EXHIBIT F
[GRAPHIC]
AIRSOPURE
DEVELOPMENT AGREEMENT
VERSION 1/00
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DEVELOPER
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STREET
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CITY STATE ZIP
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PHONE NUMBER
Date of this Agreement:
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THIS DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into by and
between Airsopure International Group, Inc., a Nevada corporation (hereinafter
referred to as "Airsopure") and the Developer written in above (hereinafter
referred to as "You"). Either party or both parties respectively may be referred
to as "Party" or "Parties."
RECITALS
WHEREAS, Airsopure has acquired the right to develop and as a result of the
expenditure of time, skill, effort and money has developed, a unique and
distinctive system relating to the establishment and operation of retail and
direct marketing centers under the xxxx "Airsopure" which specialize in the sale
of residential air purification systems and other products (the "System");
WHEREAS, the distinguishing characteristics of the System include, without
limitation, distinctive exterior and interior design, decor, uniform standards,
specifications and procedures for operations; quality and uniformity of products
and services offered; procedures for inventory and management control; training
and assistance; and advertising and promotional programs; all of which may be
changed, improved and further developed by Airsopure from time to time;
WHEREAS, Airsopure identifies the System by means of certain trade names,
service marks, trademarks, symbols, logos, emblems and indicia of origin,
including, but not limited to, the xxxx "Airsopure" and such other trade names,
service marks (including but not limited to "The Essence of Clean Air"), and
trademarks as Airsopure may develop in the future to identify for the public the
source of services and products marketed under these marks and under the System
and representing the System's high standards of quality, products and services
(collectively, the "Proprietary Marks"); and
WHEREAS, You wish to obtain the right to develop Airsopure Centers (the
"Center(s)") under the System within the geographic territory described in this
Agreement, under the terms and conditions of this Agreement;
NOW, THEREFORE, the Parties, in consideration of the mutual undertakings and
commitments set forth herein, the receipt and sufficiency of which are hereby
acknowledged, agree as follows:
1. GRANT
A. Airsopure hereby grants to You and You hereby accept, pursuant to the terms
and conditions of this Agreement, the right and obligation to develop Centers
solely within the geographic area described below (the "Development Territory"),
such development rights to be exercised according to Section 3.A. and according
to the development schedule in Section 3.B.1. (the "Development Schedule").
The Territory shall be:
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B. Except as otherwise provided in this Agreement and any franchise agreement
between You and Airsopure, and subject to Your full compliance with this
Agreement, Airsopure shall not establish or authorize any other person or
entity, other than You, to establish, a Center in the
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Development Territory during the term of this Agreement.
C. This agreement is not a franchise agreement and does not grant to You any
right or franchise to operate a Center or any right to use or any interest in
the Proprietary Marks or the System.
2. DEVELOPMENT FEE
A. In consideration for the development rights granted to You herein and the
rights granted to You under separate Franchise Agreements, You shall pay to
Airsopure, upon execution of this Agreement, a non-refundable Development Fee
equal to $25,000.00 for the first Center, plus $10,000.00 for each subsequent
Center to be developed hereunder after the initial Center. Pursuant to the
Development Schedule set forth in Section 3.B., the total Development Fee is
$
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B. Application of Development Fee
The Development Fee shall be applied to the initial Franchise Fees under
separate franchise agreements payable with respect to each Center opened
hereunder as follows:
1. For the initial Center to be developed under this Agreement, $25,000.00
of the Development Fee shall be applied to the initial franchise fee of
$25,000.00 due upon execution of the franchise agreement for the initial Center;
2. For each additional Center to be developed under this Agreement,
$10,000.00 of the Development Fee shall be applied to the initial franchise fee
of $25,000.00 due upon the execution of each applicable franchise agreement, and
the balance shall be paid out of Your separate funds.
C. All franchise fees shall be nonrefundable except as otherwise provided in the
respective franchise agreement (as defined in Section 3.A. below).
3. SCHEDULE AND MANNER FOR EXERCISING DEVELOPMENT RIGHTS
A. You shall exercise the development rights granted hereunder only by entering
into a separate franchise agreement with Airsopure for each Center for which a
development right is granted. Airsopure correct form of franchise agreement is
attached as Exhibit C (the "Franchise Agreement"). Upon execution of this
Agreement, You shall execute and deliver a Franchise Agreement for the first
Center to be developed hereunder. You shall additionally execute the form of
franchise agreement then being used by Airsopure for new franchisees operating
under the System, with respect to each subsequent Center developed hereunder,
but not later than 4 months prior to the projected opening date of the
applicable Center. These subsequent forms of franchise agreements shall also be
included in the term "franchise agreements", as used herein.
B. 1. Development Schedule
Acknowledging that time is of the essence, You agree to exercise Your
development rights according to Section 3.A. and according to the Development
Schedule below, which schedule designates the number of Centers in the
Development Territory to be established and in operation by You upon the
expiration of each of the designated development periods (the "Development
Periods"):
Cumulative Total Number of
Centers located in the
Expiration Date of Territory Which You Shall
Development Period Have Open and in Operation
A.
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B.
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C.
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D.
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E.
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F.
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G.
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H.
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During any of the Development Periods set forth above, subject to the terms and
conditions of this Agreement, You may develop more than the total minimum number
of Centers which You are required to develop during that Development Period. Any
Centers developed during a Development Period in excess of the minimum number of
Centers required to be developed upon expiration of that Development Period
shall be applied to satisfy Your development obligation during the next
succeeding Development Period,
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if any. Notwithstanding the above, You shall not have open and in operation more
than the cumulative total number of Centers You are obligated to develop under
this Agreement as set forth above in the Development Schedule without the prior
written approval of Airsopure.
2. If during the term of this Agreement, You cease to operate any Center
developed under this Agreement, You shall develop a replacement Center to
fulfill Your obligation to have open and in operation the required number of
Centers upon the expiration of each Development Period. The replacement Center
shall be developed within a reasonable time to be agreed upon by the Parties
after You cease to operate the Center to be replaced. If during the term of this
Agreement You, in accordance with the terms of any Franchise Agreement for a
Center developed under this Agreement, transfers Your interest in such Center,
the transferred Center shall continue to be counted in determining whether You
have complied with the Development Schedule so long as it continues to be
operated as an Airsopure Center. If the transferred Center ceases to be operated
as an Airsopure Center during the term of this Agreement, You shall develop a
replacement Center within a reasonable time to be agreed upon by the Parties
after the transferred Center ceases to be operated as an Airsopure Center. In
either case, the reasonable time period shall, subject to Airsopure consent,
extend the term of the applicable Development Period to the end of the mutually
agreed upon time period; provided, however, that in no event shall such time
period exceed 6 months.
3. At the end of each Development Period, You shall provide Airsopure with
written notice of the projected opening date of each Center required to be
developed during the next Development Period.
4. Failure by You to adhere to the Development Schedule or to any time
period for the development of replacement Centers as set forth in Section 3.B.1.
shall constitute a material event of default under this Agreement (see Section
6. below).
4. TERM
Unless sooner terminated in accordance with this Agreement, the term of this
Agreement and all rights granted by Airsopure under this Agreement shall expire
on the date on which You successfully and in a timely manner have exercised all
of the development rights and completed the development obligations under this
Agreement in accordance with the Development Schedule (including, if applicable,
Section 3.B.2.)
5. YOUR DUTIES
You make the following representations, warranties and covenants and accepts the
following obligations:
A. You shall comply with all terms and conditions set forth in this Agreement.
B. 1. If You are a corporation or a partnership, You represent, warrant and
covenant that:
a. You are duly organized and validly existing under the state law
of its formation;
b. You are duly qualified and are authorized to do business in each
jurisdiction in which Your business activities or the nature of the properties
owned by You require such qualification;
c. Your corporate chart or written partnership agreement shall at all
times provide that Your activities include the development and operation of
Airsopure Centers;
d. The execution of this Agreement and the performance of the
transactions contemplated hereby are within Your corporate power if You are a
corporation or if You are a partnership, permitted under Your written
partnership agreement and have been duly authorized by You;
e. If You are a corporation, copies of Your articles of
incorporation, bylaws, other governing documents, any amendments thereto,
resolutions of the Board of Directors authorizing entry into and performance of
this Agreement, and any certificates or other documents as may be reasonably
required by Airsopure shall be furnished to Airsopure prior to the execution of
this Agreement; or, if You are a partnership, copies of Your written partnership
agreement, other governing documents and any amendments thereto shall be
furnished to Airsopure prior to the execution of this Agreement, including
evidence of consent or approval of the entry into and performance of this
Agreement by the requisite number or percentage of partners, if such approval or
consent is required by Your written partnership agreement;
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f. If You are a corporation or partnership, the ownership interests
are accurately and completely described in Attachment C. Further, if You are a
corporation, You shall maintain at all times a current list of all owners of
record and all beneficial owners of any class of voting securities or, if You
are a partnership, You shall maintain at all times a current list of all owners
of an interest in the partnership. You shall make Your list of owners available
to Airsopure upon request;
g. If any of Your officers or directors cease to serve as such or any
individual is elected as an officer or director after the execution of this
Agreement, You shall notify Airsopure within 5 days after any such change and
any newly elected officer or director shall execute this Agreement as one of
Your Principals (as defined in Section 10.3.E.) and shall be individually bound
by all obligations of Your Principals under this Agreement;
h. If You are a corporation, You shall maintain stop-transfer
instructions against the transfer on its records of any of its equity securities
and each stock certificate representing stock of the corporation shall have
conspicuously endorsed upon it a statement in a form satisfactory to Airsopure
that it is held subject to all restrictions imposed upon assignments by this
Agreement; provided, however, that the requirements of this Section 5.B.1.h.
shall not apply to the transfer of equity securities of a publicly-held
corporation (as defined in Section 7.B.). If You are a partnership, Your written
partnership agreement shall provide that ownership of an interest in the
partnership is held subject to all restrictions imposed upon assignments by this
Agreement;
i. You and, at Airsopure's request, each of Your Principals have
provided Airsopure with their most recent financial statements. Such financial
statements present fairly the financial position of You and each of Your
Principals, as applicable, at the dates indicated therein and with respect to
You, the results of Your operations and Your cash flow for the years then ended.
You agree that You shall maintain at all times, during the term of this
Agreement, sufficient working capital to fulfill Your obligations under this
Agreement. Each of the financial statements mentioned above has been prepared in
conformity with Generally Accepted Accounting Principles applicable to the
respective periods involved and, except as expressly described in the applicable
notes, applied on a consistent basis. No material liabilities, adverse claims,
commitments of obligations of any nature exist as of the date of this Agreement,
whether accrued, unliquidated, absolute, contingent or otherwise, which are not
reflected as liabilities on the financial statements of You or such Principals.
j. You and Your Principals acknowledge and agree that the
representations, warranties and covenants set forth above in Section 5.B.(1) are
continuing obligations of You and that any failure to comply with such
representations, warranties and covenants shall constitute a material event of
default under this Agreement You will cooperate with Airsopure in any efforts
made by Airsopure to verify compliance with such representations, warranties and
covenants.
5.B.2. Upon the execution of this Agreement, You shall designate and
retain an individual to serve as the Operating Principal for You (the "Operating
Principal"). The Operating Principal shall, during the entire period he serves
as such, meet the following qualifications:
a. If You are an individual, You shall perform all obligations of the
Operating Principal.
b. If You are a corporation, the Operating Principal shall, at all
times during which he serves as Operating Principal, (i) directly or indirectly
beneficially own at least fifty-one percent (51%) of the shares of each class of
Your issued and outstanding capital stock and (ii) be entitled, under its
governing documents and under any agreements among the shareholders, to cast a
sufficient number of votes to require such corporation to take or omit to take
any action which such corporation is required to take or omit to take under this
Agreement.
c. If You are a partnership, the Operating Principal shall, at all
times during which he serves as Operating Principal (i) own at least a
twenty-five percent (25%) interest in the operating profits and operating losses
of the partnership as well as a twenty-five percent (25%) ownership interest in
the partnership (and a fifty-one percent (51%) ownership interest in any class
of shares of any corporate general partner) and (ii) be entitled under Your
partnership agreement or applicable law to act on behalf of the partnership
without the approval or consent of any other partner or be able to cast a
sufficient number of
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votes to require the partnership to take or omit to take any action which the
partnership is required to take or omit to take under its last Agreement.
d. Except as may otherwise be provided in this Agreement, the
Operating Principal's interest in You shall be and shall remain free of any
pledge, mortgage, hypothecation, lien, charge, encumbrance, voting agreement,
proxy, security interest or purchase right or options.
e. The Operating Principal shall devote full time and best efforts to
the supervision and performance of the responsibilities and duties under this
Agreement, shall execute this Agreement as one of Your Principals and shall be
individually, jointly and severally bound by all obligations of You, the
Operating Principal and Your Principals hereunder.
f. The Operating Principal shall continuously meet Airsopure
standards and criteria for such individuals, as set forth in the Manuals (as
defined in the Franchise Agreement) or otherwise in writing by Airsopure.
g. The Operating Principal shall satisfy the training requirements
set forth in the Franchise Agreement. If, during the term of this Agreement, the
Operating Principal is not able to continue to serve in such capacity or no
longer qualifies to act as such in accordance with this Section 5.B.2. You shall
promptly notify Airsopure and designate a replacement within thirty (30) days
after the Operating Principal ceases to serve, such replacement being subject to
the same qualifications listed above. You shall provide for interim management
of the development activities under this Agreement until such replacement is so
designated, such interim management to be conducted in accordance with this
Agreement. Any failure to comply with the requirements of this Section 5.(2)
shall be deemed a material event of default under this Agreement.
5.B.3. If the You execute a Development Agreement for three (3) or more
Centers, notwithstanding anything contained herein which may be to the contrary,
the Operating Principal may be:
a. a partnership in which the You directly own at least fifty-one
percent (51%) of the ownership and voting interests therein and are entitled
under Your partnership agreement or applicable law to act on behalf of the
partnership without the necessity of any approval or consent from the other
partners to require the corporation to take or omit to take under the terms of
this Agreement; or
b. a corporation in which You directly own at least fifty-one percent
(51%) of the ownership and voting interests therein and are entitled under its
governing documents and any agreements among its shareholders, to cast a
sufficient number of votes by unanimous written consent without the necessity of
any meeting to require such corporation to take or omit to take any action which
the corporation is required to take or omit to take under the terms of this
Agreement.
4. You understand that all developers and franchisees operating under the
System must comply with Airsopure training, development and operational
requirements as an essential and material element of the System and that
Airsopure and developers and franchisees operating under the System consequently
expend substantial time, effort and expense in training management personnel for
the development and operation of their respective Airsopure Centers.
Accordingly, You agree that if during the term of this Agreement, You shall
designate as Your Operating Principal any individual who is at the time or was
at any time during the prior 6 months employed in a managerial position by
Airsopure or any of its subsidiaries or affiliates, including but not limited
to, individuals employed by Airsopure to work in its Airsopure Centers, or by
any other developer or franchisee operating under the System, such former
employer shall be entitled to be compensated for the reasonable costs and
expenses, of whatever nature or kind, incurred by such employer related to
training such employee. The Parties agree that such expenditures may be
uncertain and difficult to ascertain and, therefore, agree that the compensation
specified herein reasonably represents such expenditures and is not a penalty.
An amount equal to the annual compensation of such employee at the time of the
termination of his employment with the former employer shall be paid by You
prior to such employee assuming the position of Operating Principal. In seeking
any individual to serve as its Operating Principal, You shall not discriminate
in any manner whatsoever against any individual, to whom the provisions of this
Section 5.(3) apply, on the basis of the compensation required to be paid by You
hereunder if You designate or employ such individual. The Parties expressly
acknowledge
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and agree that no current or former employee of Airsopure, its' subsidiaries or
affiliates or any developer or franchisee under the System shall be a third
party beneficiary of this Agreement or any provision hereof, except for the
covenant of You in the preceding sentence. Airsopure expressly disclaims any
representations and warranties regarding the performance of any employee or
former employee of Airsopure its subsidiaries or affiliates or any developer or
Franchisee operating under the System, who is designated as Operating Principal
or employed by You in any capacity and Airsopure shall not be liable for any
losses, of whatever nature or kind, incurred by You in connection therewith.
5. You and each of Your Principals shall not, during the term of this
Agreement and thereafter, communicate or divulge to, or use for the benefit of,
another person, persons, partnership, association or corporation any
confidential information, knowledge or know-how concerning the methods of
development and operation of the Centers and/or products which may be
communicated to You or any of Your Principals or of which they may be apprised
under this Agreement. You and each of Your Principals shall disclose such
confidential information only to Your Principals and Your personnel who must
have access to it in connection with their employment with You. Any and all
information, knowledge, know-how, techniques and any materials used in or
related to the System which Airsopure communicates to You or Your Principals
shall be deemed confidential for the purposes of this Agreement. Neither You nor
Your Principals shall at any time, without Airsopure prior written consent,
copy, duplicate, record or otherwise reproduce such materials or information, in
whole or in part, nor otherwise make the same available to any unauthorized
person. The covenant in this Section 5.B.5. shall survive the expiration,
termination or transfer of this Agreement or any interest herein and shall be
perpetually binding upon You and each of Your Principals.
a. At Airsopure request, You shall require Your Operating Principal
and any personnel of You and any holder of a beneficial interest of less than
one percent (1%) of any class of the securities of You and any corporation
directly or indirectly controlling You, if You are a corporation (or of any
corporate general partner and any corporation direct or indirectly controlling a
general partner of You, or from any limited partner, if You are a partnership),
having access to any confidential information of Airsopure to execute covenants
that they will maintain the confidentiality of the information they receive in
connection with their relationship with You. Such covenants shall be
substantially in the form set forth in Attachment B.
b. You and Your Principals acknowledge that any failure to comply
with the requirements of this Section 5.B.(4) shall constitute a material event
of default under this Agreement and will cause Airsopure irreparable injury.
Therefore, You and Your Principals agree to pay all court costs and reasonable
legal fees included by Airsopure in obtaining specific performance, injunctive
relief or any other remedy available to Airsopure in this Agreement or by law
for any violation of the requirements of such section.
6. You shall timely comply with all requirements of federal, state and
local laws, rules and regulations.
6. DEFAULT, TRANSFER AND TERMINATION
A. You shall be deemed to be materially in default under this Agreement and all
rights granted herein shall automatically terminate without notice to You (1) if
You become insolvent or make a general assignment for the benefit of creditors
or file a voluntary petition under any section or chapter of federal bankruptcy
laws or under any similar law or statute of the United States or any state or
admit in writing Your inability to pay Your debts when due; or (2) if You are
adjudicated bankrupt or insolvent in proceedings filed against You under any
section or chapter of federal bankruptcy law or any similar law or statute of
the United States or any state, without further possibility of appeal or review;
or (3) if a xxxx in equity or other proceeding for the appointment of a receiver
of You or other custodian for Your business or assets is filed and consented to
by You, or if a receiver or other custodian permanent or temporarily of Your
assets or property, or any part thereof, is appointed by any court of competent
jurisdiction; or (4) if proceedings for a composition with creditors under any
state or federal law are instituted by or against You; or (5) if a final
judgment against You remains unsatisfied or of record for thirty (30) days or
longer (unless a supersedeas bond is filed); or (6) if You are dissolved; or (7)
if execution is levied against Your business or property; or (8) if suit to
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foreclose any lien or mortgage against the premises or equipment of such
business operated hereunder or under any Franchise Agreement is instituted and
not dismissed within thirty (30) days; or (9) if the real or personal property
of any business operated hereunder or under any Franchise Agreement shall be
sold after levy by any sheriff, marshal or constable.
B. You shall be deemed to be materially in default and Airsopure may, at its
option, terminate this Agreement and all rights granted hereunder, without
affording You any opportunity to cure the default except as provided below,
effective immediately upon written notice to You, upon the occurrence of any of
the following events of default:
1. If You fail to comply with the Development Schedule, or if You fail to
develop a replacement Center within any time period agreed upon by the Parties
under Section 3.;
2. If You or any of Your Principals is convicted of, or shall have entered
a plea of nolo contendere to, a felony, a crime involving moral turpitude or any
other crime or offense that Airsopure believes is reasonably likely to have an
adverse effect on the System, the Proprietary Marks, the goodwill associated
therewith or Airsopure interest therein;
3. If a threat or danger to public health or safety results from the
construction, maintenance or operation of any Center developed under this
Agreement;
4. If You fail to designate a qualified replacement Operating Principal
within 30 days after any initial or successor Operating Principal ceases to
serve as such, all as required under Section 5.B.;
5. If You or any of Your Principals breach or fail to perform any of the
representations, warranties and covenants in Section 5.B.1.;
6. If a transfer or an attempt to transfer any rights or obligations under
this Agreement or any interest in You to any third party is made without
Airsopure prior written consent or without offering Airsopure a right of first
refusal with respect to such transfer, contrary to the terms of Section 7;
7. If You or any of Your Principals fail to comply with the covenants in
Section 5.B.4. or 8.B. or if You fail to obtain the execution of the covenants
required under Section 5.B.5. or 8.H. within thirty (30) days following
Airsopure request that You obtain the execution of such covenants;
8. If an approved transfer upon death or permanent disability is not
effected within the time period and in the manner prescribed by Section 7.E.;
9. If You misuse or make any unauthorized use of the Proprietary Marks or
otherwise materially impair the goodwill associated therewith or with the System
or Airsopure rights therein and do not cure such default within twenty-four (24)
hours following notice from Airsopure;
10. If You fail, refuse or neglect promptly to pay when due any monetary
obligation owing to Airsopure or its subsidiaries or affiliates under this
Agreement, any Franchise Agreement or any other agreement between You and
Airsopure or its subsidiaries or affiliates, and do not cure such default within
five (5) days following notice from Airsopure; and
11. If You repeatedly commit a material event of default under this
Agreement, whether or not such defaults have been cured by You after notice by
Airsopure
C. Except as provided above in Section 6.B., if You fail to comply with any
other term or condition imposed by this Agreement, any Franchise Agreement or
any other development or franchise agreement between You and Airsopure, as such
may from time to time be amended, Airsopure may terminate this Agreement only by
giving written notice of termination stating the nature of such default to You
at least 30 days prior to the effective date of termination; provided, however,
that You may avoid termination by immediately initiating a remedy to cure such
default and curing it to Airsopure satisfaction within the 30 day period and by
promptly providing proof thereof to Airsopure. If any such default is not cured
within the specified time, or such longer period as applicable law may require,
this Agreement shall, subject to Section 6.D., terminate without further notice
to You effective immediately upon the expiration of the thirty (30) day period
or such longer period as applicable law may require.
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D. Upon default by You under Section 6.B. or C., Airsopure has the option, in
its sole discretion, in addition to exercising its option to terminate this
Agreement as provided in Sections 6.B. and C., to do any one or more of the
following:
1. terminate or modify any territorial rights granted to You in Section
1.B.;
2. reduce the area of such territorial rights;
3. reduce the number of Centers which You may establish pursuant to
Sections 1 and B.(1); or
4. accelerate the Development Schedule.
E. 1. Upon the termination or expiration of this Agreement, You shall have no
right to establish or operate any Center for which a Franchise Agreement has not
been executed by Airsopure and delivered to You at the time of termination or
expiration.
2. If Airsopure elects to terminate the territorial rights granted to You
in Section 1.B., modify such territorial rights or reduce the area of
territorial rights as provided in Section 6.D. above, You shall continue to
develop Centers in accordance with the Development Schedule, to the extent that
the number of Centers You are required to develop is reduced by Airsopure
pursuant to Section 6.D.(3).
3. If Airsopure exercises any of its rights in Section 6.D., or if this
Agreement otherwise expires or terminates, Airsopure shall be entitled to
establish, and to cause others to establish, Centers, or conduct any other
activity, in the Development Territory or in the portion thereof no longer a
part of the Territory or pursuant to any other modification of Your territorial
rights, except as may be otherwise provided under any Franchise Agreement which
is then in effect between Airsopure and You.
F. Airsopure exercise of any of its options under Section 6.D. shall not, in the
event of a default, constitute a waiver by Airsopure to exercise its option to
terminate this Agreement at any time with respect to a subsequent event of
default of a similar or different nature.
G. No default under this Agreement shall constitute a default under any
Franchise Agreement between the Parties hereto, unless the default is also a
default under the terms of such Franchise Agreement.
H. No right or remedy herein conferred upon or reserved to Airsopure is
exclusive of any other right or remedy provided or permitted by law or in
equity.
1. Upon termination or expiration of this Agreement, You and Your
Principals shall comply with the restrictions on confidential information
contained in Section 5.B.(4) and the covenants against competition contained
in Section 8.B.(2). Any other person required to execute similar covenants
pursuant to Section 5.B.(4)(a) or 8.H. shall also comply with such covenants.
7. TRANSFER OF INTEREST
A. Transfer by Airsopure
Airsopure shall have the right to transfer or assign this Agreement and all or
any part of its rights or obligations herein to any person or legal entity
without Your consent. Specifically, and without limitation to the foregoing, You
expressly affirm and agree that Airsopure may sell its assets, the Proprietary
Marks or the System to a third party; may merge, acquire other corporations, or
be acquired by another corporation; may undertake a refinancing
recapitalization, leveraged buy out or other economic or financial
restructuring, and, with regard to any or all of the above sales, assignments
and dispositions, You expressly and specifically waive any claim, demand or
damage arising from or related to the loss of the right to develop Centers under
the System against Airsopure under this Agreement. Nothing contained in this
Agreement shall require Airsopure to remain in the business of operating or
licensing the operation of Airsopure Centers or to offer any services or
products, whether or not bearing the Proprietary Marks, to Franchisee, if
Airsopure exercises its rights hereunder to assign its rights in this Agreement.
B. Transfer by You
1. You and Your Principals understand and acknowledge that the rights and
duties set forth in this Agreement are personal to You and that Airsopure has
granted such rights in reliance on the business skill, financial capacity and
personal character of You and Your Principals. Accordingly, neither You nor any
successor or assign to any part of Your interest in this Agreement, nor any
individual, partnership, corporation or other entity which directly or
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indirectly has or owns any interest in this Agreement or in You shall sell,
assign, transfer, convey, give away, pledge, mortgage or otherwise dispose of or
encumber any direct or indirect interest in this Agreement or in You without the
prior written consent of Airsopure; provided, however, that Airsopure prior
written consent shall not be required for a transfer of less than a one percent
(1%) interest in a publicly-held corporation. A publicly-held corporation is a
corporation whose securities are registered pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, or a corporation subject to the
requirements of Section 15(d) of the Securities Exchange Act of 1934, as
amended. Any purported assignment or transfer, by operation of law or otherwise,
not having the written consent of Airsopure required by this Section 7. shall be
null and void and shall constitute a material event of default under this
Agreement.
2. Airsopure shall not unreasonably withhold its consent to a transfer of
any interest in You or in this Agreement. Airsopure may, however, in its sole
discretion, require some or all of the following as conditions of its approval
to any such transfer:
a. All of Your accrued monetary and other outstanding obligations to
Airsopure and its subsidiaries and affiliates arising under this Agreement or
any franchise agreement or other agreement between You and Airsopure or its
subsidiaries or affiliates shall have been satisfied in a timely manner, and You
shall have satisfied all trade accounts and other debts, of whatever nature or
kind, in a timely manner;
b. You are not in default of any provision of this Agreement or any
franchise agreement or any other agreement between You and Airsopure or its
subsidiaries or affiliates;
c. The transferor and its principals, as applicable, shall have
executed a general release, in a form prescribed by Airsopure, of any and all
claims of transferor, of whatever nature or kind, against Airsopure and its
subsidiaries and affiliates and their respective officers, directors,
shareholders, partners, employees, servants, representatives and agents, in
their corporate and individual capacities, including, without limitation, claims
arising under this Agreement, any franchise agreement and any other agreement
between You and Airsopure or its subsidiaries or affiliates and federal, state
and local laws, rules and ordinances;
d. The transferee shall enter into a written agreement, in a form
prescribed by Airsopure, assuming full, unconditional joint and several
liability for and agreeing to perform from the date of the transfer, all
obligations, covenants and agreements of You in this Agreement; and, if
transferee is a corporation or a partnership, transferee's shareholders,
partners or other investors, as applicable, shall also execute such agreement as
principals of the transferee, including a guaranty of Your obligations contained
in such agreements;
e. The transferee shall demonstrate to Airsopure satisfaction that
transferee meets the criteria considered by Airsopure when reviewing a
prospective developer's application for development rights, including Airsopure
educational, managerial and business standards, transferee's good moral
character, business reputation and credit rating, transferee's aptitude and
ability to conduct the business contemplated hereunder (as may be evidenced by
prior related business experience or otherwise), transferee's financial
resources and capital, and the geographic proximity of other territories with
respect to which transferee has been granted development rights or of other
Airsopure Centers operated by transferee, if any;
f. The transferee shall execute the standard form development
agreement then being offered to new System developers or a revised form of this
Agreement, as Airsopure deems appropriate, and such other ancillary agreements
as Airsopure may require, which agreements shall supersede this Agreement and
its ancillary documents in all respects and the terms of which agreements may
differ from the terms of this Agreement, and if the transferee is a corporation
or partnership, transferee's shareholders, partners or other investors, as
applicable, shall also execute such agreements as principals of the transferee,
including a guaranty of Franchisee's obligations contained in this Agreement;
g. You shall pay a transfer fee of $1,000.00 or such greater amount
as is necessary to reimburse Airsopure for its reasonable costs and expenses
associated with reviewing the application to transfer, including, without
limitation, legal and accounting fees;
9
h. If transferee is a corporation or a partnership, transferee shall
make and will be bound by any or all of the representations, warranties and
covenants in Section 5.B.(1) as Airsopure requests. Transferee shall provide to
Airsopure evidence satisfactory to Airsopure that the terms of Section 5.B.(1)
have been satisfied and are true and correct on the date of transfer. The
transferor shall remain liable for all of the obligations to Airsopure in
connection with this Agreement incurred prior to, the effective date of the
transfer and shall execute any and all instruments reasonably requested by
Airsopure to evidence such liability.
3. You acknowledge and agree that each condition which must be met by the
transferee is reasonable and necessary to ensure the transferee's full
performance of the obligations hereunder.
C. Transfer for Convenience of Ownership
In the event the proposed transfer is to a corporation formed solely for the
convenience of ownership, Airsopure consent may be conditioned upon any of the
requirements in Section 7.B.(2), except that the requirements in Sections
7.B.(2)(c),(e),(f) and (g) shall not apply. You shall be the owner of all the
voting stock or interest of the corporation and if You are more than one
individual, each individual shall have the same proportionate ownership interest
in the corporation as he had in You prior to the transfer.
D. Right of First Refusal
1. Any Party holding any interest (including any interest acquired
pursuant to Section 7.E.) in You or in this Agreement and who desires to accept
any bona fide offer from a third party to purchase such interest shall promptly
notify Airsopure in writing of each such offer and shall provide such
information and documents relating to the offer as Airsopure may require.
Airsopure shall have the right and option, exercisable within 15 days after
receipt of such written notification, to send written notice to the transferor
that Airsopure intends to purchase the transferor's interest on the same terms
and conditions offered by the third party. If Airsopure elects to purchase the
transferor's interest, closing on such purchase must occur within 30 days from
the date of notice to the transferor of the election to purchase by Airsopure,
or such other date as may be agreed upon. Any material change in the terms of
any offer prior to closing shall constitute a new offer subject to the same
rights of first refusal by Airsopure as in the case of an initial offer. Failure
of Airsopure to exercise the option afforded by this Section 7.D. shall not
constitute a waiver of any other provision of this Agreement, including all
provisions relating to a proposed transfer.
2. If the offer from a third party provides for payment of consideration
other than cash or invoices certain intangible benefits, Airsopure may elect to
purchase the interest proposed to be sold for the reasonable equivalent in cash.
If the Parties cannot agree within a reasonable time on such amount, an
independent appraiser shall be designated by Airsopure to determine such amount
and the appraiser's determination shall be final and binding.
3. If Airsopure elects to exercise the option described in this Section
7.D., it shall have the right to set off the cost of the appraisal described in
Section 7.D.(2) above, if any against any payment made hereunder.
4. Failure to comply with the provisions of this Section 7.D. prior to the
transfer of any interest in You or in this Agreement shall constitute a material
event of default under this Agreement.
E. Transfer Upon Death or Permanent Disability
1. Upon the death of any person with an interest in this Agreement or in
You (the "Deceased"), the executor, administrator or other personal
representative of the Deceased shall transfer such interest to a third party
approved by Airsopure within 6 months after the death. If no personal
representative is designated or appointed or no probate proceedings are
instituted with respect to the estate of the Deceased, then the distributee of
such interest must be approved by Airsopure. If the distributee is not approved
by Airsopure, then the distributee shall transfer such interest to a third party
approved by Airsopure within 6 months after the death of the Deceased.
2. Upon the permanent disability of any person with an interest in this
Agreement or in You, Airsopure may, in its sole discretion, require such
interest to be transferred to a third party approved by Airsopure within 6
months after notice to You. "Permanent disability" shall mean any physical,
emotional or mental injury, illness or incapacity which would prevent a person
from performing the obligations set forth in this Agreement for at least 90
consecutive days and
10
from which condition recovery within 90 days on the date of determination of
disability is unlikely. Permanent disability shall be determined upon
examination of the person by a licensed practicing physician selected by
Airsopure; or if the person refuses to submit to an examination, then such
person shall be automatically deemed permanently disabled as of the date of such
refusal for the purpose of this Section 7.E. The costs of any examination
required by this section shall be paid by Airsopure.
3. Upon the death or claim of permanent disability of any person with an
interest in this Agreement or in You, You or a representative of You must
promptly notify Airsopure of such death or claim of permanent disability. Any
transfer upon death or permanent disability shall be subject to the same terms
and conditions described in this Section 7. If any interest is transferred upon
death or permanent disability without written notification to Airsopure, You
shall be in material default under this Agreement.
F. Non-Waiver of Claims
Airsopure consent to a transfer of any interest in You or in this Agreement
shall not constitute a waiver of any claims it may have against the transferor,
nor shall it be deemed a waiver of Airsopure right to demand exact compliance
with any of the terms of this Agreement by the transferee.
G. Offerings by You
Securities of or partnership interests in You may be offered to the public, by
private offering or otherwise, only with the prior written consent of Airsopure
(whether or not Airsopure consent is required under Section 7.B.), which consent
shall not be unreasonably withheld. All materials required for such offering by
federal or state law shall be submitted to Airsopure for a limited review as
discussed below prior to their being filed with any government agency, and any
materials to be used in any exempt offering shall be submitted to Airsopure for
such review prior to their use. No offering by You shall imply by use of the
Proprietary Marks or otherwise) that Airsopure is participating in an
underwriting, issuance or offering of Your or Airsopure securities or the
securities of any subsidiary or affiliate of Airsopure; and Airsopure review of
any offering materials shall be limited solely to the subject of the
relationship between You and Airsopure and its subsidiaries and affiliates.
Airsopure may, at its option, require Your offering materials to contain a
written statement prescribed by Airsopure concerning the limitations described
in the preceding sentence. You and the other participants in the offering must
fully indemnify Airsopure in connection with the offering. For each proposed
offering, You shall pay to Airsopure a non-refundable fee of $2,000.00, or such
other amount as is necessary to reimburse Airsopure for its reasonable costs and
expenses associated with reviewing the proposed offering materials, including,
without limitation, legal and accounting fees. You shall give Airsopure written
notice at least 30 days prior to any offering or other transaction covered by
this Section 7.G.
8. COVENANTS
A. You covenant that during the term of this Agreement, except as otherwise
approved in writing by Airsopure, You and the Operating Principal shall devote
full time, every and best efforts to the management and operation of the
development activities contemplated under this Agreement.
B. You and Your Principals specifically acknowledge that, pursuant to this
Agreement, You and Your Principals will receive valuable specialized training
trade secrets and confidential information, which are beyond the present skills
and experience of You and Your Principals and Your managers and employees and
that You have the right and the obligation, arising from this Agreement, to
develop the Territory for the benefit of the System. You and Your Principals
acknowledge that such specialized training, trade secrets and confidential
information provide a competitive advantage and will be valuable to them in the
development of the Centers and that access to such specialized training, trade
secrets and confidential information is, therefore, a primary reason for
entering into this Agreement. In consideration for such specialized training,
trade secrets, confidential information and exclusive rights, You and Your
Principals covenant as follows:
1. With respect to You, during the term of this Agreement, or with respect
to each of Your Principals, during the term of this Agreement for so long as
such individual or entity satisfies the definition of "Your Principals" in
Section 13.E., except as otherwise approved in writing by Airsopure, neither You
nor any of Your Principals shall, either directly or indirectly, for themselves,
11
or through, on behalf of or in conjunction with any person(s), partnership or
corporation:
a. Divert or attempt to divert any business or customer of any
Airsopure Center to any competitor, by direct or indirect inducement or
otherwise, or do or perform, directly or indirectly, any other act injurious or
prejudicial to the goodwill associated with Airsopure Proprietary Marks and the
System; or
b. Own, maintain, operate, engage in or have any financial or
beneficial interest in (including interest in corporations, partnerships,
trusts, unincorporated associations or joint ventures), advise, assist or make
loans to, any business which is the same as or similar to Airsopure Centers
including but not limited to, any business which offers air purification
equipment, products and services.
2. With respect to You, for a continuous uninterrupted period commencing
upon the expiration or termination of, or transfer of all of Your interest in,
this Agreement, or with respect to each of Your Principals, for a continuous
uninterrupted period commencing upon the earlier of: (i) the expiration,
termination or transfer of all of Your interest in this Agreement or (ii) the
time such individual or entity ceases to satisfy the definition of "Your
Principals" in Section 13.E., and for two (2) years thereafter, except as
otherwise approved in writing by Airsopure, neither You nor any of Your
Principals shall, either directly or indirectly, for themselves or through, on
behalf of or in conjunction with any person(s), partnership or corporation:
a. divert or attempt to divert any business or customer of any
Airsopure Center to any competitor, by direct or indirect inducement or
otherwise, or do or perform, directly or indirectly, any other act injurious or
prejudicial to the goodwill associated with Airsopure Proprietary Marks and the
System;
b. employ or seek to employ any person who is at that time employed
by Airsopure or by any other developer or franchisee of Airsopure, or otherwise
direct or indirectly induce such person to leave that person's employment;
provided, however, that You may employ such person in a managerial position with
respect to Your operation of a Airsopure Center pursuant to the terms of the
Franchise Agreement applicable to such Airsopure Center; or
c. own, maintain, operate, engage in or have any financial or
beneficial interest in (including; interest in corporations, partnerships,
trusts, unincorporated associations or joint ventures), advise, assist or make
loans to, any business which is the same as or similar to Airsopure Centers
including but not limited to, any business which offers air purification
systems, which business is, or is intended to be, located within the Territory
or within a 25 mile radius of any Airsopure Center in existence or under
construction as of: (i) the expiration or termination of, or the transfer of all
of Your interest in, this Agreement; or (ii) the time Your Principal ceases to
satisfy the definition of Your Principal, as applicable.
C. Section 8.B.(1)(b) and 2(c) shall not apply to ownership of less than one
percent (1%) beneficial interest in the outstanding equity securities of any
publicly-held corporation.
D. The Parties agree that each of the above covenants shall be construed as
independent of any other covenant: or provision of this Agreement. If all or any
portion of a covenant in this Section 8. is held unreasonable or unenforceable
by a court or agency having valid jurisdiction in an unappealed final decision
to which Airsopure is a Party, You and Your Principals expressly agree to be
bound by any lesser covenants subsumed within the terms of such covenant that
imposes the maximum duty permitted bylaw, as if the resulting covenant were
separately stated in and made a part of this section.
E. You and Your Principals understand and acknowledge that Airsopure shall have
the right, in its sole discretion, to reduce the scope of any covenant set forth
in Section 8.B., or any portion thereon, without their consent, effective
immediately upon notice to You; and You and Your Principals agree that they
shall immediately comply with any covenant as so modified, which shall be fully
enforceable notwithstanding the provisions of Section 14.A.
F. You and Your Principals expressly agree that the existence of any claims they
may have against Airsopure, whether or not arising from this Agreement, shall
not constitute a defense to the enforcement by Airsopure of the covenants in
this Section 8. You and Your Principals agree to pay all costs and expenses
(including reasonable legal
12
fees) incurred by Airsopure in connection with the enforcement of this section.
G. Failure to comply with the requirements of this Section 8. shall constitute a
material event of default under this Agreement. You and Your Principals
acknowledge that a violation of this section would result in irreparable injury
to Airsopure for which no adequate remedy at law may be available, and You and
Your Principals accordingly consent to the issuance of an injunction prohibiting
any conduct by You or Your Principals in violation of the terms of this section.
H. At Airsopure request, You shall require and obtain the execution of covenants
similar to those set forth in this Section 8. (including covenants applicable
upon the termination of a person's employment with You) from any personnel of
You and any holder of a beneficial interest of less than one percent (1%) of the
securities of You and any corporation directly or indirectly controlling You, if
You are a corporation (or of any corporate general partner and any corporation
directly or indirectly controlling a general partner of You, if You are a
partnership), who has received or will receive confidential information or
training from Airsopure. These covenants shall be substantially in the form
contained in Attachment B. Failure by You to obtain the execution of these
covenants shall constitute a material event of default under this Agreement.
9. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
A. The Parties acknowledge and agree that this Agreement does not create a
fiduciary relationship between them, that You shall be an independent contractor
and that nothing in this Agreement is intended to constitute either Party an
agent, legal representative, subsidiary, joint venturer, partner, employee,
joint employer or servant of the other for any purpose.
B. During the term of this Agreement, You shall hold Yourself out to the public
as an independent contractor conducting its development operations pursuant to
development rights granted by Airsopure. You agree to take such action as shall
be necessary to that end, including, without limitation, exhibiting a notice of
that fact in a conspicuous place in any office established for the purposes
hereunder, the content and form of which Airsopure reserves the right to specify
in writing.
C. You understand and agree that nothing in this Agreement authorizes You or any
of Your Principals to make any conduct, agreement, warranty or representation on
Airsopure behalf, or to incur any debt or other obligation in Airsopure name and
that Airsopure shall in no event assume liability for, or be deemed liable under
this Agreement as a result of, any such action, or for any act or omission of
You or any of Your Principals or any claim or judgment arising therefrom.
D. 1. You and each of Your Principals shall, at all times, indemnify and hold
harmless to the fullest extent permitted by law Airsopure, its subsidiaries,
affiliates, successors and assign as and their respective directors, officers,
shareholders, partners, servants, employees, agents and representatives from all
"losses and expenses" (as defined in Section 9.D.(4)(b) below) incurred in
connection with any action, suit, proceeding claim, demand, investigation or
inquiry (formal or informal), or any settlement thereof (whether or not a formal
proceeding or action has been instituted) which arises out of or is based upon
any of the following:
a. The infringement, alleged infringement, or any other violation, or
alleged violation by You or any of Your Principals of any patent, xxxx,
copyright or other proprietary right owned or controlled by third parties
(except as such may occur with respect to any rights in the Proprietary Marks or
copyrights granted to You under a Franchise Agreement);
b. The violation, breach or asserted violation or breach by You or
any of Your Principals of any federal, state or local law, regulation, ruling
standard or directive, or any industry standard;
c. Libel, slander or any other form of defamation of Airsopure or the
System, by You or by any of Your Principals;
d. The violation or breach by You or by any of Your Principals of any
warranty, representation, agreement or obligation in this Agreement or in any
Franchise Agreement or other agreement between You and Airsopure or its
subsidiaries or affiliates; and
e. Acts, errors or omissions of You, any of Your subsidiaries or
affiliates and any of Your Principals and the officers, directors,
13
shareholders, partners, agents, independent contractors, servants, employees and
representatives of You and its subsidiaries and affiliates in connection with
the performance of the development activities contemplated under this Agreement
or the establishment and operation of any Airsopure Center pursuant to a
Franchise Agreement.
2. You and each of Your Principals agree to give Airsopure immediate
notice of any such action, suit, proceeding, claim, demand, inquiry or
investigation. At the expense and risk of You and each of Your Principals,
Airsopure may elect to control (but under no circumstance is obligated to
undertake), and associate counsel of its own choosing with respect to, the
defense and/or settlement of any such action, suit, proceeding, claim, demand,
inquiry or investigation. Such an undertaking by Airsopure shall, in no manner
or form, diminish the obligation of You and each of Your Principals to indemnify
Airsopure and to hold it harmless.
3. In order to protect persons or property or its reputation or goodwill,
or the reputation or goodwill of others, Airsopure may, at any time and without
notice, as it, in its judgment deems appropriate, consent or agree to
settlements or take such other remedial or corrective action as it deems
expedient with respond to the action, suit, proceeding, claim, demand, inquiry
or investigation if, in Airsopure sole judgment, there are reasonable grounds to
believe that:
a. any of the acts or circumstances enumerated in Section 9D.(1)
above has occurred; or
b. any act, error or omission as described in Section 9.D.(1)(e) may
result directly or indirectly in damage, injury or harm to any person or any
property.
4. a. All losses and expenses incurred under this Section 9 shall be
chargeable to and paid by You or any of Your Principals pursuant to its
obligations of indemnity under this section, regardless of any action, activity
or defense undertaken by Airsopure or the subsequent success or failure of such
action, activity or defense.
b. As used in this Section 9, the phrase "losses and expenses" shall
include, without limitation, all losses, compensatory, exemplary or punitive
damages, fines, charges, costs, expenses, lost profits, legal fees, court costs,
settlement amounts, judgments, compensation for damages to Airsopure reputation
and goodwill, costs of or resulting from delays, financing, costs of advertising
material and media time/space and costs of changing, substituting or replacing
the same, and any and all expenses of recall, refunds, compensation, public
notices and other such amounts incurred in connection with the matters
described.
5. The persons indemnified pursuant to this Section 9 do not assume any
liability for acts, errors or omissions of those with whom You, any of Your
Principals or Your subsidiaries and affiliates may contract, regardless of the
purpose, You and each of Your Principals shall hold harmless and indemnify the
persons indemnified pursuant to this section for all losses and expenses which
may arise out of any acts, errors or omissions of You, Your Principals, Your
subsidiaries and affiliates, the occurs, directors, shareholders, partners,
agents, servants, employees and representatives of You and its subsidiaries and
affiliates, and any such third parties without limitation and without regard to
the cause or causes thereof or the negligence of Airsopure or any other Party or
Parties arising in connection therewith, and whether such negligence be sole,
joint or concurrent or active or passive.
6. Under no circumstances shall the persons indemnified pursuant to this
Section 9 be required or obligated to seek recovery from third parties or others
to mitigate their losses to maintain a claim against You or any of Your
Principals. You and each of Your Principals agree that the failure to pursue
such recovery or mitigate loss will in no way reduce the amounts recoverable on
You or any of Your Principals by the persons indemnified pursuant to this
section.
7. You and Your Principals expressly agree that the terms of this Section
9.D. shall survive the termination, expiration or transfer of this Agreement or
any interest herein.
10. APPROVALS
A. Whenever this Agreement requires the prior approval or consent of Airsopure,
You shall make a timely written request to Airsopure and such approval or
consent shall be obtained in writing.
B. Airsopure makes no warranties or guarantees upon which You may rely and
assumes no
14
liability or obligation to You or any third party to which it would not
otherwise be subject, by providing any waiver, approval, advice, consent or
suggestion to You in connection with this Agreement, or by reason of any
neglect, delay or denial of any request therefor.
11. NON-WAIVER AND REMEDIES
A. No delay, waiver, omission or forbearance on the part of Airsopure to
exercise any right, option, duty or power arising out of any breach or default
by You or Your Principals under this Agreement shall constitute a waiver by
Airsopure to enforce any such right, option, duty or power against You or Your
Principals, or as to a subsequent breach or default by You or Your Principals.
Acceptance by Airsopure of any payments due to it hereunder subsequent to the
time at which such payments are due shall not be deemed to be a waiver by
Airsopure of any preceding breach by You or Your Principals of any terms,
provisions, covenants or conditions of this Agreement.
B. All rights and remedies of the Parties to this Agreement shall be cumulative
and not alternative, in addition to and not exclusive of any other rights or
remedies which are provided for herein or which may be available at law or in
equity in case of any breach, failure or default or threatened breach, failure
or default of any term, provision or condition of this Agreement or any other
agreement between You and Airsopure or its subsidiaries and affiliates. The
rights and remedies of the Parties to this Agreement shall be continuing and
shall not be exhausted by any one or more uses thereof and may be exercised at
any time or from time to time as often as may be expedient; and any option or
election to enforce any such right or remedy may be exercised or taken at any
time and from time to time. The expiration, earlier termination or exercise of
Airsopure rights pursuant to Section 6 of this Agreement shall not discharge or
release You or any of Your Principals from any liability or obligation then
accrued, or any liability or obligation continuing beyond, or arising out of,
the expiration, the earlier termination or the exercise of such rights under
this Agreement.
12. NOTICES
Any and all notices required or permitted under this Agreement shall be in
writing and shall be personally delivered or mailed by expedited delivery
service or certified or registered mail, return receipt requested, first-class
postage prepaid, or sent by prepaid facsimile, telegram or telex (provided that
the sender confirms the facsimile, telegram or telex by sending an original
confirmation copy by certified or registered mail or expedited delivery service
within three (3) business days after transmission) to the respective Parties at
the following addresses unless and until a different address has been designated
by written notice to the other Party:
Notices to Airsopure:
Airsopure International Group, Inc.
00000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Mr. Xxxx Xxxxxx, President
Telephone: (000) 000-0000
Notices to You and Your Principals:
---------------------------
---------------------------
---------------------------
Attn:
---------------------
Telephone:
-----------------
Any notice shall be deemed to have been given at the time of personal delivery
or, in the case of facsimile, telegram or telex, upon transmission provided
confirmation is sent as described above) or, in the case of expedited delivery
service or registered or certified mail, 3 business days after the date and time
of mailing. Business days for the purpose of this Agreement excludes Saturday,
Sunday and the following national holidays: New Year's Day, Xxxxxx Xxxxxx Xxxx
Day, Presidents' Day, Memorial Day, Independence Day, Labor Day, Columbus Day,
Veterans' Day, Thanksgiving and Christmas.
13. SEVERABILITY AND CONSTRUCTION
A. Except as expressly provided to the contrary herein, each portion, section,
part, term and provision of this Agreement shall be considered severable; and
if, for any reason, any portion, section, part, term or provision is determined
to be invalid and contrary to, or in conflict with, any existing or future law
or regulation by a court or agency having valid jurisdiction, this shall not
impair the operation of, or have any other effect upon, the other portions,
sections, parts, terms or provisions of this Agreement that remain
15
otherwise intelligible, and the latter shall continue to be given full force and
effect and bind the Parties; and the if invalid portions, sections, parts, terms
or provisions shall be deemed not to be part of this Agreement.
B. Except as expressly provided to the contrary herein, nothing in this
Agreement is intended, nor shall be deemed, to confer upon any person or legal
entity other than You, Airsopure, Airsopure officers, directors and personnel
and such of Your and Airsopure respective successors and assigns as may be
contemplated (and, as to You, authorized by Section 7.), any rights or remedies
under or as a result of this Agreement.
C. All captions in this Agreement are intended solely for the convenience of the
Parties and shall not affect the meaning or construction of any provision of
this Agreement.
D. All references to the masculine, neuter or singular shall be construed to
include the masculine, feminine, neuter or plural, where applicable. Without
limiting the obligations individually undertaken by Your Principals under this
Agreement, all acknowledgments, promises, covenants, agreements and obligations
made or undertaken by You in this agreement shall be deemed jointly and
severally undertaken by all of Your Principals.
E. Except as may be otherwise agreed to in writing between You and Airsopure,
the term "Your Principals" as used in this Agreement shall include, collectively
or individuality, Your spouse, if You is an individual; all officers and
directors of, and holders of a beneficial interest of one percent (1%) or more
of any class of securities of, You and any corporation direct or indirect
controlling You, if You are a corporation; and the general partners of You and
the officers and directors of, and holders of a beneficial interest of one
percent (1%) or more of any class of securities of, a corporate general partner
and any corporation which controls, directly or indirectly, any general partner,
if You are a partnership. The Operating Principal shall be one of Your
Principals unless otherwise agreed to between the developer and Airsopure, in
accordance with certain ownership conditions.
F. This Agreement may be executed in counterparts and each copy so executed
shall be deemed an original.
G. This Agreement shall not become effective until signed by the Chief Executive
Office or President of Airsopure.
H. Each reference in this Agreement to a corporation or partnership shall be
deemed to also refer to a limited liability company and any other similar entity
or organization. Each reference to the organizational documents, equity owners,
directors and officers of a corporation in this Agreement shall be deemed to
refer to the functional equivalents of such organizational documents, equity
owners, directors and officers, as applicable, in the case of a limited
liability company or any other similar entity or organization.
14. ENTIRE AGREEMENT: APPLICABLE LAW: MEDIATION
A. This Agreement, the documents referred to herein and the Attachments hereto,
constitute the entire, full and complete agreement between Airsopure and You and
Your Principals concerning the subject matter hereof and shall supersede all
prior related agreements between Airsopure and You and Your Principals. Except
for those permitted to be made unilaterally by Airsopure hereunder, no
amendment, change or variance from this Agreement shall be binding on either
Party unless mutually agreed to by the Parties and executed by their authorized
officers or agents in writing. This Agreement may be executed in multiple parts,
and by facsimile or other electronic transmission, each signed copy to be
considered an original.
B. THE PARTIES AGREE TO SUBMIT ANY CLAIM, CONTROVERSY OR DISPUTE ARISING OUT OF
OR RELATING TO THIS AGREEMENT (AND ATTACHMENTS) OR THE RELATIONSHIP CREATED BY
THIS AGREEMENT TO NON-BINDING MEDIATION PRIOR TO BRINGING SUCH CLAIM,
CONTROVERSY OR DISPUTE IN A COURT. THE MEDIATION SHALL BE CONDUCTED THROUGH
EITHER AN INDIVIDUAL MEDIATOR OR A MEDIATOR APPOINTED BY A MEDIATION SERVICES
ORGANIZATION OR BODY, EXPERIENCED IN THE MEDIATION OF DISPUTES IN THE AIR
PURIFICATION SERVICE BUSINESS, AGREED UPON BY THE PARTIES AND, FAILING SUCH
AGREEMENT WITHIN A REASONABLE PERIOD OF TIME AFTER
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EACH PARTY HAS NOTIFIED THE OTHER OF ITS DESIRE TO SEEK MEDIATION OF ANY CLAIM
CONTROVERSY OR DISPUTE (NOT TO EXCEED 15 DAYS), THROUGH THE AMERICAN ARBITRATION
ASSOCIATION IN ACCORDANCE THE RULES GOVERNING MEDIATION, AT AIRSOPURE CORPORATE
HEADQUARTERS IN DALLAS, TEXAS. THE COSTS AND EXPENSES OF MEDIATION, INCLUDING
COMPENSATION AND EXPENSES OF THE MEDIATOR, SHALL BE BORNE BY THE PARTIES
EQUALLY. IF THE PARTIES ARE UNABLE TO RESOLVE THE CLAIM, CONTROVERSY OR DISPUTE
90 DAYS AFTER THE MEDIATOR HAS BEEN APPOINTED, THEN EITHER PARTY MAY SUBMIT SUCH
CLAIM, CONTROVERSY OR DISPUTE TO A COURT IN ACCORDANCE WITH SECTION 14.C. BELOW
NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY BRING AN ACTION (1) FOR MONEYS
OWED, (2) FOR INJUNCTIVE RELIEF, OR (3) INVOLVING THE POSSESSION OR DISPOSITION
OF, OR OTHER RELIEF RELATING TO, REAL PROPERTY IN A COURT HAVING JURISDICTION
AND IN ACCORDANCE B SECTION 14.C. BELOW, WITHOUT SUBMITTING SUCH ACTION TO
MEDIATION.
C. WITH RESPECT TO ANY CLAIMS, CONTROVERSIES OR DISPUTES WHICH ARE NOT FINALLY
RESOLVED THROUGH MEDIATION, YOU HEREBY IRREVOCABLY SUBMIT YOURSELF TO THE
NONEXCLUSIVE JURISDICTION OF THE STATE COURTS OF DALLAS COUNTY, TEXAS AND THE
FEDERAL DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS, DALLAS DIVISION. YOU
HEREBY IRREVOCABLY AGREE THAT SERVICE OF PROCESS MAY BE MADE UPON YOU IN ANY
EACH PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE RELATIONSHIP
CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY TEXAS OR FEDERAL LAW. VENUE
FOR ANY SUCH LEGAL PROCEEDING SHALL BE DALLAS COUNTY, TEXAS; PROVIDED, HOWEVER
WITH RESPECT TO ANY ACTION (1) FOR MONEYS OWED, (2) FOR INJUNCTIVE OR OTHER
EXTRAORDINARY RELIEF OR (3) INVOLVING POSSESSION OR DISPOSITION OF; OR OFFER
RELIEF RELATING TO, REAL PROPERTY, AIRSOPURE MAY BRING SUCH ACTION IN ANY STATE
OR FEDERAL DISTRICT COURT WHICH HAS JURISDICTION. YOU HEREBY WAIVE ALL QUESTIONS
OF PERSONAL JURISDICTION FOR TITLE PURPOSE OF CARRYING OUT THIS PROVISION. WITH
RESPECT TO ALL CLAIMS, CONTROVERSIES, DISPUTES OR ACTIONS, THIS AGREEMENT SHALL
BE INTERPRETED AND CONSTRUED UNDER TEXAS LAW (EXCEPT FOR TEXAS CHOICE OF LAW
RULES).
D. YOU AND AIRSOPURE ACKNOWLEDGE THAT THE PARTIES' AGREEMENT REGARDING
APPLICABLE STATE LAW AND FORUM SET FORTH IN SECTION 14.C. ABOVE PROVIDE EACH OF
THE PARTIES WITH THE MUTUAL BENEFIT OF UNIFORM INTERPRETATION OF THIS AGREEMENT
AND ANY DISPUTE ARISING OUT OF THIS AGREEMENT OR THE PARTIES' RELATIONSHIP
CREATED BY THIS AGREEMENT, EACH OF YOU AND AIRSOPURE FURTHER ACKNOWLEDGE THE
RECEIPT AND SUFFICIENCY OF MUTUAL CONSIDERATION FOR SUCH BENEFIT.
E. YOU AND AIRSOPURE ACKNOWLEDGE THAT THE EXECUTION OF THIS AGREEMENT OCCURRED
IN DALLAS, TEXAS AND FURTHER ACKNOWLEDGE THAT THE PERFORMANCE OF CERTAIN
OBLIGATIONS OF YOU ARISING UNDER THIS AGREEMENT SHALL OCCUR IN DALLAS, TEXAS.
15. ACKNOWLEDGMENTS
A. You acknowledge that You have conducted an independent investigation of the
business venture contemplated by this Agreement and recognize that the success
of this business venture involves substantial business risks and will largely
depend upon the Your ability. Airsopure expressly disclaims making and You
acknowledge that it has not received or relied on, any warranty or guarantee,
express or implied, as to the potential volume, profits or success of the
business venture contemplated by this Agreement.
B. You acknowledge that You have received, read and understand this Agreement
and the related Attachments and agreements and that Airsopure has accorded You
sufficient time and opportunity to consult with advisors selected by
17
You about the potential benefits and risks of entering into this Agreement.
C. You acknowledge that You received a complete copy of this Agreement and all
related Attachments and agreements at least 5 business days prior to the date on
which this Agreement was executed.
D. You acknowledge that You have received the disclosure document required by
the Trade Regulation Rule of the Federal Trade Commission entitled "Disclosure
Requirements and Prohibitions Concerning Franchising and Business Opportunity
Ventures" at least 10 business days prior to the date on which this Agreement
was executed.
IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered this
Agreement on the day and year first above written.
AIRSOPURE:
AIRSOPURE FRANCHISE GROUP, INC.,
a Nevada corporation
-------------------------------------------------------------
(SIGNATURE OF AUTHORIZED OFFICER, TITLE)
-------------------------------------------------------------
(PRINT NAME OF AUTHORIZED OFFICER)
WITNESS:
-------------------------
YOU:
-------------------------------------------------------------
(CORPORATION, COMPANY OR PARTNERSHIP NAME, IF APPLICABLE)
-------------------------------------------------------------
(SIGNATURE OF INDIVIDUAL, AUTHORIZED OFFICER OR PARTNER)
-------------------------------------------------------------
(PRINT NAME)
WITNESS:
------------------------
-------------------------------------------------------------
(SIGNATURE OF INDIVIDUAL, AUTHORIZED OFFICER OR PARTNER)
-------------------------------------------------------------
(PRINT NAME)
WITNESS:
-----------------------
-------------------------------------------------------------
(SIGNATURE OF INDIVIDUAL, AUTHORIZED OFFICER OR PARTNER)
-------------------------------------------------------------
(PRINT NAME)
WITNESS:
-----------------------
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DEVELOPER'S PRINCIPALS
Each of the undersigned acknowledges and agrees as follows:
1. Each has read the terms and conditions of this Development Agreement and
acknowledges that the execution of this guaranty and the undertakings of the
Your Principals in the Development Agreement are in partial consideration for
the granting of the development rights in the Development Agreement, and that
Airsopure would not have granted such rights without the execution of this
guaranty and these undertakings by each of the undersigned;
2. Each is included in the term "Your Principals" as described in Section 13.E.
of the Development Agreement;
3. Each individually, jointly and severally makes all of the covenants,
representations, warranties and agreements of Your Principals set forth in the
Development Agreement and is obligated to perform thereunder; and
4. Each individually, jointly and severally unconditionally and irrevocably
guarantees to Airsopure that all of Your obligations under this Agreement will
be punctually paid and performed. Upon default by You or upon notice from
Airsopure, each will immediately make each payment and perform each obligation
required of You under this Agreement. Without affecting the obligations of any
of Your Principals under this guaranty, Airsopure may, without notice to Your
Principals, waive, renew, extend, modify, amend or release any indebtedness or
obligation of You or settle, adjust or compromise any claims that Airsopure may
have against You. Each of Your Principals waives all demands and notices of
every kind with respect to the enforcement of this guaranty, including, without
limitation, notice of presentment, demand for payment or performance by You, any
default by You or any guarantor and any release of any guarantor or other
security for this Agreement or the obligations of You. Airsopure may pursue its
rights against any of Your Principals without first exhausting its remedies
against You and without joining any other guarantor hereto and no delay on the
part of Airsopure in the exercise of any right or remedy shall operate as a
waiver of such right or remedy, and no single or partial exercise by Airsopure
of any right or remedy shall preclude the further exercise of such right or
remedy. Upon receipt by Airsopure of notice of the death of any of Your
Principals, the estate of the deceased will be bound by the foregoing guaranty,
but only for defaults and obligations under this Agreement existing at the time
of death, and in such event, the obligations of the remaining Your Principals
shall continue in full force and effect.
Additionally, with respect to the individual designated as Operating Principal,
Operating Principal acknowledges that the undertakings by Operating Principal
under this Agreement are made and given in partial consideration of, and as a
condition to, Airsopure grant of rights to develop Centers as described herein;
Operating Principal individually, jointly and severally makes all of the
covenants, representations and agreements of You and Operating Principal set
forth in this Agreement and is obligated to perform hereunder.
DEVELOPER'S PRINCIPALS:
-------------------------------------------------------------
(CORPORATION, COMPANY OR PARTNERSHIP NAME, IF APPLICABLE)
-------------------------------------------------------------
(SIGNATURE OF INDIVIDUAL, AUTHORIZED OFFICER OR PARTNER)
-------------------------------------------------------------
(PRINT NAME)
WITNESS:
-----------------------
-------------------------------------------------------------
(SIGNATURE OF INDIVIDUAL, AUTHORIZED OFFICER OR PARTNER)
-------------------------------------------------------------
(PRINT NAME)
WITNESS:
------------------------
* Denotes individual who is Your Operating Principal
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