EXHIBIT 10.1
LICENSE AGREEMENT
This agreement ("Agreement") made and entered into effective April 5, 1999
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("Effective Date") by and between Xxxxx X. Xxxxxxxxx & Associates, located at
X.X. Xxx 0000, Xxxxx, Xxxxxxxx Xxxxxx, Xxxxx, X.X.X., ("Grantor") and TEXAS
SCIENTIFIC INC. ("Licensee"), a Nevada Corporation whose registered office is at
00 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxx, Xxxxxx 00000;
W I T N E S S E T H:
WHEREAS, Grantor has certain rights as evidenced by the attached
Distribution Agreement (the "Distribution Agreement") to Products developed by
NW Technologies, Inc. ("NWT"), a Texas corporation with its principal offices at
0000 Xxxxxxxxxxxx, Xxxxxxx, Xxxxx 00000, which company has developed proprietary
know-how in the Products, including Products covered by one or more US Patents
that have been licensed to NWT, and other Products (as hereinafter defined); and
WHEREAS, NWT has proprietary rights to trade dress and trademarks for the
brand name "Natures' Way" and "The Environmental Solution", and other trademarks
and trade dress as may be revealed to Licensee from time to time, collectively
referred to as "Marks"; and
WHEREAS, Grantor is under obligation to maintain the proprietary rights of
NWT to the Marks and to protect NWT's proprietary know-how, as outlined in the
Distribution Agreement; and
WHEREAS, NWT and Grantor desire to have the Products marketed by the
Licensee, under the Licensee's own private label, in the Territory (as
hereinafter defined); and
WHEREAS, Licensee desires to market the Products in the Territory and
hereby acknowledges NWT's exclusive ownership of all of the Marks;
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, Grantor and Licensee agree as
follows:
ARTICLE I
GRANT, TERRITORY AND PRODUCTS
1.01 Grant and Territory. (a) Grantor hereby designates Licensee as a
Private Label distributor for the marketing of the Products in the market(s) and
geographic area(s) set forth in Exhibit "A" hereto, ("Territory"). Licensee
hereby accepts the designation as a distributor on the terms and subject to the
conditions contained herein.
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(b) Licensee hereby agrees that it will make no use of any present or
future Marks of NWT, or of any marks that would cause confusion with the general
public, for any reason without specific written approval of NWT. Upon
termination of this Agreement for any reason Licensee agrees to cease
immediately all use and display of NWT's trademarks, service marks and trade
names (the Marks) if any permission to use the Marks has been granted.
1.02 Products. (a) The term "Product(s)" as used herein shall mean only
those Products as defined in Exhibit "B" hereto.
(b) "Affiliated Persons" shall mean officers, employees, sales
representatives, consultants or other employees or non-employees to whom
Licensee grants authority to represent the Products.
(c) Licensee's owned label, ("Private Label"), shall mean that the
Product(s) shall be packaged by Licensee utilizing a label on the packages of
the Licensee's own design and invention. Since Licensee's intended uses of the
Product are outside the scope of the expertise of Grantor or its personnel,
Grantor will not be required to furnish label detail to Licensee.
1.03 Consideration: Licensee agrees to pay Grantor the sum of $2,000 US
in the form of 2,000,000 shares of Licensee's common stock, par value of $0.001
(the "Shares"). Licensee agrees to file a notice of placement of the Shares
with the U.S. Securities & Exchange Commission on Form D. Said stock is to be
issued as of the date of execution of the subscription agreements for the Shares
to the members of Grantor's Association in the amounts specified in Exhibit F of
this Agreement.
ARTICLE II
DURATION, TERMINATION AND NATURE OF RELATIONSHIP
2.01 Duration. The term of this Agreement shall be three (3) years from
the Effective Date unless terminated earlier as herein provided. This Agreement
may be renewed by Licensee for additional three (3) year periods if no event of
default exists and all other provisions of this Agreement are in full force and
effect.
2.02 Termination. (a) This Agreement may be terminated by Grantor for
cause upon the giving of notice as herein provided.
(b) Termination for Cause. In the event that Licensee shall file a
voluntary petition in bankruptcy or for reorganization of indebtedness, or that
Licensee should, for a period of more than ninety days be the subject of an
involuntary bankruptcy proceeding or receivership over all or substantially all
of Licensee's assets, or that Licensee or any Officer or Director of Licensee
should be found guilty of a felony or a crime involving moral turpitude, or that
Licensee shall, with knowledge and deliberation, breach any provision of this
Agreement, then Company may immediately, upon delivery of written notice to
Licensee, terminate this Agreement. Cause shall also include the
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violation by Licensee of any of the provisions, purchase requirements, or
monetary requirements of this Agreement ("Events of Default").
(c) Licensee will be allowed 30 days after written notification of an
Event of Default to correct the violation, except for monetary provisions which
will not be granted a grace period by Grantor.
(d) Termination of this Agreement shall not release Licensee or
Grantor from the obligations of either party contained herein.
(e) Termination of this Agreement cancels any rights granted to
Licensee herein.
2.02 Nature of Relationship. (a) This Agreement does not constitute nor
empower the Licensee as the agent or legal representative of Grantor for any
purpose whatsoever. Licensee is and will continue to be an independent
contractor.
(b) The arrangement created by this Agreement is not, and is not
intended to be, a franchise or business opportunity under the United States'
Federal Trade Commission Rule: Disclosure Requirements and Prohibitions
Concerning Franchising and Business Opportunity Ventures and is not a franchise,
business opportunity or seller assisted marketing plan or similar arrangement
under any other federal, state, local or foreign law, rule or regulation;
(c) Licensee shall not repackage or re-label Products for any reason,
except as may be allowed in any licensing agreement issued by Grantor, without
prior written authorization from Grantor. Notwithstanding the provisions of this
paragraph 2.03(c) it is understood by Company that Licensee will repackage
Product and apply Licensee's own label to the containers. The purpose of this
section is to assure that Licensee will not re-label any Product incorrectly
whereby the public would be confused with the recommended use of the Product.
(d) Licensee declares that it will not sell or offer for sale the
product Biocatalyst for use in applications involving bioremediation of
hydrocarbons or where microbes are used, enhanced or suggested for use without
specific written authorization from Grantor. The language herein is not intended
to prohibit the Licensee's use of the Product for that purpose in remediation of
sewage or waste water, whether in septic tanks or waste water treatment
facilities and the like, nor to prohibit Licensee's use of the Product in pond
remediation, exclusive of remediation of petroleum-based hydrocarbon
contamination. Licensee acknowledges that its intended use of the product
"Biocatalyst" for remediation of sewage or waste water, exclusive of remediation
of petroleum-based hydrocarbon contamination has not been specifically tested by
Grantor and as a consequence of this is not included as a recommended use of the
product Biocatalyst by Grantor or NWT. Notwithstanding the foregoing, both
parties acknowledge that in bioremediation, Biocatalyst is specifically used to
enhance the growth of microbes in soils, particularly at depths where oxygen
exchange is limited.
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ARTICLE III
CONFIDENTIALITY, INDEMNITY AND REMEDIES
3.01 Confidential Information. (a) Licensee acknowledges that in
performing its obligations hereunder it will have access to confidential
information and trade secrets of NWT and Grantor not generally known to the
public ("Confidential Information") and - Licensee is obligated to maintain the
confidentiality of the Confidential Information on its own behalf and on behalf
of its "Affiliated Persons" to whom Confidential Information is disclosed. For
the term of this Agreement and for a period of 5 years after cancellation hereof
Licensee and its Affiliated Persons will treat all Confidential Information in a
confidential manner.
(b) Licensee agrees that it will not analyze or otherwise test, or
submit to anyone else for analysis or testing (chemically or otherwise) any
Product unless approved in writing by Grantor and NWT and unless NWT and Grantor
are directly involved in the testing. NWT and Grantor grant the Licensee
hereunder the right to have the Product tested for the presence of oxygen,
pathogens or other nondesirable components. Grantor makes no warranty as to the
content of the Product.
(c) Licensee agrees to sign and to have its affiliated persons sign
confidentiality agreements in the same form as contained herein or as approved
by Grantor.
3.02 Noncompetition. Licensee agrees that the relationship between
Licensee and Grantor is of a special nature and further agrees on its own behalf
and on behalf of its Affiliated Persons that during the term of this Agreement
and for a period of twelve (12) months from and after the termination of this
Agreement that Licensee and its Affiliated Persons will not engage or hold any
interest, directly or indirectly, in any enterprise engaged in the manufacture,
sale or distribution of products of the type manufactured, sold or distributed
by Grantor as of the date this Agreement is terminated.
3.03 Remedies. Licensee agrees that Grantor shall be entitled to seek and
obtain injunctive relief from a court of competent jurisdiction for the purposes
of restraining Licensee from any actual or threatened breach of the provisions
contained herein.
3.04 Indemnity of Licensee and Grantor. Licensee and Grantor shall
indemnify the other and hold them harmless from and against any and all claims,
losses, costs, expenses and liabilities of any kind, including without
limitation court costs and reasonable attorneys' fees, suffered or incurred by
any of them on account of, related, or arising out of the conduct of the
Licensee's or Grantor's business as the case may be.
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ARTICLE IV
GRANTOR'S OBLIGATIONS TO LICENSEE
4.01 License to Produce. Grantor agrees to grant to Licensee a non-
exclusive license to manufacture the product "Biocatalyst" upon the following
terms and conditions:
(a) License. After the Licensee has purchased a minimum of 5,000
gallons of Product each month for a minimum period of six (6) consecutive months
a license will be granted to Licensee to produce the product in a location to be
named by Licensee and approved by Company with methods of production and
security measures as approved by Company. However, if after the effective date
hereof, Licensee, his successors or permitted assigns, can demonstrate to
Grantor's satisfaction the financial capability of Licensee, his permitted
successors or assigns, then upon a payment of a one time fee of $25,000.00 the
provisions of this section will be deemed by Company to have been fulfilled and
the referenced License to Produce will be granted by Company.
(b) The ingredient "Biomas" as used in the Product will be supplied
by Grantor upon terms, conditions and pricing that may be stated to Licensee by
Grantor at the time of issue of the subject License to Produce.
(c) Royalty and Expense. At the time of issuance of the subject
License to Produce a one-time payment of $10,000.00 will be made to Grantor by
Licensee to reimburse Grantor for unspecified expenses. A monthly royalty of [*]
of Licensee will be paid by Licensee to Grantor within 20 days of the end of
each month.
(d) Minimum Royalties. The minimum annual royalties to be paid by
Licensee hereunder, commencing with the granting of a license to Produce from
Grantor to Licensee will be $20,000.00. The minimum annual royalties to be paid
hereunder are non-accumulative.
4.02 Personnel. Grantor agrees to make available to Licensee Grantor's
trained technical personnel for consultation from time to time, if Licensee so
requests in writing. Such consultation may be by telephone or in person. If
Licensee requires the personal assistance of on site technical personnel, then
Licensee will pay actual travel and living expenses for such personnel as agreed
between Grantor and Licensee and an additional fee (per diem) of $300.00 per day
for each technical person requested.
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the
Securities Act of 1933, as amended.
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ARTICLE V
LICENSEE'S OBLIGATIONS TO GRANTOR
5.01 Develop Territory. Licensee agrees to (i) use its best efforts to
market the Product in specified markets throughout the Territory, (ii) devote
such time and effort as may be necessary to do so, (iii) retain and train
sufficient staff that is knowledgeable in the sale and use of the Products, and
(iv) maintain facilities sufficient to market, sell, and distribute the
Products.
5.02 Business Records. Licensee agrees to maintain reasonably detailed
and accurate records relating to the use of the Products and to furnish to
Grantor a detailed copy of all sales records, invoice copies, copies of all
testimonial letters, product usage data and other records and reports relating
to the sale and use of the Products within the Territory (the "Business
Records") upon request in writing by Grantor.
5.03 Compliance with Laws. Licensee agrees, on its behalf and on behalf
of its "Affiliated Persons" not to perform any acts or transactions which would
place Grantor or Licensee in violation of domestic, foreign, or international
laws, rules or regulations.
5.04 Information Regarding Use of Product. Licensee agrees to forward to
Grantor any and all information, including written, digital, or pictorial
pertaining to the use and distribution of the Products as such information
becomes known to Licensee.
5.05 Inventories. Licensee agrees to maintain adequate inventories of
Products in the Territory to service customers needs.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF LICENSEE
6.01 Organization. Licensee represents and warrants to Grantor that
Licensee has the authority to enter into this Agreement and to perform its
obligations hereunder.
6.02 No Defaults. Licensee represents and warrants to Grantor that
neither the execution and delivery of this Agreement nor the performance of the
transactions contemplated hereby will conflict with or result in a breach or
violation of any agreement, document, instrument, judgment, decree, order,
governmental permit, certificate or license to which Licensee is a party or to
which Licensee is subject.
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ARTICLE VII
TERMS OF SALE
7.01 Standard Terms and Warranties. SINCE THE USE OF THE PRODUCTS ARE
BEYOND THE CONTROL OF GRANTOR THE PRODUCTS ARE SOLD "AS IS", "WHERE IS", WITH NO
WARRANTIES, EXPRESS OR IMPLIED. GRANTOR MAKES NO WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PRODUCTS OR THEIR PERFORMANCE OR AS TO SERVICE, TO
LICENSEE OR ANY OTHER PERSON. IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE, TO LICENSEE OR TO ANY OTHER PERSON ARE HEREBY
DISCLAIMED. IN NO EVENT SHALL GRANTOR BE LIABLE TO LICENSEE OR ANY PERSON FOR
INCIDENTAL OR CONSEQUENTIAL DAMAGES. THE LIABILITY OF GRANTOR, IF ANY, FOR
DAMAGES RELATING TO ANY ALLEGEDLY DEFECTIVE PRODUCT UNDER ANY LEGAL OR EQUITABLE
THEORY SHALL BE LIMITED TO THE ACTUAL PRICE PAID FOR SUCH PRODUCT. Grantor may
change the limited warranty contained in this Section 7.01 at any time.
7.02 Placement of Orders and Shipping Terms. All shipments of Product
shall be FOB [*], unless specifically agreed otherwise [*]. All orders shall be
placed with Grantor in writing upon forms approved by Grantor and Licensee shall
verify the accuracy of the order. Grantor has the right to accept or reject any
order, and the terms and conditions thereof, if the Licensee is in default with
any of the requirements or conditions of this Agreement.
7.03 Claims of Faulty Products. Any claims for faulty Products shall be
governed by the Uniform Commercial Code of Texas, USA unless stated otherwise in
this Agreement.
7.04 Title and Risk of Loss. Products sold to Licensee shall become the
property of Licensee and title and risk of loss shall pass to Licensee [*],
subject, however, to a security interest which Grantor hereby reserves in the
Products until payment for the Products is received by Grantor.
7.05 Payment Terms. Licensee shall make payment to Grantor in U.S.
dollars to Grantor for all materials ordered under this Agreement at the address
set forth herein, and upon the terms and manner of payment as shown on the Price
List of Grantor as amended from time to time.
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the
Securities Act of 1933, as amended.
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7.06 Credit Sales. Licensee and Grantor both acknowledge and agree that
if any sale on credit is permitted hereunder Grantor hereby retains a security
interest in and lien upon the Products so sold until payment in full is received
by Grantor.
7.07 Insurance. Licensee shall secure and maintain [*]. Such insurance
coverage shall list Grantor as an additional insured party.
7.08 Prices. Licensee's price from Grantor for Products and printed
matter shall be as set forth in Grantor's current published pricing schedule.
This pricing is subject to change from time to time upon written notice
transmitted by facsimile, or US Mail, by Grantor to Licensee not less than ten
(10) days in advance of any price changes. Prices for Product by Grantor to
Licensee shall be as shown on Exhibit "B" attached hereto.
7.09 Printed Matter. Licensee is prohibited from producing and
distributing his own literature, or from any action that would give the
impression directly or indirectly, to others that Product and/or the "Marks" are
the property of Licensee.
7.10 Biomas Supply. At the time that an Agreement allowing the Licensee
to produce the Product as allowed by the terms and conditions stated in this
Agreement [*].
ARTICLE VIII
MISCELLANEOUS CONDITIONS
8.01 Governing Law. This Agreement and any questions concerning its
validity, construction and performance shall be governed by the laws of the
State of Texas, U.S.A., with venue in Xxxxxx County, Texas. Further, the
parties to this Agreement hereby irrevocably submit to the exclusive
jurisdiction of the federal courts sitting in Xxxxxx County, Texas, for any
action or proceeding arising out of or relating hereto.
8.02 Notices. Any notice or other communication required or permitted to
be given hereunder shall be in writing and shall be sent by certified United
States mail, return receipt requested to the other party at the address
specified in the first paragraph of this Agreement. The address of either party
specified above may be changed by a notice given by such party to the other
party in accordance with this Section 8.02.
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the
Securities Act of 1933, as amended.
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8.03 Excuse of Performance. Grantor's and Licensee's performance (other
than Licensee's obligation to pay for Products or other fees or monetary
obligations in accordance herewith, which shall not be excused) hereunder shall
be excused if (but only for so long as) any of the following conditions or
events occur and are continuing: Labor conflicts, strikes, lock-outs, fires,
explosions, war, civil disturbances, unforeseen military action, governmental
action, requisitions or seizures, delays of subcontractors or vendors,
unavailability of raw materials or transport facilities, acts of God or nature,
or any other condition or event which is beyond the reasonable control of
Grantor or Licensee, as the case may be.
8.04 Entire Agreement. This Agreement, the Exhibits hereto and any
confidentiality agreement and subdistribution agreement, constitute the entire
agreement between the parties with respect to the subject matter hereof and may
not be altered or modified except by an agreement in writing referring to this
agreement and signed by the parties hereto. Grantor and the Licensee agree that
this agreement supersedes all prior agreements written or oral.
8.05 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute but one and the same instrument.
8.06 No Waiver. No failure or delay by any party hereto in exercising any
right, in whole or in part, power or privilege hereunder shall operate as a
waiver thereof.
8.07 Amendment. This Agreement may not be amended or modified except by
an instrument in writing signed on behalf of the parties thereto specifically
referencing this Agreement.
8.08 Severability. Any provisions hereof prohibited by or unlawful or
unenforceable under any applicable law of any jurisdiction shall be ineffective
as to such jurisdiction, without affecting any other provision of this
Agreement.
8.09 Binding on Successors; Assignment. This Agreement is binding on, and
shall inure to the benefit of the parties hereto and their respective
successors, heirs and permitted assigns. This Agreement and any rights or
duties hereunder may not be assigned by Licensee, whether such assignment occurs
by merger, consolidation, sale, lease, other disposition of or any other
business combination of Licensee, without the prior written consent of Grantor.
Grantor may assign its rights hereunder to any person provided that such person,
either expressly or by operation of law, assumes Grantor's obligations
hereunder. The above notwithstanding, Grantor understands that Licensee is, as
of the effective date hereof, negotiating with several companies for the purpose
of entering into a merger, joint venture, or marketing arrangement specifically
for the purpose of marketing or financing Licensee's efforts in marketing of the
Product. Grantor agrees that as long as the requirements of this Agreement are
fulfilled that
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Grantor will not unreasonably deny a request to allow Licensee to enter into the
contemplated agreement.
8.10 Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives on the dates set forth beneath their
respective signatures below, to be effective for all purposes as of the date
first above written.
TEXAS SCIENTIFIC INC. XXXXX X. XXXXXXXXX & ASSOCIATES
BY: /s/ Xxxx X. Xxxxxx BY: /s/ Xxxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxx Xxxxx X. Xxxxxxxxx
TITLE: Secretary
DATE: 4/5/99 DATE: 4/5/99
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XXXXXXX "X"
XXXXXXXXX
(AMENDED)
[*]
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the
Securities Act of 1933, as amended.
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EXHIBIT "B"
Products Included in This Agreement
[*]
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the
Securities Act of 1933, as amended.
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XXXXXXX "X"
XXXXXXXX OBLIGATIONS
[*]
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the
Securities Act of 1933, as amended.
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EXHIBIT "D"
PAYMENT TERMS
[*]
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the
Securities Act of 1933, as amended.
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EXHIBIT "E"
CONFIDENTIALITY AGREEMENT
[*]
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the
Securities Act of 1933, as amended.
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EXHIBIT F
SHARE DISTRIBUTION SCHEDULE
[*]
* Information omitted and filed separately with the SEC pursuant to
request for confidential treatment under Rule 406 under the
Securities Act of 1933, as amended.
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