Scio Diamond Technology Corporation Development Agreement
Exhibit 10.5
Scio Diamond Technology Corporation
Development Agreement
This Development Agreement (the “Agreement”) is made as of September 16, 2013, (the “Effective Date”) by and between SCIO Diamond Technology Corporation a Nevada corporation, having a principal place of business at 411 University Ridge, Suite D, Greenville, SC 29601 (the “LICENSOR”) and Grace Rich Limited, a Hong Kong corporation, having a corporate office at 354 Indusco Court, Troy, MI 48083, (the “LICENSEE”).
WHEREAS, Licensor and Licensee have entered into a Joint Venture Agreement, Licensing Agreement and other supporting agreements for the purpose of developing and mass producing type IIa single crystal CVD manufactured diamond using Scio Technology;
WHEREAS, Licensee wishes to engage licensor to develop Scio 4” Technology in order to increase the production capacity of the WFOE facilities; and
WHEREAS, Licensee and Licensor acknowledge the material increase to production capacity provided by the development of Scio 4” Technology;
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
I. Engagement. Licensee hereby engages, and licensor hereby accepts such engagement, to develop Scio 4” Technology for the purpose of increasing the growing platform (susceptor) size in a Scio diamond-growing reactor in accordance with the Scope of Development further defined below.
II. Term. This Agreement will be effective upon full execution by the Parties and shall remain in effect until the earliest of the following dates: (a) the Scope of Development is achieved, (b) the license Agreement executed by the parties on same date (“License Agreement”) is terminated for any reason, or (c) a date the parties mutually agree in writing.
III. Scope of Development.
1. Scio Diamond is to use funds made available for the development of 4” Technology
2. The increase in size of the suscepter and associated support equipment is intended to increase the allowable growing space by an estimated 70%.
3. The Development includes, but is not limited to, equipment, science technology, support equipment and testing for Scio 4” Technology.
IV. Payment
1. Licensee shall pay Licensor a development fee in the amount of seven hundred and fifty thousand ($750,000.00) U.S. Dollars to be paid as follows.
i. Payment of one hundred and twenty five thousand ($125,000.00) U.S. Dollars on January 1, 2014
ii. Payment of one hundred and twenty five thousand ($125,000.00) U.S. Dollars on February 1, 2014
iii. Payment of one hundred and twenty five thousand ($125,000.00) U.S. Dollars on March 1, 2014
iv. Payment of one hundred and twenty five thousand ($125,000.00) U.S. Dollars on April 1, 2014
v. Payment of one hundred and twenty five thousand ($125,000.00) U.S. Dollars on May 1, 2014
vi. Payment of one hundred and twenty five thousand ($125,000.00) U.S. Dollars on June 1, 2014
Funds will be wired to Scio on each of the dates above, following the wiring instruction herein.
V. Miscellaneous.
1. No Assignment. licensor may not sell, assign or otherwise transfer its rights or obligations under this Agreement without the prior written consent of the Company.
2. Waiver. The waiver by either party of any breach or default by the other party in the performance of any obligation hereunder shall not constitute a waiver of any subsequent breach or default.
3. Amendments. This Agreement may not be modified except by a written amendment signed by both parties.
4. Governing Law. This Agreement shall be construed in accordance with the laws of the state of Michigan except that no choice of law doctrine shall be used to apply the laws of any other jurisdiction.
Proprietary and Confidential
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5. Consent to Jurisdiction. The Parties consent to the non-exclusive jurisdiction of the federal and state courts located in the state of Michigan in connection with any action or proceeding to enforce, or arising out of, this Agreement and agree that venue will be proper in such court on any such matter. The Parties agree that a summons and complaint may be served by mail or Overnight courier service at their addresses first set forth above or at such other address as such party may have given written notice in accordance with paragraph 12.f.
6. Notices. Any notice required under this Agreement shall be in writing and delivered personally against receipt, or by registered or certified mail, return receipt requested, postage prepaid, or sent by Federal Express or other recognized courier service, and addressed to the party to be notified at its address first set forth above or at such other address as it may have given written notice in accordance with this paragraph.
7. Severability. To the extent that any law, statute, treaty or regulation by its terms as determined by a court, tribunal or other governmental authority of competent jurisdiction, is in conflict with the terms of this Agreement, the conflicting terms of this Agreement shall be superseded only to the extent necessary by the terms required by such law, statute, treaty or regulation. If any provision of this Agreement shall be otherwise unlawful, void, or for any reason unenforceable, then that provision shall be enforced to the maximum extent permissible so as to effect the intent of the parties. In either case, the remainder of this Agreement shall continue in full force and effect.
8. Entire Agreement. This Agreement embodies the entire agreement between the parties with respect to the subject matter hereof.
9. Force Majeure. Neither party shall be liable for any delays or failures in performance in whole or in part if such delay or non-performance is due to any cause beyond its reasonable control, including but not limited to delays caused by the other party’s delay or failure to perform, Act of God, war, insurrection, riot, civil disturbance, rebellion, government regulations, embargoes, explosions, fires, floods, tempest, strikes, failures in hardware, media, heating, lighting, air-conditioning, telecommunications equipment or public supply of electrical power.
10. Publicity. Neither party shall use any name, mark or symbol of the other in any publicity release or advertising material or for any other purpose whatsoever nor shall publicize any information pertaining to this Agreement or the other party without securing prior written consent of the other party.
11. Capitalized Terms. Any and all capitalized terms not defined within this Agreement shall have the meaning given to them by the License Agreement.
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| SCIO DIAMOND TECHNOLOGY CORPORATION | ||||
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| Michael W. McMahon | ||||
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| Chief Executive Officer | ||||
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| GRACE RICH LIMITED | ||||
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| Name: |
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Wiring Instructions
Receiving Bank: South Carolina Bank and Trust, NA
Address:
200 E. Broad St, Suite 100
Greenville, SC 29601
Receiving Bank ABA#: 0532xxxxx
SWIFT: SBTTxxxx
Account # funds will be wired to:
xxxxxxxxxx (for our general account)
xxxxxxxxxx (for Arque Capital Offering)
Beneficiary Name: SCIO Diamond Technology Corporation
Beneficiary Address:
411 University Ridge, Suite D
Greenville, SC 29601
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