Exhibit 10.19
LICENSE AGREEMENT
between
TITAN TECHNOLOGIES INCORPORATED
0000 Xxxxxxxxxx X.X., Xxxxxxxxxxx, Xxx Xxxxxx 00000
(hereinafter referred to as "Titan")
and
INTERNATIONAL TIRE RECYCLING, CO.
000 X. Xxxxxxxx, Xxxxxx, Xxxxx 00000
(hereinafter referred to as "ITR")
WITNESSETH:
Whereas, TITAN is the owner of certain proprietary technologies
(hereinafter collectively referred to as the "Technology") with respect to
recycling of tires in order to recover marketable oil, steel and carbon
therefrom (but specifically excluding any applications of the Technology with
respect to waste products other than tires); and
Whereas, TITAN has previously authorized use of the Technology in tire
recycling plants located in xxx Xxxxxxxx xx Xxxxx (Xxxxx Xxxxx) and Taiwan and,
in connection therewith, has supervised construction and commissioning of such
plants; and
Whereas, ITR believes it has preliminary financial arrangements in place
for in construction and operation of three tire recycling plants in the Republic
of Mexico, at a feed rate of 100-135 tons of tires per day per plant, including
satisfactory preliminary commitments for supply of tires at such rate;
Whereas, has access to a site, building and infrastructure in Nuevo Laredo,
Mexico for a plant using the Titan Technology at a rate of not less than 100
tons of shredded tires per; and
Now therefore, TITAN and ITR agree as follows:
I. PLANT LICENSE
A. In consideration of the payment of a non-refundable deposit in the amount
of US$500,000.00, US$105,000 of which has been previously received, and the
balance of $395,000 is being paid upon execution of this Agreement, the
receipt and acceptance of which is acknowledged, Titan hereby grants to ITR
an exclusive license (the "License") to utilize its technology and patents
for construction and operation of throughout Mexico and to license Titan's
Technology for the three tire recycling plants in Mexico (the "Plants") on
the conditions stated below. ITR shall have no ownership rights to the
Technology other than the right to utilize Titan's technology in the
Republic of Mexico for the construction and operation of three tire
recycling plants utilizing Titan's TRTM technology and the license to build
and operate additional plants in Mexico on the conditions stated below. The
License for each of the first three plants shall commence upon the payment
of an initial deposit of $300,000 toward the licensing fee as stated in
Paragraph I.B. below by ITR, assuming that ITR has funding in place for
construction and operation of the first Plant and pays all other amounts
under this License Agreement. Design, permitting, financing, governmental
approvals and commencement of construction of the first plant must be
completed (hereinafter called "Commencement of Construction") on or before
September 15, 2004. If the initial License fee payment for the first plant
of $300,000 is not paid by ITR to Titan and construction commenced on the
first plant on or before September 15, 2004, this Agreement and the License
shall be and become null and void unless extended by mutual agreement in
writing.
The Commencement of Construction of the second plant must be completed and
payment of the initial license fee of $300,000 for said second plant must
be paid by ITR to Titan on or before September 15, 2006. The Commencement
of Construction of the third plant must be completed and payment of the
initial license fee of $300,000 for said third plant must be paid by ITR to
Titan on or before September 15, 2008. If ITR fails to build, operate or
commence construction on all three plants by September 15, 2008, then the
exclusive License for the Republic of Mexico and any plants for which
construction has not commenced shall terminate and cease to be exclusive
and will become a non-exclusive license of Titan's technology for Mexico
and the $200,000 paid for the exclusive license will be applied toward the
license fee of the next plant to be built by ITR. If all three plants are
not commenced, completed or in operation by September 15, 2008, then the
exclusive license fee for Mexico and any plant deposits previously paid
will become the property of Titan and the license for any plant(s) for
which construction has not commenced will terminate and any further
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obligation of Titan to ITR cease. The termination of the exclusive license
or loss of any license to built a plant or plants will not affect the
license granted to ITR for any plants built or commenced prior to September
15, 2008. If ITR builds all three plants prior to September 15, 2008, ITR
will be granted the exclusive license for Titan's Technology for the
Republic of Mexico in perpetuity (the "Territory"), subject to payment of
Titan's then applicable license fee for each plant and execution of Titan's
then applicable license agreement for each plant.
B. The Licensing Fee for the Territory of Mexico and the balance of fees and
royalties for each Plant will be paid to Titan in accordance with the
following schedule, as also set forth in the License:
(i) An initial deposit of $100,000.00 for each of the three plants
($300,000) and the $200,000 License fee for Mexico (US$105,000 of
which has previously been paid) shall be paid by ITR to Titan upon
execution of this agreement, but no later than May 15, 2004; and
(ii) $300,000 shall be paid upon commencement of construction of each
plant;
(iii)$300,000 shall be paid upon completion of construction of each plant;
and
(iv) $300,000 shall be paid to Titan when each plant reaches a sustained
capacity of 100 tons of tires per day as determined by Titan.
(v) Production royalties shall commence when each plant reaches a
sustained capacity of 100 tons of tires per day as determined by
Titan.
The production royalties shall be $4.00 per ton of tires fed into the plant for
processing, payable quarterly by January 30, April 30, July 30, and October 30
for the preceding quarter for every quarter after each plant reaches a sustained
capacity of 100 tons of tires per day as determined by Titan.
C. ITR shall be responsible for completing detailed engineering for each plant
(in consultation with Titan) based upon process flow diagrams previously
furnished by Titan and preliminary design work performed by Xxxxxx Xxxx.
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D. Titan agrees to provide two Titan technical personnel to be under the
direction of ITR to provide such technical assistance as may be necessary
or advisable for detailed engineering, construction, commissioning and
operations of each plant, including the period following execution of this
Agreement until the Initial Plant is completed and until each Plant has
become fully operational. The salaries and travel expenses of such
technical personnel shall be paid for by ITR on a current basis within 10
days after the end of any month during which Titan technical personnel
provide services for ITR away from Titan's Albuquerque office. For purposes
of this Agreement, the salaries payable by ITR for said technical personnel
shall be based upon an annual salary of $75,000 per person plus applicable
payroll taxes and Titan shall notify ITR what portion of said employee's
monthly salary and what travel expenses were actually incurred working on
the Initial Plant at ITR's direction out of Albuquerque, based upon a 40
hour work week.
Also, prior to execution of this Agreement Titan has provided to ITR copies
of U.S. Patents 5,871,619 and 5,714,043.
E. The exclusive license to utilize Titan's Technology in the Republic of
Mexico shall commence when Commencement of Construction of the first plant
begins and the initial license fee payment of $300,000 for said first plant
is delivered to Titan. Said license shall be exclusive as to each plant for
such period as each Plant continues in continuous operation. The License
shall also be deemed to grant ITR the right to use the Technology for the
purpose of generating electric power within the defined Territory through
combustion of products produced using the Technology. Titan shall not grant
licenses for the tire recycling Technology (including its use for
generation of electric power) to third parties in the Territory, so long as
the conditions of Article I above are met.
II. SUBSEQUENT PLANTS
A. ITR may add additional plant locations when ITR identifies other locations
and has the necessary financing in place and is ready to sign a licensing
agreement for any subsequent plant.
The license fee for each additional plant shall be $1,000,000 per plant,
25% of which shall be paid to Titan at the time the License is granted; 25%
of which shall be paid at the time construction commences; 25% of which
shall be paid at the time construction is completed; and 25% of which shall
be paid when operation of the plant commences.
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Production royalties for each subsequent plant shall be paid in quarterly
as stated above.
Each subsequent plant shall have its own form of Agreement.
B. Titan has on-going discussions with third parties for construction of tire
recycling plants using the Technology with respect to other locations
outside the Territory. Titan shall have the free and unfettered right to
conclude licensing transactions for the Technology in any other area, state
or country.
Nothing shall prevent Titan from negotiating or completing a merger,
consolidation, reorganization or similar transaction with a third party
which desires to purchase the tire recycling or other technologies owned or
controlled by Titan.
C. Titan and ITR mutually acknowledge and agree that Titan shall be free and
unencumbered to pursue other opportunities outside the Territory covered by
the License.
III. GENERAL PROVISIONS
A. Titan represents that it owns the patents stated above with respect to the
Technology and that it is not aware of any infringements or adverse claims
with respect thereto.
B. Titan and ITR shall use reasonable efforts to ensure that Titan's patent
rights are protected and enforced within the Territory covered by the
License. Titan shall retain exclusive ownership of the Technology,
including the patents and patent rights. In addition, all proprietary
rights to design, know-how, copyright or improvements or modifications to
the process or processes shall remain or become the exclusive property of
Titan, and ITR agrees to execute such documents as may be required from
time to time to assign and transfer to Titan such rights at no further
costs or fees to Titan.
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C. Titan shall exclusively be entitled to apply for and register any patents
or patent improvements arising out of this Agreement or definitive
Agreements hereafter, and USR shall sign all necessary applications or
otherwise provide its approval with respect to any such applications or
registrations. USR shall similarly assist Titan in protecting its patent
rights or proprietary knowledge within the scope of the License and this
Agreement.
D. All prior agreements signed by the parties prior to this Agreement are
hereby null and void, except for the document entitled Confidentiality and
Non-Circumvention Agreement, which is attached hereto as Exhibit A (and by
this reference made a part hereof), which shall survive any termination of
this Agreement.
E. This transaction will be effective when signed by all parties hereto. Each
party states that it has adopted the appropriate corporate resolutions
authorizing adoption and completion of this transaction and that the
persons signing for each corporation have the requisite corporate
authorization and capacity to sign this Agreement.
IV. TERMINATION
This Agreement shall terminate upon the occurrence of following events:
(i) Failure of ITR to make the payments required by Article I (B) above
unless such failure is cured within Fifteen (15) business days
following written notice is delivered to the notice address below, or
such other address provided to Titan by ITR, by Titan that any such
payment has not been received;
(ii) By mutual agreement of the parties; or
(iii)In the event the Plant is constructed and operated, this Agreement
shall terminate upon the permanent cessation of operations of the
Plant and the winding up of all matters in connection with the
cessation of operations.
V. ARBITRATION AND GOVERNING LAW
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This Agreement is governed by the laws of the State of New Mexico. Any disputes
concerning this Agreement shall be exclusively and finally settled by
arbitration in accordance with the provisions of the Uniform Arbitration Act as
in effect in the State of New Mexico with venue lying in Albuquerque, New
Mexico. Provided, however, that nothing contained herein shall be deemed to
restrict the right of Titan to seek other remedies in any jurisdiction of its
choosing in the event that any such dispute relates to alleged violation of the
Confidentiality and Non-Circumvention Agreement attached hereto as Exhibit C.
VI. NOTICES
Notices hereunder shall be given in writing and addressed to the parties at the
respective addresses set forth on the first page of this Agreement. Notices
shall not be effective until receipt has been confirmed by the party sending the
notice. Provided, however, that notices hereunder shall also be effective if
personally delivered to an officer of the recipient or given by facsimile copier
with receipt confirmed. For purposes of this Article, the facsimile copier
number of Titan is (000) 000-0000 (Attention: Xx. Xxx Xxxxxx); the fax address
for ITR is 011-52-867-713-0460 (Attention: Xx. Xxxxxxx Xxxxxx) and by mail to
ITR at 000 X. Xxxxxxxx, Xxxxxx, Xxxxx 00000.
In Witness Whereof, the parties have executed this Agreement this 2nd day of
April, 2004. -----
----- ----
Titan Technologies Incorporated
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Title: President
International Tire Recycling, Co.
By: /s/ Xxxx Xxxx Xxxxxxx Xxxxxx
----------------------------
Title: President
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