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Exhibit 10.7
EXCLUSIVE LICENSE AGREEMENT
THIS EXCLUSIVE LICENSE AGREEMENT ("Agreement") is made and entered into
on this the ____ day of December, 1999, by and between XXXXXXXX RESONANCE
ENTERPRISES, INC., 0000 Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx
00000 ("Xxxxxxxx"), and REALPURE BEVERAGE GROUP, LLC, 000 Xxxx Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxxx 00000 ("RealPure").
WHEREAS, Xxxxxxxx has developed a patented medical technology by which
homogenous magnetic fields are produced by Helmholtz coils or solenoids,
consisting of two identical coils equal in diameter and separated from each
other by a distance equal to the radius of each coil and connected in series to
a power source. The device has a beneficial effect upon all matter that is
treated by the device, including human and animal tissue. The device can be used
to restructure the molecular and sub-atomic activity of water and other liquids
which, when consumed by humans or animals, has a beneficial effect; and
WHEREAS, RealPure is a manufacturer of beverage products and desires to
obtain an exclusive license for the use of the resonance technology in
connection with the manufacture, sale and distribution of beverage products.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, and for other good and valuable consideration, the parties
hereby agree as follows:
1. GRANT OF EXCLUSIVE LICENSE.
1.1 Xxxxxxxx hereby grants to RealPure the exclusive right and
license to utilize the resonance technology and all patents, final and pending,
in connection with the resonance technology in conjunction with the manufacture,
sale and distribution of any and all types of beverage products in the
territory, as hereafter defined, subject however to the restrictions and
conditions set forth in this Agreement. RealPure acknowledges Xxxxxxxx'x
exclusive rights in the resonance technology and agrees that it will use the
same only so long as and only in the manner authorized by this Agreement. The
license granted herein includes the right to sub-license the use of the
resonance technology in connection with the manufacture, sale and distribution
of beverage products. In the event of a sub-license agreement with any other
person or entity, RealPure agrees that the grant of a sub-license shall not in
any way reduce RealPure's obligations to Xxxxxxxx under this Agreement,
1.2 Xxxxxxxx shall not enter into any other license or
distribution arrangements with any person or entity for the use of the resonance
technology in connection with the manufacturer, distribution or sale of any
beverage product of any kind, regardless of whether such beverage product shall
be intended for human or animal consumption. In the event that Xxxxxxxx breaches
the exclusive nature of this Agreement, or in the event that Xxxxxxxx licenses
the resonance technology for some other use and its licensee(s) adapts or
otherwise uses the resonance technology in connection with the manufacture,
distribution and sale of beverage products, Xxxxxxxx shall take immediate legal
action to enjoin any such use of the resonance
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technology. In the event that Xxxxxxxx does not take such action satisfactory to
RealPure, RealPure may, with or without notice to Xxxxxxxx, take such action, in
which event Xxxxxxxx shall be responsible for any and all fees, expenses, costs
or other charges incurred in connection with the enforcement of the exclusive
nature of the license granted hereby, including, but not limited to, attorneys'
fees and court costs.
2. TERRITORY. The territory in which RealPure may exercise its
exclusive license shall include the United States, including Hawaii, Alaska, and
its territories and possessions, Canada, Mexico and tile Caribbean Basin.
3. TERM. The term of this Agreement shall commence on the January 1,
2000 and shall terminate on December 31, 0000, XxxxXxxx may, in its sole
discretion, elect to renew and extend this Agreement for four three-year renewal
periods. In the event that RealPure desires to renew this Agreement, it shall do
so by giving Xxxxxxxx written notice of its intent to renew at least ninety (90)
days prior to the expiration of the primary term or the expiration of each
applicable renewal period.
4. ROYALTY. In consideration of the grant of the exclusive license and
the right to grant sub-licenses, RealPure shall pay Xxxxxxxx a royalty payment
for each case of finished product sold which is enhanced by the resonance
technology as set forth in the Royalty Addendum attached hereto as Exhibit "A."
Payment of the royalty shall be made in U.S. dollars and shall be paid on a
monthly basis. Payment of the royalty will be made for each calendar month
within forty-five (45) days following the end of each calendar month. The
royalty payment shall be accompanied with a sales report, broken down by
regions.
5. MANUFACTURE OF PRODUCT. RealPure will manufacture, bottle, label and
package the product in accordance with the specifications provided by Xxxxxxxx.
RealPure shall not be obligated to enhance all of its products with the
resonance technology and may select, in its sole discretion, the type and amount
of product to be enhanced. Xxxxxxxx shall furnish, at its sole cost, one
Industrial 12" Resonator, complete with all equipment which is necessary in
order to manufacture beverage products enhanced by the resonance technology.
Xxxxxxxx shall, at its own cost, maintain such equipment and keep such equipment
in good operating order. In the event that additional equipment is necessary to
accommodate additional manufacturing requirements due to an expansion of
RealPure's market, RealPure shall be responsible for obtaining and maintaining
any such additional equipment. Xxxxxxxx shall furnish, at its own cost, any and
all training requested by RealPure in connection with the use of the resonance
technology equipment. RealPure shall be responsible for obtaining property and
casualty insurance and shall be responsible for the payment of any ad valorem
taxes assessed by local and state authorities upon the equipment, Upon the
expiration or termination of this Agreement, RealPure shall return to Xxxxxxxx
all resonance technology equipment furnished by Xxxxxxxx and Xxxxxxxx shall
purchase from RealPure a resonance technology equipment furnished by RealPure
for eighty percent (80%) of the book value of such resonance technology
equipment on the date of expiration or termination of this Agreement, which
shall be determined pursuant to generally accepted accounting principles.
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6. MARKETING. RealPure will use diligent efforts to promote the sale
and distribution of the product and shall be responsible for all costs
associated with the advertising, sale and promotion of the product. RealPure
shall provide customer service in connection with the marketing, sale and
distribution of the product. The product shall initially be marketed in the
United States pursuant to a marketing plan to be mutually agreed upon by the
parties. Thereafter, upon thirty (30) days advanced written notice by RealPure
to Xxxxxxxx to manufacture, distribute or sale the product outside the United
States and the geographic location outside the United States in which RealPure
desires to market the product, the parties shall mutually agree upon a marketing
plan for such geographic area.
7. WARRANTIES OF XXXXXXXX. Xxxxxxxx hereby represents and warrants that
(i) it is the exclusive owner of the resonance technology; (ii) the resonance
technology for use with beverage products has been issued patents by the United
States Patent Office; (iii) such patent grants Xxxxxxxx the exclusive and sole
right to use the resonance technology in connection with the manufacture, sale
and distribution of beverage products and to grant licenses to the resonance
technology in connection with the manufacture, sale and distribution of beverage
products; (iv) Xxxxxxxx has not granted any license to use the patents in
connection with the manufacture, sale and distribution of beverage products to
any third person or entity; (v) Xxxxxxxx has maintained the confidentiality of
the resonance technology specifications at all times; (vi) the exclusive
proprietary rights of Xxxxxxxx to the resonance technology specifications do not
infringe upon any other person's ownership or proprietary rights or interest;
and (vii) the beverage products, when prepared in accordance with the resonance
technology specifications, will yield products that am good and merchantable and
fit for human and animal consumption and will not violate any federal rule or
regulation or any provision of the Federal Food, Drug and Cosmetic Act, as
amended, the Federal Insecticide, Fungicide and Rodenticide Act, the Federal
Hazardous Substance Act, or any application state pure foods acts and any other
applicable federal, state or local laws or regulations.
8. WARRANTIES OF REALPURE. RealPure hereby represents and warrants that
(i) the beverage products manufactured by it, except as altered by the resonance
technology, shall be good and merchantable and fit for human and animal
consumption and will not violate any rule or regulation of the Federal Food and
Drug Administration, the Federal Food, Drug and Cosmetic Act, as amended, the
Federal Insecticide, Fungicide and Rodenticide Act, the Federal Hazardous
Substance Act, or any other applicable state pure foods acts and any other
applicable federal, state or local laws or regulations; 00 Xxxxxxxx is the owner
of the proprietary rights and the resonance technology specifications and the
patent; and (iii) the resonance specifications constitute trade secrets of
Xxxxxxxx,
9. CONFIDENTIALITY. RealPure shall not disclose, duplicate, sell or
reveal any portion of the resonance technology specifications and will take
reasonable measures to insure that none of its employees, representatives,
manufacturers and sub-distributors to whom the specifications may be revealed
keep and respect the confidence extended to them by Xxxxxxxx, provided, however,
RealPure shall be authorized to reveal and disclose any portion of the
specifications reasonably necessary in order to grant sub-licenses to third
persons or entities, but any such disclosure shall be subject to a written
sub-license agreement which shall contain confidentiality provisions similar to
those set forth herein.
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10. INSURANCE. RealPure shall, at all times during the term of this,
Agreement, and for a period of five (5) years following the termination or
expiration of this Agreement, maintain in full force and effect general
liability insurance coverage on its operations, including broad form vendor's
coverage and product liability insurance. Such insurance shall be in an amount
of not less than $1,000,000,00 for each accident or occurrence, with an
aggregate of $2,000,000,00, and a $3,000,000.00 umbrella with a company which
has a rating of not less than "A-Class X11" in the Best Insurance Guide.
Xxxxxxxx shall, at all times during the terms of this Agreement and for a period
of five (5) years following the termination or expiration of this Agreement,
maintain in full force and effect its current comprehensive general liability
insurance coverage Policy No. DOM3001008, underwritten by Lloyd's of London. On
the effective date of this Agreement, and on each annual anniversary date
thereafter, the parties to this Agreement shall furnish to each other a
certificate of insurance evidencing that each of them has such insurance
coverage in full force and effect. Such insurance coverage shall contain an
endorsement which provides that the coverage will not be canceled or materially
modified except upon thirty (30) days written prior notice to the other party to
this Agreement.
11. INDEMNITY.
11.1 RealPure shall defend, indemnify and hold Xxxxxxxx harmless
from (i) any and all claims made against Xxxxxxxx based upon, arising out of or
related to the operation or condition of any part of RealPure's bottling plants;
(ii) the preparation, manufacture, bottling storage, warehousing, distribution
and sale of the beverage product except with respect to the implementation and
use of the resonance technology; (iii) any negligent act, misfeasance or
nonfeasance by RealPure or any of its agents, contractors, servants, or
employees, except with respect to the implementation and use of the resonance
technology; and (iv) any and all fees, costs and expenses incurred by or on
behalf of Xxxxxxxx in the investigation of or defense against any and all of the
foregoing claims. However, upon RealPure's notice to Xxxxxxxx that RealPure has
assumed the defense of any legal action or proceeding, RealPure shall not be
liable to Xxxxxxxx for any legal or other expense subsequently incurred by
Xxxxxxxx in connection with the defense thereof. Xxxxxxxx shall provide RealPure
with prompt written notice upon receipt of any of the foregoing claims, and
Xxxxxxxx shall not settle any such claim without RealPure's prior knowledge and
consent.
11.2 Xxxxxxxx shall defend, indemnify and hold RealPure harmless
against and from any and all claims made against RealPure based upon, arising
out of, or any way related to (i) the conduct of Xxxxxxxx'x business; (ii)
Xxxxxxxx'x ownership or possession of property; (iii) the use and implementation
of the resonance technology and the manufacture of beverage product in
conjunction with the resonance technology; (iv) any negligent act, misfeasance
or nonfeasance by Xxxxxxxx or any of its agents, servants or employees; (v)
Xxxxxxxx'x breach of any of its representations, warranties or covenants made
herein; (vi) advertising, promotional materials, statements or any other
representations made by RealPure to any third party, including the public or any
governmental agency, concerning the resonance technology, but only to the extent
that such representations are based upon information and/or materials provided
to RealPure by Xxxxxxxx for such purpose; and (vii) any and all fees, costs and
expenses, including, without limitation, attorneys' fees incurred by or on
behalf of RealPure in the investigation of or
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defense against any and all of the foregoing claims. However, upon notice to
RealPure that Xxxxxxxx has assumed the defense of any legal action or
proceeding, Xxxxxxxx shall not be liable to RealPure for any legal or other
expense subsequently incurred by RealPure in connection with the defense
thereof. RealPure shall provide Xxxxxxxx prompt notice of receipt of any such
claim and RealPure shall not settle any such claim without Xxxxxxxx'x prior
knowledge and consent.
12. RELATIONSHIP OF THE PARTIES. Nothing in this Agreement shall be
construed to create an agency relationship between RealPure and Xxxxxxxx,
RealPure is independent of and from Xxxxxxxx and RealPure's sole relationship to
Xxxxxxxx shall be as a licensee of the resonance technology pursuant to the
terms and conditions of this Agreement, Accordingly, neither xxxxx shall be
liable for any debts, accounts, obligations or other liabilities or torts of the
other party, or its agents or employees.
13. TERMINATION.
13.1 Either party may terminate this Agreement prior to the
expiration of the primary term, or any renewal term, only in the event of a
material breach of one or more terms and conditions of this Agreement which has
not been cured within thirty (30) days following written notice to the breaching
party. Xxxxxxxx may elect to terminate, after the second annual anniversary of
the effective date of this Agreement and each annual anniversary date
thereafter, in the event that the number of cases of beverage products sold
during the preceding calendar year does not exceed 120% of the sales for the
preceding year, provided, however, that RealPure may avoid termination by paying
the difference between royalties actually paid and royalties which would have
been payable in the event that the 120% minimum sales amount was achieved.
13.2 Upon the expiration or termination of this Agreement,
RealPure shall cease the use of the resonance technology in connection with the
manufacture, distribution and sale of beverage product, but shall have the right
to distribute and sell any beverage product enhanced by the resonance technology
which is manufactured prior to the expiration or termination of this Agreement.
ReaPure shall continue to be obligated to pay Xxxxxxxx the royalty payments
provided for herein on all beverage products manufactured prior to the
expiration or termination of this Agreement, but sold subsequent to the
expiration or termination of this Agreement. Within thirty (30) days after the
expiration or termination of this Agreement, RealPure shall return all resonance
technology equipment provided to RealPure by Xxxxxxxx, along with any and all
confidential, proprietary information which relates to the use of the resonance
technology in the manufacture of beverage products.
14. LIMITATION OF REMEDIES. Notwithstanding any provision herein to the
contrary, in the event of a breach of any one or more terms and conditions of
this Agreement by RealPure, RealPure's liability to Xxxxxxxx shall be limited to
the obligations of RealPure to make royalty payments as provided for herein, and
for any other breach, RealPure's liability shall be limited to the extent of
insurance coverage for the act, omission or occurrence which is the proximate
cause of the breach. Nothing contained in this paragraph shall limit or
otherwise affect Xxxxxxxx'x right to terminate this Agreement prior to the
expiration of the primary term, or any applicable renewal term, as provided for
hereinabove. Xxxxxxxx shall have no other remedy, including, but not limited to,
the remedy of specific performance with respect to RealPure's performance, or
the
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lack thereof, pursuant to the terms and conditions of this Agreement. In no
event shall RealPure be liable for any debts of Xxxxxxxx which may be incurred
upon reliance of this Agreement, or for any loss of profit, good will or any
other benefit except for the royalty payment.
15. NOTICE. All notices sent pursuant to this Agreement shall be in
writing, signed by the party sending the notice, and shall be sent either by
certified mail, postage prepaid, hand delivered to the recipient at the address
below, or forwarded via facsimile to the address and telephone number listed
below:
If to RealPure, to: REALPURE Beverage Group, LLC-
Xx. Xxxxx X. Xxx, President
Xxxx Xxxxxx Xxx 00000
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Telecopier: (000) 000-0000
If to Xxxxxxxx, to: Xxxxxxxx Resonance Enterprises, Inc.
Xx. Xxxxx X. Xxxxxxxx
Chief Operating Officer
0000 Xxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Telecopier: (000) 000-0000
16. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties and supercedes all other prior oral or written arrangements
and agreements. This Agreement may not be modified or amended, except by further
written instrument, or by an amendment to this Agreement, signed by both of the
parties hereto.
17. WAIVER. Any failure by any party hereto to exercise any of its
rights hereunder shall not be construed as a waiver of such rights, nor shall
any such failure preclude the existence of any such rights at any later time.
18. APPLICABLE LAW, JURISDICTION AND VENUE. Xxxxxxxx acknowledges and
agrees that substantial performance of this Agreement is to be performed in the
State of Mississippi, United States of America, and agrees that this Agreement
shall be governed by and construed in accordance with the laws of the State of
Mississippi. Xxxxxxxx hereby irrevocably submits to the jurisdiction of all
federal and state courts lying within the State of Mississippi and covenants and
agrees not to assert any challenge to the jurisdiction of any federal or state
court within the State of Mississippi, or to the venue of any action or the
personal jurisdiction of such courts to the parties hereto.
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DATED this the date first set forth hereinabove.
REALPURE BEVERAGE GROUP, LLC
By: /s/ XXXXX X. XXX
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Xxxxx X. Xxx, President
XXXXXXXX RESONANCE ENTERPRISE INC.
By: XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx,
Chief Operating Officer
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EXHIBIT "A"
ROYALTY ADDENDUM
Water $0.30 per case
Sports Drink $0.50 per case
Pedialite (pediatric drink) $0.60 per case
Active Adult (geriatric drink) $0.45 per case
The royalty payments set forth above shall be increased at the
beginning of the first renewal period and each renewal period thereafter in an
amount equal to the inflation rate occurring during the prior period as
published by the United States Department of Treasury and Commerce.
