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EXHIBIT 10.8
AMENDMENT TO LICENSE AGREEMENTS
THIS AGREEMENT dated this 18th day December, 1996, by and between North
Carolina State University ("UNIVERSITY") and ▇▇▇▇▇▇▇ Foods, Inc., a Delaware
corporation ("LICENSEE");
WHEREAS, under date of April 22, 1988, UNIVERSITY entered into a
License Agreement with Morning Glory Eggs, Inc., the predecessor in interest of
LICENSEE, which license was previously amended under date of November 28, 1989
and September 12, 1991; and
WHEREAS, UNIVERSITY and LICENSEE entered into two related License
Agreements: One dated November 28, 1989, and amended September 12, 1991, and
the second dated September 1, 1991 (collectively with the April 22, 1988
Agreement, the "License Agreements"); and
WHEREAS, pursuant to the terms of the License Agreements, LICENSEE has
initiated and, with UNIVERSITY, pursued certain legal actions to enforce the
Patent Rights covered by the License Agreements and in connection therewith has
expended funds in protecting and enforcing the Patent Rights pursuant to Section
9.3 of the License Agreements; and
WHEREAS, under date of June 28, 1996, LICENSEE entered into an
Agreement and Plan of Reorganization between and among LICENSEE and Papetti's
High Grade Egg Products, Inc. and certain other related parties, the completion
of which is conditioned, among other things, upon the execution and delivery of
a Settlement Agreement and Mutual Release in substantially the form attached
hereto as Exhibit A (the "Settlement Agreement"); and
WHEREAS, the parties agree that the execution and delivery of the
Settlement Agreement and the modification and clarification of the License
Agreements hereinafter provided is in the best interest of the parties and will
be useful to promote the commercialization of the Licensed Product and Licensed
Process;
NOW, THEREFORE, UNIVERSITY AND LICENSEE, for good and valuable
consideration, hereby agree to modify the terms of the License Agreements as
set forth herein.
1. Unless the context otherwise requires, capitalized terms used
herein shall have the meanings provided in the License Agreements.
2. Article I of the License Agreements shall be modified by adding a
new Section 1.8, as follows:
"1.8 'Active Litigation' means any civil action or proceeding in
a regularly established court, whereby LICENSEE seeks to protect and enforce
the Patent Rights pursuant to Section 9.3 hereof, so long as such action or
proceeding is not stayed by the court or by agreement of the parties to the
litigation."
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3. Article IX, Section 9.3, of each of the License Agreements (as
previously amended) is hereby deleted in its entirety, and the following
substituted therefor:
"9.3 In the event LICENSEE shall undertake the enforcement and/or
defense of the Patent Rights by litigation, including any declaratory
judgment action, LICENSEE may withhold certain portions of royalty payments
otherwise due UNIVERSITY under Articles IV an V of this Agreement, as
follows:
"(a) in any calendar quarter in which there is no Active
Litigation, LICENSEE may withhold up to twenty-five percent (25%) of
such royalty payments; and
"(b) in any calendar quarter in which there is Active
Litigation, LICENSEE may withhold up to fifty percent (50%) of such
royalty payments.
"In no event shall LICENSEE's withholding under 9.3(a) or (b), above,
exceed the total of the legal expenses, including reasonable attorneys'
fees, incurred by LICENSEE in the enforcement or defense of the Patent
Rights for the calendar quarter involved plus any such legal expenses which
were incurred in previous quarters but which have not been recovered."
"All royalty payments withheld pursuant to this Section 9.3 shall be
applied by LICENSEE to offset any legal expenses, including reasonable
attorneys' fees, incurred in the enforcement or defense of the Patent
Rights, including all such expenses incurred prior to the date of this
amendment. LICENSEE's right to withhold royalties shall extend only until
all of LICENSEE's legal expenses, including reasonable attorneys' fees,
incurred in the enforcement or defense of the Patent Rights, are
recovered. Any recovery by LICENSEE, whether by judgment, settlement or
otherwise, shall be applied first in satisfaction of any unreimbursed
legal expenses including reasonable attorneys' fees of LICENSEE; second,
toward reimbursement of UNIVERSITY's legal expenses, including reasonable
attorneys' fees, relating to the enforcement or defense of the Patent
Rights, which have not been previously reimbursed by LICENSEE; and third,
toward reimbursement of UNIVERSITY for any amounts past due or withheld
and applied in accordance with this Article IX. The balance, if any,
remaining from any such recovery or settlement shall be distributed to
LICENSEE; provided, that LICENSEE shall pay royalties to UNIVERSITY out of
said balance in accordance with the royalty rates set forth in Article IV
for that portion of any remaining recovery which is attributable to
LICENSEE's lost sales. LICENSEE shall be entitled to settle any such
litigation by agreement, consent judgment, voluntary dismissal or
otherwise, with the consent of the UNIVERSITY, which shall not be
unreasonably withheld; provided, however, that LICENSEE hereby agrees to
advise UNIVERSITY as soon as practicable
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after it has entered into any settlement discussions so that UNIVERSITY
has a reasonable opportunity to provide LICENSEE with its views on any
proposed settlement of any such action or proceeding."
4. UNIVERSITY agrees to execute and deliver the Settlement Agreement in
substantially the form attached hereto as Exhibit A on or before the closing
date of the Agreement and Plan of Reorganization between and among LICENSEE and
Papetti's High Grade Egg Products, Inc. and certain other parties dated June
28, 1996 and the payment to be made pursuant to said Settlement Agreement and
Mutual Release shall, under the provisions of Section 9.3 of the License
Agreements as herein amended, be applied to reduce the accrued unreimbursed
expenses of LICENSEE as herein described. The execution and delivery of the
Settlement Agreement shall not affect any other contractual agreement between
UNIVERSITY and LICENSEE regarding the responsibility for payment of costs and
expenses of litigation as set forth in this Agreement.
5. This Agreement shall be effective as of the date of closing of the
Agreement and Plan of Reorganization by and among ▇▇▇▇▇▇▇ Foods, Inc. and
Papetti's High Grade Egg Products, Inc. and certain related entities referred
to above. This Agreement shall terminate and be of no effect upon the
termination or abandonment of the foregoing Agreement and Plan of
Reorganization.
6. The foregoing constitutes the only amendments to the License Agreements
made under this Agreement. In all other respects the License Agreements are
hereby republished and reaffirmed.
IN WITNESS WHEREOF, the undersigned have executed this Agreement the day
and year first above written.
NORTH CAROLINA STATE ▇▇▇▇▇▇▇ FOODS, INC.
UNIVERSITY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------- ------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice Chancellor for Research, Executive Vice President
Outreach, Extension and Economic
Development
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EXHIBIT F
SETTLEMENT AGREEMENT AND MUTUAL RELEASE
This Settlement Agreement is entered into between ▇▇▇▇▇▇▇ Foods, Inc.
("▇▇▇▇▇▇▇") and North Carolina State University ("NCSU") and their subsidiaries,
affiliates, successors, assigns, insurers, shareholders, directors, officers,
employees, agents, and representatives, on the one hand, and Papetti's Hygrade
Egg Products, Inc., and its subsidiaries, affiliates, successors, assigns,
insurers, shareholders, directors, officers, employees, agents, and
representatives ("Papetti's Hygrade"), on the other hand.
RECITALS
A. The following litigation and claims are pending:
1. ▇▇▇▇▇▇▇ Foods, Inc. and North Carolina State University vs.
Papetti's Hygrade Egg Products, Inc., U.S. District Court for the District of
New Jersey, Civil Action No. 89-4645.
2. Papetti's Hygrade Egg Products, Inc. vs. ▇▇▇▇▇▇▇ Foods, Inc.,
U.S. District Court for the District of New Jersey, Civil Action No. 91-1849.
B. In connection with an Agreement and Plan of Reorganization between
▇▇▇▇▇▇▇ and Papetti's Hygrade and certain other related entities dated
____________________, 1996 (the "Reorganization Agreement"), the parties desire
to fully and finally compromise and settle the above litigation and claims,
thereby resolving all issues between and among the parties in respect thereto.
C. For the consideration provided herein and the mutual covenants and
agreements contained herein, the sufficiency of which is hereby acknowledged,
the parties agree as follows:
EXHIBIT A
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AGREEMENTS
1. At the Closing of the transactions contemplated by the
Reorganization Agreement, Papetti's Hygrade shall pay to ▇▇▇▇▇▇▇ for the benefit
of ▇▇▇▇▇▇▇ and NCSU the sum of $6,000,000. Payment of the aforesaid amount
shall not be deemed an admission of liability by any party but shall be paid
solely to fully settle and compromise the claims of the parties as hereafter
provided.
2. The following patents held by NCSU and exclusively licensed to
▇▇▇▇▇▇▇ are valid and enforceable in all respects:
(1) United States Patent No. 4,808,425
(2) United States Patent No. 4,957,759
(3) United States Patent No. 4,994,291
(4) United States Patent No. 5,019,408
3. The parties will affirmatively and fully cooperate with and assist
one another in defending the validity and enforceability of the aforesaid
patents in the United States Patent and Trademark Office and in the courts,
including pursuing claims that said patents have been infringed by other
persons.
4. ▇▇▇▇▇▇▇ and NCSU, on the one hand, and Papetti's Hygrade, on the
other hand, hereby release and forever discharge each other and their
subsidiaries, affiliates, successors, heirs, assigns, insurers, shareholders,
directors, officers, employees, agents, and representatives, of and from any and
all past and present claims, demands, liabilities, judgments, losses, damages,
expenses, and causes of action, at law or in equity, known or unknown, asserted
or unasserted, liquidated or unliquidated, fixed or contingent, direct or
indirect, accrued or
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unaccrued, which they have ever had, presently have, claim to have, or claim to
have had against one another relating to or as a result of any competition
between them or any aspect of the referenced patents or any other patents,
including, but not limited to, all claims that have been made or could have been
made in the litigation referenced in Recital A hereof; provided however, that
this mutual release is expressly contingent upon the Reorganization Agreement
being finally consummated.
5. Each party shall be responsible for and shall pay its own costs and
expenses, including all attorneys' fees and other professional fees and
expenses, incurred in connection with the litigation and claims referenced in
Recital A hereof.
6. This agreement shall not constitute an admission of liability by any
party.
7. Each party represents and warrants that it is duly authorized to
execute this agreement on its behalf and that this Agreement, when executed and
delivered, will be binding upon each party and enforceable in accordance with
its term, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or limiting creditors'
rights generally or to equitable principles relating to enforceability of
agreements.
8. Each party warrants and represents that it has consulted with its
attorneys regarding the effect of this agreement, and that he or it has
executed this agreement fully aware of its contents, purposes, and effects,
based upon his or its sole judgment, belief, and knowledge, and upon the advice
of its own attorneys, and that it is not relying on any representations or
statements made by any other party or anyone representing any other party.
9. This agreement shall be governed by the law of the State of New Jersey.
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10. In the event that the Reorganization Agreement is not finally
consummated, then this agreement shall be null, void, and of no further force or
effect, as if it had never been entered into by the parties, and the parties
shall be restored to all rights and obligations that they possessed before this
agreement was executed.
11. Promptly upon completion of the Reorganization Agreement, the
parties shall cause their respective counsel to execute and file Stipulations
of Dismissal with Prejudice directing the Court to dismiss the litigation
described in Recital A on the merits and without costs to any party.
12. This agreement may be executed in counterparts, with the same
force and effect as if the signatures were upon the same instrument.
▇▇▇▇▇▇▇ FOODS, INC.
Dated:______________, 1996 By___________________________
Its__________________________
NORTH CAROLINA STATE UNIVERSITY
Dated:______________, 1996 By___________________________
Its__________________________
PAPETTI'S HYGRADE EGG PRODUCTS, INC.
Dated:______________, 1996 By___________________________
Its__________________________
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