EXHIBIT 10.1
EXCLUSIVE LICENSE AGREEMENT
THIS IS AN EXCLUSIVE LICENSE AGREEMENT ("Agreement") entered into this 18th day
of February, 2005 (the "Effective Date"), by and among SULFUR SOLUTIONS, INC.
("SSI"), a Canadian corporation with a place of business at
____________________________________________, XXXXX VENTURES, INC. ("Xxxxx"),
the principal owner of SSI and a Canadian corporation with a place of business
at _____________________, and DDS TECHNOLOGIES USA, INC. ("DDS"), a Nevada
corporation with a place of business at 000 Xxxx Xxxxxxxx Xxxx Xxxx, Xxxxx 000,
Xxxx Xxxxx, XX 00000.
RECITALS
A. DDS is the owner of certain rights with respect to dry
disaggregation technology products;
X. Xxxxx has identified a market for such products, and wishes to
expand such market;
C. SSI wishes to obtain an exclusive license with respect to such
DDS technology for purposes of processing and extraction of
sulfur and sulfur derivative materials in North America; and
D. DDS wishes to grant such a license on the terms and conditions
set forth below.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereby agree as follows:
AGREEMENT
1. DEFINITIONS. Capitalized terms used in this Agreement shall have the
following meanings:
"AAA" shall have the meaning assigned to it in SUBSECTION 14.3 ("ARBITRATION").
"AUTHORIZED PURPOSE" shall mean the operation of Machines and Enhanced Machines
solely to process and/or extract sulfur and sulfur derivative materials from
mine waste or other feed stock physically located in the Authorized Territory.
"AUTHORIZED TERRITORY" shall mean, subject to SUBSECTION 2.4 ("EXCLUSIVITY AND
ADDITIONAL TERRITORY"), collectively the United States of America, Canada and
Mexico.
"CONFIDENTIAL INFORMATION" shall have the meaning assigned to it in SECTION 8
("CONFIDENTIAL INFORMATION").
"DELIVERABLE ITEMS" shall mean tangible materials and media containing the Trade
Secrets as further described in EXHIBIT B ("DELIVERABLE ITEMS").
"DISCLOSING PARTY" shall have the meaning assigned to it in SECTION 8
("CONFIDENTIAL INFORMATION").
"ENHANCED MACHINES" shall have the meaning assigned to it in SUBSECTION 4.2
("ENHANCED MACHINES").
"ENHANCEMENTS" shall have the meaning assigned to it in SUBSECTION 4.1
("ENHANCEMENTS").
"EFFECTIVE DATE" shall have the meaning assigned to it in the first paragraph of
this Agreement.
"INDEMNIFIED PARTY" shall have the meaning assigned to it in SECTION 12
("INDEMNITY AND GUARANTY").
"INDEMNIFYING PARTY" shall have the meaning assigned to it in SECTION 12
("INDEMNITY AND GUARANTY").
"MACHINES" shall mean DDS machines as exist as of the Effective Date.
"NEW COUNTRY FEE RECORDS" shall have the meaning assigned to it in SUBSECTION
6.3 ("AUDIT").
"NEW COUNTRY FEES" shall have the meaning assigned to it in SECTION 6 ("NEW
COUNTRY FEES AND PAYMENT").
"PATENTS" shall mean patents, utility models and applications therefor,
including any and all divisionals, continuations, re-examinations, renewals,
provisionals, continuations-in-part, or re-issues owned or licensable by DDS
(including without limitation U.S. Xxx. No. 6,848,582), and which are in
existence as of the Effective Date or which come into existence at any time
thereafter and embody any Trade Secrets, and including any and all Enhancements.
"PURCHASE AGREEMENT" shall have the meaning assigned to it in SUBSECTION 3.2
("INITIAL MACHINE SALE").
"RECEIVING PARTY" shall have the meaning assigned to it in SECTION 8
("CONFIDENTIAL INFORMATION").
"ROYALTIES" shall have the meaning assigned to it in SUBSECTION 5.1
("ROYALTIES").
"SAMPLE" shall have the meaning assigned to it in SUBSECTION 3.1 ("INSPECTION").
"TERM" shall have the meaning assigned to it in SECTION 6 ("TERM, TERMINATION
AND EXTENSION").
"TRADE SECRETS" shall mean all ideas, concepts, know-how, formulas, techniques,
procedures, and other non-public information regarding the use or operation of
Machines or Enhanced Machines on or before the Effective Date, including without
limitation materials described as such in EXHIBIT A ("TRADE SECRETS"), and
including any and all Enhancements.
2. TRADE SECRET AND PATENT LICENSES.
2.1 TRADE SECRETS Subject to SSI's performance hereunder, including
without limitation the timely payment of Royalties, DDS hereby grants to SSI
solely during the Term, the following licenses:
A. an exclusive (both as to DDS and all third parties, and
subject to SUBSECTION 2.4(A) ("EXCLUSIVITY")), transferable (as described in
SUBSECTION 14.10 ("ASSIGNMENT")), Royalty-bearing license (with the right to
grant sublicenses), to use such Trade Secrets solely for the Authorized Purpose;
and
B. a non-exclusive, transferable (as described in SUBSECTION
14.10 ("ASSIGNMENT")), Royalty-bearing license (with the right to grant
sublicenses) to sell sulfur and sulfur derivative materials which are derived
pursuant to SUBSECTION 2.1(A) to third parties outside the Authorized Territory.
2.2 PATENTS. Subject to SSI's performance hereunder, including without
limitation the timely payment of Royalties, DDS hereby grants to SSI solely
during the Term and solely in the Authorized Territory, the following licenses:
A. an exclusive (both as to DDS and all third parties, and
subject to SUBSECTION 2.4(A) ("EXCLUSIVITY")), Royalty-bearing license (with the
right to grant sublicenses), solely for the Authorized Territory, to use the
Patents, and practice any claims thereof, solely for the Authorized Purpose; and
B. a non-exclusive, transferable (as described in SUBSECTION
14.10 ("ASSIGNMENT")), Royalty-bearing license (with the right to grant
sublicenses) to sell sulfur and sulfur derivative materials derived pursuant to
SUBSECTION 2.2(A) to third parties outside the Authorized Territory.
2.3 ENHANCEMENTS. With respect to any future Trade Secrets or Patents
regarding any Enhancements which shall be owned by DDS as described in
SUBSECTION 4.1 ("ENHANCEMENTS"), the licenses described in SUBSECTION 2.1
("TRADE SECRETS") and in SUBSECTION 2.2 ("PATENTS") shall apply to such Trade
Secrets and Patents, subject to all of the applicable terms and conditions set
forth herein or in this Agreement.
2.4 EXCLUSIVITY AND ADDITIONAL TERRITORY.
A. EXCLUSIVITY. The parties understand and agree that, subject
to SSI's performance under this Agreement and subject to SUBSECTION 2.4(B)
("ADDITIONAL TERRITORY"), DDS shall not grant any licenses or sublicenses to any
third parties with respect to any Patents or Trade Secrets to allow such third
parties to process and/or extract sulfur and sulfur derivative materials from
mine waste or other feed stock anywhere in the world for a period of three (3)
years from the Effective Date.
B. ADDITIONAL TERRITORY. At the end of the three (3) year
period described in SUBSECTION 2.4(A) ("EXCLUSIVITY"), SSI shall be entitled to
add such countries and regions in which SSI has established a significant
commercial presence (with respect to the processing and/or extraction of sulfur
and sulfur derivative materials from mine waste or other feed stock pursuant to
this Agreement) to the Authorized Territory as SSI may wish upon written notice
to DDS given no later than sixty (60) days after the end of such three (3) year
period, subject, however, to all of the terms and conditions set forth in this
Agreement. The parties understand and agree that thereafter the provisions of
SUBSECTION 2.4(A) ("EXCLUSIVITY") shall no longer apply outside the Authorized
Territory as such Authorized Territory may have been added to as hereinabove
provided, but that the obligation of DDS to pay New Country Fees to SSI as
described in SUBSECTION 6.2 ("PAYMENT") shall apply. The addition of such
countries and regions by SSI shall be at no additional cost to SSI but shall be
subject to the Royalty obligations set forth herein.
2.5 SUBLICENSES. All sublicenses granted by SSI as provided in this
SECTION 2 ("TRADE SECRET AND PATENT LICENSES") shall be in a commercially
reasonable, legally enforceable and written form, and shall be no less
protective of DDS's rights (including without limitation DDS's rights with
respect to its Confidential Information") than this Agreement. SSI shall
identify all sublicensees to DDS promptly and in writing, and shall ensure that
such sublicensees are at all times in full compliance with the terms of such
sublicense agreements.
3. SALE OF MACHINES AND CUSTOMIZATIONS.
3.1 INSPECTION. The parties acknowledge that, as of the Effective Date,
SSI has delivered to DDS a small sample of mining waste for examination and
inspection by DDS. For testing in a Machine pursuant to the licenses granted to
SSI in SECTION 2 ("TRADE SECRET AND PATENT LICENSES"), SSI undertakes to ship to
DDS, within 14 days of Effective Date, a 400/500lb sample to be tested within 60
days after receipt, under terms negotiated in good faith by the parties, to
determine whether, in SSI and DDS's good faith opinion, the sample is suitable
for processing into sulphur and sulphur derivative materials. The parties hereby
acknowledge as of the Effective Date, SSI has delivered to DDS a sample of
mining waste (the "Sample") for examination and inspection by DDS. The parties
will negotiate, in good faith, terms upon which the Sample will be tested within
60 days of the Effective Date to determine whether, in SSI and DDS's good faith
opinion, such sample is reasonably suitable for processing into sulphur and
sulphur derivative materials using a Machine pursuant to the licenses granted to
SSI in SECTION 2 ("TRADE SECRET AND PATENT LICENSES"). It is understood and
agreed that neither DDS nor SSI nor their respective officers, directors,
shareholders, employees, agents or affiliates, shall have any liability
whatsoever to the other or to any third party with respect to any such opinion.
If it is determined that the Sample is not suitable as described herein this
Agreement and, without limitation, all licenses granted to SSI hereunder and, as
well, any purchase orders (including the Purchase Agreement described below) or
other agreements with respect to the purchase of one or more Machines or
Enhanced Machines shall automatically terminate.
3.2 INITIAL MACHINE SALE. Following the Effective Date, the parties
shall enter into a separate written purchase agreement (the "Purchase
Agreement") pursuant to which SSI will agree to purchase one Machine at a price
specified in EXHIBIT C ("PRICES"). Such Agreement will provide that SSI shall,
for a period of 60 days following SSI's receipt of the Machine in Calgary, test
the Machine for suitability of product quality, throughput performance,
regulatory compliance and/or other characteristics necessary for the commercial
use and operation of a Machine within the Authorized Territory to process
sulphur and sulphur derivative materials pursuant to the licenses granted to SSI
hereunder. In the event that SSI concludes in good faith that the Machine is
suitable it shall be obliged to pay to DDS the Price for such Machine. In the
event SSI fails to notify DDS that the machine is suitable, or not suitable, as
hereinabove provided by the end of such sixty (60) day period, then such failure
shall be deemed to constitute notice to DDS that the machine is suitable. In the
event SSI concludes, in its good faith opinion, the Machine is not suitable the
Purchase Agreement shall automatically terminate and DDS will thereafter
promptly retake possession of the Machine from SSI without any further
obligation of either party to the other. The parties understand and agree that
any material breach of the Purchase Agreement shall constitute not only a
material breach thereof, but shall also constitute a material breach of this
Agreement for purposes of SECTION 6 ("TERM, TERMINATION AND EXTENSION"), and
that the Purchase Agreement shall itself contain an analogous cross default
provision.
4. ENHANCEMENTS.
4.1 ENHANCEMENTS. SSI shall operate the Machine described in SUBSECTION
3.2 ("INITIAL MACHINE SALE") solely at SSI's premises located at
[_______________, CALGARY, ALBERTA, CANADA ____________], and shall evaluate the
performance thereof for no longer than sixty (60) days from the date such
Machine is delivered to SSI's premises, solely for the Authorized Purpose and
shall, promptly following the end of such period, recommend to DDS certain
improvements, enhancements and customizations thereto which are in SSI's
reasonable judgment necessary or desirable to improve the performance of such
Machine (collectively, "Enhancements"). Such Enhancements shall belong solely to
DDS, and SSI shall take all steps, both during and after the Term, reasonably
required by DDS to assign all rights therein to DDS (with DDS to promptly
reimburse SSI for its reasonable, out of pocket costs in connection therewith),
and to properly document and record such ownership and assignment.
4.2 ENHANCED MACHINES. Upon submission to DDS by SSI of the
Enhancements as described in SUBSECTION 4.1 ("ENHANCEMENTS"), SSI shall also
submit an irrevocable purchase order to purchase certain Machines which shall
incorporate the Enhancements (each, an "Enhanced Machine") at prices described
in EXHIBIT C ("PRICES").
4.3 USE OF MACHINES AND ENHANCED MACHINES. SSI shall agree that it
shall not, to the extent permitted by law or good commercial practice, use, or
permit or encourage the use of, the Machines or Enhanced Machines purchased by
SSI for any purpose other than the Authorized Purpose.
4.4 BUY BACK RIGHTS. In the event of any expiration or termination of
this Agreement, or prior to any contemplated sale, lease, license, consignment
or any other transfer of any Machine or Enhanced Machine by SSI to any third
party, SSI shall give no less than forty-five (45) days' written notice thereof
to DDS, and shall afford DDS the opportunity to purchase all or some of such
Machines or Enhanced Machines (at DDS's discretion) ***. In the event that DDS
declines to purchase any such Machines or Enhanced Machines, SSI may proceed
with the foregoing sale, lease, license, consignment or other transfer of such
Machines or Enhanced Machines. The parties understand and agree that any
agreements for sale of Machines or Enhanced Machines to third parties (including
without limitation any sublicensees of SSI) by DDS shall contain an analogous
"buy back" provision; provided; however, that it shall not be an obligation of
SSI hereunder to arrange for the re-sale or return of such Machines or Enhanced
Machines to DDS.
5. ROYALTIES AND PAYMENT.
5.1 ROYALTIES. In addition to payment for the purchase of Machines and
Enhanced Machines, SSI shall also pay to DDS certain royalties ("Royalties") to
be calculated as follows, based on amounts paid to SSI by third parties for
sulfur or sulfur derivative materials which are produced using such Machines or
Enhanced Machines, or for sublicenses or other rights granted pursuant to this
Agreement:
A. Where SSI uses Machines or Enhanced Machines to process
sulfur or sulfur derivative materials, the Royalty paid to DDS shall be based on
a percentage of gross revenue received by SSI in connection therewith, to be
calculated as follows: ***; and
B. Where SSI grants any sublicenses of any rights hereunder,
the Royalty shall be *** in connection therewith.
5.2 SUBLICENSEES. The Royalty obligation described herein shall, in
every case, remain an obligation of each sublicensee, purchaser, assignee or
other party or customer with whom SSI shall enter into a transaction in which
there is any direct or indirect grant of any DDS rights, by sublicense or
otherwise, and the parties acknowledge that it is their mutual intention that
Royalties to be paid to DDS will be substantially the same, regardless of
whether sulfur or sulfur derivatives are processed by SSI or by a sublicensee.
To the extent that an adjustment in Royalty calculation shall be necessary in
order to achieve such intention, the parties shall cooperate and negotiate in
good faith to adjust the Royalty calculation accordingly.
5.3 PAYMENT. SSI shall pay Royalties to DDS on a calendar quarterly
basis, thirty (30) days in arrears. Each payment of Royalties shall be
accompanied by written documentation sufficient to explain to DDS's reasonable
satisfaction the amount and calculation of such Royalties. SSI shall also
provide on an annual basis a comprehensive, written report, certified as
accurate by SSI's independent accountants, describing all Royalties due and
paid, and the calculation thereof.
5.4 AUDIT. SSI shall also maintain at all times written records of all
sulfur and sulfur derivative materials sold, or contracted for sale, by or on
behalf of SSI pursuant to this Agreement in a form and format reasonably
required by DDS (collectively, "Records"). SSI shall maintain such Records at
SSI's premises located at [____________________, CALGARY, ALBERTA, CANADA
____________], and shall make such Records available for audit by DDS, or DDS's
accountants and representatives, upon reasonable notice (in no event less than
two (2) nor more than five (5) business days' notice). DDS shall conduct such an
audit no more frequently than two (2) times each calendar year. In the event
that any such audit reveals an underpayment of Royalties, SSI shall immediately
pay the amount of such underpayment plus interest thereon calculated at one and
one-half percent (1.5%) of all owed and unpaid Royalties, or the highest rate
allowed by law, whichever is lower. Where such audit reveals an underpayment of
more than five percent (5%), and SSI shall also reimburse DDS for its out of
pocket expenses in connection with such audit. SSI shall maintain all such
Records for no less than five (5) years following the expiration or termination
of this Agreement.
5.5 CURRENCY. All amounts owed or paid under this Agreement by SSI,
including without limitation under the Purchase Agreement, and any and all
Royalties, shall be calculated and paid in the local currency where any
corresponding amounts were originally paid to SSI.
6. NEW COUNTRY FEES AND PAYMENT.
6.1 NEW COUNTRY FEES. After the end of the three (3) year period
described in SUBSECTION 2.4(A) ("EXCLUSIVITY"), any amounts received by DDS from
third parties with respect to any licenses or sublicenses to any third parties
with respect to any Patents or Trade Secrets to allow such third parties to
process and/or extract sulfur and sulfur derivative materials from mine waste or
other feed stock outside the Authorized Territory (as such Authorized Territory
may have been added to pursuant to SUBSECTION 2.4(B) ("ADDITIONAL TERRITORY"))
certain fees ("New Country Fees") as follows:
A. Where DDS uses Machines or Enhanced Machines to process
sulfur or sulfur derivative materials, the New Country Fee paid to SSI shall be
based on a percentage of gross revenue received by DDS in connection therewith,
to be calculated as follows: ***; and
B. Where DDS grants any sublicenses of any rights hereunder,
the New Country Fee shall be *** in connection therewith.
6.2 PAYMENT. DDS shall pay New Country Fees to SSI on a calendar
quarterly basis, thirty (30) days in arrears. Each payment of New Country Fees
shall be accompanied by written documentation sufficient to explain to SSI's
reasonable satisfaction the amount and calculation of such New Country Fees. DDS
shall also provide on an annual basis a comprehensive, written report, certified
as accurate by DDS's independent auditors, describing all New Country Fees due
and paid, and the calculation thereof.
6.3 AUDIT. DDS shall also maintain at all times written records of all
sulfur and sulfur derivative materials sold, or contracted for sale, by or on
behalf of SSI pursuant to this Agreement in a form and format reasonably
required by SSI (collectively, "New Country Fee Records"). SSI shall maintain
such New Country Fee Records at SSI's premises located at 000 Xxxx Xxxxxxxx Xxxx
Xxxx, Xxxxx 000, Xxxx Xxxxx, XX 00000, and shall make such New Country Fee
Records available for audit by SSI, or SSI's accountants and representatives,
upon reasonable notice (in no event less than two (2) nor more than five (5)
business days' notice). SSI shall conduct such an audit no more frequently than
two (2) times each calendar year. In the event that any such audit reveals an
underpayment of New Country Fees, DDS shall immediately pay the amount of such
underpayment plus interest thereon calculated at one and one-half percent (1.5%)
of all owed and unpaid New Country Fees, or the highest rate allowed by law,
whichever is lower. Where such audit reveals an underpayment of more than five
percent (5%), DDS shall also reimburse DDS for its out of pocket expenses in
connection with such audit. DDS shall maintain all such New Country Fee Records
for no less than five (5) years following the expiration or termination of this
Agreement.
6.4 CURRENCY. All amounts owed or paid under this Agreement by DDS,
including without limitation any and all New Country Fees, shall be calculated
and paid in the local currency where any corresponding amounts were originally
paid to DDS.
7. TERM, TERMINATION AND EXTENSION.
7.1 TERM. The term of this Agreement shall be five (5) years, subject
to earlier termination and extension as hereinbelow provided.
7.2 TERMINATION. Either party may terminate this Agreement for the
material breach of the other party which breach has remained uncured for thirty
(30) days after notice thereof.
7.3 EXTENSION. In the event that SSI has paid Royalties in each year
and has also has not at any time been called in material breach of this
Agreement pursuant to SUBSECTION 7.2 ("TERMINATION"), SSI shall have the right
to extend this Agreement for up to one (1) additional five (5) year period
(which period shall be deemed part of the Term), provided the Royalty paid by
SSI to DDS in the fifth year of the first five years of the original Term shall
be *** per each Machine and Enhanced Machine per year on an annualized basis.
7.4 EFFECT. In the event of any expiration or termination of this
Agreement, all licenses granted by DDS hereunder shall immediately terminate,
each party shall immediately return to the other party such other party's
Confidential Information as described in SUBSECTION 8.5 ("RETURN OF CONFIDENTIAL
INFORMATION"), and the provisions of SUBSECTION 4.4 ("BUY BACK RIGHTS") shall
continue to apply.
8. CONFIDENTIAL INFORMATION.
8.1 DESCRIPTION. Each party (the "Disclosing Party") may from time to
time during the Term of this Agreement disclose to the other party (the
"Receiving Party") certain non-public information regarding the Disclosing
Party's business, including technical, marketing, financial, personnel,
planning, and other information ("Confidential Information"). The Disclosing
Party shall xxxx all such Confidential Information in tangible form with the
legend `confidential', `proprietary', or with similar legend. With respect to
Confidential Information disclosed orally, the Disclosing Party shall describe
such Confidential Information as such at the time of disclosure, and shall
confirm such Confidential Information as such in writing within thirty (30) days
after the date of oral disclosure. The Trade Secrets and any other non-public
information regarding Machines or Enhanced Machines shall, however, be
considered the Confidential Information of DDS regardless of whether so marked
or confirmed.
8.2 CONFIDENTIAL NATURE OF TERMS OF AGREEMENT. Each party agrees not to
disclose the terms of this Agreement to any third party except as required by
law or regulation, in order to enforce such party's rights hereunder, or under
obligation of confidence to advisors, attorneys, accountants, or investment
professionals.
8.3 PROTECTION OF CONFIDENTIAL INFORMATION. Except as expressly
permitted by this Agreement including without limitation in SECTION 2 ("TRADE
SECRET AND PATENT LICENSES"), the Receiving Party shall not disclose the
Confidential Information of the Disclosing Party, and shall not use the
Confidential Information of the Disclosing Party for any purpose not expressly
permitted by this Agreement. Subject to the foregoing, the Receiving Party shall
limit the disclosure of the Confidential Information of the Disclosing Party to
the employees, professional advisors or agents of the Receiving Party who have a
need to know such Confidential Information for purposes of this Agreement, and
who are, with respect to the Confidential Information of the Disclosing Party,
bound in writing (or by statute or regulations) by confidentiality terms no less
restrictive than those contained herein. The Receiving Party shall provide
copies of such written agreements to the Disclosing Party upon request;
provided, however, that such agreement copies shall themselves be deemed the
Confidential Information of the Receiving Party.
8.4 EXCEPTIONS. Notwithstanding anything herein to the contrary,
Confidential Information shall not be deemed to include any information which,
as evidenced by the Receiving Party's written records: (A) was already lawfully
known to the Receiving Party at the time of disclosure by the Disclosing Party
as reflected in the written records of the Receiving Party; (B) was or has been
disclosed by the Disclosing Party to a third party without obligation of
confidence; (C) was or becomes lawfully known to the general public without
breach of this Agreement; (D) is independently developed by the Receiving Party
without access to, or use of, the Confidential Information; (E) is approved in
writing by the Disclosing Party for disclosure by the Receiving Party; (F) is
required to be disclosed in order for the Receiving Party to enforce its rights
under this Agreement; or (G) is required to be disclosed by law or by the order
or a court or similar judicial or administrative body; provided, however, that
the Receiving Party shall notify the Disclosing Party of such requirement
immediately and in writing, and shall cooperate reasonably with the Disclosing
Party, at the Disclosing Party's expense, in the obtaining of a protective or
similar order with respect thereto.
8.5 RETURN OF CONFIDENTIAL INFORMATION. The Receiving Party shall
return to the Disclosing Party, destroy or erase all Confidential Information of
the Disclosing Party in tangible form: (A) upon the written request of the
Disclosing Party (except with respect to the Trade Secrets or other Confidential
Information of which the Receiving Party is entitled to continued possession
under the terms of this Agreement); or (B) upon the expiration or termination of
this Agreement, whichever comes first, and in both cases, the Receiving Party
shall certify promptly and in writing that it has done so.
9. TECHNICAL SUPPORT AND CUSTOMIZATIONS.
9.1 END USERS. SSI shall be responsible for all marketing and sales of
sulfur and sulfur derivative materials to third parties (or for operating as a
"toll processor" with respect thereto), and all related customer support and
assistance, and shall do so in a diligent and honest manner. In no event shall
SSI direct any SSI customer to contact DDS, and DDS shall direct all such
customers to SSI instead.
9.2 TECHNICAL SUPPORT. DDS shall provide technical support and
consultation, up to a maximum of one hundred (100) person-hours per year, with
respect to Machines and Enhanced Machines each calendar year at times and places
as may be reasonably agreed to by the parties, and which may include telephone,
video conference or in-person meetings. Any out of pocket expenses of DDS in
connection therewith, including without limitation any travel and living
expenses, shall be reimbursed by SSI. Any additional technical support services
by DDS shall be agreed to separately by the parties, and shall be paid for by
SSI at rates no higher than DDS's normal commercial rates.
9.3 CUSTOMIZATIONS. Subject to SUBSECTION 4.1 ("ENHANCEMENTS"), any
other modifications, changes, updates, or enhancements of or to Machines or
Enhanced Machines which are proposed, invented, conceived, reduced to practice
or requested by SSI shall be owned exclusively by DDS, and SSI shall disclose
all of the foregoing promptly to DDS, and shall take all steps reasonably
required by DDS to assign all rights therein to DDS, and to properly document
and record such ownership and assignment. SSI shall be free to apply such
modifications, changes, updates or enhancements to Machines or Enhanced Machines
upon notice to (but not necessarily permission from) DDS; provided, however,
that the SSI understands and agrees that the foregoing may affect (or eliminate)
any warranty remedy SSI would otherwise be eligible for pursuant to SUBSECTION
11.2 ("BY DDS"), and provided further that the foregoing shall be subject to
SECTION 12 ("INDEMNITY AND GUARANTY").
10. LIMITATION OF LIABILITY. OTHER THAN FOR A BREACH OF SECTION 8 ("CONFIDENTIAL
INFORMATION"), OR FOR AN EXCEEDING OF THE SCOPE OF THE LICENSES GRANTED
HEREUNDER, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY OTHER PARTY
FOR ANY LOSS OF USE, INTERRUPTION OF BUSINESS OR ANY INDIRECT, SPECIAL,
INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING LOST
PROFITS) REGARDLESS OF THE FORM OF ACTION SEEKING SUCH DAMAGES (WHETHER IN
CONTRACT, TORT, INCLUDING NEGLIGENCE, STRICT PRODUCT LIABILITY OR OTHERWISE),
EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11. REPRESENTATIONS AND WARRANTIES.
11.1 BY SSI. SSI hereby represents and warrants, to and for the benefit
of DDS and its parent, subsidiaries, shareholders, customers, affiliates, agents
and assigns, as of the Effective Date, throughout the Term and thereafter, as
follows:
A. SSI has conducted its own thorough inquiry into the details
and operation of the Machine and the intellectual property to be licensed under
this Agreement;
B. SSI possesses sufficient technical skill, experience and
knowledge to conduct such an inquiry in a meaningful and effective way;
C. DDS has cooperated with SSI and has provided SSI such
information and documentation as SSI has requested in the course of such
inquiry;
D. SSI acknowledges that DDS has no responsibility for the
selection of the Machine by SSI or its suitability, or the suitability of the
foregoing intellectual property, for use in SSI's business; and
E. Based on such inquiry (but subject to SUBSECTION 3.1
("INSPECTION")), SSI has concluded that such Machine and intellectual property
are indeed suitable for use in SSI's business.
F. SSI and it sublicensees shall ensure that all Machines and
Enhanced Machines are operated solely for the Authorized Purpose, in a
commercially reasonable and safe manner, and so as not to cause injury or
damages to persons or real or tangible personal property.
11.2 BY DDS. DDS hereby warrants that Machines and Enhanced Machines as
delivered to SSI pursuant to the Purchase Agreement shall be materially free
from defects in materials and workmanship in normal use for twelve (12) months
from the date of original delivery thereof by DDS to SSI. In the event of any
such defects in any Machine or Enhanced Machine, SSI shall promptly notify DDS,
and DDS shall, at its option, use its commercially reasonable efforts to repair
or replace such Machine or Enhanced Machine. The foregoing states DDS's sole
liability and SSI's sole remedy, for any breach of warranty under this
Agreement.
11.3 DISCLAIMER. EXCEPT AS EXPRESSLY STATED IN SUBSECTION 11.2 ("BY
DDS"), ALL MACHINES, ENHANCED MACHINES, AND ALL OTHER DELIVERABLE ITEMS UNDER
THIS AGREEMENT ARE PROVIDED ON AN "AS IS" BASIS, WITHOUT ANY WARRANTY
WHATSOEVER, AND DDS HEREBY DISCLAIMS ALL OTHER WARRANTIES, INCLUDING WITHOUT
LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NON-INFRINGEMENT.
12. INDEMNITY AND GUARANTY.
12.1 INDEMNITY. Each party (the "Indemnifying Party") agrees to
indemnify, defend and hold harmless the other party (the "Indemnified Party")
from and against all claims, demands, threats, suits or proceedings
(collectively, "Claims"), and all losses, arising from any injury or damages to
persons or real or tangible personal property arising from the conduct of the
Indemnifying Party in the course of the performance of this Agreement. In the
event of any such Claim, the Indemnified Party shall promptly notify the
Indemnifying Party, and shall cooperate reasonably with the Indemnifying Party
(at the Indemnifying Party's expense) in the defense or settlement of such
Claim.
12.2 GUARANTY. Xxxxx hereby agrees to ensure that SSI timely and fully
performs each and every obligation of SSI under this Agreement. Without limiting
the generality of the foregoing, SSI agrees to agrees to indemnify, defend and
hold harmless DDS from and against all Claims arising from any acts or omissions
of SSI. In the event of any such Claims, DDS shall promptly notify Xxxxx, and
shall cooperate reasonably with Xxxxx (at Xxxxx'x expense) in the defense or
settlement of such Claim.
13. SURVIVAL AND ORDER OF PRECEDENCE. In the event of any expiration or
termination of this Agreement, the provisions of SECTION 1 ("DEFINITIONS"),
SUBSECTION 4.4 ("BUY BACK RIGHTS"), SUBSECTION 7.4 ("EFFECT"), SECTION 8
("CONFIDENTIAL INFORMATION"), SUBSECTION 10 ("LIMITATION OF LIABILITY"), SECTION
11 ("REPRESENTATIONS AND WARRANTIES"), SECTION 12 ("INDEMNITY AND GUARANTY"),
SECTION 13 ("SURVIVAL AND ORDER OF PRECEDENCE") and SECTION 14 ("GENERAL") shall
survive and shall continue to bind the parties. In the event of any conflict
between the terms of this Agreement and the terms of any exhibit, the terms of
the exhibit shall control.
14. GENERAL.
14.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the United States of America and the State of Florida without regard
to conflicts of law principles. The parties agree that the United Nations
Convention on Contracts for the International Sale of Goods is specifically
excluded from application to this Agreement. Subject to SUBSECTION 14.3
("ARBITRATION"), the state and federal courts located in Palm Beach Country,
Florida, shall have sole jurisdiction over any disputes arising hereunder, and
the parties hereby consent to the personal jurisdiction of such courts.
14.2 ATTORNEYS' FEES. In the event any proceeding or lawsuit is brought
by any party in connection with this Agreement, the prevailing party in such
proceeding shall be entitled to receive its costs, expert witness fees and
reasonable attorneys' fees, including costs and fees on appeal.
14.3 ARBITRATION. Any dispute or controversy arising out of or relating
to this Agreement shall be settled by binding arbitration in accordance with the
Rules of the American Arbitration Association ("AAA") in the State of Florida,
subject to the laws of that state, other than its conflicts of law principles. A
single arbitrator engaged in the practice of law, who is knowledgeable about
intellectual property transactions, shall conduct the arbitration. The
arbitrator shall be selected in accordance with AAA procedures from a list of
qualified people maintained by AAA. The arbitration shall be conducted in Boca
Raton, Florida. There shall be no discovery other than the exchange of
information which is provided to the arbitrator by the parties. The power of the
arbitrator to fashion procedures and remedies within the scope of this Agreement
is recognized by the parties as essential to the success of the arbitration
process. Written reasons for the arbitrator's decisions should be complete and
explicit, but limited to only those issues necessary to support the award. The
written reasons should include the basis for any damages awarded and a statement
of how the damages were calculated. Each party shall bear its costs and
attorney's fees of any arbitration. The arbitrator shall assess his or her
costs, fees and expenses against the party losing the case unless the arbitrator
believes that neither party is the clear loser, in which case the arbitrator
shall divide such fees, costs and expenses according to his or her sole
discretion. The arbitrator's decision and award shall be final and binding, and
judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. Any duty to arbitrate under this Agreement shall
remain in effect and enforceable after termination of this Agreement for any
reason.
14.4 NOTICES. All notices or reports permitted or required under this
Agreement shall be in writing and shall be delivered by personal delivery,
facsimile, or by certified or registered mail, return receipt requested, and
shall be deemed given: (I) upon personal delivery; (II) the next day following
the date of transmittal when transmitted by facsimile; (III) or five (5)
business days after deposit in the mail. Notices shall be sent to the parties at
the addresses described on the first page of this Agreement or such other
address as either party may designate for itself in writing. Notices to DDS
shall include a copy sent to: Xxxx X. Xxxxxxxxxx, Esq., Xxxxxxxxx Xxxxxxx, 0000
X. Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 00000.
14.5 NO AGENCY. Nothing contained herein shall be construed as creating
any agency, partnership, or other form of joint enterprise between the parties.
14.6 FORCE MAJEURE. Neither party shall be liable hereunder by reason
of any failure or delay in the performance of its obligations hereunder on
account of strikes, shortages, riots, insurrection, fires, flood, storm,
explosions, acts of God, war, governmental action, labor conditions,
earthquakes, material shortages or any other cause which is beyond the
reasonable control of such party.
14.7 WAIVER. The failure of either party to require performance by the
other party of any provision hereof shall not affect the full right to require
such performance at any time thereafter; nor shall the waiver by either party of
a breach of any provision hereof be taken or held to be a waiver of the
provision itself.
14.8 SEVERABILITY. In the event that any provision of this Agreement
shall be unenforceable or invalid under any applicable law or be so held by
applicable court decision, such unenforceability or invalidity shall not render
this Agreement unenforceable or invalid as a whole, and, in such event, such
provision shall be changed and interpreted so as to best accomplish the
objectives of such unenforceable or invalid provision within the limits of
applicable law or applicable court decisions.
14.9 HEADINGS. The section headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe,
or describe the scope or extent of such section or in any way affect this
Agreement.
14.10 ASSIGNMENT. Neither party shall assign any rights or obligations
under this Agreement, either in whole or in part, without the prior, written
consent of the other party, which consent shall not be unreasonably withheld.
DDS shall, however, have the right to assign this Agreement in whole to a third
party that acquires, is acquired by, merges with, or engages in a similar
transaction with DDS.
14.11 BROKERS. Except with respect to the parties' obligations to the
Terrier Group, LLC, which obligations shall be addressed through separate
negotiations by each party with the Terrier Group, LLC, each party hereby
represents that it has not used the services of any broker or similar party in
the connection therewith, and that there are no brokers' fees, sales commissions
or similar payments owed by such party.
14.12 INJUNCTION. Notwithstanding the provisions of SUBSECTION 14.3
("ARBITRATION"), either party shall be free to seek injunctive relief were
available in any court of competent jurisdiction.
14.13 COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which will be considered an original, but all
of which together will constitute one and the same instrument.
14.14 NO CONSTRUCTION. This Agreement is the product of negotiations
between the parties and their respective counsel, has been jointly drafted, and
shall not be construed for or against either party.
14.15 ENTIRE AGREEMENT. This Agreement together with the exhibits
hereto completely and exclusively states the agreement of the parties regarding
its subject matter, and supersedes, and its terms govern, all prior proposals,
agreements, or other communications between the parties, oral or written,
regarding such subject matter, including without limitation the "Term Sheet" of
January, 2005. This Agreement shall not be modified except by a subsequently
dated written amendment signed on behalf of each of the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.
DDS TECHNOLOGIES USA, INC.
BY:
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XXXXXXX XXXXXXXX
TITLE:
---------------------------------
DATE:
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SULFUR SOLUTIONS, INC.
BY:
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TITLE:
---------------------------------
DATE:
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XXXXX VENTURES, INC.
BY:
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XXXXXXX XXXXX
TITLE:
---------------------------------
DATE:
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EXHIBIT A
TRADE SECRETS
1. Canadian Xxx. Appl. No. [No Number Yet Assigned]
2. Mexican Xxx. Appl. No. PA/a/2004/011713
EXHIBIT B
DELIVERABLE ITEMS
EXHIBIT C
PRICES
1. MACHINES:
o FIRST MACHINE: ***, Ex Works DDS (Incoterms 2000)
o ADDITIONAL MACHINES: ****, Ex Works DDS (Incoterms 2000)
2. ENHANCED MACHINES: Prices and terms of sale to be negotiated in good
faith and agreed to by the parties and to reflect a *** with respect thereto.
