JOINT VENTURE AGREEMENT
JOINT
VENTURE
AGREEMENT
This
Joint Venture Agreement (this “Agreement”)
is made
and entered into this 10th day of October 2005 by and between Xxxxxxx X.
Xxxxxxx, PhD, with offices at P.O. 1749, Evergreen, CO or his assignee
(“XXXXXXX”)
and
Electric Aquagenics Unlimited, Inc., a Delaware corporation with offices at
0000
Xxxx 00 Xxxxx, Xxxxx 000, Xxxxxx, Xxxx 00000 (“EAU”).
XXXXXXX and EAU are referred to herein sometimes collectively as the
“Parties”
and
individually as the “Party.”
RECITALS:
WHEREAS,
XXXXXXX
is in the business of researching, developing, manufacturing and marketing
certain proprietary products that clean, sanitize and protect as well as
products that minimize corrosion, mold, mildew, fungi and other microbial growth
on interior and exterior surfaces, and have a myriad of application, including
agricultural, all of which are more particularly described on Exhibit “A,”
attached hereto and incorporated herein by reference (the “XXXXXXX
Products”);
and
WHEREAS,
XXXXXXX
markets certain of the XXXXXXX Products to third parties (the “Marketed
Products”);
and
WHEREAS,
XXXXXXX
has contracted with numerous third parties to market the XXXXXXX Products
domestically in multiple market sectors nationally and internationally (the
“XXXXXXX
Sales Agents”);
and
WHEREAS,
certain
of the XXXXXXX Products are in the research and development stage and have
not
been introduced into the market (the “Undeveloped
Products”)
and are
described on Exhibit “A”; and
WHEREAS,
certain
of the XXXXXXX Products are still in the a conceptual stage and are not yet
subject to any development and are described on Exhibit “A” (the “Concept
Products”);
and
WHEREAS,
EAU
designs, manufactures and sells equipment that produces electrolyzed oxidative
water that is useful in a variety of applications, including killing and
controlling the growth of mold (the “EO
Products”);
and
WHEREAS,
EAU
manufactures products that contain proprietary stabilized oxygen known as
“Aquagen®,” (the “Aquagen
Products”);
and
WHEREAS,
EAU
markets and sells many of the EO Products and the Aquagen Products in diverse
marketing channels that include industrial, commercial and residential
applications; and
1
WHEREAS,
XXXXXXX
and EAU desire to establish a limited liability company as a joint venture
company, (the “JVC”)
for the
purpose of developing, promoting, distributing and selling XXXXXXX Products,
including the Marketing Products, the Undeveloped Products and the Concept
Products, that may include applications with the EO Products and the Aquagen
Products:
NOW,
THEREFORE,
in
consideration of the promises and mutual agreements and covenants herein
contained, the parties hereby agree as follows:
ARTICLE
1
NAME
AND SCOPE OF BUSINESS; THE XXXXXXX SALES AGENTS
1.1 Purpose
of the JVC.
The
purpose and scope of the business to be engaged in by the JVC shall be to (A)
increase the promotion, distribution and sale of XXXXXXX Products; and (B)
develop, prepare to market and market the Undeveloped Products and the Concept
Products, with or without application of the EO Products and the Aquagen
Products.
1.2 The
XXXXXXX Sales Agents.
The
Parties shall retain certain of the XXXXXXX Sales Agents and empower them to
market and sell the EO Products to their current customers; and shall establish
direct independent sales agreements with each of the XXXXXXX Sales Agents to
affect the purposes of this paragraph.
ARTICLE
2
FORMATION
AND CONTRIBUTIONS
2.1 Formation
and Organization.
Promptly
after the execution of this Agreement, the Parties shall cause “Articles of
Organization” (the “Articles”)
to be
executed and filed with the Nevada Secretary of State and shall execute an
“Operating Agreement,” (the “Operating
Agreement”)
to
govern the JVC, acceptable to the Parties. In addition to the foregoing, the
parties shall take all other actions required to form the JVC under the laws
of
the State of Nevada.
2.2 Contributions.
Upon
the
execution of this Agreement or as soon thereafter as is practicable, subject
to
the conditions set forth in Article 10 of this Agreement,
(A) XXXXXXX
shall transfer or cause to be transferred to the JVC the non-exclusive rights
to
sell certain of the XXXXXXX Products identified on Exhibit “A” and the rights to
sell to the Undeveloped Products and the Concept Products, pursuant to terms
and
price to be determined, as XXXXXXX contributions to the JVC in exchange for
its
“Membership Interest” (referred as the “XXXXXXX
Membership Interest”)
therein; and
(B) XXXXXXX
shall manufacture the XXXXXXX Products for the JVC and sell such to the JVC
at
the price stated for each of the respective XXXXXXX Products set forth on or
attached to Exhibit “A”; and to the extent required, will manufacture the
Undeveloped Products and the Concept Products, if any, and sell the same to
the
JVC at the price to be determined for each of the respective products, if any,
that may be produced and developed by XXXXXXX.
2
(C) EAU
shall
do the following for its “Membership Interest” (the “EAU
Membership Interest”);
| · |
Deliver
to XXXXXXX, a consulting agreement (the “XXXXXXX
Consulting Agreement”),
whereby EAU shall pay to XXXXXXX the sum of Ten Thousand Dollars
($10,000)
per month for XXXXXXX’x consulting services and for further development,
improvement or application use of the XXXXXXX Products, set forth
on
Exhibit “A”, and for management services as described in Article
3;
|
| · |
Commit
to specific funding and other resources in order to develop marketing
for
the Undeveloped Products and the Concept Products, if any, for the
JVC;
|
| · |
Provide
capital for XXXXXXX’x basic infrastructure, according to a budget (the
“Budget”)
that the Parties shall agree upon that will include the monies paid
pursuant to the Consulting Agreement or other specified
agreements;
|
| · |
Deliver
to XXXXXXX One Hundred Thousand (100,000) shares of Electric Aquagenics
Unlimited, Inc., a Delaware corporation, restricted common
stock;
|
| · |
Provide
resources necessary to develop marketing and sale of the Undeveloped
Products and the Concept Products, if any that may be produced and
developed by XXXXXXX. All of the above EAU expenditures are referred
to
herein collectively as the “EAU
Capital Contributions”).
|
2.3 JVC
Exclusive Joint Ventures. The
Parties shall initially designate certain proposed Exclusive Joint Venture
projects as set forth on Exhibit “B”, which from time to time may be amended or
enhanced upon mutual written agreement signed by the Parties.
ARTICLE
3
MANAGEMENT
3.1 Manager.
Subject
to the provisions of the Articles and the Operating Agreement as to any actions
required to be authorized or approved by the JVC’s members, the business and
affairs of the JVC shall be managed and all its powers shall be exercised
jointly by XXXXXXX and EAU.
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3.2 Officers.
Subject
to the provisions of the Articles and the Operating Agreement, the officers
of
the JVC shall be a president, a secretary, and a treasurer, who shall also
be
the chief financial officer of the JVC.
3.3 Personnel.
The
Parties agree that the policy of the JVC is that it will pay no salary or fees,
other than the XXXXXXX Consulting Agreement, to anyone employed by XXXXXXX
or
EAU unless such person is engaged full-time in the operation of the JVC and
such
salary or fee shall be commensurate with amounts generally paid for such
services in Nevada.
ARTICLE
4
FINANCIAL
AND ACCOUNTING PRINCIPLES OF THE JOINT VENTURE COMPANY
4.1 Books
and Records.
Throughout the term of this Agreement, the Parties shall ensure that the JVC
maintains full and accurate accounting records in accordance with generally
accepted accounting principles consistently applied, and shall prepare quarterly
financial and operating reports. Such reports shall be in such form as XXXXXXX
and EAU may from time to time agree.
4.2 Right
of Inspection.
At all
times after the JVC’s formation and organization, each Party shall have the
right by its duly authorized representative or accountant to inspect and have
full access to all properties, books of account, records and the like of the
JVC
and the JVC shall furnish to the requesting Party all information concerning
the
same which the requesting Party may reasonably require in connection with a
complete examination thereof, and the requesting Party shall have the right
to
inspect and make copies from the books and records of the JVC at all reasonable
times.
ARTICLE
5
DISTRIBUTION
AND APPROPRIATION OF PROFITS
5.1 Sources
of JVC Profits.
It is
contemplated that the initial of revenue and profit for the JVC will be revenues
and profits derived from the sale of XXXXXXX Products.
(A) The
XXXXXXX Products.
The
sales of the XXXXXXX Products described herein shall exclude revenues generated
to the XXXXXXX Sales Agents. XXXXXXX shall deliver the XXXXXXX Products to
the
JVC at the price stated for each XXXXXXX Products on or attached to Exhibit
“A”.
(B) The
Undeveloped Products and Concept Products.
With
respect to the Xxxxxxx Products, the Undeveloped Products and Concept Products
(if any), the Parties shall divide the net profits from the sale of the XXXXXXX
Products, the Undeveloped Products and the Concept Products (if any), fifty
percent (50%) to EAU and fifty percent (50%) to XXXXXXX, provided that XXXXXXX
sells the Undeveloped Products and Concept Products (if any), to the JVC for
the
amount determined to be the manufacturing cost price.
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5.2 Profits
from Other Sources.
Any
profits derived by the JVC from revenue sources other than those described
in
Sections 5.1 of this Agreement, shall be distributed as described in Section
5.1.
5.3 Accumulated
JVC Assets. In
the
event that JVC accumulates assets or income, if any, which has not been subject
of appropriation and distribution, pursuant to Sections 5.1 and 5.2 of this
Agreement, then the Parties shall receive fifty percent (50%) appropriation
and
distribution of the same, periodically, per the mutual agreement of the Parties,
otherwise, upon termination of the JVC.
ARTICLE
6
REPRESENTATIONS
AND WARRANTIES
6.1 Representations
and Warranties of XXXXXXX.
XXXXXXX
represents and warrants to EAU that:
(A) Organization
and Existence.
XXXXXXX
is an individual has full corporate power and authority to own and lease the
properties and assets it now owns and leases and to carry on its business as
and
where such properties and assets are now owned or leased and such business
is
now conducted. XXXXXXX owns the formulas of the XXXXXXX Products and any and
all
rights attached to or arising from the Undeveloped Products and Concept Products
and does not require the approval, consent or agreement from any other third
party entity and/ or individual to enter into this Agreement and deal with
the
XXXXXXX Products and the Undeveloped Products and Concept Products.
(B) Authority
and Approval.
XXXXXXX
has the corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. This Agreement is a valid and binding
obligation of XXXXXXX, enforceable against XXXXXXX in accordance with its terms.
When executed the Operating Agreement will be a valid and binding obligation
of
XXXXXXX enforceable against XXXXXXX in accordance with its terms. No other
act,
approval or proceedings on the part of XXXXXXX or any other person or entity
is
or will be required to authorize the execution and delivery of this Agreement
and the Operating Agreement by XXXXXXX or the consummation of the transactions
contemplated by each.
(C) No
Conflict.
This
Agreement and the Operating Agreement and the execution and delivery of each
by
XXXXXXX do not, and the fulfillment and compliance with the terms and conditions
of each and the consummation of the transactions contemplated by each will
not,
(i) conflict with any of, or require the consent of any person or entity under,
the terms, conditions or provisions of the articles of incorporation or bylaws
of XXXXXXX, (ii) violate any provision of, or require any consent, authorization
or approval under, any law or administrative regulation or any judicial,
administrative or arbitration order, award, judgment, writ, injunction or decree
applicable to XXXXXXX, (iii) conflict with, result in a breach of, constitute
a
default under (whether with or without notice or the lapse of time or both),
or
accelerate or permit the acceleration of the performance required by, or require
any consent, authorization or approval under, any indenture, mortgage, lien,
lease, agreement or instrument to which XXXXXXX is a party or by which it is
bound or to which any of its assets or property is subject, or (iv) result
in
the creation of any lien, charge or encumbrance upon the assets or property
of
XXXXXXX under any such indenture, mortgage, lien, lease, agreement or
instrument. XXXXXXX is not subject to any order, judgment, decree or award
of
any court or other judicial administrative or regulatory body or arbitrator
having prospective effect.
5
(D) Compliance.
To the
best of its knowledge, XXXXXXX has complied in all material respects with all
laws, regulations, orders, judgments or decrees of any federal, state or local
court or governmental authority or agency applicable to XXXXXXX with respect
to
its activities relating to the offer and sale of XXXXXXX Products.
(E) Disclosure.
No
representation or warranty by XXXXXXX contained in this Agreement, nor any
statement contained in the Operating Agreement or in any Schedule, Exhibit,
certificate, list or other instrument furnished or to be furnished by XXXXXXX
to
EAU pursuant to this Agreement or the Operating Agreement or in connection
with
the transactions contemplated by either, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
which is necessary in order to make the statements contained herein or therein
not false or misleading. There is no fact known to XXXXXXX which materially
adversely affects, or in the future may (as far as XXXXXXX can now reasonably
foresee) materially adversely affect, the condition (financial or other),
properties, assets, business, operations or prospects of XXXXXXX. All documents
delivered or to be delivered by XXXXXXX to EAU pursuant to this Agreement are
or
will be true and complete copies of what they purport to be.
6.2 Representations
and Warranties of EAU.
EAU
represents and warrants to XXXXXXX that:
(A) Organization
and Existence.
EAU
is a
corporation duly organized, validly existing and in good standing under the
laws
of the State of Delaware. EAU has full corporate power and authority to own
and
lease the properties and assets it now owns and leases and to carry on its
business as and where such properties and assets are now owned or leased and
such business is now conducted.
(B) Authority
and Approval.
EAU has
the corporate power and authority to enter into this Agreement and to perform
its obligations hereunder. This Agreement is a valid and binding obligation
of
EAU, enforceable against EAU in accordance with its terms. When executed the
Operating Agreement will be a valid and binding obligation of EAU enforceable
against EAU in accordance with its terms. No other act, approval or proceedings
on the part of EAU or any other person or entity is or will be required to
authorize the execution and delivery of this Agreement and the Operating
Agreement by EAU or the consummation of the transactions contemplated by
each.
6
(C) No
Conflict.
This
Agreement and the Operating Agreement and the execution and delivery of each
by
EAU do not, and the fulfillment and compliance with the terms and conditions
of
each and the consummation of the transactions contemplated by each will not,
(i)
conflict with any of, or require the consent of any person or entity under,
the
terms, conditions or provisions of the articles of incorporation or bylaws
of
EAU, (ii) violate any provision of, or require any consent, authorization or
approval under, any law or administrative regulation or any judicial,
administrative or arbitration order, award, judgment, writ, injunction or decree
applicable to EAU, (iii) conflict with, result in a breach of, constitute a
default under (whether with or without notice or the lapse of time or both),
or
accelerate or permit the acceleration of the performance required by, or require
any consent, authorization or approval under, any indenture, mortgage, lien,
lease, agreement or instrument to which EAU is a party or by which it is bound
or to which any of its assets or property is subject, or (iv) result in the
creation of any lien, charge or encumbrance upon the assets or property of
EAU
under any such indenture, mortgage, lien, lease, agreement or instrument. EAU
is
not subject to any order, judgment, decree or award of any court or other
judicial administrative or regulatory body or arbitrator having prospective
effect.
(D) Compliance.
To the
best of its knowledge, EAU has complied in all material respects with all laws,
regulations, orders, judgments or decrees of any federal, state or local court
or governmental authority or agency applicable to EAU with respect to its
business activities relating to the offer and sale of EO Products and Aquagen
Products.
(E) Disclosure.
No
representation or warranty by EAU contained in this Agreement, nor any statement
contained in the Operating Agreement or in any Schedule, Exhibit, certificate,
list or other instrument furnished or to be furnished by EAU to XXXXXXX pursuant
to this Agreement or the Operating Agreement or in connection with the
transactions contemplated by either, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
which is necessary in order to make the statements contained herein or therein
not false or misleading. There is no fact known to EAU which materially
adversely affects, or in the future may (as far as EAU can now reasonably
foresee) materially adversely affect, the condition (financial or other),
properties, assets, business, operations or prospects of EAU. All documents
delivered or to be delivered by EAU to XXXXXXX pursuant to this Agreement are
or
will be true and complete copies of what they purport to be.
ARTICLE
7
ADDITIONAL
AGREEMENTS AND COVENANTS
7.1 Conformity
to Representations.
From the
date hereof to and including the Closing Date, neither XXXXXXX nor EAU will
take
any action that would cause any of the representations and warranties made,
with
respect to XXXXXXX or EAU, respectively, in this Agreement or with the Operating
Agreement not to be true and correct in all material respects on and as of
the
Closing Date with the same force and effect as if such representations and
warranties had been made on and as of the date of this Agreement.
7
7.2 Survival.
The
provisions, covenants, rights, responsibilities, promises, pledges and titles
accruing to and imposed upon XXXXXXX and EAU under this Agreement shall survive
the reorganization, merger, acquisition, sale and/or change in management of
either Party, so long as either Party is not in default under the terms and
conditions of this Agreement at the time of such reorganization, merger,
acquisition, sale and/or change in management.
ARTICLE
8
TERMINATION
8.1 Termination.
This
Agreement shall be terminated and the JVC dissolved accordingly upon the
occurrence of any of the following events to the JVC:
(A) liquidation,
bankruptcy or insolvency;
(B) termination
of business by decision of the Members;
(C) the
appointment of any trustee, receiver or liquidator for substantially all of
the
assets of the JVC
(D) the
attachment, sequestration, execution or seizure of substantially all of the
assets of the JVC, which attachment, sequestration, execution or seizure is
not
vacated within thirty (30) days from the institution thereof; or
(E) judicial,
governmental or any sale other than a voluntary sale of substantially all of
the
assets of the JVC by its Manager.
8.2 Sale
of Any Membership Interests by One of the Parties.
This
Agreement may be terminated by either XXXXXXX or EAU on not less than ten (10)
days’ written notice to the other Party hereto, if either XXXXXXX or EAU shall
cease to be the owner of all of the Membership Interests of the
JVC.
8.3 Termination
for Cause.
This
Agreement may be terminated by either XXXXXXX or EAU, and the JVC dissolved
accordingly, in the event that the other Party hereto shall default in the
performance of any of its undertakings in this Agreement and such default shall
not be remedied to the reasonable satisfaction of the non-defaulting Party
within sixty (60) days next after written notice of such default shall have
been
given to the defaulting Party, in which case such termination shall take place
on the sixtieth (60th)
day.
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8.4 Insolvency
or Merger.
This
Agreement may be terminated by either XXXXXXX or EAU, and the JVC dissolved
accordingly, on not less than ten (10) days' written notice to the other Party
hereto, effective upon the date stated in such notice, if the other Party shall
file a petition in bankruptcy or for a receiver for all or any substantial
portion of its property and assets, or if such petition shall be filed against
the other Party and shall not be dismissed with thirty (30) days from its
filing, or if the other Party shall file a petition for reorganization or to
effect a composition with its creditors or such a petition shall be filed
against the other Party and shall not be discharged within ninety (90) days
after the date of its filing, or if the other Party shall make a general
assignment for the benefit of creditors, and in the case of any such
termination, all of the rights and obligations under and pursuant to this
Agreement shall cease and terminate, except such as shall have accrued prior
to
termination, including but not limited to, any and all claims and demands for
damages for any breach of any covenant contained in this Agreement, and except
for the continuing obligations of XXXXXXX and EAU contained in this Agreement
with respect to the confidential treatment of technical, economic and marketing
information.
8.5 Effectiveness
of the Relative Agreements.
The
termination of this Agreement shall not affect the effectiveness of any
agreement executed by the Parties hereto and/or the JVC pursuant to this
Agreement and such relative agreements shall continue to be effective until
such
relative agreements will be terminated in accordance with the terms
thereof.
ARTICLE
9
NATURE
AND SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION
9.1 Nature
and Survival of Representations, Warranties and
Covenants.
All
representations, warranties and covenants made by XXXXXXX or EAU in this
Agreement and in any schedules, certificates or other documents delivered in
connection with the transactions contemplated hereby shall survive the Closing
and any investigation at any time made or any knowledge received by or on behalf
of XXXXXXX or EAU; provided, however, that in the case of indemnification
arising under Section 9.2(A) below, no Party shall have any liability unless
it
is given notice on or before the expiration of twelve (12) months after this
Agreement’s execution Date asserting a claim with respect thereto and specifying
the factual basis of such claim in reasonable detail to the extent
known.
9.2 Indemnification.
The
Parties shall indemnify and hold harmless each other and the JVC, against all
damage, loss, liability, diminution of value, or expense, including without
limitation reasonable attorneys’ fees and costs related thereto, suffered or
incurred by the other Party or the JVC arising from or in connection
with:
(A) any
misrepresentation or breach of representation or warranty by the indemnifying
Party set forth in this Agreement or in any exhibit, schedule or certificate
delivered pursuant hereto;
9
(B) any
breach or non-fulfillment by the indemnifying Party of any covenant, agreement
or other obligation set forth in this Agreement or in any exhibit, schedule
or
certificate delivered pursuant hereto;
(C) the
failure of the indemnifying Party to pay, perform or discharge any obligation
or
liability which arises out of, or is attributable or relates to, the business
conducted by the indemnifying Party on or prior to this Agreement’s execution
and not expressly assumed by the JVC; or
(D) any
claim, lawsuit or proceeding which arises out of, or is attributable or relates
to, the business conducted by the indemnifying Party on or prior to this
Agreement’s execution.
9.3 Indemnification
Procedure.
XXXXXXX
or EAU, as the case may be, shall notify the Party against whom indemnification
is sought promptly of any claim by any third party coming to its attention
which
may result in any liability hereunder on the other’s part. The indemnifying
Party shall be entitled at its own expense to conduct the defense of any such
third party claim with counsel of its own choosing, subject to approval by
the
party seeking indemnification (whose approval shall not be unreasonably
withheld), but the Party seeking indemnification shall be entitled to
participate in such defense with counsel of its own choosing and at its own
expense, provided that control of the defense will remain with counsel for
the
indemnifying Party if the indemnifying Party has acknowledged unequivocally
in
writing its obligation to indemnify the other in regard to the claims to be
defended against. Failure to give notice as provided herein shall not relieve
the indemnifying Party of its obligations hereunder, except to the extent that
the defense of any claim is prejudiced by such failure to give notice. The
indemnifying Party shall have the right to compromise or settle for money
damages only any claim giving rise to an obligation for indemnification
hereunder; any claim compromised or settled by the indemnified Party shall
not
be subject to indemnification hereunder.
ARTICLE
10
CONFIDENTIALITY
10.1 Confidential
Obligations.
XXXXXXX
and EAU each covenants and agrees, during the term of this Agreement and for
a
period of five (5) years thereafter, on behalf of its directors, officers,
employees and agents to maintain in strict confidence and not to make any
unauthorized use of any confidential information (the “Confidential
Information”)
received from the other Party and the JVC, as the case may be, pursuant to
this
Agreement. The Confidential Information shall be (A) disclosed in writing or
in
other tangible form and clearly marked as confidential at the time of
disclosure, or (B) disclosed orally or in other intangible form and clearly
indicated as confidential at the time of disclosure and, within thirty (30)
days
after such disclosure, followed up with a written notice stating the content
and
nature of such Confidential Information.
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10.2 Exceptions.
The
obligations in this Section 10 will not apply to any information which (A)
is or
becomes available to the public other than by breach of this Agreement by the
receiving Party, or (B) is or has been rightfully received by the receiving
party from a third party, or disclosed by the disclosing Party to a third party,
without any restrictions as to its use or disclosure, or (C) is or has been
independently developed by the receiving Party.
ARTICLE
11
GENERAL
PROVISIONS
11.1 Entire
Agreement.
This
Agreement and related agreements executed concurrently herewith supersede all
negotiations, commitments and writings prior to the date hereof pertaining
to
the subject matter of this Agreement and such related agreements. This Agreement
shall not be changed or modified in any manner, except by mutual consent in
writing of subsequent date signed by duly authorized representatives of both
Parties hereto.
11.2 Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the Parties hereto
and their respective successors and assignees.
11.3 Notices.
All
notices and other communications hereunder shall be in writing and shall be
deemed duly given and delivered if delivered by messenger, or mailed by
registered mail postage prepaid, return receipt requested, to the Parties at
the
lat known address of each Party (or at such other address for a Party as such
Party shall from time to time specify by like notice). Such notice shall be
deemed given on the date on which so delivered by messenger or on the third
business day following the date on which so mailed.
11.4 Interpretation
and Governing Law.
This
Agreement shall be interpreted in accordance with the plain English meaning
of
its terms and the construction thereof shall be governed by the laws of the
State of Delaware.
11.5 Arbitration
of Any Dispute.
Except
as expressly otherwise provided in this Agreement, any dispute arising out
of or
relating to the interpretation of any provisions of this Agreement or the
failure of any Party to perform or comply with any obligations or conditions
applicable to such Party pursuant to this Agreement (“Arbitral Claim”) shall be
settled by binding arbitration, according to the Federal Arbitration Act, 9
U.S.C., Section 1 et
seq,
and the
related Federal case law, inasmuch as this Agreement concerns transactions
involving interstate commerce. Arbitral Claims shall include, but are not
limited to, contract (express or implied) and tort claims of all kinds, as
well
as all claims based on any federal, state, or local law, statute, or regulation.
The Parties hereby waive any rights they may have to trial by jury in regard
to
arbitral claims. All arbitration matters shall be held and decided in accordance
with the
Commercial Arbitration Rules of the American Arbitration Association
(“AAA”),
but
without the administration, cost or supervision of AAA. In any arbitration,
the
burden of proof shall be allocated as provided in applicable law, and the
arbitrator(s) shall have the authority to award or grant legal, equitable and
declaratory relief to the same extent as if the case were brought in a civil
court.
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(A) The
place
of arbitration of any dispute shall be Salt Lake City, Utah. The arbitrator(s)
shall be selected as follows: The Parties shall jointly select one impartial
arbitrator in the event the dispute is less than $50,000.
In the event the Parties cannot agree on one arbitrator within ten (10) days,
or
the dispute is $50,000
or
greater, then each Party shall select an impartial arbitrator within the
following fourteen (14) days, and those two selected arbitrators shall select
the third arbitrator who will comprise a three-person panel for arbitration.
EAU
and XXXXXXX shall instruct such arbitrator(s) to render a determination of
any
such dispute within four (4) months (earlier, if possible) after the appointment
of the third arbitrator.
(B)Any
Award
rendered by the arbitrators shall be final and binding upon the Parties.
Confirmation and enforcement of the decision and award rendered by the
arbitrator or panel of arbitrators shall be binding and may be entered in any
court having jurisdiction thereof for confirmation and enforcement. Each Party
shall pay its own expenses of arbitration, and the expenses of the arbitrators
shall be equally shared between EAU and XXXXXXX, save and except, the
arbitrator(s), in addition to declaratory relief, preliminary and permanent
injunctive relief and compensatory damages, may award to the prevailing Party
reasonable, expenses, fees and costs of attorneys.
(C)This
Section 11.5 shall not prohibit a Party that may desire to seek and obtain
such
injunctive or other provisional remedies to prevent an anticipatory, threatened
or continued breach of this Agreement, through the arbitration procedure stated
herein or from seeking such injunctive relief from a court of competent
jurisdiction in the event such breach would cause irreparable harm to that
Party.
11.6 Severability.
In case
any one or more of the provisions or portions of provisions, of this Agreement
shall be deemed by any governmental authority or by the selected arbitrator(s)
to be invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions, or portions of provisions
contained herein shall not be in any way affected or impaired
thereby.
11.7 Force
Majeure.
If the
performance of this Agreement or any obligation hereunder is prevented,
restricted or interfered with by reason of force majeure, the Party so affected,
upon giving prompt notice to the other Party, shall be excused from such
performance to the extent of such prevention, restriction or interference;
provided, that the Party so affected shall use its best efforts to avoid or
remove such causes of non-performance and shall continue performance hereunder
with the utmost dispatch whenever such causes are removed; and provided,
further, that whenever it appears advisable to a Party hereto to consent or
stipulate to the entry of an arbitration Award or a judgment against it by
a
court of competent jurisdiction rather that incur substantial expense or great
inconvenience, the entry of such arbitration Award or judgment shall excuse
such
Party from performance hereunder to the extent that such arbitration Award
or
judgment forbids or restrains such performance.
12
11.8 Assignment
and Succession.
This
Agreement shall inure to the benefit of and be binding upon the Parties hereto
and their respective successors and assigns, but shall not be assignable by
any
Party other than a Person acquiring substantially all of its business and
assuming all of its obligation and liabilities, except with the written consent
of the other Party. In the event of any such assignment the transferor or
assignor shall remain obligated to perform its own obligations and in addition
shall be jointly and severally liable for the proper performance of the
obligations of the transferee or assignee pursuant to this
Agreement.
11.9 Section
Headings.
The
section headings contained in this Agreement are for reference purposes only
and
shall not affect in any way the meaning or interpretation of this
Agreement.
IN
WITNESS WHEREOF,
the
Parties hereto, intending legally to be bound have caused this Agreement to
be
duly executed as of the day and year first hereinabove written.
XXXXXXX
X. XXXXXXX, PhD
By: /s/
Xxxxxxx
X. Xxxxxxx, PhD
Xxxxxxx
X. Xxxxxxx, PhD
Title: President
ELECTRIC
AQUAGENICS UNLIMITED, INC.
By:
/s/ Xxxx
Xxxxxxx
Xxxx
Xxxxxxx
Title:
President
13
EXHIBIT
“A”
The
XXXXXXX Products
The
Marketed Products.
The
Marketed Products are described by name as follows:
The
Bio-N-Liven Answer®
The
Carbon Answer®
The
Cleaner Answer®
The
Disinfectant Answer®
The
Livestock Answer®
Mineral
Electrolyte Answer®
The
six
(6) above-listed Products are valued and priced at a minimum of Twenty-Four
Dollars ($24) per gallon and JVC shall not sell said Products for less than
Forty-Eight Dollars ($48) per gallon, wholesale.
The
Undeveloped Products.
The
Undeveloped Products are described as follows:
Remediation
Products
Cleaning
(household) Products
Small
Animal or Pet Products
The
Concept Products.
The
Concept Products are described as follows:
Human
Cleaning Products
Human
Health Products
IN
WITNESS WHEREOF,
the
Parties hereto, intending legally to be bound have caused this Agreement to
be
duly executed as of the day and year first hereinabove written.
XXXXXXX
X. XXXXXXX, PhD
By:
/s/ Xxxxxxx
X. Xxxxxxx, PhD
Xxxxxxx
X. Xxxxxxx, PhD
Title: President
ELECTRIC
AQUAGENICS UNLIMITED, INC.
By:
/s/ Xxxx
Xxxxxxx
Xxxx
Xxxxxxx
Title:
President
1
14
EXHIBIT
“B”
EXCLUSIVE
JVC Joint Venture Projects
| 1. |
Silver
application to EO and Aquagen
equipment
|
| 2. |
Blood
Dialysis machines (Xx Xxxxxxxx - Hospital Xxxx Group, US &
Europe
|
| 3. |
Poultry,
Beef, Dairy and Pork facilities (excluding processing
plants)
|
| 4. |
Remediation
(products only)
|
| 5. |
Agriculture
- all field treatment such as filed fungal treatment and
control
|
| 6. |
Xxxxxxx
- Human products including use for Buildings, Cleaning &
Sanitation
|
| 7. |
Wal-Mart
& Sam’s Club -- Buildings, Cleaning &
Sanitation
|
| 8. |
Proton
- family-size EO Water Equipment
|
| 9. |
Additional
subjects to be considered
|
IN
WITNESS WHEREOF,
the
Parties hereto, intending legally to be bound have caused this Agreement to
be
duly executed as of the day and year first hereinabove written.
XXXXXXX
X. XXXXXXX, PhD
By:
/s/ Xxxxxxx X. Xxxxxxx,
PhD
Xxxxxxx
X. Xxxxxxx, PhD
Title: President
ELECTRIC
AQUAGENICS UNLIMITED, INC.
By: /s/ Xxxx
Xxxxxxx
Xxxx
Xxxxxxx
Title:
President
15
