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EXHIBIT 10(B)(3)
AGREEMENT FOR SALE OF
ZEROS APPROVED LICENSE
LAWSONS ZEROS CORPORATION
This Agreement for the Sale of a ZEROS Approved License is made at
Houston, Texas as of May 31, 1997 by and between ZEROS USA, Inc., hereinafter
referred to in this Agreement as "ZEROS;" ZEROS CALIFORNIA CORPORATION,
hereinafter referred to in this Agreement as "ZCC" or "Grantor;" and, XXXXXX
ZEROS CORPORATION, hereinafter referred to in this Agreement as "LZC" or
"Licensee." In consideration of the mutual covenants made in this Agreement and
for other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, ZEROS, ZCC, and Licensee agree as follows:
RECITALS
1. Legal Status of ZEROS
ZEROS is a Texas corporation duly organized, validly existing, and in good
standing under the laws of said state, with power to own property and carry on
business as contemplated by this Agreement. ZEROS has its principal office and
place of business at 000 Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
2. Legal Status of ZCC
ZCC is a California Stock Corporation duly organized, validly existing, and in
good standing under the laws of said state, with corporate power to own
property and carry on its business as it is now being conducted. ZCC has its
principal office and place of business at 00000 Xxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxx 00000.
3. Legal Status of Licensee
Licensee is a California Stock Corporation duly organized, validly existing,
and in good standing under the laws of said state, with power to own property
and carry on business as contemplated by this Agreement. Licensee has its
principal office and place of business at 00-000 Xxxxxx #00 Xxxxxxx, Xxxxxxxxxx
00000.
4. Business of ZEROS
4.1. ZEROS is the holder of a master license to sell and operate
energy recycling systems using hazardous and non-hazardous
toxic wastes. Said master license was originally obtained from
M, Ltd., a Bahamian corporation not a party to this Agreement.
4.2. ZEROS is engaged in the business of developing business
opportunities related to recycling energy using hazardous and
non-hazardous toxic wastes.
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4.3. ZEROS is engaged further in the business of licensing the
operation of energy recycling oxidation systems by others
directly or through its licensees.
4.4. ZEROS is engaged further in the business of selling energy
recycling systems.
4.5. ZEROS makes available from time to time certain contracts to
provide remediation services which are OFFERED and sold by
ZEROS and/or its licensees for prospective customers.
4.6. All services are offered in connection with and through the
use of various patents, trademarks and trade names and certain
related words, letters, and symbols, hereinafter collectively
referred to as "proprietary marks;" and in connection with
certain designs of signs, buildings, and logos, hereafter
collectively referred to as "indicia."
5. Business of ZCC
5.1. ZCC is engaged in the business of developing business
opportunities related to recycling energy using hazardous and
non-hazardous toxic wastes.
5.2. ZCC is engaged further in the business of licensing the
operation of energy recycling oxidation systems by others.
5.3. ZCC makes available from time to time certain contracts to
provide remediation services which are offered and sold by
ZEROS and ZCC to prospective customers.
5.4. All services are offered in connection with and through the
use of various patents, trademarks and trade names and certain
related words, letters, and symbols, hereinafter collectively
referred to as "proprietary, marks;" and in connection with
certain designs of signs, buildings, and logos, hereafter
collectively referred to as "indicia."
6. Desire of Licensee
6.1. Licensee desires to purchase a license from ZEROS by and
through the license currently owned by ZCC a new approved
license to operate one or more energy recycling oxidation
systems, including the use of any extant patents, proprietary
marks and indicia.
6.2. Licensee desires to purchase a license from ZEROS by and
through the license currently owned by ZCC a new approved
license to sell to others operating licenses and energy
recycling oxidation systems, including the use of any extant
patents, proprietary marks and indicia.
6.3. Licensee desires to derive the benefits of ZEROS' and ZCC's
information, experience, advice, guidance, know-how, and
customer goodwill.
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GRANT, TERM, AND INITIAL FEE
7. Grant of License
ZEROS, under the authority of the master license originally granted to it by M,
Ltd., grants to Licensee by and through ZCC, and Licensee hereby accepts from
ZEROS by and through ZCC, the right and license for the term indicated, on the
terms and conditions hereinafter set forth, and limited to the geographical
area indicated in Paragraph 8, below.
7.1. To develop business opportunities related to recycling energy
using hazardous and non-hazardous wastes, including toxic
wastes.
7.2. To OPERATE energy recycling oxidation system using all extant
and available patents, proprietary marks and indicia.
7.3. To use, in connection with the operation of its own recycling
system(s), ZEROS' proprietary marks, indicia and patents.
7.4. To sell to industrial customers, developed either by ZEROS,
ZCC, or Licensee, operating licenses and zero-emission energy
recycling oxidation systems under terms and conditions
approved by ZEROS.
7.5. To sell to bio-medical customers, developed either by ZEROS,
ZCC, or Licensee, operating licenses and zero-emission energy
recycling oxidation systems under the terms and conditions
approved by ZEROS.
7.6. To use, in connection with specific contracts to sell by and
through ZCC said zero-emission energy recycling oxidation
licenses and systems, ZEROS' proprietary marks, and indicia.
7.7. To use for marketing purposes, limited information regarding
ZEROS' patents, subject to ZEROS' approval.
8. Geographical Area
The geographical area assigned by ZEROS to Licensee shall be identified as:
Within the boundaries of the state of California.
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9. Non-Exclusivity of License Rights to Operate
The license granted herein to own and operate an energy recycling system shall
not be exclusive within the geographical area designated in Paragraph 8, above.
Notwithstanding that the license being purchased by Licensee is not exclusive
within the geographical area, Licensee shall have the right to be paid a
commission by ZEROS USA, Inc., more fully described in Paragraph 12, below, for
any other operating license or energy recycling system sold after the date of
this License Agreement indicated above, to any other entity within Licensee's
geographical area so long as Licensee continues to perform according to the
terms of its contract, subject to the provisions of Paragraph 12, herein below.
10. Term
The term of this Agreement and of the right and license herein granted shall
commence on May 31st, 1997, and shall continue perpetually unless terminated in
accordance with the terms hereof.
11. License Fee
Licensee will concurrently with the execution of this Agreement pay to ZEROS,
or has agreed to pay to ZEROS upon terms and conditions agreed to by ZEROS and
Licensee, the sum of $2,000,000.00, as the fee for the right and license herein
granted. Said fee shall be deemed fully earned by ZEROS on the execution and
delivery of this Agreement by ZEROS to Licensee. Said fee is in addition to any
and all amounts payable to ZEROS for implementation of any new technology
developed by ZEROS, for additional measuring instruments, computers, special
tools, spare parts, and related transporting equipment, Or for any other
reason.
12. Commissions
License and ZCC shall have a right to be paid the following commissions from
future sales:
12.1. Licensee and ZCC to receive 10% of License fee to be
distributed pursuant to the determination by ZEROS.
12.2. Licensee and ZCC to receive I% of price of ZEROS equipment
sold to be distributed pursuant to the determination by ZEROS.
12.3. Licensee and ZCC will receive a distribution of up to 10% of
the stock of any corporation purchased by other licensees.
Such stock will inure to Licensee and ZCC as fully paid and
non-assessable. Stock distribution to be determined by ZEROS
USA, as stated within Licensee's geographical area identified
in Paragraph 8, above, for the term indicated in Paragraph 10,
above, and for so long as Licensee and ZCC continue to perform
according to the Terms of this contract. Said commission shall
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be paid by ZEROS to Licensee and ZCC as appropriate, within
thirty days after Licensee collects any funds from any other
party within Licensee's geographical area. Said commission
shall apply only to those licenses and systems sold through
Licensee after the date of this License Agreement indicated
above.
PATENTS, PROPRIETARY MARKS,
INDICIA, AND CONFIDENTIAL INFORMATION
13. Validity and Use of Patent
Licensee hereby acknowledges the validity of ZEROS' patents in the United
States, Canada, Mexico, and any other country bound by applicable,
international agreements, and acknowledges that the same are the sole property
of ZEROS, Licensee shall use the patents only for so long as the right and
license granted herein remain in force, and only in connection with the purpose
of developing business opportunities to operate and/or sell energy recycling
systems and in the manner and for the purposes specified in this Agreement.
Licensee shall not, either during or after the term of this Agreement, do
anything, or aid or assist any other party to do anything, which would infringe
on, harm, impair, or contest the rights claimed by ZEROS in and to any of the
patents.
14. Validity and Use of Propriety Marks
Licensee hereby acknowledges the validity of the proprietary marks and
acknowledges that the same are the sole property of ZEROS. The Licensee shall
use the proprietary marks only for so long as the right and license granted
herein remain in force, and only in connection with the purpose of developing
business opportunities to operate and/or sell energy recycling systems and in
the manner and for the purposes specified in this Agreement. Licensee shall
not, either during or after the term of this Agreement, do anything, or aid or
assist any other party lo do anything, which would infringe on, harm, impair,
or contest the rights claimed by ZEROS in and to any of the proprietary rights.
15. Validity and Use of Indicia
Licensee acknowledges the validity of the indicia and that the same are the
exclusive property of ZEROS. Licensee shall not, either during or after the
term of this Agreement, utilize any of the indicia except in accordance with
the terms of this Agreement.
16. Confidential Nature of ZEROS' System
16.1. Licensee hereby acknowledges that ZEROS is the sole owner of
all patents and proprietary rights in and to the zero-
emissions energy recycling oxidation system (hereinafter
"ZEROS"), to the obtaining and performance of contracts for
the utilization of said system, and to all material and
information now or hereafter revealed to Licensee under this
Agreement relating to ZEROS.
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16.2. Licensee acknowledges that ZEROS in its entirety constitutes
trade secrets of ZEROS which are revealed to Licensee solely
to enable Licensee to develop business opportunities to
operate and/or sell energy recycling systems. Such trade
secrets include, but are not limited to, product catalogues,
price lists, training manuals, policy manuals, sales promotion
aids, business forms, accounting procedures, marketing
reports, informational bulletins, and inventory systems.
16.3 Licensee agrees that both during and after the term of this
Agreement:
16.3.1. Licensee will not reveal any of such trade secrets to
any other person, firm, or entity, and will take all
reasonable steps to prevent any other person, firm,
or entity from discovering the trade secrets.
16.3.2. Licensee will not use the trade secrets in connection
with any business or venture whatsoever, except for
the purpose of developing business opportunities to
operate and/or sell energy recycling systems pursuant
to the terms of this and other related contracts.
17. Goodwill
ZEROS acknowledges that all goodwill which may arise from Licensee's use of the
patents, proprietary marks, the indicia, the trade secrets, or the license or
ZEROS' system of operation within the designated geographical area only is and
shall at all times hereinafter be the sole and exclusive property of Licensee
and shall inure to the sole benefit of Licensee.
OBLIGATIONS OF ZEROS
18. Initial Obligation
ZEROS agrees to sell to Licensee a license and related rights within the
geographical area designated in Paragraph 8, above, for the operation and/or
sale of energy recycling systems known as ZEROS.
19. Training Program
ZEROS agrees to instruct Licensee in all aspects of owning and operating the
systems by providing a training program for Licensee and such of its management
and supervisory personnel as Licensee may reasonably designate.
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20. Improvements in System
ZEROS agrees to make available for a fee to Licensee all improvements and
additions to the system to the same extent and in the same manner as they would
have been implemented by ZEROS if it were operating the system.
21. Management and Operation Assistance
ZEROS agrees to counsel and to assist Licensee on a continuing basis with
respect to the management and operation of the system, and will make available
to Licensee the benefits of ZEROS' information, experience, advice, and
knowledge.
22. Advertising
Licensee may from time to time purchase and place advertising promoting ZEROS
and the services provided and furnished by it. All decisions regarding whether
to utilize national, regional, or local advertising, or some combination
thereof, and regarding selection of the particular media, as well as
advertising content, shall be within the sole discretion of ZEROS.
23. Sale of ZEROS Units by Licensee
23.1. Licensee shall have the right to sell individual ZEROS units
to third parties during the term of this Agreement and subject
to the terms hereinafter set forth.
23.2. The prices, delivery, terms, terms of payment, and other terms
relating to the sale of such ZEROS units by Licensee to third
parties shall be determined at ZEROS' sole discretion.
24. Payment of Royalties
Licensee agrees to pay as a royalty for the benefit of ZEROS 15% of the gross
income generated by the use of its own ZEROS units during the stated term.
25. Definition of Gross Income
For the purposes of Paragraph 24, above, "gross income" is defined as all
income generated from tipping fees at the input station and from the sale of all
products produced by each ZEROS unit before deducting operating expenses and
taxes.
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26. Reports and Records
26.1. Licensee shall submit to Grantor each month a true and correct
accounting providing a statement of total gross income
generated from each ZEROS unit on forms provided by ZEROS
containing all information called for by such forms and
certified to by Licensee.
26.2. Within sixty days after the close of Licensee's fiscal year,
Licensee shall furnish a statement, on forms provided by
ZEROS, showing the total gross income for said preceding
fiscal year, as finally adjusted and reconciled after the
closing and review of Licensee's books and records for such
fiscal year. If such statement discloses that less gross
income was generated than what ZEROS recorded and was paid for
such fiscal year, Licensee shall pay to ZEROS at the time of
submitting such statement, the amount of any such
underpayment. Any overpayment shall be credited by ZEROS to
Licensee's account.
26.3. Licensee shall maintain its books and records in such manner
as to clearly and accurately reflect the total gross income
generated by the various ZEROS units. All books and records
shall be preserved for a period of not less than five years
after the close of the Licensee's fiscal year to which they
relate.
27. ZEROS' Right to Inspect Instruments, Books and Records
All instruments, books and records maintained by Licensee relating to operation
of the various ZEROS units shall be open at all reasonable times to inspection
and verification by ZEROS or any of its representatives. ZEROS shall be
entitled at any time to have the Licensee's instruments, books and records
examined or audited at ZEROS' expense, and the Licensee shall cooperate fully
with the party or parties making such examination or audit on behalf of ZEROS.
LICENSEE'S AGREEMENTS WITH
RESPECT TO OPERATION OF ZEROS UNITS
28. General
The ZEROS units are operated most efficiently and economically if they are run
twenty-four hours a day. In that connection, as much as is possible, allowing
reasonable "down-time" for turnarounds, other regular maintenance and repairs,
Licensee must require that all ZEROS units which Licensee operates or sells to
be kept operating around the clock throughout the year during the term of this
Agreement, and will at all times assure that all ZEROS units are operated
diligently so as to maximize the revenues and profits therefrom.
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29. Marketing
Notwithstanding that it is understood that some contracts for utilization of
the ZEROS units will be provided by ZEROS to Licensee, Licensee shall at all
times actively promote the use and sale of ZEROS units and will use its best
efforts to cultivate, develop, and expand the market therefor whenever
possible.
30. Managerial Responsibility
Licensee agrees that at all times during the term of this Agreement, Licensee
will assure that each operator of a ZEROS unit:
30.1. Shall devote its/its full time and effort to the active
management and operation of their respective ZEROS unit(s).
30.2. Shall reserve and exercise ultimate authority and
responsibility with respect to the management and operation of
their respective various ZEROS unit(s).
31. ZEROS Design and Appearance
Licensee acknowledges that the design and appearance of both the exterior and
interior of any building housing a ZEROS unit is part of the ZEROS' indicia,
subject to modification from time to time by ZEROS, and that it is essential to
the integrity of the system that as great a degree of uniformity as possible be
maintained among the various ZEROS units. Accordingly, Licensee agrees that:
31.1 It will not make any change, or allow any third party to make
any change, addition, or alteration of any kind to the
structural elements of the building housing a ZEROS unit
without the prior written consent of ZEROS.
31.2. It will at its sole expense, or require any third party to at
its sole expense, maintain the interior and exterior painting
of the buildings at the sites where the ZEROS units may be
located.
31.3. It will follow, or require any third party to follow, ZEROS'
reasonable instructions with respect to floor layout and
character of equipment layout and interior furnishing.
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32. Site Maintenance
Licensee will maintain, or require any third party to maintain, its respective
premises in a clean, wholesome, attractive, and safe condition, and will cause
them to be kept in good maintenance and repair.
33. Standards of Operation
Licensee will at all times give, or require any third party to at all times
give, prompt, courteous, and efficient service to the public, will perform, or
cause to be performed, work competently and in a workmanlike manner, and in all
business dealings with members of the public or ZEROS will be governed, or will
require any third parties to be governed, by the highest standards of honesty,
integrity, fair dealing, and ethical conduct. Licensee will do nothing, nor
allow any party to do anything, which would tend to discredit, dishonor,
reflect adversely upon, or in any manner injure the reputation of ZEROS or
Licensee.
34. Advertising Materials
Licensee will not use, nor allow any third party to use, display, publish,
broadcast, or in any manner disseminate any advertising or promotional material
unless the same has first been approved by ZEROS.
35. Insurance
35.1. Licensee and/or any of its customers, shall be responsible for
all loss or damage arising out of or relating to the operation
of the ZEROS units or arising out of the acts or omissions or
failure to act of the Licensee, or any of its customers,
agents, servants, or contractors in connection with the
rendering of service by Licensee and/or any of its customers,
and for all claims for damage to property or for injury or
death of any person or persons directly or indirectly
resulting therefrom.
35.2. Licensee agrees to indemnify, or cause any third party to
indemnify, and hold ZEROS harmless from and against any and
all such claims, loss, and damage, described in subparagraph
35.1, above, including costs and reasonable attorney's fees.
35.3. Licensee shall obtain, or cause any third party to obtain, and
at all times during the term of this Agreement maintain in
force and pay the premiums for public liability insurance with
complete operations coverage. Limits of liability for bodily
injury shall be not less than $1,000,000.00 for each injury,
$5,000,000.00 for all injuries in each accident, and of not
less than $1,000,000.00 for property damage in each
occurrence. Such limits of liability shall be increased and
modified, or additional types of coverage shall be obtained by
Licensee or any of its customers at their sole
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cost and expense at the direction of ZEROS when reasonably
required by changed circumstances.
35.4. The policies of insurance referred to in subparagraph 33.c,
above, shall expressly insure both the Licensee, any of its
customers, and ZEROS and shall require the insurer to defend
both the Licensee and its customers and ZEROS in any action
based on personal injury or property damage suffered as a
result of or arising out of the occupancy or operation of a
ZEROS unit. The Licensee shall furnish to ZEROS a certified
copy or certificate with respect to each such policy,
evidencing coverage as set forth above. Such policies shall
not be canceled, amended, or modified except on thirty day's
prior written notice to ZEROS.
36. Financial Information
In addition to any other reports required of Licensee by this Agreement, the
Licensee shall submit to ZEROS, within ninety days after the end of each fiscal
year of Licensee, complete financial statements in a form prescribed by ZEROS.
including balance sheet, profit and loss statement, and statement of source and
disposition of funds.
37. Compliance With Laws
Licensee shall comply With all federal state, county, municipal, or other
statutes, laws, ordinances, regulations, rules, or orders of any governmental
or quasi-governmental entity, body, agency, commission, board, or official
applicable to the operation of any ZEROS unit.
38. Compliance With Policies, Regulations, and Procedures
Licensee shall at all times comply with all lawful and reasonable policies,
regulations, and procedures promulgated or prescribed from time to time by
ZEROS in connection with the operation of any ZEROS unit, including but not
limited to, standards, techniques, and procedures in the installation of
equipment or the rendering of services, selection, supervision, and training of
personnel; sales, advertising techniques, programs, and procedures, maintenance
and appearance of any ZEROS sites and premises; and policies and procedures
relating to payment, credit, accounting, and financial reporting policies and
procedures.
39. ZEROS' Right to Inspect Operating Site
ZEROS, through its authorized representatives, shall have the right at all
reasonable times, to visit any permanent or temporary site where a ZEROS unit
is being operated for the purpose of inspecting the equipment on hand,
inspecting the nature and quality of services rendered, examining and auditing
Licensee's instruments, books and records, and observing the manner and method
of operating the site.
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TRANSFERABILITY
40. General
41. Except as set forth in Paragraphs 41 through 42, below, and subject to
all the terms and provisions thereof below, Licensee shall not make or
permit any assignment of this Agreement or of any rights or interests
herein.
42. Transfer to Controlled Corporation
Licensee may at any time assign and transfer this Agreement to a corporation
organized and operated for the sole purpose of conducting the business for
which the Licensee is authorized and licensed hereunder, subject to the
following conditions:
42.1. Such assignment and transfer shall be evidenced by a written
instrument, satisfactory in form and substance to ZEROS, in
which said corporation expressly assumes all obligations of
Licensee hereunder.
42.2. Licensee shall execute and deliver to ZEROS a guaranty of the
payment of such corporation's debts to ZEROS, if any.
42.3. Licensee shall remain bound and liable to ZEROS with respect
to all non-monetary obligations of Licensee under its
agreement whether then accrued or thereafter arising.
43. Consent by ZEROS to Transfer
43.1. Licensee shall not make any sale, assignment, or other
transfer of this Agreement, or any rights or interest herein
without first obtaining the consent of ZEROS.
43.2. Licensee shall notify ZEROS in writing of the proposed sale,
assignment, or transfer, setting forth in detail the nature of
the item or interest to be sold, assigned, transferred, the
name and address of the proposed purchaser, assignee, or
transferee, and the consideration, if any, therefor.
43.3. Subject to prior compliance with the provisions of Paragraph
40, above, ZEROS shall consent to the proposed transaction,
provided the following conditions are fulfilled:
43.3.1. It is demonstrated to the reasonable satisfaction of
ZEROS that the proposed purchaser, assignee, or
transferee possesses the business experience and
capability, credit standing, and financial resources
necessary to successfully operate the business in
accordance with this Agreement.
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43.3.2. The proposed purchaser, assignee, transferee, or
person to assume all the duties and responsibilities
outlined in this Agreement, is approved by ZEROS and
successfully completes the training course offered by
ZEROS.
43.3.3. Any sale, assignment, or transfer of this Agreement
shall be evidenced by a written instrument, in form
and substance reasonably satisfactory to ZEROS, in
which the purchaser, assignee, or transferee
expressly assumes all obligations of Licensee
hereunder, whether accrued at the time of such
assignment, sale or transfer, or arising thereafter,
and agrees to be bound by all the terms and
provisions of this Agreement to the same extent and
in the same manner as the Licensee.
44. Sale of Business-ZEROS' Right of First Refusal
44.1. In the event Licensee proposes to sell to any party other than
a controlled corporation the business operated pursuant to
this Agreement, Licensee must first submit to ZEROS a copy of
any written offer made or received, or if none, a statement in
writing of all the terms of the proposed sale and identity of
the proposed purchaser.
44.2. ZEROS shall have the irrevocable first right and option to
purchase the business on the same terms as stated in such
written offer or statement. The ZEROS may exercise such right
and option by notifying the Licensee in writing of its
election to exercise within fourteen days after the ZEROS
receives the written offer or statement.
44.3. If ZEROS does not so notify, Licensee within the fourteen-day
period, the sale to the third party may be consummated, but
only on the same terms and conditions as set forth in the
written offer or statement to ZEROS and only on the Licensee's
obtaining ZEROS' consent.
45. Arbitration
In the event of any dispute from ZEROS' failure or refusal to grant consent to
any sale, assignment, or transfer pursuant to provisions above, such dispute
shall be submitted to arbitration in accordance with the terms and conditions
below.
DEFAULT AND TERMINATION
46. Termination by Licensee
Licensee may terminate this Agreement at any time and without cause by giving
to ZEROS written notice of such termination not less than thirty days prior to
the date of termination.
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47. Termination by ZEROS
On the happening of any of the following events, ZEROS may notify the Licensee
in writing of Licensee's default under this Agreement, stating Licensee's
obligation to cure the default, and itemizing the specific steps to be taken by
Licensee. On failure by Licensee to cure such default within thirty days after
receipt of such notice, ZEROS may terminate this Agreement by written notice of
termination to be effective fifteen days after receipt thereof.
47.1. Failure by Licensee to make any payments of money payable and
due to ZEROS pursuant to this Agreement.
47.2. Failure by Licensee to submit to ZEROS when due any reports
required pursuant to this Agreement.
47.3. Failure by Licensee to maintain and operate its operating
site(s) in accordance with good business practices.
47.4. Failure by Licensee to perform any obligations imposed on
Licensee by any provision of this Agreement.
47.5. Willful and material falsification by Licensee of any report,
statement, or other written data furnished to Licensee.
47.6. Willful and repeated deception of customers of Licensee
relative to the nature or quality of services rendered.
48. Arbitration
48.1. In the event ZEROS gives Licensee any notice of default or
termination and Licensee disputes the right of ZEROS to
terminate this Agreement or in the event of any dispute,
Licensee may make a written demand on ZEROS, at any time prior
to or within ten days after Licensee's receipt of notice of
termination or the failure or refusal of ZEROS to grant
consent as described in Paragraph 43, above. Such dispute
shall be submitted to arbitration in accordance with the rules
and procedures for commercial arbitration of the American
Arbitration Association or any successor organization, and in
accordance with and subject to all the provisions of the
Uniform Arbitration Act as in force in the State of Texas. The
place of arbitration shall be Houston, Texas.
48.2. The procedure for selection of the arbitrator shall be as may
be prescribed by said Association or its successor, provided,
however, that if said Association or a successor is not in
existence or does not provide such a procedures, then ZEROS
and Licensee shall each select one arbitrator and said
arbitrators shall select a third.
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48.3. The arbitrator or arbitrators shall have full power to
determine all issues of fact and of law necessary to determine
whether ZEROS has the right to terminate this Agreement
pursuant to the notice or notices given, or what, if any,
remedy Licensee may be entitled to due to the failure of
refusal of ZEROS as described in Paragraph
48.4. 43, above, and the determination of the arbitrators thereon
shall be final and conclusive, and binding on the parties
hereto, subject only to the provisions of the Uniform
Arbitration Act. Any such determination of an issue of fact or
law made by the arbitrators, however, shall be binding on the
parties hereto only with respect to and in connection with the
particular arbitration proceeding and the specific final
decision or award of the arbitrators made therein, and shall
not be binding on the parties hereto for any other purpose.
48.5. The cost of arbitration shall be taxed and borne as provided
in the Uniform Arbitration Act.
48.6. The serving of proper and timely demand for arbitration shall
suspend the running of any period for curing a default or
shall suspend the effectiveness of any termination of this
Agreement, as the case may be, until the decision or award of
the arbitrators is made.
49. Automatic Termination
This Agreement shall terminate immediately on the occurrence of any of the
following events, without the necessity of notice of any kind by either party.
49.1. The termination of Licensee's right to possession of the
premises designated in Paragraph 2, above, subject, however,
to the provisions of Paragraph 50, below.
49.2. The adjudication of Licensee as a Debtor as that term is
defined in the federal Bankruptcy Code, 11 U.S.C., or the
filing of any petition by or against Licensee, under the
federal Bankruptcy Code or the laws of any state or territory
relating to relief of debtors, for reorganization,
arrangement, or other similar relief provided therein, unless
such petition filed against Licensee is dismissed within sixty
days.
49.3. The making by Licensee of a general assignment for the benefit
of creditors.
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49.4. The appointment of any receiver, trustee, sequestrator, or
similar officer to take charge of Licensee's business, or any
attachment, execution, levy, seizure, or appropriation by any
legal process of Licensee's interest in this Agreement, unless
the appointment of such officer is vacated or discharged or
the effect of such legal process is otherwise released within
sixty days.
50. Relocation of Licensee's Offices
If Licensee's right to possession of the premises designated in Paragraph 2,
above, is terminated, prior to expiration of the terms of this Agreement, and
is without fault or affirmative action on the part of Licensee, then, within
ninety days after Licensee notifies ZEROS that such termination has occurred or
will occur, ZEROS shall propose to Licensee a new location from which Licensee
may maintain its offices for the remainder of the term of this Agreement.
51. Obligations On and After Termination
On termination of this Agreement, whether by lapse of time, by
termination, by mutual consent of the parties, by operation of law, or
in any other manner, Licensee shall cease to be an official holder of
the license to any products or services of ZEROS, and Licensee and all
persons directly or indirectly owning any interest in Licensee or in
any way associated with or related to Licensee shall:
51.1. Promptly cause Licensee to pay sums owing from Licensee to
ZEROS.
51.2. Immediately and permanently discontinue the use of any and all
of the patents, proprietary marks, the trade secrets, the
indicia, and the license of the ZEROS units, of ZEROS.
51.3. Immediately and permanently remove, destroy, or obliterate, at
Licensee's expense, all signs containing any of ZEROS'
proprietary marks or indicia.
51.4. Promptly destroy or surrender to ZEROS all stationery,
letterheads, forms, printed matter, promotional displays, and
advertising containing any of the patents, proprietary marks
or indicia of ZEROS.
51.5. Immediately and permanently discontinue all advertising placed
by Licensee as an authorized license holder.
51.6. Sell to ZEROS all or such part of any ZEROS unit(s) on hand as
of the date of termination as ZEROS may request in writing.
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51.7. Thereafter refrain from doing anything tending to indicate
that Licensee is or was a license holder, or is or was in any
way associated with ZEROS.
52. General Provisions Regarding Termination
52.1. Termination of this Agreement under any circumstances shall
not abrogate, impair, release, or extinguish any debt,
obligation, or liability of Licensee to ZEROS which may have
accrued hereunder.
52.2. All covenants and agreements of Licensee which by their terms
or by reasonable implication are to be performed, in whole or
in part, after the termination of this Agreement, shall
survive such termination, including but not limited to,
Licensee's obligation to maintain the secrecy and
confidentiality of the patents and trade secrets.
MISCELLANEOUS PROVISIONS
53. Licensee Not Agent of ZEROS
This Agreement does not in any way create the relationship of principal and
agent between ZEROS and Licensee, and in no circumstances shall the Licensee be
considered an agent of ZEROS nor shall ZEROS consider Licensee an agent.
54. Non-Waiver
No failure by ZEROS to take action on account of any default by Licensee,
whether in a single instance or repeatedly, shall constitute a waiver of any
such default or of the performance required of Licensee.
55. Invalidity
If any provision of this Agreement shall be invalid or unenforceable, such
provision shall be deemed modified in scope or application to the extent
necessary to render the same valid or shall be excised from this Agreement as
the situation may require, and this Agreement shall be construed and enforced
as if such provision had been included herein as so modified in scope or
application or as if such provision had not been included herein.
56. Notices
Any notice or demand given or made pursuant to the terms of this Agreement
shall be deemed to be properly given when deposited in the United States mail,
registered or certified, postage prepaid, addressed in the following manner:
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56.1. If given to ZEROS, it shall be addressed to ZEROS' address
stated above, or at such changed address as ZEROS may from
time to time designate.
56.2. If given to Licensee, it shall be addressed to Licensee's
address stated above, or at such changed address as Licensee
may from time to time designate.
57. Entire Agreement
This written Agreement contains the entire agreement between the parties. There
are merged herein all prior and collateral representations, promises, and
conditions in connection with the subject matter hereof Any representation,
promise, or condition not incorporated herein shall not be binding on either
party. Any matter not specifically granted by this Agreement, is not available
to Licensee without specific written consent and authorization from ZEROS.
58. Cost of Enforcement or Defense
In the event ZEROS is required to employ legal counsel or to incur other
expense to enforce any obligation of Licensee under this Agreement, or to
defend against any claim, demand, action, or proceeding by reason of Licensee's
failure to perform any obligation imposed on Licensee by this Agreement, and
provided that legal action is filed by or against ZEROS and such action or its
settlement establishes Licensee's default under this Agreement, ZEROS shall be
entitled to recover from Licensee the amount of all reasonable attorneys' fees
of such counsel and all other expenses incurred in enforcing such obligation or
in defending against such claim, demand, action, or proceeding.
59. Controlling Law
This Agreement, including all matters relating to its validity, construction,
performance, and enforcement, shall be governed by laws of the State of Texas.
Executed at Houston, Texas, on the day and year first written above.
ZEROS USA, Inc. ZERO California Corporation
/s/ XXXXX XXXXX /s/ XXXXXX X. XXXXXX
-------------------------------- --------------------------------------
By: Xxxxx Xxxxx, President By: Xxxxxx X. Xxxxxx
Xxxxxx ZEROS Corporation Lawsons ZEROS Corporation
/s/ XXXXXXX XXXXXX /s/ XXX XXXXXX
-------------------------------- --------------------------------------
By: Xxxxxxx Xxxxxx By: Xxx Xxxxxx
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