Master Licence Agreement - Canada and eMerge Vision Systems Inc.
MASTER LICENCE AGREEMENT
ELECTROLYTE THERAPY & INFRA-RED THERMOGRAPHY
BETWEEN:
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
as represented by the Minister of Agriculture and Agri-Food Canada
(LICENCOR)
AND:
eMERGE VISION SYSTEMS INC.
a corporation incorporated under the laws of Delaware;
and having its head office at 10315 102nd Terrance
Sebastian, Florida, United States, 32958
(LICENCEE)
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TABLE OF CONTENTS
------------
MASTER LICENCE AGREEMENT
ELECTROLYTE THERAPY & INFRA-RED THERMOGRAPHY
INTRODUCTION..................................................................
1 DEFINITIONS...........................................................
2 SURRENDER & GRANT OF LICENCE..........................................
Surrender.............................................................
Grant.................................................................
Sub-licencing.........................................................
Canada's Consent......................................................
Sub-licence Conditions................................................
Termination...........................................................
Third Party Obligations - eVS.........................................
Third Party Obligations - Canada......................................
Use of Canadian Corporations..........................................
Disclosure Obligation - Canada........................................
Material Terms........................................................
3 TERM..................................................................
Initial Term..........................................................
Renewal Conditions....................................................
No Dispute...................................................
Dispute /Contingent Renewal Pending ADR......................
4 EXPLOITATION OF LICENCED TECHNOLOGIES.................................
Best Efforts to Commercialize.........................................
Royalty Holiday.......................................................
Start-Up Costs........................................................
Continuing Obligations During Holiday.................................
Patents......................................................
Collaborations...............................................
Research Support Payment.....................................
Fundamental Terms.....................................................
5 ROYALTIES.............................................................
Percentage Royalty of Gross Revenues..................................
Payments Semi-Annually................................................
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Payment Dates.........................................................
Payment Method........................................................
Cheque Requirements...................................................
Payments to Canada after Termination..................................
Attribution of Royalties..............................................
6 IP OWNERSHIP & REPRESENTATIONS........................................
Canada Owns Licenced Technologies.....................................
No Impeachment........................................................
Inimical Use of Confidential Information..............................
Regulatory Rights.....................................................
Inventors Rights......................................................
No Litigation.........................................................
Third Party Rights....................................................
Infringement..........................................................
Patent Coverage & Formula.............................................
US Federal Department of Agriculture (FDA) Regulatory.................
Manufacture..................................................
No Export....................................................
Disclosure by Canada.........................................
Product Claims...............................................
Animal Food..................................................
FDA Problems.................................................
No Misrepresentations........................................
Laboratory Practices.........................................
Material Terms........................................................
7 IMPROVEMENTS, R & D, COLLABORATIONS...................................
Carve Out.............................................................
Licencing of Improvements from Canada's R & D under Carve Out.........
No Competition........................................................
Collaborations Between eVS and Canada.................................
Licencing of Improvements from eVS / Canada Collaborations............
Licencing of Serendipitous Technologies from eVS / Canada
Collaborations...............................................
Third Party Licences Resulting Technology.............................
Improvements Part of Licenced Technologies............................
Discretion to Collaborate.............................................
Either Party Unable / Unwilling to Collaborate........................
Third Party Collaborations............................................
Ownership of Background Intellectual Property.........................
Material Terms........................................................
8 WARRANTIES OF QUALITY.................................................
No Warranties.........................................................
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Disclaimer of Implied Warranties......................................
Third Party Representations...........................................
Disclosure by Canada..................................................
Disclosure & Due Diligence............................................
Confidential Information Without Warranty / No Reliance...............
9 PATENTS...............................................................
Queen Owns All Patents................................................
eVS Discretion to Patent..............................................
eVS Responsibility for Patent Costs...................................
Canada Responsibility for Patent Costs................................
Material Terms........................................................
10 REGULATORY............................................................
Notice to Assist......................................................
Assistance............................................................
Canada's Advisory Board Positions.....................................
Costs of Canada's Advisory Board Members..............................
Regulatory Costs......................................................
Decision to Register..................................................
Registration Ownership................................................
Trademark Use.........................................................
Trademark and Quality Control.........................................
11 AUDITS & QUALITY CONTROL..............................................
Audit Rights and Purposes.............................................
Audit Timing / Process / Cost.........................................
Regulatory Quality Standards..........................................
Contractual Quality Standards.........................................
Spot Audits...........................................................
Material Terms........................................................
12 REPORTS...............................................................
Administrative Meetings...............................................
13 CORPORATE REPRESENTATIONS & WARRANTIES................................
eVS...................................................................
Ability......................................................
Authorization................................................
Enforceable..................................................
Litigation...................................................
Veracity of Statements.......................................
Third Party Representations..................................
Canada................................................................
Authorization................................................
Veracity of Statements.......................................
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Compliance of Laws...........................................
14 PATENT INFRINGEMENT...................................................
Notice ...............................................................
Core Countries........................................................
Canada Defends / Prosecutes...........................................
eVS Co-Counsel........................................................
eVS Assumes Control of Litigation............................
Costs when eVS Assumes Control of Litigation..........................
Canada Controls Payment of Damage / Settlement Terms..................
Canada's Damage Awards Distribution..........................
eVS Defends / Prosecutes..............................................
Non-Core Country Infringement Actions........................
Parties Jointly Police Infringement..........................
15 INDEMNIFICATION.......................................................
Reciprocal for Negligence / Contract Breach...........................
Procedures............................................................
Notice.......................................................
Indemnifying Party Defends...................................
Indemnified Party Defends....................................
Co-operation.................................................
Mutual Consent of Settlement.................................
16 TERMINATION...........................................................
By Canada for Cause...................................................
Trademark Rights Terminated...........................................
Procedure.............................................................
The Company's Duties on Termination...................................
Surviving Obligations.................................................
Surrender of Licence..................................................
17 CONFIDENTIALITY / FIDUCIARY & EQUITABLE REMEDIES......................
Confidentiality Obligations...........................................
Confidentiality Measures..............................................
Distribution by the Receiving Party...................................
Common Law Duty of Confidentiality....................................
Confidentiality Exceptions............................................
Public Domain................................................
Published....................................................
Already Known................................................
Third Party Discloses........................................
Independently Developed......................................
Judicial / Administrative Order..............................
Access to Information.................................................
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Access to Information Disclosure.............................
Fiduciary....................................................
Elements of Fiduciary Relationship...........................
Equitable Relief......................................................
Fundamental Terms.....................................................
18 ALTERNATE DISPUTE RESOLUTION (ADR)....................................
Negotiation...........................................................
Informal Negotiations........................................
Formal Negotiations..........................................
Mediation.............................................................
Direct to Arbitration........................................
Process .....................................................
Location.....................................................
Unsuccessful.................................................
Arbitration...........................................................
Procedure.............................................................
Law, Code & Rules............................................
Tribunal & Jurisdiction......................................
Final & Binding..............................................
Proceedings..................................................
Language.....................................................
Written Communications.......................................
Costs........................................................
Arbitrator's Written Decision................................
Power to Settle..............................................
Adjournment to Empower Representative........................
Deemed Abandonment...........................................
General ADR Conditions................................................
No Litigation................................................
Obligations During Alternate Dispute Resolution (ADR)........
Privilege....................................................
Confidentiality..............................................
ADR Disclosures Not Admissible in Subsequent Proceedings.....
Normally Admissible Evidence.................................
Material Breach..............................................
19 INTENT AND INTERPRETATION.............................................
Entire Agreement......................................................
Pre-Contractual Representations.......................................
Due Diligence Search..................................................
Independent Legal Advice..............................................
No Adverse Presumption in Case of Ambiguity...........................
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Severability..........................................................
Plurality and Gender..................................................
Not a Joint Venture...................................................
Minister Not Fettered.................................................
Federal Legislation...................................................
Right to Legislate....................................................
No Implied Obligations................................................
Access to Information.................................................
Governing Law.........................................................
Waiver................................................................
Contract Always Speaks................................................
Time is of the Essence................................................
Force Majeure.........................................................
Headings..............................................................
Appendices............................................................
20 LEGAL RIGHTS..........................................................
Amendments............................................................
Assignment by Canada..................................................
Sub-Contract Rights...................................................
Assignment............................................................
No Third Party Rights.................................................
Remedies Cumulative...................................................
Mutual Assistance.....................................................
Facsimile Counterparts................................................
21 CROWN GENERAL.........................................................
No Bribes.............................................................
No Share to Members of Parliament.....................................
Public Office Holders.................................................
Compliance with Law...................................................
Disclosure of Master Licence during Due Diligence Audit - eVS.........
Disclosure of Master Licence during Due Diligence Audit - Canada......
Material Terms........................................................
22 NOTICE................................................................
Addresses / Contacts..................................................
Deemed Delivery.......................................................
Change of Address.....................................................
APPENDIX......................................................................
LICENCED TECHNOLOGIES PATENTS.........................................
APPENDIX......................................................................
ARBITRATION RULES.....................................................
APPENDIX......................................................................
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PRE-MIX FORMULATION...................................................
APPENDIX......................................................................
RMS / AGRESEARCH AGREEMENTS...........................................
APPENDIX......................................................................
eVS INFRA RED TECHNOLOGIES............................................
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MASTER LICENCE AGREEMENT
ELECTROLYTE THERAPY & INFRA-RED THERMOGRAPHY
BETWEEN:
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
as represented by the Minister of Agriculture and Agri-Food
("Canada")
AND:
eMERGE VISION SYSTEMS INC.,
a corporation incorporated under the laws of Delaware;
and having its head office at 10315 102nd Terrance
Sebastian, Florida
("eVS")
INTRODUCTION
A. A. Transport and handling stress can cause significant, metabolic and
physiological changes in livestock. Dehydration, low blood and tissue
sugar levels, electrolyte imbalance and thermoregulatory problems
associated with stress can result in live and carcass weight losses, as
well as degraded meat quality;
B. Live weight losses in 500 kg market-weight steers can vary from
approximately 5 kg (1% of body weight) for short-hauled (1-2 hours)
animals to upwards of 50kg (10% of body weight) in long-distance (24 to
48 hours) transported beef animals;
C. Stress during handling and transport can result in dark, firm, dry
(DFD) beef that results in significant discounts for these carcasses by
packers as the DFD meat is discriminated against by most consumers;
D. Stress also results in the loss of intramuscular fat as cattle quickly
mobilize this source of energy while under stress, thereby resulting in
a potential grade loss;
E. Canada has developed, patented and registered an electrolyte therapy
which significantly reduces live weight shrink associated with
transport and handling stress in cattle. This therapy together with all
directly related know-how and any
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directly related trade secrets is referred to herein as "ET". This
supplement has also been shown to significantly reduce the incidence of
DFD carcasses as well as reducing the incidence of grade loss;
F. Canada has also developed and patented a method, and the software
required, to identify cattle that are under physiological stress using
infra-red thermography. This software and method, together with all
directly related know-how and any directly related trades secrets is
referred to herein as "IR". This technology is effective in identifying
stressed animals which are pre-disposed to producing poor quality meat;
G. R and ET are complementary technologies in that IR detects stressed
cattle at various stages in the production cycle while ET is a
restorative which reduces weight and grade loss and the incidence of
poor quality, DFD, meat;
H. ET has been licenced and marketed based on a PRE-MIX and LICENCED
PRODUCT concept.
i) The PRE-MIX consists of the protected formulation of the
essential elements for the electrolyte therapy.
ii) The LICENCED PRODUCT is a mix of a specific quantity of
PRE-MIX and other feed base materials such as corn, barley,
alfalfa, or other carriers (dependent on the livestock and the
medium of delivery, for instance pellets).
In order to ensure maintenance of quality standards as well as protect
the confidentiality of the Pre-Mix formulation, the PRE-MIX is licenced
to a single supplier. Distributers who manufacture and sell the LICENCED
PRODUCT must purchase the PRE-MIX from this sole supplier;
I. Several formulations of the ET for beef cattle are registered in
Canada, and one is in the process of being registered in the U.S.
Formulations for other livestock, such as swine and poultry are being
developed;
J. Although the IR technology has been proven in a pilot setting, it is
recognized that it requires considerable engineering development to
scale-up to a commercial system;
K. Canada has previously licenced selected rights, selected versions and
different territories of the ET and IR and consented to sub-licences of
those licenced rights;
L. An abbreviated version of those licenced selected rights is shown in
the following
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table, fixed approximately at the point when the PARTIES were
negotiating the MASTER LICENCE;
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
1 STS ET United States Exclusive LICENCED Sale & Beef
PRODUCT Distribution cattle
2 STS ET Canada Exclusive LICENCED Manufacture Beef
PRODUCT & Cattle
PRE-MIX
3 Nutri-Charge ET USA Sub-licence LICENCED Non-Excl. Beef
Exclusive PRODUCT & Manufacture, Cattle
Non-exclusive PRE-MIX Excl. Sale &
Distribute
4 RMS ET Canada Sub-licence LICENCED Manufacture Beef
PRODUCT Cattle
5 RMS ET Canada Exclusive LICENCED Manufacture, Beef
PRODUCT Sale & Distribute Cattle
6 AgResearch ET Australia & New Exclusive LICENCED Manufacture, Beef
Zealand PRODUCT Sale & Distribute Cattle
7 STS IR North America Exclusive n/a Manufacture, Beef &
Sale & Distribute Swine
8 Nutri-Charge IR USA Sub-licence n/a Manufacture, Beef &
Sale & Distribute Swine
</TABLE>
M. Discussions with STS Agriventures Ltd. ("STS") and RMS Research
Management Systems, Inc. ("RMS") concerning new licence rights resulted
in new arrangements implemented during the time the PARTIES were
negotiating the . This also resulted in the termination of a
sub-licence.
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N. The following table details the state of agreements prior to signing of
this MASTER LICENCE:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
New STS ET Worldwide Exclusive PRE-MIX Manufacture and All
sale animals
manufacturers of
LICENCED
PRODUCT
1 STS ET U.S. 1) Exclusive LICENCED 1) Sales and Beef
2) Non- PRODUCT & Distribution Cattle
exclusive PRE-MIX 2) Manufacture
LICENCED PRODUCT
3 Nutri-Charge ET U.S. Sub-licence LICENCED 1) Sales and Beef
1) Exclusive PRODUCT & Distribution Cattle
2) Non- PRE-MIX 2) Manufacture
Exclusive LICENCED PRODUCT
5 RMS ET Canada Exclusive LICENCED Manufacture, Sale & Beef
PRODUCT Distribute
6 AgResearch ET Australia & Exclusive LICENCED Manufacture, Sale & Beef
New PRODUCT Distribute
Zealand
New RMS ET Canada Exclusive LICENCED Manufacture Sales & Swine
Pend PRODUCT Distribution
-ing
7 STS IR North Exclusive n/a Manufacture, Sale & Beef &
America Distribute Swine
8 Nutri-Charge IR USA Sub-licence n/a Manufacture, Sale & Beef &
Distribute Swine
</TABLE>
O. eVS is a company whose strength is in commercializing image
technologies, with emphasis on animal science applications. eVS's
affiliated company, Safeguard Scientifics Inc., has considerable
expertise in the development of spin-off companies which commercialize
new technologies;
P. Simultaneously with the execution of this Licence ("MASTER LICENCE"),
eVS is purchasing all of the shares of the capital stock of STS and all
of the partnership interests of Nutricharge, and will thereby take
ownership of the licences previously held by STS and Nutricharge but
not those held by New Zealand Pastoral Agriculture Research Institute
Limited ("AgResearch") and RMS;
Q. As a result of the share purchases identified in recital P, eVS has:
i) the North American rights to manufacture, sell and distribute
IR for beef &
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swine;
ii) the worldwide rights to manufacture, sell and distribute ET in
PRE-MIX format for kingdom animalia; and
iii) the U.S. rights to manufacture, sell, and distribute ET in
LICENCED PRODUCT format for beef cattle.
R. eVS and Canada agreed to a process under which concurrently with the
execution of the MASTER LICENCE:
i) eVS will cause the identified licencees and sub-licencees
assign, transfer and release all their rights, whether under
executed Licence / sub-licence or inchoate, to eVS;
ii) eVS surrenders those rights to Canada; and
iii) Canada and eVS execute the MASTER LICENCE that globally:
a incorporates the then extant rights and obligations;
and
b augments those rights and obligations;
S. Under the MASTER LICENCE, eVS has:
i) an exclusive Licence;
ii) to IR and ET;
iii) worldwide for IR for food animals, including but not limited
to beef & dairy cattle, sheep, swine, elk, bison, deer,
reindeer, ratites (i.e. emus) poultry, rabbit;
iv) worldwide for ET PRE-MIX for Kingdom Animalia; and
v) worldwide for ET sales, manufacture and distribution of the
LICENCED PRODUCT;
a except for Australia, New Zealand and Canada for beef;
and
b except for Canada for swine.
with no right to export the LICENCED PRODUCT into the
territories cited in T(v)(a)(b) above, in which eVS does not
have the right to sell or distribute such LICENCED PRODUCT.
T. The underlying principles of the MASTER LICENCE are that:
i) eVS has commercial freedom with the concomitant obligation to
make all commercially reasonable best efforts to COMMERCIALIZE
the ET and IR;
ii) Canada will receive a royalty from the COMMERCIALIZATION of ET
and IR or either of them or any technology sold or licenced
incorporating either or both of them;
iii) Canada and eVS collaborate on the enhancement of ET and IR;
iv) Canada provides scientific backing to eVS; and
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v) Canada has scientific freedom to continue to conduct research and
development concerning IR and ET with the concomitant obligation to
notify eVS to any IMPROVEMENTS.
NOW THEREFORE in consideration of the premises, the terms and conditions
hereinafter contained and other good and valuable consideration, the receipt of
which is hereby acknowledged by each PARTY, the PARTIES hereto covenant and
agree as follows:
1 DEFINITIONS
1.1 "AFFILIATE" means a subsidiary or corporation controlled (as
defined in the Income Tax of Act of Canada) by eVS, but does
not include a parent or upstream corporation or sister
corporation of eVS or Safeguard Scientifics Inc.
1.2 "COMMERCIALIZATION" or "COMMERCIALIZE" means:
1.2.1 the making, using and sale (and when sold, sold at the
SALES PRICE);
1.2.2 by eVS;
1.2.3 of the LICENCED TECHNOLOGIES;
1.2.4 within the LICENCED TERRITORIES;
1.2.5 within the FIELDS OF USE;
1.2.6 for the commercially reasonable best efforts return
to eVS and Canada in accordance with Article 4
(Exploitation of Licenced Technologies); and includes
1.2.7 eVS obtaining any authorizations or permits that may
be required in order for eVS to legally carry out all
of its activities under this MASTER LICENCE.
1.3 "CONFIDENTIAL INFORMATION" means:
1.3.1 without limitation:
1.3.1.1 all scientific (including INTELLECTUAL
PROPERTY), technical, business, financial,
legal or marketing information; and
1.3.1.2 information that is non-public,
confidential, privileged or proprietary in
nature;
1.3.2 disclosed orally, in writing or by any medium,
electronic or otherwise (and includes, without
limitation, samples, prototypes, specimens and
derivatives);
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1.3.3 during discussions, audits, spot audits, meetings,
tests, demonstrations, correspondence or otherwise;
or any part or portion thereof, related to activities pursuant
to the LICENCE AGREEMENT, irrespective of whether or not such
information is specifically marked confidential or identified
as confidential at the time of disclosure. Notwithstanding the
foregoing any oral disclosures that contain CONFIDENTIAL
INFORMATION may be identified either:
1.3.4 at the time of disclosure as confidential; or
1.3.5 reduced into writing and designated as confidential
within fifteen (15) days of disclosure.
1.4 "CORE COUNTRIES" means:
1.4.1 Canada;
1.4.2 USA;
1.4.3 France;
1.4.4 Denmark;
1.4.5 Germany;
1.4.6 Ireland;
1.4.7 United Kingdom;
1.4.8 Australia; and
1.4.9 New Zealand.
1.5 "DISCLOSING PARTY" or "RECEIVING PARTY" as applicable means
either of the PARTIES who is releasing CONFIDENTIAL
INFORMATION to the other PARTY or is acquiring CONFIDENTIAL
INFORMATION from the other PARTY.
1.6 "ET" means:
1.6.1 the use and formulation of electrolyte therapy (as
invented and practised by the Lacombe Research
Centre) to improve the general health, meat quality
and grading of meat and livestock and other
agricultural, zoological and nutraceutical
applications premised on such electrolyte therapy;
and
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1.6.2 the use and formulation of electrolyte therapy as
claimed in Canadian Patent #2,009,532; US Patent
#5,728,675" and the other patents listed in Appendix
A (LICENCED TECHNOLOGIES PATENTS);
1.6.3 including all directly related know-how and directly
related trade secrets in respect of the matter
identified in subparagraphs 1.6.2 and 1.6.2.
1.7 "ET PENDING PRODUCT" means the ET formula which is the subject
of the US Federal Department of Agriculture's (FDA) Notice of
Claimed Investigations Exemption for a New Animal Drug (INAD).
1.8 "FIELDS OF USE" means the family of agricultural, zoological
or nutraceutical products directly related to ET and IR, more
particularly:
1.8.1 ET as PRE-MIX and LICENCED PRODUCT, for the Kingdom
Animalia in any medium (including without limitation,
liquid, pelletized or cubed); and
1.8.2 IR for food animals, which includes without
limitation: beef and dairy cattle, swine, sheep, elk,
deer, bison, ratites (i.e. emus); reindeer (or
caribou), poultry and rabbit.
1.9 "GROSS REVENUES" means revenues received by eVS (or its
sub-licencees under paragraph 2.3 (Sub-licencing)) after the
two (2) year royalty holiday prescribed by paragraph 4.2
(Royalty Holiday) from the:
1.9.1 the COMMERCIALIZATION (including
without limitation, all transfers, sub-licences,
leases, transfers, distributorships or other
transactions) of the ET and IR or either of them if
only one is being COMMERCIALIZED; and
1.9.2 the COMMERCIALIZATION of any agricultural, zoological
or nutraceutal derivative of, or product that
incorporates in any percentage, ET or IR;
For greater clarity, whenever eVS sells a product
incorporating in any way ET or IR, in a bona fide commercial
transaction the GROSS REVENUES shall be the monies received as
the SALES PRICE in that transaction. Alternatively phrased, in
transactions which do not constitute sub-licences under
paragraph 2.3 (Sub-licencing), in which eVS sells product
derivatives of or incorporating ET or IR, to third parties for
a specified SALES PRICE, including a distributor or other
entity which intends to resell such product, GROSS REVENUES
shall means such SALES PRICE.
1.10 "IMPROVEMENT" means any modification to the LICENCED
TECHNOLOGIES which would infringe the PATENTS for either ET or
IR or otherwise directly modify or directly improve the
LICENCED TECHNOLOGIES:
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1.11 "INTELLECTUAL PROPERTY" means ET and IR; and all directly
related: copyrights, designs, methods and processes, show-how,
know-how, trade secrets; and other intellectual property
rights directly related to the LICENCED TECHNOLOGIES, and for
greater clarity, includes any IMPROVEMENTS.
1.12 "IR" means:
1.12.1 use of infra-red technology (as invented and
practised by the Lacombe Research Centre)
for the determination of general health,
meat quality and grading of meat and
livestock and other agricultural, zoological
and nutraceutical applications premised on
such infra-red technology; as claimed in
Canadian patent #2,099,529; US patent
#5,458,418 & 5,595,44 and the other relevant
patents listed in Appendix A (LICENCED
TECHNOLOGIES PATENTS); and
1.12.2 including all directly related know-how and
directly related trade secrets needed to
exercise the technology claimed in the
PATENTS
but excluding without limitation:
1.12.3 the infra red technology previously created
or owned by eVS and identified in Appendix E
(eVS Infra Red Technologies) and all
improvements thereto not directly derived
from the IR or IMPROVEMENTS;
1.12.4 any other infra red technology or
improvements thereto acquired by eVS or
independently developed by eVS after the
date hereof which is not directly derived
from the IR or IMPROVEMENTS; and
1.12.5 the visual grading system (known as "CVS")
previously created or owned by Canada
including subsequent improvements thereto
which is not directly derived from the IR or
IMPROVEMENTS;.
1.13 "LICENCED PRODUCT" means any livestock or animal ready form of
ET, more particularly
1.13.1 the appropriate mix of a specific quantity
of PRE-MIX and certain feed base materials,
1.3.1.1 which mix is dependent on both the
livestock or animal being treated
and the medium of delivery.
1.14 "LICENCED TERRITORIES" means:
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1.14.1 worldwide for IR;
1.14.2 worldwide for (ET) PRE-MIX;
1.14.3 worldwide for (ET) LICENCED PRODUCT except for:
1.14.3.1 Australia, New Zealand and Canada for
beef; and
1.14.3.2 Canada for swine.
1.5 "LICENCED TECHNOLOGIES " means ET and IR and any IMPROVEMENTS
that eVS elects to licence pursuant to Article 7
(Improvements, R & D, Collaborations).
1.6 "MASTER LICENCE" means this agreement that includes attached
appendices and refers to the whole of this agreement, not to
any particular section or portion thereof.
1.7 "NUTRI-CHARGE AGREEMENTS" means the following licences, as
those agreements stood, as of the date of execution of the
MASTER LICENCE
1.17.1 Sub-Licence Nutri-Charge Agreement dated December 1,
1993, between the parties S.T.S. Agriventures Ltd.
and Nutri-Charge; and
1.17.2 Sub-Licence Detection Technology Agreement dated
December 1, 1993, between the parties S.T.S.
Agriventures Ltd. and Nutri-Charge.
1.18 "PARTY" means any one of the signatories to the MASTER LICENCE
and PARTIES means both of them and their respective employees,
servants and agents.
1.19 "PATENT" means:
1.19.1 the patents listed Appendix A (LICENCED TECHNOLOGIES
PATENTS);
1.19.2 any continuations, divisions, reissues and any
subsequent patents whose priorities are derived from
any of the patents in Appendix A (LICENCED
TECHNOLOGIES PATENTS); and
1.19.3 subsequently patented improvements to the patents in
Appendix A (LICENCED TECHNOLOGIES PATENTS).
1.20 "PATENT OFFICE" means a PATENT OFFICE in any part of the
LICENCED TERRITORIES and PATENT Offices means all of them.
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1.21 "PERIOD ONE" means for each year during any subsisting term of
the MASTER LICENCE the period from 1 January through 30 June
inclusive.
1.22 "PERIOD TWO" means for each year during any subsisting term of
the MASTER LICENCE the period from 1 July through 31 December
inclusive.
1.23 "PRE- MIX" means the protected / confidential formulation of
the essential active ingredients of ET, which when combined
with carriers such as corn constitute the LICENCED PRODUCT as
specified and identified in Appendix "C" (PRE-MIX FORMULATION)
and as claimed in the US patents.
1.24 "SALES PRICE" means the gross price paid by an arms length
purchaser for any LICENCED TECHNOLOGIES sold by eVS or its
authorized sub-licencees. In an non-arms length transaction,
involving an AFFILIATE, Safeguard Scientifics Inc. or a sister
corporation, if the gross price is less than the fair market
value, then, for royalty calculation purposes, the gross price
shall then be deemed to be the fair market value as set by
Canada.
1.25 "SERENDIPITOUS TECHNOLOGIES" are technologies or improvements
that:
1.25.1 do not infringe the PATENTS; and
1.25.2 are created at the Agriculture Canada's Lacombe
Research Centre, Alberta, Canada.
1.26 "STS AGREEMENTS" means the following licences, as those
agreements stood, as of the date of execution of the MASTER
LICENCE:
1.26.1 Exclusive Licence Agreement - NUTRI-CHARGE(R) - dated
October 22, 1993, between Her Majesty the Queen in
Right of Canada, as represented by the Minister of
Agriculture and S.T.S. Agriventures Ltd.;
1.26.2 Amendment to the Exclusive Licence Agreement -
NUTRI-CHARGE(R) - STS dated March 21 1997, between
Her Majesty the Queen in Right of Canada, as
represented by the Minister of Agriculture and S.T.S.
Agriventures Ltd.;
1.26.3 Sub-licence - NUTRI-CHARGE(R) - Agreement dated
December 1, 1993, between S.T.S. Agriventures Ltd.
and Nutri-Charge;
1.26.4 Agreement - NUTRI-CHARGE(R) - dated March 21, 1997,
between Her Majesty the Queen in Right of Canada, as
represented by the Minister of Agriculture and S.T.S.
Agriventures Ltd.;
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1.26.5 Sole Licence Agreement - Detection Technology dated
December 1, 1993, between Her Majesty the Queen in
Right of Canada, as represented by the Minister of
Agriculture and S.T.S. Agriventures Ltd.;
1.26.6 Sub-licence Agreement - Detection Technology - dated
December 1, 1993, between S.T.S. Agriventures Ltd.
and Nutri-Charge; and
1.26.7 Exclusive Licence Agreement - NUTRICHARGE(R) -
between Her Majesty the Queen in Right of Canada, as
represented by the Minister of Agriculture and STS
Agriventures Ltd.
1.27 "TRADEMARK" means the trade name NUTRI-CHARGE(R) which is
owned by Canada for Canada, but does not include that trade
name as owned by:
1.27.1 AgResearch for New Zealand, Australia;
1.27.2 STS Agriventures for the UK & EEC; and
1.27.3 Nutri-charge Partnership for the United States
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2 SURRENDER & GRANT OF LICENCE
Surrender
2.1 eVS hereby surrenders its STS AGREEMENTS and NUTRI-CHARGE
AGREEMENTS to Canada, and Canada accepts the surrender of
those agreements. Thereafter the aforementioned agreements:
2.1.1 shall be of no further force and effect; and
2.1.2 neither PARTY shall have any further liabilities or
obligations under any such agreements
Grant
2.2 Subject to the provisions of this MASTER LICENCE, Canada
grants to eVS an exclusive, fixed term, terminable pursuant to
Article 16 (Termination), royalty bearing licence for:
2.2.1 the COMMERCIALIZATION of the LICENCED TECHNOLOGIES;
and
2.2.2 the TRADEMARK in any jurisdictions for which Canada
owns the TRADEMARK and Canada is free to licence it,
whether such ownership vests in Canada prior to or
subsequent to the execution of the MASTER LICENCE.
Sub-licencing
2.3 eVS is permitted to sub-licence on the same terms and
conditions as the MASTER LICENCE:
2.3.1 AFFILIATES without the consent of Canada; or
2.3.2 non-affiliated or non-controlled parties with the
prior written consent of Canada, which consent shall
not be unreasonably withheld;
granted that in either situation:
2.3.3 the sub-licencee is a reputable party capable of
meeting its obligations under the sub-licence; and
2.3.4 the sub-licence or sub-licencee is in no way
prejudicial to Canada's good faith commercial
interests concerning the COMMERCIALIZATION of the
LICENCED TECHNOLOGIES.
Canada's Consent
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2.4 Canada's consent is required in order to:
2.4.1 avoid any pronounced conflicts of interest with respect to
ongoing planned research or licenced activities by Canada;
2.4.2 avoid any contractual conflicts by Canada; or
2.4.3 allow Canada to know who has access to and are exploiting the
LICENCED TECHNOLOGIES for reasons of feedback to Canada to
allow improvements and development.
Sub-licence Conditions
2.5 Any sub-licence granted by eVS shall:
2.5.1 be royalty-bearing, revocable, without the right to
sub-licence, only within the LICENCED TERRITORIES or
any portion thereof, and only within the FIELDS OF USE
or a subset thereof;
2.5.2 prescribe a royalty against GROSS REVENUES of the
sub-licencee of not less than [ ** ];
2.5.3 the first [ ** ] of any undivided royalty shall be
payable directly to Canada so that Canada is receiving
the same monies as if eVS has conducted the
COMMERCIALIZATION of the LICENCED TECHNOLOGIES rather
than the sub-licencee;
2.5.4 give eVS all rights necessary to strictly monitor and
enforce quality control standards;
2.5.5 be subject to the same obligations and restrictions as
those required of eVS under the MASTER LICENCE;
2.5.6 be copied to Canada within thirty (30) days of
execution; and
2.5.7 not be a de facto assignment.
Termination
2.6 Termination of the MASTER LICENCE shall also terminate any
subsisting sub-licences.
Third Party Obligations - eVS
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2.7 eVS shall honour any obligations Canada has in its licences or
collaboration agreements with RMS and AgResearch including
without limitation
2.7.1 the supply and pricing of ET PRE-MIX;
2.7.2 use of the TRADEMARK; and
2.7.3 rights to improvements to the technologies licenced
under those agreements.
These eVS obligations only apply to the contracts listed in
Appendix D (RMS / AgResearch Agreements). For greater
certainty, the RMS contract for swine ET in Canada shall be
deemed to be an executed contract antecedent in time to the
MASTER LICENCE, notwithstanding its actual date of execution or
effective date.
Third Party Obligations - Canada
2.8 Canada shall not modify or extend the Appendix D Agreements
other than pursuant to the terms of those Appendix D
Agreements. Canada will not agree to renew any such agreement
without offering to eVS the prior right to enter into an
agreement on substantially the same terms and conditions unless
the other contracting party has the right to renew such
agreement.
Use of Canadian Corporations
2.9 eVS agrees that, when it deems such action to be commercially
prudent, it will use Canadian corporations to provide
outsourcing or subcontracting services in connection with the
COMMERCIALIZATION of ET and IR.
Disclosure Obligation - Canada
2.10 Canada shall have a continuing obligation to disclose in a
reasonable manner and time to eVS any new INTELLECTUAL
PROPERTY.
Material Terms
2.11 Paragraphs 2.3 (Sub-licencing) to 2.10 (Disclosure Obligation -
Canada) are material terms of the MASTER LICENCE.
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3 TERM
Initial Term
3.1 Subject to paragraph 3.2 (Renewal Conditions) and Article 16
(Termination) the term of the MASTER LICENCE shall be twenty
(20) years from the date of execution.
Renewal Conditions
3.2 eVS shall have the right to elect to renew after the initial
term for five (5) year terms, so long as:
No Dispute
3.2.1 eVS is not in breach of the extant MASTER LICENCE; or
Dispute /Contingent Renewal Pending ADR
3.2.2 if at the time of an automatic renewal, there is an
outstanding dispute or disputes between the PARTIES
that has been articulated and referred to negotiation,
paragraph 18.2 (Formal Negotiations) or in mediation,
paragraph 18.3 (Mediation) or in arbitration, paragraph
18.8 (Arbitration) as the case may be, then the MASTER
LICENCE shall contingently renew until the dispute is
resolved under the dispute resolution mechanisms
prescribed under Article 18 (Alternate Dispute
Resolution (ADR)).
3.2.2.1 If the resolution of the dispute determines
that eVS has committed an act of termination
as defined in Article 16 (Termination), then
Canada shall elect either to:
3.2.2.1.1 allow the renewal to vest; or
3.2.2.1.2 terminate the MASTER LICENCE,
subject to any cure periods.
3.2.2.2 If the resolution of the dispute determines
that eVS was not or is not in breach of the
MASTER LICENCE, then the renewal of the
MASTER LICENCE shall vest.
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4 EXPLOITATION OF LICENCED TECHNOLOGIES
Best Efforts to Commercialize
4.1 During the term (or the renewal) of the MASTER LICENCE, eVS
shall:
4.1.1 use its commercially reasonable best efforts to
COMMERCIALIZE the LICENCED TECHNOLOGIES; and
4.1.2 not do, or assist anyone to do, anything inimical to
the COMMERCIALIZATION of the LICENCED TECHNOLOGIES or
TRADEMARK.
Royalty Holiday
4.2 Notwithstanding paragraph 4.1 (Best Efforts to Commercialize),
because:
4.2.1 ET requires regulatory approvals for each of the
different products;
4.2.2 as of the date of the execution of the MASTER LICENCE,
IR is not sufficiently developed for COMMERCIALIZATION
due to software and hardware issues; and
4.2.3 acquisition, start-up, marketing, manufacturing costs
are substantial and well in excess of one million
dollars US ($1,000,000).
eVS shall have a two (2) year royalty holiday from the date of
execution of the MASTER LICENCE in order to obtain the
necessary regulatory approvals, mature the IR for market and
preserve capital for COMMERCIALIZATION purposes.
Start-Up Costs
4.3 If Canada requires broad details of the costs cited in
sub-paragraph 4.2.3 (Royalty Holiday), then eVS shall provide
those details sufficient to satisfy Canada's need and
motivation for such details. Such information is deemed to be
CONFIDENTIAL INFORMATION because of the highly sensitive
financial and marketing intelligence contained therein.
Continuing Obligations During Holiday
4.4 The royalty holiday under paragraph 4.2 (Royalty Holiday), does
not relieve eVS of its obligations to:
Patents
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4.4.1 apply for, register, prosecute, secure and maintain
PATENTS as further prescribed in Article 9 (Patents);
Collaborations
4.4.2 fund collaborations concerning ET and IR as prescribed
in Article 7 (Improvements, R & D, Collaborations); and
Research Support Payment
4.4.3 pay twenty thousand dollars US ($20,000) to Canada at
the first anniversary of the execution of MASTER
LICENCE towards a research support agreement for
research purposes designated solely by Canada which may
or may not involve the LICENCED TECHNOLOGIES.
Fundamental Terms
4.5 Paragraph 4.1 (Best Efforts to Commercialize) is a fundamental
term of the MASTER LICENCE.
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5 ROYALTIES
Percentage Royalty of Gross Revenues
5.1 eVS shall pay a royalty to Canada of [ ** ] of GROSS REVENUES.
Payments Semi-Annually
5.2 The royalties under paragraph 5.1 (Percentage Royalty of Gross
Revenues) shall be payable semi-annually to Canada.
Payment Dates
5.3 eVS shall calculate the royalties for PERIOD ONE and PERIOD TWO
each year.
5.3.1 The payment related to PERIOD ONE, which shall be
estimated and based upon unaudited financial
statements, shall be made on or about 31 July each
year.
5.3.2 The payment related to PERIOD TWO, which shall be based
upon audited year-end financial statements and
adjusted, if necessary, to reflect actual royalties
earned in PERIOD ONE, shall be made on or before 15
March each year.
Payment Method
5.4 Cheques for the payment of royalties shall be in US funds and
made payable to the "Receiver General for Canada". They shall
be sent to:
Director
Agriculture and Agri-Food Canada
Lacombe Research Centre
6000 C&E Trail
Lacombe, Alberta
T4L 1W1
Cheque Requirements
5.5 Each cheque shall be accompanied by a statement bearing the
Financial Coding of this MASTER LICENCE and the LICENCED
TECHNOLOGIES name/identification, and showing the period
covered, the total sales, the royalty applicable and the total
royalty paid.
Payments to Canada after Termination
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5.6 eVS shall pay to Canada any sums due and payable under the
MASTER LICENCE, whether incurred prior to termination or after,
in accordance with Article 16 (Termination).
Attribution of Royalties
5.7 eVS shall use its commercially reasonable best efforts to
identify how much of the aggregate annual royalties are
attributable to each of ET or IR. This information will be
disclosed to Canada at the same time the PERIOD TWO payment is
made.
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6 IP OWNERSHIP & REPRESENTATIONS
Canada Owns Licenced Technologies
6.1 eVS agrees and is estopped from alleging otherwise, that:
6.1.1 subject to the provisions of paragraph 7.12 (Ownership
of Background Intellectual Property) the LICENCED
TECHNOLOGIES, its creation, discovery, development and
every matter relating thereto, forming part thereof and
arising therefrom, are vested in and are the sole
property of Canada;
6.1.2 subject to the provisions of paragraph 7.12 (Ownership
of Background Intellectual Property) ownership and all
rights to, related to, connected with or arising out of
the foregoing, including without limitation, PATENTS,
INTELLECTUAL PROPERTY and copyright in and the right to
produce and publish or cause to be produced and
published all information material and documents, and
the right to issue a licence, are vested in and are the
sole property of Canada;
6.1.3 eVS shall have no rights in and to the foregoing except
as may be expressly granted in the MASTER LICENCE and
eVS shall not apply for any pertinent or other right
and shall not divulge or disclose, without the prior
written consent of Canada, any information, material or
documents concerning same or make available in any way
or use the LICENCED TECHNOLOGIES except as expressly
provided in this MASTER LICENCE;
6.1.4 Canada is the exclusive owner of the TRADEMARK and all
goodwill associated therewith, and any unauthorized use
of the TRADEMARK is an infringement of Canada's rights;
and
6.1.5 eVS acquires no right, title or interest in the
TRADEMARK, and eVS shall not in any manner represent
that it has any ownership interest in the TRADEMARK or
applications or registrations therefor.
No Impeachment
6.2 eVS shall neither impeach or otherwise attack, directly or
indirectly, the PATENTS the TRADEMARK or any INTELLECTUAL
PROPERTY rights held by Canada in the LICENCED TECHNOLOGIES nor
assist any third party to do the same, except where prohibited
by law.
Inimical Use of Confidential Information
6.3 Notwithstanding prohibition in paragraph 6.2 (No Impeachment),
eVS shall not use any CONFIDENTIAL INFORMATION obtained from
Canada in the negotiation of the
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MASTER LICENCE, under due diligence searches or otherwise
related to this MASTER LICENCE in any manner that violates eVS
rights and obligations under the MASTER LICENCE and is inimical
to the interests of Canada.
Regulatory Rights
6.4 Canada represents to the best of its knowledge that any
regulatory rights to the LICENCED TECHNOLOGIES are as follows:
6.4.1 STS Agriventures Ltd. owns the registration for Canada
for five ET products for beef cattle;
6.4.2 Nutricharge Partnership is in the final stages of the
process of getting ownership for one ET product for
beef cattle in the USA;
6.4.3 Canada is in the process getting ownership for one ET
product in Canada for swine; and
6.4.4 Agriventures STS Ltd. has obtained a registration for
one ET product beef cattle in UK and EEC, which
registration does not provide proprietary rights.
Inventors Rights
6.5 Canada has obtained an enforceable written assignment from each
named inventor, and the proper inventors have been identified
in the PATENTS. Canada has provided to eVS true and correct
copies of each such assignment.
6.6 To the best of Canada's knowledge the PATENTS both constitute a
valid and enforceable right of Canada and do not infringe or
conflict with the rights of any other person. To the best of
Canada's knowledge, Canada has no obligation to compensate any
non-governmental third parties in order to use the LICENCED
TECHNOLOGIES other than:
6.6.1 as prescribed under the Public Servants Inventions Act,
pursuant to which payments are carved from any
royalties received by Canada for the use of the
LICENCED TECHNOLOGIES;
6.6.2 a carve out of any royalty stream of Canada's
attributable to the use of technology arising out of a
collaboration with the Alberta Pork Producers
Development Corporation, which collaboration was
terminated on 1 July 1994, and which carve shall, as
between the PARTIES, be Canada's sole responsible.
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No Litigation
6.7 As of the date of execution of the MASTER LICENCE, to the best
of Canada's knowledge, there is no threatened suit, action,
claim, arbitration, grievance, litigation, administrative or
legal or other proceeding, or investigation, against Canada or
its licencees contesting the validity of, or Canada's rights to
use, any of the LICENCED TECHNOLOGIES.
Third Party Rights
6.8 Except for:
6.8.1 the licences listed in Appendix D ("RMS / AgResearch
Agreements);
6.8.2 the right to conduct research concerning the LICENCED
TECHNOLOGIES; and
6.8.3 the regulatory rights listed in paragraph 6.4
(Regulatory Rights);
as of the date of execution of the MASTER LICENCE, Canada has
not granted any commercial licence or other commercial right to
use, in any manner, any item of the LICENCED TECHNOLOGIES
whether or not requiring the payment of royalties.
Infringement
6.9 To the best of Canada's knowledge, as of the date of execution
of the MASTER LICENCE, no person or entity is infringing upon
any of Canada's rights to the PATENTS. To the best of Canada's
knowledge, Canada's use of the PATENTS prior to the date of
this MASTER LICENCE does not infringe, and has not infringed,
the rights of any third party. Canada has not received any
formal notice of infringement upon, misappropriation of any
asserted right of any third party, and to the best of Canada's
knowledge, there is no basis for any such notice.
Patent Coverage & Formula
6.10 Canada represents and warrants that:
6.10.1 the confidential formulation of the PRE-MIX as
identified in Appendix "C" in particular
NUTRI-CHARGE(R) MR (market-ready) and NUTRI-CHARGE(R)
ON (over- night), but excluding NUTRI-CHARGE(R) TM
(tank mixable) are within at least one claim on the US
patents;
6.10.2 this formulation, as adapted for a particular species
or medium of delivery, was disclosed under licence to
STS Agriventures Ltd. and Nutricharge (a limited
partnership) for regulatory registration.
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US Federal Department of Agriculture (FDA) Regulatory
Manufacture
6.11 As of the date of execution of the MASTER LICENCE, to the best
of Canada's knowledge, its licencee for the US territory,
Nutricharge, manufactured ET PENDING PRODUCT in full compliance
with FDA good manufacturing practice requirements.
No Export
6.12 As of the date of execution of the MASTER LICENCE, Canada has
not exported PRE-MIX or LICENCED PRODUCT to the USA, and to the
best of Canada's knowledge, none of Canada's licencees have
exported PRE-MIX or LICENCED PRODUCT to the USA.
Disclosure by Canada
6.13 As of the date of execution of the MASTER LICENCE, Canada has
made its best efforts to discuss, satisfy inquiries, locate and
disclose to eVS or its agents, all documents or other
information in Canada's possession concerning communications to
or from the FDA or prepared by the FDA, concerning the ET
PENDING PRODUCT, and the related FDA regulatory requirements
for new animal drugs.
Product Claims
6.14 As of the date of execution of the MASTER LICENCE, Canada has
agreed with the FDA as to a protocol to prove the following
claims concerning the ET PENDING PRODUCT:
6.14.1 increased dressing percentage;
6.14.2 reduced proportions of dark cutter which are animals
with low muscle glycogen and high pH;
6.14.3 reduced mobility of intra-muscular fat resulting in a
higher marbling score;
As evidenced by FDA memo dated 28 June 1996, an FDA letter 29
September 1997.
Animal Food
6.15 As of the date of the execution of the MASTER LICENCE, to the
best of Canada's knowledge, the ET PENDING PRODUCT meets all
FDA requirements for use as a
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non-human animal food. For greater clarity, Canada has not
assessed the ET PENDING PRODUCT with respect to the American
Association of Feed Control Officials (AAFCO).
FDA Problems
6.16 As of the date of execution of the MASTER LICENCE, Canada is
not currently aware of any issues or problems that would
significantly delay or prevent FDA approval of a new animal
drug application for the ET PENDING PRODUCT, with the exception
of clinical trial results which are the subject of the report
entitled "Investigator Final Study Report, INAD, 9267-0-0004".
No Misrepresentations
6.17 As of the date of execution of the MASTER LICENCE, Canada has
not, and to the best of Canada's knowledge, Her authorized
agents and licencees have not,
6.17.1 made any untrue statements of a material fact or
fraudulent statement to the FDA;
6.17.2 deliberately failed to disclose a fact requirement to
be disclosed to the FDA; and
6.17.3 paid any bribe or illegal gratuities or committed any
deceptive act to or upon the FDA.
Laboratory Practices
6.18 Canada has conducted itself with respect to ET and IR under
good laboratory practices, but Canada has not knowingly
conducted itself in accordance with any good laboratory
practices prescribed by a statute or regulation of another
nation.
Material Terms
6.19 Article 6 (IP Ownership & Representations) is a material term
of the MASTER LICENCE.
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7 IMPROVEMENTS, R & D, COLLABORATIONS
Carve Out
7.1 Notwithstanding any other provision of this MASTER LICENCE,
Canada shall retain from the MASTER LICENCE any and all rights
necessary for research and development both:
7.1.1 to improve ET and IR; and
7.1.2 to pursue research and development directly or
indirectly related to ET and IR.
Licencing of Improvements from Canada's R & D under Carve Out
7.2 If IMPROVEMENTS arise from research conducted by Canada at the
Lacombe Research Centre under paragraph 7.1 (Carve Out), and
7.2.1 those IMPROVEMENTS are exclusively owned by Canada; or
7.2.2 there are no pre-emptory or third party rights to those
IMPROVEMENTS under pre-existing agreements concerning
IR or ET;
then those IMPROVEMENTS shall be licenced exclusively to eVS
under the MASTER LICENCE upon notification by Canada of such
IMPROVEMENTS and acceptance of same by eVS in writing within
one hundred and eighty (180) days of the notification. Any
SERENDIPITOUS IMPROVEMENTS arising from research conducted by
Canada under paragraph 7.1 (Carve Out) shall not be covered by
the MASTER LICENCE.
No Competition
7.3 Canada shall not COMMERCIALIZE ET or IR or any IMPROVEMENTS,
but nothing in this obligation shall derogate or diminish
Canada's right to conduct research and development as
contemplated in paragraph 7.1 (Carve Out).
Collaborations Between eVS and Canada
7.4 eVS and Canada shall each have the option to be a collaborator
with the other in any projects concerning IR or ET. If the
PARTIES agree to such a collaboration, then eVS and Canada
(through the Lacombe Research Centre) shall support on a
case-by-case, mutually agreed upon basis, such collaborations
in cash or in kind, or both. Each PARTY shall thereafter
provide the other PARTY with periodic progress reports
regarding the status of the collaboration as provided for in
the applicable collaboration agreement.
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Licencing of Improvements from eVS / Canada Collaborations
7.5 Any IMPROVEMENTS produced in any collaboration between eVS and
Canada (Lacombe Research Centre) pursuant to paragraph 7.4
(Collaborations Between eVS and Canada) shall be licenced
exclusively to eVS under the MASTER LICENCE after notification
by Canada of such IMPROVEMENT and acceptance of same by eVS in
writing within one hundred and eighty (180) days from such
notification. The IMPROVEMENTS shall be owned by Canada unless
eVS brought technology into the collaboration which was crucial
to the collaboration in which case the resulting technology
shall be jointly owned in proportion to the values of the
technologies brought by the PARTIES.
Licencing of Serendipitous Technologies from eVS / Canada
Collaborations
7.6 After notification by Canada of any SERENDIPITOUS TECHNOLOGIES
produced in any collaboration between eVS and Canada pursuant
to paragraph 7.4 (Collaborations Between eVS and Canada), eVS
shall have an option (exercisable in writing within one hundred
and eighty (180) days from the aforementioned notification) to
exclusively licence those SERENDIPITOUS TECHNOLOGIES, on
reasonable commercial terms which terms shall include a
commercially reasonable best efforts to COMMERCIALIZE
obligations. The SERENDIPITOUS TECHNOLOGIES resulting from the
collaboration shall be owned by Canada unless eVS brought
technology into the collaboration which was crucial to the
collaboration in which case the resulting technology shall be
jointly owned in proportion to the values of the technology
brought by the PARTIES.
Third Party Licences Resulting Technology
7.7 If under paragraph 7.6, (Licencing Serendipitous Technologies
from eVS / Canada Collaborations)
7.7.1 eVS funds a collaboration but does not exercise any
rights to licence any technology resulting from that
collaboration; and
7.7.2 Canada commercializes that resulting technology with a
third party;
then eVS shall be entitled to a portion of any consideration
payable under the licence with the third party in an amount to
be agreed upon by the PARTIES, which may be determined in part
by considering each PARTY's contribution to the collaboration.
Improvements Part of Licenced Technologies
7.8 For greater clarity, if eVS elects to licence IMPROVEMENTS,
pursuant to any or all of:
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7.8.1 paragraph 7.2 (Canada's R & D under Carve Out);
7.8.2 paragraph 7.5 (eVS / Canada Collaborations); and
7.8.3 paragraph 7.6 (Serendipitous Technologies from eVS /
Canada Collaborations);
then such IMPROVEMENTS shall be deemed to be included in the
definition of LICENCED TECHNOLOGIES of ET or IR, as applicable.
Discretion to Collaborate
7.9 Collaborations pursuant to paragraph 7.4 (Collaborations
Between eVS and Canada) shall be conducted subject to the
discretion of Canada and eVS (as applicable), factoring in,
amongst other factors:
7.9.1 research planning priorities;
7.9.2 mandate;
7.9.3 pre-existing contractual obligations;
7.9.4 scarcity of resources & personnel;
7.9.5 Ministerial prerogative; and
7.9.6 commercial needs / priorities / time constraints.
Either Party Unable / Unwilling to Collaborate
7.10 If either PARTY is unable or unwilling to collaborate or
conduct a collaboration pursuant to paragraph 7.4
(Collaborations Between eVS and Canada) due to reasons
contemplated in paragraph 7.9 (Discretion to Collaborate) then
the other PARTY may enter into a collaboration with a third
party, subject to the applicable criteria in paragraph 7.11
(Third Party Collaborations).
Third Party Collaborations
7.11 When the PARTIES enter into third party collaboration, as
prescribed in paragraph 7.10 (Either Party Unable / Unwilling
to Collaborate), Canada and eVS shall:
7.11.1 disclose to the other the nature of the collaboration
prior to the start of the project;
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7.11.2 determine if the third party would collaborate with
Canada or eVS as the case may be;
7.11.3 ensure that if Canada or eVS (as applicable) do not
actively participate in collaborative project, then the
project shall be subject to any necessary
confidentiality restrictions and third party approvals
necessary to protect the CONFIDENTIAL INFORMATION of
either Canada or eVS;
7.11.4 supply candid, timely and complete disclosure of the
findings, results and their impact, potential or
otherwise, on ET or IR notwithstanding any
confidentiality strictures, to Canada or eVS (as
applicable);
7.11.5 ensure that eVS or Canada, as the case may be, are
signatories to any third party collaborations, even
though eVS or Canada are not actively participating in
the third party collaboration; and
7.11.6 if Canada is an active PARTY to a third party
collaboration and eVS is not, Canada will use its best
efforts to ensure that any IMPROVEMENTS resulting from
such third party collaborations are licenced to eVS
under the MASTER LICENCE.
For greater clarity, pursuant to subparagraph 7.11.5 (Third
Party Collaborations), the PARTIES agree that each must deliver
an executed signature page to any third party agreement within
thirty (30) days of the receipt of the execution copy of such
agreement.
Ownership of Background Intellectual Property
7.12 Any IMPROVEMENTS solely discovered, created, assigned to,
licenced or otherwise bought by Canada or eVS remain the
property of the PARTY that discovered, created or bought that
IMPROVEMENT. Any jointly discovered, created or bought
IMPROVEMENTS shall be jointly owned in the ratio which may be
determined by the collaboration, contribution or purchase.
Material Terms
7.13 eVS's obligations under this Article are material terms of the
MASTER LICENCE.
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8 WARRANTIES OF QUALITY
No Warranties
8.1 Other than as explicitly stated in the MASTER LICENCE, Canada
makes no warranties, express or implied, of any nature, for the
LICENCED TECHNOLOGIES including without limitation:
8.1.1 merchantability;
8.1.2 fitness for any or a particular purpose;
8.1.3 commercial utility;
8.1.4 latent or other defects;
8.1.5 infringement or non-infringement of PATENTS or other
third party rights;
8.1.6 conformity with the laws of any jurisdictions; or
8.1.7 fitness for eVS's corporate objectives.
Disclaimer of Implied Warranties
8.2 No legal or equitable warranties implied by law or convention
under any domestic, foreign or international legal regime shall
apply to the MASTER LICENCE. eVS acknowledges this disclaimer
and is estopped from relying on any such warranties against
Canada.
Third Party Representations
8.3 eVS shall not represent to any sub-licencee the existence of
any warranty concerning the LICENCED TECHNOLOGIES unless such
warranty is explicitly stated in the MASTER LICENCE.
Disclosure by Canada
8.4 As of the date of execution of the MASTER LICENCE, Canada has
made its best efforts to locate and disclose to eVS all
relevant information, studies, publications in Canada's
possession or control concerning:
8.4.1 any regulatory processes;
8.4.2 the use, safety and effectiveness of the PATENTS; and
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8.4.3 the safety for consumption by animals that have been
treated by the PATENTS;
for the purposes originally contemplated under the MASTER
LICENCE. To the best of Canada's knowledge all of the
aforementioned information, studies, and publications are true
and correct in all material respects and omit no material facts
the absence of which renders the studies misleading.
Disclosure & Due Diligence
8.5 eVS acknowledges that:
8.5.1 eVS has conducted a due diligence search of all matters
relevant to the LICENCED TECHNOLOGIES, the PATENTS and
the MASTER LICENCE;
8.5.2 eVS has had an opportunity to confer with Canada and
receive satisfactory answers from Canada; and
8.5.3 Canada makes no representation that all the
characteristics both favourable and unfavourable have
been identified.
Confidential Information Without Warranty / No Reliance
8.6 Except for the representations of Canada in the MASTER LICENCE,
8.6.1 eVS shall not rely in any way on the accuracy or
completeness of any CONFIDENTIAL INFORMATION or other
information provided by Canada under the MASTER
LICENCE;
8.6.2 any use of such CONFIDENTIAL INFORMATION shall be at
eVS sole risk and expense; and
8.6.3 any CONFIDENTIAL INFORMATION provided to eVS by Canada
is without any warranty or guarantee of any kind
whatsoever.
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9 PATENTS
Queen Owns All Patents
9.1 The PARTIES agree that all PATENTS shall be in the name of "Her
Majesty the Queen in Right of Canada as represented by the
Minister of Agriculture and Agri-Food Canada" except in those
instances of joint inventions as contemplated in Article 7
(Improvements, R & D, & Collaborations) in which case such
patents shall be in joint names.
eVS Discretion to Patent
9.2 eVS shall have discretion as to the jurisdictions in which it
seeks patent protection.
eVS Responsibility for Patent Costs
9.3 eVS shall be responsible for all future fees related to present
and future PATENT applications, registration, prosecution and
maintenance for:
9.3.1 all PATENTS in existence at the time of the execution
of the MASTER LICENCE, irrespective of whether or not
eVS deems those extant PATENTS necessary; and
9.3.2 patents deemed necessary by eVS and Canada, or by eVS
only.
Canada Responsibility for Patent Costs
9.4 Canada shall be responsible for all fees for patent
applications that:
9.4.1 are initiated after the execution of the MASTER
LICENCE; and
9.4.2 deemed necessary by Canada alone.
Material Terms
9.5 eVS's obligations under this Article are material terms of the
MASTER LICENCE.
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10 REGULATORY
Notice to Assist
10.1 Canada shall assist eVS to obtain any required regulatory
approvals in the CORE COUNTRIES and as necessary elsewhere, for
the COMMERCIALIZATION of ET and IR. Such assistance shall be
provided after receipt of advance notice by Canada from eVS.
eVS shall use its best efforts to provide advance notice to
Canada to enable resource planning and allocation, which notice
in any event shall be given not less than two (2) weeks prior
to the date on which Canada's assistance is needed.
Assistance
10.2 This assistance shall include without limitation:
10.2.1 educating eVS personnel or clients in the technology in
support of hearings or registration trials;
10.2.2 making scientists familiar with the technology
available for hearings or registration trials;
10.2.3 disclosing scientific reports (under appropriate
confidentiality strictures when applicable);
10.2.4 establishing / disclosing protocols; and
10.2.5 scientific support.
eVS acknowledges that when possible, third parties will be used
to provide the said assistance in order to preserve and best
utilize Canada's scientific resources. Such assistance will be
provided by Canada subject to:
10.2.6 scarcity of scientific resources and personnel;
10.2.7 pre-existing contractual obligations;
10.2.8 research and development priorities; and
10.2.9 time constraints.
In the event third parties cannot be utilized, Canada shall
render the necessary support to eVS within a reasonable period
of time as mutually agreed to by the parties taking into
account the foregoing after receipt of sufficient advance
notice pursuant to paragraph 10.1 (Notice to Assist).
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Canada's Advisory Board Positions
10.3 Canada shall have up to two positions on any scientific
advisory boards used by eVS regarding ET and IR
COMMERCIALIZATION. Canada shall ensure that, as applicable, the
Director of the Lacombe Research Centre (or the Director's
designate) and one of its scientists who is most conversant
with IR or ET shall be Canada's nominees. Canada's scientist
position on any advisory boards will be filled on a revolving
basis as required.
Costs of Canada's Advisory Board Members
10.4 eVS shall pay all travel, accommodation and victualing and
incidental costs for Canada's members to travel for regulatory
or advisory board purposes at rates:
10.4.1 not to exceed those prescribed by the Treasury Board of
Canada for civil servants where those costs are
incurred before notice or approval of the
aforementioned costs by eVS; or
10.4.2 at the rates in accordance with the policies and
procedures of eVS then in effect when the
aforementioned costs are approved in advance by eVS;
but salary and related expenses shall be borne by Canada.
Regulatory Costs
10.5 eVS shall be solely responsible for any and all regulatory
costs, applicable in any jurisdiction, including without
limitation: professional fees, consultant costs, trial costs,
government fees, levies and charges. For greater clarity and
without restricting the generality of the foregoing, eVS shall
not be responsible for infringement or litigation costs, other
than as prescribed under Article 14 (Patent Infringement).
Decision to Register
10.6 eVS shall be responsible, upon consultation with Canada, for
determining if a product is to be registered under any
regulatory regime, as well as the nature of the registration.
Should eVS decide not to register, with or without claims,
Canada may independently pursue registration at Canada's own
cost.
Registration Ownership
10.7 Registrations shall vest in the name of the PARTY that paid for
the registration. Any registrations in the name of eVS shall be
as soon as practicable assigned,
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transferred or licenced to Canada, for one dollar, upon the
expiration or termination of the MASTER LICENCE.
Trademark Use
10.8 eVS shall:
10.8.1 use the TRADEMARK only in the manner and form
prescribed by Canada in accordance with the reasonable
standards and specifications of Canada;
10.8.2 observe such reasonable requirements with respect to
trademark notices and other forms of marking as Canada
from time to time may, in its sole discretion, direct
and communicate to eVS; and
10.8.3 indicate clearly when using the TRADEMARK that the
TRADEMARK is owned by Canada and that the TRADEMARK is
being used by eVS under a licence from Canada.
Trademark and Quality Control
10.9 eVS shall only use the TRADEMARK in the territories for which
Canada is the owner and only in association with ET which
conforms in nature and quality and are produced or performed by
eVS in compliance with the contractual and regulatory standards
as prescribed in Article 11 (Audits & Quality Control).
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11 AUDITS & QUALITY CONTROL
Audit Rights and Purposes
11.1 Canada shall have the right to audit eVS and examine eVS's
records, documentation and data related to the
COMMERCIALIZATION of ET and IR in ensure compliance with all
terms of the MASTER LICENCE and protection of the TRADEMARK.
Audit Timing / Process / Cost
11.2 Such audits will be conducted during the 2nd quarter of any
fiscal year after the completion of the preceding years annual
audit. The audit will be conducted during normal business hours
following reasonable written notice. Canada shall have the
option to use the independent auditors of eVS to conduct the
forensic royalty audit. If there is a five percent (5%) or more
deficiency in royalty payment uncovered by the forensic arm of
the independent auditors of eVS, then in addition to
immediately paying the deficiency, eVS shall pay Canada's
costs, if any, in conducting the audit.
Regulatory Quality Standards
11.3 eVS shall use its best efforts to ensure that all ET and IR
processes or products meet or exceed any contractual (pursuant
to paragraph 11.4 - Contractual Quality Standards), regulatory
or statutory standards. eVS shall contractually require the
same compliance from its contractors, sub-contractors or
sub-licences.
Contractual Quality Standards
11.4 Canada and eVS shall clearly define in writing quality
standards with respect to both product and manufacturing
procedures, prior to the manufacture of each product.
Spot Audits
11.5 If:
11.5.1 eVS becomes insolvent;
11.5.2 eVS fails to pay royalties within thirty (30) days of
written notice of the arrears;
11.5.3 eVS is notified by a regulatory authority that eVS or
one of its contractors, sub-licencees has breached
statutory or regulatory standards in the production or
use of ET or IR;
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11.5.4 eVS fails to meet the contractual standards as
prescribed in the procedure in paragraph 11.4
(Contractual Quality Standards); or
11.5.5 Canada becomes aware of bona fide complaints about
the quality of PRE-MIX or LICENCED PRODUCT;
then irrespective of the quarter, Canada may ask eVS to conduct
spot audits of eVS production and sales sites anywhere in the
LICENCED TERRITORIES within fourteen (14) days from written
notification from Canada. eVS shall disclose those audit
results to Canada within thirty (30) days of each audit.
Material Terms
11.6 eVS's obligations under this Article are material terms of
the MASTER LICENCE.
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12 REPORTS
Administrative Meetings
12.1 The PARTIES agree to meet annually to review for the preceding
and upcoming year, both the progress of the COMMERCIALIZATION
of ET and IR, and related scientific research, in addition to
any other issues the PARTIES deem relevant. At the meeting the
PARTIES may address:
12.1.1 a description of the steps taken by eVS to
COMMERCIALIZE and sub-licence the LICENCED
TERRITORIES;
12.1.2 a description of the marketing conditions for the
LICENCED PRODUCT;
12.1.3 a report on the production, distribution and sales of
the LICENCED PRODUCT;
12.1.4 a statement of:
12.1.4.1 the names and addresses of all
sub-licences to whom the LICENCED
PRODUCT has been sub-licenced;
12.1.4.2 the latest period (PERIOD ONE or
TWO) reports, and if possible the
revenues from each sub-licencee;
12.1.5 a discussion of the business plan for the
COMMERCIALIZATION of the LICENCED TECHNOLOGIES both
on a strategic and short term basis;
12.1.6 a discussion of the research conducted by the PARTIES
relevant to the LICENCED TECHNOLOGIES; and
12.1.7 a discussion of the proposed research for the next
two (2) years both on a strategic and short term
basis.
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13 CORPORATE REPRESENTATIONS & WARRANTIES
eVS
13.1 eVS represents and warrants to Canada that as of the date of
execution of the MASTER LICENCE:
Ability
13.1.1 eVS can COMMERCIALIZE the LICENCED PRODUCTS, and eVS
has the necessary access to funds, resources and
personnel to perform its obligations under the MASTER
LICENCE subject to:
13.1.1.1 eVS demonstrating that it can produce
products or services or both based on
the LICENCED TECHNOLOGIES in a
financially profitable manner and
that a commercial market exists for
such sales at profitable prices; and
13.1.1.2 the receipt of the anticipated
applicable USDA regulatory approvals
for the LICENCED TECHNOLOGIES;
This representation and warranty is a fundamental
condition of the MASTER LICENCE but is not a guarantee
by eVS that there is commercial market for the LICENCED
TECHNOLOGIES or that the LICENCED TECHNOLOGIES can be
successfully COMMERCIALIZED.
Authorization
13.1.2 it has the corporate power and authority to negotiate,
execute and comply with the MASTER LICENCE;
Enforceable
13.1.3 it is bound by the MASTER AGREEMENT as a legal, valid
and enforceable contract upon execution, limited only
by applicable bankruptcy or creditor laws, and general
principles of equity;
Litigation
13.1.4 it has no knowledge of any no legal proceeding or
order pending against or, to the knowledge of eVS,
threatened against or affecting, eVS or any of its
properties or otherwise that could adversely affect or
restrict the ability of eVS to consummate fully the
transactions contemplated by this MASTER LICENCE,
(including without limitation the COMMERCIALIZATION of
the
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LICENCED TECHNOLOGIES) or that in any manner draws
into question the validity of this MASTER LICENCE.
Veracity of Statements
13.1.5 no representation or warranty by eVS contained in this
MASTER LICENCE and no statement contained in any
certificate, schedule or other instrument furnished to
Canada pursuant hereto or in connection with the
transactions contemplated hereby, contains any untrue
statement of a material fact or omits to state a
material fact.
Third Party Representations
13.1.6 it has not given any undertaking, express or implied, to
any third party which would:
13.1.6.1 preclude eVS from fulfilling eVS's
obligations under the MASTER LICENCE;
or
13.1.6.2 cause eVS to breach an agreement with
a third party.
Canada
13.2 Canada represents and warrants to eVS as of the date of execution
of the MASTER LICENCE.
Authorization
13.2.1 She has the power and authority to negotiate, execute
and comply with the MASTER LICENCE, subject to all
applicable laws and the royal prerogative and
13.2.1.1 no further action is required by or
in respect of any governmental or
regulatory authority;
13.2.1.2 to the best of Canada's knowledge the
MASTER LICENCE does not contravene,
violate or constitute a breach or
default under, any requirement of law
applicable to Canada or any contract
to which Canada is bound or subject;
and
13.2.1.3 the MASTER LICENCE is legal, binding
and enforceable in accordance with
its terms.
Veracity of Statements
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13.2.2 no representation or warranty by Canada contained in
this MASTER LICENCE and no statement contained in any
certificate, schedule or other instrument furnished to
eVS pursuant hereto or in connection with the
transactions contemplated hereby, contains any untrue
statement of a material fact or omits to state a
material fact.
Compliance of Laws
13.2.3 to the best of Canada's knowledge as of the date of
execution of the MASTER LICENCE there is:
13.2.3.1 no suit, action, claim, arbitration,
administrative or legal or other
proceeding, or governmental or other
investigation pending or threatened
against or affecting the PATENTS
other than
13.2.3.1.1 a grievance by a fee for
service contractor, Dick
Graham,(operating under the
corporate name of
sensIRscan) who assigned
his rights of inventorship
to Canada under IR patent
#5,458,418, and is now
claiming a share of any
royalties received by
Canada for that patent.
13.2.3.2 no failure to comply with, nor any
default under, any law, requirement,
regulation, or order affecting the
PATENTS;
13.2.3.3 no violation of or default with
respect to any order, or judgment of
any court, board, agency, or other
instrumentality with jurisdiction
issued or pending against Canada
which might have a material adverse
effect on the PATENTS or the
ownership or use thereof; and
13.2.3.4 no incident, events and claims of
product liability relating to the
PATENTS.
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14 PATENT INFRINGEMENT
Notice
14.1 In case of a PATENT infringement, or suspected PATENT
infringement eVS or Canada shall promptly notify the other in
writing of the alleged infringement of which a PARTY has
knowledge.
Core Countries
14.2 If the infringement occurs in the CORE COUNTRIES then Canada
shall have
14.2.1 in the case of a defence, fourteen (14) days from
service of a claim; or
14.2.2 in the case of a prosecution / enforcement, ninety
(90) days from notification the possible
infringement,
to determine if Canada will prosecute or defend the
infringement action, as the case may be.
Canada Defends / Prosecutes
14.3 If Canada elects to prosecute / enforce or defend an action in
a CORE COUNTRY, then eVS shall have the right to participate in
the litigation as co-counsel at eVS's sole cost. Any
prosecution / enforcement action will claim in addition to any
other applicable damages or costs, both the lost revenues to
the Canada and the lost revenues to eVS.
eVS Co-Counsel
14.4 All decisions related to the conduct and settlement of the
litigation shall be made jointly by the PARTIES except that
Canada may settle suits seeking damages for infringement
against third party patents without the consent of eVS so long
as:
14.4.1 such settlement is solely for monetary damages for
which Canada is solely responsible as owner of ET or
IR;
14.4.2 such settlement in no way derogates, diminishes or
restricts the rights granted to eVS in the MASTER
LICENCE.
For greater clarity, the prior written consent of eVS
shall be required in all cases where a settlement would
derogate, diminish or restrict the rights granted to eVS in
the MASTER LICENCE.
eVS Assumes Control of Litigation
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14.5 If there is a disagreement between the PARTIES as to a
significant strategic or tactical decision during the course
of litigation contemplated in paragraph 14.3 (Canada Defends /
Prosecutes), then eVS shall have the right to take over the
litigation pursuant to paragraph 14.9 (eVS Defends /
Prosecutes) and conduct the litigation in a commercially
responsible manner.
Costs when eVS Assumes Control of Litigation
14.6 eVS shall remain responsible for its costs up to the point the
transfer of the case under paragraph 14.5 (eVS Assumes Control
of Litigation).
Canada Controls Payment of Damage / Settlement Terms
14.7 Notwithstanding the foregoing, eVS shall not have the right
to:
14.7.1 compromise or otherwise settle damages that might be
payable by Canada; or
14.7.2 enter a settlement that might derogate, diminish or
restrict the rights granted to Canada in the Patents,
without Canada's written prior consent.
Canada's Damage Awards Distribution
14.8 If Canada is awarded damages or costs or both, then Canada
shall:
14.8.1 firstly, deduct its total litigation costs from the
amount of the award, if costs are not awarded;
14.8.2 secondly, if the court issues a judgment identifying
damages for the lost revenues of Canada and of eVS,
then the lost revenues damages of eVS shall be
forthwith paid to eVs upon receipt;
14.8.3 thirdly, if a global damage award is made which does
not identify the damage owing to Canada and eVS
respectively, then the remaining amount of the award
(excluding any punitive damages), shall be deemed to
be GROSS REVENUES, and subject to the royalty rate
under the MASTER LICENCE; and
14.8.4 any punitive damages shall be divided equally between
the PARTIES.
eVS Defends / Prosecutes
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14.9 If Canada declines to prosecute or defend in a CORE COUNTRY,
then eVS shall be free to take all action that is commercially
responsible to prosecute or defend the infringement action,
subject always to paragraph 14.7 (Canada Controls Payment of
Damage / Settlement Terms).
14.9.1 From the date the litigation is commenced, in the
case of a prosecution, or from the date of service,
in the case of a defence, eVS shall then be entitled
to defray from the subsequently generated royalties
Article 5 (Royalties) costs of the litigation
including without limitation legal fees, court costs,
disbursements, and expert fees.
14.9.2 If at the time of the PERIOD ONE and PERIOD TWO
royalty payments pursuant to paragraph 5.3 (Payment
Dates), litigation costs exceed accrued royalties,
then no royalties shall be paid, and the excess costs
shall be carried forward and set-off against future
royalties.
14.9.3 If the PARTIES determine that no future royalties are
possible, then from that time forward eVS shall bear
any additional litigation costs. In any case, Canada
shall not be liable for funds greater than the
royalty stream owing to Canada.
14.9.4 If eVS is awarded damages or costs or both, then
after deducting total litigation costs from the
amount of the award, if costs are not awarded, eVS
shall reimburse Canada:
14.9.4.1 firstly, for any amounts set-off
against royalties pertaining to any
litigation costs;
14.9.4.2 secondly, the remaining amount of
the award (excluding any punitive
damages) shall be deemed to be GROSS
REVENUES, and subject to the royalty
rate under the MASTER Licence; and
14.9.4.3 thirdly, any punitive damages shall
be divided equally between the
PARTIES.
Notwithstanding the foregoing, eVS shall not be
entitled to "double dip" or have its total litigation
costs reimbursed both by Canada and under any general
damages or costs award. It is the intention of the
PARTIES that for every dollar in costs recovered by
eVS, eVS shall reimburse Canada a dollar in set-off
royalties.
Non-Core Country Infringement Actions
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14.10 In non-CORE COUNTRIES, eVS alone shall be responsible for all
decisions, costs and obligations associated with any
infringement prosecutions / enforcements or defences and shall
indemnify Canada for the same. Notwithstanding the foregoing,
eVS shall brief Canada on not less than an annual basis as to
the status of such actions, unless requested by Canada on a
case specific basis.
Parties Jointly Police Infringement
14.11 The PARTIES agree that they will jointly police infringement
of the ET/IR PATENTS and will consult with the other with
respect thereto.
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15 INDEMNIFICATION
Reciprocal for Negligence / Contract Breach
15.1 Subject to any applicable federal laws, Canada and eVS shall
each defend, indemnify and hold the other harmless against:
15.1.1 any third party claims, costs, or suits arising out
of the negligence of the other; and
15.1.2 negligence damages related to breaches of material or
fundamental representations or covenants contained in
the MASTER LICENCE.
Procedures
Notice
15.2 Promptly after acquiring knowledge of any claims that fall
within the compass of paragraph 15.1 (Reciprocal for
Negligence / Contract Breach) Canada or eVS, as the case may
be, shall give to the other written notice of such claim.
Failure to give this notice shall not relieve the indemnifying
party of any liability it may have to the indemnified party if
such failure does not materially prejudice the indemnifying
party.
Indemnifying Party Defends
15.3 Subject to indemnifying party waiving its right to contest its
obligation to indemnify the indemnified party for any such
claims, the indemnifying party shall have the right to assume
the defense. The indemnifying party shall not be liable to the
indemnified party for any legal expenses of other counsel or
any other expenses subsequently incurred by such indemnified
party in connection with the defense.
Indemnified Party Defends
15.4 If the indemnifying party fails to assume such defense or
advises that there are issues which raise conflicts of
interest between the PARTIES, the indemnified party may retain
one counsel satisfactory to it, and the indemnifying party
shall pay all reasonable fees and expenses of such counsel
promptly as statements therefor are receive. If the conflict
of interest is the reason for such claims or the indemnified
party's action resulted in such claims, then the indemnifying
party shall be reimbursed by the indemnified party all monies
paid under paragraph 15.4.
Co-operation
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15.5 The indemnifying party shall receive from the indemnified
party all necessary and reasonable cooperation in said defense
including, but not limited to, the services of employees who
are familiar with the transactions out of which any such
claims may have arisen.
Mutual Consent of Settlement
15.6 The indemnifying party shall not be liable for any settlement
effectuated without its prior written consent.
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16 TERMINATION
By Canada for Cause
16.1 The MASTER LICENCE, at the option of Canada, may be terminated
forthwith by Canada without compensation to eVS if:
16.1.1 eVS fails to COMMERCIALIZE either one of ET or IR in
at least one of the CORE COUNTRIES within the earlier
of two (2) years from the USFDA regulatory approval
for ET as a New Animal Drug Application or four (4)
years from the execution of the MASTER LICENCE;
16.1.2 eVS fails to fund at least one collaboration or
research support agreement within two (2) years from
the date of the execution of the MASTER LICENCE;
16.1.3 eVS fails to make any required payment within forty
five (45) days of receipt of the written notice of
the arrears;
16.1.4 eVS continues to neglect, or fails to meet, a
contractual, regulatory, or statutory standard after
receipt of written notice of such deficiency and the
expiration of a reasonable period of time to cure the
deficiency, as defined in the paragraph 11.3
(Regulatory Quality Standards) or paragraph 11.4
(Contractual Quality Standards);
16.1.5 eVS commits or permits a breach of the identified
material or fundamental terms and conditions in the
MASTER LICENCE identified in paragraphs and Articles:
2.1, Surrender
2.2, Grant
2.3, Sub-licencing
2.4, Canada's Consent
2.5, Sub-licencing Conditions
2.6, Termination
2.7, Third Party Obligations - eVS
4.1, Best Efforts to Commercialize
6.2, No Impeachment
6.3, Inimical Use of Confidential Information
8.3, Third Party Representations
8.6, Confidential Information without Warranty /
No Reliance
9.3, eVS Responsibility for Patent Costs
10.4, Costs of Canada's Advisory Board Members
10.5, Regulatory Costs
10.6, Decision to Register
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10.7, Registration Ownership
10.8, Trademark Use
10.9, Trademark and Quality Control
11.1, Audit Rights and Purposes
11.2, Audit Timing / Process / Costs
11.5, Spot Audits
14.6, Costs when eVS Assumes Control of Litigation
14.7, Canada Controls Payment of Damage /
Settlement Terms
15.1, Reciprocal Indemnification for Negligence /
Contract Breach
17.1, Confidentiality Obligations
17.2, Confidentiality Measures
17.3, Distribution by the Receiving Party
17.4, Common Law Duty of Confidentiality
17.5, Confidentiality Exceptions
17.8, Fiduciary
17.9, Elements of Fiduciary Relationship
17.10, Equitable Relief
21.1, No Bribes
21.4, Compliance with Law; and
Article 7, Improvements, R & D Collaborations.
and fails to remedy such breach within ninety (90)
days after being required in writing to do so by
Canada;
16.1.6 eVS breaches a representation or warranty in
paragraph 13.1 ( eVS) made to Canada hereunder and
such breach has a material adverse effect on the
benefits to Canada or eVS's ability to perform its
obligations hereunder;
16.1.7 eVS commences bankruptcy or insolvency proceedings,
or has a receiving order made against it or has a
receiver appointed to continue its operations, or has
its assets seized or otherwise attached for the
benefit of creditors, or passes a resolution for
winding up, or takes the benefit of any statute for
the time being in force, relating to bankrupt or
insolvent debtors or the orderly payment of debts;
16.1.8 eVS assigns the MASTER LICENCE without the prior
written consent of Canada; or
Trademark Rights Terminated
16.2 Canada may terminate the trademark rights and permissions
granted under the MASTER LICENCE if eVS breaches any of its
obligations with respect to the
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TRADEMARK including without limitation eVS's obligations to
maintain the quality and character of the LICENCED
TECHNOLOGIES or the quality control standards as prescribed in
the MASTER LICENCE and such breach is not remedied within 30
days of written notice thereof or sooner as circumstances
dictate. For greater certainty the termination of the
TRADEMARK rights / licence shall not mean or result in the
termination of the MASTER LICENCE and the rights granted
thereunder to ET and IR.
Procedure
16.3 Termination shall be effected by a notice, that shall be
effective as of the date stated therein, but subject to
paragraph 16.4 (The Company's Duties on Termination), to
terminate the MASTER LICENCE, together with all rights of eVS
hereunder, without prejudice:
16.3.1 to the right of Canada to sue for and recover any
royalties or other sums due Canada; and
16.3.2 to the remedy of either PARTY in respect of any
previous breach of the MASTER LICENCE.
The Company's Duties on Termination
16.4 Upon termination or expiration of the MASTER LICENCE, eVS
shall, at its own cost:
16.4.1 return immediately to Canada all CONFIDENTIAL
INFORMATION and LICENCED TECHNOLOGIES, including
copies thereof;
16.4.2 certify in writing to Canada, within thirty (30)
days, that to the best of eVS's knowledge all of the
CONFIDENTIAL INFORMATION (including copies) has been
returned;
16.4.3 deliver a detailed statement to Canada of the
inventory of the LICENCED TECHNOLOGIES, then
existing, but not sold by eVS, as of the date of
expiration or termination;
16.4.4 provide Canada the right of first refusal to purchase
from eVS any LICENCED TECHNOLOGIES stocks at fair
market value;
16.4.5 dispose of any remaining LICENCED TECHNOLOGIES stocks
as specified by Canada;
16.4.6 pay all costs due under the MASTER LICENCE, up to and
including the termination date, within thirty (30)
days of the termination;
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16.4.7 pay all costs due under the MASTER LICENCE,
subsequent to the termination, for any LICENCED
TECHNOLOGIES sold after termination, within seven (7)
days of the liability being incurred; and
16.4.8 transfer to Canada at no cost, all rights, permits,
authorizations, registrations concerning the LICENCED
TECHNOLOGIES not already in Canada's name.
Surviving Obligations
16.5 All obligations of the PARTIES which expressly or by their
nature survive termination or expiration, shall continue in
full force and effect subsequent to and notwithstanding such
termination or expiration, until they are satisfied or by
their nature expire. For greater clarity, and without
restricting the generality of the foregoing, the following
provisions survive termination or expiration: Articles 5
(Royalties), 17 (Confidentiality / Fiduciary & Equitable
Remedies), 15 (Indemnification) and 14 (Patent Infringement)
shall survive early termination or expiration of the MASTER
LICENCE.
Surrender of Licence
16.6 If eVS does not pay any royalty to Canada within seven (7)
years from the execution of the MASTER LICENCE, then eVS shall
surrender the MASTER LICENCE to Canada at Canada's election.
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17 CONFIDENTIALITY / FIDUCIARY & EQUITABLE REMEDIES
Confidentiality Obligations
17.1 The CONFIDENTIAL INFORMATION disclosed to the RECEIVING PARTY
shall be:
17.1.1 used by the RECEIVING PARTY solely for purposes
authorized under the MASTER LICENCE;
17.1.2 held in confidence, safeguarded and not disclosed by
the RECEIVING PARTY; and
17.1.3 held in trust and dealt with only as authorized under
the MASTER LICENCE.
Confidentiality Measures
17.2 The RECEIVING PARTY shall require that all persons who receive
any CONFIDENTIAL INFORMATION:
17.2.1 have a need to know;
17.2.2 are properly instructed to maintain the CONFIDENTIAL
INFORMATION in confidence; and
17.2.3 sign a confidentiality agreement that binds the
person to the same terms and conditions as outlined
herein.
Distribution by the Receiving Party
17.3 Distribution of documents beyond the RECEIVING PARTY'S staff
shall be conducted on a need to know basis and only with the
written permission of the DISCLOSING PARTY.
Common Law Duty of Confidentiality
17.4 Nothing contained in the MASTER LICENCE derogates, displaces
or otherwise diminishes the common law duty of confidentiality
vested in the RECEIVING PARTY concerning the CONFIDENTIAL
INFORMATION. For greater certainty, the RECEIVING PARTY
acknowledges and is estopped from alleging otherwise that:
17.4.1 the CONFIDENTIAL INFORMATION is inaccessible
(non-public) and identifiable;
17.4.2 the CONFIDENTIAL INFORMATION was imparted in
circumstances importing an obligation of confidence;
and
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17.4.3 any use or disclosure of the CONFIDENTIAL
INFORMATION, except as authorized in the MASTER
LICENCE, prejudices and is detrimental to the
DISCLOSING PARTY'S commercial and scientific
interests.
Confidentiality Exceptions
17.5 The contractual and common law duties of confidentially
shall not apply to the RECEIVING PARTY, if the RECEIVING PARTY
can demonstrate that:
Public Domain
17.5.1 the information was legally and legitimately in the
public domain through no act or omission of the
RECEIVING PARTY at the time of disclosure;
Published
17.5.2 the information was legally and legitimately
published or otherwise becomes part of the public
domain after the time of disclosure of the
CONFIDENTIAL INFORMATION to the RECEIVING PARTY,
through no act or omission of the RECEIVING PARTY;
Already Known
17.5.3 the information was already in the possession of the
RECEIVING PARTY at the time of disclosure and was not
acquired by the RECEIVING PARTY directly or
indirectly from the DISCLOSING PARTY, (as shown by
documentation sufficient to establish the time of
such possession), and the RECEIVING PARTY is free to
disclose the information to others without breaching
any contractual obligations or common law duties;
Third Party Discloses
17.5.4 the information become available from an outside
source who has a lawful and legitimate right to
disclose the information to others, and the RECEIVING
PARTY is free to disclose the information to others
without breach of any contractual obligations or
common law duties;
Independently Developed
17.5.5 The information was independently developed by the
RECEIVING PARTY without the RECEIVING PARTY reviewing
or accessing any of the
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CONFIDENTIAL INFORMATION (as shown by documentation
sufficient to establish the timing of such
development); or
Judicial / Administrative Order
17.5.6 the information was released due to a compulsory
disclosure order under a judicial process or under a
compulsory regulatory requirement, none of which was
invited by or consented to by the RECEIVING PARTY,
and if the RECEIVING PARTY is Canada, the invitation
or consent did not emanate from the Western Region of
Agriculture and Agr-Food Canada's Research Branch.
Access to Information
17.6 The PARTIES agree that any document containing the following
information shall be treated by the PARTIES as "confidential
third party" information pursuant to section 20 of the Access
to Information Act:
17.6.1 trade secrets of eVS;
17.6.2 financial, commercial, scientific or technical
information that is consistently treated in a
confidential manner by eVS;
17.6.3 information, the disclosure of which could reasonably
be expected to result in material financial loss or
gain to, or could reasonably be expected to prejudice
the competitive position of eVS; and
17.6.4 information, the disclosure of which could reasonably
be expected to interfere with contractual or other
negotiations of eVS.
Access to Information Disclosure
17.7 Notwithstanding paragraph 17.6 (Access to Information), eVS
acknowledges that:
17.7.1 a court of competent jurisdiction could order the
release of information, considered hereunder as
confidential third party information; and
17.7.2 the Access to Information Act, s. 27, requires that
both Canada and eVS be notified of any such release
and eVS be allowed to make representations against
such release.
Fiduciary
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17.8 eVS acknowledges that in the event eVS breaches its
obligations under the confidentiality provisions of paragraph
17.1 (Confidentiality Obligations) to 17.7 (Access to
Information Disclosure) inclusive, then:
17.8.1 eVS shall be deemed a fiduciary of Canada concerning
the CONFIDENTIAL INFORMATION disclosed by Canada;
17.8.2 eVS shall be deemed to hold in trust for Canada, the
CONFIDENTIAL INFORMATION and any benefits arising
from eVS improper or unauthorized use of the
CONFIDENTIAL INFORMATION
Elements of Fiduciary Relationship
17.9 eVS agrees that under the MASTER LICENCE in the event eVS
breaches its obligations under the confidentiality provisions
of paragraph 17.1 (Confidentiality Obligations) to 17.7
(Access to Information Disclosure) inclusive, then:
17.9.1 eVS has power and discretion affecting Canada's
interests arising from the disclosure of the
CONFIDENTIAL INFORMATION and the licencing of the
LICENCED TECHNOLOGIES;
17.9.2 eVS can unilaterally exercise that power and
discretion so as to affect Canada's commercial and
other interests;
17.9.3 Canada is vulnerable to the power and discretion
vested in eVS; and
17.9.4 eVS's primary obligations are to COMMERCIALIZE the
LICENCED TECHNOLOGIES and safeguard the CONFIDENTIAL
INFORMATION.
Equitable Relief
17.10 eVS acknowledges, and is estopped from alleging otherwise,
that:
17.10.1 any unauthorized use of the LICENCED TECHNOLOGIES or
unauthorized disclosure of the CONFIDENTIAL
INFORMATION would cause irreparable harm to Canada;
17.10.2 Canada has spent significant money and dedicated
significant human, capital and financial resources
(some of which are no longer available) in order to
create, assemble, or integrate the CONFIDENTIAL
INFORMATION or the LICENCED TECHNOLOGIES, as the case
may be; and
17.10.3 Canada shall be entitled to any and all legal and
equitable relief, including, without limitation,
injunctive relief, without the need for posting a
bond or
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security, as well as the equitable remedy of
disgorgement (being the ejection of all benefits
gained by eVS traceable to the material breach).
Fundamental Terms
17.11 eVS's obligations of confidentiality as prescribed in this
Article are fundamental terms of the MASTER LICENCE.
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18 ALTERNATE DISPUTE RESOLUTION (ADR)
Negotiation
Informal Negotiations
18.1 If a dispute arises between the PARTIES concerning the
construction, interpretation, compliance with or breach of
this MASTER LICENCE, then the PARTIES shall:
18.1.1 reduce the dispute to writing, and if the PARTIES
cannot agree on the wording of the dispute, both
PARTIES may submit to each other their written
version of the dispute;
18.1.2 make bona fide efforts to resolve the dispute by
amicable negotiations; and
18.1.3 provide full, frank and timely disclosure of all
relevant facts, information and documents to
facilitate those negotiations.
Formal Negotiations
18.2 If the PARTIES are unable to resolve the dispute within
fourteen (14) calendar days from the date of the dispute being
reduced to writing by the first PARTY to do so, then within
the following thirty (30) days the dispute shall be referred
to the Director General Western Region (or the Director of the
Lacombe Centre), on behalf of Canada, and to the CEO (or a
directly reporting designate) on behalf of eVS to negotiate a
resolution.
18.2.1 These individuals may not delegate, substitute or
direct surrogates for them at these negotiations.
18.2.2 These individuals shall meet in person to negotiate
and the PARTIES shall bear their own costs.
18.2.3 Unless otherwise agreed, the meeting shall alternate
between the Edmonton, Alberta, Canada and Orlando,
Florida, USA, commencing in Orlando for the first
dispute. There shall only be one meeting per dispute,
which meeting shall not exceed one business day in
length.
18.2.4 The meeting shall be held within sixty (60) days from
the expiration of the thirty (30) day period in
paragraph 18.2 (Formal Negotiations); and
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18.2.5 The PARTIES may bring no more than two consultants to
a meeting. The two consultants shall not have a right
of audience or otherwise to negotiate the dispute.
Mediation
18.3 If, within thirty (30) days following the close of the meeting
under paragraph 18.2 (Formal Negotiations), the PARTIES have
not succeeded in negotiating a resolution, then the PARTIES
may jointly submit the dispute to mediation.
Direct to Arbitration
18.4 If the PARTIES cannot agree to jointly submit the dispute to
mediation, then either PARTY may submit the dispute to binding
arbitration.
Process
18.5 The PARTIES shall:
18.5.1 appoint a mutually acceptable mediator with sixty
(60) days from the close of the formal negotiation
meeting under subparagraph;
18.5.2 participate in good faith in the mediation and
negotiations related thereto;
18.5.3 send representatives to the mediation shall be
empowered or have sufficient delegated authority to
resolve, compromise, negotiate or settle the dispute
submitted to arbitration, without seeking further
instructions or approvals from any superiors or
committees / corporate structures, unless the nature
of the dispute by law or corporate policies or
practices requires approval from the respective
corporate structure. In such event, such approval
shall be obtained within five (5) business days of
the proffer of any settlement offer;
18.5.4 bear the costs of the mediation equally, except that
each PARTY shall bear its own personal costs of the
mediation; and
18.5.5 disclose in a full, frank and timely manner all
relevant facts, information and documents to
facilitate the mediation.
Location
18.6 The mediation shall take place in the city that was not the
site of the formal negotiations for the dispute.
Unsuccessful
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18.7 The dispute shall be referred to binding arbitration if the
PARTIES are not successful in resolving the dispute through
mediation.
Arbitration
18.8 After negotiation (and if applicable, mediation), any
subsisting dispute between the PARTIES, shall be referred to
arbitration by a written submission signed by either Canada or
eVS.
Procedure
Law, Code & Rules
18.9 The arbitration tribunal shall be governed by the UN
Commercial Arbitration Code, incorporated into the Commercial
Arbitration Act, R.S.C. 1985, c. C-34.6 and the Rules in
Appendix (Rules). Unless the PARTIES otherwise agree in
writing, where there is an inconsistency between the Code and
the Rules, the Rules shall prevail to the extent of any such
inconsistency.
Tribunal & Jurisdiction
18.10 The arbitration tribunal shall consist of one arbitrator
chosen by the PARTIES.
18.11 The scope of the arbitration shall be limited to the
resolution of the dispute submitted to arbitration.
18.12 The arbitration tribunal shall decide the dispute or
difference in accordance with the laws in force in the
Province of Ontario and any applicable federal laws. The
arbitration tribunal shall not be authorized to decide ex
aequo et bono or as amiable compositeur.
Final & Binding
18.13 Subject to the Code, the PARTIES agree that the award and
determination of the arbitration tribunal shall be final and
binding on both PARTIES.
Proceedings
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18.14 The proceedings shall take place in the city that was not the
site of the mediation (or if there was no mediation, in the
city that was not the site of the negotiation meeting), unless
the PARTIES agree otherwise.
Language
18.15 The language to be used in the proceedings is English, unless
the PARTIES hereto agree otherwise.
Written Communications
18.16 All written communication shall be delivered to the PARTIES
hereto in the manner provided for in Article 22 (Notice).
Costs
18.17 The costs of the tribunal's fees and expenses shall be shared
equally by the PARTIES. The PARTIES shall bear their own
costs.
Arbitrator's Written Decision
18.18 The arbitrator shall render a written decision with reasons
within thirty (30) days from the close of the hearing or
submission of written argument. The decision of the arbitrator
shall be final and binding, and not subject to judicial
review.
Power to Settle
18.19 The PARTIES' representatives at any arbitration shall be
empowered or have sufficient delegated authority to resolve,
compromise, negotiate or settle the dispute submitted to
arbitration, without seeking further instructions or approvals
from any superiors or committees / corporate structures,
unless the nature of the dispute by law or corporate policies
or practices requires approval from the respective corporate
structure. In such event, such approval shall be obtained
within five (5) business days of the proffer of any settlement
offer.
Adjournment to Empower Representative
18.20 Breach of this provision shall entitle the other PARTY to seek
an adjournment of the arbitration proceedings, to give the
breaching PARTY time to appoint a duly empowered
representative within the thirty (30) days. All costs of the
such delay, including tribunal costs and the non-breaching
PARTY's costs, shall be paid forthwith by the breaching PARTY.
Deemed Abandonment
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18.21 Failure of the breaching PARTY to appoint such a
representative within the thirty (30) day period shall be
deemed a withdrawal or abandonment of the dispute by the
breaching PARTY and the arbitrator shall render a formal
decision, finding in favour of the non-breaching PARTY.
General ADR Conditions
No Litigation
18.22 If either PARTY has submitted the dispute to court, then the
court filing PARTY shall discontinue the court proceedings
forthwith, upon notice from the other PARTY, and both PARTIES
shall remit the dispute to alternate dispute resolution as
prescribed hereunder.
Obligations During Alternate Dispute Resolution (ADR)
18.23 During the progress of ADR, the PARTIES shall continue to
perform their obligations under the MASTER LICENCE.
Privilege
18.24 Neither PARTY shall be required to disclose documents that are
privileged or created in contemplation of litigation. If a
PARTY does disclose such a document during ADR, that
disclosure shall not be construed as a waiver of any privilege
unless the DISCLOSING PARTY so elects in writing.
Confidentiality
18.25 The ADR procedure under this Article is confidential and all
conduct, statements, promises, offers, views and opinions,
whether oral or written, made in the course of the ADR by
either PARTY, or the mediator, or the arbitrator, are
confidential.
ADR Disclosures Not Admissible in Subsequent
Proceedings
18.26 Subject to the paragraph 18.23 (Obligations During
Alternative Dispute Resolution (ADR)), all conduct,
statements, promises, offers, views and opinions, whether oral
or written, made in the course of the ADR by either PARTY, or
the mediator, or the arbitrator, are not discoverable or
admissible for any purposes, including impeachment, in any
litigation or other proceedings involving the PARTIES.
Normally Admissible Evidence
18.27 Evidence that would otherwise be discoverable or admissible is
not excluded from use in subsequent civil or administrative
proceedings merely as a result of its use in the ADR.
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Material Breach
18.28 The failure, neglect or unwillingness of a PARTY to use or
diligently participate in and prosecute a dispute through ADR
is a material breach of the MASTER LICENCE.
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19 INTENT AND INTERPRETATION
Entire Agreement
19.1 The MASTER LICENCE constitutes the entire agreement between
the PARTIES. The MASTER LICENCE sets forth all representations
forming part of, or in any way affecting or relating to the
MASTER LICENCE. The PARTIES acknowledge that there are no
representations, either oral or written, between eVS and
Canada other than those expressly set out in the MASTER
LICENCE.
Pre-Contractual Representations
19.2 The MASTER LICENCE supersedes and revokes all negotiations,
arrangements, letters of intent, offers, proposals, brochures,
representations and information conveyed, whether oral or in
writing, between the PARTIES hereto or their respective
representatives, or any other person purporting to represent
eVS or Canada. The PARTIES agree that:
19.2.1 none has been induced to enter into the MASTER
LICENCE by any representations not set forth in the
MASTER LICENCE;
19.2.2 none has relied on any such representations;
19.2.3 no such representations shall be used in the
interpretation or construction of the MASTER LICENCE;
and
19.2.4 no claims (including, without limitation, loss of
profits, consequential damages and economic loss)
arising directly or indirectly from any such
representation shall accrue in law or equity to, or
be pursued by eVS, and Canada shall have no liability
for any such claims.
Due Diligence Search
19.3 eVS agrees that it has conducted its own due diligence
examinations.
Independent Legal Advice
19.4 It is acknowledged by the PARTIES that each has had legal
advice to the full extent deemed necessary by each PARTY.
Furthermore, the PARTIES acknowledge that neither acted under
any duress in negotiating, drafting and executing the MASTER
LICENCE.
No Adverse Presumption in Case of Ambiguity
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19.5 There shall be no presumption that any ambiguity in the MASTER
LICENCE be resolved in favour of either of the PARTIES. For
greater certainty, the contra proferentum rule shall not be
applied in any interpretation of the MASTER LICENCE.
Severability
19.6 If any part of the MASTER LICENCE is declared or held invalid
for any reason, the invalidity of that part will not affect
the validity of the remainder, which will continue in full
force and effect and be construed as if the MASTER LICENCE had
been executed without the invalid portion. The intention of
the PARTIES is that the MASTER LICENCE would have been
executed without reference to any portion which may, for any
reason, be declared or held invalid.
Plurality and Gender
19.7 The MASTER LICENCE will be for the benefit of and be binding
upon the heirs, executors, administrators, successors,
permitted assigns of eVS and other legal representatives, as
the case may be, of each of the PARTIES. Every reference in
the MASTER LICENCE to any PARTY includes the heirs, executors,
administrators, successors, permitted assigns and other legal
representatives of the PARTY.
Not a Joint Venture
19.8 The PARTIES expressly disclaim any intention to create a
partnership, joint venture or joint enterprise.
19.9 The PARTIES acknowledge and agree that:
19.9.1 nothing contained in the MASTER LICENCE nor any acts
of any PARTY shall constitute or be deemed to
constitute the PARTIES as partners, joint venturers
or principal and agent in any way or for any purpose;
19.9.2 no PARTY has the authority to act for, or to assume
any obligation or responsibility on behalf of any
other PARTY; and
19.9.3 the relationship between the PARTIES is that of
licencor and licencee.
Minister Not Fettered
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19.10 Nothing in the MASTER LICENCE shall derogate or otherwise
fetter the ability of Canada to regulate, administer, manage
or otherwise deal with agriculture and all attendant matters
thereto.
Federal Legislation
19.11 The reference in the MASTER LICENCE to any Federal act or
regulation includes any subsequent amendment, revision,
substitution, consolidation to that act or regulation,
notwithstanding that such amendment, revision or substitution
occurred after the execution of the MASTER LICENCE or may have
a retroactive effect.
Right to Legislate
19.12 Nothing in the MASTER LICENCE shall prohibit, restrict or
affect the right or power of the Parliament of Canada to enact
any laws of general application whatsoever with respect to any
area of law for which the Parliament of Canada has legislative
jurisdiction, even if the enactment of any such law affects
the MASTER LICENCE, its interpretation, or the rights of
either PARTY.
No Implied Obligations
19.13 No implied terms or obligations of any kind, by or on behalf
of either of the PARTIES, shall arise from anything in the
MASTER LICENCE. The express covenants and agreements herein
contained and made by the PARTIES are the only covenants and
agreements upon which any rights against either of the PARTIES
may be founded.
Access to Information
19.14 Notwithstanding any provision to the contrary in the MASTER
LICENCE, eVS acknowledges that Canada is subject to the Access
to Information Act, R.S.C. 1985, c.A-1 and related acts, and
may be required to release, in whole or in part, the MASTER
LICENCE and any other information or documents in Canada's
possession or control relating to the MASTER LICENCE and the
PARTIES.
Governing Law
19.15 The MASTER LICENCE shall be governed firstly by applicable
Canadian Federal laws, and secondly by the laws of the
Province of Ontario. The PARTIES expressly exclude:
19.15.1 application of the United Nations Convention on
Contracts for the International Sale of Goods; and
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19.15.2 any conflict of laws rules or principles which might
refer disputes under the MASTER LICENCE to the laws
of another jurisdiction.
The MASTER LICENCE shall be treated in all respects as an
Alberta, Canada contract. Subject to Article 18 (Alternate
Dispute Resolution (ADR)) the PARTIES irrevocably attorn to
and submit to the exclusive jurisdiction of the courts of
Ontario, Canada with respect to any matter arising under the
MASTER LICENCE
Waiver
19.16 No condoning, excusing, or overlooking by either of the
PARTIES of any default by the other PARTY, at any time or
times, in performing or observing any of the PARTIES'
respective covenants, will operate as a waiver of or otherwise
affect the rights of the PARTIES in respect of any continuing
or subsequent default. No waiver of these rights will be
inferred from anything done or omitted by the PARTIES, except
by an express waiver in writing.
19.17 For greater clarity, the failure by either of the PARTIES or
their authorized representatives, as the case may be, to
require the fulfilment of these obligations or to exercise any
rights herein contained, shall not constitute a waiver, a
renunciation, or a surrender of those obligations or rights.
Contract Always Speaks
19.18 Where a matter or thing is expressed in the present tense, it
shall be applied to the circumstances as they arise, so that
effect may be given to the MASTER LICENCE according to its
true spirit, intent and meaning.
Time is of the Essence
19.19 Time shall be of the essence in this MASTER LICENCE.
Force Majeure
19.20 Except with regard to any payments required pursuant to the
MASTER LICENCE neither of the PARTIES shall be liable for any
default, or delay in performance in any obligations under the
MASTER LICENCE occasioned by any cause beyond the power of
that PARTY, including without limitation:
19.20.1 acts of God, war, riot, fire, explosion, flood,
sabotage, accidents floods, droughts, weather,
natural calamities;
19.20.2 compliance with any demand or requirement of any
governmental agency or authority other than
Agriculture and Agri-Food Canada's Western Research
Branch; or
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19.20.3 restraining orders or decrees of any court or judge
having jurisdiction.
The PARTY affected by such event hereunder shall give written
notice to the other PARTY upon becoming aware of the event.
The affected PARTY shall complete performance as required by
this MASTER LICENCE immediately after removal or cessation of
the cause for the delay.
Headings
19.21 All headings in the MASTER LICENCE have been inserted as a
matter of convenience and for reference only, and in no way
define, limit, enlarge, modify, the scope or meaning of the
MASTER LICENCE or any of its provisions.
19.22 Any reference in the MASTER LICENCE to an Article, paragraph,
subparagraph, will mean an Article, paragraph or subparagraph
of the MASTER LICENCE, unless otherwise expressly provided.
Appendices
19.23....The documents attached hereto as Appendix "A" to " E" form an
integral part of this MASTER LICENCE as fully as if it were
set forth herein in extenso, and consist of:
Appendix "A" - LICENCED TECHNOLOGIES
Appendix "B" - (Arbitration) Rules
Appendix "C" - PRE-MIX Formulation
Appendix "D" - RMS / AgResearch Agreements
Appendix "E" - eVS Infra Red Technologies
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20 LEGAL RIGHTS
Amendments
20.1 No modification or waiver of any provision of the MASTER
LICENCE will be inferred from anything done or omitted by
either of the PARTIES, except by an express amendment in
writing, duly executed by the PARTIES.
Assignment by Canada
20.2 Canada shall not sell, assign or transfer the MASTER LICENCE
or any of the LICENCED Technologies without the prior written
consent of eVS, which consent shall not be unreasonably
withheld.
Sub-Contract Rights
20.3 eVS shall have the right to subcontract any portion of its
obligations under the MASTER LICENCE granted:
20.3.1 all of eVS's material obligations under the MASTER
LICENCE are not subcontracted to any one
subcontractor or group of related subcontractors;
20.3.2 eVS notifies Canada in writing in a timely manner of
any significant subcontracts or subcontractors;
20.3.3 eVS takes all necessary precautions to ensure quality
control and protection of any disclosed CONFIDENTIAL
INFORMATION; and
20.3.4 the subcontract is not a de facto assignment.
Assignment
20.4 eVS shall not assign (or transfer, sell, encumber, sub-licence
or otherwise deal) or permit any such assignment, in whole or
in part, of the MASTER LICENCE, whether such assignment takes
place by way of:
20.4.1 sale of assets;
20.4.2 amalgamation, merger or other reorganization of eVS;
20.4.3 acquisition by a person or persons acting in concert
of a majority interest of the securities of eVS, by a
person or persons acting in concert who did not hold
such a majority interest at the time of the initial
public offering (IPO), at any time after the IPO
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20.4.4 operation of law;
20.4.5 operation of contract; or
20.4.6 otherwise;
without the prior written consent of Canada, which consent
will not be unreasonably withheld. The failure to obtain
written consent shall render such assignment void, and shall
be a material breach of the MASTER LICENCE.
20.5 It will not be unreasonable for Canada to refuse to consent to
any assignment, if it is foreseeable that the assignment might
negatively affect Canada in any way or derogate from the
COMMERCIALIZATION of the LICENCED TECHNOLOGIES.
Notwithstanding the foregoing, Canada may still consent in
exchange for payment of [ ** ] of the consideration . being
exchanged between eVS and any assignee, transferee,
sub-licencee or otherwise.
20.6 Consent to any assignment will not be construed as consent to
any other assignment.
20.7 Failure of eVS to obtain the prior written consent of Canada
to any assignment shall be deemed to be a material breach of
the MASTER LICENCE.
No Third Party Rights
20.8 Nothing expressed or implied in the MASTER LICENCE is intended
to, or shall be construed to confer on or give to, any person
other than the PARTIES and their respective successors and
permitted assigns, any rights or remedies under or by reason
of the MASTER LICENCE.
Remedies Cumulative
20.9 All rights and remedies of the PARTIES are cumulative and are
in addition to, and do not exclude any other right or remedy
provided in the MASTER LICENCE, or otherwise allowed by law.
Mutual Assistance
20.10 The PARTIES will at all times hereafter, upon every reasonable
request of the other, make, do, and execute or cause to be
procured, made, done, and executed, all such further acts,
deeds and assurances for the carrying out of the terms,
covenants and agreements of the MASTER LICENCE, according to
the true intent and meaning of the MASTER LICENCE.
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Facsimile Counterparts
20.11 The MASTER LICENCE may be validly executed by facsimile
transmission and in any number of counterparts, all of which
taken together shall constitute one and the same agreement and
each of which shall constitute an original. MASTER LICENCE.
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21 CROWN GENERAL
No Bribes
21.1 eVS warrants that no bribe, gift, or other inducement has been
paid, given, promised or offered to any Government official or
employee for the obtaining of this MASTER LICENCE.
No Share to Members of Parliament
21.2 Pursuant to the Parliament of Canada Act, R.S.C. 1985, c.P-1,
no member of the House of Commons or Senate will be admitted
to any share or part of the MASTER LICENCE or to any benefit
to arise from the MASTER LICENCE.
Public Office Holders
21.3 It is a term of this MASTER LICENCE that no former public
Office holder, who is not in compliance with the post
employment provisions of the Conflict of Interest and
Post-Employment Code for Public OFFICE Holders, shall derive a
direct benefit from this MASTER LICENCE.
Compliance with Law
21.4 eVS shall comply with all municipal, provincial, state and
federal laws applicable to eVS's obligations under the MASTER
LICENCE in that jurisdiction. The failure by eVS to comply
with such laws shall have a material adverse effect on eVS or
Canada in order to be a grounds of termination as contemplated
in Article 16 (Termination).
Disclosure of Master Licence during Due Diligence Audit - eVS
21.5 If under a commercially prudent practice involving a
commercial transaction a third party conducting due diligence
searches, requires the disclosure of the fact and contents of
the MASTER LICENCE, then eVS authorizes Canada to disclose the
MASTER LICENCE to such a third party, less any material
financial, scientific or business information that could
prejudice eVS or is not relevant to the due diligence search.
Disclosure of Master Licence during Due Diligence Audit -
Canada
21.6 If under a commercially prudent practice involving a
commercial transaction a third party conducting due diligence
searches, requires the disclosure of the fact and contents of
the MASTER LICENCE, then subject to:
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21.6.1 the Access to Information Act, Privacy Act, and any
other then relevant statutes or regulations; and
21.6.2 the protection and confidentiality of any material
financial, business scientific information that could
prejudice Canada or is not relevant to the due
diligence search;
Canada authorizes eVS to disclose the MASTER LICENCE to such a
third party.
Material Terms
21.7 The obligations invested in eVS pursuant to this Article
(Crown General) are material terms of the MASTER LICENCE.
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22 NOTICE
Addresses / Contacts
22.1 Wherever in this MASTER LICENCE it is required or permitted
that notice or demand be given, or served by either PARTY to
or on the other PARTY, such notice or demand will be in
writing and will be validly given or sufficiently communicated
if hand delivered or forwarded by certified mail, priority
post mail, telegram, telex, or facsimile or sent by overnight
delivery by a nationally recognized courier as follows:
The addresses for delivery are:
To eMERGE Vision Systems Inc.:
Chuck Abraham,
President & CEO
10315 102nd Terrance
Sabastian, Florida
United States, 32958
Telephone: (561) 581-7135
Facsimile: (561) 581-7110
To Canada:
Director
Agriculture and Agri-Food Canada
Lacombe Research Centre, 6000 C&E Trail
Lacombe, Alberta, T4L 1W1
Telephone: (403) 327-4561
Facsimile: (403) 382-3156
Deemed Delivery
22.2 Notice will be deemed to have been delivered:
22.2.1 if delivered by hand, upon receipt;
22.2.2 if sent by electronic transmission, forty eight (48)
hours after the time of transmission, excluding from
the calculation weekends and public holidays;
22.2.3 if sent by certified mail, four (4) days after the
mailing thereof, provided that if there is a postal
strike or other disruption, such notice will be
delivered by hand or electronic transmission.
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Change of Address
22.3 The PARTIES may change their respective addresses for delivery
by delivering notice of change as provided in this paragraph.
IN WITNESS WHEREOF this MASTER LICENCE has been executed by duly authorized
representatives of the PARTIES.
Executed in duplicate and effective this 29th day of July 1998.
FOR HER MAJESTY THE QUEEN IN RIGHT OF CANADA:
--------------------------- --------------------------
(Witness) Dr. David Bailey
Director
Lacombe Research Centre
Agriculture & Agri-Food Canada
EMERGE VISION SYSTEMS INC.:
--------------------------- --------------------------
(Witness) Chuck Abraham
President & CEO
FINANCIAL CODE:
--------------------
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APPENDIX "A"
LICENCED TECHNOLOGIES PATENTS
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PATENT LISTING
INFRA-RED THERMOGRAPHY PATENTS
1) Method for detecting meat quality in live animals.
Inventors: S.D. Morgan Jones, A.L. Schaefer, A.K. Tong, S.L.
Scott, C.D.J. Gariepy, R.C. Graham
<TABLE>
<CAPTION>
Country Status Application # Filing Date Patent # Issue Date
------- ------ ------------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C>
US Issued 08/084,993 02/07/1993 5458418 17/10/1995
Canada Pending 2099532 02/07/1993
New Zealand Granted 268868 30/06/1994 268868 13/12/1996
Australia Granted 72248/94 34514 673942 22/04/1997
United Kingdom Granted 94921561 30/06/1994 706654 14/05/1997
Ireland Granted 94921561 30/06/1994 E74008 14/05/1997
Denmark Granted 94921561 30/06/1994 706654 14/05/1997
France Granted 94921561 30/06/1994 706654 14/05/1997
Japan Pending 7-503190 30/06/1994
China Pending 94193218.4 30/06/1994
South Korea Pending 706009/95 30/06/1994
</TABLE>
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2) Method for detecting poor meat quality in groups of live animals.
Continuation in Part of Patent 5,458,418
Inventors: A.K. Tong, S.D. Morgan Jones, A.L. Schaefer
<TABLE>
<CAPTION>
Country Status Application # Filing Date Patent # Issue Date
------- ------ ------------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C>
US Issued 08/543,752 16/10/1995 5595444 21/01/1997
Canada Pending 2234953 16/10/1996
New Zealand Pending 319540 16/10/1996 268868
Australia Pending 72085/96 16/10/1996 673942
Europe(1) Pending 96933288.1 16/10/1996
</TABLE>
(1) Countries designated: Austria, Belgium, Denmark, Finland, France, Germany,
Greece, Ireland, Italy, Netherlands, Portugal, Spain,
Sweden, Switzerland/Liechtenstein, United Kingdom.
3) Process for determining a tissue composition characteristic of an
animal
Inventors: A.L. Schaefer, A.K. Tong
<TABLE>
<CAPTION>
Country Status Application # Filing Date Patent # Issue Date
------- ------ ------------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C>
US Pending 09/039,630 16/03/1998
PCT Search report due PCT/CA98/00209 17/03/1998
17/07/1998
</TABLE>
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4) Antemortem nutrient supplement for livestock.
Inventors: A.L. Schaefer, S.D. Morgan-Jones, R.W. Stanley, I.K.S.
Turnbull, J.R. Johanns
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
Country Status Application # Filing Date Patent # Issue Date
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
US Issued 08/084,989 02/07/1993 5505968 09/04/1996
--------------------------------------------------------------------------------
US Issued 08/465,324 05/06/1995 5728675 17/03/1998
(Continuation)
--------------------------------------------------------------------------------
Canada Pending 2099529 02/07/1993
--------------------------------------------------------------------------------
New Zealand Granted 268322 27/06/1994 268322 02/12/1997
--------------------------------------------------------------------------------
Australia Granted 71,188/94 34511 692784 *
--------------------------------------------------------------------------------
Europe (2) Pending 94920356.6 27/06/1994
--------------------------------------------------------------------------------
Japan Pending 7-503189 27/06/1994
--------------------------------------------------------------------------------
China Pending 94193219.2 27/06/1994
--------------------------------------------------------------------------------
South Korea Pending 706008/95 27/06/1994
--------------------------------------------------------------------------------
</TABLE>
(2) Countries designated: Austria, Belgium, Denmark, Finland, France, Germany,
Greece, Ireland, Italy, Luxembourg, Monaco,
Netherlands, Portugal, Spain, Slovinia, Sweden,
Switzerland, United Kingdom.
* Allowed, 5 / 28/ 98, no issuance date yet.
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APPENDIX "B"
ARBITRATION RULES
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APPENDIX "D"
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RMS / AGRESEARCH AGREEMENTS
1) AgResearch Collaboration Agreement, Electrolyte Therapy, 1 November
1994.
2) AgResearch Licence, NUTRI-CHARGE(R), for Beef Cattle, dated 29 May
1997, effective 1 July 1997.
3) RMS Research Management Systems Inc., Letter of Intent, dated 26 April
1996, & Licence, Swine Electrolyte (pending).
4) RMS Research Management Systems Inc., Licence, NUTRI-CHARGE(R) for Beef
Cattle, dated 5 March 1997, effective 1 January 1997.
5) STS Agriventures Inc., Nutri-Charge Partnership, IBP Inc.,
collaboration overnight NUTRI-CHARGE(R) and Infra-Red Thermography for
Cattle, dated 1 May 1996.
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APPENDIX "E"
eVS INFRA RED TECHNOLOGIES
APPLICATIONS FOR THERMAL IMAGING EQUIPMENT
CYROGENIC COOLED THERMAL CAMERA WITH 3-5 MICRON SPECTRALBAND
Features:
- With single field of view or three field of view step zoom
- With visible camera image overlay
- With precision pan and tilt platform
- With line of sights stabilization
- With remote control
Applications:
- Maritime, navigation, search and rescue, collision avoidance, iceberg
detection
- Airborne navigation, pilotage, night operation, target tracking
- Surveillance for harbors, borders, railways, airports
- Thermal inspection for mechanical or electrical faults, i.e. machinery,
industrial processes and transportation equipment
- Spectral inspections of chemical, vapor, gases, for leaks,
contamination and illegal production
- Spectral surveys for crops, forest, and mineral characteristics
- Medical applications for cryo and vascular surgery, inflammatory
conditions, arthritis, and cancer detection
- Military applications for surveillance, guidance, and fire control
UNCOOLED THERMAL CAMERA WITH 8-12 MICRON SPECTRABAND
Applications:
- Animal health for Equine for injuries and illness
- Exotic animal health and observation
- Human medical applications for cryo and vascular surgery, inflammatory
conditions, arthritis, and cancer detection
- Industrial inspection
- Military applications for night vision, driving, and fire control
- Spectral inspections of chemical, vapor, gases, for leaks,
contamination and illegal production
- Inspection of industrial processes and fault detection
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