payable and financial reports which the Licensor is entitled
to under this Agreement;
(b) if the Licensee fails to make payment of amounts due under this
Agreement within 60 days when they fall due; and
(c) in the event that the Licensee is liquidated, dissolved or becomes
insolvent or bankrupt or is placed under judicial management or the
control of receivers, or trustees then the Licensor shall have the
right to terminate this Agreement after giving the Licensee written
notice setting out such default and sixty (60) days to rectify the
default. If after sixty (60) days have elapsed, Licensee has failed to
cure said default, this Agreement shall be terminated forthwith and
the Licensee shall not be entitled to reimbursement of any fees paid
by the Licensee as of the date of termination.
11.3 Injunction. The Licensor shall be entitled to an injunction to restrain the
Licensee from engaging in any activities which constitute a breach of any
of the provisions of this Agreement without limiting any other legal or
equitable remedies available to the Licensor.
11.4 The Licensee's Right Terminate. In the event that the Licensor shall breach
any of its covenants and obligations in this Agreement or in the event that
the Licensor is liquidated, dissolved or becomes insolvent or bankrupt or
is placed under judicial management or the control of receivers or
trustees, the Licensee shall have the right to terminate this Agreement
after giving the Licensor written notice setting out such default and
thirty (30) days to rectify the default- If after thirty days have elapsed,
the Licensor has failed to cure said default, this Agreement shall be
terminated forthwith.
11.5 Termination Not to Relieve Obligations of Parties. Any termination pursuant
to this Agreement shall not relieve any party of any obligation or
liability accrued hereunder prior to such termination or rescind or give
rise to any right to rescind anything done by any party hereunder prior to
the time such termination becomes effective and such termination shall not
affect in any manner any rights of any party arising under this Agreement
prior to such termination.
ARTICLE TWELVE
GOVERNMENTAL APPROVALS
12.1 The Parties hereto undertake to obtain from their respective Governments
all approvals and authorizations, necessary or required for the
implementation of the provisions of this Agreement.
12.2 Should approval or authorization from the respective Governments be
subsequently withdrawn for any reason whatsoever, this Agreement shall
automatically be terminated unless otherwise agreed between the Parties.
ARTICLE THIRTEEN
CONFIDENTIALITY
13.1 Each Party hereto undertakes to keep secret all information of a
confidential or secret nature supplied by one Party to the other pursuant
to this Agreement and agrees not to disclose any of such information to the
public or to any third party during the term of this Agreement and
following the expiration thereof without the express prior consent in
writing of the supplying Party and each Party in receipt of such
information is to ensure that it discloses such information only to
responsible employees and consultants whose duties are in furtherance of
the objectives of this Agreement and which cannot be fulfilled without use
by such Party of the information and where it is relevant to those duties
and who are under binding obligations to keep secret such of the
information as is necessarily disclosed to them.
ARTICLE FOURTEEN
RELATIONSHIP OF PARTIES AND INDEMNIFICATION
14.1 The Licensee agrees that the Licensor is not in any way a.fiduciary of the
Licensee.
14.2 The Licensee shall indemnify the Licensor, its officers, directors,
employees, agents, affiliates, successors and assigns against:
(a) any and all claims, damages, or liabilities based upon, arising out
of, or in any way related to any negligence or act or omission by the
Licensee or any of its agents, contractors, servants, employees or
licensees, and any obligation of the Licensee incurred pursuant to any
provision of this Agreement.
(b) any or all fees (including reasonable attorney's fees), costs and
other expenses incurred or on behalf of the Licensor in the
investigation, defence or prosecution of any and all claims.
ARTICLE FIFTEEN
GENERAL CONTRACT PROVISIONS
15.1 Notices All notices or other communication to the Licensee required by the
terms of this Agreement shall be in writing and sent by registered mail,
addressed to Everbloom Biotechnology (Canada) Ltd. at 0000 Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxx, X0X 0X0, or such other address as the Licensee
shall designate in writing, or by facsimile or to such address confirmed by
registered mail.
All notices or other communication to the Licensor contemplated by the terms of
this Agreement shall be in writing and sent by registered mail, return receipt
request, addressed to Mycobiotech Ltd. at 00 Xxxxxxx Xxxx Xxxxx # 00-00 Xxx
Xxxxxx Xxxxxxxxx Xxxxxxx Xxxx 0, Xxxxxxxxx 000000, or such other address as the
Licensor shall designate in writing or by facsimile at (00) 000-0000 or to such
address confirmed by registered mail.
If by registered mail, any notice shall be deemed to have been given when
received, or if by facsimile, when the appropriate confirmation is received.
15.2 Assignment The Licensee and its Sub-Licensees shall not be entitled at any
time to assign this Agreement or any part hereof except with the previous
written consent of the Licensor such consent not to be unreasonably
withheld.
15.3 Time of the Essence Time shall be of the essence of this Agreement and of
every part hereof and no extension or variation of this Agreement shall
operate as a waiver of this provision.
15.4 Entire Agreement This Agreement constitutes the entire Agreement between
the Parties with ,~- respect to all of the matters herein and its execution
has not been induced by, nor do any of the parties rely upon or regard as
material, any representations or writings whatever not incorporated herein
and made a part hereof and may not be amended or modified in any respect
except by written instrument signed by the parties hereto. Any schedules
referred to herein are incorporated herein by reference and form part of
the Agreement.
15.5 Additional Considerations The parties shall sign such further and other
documents, cause such meetings to be held, resolutions passed and by-laws
enacted, exercise their vote and influence, do and perfo-'rm and cause to
be done and performed such further and other acts and things as may be
necessary or desirable in order to give full effect to this agreement and
every part thereof.
15.6 Enurement This Agreement shall enure to the benefit of and be binding upon
the parties and their respective successors and assigns.
15.7 Waiver No omission or delay on the part of any Party in exercising its
rights under this Agreement shall operate as a waiver thereof, nor shall
any single or paxtial exercise by any Party of any such right preclude the
further or other exercise thereof or the exercise of any other right which
it may have. Failure of either Party to require performance by the other
party of any provision hereof shall in no way affect the full right to
require such performance at anytime thereafter. Nor shall the waiver by
either party of a breach of any provision hereof be taken or held to be a
waiver" of any succeeding breach of such provision or as a waiver of the
provision itself.
15.8 Severability If any Article, Section or any portion of any Section of this
Agreement is determined to be unenforceable or invalid for any reason
whatsoever that unenforceability or invalidity shall not affect the
enforceability or validity of the remaining portions of this Agreement and
such unenforceable or invalid Article, Section or portion thereof shall be
severed from the remainder of this Agreement.
15.9 Headings for Convenience Only The division of this Agreement into articles
and sections is for convenience of reference only and shall not affect the
interpretation or construction of this Agreement.
15.10Governing Law This Agreement shall be governed by and construed in
accordance with the laws of the Republic of Singapore and the Parties agree
to submit to the non-exclusive jurisdiction of the courts of the Republic
of Singapore.
15.11Gender In this Agreement, words importing the singular number shall
include the plural and vice versa, and words importing the use of any
gender shall include the masculine, feminine and neuter genders and the
word "person" shall include an individual, a trust, a partnership, a body
corporate, an association or other incorporated or unincorporated
organization or entity.
15.12Calculation of Time When calculating the period of time within which or
following which any act is to be done or step taken pursuant to this
Agreement, the date which is the reference date in calculating such period
shall be excluded. If the last day of such period is not a Business Day,
then the time period in question shall end on the first business day
following such non-business day.
15.13Counterparts This Agreement may be executed in several counterparts, each
of which so executed shall be deemed to be an original and such
counterparts together shall be but one and the same instrument.
IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date
and year written above.
MYCOBIOTECH LTD.
Per:
Authorized Signing Officer
Witness
EVERBLOOM BIOTECHNOLOGY (CANADA) LTD..
