LIQT LiqTech International Inc

 

On November 11, 2022, LiqTech International, Inc. (the “Company”) and National Energy Services Reunited DMCC, a free zone company incorporated under the laws of the Dubai Multi Commodities Centre (DMCC), Dubai, United Arab Emirates (“NESR”), entered into an Exclusivity Agreement for Collaboration, Marketing and Deployment of Products and Associated Services (the “Agreement”).

 

Pursuant to the Agreement, the parties agreed that NESR and its affiliates will have the exclusive right for three years to market, source projects for, receive and operate products and services related to the Company’s Crossflow Ultrafiltration (CFUF) systems and embedded antifouling systems (collectively, the “Products & Services”) in various countries of the Middle East, Africa and Asia, as set forth in the Agreement (the “Territories”), within produced water applications in oilfield services (the “Field of Use”). Pursuant to the Agreement, the Company shall have the right of first refusal in the Territories for the provision Products and Services by NESR during the term of the Agreement provided the Products meet the required technical specifications. The Agreement contains exceptions to the Company’s exclusivity obligations for potential customers and business opportunities that the Company began exploring prior to its entry into the Agreement and to the Company’s right of first refusal for a certain existing business relationship of NESR.

 

The Company also granted NESR a non-exclusive, non-assignable, non-transferable, non-sublicensable, and royalty-free license to use the Company’s pre-existing intellectual property and know-how as required to perform NESR’s obligations during the term of the Agreement. Under the Agreement, intellectual property developed or produced through NESR’s investment of capital or technical resources in performance of the Agreement shall be jointly owned by the parties.

 

The term of the Agreement is three years and is subject to two extensions, each for an additional one-year period and each of which must be executed with the mutual consent of the Company and NESR. Each party may terminate the Agreement upon (a) the other party’s material breach and the other party’s failure to begin remedy efforts within fifteen calendar days or (b) the other party’s bankruptcy, insolvency, or participation in bankruptcy or insolvency proceedings. Additionally, subject to certain conditions set forth in the Agreement, the Company may terminate the Agreement if NESR fails to meet certain performance targets, including (i) if the Systems are not qualified in the Kingdom of Saudi Arabia by November 11, 2023, (ii) if the dollar amount of gross orders for the Systems is less than $10,000,000 for the twelve months ending on November 11, 2024 (“Year 2”), (iii) if the dollar amount of gross orders for the Systems is less than $40,000,000 for the twelve months ending on November 11, 2025 (“Year 3”), or (iv) if the dollar amount of gross orders for the Systems is less than $100,000,000 for the twelve months ending on November 11, 2026 and November 11, 2027.

 

The Agreement contains standard mutual confidentiality and non-disparagement provisions.

 

The foregoing is only a summary of the material terms of the Agreement, does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, which is attached as Exhibit 10.1 hereto.