EXHIBIT 10.39
MARKET AND PRODUCT DEVELOPMENT AGREEMENT
This Agreement, made as of the 22nd day of February, 2005 ("Effective Date")
between and among Daleco Resources Corporation, a Nevada Corporation, having its
principle place of business at 120 North Church Street, West Chester, PA 19380
(hereinafter "Daleco"); EEC North America LLC, a Pennsylvania Limited Liability
Corporation, with offices at Abington Hall, Suite 300, 1777 Sentry Parkway West,
Blue Bell, PA 19422, (hereinafter "EEC"); Organica Biotech, Inc., a Pennsylvania
Corporation, with offices in 705 General Washington Avenue, Suite 500,
Norristown, PA 19403 (hereinafter "Organica"); and Enviro/Sci Corporation, a
Pennsylvania Corporation, having its address at P.O. Box 2063, Southeastern, PA
19399-2063 (hereinafter "ESC") (hereinafter, Daleco, EEC, Organica and ESC are
sometimes collectively referred to as the "Parties") ; sets forth the mutual
understandings and covenants of the Parties.
RECITALS
WHEREAS, DALECO has successfully created products for the various environmental
markets to include but not limited to water and wastewater treatment
applications; and
WHEREAS, EEC is an industry leader in wastewater package plants using
proprietary high speed biological treatment systems; and
WHEREAS, ORGANICA has developed advanced bioengineering products to provide
improved waste degradation in sewage treatment by controlling the type and
functionality of bacteria; and
WHEREAS, ESC has demonstrated extensive knowledge and experience in the
environmental field, including but not limited to, the water and wastewater
industries (hereinafter the "Relevant Market"); and
WHEREAS, the Parties desire to develop products and services designed to meet
the needs of the Relevant Market; and
WHEREAS, the Parties believe that the best way to meet said needs is through an
integrated approach involving strategic alliances; and
WHEREAS, the Parties believe that a strategic alliance whereby their skills and
experience were combined ("Bundled Approach") would satisfy this approach:
NOW THEREFORE, in consideration of the mutual covenants and promises herein set
forth, the Parties do agree as follows.
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ARTICLE I--CONCEPT OF COLLABORATION
PRODUCTS AND SERVICES
The Parties will share their intellectual property with each other pursuant to
their existing non-disclosure agreements, all of which are hereby extended until
February 21, 2010 in order to review their existing products and services to
determine whether the needs of the Relevant Market are being met. This will
involve defining the needs of the Relevant Market, the products and services
being offered, in general, and how an Bundled Approach would benefit the
customers in the Relevant Market. To the extent that new products or services
need to be developed and the Parties agree to do so, the Party who develops the
new product or service will own all intellectual property so developed, with
each of the non-developing Parties having a license to use such intellectual
property as part of the Bundled Approach. To the extent that the Parties
specifically agree to develop products or services jointly, they will define at
the outset, in writing, how the intellectual property will be owned. The Parties
further agree that any product or service developed, either separately or
jointly, which results from the Parties' interaction shall be made available to
all Parties without undue restrictive fees and /or covenants
MARKET DEVELOPMENT
The Parties agree that they have existing customers and contracts and nothing
herein shall give any Party the right to contact a customer of another Party,
unless permission is first granted, in writing, by the other Party. Any Party
may identify new opportunities for its existing customers, and said Party will
be considered to be the lead marketer for that customer, unless the Parties
agree otherwise. For such existing customers, each of the Parties shall be
granted the right to participate in the pursuit of the customer; however, each
Party will also be granted the right to decline to join in said pursuit by
notifying the other Parties in writing of its election not to participate in the
pursuit. Likewise, new opportunities may be identified by any of the Parties. In
that case, the Parties will designate the Party who should take the lead in
marketing the products and services of the Parties to these new opportunities.
Again, all Parties shall have the right to join in the pursuit of the new
opportunities; Any Party may decline to join in the pursuit of the new
opportunities so by notifying the other Parties in writing of its election. In
the course of these marketing efforts, the Parties may identify new applications
for their present or future products or services. In that case, the Parties will
have the right to develop the market jointly or to decline to participate in the
marketing efforts to do so as set forth above.
PRICING OF PRODUCTS AND SERVICES
Each Party has the sole right to determine the prices that each will charge to
customers for its products and/or services. However, the Parties agree to review
pricing issues for the relevant market to determine appropriate pricing of
integrated or bundled offerings.
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ARTICLE II--CONCEPT OF MARKETING
SPECIFIC OFFERINGS
The Parties agree that all specific offerings to customers utilizing the Bundled
Approach to satisfy a defined opportunity will be done by a separate agreement
between the Parties, defining the role of each Party, the nature of the products
or services to be delivered, the pricing of the products and/or services and
name of the Party chosen to enter into a contract with the client. The Parties
agree to negotiate the terms and conditions of these agreements in good faith.
MARKETING TERM OF ENGAGEMENT
The Parties agree that, after 180 days, if a contract has not been entered into
with a customer after good faith marketing efforts have been made to secure that
contract, the Parties will not be bound to continue said marketing effort in
that Relevant Market. The Parties can extend this period by joint consent. Any
Party can agree to decline to extend the period; however, the remaining Parties
will still be free to extend the period to continue to pursue the identified
opportunity.
ARTICLE III--DURATION OF THE AGREEMENT
A. Any Party can terminate its participation in this Agreement for cause upon
30-days' written notice to the other Parties, in which case the Agreement shall
remain in effect and still be binding upon the remaining Parties. Unless three
of the four Parties decide to terminate their participation in this Agreement,
this Agreement shall continue for a minimum period of two (2) years from the
Effective Date and shall be subject to review by the Parties thereafter on an
annual basis for potential extensions thereto. In the event of termination, the
Parties should exert every effort to reach a mutually acceptable resolution of
all outstanding marketing/sales opportunities, keeping in mind the interests of
the targeted customers.
B. The term "cause" as set forth in subparagraph A, above, shall include (but
not be limited to) the following:
Breach of any provision of this Agreement without curing said breach within a
reasonable period of time; Insolvency or bankruptcy of a Party, including the
filing of the following: a petition in bankruptcy or for reorganization or for
an arrangement with creditors (whether by the Party or against the Party) or for
the appointment of a receiver, trustee, liquidator, custodian, conservator or
similar official for such Party's assets.
C. All rights and remedies of any Party shall be cumulative and may be exercised
singularly or concurrently. The provisions of Articles XI and XII will remain in
full force and effect after the termination or expiration of this Agreement
until such time as the Parties may mutually agree to the release of the
obligations contained herein.
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ARTICLE IV--STATUS OF THE PARTIES
A. Nothing contained herein shall affect the right of a customer to work
directly with and contract with any Party hereto on any basis that the customer
may desire.
B. Nothing contained herein shall be deemed to preclude any Party from quoting,
offering to license, sell or licensing/selling to others any item or service,
which it regularly offers for sale or license.
C. This Agreement shall relate only to matters covered by the limited scope of
the activity contemplated herein and to no other effort undertaken by the
Parties jointly or separately. It shall not constitute, create, give effect to
or otherwise be construed as a joint venture, pooling arrangement, partnership
or formal business organization of any kind. The Parties shall be deemed to be
independent contractors and the employee of one shall not be deemed to be an
employee or agent of another.
D. Nothing in this Agreement shall be construed as providing for the sharing of
profits or losses arising out of the efforts of any of the Parties. Except as
specifically provided herein, no Party will be liable to another for any costs,
expenses, risks or liabilities arising out of another Party's efforts in
connection herewith.
ARTICLE V--PUBLICATION
Any news release, public announcement, advertisement or publicity proposed to be
released by any Party concerning the activities of the other Parties in
connection with this Agreement (including the existence or purpose of this
Agreement) shall be subject to the written approval of the other Parties prior
to release. Such approval will not be arbitrarily withheld.
ARTICLE VI--EXCUSABLE DELAY
Each Party shall use reasonable efforts to perform its obligations under this
Agreement, but no Party shall be liable for delay or failure hereunder due to
any cause beyond its reasonable control, including but not limited to acts of
God, acts of civil or military authorities, fires, strikes, floods, epidemics,
war, riot, delay in transportation or acts of another Party or its
representatives.
ARTICLE VII--MERGER OF NEGOTIATIONS
This document, including all Attachments hereto, contains the entire Agreement
between the Parties and supersedes any prior or collateral oral or written
agreements, understandings or communications with respect to the subject matter
of this Agreement. No agreements or understandings varying or extending the same
shall be binding upon any Party hereto unless in writing, signed by a duly
authorized representative thereof. However, Nothing in this Agreement shall
supersedes or suspend the obligations between the Parties arising out of their
respective confidentiality agreement
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ARTICLE VIII--OBSERVANCE OF LAWS
The Parties agree to strictly abide by all laws and regulations applicable to
the conduct of the activities contemplated hereunder.
ARTICLE IX--CONSTRUCTION
This Agreement shall be governed by the law of the Commonwealth of Pennsylvania,
excluding its conflict-of-law rules.
ARTICLE X--NOTICES
Any notice, demand, request statement or other writing required or permitted by
this Agreement shall be deemed to have been given upon receipt when personally
delivered or mailed or emailed by the signatories hereto to each other.
ARTICLE XI--REMEDIES AND DISPUTE RESOLUTION
A. In the event of breach of this Agreement by any Party, it is agreed that the
remedy of the Parties not at fault shall be limited to recovery of costs of
labor and material expended by such Parties in performance their obligations
under this Agreement up to the date of the breach, and there shall be no
liability for loss of present or prospective profits or any other consequential
or incidental or punitive damages.
B. In the event of any dispute arising out of this Agreement that cannot be
resolved by the Parties in good faith efforts to do so, the Parties agree to use
the following steps to resolve the dispute by the use of a neutral third party
as mediator. The Parties agree to select a neutral, third party to mediate the
dispute who is knowledgeable of the market and technologies covered by this
Agreement and whom the Parties believe will try, in good faith, to implement the
intent of this Agreement. In the event that mediation fails to resolve the
dispute, the Parties agree to submit the dispute to a neutral, third party
arbitrator as provided by the UNCITRAL rules of international arbitration. The
Arbitrator's ruling will be final and binding on the Parties.
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ARTICLE XII--PROPRIETARY INFORMATION OF THE PARTIES
In connection with this Agreement, exchanges of any Party's proprietary
information shall be made in accordance with the Proprietary Information
Agreements executed by the Parties, each of which is attached hereto and made a
part hereof (Attachment "A").
ARTICLE XII--GENERAL PROVISIONS
A. If any part or parts of this Agreement are held to be invalid, the remaining
parts of the Agreement will be valid and enforceable.
B. The headings in this Agreement are for reference purposes only; they will not
affect the meaning or construction of the terms of this Agreement.
C. The provisions of this Agreement are for the sole benefit of the Parties and
not for the benefit of any other persons or legal entities.
D. No Party may assign this Agreement without the prior written consent of the
other Parties, which consent shall not be unreasonably withheld.
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ENVIRO/SCI CORPORATION DALECO RESOURCES CORPORATION
By: /s/ William G. Smith By: /s/ Gary J. Novinskie
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William G. Smith Gary J. Novinskie
Title: President Title: President
Date: February 22, 2005 Date: February 24, 2005
ORGANICA BIOTECH, INC. EEC NORTH AMERICA, LLC
By: /s/ Ray J. Mehta By: /s/ Carl Mattia
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Dr. Raj J. Mehta Carl Mattia
Title: President Title: President
Date: February 23, 2005 Date: February 22, 2005