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EXHIBIT 10.2
ENTERPRISE VENTURE AGREEMENT
This Enterprise Venture Agreement [hereinafter "Agreement" or "EVA"] is
entered into by (1) Xxxx Xxxxxxx, and any group of entities, associates, or
partners he may designate ["Xxxxxxx"] and (2) Ruby Mining Company, d/b/a
Admiralty Corporation ["Admiralty"] and Nova Marine Explorations, Inc. ["Nova
Marine Explorations"], collectively to be referred to as the Joint Venturers
under this EVA, it being understood that the Joint Venturers may collectively
agree to assign their rights under this EVA to other entities, associates or
partners. Xxxxxxx and the Joint Venturers shall be hereinafter referred to as
"the Parties," and they will form the "Enterprise" under this EVA for the
purposes of managing the exploration and recovery of valuable shipwrecks and
cargoes and other underwater cultural heritage ("property") at a number of
sites, such exploration and recovery to be referred to in this EVA as "the
Project".
1. XXXXXXX'X DUTIES UNDER THE EVA. Upon execution of this EVA, Xxxxxxx
shall immediately disclose to the Joint Venturers the coordinates, locations,
and dispositions of four (4) shipwreck sites, as well as any and all archival,
exploration, operational or survey data about the sites, the shipwrecks
concerned, and their cargoes, that are in Xxxxxxx'x possession or knowledge, or
shall subsequently come into Xxxxxxx'x possession or knowledge. The four
shipwreck sites shall be respectively referred to as "Project Green," "Project
Red," "Project White," and "Project Yellow." The Parties have correlated the
particular sites with the above-mentioned color-coded designations, consistent
with the representations that Xxxxxxx has made to the Joint Venturers, such
representations being relied upon by the Joint Venturers in making this EVA.
Xxxxxxx'x disclosures under this paragraph will be made to the Joint Venturers
and their officers and employees and agents under confidentiality terms and
conditions agreeable to both parties.
2. RECITALS AND REPRESENTATIONS. Xxxxxxx makes the following warranties and
representations concerning the four shipwrecks referred to in paragraph (1):
A. The wrecks referred to are situated in locations not subject to the
sovereignty of a state of the United States, the federal government of the
United States, or of a foreign sovereign, or in an area in which shipwreck
recovery operations are restricted or regulated by operation of law.
B. The wrecks referred to are amenable to an admiralty arrest brought by
the Joint Venturers in the courts of the United States, for purposes of
establishing a legal entitlement to the wreck sites.
C. The wrecks referred to are not presently subject to a claim of title or
right by another party (including any original owner or underwriter of such
vessels), and Xxxxxxx agrees to fully indemnify and hold harmless the Joint
Venturers for any and all costs and liabilities arising from any challenge made
by any third-party to any ownership rights and/or salvor-in-possession rights
that the Enterprise may claim in the wrecks or wreck sites.
Xxxxxxx specifically and explicitly disavows any representation or warranty
as to the value of the wrecks or wreck sites referred to in paragraph (1), nor
concerning the period of provenance of the wrecks, or even if they are actually
shipwreck sites at all.
3. JOINT VENTURER'S DUTIES UNDER THE EVA. Joint Venturers agree to use
their best efforts, consistent with their sound business judgment, to pursue
this Project. This shall include the arrangement of all Project financing and
administration, the provision of vessel platforms, personnel, and equipment for
the exploration and recovery of property at the sites, along with its proper
stabilization, conservation, curation, storage, security, appraisal, and
marketing. Joint Venturers agree to host one (1) observer designated by Xxxxxxx
on board any vessels engaged in operations at the sites, providing for that
observer's transportation to and from the sites on regularly-scheduled re-supply
voyages only, and bunk and board (such expenses to be treated as a net expenses
under Paragraph 6). Joint Venturers also agree to give access to observers
accredited by Xxxxxxx at any location or facility used and maintained by Joint
Venturers for the stabilization, conservation, curation, storage, appraisal, and
marketing of property recovered from the sites.
4. DOREING'S ADDITIONAL DUTIES UNDER THE EVA AS PROJECT CONSULTANT.
Xxxxxxx agrees to use his best efforts to pursue this Project, and agrees not to
engage in any conduct that would be prejudicial to the best interests of the
Enterprise, including (but not limited to) the unauthorized disclosure of
privileged or proprietary information or data about the Enterprise to third
parties, or engaging in any competition or interference with the Enterprise. In
consideration of these efforts, Xxxx Xxxxxxx will receive $2,000.00 per week for
personal services as a consultant as long as any of the four projects are being
actively worked. (For purposes of this provision, work of at least 10 hours a
week will be considered sufficient to entitle payment to Xxxxxxx of a weekly
consulting fee.) Project planning efforts (such as research and survey
activities) will be deemed part of the direct project work. If periods of
inactivity should occur (due to weather, lack of funding, or other reasons), and
such delays causes a work stoppage or there are other reasons that work on this
project is not occurring, the weekly consulting fee under this paragraph shall
not accrue. In no event shall this fee exceed $104,000.00 per annum. For
purposes of this Paragraph, Xxxxxxx shall be an independent contractor and not
an employee or agent of the Enterprise, the Joint Venturers, or Admiralty or
NovaRay. Any fees disbursed to Xxxxxxx under this paragraph shall be considered
direct project costs, within the meaning of Paragraph 6. These fees shall be
payable as the project is funded and shall be paid proportionally with other
direct project costs. Reasonable travel expenses may be recovered as costs by
Xxxxxxx for travel requested of, and approved in advance by, the Joint
Venturers.
5. DIVISION OF PROPERTY. For the purposes of this EVA, each of the four
shipwreck sites referred to in Paragraph (1) shall be the subject of separate
accounting. The net proceeds of any property (as defined in the following
sections) recovered from each of the sites, pursuant to the Project, will be
split among the Parties, according to the following formulas.
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A. For the wrecks designated as "White" and "Yellow": Xxxxxxx - 30%; Joint
Venturers - 70% for all net proceeds for each site up to $25,000,000. For net
proceeds in excess of $25 million, the Joint Venturers will receive all
proceeds, and Xxxxxxx shall receive none.
B. For the wrecks designated as "Green" and "Red": Xxxxxxx - 30%; Joint
Venturers - 70% for all net proceeds for each site up to $25,000,000. For net
proceeds in excess of $25 million: Xxxxxxx - 6%; Joint Venturers - 94%.
C. Until such time as commercial recovery begins on a particular site
(commercial recovery being defined as the removal of any item or artifact having
a fair market value in excess of $100, and expressly not including any items
removed for the purposes of effectuating an admiralty arrest or any similar
judicial procedure for a site), Joint Venturers in their sole, absolute and
unilateral discretion may elect to transfer to themselves portions of Xxxxxxx'x
percentage share, at increments of one (1) percentage point, at a rate of
$20,000.00, immediately payable to Xxxxxxx, for each percentage point for any
site so elected. Under no circumstances may more than ten (10) points per site
be the subject of such a buy-down or transfer election. After commercial
recovery begins for a particular site, any proposed buy-down of Xxxxxxx'x share
shall require Xxxxxxx'x express and written approval.
6. DEFINITION OF NET PROCEEDS.
Sub-Section A. It is the intention of the Parties that the division of
property recovered from each site, pursuant to this Project, will be net of
expenses. Only those expenses directly attributable to the Project's operations
will be deducted from gross proceeds. Among the categories of legitimate
expenses to be deducted from gross proceeds are the following:
(a) vessel operation expenses while a vessel is on station or traveling to
and from the sites (including depreciation, chartering (if applicable), fuel,
food, insurance, crew and xxxxxxx expenses, the costs of hosting Xxxxxxx'x
observers (as per Paragraph 3 above), as well as any repairs or equipment
replacement attributable to activities undertaken for the Project);
(b) salaries, compensation, benefits and expenses of Project consultants,
which shall include only archaeologists, attorneys, conservators, appraisers,
marketers, and similar professionals or vendors. The hiring of Project
consultants shall be at the initiative of the Joint Venturers, with the consent
of Xxxxxxx, such consent not to be unreasonably withheld. For purposes of this
provision it is agreed by the Parties that Mr. Xxx Xxxxxxxx (if willing and
able) shall provide archaeological consulting services for the Project, and that
Xx. Xxxxx X. Xxxxxxxx (acting as Admiralty's counsel) shall provide legal
services for the Project and Enterprise. It is specifically contemplated by the
Parties that the salaries, compensation, benefits and expenses of the corporate
directors, officers, and principals of Joint Venturers will not be subject to
treatment as a net expenses under this EVA;
(c) all expenses related to the transport (including dockage, clearance and
customs fees (if applicable), stabilization, conservation, curation, storage,
appraisal, security, insurance, and marketing of property recovered from the
sites.
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Those expenses not designated as net expenses shall be borne exclusively by the
Party which incurs them.
Sub-Section B - The Parties, may by mutual written agreement,
supplement or modify this list of permissible net expenses, or designate or
disqualify certain expenses as net expenses.
Sub-Section C - Each Party agrees to ledger and document all expenses
to be treated as net expenses under this provision, and allow the examination,
accounting and audit of such expenses by the other Party, on demand within
thirty (30) days of the presentation of the expense for deduction. If no demand
is made within the prescribed period, the expense will be treated as a net
expense.
7. VALUATION OF PROPERTY.
Sub-Section A. All property recovered from the Project sites will be
subject to appraisal as individual items or lots. No item may be marketed or
offered for sale to the public unless ninety (90) days have elapsed from the
establishment of a final valuation.
Sub-Section B. Joint Venturers will be responsible for the provision
of at least two (2) appraisals for such property, such appraisals to be
performed by recognized specialists or experts for the type of property being
appraised. In the event that the two appraisals yield a valuation of an item (or
lot of items) that is less than 50% of variance in value, the higher appraisal
will control and be the final valuation. In the event that the two appraisals
yield a valuation of an item (or lot of items) that is more than 50% of variance
in value, the average appraisal will control and be the final valuation. Xxxxxxx
may, at his election, seek a third appraisal for an item (or lot of items), at
its own expense and not subject to treatment as a net expense under Paragraph 6
of this EVA, if it so requests within thirty (30) days of receiving a valuation
from Joint Venturers for a particular item (or lot of items). If a third
appraisal is sought, the final valuation of an item (or lot of items) shall be
average of all three appraisals, according to the following formula:
((appraisal 1 + appraisal 2) / 2) + appraisal 3
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and such will be the final valuation.
8. INTER-PARTY TRANSFERS OF PROPERTY.
Sub-Section A. Within sixty (60) days of the establishment of a final
valuation of an item (or lot of items), either Party may request to take title
to the item (or lot of items), before
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such are offered for sale to the public, by paying to the other Party that
Party's percentage share of net proceeds (as calculated under Paragraph 5) of
the final valuation price. Alternatively, the purchasing Party may elect to make
an offset of net expenses already incurred (but not yet reimbursed) by the
purchasing Party. In the event that both Parties desire to purchase an item (or
lot of items) at the final valuation price, the purchasing Party will be
determined by a flip of the coin or other mutually agreed to method.
Sub-Section B. By mutual written agreement of the Parties, a Party may
seek to borrow against its share of proceeds under this EVA.
9. SETTLEMENT OF ACCOUNTS. Within sixty (60) days of the sale of an item (or lot
of items) to the public, the division of proceeds (under Paragraph 5 above) will
be made, after any necessary deductions for unreimbursed net expenses. Before
such settlement, the proceeds of public sales shall be placed in an escrow
account for the benefit of "XXXXXXX/ADMIRALTY/NOVARAY EVA."
10. INTANGIBLE AND INTELLECTUAL PROPERTY. The above sections 5-9 govern the
disposition of tangible property recovered from the sites, pursuant to the
Project. Any intangible and intellectual property including, but not limited to
(a) writings (such as books, catalogues, pamphlets and brochures);
images (such as photographs, videos, films, prints, posters, postcards, website
images (including thumbnail images for on-line indexes)); movie, television,
video and media rights; all of these to include print, digital, or other
mechanical means or any other media now known or later developed;
(b) rights of publicity and rights of privacy;
(c) any and all derivative works associated with the Project;
(d) the marketing of any souvenir items associated with the Project;
and
(e) any or all rights in copyright or trademarks associated with the
Project,
shall be the property of the Enterprise. The Joint Venturers (at their sole
discretion) shall develop and market such intangible and intellectual property
rights in the Project, the net proceeds of which shall be split according to the
following formula: Xxxxxxx - 30%; Joint Venturers - 70%.
11. PROPRIETARY TECHNOLOGIES. The Joint Venturers stipulate, and Xxxxxxx agrees,
that in discharging their duties under this EVA, Joint Venturers will be
employing proprietary technologies and trade secrets in the search for,
recovery, and conservation of property from the sites, pursuant to the Project.
Under no circumstances will this EVA be construed as granting a license to
Xxxxxxx, transferring to Xxxxxxx, or giving access to Xxxxxxx for these
proprietary technologies and trade secrets. The Joint Venturers may take all
measures necessary to exclude Xxxxxxx'x officers, employees, agents, vendors and
contractors from access to these proprietary technologies and trade secrets. In
the event that Joint Venturers decide to grant such access (at
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their sole discretion), such access may be conditioned under confidentiality
terms and conditions to be stipulated by the Joint Venturers. By virtue of the
provisions of Paragraph 4, any contributions made by Xxxxxxx to the proprietary
technologies or trade secrets employed by the Joint Venturers will be deemed a
work-for-hire, and Xxxxxxx shall have no claim to them.
12. EVA GOVERNANCE. As stipulated in Paragraphs 1, 3 and 4 above, Xxxxxxx and
the Joint Venturers will fully cooperate in the successful pursuance of the
Project. As indicated in those sections, the Joint Venturers have the primary
financing and operational role for all aspects of the Project, but they hereby
recognize and affirm their duty to regularly inform and consult with Xxxxxxx on
all aspects of the Project. At any time, Xxxxxxx may request a consultation with
Joint Venturers on the operational aspects of the Project, or to request from
the Joint Venturers a full accounting of Projects funds, finances, and expenses.
13. PROJECT PHASES. The initial term of this EVA shall be twelve (12) months.
If, at the conclusion of twelve months, no significant find of property at any
of the sites has been made, the XXX xxx be terminated by either Party at their
sole discretion. If a significant find of property at the sites has been made by
the conclusion of the twelve-month initial term, the EVA will be deemed to be
extended for a further term of two (2) years. At the conclusion of that two year
period, the EVA will be extended for further two year terms, unless the Parties
mutually agree to terminate the EVA.
14. DISPUTE SETTLEMENT PROVISIONS.
Sub-Section A. Should any dispute arise out of this EVA (other than in
regard to Paragraphs 10 and 11), the matter in dispute shall be referred to
three persons for arbitration at New York City, one to be appointed by each of
the parties hereto, and the third by the two so chosen; their decision or that
of any two of them shall be final, and for the purpose of enforcing any award,
this agreement may be made a rule of any court in the United States. This EVA
shall be governed by the federal maritime law of the United States of America,
and shall be construed as a contract for salvage and/or co-salvage. Any
arbitration proceedings contemplated under this sub-section shall be conducted
in accordance with the Rules of the Society of Maritime Arbitrators, Inc. The
arbitrators shall be members of the Society of Maritime Arbitrators, Inc.
Sub-Section B. Should any controversy, claim or dispute arise out of
the Parties' performance or lack of performance of their obligations under
Paragraphs 10 and 11 of this EVA, the matter in dispute shall be referred to
three persons for arbitration at New York City, one to be appointed by each of
the parties hereto, and the third by the two so chosen; their decision or that
of any two of them shall be final. Sections 10 and 11 of the EVA shall be
governed by the laws of New York. Any arbitration proceedings contemplated under
this sub-section shall be administered by the American Arbitration Association
under its Commercial Arbitration Rules, and judgment on the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.
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15. AGREEMENT AMENDMENTS AND NOTIFICATIONS. This EVA reflects the full agreement
of the Parties. The XXX xxx be amended by the written, mutual agreement of all
the Parties. Any notifications required under this EVA shall be made in writing,
transmitted by courier, post or facsimile to the contact addresses indicated
below (or as they may be changed from time to time by subsequent notification).
/s/ G. Xxxxxx Xxxxxxxxxxx /s/ Xxxx Xxxxxxx
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For Admiralty Corporation For Xxxx Xxxxxxx
G. Xxxxxx Xxxxxxxxxxx Xxxx Xxxxxxx
0000 Xxxxxxxx Xxxx, Xxxxx 000 PO Box 542031
Atlanta, GA 30157 Xxxxxxx Xxxxxx, Xxxxxxx 00000
/s/ Xxxxx Xxxxxxx
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For Nova Marine Explorations
Xxxxx Xxxxxxx
00000 XX 000xx Xxxxx, Xxxxxxx X
Xxxxxxxx, Xxxxxxxxxx 00000-0000
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