THIS AGREEMENT made and entered into as of this 1st day of November,
1997, by and between KBF POLLUTION MANAGEMENT, INC. ("Licensee") and XXXXXXXX
X. XXXXXXXX ("Licensor").
W I T N E S S E T H:
WHEREAS, Licensor is the owner of all right, title and interest in and
to certain Licensor Patent Rights relating to processes and reagents which are
more fully described on Schedule A, attached hereto, incorporated herein, and
hereinafter referred to as "the Licensor Patent Rights;" and
WHEREAS, Licensee desires to obtain an exclusive license under said
Licensor Patent Rights; and
WHEREAS, the parties wish to mutually release each other from any
claims relating to the ownership of the Licensor Patent Rights or the past use
of the processes and reagents which are the subject of the Licensor Patent
Rights (the "Processes and Reagents").
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, the parties agree as follows:
1. GRANT.
(a) Upon the term, payment of royalty payments, and conditions set
forth herein, Licensor hereby grants to Licensee a worldwide, exclusive license
under the claims of Licensor Patent Rights to use and have used the Processes
and Reagents. The exclusive license herein granted shall apply to, and royalties
due hereunder shall be payable in respect of, any improvements to the Processes
and Reagents or related inventions and Licensor's applications and letters
patent hereinafter arising which relate to the Processes and Reagents. The
Licensee shall pay all costs, including legal fees, incurred by the Licensor in
connection with any future or pending patent applications. Licensor will provide
Licensee with instructions and supervisory services required to implement the
Processes.
(b) Licensor shall disclose to Licensee the details of the Licensor
Patent Rights in writing in form and content as they now exist and as they may
at any time over the term of this Agreement exist. In addition, Licensor will be
available to instruct the Licensee from time to time in the operation and use of
the Processes and Reagents.
2. DISCHARGE OF PRIOR CLAIMS; ROYALTIES; ACCOUNTS.
(a) Upon execution of this Agreement, Licensee shall pay Licensor the
sum of $10,000 and concurrently therewith and in consideration therefor,
Licensor shall and hereby does release, remise and forever discharge Licensee
from any claim of infringement of licensor Patent Rights prior to the effective
date of this Agreement and Licensee does hereby acknowledge and confirm the
Licensor's sole and exclusive ownership of the Licensor Patent Rights and any
improvements thereto or related inventions developed by the Licensor, whether or
not the Licensor is then employed by the Licensee.
(b) Licensee agrees to pay, as hereinafter provided, to Licensor a
royalty in accordance with the provisions of schedule 'B' attached hereto and
incorporated herein on an annual basis, for each excess gallon of fluid
processed by Licensee or its sub-licensees using any of the Processes or
Reagents. Schedule B shall be applied separately to each user so that, for
example, if there are two users (i.e. the Licensee and one sub-licensee), and
each user processes 500,000 gallons, each user will pay Licensor at the rates
listed on schedule B associated with that level of waste processed.
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(c) The accounting period for payment of royalties shall be on a
calendar quarterly basis for the respective periods ending on March 31, June 30,
September 30 and December 31 of each year, beginning with the end of the period
first following the date of execution of this Agreement.
(d) Within 30 days of the end of each period, Licensee shall furnish
Licensor with a certified written statement of the quantity of fluid processed
in the preceding accounting period, setting forth the essential information
concerning the use of the Processes and Reagents. Payment shall be monthly
commencing on the 15th day of the month following the first accounting.
(e) Licensee agrees that it will at all times keep complete, true and
correct books of account containing a current record of data in sufficient
detail to enable the royalties payable under this Agreement to be computed and
verified Licensee further agrees to permit Licensor, his duly authorized agent
or an independent certified public accountant to have access for inspection
and/or to make copies of said books of account at reasonable intervals during
business hours. To the extent Licensor requires Licensee to utilize an
independent certified public accountant to inspect the books of account of
Licensee, Licensor and Licensee agree that the cost of such independent
certified public accountant shall be borne by Licensee.
(f) During the term of this Agreement, Licensee shall purchase, from
Licensor or his designated agent, all of the Reagents required for processing
under the Licensor Patent Rights, provided that Licensor shall price the same at
market price.
3. ASSIGNMENT OF SUBLICENSE OF LICENSE. Licensee shall have the right
to sub-license to third parties and to assign the License of the Processes and
Reagents. Sublicenses and assignment of the Processes and Reagents must have
prior written consent of Licensor, which consent shall not be unreasonably
withheld. All Licensee obligations set forth herein shall apply equally, and
with full force and effect on any sublicensee or assignee, which shall agree in
writing to be bound by the terms of this Agreement.
4. DURATION AND TERMINATION
(a) Unless otherwise terminated as hereinafter set forth, this
Agreement and the license under Licensor Patent Rights shall continue in full
force and effect for a minimum of 15 years (the "Minimum Term"), at which time,
this Agreement shall be extended automatically each day for an additional day so
that the remaining term of this Agreement will continue to be five years at all
times. After the expiration of the Minimum Term, either party may, by delivery
of written notice, at any time fix the term of this Agreement at five years
without additional extension. In such event, this Agreement shall end on a date
five years from the date of such notice. In such event, Licensee, Sub-Licensees
and Assignees will no longer use Licensor's Processes or Reagents.
(b) If Licensee at any time defaults in rendering any of the statements
required hereunder, in the payment of any monies due hereunder, or in
fulfilling any of the other obligations hereof, and such default shall not be
cured within 30 days after written notice thereof is given by Licensor to
Licensee, Licensor shall have the right to terminate this Agreement by giving
written notice of termination to Licensee; this Agreement thereby being
terminated 15 days after such notice of termination is mailed by Licensor.
Licensee shall have the right to cure any such default up to, but not after, the
giving of such notice of termination.
(c) Licensor shall have the right to terminate this Agreement by giving
written notice of termination to Licensee in the event of any one of the
following, such termination being effective upon receipt of such notice or five
days after such notice is mailed, whichever is earlier:
(1) Liquidation of Licensee;
(2) Insolvency or bankruptcy of Licensee, whether voluntary or
involuntary;
(3) Failure of Licensee to satisfy any judgment against it;
(4) Appointment of a trustee or receiver for Licensee;
(5) Any assignment by Licensee for the benefit of creditors; or
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(d) The waiver of any default under this Agreement by Licensor or
Licensee shall not constitute a waiver of the right to terminate this Agreement
for any subsequent or like default, and the exercise of the right of termination
shall not have the effect of waiving any damages to which Licensor might
otherwise be entitled.
(e) Termination of this Agreement, for any cause whatsoever, shall in
no manner interfere with affect or prevent the collection by Licensor of any and
all sums of money due under this Agreement. Upon termination of this Agreement
for any reason. Licensee's payments require by paragraph 2, but not yet due,
shall become immediately due and payable.
5. INFRINGEMENT. The Licensee shall defend, at its own expense, all
infringement suits that may be brought against it or its sub-licensees based on
or related to the Processes and Reagents. In the event any information is
brought to the attention of Licensor or Licensee that others without benefit of
license are infringing upon any of the rights granted pursuant to this
Agreement, Licensee shall, at its own expense, diligently, seek all available
legal remedies to remedy such infringement. In any of the foregoing suits, the
Licensor shall, at the expense and at the request of the Licensee, give evidence
and execute such documents as the Licensee may require, and the Licensor may, at
Licensee's expense, be represented by counsel of his own choice.
6. CONFIDENTIALITY. The parties acknowledge that the Licensor is
required to disclose to Licensee under the terms of this Agreement confidential,
non-public, proprietary information and trade secrets. Licensee agrees to
maintain the Confidentiality of all such information and to limit its
dissemination to only those employees of the Licensee and sublicenses who have a
need to know and agree to maintain the confidentiality of such information.
7. NOTICES.
(a) All notices, requests, demands and other communications under this
Agreement or in connection therewith shall be given to or be made upon the
respective parties hereto as follows:
To Licensee: KBF Pollution Management, Inc.
0000-X Xxxxxxxxxxx Xxxx
Xxxxx Xxxxxxxxxxx, XX 00000
To Licensor: Xxxxxxxx X. Xxxxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
(b) All notices, requests, demands and other communications given or
made in accordance with the provisions of this Agreement shall be in writing,
shall be forwarded by certified mail, return receipt requested, and shall be
deemed to have been given when deposited for delivery or overnight delivery
courier service, addressed as specified in the preceding paragraph, postage
and/or delivery fees prepaid.
8. CONSTRUCTION AND ASSIGNMENT.
(a) This Agreement shall be binding upon and inure to the benefit of
Licensor, its legal representatives, successors, heirs and assigns.
(b) This Agreement shall be binding upon and inure to the benefit of
licensee, but shall not be transferable or assignable without the prior written
consent of Licensor.
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(c) This Agreement shall be deemed to be a contract made under the laws
of the State of New York, and for all purposes shall be interpreted in its
entirety in accordance with the laws of said State.
9. NEGATION OF WARRANTY. No representation or warranty has been or is
made by Licensor that the Processes and Reagents may be used, assigned or
sub-licensed free of infringement of patent rights or other proprietary rights
of others; it being understood that Licensor shall not be liable for any loss,
damage, or expense arising from any claim of patent or other propriety right
infringement.
10. MODIFICATION. This Agreement embodies all of the understanding and
obligations between the parties with respect to the subject matter hereof. No
amendment or modification of this Agreement shall be valid or binding upon the
parties unless made in writing, signed on behalf of each of the parties by, in
the case of Licensee, a duly authorized officer, and in the case of Licensor,
Xxxxxxxx X. Xxxxxxxx, in person, or his authorized representative.
IN WITNESS WHEREOF, the Licensee, through its duly authorized representatives
and Licensor, through Xxxxxxxx X. Xxxxxxxx, in person, have caused this
Agreement to be executed as of the date first above written.
KBF POLLUTION MANAGEMENT, INC.
Licensee
By: /s/
-----------------------------------------
XXXXXXXX X. XXXXXXXX
Licensor
By: /s/
-----------------------------------------
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SCHEDULE A
SCHEDULE B
From To Per Gallon Royalty # of Drums Company Company Net
Gross
-- 500,000 0.100 50,000 9,091 (1) 875,000 825,000
500,001 600,000 0.099 9,900 1,818 174,998 165,098
600,001 700,000 0.098 9,800 1,818 174,998 165,198
700,001 800,000 0.097 9,700 1,818 174,998 165,298
800,001 900,000 0.096 9,600 1,818 174,998 165,398
900,001 1,000,000 0.095 9,500 1,818 174,998 165,498
1,000,001 1,100,000 0.094 9,400 1,818 174,998 165,598
1,100,001 1,200,000 0.093 9,300 1,818 174,998 165,698
1,200,001 1,300,000 0.092 9,200 1,818 174,998 165,798
1,300,001 1,400,000 0.091 9,100 1,818 174,998 165,898
1,400,001 1,500,000 0.090 9,000 1,818 174,998 165,998
1,500,001 1,600,000 0.089 8,900 1,818 174,998 166,098
1,600,001 1,700,000 0.088 8,800 1,818 174,998 166,198
1,700,001 1,800,000 0.087 8,700 1,818 174,998 166,298
1,800,001 2,200,000 0.086 34,400 7,273 699,998 665,598
2,100,001 3,500,000 0.085 119,000 25,455 2,449,998 2,330,998
3,500,001 5,200,000 0.085 144,500 30,909 2,974,998 2,830,498
------------------------------------------------------------
468,799 96,363 9,274,972 8,806,173
BULK
-- 10,000,000 0.05 500,000 (2)3,500,000 3,000,000
10,000,001 20,000,000 0.04 400,000 7,000,000 6,600,000
20,000,001 50,000,000 0.03 900,000 17,500,000 16,600,000
50,000,001 100,000,000 0.02 1,100,000 35,000,000 34,000,000
---------------
2,800,000 63,000,000 60,200,000
For the rights and privileges granted under the License Agreement, the License
shall pay to the Licensor, until this License is terminated as herein provided,
a royalty on sub-licensing or other assignment sales by the Licensee of eight
percent (8%) of the gross royalty revenues, calculated on a site specific
basis.
PAYMENT OF ROYALTIES AND FEES. It is expressly agreed and acknowledged by the
parties hereto that no royalty or fee hereunder shall be payable to the Licensor
until such time as (a) the Licensee has directly used or otherwise arranged for
the use of the Licensed Material on no less than one million five hundred
thousand gallons (1,500,000) of wastewater at the Licensee's facilities or
otherwise, and (b) the Licensee has a cumulative process capacity of no less
than thirty million gallons per year. The gallons reflected in this Schedule B
represent those in excess of 1,500,000 and no royalties are due on the first
1,500,000 gallons processed. Further, the payment and royalty provisions of this
Schedule B are to be applied on an annual basis.
---------------------
(1) To Calculate Gross Income for Drum Waste, an average income of $1.75 per
gallon was used.
(2) To Calculate Gross Income for Bulk Waste, an average income of $0.35 per
gallon was used.
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