Hartindo AF21 Product, Purchase, Sales, Distribution, Marketing and Service Agreement THIS HARTINDO AF21 PRODUCT AGREEMENT (THE “AGREEMENT”) MADE THIS 5TH DAY OF OCTOBER 2008 BY AND AMONG MEGOLA INC., a corporation incorporated under the laws of the...
THIS
HARTINDO AF21 PRODUCT AGREEMENT (THE “AGREEMENT”)
MADE
THIS 5TH
DAY OF OCTOBER 2008 BY AND AMONG
MEGOLA
INC.,
a
corporation incorporated under the laws of the State of Nevada
(hereinafter
referred to as the “Supplier”)
jointly
with;
MSE
ENVIRO-TECH CORP.,
a
corporation incorporated under the laws of the State of Delaware
(hereinafter
referred to as the “Distributor”)
-and-
WOODSMART
SOLUTIONS, INC.,
a
Florida Corporation and/or an entity to be formed by
Xxxxxxx
X. Xxxxxxx, a State of Florida resident, or his nominee
(hereinafter
referred to as the “Buyer”)
For
the
purpose of this Agreement, Supplier and Distributor may be jointly referred
to
as the (“Seller”). This Agreement replaces all prior Agreements related to the
subject.
RECITALS
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A.
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WHEREAS,
Seller has the exclusive rights to manufacture Hartindo AF21 Fire
Inhibitor product, which is more particularly described on Schedule
A
attached hereto, (“AF21”
or the “Product”) within Canada, The United States of America and Mexico
(“North America”); and
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B.
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WHEREAS,
Seller possesses the exclusive rights to market, sell and distribute
the
Product and is fully authorized and willing to grant the Buyer, when
combined with the BLUWOOD product to create an enhanced fire inhibiting
product (“Enhanced Product”), the exclusive rights to purchase, use,
market, sell and distribute the Enhanced Product for use on and in
any
wood based material and which are more particularly described on
Schedules
A & C attached hereto; and
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C.
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WHEREAS,
Buyer has the rights to the proprietary product commonly known as
BLUWOOD
(“BLUWOOD”), and which is more particularly described on Schedule B
attached hereto; and
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D.
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WHEREAS,
Buyer has the technical capability and may combine the Product with
the
BLUWOOD product to create an enhanced fire inhibiting product for
use on
and in wood based materials (the “Enhanced
Product”),
and which is more particularly described on Schedule C attached hereto;
and
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E.
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WHEREAS,
Buyer desires to obtain (i) a supply of the product (ii) use of the
technical data, non-proprietary intellectual property and other
information relating to the Product’s application, handling and storage
and all material, non-proprietary modifications thereof as more fully
set
forth herein while this Agreement is in effect (“Product Technology”) and
(iii) to obtain the exclusive
use of and rights of the Product for use on or in any dimensional
lumber,
Oriented Strand Board (“OSB”) and plywood (“Wood Based Products”) in North
America; and (iv) to obtain the exclusive
use and rights for the Enhanced Product for use on or in any wood
based
materials in North America; and
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F.
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WHEREAS,
Seller agrees and covenant’s to the Buyer that it will
exclusively
only sell or supply the Hartindo AF-21 (“Product”) as more particularly
described on Schedule A attached hereto and including all improvements
and
modifications thereto to the Buyer and not to any other person, company
or
entity that manufacturers and/or supplies a product or performs an
application service for the protection and/or enhancement of any
wood
fiber based materials or derivative product(s) that are utilized
to build
or renovate a residential and/or commercial structure;
and
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Now,
therefore, in consideration of the covenants contained herein and other goods
and valuable considerations, the Buyer and Seller (each a “Party” and
collectively the “Parties”) hereby agree to the following:
1. Intellectual
Property
1.1
Ownership of the Product Technology.
Buyer
acknowledges, based on Seller’s representation, that the Seller is the sole
owner of the manufacturing, sales, marketing and distribution rights for the
Product for North America and Buyer shall have no right, title, or interest
therein or thereto other than the use and rights to such Product in the manner
and to the extent prescribed in this Agreement or otherwise approved in writing
by Seller.
1.2
No Implied Licenses.
Each
party shall exclusively own its own Intellectual Property and neither Party
will
have any claim or right to the Intellectual Property of the other by virtue
of
this Agreement except as otherwise provided herein. Neither Party will take
any
action or make any claim to any intellectual Property belonging to the other
Party, whether during the term of this Agreement or thereafter, which is
consistent with this Section 1.1.
1.3
Rights to use Product Technology.
(A) Grant.
Subject
to provisions of this Section 1.3 Seller hereby grants to Buyer, for the term
of
this Agreement, certain exclusive use of and rights exclusive of all Persons
and
Seller (as set forth in 1.3 (F), the “Product and Enhanced Product”), including
the exclusive rights within North America, (i) to use, sell and have sold the
Product and Enhanced Product for use on or in Wood Based Products (ii) use,
advertise, promote, display, market, distribute, sell and have sold products
that have been protected with the Product or Enhanced Product (“Derivative
Products”); and (iii) use or have used the Product Technology and Application
Technology in connection with the foregoing. During the term of this Agreement
the use of and rights shall be for use on or within Wood Based Products of
the
Product and for any use of the Enhanced Product. (B)
Initial
Disclosure.
Within
ten (10) days of execution of this Agreement, Seller will deliver and
communicate the Product Technology, Technical Data and Application Data to
Buyer
to enable Buyer to exercise its rights under the Agreement set forth in Section
1.3 (A) hereof. Seller will provide Buyer with sufficient technical support
to
ensure that Buyer may commence use of the Product and Enhanced Product pursuant
to this Agreement. (C)
Transfer
of the Use of or Rights.
Buyer
may not sell, assign or transfer the use or Rights granted buy Seller to the
Buyer in this Agreement and any or all other rights of the Buyer under this
Agreement without Sellers advance written approval and acceptance of all terms
and conditions of any sale, assignment or transfer by Buyer, which approval
shall not be unreasonably withheld, conditional or delayed; provided that no
consent is needed if Buyer sells, assigns or transfers the Agreement to an
entity in which Xxxxxxx X. Xxxxxxx and/or WoodSmart Solutions, Inc. individually
or jointly own at least 50% of such entity. (D)
Notice
of Unauthorized Use.
In the
event that either Party becomes aware of any actual or threatened commercially
material infringement for the use of or rights of the Product or Enhanced
Product, that Party shall promptly notify the other Party and provide it with
full details. Seller will use commercially reasonable means to eliminate any
unauthorized use of Product, including pursuing legal action as appropriate.
If
Seller does not take appropriate action to protect Buyer’s use of or rights
under this Agreement, including infringement, Buyer may pursue actions in its
own right to eliminate any such unauthorized use or infringement. (E)
Buyer
agrees and covenants that at no time will the Buyer engage in or be a party
to,
or assist other persons in any form of Product chemical analysis, reverse
engineering or component breakdown for the purpose of determining or evaluating
Proprietary Information (as defined below). (F)
Exclusivity.
Buyer
shall have exclusive use of and rights to the Product for use in Wood Based
Products within North American and exclusive use of and rights to the Enhanced
Product for any use within North America. Furthermore, Seller shall prohibit
and
take all reasonable steps to prevent (including commencement of an action to
enforce a temporary restraining order, preliminary and permanent injunction
or
similar relief) any Person from exercising or infringing upon the use of or
rights granted under this Agreement within North America.
1.4
Use of Product.
(A) Protection
of Sellers Goodwill.
In
order to protect the goodwill of the Seller and Buyer and to maintain uniform
standards of operation to promote broad recognition of Sellers product for
the
mutual benefit of Seller and Buyer, Buyer shall adhere to reasonable rules,
regulations, procedures, programs, policies, processes, requirements and
standards (“Quality Standards”) relating to the application, promotion,
advertising and marketing of the Sellers Product as prescribed by Seller from
time to time. (B)
Seller
Approval.
Buyer
will utilize only such advertising and promotional materials which have been
reviewed by Seller, which shall be deemed acceptable if Seller does not respond
in writing within ten (10) days of Buyers submission of such material for
acceptance. (C)
Quality
Control.
Seller
shall provide Buyer with Sellers Quality Standards for specifications,
composition and quality in respect of the use of the Product Technology and
Product Application as are in force from time to time. Seller shall institute
appropriate procedures and policies and will abide by in all material respects
to such Quality Standards therefore provided by Seller to Buyer, a copy is
attached hereto as Schedule ________. Seller will supply Buyer with quality
control testing standards procedures and guidelines (“Quality Standards”) so
that the Buyer may determine that the application of the Product or Enhanced
Product performed by the Buyer or its customer(s) meets such written standards
of composition, specifications and quality as specified by Seller. Seller shall
have the right to require that treated materials that do not meet such standards
be retreated or not sold as material treated with Product or Enhanced Product
of
the seller. Buyer is authorized to provide independent third party quality
control inspection to be able to determine whether or not the Sellers written
specifications and standards are met. The Seller also has the option and Buyer
encourages providing its own third party testing program for the Buyer.
(D)
Buyers
Rights to Change Marks and Trade Name.
Seller
specifically agrees that the Buyer shall have the right to substitute, alter
and/or add identifying services, marks, trade names of the Enhanced
Product.
1.5
Confidentiality. (A) Obligation
of Nondisclosure.
Except
as otherwise provided in this Agreement, each Party agrees that it will, with
respect to the Confidential and Privileged Information and Trade Secrets
(collectively, the "Proprietary Information") of the other Party: (i) protect
the confidential and proprietary nature of the Proprietary Information of the
Disclosing Party from disclosure to Persons who are not employees of the
Receiving Party; and (ii) use great care in the selection and assignment of
personnel who receive the Disclosing Party’s Proprietary Information and in that
regard to restrict access to the Disclosing Party’s Proprietary Information
within the organization to a limited number of persons who must necessarily
have
such information for the purposes of giving effect to this Agreement and who
have been advised of the restrictions contained herein, including the
limitations placed on the use of Proprietary Information; and (iii) under no
circumstances give any competitor of the Disclosing Party, or other third Party,
direct access to the Disclosing Party’s Proprietary Information without the
prior written consent of the Disclosing Party; and (iv) use the Proprietary
Information of the Disclosing Party solely for the purpose of properly and
lawfully performing and exercising of the Receiving Party's obligations and
rights under this Agreement; and (v) not reproduce the Proprietary Information
received from the Disclosing Party in any form, except for internal use of
the
Receiving Party, or as otherwise permitted by this Agreement, and to include
in
any such reproduction any ownership or confidentiality legends that the
Disclosing Party may have included in or with the original disclosure.
(B)
Exceptions.
The
Receiving Party shall not be obligated to maintain in confidentiality any:
(i)
Information which is known to the Receiving Party before disclosure by the
Disclosing Party, so long as such knowledge is documented by written or other
tangible evidence; and (ii) Information which is available to the public
independently of the Receiving Party; and (iii) Information which is developed
independently by employees of the Receiving Party who did not have access to
the
Disclosing Party’s Proprietary Information so long as such independent
development is documented by written or other tangible evidence; and (iv)
Information which is disclosed to the Receiving Party without obligation of
nondisclosure by a third Party who is legally entitled to disclose the
information; and (v) Information which is disclosed by the Disclosing Party
to a
third Party without requiring the third Party to maintain the information in
confidence; and (vi) Information which becomes available to the public without
breach of this agreement by the Receiving Party, following its disclosure to
the
Receiving Party by the Disclosing Party; and (vii) Information required to
be
disclosed by law, provided that the Receiving Party shall first notify the
Disclosing Party of such requirement and cooperate with respect to any
reasonable steps available for the further protection of the Information; or
(viii) Information that is inherently disclosed in the unrestricted use, lease,
sale, or other distribution of any present or future product or service produced
by, for or under authorization of the Disclosing Party or in publicly available
documentation for any such product or service. (C)
Return
of Information.
Upon
termination of this Agreement, the Receiving Party will and promptly upon the
Disclosing Party’s request either return, or destroy all copies of any
advertising or promotional materials supplied to the Receiving Party by the
Disclosing Party and materials containing Confidential and Privileged
Information or Proprietary Information of the Disclosing Party. (D)
Investigation.
The
Receiving Party will at the request of the Disclosing Party use reasonable
efforts to assist in identifying any use, copying, or disclosure of any portion
of the Disclosing Party’s Proprietary Information by any present or former
employee of the Receiving Party in a manner that is contrary to the provisions
of this Agreement, so long as the Disclosing Party shall have provided the
Receiving Party with information reasonably justifying the conclusion of the
Disclosing Party that such contrary usage may have occurred.
2.
Quantities;
Grant of Exclusive License; Minimum Quantities.
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2.1.
Quantities.
During the term hereof, Seller shall manufacture, sell and deliver
to
Buyer, and Buyer shall purchase, accept from and pay Seller for,
one
hundred percent (100%) of Buyer's requirements for Product and for
incorporation as an integral part of the Enhanced Product which Buyer
will
resell to Buyer's customers. Buyer further agrees and covenants that
Buyer
shall only use, sell, market or distribute the Product or Enhanced
Product
for use on or within Wood Based Materials and not for another purpose
without the prior written approval of Seller, which may be withheld
solely
at Sellers discretion.
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2.2
Minimum
Quantities.
Buyer is required to purchase the minimum quantities set forth on
Schedule
D attached hereto. If Buyer fails to purchase said minimum quantities,
it
shall lose all exclusivity as set forth in Section 1, this Section
2 and
elsewhere in this Agreement.
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3.
Price.
Buyer
shall purchase from Seller the Product, in the minimum quantities set forth
according to Section 2.2 above, at the prices set forth on Schedule D attached
hereto.
4.
Estimates,
Orders and Deliveries.
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Estimates.
Thirty (30) days prior to the end of each calendar quarter, Buyer
shall
provide to Seller an estimate of the quantity of Product which Buyer
expects to purchase in the next calendar quarter.
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4.2.
Orders
and Deliveries.
Buyer shall give Seller a purchase order by the tenth (10th) day
of each
month covering the amount of Product Buyer expects to purchase in
the
following month. The purchase orders shall contain specific "release
dates", which are to be the dates on which the Product shall actually
be
shipped by Seller to Buyer. Seller shall deliver all shipments of
Product
in accordance with such release dates, F.0.B Seller's
plant.
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5.
Warranty
of Seller; Disclaimer of Other Warranties; Buyer’s Exclusive
Remedy.
5.1.
Specifications.
Seller
warrants that the Product at the time of delivery thereof shall conform to
the
specifications established in writing by Seller for such Product.
5.2.
Disclaimer. THE
WARRANTY SET FORTH HEREIN IS IN LIEU OF ANY AND ALL WARRANTIES EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE EXCEPT AS A FIRE ENHIBITOR OF WOOD BASED
MATERIALS. BUYER ACKNOWLEDGES THAT NO OTHER REPRESENTATIONS WERE MADE TO IT
OR
RELIED ON BY BUYER WITH RESPECT TO THE QUALITY AND FUNCTION OF THE PRODUCTS
HEREIN SOLD.
5.3.
Buyer's
Remedies.
Buyer's
sole and exclusive remedy for failure of the Product sold hereunder to meet
specifications, or for failure of any other obligation of Seller relating to
the
quality of Product to be sold hereunder, shall be expressly limited to Seller's
issuing a credit to Buyer's account for the quantity of Product that do not
conform to the warranty set forth in this Section 5. Buyer shall have the option
to obtain replacement Product from Seller in the event of a breach of Seller's
warranty set forth in this Section 5 in amounts not to exceed the amount of
the
order which is being replaced. If Buyer obtains replacement Product from Seller,
such replacement Product shall not be subject to the estimate and order terms
set forth in Section 4 hereof.
5.4.
Exclusions
to Warranty.
The
above warranty is made subject to Buyer's proper use of any Product for the
purpose for which such Product was intended. The warranty does not cover any
Product which (i) has been misused; (ii) has been subject to unusual stress;
(iii) has been altered by Buyer, except in accord with such processes as have
been established for the creation of the Enhanced Product; or (iv) has not
been
stored in accordance with instructions from Seller.
5.5.
Limitation
of Liability.
IN NO
EVENT SHALL SELLER BE LIABLE FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL
DAMAGES ARISING UNDER CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY
OR
ANY OTHER THEORY OF LIABILITY IN CONJUNCTION WITH BUYER’S USE OF THE PRODUCT AND
OR THE DEVELOPMENT, MANUFACTURE, MARKETING, DISTRIBUTION OR USE OF THE ENHANCED
PRODUCT. Such disclaimed damages include but are not limited to loss of profits,
loss of use of the Product, damage to property, or claims of third parties.
In
any event, Seller's total liability under this Agreement shall be limited to
the
unit purchase price paid to Seller for Product within the immediately preceding
one (1) month period.
5.6.
Advertising
and Promotional Materials.
Any and
all descriptions of the Product or Enhanced Product to be used in Buyer’s
marketing and promotional literature, or in the marketing and promotional
literature used by Buyer’s distributors and authorized resellers of the Product
or Enhanced Product, shall be subject to the prior written approval of
Seller.
6.
Payment
6.1.
Terms.
Payment, including taxes, if applicable, for each invoice shall be made by
Buyer
to Seller with 50% of payment due at the time of receipt of Buyer’s purchase
order (“PO”) and the balance of the payment under the Buyer’s PO due prior to
Product shipment. Without limiting any other remedies which Seller may have,
Seller may withhold future shipments to Buyer until any default in the payments
due Seller under the Agreement is cured.
7.
Labeling;
Packaging.
All of
the Product sold to Buyer by Seller hereunder shall be labeled and packaged
by
Buyer in such media as Buyer shall see fit, and Buyer may repackage and
inventory Product or Enhanced Product containing Product per its customers'
orders, provided that the form of any labeling or packaging that refers to
the
Product shall be subject to the prior written approval of Seller, which approval
may not be unreasonably withheld by Seller.
8.
Title;
Risk of Loss.
Title
and risk of loss or damage to Product shall pass to Buyer upon delivery by
Seller to the carrier for shipment to Buyer.
9.
Force
Majeure
9.1. Force
Majeure.
Seller
shall not be liable to Buyer for any delay in any performance or for failure
to
render any performance under this Agreement, and any such delay or failure
shall
for all purposes be excused, when such delay or failure is caused by
governmental regulations (whether or not valid), fire, strike, weather,
differences with workmen, war, flood, accident, shortage of material or railroad
cars or other transportation, appropriation of plant or Product (including
but
not limited to Products) in whole or in part, inability to obtain raw materials
or power, or any other cause or causes beyond the reasonable control of Seller,
which events or causes are collectively referred to as "Force
Majeure."
9.2.
Notice.
Seller
shall notify Buyer in writing immediately upon the occurrence of an event of
Force Majeure, stating the nature of the event and its expected duration.
9.3.
Product
Allocation. If
the
event of Force Majeure results in an allocation of the supply of Product, Seller
shall allocate on a pro rata basis to all of Seller's customers, including
Buyer.
9.4.
Description
of Performance.
Upon
the abatement, correction or removal of any contingency provided for by
subparagraph 9.1, Seller shall resume performance under this Agreement.
10.
Representations and Warranties.
10.1
By
Seller.
For the
purpose of inducing Buyer to enter into this Agreement, Seller hereby makes
the
following representations and warranties to Buyer (each and all of which are
true and correct as of the Effective Date and shall continue to be true and
correct at all times during the term of this Agreement) (A)
that:
(i) Seller is the sole owner of the exclusive manufacturing, sales, marketing
and distributing rights of the Product, free from any lien, claim or encumbrance
within North America; and (ii) the Trade Secrets, the Product Technology,
Product use or any other rights do not unlawfully infringe on the intellectual
property rights of any Person or entity; and (iii) the execution, delivery
and
performance of this Agreement does not and will not breach any law or
regulation, any judgment or order, or any agreement or arrangement binding
on or
applicable to Seller; and (iv) the execution of this Agreement does not conflict
with and will not result in a default under or breach of: (a) Seller Articles
of
Incorporation, by-laws or other organizational documents; (b) any agreement,
indenture, mortgage, contract or instrument to which Seller is bound by or
to
which its assets are subject; (c) any order, writ, injunction, decree or
judgment of any Court or governmental agency to which Seller or any of its
assets are bound; or (d) any law or regulation applicable to the Product, the
operations of Seller or by which any of Sellers assets are bound; and (v) the
Product does not contain any carcinogens, heavy metals, aldehydes or solvents
and will meet all state and federal laws relating to VOC emissions; and (vi)
based upon collected field data, live testing and third party controlled test
data, all of which has been supplied to the Buyer, and Buyers own testing of
Product, Seller reasonably believes the Product to be effective by providing
improved fire resistance to wood based materials when properly treated with
the
Product, in accordance with published data by Seller; and (vii) each shipment
of
the Product to Buyer will conform to the current specifications for the Product
on the date of this Agreement; and (viii) Seller is a corporation duly
incorporated, validly existing and in good standing under the Laws of the State
of Nevada and Delaware.
10.2
By
Buyer.
Buyer
will comply with all applicable laws, ordinances and regulations applicable
to
the transportation, storage and handling of the Product and Enhanced Product
and
to the manufacture of the Enhanced Products. Buyer (i) has the right and power
to enter into, and perform its obligations under this Agreement; and (ii) Buyer
has the financial resources to meet it’s financial obligations under this
Agreement; and (iii) Buyer has taken all requisite action to authorize the
execution, delivery and performance of this Agreement and each such other
agreement delivered in connection herewith to which it is a Party.
10.3
Mutual.
Neither
Buyer nor Seller shall conduct its business in a manner that reflects
unfavorably on the other. Neither Buyer nor Seller will at any time
intentionally engage in illegal, deceptive, misleading, or unethical practices
or advertising.
11.
Term and Termination.
11.1
Term.
Unless
terminated earlier by Seller or by Buyer under Section 11.2, 11.3 or 11.4.,
this
Agreement shall have an initial term of one (1) year commencing on the date
of
this Agreement and shall automatically renew annually for additional terms,
each
one (1) year, without further action by Seller or Buyer on the same terms and
conditions set forth herein.
11.2
Termination by Seller.
At
Sellers option and without prejudice to any remedies or rights it may otherwise
have, Seller may terminate this Agreement by written notice to Buyer in the
event that Buyer fails in a material respect to keep, observe or perform any
term, condition or covenant contained herein required to be kept, observed,
or
performed; provided that such notice shall not terminate this Agreement if
within thirty (30) days after its receipt, Buyer undertakes to correct such
default and diligently pursues the same to completion within a reasonable time
thereafter;
11.3
Effect of Termination.
Upon
termination of this Agreement by Buyer or Seller in accordance with the terms
hereof, the Buyer may continue to purchase the Product and use the Product
Technology to fulfill orders for Product or Enhanced Product already received
from all existing customers of Buyer as of the date the Agreement is terminated.
Buyer shall retain it’s exclusivity as provided in this Agreement until all
orders are fulfilled or until Buyer has diminished all of its existing inventory
of Product or Enhanced Product or ninety (90) days, whichever occurs first.
Thereafter, all of Buyers exclusive rights under this Agreement shall terminate
and Buyer shall discontinue all use and advertisement of Product or Enhanced
Product hereunder. Within ten (10) days after the termination of this Agreement,
Buyer shall remove (at Buyers expense), and thereafter cease all use of any
Product or Enhanced Product and cease all use of any marketing materials or
marks that reference the Product or Enhanced Product under this
Agreement.
11.4
Termination Upon Bankruptcy.
Either
Party, upon written notice to the other Party, may immediately terminate this
Agreement, without penalty at any time in the event the other Party applies
for
or consents to the appointment of or taking of possession by a receiver,
custodian, trustee, or liquidator of itself or of all or a substantial part
of
its property; makes a general assignment for the benefit of creditors; commences
a voluntary case under the U.S. Bankruptcy Code (as now or hereinafter in
effect); or fails to contest in a timely or appropriate manner or acquiesces
in
writing to any petition filed against it in an involuntary case under the U.S.
Bankruptcy Code or any application for the appointment of a receiver, custodian,
trustee or liquidation of itself or of all or a substantial part of its
property, or its liquidation, reorganization or dissolution.
12.
Seller Production Requirements and Pricing.
Seller
represents that it has the capacity to produce and sources of supply for the
ingredients for sufficient quantities of the Product and will deliver all orders
of the Product to Buyer up to the estimates as provided in Section 4 above
in a
timely manner in accordance with terms and conditions set forth in Exhibit
D.
Seller
will, on a best efforts basis, manufacture and deliver product over and above
the quantities estimated by Buyer. Seller agrees to provide Buyer a minimum
of
sixty (60) days advance written notice if it is necessary for Seller to increase
its price after the effective date of the Agreement for Product. Furthermore,
Seller agrees not to further increase the per gallon cost of undiluted or
diluted Product to the Seller in the future beyond the most favorable cost
per
gallon of Product offered to any other business or person by Seller.
Notwithstanding the foregoing, however, Seller may at any time increase the
price of the Product charged to Buyer in order to recover commercially
reasonable increases in the cost of manufacturing the same due to improvements
thereto, such as reformulation for the inclusion of new additives. No price
increase will be effective for the Product necessary to satisfy Buyers
obligations for existing written annual supply contracts until the end of each
annual contract period. Buyer is required to supply Seller a copy of such
annualized Licensee contract(s) which shall be deemed Confidential &
Privileged Information of the Buyer. No price increase will be effective for
any
then existing purchase orders of the Product.
14.
Relationship Between Parties . Seller
and Buyer are independent businesses, are not joint ventures, partners, or
agents of each other, and neither shall have the power to obligate the other
except as set forth in this Agreement.
15.
Buyers Indemnification.
Buyer
agrees to indemnify, defend and hold harmless Seller, its subsidiaries,
affiliates, successors, assigns, and designees and the respective directors,
officers, members, managers, employees, agents and representatives, from and
against any and all loss, liability, judgment, settlement, cost and expense
(including court costs and reasonable attorneys fees), claims, demands, actions
or damages which the Seller may suffer directly related to the use of the
BluWood product to create the Enhanced Product, including without limitation
to:
(a) any alleged defect(s) in the Enhanced Product or the materials in the
Enhanced Product; (b) any negligent act, misfeasance or nonfeasance of Buyer
or
any of its agents, servants or employees; (c) Buyers breach of any of the
representations, warranties or covenants made in this Agreement; (d) claims
that
Buyer does not have the rights granted in this Agreement or claims that the
BluWood component of the Enhanced Product infringe a third party's rights,
other
than Buyers application thereof; and (e) any and all fees, costs and expenses
including attorney’s fees incurred by or on behalf of Seller in the
investigation or defense against any and all of the foregoing claims. However,
upon notice to Seller that Buyer has assumed the defense of any legal action
or
proceeding, Buyer shall not be liable to Seller for any legal or other expenses
subsequently incurred by Seller in connection with the defense thereof. Seller
agrees to provide prompt notice of receipt of any such claim and Seller shall
not settle any such claim without Buyers prior knowledge and consent. This
obligation of indemnity and defense shall survive any expiration or termination
of this Agreement.
Buyer
agrees to indemnify and hold Seller harmless from and against loss, liability,
and expense (including court costs and reasonable attorney fees) claims,
demands, or actions that are actually proven to be directly, solely and
exclusively related to improper use, representation or application of the
Product or Enhanced Product by Buyer.
16.
Sellers Indemnification. Seller
agrees to indemnify, defend and hold harmless Buyer, its subsidiaries,
affiliates, successors, assigns, and designees and the respective directors,
officers, members, managers, employees, agents and representatives, from and
against any and all loss, liability, judgment, settlement, cost and expense
(including court costs and reasonable attorneys fees), claims, demands, actions
or damages which the Buyer may suffer directly related to the Product, including
without limitation to: (a) any alleged defect(s) in the Product or the materials
in the Product; (b) any negligent act, misfeasance or nonfeasance of Seller
or
any of its agents, servants or employees; (c) Sellers breach of any of the
representations, warranties or covenants made in this Agreement; (d) claims
that
Buyer does not have the rights granted in this Agreement or claims that the
Product Technology infringe a third party's rights, other than Buyers
application thereof; and (e) any and all fees, costs and expenses including
attorney’s fees incurred by or on behalf of Buyer in the investigation or
defense against any and all of the foregoing claims. However, upon notice to
Buyer that Seller has assumed the defense of any legal action or proceeding,
Seller shall not be liable to Buyer for any legal or other expenses subsequently
incurred by Buyer in connection with the defense thereof. Buyer agrees to
provide prompt notice of receipt of any such claim and Buyer shall not settle
any such claim without Seller prior knowledge and consent. This obligation
of
indemnity and defense shall survive any expiration or termination of this
Agreement.
17.
Equitable Remedies.
Each
Party recognizes that irreparable injury may result to its business and property
in the event of unauthorized disclosure of the other Party's Confidential &
Privileged Information and Proprietary Information. Each Party acknowledges
that
monetary damages alone may be an insufficient remedy for such injury and each
Party therefore agrees that in that event the other Party shall be entitled,
in
addition to any other remedies and damages available; (i) to an injunction
to
restrain any such actual or threatened disclosure, misuse, or violation and/or;
(ii) to compel specific performance of the terms and conditions
thereof.
Nothing
herein contained shall be construed to prohibit each Party from pursuing any
other remedy available, for such breach, including the recovery of damages.
Each
Party shall also be entitled to receive, in addition to any injunction, specific
performance, damages and any other relief for remedy it pursues or obtains,
reasonable expenses incurred in enforcing the unauthorized disclosure of
Confidential & Privileged and Proprietary Information terms of this
Agreement, including reasonable attorney's fees, whether or not legal action
is
actually initiated. No action or proceedings for specific performance,
injunction, damages, monies due or otherwise shall be deemed a waiver of such
Party's rights of options under this Agreement.
18.
No Waiver.
No
failure of Seller or Buyer to exercise or the partial exercise of any right
or
power given to it hereunder or failure to demand strict compliance with any
term, condition, covenant or other obligation hereof, and no practice of the
parties at variance with the terms hereof shall constitute a waiver of either
party's rights to demand exact compliance with the terms hereof or preclude
either party from the exercise of any right or remedy granted to this Agreement,
or any other instrument or document, or at law or in equity. Each other right
shall be deemed cumulative any may be exercised from time to time. Any waiver
of
a default hereunder shall be in writing and shall not operate as a waiver of
any
default.
19.
Invalid Provision.
If any
covenant or provision of this Agreement is invalid, illegal or inapplicable
of
being enforced by reason of any rule of law, administrative order, judicial
decision or public policy, all other conditions and provisions of this Agreement
shall, nevertheless, except as hereinafter expressly set forth, remain in full
force and effect and no covenant or provision shall be deemed dependent upon
any
other covenant or provision unless so expressed herein. The Parties agree and
consent that the court or other governmental body making such determination
shall reform such covenant, term, condition or other provision of this Agreement
so as to render the same enforceable to the fullest extent permitted by
law.
20.
Notices.
All
notices shall be in writing and shall be deemed to have been given three (3)
business days after being deposited in the mail by registered mail, postage
paid, or deposited with a reputable overnight national courier service, freight
prepaid or when faxed or mailed electronically (if during normal business hours
of if after the close of business on any day, the next business day) if to
Seller, addressed to its chief executive office as set forth on the first page
of this Agreement or such other address as Seller shall designate to Buyer
in
writing and, if to the Buyer, addressed to its chief executive office as set
forth on the first page of this Agreement or other such addresses as Buyer
shall
designate to Seller in writing.
21.
Entire
Agreements; Amendments. This
document constitutes the entire agreement between the parties relating to the
subject matter hereof, and no prior or concurrent representation, understanding
or agreement, whether written or oral, shall bind either party hereto in respect
of the manufacture and sale by Seller of Product to Buyer after the date first
above written. This Agreement can only be amended, modified or changed by a
written instrument properly signed by an officer or other authorized official
of
Seller or Buyer parties of this Agreement to be bound by such amendment. No
document used in connection with estimates, production or shipping orders,
or
acknowledgment thereof, shall amend, modify, revoke or otherwise affect the
provisions of this Agreement.
22.
Benefits.
This
Agreement shall inure solely to the benefit of and be binding upon Seller and
Buyer and their nominees, successors and assigns. Notwithstanding the foregoing,
Seller agrees that the benefits and rights under this Agreement will be binding
on its successor(s), assign(s) or designee(s) in the event there is a purchase
of assets, purchase of stock, purchase of the Product, Trademarks or other
intellectual property of the Product, or any other transfer from Seller that
may
impact Buyers benefits and rights under this Agreement. No other Person shall
benefit from this Agreement.
23.
Construction of Agreement.
Masculine, feminine and neuter pronouns used in this Agreement shall include
all
genders and the singular shall include the plural and vice versa, where the
context or facts so indicate.
24.
Captions.
Captions
in this are inserted solely for the convenience and shall not be construed
as a
limitation upon or expansion of the scope of any particular
provision.
25.
Not a Security and no Representations.
Buyer
acknowledges that it has entered into this Agreement after making an independent
investigation as to effectiveness of the Product and Enhanced Product on Wood
Based Products along with other sufficient testing to form a knowledgeable
opinion as to the revenue or profits which Buyer might be expected to realize.
Buyer acknowledges that no person has made any other representation that is
not
expressly set forth in writing in order to induce Buyer to accept and execute
this Agreement.
26.
Limitations of Claims.
Any and
all claims arising out of or relating to his Agreement or the relationship
among
the parties will be barred unless a judicial proceeding is commence within
one
(1) year from the date upon which the party asserting such claim knew or should
have known the facts giving rise to such claims.
27.
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed and delivered shall be an original, but all of which together
constitute one and the same instrument.
28.
Governing
Law; Section Headings.
This
Agreement shall be governed by and construed in accordance with the law of
the
State of Florida applicable to agreements executed and to be performed therein.
The section headings contained in this Agreement are for reference purposes
only, and shall not affect in any way the meaning or interpretation of this
Agreement. Any action, claim or proceeding brought under this Agreement shall
be
commenced exclusively in the courts of the State of Florida or in the federal
courts of the United States of America located in such State.
IN
WITNESS HEREOF, Seller and Buyer have caused this Agreement to be executed
by
their duly authorized representatives.
|
MEGOLA,
INC.
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|
By:
|
Date:
|
||||
|
Xxxx
Xxxxxxx, President & CEO
|
|||||
|
|
|||||
|
MSE
ENVIRO-TECH CORP.
|
|||||
|
By:
|
Date:
|
||||
|
Xxxxxx
Xxxxxx, President & CEO
|
|||||
|
BUYER
|
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WOODSMART
SOLUTIONS, INC.
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|
Date:
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|||||
|
Xxxxxxx
X. Xxxxxxx, President & CEO
|
|||||
Schedule
‘A’
Description
of Hartindo AF21 (“Product”)
Hartindo
AF21 is water-based, environmentally friendly, multi-purpose, non-toxic and
non-corrosive fire inhibitor. As opposed to the numerous, and often times toxic
fire retardants on the market that simply delay the spread of fire, AF21 renders
materials non-flammable, thereby preventing the spread of fire. It can be
applied to all natural fibers and many synthetics materials. A few of the many
applications include the treatment of furniture, carpet, clothing, mattresses
and building materials, onsite or during the manufacturing process, to
dramatically reduce the possibility of these materials catching
fire.
Schedule
‘B’
Description
of BLUWOOD
BluWood®
is the trademarked name of a family of products coated with a proprietary
two-part Infusion Film and DOT Wood Preservative technology, developed by a
team
of highly respected scientists under the direction of WoodSmart Solutions,
Inc.,
headquartered in Boca Raton, Florida.
BluWood®
wood framing components provide the building industry with a new level of
defense for protection of above ground, covered structure wood framing
components against the costly, damaging effects of mold fungus growth, rot
fungi
and wood ingesting insects, as well as limiting moisture absorption, a key
necessary element for mold growth.
This
industry-specific, factory-applied coating process is performed by a North
American network of WoodSmart Solutions, Inc., licensed application
companies.
Schedule
‘C’
Description
of BLUWOOD “Enhanced Product”
The
combination of Hartindo AF21 Fire Inhibitor and BluWood® , the “Enhanced
Product”, brings the ultimate in wood protection, preservative, and fire safety
to building components constructed of wood; from framing, joists, beams,
roofing, decks, sidings, trim board and paneling, to floors, walls and ceilings.
WoodSmart's BluWood® treated lumber and other wood components protect against
mold and mildew, wood rot, termites and other wood-ingesting insects, thereby
avoiding the potential nightmares that befall many home owners due to these
destructive elements. The addition of Hartindo AF21 Fire Inhibitor to the
BluWood® lumber treatment process adds the additional, much coveted element of
fire safety to all wooden components.
To
date,
the Enhanced Product has been produced through the mixing of AF21 and BluWood
at
a 9:1 ratio. It is expected that a more concentrated solution of AF21 will
be
made available for use in the Enhanced Product such that a 5 parts AF21 to
1
part BluWood (5:1 ratio) will be further mixed with 4 parts clean water to
produce the Enhanced Product.
Schedule
‘D’
Quantity
The
Buyer
shall be required to purchase from the Seller a minimum annual quantity of
Product upon the signing of this agreement. First year begins ninety (90) days
upon signing the agreement and/or ninety (90) days after initial delivery of
the
initial order from the Buyer.
Minimum
Purchase Requirements of Buyer
(d) Within
the first 12 months immediately following the completion of the above
requirements; 400,000 annual total gallons of Product
(e) The
next
13-24 months for an annual total of 550,000 gallons of Product
(f) The
next
25-36 months for an annual total of 700,000gallons of Product OR at the
equivalent above annual gallons and price per gallon, if Product is supplied
by
Seller to Buyer in a more concentrate form. To date, the ratio of Product
supplied by Seller to Buyer for testing is 9 to 1 (9 parts Product to 1 part
BLUWOOD).
The
Buyer
will retain the exclusive use of and rights to the Product as defined in this
Agreement beginning the 37th
month
and thereafter as long as the Buyer purchases a minimum of 1,500,000 gallons
of
Product per each following 12 month period.
The
sole
remedy of Seller if Buyer does not meet these minimum Product purchase
requirements is Buyer will lose its exclusivity and this Agreement will
terminate.
If
for
any reason the Seller or assignee, successor or new control person discontinues
the manufacturing of or cannot supply Product to the Buyer, Seller agrees to
sub-contract the manufacturing of the Product or arrange supply of the Product
sufficient to meet Buyers needs as long as Buyer has purchased sufficient
Product to meet the minimum Product purchases to retain Buyers exclusivity
as
defined in this Agreement and the Agreement has not been
terminated.
The
Seller further agrees and covenants that if the Agreement is terminated by
any
of the Parties to the Agreement that the Buyer will retain the use and
non-exclusive rights for the Product so the Buyer can continue the supply of
sales, marketing and distribution of the “Enhanced Product” to the Buyer’s
Licensed Agreement holders. Seller agrees to continue to supply Buyer the
Product at the same unit pricing, terms and conditions then in effect at the
date of termination.
