EXHIBIT 10.16
LICENSE AGREEMENT
THIS AGREEMENT, dated this 22 day of December, 1997, by and between
XXXXXX X. XXXXXX, individually, residing at 0000 Xxxxxx Xxxxx, Xxxx Xxxxxxxx,
Xxx Xxxxxx 00000 (hereinafter referred to as "LICENSOR I") and XXXXXXX XXXXXX,
residing at 0000 Xxxxxx Xxxxx Xxxx Xxxxxxxx, Xxx Xxxxxx 00000 (hereinafter
referred to as "LICENSOR II"), and XXXXXX INTERNATIONAL, LTD. having its
principle place of business at Xxxxx 00 xxx Xxxxxxxxx Xxxx, Xxxx Xxxxxxxx, Xxx
Xxxxxx 00000, (hereinafter referred to as "LICENSEE").
B A C K G R O U N D:
WHEREAS, LICENSOR I is the patentee and owns and has the right to
license certain PATENT RIGHTS (as hereinafter defined) used in the design and
construction of internal combustion engines employing spherical rotary valves
(the "XXXXXX SPHERICAL ROTARY VALVE SYSTEM"); and
WHEREAS, LICENSOR II has loaned LICENSOR I funds to reimburse
Xxxxxx International, ltd. for patent expenses; and
WHEREAS, LICENSOR I has granted to LICENSOR II and LICENSOR has
accepted an exclusive, revocable license with the right to sublicense; and
WHEREAS, LICENSOR I and LICENSOR II have each granted to LICENSEE,
previously, an exclusive revocable license for the United States of America to
make, use, sell and have made, LICENSED PRODUCT falling within the scope of the
PATENT RIGHTS; and
WHEREAS, it is the desire of LICENSOR I and LICENSOR II to modify and
expand upon the previously granted license for the consideration set forth
herein and to render the previously granted licenses superseded by this license
and hence null and void.
NOW THEREFORE, in consideration of the premises and covenants and other
good and valuable consideration and the mutual promises of the performance of
the undertakings herein, it is agreed by and between the parties hereto as
follows:
ARTICLE I - DEFINITIONS
head or heads for an
1.1 - "CSRV VALVE SYSTEM" shall mean a cylinder head or heads for an
internal combustion engine manufactured in accordance with the PATENT RIGHTS (as
hereinafter defined) .
1.2 - "IMPROVEMENTS" shall mean any improvement, change, or
modification to the CSRV VALVE SYSTEM which may be developed, created, or
acquired by either party to this Agreement, but only to the extent that the same
comes within the scope of one or more of the claims of the patent rights (as
hereinafter defined).
1.3 - "PATENT RIGHTS" shall mean the patents as listed in Attachment
1.3.
1.4 - "PROTOTYPES" shall mean LICENSED PRODUCT manufactured for testing
and evaluation purposes only.
1.5 - "TERRITORY" shall mean all of the countries, their territories
and possessions, comprising North America, Central America and South America.
ARTICLE II - LICENSES GRANTED
2.1 - LICENSES GRANTED TO LICENSEE
(1) LICENSOR I and LICENSOR II (hereinafter referred to
jointly as "LICENSOR") hereby grants to LICENSEE an exclusive license in the
TERRITORY, to make, use, sell, and have made, product falling within the scope
of the PATENT RIGHTS, and to prevent others from making, using, selling or
having made product falling within the scope of the PATENT RIGHTS;
(2) LICENSOR hereby grants to LICENSEE the non-exclusive right
to manufacture and sell PROTOTYPES falling within the scope of the PATENT RIGHTS
anywhere in the world.
2.2 - IMPROVEMENTS
If LICENSORS have heretofore brought about or shall hereafter during
the term of this Agreement bring about any IMPROVEMENTS to the PATENT RIGHTS
LICENSORS shall promptly disclose such IMPROVEMENTS TO LICENSEE. Any such
IMPROVEMENTS shall become subject to this Agreement.
2.3 - PATENT MARKINGS
LICENSEE shall xxxx on an exposed surface of all products made through
use of the PATENT RIGHTS hereunder, appropriate patent markings identifying
LICENSOR I as the owner of the pertinent PATENT RIGHTS. The content, formal
language used in such markings shall be in accordance with the laws and
practices of the countries where such products bearing such markings are made,
sold, or used and shall be approved by LICENSOR I.
2.4 ACKNOWLEDGMENT OF LICENSE
On all CSRV VALVE SYSTEMS, LICENSEE and Sublicensee shall
acknowledge that the same are manufactured under license from
LICENSOR I. Unless otherwise agreed to by the parties, the
following notice shall be used by LICENSEE and sublicensees on an
exposed surface of all products: "Manufactured under License from
Xxxxxx X. Xxxxxx". Sublicensees shall use the notice:
"Manufactured under License from Xxxxxx International, Ltd. and
Xxxxxx X. Xxxxxx." Such notices shall be used in all descriptive
materials, instruction and service manuals relating to the CSRV
VALVE SYSTEM.
ARTICLE III - PAYMENTS
3.1 - In consideration for the grant of this license, the LICENSEE
shall grant to LICENSORS, shares of stock in LICENSEE.
The shares shall be granted as follows: 500,000 Series A Preferred shares
to LICENSOR I $4,000.00 to LICENSOR II 3.2 - In further consideration of this
License, LICENSEE shall pay all costs associated with the PATENT RIGHTS
identified herein both in the TERRITORY and world wide.
ARTICLE IV - REPRESENTATIONS, OBLIGATIONS, WARRANTIES AND
DISCLAIMERS
4.1 - LICENSOR I represents and warrants that LICENSOR I is the
rightful owner of the PATENT RIGHTS and has the exclusive right to license all
of the PATENT RIGHTS and that all such PATENT RIGHTS pertaining to the CSRV
VALVE SYSTEM under LICENSOR'S control and possession in the TERRITORY are set
forth in Attachment 1.4.
Further, LICENSOR I and LICENSOR II have the power and authority to execute,
deliver and perform its obligations under this Agreement, nor the performance of
its obligations hereunder will constitute a breach of the terms or provisions of
any contract or agreement to which LICENSOR is a party.
4.2 - LICENSEE will use its best efforts to execute all such tasks as
may be necessary to bring about the speedy manufacture, sale or use of products
manufactured with the use of the PATENT RIGHTS consistent with good business
practice; and ensure that all steps within its power are undertaken with all
reasonable speed to ensure that such products made by LICENSEE comply with
relevant government regulations and to ensure that all steps within its power
are undertaken with all reasonable speed to ensure that sublicenses are
negotiated and executed with respect to the PATENT RIGHTS.
ARTICLE V - DURATION AND TERMINATION
5.1 - Subject to the provisions of Section 5.1 hereof, all rights and
obligations under this Agreement shall expire upon the last to expire patents of
the PATENT RIGHTS.
5.2 - This Agreement shall terminate effective immediately
upon:
(a) The filing by LICENSEE of an involuntary petition in
bankruptcy, the entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, trustee in bankruptcy or
liquidator for LICENSEE in any insolvency, readjustment of debt,
marshaling of assets and liabilities, bankruptcy or similar
proceedings, or the winding up or liquidation of its affairs, and the
continuance of any such petition, decree or order undismissed or
unstayed and in effect for a period of sixty (60) consecutive days; or
(b) The consent by LICENSEE to the appointment of a
conservator, receiver, trustee in bankruptcy or liquidator in any
insolvency, readjustment of debt, marshaling of assets and liabilities,
bankruptcy or similar proceedings of or relating to LICENSEE, or
relating to substantially all of its property, or if LICENSEE shall
admit in writing its inability to pay its debts generally as they
become due, file a petition to pay its debts generally as they become
due, file a petition to take advantage of any applicable insolvency,
reorganization or bankruptcy statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its
obligations.
ARTICLE VI - LIMITATION OF ASSIGNMENT BY LICENSEE
6.1 - This Licensee is non-assignable and the rights, duties and
privileges of LICENSEE hereunder shall not be sold, transferred, hypothecated,
or assigned by LICENSEE, either in whole or in part without the consent of
LICENSORS.
ARTICLE VII - GOVERNING LAW
7.1 - This Agreement shall be governed by and construed and enforced in
accordance with the Laws of the State of New Jersey and each party hereby
submits to the jurisdiction of any state or federal court in the State of New
Jersey in the event of any claims arising under this Agreement.
ARTICLE VIII - ENTIRE AGREEMENT
8.1 - This Agreement sets forth the entire Agreement and understanding
by and between LICENSOR and LICENSEE as to the subject matter hereof and has
priority over all documents, verbal consents and understandings made before the
execution of this Agreement and none of the terms of this Agreement shall be
amended or modified except in a written document signed by LICENSORS and
LICENSEE hereto.
8.2 - Should any portion of this Agreement be declared null and void by
operation of law, or otherwise, the remainder of this Agreement shall remain in
full force and effect.
8.3 - This Agreement is understood by the parties hereto to
specifically supersede the February 17, 1997 License from LICENSOR I to LICENSEE
and any subsequent amendments thereto as well s the Agreement from LICENSOR II
to LICENSEE dated February 22, 1997 and any subsequent amendments thereto.
ARTICLE IX - NOTICES
9.1 - Any notice, consent or approval required under this Agreement
shall be in English and in writing, and shall be delivered to the following
addresses (a) personally by hand, (b) by Certified Air Mail, postage prepaid,
with return receipt requested, or (c) by telefax, confirmed by such Certified
Air Mail:
If to the LICENSORS:
Xx. Xxxxxx X. Xxxxxx
c/o COATES INTERNATIONAL, LTD.
Xxxxx 00 & Xxxxxxxxx Xxxx
Xxxx Xxxxxxxx, XX 00000-0000
Telephone: (000)000-0000
Telefax: (000) 000-0000
Xx. Xxxxxxx Xxxxxx
c/o COATES INTERNATIONAL, LTD.
Xxxxx 00 & Xxxxxxxxx Xxxx
Xxxx Xxxxxxxx, XX 00000-0000
Telephone: (000)000-0000
Telefax: (000) 000-0000
If to LICENSEE:
XXXXXX INTERNATIONAL, LTD.
Xxxxx 00 & Xxxxxxxxx Xxxx
Xxxx Xxxxxxxx, XX 00000-0000
All notices shall be deemed effective upon the date delivered by hand
or sent. If either party desires to change the address to which notice is sent
to such party, it shall so notify the other party in writing in accordance with
the foregoing.
ARTICLE X - MISCELLANEOUS
10.1 - Headings and References - Headings in this Agreement are
included herein for ease of reference only and have no legal effect. Reference
herein to Sections or Attachments are to Sections and Attachments to this
Agreement, unless expressly stated otherwise.
10.2 - Reference on Disclosure of Terms and Provisions (a)
This Agreement shall be distributed solely to:
(i) those personnel of LICENSORS and LICENSEE who shall have a need to know of
its contents; (ii) those persons whose knowledge of its contents will facilitate
performance of the obligations of the parties under this agreement; (iii) those
persons, if any, whose knowledge of its contents is essential in order to permit
LICENSEE or LICENSORS to place, maintain or secure
benefits as required by law, regulation or judicial order.
IN WITNESS WHEREOF, the parties have cause this Agreement to be
executed as of the date first above written by their authorized representatives.
ATTEST:
s/Xxxxxxx Xxxxxx s/Xxxxxx X. Xxxxxx
Notary Public of New Jersey XXXXXX X. XXXXXX - INDIVIDUALLY
My Commission Expires
Dec. 27, 2000
s/Xxxxxxx Xxxxxx s/Xxxxxxx Xxxxxx
Notary Public of New Jersey XXXXXXX XXXXXX - INDIVIDUALLY
My Commission Expires
Dec. 27, 2000
s/Xxxxxxx Xxxxxx s/Xxxxxx X. Xxxxxx
Notary Public of New Jersey XXXXXX INTERNATIONAL, LTD.
My Commission Expires BY: XXXXXX X. XXXXXX
Dec. 27, 2000
Xxxxxx License Agr - December 22, 1997
