Exhibit 10.2
TECHNOLOGY LICENSE
and
DISTRIBUTION AGREEMENT
THIS TECHNOLOGY
LICENSE and DISTRIBUTION AGREEMENT is made as of the
1st day of August, 2008 by and between SMITH YOUNG AND ASSOCIATES,
INC., a Colorado Corporation, its successors, affiliates, and
assigns, Morton Weisbrot an individual residing in the
State of Arizona, his successors, and assigns (hereinafter all
collectively referred to as the "Licensee") and, FUEL CONCEPTS LLC,
an Ohio Limited Liability Company, its successors, affiliates, and
assigns ("Licensor") (hereinafter all collectively referred to as
the “Licensor” or “Owner”). Sometimes
referred to herein collectively as “the
parties”.
In
consideration of the representations, warranties and mutual
promises set forth herein, the parties agree as follows:
1. Owner
grants to Licensee, for a period of five (5) years from the date of
the effective date of this agreement (the “Initial
Term”), the exclusive rights to manufacture, sell and
distribute one hundred percent (100%) of all design, methods,
materials, devices, utility, and know how embodied in UNITED STATES
PATENT: 7117859 including but not limited to any other alterations,
amendments, supplemental filings, whether now known or hereafter
known, devise or contrivance of any type, character or design,
embodied in or would be added to UNITED STATES PATENT: 7117859 as
set forth on Exhibit A , attached hereto and incorporated
herein (hereinafter referred to as the “Technology”).
This Exclusive License shall be both wold-wide and throughout the
universe, whether known or yet unknown (the
“Territory”). Owner grants to Licensee three (3)
separate options to extend the term for further periods of five (5)
years each ("Option Periods"), each upon the same terms and
conditions applicable to the Initial Period, except as otherwise
hereinafter set forth. The Initial Period and every
Option Period for which Licensee has exercised its option are
hereinafter sometimes referred to together as "the
Term". Each option shall be exercised, if at all, by
notice to Owner at least sixty (60) days prior to the date the Term
would otherwise expire.
a. Licensee
shall have the exclusive right to release, sell manufacture and
distribute products embodying the Technology throughout the
Territory, as defined in this Section 1, under its trade name; to
use (including publish) the names (including all professional,
assumed or fictitious names), likenesses, photographs and
biographical and technical material of any party, including Owner,
rendering services hereunder or related to the products
embodying the Technology; and to publicly promote the Technology by
means of the internet, radio broadcast, television
broadcast, cable transmission or any other method now or hereafter
known including new technologies.
b. Except
as provided in this Agreement, all other rights of any nature in
the aforementioned Technology are reserved by Owner. All
drawing, designs, patents or duplicates thereof of the Technology
covered hereunder, and all copyrights shall remain the sole and
exclusive property of Owner, subject to the rights granted to
Licensee herein.
2. Licensee
shall enter into an Exclusive Manufacturing Agreement with Owner
for the manufacturing, packaging and shipping of the products
covered under this Agreement as forth in Exhibit B attached
hereto and incorporated herein.
3.
Licensee shall market and release for distribution products
embodying the Technology, as defined in Section 1 of this
Agreement, in the United States within one hundred-eighty (180)
days of Owner's delivery of the Licensed materials set-forth in
Section 8 of this Agreement. Licensee will market and
release for distribution products embodying the Technology in the
major foreign territories (such as Canada, Western Europe, U.K.) as
warranted by demand of foreign buyers.
4.
As consideration for this Agreement, Licensee shall pay to Owner
1,000,000 shares of Licensee’s $.001 par value common stock.
The Shares shall be fully paid for and non-assessable when issued
and shall bear a restrictive legend in accordance with
the rules and regulations of the United States Securities and
Exchange Commission.
5.
As additional consideration for this
Agreement, Licensee shall pay to Owner a royalty of Forty ($40.00)
US Dollars and Zero cents from “ Net
Receipts” on all sales
over and above Six Thousand (6,000) units per calendar year of
products embodying the Technology. This r oyalty
shall be paid out of the net receipts from the sales of products
covered under this Agreement. Licensee's "net receipts"
are defined as actual revenue derived and collected from the sale
of products sold at Licensee's wholesale price less hard costs for
manufacturing. No Owner royalty shall be paid in
connection with free or promotional goods. "Hard costs" means
all costs incurred with respect to the manufacture,
distribution and sale of products embodying the Technology
including without limitation, graphic design, artwork, printing,
including proofs and color separations, physical manufacturing and
duplication, packaging and shipping of said products. Hard costs do
not include warehousing, accounting, distribution and internet,
television, radio and retail advertising, marketing and
promotion.
a. Royalties
in respect of sales of products embodying the Technology outside
the United States shall be computed in the same national currency
as Licensee is accounted to by its licensees and shall be paid to
Owner at the same rate of exchange as Licensee is
paid. It is understood that such royalties will not be
due and payable until payment thereof or credit therefore against
advances previously taken is received by Licensee in the United
States of America. In the event Licensee is unable to
receive payment in United States dollars in the United States due
to governmental regulations, royalties therefore shall not be
credited to Owner's account during the continuance of such
inability except that (i) if any accounting rendered to Owner
hereunder during the continuance of such inability shows Owner's
account to be in a credit position, Licensee will, after Owner's
request and at Owner's expense, if Licensee is able to do so,
deposit such royalties to Owner's credit in the applicable foreign
currency in a foreign depository, or (ii) if the royalties are not
credited to Owner's account exceed the amount, if any, by which
Owner's account is in a debit position, then Licensee will, after
Owner's request and at Owner's expense, and if Licensee is able to
do so, deposit such excess royalties to Owner's credit in the
applicable foreign currency in a foreign
depository. Deposit as aforesaid shall fulfill
Licensee's obligations under this Agreement as to record sales to
which such royalty payments are applicable.
6. Statements
as to royalties payable hereunder shall be sent by Licensee to
Owner within Thirty (30) days after the receipt of manufactured
product at Licensee’s warehouse from the manufacture.
Concurrently with the rendition of each statement, Licensee shall
pay Owner all royalties shown to be due by such statement. No
statements need be rendered by Licensee for any such period after
the expiration of the Term hereof for which there are no sales of
product derived from the license hereunder. All payments
shall be made to the order of Owner and shall be sent to Owner at
Owner's address contained in this Agreement. Licensee
shall be entitled to maintain a single account with respect to all
product sales subject to this or any other agreement. Owner shall
be deemed to have consented to all accountings rendered by Licensee
hereunder and said accountings shall be binding upon Owner and
shall not be subject to any objection by Owner for any reason
unless specific objection, in writing, stating the basis thereof,
is given to Licensee within one (1) year after the date rendered,
and after such written objection, unless suit is instituted within
eighteen (18) months after the date upon which Licensee notifies
Owner that it denies the validity of the objection.
7. Owner
shall have the right at Owner's sole cost and expense to appoint a
Certified Public Accountant or attorney who is not then currently
engaged in an outstanding audit of Licensee to examine and copy
Licensee's books and records as same pertain to sales of the
Technology subject hereto, provided that any such examination shall
be for a reasonable duration and shall take place at Licensee's
offices during normal business hours on one (1) month prior written
notice and shall not occur more than once in any calendar
year.
(a) Notwithstanding
anything to the contrary contained herein, if Licensee notifies
Owner that the Certified Public Accountant designated by Owner to
conduct an audit hereunder is engaged in an outstanding audit of
Licensee on behalf of another person ("Other Audit"), Owner may
nevertheless have Owner's audit conducted by such accountant, and
the running of the time within which such audit may be made shall
be suspended until such accountant has completed the Other Audit,
subject to the following conditions:
i) Owner shall notify Licensee of
Owner's election to that effect within fifteen (15) days after the
date of Licensee's said notice to Owner;
ii) Owner's accountant shall proceed
in a reasonable continuous and expeditious manner to complete the
Other Audit and render the final report thereon to the client and
Licensee; and
iii) Owner's audit shall
not be commenced by Owner's accountant before the delivery to
Licensee of the final report on the Other Audit, shall be commenced
within thirty (30) days thereafter, and shall be conducted in a
reasonable continuous manner.
(b) The
provisions hereunder will not apply if Licensee elects to waive
said provisions which require that Owner's accountant shall not be
engaged in any Other Audit.
8. Owner shall provide
Licensee as part of Owner's delivery obligation hereunder, copies
of the original patent, including all revisions thereof,
photographs, rendering, drawings, training materials, technical
support documentation and other artwork n
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