EXCLUSIVE LICENSE AGREEMENT
Exhibit 10.14
THIS EXCLUSIVE LICENSE (“Agreement”) is made this 30th day of April, 2008 by and
between New Nycon, Inc. (“Licensee”) a wholly owned subsidiary of Pure Earth, Inc. (“PEI”) and Xxxx
X. Xxxxxxxxxxx (“Licensor”).
WHEREAS, Licensor has developed technology (“Technology”) for making and using a fiber
reinforcement material from waste carpet materials (“Product”) which Technology and Product are the
subject of the patent and patent application referenced in Schedule A hereto (“Patents”), and
WHEREAS, Licensee owns and operates a fiber reinforcement producing, packaging, marketing,
distribution and sales organization, and is interested in obtaining an exclusive license with
respect to such Patents to use the Technology to make, package, market, distribute and sell the
Product.
WHEREAS, the parties have determined it is in their best interest to enter this Exclusive
License Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as
follows:
| 1. | License. |
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Licensor hereby grants to Licensee an exclusive license to make, package, market, distribute
and sell the Product throughout the world using the Technology processes described in the
Patents and as set forth in this Agreement. |
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| 2. | Fee. |
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In consideration for the grant of the exclusive license and the use of the Technology,
Licensee agrees to pay Licensor upon the following basis: |
(a) Upon execution of this Agreement Licensee shall pay Licensor a one-time license fee
of Fifteen Thousand Shares (15,000 shares) of Pure Earth, Inc. stock to be held in escrow
by Xxxxxxx X. Xxxx, Esquire, acting as Escrow Agent, and in accordance with the Pro Forma
(Schedule B) attached hereto and all other requirements set forth in the Stock Escrow
Agreement bearing even date herewith have been met.
(b) During the initial twelve (12) month period of this Agreement, Licensee shall pay
to Licensor a monthly consulting fee equal to Seven Thousand Seven Hundred Forty Dollars
($7,740.00) due and payable on the 1st day of each month beginning May 1, 2008
and ending April 30, 2009. Licensor shall be reimbursed monthly for any travel and
out-of-pocket expenses incurred on behalf of Licensee.
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(c) During the term of this Agreement, Licensee shall pay to Licensor an annual royalty
fee of thirty percent (30%) of the EBTDA (Earnings before Taxes, Depreciation and
Amortization) of Licensee’s total annual sales, revenue, proceeds or related income
generated from Licensee’s fiber and fiber related products, equipment, technology or
services including proceeds from any infringement actions or the like (“Royalty Fee”). Any
income or proceeds of Licensee generated from a source not involving any fiber or fiber
related products, equipment or services shall not be included in the Royalty Fee
calculation. Such Royalty Fee shall be payable annually within ten (10) days after the
completion of Licensee’s audited Financial Statement. Such audited Financial Statement
shall be completed within ninety (90) days from the end of each calendar year beginning with
the end of calendar year 2008. Such audited Financial Statement shall be prepared using a
format comparable to the format of the Pro Forma (Schedule B) and in accordance with GAAP.
Such annual Royalty Fee payment to Licensor shall be reduced, one time only, the first year
and any succeeding year, if necessary, by an amount equal to thirty percent (30% — the
Licensor’s only portion of payment of the Note) of the current total aggregate principal
balance of $150,000 on the
note issued by Bank of America in the original, principal, face amount of $150,000 (“Note”).
Such Note which is referenced in Exhibit B of the Asset Purchase Agreement is to be assumed
by the Licensee pursuant to such Asset Purchase Agreement, and Licensor shall participate in
the repayment of the principal of such Note by paying only $45,000 (the Licensor’s portion
of payment of the Note) of the $150,000 principal balance as provided in this Section 2 (d)
above.
(d) All license fees and royalties paid hereunder shall be in US Dollars.
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| 3. | Licensor Obligations. Representations and Warranties |
(a) During the term of this Agreement, Licensor shall file all patent applications on
inventions at his own expense and shall have exclusive control over such applications. Any
new patents or patent applications related solely to the Licensee’s fiber business shall be
exclusively granted to Licensee and incorporated hereto in an amended Exhibit A and for no
additional compensation other than what is provided for in this Agreement.
(b) All maintenance, filing, renewal, extension, or any such other costs for pending
and/or issued patents of Licensor shall be borne by Licensor.
(c) Licensor shall retain exclusive control and rights over all current Patents, and
any patents hereafter acquired by Licensor as well as copyrights, know-how, technology,
trade secrets, design, permits, information and intellectual property developed by Licensor
before and after the signing of this Agreement.
(d) Licensor represents and warrants that Licensor is the owner of all right, title and
interest in the Patents, and that item A of the Patents in Exhibit A was duly issued by the
USPTO on December 6, 2005 as set forth in Exhibit A and, to the best of Licensor’s knowledge
and belief, such item A is a valid and enforceable patent in accordance with its terms. In
addition, item B of Exhibit A will be, to the best of
Licensor’s knowledge and belief, upon issuance by the USPTO a valid and enforceable patent
in accordance with its terms.
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| 4. | Obligations of the Licensee. |
(a) Licensor shall be provided reasonable financial and technical information as may be
necessary and appropriate for Licensor to carry out his function as Licensor or as may be
otherwise developed by Licensee as it relates to Licensor. Licensor shall have the annual
right upon reasonable notice to inspect and audit the books and records of the Licensee at
the sole cost and expense of Licensor.
(b) Licensee shall diligently prosecute and defend any infringement actions of the
Technology and Patents at its sole cost and expense. Any recoveries from such infringement
actions shall be distributed to and booked to the Licensee. In the event the licensee loses
its defense of infringement actions of all Schedule A patent rights as well as any new
patents and patent rights included under Article 3(a) above, and it is determined that all
the patents and patent rights of all Schedule A patent rights as well as any new patents and
patent rights included under Article 3(a) above are all held invalid or unenforceable, the
Royalty Fee due in Article 2(d) herein shall be reduced from thirty percent (30%) to ten
percent (10%) and all other terms and conditions of this Agreement shall remain in full
force and effect.
(c) Except with respect to any issue relating to the validity and enforceability of the
Patents, and the Technology and Product incorporating the materials and processes recited in
the Patents, Licensee shall indemnify and hold harmless Licensor from any and all claims of
any type of manner relating to the Patents, Technology or Products.
| 5. | Term and Termination. |
(a) Term. This Agreement shall be effective as of the date first written above and
shall continue in full force and effect thereafter until the expiration of the last of any
Schedule A Licensed patent rights, unless earlier terminated in accordance with 5(b) or 5(c)
below.
(b) Termination by Licensee. Licensee may terminate this Agreement for a material
breach of any representation or other covenant of this Agreement upon 30 days notice to
Licensor.
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(c) Termination by Licensor. Licensor may terminate this Agreement upon thirty (30)
days notice in the event the Licensee fails to pay any fees when due hereunder. In the event
of any infringement action, Licensee shall be provided with an opportunity, not to exceed
three years, to bring an infringement action to a resolution to the reasonable satisfaction
of the Licensor and the Licensee prior to the Licensor being able to terminate this
Agreement.
(d) Any disputes arising under the Agreement shall be resolved by binding arbitration
in the City of Wilmington, Delaware in accordance with the Commercial Arbitration Rules of
the American Arbitration Association, and judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.
(e) In the event this Agreement is terminated in accordance with above Article 5(b) or
5(c) the Licensee shall cease using the Technology and making or selling the Product.
However, the obligations contained in the Consulting Agreement and Stock Escrow Agreement
shall continue in full force and effect until such time as they expire in accordance with
their terms.
| 6. | Notices. |
All notices and other communications hereunder must be in writing and shall be deemed to
have been given if delivered by hand or mailed first class, registered mail, return receipt
requested, postage and registry fees prepaid and addressed as follows:
| (i) | If to Licensee: |
Xx. Xxxxx Xxxxxxxxxx
New Nycon, Inc.
Xxx Xxxxxxxxx Xxxxxxxxx – Xxxxx 000
Xxxxxxx, XX 00000
New Nycon, Inc.
Xxx Xxxxxxxxx Xxxxxxxxx – Xxxxx 000
Xxxxxxx, XX 00000
| (ii) | If to Licensor: Xx. Xxxx Xxxxxxxxxxx Xxxx Xxxxxx Xxx 00 Xxxxxxxxx, XX 00000 |
Addresses may be changed by notice in writing signed by addressee. |
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| 7. | Sublicense and Assignability |
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This Agreement shall include the right to sublicense by the Licensee. Any sublicensee shall
agree that the terms and conditions of any such sublicense agreement or agreements shall not
be less favorable to Licensor than the terms and conditions contained in this Agreement.
This Agreement is binding upon and shall inure to the benefit of Licensor and Licensee,
their successors and assigns, and shall be assignable by either party with the reasonable
consent of the other and in accordance with any provisions herein. However, in the event
the Licensor desires to assign this Agreement and the rights contained herein to a third
party assignee, the Licensor shall submit in writing such assignment offer to the Licensee.
The Licensee shall then have thirty (30) days to match such assignment offer and close on
such transaction. If the Licensee does not agree to match such offer and close such
transaction within thirty (30) days, then the third party assignee shall be deemed approved
by the Licensee and Licensor shall have the right to close with the third party assignee.
Any such assignee shall agree to be solely responsible for any and all requirements of
Licensor under the Agreement after the date of assignment until the termination of the
Agreement and the Licensor shall have no further liability to the other parties under the
Agreement after the effective date of assignment. |
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| 8. | Miscellaneous. |
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This Agreement embodies the entire understanding between the parties hereto respecting the
subject matter hereof and no change, alteration or modification hereof may be made except in
writing signed by both parties hereto. The headings in this Agreement are for convenience of
reference only and shall not be considered as part of this Agreement or to limit or
otherwise effect the meaning hereof. In any provisions of this Agreement shall be held
invalid, illegal or unenforceable in whole or in part, neither the validity of the remaining
part of such provisions nor the validity of any other provisions of this Agreement shall in
any way by affected thereby. This Agreement shall in all respects be governed by and
construed in accordance with the laws of the State of Delaware. |
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IN WITNESS WHEREOF, the
parties hereto have executed and delivered this Agreement as of the day and year first above written. |
| NEW NYCON, INC. — LICENSEE: |
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| By: | /s/ Xxxxx Xxxxxxxxxx | |||
| Xxxxx Xxxxxxxxxx | ||||
| LICENSOR: |
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| By: | /s/ Xxxx Xxxxxxxxxxx | |||
| Xxxx Xxxxxxxxxxx | ||||
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EXHIBIT A
TO LICENSE AGREEMENT
| A. | US PATENT #6,971,784 of XXXX X. XXXXXXXXXXX ISSUED: DECEMBER 6, 2005 Process for producing fiber reinforced hot-mix asphaltic and cementitous structural materials with fiber pellets produced from carpet waste |
| B. | US
PATENT APPLICATION SERIAL #11/18,522 of XXXX X. XXXXXXXXXXX FILED: JULY 25, 2005 Process for producing and using fibers from waste carpet material |
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