EXCLUSIVE and CONFIDENTIAL RESEARCH AGREEMENT
METABOLIC PROFILING AND DEVELOPMENT OF NOVEL NUTRACEUTICALS AND
PHARMACEUTICALS FROM HEMP SEED / GRAIN PRODUCTS AND THE HEMP PLANT
This Agreement is entered into as of April 1, 1999 by and between Consolidated
Growers and Processors Inc. (hereinafter "CGP" or "the Company"), a corporation
organized under the laws of the state of Delaware, having a business office in
Monterey, California, and Photosynthetic Harvest Inc., (hereinafter "PHI"), a
corporation organized under the laws of the state of Delaware and having a
business office in Willingboro, New Jersey.
Whereas, CGP desires TO IDENTIFY, CHARACTERIZE AND DOCUMENT-PATENT, ETC.-ALL OF
THE BENEFICIAL PROPERTIES OF HEMP SEED OR GRAIN PRODUCTS, i.e. OIL, NUT AND
CAKE/MEAL/POWDER-AND PUBLISH THIS INFORMATION, AT ITS DIRECTION, TO FACILITATE
ITS MARKETING STRATEGY FOR TRADEMARK AND/OR OTHER HEMP SEED OR GRAIN PRODUCTS;
and, Whereas, PHI has the scientific capability and other required resources to
perform these services for CGP;
NOW, THEREFORE, the aforementioned parties herein agree to the following:
1. Scope of Work and Future Collaboration.
PHI will utilize all of its proprietary technical and scientific expertise, as
well as other existing technology and processes to perform the following
general objectives:
(a) A comprehensive biochemical analysis of chemical components of oil from
various hemp varieties / cultivars provided by CGP, including the quantifying
of their content in order to provide a comprehensive biochemical
fingerprinting-metabolic profiling-of hemp oil; thereafter, the same for hemp
nut and cake / meal and /or powder;
(b) Activity profiling of various components of hemp oil;
(c) A metabolic profiling of the entire hemp plant, which includes activity
profiling of phytochemicals from vegetative and reproductive hemp tissues;
(d) To develop a new generation of scientifically designed and tested
nutraceutical products that would include and require the development of
proprietary technologies for the effective extraction and preservation of the
beneficial ingredients in their most pharmacologically active forms, and to
utilize proprietary technology to increase the content of valuable
nutraceuticals in the hemp plant before harvest. Hemp oil will be the first
priority of this activity;
(e) Utilize its proprietary elicitation technology to attempt to discover
novel
anti-microbial and anti-cancer compounds;
(f) PHI shall assist CGP with the "self-affirmation" process for the Federal
Food and Drug Administration approval process for Hemp Seed Grain Products as a
food or food additive;
(g) PHI and CGP will participate in all public relations activities and
requirements with regard to all findings and discoveries including, but not
limited to, those stipulated below.
2. Milestones.
Certain general health / nutritional benefits of Omega 3 and other unsaturated
oils to humans are scientifically known and documented. Based upon the above
scope and general objectives, PHI shall specifically perform and document the
following:
During months one through four from the effective date of this agreement, PHI
shall obtain and share with CGP documentation and literature for all identified
components of hemp oil, nut and cake / meal with health and nutritional
benefits for human and animal consumption. PHI will also perform the metabolic
and activity profiling of hemp oil using analytical and screening approaches it
had already established for other plant species.
During the subsequent eight months therefrom, PHI shall perform, in its best
efforts, metabolic and activity profiling of the entire hemp plant, with
particular emphasize on anti-bacterial, anti-fungal, anti-cancer and, then
possible, cardiovascular, analgesic, weight loss, skin-care and anti-aging
effects of natural products from hemp. The goal of this work will be to
identify commercially viable nutraceutical and pharmaceutical leads from hemp.
CGP shall utilize all of its available resources to develop commercial
markets - distribution and sales strategies and implementation - for all
potential nutraceutical and / or pharmaceutical product opportunities generated
through the research and development accomplishments of PHI.
3.Term.
Subject to early termination, as set forth in "13" below, research and all
other services under this Agreement shall be performed for the lesser of: 1.
five (5) years from the date of this Agreement; or 2. such date when the
probative information from hemp is deemed to be exhausted. The term may be
extended at anytime by mutual agreement of both parties.
4. Exclusive Agreement.
During the term of this agreement, PHI agrees that it shall perform all
research and development work on any and all parts of the hemp plant, including
but not limited to the general and specific stipulations above, solely for CGP
and / or its affiliates assignees and / or successors; and, CGP shall perform
all marketing, sales and distribution services solely for, or on behalf of, the
mutual benefit of both parties. Furthermore, notwithstanding the terms of this
Agreement, PHI and CGP shall be bound by the NON-DISCLOSURE / CONFIDENTIALITY
AGREEMENT ATTACHED. This attached agreement shall be in effect and binding for
a term of five years, and may be extended by mutual agreement of the parties.
5. Intellectual Property and All Information.
All rights in inventions, discoveries, biological material, software and any
and all information and relative intellectual property created from the
research and development during the term of and within the scope of this
Agreement (the "Hemp Research") shall be the property of CGP and /or/ its
assignees, affiliates or successors (collectively, "Affiliates"). All such
information is CONFIDENTIAL FOR AND BETWEEN THE PARTIES, except as otherwise
directed by CGP.
6. Compensation / Payments.
(a) CGP shall make the following payments, as the total sum required to perform
the entire scope of the services for the first twelve months:
$30,000 upon execution of this Agreement
$25,000 three months after date of execution
$20,000 six months after execution
$20,000 nine months after execution
(b) All cost and expenses for writing and filing of intellectual property
applications and maintenance documentation relative to Hemp Research shall be
borne by CGP.
(c) At the completion of the first year under this Agreement, or at the
earliest practical date, the parties shall jointly develop a budget to perform
any and all agreed upon future research and development work, including agree
on additional progress payments to PHI, and to achieve identified objectives.
(d) All gross revenues received by CGP or any of its Affiliates from the sale
or other commercialization of any and all products developed under and as the
result of the Hemp Research or this Agreement (the "Products"), including
royalties as a result of licensing the commercial rights to any such Products,
shall be shared by the parties as follows: CGP-95% and PHI-5%. CGP shall pay
PHI's share hereunder quarterly, within 30 days after the end of each calendar
quarter. Together with such payment, CGP shall provide PHI with a report,
signed by its chief financial officer or other executive officer, setting forth
in reasonable detail the calculation of the payments due to PHI hereunder. PHI,
solely through Price Waterhouse Coopers or another reputable CPA firm agreed to
by CGP, shall have the right to audit the revenue attributable to the sale or
other commercialization of the Products in order to verify the calculation of
the payment due PHI hereunder.
7. Written Modification.
Any change, amendment, modification, extension etc. to this Agreement must be
in writing and signed by both parties hereto.
8. Arbitration.
Unless otherwise agreed upon by partners, any dispute arising from the terms of
this agreement shall be adjudicated by a single arbitrator pursuant to the
rules of the American Arbitration Association. The arbitration shall take place
within the State of California if PHI is the plaintiff, or within the State of
New Jersey if CGP is the plaintiff.
9. Jurisdiction.
The terms of this agreement shall be governed by the laws of the state of
California or New Jersey without regard to conflicts of laws provisions, as
follows:
(a) if CGP is the plaintiff (in any legal action), New Jersey shall be the
state of jurisdiction
(b) if PHI is the plaintiff (in any legal action), California shall be the
state of jurisdiction
10. Assignment.
This Agreement is not assignable by either party without the prior written
consent of the other party. Any and all assignments not made in accordance
with this provision are null and void.
11.Survivorship.
Articles 4., 5. And 6.(d) herein survive any termination and expiration of this
Agreement.
12. Excusable Delays.
Any delays or suspension of performance by either party in the event of
government intervention, Acts of God, extreme natural events or any other event
beyond the control of the affected party(ies) shall require the parties to
communicate such and to negotiate in good faith a modification to be included
in writing herein.
13. Termination.
PHI may terminate this agreement if CGP defaults on its payment obligations and
payment is not received within thirty(30) days from the scheduled due date or
if the parties in good faith fail to agree on a budget for work to be performed
after first year of this Agreement as set forth in Article 6(c). CGP may
terminate this agreement if PHI fails to perform the research and development
services referred to in 1. and 2. above in a professional and timely manner.
14. Notice.
Any notice or report required in accordance with the articles herein shall be
deemed to have been legally provided for all purposes if sent by first class
certified, registered or courier overnight express delivery to the respective
addresses of the parties:
PHI, Xxx Xxxxxx Xxxxxxx, Xxxxxxxxxxx, XX 00000,
With a copy to: Xxxxx Xxxxxx, Esq. Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
Before July 1, 1999, Twelfth Floor Packard Building. 000 Xxxxx 00xx Xxxxxx,
Xxxxxxxxxxxx, XX 00000-0000
After July 1, 1999, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000-0000
CGP, XX Xxx 0000, Xxxxxxxx, XX. 00000
15. Entire Agreement.
The terms and conditions herein is the entire agreement between the parties and
any previous verbal representations, discussions or agreements made between any
officers, agents or employees of the parties prior to the date of this
Agreement shall be deemed contemporaneous with and included herein.
IN WITNESS WHEREOF, the parties have read understood and executed this
Agreement through duly authorized representatives.
Signed on behalf of Photosynthetic Harvest, Inc. by:
Signature: /s/ XXXX XXXXXX
Name: Xxxx Xxxxxx
Date: 4-7-1999
Signed on behalf of CGP, Inc.
Signature: /s/ XXXXX XXXXX
Name: Xxxxx Xxxxx
Date: 4-7-99
PHOTOSYNTHETIC HARVEST, INC.
MUTUAL NONDISCLOSURE AGREEMENT
Either or both of the undersigned parties (the "Receiving Party")
understands that the other party (the "Disclosing Party") has disclosed or may
disclose trade secrets or other confidential and proprietary information
relating to the Disclosing Party's business information, technical information
and/or ideas or inventions (whether or not patentable) which to the extent
previously, presently or subsequently disclosed to the Receiving Party is
hereinafter referred to as "Confidential and Proprietary Information" of the
Disclosing Party.
In consideration of the parties' discussions and any access of the
Receiving Party to Confidential and Proprietary Information of the Disclosing
Party, the Receiving Party hereby agrees as follows:
1. The Receiving Party agrees (i) to hold the Disclosing Party's
Confidential and Proprietary Information in strict confidence and to take
reasonable precautions to protect such Confidential and Proprietary Information
(including without limitation, all precautions the Receiving Party employs with
respect to its confidential materials), (ii) not to divulge any such
Confidential and Proprietary Information or any information derived therefrom
to any third person (except consultants, subject to the conditions stated
below), (iii) not to make any use whatsoever at any time of such Confidential
and Proprietary Information except to evaluate internally its relationship with
the Disclosing Party, (iv) not to remove or export from the United States or
reexport any such Confidential and Proprietary Information or any direct
product thereof except in compliance with and with all licenses and approvals
required under applicable export laws and regulations, including without
limitation, those of the U.S. Department of Commerce, and (v) not to copy or
reverse engineer any such Confidential and Proprietary Information. Any
employee or consultant given access to any such Confidential and Proprietary
Information must have a legitimate "need to know" and shall be similarly bound
in writing. Without granting any right or license, the Disclosing Party agrees
that the foregoing clauses 1 (i), (ii), (iii) and (v) shall not apply with
respect to any information that the Receiving Party can document (i) is or
becomes (through no improper action or inaction by the Receiving Party or any
affiliate, agent, consultant or employee) generally available to the public,
(ii) was in its possession or known by it prior to receipt from the Disclosing
Party, (iii) was disclosed to it by a third party without restriction or (iv)
is independently developed by the Receiving Party without use of the Disclosing
Party's Confidential and Proprietary Information. For purposes of the
immediately preceding sentence, "availability," "possession," "disclosure,"
"development" or "knowledge" of information combined, synthesized or used by
the Disclosing Party in a particular manner does not include availability,
possession, disclosure development or knowledge of various pieces of
information that are not so combined, synthesized or used. The Receiving Party
may make disclosures required by law or court order provided the Receiving
Party uses diligent, reasonable efforts to limit disclosure and to obtain
confidential treatment or a protective order and has allowed the Disclosing
Party to participate in the proceeding.
2. Immediately upon (i) the decision by either party not to enter into
the agreement contemplated by paragraph 1, or (ii) a request by the Disclosing
Party at any time (which request will be effective on the earlier of receipt or
three days after mailed first class postage prepaid to the Receiving Party's
address set forth below), the Receiving Party will turn over to the Disclosing
Party all Confidential and Proprietary Information of the Disclosing Party and
all documents or media containing any such Confidential and Proprietary
Information and any and all copies or extracts thereof. The Receiving Party
understands that nothing herein (i) requires the disclosure of any Confidential
and Proprietary Information of the Disclosing Party, which shall be disclosed
if at all solely at the option of the Disclosing Party (in particular, but
without limitation, any disclosure is subject to compliance with export control
laws and regulations), (iii) required the Disclosing Party to proceed with any
proposed transaction or relationship.
3. Except to the extent required by law, neither party shall disclose
the existence or subject matter of the negotiations or business relationship
contemplated by this Agreement.
4. The Receiving Party acknowledges and agrees that, due to the unique
nature of the Disclosing Party's Confidential and Proprietary Information,
there can be no adequate remedy at law for any breach of its obligations
hereunder, that any such breach may allow the Receiving Party or third parties
to unfairly compete with the Disclosing Party resulting in irreparable harm to
the Disclosing Party, and therefore, that upon any such breach or any threat
thereof, the Disclosing Party shall be entitled to appropriate equitable relief
in addition to whatever remedies it might have at law and to be indemnified by
the Receiving Party from any loss or harm, including without limitation,
attorney's fees, in connection with any breach or enforcement of the Receiving
Party's obligations hereunder or the unauthorized use or release of any such
Confidential and Proprietary Information. The Receiving Party will notify the
Disclosing Party in writing immediately upon the occurrence of any such
unauthorized release or other breach of which it is aware. In the event that
any of the provisions of this Agreement shall be held by a court or other
tribunal of competent jurisdiction to be illegal, invalid or unenforceable,
such provisions shall be limited or eliminated to the minimum extent necessary
so that this Agreement shall otherwise remain in full force and effect. This
Agreement shall be governed by the law of the State of New Jersey without
regard to the conflicts of law provision thereof. This Agreement supercedes
all prior discussions and writings and constitutes the entire agreement between
the parties with respect to the subject matter hereof. The prevailing party in
any action to enforce this Agreement shall be entitled to costs and attorney's
fees. No waiver or modification of this Agreement will be binding upon
either party unless made in writing and signed by a duly authorized
representative of such party, and no failure or delay in enforcing any right
will be deemed a waiver. This Agreement may be signed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have read, understood, and executed this Mutual
Nondisclosure Agreement through duly authorized representatives as of the day
and year set forth below.
Photosynthetic Harvest Inc. Consolidated Growers and Processors, Inc.
By: Xxxx Xxxxxx, Chairman By: Xxxxx Xxxxx
Signature: /s/ XXXX XXXXXX Signature: /s/ XXXXX XXXXX
Date: 4-8-99 Date: 4-11-99
