DATED THIS 23 rd DAY OF FEBRUARY 2000
BETWEEN
EVERBLOOM INTERNATIONAL TECHNOLOGY PTE LTD
AND
GULF MUSHROOM PRODUCTS CO (S.A.O.G.)
LICENCE AGREEMENT
THIS AGREEMENT is made on the 23rd day of February 2000 ( ) BETWEEN
EVERBLOOM INTERNATIONAL TECHNOLOGY PTE LTD, a company incorporated in the
Republic of Singapore and having its registered office at 00 Xxxxxxx Xxxx Xxxxx,
#00-00 Xxx Xxxxxx, Xxxxxxxxx Science Park 1, Xxxxxxxxx 000000 (hereinafter
referred to as "Everbloom") of the one part AND GULF MUSHROOM PRODUCTS CO
(S.A.O.G.) of Oman whose office is at X.X Xxx 000, X.X. 000, Xxxxx, Xxxxxxxxx of
Oman (hereinafter referred to as the "Licensee") of the other part;
WHEREAS
(A) Everbloom has the Know-how/Technology to cultivate Shiitake Mushroom and
other exotic mushrooms using the Process as set out in USA Patent Nos.
4987698, 4542608 and 4833821 and European Patents Nos. 0107911and 0248636
and British Patents Nos. 0107911,2191074 and 2223922.
(B) The Licensee is desirous of cultivating Shiitake Mushroom and other exotic
mushrooms.
(c) Everbloom hereby agrees to grant to the Licensee the right to cultivate
Shiitake Mushroom and other exotic mushrooms in Oman and to supply the
technical know-how and data and to provide the necessary assistance upon
the terms and conditions hereinafter appearing.
IT IS HEREBY AGREED as follows:
1. 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 and other
exotic mushrooms by the Licensee.
"Chemical Mix" shall mean the nutrients developed by Everbloom for the
cultivation of Shiitake Mushroom and other exotic
mushrooms and production of Logs and Spawn.
"Documentation" shall mean the written Technical Information and
Improvements pertaining to Product and the plant,
machinery and raw materials required for production
thereof and shall include designs, drawings, manuals,
brochures, pamphlets, slides, photc)gra'phs, audio and
video tapes, advertisement materials and promotional aids.
"Effective Date" shall mean the date on which this Agreement comes into
operation.
"Everbloom's
Consultant" shall mean a suitably qualified consultant to be made
available by Everbloom for the purpose of providing the
services referred in Clause 4 hereof.
"Improvements" shall mean future improvements relating to Technical
Information and Documentation.
"Know-how/
Technology" shall mean all information and data including formulae
designs specifications techniques procedures plans
discoveries and inventions (whether patented or not)
used at any time by Everbloom in growing, marketing and
selling Shiitake Mushroom and other exotic 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 Mushroom and other exotic
mushrooms by means of the Process, together with any
further information or data pertaining thereto as may be
vailable with Everbloom.
"Logs" shall mean raw materials comprising preformulated
materials such as chopped wood and/or sawdust and Chemical
Mix mixed with water produced according to Everbloom's
Know-how/Technology.
"Materials" shall mean Logs, Spawn and Chemical Mix.
"Parties" shall mean Everbloom and the Licensee.
"Process" shall mean the process to produce Shiitake Mushroom and
other exotic mushrooms by the means described in the
patents mentioned in Clause (A), copies of which are
available.
"Product" shall mean Logs, Spawns and Shiitake Mushroom and other
exotic mushrooms.
"Plant" shall mean a facility in Oman designed and approved by
Everbloom and to produce Shiitake Mushroom and other
exotic mushrooms using the Technical Information,
Documentation and Improvements provided by Everbloom
hereunder. The land and investment for the Plant will be
committed by the Licensee.
"Shiitake Mushroom" shall mean the fungi of the species Lentinus edodes
cultivated according to the Process or any part thereof.
"Spawn" shall mean the spawn of the species Lentinus edodes
produced according to Everbloom'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 Everbloom 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)
(a) design, engineering, fabrication, erection and
installation of plant, machinery and equipment
required for the production of Product and sources of
supply thereof;
(b) production processes and methods, operating conditions,
pollution and quality control and testing and product
development in respect of Product; and
(c) chemical 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.
1.2 In this Agreement, unless the context of subject matter otherwise
requires:-
(a) The singular includes the plural and vice versa. Words importing any gender
include the other gender. Words importing persons include corporations and
incorporated bodies of persons and vice versa;
(b) References to clauses and schedules are references to Clauses and Schedules
to this Agreement;
(c) References to agreements and deeds include all renewals, extensions and
amendments thereof; and
(d) The headings to the clauses herein are for convenience of reference only
and do not form part of this Agreement or affect the interpretation hereof.
2. SCOPE OF LICENCE
2.1 In consideration of the Licensee's agreement to pay the amounts specified
herein, Everbloom hereby grants to the Licensee the right to use the
Know-how/ Technology in the cultivation of Shiitake Mushroom and other
exotic mushrooms in Oman.
3. FINANCE & ACCOUNTING
3.1 It is the responsibility of the Licensee to operate and maintain proper
accounting procedures in accordance with generally accepted accounting
principles.
3.2 The Licensee shall 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 Everbloom such
information and reports concerning the Business in such form as may be
specified by Everbloom.
3.3 The Licensee shall submit quarterly statements of sales to Everbloom and
Royalties payable within 15 days after the end of each quarter.
3.4 The Licensee shall submit financial reports relating to the Business on a
half-yearly basis.
3.5 The Licensee shall submit annual audited accounts of the Business within 90
days after the year end.
3.6 The Licensee shall preserve and keep all Business Records for a period as
required by local tax laws.
3.7 Everbloom reserves the right to appoint a firm of independent accountants
to review the records of the Business pertaining to the calculation of
Royalties payable.
4. TECHNICAL INFORMATION ETCl TO BE PROVIDED BY EVERBLOOM
4.1 Everbloom shall furnish to the Licensee all Technical Information,
Documentation and Improvements and render all assistance necessary to
enable the Licensee to successfully establish the Plant and to produce and
cultivate the Product.
4.2 Without prejudice to the generality of the foregoing, Everbloom shall, from
time to time, provide to the Licensee, complete and up-to-date Technical
Information, Documentation and Improvements:-
(a) to enable the Licensee to design, engineer, erect, install and commission
the Plant and all machinery and equipment therein and to successfully
produce, develop and sell the Product;
(b) to enable the Licensee to procure suitable machinery, equipment and spares
at reasonable prices and to fabrica'te and manufacture the same
indigenously in Oman;
(c) with regard to import substitution in respect of Plant, machinery,
equipment and ingredients for the Product;
(d) with regard to operational safety and maintenance procedures of the Plant
and quality control, testing and product development in respect of Product
and ingredients, packaging etc as required by the markets from time to
time;
(e) to enable the Licensee to procure in the international markets, alternative
raw materials, consumables and other inputs necessary for production of
Product at reasonable prices;
(f) with regard to measures to ensure that the project will not cause any
pollution problems or environmental hazards and that the effluents will
meet statutory requirements, and
(g) with regard to the conversion into useful byproducts, of spent materials
including logs after harvesting of mushrooms.
4.3 All Documentation to be furnished by Everbloom hereunder shall be in
English and in the metric system.
4.4 Everbloom shall furnish the Technical Information aforesaid within thirty
(30) days of the Effective Date.
5. TRAINING OF LICENSEE'S PERSONNEL
5.1 During the tenure of this Agreement, Everbloom 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 the purpose, Everbloom shall deploy, as and when necessary,
sufficiently knowledgeable and experienced consultants.
5.2 Any such consultants deployed by Everbloom shall during their stay in Oman,
observe all rules and regulations that apply to the Licensee's employees.
Likewise, any Licensee's personnel being trained outside Oman by Everbloom
shall observe all rules and regulations that apply to Everbloom's employees
in those countries respectively.
5.3 The Licensee's personnel to be trained, the Everbloom consultants to be
deployed and the periods of such training and deputation etc, shall be as
agreed by the parties from time to time.
5.4 The Licensee will meet the actual expenses of the Everbloom consultants
deployed in Oman, in respect of their travel, board and lodging; but no
daily or other fees or remuneration will be paid to them.
6. MANAGEMENT OF PLANT
6.1 During the tenure of this Agreement, Everbloom shall deploy its personnel
in such numbers as are necessary to supervise, oversee and manage the
operation of the Plant.
6.2 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 is not
limited to, remuneration, salary, board, lodging, travel, transportation
and other reasonable amenities.
7. PAYMENTS
7.1 In consideration of the rights and licence granted, and duties and
obligations undertaken by Everbloom herein, the Licensee shall pay
Everbloom a technology fee of US$500,000.00 net of all taxes (including but
not limited to withholding taxes), dues, charges and expenses, which shall
be for the Licensee's sole account plus the purchase of 250,000 mushroom
logs as per Schedule A.
7.2 As consideration for the continual transfer of the Know-how/Technology, the
Licensee shall pay Everbloom a 5% royalty on net sales.
7.3 Such royalties due under Clause 7.2 above shall be due immediately after
the end of the quarter and payable within 30 days from that date without
the need for a demand from Everbloom. Any late payment shall attract
interest calculated at the rate of 1.5% per month from the due date.
7.4 Time will run from the date on which the production of sawdust and logs
commences.
7.5 Any improvements to the Know-how/Technology shall be passed on to the
Licensee without any further requirement of payments of fees or royalties.
8. MARKETING OF PRODUCTS
8.1 Everbloom agrees to use their best endeavours to assist the Licensee to
market the Products for sale internationally. Such sales shall be under the
brand "Everbloom".
9. WARRANTY
9.1 Everbloom warrants that the Technical Information, Documentation and
Improvements furnished by it hereunder shall be of the latest and best type
and quality and which in the experience, studies and tests of Everbloom
have proved to be sufficient and technically and economically efficient and
practical for the production of the Product and for establishment of a
Plant of the specified capacity. Based on current specifications,
production should be not less than 150 grams of fresh mushrooms from 1
kilogram of sawdust log.
9.2 Everbloom further warrants that all rights in the Technical Information,
Documentation and Improvements furnished hereunder are proprietory
andbelong to Everbloom and that the use and exploitation thereof by the
Licensee and/or its sub licensees pursuant hereto will not infringe or
violate any rights of any third parties.
9.3 Everbloom hereby indemnifies and shall keep indemnified the Licensee and
its sub licensees from and against all liabilities, expenses, losses, costs
and damages that may be incurred by them on account of the infringement of
the rights of any third party rights arising from the use and exploitation
of the Technical Information, Documentation and Improvements and the
production and cultivation of the Product.
10. 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, Everbloom shall supply the same for such prices and on such other
terms as may mutually be agreed upon.
10.2 Everbloom 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 Chemical Mix, which shall be supplied
by Everbloom at the price of S$4.00 per kilogram FOB Singapore.
11. CONFIDENTIALITY
11.1 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 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.
12. ASSIGNMENT
12.1 This Agreement shall enure to the benefit of the successors and assigns of
Everbloom.
12.2 The Licensee shall not be entitled at any time to assign, transfer or
encumber this Agreement or any part thereof or the benefit thereof or
control thereof or any benefit hereunder except with the previous written
consent of Everbloom such consent not to be unreasonably withheld.
13. DEFAULT AND TERMINATION
13.1 In the event that the Licensee shall become insolvent or make an assignment
for the benefit of creditors or be placed under judicial management or if
other proceedings for the appointment of a receiver of the Licensee or
other custodian for the Licensee's business or assets if filed and is
consented to by the Licensee and is not dismissed within thirty (30) days
or a receiver or other custodian appointed or if proceedings for
composition with creditors under any state or federal law shall be
instituted by or against the Licensee or if the real or personal property
of the Licensee shall be sold after levy thereupon by any sheriff,
receiver, then upon the occurance of any said events, the Licensee shall be
deemed to be in default under this Agreement and all rights granted to the
Licensee hereunder shall thereupon terminate without any need for notice to
the Licensee and this Agreement shall thereupon be terminated.
13.2 Without prejudice to the generality of the foregoing the Licensee shall be
in default under this Agreement:-
(a) if the Licensee fails to submit when due financial reports which
EVerbloom is entitled to under this Agreement.
(b) if the Licensee fails to comply substantially with any of the
requirements imposed upon it by the Agreement.
13.3 The Licensee shall have the right to terminate this Agreement if Everbloom
shall be in default of any of the following conditions:-
(a) in the event that Everbloom is liquidated, dissolved or becomes
insolvent or bankrupt or is placed under judicial-management or the
control to receivers or trustees.
(b) if Everbloom is unable to conduct the business contemplated by this
Agreement.
14. RIGHTS AND OBLIGATIONS OF PARTIES ON TERMINATION OR EXPIRATION
14.1 Upon the termination or expiration of this Agreement all rights granted
herein by Everbloom to the Licensee shall revert to Everbloom.
15. RELATIONSHIP OF PARTIES AND INDEMNIFICATION
15.1 It is hereby declared that the Licensee is an independent contractor and
not an agent, legal representative, joint venturer, partner, employee or
servant of Everbloom and is not empowered to act on Everbloom's behalf in
any manner. The Licensee agrees that Everbloom is not in any way a
fiduciary of the Licensee.
15.2 The Licensee shall indemnify Everbloom, its officers, directors, employees,
agents affiliates, successors and assigns, against:
(a) any and all claims, damages or liabilities based upon, arising out of,
or in any way related to any negligence or act or omission by the
Licensee or any its agents, contractors, servants, employees or
licensees, and any obligation of the Licensee incurred pursuant to any
provision of this Agreement.
(b) any or all fees (including attorney's fees), costs and other expenses
incurred by or on behalf of Everbloom in the investigation, defence or
prosecution of any and all claims.
16. NOTICES
16.1 All notices or other communication to Everbloom contemplated by the terms
of this Agreement shall be in writing and sent by registered mail, return
receipt requested, addressed to Everbloom at 12 Science Park Drive, $04-01
The Mendel, Xxxxxxxxx Xxxxxxx Xxxx 0, Xxxxxxxxx 000000 (or such other
address as Everbloom shall designate in writing) or by fax or to such
address confirmed by registered mail.
16.2 All notices to the Licensee required by the terms of this Agreement shall
be in writing and sent by registered mail, addressed to the Licensee at
Oman or such other address as the Licensee shall designate in writing, or
by fax or to such address confirmed by registered mail.
16.3 If by registered mail, any notice shall be deemed to have been given when
received, or if by fax, when the appropriate "answerback" is received.
17. TERMS
17.1 This Agreement embodies all the terms and conditions agreed upon between
the Parties hereto and supercedes and cancels in all respects all previous
agreements and undertakings between the Parties hereto with respect to the
subject matter hereunder whether such be written or ,oral.
17.2 Nothing in this Agreement shall constitute a partnership between the
Parties nor constitute one Party the agent of the other Party and vice
versa.
18. NO WAIVER
18.1 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.
19. SEVERANCE
19.1 In the event that any provision of this Agreement shall be void or
unenforceable by reason of any provision of applicable law it shal/be
deleted and the remaining provisions hereof shall continue as amended so as
to give effect to the spirit of this Agreement so far as possible.
20. COSTS AND EXPENSES
20.1 Unless otherwise expressly stated herein all costs and expenses incurred by
either Party in the performance of this Agreement shall be borne by the
Party incurring the same.
21. AMENDMENTS
21.1 The conditions contained in this Agreement may be varied, altered, amended
or deleted and fresh conditions embodied from time to time by mutual
consent in writing and duly signed and executed by the Parties hereto and
such writing would then be deemed for all purposes to be part and parcel of
this Agreement and to be read and interpreted so and neither Party would
contest the validity thereof.
22. GOVERNMENTAL APPROVALS
22.1 The Parties hereto undertake to obtain from the respective Governments all
approvals and authorisations necessary or required for the implementation
of the provisions of this Agreement.
22.1 Should approval and or authorisation from the respective Governments be
subsequently withdrawn for any reason whatsoever, this agreement shall
automatically be terminated unless otherwise agreed between the Parties.
23. APPLICABLE LAW/JURISDICTION
23.1 This Agreement shall in all respects be governed by and construed in
accordance with the laws of the Republic of Singapore and the Parties agree
to submit to the non-exclusive jurisdiction of the courts of the Republic
of Singapore.
IN WITNESS WHEREOF the parties have duly executed this Agreement as of the
date and year written above.
SIGNED by Xx Xxx Xxx Xxxxx )
for and on behalf of EVERBLOOM )
INTERNATIONAL TECHNOLOGY )
PTE LTD in the presence of )
SIGNED BY:
SCHEDULE A
STAGE OF PAYMENT
Pre-Joint venture
1. Initial Stage (6 - 12 months) Purchase of an initial order of 250,000
mushroom logs at the price of US $ 0.60 per log C&F Muscat which will
become US $ 0.66 per log C&F Muscat once the average output of 160 gms. per
log is achieved and US $ 0.72 per log C&F Muscat once the average output of
180 gms. per log is achieved. Payment by L/C.
Post Joint Venture
2. Full Shiitake Mushroom Growing US $120,000 for the growing of Shiitake
Mushroom.
3. Full Exotic Mushroom Growing US $180,000 for the growing of all types of
exotic mushrooms.
4. Exclusive Rights US $ 200,000 for the exclusive rights in Oman and in all
countries of the Middle East, namely Saudi Arabia, UAE, Kuwait, Yemen,
Syria, Lebanon, Iraq, Iran and Egypt.
