DATED THIS 21st DAY OF February 2001
BETWEEN
EVERBLOOM BIOTECHNOLOGY (CANADA) LTD
AND
EVERBLOOM - RIDGE MUSHROOM JOINT VENTURE
LICENCE AGREEMENT
THIS AGREEMENT made as of the 21st day of February 2001 BETWEEN EVERBLOOM
BIOTECHNOLOGY (CANADA) LTE), a corporation valid and existing under the laws of
Province of Ontario and having its head office at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (hereinafter referred to. as..the "Licensor")/~ND
EVERBLOOM - RIDGE MUSHROOM JOINT VENTURE, a corporation va~~~=iej-under the laws
of Canada and having its registered office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (hereinafter referred to as the "Licensee").
WHEREAS the Licensor has the exclusive North America rights to certain
Proprietary Marks (as hereinafter defined) and the Know-how/Technology (as
hereinafter defined);
AND WHEREAS the Licensee is desirous of obtaining, and the Licensor is desirous
of granting to the Licensee, the right to use the Proprietary Marks and the
right to sublicense Know-how/ Technology for the manufacturing, production,
marketing and/or sale of the Products (as hereinafter defined) in the Territory
(as hereinafter defined), upon the terms and subject to conditions as
hereinafter set out;
NOW THEREFORE THIS AGREEMENT WlTNESSE'S that in consideration of the respective
covenants and agreements of the parties contained herein, the sum of one dollar
paid by each party hereto to each of the other parties hereto and other good and
valuable consideration (the receipt and sufficiency of which is hereby
acknowledge by each of the parties hereto) it is agreed as follows:
ARTICLES ONE
DEFINITIONS
1.1 Whenever used in this Agreement the following terms shall be deemed to have
the following meanings unless the context otherwise requires:
"Business" shall mean the cultivation of Shiitake Mushroom including the
production of Logs and Spawn as well as other exotic and medicinal mushrooms,
"Confidential Information" shall mean all information (whether written or
verbal) in and relating to the Documentation, Know-how/Technology and all other
inforrnationfurnished by the Licensor to the Licensee relating to the business
and trade secrets of the Licensor, but shall exclude the following information:
(i) information which is or becomes available to the public through no
fault of the party receiving such information; and
(ii) information which is subsequently received by any party from any third
party.
"Documentation" shall mean all drawings, specification, manuals and any other
applicable -media and documentation relating to the Know-how/Technology or its
usage thereof including all materials useful for design (for example, logic
manuals, flow charts and principles of operation) and machine-readable text or
graphic files subject to display or printout, all advertising, promotional,
commercial and publicity pamphlets, brochures, leaflets and other materials
whatsoever relating to the Products.
"Improvements" shall mean future improvements relating to Know-how/Technology
and Technical Information and Documentation.
"Know-how/Technology" shall mean all information and data including formulae
Technology design specifications, techniques procedures, plans, discoveries and
inventions (whether patented or not) as used at any time by the Licensor in
growing, marketing and selling Shiitake Mushrooms including the production of
Logs and Spawn as well as other exotic and medicinal mushrooms at their
facilities in Singapore and by any other licensees wherever legally possible,
which pertain to the use and exploitation of the Process or the cultivation or
marketing and sale of Shiitake Mushrooms and other exotic mushrooms by means of
the Process, together with any further information or data pertaining thereto as
may be available with the Licensor.
"Logs" shall mean raw materials comprising pre~formulated materials such as
chopped wood and/or sawdust and Nutrient Mix mixed with water in the proper
ration according to the Licensor's Know-how/Technology.
"Materials" shall mean Logs, Spawn and Nutrient Mix.
"Nutrient Mix" shall mean the nutrients developed by the Licensor for the
cultivation of Shiitake Mushrooms and production of Logs and Spawn as well as
other exotic and medicinal mushrooms.
"Other Exotic Mushrooms" to the Process or any part thereof. shall mean other
species of mushroom cultivated according
"Parties" shall mean the Licensor and Licensee.
"Plant" shall mean a facility in British Coloumbia designed and approved by the
Licensor to produce fresh Shiitake Mushrooms or other exotic mushrooms, using
the Technical Information, Documentation and Improvements provided by the
Licensor hereunder. The land and investment for the Plant will be committed by
the Licensee.
"Process" shall mean the process to produce fungi of the species Shiitake and
other exotic mushrooms by the means described in USA Patent Nos. 4987698,
4542608 and 4833821 and Canada Patent Nos. 1207690 and 1288371.
"Proprietary Marks" shall mean the trade marks, trade names, Iogos, designs,
symbols, emblems, insignia, fascia, slogans and other identifying marks~wl~ether
or not registered or capable of registration now or at any time hereafter
adopted by the Licensor for use in connection with any Product and/or the
Know-how/Technology.
"Shiitake Mushrooms" shall mean the fungi of the species Shiitake cultivated
according to the Process or any part thereof.
"Spawn" shall mean the spawn of the species Shiitake produced according to the
Licensor's Know-how/Technology.
"Technical Information" shall mean the information, know-how, data, formulae,
specifications, techniques, designs, procedures, plans, discoveries and
inventions (whether patented or not) available with the Licensor and relating to
the following, in so far as the same has been commercially tested and used and
found to be successful, including (but not limited to):
(i) design, engineering, fabrication, erection and installation of plant,
machinery and equipment required for the production of Product and
sources of supply thereof;
(ii)production processes and methods, operating conditions, pollution and
quality control and testing and product development in respect of
Product;
(iii)and nutrient mixes and all other materials and ingredients to be used
in the production of the Product including instructions on the
required quantities and characteristics thereof and their treatment in
the production of Product as well as sources of supply thereof.
ARTICLE TWO
GRANT OF LICENSE
2.1 Provision of Documentation. The Licensor hereby grants to the Licensee, and
the Licensee hereby accepts a license to use, and the right to sublicense
the Proprietary Marks, Know-how/ Technology and Documentation as well as
all Improvements thereon for the cultivation, manufacturing, production,
marketing and/or sale of the Products (the "Rights").
2.2 Territory. The Rights granted to the Licensee pursuant to this Agreement
snail extend to British Colombia (hereinafter called the "Territory").
2.3 Cultivation, Marketing and Distribution. The Licensor acknowledges and
agrees that the Licensee shall be using the Proprietary Marks,
Know-how/Technology, Documentation and the Process to cultivate, market and
distribute Shiitake Mushrooms and other exotic, edible and medicinal
mushrooms throughout the Territory.
2.4 Sub-license. The Licensor hereby grants to the"Licensee the right to
sub-license in the Territory any and all of the rights granted to the
Licensee as set out in this Agreement to sub-licensees at the sole
discretion of the Licensee, such sub-license agreements and the parties
therein to be fully disclosed and communicated to the Licensor.
ARTICLE THREE
CONSIDERATION
3.1 License Fees. In consideration of the rights and license granted, and the
duties and obligations of the Licensor as set out herein, the Licensee
shall pay to the Licensor a technology fee of C$500,000 (Five Hundred
Thousand Canadian Dollars) net of all taxes (including but not limited to
withholding taxes), dues, charges and expenses, said fee to be satisfied by
the issue of C$500,000 (Five Hundred Thousand Canadian Dollars) worth of
stock.
3.2 Sub-license Fees. In further consideration of the fight granted by the
Licensor to the Licensee as set out in Section 2.4 of this Agreement, the
Licensee agrees to pay the Licensor an amount equal to 25% of all monies
and all other considerations paid to and received by the Licensee from its
sub-licensee(s) for the sub-license(s).
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF THE LICENSOR
4.1 The Licensor represents and warrants to the Licensee that the Licensor has
the exclusive North American license to the Proprietary Marks,
Know-how/Technology, Documentation and Process including without limiting
the generality of the foregoing all rights in and to the patents,
trademarks and other intellectual property as set out in this Agreement and
that the Licensor has the sole and exclusive right to authorize the use of
such patents, trademarks and other intellectual property by the Licensee in
accordance with the provisions of this Agreement.
ARTICLE FIVE
COVENANTS OF THE LICENSOR AND THE LICENSEE
5.1 The Licensee covenants and agrees to do the following throughout the term of
this Agreement:
(i) to operate and maintain proper accounting procedures in accordance with
generally accepted accounting principles;
(ii) to keep at its registered office true and accurate records, accounts, books
and data ("Business Records") which shall accurately reflect all
particulars relating to the Business and shall submit to the Licensor such
information and reports concerning the Business in such form as may be
specified by the Licensor;
(iii)to submit quarterly Statement of Sales and Royalties Payable within 60
days after the end of each quarter;
(iv) to submit financial reports relating to the Business on a half-yearly
basis, not later than days after the mid-year and year-end dates;
(v) to submit annual audited accounts of the Business within 180 days after the
year end;
(vi) to preserve and keep all Business Records for a period as required by local
tax laws;
The Licensee shall further ensure that each and every covenant referred to above
will also be obtained from any and all sub-licensees and same shall be forwarded
to the Licensor.
5.2 The Licensor covenants and agrees to do the following throughout the term
of this Agreement:
(i) to furnish to the Licensee and its sub-licensees all" Know-how/Technology,
Technical Information, Documentation and Improvements and render all
assistance necessary to enable the Licensee and its sub-licensees to
successfully establish the Plant and to produce and cultivate the Product;
(ii) without limiting the generality of the foregoing, the Licensor shall, from
time to time, provide to the Licensee and its sub-licensees, complete and
up-to-date Know-how/Technology, Technical Information, Documentation and
Improvements as it becomes available;
(iii)to enable the Licensee and its sub-licensees to design, engineer, erect,
install and commission the Plant and all machinery and equipment therein
and to successfully produce, develop and sell the Product;
(iv) to enable the Licensee and its sub-licensees to procure suitable machinery,
equipment and spares at reasonable prices and to fabricate and manufacture
the same indigenously in The Territory;
(v) to enable the Licensor and its sub-licensees to procure in the
international markets, alternative raw materials, consumables and other
inputs necessary for production of Product at reasonable prices. All
Technical Information and Documentation referred to above shall be
furnished in English and shall be delivered to the Licensee within thirty
(30) days of the Effective Date.
ARTICLE SIX
TRAINING OF THE LICENSEE'S PERSONNEL
6.1 During the tenure of this Agreement, the Licensor shall train the
Licensee's personnel at the Plant as well as at other suitable factories
for the proper use and exploitation of Technical Information, Documentation
and Improvements furnished hereunder and for development of new products
and articles. For this purpose, the Licensor shall deploy, for a duration
of not more than one month at anyone time, as and when necessary,
sufficiently knowledgeable and experienced consultants to the Plant.
6.2 Any such consultants deployed by the Licensor shall, during their stay in
the Territory, observe all rules and regulations that apply to Licensee's
employees.
6.3 The personnel to be trained, the consultants to be deployed and the periods
of such training, shall be as agreed by the parties from time to time.
6.4 All expenses incurred in connection with the training of the Licensee's
personnel at the Plant and elsewhere shall be borne by the Licensee unless
otherwise mutually agreed to by the parties.
6.5 The Licensee shall pay the Licensor a consultant's fee to be negotiated on
an individual basis and shall meet the actual expense of the Licensor
consultants deployed in the Territory, in respect of their travel, board
and lodging; but no daily or other fees or remuneration will be paid to
them.
ARTICLE SEVEN
MANAGEMENT OF PLANT
7.1 During the tenure of this Agreement and on mutual agreement, the Licensor
shall deploy its personnel in such numbers, not exceeding three (3) at
anyone time, as are necessary to supervise, oversee and manage the
operation of the Plant. as agreed by the Parties from time to time.
7.2 All costs and expenses incurred or accrued to the personnel shall be borne
and paid by the Licensee. The costs and expenses shall include, but not
limited to, remuneration, salary, board, lodging, travel, transportation
and other reasonable amenities.
7.3 In addition to the deployment of the Licensor's technical personnel to
assist in the operation of the Plant as may be agreed from time to time,
the Licens(3r sh-'ail arrange for a senior consultant to visit the Plant to
review production and technical issues with the Licensee's management once
a year and such traveling, accommodation, meals and out-of-pocket expenses
shall be borne by the Licensee.
ARTICLE EIGHT
ROYALTIES AND PAYMENTS
8.1 As consideration for the continual transfer of the Know-how~Technology, the
Licensee shall pay the Licensor a royalty equivalent to 5% of the ex-farm
value of Shiitake Mushrooms and other exotic mushrooms produced utilizing
the Know-how/Technology in the Territory by the Licensee or
sub-licensee(s). Should product produced utilizing the Know-how/Technology
in the Territory by the Licensee or sub-licensee(s) be sold between the
Licensee and sub-licensee(s), the value to used for royalty determination
shall be the greater.
8.2 Such royalties due under Clause 8.1 above shall be due immediately after
the end of the quarter and payable within 60 days from that date without
the need for a demand from the Licensor. Any late payment shall attract
interest calculated at the rate of 1.0% per month from the due date.
8.3 Time will run from the date on which domestic production of sawdust and
logs commences on a commercial basis.
8.4 Any improvements to the Know-howfTechnology shall be passed on to the
Licensee and its sub- licensees without any further requirement of payments
of fees or royalties.
ARTICLE NINE
MARKETING OF PRODUCTS
9.1 The Licensor agrees to use their best endeavors to assist the Licensee to
market the Products. Such sales shall be under the brand "EVERBLOOM" or
such other names as shall be mutually agreed to by the parties.
9.2 As consideration thereof, the Licensee agrees to pay to the Licensor a
commission of 10% on the sales attributed solely or partially to the
Licensor.
9.3 Except with the written consent of the Licensor, the Licensee and its
sub-licensees shall not export its products to territories where the
Licensor already has a presence directly or indirectly.
ARTICLE TEN
SUPPLY OF RAW MATERIALS AND COMMERCIAL SERVICES
10.1 In the event that the Licensee requires any raw materials for the
production and cultivation of the Product and makes a written request for
the same, the Licensor shall supply the same at such prices and on such
other terms as may mutually be agreed upon.
10.2 The Licensor will assist the Licensee in the sourcing/supply of machinery
and consumables required to set up and operate the Plant, as and when
called upon to do so by the Licensee. 10.3 The raw materials shall include
the Nutrient Mix, which shall be supplied by the Licensor at a price to be
agreed.
ARTICLE ELEVEN
TERM OF AGREEMENT
11.1 Term of Agreement. This Agreement shall come into effect on its date of
execution and shall continue in full force and effect for an indefinite
period of time, unless terminated earlier in accordance with the terms set
out below.
11.2 Termination of Agreement. The Licensor shall be entitled to terminate this
Agreement where:
(i) the Licensee breaches any of its covenants and obligations in this
Agreement including without limiting the generality of the foregoing;
(ii) if the Licensee fails to submit when due the Statement of Sales and
Royalties Payable and financial reports which the Licensor is entitled
to under this Agreement;
(iii)if the Licensee fails to make payment of amounts due under this
Agreement within 60 days when they fall due; and
(iv) in the event that the Licensee is liquidated, dissolved or becomes
insolvent or bankrupt or placed under judicial management or the
control to receivers or trustees.
then the Licensor shall have the right to terminate this Agreement after giving
the Licensee written notice setting out such default and sixty (60) days to
rectify the default. If after sixty (60) days elapsed, the Licensee has failed
to cure said default, this Agreement shall be terminated forthwith and the
Licensee shall not be entitled to reimbursement of any fees paid by the Licensee
at the date of termination.
11.3 Injunction. The Licensor shall be entitled to an injunction to
restrain the Licensee from engaging in any activities which constitute
a breach of any of the provisions of this Agreement without limiting
any other legal or equitable remedies available to the Licensor.
11.4 The Licensee's Right Terminate. In the event that the Licensor shall
breach any of its covenants and obligations in this Agreement or in
the event that the Licensor is liquidated, dissolved or becomes
insolvent or bankrupt or is placed under judicial management or the
control to receivers or trustees, the Licensee shall have the right to
terminate this Agreement after giving the Licensor written notice
setting out such default and thirty (30) days to rectify the default
If after thirty days have elapsed, the Licensor has failed to cure
said default, this Agreement shall be terminated forthwith.
11.5 Termination Not to Relieve Obligations of Parties. Any termination
pursuant to this Agreement shall not relieve any party of any
obligation or liability accrued hereunder prior to such termination or
rescind or give rise to any right to rescind anything done by any
party hereunder prior to the time such termination becomes effective
and such termination shall not affect in any manner any rights of any
party arising under this Agreement prior to such termination.
ARTICLE TWELVE
GOVERNMENTAL APPROVALS
12.1 The Parties hereto undertake to obtain from the respective Governments
all approvals and authorizations necessary or required for the
implementation of the provisions of this Agreement.
12.2 Should approval or authorization from the respective Governments be
subsequently withdrawn for any reason whatsoever, this Agreement shall
automatically be terminated unless otherwise agreed between the
Parties.
ARTICLE THIRTEEN
CONFIDENTIALITY
13.1 Each party hereto undertakes to keep secret all information of a
confidential or secret nature supplied by one party to the other
pursuant to this Agreement and agrees not to disclose any of such
information to the public or to any third party during the term of
this Agreement and following the expiration thereof without the
express prior consent in writing of the supplying party and each party
in receipt of such information is to ensure that it discloses such
information only to responsible employees and consultants whose duties
are in furtherance of the objectives of this Agreement and which
cannot be fulfilled without use by such Party of the information and
where it is relevant to those duties and who are under binding
obligations to keep secret such of the information as is necessarily
disclosed to them.
ARTICLE FOURTEEN
RELATIONSHIP OF PARTIES AND INDEMNIFICATION
14.1 It is hereby declared that the Licensee is an independent contractor
and not an agent, legal representative, joint venturer, partner,
employee or servant of the Licensor and is not empowered to act on the
Licensor's behalf in any manner. The Licensee agrees that the Licensor
is not in any way a fiduciary of the Licensee.
14.2 The Licensee shall indemnify the Licensor, its officers, directors,
employees, agents, affiliates, successors and assigns against:
(i) any and all claims, damages, or liabilities based upon, arTsing
out of, or in any way related to any negligence or act or
omission by the Licensee or any of its agents, contractors,
servants, employees or licensees, and any obligation of the
Licensee incurred pursuant to any provision of this Agreement;
(ii) any or all fees (including reasonable attorney's fees), costs and
other expenses incurred or on behalf of the Licensor in the
investigation, defence or prosecution of any and all claims.
ARTICLE FIFTEEN
GENERAL CONTRACT PROVISIIONS
15.1 Notices. All notices or other communication to the Licensor required by the
terms of this Agreement shall be in writing and sent by registered mail,
return receipt request, addressed to Everbloom Biotechnology (Canada) Ltd.
at ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇, or such other address as the Licensee shall designate in writing, or by
facsimile or to such -address confirmed by registered mail.
All notices or other communication to The Licensee contemplated by the terms of
this Agreement shall be in writing and sent by registered mail, return receipt
request, addressed to ----------------, or such other address as the Licensee
shall designate in writing or by facsimile or to such address confirmed by
registered mail.
If by registered mail, any notice shall be deemed to have been given when
received, or if by facsimile, when the appropriate confirmation is received.
15.2 Assignment. The Licensee and its sub-licensees shy'ill not be entitled at
any time to assign this Agreement or any part hereof except with the
previous written consent of the Licensor such consent not to be
unreasonably withheld.
15.3 Time of the Essence. Time shall be of the essence of this Agreement and of
every part hereof and no extension or variation of this Agreement shall
operate as a waiver of this provision.
15.4 Entire Agreement. This Agreement constitutes the entire Agreement between
the Parties with respect to all of the matters herein and its execution has
not been induced by, nor do any of the parties rely upon or regard as
material, any representations or writings whatever not incorporated herein
and made a part hereof and may not be amended or modified in any respect
except by written instrument signed by the parties hereto. Any schedules
referred to herein are incorloorated herein by reference and form part of
the Agreement.
15.5 Additional Considerations. The parties shall sign such further and other
documents, cause such meetings to be held, resolutions passed and by-laws
enacted, exercise their vote and influence, do and perform and cause to be
done and performed such further and other acts and things as may be
necessary or desirable in order to give full effect to this agreement and
every part thereof
15.6 Enurament. This Agreement shall enure to the benefit of and be binding upon
the parties and their respective successors and assigns.
15.7 Waiver. No omission or delay on the part of any party in exercising its
rights under this Agreement shall operate as a waiver thereof, nor shall
any single or partial exercise by any party of any such right preclude the
further or other exercise thereof or the exercise of any other right which
it may have. Failure of either party to require performance by the other
party of any provision hereof shall in no way affect the full right to
require such performance at anytime thereafter. Nor shall the waiver by
either party of a breach of any provision hereof be taken or held -to be a
waiver of any succeeding breach of such provision or as a waiver of the
provision itself
15.8 Severability. If any Article, Section or any portion of any Section of this
Agreement is determined to be unenforceable or invalid for any reason
whatsoever that unenferceability or invalidity shall not affect the
enforceability or validity of the rem~ining portions of this Agreement and
such unenforceable or invalid Article, Section or portion thereof shall be
severed from the remainder of this Agreement.
15.9 Headings for Convenience Only. The division of this Agreement into articles
and sections is for convenience of reference only and shall not affect the
interpretation or construction of this Agreement.
15.10Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Parties
agree to submit to courts.
15.11Gender. In this Agreement, words importing the singular number shall
include the plural and vice versa, and words importing the use of any
gender shall include the masculine, feminine and neuter genders and the
word "person" shall include an individual, a trust, a partnership, a body
corporate, an association or other incorporated or unincorporated
organization or entity.
15.12Calculation of Time. When calculating the period of time within which or
following which any act is to be done or step taken pursuant to this
Agreement, the date which is the reference date in calculating such period
shall be excluded. If the last day of such period is not a Business Day,
then the time period in question shall end on the first business day
following such non-business day.
15.13Counterparts. This Agreement may be executed in several counterparts, each
of which so executed shall be deemed to be an original and such
counterparts together shall be but one and the same instrument.
IN WITNESS WHEREOF the parties have duly executed this Agreement as of the date
and -year written above.
SIGNED by ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ) for and on behalf
of EVERBLOOM BIOTECHNOLOGY ) (CANADA) LTD in kA
SIGNED by
for and on behalf of EVERBLOOM - RIDGE MUSHROOM JOINT VENTURE in the
presence of:
