Hartindo AF21 Product, Purchase, Sales, Distribution, Marketing and Service Agreement
Hartindo
AF21
This
HARTINDO AF21 PRODUCT Agreement (the “Agreement”) is made
this 11th day of November, 2009 by and among Megola, Inc., a Nevada Corporation
(“Supplier”) and EcoBlu
Products, Inc., a Nevada Corporation (“Buyer”). This
Agreement replaces all prior Agreements related to the subject.
RECITALS
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A.
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WHEREAS,
Supplier has the exclusive rights to manufacture and supply Hartindo Fire
Inhibiting AF21 product, which is more particularly described on Schedule
A attached hereto, (“AF21” or the
“Product”) within North America; and is fully authorized and willing to
grant the Buyer, through its’ Agent, the exclusive rights to purchase,
use, market, sell and distribute the Product when combined
with Bluwood or EcoBlu proprietary product to create an
enhanced fire inhibiting product (“Enhanced Product”) for use on and/or in
any wood based material and which is more particularly described in
Schedule A attached hereto; and
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B.
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WHEREAS,
Buyer has the rights to the proprietary product commonly known as BLUWOOD
(“BLUWOOD”)and/or PERFECT BARRIERS, and other proprietary EcoBlu products
which are more particularly described on Schedule A attached hereto;
and
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C.
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WHEREAS,
the Product may be combined with the BLUWOOD or EcoBlu proprietary product
to create an enhanced fire inhibiting product (the “Enhanced
Product”) for use on and in wood based materials, and which is more
particularly described on Schedule A attached hereto;
and
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D.
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WHEREAS,
Buyer desires to obtain: (i) a supply of the product (ii) use of the
technical data, intellectual property and other information relating to
the Product application, handling and storage with respect to the Product
and all modifications there of as more fully set forth herein while this
Agreement is in effect (iii) the exclusive use of and rights of
the Product for application in the Enhanced Product for sales and
distribution in North America and (iv) to obtain the co-exclusive use of
and rights of the Product for use on or in any wood based material
required for use in residential and commercial building construction in
North America; and (v) to set terms in place for the potential to obtain
the exclusive use and rights to merchandise the Enhanced Product for use
on or in any wood based materials required for use primarily in
residential and commercial building construction worldwide;
and
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E.
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The
Buyer agrees that the Product is for either their own usage and
applications and/or is permitted to resale AF21 Standard or AF21
Concentrate to their other coaters, sublicense for the use on or in any
wood based materials but are prohibited from engaging in direct reselling
of the AF21 products unless in the form of the enhanced product or as
applied on or in their approved wood based materials required for use
primarily in residential and commercial building
construction.
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F.
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The
Seller and Buyer both acknowledge that on October 5th,
2008, Megola entered into an agreement with Woodsmart Solutions Inc. to
provide Woodsmart with exclusive rights for the use of and rights of the
Product for application in the Enhanced Product or for use on or in any
wood based material required for use in residential and commercial
building construction in North America; The Parties also acknowledge that
on May 20, 2009 Woodsmart Solutions Inc. forwarded a letter of advice to
their licensees advising them that Woodsmart no longer held the rights to
the BluWood proprietary formula – Schedule D. It is also understood by
both parties that based on this situation, along with Woodsmart’s
inability to meet their minimum year one sales quotas, Woodsmart is in
contravention of their agreement with Megola, Inc. and as such, the
Woodsmart-Megola agreement is now
terminated.
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G.
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The
Seller agrees to grant the exclusive use of and rights desired by Buyer on
the terms and conditions set forth in this Agreement;
and
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H.
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The
Agreement shall be binding upon and inure to the benefit of the parties
hereto, their successors and assigns;
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:
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1.
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Intellectual
Property
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Ownership of the Product
Technology. Buyer acknowledges, based on Seller’s representation,
that the Seller is the sole owner of the manufacturing/supplier rights for
the Hartindo AF21 Product Technology for North America and Buyer shall
have no right, title, or interest therein or thereto other than the use
and rights to such Product Technology in the manner and to the extent
prescribed in this Agreement or otherwise approved in writing by
Seller.
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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. No right
or license shall be implied by estoppel or otherwise, other than the
rights and use expressed or granted in this
Section.
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Rights
to use Product Technology.
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(A) Grant.
Subject to provisions of this Section 1.3, Seller hereby grants to Buyer, for
the term of this Agreement, (i) co-exclusive use of and rights within North
America to use the Product (ii) exclusive use of and rights within North
America, to advertise, promote, display, market, distribute, sell and have sold
Enhanced Product for use on or in wood based products (iii) exclusive use of and
rights to advertise, promote, display, market, distribute, sell and have sold
products that have been protected with the Enhanced Product (“Derivative
Products”); and (iv) exclusive use of 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 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) 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 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 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.
(D) Reverse
Engineering. 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 about the
Product).
(E) Exclusivity.
Buyer shall have use of and rights to the Product for the purposes and
territories as set out in 1.3(A). 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.
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Use
of Product.
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(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. Seller will supply Buyer with quality control testing standards
procedures and guidelines 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 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.
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Confidentiality.
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(A) Obligation
of Nondisclosure. Except as otherwise provided in this
Agreement, each Party agrees that it will with respect to the Confidential &
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.
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2.
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Quantities; Grant of Exclusive
License; Minimum Quantities.
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2.1.
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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 in Sellers discretion.
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2.2
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Minimum
Quantities. Buyer is required to purchase the minimum
quantities set forth on Schedule C attached
hereto.
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3.
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Price.
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Buyer
shall purchase from Seller the Product, in the minimum quantities set forth
according to Section 2.2 above, at the prices set forth in Schedule C attached
hereto.
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4.
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Estimates,
Orders and Deliveries.
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4.1.
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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.
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Orders and
Deliveries. Buyer shall initiate sales by providing the
Seller with a purchase order and a deposit of 50% of the order by wire
order for the amount of Product the Buyer requires to be delivered in 60
days. All orders are F.0.B., Xxxxx Oak Chemical – Fountain Inn, S.C. or
Seller's plant to the location specified on the purchase
order.
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5.
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Warranty
of Seller; Disclaimer of Other Warranties; Buyer’s Exclusive
Remedy.
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5.1.
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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.
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5.2.
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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.
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5.3.
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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 issuing a credit to Buyer's account for the
quantity of Product that did 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.
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5.4.
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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.
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5.5.
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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.
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5.6.
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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 Supplier and
Distributor.
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6.
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Payment
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6.1.
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Terms. Payment
including any and all applicable taxes for each invoice shall be made by
Buyer to Seller within Thirty (30) days of Seller delivering the invoice
to Buyer. 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. Terms may
be revised as per the negotiations of each party on future Purchase
orders.
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7.
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Labeling;
Packaging
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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 which refers to the
Product shall be subject to the prior written approval of Seller, which approval
may not be unreasonably withheld by Seller.
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8.
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Title;
Risk of Loss
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Title and
risk of loss or damage to Product shall pass to Buyer upon delivery by Seller to
the carrier for shipment to Buyer.
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9.
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Force
Majeure
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9.1.
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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."
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9.2.
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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.
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9.3.
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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.
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9.4.
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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.
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10.
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Representations
and Warranties.
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10.1
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By
Seller. For the purpose of inducing Buyer to enter into
this Agreement, Seller hereby makes the following representations and
warranties to Seller (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)
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A.
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that:
(i) Seller is the sole owner of the exclusive manufacturing rights of the
Product, free from any lien, claim or encumbrance; 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
Seller assets are bound; and (vi) 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 (vii) based upon
collected field data, live testing and third party controlled test data,
all of which has been supplied to the Buyer, 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 each shipment of the Product to Buyer will
conform to the current specifications for the Product on the date of this
Agreement.
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Seller is
a corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Nevada and (i) has the right and power to enter into, and
perform its obligations under this Agreement and (ii) 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.
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10.2
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By
Buyer. Buyer will comply with all applicable laws,
ordinances and regulations applicable to the transportation, storage and
handling of the Product and Derivative Products and to the manufacture of
the Derivative Products.
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10.3
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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.
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11.
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Term
and Termination.
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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 (1) year commencing on the date of this Agreement
and shall automatically renew annually for additional terms upon buyer reaching
minimum order requirements as set out in Schedule C, for a period of 36 months,
without further action by Seller or Buyer on the same terms and conditions set
forth herein. Upon satisfactory completion of this term, both parties will enter
into discussions to further renew the terms of this contract.
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 (90) days after its receipt, Buyer: (a) undertakes to correct such
default and diligently pursues the same to completion within a reasonable time
thereafter; or (b) contests in good faith the existence of the
default. Seller agrees that a default so contested in good faith
shall not constitute an actual default until resolved. Any
written notice of default shall set forth in detail the nature of such default
with specific reference to this Agreement.
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 all existing customers of Buyer, which shall remain to
exclusive customer of Product and Enhanced Product orders of Licensee on date of
termination or until Licensee has diminished all of its existing inventory of
Licensed Product. Thereafter, all of Licensee’s rights as a Licensee shall
terminate and Licensee shall discontinue all use and advertisement of Licensed
Product here under. Within ten (10) days after the end of the use period,
Licensee shall remove (at Licensee’s expense), and thereafter cease all use of
any Licensed Technology or Licensed Marks licensed 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.
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12.
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Seller
Production Requirements and Pricing.
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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 Products to Buyer in a timely manner in accordance with terms and
conditions set forth in Exhibit C. 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 by
purchases by Seller of per gallon cost of Product. 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 than existing
purchase orders of the Product.
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13.
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Insurance.
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Buyer
shall procure from financially responsible and reputable carriers and
maintain in full force and effect, during the term of this Agreement, a policy
or policies of comprehensive general liability insurance, including product
liability and broad form contractual or vendors endorsement liability insurance,
having standard products liability endorsements providing aggregate liability
limits in the minimum amount of Two Million Dollars ($2,000,000) and
in an amount not less than one million dollars ($1,000,000) per occurrence for
bodily injury and one million dollars ($1,000,000) per occurrence for property
damage. The insurance companies issuing such policies must have
either: an A.M. Best’s rating of A-VIII or better; a Standard and Poor’s
(“S&P”) rating of AA or better, or a Xxxxx’x rating of Aa2 or
better. Promptly upon a request from the Buyer, Seller shall furnish
Certificates of Insurance showing compliance with this section. Seller is
required to name the Buyer as an additional insured on their comprehensive
general liability insurance policy, the product liability insurance and the
broad form contractual or vendor’s endorsement liability
insurance. Such certificates must provide that there shall be
no termination, non-renewal, or modification of such coverage without at least
thirty (30) calendar days’ prior written notice to Buyer. In the
event Seller fails to obtain and/or maintain any of the coverages required by
this Section of the Agreement, Buyer may, but shall not be obligated to, obtain
or maintain any such insurance on behalf of Seller and set off the costs thereof
against any sums owed to Seller. or otherwise be reimbursed for such costs by
Seller.
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14.
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Relationship
Between Parties.
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Seller
and Buyer are independent contractors, 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.
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15.
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Buyer’s
Indemnification.
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Buyer
agrees to indemnify and hold Seller harmless from and against loss, liability,
and expense (including court costs and reasonable attorney’s 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.
|
Seller’s
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
Licensee 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 levels of revenue or profits which Licensee 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 Nevada 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 Nevada 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.
SELLER
MEGOLA,
INC.
|
By:
|
/s/ Xxxx
Xxxxxxx
|
Date:
Nov. 11, 2009
|
|
|
Xxxx
Xxxxxxx, President & CEO
|
BUYER
ECOBLU
PRODUCTS, INC.
|
By:
|
/s/ Xxxxx
Xxxxxx
|
Date:
Nov. 11, 2009
|
|
|
Xxxxx
Xxxxxx, President & CEO
|
Schedule
‘A’
Description
of AF21 (“Product”)
Hartindo
AF21 is a water-based, environmentally friendly, multi-purpose, non-toxic and
non-corrosive fire inhibitor. For the terms of this agreement, AF21
will be shipped to the Buyer in a non-diluted, concentrated form [omitted] in
totes containing 245 U.S. gallons of concentrated AF21.
Description
of Bluwood/Perfect Barrier
BluWood/Perfect
Barrier is the trademarked name for a solution treatment that is used to treat
wood products, which renders affords the treated wood products, resistant to
moisture, mold, wood-rot and termite infestation.
EcoBlu
Proprietary Product
EcoBlu
formulation is a blend of proprietary fire retardant and or adhesive based
chemicals and DOT to afford resistance to fire, mold, wood-rot and termite
infestation.
Description
of Enhanced Product
The
Enhanced Product will consist of a blended solution containing the above AF21
Concentrated solution, [omitted]
Schedule
‘B’
Licensed
Products
|
|
·
|
All
vertical framing members used in
construction
|
|
|
·
|
Any
and all particle board as maybe used for interior usage, including but not
limited to cabinetry or architectural
members.
|
|
|
·
|
Any
and all wood components or timber.
|
|
|
·
|
Any
and all construction materials made from any wood
derivatives.
|
|
|
·
|
Any
composite wood product manufactured and used as a BINDER in the
composition.
|
|
|
·
|
Any
and all engineered wood components.
|
|
|
·
|
I
joist
|
|
|
·
|
LVL
|
|
|
·
|
Glu
Xxx Beams
|
|
|
·
|
PSL
|
|
|
·
|
Timerstrand
|
|
|
·
|
OSB
Rim
|
|
|
·
|
Concrete
Form Boards
|
|
|
·
|
Roof Trusses
|
|
|
·
|
Reflective
Sheeting’s
|
|
|
·
|
Open
Web Joist
|
|
|
·
|
OSB
|
|
|
·
|
All
Construction Timbers and Studs SPF, DF, SYP & White
Xxxxx
|
|
|
·
|
Siding
|
|
|
·
|
Facia
|
|
|
·
|
Decking
|
|
|
·
|
Plywood
|
Schedule
‘C’
Price
and Quantity
|
Cost
|
||||
|
Product
|
Product
Order Code
|
Per
Gal
|
Per
245 Gal Tote
|
|
|
AF21
|
AF21-245T
|
[omitted]
|
[omitted]
|
Tote is defined as 245 US Gallons of
Concentrate [omitted]
The Buyer
shall be required to purchase from the Seller a minimum annual quantity of
Product beginning immediately following execution of this agreement. An initial
purchase order of 30 totes of product at a special
price of [omitted] per tote of AF21 Concentrate or [omitted] plus cost of
totes will commence immediately following the completion of this agreement. This
initial order will be considered in the Minimum Purchase Requirements for the
first 12 month period.
Minimum
Purchase Requirements of Buyer
|
(a)
|
Within
the first 12 months immediately following the execution of this agreement;
455 totes of Product at a cost of [omitted] per tote including the initial
purchase of 30 totes at the special price of [omitted] per
tote.
|
|
(b)
|
The
next 13-24 months; 842 totes of Product at a cost of [omitted] per
tote.
|
|
(c)
|
The
next 25-36 months; 1263 totes of Product at a cost of [omitted] per
tote.
|
The sole
remedy of Seller if Buyer does not meet the minimum Product purchase is
termination of the Agreement.
[omitted]%
discount will be applied once EcoBlu reaches 100% of purchase minimums for any
12 month period.
If for
any reason the Seller or assignee, successor or new control person discontinues
to manufacture or can not supply Product the Seller agrees to either
sub-contract manufacturing or permit the Buyer to manufacture or have
manufactured the Product on a per gallon royalty basis not to exceed [omitted]%
per gallon. The intention is that the Buyer will have a continuous supply of
Product if a change in Sellers operation or ownership occurs and that the Seller
will continue to receive compensation for the Buyers purchases.
Seller
agrees to continue to supply Buyer the product at the same unit pricing, terms
and conditions in effect until the date of termination or expiry of
contract.
Schedule
‘D’
May 20,
2009 - Woodsmart Solutions Inc. forwarded a letter of advice to their
licensees advising them that Woodsmart no longer held the rights to the BluWood
proprietary formula.
Should
this letter be required, EcoBlu will provide said document.
Megola
Inc /WoodSmart Agreement
Should
this agreement need to be provided at any time, this agreement is filed with the
SEC and can be found at xxx.xxxxxx.xxx, SEC
filings.
