EXHIBIT 10.64
LICENSE AGREEMENT
THIS LICENSE AGREEMENT ("Agreement"), entered into and effective as of the 1st
day of August 2000, by and between Xxxxxxx Xxxxxxx, an individual, ("Licensor")
and Karts International Incorporated, a Nevada corporation ("Licensee"):
WITNESSETH THAT:
WHEREAS Xxxxxxx Xxxxxxx is the Owner of the "Technology" as defined below, and
WHEREAS Licensee desires to obtain from the Licensor a license under said
Technology;
WHEREAS both parties acknowledge the expiration of that certain license
agreement dated the 15th day of March, 1996 as amended by Addendum "A" to
License Agreement dated the 15th of March, 1997 between Licensor and Licensee;
WHEREAS both parties acknowledge that there is earned, yet unpaid royalties of
forty thousand dollars ($40,000.00 U.S.) due to Licensor under the above
referenced license agreement which will be paid in full at the time of signing
of this agreement.
WHEREAS both parties represent that they are able to comply with and otherwise
satisfy the terms and conditions set forth in this Agreement;
NOW THEREFORE, in consideration of the sum of ten dollars ($10 U.S.) and other
good and valuable consideration now paid by each of the parties hereto to the
other, the receipt of all of which hereby irrevocably acknowledged by each
party, it is agreed as follows:
SECTION 1
DEFINITIONS
1.1 "Patent Rights" shall mean collectively: (a) United States Patent
Number 5,477,940, issued December 26, 1995, for "Accelerator Pedal Override
Apparatus for Self-Propelled Motorized Cart with Aligned Brake and Accelerator
Pushrod Type Operator Pedals" ("Pedal Override"), and (b) United States Patent
Number 5,328,011 issued July 12, 1994, for "Clutch Assembly for Chain-Driven
Cart ("Clutch Lube"), and (c) applications for patents that have been filed or
may be filed in the future for improvements relating to the above two named
patents, the inventions described and claimed therein, and any divisions,
continuations, continuations-in-part, patents issuing thereon or reissues
thereof; and any and all foreign patents and patent applications corresponding
thereto; which will be automatically incorporated in and added to this Agreement
and shall periodically be added to Appendix A attached to this Agreement and
made a part thereof.
1.2 "Licensed Processes" shall mean the processes claimed in Patent Rights
or processes utilizing Proprietary Materials or some option thereof.
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1.3 "Licensed Products" shall mean products claimed in Patent Rights or
products made in accordance with or by means of Licensed Processes or products
made utilizing Proprietary Materials or incorporating some portion of
Proprietary Materials.
1.4 "Proprietary Materials shall mean the materials supplied by Licensor
together with any of the know-how and all related rights, trade secrets, and
Technology, owned by Licensor and relating to a family of go-kart products and
go-kart components as they presently exist and as they may be acquired,
developed or modified in the future.
1.5 "Technology" shall mean any and all confidential information,
Proprietary Materials, or Patent Rights supplied by Licensor to Licensee. The
confidential information shall not include information which: (a) is known to
Licensee on a non-confidential basis prior to disclosure by Licensor; or (b) is
part of the public domain and known to the general public at the time it was
disclosed to Licensee.
1.6 "Territory" shall mean the entire United States of America, its
territories and possessions, and foreign countries in which Patent Rights exist.
SECTION 2
GRANT OF LICENSE
2.1 Scope of License. Subject to the terms and conditions of this
Agreement, Licensor hereby grants to Licensee a License (the "License"):
2.1.1 to use the information or secrets disclosed in the Technology to
develop Karts International Incorporated, its affiliates, or its wholly-owned
subsidiaries' Licensed Products, hereinafter collectively referred to as KII
Licensed Products;
2.1.2 to incorporate the information or secrets disclosed in the
Technology in KII Licensed Products;
2.1.3 to manufacture or have manufactured KII Licensed Products
containing the information or secrets disclosed in the Technology;
2.1.4 to sell or have sold KII Licensed Products containing the
information or secrets disclosed in the Technology.
2.2 Non-Exclusive License. The License is a non-exclusive License in the
Territory for the Technology for KII Licensed Products.
2.3 License Term. The term of this License shall be for a period of three
years commencing on the Effective Date.
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2.4 Royalty. With regard to the licensing of the Technology as set forth in
Section 2 hereof, Licensee hereby agrees to pay to Licensor royalties as
follows: (i) the greater of $20,000 or the sum of a royalty of $1.00 for each of
the Licensed Products sold by Licensee or any of its affiliates or subsidiaries
containing or utilizing the Pedal Override during the period beginning August 1,
2000 and ending July 31, 2001, and a royalty of $0.50 for each of the Licensed
Products sold by Licensee or any of its affiliates or subsidiaries containing or
utilizing the Clutch Lube during the period beginning August 1, 2000 and ending
July 31, 2001, (ii) the greater of $20,000 or the sum of a royalty of $1.00 for
each of the Licensed Products sold by Licensee or any of its affiliates or
subsidiaries containing or utilizing the Pedal Override during the period
beginning August 1, 2001 and ending July 31, 2002, and a royalty of $0.50 for
each of the Licensed Products sold by Licensee or any of its affiliates or
subsidiaries containing or utilizing the Clutch Lube during the period beginning
August 1, 2001 and ending July 31, 2002, and (iii) the greater of $20,000 or the
sum of a royalty of $1.00 for each of the Licensed Products sold by Licensee or
any of its affiliates or subsidiaries containing or utilizing the Pedal Override
during the period beginning August 1, 2002 and ending July 31, 2003, and a
royalty of $0.50 for each of the Licensed Products sold by Licensee or any of
its affiliates or subsidiaries containing or utilizing the Clutch Lube during
the period beginning August 1, 2002 and ending July 31, 2003. Licensee shall
remit payment of accrued royalties on January 31 and July 31 of each year during
the term of this Agreement.
2.5 Implementation. Licensor and Licensee agree that Licensee (i) will
implement or integrate the information or secrets contained in the Technology
into the KII products and (ii) shall be the exclusive owner of such KII
products.
2.6 Sublicensing. Licensee shall have, with the written consent by the
Licensor, the right to sublicense developers of KII products to use the
information or secrets contained in the Technology for the sole purpose of
developing KII products to be owned by KII or any of its affiliates or
subsidiaries. The Licensee is not empowered by this clause to veto subsequent
licenses.
2.7 Rights Retained. All rights not specifically assigned to Licensee are
retained by Licensor.
SECTION 3
TITLE
3.1 Title to the Licensed Technology. Licensor represents and warrants that
it is the sole owner of all right, title and interest in and to the Technology,
except as otherwise provided in Appendix A, attached hereto.
SECTION 4
LIMITATIONS OF LIABILITY
4.1 Disclaimer. Except as specifically set forth herein, Licensor makes no
warranties, expressed or implied, regarding or relating to the Technology or to
any other materials or services furnished or provided to the Licensee hereunder.
4.2 Limitation of Liability. In no event shall the Licensor or any person
or entity involved in creating the Technology be liable under any claim, demand
or action arising out of or relating to performance or lack thereof under this
Agreement for any special, indirect, incidental, exemplary or consequential
damages, whether or not Licensor or such person has been advised of the
possibility or such claim, demand or action.
License Agreement - Page 3
4.3 Licensor represents and warrants that it has sufficient right, title
and interest in and to the Technology to enter into this Agreement, and further
warrants that the Technology does not, to the best of Licensor's knowledge,
infringe any patent, copyright or other proprietary right of a third party when
used as contemplated by this Agreement and that Licensor has not been notified
of a possibility that the Technology might infringe any patent, copyright or
other proprietary rights of a third party.
SECTION 5
TERMINATION
5.1 Termination by Either Party. Either party may terminate this Agreement
upon 30 (thirty) days written notice to the other party if the other party
commits a material breach of any term hereof and fails to cure said breach
within the 30 (thirty) day period. Such notice shall set forth the basis of
termination. A material breach is considered to be, but not limited to, the
following: (1) default of performance; (2) failure to meet payments; (3) failure
to provide reports and access to records; or (4) unauthorized disclosures.
5.2 Automatic Termination. If Licensee shall be adjudicated insolvent, is
the subject of an involuntary petition in bankruptcy not dismissed within the 60
days of the filing of said involuntary petition, or files a petition in
bankruptcy, or for reorganization, or if Licensee shall take advantage of any
insolvency act, or make an assignment for the benefit of creditors, then, and in
any such event, this Agreement shall forthwith terminate and the license herein
granted shall not constitute an asset in reorganization, bankruptcy or
insolvency which may be assigned or which may accrue to any court or creditor
appointed referee, receiver or committee.
5.3 Actions upon Termination. Upon termination of this Agreement for any
reason, Licensee shall immediately cease use of, and forthwith return to
Licensor the Technology and tangible manifestations or copies thereof and all
licenses theretofore granted by Licensee under this Agreement will be
transferred and assigned by Licensee to Licensor or to that person, firm, or
corporation Licensor designates for that purpose.
SECTION 6
MISCELLANEOUS
6.1 Assignment. Except as provided herein, Licensee shall not sell,
transfer, assign or subcontract any right or obligation hereunder without prior
written consent of the Licensor, provided however, Licensee may upon ten (10)
days written notice to, but without prior consent of the Licensor assign this
Agreement pursuant to:
6.1.1 the merger or consolidation of the Licensee; or
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6.1.2 the sale of substantially of all the assets of the Licensee to a
third party, provided the party remains fully liable for its obligation
hereunder and such third party agrees to be liable for the party's obligations
hereunder.
6.2 Successors and Assigns. The covenants and conditions herein contained
shall, subject to the provisions as to assignment, apply to and bind the
successors and permitted assigns of the parties hereto.
6.3 Dispute Resolution. The parties will conduct friendly negotiations to
resolve any dispute. Failing resolution, disputes will be finally resolved by
arbitration in Las Vegas, Nevada, pursuant to the Commercial rules of the
American Arbitration Association, by one arbitrator appointed in accordance with
such rules. The parties agree that any arbitral award and any matter requiring
injunctive or other provisional relief may be instituted and enforced in any
court having jurisdiction. In the event of any dispute between the parties
relating to this Agreement, the party substantially prevailing will be entitled
to recover all cost and expenses of any subsequent proceedings (including trial,
arbitration and appellate proceedings), including the attorney fees incurred
therein.
6.4 Choice of Law. The interpretation and construction of this Agreement
shall be governed by the laws of the State of Nevada.
6.5 Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be contrary to law, the remaining provisions of this
Agreement will remain in full force and effect.
6.6 Notice. Any notice required or permitted to be made or given by either
party under this Agreement shall be deemed to have been duly given if delivered,
postage prepaid, certified mail, return receipt requested:
If Licensor to: Xxxxxxx Xxxxxxx
000 Xxxxx Xxxx
Xxxxx, Xxxxxxxxx 00000
If Licensee to: Karts International Incorporated
Xxxx Xxxxxx Xxx 000
Xxxxxxxx, Xxxxxxxxx 00000
and/or to any such person(s) address(es) as either party shall have specified in
writing to the other.
6.7 Marking of Products. Licensee shall accordingly affix or cause to be
affixed proper statutory patent, trademark and/or copyright notices to each
apparatus made by Licensee under this Agreement.
6.8 Entire Agreement. The provisions herein together with the Appendix
attached hereto, constitute the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements, oral
or written, and all other communications relating to the subject matter hereof.
No amendment or modification of any provision of this Agreement will be
effective unless set forth in a document that purports to amend this Agreement
and that is executed by both parties hereto.
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6.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be an original and will be effective as of the
date set forth on the first page when signed on behalf of Licensor and Licensee.
IN WITNESS WHEREOF, the parties have caused this Agreement to be effective as of
the date first set forth above:
Xxxxxxx Xxxxxxx Karts International Incorporated
By: By:
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Title: Corporate Secretary
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Seal:
