Exhibit 10.2
TECHNOLOGY TRANSFER AND
CONSULTING AGREEMENT
THIS TECHNOLOGY TRANSFER AND
CONSULTING AGREEMENT (the “Agreement”) is made and
entered into as of this 25 th day of May, 2009, by and between Sunggyu
Lee, Ph.D. (“SL”) and NORTHERN TECHNOLOGIES
INTERNATIONAL CORPORATION, a Delaware corporation
(“NTIC”).
RECITALS
:
A.
SL owns certain technology,
intellectual property and proprietary information (the
“Concept”);
B.
SL has developed certain knowledge,
information, know-how, trade secrets, discoveries, procedures,
devices, techniques, programs, inventions, creations, methods,
protocols, concepts, formulas, documentation, prototypes, designs,
improvements, software, content, data, support and design
documentation, ideas, drawings, works of authorship and/or other
valuable technical and proprietary information related to the
Concept, whether or not described in the Intellectual Property
Rights (as hereinafter defined), whether or not in writing or
reduced to practice, and whether or not patentable, copyrightable,
secret or proprietary (together, with the Concept, the
“Technology”);
C.
NTIC desires to obtain an option to
purchase the Technology and to engage SL as a consultant to NTIC to
assist NTIC in completing the Project Phase 1 (as defined in
Appendix I herein) for NTIC;
D.
In the event of the successful
completion of the Project Phase 1, NTIC desires to continue to
engage SL as a consultant to provide ongoing development and
support services to NTIC in connection with continuing development
of the Technology; and
E.
SL desires to grant NTIC such an
option to transfer the Technology to NTIC and to accept such an
engagement upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of
the mutual promises contained herein, and for other good and
valuable consideration, the receipt, adequacy and sufficiency of
which are hereby acknowledged, the parties agree as
follows:
SECTION 1.
OPTION TO TRANSFER TECHNOLOGY TO
NTIC AND ACCEPT CONSULTING ENGAGEMENT WITH NTIC
(a)
Option
.
Commencing May 1, 2009, NTIC reserves the exclusive,
non-transferable right, privilege and option (the
“Option”) to purchase the Technology from SL and to
engage SL for the consulting services as described in
Section 1(c) of this Agreement, such Option to be
exercised by NTIC within eighteen (18) months of the date of this
Agreement (the “Option Period”). In consideration for
the Option, NTIC will pay to SL a down payment of US$30,000 (the
“Down Payment”), payable in six (6) $5,000 monthly
increments beginning on the first day of the first month after the
execution of this Agreement, which Down Payment will be deductible
from any amounts to be paid to SL by NTIC pursuant to
Section 1(d) of this Agreement. Upon execution of
this Agreement and at all times during the Option Period,
SL
will not transfer the
Technology to anyone other than NTIC or provide services to any
third party similar to the Services (as hereinafter defined) to be
provided to NTIC under this Agreement.
(b)
Technology
Purchase and Sale . Subject to the terms and
conditions set forth in this Agreement and assuming NTIC exercises
the Option described in Section 1(a) of this Agreement,
SL hereby irrevocably assigns and transfers to NTIC all of their
collective right, title and interest in and to the Technology,
together with the full and unrestricted right to use, develop,
enhance, modify, improve and assign, license or otherwise transfer
the same, and to make, use, sell and lease any products
incorporating the Technology, free and clear of all liens, security
interests or other encumbrances of any character whatsoever
(collectively “Encumbrances”). The transfer
hereunder includes all of SL’s rights, title and interests in
and to all patents, patent applications, patent rights, copyrights,
copyright applications, trademarks, trademark applications, trade
names, service marks, service mark applications, know-how, trade
secrets, proprietary processes and formulae, similar statutory and
common law protections which may apply to, or be applied for or
granted with respect to, the Technology and all rights of priority
and all rights and claims for past infringement thereof related to
the Technology and any United States patent applications (including
divisional, continuing or reissue applications) based in whole or
in part on the Technology, any foreign applications based in whole
or in part on the Technology or any of such patents and patent
applications, and any and all patents (including extensions
thereof) of any country which have been or may be granted on any of
the inventions or applications (collectively, the
“Intellectual Property Rights”). Assuming NTIC
exercises the Option described in Section 1(a) of this
Agreement, SL will execute promptly on request whatever documents
NTIC reasonably deems necessary or desirable to carry out the
provisions of this Section 1(b).
(c)
Consulting
Engagement; Services . Subject to the terms and
conditions set forth in this Agreement and assuming NTIC exercises
the Option described in Section 1(a) of this Agreement,
NTIC hereby appoints and engages SL and SL hereby accepts such
appointment and engagement, to perform in a diligent and competent
manner the services in connection with Project Phase 1, as set
forth on Appendix I attached hereto and incorporated herein
(collectively, the “Services”). In
providing the Services, SL shall not utilize the services of any
person or entity unless pre-approved in writing by NTIC. NTIC
hereby approves SL as pre-approved to perform the Services.
Upon completion of the Project Phase 1, the consulting period may
be extended to additional phases upon the written agreement of both
parties or a written amendment to this Agreement.
(d)
Consideration
for Transfer of Technology and Provision of Consulting
Services . Assuming NTIC
exercises the Option described in Section 1(a) of this
Agreement, in exchange for the assignments and transfers by SL of
the Technology to NTIC pursuant to Section 1(b) of this
Agreement and in exchange for the Services to be rendered by SL to
NTIC pursuant to Section 1(c) of this Agreement, NTIC
shall pay to SL US$120,000 ($150,000 less the $30,000 Down Payment
paid by NTIC to SL pursuant to Section 1(a) above),
payable in eight (8) $15,000 monthly increments. These monthly
increments shall be payable in advance on the first day of each
month during the first eight (8) months of the Project Phase 1
and in a manner as reasonably designated by SL. In the event NTIC
requests SL to travel in furtherance of the purposes of this
Agreement, NTIC shall pay to SL such amounts as are necessary to
pay or
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reimburse SL for reasonable,
out-of-pocket travel expenses, which shall be determined and
approved in advance by NTIC on a case-by-case basis. Any such
reimbursements by NTIC shall be made to SL upon submission by SL to
NTIC of an expense report with appropriate receipts, in accordance
with customary NTIC policies.
(e)
Royalties
. In the event
that NTIC commercializes any products or services that incorporate
the Technology or any other Inventions (as hereinafter defined)
developed by SL pursuant to this Agreement, the ownership of which
is transferred to NTIC pursuant to Section 1(b) and/or
Section 6 of this Agreement and SL otherwise complies with the
terms of this Agreement, including without limitation Sections 6
and 7 of this Agreement, then in addition to the amounts paid to SL
pursuant to Section 1 of this Agreement, NTIC shall pay to SL
a royalty of three percent (3%) of any earnings before interest and
taxes (EBIT) to NTIC generated from the commercial exploitation by
NTIC of any products or services that incorporate the Technology or
any other Inventions developed by SL pursuant to this Agreement,
the ownership of which is transferred to NTIC pursuant to
Section 1(b) and/or Section 6 of this Agreement
until the earlier of: (i) the last to expire of any applicable
patents covering such Technology or Inventions and (ii) all of
the patents covering such Technology or Inventions are held to be
invalid by a court or other authority of competent jurisdiction, or
if there are no issued patents covering such Technology or
Inventions, for 10 years from the first date of commercial sale or
license. For purpose of this Agreement, earnings before
interest and taxes to NTIC generated from the commercial
exploitation of any products or services that incorporate the
Technology or any other Inventions developed by SL pursuant to this
Agreement, shall be determined to the extent practicable in
accordance with U.S. generally accepted accounting principles and
ultimately by NTIC in its sole discretion. Should NTIC sell
the Technology or any Inventions developed by SL under this
Agreement to a third party, NTIC will ensure that the royalty
obligations set forth in this Section 1(e) of this
Agreement will be assumed by the new owner or will make such other
arrangements with SL at that time so as to compensate SL for any
lost future royalties.
(f)
Delivery of
Documents Evidencing Technology Transfer; Further
Assurances . Promptly upon
exercise of the Option and from time to time thereafter as
appropriate, SL will deliver to NTIC all documentation in either of
its possession embodying or relating to the Technology. SL
also agrees to assist NTIC in every legal way to evidence, record
and perfect the assignment and transfer pursuant to
Section 1(b) of this Agreement and to apply for and
obtain recordation of and from time to time enforce, maintain, and
defend the assigned rights. If NTIC is unable for any reason
whatsoever to secure either SL’s signature to any document to
which it is entitled under this Section 1, SL hereby
irrevocably designates and appoints NTIC and its duly authorized
officers and agents, as its agents and attorneys-in-fact with full
power of substitution to act for and on its behalf and instead of
SL, to execute and file any such document or documents and to do
all other lawfully permitted acts to further the purposes of the
foregoing with the same legal force and effect as if executed by
SL, as the case may be.
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SECTION 2.
TERMINATION; EFFECT OF
TERMINATION
(a)
Termination
. This
Agreement may be terminated:
(i)
By NTIC if, at
any stage, NTIC determines in its sole discretion not to proceed
with the Project, including without limitation if NTIC determines
that either the technical or commercial viability of the Project is
infeasible for NTIC at any point.
(ii)
By NTIC
immediately upon written notice to SL in the event of a breach by
SL of this Agreement, which breach is not cured to the reasonable
satisfaction of NTIC within fifteen (15) days following delivery by
NTIC of written notice describing the alleged breach in reasonable
detail; or
(iii)
By mutual
agreement of the parties in writing.
(b)
Effect of
Termination . Upon termination of
this Agreement, the parties hereto shall have no obligations to
each other hereunder, other than NTIC’s obligation to pay any
earned but unpaid payments and royalties pursuant to Section 1
of this Agreement and SL’s covenants in Sections 6 and 7 of
this Agreement, which provisions shall survive the termination of
this Agreement may be terminated.
SECTION 3.
DUTIES OF NTIC HEREUNDER
(a)
Domestic
Commercialization . Unless NTIC determines that
the U.S. domestic market is infeasible for this Technology, NTIC
covenants to use commercially reasonable efforts during the first
three (3) years of commercializing the Technology and any
Invention developed by SL under this Agreement, to exclusively
exploit any Invention resulting from the Project Phase 1 in the
United States of America (USA) domestic market with USA-based
resources.
(b)
Support
Services . NTIC agrees to provide
commercially reasonable personnel to act as technical liaisons
between SL and NTIC as well as to create a business plan for the
commercial exploitation of the Project Phase 1 Technology and
Inventions.
SECTION 4.
INDEPENDENT CONTRACTOR RELATIONSHIP
OF THE PARTIES
Notwithstanding anything contained
in this Agreement to the contrary, NTIC, on the one hand, and SL,
on the other hand, are and shall act as, and for all purposes shall
be deemed to be, independent contractors. As
independ
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