Exhibit 10.3
Exclusive Technology License Agreement 10/8/99
EXCLUSIVE TECHNOLOGY
LICENSE AGREEMENT
AND
RIGHT TO PURCHASE
PATENTS
THIS AGREEMENT,
effective as of the date of execution, is entered into by John C.
Bedini, an individual, with an office located at 2619 Seltice Way,
Coeur j’Alene, Idaho 83814 (hereinafter LICENSOR), and BEDINI
TECHNOLOGY, Inc., a :orporation organized under the laws of the
State of Nevada, with offices at 2619 Seltice Way, Coeur
d’Alene, Idaho, 83814, (hereinafter, LICENSEE).
ARTICLE
I
BACKGROUND OF
AGREEMENT
LICENSOR represents
that he is the owner of certain PATENT APPLICATIONS, and has the
right to file PATENTS and IMPROVEMENTS, PROPRIETARY INFORMATION,
TRADE SECRETS, TECHNICAL and SCIENTIFIC information and KNOW-HOW,
all pertaining to several designs of the Back EME Permanent
Electromagnetic Motor Generator (hereinafter, “Bedini
Motor”). The Bedini Motor allows the utilization of
previously wasted energy surrounding Electromagnetic Circuits.
LICENSOR wishes to grant an exclusive license to LICENSEE and
assign all right, title and interest in any domestic and foreign
patents granted at a future date for this technology, subject to
certain terms and conditions.
1.01
LICENSEE wishes to
acquire an exclusive license pursuant to the issuance of future
domestic and foreign PATENTS and IMPROVEMENTS, PROPRIETARY
INFORMATION, TRADE SECRETS, TECHNICAL and SCIENTIFIC information,
KNOW-HOW and registered TRADEMARKS of LICENSORS for purposes of
making, using and selling the Bedini Motor on a worldwide
basis.
1.02
LICENSEE wishes to
acquire all right, title and interest in domestic and foreign
patents filed as of the date of this Agreement that are related to
the Bedini Motor and any domestic or foreign patents filed and
granted in the future by LICENSOR, including all improvements on
domestic or foreign patents filed or to be filed in the future,
pursuant to certain considerations in the form of a Product RoyaIt~
to be naid to LICENSOR. by LICENSEE or SUB-LICENSEES.
ARTICLE
II
DEFINITIONS
As used herein, the
following terms shall have the meanings set forth below:
2.00
CONFIDENTIAL
INFORMATION is that information that is transmitted by
LICENSOR and received
by LICENSEE that is considered by LICENSOR to be
CONFIDENTIAL and
PROPRIETARY INFORMATION as related to the Bedini Motor
or
other associated
inventions and products.
2.01
EFFECTIVE DATE shall be
October 8, 1999.
2.02
GROSS PRODUCTION means
the number of units of commercially saleable products produced by
utilization of the LICENSED TECHNOLOGY, with the LICENSED PRODUCT
and sold to customers of LICENSEE or sold by SUB-LICENSEES of
LICENSEE.
2.03
IMPROVEMENTS means any
modification of a method, process, composition of matter, or
product described in a PATENT, TRADE SECRET, TECHNICAL and
SCIENTIFIC information, KNOW-HOW, or in any PROPRIETARY or
CONFIDENTIAL INFORMATION of LICENSOR, provided such a modification,
if unlicensed, would infringe one or more claims of an issued
patent, PATENT APPLICATION, TRADE SECRET, TECHNICAL and SCIENTIFIC
information, KNOW-HOW, or in any other PROPRIETARY or CONFIDENTIAL
INFORMATION. IMPROVEMENTS further means any modifications or
changes in the composition of matter, change in the design or use
of the LICENSED PRODUCT or LICENSED TECHNOLOGY by
LICENSEE.
2.04
KNOW-HOW means that
special knowledge, skill and experience, as applied to the LICENSED
PRODUCT and the LICENSED PROCESS and TECHNOLOGY, that is possessed
by the LICENSOR that is PROPRIETARY or CONFIDENTIAL
INFORMATION.
2.05
LICENSED FIELD means,
and is limited to, the practice of PATENT(S) and IMPROVEMENTS,
PATENTS that may issue in the future, PROPRIETARY INFORMATION,
TRADE SECRETS, TECHNICAL and SCIENTIFIC information and KNOW-HOW
for purposes of using the LICENSED PRODUCT and the LICENSED
TECHNOLOGY on an exclusive worldwide basis.
2.06
LICENSED PRODUCTS or
DESIGNS means any and all products which fall within the LICENSED
FIELD and which are covered by, marked or are produced using a
process or method covered by a claim of a PATENT(S) and
IMPROVEMENTS, PROPRIETARY INFORMATION, TRADE SECRETS, TECHNICAL and
SCIENTIFIC information and KNOW-HOW of LICENSOR for purposes of
commercially using the LICENSED TECHNOLOGY.
2.07
LICENSED PROCESS and
TECHNOLOGY means any and all processes, methods or proprietary
technology, engineering and design features or components which
fall within the LICENSED FIELD which were developed by LICENSOR and
which are covered by, marked or are produced using a process or
method covered by a claim of a PATENT(S) and IMPROVEMENTS,
PROPRIETARY INFORMATION, TRADE SECRETS, TECHNICAL and SCIENTIFIC
information and KNOW-HOW of LICENSOR for purposes of commercially
utilizing the LICENSED PRODUCT.
2.08
LICENSED TERRITORY
shall mean all countries of the world.
2.09
LICENSEE means BEDINI
TECHNOLOGY, INC., a corporation domiciled in the State of
Nevada.
2.10
LICENSOR means John C.
Bedini, an individual.
2.11
NET SELLING PRICE means
the gross amount received by LICENSEE or a SUB-LICENSEE relating to
any and all products or motors sold by LICENSEE or UB-LICENSEES
resulting from the use of the LICENSED PRODUCT and LICENSED
TECHNOLOGY, less the cost of freight required for the transport of
the product sold to a third party buyer. NET SELLING PRICE also
includes all revenue generated from leases or rental contracts
related to any device that utilizes the LICENSED
TECHNOLOGY.
2.12
PATENT(S) or PATENT
APPLICATION(S) means any PATENT(S) granted or PATENT APPLICATION(S)
filed or to be filed by LICENSOR pursuant thereto, and all
divisions, continuations, continuations in part, reissues,
substitutes, and extensions thereof.
2.13
PRIVATE LABEL means the
exclusive labeling, trade name and/or trademark for the LICENSED
PRODUCT or LICENSED TECHNOLOGY used by the LICENSEE or a
SUB-LICENSEE in the LICENSED TERRITORY.
2.14
PROPRIETARY INFORMATION
means all information possessed by the LICENSOR that is
CONFIDENTIAL in nature and that the LICENSOR has exclusive rights
in and to. It includes TRADE SECRETS, TECHNICAL and SCIENTIFIC
information, and KNOW-HOW as related to the LICENSED PRODUCTS and
the LICENSED TECHNOLOGY.
2.15
PRODUCT ROYALTY means a
royalty payment made by LICENSEE and/or SUB-LICENSEE(S) to LICENSOR
on the products actually sold, rented or leased by LICENSEE or
SUB-LICENSEE(S) and paid for by customers of the LICENSEE OR
SUB-LICENSEE(S). The ROYALTY shall be a minimum of THREE PERCENT
(3%) of the NET SELLING PRICE, of all products sold, rented or
leased by LICENSEE or SUB-LICENSEE and paid for by customers of
LICENSEE or SUB-LICENSEE, less ROYALTIES paid on LICENSED PRODUCT
returned from previous sales of LICENSED PRODUCT, if any, actually
paid by LICENSEE.
2.16
SUB-LICENSE means an
Exclusive License granted to a third party by the LICENSEE of the
LICENSED PRODUCT or LICENSED TECHNOLOGY, in the LICENSED FIELD and IN A PORTION of
the LICENSED TERRITORY.
2.17
TECHNICAL and
SCIENTIFIC information means all PROPRIETARY INFORMATION, TRADE
SECRETS, KNOW-HOW and all information contained in PATENT(S) that
may issue or PATENT APPLICATION(S) and IMPROVEMENTS that
is
the exclusive property
of LICENSOR, developed or acquired, as of the date of this
Agreement which would be useful in the making, using and selling of
the LICENSED PRODUCTS in the LICENSED TERRITORY.
2.18
TRADE SECRET means any
CONFIDENTIAL INFORMATION that is the personal property of LICENSOR
and in which he has an exclusive right.
ARTICLE
III
LICENSE
GRANT
3.00
LICENSOR hereby grants
to LICENSEE, to the extent of the LICENSED FIELD, a license under
any PATENT(S) or PATENT APPLICATION(S) to be filed and
IMPROVEMENTS, PROPRIETARY INFORMATION including TRADE SECRETS,
TECHNICAL and SCIENTIFIC information, and KNOW-HOW for the purpose
of using the LICENSED PRODUCTS and the LICENSED PROCESS and
TECHNOLOGY, that is an integrated operating system and related
technology collectively and commonly referred to as the Bedini
Motor, which relates to several designs of a Back EMF Permanent
Electromagnetic Motor Generator, known as the Bedini motor, in the
LICENSED TERRITORY.
No LICENSE under the
PATENT(S) or PATENT APPLICATION(S) to be filed and IMPROVEMENTS,
PROPRIETARY INFORMATION including TRADE SECRETS, TECHNICAL and
SCIENTIFIC information, KNOW-HOW is granted, and no license should
be implied, with respect to activities of LICENSOR outside the
LICENSED FIELD and LICENSED TERRITORY.
(a) The Parties agree
that any IMPROVEMENTS, design changes, modifications or
developments of the LICENSED PRODUCT or the LICENSED TECHNOLOGY,
made by LICENSOR shall be available to LICENSEE in the LICENSED
TERRITORY at no additional cost or increased ROYALTY. In the event
LICENSOR makes application for any new patent, LICENSEE shall have
the right to use and purchase for One Dollar ($1.00) and other good
and valuable consideration, any newly developed product or
technology under this Agreement.
(b) The Parties further
agree that any IMPROVEMENTS, design changes, modifications or
developments of LICENSED PRODUCT or LICENSED TECHNOLOGY made by
LICENSEE, which may be patented, may be made or used in the
LICENSEE TERRITORY by LICENSEE. LICENSEE shall promptly inform
LICENSOR of any such IMPROVEMENTS or of the filing of any new
patent applications by LICENSEE. An~ IMPROVEMENTS, design changes,
modifications or developments of the LICENSEE PRODUCT or LICENSED
TECHNOLOGY by LICENSEE are construed to be a part ~ this Agreement
and LICENSEE shall be bound to all terms and conditions contained
in this Agreement.
3.01
LICENSOR further grants
to LICENSEE, to the extent of the LICENSEE
FIELD and LICENSED
TERRITORY, a license to use any registered TRADEMARK
owned, acquired,
developed or filed for by the LICENSOR, relating to the
LICENSEE
PRODUCT or LICENSED
TECHNOLOGY.
3.02
The PRODUCT LICENSE
granted pursuant to Sections 3.00 and 3.0’ shall be
exclusive, with the right to grant EXCLUSIVE SUB-LICENSES
thereafter for the term of this Agreement as defined in Article VI.
Such approval shall not b unreasonably withheld. Any EXCLUSIVE
SUB-LICENSE agreement of LICENSEE shall be bound by all terms of
this Agreement unless expressly excluded, in writing, by
LICENSOR.
ARTICLE
IV
LICENSE FEES AND
ROYALTY
4.00
LICENSEE shall, on the
EFFECTIVE DATE, by cash or by note, subject to approval by the
LICENSOR, due not later than June 30, 2000, as a one time only
LICENSE FEE, pay to LICENSOR, Fifty Thousand Dollars ($50,000),
which shall be non-refundable and credited against the ROYALTY
called for under Section 4.01.
4.01
LICENSEE shall pay to
LICENSOR a royalty on the products made, sold, rented or leased by
LICENSEE and SUB-LICENSEES and paid for by customers of LICENSEE
and SUB-LICENSEES. The PRODUCT ROYALTY shall be THREE PERCENT (3%)
of the NET SELLING PRICE, per unit of LICENSED PRODUCT sold by
LICENSEE OR SUB-LICENSEE, less ROYALTIES paid on product returned
from previous sales of product, if any, actually paid by LICENSEE
or SUB-LICENSEE. A ROYALTY of THREE PERCENT (3%) of the GROSS
INCOME shall be due for all LICENSED PRODUCT that is rented or
leased by the LICENSEE or SUB-LICENSEES. The ROYALTY will remain in
perpetuity and continued to be paid beyond the life of any PATENTS.
Payments and accounting are to be made quarterly, within 45 days of
the quarter just ending.
ARTICLE
V
RIGHT TO PURCHASE
PATENTS AT THE TIME OF GRANT
5.00
In the event LICENSOR
is granted domestic or foreign patents relating to the LICENSED
TECHNOLOGY, which may be issued in the future, LICENSOR hereby
agrees that within Sixty (60) days, LICENSOR will execute any and
all documents necessary to legally assign all right, title and
interest of PATENTS to LICENSEE for One Dollar ($1.00) and other
good and valuable consideration. It being understood that so long
as this Agreement remains in good standing, LICENSEE agrees to
assume financial responsibility to pay directly or reimburse
LICENSOR for all costs related to preparing, filing and prosecuting
patent applications on behalf of LICENSOR, including but not
limited to legal fees, filing fees, maintenance fees and
translation costs.
ARTICLE
VI
SUB-LICENSES
6.00
Any SUB-LICENSE in the
LICENSED FIELD and LICENSED TERRITORY shall be the responsibility
of LICENSEE so long as this Agreement remains exclusive. It is the
intent of the Parties that SUB-LICENSES shall be available to
qualified third parties on fair and reasonable terms. A SUB-LICENSE
shall be an exclusive license that is transf
