EXHIBIT 10.23
AMENDED AND RESTATED
LICENSE AGREEMENT
AMENDED AND RESTATED LICENSE AGREEMENT, dated as of May 7, 1992, and
amended and restated as of March 11, 1998, by and between GalaGen Inc., a
Delaware corporation ("Licensor") and Land O'Lakes, Inc., a Minnesota
cooperative corporation ("Land O'Lakes").
Licensor and Land O'Lakes are parties to that certain License Agreement
dated as of May 7, 1992 (the "1992 License Agreement") by and between
Licensor's predecessor, Procor Technologies, Inc., a Minnesota corporation,
and Land O'Lakes. Licensor and Land O'Lakes desire to amend and restate the
1992 License Agreement as provided herein.
NOW, THEREFORE, in consideration of the promises and mutual covenants
and agreements herein contained, the parties agree that the 1992 License
Agreement shall be amended and restated in its entirety as set forth herein
and shall be in full force and effect as follows:
1. DEFINITIONS. The following terms shall have the indicated
meanings:
"Animal Products" means any food or Functional Food, drug or
medication for use by any animal.
"Approved Collaborators" means the entities and businesses (and, in
each case, their successors) listed on Schedule A attached hereto, as
well as any others requested by Licensor from time to time and approved
by Land O'Lakes.
"Existing Procor Technology" means information, technology and
skills possessed by Licensor as of the date of this Agreement for
obtaining and processing bovine milk-derived, immunoglobulin (IgG)
-based passive immunity products.
"FDA" means the United States Food and Drug Administration.
"Farm Animals" means all animals of the species which are raised on
farms in the United States for food or food related purposes, such as
cows, pigs, goats, sheep, chickens, turkeys, geese and ducks, and shall
also include horses, dogs and cats. "Farm Animals" does not include
animals that are primarily for laboratory use, such as primates, rats
and mice.
"Functional Foods" means foods, food additives, food components,
food ingredients, dietary foods, chewing gum, snack foods, beverages,
engineered foods, supplements and medical foods, in each case which are
marketed for oral consumption
and which provide any kind of nutritional, health or medical benefits or
functionality, including the prevention or treatment of disease, but
excluding (i) Infant Formula, (ii) any prescription drug for human use,
or (iii) any over-the-counter drug for human use regulated by the FDA.
"Infant Formula" means a liquid (or powder to be mixed with water)
for oral consumption by human infants and children as a food or
nutritional supplement.
"New Technologies" means information, technology and skills now
possessed or hereafter developed or acquired by Licensor for products or
services that are not bovine milk-derived, immunoglobulin (IgG)-based
passive immunity products or services. Transgenics is an example of a
New Technology.
"Procor Technology Improvements" means information, technology and
skills developed or acquired by Licensor after the date of this License
Agreement and prior to the fifteenth (15th) anniversary of the date of
this License Agreement for obtaining or processing bovine milk-derived,
immunoglobulin (IgG)-based passive immunity products.
"Reserved Food Product" means any food product that (i) is included
within one of the categories listed on Schedule B attached hereto and
(ii) contains bovine milk-derived, immunoglobulin (IgG)-based passive
immunity ingredients.
"First Refusal Food Product" means any food product that (i) is
included within one of the categories listed on Schedule C attached
hereto and (ii) contains bovine milk-derived, immunoglobulin (IgG)-based
passive immunity ingredients.
2. GRANT OF LICENSE; SUBLICENSING. (a) Upon the terms and conditions
herein set forth, Licensor hereby grants Land O'Lakes a perpetual paid-up,
world-wide license to use the Existing Procor Technology, whether patented or
unpatented, for (i) Animal Products, (ii) Functional Foods, and (iii) Infant
Formula.
(b) Land O'Lakes shall have the right to sublicense to others the right
to use the Existing Procor Technology, whether patented or unpatented, for
use in (i) Animal Products and (ii) Functional Foods. Land O'Lakes shall
provide Licensor with 15 days prior written notice of and a copy of any such
sublicense.
(c) Any sublicense granted by Land O'Lakes pursuant to this Section 2
shall require each sublicensee to maintain the confidentiality of
confidential or proprietary Existing Procor Technology and other confidential
or proprietary information of Licensor.
3. RIGHT OF FIRST REFUSAL. In the event Licensor intends to grant any
third party any right to distribute or market (i) any Animal Products for use by
Farm Animals and
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which are based on New Technologies, or (ii) any Animal Products for use by
animals other than Farm Animals and which are based on Procor Technology
Improvements, then Licensor shall give written notice to Land O'Lakes prior
to any such grant. Such notice shall state the material terms of the
proposed grant, such as a description of the proposed distribution or
marketing activities to be undertaken, the costs or obligations proposed to
be borne by the third party, any quotas or minimums, pricing, commissions or
other compensation, customer or prospect restrictions or requirements, and
territories. Upon receipt of Licensor's written notice, Land O'Lakes shall
have a right of first refusal for a period of ninety (90) days to enter into
an agreement with Licensor to undertake the distribution and marketing
activities described in Licensor's notice on the same terms as described in
such notice. In the event that within such ninety (90) day period Land
O'Lakes does not exercise such right of first refusal, then Licensor shall
have the right for a subsequent ninety (90) day period to conclude its
proposed grant of distribution or marketing rights to the third party on the
terms stated in its notice to Land O'Lakes, free and clear of Land O'Lakes
right of first refusal. If such grant is not completed within such
subsequent ninety (90) day period, then Land O'Lakes right of first refusal
shall again come into effect.
4. ROYALTY. In consideration for the license and rights hereunder
granted, Land O'Lakes shall pay to Licensor a fee of $10,000.00, due and
payable within fifteen (15) days after the date hereof, which amount
constitutes payment for a fully paid license for the rights hereunder
granted. No additional consideration shall be due.
5. DELIVERY OF DOCUMENTATION. Within sixth (60) days after execution
of this Agreement, Licensor shall deliver to Licensee:
(a) such documentation, data and information necessary and appropriate for
the use and commercialization of Land O'Lakes; and
(b) a complete, documented, up-to-date, and correct manufacturing protocol
for all Animal Products which have been manufactured by Licensor to
date.
6. OTHER ACTIVITIES BY LICENSOR. Licensor and Land O'Lakes
acknowledge and agree that Licensor's ability to use, improve, exploit,
license or share Existing Procor Technology, Procor Technology Improvements
and New Technologies shall not be limited or restricted except as
specifically provided herein. By way of example only (and not by way of
limitation), notwithstanding Section 10 below, Licensor has the ability to
compete with respect to any "Functional Food" that is not a "Reserved Food
Product" or "First Refusal Food Product," on its own or with any Approved
Collaborator (as determined from Schedule A hereto as amended from time to
time).
7. REPRESENTATIONS, WARRANTIES AND COVENANTS. Licensor hereby
covenants, represents and warrants that:
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(a) it has full right and power to grant the license and immunities herein
set forth; and
(b) it has no license or other agreements with or obligations,
commitments, liens or mortgages and encumbrances of any kind which may
diminish, encumber or limit in any manner the right granted to Land
O'Lakes hereunder.
(c) it will not divest itself of any Existing Procor Technology, Procor
Technology Improvements, or New Technology that is subject to Land
O'Lakes' Right of First Refusal under Section 3 above, where the
effect of its doing so may be to diminish, encumber or impair the
rights of Land O'Lakes thereunder.
8. TERM. The term of this Agreement is perpetual.
9. CONFIDENTIALITY. Land O'Lakes and Licensor each agrees that during
the term of this Agreement and thereafter it shall not disclose to any third
party any confidential or proprietary information concerning the other party
or the other party's business which has been or is hereafter obtained by it.
Land O'Lakes and Licensor each further agrees to protect and treat with the
same care it uses in the protection of its own proprietary information all
confidential or proprietary information concerning the other party For
purposes of this agreement "confidential or proprietary information" means
all information concerning a party and its research, products, services,
production techniques, trade secrets, marketing, customers and business
plans, except where such information is or becomes generally known to the
public by means other than a breach of this Agreement.
10. NON-COMPETITION. (a) Licensor shall not directly or indirectly,
without Land O'Lakes prior written consent, prior to the fifteenth
anniversary of the date of this Agreement, anywhere in the world use the
Existing Procor Technology for manufacturing or marketing Animal Products or
Reserved Food Product.
(b) Licensor shall not directly or indirectly, without Land O'Lakes
prior written consent, prior to the fifteenth anniversary of the date of this
Agreement, anywhere in the world use the Procor Technology Improvements for
manufacturing or marketing (i) Animal Products for Farm Animals or (ii)
Reserved Food Product.
(c) Land O'Lakes shall not directly or indirectly, prior to the
fifteenth anniversary of the date of this Agreement, anywhere in the world
engage in manufacturing or marketing (i) prescription drugs for human use, or
(ii) over-the-counter drugs for human use which are regulated by the FDA.
(d) Licensor shall not directly or indirectly, without providing Land
O'Lakes with those rights of first refusal and participation provided in Section
11 below, prior to the fifteenth anniversary of the date of this Agreement,
collaborate with any other person or entity
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in manufacturing or marketing any First Refusal Food Product. Without
intending to limit the scope of any other activities that would be permitted
hereunder, Land O'Lakes and Licensor specifically acknowledge and agree that
this Section 10(d) shall not limit (i) any research and development
activities or discussions, which may include third parties, conducted as part
of normal business development activities or (ii) Licensor's ability to
purchase ingredients or other supplies from any supplier.
(e) Licensor shall not directly or indirectly, without Land O'Lakes
prior written consent, prior to the fifteenth anniversary of the date of this
Agreement, collaborate with any other person or entity in manufacturing or
marketing any Reserved Food Product. Without intending to limit the scope of
any other activities that would be permitted hereunder, Land O'Lakes and
Licensor specifically acknowledge and agree that this Section 10(e) shall not
limit (i) any research and development activities or discussions, which may
include third parties, conducted as part of normal business development
activities or (ii) Licensor's ability to purchase ingredients or other
supplies from any supplier.
11. RIGHTS OF FIRST REFUSAL AND PARTICIPATION. (a) If Licensor intends
to collaborate with any other person or entity in manufacturing or marketing
any First Refusal Food Product, then Licensor shall give written notice to
Land O'Lakes prior to entering into any definitive agreement relating
thereto. Such notice shall state the material terms of the proposed
activities, such as a description of the proposed manufacturing, distribution
or marketing activities to be undertaken, the costs or obligations proposed
to be borne by each party, any quotas or minimums, pricing, commissions or
other compensation, customer or prospect restrictions or requirements,
specifications and quality parameters, and territories. Upon receipt of
Licensor's written notice, Land O'Lakes shall have a right of first refusal
for a period of thirty (30) days to enter into an agreement with Licensor to
undertake the manufacturing, distribution and marketing activities described
in Licensor's notice on the same terms as described in such notice. Land
O'Lakes shall also have the right during such thirty (30) day period to
negotiate in good faith its undertaking any part of the activities described
in such notice if and to the extent that (i) Land O'Lakes is qualified to
perform such activities as well or better than the other parties specified in
the notice, consistent with the specifications and quality parameters
required by the other participants and by applicable legal regulations and
(ii) Land O'Lakes agrees to perform such activities on terms which are
commercially reasonable and which are no less favorable than would be
negotiated between unrelated parties in an arm's-length transaction. If
within such thirty (30) day period Land O'Lakes does not exercise such rights
of first refusal or participation, then Licensor shall have the right for a
subsequent ninety (90) day period to conclude its proposed agreement relating
to the activities described in its notice to Land O'Lakes on substantially
the terms stated in such notice and thereafter to engage in such activities
without any time limit, free and clear of Land O'Lakes rights of first
refusal and participation. If such grant is not completed within such
subsequent ninety (90) day period, then Land O'Lakes rights of first refusal
and participation shall again come into effect.
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(b) If Licensor intends to directly engage in manufacturing or
marketing any First Refusal Food Product (as opposed to collaborating with
any other person or entity, which is covered by Section 11(a) above), then
Licensor shall give written notice to Land O'Lakes prior to commencing such
manufacturing or marketing. Such notice shall describe in reasonable detail
the proposed activities. Upon receipt of Licensor's written notice, Licensor
and Land O'Lakes shall negotiate in good faith for a period of sixty (60)
days to have Land O'Lakes undertake any part of the activities described in
such notice if and to the extent that (i) Land O'Lakes desires to and is
qualified to perform such activities consistent with the specifications and
quality parameters required by the proposed activities and by applicable
legal regulations and (ii) Land O'Lakes agrees to perform such activities on
terms which are no less favorable than would be negotiated between unrelated
parties in an arms's-length transaction. If Licensor negotiates with Land
O'Lakes in good faith during such sixty (60) day period, then except to the
extent Licensor and Land O'Lakes agree on Land O'Lakes' participation in the
proposed activities, Licensor shall have the right to proceed with the
activities described in its notice to Land O'Lakes on substantially the terms
stated in such notice and thereafter to engage, without collaborating with
any other person or entity, in such activities without any time limit, free
and clear of any obligation to negotiate with Land O'Lakes regarding Land
O'Lakes' participation in such activities.
12. NO WAIVER. No delay or failure by either party to enforce any
right or claim which it may have hereunder shall constitute a waiver of such
right or claim. Any waiver by a party of any term, provision or condition
hereof or of any default hereunder shall be deemed to be a further or
continuing waiver of such term, provision or condition or of any subsequent
default hereunder.
13. NOTICES. Any notices required hereunder shall be given in writing
and addressed, if to Land O'Lakes, at 4001 Lexington Avenue North, Arden
Hills, Minnesota 55440, attention: President, and if to Purchaser, at 4001
Lexington Avenue North, Arden Hills, Minnesota 55440, Attention: President,
or in each case at such other address as the notifying party may specify in a
notice delivered hereunder to the other party.
14. HEADINGS. The headings in this Agreement are for convenience of
reference only and do not form a part hereof and in no way interpret or
construe this Agreement.
15. INTEGRATION; MODIFICATIONS. This Agreement constitutes the entire
agreement between the parties hereto with respect to the transactions
contemplated hereby, superseding any other understandings or agreements, oral
or written, with respect thereof. By amending and restating this Agreement,
the parties do not intend to and shall not be deemed to have in any way
limited the scope of the waiver and consent provided by that letter agreement
between Land O'Lakes and Licensor dated March 6, 1997 regarding Licensor's
collaboration with Lifeway Foods, Inc. This Agreement shall be amended or
modified only by a written instrument signed by the parties hereto.
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16. SEVERABILITY. If any term of this Agreement shall be deemed
illegal or unenforceable, the other terms hereof shall not be affected
thereby and shall continue in full force and effect.
17. BINDING EFFECT AND GOVERNING LAW. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the respective
parties thereto. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
18. ARBITRATION. (a) All disputes, controversies or claims arising out
of or related to the interpretation or enforcement of this Agreement or any
alleged breach, termination or claim of invalidity of this Agreement shall be
settled finally and without resort to any legal proceedings (except for the
enforcement of the arbitration award) by arbitration conducted in accordance
with the provisions of this Section.
(b) Notwithstanding the foregoing, the remedy at law for any breach of
the provisions of this Section is acknowledged by the parties to be
inadequate, and an aggrieved party seeking relief or remedies for such a
breach shall have the right and is hereby granted the privilege, in addition
to all other remedies at law or in equity, to temporary or permanent
injunctive relief from any court of competent jurisdiction without the
necessity of proving actual damage.
(c) In the event of any dispute of the nature described in paragraph
(a) above (including without limitation any dispute regarding an alleged
breach or non-compliance, or whether a breach or non-compliance has been
cured or cured within the specified period time, or any other aspect of a
breach or cure and the dispute arises under or is related to this Agreement)
either party may submit the dispute to arbitration by delivering a request
for arbitration pursuant to paragraph (d) below. The arbitrator shall be
empowered to require appropriate remedies including, but not limited to,
termination of the obligation to pay amounts otherwise due or any other
rights or obligations hereunder, or any combination thereof. The arbitrator
shall not terminate obligations or rights under this Agreement on the basis
of non-material breaches or unintentional breaches. Neither party shall have
the right to terminate this Agreement or any portion hereof, except insofar
as such termination is effected by arbitration according to the above
guidelines. All arbitration proceedings shall be held in St. Paul, Minnesota
in accordance with paragraph (d) below. Judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof.
Pending final resolution of the dispute, the parties shall continue to
observe the limitations imposed by this Agreement and shall continue to make
payment for amounts due in accordance with the provisions of this Agreement.
(d) If any matter is submitted to arbitration pursuant to this
Agreement, the following procedures will be followed:
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(i) Either party may initiate arbitration proceedings by delivering
a written request for arbitration to the other party stating with
specificity the nature of the dispute or disputes to be arbitrated.
(ii) Arbitration proceedings will be conducted by one arbitrator who
will be chosen by mutual agreement of the parties. If the parties are
unable to agree upon a single arbitrator within ten business days after
receipt of the request for arbitration, then the arbitration proceedings
will be conducted by three arbitrators, one chosen by each of the
parties and the third chosen by the first two arbitrators. Each party
will notify the other party, in writing, of the name and address of its
arbitrator within 25 business days after receipt of the request for
arbitration. Any party failing to give such written notice will forfeit
the right to name an arbitrator, and the second arbitrator will be
selected by the American Arbitration Association (AAA) in accordance
with the Commercial Arbitration Rules then in effect. The two
arbitrators so selected will choose a third. Unless otherwise agreed by
the parties, no arbitrator will be an employee, officer, director,
counsel, shareholder or consultant for any party to this Agreement.
(iii) Each arbitrator will be paid a reasonable fee for his or her
services and will be reimbursed for reasonable and necessary expenses
upon submission of receipts therefor. The fees and expenses of the
arbitrator(s), as well as all other out-of-pocket costs of arbitration
required under the terms of this provision, will be shared equally by
the parties. Costs resulting from requests not required by this
provision will be borne by the party making the request.
(iv) Discovery will be conducted in accordance with the Federal
Rules of Civil Procedure, except as otherwise agreed by the parties or
as ordered by the arbitrator(s). The arbitrator(s) will determine a
discovery schedule which the parties will comply.
(v) Unless otherwise agreed by the parties and the arbitrator(s),
the arbitrator(s) will fix the date and specific location of the
arbitration hearing and give the parties at least 30 days' advance
notice of the date and location. The hearing will proceed in general in
the manner of a non-jury trial under the Federal Rules of Civil
Procedure and the arbitrator shall apply the Federal Rules of Evidence.
The arbitrator(s) will entertain such presentation of sworn testimony
and other evidence, written briefs, and/or oral argument as the parties
may wish to present; however, no testimony or exhibits will be
admissible unless the adverse party was afforded an opportunity to
examine such witnesses and to inspect and copy such exhibits during the
pre-hearing discovery phase. Any party may be represented by counsel at
the hearing. A qualified court reporter will record and transcribe the
proceeding. The arbitrator(s) will apply the substantive law of the
State of Minnesota.
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(vi) Upon request of either party, the arbitrator(s) will provide
both parties with written findings of fact and conclusions of law.
(vii) The decision of the arbitrator(s) will be in writing and will
be signed by a majority of the arbitrators. The decision of the
arbitrator(s) shall be binding. If the parties settle their dispute
during the course of the arbitration, the arbitrator(s) will set forth
the terms of the agreed settlement in an award. Such an award may be
referred to as a consent award.
(viii) Any matters not controlled by this provision will be
controlled by the Commercial Arbitration Rules of the AAA in effect at
the time of the arbitration hearing.
IN WITNESS WHEREOF, this Amended and Restated License Agreement has been
executed by the parties hereto as of March 11, 1998.
LAND O'LAKES, INC.
By /s/ Christopher Policinski
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Its VP of Strategy & Development
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GALAGEN INC.
By /s/ Robert Hoerr
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Its President & CEO
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