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Exhibit 99.01
TERMINATION AGREEMENT AND
MUTUAL GENERAL RELEASE
This
Termination Agreement and Mutual General Release (the
“Agreement”) made this 11th day of July, 2007, is
entered into by and between Progressive BioActives, Inc.
(hereinafter “PBI”), a Canadian
Federally registered business, which has a principal place of
business at 85 Watts Avenue, Charlottetown, Prince Edwards
Island, Canada and BioAgra, LLC (hereinafter
“BioAgra”), a Georgia, USA limited liability
company. (PBI and BioAgra are hereinafter
collectively referred to as the “Parties” and
individually referred to as a
“Party”).
Recitals
WHEREAS,
on or about April 15, 2005, the Parties entered into a
Technology License Agreement, a copy of which is attached
hereto as Exhibit 1 (PBI was incorrectly referred to therein
as Progressive Probiotics, Inc.);
WHEREAS,
the Parties wish to terminate the Technology License Agreement
by mutual consent as provided in Paragraph 2.2(a) of that
Agreement;
WHEREAS,
on June 18, 2007, the Parties entered into a Memorandum
Agreement regarding the termination of the Technology License
Agreement; and
WHEREAS,
this Agreement is intended to more fully set out the terms and
conditions for terminating the Technology License Agreement
and is intended to supercede the Memorandum
Agreement.
NOW
THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, the Parties hereby agree as
follows:
Agreement
1.
Termination of Technology License Agreement
. Pursuant to Paragraph 2.2(a) of the Technology License
Agreement, the Parties hereby mutually consent to the termination
of the Technology License Agreement under the terms and conditions
set forth herein. Such termination is and shall be
effective as of June 18, 2007.
2.
Termination Payments . As consideration for
termination of the Technology License Agreement, BioAgra agrees to
pay to PBI 2.5% of its Gross Sales of Beta Glucan Products from
July 1, 2007 through June 30, 2017. BioAgra shall make
the termination payments on a monthly basis into an escrow account
to be established by separate agreement of the
Parties. The monthly payments shall be made on or before
the 15 th of the
month, beginning August 15, 2007, for BioAgra’s sales of Beta
Glucan Products in the prior month. The escrowed funds
shall be distributed by the escrow agent to PBI quarterly by the 30
th of the
month following the end of the quarter. The first
quarter shall end on September 30, 2007, with the first quarterly
distribution due and owing on October 30, 2007. At the
time of each quarterly distribution of escrow funds, BioAgra shall
also provide a written statement to PBI, or its designated
representative, setting forth the Gross Sales of Beta Glucan
Products for the prior quarter. “Beta Glucan
Products” shall mean yeast derived, insoluble
beta-1,3/1,6-D-glucan. “Gross Sales” shall
mean all sales, less amounts allowed or credited due to returns,
and less any amounts paid for sales commissions and
taxes.
PBI,
upon reasonable notice, shall have the right to conduct an
audit of the relevant sales and payment records of BioAgra to
verify the accuracy of the termination payments
made. Audits shall be conducted at PBI’s
expense, shall be restricted to one per year, shall be at the
offices of BioAgra during regular business hours, and shall be
limited to two business days. BioAgra agrees to
provide reasonable assistance to PBI to effectively perform
any such audit.
BioAgra
agrees to pay a penalty equal to 1% of the monthly termination
payment (i.e. balance due), if it fails to make such monthly
termination payment on or before the 15th of the month for
such termination payment. Such penalty shall
be added to the termination payment and delivered to the
escrow agent.
3.
BioAgra’s Right to Manufacture Beta Glucan
. Subsequent to this Agreement, BioAgra shall have the
right to manufacture Beta Glucan Products utilizing its own
intellectual property, methods and processes including all
modifications to such methods and processes. PBI
acknowledges that BioAgra declares its methods and processes are
independent of and separate from any patent or other intellectual
property rights of PBI, including without limitation, any patent
that may issue from U.S. Patent Application 10/711,980, PCT
Application PCT/CA2005/001605, and WO 2006/042403 A1, and any
continuation, continuation-in-part, or divisional applications
based thereon, as may be further limited by the prosecution of any
such applications (the “PBI
Technology”). PBI also covenants not to sue
BioAgra, or any agent, customer, affiliate, representative,
distributor, or other person acting for or on behalf of BioAgra,
for infringement of any current or future intellectual property
rights based on BioAgra’s use of such methods and processes
or any reasonable modifications thereof exclusive of any patent
that may issue from the aforementioned.
4.
PBI’s Right to Manufacture Beta Glucan
. Previous and subsequent to this Agreement, PBI has and
shall continue to have the right to manufacture Beta
Glucan Products utilizing its own PBI Technology, property,
methods, processes and all modifications to
such. BioAgra covenants not to sue PBI, or any agent,
customer, affiliate, representative, distributor, or other person
acting for or on behalf of PBI, for infringement of any current or
future intellectual property rights based on PBI’s use of the
PBI Technology (methods, processes or reasonable modifications
thereof.
5.
BioAgra Shall Have No Right to PBI Technology
. Following the effective termination date of the
Technology License Agreement, BioAgra shall have no right to use
PBI Technology, data or results. BioAgra represents and
warrants that, upon termination of the Technology License
Agreement, it will not utilize, and will not enable others to
utilize, the PBI Technology property, methods, knowhow, processes
and all modifications to such.
6.
BioAgra Shall Return PBI Intellectual Property and Materials
. BioAgra agrees to return all PBI intellectual property
provided and disclosed by PBI and its associated or related
companies. Such intellectual property includes, but is
not limited to, drawings, designs, engineering specifications,
process flow, equipment lists, and items as disclosed in Exhibit A
of the Technology License Agreement. BioAgra shall also
return to PBI all sales and marketing materials provided by PBI and
its associated or related companies, including all materials
relating to PBI’s studies, trials, and testing of Beta
Glucan. BioAgra also shall remove all PBI related
information from the BioAgra website or related
websites. PBI shall provide written instructions to
BioAgra to assist in the implementation of this
section. BioAgra shall make a reasonably diligent effort
to return all such materials to PBI and to remove all PBI materials
from the BioAgra website by July 31, 2007.
7.
General Release by PBI . PBI and its affiliates,
generally and unconditionally release, acquit and forever discharge
BioAgra, and any and all current, former, and future successors,
assigns, officers, directors, shareholders, managers, employees,
attorneys, agents, representatives, affiliates, parent companies,
subsidiaries, and customers from any and all claims, defenses,
demands, causes of action, liability, damages, costs and expenses
arising from or related to the subject matter of the Technology
License Agreement, which they have or may have up through and
including the date of execution of this Agreement, whether such
claims are known or unknown, discovered or undiscovered,
anticipated or
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