License Agreement for Trade Secret and Patent regarding a Formulation to Attract Spodoptera Exigua

Subject matter	License Agreement
Summary of use(s)	License Agreement between ICABIOGRAD and national company B
Purpose or background	To commercialize biopesticide against SPODOPTERA EXIGUA
Contact details	ICABIOGRAD-IAARD Ministry of Agriculture Jl. Tentara Pelajar Nomor 3A Cimanggu, Bogor Jawa Barat 16111 Indonesia

LICENSE AGREEMENT

BETWEEN

INDONESIAN CENTER FOR AGRICULTURAL BIOTECHNOLOGY AND GENETIC RESOURCES RESEARCH AND DEVELOPMENT

AND

COMPANY B

No. : 3616/HK.530/H.11/08/2016

No. : 801/NSG/F/2016

FORMULATION OF SEX PHEROMONE

TO ATTRACT SPODOPTERA EXIGUA

This license agreement is made and signed on Tuesday, the Fifteenth of August, Two Thousand and Sixteen (August 15, 2016) in Bogor, Indonesia, between:

Ir. Mastur, M.Sc. Ph.D: Director of Indonesian Center for Agricultural Biotechnology and Genetic Resources Research and Development, hereinafter referred as Indonesian Center for Agricultural Biotechnology and Genetic Resources research and Development, Indonesian Agency for Agricultural Research and Development, Ministry of Agriculture, located at Jalan Tentara Pelajar No. 3A Kampus Penelitian Cimanggu, Bogor, West Java, as the FIRST PARTY.

Ir. NNNN, M.Sc: Director of Company B, hereinafter referred as Company B, located at Bogor, West Java, as the SECOND PARTY.

Henceforth, will be referred to as the FIRST PARTY and the SECOND PARTY, and collectively as the PARTIES.

First of all the PARTIES would like to clarify the following circumstances::

(1) The FIRST PARTY is the inventor of the Sex Pheromone Formulation to attract Spodoptera exigua as a result research from Indonesian Center for Agricultural Biotechnology and Genetic Resources Research and Development, thus Intellectual Property of the formula belongs to Indonesian Agency for agricultural Research and Development and has registered for Patent Number Protection P00201000047 on January 22, 2010, at the Directorate General of Intellectual Property, Ministry of Law and Human Rights.

(2) The FIRST PARTY has the right to use itself by producing, marketing and commercializing the Spodoptera exigua Sex Pheromone Formulation, or allowing other parties to use the Pheromone Formulation of Spodoptera exigua.

(3) The SECOND PARTY of the company is engaged in agriculture and has adequate human, management, capital, equipment and facilities capabilities to produce and develop the Pheromone Formulation of Spodoptera exigua.

(4) This Agreement is made based on the laws and regulations of the Republic of Indonesia as follows:

Law No. 14/ 2001 on Patent (State Gazette 2001 No. 109, Supplement to the State Gazette No. 4131);
Law No. 15/ 2001 on Trademark (State Gazette 2001 No. 110, Supplement to State Gazette No. 4132);
Law No. 18/2002 on National System of Research, Development and Application of Science and Technology (State Gazette 2002 No. 84/2002, Supplement to the State Gazette No. 4219);
Government Regulation No. 20/2005 on Intellectual Property and Technology Transfer Research and Development by Universities and Institutes for Research and Development (State Gazette 2005 No. 430);
Government Regulation No. 29/2009 on Procedures for Determining Tax Rates, Payment, and the Deposit of Unpaid Non-Tax State Income (State Gazette 2009 No. 58, Supplement to the State Gazette No. 4995);
Government Regulation No. 48/2012 on Types and Tarif of Non-Tax State Revenue Applicable to the Ministry of Agriculture (State Gazette 2012 No. 94, Supplement to State Gazette No. 5307);
Minister of Agriculture Ministerial Regulation No. 06/Permentan/OT.140/2/2012 on Agricultural Research and Development Cooperation Guidelines;
Minister of Agriculture Ministerial Regulation No. 99/Permentan/OT.140/10/2013 on Second Amendment over the Minister of Agriculture Ministerial Regulation number 06/Permentan/OT 140/2/2012 on Agricultural Research and Development Cooperation Guidelines;
Minister of Agriculture Ministerial Regulation No. 29/Permentan/OT.140/3/2013 on the Organization and Operation of Institute of Agricultural Technology Transfer;
Minister of Finance Ministerial Regulation No. 426/KMK.06/2013 on Approval on the Use of Part of the Non-Tax State Revenue Fund at the Indonesian Agency for Agricultural Research and Development, Ministry of Agriculture;
Minister of Agriculture Ministerial Regulation No. 05/OT.140/I/2014 on Legal Document Drafting Guidelines for Cooperation Agreements within the Ministry of Agriculture;

Based on the circumstances above, the PARTIES in the spirit of professionalism and good faith has agreed to create a license agreement for Exi Pheromone formulation to attract Spodoptera exigua, with the following conditions:

Article 1

DEFINITION

In this Agreement, the following terms shall have the following meanings:

Pheromone Sex Formulation to attract of Spodoptera exigua, henceforth referred to as Exi Pheromone, shall mean an invention to control onion caterpillar which contains 12-tetradeca dienyl acetate, (Z)-9-tetradecanol and buthylated hydroxy toluene (BHT) synthetic compounds that act as sex pheromones to attract adult insects and is used as baits in a trap to attract male insects to enter the trap and Patent protection number P00201000047 has been registered on January 22, 2010, at the Directorate General of Intellectual Property, Ministry of Law and Human Rights.
Exi Pheromone is the trademark's name of the sex pheromone formulation to attract Spodoptera exigua which is registered with registration number D002009017209 on May 26, 2009.
License shall mean permission granted by a Trade Secret Holder to another party through an agreement based on rights granted (not rights transferred) to obtain economic benefits from a Trade Secret, which is protected within certain period and condition.
Non-Exclusive License in this agreement shall mean the granting of license to more than one licensees and the licensees do not have the rights to transfer this agreement.
The Cost of Sales, herein after abbreviated as selling cost, refers to the price determined from all costs incurred in producing Exi Pheromone which is then assessed from the sales price of the factory loco/company after deducting the applicable tax.
Technology Transfer shall mean the transfer of skills to utilize and comprehend science and technology between institutions, agencies, or persons, both domestically and internationally.
Cooperation shall mean the agreement between Indonesian Agency for Agricultural Research and Development as the inventor of technology and domestic or international partners to market and/or develop the product.
Cooperation Partner shall mean the Central Government, Local Governments, Business Entities, Universities, and non-governmental Organizations.
Patents shall mean exclusive rights granted by the state to inventors for the their inventions in the field of technology which for a certain period of time carry out their own inventions or give their consent to other parties to implement it.
Invention is an inventor's idea poured into a specific problem solving activity in the field of technology in form of a product or process, or an improvement or development of a product or process.
An Inventor is an individual person or group of persons who jointly carries out an idea poured into an activity that produces invention.
Royalty shall mean the economic compensation given to the holder of Trade Secret rights in exchange of granted license.
Institute for Agricultural Technology Transfer, hereinafter referred to as IATT, shall mean the technical implementing unit in the field of research and development which report to the Director General of the Indonesian Agency for Agricultural Research and Development.

Article 2

GOALS AND OBJECTIVES

The objective of this License Agreement is to commercially transfer the technology for Exi Pheromone

Article 3

SCOPE

The scope of this License Agreement includes:

Determination of the licensed technology;
Determination of royalty; and
Technology transfer mechanism.

Article 4

LICENSE

The License Agreement of Exi Pheromone as referred to in Article 3 is Non-Exclusive, given to the SECOND PARTY and it production can be carried out in all regions of Indonesia and the marketing covers the territory of Indonesia and / or for export purposes
The commercialization activities as mentioned in Article 2, includes:
1. Production of Exi Pheromon;
2. Promotion, Distribution and Marketing of Exi Pheromon.

Article 5

DURATION

This agreement shall come into force after its signature by the PARTIES for a period of 5 (five) years with evaluation carried out every year, and can be extended to a duration consented by the PARTIES.

Article 6

RIGHT AND OBLIGATIONS

The FIRST PARTY has the following rights:
1. Receiving royalty payments of 2% (two percent) from the selling price of Exi Pheromone at distributor level from the SECOND PARTY;
2. Receiving commercialization work plans from the SECOND PARTY no later than 3 (three) months after this agreement is signed;
3. Receiving annual commercialization plans from the SECOND PARTY which covers the production, promotion, distribution and marketing of Exi Pheromone before the first month (January) of the following year;
4. Receiving commercialization reports from the SECOND PARTY which details the amount of Exi Pheromone produced, distributed and sold annually (January to December);
5. Utilizing the Exi Pheromone formula in research, development and dissemination activities; and
6. Verifying the amount of calculation of Exi Pheromone sales to determine the amount of royalty to be paid by the SECOND PARTY, in this case represented by the IATT.
The SECOND PARTY has the following rights:
Carrying out the production, promotion, distribution and marketing activities of Exi Pheromone;
Receiving direct or indirect guidance and supervision from the FIRST PARTY for quality assurance of Exi Pheromone product; and
Obtaining and using data, information, recommendation and technology from this cooperation after getting written approval from the FIRST PARTY; and
Obtaining other trademarks registered by Directorate General of Intellectual Property, Ministry of Law and Human Rights and communicating that to the FIRST PARTY.
The FIRST PARTY has the following obligations:

Providing information and knowledge for the production of Exi Pheromone;
Keeping the formula of Exi Pheromone secret from other non-contracted parties; and
Providing guidance and supervision in producing good quality Exi Pheromone to the SECOND PARTY, if requested and funded by the SECOND PARTY

The SECOND PARTY has the following obligations:
Paying royalties to the FIRST PARTY at the rate of 2% (two percent) of the sale price of Exi Pheromone at the distributor level;
Carrying out production, promotion, distribution and sale of Exi Pheromone;
Submitting a commercialization plan no later than 3 (three) months after this License agreement is agreed and signed by the PARTIES, which contains:

production plans;
promotion plans;
distribution plans;
marketing plans; and
estimation sale volume for a period of one year from the commencement of the commercialization plan;

Managing and obtain permits needed to carry out the commercialization;
Submitting annual reports on production, promotion, distribution and sales no later than January of the following year; and
Putting the "Agro Inovasi" logo proportionally on each package of Exi Pheromone product.

Article 7

ROYALTY PAYMENTS

The obligation of the SECOND PARTY is to pay royalties as stated in Article 6 paragraph (4) in exchange for the use of the technology to the FIRST PARTY, with the following conditions:

Royalty payment is 2% (two percent) from the sale price of Exi Pheromone at distributor level, multiplied by the sales volume for 1 (one) calendar year.
Payment of royalties by the SECOND PARTY to the FIRST PARTY as stated in paragraph (1) shall be made no later than March 31 of the following year before the due date, through Bank Rakyat Indonesia Bogor Branch with Account Number 0012.01.001890.30.8 belonging to BPn 023 IATT as notified in writing by the FIRST PARTY.
If the payment of royalties as stated in paragraph (2) is made after the due date, the SECOND PARTY shall be subjected to a fine of 2% (two percent) per month in accordance with the laws and regulations.

Article 8

REPORTS

THE SECOND PARTY is required to create complete, accurate and detailed reports and records regarding the sale of Exi Pheromone, to be used as the basis for calculating royalties that must be paid by the SECOND PARTY according to this agreement, and the records must be kept for 2 (two) years after inspection or in accordance with existing laws.
THE SECOND PARTY is required to create reports on commercialization of Exi Pheromone to the FIRST PARTY, which includes the amount of annual sales for each period, and the use of public accounting services is strongly encouraged.

Article 9

VERIFICATION

The SECOND PARTY allows the FIRST PARTY's inspector to coordinate with IATT to verify the total sales calculation for Exi Pheromone and the value of royalties to be paid.
The verification activity as referred to in paragraph (1) by IATT shall be communicated to the SECOND PARTY at least 10 (ten) days before and implemented no more than 2 (two) times in one calendar year.
Costs required for verification activities as referred to in paragraph (2) shall be borne by each party.

Article 10

SETTLEMENT OF DISPUTES

If there are disputes in the interpretation and / or implementation of this license agreement, the PARTIES agree to settle it by deliberation to reach a consensus, which will be mediated by IATT.
In disputes where a consensus cannot be reached, the PARTIES agree to resolve it through Arbitration.
Arbitration as referred to in paragraph (2) consists of 3 (three) Arbitrators, two Arbitrators are appointed by the PARTIES, who will then appoint the third Arbitrator to act as the Chairperson of the Arbitration Tribunal.
In case both Arbitrators chosen by the PARTIES as referred to in paragraph (3) fail to appoint a third Arbitrator who will sit as the Chair of the Arbitration Tribunal within 30 (thirty) days, the PARTIES agree to defer to Head of Bogor District Court to appoint the third Arbitrator.
The fees required for carrying out Arbitration are charged to the PARTIES.
The Arbitration Council as referred to in paragraph (4) stipulates the procedures and implementation of dispute resolution and makes decisions based on the majority votes of the members, and the decision is absolute and binding for the PARTIES.
Within the period of dispute resolution, the PARTIES by mutual agreement or the approval of the Arbitration Body can implement this license agreement as before, except for activities that are being disputed.

Article 11

FORCE MAJEURE CONDITIONS

Force majeure is an incident that is beyond human control and cannot be avoided, so that an activity cannot be carried out or cannot be carried out properly.
Force majeure as referred to in paragraph (1) includes earthquakes, floods, hurricanes, fires, rebellions, wars, sabotages and riots.
A statement of force majeure as referred to in paragraph (2) can be made by the SECOND PARTY and communicated to the FIRST PARTY at no later than 7 (seven) days after the event of a force majeure, with an evidence of force majeure statement from the head of authorized agencies.
Losses due to force majeure are the responsibility of each PARTY.
Force majeure as referred to in paragraph (2), does not eliminate the rights and obligations that have been carried out before the occurrence of force majeure.
Force majeure can stop the implementation of this agreement based on the consent of the PARTIES.

Article 12

CORRESPONDENCE

Correspondence for the implementation of this agreement can be carried out in writing, telephone, facsimile and/or electronic mail listed below:
1. The FIRST PARTY :
  - Institution : Indonesian Center for Agricultural Biotechnology and

Genetic Resources Research and Development

Address : Jalan Tentara Pelajar No. 3A Kampus Penelitian

Pertanian Cimanggu, Bogor, West Java

Phone : 0251-8337975
Fax : 0251-8338820
E-mail : bb_biogen@litbang.pertanian.go.id

The SECOND PARTY :

Company : Company B
Address : Bogor, West Java
Phone : 0251-0000000
Fax : 0251-0000000
E-mail : companyB@gmail.com

Notification or communication is considered to have been carried out, if evidenced by:
Acknowledgement of receipt of written letters;
Record of delivery and receipt issued by the post office or other delivery services;
“OK” sign in fax machines;
“Message sent” status in e-mails.
Any changes as referred to in paragraph (1) must be communicated by the PARTIES.

Article 13

DISCONTINUATION OF AGREEMENT

If in the implementation of this agreement, the FIRST PARTY or the SECOND PARTY feels aggrieved due to negligence and/or violation of the conditions stated in this agreement, then this agreement can be reviewed.
The PARTIES can terminate this agreement at any time unilaterally, in the following cases:
1. Violation of the provisions stated in this agreement, with no rectification within 60 (sixty) days after a written notification from the PARTIES;
2. The SECOND PARTY is for any reason, except for force majeure as referred to in Article 11, not able to carry out the production and marketing of Ostri Pheromone by a maximum period of 1 (one) year from the date of the signing of this agreement; or
3. all or part of the essential activities causing this agreement being canceled, due to seizure or an action by law enforcement agencies that cannot be solved within 30 (thirty) calendar days from the date of the notification of legal action by law enforcement agencies.
The PARTIES agree to terminate this agreement.

Article 14

CONSEQUENCES OF TERMINATION OF AGREEMENT

If the termination of the agreement as referred to in Article 13 is initiated by the FIRST PARTY, the SECOND PARTY is permitted to continue using all existing raw materials to produce the Exi Pheromone until production from those materials ends, henceforth the SECOND PARTY must stop its commercialization.
If termination of the agreement referred to in Article 13 is initiated by the SECOND PARTY, the SECOND PARTY must immediately submit all materials, documents and information without exception to the FIRST PARTY, and stop the production, promotion, distribution and sales of Exi Pheromone.

Article 15

MISCELLANEOUS

The PARTIES are prohibited from transferring this Agreement.
The PARTIES are prepared to cover all costs relating to the implementation of their respective rights and obligations, in accordance with this agreement.
This agreement is based on the laws and regulations of the Republic of Indonesia.

Article 16

AMENDMENT

Other matters that have not been regulated and/or clearly stated in this Agreement will be regulated later in addendums and/or amendments in the agreement and signed by the PARTIES.
The amendments of agreement as referred to in paragraph (1) shall become one entity which is an integral part of this Agreement.

Thus this agreement was made and signed by the PARTIES in 2 (two) copies with appropriate stamp duties and institutional stamps, where each copy has the same legal force, and several copies without stamps were also created for various purposes.