EXHIBIT
10.14
TECHNOLOGY LICENSE AGREEMENT
This
Technology License Agreement (the “Agreement”) is
made and entered into December15, 2004, between Bio-Products
International, Inc. (“Bio-Products”), a company
incorporated under the laws of the State of Alabama (the
“Licensor”), and International Waste Processors,
Inc. (“IWP”), a company incorporated under the
laws of the State of Nevada (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,
Dr. Michael II. Eley (“Eley”), 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 U.S. Patent No. 6,306,248
(the “U.S. Patent”) and Patent Cooperation Treaty,
International Application No. PCT/US01/50049 (the
“PCT”) (collectively, the “UAH
Technology”). The UAH Technology constitutes the first
of the two parts of the “Technology” (as defined
herein). Eley is also a major stockholder, President and CEO
of Bio-Products;
Whereas,
pursuant to that certain Amended and Restated License
Agreement, effective August 18, 2003, which supersedes and
replaces the original license agreement date November 13,
1992, and all amendments thereto, between UAH and Bio-Products
(the “Amended and Restated UAH License”) (a
complete 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,
Donald E. Malley (“Malley”) developed certain
proprietary intellectual property, equipment designs, and
process operating procedures related to the UAFI 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 “M & M Technology”).
Malley, the developer, and M & M Consulting, Inc.
(“M & M”), a company incorporated under the
laws of the State of Mississippi and owner of the M & M
Technology, have assigned all rights to the M & M
Technology to Bio-Products (a complete copy of the Amended and
Restated Stock Purchase and Assignment Agreement is attached
as
Exhibit B) .
The M & M Technology constitutes the second of the two parts of
the “Technology” (as defined herein). M & M is also
a minority stockholder in Bio-Products, and Malley is a Vice
President of ho-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, fabrication and 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;
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 the Agreement, the following words and phrases
shall have the following meaning:
1.1
“Technology”
shall mean the inventions, technology, and proprietary
intellectual property and information developed by
Bio-Products, Eley, Malley, M & M, and UAFI 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 or waste
components or the conversion of cellulosic materials to fuels
or other materials or other use of cellulosic materials for
the production of energy or otherwise. Technology includes
without limitation, the UAH Technology, the M & M
Technology, United States Patent Number 6,306,248 and Patent
Cooperation Treaty International Application Number
PCTIUSOI/50049.
1.2
“Third
Party” shall mean any person or entity other than
Bio-Products, Eley, Malley, M & M, UAH, the Licensee and
Sub-Licensees of 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,
limitation, such as but not limited to, any limitations on the
downstream processing or disposal of the cellulosic
product.
ARTICLE II
-
GRANT OF LICENSE
2.1
Subject
to the terms and conditions of the Agreement, Bio-Products
hereby grants a license to the Licensee to utilize the
Technology to construct and operate commercial scale municipal
solid waste processing and recycling facilities in the
following countries: China, Japan, Korea, France Iraq,
Afghanistan, United Arab Emirates, Bahrain, Kuwait, Oman,
Qatar, Saudi Arabia, Yemen, Jordan, Egypt, and
Israel.
|
(a) |
The
license granted by Bio-Products to the Licensee under this
Agreement shall be
exclusive in all of the above named countries.
|
| |
(b)
|
For
each facility to be constructed and operated under this Agreement
by the Licensee, a proposal on the economic feasibility of the
facility shall be prepared and submitted to Bio-Products for review
and comment. Bio-Products shall submit its comments in writing to
the Licensee in a timely manner, not to exceed sixty (60) days. If
the Licensee, at its discretion, decides to proceed with said
facility, then the Licensee shall grant a site-specific sub-license
to a USA entity (the “Sub-Licensee”) that shall own
and/or operate the facility. Such sub-license agreement shall be
subject to the approval of Bio-Products, which approval shall not
be unreasonably withheld.
|
2.2
The
term of this license shall extend from the effective date of
the 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 in any of the countries named in
Paragraph 2.1 until the expiration date of the last patent
issued to Bio-Products and/or UAH covering the Technology in
any of the said countries.
2.3
Anything
to the contrary contained elsewhere in this Agreement
notwithstanding, Bio-Products shall retain all of the
exclusive rights granted under the UAI-I License and all of
the exclusive rights obtained by assignment from Malley and M
& M, 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
Licensee
shall pay a one-time licensing fee of one hundred thousand
dollars ($100,000 USD) per country upon obtaining a contract
to construct a facility in any of the countries in Paragraph
2.1. All amounts of money in this Agreement shall be in United
States Dollars (“USD”).
3.2
The
Licensee or its Sub-Licensee shall pay to Bio-Products a
one-time royalty of ten thousand dollars ($10,000.00 USD) per
ton of capacity for each facility to be constructed in the
countries named in Paragraph 2.1 until this Agreement or any
extension thereof expires or is terminated. The one-time
royalty shall be paid in five (5) installments as follows: (i)
Twenty percent (20%) within thirty (30) days after the
effective date of the sub-license agreement for the facility,
(ii) twenty percent (20%) within thirty (30) days after
completion of plant design and equipment specifications for
the facility, (iii) twenty percent (20%) within thirty (30)
days after completion of equipment vendor selection and
issuance of equipment purchase orders for the facility, (iv)
twenty percent (20%) within thirty (30) days after final
equipment shipment from the USA to the facility site, and (v)
twenty percent (20%) within thirty (30) days after completion
of employee training. All of the above shall be performed
either in the USA or a mutually satisfactory foreign location.
Design engineering, equipment specifications, equipment vendor
selection shall be completed in cooperation with a qualified
engineering firm that is acceptable to Bio-Products and that
will supervise the on-site construction and equipment
installation. Payment of said royalties shall be 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 or its Sub-Licensees
shall pay Bio-Products a monthly fee for technical services.
Such technical services shall initially be provided by Eley
and Malley who are employees of Bio-Products, and who agree to
provide whatever technical services are reasonably requested
of them by Licensee or its Sub-Licensees. Payments to
Bio-Products for the technical services shall be ten thousand
dollars ($10,000 USD) per month payable on or before the first
(1
st )
business day of the month following the Licensee’s or its
Sub-Licensees’ initial down payment for the process vessels
for construction of the licensee’s plant and continuing each
month thereafter until the facility has been in operation for
thirty (30) Operating Days, as defined in Paragraph 1 .3 (the
“Operational Date”). During any above period
Bio-Products shall provide whatever services are reasonably
requested of it by Licensee or its Sub-Licensees. Bio-Products and
Licensee agree that all phases of the design and construction of a
facility in the countries named in Paragraph 2.1, including
employee training shall occur in the United States or a mutually
agreeable foreign location.
If
at any time Bio-Products fails to undertake technical services
requested, then Licensee or its Sub-Licensees may cease all
payments as set forth in this Paragraph 3.3, until such time
as the failure to undertake the technical services request is
remedied.
3.4
All
facilities to be constructed and operated under this Agreement
shall be connected to Bio-Products via the Internet and video
communications for monitoring the operation of key pieces of
equipment and videoconferences with facility management and
maintenance personnel. For technical services to be provided
by Bio-Products during periods not included in Paragraph 3.3,
Licensee or its Sub-Licensees shall pay five hundred dollars
($500 USD) per day, based on eight (8) hours per day, per
person payable in ten (10) days after receipt of an invoice
from Bio-Products. Bio-Products shall invoice Licensee or its
Sub-Licensees for such technical services no more than once
each month. The daily rate for technical services provided by
Bio-Products of five hundred dollars ($500 USD) shall be
adjusted January 1 of each year based on the United States
Department of Labor’s Bureau of Labor Statistics’
Consumer Price Index, using the date of this Agreement for
determining the base for computing the adjustment. For
example, assuming the base for the date of this Agreement is
100 and the index figure on the date for adjustment is 105,
the adjustment would be 105/100=105%. The existing daily rate
of five hundred dollars ($500 USD) would then be increased by
five percent (5%) or twenty-five dollars ($25 USD) to five
hundred twenty-five dollars ($525 USD).
3.5
Additionally,
with respect to the technical services provided by Bio-Products,
the Licensee or its Sub-Licensees shall either provide pre-paid
expense accounts or reimburse Bio-Products and/or its employees for
the reasonable transportation, lodging, food, and other expenses
incurred by Bio-Products and/or its employees in the performance of
such technical services for the Licensee or its Sub--Licensees. In
either case, itemized expense reports and receipts shall be
submitted to the Licensee or its Sub-Licensees by Bio-Products
and/or its employees within ten (10) business days of completion of
travel or a specific project in which expenses arc incurred. The
Licensee shall establish a travel expense policy and procedure,
which policy and procedure its Sub-Licensees and Bio-Products
and/or its employees shall adhere to unless the Parties agree, in
writing, otherwise. Any reimbursement for expenses shall be paid by
the Licensee or its Sub-Licensees within ten (10) business day of
receipt of such expense reports submitted by Bio-Products and/or
its employees.
3.6
For
all facilities to be sub-licensed under this Agreement, the
Licensee agrees that the facility design, equipment designs
and specifications, on-site engineering firm, and all facility
management and maintenance personnel must be approved by
Bio-Products, which approval shall not be unreasonably
withheld.
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 manufacture, and the Licensee and its
Sub-licensees shall purchase all required vessels exclusively
from Bio-Products. The purchase price shall be cost plus
fifteen percent (15%), not including shipping costs or taxes.
All other equipment required for construction and operation of
waste processing and recycling facilities utilizing the
Technology may be purchased from other vendors with mutual
agreement between the Licensee, its Sub-Licensees,
Bio-Products, and the on-site engineering firm. All vessels to
be constructed under this Agreement are to be built to
Bio-Products’ specifications by or under the supervision
of Mississippi Tank Company (“MTC”) 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 or its
Sub-Licensees. Bio-Products shall from time to time seek the
qualifications of and obtain cost quotations from alternative
vessel manufacturers to manufacture future process vessels as
needed such that the same may be provided to Licensee or its
Sub-Licensees having equal or higher quality than that
established by Bio-Products from MTC and may be transported to
the required facility at a cost equal to or less than that
established by Bio-Products from MTC, including the cost of
shipping and taxes. If future vessels arc purchased at a cost,
excluding shipping costs and taxes, below the most recent
purchase price, Licensee and its Sub-Licensees agrees to pay
Bio-Products an amount equal to twenty-five percent (25%) of
the cost savings.
3.8
The
Licensee shall maintain all such books and records as are
necessary to accurately determine all amounts due and payable
to Bio-Products, Eley, Malley, or its other employees under
Article III of this Agreement, which books and records the
Licensee and/or its Sub-Licensees 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. Bio-Products agrees to treat
all such information respecting Licensee’s books and
records as confidential.
3.9
All
payments shall be paid by wire transfer of funds to a bank
account to be designated by Bio-Products.
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, both foreign and domestic, shall remain the
sole and exclusive property of Bio-Products and/or UAH. In
addition, 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’ or UAH’s
name.
4.2
All
rights, 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
employee or agent of Bio-Products, or the Licensee, relating
to the Technology shall be owned by Bio-Products and/or UAH.
All patent applications and patents thereon, foreign and
domestic, whether made by any of the Parties or UAH, or
jointly by the Parties and UAH or jointly by at least one
employee of each Party, shall be owned exclusively by
Bio-Products and/or UAH. Bio-Products shall provide the
Licensee with detailed information concerning all such
related, future inventions, processes, enhancements,
improvements and other discoveries upon request. To the extent
required to accomplish the foregoing, the Licensee shall
execute any and all assignments of patents or other documents
to Bio-Products and/or UAH, if required for any such patents
to issue in Bio-Products’ or UAH’s name. For
future patents to be applied for and prosecuted in any of the
countries named in Paragraph 2.1, Licensee shall
req
|
