LICENSE AGREEMENT
EXHIBIT
10.32
THIS
AGREEMENT made effective May 28, 2010,
BETWEEN:
LI-ION
MOTORS CORP., a limited corporation incorporated under the laws of the State of
Nevada
(The
“Licensor”)
- and
–
LITHIUM
ELECTRIC VEHICLE CORP., a limited corporation incorporated under the laws of
Alberta and having an office in the City of Calgary, in the Province of
Alberta
(“Licensee”)
PREMISES
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A.
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The
Licensor is the developer and owner of patented technology related to
rechargeable lithium ion batteries for electric vehicles and other
applications, referred to in this Agreement as the Licensed
Inventions.
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B.
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The
Licensee is interested in acquiring certain rights to the Licensed
Inventions and the Licensor is willing to grant such rights to the
Licensee, subject to the terms and conditions of this
Agreement.
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C.
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The
Licensee plans to expand sales of the current line of products of the
Licensor by manufacturing and selling such products based on the Licensed
Inventions;
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D.
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The
Licensee wishes to become the exclusive licensee for the Licensed
Inventions in Canada in accordance with the conditions set out in this
Agreement.
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AGREEMENT
IN
CONSIDERATION OF the premises and in consideration of the mutual terms,
conditions and covenants below, the parties agree each with the other as
follows:
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1.
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Definitions
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1.1
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In
this Agreement, the following terms have the following
meaning:
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- 1
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“Event of
Insolvency” means if a party files a petition in bankruptcy or for
reorganization or for an arrangement pursuant to any applicable bankruptcy
legislation, insolvency legislation or any similar legislation, now or after the
date of this Agreement in effect, or is adjudged by a Court of competent
jurisdiction to be a bankrupt or becomes insolvent or makes an assignment for
the benefit of its creditors;
“Improvements”
means any improvements to the Licensed Inventions that (a) either directly or
indirectly claim priority from the patents or patent applications of the
Licensed Inventions and (b) are conceived or first reduced to practice during
the term of this Agreement solely by the Licensor as a result of research and
development activities, and which, if practiced without licensed rights, would
infringe one or more claims of the patent and patent applications covering the
Licensed Inventions.
“Licensed
Inventions” means the Licensor’s United States and foreign patents and patent
applications that are listed in Schedule “A” Licensed Inventions and
trademarks and trade names listed in Schedule “B” Licensed Trademarks and Trade
names to this Agreement which schedules are incorporated into this
Agreement by reference. Any United States and foreign patents issuing
from the patent applications listed in Schedule “A” will be added to Schedule
“A” upon issuance. Licensed Inventions shall also include divisions,
continuations (excluding continuations-in-part claiming new subject matter),
reissues, substitutes, and extensions of the patents and patent applications as
they arise.
“Licensed
Products” means (a) any composition of matter, machine, article of manufacture,
or component, or (b) processes, methods, or procedures, which if made used or
sold by the Licensee, would infringe one or more of the claims of the patents or
patent applications covering the Licensed Inventions.
“License”
means the license granted pursuant to subsection 2.l;
“Marks”
means the trade name and trademarks as set out in Schedule “B”;
“Patents”
means those patents or patents pending set out and described in Schedule
“A”;
“Purchase
Price” means the purchase price for the Licensed Inventions as set out in
section 3;
“Royalty”
means the royalties referred to in section 4;
“Royalty
Report” means the report on the calculation of Royalty payments referred to in
subsection 4.2; and
“Territory”
means any location throughout Canada.
All
dollar amounts ($) in this Agreement refer to Canadian dollars.
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2.
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Grant Of
License
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2.1
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Subject
to the Licensor’s rights in the Licensed Inventions and to the terms and
conditions of this Agreement, the Licensor grants to the Licensee the
exclusive right and license to make, have made, use, or sell, the Licensed
Inventions and Improvements incorporated into the Licensed Products in
Canada, subject to the patent coverage of the Licensed
Inventions. The License granted by the Licensor to the Licensee
pursuant to this Agreement shall include all Improvements and any
technical updates and changes or amendment to the Licensed Inventions and
any new information, patents and marks pertaining to the Licensed
Inventions and Licensed Products.
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- 2
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2.2
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The
Licensee is entitled to the License for use in Canada under sub-licenses,
sub-contracts or joint ventures as relates to any part of the License to
any third party, provided always that the Licensee remains responsible to
the Licensor for each and every obligation of the Licensee pursuant to
this Agreement.
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3.
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Payments
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3.1
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The
Licensee agrees to pay the Licensor the following as fees in consideration
for granting the License:
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3.1.1 $1,000,000
payable by way of certified cheque or wire transfer; and
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3.1.2
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an
amount equal to the valuation of the License as set out in the Evan &
Xxxxx, Inc. valuation report to be completed with respect to the License,
less the $1,000,000 payment in 3.1.1 above, payable by way of a
convertible debenture or
securities.
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3.2
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The
payments set out in section 3.1 shall be paid by the Licensee to the
Licensor as follows:
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3.2.1
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$333,333
paid on signing of this Agreement, such payment to be refundable in the
event the Xxxxx & Xxxxx, Inc. valuation report does not conclude on a
valuation amount for the License that is satisfactory to both parties by
June 15, 2010, or such other date as the parties may agree to in
writing;
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3.2.2
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$333,333
paid on or before 30 days from the date of the completion of the Xxxxx
& Xxxxx, Inc. valuation report on the License, such payment to be
non-refundable;
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3.2.3
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$333,334
paid on closing of the transfer of the License from the Licensor to the
Licensee, which shall be no later than 180 days from the date of signing
of this Agreement by all parties;
and
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3.2.4
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the
balance of the valuation amount, calculated in accordance with 3.1.2
above, paid on closing of the transfer of the License from the Licensor to
the Licensee, which shall be no later than 180 days from the date of
signing of this License Agreement by all
parties.
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3.3
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The
closing of the transfer of the License pursuant to the terms of this
Agreement shall be completed upon the making of all of the payments of the
purchase price as set out in section
3.2.
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3.4
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In
addition to the payments in section 3.1, the Licensee shall pay to the
Licensor, by certified cheque or wire transfer, an amount of $500,000 on
each anniversary of the date of this Agreement, commencing on the second
anniversary of the date of this
Agreement.
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4.
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Royalty
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4.1
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The
Licensee agrees to pay the Licensor a royalty, as determined by the Evan
& Xxxxx, Inc. valuation report on the License, on each and every
Licensed Product sold or distributed by the
Licensee.
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4.2
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The
Royalty shall be paid within ten days of the end of each calendar quarter,
which payment shall be accompanied by a detailed report which shall
account for the calculation of the Royalty over the period reported
on.
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- 3
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4.3
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The
Licensor or its duly authorized representative shall have the right at any
reasonable time during business hours to inspect and audit the accounts
and records of the Licensee, and any other book, record, voucher, receipt
or invoice, relating to the manufacture of the Machines and all other
facts or matters relating to the calculation of the Royalty due in respect
thereof, including all records, vouchers and other documents received from
sub-licensee confirming quantities of Licensed Products, and such
representative shall be entitled to take copies of or extracts from
same.
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4.4
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If
the Licensor is dissatisfied with the Royalty Report, it may at its
option, demand an audit of the Royalty Report by the Licensee's outside
auditors to confirm the amount of the Royalty however, should the said
audit conclude that the Royalty Report submitted by the Licensee was not
inconsistent with the said audit report by more than 2%, then the
Licensor shall pay all costs associated with the audit, otherwise the
Licensee will pay for the audit.
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5.
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Representation and
Warranties of the Licensor
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5.1
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The
Licensor has the full power, authority, right and capacity to execute and
deliver this Agreement, to complete the transactions contemplated by this
Agreement and to duly observe and perform all of its covenants and
obligations set out in this
Agreement.
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5.2
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This
Agreement has been duly and validly executed and delivered by the Licensor
and constitutes a legal, valid and binding obligation in accordance with
its terms.
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5.3
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No
material action, suit or administrative or other proceeding is in process,
or pending or threatened, against or relating to the Licensor, the Patents
or the Marks.
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5.4
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The
Licensor is the legal and beneficial owner of and has good and marketable
title to the Licensed Inventions listed on Schedule “A” and Schedule “B”
attached to this Agreement.
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5.5
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That
except for Licensed Products sold to Licensee, it will not during the term
of this Agreement sell Licensed Products nor allow the sale of Licensed
Products to any person, group, company, firm or other organization with
the knowledge that such Licensed Products are to be used in or sold into
the Territory.
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6.
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Representations and
Warranties of the Licensee
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6.1
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The
Licensee has the full power, authority, right and capacity to execute and
deliver this Agreement, to complete the transactions contemplated by this
Agreement and to duly observe and perform all of its covenants and
obligations set out in this
Agreement.
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6.2
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This
Agreement has been duly and validly executed and delivered by the Licensee
and constitutes a legal, valid and binding obligation in accordance with
its terms.
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6.3
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No
material action, suit or administrative or other proceeding is in process,
or pending or threatened, against or relating to the
Licensee.
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7.
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Additional Covenants
of the Licensor
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7.1
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The
Licensor covenants with the Licensee as
follows:
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7.1.1
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to
provide all existing leads and information known to Licensor regarding
sales in the Territory, and to refer to Licensee any inquiries relating to
Licensed Products in the Territory;
and
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- 4
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7.1.2
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to
provide, at the Licensor's cost, all original designs and specifications
and other such materials used in the Licensor's business that may be
usefully used by the Licensee in its
business.
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8.
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Concerning the Patents
and Marks
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8.1
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The
Licensor shall pay all renewal fees and do all such acts and things as may
be necessary to maintain and keep in good standing the Patents and
Marks.
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8.2
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The
Licensor undertakes not to abandon or allow to lapse any of the Patents or
Marks.
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8.3
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The
Licensor shall, at its own cost, where on opinion of Licensor's counsel
says it is prudent to do so, defend every proceeding for revocation of the
Patents or the Marks or any of them and prosecute every application by the
Licensor for patents and trademarks for any Improvement and shall keep the
Licensee informed of the status of such defense or applications
from time to time.
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8.4
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The
Licensee shall, without cost to the Licensor, render all assistance which
may reasonably be required by the Licensor to render to the Licensor in
the prosecution of any Patent applications or Marks applications in the
Territory. The Licensor shall keep the Licensee informed of the
progress of the Patent applications and Marks applications, from time to
time.
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8.5
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The
Licensee shall observe all laws of the Territory in which the Licensed
Products are marketed regarding the Patents and any of the Marks duly
registered as trade marks in the Territory and shall indemnify the
Licensor in respect of any claim or charge that may be brought in respect
of any contravention thereof by the Licensee, and hold the Licensor
harmless.
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8.6
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The
Licensee shall include in all its publicity material relating to the
Licensed Products a reference to the fact that they are produced under
License from the Licensor and are the subject of the Patents and the
Marks.
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9.
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Infringements
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9.1
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If
any infringements or threatened infringement of any Patent or Xxxx comes
to the notice of the Licensee it shall immediately notify the Licensor
giving particulars of such infringement or threatened
infringement.
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9.2
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If
the Licensor is advised by Licensor's legal counsel that, prior to the
institution of proceedings for infringement, the specification of any
claim in the Patent should be amended, the Licensor shall at its own
expense apply to amend such
specification.
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9.3
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In
the event that damages are obtained in favor of each of the parties or in
favor of the Licensor in a sum which includes losses suffered by the
Licensee in any such action for infringement they shall share the costs of
such action in so far as they are not fully recovered from the infringer
in the proportion in which they share the said damages. If
the court does not differentiate between the parties on the matter of
damages or costs and either party can show that the losses which it
suffered from such infringement exceeded the losses of the other party it
shall be entitled to a proportionately higher share of the damages on its
agreeing to bear a proportionately higher share of the
costs. In this paragraph, “costs” means only reasonable
expenditures on fees and disbursements for legal representation, for
services of patent experts, intellectual property experts, patent agents
and reasonable incidental matters.
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- 5
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10.
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Third Party
Claims
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10.1
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If
any proceedings are threatened or commenced by a third party against
either the Licensee, any of its sub-licensees or any of their customers or
the Licensor in the Territory on the ground that the Patents or Marks
infringe any patent, trademark or monopoly right vested in such third
party, the party so threatened or sued shall inform the others immediately
and the matter shall be referred to leading patent counsel (well versed in
the laws of the Territory by which such matter will be determined) for the
purpose of obtaining his advice on whether a defense or the commencement
of proceedings will have a reasonable chance of success and whether there
are any circumstances making it imprudent to defend or commence
proceedings.
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10.2
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If
both Licensor and the Licensee decide that any such proceedings shall be
defended (or that proceedings should be commenced against the third
party), each party shall contribute equally to the costs thereof including
any damages awarded in favor of the third party or any sum paid on a
compromise of such claim.
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10.3
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If
one only shall decide that such proceedings shall be defended or further
proceedings commenced, such party shall bear the whole costs thereof,
including any damages and costs awarded against that party in favor of
such third party, and the other party to this Agreement shall, at their
own costs, render to the party so defending or commencing all assistance
that they reasonably can provide if
requested.
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10.4
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Should
all parties decide not to defend or should any party defend in such
proceedings and the decision, after appeal if any, shall be either that
the Patents or Marks materially infringe the third party's patent or
trademark or that all the Patents in the Territory within the provisions
of this Agreement are (or the vital or pertinent claims thereof are)
declared invalid or are revoked, then the Licensee and any sub-licensee
shall have the right at any time up to or within 60 days after the date of
such judgment (being the judgment of a court of competent jurisdiction,
after appeal if any), by notice in writing, modify this Agreement so as to
avoid liability for any payments otherwise due under this Agreement in
respect of the Territory where the third party's right are
enforceable.
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11.
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Improvements
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11.1
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Each
of the parties shall communicate to the other a full description of any
Improvements immediately on becoming possessed therewith from time to time
during this Agreement.
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11.2
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Upon
the granting of any patents to the Licensor in respect of Improvements
developed by the Licensor, the Licensee shall be deemed to have acquired
for the duration of such patents in the Territory the right to use and
exploit such Improvements and shall, at its request in writing and at its
costs, be entitled to receive written evidence from the Licensor of the
terms and conditions of such license in such form as is registrable at any
facility provided for same in any country in the
Territory.
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11.3
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Upon
the granting of any patents to the Licensor in respect of the Improvements
developed otherwise than by the Licensor, Licensee shall be deemed to have
acquired a license for the remainder of this Agreement in the Territory on
the same terms as this Agreement, and shall at its request in writing at
its costs, be entitled to receive written evidence from the Licensor of
the terms and conditions on such license in such form as is registrable at
any facility provided for same in any country in the
Territory.
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- 6
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11.4
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Subject
to the rights of the Licensee set out in section 5, any Improvements
developed by the Licensor or the Licensee during the term of this
Agreement, and for five years thereafter, shall be the property of the
Licensor. Licensee and its employees shall execute all
documents necessary to assign such Improvements and the patents thereon as
otherwise contemplated in this
Agreement.
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12.
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Non-Competition and
Confidentiality
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12.1
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The
Licensee covenants and agrees that during the term of this Agreement and
until the expiry of the period of two years thereafter, it shall not,
directly or indirectly, individually or as a partner, joint venture,
agent, employee, officer, consultant, investor, lender, shareholder or
otherwise in any manner whatsoever:
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12.1.1
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enter
into any business or engage in any business in the Territory that competes
with the Licensor; and
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12.1.2
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competes
in any way with or have a financial interest in any business entity which
competes directly or indirectly with the business of the
Licensor.
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12.2
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Any
information which shall have been communicated by any party to another
party in confidence under this Agreement, or which by its nature ought to
be regarded as confidential, shall be treated by the recipient
as confidential unless and until any of the following events or
circumstances shall occur:
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12.2.1
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such
information is published by the communicating
party;
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12.2.2
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such
information is contained in a published patent specifications, or is in
the public domain or become generally known in the relevant
industry;
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12.2.3
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such
information is required to be disclosed by any government or regulatory
authority;
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12.2.4
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such
information is reasonable required to be disclosed by the Licensee in
order to raise financing for its business or in order for the Licensee to
pursue a public listing of its shares, directly or indirectly, on any
stock exchange.
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12.3
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The
parties agree that any violation of the foregoing covenants may cause
irreparable injury to the other or their affiliates and each party shall
be entitled, in addition to any other rights and remedies it may have at
law or in equity, to an injunction enjoining and restraining the other
from doing or continuing to do any such act and any other violations
or threatened violations of such
covenants.
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12.4
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Each
provision of the foregoing covenants is declared to constitute a separate
and distinct covenant and to be severable from all other such separate and
distinct covenants. If any of the capacities or activities
specified in this section l3 are considered by a court of competent
jurisdiction as being unreasonable, the parties agree that the said court
shall have authority to limit such capacities and activities as the court
deems proper in the circumstances.
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12.5
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If
any covenant or provision in this Agreement is determined to be void or
unenforceable in whole or in part, it will not be deemed to affect or
impair the enforceability or validity of any other covenant or provision
of this section l3, or any part
thereof.
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13.
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Events of
Default
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13.1
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Any
of the following shall constitute an Event of Default with respect to a
party in question (“Defaulting
Party”):
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13.1.1
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the
occurrence of an Event of Insolvency in respect of a Defaulting Party;
and
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13.1.2
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any
material default by a party in the performance or observance of any of its
obligations under this Agreement which is not cured within 30 days after
notice from any of the other party has been given to the Defaulting Party
specifying the nature of the default and requiring that the default be
cured.
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13.2
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Upon
the occurrence of an Event of Default, the Non-Defaulting Party (if not
also in default) shall have the right, in addition to any other remedies
available to it, to do one or more of the
following:
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13.2.1
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immediately
terminate this Agreement;
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13.2.2
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remedy
such default on behalf of the Defaulting Party, and also bring any action
at law or otherwise to be reimbursed by the Defaulting Party for any
monies expended to remedy such default and any other expenses incurred by
any Non-Defaulting Party together with interest at the Prime Rate plus 3%
per annum; and
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13.2.3
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bring
any action at law as may be necessary or advisable in order to recover
damages.
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14.
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General
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14.1
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Further
Assurances
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The
parties shall execute and deliver such further and other instruments,
agreements and writings to be done and performed such further acts and
things as may be necessary or desirable in order to give full effect to
the Agreement and every part of it.
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14.2
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Time of the
Essence
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Time
shall be of the essence of this
Agreement
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14.3
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Assignment
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This
Agreement is not assignable by the Licensor but may be assigned by the
Licensee to any party provided that the Licensee’s benefit and obligations
pursuant to this Agreement pass to the
assignee.
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14.4
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Notices
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Any
notice to be given in connection with this Agreement shall be given in
writing and shall be given by personal delivery, by registered mail or by
transmittal by facsimile addressed to the recipient as
follows:
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Li-ion
Motors Corp.
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0000
Xxxx Xxxxxxxx Xx #000
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Xxx
Xxxxx, XX 00000
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U.S.A.
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attention:
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Xxxxxx
Xxxxx, President
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To
the Licensee:
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Lithium
Electric Vehicle Corp.
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00
Xxxxxx Xxxxx XX
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Xxxxxxx,
XX
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X0X
0X0
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attention:
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Xxxxx
Xxxxxxx, President
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With copy
to:
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XxXxxx
& Company LLP
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000,
000 – 0 Xxxxxx XX
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Xxxxxxx
XX X0X 0X0
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attention:
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Xxxx
Xxxxxx
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or
to such other address, facsimile number or individual as may be designated
by notice given by either party to the other. Any notice given
by personal delivery shall be conclusively deemed to have been given on
the day of actual delivery and, if given by registered mail, on the third
business day following the deposit in the mail and, if given by facsimile,
on the day of transmittal. If the party giving any notice knows
or should reasonably know of any difficulties with the postal system which
might affect the delivery of mail, any such notice shall not be mailed but
shall be given by personal delivery or by
facsimile.
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14.5
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Entire
Agreement
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This
Agreement constitutes the entire agreement between the parties pertaining
to the subject matter of this Agreement and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties and there are no warranties, representations or
other agreements between the parties in connection with the subject matter
of this Agreement except as specifically set out in this
Agreement.
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14.6
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Amendment and
Termination
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This
Agreement shall terminate immediately and be of no further force and
effect, and the parties shall have no further obligation to each other
under this Agreement:
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14.6.1
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in
the event that the Xxxxx & Xxxxx, Inc. valuation report does not
conclude on a valuation amount for the License that is satisfactory to
both parties by June 15, 2010, or such other date as the parties may agree
to in writing; or
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14.6.2
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on
the happening of an Event of Default as contemplated in subsection
14.2.1.
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This
Agreement shall be amended only by the prior written agreement of the
parties.
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14.7
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Severability
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Each
provision of this Agreement shall be treated as separate and distinct and
in the event of any provision of this Agreement being declared invalid
such provision shall be deemed to be severable and all other provisions of
this Agreement shall remain in full force and
effect.
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14.8
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Headings
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The
division of this Agreement into articles, sections and subsections and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this
Agreement.
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14.9
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Applicable
Law
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14.10
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Force
Majeure
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In
the event that either party is delayed or hindered or prevented from the
performance of any covenant or obligation in this Agreement due to
strikes, lockouts, injunction or administrative court order, government
law or regulation which prevents or substantially interferes with the
performance of such covenant or obligation pursuant to this Agreement, or
riots, insurrections, martial law, civil commotion, war, flood or other
acts of God not within the control of the party that also prevents or
hinders the performance of the terms of this Agreement, then the time for
performance under this Agreement is extended
accordingly.
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LITHIUM
ELECTRIC VEHICLE.
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LI-ION
MOTORS CORP.
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CORP.
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/s/
Xxxxx Xxxxxxx
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/s/
Xxxxxx Xxxxx
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per: Xxxxx
Xxxxxxx
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per: Xxxxxx
Xxxxx
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- 10
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Schedule
“A”
LICENSED
INVENTIONS
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Country
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Title
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Patent/Patent
Application No.
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Filling/Issue
Date
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||||
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USA
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Battery
Management System
|
App#
61219442
|
|||||
|
USA
|
Formulation of Battery Chemistry
|
EFS#
61219431
|
|||||
|
USA
|
Energy
Efficient Xxxxxxxxx
|
Xxx#
00000000
|
|||||
|
XXX
|
Thermal
Management Systems
|
App#
61222364
|
- 11
-
Schedule
“B”
LICENSED
TRADEMARKS AND TRADENAMES
|
Country
|
Title
|
Trademark/Trademark
Application No. or
Trade name
|
Filling/Issue
Date
|
||||
|
USA
|
Li-ion
Motors Corp.
|
77902109
|
12/29/2009
|
- 12
-
