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Exhibit No. 4 TECHNOLOGY LICENSE AGREEMENT
THIS TECHNOLOGY LICENSE AGREEMENT (this "Agreement") is entered into the
19th day of August, 1997, between XXXXXX X. XXXXXXX, an individual, and
XXXXXXX X. XXXXXXX, an individual (hereinafter "Licensors") and AMERICAN
ENVIRONMENTAL CORPORATION, a Nevada corporation (hereinafter "Licensee").
It is expressly and mutually warranted and agreed that Xxxxxx X. Xxxxxxx
(hereinafter "Xxxxxxx") and Xxxxxxx X. Xxxxxxx (hereinafter "Xxxxxxx"),
individually and/or collectively are the inventors of an air pollution
technology (the "Technology" as defined in section 2(f) below), and are third-
party beneficiaries to this Agreement in its totality and to all material
provisions hereof with full legal rights to protect and enforce any expressed
or implied rights or interests herein.
It is expressly mutually warranted and agreed that this Agreement
supercedes that prior Technology License Agreement entered into the 20th day
of May, 1996 between AMERICAN MOBILITY LIMITED PARTNERSHIP, a Nevada limited
partnership, of which Xxxxxxx and Xxxxxxx were third-party beneficiaries.
Recitals
X. Xxxxxxx and Xxxxxxx have invented an air pollution control system
designed to provide, simple, low cost, and efficient remediation of toxic flue
gases.
X. Xxxxxxx and Xxxxxxx have made application for letters patent with the
United States Patents and Trademark Office regarding the Technology.
X. Xxxxxxx and Xxxxxxx represent and warrant that they own all right,
title, and interest in the Technology, and all patent to be issued concerned
therewith.
AGREEMENT
NOW, THEREFORE, based on the foregoing premises and for and in
consideration of the covenants and agreements hereinafter set forth and the
mutual benefits to the parties to be derived therefrom, it is hereby agreed as
follows:
1. Incorporation of Premises. The foregoing premises are incorporated
herein by this reference.
2. Certain Definitions. The following defined terms have the stated
meaning as used herein:
(a) Confidential Information. "Confidential Information" as used
herein shall mean information in the possession of a party which is held and
treated by such party as proprietary or trade secret information and not
disclosed to the trade or public by such party. Confidential Information
shall not include information (i) which is known to the receiving party at the
time of disclosure by the disclosing party, (ii) which after disclosure by the
disclosing party to the receiving party is received by the receiving party
from another who, with respect to the disclosing party, has the right to
disclose such information, or (iii) which is available to the public or
subsequently becomes available to the public through no breach of obligations
of confidence and trust by the receiving party to the disclosing party.
(b) Improvements. The term "Improvements" means any material,
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composition, process, data, or information which is developed from, utilizing,
or based upon the Technology, which modifies, enhances, or improves any
Product(s) or Process(es), as hereinafter defined, which is part of the
Technology.
(c) Patent Rights. The term "Patent Rights" shall mean all United
States patents and foreign patents and applications for patent, including
continuing and divisional and other patent applications derived therefrom, in
this or any country in the world which have been filed or granted or which
may be filed or granted which describe and claim or are based upon all or part
of the Technology, including such Improvements as become subject to this
Agreement, including, but not limited to, any and all patents granted on or
respecting the application for United States Letters Patent Serial No(s).
08/758,211 and 08/650,015, each titled "Method and Apparatus for Remediation
of Toxic Flue Gases" filed with the United States Office of Patents and
Trademarks, respecting an invention by Xxxxxxx X. Xxxxxxx and Xxxxxx X.
Xxxxxxx for the Technology (the "Patent Application").
(d) Process(es). The term "Process(es)" shall mean any
formulation(s), composition(s), or combination(s) of compositions based upon
or manufactured or used in accordance with the Technology.
(f) Technology. The term "Technology" shall mean all scientific
and technical data and all information and know-how related to the inventions
and developments relating to a method and apparatus for remediation of toxic
flue gases including, but not limited to, all information and know-how
relating to the Patent Application, whether or not any such inventions or
developments are patentable, including, but not limited to, the formulas,
methods, processes, procedures, experimental data, disclosures, reports,
findings, ideas, and trade secrets. Technology includes all Improvements,
Patent Rights, Products, Processes, and Confidential Information as described
herein.
3. License. Licensors hereby grants, and Licensee hereby accepts, an
exclusive license to use, sell, license, or otherwise exploit the Technology,
and any and all Improvements, Processes, Products, and Confidential
Information related thereto, in the World-wide territory and on the conditions
herein set forth, subject to the obligation of Licensee to pay a Royalty as
provided below, including specifically, but without limitation, the right to
sublicense others under the rights granted hereunder, to likewise xxx, sell,
sublicense, or otherwise exploit the Technology and any and all Improvements,
Processes, Products, and Confidential Information related thereto and to
disclose Confidential Information to sublicensees to the extent sublicenses
requires to effectively enjoy the rights of such sublicenses.
4. Territory of Licensee. As used herein, the term "World-wide
Territory" of the Licensee shall refer to all territories, countries,
principalities, and kingdoms collectively referred to as the "Earth."
5. Marketing by Licensee. Licensee shall devote its time and best
efforts to market, promote, and exploit the Technology in a effort to xxxxxx
its commercialization and use.
6. Term. Unless earlier terminated by the mutual agreement of the
parties or pursuant to another provision of this Agreement, this Agreement
shall continue in full force and effect and shall have a term expiring on the
last date of expiration of any patent included in the Patent Rights. If,
however, the License fails market, promote, and otherwise exploit the
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Technology so that Xxxxxxx has not received any royalty payment as provided
under paragraph 9 of this Agreement within 24 months of the date hereof, this
Agreement shall automatically terminate, without further notice from Licensors
to the Licensee.
7. Additional Technology. It is anticipated that Licensors may from
time to time develop additional technology. In the event Licensor desire to
market, distribute, or otherwise exploit any additional technology relating to
the remediation of toxic flue gases that is not included within the above
defined Technology (the "Additional Technology") in the World-wide Territory
of Licensee, Licensors shall provide Licensee with a written notice (the
"Initial Notice") setting forth full details concerning the Additional
Technology, and Licensee shall have the exclusive right and option to have the
Additional Technology made subject to this Agreement at any time during a
period of 90 days following the date such Initial Notice is given. Licensee
can exercise such option by delivery of a notice of its intent to do so within
the option period. If Licensee does not exercise its option within the
prescribed period, Licensor shall be entitled to enter into any agreement
respecting the Additional Technology within the World-wide Territory of
Licensee with any other entity. If Licensee is granted rights to Additional
Technology, such rights shall be subject to all the terms and provisions of
this Agreement and the Additional Technology shall be treated as Technology
under this Agreement.
8. Testing. Either party may from time to time undertake testing and
development in the World-wide Territory of the Technology or Additional
Technology, and either party undertaking such testing shall make the results
of such testing and development fully available to the other.
9. Royalty. During the term of this Agreement, Licensee shall pay to
Xxxxxxx a Royalty (the "Royalty") of (a) one and one-half percent (1.5%) of
the gross sales price of any equipment manufactured directly or indirectly by
the Licensee and sold for use with or as a part of the Technology; and (b)
one-half percent (.5%) of the gross sales price on any replacement equipment
manufactured directly or indirectly by the Licensee. Such Royalty shall be
due and payable 45 days after the close of each calendar quarter. Licensee
shall provide to Xxxxxxx a written statement of production, presented in
sufficient detail to permit verification of the Royalty due. Such written
statement shall be certified as accurate by an officer or authorized agent of
Licensee. Licensee shall maintain accurate books and records for the same
which shall be made available to Xxxxxxx, on reasonable notice, for inspection
and audit by Xxxxxxx or its representative. In the event that Xxxxxxx cause
such books and records to be audited and such audit establishes that Licensee
did not pay Xxxxxxx the full amount of Royalty actually due Xxxxxxx, Licensee
shall pay Xxxxxxx the additional amount owned within 30 days after demand. In
addition, if such audit establishes that Licensee has underpaid Xxxxxxx for
Royalty owed by 5% or more, Licensee shall reimburse Xxxxxxx for the full cost
of such audit. The amount of Royalty not paid Xxxxxxx when due shall bear
interest at an annual rate of interest equal to two percentage points above
the prime rate quoted for international money center banks in the Wall Street
Journal on the day the payment was due. Xxxxxxx shall not receive a Royalty
under this Agreement.
10. Documentation and Technical Assistance. Licensor shall at its own
cost provide Licensee with available written technical information and know-
how in its possession, and shall stand ready, at the request and expense of
Licensee, to disclose know-how and technology known to Licensor respecting the
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Technology and, at the request and expense of Licensee, and within reasonable
time and resource constraints, provide technical and scientific aid and
assistance to assist Licensee in the development of the Licensed Technology.
Licensor's charges to Licensee for such technical assistance shall not exceed
Licensors' cost of providing the same.
11. Documentation and Confirmation of Rights. Licensor shall, upon
request of and at the expense of Licensee, execute such documents and take
such actions as are necessary and proper to evidence the rights granted
hereunder to Licensee.
12. Authority and Reservation of Rights to Licensor
(a) Authority. Licensor represents and warrants to Licensee that
it owns the Technology free and clear of any and all liens, claims,
encumbrances, royalty interests, or other charges; that it has full legal
power to grant the rights to Licensee as set forth in this Agreement; that it
has not made and covenants that it will not make any commitment to others
inconsistent with such grant; that it is not aware of any third party
(including without limitation any university, research foundation, or
institute) who holds from or under Licensors directly or indirectly any rights
to or under the Technology which would preclude Licensor from granting to
Licensee all rights purportedly granted to Licensee hereunder.
(b) Reservation of Rights. Licensors reserve the right to use the
Technology in the course of its research, but shall not have the right to
exploit the same commercially or to license others to make, use, or sell the
same with the World-wide Territory of Licensee. Further provided that in the
event the territorial exclusivity or period of exclusivity of the license
granted hereunder is limited by applicable laws and regulations concerning
government rights pertaining to the subject matter hereof, or by the action,
laws, or regulations of any government, the license granted hereunder shall
not terminate, but shall remain exclusive to the extent permitted by such
government action and shall become nonexclusive to the extent necessary to
conform to applicable laws and regulations.
13. Patent Applications and Prosecution. Licensors shall, at its own
cost and expense, apply for and prosecute applications for United States and
foreign patents as the Licensee may from time in writing designate to
Licensors. Licensors shall control and direct the filing and prosecution of
such applications for patent and maintenance of such patents through a
registered patent lawyer of Licensors' choosing who shall (unless Licensors
and Licensee agree otherwise) be instructed to obtain the maximum available
valid patent protection. Licensors shall seek prompt examination of all such
applications for patent in all countries in which application for patent is
made, keep Licensee, or such patent attorney as Licensee may designate,
informed as to all activities respecting such applications for patents and
regularly provide copies of all documents and correspondence respecting such
applications for patent to Licensee, or its designee, and give full weight and
due consideration to information and requests from Licensee respecting such
patents and applications. Licensee shall have the right to authorize the
abandonment of such patents or applications, provided, however, that Licensor
shall have the right, but no obligation, to assume prosecution and/or
maintenance of the same. Licensors may, but shall not be required to, file,
prosecute, or maintain applications of patent and patents in countries in
which Licensee does not elect for filing. Licensors does not represent or
warrant (i) that any patent applications will issue into a patent, (ii) that
should a patent issue and be licensed hereunder that such patent will be
valid, or (iii) that the sale of the Technology will not infringe the patent
rights of third parties.
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14. Disclosure of Improvements. Licensors shall keep Licensee fully
informed as to Improvements made by Licensors and shall promptly comply with
the obligations of section 10 in providing technical assistance respecting the
same.
15. Litigation.
(a) Licensee shall have the first right to xxx any infringer of any
patent licensed hereunder, at its own expense in the name of Licensors, if
necessary, and Licensors agrees to join in such suit at Licensee's expense and
to execute any necessary papers for such suit. If Licensee fails within a
reasonable time to xxx such infringer, Licensors shall have the right to file
and maintain, at its own expense, such suits for infringement; however,
nothing in this Agreement shall obligate Licensors to assume any
responsibility or liability respecting any action or possible action for
infringement.
(b) Any sum recovered in such suit or in settlement thereof shall
be used first to reimburse Licensee and Licensors, pro rata, for all direct
out-of-pocket costs and expenses of every kind and character, including
attorneys' fees, expert witness fees, court costs, and the like incurred in
the prosecution of any suit. For this purpose, cost and expenses paid from
Royalty withheld by Licensee pursuant to this section of this Agreement shall
be considered to have been incurred by Licensors pursuant to this paragraph of
this Agreement. If, after such reimbursement, any funds shall remain from
such recovery, such funds shall, at the option of Licensee, be divided with
Licensors, pro tanto in lieu of Royalty on infringing sales at one-half the
rates specified in section 9 of this Agreement.
(c) During any time Licensee is engaged in an infringement action
involving an allegation that any patents licensed hereunder are infringed,
Licensee shall be entitled to withhold up to one-half of all Royalty otherwise
payable to Licensors under section 9 of this Agreement as may be necessary to
offset expenses of such action. Upon termination of the litigation, any
balance of the withheld one-half remaining after payment of Licensee's
expenses shall be paid promptly to Licensors.
16. Defense of Licensed Rights. Licensors shall not be obligated to
defend or save harmless Licensee against any suit, damage, claim, or demand
based on actual or alleged infringement of any patent or trademark or any
unfair trade practice resulting from the use or exercise of the rights or
license granted hereunder; but shall cooperate fully with Licensee, at
Licensee's cost and expense, in the defense of any such suit, claim, or demand
and shall provide expert testimony at reasonable times and for reasonable
periods without cost, except that Licensee shall pay travel, lodging, and
related expenses actually incurred in providing such testimony.
17. Default. Upon the occurrence and during the continuance of any one
or more of the events hereinafter enumerated, Licensors may forthwith or at
any time thereafter during the continuance of any such event, by notice in
writing to Licensee, terminate this Agreement, such events being as follows:
(a) Default in the payment of any Royalty or other amount due
hereunder when the same shall become due and payable, unless cured within 30
days after the notice thereof by Chrobak to Licensee;
(b) Default in the due observance or performance of any other
covenant or obligation contained in this Agreement, unless observed or
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performed within 30 days after notice thereof by Licensors to Licensee;
provided, that if compliance is not reasonably practicable within 30 days,
default shall occur upon failure within said 30 days to take steps that will
produce compliance as soon as is reasonably practicable;
(c) Licensee shall file a voluntary petition in bankruptcy or a
voluntary petition seeking reorganization, or shall file an answer admitting
the jurisdiction of the court and any material allegations of any involuntary
petition filed pursuant to any act of Congress relating to bankruptcy or to
any act purporting to be amendatory thereof, or shall be adjudicated bankrupt,
or shall make an assignment for the benefit of creditors, or shall apply for
or consent to the appointment of any receiver or trustee for Licensee, or of
all or any substantial portion of its property; or Licensee shall make an
assignment to an agent authorized to liquidate any substantial part of its
assets; or
(d) An order shall be entered pursuant to any act of Congress
relating to bankruptcy or to any act purporting to be amendatory thereof
approving an involuntary petition seeking reorganization of Licensee, or an
order of any court shall be entered appointing any receiver or trustee of or
for Licensee, or any receiver or trustee of all or any substantial portion of
the property of Licensee, or a writ or warrant of attachment or any similar
process shall be issued by any court against all or any substantial portion of
the property of Licensee, and such order approving a petition seeking
reorganization or appointing a receiver or trustee is not vacated or stayed,
or such writ, warrant of attachment, or similar process is not released or
bonded within 60 days after its first entry or levy.
18. Effect of Termination. In the event of termination of the license
rights granted hereunder for any reason(s) whatsoever, all options granted
Licensee hereunder shall also automatically terminate; and:
(a) All obligations of confidentiality shall remain in full force
and effect for the full term of this Agreement;
(b) Licensee shall return, deliver, and assign to Licensor all
written records containing know-how, notebooks, reports, data, applications
for approval, approvals and all writings, including magnetically recorded
writings or legible and readable copies thereof which relate to or describe
the manufacture, use, sale, or characteristics of the Technology which are in
its possession, custody, or control;
(c) Licensee shall not grant any third-party any right to the
Technology after termination of the license hereunder;
(d) All sublicenses granted hereunder shall inure to the benefit of
Licensors and Licensors shall become the licensors with respect to the same.
Such sublicenses shall continue according to the terms thereof and Xxxxxxx
shall be entitled to all consideration and Royalty from the sublicensee
therein. Licensee shall make such assignment of such sublicenses and execute
all documents necessary and proper to substitute Licensor as the licensor
therein.
19. Patent Marking. Licensee agrees that it shall provide the necessary
legal patent marking required for the country for which the Technology covered
by Patent Rights are made or sold, provided that Licensors shall have advised
Licensee regarding the same.
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20. Confidentiality. Each party agrees that any Confidential
Information disclosed to it by the other in writing and marked confidential
(or in the case of any oral disclosure, subsequently confirmed in writing and
marked confidential) shall be held in confidence for five years after
disclosure, notwithstanding any prior termination of this Agreement, and shall
not use the same other than as to the extent permitted under this Agreement.
21. Non-warranted Matters. Nothing contained in this Agreement shall be
construed as a warranty or representation by Licensors (i) as to the validity
or scope of Licensors' Patent Rights, (ii) as to whether any manufacture, use,
or sale hereunder will be free from infringement of any patents owned or
controlled by any third party, or (iii) as to efficiency or efficacy of the
Technology.
22. Notices. All notices, demands, requests, or other communications
required or authorized hereunder shall be deemed given sufficiently if in
writing and if personally delivered; if sent by facsimile transmission,
confirmed with a written copy thereof sent by overnight express delivery; if
sent by registered mail or certified mail, return receipt requested and
postage prepaid; or if sent by overnight express delivery:
If to Licensors, to: Xxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxx Xxxx.
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
Xxxxxxx X. Xxxxxxx
000 Xxx Xxxx Xxx
Xxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
If to Licensee, to: American Environmental Corporation
0000-X Xxxxxx Xxxxxxx
Xxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
or such other addresses and facsimile numbers as shall be furnished in writing
by any party in the manner for giving notices hereunder, and such notice,
demand, request, or other communication shall be deemed to have been given as
of the date so delivered or sent by facsimile transmission, three days after
the date so mailed, or one day after the date so sent by overnight delivery.
23. Attorneys' Fees. In the event that any party institutes any action
or suit to enforce this Agreement or secure relief from any default hereunder
or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
24. Specific Performance. The parties acknowledge that the rights in
this Agreement are extraordinary and unique, and that remedies at law may be
inadequate to compensate the parties for the breach or threatened breach of
the terms and conditions of this Agreement. The parties consent to the
granting of equitable relief, including specific performance or injunction,
whether temporary, preliminary, or final, in favor of the other party without
proof of actual damages.
25. Third-Party Beneficiaries. Licensor and Licensee are intended
beneficiaries of this Agreement and the consummation of the transactions in
accordance with this Agreement.
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26. Entire Agreement. This Agreement and the exhibits hereto represent
the entire agreement between the parties relating to the subject matter
hereof. All negotiations and all other previous agreements between the
parties, whether written or oral, have been merged into this Agreement, and
this Agreement and the documents delivered in connection with the consummation
hereof fully and completely express the agreement of the parties relating to
the subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.
27. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which take
together shall be but a single instrument.
28. No Assignment. This Agreement cannot be assigned in whole or in
part by one of the parties without the prior written consent of all parties to
this Agreement.
29. Amendment or Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law, or in equity, and such remedies may be enforced concurrently, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. This Agreement may be amended by a writing
signed by all parties hereto, with respect to any of the terms contained
herein, and any term or condition of this Agreement may be waived or the time
for performance thereof may be extended by a writing signed by all parties to
be charged therewith.
Dated as of the year and date first above written.
LICENSORS:
/s/Xxxxxx X. Xxxxxxx
/s/Xxxxxxx X. Xxxxxxx
AMERICAN ENVIRONMENTAL CORPORATION,
a Nevada corporation
By:/s/Xxxxxxx X. Xxxxxxx, Its Duly
Authorized Officer
