Exhibit 10.4
Exclusive Technology License 050101
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 1 907 Canyon
Drive, Coeur d’Alene, Idaho 83814 (hereinafter LICENSOR), and
BEDINI TECHNOLOGY, Inc., a corporation organized under the laws of
the State of Nevada, with offices at 2619 Seltice Way, Coeur
d’Alene, Idaho, 83814, (hereinafter, LICENSEE or
Company).
ARTICLE
I
BACKGROUND OF
AGREEMENT
LICENSOR
represents that he is the owner of certain technology, hereinafter
referred to as the MONOPOLE ENERGY DELIVERY SYSTEM (hereinafter,
“MEDS”), wherein MEDS is unique in that it is the first
energy producing SYSTEM using a magnetic monopole motor
configuration heretofore unknown in the art that produces
electrical energy available but not accessible and with a
Coefficient of Performance > 1 .0. The first of MEDS patent
applications, titled A DFVICE AND METHOD FOR UTILIZING A
MONOPOLE MOTOR TO CREATE BACK EMF TO CHARGE BATTERIES has been
filed both with the U.S. Patent Office and through the Patent
Cooperation Treaty, Serial No. 09/805,764.
LICENSOR further
agrees to and represents that all future MEDS improvements
developed shall be protected under patent laws, worldwide, through
the filing of patent applications as improvements in MEDS evolve.
Further, LICENSOR is in possession of certain PROPRIETARY
INFORMATION, TRADE SECRETS, TECHNICAL and SCIENTIFIC information
and KNOW-HOW, all pertaining to several design concepts of MEDS.
MEDS allows for the utilization of previously unused energy that
exists in electromagnetic fields. LICENSOR wishes to grant an
exclusive license to LICENSEE and assign all right, title and
interest in any and all domestic and foreign patents granted at a
future date for MEDS technology, subject to certain terms and
condition.
1.01
LICENSEE wishes
to acquire an exclusive license to MEDS and to the issuance of any
and all future domestic and foreign PATENTS and IMPROVEMENTS,
PROPRIETARY INFORMATION, TRADE SECRETS, TECHNICAL and SCIENTIFIC
information, KNOW-HOW and registered TRADEMARKS of LICENSOR for
purposes of making, using, sub-contract manufacturing, marketing,
franchising and selling MEDS on a worldwide basis.
1.02
LICENSEE wishes
to acquire all right, title and interest in any and all present
domestic and foreign patents filed as of the date of this Agreement
that are related to MEDS, and any domestic or foreign patents filed
and granted in the future by LICENSOR as inventor and patentee,
including all improvements on domestic and/or foreign patents
filed, or to be filed, in the future, pursuant to certain
considerations in the form of a License Fee and Royalty to be paid
to LICENSOR, by LICENSEE, said Fee to be in the form of equity in
the Company.
ARTICLE
II
DEFINITIONS
As
used herein, the following 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 ROPRIETARY INFORMATION as related to MEDS or
otherassociated inventions and products.
2.01
EFFECTIVE
DATE shall be May 1, 2001.
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 MEDS modification of a method, process, composition of
matter, or product described in a PATENT APPLICATION, 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 MEDS
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, PATENT APPLICATIONS that may issue in the future,
PROPRIETARY INFORMATION, TRADE SECRETS, TECHNICAL and
SCIENTIFICinformation and KNOW-HOW for purposes of using the
LICENSED PRODUCT and theLICENSED 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 MEDS 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 invented, developed and
improved 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 is worldwide and shall mean all countries of the
world.
2.09
LICENSEE means
BEDINI TECHNOLOGY, INC., a corporation domiciled in the State of
Nevada, or any future name of the Company or any subsidiary of the
Company.
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 MEDS products sold by LICENSEE or SUB-
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 MEDS 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 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 FIVE PERCENT (5%)
of the NET SELLING PRICE, of all products sold, rented or leased
directly by LICENSEE and paid for by customers of LICENSEE. The
ROYALTY shall be reduced to THREE PERCENT (3%) of the NET SELLING
PRICE, of all products sold, rented or leased by any SUB-LICENSEE
and paid for by customers of SUB-LICENSEE. LICENSEE and
SUB-LICENSEE(S) shall be credited with ROYALTIES previously paid on
LICENSED PRODUCT returned from previous sales of LICENSED
PRODUCT.
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 of a technical nature that may
be a formula, circuitry, product assembly or configuration, or any
other information that comes under the definition of trade secrets
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 MEDS
technology, which relates to several designs of the MEDS, 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,
used and sold in the LICENSED TERRITORY by LICENSEE. LICENSEE shall
promptly inform LICENSOR of any such IMPROVEMENTS or of the filing
of any new patent applications by LICENSEE. Any IMPROVEMENTS,
design changes, modifications or developments of the LICENSED
PRODUCT or LICENSED TECHNOLOGY by LICENSEE are construed to be a
part of 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 LICENSED FIELD and
LICENSED TERRITORY, a license to use any registered TRADEMARK,
owned, acquired, developed or filed for by the LICENSOR, relating
to the LICENSED PRODUCT or LICENSED TECHNOLOGY.
3.02
The PRODUCT
LICENSE granted pursuant to Sections 3.00 and 3.01 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 be 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
The grant of this
LICENSE for accounting purposes will be valued at Fifty Eight
Thousand Dollars ($58,000) and include a ROYALTY. The consideration
to the LICENSOR by the Company shall be the right to purchase Fifty
Eight Thousand Dollars ($58,000) of Common Stock at $.0677 per
share, which is the Book Value Per Share of the Common Stock as of
December 31, 2000. The LICENSOR must purchase 856,721 shares of
restricted common stock within 10 business days of this agreement
or execute a promissory note in the amount of Fifty Eight Thousand
Dollars ($58,000), due in Ninety (90) days with interest at Seven
(7%) per annum.
4.01
(a)
LICENSEE shall
pay to LICENSOR a royalty on products made, sold, rented or leased
by LICENSEE and paid for by customers of LICENSEE. The PRODUCT
ROYALTY shall be FIVE PERCENT (5%) of the NET SELLING PRICE, per
unit of LICENSED PRODUCT sold by LICENSEE, less ROYALTIES paid on
product returned from previous sales of product, if any, actually
paid by LICENSEE.
(b)
SUB-LICENSEE(S)
shall pay to LICENSOR a royalty on products made, sold, rented or
leased by LICENSEE and paid for by customers of SUB-LICENSEE(S).
The PRODUCT ROYALTY shall be THREE PERCENT (3%) of the NET SELLING
PRICE, per unit of LICENSED PRODUCT sold by SUB-LICENSEE(S), less
ROYALTIES paid on product returned from previous sales of product,
if any, actually paid by LICENSEE(S).
(c)
The payment of
said ROYALTY shall remain in perpetuity beyond the life of any
PATENTS. The terms and conditions of this Agreement shall survive
and remain enforced in the event the Company undergoes a name
change, is acquired or merged with another Company. 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
