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LICENSE AND SUPPLY AGREEMENT
This Agreement (the
“ Agreement ”) is entered into by and between
Plant Health Care, Inc., a Pennsylvania corporation having offices
at 440 William Pitt Way, Pittsburgh PA, 15238 (“ PHC
”), and Eden Bioscience Corporation, a Washington corporation
having offices at 11816 North Creek Parkway N., Bothell, WA 98011
(“ Eden ”) as of February 28, 2007 (the “
Effective Date ”).
BACKGROUND
WHEREAS, PHC owns and
markets certain compositions and products, including, but not
limited to, plant-based fertilizers;
WHEREAS, Eden is a plant
technology company that develops, manufactures and markets harpin
protein-based products for plants and seeds;
WHEREAS, PHC and Eden
entered into that certain Asset Purchase Agreement dated as of
December 1, 2006 (“ Asset Purchase Agreement ”)
whereby PHC will acquire certain assets of Eden at the closing
thereunder;
WHEREAS, it is a condition
to the closing under the Asset Purchase Agreement that the parties
enter into an agreement to provide certain rights and licenses to
Eden on the terms provided for herein; and
WHEREAS, in connection
with and in furtherance of the Asset Purchase Agreement, PHC
desires to grant certain rights and licenses to Eden on the terms
provided for herein.
NOW, THEREFORE, pursuant
to the mutual covenants set forth herein and for other good and
valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows.
AGREEMENT
1. Defined Terms .
For purposes of this Agreement, capitalized terms will have the
meanings set forth in Section 12 or elsewhere herein where the term
is defined.
2. Trademark
License .
2.1 Trademarks .
For the Term and in the Territory, PHC hereby grants to Eden (a) a
royalty-free, exclusive, non-transferable (except as provided at
Section 11.4) license to use the “ Messenger ”,
“ MightyPlant ” and “ Harp-N-Tek
” trademarks and logos set forth on Exhibit A hereto
(the “ Trademark(s) ”) in connection with the
advertising, promotion, distribution, maintenance and sale of the
Products in the Home and Garden Market.
2.2 Reserved Rights
. Eden expressly agrees that (a) neither title nor ownership of the
Trademarks is acquired under this Agreement; and (b) Eden will not
use the Trademarks as part of Eden’s corporate trade name,
trademark or logotype, or permit any third party under Eden’s
control to do so. Eden’s use of any Trademark will inure to
the benefit of PHC.
2.3 Approvals .
Eden will provide to PHC for purposes of review and approval (such
approval not to be unreasonably withheld or delayed) all marketing
materials relating to Products that incorporate the Trademarks at
least twenty (20) days prior to the earlier of commercial
production or release of such materials. Failure by PHC to give
Eden written notice within twenty (20) days after PHC’s
receipt of such marketing materials will constitute PHC’s
approval thereof. The copyright in any such marketing materials
(including, without limitation, any translation, adaptation and/or
modification) will be owned by Eden, subject to PHC’s
Trademark rights.
3. Exclusive Supply
Agreement .
3.1 Supply
Agreement . PHC hereby grants to Eden an exclusive, worldwide
right and license for the Term to sell the Compositions as a part
of the Products in the H&G Market.
3.2 Exclusivity .
Eden’s rights under this Section 3 will be exclusive in the
Territory during the Term. PHC represents and warrants to Eden that
PHC has not entered into any other distribution, supply or sales
representative agreements, written or oral, with any third party
permitting the sale of the Compositions (or any products
incorporating the Compositions) in the H&G Market in the
Territory as of the Effective Date. PHC covenants and agrees that
during the Term, PHC will not enter into any such agreement or
itself sell or distribute the Compositions (or any products
incorporating the Compositions) in the H&G Market in the
Territory or permit any third party to do so. Notwithstanding the
terms of this Section 3.2, PHC will not be precluded from selling
the Compositions to professional landscapers, farmers or plant
nurseries or to businesses that sell to professional landscapers,
farmers or plant nurseries.
3.3 Distribution;
Subdistributors . Eden may sell the Products in the H&G
Market directly or through distributors, resellers or retailers. In
addition, prior to the issuance of the Me Too Registrations
described at Section 4.2 and subject to applicable laws, Eden may
grant supplemental distribution rights under PHC’s Regulatory
Approvals to subdistributors to package and label the Products for
distribution and sale in the H&G Market in the Territory,
provided that (a) any such subdistributor appointment will be
pursuant to a written contract between Eden and the applicable
subdistributor; (b) the terms and conditions of such contract will
comply and be consistent with the terms and conditions of this
Agreement; and (c) Eden will use commercially reasonable efforts to
ensure that such subdistributors comply with the applicable
provisions of this Agreement. Notwithstanding any appointment of
subdistributors pursuant to this Section 3.3, Eden will remain
fully responsible for the performance of all of its covenants and
obligations hereunder, and for such subdistributor’s
compliance with all Eden’s covenants and obligations
hereunder.
3.4 Promotion of the
Products . Eden will not, and will ensure that none of its
subdistributors (a) promote, market, sell or distribute any
Products for use in any jurisdiction within the Territory where any
applicable Regulatory Approval has not been obtained; or (b) make
any representations or warranties concerning the Products on behalf
of PHC. Eden will conduct its business in a responsible and
professional manner so as to enhance the reputation of the Products
in the H&G Market in the Territory.
3.5 Sales Leads .
PHC will forward to Eden all leads for sales of the Products in the
H&G Market in the Territory. Eden agrees to make commercially
reasonable efforts to respond to all leads.
3.6 Purchase Order
Process . PHC will supply the Compositions in quantities
requested by Eden pursuant to Purchase Orders submitted by Eden
from time to time in the form reasonably requested by PHC. No
Purchase Order will be for less than Five Thousand Dollars ($5,000)
unless otherwise agreed to by PHC. Eden agrees to provide to PHC,
on a quarterly basis, a rolling, non-binding annual estimate of
upcoming orders. All Purchase Orders will be subject to the terms
and conditions of this Agreement, and will be expressly limited to
the terms of this Agreement. Except as to quantity and shipping
requirements set forth on each applicable Purchase Order,
additional or contrary terms proposed by either party, whether in
the form of the Purchase Order, invoice, acknowledgement,
confirmation or otherwise, will be inapplicable, and the terms of
this Agreement will control in the event of any conflict between
such terms and the terms of this Agreement. PHC will give Eden
written notice accepting or rejecting each Purchase Order submitted
by Eden in accordance with this Agreement within ten (10) days
after PHC’s receipt of the Purchase Order. If PHC rejects any
Purchase Order submitted by Eden, PHC’s notice of rejection
will specify the reasons for rejection. PHC must accept a Purchase
Order submitted by Eden to the extent the Purchase Order complies
with this Agreement.
3.7 Delivery Terms
. All deliveries by PHC will be to an address in the United States
identified by Eden in the Purchase Order. Upon delivery, title will
pass to Eden and PHC will have no further responsibility or risk of
loss, except as may otherwise be provided in Sections 7 and
8.
3.8 Inspection of
Product . Eden or its representative will inspect all
Compositions promptly upon receipt, and in the event of any
shortage, damage or discrepancy or in the event any of the
Compositions fail to comply with the then Specifications (except
for defects not readily observable by Eden without opening the
packaging thereof), Eden will report the same to PHC within fifteen
(15) days after receipt, in which event Eden will furnish written
evidence or other documentation, as appropriate. If the
substantiating evidence delivered by Eden reasonably demonstrates
that such shortage, damage, discrepancy or nonconformity with
Specifications existed at the time of delivery, Eden may return the
Compositions to PHC at PHC’s expense and, at Eden’s
request and option, PHC will either promptly replace the
Compositions in accordance with the delivery procedures set forth
herein or refund or credit Eden’s account for the full
invoice value, together with any commercially reasonable shipping,
inspection and return costs incurred by Eden. Any Compositions not
rejected by Eden by written notice to PHC within fifteen (15) days
after delivery (other than Compositions containing latent defects
not readily observable by Eden) will be deemed to have been
accepted by Eden. Following acceptance, the sole remedies of Eden
with respect to nonconformities, damage or defects in the
Compositions will be those set forth in Section 7.
3.9 Price . PHC
will supply the Compositions to Eden at a price equal to eighty
percent (80%) of PHC’s actual United States agricultural
distributor price for such Compositions, net of all final rebates
or other allowances given (“ Actual Price ”). If
necessary, PHC will extend price reductions to Eden after delivery
to reflect the difference in the Actual Price and the price
originally invoiced, by providing to Eden the equivalent in value
of free goods or credits against the next Purchase Order placed by
Eden. Upon request, PHC will provide Eden with a written
certification confirming the Actual Price for any order period.
Each party will be responsible for their own taxes, fees, charges
or assessments of any nature levied by any governmental authority
in connection with the transactions under by this
Agreement.
3.10 Payment . PHC
will invoice Eden upon delivery and payment will be due to PHC
within thirty (30) days of the invoice date. Payment will be made
to an address provided by PHC or by wire transfer to an account
designated by PHC. Any wire transfer or other EFT fees are for
PHC’s account. In the event of a dispute with regard to
amounts owing, Eden will timely pay any undisputed amounts and the
parties agree to cooperate in good faith to promptly resolve any
disputed amounts. PHC will have the right to charge Eden a
delinquent payment service charge on the amount of any fees not
paid when due at a rate equal to the lesser of one and one-half
percent (1-1/2%) per month (or portion thereof) or the highest rate
permitted by law, whichever is lower. In the event of any
delinquent payment by Eden, such delinquency will not constitute a
breach of this Agreement, but late fees will accrue and PHC, at its
option, may withhold delivery of any outstanding Purchase Orders
and otherwise suspend PHC’s performance under this Agreement
without liability until payment is received.
4. Registrations and
Regulatory Approvals .
4.1 EPA Filings .
Subject to Sections 4.2 and 4.3 herein, PHC will, at its expense,
maintain all Regulatory Approvals and applications for approval
with the EPA for the Compositions in jurisdictions within the
Territory where they exist as of the Effective Date as set forth at
Exhibit B . Pending issuance of the Me Too Registrations in
accordance with Section 4.2, PHC hereby grants to Eden the right of
distribution under all existing and future registrations for the
Compositions or the Products (the “ Distribution
Rights ”). Eden, at its option and expense, will be
responsible for filings, maintenance and applicable fees for any
non-EPA Regulatory Approvals and all Distribution Rights. In the
event PHC does not hold any Regulatory Approval in a jurisdiction
within the Territory in which Eden desires to obtain such
Regulatory Approvals, Eden may, upon prior written consent from
PHC, which consent will not be unreasonably withheld or delayed,
proceed to seek such Regulatory Approval in Eden’s name, at
Eden’s expense.
4.2 EPA Amendments; Me
Too Registrations . Promptly following the Effective Date, Eden
will, at its own expense, seek New Product Me-Too Fast Track
Registrations (“ Me Too Registration(s) ”) under
applicable EPA regulations for the home and garden applications of
the Compositions. PHC agrees, at its own expense, to cooperate and
assist Eden, as reasonably requested by Eden, in providing access
to and use of the
supporting data for such registrations, together with any
assistance, documentation, certifications, test results or other
information necessary for Eden to undertake such registrations.
Concurrently with the filing of the Me Too Registrations, PHC will,
at its own expense, submit a master label amendment to the EPA to
delete from the existing EPA registrations (a) the home and garden
coverage from each EPA registration label, and/or (b) the inclusion
of home and garden applications in the agricultural sections of
each EPA Composition master label registration. Upon issuance of
the Me Too Registrations, Eden will (a) cease use of the EPA
registrations held in Eden’s name for any new Product
production; (b) modify all future Product labels to reflect the Me
Too Registration numbers issued directly to Eden; and (c) will
undertaken new filings in connection with its Me Too Registrations
to replace any existing registrations for subdistributors appointed
in accordance with Section 3.3.
4.3 Abandonment of
Registration . Notwithstanding Section 4.1, PHC may, at its
option, abandon any Regulatory Approval with respect to a
Composition provided (a) PHC gives advance notice of not less than
ninety (90) days thereof to Eden; and (b) at Eden’s option
and sole cost and expense, PHC assists in transferring ownership of
such Regulatory Approval and supporting data to Eden.
4.4 Labeling . Eden
will be responsible for the content of the labeling for the
Products prior to their distribution and sale into the H&G
Market, in accordance with applicable law.
4.5 Inspection .
Upon prior written notice, PHC will cause Eden’s regulatory
personnel to be provided with reasonable access from time to time
to the facilities and records of PHC related to the Compositions
for the purpose of confirming PHC’s compliance with all
applicable laws and regulations.
4.6 Records and
Recall . In the event of a recall of any of Product as a result
of the inclusion of any Composition, Eden will cooperate with and
assist PHC in effecting such recall. PHC will pay, or reimburse
Eden, for all reasonable out-of-pocket expenses of effecting such
recall of Products distributed by Eden under this Agreement,
including any shipping costs related to returning recalled Products
to PHC and replacing such recalled Products with new Products at
PHC’s expense; provided, however, that if the recall will
have been caused by (a) any component of the Product other than the
Compositions; or (b) any breach of or default under this Agreement
by Eden or any of its subdistributors, then Eden will bear all the
costs and expenses of the recall.
4.7 Export; Import
. Unless otherwise agreed upon by Eden and PHC, all Compositions
will be delivered by PHC to Eden within the United States. Eden
will be responsible for obtaining all import and/or export licenses
and permits as may be required to import and/or export the Products
into and from countries selected by Eden, in accordance with then
prevailing laws and regulations of such countries, and PHC will
cooperate with Eden in its efforts to obtain any such approvals.
All such licenses and permits will be maintained in the name of
Eden, whenever feasible in accordance with prevailing laws and
regulations. PHC will cooperate fully with Eden in its efforts to
obtain any such approvals.
5. Failure of
Supply .
5.1 Failure of
Supply . In the event PHC is unable or unwilling to provide to
Eden any or all of the Compositions on the terms and conditions
provided for in this Agreement within sixty (60) days of any
requested delivery date under a Purchase Order, Eden may, at
anytime during the continuation thereof, declare a Failure of
Supply under the terms of this Section 5. Upon the occurrence of a
Failure of Supply with respect to any Compositions, Eden may, at
its option, select and qualify a Second Source to make the
Compositions for sale to Eden under this Agreement subject to the
following:
(a) within ninety (90)
days after the occurrence of, or anytime during the continuation
of, any Failure of Supply, Eden may give PHC written notice thereof
and of Eden’s desire to select and qualify a Second Source to
make such Compositions for distribution to Eden under this
Agreement;
(b) Eden will be
responsible for the selection of any Second Source and may select
as the Second Source itself or any third party that it reasonably
determines is or will be qualified to effectively make
and deliver applicable Compositions in accordance with all
applicable Regulatory Approvals and other requirements comparable
to those imposed on PHC under this Agreement; and
(c) Eden will promptly
notify PHC of the selection and qualification of any Second Source
(including, without limitation, the name, address and telephone
number of the Second Source, the particular Compositions to be
made, and the qualifications of such Second Source to make such
Compositions). Upon such notification, PHC will cooperate in the
qualification of such Second Source in accordance with any
applicable regulatory authority, including, without limitation, the
EPA.
5.2 License . PHC
hereby grants to Eden a license to the Licensed Intellectual
Property solely to make or have made by a Second Source solely for
Eden, use, distribute, sell, have sold, import and otherwise
commercialize and exploit the Compositions in the Territory
(subject to the terms of this Agreement) during that portion of the
Term after the occurrence of a Failure of Supply with respect to
such Compositions, subject to and in accordance with the
following:
(a) Eden will not exercise
such license until the occurrence of a Failure of Supply with
respect to any Compositions and Eden’s giving the notice
described in Section 5.1(a);
(b) the license includes
the exclusive right to sell, distribute, have sold and otherwise
commercialize and exploit the Compositions as a part of the
Products in the H&G Market in the Territory;
(c) if Eden elects to
purchase Compositions directly from a Second Source then,
notwithstanding any other provision of this Agreement, Eden will be
responsible, and PHC will be relieved of any responsibility, for
assuring that the Compositions are manufactured, packaged and
labeled by the Second Source in accordance with the Regulatory
Approvals;
(d) if the Second Source
is a third party, the license will include a right to sell any
Compositions made pursuant to the license to Eden or its
subdistributors for distribution as a part of the Products in the
Territory under this Agreement, but not the right to sell or
distribute the Compositions to any other party; and
(e) Eden, at its option,
may record evidence of this license with any applicable authorities
in order to confirm and secure the rights hereunder.
5.3 Transition
Support . Upon appointment of a Second Source by Eden following
a Failure of Supply, PHC will provide the following transition
support:
(a) PHC will provide, at
its own expense, reasonable documentation, standard operating
procedures and transition assistance to the Second Source to enable
the Second Source to manufacture and/or supply the Compositions;
and
(b) PHC will provide, at
its own expense, a reasonable quantity of the seed used for
fermentation and development of the Compositions.
5.4 Registrations .
To the extent permitted by applicable regulations, upon a Failure
of Supply, PHC will assist the Second Source in securing all
necessary rights under the Regulatory Approvals.
5.5 Termination of
Failure of Supply . Any Failure of Supply initiated under this
Section 5 may be terminated as follows: (a) at the sole option and
election of Eden, a Second Source may be terminated and the rights
granted under this Section 5 concluded; or (b) upon the mutual
agreement of the parties, PHC may resume production and supply of
the Compositions under the terms of this Agreement and any
corresponding rights of the Second Source will be terminated by
Eden.
6. Intellectual
Property Rights .
6.1 Claims By and
Against PHC . PHC will have (a) the right to assert, or at its
option settle, any claim or suit necessary to enforce its
Intellectual Property rights (including those in the Trademarks)
against any third party; and (b) the right to defend against, or at
its option settle, any patent infringement claim
relating to the Compositions made by any third party against PHC.
PHC agrees to provide Eden with commercially reasonable notice of
each such claim or suit. PHC agrees to use commercially reasonable
efforts to enforce its Intellectual Property in the Compositions
against any third party who PHC determines in its reasonable
judgment (after consultation with Eden) is infringing such
Intellectual Property rights, provided that such infringement is
likely to have a material adverse impact on Eden’s sales of
the Products. PHC will have sole control of the assertion or
defense of any such action, including any appeals, settlement or
compromise thereof, and will have full authority to enter into a
binding settlement or compromise; provided, however, that PHC will
not enter into any settlement or compromise that would obligate or
affect Eden in an adverse manner with respect to its rights under
this Agreement without Eden’s consent, which consent will not
be unreasonably withheld or delayed.
6.2 Claims Against
Eden . PHC will have the option (but not the obligation) to
assume and defend any infringement claim made against Eden based
upon the use of the Trademarks or the Compositions in association
with the Products. Eden will promptly notify PHC of any such claim
and will offer to tender defense thereof to PHC. PHC will promptly
(and in no event later than 30 days after receipt of notice) notify
Eden of its election or non-election to assume the defense of such
claim. In the event PHC elects to assume the defense of and
responsibility for any claim under this Section 6.2, (a) at the
request and expense of PHC, Eden will reasonably assist PHC in the
defense; (b) PHC will have sole control of the defense of any such
action, including any appeals; and (c) PHC will have full authority
to enter into a binding settlement or compromise, provided,
however, that PHC will not enter into any settlement or compromise
that would adversely affect Eden’s rights under this
Agreement without Eden’s consent, which consent will not be
unreasonably withheld or delayed. In the event PHC refuses or fails
to assume any defense under this Section 6.2, Eden may, at its sole
option and expense, defend, settle or otherwise compromise such
claim, provided, however, that Eden will not enter into any
settlement or compromise that would adversely affect PHC without
PHC’s consent, which consent will not be unreasonably
withheld or delayed. PHC agrees to provide, at its own expense, any
assistance reasonably requested by Eden.
6.3 Limitation of
Liability . PHC will have no liability of any kind to Eden
under this Section 6 to the extent any such claim is based solely
upon or arises solely out of (a) any use of any Trademark or
Composition in a manner for which it was not approved, designed or
intended to be used, as specified herein or in its labeling, if and
to the extent such use was promoted by Eden; (b) any modification
of any Trademark or Composition by Eden that causes either of them
to become infringing; or (c) the use of any Composition in a manner
inconsistent with the applicable Regulatory Approvals, if and to
the extent such use was promoted by Eden.
6.4 Replacement
Product . Notwithstanding the foregoing, if it is
adjudicatively determined that a Trademark or Composition
infringes, or, as a result of the Composition, a Product that
incorporates the Composition infringes, or in PHC’s
reasonable opinion is likely to be found to infringe, a third
party’s Intellectual Property rights, or if the sale or use
of such Composition or Product is, as a result, enjoined, then PHC
will exercise commercially reasonable efforts to either (a) procure
for Eden the right under such third party Intellectual Property
rights to sell the Products; or (b) modify the Trademarks or
Compositions, after consultation with Eden, to allow Eden to market
a substitute Product.
6.5 Protection of
Intellectual Property . During the Term, PHC will be
responsible (a) for prosecuting and maintaining all registrations
and applications for the Patents and Trademarks existing as of the
Effective Date; and (b) to the extent it deems necessary or
appropriate, for filing, prosecuting and maintaining any new or
additional Intellectual Property rights associated with the
Compositions.
7. Warranties
.
7.1 Eden Corporate
Warranties . Eden represents and warrants to PHC that the
execution and delivery by Eden of this Agreement and the
performance by Eden of its obligations hereunder have been duly
authorized by all requisite corporate action and to the best of
Eden’s knowledge will not violate any provision of law, any
order of any court or other agency of government, the Articles of
Incorporation or Bylaws of
Eden, as amended, or any provision of any indenture, agreement or
other instrument to which Eden or any of its properties or assets
is bound, or conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any such
indenture, agreement or other instrument, or result in the creation
or imposition of any lien, charge, restriction, claim or
encumbrance of any nature whatsoever upon any of the properties or
assets of Eden. This Agreement has been duly executed and delivered
by Eden and constitutes the legal, valid and binding obligation
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