EXHIBIT 10.6
COMMERCIAL DEVELOPMENT AGREEMENT
This Commercial Development Agreement (this "Agreement"), dated as of
the _______ day of August, 2000, by and between Gulf Marine Institute of
Technology ("GMIT") a Delaware corporation operating as a 501 C-3 non-profit
research institute and BioMarine Technologies, Inc. ("BioMarine"), a Delaware
corporation both authorized to do business in Florida and located at 1198 Gulf
Breeze Parkway, Gulf Breeze, Florida 32561.
WITNESSETH:
WHEREAS, GMIT is the assignee under a certain Assignment and Assumption
Agreement (the "Assignment Agreement"), dated September 18, 1998, with Seagull
Energy E&P Inc. as assignor;
WHEREAS, pursuant to the Assignment Agreement, GMIT has a leasehold
interest in a surface and subsurface area of land included within the STATE OF
TEXAS TRACT 526 L, Offshore Matagorda County, TX, described in State Lease
M-74563 (the "Property"); and
WHEREAS, GMIT wishes to contract with BioMarine to develop and operate
an existing four platform complex valued at $5.6 million dollars and owned by
GMIT located approximately 10 miles south of Port O'Conner, Texas for commercial
maricultural use, and BioMarine wishes to enter into such contract.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein, the parties agree as follows:
1. Platform Development. BioMarine shall commercially develop and operate GMIT's
platform complex situated on GMIT's leasehold into a mariculture facility in
accordance with the plans and specifications outlined in Exhibit A hereto,
including BioMarine's Sea Star Oyster Relay and Sea Trek Ocean Farming Systems.
2. Platform Operation. Upon completion of the permitting, designing and
re-engineering of the platform, BioMarine shall have the right to conduct
commercial mariculture operations at the platform location and to make any
additional modifications or adjustments to the platform or its systems as it
deems necessary or advisable for the conduct of its mariculture operations.
1
3. Employees and Consultants. It is agreed that in commercial developing the
platform for mariculture use and in the conduct of its operations, BioMarine may
retain the services of one or more consultants and hire such employees, as it
deems necessary or advisable.
4. Escrow. BioMarine agrees that it will establish an escrow account (the
"Escrow Account") into which it will deposit $260,000 per year for a period of
ten years and will make such funds available for the payment of any costs
incurred by GMIT in connection with the eventual decommissioning and
deconstruction of the platform situated on the Property; provided, however, that
BioMarine shall incur no obligation whatsoever to decommission or deconstruct
the platform or to fund such decommissioning or deconstruction beyond the amount
held in the Escrow Account at the time the platform is decommissioned.
5. Indemnification. BioMarine agrees to indemnify GMIT and hold it harmless
against any and all loss, damage, judgment, fine or amount paid in settlement,
arising out of any claim, cause of action, suit or other actual or threatened
proceeding resulting from BioMarine's operation of its systems on the Property,
together with any and all fees and expenses connected therewith, including any
attorneys' fees incurred by GMIT.
6. Insurance. BioMarine agrees to provide GMIT with commercial property
insurance insuring GMIT against any loss of the four platform complex valued at
$5.6 million dollars ($5,600,00.00) and all additions, equipment ,and
pertinences attached thereto or surrounding the site as well as provide
comprehensive general liability insurance coverage in the minimum amount of $5.0
million dollars ($5,000,000.00). These insurance policies will be provided to
GMIT prior to commencing any BioMarine activities at the Matagorda 526 platform
site and will name GMIT as co-insured. BioMarine's insurance carrier will
provide GMIT with certificates of insurance for the minimum amounts stipulated
herein, as well as notify GMIT of any change in the coverage amounts, terms or
payment status. Any, termination of insurance coverage's required herein, if nor
cured within 48 hours of notice of cancellation from the insurance company to
GMIT, shall result in the following: a) violation and of the terms of this
contract, b) GMIT giving written notice of default c) GMIT replacement of
insurance coverage types and amounts as specified above, d) a lien against any
and all property, assets or accounts owned by BioMarine for the amount of the
insurance premiums paid by GMIT plus a 50% penalty i.e. 150% of the premium
paid.
2
7. Maintenance of Structure. BioMarine agrees to maintain the structural
integrity of the platform in good repair and to return the platform to GMIT at
the end of the term of this Agreement in a condition substantially similar to or
better than currently existing on the date hereof. Any and all improvements
made, systems installed and equipment added to the platforms to maintain the
operational integrity of the platform complex, as a mariculture project shall
belong to GMIT upon the conclusion or termination of this contract without
further consideration.
8. Royalty. BioMarine shall pay to GMIT a research and development royalty of
10% of the net profits from operations conducted on or from the Property or from
use of the systems, methods and intellectual property rights developed from this
Property and applied elsewhere.
9. Terms and Termination. This Agreement shall continue in effect for a period
of two years from the date hereof and shall thereafter be renewed automatically
for successive one-year periods unless terminated earlier by either party upon
60 days' notice to the other.
10. Severability, Entire Agreement. If any provision of the Agreement is held
invalid in arbitration or by a court of competent jurisdiction, such invalidity
shall not affect the remaining provision of this Agreement, and they shall be
given effect without the invalid provisions if to do so would not substantially
frustrate the expectations of the parties hereto. This Agreement shall not be
amended except by written agreement signed by both parties.
11. Construction. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida
12. Headings. Headings and captions in this Agreement are for convenience only
and shall not be used to interpret or construe its provisions.
13. Counterparts. This Agreement may be executed in counterparts which, taken
together with this Agreement, will be deemed an original and shall constitute
one and the same instrument.
3
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
BIOMARINE TECHNOLOGIES, INC.
By: ________________________
John D. Ericsson,
President
Approved by the Chief
Financial Officer
_______________________
John W. Hemmer
GULF MARINE INSTITUTE OF
TECHNOLOGY
By: ________________________
John D. Ericsson,
President, Managing Director
________________________
Secretary-Treasurer
_______________________
Board Member
4