License Agreement
THIS AGREEMENT made this 25th day of February, 1997
BETWEEN:
CPII Carbon Products Industries Inc.
Xxxxx 0000, 000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
(hereinafter called the `Licensee')
OF THE FIRST
PART
AND
Southern Ventures, Inc.
00000 Xxxxxxx 00 Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
(hereinafter called `Licenser')
OF THE SECOND
PART
WHEREAS the Licenser is engaged in the research, development
and
manufacture of certain commercial and industrial equipment
(herein
call the `Equipment') and processes for, inter alia, the
production of
chemicals from carbonaceous materials, namely, but not limited
to the
production of chars and oils from wood wastes (eg. sawdust,
bark,
shavings), scrap tires, pulp mill sludges and municipal sewage
sludges;
AND WHEREAS the Licenser in the course of its operations has
obtained `know how', patents, developed secret processes and
formulae
for the manufacture and operation of the Equipment and has
acquired
technical data consisting principally of reports, drawings,
specifications, blueprints and written descriptions of
manufacturing
processes for the Equipment (all of which is hereinafter called
the
`Licensed Processes') and is willing to grant the right to use
said
Licensed Processes within the Licensed Area;
AND WHEREAS the Licensee desires to engage in the manufacture
and
use of the Equipment in the Licensed Area;
AND WHEREAS the Licensee desires to acquire the aforesaid
right to
use said Licensed Processes belonging to the Licenser in a
Licensed
Area;
NOW THEREFORE the parties hereto mutually covenant and agree
as
follows:
1. Definitions
As used in this agreement, the following terms shall have the
following definitions unless the context clearly requires
otherwise:
a) `Licensed Area' means the Chemical Synthesis Unit (CSU)
situated
at all CPII Carbon Products Industries Inc. projects in location
within a province of Canada subsequently to the date of this
agreement.
b) `Licensed Processes' means the Licenser's manufacturing
processes
and systems for producing and assembling the Equipment developed
or
acquired by the Licenser prior to the date of this agreement and
any
information either written or oral which could reasonably be
construed
as relating thereto.
c) `Licensed Processes' means any and all Equipment or systems
produced under any Licensed Process.
2. Secret Processes
a) Licenser hereby grants to Licensee the perpetual right to
manufacture and use the Licensed Processes within the Licensed
Area.
The Licensed Processes shall be transferred to the Licensee as
soon as
possible after the date of this agreement; such transfer to be
completed not later than ninety (90) days from the date of this
agreement, in the form of reports, drawings, designs,
specification,
blueprints and written descriptions of manufacturing processes
which
will be delivered to the Licensee.
b) By such grant, Licensee agrees not to disclose the Licensed
Processes to anyone else for any use whatsoever. By such grant,
Licenser shall have the exclusive right to prevent the
unauthorized
use of the Licensed Processes and the unauthorized use and sale
of the
Licensed Area.
c) Licenser shall furnish in good faith the data and other
material
sufficient to transfer the Licensed Processes covered by this
agreement. Licenser warrants that the processes, formulae,
technical
data and `know how' will be sufficient and suitable for
production of
the Equipment to a quality comparable to the quality now
produced by
the Licenser, provided that Licensee at all times conforms
strictly
with the processes, formulae, technical data and `know how'
transferred to it by Licenser and provided that Licensee at all
times
installs and uses the Equipment required and purchases and uses
the
raw materials the standard of quality required.
d) The rights and license herein granted shall not include the
right
to grant sub-licenses thereunder unless approved by Licenser.
e) Nothing contained in this paragraph shall be construed to
grant
to Licensee any right to sell the Licensed Processes within any
Licensed Area or to use or sell the Licensed Processes outside
any
Licensed Area.
f) Licenser agrees to disclose to Licensee all developments or
improvements of the Licensed Processes that Licenser may develop
or
acquire during the term of this agreement. Licensee agrees to
disclose to Licenser all technical data and information relating
to
any and all developments or improvements of the Licensed
Processes
that Licensee may develop or acquire during the term of this
agreement.
3. License Fee and Royalty
As consideration for the rights granted hereunder, Licenser
acknowledges payment of the license fee of Fifty Thousand
Dollars
(US$50,000) by Xxxxx Xxxx on behalf of the Licensee for the
right to
an unlimited number of Licensed Areas as defined in Paragraph
1.(a).
Licensee shall pay to Licenser a royalty fee of Five Dollars
(US$5.00)
per ton of material processed for each Licensed Area. Licensee
has
the right, at any time this agreement remains in effect, to pay
an
additional Two Million Dollars (US$2,000,000), at which time the
royalty fee will immediately be reduced to Two Dollars and Fifty
Cents
(US$2.50) per dry ton of material processed for each Licensed
Area.
4. Term
Unless otherwise terminated as herein set out, the term of this
Agreement shall be twenty five (25) years from the date of this
Agreement or such other date as the parties shall mutually agree
at
which time this Agreement shall terminate. Licensee shall have
an
option to renew this Agreement for an additional 25 years.
5. Disclosure
Licensee agrees not to disclose, and to use its best efforts,
and to
take all actions necessary, to prevent its employees and
suppliers
from disclosing the Licensed Processes or any information
relating
thereto transferred under this agreement to any person, firm,
corporation or other business entity unless and until Licensee
has
obtained the prior written approval of Licenser and upon
request, will
execute a Secrecy Agreement with Licenser.
6. Indemnity
Licensee shall hold Licenser free from any liability or
responsibility
in connection with claims of any persons caused by or arising
from any
defect in or failure of any products manufactured by Licensee
under
the Licensed Processes covered by this agreement. Licensee
further
agrees to reimburse Licenser for any claims paid by Licenser in
good
faith under order of any court to any person with respect to the
products manufactured by Licensee under the Licensed Processes
covered
by this agreement.
7. Cancellation
a) Licenser shall have the right to cancel this agreement:
(i) for breach or default of any of its provisions if
Licensee fails to remedy such breach or default within thirty
(30)
days after Licensee has received notice from Licenser,
specifically
pointing out the nature of such breach or default, or
(ii) in the event that CPII Carbon Products
Industries Inc.
or its subsidiaries no longer retains control of the Plant
Operating
Agreement for any CSU.
b) Any notification required or permitted herein shall be
accomplished by registered letter with return receipt. The date
stamped by the Post Office Administration on the return receipt
of the
registered letter will be legally considered to attest the fact
in
case of controversies and shall be deemed to have been received
within
seven (7) days thereafter. Notices shall be sent to the
Licenser and
to the Licensee at the addresses herein before set out or to
such
other addresses as either party may notify to the other. If a
party
changes its address, notice thereof must be given in writing to
the
other party.
c) The failure of a party to give notice in writing to the
other
party or non fulfillment of any term or condition of this
agreement
shall not constitute a waiver thereof, nor shall the waiver in
writing
of any breach or non fulfillment of any term or condition of
this
agreement constitute a waiver of any other breach or non
fulfillment
of that or any other term or condition of this agreement.
8. Reversion of Rights
a) In the event
(i) of the cancellation of this agreement as
provided
for herein, or
(ii) of the expropriation or nationalization of the
operations of the Licensee, or
(iii) of the filing of a petition of bankruptcy or
insolvency by the Licensee, or the appointment of a receiver for
substantially all of the property of the Licensee, or
(iv) that CPII Carbon Products Industries Inc. or
one of
its subsidiaries no longer retains control of the Plant
Operating
Agreement for any CSU, or
(v) that any of the primary equipment of any plant
is
seized or falls into the hands of a third party,
all properties, including all rights, titles and interests
granted by
Licenser to Licensee under the terms of this agreement shall
immediately revert to Licenser.
b) In the circumstances of any reversion as set forth in
subparagraph (a) above, Licensee agrees to forbear from using
the
Licensed Processes immediately upon receiving notice thereof
from
Licenser. Licensee further agrees that said forbearance from
the use
and exploitation of the Licensed Processes shall be binding upon
its
successors and assigns.
9. Arbitration
Unless otherwise settled by the parties, all disputes,
controversies
or differences which may arise between the parties out of or in
relation to or in connection with this agreement shall be
finally
settled by arbitration pursuant to the appropriate arbitration
legislation of the Licensed Area.
10. Miscellaneous
a) Nothing contained herein or done hereunder shall be
construed as
constituting either party the agent of the other in any sense of
the
word whatsoever.
b) This agreement contains the entire agreement between the
parties
and no representations, inducements or agreements, oral or
otherwise,
not embodied herein shall have any force or effect.
c) Any agreement hereafter made shall be ineffective to
change,
modify, add or discharge in whole or in part, the obligations
and
duties under this agreement unless such agreement is in writing
and
signed by each party hereto.
d) Time shall be of the essence of this agreement and every
part
thereof.
e) The validity of any particular provision of this agreement
shall
not affect any of the provisions thereof, but the agreement
shall be
construed as if such invalid provisions were omitted.
f) This agreement shall be binding upon and inure to the
benefit of
the parties hereto, for themselves and their legal personal
representatives, successors and assigns.
IN WITNESS WHEREOF the parties hereto have executed
these presents.
CPII Carbon Products Industries Inc.
"Xxxxx Xxxxxx" by "Xxxxx X. Xxxx"
Witness Licensee
Southern Ventures, Inc.
"X. X. Xxxx" by "Xxxxxx X. Xxxxxx"
Witness Licensor
