Exclusive License And Distribution Agreement

Exhibit 10.2

EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT

THIS EXCLUSIVE LICENSE AND DISTRIBUTION AGREEMENT (the " Agreement" ) is made as of the 3rd day of August, 2006, by and between REDUCT NV (further called " Company" ), a company organised and existing under the laws of Belgium with registered office at Satenrozen la, Box 2 , 2550 Kontich, Belgium, and GEOSPAT1AL MAPPING SYSTEMS, INC ., a company incorporated under the laws of the state of Delaware, with registered office at 229 Howes Run Road, Sarver, Pennsylvania, USA 160 55 (further called " Geospatial" ), the Company and Geospatial agree as follows:

1. Definitions

1.1." Affiliate" means an entity controlled by, controlling or under common control with the identified Party. 1.2." Company Products" or " Products" means the standardized Pipeline Mapping Systems, as more particularly set forth in Schedule 1 hereof.

1.3." Distribution Rights" means the rights granted by the Company to Geospatial in Section 2.4 of this Agreement. 1.4." End User" means a person or entity that acquires a Company Product from Geospatial. 1.5." License Rights" means the rights granted by the Company to Geospatial in Sections 2.1-2.4 of this Agreement. 1.6." Company Patents" (within Territory) means United States patent No. 10/536,006, and any continuation, continuation-in-part, divisional, substitution, extension, registration, confirmation, reissue, reexamination, renewal or like filing of the foregoing patent, and any Canadian or Mexican patents or patent applications that are counterparts to the foregoing patent, and any subsequent patent or patent application in the United States, Australia, Canada or Mexico for an improvement relating to any such inventions.

1.7." Marks" means the trade names, logos, trademarks, and service marks set forth on Schedule 1.7 hereto. 1.8." Party" means, depending on the context, Company or Geospatial, and " Parties" means the two entities collectively. 1.9." Pipeline Mapping System" means all current and future standardized Pipeline Mapping Systems. The main components of a standard Pipeline Mapping System are an Orientation Measurement Unit and Reduction data transfer software and X-Traction data processing software pre-installed on a portable device as listed in Schedule 1 .


Page 1 of 30 1.10." System Accessories" means accessories and spare parts produced by the Company as listed in Schedule 1 , as amended from time to time upon mutual agreement.

1.11." Territory" means North America, South America, and Australia.

1.12." Transfer" means a sale, license, lease or other form of distribution or transfer. 1.13." Intercompany Sales" (IS): includes all cash payments made for Company Products, maintenance fees and accessories and commisioned R&D. Intercompany Sales excludes operational consulting fees, Exclusivity fees taxes, (export) charges, duties, and travel and accommodation reimbursements.,

2. Grant of Licenses and Distribution Rights

2.1. The Company pursuant to this Agreement, and subject to the other conditions and restrictions set forth herein (including without limitation Sections 3 and 24), the Company hereby grants to Geospatial, a non- transferable exclusivity throughout the Territory to:

2.1.1. promote, market, use, display and distribute the Company Products;

2.1.2. use and provide services using Company Products

2.1.3. use the Marks.

2.2. Geospatial may request Reduct to develop additions, adaptations, variations or modifications to the Company Products. The Company retains the right to refuse such request but may grant Geospatial, in writing, permission to have one or more identified third parties develop the specifically requested additions, adaptations, variations or modifications. The Company can decide to standardize customized Company Products.

2.3. From time to time, Company may review its Company Products portfolio, but Company will use reasonable efforts to supply or support transition to new-generation Company Products.

2.4. The Company hereby appoints Geospatial as its exclusive distributor of the Company Products in the Territory. Geospatial agrees that it will not, at any time during the term of this Agreement, promote, distribute or sell any other product in the Territory which is sold in competition with any of the Company Products and/or Company Patents. Geospatial agrees that it shall not complement distributors' or sub-distributors' existing tools with the Company Products or technology to promote, distribute or sell a product in the Territory which is sold in competition with any of the Company Products or Company Patents. Geospatial may, with written approval of the Company, appoint one or more sub-distributors for the Territory, as it deems appropriate. Geospatial acknowledges it is solely responsible for the conduct and actions of the sub-distributor, and will assure at all times that the sub-distributor operates in accordance with this Agreement


Page 2 of 30 2.5. Geospatial acknowledges and agrees that it is an independent distributor, and not an agent of the Company, and that Geospatial is assuming all risks associated with and related to its obligations arising out of this Agreement. Geospatial' s compensation will be the difference between the price to be paid to the Company and the price Geospatial will charge for the Products, such price to be determined solely by Geospatial. This compensation is a material and substantial inducement to Geospatial to enter into the Agreement.

3. Exclusivity

3.1. Notwithstanding anything in Section 2 of this Agreement to the contrary, the License Rights and Distribution Rights shall be exclusive within the Territory on the condition that, and only for so long as: (i) Geospatial pays the Exclusivity fees as defined in Schedule 3.1 timely, and (ii) Geospatial achieves at least 70% of its Intercompany Sales as defined in Schedule 3.1 hereof; and (iii) the Company is not otherwise entitled to terminate the License Rights or Distribution Rights pursuant to this Agreement; and (iv) all other payments are received on time.

3.2.

On January 15 th of each year, starting in 2007, a base Exclusivity fee of ? 100.000 ( One hundred thousand Euro) is due. At the latest on December 31 st , starting in 2007, the performance based Exclusivity fee settlement conform Schedule 3.1 is due. For 2006, the payment and settlement of the Exclusivity fees is due at the latest on December 31 st , 2006.


3.3.

In addition to the annual Exclusivity fee described in article 3.2, Geospatial will pay an additional fee of ? 500.000 ( Five hundred thousand Euro), on January 15 th , 2007 and an additional fee of ? 500.000 ( Five hundred thousand Euro) on January 15 th , 2008. Either or both payments are waved in case Geospatial has a majority ownership in Company the moment the payment becomes due.

3.4. Nothing in this Agreement shall cause Company to be found in breach on account of Products Transferred within the Territory prior to the date hereof; provided, however, that: (a) the Company shall not appoint Distributors other than Geospatial in the Territory for the Company Products, and the Company shall not allow Distributors, nor Geospatial to distribute outside their respective territories for the respective Company Products, and the Company shall transmit to Geospatial any orders or inquiries that it may receive with respect to orders within the Territory for the Company Products, and in case of future distribution of Company Products within the Territory by third parties other than End Users, both Parties will agree on a course of action to restrict or limit such distribution; (b) Company has accurately and comprehensively disclosed all contracts or pending Transfers as required in Section 3.3 hereof; and (c) the Company terminates its existing Canadian distributorship agreement within 10 days of the date hereof, and terminates any other agreements or contracts disclosed pursuant to Section 3.3 hereof as soon as is reasonably practicable and permitted under those agreements or contracts without penalty to Company.


Page 3 of 30 3.5. Company sets forth in Schedule 3.3 hereof all agreements and pending agreements (those in the course of negotiation, not yet concluded and which Company either is obligated or otherwise intends to conclude notwithstanding this Agreement) that relate to the Transfer of Products within the Territory, and indicates whether and to what extent Company possesses the right under each agreement to prevent the further use or Transfer of Products within the Territory.

4. Distributorship Duties

4.1. Promotion. Marketing and Sales . Geospatial will engage in advertising, sales promotion activities and sales in the Territory, in which the Products will be designated by their correct Company name and identified as the Products of the Company being marketed by Geospatial as an independent distributor for the Company; and Geospatial will maintain a qualified sales and distribution organisation which will call on such customers and potential customers in the Territory as may reasonably be likely to purchase the Products. Geospatial shall comply with the Intercompany Sales agreed upon as set forth in Schedule 3.1. hereof. 4.2. Support and Service . Geospatial will maintain a staff of trained technicians and a stock of spare parts as supplied by the Company and recommended in the appropriate technical service manual to support the installation, repair and maintenance of the Products. Additionally, technical literature adequate to provide technical support and service to Geospatial' s customers must be maintained. Geospatial will use its best efforts to respond to and complete all service calls from owners of the Products in the Territory in a prompt and workmanlike manner.

4.3. Training . Unless otherwise agreed by the Company, all of Geospatial' s technicians who will be servicing the Products must be trained in classes as required and made available by the Company covering the theory of operation, repair and maintenance of the Products. The total costs other than the course fees for Geospatial' s technicians to attend such classes shall be borne by Geospatial.

4.4. Places of Business . Geospatial will establish, staff, equip and maintain such place or places of business in such location or locations in the Territory as it reasonably deems necessary to provide satisfactory customer service and support and marketing coverage in the Territory.

4.5. General Conduct . Geospatial shall at all times conduct its business in such a manner as will reflect favorably on the Company and the Products and will not engage in any deceptive, misleading, illegal or unethical business practice.


Page 4 of 30 4.6. Reports . Geospatial will prepare and deliver to the Company each month a report containing rolling 12 month forecasts, unit and value sales, and inventory levels as defined in Schedule 5.

4.7. Compliance with Labeling and Regulations . Geospatial agrees to store and handle all Products according to their labeling. In distributing and selling the Products, and making claims for the Products, Geospatial shall comply with all applicable laws and regulations, and shall make only such claims for the Products as are contained in the labeling and other materials supplied by the Company. 4.8. Returns . If any Products are returned to Geospatial by its customers, Geospatial shall promptly inform the Company and hold such Products separate from its inventory until the disposition of such Products is agreed by the Company and Geospatial. Geospatial shall in no event return such Products to its customers nor repackage, relabel or resell them in any manner whatsoever. The Company shall cooperate promptly with Geospatial to ensure that such Products are disposed of or otherwise dealt with in accordance with all applicable laws and regulations. Returns will not be reimbursed except for defective products when accompanied by the appropriate complaint form in accordance with Section 10, below.

5. Orders and Shipments

5.1. Orders . Geospatial shall e-mail and fax all orders to the Company or its designated liaison at e-mail sales@reduct.net and fax number +32 35 41 77 31 or such other e-mail address(es) and fax number(s) as the Company may designate hereafter by written notice to Geospatial.

5.2. Delivery Schedule for Company Products . As soon as practicable after receipt of a written order, the Company will notify Geospatial in writing whether Geospatial' s order for Products is accepted or rejected and, if accepted, of the date or dates on which delivery is expected be made. The Company will use its best efforts to fill all orders placed by Geospatial on the delivery dates specified. However, the Company shall not be responsible for any loss or liability suffered by Geospatial as a result of delay in delivery of any order.

5.3. Shipment . Delivery will be EXW (Incoterms) Company. All deliveries hereunder will be made in the Company' s standard shipping packages. Geospatial is responsible for all customs, duties and all other formalities defined by EXW (Incoterms) from the Company' s bonded warehouse to the desired destination.

5.4.

Acceptance . Geospatial shall inspect all goods promptly upon receipt thereof and may reject any goods which fail in any significant respect to meet the Company' s acceptance specifications prevailing on the date of delivery. Goods not rejected by written notification to the Company within fourteen (14) calendar days of receipt shall be deemed to have been accepted. Rejected goods shall be returned freight prepaid to the Company within ten (10) calendar days of rejection. As promptly as possible but not


Page 5 of 30

later than thirty (30) calendar days after receipt by the Company of properly rejected goods, the Company shall, at its option and expense, either repair or replace properly rejected goods. The Company will prepay transportation charges back to Geospatial and shall reimburse Geospatial for any costs of transportation incurred by Geospatial in connection with the return to the Company of properly rejected goods.

6. Prices and Payments; Retention of Title; Cessation of Shipments When Past Due

6.1. Prices and Payments . The prices to be paid to the Company by Geospatial for the Company Products are initially those set forth in Schedule 6.1. However, the Company shall be entitled to change any and all of such prices at any time or times by giving at least ninety (90) U.S. business days' advance written notice of the new price(s) to Geospatial. The prices applicable to the Company Products in any shipment shall be those in effect on the date when the order for them was received by the Company in accordance with Paragraph 6 above. All prices are EXW (Incoterms) Company. The Company shall invoice Geospatial for each shipment when the order is made, and Geospatial shall pay the Company 50% of the amount to be invoiced upon order and 50% in advance of shipment via bank transfer. All payment will be made to: Beneficiary: Reduct NV Bank: KBC Bank Address:

Trade Mart, Atomiumsquare 120

1080 Brussel, Belgium Account nr: 735-0030244-65 IBAN: BE18 7350 0302 4465 BIC: KREDBEBB Us Corresponding Bank: KBC Bank, New York Account nr: 026008248 BIC: KREDUS33

6.2. Retention of Title. Until the Company receives the purchase price fully in cash, the Company retains the legal property in the Products. 6.3. Late Payment. The Company shall not be obliged to accept or fill any orders from Geospatial during any period when any amount due from Geospatial is past due.

6.4 Taxes . Subject to Section 6.3, Geospatial shall bear all applicable federal, state, municipal and other government taxes (such as sales, use or similar taxes), all customs duties, imposts, and similar charges, and all personal property taxes assessable on the Products after delivery.

7. Other Parts and Services

7.1. Spares, Accessories, Supplies and Maintenance Tools . During the term of this Agreement, the Company will sell to Geospatial such spares, accessories, supplies and maintenance tools relating to the Products as Geospatial may order for delivery at prices that are mutually agreed by the Parties. All such orders shall be subject to acceptance and assignment of delivery dates in accordance with Section 5 and 6.


Page 6 of 30 7.2. Service Instruction. The Company agrees, upon the written request of Geospatial, to have a reasonable amount of training provided by the Company or authorized manufacturers or any other authorized party appointed by the Company to Geospatial to enable Geospatial' s technicians to carry out the service functions, as specified in Section 5.4. Upon request by Geospatial, Company shall provide the aforementioned training at a facility designated by Geospatial, provided that Geospatial reimburse Company for reasonable travel and lodging expenses incurred in connection therewith. 8. Trademarks, Processes and Intellectual Property

The Company shall, at its own expense (or that of its Affiliates), pay for such trademark and trade name registrations in the Territory as are determined in the sole discretion of the Company to be necessary to allow Geospatial to distribute the Products there. All such trademarks and trade names shall be filed on behalf of and in the name of the Company (or its Affiliates), and shall be owned exclusively by the Company (or its Affiliates), subject only to the grant of License Rights in this Agreement. Geospatial agrees that it will not procure either directly or indirectly the registration of any trademark or trade name used by the Company or its Affiliates anywhere in the world without the written consent of the Company. Geospatial recognises the validity of, and the Company' s and its Affiliates' rights to use, the trademarks, trade names, labels, cartons, processes, formulations, methods and patents (collectively referred to as " trademarks, processes and intellectual property" ) utilised by the Company in connection with the Products, and agrees that Geospatial will not do or cause to be done, directly or indirectly, anything which might adversely affect the trademarks, processes and intellectual property or the ownership of them. Upon the termination of the License Rights pursuant to this Agreement, Geospatial will retain no rights in any REDUCT and REDUCT related trademarks, processes, methods, know-how or other intellectual properties.

9. Product Registrations and Permits; Transfer

9.1. The Company shall obtain, in the Company' s name, and at the Company' s own expense and at no cost to Geospatial, any and all new registrations necessary or proper for distribution of the Products in the Territory.

9.2. Geospatial shall obtain and maintain, in its own name, and at its own expense and at no cost to the Company, any and all other licenses, permits and governmental approvals which may be necessary or proper for the importation and delivery to Geospatial, and resale by Geospatial of the Products in the Territory.

9.3. Upon the Company' s request after the termination of this Agreement, Geospatial shall promptly transfer to the Company or the latter' s designee all such licenses, permits and governmental approvals standing then in Geospatial' s name which may legally be transferred to the Company or the latter' s designee, and which are necessary or proper for the importation into and resale of the Products in the Territory.


Page 7 of 30 10. Complaints

Within ten (10) days, or such shorter period as may be required by law, after Geospatial learns of any complaint about any of the Products, involving a real or possible product defect or adverse reaction, Geospatial shall make a full written report concerning the complaint to the Company and shall cooperate fully with the Company and any government agencies concerned in investigating and resolving the complaint. In addition to making such full written report to the Company, Geospatial shall inform the Company of any complaint about any of the Products as soon as is practicable after Geospatial learns of the complaint.

11. Representations, Warranties and Covenants

11.1. Each Party represents and warrants that it has full right, power, and authority to enter into this Agreement and to perform its obligations and duties under this Agreement, and that the performance of such obligations and duties does not conflict with or result in a breach of any other agreements of such party or any judgment, order, or decree by which such party is bound. 11.2. The Company represents, warrants and covenants that:

11.2.1. The Company will not Transfer, assist any third party to Transfer, or otherwise make available for use in the Territory any Product or Mark to a party other than Geospatial or, through Geospatial or at its direction, to an End-User.

11.2.2. The Company will include or require inclusion in all sales, license, distribution or similar agreements under which Products are made available to a party other than Geospatial or, through Geospatial or at its direction, an End-User (a) a requirement that such Products not be used, not be permitted for use and not be resold or Transferred for use in the Territory; and (b) a provision stating that any warranty associated with the Products shall become immediately, automatically and entirely void ...