TECHNOLOGY LICENSE AGREEMENT
Exhibit
10.3
This
Technology License Agreement (the “Agreement”) is made and entered into
8/17 , 2005 between Bio-Products International,
Inc. (“Bio-Products”), a Company incorporated under the laws of the State of
Alabama (the “Licenser), and SRS Energy, Inc., a Company incorporated under the
laws of the State of Delaware (the “Licensee”). The Licensor and Licensee may
hereinafter be either individually referred to as the “Party” or collectively
referred to as the “Parties”.
PREMISES:
Whereas,
Xx. Xxxxxxx X. Xxxx (“Xxxx”), in his continuous capacity as an employee of the
University of Alabama in Huntsville (“UAH”), developed certain proprietary
intellectual property, patented processes, and patent pending processes for
the
volume reduction, separation, recovery, and recycling of various components
of
waste materials, including without limitation, Municipal Solid Waste (“MSW”),
which technology has been reduced to United States Patent No. 6,306,248 (the
“U.S. Patent”) and Patent Cooperation Treaty, International Application No,
PCT/USO1/50049 (the “PCT”) (collectively, the “UAH Technology”). The UAH
Technology constitutes the first of the two parts of the “Technology” (as
defined herein). Xxxx is also a major stockholder, a Director, and the President
and CEO of Bio-Products;
Whereas,
pursuant to that certain Amended and Restated License Agreement, effective
August 18, 2003 (the “UAH License”) (a copy of which is attached as Exhibit A),
UAH granted an exclusive worldwide license to Bio-Products covering the UAH
Technology, including the rights to make, have made, use, lease and sell certain
products, and to practice certain processes, and to license some or all of
the
rights granted to others, such products and processes being more specifically
defined in the UAH License;
Whereas,
Xxxxxx X. Xxxxxx (“Xxxxxx”), doing business as M&M Consulting. Inc., a
Company incorporated under the laws of the State of Mississippi (“M & M),
developed certain proprietary intellectual property, equipment designs, and
process operating procedures related to the UAH technology, including the
expertise and know-how for fabrication and continuous operation of a small
waste
reduction process plant at a commercial sanitary landfill for a period of
eighteen months (collectively, the “Malley/M&M “Technology”‘). Malley (the
Developer”) and M&M Consulting, Inc. have assigned to Bio-Products
exclusively throughout the world all right, title and interest in the
Malley/M&M Technology (the “Malley/M&M Assignment”) (a copy of which is
attached as Exhibit B). The Malley/M&M Technology constitutes the second of
the two parts of the “Technology” (as defined herein). M & M is a
stockholder in Bio-Products and Malley is a Vice President of
Bio-Products;
Whereas.
Bio-Products desires to enter into a license agreement with the Licensee to
provide the Technology and future improvements for the construction and
operation of commercial scale municipal solid waste processing and recycling
facilities subject to the terms and conditions set forth herein;
Whereas,
the Licensee either has the financial resources, or has agreed to use their
best
efforts to secure the financial resources, for the design, engineering, and
fabrication of processing equipment and facilities, acquisition and permitting
of construction sites, purchase of processing equipment, construction and
operation of processing facilities, and marketing and promotion of commercial
facilities that are compatible with the Technology;
Whereas,
the Licensee desires to enter into a license agreement with Bio-Products to
use
the Technology for commercial purposes upon the terms and conditions hereinafter
set forth; and
Now,
therefore, in consideration of the premises and the mutual covenants contained
herein, the Parties hereto agree as follows;
ARTICLE
I – DEFINITIONS
For
purposes of this Agreement, the following words and phrases shall have the
following meanings:
1.1 “Technology”
shall mean the inventions, technology, and proprietary intellectual property
and
information developed by Bio-Products, Eley, Malley, and UAH created or
discovered prior to or after the effective date of this Agreement, including,
but not limited to, inventions, processes, process operating procedures and
discoveries, patents, patent applications, trade secrets, developments, facility
designs, equipment designs, works of authorship, formulas, software programs,
techniques, information, expertise, know-how, data, research, mask works, all
intellectual and industrial property rights of any sort, all rights of
integrity, disclosure and withdrawal, copyrights, trade names and trademarks,
which are related to the recycling, processing, collection, storage, disposal,
treatment, utilization or reduction of waste, including Municipal Solid Waste
(“MSW’’), or waste components or the conversion of the cellulosic biomass
product to fuels, chemicals, or other materials or other uses of cellulosic
biomass product for the production of energy or otherwise. Technology
as defined in this Agreement shall be limited to the use of the cellulosic
biomass product in applications in which the cellulosic product of waste,
including MSW, processed utilizing the Technology is used as the feedstock
specifically for conversion into fuel grade ethanol. Technology otherwise
includes without limitation, the UAH Technology, the Malley Technology, United
States Patent Number 6,306,248 and foreign patents that may be issued based
on
Patent Cooperation Treaty International Application Number
PCT/USO1/50049.
1.2 “Third
Party” shall mean any person or entity other than Bio-Products, Eley, Malley,
UAH, or the Licensee.
1.3 “Operating
Day” shall mean a day in which the facility (i) processes waste equal to or in
excess of the facility’s daily design capacity; or (ii) processes all of the
waste brought to the facility for processing on such day; or (iii) processes
as
much waste as allowed by any downstream limitations, such as but not limited
to,
any limitations on the downstream processing or disposal of the cellulosic
product
1.4 “Cellulosic
Biomass or Cellulosic Biomass Product” shall be defined as the smallest size
material obtained from screening the processed materials produced utilizing
the
Technology, typically through a one-half inch screening device, in which more
than fifty percent (50%) by dry weight can be chemically characterized as
material originating from forest products or other living plant
components.
ARTICLE
II – GRANT OF LICENSE;
2.1 Subject
to the terms and conditions of this Agreement, Bio-Products hereby grants an
exclusive license to the Licensee to utilize the Technology to construct and
operate commercial scale MSW processing and recycling facilities in the United
States of America (“USA”) in which the cellulosic biomass product of the process
Technology is used specifically for the production of fuel grade
ethanol,
2.2 The
term of this license shall extend from the effective date of this Agreement
for
a period of twenty (20) years, unless extended, terminated or replaced by
agreement of the Parties hereto, or unless otherwise extended or terminated,
as
elsewhere provided in this Agreement. This Agreement shall be extended
automatically until the expiration date of the last patent issued to
Bio-Products or UAH covering the Technology.
2.3 Anything
to the contrary contained elsewhere in this Agreement notwithstanding,
Bio-Products shall retain all of the exclusive rights granted under the UAH
License and all of the exclusive rights obtained by the Malley/M&M
Assignment, including the worldwide exclusive right to license some or all
of
its rights not granted to the Licensee under this Agreement to Third Parties
to
utilize the Technology.
ARTICLE
III – FEES, ROYALTIES, AND OTHER CONSIDERATION
3.1 The
Licensee shall pay to Bio-Products a Process Royalty of one dollar and fifty
cents (S1.50) for every ton of waste received and processed at each facility
to
be constructed and operated under this Agreement, excluding waste received
and
processed at the proof of concept validation ethanol demonstration plant, which
shall have a capacity of not more than one hundred (100) tons per day of MSW,
and which may be only a part of a larger waste processing facility, The Process
Royalty payments shall become payable on the thirtieth (30th) day following
the
end of the calendar month in which such amount becomes due and owing until
this
Agreement or any extension thereof expires or is terminated. Bio-Products agrees
that no Process Royalty shall be due and payable with respect to waste processed
at any facility until such facility has been in operation for thirty (30)
Operating Days, as defined in Paragraph 1.3 (the Operational Date”). Licensee
shall pay said Process Royalty by wire transfer of funds to a Bio-Products
bank
account.
3.2 The
Licensee shall pay to Bio-Products a By-Product Royalty of two and one half
percent (2.5%) of the gross sales price in excess of ten dollars ($10.00) per
ton obtained from the sale of recyclable by-products, excluding the cellulosic
biomass product, obtained from processing waste, including MSW, utilizing the
Technology at each facility to be constructed and operated under this Agreement,
excluding waste received and processed at the proof of concept validation
demonstration plant. The By-Product Royalty shall become due and payable on
the
ninetieth (90th) day following
the
end of the calendar quarter in which such recyclable product sales are made
until this Agreement or any extension thereof expires or is terminated. The
above notwithstanding, no By-Product Royalty shall be due and payable with
respect to the cellulosic product produced at the facility until the facility
reaches its Operational Date. Licensee shall pay said By-Product Royalty by
wire
transfer of funds to a Bio-Products bank account.
3.3 As
additional consideration and for their experience and know-how regarding the
Technology, the Licensee shall pay Bio-Products a monthly fee for Technical
Services for each facility to be constructed and operated under this Agreement.
Such Technical Services shall initially be provided by Xxxx and Xxxxxx who
are
employees of Bio-Products, and who agree to provide whatever Technical Services
are reasonably requested of them by Licensee. Payments to Bio-Products for
Technical Services shall be ten thousand dollars ($10,000) per month payable
on
or before the first (1st) business
day of
each month beginning sixty (60) days after funding is secured for the proof
of
concept validation demonstration plant. For each subsequent facility, Licensee
shall pay Bio-Products for Technical Services in the amount of ten thousand
dollars ($10,000) per month beginning within thirty (30) days of the date of
submission of the first permit to construct each subsequent facility. Payments
for the Technical Services of Bio-Products shall be increased to twenty thousand
dollars ($20,000) per month commencing on the first business day of the month
following the Licensee’s initial down payment for the process vessels for
construction of the Licensee’s first commercial scale facility and continuing
each month thereafter until the first commercial facility reaches its
Operational Date. After the. Operational Date of the first plant, the monthly
Technical Services fee shall he reduced to ten thousand dollars ($10,000) for
a
period of twelve (12) months. Additional Technical Services, unrelated to the
above, may be provided by Bio-Products employees at the request of the Licensee
at a rate of one hundred dollars ($100) per hour. If at any time Bio-Products
fails to undertake Technical Services requested, then Licensee may cease all
payments as set forth in this Paragraph 3.4, until such time as the failure
to
undertake the Technical Services requested is remedied.
3.4 Additionally,
with respect to the Technical Services provided by Bio-Products, the Licensee
shall either provide pre-paid expense accounts or reimburse Bio-Products
employees directly for the reasonable transportation, lodging, food, and other
expenses incurred by Bio-Products employees in the performance of such Technical
Services for the Licensee. In either case, Bio-Products employees shall submit
weekly, itemized expense reports and receipts to the Licensee for periods which
expenses are incurred. If the Licensee has or establishes a travel
expense policy and procedure, Bio-Products employees shall adhere to said
policy, unless the Parties agree, in writing, otherwise. The Licensee
shall pay Bio-Products employees directly within ten (10) business days of
receipt of such expense reports.
3.5 The
Licensee may enter into research and development contracts with Bio-Products,
with Xxxx as the principal investigator, to be defined front time to time in
exchange for results and information. Such results and information, including
but not limited to test results, notes, and reports regarding the work performed
as requested by the Licensee shall be turned over to the Licensee by Xxxx within
thirty (30) days of completion, and all such results and information shall
be
kept confidential and shall not be disclosed in any harm without first obtaining
approval from the Licensee. Any and all research and development results from
contracts with Licensee are confidential and may not be provided to Third
Parties without the written permission of Licensee. If permission is granted
by
Licensee for Third Parties to use such unrelated technology then Licensee shall
be compensated at the rate of 20% of royalties received by Bio-Products for
the
use of the unrelated technology by a Third Party. Xxxx shall allow the Licensee
to visit the pilot plant facility for any purposes, including demonstrations,
recyclable product production, and testing upon reasonable notice by the
Licensee and mutual agreement with Xxxx as to the dates and times. Xxxx shall
also provide training for the Licensee’s employees to use the licensed
Technology at the pilot plant. Xxxx shall be compensated at a rate of five
hundred dollars ($500.00) per day plus expenses for all pilot plant operations.
For demonstration, recyclable product production, testing, and training at
the
pilot plant at the request of the Licensee, the Licensee shall compensate
Bio-Products for the expenses for such demonstration and test runs as
follows:
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(a) For
Each Series of Test Runs:
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(i) Pilot
Plant Preparation/Set up
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$500
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(ii) Pilot
Plant Clean-Up Shutdown
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$500
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(b) For
Each Test Run in a Series:
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(i) Boiler
Fuel/Water Treatment
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$200
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(ii) Labor
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$800
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(iii) Waste
Disposal
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$100
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(c) Follow
up Costs:
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(i) Small
Sample Collection, Packaging & Storage
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$100
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(ii) Large
Sample Collection & Packaging
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$250
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(iii) Dry
Cellulose Product per ton
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$500
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(iv) Shipping
Containers & Shipping Costs
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Actual,
plus 25%
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(d) Additional
expenses:
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(i) Tractor
Rental
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$100/day
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(ii) Auto/Truck
mileage for Laborers
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$0.40/mile
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(iii) Truck
towing mileage
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$0.80/mile
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(iv) Local
Lodging for Laborers
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$50/day
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(v) Per
Diem allowance for Laborers
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$25/day
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3.6 For
the proof of concept validation ethanol demonstration plant to be constructed
and operated under this Agreement, the Licensee agrees that the facility design,
equipment designs and specifications, equipment fabricators, engineering firm,
construction contractors, and sub-contractors, and all facility management
and
labor personnel involving the process Technology must be approved by
Bio-Products, which approval shall not be unreasonably withheld. The Licensee
also agrees to begin the facility permitting, facility and equipment design,
equipment selection, and engineering for the proof of concept validation
demonstration plant within one (1) year from the date of execution of this
Agreement and to begin placing orders for equipment and construction site work
within one (1) year from the date of approval of all permitting to begin
construction of the proof of concept validation demonstration plant.
Notwithstanding the foregoing, Licensee shall begin placing orders for equipment
and shall commence and diligently pursue construction and completion of the
proof of concept validation demonstration plant no later than three (3} years
from the effective date of this Agreement.
3.7 Due
to the proprietary nature of the process vessel design, the Licensee agrees
that
Bio-Products shall maintain the exclusive right of vessel design, engineering,
and manufacturing, and the Licensee shall purchase all required vessels
exclusively from Bio-Products. The purchase price shall be cost plus
fifteen percent (15%), not including shipping costs or applicable taxes. All
other equipment required for construction and operation of waste processing
and
recycling facilities utilizing the Technology may be purchased from other
venders. The vessels are to be built to Bio-Products’ specifications in
Hattiesburg, Mississippi and shipped to the requested locations. Shipping costs
and applicable taxes shall be itemized and included in the cost of vessels
and
shall be invoiced to and paid by the Licensee. The Licensee will be provided
with a written operator’s manual and a standard equipment warranty for the
process vessels.
3.8 In
order to maintain the exclusivity of this Agreement, the Licensee further agrees
that, within two (2) years from the Operational Date of the proof of concept
validation demonstration plant, the Licensee shall begin the facility
permitting, facility and equipment design, equipment selection, and engineering
for construction of the first commercial scale facility with a capacity to
process at least five hundred (500) tons per day, The Licensee also agrees
to
expand existing facilities and/or add new facilities with design capacity for
processing at least an average of an additional one thousand (1,000) tons per
day of MSW each year thereafter, unless prevented from doing so by a regulatory
or government agency. If Licensee fails to perform as specified under this
Paragraph 3.8 for two (2) consecutive years, then this Agreement shall convert
from an exclusive to a non-exclusive license.
3.9 The
Licensee shall maintain all such books and records as are necessary to
accurately determine all amounts due and payable to Bio-Products, Xxxx, and
Malley under Paragraphs 3.1, 3.2, 3.3, and 3.4 of this Agreement, which books
and records the Licensee shall make reasonably available, upon the submission
of
a written request from Bio-Products for inspection by Bio-Products and or its
designated representative at a time mutually convenient to Bio-Products and
the
Licensee. Rio-Products agrees to treat all such information respecting
Licensee’s books and records as confidential.
3.10 All
payments shall be paid to Bio-Products at the addresses set forth in Paragraph
14.15 of this Agreement or as otherwise notified in writing by, the
Parties.
ARTICLE
IV - INVENTIONS AND DISCOVERIES
4.1 All
rights, title, and interest in and to the Technology and all patent applications
and patents thereon or relating thereto as presently exist, specifically United
States (Patent No. 6,306,248 and foreign patents filed on Patent Cooperation
Treaty International Application No. PCT/US01/50049 shall remain the sole and
exclusive property of UAH. In addition, future patents and patent
applications, both foreign and domestic, with respect to the existing Technology
shall be applied for and prosecuted, and if received, shall issue solely in
Bio-Products’ name (See Paragraph 2.7 of the UAH License., attached hereto as
Exhibit A).
4.2. All
right, title and interest in and to all future inventions, processes,
enhancements, improvements and other discoveries made by Bio-Products, or any
person acting for and under the direction of Bio-Products or the Licensee,
or
any other employees or consultants of Bio-Products or the Licensee, relating
specifically to the design, engineering, fabrication, and operation of the
process vessels required to utilize the Technology, whether or not patentable,
shall be owned exclusively by Bio-Products. All patent applications and patents
thereon, foreign and domestic, whether made by any of the Parties, or jointly
by
the Parties, or jointly by at least one employee of each Party, shall be owned
exclusively by Bio-Products. Bio-Products shall add the names of Licensee’s
employees and consultants that make substantive contributions to the development
of such patent applications as co-inventors. To the extent required to
accomplish the foregoing, the Licensee and/or its employees and consultants
shall execute any and all assignments of patents or other documents to
Bio-Products, if required for any such patents to issue in Bio-Products’ name.
Bio-Products shall provide the Licensee with detailed information concerning
all
such related, future inventions, processes, enhancements, improvements and
other
discoveries. Bio-Products hereby grants to the Licensee an exclusive license
in
the USA to utilize all such future inventions, processes, enhancements, and
other discoveries at no additional royalty or cost, except that the term of
this
Agreement shall be extended automatically to the expiration date of any
subsequently issued patent.
4.3 The
Technology of Bio-Products and/or UAH shall be maintained by the Licensee free
and clear of all liens and encumbrances or rights of any Third
Party. Licensee shall not sub-license, encumber, transfer or assign
the Technology of Bio-Products and/or UAH without the written consent of
Bio-Products, except as provided in this Agreement.
4.4 The
provisions Paragraphs 4.1, 4.2, and 4.3 of this Article shall apply to both
foreign and domestic inventions, processes, enhancements, improvements and
other
discoveries relating to the Technology, whether or not patentable, and to all
patent applications and patents related thereto.
4.5 All
right, title and interest in and to all future inventions, processes,
enhancements, improvements and other discoveries made jointly by Bio-Products
and Licensee, or any person acting for and under the direction of Bio-Products
and Licensee, or any other employees or consultants of Bio-Products and
Licensee, relating to the use of the cellulosic biomass product for the
production of fuel grade ethanol or any other by-products obtained from the
processing of MSW utilizing the Technology, whether or not patentable, shall
be
owned jointly by the Parties or jointly by at least one employee of each Party,
shall be jointly owned by Bio-Products and Licensee. The Parties
shall add the names of all employees and consultants that make substantive
contributions to development of such patent applications as co-inventors. To
the
extent required to accomplish the foregoing, Bio-Products and Licensee and/or
their respective employees and consultants shall execute any and all assignments
of patents or other documents to Bio-Products and Licensee, if required for
any
such patents to issue jointly in Bio-Products’ and Licensee’s
names. Bio-Products and Licensee shall share equally in the costs of
patent preparation, application, prosecution, and maintenance for all such
jointly owned inventions The Parties shall provide each other with detailed
information concerning all such related, future inventions, rocesses,
enhancements, improvements and other discoveries, Bio-Products and Licensee,
as
co-owners of any such jointly developed inventions, shall jointly license such
co-owned inventions to Third Parties. The term of this Agreement shall be
extended automatically to the expiration date of any jointly issued
patent.
4.6 If
Licensee, its employees, and/or its consultants, not including any Bio-Products
e employees or consultants performing Technical Services for Licensee, should
alone develop a patentable invention regarding the use of the cellulosic product
in any applications, including the production of fuel grade ethanol or any
other
by-product obtained from the processing of MSW utilizing the Technology, then
Licensee may, in its sole discretion, pay all of the costs of patent
preparation, application, prosecution, and maintenance for said invention with
Licensee being the exclusive owner of such a patented invention. Licensee hereby
grants Bio-Products a non-exclusive right to use any such Licensee-owned
patented invention in Bio-Products facilities worldwide, with royalties to
be
negotiated in good faith between the Parties.
4.7 The
Parties shall cooperate in good faith to protect any such invention, process,
enhancement, improvement or other discovery, and to make all necessary
applications, assignments, as provided herein, and filings, including patents,
industrial designs, copyright registrations, trademark registrations and other
legal protections, necessary or helpful to protect their interests
therein.
ARTICLE
V – REPRESENTATIONS AND WARANTIES
OF
BIO-PRODUCTS
Bio-Products
hereby represents and warrants, as of the date hereof, as follows:
5.1 Bio-Products
is a corporation, duly organized, validly existing and in good standing under
the laws of the State of Alabama. Bio-Products has all requisite power and
authority, corporate and otherwise to execute, deliver, observe, and perform
its
obligations under, this Agreement. The execution, delivery and performance
by
Bio-Products of this Agreement have been duly authorized by all necessary
corporate action and does not and will not violate Bio-Products’ Articles of
Incorporation or Bylaws or any provision of any agreement, law, rule,
regulation, order, writ, judgment, injunction, decree, determination, or award
presently in effect to which Bio-Products is a party or is subject.
5.2 Bio-Products
possesses all such franchises, licenses, patents, or other rights necessary
to
enter into, and satisfy its obligations under, this Agreement, without (to
the
best of Bio-Products’ knowledge) any conflict with, or infringement of, the
franchises, licenses, patents or other rights of Third Parties.
5.3 Bio-Products
has the exclusive rights to grant some or all of its rights or licenses to
Third
Parties to utilize the Technology not granted to the Licensee under this
Agreement in various geographical locations worldwide.
5.4 There
is no action, suit, proceeding or claim pending or, to the knowledge of
Bio-Products, threatened against Bio-Products in any way relating to the
Technology. There is no action, suit, proceeding or claim pending or, to the
knowledge of Bio-Products, threatened against Bio-Products’ properties, assets
or business which might have a materially adverse effect on Bio-Products’ rights
or ability to perform this Agreement in accordance with its terms. No
investigation by any governmental agency is pending or threatened against
Bio-Products or the properties, business, or goodwill of Bio-Products, which
has
or might have a materially adverse effect on Bio-Products’ rights or ability to
perform this Agreement in accordance with its terms. There is no outstanding
order, writ, injunction, or decree of any court, government or governmental
agency against Bio-Products or its assets, business, or goodwill, Bio-Products
is not in violation of any law or governmental regulation applicable to it,
to
the Technology, or to its properties or business, including but not limited
to
any applicable safety, environmental control, or similar law or
regulation.
5.5 There
is no claim or demand of any Third Party pertaining to, or any proceedings,
which are pending or, to the knowledge of Bio-Products, threatened which
challenge the rights of Bio-Products in respect of any of the Technology. No
technology owned, licensed or used by Bio-Products is subject to any outstanding
order, decree, judgment, or stipulation by or with any court, arbitrator or
administrative agency, or, to the best of Bio-Products’ knowledge, infringes
upon the rights of Third Parties
5.6 Bio-Products
reserves the right to, but as of the effective date of this Agreement has not,
put any Third Party on notice of and is not a party to any suit alleging, any
infringement or alleged infringement of any of the
Technology. Bio-Products is aware that there are currently bases for
putting certain Third Parties on notice and/or filing claims, action, or
litigation alleging infringement of the Technology.
ARTICLE
VI – INDEMNITY AND INSURANCE
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6.1
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(a)
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The
Licensee shall indemnity, defend and hold Bio-Products and UAH
and their
respective Trustees, Directors, officers and employees harmless
from and
against any and all claims and expenses, including reasonable
attorneys’
fees and other legal expenses, arising out of the death or injury
of any
person or persons, any damage to property, or any other claim,
proceeding,
demand, expense, or liability of any kind whatsoever resulting
from, or
attributable to utilization of the. Technology (see Paragraph
10.3 below
and Article VIII of Exhibit
A).
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(b)
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At
least ten (10) days prior to commencement of vessel installation
and
operating activities on the site of each facility of the Licensee
to be
constructed and utilize the Technology pursuant to this Agreement,
the
Licensee shall provide to Bio-Products copies of certificates evidencing
the purchase of policies of insurance against the liabilities described
in
Paragraph 6.1(a), naming UAH, Bio-Products, and all of the Parties
hereto
as additional insureds, in amounts not less than one million dollars
($1,000,000) per claim.
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VII
– PATENT INFRINGEMENT
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7.1
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(a)
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Bio-Products
and UAH shall notify the Licensee, and the Licensee shall notify
Bio-Products and UAH, of any actual or threatened infringement
claims or
suits that are or may be brought or made against any Party to
this
Agreement within five (5) days after learning of the existence
thereof. UAH may elect to defend Licensee, at UAH’s sole costs
and expense from and against all infringement suits relating
to the
patents assigned to UAH. In connection with the defense by UAH
of any Third Party claim, the Licensee, at the request and expense
of UAH,
shall take all such actions as are necessary or desirable to
assist UAH in
any such action. Licensee will be reimbursed by UAH for out-of-pocket
expenses incurred as a result of such action. UAH shall not,
without Licensee’s prior written consent, grant any license rights granted
under this Agreement in connection with the settlement or other
disposition of any infringement
action.
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(b)
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In
the event UAH elects not to defend Licensee from and against any
actual or
threatened infringement claim or suit, Bio-Products shall have the
right
to defend such suit or claim. Bio-Products may elect to defend Licensee,
at Bio-Products’ sole costs and expense, from and against all infringement
suits relating to the patents assigned to UAH and from and against
any
actual or threatened infringement claims or suits that are or may
be
brought or made against any Party to this Agreement relating to the
Technology as defined herein that was not assigned to UAH. If Bio-Products
cannot for financial reasons take such action, Bio-Products would
request
Licensee to provide such financial resources as are necessary to
take such
action. Licensee, in its sole discretion, may elect to provide the
financial resources for Bio-Product and Licensee to jointly pursue
such
action. Any compensation recovered from such action would first be
used to
reimburse the Parties for their out-of-pocket expenses in relation
to the
suit, and any remaining funds would be divided equally between
Bio-Products and Licensee. In the event of an unsuccessful outcome
of such
suit, any damages and out-of-pocket expenses of Licensee would be
deducted
from future royalty payments payable to Bio-Products at a rate of
fifty
percent (50%) of the amount due and payable from each royalty payment
until all such damages and out-of-pocket expenses are
recovered.
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(c)
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In
the event Bio-Products elects not to defend Licensee from and against
any
actual or threatened infringement claim or suit, Licensee shall have
the
right to defend such suit or claim. Licensee may elect to defend
such
suit, at Licensee’s sole costs and expense, from and against all
infringement suits relating to the patents assigned to UAH and from
and
against any actual or threatened infringement claims or suits that
are or
may be brought or made against any Party to this Agreement relating
to the
Technology as defined herein that was not assigned to UAH. Licensee
must
agree to indemnify UAH and Bio-Products, the respective Trustees
or
Directors, officers and employees from any damages that may occur
as a
result of suit. Any compensation recovered from such action would
first be
used to reimburse the Parties for their out-of-pocket expenses in
relation
to the suit, and any remaining funds would be belong Licensee. In
the
event of an unsuccessful outcome of such suit, any damages and
out-of-pocket expenses of UAH and Bio-Products would be reimbursed
by
Licensee.
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(d)
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The
Licensee shall at its own expense defend all infringement suits relating
to any variations, modifications and alterations of the Technology
that
were made by the Licensee without the written acknowledgement and
consent
of Bio-Products to make any such variations, modifications, and
alterations of the Technology, The Licensee shall not be entitled
to any
deduction from amounts due Bio-Products on account of such
expenses.
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7.3 In
connection with the defense by Bio-Products of any Third Party claims not
addressed in Paragraphs 7.1 or 7.2, the Licensee shall participate and
cooperate, as Bio-Products shall, from time to time, reasonably request. If
the
Licensee is called upon to take action in a way which shall require it to make
available its own personnel or to retain counsel and/or experts, the Licensee
shall be entitled to a deduction from any amounts due Bio-Products under this
Agreement. If there are no such amounts due Bio-Products under this Agreement,
then Bio-Products agrees to pay Licensee all personnel, counsel, expert and
courts costs thirty days after notification of such expenses by the Licensee
in
connection with Bio-Products’ defense of such suits.
ARTICLE
VIII – FABRICATION AND CONSTRUCTION
8.1 The
Licensee shall use its best efforts to assure that all construction and
fabrication meets or exceeds all required safety standards of the United States
and the jurisdiction wherein the Technology shall be utilized.
8.2 Bio-Products
will use its best efforts to assure that all designs, processes, formulas,
recipes, and plans to be provided to the Licensee meet or exceed all applicable
and material safety standards of the United States and any jurisdiction wherein
the Technology shall be utilized.
8.3 The
Licensee shall use its best efforts to obtain, or cause to be obtained, all
material local, state and federal permits necessary for the construction and
operation of any facility that will utilize the Technology.
ARTICLE
IX – CONFIDENTIALITY
9.1 The
Parties hereto each possess confidential information of both a technical and
a
non-technical nature. It is understood that it has been and may be necessary
for
one to disclose same to the other, and the Parties agree such disclosures have
been and will be made under and subject to the following terms (Copies of
respective Non-disclosure/Confidentiality Agreements are attached hereto as
Exhibits C and D).
ARTICLE
X – AGREEMENT BETWEEN RIO-PRODUCTS AND UAH
10.1 Bio-Products
shall comply with all of the terms and conditions of, and perform all of its
obligations under, the UAH License. Bio-Products shall not agree to any
amendment or modification of the UAH License that would materially affect the
terms and conditions of this Agreement without the written consent of
Licensee.
10.2 If
at any time Bio-Products defaults in its duties in connection with, or by its
conduct attempts to or actually terminates the UAH License which default and/or
termination affects or terminates the ability of Bio-Products to grant the
license contained in this Agreement, then the Licensee will be automatically
entitled to and may at its sole discretion enter into contractual agreements
with and pay directly to UAH the amounts necessary to obtain or maintain the
UAH
License. If Licensee does not enter into contractual agreements with UAH, but
rather cures any financial default of Bio-Products only, then such sums paid
to
UAH on behalf of Bio-Products shall be deducted from any royalties owed to
Bio-Products under this Agreement. If no such royalties are owed to Bio-Products
under this Agreement then such sums will be treated as an interest free loan
to
Bio-Products.
10.3 Any
provision of this Agreement to the contrary notwithstanding, this Agreement
shall be construed and interpreted so that the terms and conditions hereof
shall
not be inconsistent with the terms and conditions of the UAH License, attached
hereto as Exhibit A.
ARTICLE
XI – PUBLICITY OF LICENSE
11.1 All
documents and visual aids using the name of The University of Alabama in
Huntsville in any manner require submittal to and approval of the University.
Upon the request of the Licensee, Bio-Products shall cooperate and provide
assistance in the development of public statements, advertising, sales
literature or promotional materials to describe or promote the Technology and
assist in gaining University approval.
ARTICLE
XII – VISITS TO PREMISES
12.1 The
Licensee shall, from time to time, permit Bio-Products to bring visitors to
tour
any facility utilizing the Technology, provided, that Bio-Products shall notify
the Licensee at least seventy-two (72) hours in advance of any proposed visit,
that such visits shall be limited to reasonable times and intervals, and
contingent upon each visitor signing an appropriate Confidentiality,
Non-Disclosure and Non-Competition Agreement, and such visitors shall also
be
subject to all relevant safety and other regulations that apply to any other
visitors to the facility. No persons other than those designated by Bio-Products
shall have the right to visit any facility utilizing the Technology without
the
Licensee’s express written consent.
ARTICLE
XIII – EVENTS OF DEFAULT AND REMEDIES
13.1. The
Licensee shall be in breach of this Agreement in the event of
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(a)
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The
Licensee’s failure to make any payment hereunder on or before the date on
which such payment becomes due and payable and the continuation of
such
failure unremedied for thirty (30) days after written notice thereof
has
been given to the Licensee by
Bio-Products;
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(b)
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The
Licensee’s failure to observe or perform any covenant, condition or
agreement contained in this Agreement and the continuation of such
failure
unremedied for thirty (30) days after written notice thereof has
been
given to the Licensee by Bio-Products, unless such breach can not
be
remedied within such thirty (30) days for reasons beyond the Licensee’s
control, in which case the Licensee shall have a reasonable time
within
which to remedy such breach; or
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(c)
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Any
warranty or representation made herein by the Licensee and contained
in
this Agreement, shall prove to have been false, misleading or incorrect
in
any material respect as of the date made, or shall have failed to
state a
fact necessary in order to make the statements made not
misleading.
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No
termination of this Agreement shall relieve the Licensee of the obligation
to
pay to Bio-Products all royalties, fees, and other payments accrued at the
time
of the termination.
13.2 Bio-Products
shall be in default of this Agreement in the event of:
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(a)
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Bio-Products’
failure to observe or perform any covenant, condition or agreement
contained in this Agreement or in the UAH License and the continuation
of
such failure unremedied for thirty (3.0) days after written notice
thereof
shall have been given to Bio-Products by the
Licensee;
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(b)
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Any
warranty or representation made herein by or on behalf of Bio-Products,
contained in this Agreement or in the UAH License, shall prove to
have
been false, misleading or incorrect in any material respect as of
the date
made, or shall have failed to state a fact necessary in order to
make the
statements made not misleading; or
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(c)
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If
at any time BM-Products defaults in its duties in connection with,
or by
its conduct attempts to or actually terminates the UAH License which
default and/or termination affects or terminates the ability of
Bio-Products to grant the license contained in this Agreement, or
affects
or terminates Licensee’s ability to continue operation of existing plants
or build new plants.
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13.3 The
Licensee shall have the following remedies for breach or default of this
Agreement or the UAH License by Bio-Products:
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(a)
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Upon
Bio-Products’ breach or termination of the UAH License or this Agreement,
such that the breach or termination has affected the ability of Licensee
to continue operation of existing plants and preclusion of building
new
plants, the Licensee may at its option terminate this Agreement and
contract directly with UAH as provided in this Agreement., The Licensee
and any sub-licensee shall utilize the Technology, free of any royalties,
fees, and other amounts accrued through the date of such default
or breach
and thereafter.
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(b)
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In
addition to any other right or remedy available to the Licensee under
this
Agreement or in law or equity, upon Bio-Products’ breach or default of
this Agreement or the UAH License, the Licensee shall be entitled
to
withhold and/or offset any and all royalties or other fees due to
Bio-Products under this Agreement.
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(c)
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Notwithstanding
anything to the contrary in this Agreement, the Licensee may terminate
this Agreement at any time upon six (6) months prior written notice
to
Bio-Products, at which time the Licensee will cease utilizing the
Technology, and pay to Bio-Products any royalties, fees and other
amounts
accrued through the date of such termination. Immediately upon termination
of this Agreement all rights, privileges and licenses granted to
the
Licensee hereunder shall revert to Bio-Products, including all
sub-licenses of facilities granted by the
Licensee.
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13.4 Upon
the Licensees’ breach of this Agreement and it’s failure to cure said breach as
provided above in 13.1, Bio-Products may, at its option, (i) terminate this
Agreement, at which time Licensee shall cease utilizing the Technology and
such
termination shall relieve Licensee of its obligations to pay Bio-Products any
further royalties or fees other than those fees and royalties already accrued
through the date of termination and all sub-licenses granted by Licensee shall
be assigned to Bio-Products; or (ii) Bio-Products may seeks to recover such
damages to which it may be entitled by applicable law, including but not limited
to, equitable and injunctive relief.
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13.5
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(a)
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Upon
Bio-Products’ breach or termination of the UAH License or this Agreement,
such that the breach or termination has affected the ability of
Licensee
to continue operation of existing plants and preclusion of building
new
plants, the Licensee may at its option terminate this Agreement
and
contract directly with UAH as provided in this Agreement., The
Licensee
and any sub-licensee shall utilize the Technology, free of any
royalties,
fees, and other amounts accrued through the date of such default
or breach
and thereafter.
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(b)
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Neither
of the Parties nor the arbitrator may disclose the existence,
content or
results of any arbitration hereunder without the prior written
consent of
the Parties except to counsel, accountants, and other need
to know
professionals.
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(c)
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All
fees and expenses of the arbitration shall be born by the
Parties equally.
However, each Party shall bear the expense of its own counsel,
experts,
witnesses, and preparation and presentation of
proofs.
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(d)
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In
the event that a claim or controversy over the right
of any Party to
terminate this Agreement shall be submitted for arbitration,
this
Agreement shall continue in full force and effect,
and the termination
shall be of no effect, until the arbitrator renders
a final
decision..
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13.6 In
the event of the commencement of a voluntary case under the Bankruptcy Code
by
the Licensee, or Licensee’s acquiescence in an involuntary petition under the
Bankruptcy Code which voluntary or involuntary case remains undismissed for
a
period of ninety (90) days or more, the right and license conferred under this
Agreement shall automatically become and shall thereafter be null and void.
The
commencement of a voluntary case under the Bankruptcy Code by Bio-Products,
or
Bio-Products’ acquiescence in an involuntary petition under the Bankruptcy Code,
which voluntary or involuntary case remains undismissed for a period of ninety
(90) days or more, shall be treated as a material breach of the
Agreement,
ARTICLE
XIV – GENERAL PROVISIONS
14.1 The
titles of the various articles and sections of this Agreement are solely for
convenience of reference and are not part of this Agreement for purposes of
interpreting the provisions hereof.
14.2 The
Licensee may assign all of its rights and obligations under, and all of its
interest in, this Agreement, including without limitation the license granted
hereby, either (i) in a transaction accompanied by the sale or other transfer
of
the Licensee’s entire business, its stock, or substantially all of its assets,
or (ii) to any other entity owned by the same shareholders of Licensee and
this
Agreement shall be binding upon, and inure to the benefit of, any such successor
or assign of the Licensee, provided that Bier-Products consents in writing,
such
assignment shall not be unreasonably conditioned, withheld, or
delayed..
14.3 Nothing
in this Agreement shall be deemed or construed to constitute or to create a
partnership, joint venture or agency between the Parties. Except as may be
otherwise provided herein, neither Party shall have any authority to bind the
other Party in any respect.
14.4 If
any provision of this Agreement is or becomes unenforceable under any law of
mandatory application, it is the intent of the Parties hereto that such
provision will be deemed severed and omitted herefrom, the remaining portions
hereof to remain in full force and effect as written.
14.5 The
waiver by any Party of any failure on the part of any other Party to perform
any
of its obligations under this Agreement shall not be construed as a waiver
of
any failure or continuing failure or failures, whether similar or dissimilar
thereto.
14.6 This
Agreement, including the exhibits hereto, constitutes the entire Agreement
between the Parties with respect to the subject matter hereof and supersedes
all
prior and contemporaneous agreements between the Parties, whether oral or
written, related to the subject matter hereof. This Agreement may be amended
or
modified only by a written instrument executed by the authorized representatives
of the Parties hereto.
14.7 This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be a duplicate original, but all of which, taken together, constitute
a single document. This Agreement may be executed by each Party on separate
copies, which copies, when combined so as to include the signatures of all
Parties, shall constitute a single counterpart of this Agreement.
14.8 This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Alabama.
14.9 Each
Party to this Agreement shall execute all instruments and documents and take
all
actions as may be reasonably required to effectuate this Agreement.
14.10 For
purposes of venue and jurisdiction, this Agreement shall deemed made and to
be
performed in the City of Huntsville, Alabama.
14.11 This
Agreement and all exhibits contain the entire agreement between the Parties
to
this Agreement with respect to the subject matter of this Agreement, is intended
as a final expression of such Parties’ agreement with respect to such terms as
are included in this Agreement, is intended as a complete and exclusive
statement of the terms of such agreement, and supersedes all negotiations,
stipulations, understandings, agreements, representations and warranties, if
any, with respect to such subject matter, which precede or accompany the
execution of this Agreement.
14.12 Whenever
the context so requires in this Agreement, all words used in the singular shall
be construed to have been used in the plural (and vice versa), each gender
shall
be construed to include any other genders.
14.13 Subject
to any restriction on transferability contained in this Agreement, this
Agreement shall be binding upon and shall inure to the benefit of the
successors-in-interest and permitted assigns of each Party to this Agreement.
Nothing in this Paragraph shall create any rights enforceable by any Third
Party
that is not a Party to this Agreement, except for the rights of the
successors-in-interest and permitted assigns of each Party to this Agreement,
unless such rights are expressly granted in this Agreement to other specifically
identified Third Parties.
14.14 Except
as otherwise provided in this Agreement, in the event any litigation,
arbitration, mediation, or other proceeding (“Proceeding”) is initiated by any
Party against any other Party to enforce, interpret or otherwise obtain judicial
or quasi-judicial relief in connection with this Agreement, the prevailing
Party
in such Proceeding shall be entitled to recover from the unsuccessful Party
all
costs, expenses, and reasonable attorneys’ fees relating to or arising out of
(a) such Proceeding (whether or not such Proceeding proceeds to judgment),
and
(b) any post- judgment or post-award proceeding including without limitation
one
to enforce any judgment or award resulting from any such Proceeding. Any such
judgment or award shall contain a specific provision for the recovery of all
such subsequently incurred costs, expenses, and actual attorneys’
fees.
14.15 Any
notice or other communication pursuant to this Agreement shall be sufficiently
made or given five days after the date sent, postage pre-paid, by certified
mail, return receipt requested, if sent to the following addresses, or to such
other address as the Party may from time to time designate to the other Parties
in writing:
In
the
case of BM-Products:
Xx.
Xxxxxxx X. Xxxx, President & CEO
BIO-PRODUCTS
INTERNATIONAL, INC
0000
Xxxxxxxx. Xxxx, XX
Xxxxxxxxxx,
Xxxxxxx .00000 XXX
000-000-0000
(phone)
000-000-0000
(cellular)
000-000-0000
(fax)
eleym
@email.uah.eda (email)
In
the
case of SRS Energy, Inc:
Xxxxxx
X.
Xxxxxxxxx, Xx., President
SRS
Energy, Inc.
0000
Xxxxxxx Xxxx., Xxxx 000
Xx.
Xxxxx, XX 00000
000-000-0000
(phone)
000-000-0000
(cellular)
____________
(fax)
xxxxxxxxxxxx@xxxxxxxxx.xxx
(email)
Each
Party shall make a reasonable, good faith effort to ensure that it will accept
or receive notices to it that are given in accordance with this paragraph.
A
Party may change its address for purposes of this paragraph by giving the other
Parties written notice of a new address in the manner set forth
above.
14.16 In
the event either Party hereto shall be rendered wholly or partly unable to
perform its obligations under this Agreement by reason of causes beyond its
control, including but not limited to acts of Nature, acts of terrorism, acts,
omissions, or regulation of any government or agency thereof, judicial action,
labor disputes, or transportation failure, except as specified herein, the
performance of the obligations of such Party insofar as it is affected by such
condition shall be suspended for the duration of such condition, provided the
Party affected advises the other Party of the basis of its inability within
ten
(10) days of the beginning of such known inability. After the cessation of
the
condition causing such inability, the Party suffering such inability shall
have
a period of thirty (30) days to restore its operation(s) and restore its
obligations to the other Party.
14.17 No
representations have been made to any Party regarding taxes, it being understood
by each of the Parties that each such Party accepts full responsibility for
calculation of and payment of his or its taxes, levies, duties or other charges
incurred or imposed as a consequence of this Agreement and the transactions
described herein.
14.18 This
Agreement shall become effective when it has been executed by all of the Parties
to this Agreement.
IN
WITNESS WHEREOF, the Parties have caused their duly authorized representatives
to duly execute and deliver this Agreement effective as of the date written
above.
BIO-PRODUCTS
INTERNATIONAL, INC.
By: /s/
Xxxxxxx X.
Xxxx
Xx.
Xxxxxxx X.
Xxxx, President & CEO
SRS
.ENERGY, INC.
By: /s/
Xxxxxx X.
Xxxxxxxxx
Xxxxxx
X. Xxxxxxxxx, Xx.,
President
