Document:

mod_ex106.htm

Exhibit 10.6

 

AGREEMENT REGARDING LOAN DOCUMENTS

 

THIS AGREEMENT REGARDING LOAN DOCUMENTS (this “Agreement”) is entered into as of January ___, 2015, by and between NATURALSHRIMP HOLDINGS, INC., a Delaware corporation, (“Borrower”), and MULTIPLAYER ONLINE DRAGON, INC., a Nevada corporation (“MOD”).

 

WHEREAS, Amarillo National Bank (“ANB”), Borrower, NaturalShrimp Corporation, a Delaware corporation (“NSC”), NaturalShrimp Global, Inc., a Delaware corporation formerly known as NaturalShrimp International, Inc. (“NSI”), Natural Shrimp San Antonio, L.P., a Texas limited partnership, Shirley Williams, Gerald Easterling and Mary Ann Untermeyer, and High Plains Christian Ministries Foundation, are or were parties to that certain Business Loan Agreement dated September 13, 2005, as amended and modified by the certain Consent Agreement, dated as of October 13, 2006, by and among the same parties (collectively, the “Business Loan Agreement”), pursuant to which Borrower issued to ANB a secured promissory note, dated September 13, 2005, in the original principal amount of $1,500,000, (such secured promissory note, as modified as provided below, the “Note”);

 

WHEREAS, subsequent to the closing of the Business Loan Agreement, the Note was modified (i) by that certain Change In Terms Agreement dated September 16, 2006, whereby the principal amount of the Note was increased to $2,000,000 and the maturity date was extended to September 13, 2008, and (ii) on September 13, 2008 to extend the maturity date of the Note to September 15, 2009;

 

WHEREAS, Borrower’s obligations under the Note are secured by: (i) security interests granted pursuant to that certain Security Agreement dated September 13, 2005; (ii) Subordination Agreements dated September 13, 2005 entered into by the limited partners of Natural Shrimp San Antonio, L.P. for the benefit of ANB; and (iii) Pledge Agreements dated September 13, 2005 entered into by Borrower and certain shareholders of Borrower for the benefit of ANB (collectively, the “Security Documents”);

 

WHEREAS, ANB and Baptist Community Services, a Texas non-profit corporation (“BCS”), are parties to that certain Assignment Agreement dated March 26, 2009, pursuant to which ANB assigned and transferred to BCS all of ANB’s right, title and interest in and to (i) the Note, including all moneys now due or hereafter to become due to ANB under the Note; (ii) the Business Loan Agreement and (iii) the Security Documents;

 

WHEREAS, Borrower issued to BCS a subordinated promissory note, dated December 31, 2008, in the original principal amount of $70,000 and with a maturity date of September 15, 2009 to provide working capital to Borrower for its use to pay interest due under the Note, taxes, and premiums for insurance policies covering its assets (such subordinated promissory note, as modified on April 7, 2009, collectively with the Note, the “Notes”; the Notes, collectively with the Security Documents, the Business Loan Agreement and all other documents and agreements relating to the Business Loan Agreement, the “Loan Documents”);

 

WHEREAS, as described in the letter sent by BCS’s counsel to Borrower on August 12, 2009, all obligations owed by Borrower under the Notes were payable and due in full on September 15, 2009, and, as described in the letter from BCS’s counsel to Borrower dated January 25, 2010, Borrower did not satisfy its obligations under the Notes on or before September 15, 2009 and all of Borrower’s obligations under the Notes, including, but not limited to, principal, accrued interest, fees and expenses remain past-due and payable in full (the “Existing Event of Default”);

 

WHEREAS, Borrower and BCS entered into a Forbearance Agreement, dated as of January 15, 2010, pursuant to which BCS agreed to forbear the exercise of its rights and remedies arising under the Loan Documents as a result of the Existing Event of Default until January 25, 2011;

 

WHEREAS, Borrower and BCS entered into a Second Forbearance Agreement dated as of March 30, 2011, pursuant to which BCS agreed to forbear the exercise of its rights and remedies arising under the Loan Documents as a result of the Existing Event of Default until March 30, 2012;

 

WHEREAS, Borrower and BCS entered into a Third Forbearance Agreement dated as of March 30, 2012, pursuant to which BCS agreed to forbear the exercise of its rights and remedies arising under the Loan Documents as a result of the Existing Event of Default until March 30, 2013;

 

WHEREAS, Borrower and BCS entered into a Fourth Forbearance Agreement dated as of March 30, 2013, pursuant to which BCS agreed to forbear the exercise of its rights and remedies arising under the Loan Documents as a result of the Existing Event of Default until March 30, 2015; and

 

WHEREAS, concurrently herewith, Borrower, MOD and BCS are entering into a Fifth Forbearance Agreement (herein so called), pursuant to which, among other things, BCS provides its consent under the Loan Documents for a proposed transaction (the “Transaction”) between Borrower and MOD, whereby Borrower will acquire approximately seventy two percent (72%) of the issued and outstanding stock of MOD as consideration for the acquisition by MOD from Borrower of all of the issued and outstanding stock of Borrower’s wholly owned subsidiaries, NSC and NSI, over which BCS has a security interest pursuant to the Loan Documents.

 

  

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WHEREAS, pursuant to the Fifth Forbearance Agreement, MOD is entering into a Stock Pledge Agreement of even date herewith, pursuant to which MOD pledges all of its capital stock in NSC and NSI.

 

NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1. Defined Terms; References.  Unless otherwise stated in this Agreement, capitalized terms used but not defined herein shall have the meanings assigned to such terms (directly or by reference) in the Fifth Forbearance Agreement.  References to any Loan Document shall include every valid renewal, extension, amendment, modification, supplement, restatement, replacement or substitution of or for such Loan Document.

 

2. Representations, Warranties and Covenants.

 

(a) Borrower hereby represents and warrants to MOD that (i) this Agreement has been duly executed and delivered by Borrower, (ii) no action of, or filing with, any governmental authority is required to authorize, or is otherwise required in connection with, the execution, delivery, and performance by Borrower of this Agreement, (iii) this Agreement is valid and binding upon Borrower and is enforceable against Borrower in accordance with its terms, except as limited by any applicable debtor relief laws, (iv) the execution, delivery and performance by Borrower of this Agreement do not require the consent of any other person or entity and do not and will not constitute a violation of any laws, regulations, agreements or understandings to which Borrower is a party or by which Borrower is bound, (v) the representations and warranties contained in the Fifth Forbearance Agreement, the Business Loan Agreement and any other Loan Document are true, correct and complete in all material respects as of the date of this Agreement, and (vi) as of the date of this Agreement, no event of default (other than the Existing Event of Default) and no event or condition that with the giving of notice or lapse of time or both would be an event of default exists under the Business Loan Agreement, the Notes or the other Loan Documents.

 

(b) Borrower hereby covenants to MOD that during the term of this Agreement:

 

(i) Borrower shall promptly pay and perform all of its covenants and obligations under the Fifth Forbearance Agreement, the Business Loan Agreement, the Notes and each of the other Loan Documents.

 

(ii) Borrower shall not cause or permit the occurrence of any event of default (other than the Existing Event of Default) under the Business Loan Agreement, the Notes or the other Loan Documents.

 

(iii) Borrower shall not, and shall not permit any other party to, amend, modify, transfer or assign this Agreement, the Fifth Forbearance Agreement, the Business Loan Agreement, the Notes or any of the other Loan Documents without the prior written consent of MOD.

 

(iv) Borrower shall immediately notify MOD of any breach of this Agreement or any provision hereof.

 

3. Counterparts.  This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.  A signature to this Agreement transmitted electronically shall have the same authority, effect, and enforceability as an original signature.

 

4. Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

 

5. Term of Agreement; Reinstatement.  This Agreement shall remain in full force and effect until all indebtedness, obligations and liabilities of Borrower under the Fifth Forbearance Agreement, the Business Loan Agreement, the Notes and the other Loan Documents (the “Obligations”) have been paid and performed in full.  The obligations of Borrower under this Agreement shall continue to be effective or be reinstated, as the case may be, if at any time all or part of any payment of any of the Obligations is rescinded or must otherwise be returned by BCS or any other person or entity upon the insolvency, bankruptcy or reorganization of Borrower or any of the other NS Entities or otherwise.

 

6. Parties Bound.  This Agreement binds and inures to the benefit of Borrower, MOD and their respective successors and assigns.

 

7. Entirety.  THIS AGREEMENT, THE BUSINESS LOAN AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE SCHEDULES AND SUPPLEMENTS THERETO REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES FOR THE TRANSACTIONS THEREIN, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

 [Remainder of page intentionally left blank.  Signature page follows.]

 

  

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.

 

NATURALSHRIMP HOLDINGS, INC.

 

By:                                                                      

 

Name:                                                                      

 

Title:                                                                      

 

Address:                2068 N. Valley Mills Drive

Waco, Texas  76110

MULTIPLAYER ONLINE DRAGON, INC.

 

By:                                                                      

 

Name:                                                                      

 

Title:                                                                      

 

Address:                9477 Greenback Lane, Suite 524A

Folsom, CA 95630

3mod_ex107.htm

Exhibit 10.7

 

EXCLUSIVE RIGHTS AGREEMENT

 

This Rights Agreement (the “Rights”) is entered into this ____ day of August, 2014 by and between NaturalShrimp Holdings, Inc., a Delaware corporation (“NSH”) and its subsidiaries NaturalShrimp Corporation (“NSC”) and NaturalShrimp Global, Inc. (“NSG”) with its principal place of business at 2068 N. Valley Mills Drive, Waco, Texas 76710-2561, F&T Water Solutions, LLC, a Florida Limited Liability Company (“F&T) with its principal place of business 190 Spanish River Blvd., Boca Raton, FL 33431.  The parties are collectively referred to as the “Parties” and singularly, a “Party.”

 

Recitals

 

a.           Reference is made to the continued development of an enclosed, recirculating shrimp-growing technology (the technology) to be co-developed by the parties beginning July ___ 2014, at R&D facility of NSC, located in La Coste Texas.

 

b.           Reference is further made to formation of a Joint Venture Agreement (“Members Agreement”) which contemplates the formation of Natural Aquatic Systems, LLC (“NAS”), a new entity to be domiciled in Texas, to exploit a joint development for use of enclosed recirculating aquatic systems.

 

c.           The agreement further contemplates the preparation and execution of this Exclusive Rights Agreement for NSH and its subsidiaries to implement and use for commercial purpose any new, enhanced F&T water systems designed to improve the existing shrimp growing technology of NSH (as described below), New Technologies used or useful in the growing of shrimp, hatcheries and other enhancements developed by either Party; and

 

d.           This Agreement is intended to apply only with respect to use and exploitation of the shrimp growing technology.

 

Agreements

 

NOW, THEREFORE, for and in consideration of the mutual promises and obligations set forth herein, the Parties, intending to be legally bound, hereby agree as follows:

 

Article 1: Definitions

 

1. Definitions.  Subject to the terms and conditions used herein shall have the meaning set forth in this Section 1:

 

1.1. Shrimp Technology shall mean any and all inventions and intellectual property of NSH and its subsidiaries used in its current aquaculture and self-contained eco-systems for the growing and marketing of aquatic species, software designed to monitor and control such eco-systems and shall include but not limited to all Improvements, enhancements and Know-How as defined below.

 

1.2. New Improvements shall mean demonstrable F&T improvements and Know-How designed, created and implemented between the effective dates utilizing the F&T electro coagulation process.  It shall also mean improvements and enhancements to the Shrimp Technology, whether or not patentable, conceived or acquired by either Party or to which either Party obtains rights which it can provide to the other without obligation to third parties, including changes made for the purpose of improving the operation, efficiency and marketing.  The term “Improvements” does not include simple or minor modifications to the Shrimp Technology.

 

1.3. Know-How shall mean the engineering, design, and operational techniques possessed by NSH and its subsidiaries relating to the specifications (including specifications for the ingredients needed for the growing of aquatic species), design, construction, and operational performance of the Shrimp Technology, which are applicable within the field of aquaculture and self-contained eco-systems for the growing and marketing of shrimp, including hatcheries.  The Know-How shall specifically include, but not be limited to Facility Construction Manuals, Facility Operational Manuals, and any local, state or federal governmental Rights or permits held, or hereinafter acquired.  Know-How shall also include any information obtained by NSH and its subsidiaries through advisory personnel concerning the specifications, design, construction, and operational performance of the Shrimp Technology.  All manuals and all other documents developed by NSH and its subsidiaries, being part of the Know-How, must be created, maintained and revised according to such system.  Know-How shall also mean any publicity material developed by NSH and its subsidiaries concerning the marketing, sale and/or distribution of the Shrimp.

 

1.4. Rights shall mean, the right to use, enhance, improve and exploit the F&T Technologies by NSH and its subsidiaries.

 

  

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1.5. New Technology shall mean a fully documented change, modification or development to the Shrimp Technology using the F&T electro coagulation process to increase NSC shrimp harvest survival.

 

Article 2: Phase One Test

 

2. La Coste Test.

 

2.1. Test Period.  Twelve weeks from the F&T systems connection and full operation of the NSH shrimp tank, providing the parties a direct comparison to the original 2012 electrocoagulation test.

 

2.2. Successful Test.....SEE EXHIBIT A

 

2.3. Equipment Cost.  The Parties understand that to evaluate costs providing a good return on investment for the parties.  The F&T electro coagulation equipment will have to be modified for NSC standard production requirements as determined during the first phase testing.

 

2.4. Costs.  Each Party shall be responsible for its own costs, expenses, risks and liabilities arising out of its obligations under this test and the conduct of its operations, including costs related to the protection of intellectual property rights, confidential and proprietary information.

 

2.5. Exclusive Rights.  Based on a successful test, NSH and its subsidiaries shall have the exclusive right to use in perpetuity the final design of the enclosed, recirculating shrimp system to incorporate the F&T Technology in the NSH shrimp growing Technology.

 

2.6. License.  Upon completion of a Successful Test as described herein, the rights granted herein may, at the request of either party, be incorporated into a separate license agreement.

 

Article 3: Confidentiality

 

3. Confidentiality.  It is specifically understood and agreed that the Shrimp Technology, the Improvements, the New Technologies and Existing Improvements (the “Confidential Information”) are strictly confidential and may not be disclosed to any third party without the express written consent of the other Party.  Notwithstanding the foregoing, it is further agreed that the Confidential Information may be disclosed to prospective investors, a proposed licensee or sub-licensee as long as an enforceable confidentiality/non-disclosure and non-circumvention agreement is executed by such party or parties prior to the disclosure of any Confidential Information.  At a minimum, the Confidentiality Agreement will provide that such party will use the same degree of care as it does to protect the confidentiality of its own confidential information but in no event less than reasonable degree of care.

 

Article 4: Miscellaneous

 

4.1. Term.  The term of this Rights Agreement shall be perpetual unless otherwise cancelled by the mutual agreement of the Parties.

 

4.2. Disclaimer/Representations.  Each of the Parties hereunder disclaims any and all warranties of whatever sort, either express or implied, including without limitations, warranties of fitness for particular purpose or merchantability regarding or with respect to the Shrimp Technology, the Improvements, the Existing Improvements or New Technologies, the use or sale of Shrimp derived therefrom.  Each Party makes no warranties or patentability, enforceability of patents or that same is or will be free from infringement.  In addition, neither Party represents or warrants that the Shrimp Technology, Improvements, Existing Improvements or New Technologies will ultimately be commercial.

 

4.3. Assignment.  It is specifically agreed that this Rights Agreement is personal in nature and extends only to the Parties hereto.  Neither Party may assign all or a part of this agreement or the Shrimp Technology, improvements, existing improvements or New Technologies without the express written consent of the other Party.  Notwithstanding the foregoing, the Parties are permitted to sub-license the technologies subject to this agreement as set forth herein.  Subject to the foregoing, this Rights Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

 

4.4. Notices and Responses.  All notices, responses and other communications required or permitted under this Agreement shall be in writing and unless otherwise specifically provided, shall be delivered personally, or by mail, facsimile or delivery service, to the address set forth opposite the signature of the parties below, and shall be considered delivered upon the date of receipt.  Each party may specify a change of address by giving notice to the other party in the manner provided in this Section.

 

4.5. Relationship of the Parties.  This Agreement is not intended to create, and shall not be construed to create, an agency or other relationship of partnership or an association for profit between or the parties.  The liabilities of the parties shall be several, not joint or collective.

 

  

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4.6. Entire Agreement.  This Agreement constitutes the entire agreement and understanding between the parties, and may not be changed or amended in any way, except with the mutual consent of both parties, expressed in a written document executed by both parties.

 

4.7. Choice of Law.  This Agreement shall be construed under and in accordance with the laws of the State of Texas, notwithstanding its rules concerning conflicts of laws.

 

4.8. Severability.  In the event that any provision of this Agreement shall be held to be invalid, illegal or unenforceable, the remaining provisions shall nevertheless remain in full force and effect and binding and valid as between the parties, and shall be construed as if the invalid, illegal or unenforceable portion or portions were deleted.

 

4.9. Further Assurances.  Each party shall, upon request of the other, prepare, execute and deliver all such other and further instruments and documents as are or may be reasonably necessary or convenient to effectuate and carry out the purposes of this Agreement.

 

4.10. Captions.  In construing this Agreement, no consideration shall be given to the captions, which are inserted only for convenience in locating provisions in this Agreement, and not as an aid in its construction.

 

4.11. Counterparts.  This Agreement may be executed in counterpart, each ach of which shall be considered an original, but all of which together shall constitute one and the same instrument.

 

[Signature Page Follows]

 

  

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[Signature Page to Rights Agreement]

 

In witness whereof, the parties hereto have duly executed and signed this Agreement, in three (3) originals, on the date first written above.

 

	 	 
F&T WATER SOLUTIONS

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	 
Peter Letizia, President

	 
	 	 	 	 
	 	 	 	 
	 	 
NATURALSHRIMP HOLDINGS, INC.

	 
	 	 	 	 
	 	 
By: 

	 	 
	 	 	 
Gerald/Easterling, President

	 

 

  

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F&T Rights Agreement Exhibit A

 

The test is deemed successful if the shrimp under test show good growth and good survival as measured below while the system maintains good water quality with a reasonable operating cost during the 12-week test period.  The initial PL stocking population density for the test is 400 shrimp per cubic meter.

 

	
  

	
1.

	
The shrimp growth rate must meet or exceed the shrimp 24-week growth shown below during the 12-week period of the test.  For example, if the 12-week test starts with an average shrimp weight of 0.5 grams (day 28), then a successful growth rate test is indicated by the average weight of the shrimp reaching at least 12.5 grams by the end of the 12-week test (day 112).

 

 

	
  

	
2.

	
The shrimp survival must meet or exceed the shrimp 24-week survival shown below during the 12-week period of the test.  For example, if the 12-week test starts with an 89% survival (day 28), then a successful survival test is indicated by a shrimp survival of at least 63% at the end of the 12-week test (day 112).

 

 

  

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3.

	
At the end of the 12-week test, an analysis will be performed to determine the total operating cost required for raising shrimp in a production facility designed to produce 6,000 pounds per week.  The total operating cost must be less than $TBD per pound of shrimp.

 

	
  

	
4.

	
During the 12-week test, the following bacteria and water quality of the shrimp tank will be monitored to ensure the proper growth environment for the shrimp:

 

	
  

	
a.

	
Temperature

	
  

	
b.

	
Salinity

	
  

	
c.

	
Dissolved Oxygen

	
  

	
d.

	
pH

	
  

	
e.

	
Alkalinity

	
  

	
f.

	
Carbon Dioxide

	
  

	
g.

	
Hardness

	
  

	
i.

	
Total

	
  

	
ii.

	
Calcium

	
  

	
iii.

	
Magnesium

	
  

	
h.

	
Vibrio

	
  

	
i.

	
Nitrogen Compounds

	
  

	
i.

	
TAN

	
  

	
ii.

	
Ammonia

	
  

	
iii.

	
Nitrite

	
  

	
iv.

	
Nitrate

	
  

	
v.

	
DIN

	
  

	
j.

	
Phosphate

	
  

	
k.

	
Sulfur

	
  

	
l.

	
Turbidity

	
  

	
i.

	
Settleable

	
  

	
ii.

	
Particulate

	
  

	
m.

	
Chlorine/Aluminum/Iron depending on plate used during test

	
  

	
n.

	
ORP

	
  

	
o.

	
Trace metals

 

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