LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "License Agreement"), dated as of the 20th
day of February, 2003, by and between Titan Technologies Incorporated, having
its principal place of business at 3206 Xxxxxxxxxx N.E., Albuquerque, New Mexico
("Titan" or "Licensor"), and United States Recycling, LLC, a corporation
organized and existing under the laws of Florida ("USR" or "Licensee"), with
principal executive offices at 0000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx 00000 and
having a mailing address of X.X. Xxx 000000, Xxxxxx, Xxxxxxx 00000.
RECITALS
A. Titan is the owner of all right, title and interest in the intellectual
property described more completely below (the "Technology");
B. Licensee is desirous of acquiring the right to use the Technology in
construction and operation of facilities within the Territory
(as defined below), including sale of facilities constructed by Licensee;
C. Titan and USR have entered into an Agreement dated February 20,
2003 (the "Agreement"), which by this reference is incorporated into this
Licensing Agreement. The Agreement provides for construction of a commercial
Plant (the "Plant") in the Territory using the Technology.
D. Titan is willing to grant to Licensee a license to use the Technology in
connection with the manufacture, sale and operation of the Plant using the
Technology, all on the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises, the mutual promises
set forth below and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Titan and Licensee hereby agree as
follows:
1. Definitions.
The following definitions shall be applicable throughout this Agreement:
A. The term "Territory" shall be defined under this Licensing Agreement as
follows:
(i) The State of Texas;
(ii) Austria; and
(iii) Brazil.
B. The term "Affiliate" of any person or entity shall mean and include any
person, corporation or other entity controlling, controlled by or under common
control with, such person or entity.
C. The term "Technology" shall mean any and all information, patent
applications, know-how, show-how, substances, recipes, formulas, compositions,
devices, apparatuses, techniques, notes, books, writings or other documents,
samples, prototypes, models, trade secrets, methods, practices, processes,
process parameters, research and development information, software, algorithms,
flow charts, data flow diagrams, state transition diagrams, contact diagrams,
technical plans and designs, data, blueprints, inventions, customer and supplier
lists, price lists, marketing plans, and other business and financial
information, including improvements, changes, developments, and modifications
thereto, which relate to the Invention or Inventions as the same relates to tire
recycling. Without limitation, the term "Technology" includes the inventions
described in and covered by U.S. Patents Nos. 5,714,043 and 5,871,619 (copies of
which have been sent to Licensee).
D. "Field of Use" shall mean use of the Invention or Technology or Patent
Rights for recycle of tires of whatsoever origin.
E. "Force Majeure" Neither party shall be liable in damages or have the
right terminate this Agreement for any delay or default in performing hereunder
in the event its performance is delayed by an Act of God, including but not
limited to a natural disaster such as an earthquake, hurricane, tornado or
flood, or a war, insurrection or any other cause beyond the reasonable control
of the party whose performance is affected.
F. "Invention" or "Inventions" means the Titan process and processes for
recycle of tires, together with equipment, reagents and proprietary knowledge
utilized to employ the Technology and the products and processes related to or
included therein.
G. "Licensed Marks" means all service marks and trademarks (but not trade
names) of Licensor relating to the Invention, Licensed Processes or Licensed
Products, including any and all service marks and trademarks which may be
established from and after the date of this Licensing Agreement.
H. "Licensed Processes" shall mean the processes claimed in or utilizing
Patent Rights or some portion thereof, together with all proprietary knowledge
related to use of the Invention or Inventions and any licenses or sublicenses
which Licensor has acquired or develops the right to use in connection with the
Technology.
I. "Licensed Products" shall mean products related to Titan's tire
recycling technology, that include:
(i) claimed in Patent Rights; or
(ii) made in accordance with or by means of Licensed Processes;
or
(iii)made utilizing any substance, device, apparatus, method, or process
which embodies or uses the Technology or Invention, including improvements; or
(iv) are protected by Patent Rights; which in any such case is
used or useful in the Field of Use.
J. "Patent Rights" shall mean United States Patent Numbers 5,714,043 and
5,871,619 issued by the U.S. Patent and Trademark Office on February 3, 1998 and
February 16, 1999, respectively, and applications which may be filed in the
United States and all foreign countries, and any provisional, divisional,
continuation, continuation-in-part, and substitute applications thereof, and any
patents issuing thereon and reissues, reexaminations, and extensions thereof,
which relate to the Invention or Technology.
2. Grant of License; Term.
A. Titan hereby grants to Licensee, and Licensee accepts, the right, license and
privilege to use the Technology in connection only with the design, manufacture,
construction and operation of the Plant, including the right to sell and
distribute Licensed Products and to practice Licensed Processes.
B. The term of this Agreement shall commence as of the date hereof and shall
terminate as follows:
If the conditions set forth in Article lI.A(i) have been satisfied (the
Initial Plant ifn Bay city, Texas is completed on schedule including any
extensions), the License shall be exclusive within the State of Texas, Brazil
and Austria for a period of Five (5) years. Thereafter the term of the License
shall be extended in the portion of the Territory in which a subsequent plant is
completed for an additional period of five (5) years from the date of completion
of said subsequent plant. The License will terminate as to any portion of the
Territory in which a plant is not completed within any five (5) year period
after commencement of this Agreement or completion of a subsequent plant within
any five (5) year period thereafter, unless this Licensing Agreement is earlier
terminated by Licensor pursuant to the provisions of Articles 10 and 11 below.
C. The Licensee may not assign, transfer, sublicense or otherwise convey any of
the rights granted to Licensee hereunder or any interest therein, by operation
of law or otherwise, to any person, firm, corporation, or entity without the
express prior written consent of Titan; however, the foregoing provision shall
not restrict the Licensee's ability to grant a sublicense to any affiliate of
the Licensee that constructs the Plant or to the owner of the Plant, provided
that:
(i).Licensee shall continue to remain primarily liable, as a guarantor of
payment and performance, for all obligations of any assignee or
sub-licensee; and
(ii). Such assignee or sub-licensee agrees in writing to be bound by the
terms hereof.
(iii) Licensee or Sub-licensee shall use the Technology only in the manner
set forth in the Agreement and shall use the Technology only in
connection with the design, manufacture, construction and operation of
the Plant. Licensee covenants that the Plant will be designed,
constructed and operated in accordance with all applicable
environmental standards of the State of Texas or, as applicable,
Austria or Brazil.
3. Samples; Products
A. Licensor may request, not more often than once each calendar month, that
Licensee present to Licensor at its principal place of business in Albuquerque,
New Mexico, at Licensee's sole cost and expense, a sample of each Licensed
Product being manufactured or sold by or on behalf of Licensee.
4. Inspection
A. The duly authorized representatives of Licensor shall have the right, upon
reasonable advance notice to Licensee and during normal business hours, to
inspect all facilities utilized by Licensee, its contractors and suppliers, in
connection with the design and construction of plants using the Technology and
the manufacture, sale, storage or distribution of products pursuant hereto. The
rights of Licensor set forth herein shall be in addition to (and not in conflict
with) the provisions of any other Article of the Agreement.
B. Licensee shall market and sell Licensed Products produced at the Plant in
accordance with all applicable laws.
5. License Fee and Production Royalty Payments.
A. With respect to the Initial Plant (as defined in the Agreement), Licensor
shall pay Licensor a license fee of $1,000,000 as provided in Article I of the
Agreement. With respect to each Subsequent Plant (as defined in the Agreement)
Licensee shall pay Licensor a license fee of $1,000,000 as defined in Article II
of the Agreement. With respect to operation of the Initial Plant and Subsequent
Plants, production royalties shall be payable to Licensor as provided in Article
4.C below.
B. All payments required hereunder shall be made in United States dollars.
Licensee agrees to pay Licensor production royalties with respect to the
Initial Plant, as follows:
Production royalties shall commence beginning the month in which net
revenues received from sale of all products and revenue generated by the Initial
Plant exceed cash operating costs (including interest, but excluding general and
administrative expenses and repayment of principal on any of USR's debt), also
called hereinafter "Positive Cash Flow".
Production royalties for the Initial Plant shall be $4.00 per ton of
tires fed into the plant for processing, payable quarterly by January 30, April
30, July 30, and October 30 for the preceding quarter for every month after the
Initial Plant achieves Positive Cash Flow.
C. Production royalties for each subsequent plant shall be paid in equal
installments of $100,000 every six months commencing on the tenth day of the
seventh month after each said subsequent plant has commenced operation and a
like payment of $100,000.00 being due and payable on the tenth day of the month
for each succeeding six month period thereafter, except that the production
royalties for each subsequent plant for which the average daily feed rate of
tires for that subsequent plant drops below 90 tons of tires per day for any six
month period shall be $75,000.00, which $75,000.00 payment shall be payable on
or before the tenth day of the seventh month after each six month period of
operation after commencement of operation of the subsequent plant during which
it its average daily feed rate of tires for drops below 90 tons of tires per day
for said six month period. With respect to Subsequent Plants, the production
royalty shall be determined in accordance with Article II.A.(iii) of the
Agreement.
6. Infringement.
A. Licensee shall promptly notify Licensor of any infringement of the Technology
whenever such infringement shall come to the Licensee's attention.
After receipt of such notice from Licensee, Licensor shall advise Licensee of
its decision either to elect to take such action to stop such infringement or
act as Licensor may deem necessary in which event:
(a) Licensee shall cooperate fully with Licensor in connection
therewith, and, if so requested by Licensor, shall join with Licensor as a party
to any action brought by Licensor for such purpose;
(b) Licensor shall have full control over any action taken, including
without limitation the right to select counsel, to settle on any terms it deems
advisable in its discretion, to appeal any adverse decision rendered in any
court, to discontinue any action taken by it, and otherwise to make any
decision in respect thereto as it in its discretion deems advisable, and
(c) Licensor shall bear all expenses connected with the
foregoing; or elect to have Licensee take control over the action, in which
event:
(i) Licensor shall cooperate fully with Licensee in connection therewith,
and, if so requested by Licensee, shall join with Licensee as a party
to any action brought by Licensee for such purpose;
(ii)Licensee shall have control over any action taken, provided that
Licensor shall not be liable for any settlement effected without its
express prior consent; and
(iii) Licensee shall bear all expenses in connection therewith and shall
reimburse any payments, including, without limitation, any settlement
payments, made by Licensor in connection therewith promptly upon
request.
(iv)Any recovery as a result of any such action shall belong solely to
Licensor, except to the extent that such recovery represents damage
specifically allocated to Licensee, in which event such specified
recovery shall be paid to Licensee.
7. Additional Covenants and Agreements
A. Licensee shall have no right to terminate this License Agreement or to
be released, relieved, or discharged from its obligations hereunder in the case
of the following:
(i) Any default, misrepresentation, negligence, gross negligence,
misconduct, willful misconduct or other action or inaction of any kind
by Licensee;
(ii)The insolvency, bankruptcy, reorganization or cessation of existence,
or discharge or forgiveness of indebtedness of Licensee;
(iii) The invalidity, unenforceability, impossibility or illegality of
performance of this License Agreement for any reason;
(iv)Any defect in the title to, or any lien or other restriction of any
kind upon the use of, any of the Licensed Marks for any reason
whatsoever to the extent such defect, lien, or other restriction is the
result of any actions taken or not taken by Licensee;
(v) Any restriction, prevention or curtailment of or interference with the
use of any of the Licensed Marks for any reason whatsoever to the
extent such restriction, prevention, curtailment or interference is the
result of any actions taken or not taken by Licensee; and
(vi) Any law now or hereafter in force.
8. Patents
A. Without otherwise restricting Licensor from filing and prosecuting, at its
own expense and cost, further domestic and foreign patent applications
corresponding to the Licensed Products and Licensed Processes and maintaining
any patents resulting therefrom, Licensor, from time to time when so requested
by Licensee, shall (to the extent permitted by the patent law of the country in
question) file, or do all things reasonably necessary to enable Licensee to file
in the name of Licensor, patent applications in such country or countries
covering the Invention, Technology, Licensed Products, and Licensed Processes as
shall be designated by Licensee. The filing, prosecution, and maintenance of any
such patent applications or patents, the filing of which shall be so requested
by Licensee, shall be at the sole expense of Licensee.
B. Licensee shall have the right, at any time and upon notice to Licensor of not
less than one (1) month, to terminate the rights and obligations conferred on
it, with respect to the prosecution and/or maintenance of any patent
applications or patents specified in such notice, provided that any such
termination shall not terminate Licensee's obligation to pay any and all fees,
costs, or expenses theretofore incurred by Licensee in connection with such
prosecution and/or maintenance. In any such event, Licensor shall have the
right, at its option and at its sole expense, to continue such prosecution or
maintenance through patent attorneys of its own choice.
9. Grant Back and Cross-License.
If Licensee develops improvements to the Licensed Products, Licensed
Processes, or Technology, Licensee shall be required to license such
improvements to Licensor and Licensor shall be entitled to sublicense such
improvements to other licensees or sub-licensees not covered by this License
Agreement. The rights of Licensor with respect to such improvements shall be on
a royalty-free basis, and Licensee shall execute such documents as may be
reasonably required to perfect Licensor's rights hereunder, including
confirmation that Licensor is the owner of any such improvements.
10. Events of Default; Termination.
A. Each of the following shall constitute an event of default by Licensee under
this License Agreement:
(i) If Licensee shall breach in any material respect any of its obligations
under this License Agreement, and such default is not remedied within
thirty (30) days after written notice thereof from Licensor, unless
such default is not for the payment of money and is not capable of
being cured through Licensee's diligent and continuous effort within
thirty (30) days after written notice thereof, and Licensee (within
such 30 day period) immediately commences to cure such default, and
thereafter applies its best efforts to cure such default, and does in
fact cure such default within ninety (90) days of the initial notice of
default; or
(ii)If Licensee shall institute proceedings to be adjudicated a voluntary
bankrupt or insolvent, or shall consent to the filing of a bankruptcy
proceeding against it, or shall file a petition or answer seeking
reorganization or arrangement under any bankruptcy act or any other
similar applicable law of any country, or shall consent to the
appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of itself, or any of its property, or shall
make an assignment for the benefit of creditors, or shall be unable to
pay its debts generally as they become due, or shall cease doing
business as a going concern, or corporate action shall be taken by
Licensee in furtherance of any of the foregoing purposes; or
(iii) If an order, judgment or decree of a court having jurisdiction shall
have been entered adjudicating the Licensee a bankrupt or insolvent, or
approving, as properly filed, a petition seeking reorganization of
Licensee or of all or a substantial part of its properties or assets
under any bankruptcy act or other similar applicable law, as from time
to time amended, or appointing a receiver, trustee or liquidator of
Licensee and such order, judgment or decree shall remain in force,
un-discharged and un-stayed for a period of thirty (30) days, or a
judgment or lien for the payment of money in excess of $250,000 shall
be rendered or entered against Licensee and the same shall remain
un-discharged or un-bonded for a period of ninety (90) days or any writ
or warrant or attachment shall be issued or levied against a
substantial part of the property of Licensee and the same shall not be
released, vacated or bonded within ninety (90) days after issue or
levy; or
(iv)If Licensee shall fail to perform or observe any material term,
condition, agreement or covenant on its part to be performed or
observed pursuant to this License Agreement or the Agreement, including
any Confidentiality and Non-Circumvention Agreements executed or which
may in the future be executed in connection therewith, and such default
is not remedied within thirty (30) days after written notice thereof
from Licensor, unless such default is not for the payment of money and
is not capable of being cured through diligent and continuous effort
within thirty (30) days after written notice thereof, and the
defaulting party immediately commences to cure such default, and
thereafter applies its diligent and continuous best efforts to cure
such default, and does in fact cure such default within ninety (90)
days of the initial notice of default.
B. As used in this Agreement, the term "default" shall mean any condition, event
or state of facts, which, after notice or lapse of time, or both, would be an
event of default. If any event of default shall occur and be continuing,
Licensor may, by written notice to Licensee, in its sole discretion, forthwith
terminate this Agreement.
11. Effect of Expiration or Termination.
A. Upon any expiration or termination of this agreement:
(i) All rights of Licensee hereunder shall terminate and revert
automatically to Licensor, and neither Licensee nor any of its
receivers, representatives, trustees, agents, successors or assigns (by
operation of law or otherwise) shall have any right to manufacture,
exploit, advertise, merchandise, promote, sell, distribute or deal in
or with Licensed Products or Merchandise and Licensee and all of its
receivers, representatives, trustees, agents, successors or assigns (by
operation of law or otherwise) shall forthwith discontinue all use of
the Licensed Marks and any variation or simulation thereof, or any xxxx
confusingly similar or likely to create confusion therewith, and all
references thereto or hereto, and all designs, Samples and labels
provided or employed hereunder, and all designs, Samples and labels
provided or employed hereunder, including any modifications or
improvements thereof and any patents, trademarks, copyrights, trade
names and other proprietary rights in connection therewith, and
Licensee hereby irrevocably releases and disclaims any right or
interest in or to any and all of the foregoing; and
(ii)Licensor shall forthwith have the unrestricted right to manufacture,
advertise, merchandise, promote, sell and distribute Licensed Products
directly or through others, and to grant licenses with respect to
Licensed Products and the Licensed Marks.
12. Insurance.
Licensee has obtained, and shall maintain at its own expense in full
force and effect at all times during which the Licensed Products are being sold
and used, with an reasonably acceptable insurance carrier, products liability
insurance policy with limits of liability customary in the industry. Such
insurance shall be for the benefit of and shall name as co-insured Licensor, its
affiliates and subsidiaries, and their respective officers, directors,
controlling persons, successors in interest and assigns, and shall provide for
at least thirty (30) days' prior written notice by the carrier thereof (each an
"Insurance Notice") to Licensor and Licensee of the cancellation or modification
thereof.
13. Representations and Warranties.
A. Licensee hereby represents and warrants to Licensor as follows:
(i) Licensee is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida.
(ii)Neither the execution, delivery nor performance of this Agreement by
Licensee will, with or without the giving notice or passage of time, or
both, conflict with, or result in a default or loss of rights under,
any provision of the Certificate of Incorporation or By-Laws of
Licensee is a party or by which it or any of its properties may be
bound.
(iii) Licensee has full power and authority to enter into this Agreement
and to carry out the transactions contemplated thereby in accordance
with its terms; the execution, delivery, and performance of this
Agreement by Licensee have been duly and properly authorized by all
necessary corporate actions; and this Agreement constitutes the valid
and binding obligation of Licensee enforceable in accordance with its
terms.
B. Licensor hereby represents and warrants to Licensee that:
(i) Licensor has full power and authority to enter into this Agreement and
to carry out the transactions contemplated thereby in accordance with
its terms; and
(ii)This Agreement constitutes the valid and binding obligation of
Licensor enforceable in accordance with its terms; and
(iii) No person has given Licensor notice in any form that such person
claims any infringement with respect to the Technology or any aspect
thereof, including (without limitation) Licensed Processes, Inventions
and Licensed Products.
(iv)If Licensee builds the plant to specifications and operates the plant
in accordance with the operational procedures specified by Xxxxxxxx
Xxxxxx and Titan, Titan warrants that a plant built and operated in
accordance with such specifications and operational procedures, will
process up to 100 tons of feed stock per 24 hour day.
14. Brokers.
Each of Licensor and Licensee hereby represents and warrants to the
other that it has not employed or dealt with any broker or finder in connection
with this Agreement or the transactions contemplated hereby, and agrees to
indemnify the other and hold it harmless from any and all liabilities
(including, without limitation, reasonable attorneys' fees and disbursements
paid or incurred in connection with any such liabilities) for any brokerage
commissions or finders fees in connection with this agreement or the
transactions contemplated hereby insofar as such liabilities shall be based on
the arrangements or agreements made by it or on its behalf.
15. Notices.
A. All reports, communications, requests or notices required by or permitted
under this Agreement to be in writing and shall be deemed to be duly given on
the date same is hand delivered, or when sent facsimile copier with receipt
confirmed, or when sent by an internationally recognized overnight courier
service, to the party concerned at the following address:
If to Licensor: 0000 Xxxxxxxxxx X.X.
Xxxxxxxxxxx, Xxx Xxxxxx XXX 00000
Attention: Xxx Xxxxxx, President
tel: (000) 000-0000
fax: (000) 000-0000
If to Licensee: 0000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Elan Sassoon, C.E.O.
tel: (000)000-0000
e-mail: xxxxxxxx@xxxxx.xxx
Any party may change the address to which such notices and
communications shall be sent by written notice to the other parties, provided
that any notice of change of address shall be effective only upon receipt.
16. Integration.
This License Agreement, together with the Agreement dated February 20,
2003 by and between Licensor and Licensee and the Confidentiality and
Non-Circumvention Agreement attached thereto, sets forth the entire agreement
and understanding between the parties relating in any way to the use of the
Technology, Licensed Marks, Licensed Process, Inventions and Licensed Products,
or to any other subject matter contained herein and merges all prior
discussions, arrangements and agreements between them.
17. Amendments.
This Agreement may not be amended or modified except by written
instrument signed by each of the parties thereto.
18. Relationship of Parties.
Nothing herein contained shall be construed to constitute the parties
hereto as partners or as joint venturers, or either as agent of the other.
Neither party hereto, by virtue hereof, shall have the right or authority to act
for or to bind the other in any way or to sign the name of the other or to
represent that the other is in any way responsible for the acts or omissions of
the other.
19. Interpretation.
This Licensing Agreement has been negotiated and drafted by both parties in the
English language and Licensee acknowledges that it has been reviewed by legal
counsel of its choice, and that use of the English language (including use of
the English language in any arbitration proceedings as set forth below) does
not prejudice Licensee's understanding of the terms and conditions contained
herein. The headings given to the paragraphs of this Agreement are for the
convenience of the parties only and are not to be used in any interpretation of
this Agreement.
20. Severability.
In the event that any one or more provisions of this Agreement shall be
held invalid, illegal or unenforceable in any respect, the validity, legality or
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
21. Waiver.
No failure or delay on the part of either party in exercising any power
or right under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right to preclude any other or
further exercise thereof or the exercise of any other power or right. No waiver
by either party of any provision of this Agreement, or of any breach or default,
shall be effective unless in writing and signed by the party against whom such
waiver is to be enforced. All rights and remedies provided for herein shall be
cumulative and in addition to any other rights or remedies such parties may have
at law or in equity.
22. Arbitration and Governing Law.
This Agreement is governed by the laws of the State of New
Mexico. Any disputes concerning this Agreement shall be exclusively and finally
settled by arbitration in accordance with the provisions of the Uniform
Arbitration Act as in effect in the State of New Mexico with its venue lying in
Albuquerque, New Mexico, provided, however, that nothing contained herein shall
be deemed to restrict the right of Titan to seek other remedies in any
jurisdiction of its choosing in the event that any such dispute relates to
alleged violation of the Confidentiality and Non-Circumvention Agreement
attached to the Agreement as Exhibit C.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date and year first above written.
TITAN TECHNOLOGIES INCORPORATED
(LICENSOR)
By Xxxxxx X. Xxxxxx
---------------------------------
Title: President
---------------------------------
UNITED STATES RECYCLING, LLC
(LICENSEE)
By Xxxxxxx X. XxXxxxxxxx
---------------------------------
Title: President
---------------------------------
UNITED STATES RECYCLING, LLC
(LINCENSEE)
By Elan Sassoon
---------------------------------
Title: CEO
---------------------------------