SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: December 4, 2001
INNOVATIVE MEDICAL SERVICES
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(Exact name of registrant as specified in its charter)
California 33-0530289
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1725 Gillespie Way, El Cajon, California 92020
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(Address of principal executive offices)(Zip Code)
(619) 596 8600
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(Registrant's telephone number, including area code)
Item 5. Other Information
Innovative Medical Services has settled the litigation between it and NVID
International (Pink Sheets: NVID) over the right to market and distribute
Axenohl(TM) worldwide. Under the terms of the agreement, NVID International has
dismissed its case against Innovative Medical Services and has assigned its
interest in the patent on Axenohl to Innovative Medical Services.
Under the agreement, Innovative Medical Services maintains the exclusive
worldwide right to manufacture, market and distribute Axenohl in all world
markets, and has entered into non-exclusive representative agreements with
Watertronics, Ltd., for the United Kingdom and Aqua Biotech S.A. de C.V. for the
Republic of Mexico. In return, NVID will receive 5% of Innovative Medical
Services' gross sales of Axenohl and 651,000 of the 700,000 shares of Innovative
Medical Services' common stock issued pursuant to the Settlement Agreement.
Item 7. Financial Statements and Exhibits.
(C) Exhibits: NVID Core Settlement Agreement effective November 15, 2001
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunder duly authorized.
INNOVATIVE MEDICAL SERVICES
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(Registrant)
By /s/ Michael L. Krall
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Michael L. Krall, President
December 6, 2001
CORE SETTLEMENT AGREEMENT
This Core Settlement Agreement (or "Agreement") is effective as of November
15, 2001 (the "Effective Date"), by and among Innovative Medical Services, Inc.
a California corporation ("IMS"), ETIH20 Corporation, a Nevada corporation
("ETI"), NVID International, Inc., a Delaware corporation ("NVID"), Watertronics
Ltd., an entity organized under the laws of the United Kingdom ("Watertronics"),
Aqua Bio Technologies, S. A. de C.V., a Mexican corporation ("Aquabiotech
Mexico"), Andrew B. Arata, ("Arata") individually, Sistecam S.A., a Costa Rican
corporation ("Sistecam"), David Larson, the President of NVID, individually
("Larson"), Aqua Bio Technologies Inc., a Delaware Corporation, ("Aquabiotech")
, Michael Redden, the Secretary and Treasurer of NVID, individually ("Redden"),
Steve Gordon, individually ("Gordon"), George L. Duren ("Duren") and Dr. Charles
Lewis ("Lewis") (the foregoing parties, individually a "Party" and collectively,
the "Parties") with regard to the following:
A. Axenohl and its diluted form, "Axen" (hereinafter "Axenohl"), is a
silver ion product with marketable disinfectant properties, invented by Arata.
Arata assigned the rights to Axenohl to NVID and it is the subject of U.S.
Patent No. 6,197,814; WIPO App. No. WO 99 / 18790, together with all trade
secrets as defined in California Civil Code section 3426.1 and the case law
interpreting such section, unpatented inventions, all patents pending, filed, or
granted in the United States and in all other countries, know-how and other
rights, related to Axenohl and all rights and incidents of ownership of NVID
related thereto, including, but not limited to the issued and/or applied for
patents listed on Attachment "A" to Exhibit "A," hereto (the "Patent").
B. NVID has entered into various marketing and/or manufacturing agreements
related to Axenohl with IMS and ETI that have become the subject of dispute (the
"Dispute").
C. As part of the Dispute, NVID claims that Watertronics and Aquabiotech
Mexico have certain license and/or manufacturing rights regarding Axenohl, which
are contested by IMS and ETI.
D. NVID has caused to be filed a state court action in Florida against IMS
and ETI seeking declaratory and other relief regarding the Dispute (Sixth
Judicial Circuit in and for Pinellas County, Case No. 01-2867-CI-21) ("Florida
Action").
E. IMS and ETI have caused the Florida Action to be removed to the United
States District Court for the Middle District of Florida (Tampa Division), Case
No. 8:01-cv-950-T-23MSS, and have applied to that federal court for an order
"staying" said action, or alternatively dismissing or transferring pursuant to
asserted dispute resolution agreement(s) of the Parties.
F. IMS and ETI have filed a claim regarding the Dispute before the American
Arbitration Association in San Diego County, California, and when NVID declined
to voluntarily participate in such arbitration, filed a "Petition for an Order
Compelling Arbitration" before Chief Judge Marilyn L. Huff in the United States
District Court for the Southern District of California (Case No. 01-CV-778H
(JAH)), which requested order to compel has been granted.
G. IMS, ETI and NVID have stipulated to Jack F. Fitzmaurice, and his
successors, as a neutral arbitrator (the "Arbitrator") in the now pending
American Arbitration Association arbitration in San Diego, civil matter no. 73
1990018601 LJP (the "San Diego Arbitration").
H. The Parties hereto have reached a global resolution of the Dispute, and
wish such agreement to be memorialized pursuant to this Agreement, as a final
and binding arbitration award subject to the continuing jurisdiction and
administration of the Arbitrator, and thereafter if necessary, and without the
further consent of the Parties, to be confirmed as a non-contestable and
non-appealable stipulated judgment by the United States District Court for the
Southern District of California, or of the Superior Court of the State of
California in and for the County of San Diego.
I. As a core consideration of the global resolution, NVID is to transfer
all Axenohl patent rights to IMS. IMS, upon receipt of such rights intends to
use its best efforts to promote and market Axenohl worldwide.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:
ARTICLE 1
ESCROW AND CLOSING
The transactions contemplated by this Agreement shall be closed as set
forth in this Article 1.
1.1 Deposit of Documents; Review Period. Within five (5) days after the
Effective Date, the Parties shall deposit all ancillary agreements, opinions and
other documents (the "Transaction Documents") with the Arbitrator and provide
copies of each to all other Parties to this transaction (the "Deposit Date").
The Parties shall have an additional period of five (5) days subsequent to the
Deposit Date (the "Review Period"), to review the Transaction Documents. In the
event a Party asserts that the Transaction Documents are materially deficient,
or do not conform with the requirements of this Agreement, the Party discovering
such deficiency (the "Objecting Party") shall give written notice to all Parties
including the effected Party (the "Responding Party") not later than the end of
the Review Period. The Responding Party shall have five (5) days subsequent to
the date the notice is received to cure such deficiency. In the event the
Responding Party is unable or unwilling to cure the deficiency, the Objecting
Party may elect to terminate this Agreement and hold the Responding Party or
Parties responsible for damages under the terms of this Agreement.
1.2 Closing. The Dispute and related matters will be settled among the
Parties and various documents evidencing the Parties' obligations as described
herein will be delivered to and filed with certain third parties or agencies on
such date as may be agreed upon by the Parties, but no later than November 30,
2001, at the offices of the Arbitrator, or at such other time and location as
the Parties may mutually agree (the "Closing"). The date on which the Closing
occurs is referred to herein as the "Closing Date."
1.3 Opening of Escrow. The transfer of the IMS Shares (as defined in
section 4.1) and confirmation of the transfer of the Patent shall be effected
through an escrow maintained either with the Arbitrator or at Computer Share
Trust Company of Lakewood, Colorado ("Escrow Holder"), which shall be opened at
Closing, or soon thereafter as practicable. For purposes of this Agreement, the
Escrow shall be deemed opened on the date ("Escrow Opening Date") upon which
Escrow Holder shall have received executed counterparts of this Agreement from
the Parties and the documents set forth in section 1.2.1 below. Escrow Holder
shall notify the Parties, in writing, of the date Escrow is opened. In addition,
the Parties each agree to execute, deliver and be bound by any reasonable or
customary supplemental escrow instructions of Escrow Holder or other instruments
as may reasonably be required by Escrow Holder in order to consummate the
transactions contemplated by this Agreement. Any such supplemental instructions
shall not conflict with, amend or supersede any portion of this Agreement. If
there is any inconsistency between such supplemental instructions and this
Agreement, this Agreement shall control.
1.3.1 Deposits to Escrow.
(a) IMS shall deliver certificates for the IMS Shares (as defined in
section 4.1), executed by the officers of IMS to the Arbitrator by November
26, 2001.
(b) NVID shall execute a notarized Assignment of Patent in the form
attached hereto as Exhibit "A," contemporaneously with the execution of
this Agreement, and deliver the original to IMS with a copy to the
Arbitrator. IMS shall forthwith file for the purpose of recording the
Assignment of Patent with the United States Patent and Trademark Office.
1.4 Release Date. Provided all conditions of this Agreement have been
satisfied, including but not limited to the execution by Larson, Redden and
Gordon of the Guaranty enumerated in Exhibit "G" hereof, the IMS Shares shall be
released to NVID, Arata, Duren, and Lewis on a date that is not more than five
(5) business days subsequent to the Closing Date (i.e., the "Release Date").
1.5 Costs and Expenses. The escrow fee of Escrow Holder and the Escrow
Holder's customary charges shall be divided equally, and promptly paid by IMS
and NVID. If, as a result of no fault of the Parties, Escrow fails to close, IMS
and NVID shall share equally all of Escrow Holder's fees and charges.
1.6 Closing Deliveries. 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.
ARTICLE 2
TERMINATION OF CONTRACTS
2.1 The tripartite agreement entitled "Manufacturing, Licensing and
Distribution Agreement" dated March 26, 2001 among IMS, NVID and ETI shall be
terminated and have no further force effect as of the Closing Date.
2.2 All previous agreements among the Parties (including the NVID-Sistecam
contract) related to the manufacturing and distribution of products covered by
the Patent, including but not limited to the agreements that NVID claims exist
between NVID and Watertronics and NVID and Aquabiotech Mexico regarding the
distribution of Axenohl shall be terminated as of the Closing Date.
2.3 All Parties shall bear their own expenses in connection with the
termination of the contracts as set forth in this Article. Each of the Parties
waives any right to receive any damages or compensation as a result of any
contract terminated pursuant to this Article, except as provided for herein.
Except as specifically referenced herein to the contrary, all prior payments
made by any Party under any contract terminated pursuant to this Article shall
remain the rightful property of the receiving party.
ARTICLE 3
OBLIGATIONS OF NVID
NVID shall deliver the documents and perform the obligations as set forth
in this Article 3 effective as of Closing.
3.1 Transfer of Patent. NVID shall deliver to IMS upon full execution
hereunder all right, title and interest in and to the Patent by executing and
delivering to IMS the Assignment of Patent.
3.2 Ownership of Trademarks and Regulatory Approval(s). The Parties agree
that the trademarks "Axenohl " and "Axen" are owned by IMS. NVID assigns and
transfers to IMS, effective upon full execution hereunder, all of NVID's right,
title and interest in and to any other marks used in connection with the Patent,
together with the goodwill of the business symbolized by the marks. NVID will
cooperate in transferring any and all regulatory approvals to IMS, including but
not limited to USDA approval.
3.3 Dismissal of Florida Action. NVID shall file the Dismissal with
Prejudice with regard to the Florida Action upon full execution hereunder, in
the form attached hereto as Exhibit "B."
3.4 Resolutions of NVID Board. NVID shall deliver to IMS the following
resolutions of the NVID board of directors (the "NVID Board"), certified by the
Secretary of NVID:
3.4.1 Resolutions approving this Agreement, the transactions
contemplated hereby and all of the obligations of NVID set forth herein.
3.4.2 Resolutions authorizing David Larson, President and Michael
Redden, Secretary, to execute this Agreement and all documents referred to
herein on behalf of NVID.
3.4.3 Resolutions authorizing David Larson, President or Michael
Redden, Secretary to take any and all actions, execute any documents or
instruments to implement the intent of this Agreement, without further
approval of the NVID Board.
3.4.4 Resolutions effective on or before the Closing Date evidencing
that the NVID Board is comprised of the following individuals:
David Larson Director Phil Lewis Director
Michael Redden Director Robert Edelson Director
Steven Gordon Director Keith Duffy Director
3.5 Costs of Arbitration. Any amounts charged by AAA from the inception of
the claim, and/or arbitration fees of the Arbitrator necessary to obtain the
final, binding arbitration award hereunder or to monitor compliance therewith
shall be divided equally and paid promptly by IMS and NVID.
3.5.1 Pursuant to payment requirements contained in the asserted
Tripartite Agreement of March 26, 2000, IMS has tendered certain checks to
NVID, those being checks nos. 6702, 6705, 6837, and 7015 in the aggregate
amount of $30,204.62.
3.5.2 IMS has taken the legal position that an acceptance of these
checks would be a "retention of benefits" under said disputed contract.
Pursuant to advice of counsel, NVID has maintained custody of the
referenced presented checks, but has declined to cash them. NVID is
desirous of negotiating these checks upon full execution. Concurrently,
NVID would like IMS to enter into a stipulated concession that IMS will
forgo any such "retention of benefits" legal argument (as to the referenced
checks) in the event that the arbitration should for whatever reason
continue "on the merits." IMS is willing to forego that legal argument, and
the parties agree on this point as follows:
a) Upon full execution, NVID may cash the referenced checks;
b) At Closing (on or about November 30, 2001), IMS will issue to
NVID a further $10,000 payment, which may be negotiated by NVID
immediately thereafter;
c) In the event that the escrow hereunder fails to close for any
reason such that the San Diego AAA arbitration proceeds "on the
merits," IMS shall receive a credit in the full amount of the
$40,204.62 aggregate check amount, applied to any payments
otherwise found to be due from IMS to NVID under the contractual
relationship between the parties as determined by the Arbitrator.
IMS shall receive an additional agreed upon credit in the amount
of $30,000, for a full cumulative credit of $70,204.62.
d) IMS agrees to forego as it relates to these checks only, any
legal argument as to "retention of benefits." IMS reserves the
right to assert its "retention of benefits" argument as to any
other consideration directly or indirectly received by NVID.
3.5 Termination of Existing Axenohl Contracts. NVID to cooperate in
terminating all Axenohl contract rights between or among ETI, IMS and NVID, and
those contracts between NVID and Aquabiotech Mexico, Sistecam, and Watertronics
such that this Core Settlement Agreement shall become the operable contractual
relationship among the Parties.
3.6 Claims of Lewis, Andrew Arata and George Duren. NVID authorizes IMS to
set-off from the IMS stock or sums due NVID under this Agreement and to pay
therefrom the agreed upon claims of Arata, Duren and Lewis against NVID, as
follows: to Lewis 14,000 of the 700,000 shares of IMS stock otherwise due NVID
pursuant to this Agreement and an amount equal to 1% of any sums due NVID from
IMS hereafter; 17,500 shares each to Arata and Duren of the 700,000 shares of
IMS stock otherwise due NVID pursuant to this Agreement; and, an amount equal to
2.5% each of the sums due NVID from IMS hereafter to Arata and Duren. NVID shall
hold IMS and ETI harmless for any obligation to Lewis, Arata and/or Duren,
arising out of revenue related to Axenohl flowing from IMS to NVID. Arata, Duren
and Lewis shall hold NVID harmless for all lawful payments received from IMS
under this Article. Arata, Duren and Lewis will and hereby do forever disclaim
any legal, equitable of otherwise right regarding Axenohl or the patents and
trademarks referenced herein, except as hereinafter specified in Exhibit "C,"
hereto.
3.7 Claim of Attorney Frijouf. NVID authorizes IMS to negotiate on its
behalf with and shall cooperate with IMS in negotiating for a discount or a
payment schedule with Attorney Frijouf, NVID's patent counsel. IMS shall be
responsible for the payment of the negotiated settlement amount with Attorney
Frijouf, and shall use best efforts to cause Attorney Frijouf to hold NVID
harmless.
3.8 Cooperation with IMS in Enforcing Patent. The Parties, including but
not limited to NVID and Arata, shall cooperate fully with IMS in enforcing and
defending the Patent, the Trademark(s) and any regulatory approvals. Upon
written request, Arata shall promptly execute any and all documentation required
of "the inventor" by any foreign or domestic patent or regulatory office in
conjunction with Axenohl related filings of IMS.
3.9 Release. NVID to execute and deliver the release in the form attached
hereto as Exhibit "C," fully and forever releasing IMS and ETI and remaining
parties from any and all liability (except for the requirements hereunder) as
set forth therein (the "Release").
3.10 Attorneys' Fees and Costs. NVID to bear all of its own attorneys' fees
and costs regarding the Florida Action, the San Diego Arbitration (and the
Petition to Compel procedure incident thereto), and the joint drafting and/or
implementation of this Agreement.
3.11 Specific Grant of Indemnity. NVID hereby agrees to indemnify IMS and
its successors and assigns in respect of any and all claims, losses, damages and
expenses which may be incurred by it as a result of or arising out of any claims
of ownership or interest in the Patent (including but not limited to claims of
license, assignment or security interest(s)) by any party, except as expressly
addressed in this Core Settlement Agreement. This Specific Grant of Indemnity is
to be personally guaranteed on a joint and several basis by individuals Larson,
Redden, and Gordon pursuant to the terms and conditions of the Guaranty attached
hereto as Exhibit "G."
ARTICLE 4
OBLIGATIONS OF IMS
IMS shall deliver the documents and perform the obligations as set forth in
this Article 4 effective as of Closing, or with respect to the Transfer of the
IMS Shares, at the Release Date.
4.1 Transfer of IMS Shares. In exchange for the transfer of the Patent and
other NVID consideration described herein, IMS shall, in accordance with the
procedure set forth in Article 1, at the Release Date, cooperate with the
custodian Arbitrator and/or Escrow Holder in the transfer of a total of 700,000
shares of its common stock to NVID or its assignees, Arata, Duren and Lewis (the
"IMS Shares"). The IMS Shares shall be validly issued, fully paid and
non-assessable and, except as to those shares to be transferred directly to
Arata, Duren and Lewis hereunder, shall be evidenced by certificates registered
in the name of NVID. NVID, Arata, Duren and Lewis acknowledge and agree that the
IMS Shares shall be subject to restrictions on transfer or sale under Rule 144
of the Securities Act of 1933, as amended, and shall bear a legend to that
effect as set forth in section 9.14 hereof. NVID, Arata, Duren and Lewis
acknowledge that the IMS Shares shall not be subject to any anti-dilution
feature, and that (i) the number of IMS Shares shall not be increased because
IMS has issued additional shares of its common stock (or any securities) as of
the Closing Date or as of the Release Date; and (ii) NVID is not entitled to
receive a certain percentage of the total IMS common stock outstanding. Provided
however, if any change is made in the IMS Shares prior to Closing or the Release
Date through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by IMS, the IMS Shares will be appropriately adjusted in the
type(s) and number of securities.
4.2 Royalty. IMS to pay to NVID a royalty (the "Royalty") of 5% of the
gross product sales revenues received by IMS in respect of the Patent, but shall
not include any charges for shipping, handling, or returns, credits and
applicable taxes ("Adjusted Gross Patent Revenues"). Unless the Royalty
obligation is terminated as hereinafter specified, the Royalty shall be payable
per this Agreement until March 6, 2018 ("Royalty Payment Term"). In the event
that customer(s) return or request a refund regarding Axenohl for which a
royalty has already been paid to NVID, the royalty for that sale will be
deducted from NVID's next royalty payment, or at IMS's election, upon notice,
NVID shall repay any such amounts to IMS within 30 days of written request
therefore. In the event that NVID is in breach of any material provision of this
Agreement, which breach shall continue uncured for a period of ten (10) days
after written notice to NVID by IMS, then IMS shall not be obligated to continue
to pay the Royalty unless and until such breach is cured, and IMS, in addition
to any and all other remedies allowed under law and/or equity, shall be entitled
to offset against any amounts otherwise owing NVID any damages which have been
proximately caused by such NVID breach(es).
4.3 Minimum Royalty. IMS guaranties to NVID that the Royalty shall not be
less than $1,000,000 for each of the periods (i) beginning on the date of this
Agreement and ending on July 31, 2004 and (ii) each fiscal year thereafter
(beginning on August 1, 2004) for the Term of the Royalty Payment (the "Minimum
Royalty"). If the Minimum Royalty for any period set forth in the preceding
sentence is less than $1,000,000, IMS shall have the right, in its sole and
absolute discretion, to either (x) pay NVID the Minimum Royalty in cash or IMS
common stock subject to the restrictions of Rule 144 (potentially piggybacked
under those circumstances referenced hereinafter section 10.6) equivalent to
prevailing market price when the Minimum Royalty is due, or (y) transfer the
Patent to NVID within 30 days of the end of the year for which the Minimum
Royalty is due. If IMS elects to transfer the Patent to NVID, IMS shall be
released of further obligation to pay the Royalty and Minimum Royalty. NVID
shall thereafter grant to IMS a license to manufacture and distribute products
covered by the Patent worldwide, reserving the non-exclusive right of NVID to
sell Axen(TM) products covered by the Patent worldwide. NVID will receive a
commission payment from IMS calculated at 5% of Adjusted Gross Sales.
4.4 Payment of Royalty. IMS shall pay NVID the Royalty on a quarterly
basis, such payments to be made within 30 days of the end of each IMS fiscal
quarter during the Royalty Payment Term. On the date(s) of such quarterly
payments, IMS shall concurrently provide NVID with a written statement
evidencing the Adjusted Gross Patent Revenues, and the calculation of the
Royalty. Commencing with the end of calendar 2004, and at the end of each
subsequent calendar year for the Term of the Royalty Payment, IMS shall true up
with NVID, such that NVID's royalty receipts for the applicable annual periods
equal at least the Minimum Royalty of $1,000,000.00.
4.5 Audit Rights. The following audit provision shall continue through the
term of this Agreement and shall survive the termination of this Agreement
insofar as applicable to royalty payment obligations accrued prior to such
termination. NVID shall have the right once every twelve months, to audit the
records and accounts of IMS for the limited purpose of establishing the amount
of the Royalty payable hereunder. A certified public accounting firm and paid
for solely by NVID shall conduct such audit. Any accounting firm retained for
this purpose shall be adequately bound to keep confidential all information of
IMS obtained during the course of or pursuant to the audit. In the event that
any underpayment shall be determined, such underpayment shall be corrected by
appropriate adjustment in payment that shall be due and payable within 30 days
of the date of the completion of the audit. In the event an audit reveals a
discrepancy in the amount owed to NVID and paid by IMS of at least 10%, the
discrepancy shall be corrected within thirty days and the reasonable expenses of
said audit shall be paid for by IMS.
4.6 Improvements. NVID, Larson, Redden, and Arata represent and warrant
that no known improvements in Axenohl exist as of the date hereunder. Should
NVID and/or Arata later engage in the development of an improvement in Axenohl
or the Patent (or the technology related in any way to either), NVID and/or
Arata shall promptly notify IMS in writing, and shall keep IMS completely
informed on a go-forward basis. Should NVID and/or Arata develop any Improvement
to Axenohl, which Improvement cannot legally be utilized without the consent of
the Holder of the Axenohl Patent, then NVID and/or Arata shall not attempt to
utilize the Improvement except on terms and conditions acceptable to IMS, and
with prior written permission. In the event the Improvement is "outside the
Patent," the parties will use best efforts to reach a joint venture agreement
regarding its use. If the Parties cannot agree on appropriate terms and
conditions, then the Arbitrator shall be empowered to select fair and binding
terms governing same. In no event shall NVID and/or Arata attempt to sell,
assign, license or market the Improvement without affording IMS a first right of
refusal.
4.7 Confidentiality. NVID will hold all IMS Confidential Information (as
defined below) in the strictest confidence, using such measures as it uses to
protect the confidentiality of similar information belonging to it, but in no
event shall use less than reasonable measures. All written (or otherwise
recorded) originals and copies of confidential information must be returned to
IMS or destroyed upon a written request (made at any time) by IMS. The Parties
will use Confidential Information solely to perform the activities under this
Agreement and will disclose Confidential Information only to their employees or
contractors with a need to know such information.
4.7.1 IMS Confidential Information. IMS Confidential Information shall
include all proprietary and confidential information such as marketing and
pricing information, supplier lists, and similar information disclosed by
IMS to NVID, or known by NVID related to the Patent prior to the date of
this Agreement. Notwithstanding the other provisions of this Agreement,
nothing received by NVID shall be considered IMS Confidential Information
which (i) is now available or becomes available to the public without
breach of this Agreement, (ii) is released in writing by IMS, or (iii) is
lawfully obtained from a Third Party or Parties.
4.8 Arbitration Claim and Award. IMS shall amend its San Diego Arbitration
claim against NVID such as to allow the entry of an arbitration award on terms
and conditions listed herein (the "Settlement"). Said arbitration award shall be
binding and subject if necessary to being confirmed as an enforceable judgment
by the United States District Court for the Southern District of California, or
by the Superior Court of the State of California in and for the County of San
Diego. The Parties agree that the Arbitrator shall retain exclusive jurisdiction
to monitor the compliance of all Parties with the terms and conditions of this
Core Settlement Agreement, and shall be empowered to rule on any dispute
regarding the interpretation and enforcement thereof, and make any subsequent
arbitral rulings which themselves will be binding and enforceable.
4.9 Termination of Contracts. IMS to cooperate in terminating all Axenohl
contract rights between or among ETI, IMS and NVID, such that this settlement
agreement shall become the operable contractual relationship among the Parties.
4.10 License. IMS shall grant Manufacturer's Representative Agreements
and/or license agreements to, Watertronics, Aquabiotech Mexico and Sistecam, on
the terms and conditions expressly stated in Exhibits "D," "E," and "F," hereto.
A. Aquabiotech Mexico
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Territory: Mexico, non-exclusive (except as to Rotoplas):
Term: Beginning 01-01-02, and continuing for three years with a cancellation
clause at each year-end for failure of Aquabiotech Mexico to meet any of the
following sales minimums of IMS' Axen products:
Year One: $150,000;
Year Two: $300,000 Sales in that Year;
Year Three: $500,000 Sales in that Year;
Renewable three-year option, yearly minimums of $1,000,000;
Regular Commission rate of 20% on adjusted gross;
Rotoplas commission rate 30%;
Aquabiotech Mexico shall cooperate with IMS by relinquishing designated
markets (e.g., dental) within the Territory if necessary for IMS to complete an
exclusivity agreement with a third party in a multinational transaction.
Consideration to be negotiated between IMS and Aquabiotech, and if agreement
cannot be reached, both parties agree to allow the Arbitrator to decide
appropriate terms and conditions under the circumstances.
B. Watertronics
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Territory: UK (Britain, Wales, Scotland and N. Ireland)
Term: Beginning 01-01-02, and continuing for three years with a cancellation
clause at each year-end for failure of Watertronics to meet any of the following
sales minimums of IMS' Axen products:
Year One: $50,000;
Year Two: $300,000 Sales in that Year;
Year Three: $500,000 Sales in that Year;
Renewable three-year option, yearly minimums of $1,000,000
Commission rate of 20% on adjusted gross;
Watertronics shall cooperate with IMS by relinquishing designated
markets (e.g., dental) within the Territory if necessary for IMS to complete an
exclusivity agreement with a third party in a multinational transaction.
Consideration to be negotiated between IMS and Watertronics, and if agreement
cannot be reached, both parties agree to allow the Arbitrator decide appropriate
terms and conditions under the circumstances.
C. Sistecam
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IMS, ETI, NVID and Sistecam to cooperate in canceling the existing
NVID/ETI/Sistecam contract. IMS to issue new contract to Sistecam on equivalent
terms and conditions. Sistecam shall cooperate with IMS by relinquishing
designated markets (e.g., dental) within the Territory if necessary for IMS to
complete an exclusivity agreement with a third party in a multinational
transaction. Consideration to be negotiated between IMS and Sistecam, and if
agreement cannot be reached, both parties agree to allow the Arbitrator to
decide appropriate terms and conditions under the circumstances.
4.11 Negotiations with Patent Counsel. Upon full execution hereunder, or as
soon thereafter as practicable, IMS shall enter into negotiations with NVID's
patent attorney, Robert Frijouf for the payment of fees due by NVID, and use
best efforts to obtain a release of NVID from attorney Frijouf by the Release
Date. A payment schedule will be negotiated and IMS and Attorney Frijouf will
hold NVID harmless for payment on expected discounted amount(s).
4.12 Resolutions of IMS Board. IMS shall deliver to NVID the following
resolutions of the IMS board of directors (the "IMS Board"), certified by the
Secretary of IMS:
4.12.1 Resolutions approving this Agreement, the transactions
contemplated hereby and all of the obligations of IMS set forth herein.
4.12.2 Resolutions authorizing Michael Krall, President and Dennis
Atchley, Secretary, to execute this Agreement and all documents referred to
herein on behalf of IMS.
4.13 Resolutions authorizing either Michael Krall, President or Dennis
Atchley, Secretary, to take any and all actions, execute any documents or
instruments to implement the intent of this Agreement, without further approval
of the IMS Board.
4.14 Subsequent Transfer of Patent. In the event that IMS transfers, sells
or assigns its ownership of the Patent, IMS shall in lieu of any Royalty and in
complete cancellation of any and all Royalty obligations hereunder, pay NVID as
received a percentage of the gross transfer proceeds from the Patent ("Patent
Transfer Fee"), as follows:
For Proceeds received in Year One of this Agreement 15%
For Proceeds received in Year Two of this Agreement 10%
For Proceeds received in Subsequent Years during the 5%
effective Term of this Agreement
4.15 Release. IMS to fully and forever release NVID, Larson, Gordon, Lewis,
Edelson, Duffy and Redden from any and all liability (except for the
requirements hereunder) as more fully set forth in the Release.
4.16 Attorneys' Fees and Costs. IMS to bear its own attorneys' fees and
costs regarding the Florida Action, and unless otherwise specifically indicated
herein, the San Diego Arbitration (and the Petition to Compel procedure incident
thereto), and the joint drafting and/or implementation of this Agreement.
ARTICLE 5
OBLIGATIONS OF ETI
ETI shall deliver the documents and perform the obligations as set
forth in this Article 5 effective as of Closing.
5.1 Arbitration Award. ETI shall amend its San Diego Arbitration claim
against NVID such as to allow the entry of a binding arbitration award on terms
and conditions listed herein.
5.2 Attorneys' Fees and Costs. ETI shall bear its own attorneys' fees
incurred in the Florida Action, in the San Diego Arbitration (and in the
Petition to Compel procedure incident thereto), and in the joint drafting and/or
implementation of this Core Settlement Agreement.
5.3 Termination of Contracts. ETI to cooperate in terminating all Axenohl
contract rights between or among ETI, IMS, Sistecam and/or NVID, such that this
Agreement shall constitute the sole operable contract regarding the subject
matter hereof among the Parties hereto.
5.4 Release. ETI to fully and forever release IMS and NVID, Watertronics,
Aquabiotech Mexico, Larson, Gordon, Lewis, Edelson, Duffy and Redden from any
and all liability (except for the requirements hereunder) as set forth in the
Release (Exhibit "C").
ARTICLE 6
OBLIGATIONS OF WATERTRONICS
Watertronics shall deliver the documents and perform the obligations as
set forth in this Article 6 effective as of Closing.
6.1 Arbitration Award. Watertronics shall cooperate with all Parties hereto
in the entry of a binding arbitration award, such that it becomes if necessary a
binding, final judgment entered by the United States District Court for the
Southern District of California, or by the Superior Court of the State of
California in and for the County of San Diego. In so doing, Watertronics
voluntarily accedes to the subject matter and in personam jurisdiction of the
American Arbitration Association (in the person of Arbitrator Jack Fitzmaurice,
or his duly appointed successor-in-interest) in San Diego, California, and of
the two referenced courts and submits to continuing jurisdiction of the
Arbitrator and/or the courts to monitor compliance hereunder.
6.2 Attorneys' Fees and Costs. Watertronics shall bear its own attorneys'
fees, if any, incurred in the Florida Action, in the San Diego Arbitration (and
in the Petition to Compel procedure incident thereto), and in the joint drafting
and/or implementation of this Core Settlement Agreement.
6.3 Termination of Contracts. Watertronics to cooperate with NVID to
terminate any rights Watertronics may have under any prior Axenohl license
agreement and will, and hereby does accept a superceding license agreement from
IMS on the stated terms and conditions of Exhibit "D," hereto.
6.4 Release. Watertronics to fully and forever release IMS, Sistecam,
Arata, Duren, Lewis, and ETI from any and all liability (except for the
requirements hereunder) as more fully set forth in the Release.
ARTICLE 7
OBLIGATIONS OF AQUABIOTECH MEXICO
Aquabiotech Mexico shall deliver the documents and perform the
obligations as set forth in this Article 6 effective as of Closing.
7.1 Arbitration Award. Aquabiotech Mexico shall cooperate with all Parties
hereto in the entry of a binding Arbitration Award, such that it becomes if
necessary a binding, final judgment entered by the United States District Court
for the Southern District of California, or by the Superior Court of the State
of California in and for the County of San Diego. In so doing, Aquabiotech
Mexico voluntarily accedes to the subject matter and in personam jurisdiction of
the American Arbitration Association (in the person of Arbitrator Jack
Fitzmaurice, or his duly appointed successor-in-interest) in San Diego,
California, and of the two referenced courts, and submits to the continuing
jurisdiction of the Arbitrator and/or the court(s) to monitor compliance
hereunder.
7.2 Attorneys' Fees and Costs. Aquabiotech Mexico shall bear any attorneys'
fees incurred by it in this Dispute, or in the joint drafting and/or
implementation of this Core Settlement Agreement.
7.3 Termination of Contracts. Aquabiotech Mexico to cooperate with NVID to
terminate any rights Aquabiotech Mexico may have under any prior Axenohl license
agreement and will, and hereby does, accept a superceding license agreement from
IMS on the terms and conditions set forth in Exhibit "E," hereto.
7.4 Release. Aquabiotech Mexico to fully and forever release IMS, Sistecam,
Arata, Duren, Lewis, and ETI from any and all liability (except for the
requirements hereunder), as more fully set forth in the Release (Exhibit "C.")
ARTICLE 8
OBLIGATIONS OF SISTECAM
Sistecam shall deliver the documents and perform the obligations as set
forth in this Article 6 effective as of Closing.
8.1 Arbitration Award. Sistecam shall cooperate with all Parties hereto in
the entry of a binding Arbitration Award, such that it becomes if necessary a
binding, final judgment entered by the United States District Court for the
Southern District of California, or by the Superior Court of the State of
California in and for the County of San Diego. In so doing, Sistecam voluntarily
accedes to the subject matter and in personam jurisdiction of the American
Arbitration Association (in the person of Arbitrator Jack Fitzmaurice, or his
duly appointed successor-in-interest) in San Diego, California, and of the two
referenced courts, and submits to the continuing jurisdiction of Arbitrator
and/or the court(s) to monitor compliance hereunder.
8.2 Attorneys' Fees and Costs. Sistecam shall bear any attorneys' fees
incurred by it in this Dispute, or in the joint drafting and/or implementation
of this Core Settlement Agreement.
8.3 Termination of Contracts. Sistecam to cooperate with NVID to terminate
any rights Sistecam may have under any prior Axenohl license agreement and will,
and hereby does, accept a superceding license agreement from IMS on the terms
and conditions in the License Agreement set forth in Exhibit "F," attached
hereto.
8.4 Release. Sistecam to fully and forever release IMS, ETI, Larson,
Redden, Lewis, Watertronics, Aquabiotech Mexico, and NVID from any and all
liability (except for the requirements hereunder), as more fully set forth in
the Release (Exhibit "C.")
ARTICLE 9
OBLIGATIONS OF INDIVIDUALS
9.1 Release. The individual Parties to this Agreement shall perform the
following obligations and deliver the following documents upon full execution:
9.1.1 Arata and Duren to fully and forever release NVID, Larson, Gordon,
Redden, IMS and ETI from any and all liability (except for the requirements
hereunder) as more fully as more fully set forth in the Release. Arata and Duren
to expressly disclaim any rights to the Axenohl patent(s) except as otherwise
enumerated herein.
9.1.2 NVID and each of its officers and Board of Director members to fully
and forever release Arata, Duren, Lewis, IMS and ETI from any and all liability
(except for the requirements hereunder) as more fully set forth in the Release.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES OF IMS
IMS represents and warrants to all other Parties that the following are
true and correct as of the date hereof and as of the Closing Date.
10.1 Organization, Good Standing, Power, etc. IMS (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California; (ii) is qualified or authorized to do business as a 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.
10.2 Articles of Incorporation and Bylaws. Prior to execution of this
Agreement by the Parties hereto, IMS has furnished to NVID's representatives, if
requested, complete and correct copies of (i) its Articles of Incorporation, as
amended to date, and (ii) its Bylaws, as amended to date. IMS' Articles of
Incorporation and Bylaws are in full force and effect, and they are not in
violation of any of the provisions thereof.
10.3 Capitalization. The authorized capital stock of IMS consists solely of
20,000,000 shares of Common Stock, no par value, (the "IMS Common Stock"), of
which, on the date hereof 6,416,939 shares are issued and outstanding. In
addition the Company has 5,000,000 shares of Preferred Stock authorized, none of
which are presently outstanding. At the Release Date 700,000 shares of IMS Rule
144 Common Stock will have been lawfully and validly issued collectively to
NVID, Arata, Duren, and Lewis. All of such issued and outstanding shares of the
IMS 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.
10.4 Authorization of Agreement. This Agreement and each of the documents
that IMS will deliver or file as required by this Agreement (the "IMS
Documents") has been or will be at Closing, duly and validly authorized,
executed and delivered by IMS.
10.5 No Adverse Changes. Since the date of IMS' most recent financial
statements, there has been no material adverse change in IMS' financial
condition, assets, liabilities, or business.
10.6 Piggyback Registration Rights. If at any time or from time to time
within six months from the date of this Agreement, IMS shall determine to
register securities for its own account for a public offering or the account of
any of its stockholders to publicly sell their securities, other than a
registration on Form S-1 or S-8 relating solely to employee stock option or
purchase plans, IMS will promptly notify NVID of such registration and if NVID
notifies IMS of its desire to be included in such registration within five
business days of IMS's notice to NVID, IMS shall include the IMS shares issued
to NVID in such registration. In the event no such registration statement is
filed within six months from the date of this Agreement, IMS shall file a
registration statement for the shares issued to NVID to allow the public sale
thereof on or before the 180th day from the date of this Agreement. IMS reserves
the right to include securities for its own account for a public offering or the
account of any other of its stockholders to publicly sell their securities in
such registration statement. IMS at its expense will keep such registration
effective for a period of 180 days or until NVID has completed the distribution
described in the registration statement relating thereto, whichever first
occurs; and furnish such number of prospectuses and other documents incident
thereto as NVID from time to time may reasonably request.
10.6.1 Underwriting Conditions. If the registration is for a public
offering involving an underwriting in excess of $2,500,000, IMS shall so
advise NVID. In such event the right of NVID to registration pursuant to
this Section 10.6 shall be conditioned upon NVID's entering into an
underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting by IMS. Notwithstanding any
other provision of this Section 10.6 except the affirmative obligation to
file a separate registration for the NVID shares on or before the 180th day
from the date of this Agreement, if the underwriter determines that
marketing factors require a limitation of the number of shares to be
underwritten, , the underwriter may limit the number of IMS Shares issued
to NVID to be included in the registration and underwriting, or may exclude
the IMS Shares issued to NVID entirely from such registration and
underwriting.
10.6.2 Expenses of Registration. All expenses incurred in connection
with any registration pursuant to this Section 10.6 shall be borne by the
Company except IMS shall not be required to pay fees of legal counsel of
NVID acting on behalf of NVID as a selling securities holder.
ARTICLE 11
REPRESENTATIONS AND WARRANTIES OF NVID
NVID represents and warrants to all other Parties that the following
are true and correct as of the date hereof and as of the Closing Date:
11.1 Organization, Good Standing, Power, etc. NVID (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
State 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.
11.2 Authorization. This Agreement, the Assignment of Patent and each of
the documents that NVID will deliver or file as required by this Agreement (the
"NVID Documents") have been or will be at Closing duly and validly authorized,
executed and delivered by NVID. No authorizations or approvals of the
shareholders, board of directors, or officers, other than those taken as set
forth in the resolutions set forth in Section 3.4 hereof are required in order
for NVID to execute and deliver the NVID Documents and consummate the
transactions contemplated thereby. The NVID Documents are enforceable against
NVID in accordance with the respective terms thereof.
11.3 Litigation. With the exception of the existing litigation against IMS
now pending before the U.S. District Court in the Middle District of Florida and
the pending San Diego Arbitration, 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 NVID
threatened, against, relating to or affecting NVID or any of their properties or
business, or the transactions contemplated by this Agreement; nor to the
knowledge of NVID 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 NVID, or the transactions
contemplated by this Agreement. Neither NVID nor any officer, director, partner
or employee of NVID, 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 NVID. There is not in existence at present any order, judgment or decree of
any court or other tribunal or any agency enjoining or requiring NVID to take
any material action of any kind or to NVID and their respective business,
properties or assets are subject or bound. NVID 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 NVID's operations or
affairs as they relate to NVID's obligations hereunder.
11.4 Ownership of Patent. As of the date hereof, and as of the date of
effective Assignment of the Patent to IMS, NVID shall own the Patent, free and
clear of any liens, encumbrances, escrows, licenses, conflicting or undisclosed
prior art, charges, pledges, options, mortgages, assignments, security
interests, claims, indentures, licenses, security agreements, restrictions
(whether on sale, transfer, disposition, or otherwise), defects of title,
irregularities of title or other imperfection of title of every type and
description, whether imposed by law, agreement, understanding, or otherwise
("Encumbrance"). Upon delivery to IMS of the Assignment of Patent, IMS will
acquire good and indefeasible title to the Patent, free and clear of any
Encumbrances except as stated herein.
11.5 Other Assets. NVID owns other assets, the fair market value of which
equal or exceed the fair market value of the Patent, and will continue to own
such other assets after Closing.
11.6 Investment Representation. NVID, Arata, Duren and Lewis are acquiring
shares of IMS Common Stock issuable hereunder for their own respective accounts
and agree not to distribute any shares issuable thereunder within the meaning of
the Securities Act of 1933 (the 1933 Act), except as otherwise provided herein,
unless an appropriate registration statement has been filed with the SEC or
unless an exemption from registration under the 1933 Act is available according
to an acceptable opinion(s) of counsel for, as applicable, NVID, Arata, Duren
and/or Lewis provided to IMS. Each certificate for shares issued shall be
stamped or otherwise imprinted with the following or a substantially similar
legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") nor
any state securities laws. These shares may not be offered for
sale, sold or otherwise transferred except pursuant to an
effective registration statement under the Act or pursuant to
an opinion of counsel acceptable to IMS that an exemption from
such registration is available."
The foregoing restriction on transfer shall remain in existence for the
applicable period, as set forth in Rule 144 after the expiration of which all
shares then owned or thereafter acquired pursuant to this Agreement shall be
registered on the books of IMS without any further restraint of alienation. Any
shares issued containing the foregoing Restrictive Legend may, subject to the
requirements of Rule 144 and applicable state and federal law, be exchanged for
shares without Restrictive Legend at any time after the expiration of two (2)
year from the date of The Release Date at the option of the holder, provided the
holder is not an "affiliate" of IMS at the time of such request. By execution of
this Agreement, NVID, Arata, Duren and Lewis represent and warrant that they
each have sufficient investment sophistication and ability to take the financial
risks associated with this transaction.
ARTICLE 12
REPRESENTATIONS AND WARRANTIES OF AQUABIOTECH MEXICO
Aquabiotech Mexico represents and warrants to all other Parties that
the following are true and correct as of the date hereof and as of the Closing
Date:
12.1 Organization, Good Standing, Power, etc. Aquabiotech Mexico (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the Republic of Mexico 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.
12.2 Authorization. This Agreement, and each of the documents that
Aquabiotech Mexico will deliver or file as required by this Agreement (the
"Aquabiotech Mexico Documents") have been or will be at Closing duly and validly
authorized, executed and delivered by Aquabiotech Mexico. No authorizations or
approvals of the shareholders, board of directors, or officers, other than those
taken are required in order for Aquabiotech Mexico to execute and deliver the
Aquabiotech Mexico Documents and consummate the transactions contemplated
thereby. The Aquabiotech Mexico Documents are enforceable against Aquabiotech
Mexico in accordance with the respective terms thereof, and shall be executed by
authorized representative, Director General Federico Rodriquez.
ARTICLE 13
REPRESENTATIONS AND WARRANTIES OF WATERTRONICS
Watertronics represents and warrants to all other Parties that the
following are true and correct as of the date hereof and as of the Closing Date:
13.1 Organization, Good Standing, Power, etc. Watertronics (i) is a
corporation duly organized, validly existing and in good standing under the laws
of The United Kingdom 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.
13.2 Authorization. This Agreement, and each of the documents that
Watertronics will deliver or file as required by this Agreement (the "
Watertronics Documents") have been or will be at Closing duly and validly
authorized, executed and delivered by Watertronics. No authorizations or
approvals of the shareholders, board of directors, or officers, other than those
taken are required in order for Watertronics to execute and deliver the
Watertronics Documents and consummate the transactions contemplated thereby. The
Watertronics Documents are enforceable against Watertronics in accordance with
the respective terms thereof, and shall be executed by authorized
representative, Managing Director Richard M. Goodall.
ARTICLE 14
REPRESENTATIONS AND WARRANTIES OF INDIVIDUALS
Arata, Duren, Gordon, Larson, Lewis and Redden (the "Individual
Parties") each represents and warrants to all other Parties that the following
are true and correct as of the date hereof and as of the Closing Date:
14.1 This Agreement, and each of the documents that each of the Individual
Parties, will respectively deliver or file as required by this Agreement (the
"Individual Party Documents") have been or will be at Closing duly and validly
authorized, executed and delivered by the respective Individual Parties. No
authorizations, approvals or other actions, other than those taken are required
in order for the Individual Parties to execute and deliver the Individual Party
Documents and consummate the transactions contemplated thereby. The Individual
Party Documents are enforceable against the Individual Parties, respectively, in
accordance with the respective terms thereof.
ARTICLE 15
SPECIAL COVENANTS
15.1 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 his or its attorney shall
be returned to the other Party and all such information so received shall be
treated as confidential.
15.2 Conduct of Business. Upon full execution hereunder, IMS and NVID shall
each conduct their business in the normal course, and in accord with the terms
and conditions of this Core Settlement Agreement and its appended Exhibits.
ARTICLE 16
CONDITIONS PRECEDENT TO OBLIGATIONS OF PARTIES
16.1 Conditions Precedent to Obligations of NVID. The obligations of NVID
hereunder are subject to fulfillment, or waiver thereof by NVID, prior to or at
the Closing of each of the following conditions:
(a) Closing Date. The documents are approved and accepted by all
Parties as of the scheduled date of November 30, 2001.
(b) Representations and Warranties. The representations and warranties
of IMS shall be true and accurate in all material respects as of the
Closing Date.
(c) Performance. IMS and ETI shall have performed and complied with
all agreements and conditions required by this Agreement to be performed or
complied with by them prior to or at the Closing.
(d) No Adverse Changes. There shall not have been, since the date of
the latest audited financial statements of IMS, any "Material Adverse
Change," as defined below, in IMS' financial condition, assets, liabilities
or business. A "Material Adverse Change" shall mean any change, effect or
circumstance that (i) is materially adverse to the financial condition or
results of operations of the business of IMS (provided, however, that for
purposes of determining whether there has been a "Material Adverse Change"
with respect to IMS (A) any adverse change resulting from or relating to
general business or economic conditions affecting the economy as a whole
shall be disregarded, (B) any adverse change resulting from or relating to
conditions generally affecting the industries in which IMS or its customers
or suppliers compete or participate shall be disregarded and (C) any
adverse change resulting from or relating to the announcement, disclosure
or pendency of the transactions contemplated by this Agreement shall be
disregarded), or (ii) would prevent IMS or NVID, as the case may be, from
carrying out its obligations under this Agreement.
(e) Opinion of IMS' Counsel. IMS shall have delivered to NVID an
opinion of IMS' counsel, Dennis Brovarone, Attorney at Law, dated the
Closing Date to the effect that: (i) IMS 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 thereunder; (ii) IMS is duly qualified to do business as a
corporation 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 and
each of the IMS Documents have been duly authorized by all necessary
corporate action on the part of IMS, have been duly executed and delivered
by IMS and constitute the legal, valid and binding obligations of IMS
enforceable in accordance with the respective terms thereof, except as
enforceability thereof may be limited by the insolvency or other laws
affecting the rights of creditors and the enforcement of remedies; (iv) IMS
has prepared and filed with the SEC all periodic reports required of it
under the 1934 Act; (v) the Shares issuable hereunder have been duly
authorized and will be validly issued; fully paid and non-assessable with
no personal liability attaching to the ownership thereof; (vi) neither the
execution, delivery and performance by IMS of this Agreement, the IMS
Documents, nor compliance by IMS 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 IMS or any agreement or instrument known to such counsel to which
IMS is a Party or by which IMS or any of its properties or assets are
bound; (vii) there are no actions, suits or proceedings pending or, to the
knowledge of such counsel, threatened against IMS 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 IMS or which questions the validity of this
Agreement or the Shares issuable hereunder. In rendering his opinion,
counsel shall be allowed to rely on written representations of officers and
directors of the Company as to factual matters.
(f) Current Status with Securities and Exchange Commission. IMS shall
have prepared and filed with the SEC all periodic reports required under
the 1934 Act pursuant to Section 12(g) thereof.
(g) Due Diligence. NVID shall have completed and be satisfied with its
due diligence investigation of the representations and warranties of IMS.
16.2 Conditions Precedent to Obligations of IMS. The obligations of IMS
hereunder are subject to fulfillment, or waiver thereof by IMS, prior to or at
the Closing of each of the following conditions:
(a) Closing Date. The documents are approved and accepted by all
Parties as of the scheduled date of November 30, 2001.
(b) Representations and Warranties. The representations and warranties
of NVID made pursuant to Article 11 above, shall be true and accurate in
all material respects as of the Closing Date.
(c) Performance. NVID 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 including but not limited
to:
(d) No Adverse Changes. There shall not have been, since the date of
the latest audited financial statements of NVID, any Material Adverse
Change (as defined below) in its financial condition, assets, including the
Patent, liabilities or business. A "Material Adverse Change" shall mean any
change, effect or circumstance that (i) is materially adverse to the
financial condition or results of operations of the business of NVID
(provided, however, that for purposes of determining whether there has been
a "Material Adverse Change" with respect to NVID (A) any adverse change
resulting from or relating to general business or economic conditions
affecting the economy as a whole shall be disregarded, (B) any adverse
change resulting from or relating to conditions generally affecting the
industries in which NVID or its customers or suppliers compete or
participate shall be disregarded and (C) any adverse change resulting from
or relating to the announcement, disclosure or pendency of the transactions
contemplated by this Agreement shall be disregarded), or (ii) would prevent
NVID, as the case may be, from carrying out its obligations under this
Agreement.
(e) Opinion of NVID's Counsel. NVID shall have delivered to IMS, an
opinion of their counsel, Thomas P. McNamara, Attorney at Law, dated the
Closing Date to the effect that: (i) NVID is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, have all requisite power to carry on its business as now being
conducted and to execute, deliver and perform this Agreement and to perform
their obligations thereunder; (iii) this Agreement and each of the NVID
Documents have been duly authorized by all necessary corporate action on
the part of NVID, have been duly executed and delivered by NVID and
constitute the legal, valid and binding obligations of NVID, enforceable in
accordance with the respective terms thereof, 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 NVID of this Agreement, the NVID Documents, nor
compliance by NVID with the terms and provisions thereof, will conflict
with, or result in a conflict with the Certificate of Incorporation or
Bylaws of NVID. In rendering their opinion, counsel shall be allowed to
rely on written representations of officers and directors of the Company as
to factual matters.
(f) Due Diligence. IMS shall have completed and be satisfied with its
due diligence investigation of the representations and warranties of NVID.
16.3 Conditions Precedent to the Release Date. IMS shall, prior to the
Release Date, have received fully executed original signatures from all Parties,
and the Arbitrator shall have issued a binding arbitration award consistent with
the terms and conditions of the Core Settlement Agreement and its Exhibits.
ARTICLE 17
INDEMNIFICATION
The Parties shall indemnify each other as provided in this Article.
17.1 Indemnity Obligations. To the fullest extent permitted by law, each
Party (the "Indemnifying Party") agrees to defend, indemnify and hold harmless
all other Parties, and their respective owners, shareholders, controlling
persons, parent and subsidiaries, affiliates, officers, directors, attorneys,
agents and employees (the "Indemnified Parties") from and against any and all
claims, defense costs, including attorneys' fees, damages, and other
liabilities, to the extent arising from or in any way related to (i) the breach
by the Indemnifying Party of any of its obligations or performance required by
this Agreement and (ii) the failure of the Indemnifying Party's representations
and warranties to be true and correct either when made, as of the date of
Closing, or thereafter.
ARTICLE 18
MISCELLANEOUS
18.1 Dispute Resolution. The Parties agree that the American Arbitration
Association of San Diego California (in the person of the Arbitrator) shall
maintain exclusive jurisdiction over any questions concerning the interpretation
or enforcement of this Agreement and all of its component exhibits. Should legal
action to enforce this Agreement, or any portion hereof, be commenced, the
prevailing party to such binding arbitration shall be entitled to recover, in
addition to any award by the arbitrator, its attorney fees incurred in such
action.
18.2 Notices. Unless otherwise specifically provided in this Agreement, all
notices or other communications required or permitted under this Agreement shall
be in writing, and shall be personally delivered or sent by registered or
certified mail, postage prepaid, return receipt requested, or sent by facsimile,
provided that the fax cover sheet contains a notation of the date and time of
transmission, and shall be deemed received: (i) if personally delivered, upon
the date of delivery to the address of the person to receive such notice, (ii)
if mailed in accordance with the provisions of this paragraph, two (2) business
days after the date placed in the United States mail, and (iii) if mailed other
than in accordance with the provisions of this paragraph or mailed from outside
the United States, upon the date of delivery to the address of the person to
receive such notice, or (iv) if given by facsimile, when sent. Notices shall be
given at the following addresses:
If to IMS or ETI: 1725 Gillespie Way
El Cajon, CA 92020
Attention: Michael Krall
Fax No.: 619-596-8790
If to NVID, Aqua Bio Technologies Inc., 28163 U.S. 19 N., Suite 302
Gordon, Larson, Lewis, Duffy, Edelson Clearwater, FL 33761
or Redden: Attention: David Larson
Fax No.: 727-669-4701
If to Aqua Bio Technologies S.A. de C.V.: Creston 357
Pedregal de San Angel
Mexico, D.F. 01900
Attention: Federico Rodriguez
Fax No.: 011-525-568-9813
If to Watertronics: Well Cottage High Street
Wargrave Berks, RG10800
England
Attention: Dick Goodall
Fax No.: 011-44-118-940-3615
If to Sistecam S.A. or Arata: Del Triangulo en Rohrmoser
Costado Este de la Farmacia, Rohrmoser
Pavas, San Jose
Costa Rica
Attention: Andrew Arata
Fax No.: 775-640-1658
If to Duren: George L. Duren
2531 216 street
Lake City, FL 32024
If to Lewis: Charles Lewis
5135 New Ranch Rd.
El Cajon, CA 92020
The relevant Party may change the address for delivery of notices by
giving notice of such change in accordance with this paragraph.
18.3 Interpretation. All Parties have participated in the negotiation and
preparation of this Agreement, and the construction of this Agreement shall not
be interpreted in favor of or against any particular Party as result of the
respective contributions of the Parties to the drafting of this Agreement.
18.4 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
carryout the intent of this Agreement.
18.5 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.
18.6 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.
18.7 Governing Law. This Agreement is to be governed by and interpreted
under the laws of the State of California, without giving effect to the
principles of conflicts of laws thereof. In addition, the Parties agree to
exclusive jurisdiction to confirm and/or vacate or modify the arbitral award(s)
of the Arbitrator, in the State or Federal Courts of the State of California
sitting in the County of San Diego.
18.8 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.
18.9 Counterparts. This Agreement may be executed in the original or by
fax, 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.
18.10 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.
18.11 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.
18.12 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, IMS and NVID shall be authorized to publicly announce the
execution and closing of this Agreement, using a mutually acceptable press
release.
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.
NVID INTERNATIONAL, INC., and Aqua Bio Technologies INNOVATIVE MEDICAL SERVICES
Inc., its wholly owned subsidiary
By:/s/ David Larson
----------------
David Larson, President By: /s/ Michael L. Krall
---------------------
Michael L. Krall, President
By: /s/ Michael Redden
------------------
Michael Redden, Secretary/Treasurer By: /s/ Dennis Atchley
--------------------
Dennis Atchley, Secretary
ETIH20 CORPORATION AQUA BIO TECHNOLOGIES, S. A. de C. V.
By: /s/ Andrew B. Arata By: /s/ Federico Rodriquez
--------------------- ----------------------
Andrew B. Arata, President Federico Rodriguez, Director General
WATERTRONICS INTERNATIONAL LTD. ANDREW B. ARATA, INDIVIDUALLY AND ON BEHALF OF SISTECAM,
S.A., A COSTA RICAN CORPORATION
By: /s/ Alan C. Allday By: /s/ Andrew B. Arata
---------------------- -------------------
Alan C. Allday, Managing Director Andrew B. Arata
DAVID LARSON MICHAEL REDDEN
By: /s/ David Larson By: /s/ Michael Redden
------------------ ---------------------
David Larson, an individual Michael Redden, an individual
DR. CHARLES LEWIS GEORGE L. DUREN
By:/s/ Charles Lewis By:/s/ George L. Duren
-------------------- ---------------------
Charles Lewis, an individual George L. Duren, an individual
STEVEN GORDON
By: /s/ Steven Gordon
----------------------
Steven Gordon, an individual
Exhibit "A"
ASSIGNMENT OF PATENT AND RELATED INTELLECTUAL PROPERTY
This Assignment of Patent and Related Intellectual Property is effective
this 15th day of November 2001 by and between NVID International, Inc. and
Innovative Medical Services.
WHEREAS, NVID International, Inc., hereinafter referred to as the ASSIGNOR,
a Delaware corporation, having its principal place of business at 28163 U.S.
19N. Suite 302, Clearwater, Florida 33761 is the owner of certain inventions or
improvements for which applications for Letters Patent have been made or for
which Letters Patent have been issued, including, but not limited to those
listed on "Attachment A" hereto, (the "Patents") together with all of the right,
title and interest in and to any marks used in connection therewith, the
goodwill of the business symbolized by such marks, all trade secrets as defined
in California Civil Code section 3426.1 and the case law interpreting such
section, unpatented inventions, all patents pending, filed, or granted in the
United States and in all other countries, know-how and other rights, related to
"Axenohl", "Axen" or any variant or improvements thereof, and all rights and
incidents of ownership of Assignor related thereto, (collectively, with the
Patents, the "Intellectual Property"); and
WHEREAS, Innovative Medical Services hereinafter referred to as the
ASSIGNEE, a California corporation, having its principal place of business at
1725 Gillespie Way, El Cajon, Ca 92020, is desirous of acquiring the entire
right, title and interest in and to the Intellectual Property in any and all
countries;
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, ASSIGNOR has sold, assigned, transferred and set over,
and by these presents does hereby sell, assign, transfer and set over to
ASSIGNEE, the entire right, title and interest in and to the Intellectual
Property and any and all continuations, divisions and renewals of and
substitutes for the Intellectual Property and to and under any and all
additional Letters Patent which may be granted on or as a result thereof in the
United States and any and all other countries, and any reissue or reissues or
extension or extensions of said Letters Patent, and the full right to sue for
and recover all profits and damages recoverable for past infringement of the
same, and assign to and authorize said ASSIGNEE to file applications for Letters
Patent in all countries, to be held and enjoyed by said ASSIGNEE, its
successors, assigns, nominees or legal representatives, to the full end of the
term or terms for which said Letters Patent respectively may be granted,
reissued or extended, as fully and entirely as the same would have been held and
enjoyed by ASSIGNOR had this assignment, sale and transfer not been made.
It is hereby covenanted that ASSIGNOR has full right to convey the entire
interest herein assigned, and that ASSIGNOR has not executed and will not
execute any agreement in conflict herewith, and ASSIGNOR further covenants and
agrees that it will each time request is made and without undue delay, execute
and deliver all such papers as may be necessary or desirable to perfect the
title to said Intellectual Property in ASSIGNEE, its successors, assigns,
nominees, or legal representatives, and that ASSIGNOR is not aware of any
undisclosed prior art or any circumstance that could weaken or invalidate the
Patents and has no knowledge of any actual or suspected infringement of the
Patents; ASSIGNOR has not made any assignments, or granted any licenses to all
or part of the Intellectual Property other than disclosed to ASSIGNEE in the
Settlement Agreement entered into on or about the date hereof; ASSIGNOR agrees
to communicate to ASSIGNEE or to its nominee all known facts respecting said
Intellectual Property, to testify in any legal proceedings, to sign all lawful
papers to execute all disclaimers and divisional, continuing, reissue and
foreign applications, to make all rightful oaths, and generally to do everything
possible to aid ASSIGNEE, its successors, assigns, nominees and legal
representatives to obtain and enforce for its or their own benefit proper patent
protection for said inventions or improvements in any and all countries, all at
the expense, however, of ASSIGNEE, its successors, assigns, nominees or legal
representatives.
AND ASSIGNOR hereby authorizes and requests the Commissioner of Patents and
Trademarks of the United States and any official of any country or countries
foreign to the United States whose duty it is to issue patents on applications
as aforesaid, to issue to ASSIGNEE, as assignee of the entire right, title and
interest, any and all Letters Patent for Intellectual Property, including any
and all Letters Patent of the United States which may be issued and granted on
or as a result of any applications included in said Intellectual Property, in
accordance with the terms of this assignment.
IN WITNESS WHEREOF, the undersigned, being properly authorized to execute
this Assignment as of the date first set above written, hereunto sets their hand
and seal.
NVID International, Inc. Innovative Medical Services
By: /s/ David J. Larson By: /s/ Michael L. Krall
------------------------------ ----------------------------------
David J. Larson, President Michael L. Krall, President / CEO
By: /s/ Michael J. Redden By: /s/ Dennis B. Atchley
------------------------------ ------------------------------------
Michael J. Redden, Secretary Dennis B. Atchley, Esq., Secretary
By: /s/ Steve Gordon
------------------------------
Steve Gordon, Board Member
The undersigned hereby conveys, transfers and assigns all of his right, title
and interest to the Intellectual Property to ASSIGNEE.
Andrew B. Arata
/s/ Andrew B. Arata
-------------------------
Andrew B. Arata, Inventor
Attachment "A"
Patent Properties
-----------------
Patent No./Serial No. Issue Date/Filing Date Country Status
--------------------- ---------------------- ------- ------
6,197,814 March 6, 2001 United States of America Issued
09/798,768 March 2, 2001 United States of America Pending
09/544,404 April 6, 2000 United States of America Pending
PCT/US98/21604 October 9, 1998 Patent Cooperation Treaty Published
OAPI No. 11368 October 17, 2000 OAPI Region Issued
98954966.2 *October 9, 1998 ARIPO Region Pending
98954966.2 *October 9, 1998 European Patent Office Pending
200000396 *October 9, 1998 Eurasian Region Pending
11880/99 *October 9, 1998 Australia Pending
PI9813857-0 *October 9, 1998 Brazil Pending
2,305,139 *October 9, 1998 Canada Pending
98812103.4 *October 9, 1998 China Pending
2000-515434 *October 9, 1998 Japan Pending
003376 *October 9, 1998 Mexico Pending
503582 *October 9, 1998 New Zealand Pending
*Priority Date
Exhibit "B"
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
NVID INTERNATIONAL, INC., a
Delaware corporation,
Plaintiff,
v. CASE NO. 8:01-cv-950-T-MSS
INNOVATIVE MEDICAL SERVICES, a
California corporation; and
ETIH20 CORPORATION, a Nevada
corporation, as the survivor by
merger to ETIH20, INC., a
Florida corporation,
Defendants
------------------------------/
STIPULATION FOR DISMISSAL WITH PREJUDICE
----------------------------------------
The parties to this cause, by and through their undersigned attorneys, and
pursuant to Rule 41(a) of the Federal Rules of Civil Procedure, hereby stipulate
that this action be and hereby is dismissed with prejudice, with each party to
bear its own costs and attorneys' fees.
Attorney for Plaintiff
RICHARD M. CANDELORA, ESQ.
Florida Bar No. 198056
GARDNER, WILKES, ET AL.
P.O. Box 1810
Tampa, FL 33601-1810
Phone: (813) 221-8000
Fax: (813) 229-1597
Dated:12/03/01 /s/ Richard M. Candelora
----------- -------------------------
Richard M. Candelora, Esq.
Attorney for Plaintiff
ROBERT C. SANCHEZ, ESQ.
Florida Bar No. 570427
THOMAS P. MCNAMARA, P.A.
2909 Bay to Bay Boulevard, Suite 309
Tampa, FL 33629
Telephone: (813) 837-0727
Dated:11/28/01 /s/ Robert C. Sanchez
-------- -----------------------------
Robert C. Sanchez, Esq.
Attorney for Defendants
RICHARD M. ZABAK, ESQ.
Florida Bar No. 273406
GRAY HARRIS ROBINSON SHACKLEFORD FARRIOR
P.O. Box 3324
Tampa, FL 33601
Phone: (813) 273-5000
Fax: (813) 273-5145
Dated:12/04/01 /s/ Richard M. Zabak
----------- -----------------------------
Richard M. Zabak, Esq.
Exhibit "C"
RELEASE
This Release ("Release") is made and entered into as of November 15, 2001
by and among Innovative Medical Services, a California corporation ("IMS"),
ETIH20 Corporation, a Nevada corporation ("ETI"), NVID International, Inc., a
Delaware corporation ("NVID"), Watertronics Ltd., an entity organized under the
laws of the United Kingdom ("Watertronics"), Aqua Bio Technologies, S. A. de C.
V., a Mexican corporation ("Aquabiotech Mexico"), Andrew B. Arata, an individual
currently residing in Costa Rica ("Arata"), Sistecam S.A., a Costa Rican
corporation ("Sistecam"), David Larson, the President of NVID, and individually
("Larson"), and Michael Redden, the Secretary and Treasurer of NVID, and
individually ("Redden"), George L. Duren ("Duren") and Dr. Charles Lewis
("Lewis") (the foregoing parties, collectively, the "Parties") with respect to
the following facts and as set forth herein:
A. Axenohl and its diluted form, "Axen" (hereinafter "Axenohl"), is a
silver ion product with marketable disinfectant properties, invented by Arata.
Arata assigned the rights to Axenohl to NVID and it is the subject of U.S.
Patent No. 6,197,814; WIPO App. No. WO 99 / 18790 (together with all rights and
incidents of ownership of NVID related thereto, the "Patent").
B. NVID has entered into various marketing and/or manufacturing agreements
related to Axenohl with IMS and ETI that have become the subject of dispute (the
"Dispute").
C. As part of the Dispute, NVID claims that Watertronics and Aquabiotech
Mexico have certain license and/or manufacturing rights regarding Axenohl, which
are contested by IMS and ETI.
D. NVID has caused to be filed a state court action in Florida against IMS
and ETI seeking declaratory and other relief regarding the Dispute (Sixth
Judicial Circuit in and for Pinellas County, Case No. 01-2867-CI-21) ("Florida
Action").
E. IMS and ETI have caused the Florida Action to be removed to the United
States District Court for the Middle District of Florida (Tampa Division), Case
No. 8:01-cv-950-T-23MSS, and have applied to that federal court for an order
"staying" said action, or alternatively dismissing or transferring pursuant to
asserted dispute resolution agreement(s) of the parties.
F. IMS and ETI filed a claim regarding the Dispute before the American
Arbitration Association in San Diego County, California, and when NVID declined
to voluntarily participate in such arbitration, filed a "Petition for an Order
Compelling Arbitration" before Chief Judge Marilyn L. Huff in the United States
District Court for the Southern District of California (Case No. 01-CV-778H
(JAH)), which requested order to compel has been granted.
G. IMS, ETI and NVID have stipulated to Jack F. Fitzmaurice as a neutral
arbitrator for the Dispute in the now pending American Arbitration Association
arbitration in San Diego, civil case no. 73 1990018601 LJP (the "San Diego
Arbitration").
H. The Parties hereto have reached a global resolution of the Dispute,
pursuant to the Core Settlement Agreement dated November 15, 2001 (the "Core
Settlement Agreement"), and wish such agreement to be entered as a final and
binding arbitration award, and to thereafter be confirmed if necessary as a
non-contestable and non-appealable stipulated judgment by the United States
District Court for the Southern District of California, or of the Superior Court
of the State of California in and for the County of San Diego.
In exchange for the performance of the respective obligations of the
Parties as set forth in the Core Settlement Agreement, each Party agrees to
release the other Parties as follows:
1. Release by IMS. IMS hereby fully and forever releases and discharges
NVID, Gordon, Larson, and Redden and all of their respective affiliated and/or
subsidiary corporations, companies or partnerships, together with any and all
past and present employees, agents, officers, directors, shareholders, partners,
predecessors, successors, assigns, agents, attorneys, heirs, executors,
administrators and representatives, from any and all claims arising on or before
the date hereof, of any kind or nature, whether now known or unknown, suspected
or unsuspected, based on, arising out of or in connection with anything
whatsoever done, omitted, or suffered to be done at any time, arising or in
connection, directly or indirectly, with the Dispute, the Florida Action, the
San Diego Arbitration, the Patent or otherwise, including all claims or causes
of action under any state or federal laws, contract, equity or tort theory,
fiduciary obligation, or otherwise, sustained respectively by NVID, Larson and
/or Redden excepting therefrom the performance of the respective obligations of
NVID, Larson and Redden as set forth in the Core Settlement Agreement.
2. Release by NVID and Aqua Bio Technologies Inc. NVID and Aqua Bio
Technologies Inc. (its wholly owned subsidiary) hereby fully and forever
releases and discharges IMS, ETI and Sistecam, and all of their respective
affiliated and/or subsidiary corporations, companies or partnerships, together
with any and all past and present employees, agents, officers, directors,
shareholders, partners, predecessors, successors, assigns, agents, attorneys,
heirs, executors, administrators and representatives, from any and all claims
arising on or before the date hereof, of any kind or nature, whether now known
or unknown, suspected or unsuspected, based on, arising out of or in connection
with anything whatsoever done, omitted, or suffered to be done at any time,
arising or in connection, directly or indirectly, with the Dispute, the Florida
Action, the San Diego Arbitration, the Patent or otherwise, including all claims
or causes of action under any state or federal laws, contract, equity or tort
theory, fiduciary obligation, or otherwise, sustained respectively by IMS,
Sistecam and ETI excepting therefrom the performance of the respective
obligations of IMS, Sistecam and/or ETI as set forth in the Core Settlement
Agreement.
3. Release by ETI. ETI hereby fully and forever releases and discharges IMS
and NVID and all of their respective affiliated and/or subsidiary corporations,
companies or partnerships, together with any and all past and present employees,
agents, officers, directors, shareholders, partners, predecessors, successors,
assigns, agents, attorneys, heirs, executors, administrators and
representatives, from any and all claims arising on or before the date hereof,
of any kind or nature, whether now known or unknown, suspected or unsuspected,
based on, arising out of or in connection with anything whatsoever done,
omitted, or suffered to be done at any time, arising or in connection, directly
or indirectly, with the Dispute, the Florida Action, the San Diego Arbitration,
the Patent or otherwise, including all claims or causes of action under any
state or federal laws, contract, equity or tort theory, fiduciary obligation, or
otherwise, sustained respectively by IMS and NVID excepting therefrom the
performance of the respective obligations of IMS and/or NVID as set forth in the
Core Settlement Agreement.
4. Release by Watertronics. Watertronics hereby fully and forever releases
and discharges IMS, Sistecam and ETI and all of their respective affiliated
and/or subsidiary corporations, companies or partnerships, together with any and
all past and present employees, agents, officers, directors, shareholders,
partners, predecessors, successors, assigns, agents, attorneys, heirs,
executors, administrators and representatives, from any and all claims arising
on or before the date hereof, of any kind or nature, whether now known or
unknown, suspected or unsuspected, based on, arising out of or in connection
with anything whatsoever done, omitted, or suffered to be done at any time,
arising or in connection, directly or indirectly, with the Dispute, the Florida
Action, the San Diego Arbitration, the Patent or otherwise, including all claims
or causes of action under any state or federal laws, contract, equity or tort
theory, fiduciary obligation, or otherwise, sustained respectively by IMS,
Sistecam and/or ETI excepting there from the performance of the respective
obligations of IMS and/or ETI as set forth in the Core Settlement Agreement.
5. Release by Aquabiotech Mexico. Aquabiotech Mexico hereby fully and
forever releases and discharges IMS, Sistecam and ETI and all of their
respective affiliated and/or subsidiary corporations, companies or partnerships,
together with any and all past and present employees, agents, officers,
directors, shareholders, partners, predecessors, successors, assigns, agents,
attorneys, heirs, executors, administrators and representatives, from any and
all claims arising on or before the date hereof, of any kind or nature, whether
now known or unknown, suspected or unsuspected, based on, arising out of or in
connection with anything whatsoever done, omitted, or suffered to be done at any
time, arising or in connection, directly or indirectly, with the Dispute, the
Florida Action, the San Diego Arbitration, the Patent or otherwise, including
all claims or causes of action under any state or federal laws, contract, equity
or tort theory, fiduciary obligation, or otherwise, sustained respectively by
IMS and ETI excepting therefrom the performance of the respective obligations of
IMS, Sistecam and/or ETI as set forth in the Core Settlement Agreement.
6. Release by Arata and Duren. Arata hereby fully and forever releases and
discharges NVID, IMS and ETI and all of their respective affiliated and/or
subsidiary corporations, companies or partnerships, together with any and all
past and present employees, agents, officers, directors, shareholders, partners,
predecessors, successors, assigns, agents, attorneys, heirs, executors,
administrators and representatives, from any and all claims arising on or before
the date hereof, of any kind or nature, whether now known or unknown, suspected
or unsuspected, based on, arising out of or in connection with anything
whatsoever done, omitted, or suffered to be done at any time, arising or in
connection, directly or indirectly, with the Dispute, the Florida Action, the
San Diego Arbitration, the Patent or otherwise, including all claims or causes
of action under any state or federal laws, contract, equity or tort theory,
fiduciary obligation, or otherwise, sustained respectively by NVID, IMS and ETI
excepting therefrom the performance of the respective obligations of NVID, IMS
and/or ETI as set forth in the Core Settlement Agreement.
7. Release by Larson. Larson hereby fully and forever releases and
discharges Arata, Duren, IMS, Sistecam and ETI and all of their respective
affiliated and/or subsidiary corporations, companies or partnerships, together
with any and all past and present employees, agents, officers, directors,
shareholders, partners, predecessors, successors, assigns, agents, attorneys,
heirs, executors, administrators and representatives, from any and all claims
arising on or before the date hereof, of any kind or nature, whether now known
or unknown, suspected or unsuspected, based on, arising out of or in connection
with anything whatsoever done, omitted, or suffered to be done at any time,
arising or in connection, directly or indirectly, with the Dispute, the Florida
Action, the San Diego Arbitration, the Patent or otherwise, including all claims
or causes of action under any state or federal laws, contract, equity or tort
theory, fiduciary obligation, or otherwise, sustained respectively by Arata,
IMS, Sistecam and ETI excepting therefrom the performance of the respective
obligations of Arata, IMS and /or ETI as set forth in the Core Settlement
Agreement.
8. Release by Redden. Redden hereby fully and forever releases and
discharges Arata, Duren, Sistecam, IMS and ETI and all of their respective
affiliated and/or subsidiary corporations, companies or partnerships, together
with any and all past and present employees, agents, officers, directors,
shareholders, partners, predecessors, successors, assigns, agents, attorneys,
heirs, executors, administrators and representatives, from any and all claims
arising on or before the date hereof, of any kind or nature, whether now known
or unknown, suspected or unsuspected, based on, arising out of or in connection
with anything whatsoever done, omitted, or suffered to be done at any time,
arising or in connection, directly or indirectly, with the Dispute, the Florida
Action, the San Diego Arbitration, the Patent or otherwise, including all claims
or causes of action under any state or federal laws, contract, equity or tort
theory, fiduciary obligation, or otherwise, sustained respectively by Arata,
Duren, Sistecam, IMS and ETI excepting therefrom the performance of the
respective obligations of Arata, Duren, Sistecam, IMS and/or ETI as set forth in
the Settlement Agreement.
9. Waiver Under California Civil Code Section 1542. The Parties understand
and agree that this Release constitutes a general release and shall be effective
as a full and final waiver, accord and satisfaction, and as a bar to all claims
whether known, unknown, suspected or concealed. Each Party acknowledges that
they are familiar with section 1542 of the California Civil Code that provides
as follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
Each Party expressly waives and relinquishes any and all rights and
claims he or she may have pursuant to the provisions of section 1542 of the
California Code of Civil Procedure.
10. Execution Of Additional Documents. Each Party agrees to execute and
deliver such additional documents as may be necessary to effectuate this
Release.
11. Advice Of Counsel. Each Party, by due execution of this Release
represents that he or she has reviewed each term of this Release with legal
counsel, or has had the reasonable opportunity to do so, and shall not deny the
validity of this Release on the ground that they did not have advice of legal
counsel. Each Party has carefully read this Release, its contents are known, and
each party freely and voluntarily signs it.
12. Governing Law. This Release shall be interpreted and enforced under the
laws of the State of California.
13. Severability. The invalidity of any provision of this Release as
determined by the Arbitrator or a court of competent jurisdiction shall in no
way affect the validity of any other provision hereof.
14. Remedies. In the event any Party breaches the provisions of this
Release, the Dispute Resolution (Section 18.1) and Governing Law (Section 18.7)
provisions set forth in the Core Settlement Agreement shall govern.
Notwithstanding any above releases of NVID by Arata, in the event that NVID
should receive the Axenohl patent rights back from IMS at some future date,
Arata's compensation rights as the original inventor/assignor shall return to
the status quo ante.
IN WITNESS WHEREOF, the individuals have signed hereunder, and 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.
NVID INTERNATIONAL, INC., and INNOVATIVE MEDICAL SERVICES
Aqua Bio Technologies Inc.,
its wholly owned subsidiary
By: /s/ David Larson By: /s/ Michael L. Krall
------------------------- ----------------------------
David Larson, President Michael L. Krall, President
By: /s/ Michael Redden By:/s/ Dennis Atchley
---------------------------- ----------------------------
Michael Redden, Secretary/Treasurer Dennis Atchley, Secretary
ETIH20 CORPORATION AQUABIOTECH MEXICO, S. A. de C. V.
By: /s/ Andrew B. Arata By: /s/ Federico Rodriguez
------------------------- -----------------------------
Andrew B. Arata, President Federico Rodriguez, Director General
WATERTRONICS INTERNATIONAL LTD ANDREW B. ARATA
By:/s/ Alan C. Allday By:/s/ Andrew B. Arata
------------------------------- ----------------------
Alan C. Allday, Managing Director Andrew B. Arata
DAVID LARSON MICHAEL REDDEN
By: /s/ David Larson By: Michael Redden
------------------------------ -----------------------------
David Larson, an individual Michael Redden, an individual
GEORGE L. DUREN
By: George Duren
------------------------------
George L. Duren, an individual
[IMS LOGO}
Exhibit D
MANUFACTURER'S REPRESENTATIVE AGREEMENT
THIS AGREEMENT is made this 1st day of January 2002, by and between Innovative
Medical Services ("IMS"), a California corporation with its principal place of
business at 1725 Gillespie Way, El Cajon, California 92020, and Watertronics
International, Ltd. an entity organized under the laws of the United Kingdom
("the Representative"), with its principal place of business at Unit A Cold Ash
Farm Long Lane, Thatcham Berks RG18 9LT, and collectively referred to as the
"Parties."
WHEREAS, Innovative Medical Services desires to appoint the Representative as a
sales representative for certain products, territories, classes of trade,
customers and/or certain products to such customers (hereinafter, the
"Territory"), all on the terms and conditions hereinafter set forth;
WHEREAS, the Representative desires to and hereby does accept the sales
representative position in the Territory pursuant to the agreed upon terms and
conditions;
NOW, THEREFORE, it is agreed as follows:
ss.1. Appointment
-----------
IMS hereby appoints on a non-exclusive basis the Representative to be its
sales representative in the Territory as specifically described in Exhibit "A."
The Representative accepts said appointment.
ss.2. Definitions
-----------
As used in this Agreement, the following terms shall have the respective
meanings:
a. "Agreement" shall mean this Manufacturer's Representative Agreement,
together with exhibits;
b. "Commission" shall mean the then current standard rate set forth on
Exhibit "A;"
c. "Territory" shall mean that geographic area and/or NAICS class of
trade code(s) on Exhibit "A;" and
d. "Products" shall mean item(s) described on Exhibit "A."
e. "Compete" shall mean to pursue any business opportunity arising from
confidential information obtained from the Company.
ss.3. Sales Duties
------------
The Representative shall have the following duties hereunder in connection
with promoting the sales of the Products:
a. To use "best efforts" to introduce, promote the sales of, and obtain
orders for designated Products in the Territory.
b. To maintain office facilities and sufficient staff to properly and
professionally service the Territory.
c. To assist in the solution of any commercial and/or technical problems
that from time-to-time may hereinafter arise between IMS and any
customer or prospective customer of the Representative.
d. To abide by the policies, rules and regulations which IMS from
time-to- time may adopt and communicate to the Representative.
e. To make sales and/or service calls on all assigned accounts as needed.
f. To provide periodical forecasts of expected and/or projected sales,
and specific methods and modalities by which the sales are to be
generated, as requested in writing by IMS.
g. To cooperate in semi-annual formal performance reviews, during which
prior performance of the Representative will be addressed, and sales
goals and plans for the coming six-month period will be cooperatively
set.
h. At the written request of IMS, to disclose the specific accounts,
classes of trade, or other separable portion(s) of the Territory
handled by specific personnel of the Representative, and to inform IMS
in writing within ten days (10) of any changes in the Representative's
personnel who will be selling or servicing the Territory.
ss.4. Administrative Duties
---------------------
In addition to the sales duties described in ss. 3, the Representative
shall additionally be obligated to:
a. Assist customers or potential customers with respect to shipments,
displays, and other matters related to the Territory.
b. Consult with IMS periodically or upon its request, regarding sales
policies and practices, pricing of Products, market conditions and all
other matters relating to the Representative's performance under this
Agreement.
c. Keep, observe, and comply with all federal, state, and/or local
statutes, laws, rules and regulations that are or shall become
applicable to activities undertaken by the Representative pursuant to
this Agreement.
d. Assist IMS at its request in collection and/or satisfactory resolution
of delinquent and/or disputed balances regarding IMS customers
solicited and/or serviced by the Representative.
e. Immediately inform IMS in writing regarding any discovered facts
respecting the creditworthiness of any account or customer, which
might reasonably affect a decision by IMS to continue to do business
with such customer and/or account.
f. Provide IMS with prompt written notice of any oral or written customer
complaints in the field, and work with IMS to properly resolve any
such complaints and/or disputes.
g. At the outset of every customer relationship, present to and receive a
signed Confidentiality Agreement in favor of IMS from each customer.
ss.5. Prohibitions
------------
During the term of this Agreement, the Representative shall not, without
the express prior written consent of Innovative Medical Services:
a. Solicit or receive orders outside the Territory.
b. Sell or solicit orders for the similar or competing goods of other
manufacturer(s).
c. Be or become associated as an owner, joint venturer, or in any other
capacity whatsoever with any person, or organization engaged in the
sale of or solicitation of orders for goods, articles or equipment
which are similar to, compete with, or interfere with sales of IMS
said Products under this Agreement.
d. Divulge or make known to any person any proprietary information,
including, but not limited to, trade secrets, technical data,
manufacturing techniques, accounts or dealings relating to the
business of IMS or any Products sold by IMS.
ss.6. Status of the Representative
----------------------------
a. The Representative shall act under this Agreement as an independent
contractor and under no circumstances have any authority to incur any
obligation on IMS' behalf without the expressed prior written approval
of IMS. No expenses, costs or disbursements shall be incurred by the
Representative in the name of IMS nor shall IMS be responsible for
compensating the Representative for any expenses, costs or
disbursements incurred by the Representative or its staff except as
IMS may expressly otherwise agree to in writing. In particular, and
without limiting the foregoing, the Representative shall not:
1. Make any terms with, or warranty or representation to, any
customer on behalf of IMS, except as shall be specifically
authorized in writing, or;
2. Except as provided in Subsection (b) of this Section, use the
name "Innovative Medical Services" or any other trademark or
trade name of IMS as part of its trade or business name or
trademark, without prior written permission for such use, or;
3. Use any stationery, forms or printed material of any kind on
which the name "Innovative Medical Services" or any other
trademark or trade name of IMS appears or is intended to be
inserted, without first obtaining in each instance, the prior
written consent of IMS for such use;
b. IMS hereby grants to the Representative the right to use the
Innovative Medical Services name in the Representative's letterhead,
business cards, and similar materials during the term of this
Agreement, provided that the form of such use is first approved in
writing by legal counsel and/or an authorized officer of IMS, and
provided further that it is not used in any manner forbidden by law,
nor in any manner which tends to indicate that IMS and the
Representative are not independent parties or otherwise to
misrepresent the relation between IMS and the Representative.
ss.7. Authorized Customers
--------------------
Notwithstanding any other provision of this Agreement, IMS reserves the
right at any time to limit by written notice those Retailers in the Territory
who are authorized to purchase any or all of the Products, and the
Representative shall not solicit orders from a Retailer in the Territory who is
not authorized to order that Product from IMS.
ss.8. Sales Information
-----------------
Subject to applicable laws and regulations, IMS shall furnish the
Representative such technical advice, sales literature, catalogs, price lists
and other written material, as IMS in its sole discretion deems necessary for
the Representative to carry out this Agreement.
ss.9. Acceptance of Orders
--------------------
a. All orders for Products hereunder must be prepared in accordance with
the IMS current prices, terms and conditions operable on the date of
placement of any such order. All prices, specifications and terms
governing the sale of Products within the Territory shall be
established, or changed upon 30 days written notice, at the sole
prerogative of IMS.
IMS Manufacturer's Representative Agreement
Representative's Initials: ACA IMS: MLK
-------- -------
b. A purchase order properly executed by the customer will be submitted
for all orders placed. If the order is placed by phone, the written
and signed purchase order marked "CONFIRMING" by the customer must be
submitted by fax to IMS within five calendar days of phone order.
c. IMS in its sole discretion shall determine whether or not to accept
any particular order. IMS shall have no obligation or liability to the
Representative or to any other party for refusal to accept any order,
regardless of the reason for such refusal.
ss.10. Commissions
-----------
a. IMS will pay a commission to the Representative on accepted orders for
which full payment has been received from the customer. The commission
will be calculable at a rate as referenced in Exhibit "A," and shall
apply to the monthly Territory sales proceeds to IMS net of any sales
or promotional discounts, shipping, handling and any applicable taxes.
In the event that customer(s) return or request a refund regarding any
Products upon which a commission has already been paid, the commission
for that sale will be deducted from the Representative's next
commission payment, but in any event must be repaid to IMS within 30
days of written request.
b. Sub-Representatives or Agents: IMS shall not be responsible for making
any payments to sub-representatives or agents of the Representative.
Such payments, if applicable, are the sole responsibility of the
Representative.
c. Payment Schedule: Commission payments to the Representative by IMS
shall be payable on the tenth of the month on Territory sales proceeds
fully credited in the previous month to IMS. The Representative will
have 30 days from the date of payment to dispute any commission
amounts.
d. Accounting: IMS shall maintain records in sufficient detail for
purposes of determining the proper amount of the commission. IMS shall
provide the Representative with a monthly written accounting that sets
forth the manner in which the commission payment was calculated.
e. Right to Inspect: At its expense, the Representative shall have the
right to inspect IMS' records for the limited purpose of verifying the
calculation of the commission payments, subject to such restrictions
as IMS may reasonably impose to protect the confidentiality of the
records. Such inspections shall be made during regular business hours
as may be set by IMS.
f. Anything contained herein to the contrary notwithstanding, IMS shall
not be liable to the Representative for any commissions for any
Products, which may be sold in the Territory by any person or
organization other than the Representative.
g. When two or more territories sales representatives are involved in a
paid sale, any commissions owed may be allocated between or among
participating sales representatives by IMS at its sole discretion
according to the particular facts and/or circumstances. The decision
of IMS on all such divisions of commissions shall be final.
ss.11. IMS' Right to Sales
-------------------
IMS reserves the right to solicit orders for the Products in the Territory
on its own behalf should IMS in its sole discretion determine that such action
is required for the adequate representation of the Products, and, provide
further that nothing herein contained shall prohibit or restrict IMS' right to
appoint during the Term of this Agreement, in anticipation of the expiration or
termination of such Term, a new representative for the Products in the Territory
whose representation of the Products will commence after the expiration or
termination of the Term of this Agreement. IMS may designate certain accounts as
national accounts. The Representative will be asked to provide service to said
national account. Commissions to the Representative upon a designated national
account sale in the Territory will be paid at the rate to be agreed upon on an
ad hoc basis in writing between IMS and the Representative.
ss.12. Term
----
a. This Agreement shall take effect as specified in ss. 33 hereof, and
shall continue in effect for the Term specifically described in
Exhibit "A," unless terminated sooner as described hereinafter. The
Term of this Agreement shall not exceed twelve months unless this
Agreement is expressly approved and executed by the President / CEO of
IMS.
b. In the event of termination of this Agreement, IMS shall pay
commissions for all orders placed by customer(s) of the Representative
and fully paid for within 90 days of the termination date. Further, if
the Representative has prior to termination presented a customer to
IMS which is subject to a binding contract for future purchases of IMS
Products, IMS will pay commission at the enumerated rate for sales
pursuant to such contract which are fully paid for by customer up to
120 days after the effective date of termination.
IMS Manufacturer's Representative Agreement
Representative's Initials: ACA IMS: MLK
-------- -------
ss.13. Termination
-----------
a. In addition to any and all other remedies available to IMS under law
or equity, any of the events specified in Sub-Section (b) below shall
immediately, upon written notice by IMS, terminate this Agreement.
Upon such termination, the Representative shall not be entitled to any
commissions or other compensation under this Agreement except as
provided in Section 12(b) hereof.
b. The events, the occurrence of which shall constitute termination for
cause:
1. The Representative shall cease to carry on business, become
bankrupt or insolvent, or become, in the sole and unfettered
judgment of IMS so financially unstable that it would be in the
best interests of IMS to terminate this Agreement.
2. The Representative or any of its officers, employees or agents
shall perpetrate fraud upon IMS or any IMS customer(s) in the
course of this Agreement.
3. The Representative attempts to or does sell Products outside the
Territory.
4. The Representative defaults on payment obligations to IMS.
5. The Representative sells or otherwise promotes competing or
similar products of another manufacturer, unless prior written
permission by IMS has been given to the Representative.
c. Neither party shall by reason of the termination of this Agreement be
liable to the other for compensation or damages on account of the loss
of present or prospective profits, or commissions on sales or
anticipated sales, or expenditure, investments or commitments made in
connection therewith, or in connection with the establishment,
development or maintenance of the selling representation hereunder;
provided that such termination shall not relieve IMS of any liability
to the Representative for any earned but unpaid commissions in
accordance with the provisions ofss.12 above and subject to the
foregoing, shall not be deemed to constitute a waiver of any other
claim which IMS may have against the Representative; and provided
further, that the acceptance of any order by IMS after the termination
of this Agreement shall not be construed as a renewal of extension of
this Agreement or as a waiver of termination.
d. Upon termination of this Agreement, the Representative shall cease
using IMS trademarks for any purpose whatsoever, and turn over to IMS
invoices and copies thereof, demonstrators, pamphlets, catalogs,
booklets and/or other technical, advertising and selling data and
literature concerning the Products of IMS in the possession of the
Representative.
e. The Representative agrees, that during the term of this Agreement, and
for one year after termination of this Agreement, neither the
Representative nor any of its employees will back-solicit or otherwise
deal directly with any company that IMS has contracted with the
Representative to perform sales and customer service. The
Representative agrees that any work it directly provides to or
performs for any IMS client without IMS involvement or approval will
result in a sales commission automatically and retroactively applied
to all such transactions of 25% of Gross Invoice to the client payable
in full from the Representative to IMS.
ss.14. Assignment
----------
The Representative shall not assign any rights or duties hereunder to any
person or organization without the prior written consent of IMS.
ss.15. Full Agreement Amendment
------------------------
This Agreement embodies the full understanding of the parties and
supersedes in all respects any agreements or understandings, written or oral, in
effect between the parties relating to the subject matter hereof. This
Agreement, including but not limited to Exhibit "A" thereof, shall be amended or
modified only by IMS' President / CEO in a writing signed by the parties hereto.
ss.16. Waiver
------
Failure by either party to enforce any provision of this Agreement shall
not be construed as a waiver of any breach or a waiver of such provision hereof
or of the right of such party thereafter to enforce such provision.
ss.17. Notices
-------
All notices herein provided for shall be deemed sufficiently given when:
(a) Delivered to Federal Express, Airborne, or any other similar express
delivery service for delivery to the Representative; or (b) Mailed by postpaid
certified mail, return receipt requested, to the other party at its address set
forth above or at such other address of which it shall have informed the other
party by such a written notice.
IMS Manufacturer's Representative Agreement
Representative's Initials: ACA IMS: MLK
-------- -------
ss.18. Indemnity
---------
The Representative will hold IMS (and its shareholders, directors,
officers, attorneys, and agents) harmless, and will indemnify and defend each
and all of them from any asserted liability, loss, damages, costs or expenses
(including reasonable attorneys fees) alleged to have occurred due to the
intentional or negligent acts or omissions of the Representative or its
officers, employees, agents or sub-representatives, including but not limited to
any claims asserted against IMS because of the Representative's unauthorized
sale(s) of IMS Products outside of the designated Territory.
ss.19. Affiliates
----------
Anything that the Representative is prohibited from doing under this
Agreement shall be considered a violation of this Agreement if done directly or
indirectly by any person or entity which owns or controls the Representative, is
owned or controlled by the Representative, or is under common ownership or
control with the Representative.
ss.20. Excusable Delay
---------------
IMS will not be liable for any failure or delay in the delivery of Products
due to circumstances beyond its reasonable control, such as natural catastrophe,
fire, war, riot or civil unrest, strike, lockout or other labor disturbance,
shortage or unavailability of materials, components or transportation
facilities, or any act, refusal to act, regulation, order or intervention of
governmental authorities.
ss.21. Severability
------------
If any provision of this Agreement is held illegal, invalid or
unenforceable, such provision shall be modified to render it legal, valid and
enforceable while to the fullest extent possible preserving the business and
financial intent and impact of the original provision, and the legality,
validity and enforceability of all other provisions of this Agreement shall not
be affected.
ss.22. Governing Law
-------------
All questions concerning the validity or meaning of this Agreement or
relating to the rights and obligations of the parties with respect to
performance under this Agreement shall be construed and resolved under the laws
of the state of California, without reference to any conflict of laws
provision(s).
ss.23. Dispute Resolution
------------------
Each and all disputes and controversies arising out of and/or related to
this Agreement and the transactions contemplated by this Agreement (whether
sounding in contract, tort, or otherwise) shall be determined exclusively by the
San Diego Arbitrator (Jack Fitzmaurice, Esq. or his duly appointed
successor-in-interest) pursuant to the terms and conditions of the Settlement
Agreement, to which this Manufacturer's Representative Agreement is attached as
Exhibit "D."
ss.24. Independent Legal Advice
------------------------
Both Parties to this Agreement have been provided with ample opportunity to
seek independent legal and business advice regarding the propriety of executing
this Agreement, and have either done so or waive that privilege.
ss.25. Joint Drafting
--------------
This Agreement has been drafted with the joint cooperation of the Parties
such that any ambiguity that may exist in the language is to be interpreted in
an evenhanded manner.
ss.26. Final Integration
-----------------
This Agreement is the final and integrated contract between the parties,
and it supersedes any prior or contemporaneous written or oral understandings.
ss.27. Benefit
-------
Except as otherwise provided herein to the contrary, this agreement shall
inure to the benefit of and shall be binding upon the parties signatory hereto
and their respective heirs, executors, administrators, legal representatives,
successors and permitted assigns.
ss.28. Faxed Execution
Each Party hereto shall be authorized to rely upon the signature(s) of the
other Party hereto which are delivered by facsimile as constituting a duly
authorized, irrevocable, actual, current delivery of this Agreement.
ss.29. Execution In Counterparts
-------------------------
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.
ss.30. Time Is Of The Essence
----------------------
Time is of the essence with respect to any act or performance as set forth
in this Agreement.
ss.31. Further Documents
-----------------
Each Party will, whenever and as often as it shall be reasonably requested
by the other Party, execute, acknowledge and deliver such further instruments
and documents as may be necessary in order to carry out the intent and purpose
of this Agreement, including but not limited to the "Manufacturer's
Representative Confidentiality Agreement," appended hereto as Exhibit "B," and
to be executed by the Representative concurrent with signature hereunder.
ss.32. Warranty of Authority
---------------------
Each person signing this Agreement on behalf of an entity warrants that he
or she has the authority to bind said entity by signing this Agreement.
ss.33. Effectiveness
-------------
This Agreement shall become effective when fully executed by the parties to
the transaction.
IMS Manufacturer's Representative Agreement
Representative's Initials: ACA IMS: MLK
-------- -------
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
WATERTRONICS INTERNATIONAL, LTD.
Dated: 11/27/01 By: /s/ Alan C. Allday
----------- -------------------------------------
Alan C. Allday, Managing Director
INNOVATIVE MEDICAL SERVICES
Dated:11/21/01 By: /s/ Michael L. Krall
----------- -------------------------------------
Michael L. Krall, President / CEO
IMS Manufacturer's Representative Agreement
Representative's Initials: ACA IMS: MLK
-------- -------
Exhibit "A"
-----------
Product(s): This Agreement is entered into only for the sale of Innovative Medical
Services product(s) known as Axen.
Method of marketing: Direct marketing to customers within the authorized Territory.
Territory: The United Kingdom, including Britain, Wales, Scotland and Northern
Ireland.
Commission Rate: The Commission rate of 20% on adjusted gross shall be paid as more
specifically described in ss.10 of this Agreement.
Term: This Agreement shall take effect as specified in
ss.33, and shall continue in effect for a
period of Three Years, unless terminated
sooner as described in ss.13 of this
Agreement.
Minimums: Year One: $50,000.00.
Year Two: $300,000 Sales in that Year.
Year Three: $500,000 Sales in that Year.
Cancellation: This representative contract shall be cancelled upon written notice of
IMS should Representative fail to reach any of the stated annual
Minimums. Time is of the essence and no "cure period" is applicable.
Option: Should Representative remain in faithful compliance
with the terms and conditions of this Agreement; it shall be
entitled to a renewable three-year option period, with
annual minimum sales thereafter of $1,000,000.00.
Cooperation: Representative shall cooperate with IMS by relinquishing designated
markets (e.g., dental) within the Territory if necessary for IMS to
complete an exclusivity agreement with a Third Party in a multinational
transaction. Consideration to be negotiated between IMS and
Watertronics, and if agreement cannot be reached, both parties agree to
allow Jack Fitzmaurice to decide appropriate terms and conditions under
the circumstances.
WATERTRONICS INTERNATIONAL, LTD.
Dated: 11/27/01 By: /s/ Alan C. Allday
------------- ---------------------------------
Alan C. Allday, Managing Director
INNOVATIVE MEDICAL SERVICES
Dated: 11/21/01 By: Michael L. Krall
------------ ---------------------------------
Michael L. Krall, President / CEO
Exhibit "B"
MANUFACTURER'S REPRESENTATIVE NON-CIRCUMVENTION
NON-COMPETITION AND CONFIDENTIALITY AGREEMENT
THIS AGREEMENT, dated as of the 1st day of January, 2002 by and between
Innovative Medical Services, a California Corporation with its principal place
of business at 1725 Gillespie Way, El Cajon, California 92020 (hereafter the
"Company"), and Watertronics International, Ltd. (hereafter the
"Representative"), and collectively referred to as the "Parties."
WHEREAS, the parties are mutually desirous of transacting various business
transactions in cooperation with one another for their mutual benefit;
WHEREAS, the parties realize and recognize the importance of maintaining
the integrity of the Company's sources, contacts, trade secrets and other
information; and
NOW, THEREFORE, the Parties agree as follows:
1. PURPOSE:
--------
All parties desire to explore a business opportunity under which the
Company may disclose information to the Representative without fear that the
Representative will disclose such information to the detriment of the Company,
or to otherwise use such information to compete or circumvent the business
opportunities of the Company.
2. DEFINITIONS:
------------
A. Information: The parties recognize that the Company has and will have
the following information: business methods, customers, dealers, employees,
associates, inventions, machinery, products, apparatuses, costs, future plans,
business affairs, process information, trade secrets, technical information,
customer lists, copyrights, product design information, trademarks, and other
proprietary information (collectively, "information") which are valuable,
special and unique assets of the Company, and need to be protected from improper
disclosure. Not included within this definition is information which:
(1) Is in the possession of the receiving party's files and records
immediately before the time of disclosure;
(2) Enters the public domain but not as a result of a breach of this
Agreement;
(3) Is acquired by the receiving party without written restrictions
against disclosure from a third party which, to the receiving party's
knowledge, is not prohibited from disclosing the Information; or
(4) Is independently developed by the receiving party without use of the
disclosing party's information.
B. Circumvent shall mean to act, contact, or negotiate with third
parties in connection with a business opportunity resulting from
confidential information obtained from the Company.
C. Compete shall mean to pursue any business opportunity arising
from confidential information obtained from the Company.
3. RETURN OF MATERIAL:
-------------------
Any original materials and/or documents that have been furnished by the
Company to the Representative (and any and all copies or summaries thereof) will
be promptly returned upon written request by the Company at such time as the
business possibility upon which the parties have been working has been rejected
and/or concluded.
4. PATENT OF COPYRIGHT INFRINGEMENT:
---------------------------------
Nothing in this Agreement is intended to grant any rights under any
patent or copyright.
5. SCOPE:
------
This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements, if any, whether written or oral between the
parties related to non-circumvention, non-competition and confidentiality.
6. NON DISCLOSURE OF CONFIDENTIAL INFORMATION:
-------------------------------------------
The Representative agrees not to use any information disclosed to it by
the Company for any purpose except to consummate any business relationship
between the two parties. Except as hereinafter delineated, the Representative
shall not disclose information received from the Company to third parties.
Access to such information will be restricted to those representative(s),
agent(s) or other person(s) who will participate in a decision with regard to
the pending business opportunity in which the parties are engaged.
IMS Manufacturer's Representative Agreement
Representative's Initials: ACA IMS: MLK
-------- -------
A. Any representative, agent, or persons, described above to whom
information is disclosed shall be bound by the terms of this Agreement, and both
parties agree to execute such additional confidentiality agreement(s) with such
third parties as are reasonably necessary to assure compliance with the letter
and spirit of this Agreement. Each party agrees that it will take any and all
additional reasonable steps to protect the secrecy of information such as to
avoid improper disclosure and/or misuse of information.
B. It is agreed and understood that the Representative named in this
Agreement agrees to keep confidential the name, address, telephone numbers, or
fax and telex numbers and e-mail addresses of any contacts introduced by the
Company unless prior written permission is given.
C. In the event of breach by the Representative, the parties agree that
damages alone are not an adequate remedy for any breach of this Agreement, and
that upon such breach; the Company shall be entitled to both preliminary and
permanent injunctive relief without the posting of a bond.
7. PARTIES BOUND:
--------------
This Agreement shall be binding upon all the parties and is for the
benefit of the undersigned parties, their successors and assigns.
8. GOVERNING LAW AND DISPUTE RESOLUTION:
-------------------------------------
Each and all disputes and controversies arising out of and/or related
to this Agreement and the transactions contemplated by this Agreement (whether
sounding in contract, tort, or otherwise) shall be determined exclusively by the
San Diego Arbitrator (Jack Fitzmaurice, Esq. or his duly appointed
successor-in-interest) pursuant to the terms and conditions of the Settlement
Agreement, to which this Manufacturer's Representative Non-Circumvention
Non-Competition and Confidentiality Agreement is attached as a part of Exhibit
"D."
9. AMENDMENTS:
-----------
This Agreement may be amended or modified only by a written instrument
signed by both parties.
10. PENALTIES:
----------
In the event either party violates any of the terms of this Agreement,
the party so violating this Agreement shall be responsible for all damages and
all reasonable attorney's fees and costs incurred by the other party in
enforcing its rights under this contract.
11. INVALIDATION:
-------------
In the event that any provision of this Agreement shall finally be
determined to be invalid or unlawful, such provision shall be deemed severed
from this Agreement, and replaced by another provision closest representing its
intention, and every other provision of this Agreement shall remain in full
force and effect.
12. NOTICES:
--------
Any notice or communication shall be given in writing to the following
addresses: If to the Company:
Innovative Medical Services
Attn: Michael L. Krall
1725 Gillespie Way
El Cajon, CA 92020
Fax: 619-596-8790
If to the Representative:
Watertronics International, Ltd.
Attn: Alan C. Allday
Unit A Cold Ash Farm Long Lane
Thatcham Berks, RG18 9LT
Fax: 011-44-1635-202-207
Any notices given by hand shall be deemed given as of the day when they
are delivered. Notices given by facsimile and by overnight mail shall be deemed
given as of the business day following the date on which they are delivered.
Notices given to an overnight carrier service, and marked prepaid for, next
business day delivery shall be deemed given as of the day they are delivered.
13. INDEPENDENT LEGAL ADVICE
------------------------
Both Parties to this Agreement have been provided with ample
opportunity to seek independent legal and business advice regarding the
propriety of executing this Agreement, and have either done so or waive that
privilege.
14. FURTHER DOCUMENTS
-----------------
Each Party will, whenever and as often as it shall be reasonably
requested by the other Party, execute, acknowledge and deliver such further
instruments and documents as shall be necessary in order to carry out the intent
and purpose of this Agreement
15. WARRANTY OF AUTHORITY
---------------------
Each person signing this Agreement on behalf of an entity warrants that
he or she has the authority to bind said entity by signing this Agreement.
16. COUNTERPARTS:
-------------
This Agreement may be executed in counterparts and a facsimile
signature shall have the same force and effect as an original signature.
IMS Manufacturer's Representative Agreement
Representative's Initials: ACA IMS: MLK
-------- -------
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year above.
INNOVATIVE MEDICAL SERVICES
By: /s/ Michael L. Krall Dated: 11/21/01
--------------------------------- -------------------
Michael L. Krall, President / CEO
WATERTRONICS INTERNATIONAL, LTD.
By: /s/ Alan C. Allday Dated: 11/27/01
--------------------------------- -------------------
Alan C. Allday, Managing Director
IMS Manufacturer's Representative Agreement
Representative's Initials: ACA IMS: MLK
-------- -------
[IMS LOGO}
Exhibit E
MANUFACTURER'S REPRESENTATIVE AGREEMENT
THIS AGREEMENT is made this 1st day of January 2002, by and between Innovative
Medical Services ("IMS"), a California corporation with its principal place of
business at 1725 Gillespie Way, El Cajon, California 92020, and Aqua Bio
Technologies, S.A. de C.V. a Mexican corporation organized under the laws of
Mexico ("the Representative"), with its principal place of business at Creston
357 Pedregal de San Angel, Mexico, D.F. 01900, and collectively referred to as
the "Parties."
WHEREAS, Innovative Medical Services desires to appoint the Representative as a
sales representative for certain products, territories, classes of trade,
customers and/or certain products to such customers (hereinafter, the
"Territory"), all on the terms and conditions hereinafter set forth;
WHEREAS, the Representative desires to and hereby does accept the sales
representative position in the Territory pursuant to the agreed upon terms and
conditions;
NOW, THEREFORE, it is agreed as follows:
ss.1. Appointment
-----------
IMS hereby appoints on a non-exclusive basis the Representative to be its
sales representative in the Territory as specifically described in Exhibit "A."
The Representative accepts said appointment.
ss.2. Definitions
-----------
As used in this Agreement, the following terms shall have the respective
meanings:
a. "Agreement" shall mean this Manufacturer's Representative Agreement,
together with exhibits;
b. "Commission" shall mean the then current standard rate set forth on
Exhibit "A;"
c. "Territory" shall mean that geographic area and/or NAICS class of
trade code(s) on Exhibit "A;" and
d. "Products" shall mean item(s) described on Exhibit "A."
e. "Compete" shall mean to pursue any business opportunity arising from
confidential information obtained from the Company.
ss.3. Sales Duties
------------
The Representative shall have the following duties hereunder in connection
with promoting the sales of the Products:
a. To use "best efforts" to introduce, promote the sales of, and obtain
orders for designated Products in the Territory.
b. To maintain office facilities and sufficient staff to properly and
professionally service the Territory.
c. To assist in the solution of any commercial and/or technical problems
that from time-to-time may hereinafter arise between IMS and any
customer or prospective customer of the Representative.
d. To abide by the policies, rules and regulations which IMS from
time-to- time may adopt and communicate to the Representative.
e. To make sales and/or service calls on all assigned accounts as needed.
f. To provide periodical forecasts of expected and/or projected sales,
and specific methods and modalities by which the sales are to be
generated, as requested in writing by IMS.
g. To cooperate in semi-annual formal performance reviews, during which
prior performance of the Representative will be addressed, and sales
goals and plans for the coming six-month period will be cooperatively
set.
h. At the written request of IMS, to disclose the specific accounts,
classes of trade, or other separable portion(s) of the Territory
handled by specific personnel of the Representative, and to inform IMS
in writing within ten days (10) of any changes in the Representative's
personnel who will be selling or servicing the Territory.
ss.4. Administrative Duties
---------------------
In addition to the sales duties described in ss. 3, the Representative
shall additionally be obligated to:
a. Assist customers or potential customers with respect to shipments,
displays, and other matters related to the Territory.
b. Consult with IMS periodically or upon its request, regarding sales
policies and practices, pricing of Products, market conditions and all
other matters relating to the Representative's performance under this
Agreement.
c. Keep, observe, and comply with all federal, state, and/or local
statutes, laws, rules and regulations that are or shall become
applicable to activities undertaken by the Representative pursuant to
this Agreement.
d. Assist IMS at its request in collection and/or satisfactory resolution
of delinquent and/or disputed balances regarding IMS customers
solicited and/or serviced by the Representative.
e. Immediately inform IMS in writing regarding any discovered facts
respecting the creditworthiness of any account or customer, which
might reasonably affect a decision by IMS to continue to do business
with such customer and/or account.
f. Provide IMS with prompt written notice of any oral or written customer
complaints in the field, and work with IMS to properly resolve any
such complaints and/or disputes.
g. At the outset of every customer relationship, present to and receive a
signed Confidentiality Agreement in favor of IMS from each customer.
ss.5. Prohibitions
------------
During the term of this Agreement, the Representative shall not, without
the express prior written consent of Innovative Medical Services:
a. Solicit or receive orders outside the Territory.
b. Sell or solicit orders for the similar or competing goods of other
manufacturer(s).
c. Be or become associated as an owner, joint venturer, or in any other
capacity whatsoever with any person, or organization engaged in the
sale of or solicitation of orders for goods, articles or equipment
which are similar to, compete with, or interfere with sales of IMS
said Products under this Agreement.
d. Divulge or make known to any person any proprietary information,
including, but not limited to, trade secrets, technical data,
manufacturing techniques, accounts or dealings relating to the
business of IMS or any Products sold by IMS.
ss.6. Status of the Representative
----------------------------
a. The Representative shall act under this Agreement as an independent
contractor and under no circumstances have any authority to incur any
obligation on IMS' behalf without the expressed prior written approval
of IMS. No expenses, costs or disbursements shall be incurred by the
Representative in the name of IMS nor shall IMS be responsible for
compensating the Representative for any expenses, costs or
disbursements incurred by the Representative or its staff except as
IMS may expressly otherwise agree to in writing. In particular, and
without limiting the foregoing, the Representative shall not:
1. Make any terms with, or warranty or representation to, any
customer on behalf of IMS, except as shall be specifically
authorized in writing, or;
2. Except as provided in Subsection (b) of this Section, use the
name "Innovative Medical Services" or any other trademark or
trade name of IMS as part of its trade or business name or
trademark, without prior written permission for such use, or;
3. Use any stationery, forms or printed material of any kind on
which the name "Innovative Medical Services" or any other
trademark or trade name of IMS appears or is intended to be
inserted, without first obtaining in each instance, the prior
written consent of IMS for such use;
b. IMS hereby grants to the Representative the right to use the
Innovative Medical Services name in the Representative's letterhead,
business cards, and similar materials during the term of this
Agreement, provided that the form of such use is first approved in
writing by legal counsel and/or an authorized officer of IMS, and
provided further that it is not used in any manner forbidden by law,
nor in any manner which tends to indicate that IMS and the
Representative are not independent parties or otherwise to
misrepresent the relation between IMS and the Representative.
ss.7. Authorized Customers
--------------------
Notwithstanding any other provision of this Agreement, IMS reserves the
right at any time to limit by written notice those Retailers in the Territory
who are authorized to purchase any or all of the Products, and the
Representative shall not solicit orders from a Retailer in the Territory who is
not authorized to order that Product from IMS.
ss.8. Sales Information
-----------------
Subject to applicable laws and regulations, IMS shall furnish the
Representative such technical advice, sales literature, catalogs, price lists
and other written material, as IMS in its sole discretion deems necessary for
the Representative to carry out this Agreement.
ss.9. Acceptance of Orders
--------------------
a. All orders for Products hereunder must be prepared in accordance with
the IMS current prices, terms and conditions operable on the date of
placement of any such order. All prices, specifications and terms
governing the sale of Products within the Territory shall be
established, or changed upon 30 days written notice, at the sole
prerogative of IMS.
IMS Manufacturer's Representative Agreement
Representative's Initials: FR IMS: MLK
-------- -------
b. A purchase order properly executed by the customer will be submitted
for all orders placed. If the order is placed by phone, the written
and signed purchase order marked "CONFIRMING" by the customer must be
submitted by fax to IMS within five calendar days of phone order.
c. IMS in its sole discretion shall determine whether or not to accept
any particular order. IMS shall have no obligation or liability to the
Representative or to any other party for refusal to accept any order,
regardless of the reason for such refusal.
ss.10. Commissions
-----------
a. IMS will pay a commission to the Representative on accepted orders for
which full payment has been received from the customer. The commission
will be calculable at a rate as referenced in Exhibit "A," and shall
apply to the monthly Territory sales proceeds to IMS net of any sales
or promotional discounts, shipping, handling and any applicable taxes.
In the event that customer(s) return or request a refund regarding any
Products upon which a commission has already been paid, the commission
for that sale will be deducted from the Representative's next
commission payment, but in any event must be repaid to IMS within 30
days of written request.
b. Sub-Representatives or Agents: IMS shall not be responsible for making
any payments to sub-representatives or agents of the Representative.
Such payments, if applicable, are the sole responsibility of the
Representative.
c. Payment Schedule: Commission payments to the Representative by IMS
shall be payable on the tenth of the month on Territory sales proceeds
fully credited in the previous month to IMS. The Representative will
have 30 days from the date of payment to dispute any commission
amounts.
d. Accounting: IMS shall maintain records in sufficient detail for
purposes of determining the proper amount of the commission. IMS shall
provide the Representative with a monthly written accounting that sets
forth the manner in which the commission payment was calculated.
e. Right to Inspect: At its expense, the Representative shall have the
right to inspect IMS' records for the limited purpose of verifying the
calculation of the commission payments, subject to such restrictions
as IMS may reasonably impose to protect the confidentiality of the
records. Such inspections shall be made during regular business hours
as may be set by IMS.
f. Anything contained herein to the contrary notwithstanding, IMS shall
not be liable to the Representative for any commissions for any
Products, which may be sold in the Territory by any person or
organization other than the Representative.
g. When two or more territories sales representatives are involved in a
paid sale, any commissions owed may be allocated between or among
participating sales representatives by IMS at its sole discretion
according to the particular facts and/or circumstances. The decision
of IMS on all such divisions of commissions shall be final.
ss.11. IMS' Right to Sales
-------------------
IMS reserves the right to solicit orders for the Products in the Territory
on its own behalf should IMS in its sole discretion determine that such action
is required for the adequate representation of the Products, and, provide
further that nothing herein contained shall prohibit or restrict IMS' right to
appoint during the Term of this Agreement, in anticipation of the expiration or
termination of such Term, a new representative for the Products in the Territory
whose representation of the Products will commence after the expiration or
termination of the Term of this Agreement. IMS may designate certain accounts as
national accounts. The Representative will be asked to provide service to said
national account. Commissions to the Representative upon a designated national
account sale in the Territory will be paid at the rate to be agreed upon on an
ad hoc basis in writing between IMS and the Representative.
ss.12. Term
----
a. This Agreement shall take effect as specified in ss. 33 hereof, and
shall continue in effect for the Term specifically described in
Exhibit "A," unless terminated sooner as described hereinafter. The
Term of this Agreement shall not exceed twelve months unless this
Agreement is expressly approved and executed by the President / CEO of
IMS.
b. In the event of termination of this Agreement, IMS shall pay
commissions for all orders placed by customer(s) of the Representative
and fully paid for within 90 days of the termination date. Further, if
the Representative has prior to termination presented a customer to
IMS which is subject to a binding contract for future purchases of IMS
Products, IMS will pay commission at the enumerated rate for sales
pursuant to such contract which are fully paid for by customer up to
120 days after the effective date of termination.
IMS Manufacturer's Representative Agreement
Representative's Initials: FR IMS: MLK
-------- -------
ss.13. Termination
-----------
a. In addition to any and all other remedies available to IMS under law
or equity, any of the events specified in Sub-Section (b) below shall
immediately, upon written notice by IMS, terminate this Agreement.
Upon such termination, the Representative shall not be entitled to any
commissions or other compensation under this Agreement except as
provided in Section 12(b) hereof.
b. The events, the occurrence of which shall constitute termination for
cause:
1. The Representative shall cease to carry on business, become
bankrupt or insolvent, or become, in the sole and unfettered
judgment of IMS so financially unstable that it would be in the
best interests of IMS to terminate this Agreement.
2. The Representative or any of its officers, employees or agents
shall perpetrate fraud upon IMS or any IMS customer(s) in the
course of this Agreement.
3. The Representative attempts to or does sell Products outside the
Territory.
4. The Representative defaults on payment obligations to IMS.
5. The Representative sells or otherwise promotes competing or
similar products of another manufacturer, unless prior written
permission by IMS has been given to the Representative.
c. Neither party shall by reason of the termination of this Agreement be
liable to the other for compensation or damages on account of the loss
of present or prospective profits, or commissions on sales or
anticipated sales, or expenditure, investments or commitments made in
connection therewith, or in connection with the establishment,
development or maintenance of the selling representation hereunder;
provided that such termination shall not relieve IMS of any liability
to the Representative for any earned but unpaid commissions in
accordance with the provisions ofss.12 above and subject to the
foregoing, shall not be deemed to constitute a waiver of any other
claim which IMS may have against the Representative; and provided
further, that the acceptance of any order by IMS after the termination
of this Agreement shall not be construed as a renewal of extension of
this Agreement or as a waiver of termination.
d. Upon termination of this Agreement, the Representative shall cease
using IMS trademarks for any purpose whatsoever, and turn over to IMS
invoices and copies thereof, demonstrators, pamphlets, catalogs,
booklets and/or other technical, advertising and selling data and
literature concerning the Products of IMS in the possession of the
Representative.
e. The Representative agrees, that during the term of this Agreement, and
for one year after termination of this Agreement, neither the
Representative nor any of its employees will back-solicit or otherwise
deal directly with any company that IMS has contracted with the
Representative to perform sales and customer service. The
Representative agrees that any work it directly provides to or
performs for any IMS client without IMS involvement or approval will
result in a sales commission automatically and retroactively applied
to all such transactions of 25% of Gross Invoice to the client payable
in full from the Representative to IMS.
ss.14. Assignment
----------
The Representative shall not assign any rights or duties hereunder to any
person or organization without the prior written consent of IMS.
ss.15. Full Agreement Amendment
------------------------
This Agreement embodies the full understanding of the parties and
supersedes in all respects any agreements or understandings, written or oral, in
effect between the parties relating to the subject matter hereof. This
Agreement, including but not limited to Exhibit "A" thereof, shall be amended or
modified only by IMS' President / CEO in a writing signed by the parties hereto.
ss.16. Waiver
------
Failure by either party to enforce any provision of this Agreement shall
not be construed as a waiver of any breach or a waiver of such provision hereof
or of the right of such party thereafter to enforce such provision.
ss.17. Notices
-------
All notices herein provided for shall be deemed sufficiently given when:
(a) Delivered to Federal Express, Airborne, or any other similar express
delivery service for delivery to the Representative; or (b) Mailed by postpaid
certified mail, return receipt requested, to the other party at its address set
forth above or at such other address of which it shall have informed the other
party by such a written notice.
IMS Manufacturer's Representative Agreement
Representative's Initials: FR IMS: MLK
-------- -------
ss.18. Indemnity
---------
The Representative will hold IMS (and its shareholders, directors,
officers, attorneys, and agents) harmless, and will indemnify and defend each
and all of them from any asserted liability, loss, damages, costs or expenses
(including reasonable attorneys fees) alleged to have occurred due to the
intentional or negligent acts or omissions of the Representative or its
officers, employees, agents or sub-representatives, including but not limited to
any claims asserted against IMS because of the Representative's unauthorized
sale(s) of IMS Products outside of the designated Territory.
ss.19. Affiliates
----------
Anything that the Representative is prohibited from doing under this
Agreement shall be considered a violation of this Agreement if done directly or
indirectly by any person or entity which owns or controls the Representative, is
owned or controlled by the Representative, or is under common ownership or
control with the Representative.
ss.20. Excusable Delay
---------------
IMS will not be liable for any failure or delay in the delivery of Products
due to circumstances beyond its reasonable control, such as natural catastrophe,
fire, war, riot or civil unrest, strike, lockout or other labor disturbance,
shortage or unavailability of materials, components or transportation
facilities, or any act, refusal to act, regulation, order or intervention of
governmental authorities.
ss.21. Severability
------------
If any provision of this Agreement is held illegal, invalid or
unenforceable, such provision shall be modified to render it legal, valid and
enforceable while to the fullest extent possible preserving the business and
financial intent and impact of the original provision, and the legality,
validity and enforceability of all other provisions of this Agreement shall not
be affected.
ss.22. Governing Law
-------------
All questions concerning the validity or meaning of this Agreement or
relating to the rights and obligations of the parties with respect to
performance under this Agreement shall be construed and resolved under the laws
of the state of California, without reference to any conflict of laws
provision(s).
ss.23. Dispute Resolution
------------------
Each and all disputes and controversies arising out of and/or related to
this Agreement and the transactions contemplated by this Agreement (whether
sounding in contract, tort, or otherwise) shall be determined exclusively by the
San Diego Arbitrator (Jack Fitzmaurice, Esq. or his duly appointed
successor-in-interest) pursuant to the terms and conditions of the Settlement
Agreement, to which this Manufacturer's Representative Agreement is attached as
Exhibit "E."
ss.24. Independent Legal Advice
------------------------
Both Parties to this Agreement have been provided with ample opportunity to
seek independent legal and business advice regarding the propriety of executing
this Agreement, and have either done so or waive that privilege.
ss.25. Joint Drafting
--------------
This Agreement has been drafted with the joint cooperation of the Parties
such that any ambiguity that may exist in the language is to be interpreted in
an evenhanded manner.
ss.26. Final Integration
-----------------
This Agreement is the final and integrated contract between the parties,
and it supersedes any prior or contemporaneous written or oral understandings.
ss.27. Benefit
-------
Except as otherwise provided herein to the contrary, this agreement shall
inure to the benefit of and shall be binding upon the parties signatory hereto
and their respective heirs, executors, administrators, legal representatives,
successors and permitted assigns.
ss.28. Faxed Execution
Each Party hereto shall be authorized to rely upon the signature(s) of the
other Party hereto which are delivered by facsimile as constituting a duly
authorized, irrevocable, actual, current delivery of this Agreement.
ss.29. Execution In Counterparts
-------------------------
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.
ss.30. Time Is Of The Essence
----------------------
Time is of the essence with respect to any act or performance as set forth
in this Agreement.
ss.31. Further Documents
-----------------
Each Party will, whenever and as often as it shall be reasonably requested
by the other Party, execute, acknowledge and deliver such further instruments
and documents as may be necessary in order to carry out the intent and purpose
of this Agreement, including but not limited to the "Manufacturer's
Representative Confidentiality Agreement," appended hereto as Exhibit "B," and
to be executed by the Representative concurrent with signature hereunder.
ss.32. Warranty of Authority
---------------------
Each person signing this Agreement on behalf of an entity warrants that he
or she has the authority to bind said entity by signing this Agreement.
ss.33. Effectiveness
-------------
This Agreement shall become effective when fully executed by the parties to
the transaction.
IMS Manufacturer's Representative Agreement
Representative's Initials: FR IMS: MLK
-------- -------
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
AQUA BIO TECHNOLOGIES, S.A. de C.V.
Dated:11/27/01 By: /s/ Federico Rodriguez
----------- -------------------------------------
Federico Rodriguez, Director General
INNOVATIVE MEDICAL SERVICES
Dated: 11/16/01 By: /s/ Michael L. Krall
----------- -------------------------------------
Michael L. Krall, President / CEO
IMS Manufacturer's Representative Agreement
Representative's Initials: FR IMS: MLK
-------- -------
Exhibit "A"
-----------
Product(s): This Agreement is entered into only for the sale of Innovative Medical
Services product(s) known as Axen.
Method of marketing: Direct marketing to customers within the authorized Territory.
Territory: Mexico, non-execlusive (except as to Rotoplas).
Commission Rate: The Commission rate of 20% on adjusted gross, and 30% on Rotoplas shall
be paid as more specifically described in ss.10 of this Agreement.
Term: This Agreement shall take effect as specified in
ss.33, and shall continue in effect for a
period of Three Years, unless terminated
sooner as described in ss.13 of this
Agreement.
Minimums: Year One: $150,000.00.
Year Two: $300,000 Sales in that Year.
Year Three: $500,000 Sales in that Year.
Cancellation: This representative contract shall be cancelled upon written notice of
IMS should Representative fail to reach any of the stated annual
Minimums. Time is of the essence and no "cure period" is applicable.
Option: Should Representative remain in faithful compliance
with the terms and conditions of this Agreement, it shall be
entitled to a renewable three-year option period, with
annual minimum sales thereafter of $1,000,000.00.
Cooperation: Representative shall cooperate with IMS by relinquishing designated
markets (e.g., dental) within the Territory if necessary for IMS to
complete an exclusivity agreement with a Third Party in a multinational
transaction. Consideration to be negotiated between IMS and
Aqua Bio Technologies, and if agreement cannot be reached, both parties agree to
allow Jack Fitzmaurice to decide appropriate terms and conditions under
the circumstances.
AQUA BIO TECHNOLOGIES, S.A. de C.V.
Dated: 11/27/01 By: /s/ Federico Rodriguez
------------- ---------------------------------
Federico Rodriguez, Director General
INNOVATIVE MEDICAL SERVICES
Dated:11/16/01 By: /s/ Michael L. Krall
------------ ---------------------------------
Michael L. Krall, President / CEO
Exhibit "B"
MANUFACTURER'S REPRESENTATIVE NON-CIRCUMVENTION
NON-COMPETITION AND CONFIDENTIALITY AGREEMENT
THIS AGREEMENT, dated as of the 1st day of January, 2002 by and between
Innovative Medical Services, a California Corporation with its principal place
of business at 1725 Gillespie Way, El Cajon, California 92020 (hereafter the
"Company"), and Aqua Bio Technoliges, S.A. de C.V. (hereafter the
"Representative"), and collectively referred to as the "Parties."
WHEREAS, the parties are mutually desirous of transacting various business
transactions in cooperation with one another for their mutual benefit;
WHEREAS, the parties realize and recognize the importance of maintaining
the integrity of the Company's sources, contacts, trade secrets and other
information; and
NOW, THEREFORE, the Parties agree as follows:
1. PURPOSE:
--------
All parties desire to explore a business opportunity under which the
Company may disclose information to the Representative without fear that the
Representative will disclose such information to the detriment of the Company,
or to otherwise use such information to compete or circumvent the business
opportunities of the Company.
2. DEFINITIONS:
------------
A. Information: The parties recognize that the Company has and will have
the following information: business methods, customers, dealers, employees,
associates, inventions, machinery, products, apparatuses, costs, future plans,
business affairs, process information, trade secrets, technical information,
customer lists, copyrights, product design information, trademarks, and other
proprietary information (collectively, "information") which are valuable,
special and unique assets of the Company, and need to be protected from improper
disclosure. Not included within this definition is information which:
(1) Is in the possession of the receiving party's files and records
immediately before the time of disclosure;
(2) Enters the public domain but not as a result of a breach of this
Agreement;
(3) Is acquired by the receiving party without written restrictions
against disclosure from a third party which, to the receiving party's
knowledge, is not prohibited from disclosing the Information; or
(4) Is independently developed by the receiving party without use of the
disclosing party's information.
B. Circumvent shall mean to act, contact, or negotiate with third
parties in connection with a business opportunity resulting from
confidential information obtained from the Company.
C. Compete shall mean to pursue any business opportunity arising
from confidential information obtained from the Company.
3. RETURN OF MATERIAL:
-------------------
Any original materials and/or documents that have been furnished by the
Company to the Representative (and any and all copies or summaries thereof) will
be promptly returned upon written request by the Company at such time as the
business possibility upon which the parties have been working has been rejected
and/or concluded.
4. PATENT OF COPYRIGHT INFRINGEMENT:
---------------------------------
Nothing in this Agreement is intended to grant any rights under any
patent or copyright.
5. SCOPE:
------
This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements, if any, whether written or oral between the
parties related to non-circumvention, non-competition and confidentiality.
6. NON DISCLOSURE OF CONFIDENTIAL INFORMATION:
-------------------------------------------
The Representative agrees not to use any information disclosed to it by
the Company for any purpose except to consummate any business relationship
between the two parties. Except as hereinafter delineated, the Representative
shall not disclose information received from the Company to third parties.
Access to such information will be restricted to those representative(s),
agent(s) or other person(s) who will participate in a decision with regard to
the pending business opportunity in which the parties are engaged.
IMS Manufacturer's Representative Agreement
Representative's Initials: FR IMS: MLK
-------- -------
A. Any representative, agent, or persons, described above to whom
information is disclosed shall be bound by the terms of this Agreement, and both
parties agree to execute such additional confidentiality agreement(s) with such
third parties as are reasonably necessary to assure compliance with the letter
and spirit of this Agreement. Each party agrees that it will take any and all
additional reasonable steps to protect the secrecy of information such as to
avoid improper disclosure and/or misuse of information.
B. It is agreed and understood that the Representative named in this
Agreement agrees to keep confidential the name, address, telephone numbers, or
fax and telex numbers and e-mail addresses of any contacts introduced by the
Company unless prior written permission is given.
C. In the event of breach by the Representative, the parties agree that
damages alone are not an adequate remedy for any breach of this Agreement, and
that upon such breach; the Company shall be entitled to both preliminary and
permanent injunctive relief without the posting of a bond.
7. PARTIES BOUND:
--------------
This Agreement shall be binding upon all the parties and is for the
benefit of the undersigned parties, their successors and assigns.
8. GOVERNING LAW AND DISPUTE RESOLUTION:
-------------------------------------
Each and all disputes and controversies arising out of and/or related
to this Agreement and the transactions contemplated by this Agreement (whether
sounding in contract, tort, or otherwise) shall be determined exclusively by the
San Diego Arbitrator (Jack Fitzmaurice, Esq. or his duly appointed
successor-in-interest) pursuant to the terms and conditions of the Settlement
Agreement, to which this Manufacturer's Representative Non-Circumvention
Non-Competition and Confidentiality Agreement is attached as a part of Exhibit
"E."
9. AMENDMENTS:
-----------
This Agreement may be amended or modified only by a written instrument
signed by both parties.
10. PENALTIES:
----------
In the event either party violates any of the terms of this Agreement,
the party so violating this Agreement shall be responsible for all damages and
all reasonable attorney's fees and costs incurred by the other party in
enforcing its rights under this contract.
11. INVALIDATION:
-------------
In the event that any provision of this Agreement shall finally be
determined to be invalid or unlawful, such provision shall be deemed severed
from this Agreement, and replaced by another provision closest representing its
intention, and every other provision of this Agreement shall remain in full
force and effect.
12. NOTICES:
--------
Any notice or communication shall be given in writing to the following
addresses: If to the Company:
Innovative Medical Services
Attn: Michael L. Krall
1725 Gillespie Way
El Cajon, CA 92020
Fax: 619-596-8790
If to the Representative:
Aqua Bio Technologies, S.A. de C.V.
Attn: Federico Rodriguez
Creston 357
Pedregal de San Angel
Mexico, D.F. 01900
Fax: 011-525-568-9813
Any notices given by hand shall be deemed given as of the day when they
are delivered. Notices given by facsimile and by overnight mail shall be deemed
given as of the business day following the date on which they are delivered.
Notices given to an overnight carrier service, and marked prepaid for, next
business day delivery shall be deemed given as of the day they are delivered.
13. INDEPENDENT LEGAL ADVICE
------------------------
Both Parties to this Agreement have been provided with ample
opportunity to seek independent legal and business advice regarding the
propriety of executing this Agreement, and have either done so or waive that
privilege.
14. FURTHER DOCUMENTS
-----------------
Each Party will, whenever and as often as it shall be reasonably
requested by the other Party, execute, acknowledge and deliver such further
instruments and documents as shall be necessary in order to carry out the intent
and purpose of this Agreement
15. WARRANTY OF AUTHORITY
---------------------
Each person signing this Agreement on behalf of an entity warrants that
he or she has the authority to bind said entity by signing this Agreement.
16. COUNTERPARTS:
-------------
This Agreement may be executed in counterparts and a facsimile
signature shall have the same force and effect as an original signature.
IMS Manufacturer's Representative Agreement
Representative's Initials: FR IMS: MLK
-------- -------
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year above.
INNOVATIVE MEDICAL SERVICES
By: /s/ Michael L. Krall Dated: 11/16/01
--------------------------------- -------------------
Michael L. Krall, President / CEO
AQUA BIO TECHNOLOGIES, S.A. de C.V.
By:/s/ Federico Rodriguez Dated: 11/27/01
--------------------------------- -------------------
Federico Rodriguez, Director General
IMS Manufacturer's Representative Agreement
Representative's Initials: FR IMS: MLK
-------- -------
[IMS LOGO}
Exhibit F
DISTRIBUTOR/MANUFACTURE AGREEMENT
THIS AGREEMENT is made this 16th day of November 2001, by and between Innovative
Medical Services ("IMS"), a California corporation with its principal place of
business at 1725 Gillespie Way, El Cajon, California 92020, and Sistecam, S. A.,
a Costa Rican corporation organized under the laws of the Costa Rica ("the
Distributor/Manufacture"), with its principal place of business at Del Triangulo
en Rohrmoser, Costado Este de la Farmacia, Rohrmoser, Pavas, San Jose, Costa
Rica, and collectively referred to as the "Parties."
WHEREAS, Innovative Medical Services desires to appoint Sistecam, S.A. as a
distributor and manufacture of certain Innovative Medical Services product(s)
known as Axen(TM) and/or Axenohl(TM).
WHEREAS, the Distributor/Manufacture desires to and hereby does accept the
Distributor/Manufacture position in the Territory pursuant to the agreed upon
terms and conditions;
NOW, THEREFORE, it is agreed as follows:
ss.1. Appointment
-----------
IMS hereby appoints on an exclusive basis the Distributor/Manufacture to be
its exclusive distributor and/or manufacture in the Territory known as Costa
Rica.
ss.2. Royalty
-------
The Distributor/Manufacture will pay a royalty to IMS on gross sales. The
royalty will be calculable at a rate of 2% and shall apply to the monthly
Territory gross sales of the Products net of any sales or promotional discounts,
shipping, handling and any applicable taxes.
a. Payment Schedule: Royalty payments to IMS shall be payable on first
day of each business quarter on Territory sales proceeds.
b. Accounting: the Distributor/Manufacture shall maintain records in
sufficient detail for purposes of determining the proper amount of the
royalty. IMS shall provide IMS written accounting that sets forth the
manner in which the commission payment was calculated.
c. Right to Inspect: At its expense, IMS shall have the right to inspect
the Distributor/Manufacture's records for the limited purpose of
verifying the calculation of the commission payments, subject to such
restrictions as may reasonably impose to protect the confidentiality
of the records. Such inspections shall be made during regular business
hours.
ss.3. Term
----
This Agreement shall take effect as specified, and shall continue in effect
for the Term of the Core Settlement Agreement, to which this Agreement is
attached as Exhibit "F." It is the intent of this Agreement and of the Core
Settlement Agreement that this Sistecam contract shall become the obligation of
any future assignee or successor-in-interest of the Patent, including but not
limited to NVID.
ss.4. Termination
-----------
a. In addition to any and all other remedies available to IMS under law
or equity, any of the events specified in Sub-Section (b) below shall
immediately, upon written notice by IMS, terminate this Agreement.
b. The events, the occurrence of which shall constitute termination for
cause:
1. The Distributor/Manufacture shall cease to carry on business,
become bankrupt or insolvent
2. The Distributor/Manufacture or any of its officers, employees or
agents shall perpetrate fraud upon IMS or any IMS customer(s) in
the course of this Agreement.
3. If the breach for cause is of the type that can be remedied or
corrected by Sistecam, then IMS shall allow a 30-day cure period
dating from written notice by IMS to correct said breach.
ss.5. Assignment
----------
The Distributor/Manufacture shall be entitled to assign any rights or
duties hereunder to any person or organization without the prior written consent
of IMS, however any assignee must be bound in writing to the terms and
conditions of this Agreement.
ss.6. Waiver
------
Failure by either party to enforce any provision of this Agreement shall
not be construed as a waiver of any breach or a waiver of such provision hereof
or of the right of such party thereafter to enforce such provision.
ss.7. Indemnity
---------
The Distributor/Manufacture will hold IMS (and its shareholders, directors,
officers, attorneys, and agents) harmless, and will indemnify and defend each
and all of them from any asserted liability, loss, damages, costs or expenses
(including reasonable attorneys fees) alleged to have occurred due to the
intentional or negligent acts or omissions of the Distributor/Manufacture or its
officers, employees, agents or sub-representatives, including but not limited to
any claims asserted against IMS because of the Distributor/Manufacture's
unauthorized sale(s) of IMS Products outside of the designated Territory.
IMS Distributor/Manufacturer's Agreement
Representative's Initials: ABA IMS: MLK
------ -------
ss.8. Severability
------------
If any provision of this Agreement is held illegal, invalid or
unenforceable, such provision shall be modified to render it legal, valid and
enforceable while to the fullest extent possible preserving the business and
financial intent and impact of the original provision, and the legality,
validity and enforceability of all other provisions of this Agreement shall not
be affected.
ss.9. Governing Law
-------------
All questions concerning the validity or meaning of this Agreement or
relating to the rights and obligations of the parties with respect to
performance under this Agreement shall be construed and resolved under the laws
of the state of California, without reference to any conflict of laws
provision(s).
ss.10. Dispute Resolution
------------------
Each and all disputes and controversies arising out of and/or related to
this Agreement and the transactions contemplated by this Agreement (whether
sounding in contract, tort, or otherwise) shall be determined exclusively by the
San Diego Arbitrator (Jack Fitzmaurice, Esq. or his duly appointed
successor-in-interest) pursuant to the terms and conditions of the Settlement
Agreement, to which this Manufacturer's Representative Agreement is attached as
Exhibit "F."
ss.11. Final Integration
-----------------
This Agreement is the final and integrated contract between the parties,
and it supersedes any prior or contemporaneous written or oral understandings.
ss.12. Benefit
-------
Except as otherwise provided herein to the contrary, this agreement shall
inure to the benefit of and shall be binding upon the parties signatory hereto
and their respective heirs, executors, administrators, legal representatives,
successors and permitted assigns.
ss.13. Faxed Execution
---------------
Each Party hereto shall be authorized to rely upon the signature(s) of the
other Party hereto which are delivered by facsimile as constituting a duly
authorized, irrevocable, actual, current delivery of this Agreement.
ss.14. Execution In Counterparts
-------------------------
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
Agreement.
ss.15. Further Documents
-----------------
Each Party will, whenever and as often as it shall be reasonably requested
by the other Party, execute, acknowledge and deliver such further instruments
and documents as may be necessary in order to carry out the intent and purpose
of this Agreement.
ss.16. Warranty of Authority
---------------------
Each person signing this Agreement on behalf of an entity warrants that he
or she has the authority to bind said entity by signing this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SISTECAM, S. A.
Dated: 11/21/01 By: /s/ Andrew B. Arata
----------- ---------------------------
Andrew B. Arata
INNOVATIVE MEDICAL SERVICES
Dated: 11/21/01 By: /s/ Michael L. Krall
---------- ---------------------------------
Michael L. Krall, President / CEO
IMS Distributor/Manufacturer's Agreement
Representative's Initials: ABA IMS: MLK
------ -------
Exhibit "G"
GUARANTY
THIS GUARANTY is made and given as of this 15th day of November 2001,
jointly and severally by David Larson, Michael Redden, and Steven Gordon (the
"Guarantors"), in favor of Innovative Medical Services, a California corporation
("IMS"), or its successor(s) in interest.
W I T N E S S E T H:
WHEREAS, concurrent with the execution of this Guaranty, IMS has agreed to
issue certain stock to NVID International, Inc., a Delaware corporation and/or
its assignees, pursuant to the Agreement to which this Guaranty is attached as
Exhibit "G" ("Agreement"); and
WHEREAS, the execution and delivery of this Guaranty is a condition
precedent to the execution, delivery and performance of the Agreement by IMS.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and as a material inducement to
IMS to enter into the transactions contemplated by the Agreement, the
undersigned hereby absolutely and unconditionally guarantee to IMS and its
successors and assigns the Specific Grant of Indemnity provided by NVID in
Section 3.11 of the Agreement, and performance of any and all obligations of
NVID to IMS under Section 3.11 of the Agreement, with the exception of Steven
Gordon, whose guaranty extends only to any events, actions or circumstances
occurring or arising after June 25, 2001, the date on which he became an NVID
Board Member.
The Guarantors agree to pay to IMS or successors on demand, reasonable
attorneys' and legal assistants' fees and all costs and other expenses which it
expends or incurs in asserting and/or defending any claim made to NVID under
Section 3.11, or in enforcing this Guaranty against the Guarantors, whether or
not suit is filed. Any dispute arising under this Guaranty or the enforcement
thereof, shall be determined by the Arbitrator Jack F. Fitzmaurice or his duly
appointed successor(s) pursuant to the terms and conditions of Sections 18.1 and
18.7 of the Agreement.
This Guaranty shall remain in full force and effect until one (1) year from
the date above. Neither the death of, nor subsequent written notice from, the
undersigned shall release the Guarantors or the Guarantors' personal
representatives, as the case may be, from liability to IMS, its successors and
assigns, with respect to this Guaranty during the one (1) year term.
In the event any one or more of the provisions contained in this Guaranty,
or any instrument or other document delivered pursuant to this Guaranty, should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein, shall
not in any way be affected or impaired thereby.
The obligations hereunder are independent of the obligations of NVID
pursuant to Section 3.11, such that after default by NVID, a separate claim may
be brought and prosecuted against Guarantors before Arbitrator Fitzmaurice
whether action is brought against NVID or whether NVID is joined in any such
claim.
IN WITNESS WHEREOF, the undersigned have executed this Guaranty effective
on the date first above written.
DAVID LARSON
/s/ David Larson
----------------- Dated: November 27, 2001
David Larson, an individual
MICHAEL REDDEN
/s/ Michael Redden
-------------------- Dated: November 27, 2001
Michael Redden, an individual
STEVEN GORDON
------------------------- Dated: November , 2001
Steven Gordon, an individual ----