Document:

Exhibit 10.1 Stevia Sweetener Business Separation Binding Term Sheet dated August 16, 2017

 

EXHIBIT 10.1

 

Stevia Sweetener Business Separation Binding Term Sheet

 

This Stevia Sweetener Business Separation Binding Term Sheet (the “Term Sheet”), dated effective as of the last date on the signature page hereof, is entered into by and between SweeGen, Inc., a corporation organized and existing under the laws of the State of Nevada (“SweeGen”), and Phyto Tech Corp. d/b/a Blue California, a corporation organized and existing under the laws of the State of California (“BC”). SweeGen and BC each are considered a “Party”, and collectively considered as “Parties”. 

 

WHEREAS, BC, together with its Affiliates1, has invested in and successfully built a steviol glycosides based natural sweetener platform inclusive of proprietary intellectual properties in pending and registered trademarks, pending and obtained regulatory approvals, non-profit organization independent verifications, customer relationships, steviol glycosides based products (“Stevia Products”), inclusive of Rebaudioside A (“Reb A”), Rebaudioside M (“Reb M”) and potentially Rebaudioside D (“Reb D”), as well as marketing and promotion expertise and materials in relation to Stevia Products; 

 

WHEREAS, SweeGen is an Affiliate sweetener platform company related to BC; 

 

WHEREAS, BC wishes to transfer or license to SweeGen, and SweeGen wishes to accept, substantially all Reb A, Reb M and potentially Reb D related tangible and intangible assets and manufacturing resources.

 

WHEREAS, the Parties intend to enter into one or more additional agreements to more fully set forth the terms and conditions of the transactions contemplated hereby (the “Closing Documents”), which agreement(s) shall supersede this Term Sheet, but intend that this Term Sheet be binding upon the Parties.

 

NOW, THEREFORE, for good and valuable consideration, the Parties hereby agree as follows:

 

1.Purchase of Reb A Assets 

 

a.Purchase: At Closing (as defined below), BC shall transfer and deliver to SweeGen, and SweeGen shall purchase from BC, the following assets, properties, and rights related to the business conducted by BC with respect to Reb A (subject to the exclusion at the end of this subsection (a), the “Reb A Assets”):  

 

i.Inventory (raw materials, work in process and finished goods), including purchase commitments relating to Reb A, 

 

ii.All unfilled purchase orders from BC’s existing distributors, and customers to the extent such contracts and agreements allow such assignment (the “Reb A POs”), 

 

iii.Customer lists, and 

 

iv.Accounts receivable, 

 

except and excluding (1) the cash and cash equivalents and (2) pre-existing customer orders and customer contracts that require BC to remain the specific supplier of Reb A. The Parties acknowledge and agree that SweeGen is already using the Reb A Assets in its business and may continue to do so until the Closing or earlier termination of this Term Sheet.

 

b.Economics: The Closing Documents shall provide that the purchase price for the Reb A Assets shall be an equal to the fair market value or the Reb A Assets, which amount shall be based upon a valuation performed by an independent third party Valuation Firm mutually selected by the Parties and set forth in the Closing Documents. The form of the purchase price shall be cash and/or a promissory note, as agreed upon by the Parties.  

 

_____________________ 

1 An “Affiliate” means another entity that is controlled by a Party hereto, that controls a Party hereto or that is under common control with a Party hereto and “control” means the direct or indirect ownership of more than 50% of the shares or interests entitled to vote for the directors thereof or the equivalent, for so long as such entitlement subsists, or equivalent power over management thereof.

2.License of Stevia Product Regulatory Approvals and Verifications 

 

a.License: At Closing, BC shall grant to SweeGen, and SweeGen shall accept, a non-exclusive, worldwide, perpetual, royalty-free, transferable, sublicensable license to use the regulatory approvals and independent verifications obtained by BC with respect to Reb A and Reb M, including without limitation, the FDA No Objection Letter Re GRAS Notice No. GRN 000667 on Reb M, Bureau of Chemical Safety | Food Additives section, Health Canada, Government of Canada’s approval on Reb M, GRAS Notice No. GRN 000278 on Reb A 99%., Non GMO Project Verified on Reb M, together with other pending regulatory or verification applications BC filed for Stevia Products with other government authorities such as EFSA and JECFA as well as non-profit organizations (collectively, the “Stevia Product Regulatory Approvals and Verifications”) to promote, market and sell (inclusive of importing and exporting), distribute and support the Stevia Products covered by such approved Stevia Product Regulatory Approvals and Verifications. Such license shall be retroactive to SweeGen’s first commercial sale of Stevia Products covered by such approved Stevia Product Regulatory Approvals or granted independent verifications. The Parties acknowledge and agree that SweeGen is already using approved or granted Stevia Product Regulatory Approvals and Verifications in its business and may continue to do so consistent with the terms of the contemplated license until the Closing or earlier termination of this Term Sheet. 

 

b.Economics: The Closing Documents shall provide that, in consideration for the foregoing license, SweeGen shall reimburse a reasonable portion (to be mutually agreed upon by the Parties based upon a valuation performed by an independent third party Valuation Firm mutually selected by the Parties and set forth in the Closing Documents) of BC’s fair investment in Stevia Product Regulatory Approvals and Verifications, inclusive of costs and expenses in association with preparing for, filing, obtaining and maintaining Stevia Product Regulatory Approvals and Verifications. The form of such reimbursement shall be cash and/or a promissory note, as agreed upon by the Parties. 

 

3.Trademark and copyright license (Reb A and Reb M) 

 

a.Exclusive license: At Closing, BC shall grant to SweeGen, and SweeGen shall accept, an exclusive, worldwide, perpetual, transferable, sublicensable license to use the trademark registration and trademark applications for “Bestevia” (for Reb M), “Good & Sweet” (for Reb A) and “SweeGen” (collectively, the “Marks”), together with the goodwill, copyrights in the marketing and promotional materials (the “Copyrights”) and the business symbolized by the Marks in association. The Parties acknowledge and agree that SweeGen is already using the Marks, together with the goodwill, Copyrights and the business symbolized by the Marks in association in its business and may continue to do so consistent with the terms of the contemplated license until the Closing or earlier termination of this Term Sheet. 

 

b.Economics: The Closing Documents shall provide that, in consideration for the foregoing license:  

 

i.SweeGen shall reimburse a reasonable amount (to be mutually agreed upon by the Parties based upon a valuation performed by an independent third-party Valuation Firm mutually selected by the Parties and set forth in the Closing Documents) of BC’s fair investment in the Marks and Copyrights, inclusive of costs and expenses in association with preparing for, filing, obtaining and maintaining the Marks and the Copyrights. The form of such reimbursement shall be cash and/or a promissory note, as agreed upon by the Parties. 

 

ii.SweeGen shall pay to BC trademark and copyright royalties as follows: With respect to each fiscal year of SweeGen, starting with the fiscal year in which there is a first commercial sale of Stevia Products bearing any of the Marks, SweeGen shall pay royalties to BC equal to a percentage (to be mutually agreed upon by the Parties based upon a valuation performed by an independent third-party Valuation Firm mutually selected by the Parties and set forth in the Closing Documents) of net sales received during such calendar year, provided, that royalties paid shall not exceed a specified annual amount (to be mutually agreed upon by the Parties and set forth in the Closing Documents).  

 

4.Closing Documents 

 

a.The Closing Documents shall contain such terms and conditions as the Parties may mutually agree, including standard representations, warranties and covenants. 

 

b.All pricing in the Closing Documents shall be based upon a valuation performed by an independent third-party valuation firm mutually selected by the Parties (the “Valuation Firm”), and the cost of which shall be borne by SweeGen. 

c.The Parties agree that, in the event of any dispute regarding any pricing in the Closing Documents that arises prior to and is not resolved by the 65th day following the date hereof, such dispute shall be resolved by the Valuation Firm consistent with the intent of subsection (b) above. If pricing issues are submitted to the Valuation Firm for resolution, (i) SweeGen and BC shall furnish or cause to be furnished to the Valuation Firm such work papers and other documents and information relating to the disputed issues as the Valuation Firm may request and are available to that Party or its agents and shall be afforded the opportunity to present to the Valuation Firm any material relating to the disputed issues and to discuss the issues with the Valuation Firm; (ii) the determination by the Valuation Firm, as set forth in a notice to be delivered to both Parties within seven (7) days of the submission to the Valuation Firm of the issues remaining in dispute, shall be final, binding and conclusive on the Parties, absent mathematical error, and shall be used in the calculation of the applicable pricing; and (iii) the Parties will bear in equal shares the fees and costs of the Valuation Firm for such determination. 

 

d.SweeGen agrees to include in the Closing Documents a grant to its Affiliate manufacturer in Asia (the “Manufacturer”) of a non-exclusive, non-transferable and non-sublicensable sub- license to use all the existing know-how, patent registrations, patent applications and other proprietary technologies (“SweeGen Manufacturing IP”) for the purpose of manufacturing of the Stevia Products in the territory of such Manufacturer’s domicile of entity organization only for sale to SweeGen or SweeGen’s designated customers, provided that, (i) as between SweeGen and the Manufacturer, SweeGen Manufacturing IP shall at all times remain the sole property of SweeGen and (if applicable) its customers and (ii) the Manufacturer shall not use, duplicate, or transfer SweeGen Manufacturing IP for any purpose except to accomplish the production objectives for SweeGen and shall not produce any Stevia Products for any third party without the prior written consent of SweeGen.  

 

e.The Closing Documents shall provide that the consummation of the transactions contemplated by the Closing Documents (the “Closing”) shall occur on the 75th day following the date hereof or such earlier date as the Parties may mutually agree and shall occur at 10:00, Pacific time, or such other time as the Parties may mutually agree. 

 

f.If, prior to signing the Closing Documents, a dispute arises between the Parties with respect to the terms of the Closing Documents (other than a dispute to be resolved in accordance with subsection (b) above) and such dispute is not resolved by the Parties prior to the 75th day following the date hereof, this Term Sheet shall automatically terminate, and the Parties shall use commercially reasonable efforts to unwind the transactions contemplated hereby. 

 

5.Miscellaneous 

 

a.This Term Sheet constitutes the entire agreement between the Parties in connection with the subject matter hereof and supersedes all documents and correspondence entered into prior to the date hereof with respect to the subject matter hereof. 

 

b.This Term Sheet may only be amended pursuant to a written agreement between the Parties. 

 

c.If any obligation or provision of this Term Sheet or the application thereof shall, to any extent, be invalid or unenforceable, then the remainder of the Term Sheet or application of such obligation or provision other than that which is held invalid or unenforceable, shall be given full force and effect. 

 

d.The construction, interpretation and performance of this Term Sheet shall be governed by and construed in accordance with the internal laws of the State of Nevada without regard to its conflicts of laws principles. 

 

e.This Term Sheet may be executed in counterparts, all of which shall be considered one and the same agreement. The exchange of copies of this Term Sheet and of signature pages by facsimile or electronic transmission shall constitute effective execution and delivery of this Term Sheet as to the Parties. 

 

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[Signature Page Only]

 

IN WITNESS WHEREOF, the Parties have executed this Term Sheet effective as of the last date written below.

 

 

Phyto Tech Corp. (DBA “Blue California”)

 

Signature: /s/ Steven Chen

Name: Steven Chen 

Title: CEO 

 

Date: 08/16/2017 

 

 

SweeGen, Inc.

 

Signature: /s/ Steven Chen

Name: Steven Chen 

Title: CEO & President 

 

Date: 08/16/2017Exhibit 10.2 First Amendment to Inter-Company Patent License Agreement dated August 16, 2017

EXHIBIT 10.2

 

FIRST AMENDMENT TO INTER-COMPANY PATENT LICENSE AGREEMENT

 

THIS FIRST AMENDMENT TO INTER-COMPANY PATENT LICENSE AGREEMENT (“Amendment”) is entered into as of August 16, 2017 (“Amendment Effective Date”) by and between Conagen Inc., a corporation organized and existing under the laws of the State of Massachusetts (“Licensor”), and SweeGen, Inc., a corporation organized and existing under the laws of the State of Nevada (“Licensee, and, together with Licensor, the “Parties” and each individually, a “Party”). 

 

WHEREAS, the Parties entered into an Inter-Company Patent License Agreement as of the 28th day of November, 2016 (the “Agreement”);

 

WHEREAS, subject to the terms and conditions of this Amendment, the Parties desire to modify and amend the Agreement, as set forth herein.

 

NOW THEREFORE, in consideration of the mutual promises and covenants hereinafter contained and of good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

 

A.Effect of Amendment. This Amendment is made for the purpose of amending and superseding certain of the provisions of the Agreement and is expressly incorporated into and made a part of the Agreement. If provisions of this Amendment and the Agreement conflict, then the provisions of this Amendment will control.  

 

B.Definitions. Except as otherwise defined under this Amendment, any capitalized terms shall have the meaning prescribed to them under the Agreement, as applicable. 

 

C.Amendment. As of the Amendment Effective Date, the Agreement is hereby amended, modified, or superseded as follows:  

 

1. The first paragraph concerning “WHEREAS” is hereby amended by deleting the entire section and replacing it with the following:

 

WHEREAS, Licensor is the owner of or in control of certain know-how, technology and intellectual property relating to the discovery, development, production, distribution, advertising, marketing, commercialization and sale of compounds, substances, products and services related to flavors and sweeteners for use in food and beverages;

 

2. Section 1.3 is hereby amended by deleting the entire section and replacing it with the following:

 

“Licensed Field: shall mean application of the Licensed Technology in the fields of related to flavors and sweeteners for use in food and beverages.”

 

3. Section 3.1 is hereby amended by deleting the entire section and replacing it with the following:

 

3.1.Royalty Obligation. Licensee shall pay royalties to Licensor as follows until this Agreement expires or is terminated: With respect to each fiscal year, starting with the fiscal year in which there is a first commercial sale of Licensed Products (“FCS”), Licensee shall pay royalties to Licensor in the amount of 5% of all Net Sales by Licensee or any of its Sublicensees that have been received by Licensee or its Sublicensee, as applicable, during such fiscal year (the “Earned Royalty”), provided, that royalties paid by Licensee pursuant to this Agreement shall not exceed $15,000,000 in any fiscal year. Notwithstanding the foregoing, no Earned Royalties shall be payable with respect to sales of Licensed Products by Sublicensees to Licensor or any of its Affiliates. 

 

Notwithstanding anything herein to the contrary, the foregoing amendment to Section 3.1 is effective as of the first commercial sale of Licensed Products.

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4. Section 3.2 is hereby amended by deleting the entire section and replacing it with the following:

 

3.2Calculation and Payment of Royalties. Royalties shall be calculated and paid annually. During the term of this Agreement, royalties owed in accordance with Section 3.1 shall be due and payable within ninety (90) days following the end of each fiscal year. Only one payment of Earned Royalties hereunder shall be due and payable to Licensor on any Licensed Product regardless of the number of transfers between entities that such Licensed Product undergoes in the course of its commercialization and regardless of the number of patents or patent applications practiced by Licensee and its Sublicensee(s) in connection with the production and commercialization of the Licensed Product. By way of example and not limitation, where a Sublicensee sells Licensed Products to a distributor or retailer who in turn resells such product to end-users, the Earned Royalties payable hereunder will be paid solely on such first sale of the Licensed Products by such Sublicensee.  

 

5. Section 4 is hereby amended by deleting the entire section and replacing it with the following:

 

4.RECORDS AND REPORTS 

 

4.1Records. Licensee shall keep full, complete and accurate books of account containing all particulars that may be reasonably necessary for determining the royalties payable to Licensor for a period of two (2) years following each fiscal year in sufficient detail to enable the accurate determination of royalties hereunder by Licensee. Said books of account shall be kept at Licensee’s principal place of business. 

 

4.2Audit. The records described in Section 4.1 above shall be available for inspection by an independent certified public accountant retained by Licensor at Licensor’s expense during normal business hours, upon reasonable notice, for as long as this Agreement is not terminated and for two (2) years following the end of such fiscal year, for the purpose of verifying Licensee’s royalty statements. 

 

4.3Reports. Concurrently with the royalty payments required under this Agreement, Licensee shall deliver true and accurate royalty and revenue reports to Licensor, giving such particulars of the business conducted by the Licensee and Sublicensee(s) during the preceding fiscal year as are pertinent to a royalty accounting under this Agreement. These reports shall include at least the following: (a) the quantity and types of Licensed Products sold on a country-by-country basis; (b) total Net Sales price for Licensed Products sold; (c) adjustments used to calculate Net Sales; and (d) total royalties due. 

 

6. The paragraph entitled “Survivability” in Section 8 is hereby amended by deleting such paragraph and replacing it with the following:

 

8.4Survivability. After termination of this Agreement, all provisions relating to payment shall survive until completion of required payments. In addition to those provisions and to any provisions which specifically provide for survival beyond termination, Sections 5.1 and 6 shall survive indefinitely or until the expiration of any time period specified elsewhere in this Agreement with respect to the provision in question. 

 

D.No Other Changes. Except as explicitly modified by this Amendment, the terms of the Agreement shall remain in full force and effect. 

 

E.Governing Law. This Amendment and the respective rights and obligations of the parties hereto shall be governed by and is to be construed in accordance with Nevada law. 

 

F.Severability. Any provision of this Amendment that is held invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective only to the extent of such invalidity or unenforceability and without rendering invalid or unenforceable the remainder of this Amendment or affecting the validity or enforceability of any of the provisions of this Amendment in any other jurisdiction, and the court or tribunal so holding shall be empowered to substitute, to the extent enforceable, provisions similar to said provision, or other provisions, so as to provide to the parties the benefits intended by said provision to the fullest extent permitted by applicable law. 

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G.Counterparts. This Amendment may be executed in more than one counterpart, each of which will be deemed to be an original of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement. A facsimile, PDF or other electronic signature of any Party shall be considered to have the same binding legal effect as an original signature upon delivery thereof. Upon the request of any Party, each Party or signatory hereto shall also deliver this Amendment with its original signature, provided that any failure to do so shall not affect the preceding sentence or any provisions of this Amendment or obligations of any Party or signatory hereto.  

 

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IN WITNESS WHEREOF, the parties, by and through their duly authorized representatives, have executed and delivered this Amendment as of the Amendment Effective Date.

 

 

	LICENSOR:

Conagen Inc.

	LICENSEE:

SweeGen, Inc.

 

	By: /s/ Steven Chen

	By: /s/ Steven Chen

	Print name: Steven Chen

	Print name: Steven Chen

	Print title: President

	Print title: CEO & President

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