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MARKETING AND LICENSE AGREEMENT

Marketing Agreement

MARKETING AND LICENSE AGREEMENT | Document Parties: DDS TECHNOLOGIES USA INC | XETHANOL CORPORATION You are currently viewing:
This Marketing Agreement involves

DDS TECHNOLOGIES USA INC | XETHANOL CORPORATION

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Title: MARKETING AND LICENSE AGREEMENT
Date: 11/1/2005

MARKETING AND LICENSE AGREEMENT, Parties: dds technologies usa inc , xethanol corporation
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Exhibit 10.1

 

M ARKETING AND L ICENSE A GREEMENT

 

T HIS IS A M ARKETING AND L ICENSE A GREEMENT (“Agreement”), entered into this 20 th day of October, 2005 (the “Effective Date”), by and among X ETHANOL C ORPORATION (“Xethanol”), a Delaware corporation with a place of business at 1185 Avenue of the Americas, 20th Floor, New York, NY 10036, and DDS T ECHNOLOGIES USA, I NC . (“DDS”), a Nevada corporation with a place of business at 150 East Palmetto Park Road, Suite 510, Boca Raton, FL 33432.

 

R ECITALS

 

 

A.

DDS is the owner of certain rights with respect to dry disaggregation technology products;

 

 

B.

Xethanol wishes to assist DDS in the marketing of such products and also to obtain a license with respect to such DDS technology for purposes of processing and extraction of materials from agricultural commodities, including but not limited to, corn and cellulosic biomass, in all cases within the United States of America;

 

 

C.

DDS wishes to obtain such assistance and also to grant such a license on the terms and conditions set forth below; and

 

 

D.

Xethanol and DDS have been engaged in a dispute regarding the existence and details of a certain joint venture agreement between them, and have entered into this Agreement as part of the overall and final settlement of such dispute.

 

N OW T HEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

 

A GREEMENT

 

1. D EFINITIONS . Capitalized terms used in this Agreement shall have the following meanings:

 

“AAA” shall have the meaning assigned to it in Subsection 12.3 (“Arbitration”).

 

“Authorized Purpose” shall mean the operation of Machines solely to produce Ethanol Feed Stock and Byproducts from agricultural commodities, including but not limited to, corn and cellulosic biomass, in the Authorized Territory.

 

“Authorized Territory” shall mean the United States of America and its possessions.

 

“Byproducts” shall mean any substance produced directly or indirectly by use of the Machines which is not Ethanol Feed Stock, and shall include without limitation cattle feed, fibrous materials and Xylitol.

 

“Claims” shall have the meaning assigned to it in S ECTION  10 (“I NDEMNITY ”).


“Confidential Information” shall have the meaning assigned to it in S ECTION  7 (“C ONFIDENTIAL I NFORMATION ”).

 

“Contract Year” shall have the meaning assigned to it in Subsection 5.1(C) (“Minimum Royalties”).

 

“Customer Agreement” shall have the meaning assigned to it in Subsection 2.4 (“Sales”).

 

“Customers” shall mean third parties to whom Machines shall be Sold for use by such Customers in their own businesses and not for further distribution, but shall not include the Excluded Customers.

 

“Disclosing Party” shall have the meaning assigned to it in S ECTION  7 (“C ONFIDENTIAL I NFORMATION ”).

 

“Effective Date” shall have the meaning assigned to it in the first paragraph of this Agreement.

 

“Ethanol” shall mean any ethyl or other alcohol produced directly or indirectly from Ethanol Feed Stock.

 

“Ethanol Feed Stock” shall mean any substance produced directly or indirectly by use of the Machines which is suitable for further processing into Ethanol.

 

“Excluded Customers” shall mean Archer Daniels Midland Company and Treasure Valley Renewable Resources, LLC.

 

“Fee” shall have the meaning assigned to it in Subsection 3.3 (“Fee Calculation”).

 

“Indemnified Party” shall have the meaning assigned to it in S ECTION  10 (“I NDEMNITY ”).

 

“Indemnifying Party” shall have the meaning assigned to it in S ECTION  10 (“I NDEMNITY ”).

 

“Leads” shall have the meaning assigned to it in Subsection 2.1 (“Leads”).

 

“Machines” shall mean DDS machines which are Sold to Customers to be used solely for the Authorized Purpose.

 

“Patents” shall mean patents, utility models and applications therefor, including any and all divisionals, continuations, re-examinations, renewals, provisionals, continuations-in-part, or re-issues owned by DDS (including without limitation U.S. Pat. No. 6,848,582), and which are in existence as of the Effective Date, or which come into existence at any time thereafter and embody any Trade Secrets.

 

“Plant” shall mean a factory, plant or other industrial facility which is substantially owned, operated or controlled, directly or indirectly, by Xethanol or its affiliates, and at which any Machines are located.

 

“Purchase Agreement” shall have the meaning assigned to it in Subsection 5.1 (“Purchase of Machines and Royalties”).


“Receiving Party” shall have the meaning assigned to it in S ECTION  7 (“C ONFIDENTIAL I NFORMATION ”).

 

“Required Volume” shall mean the sum number of all Machines: (a) Sold by DDS pursuant to S ECTION  2 (“S ALES ”); and also (b)  purchased and paid for by Xethanol pursuant to Subsection 2.3 (“Marketing and Demo Machine”) and Subsection 5.1 (“Purchase of Machines and Royalties”).

 

“Sale”, “Sales”, “Sell”, “Sells”, “Selling” or “Sold ” shall mean, with respect to the Machines any sale, lease, license, transfer, distribution or rental thereof by DDS to any Customer, but in all cases solely for use by such Customer for the Authorized Purpose.

 

“Term” shall have the meaning assigned to it in S ECTION  6 (“T ERM AND T ERMINATION ”).

 

“Trade Secrets” shall mean all ideas, concepts, know-how, formulas, techniques, procedures, and other non-public information of DDS regarding the use or operation of Machines existing on or before the Effective Date, including without limitation materials described as such in E XHIBIT A (“T RADE S ECRETS ”).

 

2. S ALES .

 

2.1 Leads. During the Term, Xethanol agrees to use its diligent efforts to locate and identify to DDS potential Customers who in Xethanol’s reasonable judgment would be likely to wish to purchase Machines from DDS (collectively, “Leads”). Xethanol shall provide all information reasonably requested by DDS to identify such Leads, including the correct “contact person” at each such Lead.

 

2.2 Exclusivity and Loss of Exclusivity. The parties agree that DDS shall not appoint any other party to perform Lead-seeking services similar to those provided by Xethanol hereunder during the Term; provided, however, that in the event that the Required Volume is less than that described in E XHIBIT D (“R EQUIRED V OLUME ”) then in such case DDS shall have the right to appoint any and all such third parties, without notice to or permission from Xethanol.

 

2.3 Marketing and Demo Machine. Xethanol shall cooperate reasonably with DDS to assist DDS in marketing Machines to Leads as DDS may request. The parties understand and agree that DDS shall have no obligation to market Machines to any particular Lead, but shall consider in good faith all Leads provided to DDS as described in Subsection 2.1 (“Leads”). Xethanol agrees that upon the Effective Date it shall purchase one (1) Machine according to the terms described in the Purchase Agreement. Xethanol shall use such Machine for its own internal business purposes at Xethanol’s Ethanol Feed Stock and Byproduct production location in Blairstown, IA, and shall also use such Machine to assist DDS in marketing Machines as hereinabove described as “demo” Machine. Such “demo” Machine, and any additional Machines purchased by Xethanol pursuant to Subsection 5.1 (“Purchase of Machines and Royalties”), shall be subject to the provisions of Subsection 5.5 (“Licenses”).

 

2.4 Sales. The parties understand and agree that Xethanol shall have no right to negotiate on behalf of DDS with any Lead, and that in particular the prices, terms, and specifications of each Machine shall be determined solely upon agreement between DDS and such Lead, and shall be included in a written agreement between DDS and such Lead (each, a “Customer Agreement”).


2.5 Prices. The parties understand and agree that the prices for purchases of Machines by Xethanol shall be equivalent to DDS’s lowest commercially reasonable prices for such Machines, as determined by DDS, but subject to adjustment from time to time by DDS. DDS shall set the prices for all Sales of Machines pursuant to each Customer Agreement, but it is DDS’s intention to set such prices at a profit-maximizing level.

 

3. S TOCK AND F EES .

 

3.1 Stock. Within five (5) days from the Effective Date, DDS shall provide to Xethanol two hundred thousand (200,000) shares of the restricted stock of DDS, with “piggyback” rights where permitted, according to the stock purchase agreement described in E XHIBIT E (“S TOCK P URCHASE A GREEMENT ”).

 

3.2 Cash Payment. Within five (5) days from the Effective Date, DDS shall pay to Xethanol fifty thousand dollars ($50,000).

 

3.3 Fee Calculation. For all Sales of Machines during the Term (and regardless of whether such Sales were made pursuant to any Leads provided by Xethanol pursuant to Subsection 2.1 (“Leads”) ), DDS shall pay to Xethanol a fee (“Fee”) calculated at *** of all amounts actually paid to DDS by Customers for each such Sale; provided, however, that any Sales of Machines to any Restricted Customer shall not be subject to the foregoing, and there shall be no amount owed or paid to Xethanol in connection therewith. Provided, further, that in no event shall any royalties or other payments from Customers be subject to the foregoing Fee payment obligation. The parties further agree that any sales of other devices or machines (including without limitation any devices or machines which are similar to Machines, but which are not used for the Authorized Purpose, and may instead be used for other purposes in other industries or markets) shall likewise not be subject to the foregoing, and there shall be no amount owed or paid to Xethanol in connection therewith.

 

3.4 Payment. DDS shall pay Fees to Xethanol within thirty (30) days of receipt by DDS of the corresponding amounts by DDS for each Sale. Each payment of Fees shall be accompanied by written documentation reasonably sufficient to explain the amount and calculation of such Fees.

 

3.5 Currency. All amounts owed or paid under this Agreement by DDS shall be calculated and paid in United States currency; provided, however, that as to Fees based on Sales made in other than United States current, such Fees shall be paid by DDS in such foreign currency as corresponds to such Sale.

 

4. R ETURN OF M ACHINE AND R ELEASE .

 

4.1 Return. Promptly following the Effective Date, Xethanol shall make available for pick up by DDS that particular Machine currently located at Xethanol’s facility in Hopkinton, IA, and shall take all steps to ensure that such Machine is delivered “as is” to DDS, free of all liens, security interests or other encumbrances.


4.2 Release. Upon the Effective Date, the parties hereto shall execute a mutual general release in substantially the form described in E XHIBIT C (“G ENERAL R ELEASE ”).

 

5. P URCHASE OF M ACHINES , R OYALTIES AND L ICENSES .

 

5.1 Purchase of Machines and Royalties.

 

A. Purchase of Machines. From time to time during the Term, Xethanol may issue purchase orders to purchase Machines from DDS. Xethanol may, as a matter of administrative convenience use its standard form of purchase order for such purposes, provided that any terms contained thereon shall have no effect whatsoever. Such Machines shall be used solely by Xethanol and solely for the Authorized Purpose (and in no event shall be purchased for resale), and shall be subject to the purchase agreement (“Purchase Agreement”) described in E XHIBIT B (“P URCHASE A GREEMENT ”). Xethanol agrees that it shall not use, or permit or encourage the use of, such Machines purchased by Xethanol for any purpose other than the Authorized Purpose.

 

B. Royalties. In addition to payment for the purchase of Machines, Xethanol shall also pay to DDS certain royalties (“Royalties”) as follows:

 

(i) Ethanol. The Royalty payable with respect to amounts directly or indirectly paid or owed to Xethanol by third parties for Ethanol which is produced using such Machines shall be *** until such time, if ever, as the provisions of Subsection 2.2 (“Exclusivity and Loss of Exclusivity”) shall apply and DDS shall appoint any third party to perform Lead-seeking services, in which case such Royalty payable thereafter shall be ***; and

 

(ii) Byproducts. The Royalty payable with respect to amounts directly or indirectly paid or owed to Xethanol by third parties for Byproducts shall be ***.

 

D. Payment. Xethanol shall pay Royalties to DDS within thirty (30) days of receipt by Xethanol of the corresponding amounts by Xethanol. Each payment of Royalties shall be accompanied by written documentation reasonably sufficient to explain the amount and calculation of such Royalties.

 

5.2 Milestone Payments. In addition to payment for the purchase of Machines and payment of Royalties, Xethanol shall also pay to DDS certain milestone payments as follows: *** for each *** of annual nameplate capacity for each Plant. Xethanol shall pay such milestone payments within thirty (30) days


 
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