LICENSE AGREEMENT between TITAN TECHNOLOGIES INCORPORATED
Exhibit
10.23
between
TITAN
TECHNOLOGIES INCORPORATED
3206
Xxxxxxxxxx N.E. A1buquerque, New Mexico 87107
(hereinafter
referred to as “Titan”)
and
Ally
Investment, LLP
c/o
Xxxxx
X. Ally, M.D.
0000
Xxxxx Xxxxxxx Xxxx., Xxxxx 000
Xxxx
Xxxxxx, XX 00000
(hereinafter
referred to as “Ally”)
WITNESSETH:
Whereas,
TITAN is the owner of certain proprietary technologies (hereinafter collectively
referred to as the “Technology”) with respect to recycling of tires in order to
recover marketable oil, steel and carbon there from (but specifical1y excluding
any applications of the Technology with respect to waste products other than
tires); and
Whereas,
TITAN has previously authorized use of the Technology in tire recycling plants
located in xxx Xxxxxxxx xx Xxxxx (Xxxxx Xxxxx) and Taiwan and, in connection
therewith, has supervised
construction
and commissioning of such plants; and
Whereas,
Ally believes that it has preliminary financial arrangements in place for
construction and operation of a double train recycling plant in Port Xxxxxx,
Texas, at a feed rate of between 200 and 300 tons of tires per day per plant,
including satisfactory preliminary commitments for supply of tires at such
rate;
Whereas,
Ally has access to a site, building and infrastructure in each of Port Xxxxxx,
Texas and Philadelphia, Mississippi for a double train plant using the Titan
Technology at a rate of not less than
200
tons of shredded tires per day (“Plant”); and
Now
therefore, TITAN and Ally agree as follows:
I.
PLANT
LICENSE
A. Titan
from
and after the date that $1,600,000.00 is fully paid by Ally, grants to Ally
or
his assigns an exclusive license (the “License”) to utilize its technology
and patent for construction and operation of a recycling plant and to utilize
Titan’s Technology for the other recycling plants within the states of Texas,
Louisiana, Mississippi, and Oklahoma (the “Territory”) subject to the additional
conditions stated below. Ally shall have no ownership rights to the Technology
other than the right to utilize Titan’s technology in the Territory for the
construction and operation of one tire recycling plant utilizing Titan’s
technology and the right to build and operate additional plants in the Territory
on the conditions stated below. The License for the Plant shall commence
upon
the payment of $1,600,000.00 toward the licensing fee as stated in Paragraph
I.B. below by Ally, assuming that Ally has funding in place for construction
and
operation of the Plant and pays all other amounts under this License Agreement.
Design, permitting, financing, governmental approvals and commencement of
construction of the first plant must be completed (hereinafter called
“Commencement of Construction”) on or before March 1, 2007. If the
non-refundable initial License fee deposit of $100,000, which shall be applied
to the license fee for the first Plant, is not paid by Ally to Titan on or
before August 31, 2006, this Agreement and the License shall be and become
null
and void unless extended by mutual agreement in writing.
If
the
Plant is not commenced, completed and in operation by March 31, 2008, then
the
exclusive license fee for the Territory will become the property of Titan
and
the license for any plant(s) for which construction has not commenced will
terminate and any further obligation of Titan to Ally will cease. The
termination of the exclusive license or loss of
any
license to build a plant or plants will not affect the license granted to
Ally
for any plants built or commenced prior to March 31, 2008. If Ally has the
Plant
in operation prior to March 31, 2008, Ally will be granted the exclusive
license
for Titan’s Technology for the territory in perpetuity subject to payment of
Titan’s then applicable license and royalty fees for each subsequent plant.
B. The
Licensing Fee and royalties for each two train plant will be paid to Titan
in
accordance
with the following schedule:
|
(i)
|
Payment
of the Licensing Fee of $1,600,000.00 for each plant upon the date
Licensee designates a new location for construction of a plant
in the
territory and has financing to build the plant in place;
and
|
| (v) |
Production
royalties shall commence when each plant reaches a sustained capacity
of
200 tons of tires per day as determined by
Titan.
|
2
The
production royalties shall be 1.5% of gross revenues derived by Licensee
from
sale of all products generated from the technology and the Plant payable
quarterly by January 30, April 30, July 30, and October 30 for the preceding
quarter for every quarter after each plant reaches the ability to run a capacity
of 200 tons of tires per day as determined by Titan.
C. Ally
shall be
responsible for funding detailed engineering for each plant in consultation
with
Titan and Xxxxxxxx Xxxxxx. Ally reserves the right to use its selected
sub-contractors for certain elements of the construction process of each
plant,
subject to approval by Xxxxxxxx Xxxxxx.
D. Titan
agrees to provide two Titan technical personnel to be under the direction
of
Ally to provide such technical assistance as may be necessary or advisable
for
detailed engineering construction, commissioning and operations of each
plant,
including the period following execution of this Agreement until the Initial
Plant is completed and until each Plant has become fully operational. The
salaries and travel expenses of such technical personnel at any site outside
of
Albuquerque, New Mexico, shall be paid for by Ally on a current basis within
10
days after the end of any month during which Titan technical personnel
provide
services for Ally away from Titan’s Albuquerque office. For purposes of this
Agreement, the salaries payable by Ally for said technical personnel shall
be
based upon an annual salary of $80,000 per person plus applicable payroll
taxes
and Titan shall notify Ally what portion of said employee’s monthly salary and
what travel expenses were actually incurred working on the Initial Plant
at
Ally’s direction out of Albuquerque, based upon a 4O hour work
week.
Also,
prior to execution of this Agreement Titan has provided to Ally a copy of
U.S.
Patent 5,871,619. Ally acknowledges that Xxx. No. 5,714,043 has lapsed and
one
utility patent for the feed system and two other new provisional patents
have
been applied for with the U.S Patent Office. Titan and Ally are satisfied
that
Titan’s technology is sufficient to operate the proposed plants.
E. The
exclusive license to utilize Titan’s Technology in the Territory shall commence
when this License Agreement is signed, but shall terminate on March 2, 2007,
if
Ally does not commence construction of the first plant and pay the initial
license fee payment of $1,600,000.00 to Titan by March 1, 2007. Said license
shall be exclusive as to each plant for such period as each Plant is in
continuous operation. The License shall also be deemed to grant Ally the
right
to use the Technology for the purpose of generating electric power within
the
defined Territory through combustion of products produced using the Technology.
Titan shall not grant licenses for the tire recycling Technology (including
its
use for generation of electric power) to any entity or person other than
Ally.
3
II.
SUBSEQUENT PLANTS
A. Ally
may
add additional plant locations when Ally identifies other locations or has
a
need for greater capacity and has the necessary financing in place and is
ready
to construct a subsequent plant.
The
license fee for each additional plant shall be $l,600,000.00 per plant, which
shall be paid to Titan at the time the License is granted for each subsequent
plant and the location of the subsequent plant identified and accepted by
Titan.
Production
royalties for each subsequent plant shall be paid quarterly as stated in
Section
I.b. above.
If
after
the first plant is fully operational (meaning that it has achieved a continuous
operational capacity of 200 tons of tires for a 24 hour period) Ally fails
to
expand its capacity by one two train plant within every twelve(12) month
period
up to a projected level of four plants (being two plants in Texas, one plant
in
Mississippi, and one plant in Oklahoma), the Territory may be reduced by
the
amount of capacity within the Territory upon the election of Titan if a willing
and able prospective Licensee approaches Titan with an offer to build a plant
within the Territory and Licensee does not, within thirty days after it is
provided all of the terms and conditions of the offer by the Prospective
Licensee, agree to build a plant to meet the additional capacity within a
one
year period from the date of the offer plus Ally’s ongoing commitment to build
one plant per year.
B. Ally
acknowledges that Titan has on-going discussions with third parties for
construction of tire recycling plants using the Technology with respect to
other
locations outside the Territory and that Titan shall have the free and
unfettered right to conclude licensing transactions for the Technology in
any
other area, state or country outside the Territory without first offering
the
opportunity to Licensee.
Nothing
shall prevent Titan from negotiating or completing a merger, consolidation,
reorganization or similar transaction with a third party that desires to
purchase tire recycling or other technologies owned or controlled by Titan,
so
long as the terms and obligations owed by Titan to Ally under this Agreement
are
not modified.
C. Titan
and
Ally mutually acknowledge and agree that Titan shall be free and unencumbered
to
pursue other opportunities outside the Territory covered by this
License.
4
III.
GENERAL PROVISIONS
A. Titan
represents that its technology includes the above described patents and other
trade secrets and know how with respect to the Technology.
B. Titan
and
Ally shall use reasonable efforts to ensure that Titan’s patent rights are
protected and enforced within the Territory covered by the License. Titan
shall
retain exclusive ownership of the Technology, including the patent and patent
rights. In addition, all proprietary rights to design, know-how, copyright
or
improvements or modifications to the process or processes shall remain or
become
the exclusive property of Titan, and Ally agrees to execute such documents
as
may be required from time to time to assign and transfer to Titan such rights
at
no further costs or fees to Titan.
C. Titan
shall exclusively be entitled to apply for and register any patents or patent
improvements arising out of this Agreement or definitive Agreements hereafter
with respect to the Technology, and Ally shall sign all necessary applications
or otherwise provide its approval with respect to any such applications or
registrations. Ally shall similarly assist Titan in protecting its patent
rights
or proprietary knowledge within the scope of the License and this
Agreement.
D. All
prior agreements
signed by the parties prior to this Agreement are hereby null and void, except
for the document entitled Confidentiality and Non-Circumvention Agreement,
which
is attached hereto as Exhibit A (and by this reference made a part hereof),
which shall survive any termination of this Agreement.
E. This
transaction will be effective when signed by all parties hereto. Each party
states that it has adopted the appropriate corporate resolutions authorizing
adoption and completion of this transaction and that the persons signing
for
each corporation have the requisite corporate authorization and capacity
to sign
this Agreement
IV.
TERMINATION
This
Agreement shall terminate upon the occurrence of the following
events:
| (i) |
Failure
of Ally to make any of the payments required in this Agreement
on or
before the dates provided for said payments herein, unless such
failure is
cured within Fifteen (15) business days following the date written
notice
by Titan that any such payment has not been received is delivered
to Ally
at the address below, or such other address provided to Titan by
Ally.
|
5
| (ii) |
By mutual
agreement of the parties; or
|
| (iii) |
In
the event any Plant is constructed and operated, this Agreement
shall
terminate as to any such plant upon the permanent cessation of
operations
of said Plant and the winding up of
all matters in connection with the cessation of
operations
|
V.
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 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 re1ates to alleged violation
of the
Confidentiality and Non- Circumvention Agreement attached hereto as Exhibit
A.
VI..
NOTICES
Notices
hereunder shall be given in writing and addressed to the parties at the
respective addresses set forth on the first page of this Agreement.Notices
shall
not be effective unti1 receipt has been confirmed to the Party sending the
notice. Provided, however, that notices hereunder shall a1so be effective
if
personally delivered to an officer of the recipient or given by facsimile
copier
with receipt confirmed. For purposes of this Article, the facsimi1e copier
number of Titan is (505) 881-71l3 (Attention: Mr. Xxx Wi1der) and the telephone
number for Ally is 000-000-0000 and the fax address for Ally is 000 000-0000
and
by mail to Ally at 0000 Xxxxx Xxxxxxx Xxxx., Xxxxx 000, Xxxx Xxxxxx, XX 00000,
Port Xxxxxx, Texas.
6
VII.
AMENDMENTS
The
parties may amend this Agreement by a writing signed by both parties.
In
witness whereof, the parties have executed this Agreement this 23rd day of
August, 2006.
TITAN
TECHNOLOGIES, INC.
| By: | /s/ Xxxxxx X. Xxxxxx | |||
|
Xxxxxx X. Xxxxxx,President |
||||
| By: | /s/ Xxxxx X. Ally, M.D. | |||
|
Name:
|
Xxxxx
X. Ally, M.D.,
Managing
General Partner
Licensee
Ally Investment, LLP, A
Texas limited liability partnership
|
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