EXHIBIT 10.3
LICENSE AGREEMENT
LICENSE AGREEMENT ("the Agreement"),
dated March 9, 2007, by and among Dr. David P. Summers, an
individual residing at 3158 Canterbury Ln., Montgomery, TX 77354
(“Summers”), T.W. Owen, an individual residing at 10635
Lessona St., Las Vegas, NV 89141 (“Owen,” and together
with Summers, the "Licensor"), and Metabolic Research, Inc., an
Indiana corporation having an office at 8333 Weston Road, Suite
106, Woodbridge, Ontario L4L 8E2 (the "Licensee").
RECITALS:
WHEREAS, Licensor is the inventor of
certain technologies relating to the use of fungi, plants, or
animals for the production of anti-inflammatory and analgesic
products used to treat and cure inflammatory diseases, and is the
owner of the entire right, title and interest in and to certain
Patent Rights (defined below) relating to such technologies;
WHEREAS,
Licensor desires to have the Patent
Rights developed and commercialized and is willing to grant a
license thereunder; and
WHEREAS,
Licensee desires to obtain a license
under the Patent Rights upon the terms and conditions hereinafter
set forth.
NOW THEREFORE, in consideration of the
mutual covenants and agreements herein, and other good and valuable
consideration, the adequacy, sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
Definitions
1.1
Definitions . As used in this Agreement, the following
terms shall have the following meanings:
(a)
“ Improvement ” means
any improvement, addition, or modification of an invention claimed
in the Patent Rights and shall include, without limitation, any
patentable invention that is (i) not included in the Patent Rights
and (ii) is dominated by one or more Valid Claims of the Patent
Rights.
(b)
" Licensed Product " means any
product or part thereof, that: (i) absent the license granted
hereunder, would infringe one or more Valid Claims of the Patent
Rights; or (ii) is manufactured by using a Licensed Process or
that, when used, practices a Licensed Process.
(c)
" Licensed Process " means any
process that, absent the license granted hereunder, would infringe
one or more Valid Claims of the Patent Rights or which uses a
Licensed Product.
(d)
" Patent Rights "
means:
(i)
the United States provisional patent
applications listed on Exhibit A attached hereto;
(ii)
any patent applications resulting from
the provisional applications listed on Exhibit A , and any
divisionals, continuations, continuation-in-part applications, and
continued prosecution applications (and their relevant
international equivalents) of the provisional patent applications
listed on Exhibit A and of such patent applications that
result from the provisional applications listed on Exhibit A
, and the resulting patents;
(iii)
any patents resulting from reissues,
re-examinations, or extensions (and their relevant international
equivalents) of the patents described in clauses (i) and (ii) of
this subsection 1.1(d); and
(iv)
international (non-United States) patent
applications and provisional applications filed after the date
hereof and the relevant international equivalents to divisionals,
continuations, continuation-in-part applications and continued
prosecution applications of the patent applications to the extent
the claims are directed to subject matter specifically described in
the patents or patent applications referred to in clauses (i), (ii)
and (iii) of this subsection 1.1(d), and the resulting
patents.
(e)
“ Term ” shall mean
the term of this Agreement, which shall commence on
the date hereof and shall remain in
effect until the expiration or abandonment of the last remaining
Valid Claim of any issued patents and filed patent applications
within the Patent Rights, unless earlier terminated in accordance
with the provisions of this Agreement, in which case the Term shall
terminate upon the effective date of such termination.
(f)
“ Territory ” means
the following: Europe, more specifically defined in EXHIBIT C
attached hereto (the “ Territory ”).
(g)
“ Valid Claim ” means
either (i) a claim of an issued patent within the Patent Rights
that has not been held invalid by an administrative agency or court
of competent jurisdiction in any unappealed or unappealable
decision or (ii) a claim of a pending application that has not been
abandoned or finally rejected without the possibility of appeal or
refilling. The invalidity of a particular claim in one or more
countries shall not invalidate such claim in the remaining
countries of the Territory.
ARTICLE II
License Grant
2.1
License Grant . Subject to the terms and conditions of this
Agreement, Licensor hereby grants to Licensee, and Licensee hereby
accepts, an exclusive, irrevocable, perpetual license ("
License ") in the Territory to develop and have
developed,
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to make and have made, to use and have
used, to sell and have sold, and to lease and have leased Licensed
Products and Licensed Processes.
2.2
Exclusivity . Licensor agrees that it shall not retain any
rights to, and shall not directly or indirectly grant any other
licenses to, develop, make, use, sell, and lease Licensed Products
in the Territory or to perform Licensed Processes in the Territory
during the Term.
2.3
Exclusive Option to
Improvements .
(a)
Licensor hereby grants to Licensee an
exclusive option to add Improvements to the Patent Rights.
Licensee may exercise its option to add such Improvement to
the Patent Rights by providing Licensor with written notification
of Licensee's desire to so add the Improvement to the Patent
Rights. Upon Licensee's exercise of such right, such
Improvement shall be added to the Patent Rights and Exhibit
A hereto shall be deemed to have been amended to add the
invention disclosure (and any related patent applications) covering
such Improvement. Licensor shall not offer a license to such
Improvement to any third party.
(b)
At Licensee’s option, Licensor
shall assign to Licensee, without further consideration, its entire
right, title and interest in and to each and every such
Improvement.
2.4
Sublicenses . Licensee shall have the right to grant
sublicenses of its rights under Section 2.1.
2.5
Right of First Refusal
. Licensee shall have the Right of
First Refusal in the sale of any additional Territorial Licenses
for the Patent Rights, together with sixty (60) days to consummate
such transaction.
ARTICLE III
CONSIDERATION
3.1
Consideration . In consideration of the License, Licensee
shall issue to Licensor an aggregate of two million (2,000,000)
shares of its common stock (the “ Consideration Shares
”) as follows:
Upon execution of this Agreement,
Licensee shall issue to Licensor two million (2,000,000) shares of
the common stock of Licensee, which is hereby acknowledged and
agreed to constitute consideration for the grant of the License in
the Territory;
The Consideration Shares shall be
allocated among each Licensor in the manner specified on Exhibit
B attached hereto.
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ARTICLE IV
Representations and Warranties
4.1
Licensor’s Representations and
Warranties . Each
Licensor, jointly and severally, hereby warrants and represents to
Licensee that:
(a)
Authority . This Agreement constitutes the legal, valid
and binding obligation of each Licensor, enforceable against each
of them in accordance with its terms. Upon the execution and
delivery by each Licensor of this Agreement, this Agreement will
constitute the legal, valid and binding obligation of each
Licensor, enforceable against each of them in accordance with its
terms. Each Licensor has the absolute and unrestricted right, power
and authority to execute and deliver this Agreement and to perform
its obligations under this Agreement, and such action has been duly
authorized by all necessary action of each Licensor.
(b)
Infringement; No Conflict;
Litigation . No patent
or other intellectual property right of any third party is
infringed or has been challenged or threatened in any way by the
Patent Rights or the technologies relating to the Patent Rights.
To Licensor’s knowledge, there is no patent or patent
application of any third party that may potentially infringe or
otherwise interfere with the Patent Rights. Neither the
execution and delivery of this Agreement nor the consummation or
performance of any of the transactions contemplated hereunder will,
directly or indirectly (with or without notice or lapse of time),
breach or give any governmental authority or other person the right
to challenge this Agreement or any of the transactions contemplated
hereunder. Licensor has not granted any other licenses with
respect to the Patent Rights. Licensor is not aware of any
existing or threatened litigation concerning the Patent
Rights.
(c)
No Consent Required
. Licensor is not required to give
any notice to or obtain any consent from any person in connection
with the execution and delivery of this Agreement or the
consummation or performance of any of the transactions contemplated
hereunder.
(d)
Inventors; Ownership
. Licensor is the sole inventor of
the technologies relating to the Patent Rights. Licensor is
the sole and exclusive owner of the entire right, title and
interest in and to the Patent Rights, free and clear of all liens
or other encumbrances. Licensor has full legal right,
authority to grant the exclusive License to Licensee as set forth
herein.
(f)
Securities Matters
.
(i)
Licensor acknowledges its understanding
that the issuance of the Consideration Shares hereunder is intended
to be exempt from registration under the Securities Act of 1933, as
amended (the “Securities Act”). In furtherance
thereof, each of Licensor hereby jointly and severally represents
and warrants to the Licensee that it is an “accredited
investor” as that term is defined in Rule 501 of the General
Rules and Regulations under the Securities Act. Licensor is
acquiring the Consideration Shares for
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its own account as principal, not as a
nominee or agent, for investment purposes only, and not with a view
to, or for, resale, distribution or fractionalization thereof in
whole or in part and no other person has a direct or indirect
beneficial interest in such shares or any portion thereof.
Each Licensor has the financial ability to bear the economic
risk of its investment. Each Licensor has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of the prospective investment in
the shares being issued to it hereunder. Each Licensor has
been provided an opportunity for a reasonable period of time prior
to the date hereof to obtain additional information concerning the
issuance of the shares, Licensee, and all other information to the
extent Licensee possesses such information or can acquire it
without unreasonable effort or expense.
(ii)
Licensor understands that the
Consideration Shares will not be registered under the Securities
Act or the securities laws of any state thereof, nor is such
registration contemplated. Licensor understands and agrees further
that such shares must be held and may not be transferred until and
unless the shares are registered under the Securities Act and the
securities laws of any other jurisdiction or an exemption from
registration under the Securities Act and any applicable laws is
available. Licensor understands that legends stating that the
shares have not been registered under the Securities Act and the
securities laws of any other jurisdiction and setting out or
referring to the restrictions on the transferability and resale of
the shares will be placed on all documents evidencing the
shares.
(g)
Full Disclosure
. No representation or warranty of
Licensor in this Agreement omits to state a material fact necessary
to make the statements herein, in light of the circumstances in
which they were made, not misleading. There is no fact known
to Licensor that has specific application to the Patent Rights and
that materially adversely affects or, as far as can be reasonably
foreseen, materially threatens the Patent Rights that has not been
set forth in this Agreement.
4.2
Licensee’s Representations and
Warranties .
(a)
Authority . This Agreement constitutes the legal, valid
and binding obligation of Licensee, enforceable against Licensee in
accordance with its terms. Upon the execution and delivery by
Licensee of this Agreement, this Agreement will constitute the
legal, valid and binding obligation of Licensee, enforceable
against Licensee in accordance with its terms. Licensee has the
absolute and unrestricted right, power and authority to execute and
deliver this Agreement and to perform its obligations under this
Agreement, and such action has been duly authorized by all
necessary action of Licensee.
(b)
Issuance of Consideration
Shares . The
Consideration Shares, when issued in accordance with the terms
hereof and on the basis of the representations and warranties of
set forth herein and paid for as herein provided, shall be duly and
validly issued, fully paid, and non-assessable.
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ARTICLE V
Patent Prosecution
5.1
Responsibility for Patent
Rights . Licensor shall
prepare, file, prosecute, and maintain all of the Patent Rights.
Licensor and its appointed patent attorneys shall use
reasonable efforts to copy Licensee on all patent correspondence as
follows: (a) documents received from any patent office shall be
provided to Licensee promptly after receipt; (b) any document to be
filed in any patent office shall be provided in draft form to
Licensee sufficiently prior to such document's filing to allow for
review and comment by Licensee; and (c) documents filed with any
patent office shall be pr
