THE SYMBOL “*****” DENOTES PLACES
WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Exhibit 10.27
LICENSE AGREEMENT
This License
Agreement (this “Agreement”) is made and entered into
as of the 6 th day of February, 2008, by and between
AlphaKat - Global Energy GmbH, a company organized and existing
under the laws of Germany (“Licensor”), and American
Renewable Diesel, LLC, a limited liability company organized and
existing under the laws of the State of Delaware
(“American”).
WHEREAS, AlphaKat
GmbH, a company organized and existing under the laws of Germany
(as further defined below, “AK”), has granted certain
rights to Licensor with respect to a proprietary technology to
convert waste material that contains hydrocarbons into diesel oil
(as further defined below, the “Technology”) in various
countries, including the United States;
WHEREAS, American
is interested in obtaining license rights from Licensor with
respect to the Technology, all on the terms and conditions set
forth herein, to secure or to help secure orders for the sale of
the equipment that utilizes the Technology; and
WHEREAS, Licensor
is willing to grant such license rights to American, all on the
terms and conditions set forth herein;
NOW, THEREFORE, in
light of the mutual premises set forth herein and other good and
valuable consideration, the receipt and the sufficiency of which
are hereby acknowledged, the parties hereto, intending to be
legally bound hereby, agree as follows.
ARTICLE 1 – DEFINITIONS AND
INTERPRETATION
Section 1.1 Capitalized Terms . Unless
otherwise specified herein, the following capitalized terms shall
have the following meanings:
“
Affiliate ” means, in relation to any Person, any
other Person that controls, is controlled by, or is in common
control with, such Person. For the purpose of this definition,
control means the direct or indirect control of fifty percent (50%)
or more of the voting rights in such Person or the power to direct
the management or policies of such Person, whether by operation of
law, by contract or otherwise. Except as shall otherwise be
expressly provided in this Agreement, and for the avoidance of any
doubt, as of the Effective Date, (i) Licensor and AK are Affiliates
and (ii) Licensor and Global are Affiliates, but AK and Global are
not Affiliates.
“
Agreement ” has the meaning set forth in the first
paragraph hereof.
“ AK
” means AlphaKat GmbH, a company organized and existing under
the laws of Germany, and its successors and permitted assigns.
“
American ” has the meaning set forth in the first
paragraph hereof and includes its successors and permitted
assigns.
“
Commercial Waste ” means all non-hazardous solid waste
that is collected from commercial establishments, including
residential apartment buildings, office buildings, restaurants,
industrial parks, all other business facilities and all recyclable
materials from recycling facilities.
“
Competitor of Licensor ” means a Person, directly or
through Affiliates, engaged primarily in the business of selling
equipment that converts waste or organic feedstock(s) containing
hydrocarbon materials into diesel fuel or any Person that is
involved primarily in the development of such equipment or the
technology on which it is based.
“
Contracted Waste” means all non-hazardous waste,
regardless of the source of such waste, which is under contract to
be delivered to Covanta or any of its Affiliates for disposal in,
or processing by, one of the facilities owned or operated by
Covanta or any of its Affiliates.
“
Covanta ” means Covanta Energy Corporation, a Delaware
corporation.
“ Covanta
License Agreement ” means the License Agreement of even
date herewith entered into between Licensor and Covanta, a copy of
which is attached hereto as Exhibit 1.
“
Customer ” means any Person that is not owned or
controlled by American that wants to purchase a System for its own
account.
“
Default ” has the meaning set forth in Section
10.1.
“
Demonstration Plant ” means the System to be purchased
by Covanta as provided for in the Covanta License Agreement, the
order for which has been procured by American.
“
Dispute ” has the meaning set forth in Section
9.1.
“
Effective Date ” has the meaning set forth in Section
5.1.
“
Extended Period ” means the period that begins on the
date that the Initial Period terminates and ends on the date that
this Agreement terminates.
“
Feedstock ” means Household Waste, Contracted Waste,
Commercial Waste or Radial Biomass, as the case may be.
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“ Full
Right ” means that the Person being granted the right(s)
described herein shall be the only Person that is entitled to
exercise such right(s) so long as this Agreement is in effect and
that no other Person shall be authorized, by the grantor of such
right(s), to exercise such right(s) or be granted such
right(s).
“
Global ” means Global Energy, Inc., a Nevada
corporation.
“
Household Waste ” means all non-hazardous,
post-recycled municipal solid waste which is collected from
residences, which waste is of the type normally accepted for
processing at waste to energy facilities in the United States.
“ ICC
” means the International Chamber of Commerce.
“ ICC
Rules ” has the meaning set forth in Section 9.1.
“
Improvements ” means all the techniques, enhancements,
modifications, changes, experience, methods, information, data or
knowledge that will be created or acquired in the future relating
to the Technology and/or the manufacturing of such components for
Systems (whether or not patentable, useful or workable) through the
implementation, development, testing and improvement of the
Technology.
“ Initial
Period ” means the period which begins on the date that
the Interim Period ends and terminates on the second (2
nd ) anniversary thereof.
“
Intellectual Property ” means any intellectual
property and/or proprietary information and materials relating to
the Technology along with all rights therein, whether existing
before or conceived or developed after the Effective Date (except
as otherwise expressly provided), including: (i) patents, patent
applications, patent disclosures and inventions (whether or not
patentable and whether or not reduced to practice), including the
Patents; (ii) trademarks, service marks, trade dress, trade names,
corporate names, logos, slogans and Internet domain names, together
with all goodwill associated with each of the foregoing; (iii)
copyrights and copyrightable works; (iv) trade secrets,
confidential information and know-how (including ideas, formulae,
compositions, manufacturing and production processes and
techniques, research and development information, test data and
results, drawings, specifications, designs, supplier lists and
related information); and (vi) registrations, applications,
divisionals, continuations, continuations-in-part, foreign
counterparts and renewals for any of the foregoing.
“ Interim
Period ” means the period which begins on the Effective
Date and ends twelve (12) months following the date that the
Demonstration Plant has been successfully commissioned and is ready
for commercial operation; provided , however , that
if the Demonstration Plant passes the performance test that is
agreed to by AK and Covanta (all as further provided for in Section
2.2(c) of the Covanta License Agreement) more than thirty (30) days
prior to the scheduled end of the Interim Period, the Interim
Period shall terminate thirty (30) days following the date that the
Demonstration Plant has passed
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such performance test, Licensor to provide a
notice to such effect to American in writing; provided
further , however , that the Interim Period shall in no
event be longer than two (2) years.
“ KDV
500 ” means the system of components, including all of
the structural steel, piping, pumps, vessels, control systems,
wiring, two proprietary “mixing turbine pumps” and the
operations, maintenance and start-up manuals provided by AK, to
convert hydrocarbon feedstock, including any Feedstock, into diesel
oil using the Technology which is capable of producing a minimum of
500 liters of diesel oil per hour.
“
Licensor ” has the meaning set forth in the first
paragraph hereof and includes its successors and permitted
assigns.
“
Parties ” means Licensor and American.
“
Party ” means Licensor or American, as the case may
be.
“
Patents ” means any existing or future patent
applications, patents, registrations, utility models and utility
model applications relating to the Technology which are necessary
or useful to manufacture or to sell, offer for sale, use or
otherwise make available Systems or the components of Systems,
including those set forth in Exhibit 2 attached hereto.
“
Person ” means any natural person, corporation,
company, partnership, business trust, governmental authority or
other entity.
“
Purchase Order ” has the meaning set forth in Section
2.5.
“
Purchaser ” has the meaning set forth in Section
2.5.
“
Qualified Right ” means that the Person being granted
the right(s) described herein shall be entitled to exercise such
right(s) so long as this Agreement is in effect, but the grantor of
such right(s) shall be entitled to grant such right(s) or allow
such right(s) to be exercised by all other Persons except a Person
that is precluded from exercising such right(s) under the express
terms hereof.
“ Radial
Biomass ” means biomass, including wood, wood waste and
other types of cellulosic materials which are collected within or
from an area within a 100 mile radius of any biomass facility owned
by Covanta or an Affiliate of Covanta in the states of California
or New York as of the Effective Date.
“ Rights
Agreements ” means (i) the “Terms of
Agreement” dated May 2, 2007, (ii) the
“Shareholders’ Agreement” dated July 10, 2007 and
(iii) the Articles of Association of Licensor dated November 14,
2007 and November 22, 2007, a copy of each of which is attached
hereto in Exhibit 2.
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“
System ” means any system of components, whether it is
in existence today or developed hereafter, including all of the
structural steel, piping, pumps, vessels, control systems, wiring,
the proprietary “mixing turbine pump(s),” any new
components of any future system of components and all of the
operations, maintenance and start-up manuals provided by AK, to
convert hydrocarbon feedstock, including any Feedstock, into diesel
oil using the Technology, including, for the avoidance of doubt,
the KDV 500.
“
Technology ” means the proprietary, renewable diesel
technology developed by Dr. Christian Koch (as well as any related
technology licensed to Dr. Christian Koch or to AK) to convert
municipal solid waste, organic materials, sludge and other
hydrocarbon materials, including Feedstock, to diesel oil,
including all Improvements to such technology made or acquired from
time to time, including Intellectual Property, Systems, the
formulation of catalysts used in Systems and all related materials
and information.
“
Territory ” has the meaning set forth in Section
2.1.
“ Third
Party Purchaser ” has the meaning set forth in Section
2.5.
Section 1.2 Interpretation . In this
Agreement, unless otherwise indicated or required by the
context:
(a) Reference to
and the definition of any document (including this Agreement) or
any applicable law shall be deemed a reference to such document or
applicable law as it may be amended, supplemented, revised or
modified from time to time;
(b) All references
to an “Article,” “Section” or
“Exhibit” are to an Article or Section hereof or to an
Exhibit attached hereto;
(c) Article and
Section headings and other captions are for the purpose of
reference only and do not limit or affect the meaning of the terms
and provisions hereof;
(d) Defined terms
in the singular include the plural and vice versa, and the
masculine, feminine and neuter gender include all genders;
(e) The words
“hereof,” “herein” and
“hereunder” and words of similar import refer to this
Agreement as a whole and not to any particular provision of this
Agreement; and
(f) The words
“include,” “includes” and
“including” mean include, includes, and including
“without limitation” and “without limitation by
specification.”
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ARTICLE 2 – LICENSE RIGHTS
Section 2.1 Grant of License Rights .
Subject to the terms of this Agreement, Licensor hereby grants
American the Full Right in the Territory to market and sell Systems
and utilize the Technology. As of the Effective Date, the territory
(the “Territory”) shall be the states of California,
New York and Texas, it being agreed that Licensor shall not grant
any Person the right to sell Systems in New Jersey or Florida
before the date by which American must satisfy the requirement set
forth in clause (ii) of the first sentence of Section 2.1(b) . For
the avoidance of doubt, American shall be entitled to exercise any
or all of the license rights that are granted to it in the
Technology itself or through any of its Affiliates, but American
shall not have the right to issue sublicenses to any Person other
than an Affiliate. The Parties further agree as follows:
(a)
Notwithstanding anything that is contained herein to the contrary,
American shall be credited for the sale of all of the Systems sold
to Covanta during the term of this Agreement regardless of whether
such Systems are for use inside or outside the Territory.
(b) American shall
be required to secure or to help Licensor or Global to secure (i)
an order for one KDV 500 prior to the end of the Interim Period (it
being agreed that the Purchase Order being placed by Covanta for
the Demonstration Plant satisfies this requirement) and (ii) orders
for an additional two KDV 500s prior to the end of the Initial
Period. If American fails to secure or help Licensor or Global to
secure orders for a total of three KDV 500s prior to the end of the
Initial Period, Licensor shall have the right, in its sole and
absolute discretion, to notify American that it must give up its
Full Rights for one (1) of the states in the Territory (such state
to be selected by American). If American meets the two (2)
requirements set forth in this Section 2.1(b), the Territory
thereafter shall be the states of California, New York, Texas, New
Jersey and Florida. The phrases “secure orders” as used
herein mean that a Person has executed a Purchase Order for one or
more KDV 500s and made the initial deposit thereunder.
(c) Licensor
acknowledges and agrees that the ability of American to meet the
requirements set forth in this Section 2.1 will depend, in part, on
the initial three KDV 500s installed in the United States
(including the Demonstration Plant) demonstrating the technical and
financial viability of the Technology. Notwithstanding anything
contained herein to the contrary, (i) if there is any delay in the
installation of any of the initial three (3) KDV 500s in the United
States, including the Demonstration Plant (with such KDV 500s
meeting all performance guarantees), beyond the date committed by
AK in the applicable Purchase Order or (ii) if any such KDV 500s
experience operating or financial problems due to a failure of the
KDV 500 to operate in accordance with its performance guarantees,
then all of the time periods set forth in this Section 2.1 shall be
extended automatically for the full period of all such delays for
all purposes hereof.
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(d) During the
Extended Period, American shall be required to secure orders for:
(i) two (2) KDV 500s per year for each of the first two (2) full
calendar years of the Extended Period; (ii) five (5) KDV 500s per
year for each of the next two (2) calendar years of the Extended
Period; and (iii) ten (10) KDV 500s per year for each calendar year
thereafter, each such determination to be made on a cumulative
basis (such that American shall be entitled to credit additional
KDV 500s sold in one year above the minimum requirement for that
year to a later year). If American fails to meet any such targets
in any calendar year during the Extended Period, Licensor shall
have the right, in its sole discretion, to notify American that it
shall only have a Qualified Right in all of the states in the
Territory to market and sell Systems and utilize the Technology for
the remainder of the term of this Agreement. Licensor agrees that
all Systems sold by Licensor outside the Territory that are
pursuant to a referral made by American shall count towards
American’s minimum purchase requirements hereunder. However,
none of the Systems purchased by Covanta or an Affiliate of Covanta
for its own account during the Extended Period shall count towards
meeting American’s minimum purchase requirements unless the
sale of Systems is to a project developed by American or an
Affiliate of American in which Covanta is an investor.
(e) For purpose of
meeting any of the minimum order thresholds for KDV 500s which are
set forth in this Section 2.1, if a System is developed by AK (such
as the “KDV 2000” which is currently under development
by AK) that is capable of producing a higher amount of diesel oil
per hour than a KDV 500 (expected to be 2,000 liters per hour in
the case of a “KDV 2000” as compared to 500 liters per
hour for a KDV 500), then such System will count as more than one
KDV 500 based on the amount of diesel oil per hour capable of being
provided (expected to be four KDV 500s in the case of a “KDV
2000”).
(f)
Notwithstanding anything contained herein to the contrary, American
shall not lose its Full Rights in any state in the Territory if it
fails to meet the cumulative order requirements in Section 2.1(b)
or (d) if (i) AK is not able to produce enough Systems to meet the
Purchase Orders secured by American, Licensor and Global or (ii)
any problems experienced with the Technology in the Systems
installed by AK make it commercially unreasonable for American to
secure orders for any additional Systems until such problems have
been resolved, in which case the Parties shall agree to an
equitable adjustment, in good faith, to the cumulative requirements
provisions of Sections 2.1(b) and (d) or extend the date for such
requirements to be performed.
(g) If American
fails to meet its performance obligations under this Section 2.1
and Licensor elects to require American to give up its Full Rights
in one or more of the states in the Territory as further provided
for herein, American’s sole penalty will be for its rights in
such state(s) to become a Qualified Right to market and sell the
Technology for the remainder of the term of this Agreement.
Section 2.2 Obligation to Make Referrals
. If any Person contacts Licensor or any of its Affiliates
regarding the purchase of one or more Systems for installation in
the Territory, Licensor shall refer such Person to American.
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Section 2.3 Sales to Covanta Energy . The
sale of all Systems to Covanta or to any of its Affiliates,
including the Demonstration Plant, shall be pursuant to Purchase
Orders placed with AK through Licensor, and American shall derive a
license fee on all such sales. Licensor shall mark up the cost of
all of the Systems that are sold to Covanta or any of its
Affiliates (other than the System for the Demonstration Plant) by
ten percent (10%) and pay fifty percent (50%) of such amount to
American as its commission. Such commissions shall be paid to
American as the payments that are due from Covanta or its
Affiliates are received under the applicable Purchase Order.
Section 2.4 Commission on Sales to Other
Customers . American shall be entitled to a commission of five
percent (5%) on all Systems that are sold in the Territory. If
American identifies a Customer that is interested in purchasing one
or more Systems in an area that is outside the Territory, American
shall refer such Customer to Licensor and, if such sale is
completed (the decision to complete such sale to be made by
Licensor in its sole discretion), American shall be entitled to a
commission of five percent (5%) on such sale. Licensor shall mark
up the cost of all of the Systems on which American is entitled to
a commission by ten percent (10%) and pay fifty percent (50%) of
such amount to American as its commission. Commissions shall be
paid to American as the payments that are due under the applicable
Purchase Orders are received. For the avoidance of doubt, in
connection with Customers that are identified by American outside
of the Territory, Licensor shall be obligated to pay the commission
to American if the System is sold within two (2) years after the
Customer is identified to Licensor by American.
Section 2.5 Purchase Orders . All
purchase orders for System(s) (“Purchase Orders”) shall
be entered into by and between AK (or its designee) and the
ultimate purchaser of such System(s) (the “Purchaser”),
although all Purchase Orders shall be placed through Licensor and
provide for the payment of a sales commission to Licensor (except
for the Systems sold for the Demonstration Plant). Each Purchase
Order shall include a set of representations and warranties made by
AK to the Purchaser which are consistent with those provided by
Licensor to American in Article 8 and a non-exclusive, irrevocable
and perpetual license (a “Use License”) for the
Purchaser to (i) use, practice, operate, maintain, repair and make
Improvements to the System(s), (ii) purchase the catalyst that is
required for the operation of the System(s) from AK and/or any
Person that is authorized to manufacture and/or sell such catalyst
by AK, (iii) purchase components and spare parts for the System(s)
from AK and/or any Person that is authorized to manufacture and/or
to sell such components and spare parts and (iv) reproduce, modify
and internally distribute copies of any and all materials and
information received by American from Licensor and/or AK relating
to the System(s), in whole or in part. In addition, if the
Purchaser sells or transfers any of the System(s) to any Person (a
“Third Party Purchaser”), the Purchaser shall be
entitled to transfer its Use License to such Third Party Purchaser
and each Third Party Purchaser shall be entitled to transfer such
Use License to another Third Party Purchaser. Notwithstanding
anything to the contrary contained or implied in clauses (ii) or
(iii) of this Section 2.5, all Purchasers and all Third Party
Purchasers shall be entitled to procure components, spare parts and
catalysts that
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are commercially available from any Person.
Further, if AK and the Persons authorized to make spare parts and
components that are not commercially available are unable to timely
supply the spare parts and components ordered by a Purchaser or a
Third Party Purchaser, such Purchaser or Third Party Purchaser
shall be authorized to purchase such spare parts and components
from any other Person and to make such spare parts and components
itself.
ARTICLE 3 – ANNUAL PRICING; NO
ROYALTIES
Section 3.1 Annual Pricing . Licensor,
American and AK shall agree on a procedure to establish the price,
at the end of each November, for the following year, of (i)
Systems, (ii) the catalyst that is used with the Technology, (iii)
replacement/spare parts for Systems and (iv) the cost for AK or
Licensor to provide services on Systems or other engineering
services in order to (a) ensure that such prices are not increased
inappropriately from year to year and (b) to provide price
certainty to American for the upcoming year in connection with its
sales and marketing efforts. The Parties are aware that the current
price of a KDV 500 includes a technology fee of [*****] and
acknowledge that the minimum technology fee to AK from the sale of
a System in the future, as arrangements are put in place by AK to
broaden the manufacturing base and reduce the total cost of the
Systems will include a technology fee not to exceed [*****].
Licensor, American and AK shall use their best efforts to negotiate
in good faith and agree as soon as practicable to the terms of such
procedure and any other mechanisms that may be necessary or helpful
to determine the pricing for the Systems or any other items.
Licensor shall provide American, prior to the end of each November,
with the updated pricing for the following year. Licensor further
agrees (and AK, by its execution of this Agreement in the space
provided below, agrees) that American’s Customers will not be
charged more during any year for a System than the lowest price
that is paid by any other licensee of Licensor or customer of AK
for a comparable System in such year in the United States.
Section 3.2 No Royalties . Neither
American (or its Affiliates) nor any Purchasers or Third Party
Purchasers shall be required to pay royalties to Licensor, AK,
Global or any other Person in connection with the exercise by
American or its Affiliates of any of the license rights in the
Technology granted under this Agreement.
ARTICLE 4 – CERTAIN OBLIGATIONS OF THE
PARTIES
Section 4.1 Supply of Information .
Licensor shall supply American from time to time with all
information relating to the installation and operation of Systems
reasonably required or requested by American. Further, Licensor
and/or AK shall provide American with any revised or updated
installation or operating manuals or bulletins as soon as such
materials are completed and available for distribution.
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Section 4.2 Provision of Technical
Assistance . Notwithstanding Section 4.1, Licensor shall not
have any obligation to provide any engineering services or
technical assistance regarding the Technology or the Systems under
this Agreement. Any such services and assistance may be provided
under other agreements with Licensor or with AK.
Section 4.3 Acknowledgment and Agreement
. Licensor shall arrange for Dr. Christian Koch to execute this
Agreement in the space that is provided below, on behalf of himself
and in his capacity as the President of AK, to evidence (i) their
acknowledgement that they have reviewed this Agreement and agree to
any obligations on their parts, (ii) their consent to the terms of
this Agreement and (iii) their agreement for AK to enter into a
substantially similar form of license agreement with American if
the rights of Licensor pursuant to or as contemplated by the Rights
Agreements are not supplemented to the extent necessary to enable
Licensor to grant all of the rights being granted to American
hereunder or if any such rights granted to Licensor are terminated
for any reason, such new license agreement to preserve
American’s Full Rights and/or Qualified Rights in the
Territory.
ARTICLE 5 – EFFECTIVE DATE AND
TERM
Section 5.1 Effective Date . This
Agreement shall become effective on the date that it has been
signed by both of the Parties and by Dr. Christian Koch (the
“Effective Date”).
Section 5.2 Term of the Agreement . This
Agreement shall continue in effect from the Effective Date until
July 1, 2028 unless it is terminated earlier by the provisions
hereof or by either Party in accordance with its rights
hereunder.
ARTICLE 6 – INTELLECTUAL
PROPERTY
Section 6.1 No Transfer of Ownership of the
Technology . The Parties agree that this Agreement shall not
transfer the ownership of the Technology or any of the Intellectual
Property therein, and that American will not have any right, title
or interest in or to the Technology, except as expressly licensed
to American pursuant to this Agreement or any separate
agreement.
Section 6.2 Improvements . All
Improvements conceived, developed or acquired by AK or Licensor
during the term hereof shall be included under the license rights
granted herein. All such Improvements conceived, developed or
acquired exclusively by AK or Licensor shall remain the property of
AK or Licensor, respectively.
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ARTICLE 7 – INFRINGEMENT AND
DESIGNATIONS
Section 7.1 Notice of Infringements .
During the term hereof, Licensor and American shall promptly notify
each other in writing with respect to any claim of infringement of
any Patent or other right asserted against it by any Person arising
out of the exercise of the rights being granted hereunder.
Section 7.2 Indemnity for Infringement or
Misappropriation . Licensor shall indemnify and hold harmless
American, its Affiliates, any Purchasers and Third Party Purchasers
(collectively, the “Indemnified Parties”) from any and
all claims of infringement or misappropriation and attendant
damages and costs by virtue of the exercise of the rights granted
to an Indemnified Party hereunder or under any Purchase Order. To
secure the indemnity provided for in this Section 7.2, the
Indemnified Party shall: (i) provide notice to Licensor of the
claim giving rise to the liability as soon as reasonably
practicable after receiving a notice of the claim, it being agreed
that any delay in providing such notice to Licensor shall not
relieve Licensor of its indemnity obligations except to the extent
it was prejudiced by such delay; and (ii) use reasonable business
efforts to cooperate fully with Licensor in defending the claim;
provided , however , that Licensor shall not enter
into any settlement or compromise creating any payment obligation,
admission or other obligation on the part of any Indemnified Party
without such Indemnified Party’s prior written consent. The
Indemnified Parties shall permit Licensor to defend and compromise
such claim, but each Indemnified Party may employ its own counsel,
at its own expense, to assist Licensor with respect to any such
claim. Notwithstanding the foregoing, the Indemnified Parties shall
not be entitled to indemnification hereunder if the infringement is
due to the Indemnified Party or its Affiliates: (i) using the
System in violation of the express written operating instructions
that are provided by AK if the subject claim would have been
avoided but for such unauthorized use; or (ii) modifying the System
in a manner which is not authorized by Licensor which actually
causes such infringement if the subject claim would have been
avoided but for such modification.
Section 7.3 Use of Designations . If
requested by Licensor in writing, American shall, in accordance
with the written instructions of Licensor, provide for any System
or any part of the Technology, legible statutory notice of any
Patent, the existence of the license herein granted and the
identity of Licensor and/or AK. Notwithstanding anything contained
herein to the contrary, no rights are being granted by either Party
to the other regarding their respective trade names or
trademarks.
Section 7.4 Limitation of Liability . The
Parties expressly waive any claims against each other and their
respective Affiliates for indirect, special, non-compensatory,
incidental, punitive, exemplary or consequential damages of any
type, whether arising in contract or tort (including negligence,
whether sole, joint or concurrent or strict liability), arising out
of or relating to this Agreement or a breach hereof;
provided , however , that this provision shall not
waive any claims that the Parties may have under any other
agreements entered into between the Parties. The limitations on
liability and the remedies set forth in this Agreement have been
expressly bargained for by the Parties and reflect the knowing
allocation of the risks inherent in this Agreement between the
Parties.
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ARTICLE 8 – REPRESENTATIONS AND
WARRANTIES
Section 8.1 Party Representations . As of
the Effective Date, each Party represents and warrants to the other
Party that:
(a) It is duly
organized and validly existing and, where applicable, is in good
standing under the laws of the jurisdiction of its formation and it
has all requisite power and authority to enter into and perform its
obligations under this Agreement;
(b) The execution,
delivery and performance of this Agreement have been authorized and
approved by its Board of Directors or Managers, as the case may be,
and do not and will not (i) violate any law, rule, regulation,
order, decree or permit which is applicable to it or (ii) violate
its organizational documents or any agreement to which it is a
party;
(c) This Agreement
is a legal and binding obligation of such Party, enforceable
against such Party in accordance with its terms, except to the
extent enforceability is modified by bankruptcy, reorganization and
other similar laws affecting the rights of creditors generally and
by general principles of equity; and
(d) There is no
litigation pending or, to the best of its knowledge, threatened to
which such Party, its parent or any of its subsidiaries is a party
that, if adversely determined, would have a material adverse effect
on the financial condition, prospects or business of such Party or
its ability to perform its obligations under this Agreement.
Section 8.2 Licensor Representations
Regarding the Technology . As of the Effective Date, Licensor
represents and warrants to American, its Affiliates and each
Purchaser and Third Party Purchaser that:
(a) A list of all
relevant Patents as of the Effective Date is set forth in Exhibit 3
attached hereto and all such Patents are current and valid as of
the Effective Date with any and all required fees to maintain the
same having been paid;
(b) Licensor has
licensed or otherwise has or otherwise will secure the rights in
and to the existing and future Technology, including Intellectual
Property, necessary for Licensor to grant to American the rights
being granted in this Agreement, and there are no rights, options
or other contractual obligations on the part of AK, Dr. Christian
Koch of any other Person that would result in such Technology,
including Intellectual Property, no longer being owned by or
licensed to AK or licensed by Licensor, and AK shall maintain,
prosecute and defend (or cause any other Person that owns any
Patents to maintain, prosecute and defend) all Patents and pay all
fees in connection therewith;
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(c) The
Technology, including Intellectual Property, does not use or
include or rely on any third party intellectual property and no
third party owns any rights, including intellectual property
rights, necessary to American’s exercise of any of its rights
under this Agreement that have not been licensed to AK;
(d) Except for any
rights granted to Covanta or Global, no rights have been provided
to, or authorized for, any Person to exercise any rights in, the
Technology, including the Intellectual Property, which are
inconsistent with the rights granted to American hereunder;
(e) The Technology
as currently used by AK and as planned to be used by Licensor and
American in accordance with the terms of this Agreement, does not
infringe, misappropriate or otherwise violate any patent,
copyright, trademark, trade secret or other proprietary or
intellectual property right of any Person, and AK and/or Licensor
have not received, and to its knowledge does not know of any facts
that could give rise to, any charge, complaint, claim, demand,
notice or other communication (i) alleging any such infringement,
misappropriation or other violation, (ii) requesting that AK and/or
Licensor take a license from any Person or (iii) challenging the
validity or enforceability of the Intellectual Property. AK and/or
Licensor has no knowledge of any current or threatened
infringement, misappropriation or other violation by any Person of
the Intellectual Property, and AK and/or Licensor has not, and has
no knowledge of any facts that would require that there be, sent or
otherwise communicated to any Person any charge, complaint, claim,
demand or notice asserting infringement, misappropriation or other
violation of any of any such Intellectual Property; and
(f) Licensor has
provided American with a true and correct copy of the Rights
Agreements and there has not been any amendment to the Rights
Agreements since they were executed. Licensor shall provide
American with a true and correct copy of any amendments made to the
Rights Agreements during the term hereof and a copy of any
additional agreements entered into by Licensor with AK or Dr.
Christian Koch regarding the rights of Licensor with respect to the
Technology. Licensor shall provide American with a copy of any
default notice or any similar communications received by Licensor
from AK during the term hereof and provide American with updates
from time to time regarding the resolution of any such termination
notice. Licensor shall not agree to or make any amendment to any of
the Rights Agreements or enter into any other agreements regarding
its rights to the Technology that would reduce or affect any of
American’s rights under this Agreement.
ARTICLE 9 – RESOLUTION OF
DISPUTES
Section 9.1 Dispute Resolution . The
Parties agree to cooperate with each other in good faith to try to
resolve any controversy or dispute between them arising under this
Agreement (each a “Dispute”) in accordance with the
following procedures:
(a) If a Dispute
cannot be resolved informally, such Dispute shall initially be
referred, through written notice by one Party to the other Party,
to a meeting of senior
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management representatives of the Parties. The
senior management representatives will meet to resolve the Dispute
within fifteen (15) days following presentation of the matter to
them.
(b) If the Dispute
cannot be resolved pursuant to Section 9.1(a), the Chief Executive
Officers of the Parties shall meet to resolve the Dispute within
fifteen (15) days following the conclusion of the consideration of
the Dispute under Section 9.1(a) .
(c) If the matter
is not resolved within thirty (30) days of the written notice in
Section 9.1(a), either Party may submit the Dispute to arbitration
by submitting a Request for Arbitration pursuant to Article 4 of
the Rules of Arbitration of the ICC or such equivalent arbitration
rules of the ICC then in effect (the “ICC Rules”),
provided that nothing in this Agreement shall prevent or delay
either Party from applying for interim or conservatory measures
pursuant to Article 23 of the ICC Rules.
Section 9.2 Arbitration of Unresolved
Disputes .
(a) All Disputes
arising out of or in connection with this Agreement that are not
resolved in accordance with the provisions of Section 9.1 shall be
finally settled under the ICC Rules by binding arbitration
conducted in the English language and held in London, England
before a panel of three (3) arbitrators. Notwithstanding anything
to the contrary in the ICC Rules, the following procedures shall
apply for the appointment of the three (3) arbitrators. Each Party
shall appoint one (1) arbitrator, obtain its appointee’s
acceptance of such appointment and deliver written notification of
such appointment and acceptance to the other Party within thirty
(30) days from the date that the Dispute was submitted to
arbitration. If a Party fails to deliver written notification of
its appointment of an arbitrator and his/her acceptance within the
time period provided in this Section 9.2, then such arbitrator
shall be appointed by the ICC in accordance with the ICC Rules and
be deemed a Party-appointed arbitrator for all purposes hereof. The
first two arbitrators so selected shall select the third arbitrator
(who shall act as chairman of the arbitration proceedings), prior
to the thirtieth (30 th ) day following the appointment
of the second Party-appointed arbitrator. If the Party-appointed
arbitrators are unable to select a neutral arbitrator, they shall
jointly submit a list of four names (two each) to the ICC, which
shall select the third arbitrator from the list submitted to
it.
(b) No arbitrator
shall be a past or present employee or agent of, or consultant or
counsel to, a Party or any Affiliate of a Party, unless such
restriction has been waived in writing by the other Party to the
proceeding.
(c) The
substantive law governing the Dispute shall be the laws of the
State of New York.
(d) The
arbitrators shall have the sole power and authority to determine
the arbitrability of any Dispute arising under or relating to this
Agreement or the subject matter hereof. Subject to any other
relevant limitations set forth elsewhere herein, the arbitrators
will have the power to award any type of relief that is just and
appropriate in
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the arbitrators’ discretion, including
compensatory damages, injunctive orders, orders for specific
performances and declarations of rights.
(e) The
arbitrators shall not have power, however, to award punitive,
consequential, exemplary or treble damages or any other type of
relief in the nature of a penalty, and the Parties hereby expressly
waive any right they might otherwise have to such relief. THE
PARTIES HEREBY WAIVE ALL RIGHTS TO A TRIAL BY JURY WITH RESPECT TO
ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT.
Section 9.3 Finality; Enforcement . Any
decision or award of a majority of an arbitral panel, as
applicable, shall be final and binding upon the Parties. Each Party
agrees that the arbitral award may be enforced against it or its
assets wherever they may be found and that a judgment upon the
arbitral award may be entered in any court having jurisdiction
thereof. The Parties hereby waive any right to appeal or to review
of the decision or the award of an arbitral panel by any court or
tribunal and also waive any objections to the enforcement of such
decision or award.
Section 9.4 Costs . The costs of
arbitration shall be paid in accordance with the decision of the
arbitral panel pursuant to the ICC Rules.
Section 9.5 Continuing Performance
Obligations . The existence of any Dispute or the pendency of
the Dispute resolution procedures set forth herein will not relieve
or excuse a Party from its ongoing duties and obligations under
this Agreement, and the Parties shall nevertheless proceed with the
performance of this Agreement in accordance with the terms
hereof.
ARTICLE 10 – TERMINATION
Section 10.1 Termination Rights . This
Agreement may be terminated by either Party in the case of the
failure of the other Party to fulfill any of its material
obligations hereunder (a “Default”) on ninety (90)
days’ prior written notice to the Party in Default, such
notice to specify the performance failure of such Party.
Section 10.2 Cure Rights .
Notwithstanding anything contained herein to the contrary, a Party
that is in Default shall be entitled to cure such Default by
satisfying its performance obligation prior to the end of such
ninety (90) day period. Furthermore, if such Party is diligently
proceeding to cure such Default but such cure cannot be
accomplished within such ninety (90) day period, the Party in
Default shall be given up to an additional sixty (60) days to cure
the Default so long as such Party continues to diligently pursue
curing the Default. If the Default is cured by the Party that is in
Default prior to the end of the cure period, then the notice of
termination shall be null and void. If a Party fails to cure a
Default, then this Agreement shall terminate on the date set forth
in the notice of Default, but in no event prior to ninety (90) days
following the issuance of such notice of Default.
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Section 10.3 Right to Retain the License
. Notwithstanding anything contained herein to the contrary, if
Licensor is in Default for a failure to perform any material
obligation hereunder, American shall retain all the license rights
and other rights granted to American hereunder, without any
obligation to purchase any System through Licensor. In such case,
American shall place all Purchase Orders through AK.
Section 10.4 Termination by Licensor . If
Licensor terminates this Agreement based on a failure of American
to fulfill any of its material obligations hereunder, American
shall not be relieved of the limitations and restrictions imposed
by this Agreement upon the use or dissemination of the Technology
and/or the Systems which is not at such time in the public domain;
and that for installed Systems, American shall retain all the
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