MASTER LICENSE AGREEMENT
Effective as of this 3rd day of February, 2004 (the “Effective Date”), this Master License Agreement (“Agreement”) is made by and between BioProgress Technology International Inc. (“BioProgress”), a Nevada Corporation which is a wholly owned subsidiary of BioProgress PLC (“BioProgress Plc”), a company having a principal place of business at Hostmoor Avenue, March, Cambridgeshire, PE15 0AX, United Kingdom, and FMC Corporation, a company having a principal place of business at 1735 Market St., Philadelphia, PA (“FMC”).
WHEREAS, BioProgress, BioProgress Plc, and FMC are entering into herewith a global strategic alliance pursuant to the NRobe™ Agreements (as defined below) whereby FMC will receive an exclusive worldwide license for NRobe™ (as defined below) for all uses, pursuant to which: (i) FMC will be solely responsible for commercialization of NRobe™ and related films, and (ii) FMC will buy NRobe™ Equipment (as defined below) from BioProgress Plc for resale or license with the NRobe™ System to customers around the world;
WHEREAS, BioProgress and BioProgress Plc and FMC have acknowledged that to implement their long-term strategic alliance the NRobe™ Agreements relating to licensing, film supply and equipment sale and development will be required;
WHEREAS, BioProgress is the sole owner of all right, title, and interest in and to certain inventions, technology, know-how, and patent applications (see Exhibits A and B), relating to NRobe™, and BioProgress has the right to grant the rights transferred under this Agreement;
WHEREAS, FMC is desirous of acquiring from BioProgress the exclusive worldwide commercialization rights to the aforesaid inventions, technology, know-how, and patents applications;
WHEREAS, BioProgress Plc agrees to guarantee the performance of BioProgress under this Agreement; and
WHEREAS, BioProgress is willing to grant such rights upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, the parties agree as follows:
Article One - Definitions
1.1 The term “NRobe™ System” as used herein refers to *
1.2 The term “TERRITORY”, as used herein shall mean the entire world.
1.3 The term “LICENSED PATENT APPLICATIONS” shall mean *
1.4 The term “NET SALES PRICE” means the aggregate United States dollar equivalent of gross revenues derived by or payable to FMC or its Affiliates or sublicensees from or on account of the sale of NRobe™ Film to third parties, less (a) reasonable credits or allowances, if any, actually granted on account of recalls or rejections of NRobe™ Film previously sold, and (b) excise taxes, sales taxes, value added taxes, consumption taxes, customs and other duties or other taxes imposed upon and paid with respect to such sales (excluding income or franchise taxes of any kind), (c) separately itemized transportation costs incurred in shipping NRobe™ Film to such third parties, and (d) regular arm’s length trade and volume discounts (collectively, the items in clauses (a), (b), (c) and (d) are referred to as the “Permitted Deductions”). No deduction shall be made for any item of cost incurred by FMC, its Affiliates, or sublicensees in preparing, manufacturing, shipping or selling NRobe™ Film except for Permitted Deductions.
The calculation of NET SALES PRICE shall be subject to the following:
(i) If any such sales to third parties of NRobe™ Film are made in transactions that are not at arm’s length between the buyer and the seller, then the gross amount to be included in the calculation of NET SALES PRICE shall be the amount that would have been invoiced had the transaction been conducted at arm’s length; it being understood that such amount that would have been invoiced shall be determined, wherever possible, by reference to the average selling price of the relevant NRobe™ Film in arm’s-length transactions in the United States of America at the relevant time period.
(ii) If FMC or its Affiliates or sublicensees sells any NRobe™ Film in unfinished form to a third party for resale, then the gross amount to be included in the calculation of NET SALES PRICE arising from such sale shall be the amount invoiced by the third party upon resale, in lieu of the amounts invoiced by FMC or its Affiliates or sublicensees when selling the NRobe™ Film in unfinished form. Otherwise, where FMC or its Affiliate or sublicensees sells any NRobe™ Film in finished form to a third party that does not require a sublicense under the Licensed Patent Applications or any patents then owned or licensed by FMC, its Affiliates or sublicensees for further resale (each such third party hereinafter in the paragraph a “Distributor”), the amount to be included in the calculation of Net Sales shall be the price invoiced from FMC or its Affiliate or sublicensees to the Distributor, not the amount invoiced by the Distributor upon