Exhibit 10.1

 
EXCLUSIVE MASTER LICENSE AGREEMENT
 
FOR THE XYO TECHNOLOGY WITHIN THE AUTOMOTIVE INDUSTRY

 
1.  
Commencement Date

 
This Agreement made the 30th day of July 2011.
 
2.  
Description of Parties

 
Between
 
Perpetual Industries Inc., a corporation duly organized and existing under the
laws of Nevada, USA having an address at 110, 5 - 8720 Macleod Trail South,
Calgary, Alberta, Canada T2H 0M4 (hereinafter called "Perpetual")
 
and
 
Motor Sport Country Club Holdings, Inc., a corporation with an address at 11100
West 8th Avenue, Suite 200, Lakewood, Colorado, USA 80215 (hereinafter called
“Master Licensee”)
 
3.  
Recitals

 
Whereas Perpetual has developed or acquired know-how, and is the owner of rights
in and to technology for the manufacture and use of automatic balancing systems
suitable in the balancing and stabilisation of rotating systems, (XYO) as well
as rights in relation to the marketing, use, distribution and sale of XYO and
products incorporating XYO;
 
and Whereas Perpetual desires to grant to Master Licensee, and Master Licensee
wishes to obtain worldwide exclusive rights enabling Master Licensee to
manufacture or have manufactured, sell, use, and sublicense Products containing
XYO within the automotive industry as further defined in Schedule “C”, on the
terms and conditions set forth in this Agreement;
 
Now therefore this Agreement witnesses that in consideration of the mutual
covenants set out herein and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Parties to this Agreement
agree as follows:
 
4.  
Definitions and Interpretations

 
4.1.  
For the purposes of this Agreement, the following terms shall have the following
meanings:

 
a)  
"Commencement Date" shall be the date of approval of this Agreement as set forth
in Article 1 of this Agreement.

 
b)  
 “XYO” shall mean all proprietary technologies, attendant modifications,
techniques, intellectual property, and related services, that are possessed or
that are under current development or that have been developed or acquired by
Perpetual, related to automatic balancing systems for use in rotating equipment.
XYO includes XYO Patents and Know-How.

 
c)  
“Know-How” shall mean recommendations, knowledge, experience, suggestions,
drawings, reports, formulae, registered and unregistered trademarks/service
marks/design rights/copyrights, structural parameters, procedures, methods, and
standards, relating to technologies, techniques, instrumentation/equipment,
software/data processing, and documentation, that could contribute to the
successful engineering, design, fabrication, testing, troubleshooting,
evaluation, implementation, manufacturing, and commercialization of the XYO body
of knowledge and its physical embodiments including any products or applications
into which XYO may be incorporated.

 
 
 
 
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d)  
 “XYO Patents” shall mean patents applied for or granted, including any
re-issues, continuations in whole or part, divisions or combinations, renewals,
re-examinations, extensions of same, and any future patents, patent
applications, inventions, improvements, processes, manufacturing techniques, and
manufacturing concepts relative to XYO. For greater certainty, but without
limiting the foregoing, the XYO Patents include the patents and patent
applications listed in Schedule “A” attached to this Agreement.

 
 
e)  
“Confidential Information” shall include XYO as well as, without limitations,
any information relating to possible and potential uses for and applications of
XYO and automatic balancing.  Confidential Information consists of in-formation
and materials, whether oral, in tangible form, or observed, that are valuable
and not generally known by Perpetual’s competitors. Such Confidential
Information constitutes the trade secrets of Perpetual.

 
 
Confidential Information includes:

 
 
i)
Any physical sample of an embodiment of XYO, and  any packaging thereof.

 
 
ii)
Any and all information concerning XYO, including, but not limited to, formulas,
designs, devices, computer code, drawings, specifications, notebook entries,
technical notes and graphs, computer printouts, technical memoranda and
correspondence, product development agreements and related agreements.

 
 
iii)
Information and materials relating to Perpetual’s purchasing, accounting and
marketing, including, but not limited to, marketing plans, sales data, business
methods, unpublished promotional material, cost and pricing information and
customer lists.

 
 
iv)
The identity and business information concerning other entities involved with
development and production of XYO.

 
 
v)
Information of the type described above which Perpetual obtained from another
party and which Perpetual treats as confidential, whether or not owned or
developed by Perpetual.

 
 
vi)
Any information marked as confidential that relates to XYO or Perpetual.

 
 
f)
"Party" and "Parties" shall mean a party and the parties to this Agreement,
respectively.

 
 
g)
“Products” shall mean the following for the purposes of this Agreement: the
products outlined in Schedule “C” attached to this Agreement.

 
 
h)
“Sale”, and any variation thereof, including “Sell” and “Selling”, shall include
any provision of XYO for good consideration, including by way of sale, lease, or
any other arrangement.

 
 
i)
“Term” shall have the meaning set out in section 9.1(a).

 
 
j)
"Territory" shall mean exclusively and worldwide in the automotive industry in
Products as further defined in Schedule “C” attached to this Agreement.

 
4.2.  
In this Agreement, unless the context requires otherwise, the singular number
shall include the plural and vice versa; words importing the masculine gender
shall include the feminine and neuter gender; and words importing persons shall
include associations, partnerships and corporations and vice versa.

 
4.3.  
For purposes of this Agreement, an entity shall be related to or affiliated with
a Party if one of them is a subsidiary of the other or both are subsidiaries of
the same body corporate or each of them is controlled by the same person. If two
bodies corporate are affiliated with the same body corporate at the same time,
they shall be deemed to be affiliated with or related to each other.

 
4.4.  
The preamble and Schedules “A”, “B”, and “C” to this Agreement are hereby
incorporated by reference and deemed a part of this Agreement.

 
4.5.  
The headings in this Agreement are inserted for convenience of reference only
and shall not affect its interpretation.

 
4.6.  
Unless the context of this Agreement requires otherwise, reference in this
Agreement to a numbered or lettered article, section, subsection or paragraph
refers to the article, section, subsection or paragraph bearing that number or
letter in this Agreement. A reference to "this Agreement", "herein", "hereof",
"hereunder" or similar terms refers to this Agreement as a whole, together with
any Schedules and amendments to this Agreement.

 
 
 
 
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4.7.  
All references in this Agreement to dollar amounts are to U.S. funds unless
otherwise specified.

 
5.  
Details of Services Rendered

 
5.1.  
Perpetual hereby grants to Master Licensee:

 
a)  
Subject to the conditions of this Agreement, the right to use XYO, for the Term
of this Agreement, to manufacture or have manufactured, sell, and use the
Products incorporating XYO in the Territory.

 
b)  
The grant of License set out in section 5.1(a) is effective on the Commencement
Date and shall expire at the end of the Term or upon termination of this
Agreement, as defined in section 9 of this Agreement.

 
c)  
For greater certainty, it is agreed that nothing in this Agreement shall
preclude or restrict Perpetual from selling XYO, licensing to others the right
to make, use and/or sell XYO, or do any other thing in respect of XYO inside or
outside the Territory with the exception of the specified terms of this
Agreement.

 
d)  
Master Licensee shall not sublicense XYO to third parties without the prior
written permission of Perpetual, which will not be unreasonably withheld. The
terms of said contemplated sublicense shall be agreed upon by the parties before
such written permission shall be granted.

 
5.2.  
Perpetual shall communicate and make available to Master Licensee within a
mutually agreed upon time frame starting from the Commencement Date the aspects
of XYO necessary to permit Master Licensee to utilize XYO as permitted by this
Agreement. This information is at Perpetual’s discretion and may include
technical papers, software, and lists of patents, amongst other information.

 
5.3.  
Any translation necessary to use any aspect of XYO referred to in paragraph 5.2
in the Territory shall be carried out at the expense of Master Licensee.
Further, should translation of the particulars of XYO, including any related
service provided by Perpetual such as installation, recommendations, servicing,
modification, or other communications related to or arising from this agreement,
into a language other than English be deemed necessary, the costs of such
translation, and the accuracy of said translation, shall be the sole
responsibility of Master Licensee.

 
5.4.  
Perpetual will provide engineering support at a cost (if any) that is mutually
agreed upon by both parties prior to any services being performed. Such
additional costs shall be mutually agreed upon by both parties prior to any
services being performed. Allocation of time is subject to availability.

 
5.5.  
If the technical support, assistance, or information described in section 5.4
requires Perpetual’s staff to travel, then Master Licensee shall in advance of
services performed, pay reasonable expenses for accommodations, travel, and such
other reasonable costs as are incurred by Perpetual in connection with the
provision of such technical support. Perpetual shall use its best efforts to
estimate the amount of such reasonable expenses in advance of providing such
technical support services, and will provide Master Licensee with a pro-forma
invoice detailing any such expenses. Master Licensee will be required to approve
any such pro-forma invoice by way of signature at which time a new final invoice
will be issued based on the approved pro-forma invoice terms. Master Licensee
shall pay Perpetual based on terms outlined in all approved invoices.

 
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6.  
Details of Remuneration

 
6.1.  
In consideration of the rights granted by this Agreement, Master Licensee shall
pay to Perpetual the following non-refundable fees:

 
a)  
A non-refundable license fee as follows:

 
$500,000 in cash, contingent upon Master Licensee raising $1,000,000 through
offerings of its equity and/or debt securities (the “Financing Event”). Payments
towards the $500,000 cash amount will be made in stages as money is raised
during the Financing Event. For every $200,000 raised, $100,000 will be paid to
Perpetual until the total $500,000 cash portion of the license fee is paid in
full.
 
Plus, upon signing:
 
$2 million in shares of common stock of Motor Sport Country Club Holdings, Inc.
(OTCQB: VIIN)
 
(10 million shares at $0.20/share)
 
Total license fee: $2.5 million for the exclusive worldwide rights for Products
containing XYO within the automotive industry as further defined in Schedule
“C”.
 
b)  
Royalties calculated each July 31 equal to the greater of, according to the
following table: a percentage royalty on any revenue in the foregoing twelve
months that Master Licensee derived from the use, manufacture, sale, or
sub-licensing of XYO or Products incorporating XYO during the Term of the
Agreement; or the minimum annual royalty:
 

   
Greater of:
Due July 31 of:
 
% Royalty
 
Minimum Royalty
2012
 
5
 
$25,000
2013
 
5
 
$50,000
2014
 
10
 
$60,000
2015
 
10
 
$70,000
2016
 
10
 
$80,000
2017
 
15
 
$90,000
2018
 
15
 
$100,000
2019
 
15
 
$110,000
2020
 
20
 
$120,000
2021
 
20
 
$130,000

 
Royalties shall be subject to 6% annual interest compounded quarterly, on
outstanding balances after July 31, 2012.
 
Subject to regulatory approvals, if any, Perpetual and Master Licensee may elect
by mutual agreement to settle royalty payments in the form of shares of common
stock of Motor Sport Country Club Holdings, Inc. (OTCQB: VIIN), based on a share
price calculated as the weighted average share price for the twenty days prior
to the date on which Perpetual notifies Master Licensee of such election.
 
6.2.  
Master Licensee shall pay and satisfy the fees set out in section 6.1 by payment
to, or to the order of, Perpetual, by wire transfer in U.S. dollars, at the
times outlined in Schedule “C” attached to this Agreement.

 
6.3.  
In the event of expiration or termination of this Agreement pursuant to Section
9.4, Master Licensee shall, within thirty (30) days of said expiration or
termination, provide Perpetual with copies, at Master Licensee’s expense, of
Master Licensee's business records necessary to permit Perpetual to verify the
average number of Products incorporating XYO manufactured monthly by Master
Licensee within the one-year period immediately preceding the date of
termination or expiration.

 
 
 
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6.4.  
In order to verify compliance by Master Licensee with sections 6.1, 7.4 and 7.5
of this Agreement,

 
a)  
Master Licensee shall permit Perpetual or Perpetual’s authorized representative
and auditors, at any time upon reasonable notice during normal business hours,
to inspect and examine books, records, premises, products, and personnel of
Master Licensee once per Annum.

 
b)  
However, if Perpetual feels that there has been reasonable evidence of
non-compliance, then Perpetual reserves the right to, at any time upon
reasonable notice during normal business hours, inspect and examine books,
records, premises, products, and personnel of Master Licensee.

 
c)  
Furthermore, in the event of understatement pursuant to section 6.1 of this
Agreement, Master Licensee shall immediately pay to Perpetual all amounts due
and unpaid under this Agreement in the event of understatement, plus interest of
2% per month and not to exceed 20% per Annum, calculated from the date the
amount became due. If the amount due remains unpaid 30 days after the audit then
the agreement can at Perpetual's discretion be terminated.

 
d)  
In the event of non-compliance with sections 7.4 or 7.5 of this Agreement,
Master Licensee shall take measures to restore the products to compliance within
30 days. If the noncompliance continues 30 days after the audit then the
Agreement can at Perpetual's discretion be terminated.

 
e)  
Perpetual shall bear the costs and expenses to conduct said inspection or audit.
However in the event a discrepancy has occurred and an amount is due then the
costs and expenses to conduct said inspection or audit shall be borne by the
Master Licensee.

 
6.5.  
All payments are to be transferred to and made payable to the wire transfer
account specified in Schedule “B” to this Agreement.

 
7.  
Intellectual Property

 
7.1.  
The Parties hereby recognize and agree that all rights in XYO reside with
Perpetual and that Perpetual has valuable rights in and to XYO.  Nothing in this
Agreement shall be construed as granting Master Licensee any ownership rights in
and to XYO. The Parties agree that any enhancements, improvements, modifications
to XYO, or inventions related to XYO, during the course of this Agreement or
following termination shall belong to Perpetual and be deemed to form part of
XYO as defined herein.  Master Licensee hereby irrevocably assigns to Perpetual
any and all rights which it may hereafter acquire in and related to XYO.

 
For greater certainty:
 
a)  
Master Licensee shall, at Perpetual’s request and expense, apply for letters
patent either in Master Licensee’s name or otherwise as Perpetual shall direct,
and Master Licensee agrees to assign and does assign to Perpetual all of Master
Licensee’s right, title and interest in and to such enhancements, improvements,
modifications to XYO, or inventions related to XYO, all of the foregoing without
royalty or any other consideration to Master Licensee, other than as
specifically provided for in this Agreement.

 
b)  
Master Licensee agrees that should any right, title or interest in or to any
enhancements, improvements, modifications to XYO, or inventions related to XYO,
become vested in Master Licensee by operation of law or otherwise, Master
Licensee shall hold the same in trust from Perpetual and at the request of
Perpetual shall immediately and unconditionally assign any such right, title or
interest to Perpetual.

 
c)  
Master Licensee further agrees with Perpetual to execute and deliver such
further and other documents and do and perform and cause to be done and
performed such further or other acts and things as may be necessary or desirable
in the opinion of Perpetual to give full effect to this Agreement, including
without limiting the generality of the foregoing, such documents, acts and
things as may in the opinion of Perpetual be necessary or desirable to obtain
and maintain patents, copyrights and/or industrial designs in respect of
enhancements, improvements, modifications to XYO, or inventions related to XYO,
and to vest the entire right, title and interest in and to patents, copyrights
and/or industrial designs in respect of such in Perpetual.

 
 
 
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7.2.  
Perpetual may, in its sole discretion, but shall not be obliged to, take all
reasonably necessary steps to protect XYO by way of patent protection in any
part of the worldwide market in which such protection has not yet been obtained,
including but not limited to patent applications specifically describing the
application of XYO to the Products. All costs associated with obtaining such
patent protection, and all maintenance fees payable in respect thereof, shall be
borne by Perpetual. Should Perpetual choose not to pursue such patent
protection, then Master Licensee shall have the option, with the specific
written consent of Perpetual, of pursuing this same patent protection and shall
pay all costs associated with obtaining such patent protection and all
maintenance fees payable thereon. Master Licensee must name Perpetual on any
such patent and patent application and shall grant Perpetual a royalty-free
right to use the said patent and patent application.

 
7.3.  
Master Licensee shall not directly or indirectly contest ownership or validity
of any aspect of XYO, either during the term of this Agreement or at any time
thereafter, nor shall it voluntarily assist in any action taken by any third
party, an object of which action is to contest said ownership or validity.

 
7.4.  
Master Licensee shall adhere to any reasonable quality standards that may be set
by Perpetual from time to time and of which Master Licensee has notice relating
to the use of XYO.

 
7.5.  
Notwithstanding any other provision of this Agreement, Master Licensee shall be
solely responsible for the observance of any and all standards of quality,
safety and effectiveness that may be set by law from time to time by any
government or government agency relating to the manufacture of embodiments
incorporating XYO, including but not limited to regulations relating to the
designation and markings of trademarks and patents on the Products.

 
7.6.  
If either Master Licensee or Perpetual shall have knowledge that XYO is being
infringed, such knowledge shall be promptly conveyed to the other Party.
Perpetual may, but shall not be obliged to, enter suit to prevent infringement
or further infringement and to prosecute the suit. Master Licensee agrees to
provide such reasonable assistance as may be required by Perpetual for the
purpose of such suit and may, at its own expense, be represented by counsel of
its own choosing. Subject to the terms of an order of a court of competent
jurisdiction, the costs of the suit (other than the costs of Master Licensee's
own counsel) shall be borne by Perpetual and Perpetual shall be solely entitled
to the recovery of any damages or settlement monies. In the event that Perpetual
refuses to prosecute the suit or to continue the prosecution of the suit to
judgment or settlement, then Master Licensee may, upon the giving of notice to
Perpetual, bear the costs of prosecuting or continuing the suit, as the case may
be, and shall be entitled to retain all damages or settlement monies recovered
as a result of the suit.

 
7.7.  
Notice of the license granted herein may be filed in any Patent Office by either
Party hereto, in respect of any of the XYO Patents. Said Notice shall have the
form required by the laws of the jurisdiction in which it is being filed, and
shall be executed by the Parties upon the request of either Party.

 
7.8.  
Master Licensee agrees that it shall not disclose to any third party any
Confidential Information of Perpetual except as is necessary for Master Licensee
to exercise any right under this Agreement or with the written consent of
Perpetual. In the event of such permitted disclosure, Master Licensee shall make
said disclosure conditional on the recipient's acceptance of the terms of a
confidentiality agreement, the terms of which to be acceptable to Perpetual, not
to disclose any Confidential Information of Perpetual to any other party.

 
7.9.  
Master Licensee agrees not to use XYO, as defined herein, in conjunction with
any automatic balancing device or technology, for any purpose outside the term
and terms of this Agreement. For greater certainty, this restriction applies to
all devices identical to, similar to, or in competition with any aspect of XYO,
without regard to ownership or patentability of such devices or technology.

 
7.10.  
If Master Licensee desires to carry out any action, whether written or oral,
relating to or referring to XYO or any material marked confidential by Perpetual
then Master Licensee agrees to seek Perpetual’s approval and to promptly make
full disclosure in writing to Perpetual providing full details of such desired
action before such action is to be carried out. In particular, but without
limiting the generality of the foregoing, Master Licensee shall not make any
patent applications relating to or referring to XYO or any material marked
confidential by Perpetual without the specific written consent of Perpetual,
which consent shall be granted at the sole discretion of Perpetual.

 
 
 
 
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7.11.  
Master Licensee agrees that Perpetual may be irreparably injured by a breach of
this Agreement by Master Licensee, which breach may not be adequately
compensated for by damages, and Perpetual shall be entitled to equitable relief,
including injunctive relief and specific performance, without the need to prove
irreparable harm and without the necessity of posting a bond in the event of
breach of any provisions of this Agreement. Such remedies shall not be deemed to
be exclusive remedies for breach of this Agreement, but shall be in addition to
all other remedies available at law.

 
7.12.  
In the event of breach of this Agreement by Master Licensee, Master Licensee
agrees to pay Perpetual’s actual costs and expenses in enforcing the terms of
this Agreement including, without limitation, any court costs, fees between a
solicitor and the solicitor’s own client, and all disbursements. In the event of
breach of section 7.9 of this Agreement by Master Licensee, Master Licensee
agrees to immediately assign to Perpetual Master Licensee’s rights, interest,
and benefits derived from Master Licensee’s actions as defined in section 7.9.
This assignment shall not be deemed to be an exclusive remedy for the said
breach of this Agreement, but shall be in addition to all other remedies
available at law.

 
7.13.  
If, during the term of this Agreement, Master Licensee develops or invents any
improvements to XYO, it shall promptly make full disclosure in writing to
Perpetual and assign its rights in said improvements to Perpetual. In return for
the assignment of rights to Perpetual, Perpetual agrees to grant a royalty-free
license to Master Licensee for the use of said improvements, to manufacture and
use in the Products.

 
7.14.  
Master Licensee recognizes that in order to take full advantage of the benefits
afforded by the use of XYO, some modification to its existing or future products
may be required and/or necessary. Failure to correctly implement such
modifications may have an adverse effect on the functioning of XYO and
dramatically affect the performance of XYO.

 
7.15.  
Master Licensee agrees to provide its best efforts in cooperating with Perpetual
to incorporate XYO into the Products. Specifically, Master Licensee agrees to
provide Perpetual with all information, access to personnel, and components
required by Perpetual in a timely manner, as well as including Perpetual in
design, manufacturing, and planning discussions. Master Licensee understands
that Perpetual is primarily a licensor and not primarily a manufacturer of
products, and therefore, it is essential that Master Licensee cooperate with
Perpetual by providing the said information, access, components, and discussions
in order for XYO to be successfully optimized and implemented into Master
Licensee’s Products under the terms of this Agreement.

 
7.16.  
The parties mutually agree that all promises, conduct, and statements made in
the course of reaching this Agreement, including the fact of Agreement, are
confidential and will not be disclosed voluntarily to the extent permitted by
law, and without the specific written consent of both parties. Without limiting
the generality of the foregoing, the specific information contained within
section 6.1 of this Agreement shall be kept confidential.

 
7.17.  
The Parties acknowledge and agree that they have entered into a Nondisclosure
and Noncircumvention Agreement (the “NDA”) that governs the disclosure of
Confidential Information as defined in the NDA, which definition is enlarged by
this Agreement, and that this Agreement supersedes without nullifying the NDA.

 
 
 
 
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8.  
Product Liability

 
8.1.  
Master Licensee shall indemnify and save harmless Perpetual and Perpetual's
directors, officers, employees, agents and assigns from and against all claims,
actions, obligations, liabilities, damages, losses and judgements, including any
incidental costs and expenses, arising out of or attributed, directly or
indirectly, to:

 
a)  
any defects in the design and/or manufacture of the Products or other
embodiments;

 
b)  
the failure of Master Licensee or Master Licensee's directors, officers,
employees, agents, assigns or successors to manufacture the Products in
accordance with the claims described in the XYO Patents;

 
c)  
the alteration, modification, abuse or misuse of the Products by Master Licensee
or by Master Licensee's directors, officers, employees, agents and assigns;

 
d)  
the fault or negligence of Master Licensee or Master Licensee's directors,
officers, employees, agents, assigns or successors; or

 
e)  
the failure by Master Licensee to comply with the requirements of sections 5.1,
5.3, 7.4 or 7.5.

 
9.  
Term and Termination

 
9.1.  
The Term of the Agreement is as follows:

 
a)  
subject to the prior renewal or termination of this Agreement pursuant to the
terms and conditions hereof, is for a period of one hundred twenty months (10
years), commencing on the Commencement Date. This agreement may be renewed by
mutual written consent of both parties.

 
b)  
Such renewal shall be on the terms and conditions agreed upon by both parties.

 
9.2.  
If a petition in bankruptcy or insolvency should be filed by or against a Party,
or if application should be made for the appointment of a receiver for a Party
of its property, or if a Party should make an assignment for the benefit of
creditors, be unable or fail to pay its debts regularly as they become due,
suspend or be caused to suspend business, or commit or cause to be committed any
other act amounting to business failure, then in any and all such events, the
solvent Party may at its option immediately terminate this Agreement without the
necessity of serving notice, written or otherwise, on the insolvent or bankrupt
Party.

 
9.3.  
Either Party may terminate this Agreement in the event that the other Party
breaches a material condition hereof, provided that the first Party gives
written notice to the second Party of the breach. The second Party shall have
thirty (30) days from receipt of such notice to correct the breach. In the event
the breach is not remedied within this period, the first Party may, in its sole
discretion, terminate this Agreement within a reasonable time after the expiry
of the thirty (30) day period.

 
9.4.  
Subject to Section 9.5, during the ninety (90) day period following the
expiration or termination of this Agreement for any reason other than
termination by the Licensor pursuant to Section 9.3, Master Licensee shall be
entitled to sell the Products manufactured by or for it prior to the date of
termination or expiration.  Upon the expiration or termination of this Agreement
in accordance with Section 9 hereunder, all amounts owed under Section 6.1 of
this Agreement shall no longer accrue and shall be due and any amount that is
due and payable through the date of termination shall be payable within 30 days
after the date of termination. Notwithstanding the foregoing, the amount of any
Minimum Royalty amount due and payable under Section 6.1 shall be payable
pro-rata for the then current year calculated by multiplying the amount due and
payable for the then current year by a fraction the numerator being the number
of days from January 1 of the current year through the date of termination and
the denominator being 365. Beginning on the date of termination, all obligations
of any party arising from this Agreement (including, but not limited to any
further amounts owed as a Minimum Royalty under Section 6.1), shall, in all
respects, be deemed to be null and void and of no further force and effect.

 
 
 
 
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9.5.  
Notwithstanding any other provision of this Agreement, the Parties agree and
acknowledge that the provisions of 6.1, 6.4, 7.1, 7.3, 7.9, 7.10, 7.11, 7.12,
7.13, 7.16, 9.3, 9.4, 9.5, and all of Articles 8 and 10, and any other
provisions of this Agreement necessary to give efficacy thereto, shall survive
the expiration or termination of this Agreement and shall remain in full force
and effect notwithstanding such expiration or termination.

 
9.6.  
Any termination of this Agreement shall be without prejudice to any other rights
(including any right of indemnity), remedy or other relief vested in either
Party or to which either Party may otherwise be entitled pursuant to this
Agreement.

 
 
10.  
General

 
10.1.  
Warranties by both parties are as follows:

 
a)  
Each Party to this Agreement warrants that it is not under any legal obligation
that would prevent it from entering into this Agreement or that would prevent or
hinder the carrying out of its terms, and that all internal authorizations
required for the entering into of this Agreement have been or will be made,
including any required authorizations by its Board of Directors, or otherwise.

 
b)  
Perpetual hereby warrants that it, or a company related to or affiliated with
it, is the sole owner of all rights in and to XYO and that no rights relating to
XYO inconsistent with the rights granted to Master Licensee in this Agreement
have been granted to any other party, and that it is under no legal obligation
to grant any rights relating thereto to any third party.

 
c)  
The Parties agree that, except as may be expressly provided in this Agreement,
neither has made or makes to the other any representations or warranties
respecting the compensation that the other may expect to earn or receive
pursuant to this agreement or otherwise.

 
d)  
Save and except as expressly set forth in this section 10 of the Agreement,
Perpetual expressly disclaims and excludes all express and implied
representations and warranties, whether statutory or otherwise.

 
10.2.  
Perpetual and Master Licensee are and shall be independent contractors and
Perpetual is not and shall not be the agent or legal representative of Master
Licensee for any purpose whatsoever. Neither Party is granted any right or
authority to assume or to create any obligation or responsibility, express or
implied on behalf of or in the name of the other Party or to bind the other
Party in any manner whatsoever.

 
10.3.  
The Parties hereby agree that they shall be subject to the following
obligations:

 
a)  
not to make any false or misleading representations, warranties or guarantees in
respect of XYO under any circumstances whatsoever;

 
b)  
not to hold out either party as having any right or authority to assume or to
create any obligation or responsibility on behalf of or in the name of the other
party or to bind the other party in any manner whatsoever other than as may be
expressly provided in this Agreement; and

 
c)  
to promptly inform each other of any material complaints, whether verbal or
written, which either party has received from any person with respect to the
Products.

 
10.4.  
No Party may assign this Agreement without the prior written consent of the
other Party, which consent shall not be unreasonably withheld. Any attempt to
assign this Agreement without such written consent shall be void.

 
10.5.  
It is agreed between the Parties that neither of the Parties shall be held
responsible for damages caused by delay or failure to perform their respective
undertakings under the terms of this Agreement when the delay or failure is due
to fires, strikes, floods, acts of God, wars, riots, insurrections, lawful acts
of public authorities, or delays or defaults caused by common carriers, that
cannot reasonably be foreseen or provided against.

 
10.6.  
The delay or failure in performance excused by section 10.5 of this Agreement
shall only be excused for so long as the causes of such excusable delay or
failure subsist. The Parties shall resume the performance of their respective
undertakings forthwith upon cessation of the cause of such excusable delay or
failure.

 
 
 
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10.7.  
No covenant or condition of this Agreement may be waived except by the written
consent of the waiving Party, and forbearance or indulgence by the waiving Party
in any regard whatever shall not constitute a waiver of the covenant or
condition to be performed by the other Party and until complete performance by
the other Party of the covenant or condition, the waiving Party shall be
entitled to invoke any remedy available under this Agreement or at law, despite
the forbearance or indulgence.

 
10.8.  
If any part of this Agreement is found to be invalid by any court of competent
jurisdiction, that part shall be deemed severed from this Agreement and shall
not affect the validity of the remainder, which remainder shall remain in full
force. Such severance shall have effect only in the geographic area within which
such court has jurisdiction.

 
10.9.  
All notices required to be forwarded pursuant to this Agreement shall be written
in English and sent by email, registered mail, personal delivery or facsimile to
the addresses or facsimile numbers set out below or such other address or
facsimile number as either Party may advise.

 
 
In the case of Perpetual Industries Inc.:

 
 
5-8720 Macleod Trail South, #110

 
 
Calgary, Alberta

 
 
Canada T2H 0M4

 
 
fax 403-780-2188

 
 
email notice@perpetualindustries.com

 
 
In the case of Master Licensee:

 
 
To the address set forth on page 1 of this Agreement.

 
 
Any notice delivered by mail or email shall be deemed given when received. The
date of receipt of any notice by facsimile shall be the date upon which the
transmitter of the facsimile receives confirmation of the facsimile
transmission.

 
10.10.  
This Agreement shall be governed in accordance with the laws of the Province of
Alberta, Canada.

 
10.11.  
In the event of arbitration and/or disputes,

 
 
a)
All disputes arising from the execution of, or in connection with, this
Agreement shall be settled through friendly consultation between both
parties.  In case no settlement can be reached, the disputes shall be submitted
for arbitration.

 
 
b)
The arbitration shall take place in Calgary, Alberta Canada and shall be
governed by the rules of the International Commercial Arbitration Rules of the
British Columbia International Commercial Arbitration Centre in Vancouver,
British Columbia, Canada.

 
 
c)
The arbitration award shall be final and binding on both parties.

 
10.12.  
This Agreement constitutes the entire agreement between the Parties in respect
of its subject matter and supersedes all prior and contemporaneous agreements,
understandings and discussions, whether oral or written, between the Parties.
There are no warranties, representations or other agreements between the Parties
in connection with its subject matter except as specifically set forth in this
Agreement.

 
10.13.  
No change or modification of this Agreement shall be valid unless it is in
writing and signed by each Party hereto.

 
10.14.  
This Agreement is binding on all successors, permitted assigns, heirs, executors
and administrators of the Parties hereto.

 
10.15.  
This Agreement may be executed in any number of counterparts and all of these
counterparts shall for all purposes constitute one agreement binding on the
Parties and be deemed originals for all purposes notwithstanding that all
Parties are not signatory to the same counterpart.

 
 
 
 
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10.16.  
Neither party shall be liable to the other party for any delay or omission in
the performance of  any obligation under this Agreement, other than the
obligation to pay monies, where the delay or omission is due to any cause or
condition beyond the reasonable control of the party obliged to perform,
including, but not limited to, strikes or other labor difficulties, acts of God,
earthquakes, acts of government (in particular with respect to the refusal to
issue necessary import or export licenses), war, riots or embargoes (“Force
Majeure”).  If Force Majeure prevents or delays the performance by a party of
any obligation under this Agreement, then the party claiming Force Majeure shall
promptly notify the other party thereof in writing, and take reasonable action
to mitigate loss and damage.

 
Signatory Information
 
In witness whereof, the Parties have caused this Agreement to be executed as of
the day and year first written above.
 

 
Perpetual Industries Inc.
 

 
___________________________________
 
(Signature)
 
Brent W. Bedford
 
President and CEO
 
___________________________________
 
(Date)
 

 
Motor Sport Country Club Holding, Inc.
 

 
___________________________________
 
(Signature)
 
Claus Wagner
 
Chairman and CEO
 
___________________________________
 
(Date)
 

 
Witness
 

 
___________________________________
 
(Signature)
 
___________________________________
 
(Printed Name)
 
___________________________________
 
(Date)
 
 
 
 
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Schedule A: Patent and Patent Applications List
 
This information will be provided in the final signed version of the contract.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Schedule B: Wire Transfer and Payment Information
 
All (U.S. Dollar) payments to Perpetual shall be made by wire transfer payable
and submitted to:
 
For credit to: Perpetual Industries Inc.
 
 
IMPORTANT NOTE:  To ensure a successful transfer you must promptly notify
Perpetual of the wire transfer by e-mail to notice@perpetualindustries.com and
provide details of the payment sent, file name or reference number and the name,
telephone and address of the transmitting bank. A scanned copy of the sending
bank’s wire transfer instructions must be attached to the email.
 
 
 
 
 
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Schedule C: Products, Territories, Exclusivity, and Remuneration
 
Products: The XYO Racing Brand, including the following applications for use in
the automotive and/or marine industry:
 
§  
cooling fans

 
§  
drive shafts

 
§  
crank shafts

 
§  
wheels

 
§  
flywheels

 
§  
clutches

 
§  
constant-velocity joints

 
§  
internal combustion engines

 
§  
torsional/transverse balancers for I/C engines

 
§  
aftermarket shaft-mounted boat propeller balancers
for use on high performance sport boats.

 
§  
electric motors for use only in automobiles

 
§  
forced induction devices

 
Territory: Exclusive worldwide right to manufacture, have manufactured, sell,
use and sublicense, within the automotive industry.
 

 

15