[image_001.jpg]   Water Now [image_002.jpg]    Exclusive Sales Distribution
Agreement – Territory USA  

EXCLUSIVE SALES DISTRIBUTION AGREEMENT

 

 

 

 

 

Entered into and between

 

 

 

 

African Horizon Technologies (Pty) Ltd

Registration number: 2013/230512/07

(The Principle)

 

 

And

 

 

Water Now, Inc. (USA)

Registration number: 802389157

(The Sole Distributor)

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1.PARTIES

The parties to this Exclusive sales distribution Agreement are:

119 Roeline Street

Alphen Park

0081

Pretoria

 

1.2Water Now, Inc.

2840 Bryan Ave.

Fort Worth, TX 76104

 

 

2.APPOINTMENT & AGREEMENT

 

2.1Purpose of appointment and agreement: The parties intend to market and
distribute the technologies of African Horizon Technologies Pty Ltd (AHT),
specifically the Hydraspin Hydro Cyclone which is a Trade secret technology,
within the United States of America through the actions of Water Now, Inc., also
referred to herein as the “Distributor”. The Hydraspin technology Trade secret
will be protected by the Distributor. The Hydraspin technology removes oil from
water. The parties hereby agree to a long term mutual beneficial agreement,
wherein AHT will manufacture the Hydraspin solutions in South Africa and export
same to the USA. Hydraspin Pty Ltd is a company owned by JS Steyn and has formal
agreement with AHT whom is the Holding company of all the water treatment
technologies that AHT sells globally. Any agreement that is made with AHT also
applies to Hydraspin Pty Ltd. AHT and Hydraspin Pty Ltd. are at times
collectively referred to herein as the “Principal”

 

With effect from the commencement date, as determined in clause 3 hereunder, the
Principal hereby grants to the Distributor the exclusive right to purchase and
in turn commercialize the services and products identified in Annexure A hereto
(collectively the “Products”) in the United States of America.

 

 

 

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The Distributor shall acquire the sole sales & distributor rights for the
distribution of the Products within the territory defined as the entirety of the
United States of America for USD $500,000 and 500,000 shares of the common
stock, no par value, of the Distributor, with an additional 500,000 shares of
the Distributor’s common stock to be transferred to the Principal upon the
earlier of 24 months from commencement date of this agreement or the sale of 50
units to the Distributor. The initial 500,000 shares will be transferred to the
Principal within 14 days of signature of the agreement. Any shares or common
stock issued to and held by the Principal may not be sold, transferred or
otherwise encumbered for a period of twelve (12) months from date of issuance.

 

The Distributor further agrees to pay the Principal a royalty of 2% of total net
profits generated by Distributor from sale of oil generated by Products acquired
by Distributor during the term of this Agreement. Net profit is defined as the
gross income generated from the oil recovered by and sold within the USA less
the costs associated with the generation of the gross revenue.

 

 

3.PERIOD OF AGREEMENT

The appointment of the Distributor by the Principal in terms of this agreement
shall commence on date of signature (“commencement date”), and shall thereafter
endure for a period of 5 years, sixty (60) months, whereupon it shall
automatically renew for 5 years unless terminated earlier in accordance with its
terms or extended by mutual agreement of the parties. Any renewal or extension
of this agreement will require negotiations at least one (1) month prior to the
expiry date of this agreement.

 

4.Quotas

It is agreed that a minimum of 12-15 Product units will be ordered during the
twelve (12) month period following the commencement date, with a minimum of 15
units every year following during the term of this Agreement. Should the orders
exceed 2 Product units per month a 60-90 day early notice will be given to
ensure the manufacturing process can be enhanced to meet the demand. There is no
limit to the manufacturing capacity of the Principal as long as suitable notice
is given for an order exceeding 2 Product units per month.

 

5.RIGHTS AND OBLIGATIONS OF THE PRINCIPAL

The Principal undertakes:

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5.1to grant to the Distributor the right, at its own cost and expense, to have
its employees or designees perform continual inspections of the Products
purchased by the Distributor and to conduct periodic quality control testing of
same for a period of 12 months following delivery so as to ensure proper
performance of the purchased Products. All deficiencies noted in the initial and
any subsequent inspections of the Products shall be immediately brought to the
attention of the Principal, with the Principal to immediately exercise a good
faith effort to remedy all defects in a commercially reasonable fashion. The
Distributor shall have the right to reject Products upon initial inspection and
at any time during the 12 months following delivery of same should a post
installation defect arise. If the Principal fails to cure any defect or provide
a replacement machine within 30 days of notice of a defect, the Principal shall
immediately refund the purchase price of the defective Product to the
Distributor within five business days of demand therefor by the Distributor;

5.2to provide the Products as requested and purchased by the Distributor;

5.3to facilitate timely and efficient delivery of the Products; and

5.4to maintain, at all times, the highest degree of good faith towards the
Distributor and to ensure that no conflict of interest materializes, and in the
event of a conflict of interest arising, to immediately advise the Distributor
of same, upon which the Principal shall consult with the Distributor to find the
best solution for all.

 

6.RIGHTS AND OBLIGATIONS OF THE DISTRIBUTORS

The Distributor undertakes:

6.1to devote the necessary time and attention to introducing capable clients
requiring the Products, and not to engage in any business or activity that will
prevent or hinder the Principal from providing the Products;

6.2to maintain, at all times, the highest degree of good faith towards the
Principal and to ensure that no conflict of interest materializes, and in the
event of a conflict of in arising, to immediately advise the Principal of same,
upon which advice in the Principal shall consult with the Distributor to find
the best solution for all;

6.3to assist the Principal with the rendering of the Products in accordance with
the deliverables and timeframes as set out in Annexure A hereto as may amended
by written agreement of the parties from time to time;

6.4to respect and observe all applicable laws and the rules of any applicable
professional regulatory body;

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6.5to provide the Principal with any information, documentation and reports
reasonably requested by the Principal in connection with the prospective clients
requiring the Products;

6.6to appoint sales agents to assist in achieving super growth; and

6.7to have freight costs from factory in Johannesburg/Pretoria to Distributor
designated locations in the USA be USA. Inco terms of EXW – Ex works
Johannesburg

 

7.FINANCIAL PROVISIONS

7.1During the term of this agreement and in consideration for the Products
provided by the Principal, the Distributor will pay the Principal as follows

7.1.1The Distributor will tender payment of 100% of the cost of the Products
ordered at time of order or alternatively 50% at time of order followed by 50%
upon completion and availability for shipment.

7.2It is recorded that the payment to the Principal as provided herein is not
inclusive of Value Added Tax (VAT).

7.3The remuneration payable in terms of this clause shall be payable into such
bank account provided by the Principal Accounts may include:

(a)       Bank Accounts of AHT Pty Ltd – Nedbank, account nr 1697 091 598,
Branch Menlyn Maine, Branch Code 198765;

(b)       Bank Account of Hydraspin Pty Ltd – Nedbank; account nr 1077 172 745
Branch Menlyn Maine; Branch Code 198765.

 

 

 

8.STATUS OF PARTIES

It is recorded that, notwithstanding any provision to the contrary in this
agreement shall not be construed as creating a partnership or a contract of
employment between the Principal and the Distributor, and the Distributor will
not be, or deemed to be, an authorized party of the Principal or hold itself out
as having authority of power to bind the Principal in any way.

 

9.ALLOWANCE OF AUTHORITY

The Distributor shall at all times strictly execute their tasks, duties and
obligations in terms of this agreement in accordance with instructions given by
the Principal through any representative of the Principal being duly authorized
thereto.

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10.BREACH OF CONTRACT

Should a party hereto commit any breach of any term or condition of this
agreement and fail to remedy such breach within 7 (seven) days of receipt of a
notice from the Principal non-breaching party to rectify such breach, the
non-breaching party shall without prejudice to any other rights which it may
have, be entitled to immediately cancel this agreement. If the breach is by the
Principal prior to the expiration or the first anniversary of this agreement,
the Principal shall return to Distributor all shares of the Distributor’s
commons shares held by it or its transferees.

 

11.CONFIDENTIALITY

11.1The Distributor acknowledges that it may, in the course of the performance
of this agreement, gain access to and become acquainted with the techniques,
methods and processes, trace secrets, data information technology, software,
business associates, clients and other private, sensitive and confidential
information (“Confidential Information”) of the Principal.

11.2The Distributor accordingly undertakes, for the duration of the agreement as
well as after the termination thereof, not to directly or indirectly, utilize,
disclose or make public to any third party any Confidential Information of the
Principal and to keep any Confidential information secret an confidential at all
times, unless disclosure takes place in the ordinary course of the rendering of
the products in terms of the agreement. The Distributor shall protect the trade
secret of the Hydraspin process and technology.

11.3The Confidential Information shall not include:

11.3.1information which was known to the Distributor prior to its receipt from
the Principal;

11.3.2information which is or lawfully becomes generally available to the
public;

11.3.3information which is lawfully acquired from third parties who have a right
to disclose such information;

11.3.4information which by mutual agreement is released from confidential
status; and

11.3.5information which is required to disclosed in response to a valid order of
court or other governmental agency or if disclosure is otherwise required by
law, and the Distributor will provide the Principal with the

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prompt written notice if such disclosure is required, and shall limit the
disclosure to the minimum necessary to comply with the law.

 

12.MISCELLANEOUS

12.1The Distributor shall not, without the prior written approval of the
Principal assign, cede delegate transfer or otherwise dispose of any right or
obligation under this agreement to any other person.

12.2No provision of this agreement (including, without limitation, the
provisions of the clause) may be amended, substituted or otherwise varied, and
no provision may be added to or incorporated in this agreement, except (in any
such case) by an agreement in writing signed by the duly authorized
representatives of the parties,

12.3Any relaxation, indulgence or delay (collectively referred to as
“Indulgence”) by either party in exercising, or any failure by either party to
exercise, any right under the agreement shall not be construed as a waiver of
that right and shall not affect the ability of that party subsequently to
exercise that right or to pursue any remedy, nor shall any indulgence constitute
a waiver of any other right (whether against that party or any other person).

12.4The waiver of any right under this agreement shall be binding on the waiving
party only to the extent that the waiver has been reduced to writing and signed
by the duly authorized representative(s) of the waiving party.

12.5This agreement supersedes all prior agreements, representations,
communications, negotiations and understandings between the parties concerning
the subject matter of this agreement.

12.6Whenever possible each provision of this agreement shall be interpreted in a
manner which makes it effective and valid under applicable law but if any
provision of this agreement is held to be illegal invalid or unenforceable under
applicable law that illegality, invalidity, or unenforceability shall not affect
the other provisions of this agreement all of which shall remain in full force.

12.7This agreement may be executed in any number of identical counterparts, all
of which when taken together shall constitute one agreement. Any single
counterpart of a set of counterparts taken together which, in either case, are
executed by the parties shall constitute a full original of this agreement for
all purposes.

12.8All notices and any other communications whatsoever (including, without
limitation, any approval, consent, demand, query or request) by either party in

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12.8terms of this agreement or relating to it shall be given in writing, and
shall be sent by registered post, or delivered by and, or transmitted electronic
mail to the recipient party at its relevant address set out below.

12.9It is agreed that email will be the preferred method of communication. For
purpose of ordinary mail the following is recorded:

 

12.9.1if to the Principal at:

Address:119 Roeline Street,

Alphen Park,

0081, Pretoria

 

Postal Address:Postnet Suite 394

Private Bag X10

Elarduspark, 0047

Electronic mail address:jsteyn@ahtech.co.za

Marked for attention of:Jacques Steyn

 

12.9.2if to the Distributor at:

Address:2840 Bryon Avenue

Fort Worth, Texas 76104

 

Postal Address:xxxxxxx

Xxxxxxx

Xxxxxxx

Electronic mail address:David@waternowinc.com

Marked for attention of: David King

 

12.10Either party may by written notice to the other party, change any of the
addresses at which, or the designated person for whose attention those notices
or other communications are to be given.

12.11Any notice or other communication given by any party to the other party
which is transmitted by electronic mail to the addressee at the addressee’s
specified electronic mail address shall be presumed to have received by the
addressee on the date of transmission as reflected on the sender’s electronic
records.

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12.12The parties choose their respective physical addresses in clause 12.8 as
their respective domiciliary at which all documentation relating to any legal
proceedings to which they are a party may be served.

12.13The parties agree to perform, or procure the performance, of all father
things, and execute and deliver (or procure the execution and delivery) of all
further document, as may be required by law or as may be desirable or necessary
to implement or give effect to this agreement and the transactions contemplated
therein.

 

13.COSTS

Each party shall pay its own costs relating to and in connection with the
negotiation, preparation, drafting and signature of this agreement, and any
amendments thereto.

 

14.AMENDMENTS

Any changes or amendment to this agreement, including oral modifications
supported by new consideration must be reduced to writing and signed by all
Parties before it will be effective.

 

15.ARBITRATION

Any controversy or claim arising out of this agreement which is not settled
between the parties themselves, shall be settled by arbitration in accordance
with Republic of South Africa Rules of arbitration.

 

16.FORCE AND EFFECT OF DOCUMENTS

The parties hereto agree that an Adobe Echo sign copy of this Agreement shall
have force and effect as the original of this document.

 

 

 

For and on behalf of African Horizon Technologies by: Jacques Steyn as CEO Who
warrants his authority hereto

 

28/10/2018       /s/ Jacques Steyn Date of Signature ………………   Jacqyes Steyn    
 

 

 

 

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For and on behalf of (The Distributor) by David King as CEO

Who warrants his authority hereto

 

10/31/2018       /s/ David King Date of Signature ………………   David King      

 

 

 

 

 

 

 

 

 

 

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ANNEXURE A

“Services and Products”

 

  · African Horizon Technologies Hydraspin   · African Horizon Technologies TOC
  · African Horizon Technologies Water Quality Probe   · African Horizon
Technologies Crystal Clear Separator   · African Horizon Technologies Instralink
and Website dashboard client portal   · African Horizon Technologies DissOil   ·
African Horizon Technologies Microba   · African Horizon Technologies Waste
water systems   · African Horizon Technologies Sewerage Treatment Plants   ·
African Horizon Technologies Reverse Osmosis

 

 

 

 

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ANNEXURE B

Agreed on process of order to be attached once it has been clearly defined by
both parties.

 

AHT follows a client qualification and process qualification process to ensure
commercial and technical viability and feasibility of solution provided to end
user

 

It is agreed that this process shall be included in this contract within 90 days
of signature of this agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Annexture C – Pricing Schedule

 

Hydraspin Pricing based on dollar exchange rate – for the purpose of reference
pricing will be shown in dollar – USD.

 

It is agreed that included in the price are the following items:

·Hydraspin hydro cyclone skid

·Skimmer -S1 – small skimmer or S2 large skimmer – quantity will be defined by
the Distributor in consultation with The Principal

·Decant process tank – size to system size (either PVC tank or steel tank built
into container (if modular tank is required – up to 36m3/h flow rate (5500
barrels per day). For larger flow rates there may be a need for larger tanks
which will be left out of this pricing schedule as this design and requirement
will be determine at project kick off of large flow system (flows larger than
36m3/h or 5500 barrels per day)

 

1.Hydraspin ES 4 m3/h = HS 600 (600 Barrels per day) Price: $45 000.00

2.Hydraspin ES10 m3/h = HS 1500 (1500 Barrels per day) Price: $92 000.00

3.Hydraspin Es20 m3/h = HS 3000 – Price: $ 182 000.00

4.Hydraspin Es26 m3/h = HS 4000 – Price: $ 225 000.00

5.Hydraspin Es36 m3/h = HS 5500 – Price: $ 310 000.00

6.Hydraspin Es72 m3/h = HS 10800 – Price: $ 515 000.00

7.Hydraspin Es144m3/h = HS 22000 – Price: $ 1 210 000.00

8.Hydraspin Es250m3/h = HS 38000 – Price: $ 1 750 000.00