A G R E E M E N T A N D L I C E N S E
10.8
THIS AGREEMENT AND LICENSE (this "Agreement") is made, as of the 27th day
of September, 1996 (the "Effective Date") by and among Biospherics Incorporated,
a corporation of the State of Delaware with offices located at 00000 Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx, XX 00000, Xxxxxx Xxxxxx ("LICENSOR"), and MD Foods
Ingredients amba, a corporation of Denmark with offices located at
Xxxxxxxxxxxxxx 000 0000 Xxxx X, Xxxxxxx, ("LICENSEE").
W I T N E S S E T H
WHEREAS, LICENSOR owns certain Intellectual Property Rights (as hereinafter
defined) relating to the Licensed Products (as hereinafter defined) and Licensed
Process (as hereinafter defined); and
WHEREAS, LICENSOR has the exclusive right to license the Intellectual
Property Rights hereinafter described; and
WHEREAS, LICENSEE desires to obtain from LICENSOR, and LICENSOR desires to
grant to LICENSEE, an exclusive, worldwide License (as hereinafter defined)
under the Intellectual Property Rights in respect to the Licensed Products,
Licensed Use and Licensed Process on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual agreement so,
representations, warranties and undertakings contained herein the parties hereto
agree as follows:
1. DEFINITIONS
(a) "Foodstuff" shall mean any material defined by the U.S, Food & Drug
Administration (FDA) as a "food," including beverages other than "Soft
Drinks" as herein defined, and not "drugs" as defined by the FDA*
(b) "LICENSOR" shall mean Biospherics Incorporated and its Affiliated Entities.
(c) "LICENSEE" shall mean MD Foods ingredients amba and its Affiliated Entities
(d) "License" shall mean the license described in Section 2.
(e) "Licensed Product(s)" shall mean D-tagatose in any form
(i) for use in any Foodstuff, Soft Drink or Drug; or
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(ii) any Foodstuff or Soft Drink containing D-tagatose whether or not the
subject of any of the Patent Rights.
(f) "Licensed Process" shall mean any process developed heretofore or
hereinafter during the term of this Agreement, by or for the benefit of
LICENSOR, for manufacturing D-tagatose for any Licensed Use or to make
Licensed Product.
(g) "Licensed Use" shall mean any use of D-tagatose as an ingredient in a
Foodstuff or Soft Drink developed heretofore or hereinafter during the term
of this Agreement, by or for the benefit of LICENSOR, whether or not the
subject of any Patent Rights.
(h) "Patent Rights" shall mean the patents and patent applications listed in
Schedule A and all additional patents and patent applications, if any,
which have been or may in the future be issued or filed by or on behalf of
LICENSOR, (and/or its officers, and/or its directors and/or its employees)
concerning the Licensed Product and/or Licensed Process and/or Licensed Use
and all improvements, thereto, as well as all extensions, divisions,
revalidations, reissuances, additions or other continuations or renewals
thereof.
(i) "Know-How" shall mean all of LICENSOR's know-how, improvements, formulas,
methods, plans, processes, specifications, designs, experience, trade
secrets, technology, techniques, documentation, drawings, writings,
applications to the FDA or other governmental agencies reflecting the
LICENSOR' s special ability, skill and knowledge relating to the Licensed
Product and/or Licensed Process and/or Licensed Use and useful in the
production, sale or use of D-Tagatose.
(j) "Intellectual Property Rights" shall mean the Patent Rights and Know-How.
(k) "Agreement" shall mean this document or any modifications, revisions or
amendments thereof signed and executed by or on behalf of LICENSOR and
LICENSEE after the date hereof but shall not include any agreements or
understandings whether written or oral, entered into before the Effective
Date.
(1) "Drug" shall mean any material defined by the FDA as a "drug".
(m) "Soft Drink" shall mean any non-alcoholic beverage marketed without health
or medicinal claims, other than that the Soft Drink is "non-fattening,"
"reduced calorie" and/or "low calorie."
(n) Net Sales" shall mean the gross amount invoiced by LICENSEE and any
sublicensee of LICENSEE for quantities of Licensed Products actually
shipped by LICENSEE and each sublicensee during the relevant quarter to
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parties not Affiliated Entities of the shipper after deducting, to the
extent actually incurred, shipping costs separately stated on the shipper's
invoice, returns in the normal course of trade, and, to the extent
separately stated on the invoice or other appropriate document, any customs
fees, duties and sales, use, value added or similar taxes. For Internal
Transfers of D-tagatose, the applicable Net Sales price shall be deemed to
be 75% of the average sales price for D-tagatose sold in other than
Internal Transfers in normal commercial quantities during the reporting
calendar quarter. If no sales in normal commercial quantities of D-tagatose
other than Internal Transfers have occurred during a quarter, the per pound
value of D-tagatose, for the purpose of this definition, shall be equal to
a Conventional Price, computed as follows: The Conventional Price shall be
$1.70 per pound, plus or minus the amount determined by multiplying the
percentage by which the "settle price" quoted for the next month's delivery
of domestic sugar on the last business day of the reporting quarter, as
published in the Wall Street Journal, varies from $0.21 per pound, provided
that no adjustment to the price so made will exceed $0.34 per pound of
D-tagatose. To the extent normal commercial quantities of D-tagatose are,
in fact, sold and reported in other than Internal Transfers in the first of
the two following reporting quarters after a Conventional Price was used to
compute Net Sales, LICENSEE may retroactively adjust its royalty
obligations and payments for the reporting quarter by using the later
Internal Transfer price based on actual sales in lieu of the Conventional
Price.
(o) "Internal Transfer" shall mean a transfer of D-tagatose from one entity to
an Affiliated Entity for use in making Licensed Product(s).
(p) "Affiliated Entity" shall mean a person or company under the common control
or ownership of another person or company, commonality being presumed from
the ownership by one of 50% or more of the voting rights or other indicia
of control of the other.
(q) "Drug Use Licensee" shall mean an entity licensed by LICENSOR to make, have
made, use and/or sell Licensed Products solely for use in or as a Drug.
(r) "Selected Markets" shall mean any of the following geographic areas for the
manufacture, sale or use of Licensed Products in or as Licensed Uses:
(i) the United States
(ii) the European Union (as constituted at the relevant time);
(iii) Japan; and
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(iv) the "Pacific Rim Countries" excluding Japan, but including Korea, Hong
Kong, Singapore, China, Taiwan, Australia and New Zealand.
(s) "Introduce" shall mean active initial marketing efforts in each Selected
Market, including personal contact with, and the shipment to, no less than
two potential commercial buyers or users of Licensed Product of sufficient
samples of Licensed Product to enable the recipient to evaluate the
Licensed Product for Licensed Use and to make a reasonable determination of
its interest in buying and/or using commercial quantities of Licensed
Product for Licensed Use in such Selected Market.
2. GRANT OF LICENSE
2.1 EXCLUSIVE LICENSE
LICENSOR hereby grants to LICENSEE and LICENSEE hereby accepts, subject to
all of the terms and conditions of this Agreement, an exclusive, worldwide
license to use the Intellectual Property Rights (a) to manufacture and/or sell
the Licensed Product and/or (b) to use the Licensed Product in a Licensed Use
and/or (c) to practice the Licensed Process.
2.2 SUBLICENSES
LICENSEE is expressly authorized to grant sublicenses under the
Intellectual Property Rights licensed hereby, and undertakes to assure the full
and punctual performance by each sublicensee of all obligations that protect
LICENSOR's rights to receive royalties and/or maintain and enforce the
Intellectual Property Rights.
2.3 KNOW HOW TRANSFER
Upon the receipt by LICENSOR of the Initial Payment under Section 4.1
below, LICENSOR shall complete the transfer to LICENSEE of the Know How then in
LICENSOR's custody or control within sixty (60) days of the Effective Date.
3. TERM
The term of this Agreement shall run until five years after the expiration
of the last to expire U.S. patent of the Patent Rights having claims covering
the Licensed Product and/or Licensed Process and/or Licensed Use. After the
expiration of this Agreement, pursuant to this Section 3, to the extent that any
Patent Rights remain in force and effect in any jurisdiction, except as provided
in Section 17.1, LICENSEE shall be deemed to have a fully paid, irrevocable
royalty free exclusive license thereof for the remaining term of such Patent
Rights.
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4. PAYMENT FOR LICENSE
4.1 INITIAL PAYMENT
LICENSEE shall pay to LICENSOR an initial payment of one million, five
hundred thousand ($1,500,000) U.S. dollars ("Initial Payment"). One half of the
Initial Payment shall be made on the Effective Date upon the complete execution
of this Agreement. The other half of the Initial Payment shall be paid in
LICENSEE's sole discretion no later than January 6, 1997. If LICENSEE fails or
declines to make the payment of the second half portion of the Initial Payment,
this Agreement and all other obligations of LICENSEE and LICENSOR shall
terminate on January 7, 1997, but for the Confidentiality Disclosure Agreement
of March 1996 which shall remain in effect for its full term. No portion of the
Initial Payment paid to the LICENSOR shall be refundable, except (a) if LICENSEE
declines to pay the second half of the Initial Payment based solely on
LICENSOR's breach of its warranties given under Sections 6.1 and 6.2, the first
half of the Initial Payment shall be refundable, and (b) if LICENSEE has paid
the full Initial payment as set forth in Section 6.3.
4.2 RUNNING ROYALTY DURING PATENT TERM
4.2.1 Except as provided by other Sections of this Agreement, LICENSEE
shall pay a running royalty on all of its and its sublicensees' Net Sales of
D-tagatose that LICENSEE or its sublicensee has reason to believe will be used
in or as a Foodstuff:
(a) manufactured anywhere in the world by a process patented in the United
States by a patent of the Patent Rights; and/or
(b) used anywhere in the world and covered by a use claim of any patent of
the Patent Rights.
To the extent that any Net Sales of Licensed Product are made at a price per
pound exceeding a Base Price equal to 2.5 times the average per pound Net Sales
price of D-tagatose during the entire year (or fraction of the first and last
years) preceding the reporting quarter ("Premium Sales"), LICENSEE shall pay an
additional royalty on the Net Sales of all Licensed Product sold in such quarter
as Premium Sales pursuant to the following schedule and apportioned 80% for the
Use Patents and 20% for the Process Patents.
Quantities of Licensed Product sold for use in Soft Drinks or drugs shall not be
included in "Sales" for the purposes of Section 4.2.1.
4.2.2 Except as provided in other sections of this Agreement, LICENSEE
shall pay a running royalty on all of its and its sublicensees' Net Sales of
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D-tagatose the seller has reason to believe will be used in Soft Drinks
(a) manufactured anywhere in the world by a process covered by a claim of
any United Sates patent of the Patent Rights; and/or
(b) covered by a use claim of any patent in the Patent Rights.
Quantities of Licensed Product sold for use in Soft Drinks pursuant to this
Subsection 4.2.2 shall not be included in determining the royalty rate due for
other sales of Licensed Product pursuant to Subsection 4.2.1.
4.2.3 Only one royalty shall be due LICENSOR Under Section 4.2 regardless
of whether the manufacture and use of D-tagatose are the subject of more than
one patent of the Patent Rights in the same or different countries.
4.3 RUNNING ROYALTY AFTER PATENT TERM OF USE PATENT RIGHTS
4.3.1 (a) Upon the expiration of EP 257626 or any other European use
patent that is subsequently added to the Patent Rights on the use of D-Tagatose
and covers LICENSEE's use of Licensed Product in the European Union, should
LICENSEE continue in the European union (as then constituted) to manufacture
D-tagatose, but by a process that is not covered by any claim of any European
patent of the Patent Rights, the running royalty for sales made within the
European Union (as constituted at the time of such sale) shall continue for the
remaining term of this Agreement from the later of the date of expiration of EP
257626 or any subsequent European use patent. The sale of any quantities of
Licensed Product subject to royalty pursuant to this Section shall not be
included in determining the royalty rate due for other sales of Licensed Product
subject to royalty pursuant to this section shall not be included in determining
the royalty rate due for other sales of Licensed Product pursuant to Section
4.2.
(b) Upon the expiration of U.S. Patent 4,786,722 or any other U.S. patent
that is subsequently added to the Patent Rights on use of D-tagatose, and covers
LICENSEE's use of Licensed Product outside the European Union, (as constituted
at the time of such use), should LICENSEE continue outside the European Union to
manufacture D-tagatose, but by a process that is not covered by any claim of any
United States patent of the Patent Rights, the running royalty for sales made
outside the European Union (as constituted at the time of such sale) shall
continue for the remaining term of this Agreement from the later of the date of
expiration of U.S. Patent 4,786,722, or any subsequently added U.S. use patent.
The sale of any quantities of Licensed Product subject to royalty pursuant to
this Section shall not be included in determining the royalty rate due for other
sales of Licensed Product pursuant to Section 4.2.
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4.3.2 For the purpose of this Agreement, royalty shall be based on the
location of the manufacturer regardless of the place where the Licensed Product
may thereafter be sold, resold or used.
4.4 CONVERSION TO PAID-UP LICENSE
Upon the completion of LICENSEE's obligations to pay royalty pursuant to
Sections 4.2, 4.3 or 17.1, the License granted herein shall be deemed to be paid
up and no further royalty shall be due LICENSOR, notwithstanding any remaining
unexpired term in any jurisdiction of any patent of the Patent Rights.
4.5 PAYMENT OF ROYALTIES AND ROYALTY REPORTS
4.5.1 Royalties shall be paid, by wire transfer to LICENSOR, or its order
on a calendar quarter basis, less any applicable taxes which LICENSEE is
obligated to withhold, based on the Net Sales during such quarter. The burden
and obligation to pay all taxes due on such royalty shall rest solely with
LICENSOR but LICENSEE shall provide LICENSOR with evidence that withheld taxes
have been duly and timely paid to the relevant authorities by LICENSEE.
Royalties shall be paid in U.S. dollars ($US) . The exchange rate used to
calculate royalties due to LICENSOR for sales made in currencies other than U.S.
dollars, shall be the rate of exchange for U.S. dollars for such currency in
fact used by LICENSEE to exchange such currency for U.S. dollars, or if payment
has not been received and converted to U.S. dollars by the time a royalty report
is due and/or royalty payments are remitted, the buying rate for U.S. dollars
for such currency as published in the Wall Street Journal on the last business
day of the calendar quarter in which such royalty accrued. LICENSEE may deduct
from subsequent royalty payments amounts reported and paid for Net Sales that,
in any of the following 12 quarters, reflect returned goods or failures for any
other reason to receive payment for the Licensed Products sold. The deduction
shall not exceed the amount actually paid in a prior remittance to LICENSOR.
4.5.2 Should LICENSEE elect to pay to LICENSOR the second half portion of
the initial payment, then, at the same time as LICENSEE makes the payment of the
second half portion of the initial payment, LICENSEE shall prepay royalties to
LICENSOR in the non-refundable (except as set forth in section 6.3) sum of one
million (US $1,000,000) dollars. LICENSEE shall be entitled to recoup the one
million (US $1,000,000) dollars of prepaid royalties by withholding from
LICENSOR and taking as a credit against the royalty due one half (1/2) of the
royalty due LICENSOR pursuant to Section 4.2 until the one million (US
$1,000,000) dollars is recouped. Should LICENSEE elect not to pay to LICENSOR
the second half portion of the initial payment, then LICENSEE shall have no
obligation to prepay any running royalty pursuant to this section 4.5.2.
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4.5.3 For each calendar year quarter of this Agreement (or portion thereof
during the first and last years) the royalty shall be paid no later than sixty
days following the last day of such calendar quarter. Late payments will bear
interest at 1% per month or fraction of a month.
4.5.4 With each royalty payment, LICENSEE will render to LICENSOR a
written statement of account (hereinafter referred to as Royalty Report") in
accordance with a form mutually agreed upon by LICENSOR and LICENSEE to be
determined within ninety (90) days of the Effective Date, duly signed by a
responsible officer of LICENSEE, giving full particulars regarding all Net Sales
during the previous calendar quarter and the extent to which royalties are due
after giving effect to any permitted deductions taken pursuant to this
Agreement.
4.5.5 LICENSEE shall permit, at the request of LICENSOR, a certified
public accountant, selected by LICENSOR, and to whom LICENSEE has no reasonable
objection, to inspect and audit such books of account and other records as might
be necessary to determine the correctness of any Royalty Report or payment made
under this Agreement including the procedures pursuant to which LICENSEE
monitors sublicense performance. The cost of such audit shall be borne by
LICENSOR unless an error in LICENSOR's favor of greater than 10% is uncovered,
in which case LICENSEE shall bear the cost of such audit, Any under or over
payments shall be corrected within sixty days of being uncovered and bear
interest at 8% per year from the date due to the date paid.
5. PATENT RIGHTS
5.1 With respect to the jurisdictions where applications for patents have
been filed, or are to be filed in the future, LICENSOR shall bear the full cost
and expense for the filing of, prosecution of and maintenance of the patents and
patent applications comprising the Patent Rights, including, without limitation,
taxes, maintenance fees, renewal fees, annuities, translations, filing fees and
attorneys' and patent agent fees, during the term of this Agreement. LICENSOR
agrees that it will apply for any new patents in at least those jurisdictions in
which Patent Rights exist on the Effective Date of this Agreement, and in such
additional jurisdictions as may then be agreed by LICENSOR and LICENSEE.
5.2 LICENSOR agrees to instruct its patent attorneys and agents in each
jurisdiction where a patent has issued or is pending (now or in the future) to
request LICENSEE to pay any filing, maintenance and renewal fees and the fees of
attorneys, patent agents and translators in connection with the implementation
of Section 5.1, and LICENSEE agrees to pay such amounts promptly when requested
to do so. In the event any such fee is not timely paid by LICENSEE, LICENSOR
may pay such fees. All amounts paid by LICENSEE may be deducted by LICENSEE from
the next running royalty payment due to LICENSOR pursuant to Article 4. If all
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payments made by LICENSEE hereunder are not recovered by LICENSEE prior to the
termination or expiration of this Agreement, LICENSOR will refund to LICENSEE
100% of such unrecovered amount.
5.3 To the extent possible and practical, LICENSEE agrees to print or
stamp the numbers of LICENSOR's Patent Rights for the appropriate jurisdiction
or the words "patent pending" on the Licensed Product(s), as appropriate and to
state that such Patent Rights are used "under license from Biospherics
Incorporated, U.S.A."
6. LICENSOR'S WARRANTIES
6.1 LICENSOR represents and warrants that it holds all rights, title and
interest in the Intellectual Property Rights as required to permit LICENSOR to
enter into this Agreement and expressly warrants that LICENSOR is the sole owner
of all Intellectual Property Rights licensed hereunder and that it is not bound
by the terms of any agreement with any third party that prevents it from
granting the licenses or meeting any of its other obligations of this Agreement,
provided however, that such warranty does not extend to the agreements that are
the subject of Section 8.4.
6.2 LICENSOR represents and warrants that, as of the Effective Date of
this Agreement, it has delivered to LICENSEE all the documentation in LICENSOR's
custody or control pertaining to D-tagatose for human consumption, including,
but not limited to, materials to be submitted to the FDA to obtain approval of
the use of D-tagatose as or in "food" as defined by the FDA. LICENSOR further
warrants that it is not aware of any data not delivered to LICENSEE prior to the
Effective Date indicating that D-tagatose is unsafe or inappropriate for human
consumption.
6.3 LICENSOR acknowledges that the warranties and representations of this
Section 6 are essential to LICENSEE's entry into this Agreement. Should any
warranty or representation of this Section 6 be materially breached and should
LICENSOR be unable or unwilling
(a) to cure such breach within 60 days after notice from LICENSEE, and/or
(b) to indemnify and hold harmless LICENSEE from any cost or damage
actually incurred as a result of such breach.
LICENSEE shall be entitled to terminate this Agreement and receive a refund of
its payment pursuant to Section 4.1 and any portion of the royalty prepaid
pursuant to section 4.5.2 that LICENSEE has not taken as a credit against actual
royalties due. Unless LICENSEE notifies LICENSOR of its intention to invoke
this provision within 60 days of its awareness of the alleged breach, LICENSEE
will be deemed to waived its rights to terminate the Agreement and to receive a
refund of the Initial Payment based on such alleged breach.
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7. THIRD PARTY INFRINGEMENTS OF THE INTELLECTUAL PROPERTY RIGHTS
7.1 LICENSEE agrees to assist LICENSOR, as LICENSOR may request, in the
procurement, maintenance and protection of LICENSOR's Intellectual Property
Rights.
7.2 LICENSEE agrees to notify LICENSOR of any infringement of the
Intellectual Property Rights by others which comes to LICENSEE's attention and
to review with LICENSOR the details of any actions LICENSEE intends to take to
xxxxx such infringement.
7.3 Unless LICENSOR agrees to indemnify LICENSEE from the direct
consequences of any such infringement or, itself, to take action to xxxxx the
infringement notified, LICENSEE may, at its sole expense and discretion bring
whatever action it deems appropriate to xxxxx such infringement of the
Intellectual Property Rights, including the bringing of appropriate legal
action. If necessary, LICENSEE may name LICENSOR as a party to any such legal
action. LICENSOR may, at its election, join with LICENSEE in any such action
and, should LICENSOR do so the parties shall share the cost of such action and
share in any recovery in the same proportion as the actual out of pocket expense
they incurred in prosecuting the action. Should LICENSOR decline to join in any
such action, than LICENSOR shall have no obligation to bear any expense in
connection with such action, shall not be entitled to any portion of the
recovery, and shall not object to any settlement of such action that LICENSEE
may accept.
7.4 Should LICENSEE refuse to take action to xxxxx any third party
infringement of the Intellectual Property Rights licensed herein, then LICENSOR
may bring action in its own name (naming LICENSEE as a nominal party, if
necessary) and at its own expense, in which case, LICENSOR shall be entitled to
keep any recovery, LICENSEE shall not share in any recovery and LICENSEE shall
not object to any settlement of such action that LICENSOR may accept, provided
such settlement is not inconsistent with the exclusive licenses granted to
LICENSEE in this Agreement.
7.5 Each party agrees to assist and fully cooperate with the other in the
maintenance of any legal action taken under Article 7.
8. INDEMNIFICATIONS AND THIRD PARTY RIGHTS
8.l Except as pertains to infringement claims as set forth in Section 8.2,
LICENSOR shall indemnify and hold LICENSEE harmless from and against any and all
claims, damages, lawsuits, liabilities and expenses including reasonable
attorneys, fees and costs arising out of or in connection with any claims that
the products, processes and uses claimed in the Patent Rights or disclosed in
the Know How inherently were the cause of the damage or injury on which the
claim is based.
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8.2 LICENSEE shall indemnify and hold harmless LICENSOR from and against
any and all claims, damages, lawsuits, liabilities and expenses, including
reasonable attorneys, fees and costs, arising out of claims, or in connection
with any other claims, that the practice, manufacture, use or sale of the
Licensed Product(s), Licensed Process or Licensed Use by LICENSEE or any
sublicensee of LICENSEE were the cause of the damage or injury on which the
claim is based, or that LICENSEE or any sublicensee failed to follow Good
Manufacturing Practices or other standards applicable to its operations pursuant
to this Agreement.
8.3 Although LICENSOR has no knowledge of patents or other bases on which
any third parties may claim any activity of LICENSEE under this Agreement
infringes such third party's rights, no warranty is provided that such third
party rights do not exist or may not be asserted. In the event LICENSEE seeks
to avoid, or a third party initiates, any claim or suit against LICENSEE, on the
ground that LICENSEE's use of the Intellectual Property Rights constitutes an
infringement or violation of any similar right of the third party, LICENSEE
shall give LICENSOR prompt written notice of any such claim or suit and shall
conduct the defense thereof at LICENSEE's expense. LICENSOR shall have the
right to participate in the conduct of any such suit, defense or settlement
through counsel of its own choosing and at its own expense. If LICENSEE agrees
(after notice to LICENSOR) to pay any royalty or sum in settlement of such
claims, LICENSEE shall be entitled to set off against the royalties otherwise
due to LICENSOR under Article 4.2, up to 50% of the amounts paid or payable to
such third party, provided however, that any such set off shall not reduce the
future royalties due to LICENSOR by more than 50%. If LICENSEE is required by a
court or arbitrator, despite objection, to pay any royalty or sum in settlement
of such claim or suit, LICENSEE shall be entitled to set off against any
royalties otherwise due to LICENSOR under Article 4.2, all amounts paid or
payable to such third party, provided however, that any such set off shall not
reduce the future royalties due to LICENSOR by more than 50%. Should such third
party obtain an injunction preventing LICENSEE from continuing operations
material to the overall objectives of this Agreement, LICENSEE may terminate
this Agreement.
8.4 As LICENSOR believes its agreements with such parties have, as of the
Effective Date, been terminated, LICENSOR shall indemnify and hold LICENSEE and
its agents and distributors harmless from all loss, expense, damage and costs,
including reasonable attorneys, fees, by reason of any claim or suit against
LICENSEE, on the ground that LICENSEE's manufacture, sale or use of D-tagatose,
in any territory violates agreements entered into prior to the Effective Date
hereof ("Prior Agreements") between LICENSOR and Xxxxx & Associates and PC
Xxxxxxx Pty, Ltd., (collectively and individually referred to herein as "D&W")
respectively of Walnut Xxxxxx, Xxxxxxxxxx, XX 00000 and Launceston, Australia.
To the extent LICENSEE is required (or agrees with LICENSOR's consent) to pay
any amounts to D&W based on the Prior Agreements, LICENSEE shall be permitted to
deduct any and all payments paid to D&W, dollar for dollar, against any future
royalty to be paid by LICENSEE under this Agreement. If D&W initiates any legal
13
action against LICENSEE, its agents or distributors, based on the Prior
Agreements, LICENSOR shall be permitted to control the conduct of such action
and any settlement thereof. LICENSOR agrees to cooperate fully with LICENSEE in
any effort by LICENSEE, such as seeking competent legal advice, to ascertain the
extent of the rights, if any, of D&W under the Prior Agreements.
8.5 LICENSOR agrees that it will obtain and, for the life of this
Agreement maintain, insurance covering its indemnification obligations under
Sections 8.1 and 8.4. LICENSOR shall name LICENSEE as an additional insured of
such insurance and shall provide LICENSEE with a copy of the insurance policy.
LICENSOR's liability to LICENSEE pursuant to Sections 8.1 and 8.4 shall be
limited to the face amount of said insurance policy which shall be no less than
$25 million.
8.6 LICENSEE agrees that it will obtain and, for the life of this
Agreement maintain, insurance covering its indemnification obligations under
Section 8.2. LICENSEE shall name LICENSOR as an additional insured of such
insurance. LICENSEE's liability to LICENSOR pursuant to Section 8.2 shall be
limited to the face amount of said insurance policy which shall be no less than
$25 million.
9. SUBLICENSEES
LICENSEE shall have the right to grant sublicenses to third parties under
such terms and conditions as it deems appropriate provided that each
sublicensee's sales are reported to LICENSEE and accounted and paid for by
LICENSEE as though they were the sales of LICENSEE for the purposes of this
Agreement. Each sublicensee shall be required (a) to submit quarterly reports
to LICENSEE reflecting its shipments of Licensed Products in a form adequate to
protect LICENSOR's rights to royalties and, (b) to adhere to practices and
policies appropriate for the maintenance and enforceability of the Intellectual
Property Rights sublicensed. The sales of Licensed Product by any sublicensee
shall be treated as if the sale were made by LICENSEE for purposes of
calculating and paying the royalty due LICENSOR pursuant to Section 4.2.
LICENSOR shall have no right to share in any initial payments received by
LICENSEE for any such sublicenses.
10. TERMINATION AND REVERSION
10.1 LICENSOR may terminate this Agreement prior to its expiration if
(a) LICENSEE is in material breach of this Agreement and has failed within
60 days of notice of such breach to cure the breach;
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(b) LICENSEE is bankrupt, in receivership or otherwise operated under the
supervision or control of a court or trustee; or
(c) LICENSOR exercises its right to seek reversion of the Intellectual
Property Rights under Section 10.2 below.
10.2 Should LICENSEE fail
(a) to Introduce D-tagatose in each Selected Market for use in or as a
Foodstuff within the later of three years after the Effective Date, or
such date as sales of Licensed Product as a low calorie sweetener in
such Selected Market are authorized; and
(b) to achieve annual Net Sales of 10,000 metric tons in each of the
United States and European Union within five years after the date on
which sales of D-tagatose as a low calorie sweetener were first
authorized in each such Selected Market
then LICENSOR shall have the right, pursuant to Section 10.3, to reacquire the
Intellectual Property Rights granted to LICENSEE, unless prior to the fifth
anniversary date of the authorization to sell D-tagatose as or in Foodstuffs is
effective in the United States or the European Union, whichever is later,
LICENSEE has paid to LICENSOR royalties under Section 4.2, based on actual or
presumed Net Sales in each such selected Market equal to aggregate Net Sales of
10,000 metric tons in each such Selected Market. For the purposes of subsection
(a) of this section only, the Selected Market consisting of the "European Union"
shall be limited to Germany, France and the United Kingdom, and the date in
subsection (a) shall be the date on which authorization is obtained in the last
of such countries. For the purposes of subsection (b) of this Section, the Net
Sales to be achieved in the "European Union" shall be the cumulative sales
within all countries of the European Union as constituted on the relevant date
and made within the period beginning with the date in subsection (a).
10.3 In the event LICENSOR exercises its right to reacquire the
Intellectual Property Rights, LICENSOR will:
10.3.1 Reacquire all rights to and under the Intellectual Property Rights
licensed to LICENSEE pursuant to this Agreement, within 90 days after providing
notice ("Reacquisition Notice") of its intention to reacquire such rights;
10.3.2 Direct LICENSEE to return or deliver to LICENSOR within 90 days
after the Reacquisition Notice, all Know How and other confidential material
furnished to LICENSEE, or to provide evidence acceptable to LICENSOR that, with
the prior consent of LICENSOR, such materials were destroyed;
15
10.3.3 Undertake to pay to LICENSEE during the remaining years of this
Agreement had it not been terminated, 10% of all royalties actually collected by
LICENSOR during such remaining years;
10.3.4 Acquire an option to require LICENSEE immediately to assign to
LICENSOR any and all patents, patent applications, unpatented know how,
trademarks and copyrighted materials then in LICENSEE's ownership or control
without obligations to third party, that claim rights to or describe D-tagatose
products, uses or processes for making D-tagatose. If such option is exercised
by LICENSOR, the percentage of royalty collections to be paid to LICENSEE under
Section 10.3.3 shall be increased by 50% to a maximum of 15% of all royalties
actually collected by LICENSOR.
11. EFFECT OF HOLDING OF INVALIDITY
11.1 Should a competent authority render a decision holding invalid any
claim of EP 257626 or other European Use Patent Rights covering LICENSEE's or
any sublicensee's then actual, use of D-tagatose, unless and until such decision
is reversed by a higher authority, any royalties otherwise due LICENSOR pursuant
the royalty rates set forth in Column 2 of Section 4.2 for Net Sales within the
European Union (at that time) shall be placed in an interest-bearing escrow
account in a bank and paid to LICENSOR only upon reversal of such holding.
Should such holding not be reversed in a decision that is final or cannot be
further appealed, then the funds held in escrow pursuant to this Section shall
be returned to LICENSEE and from then forward the schedule of Section 4.2 for
Net Sales in any country of the European Union (at the time of such sales) shall
be reduced to 0% and the sale of any quantities of Licensed Product subject to
such reduced royalty shall not be included in determining the royalty rate due
pursuant to section 4.2 for sales countries other than the European Union.
11.2 Should a competent authority render a decision holding invalid any
claim of JP 95075524 or any other Japanese Use Patent Rights covering LICENSEE's
or any sublicensee's then actual use of D-tagatose, unless and until such
decision is reversed by a higher authority, any royalties otherwise due LICENSOR
pursuant to the royalty rates set forth in Column 2 of Section 4.2 under such
Use Patent Rights for Net Sales in Japan shall be placed in an interest-bearing
escrow account in a bank and paid to LICENSOR only upon reversal of such
holding. Should such holding not be reversed in a decision that is final or
cannot be further appealed, then the funds held in escrow pursuant to this
Section shall be returned to LICENSEE and the royalty rates set forth in Column
2 of the schedule of Section 4.2 for Net sales in Japan shall be reduced to 0%
and such sales of any quantities of Licensed Product subject to such reduced
royalty shall not be included in determining the royalty rate due pursuant to
Section 4.2 for sales in countries other than Japan.
16
11.3 Should a competent authority render a decision holding invalid any
claim of US Patent 4,786,722 or any other U.S. Use Patent Rights covering
LICENSEE's or any sublicensee's then actual use of D-tagatose, unless and until
such decision is reversed by a higher authority, any royalties otherwise due
LICENSOR pursuant to the royalty rate set forth in Column 2 of Section 4.2 under
such Use Patent Rights for Net Sales in the United States and all other
countries other than the other Selected markets shall be placed in an
interest-bearing escrow account in a bank and paid to LICENSOR only upon
reversal of such holding. Should such holding not be reversed in a decision
that is final or cannot be further appealed, then the funds held in escrow
pursuant to this Section shall be returned to LICENSEE and from then forward the
royalty rates set forth in Column 2 of the schedule of Section 4.2 for Net Sales
of Licensed Product in the United States and all other countries other than the
other Selected Markets shall be reduced to 0% and such sales shall not be
included in determining the royalty rate, due pursuant to Section 4.2 for sales
in the other selected markets.
11.4 Should a competent authority render a decision holding invalid any
claim of European Patent EP 518874 or other European process Patent Rights
covering LICENSEE's or any sublicensee's then actual use of a process for making
D-tagatose unless and until such decision is reversed by a higher authority, any
royalties otherwise due LICENSOR for use of the process within the European
Union (at that time) pursuant to the royalty rates set forth in Column 3 of
Section 4.2 shall be placed in an interest-bearing escrow account in a bank and
paid to LICENSOR only upon reversal of such holding. Should such holding not be
reversed in a decision that is final or cannot be further appealed, then the
funds held in escrow payment to this Section shall be returned to LICENSEE and
from then forward the royalty rates set forth in Column 3 of the schedule of
Section 4.2, for Net Sales of Licensed Product in any country of the European
Union (at the time of such sale) shall be applied to 25% of the actual sales
volume in the European Union.
11.5 Unless and until the Japanese Patent office issues a patent on
Japanese patent application 5504256 on processes for making D-tagatose for
purposes of determining the applicable royalty rate pursuant to Column 3 of the
schedule of Section 4.2, sales of Licensed Product in Japan shall be considered
to be 50% the actual sales volume, Should a competent authority render a
decision holding invalid any claim of any such patent that issues on Japanese
application 0000000 or other Japanese process Patent Rights covering LICENSEE's
or any sublicensees then actual use of a process, unless and until such decision
is reversed by a higher authority, any royalties otherwise due LICENSOR for use
of the process within Japan pursuant Column 3 of the schedule for Section 4.2,
for Net Sales in Japan, shall be placed in an interest-bearing escrow account in
a bank and paid to LICENSOR only upon reversal of such holding. Should such
holding not be reversed in a decision that is final or cannot be further
17
appealed, then the funds held in escrow pursuant to this Section shall be
returned to LICENSEE and the royalty rates set forth in Column 3 of the schedule
of Section 4.2. for Net Sales of Licensed Product in Japan shall be applied to
25% of the actual sales volume in Japan.
11.6 Should a competent authority render a decision holding invalid any
claim of U.S. Patent 5,078,796 or 5,002,612 or other U.S. process Patent Rights
covering LICENSEE's or any sublicensees then actual use of a process for making
D-tagatose, unless and until such decision is reversed by a higher authority,
any royalties otherwise due LICENSOR pursuant to Colilmn 3 of the schedules of
Section 4.2 for Net Sales in the United States and all other countries other
than the other Selected Markets, shall be placed in an interest-bearing escrow
account in a bank and paid to LICENSOR only upon reversal of such holding.
Should such holding not be reversed in a decision that is final or cannot be
further appealed, then all funds held in escrow pursuant to this Section shall
be returned to LICENSEE and from then forward the royalty rates set forth in
Column 3 of the schedule of Section 4.2, for Net Sales of Licensed Product in
the United States and all other countries other than the other Selected markets,
shall be applied to 25% of the actual sales volume in the United States and all
other countries other than the other Selected Markets.
11.7 Should competent authority, whose decision may not be further
appealed, in the European union, Japan or the United States hold invalid the
claims of all use and process Patent Rights covering LICENSEE's and any
sublicensee's then actual use of D-tagatose and then actual use of a process for
making D-tagatose in the territory concerned, then all royalties under Section
4.2 for Net Sales in such territory shall be reduced to 0% and such Net Sales
shall not be included in determining the royalty rate due pursuant to Section
4.2 for sales in other countries. If royalties are reduced to 0% in all such
territories, no further running royalties will be due for Net Sales in any
country.
12. ARBITRATION
Any and all disputes concerning the negotiation, interpretation,
performance or termination of this Agreement, shall be resolved through amicable
discussion between the parties. Failing resolution of the disputed issue(s) in
such discussions within 30 days after initiation of such discussions, either
party may refer such disputed issue(s) for final and exclusive resolution by
binding arbitration, conducted in the English language, pursuant to the then
existing International Arbitration Rules of the American Arbitration
Association. The arbitration shall be conducted by a single arbitrator, who
shall be a lawyer familiar with technology development and transfer issues, and
shall be held, absent agreement otherwise, in Copenhagen, Denmark. The parties
shall cooperate in the expeditious and economical conduct of the proceedings by,
inter alia, (a) promptly producing for examination by the other party's counsel
all records and other evidence and all personnel reasonably requested and, if
necessary, determined by the arbitrator to be relevant to the controversy, and
(b) conducting the proceedings before the arbitrator on consecutive days. Any
party may apply to a court of competent jurisdiction for injunctive relief or
18
other interim measures to maintain the status quo pending arbitration or rulings
of the arbitrator, or in aid of the provisions of this arbitration agreement,
but not otherwise, which application shall not be deemed incompatible with, or a
waiver of, this agreement to arbitrate. In making an award, the arbitrator
shall be guided by, in descending priority, the terms of this Agreement, the
usages of the trade in the place where the party charged with an act or failure
to act is principally located, and by what the arbitrator deems just and
equitable under the circumstances without binding reference to the law of any
Jurisdiction. The award of the arbitrator shall be in writing, providing the
reasons for the award, final and binding and not subject to judicial review.
Enforcement of the award may be sought in any court of competent jurisdiction
over the parties or their assets, The costs of the arbitration shall be
apportioned as the arbitrator directs.
13. D-TAGATOSE FOR DRUG USE
13.1 LICENSE TO MANUFACTURE LICENSED PRODUCT FOR DRUG USE
The License granted herein gives LICENSEE the exclusive right (subject to
section 13.3) to manufacture (and/or sublicense others to manufacture) Licensed
Product for sale to third parties licensed by LICENSOR to sell or use Licensed
Product in or as a Drug, or to fourth parties to sell Licensed Product to
parties licensed to use such Licensed Product in or as a Drug (collectively
"Drug Use Licensees").
13.2 RIGHT TO SELL LICENSED PRODUCT FOR DRUG USE
The License granted herein gives no right to LICENSEE to sell Licensed
Product for Drug use except as specifically set forth in Section 13.1.
13.3 SPECIAL ROYALTY RELATING TO LICENSED PRODUCT FOR DRUG USE
In the event LICENSOR seeks to make Licensed Product available to a Drug
Use Licensee or to license a Drug Use Licensee, LICENSEE may (but has no
obligation to), sell Licensed Product to LICENSOR or such third party, or grant
a sublicense to a fourth party to manufacture Licensed Product and to sell
Licensed Product to another Drug Use Licensee. Royalty on Licensed Product for
Drug use provided by LICENSEE or a sublicensee of LICENSEE to LICENSOR or to a
Drug Use Licensee shall be calculated and shared only in accordance with the
provisions of this Article 13, and not in accordance with any other provision of
this Agreement.
19
13.3 (a) LICENSED PRODUCT FOR DRUG USE MANUFACTURED BY LICENSEE AND SOLD
TO DRUG USE LICENSEES
The sale of Licensed Product to be used in and/or as a Drug By LICENSEE to
LICENSOR or a Drug Use Licensee shall be royalty free. LICENSEE shall not share
in any royalty received by LICENSOR from any such Drug Use Licensee if such Drug
Use Licensee purchases the Licensed Product from LICENSEE. LICENSEE shall be
free to negotiate for the sale of Licensed Product to any Drug Use Licensee
under terms and conditions as it deems in its own best interests without regard
for, or consideration of, LICENSOR's interests.
13.3 (b) LICENSED PRODUCT FOR DRUG USE NOT MANUFACTURED BY LICENSEE OR
SOLD TO LICENSOR
In the event LICENSEE refuses to sell Licensed Product to be used in and/or
as a Drug to LICENSOR or a Drug use Licensee where requested by LICENSOR,
LICENSEE shall sell Licensed Product to LICENSOR or LICENSOR'S order for the use
of the Drug Use Licensee, or itself grant or permit LICENSOR to grant a
sublicense to enable the Drug Use Licensee to make or have made Licensed Product
for such sublicensee's own Drug use. If LICENSEE negotiates a sublicense to
manufacture License Product, it may do so under terms and conditions as it deems
appropriate in consideration of LICENSOR's interests in a reliable supply of
Licensed Product for Drug use. If, after 180 days of a request for a sublicense,
none is granted, LICENSOR may either
(a) buy from LICENSEE and LICENSEE shall sell Licensed Products to be
delivered to the Drug Use Licensee solely for Drug use, at a price equal to the
average price per pound of all Net Sales by LICENSEE used to compute the royalty
due under Section 4.2.1, during the prior calendar year (or part of the first
year) plus an appropriate xxxx up to reflect LICENSEE's extra costs, if any, in
supplying the Licensed Product for drug use;
(b) if the Drug Use Licensee declines to buy the Licensed Product at the
price so offered, or LICENSEE is unable or unwilling to sell the Licensed
Product at such price, LICENSOR may grant a License to the Drug Use Licensee to
make or have made Licensed Product solely for its use in or as a Drug on such
terms and conditions as LICENSOR deems appropriate, and LICENSEE will take to
action to prevent such manufacture or use of Licensed Product, No royalty shall
be due to LICENSOR from LICENSEE for Licensed Product manufactured by or for a
Drug Use Licensee or sold to LICENSOR hereunder.
Any running royalty obtained by LICENSOR from a Drug Use Licensee for use
of Licensed Product in or as a Drug, unless LICENSEE has supplied the Licensed
Product, shall be shared equally between LICENSOR and LICENSEE. That is, it is
the intent of this section that LICENSEE shall not be entitled to share in
royalty income derived by LICENSOR from sales of Licensed Product sold to a Drug
Use Licensee for Drug use if the Licensed Product was manufactured by LICENSEE,
20
but to share equally with LICENSOR any running royalty income derived by
LICENSOR from sales of Licensed Product sold to a Drug Use Licensee if the
Licensed Product was not manufactured by LICENSEE. LICENSOR shall be free to
negotiate the terms and conditions of any license to a Drug Use Licensee to sell
Licensed Product for Drug use as it deems in its own best interests, without
regard for, or in consideration of, LICENSEE's interests except that if a
running royalty which LICENSEE is entitled to share with LICENSOR, pursuant to
this Section, is less than 8%, then LICENSEE shall be entitled to receive 75% of
the royalty actually received, until LICENSEE has thereby recovered 50% of any
initial lump sum payment received by LICENSOR and 50% of any running royalties
received, whereafter all further running royalties will be shared equally.
14. CONFIDENTIAL INFORMATION
Except as otherwise expressly authorized by this Agreement, LICENSOR and its
Affiliated Entities, and LICENSEE, its Affiliated Entities and sublicensees,
shall keep completely confidential, and solely use as necessary or appropriate
to perform the purposes of this Agreement, any proprietary or confidential
information furnished to the recipient by the other, expressly including the
Know How. The restriction contained herein shall not apply to any information
that the party claiming such exclusion can prove:
(a) Was already known to the receiving party as shown by documentary
evidence (other than through the wrongful act or omission of the receiving party
or of a third party) at the time of its disclosure by the other party;
(b) was generally available to the public or otherwise part of the public
domain (other than through the wrongful act or omission of the receiving party
or of a third party) at the time of its disclosure to the receiving party;
(c) Becomes generally available to the public or otherwise part of the
public domain (other than through the wrongful act or omission of the receiving
party or of a third party) after its disclosure to the receiving party;
(d) Is subsequently disclosed to the receiving party by a person not a
party to this Agreement who has a lawful right to disclose such information to
others; or
(e) was independently developed by the receiving party or employees or
agents of the receiving party without direct or indirect reference to, knowledge
of, or access to, the disclosed information, as shown by documentary evidence.
15. FORCE MAJEURE
Notwithstanding anything in this Agreement to the contrary, LICENSOR and
LICENSEE shall not be deemed in default with respect to the performance of any
21
of the terms, covenants and conditions of this Agreement (except for obligations
for payment of money) if such failure to perform such terms, covenants and
conditions is due to any strike, lockout, labor dispute, civil commotion,
war-like operation, invasion, rebellion, hostility, military or usurped power,
sabotage, failure of power, inability to obtain any materials or services, Act
of God, death, disability, fire or other casualty or other cause, whether
similar or dissimilar to those enumerated in this Section 15, which is beyond
the reasonable control of the party claiming such disability.
16. NON-COMPETITION
16.1 During the term of this Agreement, LICENSOR shall not, itself, nor
directly or indirectly aid or assist any other person in the development,
manufacture, sale, use, design, distribution, marketing, promotion or
acquisition of any product or process directly competitive with Licensed
Products, Licensed Processes or Licensed Uses, provided, however, that nothing
contained herein shall prevent LICENSOR's (a) independent research and
pre-market development in any field and/or (b) any activities of LICENSOR
regarding L-sugars to the extent such activities are inapplicable to the use of
L-sugars as a low calorie sweetener.
16.2 If LICENSOR terminates this Agreement pursuant to Article 10,
LICENSEE shall not for a period of five years following such termination itself
engage, nor directly or indirectly aid or assist any other person engaged in the
development of any product or process, manufacture, sale, use, design,
distribution, marketing, promotion or acquisition of Licensed Products, Licensed
Processes or Licensed Uses, provided however, nothing contained herein shall
prevent LICENSEE from divesting itself of any of the tangible and/or intangible
assets it may own or control after termination that relate to its operations
under this Agreement.
17. FUTURE DEVELOPMENTS
17.1 LICENSOR specifically acknowledges that any future developments that
it makes during the term of this Agreement relating to the manufacture and use
of D-tagatose shall fall within this Agreement, Should LICENSOR obtain any new
patent covering a specific new use of D-tagatose that is otherwise licensed
under this Agreement, upon expiration of this Agreement pursuant to Article 3,
unless LICENSEE is practicing a process claimed in the Patent Rights, the only
royalty that shall be due LICENSOR under this Agreement shall be for Licensed
Product sold by LICENSEE for the specific new use in any jurisdiction where such
new patent issued, and the term of the Agreement shall be extended in such
jurisdiction until the expiration of such new use patent. The remaining royalty
for such use shall be 1% of Net Sales for Licensed Product in or for use in such
jurisdiction.
22
17.2 Nothing in this Agreement shall be construed in any way as a
constraint on LICENSEE's right to develop new processes for the production of
Licensed Product or new uses for Licensed Product. Any such development by
LICENSEE and any patents that LICENSEE may obtain thereon shall be the sole
property of LICENSEE and LICENSOR shall have no rights therein by virtue of any
provision of this Agreement other than pursuant to Section 10.3.4.
18. FUTURE COOPERATION
18.1 Pursuant to a separate agreement to be negotiated and concluded by
LICENSOR and LICENSEE immediately following the Effective Date, LICENSEE agrees
to fund at a level of approximately $250,000 per year for two years studies to
be undertaken by LICENSOR to aid in the commercialization of the use of
D-tagatose.
18.2 LICENSOR and LICENSEE agree to establish a D-tagatose advisory
committee consisting of three representatives of LICENSEE and one representative
of LICENSOR. The committee shall meet at least once every four months. The
meetings shall be held where designated by LICENSEE except that every fourth
meeting shall be held where designated by LICENSOR. The committee shall render
a report to the management of LICENSOR and LICENSEE following each meeting and
shall indicate the portions of the report that may be publically disclosed. The
advisory committee shall (1) review results since the last meeting regarding
technical, regulatory, marketing, sales, facility schedules and special
problems; (2) review LICENSEE's projections for D-tagatose for the next four
month period with regard to technical, regulatory, marketing, sales, facility
schedules and special problems; and (3) make recommendations as to (1) and (2),
The advisory committee is advisory only and its recommendations are non-binding.
19. NABISCO
LICENSOR has had discussions with NABISCO regarding NABISCO's desire to use
Licensed Product in certain specific food products. In consideration of
LICENSOR's work with NABISCO, if, before April 30, 1998, NABISCO enters into a
sublicense agreement with LICENSEE under the Patent Rights, LICENSEE and
LICENSOR agree to equally share any initial payment made by NABISCO for such
sublicense and any such initial payment provision of a sublicense with NABISCO
shall require the approval of both LICENSOR and LICENSEE. Any sublicense
granted to NABISCO after May 1, 1998 shall be treated as any other sublicense
granted by LICENSEE and LICENSOR shall have no right to share in any payments
thereunder except as provided in Section 9. LICENSOR acknowledges that NABISCO
presents a special situation that is not to be used as a precedent with regard
to any other sublicensee.
23
20. MISCELLANEOUS
20.1 NO AGENCY
Neither LICENSOR nor LICENSEE shall act or hold itself out as the agent,
partner or joint venturer of or pledge the credit of the other.
20.2 ASSIGNMENT
Neither LICENSOR nor LICENSEE may assign this Agreement or any of the
rights granted hereunder to other than Affiliated Entities without the prior
written consent of the other, Such consent shall not be withheld, except for
good cause. If such assignment is as part of a transfer of all of the
prospective Assignor's business or of that portion of the respective assignor's
business pertaining to the production, use or sale of Licensed Products or
Licensed Processes, no consent shall be required, unless such prospective
assignment by LICENSEE predates LICENSOR's reversion rights under Section 10.2.
Prior to the date such reversion may be exercised, LICENSOR's consent shall be
required, but will not be withheld except for good cause.
20.3 NOTICES
All notices and writings to be given, shall be in writing by telefax or
airmail, addressed to the respective parties as set forth herein, unless
notification of a change of address is given in writing. The date of dispatch
shall be deemed the date the notice or writing is given, but it shall be the
burden of the sender to prove receipts unless and until changed, all notices and
writings shall be addressed to the attention of:
TO LICENSEE: TO LICENSOR:
Managing Director President
MD Foods Ingredients amba Biospherics Incorporated
Skanderborgvej 277 12051 Indian Creek Court
0000 Xxxx X Xxxxxxxxxx, XX 00000
DENMARK USA
Telefax: (000-00) 00-00-00-00 Telefax: (000) 000-0000
Telephone: (000-00) 00-00-00-00 Telephone: (000) 000-0000
20.4 WAIVERS, MODIFICATION AND ENTIRE AGREEMENT
This Agreement consists of this license of 23 pages and its attached
Schedule A. None of the terms of this Agreement can be waived or modified except
by an express further agreement in writing signed by both parties. There are no
representations, promises, warranties, covenants, or undertakings other than
those contained in this Agreements which represents the entire understanding of
24
the parties. The failure of either party to enforce, or the delay by either
party in enforcing, any of its rights under this Agreement shall not be deemed a
continuing waiver or a modification thereof and either party may, within the
time provided by applicable law, commence appropriate dispute resolution
provisions in this Agreement to enforce any or all of such rights.
20.5 SEVERABILITY
Except as otherwise provided in this Agreement, if any provision of this
Agreement is declared invalid or illegal or unenforceable by an arbitrator or a
court of competent jurisdiction, the parties will determine within 60 days after
the final determination by such arbitrator or unappealable court judgment
whether the remaining provisions of this Agreement provide an adequate basis for
continuing their relationship.
20.6 SURVIVAL
Notwithstanding any termination or expiration of this Agreement, the
following provisions shall survive with respect to any matter arising out of or
related to the Agreement during its term:
Article 3. Term (and post-term license).
Section 4.5.5 Audit of records.
Section 5.2 Refund of patent costs.
Section 6.3 Indemnification for breach of warranty.
Section 7.3 Cost sharing of infringement actions.
Section 8.1 Indemnifications for tort claims.
Section 8.2
Section 8.4 Indemnity for certain contract claims.
Article 12 Arbitration.
Article 14 Confidential Information.
Section 16.2 Non-competition.
Section 20.4 Waiver.
Section 20.6 Survival.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
duly executed as of the day and year first above written.
MD Foods Ingredients amba Biospherics Incorporated
By: ____________________ By: _____________________
Name: Xxxxx Xxxxxxxxx Name: Xxxxxxx X. Xxxxx
------------------ --------------------
Title: Managing Director Title: President/CEO
------------------- -------------------
