Exhibit 10
EXCLUSIVE LICENSE AGREEMENT
EXCLUSIVE LICENSE AGREEMENT, dated as of this 10th day of August, 1999 by
and between SafeScience, Inc., a Nevada corporation with its offices in Boston,
MA ("SafeScience") and Delta-Omega Technologies, Inc., a Colorado corporation
(the "Company") with its offices in Broussard, LA.
WHEREAS, the Company has developed certain proprietary formulations for
cleaning products listed in Appendix A, has produced the same for conversion
into finished goods and has produced pilot production quantities of finished
goods exclusively for SafeScience; and
WHEREAS, the parties are interested in establishing an exclusive
arrangement whereby the Company provides SafeScience with these formulations;
and
WHEREAS, SafeScience wishes to contract for the production of certain
finished products utilizing these formulations; and
WHEREAS, SafeScience has developed certain markets for resale of these
products; and
WHEREAS, SafeScience wishes to provide confidential access to these
formulations to third party manufacturers for the purpose of manufacturing large
volumes of finished goods for resale; and
WHEREAS, SafeScience is willing to make license payments to the Company in
consideration of its development of these formulations and its grant of a
license hereunder; and
WHEREAS, the Company is willing to grant to SafeScience exclusive use of
these proprietary formulations, as well as any future formulations for cleaning
products that may from time to time be developed for SafeScience; and
WHEREAS, SafeScience is willing to assume the responsibility of protecting
these proprietary formulations via confidentiality agreements with its third
party manufacturers;
NOW THEREFORE, in consideration of the foregoing, the parties agree as
follows:
1. Grant of License; Exclusivity. The Company grants SafeScience an exclusive
worldwide license to make, manufacture, sell and distribute each of the cleaning
products listed in Appendix A, as such Appendix may be amended to add future
cleaning products developed by the Company, including products presently in
development (all the products listed on such Appendix A at any time are referred
to as the "Products"). Under the terms of such exclusive license, the Company
will not sell or distribute Products, nor will the Company grant to any third
party any license to make, manufacture, sell or distribute any Products. Such
exclusivity will be subject to SafeScience's maintaining, during each year of
the term of this Agreement, the minimum annual purchase levels set forth in
Section III of the Supply and Distribution Agreement between the parties dated
July 8, 1998 (the "1998 Agreement"); provided, however, that all net sales of
Products (as defined in Section 6) under this Agreement will be credited to the
minimum purchase requirements of the 1998 Agreement.
2. Improvements to Products; Other Existing Products; Products in Development.
(i) During the term of this Agreement, the Company will continue to develop
improvements on the Products. Any improvements on Products shall also be
considered Products for the purposes of this Agreement, shall be added to
Appendix A and shall be subject to all the provisions hereof.
(ii) The Company presently manufactures other products which are purchased from
the Company by SafeScience. In the event that, as a result of the high volume of
demand for any such product or quality control concerns with respect to any such
product, SafeScience determines in good faith to seek a third party manufacturer
for any such product, such product shall be considered a Product for the
purposes of this Agreement, shall be added to Appendix A and shall be subject to
all the provisions hereof.
(iii) The Company is presently developing other products for SafeScience, in
addition to the Products and to the other products described in clause (ii)
above. In the event any such product(s) become commercialized, the Company may
initially manufacture such products for sale to SafeScience. However, in the
event that, as a result of the high volume of demand for any such product or
quality control concerns with respect to any such product, SafeScience
determines in good faith to seek a third party manufacturer for any such
product, such product shall be considered a Product for the purposes of this
Agreement, shall be added to Appendix A and shall be subject to all the
provisions hereof.
3. Product Formulas. The Company agrees to provide SafeScience, simultaneously
with execution of this Agreement, with all the formulas and other information
necessary for manufacture of the Products (the "Product Formulas"). Upon
addition of any new Product to Appendix A, the Company shall promptly provide
all the formulas and other information necessary for manufacture thereof to
SafeScience.
4. Term of License. The license shall commence on the date hereof and be
perpetual unless terminated pursuant to Section 11.
5. Limitations on License. The rights granted SafeScience under this Agreement
shall not be directly or indirectly assignable or transferable in any manner
whatsoever, nor shall SafeScience have the right to grant any sublicenses,
except for the sole purpose of the production of Products by third parties. Any
unauthorized assignment, transfer or sublicense by SafeScience shall be null and
void and of no legal effect whatsoever.
6. License Fee. During the term of this Agreement, SafeScience shall pay license
fees to the Company in an amount equal to two percent (2%) of net sales for all
Products listed in Appendix A. Net sales are defined as gross sales actually
invoiced, less returns, cash discounts and trade allowances, and less separately
invoiced amounts such as taxes, shipping and insurance. In the event additional
Products are added to Appendix A, the parties shall negotiate in good faith to
determine the license fees payable with respect to such additional Products,
which shall in no event exceed 2% of net sales. If the parties are unable to
agree upon the amount of license fees, the parties agree that the amount of the
fees shall be submitted to arbitration pursuant to Section 12(c), and during the
pendency of such arbitration the license shall be in full force and effect
subject to SafeScience's obligation to pay such license fees when they are so
determined.
7. Right to Audit. SafeScience shall at all times during the term of the license
granted hereunder keep true and correct books of account and maintain documents
which show the license fee to which the Company is entitled, and the total
amount of Product produced by SafeScience using the Product Formulas. The books
of account and documentation shall be retained by SafeScience for not less than
two (2) years after any termination of the license and shall be open to
inspection by an authorized representative of the Company, and at the Company's
expense, during the term of the license and for a period of two (2) years after
termination of the license. Such inspections shall be carried out no more than
twice per year, during usual business hours of SafeScience by the Company or its
assigns, successors or representatives upon five (5) business days prior notice.
8. Confidentiality and Non-Disclosure of Information.
(i) As used in this Agreement, the term "Confidential Information" means the
Product Formulas and any other confidential or proprietary technical or business
information furnished by one party to the other party in connection with the
license granted hereunder, regardless of whether such information is in written,
oral, electronic, or other tangible form. Such Confidential Information may
include, without limitation, trade secrets, know-how, inventions, technical data
or specifications, testing methods, business or financial information, research
and development activities, product and marketing plans, and customer and
supplier information.
(ii) Each party shall maintain the other party's Confidential Information in
confidence and shall not disclose such Confidential Information to any third
party without the prior written consent of the disclosing party. The foregoing
shall not apply to information that (1) is or hereafter becomes generally
available to the public other than by reason of any default with respect to
confidentiality under this Agreement; (2) is disclosed to such party by a third
party who is not in default of any confidentiality obligation to the other
party; (3) is developed by or on behalf of such party, without reliance on
confidential information acquired from the other party; (4) is required to be
disclosed in compliance with applicable laws or regulations or order by a court
of competent jurisdiction, provided that reasonable measures shall be taken to
assure confidential treatment of such information; or (5) is provided by such
party under appropriate terms and conditions, including confidentiality
provisions equivalent to those in this Agreement, to third parties for
consulting, accounting, legal and similar purposes.
(iii) Each party shall limit access to the other party's Confidential
Information to those of its directors, officers, agents, employees, consultants
and advisors who have a need to know and who have been informed in writing of
the obligations of confidentiality imposed by this Agreement. Each party shall
allow its directors, officers, agents, employees, consultants, and advisors to
reproduce the Confidential Information only to the extent necessary to effect
the purposes set forth in this Agreement, with all such reproductions being
considered Confidential Information. The receiving party shall cause its
directors, officers, agents, employees, consultants and advisors to keep in
confidence the Confidential Information consistent with this Agreement and shall
be responsible for any disclosures by such persons not permitted hereunder.
(iv) SafeScience shall not use the Company's Product Formulas for any purpose
other than to produce Products.
9. Infringement.
(i) In the event that SafeScience learns of any infringement or unauthorized use
of the Product Formulas, it shall promptly notify the Company. The Company shall
have the sole initial right to bring infringement actions or other similar
proceedings against third parties in order to protect the Product Formulas. If
requested to do so, SafeScience shall reasonably cooperate with the Company in
any such action, including but not limited to joining the action as a party if
necessary to maintain standing, at the Company's expense.
(ii) If the Company determines not to take any such action, then SafeScience may
take such action in its own name. The Company may cooperate with SafeScience or
join such action at its sole discretion. The license fee payable under Section 6
shall be reduced by the amount of any costs incurred by SafeScience in pursuing
such actions.
(iii) Any award recovered by the Company or SafeScience in any action or
proceeding commenced by it as under this section 9 shall be divided between the
parties as follows: first, to both parties of their respective, actual
out-of-pocket costs (which amount shall be allocated pro rata if the amount
recovered is less than the total amount of such costs); second, any amounts
awarded in respect of lost sales or profits shall be allocated so as to
approximate, to the best of the parties' ability, to the Company the portion
thereof that represents the license fees that would have been payable with
respect to such lost sales or profits, and to SafeScience the balance of the
amount so awarded; and third, any remaining amount of any recovery (including
recovery representing punitive or statutory damages ) shall be split evenly
between the parties.
10. Indemnification.
(i) The Company agrees and covenants to hold harmless and indemnify and defend
SafeScience, its subsidiaries, affiliates, officers, directors, employees,
agents and assigns, from and against any suits, actions, claims, losses,
demands, liabilities, costs and expenses of any kind, including costs and
attorneys' fees for defending the same, which may arise or result from any
claims or infringement or piracy of the Product Formulas, except to the extent
caused by SafeScience's misuse.
(ii) SafeScience agrees and covenants to hold harmless and indemnify and defend
the Company, its subsidiaries, affiliates, officers, directors, employees,
agents and assigns, from and against any suits, actions, claims, losses,
demands, damages, liabilities, costs and expenses of any kind, including costs
and attorneys' fees for defending the same, which may arise or result from
SafeScience's use of the Product Formulas licensed hereunder, to the extent
SafeScience's actions constitute negligence or willful misconduct.
11. Termination. Notwithstanding anything otherwise contained in this Agreement,
The Company shall have the right to terminate the rights and license granted to
SafeScience hereunder upon thirty (30) days written notice to SafeScience
(unless a longer period is set forth hereinbelow), upon the happening of any one
or more of the following events; provided, however, (1) if SafeScience, within
said notice period, cures or otherwise terminates any of said events, said right
and license shall continue on in force as if said notice had not been given, or
(2) if SafeScience, within said notice period, contests the veracity of any of
said events, said right and license shall continue on in force until such time
as the veracity of said events shall be established by a final trier of fact,
from which no further appeal may be taken:
(i) if SafeScience fails or refuses to pay promptly any amount payable under
Section 6 when and as same shall become due and payable, and such default shall
continue for a period of sixty (60) days after written notice thereof has been
given by the Company to SafeScience;
(ii) if SafeScience should fail to comply with any other material requirement or
obligation of the license granted hereunder and such default shall not be cured
within sixty (60) days after receipt of written notice of default from the
Company, or if SafeScience does not take and diligently pursue reasonable steps
to cure such default if such default is of such a nature that a period of more
than sixty (60) days is required to cure;
(iii) SafeScience may terminate this license at any time, for any reason, upon
thirty (30) days' notice thereof to the Company.
12. Effect of Termination. Upon the termination of the license granted
hereunder, all rights of SafeScience under the license shall cease forthwith and
shall immediately be null and void and thereafter SafeScience shall cease using
the Product Formulas. Each party shall forwith deliver to the other party all
forms, procedures, documents, copies of formulations, and other Confidential
Information of the other party. Upon such termination, SafeScience shall remain
obligated to pay any outstanding license fees due under Section 6.
13. General Provisions.
(a) Relationship of Parties. No partnership, joint venture, employment, agency
or other relationship is formed, intended, or to be inferred under this
Agreement. Neither party to this Agreement shall make or authorize any
representation to the contrary.
(b) Survival of Remedies. During and after the term of this Agreement, each
party shall be entitled to all rights, remedies and protections available at law
and in equity. The parties recognize that irreparable injury may result to its
business and property if the other party breaches any of the terms of this
Agreement, and each party agrees that if it engages in any act in violation of
this Agreement, the other party shall be entitled, in addition to such other
remedies and damages as may be available, to seek equitable relief including
injunction prohibiting the breaching party from engaging in such act and
specific performance. Without limiting the generality of the foregoing, the
indemnification provisions of Section 10 of this Agreement shall survive any
termination of this Agreement.
(c) Disputes. Should a dispute arise relative to the terms or conditions of this
Agreement, the parties shall submit the dispute to binding arbitration in
Boston, Massachusetts pursuant to the rules then prevailing of the American
Arbitration Association. Any award made through the arbitration shall be
enforceable in any court of competent jurisdiction pursuant to uniform laws
regarding arbitration and the award may include an award of attorney's fees and
costs to the prevailing party.
(d) Waiver. The failure of either party to take any action under this Agreement,
or the waiver of a breach of this Agreement, shall not affect that party's
rights to require performance hereunder or constitute a waiver of any subsequent
breach.
(e) Notice. All notices required or permitted to be given or made under this
Agreement must be made in writing and delivered by certified mail, return
receipt requested. Mailed notices shall be addressed to the parties as their
addresses appear below, except that in the event written notice of a change of
address is made in accordance with this section, then such mailed notices shall
be addressed to the party in question at such new address.
If to Delta-Omega Technologies, Inc.:
000 Xxx Xxxx
Xxxxxxxxx, XX 00000
Attn:___________________
Telephone: (000) 000-0000
Fax: (000) 000-0000
With copies to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to SafeScience, Inc.:
00 Xx. Xxxxx Xxxxxx, Xxxxx 00
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, President
Telephone: (000) 000-0000
Fax: (000) 000-0000
With copies to:
B. Xxxxx Xxxxxxxx, Esq.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(f) Interpretation. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Massachusetts. The headings herein are
for reference only and shall not define or limit the provisions hereof.
(g) Entire Agreement. The recitals hereto are a part of this Agreement which
constitutes the entire agreement between the parties with respect to the subject
matter addressed herein, and all prior and contemporaneous agreements, whether
written or oral, as may relate to the same, are hereby superseded by this
Agreement.
(h) Modification. This Agreement may not be altered, modified, amended or
changed, in whole or in part, except by a writing executed by the parties.
(i) Successors. This Agreement shall be binding upon the parties and their
permitted assigns, corporate successors and representatives.
(j) Attorneys' Fees. In the event of any dispute which results in a suit or
other legal proceeding to construe or enforce any provision of this Agreement or
because of an alleged breach, default or misrepresentation in connection with
any of the provisions of this Agreement, the parties agree that the prevailing
party or parties (in addition to all other amounts and relied to with such party
or parties may be entitled) shall be entitled to recover reasonable attorneys'
fees and other costs incurred in any action or proceeding.
(k) Previous Agreement. This Agreement shall not be deemed to supersede the 1998
Agreement (as defined in Section 1) except in the case of a direct conflict
between the terms of this Agreement and the terms of the 1998 Agreement.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals as
of the date first above written.
SAFESCIENCE, INC. DELTA-OMEGA TECHNOLOGIES, INC.
By:_____________________________ By:_____________________________
Title:____________________________ Title:____________________________
APPENDIX A
Products included in royalty agreement between Delta Omega, Inc. and
SafeScience, Inc. and dated August __, 1999.
Agreed Product List
All Purpose Cleaner
Kitchen Cleaner
Shower Cleaner
Dish Detergent
Floor Cleaner
Window Cleaner
Bathroom Cleaner
Laundry Cleaner
Auto Dishwashing Gel
Outdoor Cleaner
