TECHNOLOGY DEVELOPMENT
AND LICENSE AGREEMENT
This AGREEMENT is entered into effective as of October 28, 1999, between
FREEDOM MOTORS, INC., a Nevada corporation ("Freedom"), AEROBOTICS, INC, a
California corporation ("Aerobotics"), and MOLLER INTERNATIONAL, INC., a
California corporation ("Moller").
A. In February 1997, Moller caused Aerobotics, Inc., its wholly owned
subsidiary ("Aerobotics"), as consideration for the issuance to Moller of
7,000,000 shares of the common stock of Freedom, to transfer and assign to
Freedom certain products and equipment and to license to Freedom certain
technology.
B. The parties hereto desire (i) to transfer and assign, and reconfirm and
ratify any prior transfer and assignment, to Freedom of all right, title and
interest in and to certain equipment, products and other tangible assets, (ii)
to provide, and to reconfirm and ratify any prior provision, for the license of
certain technology and improvements, (iii) to provide for certain product
development services to be performed by Moller on behalf of Freedom, and (iv) to
provide for royalties to Moller in connection with sales of certain products or
the sublicense of certain technology and improvements by Freedom.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS. As used in this Agreement, the following capitalized terms
shall have the following meanings (unless the context requires otherwise):
1.1 Affiliate. The term "Affiliate" shall mean, with respect to a person or
entity, any corporation, partnership, joint venture, firm or other entity that
controls, is controlled by, or is under common control with, such person or
entity; provided, however, that, for purposes of this Agreement, Moller shall
not be deemed an affiliate of Freedom and Freedom shall not be deemed an
affiliate of Moller.
1.2 Charge Cooled Patent. The term "Charge Cooled Patent" shall mean any patent
to issue on that certain patent application entitled "Charge Cooled Rotary
Engine."
1.3 Confidential Information. The term "Confidential Information" shall mean all
business, technical and other information (including, without limitation, all
product services, financial, marketing, engineering, research and development
information, product specifications, technical data, data sheets, programs,
software, inventions, processes, know-how, mask works, designs, drawings and any
Documentation related thereto) disclosed from time to time by the disclosing
party to the receiving party pursuant to this Agreement either directly or
indirectly in any manner whatsoever (including, without limitation, in writing,
orally, electronically, in all types of disks, diskettes, computer memory,
storage or other media, or by drawings or inspection of physical items, and
whether or not modified or merged into other materials). The term "Confidential
Information" shall also include all analyses, compilations, studies or other
Documentation prepared by the disclosing party or its Representatives which
contain or otherwise reflect any Confidential Information.
1.4 Development Services. The research and development services to be provided
by Moller to Freedom as described in Exhibit A attached hereto.
1.5 Documentation. The term "Documentation" shall mean all written, recorded or
graphic matters whatsoever, including, without limitation, papers, books,
records, computer files, computer disks, lab books, drawings, designs,
schematics, source code, object code, correspondence, manuals, agreements,
brochures, publications, directories, industry lists, schedules, price lists,
statistical records, studies and other similar materials.
1.6 Freedom Intellectual Property. The term "Freedom Intellectual Property"
shall mean all Improvements invented, discovered or developed by Freedom during
the term of this Agreement, including any Improvements invented, discovered or
developed by Moller on behalf of Freedom in the course of performing the
services provided for by Article 3 hereof.
1.7 Improvements. The term "Improvements" shall mean all improvements,
enhancements, upgrades or other modifications invented, discovered or developed
by Freedom or Moller during the term of this Agreement that improve or enhance
the functionality, features, power, outputs, processes, efficiency or ease of
use of the Products or Technology.
1.8 Initial Royalty Period. The term "Initial Royalty Period" shall mean the
period during which the making, use or sale of Products is covered by one or
more claims under an unexpired U.S. patent deemed to be Moller Intellectual
Property for purposes of this Agreement, which claims have not been held invalid
or unenforceable by a court having competent jurisdiction for which any time for
appeal has expired.
1.9 Inventions. The term "Inventions" shall mean any and all inventions,
discoveries, ideas, technology, know-how, work product, concepts, material,
disclosures, software programs, computer languages, programming aids or any
other intellectual property or works of authorship (whether or not they are in
writing or reduced to practice or can be patented or copyrighted) that were
made, authored, conceived or developed by Freedom or Moller during the term of
this Agreement.
1.10 Moller Exclusive Field of Use. The term "Moller Exclusive Field of Use"
shall mean all uses related to aviation or ducted fan applications.
1.11 Moller Intellectual Property. The term "Moller Intellectual Property" shall
mean all Technology existing on the date hereof that is not useful solely within
the Moller Exclusive Field of Use and all Improvements invented, discovered or
developed by Moller during the term of this Agreement that are not useful solely
within the Moller Exclusive Field of Use. Notwithstanding the foregoing, Moller
Intellectual Property shall not include any Improvements invented, discovered or
developed by Moller on behalf of Freedom in the course of performing the
services provided for by Article 3 hereof, which Improvements shall be deemed to
be Freedom Intellectual Property.
1.12 Net Revenues. The term "Net Revenues" shall mean the gross revenues
actually received by Freedom or its Affiliates in connection with the sale or
lease of Products that incorporate or use Moller International Property in the
making, use or sale of such Products, less applicable sales, use, duties or
other excise or similar taxes, insurance charges, shipping, packaging and other
transportation charges, any returns and allowances actually allowed, and any
trade, quantity or cash discounts actually made.
1.13 Net Sublicense Fees. The term "Net Sublicense Fees" shall mean the gross
sublicense fees actually received by Freedom or its Affiliates in connection
with the sublicense of Moller Intellectual Property for the purpose of enabling
third parties to make, use or sell Products, less applicable sales, use, duties
or other excise or similar taxes.
1.14 Patent Rights. The term "Patent Rights" shall mean any and all patents,
utility models and patent applications, now or in the future, and any and all
continuations, continuations-in-part, divisionals, additions, reissues, renewals
or extensions thereof or thereto, and corresponding foreign patents and
applications, including, without limitation, those set forth on Exhibit B
attached hereto.
1.15 Products. The term "Products" shall mean all rotapower engine products.
1.16 Properties. The term "Properties" shall mean the Tangible Assets, Products
and Technology.
1.17 Tangible Assets. The term "Tangible Assets" shall mean the machinery,
furniture, vehicles, spare parts, fixed assets, tools, dies, computers,
inventory and other tangible assets set forth on Exhibit C attached hereto.
1.18 Technology. The term "Technology" shall mean all trade secrets, know-how,
show-how, Inventions, Patents Rights, formulae, processes, computer systems,
Confidential Information, expertise, copyrights, plans, drawings, sketches,
prototypes, tooling and other ideas, concepts and information of any nature
whatsoever that relate to, or are useful in connection with, the Products,
including, without limitation, technology related to the (i) combined thermal
barrier and wear coating for internal combustion engines, (ii) thermal barrier
coating for a rotor, (iii) utilization of a rotary engine's exhaust flow to
induce a rotor cooling airflow, (iv) phase change cooling, (v) tuned exhaust
system containing a muffler system specifically designed for rotary engines,
(vi) combined pilot and main injection nozzle, (vii) two-piece apex seal for
rotary engines that will eliminate end leakage and reduce the seal mass, (viii)
multi-fuel rotary engine, and (ix) maintenance of uniform cooling of the rotor.
1.19 Representatives. The term "Representatives" shall mean the directors,
officers, employees, agents, attorneys, accountants, financial advisors and
other representatives of a party hereto.
2. TRANSFER, ASSIGNMENT AND LICENSE.
2.1 Transfer and Assignment of Tangible Assets and Products. Moller and
Aerobotics hereby transfer, convey and assign (and reconfirm and ratify any
prior transfer, conveyance and assignment) to Freedom all of their right, title
and interest in and to the Tangible Assets and Products.
2.2 Grant of License to Moller Intellectual Property.
(a) Moller and Aerobotics hereby grant (and reconfirm and ratify any prior
grant) to Freedom an exclusive, worldwide, transferable right and license,
with the right to grant sublicenses, to use, make, have made, manufacture,
market, make Improvements on and otherwise commercialize and exploit in any
manner the Moller Intellectual Property for all uses other than uses within
the Moller Exclusive Field of Use.
(b) Freedom shall use its best efforts to complete the development of the
Products and to commercialize the Moller Intellectual Property through the
manufacture and sale of Products and/or the license of Moller Intellectual
Property. In the event that Moller believes that Freedom is not using such
best efforts, it shall give written notice to Freedom detailing the reasons
for such belief. If the parties are unable to resolve such dispute
regarding Freedom's use of best efforts within 90 days after Freedom
receives such written notice, such dispute shall be submitted to mediation
and arbitration pursuant to Section 10.8 hereof. If the dispute proceeds to
arbitration and the arbitrator determines that Freedom has not used its
best efforts, the license granted by Moller to Freedom pursuant to Section
2.2(a) hereof shall become a non-exclusive license.
2.3 Grant of License to Freedom Intellectual Property. Freedom hereby grants
(and reconfirms and ratifies any prior grant) to Moller an exclusive, worldwide,
transferable, fully-paid, royalty-free right and license, with the right to
grant sublicenses, to use, make, have made, manufacture, market, make
Improvements on and otherwise commercialize and exploit in any manner the
Freedom Intellectual Property for use solely within the Moller Exclusive Field
of Use.
3. RESEARCH AND DEVELOPMENT SERVICES.
3.1 Services. At Freedom's request, Moller shall provide, as deemed reasonable,
scientific and engineering personnel and expertise and use of a portion of its
facilities in order to assist Freedom in its effort to move the 53000 single
rotor engine into volume production. Any such personnel provided by Moller shall
at all times be deemed to be employees of Moller and not of Freedom. Services
provided by Moller to Freedom shall be reimbursed as follows: Direct wages plus
225% overhead; Materials plus 10%; and a G & A surcharge of 25% on the above
charges. Facility use will be charged at the pro-rata share of total facility
operating costs. Amounts to be reimbursed by Freedom shall not be payable until
the earlier of the closing of a financing or licensing transaction in which
Freedom receives gross proceeds of at least $1,000,000 or the termination of
this Agreement.
3.2 Technology Transfer. In carrying out such Development Services, the parties
agree to exchange such Tangible Assets, Technology and Documentation as may be
necessary for such purpose.
3.3 Recordkeeping. Each party shall maintain records in sufficient detail and in
good scientific manner appropriate for patent purposes and as will properly
reflect all work done and results achieved in the performance of the Development
Services.
3.4 License to Perform Services. Freedom hereby grants to Moller a limited,
non-exclusive, fully-paid, royalty-free, nontransferable right and license to
use the Freedom Intellectual Property solely for the purpose of, and to the
extent required in connection with, performing the Development Services.
4. ROYALTIES.
4.1 Sale or Lease of Products. Subject to the terms and conditions hereof, until
the expiration of the Initial Royalty Period, Freedom shall pay to Moller, on or
prior to 45 days after the end of each calendar quarter, a royalty payment in an
amount equal to 5% of the Net Revenues received during such calendar quarter for
Products sold or leased by Freedom or its Affiliates to parties other than
Freedom, Moller or any of their Affiliates. For five years following expiration
of the Initial Royalty Period, Freedom shall continue to make such royalty
payments in connection with such sale or lease of Products but the royalty
payments shall be reduced to equal 2% of the Net Revenues received. In addition,
until such time as the Charge Cooled Patent first issues in the U.S. and as
issued contains one or more valid and enforceable claims covering the making,
use or sale of Products, the royalty payments payable under this Section 4.1
shall be reduced to equal 2% of the Net Revenues received. All royalty payments
under this Section 4.1 shall be paid in U.S. dollars less any deduction for any
required government withholding and any amounts payable for any applicable sales
taxes, use taxes or similar taxes.
4.2 Sublicense of Moller Intellectual Property. Subject to the terms and
conditions hereof, until the expiration of the Initial Royalty Period, Freedom
shall pay to Moller, on or prior to 45 days after the end of each calendar
quarter, a royalty payment in an amount equal to 15% of the Net Sublicense Fees
received during such calendar quarter in connection with the grant by Freedom or
its Affiliates to parties (other than Freedom, Moller or any of their
Affiliates) of sublicenses to Moller Intellectual Property that authorize the
manufacture of Products by such sublicensees for use or sale by such
sublicensees. For five years following expiration of the Initial Royalty Period,
Freedom shall continue to make such royalty payments in connection with such
grant of sublicenses but the royalty payments shall be reduced to equal 10% of
the Net Sublicense Fees received. In addition, until such time as the Charge
Cooled Patent first issues in the U.S. and as issued contains one or more valid
and enforceable claims covering the making, use or sale of Products, the royalty
payments payable under this Section 4.2 shall be reduced to equal 10% of the Net
Sublicense Fees received. All royalty payments under this Section 4.2 shall be
paid in U.S. dollars less any deduction for any required government withholding
and any amounts payable for any applicable sales taxes, use taxes or similar
taxes.
4.3 Exceptions. No royalties shall be payable pursuant to Section 4.1 or 4.2
hereof (i) in connection with the use of Products or Moller Intellectual
Property by Freedom or its Affiliates for internal use, development, marketing
demonstrations, field testing, customer trial periods, training or education,
(ii) in connection with the grant of sublicenses to parties for the purpose of
manufacturing Products for sale to Freedom or Moller or their Affiliates, or
(iii) in connection with the sale or lease of Products that do not incorporate
or use Moller Intellectual Property in the making, use, or sale of such
Products.
4.4 No Multiple Royalties. Royalties shall be payable pursuant to either Section
4.1 hereof or Section 4.2 hereof but not both. In addition, only one royalty
shall be payable in connection with the making, use or sale of Products,
regardless of the number of patents with claims covering such making, use or
sale of Products.
4.5 Quarterly Report. On or prior to 45 days after the end of each calendar
quarter during the term of this Agreement, Freedom shall deliver to Moller a
written quarterly report detailing the calculation of the quarterly royalty
payment for such calendar quarter. Such quarterly report shall be certified to
be accurate by an officer of Freedom and shall contain such information in such
format as Moller may reasonably specify from time to time. Past due royalty
payments will bear interest at the lower of 10% per annum or the maximum rate
permitted by applicable law.
4.6 Books, Records, and Reports. Freedom shall keep complete, detailed and
accurate books and records with respect to all Net Revenues. Promptly after any
reasonable request therefor by Moller, Freedom shall provide to Moller (or
Moller's Representatives) such information, evidence, and/or reports regarding
such Net Revenues and Net Sublicense Fees (including without limitation such
information as is reasonably necessary in order to ascertain the accuracy of the
information provided in such quarterly reports), in such manner, form, and
substance as may be reasonably requested by Moller.
4.7 Adjustment of Royalties. In the event that products are sold or technology
is licensed, or products or technology are used, by a third party in substantial
competition with Products being sold by Freedom or its Affiliates, or Moller
Intellectual Property being sublicensed by Freedom or its Affiliates, and
Freedom establishes that, with respect to such products or technology, no
royalty or a lower royalty is being paid by such third party than that being
paid pursuant to Section 4.1 or 4.2 hereof, as the case may be, and such fact is
a material factor impacting the ability of Freedom or its Affiliates to sell
Products or sublicense Moller Intellectual Property at a price sufficient to
enjoy a reasonable profit, then Moller and Freedom shall renegotiate the royalty
payments to be paid pursuant to Section 4.1 or 4.2 hereof, as the case may be,
to such amount as will permit Freedom or its Affiliates to enjoy such a
reasonable profit. In the event that the parties have been unable to agree on
such renegotiated royalty payments within 90 days after Freedom gives written
notice to Moller of Freedom's desire to enter into such renegotiations, the
matter of the need for such renegotiation and the amount of such royalty
payments shall be submitted to mediation and arbitration pursuant to Section
10.8 hereof.
5. OWNERSHIP; INDEMNIFICATION.
5.1 Ownership of Technology and Improvements. Moller shall own at all times all
Moller Intellectual Property and Freedom shall own at all times all Freedom
Intellectual Property.
5.2 Moller Indemnification. Moller hereby agrees to indemnify, defend and hold
harmless Freedom and its subsidiaries and affiliates, and any of their
respective officers, directors, shareholders, agents, attorneys, successors and
assigns, from and against all losses, claims, demands, causes of action,
obligations, damages, judgments, expenses, and liabilities of any kind,
including reasonable attorneys' fees (collectively, "Losses"), based upon,
arising out of, or in connection with, any claim that the use of the Moller
Intellectual Property licensed to Freedom pursuant to Section 2.2 hereof
infringes any patent, trademark, copyright, trade secret or any other
intellectual property right of any third party. Moller shall have no liability
of any kind to such parties under this Section 5.2 to the extent that any such
claim is based upon, arises out of, or is in connection with, (a) the use of any
such Moller Intellectual Property in a manner for which it was not designed or
intended to be used, or (b) any improvement, modification or enhancement to any
such Moller Intellectual Property made by Freedom or any third party which
causes it to become infringing. In order to avoid or limit any liability for
infringement, Moller may, at any time and irrespective of whether it shall be
obligated to do so by order of any court, at its expense and option, replace (or
assist Freedom in replacing) any such infringing item or right with a
non-infringing item or right, provided that such replacement with a
non-infringing item or right does not adversely affect the functionality,
performance, cost or ease of use of such item or right, or secure for Freedom
the right to continue using such infringing item or right on the same terms and
conditions as provided in this Agreement. Notwithstanding any other provisions
of this Article 5 to the contrary, the liability of Moller to Freedom for
indemnification hereunder shall be limited to the cumulative payments made or
required to be made by Freedom to Moller under this Agreement.
5.3 Indemnification Procedure. The following procedures shall apply to any party
seeking indemnification (an "Indemnified Party") from an indemnifying party (an
"Indemnifying Party") pursuant to this Article 5:
(a) Promptly after receipt of notice of any claims giving rise to the right
to indemnification, the Indemnified Party shall promptly give notice in
writing to the Indemnifying Party setting forth the specifics of such
claim, provided that such failure to give notice to the Indemnifying Party
shall not relieve the Indemnifying Party from any liability, except to the
extent the Indemnifying Party demonstrates that the defense of such action
is directly and materially prejudiced thereby.
(b) The Indemnifying Party shall be entitled to assume control of the
defense of such claim with counsel reasonably satisfactory to the
Indemnified Party; provided, however, that (i) the Indemnified Party shall
be entitled to participate in the defense of such claim and to employ
counsel at its own expense to assist in the handling of such claim; (ii) no
Indemnifying Party shall consent to the entry of any judgment or enter into
any settlement without the consent of the Indemnified Party if such consent
or settlement could materially interfere with the business, operations or
assets of the Indemnified Party; and (iii) if the Indemnifying Party does
not assume control of the defense of such claim in accordance with the
foregoing provisions within 10 days after receipt of notice of the claim,
the Indemnified Party shall have the right to defend such claim in such
manner as it may deem appropriate at the cost and expense of the
Indemnifying Party.
(c) The Indemnified Party shall have the right to offset and deduct any
amount to which such Indemnified Party is entitled to indemnification
hereunder against royalties or other payments due under this Agreement.
6. PATENT PROSECUTION AND MAINTENANCE.
6.1 Moller Intellectual Property. Moller shall have the right, at its own
expense, to file, prosecute and maintain all patents and patent applications
(and all patents issuing thereon) that are deemed to be Moller Intellectual
Property for purposes of this Agreement. If Moller fails to file, prosecute and
maintain such patents and patent applications, Freedom shall have the right to
file, prosecute and maintain such patents and patent applications (i) at
Moller's expense, with respect to such patents and patent applications existing
on the date hereof, in which case Freedom may elect to pay such expenses and
credit such payment against any royalties payable by Freedom pursuant to this
Agreement, and (ii) at Freedom's expense, with respect to any other patents and
patent applications deemed to be Moller Intellectual Property for purposes of
this Agreement. Each party will cooperate fully with the other and provide and
execute all necessary documentation to enable the other to file, prosecute and
maintain all such patents and patent applications as provided for in this
Section 6.1.
6.2 Freedom Intellectual Property. Freedom shall have the right, at its own
expense, to file, prosecute and maintain patents and patent applications that
are deemed to be Freedom Intellectual Property for purposes of this Agreement.
If Freedom fails to file, prosecute and maintain such patents and patent
applications, Moller shall have the right to file, prosecute and maintain, at
its own expense, such patents and patent applications. Each party will cooperate
fully with the other and provide and execute all necessary documentation to
enable the other to file, prosecute and maintain all such patents and patent
applications as provided for in this Section 6.2.
7. DISCLAIMER OF WARRANTY AND LIMITATION OF LIABILITY.
7.1 Disclaimer of Warranty. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY
MAKES ANY WARRANTY TO THE OTHER, EXPRESS OR IMPLIED, BY OPERATION OF LAW OR
OTHERWISE, WITH RESPECT TO PROPERTIES OR IMPROVEMENTS, INCLUDING, WITHOUT
LIMITATION, ALL WARRANTIES REGARDING MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
7.2 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
INJURY, LOSS, CLAIM, DAMAGE OR ANY SPECIAL, EXEMPLARY, PUNITIVE, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING, BUT NOT LIMITED TO LOST PROFITS OR
LOST SAVINGS), WHETHER BASED IN CONTRACT, TORT, OR OTHERWISE, WHICH ARISES OUT
OF OR IS IN ANY WAY CONNECTED WITH ANY USE OF THE PROPERTIES OR IMPROVEMENTS,
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8. CONFIDENTIAL INFORMATION.
8.1 Disclosure and Use. Each party agrees not to use or disclose any
Confidential Information received from the other for any purpose whatsoever
except for the specific purposes described in this Agreement, and neither party
shall disclose to any other person any Confidential Information received from
the other, except to their respective Representatives to whom it shall be
necessary to make such disclosure in order to obtain the benefits to which such
party is entitled under this Agreement; provided, however, that each such
Representative granted access to such Confidential Information shall have
entered into an agreement, in a form acceptable to the disclosing party,
pursuant to which such Representative agrees to keep such information
confidential.
8.2 Termination of Confidentiality Obligations. The obligations of Section 8.1
hereof shall terminate with respect to any particular portion of the
Confidential Information when the receiving party can prove by appropriate
documentation either of the following: (a) such particular portion was
previously known to the receiving party as shown by the receiving party's files
or was already in the public domain, in each case at the time of the disclosure
thereof; or (b) such particular portion entered the public domain through no
action of the receiving party subsequent to the time of the disclosure thereof.
8.3 Property Rights; Return of Materials. All Confidential Information and
materials, including without limitation, all documents, drawings, models,
apparatus, designs, lists and all types of disks, diskettes, computer memory or
storage, or other media, furnished to the receiving party shall remain the
property of the receiving party. Upon the termination of this Agreement, the
receiving party at its expense shall return promptly to the disclosing party,
upon the request of the disclosing party, all Confidential Information of the
disclosing party along with all copies made thereof and all materials,
documents, or things containing any portion of any such Confidential
Information.
9. TERM AND TERMINATION.
9.1 Term. This Agreement shall take effect as of the date hereof and shall
continue in full force and effect, unless terminated earlier in accordance with
Section 9.2 hereof, so long as the making, use or sale of Products is covered by
one or more claims under an unexpired U.S. patent deemed to be Moller
Intellectual Property for purposes of this Agreement, which claims have not been
held invalid or unenforceable by a court having competent jurisdiction for which
any time for appeal has expired.
9.2 Termination. Notwithstanding Section 9.1 hereof, this Agreement may be
terminated, in whole or in part, pursuant to the following terms and conditions:
(a) This Agreement may be terminated at any time upon the mutual agreement
of the parties in writing.
(b) This Agreement may be terminated by a party immediately on written
notice in the event the other party shall have failed to perform any
material obligation or breached any material warranty or covenant under
this Agreement and shall have failed to remedy such material breach to the
non-breaching party's satisfaction within 60 days of receiving written
notice of such breach.
(c) This Agreement may be terminated by a party immediately on written
notice in the event the other party shall file a petition for a liquidation
in bankruptcy, be declared bankrupt, make an assignment for the benefit of
creditors, go into liquidation or receivership, or otherwise lose legal
control of its business.
9.3 Obligations Upon Termination. Upon any termination of this Agreement, the
following shall apply:
(a) The parties shall remain responsible for any payments that have become
due and owing as of the effective date of termination.
(b) The license granted by Moller to Freedom pursuant to Section 2.2 hereof
shall, with respect to Moller Intellectual Property existing as of the date
of such termination, survive and continue in full force and effect in
accordance with its terms, provided that (i) Freedom continues to make any
royalty payments required pursuant to the provisions of Article 4 hereof,
and (ii) that the license granted by Moller to Freedom pursuant to Section
2.2(a) hereof shall become non-exclusive in the event that this Agreement
is terminated by Moller pursuant to Section 9.2(b) or (c) hereof.
(c) The license granted by Freedom to Moller pursuant to Section 2.3 hereof
shall, with respect to Freedom Intellectual Property existing as of the
date of such termination, survive and continue in full force and effect.
(d) The provisions of Articles 5, 6, 7 and 8 hereof and Sections 10.7 and
10.8 hereof shall survive and continue in full force and effect.
10. GENERAL PROVISIONS.
10.1 Governing Law, Jurisdiction, and Venue. This Agreement shall be governed by
and construed according to the laws of the State of California, excluding its
conflict of laws rules to the extent such rules would apply the law of another
jurisdiction.
10.2 Integration. This Agreement (and the documents referred to herein) embodies
the entire understanding of the parties as it relates to the subject matter
hereof. This Agreement supersedes any prior agreements or understandings between
the parties as to such subject matter, including the Confidentiality Agreement.
No amendment or modification of this Agreement shall be valid or binding upon a
party unless signed by such party.
10.3 Notices. Any notice, demand, or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed given when
delivered personally or sent via registered or certified mail, return receipt
requested, or via overnight courier and addressed to the party at the address of
such party set forth at the end of this Agreement or such other address as such
party may request by notifying the other in writing.
10.4 Waiver. No waiver of any provision of this Agreement will be effective
unless in writing and signed by the party against whom such waiver is sought to
be enforced. No failure or delay by either party in exercising any right, power
or remedy under this Agreement shall operate as a waiver of any such right,
power, or remedy. The express waiver of any right or default hereunder shall be
effective only in the instance given and shall not operate as or imply a waiver
of any similar right or default on any subsequent occasion.
10.5 Severability. In the event that any provision of this Agreement (or portion
thereof) is determined by any court of competent jurisdiction to be invalid or
otherwise unenforceable for any reason, then the remainder of this Agreement
shall remain in full force and effect according to its terms.
10.6 Successors and Assigns. This Agreement and the rights granted hereunder
shall not (unless otherwise expressly provided herein) be assignable in whole or
in part by a party hereto without the prior written consent of the other party;
provided, however, that each party may assign this Agreement and any interests
or rights hereunder with the consent of the other party in connection with a
merger, consolidation, sale or other disposition of substantially all of the
property and assets of such party. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
10.7 Specific Performance; Remedies Cumulative. The parties acknowledge that a
breach of this Agreement (other than Article 3 hereof) will result in
irreparable and continuing damage and cannot be adequately compensated for by
money damages and agree that specific performance is an appropriate remedy for
any breach or threatened breach hereof. Accordingly, in addition to any other
remedies available to a party at law, in equity or by statute, the parties (a)
consent to the issuance of any injunctive relief or the enforcement of other
equitable remedies against it (without bond or other security) to compel
performance of any of the terms of this Agreement, and (b) waive any defenses
thereto, including without limitation, the defenses of failure of consideration,
breach of any other provision of this Agreement, and availability of relief in
damages. All remedies, whether under this Agreement, provided by law, or
otherwise, shall be cumulative and not alternative.
10.8 Mediation and Arbitration. If any dispute, controversy or claim arises
under this Agreement, the parties shall negotiate in good faith to settle the
matter. If the parties are unable to resolve the matter within a reasonable
time, the parties shall submit the matter to mediation by a trained mediator
approved by both parties, the cost of which shall be shared equally by the
parties. Any dispute, controversy or claim arising under this Agreement not
resolved through mediation within a reasonable period of time (not to exceed 90
days) shall be finally settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association in effect on the date
of this Agreement by a single arbitrator appointed in accordance with said
Rules. The appointing authority shall be the American Arbitration Association.
The costs of any arbitration shall be shared equally by the parties, unless the
award of the arbitrator provides otherwise. The arbitrator's award shall be
non-appealable and enforceable in any court of competent jurisdiction. The place
of mediation or arbitration shall be Sacramento, California. Nothing in this
Section 10.8 shall preclude any party from seeking injunctive relief or other
equitable remedies (whether prior to or during such mediation or arbitration) if
necessary to protect the interests of such party.
10.9 Export Restrictions. Neither party shall export or re-export, directly or
indirectly, the products or intellectual property of the other to any country
for which an export license or other governmental approval is required without
first obtaining such license or approval.
10.10 Counterparts. This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed effective as of the
date first set forth above.
FREEDOM MOTORS, INC.
By
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Its
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MOLLER INTERNATIONAL, INC.
By
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Its
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AEROBOTICS, INC.
By
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Its
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EXHIBIT A to
Technology Development and License Agreement
DEVELOPMENT SERVICES
Development Services are defined to include any and all tasks pertaining to:
o Engine Test, Test Setup or Test Documentation
o Engine Component Manufacture Process, Process Setup or Process
Documentation
o Piece Part Inspection
o ▇▇▇▇ of Material Management
o Inventory Management
o Field Test Integration Management
o Application Engineering
o General Administrative or Management Tasks associated with engine test,
manufacture or application integration
EXHIBIT B to
Technology Development and License Agreement
PATENT RIGHTS
o "Combination thermal barrier and wear coating for internal combustion
engines", U.S. Patent # 5,413,887 May 9th, 1995 (Foreign Patents Pending)
o "Charge Cooled Rotary Engine", U.S. Patent Pending
o "Rotary Engine Having Enhanced Charge Cooling and Lubrication", U.S. Patent
pending .
EXHIBIT C to
Technology Development and License Agreement
TANGIBLE ASSETS
o Moller Specific Hardware
o Manufacturing Equipment: All unique equipment necessary for the volume
production of rotary engines will be transferred to FM from MI. Total
estimated replacement cost for all the equipment is $3.6 ▇. ▇▇▇▇▇▇
International purchased all the equipment for a total of $370 ▇.
▇ ▇▇▇▇▇▇▇ Production Trochiodal Grinder (Model #808, Serial #726207) o Two
▇▇▇▇▇▇▇ Rotor Slot Cutters (Model #604, Serial #s 718701/708202) ▇ ▇▇▇▇▇▇▇
Production Trochiodal Hone (Model #KSSS500, Serial #720/2207) o Hurco CNC
Machining Center (Model BMC 40, Serial #BL8 006119A) o Comet CNC Center
Machining Center (Model VMC 520, Serial #3611197)
o 530cc Production Engine Inventory - All raw material, work in progress or
finished goods which are listed in the ▇▇▇▇ of Materials or can be used
with the production 530cc series engine, located either at vendors, with
the intent to return the articles to Moller International or on site at
Moller International. The production engine is defined as engines which are
assembled from cast housings, including the rotor housing and two end
housings.
o Assets received by Moller International from Infinite Machines to become
property of Freedom Motors
o All Intellectual Property and Design Description - all computer tapes,
drawing and associated hardware and software received by Moller
International intended to define and describe the Infinite Machines 1300cc
engine
o Production Tooling - core boxes and other tooling used for the manufacture
of the components of the Infinite Machines 1300cc Engine
o One Engine Test Dynamometer, Serial Number ZAG S3306/8 o Jetski - 1996
SeaDoo GSX equipped with the Infinite Machines 1300cc engine o Engine
Display - static display of the twin rotor 1300cc engine
o Manufacturing plan, tooling and engine components created under U.S.
Airforce contract through ▇▇▇▇▇▇▇▇▇ Airforce Base as part of a
privatization plan sponsored by the U.S. Airforce.