Deed of agreement concerning the patents, licensing and research and
development in relation to the OX2 engine
THIS DEED is made the 12th day of May 1999
BETWEEN: ADVANCED ENGINE TECHNOLOGY PTY LTD AN 063 092 759, Company organised
and existing under the laws of Australia having its registered office at Xxxxxxx
0, 0 Xxxx Xxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx Industrial Estate, Xxxxxxxx Xxxxx,
Xxxxxxxxxx 0000, Xxxxxxxxx ("AETP") of the first part
AND: OX2 INTELLECTUAL PROPERTY INC, a company incorporated in Vanuatu under the
International Companies Xxx 0000 and having its registered office at 2ndFloor,
Xxxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxx Xxxx, Xxxxxxxx of Vanuatu ("OX21P") of the
second part
AND: OX2 ENGINE (DISTRIBUTION) LIMITED, a company incorporated in Vanuatu under
the International Companies Xxx 0000 and having its registered office at 0xx
Xxxxx,, Xxxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxx Xxxx, Xxxxxxxx of Vanuatu ("OX2ED")
of the third part
AND: ADVANCED ENGINE TECHNOLOGIES, INC, a company incorporated in the United
States of America in the State of Colorado and having its registered office at
0000 Xxxxx Xxxx, XX, Xxxxxxxxxxx, Xxx Xxxxxx, Xxxxxx Xxxxx of America ("AETI")
of the fourth part
RECITALS:
A. By an Agreement for the Assignment of Intellectual Property dated the
11th day of January 1994, made between Xxxxxx Xxxxxxx Xxxxxxx, the
inventor of the Engine, as assignor and AETP, as assignee, AETP
acquired all right, title and interest in and to the Intellectual
Property ("the Original Assignment Agreement").
B. By an Agreement For Sale By Way of Assignment dated the 6th day of
November 1996, made between AETP as seller and OX2IP as purchaser,
OX2IP acquired all right, title and interest in and to the. Patents and
the Product.
C. By a Patent License Agreement dated the 18th day of October 1996, made
between OX2IP as licensor and OX2ED as licensee, OX2ED acquired an
exclusive worldwide license to manufacture, distribute and market the
Product ("the Head-License Agreement").
D. By a Patent Sub-License Agreement dated 18th October 1996 made between
OX2IP as grantor and AETI as licensee ("the Sub-License Agreement"),
AETI acquired an exclusive sub-license to manufacture, distribute and
market the Engine in the territory of Canada, Mexico and the United
States of America ("the NAFTA region")
E. By an Investment Agreement dated the 25th day of August 1997 and made
between AETP and OX2IP, AETP assumed the obligations, for the benefit
of AETI, of carrying out the research and development of the Engine and
producing and supplying prototype engines and spare and replacement
engine parts ("Engines and Parts") to AETI, for the purpose of enabling
AETI to better exploit the Engine.
F. Since entering into the Sub-License Agreement, AETI has diligently and
aggressively pursued the commercialisation and exploitation of the
Engine in the NAFTA region and has established strong business
relationships with a number of major multi-national corporations,
(including in particular United States based corporations in the
automotive, military and outboard boating industries) and American
Universities, that are interested in pursuing some form of business
relationship with AETI, such as a partnership, joint venture or other
cooperative relationship, in relation to the research and development,
manufacture, distribution or marketing of the Engine, including the
provision of debt or equity funding for any of the foregoing
("Potential Business Partners").
G. In order for AETI to be able to enter into agreements with the
Potential Business Partners AETI must be able to assure them that for
the duration of any agreement that they may enter into with AETI:
(a). the Patents will be valid and will remain in force;
(b). the Potential Business Partners will have the benefit of
advancements and improvements to the Engine;
(c). AETI will have such rights in relation to the Engine as are
necessary in order for the Potential Business Partners to be
entitled to research and develop, manufacture, distribute,
market, or otherwise exploit the Engine;
(d). the Potential Business Partners, which carry on business and
supply their products to countries throughout the world, will
have the opportunity to manufacture, distribute, market and
otherwise exploit the Engine, not just in the NAFTA region,
but in any country in which they carry on business or supply a
significant amount of the relevant product and not be at risk
of having a competitor control the rights to exploit the
Engine to their exclusion or in competition with them in any
such country;
(e). the research and development of the Engine will continue to
take place, with all due diligence, on an ongoing basis, into
the future.
AETI is unable to provide these rights and assurances because it does not own or
control the Patents or the Intellectual Property, and does not own or control
the licensing of the Engine except in relation to its sub-license for the NAFTA
region and does not control and is not responsible for the research and
development of the Engine. In addition the Potential Business Partners are
reluctant to enter into agreements with AETI because of the complicated and
fragmented nature of the ownership of the Patents and licensing of the Engine.
H. AETI will be able to provide the Potential Business Partners with the
necessary rights and assurances in relation to the Patents,
Intellectual Property and the Engine, that they require in order to
enter into agreements with AETI, if AETI becomes the owner of the
Patents and Intellectual Property and is responsible for the research
and development of the Engine.
I. AETP, OX21P and OX2ED each accept the accuracy of the facts and
circumstances set out in the foregoing Recitals and have agreed that,
in order to better assure the successful commercialisation and
exploitation of the Engine:
(a). AETP shall assign to AETI, all AETP's right, title and
interest in the Intellectual Property (if any) that AETP may
have at the date hereof,
(b). OX2EP shall assign to AETI, all OX21P's right, title and
interest in the Patents and the Product;
(c). the Head-License Agreement and the Sub-License Agreement shall
be terminated;
(d). AIETI shall take over the responsibility for the research and
development of the Engine.
J. AETP, OX2fP and OX2ED have each considered the terms and actual and
potential consequences of this Deed and have determined that it is in
their best commercial interests to enter into this Deed.
NOW THE PARTIES AGREE as follows
Article I Interpretation
1.1 In this Deed the following definitions shall apply -
"Application" means International Patent Application No.
PCT/AU/95/00815 filed under the PCT and given an international filing
date of 4th December 1995.
"Confidential Information" means the Technical Information together
with any other confidential information relating to the Engine.
"Copyright" means those rights of copyright under the Commonwealth
Copyright Act in respect of the Material and other rights of copyright
throughout the World.
"Deed" means the this agreement concerning the Patents, Licensing and
research and development in relation to the OX2 combustion engine,
which is entered into as a deed between the parties.
"Design Rights" means those rights comprised in a definition of a
registered design in the Design Act (1906) of the Commonwealth of
Australia granted in relation to the Technology together with all
rights of registered design now confirmed by the laws enforced in the
other parts of the World.
"Engine" means the OX2 combustion engine and any improvements,
amendments and advancements relating to the OX2 combustion engine, and
any other engine technology existing at the date hereof, developed or
owned by AETP, OX2IP or OX2ED at the date hereof.
"Future Rights" means, jointly and severally, all those rights
(statutory and otherwise) comprised in Technical information and the
definition of Design Rights, Patent Rights, Trade Xxxx Rights or
Copyright and which have been granted or acquired in any way whatsoever
in relation to the Technology by AETP, OX2IP or OX2ED.
"Intellectual Property" means, jointly and severally, the Future
Rights, the Patent Rights, the Copyright, the Design Rights and the
Trade Xxxx Rights and the Technical Information.
"Licenses" means the licenses, whether head-licenses, licenses granted
pursuant to a head-license, sub-licenses or otherwise, which have been
granted in relation to the Engine.
"Material" means, jointly and severally, those client lists, formulae,
notes, correspondence, drawings and other written material or software
associated with the conduct of the Technology.
"Parties" mean the parties to this Deed, being AETP, OX2IP, OX2ED and
AETI.
"Patents" means all present and future patents and applications filed
in any country in the world insofar as they relate to the Product and
all divisions, continuation,, continuation in part, supplemental
disclosure and reissues thereof and thereto,
"Patent Rights" means, jointly and severally, those patent rights
pursuant to the Commonwealth Patents Xxx 0000 in relation to the
Technology and the right to register patents in relation to the
Technology throughout other countries of the World.
"PCT" means the Patent Cooperation Treaty signed at Washington on 19th
June 1970.
"Product" means the OX2 combustion engine as defined in International
Patent Application No. PCT/AU95/00815.
"Technical Information" means in relation to the Original Assignment
Agreement, all that information, advice and know-how of a proprietary
nature owned by Xxxxxx Xxxxxxx in relation to the Technology, and
means, in relation to the technical information to be assigned to AETI
hereunder, all that information, advice and know-how of a proprietary
nature relating to the Technology that is owned by, or is under the
control of, Xxxxxx Xxxxxxx, AETI, OX2IP or OX2ED.
"Technology" means, jointly and severally, those rights associated with
the OX2 internal combustion engine the subject of the Application.
"Territory" means
EUROPEAN UNION
Belgium Greece Netherlands
Denmark Ireland, Republic of Italy
France Portugal Spain
Germany Luxembourg United Kingdom
NAFTA
Canada Mexico United States of America
ASIA
All countries of continental Asia (excluding Russia, Thailand and
Indonesia)
REST OF THE WORLD
All countries, territories and jurisdictions not comprised in the above
3 categories.
"Trade Xxxx Rights" means those rights in the trade nominations
developed or acquired by Xxxxxxx, AFETP, OX2IP or OX2ED, which might
describe the Technology or such other names in respect of the
Technology which is capable of protection under the Trade Xxxx Act 1955
(as amended) and the Trade Xxxx Regulations of the Commonwealth of
Australia, the Business Names Act or the Corporations Law of the
respective states of the Commonwealth and by similar laws in all other
countries throughout the World.
"World" means, jointly and severally, all territories and countries of
the World including the Commonwealth of Australia.
1.2 A reference to persons shall include corporations; words including the
singular number shall include the plural number and vice versa, words
including a gender shall include all other genders.
1.3 A reference to a statute or a section of a statute includes all
amendments to that statute or section and includes all statutes or
sections passed in substitution for the statute or section referred to,
or incorporating any of its provisions.
Article 2 Assignment of Product, Patents and Intellectual Property to AETI
2.1 OX2IP hereby assigns to AETI, all OX2IP's right, title and interest in
the Product and the Patents and the Intellectual Property, in
consideration for the sum of US$1,500,000 paid by AETI to OX2IP, the
receipt of which sum is hereby acknowledged by OX2IP and in
consideration for the other obligations assumed by AETI hereunder.
2.2 AETP hereby assigns to AETI, all right, title and interest in the
Intellectual Property that AETP may have at the date hereof, in
consideration for AETI assuming the responsibility for the research and
development of the Engine and AETP being released from such
responsibility and in consideration for AETP being released from its
obligation to supply Engines and Parts to AETI and in consideration for
the other obligations assumed by AETI hereunder.
Article 3 Execution and form of Assignments of Patents and Intellectual
Property and costs
3.1 OX2IP shall execute such forms of assignment and other documents in
respect of the Patents and the Intellectual Property and shall perform
such other acts as AETI may reasonably require, in order to register
such Patents and Intellectual Property in AETI's name pursuant to any
relevant statutory provision in any country and all fees, costs and
expenses incurred by OX2IP in connection therewith shall be borne and
paid by AETI.
3.2 AETP shall execute such forms of assignment and other documents in
respect of the Patents and the Intellectual Property and shall perform
such other acts as AETI may reasonably require, in order to register
such Patents and Intellectual Property in AETI's name pursuant to any
relevant statutory provision in any country and all fees, costs and
expenses incurred by AETP in connection therewith shall be borne and
paid by AETI.
Article 4 No Warranty or Guarantee as to the validity of the Patents or
Intellectual Property
4.1 OX2IP and AETP do not warrant or guarantee the validity of the Patents,
or the Intellectual Property and do not warrant or guarantee that any
manufacture, use, sale, lease or other disposal or exploitation of the
Engine does not infringe any patent or similar intellectual property
right not held by OX2IP or AETP at the date hereof.
Article 5 AETI to assume all obligations in relation to the Patents, the
Intellectual Property and the research and development of the Engine
and AETI to be released from its obligations to AETI
5.1 In consideration of the assignment of the Product, Patents and
Intellectual Property to AETI, AETI agrees to perform all obligations
in respect of the Patents and the Intellectual Property, and without
limiting the generality of the aforesaid, AETI shall:
(a) Lodge applications for Patents and Intellectual Property
rights in respect of countries where such application has not
been made, where it would be reasonable for AETI so to do;
(b) Pay all renewal fees necessary to keep the Patents and
Intellectual Property rights (if any) in force, each such
payment to be effected not later than seven days before the
last date; thereof,
(c) use its best efforts to procure the grant of all Patents and
Intellectual Property rights for which application is made;
(d) assert from time to time whatever claims and rights which AETI
may have as holder of the Patents or Intellectual Property
arising from actual or apparent use, disclosure or other
infringement of the Patents, or Intellectual Property, or the
Confidential Information and it is a fundamental condition of
this Deed that AETI shall promptly assert and enforce all such
claims and rights and institute and prosecute an action
against any such infringement which comes to its notice.
5.2 In consideration of the assignment of the Product, Patents and
Intellectual Property to AETI, AETI hereby assumes the responsibility
of carrying out the research and development of the Engine and
undertakes to use its best efforts to carry out all such research and
development as shall be necessary to diligently advance and improve the
Engine in order to be able to successfully commercialise and exploit
the Engine throughout the World.
5.3 In consideration of AETP assigning to AETI all right, title and
interest in the Intellectual Property that AETP may have at the date
hereof, AETI hereby releases AETP from all obligations that it owes
AETI in respect of the research and development of the Engine and the
supply of Engines and Parts and AETI shall have no claims or rights
against AETP, whether existing or future, in relation to the
performance of such obligations.
Article 6 Disclosure of Confidential Information by AETI
6.1 AETI agrees only to disclose Confidential Information to parties who
have first signed a confidentiality agreement under which they agree:
(a) not to use or disclose the Confidential Information except in
relation to the research and development, manufacturing,
distribution, marketing, or other exploitation of the Engine
pursuant to an agreement entered into with AETI which is in
force;
(b) not to perform any act, or omit to perform any act, which in
the circumstances carries an unreasonable high risk that the
confidentiality of the Confidential Information or any of it
will be breached;
(c) only to disclose the Confidential Information to other parties
where it is necessary to do so in order to exploit the engine
as set out in sub-clause (a) of this clause and provided that
such parties first sign a confidentiality agreement, for the
benefit of AETI, on the same terms as those set out in
sub-clauses (a), (b) and (c) of this clause.
Article 7 Assignment of Intellectual Property to OX2IP by AETI in the event of
its default
7.1 AETI will forthwith assign the Patents and Intellectual Property to
AETP upon the happening of any of the following events:
(a) an order is made or a resolution passed for the winding up or
dissolution without winding up of AETI, unless the winding up
is for the purpose of reconstruction or amalgamation and the
scheme for reconstruction or amalgamation receives AETP's
prior written consent (which consent shall not be'
unreasonably withheld);
(b) AETI enters into an arrangement, reconstruction or composition
with its creditors or any of them, without AETP's prior
written consent (which consent shall not be unreasonably
withheld);
(c) AETI suspends payment of its debts or becomes insolvent within
the meaning of any relevant legislation or law;
(d) a receiver is appointed to AETI;
(e) if pursuant to the provisions of any relevant legislation AETI
Is placed under official management or an inspector is
appointed to investigate its affairs;
(f) if AETI is in breach of its obligations under clause 6;
(g) if is persist and substantial default is made by AETI in the
performance of any term of this Deed and where such default is
capable of remedy such default is not remedied within 30 days
after notice, specifying such default and requiring AETI to
remedy the same has been given to AETI by AETP.
In the event that AETI is required to assign the Patents and Intellectual
Property to AETP, AETI shall execute such forms of assignment and other
documents in thereof and shall perform such other acts as AETP may reasonably
require, in order to register such Patents and Intellectual Property in AETP's
name pursuant to any relevant statutory provision in any country and all fees,
costs and expenses incurred by AETI in connection therewith shall be borne and
paid by AETI.
Article 8 Exploitation of the Engine
8.1 shall use its best endeavors to commercialise and exploit the Engine
including the research and development of the Engine and the funding
thereof and the manufacturing, distribution and marketing of the Engine
and to appoint agents, and licensees for the purpose of such
commercialisation and exploitation.
Article 9 Termination of Head License Agreement and Sub-License Agreement by
mutual abandonment
9.1 OX2fP and OX2ED agree that the Head-License Agreement is terminated at
the date hereof by mutual abandonment and neither party shall have any
existing or future claims or rights against the other arising out of,
or in relation to, the Head-License Agreement, or the performance of
any term thereof.
9.2 OX2ED and AETI agree that the Sub-License Agreement is terminated at
the date hereof by mutual abandonment and neither party shall have any
existing or future claims or rights against the other arising out of,
or in relation to, the Sub-License Agreement, or the performance of any
term thereof.
Article 10 AETP, OX2IP and OX2ED warrant that the execution of this Deed by
them does not breach any agreement
10.1 AETP, OX2IP and OX2ED each hereby represent, warrant and undertake that
neither the execution of this Deed nor the performance of its of
obligations hereunder will cause it to be in breach of any agreement to
which it is party or is subject
Article 11 AETP, OX21P and OX2ED agree that this Deed is in their best
commercial interests
11.1 AETP, OX2IP and OX2ED have each considered the terms and consequences
of this Deed and have determined that it is in their best commercial
interests to enter into this Deed.
Article 12 Stamp duty and charges
12.1 All stamp duty and other government charges (if any) payable in respect
of this deed shall be paid by AETI.
Article 13 Notices
13.1 All notices shall be in writing and shall be given by any one Of the
following means -
(a) by delivering it to the address of the party on a business
day during normal business hours; or
(b) by sending it to the address of the party by pre-paid airmail
post or if airmail post is not available by ordinary post; or
(c) by sending it by facsimile transmission to the facsimile
number of the party and on the next business day by giving it
by either of the means set forth in sub-clause 13.1 (a) or
13.1 (b) above.
13.2 A notice shall be deemed to be given and received -
(a) if given in accordance with sub-clause 13.1 (a), on the next
business day after the day of delivery;
(b) if given in accordance with sub-clause I3.I (b), seven (7)
clear business days after the day of posting;
(c) if given in accordance with sub-clause 13.1 (c) on the next
business days after transmission.
13.3 The address and facsimile numbers referred to in clause 13.1 shall in
the absence of notice to the contrary be as set out below:
AETP:
Address: Factory 1, 2 Xxxx Xxxxxxxx Drive, Burleigh Gardens
Industrial Estate, Xxxxxxxx Xxxxx, Xxxxxxxxxx 0000, Xxxxxxxxx
Facsimile: x00-00-000-0000
OX2IP:
Address: 0xx Xxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxx Xxxx, Xxxxxxxx
of Vanuata
Facsimile: x000-00000
OX2ED:
Address: 0xx Xxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxx Xxxx, Xxxxxxxx
of Vanuata
Facsimile: x000-00000
AETI:
Address: 0000 Xxxxx Xxxx, XX, Xxxxxxxxxxx, Xxx Xxxxxx, Xxxxxx Xxxxxx of
America
Facsimile: x0-000-000-0000
Article 14 Waiver
14.1 A party's failure or delay to exercise a power or right does not
operate as a waiver of that power or right.
14.2 The exercise of a power or right does not preclude either its exercise
in the future or the exercise of any other power or right.
14.3 A waiver is not effective unless it is in writing.
14.4 Waiver of a power or right is effective only in respect of the specific
instance to which it relates and for the specific purpose for which it
is given.
Article 15 Severability
15.1 If any provision of this deed be held to be invalid in any way or
unenforceable it shall be severed and the remaining provisions shall
not in any way be affected or impaired and this deed shall be construed
so as to most nearly give effect to the intent of the parties as it was
originally executed.
Article 16 Applicable law and jurisdiction
16.1 This Deed shall be governed by and construed in accordance with the
laws of the State of California and the United States of America.
16.2 Each party irrevocably and unconditionally submits to the non-
exclusive jurisdiction of the courts of the State of California and
waives any immunity or any objection it may have to any action in those
courts and to a claim that any action in those courts and to a claim
that any action has been brought in an inconvenient forum or to those
courts not having jurisdiction.
THIS AGREEMENT WAS EXECUTED AS A DEED on the date first hereinbefore written
THE COMMON SEAL of
ADVANCED ENGINE TECHNOLOGY PTY LTD
was hereunto affixed in accordance with its
Articles of Association and in the presence of-.
/s/ Xxxxxx Xxxxxxx
--------------------------------------
Xxxxxx Xxxxxxx Director
/s/ Xxxx Xxxxxx
--------------------------------------
Xxxx Xxxxxx Director/Secretary
BY XXXXXX XXXXXXX for and on
Behalf of OX2 INTELLECTUAL
PROPERTY INC.
/s/ Xxxxxx Xxxxxxx
--------------------------------------
Xxxxxx Xxxxxxx
BY XXXXXX XXXXXXX for and on
Behalf of OX2 ENGINE
(DISTRIBUTION) INC.
/s/ Xxxxxx Xxxxxxx
-------------------------------------
Xxxxxx Xxxxxxx
THE COMMON SEAL of
ADVANCED ENGINE TECHNOLOGIES, INC.
was hereunto affixed in accordance with its
Articles of Association and in the presence of:
/s/ Xxxxxx X. Xxxxxx
-------------------------------------
Xxxxxx X. Xxxxxx Director
