Document # 19
LICENSE AGREEMENT
(Bozenhardt BRS-Compakt)
Between
Xx. Xxxxxxx Xxxxxxxxxx
Frickenhausener Xxxxxxx 0/0
00000 Xxxxxxxxxxxxx
Licensor
and
ENTECS Inc.
000 00xx Xxxxxx
Xxxxxx, Xxxxxxxx 00000 XXX
European Office
Xxxx-Xxxxx-Xxx. 0
00000 Xxxxxxx
Licensee
'1 Contract Rights
The Licensor has all rights to an invention known as the Concrete Recycling
System (BRS-Compact).
Licensor has applied for patents for the BRS-Compact at the European Patent
Office and internationally. Both patent applications were filed on September 3,
19997 under numbers 19738471.4. Further, a patent on the process has been
applied for at the German Patent Office under file number 197 23 687.1.
'2 Know-how
The Licensor is in possession of extensive Know-how regarding the invention
described in ' 1.
In particular Licensor has complete construction plans for the Concrete
Recycling System.
The production plans required for the erection of a prototype are complete and
have already been delivered to Licensee.
'3 Grant of Rights
The Licensor grants to Licensee a license for the exclusive world-wide rights
for the production of the BRS-Compact and use of the Know-how s well as the
right to sell the BRS-Compact. Excluded from the license are America and Asia.
In these areas the Licensor may grant additional exclusive licenses however,
ENTECS has a right of first refusal on exclusive licenses for America and Asia.
Licensor is obligated to take the steps necessary to protect the exclusivity on
ENTECS=s license in his negotiations with other potential licensees. Licensee
agrees not to sell any BRS-Compacts to customers in America or Asia.
Licnesor shall make all documentation and Know-how available to Licensee that he
has not already provided to Licensee.
Licensee shall only give customers in its territory access to the Know-how.
The Rental Term begins on September 1, 1997 and will continue until terminated.
'4 Cooperation
In order to transfer the Know-how to Licensee, Licensor agrees to make himself
available to Licensee pursuant to a separate agreement.
'5 Number of Products and Prices
The Licensee agrees not to produce more BRS-Compacts that it projects it can
sell within 6 months. These projections are to be based on the number of orders
received during the previous two calendar quarters.
'6 Future Development of the BRS-Compact
The Licensor shall continue to refine and develop the BRS-Compact to compete
with developments in similar products manufactured by the competition.
Licensor will make all future developments, new Know-how and test results
available to Licensee. The Licensee shall always have access to the
documentation for the product.
If future developments for the Product become protected by copyright, trademark
or patent, the Licensor agrees to make these developments available to Licensee
under '1 of this Agreement at no additional cost.
The Licensee will likewise work on refinements and improvements to the Product.
Any Know-how that it develops shall be made available to Licensee at no
additional cost. Licensee further agrees to make any Know-how or other protected
information developed for the Product available to Licensees in other
territories at a reasonable cost.
If the parties cannot agree on the reasonableness of cost, disputes shall be
resolved by and expert appointed by the Industry and Trade Chamber for the
District of Munich or Stuttgart pursuant to BGB ' 317.
If patentable inventions are discovered as the result of joint research and
testing activities conducted by both the Licensor and Licensee involving the
Product, the Licensor shall have the sole right to apply for the patent on such
inventions. Subparagraph 3 of this section 6 shall apply to the patents
mentioned here. Any compensation owed to Licensee=s employees pursuant to the
Employees Invention Law for such jointly discovered inventions shall be paid by
the Licensor as long as the intellectual property rights are recorded in his
name.
The Licensor shall guarantee via contractual agreements with other Licensee=s
that any patents of other Know-how they may develop regarding the Product shall
be made available to him for a reasonable fee.
' 7 License Fees
For the grant of the Know-how, Licensee shall pay Licensor a flat fee of DM
500,000 plus value added tax. Of that amount the Licensee acknowledges he has
already been paid DM 286,250.00. The balance will be paid as follows:
DM 150,000 at execution of this agreement.
The remaining DM 138,750 in two installments of DM 69,375 shall be due on
October 31, 1997 and on November 11, 1997.
In addition, Licensee shall pay Licensor an royalty based on the net sales price
on all Products sold. The royalty shall be 6% of he net turnover plus value
added tax. These royalties shall be accounted for on a monthly basis. The
royalties shall be paid within thirty days after the accounting in rendered.
The Licnesor shall have the right to a minimum annual royalty afer 12
BRS-Compact systems have been sold which shall be based on the cost of the
patents.
If royalty payments are paid late, Licensee shall pay a late fee equaling the
published discount rate of Deutsche Federal Bank plus 5% on the amount owed.
The Licensee must give Licensor a list of all Products sold and Licensor or his
accountant shall have the right to inspect Licensee=s books and records which
relate directly or indirectly to the Products. Any dispute shall be resolved by
an expert appointed by the Industry and Trade Chamber.
The grant of sublicenses shall be controlled by the terms of paragraphs 1 and 2
of this section.
' 8 Defense Cooperation
The Licensee and Licensor will jointly proceed against anyone who may infringe
on the patents or Know-how. If only one party wants to pursue legal action for
the infringement of the patents and know how the other party shall be obligated
to participate in the action. Each Party shall bear half of the defense costs,
damages recovered from third parties or other settlements.
If the Licensee is sued by a third party in connection with the operation or
sale of the Product for damages for infringement or for injunctive relief,
Licensee shall immediately inform Licensor of the suit and will defend the suit.
If this patent rights are attacked by a third party, the Licensor shall defend
the suit. The Licensor shall inform the Licensee of the action and the Licensee
shall have the option to participate in the defense of the matter. Both Parties
will share in the costs.
The Licensee will not attack the Patents directly or indirectly.
' 9 Confidentiality
The Parties agree they will keep the information exchanged pursuant to this
agreement confidential. This does not apply to information that must be
disclosed to third parties involved in the production of the Products or to end
users who have purchased the Products.
The Parties will take the steps necessary to ensure that their employees are
contractually bound to keep all proprietary information regarding the Products
confidential even after their employment ends.
Licensee is obligated to obtain similar confidentiality agreements with other
Licensors in other territories.
The obligations created herein shall survive this agreement. This provision
shall terminate at the latest two years after the contract is terminated and at
the earliest if the Licensee fails to exercise its right of first refusal. If
either party breaches this provision, liquidated damages in the amount of DM
100,000 shall be awarded against the breaching party.
'10 Term
The term of this agreement shall be at least 15 years and shall automatically
terminate when the patents expire. Licensee shall have a right of first refusal
for the purchase of the underlying license of the patents. This right of first
refusal can be exercised up to two years after the termination of this
agreement.
If the know-how and other technical advancements in the system becomes public
knowledge during the term of the agreement, this agreement shall serve as the
basis for a Patent usage and Trademark agreement. This agreement is valid even
if the Patent application is illegal or void. In this connection, this agreement
may be terminated within two months after a court order determines the patent to
be illegal or invalid.
The Agreement may be terminated for cause. The bases for termination for cause
are as follows:
The Licensee breaches this agreement in spite of warning as follows:
Fails to comply with all regulatory agency filings.
Sale of products governed by this agreement outside of the Territory.
Production and delivery of below standard products.
Production or sale of products that compete with the subject products.
Failure to pay license fees for more that six months.
Licensor fails to provide adequate funding to begin production and
marketing of the product.
The Licensor breached the contract in ways similar to those described above, or
fails to prohibit other Licensees from other areas from competing in Licensor=s
territory. In this case, the provisions of ' 7 1. Shall apply and the license
fees that have been paid shall be refunded in full.
If after three years from the date of this agreement the system development has
not progresses as per ' 1 and is not production ready, In this case, the
provisions of ' 7 1. Shall apply and the license fees that have been paid shall
be refunded in full.
If the products to be produced under this agreement may not be manufactured
because of a regulatory or court order prohibiting the production.
In each case where the contract may be terminated, the Licensee may sell any
product already produced or in production for a period of six months after the
contract is terminated as long as the license fees are paid.
Upon termination of this agreement, the Licensee is obligated to return all
documentation and other proprietary information and copies thereof to Licensor
irrespective of the fact that some of the information or know how may be in the
public domain. Any know-how that is still confidential must be returned to
Licensor and may not be used by Licensee.
' 11 Miscellaneous
The Licensor is obligated to provide technical assistance to Licensee to the
extent it is needed for the application of the licensed process and to the
extend personnel are available.
The Licensor is liable to the technical feasibility and usability of the
invention. The Licensor is not liable in particular for the economic feasibility
for the finished product stage of the invention.
The Licensee may grant sub-licenses on a peace-by-peace basis. Other agreements
will require the approval of the Licensor.
The licensee is obligated to inform the Licensor of any sub-licenses it may
grant to third parties and to grant Licensor access to those sub-license
agreements.
The Licensor will participate as a consultant in the establishment of a
sale network for the product.
The Licensee is obligated to maintain the integrity of this agreement and any
amendments thereto by filing any applications for improvements to the system
with appropriate authorities and agrees not to transfer proprietary information
to third parties.
' 12 Choice of Law
German law shall apply to this agreement.
' 13 Arbitration
Any dispute arising from this agreement shall be resolved by binding
arbitration as described in the attached arbitration agreement.
' 14 Integration Clause
Any changes to this agreement must be made by the parties in writing. If any
clause or portion of this Agreement is deemed to be invalid or void, the
remaining terms shall remain valid and binding. The invalid clause shall be
replaced by language that takes the economic interests of both parties into
consideration.
Dated: September 11, 1997
Baldham
----------------------- ------------------------------
ENTECS Inc. Xxxxxx Xxxxxxxxxx
Document # 19
ARBITRATION AGREEMENT
Between
ENTECS, Inc.
000 00xx Xxxxxx
Xxxxxx, Xxxxxxx 00000 XXX
Represented by it European Office
Xxxx-Xxxx-Xxx. 0
00000 Xxxxxxx
and
Xx. Xxxxxx Xxxxxxxxxx
Xxxxxxxxxxxxxxxxxx. 0/0
00000 Xxxxxxxxxxxxx
All disputes that arise from or relate to the License Agreement between the
parties dated September 11, 1997 will be resolved by binding arbitration.
The arbitration tribunal will be constituted as follows: the Plaintiff shall
select one arbitrator. The defendant shall select an arbitrator within one week
after he received notice of the first party=s selection.
If the defendant fails to name an arbitration within one week, the second
arbitrator will be selected by the Industry and Trade Chamber for Munich and
Oberbayern or Stuttgart.
The arbitrators shall select a chairman. If they are not able to agree on a
chairman within 2 weeks, the chairman shall be selected by the Industry and
Trade Chamber for Munich and Oberbayern or Stuttgart.
Baldham, September 11, 1997 Baldham, September 11, 1997
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ENTECS, Inc. Xxxxxx Xxxxxxxxxx
