Exhibit 10
EXCLUSIVE LICENSE AGREEMENT
BETWEEN
AVALON OIL & GAS, INC.
AND
OILTEK, INC.
AGREEMENT dated as of the 17th day of August, 2007 (this "Agreement"),
by and between Avalon Oil & Gas, Inc. a Nevada corporation (the "Licensor") with
an address at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000, and
Oiltek, Inc., a Delaware corporation (the "Licensee") with an address at 0000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000.
WHEREAS, the Licensor has acquired licenses (copies of which were filed
with the Securities and Exchange Commission as attachments to Avalon's reports
on Form 8-K filed December 15, 2006 and May 4, 2007) to make, use, offer for
sale, and sell products utilizing the claims contained in each of the Patents
(as hereinafter defined in Paragraph "D" of Article "2" of this Agreement) in
the Territory (as hereinafter defined in Paragraph "H" of Article "2" of this
Agreement), and to sublicense any of those rights. Those licenses were acquired
through the following transactions:
(A) On July 12, 2006, Avalon acquired Ultrasonic Mitigation Technologies, Inc.
("UMTI") for 16,250,000 unregistered shares of the Licensor's common stock. UMTI
held an exclusive worldwide license pursuant to a license agreement dated July
12, 2006 and expiring March 11, 2025, unless earlier terminated pursuant to the
terms of such license agreement (the "UMTI License Agreement"), with respect to
the Patent titled "System and Method for the Mitigation of Paraffin Wax
Deposition from Crude Oil by Using Ultrasonic Waves". The terms of the UMTI
License Agreement (i) allow the inventor to (a) continue to use the technology
for educational and research purposes, and (b) publish and disseminate
information about the technology, (ii) allow non-profit organizations to use the
technology for educational and non-commercial research purposes within their own
facilities, and (iii) require, at the request of the inventor, UMTI to
sublicense the technology to a third party designated by the inventor, provided
that such third party is in a field which is of no commercial interest to UMTI;
(B) On November 8, 2006, Avalon acquired Intelli-Well Technologies, Inc.
("IWTI") for 20,000,000 unregistered shares of the Licensor's common stock. IWTI
held a non-exclusive United States license pursuant to a license agreement dated
October 27, 2006 and expiring September 27, 2025, unless earlier terminated
pursuant to the terms of such license agreement (the "IWTI License Agreement"),
with respect to the Patent titled "Well Casing Based-Geophysical Sensor
Apparatus"; the U.S. Government also has the rights to use this Patent
throughout the world. The terms of the IWTI License Agreement (i) allow the
inventor to (a) continue to make, use and practice the technology for
educational and research purposes, but not for commercial purposes and (b)
publish technical data resulting from his research, and (ii) allow non-profit
organizations to make, use and practice the technology for educational and
research purposes, but not for commercial purposes; and
(C) On March 28, 2007, Avalon acquired Leak Location Technologies, Inc. ("LLTI")
for 36,710,526 unregistered shares of the Licensor's common stock. LLTI held an
exclusive United States license pursuant to a license agreement dated March 27,
2007 and expiring upon the later of (i) October 9, 2012 or (ii) the last sale of
a licensed product produced during the term of the license agreement, unless
earlier terminated pursuant to the terms of such license agreement (the "LLTI
License Agreement") with respect to the Patent titled "Detection of Leaks in
Pipelines". The terms of the LLTI License Agreement (i) allow the inventor to
use the invention for educational and research purposes, (ii) allow other
non-profit organizations to use the invention for educational and research
purposes, and (iii) require LLTI to (a) allow the inventor to use any
improvement developed by LLTI for educational and research purposes without
paying a royalty to LLTI, and (b) allow other non-profit organizations to use
such improvement for non-commercial research purposes without paying a royalty
to LLTI;
In addition to the restrictions stated in paragraphs "(A)", "(B)" and "(C)"
above, the UMTI License Agreement, IWTI License Agreement and LLTI License
Agreement exclude (1) know-how rights (rights to the inventor's knowledge with
respect to the technology other than the information set forth in the actual
patent or patent application) and (2) rights to any improvements to those
Patents which their respective inventors develop at a later time;
WHEREAS, the Licensee is desirous of obtaining from the Licensor the
rights to utilize the Patents in the development of Technologies (as hereinafter
defined in Paragraph "G" of Article "2" of this Agreement) and Products (as
hereinafter defined in Paragraph "E" of Article "2" of this Agreement);
WHEREAS, the Licensee seeks to develop Technologies, manufacture and
sell Products based upon those Technologies, and to sublicense to third parties
the Technologies and the rights to manufacture and sell Products pursuant to the
terms and conditions of this Agreement; and
WHEREAS, the Licensor is willing to grant to the Licensee an exclusive
right to utilize the Patents upon the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged,
IT IS AGREED:
1. Recitals. The parties hereby adopt as part of this Agreement each of the
recitals which is set forth above in the WHEREAS clauses, and agree that such
recitals shall be binding upon the parties hereto by way of contract and not
merely by way of recital or inducement and such WHEREAS clauses are hereby
confirmed and ratified as being accurate by each party as to itself.
2. Certain Definitions. The following terms as used in this Agreement shall,
unless specifically indicated otherwise in this Agreement, have the following
meanings:
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A. "Affiliate" shall mean any corporation or other business entity in which
the Licensee owns or controls, directly or indirectly, at least ten (10%)
percent of the outstanding stock or other voting rights entitled to elect
directors, or in which the Licensee is owned or controlled directly or
indirectly by at least ten (10%) percent of the outstanding stock or other
voting rights entitled to elect directors; provided, however, that in any
country where the local law does not permit foreign equity participation of at
least ten (10%) percent, an "Affiliate" shall include any company in which the
Licensee owns or controls or is owned or controlled by, directly or indirectly,
the maximum percentage of outstanding stock or voting rights permitted by local
law in such foreign jurisdiction.
B. "Contract Year" shall mean the one year period commencing on August 17,
2007. Each subsequent Contract Year shall commence upon August 17.
C. "Net Sales" shall mean the total of the gross invoice prices of Products
sold by the Licensee, its Sublicensees or its Affiliates, or any combination
thereof, less the sum of the following actual and customary deductions where
applicable and separately listed: cash, trade, or quantity discounts, sales, use
tariff, import/export duties or other excise taxes imposed on particular sales
(except for value-add and income taxes imposed on the sales of the Products in
foreign countries), transportation charges, or credits to Licensee, its
Sublicensees or its Affiliates, or any combination thereof, because of
rejections or returns.
D. "Patents" shall mean the Letters Patent and patent applications which
are described on Exhibit "A", which is annexed hereto and made a part hereof,
and which Letters Patent and patent applications are filed with the United
States Patent and Trademark Office or equivalent foreign authorities.
E. "Products" shall mean any products developed by the Licensee or by
Sublicensees which utilize the Patents, or any part thereof, or are covered by
the claims contained in the Patents, or the manufacture, use, sale, offer for
sale, or importation of which would constitute, but for the license granted to
Licensee by Licensor herein, an infringement of any pending or issued and
unexpired claim with the Patents.
F. "Sublicensee" shall mean any entity which distributes units of the
Products sold to it by the Licensee, or which utilizes the Technologies
sublicensed to it by the Licensee, pursuant to, and subject to, the terms of
this Agreement.
G. "Technologies" shall mean all technologies developed by the Licensee or
by Sublicensees utilizing the Patents, or any part thereof, or are covered by
the claims contained in the Patents, or the manufacture, use, sale, offer for
sale, or importation of which would constitute, but for the license granted to
Licensee by Licensor herein, an infringement of any pending or issued and
unexpired claim with the Patents.
H. "Territories" shall mean the following geographic area with respect to
each of the following Patents:
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"System and Method for the Mitigation of Paraffin Wax Deposition From Crude
Oil by Using Ultrasonic Waves" - Worldwide
"Well Casing Based-Geophysical Sensor Apparatus, System and Method" -
United States
"Detection of Leaks in Pipelines" - United States
3. Term. Subject to the provisions of Article "12" of this Agreement, the Term
of this Agreement shall be five (5) years and shall terminate on May 31, 2012;
provided, however, that the Term may be extended in the Licensee's sole and
absolute discretion for up to two (2) additional three-year (3) periods by the
Licensee giving written notice to the Licensor pursuant to Paragraph "C" of
Article "21" of this Agreement; provided, however, that such notice must be
given at least one hundred and eighty (180) days prior to the end of the
applicable Term, and that the Patent titled "Detection of Leaks in Pipelines"
expires on October 9, 2012 and shall cease to be considered a Patent for the
purposes of this Agreement thereafter.
4. Exclusivity and Rights to Distribution.
A. Subject to the Licensee's compliance with the terms of this Agreement,
the Licensor hereby grants to the Licensee during the Term, a non-assignable,
non-transferable exclusive right to use the Patents for any legal purpose,
including, but not limited to, research using the Patents in order to develop
Technologies and Products, the manufacture and sale of Products, the sublicense
to third parties of such Technologies, and the sublicense to third parties of
the rights to manufacture and sell such Products.
B. The Licensee shall have the right to retain and utilize Sublicensees;
provided, however, that as a condition of any such Sublicensee being retained
and/or utilized, the Licensee must (1) obtain the written consent of the
Licensor, which consent shall not be unreasonably withheld, and (2) each such
Sublicensee shall execute an agreement which shall be in the form of Exhibit "C"
which is annexed hereto and made a part hereof.
C. The Licensee or any Sublicensee shall be responsible for any costs which
it incurs with respect to any research involving, manufacture or sale of
Products involving, sublicense of Technologies involving, or other use of, the
Patents.
D. The Licensor retains no rights to the Patents during the Term of this
Agreement. Subsequent to the Term of this Agreement, all rights revert to the
Licensor until the expiration date of each such Patent; the Licensor shall not
have any obligation to Sublicensees of the Licensee, and may sell Products,
sublicense Technologies, and sublicense the rights to manufacture and sell
Products to the Licensee's Sublicensees and customers.
5. Purchase Price. The purchase price for the license is ten million
(10,000,000) shares of common stock of the Licensee, representing 75.6% of the
issued and outstanding shares of common stock of the Licensee, which has been
issued and delivered to the Licensor by the Licensee in consideration of, and
subject to, (A) the execution of this Agreement, and (B) a payment of fifty
thousand ($50,000) dollars by the Licensor to the Licensee.
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6. Taxes. The Licensee agrees that it is responsible for the payment of any and
all taxes, excises, assessments, levies, imports, duties, costs, charges and
penalties (except for income taxes imposed upon the Licensor) which are imposed
in connection with this License Agreement.
7. Royalties.
A. The Licensee shall be required to pay the Licensor the following:
(i) a royalty which is equal to six (6 %) percent of all Net Sales of
the Products by the Licensee, its Sublicensees or its Affiliates; and
(ii) a royalty which is equal to six (6 %) percent of all other
revenues received by the Licensee, including, but not limited to, sublicense
fees other than payments from Net Sales. "Royalties" shall mean the sum of "(i)"
and "(ii)" of this Paragraph "A" of this Article "7" of this Agreement.
B. The Licensee shall pay the Royalties with respect to each calendar
quarter to Licensor within fifteen (15) days after the end of such calendar
quarter.
8. Record Keeping, Reports.
A. Simultaneously with each payment set forth in Article "7" of this
Agreement, the Licensee shall furnish the Licensor with a detailed statement,
certified to be true and correct by both its president and another executive
officer, provided that the president and such other executive officer are not
the same person, setting forth with respect to such calendar quarter period: (1)
all sublicenses of the Technologies, (2) all revenues derived from sublicenses
of the Technologies, (3) all sublicenses of the rights to manufacture and sell
Products, (4) all revenues derived from sublicenses of the rights to manufacture
and sell Products, (5) all Net Sales of Products by the Licensee, or its
Sublicensees or Affiliates (6) any trade discounts and allowances, and (7) all
credits for returned units of the Products and other similar adjustments
together with copies of documents which support the detailed statement.
B. The Licensee shall maintain true, complete, and correct books of account
and records of all transactions within the scope of this Agreement, in
accordance with generally accepted accounting principles, to enable the Licensor
to ascertain all amounts received from the sublicense of Technologies and the
sale of Products pursuant to this Agreement. The Licensor and/or its duly
authorized representatives shall have the right, during regular business hours,
for the duration of this Agreement and for three (3) years thereafter, to
examine said books of account and records and all other documents (including,
but not limited to, sales invoices) and material in the possession or under the
control of the Licensee with respect to this Agreement and its activities
pursuant to this Agreement; and the Licensor shall have free and full access
thereto for said purposes and for the purpose of making extracts therefrom. The
Licensor shall have the right at such inspection to examine all information
pertinent to this Agreement dating from the commencement date of this Agreement.
C. If, upon an examination, it is revealed that there is due and owing by
the Licensee an amount which exceeds, by two (2%) percent or more, the amount
which was paid to the Licensor with respect to any Contract Year, then the
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entire cost of the examination shall be borne by the Licensee. For example, if
the Licensor were paid one million ($1,000,000) dollars, and the audit reveals
that the Licensee owes the Licensor an additional forty thousand ($40,000)
dollars (or four (4%) percent of the one million ($1,000,000) dollars which the
Licensor was paid), the Licensee shall bear the entire cost of the examination.
9. The Licensor's Representations, Warranties and Covenants. The Licensor
represents, warrants, and covenants to the Licensee that:
A. Corporate Status. The Licensor is a corporation duly organized, validly
existing and in good standing pursuant to the laws of the State of Nevada, with
all of the requisite power and authority to carry on its businesses as presently
conducted in all jurisdictions where presently conducted, to enter into this
Agreement and to consummate the transactions set forth in this Agreement.
B. Authority. The Licensor has the full right, power and legal capacity to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Licensor and the
consummation by it of the transactions contemplated hereby have been duly
approved and authorized by all necessary action of the Licensor's Board of
Directors, and no further authorization shall be necessary on the part of the
Licensor for the performance and consummation by the Licensor of the
transactions contemplated hereby. A copy of the minutes of said action of the
Board of Directors is annexed hereto as Exhibit "D". The execution, delivery and
performance of this Agreement in accordance with its terms does not and shall
not require approval, consent or authorization of any governmental agency or
authority or any political subdivision thereof.
C. Compliance with the Law and Other Instruments. The business and
operations of the Licensor have been and are being conducted in accordance with
all applicable laws, rules, and regulations of all authorities which affect the
Licensor or its properties, assets, businesses or prospects. The performance of
this Agreement shall not result in any breach of, or constitute a default under,
or result in the imposition of any lien or encumbrance upon any property of the
Licensor or cause an acceleration under any arrangement, agreement or other
instrument to which the Licensor is a party or by which any of its assets are
bound. The Licensor has performed all of its obligations which are required to
be performed by it pursuant to the terms of any such agreement, contract, or
commitment.
D. Patents. The Licensor is the sole and exclusive owner of the license to
make, use, offer for sale, and sell products utilizing the claims contained in
the Patents, and to sublicense any of those rights, and has the sole and
exclusive right to sublicense the use thereof to the Licensee. The Licensor has
no knowledge that any Patent infringes on any patent of any other person. The
Licensor does not know or have any reason to believe that there are any claims
of any third parties with respect to the use of any Patent within its Territory.
E. Exclusive Right to Use. The Licensor has not granted and shall not,
during the Term, grant, directly or indirectly, to any other person any right
(whether current, future, contingent or otherwise) to use the Patents.
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F. No Approval. No approval of any third party including, but not limited
to, any governmental authority is required in connection with the consummation
of the transactions set forth in this Agreement.
G. Survival. The covenants, representations and warranties made by the
Licensor in or in connection with this Agreement shall survive the execution and
delivery of this Agreement and shall continue in full force and effect during
the Term and for two (2) years after the expiration of the Term, it being agreed
and understood that each of such covenants, representations and warranties is of
the essence to this Agreement and the same shall be binding upon the Licensor
and inure to the Licensee, its successors and assigns.
H. Complete Disclosure. The Licensor has no knowledge that any covenant,
representation or warranty of the Licensor which is contained in this Agreement
or in a writing furnished or to be furnished pursuant to this Agreement contains
or shall contain any untrue statement of a material fact, omits or shall omit to
state any material fact which is required to make the statements which are
contained herein or therein, not misleading.
I. Notification of an Event. If, during the Term, any event occurs or any
event known to the Licensor relating to or affecting the Licensor shall occur as
a result of which (i) any provision of this Article "9" of this Agreement at
that time shall include an untrue statement of a fact, or (ii) this Article "9"
of this Agreement shall omit to state any fact necessary to make the statements
herein, in light of the circumstances under which they were made, not
misleading, the Licensor shall immediately notify the Licensee pursuant to
Paragraph "C" of Article "21" of this Agreement.
J. No Defense. It shall not be a defense to a suit for damages for any
misrepresentation or breach of a covenant, representation or warranty that the
Licensee knew or had reason to know that any covenant, representation or
warranty in this Agreement contained untrue statements.
10. The Licensee's Representations, Warranties and Covenants. The Licensee
represents, warrants and covenants to the Licensor as follows:
A. Company Status. The Licensee is a corporation duly organized, validly
existing and in good standing pursuant to the laws of the State of Delaware,
with all of the requisite power and authority to carry on its businesses as
presently conducted in all jurisdictions where presently conducted, to enter
into this Agreement and to consummate the transactions set forth in this
Agreement.
B. Authority. The Licensee has the full right, power and legal capacity to
enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by the Licensee and the
consummation by it of the transactions contemplated hereby have been duly
approved and authorized by all necessary action of the Licensee's Board of
Directors, and no further authorization shall be necessary on the part of the
Licensee for the performance and consummation by the Licensee of the
transactions contemplated hereby. A copy of the minutes of said action of the
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Board of Directors is annexed hereto as Exhibit "E". The execution, delivery and
performance of this Agreement in accordance with its terms does not and shall
not require approval, consent or authorization of any governmental agency or
authority or any political subdivision thereof.
C. Compliance with the Laws and Other Instruments. The business and
operations of the Licensee have been and are being conducted in accordance with
all applicable laws, rules, and regulations of all authorities which affect the
Licensee or its properties, assets, businesses or prospects. The performance of
this Agreement shall not result in any breach of, or constitute a default under,
or result in the imposition of any lien or encumbrance upon any property of the
Licensee or cause an acceleration under any arrangement, agreement or other
instrument to which the Licensee is a party or by which any of its assets are
bound. The Licensee has performed all of its obligations which are required to
be performed by it pursuant to the terms of any such agreement contract, or
commitment.
D. Limited Right to License. The Licensee shall not grant, directly or
indirectly, to any other person other than a Sublicensee any right to use any
right or sublicense to use any Patent within its Territory.
E. No Approval. No approval of any third party including, but not limited
to, any governmental authority is required in connection with the consummation
of the transactions set forth in this Agreement.
F. Survival. The covenants, representations and warranties made by the
Licensee in or in connection with this Agreement shall survive the execution and
delivery of this Agreement and shall continue in full force and effect during
the Term and for two (2) years after the expiration of the Term, it being agreed
and understood that each of such covenants, representations and warranties is of
the essence of this Agreement and the same shall be binding upon the Licensee
and inure to the Licensor, its successors and assigns.
G. Complete Disclosure. The Licensee has no knowledge that any covenant,
representation or warranty of the Licensee which is contained in this Agreement
or in a writing furnished or to be furnished pursuant to this Agreement contains
or shall contain any untrue statement of a material fact, omits or shall omit to
state any material fact which is required to make the statements which are
contained herein or therein, not misleading.
H. Notification of an Event. If, during the Term, any event occurs or any
event known to the Licensee relating to or affecting the Licensee shall occur as
a result of which (i) any provision of this Article "10" of this Agreement at
that time shall include an untrue statement of a fact, or (ii) this Article "10"
of this Agreement shall omit to state any fact necessary to make the statements
herein, in light of the circumstances under which they were made, not
misleading, the Licensee shall immediately notify the Licensor pursuant to
Paragraph "C" of Article "21" of this Agreement.
I. No Defense. It shall not be a defense to a suit for damages for any
misrepresentation or breach of a covenant, representation or warranty that the
Licensor knew or had reason to know that any covenant, representation or
warranty in this Agreement contained untrue statements.
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11. Warranties. THE LICENSOR HEREBY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES
AND GUARANTIES WITH RESPECT TO THE PATENTS, WHETHER WRITTEN, ORAL, IMPLIED OR
INFERRED BY TRADE, CUSTOM OR PRACTICE, INCLUDING, WITHOUT LIMITATION, IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE LICENSOR
SHALL NOT BE LIABLE UNDER ANY CIRCUMSTANCES FOR DAMAGES OF ANY KIND, WHETHER
DIRECT, CONSEQUENTIAL OR OTHERWISE RELATING TO THE PERFORMANCE OF ANY PRODUCT OR
ANY TECHNOLOGY.
12. Termination.
A. Anything in this Agreement notwithstanding, the Licensor shall have the
right to terminate this Agreement immediately if, the Licensee shall at any time
default in the performance of any of its obligations under, or otherwise commit
any breach of this Agreement, unless within ten (10) calendar days after receipt
of written notice of such default in accordance with Paragraph "C" of Article
"21" of this Agreement the Licensee cures such default or, if there is a default
which cannot, with due diligence, be cured within ten (10) calendar days, the
Licensee institutes within ten (10) calendar days steps reasonably necessary to
remedy the default and thereafter diligently prosecutes same to completion. The
right of the Licensor to terminate this Agreement pursuant to this Article "12"
of this Agreement or otherwise shall be in addition to and not exclusive of any
other right or remedy that may exist at law, equity or otherwise, that the
Licensor may possess pursuant to this Agreement, all of which rights and
remedies shall survive such termination. The Licensor shall be required to
provide the Licensee with written notice of default on the first three (3) such
occasions during any Contract Year during the Term. After such three (3)
occasions, the Licensor shall no longer be required to give notice to the
Licensee and the Licensor shall have the right to immediately terminate this
Agreement if the Licensee shall fail to perform any of its obligations pursuant
to, or otherwise commit any breach of, this Agreement.
B. Notwithstanding the provisions of Paragraph "A" of this Article "12" of this
Agreement, the Licensor shall have the right to terminate this Agreement without
prior notice to the Licensee if:
i. The Licensee does not pay the full amount of the Royalties and
other amounts specified in this Agreement as and when due;
ii. The Licensee fails to make any payments due to the Licensor when
due;
iii. Any representation or warranty of the Licensee contained in this
Agreement is untrue when made;
iv. The Licensee admits in writing its inability to pay its debts as
they mature;
v. The Licensee files a petition in bankruptcy;
vi. The Licensee makes an assignment for the benefit of its creditors;
vii. The Licensee consents to the appointment of, or possession by, a
custodian for itself or for all or substantially all of its property;
viii. A petition in bankruptcy is filed with the consent of the
Licensee;
ix. The Licensee fails to have a petition in bankruptcy which was
filed without its consent dismissed within one hundred twenty (120) days from
the date upon which such petition was filed;
x. Notwithstanding the one hundred twenty (120) day period set forth
in Subparagraph "ix" of this Paragraph "B" of this Article "12" of this
Agreement, the Licensee is adjudicated bankrupt on a petition in bankruptcy
filed against it;
xi. A court of competent jurisdiction enters a final non-appealable
order, judgment or decree appointing, without the consent of the Licensee, a
receiver, trustee or custodian for the Licensee or for all or substantially all
of the property or assets of the Licensee;
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xii. A proceeding is commenced to foreclose the security interest in,
or lien on, any property or assets to satisfy the security interest or lien
therein of any creditor of the Licensee;
xiii. A court of competent jurisdiction enters a final judgment for
the payment of money against the Licensee, which judgment the Licensee shall not
discharge (or provide for such discharge) in accordance with its terms within
one hundred twenty (120) days of the date of entry thereof, or procure a stay of
execution thereof within one hundred twenty (120) days from the date of entry
thereof and, within such one hundred twenty (120) day period, or such longer
period during which execution of such judgment shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal; or
xiv. There is an imposition of any attachment or levy, or an issuance
of any note of eviction against the assets or properties of the Licensee.
13. Effect of Termination. The termination of this Agreement for any reason
shall not release any party from any liability, obligation or agreement that,
pursuant to any provision of this Agreement, is intended to survive or be
performed after the termination of this Agreement.
14. Ownership of License to Patents. The license (the "License") with respect to
the Patents to make, use, offer for sale, and sell products utilizing the claims
contained in the Patents, and to sublicense any of those rights shall remain the
exclusive property of the Licensor.
15. Licensor's Exclusive Rights, Title and Interest in and to Patents.
A. The Licensee acknowledges the Licensor's exclusive right, title and
interest in and to the License, and shall not at any time do or cause to be done
any act or thing contesting or in any way impairing or tending to impair any
part of such right, title and interest. The Licensee shall not in any manner
represent that it has any ownership in the Patents or the License, and the
Licensee acknowledges that use of the Patents, shall not create in the
Licensee's favor any right, title or interest in or to the Patents or the
License other than as expressly provided in this Agreement.
B. If the applicable patent law requires, the Licensor shall make
application to register the Licensee as a Permitted User or Registered User of
the Patents, and if necessary, the Licensee undertakes to join in such
application and to execute any such documents and to take such action as may be
necessary to implement such application.
C. The Licensee acknowledges that the use of the Patents shall not create
in the Licensee any right, title or interest in or to the Patents or the License
other than as expressly provided in this Agreement.
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D. Upon termination of this Agreement in any manner as provided in this
Agreement, the Licensee shall cease and desist from all use of the Patents in
any manner.
16. Nondisclosure of Confidential Information.
A. As used in this Agreement, "Confidential Information" shall mean oral or
written information which is directly or indirectly presented to the Licensee,
its past, present or future subsidiaries, parents, officers, consultants,
directors, stockholders, affiliates, attorneys, employees, agents and its and
their respective Immediate Families (as defined below; all of the foregoing are
hereinafter collectively referred to as "Agents") by the Licensor, including,
but not limited to, information which is developed, conceived or created by the
Licensor, or disclosed to the Licensee or its Agents or known by or conceived or
created by the Licensee or its Agents during the Term or after the termination
of this Agreement if disclosed to the Licensee or its Agents or known by or
conceived or created by the Licensee or its Agents as a result of this
Agreement, with respect to the Licensor, its business or any of its products,
processes, and other services relating thereto relating to the past or present
business or any plans with respect to future business of the Licensor, or
relating to the past or present business of a third party or plans with respect
to future business of a third party which are disclosed to the Licensor.
Confidential Information includes, but is not limited to, all documentation,
hardware and software relating thereto, and information and data in written,
graphic and/or machine readable form, products, processes and services, whether
or not patentable, trademarkable or copyrightable or otherwise protectable,
including, but not limited to, information with respect to discoveries;
know-how; ideas; computer programs, source codes and object codes; designs;
algorithms; processes and structures; product information; marketing
information; price lists; cost information; product contents and formulae;
manufacturing and production techniques and methods; research and development
information; lists of clients and vendors and other information relating
thereto; financial data and information; business plans and processes;
documentation with respect to any of the foregoing; and any other information of
the Licensor that the Licensor informs the Licensee or its Agents or the
Licensee or its Agents should know, by virtue of its or their position or the
circumstances in which the Licensee or its Agents learned such other
information, is to be kept confidential including, but not limited to, any
information acquired by the Licensee or its Agents from any sources prior to the
commencement of this Agreement. Confidential Information also includes similar
information obtained by the Licensor in confidence from its vendors, licensors,
sublicensees, customers and/or clients. Confidential Information may or may not
be labeled as confidential.
"Immediate Family" shall include the following: (A) any spouse, parent,
spouse of a parent, mother-in-law, father-in-law, brother-in-law, sister-in-law,
child, spouse of a child, adopted child, spouse of an adopted child, sibling,
spouse of a sibling, grandparent, spouse of a grandparent, and any issue or
spouse of any of the foregoing, and (B) such child or issue of such child which
is born and/or adopted during or after the term of this Agreement and the issue
(whether by blood or adoption) of such person; provided, however, that it shall
not include any person who was legally adopted after attaining the age of
eighteen (18) by any of the persons specified in this Paragraph "A" of this
Article "16" of this Agreement or any spouse or issue (whether by blood or
adoption) of any such person. A parent of a specified person shall include an
affiliate.
11
B. Except as required in the performance of the Licensee's or its Agents'
obligations pursuant to this Agreement, neither the Licensee nor its Agents
shall, during or after the Term, directly or indirectly, use any Confidential
Information or disseminate or disclose any Confidential Information to any
person, firm, corporation, association or other entity. The Licensee or its
Agents shall take reasonable measures to protect Confidential Information from
any accidental, unauthorized or premature use, disclosure or destruction.
Information shall not be considered Confidential Information if it: (i) is at
the time of disclosure or thereafter a part of the public domain without breach
of this Agreement by the Licensee or its Agents; provided, however, that the act
of copyrighting shall not cause or be construed as causing the copyrighted
materials to be in the public domain, (ii) is disclosed as reasonably required
in a proceeding to enforce the Licensee's rights under this Agreement or (iii)
is disclosed as required by court order or applicable law; provided, however,
that if either the Licensee or its Agents is legally requested or required by
court order or applicable law, including, but not limited to, by oral question,
interrogatories, request for information or documents, subpoenas, civil
investigative demand or similar process to disclose any Confidential
Information, the Licensee or its Agents, as the case may be, shall promptly
notify the Licensor of such request or requirement so that the Licensor may seek
an appropriate protective order; provided further, however; that if such
protective order is not obtained, the Licensee and its Agents agree to furnish
only that portion of the Confidential Information which they are advised by
their respective counsels is legally required.
C. Upon termination of this Agreement for any reason or at any time upon
request of the Licensor, the Licensee and its Agents agree to deliver to the
Licensor all materials of any nature which are in the Licensee's or its Agents'
possession or control and which are or contain Confidential Information, Work
Product or Work Products (hereinafter defined), or which are otherwise the
property of the Licensor or any vendor, licensor, sublicensee, customer or
client of the Licensor, including, but not limited to writings, designs,
documents, records, data, memoranda, tapes and disks containing software,
computer source code listings, routines, file layouts, record layouts, system
design information, models, manuals, documentation and notes. The Licensee and
its Agents shall destroy all written documentation prepared by them for internal
purposes based in whole or in part on any Confidential Information and such
destruction shall be confirmed to the Licensor in writing by an officer of the
Licensee and/or its Agents.
D. All ideas, inventions, discoveries or improvements, whether patentable
or not, conceived by the Licensee or its Agents (alone or with others) during
the Term ("Work Products") shall be the exclusive property of and assigned to
the Licensor or as the Licensor may direct without compensation to the Licensee
or its Agents. Any records with respect to the foregoing shall be the sole and
exclusive property of the Licensor and the Licensee or its Agents shall
surrender possession of such records to the Licensor upon termination of this
Agreement. Any Work Product shall be deemed incorporated in the definition of
Confidential Information for all purposes hereunder.
E. Neither the Licensee nor its Agents shall assert any rights with respect
to the Licensor, its business, or any of its products, processes and other
services relating thereto, Work Product or any Confidential Information as
having been acquired or known by the Licensee or its Agents prior to the
commencement of the Term.
12
17. Protection of Patents; Indemnification; Defense; Products Liability.
A. If the Licensee learns of any infringement of any Patents, Licensee
shall promptly notify the Licensor of such information. Upon learning of such
information, the Licensor shall take such action as it deems advisable in its
sole and absolute discretion for the protection of the Patents.
B. In order to induce the Licensor to enter into this Agreement, the
Licensee agrees, on its own behalf and on behalf of its Agents, that they shall
not during the Term and for a period of five (5) years from the date of
termination of this Agreement (i) personally, or cause others to personally
induce or attempt to induce any employee to terminate their employment with the
Licensor; (ii) interfere with or disrupt the Licensor's relationship with its
suppliers, vendors, customers or employees; or (iii) solicit or entice any
person to leave their employ with the Licensor.
C. The Licensee agrees, on its behalf and on behalf of its Agents, that the
duration, scope and geographic area for which the provisions set forth in
Paragraph "B" of this Article "17" of this Agreement are to be effective are
reasonable. If any court of competent jurisdiction determines that any provision
of this Agreement is invalid or unenforceable by reason of such provision
extending the covenants and agreements contained herein for too great a period
of time or over too great a geographical area, or by reason of it being too
extensive in any other respect, such agreement or covenant shall be interpreted
to extend only over the maximum period of time and geographical area, and to the
maximum extent in all other respects, as to which it is valid and enforceable,
all as determined by such court in such action. Any determination that any
provision of this Agreement is invalid or unenforceable, in whole or in part,
shall have no effect on the validity or enforceability of any remaining
provision of this Agreement.
D. Any period of time set forth in this Agreement shall not be construed to
permit the Licensee or its Agents to engage in any of the prohibited acts set
forth in this Agreement after such period if such acts would otherwise be
prohibited by any applicable statute or legal precedent.
18. Indemnification.
A. Indemnification by the Licensee. In order to induce the Licensor to
enter into and perform this Agreement, the Licensee does hereby indemnify,
protect, defend and save and hold harmless the Licensor and each of its
shareholders, affiliates, officers, directors, control persons, employees,
attorneys, agents, partners and trustees and personal representatives of any of
the foregoing ("Indemnified Parties"), from and against any loss resulting to
any of them from any material loss, liability, cost, damage, or expense which
the Indemnified Parties may suffer, sustain or incur arising out of or due to a
breach by the Licensee of the representations, warranties and covenants set
forth in Article "10" of this Agreement or in any documents delivered pursuant
hereto, or of a breach by the Licensee of any of its obligations pursuant to
this Agreement or in any documents delivered pursuant hereto.
B. Indemnification by the Licensor. In order to induce the Licensee to
enter into and perform this Agreement, the Licensor does hereby indemnify,
protect, defend and save and hold harmless the Licensee and each of its members,
affiliates, officers, managers, control persons, employees, attorneys, agents,
partners and trustees and personal representatives of any of the foregoing
13
("Indemnified Parties"), from and against any loss resulting to any of them from
any material loss, liability, cost, damage, or expense which the Indemnified
Parties may suffer, sustain or incur arising out of or due to a breach by the
Licensor of the representations, warranties and covenants set forth in Article
"9" of this Agreement or in any documents delivered pursuant hereto, or of a
breach by the Licensor of any of its obligations pursuant to this Agreement or
in any documents delivered pursuant hereto.
C. Reasonable Costs, Etc. The indemnification which is set forth in this
Article "18" of this Agreement shall be deemed to include not only the specific
liabilities or obligation with respect to which such indemnity is provided, but
also all counsel fees, reasonable costs, expenses and expenses of settlement
relating thereto, whether or not any such liability or obligation shall have
been reduced to judgment.
D. Third Party Claims. If any demand, claim, action or cause of action,
suit, proceeding or investigation (collectively, the "Claim") is brought against
an Indemnified Party for which the Indemnified Party intends to seek indemnity
from the other party hereto (the "Indemnifying Party"), then the Indemnified
Party within twenty-one (21) days after such Indemnified Party's receipt of the
Claim, shall notify the Indemnifying Party pursuant to Paragraph "C" of Article
"21" of this Agreement which notice shall contain a reasonably thorough
description of the nature and amount of the Claim (the "Claim Notice"). The
Indemnifying Party shall have the option to undertake, conduct and control the
defense of such claim or demand. Such option to undertake, conduct and control
the defense of such claim or demand shall be exercised by notifying the
Indemnified Party within ten (10) days after receipt of the Claim Notice
pursuant to Paragraph "C" of Article "21" of this Agreement (such notice to
control the defense is hereinafter referred to as the "Defense Notice"). The
failure of the Indemnified Party to notify the Indemnifying Party of the Claim
shall not relieve the Indemnifying Party from any liability which the
Indemnifying Party may have pursuant to this Article "18" of this Agreement
except to the extent that such failure to notify the Indemnifying Party
prejudices the Indemnifying Party. The Indemnified Party shall use all
reasonable efforts to assist the Indemnifying Party in the vigorous defense of
the Claim. All costs and expenses incurred by the Indemnified Party in defending
the Claim shall be paid by the Indemnifying Party. If, however, the Indemnified
Party desires to participate in any such defense or settlement, it may do so at
its sole cost and expense (it being understood that the Indemnifying Party shall
be entitled to control the defense). The Indemnified Party shall not settle the
Claim. If the Indemnifying Party does not elect to control the defense of the
Claim, within the aforesaid ten (10) day period by proper notice pursuant to
Paragraph "C" of Article "21" of this Agreement, then the Indemnified Party
shall be entitled to undertake, conduct and control the defense of the Claim (a
failure by the Indemnifying Party to send the Defense Notice to the Indemnified
Party within the aforesaid ten (10) day period by proper notice pursuant to
Paragraph "C" of Article "21" of this Agreement shall be deemed to be an
election by the Indemnifying Party not to control the defense of the Claim);
provided, however, that the Indemnifying Party shall be entitled, if it so
desires, to participate therein (it being understood that in such circumstances,
the Indemnified Party shall be entitled to control the defense). Regardless of
which party has undertaken to defend any claim, the Indemnifying Party may,
without the prior written consent of the Indemnified Party, settle, compromise
14
or offer to settle or compromise any such claim or demand; provided however,
that if any settlement would result in the imposition of a consent order,
injunction or decree which would restrict the future activity or conduct of the
Indemnified Party, the consent of the Indemnified Party shall be a condition to
any such settlement. Notwithstanding the foregoing provisions of this Article
"18" of this Agreement, as a condition to the Indemnifying Party either having
the right to defend the Claim, or having control over settlement as indicated in
this Article "18" of this Agreement, the Indemnifying Party shall execute an
agreement, in the form annexed hereto and made a part hereof as Exhibit "F",
acknowledging its liability for indemnification pursuant to this Article "18" of
this Agreement. Whether the Indemnifying Party shall control and assume the
defense of the Claim or only participate in the defense or settlement of the
Claim, the Indemnified Party shall give the Indemnifying Party and its counsel
access, during normal business hours, to all relevant business records and other
documents, and shall permit them to consult with its employees and counsel.
19. Equitable Relief. If the Licensee breaches this Agreement, the Licensor
shall have the right, at its election, to obtain equitable relief including, but
not limited to, an order for specific performance of this Agreement or an
injunction, without the need to: (i) post a bond or other security, (ii) to
prove any actual damage or (iii) to prove that money damages would not provide
an adequate remedy. Resort to such equitable relief, however, shall not be
construed to be a waiver of any other rights or remedies which the Licensor may
have for damages or otherwise.
20. No Agency. Except as provided for in this Agreement, neither party is the
legal representative or agent of, or has the power to obligate the other for any
purpose whatsoever; and no partnership, joint venture, agent, fiduciary, or
employment relationship is intended or created by reason of this Agreement. It
is the intent of the parties hereto that each party shall be an independent
contractor of the other. Neither has the authority to assume or create any
obligation or liability, express or implied, upon the other's behalf or in its
name or to bind the other in any manner whatsoever. The Licensee shall not sign
any document as an authorized person of the Licensor and none of its employees
or shareholders shall hold themselves out as officers, directors, or
shareholders of the Licensor, or as otherwise having any authority to enter into
contracts binding upon the Licensor, or to create any obligations on the part of
the Licensor; provided, however, that any employee of the Licensee who is an
officer, director, shareholder or employee of the Licensor may utilize such
authority as is appropriate to his or her position with the Licensor. The
Licensor shall not sign any document as an authorized person of the Licensee and
none of its employees or shareholders shall hold themselves out as officers,
managers, or members of the Licensee, or as otherwise having any authority to
enter into contracts binding upon the Licensee, or to create any obligations on
the part of the Licensee; provided, however, that any employee of the Licensor
who is an officer, director, shareholder or employee of the Licensee may utilize
such authority as is appropriate to his or her position with the Licensee.
21. Miscellaneous.
A. Headings. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
B. Enforceability. If any provision which is contained in this Agreement
should, for any reason, be held to be invalid or unenforceable in any respect
under the laws of any jurisdiction, such invalidity or unenforceability shall
15
not affect any other provision of this Agreement and this Agreement shall be
construed as if such invalid or unenforceable provision had not been contained
herein.
C. Notices. Any notice or other communication required or permitted
hereunder shall be sufficiently given if sent by (i) mail by (a) certified mail,
postage prepaid, return receipt requested and (b) first class mail, postage
prepaid (ii) overnight delivery with confirmation of delivery or (iii) facsimile
transmission with an original mailed by first class mail, postage prepaid,
addressed as follows:
To the Licensor: Avalon Oil & Gas, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxxxx, President
Fax No.: (000) 000-0000
With a copy to: Xxxxx & Fraade, P.C.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
To the Licensee: Oiltek, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxx
Fax No.: (000) 000-0000
With a copy to: Xxxxx & Fraade, P.C.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
or in each case to such other address and facsimile number as shall have last
been furnished by like notice. If all of the methods of notice set forth in this
Paragraph "C" of this Article "21" of this Agreement are impossible for any
reason, notice shall be in writing and personally delivered to the aforesaid
addresses. Each notice or communication shall be deemed to have been given as of
the date so mailed or delivered as the case may be; provided, however, that any
notice sent by facsimile shall be deemed to have been given as of the date so
sent if a copy thereof is also mailed by first class mail on the date sent by
facsimile. If the date of mailing is not the same as the date of sending by
facsimile, then the date of mailing by first class mail shall be deemed to be
the date upon which notice is given; provided further, however, that any notice
sent by overnight delivery shall be deemed to have been given as of the date of
delivery.
16
D. Governing Law; Disputes. This Agreement shall in accordance with Section
5-1401 of the General Obligations Law of New York in all respects be construed,
governed, applied and enforced under the internal laws of the State of New York
without giving effect to the principles of conflicts of laws and be deemed to be
an agreement entered into in the State of New York and made pursuant to the laws
of the State of New York. Except as otherwise set forth in Article "19" of this
Agreement, the parties agree that they shall be deemed to have agreed to binding
arbitration with respect to the entire subject matter of any and all disputes
relating to or arising under this Agreement including, but not limited to, the
specific matters or disputes as to which arbitration has been expressly provided
for by other provisions of this Agreement and that any such arbitration shall be
commenced exclusively in New York, New York. Any such arbitration shall be by a
panel of three arbitrators and pursuant to the commercial rules then existing of
the American Arbitration Association in the State of New York, County of New
York. In all arbitrations, judgment upon the arbitration award may be entered in
any court having jurisdiction. The parties specifically designate the courts in
the City of New York, State of New York as properly having jurisdiction for any
proceeding to confirm and enter judgment upon any such arbitration award. The
parties hereby consent to and submit to the exclusive jurisdiction of the courts
of the State of New York in any action or proceeding and submit to personal
jurisdiction over each of them by such courts. The parties hereby waive personal
service of any and all process and specifically consent that in any such action
or proceeding brought in the courts of the State of New York, any service of
process may be effectuated upon any of them by certified mail, return receipt
requested, in accordance with Paragraph "C" of this Article "21" of this
Agreement. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law.
The parties agree, further, that the prevailing party in any such
arbitration as determined by the arbitrators shall be entitled to such costs and
attorney's fees, if any, in connection with such arbitration as may be awarded
by the arbitrators. In connection with the arbitrators' determination for the
purpose of which party, if any, is the prevailing party, they shall take into
account all of the factors and circumstances including, without limitation, the
relief sought, and by whom, and the relief, if any, awarded, and to whom. In
addition, and notwithstanding the foregoing sentence, a party shall not be
deemed to be the prevailing party in a claim seeking monetary damages, unless
the amount of the arbitration award exceeds the amount offered in a legally
binding writing by the other party by fifteen (15%) percent or more. For
example, if the party initiating arbitration ("A") seeks an award of one hundred
thousand ($100,000) dollars plus costs and expenses, the other party ("B") has
offered A fifty thousand ($50,000) dollars in a legally binding written offer
prior to the commencement of the arbitration proceeding, and the arbitration
panel awards any amount less than fifty-seven thousand five hundred ($57,500)
dollars to A, the panel should determine that B has "prevailed".
The arbitration panel shall have no power to award non-monetary or
equitable relief of any sort. It shall also have no power to award (i) damages
inconsistent with any applicable agreement between the parties or (ii) punitive
damages or any other damages not measured by the prevailing party's actual
damages; and the parties expressly waive their right to obtain such damages in
arbitration or in any other forum. In no event, even if any other portion of
these provisions is held invalid or unenforceable, shall the arbitration panel
have power to make an award or impose a remedy which could not be made or
imposed by a court deciding the matter in the same jurisdiction.
17
Discovery shall be permitted in connection with the arbitration only to
the extent, if any, expressly authorized by the arbitration panel upon a showing
of substantial need by the party seeking discovery.
All aspects of the arbitration shall be treated as confidential. The
parties and the arbitration panel may disclose the existence, content or results
of the arbitration only as provided in the rules of the American Arbitration
Association in New York, New York. Before making any such disclosure, a party
shall give written notice to all other parties and shall afford such parties a
reasonable opportunity to protect their interest.
E. No Assignment by the Licensee. The rights granted pursuant to this
Agreement shall not be transferable by the Licensee, without the Licensor's
prior written consent.
F. Assignment by the Licensor. This Agreement shall be transferable by
the Licensor.
G. Construction. Each of the parties hereto hereby acknowledges and
agrees that (i) Xxxxx & Fraade, P.C. drafted this Agreement on behalf of both of
the parties to this Agreement and (ii) this Agreement shall not, therefore, be
construed more strictly against any party responsible for its drafting
regardless of any presumption or rule requiring construction against the party
whose attorney drafted this Agreement.
H. Entire Agreement. This Agreement and all documents and instruments
referred to herein (i) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and thereof, and (ii) are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder. Each party hereto agrees that, except for the representations and
warranties contained in this Agreement, neither the Licensor nor the Licensee
makes any other representations or warranties, and each hereby disclaims any
other representations and warranties made by itself or any of its officers,
directors, managers, employees, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement or
the transactions contemplated hereby, notwithstanding the delivery or disclosure
to the other or the other's representatives of any documentation or other
information with respect to any one or more of the foregoing.
I. Further Assurances. The parties agree to execute any and all such
other further instruments and documents, and to take any and all such further
actions which are reasonably required to effectuate this Agreement and the
intents and purposes hereof.
J. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators,
personal representatives, successors and assigns.
18
K. Non-Waiver. Except as otherwise expressly provided herein, no waiver
of any covenant, condition, or provision of this Agreement shall be deemed to
have been made unless expressly in writing and signed by the party against whom
such waiver is charged; and (i) the failure of any party to insist in any one or
more cases upon the performance of any of the provisions, covenants or
conditions of this Agreement or to exercise any option herein contained shall
not be construed as a waiver or relinquishment for the future of any such
provisions, covenants or conditions, (ii) the acceptance of performance of
anything required by this Agreement to be performed with knowledge of the breach
or failure of a covenant, condition or provision hereof shall not be deemed a
waiver of such breach or failure, and (iii) no waiver by any party of one breach
by another party shall be construed as a waiver of any other or subsequent
breach of this Agreement.
L. Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
M. Facsimile Signatures. Any signature which is delivered via facsimile
shall be deemed to be an original and have the same force and effect as if such
facsimile signature were the original thereof.
N. Modifications. This Agreement may not be changed, modified,
extended, terminated or discharged orally, except by a written agreement
specifically referring to this Agreement which is signed by all of the parties
to this Agreement.
O. Exhibits. All Exhibits annexed or attached to this Agreement are
incorporated into this Agreement by reference thereto and constitute an integral
part of this Agreement.
P. Survival. All of the provisions and obligations of this Agreement
shall survive the termination of this Agreement.
Q. Severability. The provisions of this Agreement shall be deemed
separable. Therefore, if any part of this Agreement is rendered void, invalid or
unenforceable, such rendering shall not affect the validity or enforceability of
the remainder of this Agreement; provided that if the part or parts which are
void, invalid or unenforceable as aforesaid shall substantially impair the value
of the whole Agreement to either party, that party may cancel, and terminate the
Agreement by giving written notice to the other party.
IN WITNESS WHEREOF, the parties to this Agreement have set their hands
and seals or caused these presents to be signed of the day and year first above
written.
Avalon Oil & Gas, Inc.
By: _______________________________________
Xxxx Xxxxxxxxx, President
Oiltek, Inc.
By: _______________________________________
Xxxx Xxxxxxx, President
19
List of Exhibits
Exhibit A: Patents
Exhibit B: Territories
Exhibit C: Agreement of Sublicensee
Exhibit D: Minutes of Meeting of the Licensor's Board of
Directors
Exhibit E: Minutes of Meeting of the Licensee's Board of
Directors
Exhibit F: Form of Letter Agreement to be Executed Pursuant to
Article "18" of the Agreement
20
EXHIBIT A
PATENTS
"Patents" shall mean the following patent, patent applications, patents issuing
from the following applications, and all patents which are reissues,
reexaminations, extensions, continuations or divisionals of any of the following
patent or patents issuing from the following applications:
o International Patent Application 2004/024309A2, filed 9/12/03, titled
"System and Method for the Mitigation of Paraffin Wax Deposition From
Crude Oil by Using Ultrasonic Waves," Inventor: Xxxxx Xxxxxxx Xxxxxx,
PhD
o United States, Patent No. _______, filed 3/11/05, granted _______,
"System and Method for the Mitigation of Paraffin Wax Deposition from
Crude Oil by Using Ultrasonic Waves," Inventor: Xxxxx Xxxxxxx Xxxxxx,
PhD
o Nationalized PCT Canada, Application No. 2,498,742 filed 3/11/05,
"System and Method for the Mitigation of Paraffin Wax Deposition from
Crude Oil by Using Ultrasonic Waves," Inventor: Xxxxx Xxxxxxx Xxxxxx,
PhD
o United States, Application No. 11/237054 filed 9/27/05, "Well Casing
Based-Geophysical Sensor Apparatus, System and Method," Inventor
Xxxxxxx Daily.
o United States, Patent No. 5,416,724 filed 10/9/92, granted 5/16/95,
"Detection of Leaks in Pipelines," Inventor Xxxxxxx Xxxxx.
21
EXHIBIT B
TERRITORIES
"System and Method for the Mitigation of Paraffin Wax Deposition From Crude Oil
by Using Ultrasonic Waves" - Worldwide
"Well Casing Based-Geophysical Sensor Apparatus, System and Method" - United
States
"Detection of Leaks in Pipelines" - United States
22
EXHIBIT C
SUBLICENSE AGREEMENT
THIS AGREEMENT is made as of the ___ day of ________, _____ by and between
Oiltek, Inc., a Delaware corporation (the "Company") with an address at 0000
Xxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx 00000, and _______________,
a ________ corporation (the "Sublicensee"), with an address at
______________________________.
WHEREAS, the Company is the Licensee of certain Technologies (as
defined in Article "2" of this Agreement) pursuant to a License Agreement dated
as of the 17th day of August, 2007 between the Company and Avalon Oil & Gas,
Inc. ("Avalon"), a copy of which is annexed hereto and made a part hereof as
Exhibit "A" (the "Avalon License");
WHEREAS, the Company agrees to grant rights to the Sublicensee to make,
use, offer for sale, and sell products which utilize the Technologies (as
defined in Article "2" of this Agreement), subject to the terms and conditions
set forth in the Avalon License, and the Sublicensee wishes to accept such
rights from the Company upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged,
IT IS AGREED:
1. Recitals. The parties hereby adopt as part of this Agreement each of the
Recitals which is contained above in the WHEREAS clauses, and agree that such
recitals shall be binding upon the parties hereto by way of contract and not
merely by way of recital or inducement; and such clauses are hereby confirmed
and ratified as being true and accurate by each party as to itself.
2. Grant of Sub-License. Upon the terms, and subject to the conditions, of this
Agreement, the Company grants to the Sublicensee, and the Sublicensee accepts
from the Company, a sublicense (the "Sublicense") to any and all Patents and
Technologies (hereinafter defined) acquired by Avalon pursuant to the Avalon
License as more specifically described in Exhibit "C" which is annexed hereto
and made a part hereof (the "Patents"), which the Company has licensed from
Avalon pursuant to the Avalon License, subject to the terms and conditions of
the Avalon License. "Technologies" shall mean all technologies and/or products
developed by the Company or by the Sublicensee utilizing the Patents, or any
part thereof, or are covered by the claims contained in the Patents, or the
manufacture, use, sale, offer for sale, or importation of which would
constitute, but for the Sublicense granted to the Sublicensee by the Company
herein, an infringement of any pending or issued and unexpired claim with the
Patents. The Sublicensee acknowledges that the Sublicensee shall not grant
licenses or sublicenses to others for the use of the Patents or the
Technologies.
23
3. Geographical Scope. "Territories" shall mean the geographic areas with
respect to each of the Patents and their respective Technologies as defined in
the schedule of Territories set for in Exhibit "B", a copy of which annexed
hereto.
4. Term. This Agreement shall commence as of ________ ___, _____ for an initial
term (the "Initial Term") of ____________ terminating on _______________ subject
to earlier termination pursuant to Article "12" of this Agreement. If the
Sublicensee is neither in default nor has been in default, beyond the applicable
notice and grace periods of any of the covenants and conditions of this
Agreement, the Sublicensee shall have the right to renew the Initial Term or any
subsequent Renewal Term (hereinafter defined) by giving notice pursuant to
Paragraph "C" of Article "20" of this Agreement at least ninety (90) days prior
to the end of each of such Terms to continue the term of this Sub-License for an
additional renewal term of twelve (12) months each (each a "Renewal Term";
provided, however, that pursuant to Article "3" of the Avalon License, the
Sublicensee shall not have the right to continue the Term of this Agreement
after May 31, 2012 unless the term of the Avalon License is extended past May
31, 2012 pursuant to Article "3" of the Avalon License; provided further,
however, that even if the term of the Avalon License is extended past May 31,
2012 pursuant to Article "3" of the Avalon License, the Sublicensee shall not
have the right to continue the Term of this Agreement after May 31, 2015 unless
the term of the Avalon License is extended past May 31, 2015 pursuant to Article
"3" of the Avalon License; provided further, however, that even if the term of
the Avalon License is extended past May 31, 2015 pursuant to Article "3" of the
Avalon License, the Sublicensee shall not have the right to continue the Term of
this Agreement after May 31, 2018. The Initial Term, together with all Renewal
Terms if any, shall hereinafter be referred to as the "Term" subject to earlier
termination pursuant to Article "12" of this Agreement. For example, if on or
prior to _______________ the Sublicensee provides written notice to the Company
of its intention to renew this Agreement for an additional year and if the
Sublicensee is neither in default nor has been in default, beyond the applicable
notice and grace periods, of any of the covenants and conditions of this
Agreement during the Initial Term, the Sublicensee shall have the right to renew
this Agreement for an additional Renewal Term of twelve (12) months. However,
even if on or prior to March 1, 2012 the Sublicensee provides written notice to
the Company of its intention to renew this Agreement for an additional year, and
even if the Sublicensee is neither in default nor has been in default beyond the
applicable notice and grace periods of any of the covenants and conditions of
this Agreement during the Term, the Sublicensee will not have the right to
extend the Term past May 31, 2012 unless the term of the Avalon License has been
extended pursuant to Article "3" of the Avalon License. Furthermore, even if the
Avalon License is extended twice so that its term extends until May 31, 2018,
and even if on or prior to March 1, 2018 the Sublicensee provides written notice
to the Company of its intention to renew this Agreement for an additional year,
and even if the Sublicensee is neither in default nor has been in default beyond
the applicable notice and grace periods of any of the covenants and conditions
of this Agreement during the Term, the Sublicensee will not have the right to
extend the Term past May 31, 2018.
5. Purchase Price. The purchase price (the "Purchase Price") for the Sublicense
shall be ____________________ ($__________) dollars for the Initial Term, plus
an additional ____________________ ($__________) dollars for each Renewal Term,
with each payment being due prior to the commencement of the applicable Term. If
the Sublicensee defaults on payment of the Purchase Price, and said default is
not cured pursuant to Subparagraph "(i)" of Paragraph "A" of Article "12" of
this Agreement, then this Agreement will be terminated.
24
6. Royalties.
A. In addition to the Purchase Price, the Company shall receive a royalty
(the "Royalty") equal to eight (8%) percent of revenues of the Sublicensee
directly or indirectly obtained from the Technologies each month (the
"Revenues").
B. The Sublicensee shall pay the Royalty within ten (10) days after the end
of each calendar month accompanied by a statement setting forth the calculation
of the Royalties. The Sublicensee shall provide the Company with such other and
further information with respect to the calculation of the Royalties as the
Company shall reasonably request.
C. For purposes of this Article "6" of this Agreement, the Revenues of the
Sublicensee shall be determined by the accountants utilized by the Sublicensee
on a regular basis applying generally accepted accounting principles ("GAAP")
applied on a consistent basis.
D. The Sublicensee shall keep full and accurate records containing all
information required for verification of the Royalty, and shall provide reports
of said information to the Company pursuant to Paragraph "C" of Article "20" of
this Agreement, provided simultaneously with payment of the Royalty within ten
(10) days after the end of each calendar month during the Term. The Company, or
its authorized agent, upon reasonable notice, shall have the right to examine
and audit relevant records during normal business hours, for the purpose of
determining whether it concurs with the Sublicensee's calculation of its
Revenues and the Royalty. If the Company or its designees believes that the
Sublicensee has erroneously calculated its Revenues and/or Royalty, then the
Company shall notify the Sublicensee of the erroneous calculation discovered by
the Company pursuant to Paragraph "C" of Article "20" of this Agreement, setting
forth the errors believed to have been made. The parties thereafter shall
attempt to mutually resolve any alleged errors within thirty (30) days after the
notification to the Sublicensee. If any alleged errors cannot be resolved within
such period of time, the parties agree to submit the resolution of any alleged
error to arbitration in accordance with Paragraph "D" of Article "20" of this
Agreement. If it is determined by agreement of the parties or pursuant to
arbitration that there is due and owing by the Sublicensee an amount which
exceeds the amount which was paid to the Company (the "Shortfall") by two (2%)
percent or more, all costs of the Company for the examination and audit,
including but not limited to, legal, accounting and other costs of the
arbitration procedure (collectively, the "Costs") shall be borne by the
Sublicensee; if the Shortfall is less than two (2%) percent, each party shall
bear its own Costs.
7. Current Information/Records of the Sublicensee. The Sublicensee shall give to
the Company and its authorized representatives throughout the Term full access
to all its properties and books and records and furnish the Company with such
financial and operating data and other information with respect to the
Sublicensee's business and properties as the Company shall from time to time
25
request at reasonable times upon reasonable notice. The Sublicensee shall advise
the Company and provide information to the Company with respect to any purchase
orders and contracts entered into by the Sublicensee and all contractual
commitments and obligations which the Sublicensee incurs to any third-party.
8. Development and Improvements of the Technologies.
A. The Technologies shall be the exclusive property of Avalon.
B. The Company has no responsibility for the development of the
Technologies. The Sublicensee may develop the Technologies, or improve the
Technologies licensed by the Company. Any and all developments or improvements
made by the Sublicensee in the Technologies, whether patentable or not, shall
become the property of Avalon.
C. If during the Term of this Agreement, the Sublicensee makes any
improvements in the Technologies, or becomes the owner of any such improvements,
then Sublicensee shall be responsible for seeking patent protection for such
improvements. Any such improvements in the Technologies or patents obtained with
respect to such improvements shall be assigned to Avalon (without cost to Avalon
or the Company) and Sublicensee shall give Avalon full information regarding the
methods and technology so that Avalon may utilize such improvements with respect
to the Technologies except as otherwise provided in this Agreement. During the
Term, the Sublicensee shall be entitled to use such improvements pursuant to
this Agreement. The Sublicensee shall also provide Avalon with any and all test
results arising from tests of any of the Technologies as soon as such results
are available.
D. The Sublicensee shall furnish to Avalon, or to its designees and
attorneys, all information, documents and agreements with respect to any
inventions or improvements developed by the Sublicensee, including the
apparatus, processes, and formulas with respect thereto, in order to enable
Avalon to utilize such inventions or improvements with respect to the
Technologies except as otherwise provided in this Agreement and to enable Avalon
and its attorneys and/or agents to prepare and prosecute patent applications
with respect to the Technologies developed by the Sublicensee and if so
requested by Avalon. The Sublicensee's attorneys shall collaborate with such
attorneys as Avalon may designate.
E. The Sublicensee agrees to execute any and all instruments and documents,
and to take any and all such further actions, which are reasonably required to
effectuate this Article "8" of this Agreement.
9. The Company's Representation and Warranties. The Company represents, warrants
and covenants to the Sublicensee that:
A. The Company is a corporation duly organized, validly existing and in
good standing pursuant to the laws of the State of Delaware, with all of the
requisite power and authority to carry on its businesses as presently conducted
in all jurisdictions where presently conducted, to enter into this Agreement and
to consummate the transactions set forth in this Agreement.
B. The Company has the full right, power and legal capacity to enter into
this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company and the consummation by
26
it of the transactions contemplated hereby have been duly approved and
authorized by all necessary action of the Company's Board of Directors, and no
further authorization shall be necessary on the part of the Company for the
performance and consummation by the Company of the transactions contemplated
hereby. A copy of the minutes of said action of the Board of Directors is
annexed hereto as Exhibit "D". The execution, delivery and performance of this
Agreement in accordance with its terms does not and shall not require approval,
consent or authorization of any governmental agency or authority or any
political subdivision thereof.
C. The business and operations of the Company have been and are being
conducted in accordance with all applicable laws, rules and regulations of all
authorities which affect the Company or its properties, assets, businesses or
prospects. The performance of this Agreement shall not result in any breach of,
or constitute a default under, or result in the imposition of any lien or
encumbrance upon any property of the Company or cause an acceleration under any
arrangement, agreement or other instrument to which the Company is a party or by
which any of its assets is bound. The Company has performed all of its
obligations which are required to be performed by it pursuant to the terms of
any such agreement, contract or commitment.
D. The Company is the sole and exclusive licensee of the Avalon License.
E. The Company has the right to license the Technologies, subject to the
terms and conditions of the Avalon License.
F. The Technologies are not in the public domain.
G. The Company has no knowledge of any legal proceedings against the
Company and/or Sublicensee which may be initiated as a direct or indirect result
of this Agreement, nor are there any actions, suits, proceedings or
investigations pending against or originated by the Company before any court or
governmental agency, nor does the Company have knowledge of a threat of any
legal proceeding which might result in any material impairment of right or
ability of the Company to carry out this Agreement.
H. No representation or warranty of the Company which is contained in this
Agreement or in a writing furnished pursuant to this Agreement contains or shall
contain any untrue statement of material facts, omits or shall omit to state any
material fact which is required to make the statements which are contained
herein or therein, not misleading.
I. If, during the Term, any event occurs or any event known to the Company
relating to or affecting the Company shall occur as a result of which (i) any
provision of this Article "9" of this Agreement at that time shall include an
untrue statement of a fact, or (ii) this Article "9" of this Agreement shall
omit to state any fact necessary to make the statements herein, in light of the
circumstances under which they were made, not misleading, the Company shall
immediately notify the Sublicensee pursuant to Paragraph "C" of Article "20" of
this Agreement.
J. It shall not be a defense to suit for damages for any misrepresentation
or breach of covenant or warrant that the Sublicensee knew or had reason to know
that any covenant, representation or warranty in this Agreement or furnished or
to be furnished to the Sublicensee contained untrue statements.
27
10. Sublicensee's Representations and Warranties. The Sublicensee represents,
warrants and covenants to the Company that:
A. The Sublicensee is a corporation duly organized, validly existing and in
good standing pursuant to the laws of the State of __________, with all of the
requisite power and authority to carry on its businesses as presently conducted
in all jurisdictions where presently conducted, to enter into this Agreement and
to consummate the transactions set forth in this Agreement.
B. The Sublicensee has the full right, power and legal capacity to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Sublicensee and the consummation
by it of the transactions contemplated hereby have been duly approved and
authorized by all necessary action of the Sublicensee's Board of Directors, and
no further authorization shall be necessary on the part of the Sublicensee for
the performance and consummation by the Sublicensee of the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
in accordance with its terms does not and shall not require approval, consent or
authorization of any governmental agency or authority or any political
subdivision thereof.
C. The performance of this Agreement shall not result in any breach of, or
constitute a default under, or result in the imposition of any lien or
encumbrance upon any property of the Sublicensee or cause an acceleration under
any arrangement, agreement or other instrument to which the Sublicensee is a
party or by which any of its assets is bound.
D. The Sublicensee agrees to utilize its best efforts to promote and
utilize the Sublicense in accordance with this Agreement.
E. The Sublicensee will not grant, directly or indirectly, to any other
person or entity, any right to use or license to use any of the Technologies.
F. The Sublicensee is not party to or bound by any agreement which would
prohibit the consummation of this Agreement, or would require consent of the
party or parties thereto.
G. The Sublicensee has no knowledge of any legal proceedings against the
Sublicensee and/or the Company which may be initiated as a direct or indirect
result of this Agreement, nor are there any actions, suits, proceedings or
investigations pending against or originated by the Sublicensee before any court
or governmental agency, nor does the Sublicensee have knowledge of a threat of
any legal proceeding which might result in any material impairment of right or
ability of the Sublicensee to carry out this Agreement.
H. No representation or warranty of the Sublicensee which is contained in
this Agreement or in a writing furnished pursuant to this Agreement contains or
shall contain any untrue statement of material facts, omits or shall omit to
28
state any material fact which is required to make the statements which are
contained herein or therein, not misleading.
I. If, during the Term, any event occurs or any event known to the
Sublicensee relating to or affecting the Sublicensee shall occur as a result of
which (i) any provision of this Article "10" of this Agreement at that time
shall include an untrue statement of a fact, or (ii) this Article "10" of this
Agreement shall omit to state any fact necessary to make the statements herein,
in light of the circumstances under which they were made, not misleading, the
Licensee shall immediately notify the Licensor pursuant to Paragraph "C" of
Article "20" of this Agreement.
J. It shall not be a defense to suit for damages for any misrepresentation
or breach of covenant or warrant that the Company knew or had reason to know
that any covenant, representation or warranty in this Agreement or furnished or
to be furnished to the Company contained untrue statements.
11. Warranties. THE COMPANY HEREBY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES AND
GUARANTIES WITH RESPECT TO THE PATENTS, WHETHER WRITTEN, ORAL, IMPLIED OR
INFERRED BY TRADE, CUSTOM OR PRACTICE, INCLUDING, WITHOUT LIMITATION, IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE COMPANY
SHALL NOT BE LIABLE UNDER ANY CIRCUMSTANCES FOR DAMAGES OF ANY KIND, WHETHER
DIRECT, CONSEQUENTIAL OR OTHERWISE RELATING TO THE PERFORMANCE OF ANY PRODUCT OR
ANY TECHNOLOGY.
12. Termination.
A. The Company may terminate this Agreement immediately by giving written
notice to the Sublicensee, pursuant to Paragraph "C" of Article "20" of this
Agreement, after the occurrence of any of the following events:
(i) any installment of the Purchase Price is not paid within five
(5) days after the due date of such payment, in which event the Sublicense shall
terminate and the entire unpaid balance of the Purchase Price shall become
accelerated and be immediately due and owing; provided, however, that the
Sublicensee shall have ten (10) days to cure such default after receipt of
written notice pursuant to Paragraph "C" of Article "20" of this Agreement;
(ii) the Sublicensee defaults in any of its obligations, except as
provided in Subparagraph "(i)" of this Paragraph "A" of this Article "12",
unless within ten (10) calendar days after the Sublicensee receives written
notice of such default pursuant to Paragraph "C" of Article "20" of this
Agreement, Sublicensee cures the default;
(iii) the Sublicensee defaults in any of its obligations under
this Agreement except as provided in Subparagraphs "(i)" and "(ii)" of this
Paragraph "A" of this Article "12" of this Agreement, unless within ten (10)
calendar days after the Sublicensee receives written notice of such default
pursuant to Paragraph "C" of Article "20" of this Agreement, the Sublicensee
cures the default, or, if there is a default which cannot with due diligence be
cured within ten (10) calendar days, the Sublicensee institutes within ten (10)
calendar days steps reasonably necessary to remedy the default and thereafter
diligently prosecutes the same to completion;
29
(iv) any representation or warranty of the Sublicensee contained
in this Agreement is determined to have been untrue when made;
(v) upon admission in writing by the Sublicensee of its inability
to pay its debts as they mature;
(vi) the Sublicensee files a petition for protection as a debtor
under the bankruptcy laws, or a petition to take advantage of any insolvency
act;
(vii) the Sublicensee makes an assignment for the benefit of its
creditors;
(viii) the Sublicensee consents to the appointment of, or
possession by, a custodian for the whole or any substantial part of its
property;
(ix) the Sublicensee on a petition by a third party to subject the
Sublicensee as a debtor to the bankruptcy laws which is filed with or without
its consent, fails to have such petition dismissed within sixty (60) days from
the date that such petition is filed;
(x) notwithstanding the sixty (60) day provision in Subparagraph
"(ix)" of this Paragraph "A" of this Article "12", if Sublicensee on a petition
in bankruptcy filed against it is adjudicated bankrupt;
(xi) the Sublicensee files a petition or answer seeking
reorganization or similar aid or relief under the bankruptcy laws or any other
state or federal law for the relief of debtors or fails to deny in a timely
fashion, the material allegations of a petition filed against it for any such
relief;
(xii) the Sublicensee enters into an agreement for the sale of all
or substantially all of its assets, or the merger or consolidation by the
Sublicensee with or into another corporation;
(xiii) a court of competent jurisdiction shall enter an order,
judgment or decree appointing, with or without its consent, a custodian for the
whole or any substantial part of the Sublicensee's property, or approving a
petition filed against it seeking reorganization or arrangement under any
bankruptcy or insolvency laws or any other state or federal law for the relief
of debtors, and such order, judgment or decree shall not be vacated or set aside
within sixty (60) days from the date of entry thereof;
(xiv) under the provisions of any other law for the relief of
debtors, any court of competent jurisdiction or a custodian shall assume custody
or control of the whole or any substantial part of the Sublicensee's property,
with or without its consent, and such custody or control shall not be terminated
or stayed within sixty (60) days from the date of assumption of such custody or
control;
30
(xv) if a proceeding is commenced to foreclose the security
interest in, or lien on, any property or assets to satisfy the security interest
or lien therein of any creditor of the Sublicensee;
(xvi) if a court of competent jurisdiction shall enter a final
Judgment for the payment of money by the Sublicensee and such judgment shall not
be vacated or set aside or stayed within sixty (60) days from the date of entry
thereof; or
(xvii) if there is an imposition of any attachment or levy, or the
issuance of any note of eviction against the assets or properties of the
Sublicensee.
B. If there is a termination of this Agreement, the Company may:
(i) Require that the Sublicensee cease any further use of the
Technologies;
(ii) Cease performance of all of the Company's obligations
hereunder without liability to the Sublicensee; and
(iii) Cancel the Sublicense of the Technologies with all rights
thereunder reverting to the Company.
C. The Company's foregoing rights and remedies shall be cumulative and in
addition to all other rights and remedies available to the Company in law and
equity. The exercise by the Company of any of its rights pursuant to this
Article "12" of this Agreement shall not be construed to be a waiver of any
other rights or remedies which the Company may have for damages or otherwise and
shall not prejudice the right of the Company to any monies due hereunder with
respect to the Purchase Price or otherwise.
13. Non-Disclosure of Confidential Information.
F. As used in this Agreement, "Confidential Information" shall mean oral or
written information which is directly or indirectly presented to the
Sublicensee, its past, present or future subsidiaries, parents, officers,
consultants, directors, stockholders, affiliates, attorneys, employees, agents
and its and their respective Immediate Families (as defined below; all of the
foregoing are hereinafter collectively referred to as "Agents") by Avalon and/or
the Company, including, but not limited to, information which is developed,
conceived or created by Avalon or the Company, or disclosed to the Sublicensee
or its Agents or known by or conceived or created by the Sublicensee or its
Agents during the Term or after the termination of this Agreement if disclosed
to the Sublicensee or its Agents or known by or conceived or created by the
Sublicensee or its Agents as a result of this Agreement, with respect to Avalon
or the Company, their business or any of their products, processes, and other
services relating thereto relating to the past or present business or any plans
with respect to future business of Avalon or the Company, or relating to the
past or present business of a third party or plans with respect to future
business of a third party which are disclosed to Avalon or the Company.
Confidential Information includes, but is not limited to, all documentation,
hardware and software relating thereto, and information and data in written,
graphic and/or machine readable form, products, processes and services, whether
or not patentable, trademarkable or copyrightable or otherwise protectable,
31
including, but not limited to, information with respect to discoveries;
know-how; ideas; computer programs, source codes and object codes; designs;
algorithms; processes and structures; product information; marketing
information; price lists; cost information; product contents and formulae;
manufacturing and production techniques and methods; research and development
information; lists of clients and vendors and other information relating
thereto; financial data and information; business plans and processes;
documentation with respect to any of the foregoing; and any other information of
Avalon or the Company that Avalon or the Company informs the Sublicensee or its
Agents or the Sublicensee or its Agents should know, by virtue of its or their
position or the circumstances in which the Sublicensee or its Agents learned
such other information, is to be kept confidential including, but not limited
to, any information acquired by the Sublicensee or its Agents from any sources
prior to the commencement of this Agreement. Confidential Information also
includes similar information obtained by Avalon or the Company in confidence
from its vendors, licensors, other sublicensees, customers and/or clients.
Confidential Information may or may not be labeled as confidential. "Immediate
Family" shall include the following: (A) any spouse, parent, spouse of a parent,
mother-in-law, father-in-law, brother-in-law, sister-in-law, child, spouse of a
child, adopted child, spouse of an adopted child, sibling, spouse of a sibling,
grandparent, spouse of a grandparent, and any issue or spouse of any of the
foregoing, and (B) such child or issue of such child which is born and/or
adopted during or after the term of this Agreement and the issue (whether by
blood or adoption) of such person; provided, however, that it shall not include
any person who was legally adopted after attaining the age of eighteen (18) by
any of the persons specified in this Paragraph "A" of this Article "13" of this
Agreement or any spouse or issue (whether by blood or adoption) of any such
person. A parent of a specified person shall include an affiliate. G. Except as
required in the performance of the Sublicensee's or its Agents' obligations
pursuant to this Agreement, neither the Sublicensee nor its Agents shall, during
or after the Term, directly or indirectly, use any Confidential Information or
disseminate or disclose any Confidential Information to any person, firm,
corporation, association or other entity. The Sublicensee or its Agents shall
take reasonable measures to protect Confidential Information from any
accidental, unauthorized or premature use, disclosure or destruction.
Information shall not be considered Confidential Information if it: (i) is at
the time of disclosure or thereafter a part of the public domain without breach
of this Agreement by the Sublicensee or its Agents; provided, however, that the
act of patenting shall not cause or be construed as causing the patented
materials to be in the public domain, (ii) is disclosed as reasonably required
in a proceeding to enforce the Sublicensee's rights under this Agreement or
(iii) is disclosed as required by court order or applicable law; provided,
however, that if either the Sublicensee or its Agents is legally requested or
required by court order or applicable law, including, but not limited to, by
oral question, interrogatories, request for information or documents, subpoenas,
civil investigative demand or similar process to disclose any Confidential
Information, the Sublicensee or its Agents, as the case may be, shall promptly
notify Avalon and the Company of such request or requirement so that Avalon
and/or the Company may seek an appropriate protective order; provided further,
however; that if such protective order is not obtained, the Sublicensee and its
Agents agree to furnish only that portion of the Confidential Information which
they are advised by their respective counsels is legally required.
H. Upon termination of this Agreement for any reason or at any time upon
request of the Company, the Sublicensee and its Agents agree to deliver to
Avalon all materials of any nature which are in the Sublicensee's or its Agents'
possession or control and which are or contain Confidential Information, Work
Product or Work Products (hereinafter defined), or which are otherwise the
32
property of Avalon or the Company or any vendor, licensor, other sublicensee,
customer or client of Avalon or the Company, including, but not limited to
writings, designs, documents, records, data, memoranda, tapes and disks
containing software, computer source code listings, routines, file layouts,
record layouts, system design information, models, manuals, documentation and
notes. The Sublicensee and its Agents shall destroy all written documentation
prepared by them for internal purposes based in whole or in part on any
Confidential Information and such destruction shall be confirmed to the Company
in writing by an officer of the Sublicensee and/or its Agents.
I. All ideas, inventions, discoveries or improvements, whether patentable
or not, conceived by the Sublicensee or its Agents (alone or with others) during
the Term ("Work Products") shall be the exclusive property of and assigned to
Avalon or as Avalon may direct without compensation to the Sublicensee or its
Agents. Any records with respect to the foregoing shall be the sole and
exclusive property of Avalon and the Sublicensee or its Agents shall surrender
possession of such records to Avalon upon termination of this Agreement. Any
Work Product shall be deemed incorporated in the definition of Confidential
Information for all purposes hereunder. J. Neither the Sublicensee nor its
Agents shall assert any rights with respect to Avalon or the Company, their
businesses, or any of their products, processes or other services relating
thereto, Work Product or any Confidential Information as having been acquired or
known by the Sublicensee or its Agents prior to the commencement of the Term.
14. Protection of Patents.
A. If Sublicensee learns of any infringement of the Patents, Sublicensee
shall promptly notify the Company of such information. Upon learning of such
information the Company shall take such actions as it deems advisable in its
sole and absolute discretion for the protection of the Patents.
B. In order to induce the Company to enter into this Agreement, Sublicensee
agrees that neither the Sublicensee, nor any of its shareholders, officers,
directors or principles, will not during the Term of this Agreement or, for a
period of five (5) years from the date of termination hereof, except as required
pursuant to this Agreement, utilize any of the Technologies or develop, sell or
market any of the Technologies, or directly or indirectly own, manage, operation
of control of or be connected as an officer, director, shareholder, partner,
consultant, owner, employee, agent, lender, donor, vendor or otherwise, or have
any financial interest in or aid or assist anyone else in the conduct of any
competing entity which manufactures, distributes or offers for sale goods
similar to the Technologies to any competing entity. Sublicensee, and its
shareholders, officers, directors and principals further agree that they will
not for a period of five (5) years from the date of termination hereof (i)
personally, or cause others to personally induce or attempt to induce any
employee to terminate their employment with the Company; (ii) interfere with or
disrupt the Company's relationship with its suppliers, vendors, customers or
employees; or (iii) solicitor entice any person to leave their employ with the
Company. For the purposes herewith the term "competing entity" shall mean any
33
business or enterprise of any and every kind whatsoever which is engaged in the
manufacture, distribution or sale of goods similar or having a similar purpose
to the Technologies, anywhere in the Territories; provided, however, that
ownership of one (1%) percent or less of any class of outstanding securities of
a company whose securities are listed on a national securities exchange or which
has not fewer than 1,000 shareholders shall not be deemed to constitute
ownership or participation in the ownership of the business of such company.
C. The Sublicensee agrees, on its behalf and on behalf of its Agents, that
the duration, scope and geographic area for which the provisions set forth in
Paragraph "B" of this Article "14" of this Agreement are to be effective are
reasonable. If any court of competent jurisdiction determines that any provision
of this Agreement is invalid or unenforceable by reason of such provision
extending the covenants and agreements contained herein for too great a period
of time or over too great a geographical area, or by reason of it being too
extensive in any other respect, such agreement or covenant shall be interpreted
to extend only over the maximum period of time and geographical area, and to the
maximum extent in all other respects, as to which it is valid and enforceable,
all as determined by such court in such action. Any determination that any
provision of this Agreement is invalid or unenforceable, in whole or in part,
shall have no effect on the validity or enforceability of any remaining
provision of this Agreement.
D. The provisions of this Article "14" of this Agreement shall survive the
termination of this Agreement.
15. Indemnification.
E. Indemnification by the Licensee. In order to induce the Company to enter
into and perform this Agreement, the Sublicensee does hereby indemnify, protect,
defend and save and hold harmless the Company and each of its shareholders,
affiliates, officers, directors, control persons, employees, attorneys, agents,
partners and trustees and personal representatives of any of the foregoing
("Indemnified Parties"), from and against any loss resulting to any of them from
any material loss, liability, cost, damage, or expense which the Indemnified
Parties may suffer, sustain or incur arising out of or due to a breach by the
Sublicensee of the representations, warranties and covenants set forth in
Article "10" of this Agreement or in any documents delivered pursuant hereto, or
of a breach by the Sublicensee of any of its obligations pursuant to this
Agreement or in any documents delivered pursuant hereto.
F. Indemnification by the Licensor. In order to induce the Sublicensee to
enter into and perform this Agreement, the Company does hereby indemnify,
protect, defend and save and hold harmless the Sublicensee and each of its
members, affiliates, officers, managers, control persons, employees, attorneys,
agents, partners and trustees and personal representatives of any of the
foregoing ("Indemnified Parties"), from and against any loss resulting to any of
them from any material loss, liability, cost, damage, or expense which the
Indemnified Parties may suffer, sustain or incur arising out of or due to a
breach by the Company of the representations, warranties and covenants set forth
in Article "9" of this Agreement or in any documents delivered pursuant hereto,
or of a breach by the Company of any of its obligations pursuant to this
Agreement or in any documents delivered pursuant hereto.
G. Reasonable Costs, Etc. The indemnification which is set forth in this
Article "15" of this Agreement shall be deemed to include not only the specific
liabilities or obligation with respect to which such indemnity is provided, but
34
also all counsel fees, reasonable costs, expenses and expenses of settlement
relating thereto, whether or not any such liability or obligation shall have
been reduced to judgment.
H. Third Party Claims. If any demand, claim, action or cause of action,
suit, proceeding or investigation (collectively, the "Claim") is brought against
an Indemnified Party for which the Indemnified Party intends to seek indemnity
from the other party hereto (the "Indemnifying Party"), then the Indemnified
Party within twenty-one (21) days after such Indemnified Party's receipt of the
Claim, shall notify the Indemnifying Party pursuant to Paragraph "C" of Article
"20" of this Agreement which notice shall contain a reasonably thorough
description of the nature and amount of the Claim (the "Claim Notice"). The
Indemnifying Party shall have the option to undertake, conduct and control the
defense of such claim or demand. Such option to undertake, conduct and control
the defense of such claim or demand shall be exercised by notifying the
Indemnified Party within ten (10) days after receipt of the Claim Notice
pursuant to Paragraph "C" of Article "20" of this Agreement (such notice to
control the defense is hereinafter referred to as the "Defense Notice"). The
failure of the Indemnified Party to notify the Indemnifying Party of the Claim
shall not relieve the Indemnifying Party from any liability which the
Indemnifying Party may have pursuant to this Article "15" of this Agreement
except to the extent that such failure to notify the Indemnifying Party
prejudices the Indemnifying Party. The Indemnified Party shall use all
reasonable efforts to assist the Indemnifying Party in the vigorous defense of
the Claim. All costs and expenses incurred by the Indemnified Party in defending
the Claim shall be paid by the Indemnifying Party. If, however, the Indemnified
Party desires to participate in any such defense or settlement, it may do so at
its sole cost and expense (it being understood that the Indemnifying Party shall
be entitled to control the defense). The Indemnified Party shall not settle the
Claim. If the Indemnifying Party does not elect to control the defense of the
Claim, within the aforesaid ten (10) day period by proper notice pursuant to
Paragraph "C" of Article "20" of this Agreement, then the Indemnified Party
shall be entitled to undertake, conduct and control the defense of the Claim (a
failure by the Indemnifying Party to send the Defense Notice to the Indemnified
Party within the aforesaid ten (10) day period by proper notice pursuant to
Paragraph "C" of Article "20" of this Agreement shall be deemed to be an
election by the Indemnifying Party not to control the defense of the Claim);
provided, however, that the Indemnifying Party shall be entitled, if it so
desires, to participate therein (it being understood that in such circumstances,
the Indemnified Party shall be entitled to control the defense). Regardless of
which party has undertaken to defend any claim, the Indemnifying Party may,
without the prior written consent of the Indemnified Party, settle, compromise
or offer to settle or compromise any such claim or demand; provided however,
that if any settlement would result in the imposition of a consent order,
injunction or decree which would restrict the future activity or conduct of the
Indemnified Party, the consent of the Indemnified Party shall be a condition to
any such settlement. Notwithstanding the foregoing provisions of this Article
"15" of this Agreement, as a condition to the Indemnifying Party either having
the right to defend the Claim, or having control over settlement as indicated in
this Article "15" of this Agreement, the Indemnifying Party shall execute an
agreement, in the form annexed hereto and made a part hereof as Exhibit "D",
acknowledging its liability for indemnification pursuant to this Article "15" of
this Agreement. Whether the Indemnifying Party shall control and assume the
defense of the Claim or only participate in the defense or settlement of the
Claim, the Indemnified Party shall give the Indemnifying Party and its counsel
access, during normal business hours, to all relevant business records and other
documents, and shall permit them to consult with its employees and counsel.
35
16. Equitable Relief. If the Sublicensee breaches this Agreement, the Company
shall have the right, at its election, to obtain equitable relief including, but
not limited to, an order for specific performance of this Agreement or an
injunction, without the need to: (i) post a bond or other security, (ii) to
prove any actual damage or (iii) to prove that money damages would not provide
an adequate remedy. Resort to such equitable relief, however, shall not be
construed to be a waiver of any other rights or remedies which the Company may
have for damages or otherwise.
17. No Agency. The Sublicensee is not and shall not be deemed to be the legal
representative or agent of the Company for any purpose whatsoever. Neither party
shall have the right or authority to act or bind the other in any way or to sign
the name of the other or to represent that the other is in any way responsible
for its acts or omissions. Neither of the parties hereto is or shall be deemed
to be a partner or joint venturer of the other.
18. Survival. All covenants, agreements, representations and warranties made in
or in connection with this Agreement shall survive its termination, and shall
continue in full force and effect after its termination, it being understood and
agreed that each of such covenants, agreements, representations and warranties
is of the essence of this Agreement and the same shall be binding upon and shall
inure to the benefit of the parties hereto, their successors and assigns.
19. Security. This Agreement shall be secured by a security interest in the
assets of the Sublicensee, pursuant to a Security Agreement, by and between the
Company and the Sublicensee, to be executed simultaneously with this Agreement,
a copy of which is annexed hereto as Exhibit "E" and made a part hereof.
20. Miscellaneous.
R. Headings. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
S. Enforceability. If any provision which is contained in this Agreement
should, for any reason, be held to be invalid or unenforceable in any respect
under the laws of any jurisdiction, such invalidity or unenforceability shall
not affect any other provision of this Agreement and this Agreement shall be
construed as if such invalid or unenforceable provision had not been contained
herein.
T. Notices. Any notice or other communication required or permitted
hereunder shall be sufficiently given if sent by (i) mail by (a) certified mail,
postage prepaid, return receipt requested and (b) first class mail, postage
prepaid (ii) overnight delivery with confirmation of delivery or (iii) facsimile
transmission with an original mailed by first class mail, postage prepaid,
addressed as follows:
To the Company: Oiltek, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxx, President
Fax No.: (000) 000-0000
36
With a copy to: Xxxxx & Fraade, P.C.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxx, Esq.
Fax No.: (000) 000-0000
To the Sublicensee: ____________________
Attn: _______________
Fax No.: (___) ___-____
With a copy to: ____________________
Attn: _______________
Fax No.: (___) ___-____
or in each case to such other address and facsimile number as shall have last
been furnished by like notice. If all of the methods of notice set forth in this
Paragraph "C" of this Article "20" of this Agreement are impossible for any
reason, notice shall be in writing and personally delivered to the aforesaid
addresses. Each notice or communication shall be deemed to have been given as of
the date so mailed or delivered as the case may be; provided, however, that any
notice sent by facsimile shall be deemed to have been given as of the date so
sent if a copy thereof is also mailed by first class mail on the date sent by
facsimile. If the date of mailing is not the same as the date of sending by
facsimile, then the date of mailing by first class mail shall be deemed to be
the date upon which notice is given; provided further, however, that any notice
sent by overnight delivery shall be deemed to have been given as of the date of
delivery.
U. Governing Law; Disputes. This Agreement shall in accordance with Section
5-1401 of the General Obligations Law of New York in all respects be construed,
governed, applied and enforced under the internal laws of the State of New York
without giving effect to the principles of conflicts of laws and be deemed to be
an agreement entered into in the State of New York and made pursuant to the laws
of the State of New York. Except as otherwise set forth in Article "16" of this
Agreement, the parties agree that they shall be deemed to have agreed to binding
arbitration with respect to the entire subject matter of any and all disputes
relating to or arising under this Agreement including, but not limited to, the
specific matters or disputes as to which arbitration has been expressly provided
for by other provisions of this Agreement and that any such arbitration shall be
commenced exclusively in New York, New York. Any such arbitration shall be by a
panel of three arbitrators and pursuant to the commercial rules then existing of
the American Arbitration Association in the State of New York, County of New
York. In all arbitrations, judgment upon the arbitration award may be entered in
any court having jurisdiction. The parties specifically designate the courts in
the City of New York, State of New York as properly having jurisdiction for any
proceeding to confirm and enter judgment upon any such arbitration award. The
parties hereby consent to and submit to the exclusive jurisdiction of the courts
37
of the State of New York in any action or proceeding and submit to personal
jurisdiction over each of them by such courts. The parties hereby waive personal
service of any and all process and specifically consent that in any such action
or proceeding brought in the courts of the State of New York, any service of
process may be effectuated upon any of them by certified mail, return receipt
requested, in accordance with Paragraph "C" of this Article "20" of this
Agreement. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law.
The parties agree, further, that the prevailing party in any such
arbitration as determined by the arbitrators shall be entitled to such costs and
attorney's fees, if any, in connection with such arbitration as may be awarded
by the arbitrators. In connection with the arbitrators' determination for the
purpose of which party, if any, is the prevailing party, they shall take into
account all of the factors and circumstances including, without limitation, the
relief sought, and by whom, and the relief, if any, awarded, and to whom. In
addition, and notwithstanding the foregoing sentence, a party shall not be
deemed to be the prevailing party in a claim seeking monetary damages, unless
the amount of the arbitration award exceeds the amount offered in a legally
binding writing by the other party by fifteen (15%) percent or more. For
example, if the party initiating arbitration ("A") seeks an award of one hundred
thousand ($100,000) dollars plus costs and expenses, the other party ("B") has
offered A fifty thousand ($50,000) dollars in a legally binding written offer
prior to the commencement of the arbitration proceeding, and the arbitration
panel awards any amount less than fifty-seven thousand five hundred ($57,500)
dollars to A, the panel should determine that B has "prevailed".
The arbitration panel shall have no power to award non-monetary or
equitable relief of any sort. It shall also have no power to award (i) damages
inconsistent with any applicable agreement between the parties or (ii) punitive
damages or any other damages not measured by the prevailing party's actual
damages; and the parties expressly waive their right to obtain such damages in
arbitration or in any other forum. In no event, even if any other portion of
these provisions is held invalid or unenforceable, shall the arbitration panel
have power to make an award or impose a remedy which could not be made or
imposed by a court deciding the matter in the same jurisdiction.
Discovery shall be permitted in connection with the arbitration only to the
extent, if any, expressly authorized by the arbitration panel upon a showing of
substantial need by the party seeking discovery.
All aspects of the arbitration shall be treated as confidential. The
parties and the arbitration panel may disclose the existence, content or results
of the arbitration only as provided in the rules of the American Arbitration
Association in New York, New York. Before making any such disclosure, a party
shall give written notice to all other parties and shall afford such parties a
reasonable opportunity to protect their interest.
V. No Assignment by the Sublicensee. The rights granted pursuant to this
Agreement shall not be transferable by the Sublicensee.
W. Construction. Each of the parties hereto hereby acknowledges and agrees
that (i) Xxxxx & Fraade, P.C. drafted this Agreement on behalf of both of the
parties to this Agreement and (ii) this Agreement shall not, therefore, be
construed more strictly against any party responsible for its drafting
regardless of any presumption or rule requiring construction against the party
whose attorney drafted this Agreement.
X. Entire Agreement. This Agreement and all documents and instruments
referred to herein (i) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
38
respect to the subject matter hereof and thereof, and (ii) are not intended to
confer upon any person other than the parties hereto any rights or remedies
hereunder. Each party hereto agrees that, except for the representations and
warranties contained in this Agreement, neither the Licensor nor the Licensee
makes any other representations or warranties, and each hereby disclaims any
other representations and warranties made by itself or any of its officers,
directors, managers, employees, agents, financial and legal advisors or other
representatives, with respect to the execution and delivery of this Agreement or
the transactions contemplated hereby, notwithstanding the delivery or disclosure
to the other or the other's representatives of any documentation or other
information with respect to any one or more of the foregoing.
Y. Further Assurances. The parties agree to execute any and all such other
further instruments and documents, and to take any and all such further actions
which are reasonably required to effectuate this Agreement and the intents and
purposes hereof. Z. Binding Agreement. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their heirs, executors,
administrators, personal representatives, successors and assigns.
AA. Non-Waiver. Except as otherwise expressly provided herein, no waiver of
any covenant, condition, or provision of this Agreement shall be deemed to have
been made unless expressly in writing and signed by the party against whom such
waiver is charged; and (i) the failure of any party to insist in any one or more
cases upon the performance of any of the provisions, covenants or conditions of
this Agreement or to exercise any option herein contained shall not be construed
as a waiver or relinquishment for the future of any such provisions, covenants
or conditions, (ii) the acceptance of performance of anything required by this
Agreement to be performed with knowledge of the breach or failure of a covenant,
condition or provision hereof shall not be deemed a waiver of such breach or
failure, and (iii) no waiver by any party of one breach by another party shall
be construed as a waiver of any other or subsequent breach of this Agreement.
BB. Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
CC. Facsimile Signatures. Any signature which is delivered via facsimile
shall be deemed to be an original and have the same force and effect as if such
facsimile signature were the original thereof.
DD. Modifications. This Agreement may not be changed, modified, extended,
terminated or discharged orally, except by a written agreement specifically
referring to this Agreement which is signed by all of the parties to this
Agreement.
EE. Exhibits. All Exhibits annexed or attached to this Agreement are
incorporated into this Agreement by reference thereto and constitute an integral
part of this Agreement.
FF. Survival. All of the provisions and obligations of this Agreement shall
survive the termination of this Agreement.
GG. Severability. The provisions of this Agreement shall be deemed
separable. Therefore, if any part of this Agreement is rendered void, invalid or
unenforceable, such rendering shall not affect the validity or enforceability of
the remainder of this Agreement; provided that if the part or parts which are
void, invalid or unenforceable as aforesaid shall substantially impair the value
of the whole Agreement to either party, that party may cancel, and terminate the
Agreement by giving written notice to the other party.
39
IN WITNESS WHEREOF, the parties to this Agreement have set their hands and
seals or caused these presents to be signed of the day and year first above
written.
Oiltek, Inc.
By: ________________________________________
Xxxx Xxxxxxx, President
Sublicensee
By: ________________________________________
Name: Title:
40
LIST OF EXHIBITS
Exhibit A: Avalon License
Exhibit B: Territories
Exhibit C: Patents
Exhibit D: Minutes of Meeting of the Company's Board of Directors
Exhibit E: Form of Letter Agreement to be Executed Pursuant to
Article "15" of the Agreement
Exhibit F: Security Agreement
41
EXHIBIT B
TERRITORIES
o "System and Method for the Mitigation of Paraffin Wax Deposition From
Crude Oil by Using Ultrasonic Waves" - Worldwide
o "Well Casing Based-Geophysical Sensor Apparatus, System and Method" -
United States
o "Detection of Leaks in Pipelines" - United States
42
EXHIBIT C
PATENTS
"Patents" shall mean the following patent, patent applications, patents issuing
from the following applications, and all patents which are reissues,
reexaminations, extensions, continuations or divisionals of any of the following
patent or patents issuing from the following applications:
o International Patent Application 2004/024309A2, filed September 12,
2003, titled "System and Method for the Mitigation of Paraffin Wax
Deposition From Crude Oil by Using Ultrasonic Waves"
o Nationalized PCT United States, Serial number 10/527,614, publication
number US-2005-0269097-A1, filed 3/11/2005, "System and Method for the
Mitigation of Paraffin Wax Deposition from Crude Oil by Using
Ultrasonic Waves"
o Nationalized PCT Canada, Application No. 2,498,742 filed 3/11/2005,
"System and Method for the Mitigation of Paraffin Wax Deposition from
Crude Oil by Using Ultrasonic Waves," Inventor: Xxxxx Xxxxxxx Xxxxxx,
PhD
o United States, Application No. 11/237054 filed 9/27/05, "Well Casing
Based-Geophysical Sensor Apparatus, System and Method," Inventor
Xxxxxxx Daily.
o United States, Patent No. 5,416,724 filed 10/9/92, granted 5/16/95,
"Detection of Leaks in Pipelines," Inventor Xxxxxxx Xxxxx.
43
EXHIBIT D
UNANIMOUS WRITTEN CONSENT
OF
THE DIRECTORS
IN LIEU OF A MEETING OF THE BOARD OF DIRECTORS
OF
OILTEK, INC.
The undersigned, being all of the directors of Oiltek, Inc. (the
"Corporation"), a Delaware Corporation, in accordance with Section 141(f) of the
General Corporation Law of the State of Delaware, the following resolutions with
the same force and effect as if they had been unanimously adopted at a duly
convened meeting of the Board of Directors of the Corporation:
WHEREAS, the Board of Directors believes it is in the best interest of
the Corporation to enter into the Sublicense Agreement with ____________________
(the "Sublicensee"), pursuant to which the rights to certain patents which were
licensed to the Corporation by Avalon Oil & Gas, Inc. (the "Licensor") will be
sublicensed to the Sublicensee.
NOW THEREFORE, it is
RESOLVED, that the Board of Directors hereby authorizes the Corporation
to enter into the Sublicense Agreement with the Sublicensee, pursuant to which
the rights to certain patents which were licensed to the Corporation by the
Licensor will be sublicensed to the Sublicensee.
RESOLVED, that the officers of the Corporation, and each of them, are
hereby authorized and empowered, in the name and on behalf of the Corporation,
to execute such documents and to take such additional action as they or any of
them may deem necessary or desirable in order to implement the intents and
purposes of all the foregoing resolutions.
IN WITNESS WHEREOF, the undersigned have executed this Written Consent
as of the ___ day of ________ _____.
---------------------------------------------
Xxxxx Xxxxx
---------------------------------------------
Xxxxxxx Xxxxxx
---------------------------------------------
Xxxx Xxxxxxxxx
44
EXHIBIT E
FORM OF LETTER AGREEMENT TO BE
EXECUTED PURSUANT TO ARTICLE 15
OF THE AGREEMENT
From: The Indemnifying Party
(Name and Address)
To: The Indemnified Party
(Name and Address)
Date:
Gentlemen/Ladies:
This shall confirm and acknowledge that pursuant to Article "15" of the
Sublicense Agreement (the "Agreement") dated as of the ___ day of ________,
_____, by and between Oiltek, Inc. and ____________________ the undersigned
acknowledges its liability for indemnification to you with respect to
____________________ (description of claim) (the "Claim"), and shall not take
the position that it is not liable to you with respect to the Claim. Such
obligation is subject to all of the provisions, terms and conditions of the
Agreement.
Very truly yours,
-----------------------------------
Name of Indemnifying Party
By:
--------------------------------
(Authorized Signature) Name: Title:
STATE OF )
)ss.:
COUNTY OF )
On the ____ day of __________, ____ before me personally came _______________ to
me known, who, being by me duly sworn, did depose and say that that he or she is
the __________ of ____________________, the company described in and which
executed the foregoing instrument; that he or she knows the seal of said
company; that the seal affixed to said instrument is such company's seal; that
it was so affixed by order of the board of directors of said company, and that
he or she signed his or her name thereto by like order.
---------------------------------
Notary Public
45
EXHIBIT D
MINUTES OF MEETING OF THE LICENSOR'S BOARD OF DIRECTORS
UNANIMOUS WRITTEN CONSENT
OF
THE DIRECTORS
IN LIEU OF A MEETING OF THE BOARD OF DIRECTORS
OF
AVALON OIL & GAS, INC.
The undersigned, being all of the directors of Avalon Oil & Gas, Inc.
(the "Corporation"), a Nevada Corporation, in accordance with Section 78.315 of
the Nevada Revised Statutes, the following resolutions with the same force and
effect as if they had been unanimously adopted at a duly convened meeting of the
Board of Directors of the Corporation:
WHEREAS, the Board of Directors believes it is in the best interests of
the Corporation to enter into the License Agreement with Oiltek, Inc.
("Oiltek"), a copy of which is annexed hereto as Exhibit "A", pursuant to which
the rights to certain technologies which the Corporation acquired from UTEK
Corporation will be licensed to Oiltek in consideration of a payment by the
Corporation to Oiltek of $50,000, and Oiltek will issue ten million (10,000,000)
shares of Common Stock of Oiltek to the Corporation.
NOW THEREFORE, it is
RESOLVED, that the Board of Directors hereby authorizes the Corporation
to enter into the License Agreement with Oiltek, a copy of which is annexed
hereto as Exhibit "A", pursuant to which the rights to certain technologies
which the Corporation acquired from UTEK Corporation will be licensed to Oiltek
in consideration of a payment by the Corporation to Oiltek of $50,000, and
Oiltek will issue ten million (10,000,000) shares of Common Stock of Oiltek to
the Corporation.
RESOLVED, that the officers of the Corporation, and each of them, are
hereby authorized and empowered, in the name and on behalf of the Corporation,
to execute such documents and to take such additional action as they or any of
them may deem necessary or desirable in order to implement the intents and
purposes of the foregoing resolution.
IN WITNESS WHEREOF, the undersigned have executed this Written Consent
as of the 20th day of August 2007.
/s/ Xxxxxxx Xxxxxx
------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxx Xxxxxx
------------------------------
Xxxx Xxxxxx
/s/ Xxxx Xxxxxxxxx
------------------------------
Xxxx Xxxxxxxxx
46
EXHIBIT E
MINUTES OF MEETING OF THE LICENSEE'S BOARD OF DIRECTORS
UNANIMOUS WRITTEN CONSENT
OF
THE DIRECTORS
IN LIEU OF A MEETING OF THE BOARD OF DIRECTORS
OF
OILTEK, INC.
The undersigned, being all of the directors of Oiltek, Inc. (the
"Corporation"), a Delaware Corporation, in accordance with Section 141(f) of the
General Corporation Law of the State of Delaware, the following resolutions with
the same force and effect as if they had been unanimously adopted at a duly
convened meeting of the Board of Directors of the Corporation:
WHEREAS, the Board of Directors believes it is in the best interest of
the Corporation to enter into the License Agreement with Avalon Oil & Gas, Inc.
("Avalon"), a copy of which is annexed hereto as Exhibit "A", pursuant to which
the rights to certain technologies which Avalon acquired from UTEK Corporation
will be licensed to the Corporation in consideration of the issuance by the
Corporation of ten million (10,000,000) shares of Common Stock of the
Corporation in the name of Avalon, and a payment by Avalon to the Corporation of
$50,000.
NOW THEREFORE, it is
RESOLVED, that the Board of Directors hereby authorizes the Corporation
to enter into the License Agreement with Avalon, a copy of which is annexed
hereto as Exhibit "A", pursuant to which the rights to certain technologies
which Avalon acquired from UTEK Corporation will be licensed to the Corporation
in consideration of the issuance by the Corporation of ten million (10,000,000)
shares of Common Stock of the Corporation in the name of Avalon, and a payment
by Avalon to the Corporation of $50,000.
RESOLVED, that the officers of the Corporation, and each of them, are
hereby authorized and empowered, in the name and on behalf of the Corporation,
to execute such documents and to take such additional action as they or any of
them may deem necessary or desirable in order to implement the intents and
purposes of the foregoing resolution.
IN WITNESS WHEREOF, the undersigned have executed this Written Consent
as of the 20th day of August 2007.
/s/ Xxxxxxx Xxxxxx
---------------------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxx Xxxxxx
----------------------------------------------
Xxxx Xxxxxx
/s/ Xxxx Xxxxxxxxx
----------------------------------------------
Xxxx Xxxxxxxxx
47
EXHIBIT F
FORM OF LETTER AGREEMENT TO BE
EXECUTED PURSUANT TO ARTICLE 18
OF THE AGREEMENT
From: The Indemnifying Party
(Name and Address)
To: The Indemnified Party
(Name and Address)
Date:
Gentlemen/Ladies:
This shall confirm and acknowledge that pursuant to Article "18" of the
Exclusive License Agreement (the "Agreement") dated as of the 17th day of
August, 2007, by and between Avalon Oil & Gas, Inc. and Oiltek, Inc. the
undersigned acknowledges its liability for indemnification to you with respect
to _________________ (description of claim) (the "Claim"), and shall not take
the position that it is not liable to you with respect to the Claim. Such
obligation is subject to all of the provisions, terms and conditions of the
Agreement.
Very truly yours,
-----------------------------
Name of Indemnifying Party
By:
-------------------------
(Authorized Signature )
STATE OF )
)ss.:
COUNTY OF )
On the ____ day of __________, ____ before me personally came __________ to me
known, who, being by me duly sworn, did depose and say that that he or she is
the ____________ of __________________________, the company described in and
which executed the foregoing instrument; that he or she knows the seal of said
company; that the seal affixed to said instrument is such company's seal; that
it was so affixed by order of the board of directors of said company, and that
he or she signed his or her name thereto by like order.
---------------------------------------
Notary Public
48
