Exhibit 10.2

 

LICENSE AGREEMENT

 

This License Agreement (the “Agreement”) is made this 8th day of August, 2014
(the “Execution Date”) but is effective as of February 1, 2014, 2014 (the
“Effective Date”), by and between Peter Holdings Pty Ltd, an Australian
corporation (“Peter Holdings”), BioLargo, Inc., a Delaware corporation, having a
principal place of business at 3500 W. Garry Ave., Santa Ana, California,
(“BioLargo”), and InsulTech Manufacturing, LLC, an Arizona limited liability
company d/b/a Clarion Water, having a principal place of business at 3530 W.
Garry Ave., Santa Ana, California (“Licensee”). BioLargo and Peter Holdings are
referred to herein collectively as “Licensor”, and Licensee and Licensor are
referred to herein individually as a “Party” and collectively as the “Parties”.

 

RECITALS

 

WHEREAS, Licensor owns certain intellectual property comprising the “ISAN
System”, including patents, trades secrets, trademarks, trade names, know-how,
as well as working systems (as more particularly defined below as “Intellectual
Property”), which Licensee desires to commercialize; and

 

WHEREAS, Licensor is willing to grant an exclusive license of such Intellectual
Property, subject to the terms, conditions, limitations, and restrictions set
forth in this Agreement.

 

NOW, THEREFORE, incorporating the foregoing recitals, for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and for the mutual covenants contained in this Agreement, the
Parties hereby agree as follows:

 

 

1.

Definitions.

 

a.     Audit Period means the period up to and including 90 days after the end
of each calendar year.

 

b.     Bankruptcy Act means Title 11 of the United States Code, as now or
hereafter in effect or any successor statute.

 

c.     Effective Date means the date this Agreement became effective.

 

d.     Execution Date means the date this Agreement was entered into.

 

e.     Field of Use means any and all fields of commercial and non-commercial
endeavor.

 

f.     Intellectual Property means the intellectual property related to the Isan
System, including without limitation the Patents, and the Proprietary Property
(as defined herein).

 

g.     Isan System means the automated iodine delivery system developed by Ioteq
IP Pty Ltd of Australia, as may be improved or modified during the Term of this
Agreement.

 

 
 

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h.     License means the licensing of the rights to the Intellectual Property
granted by Licensor to Licensee.

 

i.     Licensed Processes means any method, process, modality, procedure,
practice, or course of action (i) covered by a claim of the Patents, or (ii)
having technical content based upon, or otherwise derived from, the Intellectual
Property.

 

j.     Licensed Products means any article, kit, equipment, system, method,
apparatus or unit (i) covered by a claim of the Patents, or (ii) having
technical content based upon, or otherwise derived from, the Intellectual
Property.

 

k.     Net Sales Revenue means gross sales revenue received by Licensee from the
sale, lease, or rental of Licensed Products and Licensed Processes, less any
taxes, returns, allowances, discounts, freight and packaging costs, costs of
consumables (such as iodine) and insurance when the same are actually paid or
allowed. Net Sales Revenue does not include revenue generated pursuant to
sublicense agreements or for any items, services, revenue sharing or other
payments as related to the Isan System that are sold at or below their actual
cost.

 

l.     Patents means those patents referenced on Exhibit A, “Schedule of
Patents/Patent Application, Ioteq IP Pty Ltd February 2014”, as may be extended
or modified from time-to-time during the term hereof, together with any
additional patents that may be added to Exhibit A in accordance with the
Agreement.

 

m.     Proprietary Property means the following property related to the Isan
System, as provided by Licensor to Licensee, and the Patents:

 

i.     All proprietary knowledge, marketing and sales materials and information,
potential customer lists and contact information, technical information, data,
trade secrets, Confidential Information, computer software and licenses,
formulae, designs and drawings (paper and CAD/CAM), quality control data,
know-how, processes and instructions (whether secret or not), methods,
inventions and other similar know-how or rights relating to or arising out of
the Isan System or the Patents.

 

n.     Territory means world wide.

 

 

2.

Grant of License.

 

a.     In consideration of the license fee and royalties to be paid by Licensee
hereunder, and subject to the other terms and conditions set forth in this
Agreement, Licensor hereby grants to Licensee as of the Effective Date the
exclusive and non-terminable (except as otherwise expressly provided herein)
license in the Field of Use in the Territory to use, exploit, develop and
commercialize each and every element of the Intellectual Property, including
without limitation (i) to make, have made, use, sell, offer for sale, license,
and sublicense Licensed Products, (ii) to import and export Licensed Products,
(iii) to practice Licensed Processes, (iv) to derive all economic benefit from
all activities undertaken by Licensee with respect to the Intellectual Property,
subject to the payments to Licensor specified herein, and (v) to conduct
research, develop and make modifications and enhancements to the Intellectual
Property, and to improve the Intellectual Property (provided, however, that
Licensor may conduct research, develop and make modifications and enhancements
to the Intellectual Property to improve the Intellectual Property in accordance
with Section 2(d) below).

 

 
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b.     Limitations. This grant of license rights is subject to the following
limitations:

 

i.     The rights granted herein are granted only with respect to the Territory,
in the Field of Use, and so long as this Agreement is in force and effect;

 

ii.     Subject to Section 10(a), no right or license is granted or implied to
the Licensee or any person claiming through the Licensee under any patent or
patent application other than those specifically identified as the Patents, as
may be extended or modified from time-to-time during the term hereof;

 

iii.     Licensor reserves to itself all other intellectual property rights
owned by it that are not expressly granted to Licensee by this Agreement; and

 

iv.     Except as provided in this Agreement, nothing herein will be construed
to grant the Licensee the right to register or claim any trademark or trade name
confusingly similar in sound, appearance or meaning to those registered by
Licensor that are expressly disclosed in this Agreement.

 

c.     Isan Name. During the term of this Agreement, Licensor expressly grants
the exclusive license to Licensee to use the words “Isan,” “Isan USA” and
“Ioteq” in (i) its corporate name and in the name of any affiliated entities
that Licensee may elect to form in connection with this License, (ii) the
branding, marketing, sale and sublicensing of the Licensed Processes and/or
Licensed Products, and (iii) in all other uses and applications as Licensee may
deem to be appropriate in connection with this License. Unless otherwise agreed
to by the Parties in writing, Licensor agrees not to use such words in any of
its business operations during the term of this Agreement; provided, however,
that Licensor may describe the Isan System and its technology (excluding any
confidential information of Licensee) so long as the facts of this Agreement are
clearly indicated. Licensee agrees to remove the word “Isan” and “Ioteq” from
its corporate name upon the termination of this Agreement (if applicable), and
assign any registered trademarks with the “Isan” or “Ioteq” name to Licensor.

 

d.     Research and Development. During the Term, Licensee shall have the
exclusive right (but not the obligation) to conduct research and development
activities, and pursue regulatory approval, clinical trials, and all other work
necessary to develop, improve, enhance and commercialize the Licensed Products
and Licensed Processes within the Field of Use in the Territory. In connection
with such potential efforts by Licensee after the transition of Section 3 is
complete, Licensee may consult with Licensor, and Licensor shall make
appropriate personnel available for reasonable telephone and other informal
consultations, but shall not, among other things, obligate Licensor personnel to
travel, spend a minimum number of hours or engage technical personnel in
research or clinical projects, all of which services (“Additional Services”) may
be requested by Licensee and shall be subject of further negotiation by the
Parties including provisions for appropriate consideration therefor at the
hourly rate of US$95.00/hour and with reimbursement at cost of any direct
expense incurred by Licensor at Licensee’s request. Licensee shall keep Licensor
reasonably informed as to any research and development activities, regulatory
approvals, clinical trials, and other work undertaken by Licensee or any other
party authorized by Licensee to develop, improve and/or enhance the Licensed
Products and Licensed Processes. Upon Licensor’s request, Licensee may permit
Licensor to conduct research and development activities, regulatory approvals,
clinical trials, and other work to develop, improve and/or enhance the
Intellectual Property, Licensed Products and Licensed Processes, and Licensor
shall keep Licensee reasonably informed as to any of such activities. Subject to
Section 10(a), in the event that either Licensee or Licensor, or the two of them
jointly, or any other party, improves or enhances the Licensed Products and/or
Licensed Processes in any way, such improvements and enhancements shall be
deemed to be part of the Intellectual Property that is licensed to Licensee
hereunder, and Licensee shall have the right to utilize, market, sell and
otherwise benefit from such improvements and enhancements on the terms set forth
herein as if such improvements and enhancements were part of the Intellectual
Property on the Effective Date.

 

 
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e.     No Contrary Licenses. During the Term of this Agreement Licensor shall
not enter into any licenses, sublicenses or other agreements or arrangements of
any kind with any party which allow for, permits or facilitates the commercial
or non-commercial use of the Intellectual Property, the Proprietary Property,
the Licensed Processes and/or the Licensed Products, or any of them, or any
variations thereof, in the Fields of Use in any portion of the Territory, nor
shall Licensor directly or indirectly do any of the foregoing on its own behalf.
The covenants of Licensor hereunder are material consideration to Licensee in
entering into this Agreement and Licensee would not have agreed to the terms
hereof in the absence of these promises. Without limiting any other rights and
remedies available to Licensee for Licensor’s breach of this Agreement, Licensee
shall have the right to obtain injunctive relief as appropriate to enforce this
provision, without the posting of a bond or other security therefor.

 

 

3.

Licensor Obligations. Licensor shall promptly:

 

 

a.

Provide to Licensee three assembled and operating Isan units, plus any spare
parts that may be in current inventory, Licensee to pay any shipping and import
fees, if required. The Parties acknowledge that this was accomplished between
the Effective Date and the Execution Date of this Agreement.

 

 

b.

Upon request of Licensee, consult with Licensee to the best of Licensor’s
ability (including providing information and engineering support) regarding the
technical, regulatory, marketing, and engineering aspects of the Isan System,
Proprietary Property and Intellectual Property, sufficient to transfer existing
knowledge to Licensee.

 

 

c.

Provide to Licensee copies of all CAD/CAM files, drawings, bills of materials,
instructions, manufacturer specs, design notes, and any other information
necessary to build, quote parts and design elements, and deliver working Isan
units into the field.

 

 

d.

Provide to Licensee copies of all Patents, Patent applications, Proprietary
Property and the Intellectual Property.

 

 

 
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e.

Provide to Licensee copies of all documentation related to regulatory
applications and approvals in Australia and New Zealand, including supporting
science.

 

 

f.

Provide to Licensee copies of all customer history files, case studies, notes,
recommendations, and similar materials that will assist Licensee in better
understanding of Isan System set-up and implementation for specific applications
(both non-custom and custom).

 

 

g.

Provide to Licensee all other advice, information, or materials, available to
Licensor, that will assist Licensee in its efforts to commercialize the Isan
System.

 

 4.           Royalty and Payments. In consideration of the License granted to
Licensee, and subject to the other terms and conditions set forth in this
Agreement, Licensee shall pay to Licensor each of the following royalties and
payments:

 

a.     Initial License Fee. After the Effective Date but prior to the Execution
Date, Licensee has paid in full to Licensor a onetime fee (the “Initial License
Fee”) of $100,000, in good and immediately collectable funds. The Initial
License Fee is fully earned by Licensor upon the Execution Date, and is
non-refundable after such time. The Initial License Fee shall be credited to
Royalties, Sublicense Fees, or any other fees due pursuant to this Agreement
from the inception of the Agreement through June 30, 2016. After June 30, 2016,
the Initial License Fee, or any portion thereof, shall not be credited to
Royalty, Minimum Payments, Sublicense Fees, or any other fees due hereunder.

 

b.     Royalty. Commencing upon the Execution Date and during the Term of this
Agreement, Licensee shall pay to Licensor ten percent (10%) of Licensee’s Net
Sales Revenue as an ongoing royalty fee (the “Royalty”). Each Royalty shall be
paid in good and immediately collectible funds, and paid quarterly in arrears
within thirty (30) days after the end of each calendar quarter.

 

 

5.

Sublicensing.

 

a.     Right to Sublicense. Subject to the conditions and payment of fees set
forth in this Agreement, Licensee may enter into commercially reasonable
agreements with third parties granting said third parties any of the rights
granted to Licensee pursuant to this Agreement within the Territory and Field of
Use, including without limitation pre-license or product development agreements,
or agreements to sublicense the Patents within the Territory or Field of Use
(each, a “Sublicense Agreement”). For each such Sublicense Agreement, Licensee
shall pay to Licensor a portion of the income generated from such agreement, as
set forth in Section 5(b) below.

 

b.     Sublicensing Fees. If Licensee enters into a Sublicense Agreement
pursuant to this Section, Licensee shall pay to Licensor a sublicense fee (each,
a “Sublicensing Fee”) equal to forty percent (40%) of any net sublicense fees,
royalties and other payments, less all direct expenses related to the sublicense
of the Isan System or Patents, received by Licensee, or any affiliate of
Licensee, from any party, under such Sublicense Agreement. No Royalty Fee shall
be due from Licensee or any third party for which a Sublicensing Fee is due.
Each Sublicensing Fee shall be paid in good and immediately collectible funds,
and paid quarterly in arrears within thirty (30) days after the end of each
calendar quarter.

 

 
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6.            [Intentionally Left Blank]

 

7.            Minimum Payments. For so long during the Term that Licensee’s
License is “exclusive,” Licensee shall pay to Licensor a minimum amount (each, a
“Minimum Payment”) of: zero due through June 30, 2016; from July 1, 2016,
through June 30, 2017, $50,000 per quarter; from July 1, 2017, through June 30,
2018, 75,000 per quarter; from July 1, 2018, and each quarter thereafter,
$100,000 per quarter. Each such Minimum Payment shall be paid within thirty (30)
days after the last day of each calendar quarter, in arrears, beginning the
quarter ending September 30, 2016, and shall be offset by any Royalty fees and
Sublicensing Fees paid to Licensor for such quarter.

 

a.     Licensee’s failure to pay within thirty (30) days of receipt of written
notice from Licensor of Licensee’s failure to timely pay the Minimum Payment due
for any four (4) consecutive quarters (a “Minimum Payment Default”) shall
automatically modify, without further notice or action on the part of Licensor,
the terms of the License such that the License shall no longer provide Licensee
the “exclusive” rights granted hereunder. Any such Minimum Payment Default shall
not relieve Licensee of its obligation to pay in full the Minimum Payment or any
other fees or royalties created herein, which shall remain due and payable to
Licensor.

 

8.            License Term; Options to Extend Term; Early Termination. Subject
to early termination, including Licensee’s right to terminate the Agreement set
forth below, the term of this Agreement (the “Term”) shall expire on the later
to occur of (i) the tenth (10th) anniversary of the Execution Date or (ii) when
the last Patent hereunder is invalidated, terminates or expires; provided that
the Agreement shall automatically renew for additional ten year periods, unless
either Party gives one year notice prior to the expiration of any Term.
Notwithstanding anything to the contrary contained elsewhere in this Agreement,
if at any time during the Term Licensee determines that it does not wish to
continue the License, (e.g., if Licensee determines that continuation of this
License will not be, or is no longer, economically viable), Licensee shall have
the right to terminate this Agreement upon not less than ninety (90) days
advance written notice to Licensor, in which case Licensee shall be responsible
for the Royalty fee, Sublicense Fee, or Minimum Payment, as applicable,
otherwise due hereunder through the termination of the Agreement, with such
amounts being prorated as appropriate for any partial quarter during which the
Agreement ends, and Licensee shall have no further obligation hereunder.
Further, and notwithstanding anything to the contrary contained elsewhere in
this Agreement, upon termination of this Agreement the Parties shall remain
entitled to receive their respective compensation due hereunder through the date
of such termination, whether or not such payments have yet been made or
received, as applicable, and this Agreement shall remain in effect and be
enforceable following such termination as necessary to ensure that any such
unpaid compensation is received and paid as required hereunder.

 

 
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9.            Reporting.

 

a.     Books and Records. Licensee shall keep full and accurate books of account
using generally accepted accounting principles (GAAP) showing the amount of Net
Sales Revenue and resulting Royalties and Sublicense Fees due pursuant to this
Agreement. These books of account shall be kept at Licensee’s place of business
and shall be subject to audit in accordance with Section 9(d).

 

b.     Royalty Report. Not later than thirty (30) days after the end of each
calendar quarter of each year (each calendar quarter is a “Reporting Period”),
Licensee shall deliver to Licensor a true and accurate report (a “Royalty
Report”), giving particulars of the business conducted by Licensee during the
preceding Reporting Period as are relevant to an accounting for Royalties and
Sublicense Fees due under this Agreement. The Royalty Report shall include the
following at a minimum: (i) the quantity of Licensed Products sold by Licensee;
(ii) the revenues arising from sales of Licensed Products; (iii) the calculated
Royalty due to Licensor; and (iv) revenues generated by any Sublicense
Agreements, identifying the sublicensee, the amount, and the basis of the
calculations. Simultaneously with the delivery of each Royalty Report, Licensee
shall pay to Licensor the applicable Royalty and Sublicense Fees due, and any
Minimum Payment due after crediting such Royalty and Sublicense Fees, as set
forth in Paragraphs 4(b), 5(b) and 7 above.

 

c.     Licensor’s Audit Rights. Not more than once per calendar year, Licensor
shall be entitled, upon not less than ten (10) business days written notice to
Licensee, and during business hours at Licensee’s office or such other place as
Licensee shall designate within the state of California, to inspect and examine
those books and records of Licensee relating to the determination of Royalty or
Sublicense Fees set forth in any Royalty Report(s) delivered within the prior
calendar year (the “Audit Period”). The inspection of Licensee’s records shall
be performed by a licensed public accounting firm acceptable to Licensee (a
“Qualified Firm”). The examination must be conducted within thirty (30) days of
such books and records being made available to Licensor (“Examination Period”).
The Qualified Firm shall prepare a report indicating the results of the review
(the “Audit Report”) and the Qualified Firm shall provide the Audit Report to
both Licensor and Licensee. If the Audit Report discloses that the amount of
Royalties or Sublicense Fees reported to Licensor was less than the actual
Royalties or Sublicense Fees owed, Licensee shall pay to Licensor the
deficiency, unless Licensee disputes the Report within thirty (30) days after
the receipt of the Report. Conversely, if the Audit Report discloses that the
amount of Royalties or Sublicense Fees reported and paid to Licensor was greater
than the actual Royalty fees owed, Licensor shall refund to Licensee the
overpayment (and Licensee shall be entitled to offset such overpayment against
the next Royalty fees due), unless Licensor disputes the Report within thirty
(30) days after the receipt of the Report. If either Party disputes the Report
within this thirty (30) day period, Licensee and Licensor shall agree upon
another accounting firm to review and verify the Royalties and Sublicense Fees,
and provide the results thereof to Licensee and Licensor (the “Reconciliation
Audit”) and the determination as set forth in the Reconciliation Audit shall be
binding upon Licensee and Licensor. All costs and expenses of the auditor
generating the Audit Report shall be paid by Licensor unless the audit shows
that Licensee understated Royalties and Sublicense Fees in the Royalty Report by
more than five percent (5%), in which case Licensee shall pay the costs and
expenses of such audit. Notwithstanding the foregoing, in the event the
Reconciliation Audit is performed, Licensee and Licensor shall each pay one-half
(1/2) of the cost of the Reconciliation Audit. The exercise by Licensor of its
audit rights hereunder shall not relieve Licensee of its obligations to pay
prior to the request for and inspection and examination of Licensee’s books and
records or permit Licensor the right to audit any other sums with the exception
of the amounts set forth in the Royalty Report. If Licensor does not elect to
exercise its rights to audit during the Audit Period, and/or does not elect to
examine the books and records during the Examination Period, then Licensee’s
Royalty Report shall conclusively be deemed to be correct and Licensor shall be
bound by Licensee's determination. Additionally, Licensor agrees and
acknowledges that the audit right as set forth herein and the review of books
and records shall be confidential and, with the exception of Licensor’s
auditors, Licensor may not disclose or discuss the audit or the results of the
audit to any other parties.

 

 
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10.           Intellectual Property Ownership; Related Actions.

 

a.     Improvements. Ownership of all inventions and discoveries by Licensor or
Licensee or jointly, relating to, deriving from, or enhancing or improving upon
any technology or claims embodied in any of the Patents, the Proprietary
Property, the Licensed Products or the Licensed Processes, whether discovered or
developed in connection with any of the research and development activities
conducted hereunder, or otherwise (each, a “New Invention”), shall become (i)
the sole property of Licensor if developed solely by Licensor, (ii) the joint
property of Licensor and Licensee if developed jointly by Licensor and Licensee,
or (iii) the sole property of Licensee if developed solely by Licensee, with New
Inventions under clauses (i) and (ii) and patents related thereto subject to the
rights granted to Licensee by the License. Any such New Invention and resulting
patents under clauses (i) and (ii) above shall automatically become part of this
License, resulting in no additional payments or change in the terms of the
License, but shall not absolve Licensee of any duty or obligation to pay
Royalties to Licensor for the original license of Proprietary Property. Licensee
shall cause each and every one of its officers and employees having access to,
contact with, or otherwise employed in any manner with the Intellectual
Property, to keep such information confidential and to refrain from disclosing
same except as is necessary or appropriate in connection with Licensee’s
business activities contemplated by this Agreement. Each Party shall assist the
other Party in obtaining and perfecting any new intellectual property rights in
any such New Invention in accordance with this Section by causing its employees
and officers to sign and execute such legal documents as the owning Party
determines is necessary for protection of any such New Inventions. Any costs to
obtain patent protection agreed to by Licensee for a New Invention shall be
borne solely by Licensee for so long as Licensee’s License hereunder is
“exclusive” to Licensee.

 

b.     Defense of Intellectual Property. For so long as Licensee’s License
hereunder is “exclusive” to Licensee, Licensee shall have the right to defend or
settle any actions or claims brought by third parties challenging the
Intellectual Property; provided that if Licensor reasonably believes that such
defense or settlement will reduce the value or strength of Licensor's
Intellectual Property, then Licensor shall notify Licensee in writing of same
and if the Parties do not agree on the defense or settlement strategy taken by
Licensee, then Licensor shall assume the defense and settlement of such actions
or claims, with any defense or settlement to be approved by Licensee. The
defending Party shall have the sole discretion and control with respect to any
settlement or defense against any litigation against the validity of the Patents
and shall pay all expenses of all actions that it takes pursuant to this
Section, including without limitation attorneys’ fees. The Parties shall
reasonably cooperate with one another (including executing reasonably necessary
documentation) in order to assist the defending Party in such efforts. The
non-defending Party shall have the right to be kept informed of the status and
progress of all such actions.

 

 
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c.     Third Party Infringement. Licensee shall have the exclusive right, sole
discretion and absolute authority to assert Patent and Intellectual Property
rights against any third party (each, a “Third Party Infringement Action”),
which Licensee shall have no obligation to do, and the sole and exclusive right
to select counsel and control and direct the assertion of all rights and the
prosecution of all such actions brought by Licensee. In any such action
initiated by Licensee, (i) Licensee shall pay all the expenses of such actions
including without limitation attorneys’ fees, (ii) Licensor shall reasonably
cooperate with Licensee (including executing reasonably necessary documentation)
in order to assist Licensee in such efforts so that Licensee can enjoy the
benefits of this Agreement, and (iii) if a party to such action challenges the
validity of the Patents or Intellectual Property rights, Licensee shall have the
right to control and direct the assertion of such defense of the Intellectual
Property, including the selection of counsel; provided that if Licensor
reasonably believes that such defense or settlement will reduce the value or
strength of Licensor's Intellectual Property, then Licensor shall notify
Licensee in writing of same and if the Parties do not agree on the defense or
settlement strategy taken by Licensee, then Licensor shall assume the defense
and settlement of such actions or claims, with any defense or settlement to be
approved by Licensee.

 

d.     If Licensee takes or defends any legal action to protect or preserve the
Intellectual Property, then, in addition to all other remedies available to
Licensee as a result thereof, Licensee shall be permitted to offset against the
next sums due to Licensor from Licensee hereunder the actual costs incurred by
Licensee in the taking of such legal action, including, without limitation,
actual attorneys fees, court and litigation costs, expert witness fees and costs
of appeal, if any, up to a maximum of 50% of any next sums due to Licensor,
subject to the following condition precedent to such obligation: the amounts due
to Licensor for the calendar quarter from Royalties and Sublicensing Fees equal
or exceed $125,000. Licensor shall have the right to be kept informed of the
status and progress of all such actions by Licensee pursuant to this Section.

 

e.     Any recoveries or settlement fees received from suits or settlements
involving an action initiated or defended pursuant to this section or agreed to
shall be paid: (i) first, to Party(ies) that incurred the cost of such action
(including to Licensor to the extent Royalties and Sublicensing Fees were offset
pursuant to Section 10(d)) as reimbursement for the expenses of such action,
including without limitation attorneys’ fees,; and (ii) the balance (if any) to
the Parties , for each Party’s own use and benefit, in the absence of an
allocation agreed to by the Parties or determined by a court or arbiter, to be
allocated between the Parties on an equitable basis as appropriate in order to
compensate each of them for their respective and proportionate loss.

 

11.          Marking of Patents. All Licensed Products, including those produced
pursuant to the rights granted in any Sublicense Agreement, shall have
appropriate patent marking, such as “Patent Pending” or reference to specific
issued patents covering the Licensed Products, pursuant to and in conformance
with the guidelines issued from time to time by Licensor and provided to
Licensee within a reasonable time before any changed guidelines take effect.
Licensee shall consult with and obtain the written approval of Licensor with
respect to any such patent marking. The Parties shall impose the patent marking
obligations of this Section on all Sublicense Agreements.

 

 
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12.          Insurance Requirements. Licensee shall maintain, at Licensee’s
expense, during the period that any Licensed Product is made, used, sold or
otherwise made available by Licensee to others pursuant to this Agreement,
Comprehensive Liability Insurance, including Product Liability Insurance, with a
reputable and financially secure insurance carrier(s) to cover the activities of
Licensee contemplated by this Agreement for minimum limits of one million
dollars ($1,000,000.00) per occurrence. Such insurance shall name Licensor as an
additional insured. Licensee shall furnish a Certificate of Insurance, upon
request, evidencing such coverage with thirty (30) days of written notice of
cancellation or material change to Licensor. Licensee shall at all times comply,
through insurance or self-insurance, with all statutory workers’ compensation
and employers’ liability requirements covering any and all employees with
respect to activities performed under this Agreement. All such liability
insurance policies shall be written as primary policies not contributing with
and not in excess of coverage which Licensor may carry.

 

13.          Events of Default and Termination.

 

a.     This Agreement shall terminate automatically upon the earliest to occur
of the following:

 

i.     Licensee voluntarily files a petition, or has an involuntary petition
filed against it, under the Bankruptcy Act; or enters into any voluntary
assignment for the benefit of its creditors; or appoints, or has appointed on
its behalf, a receiver, liquidator or trustee of or with respect to
substantially all of its property or assets, which petition, assignment or
appointment is not dismissed, terminated or resolved within ninety (90) days
following the commencement thereof;

 

ii.     The expiration of the Term (as may be extended from time-to-time); or

 

iii.     The termination of this Agreement due to an Event of Default in
accordance with the following.

 

b.     The following shall be considered an “Event of Default” by Licensee:

 

i.     Licensee’s fourth (4th) failure to pay the Minimum Payment (to the extent
applicable) due within 30 days after receipt of written notice of failure to
timely pay by of the due date;

 

ii.     Without regard to the Minimum Payment due for a particular Reporting
Period, Licensee’s failure to pay to Licensor during a particular Reporting
Period an amount equal to at least the sum of the Royalty fees due for such
Reporting Period within thirty (30) days of the due date;

 

 
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iii.     Licensee’s failure to deliver to Licensor the Royalty Report due for a
Reporting Period within 30 days of the due date;

 

iv.     Licensee’s assignment of this Agreement in violation of the terms set
forth;

 

v.     Licensee’s failure to maintain appropriate insurance pursuant to the
terms set forth; and,

 

vi.     Licensee’s material breach of any other provision of this Agreement.

 

c.     The following shall be considered an “Event of Default” by Licensor:

 

i.     Licensor’s grant of a license of the Intellectual Property to a third
party in the Field of Use in the Territory during the Term;

 

ii.     Licensor’s loss of any Patent rights;

 

iii.     Licensor’s failure to pay any necessary fees for the continuation of
the Patents;

 

iv.     Licensor voluntarily files a petition, or has an involuntary petition
filed against it, under the Bankruptcy Act; or enters into any voluntary
assignment for the benefit of its creditors; or appoints, or has appointed on
its behalf, a receiver, liquidator or trustee of or with respect to
substantially all of its property or assets, which petition, assignment or
appointment is not dismissed, terminated or resolved within ninety (90) days
following the commencement thereof; and

 

v.     Licensor’s material breach of any other provision of this Agreement.

 

d.     Upon an Event of Default by either Party, the non-breaching Party may, at
its sole option, provide written notice to the breaching Party of such Event of
Default (a “Default Notice”), which Default Notice shall specify in reasonable
detail the nature of the alleged Event of Default and the actions that must be
reasonably taken by the breaching Party to cure same. The breaching Party shall
have a period of thirty (30) days’ following receipt of the Default Notice (the
“Grace Period”) to cure such Event of Default, and no actions shall be taken, or
remedies sought or obtained, by the non-breaching Party as a result of such
Event of Default unless the Grace Period has expired without such Event of
Default having been cured. Notwithstanding the foregoing, if the Event of
Default is of a nature that cannot be reasonably cured within thirty (30) days,
then provided the defaulting Party commences such cure within said thirty (30)
day period and thereafter diligently pursues such cure, the Grace Period shall
be extended as reasonably necessary to allow such cure.

 

e.     In the case of an Event of Default by Licensee which is not cured within
the applicable Grace Period, Licensor shall have the right, as its sole recourse
and remedy against Licensee (but without limiting the indemnity provisions), to
terminate this Agreement by written notice to Licensee and to recover all
Royalty fees and Sublicensing Fees (including the Minimum Payments, if
applicable) due through the termination hereof, and Licensor shall be entitled
to enforce the termination provisions.

 

 
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f.     In the case of an Event of Default by Licensor which is not cured within
the applicable Grace Period, Licensee shall have the right, as its sole recourse
and remedies against Licensor (but without limiting the indemnity provisions),
to (i) terminate this Agreement by written notice to Licensor and to recover all
damages incurred by Licensee as a result thereof, or (ii) keep this Agreement in
effect in accordance with its terms, recover damages incurred by Licensee as a
result of Licensor’s default, and seek and obtain injunctive and other equitable
relief (including specific performance) as appropriate in order for Licensee to
receive the benefits of this Agreement. The foregoing remedies shall, as
applicable and appropriate, be cumulative and not exclusive.

 

14.          Obligations and Rights Upon Termination.

 

a.     Upon termination of this Agreement for any reason, Licensee shall:

 

i.     Use commercially reasonable efforts to promptly return to Licensor all
technical writings, business writings, materials, samples, data, drafts,
proposals, sales information, business information and all other materials
transferred and created during the Term of this Agreement, retaining a
confidential copy of this Agreement (and such materials shall be returned on an
“AS-IS” basis without any representation or warranty as to the accuracy or
usefulness thereof);

 

ii.     Immediately stop all business, sales, marketing, publication, public
disclosure, research and development on technology within the claims of the
then-valid Patents;     

 

iii.     Notwithstanding anything to the contrary contained elsewhere in this
Agreement, have the right to continue any then-current customer agreements and
Sublicense Agreements associated with the Intellectual Property for the
remaining terms of such agreements in accordance with the terms of this
Agreement as if this Agreement had not been terminated, with all proceeds
thereof being deemed either Net Sales Revenue and with Licensor being entitled
to a Royalty fee therein or Sublicensing Fees, as applicable, in accordance with
the terms of this Agreement; and,

 

iv.     Notwithstanding anything to the contrary contained elsewhere in this
Agreement, have the right during the ninety (90) day period following
termination of this Agreement to enter into customer agreements or Sublicense
Agreements for all remaining inventory owned or controlled by Licensee
associated with the Intellectual Property in accordance with the terms of this
Agreement as if this Agreement had not been terminated, with all proceeds
thereof being deemed either Net Sales Revenue and with Licensor being entitled
to a Royalty fee therein or Sublicensing Fees, as applicable, in accordance with
the terms of this Agreement.

 

b.     Upon termination of this Agreement, Licensor shall have no obligation to
refund any payment or fee made to it or received by it under any provision of
this Agreement, regardless of purpose unless there is a bona fide dispute
between with the Parties with respect to such payments or fees.

 

 
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15.           Representations, Warranties and Covenants of Licensor. Each member
of Licensor represents, warrants and covenants to Licensee as follows as of the
Execution Date, the Effective Date and, if applicable, during the Term:

 

a.     Licensor is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, is qualified to
do business in all jurisdictions to which this License applies, and has all
requisite power and authority to own, lease and operate its property and to
carry on its business as now being conducted.

 

b.     Licensor has full power and authority to enter into, execute and deliver
this Agreement and perform its obligations hereunder. This Agreement has been
duly authorized by all necessary corporate action of Licensor. This Agreement
has been duly executed and delivered by Licensor and, assuming this Agreement is
duly executed and delivered by Licensee, constitutes a valid and legally binding
obligation of Licensor enforceable against Licensor in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors’ rights generally, or the availability of equitable
remedies.

 

c.     The execution and delivery by Licensor of this Agreement do not, and
compliance by Licensor with the provisions of this Agreement will not, conflict
with or result in a breach or default under any of the terms, conditions or
provisions of any contract, agreement, arrangement or order of court to which it
is a party or otherwise bound or violate any provision of law to which Licensor
is subject.

 

d.     Licensor has obtained all authorizations, registrations, approvals and
permits required by any governmental body or under any governmental legislation
in connection with Licensor's entry into, and performance of, this Agreement.

 

e.     The Patents are properly filed with the appropriate Patent Office and are
valid and enforceable, as indicated on the attached schedule. The Patents
indicated on the attached schedule constitute all of the patent applications and
patents relating to the Isan System (including, without limitation, all
provisional applications, divisional applications, continuation applications and
modifications). Licensor has the exclusive good, valid and marketable title to
the Patents, Proprietary Property and Intellectual Property sufficient to convey
and grant the License hereunder and to convey the rights and benefits of the
Patents, Proprietary Property and Intellectual Property to Licensee on the terms
contained herein without the need for further consent or approval of any party.

 

f.     There are no actual, outstanding or threatened claims against, claims of
infringement with respect to, or challenges to, the Patents, Proprietary
Property or Intellectual Property or the right of Licensor to use or to license
the Patents, Proprietary Property or Intellectual Property to Licensee by any
third parties, and to the best knowledge of Licensor there are no facts or
circumstances existing as of the Effective Date or the Execution Date that would
give rise to any such claim or challenge in the future.

 

g.     The exercise by Licensee of the rights granted hereunder will not
infringe upon any intellectual property rights of any person, including, without
limitation, patent rights, trademarks or service marks, nor give rise to the
obligation of Licensee to pay any sums to any third party.

 

 
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h.     There is no pending or, to the best knowledge of Licensor, threatened
action (or basis for any action) to which Licensor is a party or involving any
of the Patents, Proprietary Property or Intellectual Property or which could
materially affect Licensor's ability to execute and deliver this Agreement, to
perform its obligations contemplated hereby, or which would have a material
effect upon Licensee's ability to enjoy and retain the benefits of this
Agreement during the Term.

 

i.     Licensor shall immediately notify Licensee in writing as to any
circumstance that could result in the impairment, invalidation or termination of
any of the Patents, Proprietary Property or Intellectual Property or the ability
of Licensee to utilize the Patents, Proprietary Property or Intellectual
Property as contemplated in this Agreement, including, without limitation, any
claims that the Patents, Proprietary Property or Intellectual Property or any
use thereof infringes upon the intellectual property rights of others. Licensor
shall not voluntary undertake, consent to, or permit any actions or course of
conduct by any party that would result in the impairment, invalidation or
termination of the Patents, Proprietary Property or Intellectual Property rights
licensed to Licensee hereunder.

 

j.     EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR, ITS
DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS, CONSULTANTS AND AFFILIATES
MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, AND VALIDITY OF THE CLAIMS OF ANY PATENTS ON THE
TECHNOLOGY ISSUED OR PENDING, OR FREEDOM OF A PRODUCT THAT EMBODIES TECHNOLOGY
FROM INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS, THE ABSENCE OF
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. IN NO EVENT SHALL
LICENSOR, ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES BE LIABLE
FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED
TO ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, WHETHER LICENSOR
SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE
POSSIBILITY OF THE FOREGOING. LICENSOR REPRESENTS AND WARRANTS IN RESPECT TO THE
PATENTS, PROPRIETARY PROPERTY AND INTELLECTUAL PROPERTY THAT IT HAS LEGAL RIGHT
TO EXTEND THE RIGHTS TO LICENSEE, AND THAT IT HAS NOT MADE AND WILL NOT MAKE ANY
COMMITMENTS TO OTHERS INCONSISTENT WITH OR IN DEROGATION OF SUCH RIGHTS.

 

16.           Representations and Warranties of Licensee. Licensee represents
and warrants to Licensor as follows:

 

a.     Licensee is a corporation or a limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization and has all requisite power and authority to own, lease and operate
its property and to carry on its business as now being conducted.

 

 
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b.     Licensee has full power and authority to enter into, execute and deliver
this Agreement and perform its obligations hereunder. This Agreement has been
duly authorized by all necessary corporate action of Licensee. This Agreement
has been duly executed and delivered by Licensee and, assuming this Agreement is
duly executed and delivered by Licensor, constitutes a valid and legally binding
obligation of Licensee enforceable against Licensee in accordance with its
terms, subject to the effect of bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other similar laws relating to or
affecting creditors’ rights generally, or the availability of equitable
remedies.

 

c.     The execution and delivery by Licensee of this Agreement do not, and
compliance by Licensee with the provisions of this Agreement will not, conflict
with or result in a breach or default under any of the terms, conditions or
provisions of any contract, agreement, arrangement or order of court to which
Licensee is a party or otherwise bound.

 

d.     EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSEE, ITS
DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS, CONSULTANTS AND AFFILIATES
MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, AND VALIDITY OF THE CLAIMS OF ANY PATENTS ON THE
TECHNOLOGY ISSUED OR PENDING, OR FREEDOM OF A PRODUCT THAT EMBODIES TECHNOLOGY
FROM INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS, THE ABSENCE OF
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. IN NO EVENT SHALL
LICENSEE, ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES BE LIABLE
FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED
TO ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, WHETHER LICENSEE
SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE
POSSIBILITY OF THE FOREGOING.

 

17.          Confidentiality. From time to time, so long as this Agreement
should be in force or effect, Licensor and Licensee shall execute such
non-disclosure agreements as the other Party may reasonably request from
time-to-time in a form and substance reasonably agreed to by the Parties and in
all cases on terms consistent with this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, Licensee shall not be liable for,
and shall not be required to sign a non-disclosure agreement that prohibits or
restricts, a disclosure of proprietary information of Licensor if the
information so disclosed: (i) was in the public domain at the time of disclosure
without breach of this Agreement; (ii) was known to or contained in the records
of Licensee from a source other than Licensor at the time of disclosure by
Licensor to Licensee and can be so demonstrated; (iii) was independently
developed and is so demonstrated promptly upon receipt of the documentation and
technology by Licensee; (iv) becomes known to Licensee from a source other than
Licensor without breach of this Agreement by Licensee and can be so
demonstrated; (v) must be disclosed pursuant to a contract or subcontract with a
governmental agency in order to obtain/retain a procurement contract; (vi) was
disclosed pursuant to court order, subpoena or as otherwise compelled by law; or
(vii) was otherwise necessary or appropriate in connection with the furthering
of Licensee’s business activities permitted by this License.

 

 
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18.           Indemnification.

 

a.     Licensor Indemnification. Licensor shall defend (with counsel reasonably
acceptable to Licensee), indemnify and hold harmless Licensee and each of its
officers, directors, employees, agents and affiliates, and each of their
successors and assigns (collectively, the “Licensee Indemnified Parties”) from
and against any damages, claims, lawsuits, causes of action, liabilities, costs,
obligations and expenses (including reasonable attorneys’ fees and court costs)
arising out of any breach of its representations or warranties or any claim or
allegation (whether or not proven) by any third party that the Patents,
Proprietary Property or Intellectual Property or Licensee’s use of the Patents,
Proprietary Property or Intellectual Property pursuant to this Agreement,
including, without limitation, the marketing, sale and/or distribution of the
Licensed Products and the Licensed Processes in any Field of Use in the
Territory, infringes upon or violates an intellectual property right or
represents a misappropriation of a trade secret of a third party; provided,
however, that: (i) Licensee shall have promptly provided Licensor with written
notice thereof and reasonable cooperation, information, and assistance in
connection therewith; (ii) Licensor shall have sole control and authority with
respect to the defense, settlement, or compromise thereof (provided in all cases
Licensor shall act reasonably in good faith and in the best interests of
Licensee, and Licensor shall not take any actions or enter into any settlements
or other arrangements that impose any obligations or liabilities, financial or
otherwise, upon Licensee without Licensee's prior written consent); (iii) this
indemnity shall not apply to the extent such damage, liability, cost or expense
results solely from, or is caused solely by, an intentional tortuous act or the
gross negligence of Licensee; and (iv) this indemnity shall not apply to the
extent such damage, liability, cost or expense results solely from any
modifications to the Intellectual Property, Licensed Products, and/or Licensed
Processes made solely by Licensee, unless such modifications have received
written approval by Licensor. Licensee shall have the right to be kept informed
of the status and progress of all such actions undertaken by Licensor pursuant
to this Section and to participate in any such actions.

 

b.     Licensee Indemnification. Licensee shall defend (with counsel reasonably
acceptable to Licensor), indemnify and hold harmless Licensor and each of its
officers, directors, employees, agents and affiliates, and each of their
successors and assigns (collectively, the “Licensor Indemnified Parties”) from
and against any damages, claims, lawsuits, causes of action, liabilities, costs,
obligations and expenses (including reasonable attorneys’ fees and court costs)
arising out of any breach of its representations or warranties or any claim or
allegation by any third party relating to the commercial sale and/or use,
clinical or otherwise, of the Licensed Products or Licensed Processes by
Licensee, its sublicensees, or any customers of any of them in any manner
whatsoever; provided, however, that: (i) Licensor shall have promptly provided
Licensee with written notice thereof and reasonable cooperation, information,
and assistance in connection therewith; (ii) Licensee shall have sole control
and authority with respect to the defense, settlement, or compromise thereof
(provided in all cases Licensee shall act reasonably in good faith and in the
best interests of Licensor, and Licensee shall not take any actions or enter
into any settlements or other arrangements that impose any obligations or
liabilities, financial or otherwise, upon Licensor without Licensor's prior
written consent); (iii) this indemnity shall not apply to the extent such
damage, liability, cost or expense results solely from, or is caused solely by,
an intentional tortuous act or the gross negligence of Licensor; and (iv) this
indemnity shall not apply with respect to items covered by Licensor’s indemnity
obligations to Licensee. Licensor shall have the right to be kept informed of
the status and progress of all such actions undertaken by Licensee pursuant to
this Section and to participate in any such actions.

 

 
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19.          Right of First Refusal. Each Party hereby grants the other Party
first right of refusal to match any offer to purchase that Party’s right in the
Intellectual Property. If a Party (the selling Party) receives an offer for the
acquisition of that Party’s right in the Intellectual Property from a third
party, it shall notify the other Party (the non-selling Party) of such third
party offer, and it shall offer the other Party the same terms and conditions
for such acquisition. If the non-selling Party determines not to acquire such
rights in the Intellectual Property, or if the Parties are unable to complete
such acquisition in good faith within ten (10) business days of the selling
Party’s delivery of the terms and conditions to the non-selling Party, then the
selling Party may pursue the sale to the third party. If the third party does
not complete the acquisition, then the provisions in this Section will continue
to repeat.

 

20.          General Provisions.

 

a.     Notices. All Notices, requests and other communications that a Party is
required or elects to deliver shall be in writing and shall be delivered
personally, or by facsimile, or by a recognized overnight courier service, to
the other Party at its address set forth below or to such other address as such
Party may designate by notice given pursuant to this Section:

 

If to Licensor:       BioLargo, Inc.

3500 W. Garry Ave.

Santa Ana, CA 92704 

Facsimile: (949) 625-9819

 

If to Licensee:      Clarion Water

3530 W. Garry Ave.

Santa Ana, CA 92704 

Facsimile: (714) 352-2302

 

All such notices, requests and other communications will: (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery; (ii) if delivered by facsimile transmission to the facsimile number as
provided for in this Section, be deemed given upon facsimile confirmation; and
(iii) if delivered by messenger or courier to the address as provided in this
Section, be deemed given on the earlier of the first business day following the
date sent by such messenger or courier or upon receipt. A Party from time to
time may change its address, facsimile number or other information for the
purpose of notices to that Party by giving notice specifying such change to the
other Parties hereto.

 

b.     Publicity. Except as is otherwise necessary or appropriate in connection
with the furthering of Licensee’s business activities permitted by this
Agreement, neither Party shall issue any public announcement regarding this
Agreement, or which contains the name of the other Party, without giving prior
reasonable notice to the other Party, and receiving written approval thereon
which shall not be unreasonably withheld or delayed; provided, however, that (i)
a Party may withhold its approval in its sole and absolute discretion and (ii)
written approval from a Party shall not be required for any disclosures that are
required or which counsel advises are required by applicable law, including
without limitation Federal securities laws, in which instance, the announcing
Party shall so notify the other Party as reasonably promptly as commercially
possible.

 

 
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c.     Entire Agreement. This Agreement contains the sole and entire agreement
and understanding of the Parties with respect to the entire subject matter of
this Agreement, and any and all prior discussions, negotiations, commitments and
understandings, whether oral or otherwise, related to the subject matter of this
Agreement are hereby merged herein and shall be of no further force or effect.

 

d.     Waiver and Amendment. No provision of this Agreement may be waived unless
in writing signed by all the Parties to this Agreement, and waiver of any one
provision of this Agreement shall not be deemed to be a waiver of any other
provision. This Agreement may be amended only by a written agreement executed by
all the Parties to this Agreement.

 

e.     Severability. Whenever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be or become prohibited or invalid
under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

 

f.     Captions. The various captions of this Agreement are for reference only
and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.

 

g.     Costs and Attorneys Fees. If any action, suit, arbitration or other
proceeding is instituted to remedy, prevent or obtain relief from a default or
breach by any Party under this Agreement, the prevailing Party shall be entitled
to recover all of such Party’s reasonable attorneys’ fees incurred in each and
every such action, suit, arbitration or other proceeding, including any and all
appeals or petitions therefrom. 

 

h.     Rights Cumulative. Except as expressly provided to the contrary elsewhere
in this Agreement, no right granted to the Parties under this Agreement on
default or breach is intended to be in full or complete satisfaction of any
damages arising out of such default or breach, and each and every right under
this Agreement, or under any other document or instrument delivered hereunder,
or allowed by law or equity, shall be cumulative and may be exercised from time
to time.

 

i.     Judicial Interpretation. Should any provision of this Agreement require
judicial interpretation, it is agreed that a court interpreting or construing
the same shall not apply a presumption that the terms hereof shall be more
strictly construed against any person by reason of the rule of construction that
a document is to be construed more strictly against the person who itself or
through its agent prepared the same, it being agreed that all Parties have
participated in the preparation of this Agreement.

 

 
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j.     Force Majeure. If any Party to this Agreement is delayed in the
performance of any of its obligations under this Agreement or is prevented from
performing any such obligations due to causes or events beyond its control
(financial inability excepted), including, without limitation, acts of God,
fire, flood, war, terrorism, earthquake, strike or other labor problem,
injunction or other legal restraint, present or future law, governmental order,
rule or regulation, then such delay or nonperformance shall be excused and the
time for performance thereof shall be extended to include the period of such
delay or nonperformance.

 

k.     Assignment and Transfers. Neither Party may assign or delegate either
this Agreement or any of its rights, interests, or obligations hereunder without
the prior written approval of the other Party, except in the event of a merger,
reorganization or sale of all or substantially all of a Party’s business, assets
or equity. Subject to the foregoing, this Agreement shall be binding upon and
shall inure to the benefit of the Parties hereto and their respective successors
and permitted assigns.

 

l.     Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement and shall become
effective when one or more counterparts have been signed by each of the Parties
and delivered to the other Party, it being understood that all Parties need not
sign the same counterpart.

 

m.     Qualification; Authority. Each individual executing this Agreement on
behalf of a partnership, corporation, limited liability company or as trustee of
a trust represents and warrants that he or she is duly authorized to execute and
deliver this Agreement on behalf of such entity (and that no additional
signatures on behalf of such entity are required in order for this Agreement to
be binding). Upon request of either Party, the other Party agrees to deliver
such documents reasonably necessary to evidence the foregoing.

 

n.     No Partnership. Nothing contained herein shall create or be deemed to
have created a partnership or joint venture of any kind between the Parties, or
the relationship of principal and agent between the Parties.

 

o.     Further Assurances. The Parties shall undertake such additional and
further actions, and execute such additional documents and instruments, as may
be reasonably necessary or appropriate to provide each Party with the intended
benefits of this Agreement.

 

p.     Survival of Covenants. Sections 4, 5, 8, 9 (for one year after the final
payment during the Term), 10, 14, 18 and 20 shall survive expiration of the
Term.

 

q.     Schedules and Exhibits. All schedules and exhibits referred to in this
Agreement are attached hereto and incorporated herein by this reference.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 

 
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IN WITNESS WHEREOF, the Parties have executed this License Agreement as of the
date set forth above.

 

Licensor

BIOLARGO, INC.

/s/DENNIS P. CALVERT

 

Licensee

InsulTech Manufacturing, LLC d/b/a Clarion Water

/s/THOMAS BERCAW

By: Dennis P. Calvert

Title: President

8/11/2014

 

PETER HOLDINGS LTD.

/s/JARED FRANKENSTEIN           

 

By: Thomas Bercaw

Title: President

8/12/2014

Jared Frankenstein, Director

8/11/2014

   

 

 

 
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EXHIBIT "A"

 

Schedule of Patents/Patent Application, Ioteq IP Pty Ltd

 

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