EXHIBIT 10.15
EXCLUSIVE PATENT LICENSE AGREEMENT
NUTRACEUTIX, INC.
AND
▇▇▇▇▇▇-▇▇▇▇▇▇▇-MIDLAND COMPANY
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TABLE OF CONTENTS
PREAMBLE
1. Definitions
2. Grant of License
3. Consideration
4. Infringement
5. Limited Warranty and Indemnification
6. Term and Termination
7. Reasonable efforts
8. Packaging, Labels and Promotional Items
9. Protection of Proprietary Rights
10. Assignment
11. Disputes; Arbitration
12. Governing Law
13. Force Majeure
14. Notices
15. Miscellaneous
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EXCLUSIVE PATENT LICENSE AGREEMENT
THIS AGREEMENT ("Agreement") made as of the 8th day of March, 2002 by and
between Nutraceutix, Inc., a Delaware corporation (hereinafter referred to as
"Nutraceutix") and ▇▇▇▇▇▇-▇▇▇▇▇▇▇-Midland Company, a Delaware corporation
(hereinafter referred to as "ADM").
WITNESSETH:
WHEREAS, Nutraceutix holds an exclusive license to certain patents and
patent applications and is the owner of certain patents and patent applications
in the United States and in other countries in the world relating to controlled
delivery technology;
WHEREAS, ADM desires that Nutraceutix grant ADM a license in the Territory
(as defined below) to manufacture, use, sell and offer to sell the Licensed
Products (as defined below) in the Licensed Field of Use (as defined below)
pursuant to the terms and conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein, and intending to be legally bound hereby, the Parties agree
as follows:
ARTICLE 1. DEFINITIONS
For the purposes of this Agreement, unless the context clearly or necessarily
requires otherwise, the following terms shall have the meanings set forth below:
1.1 "Parties" shall mean both Nutraceutix and ADM, and the "Party" shall mean
either of them.
1.2 "Affiliate" of a Party shall mean any company, corporation, partnership,
syndicate or other entity that, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with,
such Party. "Control" shall mean ownership of fifty-one percent (51%) or more
of the voting rights or equity in the specified entity.
1.3 "Contract Year" shall mean any of the following occurring during the term
hereof: (i) the period that begins on the Effective Date and ends on the
following December 31; (ii) any calender year thereafter; or (iii) the period
that ends on the date on which this Agreement expires or terminates and that
begins on the prior January 1. Provided, however, if this Agreement expires or
terminates on January 1, the Contract Year referred to in (ii) above shall be
one day in length.
1.4 "Contract Quarter" shall mean any of the following occurring during the
term hereof: (i) the period that begins on the Effective Date and ends on the
first to occur of the following; March 31, June 30, September 30, or December
31; (ii) any calender quarter thereafter; or (iii) the period that ends on the
date on which this Agreement expires or terminates and that begins with the
last to occur prior thereto of the preceding January 1, April 1, July 1 or
October 1. Provided, however, that if this Agreement expires or
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terminates on the first day of a calendar quarter, the Contract Quarter
referred to in (iii) above shall be one day in length.
1.5 "Effective Date" shall mean the date when this agreement is fully executed
by the Parties.
1.6 "Intellectual Property" shall mean all forms of intellectual property
existing on or after the date of this Agreement under the laws of any state
or country including, but not limited to, patentable inventions, patentable
designs, patentable plants, copyrightable works, mask works, novel plan
varieties, trademarks, service marks, trade secrets, and trade dress.
1.7 "Inventions" shall mean any discovery, concept, trade secret, art, clinical
data, idea or other information, whether or not patentable, that relates to
or arises out of the subject matters disclosed in the Licensed Patents, as
well as any foreign patents or foreign patent applications corresponding
thereto, and any continuations, continuations-in-part, divisionals,
reissues, reexaminations, extensions or additions thereof for use in the
Licensed Field of Use.
1.8 "Exclusive Licensed Field of Use" shall mean any legal use of the
Inventions and/or Licensed Products constituting one of the following
nutraceuticals and/or dietary supplements: (i) phytoestrogens, including
but not limited to isoflavones; (ii) vitamin C and its derivatives (subject
to cancellation pursuant to Section 3.1(b)); and (iii) such other
nutraceuticals and dietary supplements that become the subject of this
License as a result of ADM exercising its right of refusal set forth in
Section 2.3.
1.9 "Non-Exclusive Licensed Field of Use" shall mean any legal use of the
Inventions and/or Licensed Products constituting one of the following
nutraceuticals and/or dietary supplements: (i) glucosamine; and (ii)
glucosamine and chondroitin.
1.10 "Licensed Patents" shall mean United States Patent Number 6,090,411 and
pending United States Patent Application Number 60/339,887, as well as
rights to any foreign patents or foreign patent applications corresponding
thereto, any continuations, continuations-in-part, divisionals, reissues,
reexaminations, extensions or additions thereof.
1.11 "Licensed Products" shall mean any product or part thereof in the Licensed
Field of Use, the manufacture, use, sale, offer for sale, or importation of
which is covered by one or more valid claims of the issued, unexpired
Licensed Patents. A claim of the issued, unexpired Licensed Patents shall
be presumed to be valid unless and until it has been held to be invalid by
a final judgment of a court of competent jurisdiction from which no appeal
can be or is taken.
1.12 "Net Sales" shall mean ADM's invoiced sales price billed to third parties
for Licensed Products, and received, less (a) credits, allowances,
discounts and rebates to, and charge backs from the account of, such
customers for spoiled, damaged, out-dated, rejected or returned Licensed
Products; (b) (to the extent included in the invoiced sales price) actual
freight and insurance costs incurred in transporting such product in final
form to such customers; (c) cash, quantity and promotional discounts, to
the extent the same reduce the
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invoiced sales price at issue; and (d) sale, use, value-added and other
taxes or governmental charges incurred in connection with the exportation
or importation of such Licensed Products in final form.
1.13 "Territory" shall mean worldwide.
ARTICLE 2. GRANT OF LICENSE
2.1 Nutraceutix Licensed Patents.
For the term of this Agreement and subject to the terms and conditions
hereof, Nutraceutix hereby grants to ADM (i) the sole and exclusive right
and license, with the right to sublicense, to manufacture, have
manufactured on its behalf, use, sell and offer to sell the Licensed
Products and the Inventions in the Territory for the Exclusive Licensed
Field of Use; and (ii) the non-exclusive right and license, with the right
to sublicense, to manufacture, have manufactured on its behalf, use, sell
and offer to sell the Licensed Products and the Inventions in the
Territory for the Non-exclusive Licensed Field of Use. Nutraceutix shall
not grant other licenses under the Licensed Patents in the Territory for
the Exclusive Licensed Field of Use. Further, subject to the provisions of
Section 2.4, Nutraceutix does not retain any rights to manufacture, have
manufactured, use, sell, market, offer for sale or import Licensed
Products and/or Inventions in the Territory for the Exclusive Licensed
Field of Use.
2.2 Improvements.
Nutraceutix shall promptly disclose to ADM any improvements to the
Inventions that are invented, conceived, made, developed, discovered,
first reduced to practice or created by Nutraceutix, its employees or
agents, during the term of this Agreement and that apply to Licensed
Products. ADM shall have the option to license any such improvements and
any patents or patent applications therefor, and if ADM so exercises its
option then the same shall come under this Agreement and be subject to the
terms and provisions hereof. Nutraceutix may file for patent protection
for any such improvements as it sees fit at its cost. If Nutraceutix fails
to pursue patent protection to the extent desired by ADM, and ADM
exercises its option hereunder, then ADM may pursue such patent
protection, at its cost, in the name of Nutraceutix after providing
Nutraceutix with thirty (30) days advance written notice thereof and
Nutraceutix failing to take such action itself during such period of time.
Each party shall provide cooperation to the other party to execute any
documents necessary to effectuate such patent protection.
2.3 Right of Refusal.
(a) Notice of Offer. If Nutraceutix makes or receives a bona fide offer
("Offer") to sell, assign, license or otherwise transfer any
interest in the Inventions or Licensed Patents outside the Licensed
Field of Use but with respect to any nutraceutical or dietary
supplement (the "Option Intellectual Property") to a third-party,
Nutraceutix shall promptly, but no later than ten (10) days after
the Offer is made or received, as the case may be, give written
notice thereof to ADM (the "Notice"). Notwithstanding any provision
hereof to the contrary, if the Offer is rejected by Nutraceutix,
Nutraceutix shall not be required to give the Notice to ADM and ADM
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shall not have an Option (as hereinafter defined) with respect to
the rejected Offer.
(b) Form of Notice. The Notice, in addition to disclosing the existence
of the Offer, shall state: (i) the name, business and residence
address of the proposed purchaser or licensee; (ii) the aggregate
amount of the proposed consideration, including royalties; and (iii)
all other material terms of the Offer, including a detailed
description of the subject intellectual property, the products
derived from the intellectual property and their applications. If
the Offer is written, a copy of the Offer shall accompany the
Notice.
(c) Grant of Option. Nutraceutix hereby grants ADM a right of last
refusal and option (the "Option") to either, at ADM's option, (i)
consummate the transaction proposed by the Offer upon the terms
contained in the Notice; or (ii) elect to have the Option
Intellectual Property come under this Agreement and be subject to
the terms and provisions hereof. ADM shall have the longer of the
thirty-day period beginning on the day ADM receives the Notice and
the period, if any, in which the proposed purchaser must consummate
the transaction proposed by the Offer (the "Option Period") to make
its election. During the Option Period, Nutraceutix shall not enter
into any agreement or contract with respect to an Offer with any
party other than ADM, unless ADM has notified Nutraceutix in writing
that it does not intend to exercise the Option or the Option has
been deemed waived.
(d) Non-Exercise of Option. If, within the Option Period, ADM does not
exercise the Option, Nutraceutix shall be free to consummate the
proposed transaction with the purchaser or licensee identified in
the Notice on the same terms and conditions set forth in the Notice.
If any material change is made in the terms of the Offer, the Offer,
as changed or amended, shall be deemed a new Offer for the purposes
of this Agreement and shall be presented to ADM as set forth above.
2.4 Manufacture of Licensed Products.
If so requested by ADM in writing, Nutraceutix shall either manufacture
for ADM, or arrange to have a subcontractor of Nutraceutix
manufacture for ADM, Licensed Products in blend, bulk tablet or
finished good form. ADM shall pay Nutraceutix for such Licensed
Products an amount equal to Nutraceutix's or its contractor's
fully-burdened manufacturing cost therefor plus nine percent (9%).
ADM shall coordinate such manufacturing with Nutraceutix in such a
way that Nutraceutix's resources are not unduly burdened thereby.
ARTICLE 3. CONSIDERATION
3.1 Reimbursement of Development Costs.
(a) In consideration of the rights and licenses granted to ADM by
Nutraceutix under this Agreement, ADM shall reimburse Nutraceutix
for the costs Nutraceutix has incurred in developing and formulating
Novasoy(R) isoflavones utilizing the Inventions, in the amount of
US$50,000, such amount to be paid upon Nutraceutix presenting
support and verification for such costs.
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(b) In further consideration of the rights and licenses granted to ADM
by Nutraceutix under this Agreement, ADM may at its option reimburse
Nutraceutix for the costs Nutraceutix has incurred in developing and
formulating Vitamin C utilizing the Inventions, in the amount of
US$150,000, such amount, if paid, to be paid on or before nine (9)
months from the Effective Date or Nutraceutix presenting ADM with
support and verification for such costs, whichever is later. If ADM
fails to remit such amount within such period of time, then the
Exclusive Licensed Field of Use shall be deemed to not include
Vitamin C.
3.2 Running Royalties.
In further consideration of the rights and licenses granted to ADM by
Nutraceutix under this Agreement, ADM shall further pay Nutraceutix a
running royalty ("Running Royalty") in United States dollars for each
Contract Quarter equal to ___% of the Net Sales for Licensed Products
sold by ADM during such Contract Quarter.
3.3 Payment of Royalties.
All Running Royalties shall be paid by ADM to Nutraceutix within
forty-five (45) days after the close of the Contract Quarter.
3.4 Books and Records.
ADM shall keep and retain for not less than three (3) years after each
Contract Year in question full, complete and accurate books of account and
records relating to the manufacture, use and sale or other disposition of
the Licensed Products by or for ADM in such detail as will enable
Nutraceutix to ascertain what royalties are due under this Agreement. Such
books and records shall be consistent with ADM's overall financial
statements and in compliance with generally accepted accounting principles
and practices in the United States, consistently applied. ADM shall,
during business hours and upon reasonable notice, permit an independent
accounting firm (retained by Nutraceutix) that has entered into a secrecy
agreement reasonably acceptable to the parties access to such books and
records for the sole purpose of verifying the royalty accrued as herein
provided. The verification will take place at Nutraceutix's expense,
unless the verification indicates that additional amounts are owed to
Nutraceutix in excess of three percent (3%) of the total amounts due
during the period of time verified and in that event ADM shall bear the
expense of the verification.
ARTICLE 4. INFRINGEMENT
4.1 Notification.
In the event that ADM or Nutraceutix has reason to believe that a third
party is infringing upon the Licensed Patents, such party shall promptly
notify the other party in writing of such alleged infringement.
4.2 Infringement Actions.
Upon notification of potential infringement pursuant to Section 4.1, ADM
shall have the option to enforce the Licensed Patents in the Licensed
Field of Use itself or request
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Nutraceutix to enforce the Licensed Patents in the Licenced Field of Use.
In the event ADM elects to enforce the Licenced Patents, the reasonable
costs of such action shall be borne by ADM. In the event ADM elects to have
Nutraceutix enforce the Licenced Patents, ADM shall provide Nutraceutix
with written notice thereof, and to the extent deemed reasonably necessary
by ADM, Nutraceutix shall commence an infringement action, in which event
the reasonable costs of such action shall be borne equally by the Parties.
In either event, the benefits of any damages recovered (after each party
recovers any share of its costs of such action) shall be divided in a
manner that provides Nutraceutix with its Running Royalty and ADM with all
remaining amounts. In any such infringement action, the party commencing
the action (the "Participating Party") shall keep the other party (the
"Non-participating Party") advised of the progress of the litigation and
shall provide the Non-participating Party with drafts of the pleadings,
discovery, motions, and briefs prior to filing for the Non-participating
Party's review and comment. In addition, the Participating Party shall
consult with the Non-participating Party with regard to every material
decision required to be made during the litigation. The Participating Party
shall adopt the Non-participating Party's comments and recommendations
during the litigation except to the extent they may materially impact the
Participating Party's commercial best interests, as determined by the
Participating Party. In any such infringement action or claim brought, the
Non-participating Party shall upon the Participating Party's request,
cooperate with the Participating Party in all respects, and make available
to the Participating Party all relevant information and witnesses who are
employees or within the control of the Non-participating Party. To the
extent necessary, each Party agrees to be joined as a party in any
litigation where it is an indispensable party.
ARTICLE 5. LIMITED WARRANTY AND INDEMNIFICATION
5.1 Limited Warranty.
Nutraceutix represents and warrants that (a) Nutraceutix possesses the full
legal right, authority and power to enter into this Agreement and to grant
the licenses to ADM set forth herein; (b) Nutraceutix is not aware of any
existing or threatened litigation concerning the Licensed Patents or
Inventions; (c) Nutraceutix's rights in the Licensed Patents are genuine
and valid; (d) Nutraceutix has not granted any licenses to the Licensed
Patents in the Licensed Field of Use; (e) the Licensed Patents are all of
Nutraceutix's patents and patent applications, or Nutraceutix is the
exclusive licensee or owner of patents and patent applications, relating to
the Licensed Products and Inventions; (f) Nutraceutix has no actual
knowledge of any material safety concerns with respect to the Licensed
Products. NUTRACEUTIX DOES NOT MAKE ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER CONCERNING THE LICENSED PRODUCTS, THE INVENTIONS, OR THE
LICENSED PATENTS. NUTRACEUTIX HEREBY SPECIFICALLY DISCLAIMS ALL WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
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5.2 Indemnification by Nutraceutix.
Nutraceutix shall defend, indemnify and hold harmless ADM and its
Affiliates and their respective directors, officers, employees, agents,
successors and assigns (each an "Indemnitee") from and against any and all
claims, damages, losses and expenses (including but not limited to
reasonable attorneys' fees) suffered or incurred by, any such Indemnitee
arising from, relating to or otherwise in respect of (i) any breach of, or
inaccuracy in, any representation or warranty of Nutraceutix contained in
Section 5.1 hereof; or (ii) the negligence or willful misconduct of
Nutraceutix, its directors, officers, employees and agents.
5.3 Indemnification by ADM.
ADM shall defend, indemnify and hold harmless Nutraceutix and its
Affiliates and their respective directors, officers, employees, agents,
successors and assigns (each an "Indemnitee") from and against any and all
claims, damages, losses and expenses (including but not limited to
reasonable attorneys' fees) suffered or incurred by any such Indemnitee
arising from, relating to or otherwise in respect of the negligence or
willful misconduct of ADM, its directors, officers, employees and agents;
or (ii) manufacturing, marketing, sale or use of a Licensed Product,
except to the extent attributable to the acts, omissions, breach of
contract, negligence or willful misconduct of Nutraceutix, its directors,
officers, employees or agents.
5.4 Notification.
If a claim by a third party is made against an Indemnitee hereunder, and
if such Indemnitee intends to seek indemnity with respect thereto under
Article 5 hereof, such Indemnitee shall promptly notify the indemnifying
Party in writing of such claims setting forth such claims in reasonable
detail. At its option, the indemnifying Party may undertake, through
counsel of its own choice, the settlement or defense thereof, and the
Indemnitee shall cooperate with it in connection therewith.
ARTICLE 6. TERM; TERMINATION; RENEGOTIATION
6.1 Term.
Unless otherwise terminated earlier as provided herein, the term of this
Agreement shall commence on the Effective Date of this Agreement and
extend for the life of the last to expire of the Licensed Patents.
6.2 Termination. Notwithstanding any other provision herein to the contrary,
this Agreement may be terminated as follows:
(a) By either Party upon written notice to the other Party (i) in the
event that the other Party breaches any of the terms of this
Agreement and such breach is not remedied within a period of sixty
(60) days after written notice is given by the non-breaching Party;
provided, however that if the breach may not be remedied within such
cure period, this Agreement shall not terminate if the Party has
diligently commenced efforts to cure the breach as soon as
reasonably practicable and diligently pursues such efforts and this
Agreement shall terminate if such breach is not remedied within
one-hundred twenty (120) days thereafter; or (ii) in
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the event that the other Party being for more than sixty (60) days
the subject of any voluntary or involuntary proceeding relating to
bankruptcy, insolvency, liquidation, receivership, composition of
or assignment for the benefit of creditors.
(b) By ADM upon written notice to Nutraceutix on or before six (6)
months from the Effective Date.
In the event ADM at any time ceases manufacturing and/or marketing
Licensed Products, ADM shall furnish Nutraceutix such assistance as
Nutraceutix may reasonably request to enable Nutraceutix to continue
supplying Licensed Products to ADM's former customers of Licensed
Products, and to otherwise support such customers' needs with respect to
Licensed Products for a period not to exceed six (6) months and at
Nutraceutix's expense.
6.3 Renegotiation. At any time on or before six (6) months from the Effective
Date, ADM may, upon written notice to Nutraceutix, request the terms of
this Agreement be renegotiated, in which case ADM and Nutraceutix shall in
good faith attempt to renegotiate the terms of this Agreement in a manner
mutually acceptable to the parties. If within thirty (30) days from ADM's
notice requesting renegotiation the parties are unable to reach a mutually
acceptable resolution, then ADM may terminate this Agreement upon written
notice thereof to Nutraceutix.
ARTICLE 7. REASONABLE EFFORTS AND DILIGENCE
7.1 Reasonable Efforts and Diligence
ADM shall use commercially reasonable efforts and diligence to proceed
with the development, manufacture and distribution of the Licensed
Products in the Licensed Field of Use ("Reasonable Efforts"). Nutraceutix
acknowledges that ADM may promote products similar in function to the
Licensed Products, and that while ADM shall use Reasonable Efforts,
ultimately ADM's customers and the end consumer will decide which products
are preferred. If ADM fails to use Reasonable Efforts with respect to one
or more Licensed Products, Nutraceutix shall provide ADM with written
notice thereof, indicating in detail (i) the reasons Nutraceutix believes
ADM has not used Reasonable Efforts; and (ii) the steps Nutraceutix
believes are necessary for ADM to use Reasonable Efforts. Within thirty
(30) days of receiving Nutraceutix's notice, ADM shall send a written
reply to Nutraceutix indicating whether ADM agrees or disagrees. If ADM
agrees with Nutraceutix's assessment, ADM at its option shall elect to
either (i) take the additional steps Nutraceutix set forth as soon as
reasonably possible; or (ii) elect to convert the license granted in
Section 2.1 to a non-exclusive license with respect to the Licensed
Products in issue, in which case ADM has no obligation to take the
additional steps set forth by Nutraceutix. If ADM disagrees with
Nutraceutix's assessment, ADM shall provide Nutraceutix with detailed
reasons therefor and shall propose a meeting time and place to discuss the
matter. The parties shall meet to discuss the matter within thirty (30)
days of Nutraceutix's receipt of ADM's reply at a mutually agreeable time
and place. If the parties fail to reach an agreement at such meeting, the
matter shall be treated as a Dispute and handled pursuant to Article 11.
If the finding from an arbitration is that
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ADM has not used Reasonable Efforts, ADM shall elect within thirty (30)
days of receiving such arbitration award to either (i) take the additional
steps Nutraceutix set forth in its original notice as soon as reasonably
possible; or (ii) elect to convert the license granted in Section 2.1 to a
non-exclusive license with respect to the Licensed Products in issue, in
which case ADM has no obligation to take the additional steps set forth by
Nutraceutix.
ARTICLE 8. PACKAGING, LABELS AND PROMOTIONAL ITEMS
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All packaging, labels and promotional items used or associated with the
Licensed Products shall be marked prominently with all marks required by
the laws and regulations of each country in the Territory in which the
same will be marketed, sold or used for marketing of patented items and
which are necessary or appropriate to maintain the patent protection of
the Licensed Patents or other Intellectual Property rights licensed
pursuant to this Agreement. ADM shall obtain Nutraceutix's written
approval of all such packaging, labels and promotional items which include
any trademark or logo owned by Nutraceutix prior to using the same in
commerce, which approval shall not be unreasonably withheld or delayed.
Subject to the foregoing, Company shall be solely responsible for all
packaging, labels and promotional items for the Licensed Products.
ARTICLE 9. PROTECTION OF PROPRIETARY RIGHTS
-------------------------------------------
ADM acknowledges that the Licensed Products, the Inventions and the
Licensed Patents involve valuable Intellectual Property rights of
Nutraceutix and its licensor. Nutraceutix and its licensor reserve all
such Intellectual Property. ADM shall not infringe or violate, and shall
take appropriate precautions for the protection of, such Intellectual
Property. Without limiting the generality of the foregoing, ADM shall not
apply for or attempt to obtain any Intellectual Property or other
proprietary rights in the Licensed Products, the Inventions, the Licensed
Patents, or any other item licensed pursuant to this Agreement. No title
to or ownership of the Licensed Products, the Inventions, the Licensed
Patents, or any other item licensed pursuant to this Agreement is
transferred pursuant to or by virtue of this Agreement or any use by ADM
of the Licensed Products, the Inventions, the Licensed Patents, or any
other item licensed pursuant to this Agreement.
ARTICLE 10. ASSIGNMENT
----------------------
10.1 Permitted Assignment Only.
--------------------------
Neither this Agreement nor the licenses granted herein may be assigned by
either of the Parties without the prior written consent of the other
Party, except, however, (i) Nutraceutix may assign this Agreement to a
third party acquiring the entire business or substantially all of the
assets of Nutraceutix provided Nutraceutix also assigns to that party all
of its rights to the inventions and Licensed Patents within the Licensed
Field of Use and Nutraceutix provides ADM with written notice thereof on
or before the effective date of such assignment; (ii) ADM may assign this
Agreement and the licenses granted herein to an Affiliate or to a third
party acquiring the entire business or substantially all of the assets of
ADM to which this Agreement pertains, provided that at the time of the
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assignment, the assignability of this License Agreement will not adversely
affect Nutraceutix's rights under the terms of this agreement including its
royalties, and provided ADM provides Nutraceutix with written notice thereof on
or before the effective date of such assignment. Any purported assignment or
transfer in violation of this provision shall be null and void.
10.2 Successors and Assigns.
In the event of a permitted assignment, this Agreement shall be binding
upon, and inure to the benefit of, all the Parties and their respective
successors and legal assigns.
ARTICLE 11. DISPUTES; ARBITRATION
Any dispute, questions, or differences relating to this Agreement, (collectively
"Disagreements") shall be settled, if possible, amicably between the Parties.
Any Disagreements, if not settled by the parties within fifteen (15) days from
the date the disagreement arises, shall be considered a dispute ("Dispute"), and
shall be referred to an executive from each of ADM and Nutraceutix who have
authority to settle the Dispute. If any such Dispute which has not been resolved
by such executives within thirty (30) days after the date it was first referred
to them, ADM and Nutraceutix shall proceed to binding arbitration in accordance
with this Article.
(1) The arbitration shall be held in Chicago, Illinois if either Party demands
arbitration.
(2) The arbitration shall be conducted by three (3) arbitrators in accordance
with the Rules of the American Arbitration Association, except as
expressly set forth herein. Each Party shall promptly select an
arbitrator, and those two arbitrators shall select the third arbitrator.
(3) The arbitration shall be conducted in English, and all written submissions
shall be in English.
(4) The Parties agree that the decision of the arbitrators shall be final and
binding on the Parties and judgment upon the award rendered by the
arbitrators my be entered in any court having jurisdiction thereof.
(5) The Parties agree that the prevailing party in any arbitration shall be
entitled to recover its costs of the arbitration including its reasonable
attorneys' fees from the losing party and that such recovery will be part
of the arbitration award.
(6) The Parties agree that all discovery and all arbitration hearings
associated with a particular Dispute shall be completed within six (6)
months from the date the Dispute was first referred to arbitration.
Notwithstanding the foregoing, the provisions of this paragraph shall apply to
any Dispute regarding the amount of money payable by one Party to the other. In
the case of such a Dispute, the Party desiring to invoke arbitration shall,
prior to invoking the arbitration procedure of this Article 11, tender to the
other Party a figure which is
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designated as that Party's offer for agreement ("Offer of Agreement"). The
other Party shall, within thirty (30) days thereafter, tender its own Offer of
Agreement. Within fifteen (15) days following such second tender of an Offer of
Agreement each Party shall tender to the other a figure which is designated as
the Party's final offer ("Final Offer"). Each tender of an Offer of Agreement
or Final Offer shall be accompanied by supporting documents. If the Parties
fail to reach agreement within ten (10) days following tender of the Final
Offers, then either Party may invoke the arbitration procedure of this
paragraph; provided that in that event (i) the matter at issue shall be
submitted for determination to a single arbitrator having demonstrated
expertise in establishing the monetary amount at issue, (ii) each Party shall
deliver to the arbitrator a copy of that Party's Final Offer and supporting
documents, and (iii) the arbitrator shall choose one of the Final Offers as the
resolution of the Dispute.
Except for (i) an action to enforce payment of an amount that is not in dispute
by either Party, or (ii) an action to seek injunctive relief to prevent or stay
a breach of this Agreement, or (ii) any action necessary to enforce the award
of the arbitrators, the Parties agree that the provisions of this Article 11
shall be a complete defense to any suit, action or other proceeding instituted
in any court or before any administrative tribunal with respect to any Dispute.
ARTICLE 12. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
substantive laws of the state of Illinois, U.S.A., without regard to choice of
law principles.
ARTICLE 13. FORCE MAJEURE
In the event of the intervention of a Force Majeure, which term shall include,
without limitation, strikes, labor disturbances, lockouts, riots, epidemics,
quarantines, wars or conditions of war, actions, inaction or regulations of any
government, fires, acts of terrorists, insurrections, embargoes or trade
restrictions, or any other reasons beyond a Party's control, the Party affected
by the Force Majeure shall use commercially reasonable efforts to comply with
the Agreement. In the case that such commercially reasonable efforts fail or are
futile, such Party shall not be responsible for delays or a failure to perform
under this Agreement caused by a Force Majeure. Provided, however, that any
payment obligations of ADM shall not be affected or excused by such Force
Majeure.
In the event that either Party shall incur a delay in delivery or performance
for a reason permitted by this Article, that Party shall notify the other Party
within fifteen (15) days from the date of the actual occurrence of the cause
for such delay.
ARTICLE 14. NOTICES
All notices, requests and other communication hereunder shall be in writing and
sent by facsimile with confirmation sent by courier requiring acknowledgment of
receipt by the respective Parties as follows:
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To Nutraceutix: Nutraceutix, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇. ▇.▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
To ADM: ▇▇▇▇▇▇-▇▇▇▇▇▇▇-Midland Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: President, ADM Natural Health & Nutrition
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With copy to: ▇▇▇▇▇▇-▇▇▇▇▇▇▇-Midland Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Either Party may change the registered address to which such notice should
be sent by giving written notice to the other Party.
ARTICLE 15. MISCELLANEOUS
15.1 Integration: Entire Agreement.
This Agreement contains the entire agreement of the Parties concerning the
subject matter hereof and supersedes all prior written and oral agreements,
understandings and negotiations, with regard to the subject matter
contained herein.
15.2 Amendments.
This Agreement, including this provision, may not be amended without a
written instrument signed by duly authorized representatives of both
Parties.
15.3 Severability.
In the event that any part of this Agreement is adjudicated to be invalid
or unenforceable because it contravenes any applicable law or regulation,
the parties shall perform this Agreement in accordance with their original
intentions as set forth herein, corresponding as closely as possible to
the invalid or unenforceable part insofar as it is still valid under such
law or regulation and reflects the original intention of the Parties. The
validity of the remaining permissible portions of this Agreement shall
remain unaffected thereby.
15.4 Waiver/Cumulative Rights.
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy upon a breach thereof shall constitute a waiver of any
such breach or any other covenant duty,
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agreement or condition. All rights and remedies which a Party may have
hereunder or by operation of law are cumulative, and the pursuit of one
right or remedy shall not be deemed an election to waive or renounce any
other right or remedy.
15.5 SURVIVAL.
---------
The provisions of Article 5 shall survive expiration or termination of
this Agreement with respect to any action already commenced prior to the
expiration or termination of this Agreement. The provisions of Article 11
shall survive expiration or termination of this Agreement indefinitely.
15.6 NO JOINT VENTURE OR PARTNERSHIP RELATIONSHIP.
---------------------------------------------
Nothing contained in or relating to this Agreement is or shall be deemed
to constitute a joint venture, partnership or agency relationship between
any of the Parties hereto and no Party shall have any authority to act for
or to assume any obligation or responsibility on behalf of the other
Party.
15.7 ATTORNEYS FEES AND COSTS.
-------------------------
The prevailing party in any dispute under this Agreement shall be entitled
to recover from other party its reasonable attorney's fees and costs.
15.8 AUTHORIZED EXECUTION.
---------------------
The individuals signing below each represent and warrant that (a) they are
authorized to execute this Agreement for and on behalf of the party for
whom they are signing, (b) such party shall be bound in all respects
hereby, and (c) such execution presents no conflict with any other
agreement of such party.
15.9 COUNTERPARTS.
-------------
This Agreement may be executed in two or more counterparts, all of which
shall constitute one and the same Agreement.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed by their duly authorized representative as of the day and year
above written.
NUTRACEUTIX, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:________________________
Name: President & CEO
______________________
Title: ____________________
Date: 3-25-2002
_____________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MIDLAND COMPANY
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: _________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: _______________________________________
President, Natural Health & Nutrition
Title: ______________________________________
3-25-02
Date: ______________________
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