Manufacturing, Licensing
And
Distribution Agreement
THIS LICENSE AGREEMENT ("Agreement") is made this 26th day of March, 2000,
by and between NVID International, Inc., a Florida corporation ("Licensor"),
Innovative Medical Services, a California Corporation ("Licensee, Marketer and
Distributor" or "Licensee") and ETI H20, Inc. Florida Corporation
("Manufacturer, Research & Development and Quality Control Supervisor" or
"Manufacturer").
WHEREAS, Licensor holds all rights to the product known AXEN/AXENHOL AND ALL
RELATED PRODUCTS or the "Licensed Product"), being patent pending products for
the killing of bacterial and other biological contaminants as more particularly
described in the attached Exhibit A: PATENT PENDING; and
WHEREAS, Licensor desires to license all marketing and distribution rights for
the Licensed Products to the Licensee and all manufacturing rights to
Manufacturer on the terms and conditions set forth herein.
THEREFORE, Licensor, Licensee and Manufacturer agree as follows:
1. Prior written agreements
1.1. It is hereby agreed to by the parties that this agreement supercedes
all prior written agreements[*]. [*HANDWRITTEN INSERT OF `BETWEEN THE
PARTIES HERETO ']
2. Representations and Warranties of Licensee
3. As an inducement to, and to obtain the reliance of Licensor and
Manufacturer, Licensee represents and warrants as follows:
3.1. Organization, Good Standing, Power, Etc. Licensee (i) is a corporation
duly organized, validly existing and in good standing under the law of
the State of California; (ii) is qualified or authorized to do
business as a foreign corporation and is in good standing in all
jurisdictions in which qualification or authorization may be required;
and (iii) has all requisite corporate power and authority, licenses
and permits to own or lease and operate its properties and carry on
its business as presently being conducted and to execute, deliver and
perform this Agreement and consummate the transactions contemplated
hereby.
3.2. Capitalization. The authorized capital stock of Licensee consists
solely of 20,000,000 shares of Common Stock, no par value, (the
"Licensee Common Stock"), of which, on the date hereof approx. 5
million shares are issued and outstanding and no shares are held in
the treasury of Licensee. In addition the Company has 5,000,000 shares
of Preferred Stock authorized, none of which are presently
outstanding. All of such issued and outstanding shares of the Licensee
Common Stock have been duly authorized and validly issued and are
fully paid and non-assessable with no personal liability attaching to
the ownership thereof and were not issued in violation of the
preemptive or other rights of any person.
3.3. Authorization of Agreement. This Agreement has been or will be at
Closing duly and validly authorized, executed and delivered by
Licensee.
3.4. Compliance with Applicable Laws. The conduct by Licensee of their
business does not violate or infringe on any domestic (federal, state
or local) or foreign law, statute, ordinance or regulation now in
effect, or, to the knowledge of Licensee proposed to be adopted, the
enforcement of which would materially and adversely affect its
business or the value of its properties or assets.
Page 1 of 10
ETI/AXEN AGMT
Final 032600 ETI H2O: G.L.D. NVID: D.J.L. IMS: M.L.K
M.J.R.
3.5. Exchange Act Filings and Financial Statements. Licensee has filed all
reports required of it with the United States Securities and Exchange
Commission (the SEC) pursuant to Section 12(g) of the Securities
Exchange Act of 1934 (the 1934 Act) including without limitation,
registration statements, 10-KSB's, 10-QSB's, Form 8's, etc. for each
of the annual, quarterly or other fiscal periods from the first to
latest such filings since Licensee first so registered as a public
company.
3.6. Recognition of Licensor Trade Secrets.
3.6.1. Licensee agrees that during the term of this Agreement, or
following its termination and for all times thereafter, it will
keep secret and confidential all Licensor Trade Secrets which it
knows or may hereafter come to know as a result of the
relationship established by this Agreement. The Licensor Trade
Secrets shall not be disclosed by Licensee to third parties and
shall be kept secret and confidential except (i) to the extent
that the same have entered into the public domain by means other
than improper actions by Licensee or (ii) to the extent that the
disclosure thereof may be required pursuant to the order of any
court or other governmental body.
3.6.2. It is understood and recognized by Licensee that in the event
of any violation by Licensee of the provisions above, Licensor's
remedy at law will be adequate.
3.6.3. Licensor, Licensee and Manufacturer shall cause their employees
who shall have access to the Licensor, Manufacturer and Licensee
Trade Secrets hereof, to sign appropriate Trade Secrecy
Agreements in the form of Exhibit B annexed hereto and made a
part hereof.
4. Representations And Warranties Of Licensor
As an inducement to, and to obtain the reliance of Licensee and Manufacturer,
Licensor represents and warrants as follows:
4.1. Organization, Good Standing, Power, Etc. Licensor (i) is a corporation
duly organized, validly existing and in good standing under the laws
of Delaware and (ii) has all requisite corporate power and authority,
licenses, permits and franchises to own or lease and operate its
properties and carry on its business as presently being conducted and
to execute, deliver and perform this Agreement and consummate the
transactions contemplated hereby.
4.2. Authorization of Agreement. This Agreement has been or will be at
Closing duly and validly authorized, executed and delivered by
Licensor.
4.3. Material Contracts There has not occurred any default by Licensor or
any event which with the lapse of time or the election of any person
other than Licensor will become a default, except defaults, if any,
which will not result in any material loss to or liability of
Licensor.
4.4. Permits, Licenses, Etc. Licensor has all permits, licenses, orders and
approvals of federal, state, local or foreign governmental or
regulatory bodies that are required in order to permit it to carry on
their business as presently conducted.
4.5. Compliance with Applicable Laws. The conduct by Licensor of its
business does not violate or infringe upon any domestic (federal,
state or local) or foreign law, statute, ordinance or regulation now
in effect, or, to the knowledge of Licensor proposed to be adopted,
the enforcement of which would materially and adversely affect its
business or the value of its properties or assets.
4.6. Litigation. There is no material claim, action, suit, proceeding,
arbitration, investigation or inquiry pending before any federal,
state, municipal, foreign or other court or governmental or
administrative body or agency, or any private arbitration tribunal, or
to the knowledge of Licensor threatened, against, relating to or
Page 2 of 10
ETI/AXEN AGMT
Final 032600 ETI H2O: G.L.D. NVID: D.J.L. IMS: M.L.K
M.J.R.
affecting Licensor or any of its properties or business, or the
transactions contemplated by this Agreement; nor to the knowledge of
Licensor is there any basis for any such material claim, action, suit,
proceeding, arbitration, investigation or inquiry which may have any
adverse effect upon the assets, properties or business of Licensor, or
the transactions contemplated by this Agreement. Neither Licensor nor
any officer, director, partner or employee of Licensor, has been
permanently or temporarily enjoined by order, judgment or decree of
any court or other tribunal or any agency from engaging in or
continuing any conduct or practice in connection with the business
engaged in by Licensor. There is not in existence at present any
order, judgment or decree of any court or other tribunal or any agency
enjoining or requiring Licensor to take any material action of any
kind or to Licensor and its business, properties or assets are subject
or bound. Licensor is not in default under any order, license,
regulation or demand of any federal, state or municipal or other
governmental agency or with respect to any order, writ, injunction or
decree of any court which would have a materially adverse impact upon
Licensor's operations or affairs.
4.7. Other Information. None of the information and documents which have
been furnished or made available by LICENSOR, or any of its
representatives to LICENSEE and MANUFACTURER or any of their
representatives in connection with the transactions contemplated by
this Agreement is materially false or misleading or contains any
material misstatements of fact or omits any material fact necessary to
be stated in order to make the statements therein not misleading.
4.8. Covenant to Refrain from Trading in Licensee Securities. The Licensor,
its executive officers and directors represent and warrant that since
August 1, 1999 they have not engaged in trading of Licensee securities
and until such time that Licensee has announced the Closing of this
Agreement, the Licensor, its executive officers and directors will not
engage in trading of Licensee securities.
4.9. Authority to Grant a License. Pursuant to the Licensor as the holder
of the patents for the Licensed Products and the knowledge and consent
thereof, the Licensor has the right and authority to grant the license
set forth in this Agreement to the Licensor.
4.10. Compliance with Environmental Laws. Licensor has not caused or
permitted its business, properties, or assets to be used to generate,
manufacture, refine, transport, treat, store, handle, dispose of,
transfer, produce, or process any Hazardous Substance (as such term is
defined herein) except in compliance with all applicable laws, rules,
regulations, orders, judgments, and decrees, and has not caused or
permitted the Release of any Hazardous Substance on or off the site of
any property of Licensor. The term `Hazardous Substance' shall mean
any hazardous waste, as defined by 42 U.S.C. ' 6903(5), any hazardous
substance, as defined by 42 U.S.C. ' 601(14), any pollutant or
contaminant, as defined by 42 U.S.C. ' 9601(33), and all toxic
substances, hazardous materials, or other chemical substances
regulated by any other law, rule, or regulation. The term `Release'
shall have the meaning set forth in 42 U.S.C. ' 9601(22).
4.11. Licensor, Licensee and Manufacturer shall cause their employees who
shall have access to the Licensor, Manufacturer and Licensee Trade
Secrets hereof, to sign appropriate Trade Secrecy Agreements in the
form of Exhibit B annexed hereto and made a part hereof.
5. Representations And Warranties Of Manufacturer
As an inducement to, and to obtain the reliance of Licensor and Licensee,
Manufacturer represents and warrants as follows:
5.1. Organization, Good Standing, Power, Etc. Licensee (i) is a corporation
duly organized, validly existing and in good standing under the law of
the State of Florida; (ii) is qualified or authorized to do business
as a foreign corporation and is in good standing in all jurisdictions
in which qualification or authorization may be required; and (iii) has
all requisite corporate power and authority, licenses and permits to
Page 3 of 10
ETI/AXEN AGMT
Final 032600 ETI H2O: G.L.D. NVID: D.J.L. IMS: M.L.K
M.J.R.
own or lease and operate its properties and carry on its business as
presently being conducted and to execute, deliver and perform this
Agreement and consummate the transactions contemplated hereby.
5.2. Authorization of Agreement. This Agreement has been or will be at
Closing duly and validly authorized, executed and delivered by
Manufacturer.
5.3. Compliance with Applicable Laws. The conduct by Manufacturer of their
business does not violate or infringe on any domestic (federal, state
or local) or foreign law, statute, ordinance or regulation now in
effect, or, to the knowledge of Manufacturer proposed to be adopted,
the enforcement of which would materially and adversely affect its
business or the value of its properties or assets.
5.3.1. Licensor, Licensee and Manufacturer shall cause their employees
who shall have access to the Licensor, Manufacturer and Licensee
Trade Secrets hereof, to sign appropriate Trade Secrecy
Agreements in the form of Exhibit B annexed hereto and made a
part hereof.
6. Responsibilities and Obligations of the Parties
6.1. Responsibilities of the Licensor,
6.1.1. Licensor will be responsible for processing, completing and
obtaining the above referenced foreign and domestic patents.
6.1.2. Licensor does hereby transfer any and all, sales leads,
inquiries and pending agreements with any entity regarding AXEN
or AXENOHL products formulations or uses.
6.1.3. Licensor will be responsible for all cost associated with
obtaining the above referenced patent.
6.2. Responsibilities of the Licensee,
6.2.1. Licensee will be responsible for sales and marketing of the
Axenohl product line and associated cost including future studies
and tests.
6.3. Responsibilities of the Manufacturer,
6.3.1. Manufacturer will be responsible for processing, and production
of Axenohl.
6.3.2. Manufacturer will be responsible for all supervision of all
research, studies, data and quality control of the AXEN/AXENOHL
product.
6.4. Marketing And Distribution Licenses
6.5. Sale of License for AXEN/AXENHOL AND ALL RELATED PRODUCTS. Subject to
Closing of this Agreement as set forth below, Licensor grants to the
Licensee a license to market and distribute AXEN/AXENHOL AND ALL
RELATED PRODUCTS for all markets except as specifically listed and
attached hereto as Exhibit "C". If Licensor cannot supply AXENOHL for
any reason, IMS will have the right to manufacture AXEN/AXENHOL AND
ALL RELATED PRODUCTS. IMS will bear the complete cost associated with
manufacturing set-up/equipment (This does not include reasonable
set-up expenses for ETI H20 to set-up the operation.) In such
instance, ETI H20, Inc. will provide the manufacturing know-how to
assist IMS in setting up a manufacturing operation for the
AXEN/AXENHOL AND ALL RELATED PRODUCTS. Should IMS elect to set up
manufacturing ETI H20, Inc. (if available) will have total supervision
of quality control and manufacturing specifications. Compensation for
this will be set at a cost per month ($5,000 per location or 1% of
production, whichever is greater) plus reasonable expenses. This is
not intended to limit IMS from the direct utilization of a product
Blender or Manufacture to incorporate Axenohl into a finished product
(i.e. Soaps, lotions, etc.)
7. Manufacturing License
7.1. Sale of license to manufacture AXEN/AXENHOL FORMULATIONS. Subject to
Closing of this Agreement as set forth below, Licensor and Licensee
grant to the Manufacture a license to manufacture all AXEN/AXENHOL
Page 4 of 10
ETI/AXEN AGMT
Final 032600 ETI H2O: G.L.D. NVID: D.J.L. IMS: M.L.K
M.J.R.
formulations adhering strictly to specifications generated and
provided by manufacture This license also grants total supervision
rights of all testing and data generation to Manufacture so that
quality control and security for the product remain intact. Mutual
approval is required by ETI H2O and IMS to grant use of any
confidential test data, regulatory approvals and certifications or
government approvals to any and all third parties by NVID. It is
specifically agreed to by NVID, IMS and ETI H2O that all past, present
and future: tests, studies, approvals, certifications, marketing
materials and confidential property of any kind or source are the
property of IMS and ETI H2O.
7.2. This Agreement acknowledges that ETI H20, Inc. will have a supervisor
capacity over all R&D of the AXEN/AXENOHL product and product lines
that are currently available as well as future products that may be
developed. This is accomplished on a cost plus basis (min $3,000 per
month plus expenses). ETI H20, Inc. will maintain overall data
security for AXENOHL products currently in production and future
products. Should circumstances prevent the inventor or staff of ETI
from performing in this capacity, all secure data, i.e. formulations,
exact manufacturing process, product secrets etc. will be passed to
Licensee.
7.2.1. ETI H20, Inc will be brought current on outstanding invoices
for R&D/QC due as of 3-26-2000 in the amount of $57,000.
7.2.2. The manufacture grants to IMS use of the Trademark name AXEN
and AXENOHL
7.2.2.1. Manufactured Price The term "Manufactured Price" as used
in this agreement shall mean the actual cost for
Manufacturer to produce AXEN/AXENHOL and any RELATED
PRODUCTS per gallon as of the date produced.
7.2.3. AXEN/AXENHOL AND ALL RELATED PRODUCTS Licensing Fee. Commencing
one month after Licensee sells AXEN/AXENHOL AND ALL RELATED
PRODUCTS in the Point of Use System Market or Healthcare market,
Licensee shall pay a Licensing Fee of $70,000 payable at the rate
of $10,000 per month for (7) seven consecutive months.
7.2.4. AXEN/AXENHOL AND ALL RELATED PRODUCTS EPA Testing Payments.
Licensee shall be responsible for the fees associated with EPA
certification as provided by EPL-Bio-Analytical. Said fees for
EPA Certification not to exceed $70,000.
7.2.4.1. Fees Disbursement
7.2.4.1.1. AXEN/AXENHOL AND ALL RELATED PRODUCTS USDA
Research Agreement Payment. Within ten (10 days
following the Closing of this Agreement, Licensee shall
pay the U.S. Department of Agriculture, $29,500 for a
one year research and testing agreement to determine if
AXEN/AXENHOL AND ALL RELATED PRODUCTS may be approved
for use in preparation and processing of food for human
or animal consumption.
7.2.4.1.1.1. The parties do hereby agree that $29,500 has
been paid for by IMS, and received by NVID.
7.2.4.1.2. $20,000 will be paid to ETI H2O, Inc. upon closing of
this Agreement as partial repayment of EPL-Bio-Analytical
invoices paid for by ETI and submitted to NVID.
7.2.4.1.3. The remaining balance of up to $50,000 shall be paid
to EPL-Bio-Analytical at the rate of work actually performed
monthly commencing ten (10) days following the closing, and
shall not exceed the actual invoice cost of
EPL-Bio-Analytical.
Page 5 of 10
ETI/AXEN AGMT
Final 032600 ETI H2O: G.L.D. NVID: D.J.L. IMS: M.L.K
M.J.R.
7.2.4.1.3.1. The parties do hereby agree that $50,000 has
been paid for by IMS, and received by NVID and ETI
7.2.4.1.4. Royalty. Subject to Closing of this Agreement as set
forth below, the Licensee shall pay to Licensor, a royalty
in the amount of fifteen percent (15%[*])[*HANDWRITTEN NOTE
REPLACES 15% WITH 20%] of the actual manufactured price of
AXEN/AXENHOL AND ALL RELATED PRODUCTS sold by or through the
Licensee during a calendar quarter in the Point-of-Use
Market. The Royalty shall be paid on or before the thirtieth
(30) day after the close of each calendar quarter for all
AXEN/AXENHOL AND ALL RELATED PRODUCTS for which the Licensee
has been paid during each calendar quarter adjusted solely
for returned or credited product.
7.2.4.1.4.1. Licensee agrees to furnish Licensor with an
annual accounting setting forth the number of units
sold in the prior year concurrently with the filing of
it's form 10-SBK.
7.2.4.2. Exclusive[*] License Fees. [*HANDWRITTEN STRIKEOUT OF
EXCLUSIVE] IMS will pay to NVID any up-front licensing fees
generated by any third parties for rights to AXEN/AXENHOL
AND ALL RELATED PRODUCTS that IMS may grant in the Food
Processing Market[*] [*HANDWRITTEN STRIKEOUT OF `FOOD
PROCESSING MARKET'][HANDWRITTEN INSERT OF `ALL MARKETS'] in
the following manner: Year One: 15% of fee; Year Two 18.5%
of fee, Year Three 20% of fee, Year Four and thereafter
20%[*]. [*HANDWRITTEN STRIKEOUT OF `FOLLOWING MANNER: YEAR
ONE: 15% OF FEE; YEAR TWO 18.5% OF FEE, YEAR THREE 20% OF
FEE, YEAR FOUR AND THEREAFTER 20%'][ HANDWRITTEN INSERT OF
`AMT OF 50% OF GROSS']
8. Closing
8.1. Closing. The Closing of this Agreement is on date of execution of this
agreement, (herein called the "Closing Date"). At the Closing, each of
the respective parties hereto shall execute, acknowledge, and deliver
(or shall cause to be executed, acknowledged, and delivered) any
agreements, resolutions, or other instruments required by this
Agreement to be so delivered at or prior to the Closing, together with
such other items as may be reasonably requested by the parties hereto
and their respective legal counsel in order to effectuate or evidence
the transactions contemplated hereby.
9. Special Covenants
9.1. Due Diligence. The parties hereto shall have up to and including the
date prior to Closing within which to complete their due diligence
investigations on the other party and the transaction contemplated
hereunder. In the event either party hereto decides, in its sole
discretion, not to proceed with the Closing based on its due diligence
investigation, it shall notify the other in writing of such decision
and this Agreement shall terminate without obligation to the other
party except as to the confidentiality provisions.
9.2. Exchange of Information. Each party shall cooperate fully by
exchanging information requested by the other party in a timely
manner. Without in any manner reducing or otherwise mitigating the
representations contained herein, each party and/or its attorneys
shall have the opportunity to meet with the accountants and attorneys
of the other party to discuss its respective legal and financial
condition and this transaction. If this transaction is not completed,
all documents received by each party and/or its attorney shall be
returned to the other party and all such information so received shall
be treated as confidential in accordance with Section x. ETI H20, Inc
will maintain all the confidential data so the security of the product
stay intact. Necessary data for marketing will be transferred freely
to IMS.
Page 6 of 10
ETI/AXEN AGMT
Final 032600 ETI H2O: G.L.D. NVID: D.J.L. IMS: M.L.K
M.J.R.
10. Conditions Precedent to Obligations of Parties
10.1. Licensor's Closing Conditions. The obligations of Licensor hereunder
are subject to fulfillment prior to or at the Closing of each of the
following conditions:
10.1.1. Representations and Warranties. The representations and
warranties of Licensee made pursuant to Paragraph 1 above, shall
be true and accurate in all material respects as of the Closing
Date.
10.1.2. Performance. Licensee shall have performed and complied with
all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing.
10.1.2.1. Licensee will use reasonable commercial marketing
efforts in Licensees representations of all markets covered
in this agreement.
10.1.3. Opinion of Licensee's Counsel. Licensee shall have delivered to
Licensor an opinion of Licensee's counsel, Dennis Brovarone, Attorney
at Law, dated the Closing Date to the effect that: (i) Licensee is a
corporation duly organized, validly existing and in good standing
under the laws of the State of California, has all requisite power to
carry on its business as now being conducted and to execute, deliver
and perform this Agreement and to perform its obligations; (ii)
Licensee is duly qualified to do business as a foreign corporation and
is good standing in each jurisdiction in which the nature of the
business conducted by it or the property owned, operated or leased by
it makes such qualification necessary; (iii) this Agreement has been
duly authorized by all necessary corporate action on the part of
Licensee, has been duly executed and delivered by IMS and constitutes
the legal, valid and binding obligation of Licensee enforceable in
accordance with its terms except as enforceability thereof may be
limited by the insolvency or other laws affecting the rights of
creditors and the enforcement of remedies; (iv) Licensee has prepared
and filed with the SEC all periodic reports required of it under the
1934 Act; (v) neither the execution, delivery and performance by
Licensee of this Agreement, nor compliance by Licensee with the terms
and provisions hereof, will conflict with, or result in a breach of
the terms, conditions or provisions of, or will constitute a default
under, the Articles of Incorporation or Bylaws of Licensee or any
agreement or instrument known to such counsel to which Licensee is a
party or by which IMS or any of its properties or assets are bound;
(vi) there are no actions, suits or proceedings pending or, to the
knowledge of such counsel, threatened against Licensee before any
court or administrative agency, which have, in the opinion of such
counsel, if adversely decided, will have any material adverse effect
on the business or financial condition of Licensee or which questions
the validity of this Agreement. In rendering his opinion, counsel
shall be allowed to rely on written representations of officers and
directors of the Licensee as to factual matters without independent
verification thereof.
10.1.4. Current Status with Securities and Exchange Commission.
Licensee shall have prepared and filed with the SEC all periodic
reports required under the 1934 Act pursuant to Section 12(g)
thereof.
10.1.5. Due Diligence. Licensor shall have completed and be satisfied
with its due diligence investigation of Licensee pursuant to
Paragraph 9.1.
10.2. Licensee's Closing Conditions. The obligations of Licensee hereunder
are subject to fulfillment prior to or at the Closing of each of the
following conditions:
10.2.1. Representations and Warranties. The representations and
warranties of Licensor made pursuant to paragraph 2 above, shall
be true and accurate in all material respects as of the Closing
Date.
Page 7 of 10
ETI/AXEN AGMT
Final 032600 ETI H2O: G.L.D. NVID: D.J.L. IMS: M.L.K
M.J.R.
10.2.2. No Adverse Changes. There shall not have been, since the date
of the latest audited financial statements of Licensor, any
materially adverse change in their financial condition, assets,
liabilities or business.
10.2.3. Opinion of Licensor's Counsel[*] [*HANDWRITTEN MARGIN NOTE OF
`I CAN'T GIVE THIS OPINION'] Licensor shall have delivered to
Licensee, an opinion of their counsel, Mr. Curt Creely, Attorney
at Law, respectively, dated the Closing Date to the effect that:
(i) Licensor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, has
all requisite power to carry on its business as now being
conducted and to execute, deliver and perform this Agreement and
to perform its obligations; (ii) Licensor is duly qualified to do
business and is in good standing in each jurisdiction in which
the nature of the business conducted by it or the property owned,
operated or leased by it makes such qualification necessary;
(iii) this Agreement has been duly authorized by all necessary
corporate action on the part of Licensor, has been duly executed
and delivered by Licensor and constitutes the legal, valid and
binding obligation of Licensor, enforceable in accordance with
its terms except as enforceability thereof may be limited by the
insolvency or other laws affecting the rights of creditors and
the enforcement of remedies; (iv) neither the execution, delivery
and performance by Licensor of this Agreement, nor compliance by
Licensor with the terms and provisions hereof, will conflict
with, or result in a breach of the terms, conditions or
provisions of, or will constitute a default under, the Articles
of Incorporation or Bylaws of Licensor or any agreement or
instrument known to such counsel to which Licensor is a party or
by which Licensor or any of its properties or assets are bound;
(v) there are no actions, suits or proceedings pending or, to the
knowledge of such counsel, threatened against Licensor before any
court or administrative agency, which, in the opinion of such
counsel, if adversely decided, will have any material adverse
effect on the business or financial condition of Licensor or
which questions the validity of this Agreement. In rendering
their opinion, counsel shall be allowed to rely on written
representations of officers and directors of the Licensor as to
factual matters without independent verification thereof.
10.2.4. Due Diligence. Licensee shall have completed and be satisfied
with its due diligence investigation of Licensor pursuant to
paragraph 9.1.
11. Patent and Copyright Indemnity.
11.1. Licensor warrants that the use of the Licensed Products by the
Licensee pursuant to the terms hereof shall not constitute an
infringement of any existing patent, copyright or other right.
Licensor hereby agrees to defend or settle any suit, proceeding or
claim brought against the Licensee based on a claim that the use of
the Licensed Products or any part thereof by the Licensee constitutes
an infringement of any existing patent, copyright or other right.
Licensor shall pay all damages or costs awarded against or expenses,
including attorneys' fees, incurred by the Licensee in such suit,
proceeding or claim.
11.2. In the event the Licensed Products or any part thereof shall be in
Licensor's opinion likely to or shall become the subject of a claim
for patent, copyright, or other infringement, Licensor shall, at its
option and expense, procure for the Licensee the right to continue
using such affected part of the Licensed Products or modify such
affected part to become non-infringing. Should Licensor elect to
remove or modify such infringing part of the Licensed Products,
Licensor shall forthwith replace such part with a functionally
equivalent non-infringing part or take other appropriate action to
insure that the Licensed Products conforms to the Specifications to
the Licensee's satisfaction, without cost to the Licensee.
11.3. In the event that Licensor shall refuse or shall be unable to supply
or shall be prevented from supplying the Licensed Products or any part
thereof to the Licensee, or in the event that the Licensee's continued
use of the Licensed Products shall be prohibited or enjoined at any
time, Licensor shall promptly replace all affected parts of the
Page 8 of 10
ETI/AXEN AGMT
Final 032600 ETI H2O: G.L.D. NVID: D.J.L. IMS: M.L.K
M.J.R.
Licensed Products with functionally equivalent non-infringing parts or
shall take such other action to insure that the Licensed Products
conforms to the Specifications to the Licensee's satisfaction, without
cost to the Licensee.
11.4. Licensor warrants that the Licensee shall suffer no interruption of
its normal business activities or cycles as a result of any claimed
infringement, any litigation referred to in Paragraph 7 hereof or any
replacement of items contemplated in Paragraph 7 hereof.
12. Miscellaneous
12.1. Expenses and Further Assurances. The parties hereto shall each bear
their respective costs and expenses incurred in connection with the
transactions contemplated by this Agreement. Each party hereto will
use its best efforts provide any and all additional information,
execute and deliver any and all documents or other written material
and perform any and all acts necessary to carry out the intent of this
Agreement and to comply with U.S. law.
12.2. Survival of Representations, Warranties and Covenants. All of the
representations, warranties and covenants made as of the date of this
Agreement and as of Closing, shall survive the closing of this
transaction.
12.3. Successors and Assigns. All representations, warranties, covenants
and agreements in this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective heirs,
representatives, successors and assigns whether so expressed or not.
12.4. Governing Law. This Agreement and the legal relations among the
Parties hereto shall be governed by and construed in accordance with
the laws of the State of California and that the State or Federal
Courts of California shall be the jurisdiction in which any legal
proceedings relative to this Agreement shall be brought. The foregoing
notwithstanding, the Parties agree that prior to litigation, they will
arbitrate any disputes relative to this Agreement through the services
of the offices of the American Arbitration Association in and for San
Diego, California.
12.4.1. Attorney's Fees In any action brought to enforce the terms and
conditions of this Agreement, the prevailing party shall be
entitled in addition to any other remedies, its reasonable
attorneys fees incurred in the prosecution or defense of the
action.
12.5. Section and Other Headings. The section and other headings herein
contained are for convenience only and shall not be construed as part
of this Agreement.
12.6. Counterparts. This Agreement may be executed in any number of
counterparts and each counterpart shall constitute an original
instrument, but all such separate counterparts shall constitute but
one and the same instrument.
12.7. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof. This Agreement may
not be amended or modified, except by a written agreement signed by
all parties hereto.
12.8. Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffectual to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the
validity or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
Page 9 of 10
ETI/AXEN AGMT
Final 032600 ETI H2O: G.L.D. NVID: D.J.L. IMS: M.L.K
M.J.R.
12.9. Confidentiality. Each party hereto agrees with the other parties
that, unless and until this Agreement has been consummated, or for a
period of one (1) year from the date of this Agreement if the
transaction contemplated by this Agreement is not consummated it and
its representatives will hold in strict confidence all data and
information obtained with respect to the other party from any
representative, Officer, Director or employee, or from any books or
records or from personal inspection, of such other party, and shall
not use such data or information or disclose the same to others,
except: (i) to the extent such data or information has theretofore
been publicly disclosed, is a matter of public knowledge or is
required by law to be publicly disclosed; and (ii) to the extent that
such data or information must be used or disclosed in order to
consummate the transactions contemplated by this Agreement. The
foregoing notwithstanding, Licensee shall be authorized to publicly
announce the execution and closing of this Agreement, details thereof
and a description of Licensor and the business conducted thereby.
In conclusion all of the parties agree that the following represents the
accurate reconciliation by and between the parties accounts and will be brought
current within 30 calendar days of signing this agreement.
IMS owes NVID $ ___________ IMS owes ETI $ ___________
NVID owes ETI $ ___________ NVID owes IMS $ ___________
ETI owes IMS $ ___________ ETI owes NVID $ ___________
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to
be executed by their respective Officers, hereunto duly authorized, as of the
date first above written[*].
[*HANDWRITTEN INSERT OF"
`SUBJECT TO:
1. FINAL NEGOTIATIONS OF NON-MATERIAL ITEMS
2. SUBJECT TO LEGAL REVIEW OF FORM ONLY
3. SUBJECT TO LEGAL REVIEW OF 7.2.4.2.
4. SUBJECT TO PERFORMANCE GOAL OF 500 BARRELS PER MONTH WITHIN 36 MONTHS OR $1
MILLION WHICH EVER IS GREATER.']
NVID INTERNATIONAL, INC.
By: /s/ DAVID J LARSON Date: 03/26/00
David J. Larson, President
By: /s/ MICHAEL J REDDEN Date: 03/26/00
Michael J. Redden, Secretary
By: _________________________________ Date: _____________
INNOVATIVE MEDICAL SERVICES
By: /s/ MICHAEL L KRALL Date: 03/26/00
Michael L. Krall, President
ETI H20, INC.
By: /s/ GEORGE L. DUREN Date: 03/26/00
George L. Duren, as for Andrew Arata Agent
Page 10 of 10
ETI/AXEN AGMT
Final 032600 ETI H2O: G.L.D. NVID: D.J.L. IMS: M.L.K
Ex. 10.2 Manufacturing, Licensing and Distribution Agreement dated March 26,
2001
Exhibit A Patent Summary
[NOTE TO SEC EXHIBIT 10.2 THE PATENT SUMMARY REFERENCED IN THE AGREEMENT
PREAMBLE WAS NEVER PROVIDED TO THE REGISTRANT BY NVID]
Ex. 10.2 Manufacturing, Licensing and Distribution Agreement dated March 26,
2001
Exhibit B Trade Secrecy Agreement
[NOTE TO SEC EXHIBIT 10.2 THE TRADE SECRECY AGREEMENT REFERENCED IN SECTION
3.6.3 OF THE AGREEMENT WAS NEVER ATTACHED BY THE PARTIES.
Ex. 10.2 Manufacturing, Licensing and Distribution Agreement dated March 26,
2001
Exhibit C Excepted Markets
[NOTE TO SEC EXHIBIT 10.2 THE LIST OF EXCEPTED MARKETS REFERENCED IN SECTION 6.5
OF THE AGREEMENT WAS NEVER PROVIDED TO THE REGISTRANT BY NVID]