Int'l Bus. Devel., Marketing And Sales Agreement

Exhibit 10.9
Confidential Treatment
Omissions Noted by (*).
Omissions in accordance with Rule 406 of the Securities Act of 1933. Omitted portions have been filed with the Securities and Exchange Commission.


INTERNATIONAL BUSINESS DEVELOPMENT, MARKETING AND SALES AGREEMENT


THIS AGREEMENT (this "Agreement") is made and entered into as of April 7, 2000, by and between EXPRESS SUCCESS INTERNATIONAL, LLC., a Nevada limited liability company ("Express"), and AMERICAN TECHNOLOGIES GROUP, INC., a Nevada corporation ("ATG").


R E C I T A L S:


WHEREAS, ATG desires to develop demand for and sell the Products described on Exhibit A, as may be amended from time to time, worldwide and desires the assistance of Express it its efforts; and


WHEREAS, Express possesses unique skills and adequate resources to assistance ATG in its product development and marketing efforts;


NOW, THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, ATG and Express hereby agree as follows:


1. RELATIONSHIP.


1.1 Appointment.


(a) Upon the terms, and subject to the terms and conditions, contained herein, ATG hereby appoints Express as a Special Worldwide Distributor of the Products, subject to the limitations contained in Exhibit 1.1. The rights granted hereunder shall be exclusive as to certain countries or marketing areas upon the agreement of ATG as to certain volume and other requirements as may be included in Exhibit 1.1 from time-to-time. Exhibit 1.1 also contains those territories wherein ATG has previously granted exclusive rights and Express shall not market the Products in such territories. ATG has and will continue to grant to other parties the non-exclusive right to market the Products in other parts of the world where Express is not granted exclusive marketing rights.


(b) If ATG objects to any sales of Products by or through Express ("Objected Sales") , ATG shall give Express written notice ("Objection Notice") which shall reasonably identify the Objected Sales and specify each purchaser and state the basis of the objection, consistent with this Agreement. If Express believes that such identified sales are not inconsistent with the provisions of the Agreement, then ATG and Express shall endeavor to resolve such disagreement. If ATG gives Express an


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Exhibit 10.9
Confidential Treatment
Omissions Noted by (*).
Omissions in accordance with Rule 406 of the Securities Act of 1933. Omitted portions have been filed with the Securities and Exchange Commission.


Objection Notice, and Express thereafter ceases to sell Products to purchasers specified in the Objection Notice, then the Objected Sales identified in the Objection Notice shall not be a Express's default under this Agreement.


(c) ATG shall not sell Products to identified potential customers or existing customers of Express. If Express objects to sales by ATG, Express shall give ATG written notice of such objection. The notice shall reasonably identify the sales to which Express objects, specify each purchaser and the reason for the objection. If ATG believes that such identified sales are not inconsistent with the provisions of the Agreement, then ATG and Express shall endeavor to resolve such disagreement. If Express gives ATG such a notice and ATG thereafter ceases to sell Products to purchasers specified in the notice, then the sales identified in the notice shall not be a ATG's default under this Agreement.


1.2 Acceptance of Appointment. Express hereby accepts appointment as provided in Section 1.1 above, and hereby agrees fully and faithfully to perform and discharge all of its duties, obligations and responsibilities as set forth in this Agreement. Express hereby acknowledges the proprietary and intellectual property rights of ATG in the Products.


1.3 Competing Products. During the term of this Agreement, Express, its officers, directors, shareholders, employees, agents or representatives (collectively, "Agents"), and any entity in which Express or any of its Agents has a direct or indirect controlling ownership interest, shall not, directly or indirectly, promote, sell or distribute products which are directly competitive with the Products.


1.4 Independent Contractor. The relationship of ATG and Express established by this Agreement is that of independent contractors, and nothing contained in this Agreement shall be construed to (a) give either party hereto the power to direct and control the day-to-day activities of the other, or (b) constitute the parties as partners, joint venturers, co-owners or otherwise as participants in a joint or common undertaking. Neither party hereto nor any of its Agents is the representative of the other party for any purpose except as expressly set forth in this Agreement, and has no power or authority as agent, employee or in any other capacity to represent, act for, bind, or otherwise create or assume an obligation on behalf of the other for any purpose whatsoever. All financial obligations associated with Express's business are the sole responsibility of Express. All sales and other agreements between Express and its customers are


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Exhibit 10.9
Confidential Treatment
Omissions Noted by (*).
Omissions in accordance with Rule 406 of the Securities Act of 1933. Omitted portions have been filed with the Securities and Exchange Commission.


Express's exclusive responsibility and shall have no effect on Express's obligations under this agreement.


1.5 Product Development. From time to time Express may recommend certain Products or modifications to existing Products and ATG shall work with Express in developing same into viable commercial Products to the extent that ATG believes such recommendations are viable. Further at the sole cost of Express, Express may "private label" the Products with or without ATG labels. The use of ATG labels must comply with the provisions of 8.4 and 8.5, as applicable. No representations regarding the Products shall be made in any private label or branded marketing materials, packaging etc. without the prior written approval of ATG, which approval shall not be unreasonably withheld.


1.6 Promotional Duties.


(a) Express shall (i) exert its best efforts consistent with sound business planning and projected profitability and sales potential to introduce and diligently advertise, promote, sell, distribute, and service (collectively, "Marketing") the Products, (ii) make use of, and disseminate to its existing customers, and to potential purchasers, all promotional materials, if any, supplied by ATG, and (iii) cooperate with ATG in activities directed toward the Marketing of the Products. At ATG's request, Express shall make immediately available to ATG copies of all print and electronic Marketing materials used by it for the Products.


(b) ATG will provide reasonable quantities of its combustion enhancement products for promotional use and evaluation purposes at no cost to Express. The use of such samples for testing will be at the discretion and direction of ATG.


(c) Express shall at all times demonstrate and otherwise represent the Products fairly in comparison with competitive products from other manufacturers, shall make no false or misleading representations with regard to the Products or ATG, and shall not make any representations with respect to the specifications, features or capabilities of the Products which are not consistent with those described in the Product literature or other material supplied by ATG.


(d) ATG shall assist Express in its efforts by making available reasonable quantities of such marketing materials as ATG has developed and jointly developing such marketing materials as Express may recommend.


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Exhibit 10.9
Confidential Treatment
Omissions Noted by (*).
Omissions in accordance with Rule 406 of the Securities Act of 1933. Omitted portions have been filed with the Securities and Exchange Commission.


1.7 Technical Support. ATG shall provide Express with such technical support regarding the Products as is reasonably necessary for Express to assist ATG under this Agreement, including but not limited to copies of all applicable Product test results.


1.8 Reporting Obligations of Express. Express shall provide to ATG, no later than the fifteenth (15th) day of each month, as to the following calendar month, Express's sales projection reports setting forth the projected sales of each Product, as well as such other information that ATG may reasonably request from time to time. Express may from time to time give ATG notice of accounts acquired by Express and the notice shall be deemed accurate unless ATG gives Express notice otherwise within seven (7) days of Express's notice to ATG.


1.9 Stock Options. Subject to the approval of the Board of Directors of ATG, the parties shall enter into a stock option agreement in the form of Exhibit 1.9 which provides for the granting of stock options which vest upon the achievement of certain sales requirements.


2. PURCHASE OF PRODUCTS


2.1 Ordering Procedure. Purchase of the Products shall be made by Express by means of purchase orders submitted to ATG. Each such purchase order shall specify, inter alia, the number of units of each Product ordered by Express, the desired date and location of delivery.


2.2 Purchase Order Form. Each purchase order for the Products shall be submitted on the purchase order form attached hereto as Exhibit 2.2. No additional or conflicting terms or conditions may be proposed by Express in or in connection with any purchase order, and no such additional or conflicting terms or conditions shall be binding upon ATG without its prior written consent.


2.3 Production, Supply and Delivery of Products. During the term of this Agreement or thereafter, ATG reserves the right, without obligation or liability to Express, to manufacture, produce, warehouse or source the Products at any worldwide location, including locations outside of the United States of America. The Products ordered by Express shall be delivered F.O.B. place of manufacturing. ATG further reserves the right, in its sole discretion with one hundred and eighty (180) days prior notice to Express, to discontinue the production of any Product. If ATG discontinues production of any products for any reason or


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Exhibit 10.9
Confidential Treatment
Omissions Noted by (*).
Omissions in accordance with Rule 406 of the Securities Act of 1933. Omitted portions have been filed with the Securities and Exchange Commission.


any action is taken under Section 2.3(c), Express has the right to acquire the necessary manufacturing rights and resources to manufacture the products on such terms as the parties may reasonably determine in order to guarantee supply of the products to Express and its customers under a "private label" only.


If (a) Express properly orders Products but is unable to receive the full amount of its order due solely to the failure of ATG to supply such Products; (b) ATG's failure is due to discontinuance of such Products; or (c) such discontinuance is not due to ATG's transfer of any of its Confidential Information (as hereinafter defined), ATG's Patents (as hereinafter defined), or other intellectual property rights relating to the Products owned or controlled by ATG to another person or entity, then ATG's failure to supply Products to Express shall not constitute a breach of this Agreement.


2.4 Title and Risk of Loss. Title to the Products and all risk of loss shall pass from ATG to Express at the time and place of ATG's delivery of the Products to a common carrier for delivery to Express in accordance with the delivery terms prescribed in each purchase order, notwithstanding that ATG may retain rights of possession or repossession to ensure collection of the purchase price thereof. Express shall be solely responsible for insuring the Products after delivery to a common carrier for delivery to Express. Express shall designate the common carrier used for transportation of the Products. ATG shall not be responsible for any delay caused by the carrier.


2.5 Inspection and Rejection. Express shall have the obligation to inspect the Products delivered to it within fifteen (15) business days after Express receipt thereof from the local custom's agent at Express's designated delivery point ("Receipt"), and unless any claim is made within said fifteen (15) business day period, Express shall have conclusively deemed to have accepted in good and marketable condition all the Products delivered to it.


3. PRODUCT PRICES. The prices at which ATG shall supply Express with Products (the "Supply Price") shall be set forth in the Product price list which is set forth on Schedule 3 attached hereto. The Product price list is subject to change upon ninety (90) days notice. At no time shall the then applicable Supply Price be greater than the price at which the Products are sold to other customers for similar quantities and under similar conditions.


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Exhibit 10.9
Confidential Treatment
Omissions Noted by (*).
Omissions in accordance with Rule 406 of the Securities Act of 1933. Omitted portions have been filed with the Securities and Exchange Commission.


4. PAYMENT FOR PRODUCTS.


4.1 Payment Terms. Express shall place into effect an irrevocable letter of credit ("ILOC") in an amount sufficient to cover the purchase order, plus shipping costs (unless shipping has been prepaid by Express), from a bank and in a form acceptable to ATG. ATG may draw upon the ILOC to the extent of (i) 50% of the total purchase order, plus shipping if applicable, upon delivery of the Product so ordered to the common carrier designated by Express, (ii) 25% of the total purchase order upon Receipt of the Product by Express, and (iii) 25% ninety (90) days after Receipt of the Product. The ILOC shall be paid (i) upon delivery to ATG's bank of evidence of delivery to Express's selected carrier of the Product ordered and as to (ii) upon delivery to ATG's bank of evidence of receipt by Express of the Product order received by ATG from Express's selected carrier.


4.2 Invoices. ATG shall invoice Express for the purchase price of the Products upon ATG's delivery of such Products to a common carrier for shipment to Express.


4.3 Right to Discontinue Any Credit. If ATG at any time extends credit to Express, whether on open account, time draft, or otherwise, ATG may, if Express is in default of its credit arrangement and with 30 (thirty) days notice, discontinue such credit arrangement and require payment on the non-credit payment terms set forth in Section 4.1 hereof.


4.4 Late Payment. If Express fails to pay to ATG any amount when due, Express agrees to pay interest on the overdue balance at the rate of ten percent per annum or, if such rate exceeds the maximum rate permitted by the governing law of this Agreement, Express shall pay interest on such overdue balance at the maximum rate permitted by such law. Payments received from Express when any overdue balance exists shall be applied first against accrued interest. Express shall pay all collection charges and expenses, including but not limited to attorney's fees, incurred by ATG in connection with its payment of the purchase price for the Products or otherwise in connection with the enforcement of this Agreement.


5. REPRESENTATIONS AND WARRANTIES. Express represents and warrants to ATG that it: (a) has full and unrestricted authority to enter into this Agreement and, by executing, delivering or performing under this Agreement, it will not breach any agreement to which it is currently a party; (b) has the legal right, free of any right or interest of any third party, to perform its obligations hereunder; and (c) currently is in material compliance with all applicable Laws and has received all applicable product safety certifications and registrations from appropriate governmental entities necessary to perform its obligations under


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Exhibit 10.9
Confidential Treatment
Omissions Noted by (*).
Omissions in accordance with Rule 406 of the Securities Act of 1933. Omitted portions have been filed with the Securities and Exchange Commission.


this Agreement. ATG represents and warrants to Express that, except as disclosed in its filings with the Securities and Exchange Commission, it: (a) has full and unrestricted authority to enter into this Agreement and, by executing, delivering or performing under this Agreement, it will not breach any agreement to which it is currently a party; (b) has the legal right, free of any right or interest of any third party, to perform its obligations hereunder; (c) currently is in material compliance with all applicable Laws and has received all applicable product safety certifications and registrations from appropriate governmental entities necessary to perform its obligations under this Agreement, and, (d) has legal ownership of the Products, free and clear of any right or interest of any third party whatsoever.


6. Confidential Information.


6.1 Definition. The Parties recognize that the relationship created by this Agreement may involve access by the parties to information of substantial value to each other, including, but not limited to, designs, drawings, plans, software, programs, material and manufacturing specifications, devices, trade secrets, applications, formulae, know-how, methods, techniques, and processes (whether related to ATG's Patents (as such term is hereinafter defined), or otherwise), as well as financial, business, marketing and product development information, and customer lists including contact lists provided to ATG by Express relating to the Products (collectively, "Confidential Information"), provided that Confidential Information shall not include information:


(a) In the public domain or which subsequently falls into the public domain;


(b) Specifically intended by ATG for disclosure to customers of Express;


(c) Which the recipient can prove was known through a source independent of the disclosing party prior to any communication by the disclosing party; or


(a) Disclosed to the recipient in good faith by a third party having a legal right to do so.


6.2 Non-Disclosure. The Parties acknowledge and agree that they own all rights, title and interest in and to their Confidential Information. The Parties further agree that they shall (i) maintain the secrecy and confidentiality of all


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Exhibit 10.9
Confidential Treatment
Omissions Noted by (*).
Omissions in accordance with Rule 406 of the Securities Act of 1933. Omitted portions have been filed with the Securities and Exchange Commission.


Confidential Information which comes to its attention, (ii) take all necessary precautions to prevent any disclosure of Confidential Information by any of its Agents, and (iii) during the term of this Agreement and for so long as Confidential Information does not enter into the public domain through no act or omission of Express, neither publish, disclose nor disseminate any part of such Confidential Information in any manner, or use the same, without the prior written consent of ATG.


6.3 Injunctive Relief. The Parties understand and agree that the Confidential Information has special value, the loss of which cannot be reasonably or adequately compensated in damages or in an action at law, and therefore, in the event of any breach or violation of the provisions of this Section 6 by any party to this agreement, the other party shall be entitled to equitable relief by way of injunction without bond and without the necessity of proving actual damages, in addition to, and not in limitation of, any other relief or rights to which they may be entitled. The terms and provisions of this Section 6 shall survive any termination or expiration of this Agreement. ...