LICENSE OF TECHNOLOGY AND TRADE SECRETS
Parties
THIS LICENSE AGREEMENT is made by and between XXXXXXX ADVANCES
TECHNOLOGIES, INC., a Nevada corporation, its successors and/or assigns (the
"Licensor") and AMERICAN QUANTUM CYCLES, INC., a corporation organized and
existing under the laws of Florida, with its principal place of business at 000
Xxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxx 00000 (the "Licensee").
Recitals
The Licensor is the owner of the entire right in and to patents,
trademarks, and certain trade secret information concerning proprietary secret
processes, techniques, tooling, customers, designs and proprietary know-how for
the design and manufacture of 4-valve cylinder heads for Harley Davidson
Evolution Big Two motorcycle engines. Licensee desires to obtain a scope of use
license, and the Licensor is willing to grant, subject to the terms and
conditions set forth in this Agreement, a license from the Licensor for the
scope of use and in the territory herein designated, to use the Technology
solely in the manufacture and sale of after market 4-valve cylinder head kits
for engines of the Harley Davidson Evolution ("Big Twin") engine applications
and modifications thereof.
Terms of Agreement
Article I: Certain Definitions
Section 1.1 Use Throughout. Terms defined in this Article I and
parenthetically elsewhere shall have the same meaning throughout this Agreement.
Defined terms may be used in the singular and the plural.
Section 1.2 "Technology" means:
1.2.1 The Licensor's secret processes, techniques, tooling
designs, product designs and proprietary know-how and custom made proprietary
machinery and tooling, plans, technology protected by U.S. Patents.
U.S. Patent Number 4,206,600 Anti Reversionary Exhaust
U.S. Patent Number 4,838,219 for an Intake Port
U.S. Patent Number 4,976,231 for an Intake Port
U.S. Patent Number 5,042,435 for a Plenum Chamber;
AND, certain trade secret information concerning proprietary secret
processes, techniques, tooling, equipment, designs, customer lists, and
proprietary know-how for the design and manufacture of the following products:
1. Rocker Arm Design
2. O Ringed Stuc Manifold
3. Combustion Chamber Design
4. Other "Know How" relevant to the production and manufacture
of products under this license for 4-valve cylinder heads
for aftermarket sale and installation upon Harley Davidson
Evolution engines and U.S. manufactured variants thereof;
AND,
Strictly subject to the requirements of Article 10 hereof, the use of
the following Trademarks of Licensor solely upon the products to be manufactured
pursuant to this agreement:
1. "AR"
2. "4-VALVE"
3. "CVX"
4. "RAM CHAMBER"
5. "RACE FEET"
Section 1.3 "Developments" means any and all improvements and
developments, whether or not patents, irrespective of the maker thereof,
relating to or derived from the Technology or its use, including without
limitation any process, method, technique or know-how.
Section 1.4 "Patents" means any patents which may issue in the
Territory on the Technology described in Sections 1.2.1 and all renewals of such
patents and related developments thereof.
Section 1.5 "Territory" means the Unites States of America and all
countries where the patents are recognized and enforceable.
Article II: Grant of License; Disclosure of Developments
Section 2.1 Grant. Subject to this Agreement's terms and conditions,
the Licensor hereby grants to the extent that it lawfully may, to the Licensee,
the right to use the Technology and the Developments defined under Sections 1.2,
1.3 and 1.4, solely for Aftermarket Sale as defined in Section 1.6, and in the
Territory as defined in Section 1.5, for the License Term set forth in Section
9.1.
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Section 2.2 Section 2.1.1 Marking. Licensee agrees all products sold
pursuant to this license shall be clearly marked with the subject matter patent
number(s) and/or designation of registered trademark(s).
Section 2.3 Sublicenses.
2.3.1 The license granted to the Licensee under Section 2.1
does not include the right to sublicense the Technology and the Developments to
others in the Territory subject to the provisions of this Section 2.3 without
the express written permission of Licensor for such sublicense which may be
granted or denied at the sole discretion of Licensor.
Section 2.4 Reservation of Rights. Subject to the Licensee's right to
use the same pursuant to the terms of this Agreement, the Licensor reserves all
proprietary rights in and to all discoveries, inventions, patent rights, trade
secrets, know-how or other proprietary data embodied in the Technology or the
Developments. The Licensee agrees to receive and use the Technology and the
Developments transferred to Licensee under this Agreement for the term of the
license granted under Section 2.1 and subject to such reservation, and agrees to
cease all use of Technology or Developments upon termination of such license.
Licensee acknowledges that the Technology licensed herein is of a sensitive
nature and is the trade secret and proprietary intellectual property of Licensor
and hereby accepts Licensor's confidential disclosure to License of the
Technology pursuant to the terms of this contract.
Section 2.5 CARB or Federal Requirements. Licensee acknowledges that
The California Air Resources Board and/or other state or federal agencies may
require the Licensee and or resellers of Licensee's products, to apply for and
receive exemption status (50 state legal) allowing the products produced under
license herein to be sold for aftermarket installation. Such requirements may
change due to changes in the law from time to time. Licensor acknowledges that
any and all such responsibility for any such approval is Licensee's and at the
sole expense of Licensee.
Article III: Commencement of Disclosure
Section 3.1 Deliveries. Subject to the terms and conditions of this
Agreement, the Licensor shall, within 30 days after the signing of this
Agreement, commence any additional disclosure of the Technology and Developments
to the Licensee, by delivering to the Licensee copies of the Technology
Documents and the drawings and other technical documentation in the Licensor's
possession and all materials finished and unfinished, supplies, tooling,
fixtures, customer lists and suppliers list relating to sale and manufacture of
the products licensed herein. Licensor shall also provide written documents to
Licensee and appropriate third parties verifying that the materials, supplies,
tooling, and fixtures, not currently in physical possession of Licensor have
been transferred pursuant to the terms of this Agreement.
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Article IV: Independent Parties
Section 4.1 Status of Parties. Nothing in this Agreement shall be
construed to constitute the Licensee as the partner, employee or agent of the
Licensor, nor shall either party have any authority to bind the other in any
respect, it being intended that each shall remain an independent contractor
responsible only for its own actions.
Article V: Royalty
Section 5.1 Cash Payment and Royalty Payments. In consideration of the
Licensor disclosure of the Technology, and, in consideration for the scope of
use license granted by the Licensor for continued use of the Technology, and,
the performance of the Licensor's other obligations under this Agreement, the
Licensee shall pay to the Licensor the license and other fees described in
Section 5.1.2.
5.1.1 The Licensee shall pay to the Licensor the total
aggregate amount of $250,000 which includes Royalty fees of $235,000 and $15,000
for purchase of equipment and inventory on the following schedule:
Payment 1 July 15, 1997 $ 50,000
Payment 2 August 30, 1997 $ 25,000
Payment 3 September 30, 1997 $ 25,000
Payment 4 October 30, 1997 $ 25,000
Payment 5 November 30, 1997 $ 125,000
Section 5.2 Payment. All payments tendered to the Licensor by the
Licensee under this Agreement shall be made in United States dollars. Payments
shall be made at the Licensor's address for receipt of notices under Section
10.2, or at such other address or deposited in such bank account as the Licensor
may from time to time designate by notice to the Licensee.
Section 5.3 Additional Consideration. Licensee agrees to sell Licensor,
products produced pursuant to this license, at the lowest price which Licensee
sells such products to its best distributors.
Article VI: Confidentiality
Section 6.1 Nondisclosure of Confidential Information. The Licensee
shall at all times during and after the term of this Agreement hold in the
strictest confidence, and shall not directly or indirectly disclose to others,
or use for any purpose other than as contemplated in this Agreement, any of the
Technology or the Developments disclosed to the Licensee by the Licensor or as
to the Developments of the Licensee. Notwithstanding the foregoing, the Licensee
shall have the right to make disclosures of the Technology and such Developments
on a strict "need-to-know" basis to the
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Licensee's employees, and the Licensee's prospective suppliers and contractors
to whom such disclosure is necessary for the performance of this Agreement;
provided that the Licensee shall first obtain from each employee, supplier or
contractor and their respective employees confidentiality agreements with
respect to the Technology and such Developments in the form substantially
similar to the requirements of this Agreement, and the Licensee shall promptly
deliver copies of all such confidentiality agreements to the Licensor.
Section 6.2 Exceptions. The Licensee shall not be held to a duty of
confidentiality for any of the Technology or any of the Developments which:
6.2.1 After its disclosure to the Licensee is received by the
Licensee in an integrated form from an independent third party whose disclosure
of such Technology or Developments shall not constitute a direct or indirect
breach by that third party of any duty of confidentiality owed to the Licensee.
Section 6.3 Documents. The Licensor may designate as confidential, by
legending prominently as such, any drawings, charts, blueprints, specifications,
magnetic cards, films or other documentary or physical manifestation or
disclosure of any of the Technology or the Developments (collectively, the
"Documents"). The Licensee shall legend prominently any Documents it may prepare
which embody any Technology or Developments, to identify them as confidential
trade secret proprietary information.
Section 6.4 The Licensor Confidentiality Obligations. The Licensor
shall comply with the provisions of confidentiality in Section 6 of this
Agreement in connection with any disclosures of confidential information made to
the Licensor by the Licensee under this Agreement.
Section 6.5 Unique Character of Confidential Information. The Licensee
acknowledges that the Technology and the Developments to be disclosed by the
Licensor are of a special and unique character which gives them a peculiar value
and that consequently any wrongful use or disclosure of the Technology or
Developments will cause injury not readily measurable in monetary damages, and
therefore irreparable. Accordingly, whether in court action or arbitration, the
Licensor shall be entitled to the remedies of injunction, specific performance
and other equitable relief to redress any such breach, and no proof of special
damages shall be necessary for the enforcement of or for any action upon such
obligations. Without limiting the generality of the foregoing, the Licensor
shall have the right upon notice to the Licensee hereunder, and to require the
surrender or return to the Licensor of all Technology and Developments disclosed
by the Licensor, and the Documents.
Section 6.6 NonCompetition by Licensor. Licensor herein agrees that it
will not compete with Licensee in the manufacture and sale of 4-valve cylinder
head kits, in the Aftermarket and Territory as defined herein, and for the term,
granted herein to Licensee.
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Section 6.7 Survival. The obligations of the Licensee and the Licensor
under this Article VI shall, except as otherwise expressly provided, survive
termination of this Agreement.
Article VII: The Licensee's Conduct of Business
Section 7.3 Compliance with Laws. The Licensee represents and warrants
to the Licensor that in the Licensee's performance of its obligations under this
Agreement, the Licensee shall indemnify the Licensor against any loss which the
Licensor may incur as a result of any claim or demand which may be made against
the Licensor based upon the Licensee's failure to so comply.
Section 7.4 Insurance. The Licensee shall promptly (and prior to any
sale of products using the Technology and/or taking possession of the machine)
cause its product liability, advertising claims and general liability insurance
to be modified to name the Licensor as an additional insured and shall maintain
the insurance in an amount not less than one xxxxxx dollars (U.S. $ 1,000,000),
in the aggregate, during the term of the license granted under Section 2.1 The
Licensee shall promptly provide the Licensor with a certificate of insurance
from Licensee's insurance company evidencing such coverage and the naming of
Licensor as also insured.
Article III
Section 8.1 Notice of Infringement.
8.1.1. The Licensee shall promptly notify the Licensor of any
instance which comes to the Licensee's attention involving a possible
misappropriation of any trade secret, or infringement of any Patent or other
proprietary right of the Licensor, relating to the Licensed Technology or the
Developments.
8.1.2. Licensee and Licensor shall be able to bring suit
against third parties for infringement or misappropriation of the rights granted
Licensee herein. Licensee and Licensor shall cooperate and promptly lend
reasonable assistance to each other in the prosecution of any such suit.
8.1.3. Nothing contained in this Agreements shall be construed
as an obligation of the Licensor or the Licensee, except as stated in 8.1.2. to
bring or to prosecute any suit or other proceeding against any third party for
misappropriation of trade secrets, or infringement of any patent or other
intellectual property rights.
8.2 Notice of Claims.
8.2.1. The Licensee shall give prompt notice to the Licensor of
any claim, action or proceeding pending or threatened against the Licensee,
alleging
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misappropriation of trade secrets or infringement of any patent or other
proprietary rights asserted by a third party, based on the use by the Licensee
or its sublicensees' use of the Technology or any Developments. If the
Licensee's or any of its sublicensees' use of the Technology and Developments is
in accordance with the provisions of this Agreement, and if the Licensor shall
so request, the Licensee shall make, and shall cause its sublicensees to make,
any practical modification of it's or their practice under the license or
sublicense granted, amendment of this Agreement or other means (without the
obligation of the Licensor or the Licensee to incur any material expense in
respect thereof) in order to avoid suit or reduce the potential adverse effect
of any such claim or action.
8.2.2. Licensor knows of no prior patents or prior art which
would render the rights granted herein an infringement upon same. Nothing
contained in this Agreement shall be construed as a warranty by the Licensor
that the Technology or the Developments do not infringe the patent or other
intellectual property rights of third parties, and the Licensor disclaims any
such warranty.
8.3 Licensee is responsible for all costs related to or
occurring from any returns of products produced by Licensee using the technology
licensed herein whether returned for defective workmanship or part failures or
defects covered by warrant or otherwise.
Article IX: Term; Termination
Section 9.1 License Term. The initial term of the License granted under
Section 2.1 (the "License Term") shall commence on the date of this Agreement,
and subsequent to the payment by Licensee of Payment 5, on or before November
30, 1997, this license shall continue in perpetuity and shall be considered a
paid-up license pursuant to and subject to the terms and conditions hereof for
that term.
Section 9.3 Termination. The License granted to the Licensee under
Section 2.1 may be terminated upon notice as follows:.
9.3.1 by the Licensor if Licensee has materially breached or
failed to punctually perform any of its duties or obligations under the
Agreement and to timely make each and every payment designated in Section 5.1.2
on the designated dates.
9.3.2 by the Licensor, if, prior to payment under 6 as
scheduled in 5.1.2 above, the Licensee is insolvent or becomes the subject of an
involuntary petition in bankruptcy for its reorganization or liquidation, or
makes any assignment for the benefit of its creditors, or if a trustee or
receiver of its property is appointed, or if the Licensee takes or is subjected
to any other similar action based upon its inability to meet its financial
obligations; or
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9.3.3 by the Licensor, if the Licensee assigns this
Agreement or any of its rights under this Agreement without obtaining the
Licensor's prior written consent.
Section 9.4 Effects of Expiration or Termination. Subsequent to the
term of the License granted to the Licensee under Section 2.1 or if the License
is terminated, all rights of the Licensee under the License shall cease and the
Licensee shall cease to use any part of the Technology or the Developments and
shall immediately return and surrender to the Licensor all of the Technology,
any tooling specific to the production or products produced using the
Technology, the developments disclosed by the Licensor, the tooling tendered
Licensee at the conception of this agreement, any and all Documents and all
other tangible disclosure of the Technology or Developments.
Section 9.5 Obligations Surrounding Termination. Notwithstanding any
termination of the License granted to Licensee under Section 2.1, and any
exercise by either party of any rights or remedies hereunder, the following
rights and obligations shall survive any such termination or exercise of rights
to the degree necessary to permit their complete fulfillment or discharge.
9.5.1 Article VI and any subsequent undertaking or agreement
that may be in effect at the time of termination with respect to the maintenance
of the confidentiality or secrecy of the Technology and or the Developments and
covenant not to compete.
ARTICLE X: Trademarks
The License acknowledges the validity of all trademark registrations
and applications in the USA and/or foreign countries owned by the Licensor and
herein licensed for use to Licensee for the term of, and pursuant to the terms
of this Agreement. The Licensee further acknowledges that the Licensor is the
sole owner of the entire right, title, and interest in and to the trademarks
covered by these registrations and/or applications hereinafter called "Xxxx or
Marks, "and any and all goodwill in said Marks now or in the future. The
Licensee shall not do any thing or commit any act which might prejudice or
adversely affect the validity of the marks and any such act shall be considered
a material breach of this agreement. Licensee shall cease to use the marks, or
any similar marks, in any manner on the expiration or other termination of this
Agreement. The Licensee further agrees that it will do nothing inconsistent with
such Licenseeship and that all use of the marks by Licensee shall inure solely
to the benefit of, and be on behalf of Licensor. Licensee agrees to be bound by
the requirements of this Section 10 for the duration of the term of the license
granted herein.
10.1(a) Quality Standards
Licensee agrees that the nature and quality of all services rendered by
Licensee in connection with the Xxxx; all goods sold by Licensee under the Xxxx;
and all related
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advertising, promotional and other related uses of the Xxxx by Licensee shall
conform to standards set by, and be under the control of, Licensor.
10.1(b) Quality Maintenance
Licensee agrees to cooperate with Licensor in facilitation Licensor's
control of such nature and quality, to permit reasonable inspection of
Licensee's operation, and to supply Licensor with specimens of all uses of the
Xxxx upon request.
10.1(c) Form of Use
Licensee agrees to use the Xxxx only in the form and manner and with
appropriate legends as prescribed from time to time by Licensor, and not to use
any other trademark or service xxxx in combination with the Xxxx without first
obtaining the prior written approval o f Licensor.
Article XI: General
Section 11.1 Notices. All notices required or permitted under this
Agreement shall be in writing and shall be effective upon personal delivery to
or being sent by registered or certified mail, return receipt requested, postage
fully prepaid and addressed to the respective parties at their addresses set
forth below or to any other address designated by the parties at a later date.
Licensor: Xxxxxxx Advanced Technologies, Inc.
c/o Xxxxxxx, Xxxxxx & Xxxxx
Registered Patent Attorneys
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Licensee: American Quantum Cycles, Inc.
American Quantum Cycles, Inc.
000 Xxxxxxxx Xx.
Xxxxxxxxx, Xxxxxxx, 00000
Section 11.2 Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the Licensor and the Licensee and of their
respective successors and permitted assigns.
Section 11.3 Waiver.
[a] Requirement of Writing - No waiver of, acquiescence to, or consent
to any breach of or default of any term or condition contained in this Agreement
by Licensor
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shall be of any force or effect unless same is in writing, specifically
identified, and signed by Licensor.
[b] No implied Waiver - No waiver of, acquiescence to, or consent to
any breach of or default of any term or condition contained in this Agreement by
Licensor pursuant to subparagraph [a], above, shall be deemed, express or
implied, generally or specifically, to be a waiver, consent, or acquiescence to
any other breach or default.
[c] No delay or omission in the exercise of any right or remedy by
Licensor shall impair such right or remedy or be construed as a waiver. A
consent by Licensor to or approval of any act shall not be deemed to waive or
render unnecessary consent to or approval of any other or subsequent act.
Section 11.4 Severability. If for any reason in any jurisdiction in
which any provision of this Agreement is sought to be enforced, any one or more
of the provisions of this Agreement shall be held to be invalid, illegal or
unenforceable in any respect, such holding shall not affect any other provision
of this Agreement and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
Section 11.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of California with all
applicable to contracts made and to be performed wholly in that State. The
federal law and public policy of the United States of America shall not govern
this Agreement or a fact of its interpretation, save as to the operation of
Licenses under U.S. Patents. Venue for the interpretation and or enforcement of
any provision of this agreement is mutually agreed by the parties hereto to be
the proper court of jurisdiction located in San Diego County, California.
Section 11.6 Legal Fees and Costs. The prevailing party to any action
to interpret and/or enforce any provision of this Agreement shall be entitled to
recover from the unsuccessful party(ies) to this Agreement, all costs, expenses
and actual attorneys' fees relating to the enforcement of, interpretation of, or
any litigation, arbitration, mediation or private settlement, relating to this
Agreement, in addition to any other relief that may be afforded.
Section 11.7 Counterparts. This Agreement may be executged in several
counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same instrument. The headings contained in
this Agreement have been inserted for convenience of reference only and shall
not modify, define, expand or limit any of the provisions of this Agreement.
Section 11.8 Drafting Ambiguities. Each party to this Agreement and its
counsel have reviewed and revised this Agreement or has had the opportunity to
do so. The rule
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of construction that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of this Agreement or of any
amendments or exhibits to this Agreement.
Section 11.9 Entire Agreement. This Agreement, which includes its
Addendums, and Exhibits, constitutes the entire agreement of the parties
relating to its subject matter, supersedes all prior oral or written
understandings or agreements regarding that subject matter and may not be
amended, modified or cancelled except by a written instrument executed by both
the Licensor and the Licensee.
IN WITNESS WHEREOF, Licensor and Licensee have executed this Agreement
in duplicate on the date shown below and affixed the corporate seal of the
parties hereto. The signatories of the respective parties hereto, by affixing
their signatures to this agreement, each individually warrant their ability to
bind the party on whose behalf they are executing this Agreement.
LICENSOR:
XXXXXXX ADVANCED TECHNOLOGIES, INC.
Date: ______________________ By:_______________________________
Xxxxx X. Xxxxxxx, President
LICENSEE:
AMERICAN QUANTUM CYCLES, INC.
Date: ______________________ By:_______________________________
Xxxxxx X. Guess, President
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