Document:

ex102.htm

Exhibit 10.2

AMENDMENT NO. 1 TO THAT CERTAIN

DEVELOPMENT AND EXCLUSIVE LICENSE AGREEMENT

 

THIS AMENDMENT NO. 1, dated as of December 4, 2013 (the “Amendment”), to that certain AGREEMENT dated as of November 26, 2013 (the “Agreement”), among Sgenia Soluciones, S.L. (“Soluciones”), ZENON Biosystem, S.L.  (“Subco”) and Zenosense, Inc., formerly Braeden Valley Mines, Inc. (the “Company”), is hereby being amended to include as an additional party, Sgenia Industrial, S.L. (“Sgenia”), the parent corporation of its subsidiaries, Soluciones and Subco, and formed under the laws of the Kingdom of Spain, and to acknowledge that the operative date of the Agreement shall be the date of this Amendment; provided however, all the parties hereto acknowledge that the funding obligations of the initial payment by the Company have been fully met.

 

The parties to this Amendment hereby restated the revised “Whereas Clauses” of the Agreement in substitution thereof, as follows:

 

Whereas, Sgenia, together with Soluciones, has developed certain technology and they own directly and indirectly certain intellectual property relating to sensory monitoring of defined environments, referred to as the “Sensory Technology” herein; and

 

Whereas, Sgenia has established a subsidiary, Subco, and caused Soluciones to license Subco under Spanish law all the intellectual property necessary to use the Sensory Technology to develop a Methicillin-Resistant Staphylococcus Aureus / Staphylococcus Aureus (“MRSA/SA”) detection device and other devices to detect Hospital Acquired Infections (“HAIs”); and

 

Whereas, Subco and Soluciones and the parent company, Sgenia, together for their respective benefits, seek an arrangement with the Company for the provision of development capital for the MRSA/SA and other HAI detection devices to be developed by Subco in exchange for a worldwide, exclusive license to manufacture, market and sell the resulting product as provided herein, subject to certain limitations and a royalty arrangements on a revenue sharing basis; and

 

Whereas, the Company seeks the license arrangement embodied in this Agreement for the MRSA/SA detection device in exchange for its funding Subco development activities;

 

Whereas, the Company is also being granted the right of first negotiation for additional future products related to MRSA/SA, other HAI products, and the same right for all other products based on the Sensory Technology; and

 

Whereas, Sgenia, Soluciones and Subco on the one hand and the Company on the other hand will work together on various aspects of the development, manufacture and marketing of the resulting product or products, as embodied in this Agreement.

 

The parties hereby agree that for the consideration provided and to be provided and the obligations of the parties under the terms of the Agreement, that the following provisions of the Agreement are hereby amended:

 

  

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1.           Definitions.                      Certain of the definitions, as indicated below, set forth in Section 1, entitled Definitions, are amended, as follows, and to the extent stated below are in substitution for the definitions set forth in the Agreement.

 

 (c)            “Designee” shall mean a corporation or other entity that is employed by, under contract to, or in partnership with Sgenia, Soluciones, Subco or the Company, and any Sublicensee or an Affiliate of the foregoing.

 

(d)           Effective Date” shall be the date on which this Amendment to the Agreement is executed by Sgenia, Soluciones, Subco and Company.

 

(g)           “Materials” shall mean the tangible physical material developed by Sgenia, Soluciones, Subco and Company and any Designees, Sublicensees, and Affiliates of the foregoing, relating to the Products and substantially constructed from the components listed in Exhibit A hereto, and any progeny or derivatives thereof.  “Sgenia-generated Materials” shall mean the tangible physical material developed by Sgenia, Soluciones and/or Subco relating to the Sgenia Patents and substantially constructed from the components listed in Exhibit A hereto, and any progeny and derivatives thereof.

 

(h)           “Net Sales” shall mean the greater of the gross invoice or contract price to Third Party customers for the Product, its installation and the related training whether at the time of installation or subsequent thereto, less:  (i) direct manufacturing costs of Product and of the provision of installation and training expense, each as determined by United States Generally Applied Accounting Practices, (ii) the cost to Company of the Chips as provided by Sgenia and/or Subco or their Affiliates, to the extent not included in the direct manufacturing costs of Product, (iii) normal and customary quantity and/or cash discounts and allowances actually given and shown on the invoice; (iv) commissions paid to Third Parties, including distributors, freight, postage, shipping, and insurance expenses separately identified in such invoice; (v) credits or refunds actually allowed for bona fide returns (net of all returns actually made or allowed as supported by credit memorandum actually issued to the customers) of Products; and (vi) sales and other taxes and duties directly related to the sale, to the extent that such items are included in the gross invoice price (but not including taxes assessed against or measured by the income derived from such sale), plus Upfront, Milestone and Lump Sum Payments.   Any discounts and allowances based on overall purchases by the customer or its Affiliate may be applied to reduce Net Sales only to the extent of the pro rata amount of such discounts or rebates attributable to the Products included in such overall purchases. Any of the deductions listed above which involves a payment by Sgenia or Company and Designees, Sublicensee, or Affiliates of the foregoing shall be taken as a deduction against aggregate sales for the calendar quarter in which the expense is accrued by Sgenia or Company and Designees, Sublicensee, or Affiliates of the foregoing.  

 

For the clarification of the calculation of Net Sales, if a Product is sold in combination with one or more other products or services, the services relating to installation and training at any time is included therein, but warranty and other revenue sources of any other products and services will not be included in the gross invoice or contract price of the Products for purposes of Net Sales, pursuant to the understanding that the Sgengia and Company  and Designees, Sublicensees and Affiliates have the right to generate other forms of income premised on the Product.

 

(i)           “Sgenia Patent” or “Sgenia Patents” shall mean the patents and patent applications listed in Exhibit B hereto; any application owned in whole or in part or filed by Sgenia, Soluciones and/or Subco and their Affiliates; any continuation applications, divisional applications, or continuation in part applications that claim priority to the patents and/or applications listed in Exhibit B; any patents that issue from any of the foregoing; and any reissues, re-examinations, renewals, substitutions, and extensions of any of the foregoing.

 

(m)            “Sgenia Entity” means Sgenia, Soluciones, Subco and or any entity directly or indirectly controlling, controlled by or under common control with Sgenia from time to time. Additionally, the term Sgenia, as used in the Agreement, shall include both Sgenia and Soluciones, unless the context of the Agreement is clear that the term Sgenia should only refer to either Sgenia, as the parent corporation, or Soluciones, as the subsidiary corporation, in which case the term will only refer to one or the other of such Sgenia Entities.

 

(q)            “Sublicensee” shall mean any corporation or other business entity to whom Sgenia, Soluciones, Subco or Company has granted a sublicense to any of the rights transferred in this Agreement, including permitted sublicensees of such corporations or other business entities.

 

  

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(r)           “Technical Information” shall mean any know-how, information (technical, process, clinical or other), knowledge, research, trade secrets, techniques, designs, data, Sgenia Software,  Software Documentation,  specifications, practices, procedures, assays, formulae, processes, systems, improvements, methods, skill, test and other data including chemical, pharmacological, toxicological and clinical test and other data, analytical and quality control data, and laboratory notes that:

 

                                (i) relate to Sgenia, Soluciones, Subco or Materials; and;

 

                                (ii) is owned by a Sgenia Entity with the right to grant an exclusive or nonexclusive sublicense to Subco and/or the Company; and

 

                                (iii) (1) was conceived, reduced to practice, or developed, in whole or in part, in the laboratories/offices of a Sgenia Entity before the Effective Date, and/or (2) is conceived, reduced to practice, or developed, in whole or in part, in the laboratories/offices of a Sgenia Entity after the Effective Date (“Future Technical Information”), but only to the extent before it is disclosed to an employee or consultant of Company or Sublicensee, Designee or Affiliates of the foregoing and relates to the Product.

 

(t)           “Third Party” shall mean any entity other than Sgenia, Soluciones, Subco and Company, and the Sublicensees, Designees, or Affiliates of the foregoing.

 

2.           License Grant and Other Intellectual Property Rights.  For purposes of interpretation of the Agreement and for an abundance of clarity, the grant of the licenses thereunder with respect to the intellectual property being licensed to and transferred to Company, the term Sgenia as defined above in this Amendment is intended to include Soluciones, and their Affiliates as relevant, including but not limited to Subco, so that Company obtains the full benefit of its bargain to obtain all the necessary intellectual property rights sufficient to commercialize the Product as provided in the Agreement, whether from Sgenia, Soluciones or Subco and any of their Affiliates.  It is agreed by the parties hereto that in any dispute the licensors should be broadly interpreted to include any and all of the Sgenia Entities as is or may be necessary to provide the Company with the intended rights under the Agreement and this Amendment.

 

3.           Consents by Sgenia and/or Soluciones.  Although the term “Sgenia” is defined to include both Sgenia and Soluciones by this Amendment, in those provisions of the Agreement where the consent or approval or similar action of Sgenia is required, it will be sufficient that only one of Sgenia or Soluciones provide the consent, and the Company may rely on any communication from either Sgenia or Soluciones, singly and not jointly, in respect of any such consent, approval or similar action to be provided by Sgenia.

 

4.           Joinder of Parties.                                Sgenia, is hereby added as a party to the Agreement, entitled to enjoy the benefits and privileges thereof and suffer the obligations thereof in all respects, without any limitions, to the same degree as Soluciones as set forth in the Agreement before amendment, and as a full party thereto Sgenia makes to the Company all the representations made by Soluciones as if made by Sgenia and is and will be bound by the terms of the Agreement that apply to Soluciones to the same degree as applicable to Soluciones, subject to the exception that if some obligation clearly can only be that of Sgenia or Soluciones, each as a separate corporation, then Sgenia or Soluciones will not be obligated to be bound by such term.

 

5.           Notices.  Notices to Soluciones and Sgenia will be sent to the address of Sgenia set forth in the Agreement, in the same manner as set forth therein with respect to notices to Sgenia.

 

6.           Entire Agreement.  The Agreement, as specified in Section 22 of the Agreement, shall include this Amendment.

 

7.           Execution in Counterparts. This Amendment may be executed in counterparts, all of which together shall be deemed one original Amendment.  This Amendment may be transmitted to the other parties hereto by pdf. or other electronic form.

 

8.           Affirmation of Agreement.  Unless specifically amended or interpreted by this Amendment, the original Agreement is hereby confirmed in all respects, and the parties thereto and hereto agree to be bound by such terms as hereby amended and interpreted.

 

  

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Sgenia  Industrial, S.L.

By:           /s/ Jesús Lama                  

Name: Jesús Lama

Title: Administrador Unico – Chief Executive Officer

Sgenia  Soluciones, S.L.

By:            /s/ Jesús Lama            

Name: Jesús Lama

Title: Administrador Unico – Chief Executive Officer

ZENON Biosystem, S.L.

By:            /s/ Jesús Lama            

Name: Jesús Lama

Title: Administrador Unico – Chief Executive Officer

Zenosense, Inc.

By:           /s/B. Alejandro Vasquez              

Name: B. Alejandro Vasquez

Title: President

 

  

4ex103.htm

Exhibit 10.3

SUPPLY OF SERVICES AGREEMENT

 

THIS SUPPLY OF SERVICES AGREEMENT (the “Agreement”) is entered into with an effective date of December 5, 2013 the “Effective Date”, between Zenosense, Inc., a Nevada corporation, with an address at Avda Cortes Valencianas 58, Planta 5, 46015 Valencia, Spain (the “Company”), and Ksego Engineering SL, a Spanish Sociedad Limitada Company, with an address at  Plaza Europa 6, 46380 Cheste, Valencia, Spain whereby Ksego Engineering SL (“the Ksego”), and Carlos Jose Gil (“Contractor”) a principal of the Ksego, agrees to provide certain services (“the Services”) to the Company.

The intention of this Agreement is that the Ksego will make available to the Company the services of Contractor, and Contractor agrees to provide such services and to be bound by this Agreement as if he had entered into it in his own right as a self employed contractor in the event that Ksego is no longer able to procure or does not procure the Services for whatever reason and, likewise, the Company agrees that the Agreement shall continue in full force as if it were a contract between Contractor and the Company in the event of the dissolution of Ksego. In such circumstances references to Ksego herein shall be construed as references to Gill as a self-employed contractor.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I :  Definitions and Interpretations

 

1.1 Definitions

 

For purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms shall have the following respective meanings:

 

“Base Fee” shall have the meaning specified in Section 3.1.

 

“Board of Directors” shall mean the Board of Directors of the Company.

 

“Cause” shall have the meaning specified in Section 4.3.

 

“Company” will also include its subsidiaries, parents and affiliates where it is reasonably logical the use of the word would include such other entities, and include any successor to its business and/or substantially all its assets which executes and delivers the Agreement as provided for in Section 7.4 or which otherwise becomes bound by all terms and provisions of this Agreement by operation of law.

 

“Confidential Information” shall have the meaning specified in Section 5.1(a).

 

  

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“Disability” shall mean a physical or mental condition of the Contractors that, in the good faith judgment of not less than a majority of the Board of Directors, prevents that individual from being able to perform the services required under this Agreement. If any dispute arises as to whether a Disability has occurred, or whether a Disability has ceased and the Contractor is able to resume duties, then such dispute shall be referred to a licensed physician mutually agreed upon by the Contractor and the Company, which physician will not be any of the Contractor’s regular physicians.  The Contractor shall submit to such examinations and provide information as such physician may request and the determination of such physician as to the Contractor's physical or mental condition shall be binding and conclusive on the parties.  The Company shall pay the cost of any such physician and examination.

 

“Dispute” shall have the meaning specified in Article VI.

 

 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Expiration Date” shall have the meaning specified in Section 2.2.

 

“Notice of Termination” shall mean a notice purporting to terminate this Agreement in accordance with Section 4.1, 4.2 or 4.3.

 

“Person” shall mean and include an individual, a Partnership, a joint venture, a corporation, a trust and an unincorporated organization.

 

“Incentive Fee” shall have the meaning specified in Section 3.2.

 

“Term” shall have the meaning specified in Section 2.2.

 

“Termination Date” shall mean the termination date specified in a Notice of Termination delivered in accordance with this Agreement.

 

1.2 Interpretations

 

(a) In this Agreement, unless a clear contrary intention appears, (i) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision, (ii) reference to any Article or Section, means such Article or Section hereof, (iii) the words “including” (and with correlative meaning “include”) means including, without limiting the generality of any description preceding such term, and (iv) where any provision of this Agreement refers to action to be taken by either party, or which such party is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such party.

 

(b) For the avoidance of doubt this Agreement refers to the provision of certain services to be provided by the Contractor.

 

(c) The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

 

  

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(d) For the avoidance of doubt it is specifically agreed between the Parties that nothing in this Agreement shall be construed as inferring any employment rights and obligations between the Company and/or any of its subsidiaries and associates and the Contractor and, as a result, the Company shall have no obligation or right to make any withholding tax deductions, unless required to do so by law. The Ksego and Contractor, jointly and severally, warrant and represent to the Company that they shall be solely responsible for any income, social security or other taxation liabilities that are payable on the compensation referred to herein. The Company agrees that it or any subsidiary that benefits from the service provided by Contractor will pay IVA, if any, that is payable or is subsequently deemed to be payable on invoices raised by Kesgo, even if such IVA is not initially included in invoices by virtue of the Parties understanding that the service provided are not subject to IVA because they are effectively exported and therefore believes to be zero rated.

 

ARTICLE II : Services, Compensation etc.

 

2.1 Service Arrangement

 

The Company agrees to contract with Ksego and, directly the Contractor in the event Ksego is not longer in existence, to obtain the services of the Contractor as further described herein and Ksego and the Contractor agree to provide such services.

 

2.2. Term of Agreement

 

Unless sooner terminated pursuant to Article IV, the term of this Agreement (the “Term”) shall end on twelve months from the date of this Agreement, subject to extension as herein provided.  The Term will be automatically extended by an additional one (1) month, on a successive basis, unless one party gives written notice to the other at least 3 months before the then effective Expiration Date indicating that the party does not extend Term of the Agreement.  If the Term is extended, then the Expiration Date will be automatically extended by a corresponding one month (1) months.  The right not to extend the Term and the corresponding Expiration Date is separate from the right to give a Notice of Termination herein.

 

2.3 Services

 

(a) During the Term of the Agreement, the Contractor shall provide such professional and related services as are commensurate with the position of Company Chief Executive Officer/President.  In addition the Contractor shall agree that it shall accept appointment as a director and/or other officer of the Company and its subsidiaries, as shall be agreed from time to time with the Company, and, as such, the Contractor shall have the responsibilities and authorities designated to him by the bylaws of the Company, if stated therein, and the Board of Directors.

 

(b) During the Term of the Agreement, the Contractor shall (i) report to the Board of Directors and (ii) observe and comply with all lawful policies, directions and instructions of the Board of Directors and the Company that are consistent with the provisions of this paragraph 2.3.

 

(c) During the Term of the Agreement, the Contractor shall (i) devote his business time, attention, skill and efforts to the faithful and efficient performance of the provision of the Services as is reasonably required, with the understanding that it is likely to be the majority of his business time.

 

(d) The Company acknowledges that Ksego and the Contractor, separately and together, may occasionally have other clients and that Ksego and the Contractor may have other commitments which they need to attend to. Insofar as the Contractor as such other responsibilities from time to time, the Contractor agrees as follows: (i) that his obligations to provide service to the Company shall take priority to other commitments and (ii) to not accept any other client that may create a conflict with services to be provided to the Company, and (iii) to take reasonable steps to resign his role in relation to any client that may come into conflict with the Company, the Company acknowledges and accepts that the Contractor’s existing directorships and relationships with Ksego and as disclosed in Schedule 1 (“Disclosed Relationships”) to this agreement do not represent an employment conflict, and (iv) to accept the decision of the Board of Directors of the Company as to whether a conflict situation exists and to draw any client situation to the attention of the Board of Directors if the Contractor believes that a conflict does or may arise.

 

  

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(e) During the currency of this Agreement, the Contractor shall not knowingly prejudice, in any material respect, the reputation of the Company in the fields of business in which it is engaged or with the investment community or the public at large.

 

(f) If elected or appointed thereto, and only for the duration of such elected term or appointment, the Contractor shall, as an integral part of and to facilitate the provision of the Services referred to herein, serve as a director and/or officer of the Company and any of its subsidiaries and/or in one or more executive positions of any of such subsidiaries, provided that the Contractor is indemnified for serving in any and all such capacities on a basis consistent with that provided by the Company to other directors and executive officers of the Company or similarly situated executive officers of any such subsidiaries.

 

(g) The Contractor represents that there are no restrictions imposed upon him by any covenants or agreements arising out of any prior engagement which materially affect his ability to provide the services set forth in this Agreement. The Contractor agrees to indemnify and hold the Company harmless for any judgment and related costs, including attorney’s fees, which may be entered against the Company as a result of a breach of any such covenants or violation of any such restrictions, and agrees that any such breach or violation shall qualify for “Cause” termination pursuant to Section 4.3 below.

 

ARTICLE III : Fees and Expenses

 

3.1 Base Fee

 

(a) For services rendered by the Contractor under this Agreement, the Company shall pay to the Contractor, as the designee of Ksego, a base monthly fee of 4,500 Euros to be paid at the end of each month in Euros to a bank account nominated by the Contractor and maintained in his name. The amount is exclusive of any IVA that is or may be payable.

 

(b) As additional consideration for the services of the Contractor, on his assumption of the role of the chief executive officer (or similar office), the Contractor will be paid 10% of the annual Net Sales, as that term is defined in that certain Development and License Agreement dated November 26, 2013, as amended on December 4, 2013 (“License Agreement”), which definition is incorporated herein by reference, in respect of the sales of and revenues from the products and services that are subject to the License Agreement (generally referred to as the (“ Additional Consideration”).  The right to the Additional Consideration will commence only after Consultant has been actively employed by the Company, under this Agreement, for a period of 18 months from the date hereof and through the date of his termination of employment by the Company; provided that if Consultant is actively employed by the Company at the 18 month anniversary of the date of this Agreement, then Consultant will be due the Additional Consideration that would have accrued during the first 18 months of this Agreement if this provision would have been applicable. [For purposes of clarification and interpretation, the Additional Consideration accrues and is payable only during the period commencing the 18 months anniversary of the date of this Agreement through the termination, for any reason, of Consultant’s employment, and is retroactive on the 18 month anniversary during the preceding 18 months.)  The Additional Consideration will be paid on a monthly basis, subject to year-end adjustment based on the year-end financial statements. The Contractor specifically agrees that for purposes of any final year-end adjustment, the Company may withhold such amount as may be necessary to determine the final, annual Net Sales for purposes of the Additional Consideration, provided that the withholding will not be greater than 40% of the estimated payment due on a monthly basis.

 

(c)  For clarity, Ksego hereby agrees not to claim from the Company any right in cash compensation or stock warrants paid or awarded to the Contractor, under this section or any other section of this Agreement or for any other reason by the Company or an affiliate thereof, and to the extent that Ksego has any rights in the compensation or stock warrants paid to Contractor, it will only seek recourse against Contractor and not the Company.

 

  

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3.2 Incentive Fee

 

During the Term, the Parties may agree from time to time to modify this Agreement so as to engage the Contractor to provide services over and above those set out in this Agreement and/or to provide incentive to the Contractor to add exceptional value.

 

3.3 Period of Absence

 

The Company accepts that the Contractor may from time to time take vacation from his full time client commitments to the Company (Period of Absence). During such periods the Contractor shall ensure that adequate base coverage is provided by the Contractor so as not to prejudice the quality of the overall service. On no account shall the Contractor take a Period of Absence other than in accordance with the following: (a) it shall be within the overall average annual Time Commitment calculation; (b) it shall only exceed 14 consecutive business days with the prior agreement of the Board of the Company, which shall not be unreasonably denied.

 

3.4 Expense Reimbursement

 

The Company shall reimburse the Contractor for all reasonable travel and other business expenses incurred by its Contractors in the performance of the Services. Such expenses shall be submitted monthly in arrears and the Contractor shall retain and make available for inspection all supporting vouchers for the duration of the Agreement. Expense reimbursements shall be made in line with the principles set out in the Companies policies that apply to its employees as modified by agreement from time to time made in writing between the Parties.

 

ARTICLE IV : Termination

 

4.1 Termination by the Contractor

 

Either Ksego or the Contractor may, at any time prior to the Expiration Date, terminate the provision of the Agreement for any reason by delivering a Notice of Termination to the Board of Directors.  The Notice of Termination shall be effective on a date not less than three months after the date of the notice and state the effective Termination Date and if none is specified then the Termination Date will be three months after the date of the Notice of Termination.  The Termination Date under this provision may be beyond the Expiration Date.

 

4.2 Termination by the Company

 

The Board of Directors may, at any time commencing one month after the date of this Agreement and prior to the Expiration Date, terminate the Agreement for any reason by delivering a Notice of Termination to the Contractor, which shall also be deemed notice to Ksego.  The Notice of Termination by the Company shall be effective not less than one month after the date of the notice and state the effective Termination Date and if none is specified then the Termination Date will be three months after the date of the Notice of Termination.  The Termination Date under this provision may be beyond the Expiration Date.

 

  

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4.3 Termination for Cause

 

The Company may terminate the Agreement for “Cause” upon the giving of a Notice of Termination to the Contractor, which shall also be deemed notice to Ksego, subject to the terms of this sub-part, which shall be effective immediately.  The Notice of Termination for Cause shall state the basis for the notice.  The Company shall have “Cause” to terminate the Agreement during the Term of this Agreement, if the Contractor’s actions result in:

 

(a) Failure to materially provide the Services to a reasonable standard after written notice and reasonable opportunity for cure, all as reasonably determined by the Board of Directors upon a vote of a majority of its members, such vote not including the Contractor.  Any such notice will allow for a minimum of one (1) month for the Contractor to cure such failure from the date of such notice.  Any determination of whether the Contractor has failed to materially perform his duties shall not be based on performance or the financial condition of the Company or the ability of the Contractor to effectuate such Company performance or financial condition.

 

(b) Conviction of the Contractor of a felony or any crime involving embezzlement or theft during the Term or any embezzlement or theft from the Company whether or not the subject of a conviction; or

 

(c) Serious willful misconduct by the Contractor, including fraud willful dishonesty or the substantial breach of any fiduciary duty owed to the Company.

 

4.4 Resignations

 

In the event of a termination of this Agreement the Contractor shall immediately resign any office or directorship in the Company or any of its Subsidiaries of Associates which he holds by virtue of this Agreement or otherwise.  This contract may be replaced with a similar contract under circumstances where at its sole discretion the Board of Directors shall determine that the Contractor should continue to serve in any office or directorship, and such separate offer shall not be deemed to be a breach of any agreement, duty or obligation owing by Company to Ksego.

 

4.5 Payment in the event of Termination.

 

(a) After the termination of the Agreement for any reason by the Company, including the inability of the Contractor to provide services due to disability of the Contractor, but other than for Cause, the Company shall pay to the Contractor the aggregate of (i) any unpaid Base Fee earned by that Contractor hereunder prior to the Termination Date and any unreimbursed expenses, plus an amount equal to the equivalent of the daily per diem rate inherent in the base fee multiplied by the number of excess days spent prior to the Termination Date over the number of days in the current annual period spent in excess of the Time Commitment apportioned on a straight line time basis, AND (ii) an amount, which is to be regarded as compensation for early termination, equal to the Base Fee which would otherwise have been due from the Termination Date to the then Expiration Date of the then Term, if the Expiration Date is after the Termination Date.

 

(b) Upon termination of the Agreement by the Company for Cause the Company shall pay the Contractor the unpaid Base Fee earned through the Termination Date and unreimbursed, actual expenses incurred by Executive in furtherance of the Company’s business, subject to any rights of set off for damages to the Company as it asserts.  Except as provided in this agreement or by law, upon termination for Cause, the Company shall have no further financial obligation to Executive.

 

(c) Upon termination of the Agreement by the Contractor (and for this purpose the death of the Contractor shall be regarded as Termination by the Contractor with Notice given from the date of the Contractor’s death) the Company shall pay the Contractor any unpaid Base Fee earned hereunder prior to the Termination Date and any unreimbursed expenses.

 

  

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ARTICLE V : Confidential Information and Non-Competition

 

5.1 Confidential Information

 

(a) Ksego and the Contractor recognizes that the services to be performed hereunder are special, unique, and extraordinary and that, by reason of the Agreement, Ksego and/orthe Contractor may acquire Confidential Information concerning the operation of the Company, the use or disclosure of which would cause the Company substantial loss and damages which could not be readily calculated and for which no remedy at law would be adequate.  Accordingly, Ksego and the Contractor  and agrees with the Company that each will not (directly or indirectly) at any time, whether during or after the Term, (i) knowingly use for an improper personal benefit any Confidential Information that is learned or may be learned or has learned by reason of the Agreement with the Company, or (ii) disclose any such Confidential Information to any Person except (A) in the performance of the Contractor’s obligations to the Company hereunder, (B) as required by applicable law, (C) in connection with the enforcement of Ksego’s or the Contractor’s rights under this Agreement, (D) in connection with any disagreement, dispute or litigation (pending or threatened) between the Ksego or Contractor and the Company or (E) with the prior written consent of the Board of Directors.  As used herein, “Confidential Information” includes information with respect to the operation and performance of the Company, its investments, portfolio companies, products, services, facilities, product methods, research and development, trade secrets and other intellectual property, systems, patents and patent applications, procedures, manuals, confidential reports, company data, product price lists, customer lists, financial information, business plans, prospects or opportunities (including, as applicable, all of the foregoing information regarding the Company's past, current and prospective portfolio companies); provided, however, that such term, shall not include any information that (x) is or becomes generally known or available other than as a result of a disclosure by Ksego or the Contractor or (y) is or becomes known or available to Ksego or the Contractor on a non-confidential basis from a source (other than the Company) that, to Ksego’s or the Contractor's knowledge, is not prohibited from disclosing such information to Ksego or the Contractor by a legal, contractual, fiduciary or other obligation to the Company.

 

(b) The Ksego and Contractor each confirms that all Confidential Information is the exclusive property of the Company.  All business records, papers and documents kept or made by Ksego or the Contractor during the Term relating to the business of the Company shall be and remain the property of the Company at all times.  Upon the request of the Company at any time, the Ksego and Contractor shall promptly deliver to the Company, and shall retain no copies of, any written materials, records and documents made or coming into Ksego’s or the Contractor’s possession during the Term concerning the business or affairs of the Company other than personal materials, records and documents (including notes and correspondence) of Ksego or the Contractor not containing proprietary information relating to such business or affairs.  Notwithstanding the foregoing, Ksego and the Contractor shall be permitted to retain copies of, or have access to, all such materials, records and documents relating to any disagreement, dispute or litigation (pending or threatened) between them and the Company.

 

5.2 Non-Competition

 

(a) Within the Term of the Agreement and for a period of one year thereafter (such period being the “Restricted Period”), Ksego and Contractor shall not, unless Ksego and the Contractor receives the prior written consent of the Board of Directors, own a material interest in, manage, operate, join, control, lend money or render financial or other assistance to or participate in or be connected with, as an officer, employee, contractor, stockholder, consultant or otherwise, any Person that competes with the Company, or any other business actively being pursued by or developed by the Company during the Term provided this is in line with the business plan as approved by the board of directors of the Company.

 

(b) Ksego and the Contractor has carefully read and considered the provisions of this Section 5.2 and, having done so, agrees that the restrictions set forth in this Section 5.2 (including the Restricted Period, scope of activity to be restrained and the geographical scope) are fair and reasonable and are reasonably required for the protection of the interests of the Company, its officers, directors, employees, creditors and shareholders.  Ksego and the Contractor understands that the restrictions contained in this Section 5.2 may limit their ability to engage in a business similar to the Company's business, but acknowledges that thhe will receive sufficiently high remuneration from the Company hereunder to justify such restrictions.

 

(c) During the Restricted Period, the shall not, whether for his own account or for the account of any other Person (excluding the Company), intentionally (i) solicit, endeavor to entice or induce any employee or contractor of the Company to terminate the Contractor's employment or contractors contract with the Company or accept employment with anyone else or (ii) interfere in a similar manner with the business of the Company including its contracting parties, customers or clients, suppliers, creditors and financiers.

 

(d) In the event that any provision of this Section 5.2 relating to the Restricted Period or the areas of restriction shall be declared by a court of competent jurisdiction to exceed the maximum time period or areas such court deems reasonable and enforceable, the Restricted Period or areas of restriction deemed reasonable and enforceable by the court shall become and thereafter be the maximum time period and/or areas.

 

  

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5.3 Injunctive Relief

 

Ksego and the Contractor acknowledges that a breach of any of the covenants contained in this Article V may result in material irreparable injury to the Company for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach, any payments remaining under the terms of this Agreement shall cease and the Company shall be entitled to obtain a temporary restraining order or a preliminary or permanent injunction restraining Ksego and/or the Contractor from engaging in activities prohibited by this Article V or such other relief as may be required to specifically enforce any of the covenants contained in this Article V.  Ksego and the Contractor agrees to and hereby does submit to in personal jurisdiction before each and every such court for that purpose.

 

ARTICLE VI : Dispute Resolution

 

6.1 Disputes

 

In the event a dispute shall arise between the parties as to whether the provisions of this Agreement have been complied with (a “Dispute”), the parties agree to resolve such Dispute in accordance with the following procedure:

 

(a) A meeting shall be held promptly between the parties, attended (in the case of the Company) by one or more individuals with decision-making authority regarding the Dispute, to attempt in good faith to negotiate a resolution of the Dispute.

 

(b) If, within 10 days after such meeting, the parties have not succeeded in negotiating a resolution of the Dispute, the parties agree to submit the Dispute to mediation in accordance with the Commercial Mediation Rules of the American Arbitration Association except that Disputes with regard to the existence of a Disability shall be resolved in accordance with the definition of the term “Disability” above.

 

(c) The parties will jointly appoint a mutually acceptable mediator, seeking assistance in such regard from the American Arbitration Association if they have been unable to agree upon such appointment within 10 days following the 10-day period referred to in clause (b) above.

 

(d) Upon appointment of the mediator, the parties agree to participate in good faith in the mediation and negotiations relating thereto for 15 days.

 

(e) If the parties are not successful in resolving the Dispute through mediation within such 15-day period, the parties agree that the Dispute shall be settled by arbitration in accordance with the Expedited Procedures of the Commercial Arbitration Rules of the American Arbitration Association.

 

(f) The fees and expenses of the mediator/arbitrators shall be borne solely by the non-prevailing party or, in the event there is no clear prevailing party, as the mediator/arbitrators deem appropriate.

 

(g) Except as provided above, each party shall pay its own costs and expenses (including, without limitation, attorneys' fees) relating to any mediation/arbitration proceeding conducted under this Article VI.

 

(h) All mediation/arbitration conferences and hearings will be held in the greater London area.

 

(i) In the event there is any disputed question of law involved in any arbitration proceeding, such as the proper legal interpretation of any provision of this Agreement, the arbitrators shall make separate and distinct findings of all facts material to the disputed question of law to be decided and, on the basis of the facts so found, express their conclusion of the question of law.  The facts so found shall be conclusive and binding on the parties, but any legal conclusion reached by the arbitrators from such facts may be submitted by either party to a court of law for final determination by initiation of a civil action in the manner provided by law.  Such action, to be valid, must be commenced within 20 days after receipt of the arbitrators' decision.  If no such civil action is commenced within such 20-day period, the legal conclusion reached by the arbitrators shall be conclusive and binding on the parties.  Any such civil action shall be submitted, heard and determined solely on the basis of the facts found by the arbitrators.  Neither of the parties shall, or shall be entitled to, submit any additional or different facts for consideration by the court.  In the event any civil action is commenced under this paragraph (i), the party who prevails or substantially prevails (as determined by the court) in such civil action shall be entitled to recover from the other party all costs, expenses and reasonable attorneys' fees incurred by the prevailing party in connection with such action and on appeal.

 

  

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(j) Except as limited by paragraph (i) above, the parties agree that judgment upon the award rendered by the arbitrators may be entered in any court of competent jurisdiction.  In the event legal proceedings are commenced to enforce the rights awarded in an arbitration proceeding, the party who prevails or substantially prevails in such legal proceeding shall be entitled to recover from the other party all costs, expenses and reasonable attorneys' fees incurred by the prevailing party in connection with such legal proceeding and on appeal.

 

(k) Except as provided above, (i) no legal action may be brought by either party with respect to any Dispute and (ii) all Disputes shall be determined only in accordance with the procedures set forth above.

 

ARTICLE VII : Miscellaneous

 

7.1 Assignability

 

The obligations of the Contractor hereunder are personal to the Contractor and may not be assigned or delegated by the Contractor or transferred in any manner whatsoever, nor are such obligations subject to involuntary alienation, assignment or transfer.  The Company shall have the right to assign this Agreement and to delegate all rights, duties and obligations hereunder as provided in Section 4, provided always that it will continue to be liable for the obligations of the assignee in the event of default by the assignee.

 

7.2 Notices

 

All notices and all other communications provided for in the Agreement shall be in writing and addressed (i) if to the Company, addressed at its principal office address or such other address as it may have designated by written notice to the Executive for purposes hereof, directed to the attention of the CEO with a copy to the Secretary of the Company and (ii) if to Ksego or the Contractor, at the address written above, or to such other address as Ksego or the Contractor may have designated to the Company in writing for purposes hereof.  Each such notice or other communication shall be deemed to have been duly given when delivered to the receiving party by registered post to the address referred to above where such delivery requires signature as proof of delivery by the receiving party.

 

7.3 Severability

 

The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

 

7.4 Successors: Binding Agreement

 

(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance reasonably acceptable to the Contractor, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement.

 

(b) This Agreement and all rights of Ksego and the Contractor hereunder shall inure to the benefit of and be enforceable by Ksego’s and the Contractor’s personal or legal representatives, executors, administrators, successors, permitted assignees heirs, distributes, devisees and legatees.  If the Contractor should die while any amounts would be payable to the Contractor hereunder if the Contractor had continued to live, all such amounts, unless otherwise provided herein, shall be paid, in an amount calculated in accordance with the terms of this Agreement, to the Contractor’s devisee, legatee, or other designee (as notified to the Company) or, if there be no such designee, to the Contractor's estate. For the avoidance of doubt the Company agrees that such payments will be made in this manner.

 

7.5 Amendments and Waivers

 

No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Company.  No waiver by either party hereto at any time of any breach by the other party hereto of, or in compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

 

  

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7.6 Entire Agreement, Termination of Other Agreements

 

This Agreement is an integration of the parties' agreement and no agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party that are not set forth expressly in this Agreement. This Agreement supersedes any and all previous agreements, oral or otherwise, express or implied, with respect to the subject matter hereof between the parties.

 

7.7 Governing Law

 

THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF NEVADA.

 

7.8 Counterparts

 

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same instrument.

 

7.9 Bad Boy Representation

 

The Contractor and Ksego, both individually represent to the Company that they have not been convicted of any felony or misdemeanor in connection with the purchase or sale of any security, involved in the making of any false filing with the Securities and Exchange Commission, or the conduct of the business of an underwriter, broker, dealer or paid solicitor of purchasers of securities, and is not subject to any order in connection with the foregoing, or subject to any order the restricts him/it from being engaged in the banking, insurance, savings business, suspends or revokes registration as a broker-dealer or being associated with a person or entity involved in penny stock offerings, or is subject to an order based on anti-fraud provisions of the United States securities laws, or is subject to any suspension or expulsion from a securities exchange or securities association or a Unites States postal service false representation order.

 

[Signature page follows]

 

  

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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first above written.

 

ZENOSENSE, INC.

______________________________________

TITLE: CHIEF EXECUTIVE OFFICER

Name: B ALEJANDRO VASQUEZ

KSEGO ENGINEERING SL

/S/ CARLOS JOSE GIL

______________________________________

TITLE: AUTHORISED SIGNATORY

Name: CARLOS JOSE GIL

CARLOS JOSE GIL, INDIVIDUALLY

/S/CARLOS JOSE GIL

___________________________________

Name: CARLOS JOSE GIL

  

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Schedule 1

Disclosed Relationships

NONE.

  

12

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