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EXHIBIT 10.11
LICENSE AGREEMENT
(EXCLUSIVE - AUSTRALIA, NEW ZEALAND & NEW GUINEA)
PREAMBLE
The parties to this Agreement are XXXXXX X. XXXXXXXXX of 000 Xxxxxx Xxx Xxxx XX
00000 ("Mr Gunnerman") and A-55, L.P., a Nevada limited partnership ("A-55"),
and X-00 Xxxxxxxxx Ltd. (ACN 076 598 475), a corporation formed pursuant to the
laws of Australia ("Grantee").
This Agreement shall become effective on the date payment is made by Grantee of
the initial installment of the technical transfer fee pursuant to paragraph
3.2.1 below.
This Agreement is made with reference to the following facts:
A. Mr Gunnerman and/or A-55 owns the rights to transfer to others the
rights to certain worldwide patent applications, issued patents and
trademarks, and valuable technology, know-how, trade secrets and
prototypes which relate to and/or use an aqueous fuel comprising a
mixture of water and carbonaceous material for combustion in an internal
combustion engine and the use thereof, including technologies as set
forth in the patent applications and issued patents as more fully defined
below ("A-55 Clean Fuels").
B. Grantee desires to be licensed to use such rights and information from
A-55 within a geographical territory.
C. A-55 manufactures, distributes and sells the Additives.
D. A-55 has agreed to sell the additives to the Grantee so that the Grantee
can distribute and sell (either itself or under license to others) A-55
Clean fuels throughout the Territory on the terms and conditions set out
in this Agreement.
Now, therefore, in consideration of the mutual promises and covenants, and upon
the conditions herein contained, the parties agree as follows:
1. DEFINITIONS.
In this Agreement, the following terms shall have the following meanings:
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1.1 "Additives" means the package of additives required in order to
manufacture A-55 clean fuels.
1.2 "Fuel" means any fuel for which a royalty is payable under the terms
of this Agreement.
1.3 "Net Sales" means the gross Selling Price of Fuel and all other A-55
Products for which an invoice or like sales record has been prepared
by Grantee, or any sublicensee of or party or entity related to or
affiliated with Grantee, less any trade, cash or quantity discounts
actually allowed, transportation charges and sales or use taxes, if
any, included in the invoice price, and the price of any Fuel or
other A-55 Product returned.
1.4 "Selling Price" means the amount regularly charged for Fuel from
time to time by Grantee to third parties. Grantee shall
independently and exclusively determine its Selling Price.
1.5 "Territory" means The Commonwealth of Australia, The Commonwealth of
New Zealand and Papua New Guinea.
1.6 "A-55 Patent" means all present and future patents and applications
of A-55 filed (including without limitation A-55 improvements
insofar as patent applications have been made in respect thereto) in
the Territory (including without limitation the A-55 U.S. Patent No.
5,156,114, issued December 10, 1992, and Australian patent No.
654,941, issued March 23, 1995) insofar as they relate to A-55 Clean
Fuels and the processes pursuant to which A-55 Clean Fuels are made
and all divisions, continuation, continuation in part, supplemental
disclosure and reissues thereof and thereto.
1.7 "A-55 Clean Fuels" means all and any crude oil or natural gas based
aqueous fuel emulsion used for any purpose whatsoever (including,
without limitation, for use in internal combustion engines and in
open flame applications but not for aviation) manufactured or
capable of being manufactured utilizing any of the Technology and/or
A-55's Improvements (or any, combination of them).
1.8 "A-55 Processes" means any process or procedure to produce the A-55
Clean Fuels (or any other product claim of the A-55 Patent) and the
process or procedure to operate the equipment used to manufacture
A-55 Clean Fuels.
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1.9 "A-55 Know-how" means proprietary information of a confidential
nature owned by A-55 relating to the techniques available for
commercial exploitation of A-55 Clean Fuels (including without
limitation the subject matter of any A-55 Patent if no patent should
issue thereon) and any A-55 Processes.
1.10 "Technology" means all know-how, trade secrets, confidential
information, and expertise including, but not limited to, designs,
plans, specifications and all other information and documentation,
whether patentable or not, relating to A-55 Clean Fuels. Unless the
context requires otherwise, the term "Technology" shall include the
A-55 Patent rights, the A-55 Processes, and the A-55 Know-how.
1.11 "X-00 Xxxxxxxxx" xxxxx Xxxxxx Xxxxxx registered trademark number
1,848,044 and any identical or substantially similar trademarks
which may be obtained by A-55.
1.12 "A-55 Product" means any product sold by Grantee associated with
the grant of this license. It is intended by the parties that this
term shall have the broadest meaning and not in any way be limited
to products which are capable of patent or contractual protection.
By way of example but not limitation, the term would include any
product bearing, utilizing or referring to the A-55 Trademark,
clothing, pens, souvenirs, and the like.
1.13 "Grantee" means X-00 Xxxxxxxxx.
2. GRANT OF PATENT AND KNOW-HOW RIGHTS TO GRANTEE
2.1 Grant. A-55 hereby grants to Grantee:
2.1.1 The right under the A-55 Patent to manufacture, sell,
distribute and use A-55 Clean Fuels in the Territory and the
right to practice any A-55 Process necessary for such
manufacture or sale in the Territory.
2.1.2 The right to use A-55 Know-how in the Territory.
2.1.3 The right to practice any and all A-55 Technology in the
Territory, and the right to allow its purchasers to practice
any and all A-55 Technology and patent rights in the
Territory.
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2.2 Patent Marking. Grantee shall, where possible, xxxx fuel produced
under any patent licensed hereunder with the number of the
applicable patent.
2.3 Excluded Applications. All aviation applications, including the
supplying of fuel for such applications, are excluded from this
license and specifically reserved to A-55.
2.4 Licenses to OEMs.
2.4.1 A-55 reserves the sole and exclusive right to negotiate
license agreements with original equipment manufacturers.
Grantee acknowledges that such licenses may be worldwide and
may include the right to utilize and practice the Technology
in the Territory. The grant of any such license to an OEM
shall not infringe on the grant of this license; provided,
however, that royalties for the use and practice of the
Technology within the Territory under such a license shall
inure to Grantee.
2.4.2 Any License granted to an original equipment manufacturer as
contemplated in subparagraph 2.4.1, must not permit it to
manufacture A-55 Clean Fuels in the Territory, whether for
distribution or sale or for its own consumption.
2.5 Nature of Grant.
2.5.1 Grantee acknowledges that, incident to the dissolution of
Advanced Fuels, L.L.C., Caterpillar Inc. retained licensed
rights to the Technology for use in products of the kind it
produces or will produce in the Territory. Except as otherwise
provided in paragraphs 2.2, 2.3 and 2.4, A-55 shall grant no
other license to the Technology in the Territory while this
Agreement is in force and not in default.
2.5.2 Pursuant to retained license rights, Caterpillar may sell, but
not license until October 24, 2001, a diesel emulsion based
aqueous fuel emulsion and may make, but not license, a naphtha
fuel emulsion for Caterpillar engines only.
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2.6 Sublicenses. Subject to the express approval of A-55, first had and
obtained on each occasion, Grantee shall have the right and
obligation to grant sublicenses under this Agreement. Unless waived
by A-55, such sublicense that relates to the manufacture of Fuel by
the sublicensee shall, in addition to other pertinent provisions,
contain provisions for payment of royalties of an amount not less
than that specified in paragraph 3.1 below to Grantee, who shall
hold the same in trust for payment to A-55 to make some other
stipulation which is acceptable to A-55 to compensate A-55 for the
loss of such royalties (either direct with A-55 or with the
sublicensee).
2.7 Ampol. A-55 acknowledges that the Grantee is negotiating the grant
of a sublicense to Ampol Petroleum Pty. Ltd. (ACN 000 032 128)
("Ampol") relating to the manufacture, distribution and sale of A-55
Clean Fuels in the Commonwealth of Australia and that A-55 hereby
expressly approves Ampol as an appropriate sublicensee upon terms
and conditions not inconsistent with this Agreement.
2.8 Purchase and Sale of Additives
2.8.1 A-55 shall sell and deliver in a timely manner to the Grantee
or the grantee's order such quantities of the Additives as the
Grantee shall order from time to time.
2.8.2 The initial price of the surfactant (which shall exclude for
these purposes any cetane enhancer or methanol) to Grantee
will be US$8.00 per gallon plus all freight and transportation
costs. That price is fixed for 6 months from the date that
this License agreement comes into operation. The price of the
surfactant may be reviewed and adjusted by A-55 from time to
time after the initial period of six months. Any increase in
price must be fixed by A-55 in good faith by reference only to
increases in raw material costs of the surfactant. In any
event, A-55 may not charge Grantee a higher price for
surfactant than that charged by it at that time to any other
of its licensees outside the USA. Any increase in price will
operate on orders placed after notification."
2.8.3 The Grantee shall pay the price for the additives sold and
delivered within Thirty (30) days after delivery of the same
to the Grantee (or by its order)
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2.8.4 The additives must be of a merchantable quality and fit for
their intended purpose.
2.8.5 Property and risk in the additives pass to the grantee on
dispatch from A-55's premises
2.8.6 The obligation to supply the Additives set forth in this
paragraph shall continue for a period of 20 years after the
termination referred to in clause 12.1.1
2.9 TransAdelaide In the event that the field tests to be conducted in
South Australia are not successful then Grantee may within 14 days
of the completion of those tests at its option elect to terminate
this Agreement by notice in writing to A-55. In this paragraph the
"success" of the field tests shall be measured by reference to the
criteria set out in clause 8 and 9 of a Memorandum of Understanding
between the Minister of Transport and A-55 dated 22 November 1996
without any account being taken of matters (except Technological
matters) beyond the control of A-55 (including but without
limitation strikes boycotts or other bans or limitations). Upon
termination A-55 shall refund to Grantee all moneys paid by it
pursuant to paragraph 3.2. The refund of the moneys shall be in full
and final settlement of all claims actions and demands which the
Parties may have in relation to any matters arising out of this
Agreement.
3. PAYMENTS FOR RIGHTS GRANTED UNDER PARAGRAPH 2.
3.1 Continuing Annual Royalty. For the rights granted under paragraph 2
above, Grantee shall pay to A-55 a royalty of 0.5% of the Net Sales
from all Fuel and A-55 Products in the Territory.
3.2 Initial Payment. As initial consideration to A-55 for the rights
granted herein, Grantee shall pay to A-55 an initial payment of Five
Million Dollars (US$5,000,000.00) payable in Three (3) installments
as follows:
3.2.1 US$500,000.00 on the signing of this Agreement; and
3.2.2 US$2,000,000 on or before September 8, 1997;
3.2.3 US$2,500,000 on or before March 1, 1998;
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provided, however, that all cash moneys received by the Grantee
prior to September 30, 1997, pursuant to any sublicense,
distribution agreement, or the like, shall forthwith be paid to A-55
in reduction of the amounts referred to in this paragraph 3.2.
3.3 Equity Interest in Grantee. Contemporaneously with the payment of
the moneys referred to in subparagraph 3.2.1, and in consideration
of the grant, of this license and incident to the formation of
Grantee, Grantee shall deliver to A-55 a share certificate
evidencing the allotment to it of thirty percent (30%) of the issued
shares in Grantee deemed fully paid. In this regard 250,000 ordinary
shares of AUS$0.25 shall be applied at par for and allotted to A-55
in the capital of A-55 Holdings Ltd (the parent company of the
Grantee)
4. DISCLOSURE AND CONFIDENTIALITY OF KNOW-HOW
4.1 Disclosure. Within thirty (30) days after the effective date of this
Agreement, A-55 shall use its best efforts to disclose to Grantee
all of the technology it possesses relating to the manufacture, use
or sale of A-55 Clean Fuels, which is required by Grantee to
exercise and exploit its rights hereunder. Such disclosure shall
include design, engineering and manufacturing information and
specifications, including without limitation: identification of
commercially-available equipment (and the name of the manufacturers
thereof) required or useful in the production of the fuels,
engineering drawings of special equipment designed by or for A-55
required or useful in the production of the fuels, process
operations and parameters for the production of the fuels, and
quality control tests relating to the production of the fuels. It is
understood by Grantee that the foregoing obligation of disclosure
shall not include any obligation to disclose composition of the A-55
Clean Fuels surfactant package, which will be made and distributed
solely and exclusively by A-55 but which will be sold to Grantee for
its use in the manufacture of the A-55 Clean Fuels.
4.2 Confidentiality. Grantee agrees to use reasonable efforts to
maintain as confidential A-55 Clean Fuels Know-how disclosed to it
pursuant to paragraph 4.1, provided that:
4.2.1 All information in whatever form transmitted to Grantee from
A-55 shall be presumed to be Confidential Know-how unless
expressly identified to the contrary.
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4.2.2 Grantee shall not be required to treat as confidential any
A-55 Clean Fuels Know-how which is
(a) publicly disclosed by A-55, or disclosed to another
party by A-55 without a confidential restriction,
including disclosure by A-55 in any patent,
published patent application, any other writing or
verbally disclosed by A-55; or
(b) publicly available prior to its disclosure by A-55,
or which becomes publicly available after
disclosure by A-55 through no fault of Grantee; or
(c) known to Grantee prior to its disclosure by A-55;
or
(d) disclosed to Grantee by a third party who did not
acquire the information directly or indirectly from
A- or
(e) independently developed by an employee or
consultant of Grantee subsequent to disclosure by
A-55 but who did not have knowledge of the
disclosure made by A-55; or
(f) considered, in the opinion of Grantee's attorneys,
material prior art required to be disclosed to the
United States Patent office if Grantee files a
patent application on any of its modifications,
variations or improvements in accordance with
subparagraph 9.3 hereof; or
(g) required to be disclosed to any local, state or
federal agency in connection with a proper and
lawful request, law or regulation; provided,
however, that prior to any such disclosure, Grantee
shall give notice of such request to A-55, which
shall have a reasonable opportunity to apply for
such orders as it may deem appropriate to protect
its interests.
4.2.3 Grantee will maintain internal procedures to protect any A-55
Clean Fuels Know-how that is to be treated as confidential
within paragraph 4.2 in the same manner in which it protects
its own confidential technical
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information and will cause its authorized representatives to
execute a Confidential Disclosure Agreement in the form of the
attached Exhibit A.
4.2.4 A-55 represents and warrants that the information it
identifies in accordance with paragraph 4.2.1 is confidential
information and that it treats it as such.
5. GRANT OF RIGHTS UNDER TRADEMARKS
5.1 Grant. Subject to the due execution and registration of a User
agreement in a form approved by X-00, X-00 hereby grants to Grantee,
and its sublicensees and distributors, the right to use the A-55
Trademark, together with any other trademark that A-55 may acquire
in connection with its sale of A-55 Clean Fuels to third parties,
and to use the name "A-55" in a corporate name, division name, or
other name of any entity it may establish for the manufacture or
distribution of A-55 Clean Fuels. Should "A-55" not be trademarked
in any jurisdiction within the Territory, Grantee shall have the
obligation to do all things necessary to obtain such trademark and
register any related design or logos at its cost and to hold the
same for the sole and exclusive benefit of A-55. As used herein, the
term "A-55 Trademark" shall refer to any trademark or related design
obtained by Grantee hereunder.
5.2 Marking. Grantee shall xxxx the A-55 Trademark when used with an (R)
to denote its registration.
5.3 Use of Trademark. Grantee acknowledges that any use by it of the
A-55 Trademark shall inure to the exclusive benefit of A-55. Grantee
shall use the A-55 Trademark only in a manner approved and directed
from time to time by A-55. In connection with such use, Grantee
shall comply with all trademark notice, registered user, and other
requirements to maintain the validity of the A-55 Trademark
registration in the Territory. Grantee shall not make any use of the
A-55 Trademark that would misrepresent to the public that Grantee
rather than A-55 is the owner of such xxxx or the registration
thereof.
5.4 Quality Standards. A-55 shall establish product specifications or
quality standards of Fuel to be sold under either of the above
trademarks, and Grantee agrees that its products using either
trademark shall comply therewith to ensure that A-55's trademarks
are being property protected. A-55 may from time to time require
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Grantee to ship actual production samples of Fuel to A-55 for
inspection and testing to ascertain compliance with such produce
specifications or quality standards. In order to ensure high and
consistent quality of the A-55 Clean Fuels, Grantee shall
manufacture and blend all A-55 Clean Fuels which it distributes
pursuant to this License with standard blending equipment sold to it
by A-55 unless the use of other equipment is approved in advance by
A-55.
5.5 Price. There shall be no additional royalty for the license under
the above trademarks.
6. TIME AND MANNER OF PAYMENTS.
6.1 Time for Payments. Payments required under subparagraph 3.1.1 shall
be made within fifteen (15) days following the last day of each
calendar quarter for Net Sales by Grantee and for Fuel used by
Grantee during the preceding calendar quarter.
6.2 Manner of Payments. Payments shall be made by certified or
registered mail to A-55's address as specified herein accompanied by
a written report signed by an authorized representative of Grantee
setting forth the dollar amount of net Sales or quantity of Fuel
used as to which a royalty is payable for each quarter.
6.3 Overdue Payments. Payments shall, when overdue, bear interest at an
annual rate of one percent (1%) above the prime rate of Citibank in
effect in New York City on the last day payment was due. In no event
shall the interest so charged exceed the legal limit that may be
charged for interest.
7. RECORDS, INSPECTION, AUDITS AND REPORTS
7.1 Records. Grantee shall keep true and accurate records and books of
account showing the use and/or practice of the Technology, and the
manufacture, marketing, use and/or sale of Fuel by Grantee, and all
other information necessary for the accurate determination of the
payments to be made to A-55 hereunder.
7.2 Inspection. It is a condition of this license, and Grantee
represents and guarantees, that it will permit a mutually acceptable
firm of certified public accountants as representatives of A-55 to
inspect and audit, at reasonable times during Grantees usual
business hours, any and all parts of the records kept by Grantee
pursuant to this
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paragraph 7 which are required to be rendered by Grantee herein, and
to make excerpts from such records. In the event that Grantee and
A-55 are unable to agree on a mutually acceptable firm of certified
public accountants it is hereby agreed that such inspection and
audit may be performed by the certified public accounting firm of
Coopers & Xxxxxxx, whose principal offices are now at New York City,
New York. All fees of any such firm for such inspection and audit
shall be paid by A-55 except in the event of a discrepancy described
in paragraph 7.3 below, in which case Grantee shall pay such fees.
7.3 Discrepancy Expenses. In the event any audit performed by A-55
results in a finding that there is a discrepancy in excess of five
percent (5%) between the amounts paid to A-55 and the amounts which
should have been paid to A-55, the cost of such audit shall be borne
entirely by Grantee.
7.4 Retention of Records. Grantee's obligation to retain records and
A-55's right to inspect and audit and make excerpts with respect to
the records for each year in which royalty payments are due, in the
absence of a charge of fraud or intentional misrepresentations,
shall terminate three (3) years after the end of each such year to
which such records pertain.
8. REPRESENTATIONS AND WARRANTIES
8.1 Grantee represents and warrants that:
8.1.1 Organization, Standing, etc. A-55 Australia is a company duly
incorporated and in good standing under the laws of Australia
and has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now
conducted, and as proposed to be conducted, to enter into this
Agreement, and to carry out the provisions hereof.
8.1.2 Qualification. A-55 Australia is duly qualified to do business
in the Territory.
8.1.3 Challenged Validity. If Grantee should challenge the validity
or enforceability of the A-55 Patent licensed under this
Agreement, in whole or in part, A-55 may at its unfettered
discretion, by notice in writing, terminate this License.
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8.1.4 Business Plan. Grantee shall within thirty (30) days of the
date of this Agreement prepare and submit for approval to A-55
A business and financing plan for the use and exploitation of
the Technology in the Territory. The approval of this plan by
A-55 shall not be unreasonably withheld. Grantee shall expend
its best efforts to implement or exceed the business plan and,
during the term of this Agreement to exploit and commercialize
the Technology within the Territory to the fullest extent
commercially possible.
8.2 A-55 represents and warrants that:
8.2.1 Organization, Standing, etc. A-55 is a limited partnership
duly organized, validly existing, and in good standing under
the laws of the State of Nevada and has all requisite power
and authority to own and operate its properties, to carry on
its business as now conducted and as proposed to be conducted,
to enter into this Agreement, and to carry out the provisions
hereof.
8.2.2 Qualification. There is no jurisdiction wherein the character
of the properties owned by A-55 or the nature of the
activities conducted by A-55 makes necessary the licensing or
qualification of A-55 as a foreign partnership therein, in
which it is not so licensed.
8.2.3 Disclosure. Neither this Agreement nor any document,
certificate, or statement referred to herein or furnished to
Grantee pursuant hereto contains any untrue statement known to
A-55 of a material fact or omits to state a material fact
necessary to make the statements contained herein and therein
not misleading.
8.2.4 Ownership of Patent, etc. A-55 warrants and represents that Mr
Gunnerman is the sole and exclusive owner of the entire right,
title and interest in and to the A-55 Patent, and any reissues
or extensions of such Patents, and will be the sole and
exclusive owner of all patent improvements thereto which it
makes, in each case free and clear of all liens, claims,
charges, pledges, mortgages, security interests and other
encumbrances, and that A-55 has the full and sole right, power
and authority to enter into, consummate and perform the
transactions and
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obligations contemplated by this Agreement. Mr Gunnerman
executes this Agreement as the owner of the A-55 Patent for
the sole purpose of confirming A-55's rights hereunder.
8.2.5 No Conflicting Agreements. A-55 has not entered into any
agreement or understanding, written or oral, regarding the
Technology, any patent improvement thereof, or any know-how
licensed hereunder, which is in conflict or inconsistent with
any of the terms and conditions of this Agreement.
8.2.6 Validity. A-55 warrants and represents that it is not aware of
any law or facts which would permit any person or entity to
challenge the validity or enforceability of the patent rights
granted herein.
8.2.7 Infringement. The A-55 Patent, all patent improvements, and
know-how as now practiced by A-55 and all of its current
licensees do not to A-55's knowledge, violate, infringe or
conflict with the rights of any person, firm or government.
9. EXCHANGE OF TECHNICAL INFORMATION, MUTUAL TRANSFER
OF MODIFICATIONS, VARIATIONS, IMPROVEMENTS AND PATENT
PROTECTION.
9.1 Exchange of Technical Information. Each party hereto shall exchange
with the other in a timely manner all technical information acquired
during the term of this Agreement relating to the Technology and
developments with respect to same and will communicate to the other
all information and data obtained therefrom. Each party further
agrees that designated representatives of the other may, at
reasonable times, visit the laboratory, plants, and other
installations of the other in which research and operations relating
to Fuel, the A-55 Patent are being conducted.
9.2 Disclosure of Modifications. The parties shall promptly inform each
other in writing of any modifications, variations, or improvements
relating to Fuel, the A-55 Patent, and the know-how licensed
hereunder, which are developed by them or otherwise come to their
attention. It is expressly agreed that modifications, variations or
improvements disclosed to A-55 by any other licensee, grantee, joint
venturer, or any other party having the right to practice any rights
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licensed hereunder, shall, subject to any contractual obligations
imposed upon A-55 be disclosed to Grantee under the scope of this
subparagraph in a timely manner
9.3 Rights to Modifications. Notwithstanding which party hereunder shall
have discovered any modification, variation or improvement to the
Technology, all such modifications, variations or improvements shall
be owned solely by A-55; provided, however, that Grantee shall have
the right to use all modifications, variations and improvements,
whether patented or unpatented, made or acquired by A-55 during the
term of this Agreement without additional compensation to A-55. The
parties shall cooperate with each other in connection with the
filing of any patent applications relating to any such
modifications, variations or improvements.
9.4 Intellectual Property Protection. A-55 and Grantee agree to
diligently seek patent protection for all inventions, modifications
and improvements to the Technology in the Territory at Grantees
expense. A-55 may, at its own option, apply for patent protection
which is not pursued by Grantee, in which case the cost thereof
shall be borne solely by A-55 and all benefits therefrom shall be
solely owned by A-55 and not subject to the terms of this license;
provided, however, that Grantee may, within three (3) months of the
issuance of a patent to A-55, give A-55 notice of its election to
take rights under such patent by paying all costs and expenses of
A-55, together with interest thereon at one percent (1%) over the
prime rate charged by Citibank New York from time to time. Any
annual fees with respect to maintenance of patents or trademarks
within the Territory shall be paid by Grantee or, at the option of
A-55, paid by A-55 and reimbursed upon invoice.
10. INFRINGEMENT.
10.1 Notification of Infringement. Grantee and A-55 shall each notify the
other promptly in writing of any known infringement of the A-55
Patent, unauthorized use of any confidential know-how licensed
hereunder, or any infringement or unfair competition relating to a
trademark licensed hereunder, which either party learns of during
the term of this Agreement.
10.2 Litigation by A-55. A-55 shall have no obligation to xxx any such
infringers or competitors, but shall have the right to do so at its
own expense and the right to join Grantee and obtain Grantee's full
cooperation, if necessary, at no legal expense to Grantee. If A-55
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brings suit against an infringer or competitor, A-55 shall have the
sole right to control such lawsuit and to settle the same on terms
and conditions approved by A-55. All monetary and other recoveries
resulting from such a lawsuit or any settlement thereof shall belong
to A-55. A-55 shall not be required to have pending more than one
(1) suit for infringement of any patent licensed under this
Agreement.
10.3 Litigation by Grantee. If, after notice of any infringement of the
A-55 Patent or any other patent licensed hereunder, unauthorized use
of any confidential know-how licensed hereunder, or infringement or
unfair competition relating to a trademark licensed hereunder, A-55
(a) is unable to bring any such infringement or unfair competition
to a halt, or (b) fails to file and commence diligent prosecution of
a suit against such third party for patent infringement or unfair
competition, within six (6) months after A-55 learns thereof, then
Grantee may take any action it deems necessary to stop the
infringement or unfair competition, joining A-55 therein if
necessary but at no expense to A-55. Any recoveries made upon any
such suit shall belong solely to Grantee except for any award made
by the court in favor of A-55.
10.4 Actions by Third Parties. If during the term of this Agreement one
(1) or more third parties file suit in the Territory against Grantee
or any of its purchasers for patent infringement due to Grantee's or
any purchaser's manufacture, marketing, use, export or sale of Fuel
in the best modes contemplated by A-55 or in modes approved by A-55,
Grantee shall notify A-55 of such suit and tender defense thereof to
A-55. If A-55 refuses the defense of same, Grantee may at its option
elect to defend said suit. A-55 shall indemnify and hold Grantee
harmless from damages assessed against Grantee in any third party
infringement suit, but said indemnification shall be limited to an
amount equal to the payments made to A-55 by Grantee under the terms
of this Agreement.
10.5 Conduct of Defense. In the event that an action described in
subparagraph 10.4 is commenced against Grantee in any jurisdiction,
A-55 hereby authorizes Grantee to join A-55 in said action as either
an additional original defendant or third party defendant.
10.6 Declaratory Judgment. Grantee may elect to file a declaratory
judgment action against any third party referred to in subparagraph
10.4, in which event it will notify A-55 of its intention
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and tender the filing of any such suit to A-55. If A-55 refuses to
institute such declaratory judgment action against a third party,
Grantee shall have the option to institute such action. Further,
A-55 hereby authorizes Grantee to join A-55 as a plaintiff in any
such declaratory action.
11. CONSULTATION SERVICES
11.1 Consultation Services. During the currency of this Agreement A-55
shall in good faith promptly and regularly supply to the Grantee
(and to all the Grantee's sublicensees) within a reasonable period
of time such information, advice and assistance as grantee may
require in connection with the Technology.
11.2 All reasonable expenses incurred by A-55's personnel in dealing with
each such request, (including transportation and accommodation) are
to be met by the Grantee. A-55 may require that the Grantee fund
nominated and agreed expenses in advance.
12. TERMINATION AND CONSEQUENCES OF DEFAULT
12.1 Termination or Invalidity.
12.1.1 This Agreement shall terminate upon the expiration of
the A-55 Patent, in which event Grantee shall be
entitled to continue to exploit the rights granted under
this Agreement without the payment of any royalties to
A-55.
12.1.2 Upon a judgment of invalidity or unenforceability of the
A-55 Patent, Grantee shall be entitled to continue to
exploit the rights granted under this Agreement by
payment of the royalties specified in paragraph 3 if
Grantee continues to practice A-55 Know-how. Provided
such payments shall be payable by Grantee until
seventeen (17) years after the effective date of this
Agreement and Grantee shall then be entitled to exploit
the rights granted under this Agreement without payment
of any royalties nor initial payments to A-55.
12.2 Consequences of Default by Grantee. In the event of a default by
Grantee which is not cured in a timely manner as provided herein:
12.2.1 A-55 may, by written notice, terminate this license.
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12.2.2 At its option, A-55 may at its unfettered discretion
elect to continue this license but convert it to a
non-exclusive license within the Territory.
12.2.3 All unpaid sums due A-55 under paragraph 3.1 herein to
and including the effective date of any such default
shall be due and payable within thirty (30) days
thereafter.
12.3 Consequences of Default by A-55: In the event of a default by A-55:
12.3.1 Grantee shall be entitled to exploit the rights granted
under the terms of this Agreement and shall pay all
royalties which accrue hereunder to the independent
auditors named in paragraph 7.2 until such default is
resolved or cured, whereupon the funds so held shall be
dispersed in accordance with such resolution. The costs
of the auditors shall be borne equally by A-55 and the
Grantee.
12.4 General Consequences
12.4.1 Termination pursuant to subparagraph 12.1 or the
consequences of default as specified in subparagraphs
12.2 or 12.3 shall not relieve either party of any
obligations due to the other under the terms of this
Agreement to and including the date of termination or
the effective date of any such default.
12.4.2 In no event will default operate to release Grantee or
A-55 from any damages, costs and expenses that may be
due as a result of such default.
12.4.3 Either of the parties hereto shall have the right to
give public notice of any termination or default in such
manner and at such times and places as it may deem
advisable.
12.5 In the event of termination of this license for whatever reason,
Grantee shall at the request of A-55, deliver to A-55 all papers,
drawings and other documents, samples, and models relating to any
matters that are the subject of this Agreement, shall execute such
documents as are reasonably requested by A-55 and shall cease to
exploit the rights granted under the terms of this Agreement.
Without limiting the activities which shall cease upon such
termination, Grantee shall remove all trademark designations from
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X-00 Xxxxxxxx; transfer any trademarks to A-55 which it has
acquired; change its name to delete reference to A-55; and transfer
to A-55 any related business names. The costs of any such delivery
shall borne by the defaulting party.
13. NOTICE OF OTHER LICENSE
A-55 shall notify Grantee of any license it may grant to an original
equipment manufacturer after the effective date of this Agreement which
does or could relate to any of the rights granted to Grantee hereby within
thirty (30) days of the effective date of each such license.
14. EVENTS OF DEFAULT, NOTICE OF DEFAULT, AND CURING THEREOF
14.1 Events of Default. A default shall occur hereunder if any one of the
following events shall occur:
14.1.1 Grantee fails to pay any sum due hereunder and such
default continues for thirty (30) days; or
14.1.2 Grantee fails to materially implement the business or
financial plan approved by A-55 or fails to exercise its
best efforts to commercialize the Technology; or
14.1.3 A party fails to perform or comply with any term hereof
which materially affects this License; or
14.1.4 A party files a voluntary petition for bankruptcy or any
similar relief under laws for the benefit of creditors;
a party is adjudged bankrupt or a receiver is appointed
by a court of competent jurisdiction, and such
adjudication is not vacated within thirty (30) days; or
an involuntary petition is filed for reorganization or
similar relief and is not dismissed or stayed within
sixty (60) days;
14.1.5 Any representation or warranty made in this License
proven to have been incorrect in any material respect
which significantly affects this License.
14.2 Notice of Default. Before any default is effective herein, the party
declaring the default shall provide the defaulting party with a
written notice specifying the claimed default. Such notice shall
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provide a period of thirty (30) days from the date of the notice
within which the defaulting party may cure such default.
14.3 Failure to Cure. In the event the defaulting party fails to cure any
default to the reasonable satisfaction of the other party within the
thirty (30) day period described in paragraph 14.2, the default
will, unless the other party specifies otherwise, become effective
on the last day of the thirty (30) day period, provided that if
either party in good faith denies there is a breach or default
(other than a breach or default for the nonpayment of money), such
party may within such thirty (30) day period submit the matter to
binding arbitration and in the event it is finally determined that a
breach or default has occurred, such party shall have thirty (30)
days from the date of determination to cure the same.
15. INDEMNITY AND DISCLAIMER
15.1 Indemnification by Grantee. Grantee shall defend, indemnify and hold
A-55 harmless from and against any action, claim, or liability based
on loss or damage to persons or property resulting from any acts or
omissions of Grantee, its employees, agents, officers, sublicensees,
distributors, or any other party in privity with Grantee in
connection with the performance of this License or the manufacture,
use and sale of Fuel or A-55 Products hereunder.
15.2 Indemnification by A-55. A-55 shall indemnify Grantee against any
and all loss, damage (including consequential damages), expense,
liability or other obligation related to any breach or untruth of
any representation or warranty hereunder or failure to perform any
covenant hereunder, including reasonable attorneys' fees. Without
limiting the foregoing, the indemnity of A-55 shall include any
damage, loss or the like related to improperly blended or formulated
surfactant package which is sold to Grantee pursuant to this
license.
16. NO ASSIGNMENT
Except for the purpose of amalgamation or reconstruction Grantee shall
have no right to assign or otherwise transfer this License or any of the
rights granted to or obligations imposed upon Grantee without the express
prior written consent of A-55. A-55 may assign this License or any of the
rights granted to or obligations imposed upon Grantee without approval of
Grantor.
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17. GENERAL PROVISIONS
17.1 Notices. Any notice required to be given under this Agreement shall
be in writing and shall be sent by certified or registered mail, or
its equivalent, postage prepaid, addressed to each party at the
address below or at such other address of which one party shall
notify the other in the same manner:
To A-55: A-55, L.P.
000 Xxxxxx Xxx
Xxxx, XX 00000
XXX
To Grantee: A-55 Australia, Ltd.
00 Xxxxx Xxxxxx
Xxxxxxxx, 0000
Xxxxx Xxxxxxxxx
17.2 Governing Law. This Agreement shall be governed by the law of
Nevada for performance in the Territory.
17.3 Arbitration. All disputes, differences, or questions between the
parties concerning the construction, interpretation, and effect of
this Agreement or of any clause herein contained or the rights and
liabilities of the parties, shall be settled by arbitration in
accordance with the Rules of Arbitration of the American
Arbitration Association by arbitrators appointed in accordance with
such rules; provided that either party shall have the right to
appeal the result of any such arbitration; and provided further
that arbitration under this subparagraph shall not apply to
disputes, differences or questions between the parties concerning
violations of United States Anti-Trust laws or regarding the
validity of the A-55 Patent or regarding the confidentiality of any
know-how licensed hereunder. Unless the parties otherwise agree,
the site for arbitration shall be Reno, Nevada.
17.4 No Affiliations. Nothing in this Agreement shall be construed to
create between the parties a partnership, association, joint
venture, or agency.
17.5 Prior Agreements; Amendments. This Agreement cancels and supersedes
all prior oral or written representations, agreements and
understandings between the parties with respect to the subject
matter hereof, and embodies all of the understandings and
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obligations between the parties with respect to the subject matter
hereof. This Agreement may be modified and amended at any time,
including the addition of new or deletion of existing know-how and
technology pertinent to the rights transferred under this
Agreement, provided that no agreement or modification or extension
of this Agreement shall be binding upon any of the parties hereto
unless made in writing and signed by both parties.
17.6 Waivers. Failure of either party to require strict performance of
any term of this Agreement shall not affect that party's right to
fully enforce the same, nor shall any waiver of a default be
construed to be a waiver of any succeeding default.
17.7 Provisions Severable. If any term or provision of this Agreement
shall be held or adjudged illegal, invalid, or unenforceable by any
court having jurisdiction, such shall not affect the validity of
any other term or provision hereof, and any such illegal, invalid,
or unenforceable term or provision shall be deemed to be severable
and shall be deleted from this Agreement. A-55 agrees to send
Grantee notice within thirty (30) days after the date any term or
provision of this Agreement is adjudged illegal, invalid or
unenforceable.
17.8 Binding Agreement. This Agreement shall be binding upon and inure
to the benefit of the parties, their successors and signs to the
extent this Agreement is assignable by its terms.
17.9 Authority to Contract; Counterparts. Each of the parties covenants
that this Agreement is executed under authority duly granted by its
board of directors. The Agreement has been signed in two (2)
counterparts, one for each party, each of which shall be deemed to
be an original.
17.10 Costs of Litigation. In the event of any dispute arising as the
result of the breach or alleged breach of any term of this
Agreement other than a dispute described in subparagraph 8.1.3
hereof, if such dispute is taken by either party to arbitration or
to any court, the successful party in any such arbitration or court
action shall be entitled, in addition to any damages suffered, to
receive its actual costs of arbitration or suit including, without
[limiting the generality of the foregoing, attorneys' fees,
experts' fees, the cost of exhibits and the preparation thereof,
and all other costs reasonably incident to such arbitration or
court action.
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17.11 Financial Statements. During the term hereof, Grantee shall furnish
A-55 annually with an annual report and a copy of the 10-K
statement of its parent, if any. A-55 shall provide to Grantee a
full set of its annual financial statements in a timely manner
provided that all such information shall be deemed to be
"confidential" to A-55 and subject to the provisions of the
Agreement relating to "confidentiality"
17.12 Injunction. The parties hereto acknowledge that the damages for any
breach of this Agreement by either party relating to any matter
other than the payment of money would be incapable of precise
determination and would cause the nondefaulting party irreparable
harm. Accordingly, each party accepts the other party's right to
obtain an injunction to prevent any further breach of the Agreement
should the nondefaulting party deem it necessary to do so.
17.13 Headings. Caption headings are for convenience of reference only.
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In witness whereof, the parties have signed this Agreement as of the date
appearing above their respective signatures.
DATED: March 4 , 1997.
-----------------------
A-55, L.P., a Nevada limited
partnership by RWG, Inc., a
Nevada corporation
By /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxxx X .Xxxxxxxxx,
President
Signed by
Xxxxxxx X. Xxxxxxxxx
By /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxxx,
A-55 Australia Ltd (ACN 076 598 475)
a company incorporated in Australia
By /s/ Xxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxxx
Director
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