EXHIBIT 10.1
AMENDED AND RESTATED LICENSE AGREEMENT
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This
Amended and Restated License Agreement (this "AGREEMENT") is entered
into effective
as of January 1, 2007 by and between Electric Aquagenics
Unlimited, Inc,
a Delaware
corporation
(a/k/a EAU
Technologies,
Inc., and
hereinafter referred to as "LICENSOR" or "EAU") and Zerorez
Franchising Systems,
Inc., a Nevada corporation (f/k/a H20 AquaCare Franchising Systems, Inc., and
hereinafter referred
to as "LICENSEE" or "ZEROREZ"), and amends, restates and
supersedes any and all prior oral and/or written agreements between
Licensor and
Licensee pertaining to
the subject matter hereof. Licensor and Licensee may be
referred to herein
sometimes as the
"PARTIES,"
collectively and the
"PARTY,"
individually.
R E C I T A L S
A.
WHEREAS, Licensor is engaged in the design, development,
manufacture and
sale of patented and proprietary primacide commercial generators
(the "PRIMACIDE
GENERATORS") that
produce both an alkaline water that can be used for
cleaning
purposes ("PRIMACIDE B
FLUID") and a
hypochlorous acid
fluid that can be used
for disinfecting
purposes ("PRIMACIDE A FLUID"), for use in various industries,
including the carpet and living surface cleaning industry;
B.
WHEREAS, Licensee
provides carpet and living surface cleaning services,
through its company-owned locations and through franchised
outlets (referred to
herein as "ZEROREZ
FRANCHISEES")
throughout
the United States and Canada
("FRANCHISE Services");
C
WHEREAS, pursuant to a "Uniform Offering Circular" and "Franchise
Agreement" that each Zerorez Franchisee executes (collectively the "FRANCHISE
AGREEMENTS"), Zerorez
licenses to each Zerorez Franchisee the use of
Zerorez's
trademarks and technology and the use of trademarks and technology
licensed from
EAU (the "ZEROREZ
PROPRIETARY
TECHNOLOGY") to allow the Zerorez Franchisees to
provide the Franchise Services to their customers;
D.
WHEREAS, the Parties
have entered into various agreements (referred to
herein collectively as
the "ORIGINAL
AGREEMENTS") whereby
Licensor granted to
Licensee a license to
allow Zerorez
and the Zerorez Franchisees to acquire
Primacide Generators
from Licensor and to
use the Primacide B Fluid solely for
use in the Franchise Services (collectively, the "ORIGINAL
LICENSE");
E.
WHEREAS, in order to assure a supply of Primacide Generators and
Primacide B Fluid, Zerorez desires to commit to acquire all of its
requirements,
and to require Zerorez
Franchisees
to acquire all their requirements, for
Primacide Generators and Primacide B Fluids from Licensor,
and Licensor
desires
to commit to supply to Zerorez and Zerorez Franchisees all of their
requirements
for such Primacide Generators and Primacide B Fluids on the terms
and conditions
set forth in this Agreement and the Equipment Purchase
Agreement;
F.
WHEREAS, this Agreement shall supersede, amend, restate and replace the
Original Agreements and the license and rights granted hereunder
(the "LICENSE")
shall supersede, amend, restate and replace the Original License;
and
G.
WHEREAS, in connection
with the License
granted hereby,
Licensor and
Licensee have agreed to enter into "Technology License Agreements," and escrow
agreements with ZFA, Inc., a California non profit corporation
("ZFA") comprised
of Zerorez Franchisees
and established to protect the rights
and interests of
the Zerorez
Franchisees in the
event Licensor and/or
Licensee for any
reason
fails to, or cannot, supply the Primacide Generators, the Primacide
B Fluid, the
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Zerorez Proprietary Technology, or the EAU Technology to the
Zerorez Franchisees
(collectively referred to herein as the "TECHNOLOGY LICENSE
AGREEMENTS");
NOW,
THEREFORE,
in consideration of
the mutual promises
contained herein
and for other good and valuable consideration described herein, the receipt
and
adequacy of which are hereby acknowledged, the parties agree as
follows:
SECTION I
DEFINITIONS
1.1
"AGREEMENT"
means
this Agreement and all exhibits, schedules,
certificates, lists,
documentation and
financial records,
attached hereto or
made a part hereof, including any addenda or amendments
thereto.
1.2
"CIP SYSTEM" means a
clean-in-place
cleaning system in a commercial
building or facility
which uses a Primacide
Generator to create Primacide B
Fluid or Primacide A Fluid to be used exclusively on or within the building or
facility where such fluids are being produced.
1.3
"EAU TECHNOLOGY" means patent, trademark, trade secret, copyright,
mask
work and other
intellectual property
rights, other than trademark or
service
mark rights, owned by Licensor, or licensed by Licensor with the
right to grant
sublicenses thereof
and/or to utilize such rights related to Licensor's
Primacide Generators and Primacide B Fluid in providing Franchise
Services.
1.4
"EQUIPMENT PURCHASE AGREEMENT" shall mean the Master Equipment
Purchase
Agreement in the form of Exhibit "A", attached hereto and
incorporated herein by
reference, pursuant to which EAU agrees to sell to and Zerorez
Franchisees (with
respect to franchised
outlets) and Zerorez (with respect to company-owned
locations) agree to
purchase from EAU the Primacide Generators for use in
providing the Franchise Services.
1.5
"FRANCHISE"
shall mean the franchise rights granted to a Zerorez
Franchisee by Licensee.
1.6
"FRANCHISE AGREEMENTS" shall mean, collectively, the Zerorez Franchise
Offering Circular and Franchise Agreements that outline and
describe all of the
terms and conditions
between and among
Zerorez as franchisor
and the Zerorez
Franchisees as franchisees.
1.7
"FRANCHISE SERVICES"
shall mean and be limited to the use of Primacide
B Fluid in conjunction with the Zerorez Proprietary Technology in the cleaning
of carpets, furniture
and rugs as described
and contemplated as within U.S.
Department of Labor, Occupational Safety & Health
Administration, SIC
Code 7217
Carpet &
Upholstery Cleaning,
and U.S. Census Bureau 2002 NAICS Definition
561740 Carpet & Upholstery Cleaning Services; the cleaning of stone,
hardwood,
concrete, tile, walls, linoleum and other flooring and countertop
materials; and
the cleaning of upholstery and soft fabric textiles. The term
Franchise Services
specifically excludes Restoration Services (as hereinafter
defined), except to
the extent
any such services are incidental to any of the above described
cleaning services. The
Franchise Services may be offered by Zerorez and Zerorez
Franchisees to residential and commercial customers throughout the
United States
and Canada, excluding
commercial facilities with a CIP System, including, but
not limited to, commercial buildings and facilities such as
airports, hospitals,
food or beverage processing facilities, grocery stores, department
stores, etc.
1.8
"IMPROVEMENTS"
means
improvements,
modifications,
adaptations,
revisions,
enhancements,
additions, or changes
to any of the EAU
Technology
which is the
subject of the License granted to Zerorez pursuant to this
Agreement or to ZFA pursuant to the Technology License
Agreements.
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1.9
"LICENSE" means the
license and rights granted to Licensee by Licensor
under this Agreement
to purchase and use,
and to have the Zerorez Franchisees
purchase and use, the
Primacide Generators,
the Primacide B Fluid
and the EAU
Technology applicable
to such Primacide
Generators
and Primacide B Fluid
for
Franchise Services in
the United States and
in Canada during the
Term of this
Agreement.
1.10
"PRIMACIDE
GENERATORS"
means equipment or generators
that produce
Primacide B Fluid
and Primacide A Fluid using EAU Technology. The term
"Primacide
Generators" does
not include, and specifically excludes, all
Primacide C Generators developed or owned by Licensor.
1.11
"PATENTS" shall mean any and all
patents related to the Primacide
Generators and the carpet cleaning system owned by Licensor
applicable to the
Franchise Services.
Specifically,
"Patents" includes,
but is not limited
to,
Licensor's Patent
Number 6,638,364.
The term "Patents"
does not include,
and
specifically excludes, all patents related to Primacide C
Generators.
1.12
"RESTORATION SERVICES" shall mean, but not be limited to, the
cleaning
and remediation of both residential and commercial buildings or
facilities after
a man-made or natural disaster, including, but not limited to,
water removal and
dehumidification,
fire, smoke
and soot remediation and restoration, mold
mitigation and
remediation,
removal
and replacement of damaged building
materials, cleaning of
all surfaces affected by such types of disasters, all of
which would be typically performed by licensed contractors.
1.13
"TECHNOLOGY LICENSE
AGREEMENTS" shall mean
those Technology
License
Agreements between and
among Licensee,
Licensor and ZFA for the benefit of the
Zerorez Franchisees described in Recital G hereinabove.
1.14
"TERM" shall mean the License term described in this Agreement,
including any mutually agreeable extensions or renewals
thereof.
1.15
"ZEROREZ FRANCHISEE" shall mean any existing or future owner of a
Zerorez Franchise
under a Franchise
Agreement or any person or entity
whose
Franchise Agreement
was terminated
for any reason,
other than as a result
of
default by the
Franchisee, but who
continues to use a Primacide Generator,
Primacide B Fluid or any EAU Technology. The term "Zerorez Franchisee" shall
include (except for purposes of Section 8.2 of this Agreement)
business entities
affiliated with Zerorez which provide Franchise Services, whose
primary business
is carpet cleaning
in the United
States or Canada
using Zerorez's name and
working specifically within the scope of the Zerorez Franchise
business model.
1.16
"ZEROREZ PROPRIETARY TECHNOLOGY" means patent, trademark, trade
secret, copyright,
mask work and other intellectual property rights, other than
trademark or service
mark rights, owned by
Zerorez or licensed by Zerorez with
the right to grant sublicenses thereof and/or to utilize such
rights to provide
the Zerorez
goods and services to Zerorez Franchisees, such as cleaning
techniques, designs
and specifications for cleaning equipment, trucks and
supplies, operating
manuals, methods of operation, lists of third party
suppliers and other business plans and procedures.
SECTION II
LICENSE GRANTED
2.1
GRANT OF LICENSE. During the Term of this Agreement, and any
extensions
and renewals thereof,
Licensor hereby grants to Licensee, subject to the terms
and conditions of this
Agreement,
the right to purchase
and use, and to allow
the Zerorez Franchisees to purchase and use, Primacide Generators and Primacide
B Fluid, and to use the EAU Technology for providing Franchise Services in the
United States and Canada. Each Primacide Generator covered by this Agreement
shall be used by Zerorez or a Zerorez Franchisee only as part of a
truck mounted
cleaning system or in
a stationary
location for the purpose of generating
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Primacide B Fluid to perform and complete the Franchise Services. Primacide
Generators shall not
be used by Zerorez or
Zerorez Franchisees in any other
manner or for any other purpose. Any Improvements, whether designed or invented
by Licensor, Licensee or any Zerorez Franchisee, shall belong to
Licensor during
and after the Term of this Agreement but will immediately be deemed
to be a part
of the EAU Technology
licensed pursuant to this Agreement and/or the Technology
License
Agreements.
Licensee shall
execute, and shall require Zerorez
Franchisees to execute, such documents or instruments
necessary and appropriate
to transfer, convey and assign to Licensor all rights, title and
interest in and
to any such Improvements.
2.2
LICENSOR'S
TRADEMARKS.
During the Term of this Agreement, and any
extensions and renewals thereof, Licensor hereby grants to
Licensee, subject
to
the terms and
conditions
of this Agreement, the right to use, and to allow
Zerorez Franchisees to
use, those trademarks,
service marks and/or
patents of
Licensor as
are set forth on Schedule 2.2 attached hereto ("LICENSOR
TRADEMARKS"). Licensee
shall affix on all
such trademarks,
service marks and
patents such
registration
designations
listed on Schedule 2.2
and such other
reasonable marks as Licensor shall from time to time request,
by written notice
to Licensee,
to clearly indicate such marks or patents are owned and/or
registered by Licensor.
2.3
USE RESTRICTIONS. The
License granted to Licensee under this Agreement
or to ZFA under the
Technology License
Agreement does not
include or grant to
Licensee or to any Zerorez Franchisee the following:
(a) The right to sell Primacide A Fluid;
(b) The right to sell
Primacide B Fluid except incidental to the
performance of Franchise Services;
(c) The right to use any equipment or generator, other than
Licensor's
Primacide Generator, to produce Primacide B Fluid; or
(d) The right to sell,
transfer, loan, lease
or sub-lease Licensor's
Primacide Generators
to any third party without Licensor's prior written
consent.
2.4
EXCLUSIVITY.
The License
granted under this Agreement shall be an
exclusive license
during the term hereof
for businesses
providing Franchise
Services, but whose primary business is carpet cleaning in the
United States and
Canada. Licensor will
not, during the term hereof, grant to others the right to
use Primacide
Generators,
Primacide B Fluid or
EAU Technology
in the United
States or Canada
involving Franchise
Services, provided Licensee is not in
default of any
material term of this Agreement or the Equipment Purchase
Agreement. Licensor
reserves all rights in
and to the EAU
Technology and all
uses thereof, including the right to grant others all uses thereof,
not licensed
to Licensee
under this Agreement or to ZFA under the Technology License
Agreements, specifically including, but not limited to, the
following:
(a) The use of Primacide Generators, Primacide B Fluid or Primacide
A
Fluid in CIP Systems worldwide to clean carpet and living surfaces
in commercial
buildings or facilities including, but not limited to, commercial facilities
such as airports,
hospitals, food or
beverage processing
facilities,
grocery
stores and department
stores, which
facilities house CIP Systems and which CIP
Systems in such
facilities do not include the Zerorez carpet and living surface
cleaning system,
i.e., a wand that
disburses the Primacide B Fluid and vacuums
the same in a single process as employed by Zerorez and the Zerorez
Franchisees.
(b) The use of Primacide Generators, Primacide B Fluid or Primacide
A
Fluid for Restoration
Services worldwide, including carpet cleaning that is
incidental to such Restoration Services.
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2.5
REQUIREMENTS OBLIGATION. Licensee shall purchase and shall
require the
Zerorez Franchisees
to purchase all of their respective requirements for
Primacide Generators
from Licensor during the Term hereof pursuant to the terms
and conditions
of the Equipment Purchase Agreement. Zerorez, and Zerorez
Franchisees pursuant to the terms of the Franchise Agreements,
shall be required
to use only
the Primacide Generators to perform the Franchise Services.
Notwithstanding the
foregoing,
Zerorez and the
Zerorez Franchisees
shall be
entitled to
purchase Primacide Generators and Primacide B Fluid from ZFA,
Licensee and/or
their permitted contractors upon Licensor's breach of its
obligations to supply Primacide Generators required by Zerorez Franchisees
for
any reason, as set forth in the Technology License Agreements between ZFA and
Licensor and in Section 2.6 below.
2.6
MANUFACTURING AND SALE RIGHTS OF LICENSEE. In the event Licensor
and/or
its successors and assigns cease operations, or otherwise
discontinues supplying
Primacide Generators and/or Primacide B Fluid to Licensee or
Zerorez Franchisees
for any reason other
than a default or breach of this Agreement by Licensee,
Licensee shal
