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Exhibit
10.45
LICENSE
AGREEMENT
This Agreement, made and entered into
this 18th day of June, 1996, (the Effective Date) by and between
BRANDEIS UNIVERSITY, a not-for-profit corporation duly organized
and existing under the laws of the Commonwealth of Massachusetts
and having its principal office at 415 South Street, Waltham,
Massachusetts 02254 U.S.A. (hereinafter referred to as
“BRANDEIS”), and GFA Brands, Inc., its AFFILIATE
companies, and its successors or assigns, collectively referred to
as GFA BRANDS, a corporation duly organized and existing under the
laws of the State of Ohio and having its principal office at 211
Knickerbocker Road, Cresskill, NJ 07626 (hereinafter referred to as
“LICENSEE”).
WITNESSETH
WHEREAS, BRANDEIS is the owner of
certain Technology relating to the use of a balanced proportion of
saturated and polyunsaturated fatty acids from one or more
vegetable oil sources for incorporation into any and all food
products to increase HDL and the HDL/LDL cholesterol ratio, and
accompanying know-how (hereinafter THE TECHNOLOGY), and has the
right to grant licenses thereunder;
WHEREAS, BRANDEIS desires to have THE
TECHNOLOGY utilized in the public interest and is willing to grant
a sole and exclusive license thereunder;
WHEREAS, LICENSEE acknowledges the
valuable benefits which may accrue to LICENSEE by virtue of the
grant to LICENSEE of commercialization rights hereunder, and agrees
that the royalty rates and other agreed to consideration reflect
such benefits, and BRANDEIS recognizes that patent protection will
enhance commercialization and hence has filed a patent application
in the United States on THE TECHNOLOGY (see attached);
and
WHEREAS, LICENSEE desires to obtain a
license hereunder upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the
premises and the mutual covenants contained herein, the parties
hereto agree as follows:
ARTICLE I -
DEFINITIONS
For the purposes of this Agreement, the
following words and phrases shall have the following
meanings:
| 1.1 |
“LICENSEE” shall mean GFA BRANDS and any AFFILIATE
or SUBSIDIARY thereof. |
| 1.2 |
“SUBSIDIARY” shall mean any corporation, division,
company or other entity more than fifty percent (50%) of whose
voting stock is owned or controlled directly or indirectly by
LICENSEE. |
| 1.3 |
“THE
TECHNOLOGY” shall mean certain know-how, technical data, and
information, relating to the product and its use, said product
being one or more vegetable oils providing a balance of saturated
and polyunsaturated fatty acids
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for incorporation into any
and all food products to increase HDL and the HDL/LDL cholesterol
ratio in human serum, and accompanying know-how, and the U.S.
patent application describing and claiming same, as more fully
described and/or listed in Appendix A hereto and made a part
hereof, whether or not it is of a confidential nature or
patentable.
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| 1.4 |
“PATENT RIGHTS” shall mean the United States Patent
Application entitled “Increasing the HDL Level and the
HDL/LDL Ratio in Human Serum With Fat Blends,” a copy of
which application is appended hereto along with a copy of the
corresponding patent assignment and power of attorney documents as
part of Appendix A and made a part hereof (hereinafter referred to
as the “PATENT RIGHTS PATENT(S)”) describing and
claiming THE TECHNOLOGY, and any corresponding foreign and
subsequent U.S. or foreign patent applications (hereafter referred
to as the ‘PATENT RIGHT PATENT APPLICATION(S)”)
describing and claiming THE TECHNOLOGY, and any continuations,
continuations-in-part, divisions, reissues or extensions of any of
the foregoing. |
| 1.5 |
“LICENSED PRODUCT(S)” shall mean any natural
vegetable oil, genetically selected or engineered vegetable oil,
blend of such oils, or any oil-based food without limitation, for
any and all food uses, sold in any and all marketplaces, and
providing a balance of saturated and polyunsaturated fatty acids to
increase HDL and the HDL/LDL cholesterol ratio in human serum, for
the specific purpose of claims of HDL/LDL balance
which: |
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(a) |
is covered in whole or in part by (i) a claim contained in
PATENT RIGHTS PATENT APPLICATION in the country in which the
LICENSED PRODUCT(S) is made, used or sold or (ii) a valid and
unexpired claim contained in a PATENT RIGHTS PATENT in the country
in which the LICENSED PRODUCT(S) is made, used or sold,
or |
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(b) |
incorporates or is manufactured using any of THE
TECHNOLOGY. |
| 1.6 |
“SUBLICENSEE” shall mean any corporation or other
commercial entity which is not a SUBSIDIARY or AFFILIATE of
LICENSEE. |
| 1.7 |
“AFFILIATE” shall mean all companies controlled by,
or in common control with, LICENSEE. |
ARTICLE II -
GRANT
| 2.1 |
BRANDEIS hereby grants to LICENSEE a worldwide, sole and
exclusive right and license to make, have made, use, lease and sell
the LICENSED PRODUCT(S). Unless said Agreement is sooner terminated
as hereinafter provided, the term of said right and license shall
be as follows: |
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(a) |
In any country(s) where PATENT RIGHTS are granted, to the full
end of the term of such PATENT RIGHT(S) in said
country(s); |
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(b) |
In any country(s) where PATENT RIGHT(S) are either not applied
for, or if applied for, not granted, for a period of seventeen
(17) years from the Effective Date of this
Agreement. |
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| 2.2 |
LICENSEE shall have the right to sublicense any of the rights,
privileges and license granted hereunder, only with the prior
written approval of BRANDEIS, which permission shall not be
unreasonably withheld. |
| 2.3 |
LICENSEE agrees that any sublicense agreements signed by it
shall contain a clause stating that the obligations of this
Agreement including royalty payment obligations shall be binding
upon the SUBLICENSEE as if it were in the place of
LICENSEE. |
| 2.4 |
LICENSEE agrees to forward to BRANDEIS a copy of any and all
fully executed sublicense agreements, and further agrees to forward
to BRANDEIS annually a copy of such reports received by LICENSEE
from its SUBLICENSEES during the preceding twelve (12) month
period under the sublicenses as shall be pertinent to a royalty
accounting under said sublicense agreements. |
| 2.5 |
LICENSEE shall not receive from SUBLICENSEES anything of value
in lieu of monetary payments based upon payment obligations of any
sublicense of THE TECHNOLOGY, PATENT RIGHTS, or LICENSED PRODUCT(S)
(see Paragraphs 1.3, 1.4 and 1.5) under this Agreement without the
prior written approval of BRANDEIS. |
ARTICLE III - DUE
DILIGENCE
| 3.1 |
LICENSEE shall use reasonable efforts to bring the LICENSED
PRODUCT(S) to market through a thorough, vigorous, and diligent
program for exploitation of the rights licensed under this
Agreement. These reasonable efforts will include LICENSEE’S
agreement to minimum expenditures for the purpose of bringing the
LICENSED PRODUCT(S) to market. These expenditures shall include all
of LICENSEE’S direct expenditures on commercializing LICENSED
PRODUCT(S) (including but not limited to support of nutritional
research, product formulation research costs, and direct costs in
product marketing, promotion, and advertising). These expenditures
shall total at least Thirty Thousand Five Hundred Dollars
($30,500.) during the 1996 calendar year (including $25,000. for
nutritional studies and $5,500 for patent expenses), at least One
Hundred Thousand Dollars ($100,000.) during the 1997 calendar year,
and at least One Hundred Thousand Dollars ($100,000.) during the
1998 calendar year. Following the end of each calendar year, and no
later than sixty days following a written request by BRANDEIS,
LICENSEE shall provide an accounting of these expenditures for the
preceding year to ensure satisfaction of this requirement. LICENSEE
shall be deemed to have met its obligation under this paragraph if
these minimum expenditures are made as scheduled, and are directed
to the LICENSED PRODUCT(S), and are used for bringing the LICENSED
PRODUCT(S) to market in a manner similar to LICENSEE’S
efforts for its other products. |
| 3.2 |
In addition, LICENSEE shall make a first bona fide commercial
sale of a LICENSED PRODUCT within twelve (12) months following
the Effective Date of this Agreement unless a delay is required due
to a governmental regulatory agency, which delay shall be explained
by LICENSEE in written detail to BRANDEIS. |
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| 3.3 |
LICENSEE’s failure to perform in accordance with
Paragraphs 3.1 and 3.2 above shall be grounds for BRANDEIS to
terminate this Agreement pursuant to Paragraphs 3.4, 7.1, and 7.2
hereof, which shall be BRANDEIS’s only remedies for failure
by LICENSEE to perform under Paragraphs 3.1 and 3.2. |
| 3.4 |
LICENSEE’s failure to meet the twelve (12) month
deadline pursuant to Paragraph 3.2 is grounds for BRANDEIS to
terminate this Agreement effective immediately upon serving
LICENSEE, by certified mail at the address designated in Article
XIV hereof, notice of termination of the Agreement. |
| 3.5 |
BRANDEIS will provide technical assistance and support as
reasonably requested, e.g., telephone conversations and on-campus
meetings on an ongoing basis as long as this Agreement is in
effect. Such assistance and support will be considered part of the
royalty-funded responsibilities of BRANDEIS. Off campus meetings
shall be compensated by reimbursement for out of pocket expenses
plus a mutually agreed-upon per diem fee, except in cases where the
patent or health claims are challenged by a governmental agency, in
which case only out of pocket expenses shall be
reimbursed. |
| 3.6 |
BRANDEIS will actively pursue issuance of all pending patent
applications and will furnish LICENSEE with copies of all related
patent prosecution communications, including but not limited to
correspondence from any government agencies and departments on a
timely basis. |
| 3.7 |
This Agreement which is limited to natural vegetable oils will
automatically extend to include improvements and associated
technological developments which offer an increase in HDL and the
HDL/LDL cholesterol ratio in human serum. |
| 3.8 |
BRANDEIS agrees to allow LICENSEE to use its name in
association with citation of research results to inform the public
in a similar manner as set forth in Appendix B on packaging,
advertising and promotional materials to establish credibility for
the claims for increasing HDL and the HDL/LDL cholesterol ratio in
human serum. For all other proposed uses of the name of BRANDEIS
and/or the inventor(s), LICENSEE must first secure written
permission from BRANDEIS and/or the inventor(s), as appropriate,
according to the following procedure, which permission shall not be
unreasonably withheld: LICENSEE shall provide BRANDEIS and/or the
inventor(s), as appropriate, with copies of all of the proposed
material which uses the name of BRANDEIS or the inventor(s) at
least fifteen (15) days prior to use to allow BRANDEIS and/or
the inventor(s) to review same, and BRANDEIS and/or the inventor(s)
shall provide LICENSEE with a written response within ten
(10) business days of receipt of the material, and if LICENSEE
receives no response within ten (10) business days, BRANDEIS
and/or the inventor(s) shall be deemed to have approved the
proposed use. |
ARTICLE IV - ROYALTIES AND
CONSIDERATION
| 4.1 |
For the rights, privileges and license granted hereunder,
LICENSEE shall pay to BRANDEIS or in the case of patent expenses to
the designated patent attorney (in the manner hereinafter provided
to the end of the term of this Agreement): |
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Certain portions hereof denoted
with “[***]” have been omitted pursuant to
a request for confidential treatment. An
unredacted copy hereof has been filed separately with
the United States Securities and Exchange Commission pursuant
to a request for confidential treatment .
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(a) |
Research expenses including University overhead in the amount
of Twenty-Five Thousand Dollars ($25,000) which amount shall be due
and payable on the Effective Date of this Agreement, for animal
nutritional studies during calendar year 1996 in the laboratory of
Dr. K.C. Hayes, utilizing the LICENSED PRODUCT(S) and related
oil and fat blends in controlled diets. In conjunction with this
research and in support of the LICENSED PRODUCT(S), Dr. Hayes
will provide technical advice as needed and, should LICENSEE
request additional animal and/or human studies, BRANDEIS will help
design and conduct such studies. BRANDEIS and LICENSEE shall
mutually agree on the appropriate costs for such additional
studies, with LICENSEE being solely responsible for funding such
studies. |
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(b) |
Royalties, for such LICENSED PRODUCT(S) used or sold by
LICENSEE during the period of this Agreement, in an amount equal
to: |
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(i) |
— **** per pound of oil and/or fat utilized in LICENSED
PRODUCT(S) containing between ***% and ***% by weight oil and/or
fat, |
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— **** per pound of’ oil and/or fat utilized in
LICENSED PRODUCT(S) containing between ***% and ***% by weight oil
and/or fat, |
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— **** per pound of oil and/or fat utilized in LICENSED
PRODUCT(S) containing between ***% and ***% by weight oil and/or
fat, |
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— **** per pound of oil and/or fat utilized in LICENSED
PRODUCT(S) containing ***% or less by weight oil and/or
fat. |
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(ii) |
****% of any and all sublicense issue
fees, royalties, and any other payments received by LICENSEE in
conjunction with any sublicense issued under this
Agreement |
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(c) |
To the best of BRANDEIS’ knowledge, none of The
Technology infringes the rights of any third party. In the event
such infringements are alleged by third parties, BRANDEIS agrees to
investigate the situation fully in collaboration with LICENSEE, and
the parties agree to collaborate in taking appropriate action to
deal with the problem that may be exposed. If it is determined by a
court, arbitrator or other authority having jurisdiction over the
issue of infringement that THE TECHNOLOGY causes the making, using,
selling or offering for sale of LICENSED PRODUCT(S) to infringe the
rights of a third party, or if BRANDEIS and LICENSEE agree that it
is practical to dispose of a third party’s charge of
infringement by making an agreement with the third party, then any
payments made to the third party shall be deducted from royalties
payable to BRANDEIS, but in no case retroactively, or deductible at
a rate exceeding that payable to BRANDEIS. |
| 4.2 |
All monies payable to BRANDEIS under Paragraph 4.1(b) shall be
considered due and owed to BRANDEIS semi-annually payable no later
than July 31 for January through June incomes received, and
payable no later than January 31 for the preceding July
through December incomes received. |
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| 4.3 |
All payments due under Paragraph 4.1(a) that are not paid for
whatever reason when due, and all payments due under Paragraphs
4.1(b) and 4.2 that are not paid for whatever reason within 30 days
of the end of a given calendar half year when due are delinquent on
the next day (the 31st day after the end of that given calendar
half year) and are then subject to the addition of interest at the
annual rate of prime + 2%, calculated from the date of delinquency
(31 days after the end of the given calendar half year) to the date
a negotiable payment check is mailed for all monies due and owed to
BRANDEIS. |
| 4.4 |
No multiple royalties shall be payable because the LICENSED
PRODUCT(S) are or shall be covered by more than one patent
application or patent licensed under this Agreement. |
| 4.5 |
Royalty payments shall be paid in United States dollars in
Waltham, Massachusetts, or at such other place as BRANDEIS may
reasonably designate within the United States. If any currency
conversion shall be required in connection with the payment of
royalties hereunder, such conversion shall be made by using the
exchange rate prevailing at a first-class foreign exchange bank on
the last business day of the calendar half year reporting period to
which such royalty payments relate. |
| 4.6 |
Prior to December 31, 1997, LICENSEE shall have the right
to early termination of this Agreement without penalty, upon thirty
(30) days written notice to BRANDEIS provided that it has
satisfied all of its payment obligations owed under this Agreement,
said obligations which shall have matured as of the termination
date of this Agreement. If the Due Diligence expenditures of
Paragraph 3.1 have not been met and demonstrated by a written
accounting to BRANDEIS prior to such early termination, LICENSEE
shall pay to BRANDEIS with said written termination notice, a
termination fee of Twenty Five Thousand Dollars ($25,000) in
addition to such other payment obligations owed under this
Agreement, said obligations which shall have matured as of the
termination date of this Agreement. However, such termination fee
will not apply for the following occurrences which are beyond the
control of LICENSEE: |
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(a) |
the animal research studies do not support the patent claims
(see Paragraph 7.3). |
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(b) |
the U.S. patent application receives a final
rejection. |
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(c) |
infringement claims are asserted by a third party and are not
resolved pursuant to Paragraph 4.1 (c). |
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(d) |
any government agency forbids use by LICENSEE of the underlying
health claims regarding increasing HDL and the HDL/LDL cholesterol
ratio. |
ARTICLE V - REPORTS AND
RECORDS
| 5.1 |
LICENSEE
shall keep full, true and accurate books of account containing all
particulars that may be necessary for the purpose of showing the
amount due and payable to BRANDEIS as aforesaid, and the amounts
spent pursuant to Paragraph 3.1 of this Agreement. Said books and
the supporting data shall be kept at LICENSEE’s
principal
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place of business or the
principal place of business of the appropriate SUBSIDIARY of
LICENSEE to which this Agreement directly relates. Said books and
the supporting data shall be open at all reasonable times, for
three (3) years following the end of the calendar year to
which they pertain, to the inspection of the BRANDEIS Internal
Audit Division and/or an independent certified public accountant
retained by BRANDEIS and/or a certified public accountant employed
by BRANDEIS, for the purpose of verifying at BRANDEIS’
expense LICENSEE’s royalty statement or compliance in other
respects with this Agreement. Auditing of LICENSEE books and
supporting data by a representative of BRANDEIS can occur during
normal business hours upon thirty (30) days written
request.
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| 5.2 |
LICENSEE, within thirty (30) days after June 30 and
December 31, of each year, shall deliver to BRANDEIS true and
accurate reports, giving such particulars of the business conducted
by LICENSEE during the preceding six-month period under this
Agreement as shall be pertinent to a royalty accounting hereunder.
These reports shall include at least the following: |
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(a) |
List of LICENSED PRODUCTS sold, with their weight percentage of
oil and/or fat. |
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(b) |
Quantity (weight) of LICENSED PRODUCT(S) sold. |
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(c) |
Total fees and royalties due from all sales, uses and
sublicenses. |
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(d) |
Names and addresses of all SUBLICENSEES of
LICENSEE. |
ARTICLE VI - PATENT
PROSECUTION AND FEES
| 6.1 |
BRANDEIS has filed a United States Patent Application as set
forth in Appendix A. Brandeis may apply for any subsequent U.S. and
foreign patent applications it deems necessary or desirable, after
consultation with LICENSEE. |
| 6.2 |
BRANDEIS shall be responsible, other than as provided in
Paragraph 6.4, for providing and maintaining all patent protection
which the parties agree are necessary for supporting the marketing
effort based upon the TECHNOLOGY and health claims. LICENSEE shall
contribute Five Thousand Five Hundred Dollars ($5,500.) toward this
expense upon execution of this Agreement. In advance of this
execution, BRANDEIS has filed the appropriately updated U.S. patent
application (a CIP filing), a Canadian patent application and a PCT
foreign application. Prior to the abandonment of any patent
application or lapse of any patent rights, BRANDEIS shall tender to
LICENSEE an assignment of the application or patent so as to permit
LICENSEE to prosecute and maintain it at LICENSEE’s own
expense for its own benefit. |
| 6.3 |
If: (1) a PATENT RIGHTS PATENT describing and claiming THE
TECHNOLOGY should fail to be granted in the U.S. by
December 31, 1998, or (2) the PATENT RIGHTS PATENT
APPLICATION attached as Appendix A is abandoned or otherwise
terminated, or (3) a patent issuing from the PATENT RIGHTS
PATENT APPLICATION attached as Appendix A is allowed to lapse or is
found by a court or agency of qualified jurisdiction to be invalid
or unenforceable, the aforesaid royalty rates specified in
Paragraph 4.1(b)(i) shall be reduced by fifty percent
(50%). |
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| 6.4 |
LICENSEE shall have a fifteen (15) month option period
from the date of this Agreement to authorize BRANDEIS to file and
prosecute patent applications through patent allowance and issuance
(or alternatively to final rejection) in individual foreign
countries outside of the U.S. and Canada (herein termed DESIGNATED
FOREIGN COUNTRIES) at LICENSEE’S sole expense. For any
DESIGNATED FOREIGN COUNTRY, the aforesaid royalty rates for
payments to BRANDEIS pursuant to Paragraph 4.1(b)(i) shall be
reduced by fifty percent (50%) until all of the expenses for
the foreign patent in such a DESIGNATED FOREIGN COUNTRY are
reimbursed. Notwithstanding the above, at any time following the
Effective Date of this Agreement, upon thirty (30) days
written notice to BRANDEIS, LICENSEE shall have the right to cease
incurring new expenses for patent prosecution and/or patent
maintenance in any DESIGNATED FOREIGN COUNTRY. If and when such a
cessation should occur, BRANDEIS shall have the option, in its sole
discretion and at its sole expense, to continue such patent
prosecution and/or maintenance. |
ARTICLE VII -
TERMINATION
| 7.1 |
Should LICENSEE fail in its remittance to BRANDEIS, of monies
due in accordance with the terms of this Agreement, BRANDEIS shall
have the right to serve upon LICENSEE, by certified mail at the
address designated in Article XIV hereof, notice of termination of
this Agreement effective sixty (60) days after mailing of such
notice unless LICENSEE shall pay to BRANDEIS, within the sixty
(60) day period, all such monies (including fees and
royalties) due and payable, with the exception of those royalties
affected (herein termed AFFECTED ROYALTIES) by LICENSEE’s
infringement payments pursuant to Paragraph 4.1(c) and/or
LICENSEE’s foreign patent payments pursuant to Paragraph 6.4.
Any default in payment of AFFECTED ROYALTIES shall be remedied
pursuant to Paragraph 7.2. Upon the expiration of the sixty
(60) day period, if LICENSEE shall not have paid all such
monies due and payable, the rights, privileges and license granted
hereunder shall thereup |
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