WORLDWIDE TECHNOLOGY LICENSE AGREEMENT
THIS AGREEMENT (the Agreement) is made and entered into this
3rd day of July 2008 (the Effective Date), by and between Xxxxxx X.
Xxxxxx, who resides at 0000 Xxxxx Xxxxxxx Xxxxx Xxxxxx, Xxxxxx Xxxxx,
Xxxxxxx 00000 (Cherch) and Xxxxxx X. Xxxxxxxxxxxx, who resides at 0000 XX
00xx Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000 (Papadoyianis) (Cherch and
Papadoyianis are collectively referred to herein as the Inventors), and
Neptune Industries, Inc., headquartered at 00000 Xx. Xxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000 (the Company). Cherch, Papadoyianis,
and the Company are collectively referred to herein as the Parties.
RECITALS
WHEREAS, Cherch and Papadoyianis are the sole inventors of that
certain technology originally referred to as Eco-Tank, which is now known
as Aqua-Sphere and Aqua-Cell(the Technology), and
WHEREAS, Cherch and Papadoyianis are senior officers and members of
the Board of Directors of the Company;
WHEREAS, the Inventors and the Company entered into a
Marketing/Licensing Agreement on June 1, 1998 providing for the license
of the Technology to the Company for marketing and development in North
America only, with a right of first refusal for other areas of the world
(the Prior Licensing Agreement), and
WHEREAS, a patent has been applied for in the names of inventors
for the Technology, which patent has been accepted for filing by the
United States Patent & Trademark Office; and
WHEREAS, the Parties desire to provide for the use, sale,
marketing, development and manufacture of the Technology, or products
derived from the Technology, in the aquaculture industry worldwide by
the Company and to replace the Prior Licensing Agreement on the terms
and conditions hereafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the Parties agree as follows:
1. LICENSE. The Inventors hereby grant and demise to the
Company the exclusive right to use, sell, sub-license, market, develop
and manufacture the Technology, or products derived from the Technology,
and all related rights, privileges and benefits associated with the
Technology, in all territories, countries and locations in the world, to
the exclusion of all other persons and parties, for the term of this
Agreement, including any extensions thereof, but only in connection with
and in the aquaculture industry (the ?Territory?). The Inventors reserve
all rights and privileges relating to, arising out of, or part of the
Technology outside of the Territory, not expressly granted herein,
including use, license, development and marketing of the Technology in
all markets other than the Territory.
2. TERM. This Agreement shall continue in effect for a period
of twenty (20) years from the Effective Date, unless renewed or extended
as provided herein, unless the Company defaults during the term and fails
to cure any default, as provided herein, and provided that any patent
rights related to the Technology now existing remain in force. At the end
of the initial Term, this Agreement shall be renewed and extended
automatically for another 20 year term on the same terms and conditions.
3. COMPENSATION; ROYALTIES. As compensation for the exclusive
license granted herein for the Territory, the Company shall compensate
the Inventors by paying an Advance Royalty and a Deferred Royalty, as
follows:
a. Advance Royalty. On approval and execution of this Agreement
by all parties, the Company shall pay an advance royalty to the Inventors
on the following terms:
i. The Company shall pay a cash advance royalty in the amount of
$200,000, one half ($100,000) to each Inventor, payable one-half ($100,000 or
$50,000 to each Inventor) on signing and one-half by delivery of two
promissory notes in the amount of $50,000 each, one for each Inventor,
payable on or before July 1, 2009, with interest at the annual rate of
thirteen percent (13%). In the event the Company cannot pay this
outstanding amount, including all accrued interest within this time, the
Company shall deliver and the Inventors shall accept preferred stock of the
Company. Such preferred stock shall pay a dividend at the rate of fifteen
percent (15%) per annum and have a conversion to common stock at a ratio of
one (1) preferred to ten (10) common shares of the Company.
ii. The Company shall issue to each Inventor five hundred thousand
(500,000) shares of $1.00 par value, convertible, redeemable, cumulative
preferred stock of the Company, which preferred stock shall pay a cumulative
annual dividend at the rate of fifteen percent (15%) per annum and shall be
convertible into common stock of the Company at a ratio of one (1) preferred
to ten (10) common shares of the Company.
iii. The Company agrees to assume all responsibility for the payment
of any taxes which may become due for the issuance under Section 3.a.ii of
the preferred stock certificates to the Inventors.
iv. The Inventors agree that they shall be responsible for the
payment of any taxes which may become due on dividend payments received from
the Company on the preferred stock.
b. Deferred Royalty. The Company shall pay Deferred Royalty
payments to the Inventors, as earned, during the Term of this Agreement, on
the following basis:
i. Commencing on January 1, 2009, and for each calendar year
thereafter, each Inventor shall be entitled to, and the Company shall pay, a
royalty equally to 1 percent of the gross revenues derived by the Company
from the sale, marketing, licensing, joint ventures, or manufacture of the
Technology in the Territory for the calendar year, but not less than Fifty
Thousand Dollars ($50,000.00) per inventor annually
ii. If the Company is not able to tender the full amount of the
Deferred Royalty in any year, then the Inventors, at their sole election, may
each accept payment in common stock of the Company at a per share price equal
to seventy-five percent (75%) of the trailing 30 day average final trade
price of the Company?s common stock on the principal market on which the
common shares are then admitted for trading
iii. Commencing on January 1, 2009, and for each year thereafter
during the term of this Agreement, the Company shall execute and deliver to
each Inventor a warrant to purchase fifty thousand (50,000) shares of the
common stock of the Company. Each warrant shall have a term of five (5)
years from the date of issue, and shall be exercisable at the rate of Thirty
Cents ($0.30) per share.
iv. The annual royalty shall be determined and agreed to by the
parties on or before February 15 of the year following the year to which
applicable, and shall be paid, along with the common stock referenced in
Paragraph 3.b.ii hereof and the warrants referenced in Paragraph 3.b.iii
hereof, on or before March 15 of the year following the year to which
applicable.
v. The Company agrees to assume all responsibility for the payment
of any taxes which may become due for the issuance under Section 3.b.ii of the
preferred stock certificates to the Inventors
4. RECORDKEEPING AND INSPECTION RIGHTS: The Company shall at all
times maintain records that comply with generally accepted accounting
practices, and which reflect all income pertaining to the Technology, whether
directly or indirectly derived by the Company. Such records shall be available
to the Inventors for inspection by the Inventors or their representatives at
the offices of the Company upon ten (10) days prior written notice.
5. PATENT INFRINGEMENT: The Inventors and the Company shall each
promptly inform the other of any suspected infringement of any of the patents
rights by a third party. During the term of this Agreement, the Inventors and
the Company shall consult with the other regarding any suspected infringements
and throughout any litigation. The Company shall have the primary right, and
is expected, to file and control the prosecution of any suit seeking to enjoin
or recover damages from infringers of any patent included within the patent
rights, and prosecute to the fullest extent of the law. The Company shall be
solely responsible for any and all litigation expenses incurred in any
prosecution. To the extent the Company is financially incapable of prosecuting
the claim, the Inventors have the option to either fund the prosecution
or demand an assignment of the claim for enforcement purposes only, and the
Company shall agree to the assignment. Any funds expended by the Inventors for
such enforcement shall be added to the compensation of this Agreement as set
forth in Paragraph 3 of this Agreement.
6. INDEMNIFICATION: The Company acknowledges that third parties may
assert a claim or claims against the use of the Technology in the Territory by
the Company, and/or any revenues generated therefrom. The Company hereby
agrees to indemnify and hold harmless the Inventors and their successors and
assigns, from any claims by any third party for the Company?s use of the
Technology in the Territory, which indemnification shall include compensation
for lost revenue as a result of any such claim, and reimbursement for all
accountants' fees, attorneys' fees and expenses, and court costs incurred by
Inventors in defending against such claims, up through and including the
appellate level. Inventors agree that the Company may, at its election,
assume the full defense of any such claim and shall pay any and all of its own
legal expenses in doing so on its own behalf and on behalf of Inventors.
7. CONFIDENTIAL INFORMATION: The Parties agree that all information
contained in documents marked ?Confidential? which are exchanged by the
parties are to be received in strict confidence, used only for the purposes of
this Agreement, and not disclosed by the recipient party, its agents or
employees without the prior written consent of the other party, unless such
information (i) was in the public domain at the time of disclosure, (ii) later
became part of the public domain through no act or omission of the recipient
party, its employees, agents, successors, or assigns, (iii) was lawfully
disclosed to the recipient party by a third party having the right to disclose
it, or (iv) was already known by the recipient at the time of disclosure. Each
party's obligation of confidentiality shall be fulfilled with the same degree
of care as it uses to protect its own confidential information. This obligation
exists during this Agreement and for five (5) years thereafter. Nothing
contained herein shall prevent the Company from disclosing information to the
extent such information is required to be disclosed (i) in connection with the
securing of necessary governmental authorization for the Company regarding the
manufacture, use or sale of the Invention, (ii) for the purpose of the
Company?s compliance with governmental regulations, (iii) for the purpose of
sublicensing or distribution and sale, or (iv) in connection with the
development, manufacture, use or sale of the Technology.
8. DEFAULT: In the event the Company fails to make a payment as
specified herein, or fails to provide financial information as provided herein,
or otherwise fails to comply with this Agreement, the Company shall be
considered in Default. The Inventors shall notify the Company in writing of
the Default (?Default Notice?). Upon receipt of the Default Notice, the
Company shall have thirty (30) days from the date of the notice to correct the
Default, which must include interest at a rate of 1.5% per month for any
amount in arrears. In the event the Default is corrected this Agreement shall
continue in full force and effect. In the event the Company fails to correct
the Default, the Inventors shall, without any further notification to the
Company, be free to pursue their legal options in the collection of any monies
due under the terms of this Agreement, and all rights to the Technology
granted to the Company under this Agreement will automatically revert to the
Inventors without notice or obligation.
9. TERMINATION OF THE AGREEMENT: Notwithstanding anything herein
contained to the contrary, this Agreement shall be terminated and all rights
and obligations hereunder shall cease, which termination shall be treated as a
Default, upon the happening of any of the following events:
(a) adjudication of the Company as bankrupt;
(b) the execution by the Company of an assignment for the
benefit of any creditors;
(c) the appointment of a receiver for the Company;
(d) the bulk sale of the assets of the Company;
(e) the sale of a controlling interest of shares of the Company;
(f) voluntary or involuntary dissolution of the Company; or
(g) the merger or consolidation of the Company with another
Company.
In the event this Agreement is terminated by the Company, this Agreement shall
cease and the Inventors shall, without any further notification to the Company,
be free to pursue its legal options in the collection of any monies due under
the terms of this Agreement, and all rights to the Technology given to the
Company will automatically revert back to the Inventors without notice or
obligation.
10. TECHNOLOGY DEVELOPMENT. The Company agrees that it will continue
to use and improve the Technology at its expense, including patent fees and
expenses. Any additions, enhancements, or modifications of the Technology
by the Company, or technologies derived from the Technology licensed
hereunder, shall be considered as part of the Technology and shall be
included in the License granted hereunder, provided that any modification,
enhancements or improvement made by the Company is not considered to be, and
subject to separate patent application for, a new technology or invention.
11 NOTICES: Any and all notices, offers, designations, consents,
acceptances or other communications provided for herein to be given by any
party to another party shall be personally delivered, sent by facsimile, sent
by overnight courier or delivery service, or mailed by certified or registered
United States mail, postage prepaid, addressed to the respective parties as
follows:
INVENTORS:
Xxxxxx Xxxxxxxxxxxx
0000 XX 00xx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
and
Xxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx Xxxxx Xxxxxx
Xxxxxx Xxxxx, Xxxxxxx 00000
With a copy to:
Xxxxxxx X. Xxxxxx, Esquire
Xxxxxx Law Firm, LLC
000 Xxxx Xxxxxxxx Xxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
COMPANY: Neptune Industries, Inc.
00000 Xx. Xxxxxxx Xxxx., #000
Xxxx Xxxxx, XX 00000
Facsimile: (000)-000-0000
With a copy to:
Xxxxxx Xxxxxx
CFO and Corporate Counsel
Neptune Industries, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0
Xxxxx, XX 00000
Facsimile: (000) 000-0000
12. BINDING EFFECT: This Agreement, and any amendments hereto made in
accordance herewith, shall be binding upon the parties hereto, their heirs,
next of kin, executors, administrators, personal representatives, legal
representatives, assignees and creditors, including receivers and all holders
or possessors, or purported holders or possessors, of any of the stock of the
Company, including without limitation, assignees, transferees, pledgees,
mortgagees, holders of security interest in and liens upon said stock, donees
and trustees (voting and other) and all other persons with notice or
knowledge of this Agreement, whether such notice is constructive or actual.
13. ARBITRATION: Any dispute, controversy, difference or claim
arising between the Parties out of, relating to or in connection with this
Agreement, shall be resolved through binding arbitration under the commercial
arbitration rules of the American Arbitration Association, and shall be held in
Palm Beach County, Florida. The prevailing party in any dispute, controversy,
difference or claim arising between the parties out of, relating to or in
connection with this Agreement shall be entitled to reimbursement for the
reasonable costs and expenses of arbitration, including reasonable attorney
fees and costs. All parties waive the right to a trial by jury.
14. COUNTERPARTS: This Agreement may be executed in any number of
counterparts, and each such counterpart will for all purposes be deemed an
original instrument, but all such counterparts together will constitute but one
and the same agreement. A facsimile copy of this Agreement and any signatures
thereon, shall be considered, for all purposes, as originals.
14. AUTHORITY: The parties hereto represent that they have the
authority to enter into this Agreement.
16. SELECTIVE ENFORCEMENT: The Parties agree that the failure of any
party to enforce or exercise any right, condition, term or provision of this
Agreement shall not be construed as or deemed to be a waiver or relinquishment
thereof, and the same shall continue in full force and effect.
17. SEVERABILITY: The language of all parts of this Agreement shall
in all cases be construe as a whole, according to its fair meaning, and not
strictly for or against any of the Parties. This Agreement has been negotiated
by and between the Parties, and shall not be construed against the drafter of
the Agreement. If any portion or provision of this Agreement (including,
without implication of limitation, any portion or provision of any section of
this Agreement) is legally determined to be unenforceable, the remainder of
this Agreement shall not be affected by such determination and shall be valid
and enforceable to the fullest extent permitted by law, and said unenforceable
portion or provision shall be deemed not to be a part of this Agreement.
18. ENTIRE AGREEMENT: This Agreement contains the entire agreement
between the parties and supersedes any and all prior understandings,
agreement or correspondence between the Parties. No amendment or
modification shall be valid or binding upon the parties unless made in writing
and signed by both parties. None of the terms, covenants, and conditions of
this Agreement can be waived except by the written consent of the party
waiving compliance.
18. TITLES AND CAPTIONS: The titles and captions of the paragraphs of
this Agreement are inserted only as a matter of convenience and for reference,
and in no way define, limit or describe the scope of this Agreement or the
intent of any provision hereof.
20. APPLICABLE LAW: This Agreement shall be construed, interpreted and
applied according to the law of the State of Florida as such laws are applied
to contracts entered into and to be performed solely within the State of
Florida.
Dated this _3rd day of July, 2008.
By: __________________________________
Xxxxxx X. Xxxxxx
By: __________________________________
Xxxxxx X. Xxxxxxxxxxxx
NEPTUNE INDUSTRIES, INC.
By: __________________________
Print: __________________________
Its: __________________________
