Market And Product Development Agreement

EXHIBIT 10.39


MARKET AND PRODUCT DEVELOPMENT AGREEMENT


This Agreement, made as of the 22nd day of February, 2005 ("Effective Date") between and among Daleco Resources Corporation, a Nevada Corporation, having its principle place of business at 120 North Church Street, West Chester, PA 19380 (hereinafter "Daleco"); EEC North America LLC, a Pennsylvania Limited Liability Corporation, with offices at Abington Hall, Suite 300, 1777 Sentry Parkway West, Blue Bell, PA 19422, (hereinafter "EEC"); Organica Biotech, Inc., a Pennsylvania Corporation, with offices in 705 General Washington Avenue, Suite 500, Norristown, PA 19403 (hereinafter "Organica"); and Enviro/Sci Corporation, a Pennsylvania Corporation, having its address at P.O. Box 2063, Southeastern, PA 19399-2063 (hereinafter "ESC") (hereinafter, Daleco, EEC, Organica and ESC are sometimes collectively referred to as the "Parties") ; sets forth the mutual understandings and covenants of the Parties.


RECITALS


WHEREAS, DALECO has successfully created products for the various environmental markets to include but not limited to water and wastewater treatment applications; and


WHEREAS, EEC is an industry leader in wastewater package plants using proprietary high speed biological treatment systems; and


WHEREAS, ORGANICA has developed advanced bioengineering products to provide improved waste degradation in sewage treatment by controlling the type and functionality of bacteria; and


WHEREAS, ESC has demonstrated extensive knowledge and experience in the environmental field, including but not limited to, the water and wastewater industries (hereinafter the "Relevant Market"); and


WHEREAS, the Parties desire to develop products and services designed to meet the needs of the Relevant Market; and


WHEREAS, the Parties believe that the best way to meet said needs is through an integrated approach involving strategic alliances; and


WHEREAS, the Parties believe that a strategic alliance whereby their skills and experience were combined ("Bundled Approach") would satisfy this approach:


NOW THEREFORE, in consideration of the mutual covenants and promises herein set forth, the Parties do agree as follows.


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ARTICLE I--CONCEPT OF COLLABORATION


PRODUCTS AND SERVICES


The Parties will share their intellectual property with each other pursuant to their existing non-disclosure agreements, all of which are hereby extended until February 21, 2010 in order to review their existing products and services to determine whether the needs of the Relevant Market are being met. This will involve defining the needs of the Relevant Market, the products and services being offered, in general, and how an Bundled Approach would benefit the customers in the Relevant Market. To the extent that new products or services need to be developed and the Parties agree to do so, the Party who develops the new product or service will own all intellectual property so developed, with each of the non-developing Parties having a license to use such intellectual property as part of the Bundled Approach. To the extent that the Parties specifically agree to develop products or services jointly, they will define at the outset, in writing, how the intellectual property will be owned. The Parties further agree that any product or service developed, either separately or jointly, which results from the Parties' interaction shall be made available to all Parties without undue restrictive fees and /or covenants


MARKET DEVELOPMENT


The Parties agree that they have existing customers and contracts and nothing herein shall give any Party the right to contact a customer of another Party, unless permission is first granted, in writing, by the other Party. Any Party may identify new opportunities for its existing customers, and said Party will be considered to be the lead marketer for that customer, unless the Parties agree otherwise. For such existing customers, each of the Parties shall be granted the right to participate in the pursuit of the customer; however, each Party will also be granted the right to decline to join in said pursuit by notifying the other Parties in writing of its election not to participate in the pursuit. Likewise, new opportunities may be identified by any of the Parties. In that case, the Parties will designate the Party who should take the lead in marketing the products and services of the Parties to these new opportunities. Again, all Parties shall have the right to join in the pursuit of the new opportunities; Any Party may decline to join in the pursuit of the new opportunities so by notifying the other Parties in writing of its election. In the course of these marketing efforts, the Parties may identify new applications for their present or future products or services. In that case, the Parties will have the right to develop the m ...