MASTER
GLOBAL MARKETING AND DISTRIBUTION AGREEMENT
This agreement
(together with the Exhibits, Schedules and Attachments hereto, if any, this
“Agreement”) is made as
of the ______ day of July 2008 by and between Cellynx Inc., a Nevada corporation
(“CELLYNX”) and
Dollardex, Corp. a Panama corporation, (“DOLLARDEX”). CELLYNX
and DOLLARDEX are sometimes referred to herein as a “Party” or collectively as the
“Parties.”
WITNESSETH:
WHEREAS,
CELLYNX is engaged in the development, production, assembly, marketing and
licensing of certain proprietary amplification devices for wireless products,
principally the 5BARz™ and related accessories line of products.
WHEREAS,
DOLLARDEX proposes to establish a distribution network of CELLYNX’s line of
products in the territory described herein as well as has the necessary ability
to locate, train, and assist international dealers in the promotion, marketing
and sales of the 5BARz™ and related accessories line of products, and to provide
other related services to CELLYNX in connection therewith.
WHEREAS,
CELLYNX and DOLLARDEX have previously entered into that certain Joint Venture
Agreement dated January ___, 2008 pursuant to which CELLYNX granted to DOLLARDEX
and certain JV Companies (as defined therein) exclusive distribution rights of
DOLLARDEX’s products in a designated territory (the “Prior
Agreement”).
WHEREAS,
the Parties now wish to terminate the Prior Agreement, and replace it with this
Agreement, upon the full execution of this Agreement by the
Parties.
NOW
THEREFORE, in consideration of the foregoing, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:
ARTICLE
I
DEFINITIONS
For
the purposes of this Agreement, the following terms shall, unless the context
otherwise requires, have the meaning set forth below:
1.1 “Change of Control"
shall mean any of the following transactions involving another company (other
than CELLYNX or any of its affiliates) (a) a merger or consolidation of
DOLLARDEX which results in the voting securities of DOLLARDEX outstanding
immediately prior thereto ceasing to represent at least 50.1% of the combined
voting power of the surviving entity immediately after such merger or
consolidation; (b) the sale of all or substantially all of the assets of the
DOLLARDEX; or (c) any one person (other than CELLYNX, any trustee or other
fiduciary holding securities under an employee benefit plan of CELLYNX, or any
corporation owned directly or indirectly by the stockholders of CELLYNX, in
substantially the same proportion as their ownership of stock of CELLYNX),
together with any of such person's "affiliates" or "associates", as such terms
are used in the Securities Exchange Act of 1934, as amended, becoming the
beneficial owner of 50.1% or more of the combined voting power of the
outstanding securities of DOLLARDEX or by contract or otherwise having the right
to control the board of directors or equivalent governing body of DOLLARDEX or
the ability to cause the direction of management of the DOLLARDEX.
1.2 “Cost” shall mean
costs of goods sold as determined by U.S. generally accepted accounting
principles.
1.3 “Customer” shall mean
any reseller (whether wholesaler or retailer) or end user of the Products in the
Territory.
1.4 “Dealer(s)” shall mean
distributors and agents of the Products, as appointed by
DOLLARDEX and accepted by CELLYNX, in the Territory.
1.5 "Intellectual Property
Rights" means the collective intellectual property rights now held or
hereafter created or acquired by a party, whether arising under the laws of the
United States or any other state, country or jurisdiction, for (i) all
classes or types of patents, utility models, utility patents and design patents
(including, without limitation, originals, divisions, continuations,
continuations-in-part, extensions, renewals or reissues), patent applications
and disclosures for these classes or types of patent rights in all countries of
the world (collectively "Patent Rights");
(ii) all copyrights in both published works and unpublished works,
software, all registrations and applications therefor and all moral rights in
such works (collectively "Copyrights");
(iii) all trade names, logos, common law trademarks and service marks,
trademark, and service mark registrations, related goodwill and applications
therefore throughout the world (collectively, “Trademarks”);
(iv) all know-how, trade secrets, inventions, other confidential
information, customer lists, software, technical data or specifications, testing
methods, business or financial information, research and development activities,
product and marketing plans, customer and supplies information, process
technology, plans, drawings, and blue prints (collectively "Trade Secrets"); and
(v) all rights (contractual or otherwise) to prevent disclosure or use of
confidential information, and any other similar form of intellectual property or
proprietary rights, statutory or otherwise, whether registrable or not and shall
include applications thereto.
1.6 “Net Earnings” shall mean
the total net earnings, as defined under U.S. generally accepted accounting
principles, before taxes, of DOLLARDEX from sales, licensing and other income
relating directly or indirectly to the Products in the Territory.
1.7 “Products” shall mean
the 5BARz™ and all related accessories, if any, and any and all future products
of CELLYNX.
1.8 “Territory” or “Territories” shall
mean the following nine (9) regions: Canada, South America, Europe, Middle East,
China, India, Australia, Africa, and South East Asia or those countries which
may be expanded from time to time by mutual agreement by the Parties to include
other countries.
ARTICLE
II
TERMS
AND CONDITIONS
2.1 Termination of Prior
Agreement. The Prior Agreement will be terminated upon the
full execution of this Agreement. Neither Party shall remain liable
for any monies owed by it to the other Party under the Prior Agreement, unless
specifically provided for herein.
2.2 Exclusive
Appointment. Subject to DOLLARDEX compliance with the terms
and conditions of this Agreement and subject to any limitations in this
Agreement, CELLYNX appoints DOLLARDEX, and DOLLARDEX accepts such appointment,
as the independent, exclusive distributor of the Products in and limited to the
Territory. Except for the limited right to appoint other Dealers to market and
distribute the Products as contemplated herein, and subject to the terms and
conditions herein, DOLLARDEX shall have no right to sublicense the rights set
forth herein. Subject to DOLLARDEX’s compliance with the terms and
conditions of this Agreement, during the term of this Agreement, CELLYNX will
not appoint another distributor of the Products in the Territory.
2.3 Distribution. DOLLARDEX
will (a) sell and distribute the Products directly to Customers in the
Territory, or (b) sell and distribute the Products to Dealers throughout the
Territory for resale by such Dealers. DOLLAREX shall not
sell to parties who resell Products outside the Territory and shall make
reasonable efforts to monitor and detect such resales outside the Territory and
prevent such resales.
2.4 Trademark
License. Subject to DOLLARDEX’s compliance with the terms and
conditions of this Agreement, CELLYNX grants to DOLLARDEX an exclusive,
non-transferable license to use the trade names, trademarks, logos and
designations in or associated with the Products, as specified in Exhibit A (“Mark”),
during the term of this Agreement, solely in connection with
DOLLARDEX’s marketing, promotion and distribution of the Products
within the Territory. Any such use of a Mark by DOLLARDEX must
correctly attribute ownership of such mark to CELLYNX and must be in accordance
with applicable law and CELLYNX’s then-current trademark usage
guidelines. DOLLARDEX will not remove or obscure any Marks on or in
the Products, and will not attach any additional trademarks, logos or trade
designations on or to the Products. For the avoidance of doubt, the
preceding language will not prohibit DOLLARDEX from noting DOLLARDEX as the
exclusive distributor of the Products. DOLLARDEX acknowledges and
agrees that CELLYNX owns the Marks and that any and all goodwill and other
proprietary rights that are created by or that result from DOLLARDEX’s use of a
Mark hereunder inure solely to the benefit of CELLYNX. DOLLARDEX will
at no time contest or aid in contesting the validity of ownership of any Mark or
take any action in derogation of CELLYNX’s rights herein, including, without
limitation, selling any product or applying to register any trademark, trade
name or other designation that is confusingly similar to any Mark.
2.5 License
Restrictions. DOLLARDEX may not market the Products under any
other mark, and may not modify the Marks in any manner. All rights
not expressly granted hereunder are reserved to CELLYNX. The
processes, know-how, and related material proprietary to CELLYNX necessary to
manufacture the Products (the “Technology”) and all
Intellectual Property Rights therein are and will remain the sole and exclusive
property of CELLYNX.
ARTICLE
III
OBLIGATIONS
OF THE PARTIES
3.1 Dealers
Network. DOLLARDEX will develop a network of Dealers in the
Territory for the introduction, sale, maintenance, and distribution of the
Products in the Territory. DOLLARDEX shall insure that any and all
subsequent distribution agreements with its Dealers shall be subject to the
terms and conditions of this Agreement.
3.2 Pre-Approval of Dealers,
Budgets and Business Plans. CELLYNX shall have the right to
pre-approve any Dealer introduced by DOLLARDEX and the budgets and
business plans of such Dealers, which approvals shall not be unreasonably
withheld. The Parties agree that, not excluding other reasonable
criteria for non-approval, if any one or more of the following factors are
present, the potential Dealer shall deemed to be unacceptable to CELLYNX unless
specifically agreed to otherwise by CELLYNX:
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(i)
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The
potential Dealer has committed a felony or a substantially similar crime,
whether or not in the
Territory;
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(ii)
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The
potential Dealer has been or is currently subject to regulatory
investigation;
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(iii)
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The
potential Dealer has filed for bankruptcy or its equivalent in its
Territory; or
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(iv)
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The
potential Dealer does not have the financial ability to achieve the
marketing objectives contemplated by the
Parties.
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3.3 Promotion. DOLLARDEX
will promote and advertise the Products in accordance with CELLYNX’s reasonable
policies, as announced from time to time. DOLLARDEX will obtain
CELLYNX’s prior approval of any promotional or advertising material relating to
the Products that are not expressly authorized be CELLYNX’s policies before
publishing or distributing such materials. If CELLYNX determines in
its reasonable judgment that any Products or advertising or promotional
materials used or planned by DOLLARDEX may be or are directly or indirectly
injurious or prejudicial to the Marks or the rights thereto of CELLYNX, then
upon notice from CELLYNX, DOLLARDEX shall promptly cease or cause the cessation
of such activity.
3.4 DOLLARDEX
Personnel. DOLLARDEX will maintain sufficient technical and
sales personnel having the knowledge and skills necessary to:
(i) inform customers about the features and capabilities of the
Products and, to the extent necessary, competitive products; (ii) service
and support the Products in accordance with DOLLARDEX’s obligations under this
Agreement; and (iii) otherwise perform its obligations under this
Agreement. DOLLARDEX will, at its expense, comply with CELLYNX’s minimum
training requirements for distributors of the Products.
3.5 Support. DOLLARDEX
will provide prompt and comprehensive pre-sales and post-sales support services,
at its own cost, for the Products to DOLLARDEX’s Dealers and Customers in the
Territory. CELLYNX will maintain sufficient technical and sales
personnel to provide such support service to DOLLARDEX and its
Dealers and Customers as reasonably necessary.
3.6 Drop
Shipment. CELLYNX will drop ship the Products to DOLLARDEX’s
designated HUBs or such other location at the election of
DOLLARDEX. All costs related to such drop shipment are to be borne by
DOLLARDEX or by the HUB or such other third party as separately agreed to
between DOLLARDEX and the HUB or such third party. DOLLARDEX may establish such
HUBs or other drop shipment locations with the written consent of CELLYNX which
shall not be unreasonably withheld. The risk of loss or damages to
destruction of the Products shall be borne by DOLLARDEX. For purposes
of clarification the Parties acknowledge that the drop shipment costs to be
borne by DOLLARDEX as provided for in this Section 3.6, shall be in addition to,
apart from, and not counted as against, any other fee or monies to be paid by
DOLLARDEX including without limitation the those provided for under Section 3.15
to this Agreement.
3.7 Facilities. DOLLARDEX
shall provide office facilities in the Territory to be used as training
facilities by Dealers as DOLLARDEX deems necessary to meet its
obligations.
3.8 Packaging. DOLLARDEX
will distribute the Products unmodified and with all packaging and proprietary
rights statements intact, and any changes to such packaging or marking shall
require CELLYNX’s pre-approval. DOLLARDEX shall translate and
provide all packaging material and related literature, including without
limitation any CELLYNX users guides into the applicable language(s) in the
Territory with all costs associated therewith to be borne by
DOLLARDEX.
3.9 Business
Conduct. DOLLARDEX will: (i) conduct business in a manner
that reflects favorably at all times on the Products and the good name, goodwill
and reputation of CELLYNX; (ii) make no false or misleading representations
or advertisements with regard to CELLYNX or the Products; and (iii) make no
representations, warranties or guarantees to customers or to the trade with
respect to the specifications, features or capabilities of the Products that are
inconsistent with the literature and written instructions distributed by
CELLYNX.
3.10 Inventory. DOLLARDEX
will maintain an inventory of the Products sufficient to meet the needs of its
Customers on a timely basis, but, in any event, at least an inventory sufficient
to meet DOLLARDEX’s reasonably anticipated demands for any thirty (30) day
period.
3.11 Competition. DOLLARDEX
shall not, and shall ensure that its Dealers shall not, sell, contract to sell,
arrange for the sell, or otherwise acquire any interest either directly or
indirectly in any products that compete with the Products.
3.12 Maintenance of Regulatory
Approvals, Licenses, Certifications and CE Mark.
(i) CELLYNX
shall be fully responsible for obtaining all necessary certification and
registration for the sale of the Products in the Territory. CELLYNX
will be solely responsible for maintaining all obligations required as
part of any regulatory approvals, licenses, ISO certifications and CE
Markings issued under CELLYNX’s name. All such efforts shall be undertaken at
CELLYNX’s cost. CELLYNX shall also maintain in good standing all
necessary regulatory approvals, licenses, ISO certifications and CE Markings
issued under CELLYNX’s name.
(ii) DOLLARDEX
shall be fully responsible for obtaining all necessary certification and
registration for DOLLARDEX to sell Products. DOLLARDEX will be solely
responsible for maintaining all obligations required as part of any
regulatory approvals, licenses, ISO certifications and CE Markings issued under
CELLYNX’s name. All such efforts shall be undertaken at DOLLARDEX’s
cost. DOLLARDEX shall also maintain in good standing all necessary
regulatory approvals, licenses, ISO certifications and CE Markings issued under
CELLYNX’s name and will notify the issuing parties and/or governmental agencies
in each country where such regulatory approvals, licenses, ISO certifications
and CE Markings have been issued or are to be issued under CELLYNX’s
name.
(iii) DOLLARDEX
will be solely responsible for ensuring its activities in the promotion,
marketing, sales and distribution of Products is conducted in compliance with
all regulations applicable to DOLLARDEX in each country where such activities
take place. CELLYNX commits to ensure that all regulatory approvals,
licenses, ISO certifications and CE Markings of the Products are properly
maintained or obtained, as applicable, such that there is no impairment of the
good name and goodwill of CELLYNX.
(iv) CELLYNX will
be solely responsible for communicating with pertinent governmental agencies or
other regulating bodies with respect to all regulatory approvals, licenses, ISO
certifications and CE Markings currently issued under CELLYNX’s
name.
(v) Upon
termination of this Agreement for any reason, DOLLARDEX, at the request of
CELLYNX, will use commercially reasonable efforts to transfer any and all
regulatory or governmental certifications or approvals pertaining to Products to
CELLYNX. CELLYNX shall reimburse DOLLARDEX for all reasonable and
actual costs incurred by DOLLARDEX related to any and all regulatory or
governmental certifications or approvals pertaining to the Products, if
obtaining such certifications or approvals had been approved by CELLYNX in
writing prior to being obtained.
3.13 Invoices, Collections, and
Taxes. DOLLARDEX shall render all invoices directly to Dealers
or Customers. Invoice payment shall be made directly to
DOLLARDEX. It is expressly understood by the Parties that full
responsibility for all collections rests with DOLLARDEX. CELLYNX
shall have no obligation to pay any taxes on the sale of the Products in the
Territory and DOLLARDEX agrees to indemnify and reimburse CELLYNX for any such
taxes imposed on CELLYNX by any governmental entity with respect to the sale of
the Products in the Territory.
3.14 Insurance. DOLLARDEX
agrees to procure and to maintain general comprehensive liability insurance
covering each occurrence of bodily injury and property damage in the amount of
not less than $1,000,000 per occurrence, $2,000,000 aggregate coverage, with
endorsements for product and completed operations, blanket contractual
liability, and vendor’s liability. DOLLARDEX agrees to furnish upon request by
CELLYNX a certificate of insurance indicating coverage in the required amounts
and stating that the insurer shall endeavor to give CELLYNX written notice at
least thirty (30) days prior to any cancellation, non-renewal, or material
change in coverage. CELLYNX must be named as an additional insured or loss
payee.
3.15 Cost of
Product. CELLYNX shall sell the Products to DOLLARDEX at
Cost plus 10%. The sale of the Products shall be pursuant to a
letter of credit satisfactory to CELLYNX providing for payment in full upon
delivery or alternatively, in lieu of placement of a letter of credit, DOLLARDEX
may, at its option, prepay the purchase price in cash, with payment due at the
time of placement of its purchase order with CELLYNX.
3.16 Development of Business
Plan. Prior to or concurrently with DOLLARDEX entering into distribution
agreements with a Dealer or direct sell of the Products to Customers in a given
Territory, CELLYNX and DOLLARDEX will work together to develop a business plan
and budget for DOLLARDEX and Dealers to include a marketing plan and budget for
deployment of the distribution and marketing of the Products in the specific
Territory. CELLYNX shall have approval rights of the business plan
and budget including without limitation marketing and distribution channels
which approvals shall not be unreasonably withheld. DOLLARDEX shall conduct
business substantially in accordance with the terms of the business plan and
budget, and shall exercise maximum efforts to ensure that its Dealers conduct
business substantially in accordance with the terms of the business plan and
budget. Notwithstanding Section 4.3 to this Agreement (Business Plan
Progress Report), DOLLARDEX shall notify CELLYNX as soon as practicable after it
becomes aware of any deviation by it or its Dealers from the terms of the
business plan and budget. CELLYNX and DOLLARDEX shall use best
efforts to work together to have open lines of communication and coordination
between CELLYNX and DOLLARDEX to develop the business plan and budget and its
deployment in order to maximize sales and sales opportunities in the
Territory.
3.17 Reference to
Sale. Notwithstanding anything to the contrary, any all
references in this Agreement to “sale” of the Products are subject to CELLYNX’s
standard terms and conditions.
ARTICLE
IV
RECORDS
AND REPORTS.
4.1 Reports. Commencing
with the calendar quarter in which DOLLARDEX commences distribution, and within
forty five (45) days after the end of each calendar quarter thereafter,
DOLLARDEX will provide CELLYNX with a written report that includes:
(i) DOLLARDEX’s net sales and shipments of each CELLYNX Product for that
calendar quarter, by dollar volume and number of units, both in the aggregate
and for such categories as CELLYNX may designate from time to time;
(ii) DOLLARDEX’s current inventory levels of the Products, both in the
aggregate and by CELLYNX Product; and (iii) any other information
reasonably requested by CELLYNX pertaining to this Agreement. DOLLARDEX’s report
will comply in form and substance with CELLYNX’s reporting requirements, as
they are reasonably determined by CELLYNX and communicated to DOLLARDEX from
time to time.
4.2 Audited Financials.
DOLLARDEX shall provide CELLYNX with (a) annual audited financial statements to
be audited by a recognized international auditing firm prepared in accordance
with U.S. GAAP and procedures to be delivered to CELLYNX no later
than 90 days after the end of its fiscal year, and (b) quarterly unaudited
financial statement to be reviewed by its auditors and prepared in accordance
with the same standard under which auditors are required to review Quarterly
Reports on Form 10-Q as filed with the U.S. Securities and Exchange Commission
and to be delivered to CELLYNX no later than 45 days of the end of each quarter
period.
4.3 Business Plan Progress
Reports. DOLLARDEX shall provide CELLYNX with a report on the
progress and status of the implementation of the business plan as described
under Section 3.16. The report should include detailed description of
the steps taken and progress made to develop the distribution and marketing
goals. The report shall be submitted to CELLYNX no later than 45 days
of the end of each quarter period.
4.4 Notification. DOLLARDEX
will promptly notify CELLYNX of any: (i) claim or proceeding involving the
Products; or (ii) claimed or suspected CELLYNX defective
Product.
4.5 Records. During
the term of this Agreement and for a period of three (3) years after any
termination or expiration thereof, DOLLARDEX will maintain complete and accurate
books, records and accounts relating to the distribution of the Products, and
will permit CELLYNX’s authorized representatives to examine them on reasonable
prior notice.
ARTICLE
V
COMPENSATION
5.
1 Funding. As
consideration for the licenses granted by CELLYNX to DOLLARDEX herein DOLLARDEX
shall provide funding to CELLYNX as follows:
(i) One
Million U.S. Dollars ($1,000,000) is due and payable after the pilot production
run for the first commercial product is completed (the “Initial Roll Out”), which the
Parties expect to take place around November 2008;
(ii) Four
Million U.S. Dollars ($4,000,000) is due and payable ninety (90) days from
commencement of the Initial Roll Out ; and
(ii) Five
Million U.S. Dollars ($5,000,000) is due and payable one hundred and eighty
(180) days from the commencement of the Initial Roll Out.
5.2 Fee. Subject
to the terms and conditions of this Agreement, the Parties agree that DOLLARDEX
shall pay CELLYNX 50.1% of its Net Earnings on a quarterly
basis. Payment shall be paid in cash or immediately available funds
and made within 45 days following the end of each quarter.
ARTICLE
VI
TERM
AND TERMINATION
6.1 Termination upon
Breach. Either Party may terminate this Agreement, and all
rights granted and all of its obligations and liabilities hereunder, if the
other Party shall at any time materially breach this Agreement, upon written
notice of default to such breaching Party. If any breach is inadvertent and
reasonably curable, the breaching Party shall have a period of thirty (30)
calendar days from the date of notice of default and opportunity to cure (one
time only as to any default) such breaching Party's default; provided, however,
that any such cure by the breaching Party shall not preclude the non-breaching
Party from exercising any rights or remedies it may have hereunder by reason of
the breaching Party's default. Notwithstanding the right to cure as
provided in this section, CELLYNX may terminate this Agreement immediately upon
failure of the Company to pay the Compensation as provided under Article
5.
6.2 Other Termination
Rights. CELLYNX shall have the right to terminate this
Agreement forthwith by giving written notice of termination to
DOLLARDEX at any time, upon or after:
(a) the
involuntary filing by a third party or voluntary filing by DOLLARDEX of a
petition in bankruptcy or insolvency;
(b) any
adjudication that DOLLARDEX is bankrupt or insolvent;
(c) the
filing by DOLLARDEX of any legal action or document seeking reorganization,
readjustment or arrangement of DOLLARDEX’S business under any law relating to
bankruptcy or insolvency;
(d) the
appointment of a receiver for all or substantially all of the property of
DOLLARDEX;
(e) the
making by DOLLARDEX of any assignment for the benefit of creditors;
(f) the
institution of any proceedings for the liquidation or winding up of
DOLLARDEX’S business or for the termination of its corporate charter;
or
(g) the
attachment by or assignment to a third party of all or substantially all of the
assets of DOLLARDEX.
6.3 Change of Control of
DOLLARDEX. CELLYNX
shall have the right to terminate this Agreement upon the occurrence of a Change
of Control of DOLLARDEX during the term of this Agreement by providing written
notice of termination to DOLLARDEX within sixty (60) days following receipt of
written notice of the occurrence of such Change of Control. In the event that
CELLYNX does not terminate this Agreement under this Section 6.3, this Agreement
will be binding upon CELLYNX and any successor to DOLLARDEX in such Change of
Control. DOLLARDEX shall notify CELLYNX in advance of a proposed Change of
Control and, if CELLYNX approves of such Change of Control in writing or
notifies DOLLARDEX in writing that it does not intend to terminate this
Agreement within forty five (45) days after such notice from DOLLARDEX, then the
foregoing right of termination shall be deemed waived.
6.4 Mutual
Agreement. This Agreement may be terminated at any time by
mutual written agreement of the Parties.
6.5 Effect of
Termination. Upon the termination or expiration of this
Agreement: (i) each Party will promptly return to the other Party or
destroy all Confidential Information of the other Party in its possession or
control, and will provide the other Party with a certification, signed by one of
its officers, certifying the return or destruction of all such Confidential
Information; (ii) DOLLARDEX will cease using the Marks and promoting and
advertising the Products; and (iii) all licenses hereunder shall
terminate.
ARTICLE
VII
RIGHT
OF FIRST REFUSAL
7.1 Right of First
Refusal. DOLLARDEX hereby grants to CELLYNX an exclusive right
of first refusal throughout the term of this Agreement to purchase such interest
and rights of DOLLARDEX under similar terms and conditions under which DOLLARDEX
contemplates or considers such transaction. DOLLARDEX shall notify
CELLYNX in writing within no more than two (2) days after which it become aware
of or is considering the sale of such interest and rights. CELLYNX shall have
thirty (30) days to respond to such notice and no more than ninety (90) days
within which to exercise such right of first refusal.
7.2 Option to Purchase.
Effective December 31, 2011, and for the remainder term of this Agreement,
CELLYNX shall have the option to acquire DOLLARDEX; provided however, that in
the event of termination of this Agreement prior to December 31, 2011 pursuant
to Sections 6.1, 6.2, and 6.3 of this Agreement, this Section 7.2 shall become
effective at such time. Upon delivery by CELLYNX to DOLLARDEX of a
written notice (the “Purchase
Option Notice”), the Parties shall consult with each other in good faith
as to the appropriate fair purchase price (the “Purchase
Price”). If the parties determine the Purchase Price by mutual
consent within 21 days of the date of delivery of a Purchase Option Notice, the
value so determined shall be the Purchase Price. If the Parties fail
to determine the Purchase Price by mutual consent within 21 days of the Purchase
Option Notice then the following appraisal procedure shall be adopted. “Appraiser” shall mean a
person engaged in the business of appraising businesses who has at least ten
(10) years' experience in appraising business similar to DOLLARDEX.
(i) Each
Party shall within 30 days of the Purchase Option Notice, appoint an Appraiser
to determined the Purchase Price. If one Party appoints an Appraiser
within such 30 day period and the other Party fails to appoint an Appraiser
within such 30 day period, the sole Appraiser so appointed shall in good faith
determine the Purchase Price within 45 days of the Purchase Option Notice and
the value so determined shall be the Purchase Price.
(ii) If
each Party appoints an Appraiser within such 30 day period, such two Appraisers
shall each consult each other in good faith as to the Purchase Price. If the
Appraisers determine a Purchase Price by mutual consent within 45 days of the
Purchase Option Notice the value so determined shall be the Purchase
Price. If the Appraisers do not agree on the Purchase Price by mutual
consent but the difference in price between their appraisals does not exceed
10%, the value of the average of the 2 appraisals shall be the Purchase
Price.
(iii) If the
difference between the 2 appraisals is greater than 10% variance, the two
Appraisers shall within 55 days of the Purchase Option Notice appoint a third
appraiser. The third Appraiser shall in good faith make a determination of the
Purchase Price within 20 days of its appointment. As soon as the third appraiser
has delivered its appraisal (the “Third Appraisal”), such Third
Appraisal shall be compared with the appraisals given by the other two
Appraisers and the average of the two appraisals that are closest to each other
shall be the Purchase Price.
ARTICLE
VIII
CONFIDENTIALITY.
8.1 Definition. “Confidential Information”
means: (i) any non-public information of a Party, including, without
limitation, any information relating to a Party’s technology, techniques,
know-how, research, engineering, designs, finances, accounts, procurement
requirements, manufacturing, customer lists, business forecasts, marketing plans
and planned products and services, including without limitation the Technology;
and (ii) any other information of a Party that is disclosed in writing and
is conspicuously designated as “Confidential” at the time of disclosure or that
is disclosed orally, is identified as “Confidential” at the time of disclosure,
and is summarized in a writing sent by the disclosing Party to the receiving
party within thirty (30) days of any such disclosure.
8.2 Exclusions. The
obligations in Section 8.3 will not apply to the extent any information:
(i) is or becomes generally known to the public through no fault of or
breach of this Agreement by the receiving Party; (ii) was rightfully in the
receiving Party’s possession at the time of disclosure, without an obligation of
confidentiality; (iii) is independently developed by the receiving Party
without use of the disclosing Party’s Confidential Information; or (iv) is
rightfully obtained by the receiving Party from a third party without
restriction on use or disclosure.
8.3 Obligations. Each
party will not use the other Party’s Confidential Information, except as
necessary for the performance of this Agreement, and will not disclose such
Confidential Information to any third party, except to those of its employees
and subcontractors that need to know such Confidential Information for the
performance of this Agreement, provided that each such employee and
subcontractor is subject to a written agreement that includes binding use and
disclosure restrictions that are at least as protective as those set forth
herein. Each Party will use all reasonable efforts to maintain the
confidentiality of all of the other Party’s Confidential Information in its
possession or control, but in no event less than the efforts that it ordinarily
uses with respect to its own confidential information of similar nature and
importance. The foregoing obligations will not restrict either Party from
disclosing the other Party’s Confidential Information or the terms and
conditions of this Agreement: (i) pursuant to the order or requirement of a
court, administrative agency, or other governmental body, provided that the
Party required to make such a disclosure gives reasonable notice to the other
Party to enable it to contest such order or requirement; (ii) on a
confidential basis to its legal or professional financial advisors;
(iii) as required under applicable securities regulations; or (iv) on
a confidential basis to present or future providers of venture capital and/or
potential private investors in or acquirers of such Party. The
Parties understand this Agreement will be filed with the Securities and Exchange
Commission (the “SEC”) and available to the general public, subject to the
redaction of specified information to the extent permitted by the
SEC. The Parties agree the existence of this Agreement and
DOLLARDEX’s rights hereunder are not Confidential Information.
ARTICLE
IX
REPRESENTATIONS
AND WARRANTY
9.1 Authorization. Each
Party represents and warrants to the other that it has the legal right and power
to enter into this Agreement and to fully perform its obligations hereunder, and
that the performance of such obligations will not conflict with its charter
documents or any agreements, contracts, or other arrangements to which it is a
party.
9.2 Disclaimer. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION
AND EXTENDS NO WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING
WARRANTIES AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT.
9.3 Additional
Representations. DOLLARDEX further represents, warrants and
covenants that:
(a)
It is an
entity duly organized, validly existing and in good standing in the jurisdiction
of its formation, and has full authority to enter into this Agreement and to
perform its obligations hereunder and to make all authorizations and
representations specified hereunder and all necessary approvals of any board of
directors, shareholders, partners, and lenders have been obtained;
(b)
It shall
not permit any person or entity to use or gain access to the Technology except
as expressly authorized herein, and shall protect against unauthorized usage of
or access thereto and shall immediately notify CELLYNX in writing of any such
unauthorized access or use;
(c) It
shall take all reasonable steps to ensure that all of its Dealers, Customers,
employees, agents and independent contractors comply with this Agreement and do
not use the Products or Technology or cause the Products or Technology to be
used in a manner exceeding the License granted to the DOLLARDEX in this
Agreement or in a manner that was not intended by CELLYNX;
(d) It
shall be solely responsible for any warranties provided by it to its Dealer,
Customers, employees, agents or independent contractors with respect to the
Products or use thereof;
(e) It
shall not and shall not allow its Dealers, Customers, employees, agents or
independent contractors to use the Products and Technology in any manner that:
(1) infringes upon or violates any patent, copyright, trade secret, trademark,
or other Intellectual Property Right of CELLYNX or any third part; (2) violates
any contractual rights of CELLYNX or any third party (3) constitutes a
defamation, libel, invasion of privacy, or violation of any right of publicity
or other third-party right or is threatening, harassing, malicious, vulgar,
harmful or otherwise objectionable; or (4) violates any applicable
international, federal, state or local law, rule, legislation, regulation or
ordinance; and
(f) It shall not and
shall not allow its Dealers, Customers, employees, agents or independent
contractors to use the Products and Technology for any illegal, obscene,
offensive or immoral purpose.
9.4 Survival of
Obligations. The obligations set forth in this Section 9 shall
remain in effect after termination or expiration of this Agreement for a period
of ten (10) years.
ARTICLE
X
INDEMNITIES
10.1 CELLYNX
Indemnity. CELLYNX will defend or settle any lawsuit brought
against DOLLARDEX, and only DOLLARDEX, to the extent that it is based upon a
third-party claim that CELLYNX’s use of the Products or that the Technology, as
provided by CELLYNX to DOLLARDEX under this Agreement, infringes any United
States patent or any copyright or misappropriates any trade secret, and will pay
any costs and damages made in settlement or awarded against DOLLARDEX in final
judgment resulting
from any such claim, provided that DOLLARDEX: (i) gives CELLYNX prompt
notice of any such claim; (ii) gives CELLYNX sole control of the defense
and any related settlement of any such claim; and (iii) gives CELLYNX, at
CELLYNX’s expense, all reasonable information, assistance, cooperation and
authority in connection with the foregoing. CELLYNX will not be bound by any
settlement or compromise that DOLLARDEX enters into without CELLYNX’s express
prior consent.
10.2 Injunctions. If
DOLLARDEX’s or CELLYNX’s rights to use the Technology or the Products under the
terms of this Agreement are or are reasonably threatened to be, or in CELLYNX’s
opinion are likely to be, enjoined or fined by any government or regulatory
agency, then CELLYNX may, at its sole option and expense: (i) procure for
DOLLARDEX the right to continue to use and distribute such Products under the
terms of this Agreement; (ii) replace or modify such Products so that it is
non-infringing; or (iii) if options (i) and (ii) above cannot be
reasonably accomplished, then CELLYNX may terminate DOLLARDEX’s rights and
CELLYNX’s obligations hereunder with respect to such Prodcuts.
10.3 Indemnity
Exclusions. CELLYNX will have no obligation under Sections
10.1 or 10.2 for any claim of infringement or misappropriation to the extent
that it results from: (i) the combination, operation or use of the Products
or the Technology with or in equipment, products, or processes not provided by
CELLYNX; or (ii) modifications to a CELLYNX Product other than as otherwise
approved by CELLYNX. The foregoing clauses (i) and (ii) are referred
to collectively as “Indemnity
Exclusions”.
10.4 Limitation. THE
FOREGOING PROVISIONS OF THIS SECTION 10 SET FORTH CELLYNX’S SOLE AND
EXCLUSIVE LIABILITY AND DOLLARDEX’S SOLE AND EXCLUSIVE REMEDY FOR ANY CLAIMS OF
INFRINGEMENT OR MISAPPROPRIATION OF INTELLECTUAL PROPERTY RIGHTS OR PROPRIETARY
RIGHTS OF ANY KIND.
10.5 DOLLARDEX
Indemnity. DOLLARDEX will defend or settle, indemnify and hold
CELLYNX harmless from any liability, damages and expenses (including court costs
and reasonable attorneys’ fees) arising out of or resulting from any third-party
claim based on or otherwise attributable to: (i) DOLLARDEX’s negligence or
intentional conduct; (ii) any misrepresentations made by DOLLARDEX with
respect to CELLYNX or the Products; or (iii) an Indemnity
Exclusion.
ARTICLE
XI
LIABILITY
11.1 Limitation of
Liability. IN NO EVENT WILL EITHER PARTY, ITS DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, WHETHER BASED
UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR
OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS AGREEMENT. EACH PARTY REPRESENTS
AND WARRANTS TO THE OTHER PARTY THAT IN CARRYING OUT ITS OBLIGATIONS UNDER THIS
AGREEMENT IT WILL NOT KNOWINGLY VIOLATE OR INFRINGE THE VALID AND ENFORCEABLE
INTELLECTUAL PROPERTY RIGHTS, INCLUDING THOSE CONFERRED BY A VALID, ENFORCEABLE
U.S. OR FOREIGN PATENT, COPYRIGHT, TRADEMARK, OR TRADESECRET OF ANY THIRD PARTY,
NOR AID AND ABET THE OTHER PARTY IN ANY SUCH VIOLATION OR
INFRINGEMENT.
11.2 Total
Liability. CELLYNX’S TOTAL LIABILITY TO DOLLARDEX UNDER THIS
AGREEMENT, FROM ALL CAUSES OF ACTION AND UNDER ALL THEORIES OF LIABILITY, WILL
BE LIMITED TO FIVE HUNDRED THOUSAND DOLLARS ($500,000).
11.3 Basis of
Bargain. The parties expressly acknowledge and agree that
CELLYNX has set its prices and entered into this Agreement in reliance upon the
limitations of liability specified herein, which allocate the risk between
CELLYNX and DOLLARDEX and form an essential basis of the bargain between
the parties.
ARTICLE
XII
GENERAL
12.1 Assignment. DOLLARDEX may not assign or
transfer this Agreement, in whole or in part, by operation of law or otherwise,
without CELLYNX’s express prior consent. Any attempt to assign or transfer this
Agreement, without such consent, will be null and of no effect. Subject to the
foregoing, this Agreement will bind and inure to the benefit of each party’s
permitted successors and assigns.
12.2 Governing Law and
Jurisdiction. This Agreement will be governed by and construed
in accordance with the laws of the State of California, excluding its conflict
of laws principles. The parties disclaim application of the United Nations
Convention on Contracts for the International Sale of Goods. Any legal action or
proceeding arising under this Agreement will be brought exclusively in the
federal or state courts located in Los Angeles County, State of California and
the parties hereby irrevocably consent to the personal jurisdiction and venue
therein.
12.3 Compliance with
Law. DOLLARDEX will have and maintain all permits and licenses
required by any governmental unit or agency and will comply with all applicable
laws and regulations, including United States export laws, in performing this
Agreement and with respect to the Products.
12.4 Attorneys’
Fees. The prevailing party in any dispute between the parties
relating to this Agreement will be entitled to recover all attorneys’ fees,
costs and other expenses that it incurs in connection with such
dispute.
12.5 Nonexclusive Remedy. Except
as expressly set forth in this Agreement, the exercise by either party of any of
its remedies under this Agreement will be without prejudice to its other
remedies under this Agreement or otherwise.
12.6 Notices. All
notices and other communications required or permitted to be given under this
Agreement shall be in writing, and delivered via facsimile or email or the
postal service to the addresses and numbers designated below:
If to
CELLYNX:
CELLYNX,
INC.
Attention:
Daniel Ash, Chief Executive Officer
27795
Country Lane
Telephone:
(714) 478-1631
Facsimile:
(949) 496-0256
With Copy
To:
Richardson
& Patel LLP
Attention:
Michael Donahue, Esq.
10900
Wilshire Boulevards, Suite 500
Telephone:
(310) 208-1182
Facsimile:
(310) 208-1154
If to DOLLARDEX
:
DOLLARDEX,
CORP.
Attention:
Daniel S. Bland, President and Chief Executive Officer
5535
Peregrine Way
Telephone:
(360) 656-6395
Facsimile:
(408) 549-9903
12.7 Force
Majeure. Neither Party will be responsible for any failure or
delay in its performance under this Agreement (except for any payment
obligations) due to causes beyond its reasonable control, including, but not
limited to, labor disputes, strikes, lockouts, shortages of or inability to
obtain energy, raw materials or supplies, war, terrorism, riot, or acts of
God.
12.8 Relationship of the
Parties. The parties are independent contractors and this
Agreement will not establish any relationship of partnership, joint venture,
employment, franchise or agency between the Parties. Neither Party will have the
power to bind the other Party or to incur any obligations on its behalf, without
the other Party’s prior consent.
12.9 Waiver. The
failure by either Party to enforce any provision of this Agreement will not
constitute a waiver of future enforcement of that or any other
provision.
12.10 Severability. If
for any reason a court of competent jurisdiction finds any provision of this
Agreement invalid or unenforceable, that provision of the Agreement will be
enforced to the maximum extent permissible and the other provisions of this
Agreement will remain in full force and effect.
12.11 Equitable
Relief. DOLLARDEX acknowledges that any breach of its
obligations under this Agreement with respect to the proprietary rights,
Intellectual Property, or Confidential Information of CELLYNX will cause CELLYNX
irreparable injury and significant injury for which there are inadequate
remedies at law. Accordingly, CELLYNX will be entitled to obtain immediate
equitable relief to enjoin any such breach, in addition to all other rights and
remedies that it may have under this Agreement, at law or
otherwise.
12.12 Entire
Agreement. This Agreement, including all exhibits hereto,
constitutes the complete and exclusive understanding and agreement between the
Parties regarding its subject matter and supersedes all prior or contemporaneous
agreements or understandings, whether written or oral, relating to its subject
matter including without limitation the Prior Agreement which is hereby
terminated and superseded by this Agreement upon the Effective Date hereof. Any
waiver, modification or amendment of any provision of this Agreement will be
effective only if in writing and signed by duly authorized representatives of
each Party.
12.13 Counterparts. This
Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.
IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
duly authorized representatives as of the day and year first written
above.
CELLYNIX
INC.
By:
_______________________
Name:
Daniel Ash
Title:
Chief Executive Officer
DOLLARDEX
CORP.
By:______________________
Name:
Daniel S. Bland
Title:
Chief Executive Officer
EXHIBIT
A
MARKS: 5BARz™
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