AGREEMENT
TO TERMINATE PRIOR AGREEMENTS
AND TO TRANSFER LICENSE
This Agreement to Terminate Prior Agreements and to Transfer License
("AGREEMENT") is entered into on April 30, 1999, among Fosseen Manufacturing &
Development, Ltd., an Iowa corporation ("FMD"); American Technologies, L.C., an
Iowa limited liability company ("AMTECH"); Mirenco, Inc., an Iowa corporation
("MIRENCO"); all of which are affiliated companies located in Radcliffe, Iowa,
and Ethaco Corporation, a Minnesota corporation, of 7090 Island Road, Eden
Prairie, Minnesota 55347 ("ETHACO").
WHEREAS, Ethaco is the holder of a license to utilize the technology set
forth in U.S. Patent No. 4,958,598, granted to Dwayne Fosseen on September 21,
1990, and each patent with respect to which Dwayne Fosseen is named as an
inventor and which cites Patent No. 4,958,598 as a reference, to manufacture,
develop and sell the technologies presented in said patent with the states of
Minnesota, Wisconsin and Illinois, pursuant to a License Agreement entered into
between AmTech and Ethaco on October 17, 1992, hereinafter referred to as
"LICENSE AGREEMENT"; and
WHEREAS, FMD, AmTech, Mirenco and Ethaco entered into an Exclusive
Distributorship Contract on May 1, 1997 under which the parties were granted
certain rights and assumed certain obligations, including without limitation the
appointment of Ethaco as the sole distributor of Mirenco products for the states
of Minnesota, Wisconsin and Illinois, hereinafter referred to as "EXCLUSIVE
DISTRIBUTORSHIP CONTRACT").
WHEREAS, Mirenco is preparing to offer 2,000,000 shares of its common stock
in a self-underwritten public offering to residents of the State of Iowa (the
PUBLIC OFFERING") and
WHEREAS, the parties wish to terminate the License Agreement and the
Exclusive Distributorship and entered into this new Agreement which shall
hereafter control the rights and responsibilities of the parties
NOW THEREFORE, in consideration of the premises, it is agreed as follows:
1. TERMINATION OF LICENSE AGREEMENT. The License Agreement is hereby
terminated, effective as of the date of this Agreement. Ethaco hereby grants,
sells and conveys to AmTech all of its claims to any license or other interest
in the Licensed Patent, the Licensed Invention, the Licensed Trademark and the
Licensed Products (as those terms are defined in the License Agreement).
2. TERMINATION OF EXCLUSIVE DISTRIBUTORSHIP CONTRACT. The Exclusive
Distributorship Contract is hereby terminated, effective as of the date of this
Agreement.
<PAGE>
3. CASH CONSIDERATION.
3.1 Upon the successful close of the Public Offering, AmTech shall pay
to Ethaco the sum of Twenty-five Thousand Dollars ($25,000). For purposes
of this Agreement, the "successful close of the Public Offering" shall mean
the close of the Continuous Offering Period, as defined in the Prospectus
for the Public Offering, and the sale by Mirenco of no less than one
million (1,000,000) shares of its common stock under the Public Offering.
3.2 Effective as of the date of this Agreement, AmTech shall pay to
Ethaco an amount equal to ten percent (10%) of the royalties received by
AmTech from Mirenco in accordance with the terms of a written licensing
agreement to be entered into between AmTech and Mirenco. Payments ("ETHACO
Royalties") shall be made to Ethaco quarterly and shall be based upon the
total amount of royalty payments actually received by AmTech from Mirenco
during the immediately preceding quarter pursuant to such written
agreement. The obligation of AmTech to make payments under this section 3.2
shall terminate when the aggregate of all Ethaco Royalties paid under this
section 3.2 equals or exceeds Eight Hundred Thousand Dollars ($800,000).
4. DISTRIBUTORSHIP. In the event Mirenco terminates the Public Offering
without having sold a minimum of 100,000 shares of its common stock, Ethaco
shall have the right to enter into an agreement with AmTech as sole distributor
of the Licensed Products for the states of Minnesota, Wisconsin and Illinois.
The terms of any such distributorship arrangement shall be as set forth in
sections 2, 3, 4, 5, 6, and 9 of the Exclusive Distributorship Contract, or as
otherwise agreed between Ethaco and AmTech. The right described in this section
4 may be exercised by Ethaco by written notice to AmTech, in care of Dwayne
Fosseen, within sixty (60) days of the date of the termination of the Public
Offering. Failure to provide such notice within such sixty (60) day period shall
constitute a waiver of the rights described in this section.
5. RELEASE OF ALL CLAIMS. The parties hereby release and forever discharge
one another, their employees, agents, successors and assigns:
o from any and all obligations under the License Agreement and the
Exclusive Distributorship Contract;
o from any and all claims which may accrue in the future, including claims
for contribution, indemnity, attorneys fees, consequential damages concerning
either the License Agreement or the Exclusive Distributorship Contract and
o from any and all causes of action which are claimed to result in damages
or losses, whether direct or indirect, including any and all claims for monetary
recovery, legal causes of action, and/or equitable causes of action which may
have accrued concerning either the License Agreement or the Exclusive
Distributorship Contract.
This Release is specifically intended as a contractual agreement and not a
mere recital, which is executed in consideration of and also is intended to
cover any and all losses and/or consequential damages arising from the License
<PAGE>
Agreement or the Exclusive Distributorship Contract, whether presently known or
unknown.. The undersigned acknowledge that they have read this section 5, and
have executed this Agreement with a full understanding of its meaning.
6. NONCOMPETITION. During the term of this Agreement and for a period of
one (1) year thereafter, Ethaco shall not engage in any business or activity or
sell any product that competes, directly or indirectly, with the Licensed
Products.
7. SEVERABILITY. In the event that it is found that any portion of this
Agreement is contrary to an applicable law, then the parties hereto agree that
said conflicting portion of the Agreement shall be deemed null and void and both
parties agree to modify the Agreement in order to most closely accomplish the
goals of the conflicting paragraph while remaining within the purview of the law
in conflict with the offending portion of the original agreement.
8. ASSIGNMENT. The rights and duties of Ethaco under this Agreement may not
be assigned or delegated in whole or in part by operation of law or otherwise
without the prior express written consent of Mirenco. Any material change in the
direct or indirect ownership or control of the Ethaco, any merger or
consolidation directly or indirectly involving Ethaco, any acquisition by or of
Ethaco or any other substantial change in Ethaco's organization would be an
assignment within the meaning of this provision.
9. CONFIDENTIAL INFORMATION. Ethaco shall not reveal or disseminate any
Confidential Information to any third person at any time. Ethaco shall (i) take
all necessary and appropriate efforts to safeguard the Confidential Information
from disclosure; (ii) not duplicate or distribute to anyone any of the
Confidential Information without prior written authorization from the Company;
(iii) not use the Confidential Information for any purpose, other than as stated
in this Agreement; (iv) inform all of its agents, employees and distributors of
this provision; and (v) be responsible for any breach of this Agreement by its
agents, employees or distributors. "CONFIDENTIAL INFORMATION" shall include: (i)
the Company's patents, patent applications, trademarks and copyrights; (ii) the
Company's trade secrets, including, but not limited to, the Licensed Products,
trade knowledge, processes of manufacturing and assembly, product design,
procedures, practices, techniques, methods, types and kinds of raw materials,
formulas, research and engineering data, plans, blue prints, specifications,
inventions, ideas, computer software, software applications, programs and
program codes, prototypes and samples; (iii) the Company's proprietary
information, including but not limited to, manuals, brochures, reports,
documents, financial statements, memoranda, customer lists, future business
opportunities, letters, suppliers, cost and marketing information and (iv) any
other materials furnished by Company to Ethaco if such other materials are
marked "confidential." Confidential Information shall not include any
information that is in the public domain or becomes generally available to the
public through no action or inaction of Ethaco.
10. NOTICES. All notices sent pursuant to this Agreement shall be in
writing and sent via (i) facsimile, or (ii) Federal Express, United Parcel
Service, or United States mail to the address below, subject to the right of
either party to change its address by written notice. All notices shall be
deemed to have been duly given when received by the other party.
<PAGE>
Fosseen Manufacturing & Development, Ltd. Ethaco Corporation
American Technologies, L.C. and 7090 Island Road
Mirenco, Inc. Eden Prairie, MN 55347
in care of Dwayne Fosseen
Box 10
Radcliffe, IA 50230
Fax: 515/899-2147 Fax: 612-933-5958
11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties, and no modifications, alterations, or expungement
of this document may be made unless done so in writing and executed by the
parties.
12. WAIVER. The failure of either party to enforce any provision of this
Agreement shall not act as a waiver of any right to any future enforcement nor a
waiver of any of the remaining provisions of this Agreement.
13. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Iowa. The parties each consents to the jurisdiction of the courts of
Hardin County, Iowa for adjudication of any claim arising out of this Agreement.
14. BINDING AGREEMENT. This Agreement shall bind and inure to the benefit
of the parties hereto and their successors in interest.
IN WITNESS WHEREOF, this Agreement has been executed and entered into on
the date first shown above.
ETHACO CORPORATION MIRENCO, INC.
By: /S/ J. RICHARD RELICK By: /S/ DWAYNE FOSSEEN
---------------------------- --------------------------
J. Richard Relick, President Dwayne Fosseen, President
AMERICAN TECHNOLOGIES, L.C.
By: /S/ DWAYNE FOSSEEN
-------------------------
Dwayne Fosseen, President
FOSSEEN MANUFACTURING &
DEVELOPMENT, LTD.
By: /S/ DWAYNE FOSSEEN
-------------------------
Dwayne Fosseen, President
