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NONEXCLUSIVE LICENSE TO USE TECHNOLOGY
This Agreement is entered into by and between KTI Recycling, Inc., a
Delaware corporation ("KTI") and Oakhurst Technology, Inc. ("OTI"), a Delaware
corporation and a wholly-owned subsidiary of Oakhurst Company, Inc. on this
29th day of December, 1998.
Whereas, KTI holds a Canadian patent for treatment of scrap
Registration No. 1,136,594 for all right, title and interest in and to certain
inventions relating to cryogenic tire recycling operations (the "Technology"),
and the equipment in which the Technology is embedded will be referred to herein
as the "KTI Recycling System"; and
Whereas, on even date herewith, KTI has agreed to sell, and OTI has
agreed to purchase, a KTI Recycling System on the terms and conditions set forth
in that certain Equipment Purchase Agreement between the parties hereto (the
"Purchase Agreement"); and
Whereas, in connection with and as an integral part of the Purchase
Agreement, the parties wish to enter into this Nonexclusive License to Use
Technology;
Now therefore in consideration of One Dollar and other good and
valuable considerations, the receipt of which is hereby acknowledged, the
parties agree as follows:
1. Grant of License. Subject to the terms and conditions of this
Agreement, KTI hereby grants to OTI a nonexclusive license to use the Technology
in operation of the KTI Recycling System and to sell the tires processed or
produced thereby at OTI's place of business in Ford Heights, Illinois and at no
other location whatsoever.
2. Royalty Payments. (a) OTI agrees to pay KTI a royalty equal to $.007
for every pound of tires processed by OTI or any other party using the
Technology and/or the KTI Recycling System. The amount of royalties to be paid
by OTI pursuant to this Agreement shall be reported to KTI on a monthly basis
within fifteen (15) days of the end of each calendar month, and shall be
accompanied by a remittance of the royalty amounts shown by the report to be due
and a summary of the total royalties paid to date for that year.
(b) OTI shall use its best efforts to market and sell the tires
processed using the KTI Recycling System, and OTI agrees, for itself and its
affiliates, that it will not engage in the business of tire processing using any
system other than the KTI Recycling System, nor any technology other than the
Technology, with the exception of any modifications or substitutions to the KTI
Recycling System or the Technology that may be made available by KTI from time
to time. Affiliate means, with respect to any specified person, any other person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such specified person.
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(c) Any payments that are not paid on or before the date such payments
are due under this Section shall bear interest at KeyBank, National
Association's prime rate plus 1%, calculated on the number of days such payment
is delinquent.
3. Term. This Agreement shall continue in full force and effect for the
entire useful life of the KTI Recycling System, unless sooner terminated
pursuant to the terms of this Agreement.
4. Records and Inspection. (a) OTI agrees to keep and maintain suitable
business records, in accordance with generally accepted accounting practices,
with respect to all tires processed, distributed or manufactured by it
including, but not limited to the quantity and date recycled. OTI shall permit,
during regular business hours, upon one (1) day's prior written notice to OTI,
KTI or a firm of certified public accountants selected by KTI to examine and
take abstracts from relevant records of OTI such information as may be necessary
to determine compliance with this Agreement, including the proper amount of
royalties to be paid. OTI shall keep such relevant records for a period of five
years after the date of expiration or earlier termination of this Agreement.
Upon expiration or earlier termination of this Agreement for any reason, KTI
will have the right to a final audit of OTI's records to be conducted, at KTI's
option, by itself or by an independent certified public accountant selected by
it.
5. Disclaimer. Nothing in this Agreement shall be construed as a
warranty or a representation by either party as to the validity and scope of any
patents or the intellectual property embedded in or related to the Technology or
the KTI Recycling System.
6. Secrecy. (a) The Technology furnished by KTI is and will be revealed
to OTI in confidence and none of the Technology (whether or not furnished by
KTI) shall become the property of OTI or any customer or other third party
acting by, through or under it. None of the Technology shall at any time,
whether during the term hereof or thereafter, (i) directly or indirectly be
revealed by OTI to any person, firm, or corporation, or (ii) shall be directly
or indirectly be used by OTI except in the utilization of the KTI Recycling
System for the production of the tires processed during the term hereof, in each
case except with the express written consent of KTI. Nothing contained herein
shall not prevent disclosure of Technology which (1) OTI demonstrates was known
to OTI prior to receipt from KTI from a source other than KTI, Recovery
Technologies, Inc. or an affiliate of either, (2) which is or becomes part of
the public domain without any act or omission by OTI, any customer or any party
acting by, through or under it, or (3) which is acquired by OTI from a source
independent of KTI without violation of any right of KTI. OTI shall require its
employees and agents to hold the Technology in confidence during the term of
this Agreement and at all times thereafter, in all cases in accordance with
secrecy agreements acceptable to and expressly for the benefit of KTI. All
tangible forms of the Technology shall be marked or stamped as being
confidential and the property of KTI.
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(b) OTI recognizes that Technology may be disclosed by an inspection of
the KTI Recycling System or its use or operation. Accordingly, without
limitation of any of the foregoing, except for employees and agents of OTI who
are essential to the operation and servicing of the KTI Recycling System and who
shall have executed secrecy agreements as provided in Section 6(a) above, and
except for authorized representatives of KTI no person shall have access to the
KTI Recycling System.
7. Infringement, Other Rights. (a) OTI agrees to promptly notify KTI if
OTI receives notice of any claim that the use by OTI infringes on any patent or
other right of any person. KTI will have the right to deal with the situation as
it, in its sole discretion, deems best (including the right to direct the
conduct of any litigation). If KTI elects not to defend any action or, after
electing to defend such action, abandons such defense, then OTI shall have the
right to defend such action at its own expense and cost. In any event, and
irrespective of the handling of the defense of any such action, KTI shall have
no liability whatsoever, either during the term of this Agreement or thereafter,
in respect of any question or matter of patent infringement that may arise by
reason of OTI's use thereof, or for any damages, costs, or attorneys' fees
awarded against OTI, or for any costs or expenses incurred by OTI in connection
with any such infringement or alleged infringement or litigation.
(b) If OTI comes to know of any suspected infringement by any third
party of any patent or other right of KTI, OTI shall promptly notify KTI to that
effect. The decision whether to take any action against such suspected
infringement shall rest solely with KTI; if KTI elects to take such action, all
expenses in connection with such action shall be paid by KTI and all recovery
shall belong to KTI. If KTI elects not to take any such action, OTI shall have
no right to do so or to require KTI to do so.
8. New Developments. KTI shall have all right, title and interest in
all inventions and improvements developed by KTI or OTI during the term hereof
with reference to the KTI Recycling System, the Technology and/or the use
thereof, including all patent rights and the right to use and license others to
use the KTI Recycling System and the Technology. OTI from time to time will
deliver to KTI such documentation as KTI may request to evidence the rights
provided for herein, including such assignments and other instruments and
documents as KTI may require in connection with patent applications for
inventions to which such party has such rights.
9. Certain Responsibilities. It is understood that the KTI Recycling
System furnished by KTI hereunder will be in the possession of OTI and that the
use and operation of such equipment will be performed by employees or agents of
OTI. OTI shall be responsible for providing its employees and agents with all
necessary safety instructions and precautions with respect to the KTI Recycling
System and the use and operation thereof. Further, OTI shall protect, indemnify,
defend, and hold harmless KTI, its affiliates and its successors and assigns
from any and all liabilities, claims, losses, damages, costs, and expenses,
including attorneys' fees, arising out of or resulting from the KTI Recycling
System or related equipment furnished by KTI under this Agreement
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or the use or operation thereof, including, without limitation, personal injury
or death to any person and damage to the facilities or OTI or other damage to
property.
10. Termination for Cause. Either party may terminate this Agreement
upon the occurrence of any of the following:
(a) Upon or after the bankruptcy, insolvency, dissolution or winding up
of the other party;
(b) Upon or after the breach of any material provision of this
Agreement by the other party, if the breaching party has not cured such breach
within thirty (30) days after written notice thereof to the defaulting party;
provided however, that there shall be no cure period for a breach by OTI for the
provisions of Section 6 hereof nor shall there be any cure period for a breach
by OTI of its obligation to use the KTI Recycling System and the Technology
licensed pursuant to this Agreement only at OTI's business location in Ford
Heights, Illinois. In addition, KTI may terminate this Agreement upon OTI's
breach, not cured within any applicable cure period, of the Purchase Agreement.
(c) Termination of this Agreement shall not relieve the parties of any
obligation accruing prior to such expiration or termination. The provisions of
Sections 6 and 8 will survive the termination of this Agreement. Because the
award of monetary damages would be an inadequate remedy, in the event of a
breach or threatened breach by OTI of any of the provisions of Section 6 of this
Agreement, the Company shall be entitled to an injunction restraining OTI from
undertaking any such breach or threatened breach. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of damages
from OTI.
11. Arbitration. Any controversy or claim arising under or related to
this Agreement shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association before a single
arbitrator selected in accordance with those rules, and judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.
12. Export. In order to comply with the U.S. Export Administration Act
of 1979, as amended from time to time (the Export Act), each party hereby
certifies that no technology or information licensed from the other, and no
product thereof, will be made available or re-exported, directly or indirectly,
to any areas (a) outside the United States except in compliance with all
applicable laws and regulations of the Bureau of Export Administration in
accordance with the Export Act (the provisions of this clause shall be extended
in accordance with U.S. law or regulation), or (b) outside any country except in
compliance with all applicable laws of such country.
13. No Authority. It is expressly agreed that the parties hereto shall
be that of licensor and licensee and that the relationship between the two
parties shall not constitute a partnership or agency of any kind. Neither party
shall have the authority to make any
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statements, representations or commitments of any kind, or to take any action,
which shall be binding on the other, without the prior written authorization of
the party to do so.
14. Assignment. Neither this Agreement nor the KTI Recycling System may
be assigned or otherwise transferred by OTI without the written consent of KTI,
except that OTI may transfer the KTI Recycling System to a purchaser of
substantially all of its assets, provided (a) that such purchaser uses the KTI
Recycling System at OTI's Ford Heights, Illinois business location, (b) such
assignee shall provide evidence of the financial standing of the assignee that
demonstrates, to KTI's reasonable satisfaction, that OTI has a net worth and
financial condition at least equivalent to that of OTI at the time of
assignment, and (c) that OTI simultaneously assigns to such third party OTI's
obligations under this Agreement and that third party assumes, in writing, all
of OTI's obligations hereunder.
15. Notices. All notices given under this Agreement shall be in writing
and delivered personally or sent by registered or certified mail, postage
prepaid, return receipt requested, addressed to the party to whom such notice is
to be given, as follows:
(a) To KTI: KTI Recycling, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Tel: 000-000-0000
With copy to: Xxxxx Xxxxxxx, Esq.
The Pillsbury Center South
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Tel: 000-000-0000
(b) To OTI: Oakhurst Technology, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxx
Tel: 000-000-0000
With copy to: Xxxxx X. Xxxxxx, Esq.
00 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Tel: 000-000-0000
or to such other address and to the attention of such other person as the party
to whom such notice is given may have theretofore designated by notice to the
other party hereto. Any notice given in accordance with the foregoing shall be
deemed to have been given
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when delivered in person or, if mailed, on the second day next following the
date on which it shall have been deposited in the United States mails.
16. Severability Clause. Should any provision or clause hereof be held
to be invalid, such invalidity shall not affect any other provision or clause
hereof which can be given effect without such invalid provision.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New Jersey.
18. Captions. The captions to the sections of this Agreement are for
convenience only and shall not affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above mentioned.
KTI Recycling, Inc. Oakhurst Technology, Inc.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Its Senior Vice President Its Chairman and CEO
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