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EXHIBIT 10(B)(2)
AGREEMENT FOR SALE OF
ZEROS INDIAN APPROVED LICENSE
This Agreement for Sale of ZEROS Indian Approved License ("ZIA) is
made at Houston, Texas as of March 31, 1997, by and between ZEROS USA, Inc.,
hereinafter referred to in this Agreement as "ZEROS," and ZEROS CALIFORNIA
CORPORATION, hereinafter referred to in this Agreement as "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 and Licensee agree as follows:
RECITALS
1. Legal Status of ZEROS
ZEROS is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Texas, with corporate power to
own property and carry on its business as it is now being conducted.
ZEROS has its principal office and place of business at 000 Xxxxx Xxxx
Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
2. Legal Status of Licensee
Licensee is a California Stock Corporation incorporated pursuant to
the laws of the State of California, with power to own property and
carry on business as contemplated by this Agreement. Licensee has its
principle office and place of business at 00000 Xxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxx 00000.
3. Business of ZEROS
a. ZEROS is engaged in the business of developing business
opportunities related to recycling energy using hazardous and
non-hazardous toxic wastes.
b. ZEROS is engaged further in the business of licensing the
operation of energy recycling oxidation systems by others.
c. ZEROS is engaged further in the business of selling energy
recycling systems.
d. ZEROS makes available from time to time certain contracts to
its current customers to provide remediation services which
are offered and sold by ZEROS.
e. 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."
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4. Desire of Licensee
a. Licensee desires to have the right to operate one or more
energy recycling oxidation systems, including the use of any
extant patents, proprietary marks and indicia.
b. Licensee desires to purchase a license to sell to others
operating licenses and energy recycling oxidation systems,
including the use of any extant patents, proprietary marks and
indicia.
c. Licensee desires to derive the benefits of ZEROS' information,
experience, advice, guidance, know-how, and customer goodwill.
GRANT, TERM, AND INITIAL FEE
5. Grant of License
ZEROS grants to Licensee, and Licensee hereby accepts from ZEROS, 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 6, below.
a. To develop business opportunities related to recycling energy
using hazardous and non-hazardous wastes, including toxic
wastes.
b. To operate energy recycling oxidation systems using all extant
and available patents, proprietary marks and indicia.
c. To use, in connection with the operation of its own energy
recycling system(s), ZEROS' proprietary marks, indicia and
patents.
d. To sell to industrial customers, developed either by ZEROS or
Licensee, operating licenses and zero-emission energy
recycling oxidation systems under terms and conditions
approved by ZEROS.
e. To sell to bio-medical customers, developed either by ZEROS or
Licensee, operating licenses and zero-emission energy
recycling oxidation systems under the terms and conditions
approved by ZEROS.
f. To use, in connection with specific contracts to sell said
zero-emission energy recycling oxidation licenses and systems,
ZEROS' proprietary marks, and indicia.
g. To use for marketing purposes, limited information regarding
ZEROS' patents, subject to ZEROS' approval.
6. Geographical Area
The geographical area assigned by ZEROS to Licensee shall be
identified as:
The State of California.
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7. 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 6, above. Notwithstanding that the license being
purchased by ZEROS is not exclusive within the geographical area,
Licensee shall have the right to be paid a commission by ZEROS USA,
Inc., for fully described in Paragraph 10, 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 this contract, subject to the provisions of
Paragraph 9, hereinbelow.
8. Term
The term of this Agreement and of the right and license herein granted
shall commence on March 31, 1997 and shall continue perpetually unless
terminated in accordance with the terms hereof.
9. 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 $2,700,000, 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.
10. Commissions
Licensee shall have a right to be paid the following commissions:
a. ten percent of any license fees or permits resulting from
sales to third parties originated by Licensee.
b. one percent of the gross income resulting from sales of energy
recycling systems originated by Licensee; and
c. one percent of the gross income resulting from the sale of
products produced from the operation of any energy recycling
systems originally sold through the Licensee;
within Licensee's geographical area identified in Paragraph 6, above,
for the term indicated in Paragraph 8, above, and for so long as
Licensee continues to perform according to the terms of this contract.
Said commission shall be paid by ZEROS to Licensee within thirty days
after ZEROS collects any funds from any other party within Licensee's
geographical area.
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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
11. 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.
12. 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 the 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 to do anything, which would infringe on, harm,
impair, or contest the rights claimed by ZEROS in and to any of the
proprietary rights.
13. 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.
14. Confidential Nature of ZEROS' System
a. 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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b. 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.
c. Licensee agrees that both during and after the term of this
Agreement:
i. 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.
ii. 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.
15. 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
16. Initial Obligation
ZEROS agrees to sell to Licensee a license and related rights within
the geographical area designated in Paragraph 6, above, for the
operation and/or sale of energy recycling systems known as ZEROS.
17. 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.
18. 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.
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19. 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.
20. 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.
21. Sale of ZEROS Units by Licensee
a. 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.
b. 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.
22. 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.
23. Definition of Gross Income
For the purposes of Paragraph 22, 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.
24. Reports and Records
a. Licensee shall submit to Licensee 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.
b. 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
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less gross income was generated than what the 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.
c. 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.
25. 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
26. 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 all ZEROS units
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.
27. 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 his best efforts to cultivate, develop, and expand
the market therefor whenever possible.
28. Maintenance and Inventory
Licensee agrees that Licensee at all times during the term of this
Agreement maintain an inventory of ZEROS units, subject to reasonable
business standards and judgment, adequate to fulfill the public demand
and to promptly satisfy prospective customers seeking to use his
services to recycle energy and dispose of toxic wastes.
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29. Managerial Responsibility
Licensee agrees that at all times during the term of this Agreement,
Licensee will assure that each operator of a ZEROS unit:
a. Shall devote its/his full time and effort to the active
management and operation of their respective ZEROS unit(s).
b. Shall reserve and exercise ultimate authority and
responsibility with respect to the management and operation of
their respective various ZEROS unit(s).
30. 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:
a. He 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.
b. He will at his sole expense, or require any third party to at
his/its sole expense, maintain the interior and exterior
painting of the buildings at the sites where the ZEROS units
may be located.
C. He 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.
31. 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.
32. 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 the ZEROS will be governed, or will required 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 nothing, which would tend to
discredit, dishonor, reflect adversely upon, or in any manner injure
the reputation of ZEROS or Licensee.
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33. 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.
34. Insurance
a. Licensee and/or any of his 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 his customers,
agents, servants, or contractors in connection with the
rendering of service by Licensee and/or any of his customers,
and for all claims for damage to property or for injury or
death of any person or persons directly or indirectly
resulting therefrom.
b. 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
33.a, above, including costs and reasonable attorney's fees.
C. 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 his customers at their sole cost and
expense at the direction of ZEROS when reasonably required by
changed circumstances.
d. The policies of insurance referred to in subparagraph 33.c,
above, shall expressly insure both the Licensee, any of his
customers, and the ZEROS and shall require the insurer to
defend both the Licensee and his customers and the 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 the
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
ten day's prior written notice to ZEROS.
35. 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.
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36. 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.
37. 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.
38. ZEROS' Right to Inspect ZEROS 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 operating 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.
TRANSFERABILITY
39. General
Except as set forth in Paragraphs 40 through 41, 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.
40. 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:
a. 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.
b. Licensee shall execute and deliver to ZEROS a guaranty of the
payment of such
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corporation's debts to ZEROS, if any.
c. Licensee shall remain bound and liable to ZEROS with respect
to all nonmonetary obligations of Licensee under this
agreement whether then accrued or thereafter arising.
41. Consent by ZEROS to Transfer
a. 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.
b. 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.
c. Subject to prior compliance with the provisions of Paragraph
40, above, the ZEROS shall consent to the proposed
transaction, provided the following conditions are fulfilled:
i. 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.
ii. 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.
iii. 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.
42. Sale of Business-ZEROS' Right of First Refusal
a. 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.
b. 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.
c. If ZEROS does not so notify Licensee within the fourteen-day
period, the sale to the third
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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.
43. 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
44. 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.
45. 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
a. Failure by Licensee to make any payments of money payable and
due to ZEROS pursuant to this Agreement.
b. Failure by Licensee to submit to ZEROS when due any reports
required pursuant to this Agreement.
C. Failure by Licensee to maintain and operate its operating
site(s) in accordance with good business practices.
d. Failure by Licensee to perform any obligations imposed on
Licensee by any provision of this Agreement.
e. Willful and material falsification by Licensee of any report,
statement, or other written data furnished to Licensee.
f. Willful and repeated deception of customers of Licensee
relative to the nature or quality of services rendered.
46. Arbitration
a. In the event ZEROS gives Licensee any notice of default or
termination and Licensee disputes the right of ZEROS to
terminate the Agreement or in the event of any dispute,
Licensee may make a written demand on ZEROS, at any time prior
to or
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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 41, 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.
b. 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.
c. 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 the 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 41, 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.
d. The cost of arbitration shall be taxed and borne as provided
in the Uniform Arbitration Act.
e. 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.
47. Automatic Termination
The Agreement shall terminate immediately on the occurrence of any of
the following events, without the necessity of notice of any kind by
either party.
a. The termination of Licensee's right to possession of the
premises designated in Paragraph 2, above, subject, however,
to the provisions of Paragraph 48, below.
b. 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.
c. The making by Licensee of a general assignment for the benefit
of creditors.
d. The appointment of any receiver, trustee, sequestrator, or
similar officer to take
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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.
48. 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.
49. 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:
a. Promptly cause Licensee to pay sums owing from Licensee to
ZEROS.
b. 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.
c. Immediately and permanently remove, destroy, or obliterate,
at Licensee's expense, all signs containing any of ZEROS'
proprietary marks or indicia.
d. 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.
e. Immediately and permanently discontinue all advertising placed
by Licensee as an authorized license holder.
f. 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.
g. 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.
50. General Provisions Regarding Termination
a. 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.
Page 14 of 16
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b. 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
51. Licensee Not Agent of ZEROS
The 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.
52. 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.
53. 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.
54. Notices
Any notice or demand given or made pursuant to the terms of the
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:
a. 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.
b. 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.
55. 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
Page 15 of 16
16
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.
56. 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.
57. 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.
/s/ XXXXX XXXXX
------------------------------------
By: Xxxxx Xxxxx, President
Zeros California Corporation
/s/ XXXXXX XXXXXX
------------------------------------
By: Xxxxxx Xxxxxx
Page 16 of 16
17
AGREEMENT
ZEROS CALIFORNIA CORPORATION
This Agreement is made at Houston, Texas, as of this 31st day of March
1997 by ZEROS USA, Inc., hereinafter referred to as "ZEROS," and Xxxxxx Xxxxxx
Builders, Inc., hereinafter referred to as "RMB."
Recitals
1. ZEROS USA, Inc., is a business corporation incorporated pursuant to the
laws of the state of Texas, with power to own property and carry on
business as contemplated by this Agreement. Licensee has its principal
office and place of business at 000 Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxx 00000.
2. Xxxxxx Xxxxxx Builders, Inc. is a corporation conducting business in the
state of California and having its place of business at 00000 Xxxxxxx Xxxx,
Xxxxxxx, Xxxxxxxxxx, 00000.
3. ZEROS has formed and desires to transfer to RMB 100,000 shares of the stock
of ZEROS California Corporation, which company owns all of the following
assets:
3.1. ZEROS Approved License, including the right to use ZEROS and ZEROS
Bio-Dynamics technology
3.2. The trade name of "ZEROS California Corporation"
4. RMB, agrees to accept from ZEROS all of the stock of ZEROS California
Corporation, which company owns all the assets described in paragraph 3
above.
Consideration
5. Now, therefore, ZEROS shall transfer to RMB on the books of ZEROS
California Corporation and on the terms and conditions set forth in this
Agreement all of the stock of ZEROS California Corporation.
6. ZEROS shall transfer to ZCC up to 1O% of the stock issued for all future
corporations formed for new, additional licensees in the state of
California originated by "ZCC". Said stock will inure to ZCC fully paid
and non-assessable when the pertinent terms of the contract are met.
Page 1 of 7
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7. RMB shall make the following contract payments on the dates indicated:
Contract Payment Due Due Date Amount Due
-------------------- -------- ----------
1 3-31-98 $ 140,000.00
2 3-31-99 140,000.00
3 3-31-00 140,000.00
4 3-31-01 140,000.00
5 3-31-02 $ 2,140,000.00
Additional Consideration
8. RMB shall be further required, as additional consideration, to comply with
the following milestone terms and conditions:
8.1. Present a minimum of five qualified license purchase referrals
during the term of the contract.
8.2. Install at least one ZEROS plant in the state of California.
8.2.1. RMB may install the plant for ZCC's interest or for a third
party.
8.2.2. A plant installed by a third party will entitle ZCC to a 1O%
commission for the placement of a license and 1% of the
purchase price of a ZEROS plant to that third party.
Payment of Consideration
9. The stock of ZEROS California Corporation shall be transferred at the time
and place indicated at paragraph 13 below.
1O. The payment to ZEROS of the consideration referenced in paragraph 6 also
shall be paid at the place indicated at paragraph 13 below.
Page 2 of 7
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Warranties by ZEROS
11. ZEROS hereby warrants and represents to RMB that:
11.1. The financial records for said business, previously inspected by
RMB, contain a full and complete record and account of affairs of
said business and accurately set forth all liabilities, and other
matters pertaining to the fiscal or financial condition of said
business through March 31, 1997; furthermore, that there have been
no material changes in the financial condition of said business
since then, nor will there be prior to the time set for
consummation of this Agreement, except transactions normal to said
business;
11.2. ZEROS is the sole owner of said business and shares of stock of
said business with full right to sell or dispose of the stock of
said business as ZEROS may choose and no other person or persons
whatsoever have any claim, right, title, interest, or lien, in, to
or on said business except as shown on the financial records of
said business inspected by RMB;
11.3. No litigation, actions, or proceedings, legal, equitable,
administrative, through arbitration, or otherwise, are pending or
threatened that might affect said business or the consummation of
the purchase and sale described in this Agreement;
11.4. ZEROS owes no obligations and has contracted no liabilities
affecting said business or that might affect this Agreement that
are not shown on the financial records inspected by RMB;
11.5. ZEROS shall execute and deliver to RMB a Stock Transfer
Confirmation of the shares of ZEROS California Corporation.
Compliance with Bulk Sales Law
12. The transfer of the assets of ZEROS California Corporation, described in
this Agreement is not subject to the Bulk Transfer Provisions of the
California Uniform Commercial Code.
Time and Place of Transfer
13. This Agreement shall be consummated at 000 Xxxxx Xxxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000, on the date first entered.
Page 3 of 7
20
Conduct of Business
14. Pending consummation of this Agreement ZEROS shall continue to operate said
business in the same manner as it has been operated by ZEROS in the past.
Inventory
15. A complete inventory of the assets of the business is attached hereto and
marked as Exhibit "A."
Costs and Expenses
16. All costs and expenses incurred in this Agreement in the manner prescribed
by this Agreement shall be borne by ZEROS and RMB in the following manner:
16.1. Each party, ZEROS and RMB, having been represented by its or their
attorney in this transaction, shall pay the fee of the attorney
who represented it or them in negotiating this Agreement and
supervising the terms described in it;
16.2. Any and all closing costs and expenses arising from the
performance of this Agreement, if any, shall be borne by the
parties, ZEROS and RMB, in equal proportions.
Indemnity Agreement by ZEROS
17. Except as otherwise expressly provided in this Agreement, RMB shall
indemnify and hold ZEROS and the property of ZEROS, including said business
and the assets of said business, free and harmless from any and all claims,
losses, damages, injuries, and liabilities arising from or on account of
RMB's operation of said business or RMB's ownership of any of the assets of
said business that are subject to this Agreement.
No Representations
18. RMB agrees with and represent to ZEROS that said assets of said business,
and the financial records of said business described above have been
inspected by RMB, and that said assets subject to this Agreement are being
transferred to RMB as a result of such inspection and not as a result of
any representations made by ZEROS or by any agent of ZEROS that are not
incorporated in this Agreement.
Page 4 of 7
21
Covenant Not to Compete
19. ZEROS agrees that it will not at any time immediately following the
consummation of this agreement directly or indirectly engage in, or have
any substantial interest in or in common with any person, firm, or
corporation that engages in inspection services similar to, or competitive
with the business described in this Agreement so long as ZCC shall engage
in such businesses in the same area. This covenant does not limit ZEROS
from conducting consulting services or inspection services in the same
service area of ZCC.
Entire Agreement
20. This Agreement constitutes the sole and only agreement between ZEROS and
RMB respecting said business described in this Agreement, and correctly
sets forth the obligations of ZEROS and RMB to each other as of this date.
Any agreements or representations respecting said business not expressly
set forth in this Agreement are null and void.
Notices
21. Any and all notices or other communications required or permitted by this
Agreement or by law to be served on or given to either party hereto, ZEROS
or RMB, by the other party to this Agreement shall be in writing and shall
be deemed duly served as follows:
21.1. On ZEROS: 000 Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
21.2. On Xxxxxx Xxxxxx Builders, Inc.: 00000 Xxxxxxx Xxxx, Xxxxxxx,
Xxxxxxxxxx, 00000.
Either party may change the party's address for the purposes of this
Paragraph by giving the other party written notice by certified mail,
return receipt requested, of the new address in the manner set forth above.
Attorney's Fees
22. Should any arbitration be commenced between the parties to this Agreement
concerning said business, this Agreement, or the rights and duties of
either in relation thereto, the party, ZEROS or RMB, prevailing in such
arbitration shall be entitled, in addition to such other relief as may be
granted, to a reasonable sum as and for attorney's fees in such arbitration
that shall be determined by the arbitrator or in a separate action brought
for that purpose.
Page 5 of 7
22
No Assignment
23. Neither this Agreement nor any interest therein shall be assigned by ZEROS
or RMB without the written consent of the other.
Binding on Heirs
24. This Agreement shall be binding on and shall inure to the benefit of the
heirs, executors, administrators, successors, and assigns of the parties
hereto, but nothing contained in this Paragraph shall be construed as a
consent to any assignment of this contract by either ZEROS or RMB.
Law Governing Agreement
25. This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas.
ZEROS USA, Inc.,
/s/ XXXXX XXXXX
---------------------------------
By: Xxxxx Xxxxx, President
Xxxxxx Xxxxxx Builders, Inc.
/s/ XXXXXX XXXXXX
---------------------------------
Xxxxxx Xxxxxx, President
Page 6 of 7
23
EXHIBIT A
ASSETS
ZEROS License
Trade Name of ZEROS CALIFORNIA CORPORATION
Page 7 of 7
24
CONTRACT ADDENDUM
ZEROS CALIFORNIA CORPORATION
The undersigned ZEROS approved Permit holder hereby agrees to an amended
Contract Payment schedule on the ZEROS California Corporation transaction as
follows:
Contract Payment Date: Amount Due:
---------------------- -----------
March 31, 1998 . . . . . . . . . . . . . $ 900,000.00
March 31, 1999 . . . . . . . . . . . . . $ 900,000.00
March 31, 2000 . . . . . . . . . . . . . $ 900,000.00
-------------
Total: . . . . . . . . . . . . . . . $2,700,000.00
The undersigned agrees that all payments are as above and are not refundable.
This agreement shall be effective March 31, 1997 the date concurrent with the
Agreement for the transfer for ZEROS California Corporation to the undersigned.
ZEROS California Corporation
By: /s/ XXXXXX XXXXXX
-------------------------
ZEROS USA, inc.
By: /s/ XXXXX XXXXX
-------------------------
25
Confirmation of the Agreement Transactions
ZEROS USA, inc.
Xxxxxx Xxxxxx Builders, Inc.
July 1, 1997
The undersigned parties hereby acknowledge and confirm the following Agreement
Transaction:
1. That the parties have revised and modified by mutual agreement and consent
in their hand the original agreements and documents for internal business
reasons.
2. That the effective date of the Agreement for the Transfer of the Stock
of ZEROS California Corporation by ZEROS USA, inc. to Xxxxxx Xxxxxx
Builders, Inc. is March 31, 1997.
Executed the 1st day of July 1997.
ZEROS USA, inc.
By: /s/ XXXXX XXXXX
--------------------------------
Xxxxxx Xxxxxx Builders, Inc.
By: /s/ XXXXXX XXXXXX
--------------------------------
ZEROS California Corporation, Inc.
By: /s/ XXXXXX XXXXXX
---------------------------------
