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Exhibit 10.1
LICENSE AGREEMENT
THIS LICENSE AGREEMENT
(“Agreement”), dated as of this 29 th
day of January, 2008 by and between COATES INTERNATIONAL,
LTD ., having its principal place of business at Route
#34 and Ridgewood Road, Wall Township, New Jersey 07719
(hereinafter referred to as Licensor) and WELL TO WIRE ENERGY
INC ., having its principal place of business at Suite
17, 1700 Varsity Estate Drive, NW, Calgary, Alberta, Canada
T3B2W9 (hereinafter referred to as Licensee).
BACKGROUND
WHEREAS, Licensor owns
and/or has the right to license certain Patent Rights and
Technical Information (as hereinafter defined) relating to
Licensed Products (as hereinafter defined) used in
the design and construction of internal combustion engines
employing spherical rotary valves (the “Coates’
Spherical Rotary Valve System”);
WHEREAS, Licensor desires
to grant to Licensee certain rights under such Patent Rights
and Technical Information to use the Licensed Product in the
Territory (as hereinafter defined).
WHEREAS, Licensee desires
the right to use the Licensed Product in the Territory in
accordance with the terms and conditions hereinafter set
forth.
NOW THEREFORE, in
consideration of the agreements and covenants, and other good
and valuable consideration, and the mutual promises of the
performance of the undertakings herein, it is agreed by and
between the parties hereto as follows:
ARTICLE 1
– DEFINITIONS
In
this Agreement, including the recitals:
1.1
“CSRV
Valve System ” shall mean a cylinder head or
heads for an internal combustion engine manufactured in
accordance with the Patent Rights and/or Technical
Information of the Coates’ Spherical Rotary Valve
System.
1.2 “
CSRV Valve
Seal ” shall mean a valve seal for use with a
CSRV Rotary Valve Sphere in the Coates Spherical Rotary Valve
System.
1.3 “
CSRV
Rotary Valve Sphere ” shall mean a spherical
rotary valve used in the CSRV Valve System in accordance with
the Technical Specifications.
1.4
“ CSRV
Components ” shall mean the parts that when
assembled comprise the Licensed Product.
1.5
“Coates
CSRV Engine for Oil and Gas Industry and Landfills
” shall mean a device consisting of an Engine linked to
an electric generator for direct use in all applications
including the pumping and the compression of oil or
gas, and the generation of electric power and
engines powered by gas or other fuels including, but not
limited to, gas produced by or from a landfill in
that industry.
1.6
“ Dollars”
and “$” shall mean the official currency of
the Government of the United States of America in readily
available funds.
1.7
“ Engine” or
“Engines ” shall mean all internal
combustion engine(s) employing the Coates Spherical Rotary
Valve System.
1.8
“
Field of
Use ” shall mean the use of the Coates CSRV
Engine System as the power source for the generation of
electrical energy for the oil and gas industry and from
landfills.
1.9
“Coates
Engine ” shall mean an internal combustion engine
that employs or is comprised by one or more Coates patented
components which produces kinetic energy or
electric power.
1.10
“Improvement
” shall mean any improvement, change or modification to
the Engines, generators, Coates Co-Generation System, the CSRV
System, the CSRV Valve Seal, CSRV Components and/or CSRV
Rotary Valve System, which may be developed, created or
acquired by either party to this Agreement, but only to the
extent that the same comes within the scope of one or more
claims under the Patent Rights.
1.11 “
Licensed
Product ” shall mean any component of an internal
combustion engine that incorporates the Patent Rights and/or
Technical Information in its design and manufacture
incorporating the components identified in Sections 1.1, 1.2,
1.3, 1.4 and 1.5.
1.12
“Licensee
” shall mean the Licensee as specified on the title page
of this Agreement.
1.13
“Licensor”
shall mean Licensor as specified on the title page of this
Agreement.
1.14
“Patent
Rights ” shall mean the patents and patent
applications, as listed in Appendix 1.14, and all patents
which may be issued pursuant to such patent applications,
together with any continuations or continuations-in-part
thereof, and all patents issuing thereon or therefrom
including reissues, patents of addition and any registration
or configuration patents corresponding thereto.
1.15 “
Regulatory
Approval ” shall mean, with respect to the United
States of America, all governmental approvals necessary for
Licensee to use the Licensed Product in that
country.
1.16 “
Regulatory
Authority ” shall mean, with respect to the
United States of America the governmental authority
responsible for granting Regulatory Approval.
1.17 “
Technical
Information ” shall mean all information imparted
by Licensor to Licensee, together with all proprietary
information, trade secrets, skills and experience, recorded
and unrecorded, accumulated from time to time and during the
term of this Agreement, relating to a Licensed Product and all
designs, drawings, specifications and the like, owned by
Licensor, insofar as the same relate to a Licensed
Product.
1.18 “
Technical
Specifications ” shall mean the specifications
and performance parameters developed by Licensor for the
Licensed Product.
1.19
“ Territory”
shall mean the United States of America.
ARTICLE
II – LICENSE GRANTED
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2.1
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LICENSE GRANTED TO LICENSEE
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Subject to the
terms and conditions set forth herein, the Licensor hereby
grants an exclusive license to use, sell and lease Licensed
Products, manufactured by Licensor or sold and supplied
exclusively by Licensor to Licensee, falling within the scope
of the Patent Rights and/or Technical Information, within the
Territory and with respect to the Field of
Use. The Licensee shall be prohibited from
manufacturing the Coates CSRV Engine Systems or the
components thereof for any use. As a condition for
this License, the Licensee must purchase internal combustion
engines incorporating the CSRV Valve System, the Coates
Engines and all component parts from the Licensor or its
designee and from no other person or entity. The
Licensee must purchase at least one hundred and twenty (120)
internal combustion engines incorporating the CSRV Valve
System, the Coates Engines and all component parts from the
Licensor during each calendar year during the term of the
License; if Licensee does not do so, the License granted
pursuant to this Agreement shall automatically become
non-exclusive.
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2.2
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LIMITATION OF LICENSE GRANTED
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Licensee shall have the right to sell, use and lease, the
Licensed Product or components of the Licensed Product, and/or
Technical Information for itself and its customers.
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If
Licensee has heretofore brought about or shall hereafter
during the term of this Agreement or within two (2) years
after the expiration of this Agreement bring about any
Improvement on the licensed product, Licensee shall promptly
disclose such Improvement to Licensor. If such
Improvement is approved for a patent, Licensor shall have the
first option within the time prescribed by law to file a
patent application thereon in Licensor’s
name. The expense of filing, securing and
maintaining patent protection on such Improvements shall be
borne by Licensor and the Licensee will have a royalty free
license to use each such Improvement. If Licensor
shall elect not to file any such patent application, then
Licensee shall have the option to do so in its own name and at
its own expense.
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If
Licensee obtains a patent for an Improvement, Licensee shall
grant and hereby grants to Licensor an exclusive, royalty-free
license together with the right to grant sublicenses to other
licensees under each of said patent applications and any
patents issuing as set forth in this Section.
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Licensee
shall not alter, remove, obscure or cover patent markings or
any other writing or printed words identifying Licensor as
owner of the pertinent patents and/or patent
applications.
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If
Licensor or the Coates Trust, in its sole discretion, decides
to offer for sale a worldwide license to use the Licensed
Product and the Licensor negotiates an offer from a third
party to purchase such right, before executing a license
agreement with that third party, Licensor and the Coates Trust
shall first offer to Licensee that right to the license upon
terms no less favorable than the Licensor was willing to
accept from that third party for use in the oil and , gas ,
and industry and in relation to landfills. The
Licensee shall have ninety (90) days from receipt of written
notice from the Licensor to exercise that right in writing and
to agree to indemnify and hold harmless the Licensor from, and
against, any and all losses, liabilities, damages and costs
(including attorney’s fees) incurred by Licensor as a
result of the Licensor foregoing the licensing relationship
with that third party.
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ARTICLE III – TECHNICAL COOPERATION AND
APPROVALS
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3.1
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TECHNICAL
COOPERATION |
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Upon
request by Licensee, Licensor shall furnish to Licensee
technical assistance. Such technical assistance
will be provided under the terms of a separate engineering
contract.
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For
the full term of this Agreement, Licensee assumes complete
responsibility, at Licensee’s sole cost and expense, for
obtaining Regulatory Approval, where required, from each
Regulatory Authority, for the use of Licensed Products.
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Licensor
agrees to provide Licensee with all reasonable assistance and
cooperation in the preparation and submission of any
application for Regulatory Approval.
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ARTICLE
IV – CONFIDENTIAL INFORMATION
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4.1
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Licensee
shall use all Technical Information and Technical
Specifications obtained heretofore or hereafter from Licensor
for the sole purpose of using Licensed Product under this
Agreement.
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4.2
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Licensee
shall hold in confidence any and all Technical Information and
Technical Specifications disclosed, directly or indirectly, to
Licensee by Licensor under this Agreement except that such
obligation does not extend to: (a) Technical Information and
Technical Specifications which at the time of disclosure are
in the public domain; (b) Technical Information and Technical
Specifications which after disclosure is published or
otherwise becomes part of the public domain through no fault
of the Licensee (but only after, and only to the extent that,
it is published or otherwise becomes part of the public
domain); (c) Technical Information which Licensee can prove
was in its possession (as evidenced by Licensee’s
written records) at the time of the disclosure and was not
acquired, directly or indirectly from Licensor or from a third
party under an obligation of confidence; and (d) Technical
Information and Technical Specifications which Licensee can
prove was received by it (as evidenced by Licensee’s
written records) after the time of disclosure hereunder from a
third party who did not require Licensee to hold it in
confidence and who did not acquire it, directly or indirectly,
from Licensor under an obligation of confidence.
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4.3
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Licensee
shall, upon request by Licensor, obtain from its officers,
employees, agents and other persons having access to
Confidential Information, a duly binding agreement to maintain
such information in confidence, each such agreement must be in
a form reasonably acceptable to Licensor.
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ARTICLE V
– PAYMENTS
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In
consideration of the rights granted hereunder, Licensee shall
pay the Licensor a Licensing Fee of Fifty Million Dollars
($50,000,000.00) in accordance with the following payment
schedule:
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(a)
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A
Non-Refundable Deposit of $1,000,000.00 on execution of this
Agreement.
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Any
and all previous License payments owed to Coates International,
Ltd., including the costs of research and
development (“R&D”) shall be paid in
full, as a precondition to the execution of this
Agreement. |
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The
balance of the Licensing Fee, after credit for the non-refundable
deposit, of |
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