AMENDED AND RESTATED EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT
AMENDED
AND RESTATED EXCLUSIVE
LICENSE AND DISTRIBUTION AGREEMENT
THIS
AMENDED AND RESTATED EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT (the
“Agreement”) is entered into as of the 1st
day of
May, 2006 (the “Effective Date”) by and between Electric Aquagenics Unlimited,
Inc., a Delaware corporation having its principal offices located at 0000 Xxxx
00 Xxxxx, Xxxxxx, XX 00000 (“Licensor”), and Water Science, LLC, a limited
liability company having its principal offices located at 0000 X.X.
00xx
Xxxxx,
Xxxxx, Xxxxxxx 00000 (the “Licensee”).
RECITALS
Licensor
and Licensee have entered into that certain Exclusive License and Distribution
Agreement, dated September 16, 2005 (the “Initial License Agreement”);
Licensor
is the owner and will be the owner or exclusive licensee of all intellectual
property and other rights, title and interest in and to certain technology
that
changes the molecular composition of tap water to produce low-cost, non-toxic
electrolyzed oxidative fluids used for cleaning, disinfection, remediation
and
hydration previously developed and developed in the future (collectively, the
“Technology”), including, but not limited to, patents, service marks (the
“Servicemarks”),
trade
secrets and products utilizing or embodying the Technology listed on
Schedule
A
and any
other products previously developed or developed in the future by the Company,
whether or not utilizing or embodying the Technology (collectively, the
“Products”), and is the owner of all rights, title and interest in and to the
trademarks and Servicemarks as used in connection with the Products including
those listed on Schedule B
(collectively, the “Trademarks”).
Licensee
has obtained an exclusive license from Licensor to exploit the Technology,
to
make, use, distribute and sell the Products and to use the Trademarks in
connection therewith and Licensor desires to grant such license to Licensee
on
the terms and conditions set forth herein.
Licensor
and Licensee desire to amend and restate the Initial License Agreement to update
the list of Products and Technology covered by this License and to specify
the
pricing in connection therewith.
NOW,
THEREFORE, in consideration for the mutual covenants and promises contained
in
this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
| 1. |
GRANT
OF EXCLUSIVE RIGHTS;
CONSIDERATION
|
(a) Exclusive
Technology
and Product License.
Subject
to the other terms and conditions set forth in this Agreement, Licensor hereby
grants to Licensee the exclusive right and license to commercialize and exploit
the Technology which includes any and all future modifications, enhancements,
improvements or other developments with respect thereto developed, licensed
or
otherwise acquired by Licensor as Licensee deems appropriate and to manufacture
or have manufactured, use, distribute, license and sell the Products and to
offer related services, as well as sublicense others to do the same, including
under the claims of any patents owned or licensed by Licensor, in the
territories listed on Schedule
C
(collectively, the “Territories” or the “Territory”).
(b) Exclusive
Trademark License.
Subject
to the other terms and conditions set forth in this Agreement, Licensor hereby
grants to Licensee the exclusive right and license to use the Trademarks and
Servicemarks in connection with the promotion, marketing and sale of the
Products in the Territories.
(c) Exclusive
Product
Distribution Rights.
Subject
to the other terms and conditions set forth in this Agreement, Licensor hereby
appoints Licensee, and Licensee accepts such appointment, as Licensor’s
exclusive distributor in the Territories with respect to the Products that
are
manufactured or caused to be manufactured by Licensor or any third party
manufacturer. Licensor agrees that it shall only manufacture or cause to be
manufactured the Products for sale and further distribution by Licensee in
the
Territories. Licensee shall have the right to manufacture or engage
subcontractors to manufacture and/or distribute part or all of the Products,
provided that such subcontractors comply with all applicable terms under this
Agreement with respect to activities they may undertake relating to the Products
in the Territories. Licensee shall be responsible for all warehousing,
distribution, order processing and fulfillment, billing and collection
activities with respect to sales of the Products by Licensee in the Territories.
(d) Product
Orders.
All
purchase orders submitted by Licensee and accepted by Licensor for the Products
are and shall be subject to this Agreement and shall be deemed to incorporate
the terms and conditions of this Agreement, whether or not so specified in
such
purchase orders. Licensor’s acceptances of orders shall be evidenced by Licensor
signing and returning the acknowledgment copy of the order within three (3)
days
after receipt of the order, together with a pro-forma invoice for the Products
covered by that order. All orders shall contain the information necessary for
Licensor to fulfill the order, which information shall include the
following:
| (i) | A reference to this Agreement and Licensee’s purchase order number; |
| (ii) | A description and quantity of each of the Products required; |
|
(iii)
|
The
address to which Products are to be directed and the address to which
Licensor’s invoice is to be sent; and
|
| (iv) | The requested delivery date. |
(c) Product
Returns.
Licensor shall accept any returns of or replace any of the Products under the
following conditions:
| (i) | Licensee shall inspect all of the Products as soon as it is practicable after shipment thereof and shall notify Licensor in writing, within thirty (30) days of inspection thereof, if any such Products do not conform to the applicable specifications. Licensee shall give written notice to Licensor of hidden non-conformities, which cannot be ascertained upon an initial examination, within twenty (20) days from the discovery of such hidden non-conformities; and |
|
(ii)
|
Any
defect in any of the Products to be returned shall have resulted
from the
manufacture or packaging of the Products prior to shipment
thereof.
|
Licensor
shall issue a credit to Licensee for the purchase price paid by Licensee for
the
Products found to be defective or replace any Products found to be defective
with the same quantity of products in good and salable condition, shipping
such
replacement Products to Licensee’s designated shipping destination at Licensor’s
expense; provided that Licensor reserves the right to require Licensee, at
Licensor’s expense, to return to Licensor all or part of the Products found to
be defective or sell it for salvage, destroy it, or otherwise dispose of it
pursuant to Licensor’s instructions.
(d) Product
Training and Promotional Assistance.
Licensor shall provide Licensee with all necessary information concerning
Product function and use and will conduct training sessions as well as provide
promotional and advertising material to be used in the Territory for use by
Licensee. Licensor shall keep Licensee informed of marketing and promotional
efforts regarding the Products undertaken by Licensor, and shall collaborate
with Licensee in the marketing of the Products within the
Territory.
D-2
(e) Manufacturing
Option; Escrow of Manufacturing Specifications and Related
Information.
In the
event that Licensee desires to manufacture the Products or cause the Products
to
be manufactured by third parties for distribution within the Territory, Licensor
shall cooperate with Licensee in doing so. Within thirty (30) days after the
Effective Date, Licensor shall, deposit with an independent third party escrow
agent mutually acceptable to Licensor and Licensee, a complete set of the
specifications, processes, formulas, recipes, parameters, instructions and
requirements, including all know-how, trade secrets and other information
necessary to manufacture the Products currently manufactured by Licensor,
(collectively, the “Deposit Materials”) and will supplement the Deposit
Materials to include all such information with respect to Products developed
and
manufactured by Licensor in the future. The Deposit Materials shall be released
to Licensee upon Licensee’s request in the event that Licensee decides to
manufacture the Products or cause the Products to be manufactured by a third
party. Licensor shall bear all expenses incurred in connection with establishing
and maintaining such escrow while this Agreement is in effect.
(f) Order
of Precedence.
The
terms and conditions of this Agreement shall take precedence over and govern
in
the event of conflict between the terms and conditions of this Agreement the
terms and conditions of any other documents and forms of the parties, including,
without limitation, Licensee’s quotation request and purchase order forms,
Licensor’s quotation form, and any confirmation, acknowledgment or other similar
document. Any provision or data in any order, any subordinate document such
as
shipping releases, or any other document originated by either party, or
contained in any documents or forms attached to or referenced in any of the
above documents, which modifies, supplements or conflicts with the terms of
this
Agreement shall not be binding unless agreed to in writing by the
parties.
(g) Purchase
Prices.
Licensee shall be charged and agrees to pay the rates set forth on Schedule
D
hereto,
for its purchase of the Products. Such prices shall remain in effect for not
less than twelve (12) months from the Effective Date. Thereafter, Licensor
shall
present any proposed changes to the rates no less than one hundred eighty (180)
days prior to such rates becoming effective, unless the modification of such
pricing is commercially mandated based upon a significant increase in the
Products’ materials, parts and/or manufacturing labor costs, and Licensor
provides Licensee ninety (90) days prior written notice of such modification,
and the reasons therefor. Licensee may request, at its election, that Licensor
provide satisfactory evidence supporting the justifications for any price
modification. Licensee, or Licensee’s advisors, legal representatives or
accountants may, at Licensee’s expense, upon 5 days’ notice, during regular
business hours, audit the books and records of the Licensor with respect to
information relating to costs, prices and other information relating to the
Products. If the parties are not able to reach an agreement within such period,
Licensor shall be able to set such rates as it deems appropriate, with such
rates taking effect thirty (30) days thereafter, in which event Licensee shall
have the right to manufacture the Products itself or through others and/or
terminate this Agreement immediately by providing written notice thereof to
Licensor. The purchase prices shall be expressed in U.S. Dollars.
Notwithstanding any of the foregoing, the Parties agree that the rates set
forth
on Schedule
D
shall
never exceed the products’ materials, parts and/or manufacturing labor costs
(excluding any allocation or costs for general and administrative costs or
expenses) plus twenty-five percent (25%).
(h) Obligation
to Update. From
time
to time, but in any event on or before each June 30 and December 31 of each
calendar year and within three months after a Product has been commercialized
by
the Licensor, Licensor shall update the schedules of Products and Technology
to
incorporate new developments or new intellectual property of the Company which
in each and every respect will be covered by the License granted to the Licensee
hereunder. No update of the Schedules attached to this Agreement as a result
of
the development of new Technology or Products shall in any event give rise
to a
change or modification of the prices of the existing Products or Technology,
which shall only be modified in accordance with Section 1(g) above.
D-3
(i) Taxes
and Other Charges.
In
addition to the applicable purchase prices, Licensor shall separately invoice
for, and Licensee shall pay, all sales, use, excise, value added, gross
receipts, turnover and other taxes and charges imposed by law or required by
any
government to be paid or collected by Licensor in connection with the purchase,
delivery, sale or use of the Products pursuant to this Agreement (other than
taxes imposed on Licensor’s income).
(j) Payment
Terms.
All
payments due to Licensor from Licensee under this Agreement shall be paid to
the
applicable Licensor by check or wire transfer. Invoices may be rendered by
the
Licensor at any time after the date of Delivery, as defined below. Payment
shall
be made in U.S. Dollars, no later than ninety (90) days following the date
of
Delivery. Each shipment shall constitute an independent transaction and Licensee
shall pay the invoice for each such transaction strictly in accordance with
these payment terms.
(k) Delivery.
Products will be considered delivered by Licensor for purposes of this Agreement
when delivered to Licensee’s designated location or designated carrier FOB.
Licensor shall: (a) contract for carriage of the Products to such destination
and pay the freight, and (b) pay any loading costs to the extent they are not
included in the freight. Licensee shall pay all other costs incurred in
connection with shipment of the Products to the ultimate destination and
unloading.
(l) Risk
of Loss and Passage of Title.
Risk of
loss and title shall pass to Licensee at the time of delivery of the Products
to
Licensee’s designated location or carrier.
(m) Technical
Information and Training Regarding the Technology and the Products.
Within
twenty (20) business days after the Effective Date of this Agreement, Licensor
shall disclose to Licensee any and all technical information and know-how then
within the knowledge or possession of Licensor which was not already disclosed
to Licensee and which would be helpful to Licensee regarding the Technology
and
the manufacture, use or sale of the Products, and the parties shall formulate
a
training program and schedule for Licensor to provide training to Licensee’s
personnel. Training, know-how and information transfer shall take place either
at Licensee’s offices or telephonically. Licensor shall, throughout the term of
this Agreement, cause its employees and any third parties who are employed
or
engaged to do research, development or other inventive work to disclose to
Licensor all improvements, refinements and modifications to the Technology,
Products or new Products developed by them utilizing or embodying the Technology
and Licensor shall disclose same to Licensee and inform Licensee promptly of
any
new developments, all of which shall be covered by the licensed rights granted
to Licensee hereunder.
(n) Consideration.
In
consideration of the rights granted to Licensee hereunder and Licensor’s
performance of its obligations hereunder, Licensee has paid to Licensor a
license fee of One Million Dollars (US$1,000,000) on the date of the execution
and delivery of the Initial License Agreement.
(o) Royalty
Payments.
In
addition to the License Fee payable pursuant to Section 1(n) hereof, Licensee
shall pay to Licensor a royalty fee (the “Royalty Fee”) for every “net” Product
sold in accordance with the following royalty fee payment schedule: a four
percent (4%) Royalty Fee on all annual net sales up to $5,000,000; three percent
(3%) Royalty Fee on all net sales from $5,000,001 to $10,000,000; and a two
percent (2%) Royalty Fee on all net sales in excess of $10,000,0000. For
purposes of this Agreement, “net” is defined as gross units of the Products
sold, less returns, charge backs and any units associated with uncollectible
monies. Licensor, or Licensor’s advisors, legal representatives or accountants
may, at Licensor’s expenses, upon five (5) days’ notice, during regular business
hours, audit the books and records of the Licensee with respect to information
relating to net sales and the calculation of the Royalty Fee
hereunder.
D-4
| 2. |
MUTUAL
OBLIGATIONS
|
(a) Quality
Control.
Each
party agrees that it shall maintain a high standard of quality with respect
to
the use of the Trademark and with respect to the Products and packaging for
the
Products, as well as in all depictions, marketing and advertising of Products.
(b) Regulatory
Compliance.
Licensee acknowledges that certain licenses and label and packaging approvals
not previously obtained by Licensor may be required to be obtained with respect
to the Products from appropriate government authorities in the Territory from
time to time during the term of the Agreement. Licensor will obtain and maintain
all such licenses and approvals at its own expense and will provide assistance
to Licensee in obtaining whatever licenses and approvals Licensee may be
required to obtain in order for Licensee to manufacture the Products or cause
the Products to be manufactured by third parties. Licensor and Licensee will
make available to each other information and assistance necessary to complete
all applications and requests for approval.
(c) Reporting
of Negative Events.
Each
party has the overriding interest in protecting the reputation of the Products
and the Trademark. Accordingly, if either party, at any time, has a reasonable
basis to believe that any act or occurrence related to the Products or the
Trademark presents or has presented any threat to public health or safety or
otherwise are likely to draw negative attention from any governmental agency,
consumer or environmental group, media or other organization or any individual
(any of such occurrences being an “Event”), such party will immediately notify
the other party of the facts giving rise to such belief or suspicion. In all
such cases, the parties will closely coordinate with each other with respect
to
any actions they might take or permit and in respect to all public statements
either party might make regarding the Event, and shall, after consultation
with
each other, follow all agreed plans with respect thereto.
(d) Maintenance
of Product Complaint Records.
Each
party agrees to maintain all records relating to consumer complaints and
litigation relating to the Products and shall make such records available to
the
other party for inspection upon the other party’s reasonable request. Such
records (other than records relating to consumer complaints) shall be maintained
for at least two (2) years after the matter to which they pertain is closed
or
for the period required by the retaining party’s document retention policy
therefor, whichever is longer. Records relating to consumer complaints shall
be
maintained for at least one (1) year after the complaint is received or for
the
period required by the retaining party’s document retention policy therefor,
whichever is longer. All records provided under this Section shall be considered
to be confidential information subject to the provisions of Section 13(k)
of this Agreement.
| 3. |
REPRESENTATIONS,
WARRANTIES AND COVENANTS OF
LICENSOR
|
(a) Representations
and Warranties.
Licensor represents and warrants to Licensee that: (i) it is the sole owner
of
all rights, title and interest, including all intellectual property rights
in
and to the Technology and the Products except for the portions thereof licensed
from third parties as specified in Schedule
E
attached
hereto; (ii) its entering into this Agreement does not require any third party
consent or approval that has not already been obtained; (iii) it has sufficient
right, power and authority to grant the rights and licenses to Licensee as
set
forth in this Agreement, (iv) that neither the Technology nor the Products
infringe any third party intellectual property or other rights; (v) that the
Products sold by or through Licensor to Licensee shall be merchantable and
fit
for their intended purposes; and (vi) Licensee has no intellectual property
rights or other license rights to any technology or products, except those
granted to Licensee hereunder. Licensor has not made and will not make any
commitments to others inconsistent with or in derogation of Licensee’s rights.
D-5
(b) Maintenance
of Exclusivity.
Licensor represents and warrants to Licensee that it has not, and covenants
to
Licensee that during the term of this Agreement, it will not, grant any other
license with respect to the Technology or for sale, use or manufacturing of
the
Products or for use of the Trademark in the Territories.
(c) Provision
of Information,
Know-How and Training.
Licensor shall provide to Licensee all pertinent and necessary information
in
order for Licensee to apply for and obtain any required safety or other
regulatory approvals to commercially market and sell the Products, as well
as
all know-how and training reasonably required for Licensee to use and market
the
Technology and the Products.
(d) Maintenance
of Product
Approvals and Intellectual Property Rights.
Licensor shall pursue, undertake its best efforts to obtain and maintain all
required approvals, license, permits and other regulatory registrations for
the
Products in the Territories as well as all patent and other intellectual
property rights in and to the Products and all trademark rights in and to the
Trademark and all of its registrations therefor, and Licensor will not abandon
or permit the expiration of any registration, unless so directed by a court
of
law. Should Licensor determine that it is no longer desirable in the conduct
of
its business, or otherwise determines that it is unable to maintain said rights,
Licensor shall notify Licensee in writing of such determination prior to
abandoning same. Licensor agrees to take all reasonably necessary steps,
including, without limitation, making of all necessary filings in the U.S.
Patent and Trademark Office and in the trademark office of any country or in
any
court to maintain such rights. Licensor agrees to take corresponding steps
with
respect to each new application for patent protection of the Technology and/or
the Products and/or application for registration of the Trademark. Any and
all
expenses incurred in connection with such activities shall be borne by
Licensor.
(e) Marketing
and Promotional Efforts; References to Licensee or Use of Licensee
Name.
Licensor shall coordinate its press, marketing and promotional efforts with
respect to the Technology and the Products with Licensee and shall provide
to
Licensee a copy of all proposed press releases, advertisements and promotional
materials for approval prior to publication or use. Licensor shall not use
any
disapproved materials. Licensor shall not refer to Licensee or use Licensee’s
name or trademarks in any press release, product endorsement, marketing or
other
written materials, public filing or any other publication or statement without
the prior written approval by Licensee.
| 4. |
INFRINGEMENT
BY THIRD PARTIES
AND XXXX MARKET
GOODS
|
(a) Notification
of Infringements.
Should
Licensor or Licensee become aware of any infringement or alleged infringement
of
any patents covering any portion of the Technology or the Products, or any
other
infringement or violation of the intellectual property rights (including moral
rights) or trade secrets relating to the Technology or the Products, that party
shall immediately notify the other party in writing of the name and address
of
alleged infringer, the alleged acts of infringement, and any available evidence
of infringement.
(b) Enforcement
of Rights.
Licensor shall have primary responsibility for enforcing any patent rights
or
other intellectual property rights (including moral rights), or trade secret
rights relating to the Technology or the Products against any third parties
and
shall bring legal action against such third parties to enforce such rights.
If
Licensor fails to take action against any such third parties within thirty
(30)
days of such notification, Licensee may, at its option, bring legal action
against such third parties in the name of Licensee and/or Licensor to enforce
such rights. In the event that such litigation results in a damage award
favoring the party bringing action to enforce any such rights, such a damage
award shall be the property of the party that pursued such
litigation.
D-6
(c) Xxxx
Market Goods.
Licensor
agrees to take whatever commercially reasonable actions necessary to eliminate
and remove all Products sold, offered for sale, manufactured or imported into
any of the Territories through distribution channels other than those authorized
or intended by Licensor (the “Xxxx Market Products”).
| 5. |
INDEMNIFICATION
|
(a) Indemnification
by Licensee.
Licensee shall, at its expense, indemnify, defend and hold harmless Licensor,
its employees, officers and agents (each, a "Licensor Indemnified Party" and
collectively, the "Licensor Indemnified Parties") from and against any and
all
claims and causes of action of any nature made or lawsuits or other proceedings
filed or otherwise instituted against any of the Licensor Indemnified Parties
arising from or relating to any breach by Licensee of any of its
representations, warranties or obligations hereunder. Licensee shall be
responsible for and shall pay all costs and expenses related to such claims
and
lawsuits for which it shall indemnify the Licensor Indemnified Parties,
including, but not limited to, the payment of all attorneys' fees and costs
of
litigation, defense and/or settlement of same.
(b) Indemnification
by Licensor.
Licensor shall, at its expense, indemnify, defend and hold harmless Licensee,
its employees, officers and agents (each, a “Licensee Indemnified Party” and
collectively, the “Licensee Indemnified Parties”) from and against any and all
claims and causes of action of any nature made or lawsuits or other proceedings
filed or otherwise instituted against any of the Licensee Indemnified Parties
arising from or relating to any breach by Licensor of any of its
representations, warranties or obligations hereunder. Licensor shall be
responsible for and shall pay all costs and expenses related to such claims
and
lawsuits for which it shall indemnify the Licensee Indemnified Parties,
including, but not limited to, the payment of all attorney’s fees and costs of
litigation, defense and/or settlement of same.
(c) Indemnification
Procedures.
In
claiming any indemnification hereunder, the indemnified party shall promptly
provide the indemnifying party with written notice of any claim that the
indemnified party believes falls within the scope of the foregoing paragraph.
The indemnified party may, at its own expense, assist in the defense if it
so
chooses, provided that the indemnifying party shall control such defense and
all
negotiations relative to the settlement of any such claim and further provided
that any settlement intended to bind the indemnified party shall not be final
without the indemnified party’s written consent, which shall not be unreasonably
withheld.
| 6. |
TERM
AND TERMINATION
|
(a) Term.
The
term of this Agreement shall commence on the Effective Date and continue in
effect perpetually unless sooner terminated as provided below (the “Term”).
(b) Termination
by Licensor.
Licensor shall have the right to terminate this Agreement if Licensee materially
defaults in performing any of its other obligations under this Agreement or
if
Licensee becomes insolvent or if a proceeding is commenced by or against
Licensee seeking liquidation, rehabilitation, reorganization, conservatorship
or
other relief with respect to Licensee or its assets under any bankruptcy,
insolvency or other similar law, or seeking the appointment of a trustee,
receiver or other similar official with respect to Licensee and/or a substantial
portion of its assets, and such material breach is not cured, or such proceeding
is not dismissed, within sixty (60) days after Licensor has delivered to
Licensee written notice of its intent to terminate the Agreement and specifying
the reason for termination.
D-7
(c) Termination
by Licensee.
Licensee shall have the right to terminate this Agreement if Licensor materially
defaults in performing any of its obligations hereunder, or if Licensor becomes
insolvent or if a proceeding is commenced by or against Licensor seeking
liquidation, rehabilitation, reorganization, conservatorship or other relief
with respect to Licensor or its assets under any bankruptcy, insolvency or
other
similar law, or seeking the appointment of a trustee, receiver or other similar
official with respect to Licensor and/or a substantial portion of its assets,
and such material breach is not cured, or such proceeding is not dismissed,
within sixty (60) days after Licensee has delivered written notice to Licensor
of its intent to terminate this Agreement. Additionally, Licensee shall have
the
right to terminate this Agreement at any time for convenience by providing
written notice thereof to Licensor not less than thirty (30) days prior to
the
effective date of such termination and specifying the reason for
termination.
(d) Post-Termination
Obligations; Phase-out Period.
Subsequent to the termination of this Agreement for any reason, Licensee may,
for up to one hundred eighty (180) days after the effective date of such
termination, continue to sell its inventory of the Products and continue using
the Technology and the Trademarks in connection therewith.
(e) Effect
of Termination;
Licensee’s Continued Rights in the Event of Licensor Default or Bankruptcy;
Refund of License Fee.
Nothing
herein shall be construed to release either party of any obligation which
matured prior to the effective date of such termination or which may continue
beyond such termination. Licensor acknowledges and agrees that this Agreement
and all rights and licenses granted under or pursuant to this Agreement by
Licensor to Licensee are, and shall otherwise be deemed to be licenses to rights
to intellectual property. Licensor agrees that Licensee, as a licensee of such
rights under this Agreement, shall retain and may fully exercise all of its
rights and elections under applicable bankruptcy, insolvency or other similar
law, including specifically but without limitation, Section 362(n) of the U.S.
Bankruptcy Code, as amended. Licensor further agrees that, in the event of
a
Licensor default, or a dissolution or other discontinuance of Licensor’s
business operations or existence, or the commencement of a voluntary or
involuntary proceeding against Licensor seeking liquidation, rehabilitation,
reorganization, conservatorship or other relief with respect to it or its assets
under any bankruptcy, insolvency or other similar law, Licensee, in addition
to
its right to terminate this Agreement, shall also have the right, at its
election, to retain all of its rights under this Agreement. In such event,
Licensee shall further have the right to either require Licensor to assign
to
Licensee any or all manufacturing, supply, license or other agreements with
third parties to which Licensor is a party relating to the Technology and/or
the
Products (as well as all related product regulatory approvals, permits and
licenses to the extent legally transferable or to enter into its own agreements
with such third parties and obtain its own regulatory approvals, permits and
licenses). Licensee shall also be entitled to release of the Deposit Materials
from escrow in such event. Additionally, in the event that this Agreement is
terminated by Licensee other than for convenience at any time within five (5)
years after the Effective Date, Licensee shall be entitled to a refund of the
license fee paid by Licensee to Licensor pursuant to this Agreement, pro-rated
based on the ratio that the time elapsed as of such termination since the
Effective Date bears to five (5) years.
| 7. |
TAXES,
GOVERNMENTAL APPROVALS AND
LIABILITY
|
(a) Taxes.
Licensee shall be solely responsible for the payment and discharge of any taxes,
duties, or withholdings relating to any transaction of Licensee in connection
with the manufacture, use, sale, licensing or other commercialization or
exploitation of the Products. Licensor is solely responsible for any and all
taxes, fees relating to its ownership of intellectual property rights in and
to
the Products, including but not limited to taxes on all amounts paid to Licensor
hereunder.
D-8
(b) Government
Approvals.
Licensee shall, at its own expense, be responsible for applying for and
obtaining any approvals, authorizations, or validations relative to the
manufacture and sale of the Products not previously obtained by Licensor under
the appropriate Territory laws or otherwise, including authorization for the
remittances hereunder from the appropriate governmental
authorities.
| 8. |
INDEPENDENCE
OF THE PARTIES
|
This
Agreement creates no relationship of partnership, joint venture, employment,
franchise, or agency between the parties. This Agreement shall not constitute
the designation of either party as the representative or agent of the other,
nor
shall either party to this Agreement have the right or authority to make any
promise, guarantee, warranty, or representation, or to assume, create, or incur
any liability or other obligation of any kind, express or implied, against
or in
the name of, or on behalf of, the other party, without the other party’s prior
written consent and approval.
| 9. |
SUBLICENSE
AND ASSIGNMENT
|
(a) Sublicensing.
Licensor authorizes Licensee to grant sublicenses of the rights granted to
it
hereunder to its subdistributors, contractors and other third parties as
reasonably necessary for Licensee to perform its obligations hereunder, upon
Licensor’s prior written consent, which consent shall not be unreasonably
withheld.
(b) Assignment.
Any
assignment of this Agreement by either party to a third party (except by
Licensee to an affiliated entity or to a person or entity acquiring
substantially all of Licensee’s assets or a controlling equity ownership
interest in Licensee, which shall be permitted without the consent or approval
of Licensor) shall
be
null and void unless consented to in advance in writing by the other party
hereto, which consent shall not be withheld unreasonably.
| 10. |
NOTICES
|
Any
notice or communication permitted or required under this Agreement shall be
in
writing and shall be delivered in person or by courier, or mailed by certified
or registered mail, postage prepaid, return receipt requested, and addressed
as
set forth for the intended recipient in the first paragraph of this Agreement,
attention: President, or to such other address as shall be given in accordance
with this Section. If notice is given in person, by courier or facsimile, it
shall be effective upon receipt; and if notice is given by mail, it shall be
effective five (5) business days after deposit in the mail.
| 11. |
ARBITRATION;
LITIGATION; GOVERNING LAW; JURISDICTION AND
VENUE
|
Except
with respect to any claim by either party against the other party relating
to
this Agreement and seeking injunctive relief or specific performance, any
dispute, controversy or claim arising out of or relating to this Agreement
or
the breach, termination or validity thereof, shall be finally settled in
accordance with the commercial arbitration rules of the American Arbitration
Association (the “AAA”)
then
in effect, by a panel of three (3) arbitrators. Each party shall have the right
to appoint one (1) arbitrator from the list of arbitrators supplied to the
parties by the AAA, and the two arbitrators so appointed shall appoint the
third. The parties may alternately agree to a single arbitrator in lieu of
a
panel of three (3) arbitrators. The place of arbitration shall be Miami,
Florida, U.S.A. and the parties agree to submit to personal jurisdiction
exclusively in such venue for such arbitration and exclusively in the state
courts located in such venue for any proceeding brought by either party seeking
injunctive relief or specific performance. The internal procedural and
substantive laws of Florida shall govern this Agreement and all questions of
arbitral procedure, arbitral review, scope of arbitral authority, and arbitral
enforcement as well as in any other legal proceedings brought by either party
involving this Agreement. The parties agree that the award of the arbitrators
shall be the sole and exclusive remedy between them regarding any claims,
counterclaims, issues or accountings presented or pled to the arbitrators,
that
the award shall be made and shall be promptly payable in U.S. dollars without
deduction or offset, and that any costs, fees or taxes incurred to enforcing
the
award shall, to the maximum extent permitted by law, be charged against the
party resisting such enforcement. The award shall include interest accruing
from
the date of damages incurred for breach or other violation of this Agreement,
and from the date of the award until paid in full, at a rate to be fixed by
the
arbitrators. The prevailing party in any proceeding relating to this Agreement
shall be entitled to payment of its attorney’s fees and costs by the
nonprevailing party.
D-9
| 12. |
IDENTIFICATION
OF TECHNOLOGY AND PRODUCTS
|
(a) Marking.
Licensee agrees to xxxx, as appropriate, the following with appropriate
copyright notices, trademark notices, patent pending notices and/or patent
numbers in conformity with applicable law:
| 1. |
all
units of the Products made or sold by or for Licensee and/or its
sublicensees;
|
| 2. |
all
packaging of the Products, and
|
| 3. |
all
brochures, manuals, and documents describing the
Products.
|
(b) License
Disclosure.
Unless
otherwise directed by Licensor, Licensee shall state in a manner acceptable
to
Licensor and approved by Licensor, in a prominent position on all materials
and
things specified in sub-Section 12(a)
above,
that
the Products are manufactured and/or distributed by Licensee under license
from
Licensor.
| 13. |
GENERAL
PROVISIONS
|
(a) Entire
Agreement.
The
parties hereto have read this Agreement and agree to be bound by all its terms.
The parties further agree that this Agreement constitutes the full, complete
and
exclusive statement of the Agreement between them and supersedes all proposals,
oral or written, and all other communications between them relating to the
subject matter of this Agreement.
(b) Modifications.
No
agreement changing, modifying, amending, extending, superseding, discharging,
or
terminating this Agreement or any provisions hereof shall be valid unless it
is
in writing and is dated and signed by duly authorized representatives of each
party.
(c) Severability.
Should
any term or provision of this Agreement be finally determined by an arbitration
panel to be void, invalid, unenforceable or contrary to law or equity, the
offending term or provision shall be modified and limited (or if strictly
necessary, deleted) only to the extent required to conform to the requirements
of law and the remainder of this Agreement (or, as the case may be, the
application of such provisions to other circumstances) shall not be affected
thereby but rather shall be enforced to the greatest extent permitted by
law.
(d) Waiver.
Failure
of any of the parties hereto to enforce any of the provisions of this Agreement
or any rights with respect thereto or to exercise any election provided for
therein, shall in no way be considered a waiver of such provisions, rights,
or
election or in any way to affect the validity of this Agreement. No term or
provision hereof shall be deemed waived and no breach excused, unless such
waiver or consent shall be in writing and signed by the party claimed to have
waived or consented. Any consent by any party to, or waiver of, a breach by
the
other, whether express or implied, shall not constitute a consent or waiver
of,
or excuse for any other, different or subsequent breach. All remedies herein
conferred upon any party shall be cumulative and no one shall be exclusive
of
any other remedy conferred herein by law or equity.
D-10
(e) Time
is of the Essence.
Time is
of the essence in the performance of each and every obligation and covenant
imposed by this Agreement.
(f) Binding
Agreement.
This
Agreement shall be binding not only upon the parties hereto, but also upon
and
without limitations thereto, their assignees, successors, divisions,
subsidiaries, officers, directors, employees, and sublicensees.
(g) Force
Majeure.
Neither
Licensor nor Licensee shall be responsible for any failure to fulfill its
obligations due to causes beyond its reasonable control, including without
limitation, acts or omissions of government or military authority, acts of
God,
acts of terrorism, materials shortages, transportation delays, fires, floods,
labor disturbances, riots, wars, or inability to obtain any export or import
license or other approval of authorization of any government
authority.
(h) Expenses.
Except
as provided elsewhere in this Agreement, all of the legal, accounting, and
other
miscellaneous expenses incurred in connection with this Agreement and the
performance of the various provisions of this Agreement shall be paid by the
party who incurred the expense.
(i) Survival.
All
covenants, agreements, representations, warranties and provisions of this
Agreement which by their nature survive the termination of this Agreement shall
so survive after the effective date of termination of this
Agreement.
(j) Disclaimer
of Warranties; Limitation of Liability.
EXCEPT
FOR THE WARRANTIES EXPRESSLY PROVIDED HEREIN, NEITHER PARTY HERETO MAKES ANY
WARRANTIES AND DISCLAIMS ANY IMPLIED WARRANTIES OF ANY KIND, INCLUDING, BUT
NOT
LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR AGAINST INFRINGEMENT WITH REGARD TO THE PRODUCTS OR THE PERFORMANCE
OF ITS OBLIGATIONS HEREUNDER. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
WITH RESPECT TO ANY PUNITIVE, SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT
DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS ARISING OUT OF THE
PERFORMANCE OF NONPERFORMANCE OF THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
(k) Confidentiality.
The
terms of this Agreement as well as any information disclosed by either party
to
the other pursuant to this Agreement, except as set forth below, shall be
considered confidential to the disclosing party and shall not be disclosed
or
used by the receiving party other than as expressly authorized herein without
the prior written consent of the disclosing party, which consent may be withheld
by the disclosing party in its sole and absolute discretion. The foregoing
obligation of confidentiality shall not apply to information which (a) was
publicly available at the time of the disclosure to the receiving party;
(b) subsequently becomes publicly available through no fault of the
receiving party; (c) is rightfully acquired by the receiving party, subsequent
to disclosure by the other party from a third party who is not in breach of
a
confidential relationship with regard to such information; (d) is independently
developed by the receiving party solely through the efforts of individuals
who
did not have access to the confidential information, as evidenced by the
receiving party’s written records; or (e) is required to be made public by court
order, law or regulation, provided that the disclosing party is notified as
soon
as practicable prior to such compelled disclosure in order to contest
same.
D-11
(l) Construction;
Counterparts.
The
headings used in this Agreement are for reference purposes only and shall not
be
considered a part of this Agreement. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same agreement.
[THE
REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.
SIGNATURE
PAGE FOLLOWS.]
D-12
IN
WITNESS WHEREOF,
the
parties hereto, by and through their respective undersigned duly authorized
representatives, have caused this Agreement to be executed as of the Effective
Date.
| LICENSOR: | ||
| Electric Aquagenics Unlimited, Inc., a Delaware corporation | ||
| |
|
|
| By: | /s/ Xxxxxxx X. Xxxxxx | |
|
Name: Xxxxxxx X. Xxxxxx |
||
| Title: Chief Executive Officer | ||
| LICENSEE: | ||
| Water Science, LLC | ||
| |
|
|
| By: | /s/ Xxxxx Xxxxxxx | |
|
Name: Xxxxx Xxxxxxx |
||
| Title: Sole Member | ||
D-13
