DEBT FORGIVENESS AND TECHNOLOGY AGREEMENT
This AGREEMENT dated as of July 22, 1997, is
entered into by and between:
1. V'POWER CORPORATION, a corporation
incorporated under the law of the Bahamas and having its
principal address at Gedung Xxxxx Xxxxx, X0. Medan Merdeka
Timur no. 17, Xxxxxxx 00000, Xxxxxxxxx (hereinafter
referred to as "V'Power").
2. VECTOR AEROMOTIVE CORPORATION, a company
incorporated under the law of the State of Nevada, U.S.A.,
having its principal office at 000 Xxxxxx Xxxxxx, Xxxxx
Xxxx Xxxxxxx, Xxxxxxx 00000 (hereinafter referred to as
"Vector").
Each of the above parties individually will be
called a "Party", and collectively, the "Parties";
RECITALS
WHEREAS, Vector is justly indebted in the amount
of $451,103.95 (collectively, the "Indebtedness") to
V'Power (i) pursuant to an Assignment of Receivables dated
as of July 22, in the principal amount of $423,118.22, and
(ii) in the amount of $27,985.73 for advances in December,
1996, March, 1997 and May, 1997, to cover telephone bills
and premiums on Directors and officers insurance, and
WHEREAS, V'Power wishes to purchase the
Transferred Property (as hereinafter defined) and Vector is
willing to sell the Transferred Property for $500,000.
NOW, THEREFORE THE PARTIES HEREBY AGREE AS
FOLLOWS:
Article 1
Certain Definitions
1.1 "Affiliate" shall mean a person [individual
or separate business entity] that directly or indirectly,
through one or more intermediaries, controls, is controlled
by or is under common control with another person, any
officer, director, employee or agent of the first person,
trustee with the first person or its Affiliate as
beneficiary of the trust, and spouse or relative [first
cousin or closer] or any of the above. Automobili
Lamborghini, S.p.A., a corporation incorporated under the
law of the Republic of Italy, Automobili Lamborghini,
U.S.A., Inc., a corporation incorporated under the laws of
Delaware and Timor Putra National, a corporation
incorporated under the laws of the Republic of Indonesia,
are Affiliates of V'Power for all purposes.
1.2 "Initial Delivery Date" shall mean the date
following the execution of this Agreement on which
Technical Information concerning the Model is first
transmitted to V'Power by Vector.
1.3 "Intellectual Property Rights" shall mean
inventions, patents, patent applications, technical
designs, copyright, developments, techniques and other
property rights of a similar nature, whether or not
protectable by registration, owned by Vector relating to
the design, development and manufacture of the Model as
each such item may exist on the date of this Agreement, but
shall not include the exterior or interior styling of the
Model or any Vector trademark or trade name.
1.4 "Model" shall mean Vector's M-12 vehicle.
1.5 "Technical Information" shall mean technical
knowledge, know-how, data, drawings, specifications, stress
and finite element analysis, CAD files, sketches, and
other information and material related to the details of
the Model owned by Vector as each such item may exist on
the date of this Agreement, and technical and
administrative knowledge, know-how, data, standards,
procedures, systems, lay-outs, drawings and other
information relating to the manufacture of the Model and
parts of the Model, owned by Vector as each such item may
exist on the date of this Agreement, but shall not include
the exterior or interior styling of the Model or any Vector
trademark or trade name.
1.6 "Transferred Property" shall mean all
Intellectual Property Rights and all Technical Information
relating to the Model.
Article 2
Debt Forgiveness and Conversion
2.1 In consideration of the transfer of
Transferred Property in accordance with this Agreement, as
full payment for such transfer, V'Power hereby forgives
the Indebtedness and tenders in cash in United States
Dollars the amount of $48,896.05.
2.2 V'Power represents and warrants that the
Indebtedness includes and consists of all indebtedness,
obligations, agreements and covenants of Vector to V'Power
involving the payment of money or property. For purposes
of this Section 2.3, the payment of property does not
include the issuance of Common Stock of Vector.
Article 3
Transfer of Transferred Property
3.1 Vector hereby grants to V'Power, during the
term of this Agreement, the perpetual, non-transferable
(except to V'Power's Affiliates) and non-exclusive right
(i) to use the Transferred Property for all purposes in its
business or the business of any Affiliate of V'Power and
(ii) to manufacture and sell products of any kind or nature
using the Transferred Property. Nothing in this Agreement
shall impose on Vector any responsibility or obligation to
have or obtain any Transferred Property.
3.2 All royalties for the sale, use and transfer
of the Transferred Property have been paid in full.
3.3 Vector shall provide V'Power, on or before
the thirtieth (30th) day after the date of this Agreement,
Technical Information described below relating to the Model
as each such item exists on the date of this Agreement:
(a) Non-costed xxxx of material.
(b) Product drawings and master line drawings
(reproducible and/or CAD files as
appropriate), including engineering
specifications for all parts, components and
assemblies.
(c) Design installation manuals by system/sub-system
including engineering specifications
for assembly, such as tightening torque,
heating requirements, greases, glues, etc.
(d) Master service manual.
(e) Owners manuals and graphic manuals and
masters.
(f) Reports of all prototype construction and
tests.
(g) Product development reports and vehicle
maturity charts.
(h) Engineering specifications for complete
Model assemblies.
(i) Design failure mode and effect analysis
studies on all safety related parts.
(j) Warranty manual and "fault-finding" service
manual.
3.4 V'Power shall defend, indemnify and hold
harmless Vector from and against any and all liability,
demands, damages, expenses and losses for death, personal
injury, property damage or any other claim or liability
("claims and damages") arising out of the use by V'Power or
any Affiliate of any of the Transferred Property, or out of
the use, sale or the disposition by V'Power or its
Affiliates of any products manufactured by V'Power or any
Affiliate using the Transferred Property, provided there
shall be no liability under this paragraph 3.4 for
indirect, consequential or special damages or from damages
resulting from defects in the Transferred Property not
created by the use of the Transferred Property by V'Power
or any Affiliate.
3.5 For a period of seven years from the date of
this Agreement, Vector within a reasonable time will
provide V'Power with any changes or revisions to the
Technical Information and any improvements, provisions or
updates to any Intellectual Property Rights. Within thirty
(30) days of incorporation into Technical Information,
Vector will provide V'Power a copy of Technical Information
incorporating any changes, revisions or updates. Vector
shall have no obligation to make any changes, revisions,
amendments or updates to the Transferred Property.
3.6 During normal business hours and in a
reasonable time relative to Vector's business operations,
Vector will provide a representative of V'Power reasonable
access to the status and results of all research and
development relating to the Transferred Property. Vector
and V'Power will cooperate to minimize the disruption of
such access to Vector's normal business operations.
V'Power shall reimburse Vector for the direct cost of an
employee of Vector, who shall be present with the
representative of V'Power at all times such representative
is reviewing such research and development, and the direct
cost of any employees or consultants of Vector requested by
V'Power to be so present. Vector shall have no
responsibility or obligation to conduct any research or
development relating to the Transferred Property.
3.7 Vector shall have the right from time to
time during normal business hours to inspect the premises
of V'Power at any location where records relating to the
Transferred Property are maintained, provided this
inspection is coordinated not to unreasonably interfere
with the normal business operations of V'Power.
3.8 V'Power shall not transfer or grant a
sublicense of the Transferred Property except as provided
in this Agreement and shall not allow any third Party to
use the Transferred Property by obtaining information
contained within the Transferred Property from V'Power.
3.9 At all times during the term of this
Agreement V'Power shall comply with all governmental laws
and regulations applicable to the use of the Transferred
Property or the production and sale of products containing
or using in any way the Transferred Property.
Article 4
Negation of Warranty
4.1 THE TRANSFERRED PROPERTY IS PROVIDED ON AN
"AS-IS" BASIS, AND THERE ARE NO REPRESENTATIONS OR
WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OF FITNESS FOR ANY PARTICULAR PURPOSE.
V'POWER SHALL BE SOLELY RESPONSIBLE FOR THE SELECTION, USE,
EFFICIENCY AND SUITABILITY OF THE TRANSFERRED PRODUCT, AND
VECTOR SHALL HAVE NO RESPONSIBILITY OR LIABILITY THEREFORE.
4.2 VECTOR SHALL HAVE NO RESPONSIBILITY OR
LIABILITY TO V'POWER FOR THE INFRINGEMENT OF PROPRIETARY
RIGHTS OF THE TRANSFERRED PROPERTY OR ANY PORTION OF THE
TRANSFERRED PROPERTY.
Article 5
Confidentiality
5.1 Each Party agrees that any confidential
information received from the other Party shall be
disclosed only to personnel of the receiving Party on a
strictly Need to Know' basis for the purposes specified in
this Agreement, and that personnel receiving such
confidential information shall be notified of all the
obligations of confidentiality in respect thereof.
5.2 No disclosure of confidential information by
either Party to a third Party shall be made without the
prior written agreement of the other Party, and then only
after obtaining from the third Party a written undertaking
to maintain confidentiality equivalent in all respects to
those contained herein.
5.3 Restrictions and conditions of Sections 5.1
and 5.2 shall not apply where the receiving Party can
demonstrate that such confidential information is:
(a) in or comes into the public domain at any
time without breach of this Article 5 or any
other obligation of confidentiality or is
made available to the general public without
restrictions by the disclosing Party, or
(b) known to the receiving Party at the time of
disclosure, or is independently developed by
it or its employers without reference to or
use of any disclosed confidential
information, or
(c) rightfully received from a third Party
without restriction or without breach of
this Agreement.
5.4 If the receiving Party or its executive
officers, employees, or representatives become legally
compelled to disclose any of the confidential information
covered by this Agreement, the receiving Party shall
provide the other Party with immediate notice thereof and
at least seven days prior to such required disclosure in
order that the disclosing Party may seek a protective
order, or take other appropriate measures to ensure its
interests are protected.
Article 6
Indemnification and Contribution
6.1 Subject to the conditions set forth below,
Vector agrees to indemnify and hold harmless V'Power, its
officers, directors, partners, employees, agents and
counsel against any and all loss, liability, claim, damage,
and expense whatsoever (which shall include, for all
purposes of this Article 6, but not be limited to,
attorneys' fees and any and all expense whatsoever incurred
in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim
whatsoever and any and all amounts paid in settlement of
any claim or litigation) as and when incurred, arising out
of, resulting from, based upon, or in connection with any
breach of any representation, warranty, covenant or
agreement of Vector contained in this Agreement. The
foregoing agreement to indemnify shall be in addition to
any liability Vector may otherwise have, including
liabilities arising under this Agreement. V'Power agrees
to indemnify and hold harmless Vector, its officers,
directors, partners, employees, agents and counsel against
any and all loss, liability, claim, damage, and expense
whatsoever (which shall include, for all purposes of this
Article 6, but not be limited to, attorneys' fees and any
and all expense whatsoever incurred in investigating,
preparing, or defending against any litigation, commenced
or threatened, or any claim whatsoever and any and all
amounts paid in settlement of any claim or litigation) as
and when incurred, arising out of, resulting from, based
upon, or in connection with any breach of any
representation, warranty, covenant or agreement of V'Power
contained in this Agreement.
6.2 If any action is brought against one Party,
that Party or any of its officers, directors, employees,
agents or counsel, of any controlling persons (an
"Indemnified Party" or, collectively, "Indemnified
Parties"), in respect of which indemnity may be sought
against the other Party (the "Indemnifying Party") pursuant
to this Agreement, such Indemnified Party or Parties shall
promptly notify the Indemnifying Party in writing of the
institution of such action (but the failure so to notify
shall not relieve the Indemnifying Party from any liability
it may have) and the Indemnifying Party shall promptly
assume the defense of such action including the employment
of counsel satisfactory to such Indemnified Party or
Parties and payment of expenses. Such Indemnified Party or
Parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party
or Parties, unless the employment of such counsel shall
have been authorized in writing by the Indemnifying Party
in connection with the defense of such action or the
Indemnifying Party shall not have promptly employed counsel
satisfactory to the Indemnified Party or Parties to have
charge of the defense of such action or such Indemnified
Party or Parties shall have reasonably concluded that there
may be one or more legal defenses available to it or them
or other indemnified parties which are different from or
additional to those available to the Indemnifying Party, in
any of which events such fees and expenses shall be borne
by the Indemnifying Party and the Indemnifying Party shall
not have the right to direct the defense of such action on
behalf of the Indemnified Party or Parties. Anything in
this paragraph to the contrary notwithstanding, the
Indemnifying Party shall not be liable for any settlement
of any claim or action effected without its written
consent.
Article 7
Binding Effect
This Agreement shall be binding upon the
successors and assigns of each Party, provided that V'Power
may only assign this Agreement to one or more of its
Affiliates, unless Vector's prior written consent is first
obtained. If any assignee uses the Transferred Property to
produce vehicles used in motor racing, such assignee shall
identify Vector's connection with such vehicles, with the
terms to be agreed in good faith.
Article 8
Limitation of Liability
8.1 IN NO EVENT SHALL VECTOR OR V'POWER OR ANY
AFFILIATES BE LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT
FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOST
PROFITS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
PERFORMANCE OR BREACH OF THIS AGREEMENT, NOTWITHSTANDING
SUCH PARTY HAVING BEEN ADVISED OF THE POSSIBILITY THEREOF.
VECTOR'S LIABILITY IN THIS AGREEMENT TO V'POWER, IF ANY,
SHALL IN NO EVENT EXCEED THE TOTAL OF THE AMOUNT OF
FORGIVENESS OF THE INDEBTEDNESS SET FORTH IN SECTION 2.1 OF
THIS AGREEMENT.
8.2 IN NO EVENT SHALL VECTOR BE LIABLE TO
V'POWER FOR ANY DAMAGES RESULTING FROM OR RELATING TO ANY
FAILURE OF THE TRANSFERRED PROPERTY OR ANY PRODUCT OR
MANUFACTURER PRODUCT UTILIZING THE TRANSFERRED PROPERTY.
Article 9
Governing Law and Arbitration
9.1 This Agreement shall be governed by and
construed under the laws of the State of Florida, without
regard to its principles of conflict of laws.
9.2 Any controversy or claim arising out of or
relating to this contract, or the breach thereof, which is
not settled amicably, including the arbitrability of the
dispute or claim or any issue, shall be settled by binding
arbitration in accordance with current arbitration rules of
the American Arbitration Association ("AAA") by a sole
arbitrator appointed by the parties or, if they cannot
agree upon an arbitrator, by three arbitrators, one of whom
shall be designated by each party, and the third appointed
by the other two. Arbitrator compensation and expenses
shall be paid equally by each Party, and each Party shall
be responsible for its own expenses, including legal fees.
The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. Section 1-16, to the exclusion
of any provisions of State law inconsistent therewith or
which would produce a different result. Should said Act be
determined to be inapplicable, then the arbitration shall
be governed by the Florida Arbitration Code, Chapter 682,
Florida Statutes. The place of arbitration shall be
Jacksonville, Florida, at any location as the arbitrator
directs, having due regard of the convenience of the
parties, of witnesses and of the arbitrator. The
arbitrator shall determine the rights and obligations of
the parties according to the substantive laws of the State
of Florida, excluding conflict of law principles, and shall
give effect to applicable statutes of limitation. The
arbitrator may consolidate arbitrations involving common
questions of law or fact. The arbitrator may make any
order to protect a Party or person from annoyance,
embarrassment, oppression, or undue burden or expense that
justice requires. The arbitrator may make final, interim,
interlocutory and partial awards, and may grant any remedy
or relief which the arbitrator deems just and equitable and
within the scope of the agreement of the parties, including
but not limited to specific performance and, in the event
of a frivolous or malicious action, the awarding of
attorneys fees and costs, but the arbitrator is not
empowered to award damages in excess of liquidated or
actual damages, whichever is applicable, nor is the
arbitrator empowered to award punitive damages. Judgment
on the award rendered by the arbitrator may be entered by
any court having jurisdiction.
9.3 Nothing in this Article 9, nor the exercise
of any rights hereunder, shall limit the right of any Party
hereto at any time to obtain injunctive relief from a court
having jurisdiction to protect a Party from loss,
irreparable injury, or the dissipation of property while a
dispute is being resolved pursuant to the foregoing
subparagraphs of this Article 9. The preceding sentence
notwithstanding, the pursuit of injunctive relief shall not
constitute a waiver of the right or obligation of any Party
to submit any dispute or claim to the procedures authorized
and required in the foregoing subparagraphs of this Article
9. The Parties hereto agree that this Article 9 shall
limit and completely bar, to the maximum extent permitted
by law, any relief otherwise available to them from any
court of competent jurisdiction other than the injunctive
relief specifically excepted in this Section 9.3.
Article 10
Miscellaneous
10.1 This Agreement contains the entire
understanding between the Parties relating to the subject
matter of this Agreement, and all prior proposals,
discussions and writings between the Parties relating to
the subject matter of this Agreement are superseded by this
Agreement.
10.2 In the event any term or provision of this
Agreement shall for any reason be judicially held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegalities or unenforceabilities shall not
effect any other term or provision of this Agreement and
this Agreement shall interpreted and construed as such term
or provision, to the extent such term or provision shall
have been held to be invalid, illegal or unenforceable,
have never been contained in this Agreement.
10.3 None of the terms of this Agreement shall be
deemed to be waived by either Party or amended unless such
waiver or amendment be in writing and duly executed on
behalf of the parties be charged with such waiver or
amendment by its authorized officer and unless such waiver
or amendment cites specifically that it is a waiver or
amendment to the terms of this Agreement. The failure of
either Party to insist strictly upon any of the terms or
provisions of this Agreement shall not be deemed a waiver
of any subsequent breach or default of the terms or
provisions of this Agreement. No course of dealing or oral
communication shall form the basis of any amendment to this
Agreement or waiver or any term or provision of this
Agreement, and each Party hereby specifically waives any
right it may have to claim to the contrary.
IN WITNESS WHEREOF, the Parties have caused this
Agreement to be executed by their duly authorized
representatives as of the date and year first written
above.
VECTOR AEROMOTIVE CORPORATION
By: /s/ Xxxxx Xxxxx Xxxx
Title: Pressident
Address for Notices:
c/o Xxxxxxx X. Xxxxxxxx, Xx., Esquire
Xxxxxxxx & Xxxxx
Xxx Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
(000) 000-0000
Fax: (000) 000-0000
V'POWER CORPORATION
By: /s/ Sudjaswin, E. L.
Title: Pres. & Managing Director
Address for Notices:
x/x Xxxxxxxx, Xxxxxxx,Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
Att: Xxxxxx Xxxxxx, Esquire
(000) 000-0000
Fax: (000) 000-0000
