Option to Acquire Exclusive License Agreement
THIS AGREEMENT made this 28th day of August, 2002, between the RECYCLED
ENERGY LLC, an Oklahoma Limited Liability Company (hereinafter REL), having a
place of business at 000 Xxxx Xxxx, Xxxxx 000 Xxxxxxx, XX 00000 Xxxxxx X. Xxxxxx
and H. Xxxxx Xxxxxx, individuals residing in the State of Oklahoma (hereinafter
"INVENTORS") and SAFE TIRE DISPOSAL CORPORATION, a Delaware Corporation, whose
address is 000 Xxxx Xxxx, Xxxxx 000 Xxxxxxx, XX 00000 (hereinafter "Safe Tire").
WHEREAS, REL represents that INVENTORS have agreed to and will assign
to Safe Tire all of each's rights in the hereinafter termed "Licensed Subject
Matter" which comprises certain inventions, improvements and discoveries from
which REL and the INVENTORS have made application for United States Patent, and
know how and technical information all relating to a method and system for
generating usable products, namely, oil, gas, carbon black, and steel, among
others, from scrap tires.
WHEREAS, INVENTORS and REL possess licenses, technical information,
know how and expertise in the field of said Licensed Subject Matter and in the
practice thereof; and
WHEREAS, Safe Tire desires to evaluate the commercial utility of the
Licensed Subject Matter before entering into a license agreement with REL.
IT IS THEREFORE AGREED:
(1) Option Agreement - REL hereby grants to Safe Tire an option, good
for eighteen (18) months from and after the date of this agreement, to make
effective the license agreement set forth in Sections 10-24 inclusive, hereof.
(2) Disclosure - During the next eighteen (18) months, and at times
mutually convenient to Safe Tire and to INVENTORS, INVENTORS and REL shall make
a full disclosure of the Licensed Subject Matter to those employees and agents
of Safe Tire who shall be designated by Safe Tire as its representatives.
INVENTORS shall explain in full detail the system, apparatus and methods of the
Licensed Subject Matter, and shall answer to the best of each's ability all
questions asked by Safe Tire's representatives which may advance their technical
understanding of the Licensed Subject Matter. INVENTORS shall submit to Safe
Tire's representatives all writings relating to the Licensed Subject Matter, and
shall permit them to copy such writings. INVENTORS shall furnish upon request
additional information and assistance reasonably necessary to enable Safe Tire's
representatives to understand and evaluate the novelty and utility of the
Licensed Subject Matter. All reasonable expenses incurred by INVENTORS in
furnishing the assistance and information required under this paragraph shall be
paid by Safe Tire, but Safe Tire is not to compensate INVENTORS for each's time.
(3) Warranty - REL and INVENTORS hereby covenant and warrant that
together they have the exclusive worldwide right to use the Licensed Subject
Matter, and that it has the full right and authority to execute this agreement.
(4) Confidentiality - During the period of this option Safe Tire shall
receive and hold in confidence all information required by this agreement and
take all reasonable measures to prevent the disclosure of same to others and
shall diligently investigate the nature and use of the Licensed Subject Matter
to determine whether to exercise the option granted herein.
(5) Return of Documents - Confidentiality - Reports - If the option
granted by Paragraph 1 is not exercised, the duties of Safe Tire shall be as
follows:
(a) It shall return promptly all writings submitted by
INVENTORS and REL to Safe Tire's representatives but it may retain
copies of such writings for its records.
(b) It shall instruct its representatives to hold in
confidence for three years from the date of this agreement all
information received from INVENTORS and REL or until such information
is available to the public generally or to its competitors.
(c) It shall make available to REL and INVENTORS the results
of its investigation including any opinions regarding the Licensed
Subject Matter, but not including any legal opinion as to the Licensed
Subject Matter.
(6) Obligations - If the option granted by Paragraph 1 is not
exercised, REL and INVENTOR shall be under no obligation to Safe Tire.
(7) Consideration - In consideration of this agreement, Safe Tire
agrees, upon execution, to pay to REL and INVENTORS the sum of $10.00, the
receipt of which is hereby acknowledged by REL and INVENTORS. This payment shall
not reduce or affect the payments due to REL under the license agreement
referred to in Paragraph 1 if and when the agreement becomes operative.
(8) Notices - Any notice to be given pursuant to the terms of this
agreement shall be in writing addressed as follows:
If to Safe Tire:
000 Xxxx Xxxx, Xxxxx 000 Xxxxxxx, XX 00000
If to REL or INVENTORS:
000 Xxxx Xxxx, Xxxxx 000 Xxxxxxx, XX 00000
(9) Exercise of Option - Safe Tire may signify its exercise of this
option at any time during said option period by notifying REL and INVENTORS in
writing of its exercise at the above address and by paying at such time to REL
the sum of $10.00 as advance minimum royalty, whereupon, and not before, the
provisions of Sections 10-24 inclusive hereof shall without further action by
the parties become effective.
(10) Exclusive License Agreement - REL and INVENTORS, subject to the
terms of this agreement, hereby grant unto Safe Tire an exclusive, worldwide
license to make, use and practice Licensed Subject Matter.
(11) Sublicense - Safe Tire may authorize or sublicense another or
others to perform any act or acts which Safe Tire is authorized to perform under
the license herein granted, provided that Safe Tire shall remain primarily
liable to REL for the performance of all of Safe Tire's obligations hereunder,
including but not limited to payment of royalties to REL with respect to all
sales, use or manufacture authorized as aforesaid by Safe Tire.
(12) Royalty - Safe Tire shall pay to REL 1% of the gross cash receipts
per year from sales of the products produced from the use of the Licensed
Subject Matter, it being understood that such payment represents payment
required by REL to a third party for technology acquired by REL for certain
aspects of the Licensed Subject Matter.
Net sales shall be construed to mean the invoice for sales of products
produced by the Licensed Subject Matter with shipping and insurance included on
the invoices, less freight and customary trade discounts.
(13) Royalties to Be Paid Monthly - Safe Tire shall send to REL a copy
of each invoice that Safe Tire issues for sales of products using the Licensed
Subject Matter no later than the 15th day of each month. Safe Tire shall send to
REL a statement of all Sales of Safe tire's products using the Licensed Subject
Matter, broken down by customer and account together with a computation of the
sum due to REL on these sales. When payment is made on any invoice, REL shall be
paid within fifteen (15) days after the first of the next calendar month
following the payment with reference to the invoice on which payment is made. If
a check contains funds from payment from more than one (1) invoice, a statement
shall accompany the check referencing the invoice on which payment is made and
the amount paid on each invoice.
(14) Records - Safe Tire shall maintain complete and accurate books and
accounts showing the receipts from such sales. REL or its duly authorized
representative shall have the right, at reasonable business hours and upon at
least ten days notice to Safe Tire, to examine the books and records of Safe
Tire insofar as they pertain to royalties due REL and expenses deductible from
such royalties.
(15) Improvements - If Safe Tire or any of its officers, agents or
employees devise or acquire any improvements in the Licensed Subject Matter,
Safe Tire shall have the right in the name of Safe Tire to apply for Letters
Patent to cover such improvements in all countries of the world.
(16) Term - This agreement shall continue for a period of fifty years
from the date hereof or for the full term of the last to expire United States
patent granted for the Licensed Subject Matter.
(17) Foreign Patents - Safe Tire shall advise REL of the foreign
countries in which it wishes to seek protection for the invention within eight
(8) months of the applications in the United States and shall be obligated to
pay all costs and fees pertaining to the filing and maintenance of the
corresponding foreign applications. REL may file in additional countries at its
expense. In any event REL agrees to cooperate with Safe Tire and such patent
applications will become a part of the Licensed Subject Matter.
(18) Issuance of Patents - Upon issuance of any patents or other final
conclusions in the prosecution of the applications and of any divisions or
continuations, REL shall immediately inform Safe Tire transmit copies of any
patents granted.
(19) Termination - This agreement may be terminated by Safe Tire after
the first year of the agreement by giving six (6) months advance written notice
to REL.
(20) Defaults - In the event that either party to this agreement shall
be in default of, or breach of any condition or covenants of the agreement, the
aggrieved party may, at its election, service notice in writing upon the party
considered to be in default of its intention to terminate this agreement on the
expiration of sixty (6) days from the date of such notice, provided, however,
that if the party considered to be in default shall within thirty (30) days from
the date of such notice make good the default or breach complained of,
termination of the agreement shall be avoided.
(21) Bankruptcy - It is agreed that in the event Safe Tire shall make
an assignment for the benefit of creditors or be declared bankrupt by reason of
voluntary or involuntary bankruptcy proceedings, all rights herein granted may
at the option of REL terminate forthwith, and the entire right, title and
interest in and to the license herein granted shall thereafter revert to REL
without requiring any action on its xxx.
(22) Infringement Litigation - REL and Safe Tire mutually shall have
the right to institute action for infringement of any patents or patent rights
on the Licensed Subject Matter hereof, it being agreed that in any such suit
that parties mutually agree to institute, the suit shall be instituted in the
name of both parties, and that both parties shall contribute equally to the
expense of any such suit or suits and shall participate equally in its
recoveries, if any, whether by judgment, award, decree or settlement. It is
further agreed that REL shall exercise control over such litigation, provided,
however, that Safe Tire may, if it so desires, be represented by counsel of its
own selection.
In the event the parties do not mutually agree to institute any such
action, either party hereto may institute such action and join the other as
party plaintiff in such suit, the party so instituting the action shall defray
the entire expense of such litigation and shall be entitled to retain the entire
amount of the recoveries, if any, by way of judgment, award, decree or
settlement resulting therefrom.
In the event that REL declines to institute action or participate
equally in action against infringement, if such infringement is substantial in
relation to the national market for licensed product(s) in any one country, then
Safe Tire may suspend payment of royalties for sales in such country during the
continuance of such substantial infringement.
(23) Governing Law - This agreement shall have been deemed to have been
made and entered into pursuant to the statutes and laws of the United States,
and the laws of the State of Oklahoma.
(24) Binding Effect - This agreement shall be binding upon and inure to
the benefit of each of the parties hereto, their successors and assigns. Safe
Tire agrees not to assign this agreement without the prior consent of REL.
(25) Termination - Termination of this agreement shall not relieve
either party of any obligations owing to the other at the time of such
termination.
IN WITNESS WHEREOF, the parties have executed this agreement.
Safe Tire Disposal Corporation,
/s/ C. Xxx Xxxxxxx
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By: C. Xxx Xxxxxxx, Controller
RECYCLED ENERGY LLC
/s/ H. Xxxxx Xxxxxx
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By: H. Xxxxx Xxxxxx, Principal
INVENTORS
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, individually
/s/ H. Xxxxx Xxxxxx
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H. Xxxxx Xxxxxx, individually
