AGREEMENT
This Agreement (the "Agreement") is entered into and is effective as of the 1st
day of October, 1996, by and between Westbridge Research Group, a California
corporation (the "Company") and Westbridge Biosystems Limited, a limited
partnership organized under the laws of the State of California (the
"Partnership") with reference to the following facts:
A. The Company and the Partnership have entered into that certain Research and
Development Agreement, dated as of December 31, 1982 (the "R&D Agreement");
the Company and the Partnership have entered into that certain Technology
Transfer Agreement, dated as of December 31, 1982 (the "Technology Transfer
Agreement"); and the Company and the Partnership have entered into that
certain License Agreement, dated as of October 17, 1995 (the "License
Agreement").
B. Pursuant to the R&D Agreement, the Partnership retained the Company to
perform certain research and development activities and, in that regard and
as partial payment therefor, delivered to the Company its 12-year
promissory note (the "R&D Note").
C. The R&D Note was amended in 1991 to provide that, following its due date,
the Company would not foreclose upon the assets of the Partnership securing
the R&D Note but would instead rely only upon 95% of royalty payments made
by the Company to the Partnership pursuant to the Technology Transfer
Agreement for repayment of the R&D Note.
D. As of the date of this Agreement, $195,941.73 of principal indebtedness and
$9,980,482 of accrued interest remained due and payable under the R&D Note.
E. As of the date of this Agreement, the Company owed the Partnership
$52,128.78 in unpaid royalties (the "Accrued Royalty Obligation").
F. The Company and the Partnership now wish to change their relationship to
change the amount of the royalty payable by the Company to the Partnership
under the License Agreement and to extend the period during which that
royalty is due, to provide for the forgiveness of the Accrued Royalty
Obligation and all amounts remaining due and payable under the R&D Note,
and to provide for an option on the part of the Company to purchase the
technology which is the subject of the License Agreement (the
"Technology").
NOW, THEREFORE, in consideration of their respective promises contained in this
Agreement, the Partnership and the Company hereby agree as follows:
1. Amendment of License Agreement. As of the date of this Agreement, the
License Agreement is amended to provide as follows:
a. Section 3.1 of the License Agreement is amended to read in full as
follows:
3.1 Calculation of Royalty. Licensee shall pay Licensor royalties
equal to $1,000 per month plus 2-1/2% of Gross Sales for the
balance of the term of this License.
b. Section 3.2 of the License Agreement is amended to read in full as
follows:
3.2 Payment of Royalty. Royalties earned with respect to a month
shall be due and payable on the last business day of the
immediately following month. Royalty payments shall be
accompanied by a written report showing the Products sold or
otherwise disposed of by Licensee or its Affiliates during the
month covered by the report and, as to each Product (i) its
product number, name, or other description, (ii) Gross Sales,
(iii) the total number sold, (iv) the selling price, (v) the
amount of returns and allowances as deductions against Gross
Sales, and (vi) the Royalty due. If a royalty payment is not made
within fifteen business days of its due date, then Licensee shall
also pay a late fee equal to three percent (3%) of the amount due
and interest on such amount until paid at a simple annual rate of
ten percent (10%).
c. Section 5 of the License Agreement is hereby amended to provide that
the term of the License Agreement shall automatically expire, and
ownership of the technology which is the subject of the License
Agreement automatically transfer to Licensee, on December 31, 2006, or
upon the acquisition of the Technology pursuant to Section 6 below,
whichever shall first occur.
2. Cancellation of R&D Note. Effective as of the date of this Agreement, the
R&D Note is cancelled and all amounts of principal and interest remaining
due and payable thereunder are forgiven.
3. Amendment of Technology Transfer Agreement. Effective as of the date of
this Agreement, Sections 3.1 and 3.2 of the Technology Transfer Agreement
are amended to read in full as follows:
3.1 Subject to paragraph 3.3 below, COMPANY shall pay to PARTNERSHIP
royalties equal to $1,000 per month plus 2-1/2% of Gross Sales.
3.2 Royalties on applicable Gross Sales calculated pursuant to paragraph
3.1 above shall be due and payable to PARTNERSHIP as to a calendar
month on the last business day of the immediately following month.
Concurrent with this payment, COMPANY shall provide PARTNERSHIP with a
written report as to the Product(s) covered under this Agreement as
defined in paragraph 4.2 hereof. Such report shall be certified by an
officer or authorized agent of COMPANY, and shall specify total
applicable Gross Sales for the calendar month, the total number of
Products sold or otherwise disposed of by COMPANY and its subsidiaries
and affiliates during that month, the model number or other
description of such Product(s), the selling price therefor, the amount
of returns and allowances as a deduction against such sales, and the
net royalty on applicable Gross Sales payable to PARTNERSHIP with
respect to such sales; and COMPANY shall tender to PARTNERSHIP the
royalty payment then due. If a royalty payment is not made within
fifteen business days of its due date, then COMPANY shall also pay a
late fee equal to three percent (3%) of the amount due and interest on
such amount until paid at a simple annual rate of ten percent (10%).
4. Payment of Accrued Obligation. The Accrued Royalty Obligation shall be
forgiven as of the date of this Agreement.
5. Reaffirmation of Agreements. Except as provided above, the Technology
Transfer Agreement and License Agreement shall remain in full force and
effect.
6. Option to Purchase Technology. The Partnership hereby grants to the Company
an option to purchase the Technology. The term of the option shall be ten
years, expiring on July 31, 2006. The exercise price of the option shall
initially be $180,000 and shall decline by $20,000 on each annual
anniversary date hereof. Once the option is exercised, ownership of the
technology which is the subject of the License Agreement shall
automatically transfer to the Company and the Royalty obligation of the
Company shall terminate.
7. Miscellaneous.
a. Parties Not Partners. Nothing contained in this Agreement shall be
construed so as to make the parties hereto partners or joint venturers
or to permit either party to bind the other party to any agreement or
purport to act on behalf of the other party in any respect.
b. Waiver. No waiver or modification of any of the terms of this
Agreement shall be valid unless in writing, signed by both parties.
Failure by either party to enforce any rights under this Agreement
shall not be construed as a waiver of such rights, and a waiver by
either party of a default hereunder is one or more instances shall not
be construed as constituting a continuing waiver or as a waiver in
other instances.
c. Partial Invalidity. If any term of provision of this Agreement shall
for any reason be held to be invalid, such invalidity shall not affect
any other term or provision hereof, and this Agreement shall be
interpreted and construed as if such term or provision had never been
contained herein.
d. Section Headings. The section headings of this Agreement are inserted
only for convenience and shall not be construed as part of this
Agreement.
e. Entire Agreement. This Agreement compromises the entire understanding
of the parties with respect to the subject matter herein contained and
supersedes all prior negotiations and agreements between the parties
concerning the subject matter hereof.
f. Choice of Law. This Agreement shall be construed and governed in
accordance with the laws of the State of California, regardless of the
place or places of its physical execution and performance.
g. Recovery of Litigation Costs. If any legal action or any arbitration
or other proceeding is brought for the enforcement of this Agreement,
or because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions of this
Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be
entitled.
h. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been
duly given on the date of service if served personally on the party to
whom notice is to be given, or on the third day after mailing if
mailed to the party to whom notice is to be given, by United States
Postal Service first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
To Partnership at: Westbridge Biosystems Limited,
a California Limited Partnership
c/o Xxxx Xxxxxx
Polaris Pool Systems, Inc.
X.X. Xxx 0000
Xxx Xxxxx, XX 00000-0000
To Company at: Westbridge Research Group,
a California corporation
0000 Xxxxxx Xxx
Xxxxx, XX 00000
Any party may change its address for purposes of this Agreement by
giving the other party written notice of the new address in the manner
set forth above.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
PARTNERSHIP: COMPANY:
Westbridge Biosystems Limited Westbridge Research Group
By: Agricado Partners, Inc.,
General Partner
By: /s/Xxxx Xxxxxx By: /s/Xxxx Xxxxxxxxx
Xxxx Xxxxxx, President Xxxx Xxxxxxxxx, President
