ex102.htm


    Exhibit
      10.2

     

     

    ROYALTY
      AGREEMENT This agreement is made and entered into by and between Sparx Inc.,
      a
      corporation organized and existing under the laws of the State of Florida and
      have an address at 1358 Fruitville Road, Suite 209, Sarasota FL 34236 ("SPARX")
      and Sologic, Inc., a corporation organized and existing under the laws of the
      State of Delaware and having its principal place of business at 1358 Fruitville
      Road, Suite 209, Sarasota, FL 34236 ("SOLOGIC").

    


    WITNESSETH:

    


    WHEREAS,
      SPARX has assigned to SOLOGIC the Patent(s) (as hereinafter defined);
      and
      the inventions created using those rights pursuant to an Assignment of even
      date
      herewith; and

    


    WHEREAS,
      SPARX and SOLOGIC desires to set forth their agreement with regard to
      royalty payments to be paid by SOLOGIC to SPARX with regard to the
      Patent(s).

    


    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements set
      forth herein, and other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties hereto agree as
      follows:

    


    1.
      DEFINITIONS

    


    For
      purposes of this Agreement, the following terms shall have the meanings ascribed
      to them in this Section 1.

    


    a.
      Gross Revenues shall mean gross revenues of SOLOGIC from all
      sources, determined in accordance with generally accepted accounting principles,
      as reflected on the income statement of SOLOGIC prepared in accordance with
      generally accepted accounting principles and furnished to SOLOGIC's shareholders
      or to the public; provided, however, that if no such income statement
      is prepared by SOLOGIC, then an income statement prepared in accordance with
      Section 4 of this Agreement.

    


    b.
      Invention(s) means Substrate With Light Display; described in
      U.S. Patent Application No. 60/608,783, U.S. Patent Application No.
      11/219,164 U.S. Patent Application No. 60/617,263 and U.S. Patent Application
      No. 60/804,224 and any related patents or patent applications.

    


    c.
      Patent(s) shall mean any and all patents granted to SPARX
      pertaining to the Invention(s), as defined herein, including U.S, or foreign
      patents and any other corresponding foreign patent applications and any patents
      which may be granted thereon including any and all patents granted on
      substitutes, divisions, continuations, continuations-in-part, reissues and
      extensions of said patents.

      

    d.
      Products shall mean those which embody the Invention(s) or come
      within a claim of any of the Patent(s) whether sold or otherwise disposed of
      in
      an assembled or unassembled condition, parts associated therewith, and other
      components.

     

     

    
      
        
        

      

      
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    e.
      Royalty or Royalties shall mean revenues received in the form
      of cash, property and/or equity securities from SOLOGIC as a result of licensing
      and using, selling, making, having made, Invention(s).

    


    2.
      PAYMENTS FOR PATENT RIGHTS.

    a.
      In
      consideration for the transfer and sale of the Patent(s), SOLOGIC hereby grants
      to cash royalty payments shall be made to SPARX on a quarterly basis, no later
      than the 15th day after the end of each fiscal quarter in which a royalty
      payment is due under this Agreement; provided, however, that at any
      time when SOLOGIC prepares audited year- end financial statements, then the
      royalty payment due after the end of the fiscal year shall not be due until
      the
      earlier of (a) the date on which the audited financial statements are first
      released to the public, or (b) 45 days after the end of the fiscal year. The
      amount of the royalty payment shall be determined according to Exhibit 3(b)
      hereto, which is attached hereto and made a part hereof. The parties expressly
      acknowledge and agree that the amount of the royalty payment may be modified
      in
      the same manner as this Agreement may be modified and that, if such a
      modification is made, then they shall attach a revised Exhibit 3 hereto setting
      forth the new calculation and the date as of which it is to be
      effective.

    


    b.
      Under
      this Agreement, Products shall be considered sold when billed to a customer,
      except that upon expiration of any Patent or upon any termination of this
      Agreement, all shipments made on or prior to the date of such expiration or
      termination which have not been billed prior thereto shall be considered as
      sold
      and therefore subject to any royalty due.

    


    c. The
      royalty payments due under this Agreement shall be in consideration for the
      sum
      total of all rights conferred by SPARX to SOLOGIC hereunder.

    


    3.
      REPRESENTATIONS

    


    a.
      By SOLOGIC. SOLOGIC hereby represents and warrants to SPARX
      that

    


    i. This
      Agreement and each of the agreements and other documents and instruments
      delivered or to be delivered by SOLOGIC pursuant to or in contemplation of
      this
      Agreement will constitute, when so delivered, the valid and binding obligation
      of SOLOGIC and shall be enforceable in accordance with their respective
      terms;

    


    ii.
      SOLOGIC a corporation in good standing, duly organized and validly existing
      under the laws of the State of Delaware;

    


    iii.
      The
      execution and delivery of this Agreement has been duly authorized by all
      necessary corporate action; and

     

    iv. The
      shares issuable upon payment of a Royalty payment in stock shall be, when
      issued, duly issued, fully paid and nonassessable shares of common stock of
      SOLOGIC and shall be free and clear of all liens and encumbrances of any kinds
      whatsoever, including but not limited to, security interests and preemptive
      rights.

     

     

    
      
        
        

      

      
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    b. By
      SPARX. SPARX hereby represents and warrants to SOLOGIC
      that

    


    i. This
      Agreement and each of the agreements and other documents and instruments
      delivered or to be delivered by SPARX pursuant to or in contemplation of this
      Agreement will constitute, when so delivered, the valid and binding obligation
      of SPARX and shall be enforceable in accordance with their respective
      terms;

    


    ii.
      It is
      a corporation in good standing, duly organized and validly existing under the
      laws of the State of Florida; and

    


    iii. The
      execution and delivery of this Agreement have been duly authorized by all
      necessary corporate action.

      

    c. Nothing
      in this Agreement shall be construed as

      

    i. A
      warranty or representation by SPARX as to the validity or scope of the Patent(s)
      or any patent application relating thereto; or

    


    ii. A.
      warranty or representation by SPARX that anything made, used, sold or otherwise
      disposed of under any license granted in this Agreement is or will be free
      from
      infringement of patents or third party rights; or

    


    iii. An
      obligation of SPARX to bring or prosecute actions or suits against third parties
      for infringement (except to the extent and in the circumstances set forth in
      Section 11 hereof); or

    


    iv. Granting
      by implication, estoppel, or otherwise, any licenses or rights under patents
      of
      SPARX other than the Patent(s).

      

    d. SPARX
      makes no representations, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS
      OR
      IMPLIED, and assumes no responsibilities whatever with respect to the use,
      sale,
      or other disposition by SOLOGIC or its vendees or other transferees of products
      incorporating or made by use of (i) Inventions licensed under this Agreement
      or
      (ii) information if any, furnished under this Agreement.

    


    4.
      REPORTS, BOOKAND RECORDS.

    


    a.
      SOLOGIC agrees to keep records of its manufacture, use, sale or other
      disposition of Products
      with respect to which royalty payments hereunder are to be in sufficient detail
      to enable the royalties payable hereunder by SOLOGIC to be accurately determined
      and further agrees to permit its books and records to be examined from time
      to
      time, to the extent necessary to verify the reports provided for in this Section
      5l, such examination to be made at the expense of SPARX by any agent or auditor
      appointed by SPARX who shall be acceptable to SOLOGIC.

    


    b.
      At the
      time a royalty payment is made under this Agreement, SOLOGIC shall furnish
      to
      SPARX a written report setting forth the number and description of the Products
      manufactured and thereafter used, sold or otherwise disposed of under the
      license granted herein during the period to which the report relates, along
      with
      a copy of the income statement of SOLOGIC for such period.

     

     

    
      
        
        

      

      
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    c.
      SOLOGIC also agrees to make a written report to SPARX within thirty (30) days
      after the date of any termination of this Agreement, stating in such report
      the
      number and description of the Products manufactured and thereafter used, sold
      or
      otherwise disposed of and not previously report to SPARX.

    


    5.
      MARKING

    


    SOLOGIC
      agrees to mark or have marked all Products made, used or leased by it under
      the
      Patent(s), if and to the extent such marking shall be practical, with such
      patent markings as shall be desirable or required by applicable patent
      laws.

    


    6.
      Indemnity

    SOLOGIC
      shall hold SPARX harmless against all liabilities, demand, damages, expense,
      or
      losses of any kind arising out of (i) use by SOLOGIC or its transferees of
      inventions licensed or information furnished under this Agreement, or (ii)
      any
      use, sale or other disposition by SOLOGIC or its transferees of products made
      by
      use of such inventions or information.

    


    7.
      MISCELLANEOUS

    


    a.
      Taxes.
      Any taxes in the nature of a sales or transfer tax of any kind payable on the
      execution of this Agreement shall be paid by SOLOGIC.

      

    b. Assignability.
      Neither this Agreement nor any rights or obligations hereunder, are assignable
      by any party hereto without the prior written consent of the other party hereto.
      The obligations of SOLOGIC hereunder shall be binding upon any successor of
      SOLOGIC through name change, merger, consolidation, or
      reorganization.

    


    c.
      Section Headings. The Section and paragraph headings in this Agreement are
      for
      convenience of reference only and shall not be deemed to alter or affect
      provisions thereof. All Exhibits and/or Schedules hereto shall be initialed
      for
      identification or may be physically annexed hereto, but in either event such
      Exhibits or Schedules shall be deemed to be a part hereof.

     

     

    
      
        
        

      

      
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    d. Waiver.
      Neither the failure nor any delay on the part of any party hereto in exercising
      any right~ power or remedy hereunder shall operate as a waiver thereof, or
      of
      any other right; power or remedy or preclude any further or other exercise
      thereof; or the exercise of any other right, power or remedy.

      

    e. Expenses.
      Except as otherwise provided herein, SPARX and SOLOGIC shall pay the fees and
      expenses of their respective accountants and legal counsel incurred in
      connection with the transactions contemplated by this Agreement.

      

    f. Notices.
      Any notices required or permitted to be given hereunder shall be given, in
      writing and delivered in person or sent certified mail, postage prepaid, return
      receipt requested, or via facsimile, to the respective parties to the following
      addresses (or at such other addresses as may hereinafter be designated by such
      party in writing to other parties):

    


    If
      to
      SPARX:

    


    Sparx,
      Inc.

    1358
      Fruitville Road Suite 209

    Sarasota,
      FL 34236

    Attention:
      Carl L. Smith, III, President

    


    


    If
      to
      SOLOGIC:

    


    Sologic,
      Inc.

    1358
      Fruitville Road Suite 209

    Sarasota,
      FL 34236

    Attention:
      Carl L. Smith, III, Chairman and CEO

    


    g. Governing
      Law. This Agreement shall be governed by and construed in accordance with the
      laws of the United States and the State of Florida.

      

    h. No
      Partnership. The parties do not intend this Agreement to create a joint venture,
      partnership or any similar business relationship between them.

      

    i. Entire
      Agreement. This Agreement contains the entire agreement between the parties
      hereto with respect to the transaction contemplated herein and shall not be
      modified or amended except by an instrument in writing signed by the parties
      hereto.

    


    j. Validity.
      The invalidity or unenforceability of any particular provision of this Agreement
      shall not affect any other provisions hereof, and this Agreement shall be
      construed in all other respects as if such invalid and unenforceable
      provisions were omitted.

    


    k. Amendment.
      This Agreement may not be amended or modified except by a written instrument
      executed by SOLOGIC and SPARX.

     

     

    
      
        
        

      

      
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    l.
      Counterparts. This Agreement may be signed in any number of counterparts each
      of
      which shall be deemed to be an original and all of which together shall
      constitute but one and the same instrument.

    


    m.
      Effective Date of Agreement. The parties hereto intend that this Agreement
      shall
      be effective as of December 20, 2005 and shall supersede and replace any
      agreements relating to the subject hereof entered into on or since that
      date.

    


    IN
      WITNESS WHEREOF, this Agreement has been executed on behalf of the parties
      hereto be effective as of the date first above written.

    


    


    SPARX

    SPARX,
      INC a Florida
      corporation

    


    BY:________________________

    Carl
      L. Smith, III,
      President

    


    


    SOLOGIC

    SOLOGIC
      INC., a Delaware
      corporation

    


    BY:________________________

    Carl
      L
      Smith, III, Chairman and CEO

    


    
      
        
        

      

      
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    EXHBIT
      3(a)

    


    CALCULATION
      OF ROYALTY PAYMENT

    The
      royalty payment due pursuant to Section 3 of the Royalty Agreement between
      Sparx, Inc. and Sologic; Inc. shall be computed as follows:

    


    4.9%
      of Gross Revenues of SOLOGIC

    


    For
      purposes of this calculation~ Gross Revenues shall be defined in the manner
      set
      forth in the Agreement.

    


    Royalty
      Payments shall be made in cash unless SPARX shall notify SOLOGIC, on or before
      last day of any fiscal quarter, of SPARX's intention to take the royalty payment
      in shares of common stock of SOLOGIC ("Shares”). In the event SPARX elects to
      take shares rather than cash, the number of shares to be issued shall be
      calculated as follows:

    


    RP
 ̧
      X= Number of
      shares, where

    RP
      = the
      total royalty payment due to SPARX

    


    and

    


    X
      = the
      greater of $.10 or, if the Shares are listed on either the NASDAQ
      National

    


    Market
      System or on the New York Stock Exchange, then the average of the closing sale
      price of a Share on such exchange for the five trading days immediately
      preceding the end of the fiscal quarter for which the royalty payment is being
      made

    


    One
      or
      more stock certificates representing the Shares to be issued shall be delivered
      to SPARX on or before the date on which the royalty payment is required to
      be
      made under the terms of the Agreement.

     

     

     

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