Product License and Distribution Agreement
This PRODUCT LICENSE AND DISTRIBUTION AGREEMENT (the "Agreement") is made
as of September 25, 1998 (the "Effective Date") by and between Medical Foods,
Inc., a Delaware corporation, having principal place of business at Xxxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("Licensor"), and Biomune Systems, Inc., a
Nevada corporation, having principal place of business at 0000 Xxxxx Xxxxxxxx
Xxxxx, Xxxx Xxxx Xxxx, Xxxx 84109("Licensee"). Licensor and Licensee are
sometimes referred to heroin as a "Party" or the "Parties."
WHEREAS, Licensor has developed a medical food product, known as NiteBite
(the Product, as further defined in Article I below) and is the owner of certain
Technology (as further defined in Article I below); relating to and contained in
the Product; and
WHEREAS, Licensor wishes to have the Product marketed, sold and distributed
in the Territory (as defined in Article I below); and
WHEREAS, Licensor wishes to designate Licensee, and Licensee wishes to be
designated, as Licensor's exclusive distributor of the Product in the Territory,
on the terms and conditions set forth for this Agreement; and
WHEREAS, Licensor wishes to grant, and Licensee wishes to acquire, licenses
of the Technology for the purpose of manufacturing, marketing, distributing and
selling the Product;
NOW THEREFORE, in consideration of the foregoing premises and the covenants
set forth below, the Parties agree as follows:
1. DEFINITIONS
1.1 "Affiliate" shall mean any corporation or other business entity
directly or indirectly controlled by, controlling, or tinder common control with
Licensee during the term of this Agreement. For this purpose, "control" means
direct or indirect beneficial ownership:
(a) of at least fifty percent (50%) of the voting stock; or
(b) of at least fifty percent (50%) interest in the income of such
corporation or other business.
1.2 "Commercial Sales" shall mean sales of Product by Licensee or its agent
to the public or to a third party that makes the Product available for purchase
by members of the public in amounts within the relevant country which exceed the
Minimum Commercial Sales by Country set forth in Exhibit C.
1.3 "Confidential Information" shall mean any information or materials
received by one Party from the other Party. In particular, Confidential
Information may include, but is not necessarily limited to, trade secret
components of the Technology, research projects, work in process, future
developments, scientific, engineering, manufacturing, marketing, business plan,
financial or personnel matter relating to either Party, its present or future
products, sales, supplies, customers, employees, investors or business, whether
in oral, written, graphic or electronic form, to the extent provided by one
Party to the other. Notwithstanding the foregoing, Confidential Information
shall not include any information which:
(a) is now, or hereafter becomes, through no act or failure to act on the
part of the receiving Party, generally known or available;
(b) is known by the receiving Party at the time of receiving such
information as evidenced by its written records;
(c) is hereafter furnished to the receiving Party by a third party, as a
matter of right without restriction on disclosure; or
(d) is the subject of a written permission to disclose provided by the
disclosing Party.
1.4 "Exclusive," with reference to the licenses granted to Licensee, means
Licensor will not make, use, distribute, sell or otherwise dispose of the
Product and has not granted and shall not grant further licenses with respect to
the Product or the Technology as applied to the Product in the Territory, so
long as this Agreement is in effect.
1.5 "Licensed Trademarks" shall mean those trademarks listed on Exhibit A.
1.6 "Licensee" is understood to include Biomune Systems, Inc. and any
and all of its Affiliates.
1.7 "Combination Product" is defined as a unit of sale containing Product
along with an item or items other than the Product.
1.8 "Net Sales" shall mean the gross revenues actually received by Licensee
the sale of Products to independent third parties who are not Affiliates of
Licensee, less the following deductions.
(1) Prompt payment or quantity discounts actually allowed and taken in
such amounts as are customary in the trade;
(2) Taxes, tariffs and duties levied on shipments or sales of
the Product or exportation of monies (other than taxes on the net income of
Licensee) actually paid or withheld;
(3) Credit for returns.
(4) In the event that the Product is sold in the form of a Combination
Product, then Net Sales for such Combination Products will be calculated by
multiplying the actual Net Sales of such Combination Products by the fraction
A/(A+B) where A is the invoice price of the Product if sold separately, and B is
the invoice price of the other product or products in the Combination Product if
sold separately.
1.9 "Patent Rights" refers to Licensor's rights arising from Provisional
U.S. Patent Application 08/815,595 including any foreign patent applications
corresponding thereto, any United States divisions, continuations, reissues, or
reexaminations thereof (the "Patent Applications"), and any United States or
foreign patent(s) issued or granted therefrom in and any United States or
foreign patents or patent applications claiming any elements of the Technology.
1.10 "Product" shall mean the NiteBite Timed-release Glucose Bar (TM), any
enhanced or modified versions thereof that Licensor develops during the Term of
this Agreement, and all oral delivery formats (e.g., nutrition bars, beverages,
etc.) which provide the benefits of the timed-release glucose formulation in
NiteBite for the management of blood glucose in people with diabetes that are
developed, manufactured, used or sold by Licensee during the Term of this
Agreement.
1.11 Technology means all Patent Rights, know-how, technology, trade
secrets, processes, data, material, methods or other information, whether
patentable or unpatentable, which Licensor owns, controls or has a license to
(with a right to sublicense) and which is useful in the manufacture, marketing,
sale, distribution or use of the Product in the Territory.
1.12 "Term" shall have the meaning set forth in Section 11 of this
Agreement.
1.13 "Transition Period" shall mean the thirty (30) day period commencing
on the Effective Date.
1.14 "Territory" shall mean North America and those countries listed in
Exhibit B, "Tier One Countries" shall mean those countries designated as such on
Exhibit B, and "Tier Two Countries" shall mean those countries designated as
such on Exhibit B.
2. LICENSE GRANT
2.1 Product and Technology Licenses. Licensor hereby grants and Licensee
hereby accepts an Exclusive right and license to make, have made, use,
distribute, license, sell, have sold or otherwise dispose of the Product, and to
use the Technology to undertake such activities with respect to the Product in
the Territory during the Term of the Agreement.
2.2 Trademark Licenses
(a) Licensor hereby grants to Licensee an Exclusive license to use the
Licensed Trademarks in Part I of Exhibit A, in connection with the manufacture,
offer, sale and distribution of the Product in the Territory for the Term of
this Agreement.
(b) Licensor hereby grants to Licensee a non-exclusive license to use
the Licensed Trademarks in Part II of Exhibit A, in connection with the
manufacture, offer, sale and distribution of the Product in the Territory for
the Term of this Agreement.
(c) In order to assure the quality of goods marketed under the
Licensed Trademarks, Licensor shall have the right to inspect samples of the
Products and, upon reasonable notice from Licensor, Licensee shall supply
Licensor with quantities of Product sufficient for such inspection. Licensee
shall conduct its business in a manner which will enhance the reputation and
goodwill attached to the Licensed Trademarks, and goodwill shall inure to the
benefit of Licensor as owner of the marks.
(d) Licensee agrees to use the Licensed Trademarks only to offer, sell
and distribute the Product in the Territory for the Term of this Agreement and
not for any other purpose.
2.3 Marketing Information Licenses. Licensor agrees to permit Licensee to
have non-Exclusive access and use of the database of information developed by
Licensor with respect to historical communications with health care
professionals, pharmacists, consumers, and others. Licensee shall be responsible
for paying any license fees to third parties is are necessary to allow Licensee
to use such database.
2.4 Domain Name. Licensor hereby grants Licensee an Exclusive license to
use the domain name xxx.xxxxxxx.xxx in connection with the manufacture, offer,
sale and distribution of the Product in the Territory for the Term of this
Agreement, and to maintain and modify the world wide web site designated by such
domain name.
2.5 Toll Free Telephone Number. Subject to the consent of the provider of
the telephone service to) such transfer and to the release by such provider of
all responsibilities of Licensor, Licensor will transfer to Licensee Exclusive
rights to the use of the toll free telephone number 000-000-0000.
2.6 Sublicenses. Licensee shall not have the right to sublicense any of its
rights under this Section 2 without Licensor's prior written consent, Such
consent shall be subject to the negotiation of economic, terms satisfactory to
Licensor and to such other conditions as n-lay be reasonably imposed by
Licensor. Nothing in this Agreement shall prohibit Licensee from contracting for
the services of third parties in the performance of Licensee's duties hereunder.
3. LICENSE FEE AND ROYALTIES
3.1 License Fee. Licensee shall pay to Licensor a license fee of $25,000
upon execution of this Agreement. This license fee shall be non-refundable and
shall not be creditable against any future payments due to Licensor.
3.2 Royalties.
(a) Royalty payment. In consideration of the license granted to
Licensee herein, Licensee shall pay to Licensor a royalty equal to 12% of Net
Sales of Product during the Term, following the expiration of the Transition
Period.
(b) Minimum Royalty Payment. For each calendar year during which the
licenses are in effect, beginning in 1999, Licensee shall pay to Licensor a
minimum royalty payment in the amount set forth in Exhibit D with respect to Net
Sales of Products in North America. The minimum royalty payment for each
calendar year shall be due and payable on or before thirty (30) days following
the end of the calendar year for which payment is due. Royalties paid to
Licensor under Section 3.2 for Net Sales made during a calendar year shall be
credited toward the minimum royalty payments due for that calendar year.
3.3 Currency. The royalty on sales in currencies other than U.S. Dollars
shall be calculated using the appropriate foreign exchange rate into U.S.
Dollars for such currency as quoted by the Wall Street Journal, New York, U.S.A.
on the close of business on the last banking day of each month. Royalty payments
to Licensor shall be in U.S. Dollars.
4. REPORTS AND PAYMENTS; ACCOUNTING; TAXES
4.1 Monthly Royalty Payment and Report. Licensee shall make written reports
and royalty payments to Licensor within thirty (30) days after the end of each
calendar month following the expiration of the Transition Period and during the
term of this Agreement. This report shall state the number, description, and
aggregate Net Sales of Products during such completed calendar month, and
resulting calculation of earned royalty payment due Licensor for such completed
month. Concurrent with the making of each such report, Licensee shall include
payment due Licensor of royalties for the calendar month covered by such report.
4.2 Accounting. Licensee agrees to keep records during the Term of the
Agreement, and for a period of two (2) years thereafter, showing the
manufacturing, sales, use, and other disposition of Products sold or otherwise
disposed of under the licenses herein granted in sufficient detail to enable the
royalties payable hereunder by Licensee to be determined, and further agrees to
permit its books and records to be examined from time to time by a certified
public accountant of a nationally recognized accounting firm, who is selected
and paid for by Licensor.
4.3 Withholding Taxes. In the event Licensee is required to withhold taxes
imposed upon Licensor for any payment by Licensee to Licensor under this
Agreement, by virtue of the statutes, laws, codes or governmental regulations of
a country in which Products are sold, then such payments will be made by
Licensee on behalf of Licensor by deducting them from the payment then due
Licensor and remitting such taxes to the proper authorities on a timely basis,
and such tax payments shall count toward the royalty payments due under Section
3 above. Licensee shall obtain a receipt as promptly as possible from the
relevant taxing authorities for all withholding taxes paid and promptly forward
such receipts to Licensor to enable Licensor to claim any and all tax credits
and refunds for which it may be eligible.
5. TRANSITION PERIOD
5.1 Operations. During the Transition Period:
(a) Licensee shall commence marketing and prepare for sales and
distribution of the Product in North America.
(b) Licensor shall continue to sell the Product and payment for all such sale of
the Product shall be made directly to Licensor.
(c) Licensor shall use commercially reasonable efforts to continue to
do business in the ordinary course.
5.2 Sales and Marketing Support. During the Transition Period,
Licensor or shall provide, at its own expense, transitional sales and marketing
support services.
5.3 Returns. With respect to any Product sold prior to the end of the
Transition Period that is returned to Licensee by the purchaser of such Product
within the three (3) months following the expiration of the Transition Period,
Licensor shall reimburse Licensee for any amounts refunded to such purchaser.
6. CERTAIN OBLIGATIONS OF LICENSOR
6.1 Transfer of Technology and Documentation. Licensor agrees to convey to
Licensee the following items:
(a) Technology Documentation. On the Effective Date, Licensor shall
transfer to Licensee the documentation that describes or embodies the
Technology.
(b) Product Documentation. On the Effective Date, Licensor shall
transfer to Licensee copies of all regulatory filings, governmental licenses,
approvals and communications, test results, clinical trial documentation and all
Other written materials reasonably requested pertaining to the manufacture,
research and development of the Product prior to the Effective Date.
(c) Sales and Marketing Information. On the Effective Date, Licensor
shall provide Licensee with all information reasonably requested relating to the
marketing, sale and distribution of the Product, including, but not limited to,
marketing materials and customer lists.
6.2 Inventory. On or prior to the Effective Date, the Parties shall
mutually agree on certain quality and dating standards to be used to determine
whether existing inventory of the Product is marketable or suitable for use as
samples. On the expiration date of the Transition Period, Licensor shall deliver
to Licensee at its warehouse all existing Product inventory which meets such
agreed-upon standards (the "Inventory"). Licensee may request delivery of
certain portions of the Inventory at particular times during the Transition
Period, and Licensor shall, it such times, deliver such portions of the
Inventory as Licensee may reasonably have requested so long as such amounts are
not necessary for Licensor's sales during the Transition Period. As
consideration for the Inventory determined marketable under mutually agreed
quality and dating standards, Licensee shall pay, within fifteen (15) days
following the delivery of inventory a price for the Inventory equal to the cost
paid by Licensor to the manufacturer of the Inventory and to transport the
Inventory from the manufacturer to Boston plus the cost of delivery to
Licensee's warehouse. As consideration for the Inventory not marketable but
determined suitable for samples under mutually agreed quality and dating
standards, Licensee shall pay within fifteen (15) days following the delivery of
inventory a price for the Inventory equal to fifty percent (50%) of the cost
paid by Licensor to the manufacturer of the Inventory and to transport the
Inventory from the manufacturer to Boston plus one hundred percent (100%) of the
cost of delivery to Licensee's warehouse.
6.3 Support. During the Term of this Agreement, Licensor shall provide such
scientific support to Licensee with respect to the Product as Licensee may
reasonably request. Such scientific support shall include, but not be limited
to: providing interpretation and results of clinical trials that Licensor has
completed as of the Effective Date, has in process as of the Effective Date, or
may choose, at its discretion, to conduct in the future, and responding to
reasonable requests for information which may pertain to the classification of
the Product as a "medical food" as defined by 21 U.S.C. 360ee(b)(3); and shall
otherwise assist Licensee in providing information to the U.S. Food and Drug
Administration or any other governmental agency, provided, however, that all
such assistance shall not exceed 8 hours per month and 250 hours in the
aggregate.
6.4 Assignment of Supply Agreement. Licensor hereby assigns to Licensee the
Supply Agreement between Nellson Nutraceutical and Medical Foods, Inc. dated May
28, 1997 (a copy of which is attached hereto as Exhibit E) (the "Supply
Agreement") and all rights, and obligations thereunder, pursuant To which
Nellson Nutraceutical has manufactured the Product for the Licensor and Licensee
hereby assumes all of such obligations with respect to activities during the
Term of this Agreement.
7. CERTAIN OBLIGATIONS OF LICENSEE
7.1 Minimum Royalties, Commercial Sales.
(a) If Licensee fails to pay the minimum royalty payment due pursuant
to Section 3.2(b) for any calendar year, such failure shall be a material breach
of this Agreement.
(b) Following December 31, 2000, those Tier One Countries in which
Licensee has not achieved Commercial Sales shall thereafter be excluded from the
Territory.
(c) Following December 31, 2001, those Tier Two Countries in which
Licensee has not achieved Commercial Sales shall thereafter be excluded from the
Territory.
7.2 Covenant not to Sell Competitive Product. Licensee hereby
covenants not to manufacture, market, sell or distribute directly or indirectly
through one or more third parties, any timed release glucose products, other
than the Product, in the Territory during the Term of this Agreement.
7.3 Acknowledgment of Licensor. Licensee agrees to acknowledge Licensor as
developer of the Product and owner of the Trademarks on its packaging and
promotional materials in accordance with the specifications in Exhibit F.
8. REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties of Licensor. Licensor hereby represents
and warrants as follows:
(a) Corporate Power. Licensor is duly organized and validly existing
under the laws of Delaware and has full corporate power and authority to enter
into this Agreement and to carry Out the provisions hereof.
(b) Due Authorization. Licensor is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.
(c) Binding Agreement. This Agreement is a legal and valid obligation
binding upon Licensor and is enforceable in accordance with its terms. Licensor
has the right to grant Licensee the licenses granted herein. The execution,
delivery and performance of this Agreement by Licensor and the granting of the
licenses granted herein do not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any law or regulation of any court, governmental body or
administrative or other agency having authority over it, Licensor has not
granted any rights in the Technology, the Patent Rights and the Licensed
Trademarks, or any other right in the Product to any third party.
(d) Licensed Trademarks. Licensor is the owner of the Licensed
Trademarks. Licensee is and shall be free to use the Licensed Trademarks
pursuant to this Agreement in all commercially reasonable ways in connection
with the Product without restriction. To Licensor's knowledge, there is no
unauthorized use, infringement, or misappropriation of the Licensed Trademarks
by any third party, including any employee or former employee of Licensor.
Licensor has no knowledge or belief that Licensee's use of the Licensed
Trademarks pursuant to this Agreement will infringe the rights of others. No
person or entity has asserted or threatened to assert any material claim with
respect to the Licensed Trademarks.
(e) Patent Rights. Licensor has no knowledge that has caused it
to believe that the practice of the Patent rights will be blocked by or infringe
the patent rights of others. Licensor has no knowledge of any information which
it believes is likely to have a material effect on the validity or
enforceability of any Patent Right or claim thereof which was not disclosed in
the Patent Applications at the time such applications were filed or during the
pendency of such applications.
(f) Right to License. Licensor represents and warrants that Licensor
has obtained written release and/or assignments from each person who contributed
to the Product or the Technology to the extent necessary to vest in Licensor all
right, title and interest in such contributions (including the right to license
such contributions free and clear of any liens or encumbrances).
(g) Licensor Licenses from Third Parties. Licensor represents and
warrants that Exhibit G, attached hereto, is a complete list of all persons and
entities from whom Licensor has licensed any of the Technology, Trademarks, or
other rights relating to the rights licensed hereunder and copies of all
agreements and related documentation. Licensee acknowledges that this Agreement
may be terminated or assigned to Xxxx Israel Deaconess Medical Center in
accordance with section 3.2 of the agreement attached hereto as Exhibit G should
that agreement be terminated.
(h) Supply Agreement. Licensor represents and warrants that it is not
in material breach of the Supply Agreement, that Licensor has fulfilled all of
its obligation (including without limitation, payment obligation) thereunder
throughout the Effective Date, and that it has the right to assign the Supply
Agreement to Licensee, as set forth in Section 6.4 hereof.
8.2 Representations and Warranties of Licensee. Licensee hereby represents
and warrants as follows:
(a) Corporate Power. Licensee is duly organized and validly existing
under the laws of Nevada and has full corporate power and authority to enter
into this Agreement, and to carry out the provisions hereof.
(b) Due Authorization. Licensee is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.
(c) Binding Agreement. This Agreement is a legal and valid obligation
binding upon Licensee and is enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by Licensee does not
conflict with any agreement, instrument or understanding, oral or written, to
which it is a Party or by which it may be bound, nor violate, any law or
regulation of any court, governmental body or administrative or other
agency having authority over it.
9. INTELLECTUAL PROPERTY RIGHTS
9.1 Ownership of Intellectual Property. Subject to the terms of this
agreement, Licensor shall retain all of its rights, title and interest in and to
the Technology, including but not limited to all copyrights, patents, including
but not limited to the Patent Rights, trademarks, including but not limited to
the Licensed Trademarks, and trade names and all other industrial and
intellectual property embodied in or related to the Product. Notwithstanding the
foregoing, Licensee shall retain all rights, title, and interest to (a) all
brand names, marks, trade dress, marketing programs, advertising copy and
related materials it creates or has created for it in connection with the sale,
marketing, and distribution of the Products, and (b) all research, development
and technical improvements (including copyrightable materials) Licensee creates
or has created for it at Licensee's own expense that pertain to the Technology
and the Products.
9.2 Prosecution of Patent Applications. Licensor shall have the sole right
to file and prosecute patent applications and maintain patents relating to the
Technology and any improvements thereto made by the Licensor. Licensee shall
reimburse Licensor for all costs incurred in connection with the preparation,
filing, prosecution and maintenance of any patent applications and patents
referred to in the preceding sentence that are within the Territory. Licensee
shall cooperate with Licensor in regard to such maintenance and prosecution.
Licensor shall provide Licensee with copies of all filings and relevant
documentation and an opportunity to comment thereon prior to their submission.
Should Licensor determine not to file, to abandon prosecution of, or to cease to
maintain, any patent or patent application in any jurisdiction within the
Territory, Licensor shall so notify Licensee and shall permit Licensee, should
Licensee choose to do so at Licensee's expense, to file, continue to prosecute
or maintain such patent in such jurisdiction, and Licensor shall cooperate with
Licensee in regard thereto.
9.3 Defense of Intellectual Property Suits. If a third party asserts that a
patent, trademark or other proprietary right owned by it is infringed or
otherwise violated by the manufacture, offer, distribution or sale of the
Product in the Territory, the Party against whom such a claim was asserted shall
immediately provide the other Party notice of such claim and the related facts
in reasonable detail. Licensee shall have the first right, but not the
obligation, to control such defense. If Licensee shall fail to take any such
action against any such third party, Licensor shall have the right, but not the
obligation, upon notice to Licensee, to take any steps Licensor may deem
appropriate with respect to such third party at Licensor's own expense,
including asserting control of any such defense. If Licensee assumes the
defense, Licensor shall to the extent which is reasonable in the circumstances
cooperate with Licensee and shall have the right to be represented separately by
counsel of its own choice. If Licensor will assume control of the defense, then
Licensor shall have the right, but not the obligation, to so control the defense
by counsel of its own choice. In such event, Licensee shall cooperate with
Licensor to the extent which is reasonable in the circumstances and shall have
the right to be represented separately by counsel of its own choice. The entity
(whether Licensor or Licensee) that controls the defense of a given claim with
respect to the manufacture, offer, sale or distribution of the Product in the
Territory shall also have the right to control settlement of such a claim;
provided, however, that no settlement shall be entered into without the consent
of the other Party if such settlement would materially adversely affect the
interests of such other Party in the Product in the Territory in a manner
different from the interests of the Party controlling the defense. If Licensee
controls the defense, it shall not enter into any settlement that may adversely
affect the Product outside the Territory without the prior written consent of
Licensor. If Licensee assumes the control of the defense and settlement
negotiation of any claim, pursuant to this Section 9.3, Licensee shall bear the
cost of such defense and settlement negotiation.
9.4 Enforcement of Intellectual Property Rights. In the case of any
infringement of any Patent Rights or any violation of any other intellectual
property right contained in the Technology by any third party (an "Infringer")
in the Territory during the term of this Agreement. Licensee shall have the
right, but not the obligation, at Licensee's expense, to cause such third party
to cease such infringement and to otherwise enforce such Patent Rights or such
other intellectual property right. Any amount recovered as a result of any
action taken by Licensee hereunder shall be first applied to reimbursing
Licensee for its out-of-pocket expenses incurred in connection therewith and the
remainder, if any, shall be divided appropriately between Licensee and Licensor
with reference to the relative monetary injury suffered by each of them by
reason of the infringement for which said amounts are recovered. If, following
reasonable notice from the Licensor, Licensee shall fail to take any action
against any Infringer which Licensor may reasonably deem necessary or desirable
to prevent such infringement or violation, or to recover damages therefor, in
addition to any other remedy available to it, Licensor shall have the right, but
not the obligation, upon notice to Licensee, to take any steps Licensor may deem
appropriate against such Infringer at Licensor's own expense. Licensee shall
assist Licensor, at Licensee's expense, as reasonably requested in taking any
such action against any such Infringer. Any amount recovered as a result of any
such action taken by Licensor shall be retained by Licensor. This paragraph
shall survive the termination or expiration of this Agreement.
9.5 Additional Proprietary Rights. Licensee may, in its sole
discretion and at its expense, use, develop, apply for, prosecute, record or
maintain any additional proprietary rights relating to the Product, including,
without limitation, patents, trademarks, servicemarks, copyrights and trade
secrets, as it may desire, and rights therein shall be retained by Licensee as
set forth in Section 9.1. Licensor shall provide reasonable cooperation in any
such effort, including, without limitation, execution of necessary documents and
provision of testimony in the form of affidavits.
10. CONFIDENTIALITY
10.1 Confidentiality Obligations. During the term of this Agreement, and
for a period of three (3) years after termination hereof, each Party will
maintain all Confidential Information in trust and confidence, will not disclose
any Confidential Information to any third party or use any Confidential
Information for any unauthorized purpose and will otherwise protect the
Confidential Information of the other Party with at least the same degree of
care as it uses for its own materials of a like nature. Each Party may use such
Confidential Information only to the extent required to accomplish the purposes
of this Agreement. Confidential Information shall not be used for any purpose or
in any manner that would constitute a violation of any laws or regulations,
including without limitation the export control laws of the United States.
Confidential Information shall not be reproduced in any form except as required
to accomplish the intent of this Agreement. No Confidential Information sha1l be
disclosed to any employee, agent, consultant, sublicensee or supplier who does
not have a need for such information. To the extent that disclosure is
authorized by this Agreement, the disclosing Party will obtain prior agreement
from its employees, agents, consultants, sublicenses or suppliers to whom
disclosure is to be made to hold in confidence and not make use of such
information for any purpose other than those permitted by this Agreement. Each
Party promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.
10.2 Terms of this Agreement. The Parties agree that the material financial
terms of this Agreement will be considered Confidential Information of both
Parties. However, each Party shall have the right to disclose the material
financial terms of this Agreement to any potential acquirer, merger partner, or
other bona fide potential financial or strategic partner, subject to a
requirement of all reasonable efforts to secure confidential treatment of such
information.
10.3 Authorized Disclosure. Notwithstanding any other provision of this
Agreement, each Party may disclose Confidential Information if such disclosure:
(a) is in response to a valid order of a court or other governmental
body of the United States or any political subdivision thereof, provided,
however that the responding Party shall first have given notice to the other
Party hereto and shall have made a reasonable effort to obtain a protective
order requiring that the Confidential Information so disclosed be used only for
the purposes for which the order was issued;
(b) is otherwise necessary to file or prosecute patent applications,
prosecute or defend litigation or comply with applicable governmental
regulations or otherwise establish rights or enforce obligations under this
Agreement, but only to the extent that any such disclosure is necessary,
provided that the disclosing Party xxxxx all available steps to designate the
information as confidential and to prevent further disclosure by the recipient;
or
(c) is otherwise required by law, provided that the disclosing Party
takes all available steps to designate the information as confidential and to
prevent further disclosure by the recipient.
10.4 Return of Confidential Information.
(a) Upon the receipt of a written request from the disclosing Party,
the receiving Party shall promptly return to the disclosing Party that Party's
Confidential Information, unless retention is otherwise expressly authorized
hereunder or is reasonably necessary to the receiving Party's performance of any
continuing duties or obligations, or its exercise of any continuing rights under
this Agreement or any other agreement with the disclosing Party.
(b) As soon as practicable after the termination of this Agreement for
any reason, the receiving Party shall return to the disclosing Party all
Confidential Information and all copies thereof in the possession, custody or
control of the receiving Party or shall destroy or render unusable a11 such
Confidential Information and all copies thereof and shall certify in writing to
the disclosing Party all such Confidential Information has been delivered to the
disclosing Party or destroyed; provided, however, that this Section 10.4 shall
not apply to any Confidential Information retention of which is otherwise
expressly authorized hereunder or which is reasonably necessary to the receiving
Party's performance of any continuing duties or obligation, or its exercise of
any continuing rights under this Agreement or any other agreement with the
disclosing Party, or which is required to be maintained to be in compliance with
applicable U.S. governmental regulations and other regulations applicable to the
Territory.
10.5 Remedies. Any breach of Section 10.1 or Section 10.2 hereof shall
cause immediate and irreparable injury to the other Party, and monetary damages
shall be inadequate to compensate for such breach. Thus, in the event of such
breach, the injured Party shall be entitled to injunctive relief and any and all
other remedies available at law or in equity.
10.6 Survival. The provisions of this Section 10 shall survive any
termination of this Agreement or the suspension or termination of either Party's
duties hereunder.
11. TERM AND TERMINATION
11.1 Term. This Agreement shall become effective on the Effective Date and,
unless earlier terminated pursuant to this Section 11, shall remain in effect
until the tenth anniversary of the Effective Date ("Term"). Licensee, in its
sole discretion, may extend the Term for an additional five (5) years by giving
written notice to Licensor not fewer than 180 days before this Agreement would
otherwise expire.
11.2 Termination by Either Party. Notwithstanding anything herein to the
contrary, each Party shall have the right, in addition and without prejudice to
any other rights or remedies, to terminate this Agreement if,
(a) the other Party commits any material breach of the terms hereof
which, in the case of a breach capable of remedy, shall not have been remedied
within sixty (60) days of the receipt by the Party in default of notice
specifying the breach; or
(b) the other shall dissolve, liquidate, or cease to carry on business
operations.
11.3 Early Termination by Licensee. Licensee shall have the right to
terminate this Agreement at any time upon ninety (90) days written notice to
Licensor and payment of all amounts due Licensor through the effective date of
termination.
11.4 Effect of Termination. Upon the effective date of expiration or early
termination of this Agreement, the following shall occur:
(a) Termination of Licenses. The licenses set forth in Section 2 shall
terminate and Licensee shall immediately discontinue all manufacture, marketing,
sales and distribution of the Product in the Territory. Licensee shall
discontinue all use of the Licensed Trademarks and the Technology.
Notwithstanding the foregoing, Licensee shall have the right, for a period not
to exceed ninety (90) days to sell any Products remaining in inventory and to
fill any orders outstanding on the date of termination. Sales of Products made
during such 90 day period shall be subject to royalties pursuant to Section 12.
Except to the extent of selling its remaining inventory as permitted by this
Section 11.4(a), after expiration or termination, Licensee shall not represent
or hold itself out as authorized manufacturer, distributor or sales
representative for the Product in the Territory or engage in any practices which
might make it appear that Licensee is such an authorized manufacturer,
distributor or sales representative.
(b) Accrued Rights Upon Termination. The rights of either Party which
may have accrued up to the date of such termination shall not be affected.
(c) Minimum Royalty Payments. Licensee shall have no further
obligations to make any minimum royalty payments under Section 3.2 other than a
pro rata portion of the minimum royalty payments due for the year during which
the effective date of termination occurs based on the portion of such year which
occurred prior to such effective date.
11.5 No Other Rights Upon Termination. Neither Party hereto shall be
responsible to the other for compensation, damages, or otherwise as a result of
termination of this Agreement in accordance with its terms. Obligations which
arose prior to such termination shall survive such termination.
11.6 Survival. The provisions of Sections 4.1, 4.2, 4.3, 7.2, 8, 9.1, 9.2,
9.4, 10, 11.4, 11.5, 11.6 and 12 shall survive any expiration or termination of
this Agreement.
12. MISCELLANEOUS PROVISIONS
12.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the Commonwealth of Massachusetts,
without regard to its principles of conflicts of laws.
12.2 Force Majeure. The failure of any party hereunder to perform any
obligation otherwise due as a result of governmental action, law, order or
regulation, or as a result of war, act of public enemy, strike or other labor
disturbance, fire, flood, act of God or other causes of like kind beyond the
reasonable control of such party, shall be excused for so long as said cause
exists to the extent such failure is caused by such an event.
12.3 Notice. All notices and requests required or authorized hereunder
shall be made in writing and shall be deemed to have been duly given if
delivered personally, delivered by facsimile with confirmation of receipt,
delivered by commercial overnight courier, or three (3) days after mailing, if
delivered by United States certified mail, postage prepaid, return receipt
requested, to a Party at its address set forth below or at such address as shall
be specified by such party to the other in accordance with this Section 12.3.
If to Licensor:
Medical Foods, Inc.
Five Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000)000-0000
Facsimile: (000)000-0000
with a copy to:
Mintz, Levin, Colin, Ferris, Glovsky and Popeo, PC
Xxx Xxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx A, Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Licensee:
Biomune Systems, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxx Xxxxxx
Telephone: (8OI) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Durham, Evans, Xxxxx & Xxxxxxx
Key Bank Tower
00 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (8O1) 000-0000
Facsimile: (8O1) 538-2425
12.4 Severability. If any term or provision of this Agreement is found to
be invalid under any applicable statute or rule of law then, that provision
notwithstanding, this Agreement shall remain in full force and effect and such
provision shall be amended to reflect as fully as possible the intent of the
Parties and, at the same time, to be valid, unless such amendment cannot be made
without materially defeating the intent of the parties in entering into this
Agreement, in which case this Agreement shall terminate, with the consequences
set forth in Section 11.
12.5 Limitation of Liability. EXCEPT FOR BREACHES OF SECTIONS 7.2, 8 AND 10
HEREOF, UNDER NO CIRCUMSTANCE SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY
CONSEQUENTIAL, SPECIAL OR INCIDENTAL DAMAGES ARISING OUT OF OR RELATED TO THIS
AGREEMENT (INCLUDING LOSS OF PROFITS AND LOSS OF BUSINESS) EVEN IF AWARE OF THE
POSSIBILITY OF SUCH DAMAGES. LICENSEE'S DAMAGES SHALL BE LIMITED TO THE AMOUNTS,
IF ANY, OWED PURSUANT TO SECTION 3.
12.6 Assignment. Neither party shall assign any of its rights or delegate
any of its duties under this Agreement without the prior written consent of the
other, except that either Party may assign this Agreement without such consent
to any Affiliate or successor by merger or sale of substantially all of its
business unit to which this Agreement relates. Any attempted assignment or
delegation in contravention of this Article shall be void and of no effect.
12.7 Amendment; Waiver. This Agreement may not be modified, amended,
rescinded, canceled or waived in whole or part, except by a written instrument
signed by the parties. No waiver of any provision of this Agreement or of any
rights or obligations of any party hereunder shall be effective unless made in a
written instrument executed by the party or parties waiving compliance. Any such
waiver shall be effective only in the specific instance and for the specific
purpose stated in such writing.
12.8 Counterparts. This Agreement may be executed in counterparts with the
same force and effect as if each of the signatories had executed the same
instrument.
12.9 Independent Contractors. Each Party shall act as an independent
contractor under the terms of this Agreement. Neither Party is, nor shall it
represent itself to be, nor shall it be deemed to be, an employee, agent, co-
venturer, franchisee or legal representative of the other for any purpose.
Neither party shall attempt to act, or represent itself as having the power, to
bind the other or create any obligation on behalf of the other.
12.10 Rights and Remedies Cumulative. Except as expressly provided herein,
the rights and remedies provided in this Agreement shall be cumulative and not
exclusive of any other rights and remedies provided by law or otherwise.
12.11 Captions. The captions herein have been inserted solely for
convenience of reference and in no way define or limit the scope or substance of
any provision of this Agreement.
12.12 Meaning of Certain Terms. As used in this Agreement, "herein" and
"hereof" shall refer to this Agreement as a whole, and "including" shall mean
"including but not limited to." All dollar amounts stated herein are expressed
in United States dollars.
12.13 Complete Agreement. This Agreement and the Exhibits hereto constitute
and express the final, complete and exclusive agreement and understanding
between the parties with respect to their subject matter and supersede all
previous communications, representations or agreements, whether written or oral,
with respect to the subject matter hereof, including but not limited to the
non-binding, letter of intent between the parties dated September 2, 1998.
[Signatures on the following page]
IN WITNESS WHEREOF, the Parties have each caused this Agreement to beI
signed and delivered by their duly authorized representatives as of the date
first written above.
Date: 9/27/98 Date: 28 September 1998
MEDICAL FOODS, INC. BIOMUNE SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
------------------------ ------------------------
Xxxxx X. Xxxxxxx Xxxxxxx X. Xxxxx
President and CEO President and CEO
[Exhibits Omitted]
LIST OF EXHIBITS
Exhibit A: Licensed Trademarks
Exhibit B: Territory
]Exhibit C: Minimum Commercial Sales by Country
Exhibit D: Minimum Royalty Payments
Exhibit F: Supply Agreement
Exhibit F: Acknowledgment of Licensor as Developer
Exhibit G: Third Party Licenses
