EXHIBIT 10.13
FIRST AMENDMENT TO ASSIGNMENT AND AGREEMENT
This FIRST AMENDMENT TO ASSIGNMENT AND AGREEMENT (this "First Amendment") is
made and entered into EFFECTIVE as of March 30, 2002, by and between XXXXXX X.
XXXXXX ("Assignor"), an individual residing in Lutz, Florida; GLOBAL ENERGY &
ENVIRONMENTAL RESEARCH, INC. ("XXXX"), a Florida corporation; and GLOBAL ENERGY
GROUP, INC. ("Assignee"), a Delaware corporation.
W I T N E S S E T H:
For and in consideration of the mutual promises and covenants herein contained
and the mutual advantages accruing to Assignor and Assignee, and for other good
and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, Assignor and Assignee hereby agree as follows:
1. BACKGROUND. Assignor and XXXX entered into that certain Assignment &
Agreement identified on Exhibit A to this First Amendment (the "Original
Agreement"). For the purposes of this First Amendment, each capitalized term
appearing in this First Amendment shall have the definition applicable to such
term in the First Amendment, unless the context in which such term is used in
this First Amendment clearly indicates otherwise. Assignee has assumed the
operations of XXXX, and accordingly the parties have agreed that Assignee should
be substituted for XXXX under the Original Agreement. In addition, the parties
have agreed that certain terms of the Original Agreement shall be modified.
2. ASSIGNMENT, ASSUMPTION AND SUBSTITUTION. XXXX does hereby assign to
Assignee all its right, title and interest in, to and under the Original
Agreement, and Assignor does hereby consent and agree to such assignment.
Assignor, Xxxx and Assignee further agree that (i) Assignee is hereby
substituted for XXXX under the Original Agreement, as if Assignor and Assignee
were the original parties to the Original Agreement, (ii) Assignee does hereby
accept, assume and agree to pay and perform, as and when due, and as if Assignee
had been an original party to the Original Agreement, all obligations of XXXX
and all obligations of the party designated "Assignee" under the Original
Agreement, (iii) XXXX is hereby released from, is no longer a party to, and
shall have no further liability or obligation under or with respect to the
Original Agreement. Xxxx does hereby grant, bargain, assign and transfer to
Assignee all its right, title and interest in, to and under all Assigned
Products and all Assignor Patent Rights.
3. ELIMINATION OF INITIAL ROYALTY PAYMENTS. Until April 1, 2004, the
royalty rate under the Original Agreement shall be 0%, and the minimum annual
royalty shall be $0, and no royalty or other payment shall be due or payable
under the Original Agreement until on or after April 1, 2004. All royalty
percentages and minimum annual royalty amounts for periods beginning on or after
April 1 2004 shall be as set forth in the Original Agreement. Notwithstanding
anything to the contrary, however, (i) this Section 3 shall not apply as to any
Assigned Product during any period during which any person or entity not
affiliated with Assignee has the right, by way of a
license by Assignee to such person or entity, to manufacture, market and sell
such Assigned Product, and (ii) if Assignee sells all or substantially all of
its right, title and interest in, to and under an Assigned Product and the
related Assignor Patent Rights to any person or entity not affiliated with
Assignee, then this Section 3 shall not thereafter apply as to such Assigned
Product.
4. ADJUSTMENT IN ROYALTY RATES. Every reference in the Original Agreement
to "five percent" or "5%" is amended to read "three percent" or "3%,"
respectively.
5. DEFINITION OF "GROSS SALES PRICE." The definition in the Original
Agreement of "Gross Sales Price" in Paragraph1.6 of the Original Agreement is
amended by the addition of the following at the end of such definition:
"When an Assigned Product is included as part of an Assignee Product
containing, incorporating or including products and materials other
than Assigned Products, any royalty or other amount payable under this
Assignment and Agreement shall be payable only with respect to the
portion of the Gross Sales Price for such Assignee Product allocable to
the included Assigned Product(s). The Gross Sales Price allocable to
such included Assigned Product(s) shall be the cost of such Assigned
Product(s) increased by the markup on the entire Assignee Product.
Example: ASSIGNEE sells a 10-ton package rooftop unit containing an
Assigned Product for $5,000. The cost of the entire package is $3,846,
meaning that the package is sold with a 30% markup. The aggregate cost
of the Assigned Product(s) included in the system is $540. Accordingly
the "Gross Sales Price" of such Assigned Product(s) in this example
would be $702. For the purposes of this paragraph, (i) "Assignee
Product" means and includes any item, product, system and/or package,
and/or any collection or aggregation of items, products, systems and/or
packages, marketed and either licensed or sold by ASSIGNEE, (ii) any
reference to the "cost" of an Assignee Product or any element,
component, part or portion of an Assignee Product means the cost
thereof to ASSIGNEE (or other person selling such Assignee Product) as
reflected on the books and records of the seller, and (iii) any
reference to the "markup" on, of or with respect to any Assignee
Product means the excess, if any, of the gross selling price of such
Assignee Product over the cost thereof, divided by such cost, expressed
as a percentage." With respect to any Assigned Product or Assignee
Product sold by any Licensee, royalties and other amounts are payable
under this Assignment and Agreement only with respect to the amounts
actually received by ASSIGNEE and not with respect to the amounts
received by the Licensee.
Every reference in the Original Agreement to the capitalized term "Gross Selling
Price" is amended to read "Gross Sales Price."
6. DOCUMENTATION. Each party, at its own expense and without further
consideration, will execute and deliver such other documents, and take such
other action, as may be necessary or appropriate in order to consummate more
effectively the transactions contemplated hereby,
including in particular as necessary or appropriate to effectuate the transfer
of all Assigned Products and all Assignor Patent Rights to Assignee.
7. EFFECT OF AMENDMENT; NO OTHER MODIFICATION. This First Amendment
together with the Original Agreement constitute the entire agreement between
Assignor and Assignee as to the subject matter of the Original Agreement and
this First Amendment, and there are no other agreements, understandings,
restrictions, warranties or representations between the parties relating to such
subject matter. To the extent that the Original Agreement is inconsistent with
the terms of this First Amendment, it is superseded and controlled by this First
Amendment. Any provision of the Original Agreement inconsistent with this First
Amendment is hereby amended to be consistent with this First Amendment. Other
than as amended by this First Amendment, the Original Agreement remains in full
force and effect, and, except as modified by this First Amendment, the terms and
provisions of the Original Agreement are hereby ratified and affirmed.
8. COUNTERPARTS AND FACSIMILE. This First Amendment may be executed in two
counterparts, each of which shall be considered an original, but both of which
together shall constitute one and the same instrument, and shall become
effective when each of the parties has executed at least one of the counterparts
even if both parties have not executed the same counterpart. The parties
expressly acknowledge and agree that the printed product of a facsimile
transmittal shall be deemed to be "written" and a "writing" for all purposes of
the Original Agreement and this First Amendment.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals to
indicate that each of them does fully understand and agree with and to the
foregoing.
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
("Assignor")
GLOBAL ENERGY GROUP, INC.
("Assignee")
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxx
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Title: President
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GLOBAL ENERGY & ENVIRONMENTAL
RESEARCH, INC.
("XXXX")
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
----------------------------------------
Title: President
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EXHIBIT A
IDENTIFICATION OF ORIGINAL AGREEMENT
DATE OF ORIGINAL AGREEMENT:
August 10, 1999
"ASSIGNED PRODUCT" UNDER ORIGINAL AGREEMENT:
Direct Refrigerant Geothermal Heat Exchange or Multiple Source
Subcool/Postheat/Precool System and Method Therefor as disclosed and
claimed in the United States Patent Application dated October 6, 1998
and any improvements thereon that are dominated by U. S. Patent
Application Number 097/167,429
RELATED PATENT OR PATENT APPLICATION NOS. (IF ANY):
U. S. Patent #6,167,715
U. S. Patent Application #097/167,429
This is an Assignment and Agreement, dated this 10th day of August,
1999, by and between Xxxxxx X. Xxxxxx of 0000 Xxxxxxxx Xxxxx, Xxxx, Xxxxxxx
00000 (hereinafter "ASSIGNOR") and Global Energy Environmental Research, Inc., a
State of Florida corporation, having its mailing address at 00000 X. Xxxxxxxx
Xxx., Xxxx, Xxxxxxx 00000 (hereinafter "ASSIGNEE").
ARTICLE I - DEFINITIONS
1.1 "Assigned Product" shall mean the Direct Refrigerant Geothermal Heat
Exchange or Multiple Source Subcool/Postheat/Precool System and Method
Therefor as disclosed and claimed in the United States Patent
Application dated Oct. 6, 1998 and any improvements thereon that are
dominated by U.S. Patent Application Number 097/167,429.
1.2 "Assignor Patent Rights" shall mean U.S. Patent Application Number
097/167,429 or any additional patent applications filed on any
improvements of the Assigned Product, all U.S. patents issuing thereon,
and any corresponding foreign patents and patent applications
throughout the world, where and if XXXX has elected to provide the
necessary funding to secure international patents, which lay claim
convention priority upon, or is dominated by, such United States patent
or patent application.
1.3 "Licensee" shall mean any entity, whether a partnership, firm, company,
corporation or otherwise to which ASSIGNEE grants a license under
Assignor's Patent Rights.
1.4 "Valid Claim" shall mean any claim in any patent application that is
allowed, resulting in an issuance of a United States Letters of Patent
or any patent not yet expired included in the Assignor Patent Rights in
the respective countries which has not been denied, nor invalidated by
a decree of a Tribunal of competent jurisdiction, from which no further
appeal is available.
1.5 "Commercially Exploited" shall mean the use, sale, lease or other
activity serving to generate income on the Assigned Product.
1.6 "Gross Sales Price" shall mean the gross selling price received by
Assignee and its Licensees of the Assigned Product, F.O.B. factory,
without any deductions for cash discounts, including retail, wholesale
and direct sales by mail order.
ARTICLE II - ASSIGNMENT OF RIGHTS
2.1 ASSIGNOR hereby assigns to ASSIGNEE all of the Assignor Patent Rights
throughout the world.
2.2 The assignment granted under Paragraph 2.1 of this Article II includes
the right to grant licenses to import, make, have made, use and sell
the Assigned Product
throughout the world. ASSIGNEE shall give written notice to ASSIGNOR
with respect to each license granted by the ASSIGNEE.
2.3 The assignment of rights hereunder is limited to those rights included
in Assignor Patent Rights.
ARTICLE III - ROYALTY
3.1 In consideration of the Assignment of Paragraph 2.1 of Article II,
Assignee shall pay Assignor, royalties as set forth in Paragraph 3.2 of
this Article III.
3.2 ASSIGNEE agrees to pay ASSIGNOR an accrued royalty in the amount of
five percent (5%) of the Gross Selling Price for each product
manufactured, distributed, sold, etc. that is covered by/under, or
becomes covered by a Letters of Patent, derived or accomplished by the
Patent Application set forth in Paragraph 1.1 of Article I. To the
extent ASSIGNEE grants a license to a third party under Assignor Patent
Rights and receives royalties or other remuneration therefor, then
ASSIGNEE agrees to pay ASSIGNOR five percent (5%) of such royalties
and/or license fees.
3.3 No royalty shall be paid twice on the same Assigned Product and any
customer or ASSIGNEE or its Licensees is entitled to resale or export
the Assigned Product anywhere in the world without the payment of
additional royalties.
3.4 Royalties will accrue on each product manufactured, distributed, or
sold that is covered by/under a Patent Pending Application. Royalties
will not be paid or disbursed until such time as the actual Patent has
issued. In the event that a Patent Application is; a) abandoned, b)
allowed no claims, c) rejected, or d) determined to be without the
ability to file arguments that would result in Valid Claims, then no
royalty would be paid, and all royalties accrued would revert to
ASSIGNEE. In the event a Patent Application results in an issuance of a
United States Letter of Patents, then all accrued royalties will be
dispersed in accordance with Paragraphs 6.1 and 6.2 of Article VI.
3.5 Minimum Annual Royalties are as follows:
Upon and from the date of Patent Issuance -
Year One - 0
Year Two - 0
Year Three - $ 10,000.00
Year Four - $ 25,000.00
Year Five - $ 40,000.00
Year Six - $ 60,000.00
Year Seven - $ 75,000.00
Every Year Thereafter Until the Expiration of the Letters of Patent -
$100,000.00
ARTICLE IV - COMMERCIAL EXPLOITATION AND PATENT PROSECUTION
4.1 ASSIGNEE shall use reasonable efforts to COMMERCIALLY EXPLOIT the
Assigned Product.
4.2 ASSIGNEE shall have control of the preparation and prosecution of all
pending patent applications, in respect to the aforementioned patents
as covered in the Assigned Product and any pending patent applications,
in respect to the aforementioned patent application as covered in the
Assigned Product, included within Assignor Patent Rights.
4.3 ASSIGNEE shall pay for the expenses and costs relating to such
preparation and prosecution of those applications contemplated by
Paragraph 4.2 of the Article IV.
4.4 ASSIGNEE shall pay for any taxes, annuities, maintenance fees, renewal
and extension charges, and other out-of-pocket expenses, and related
legal fees, in connection with any patent or patent applications
included within the Assignor's Patent Rights.
4.5 Should ASSIGNEE decided, in its sole and absolute discretion, to
abandon any pending patent application or to stop paying for the
expenses and costs contemplated by Paragraphs 4.3 and 4.4, ASSIGNEE
shall so notify ASSIGNOR to allow ASSIGNOR the opportunity to assume
prosecution of the pending patent application and to begin paying for
all of the expenses and costs.
ARTICLE V - RECORDS
5.1 ASSIGNEE shall submit or cause to be submitted to ASSIGNOR within one
month following each semi-annual period (six months) a report setting
forth (1) the number and (2) the Gross Sales Price of the Assigned
Product, which ASSIGNEE has Commercially Exploited and (3) the amount
of licensing royalties and remuneration received during that
semi-annual period and which have not been previously reported.
5.2 ASSIGNEE agrees to keep books and records of account pertaining to
Paragraph 5.1 of this Article V in such a manner as to permit the
correctness and accuracy of any of the reports rendered in compliance
with Paragraph 5.1 of this Article V to be ascertained. ASSIGNEE shall
permit so much of the books and records thereof as pertain to the
subject matter of this Assignment and Agreement to be confidentially
inspected by a certified public accountant or ASSIGNOR'S designate,
during ordinary business hours, but not more than once each semi-annual
period, to confirm the correctness and accuracy of the reports rendered
under Paragraph 5.1 of this Article V.
ARTICLE VI - PAYMENTS
6.1 ASSIGNEE agrees to pay the amounts contemplated by Paragraph 3.2 of
Article III, semi-annually on a calendar basis and, within one month
following each semi-annual calendar period and shall tender such
payments to ASSIGNOR concurrently with the reports contemplated by
Paragraph 5.1 of Article V.
6.2 ASSIGNEE agrees to pay the amounts contemplated by Article III at
ASSIGNOR address listed hereinabove, or at such other places as
ASSIGNOR may specify from time to time, in United States dollars and
through a United States bank designed by ASSIGNOR.
ARTICLE VII - VALIDITY AND INFRINGEMENT
7.1 In the event that a Valid Claim of the patent included in Assignor
Patent Rights is finally held to be invalid or limited in scope by a
court of competent jurisdiction from which appeal can no longer be
taken, ASSIGNEE from the date of entry of the decision of such Court,
shall be permanently relieved to the extent of such holding of
invalidity or limitation of scope as to the obligation to pay accrued
royalties on the Assigned Product in accordance with Paragraph 3.2 of
Article III, provided that such Assigned Product is not covered by
another Valid Claim on one or more patents coming with Assignor Patent
Rights assigned hereunder which have not been held to be invalid or
limited in scope as provided herein.
7.2 In the event ASSIGNOR and ASSIGNEE agree that a particular Assigned
Product or the use thereof does not infringe a particular Valid Claim
of any patent included in Assignor Patent Rights, ASSIGNEE shall
thereafter be permanently relieved, with respect to any Assigned
Product or use thereof which is the same as the Assigned Product or use
thereof, agreed not to be infringed from the Assigned Product, the
obligation of making further payments to ASSIGNOR which might otherwise
be due under Paragraph 3.2 of Article III, such relief to be effective
as of the date of entry, of such date, of such agreement; provided
however, that the Assigned Product is not covered by another Valid
Claim of one or more patents within Assignor Patent Rights which have
not been held or agreed not to be infringed as provided, herein.
7.3 ASSIGNEE may, in its own name, bring or prosecute infringement suits
against others who are infringing the patents within Assignor Patent
Rights and shall be entitled to all recovery therefrom. ASSIGNEE shall
have the full and sole right to control such or other proposed
litigation and may discontinue any such suit or proposed litigation at
any time upon giving thirty (30) days written notice of its intent to
do so, to ASSIGNOR. ASSIGNOR may at their option, thereafter elect to
continue such suit or other litigation at its own expense as evidenced
by written notice to ASSIGNEE, and in such event, ASSIGNOR shall be
entitled to all recovery therefrom, but shall keep ASSIGNEE fully
advised of the progress of such continued suit or other litigation.
7.4 It is mutually agreed between the parties nothing herein contained
shall be construed to require either party to expend money in
litigation or in the enforcing of Assignor Patent Rights unless it so
elects and in the event a party proceeds with litigation in the name of
the other party any cause in which such other party is not voluntarily
a party, as evidenced by written notice, such party shall and agrees to
hold harmless the other party from any and all liabilities arising
thereunder, including, but not limited to, attorneys fees, court costs,
and damages arising out of counterclaims, cross claims and the like.
7.5 ASSIGNOR represents that he is unaware of any rights of others which
would be infringed by the Commercial Exploitation of the Assigned
Product.
ARTICLE VIII - TERM
8.1 This Assignment and Agreement shall become effective upon mutual
execution hereof and shall continue in effect until the expiration of
the last to expire of the patent in Assignor Patent Rights coming
hereunder.
8.2 If ASSIGNEE shall have failed in the performance of any of its
covenants under this Assignment and Agreement, including the payment of
royalties contemplated by Paragraph 3.2 of Article III, ASSIGNOR may
terminate this Assignment and Agreement provided (a) ASSIGNOR provides
ASSIGNEE written notice listing the specific failure of performance,
(b) ASSIGNEE fails to cure such failure of performance within
forty-five (45) days following its receipt of such notice, and (c) the
default is in fact existing. Should a dispute arise over whether the
default is in fact existing, ASSIGNEE may institute arbitration
proceedings contemplated by Paragraph 11.3 of Article XI within the
forty-five (45) day cure period whereupon termination shall be held in
abeyance pending a decision of the arbitrator(s).
8.3 ASSIGNEE may terminate this Assignment and Agreement at any time,
provided however, a forty-five (45) day written notice of ASSIGNEE'S
intent to terminate this Assignment and Agreement is tendered to
ASSIGNOR at the address contained herein.
8.4 Termination of this Assignment and Agreement shall not relieve either
party of its obligations incurred up to the date of termination.
8.5 Upon termination, the rights listed in Assignor Patent Rights
transferred hereunder shall revert to ASSIGNOR.
ARTICLE IX - MARKING
9.1 ASSIGNEE agrees that each and every Assigned Patent commercially
exploited by it hereunder covered by Assignor Patent Rights shall be
marked with the statutory patent marking, or if it is not practical to
xxxx the Assigned Product, to xxxx the container in which they are
commercially exploited. ASSIGNEE further agrees to secure similar
commitments from its Licensees.
ARTICLE X - NOTICE
10.1 Any notice or communication required or permitted hereunder shall be
deemed to be duly given when sent by certified mail, return receipt
requested, to the last known address of the other party.
10.2 Until otherwise notified in writing, the addresses of the parties
hereto for purposes of such notice or communications are as set forth
on page one of this Assignment and Agreement.
ARTICLE XI - MISCELLANEOUS
11.1 This Assignment and Agreement shall enure to the benefit of and be
binding upon ASSIGNEE and may be transferred to or assigned by ASSIGNEE
without the written consent of ASSIGNOR.
11.2 If at any time either party hereto shall elect not to assert its rights
under any provision of this Agreement and Assignment in the event of
breach of said provision by the other party, its action or lack of
action in that respect shall not be construed as its continuing waiver
of its rights under such provision or under any other provision of this
Assignment and Agreement.
11.3 This Assignment and Agreement shall be construed under and in
accordance with the laws of the State of Florida. Any controversy or
claim arising out of this Assignment and Agreement or a breach or
alleged breach thereof shall be settled by (a) arbitration in
accordance with the rules of the American Arbitration Association
("AAA"), such arbitration to take place in Tampa, Florida, and any
judgment upon the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof, or (b) a mutually agreed upon,
licensed, State of Florida certified attorney, who will sit as the
designated arbitrator and any judgment or award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.
Each party agrees that any action or proceeding that may be brought in
connection with this Assignment and Agreement must be brought against
each party in the Federal Court of the Middle District of Florida in
Tampa and each party hereto hereby consents and shall not oppose for
any reason such jurisdiction and venue.
11.4 In the event any Article or part thereof contained in this Assignment
and Agreement is declared invalid or unenforceable by final judgment or
decree of the arbitrators or by a court of competent jurisdiction from
which no appeal is taken, all other Articles and parts thereof
contained in this Agreement and Assignment shall remain in full force
and effect and shall not be affected thereby.
11.5. This Assignment and Agreement shall supercede all prior written and
oral agreement between the parties. No changes, modifications, or
amendments shall be effective unless in writing and executed by both
parties hereof with the same formality as this Assignment and
Agreement.
XXXXXX X. XXXXXX GLOBAL ENERGY & ENVIRONMENTAL RESEARCH, INC.
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxx
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Xxxxxx X. Xxxxxx By: Xxxxxxx X. Xxxxx
----------------
Its: President
--------------
Date: 8/10/99 Date: 8/10/1999
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Xxxxx xx Xxxxxxx
Xxxxxx xx Xxxxxxxxxxxx
Xx this the 10 day of August, 1999, before me personally came the above named
Xxxxxx X. Xxxxxx, ( ) personally known to me, or (X) who produced a Florida
Driver's Lic. as identification I.D.#X000-000-00-000-0 as acknowledged to me
that he executed the same of his own free will for the purposes set forth
herein.
/s/ Xxxxx X. Xxxxxxxxx
----------------------
Notary Public, State of Florida at Large
My Commission Expires: November 11, 2001 (Stamp)
-------------------------
Seal
Xxxxx xx Xxxxxxx
Xxxxxx xx Xxxxxxxxxxxx
Xx this the 10 day of August, 1999, before me personally came the above named
Xxxxxx X. Xxxxxx, ( ) personally known to me, or (X) who produced a Florida
Driver's Lic. as identification I.D. # X000-000-00-000-0 as acknowledged to me
that he executed the same of his own free will for the purposes set forth
herein.
/s/ Xxxxx X. Xxxxxxxxx
----------------------
Notary Public, State of Florida at Large
My Commission Expires: November 11, 2001 (Stamp)
-------------------------
Seal
