DEVELOPMENT AND ROYALTY AGREEMENT
This
DEVELOPMENT AND ROYALTY AGREEMENT (“Agreement”)
is
made as of June __, 2008 (the “Effective
Date”)
by and
among QPC LASERS, INC., a Nevada corporation (“QPC”),
QUINTESSENCE PHOTONICS CORPORATION, a Delaware corporation and wholly-owned
subsidiary of QPC (“Quintessence”),
and,
a [REDACTED]1
(“Customer”)
(each
a “Party”
and
collectively, the “Parties”).
RECITALS
WHEREAS:
QPC
and
its wholly-owned subsidiary, Quintessence, are engaged in the business of
designing and manufacturing lasers in the visible light range for use in the
projection and display business.
Customer
is seeking to buy such products and to benefit from the commercialization of
such products for applications in three dimensional projection and display.
Customer is prepared to fund a portion of the development costs of such products
in return for certain purchase rights and royalty rights as set forth in this
Agreement.
NOW,
THEREFORE, in consideration of the mutual terms and conditions contained herein,
the sufficiency and adequacy of which is hereby acknowledged, the Parties agree
as follows:
AGREEMENT
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1.
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DEFINITIONS
AND INTERPRETATION
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1.1 Definitions.
As used
in this Agreement, the following terms shall have the meanings set forth or
as
referenced below:
“Affiliate”
means,
with respect to any specified Person, any other Person which directly or
indirectly controls, is controlled by, or is under common control with such
Person, but only for so long as such control continues to exist. For the
purposes of this definition, “control” (including the terms “controlled by” and
“under common control with”), with respect to the relationship between or among
two or more Persons, shall mean the possession, directly or indirectly, of
the
power to direct or cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, by agreement or
otherwise.
“Agreement”
has
the
meaning set forth in the preamble.
“Confidential
Information”
has
the
meaning set forth in Section 10.2.
1 NOTE: The Company has requested confidential treatment for the redacted information. A complete copy of this Agreement has been filed separately with the Securities and Exchange Commission.
“Customer
Products”
has
the
meaning set forth in Section 3.2 below.
“Effective
Date”
has
the
meaning set forth in the preamble.
“Field”
means
the use of Products for display/projection applications in connection with
the
display and projection business. For the avoidance of doubt, the Field expressly
excludes the use of Products or infrared lasers in connection with medical
equipment or other medical applications or any military or industrial
applications.
“Licensed
IP”
means
the intellectual property rights of QPC set forth in Exhibit C relating to
the
Products.
"Net
Revenues”
means
the gross revenues actually received by QPC or Quintessence for sales of
Products in the Field within the Territory, but not including separately stated
charges for (a) sales to Customer, (b) sales and use taxes, excise taxes,
customs duties and other similar taxes; (c) shipping and insurance charges;
and (d) the amount of any bad debts, refunds and credits, but only to the
extent that such bad debts, refunds and credits are actually recognized against
such gross revenues.
“Royalty
Term”
means
the period commencing on the Effective Date and ending on the earlier of the
fifth anniversary thereof or the date in which this Agreement has been
terminated.
“Party”
and
“Parties”
have
the meaning set forth in the preamble.
“Person”
means
an individual, corporation, partnership, limited liability company, association,
trust or other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Products"
means
laser chips and modules intended for use as a light source for laser projection
display, products and systems.
"Territory"
means
worldwide.
“Third
Party”
means
any Person other than QPC, QPC’s Affiliates, Customer, and Customer’s
Affiliates.
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2.
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DEVELOPMENT
PAYMENT
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In
consideration for the purchase rights set forth in Article 3 of this Agreement,
the royalty rights set forth in Article 4 of this Agreement and the right of
participation set forth in Section 6.3 of this Agreement, Customer will make
a
development payment in accordance with the terms set forth in Exhibit A (the
“Development
Payment”).
The
Development Payment shall be used to fund the development of the Products.
QPC
shall have full control over the engineering and development process. Customer
shall have no right to a refund of the Development Payment unless QPC notifies
Customer that it is abandoning development of the Products.
2
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3.
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PURCHASE
RIGHTS
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3.1 Purchase
Rights.
In
partial consideration for payment of the Development Payment set forth in
Article 2, so long as Customer is not in material breach of this Agreement,
during the Royalty Term, QPC hereby agrees to grant Customer the right to
purchase units of Products directly from QPC at a price that is no less
favorable to Customer than the price offered by QPC to any Third Party for
similar quantities
3.2 Purchase
Terms and License.
QPC
hereby grants to Customer a non-exclusive, non-transferable, non-sublicensable
right and license to incorporate Products purchased from QPC as provided
hereunder into Customer's own products (the resulting product a "Customer
Product")
and to
sell, have sold, distribute, have distributed, market and export such Customer
Products in the Territory (subject to the restrictions in Section 10.1). The
license granted in this Section 3.2: (a) is not sublicensable, but includes
the
right of Customer to have Third Parties carry out the express rights granted
herein on Customer's behalf; (b) does not include the right make, sell,
distribute, market or export Products on a stand-alone basis, or otherwise
exploit Products except as expressly authorized herein. Customer agrees that
it
will not use or otherwise exploit the Products in any manner except as expressly
permitted in this Agreement and shall not manufacture, market, sell or otherwise
distribute Customer Products in violation of any applicable laws, regulations
or
ordinances. Customer shall not alter or destroy any intellectual property
markings (including without limitation trademarks) on Products or their
packaging. Customer will indemnify, defend and hold harmless QPC, its
Affiliates, and its and their officers, directors, agents, employees, against
any claims, suits, losses, or damages (including reasonable attorneys' fees)
arising out of the incorporation of Products into Customer Products, and the
manufacture, sale, offering for sale, distribution or marketing of Customer
Products (including, without limitation, product liability claims).
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4.
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ROYALTY
PAYMENTS
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4.1 Royalty
Payments.
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(a)
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In
partial consideration for payment of the Development Payment set
forth in
Article 2, QPC shall pay Customer royalties on Net Revenues during
the
Royalty Term at the rates and subject to the terms and conditions
set
forth in Exhibit B and this Agreement (collectively, the “Royalty
Payments”).
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(b)
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Any
Royalty Payments due under this Agreement shall be payable solely
in the
form of shares of unregistered and restricted common stock of QPC
(the
“Common
Stock”).
For purposes of determining the number of shares of Common Stock
issuable
to Customer under this Article 4, the value of a share of Common
Stock
shall be fixed at $1.05 per share throughout the Royalty Term, subject
to
adjustments for stock dividends and splits as provided in Section
4.1(d)
below (as adjusted, the “Share
Price”).
The number of shares of Common Stock issuable to Customer shall be
determined by dividing the Royalty Payment amount due and payable
hereunder by the Share Price. QPC will not issue any fractional shares
under this Agreement. As to any fraction of a share that Customer
would
otherwise be entitled to receive as a Royalty Payment, QPC shall,
at its
election, either pay a cash adjustment in respect of such final fraction
in an amount equal to such fraction multiplied by the Share Price
or round
up to the next whole share.
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3
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(c)
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Any
shares of Common Stock issuable as Royalty Payments hereunder shall
be
issued to Customer on a quarterly basis in arrears on or prior to
the
thirtieth (30th)
day following the end of the quarter in which Royalty Payments, if
any,
are due and payable pursuant to this Article 4; provided, however,
that
the first issuance of Common Stock as Royalty Payments hereunder
shall not
be due until the thirtieth (30th)
day following the end of fourth quarter of 2008. Accompanying each
issuance of shares of Common Stock hereunder, QPC will provide Customer
a
royalty report specifying the number of units of the Products sold
by QPC
during the applicable royalty period, QPC’s Net Revenues of Products for
such period, and the royalties, if any, payable with respect to sales
of
the Product.
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(d)
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In
the event QPC should at any time after the Effective Date fix a record
date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock or the determination of holders of Common
Stock
entitled to receive a dividend or other distribution payable solely
in
additional shares of Common Stock without payment of any consideration
by
such holder for the additional shares of Common Stock, then, as of
such
record date (or the date of such dividend distribution, split or
subdivision if no record date is fixed), the Share Price shall be
appropriately decreased so that the number of shares of Common Stock
issuable for payment of the Royalty Payments shall be increased in
proportion to such increase of the aggregate of shares of Common
Stock
outstanding. If the number of shares of Common Stock outstanding
at any
time after the Effective Date is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date
of
such combination, the Share Price shall be appropriately increased
so that
the number of shares of Common Stock issuable for payment of the
Royalty
Payments shall be decreased in proportion to such decrease in outstanding
shares.
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4.2 Taxes.
QPC may
withhold from any royalty or other payment to Customer under this Agreement
any
taxes required to be withheld by QPC under the applicable laws of the United
States or any other country, state, territory or jurisdiction.
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5.
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PRODUCT
DEVELOPMENT
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5.1 Deliverable
Items.
QPC
shall deliver to Customer as of the Effective Date the following “Deliverable
Items”: (1) Demonstration in QPC’s facility of a single laser module which emits
400 mW of Blue light, 400 mW of Green light and and 600 mW Red light; (2)
Demonstration in QPC’s facility of three individual laser chips emitting 3 ▇▇▇▇▇
of Green light, 1 watt of Blue light and 6 ▇▇▇▇▇ of Red light and (3)
Preliminary design of a module which emits 6 ▇▇▇▇▇ of Green, 6 ▇▇▇▇▇ of Blue,
and 12 ▇▇▇▇▇ of Red light suitable for integrating into a three dimensional
projection system.
5.2 Use
of
the Product and Deliverable Items.
Customer
shall not make use of the Products or Deliverable Items (or any portion thereof)
except in strict compliance with the provisions of this Agreement. Customer
shall not use or exploit any of the intellectual property rights relating to
the
Product including, without limitation, the Deliverable Items and other
Confidential Information of QPC, in connection with the development, use,
manufacture, sale or other distribution of any product or material.
4
5.3 Ownership.
QPC and
Quintessence shall retain ownership of all intellectual property rights in
and
to the Products and the Deliverable Items (including without limitation all
rights under patent, copyright, trademark, and trade secrets), and nothing
in
this Agreement shall be construed to convey any intellectual property or other
rights in the Products or Deliverable Items to Customer except for the express
licenses set forth herein.
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6.
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ADDITIONAL
OBLIGATIONS, COVENANTS AND
AGREEMENTS
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6.1 Non-Compete
Covenant.
Without
the prior written consent of QPC, which consent may be withheld in its sole
discretion, Customer shall not, nor shall it allow any Affiliate or Third Party
acting on behalf of or for the benefit of Customer or any of its Affiliates
to,
commercialize or promote a product that could reasonably be expected to compete
with Products in the Territory during the Royalty Term.
6.2 Right
of Participation.
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(a)
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Subject
to the terms and conditions specified in this Section 6.2, in the
event
that QPC or Quintessence elects, in its sole discretion, to form
a
separate company to service and otherwise operate its laser display
and
projection business, then QPC or Quintessence, as applicable, hereby
grants to Customer a right of first offer (“Right
of First Offer”)
to purchase up to ten percent (10%) of the equity interest in the
separate
company (the
“Separate
Company”)
being offered upon its formation on terms and conditions that are
identical to those offered to other Third Party investors.
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(b)
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If
either QPC or Quintessence elects to form a Separate Company in accordance
with Section 6.2(a) above, it shall give Customer written notice
(the
“Offer
Notice”)
of its intention, describing the amount and type of securities of
the
Separate Company to be issued, and the price and terms upon which
QPC or
Quintessence proposes to issue the same. Customer shall have fifteen
(15)
days from the date of receipt of the Offer Notice to exercise Customer’s
Right of First Offer to purchase up to ten percent (10%) of the equity
interest in the Separate Company for the price and upon the terms
specified in the Offer Notice by delivering written notice (the
“Right
of First Offer Election Notice”)
to QPC or Quintessence, as applicable, and stating therein the quantity
of
equity interest in the Separate Company to be
purchased.
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(c)
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Settlement
for the purchase of equity interest in the Separate Company by Customer
pursuant to this Section 6.2 shall be made in cash within thirty (30)
days from the Customer’s deemed date of receipt of the Offer Notice;
provided,
however,
that such time period may be extended for purposes of obtaining necessary
governmental approvals or by mutual agreement between QPC or Quintessence,
on the one hand, and Customer, on the other. If Customer shall have
failed
to deliver to QPC or Quintessence, as applicable, its Right of First
Offer
Election Notice within the time periods described in this
Section 6.2, Customer shall be deemed to have waived its Right of
First Offer.
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5
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(d)
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Notwithstanding
the foregoing, either QPC or Quintessence, as applicable, may in
its sole
discretion terminate any proposed issuance of equity interest in
the
Separate Company in respect of which either one of them has given
the
Offer Notice, at any time prior to the consummation thereof. The
foregoing
provision shall apply even in the event that Customer shall have
exercised
its Rights of First Offer hereunder; provided, however, that no equity
interest in the Separate Company shall then have been
issued.
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7.
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REPRESENTATIONS
AND WARRANTIES
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7.1 Representations
and Warranties of QPC and Quintessence.
QPC and
Quintessence hereby represent and warrant that:
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(a)
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QPC
is a corporation duly organized, validly existing and in good standing
under the laws of the state of Nevada. QPC is duly qualified as a
foreign
corporation in all jurisdictions in which the failure to so qualify
would
have a material adverse effect on QPC and any subsidiaries taken
as a
whole. Quintessence is a corporation duly organized, validly existing
and
in good standing under the laws of the state of Delaware. Quintessence
is
duly qualified as a foreign corporation in all jurisdictions in which
the
failure to so qualify would have a material adverse effect on QPC
and any
subsidiaries taken as a whole.
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(b)
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This
Agreement and the transactions contemplated hereby have been duly
and
validly authorized by QPC and Quintessence and constitute a valid
and
binding agreement of QPC and Quintessence, enforceable in accordance
with
their respective terms, except to the extent that (i) enforcement
of each
of this Agreement may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar
laws
now or hereafter in effect relating to creditors’ rights generally, and
(ii) general principles of equity.
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(c)
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The
shares of Common Stock issuable under Article 4 hereof, when issued
in
accordance with the terms of this Agreement, will be validly issued,
fully
paid and nonassessable, free and clear of all liens imposed by the
Company
other than restrictions on transfers imposed by applicable federal
and
state securities law.
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7.2 Representations
and Warranties of Customer.
Customer represents and warrants that:
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(a)
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Customer
is a _______ duly organized, validly existing and in good standing
under
the laws of the state of _________. Customer is duly qualified as
a
foreign limited liability company in all jurisdictions in which the
failure to so qualify would have a material adverse effect on Customer
and
any subsidiaries taken as a whole.
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(b)
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This
Agreement and the transactions contemplated hereby have been duly
and
validly authorized by Customer and constitute a valid and binding
agreement of Customer, enforceable in accordance with their respective
terms, except to the extent that (i) enforcement of each of this
Agreement
may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors’ rights generally, and (ii) general principles of
equity.
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6
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(c)
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Customer
understands that the Common Stock issuable hereunder are “restricted
securities” and have not been registered under the Securities Act of 1933,
as amended (the “Securities
Act”)
or any applicable state securities law and is acquiring the Securities
as
principal for its own account and not with a view to or for distributing
or reselling such Securities or any part thereof in violation of
the
Securities Act or any applicable state securities law, has no present
intention of distributing any of such Securities in violation of
the
Securities Act or any applicable state securities law and has no
direct or
indirect arrangement or understandings with any other persons to
distribute or regarding the distribution of such Securities in violation
of the Securities Act or any applicable state securities law. Customer
is
acquiring the Common Stock hereunder in the ordinary course of its
business. Customer further acknowledges and understands that the
Common
Stock issuable hereunder must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption
from such
registration is available.
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(d)
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Customer
is an “accredited investor” as defined in Regulation D promulgated under
the Securities Act.
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(e)
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Customer,
either alone or together with its representatives, has such knowledge,
sophistication and experience in business and financial matters so
as to
be capable of evaluating the merits and risks of the prospective
investment in the Common Stock, and has so evaluated the merits and
risks
of such investment. Customer acknowledges receipt of the Company’s most
recent quarterly report on Form 10-Q filed with the Securities and
Exchange Commission (which report is also available at ▇▇▇▇://▇▇▇.▇▇▇.▇▇▇)
and has reviewed the risk factors and other matters described therein.
Customer is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete
loss of
such investment.
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(f)
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Customer
is not acquiring the Common Stock issuable hereunder as a result
of any
advertisement, article, notice or other communication regarding the
Common
Stock published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other
general
solicitation or general
advertisement.
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8.
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TERM
AND TERMINATION
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8.1 Term;
Termination.
This
Agreement and the rights granted pursuant to this Agreement shall commence
on
the Effective Date and, unless earlier terminated as provided in this Article
8
shall continue in full force and effect
until
expiration of the Royalty Term. Except as otherwise provided in Section 8.2
below, upon the expiration or earlier termination of this Agreement, all rights
granted to the Parties hereunder shall terminate, and each Party shall be
released from all obligations and liabilities to the other occurring or arising
after the date of such termination, except that Sections 6.1 and 10.2 of this
Agreement shall survive.
7
8.2 Termination
for Breach.
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(a)
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By
QPC or Quintessence:
Either QPC or Quintessence may terminate this Agreement upon written
notice to Customer if Customer materially breaches a provision of
this
Agreement and fails to correct such breach within thirty (30) days
following written notice specifying such breach.
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(b)
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By
Customer:
Upon the occurrence of an Event of Default (as defined below), Customer
may at any time, if an Event of Default shall then be continuing,
by
written notice to QPC terminate this Agreement. “Event of Default” shall
mean and include each of the
following:
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(i)
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QPC
shall fail to make any royalty payments when the same become due
and
payable to Customer under this Agreement and fails to cure such missed
payment(s) within thirty (30) days following receipt of written notice
of
such non-payment from Customer to
QPC;
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(ii)
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Either
QPC or Quintessence shall fail to perform or comply with any material
agreement or covenant made by it under this Agreement in any material
respect and fails to substantially cure such default within sixty
(60)
days following receipt of written notice specifying the nature of
such
default from Customer to QPC; provided, however, that if such default
is
not curable within such 60-day period, an Event of Default shall
be deemed
to occur only if QPC or Quintessence, as applicable, has not commenced
and
diligently continued during such 60-day period reasonable actions
to cure
such breach.
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(iii)
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Any
material representation or warranty made by QPC or Quintessence under
this
Agreement shall prove to have been untrue or incorrect in any material
respect when made.
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(c)
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Effect
of Termination.
Subject to the limitations set forth in Section 8.4, any termination
of
this Agreement under this Section 8.2 shall not affect the right
of a
Party to ▇▇▇ the other Parties for any damages recoverable under
applicable law as a result of such
termination.
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8.3 Option
to Terminate.
QPC may
elect to terminate this Agreement for any reason at any time prior to the
expiration of the five-year royalty term upon the delivery of written notice
of
termination and payment of a termination fee in the amount of Five Million
Dollars ($5,000,000) to Customer. In the event of such termination, all rights
granted to the Parties hereunder shall terminate, and each Party shall be
released from all obligations and liabilities to the other occurring or arising
after the date of such termination; provided, however, that that Sections 6.1
and 10.2; and provided, further, that any Common Stock issued to Customer under
this Agreement prior to the effective date of termination under this Section
8.3
shall not be subject to repurchase and shall remain the property of Customer
or
its assignees.
8
8.4 Limitations
on Damages.
Notwithstanding anything to the contrary set forth in this Agreement, no Party
shall be liable to the others under any theory of liability for any indirect,
exemplary, incidental, or consequential damages of any kind, including, without
limitation: (i) for the loss of prospective profits, anticipated sales or
goodwill, or the interruption of business or ; (ii) on account of any
expenditures, investments or commitments made by either party; or (iii) for
any other reason whatsoever based upon the result of such expiration or
termination.
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9.
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DISCLAIMERS
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9.1
EXCEPT
AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES, AND HEREBY EXPRESSLY
DISCLAIMS, ANY AND ALL REPRESENTATIONS OR WARRANTIES HEREUNDER, WHETHER EXPRESS
OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE OR NON-INFRINGEMENT,
OR
ANY WARRANTIES THAT MAY ARISE FROM COURSE OF PERFORMANCE, COURSE OF DEALING
OR
USAGE OF TRADE.
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10.
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GENERAL
|
10.1 Export
Control.
Customer agrees to comply fully with all relevant export laws and regulations,
including, without limitation, the laws and regulations of the United States
and
worldwide, as applicable (“Export
Laws”),
to
assure that the Products (nor any direct product thereof) is (a) exported,
directly or indirectly, in violation of Export Laws, or (b) intended to be
used
for any purposes prohibited by the Export Laws, including, without limitation,
nuclear, chemical or biological weapons proliferation.
10.2 Confidentiality.
The
Parties hereby acknowledge and agree that this Agreement, the Product and
Deliverable Items, including any portion thereof, modifications and derivatives
thereof, information or materials derived therefrom and any specifications
or
documentation relating to the Products or Deliverable Items, and other
confidential information provided by QPC or Quintessence to Customer hereunder,
shall constitute “Confidential
Information”
under,
and be subject to the terms and conditions of, that certain Mutual
Non-Disclosure Agreement, dated June 16, 2008, between QPC and
Customer.
10.3 Entire
Agreement.
This
Agreement (including, without limitation, all Exhibits hereto) contains the
entire agreement among the Parties with respect to the subject matter hereof
and
supersedes all previous, contemporaneous and inconsistent agreements,
negotiations, representations and promises between the Parties, written or
oral,
regarding the subject matter hereof.
10.4 Headings.
The
headings contained in this Agreement are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope
or intent of this Agreement nor in any way affect its terms and
provisions.
9
10.5 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of California, without reference to its conflicts of law provisions.
10.6 Notices.
All
notices hereunder shall be in writing and shall be delivered by hand, mailed
by
registered or certified mail (return receipt requested), deposited with a
reputable, established overnight courier service for delivery to the intended
addressee against receipt, or sent by telecopy (confirmed by regular,
first-class mail), to the Parties at the following addresses (or at such other
addresses for a Party as shall be specified by like notice) and shall be deemed
given on the date on which such notice is received:
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if
to QPC:
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QPC
Lasers, Inc,.
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▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention:
▇▇▇▇▇▇ ▇▇▇▇▇
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Fax: ▇▇▇
▇▇▇▇ ▇▇▇▇
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and
a copy
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(which
shall not
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constitute
notice) to:
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▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP
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▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
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▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
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Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
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if
to Customer:
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[REDACTED]2
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and
a copy
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(which
shall not
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constitute
notice) to:
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10.7 Assignment.
Neither
QPC nor Customer may assign this Agreement, in whole or in part, without the
prior written consent of the other Party. Notwithstanding the foregoing, QPC
may
convey its entire right and interest under this Agreement to any successor
by
way of merger, acquisition or similar transaction. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of each party’s
respective successors and lawful assigns.
10.8 Public
Announcements.
No
Party to this Agreement shall make, or cause to be made, any press release
or
public announcement in respect of this Agreement or otherwise communicate with
any news media without the prior written consent of the other Party, and the
Parties shall cooperate as to the timing and contents of any such press release
or public announcement. Notwithstanding the foregoing, QPC shall be free to
make
such disclosures regarding this Agreement as it reasonably determines are
required by applicable federal securities laws.
2 NOTE:
The Company has requested confidential treatment for the redacted information.
A
complete copy of this Agreement has been separately filed with the Securities
and Exchange Commission.
10
10.9 Amendment.
Any
amendment to this Agreement, or any subsequent agreement among the Parties
in
respect of the subject matter hereof, shall not be binding on the Parties unless
such amendment or agreement is executed by QPC and Customer.
10.10 Waiver.
The
failure of a Party to insist upon strict adherence to any term of this Agreement
on any occasion shall not be considered a waiver or deprive that Party of the
right thereafter to insist upon strict adherence to that term or any other
term
of this Agreement. Without limitation of the foregoing, failure or delay on
the
part of a Party in exercising a right of termination hereunder with respect
to
any act or event shall not be construed to prejudice its right of termination
for such act or event in the future or for any subsequent act or event. No
waiver shall be effective unless it is in writing and is signed by the Party
asserted to have granted such waiver.
10.11 Severability.
The
provisions of this Agreement shall be deemed severable and the invalidity or
unenforceability of any provision shall not affect the validity or
enforceability of the other provisions hereof. If any provision of this
Agreement, or the application thereof to any person or entity or any
circumstance, is found by a governmental authority or court of competence
jurisdiction to be invalid or unenforceable, (i) the Parties shall amend such
provision in accordance to obtain a legal, enforceable and valid provision
that
most nearly effects the Parties’ intent in entering into this Agreement and (ii)
the remainder of this Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by such invalidity
or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in
any
other jurisdiction.
10.12 Counterparts.
This
Agreement may be executed in two or more counterparts (by original or facsimile
signature), each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument
10.13 Relationship
of the Parties.
The
relationship hereby established between the Parties is and shall be solely
that
of independent contractors. Nothing in this Agreement is intended or shall
be
deemed to (a) constitute a partnership, agency, franchise or joint venture
relationship between the Parties hereto, (b) give any Party hereto the power
to
direct or control the day-to-day activities of the employees of the other Party,
(c) cause any employees or agents of any Party to be deemed to be employees
or
agents of the other Party for any purpose, or (d) allow a Party to create or
assume any obligation on behalf of the other Party, except as expressly provided
herein. In addition, no Party shall have any power to act for or represent
the
other, except as expressly provided in this Agreement.
10.14 Interpretation.
This
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the Party drafting or causing any
instrument to be drafted. Words of inclusion shall not be construed as terms
of
limitations, so that references to “included” matters shall be regarded as
non-exclusive, non-characterizing illustrations.
[Signature
page follows]
11
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by
their respective duly authorized representatives as of the date first above
written.
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QPC
LASERS, INC.
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By:
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|
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Name:
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|
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Title:
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QUINTESSENCE
PHOTONICS CORPORATION
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By:
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|
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Name:
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|
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Title:
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[REDACTED]3
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By:
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Name:
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Title:
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3
NOTE:
The Company has requested confidential treatment for the redacted information.
A
complete copy of this Agreement has been separately filed with the Securities
and Exchange Commission.
SIGNATURE
PAGE TO DEVELOPMENT
AGREEMENT
EXHIBIT
A
Development
Payment
Pursuant
to Section 2 of the Agreement, Customer hereby agrees to make a Development
Payment in the amount of Two Million Dollars ($2,000,000), which payment shall
be due as of the Effective Date and payable in the following manner:
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Payment Date
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Payment Amount
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|||
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Effective
Date
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$
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150,000
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||
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Ten
days following the Effective Date
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$
|
350,000
|
||
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August
31, 2008
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$
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500,000
|
||
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September
30, 2008
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$
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250,000
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||
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October
31, 2008
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$
|
250,000
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||
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November
30, 2008
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$
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250,000
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||
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December
31, 2008
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$
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250,000
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||
EXHIBIT
B
Royalties
Royalty
Rates.
Royalty
Payments due and payable in accordance with the Agreement shall be determined
as
follows:
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(a)
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QPC
shall pay Customer ten percent (10%) of Net Revenues that QPC or
Quintessence actually receives during the Royalty Term from the sale
of
the Products for use in three-dimensional (“3-D”) display/projection
applications in connection with the 3-D display and projection
business.
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(b)
|
QPC
shall pay Customer three percent (10%) of Net Revenues that QPC or
Quintessence actually receives during the Royalty Term from the sale
of
the Products for use in display/projection applications other than
in 3-D
display/projection applications.
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