MARKETING, DISTRIBUTION AND SALES AGREEMENT
Between
Proton Laboratories, Inc.
And
Aqua Thirst, Inc.
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Contents Page
ARTICLE I Definitions 3
ARTICLE II Purpose And Management Of Collaboration 5
ARTICLE III Product Identification; Work Plans 7
ARTICLE IV Product Marketing And Implementation 9
ARTICLE V Marketing 11
ARTICLE VI Payments; Compensation 13
ARTICLE VII Intellectual Property Ownership 15
ARTICLE VIII Confidentiality 16
ARTICLE IX Term And Termination 17
ARTICLE X Dispute Resolution 18
ARTICLE XI Warranties 19
ARTICLE XII Infringement Indemnity 20
ARTICLE XIII Miscellaneous 21
ALLIANCE GUIDELINES 24
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MARKETING, DISTRIBUTION AND SALES AGREEMENT
THIS PRODUCT MARKETING, DISTRIBUTION AND SALES AGREEMENT (the "AGREEMENT")
is made and entered into this 12th day of February 2007 by and between Aqua
Thirst, Inc., a Delaware corporation ("Aqua Thirst"), and PROTON Laboratories,
Inc., a Washington corporation ("PROTON").
References in this Agreement to "schedules" refer to the documents attached
as schedules to this Agreement, all of which form part of this Agreement; and
unless otherwise indicated, references to "articles" or "sections" refer to the
corresponding numbered articles and sections of this Agreement.
BACKGROUND
(a) Aqua Thirst provides products, product marketing services,
commercialization solutions, distribution, sales and policy consulting services
to the manufacturing and marketing segment of the commercial industry worldwide.
(b) PROTON has developed certain products, patents, technology and
know how related to the same, and has plans and concepts for future products
that they desire to bring to market. PROTON requires the type of services
provided by Aqua Thirst.
(c) In consideration of the foregoing, PROTON and Aqua Thirst now
desire to work together in a commercial relationship for the purpose of bringing
to market all of PROTON'S products whether now existing or those to be developed
in the future.
NOW, THEREFORE, in consideration of their respective agreements as set
forth herein and hereinafter and of other good and valuable consideration, the
receipt and legal sufficiency of which they acknowledge, and both parties
intending to be legally bound, AQUA THIRST and PROTON agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
respective meanings set forth below:
(a) "AFFILIATE" of a Person means a Person controlling, controlled
by or under common control with such Person.
(b) "ALLIANCE" means and refers to the relationship established
between PROTON and AQUA THIRST by this Agreement.
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(c) "ALLIANCE GUIDELINES" means the alliance-wide guidelines
referred to in Section 2.2, which the parties intend to serve as primary
guidance for the Steering Committee in its administration of the transactions
contemplated by this Agreement.
(d) "CO-BRANDED AREA" means that portion of AQUA THIRST'S or
PROTON'S primary Internet presence which is devoted to the Alliance.
(e) "CONFIDENTIAL INFORMATION" means and includes all information
disclosed under this Agreement by either party to the other, provided that the
following shall not constitute Confidential Information: information which (1)
is known by the receiving party prior to disclosure by the disclosing party; (2)
is or becomes available publicly other than as a result of a breach of this
Agreement; (3) is marketed independently by the receiving party without the use
of or reliance on the disclosing party's Confidential Information; or (4) is
provided to the receiving party by a third party under no duty of
confidentiality to the disclosing party.
(f) "MARKETING PERSONNEL" means AQUA THIRST personnel performing
marketing services relating to a Product under Section 4.2 of this Agreement.
(g) "EXECUTIVE SPONSOR" has the meaning set forth in Section 2.4.
(h) "INTELLECTUAL PROPERTY RIGHTS" means trade secret,
confidentiality, patent, copyright, trademark, know-how, moral, and similar
rights of any type under the applicable laws of any governmental authority,
domestic or foreign, including without limitation all applications and
registrations relating to any of the foregoing.
(i) "INVESTIGATION PERIOD" has the meaning set forth in Section
3.1(a).
(j) "MARKS" means a party's trademarks, trade names, service
marks, service names, logos and trade dress.
(k) "PERSON" means any person or entity.
(l) "PLATFORM ENHANCEMENTS" has the meaning set forth in Section
7.1(c).
(m) "AQUA THIRST PLATFORM" means that certain technology used by
AQUA THIRST as of the Effective Date which serves as the basis for AQUA THIRST'S
Product based services, i. e. sales distribution and marketing services provided
to its customers.
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(n) "SPECIFICATIONS" means, with respect to any Product,
anticipated to be marketed by AQUA THIRST, the functional specifications
determined by the Steering Committee for such Product and reflected in the
corresponding Work Plan.
(o) "STEERING COMMITTEE" means and refers to the six-member
steering committee comprised of three designees from each party established
pursuant to Section 2.4 to manage the conduct of the transactions contemplated
by this Agreement.
(p) "TERM" means the term of this Agreement, as determined
according to Section 9.1.
(q) "PRODUCT" means any product or service marketed by AQUA THIRST
for or on behalf of PROTON under this Agreement, and which shall be marketed,
distributed and sold in connection with the AQUA THIRST Platform.
(r) "PRODUCT GROUPS" means the two product/service groups
referred to in Section 3.1(b) in which the parties intend to market and
commercialize Products, namely, Commercial Market detailing, and
direct-to-consumer.
(s) "WORK PLAN" means, with respect to any Product, the
marketing and sales plan, budget and schedule prepared pursuant to Section
3.1(c) in respect of such Product.
ARTICLE II
PURPOSE AND MANAGEMENT OF COLLABORATION
2.1 PURPOSE. Through performance of their respective obligations
under this Agreement, AQUA THIRST and PROTON agree to conceive, design,
implement, market, distribute, license, and sell Products and services based on
a portfolio of Products to be made available through a prominent Branding or
co-branded media available to AQUA THIRST on an EXCLUSIVE basis. The Products
the parties market in the Alliance as a foundation for these service offerings
will fall into two broad categories associated with the marketing, sales, and
distribution process referred to in this Agreement as "Market detailing," and
consists of "Commercial marketing" and "direct-to-consumer," respectively (the
"PRODUCT GROUPS"). The parties intend to commercialize the Product Groups on a
unit by unit or package (Commercial Retailer) basis to enable corresponding
efficiencies across the product marketing and commercialization process, except
as follows:
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a. There are certain relations that Proton currently has, they are,
(i) NIKE, (ii) Safeway, (iii) AMR, and (iv) Sharper Image, these
distribution sources if not closed within one hundred twenty (120)
days, by PROTON, of the acceptance of this agreement by PROTON shall
revert to AQUA THIRST as one of their distribution sources; and
b. There is an exclusive agreement between PROTON and a company
called E Water of Life regarding a veterinary product called ▇▇.
▇▇▇▇▇'▇ Formula, AQUA THIRST shall have no involvement with this
excluded product., which must be sold only for the Veterinary market.
2.2 ALLIANCE GUIDELINES. The parties intend to conduct the
activities contemplated by this Agreement according to the alliance guidelines
set forth in Schedule 2.2 concerning overall resource commitments, marketing
and sales schedules, and revenue sharing (the "ALLIANCE GUIDELINES"). The
Steering Committee may depart from the Alliance Guidelines in the Work Plan for
any Product or otherwise in connection with its administration of the Alliance.
Subject to any such departure, the Alliance Guidelines will control the parties'
relationship with respect to the subject matter covered thereby.
2.3 IMPLEMENTATION; RESOURCE ALLOCATIONS. The parties intend to
implement marketing of an initial portfolio of Products (referred to below as
the "Initial Product kit") by conducting the marketing activities contemplated
by Articles 3 and 4 and by allocating additional resources of the types and
amounts determined from time to time by the Steering Committee with reference to
the Alliance Guidelines.
2.4 STEERING COMMITTEE.
(a) The parties will organize a Steering Committee promptly after
execution of this Agreement. The membership of the Steering Committee shall be
composed of six members. The Steering Committee shall convene not less
frequently than monthly and employ such procedures as it shall determine from
time to time in good faith, and, except as otherwise specifically required by
this Agreement, shall act by unanimous consent.
(b) The Steering Committee will provide general oversight and
coordination of the parties' collaboration, and will be responsible for
identifying Products, overseeing creation of corresponding Work Plans, and
monitoring the parties' conduct of the Work Plan for each Product.
(c) The parties will resolve deadlock among the Steering Committee
through the Executive Review procedure described in Section 10.1(a)
below.
2.5 EXECUTIVE SPONSORS. Each party shall appoint a member of its
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senior management as an executive sponsor for the Alliance ("EXECUTIVE
Sponsor"). Executive Sponsors will be responsible for monitoring the Alliance
relationship, conducting periodic briefings for each other and their management
teams, and providing a defined means of communication with other senior
executives. Each party may change its Executive Sponsor at any time by written
notice to the other party.
ARTICLE III
PRODUCT IDENTIFICATION; WORK PLANS
3.1 IDENTIFICATION OF PRODUCTS.
(a) SELECTION BY STEERING COMMITTEE. The Steering
Committee will facilitate the initial review of potential Products for the
parties to market under this Agreement, in accordance with the general timelines
contemplated by the parties as described in the Alliance Guidelines. While the
parties anticipate that PROTON personnel will be primarily involved in the
identification of Products with appropriate support from AQUA THIRST personnel,
either party may propose a Product concept to the other, and any such proposal
agreed upon by the Steering Committee will constitute and be deemed a Product
for purposes of this Agreement.
(1) The parties will research, evaluate and agree on a base
set of Products (the "INITIAL PRODUCT KIT") during approximately the first six
(6) months after the Execution Date of this Agreement, as contemplated in the
Alliance Guidelines (the "INVESTIGATION PERIOD").
(2) The parties acknowledge that after determination of the
Initial Product kit, the parties may desire to market and commercialize
additional Products under this Agreement, and/or to create enhancements of
existing Products. The Steering Committee will facilitate review of proposals
for additional Products and enhancements of existing Products from time to time,
and any agreed-to projects shall be marketed as set forth in this Article III.
(3) AQUA THIRST will market each Product selected by the
Steering Committee, as set forth in the corresponding Work Plan, and PROTON will
pay AQUA THIRST for marketing activities for the Initial Product kit, as further
specified in each corresponding Work Plan and at rates determined according to
Section 6.1.
(b) CREATION OF WORK PLAN. Promptly after identification of any
Product under subsection (a) above, the parties shall collaborate in the
preparation of a Work Plan for such Product. Any Work Plan under this Agreement
must be unanimously approved by the Steering Committee. As applicable, each Work
Plan shall include, among other things:
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(1) The Specifications for the Product;
(2) Delivery and acceptance guidelines for the Product prior
to any commercial launch of the Product;
(3) Allocation of responsibility for the actions required for
marketing, implementation and sales of the Product;
(4) Uptime and related services and requirements;
(5) Establishment of the parties' respective corresponding
financial, personnel, and other resource commitments for the Product;
(6) Establishment of a budget; and
(7) Establishment of a schedule for carrying out the
marketing and sales activities for such Product.
3.2 RESTRICTIVE COVENANTS. Except with the other party's prior written
consent or as otherwise provided in this Agreement, neither party will undertake
directly or indirectly, or permit any of its Affiliates to undertake directly or
indirectly, its respective conduct as follows:
(a) During the term of this Agreement, PROTON will not promote,
distribute or provide access to its products or services related to its Business
through any Person other than AQUA THIRST; provided, however that PROTON (1) may
deploy its internal computer systems for internal purposes, (2) may continue to
operate its web presence and services offered through it, (3) may continue to
provide services through existing contractual arrangements for so long as it is
obligated to do so, and (4) may render client services through such client's
systems as requested by such client without solicitation by PROTON.
(b) During the term of this Agreement, AQUA THIRST will not
promote any third party in the same Business as PROTON or market, distribute or
provide access to any such company's services.
(c) During the term of this Agreement, AQUA THIRST will not
participate in or market for itself or any Person other than PROTON any product
designed to facilitate any PROTON Business activity.
(d) During the term of this Agreement, PROTON will not promote or
advertise products directly to consumers through any Person other than AQUA
THIRST.
(e) PROTON will not retain any other person or company in regards
to the marketing, distribution and sales of their products other than
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AQUA THIRST, Proton may however use any number of other sources to develop and
license products prior to the product becoming market ready. AQUA THIRST may, at
its sole discretion, consult and advise such companies and individuals in the
development stage and in such event AQUA THIRST shall be compensated therefore.
(f) AQUA THIRST will not Market any Restricted Products for, or
provide any Restricted Products to, any Person other than PROTON (1) at any time
during the Initial Roll-Out Period; or (2) at any time after the Initial
Roll-Out Period unless the Steering Committee has declined to pursue such
product after the written suggestion to that effect from AQUA THIRST, including
a clear statement by AQUA THIRST of its intent to undertake such activity.
(g) The steering committee shall review these restrictive
covenants six months after the effective date of this Agreement and annually
thereafter at the request of either party.
ARTICLE IV
PRODUCT MARKETING AND IMPLEMENTATION
4.1 GENERAL. Upon execution of each Work Plan, the parties will
implement and market the corresponding Product through the procedures set forth
in this Article 4.
4.2 MARKETING ACTIVITIES.
(a) PERFORMANCE. The parties will perform the work described in
this Agreement to market the Product in accordance with the Specifications and
the time frames set forth in the Work Plan (on a best efforts basis as to
schedule and budget), as they may be modified from time to time in accordance
with the terms of this Agreement.
(b) MARKETING RESOURCES. In performing marketing services under
this Agreement, AQUA THIRST shall allocate Marketing Personnel of a quality and
experience level at least equal to that allocated to any other AQUA THIRST
customer. PROTON shall have the right to request individual Marketing Personnel,
and AQUA THIRST will consider and shall use its commercially reasonable efforts
to use such individuals as Marketing Personnel. AQUA THIRST agrees to use its
commercially reasonable efforts to maintain continuity of leadership among the
Marketing Personnel in performing marketing services hereunder. In any
allocation of resources regarding AQUA THIRST'S marketing resources, AQUA THIRST
agrees that the Alliance shall receive preferred treatment in obtaining and
retaining Marketing Personnel, of at least a level of preference afforded to any
other AQUA THIRST customer.
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(c) MODIFICATIONS TO SPECIFICATIONS. Either party may request
modifications to the Specifications at any time during the marketing of a
Product. Upon both parties' approval, AQUA THIRST will perform the requested
modifications, and the Specifications and the Work Plan will be deemed amended
accordingly.
(d) PROJECT MEETINGS AND REPORTS. During the performance of
marketing services under this Section 4.2, the parties will conduct regular
meetings, in accordance with a schedule mutually agreed by the parties, to
review performance of the Alliance under this Agreement and to resolve any
problems. During the term of this Agreement, AQUA THIRST will provide PROTON
with periodic reports describing the progress of the marketing in the preceding
reporting period, in such a form as is agreed by the Steering Committee.
(e) REVIEW RIGHTS. PROTON will have the right, in its reasonable
discretion and at its cost, to review the progress of AQUA THIRST'S
performance of the marketing services at AQUA THIRST'S facilities. AQUA THIRST
will provide reasonable cooperation to PROTON in performing such reviews,
including without limitation providing PROTON with access to all non-privileged
work in progress, documents and other materials related thereto, as reasonably
requested by PROTON. PROTON may perform such reviews during AQUA THIRST'S normal
business hours by providing AQUA THIRST with at least five business days advance
written notice. In performing such reviews, PROTON will not unduly interfere
with the operation of AQUA THIRST'S other business activities, and PROTON will
comply with AQUA THIRST'S reasonable safety and security policies and
procedures.
(f) BETA AND PILOT PROGRAMS. The parties anticipate that
during the marketing of any given Product, the parties may desire to implement
beta or pilot programs prior to commercial launch. To the extent that the
parties desire to implement such programs, PROTON agrees to make available to
AQUA THIRST where ever practical a prototype version of the Products for AQUA
THIRST'S review during the performance of the marketing services, and AQUA
THIRST shall provide feedback regarding any nonconformities to Specifications or
other suggestions regarding the prototype for AQUA THIRST to incorporate into
the marketing services, all as further described in an applicable Work Plan.
(g) TECHNICAL CONTACTS. PROTON and AQUA THIRST will each designate
primary and alternate technical contacts (collectively, the "TECHNICAL
CONTACTS") as the primary individuals responsible for facilitating
communications between PROTON and AQUA THIRST regarding all technical matters
and for coordinating the marketing, packaging and testing of the Product. Each
party may change its respective Technical Contacts at any time by providing the
other party with no less than five (5) days' advance notice.
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4.3 IMPLEMENTATION/COMMERCIALIZATION OF PRODUCT. Upon launch of each
Product, AQUA THIRST shall promote the distribution of the Product as set forth
in the Work Plan guidelines.
4.4 CO-BRANDING. The Products shall be made available to customers in
the Co-Branded Area, or as otherwise agreed in the Work Plan, and shall be
branded under both parties' Marks. In all uses of the Products in which the
Marks of either party are displayed other than on AQUA THIRST'S web sites,
PROTON' Marks shall be displayed with substantially equivalent size, location
and prominence to AQUA THIRST'S Marks, except as otherwise agreed in a Work
Plan. AQUA THIRST'S web site shall feature a prominent link to the Co-Branded
Area, which link will display the PROTON' ▇▇▇▇. Within the Co-Branded Area,
PROTON Marks shall be displayed with substantially equivalent size, location and
prominence to AQUA THIRST'S Marks, except as otherwise agreed in a Work Plan.
ARTICLE V
MARKETING
5.1 MARKETING PRINCIPLES.
(a) General. AQUA THIRST will be the EXCLUSIVE marketing
distribution and sales force for each of PROTON'S products anticipated to be
brought to market, and will commercialize the Products and services provided on
a co-branded basis, except as otherwise agreed in a Work Plan.
(b) Integrated Assistance in Plan development and Sales Closings.
PROTON will provide appropriate sales and marketing assistance personnel to
develop an integrated marketing plan for the sales and services based on the
Product and Groups being offered. The Steering Committee will coordinate a plan
for marketing distribution and sales activities, structured generally (unless
otherwise determined by the Steering Committee) and may include a Project
Executive (with coordination authority over sales efforts to multiple targeted
customers), and a Relationship Executive (corresponding to the specific targeted
customer), and a sales/follow-up team. AQUA THIRST will coordinate all sales
team correspondence to each targeted customer through the corresponding Project
and Relationship Executives if established, to enable a unified, seamless
message from the sales team. Project Executives and Relationship Executives if
appointed will be designated from time to time by the Steering Committee.
(c) Bids. The parties agree AQUA THIRST shall have exclusive
control over all sales bids for products and services provided through and
marketed and sold under this Agreement. The sales teams shall, together with the
Steering Committee, determine on a bid-by-bid basis, issues relating to (1)
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the work to be performed by and the compensation to be paid, (2) pricing of the
services, (3) the contractual structure of any transaction with a customer
(through a prime and subcontractor arrangement or otherwise), and (4) such other
matters as are determined by the AQUA THIRST.
(d) Customer Targeting. PROTON from time to time may target
companies for AQUA THIRST sales of products and services based on the Product
Groups, and in particular will target an initial group of approximately 15 key
potential customers in connection with the Alliance's Initial Product kit
roll-out.
(e) Primary Sales Force Responsibility. AQUA THIRST will bear
responsibility for all sales force activities for all consumer and commercial
customers regarding any and all products and services related to the marketing
of and Market detailing for the various Product Groups.
(f) Package Orientation. The parties intend to market products and
services based on the Product Groups primarily as a Unit by Unit or single
package sale, including both commercial and end user (consumer) Groups, but
recognize that some customers may require the right to purchase products and or
services provided through the use of products either individually or on a
Product Group basis. The Steering Committee will be responsible to establish and
adapt price levels and models for custom sales.
5.2 SPECIFIC MARKETING ACTIVITIES. The Work Plan for each Alliance
Product will specify the manner (if unique) in which AQUA THIRST will market
such Alliance Product, along with the specific resources (if any) each party
will provide for that purpose. Each party will use commercially reasonable
efforts to conduct the marketing activities specified in each such Work Plan, in
the manner and on the schedule specified therein.
5.3 OTHER MARKETING ACTIVITIES.
(a) General. In addition to the marketing activities designated in
Work Plans for specific Products, AQUA THIRST and PROTON will engage in such
other marketing activities as the Steering Committee shall from time to time
determine, such as in connection with establishing a marketing infrastructure
for Alliance activities, preparing periodic marketing plans, marketing
strategies, general marketing collateral, or otherwise. The Steering Committee
may develop market Work Plans to address all such activities as it determines.
Each party will conduct its respective activities designated in each such Work
Plan in the manner and on the schedule specified therein.
(b) Procedures. The Steering Committee may market sales
procedures from time to time in its discretion for such matters as contact
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management and enhancement, coordinated bid preparation, and contracting, and
such other matters as the Steering Committee determines. AQUA THIRST will cause
its sales personnel to comply with all such procedures adopted by the Steering
Committee as in effect from time to time.
ARTICLE VI
PAYMENTS; COMPENSATION
6.1 PAYMENTS FOR MARKETING WORK. PROTON will compensate AQUA THIRST for
marketing activities as follows:
(a) AQUA THIRST shall receive monthly from PROTON a retainer fee
of Ten thousand ($10,000.00) dollars. Such retainer fee shall not
be paid however until the expiration of ninety (90) days from and
after this agreement becomes effective, and the retainer shall be
increased thereafter with the mutual approval of AQUA THIRST and
PROTON'S boards of directors.
(b) AQUA THIRST shall receive a sales commission on each product
sold of between 7 and 15 % of the product sale price. This
commission shall be based on the product and its market, and
shall be agreed upon mutually between the parties. The sales
commission at the discretion of AQUA THIRST may be taken in the
form of cash, stock in PROTON or a combination of the foregoing
but solely at the discretion of AQUA THIRST,provided however,
that AQUA THIRST may not accept stock in lieu of cash payment at
any time that acceptance of such stock would make AQUATHIRST or
its officers, directors or control persons a 10% or greater
stockholder in PROTON. In the event that AQUA THIRST should be
eligible for and accept stock in lieu of a cash payment, it is
agreed that such stock shall be accepted in payment therefore at
a discount of twenty-five (25%) percent from the then current
market rate, as determined over an average of the past 30 days
active trading in the securities. Such shares if accepted by AQUA
THIRST shall also carry and have piggy back registration rights.
(c) AQUA THIRST'S costs for marketing of the Products in the
Initial Product kit and of any post-release enhancements during
the year after any such Product is first made generally
available, PROTON shall pay AQUA THIRST at AQUA THIRST'S
"fully-loaded" marketing cost for Marketing Personnel (determined
as a function of salary and an overhead allotment agreed to by
the Steering Committee) and actual costs and expenses otherwise
incurred in carrying out a Work Plan approved by the Steering
Committee ("Costs").
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(d) For marketing of Products other than those in the Initial
Product kit, of any post-release enhancements for any such
Product, and of any post-release enhancements of Products in the
Initial Product kit following the year after any such Product is
first made generally available, PROTON shall pay AQUA THIRST such
marketing fees as are determined by the Steering Committee and
set forth in the applicable Work Plan.
(e) AQUA THIRST shall provide to PROTON monthly invoices for
Costs which shall provide all information reasonably necessary
for the computation or conformation of the payments described in
the invoices. Any payments for Costs will be paid by PROTON to
AQUA THIRST within thirty (30) days after PROTON' receipt of such
invoice. PROTON will pay interest of 1% per month on amounts not
paid within such 30 day period, unless PROTON delivers, in good
faith, notice to AQUA THIRST disputing such payment in reasonable
detail.
6.2 AUDITS. Each party will maintain records reasonably sufficient to
document and record its shared revenues (commissions) for Products sold; and
each shall have the right to audit the other's books and records on a reasonable
basis to confirm the accuracy thereof solely relative to shared revenues. The
parties will address any apparent payment discrepancies promptly and in good
faith, and the affected party promptly will correct any confirmed over- or
under-payment. Each party may perform such audits up to twice per calendar year
during the other party's normal business hours by providing the audited party
with at least five business days advance written notice. In performing such
audits, the auditing party will not unduly interfere with the operation of the
audited party's other business activities, and the auditing party will comply
with the audited party's reasonable safety and security policies and procedures.
6.3 OTHER COSTS OF PERFORMANCE. Except as otherwise specifically
provided in this Agreement, each party will bear the costs and expenses of
performing its obligations hereunder, neither party shall be obligated to pay
any taxes of the other or any other expenses for which the other party may be
liable based upon or in connection with the transactions contemplated by this
Agreement.
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ARTICLE VII
INTELLECTUAL PROPERTY OWNERSHIP
7.1 INTELLECTUAL PROPERTY RIGHTS. AQUA THIRST and PROTON agree and
acknowledge that as between AQUA THIRST and PROTON, ownership of Intellectual
Property Rights in the various intellectual properties associated with this
Agreement (whenever marketed) is as follows, subject to the various rights
granted in this Agreement (and without any duty to account to one another except
as specifically provided herein):
(a) Each party shall own all right, title, and interest in and to
all Intellectual Property Rights in its Confidential Information.
(b) PROTON will own all right, title, and interest in and to all
Intellectual Property Rights in the Products, all computer software if any
implementing the Products, and all documentation for Products (each of which
shall be deemed a "work made for hire" for purposes of the federal Copyright
Act); provided that AQUA THIRST shall be entitled to use all of the foregoing
during the term of, in the manner, to the extent, and for the purposes required
by this Agreement. AQUA THIRST hereby irrevocably transfers to PROTON all of
AQUA THIRST'S entire right, title and interest to all Intellectual Property
Rights in such items.
(c) AQUA THIRST will own all right, title, and interest in and to
all Intellectual Property Rights in the AQUA THIRST Platform and all Platform
Enhancements created by AQUA THIRST under this Agreement. For purposes of this
Agreement, "PLATFORM ENHANCEMENTS" means a modification to the AQUA THIRST
Platform which relates to the operating environment in which the Products and
other applications function.
7.2 FURTHER ASSURANCES. Each of AQUA THIRST and PROTON shall, and shall
cause its Affiliates to, cooperate with the other (or its designee(s)) and shall
execute documents of assignment, oaths, declarations, and other documents
reasonably requested by the other to confirm or effect the allocation or
facilitate the enforcement of the Intellectual Property Rights described in
Section 7.1 above. Each party will provide such cooperation and execution at no
charge to the other, other than reimbursement of its reasonable related
out-of-pocket expenses.
7.3 LICENSE TO MARKS. Each party will retain all right, title, and
interest in and to its Marks worldwide. Subject to the terms and conditions of
this Agreement, AQUA THIRST hereby grants to PROTON a royalty-free,
non-exclusive, non-transferable, worldwide license to use AQUA THIRST'S Marks in
connection with its marketing activities for the Products during the term of
this
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Agreement; provided that such use is in accordance with AQUA THIRST'S
then-current trademark usage guidelines. Subject to the terms and conditions of
this Agreement, PROTON hereby grants to AQUA THIRST a royalty-free,
non-exclusive, non-transferable, worldwide license to use the PROTON Marks in
connection with its marketing activities for the Products, including its use on
the Co-Branded Area, during the term of this Agreement; provided that such use
is in accordance with PROTON' then-current ▇▇▇▇ usage guidelines. Neither party
shall form any combination marks with the other party's marks. Neither party may
modify any of the other party's Marks without the other party's approval. Each
party hereby assigns to the other party all right, title and interest in the
other party's Marks, together with the goodwill attaching thereto that may inure
to it in connection with this Agreement or from its use of the other party's
Marks hereunder.
7.4 NO OTHER RIGHTS. Except as specifically provided in this
Agreement, neither party nor any of its respective Affiliates shall have any
right or license by virtue of this Agreement to use or exploit any Intellectual
Property Rights of the other party or any of the other party's Affiliates.
ARTICLE VIII
CONFIDENTIALITY
Each of AQUA THIRST and PROTON will hold and cause its respective
Affiliates to hold the other party's Confidential Information in confidence and
refrain from using any such Confidential Information other than for purposes of
performing its respective obligations under this Agreement. Each party may
disclose Confidential Information to its employees, contractors, and agents with
a need to know the Confidential Information who are under obligations not to use
or disclose the Confidential Information. Notwithstanding the foregoing, each
party and its respective Affiliates will be permitted to disclose the other
party's Confidential Information as and to the extent required by applicable
law, provided the party required to make any such disclosure notifies the party
whose Confidential Information is required to be disclosed as far in advance of
the required disclosure as is reasonably practicable under the circumstances and
cooperates with such party (if reasonably requested to do so, and at the
requesting party's expense) to secure confidential treatment for the required
disclosure. Nothing in this Agreement shall prohibit AQUA THIRST from using or
disclosing any information learned by its employees or retained in such
employees memory after their last exposure to materials containing Confidential
Information, to the extent such information comprises software programming,
Or Internet product marketing, or techniques applicable generally to AQUA
THIRST'S or PROTON'S business and products.
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ARTICLE IX
TERM AND TERMINATION
9.1 INITIAL TERM; RENEWAL TERM. This Agreement shall commence upon the
date specified above in the preamble and continue thereafter for ten (10)
years. At the end of the initial term, this Agreement shall renew automatically
for successive two (2) year periods, unless either AQUA THIRST or PROTON
notifies the other in writing of its intention to terminate this Agreement at
least one hundred eighty (180) days prior to the beginning of the applicable
renewal term.
9.2 TERMINATION
(a) Either party may terminate this Agreement if the other party
has defaulted in any material obligation under this Agreement and failed to cure
such default within sixty (60) days after written notice thereof from the
terminating party.
(b) Either party may terminate this Agreement by immediate written
notice if the other party becomes insolvent or if a court of competent
jurisdiction enters an order or decree in respect of such party under any
bankruptcy or similar law approving a petition for reorganization or appointing
a custodian for all or substantially all its assets or ordering the liquidation
of such party.
9.3 EFFECT OF TERMINATION. The parties' respective rights and
obligations under Section 6.3 (Audits), and Articles VII (Intellectual Property
Ownership), VIII (Confidentiality), and X (Miscellaneous) will survive any
expiration or termination of this Agreement. In the event of any termination or
expiration of this Agreement, each party shall deliver to the other all copies
of all Confidential Information of the other party in its possession or control
(including, without limitation, AQUA THIRST'S delivery to PROTON of all copies
of the Products in object and source code forms and all related documentation).
In the event of any termination or expiration of this Agreement, AQUA THIRST
shall offer to PROTON a service agreement for a period of up to two years, under
which AQUA THIRST shall continue to operate the Products on behalf of PROTON and
facilitate the transition of the Products to another platform, all on AQUA
THIRST'S then-current standard pricing and other terms and conditions. AQUA
THIRST shall also include a listing of all third party software contained in the
Products, and will sublicense or assign AQUA THIRST'S rights in such software to
PROTON where AQUA THIRST possesses the right to do so.
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ARTICLE X
DISPUTE RESOLUTION
10.1 DISPUTE RESOLUTION.
(a) Internal Review. In the event that a dispute, difference or
question arises pertaining to any matters which are the subject of the Alliance
("DISPUTE"), and either party so requests in writing, prior to the initiation of
any formal legal action, the following dispute resolution shall apply:
(1) The Steering Committee will use its good faith efforts to
resolve the Dispute within ten (10) days. If the Steering Committee is unable to
resolve the Dispute in such period, the Steering Committee will refer the
Dispute to the Executive Sponsors as set forth in subitem (2) below.
(2) For all Disputes referred to the Executive Sponsors from
the Steering Committee above, the Executive Sponsors shall use their good faith
efforts to resolve the Dispute within twenty (20) days after such referral. If
the Executive Sponsors are unable to resolve the Dispute in such period, the
Executive Sponsors will refer the Dispute to the Chief Executive Officers of
AQUA THIRST and PROTON as set forth in subitem (3) below.
(3) For all Disputes referred to the Chief Executive Officers
from the Executive Sponsors above, the Chief Executive Officers shall use their
good faith efforts to resolve the Dispute within twenty (20) days after such
referral.
(b) Mediation. In the event of a Dispute which cannot be resolved
by the Chief Executive Officers, either party may commence a non-binding
mediation to resolve the Dispute by providing written notice to the other party
(a "MEDIATION NOTICE") informing the other party of the dispute and the issues
to be resolved and containing a list of five (5) recommended individuals to
serve as the mediator. Within ten (10) business days after the receipt of a
Mediation Notice, the other party shall respond by written notice to the party
initiating mediation, providing a list of five (5) recommended individuals to
serve as the mediator and which adds additional issues to be resolved. The
recommended mediators shall be individuals with experience in products and the
healthcare technology industries and shall not be any employee, director,
shareholder or agent of either party or an Affiliate of either party, or
otherwise involved (whether by contract or otherwise) in the affairs of either
party. If, within twenty (20) business days after receipt of the Mediation
Notice, the parties shall have been unable to agree upon an individual to serve
as mediator, or to the extent the mediator selected by the parties is unable to
resolve the dispute, the dispute will be settled by final and binding
arbitration conducted in the manner described in subsection (c) below. If,
within twenty (20) business days after receipt of the
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Mediation Notice, the parties shall have agreed upon an individual to serve as
mediator, the mediator shall conduct a mediation in an effort to resolve the
dispute, employing commercially reasonable procedures selected by the mediator
in consultation with the parties, completing such mediation no later than sixty
(60) days after engagement.
(c) Arbitration. Binding arbitration, if necessary, shall be
conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, as in effect at the time of the arbitration hearing,
such arbitration to be completed in a ninety (90) day period. The arbitration
panel will be composed of three arbitrators, one of whom will be chosen by AQUA
THIRST, one by PROTON, and the third by the two so chosen. If both or either of
AQUA THIRST or PROTON fails to choose an arbitrator or arbitrators within
fourteen (14) days after receiving notice of commencement of arbitration, or if
the two arbitrators fail to choose a third arbitrator within fourteen (14) days
after their appointment, the American Arbitration Association shall, upon the
request of both or either of the parties to the arbitration, appoint the
arbitrator or arbitrators required to complete the panel. The decision of the
arbitrators shall be final and binding on the parties, and specific performance
may be ordered by any court of competent jurisdiction.
(d) Costs. The parties shall bear their own costs in preparing for
and participating in the resolution of any dispute under this Article, and the
costs of mediator(s) and arbitrator(s) shall be equally divided between the
parties.
ARTICLE XI
WARRANTIES
11.1 POWER AND AUTHORITY. AQUA THIRST represents and warrants to PROTON
that AQUA THIRST has full power, right and authority to enter into this
Agreement, to carry out its obligations under this Agreement, and to grant and
assign the rights granted and assigned to PROTON under this Agreement.
11.2 PROPRIETARY RIGHTS. AQUA THIRST further represents and warrants to
PROTON that:
(a) The Products will be the original work of AQUA THIRST or
licensed from third party vendors as agreed to by the Steering Committee;
(b) AQUA THIRST has not previously granted or assigned and will
not grant or assign any rights in the Products to any third party which are
inconsistent with the rights granted and assigned herein to PROTON; and
(c) Each of AQUA THIRST'S employees and consultants who has been
or will be involved in the marketing of the Products, or who will have access to
any Confidential Information of PROTON, will have signed, before beginning
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such involvement, an agreement with AQUA THIRST with respect to proprietary
rights and confidentiality which complies with the terms of this Agreement.
11.3 VIRUS WARRANTY. AQUA THIRST warrants that AQUA THIRST has
implemented all measures used in its normal business, including at a minimum
commercially reasonable measures, to ensure that the Products produced by it do
not contain any virus or any other contaminant, including but not limited to
codes, commands or instructions that may be used to access, alter, delete,
damage, disable, cause disruption of or otherwise interfere with PROTON' use of
the Products, other software, or any PROTON data or information.
11.4 SERVICES WARRANTY. AQUA THIRST warrants that it shall provide
services under this agreement in a professional, workmanlike and efficient
manner, consistent with the high industry standards.
11.5 WARRANTY DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
THIS AGREEMENT, AQUA THIRST HEREBY DISCLAIMS ALL WARRANTIES, OF ANY KIND,
EXPRESS OR IMPLIED INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE XII
INFRINGEMENT INDEMNITY
12.1 DUTY TO INDEMNIFY BY AQUA THIRST: AQUA THIRST will, at its
expense, defend, indemnify, hold PROTON harmless, from and against any damage,
liability, cost or expense (including reasonable attorneys' fees and court
costs) arising out of or resulting from any claim, suit or other proceeding in
which it is alleged that the Products or PROTON' exercise of its rights in the
Products, infringes the Intellectual Property Rights of any third party. In the
event of any such claim, PROTON will: (i) promptly notify AQUA THIRST in
writing, of the claim, suit or proceeding; (ii) provide AQUA THIRST with all
reasonable information and assistance, at AQUA THIRST'S expense, to defend or
settle such a claim, suit or proceeding; and (iii) grant AQUA THIRST with the
authority and control of the defense or settlement of such claim. Such indemnity
shall not extend to the extent that any infringement is caused by AQUA THIRST'S
conformance to PROTON requirements or specifications.
12.2 INJUNCTION REMEDIES FOR PROTON. If PROTON' use of any
Products is, or in AQUA THIRST'S opinion is likely to be, enjoined due to the
type of claim specified in Section 12.1, then AQUA THIRST , at its sole option
and expense, will either: (i) procure for PROTON a license to continue using the
Products in accordance with the terms of this Agreement; or (ii) modify the
allegedly infringing item to avoid the infringement, without impairing the
compliance of the Products with the Specifications; or (iii) if such is not
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reasonably possible, then instruct PROTON to cease use of the infringing item
and the parties will use the dispute resolution process set out in Article X to
adjust this Agreement or the Work Plan in question to compensate.
12.3 DUTY TO INDEMNIFY BY PROTON. PROTON will, at its
expense, defend, indemnify, hold AQUA THIRST harmless, from and against any
damage, liability, cost or expense (including reasonable attorneys' fees and
court costs) arising out of or resulting from any claim, suit or other
proceeding in which it is alleged that the requirements or specifications
produced by PROTON for the Products or AQUA THIRST'S exercise of its rights in
the requirements or specifications produced by PROTON, infringes the
Intellectual Property Rights of any third party. In the event of any such claim,
AQUA THIRST will: (i) promptly notify PROTON, in writing, of the claim, suit or
proceeding; (ii) provide PROTON with all reasonable information and assistance,
at PROTON' expense, to defend or settle such a claim, suit or proceeding; and
(iii) grant PROTON with the authority and control of the defense or settlement
of such claim. Such indemnity shall not extend to the extent that any
infringement is caused by AQUA THIRST'S method of conforming to PROTON
requirements or specifications.
12.4 INJUNCTION REMEDIES FOR AQUA THIRST If AQUA THIRST'S use of any
Products is, or in PROTON' opinion is likely to be, enjoined due to the type of
claim specified in Section 12.3, then PROTON, at its sole option and expense,
will either: (i) procure for AQUA THIRST a license to continue using the
requirements or specifications in accordance with the terms of this Agreement;
or (ii) modify the allegedly infringing item to avoid the infringement, or (iii)
if such is not reasonably possible, then instruct AQUA THIRST to cease use of
the infringing item and the parties will use the dispute resolution process set
out in Article X to adjust this Agreement or the Work Plan in question to
compensate.
ARTICLE XIII
MISCELLANEOUS
13.1 RELATIONSHIP OF PARTIES. AQUA THIRST and PROTON agree that their
legal relationship to one another under this Agreement is as independent
contractors. Nothing in this Agreement shall be deemed to create a joint
venture, agency, partnership, or other relationship between AQUA THIRST and
PROTON, and neither shall have any power by virtue of this Agreement to enter
into any contract or commitment on behalf of the other or to bind the other in
any respect whatsoever.
13.2 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by a written agreement (referring specifically to
this Agreement) of AQUA THIRST and PROTON.
13.3 SEVERABILITY. In the event one or more of the provisions of
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this Agreement or the application thereof to any circumstance are found to be
invalid or unenforceable to any extent by a court of competent jurisdiction, the
remaining provisions shall continue in full force and effect. If any provision
of this Agreement is found to be so broad as to be unenforceable, such provision
shall be interpreted to be only as broad as is enforceable.
13.4 NOTICES. All notices and other communications hereunder shall
be in writing and shall be delivered personally or by next-day courier or
telecopied with confirmation of receipt, to the parties at the addresses
specified below (or at such other address for a party as shall be specified by
like notice; provided that notices of a change of address shall be effective
only upon receipt thereof). Any such notice shall be effective upon receipt, if
personally delivered or telecopied, or one day after delivery to a courier for
next-day delivery.
If to PROTON, to:
Ed. Alexander
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to AQUA THIRST, to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇-▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
13.5 DESCRIPTIVE HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.6 ENTIRE AGREEMENT. This Agreement (including its various
Schedules) constitutes the entire agreement and supersedes all other prior
agreements and understandings, both written and oral, among the parties with
respect to its subject matter.
13.7 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without
giving effect to the provisions thereof relating to conflicts of law.
13.8 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.
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13.9 ASSIGNMENT. This Agreement and the rights, interests and
obligations hereunder shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns. Neither party may assign or otherwise transfer its rights, interests or
obligations under this Agreement without the other party's prior written consent
(not to be withheld or delayed unreasonably), except in connection with the
sale, transfer, or other disposition of all or any portion of its business or
assets in a transaction in which the transferee or successor to such business or
assets assumes the transferring party's corresponding obligations under this
Agreement.
13.10 PUBLICITY. Except as otherwise required by applicable law,
neither party shall refer to the other party in advertising, promotional
activities, or other public disclosures or announcements without such other
party's prior written consent, which shall not be withheld unreasonably.
13.11 LIMITATION OF LIABILITY. EXCEPT IN THE CASE OF FRAUD OR WILLFUL
OR INTENTIONAL MISCONDUCT, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES ARISING OUT OF
OR RELATED TO SUCH ACTION OR OMISSION, INCLUDING WITHOUT LIMITATION DAMAGES FOR
LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION,
AND THE LIKE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
13.12 FORCE MAJEURE. Neither party will be responsible for any
failure to perform its obligations under this Agreement due to causes beyond its
reasonable control, including without limitation acts of God, war, riot,
embargoes, acts of civil or military authorities, fire, floods, earthquakes,
accidents, strikes, or fuel crises, provided that such party gives prompt
written notice of such cause to the other party. The affected party's time for
performance will be extended for a period equal to the duration of the force
majeure.
In witness whereof, each of AQUA THIRST and PROTON has caused this
Agreement to be executed on its behalf by its respective officer duly authorized
to do so, all as of the date specified above in the preamble.
------------------------ -----------------
PROTON Laboratories, Inc. Aqua Thirst, Inc.
By ▇▇ ▇▇▇▇▇▇▇▇▇ CEO By ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ CEO
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ALLIANCE GUIDELINES
A. Master Marketing/Product Rollout Schedule
Page 24 of 24
