LICENSE AGREEMENT

 

                                                                   Exhibit 10.28

 

                                LICENSE AGREEMENT

 

     THIS AGREEMENT by and between Richard C. Roos and Richard A. Hansen of

Benton City and Richland, WA, with their principal place of business located at

39323 W. Kelly Benton City WA, hereinafter referred to as "the Inventors", and

American Soil Technologies, Inc., having its main office at 1224 Montague

Street, Pacoima, CA 91331, hereinafter referred to as "the Licensee".

 

WHEREAS, Inventors have invented and manufacture unique polyacrylamide polymer

products called "Sircle Saver" and "Soil Saver" for use in the agriculture,

irrigation and water clarifying industries;

 

WHEREAS, Licensee is in the business of marketing and distributing products

related to those manufactured by Inventors;

 

WHEREAS, Inventors desire to grant and Licensee desires to acquire, exclusive

rights to market and distribute Inventors' certain polyacrylamide polymer

products for use in the agriculture, irrigation and water clarifying industries

called "Sircle Saver" and "Soil Saver", together with all modifications and

improvements thereto (hereinafter referred to as "the Invented Products,

Products or Invention"); ;

 

NOW, THEREFORE, in consideration of the mutual promises contained herein, the

parties hereto agree as follows:

 

                                   1. LICENSE

 

1.1 Grant

 

     Inventors hereby grant to Licensee, and Licensee hereby accepts from

Inventors, an exclusive license to market and distribute the Invention (the

"License"). The License includes an exclusive license under the Patent

Application and Patents relating to the Invention. The License includes the

right to grant sublicenses without approval of the Inventor, on any terms deemed

necessary or proper by Licensee, subject only the terms of this Agreement. The

scope of the License includes the United States of America and all foreign

countries ("Territory")and is not geographically limited.

 

     The Inventors may continue to directly market and sell Products to persons

and entities for the use and consumption of said customers and not for resale.

Inventors may also distribute Products through distributors identified in

Schedule A

<PAGE>

1.2 Term

 

     The term of the License shall commence on the date the License Agreement is

signed by all parties, and will continue for ten years, with one additional five

year extensions option, which may be exercised so long as the Licensee is not in

default hereunder, meets the quotas as set forth below and this Agreement has

not been terminated as herein provided.

 

1.3 Trademarks and Trade Names

 

     During the term of this Agreement, Inventors grant to Licensee a license to

reproduce trademarks and trade names, if any, of Inventors as necessary for the

sole purpose of allowing Licensee to fully promote and market the Products

pursuant to the terms of this Agreement. Any and all trademarks and trade names

associated with the Products created by the Licensee are and shall remain the

exclusive property of the Licensee. If, during the term of this Agreement, a

trademark registration is to take place in the Territory, all rights shall

belong to the Inventor, although Licensee shall bear the costs for such

registration. Whenever Licensee employs any trademark of Inventors to be used in

any form of printed material, Licensee shall place an asterisk immediately after

and slightly above the first use of the trademark referring to a footnote

reading "Trademark of Inventors." Licensee shall deliver to Inventors all

Licensee's promotion and advertising material for Inventors' review, prior to

such promotion or advertising utilizing any of Inventors' trademarks or trade

names. Licensee agrees not to use any promotion or advertising that Inventors

finds unsuitable in their reasonable discretion. Upon the termination of this

Agreement for any reason, Licensee shall thereupon be deemed to have assigned

all Trademarks associated with the Products to Inventors.

 

1.4 Authority

 

     Licensee is an independent legal entity, and the relationship between

Licensee and Inventors is entirely based on Licensee's purchasing and selling

Inventors' products for Licensee's own account. Licensee shall have no authority

whatsoever to bind or represent Inventors in any respect. Nothing contained

herein shall be deemed to create a partnership between the parties or the

relationship of principal and agent.

 

1.5 Manufacturing

 

     The manufacturing rights of Products are not transferred to the Licensee

and shall remain the exclusive right of the Inventors or their assigns. Licensee

may only market and sell Products manufactured by Inventors.

 

                                       2

<PAGE>

                             2. LICENSEE OBLIGATIONS

 

2.1 Marketing Efforts

 

     Licensee agrees to use its best efforts to promote the sale of the Products

in the Territory on the maximum possible scale by all usual and customary means

and to act loyally to Inventors in all matters involved in this Agreement. In

addition, Licensee agrees to:

 

     (a)   provide Inventors with all sales budgets on or before each March 31st

          during the term of this Agreement, outlining the quantities of

          Products to be sold/purchased during the next calendar year;

 

     (b)   Licensee shall control and direct the preparation and prosecution of

          all Patent Applications through Licensee's patent counsel and shall

          pay for costs and expenses of each Patent Application.

 

     (c)   Describe itself as a Licensee for Inventors in the Territory in all

          commercial documents relating to the Products;

 

     (d)   Inform Inventors immediately of any changes in Licensee's organization

          or method of doing business which might affect the performance of

          Licensee's duties hereunder; and

 

     (e)   Keep Inventors fully informed at all times of the market conditions,

          competitive products and prices, and other facts material to the

          marketing of the Products in the Territory.

 

     (f)   Provide Inventors with a report on a quarterly basis separately

          stating the numbers of Products sold.

 

2.2. Initial Patent Application

 

     Licensee shall promptly cause a patent application relating to the

Invention to be prepared and filed with the United States Patent and Trademark

Office ("Patent Applications"), and shall diligently prosecute the same. The

Patent Application shall be filed in the name of Richard C. Roos and Richard

Hansen as the inventors. Licensee shall control and direct the preparation and

prosecution of all Patent Applications through Licensee's patent counsel and

shall pay for the costs and expenses of each Patent Application. Inventor shall

fully and completely cooperate with Licensee in the preparation, filing and

prosecution of any Patent Application.

 

     Licensee's failure to successfully prosecute the initial patent application

within two years of the execution of this Agreement will be regarded as a

default hereunder, entitling Inventor to terminate this Agreement for default.

 

                                        3

<PAGE>

2.3. New Patent Applications

 

      Whenever it deems it necessary or proper to do so, Licensee shall be

entitled to cause a patent application relating to any new aspects or otherwise

unpatented aspects of the Invention to be prepared and filed with the United

States Patent and Trademark Office ("Patent Applications"). Each Patent

Application shall be filed in Inventor's name as the inventor. Licensee shall

control and direct the preparation and prosecution of all Patent Applications

through Licensee's patent counsel and shall pay for the costs and expenses of

each Patent Application. Inventor shall fully and completely cooperate with

Licensee in the preparation, filing and prosecution of any Patent Application.

This Section 2.3 shall also apply to any and all continuation,

continuation-in-part, divisional and reissue patent applications, which in whole

or in part or directly or indirectly, are based upon or claim any priority from

the Licensed Patents or any Patent Application. The decision to file any such

continuation, continuation-in-part, divisional or reissue patent application

shall rest solely with Licensee. If Licensee declines to file a continuation,

continuation-in-part, divisional and reissue patent applications, it shall be

treated as a declined application under Paragraph 2.5.

 

2.4. Improvements.

 

     Licensee may file with the United States Patent and Trademark Office

additional patent applications claiming any improvement, enhancement or

variation of the Invention. Licensee shall control and direct the preparation

and prosecution of such patent applications through Licensee's patent counsel

and shall pay for the costs and expenses of such patent applications. Inventor

shall cooperate with Licensee in the preparation, filing and prosecution of such

patent applications. Ownership of such patent applications and any patents

issuing therefrom shall be in the name of Inventor.

 

2.5. Foreign Patent Applications.

 

     Licensee may file in any foreign countries patent applications claiming the

Invention, including any improvements, enhancements or variations thereof.

Licensee shall control and direct the preparation and prosecution of such patent

applications through Licensee's patent counsel and shall pay for the costs and

expenses of such patent applications. Inventors shall cooperate with Licensee in

the preparation, filing and prosecution of such patent applications. Ownership

of such foreign patent applications and any foreign patents issuing therefrom

shall be in the name of Inventors but subject to this Agreement. The provisions

of this Section 2.5 apply to any existing foreign patent applications that may

have been made by Inventors prior to the date of this Agreement.

 

                                       4

<PAGE>

2.6. Declined Applications.

 

     If Licensee declines to file a patent application within the scope of

Section 2.3, 2.4, or 2.5 above within three (3) years of the date of this

Agreement, Inventors may do so at their cost and expense. In such event, any

patent issuing from the application declined by Licensee shall not be deemed a

Licensed Patent or included within the License. Licensee shall have no

obligation or responsibility with respect to such declined application or

declined patent.

 

2.7. Abandonment of Applications.

 

     Licensee may abandon or otherwise cease to prosecute or maintain any patent

application within the scope of Sections 2.3, 2.4, or 2.5. Prior to such

abandonment, Licensee shall give notice of its intent to abandon to Inventors

and Inventors may, at their cost and expense, assume control of and

responsibility for the patent application in question and continue to prosecute

and maintain such application. Any patent issuing from an application abandoned

by Licensee shall not be deemed a Licensed Patent or included within the

License, and Licensee shall have no right to market or sell products described

in said patent applications. Licensee shall have no obligation or responsibility

with respect to any such application abandoned by them.

 

2.8 Non-Competition

 

     During the term of this Agreement, Licensee shall not, directly or

indirectly, distribute in the Territory, Products purchased from any person or

entity other than Inventors. In addition, the Licensee shall not, directly or

indirectly, market, sell, manufacture or distribute in the Territory, products

which compete with the Products under this Agreement, unless otherwise agreed by

the parties hereto. This provision is not to be interpreted in a way that would

prevent Licensee from distributing in the Territory those polyacrylamide polymer

products applied in granular or liquid form.

 

2.9 Prohibited Practices

 

     Licensee agrees not to pledge, in any manner, the credit of Inventors nor

to receive any money on behalf of Inventors nor to make any contracts or

commitments on behalf of Inventors nor to make any warranties or other

representations regarding the Products other than those authorized by Inventors

in writing.

 

2.10 Insurance

 

         Licensee covenants and agrees to provide, at its expense, during the

term of this Agreement a comprehensive general liability insurance policy

("liability policy"), including, without limitation, blanket contractual

liability coverage, broad form property damage, independent contractor's

 

                                        5

<PAGE>

coverage, completed operations, products liability and personal injury coverage

of not less than One Million Dollars ($1,000,000.00) per person and One Million

Dollars ($1,000,000.00) per occurrence for bodily or personal injury (including

death) and property damage, protecting Inventor, its agents, and Licensee

against any liability whatsoever occasioned by any occurrence arising from the

marketing, sale and use of the Invention.

 

     Said liability policy shall name Inventor as an additional insured, and

shall provide primary coverage in the event Inventor provides any additional

liability policy of its own. Said liability policy is to be written by a good

and solvent insurance company licensed to do business in the State of Washington

and that is satisfactory to Inventor, and must contain endorsements requiring

written notice to Inventor thirty (30) days prior to any cancellation or

reduction in the amount of coverage. A copy of said liability policy will be

provided to Inventor immediately upon its execution.

 

     The parties each agree that, to the extent of payments made or received

under such or other policies of insurance, they hereby waive claims of

subrogation against the other, if allowable by insurance carrier without voiding

coverage.

 

     Licensee's failure to provide and keep in force the aforementioned

insurance policies will be regarded as a default hereunder, entitling Inventor

to exercise any and all of the remedies provided in this Agreement for default.

 

                              3. SALES AND SUPPORT

 

3.1 Licensee Prices

 

     Inventors shall establish the prices to be charged to Licensee for each

Product (the "Licensee Costs"). The current Licensee Costs are set forth in

Schedule "B" attached hereto. Inventors shall have the right, in their sole

discretion, to increase or decrease the Licensee Costs upon one month's written

notice to Licensee if based upon an increase of fixed or overhead cost as

provided herein. Inventors may increase Licensee Costs in amounts equal to

increases in costs of labor, materials, transportation and insurance. In

addition, Licensee Costs may be increased by the amount of actual increases of

overhead expenses up to a maximum of the CPI Index percentage change for all

costs as published by the United States Department of Labor (CPI-U, US City

Average, All Items) during the period passing since the last overhead cost

increase. All Licensee Cost increases must be supported by the appropriate

documents as requested by the Licensee. Cost increases or decreases will not

affect orders already accepted by Inventors.

 

                                       6

<PAGE>

3.2 Licensee Orders

 

     Licensee shall place written orders with Inventors on or before the 15th of

any calendar month, covering quantities to be delivered during the next three

month's period. The quantity ordered