SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: March 21'st, 1997
ADVEN, INC.
(Exact name of registrant as specified in charter)
Washington 0-24262 91-1363905
Jurisdiction of Commission File I.R.S. Employer
Incorporation Number Identification
Number
3653 Hemlock Court, Reno, Nevada 89509
(Address of principal executive offices)
Registrant's telephone number: (702) 829-8812
Item 1. Changes in Control of Registrant
Management of the Company has not changed. However, the following
events have occurred resulting in the issuance of an aggregate of 3,749,666
shares of the Company's Common Stock. 3,199,666 of these shares were issued
pursuant to Regulation S (see "Item 9. Sales of Equity Securities Pursuant
to Regulation S") and the balance is to be issued to DIS International
(Marketing) Inc. pursuant to the Supply and Licensed Manufacturing Agreement
entered into by the Company on March 17, 1997 (see "Item 5. Other Events").
Prior to the issuance of the 3,749,666 shares, there were 1,720,001
shares issued and outstanding. Accordingly the 3,749,666 shares, when fully
issued, will represent approximately 68.6% of the issued and outstanding
shares of the Company's Common Stock. The three new shareholders will own
the following number of shares and percentage of issued and outstanding
shares of the Company's Common Stock:
Percentage of
Issued and Out-
Name No. of Shares Standing Shares
Vanuata International
Trust Company Ltd. 2,666,666 48.8%
Kennington Investments, Ltd. 533,000 9.7%
DIS International
(Marketing) Inc. 550,000 10.1%
The Company's management knows of no affiliations between the
foregoing entities or any arrangements between them with regard to the
election of directors or other matters.
Vanuata International Trust Company Ltd. is a trust organized under
the laws of Vanuata, whose trustee is Lindsay Barret.
Kennington Investments, Ltd. is a corporation incorporated under the
laws of the Bahamas whose principal officers are Robert Montgomery/President
and M.K. Parcell/Secretary.
DIS International (Marketing) Inc. is a corporation organized under
the laws of Barbados whose sole officer is Margaret Bruce/President.
Item 2. Acquisition or Disposition of Assets
On March 17, 1997, The Company entered into a Supply and Licensed
Manufacturing Agreement with DIS International (Marketing) Inc. (see "Item 5.
Other Events").
There is no prior relationship between the Company, any of its
affiliates, directors or officers, or any associates of any of the Company's
officers or directors and DIS International (Marketing) Inc.
Item 5. Other Events
On March 17, 1997, ADVEN, Inc. (the "Company") entered into a Supply
and Licensed Manufacturing Agreement (the "Agreement") with DIS International
(Marketing) Inc., a Barbados corporation ("DIS"). Pursuant to the Agreement,
the Company received the exclusive right to formulate, manufacture, sell,
distribute and put into use an oil-absorbent urethane foam (currently marketed
under the name Zorbolite) in Australia and New Zealand.
This oil-absorbent urethane foam ("Zorbolite") has been blended with
various additives and concentrates through a process that changes the
structure of the foam, allowing the foam to absorb hydro carbon liquids.
Zorbolite has many potential industrial and consumer applications related
to cleaning oil based pollutants.
Pursuant to the Agreement, the Company is required to purchase the
materials required to manufacture Zorbolite from DIS or its affiliates.
Commencing in the first quarter of 1998, the Company is required to purchase
a minimum of $50,000 of materials per quarter.
The term of the Agreement is five years; however, the Company has the
right to renew the Agreement for successive five year periods, provided the
Company is not in default under the Agreement at that time. DIS has the right
to terminate the Agreement upon 60 days written notice in the event that the
Company fails to meet its obligations under the Agreement or acts in a manner
prohibited under the Agreement. The Company has a right to cure any
deficiency within the 60 day period. The Company's principal obligations
under the Agreement are to pay the balance of the licensing fee ($500,000)
and purchase minimum quotas of materials from DIS and to manufacture and
exploit the sale and distribution of Zorbolite in the Territory. DIS also has
the right to terminate the Agreement upon the happening of certain events
related to the bankruptcy or insolvency of the Company.
As consideration for the Agreement, the Company has paid $500,000 and
is obligated to pay an additional $500,000 within the next six months. The
Company is also obligated to issue 550,000 shares of its restricted common
stock to DIS within the next 30 days. The amount and terms of the foregoing
consideration were negotiated between the Company and DIS.
The initial $500,000 was paid from the proceeds of the Company's
Regulation S offering (see "Item 9. Sales of Equity Securities Pursuant to
Regulation S"). The Company plans to use the balance of the proceeds from
the Regulation S offering to purchase equipment and hire personnel.
Management plans to raise the remaining $500,000 required to be paid under the
Agreement from the sale of securities. No assurance can be given that the
Company will be able to raise sufficient funds.
Item 7. Financial Statements and Exhibits.
Because the transactions are not a purchase of Assets, but rather the rights
to market and sell a product in a certain territory, the company believes
the financial statements for DIS International are not applicable.
Exhibits
1). Supply and Licensed Manufacturing Agreement.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
On March 13, 1997, the Company sold an aggregate of 2,666,666 shares
of its Common Stock to a foreign company for an aggregate of $1,000,000.
The Company issued an aggregate of 533,000 shares to another foreign entity
as finders fee related to the aforementioned $1,000,000 sale.
All of the foregoing shares were issued to entities that are not
"U.S. persons" as that term is defined under Regulation S and were issued
pursuant to the exemption from registration provided by Regulation S.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADVEN, INC.
By: Henri Hornby
Henri Hornby/President
Dated: March 21'st, 1997
EXHIBIT 1)
SUPPLY AND LICENSED MANUFACTURING AGREEMENT
THIS AGREEMENT made as of the 21'ST day of March, 1997
BETWEEN:
DISINTERNATIONAL (MARKETING) INC., a body corporate duly incorporated
pursuant to the Laws of Barbados.
("DIS")
OF THE FIRST PART
AND
ADVEN, INC., a body corporate duly incorporated pursuant to the Laws
of Washington State.
("Adven")
OF THE SECOND PART
WHEREAS:
A. DIS is engaged in the manufacture and sale of the Subject Matter
referred to in this Agreement;
B. Adven is desirous of acquiring from DIS the exclusive right to formulate
and market the Subject Matter in the Territory, using the Licensed Rights.
NOW THERFFORE IN CONSIDERATION Of the Premises, mutual covenants and the sum
of $10.00 the parties hereto agree as follows:
I DEFINITIONS
1.1 "Subject Matter" means:
(a) the oil-absorbent urethane foam that has been blended with
various additives and concentrates through a process that
changes the structure of the foam and which process allows
the resulting foam to absorb hydro carbon liquids, which
includes the products currently marketed under the name
Zorbolite, and
(b) the related composition for use in hydroponics which is in
the testing stage of being developed for market.
1.2 "Licensed Rights" means the Licensed Applications and Technical
Information and process as in this Agreement defined.
1.3 "Licensed Applications" means the application for patent now owned by
DIS in respect of the Subject Matter.
1.4 "Technical Information" means any trade secrets, research or
development data and know-how relating to the Subject Matter whether or not
patentable, whether existing at the date hereof or subsequently developed,
and may include engineering or scientific information, processes and formulae;
manufacturing data and procedures; machinery, plant, apparatus and equipment
design; reports, drawings, specifications and blueprints relating to any
method, product apparatus or articles used in producing the Subject Matter.
1.5 "Territory" means Australia and New Zealand.
1.6 All references herein to currency or dollars means lawful money of
the United States of America.
1.7 "Sub licensee" means any person who has been granted a sub license
by ADVEN of all or any part of the rights under this Agreement.
1.8 "Equipment" means the equipment and machinery which is designed and
manufactured by DIS or its affiliates for the specific purpose of fulfilling
the process.
1.9 "Materials" means the materials and ingredients that are used in
producing the Subject Matter.
2 GRANT OF LICENSE
2.1 DIS grants to Adven, subject to the conditions set forth in this
Agreement, an exclusive, nonassignable, non-saleable (except as noted herein)
license for the Territory to the Licensed Rights and the exclusive right to
formulate, manufacture, sell, distribute, and put into use in the Territory,
the Subject Matter using the Materials and embodying the Licensed Rights.
2.2 DIS agrees that it will not produce, market or sell the Subject Matter
in the Territory or sell the Subject Matter to any person outside the
Territory where, to its knowledge, all or any part of such Subject Matter
will be imported to the Territory for resale or use. DIS further agrees that
any agreements entered into by it or its affiliates, (within the meaning of
the Securities Act (British Columbia)) providing for the production, marketing
or sale of the Subject Matter in any part of the world will contain similar
restrictions. DIS agrees that at its expense it will take such steps as may
be necessary from time to time to enforce the provisions of such agreements
so as to ensure the exclusivity of the rights granted to Adven hereunder.
2.3 Adven agrees that it will not produce, market, sell or deliver the
Subject Matter outside the Territory or sell the Subject Matter to any person
inside the Territory where, to its knowledge, all or any part of such Subject
Matter will be exported outside of the Territory for resale or use. ADVEN
further agrees that any agreements entered into by it with Sub licensees will
contain similar restrictions. Adven agrees that at its expense it will take
such steps as may be necessary from time to time to enforce the provisions of
such agreements for the benefit of DIS.
3 SUPPLY OF MATERIALS AND EQUIPMENT, MINIMUM PURCHASES
3.1 During the term of this Agreement DIS or an affiliate designated by
it shall supply Adven wit h its requirements of Materials necessary for the
formulation and manufacture of the Subject Matter. The price for Materials
supplied to Adven by DIS hereunder shall be governed by the ruling DIS price
list. Payment for Materials supplied by DIS or a DIS affiliate Shall be made
by ADVEN on terms to be arranged with such party. DIS shall give ADVEN at
least 60 days prior written notice of any increase in prices, to be effective
for orders for Materials placed by Adven after the expiry of such 60 day
period, provided however that the purchase price payable by Adven and the
terms of payment shall in no circumstances be greater or less favorable to
ADVEN than those made available to any other licensee of DIS purchasing
comparable quantities of Materials as Adven. Adven shall purchase from DIS
exclusively all of its requirements of Materials. The ruling price list shall
contain pricing which reflects no greater than 30 % mark-up on costs. ADVEN
shall include a provision in any sub license agreements requiring that sub
licensees purchase all Materials required to formulate and manufacture the
Subject Matter from DIS or Adven.
3.2 Upon receipt by DIS of the deposit payment referred to in subsection
7.2, DIS shall sell to Adven and Adven shall purchase from DIS the Equipment
required to formulate and manufacture the Subject Matter on terms as to
payment and delivery which shall be set out in a purchase agreement to be
entered into between the parties.
3.3 ADVEN agrees that it will purchase from DIS, during each calendar
quarter throughout the term of this Agreement commencing with the first
quarter of 1998, a minimum of Materials at the prices calculated in accordance
with the provisions of this Agreement. Adven's minimum purchase obligation
during any single year of this Agreement shall be calculated on a cumulative
basis and any excess over the minimum purchase requirement during any calendar
quarter shall be credited against the minimum for the subsequent quarters in
that year. If the aforesaid value of purchases of Materials am not made by
ADVEN in any calendar quarter, DIS shall have the right thereafter,
exercisable upon 30 days prior written notice to ADVEN, to terminate this
Agreement. DIS way in writing notify ADVEN that it elects to waive the
minimum pursue, requirement for any calendar quarter and elects to maintain
this Agreement in effect notwithstanding such shortfall, provided however that
the maintenance of this Agreement in effect by DIS in such a circumstance
shall not impair any right of DIS to terminate or be construed as a waiver in
the event of any further breach or default in the purchase of minimum
quantities of Materials in any future calendar quarter.
4 ACCESS TO TECHNICAL INFORMATION
4.1 Subject to subsection 4.2, DIS hereby grants to Adven at the time of
the execution of this Agreement and from time to time thereafter access to the
Technical Information of DIS through those employees of Adven designated by
it who have signed an agreement with DIS to keep secret and confidential the
Technical Information of DIS as shall not be generally known to a person
skilled in the art, together with the right to inspect the operations of DIS
relating to the Subject Matter. Such agreement shall permit the, disclosure
of such Technical Information to employees of Sub licensees of Adven who have
signed a confidentiality agreement with Adven and DIS on similar terms.
4.2 At the time of receipt of the final payment to be made by Adven
pursuant to subsection 7.2 hereof, DIS agrees to provide to Adven one copy of
the reports, drawings, specifications of DIS relating to any methods product,
apparatus or articles used in production the Subject Matter.
(a) DIS will train one or more of the Adven's representatives in the
set-up and operation of the plant, Equipment and manufacturing process, at
DIS's premises for a minimum of five (5) working days and a maximum of ten
(10) working days at a mutually convenient time. Adven shall bear all
expenses of its representatives, including any expenses relating to the
travel, room and board of its representatives.
(b) DIS agrees that following the delivery to Adven's facility of the
Equipment, it will make available to Adven, at Adven's facilities, technical
personnel of DIS for a minimum of five (5) working days and a maximum of ten
(10) working days to instruct Adven in the operation of a plant the Equipment
and processes applicable to the production of the Subject Matter, as per
Schedule "A". DIS shall bear all expenses associated with the provision of
such technical personnel during such period, including any expenses related
to the travel, room and board of its personnel . DIS will provide Adven with
such further training and technical support as Adven shall request from time
to time, which training and support will be at Adven's expense.
(c) All training for the employees of the Sub licensees shall be conducted
by the trained personnel of Adven.
4.3 DIS agrees to disclose to Adven the Technical Information of DIS now
in its possession and which may hereafter come into its possession during the
term of this Agreement and which DIS shall have the right to disclose to
others (it being acknowledged by DIS that it currently has in its possession
and the right to disclose aft Technical Information developed to date).
5. TERM
5.1 The term of this Agreement shall be a period of five (5) years
commencing on the signing of this Agreement. Adven shall have the right to
renew this Agreement for successive periods of five years upon written notice
sent to DIS not less than 90 days prior to the end of the term or extended
term, provided that Adven is not at such time in default of its obligations
under this Agreement.
6 EXPLOITATION OF LICENSE
6. Adven covenants with DIS that it will, directly or through its Sub
licensees, with all reasonable dispatch manufacture, sell, distribute and to
use its best efforts to promote the Subject Matter in the Territory and will
use its best efforts to continue and increase the sale of the Subject Matter
throughout the Territory during the continuance of this Agreement.
7 LICENSE FEE
7.1 Adven shall issue and deliver or transfer to DIS fully paid and
non-assessable shares with restricted legends under rule no. 144 in the
capital stock of Adven, which shares shall constitute 10% of all the issued
and outstanding shares, on a fully diluted basis, of that company at the time
of such issue or transfer. Such shares will be delivered to DIS within thirty
(30) days of the date of this Agreement. Adven currently trades over the
counter and Adven represents that it is current and in good standing in its
filings with all regulatory authorities.
7.2 Adven agrees to enter into a purchase agreement for the Equipment and
to pay to DIS a license fee of $1,000,000 payable as to $500,000 as of the
date of this Agreement which amount is non-refundable and as to $500,000
within six months of the date of this Agreement.
8 RECORDS
8.1 Adven agrees to keep full, accurate and complete records and books of
account relating to its operation under this Agreement for the accurate
determination of Materials consumed in the manufacture of the Subject Matter
and sales of the, Subject Matter under this Agreement. All of the records
and books of account of Adven necessary for the determination of the Materials
consumed in the manufacture of the Subject Matter and sales of the Subject
Matter under this License shall be open at all reasonable times during
business hours during the term of this Agreement for inspection and audit by
duly authorized independent chartered accountants designated by DIS to
ascertain the accuracy of the records maintained by Adven. Such right of
inspection may be exercised on the giving of not less than 10 business days
prior notice and may not be exercised more than four times in any calendar
year. The chartered accountants shall be entitled to make notes and copies
of any information contained in those records and accounts and to report them
to DIS. All the records and books of amount of Adven necessary for the
determination of the consumption of Materials and sales of the Subject Matter
and all related documents be retained for a period of six years after their
origin unless at the end of such period there is a dispute with respect to the
consumption and sales to which such record relate, in which such case such
records shall be retained until the dispute has been settled.
9 CONFIDENTIALITY
9.1 Adven acknowledges the proprietary right of DIS to Technical
Information disclosed to it pursuant to this Agreement and covenants with DIS,
subject to subsection 9.2 below, to keep confidential and secret all Technical
Information disclosed to it pursuant to this Agreement.
9.2 Adven agrees to maintain all such confidential and proprietary
information in confidence until it is publicly announced and made publicly
available by DIS. Adven shall limit disclosure of such information only to
its employees or employees of its Sub licensees having the need to know for
the purpose of formulating, manufacturing, selling and distributing the
Subject Matter under this Agreement.
9.3 The covenant of Adven in this Section 9 shall survive the termination of
this Agreement and shall enure in respect of and for as long as the
information shall not be generally known to ones skilled in the art.
10 IMPROVEMENTS
10.1 If Adven shall discover or invent an improvement to the Subject
Matter or the Technical Information during the terms of this Agreement, Adven
agrees promptly to disclose the same or cause the same to be disclose to DIS
and to furnish to DIS all information pertaining thereto, including any
resulting Technical Information. At DIS's option, Adven agrees to assign or
cause to be assigned to DIS any discovery or invention or modification or to
assist DIS, at DIS's expense, to secure letters patent covering such discovery
or invention or modification in any or all countries required by DIS, which
in any event shall include the countries comprising the Territory. In
connection therewith, DIS shall furnish to Adven all pertinent information
and have executed any patent applications, assignments or other instruments
necessary or desirable, without expense to Adven. Any discovery or invention
as to which DIS shall have exercised its option as referred to above shall be
the property of DIS, and such discovery or invention and any letters patent
issued thereon shall be included in the license granted under this Agreement
and shall fall under the same confidentiality requirements.
10.2 Adven shall use its best efforts to cause its employees to disclose
any discovery or invention made or developed by them during the term of this
Agreement and falling within the terms of subsection 10.1 and to assign such
discovery or invention to DIS as provided, it being understood that Adven
shall not be obligated to pay any amount to its employees for such purpose.
10.3 DIS agrees that the terms of this Agreement shall extend to include
any and all future patent applications, inventions, improvements and products,
processes and manufacturing techniques relative to the articles falling within
the scope of the Licensed Rights.
11 INFRINGEMENT
11.1 If either party shall have knowledge that the rights under the
Licensed Applications are being infringed, such knowledge shall be promptly
transmitted to the other party, and DIS shall have the exclusive right to
commence action to prevent infringement or further infringement and to
prosecute the action, and for that purpose DIS may with the consent of Adven
add Adven as a party to any action relating to infringement in the Territory.
Adven covenants with DIS to cooperate with DIS at the expense of DIS, in the
prosecution of any infringement claim commenced by DIS. Provided that if DIS
shall fail to institute infringement proceedings within 90 days of a request
so to do, then Adven shall have the right to commence action for an
infringement and to join DIS as a party to such action, in which case Adven
shall bear the cost of such action.
12 IMPEACHMENT
12.1 DIS shall defend at its own cost every action, suit or proceeding
instituted for the impeachment or declaration of infringement of the Licensed
Application, which could have a material affect on the rights of Adven
hereunder provided that, if DIS shall decide not to defend any action, suit
or proceeding then Adven shall be entitled but shall not be bound to defend
such action, suit or proceeding for and behalf of DIS and at the expense of
DIS.
13 CANCELLATION AND TERMINATION
13.1 Subject to subsection 13.3 this Agreement shall be subject to
cancellation by DIS in the following events:
(a) if Adven shall fail to do any of the acts or things by it agreed to
be done at the times and in the warmer provided; or
(b) Adven shall do any act or thing prohibited under the terms of this
Agreement;
provided, however that if DIS intends to cancel this Agreement pursuant to
this subsection, DIS shall give Adven 60 days notice in writing of Adven's
default or omission constituting grounds for cancellation, and of its
election to cancel this Agreement. If within the 60 days after receipt of
notice Adven shall cure the deficiencies or omission fully, and makes good
its default or omission, or if such deficiency or omission, in the opinion of
DIS, requires more that 60 days to cure and Adven has commenced and is
diligently pursuing steps to cure such breach, the cancellation notice shall
be without force or effect. If the omission or default, specified in the
notice is not cured within the 60 day period or if such deficiency or
omission in the opinion of DIS reasonably requires more than 60 days to cure
and has not commenced and is not diligently pursuing steps to cure such
breach then this Agreement and the rights under it shall become finally
terminated.
13.2 Notwithstanding the provisions of subsection 13.1, DIS shall have the
right to terminate this Agreement at any time:
(a) if Adven shall fail to make any payment hereunder on account of the
purchase of Materials and Equipment or on account of training services when
due and in the manner stated and such failure shall continue for sixty (60)
business days following receipt by Adven of notice of non-payment;
(b) on or after the filing by Adven of an assignment in bankruptcy; or
(c) on or after Adven is declared bankrupt or insolvent or if any
proceeding for a compromise with creditors should be instituted by or against
Adven which is not dismissed within 75 days; or
(d) forthwith if a receiver or other custodian (permanent or temporary) of
Adven is appointed by instrument or by a court of competent jurisdiction or if
any proceeding for a compromise with creditors should be instituted by or
against Adven which is not satisfied, lifted, vacated or dismissed within
seventy-five (75) days or if all or substantially all of the assets of Adven
are seized by an order of any court, administrative body, tribunal or similar
authority;
(e) on or after the institution by Adven or any assignment or attempted
assignment for the benefit of creditors; or
(f) on or after the institution by Adven of any proceeding for the
winding up of its business.
13.3 DIS shall not, by reason of the termination of this Agreement in
accordance with this Section 13 be liable to Adven for compensation,
reimbursement or damages on account of the loss of prospective profits on
anticipated sales or on account of expenditures, investments, leases or
commitments in connection with the business or goodwill of Adven or otherwise.
13.4 In the event of termination, Adven shall not be relieved of its
obligation to pay for Equipment or Materials that have been ordered by or
delivered to Adven or in respect of any training services provided by DIS to
Adven or its Sub licensees. Adven may continue to sell such stock on hand
for a period of 120 days following termination.
13.5 This agreement may be terminated at the option of Adven by the giving
of written notice to DIS in the following events:
(a) forthwith if DIS becomes insolvent or makes a general assignment for
the benefit of creditors or if a petition in bankruptcy is filed against DIS
and is not discharged within twenty (20) business days of such filing and
thereafter diligently contested or if DIS is adjudged bankrupt or insolvent;
or
(b) forthwith if a receiver or other custodian (permanent or temporary) of
DIS is appointed by in instrument or by a court of competent jurisdiction or
if any proceeding for a compromise with creditors should be instituted by or
against DIS which is not satisfied, lifted, vacated or dismissed within
seventy-five (75) days or if all of substantially all of the assets of DIS
are seized by an order for any court, administrative body, tribunal or similar
authority; or
(c) upon not less than sixty (60) days written notice if DIS is in default
under or in breach of any material covenant on its part contained herein and
DIS fails to cure such default or breach within the sixty (60) days notice
provided, however, that if DIS commences to take steps to cure such default
within sixty (60) days of the receipt of written notice, such default shall
not operate to permit a termination of this Agreement if it is cured within a
reasonable time thereafter.
13.6 In the event of cancellation or termination, in accordance with the
terms of this Agreement, all Technical Information supplied by DIS shall
immediately revert back to the ownership of DIS and shall be physically
returned to DIS at Adven's expense. DIS requires that sub license agreements
entered into by Adven with Sub licensees include comparable provisions.
14 SUB LICENSES
14.1 Adven shall have the right to give and get sub licenses of
all or any part of its rights, under this Agreement provided all Materials
and Equipment required by the Sub licensee to formulate and manufacture the
Subject Matter shall be purchased exclusively through Adven from DIS on terms
to be agreed to between Adven and DIS and Adven covenants with DIS to
indemnify DIS in respect of the obligation of the Sub licensee to make all of
such payments to Adven or directly to DIS and, will include a provision in
sub license agreements requiring Sub licensees to observe and perform the
confidentiality provisions of this Agreement.
14.2 The Parties acknowledge that certain Sub licensees may, as a condition
of entering into sub licensing arrangements with Adven, require assurances
that such sub licensing arrangements will not be automatically terminated as
a result of a termination of this Agreement by DIS. DIS agrees that it will,
upon the request of Adven and provided such sub licensing arrangements are
not less favorable to DIS (having regard to the products and territory covered
thereby) than the of this Agreement, enter into a non-disturbance agreement
with such Sub licensee agreeing that a termination of this Agreement by DIS
will not result in an automatic termination of such sub licensing arrangements
and such sub licensing arrangements shall continue for the benefit of DIS and
such Sub licensee.
15 RIGHTS AND OBLIGATIONS
15.1 Any cancellation or termination by DIS as provided in this Agreement
after the terms laid out in subsections 7.1 and 7.2 are fulfilled shall not
in any way operate to deny any of DIS's rights or remedies either at law or
in equity, or to relieve Adven from any obligation to pay any amounts payable
hereunder or from any obligation accrued prior to the effective date or
termination or cancellation.
16 QUALITY AND PROCESS CONTROL
16.1 Adven shall, at its own cost:
(a) operate the Equipment and manufacturing facilities in accordance with
all protocols and instructions specified by DIS, as modified from time to
time;
(b) operate its manufacturing facilities in accordance with all
applicable laws and regulations including those concerning health,
cleanliness, safety and environmental pollution;
(c) ensure that all Materials and ingredients utilized are in accordance
with all protocols and instructions specified by DIS as well as following its
own protocols to ensure their compliance with applicable laws and regulations.
16.2 Under the terms of this Agreement it is the sole right of DIS to
stipulate reasonable standards for quality control and it is the obligation
of Adven to ensure that the standards of quality control are implemented and
maintained. Adven shall, at its own cost make available to DIS all quality
and production records relating to the Subject Matter requested by DIS from
time to time.
16.3 DIS shall be entitled to send representatives to Adven's Sub
licensee's facilities at all reasonable times on not less than 10 business
days prior notice, for the purpose of verifying Adven's or Sub licenses
compliance with this Section.
17 TRADEMARKS AND LOGOS
17.1 Adven shall cause all packaging for the Subject Matter, catalogues,
price lists and similar documents relating to Subject Matter to be
conspicuously marked with such trademarks or logos or other identification as
DIS may from time to time agree with Adven. Adven may also affix its own
trademarks to such items within the Territory.
17.2 Outline samples of all packaging to be used for Subject Matter shall
be delivered to DIS indicating positioning and style of the trademarks, logos
or other identification prior to the use of such packaging.
17.3 Adven to comply with all reasonable instructions issued by DIS
relating to the in which DIS's trademarks and logos and other identification
shall be used.
17.4 DIS grants to Adven the right and authority during the term of this
agreement to use the name "Zorbolite" and/or any other trademark agreed for
use in accordance with the provisions of subsection 18.1 upon and in relation
to the Subject Matter in the Territory. DIS undertakes, if requested by Adven
to file and prosecute at DIS's expense an application for registration of
Zorbolite or one of the other trademarks to be used (as designated by Adven)
in the countries comprising the Territory and, if required by law, for
registration of Adven as a registered user of such trademark.
18 INDEMNITY
18.1 Adven shall be solely liable for all matters arising out of the
exercise of its rights under this Agreement and Adven shall indemnify and
hold harmless DIS, its officers, directors, representatives, agents and
employees fare and against all direct and indirect loss, costs, damages and
expenses, including legal fees, incurred by DIS or any of its officers,
directors, representatives, agents or employees arising out of the exercise
of such rights including, but without limitation, those arising from or out
of the manufacture and sale of the Subject Matter by Adven, its sub licensees,
or their customers.
19 GOVERNING LAW AND DISPUTED
19.1 This Agreement shall be governed and construed according to the laws
of the Province of British Columbia and any controversy or claim arising out
of or relating to this Agreement shall be determined in accordance with the
laws of the Province of British Columbia.
19.2 Any controversy or claim arising out of or relating to this Agreement,
or in respect of any defined legal relationship associated therewith or
derived therefrom, will be determined by arbitration. Such arbitration shall
be conducted in accordance with the UNCITRAL Arbitration Rules in effect on
the date of this Agreement. The appointing authority shall be the British
Columbia international Commercial Arbitration Centre. The case shall be
administered by the British Columbia International Commercial Arbitration
Centre in accordance with its "Procedures for Cases Under the UNCITRAL
Arbitration Rules". The place of arbitration shall be Vancouver, British
Columbia, Canada.
19.3 Notwithstanding the foregoing Adven acknowledges that a breach of its
obligations relating to formulation and process confidentiality contained
herein would cause irreparable harm to DIS and that DIS's remedies at law or
in damages would be inadequate and consents to the granting of injunctive and
other provisional measures by the arbitrator or any court of competent
authority as a remedy for any such breach.
20 INSURANCE
20.1 Adven shall maintain such insurance as DIS may reasonably require at
its own cost with a reputable insurer, either by way of separate insurance
policies or by endorsements to Adven's existing insurance policies.
20.2 The terms of such insurance's policies must be satisfactory to DIS,
Certificates of all such insurance shall be supplied to DIS prior to the
commencement of manufacturing of the Subject Matter. Such insurance policies
may not be changed, amended, canceled or allowed to lapse without prior
written approval of DIS. Any deductibles applicable under such insurance
policy shall be borne by DIS.
20.3 Without limiting the generality of the foregoing, the insurance which
Adven shall provide hereunder in the event that Adven is directly involved in
the formulation, production, marketing and sale of the Subject Matter shall
include, but shall not be limited to comprehensive general liability
insurance providing for a single combined limit of 10,000,000 Australian
dollars for each occurrence or accident.
20.4 Without limiting the generality of the foregoing, Adven shall in its,
sub license agreements require each of its Sub licensees to maintain general
liability insurance providing for a combined single limit of 10,000,000
Australian dollars for each occurrence or accident.
20.5 All insurance policies provided hereunder shall, to the extent
possible under the laws and insurance practices in the Territory, name DIS as
a co-insured and contain a cross-liability and subrogation clause satisfactory
to DIS, acting reasonably.
21 NON-COMPETITION
21.1 Adven agrees that for the duration of this Agreement and for a period
of five (5) years following the expiration of this Agreement, any termination
of this Agreement by DIS, or any termination of this A Agreement by Adven
other than termination pursuant to subsection 13.5(a) it will not, and it
will provide in its agreements with Sub licensees that such Sub licensees
will not make, sell, distribute or put into use or be directly or indirectly
engaged or be interested in the making, selling, distributing, or putting
into use any items that compete with the Subject Matter.
22 WARRANTIES AND COVENANTS
22.1 If DIS determines, in its sole discretion, to proceed to obtain a
patent in any jurisdiction based upon the Licensed Applications, DIS shall
within 12 months of the initial filing of the Licensed Applications, but in
any event prior to any materials included in such Licensed Applications
becoming public, make a patent application covering the same inventions in
the countries comprising the Territory and will vigorously prosecute such
application. The costs and expenses of making and prosecuting such
application shall be borne by DIS. If such application is made, this
Agreement shall be amended to the extent necessary to grant to Adven exclusive
license to utilize such patent or patents in the Territory.
22.2 Adven covenants with DIS that it will not during the subsistence of
this Agreement raise or cause to be raised any questions concerning or any
objection to the validity of any claim in the Licensed Applications, or in
any resulting licensed or to any process, trade or manufacturing secret, on
any grounds whatsoever, and further agree not to aid others in doing so.
22.3 DIS represents and warrants to Adven as follows:
(a) none of the execution and delivery of this Agreement, the
sale and delivery of the Equipment and the Materials, the
grant of the licenses herein contained or the performance by
DIS of its other obligations hereunder violates, breaches or
constitutes a default under the Articles or By-Laws of DIS,
any agreement to which DIS or its affiliates is a party or may
be bound or any law, rule or regulation applicable to DIS or
its affiliates;
(b) DIS is the sole owner of the Licensed Rights and has not
previously disclosed the Licensed Rights to any person other
than as specified and, in each such case, such party has
agreed to maintain the Licensed Rights as confidential on
terms similar to those contained in this Agreement;
(c) the use of the Licensed Rights by Adven pursuant to this
Agreement, the formulation, production sale and marketing of
the Subject Matter by Adven or its Sub licensee and the use of
the licensed trademarks by Adven or its Sub licensee does not
and will not violate or infringe the copyright, patent, trade
secrets or other proprietary rights of any person;
(d) no party has commenced or threatened to commence legal
proceedings against DIS alleging that any of the use by DIS
of the Licensed Rights, the manufacture and sale by DIS of
the Subject Matter or the license granted by DIS under this
Agreement violates or infringes the copyright, patent, trade
rights or other proprietary rights of any person.
(e) the Equipment to be sold and delivered by DIS to Adven or its
affiliates pursuant to this Agreement is the specified
Equipment, designed and manufactured for the fulfilling of
the process. All such Equipment will be specified and handled
under separate contract. Any other necessary Equipment would
be the responsibility of Adven (list to be supplied).
(f) the Technical Information to be provided to Adven hereunder
includes all information required by Adven to enable it to
produce the Subject Matter; and
(g) the Subject Matter when produced in accordance with the
Technical Information, using the Materials and Equipment
supplied by DIS, will have the absorption efficiency and
characteristics specified in the Inchcape Testing results
following American Standard Testing Methods.
22.4 DIS hereby agrees to indemnify and hold Adven harmless from and
against any and an costs, losses, damages, liabilities and expenses including,
without limitation, legal fees, which may be suffered or incurred by Adven as
a result of the breach by DIS of any of the representations, warranties or
covenants of DIS contained in this Agreement.
22.5 Notwithstanding anything above to the contrary, the maximum aggregate
amount of money damages for which DIS may be liable to Adven under this
Agreement, resulting ftom any cause whatsoever, shall be limited to the
amount of $1,000,000.
23 MISCELLANEOUS
23.1 Title and paragraph headings contained in this Agreement are for the
purpose of reference only, and shall not affect the interpretation of this
Agreement.
23.2 Nothing in this Agreement shall be construed as requiring a
commission of any act contrary to law. Wherever there is a conflict between
any provisions of this Agreement in a present or future statute, law, bylaw,
ordinance or regulation contrary to which the parties have no legal right to
contact, the latter shall prevail. But in such event, the provisions of this
Agreement thus affected shall be curtailed and limited only to the extent
necessary to bring it within the requirements of the law and in the event
that any article, section, or subsection of this Agreement, or any portion
thereof, shall be held by any competent authority to be indefinite, invalid,
illegal or otherwise avoidable or unenforceable, the entire Agreement shall
not fail on account thereof, and the balance of the Agreement shall continue
in full force and effect. If any competent authority deems any provision
(other than for the payment of money) unreasonable, and declarers a reasonable
modification thereof, this Agreement shall be and will remain valid and
enforceable and the parties agree to be bound by and pefform the same as thus
modified.
23.3 Nothing herein shall be deemed to create a partnership between the
parties, and Adven shall have no authority to act on behalf of DIS or to
commit DIS in any way.
23.4 The terms, provisions, covenants and conditions contained in this
Agreement which, by their terms, require their performance by either party
after the expiration or other termination of this Agreement, shall be and
remain enforceable notwithstanding said expiration or other termination of
this Agreement for any reason whatsoever.
23.5 No waiver or delay on the part of DIS to exercise its right of
termination or cancellation or any default by Adven shall be construed to
prejudice DIS's right of termination or cancellation for default or for any
other subsequent defaults.
23.6 This Agreement shall be binding on and shall enuxe to the benefit of
the legal successors, and permitted assigns of the parties. This Agreement
and any rights granted shall not be assigned by either party except with the
approval of the other. Adven agrees that at any time DIS may assign the
benefit and burden of this Agreement to any party in conjunction with the
sale to such party of all or substantially all of the business and assets of
DIS. DIS warrants that the rights to the Subject Matter will remain with
DIS, or its affiliates, and will not be sold or transferred without the prior
approval of all licensees.
23.7 The making, execution and delivery of this Agreement by Adven have
been induced by no representations, statements, warranties or agreements
other than those expressed in this Agreement. This Agreement embodies the
entire agreement of the parties, and there are no further or other agreements
or understandings written or oral, in effect between the parties, relating to
the subject matter of this Agreement.
23.8 Adven shall obtain exemption for DIS, its affiliates and
sub-contractors and consultants and their personnel from, or bear the cost of,
any taxes, duties, fees, and other impositions levied under the laws and/or
regulations in effect in the Territory with respect to:
(a) any equipment, materials and supplies brought into the Territory,
including those subsequently withdrawn therefrom;
(b) any property brought into the Territory by the aforesaid personnel
and their dependents for their own personal use and which will be withdrawn
upon their departure.
24 NOTICES
24.1 Any notices, direction or other instrument required or permitted to
be given under this Agreement shall be in writing and may be given by
delivery of the same or by sending the same by telex or facsimile or similar
form of communication, hand delivered addressed as follows:
To DIS: DIS International.(Marketing) Inc.
Whitepark House White Park Road
P.O. Box 806E
Bridgetown, Barbados
Attention: Margaret Bruce
Facsimile: (246) 429-2677
To Adven: Adven, Inc.
3653 Hemlock Court Reno,
Nevada U.S.A. 89509
Attention: Henry Hornby
Facsimile: (702) 829-8813
24.2 Any notice, direction or other instrument will, if delivered, be
deemed to have been given or served and received on the day it was delivered
or if sent by telex, facsimile or other similar form of communication be
deemed to have been given or received on the next business day following the
day on which it was so sent and receiived.
24.3 Any party may at any time give to any other party notice in writing
of any change of address of the party giving notice and from and after the
giving of such notice the address or addressed therein specified will be
deemed to be the address of such party for the purpose of giving notice
hereunder.
IN WITNESS WHEREOF the parties hereto have hereunder executed this Agreement
as of the day and year first above written.
DIS INTERNATIONAL
(MARKETING) INC.
Margaret Bruce/President