Exhibit 3.3
EXCLUSIVE LICENSE AGREEMENT
THIS NON-EXCLUSIVE LICENSE AGREEMENT ("Agreement") is made and effective
as of May 3, 2008 (the "Effective Date") by and between Microbial Technologies
Limited, a company registered in the United Kingdom with an address of 0
Xxxxxxxxx Xxx, Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxx ("Licensor"), and Organic Sales
and Marketing, Inc., a Delaware corporation with an address of 000 Xxxxxxxx,
Xxxxxxx, Xxxxxxxxxxxxx 00000 ("Licensee").
WHEREAS, Licensor is the owner of certain proprietary technology as more
fully described on Exhibit A (the "Licensed Technology");
WHEREAS, Licensor and Licensee wish to enter into this Agreement to grant
to Licensee to make, have made, distribute, market and sell products based on,
derived from or incorporating the Licensed Technology in the field of organic
based and/or natural cleaning products as more fully described on Exhibit A (the
"Covered Products");
NOW THEREFORE, in consideration of the mutual promises set forth below and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1. License
1.1 License. Subject to the terms and conditions of this Agreement, Licensor
hereby grants to Licensee a non-exclusive license to make, have made,
distribute, market and sell Covered Products in the Territory.
1.2 Restrictions. Except as expressly provided in this Agreement, Licensee
will not: (a) transfer, sell, license, sublicense, distribute or
commercially exploit the Licensed Technology or (b) modify, reproduce,
create derivative or collective works from, or in any way otherwise
exploit the Licensed Technology, in whole or in part.
1.3 Licensor's Retained Right to Market and Sell. Licensor reserves the right,
without obligation or liability to Licensee for payment of compensation or
otherwise, to market Covered Products. .
1.4 Licensee Marketing Efforts. Licensee will use its commercially reasonable
to develop and sell Covered Products throughout the term of this
Agreement.
1.5 Licensor Assistance. In consideration of Licensee's payment of the Annual
Fee (as defined in Section 2.1 below), Licensor will provide Licensee with
the following assistance in marketing and selling Covered Products:
DUTIES OF MICROBIAL TECHNOLOGIES LIMITED:
MICROBIAL TECHNOLOGIES LIMITED during the continuance of the Agreement
hereby agrees with the LICENSEE that it will at all times during the
continuance in force of this agreement, observe and perform the terms and
conditions set out in this Agreement and in particular MICROBIAL
TECHNOLOGIES LIMITED agrees:
1.5.1 To Safeguard the LICENSEE'S Rights:
To safeguard the rights hereby granted to the LICENSEE in
particular to prevent ...... :
MT will also assist in the proper labeling of product(s) in
conformity with US and State and local laws.
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1.5.2 To Assist Sales in the Territory:
Shall by personal agreement take such steps as necessary or
expedient to promote or assist the sale of the Products in the
Territory. To notify the LICENSEE of any person, firm, company
or other body in the Territory who appear to be a potential
purchaser of the Products as agreed between the parties.
1.5.3 MICROBIAL TECHNOLOGIES LIMITED undertakes to the LICENSEE that
it will attempt at all times keep sufficient stock of the
product on hand to satisfy two (2) month's forward sales
cover. In addition, MICROBIAL TECHNOLOGIES LIMITED warrants to
the LICENSEE that it shall generally maintain a sufficient
supply of stock levels or the Product adequate to allow the
LICENSEE to achieve forecast sales. Technical assistance for
registrations regarding any types of certifications (e.g.
Green Seal, EPA, "me too" registrations, Environmental Choice,
or others that may apply).
2. Fees and Reporting
2.1 Fees. Subject to the terms of this Agreement, Licensee will compensate
Licensor license fees, as allowed by the laws of FINRA and the state of
Delaware, equal to:
(a) one hundred thousand dollars ($100,000) per year (the "Annual
Fee") to be dispersed as follows: 1st Qtr $15,000.00, 2nd Qtr
$15,000.00, 3rd Qtr $30,000.00, 4th Qtr $40,000.00.
(b) five percent (5%) royalty on net sales of any MT product
formulations sold. The Royalty Fee will be paid as follows:
Quarterly, on all paid invoices.________. Fees will be paid in cash
and will become due and payable in the month following the calendar
quarter in which Licensee collects the revenues on which such Fees
accrue.
(c) at such time as Licensee has collected total revenue from sales
of Covered Products in excess of 5 million dollars ($_5,000,000.00),
Licensee will grant to Licensor a non-qualified stock option
agreement in the form attached as Exhibit B, which will (a) have an
exercise price equal to _____ percent (__%) of the fair market value
as warranted by law and duly voted by OSM, Inc. Board of Directors,
of Licensee's Common Stock on the date of grant and (b) vest and
become exercisable over a four year period at the rate of 25% of the
shares on the first anniversary of the date of grant and thereafter
at the rate of 25% on the last day of each successive one year
period, in each instance only if this Agreement remains in effect on
such date.
(d) Licensee will grant Licensor two hundred fifty thousand
(250,000) in stock options at an exercise price of one (1.00) dollar
per share to become exercisable over a four year period at the rate
of 25% of the shares on the first anniversary of the date of grant
and thereafter at the rate of 25% on the last day of each
Exclusive License Agreement - Page 3
successive one year period, in each instance only if this Agreement
remains in effect on such date.
2.2 Reporting. Licensee will provide Licensor with a highly confidential
quarterly report on or before the thirtieth (30th) day after the end of
each calendar quarter setting forth in reasonable detail the sales of
Covered Products during such quarter, including customer name, volume and
sales price by product number, and all other information necessary for
Licensor to calculate the Fees that have accrued for such quarter,
accompanied by payment in full of all such Fees. All reports shall be
returned to licensee upon termination of this agreement.
2.3 Audit Rights. Licensor or Licensor's designated agent will have the right,
upon reasonable prior notice, to audit Licensee's relevant books and
records at Licensee's principal place of business during normal working
hours to verify Licensee's compliance with the provisions of this
Agreement.
3. Term and Termination
3.1. Initial Term. This Agreement will commence on the Effective Date and
continue until May 3, 2018, unless earlier terminated in accordance with
this Agreement (the "Term").
3.2 Termination for Breach. Either party will have the right to terminate this
Agreement in the event that the other party has materially breached this
Agreement; provided, however, that no such termination will be effective
unless (i) the terminating party provides written notice to the other
party setting forth the facts and circumstances constituting the breach,
and (ii) the party alleged to be in breach does not cure such breach
within ten (10) business days following receipt of such notice. If a
breach, other than a breach for failure to make any payment due, is
curable, but such cure cannot be reasonably made within ten (10) business
days following receipt of such notice, the terminating party will not be
entitled to terminate the Agreement, if the party allegedly in breach,
within such ten (10) day period, presents a schedule to cure the breach,
commences curing such breach and thereafter diligently execute the same to
completion in accordance with the schedule.
3.3 Post Termination Obligations.
(a) Upon termination of this Agreement: (i) all fees due from Licensee
as of the date of termination will immediately be paid in full; (ii)
Licensee will destroy advertising or promotional materials, if any,
containing any reference to Licensor or the Licensed Technology; and
(iii) except as set forth in Section 3.4(b) below, Licensee will
cease any use of the Licensed Technology.
(b) Notwithstanding any other provision of this Agreement, following the
termination of this Agreement, Licensee will be permitted to sell
any Covered Products then in its inventory and to fulfill the terms
of customer agreements entered into prior to the effective date of
such termination.
4. Warranty; Disclaimers and Limitations of Warranties and Liability;
Indemnification,
4.1 Warranty. Licensor warrants that the Licensed Technology will not infringe
the patent, copyright, trade secret or other intellectual property right
of any third party. In case of a breach of the warranty set forth in this
Section 4.1, Licensor will, as its sole obligation to Licensee (other than
the indemnification obligations set forth in Section 4.5): (a) procure for
Licensee the right
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to continue to use the affected Licensed Technology or (c) if Licensor is
unable to do either of the foregoing on a commercially reasonable basis,
terminate the License with respect to the affected Licensed Technology.
4.2 Disclaimer of Warranties.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, (A) THE LICENSED
TECHNOLOGY IS PROVIDED AS IS AND AS AVAILABLE AND (B) TO THE MAXIMUM
EXTENT PERMITTED BY APPLICABLE LAW, LICENSOR DISCLAIMS ANY AND ALL
WARRANTIES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED
TO THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY, AND
FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE LICENSED TECHNOLOGY.
4.3 Exclusion of Liability.
EXCEPT FOR EACH PARTY'S OBLIGATIONS PURSUANT TO THE INDEMNIFICATION
PROVISIONS SET FORTH IN SECTION 4.5 TO REIMBURSE THE OTHER PARTY FOR THIRD
PARTY CLAIMS FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR
EXEMPLARY DAMAGES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW,
NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES ARISING OUT OF OR
RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY
INCLUDING NEGLIGENCE, AND EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
4.4 Limitation of Liability.
EXCEPT WITH RESPECT TO ITS OBLIGATIONS PURSUANT TO THE INDEMNIFICATION
PROVISIONS SET FORTH IN SECTION 4.5, EACH PARTY'S AGGREGATE LIABILITY FOR
ALL CLAIMS ARISING OUT OF OR RELATED TO THIS AGREEMENT WILL NOT EXCEED THE
FEES ACTUALLY PAID TO LICENSOR UNDER THIS AGREEMENT.
4.5 Indemnification Obligations.
Each party will indemnify, defend and hold the other party and its
stockholders, directors, employees and agents harmless from and against
all damages and expenses of any kind (including reasonable attorneys'
fees) ("Damages") incurred for third party claims arising out of or in
connection with (a) infringement by the indemnifying party of third party
intellectual property rights, except in each case to the extent that any
such damages arise out of any action by any indemnified party or (b) the
indemnifying party's breach of this Agreement or negligent or unlawful act
in its performance of this Agreement.
5. Intellectual Property
5.1 Ownership. Licensee acknowledges that, as between Licensee and Licensor,
Licensor owns all right, title and interest in all intellectual property
with respect to the Licensed Technology. Licensee understands and agrees
that its use of or access to any of the Licensed Technology in connection
with this Agreement will not create in it any right, title or interest, in
or to such property, and that all such use or access and goodwill
associated with any such use or access will inure to the benefit of and be
on behalf of Licensor.
5.2 Prosecution of Infringement. Licensor will have the initial right, under
its own control and at its own expense, and will use commercially
reasonable efforts, to prosecute any third party infringement of the
Licensed Technology. Each party will inform the other in writing promptly
upon becoming aware of any alleged infringement of the Licensed
Technology, setting forth in
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reasonable detail the nature of such alleged infringement and any evidence
of such alleged infringement. If within sixty (60) days after having been
notified or becoming aware of any alleged infringement, Licensor has
failed to commence prosecution of such infringement, Licensee will have
the right, under its own control and at its own expense, to prosecute such
infringement, and Licensee may, for such purposes, use the name of
Licensor as party plaintiff. Each party agrees to provide such reasonable
assistance requested by the other party in any action under this Section
5.2.Any recovery of damages by a party prosecuting any such infringement
will be applied first in satisfaction of any unreimbursed expenses and
legal fees of such party relating to such prosecution, and next toward
reimbursement of the other party for any legal fees and unreimbursed
expenses relating to such prosecution. The balance remaining from any such
recovery will be divided equally between Licensee and Licensor.
6. Confidentiality.
Each party understands and acknowledges that any proprietary or confidential
data or information, oral or written, relating to the other party's research,
development or business activities which is disclosed or otherwise made
available by the other party (collectively, "Confidential Information")
represent valuable confidential information entitled to protection as trade
secrets.
Each party will, with respect to the other party's Confidential Information:
(a) Keep confidential, not disclose and protect from unauthorized disclosure by
its employees and agents
(b) Secure and protect all copies of such Confidential Information in its
possession in a manner consistent with the steps taken to protect its own trade
secrets and Confidential Information, but not less than a reasonable degree of
care;
(c) Limit access to such Confidential Information to its employees who require
such access in connection with this Agreement and take appropriate steps to
assure such employees comply with its obligations hereunder.; and
(d) Not use such Confidential Information except for the purposes expressly set
forth in this Agreement.
7. Miscellaneous
7.1 Injunctive Relief. Licensee acknowledges and agrees that an impending or
existing violation of Sections 1.2 or 6 of this Agreement would cause
irreparable harm to Licensor, for which there is no adequate remedy at
law, and that Licensor will be entitled to obtain immediate injunctive
relief prohibiting such violation, in addition to any and all other
remedies and rights available at law or equity.
7.2 Mutual Representations and Warranties. Each Party represents and warrants
that (a) it is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization and has the necessary
power and authority to enter into and perform its obligations under this
Agreement, (b) this Agreement has been duly authorized, executed and
delivered by it and (c) its execution and delivery of this Agreement, and
the performance of its obligations hereunder, will not conflict with or
result in a violation, breach or default of any other agreement to which
it is a party or by which it is bound.
7.3 Independent Contractor. Licensor and Licensee are and will remain
independent contractors. The Agreement does not constitute a partnership.
Neither party is a franchisee, agent or legal representative of the other
for any purpose, and neither party has the authority to act for, bind or
make commitments on behalf of the other.
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7.4 No Assignment. Neither party may sell, transfer, assign, or subcontract
its rights or obligations under this Agreement without the express written
consent of the other party.
7.5 Amendments. No amendment, modification, or waiver of any provision of this
Agreement will be effective unless set forth in a writing executed by each
party. No failure or delay by any party in exercising any right or remedy
hereunder will operate as a waiver of any such right or remedy.
7.6 Force Majeure. Neither party will be liable nor deemed to be in breach of
its obligations hereunder for any delay or failure in performance under
this Agreement or other interruption of service resulting, directly or
indirectly, from acts of God, civil or military authority, act of war,
accidents, electronic, computer or communications failures, natural
disasters or catastrophes, strikes, or other work stoppages or any other
cause beyond the reasonable control of the party affected thereby.
7.7 Notices. Any notice to be given under this Agreement will be in writing,
will be deemed given upon receipt, and will be delivered in person, by
registered or certified mail, postage prepaid, return receipt requested,
or by overnight delivery service with proof of delivery, and addressed as
follows:
To Licensor: [Name]
Microbial Technologies Limited
0 Xxxxxxxxx Xxx, Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxx
To Licensee: Xxxxxx X. X. Xxxxxxxx
President
Organic Sales and Marketing, Inc.
000 Xxxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
7.8 Governing Law; Dispute Forum. This Agreement will be governed by and
construed in accordance with the laws of the American Arbitration
Association, will. have exclusive jurisdiction of any dispute arising
under this Agreement. The parties specifically agree that the body of law
known as the United Nations Convention on the International Sale of Goods
shall be inapplicable to this Agreement.
7.9 Entire Agreement; Severability. This Agreement, together with the
schedules, amendments, and other attachments, contains a full and complete
expression of the rights and obligations of the parties and supersedes any
and all other previous agreements, written or oral, made by the parties
concerning its subject matter. If any provision of this Agreement is held
by a court or arbitration panel of competent jurisdiction to be unlawful,
the remaining provisions of this Agreement will remain in full force and
effect to the extent that the parties' intent can be lawfully enforced.
7.10 Headings. The headings herein have been included solely for reference and
are to have no force or effect in interpreting the provisions of the
Agreement.
7.11 Survival. Sections 3.4, 4, 5 and 6 will survive any termination of this
Agreement.
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IN WITNESS WHEREOF, duly authorized representatives of the parties have
executed this Agreement under seal as of and effective the date first written
above:
Microbial Technologies Limited Organic Sales and Marketing, Inc.
By: /S/ ____________________ By: /S/ ____________________
Name: Xxxxxxx Xxxxx Name: Xxxxxx Xxxxxxxx
Title: Managing Director Title: President
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EXHIBIT A: LICENSED TECHNOLOGY/COVERED PRODUCTS
MICROBIAL TECHNOLOGIES
CLEANING RANGE
List of Products currently available:
1. All Purpose Cleaner
2. Bathroom cleaner (and limescale remover) for baths and showers
3. Kitchen and Hob Cleaner
4. Glass Cleaner
5. Air freshener (Odour Control)
6. Washing Up Liquid
7. Toilet cleaner (for toilet bowls, sanitises and clears iron and
limescale)
8. Laundry liquid
9. Laundry Powder
10. Fabric Conditioner
11. Stain Remover
12. Pre-Laundry Stain Remover
13. All Purpose Wipes
14. Disposal tablets
15. Biological Urinal cleaners
16. Biological Urinal blocks
In development:
1. 2-in-1 Laundry and Fabric Conditioner
2. Super Gentle Fabric Conditioner
3. Super Gentle Laundry Liquid
4. Baby Wipes
5. Stainless Steel Cleaner
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EXHIBIT B: FORM OF NON-QUALIFIED STOCK OPTION
2.1 c
Stock Options against total MT product formulations' annual sales
Targeted Sales Options
5 Million 25,000
10 Million 35,000
After 10 million we will re-negotiate.
