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License And Royalty Agreement 7/2/15

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SIONIX CORP | Sionix Corporation | Sionix Oilfield Solutions, LLC

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Title: LICENSE AND ROYALTY AGREEMENT 7/2/15
Governing Law: Nevada     Date: 4/6/2016
Industry: Misc. Capital Goods     Sector: Capital Goods

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Exhibit 10.1

 

FINAL DRAFT

 

LICENSE AND ROYALTY AGREEMENT

7/2/15

 

This License and Royalty Agreement is made and entered into as of the Effective Date by and between:

 

Sionix Corporation ("SIONIX"), a public company organized under the laws of the State of Nevada, USA and having its principal executive office at 2010 N Loop Freeway, Houston, TX 77018, hereinafter referred to as "Licensor" which expression shall include its successors in business and permitted assignees; and

 

Sionix Oilfield Solutions, LLC ("SOS"), a limited liability company organized under the laws of the State of Texas, USA and having its principal executive offices at 2049 US Hwy 2, Culbertson, MT 59218 and hereinafter referred to as "Licensee" which expression shall include its successors in business and permitted assignees.

 

(Hereinafter Licensor and Licensee collectively shall be termed as "Parties", and individually as "Party").

 

PREAMBLE

 

WHEREAS, Licensor is the legal owner of the Licensor's Technology ("LT") listed in Attachment A, and

 

WHEREAS, Licensor has entered into the Letter of Intent signed July 6, 2015 ("LOT"), (attached as Attachment B) with Licensee, and Licensee (SOS) has been organized to conduct the business of treating and remediating both produced water from existing wells and flow back brines from fracking. The water will be treated to customer specifications for "enhanced heavy water" for drilling and/or treated water suitable for fracking and will be marketed to customers in the SOS service area, and

 

WHEREAS, Licensee wishes to obtain and Licensor wishes to grant to Licensee an exclusive license, to operate water treating facilities, utilizing the LT, and to treat, remediate and market brines in the Total Bakken Oil System (North Dakota, South Dakota, Montana, Alberta Canada and Saskatchewan Canada), and

 

WHEREAS, Licensee wishes to obtain and Licensor wishes to grant to Licensee a license to treat, remediate and market brines in the United States, Canada and Mexico, and

 

WHEREAS, the Licensee wishes to purchase the Dissolved Air Flotation ("DAF") assets of Licensor in Dickinson, North Dakota and Licensor wishes to sell the Licensor's physical assets in Dickinson, North Dakota,

 

NOW THEREFORE, the Licensor and Licensee intending to be legally bound, agree as follows:

 

 

1

 

 

 

SECTION 1
DEFINITIONS

 

Unless the context or otherwise require, the following terms shall have the following meanings throughout this agreement:

 

A.                      "Agreement" means this License and Royalty Agreement;

 

B.           "Confidential Information" means any and all information or data disclosed to the other party, its employees or representatives, whether in writing, orally or by observation, including without limitation, all scientific, technical, commercial, financial and business information and know-how, but excluding information or data which is known to the receiving party at the time of disclosure or is required to be disclosed by legal, regulatory, statutory or governmental process or authorities;

 

C.           "Letter of Intent" means that general Letter of Intent attached as Attachment B signed by Licensor and Licensee as of the Effective Date;

 

E.           "Effective Date" shall be as of July 10, 2015;

 

F.            Licensor's Technology means all patents and their supporting data and technology, processes and methodology, whether patents are in force or expired; as well as all applicable "Know-How" and "Site Specific Information". The Licensor's Technology is summarized in Attachment A;

 

G.           "Dissolved Air Flotation ("DAF") Technology means all design and operating data for Sionix's proprietary DAF system as defined in all patents granted to Sionix and incorporated into all DAF units manufactured by or specifically for Licensor;

 

H.           "Know-How" means Licensor's specific information, knowledge and experience in the development, design, manufacture and operation of water treating facilities, including any drawings, specifications or test data of which the Licensor possesses and makes available to the Licensee;

 

I.             Site Specific Information includes all drawings, designs, data, operating instructions, process configuration, maintenance procedures, employee records, purchasing records, community, governmental and regulatory contacts, etc., for the Culbertson, Montana site;

 

J.             "Patent" means following patents listed in Attachment A:

 

 

Patents

 

6,921,478

 

7,033,495

 

7,767,080

 

7,981,287

 

8,343,355

 

K.                      "Related Party" means any third party, which has common ownership with either the Licensor or the Licensee;

 

L.                       "Third Parties" means any party without common ownership or affiliation with either the Licensor or the Licensee.

 

 

2

 

 

 

SECTION 2

INTERPRETATIONS

 

In the interpretation or construction of this Agreement, unless something else is clearly intended:

 

A.                      Both parties have consulted attorneys of their choice in the drafting of this Agreement. Accordingly, this Agreement shall not be interpreted more harshly against one party than the other;

 

B.                       This Agreement and the Attachments contain the entire understanding of the parties with respect to the subject matter hereof. All express or implied agreements and understandings, either oral or written, heretofore made are expressly merged into and made a part of this Agreement and the Attachment. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by both parties hereto;

 

C.                       If any provision of this Agreement is deemed unenforceable, the remainder of the Agreement will not be affected and, if appropriate, the parties will attempt to replace the unenforceable provision with a new provision that, to the extent possible, reflects the parties' original intent. The captions and headings used in this Agreement are for reference only and are not to be construed in any way as terms or used to interpret the provisions of this Agreement.

 

SECTION 3

GRANT OF LICENSE

 

A.            The Licensor hereby grants to the Licensee, and the Licensee hereby accepts from the Licensor an exclusive license (hereinafter referred to as the "License") to operate water treating facilities, utilizing the LT, and to treat, remediate and market brines in the Total Bakken Oil System (North Dakota, South Dakota, Montana, Alberta Canada and Saskatchewan Canada);

 

B.            The Licensee shall have no right to assign the License or grant any sub-license without prior written approval of the Licensor which shall not be unreasonably withheld;

 

C.            The License shall commence on the Effective Date. The terms of this Agreement shall continue in effect as part of a permanent, paid up License Agreement. Licensor will receive a fifty-one percent equity interest at no cost in the total business of SOS.

 

SECTION 4

CONSIDERATION FOR THE LICENSE

 

A.           Licensor shall acquire a 51% (fifty-one percent) equity interest in SOS. This equity interest will survive the term of this Agreement and will continue, subject to the same terms and conditions as other equity interests in SOS.

 

B.            Licensee will purchase the DAF assets of Licensor for an amount of $100,000.

 

C.           There will be no ongoing licensing or royalty payments of any kind from SOS to SIONIX.

 

 

3

 

 

 

SECTION 5
INDEMNITY

 

A.           To the fullest extent permitted by law, the Licensor expressly agrees to Defend (at Licensor's expense and with legal counsel approved by Licensee), Indemnify, and Hold Harmless the Licensee, its parents, affiliates, directors, officers and employees from any claims, suits, causes of action or losses attacking the intellectual property or the right to use that property that is the basis of the License.

 

B.            To the fullest extent permitted by law, Licensee expressly agrees to Defend (at Licensee's expense and with legal counsel approved by Licensor), Indemnify, and Hold Harmless the Licensor, its parents, affiliates, directors, officers and employees from any claims, suits, cause of action or losses emanating from actions of Licensee which are not authorized hereunder.

 

SECTION 6
ROYALTIES

 

A.            The License is granted with no royalty obligations.

 

SECTION 7  

IMPROVEMENTS AND DEVELOPMENTS

 

A.           All subsequent technical innovations or improvements to the Licensed Technology that is developed by Licensor after the Effective Date of this Agreement shall automatically be incorporated into the Licensed Technology.

 

B.            All improvements and developments based upon the Licensed Technology and any patents based upon the Licensed Technology, which come into existence during the term hereof and which are derived from work done by or for Licensee, with or without any contribution by Licensor, shall be shared with Licensor. All such improvements and developments shall be licensed from Licensee to Licensor, on a worldwide, royalty-free, paid-up basis.

 

SECTION 8

REPRESENTATION/WARRANTIES

 

A.           Licensor represents and warrants that it is duly organized, validly existing and in good standing under the laws of the State of Nevada, that it has full power and authority to enter into this Agreement and to carry out their provisions, and that there are no outstanding agreements, assignments or encumbrances in existence that are inconsistent with the provisions of this Agreement.

 

B.            Licensee represents and warrants that it is duly organized, validly existing and in good standing under the laws of the State of Texas, that it has full power and authority to enter into this Agreement and to carry out its provisions, and that there are no outstanding agreements, assignments or encumbrances in existence that are inconsistent with the provisions of this Agreement.

 

 

4

 

 

 

C.                       LIMITATION OR WARRANTIES: Except for the express Warranties in this Section 8, neither party makes any Warranties express or implied, in fact or by operation of law, statutory or otherwise.

 

SECTION 9

INFRINGEMENT

 

A.                       Each party shall give the other written notice if one of them becomes aware of any infringement by a third party of any Patent. Upon notice of any such infringement, the parties shall promptly consult with one another to determine an agreed course of action to be pursued.

 

B.                       Licensee shall have the first right, but not the obligation, to institute and prosecute an action or proceeding to abate such infringement and to resolve such matter by settlement or otherwise.

 

C.   


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