MOTORSPORTS EMPORIUM LICENSE AGREEMENT
This agreement
is made this August 9, 2005 (the "Agreement") by and
between: Michael G. Wachholz, an
individual, 18748 North 91st Place, Scottsdale,
AZ 85255, hereinafter referred to as
"Licensor", and MotorSports Emporium, Inc.,
a Nevada Corporation, 16055 N. Dial Blvd.
Suite 5, Scottsdale, AZ 85260
hereinafter referred to as "Licensee."
WHEREAS, the
Licensor is engaged in the business of developing and
marketing products in the nature of
performance brake fluids and has, over the
years, acquired and developed substantial
and valuable technical knowledge,
know-how, and experience in the design and
development of such systems and
products described in detail in Schedule A
attached hereto (the "Technology");
WHEREAS, the
Licensee desires to utilize the Technology in the design,
development and sale of the products listed
in the attached Schedule A (the
"Licensed Product");
WHEREAS,
Licensor and Licensee believe it is in their mutual interest
and
desire to enter into an agreement whereby
Licensee would use the Licensor's
Technology in the manufacture and sale of
the Licensed Product pursuant to the
terms and conditions hereinafter
provided;
WHEREAS, the
Licensor owns and operates the World Wide Web sites known as
www.prospeedmotorsport.com and
www.gs610.com (the "Websites");
WHEREAS,
Licensee desires to license the Websites for its own use as it
relates specifically to Licensed
Product;
WHEREAS,
Licensor is the sole and exclusive owner of those certain
patents,
trademarks, copyrights and registrations
identified more fully in Schedule B
attached hereto (the "Intellectual
Property");
WHEREAS,
Licensee desires to obtain from Licensor a license to use the
Trademarks on and in association with the
Licensed Product and to receive
technical assistance from Licensor for the
application and sale of Product, for
the Specified Market, in the specified
Territory and Licensor is willing to
grant such right to Licensee; and,
WHEREAS,
Licensor has agreed to sell Prospeed GS610 exclusively through
licensee with licensee performing all
transactions related to marketing,
advertising, manufacture and sales of
Licensed Product.
NOW, THEREFORE,
to affect the above purpose, and in consideration of the
mutual covenants and premises set forth
herein, Licensor and Licensee hereby
agree as follows:
1.0 DEFINITIONS:
The terms
defined in this Section shall, for all purposes of the
Agreement,
except where the context clearly requires
otherwise or except as otherwise
indicated, have the meaning specified
below:
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1.1 "Technology" shall mean the
know-how, services, product and blends and
application techniques, specifications of which are licensed,
registered or applied for by the Licensor or issued or assigned to
the
Licensor during the Term of the Agreement which are attached hereto
in
Exhibit "A".
1.2 "Technical Information" shall mean
all Proprietary and confidential
information, technical data, processes, and specifications known
to
Licensor in connection with the application of the Licensed
Product
including, but not limited to, the name, and source of supply
of
Prospeed GS610, product information, technical specifications,
terms
of purchase and quantity discounts, business relationships,
including
the names of distributors marketing Prospeed GS610, terms of
distribution agreements, business and development plans,
marketing
plans, actual and potential customers, strategies, reports,
marketing
projections, and support documentation.
1.3 "Territory" shall mean the United
States of America, and all
recognized foreign countries, worldwide except countries which
any
government agency of the U.S. Government prohibits shipment of
the
Licensed Product.
1.4 "Intellectual Property" shall mean
the patents, trademarks, and
copyrights as licensed or used by Licensor, developed in
conjunction
with the Licensed Product. Intellectual Property shall include
all
current and future brake fluid patents which have been or may
be
applied for or granted to Licensors, and includes those
trademarks
listed in Exhibit "B".
1.5 The term "Specified Market" shall
mean the brake fluid markets for all
individual, business and governmental entities, which use the
Licensed
Product.
1.6 "Licensed Product" shall further
mean the brake fluid blend as defined
by Exhibit "A" and any subsequent performance
improvements/modifications.
1.7 "Effective Date" shall mean the
date on which the Agreement is
executed.
1.8 The "Term" of the Agreement shall
be five (5) years initially with an
option to extent the term for an additional five (5) years at
sole
discretion of licensee commencing on the Effective Date unless
sooner
terminated by the Licensor or Licensee in accordance with the
provisions herein. Thereafter, this Agreement may be renewed by
mutual
agreement between the parties hereto.
1.9 "MSDS" shall mean the brake
fluid's material data safety sheet.
2.0 LICENSE GRANT
2.1 Licensor hereby exclusively grants
to Licensee and its sub licensees,
for the Term of this Agreement, an exclusive right and license to
use
the Technical Information in order to manufacture, process,
prepare
sell, distribute and advertise the Licensed Product using said
Technology, for the Specified Market, in the Territory during the
Term
of this Agreement. Licensee is hereby granted the right to
subcontract
for installation, distribution, service and sale and application
of
the Product. Licensor retains full rights to use trademarks in
manner(s) which are not brake fluid related and does not
conflict
and/or create competition with Licensee in the brake fluid
market.
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2.2. Licensor
hereby exclusively grants to Licensee, for the Term of this
Agreement, the exclusive right and license to use, manufacture,
have
manufactured, sell, distribute and advertise the Licensed Product
in
the Territory.
2.3. Licensor
hereby exclusively grants to Licensee, for the Term of this
Agreement, an exclusive license to use the Intellectual Property
and
Websites on or in association with the Licensed Product in the
Territory, as well as on packaging, promotional and advertising
material associated therewith when used in accordance with
trademark
standards as specified by Licensor. All Intellectual Property
and
websites will remain the sole property of the Licensor.
2.4. The
Licensee may grant sublicenses to third parties under the
Agreement with the approval of the Licensor, which approval shall
not
be unreasonably withheld.
2.5. During the
term of this Agreement, Licensor shall not distribute or
sell the Licensed Product in the Territory directly or through
any
business affiliated with Licensor whatsoever, however Licensor
may
contract with Licensee to sell the Product for Licensee.
2.6. Licensor
represents and warrants that it has the right and power to
grant the licenses granted herein and that there are no other
agreements with any other party in conflict herewith.
2.7 During the term of this Agreement,
each party shall advise the other
party of any technical improvements and/or inventions relating to
the
Technology
and/or the Licensed Product. All such improvements and/or
inventions shall become the property of party to develop said
improvements and/or inventions. If an improvement and/or
invention
developed by Licensor is later incorporated in an improved or
modified
product by Licensee, such improved product shall be subject to
the
payment of a Royalty. Further, if Licensee incorporates any
dominant
feature of the Licensed Property on other Product, such other
Product
shall be subject to the payment of a Royalty.
3.0 SUPPLY OF TECHNICAL INFORMATION AND
AFTER-SALES SERVICES:
3.1 Licensor shall, within ten (10)
days after the Effective Date of this
Agreement, provide Licensee with all materials and documents
reasonably required to perform under this Agreement.
3.2 Licensor will supply Technical
Information and Licensed Product
support to Licensee for applications and Licensed Product as
specified
in Schedule "A".
3.3 Licensor shall, during the Term of
this Agreement, provide Licensee
with a support by telephone, e-mail, fax, or if requested by
Licensee,
in person at Licensee's home office site at all times
reasonably
required by Licensee in connection the support of the Licensed
Product, including the use of reasonable commercial efforts: (i)
to
answer Licensee's questions regarding the proper utilization
and
optimization of the Licensed Product; and (ii) to provide solutions
to
problems that arise with the Licensed Product.
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3.4 Licensee recognizes that such
Technology is the proprietary and
confidential property of Licensor. Accordingly, Licensee shall
not,
without the prior express written consent of Licensor, during the
term
of this Agreement, disclose or reveal to any third party or
utilize
for its own benefit other than pursuant to this Agreement, any
such
Technology provided by Licensor concerning the Licensed
Product,
provided that such information was not previously known to Licensee
or
to the general public. Licensee further agrees to take all
reasonable
precautions to preserve the confidentiality of Licensor's
Technology
and shall assume responsibility that its employees,
sublicensees
and/or assignees will similarly preserve this information
against
third parties. The provisions of this clause shall survive
termination
of this Agreement.
3.5 In the event that Licensor does
not seek or obtain trademark
protection for a particular item or in a particular country
where
Licensee believes such protection is necessary, With 30 day
written
advance notice to Licensor, Licensee shall have the right to seek
such
protection in the name of Licensor and setoff all costs
associated
with seeking and maintaining such protection against the
royalties
owed Licensor.
4.0 SCHEDULE OF EXCLUSIVE LICENSE FEES AND
COSTS
4.1 License Fee: In consideration of
the grant of this exclusive license,
which exclusive license shall include all terms and conditions as
set
forth herein, Licensee shall pay an licensee fee of fifteen
thousand
dollars ($15,000).
4.2 Licensee shall additionally pay a
monthly royalty fee on collected
gross revenues for actual Licensed Product sold as follows:
4.2.1 Seven (7%) percent on all gross sales as it relates to
the
Licensed Product sold;
4.3 The percentage royalty payments
described in 4.2.1 shall be made
within ten (10) days after the end of each calendar month
accompanied
with a full report of the relevant period's wholesale and retail
sales
activities.
4.4 Cost of manufacturing and
marketing is the sole responsibility of
Licensee.
5.0 TECHNICAL INFORMATION AND LICENSOR'S
TRADEMARKS
5.1 All rights in the Technical
Information and the Licensor's trademarks
other than those specifically granted herein are reserved to
Licensor.
Licensee acknowledges that Licensee shall not acquire any title
or
interest in the Technical Information or Licensor's Trademarks as
a
result of the Licensee's use thereof. Within thirty (30) days from
the
Effective Date of this Agreement, licensor shall have Licensee
registered as a registered or permitted user, or t
