Exhibit 10.36
INTELLECTUAL PROPERTY PURCHASE AGREEMENT
This INTELLECTUAL PROPERTY PURCHASE AGREEMENT (the "Agreement"), dated
December 13, 2006, is by and between AMERICAN SOIL TECHNOLOGIES, INC., a Nevada
corporation (the "Buyer") and XXX XXXXXXX, an individual (the "Seller")
(individually, a "Party"; collectively, the "Parties").
RECITALS
WHEREAS, Seller is the sole owner of certain Intellectual Property (as
defined herein);
WHEREAS, Buyer wishes to acquire the Intellectual Property, and all rights,
title and interest thereto, owned by the Seller;
WHEREAS, Seller is willing, upon payment of the Purchase Price (as defined
herein) and subject to the terms and conditions herein set forth, to sell the
Intellectual Property to Buyer;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the Parties hereto agree as follows:
ARTICLE 1
AGREEMENT TO PURCHASE AND SELL
1.1 Acquisition of Intellectual Property. Subject to the terms and
conditions herein set forth, and on the basis of the representations, warranties
and agreements herein contained, Seller agrees to sell to Buyer, and Buyer
agrees to purchase from Seller, any and all intellectual property of Seller,
including all formulas developed by Seller over the past 30 years, including but
not limited to the formulas listed on Exhibit A, and all formulas and
intellectual property used in the business of Smart World Organics, Inc.,
including all graphics and logos; all domain names and URL's; any proprietary
software and its source code; all existing content and HTML files; all branding
and trademarks; all trade names; all services marks; all copywritten material;
all patents; and all products and proceeds of the foregoing, in any form
whatsoever and wheresoever located (collectively the "Intellectual Property"),
in exchange for a Convertible Debenture in the amount of $1,500,000 and bearing
an interest rate of 8% per annum (the "Convertible Debenture").
1.2 Time and Place. The closing of the transactions contemplated by this
Agreement shall take place at the offices of Buyer, located at 00000 Xxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000, immediately upon the full execution of this
Agreement, the satisfaction of all conditions, and the delivery of all required
documents, or at such other time and place as the Parties mutually agree upon
(which time and place are hereinafter referred to as the "Closing").
1.3 Transfer of Intellectual Property. At the Closing, the Seller shall
deliver and transfer to the Buyer all of the Seller's rights, title and
interests in the Intellectual Property. Seller shall take all actions reasonably
necessary to vest all such rights in Buyer and to assist in enforcing such
rights, including executing all documents necessary for the recordation of
ownership.
1.4 Payment for Intellectual Property. In consideration for the
Intellectual Property, the Buyer shall contemporaneously execute the Convertible
Debenture in favor of the Seller (the "Purchase Price").
ARTICLE 2
SELLER'S REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Seller. The Seller represents and
warrant to the Buyer, as of the date hereof and as of the Closing, that:
2.1.1 He is the sole owner of all rights, title and interests in the
Intellectual Property, and that such rights are subsisting and
are not invalid or unenforceable in whole or in part, and are
free and clear of all encumbrances or licenses for use;
2.1.2 None of the Intellectual Property is the subject of any
pending adverse claim, or the subject of any threatened claim
of infringement;
2.1.3 He has not received any notice contesting his right to use, or
asserting infringement with respect to, any of the
Intellectual Property;
2.1.4 The use of the Intellectual Property does not infringe upon
any intellectual property rights of another Person;
2.1.5 He has not granted any license with respect to any of the
Intellectual Property; and
2.1.6 He has full power and authority to grant all of the rights,
title and interests herein contained in this Agreement.
2.2 Disclosure. No representation or warranty made by the Seller in this
Agreement, nor any document, written information, statement, financial
statement, certificate, or exhibit prepared and furnished or to be prepared and
furnished by the Seller or their representatives pursuant hereto or in
connection with the transactions contemplated hereby, when taken together,
contains any untrue statement of a material fact, or omits to state a material
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fact necessary to make the statements or facts contained herein or therein not
misleading in light of the circumstances under which they were furnished, to the
best of Sellers' knowledge and belief.
2.3 Reliance. The foregoing representations and warranties are made by the
Seller with the knowledge and expectation that the Buyer is placing reliance
thereon.
ARTICLE 3
CONDITIONS PRECEDENT
3.1 Conditions to Seller's Obligations. The obligations of Seller shall be
subject to the satisfaction prior to or at the Closing of the following
conditions unless waived by Seller:
(a) Acquisition Agreement. The Acquisition Agreement, dated June 20, 2006,
whereby Smart World Organics, Inc. became a wholly owned subsidiary of the Buyer
(the "Acquisition Agreement"), shall have closed prior to Closing.
(b) Purchase Price. The Purchase Price shall have been delivered as
required by Section 1.4.
3.2 Conditions to Buyer's Obligations. The obligations of Buyer shall be
subject to the satisfaction prior to or at the Closing of the following
conditions unless waived by Buyer:
(a) Representations and Warranties of Seller. The representations and
warranties of Seller set forth in this Agreement shall be true and correct as of
the date of this Agreement and as of the Closing as though made on and as of the
Closing, except: (i) as otherwise contemplated by this Agreement; or (ii) in
respects that do not have a Material Adverse Effect (as defined below) on the
Parties or on the benefits of the transactions provided for in this Agreement.
For purposes of this Agreement, the term "Material Adverse Effect" means any
change or effect that, individually or when taken together with all other such
changes or effects which have occurred prior to the date of determination of the
occurrence of the Material Adverse Effect, is or is reasonably likely to be
materially adverse to the business, assets (including intangible assets),
financial condition, or results of operations of the entity.
(b) Acquisition Agreement. The Acquisition Agreement shall have closed
prior to Closing.
ARTICLE 4
INDEMNIFICATION
4.1 Seller's Indemnity Obligations.
(a) Upon receipt of notice thereof, Seller shall indemnify, defend, and
hold harmless Buyer from any and all claims, demands, liabilities, damages,
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deficiencies, losses, obligations, costs and expenses, including attorney fees
and any costs of investigation that Buyer shall incur or suffer, that arise,
result from or relate to any breach of, or failure by Seller to perform, any of
their representations, warranties, covenants, or agreements in this Agreement or
in any schedule, certificate, exhibit, or other instrument furnished or to be
furnished by Seller under this Agreement.
(b) Buyer shall notify promptly Seller of the existence of any claim,
demand, or other matter to which Seller's indemnification obligations would
apply, and shall give them a reasonable opportunity to defend the same at their
own expense and with counsel of their own selection, provided that Seller shall
at all times also have the right to fully participate in the defense. If Seller,
within a reasonable time after this notice, fails to defend, Buyer shall have
the right, but not the obligation, to undertake the defense of, and, with the
written consent of Seller, to compromise or settle the claim or other matter on
behalf, for the account, and at the risk, of Seller.
4.2 Buyer's Indemnity Obligations.
(a) Upon receipt of notice thereof, Buyer shall indemnify, defend, and hold
harmless Seller from any and all claims, demands, liabilities, damages,
deficiencies, losses, obligations, costs, and expenses, including attorney fees
and any costs of investigation that Seller shall incur or suffer, that arise,
result from or relate to any breach of, or failure by Buyer to perform any of
its representations, warranties, covenants, or agreements in this Agreement or
in any schedule, certificate, exhibit, or other instrument furnished or to be
furnished by Buyer under this Agreement.
(b) Seller shall notify promptly Buyer of the existence of any claim,
demand or other matter to which Buyer's indemnification obligations would apply,
and shall give it a reasonable opportunity to defend the same at its own expense
and with counsel of its own selection, provided that Seller shall at all times
also have the right to fully participate in the defense. If Buyer, within a
reasonable time after this notice, fails to defend, Seller shall have the right,
but not the obligation, to undertake the defense of, and, with the written
consent of Buyer, to compromise or settle the claim or other matter on behalf,
for the account, and at the risk, of Buyer.
ARTICLE 5
DEFAULT, AMENDMENT AND WAIVER
5.1 Default. Upon a breach or default under this Agreement by any of the
Parties (following the cure period provided herein), the non-defaulting Party
shall have all rights and remedies given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise. Notwithstanding the foregoing,
in the event of a breach or default by any Party hereto in the observance or in
the timely performance of any of its obligations hereunder which is not waived
by the non-defaulting Party, such defaulting Party shall have the right to cure
such default within 15 days after receipt of notice in writing of such breach or
default.
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5.2 Waiver and Amendment. Any term, provision, covenant, representation,
warranty, or condition of this Agreement may be waived, but only by a written
instrument signed by the Party entitled to the benefits thereof. The failure or
delay of any Party at any time or times to require performance of any provision
hereof or to exercise its rights with respect to any provision hereof shall in
no manner operate as a waiver of or affect such Party's right at a later time to
enforce the same. No waiver by any Party of any condition, or of the breach of
any term, provision, covenant, representation, or warranty contained in this
Agreement, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or waiver of any
other condition or of the breach of any other term, provision, covenant,
representation, or warranty. No modification or amendment of this Agreement
shall be valid and binding unless it be in writing and signed by all Parties
hereto.
ARTICLE 6
MISCELLANEOUS
6.1 Expenses. Whether or not the transactions contemplated hereby are
consummated, each of the Parties hereto shall bear all taxes of any nature
(including, without limitation, income, franchise, transfer, and sales taxes)
and all fees and expenses relating to or arising from its compliance with the
various provisions of this Agreement and such Party's covenants to be performed
hereunder, and except as otherwise specifically provided for herein, each of the
Parties hereto agrees to pay all of its own expenses (including, without
limitation, attorneys and accountants' fees, and printing expenses) incurred in
connection with this Agreement, the transactions contemplated hereby, the
negotiations leading to the same and the preparations made for carrying the same
into effect, and all such taxes, fees, and expenses of the Parties hereto shall
be paid prior to Closing.
6.2 Notices. Any notice, request, instruction, or other document required
by the terms of this Agreement, or deemed by any of the Parties hereto to be
desirable, to be given to any other Party hereto shall be in writing and shall
be given by personal delivery, overnight delivery, mailed by registered or
certified mail, postage prepaid, with return receipt requested, or sent by
facsimile transmission to the addresses of the Parties as follows:
To Buyer: American Soil Technologies, Inc.
Attn: Xxxx Xxxxx, President
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
To Seller: Xxx Xxxxxxx
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-----------------------
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With a copy to: Xxxxxx & Yap
Attn: Xxxxx Xxxxxx, Esq.
00000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
The persons and addresses set forth above may be changed from time to time by a
notice sent as aforesaid. If notice is given by personal delivery or overnight
delivery in accordance with the provisions of this Section, such notice shall be
conclusively deemed given at the time of such delivery provided a receipt is
obtained from the recipient. If notice is given by mail in accordance with the
provisions of this Section, such notice shall be conclusively deemed given upon
receipt and delivery or refusal. If notice is given by facsimile transmission in
accordance with the provisions of this Section, such notice shall be
conclusively deemed given at the time of delivery if during business hours and
if not during business hours, at the next business day after delivery, provided
a confirmation is obtained by the sender.
6.3 Entire Agreement. This Agreement, together with the Schedule and
Exhibits hereto, sets forth the entire agreement and understanding of the
Parties hereto with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and understandings related to the
subject matter hereof. No understanding, promise, inducement, statement of
intention, representation, warranty, covenant, or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any party
hereto which is not embodied in this Agreement, or in the schedules or exhibits
hereto or the written statements, certificates, or other documents delivered
pursuant hereto or in connection with the transactions contemplated hereby, and
no Party hereto shall be bound by or liable for any alleged understanding,
promise, inducement, statement, representation, warranty, covenant, or condition
not so set forth.
6.4 Survival of Representations. All statements of fact (including
financial statements) contained in the Schedules, the exhibits, the
certificates, or any other instrument delivered by or on behalf of the Parties
hereto, or in connection with the transactions contemplated hereby, shall be
deemed representations and warranties by the respective party hereunder. All
representations, warranties, agreements, and covenants hereunder shall survive
the Closing and remain effective regardless of any investigation or audit at any
time made by or on behalf of the Parties or of any information a Party may have
in respect hereto. Consummation of the transactions contemplated hereby shall
not be deemed or construed to be a waiver of any right or remedy possessed by
any Party hereto, notwithstanding that such Party knew or should have known at
the time of Closing that such right or remedy existed.
6.5 Incorporation by Reference. The recitals, schedules, exhibits, and all
documents (including, without limitation, all financial statements) delivered as
part hereof or incident hereto are incorporated as a part of this Agreement by
reference.
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6.6 Remedies Cumulative. No remedy herein conferred upon the Parties is
intended to be exclusive of any other remedy and each and every such remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
6.7 Choice of Law. This Agreement and the rights of the Parties hereunder
shall be governed by and construed in accordance with the laws of the State of
California including all matters of construction, validity, performance, and
enforcement and without giving effect to the principles of conflict of laws.
6.8 Jurisdiction. The Parties submit to the jurisdiction of the Courts of
the County of Orange, State of California or a Federal Court empaneled in the
State of California for the resolution of all legal disputes arising under the
terms of this Agreement.
6.9 Attorneys' Fees. In the event any Party hereto shall commence legal
proceedings against the other to enforce the terms hereof, or to declare rights
hereunder, as the result of a breach of any covenant or condition of this
Agreement, the prevailing Party in any such proceeding shall be entitled to
recover from the losing Party its costs of suit, including reasonable attorneys'
fees, as may be fixed by the court.
6.10 Binding Effect and Assignment. This Agreement shall inure to the
benefit of and be binding upon the Parties hereto and their respective heirs,
executors, administrators, legal representatives, and assigns.
6.11 Counterparts; Facsimile Signatures. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. The Parties agree that facsimile signatures of this Agreement shall
be deemed a valid and binding execution of this Agreement.
6.12 Conflict Waiver. Seller hereby acknowledges that Xxxxxx & Yap ("the
Firm") represents the Buyer with various legal matters and does not represent
the Seller in connection with this Agreement or the contemplated transaction nor
in any other respect. Seller further acknowledges that the Firm has drafted this
Agreement. Seller has been given the opportunity to consult with counsel of
their choice regarding their rights under this Agreement. Seller hereby waives
any action it may have against the Firm regarding such conflict of interest.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement, as of
the date first written hereinabove.
BUYER:
AMERICAN SOIL TECHNOLOGIES, INC.,
a Nevada corporation
/s/ Xxxx X. Xxxxx
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By: Xxxx X. Xxxxx
Its: President
SELLER:
/s/ Xxx Xxxxxxx
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By: Xxx Xxxxxxx
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EXHIBIT A
FORMULAS
1. The following NPK's are produced under a registered trademark "PROSPER."
Liquid nutrient complex. They are mainly built with food grade materials,
hot mix over 200(0)at processing. Heat is from a reaction that homogenizes
and pasteurizes. Also during the cool down periods various organic and
other values added are introduced to make the product on frequency with the
plant biologically active and totally accepted and utilized by the plant
soil or foliar fed. These products are unique I know of no one that
produces them. Most all companies use salt-based cold agitated mixes poorly
utilized by the plant and stressful to the soil and plants requiring more
water and not nature friendly. The NPK numbers are as follows 0-0-20,
0-20-0, 6-14-6, 10-8-8, 16-4-8, 20-4-4, 20-3-5, 6-40-6, 0-10-10, 10-10-15,
9-18-9, and 8-0-8. I have now started various other formulations in
production using Chilean Nitrate, potassium sulphate, and other organic
ingredients for the phosphorus. Again with other values added. These are
unique and without competition to my knowledge.
2. PROSPER BLOSSOM AND FRUIT - unique highly functional increasing blossom and
fruit set.
3. PROSPER DARK GREEN- liquid proprietary chelation organic and conventional
formulations.
4. PROSPER EJECT- conventional and organic versions of irrigation line
cleaner. Does not deteriorate plastic lines as competition uses acids and
other materials that degrade irrigation lines and emitters and dehydrate
root systems.
5. PROSPER EMBARK-rejuvenates stresses and declining of fruit trees via
opening up vascular system clogged with salt fertilizers and poorly
chelated micronutrients and heavy metals.
6. PROSPER ENCOURGAE- reduces water dynes from 70's to 30's for more
penetration and effectiveness of foliage applied nutrients greatly
increasing intake and performance.
7. PROSPER EXPAND- increases cell count, growth, and production of all plants
by use of natural occurring hormones and nutrition.
8. PROSER FISH EMULSION- with added biologicals, enzymes, and organic carbons.
9. PEOSPER HOLD- prevents premature fruit drop before maturity.
10. PROSPER INFILTRATOR- controls insects, snails, and hard cuticle protected
insects also soil born and traveled insects.
11. PROSPER INTENSIFY- increases all livestock's immune system for shipping and
other stress related issues.
12. PROSPER LIQUA CAL- various versions of calcium including coral with 74
minerals. Contains chelation and special catalysts.
13. PROSPER LIQUA XXXX- mined humic acid we process into various percentages
adding biologicals. The humates are of high molecular structure and
minerals.
14. PROSPER LIQUA SUL- special sulphur to increase the availability of
nutrients and the conductivity of the soil.
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15. PROSPER MAGNESIUM- with added catalyst and special delivery system.
16. PROSPER PERFECT- organic insecticide via use of certain fatty acids and
emulsifiers.
17. PROSPER PLEX MICRONUTRIENTS- several versions and percentages containing
organic carbons proprietary chelation delivery system. Balanced pH
containing lignasulphnate, boron, sulphur, molybdate, magnesium, manganese,
zinc, glucoheptonate, thiamine, ketoglutaric, glycine to name a few. Again
several versions to restore missing elements not found in soil today, which
gives reduced minerals in human and animal food. Prosper Plex immediately
replaces these major, minor elements for healthy plants and soil for
healthy people and animals. Again several versions and produced
specifically for growing areas that are depleted due to indiscriminate use
of chemicals and soil depletion.
18. PROSPER PROLONG- controls virus and certain fungus plagued by growers
around the world.
19. PROSPER SEA GROW- mined from the sea seaweed vegetable producing with
values added percentages as desired, several versions.
20. PROSPER SOIL CONDITIONER- loosens heavy, clay, and gumbo soil increasing
the porosity, air and water movement greatly reducing standing water.
Allows for earlier planting, easier tillage, increases soil micro floral 2
to 3 times daily for 30 days.
21. PROSPER SUPERIER XXXX- same as LIQUA XXXX with additional chelation,
minerals, micronutrients, biologicals, etc.
22. PROSPER TKO- insecticide made from plants extracts through fermentation.
Organic nature friendly.
23. PROSPER PLANT SHIELD- greatly reduces evaporation transpiration on leaves.
Prevents flying fungus spores from entering. May use for a root dip for
transporting and for plant resetting.
24. PROSPER COMTRIFIC- biologicals for compost starter and expeditor.
25. GARDEN THUNDER- a special organic fertilizer for beautiful productive
gardens. Also sold under the name MAJIC GROW.
26. NATURAL INSECTICIDAL OILS- at least 10 versions made from plants extracts
(essential oils) controls insects, fungus, some inspire production.
Produced through compounding, emulsifying, and stabilized.
27. PROSPER PHITE- controls plant root-destroying fungus that destroys grower's
crops and profits.
28. GARLIC EXTRACTS with values added including grape fruit seed extracts.
29. MYCORRYHAZZAE FUNGI- increases root growth and nutrient uptake.
30. PROSPER NEMA- selected in house produced fungi and imperfecti. Encapsulates
nematodes that destroy plant root systems. A large costly worldwide problem
to all growers.
31. PROSPER BRIGHT FRUIT- increases color-making fruit more cosmetically
attractive for resale.
32. HYBRIX- increases sugar content, sweetness, shelf life, and taste.
33. PROSPER INTRIGUE- decreases time to make silage from corn, hay, or other
crops and at a lower temperature thus increasing protein and nutrients for
livestock.
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34. PROSPER NITRO-ACTIVE- proprietary biologicals (nitrogen fixing) bacteria to
help plant make its own nitrogen.
35. PROSPER THRIVE- a multi-crop seed inoculant and protectant containing soil
bacteria, organic carbons, vitamins, hormones, and enzymes.
36. SMART CedarAct- extracts of cedarwood trees. The properly emulsified oils
protect against fungus and insects.
37. Global EarthTek- see attached 20-point confidential research from USDA and
universities.
38. SMART CORAL CALCIUM- ground compounded into liquid. Highly effective on all
crops with numerous minerals.
39. SMART TEA QUALITY GROW, TURF TEA MAGIC, and SMART HYDROPONICS ORGANICGRO-
are all closely related ingredient products made through fermentation. They
are all inclusive containing all minerals, NPK's, pH balanced, numerous
organic carbons mined from land and sea for use for increase crop quality
yield, shelf life, and profits.
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