EXCLUSIVE LICENSE AGREEMENT
EXCLUSIVE LICENSE AGREEMENT, dated as of this 15th day of
September, 1999 by and between SafeScience, Inc., a Nevada corporation with its
offices in Boston, MA ("SafeScience") and Delta-Omega Technologies, Inc., a
Colorado corporation (the "Company") with its offices in Broussard, LA.
WHEREAS, the Company has developed certain proprietary
formulations for cleaning products listed in Appendix A, has produced the same
for conversion into finished goods and has produced pilot production quantities
of finished goods exclusively for SafeScience; and
WHEREAS, the parties are interested in establishing an
exclusive arrangement whereby the Company provides SafeScience with these
formulations; and
WHEREAS, SafeScience wishes to contract for the production of
certain finished products utilizing these formulations; and
WHEREAS, SafeScience has developed certain markets for resale
of these products; and
WHEREAS, SafeScience wishes to provide confidential access to
these formulations to third party manufacturers for the purpose of manufacturing
large volumes of finished goods for resale; and
WHEREAS, SafeScience is willing to make license payments to
the Company in consideration of its development of these formulations and its
grant of a license hereunder; and
WHEREAS, the Company is willing to grant to SafeScience
exclusive use of these proprietary formulations, as well as any future
formulations for cleaning products that may from time to time be developed for
SafeScience; and
WHEREAS, SafeScience is willing to assume the responsibility
of protecting these proprietary formulations via confidentiality agreements with
its third party manufacturers;
NOW THEREFORE, in consideration of the foregoing, the parties
agree as follows:
1. Grant of License: Exclusivity The Company grants SafeScience an exclusive
worldwide license to make, manufacture, sell and distribute each of the cleaning
products listed in Appendix A, as such Appendix may be amended by mutual
agreement to add future cleaning products developed by the Company, including
products presently in development (all the products listed on such Appendix A at
any time are referred to as the "Products"). Under the terms of such exclusive
license, the Company will not sell or distribute Products, nor will the Company
grant to any third party any license to make, manufacture, sell or distribute
any Products. Such exclusivity will be subject to SafeScience's maintaining,
during each year of the term of this Agreement, the minimum annual purchase
levels set forth in Section III of the Supply and Distribution Agreement between
the parties dated July 8, 1998 (the "1998 Agreement"); provided, however, that
all net sales of Products (as defined in Section 6) under this Agreement will be
credited to the minimum purchase requirements of the 1998 Agreement.
2. Improvements to Products: Other Existing Products- Products in Development.
(a) During the term of this Agreement, the Company will continue to
develop improvements on the Products. Any improvements on Products shall also be
considered Products for the purposes of this Agreement, shall be added to
Appendix A and shall be subject to all the provisions hereof.
(b) The Company presently manufactures other products which are
purchased from the Company by SafeScience. In the event that, as a result of the
high volume of demand for any such product or quality control concerns with
respect to any such product, SafeScience determines in good faith to seek a
third party manufacturer for any such product, such product shall be considered
a Product for the purposes of this Agreement, shall be added to Appendix A and
shall be subject to all the provisions hereof.
(c) The Company is presently developing other products for SafeScience,
in addition to the Products and to the other products described in clause (ii)
above. In the event any such product(s) become commercialized, the Company may
initially manufacture such products for sale to SafeScience. However, in the
event that, as a result of the high volume of demand for any such product or
quality control concerns with respect to any such product, SafeScience
determines in good faith to seek a third party manufacturer for any such
product, such product shall be considered a Product for the purposes of this
Agreement, shall be added to Appendix A and shall be subject to all the
provisions hereof.
3. Product Formulas. The Company agrees to provide SafeScience, simultaneously
with execution of this Agreement, with all the formulas and other information
necessary for manufacture of the Products (the "Product Formulas"). Upon
addition of any new Product to Appendix A, the Company shall promptly provide
all the formulas and other information necessary for manufacture thereof to
SafeScience.
4. Term of License. The license shall commence on the date hereof and be
perpetual unless terminated pursuant to Section 11.
5. Limitations on License. The rights granted SafeScience under this Agreement
shall not be directly or indirectly assignable or transferable in any manner
whatsoever, nor shall SafeScience have the right to grant any sublicenses,
except for the sole purpose of the production of Products by third parties. Any
unauthorized assignment, transfer or sublicense by SafeScience shall be null and
void and of no legal effect whatsoever.
6. License Fee. During the term of this Agreement, SafeScience shall pay license
fees to the Company in an amount equal to two percent (2%) of net sales for all
Products listed in Appendix A. Such fees shall be payable on a quarterly basis
within 30 days of the end of each calendar quarter. Net sales are defined as
gross sales actually invoiced, less returns, cash discounts and trade
allowances, and less separately invoiced amounts such as taxes, shipping and
insurance. In the event additional Products are added to Appendix A, the parties
shall negotiate in good faith to determine the license fees payable with respect
to such additional Products. If the parties are unable to agree upon the amount
of license fees, the parties agree that the amount of the fees shall be
submitted to mediation and/or arbitration pursuant to Section 13(c), and during
the pendency of such arbitration the license shall be in full force and effect
subject to SafeScience's obligation to pay such license fees when they are so
determined.
7. Right to Audit. SafeScience shall at all times during the term of the license
granted hereunder keep true and correct books of account and maintain documents
(including where appropriate documents produced by third party manufacturers and
provided to SafeScience) which show the license fee to which the Company is
entitled, and the total amount of Product produced by SafeScience using the
Product Formulas. The books of account and documentation shall be retained by
SafeScience for not less than two (2) years after any termination of the license
and shall be open to inspection by an authorized representative of the Company,
and at the Company's expense, during the term of the license and for a period of
two (2) years after termination of the license. Such inspections shall be
carried out no more than twice per year, during usual business hours of
SafeScience by the Company or its assigns, successors or representatives upon
five (5) business days prior notice. In the event an audit by the Company
determines that SafeScience has underpaid the license fees due to the Company by
more than 10% in any one-year period, the expenses of the audit shall forthwith
be reimbursed by SafeScience to the Company.
8. Confidentiality and Non-Disclosure of Information.
(a) As used in this Agreement, the term "Confidential Information"
means the Product Formulas and any other confidential or proprietary technical
or business information furnished by one party to the other party in connection
with the license granted hereunder, regardless of whether such information is in
written, oral, electronic, or other tangible form. Such Confidential Information
may include, without limitation, trade secrets, know-how, inventions, technical
data or specifications, testing methods, business or financial information,
research and development activities, product and marketing plans, and customer
and supplier information.
(b) Each party shall maintain the other party's Confidential
Information in confidence and shall not disclose such Confidential Information
to any third party without the prior written consent of the disclosing party.
The foregoing shall not apply to information that (1) is or hereafter becomes
generally available to the public other than by reason of any default with
respect to confidentiality under this Agreement; (2) is disclosed to such party
by a third party who is not in default of any confidentiality obligation to the
other party; (3) is developed by or on behalf of such party, without reliance on
confidential information acquired from the other party; (4) is required to be
disclosed in compliance with applicable laws or regulations or order by a court
of competent jurisdiction, provided that reasonable measures shall be taken to
assure confidential treatment of such information; or (5) is provided by such
party under appropriate terms and conditions, including confidentiality
provisions equivalent to those in this Agreement, to third parties for
consulting, accounting, legal and similar purposes.
(c) Each party shall limit access to the other party's Confidential
Information to those of its directors, officers, agents, employees, consultants
and advisors who have a need to know and who have been informed in writing of
and agreed to be bound by the obligations of confidentiality imposed by this
Agreement. Each party shall allow its directors, officers, agents, employees,
consultants, and advisors to reproduce the Confidential Information only to the
extent necessary to effect the purposes set forth in this Agreement, with all
such reproductions being considered Confidential Information. The receiving
party shall cause its directors, officers, agents, employees, consultants and
advisors to keep in confidence the Confidential Information consistent with this
Agreement and shall be responsible for any disclosures by such persons not
permitted hereunder.
(d) Neither SafeScience nor any of its third party manufacturers shall
use the Company's Product Formulas for any purpose other than to produce
Products.
(e) In the event of any breach by SafeScience or any of its agents or
third party manufacturers of the provisions of this Section 8, the Company may,
subject to the provisions of Section 12(c), immediately seek injunctive relief
in any court of competent jurisdiction in addition to any other rights or
remedies provided for herein.
9. Infringement.
(a) In the event that SafeScience learns of any infringement or
unauthorized use of the Product Formulas, it shall promptly notify the Company.
The Company shall have the sole initial right to bring infringement actions or
other similar proceedings against third parties in order to protect the Product
Formulas. If requested to do so, SafeScience shall reasonably cooperate with the
Company in any such action, including but not limited to joining the action as a
party if necessary to maintain standing, at the Company's expense.
(b) If the Company determines not to take any such action, then
SafeScience may take such action in its own name. The Company may cooperate with
SafeScience or join such action at its sole discretion. In the event such an
action taken by SafeScience is successful and SafeScience is not awarded all its
costs and expenses (including attorney's fees) incurred in connection with the
prosecution thereof, then the Company agrees to participate in and contribute to
the costs and expenses of such prosecution in ratable proportion to the relative
losses to the parties incurred as a result of the infringing conduct. The
relative losses of the parties shall be determined based upon, in the case of
SafeScience, SafeScience's estimated gross profits from the sales lost as a
result of the infringement, and in the case of the Company, the license fees
that would have been payable pursuant to Section 6 on the sales lost as a result
of the infringement. Any portion of such fees and expenses for which the Company
is obligated to reimburse SafeScience shall be payable by offset against future
license fees payable under Section 6.
(c) Any award recovered by the Company or SafeScience in any action or
proceeding commenced by it as under this section 9 shall be divided between the
parties as follows: first, to both parties of their respective, actual
out-of-pocket costs (which amount shall be allocated pro rata if the amount
recovered is less than the total amount of such costs); second, any amounts
awarded in respect of lost sales or profits shall be allocated so as to
approximate, to the best of the parties' ability, to the Company the portion
thereof that represents the license fees that would have been payable with
respect to such lost sales or profits, and to SafeScience the balance of the
amount so awarded; and third, any remaining amount of any recovery (including
recovery representing punitive or statutory damages) shall be split evenly
between the parties.
10. Indemnification.
(a) The Company agrees and covenants to hold harmless and indemnify and
defend SafeScience, its subsidiaries, affiliates, officers, directors,
employees, agents and assigns, from and against any suits, actions, claims,
losses, demands, liabilities, costs and expenses of any kind, including costs
and attorneys' fees for defending the same, which may arise or result from any
claims or infringement or piracy of the Product Formulas, except to the extent
caused by SafeScience's (or any of SafeScience's agent's or third party
manufacturer's) misuse, unauthorized modification of Product Formulas or
mislabeling.
(b) SafeScience agrees and covenants to hold harmless and indemnify and
defend the Company, its subsidiaries, affiliates, officers, directors,
employees, agents and assigns (each a "Company Indemnified Party"), from and
against any suits, actions, claims, losses, demands, damages, liabilities, costs
and expenses of any kind, including costs and attorneys' fees for defending the
same, which may arise or result from SafeScience's use of the Product Formulas
licensed hereunder, to the extent SafeScience's or its agent's actions
constitute breach of contract, negligence or willful misconduct toward a party
other than a Company Indemnified Party.
11. Termination. Notwithstanding anything otherwise contained in this Agreement,
the Company shall have the right to terminate the rights and license granted to
SafeScience hereunder upon thirty (30) days written notice to SafeScience
(unless a longer period is set forth hereinbelow), upon the happening of any one
or more of the following events; provided, however, (1) if SafeScience, within
said notice period, cures or otherwise terminates any of said events, said right
and license shall continue on in force as if said notice had not been given, or
(2) if SafeScience, within said notice period, contests in good faith the
veracity of any of said events, said right and license shall continue on in
force until such time as the veracity of said events shall be established by a
final trier of fact, from which no further appeal may be taken:
(a) if SafeScience fails or refuses to pay promptly any amount payable
under Section 6 when and as same shall become due and payable, and such default
shall continue for a period of thirty (30) days after written notice thereof has
been given by the Company to SafeScience;
(b) if SafeScience should fail to comply with any other material
requirement or obligation of the license granted hereunder and such default
shall not be cured within sixty (60) days after receipt of written notice of
default from the Company, or if SafeScience does not take and diligently pursue
reasonable steps to cure such default if such default is of such a nature that a
period of more than sixty (60) days is required to cure;
(c) SafeScience may terminate this license at any time, for any reason,
upon thirty (30) days' notice thereof to the Company.
12. Effect of Termination. Upon the termination of the license granted
hereunder, all rights of SafeScience under the license shall cease forthwith and
shall immediately be null and void and thereafter SafeScience shall cease using
the Product Formulas. Each party shall forthwith deliver to the other party all
forms, procedures, documents, copies of formulations, and other Confidential
Information of the other party. Upon such termination, SafeScience shall remain
obligated to pay any outstanding license fees due under Section 6.
13. General Provisions.
(a) Relationship of Parties. No partnership, joint venture, employment,
agency or other relationship is formed, intended, or to be inferred under this
Agreement. Neither party to this Agreement shall make or authorize any
representation to the contrary.
(b) Survival of Remedies. During and after the term of this Agreement,
each party shall be entitled to all rights, remedies and protections available
at law and in equity. The parties recognize that irreparable injury may result
to its business and property if the other party breaches any of the terms of
this Agreement, and each party agrees that if it engages in any act in violation
of this Agreement, the other party shall be entitled, in addition to such other
remedies and damages as may be available, to seek equitable relief including
injunction prohibiting the breaching party from engaging in such act and
specific performance. Without limiting the generality of the foregoing, the
indemnification provisions of Section 10 of this Agreement shall survive any
termination of this Agreement.
(c) Disputes. Should a dispute arise relative to the terms or
conditions of this Agreement, the parties shall, prior to commencing any
litigation or similar proceeding, engage in non-binding mediation with a
mediator mutually acceptable to the parties. In the event such mediation is
unsuccessful in resolving the dispute, the parties shall submit the dispute to
binding arbitration in Boston, Massachusetts pursuant to the rules then
prevailing of the American Arbitration Association. Any award made through the
arbitration shall be enforceable in any court of competent jurisdiction pursuant
to uniform laws regarding arbitration and the award may include an award of
attorney's fees and costs to the prevailing party. The foregoing arbitration
clause shall not be deemed to limit the right of either party to seek immediate
equitable relief, where permitted pursuant to applicable law or to the terms of
this Agreement, in a court of competent jurisidiction pending the arbitration
proceedings.
(d) Waiver. The failure of either party to take any action under this
Agreement, or the waiver of a breach of this Agreement, shall not affect that
party's rights to require performance hereunder or constitute a waiver of any
subsequent breach.
(e) Notice. All notices required or permitted to be given or made under
this Agreement must be made in writing and delivered by certified mail, return
receipt requested. Mailed notices shall be addressed to the parties as their
addresses appear below, except that in the event written notice of a change of
address is made in accordance with this section, then such mailed notices shall
be addressed to the party in question at such new address.
If to Delta-Omega Technologies, Inc.:
000 Xxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, III
Telephone: (000) 000-0000
Fax: (000) 000-0000
With copies to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to SafeScience, Inc.:
00 Xx. Xxxxx Xxxxxx, Xxxxx 00
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, President
Telephone: (000) 000-0000
Fax: (000) 000-0000
With copies to:
B. Xxxxx Xxxxxxxx, Esq.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(f) Interpretation. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Massachusetts. The headings herein
are for reference only and shall not define or limit the provisions hereof.
(g) Entire Agreement. The recitals hereto are a part of this Agreement
which constitutes the entire agreement between the parties with respect to the
subject matter addressed herein, and all prior and contemporaneous agreements,
whether written or oral, as may relate to the same, are hereby superseded by
this Agreement.
(h) Modification. This Agreement may not be altered, modified, amended
or changed, in whole or in part, except by a writing executed by the parties.
(i) Successors. This Agreement shall be binding upon the parties and
their permitted assigns, corporate successors and representatives.
(j) Attorneys' Fees. In the event of any dispute which results in a
suit or other legal proceeding to construe or enforce any provision of this
Agreement or because of an alleged breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the parties agree that
the prevailing party or parties (in addition to all other amounts and relied to
with such party or parties may be entitled) shall be entitled to recover
reasonable attorneys' fees and other costs incurred in any action or proceeding.
(k) Previous Agreement. This Agreement shall not be deemed to supersede
the 1998 Agreement (as defined in Section 1) except in the case of a direct
conflict between the terms of this Agreement and the terms of the 1998
Agreement.
APPENDIX A
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Products included in royalty agreement between Delta Omega, Inc. and
SafeScience, Inc. and dated Sept. 1st, 1999.
Agreed Product List
-------------------
All Purpose Cleaner
Kitchen Cleaner
Shower Cleaner
Dish Detergent
Floor Cleaner
Window Cleaner
Bathroom Cleaner
Laundry Cleaner
Auto Dishwashing Gel
Outdoor Cleaner
IN WITNESS WHEREOF, the parties have hereunto set their hands
and seals as of the date first above written.
SAFESCIENCE, INC. DELTA-OMEGA TECHNOLOGIES, INC.
By: /s/Xxxxxxx X. Xxxxxx By: /s/Xxxxx X. Xxxxx, III
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Title: President Title: President
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