Document:

ex101.htm

Exhibit 10.1

 

EMPLOYEE AGREEMENT

This Agreement, entered into as of July 1, 2010 by and between YOU BLAST GLOBAL, INC., (the “Company”) a Delaware Corporation organized under and by virtue of the laws the State of Delaware, having its principal place of business at 81 Greene Street, 4th Floor, New York, New York 10012, and JEFFREY D. FORSTER (“Employee”) having an address at 400 Alton Road, Apt 1706, Miami Beach, FL 33139.

 

WHEREAS, the Company desires to continue to employ the Employee, and the Employee desires to continue his employment with the Company; and

 

 

WHEREAS, the Company and the Employee wish to set forth the terms and conditions of the Employee's employment with the Company:

 

 

NOW, THEREFORE, in consideration of the mutual promises, warranties and covenants set forth below, the parties hereto, intending to be legally bound, hereby agree as follows:

 

 

1. Employment. Effective as of the commencement date described in Section 2 below, the Company employs the Employee and the Employee accepts employment by the Company upon the terms and conditions hereafter set forth.

 

2. Term of Employment. The employment of the Employee under this Agreement shall commence as of July 1, 2010 and terminate on June 30, 2012. Thereafter, this Agreement shall be extended automatically for successive terms of One (1) year unless (i) the Company or the Employee shall give written notice of termination to the other party hereto at least thirty (30) days prior to the termination of the initial term of employment hereunder or any renewal term thereof, or (ii) unless earlier terminated as herein provided. The initial term of this Agreement and any renewal term thereof are hereinafter collectively referred to as the "Employment Period."  However, this Agreement shall also be directly contingent on the attainment of investment funding of at least Three Million Two Hundred Fifty Thousand ($3,250,000) achieved directly through the efforts of Employee and or John Thomas Financial and or its agents or affiliates, on or before September 30, 2010.  Should Employee and or John Thomas Financial fail to raise said funding on or before September 30, 2010, this Agreement and Employees employment there under shall immediately be terminated.   This agreement shall also not be considered in full force and effect until approved by the Company’s Board of Directors and until receiving background clearance of Employee from the Company’s auditors.

 

3. Scope of Duties. During the Employment Period, the Employee shall be employed as the President and Chief Executive Officer (“CEO”) of the Company as well as such other duties and responsibilities commensurate with that position, which may be assigned to him by the Board of Directors of the Company. The Employee shall perform such service in good faith and comply with all rules, regulations and policies established or issued by the Company.

 

 

4. Extent of Service. The Employee shall devote his time, attention and energies to the business of the Company, and shall not during the Employment period engage in any other business activity which conflicts with the duties of the Employee hereunder or is contrary to the best interests of the Company.

 

 

 

  

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5. Compensation. In consideration of the services rendered by the Employee hereunder, the Company shall pay the Employee an aggregate base salary of Two Hundred Forty Thousand ($240,000.00) Dollars per annum (the "Base Salary"), payable bi-weekly. In addition to the Base Salary, the Employee shall also be issued a signing bonus of One Million (1,000,000) shares upon the full execution of this agreement by both parties and upon Board Approval and the attainment of investment funding as described in paragraph 2 above.  Additionally, during the first year of this Agreement, Employee shall receive an additional 250,000 shares of the Company’s common stock per quarter which shall vest on the following dates provided that this Agreement is not breached and remains in effect: October 1, 2010; January 1, 2011; April 1, 2011 and July 1, 2011.  Should Employee terminate this Agreement said two million shares, or any portion thereof, shall be returned to Company on prorated basis for time remaining in this term. The Employee shall also be entitled to the following:

 

In addition to the compensation described above, as further compensation for his efforts and services, Employee shall be issued from the Company an additional One Million (1,000,000) shares upon attaining certain achievements to be determined at a later date.

6. Business Expenses. During the Employment period, the Company shall reimburse the Employee for all reasonable and necessary travel expenses and other disbursements incurred by him for or on behalf of the Company in the performance of his duties hereunder (hereinafter referred to as "Business Expenses") upon presentation by the Employee to the Company of appropriate expense reports.  Additionally, Employee shall receive a monthly housing allowance towards the rent of an apartment in New York City, in the amount of $4500.00. Employee shall also be permitted to participate in all group health, life, hospitalization and disability insurance programs, pension plans, stock option plans and similar benefits that are now or may become available to employees of the Company.  During the period Employee is employed hereunder, Employee shall be entitled to vacations in accordance with the vacation policy of the Company.

 

7. Death. If the Employee dies during the Employment Period, his employment hereunder shall be deemed to terminate as of the last day of the month during which his death occurs. Upon the death of the Employee, neither the Employee nor his beneficiaries or estate shall have any further rights or claims against the Company, except the right to receive:

 

 

A. The unpaid portion of the Base Salary, computed on a pro rata basis to the date of termination;

 

 

B. Any earned, but unpaid commissions or other sales incentives;

 

 

C. Unused personal and vacation days to which the Employee is entitled in accordance with Company policy;

 

 

D. Reimbursement for any unpaid business expenses; and

 

8. Termination for Cause. Upon furnishing of notice to the Employee, the Company may terminate the employment of the Employee for cause at any time during the Employment period.  For purposes hereof, “cause” shall mean and be limited to: (i) Employee’s breach of any of the representations, warranties or covenants set forth in this agreement;  (ii) Employee’s conviction of any crime or offense involving money or other property of the Company, or its subsidiaries or which constitutes a felony in the jurisdiction involved; , (iii) Employee’s performance of any act or failure to act, for which if he were prosecuted and convicted, would constitute a crime or offense involving money or property of the Company or its subsidiaries, or which would constitute a felony in the jurisdiction involved, or (iv) Employee's failure or refusal to perform his duties required by this Agreement, provided that Employee shall have first received written notice from the Company stating with specificity the nature of such failure and or refusal and affording Employee an opportunity, as soon as practicable, to correct the acts or omissions complained of.  Should Employee's employment be terminated by the Company for cause as herein defined, Employee’s Base Salary and his eligibility for all other benefits provided by the Company shall cease as of his termination date, after which time the Company shall have no other further liability or obligation of any kind to the Employee under this Agreement, except the Employee shall have the right to receive:

 

 

  

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A. The unpaid portion of the Base Salary, computed on a pro rata basis to the date of termination;

 

B. Reimbursement for any unpaid business expenses;

 

 

C. Any earned but unpaid commission or other sales incentives;

 

 

D. Three months’ severance pay payable in one lump sum within thirty (30) days of termination by Company if Employee is terminated within the first year of this Agreement; Six months’ severance pay, payable by a Three month lump sum within thirty (30) days of termination by Employer and monthly payments over next three months if terminated by Company following June 30, 2011.

 

 

E.  Unused personal and vacation days to which the Employee is entitled in accordance with Company policy; and

 

 

F. Any post-termination benefits in accordance with the Company welfare and benefit plans.

 

 

9. Employee Acknowledgments. Employee recognizes and acknowledges that in the course of Employee's employment it will be necessary for Employee to acquire information which could include, in whole or in part, information concerning the Company's original ideas and creative innovations, sales, sales volume, sales methods, sales proposals, customers and prospective customers, suppliers and prospective suppliers, identity, practices and procedures of key purchasing and other personnel in the employ of customers and prospective customers and suppliers and prospective suppliers, amount or kind of customer's purchases from the Company, research reports, the Company's computer program, system documentation, special hardware, related software development, the Company's manuals, methods, ideas, improvements or other confidential or proprietary information belonging to the Company or relating to the Company's affairs (collectively referred to herein as "Confidential Information") and that such information is the property of the Company). 

 

Employee further agrees that the use, misappropriation or disclosure of the Confidential Information would constitute a breach of trust and could cause irreparable injury to the Company, and it is essential to the protection of the Company's good will and to the maintenance of the Company's competitive position that the Confidential Information be kept secret and the Employee agrees not to disclose the Confidential Information to others or use the Confidential Information to Employee's own advantage or the advantage of others.

 

Employee further recognizes and acknowledges that it is essential for the proper protection of the business of the Company that Employee be restrained from soliciting or inducing any employee of the Company to leave the employ of the Company, or hiring or attempting to hire any employee of the Company.

 

 

 

 

  

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10. Non-Disclosure of Confidential Information. Employee shall hold and safeguard the Confidential Information in trust for the Company, its successors and assigns and shall not, without the prior written consent of the Company, misappropriate or disclose or make available to anyone for use outside the Company organization at any time, either during his employment with the Company or subsequent to the termination of his employment with the Company for any reason, including, without limitation, termination by the Company for cause or without cause, any of the Confidential Information, whether or not developed by Employee, except as required in the performance of Employee's duties to the Company.

 

Employee, its officers, directors, agents, servants or employees shall, during the term of this Agreement and for at least one (1) year thereafter shall not disclose in any manner to any person, firm or corporation, any knowledge or information pertaining to the conduct or details of processes, formulas, machinery, devices, products and components used by either party in carrying on its own business.  Employee shall require each and any of its, representatives and agents to whom such knowledge or information is made available to observe the party's obligations under this Agreement.

 

Employee parties shall ensure the protection of that data deemed to be, and properly marked "confidential", "private" or "proprietary", such as, sales figures, pricing, client lists, and forecast data as well as business plans and ideas. Employee agrees to protect such proprietary data from dissemination outside its originally intended channels. Employee agrees to proper and timely notification in the event any such breach does occur

 

 

Employee further agrees that Employee shall not in any way, directly or indirectly, disparage the Company or any of its executives, board members or employees, or any other PRODUCTS marketed by the Company.

 

 

11. Return of Materials. Upon the termination of Employee's employment with the Company for any reason, including without limitation termination by the Company for cause or without cause, Employee shall promptly deliver to the Company all correspondence, manuals, orders, letters, notes, notebooks, reports, programs, proposals and any documents and copies concerning the Company's customers or concerning products or processes used by the Company and, without limiting the foregoing, will promptly deliver to the Company any and all other documents or material containing or constituting Confidential Information.

 

12. Non-Solicitation of Customers and Suppliers. Employee shall not during his time of employment with the Company, directly or indirectly, solicit the trade of, or do business with, any customer or prospective customer, or supplier or prospective supplier of the Company for any business purpose other than for the benefit of the Company if said solicitation would in any way negatively impact Employer’s business relationship with that entity. Employee further acknowledges that, in consideration of the promises contained in the Agreement and to induce the Company to enter into this Agreement, he shall not for One (1) year following the termination of his employment with the Company, including, without limitation, termination by the Company for cause or without cause, directly or indirectly, solicit the trade of, or do business with, any person or entity whatsoever who or which is or was a customer or supplier of the Company in any of the territory or territories assigned to the Employee during the Employment Period, with respect to products of the same or similar kind as those presently or in the future distributed by the Company.

 

 

 

  

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13. Non-Solicitation of Employees. The Employee shall not during his employment with the Company and for One (1) year following termination of Employee's employment with the Company, including, without limitation, termination by the Company for cause or without cause, directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee, current or future, of the Company to leave the Company for any reason whatsoever, or hire any current or future employee of the Company.

 

 

14. Advice of Counsel/Restrictive Covenants. The Employee has had the opportunity to consult with independent counsel and understands the nature of and the burdens imposed by the restrictive covenants contained in this Agreement. The Employee represents and acknowledges that such covenants are reasonable, enforceable, and proper in duration, scope and effect. Moreover, Employee represents and warrants that his experience and capabilities are such that the restrictive covenants set forth herein will not prevent him from earning his livelihood and that Employee will be fully able to earn an adequate livelihood for himself and his dependents if any of such provisions should be specifically enforced against Employee.

 

 

15. Authorization to Modify Restrictions. The Employee acknowledges that the remedies at law for any breach by Employee of the provisions of the restrictive covenants will be inadequate and that the Company shall be entitled to injunctive relief against the Employee in the event of any such breach, in addition to any other remedy and damage available. The Employee acknowledges that the restrictions contained herein are reasonable, but agrees that if any court of competent jurisdiction shall hold such restrictions unreasonable as to time, geographic area, activities, or otherwise, such restrictions shall be deemed to be reduced to the extent necessary in the opinion of such court to make them reasonable.

 

16. No Prior Agreements. Employee represents and warrants that he is not a party to or otherwise subject to or bound by the terms of any contract, agreement or understanding which in any manner would limit or otherwise affect his ability to perform his obligations hereunder, including, without limitation, any contract, agreement or understanding containing terms and provisions similar in any manner to those contained in Section 12 hereof. Employee further represents and warrants that his employment with the Company will not require the disclosure or use of any Confidential Information.

 

17. Covenants of the Essence. The covenants of the Employee set forth herein are of the essence of this Agreement; they shall be construed as independent of any other provision in this Agreement and the existence of any claim or cause of action of the Employee against the Company, whether predicated on this Agreement or not, shall not constitute a defense to the enforcement by the Company of these covenants.

 

 

18. Tolling Period. If it should become desirable or necessary for the Company to seek compliance with the restrictive covenants by judicial proceedings, the period during which the Employee will not engage in the activities prohibited by Sections 12 and 13 hereof shall be extended to the first anniversary of the date of the judicial order requiring such compliance.

 

19. Arbitration. The parties expressly agree that all disputes or controversies arising out of this Agreement, its performance, or the alleged breach thereof, if not disposed of by agreement, shall be resolved by arbitration in accordance with this section. Either party must demand such arbitration only within Six (6) months after the controversy arises by sending a notice of demand to arbitrate to the American Arbitration Association (the "Association") within then State and City of New York, with a copy thereof to the other party. The dispute shall then be arbitrated by a three-arbitrator panel pursuant to the Commercial Rules of the Association at the Association office in New York, New York. In the disposition of the dispute, the arbitrators shall be governed by the express terms of this Agreement and otherwise by the laws of the State of New York which shall govern the interpretation of the Agreement.  The decision of the arbitrator shall be final, conclusive, and binding on the parties to the arbitration.  Judgment may be entered on the arbitrator's decision in any court having jurisdiction, and the parties irrevocably consent to the jurisdiction of the courts of the State of New York for this purpose.  The losing party in such arbitration shall pay all the costs and expenses of such arbitration and all the reasonable attorney's fees and expenses of the other party hereto.

 

 

 

  

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20. Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing, personally delivered, mailed or telecopied, if to the Employee, to the Employee's residence as contained in Company records, and if to the Company, to its principal place of business set forth in the first paragraph of this Agreement.

 

21. Assignment. This Agreement is personal in its nature and the Employee shall not, assign or transfer this Agreement or any rights, duties or obligations hereunder.

 

22. Entire Agreement. This Agreement constitutes the full and complete understanding and agreement of the parties hereto with respect to any employment of the Employee by the Company and supersedes all prior agreements and understanding with respect to the subject matter hereof, whether written or oral. This Agreement may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.

 

 

23. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

 

24. Remedies. All remedies hereunder are cumulative, are in addition to any other remedies provided by law and may be exercised concurrently or separately, and the exercise of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy. No failure or delay in exercising any right or remedy shall operate as a waiver thereof or modify the terms of this Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

 

	Employer:   	 	 	Employee:	 
	 	 	 	 	 
	YOU BLAST GLOBAL, INC.  	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	
By:   /s/ Philmore Anderson IV  

	 	 	
By:  /s/ Jeffrey D. Forster

	 
	
Chief Executive Officer   

	 	 	
Employee

	 
	
 

	 	 	
 

	 

                                                             

                                                              

   

 

 

 

6ex1016.htm

Exhibit 10.16

 

COOPERATION AGREEMENT

 

THIS COOPERATION AGREEMENT ("Agreement") dated this _____ day of _____ 2010 by and between the Tongji University of China, having its principal place of business at 4800 Cao An Road, 201804, Shanghai, P.R. China, hereinafter referred to as "Tongji University", and The Coates Trust and Coates International, Ltd, having its principal place of business at 2100 Highway 34 & Ridgewood Road, Wall Township, New Jersey 07719-9738, United States, hereinafter collectively referred to as "Coates".

 

RECITALS

 

WHEREAS, Coates owns and has the rights to certain patented technology and technical information relating to internal combustion engine design known as the Coates Spherical Rotary Valve Internal Combustion Engine (the "CSRV Engine").

 

WHEREAS, Tongji University is contracted to test the CSRV Engine at its Automobile Advanced Research Center in Shanghai, China, under the entrustment of Coates, and will produce a formal engine performance report after the test. If the test result demonstrates significant improvement by the CSRV Engine comparing with original engines, Tongji University will set up cooperative program with Coates to promote and market the CSRV technology in China.

 

WHEREAS, to deepen the cooperative relationship between both parties, Mr. George J. Coates, the founder, president and CEO of Coates International, Ltd., will deliver a speech to the students of Tongji University about the CSRV technology and will answer the students' questions about engine technology and the development of the automobile industry.

 

NOW THEREFORE, in consideration of the premises and covenants, and other good and valuable consideration, the mutual promises of the performance of the under taking herein, it is agreed by and between the parties hereto as follows in this agreement including the recitals.

 

ARTICLE I — DEFINITIONS

 

1.1"CSRV" shall mean the Coates Spherical Rotary Valve System.

 

1.1 "CSRV"

 

1.2 "CSRV VALVE SYSTEM" shall mean a cylinder head or heads for an internal combustion piston engine manufactured in accordance with the patent rights and/or technical information of the Coates Spherical Rotary Valve System.

 

1.3 "CSRV VALVE SEAL" shall mean a valve seal for use with a CSRV Rotary Valve Sphere in the Coates Spherical Rotary Valve System.

 

1.4 "CSRV ROTARY VALVE SPHERE" shall mean a spherical rotary valve used in the CSRV Valve System in accordance with technical specifications.

 

1.5  "CSRV COMPONENTS" shall mean the parts that when assembled comprise the patented CSRV Combustion Engine.

 

1.6"Confidential Information" shall mean all data, materials, products, technology, computer programs, specifications, manuals, business plans, software, marketing plans, financial information, and other information directly or indirectly relating to CSRV Engine and its technology, disclosed or submitted, orally, in writing, or by any other media, to Tongji University from Coates, except for those received from the public domain or provided otherwise in this Agreement.

 

1.7 "WATER COOLING SYSTEM" shall mean the mechanical system used for cooling the exhaustive CSRV shafts and bearings.

 

1.8   "ENGINE" OR "ENGINES" shall mean all Coates Internal Combustion Engines(s) employing the Coates Spherical Rotary Valve System

 

1.9           "FIELD OF USE" shall mean the use of the Coates CSRV Engine System as a test engine.

 

1.10 "COATES ENGINE" shall mean a Coates patented device, which produces kinetic energy, having a CSRV Engine as its power source.

 

  

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1.11 "DOLLARS" AND "$" shall mean the official currency of the Government of the United States of America.

 

1.12 "IMPROVEMENT" shall mean any improvement, change or modification to the CSRV Engine, or CSRV Valve System, the CSRV Valve Seal and/or Drive 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 in the Patent Rights.

 

1.13 "PATENT RIGHTS" shall mean the patents, patents pending and patent applications, as listed in Appendix 1.13, and all patents which may be issued pursuant to such patent applications, together with any continuation 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.

 

1.14 "REGULATORY APPROVAL" shall mean, with respect to the People's Republic of China, all governmental approvals necessary for Tongji University to test the CSRV Engine and its related products.

 

1.15 "REGULATORY AUTHORITY" shall mean, with respect to the People's Republic of China and the governmental authority responsible for granting Regulatory Approval.

 

1.16 "TECHNICAL INFORMATION" shall mean all information imparted by Coates to Tongji University, 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 the CSRV Engine and all designs, drawings, specifications and the like, owned by Coates, insofar as the same relate to the CSRV Engine.

 

1.17 "TECHNICAL SPECIFICATIONS" shall mean the specifications and performance parameters developed by Coates for the CSRV Engine.

 

1.18 "TERRITORY" shall mean the People's Republic of China, excluding Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan.

 

ARTICLE II — TECHNICAL COOPERATION AND APPROVALS

 

2.1 TECHNICAL COOPERATIONUpon request by Tongji University, Coates shall furnish to Tongji University technical assistance, and vice versa.

 

2.2 REGULATORY APPROVALS For the full term of this Agreement, Tongji University will be responsible for obtaining regulatory approvals, if applicable, for testing the CSRV Engines in China. Coates agrees to provide Tongji University with all reasonable assistance and cooperation in the preparation and submission of any application for such regulatory approval.

 

ARTICLE III — CONFIDENTIAL INFORMATION

 

3.1 Tongji University shall use all Technical Information and Technical Specifications obtained heretofore or hereafter from Coates for the sole purpose of testing under this Agreement.

 

3.2  Tongji University agrees to hold in confidence any and all Confidential Information disclosed, directly or indirectly, to Tongji University by Coates 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 Tongji University (but only after, and only to the extent that, it is published or otherwise becomes part of the public domain); (c) Technical Information which Tongji University can prove was in its possession (as evidenced by Tongji University's written records) at the time of the disclosure and was not acquired, directly or indirectly from Coates or from a third party under an obligation of confidence; and (d) Technical Information and Technical Specifications which Tongji University can prove was received by it (as evidenced by Tongji University's written records) after the time of disclosure hereunder from a third party who did not require Tongji University to hold it in confidence and who did not acquire it, directly or indirectly, from Coates under an obligation of confidence.

 

3.3  Tongji University agrees, upon request by Coates, to 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 drafted by Coates or in a form reasonably acceptable to Coates.

 

ARTICLE IV — COSTS AND EXPENSES

 

4.1  Tongji University agrees to be solely responsible for all testing costs and expenses incurred with the CSRV Engine test in China.

 

4.2   Coates shall transport to Tongji University on its own expenses a CSRV 1600cc 4-cyl engine and a 1600cc 4-cyl poppet valve engine for comparison. Coates shall also be responsible for all the custom declaration fees for such engines. Tongji University shall corporate with Coates on the transportation of such equipments.

 

ARTICLE V — MARKETING AND LICENSING

 

5.1  Coates will license the CSRV Technology to Chinese engine manufacturers if it deems appropriate after receiving the test report.

 

ARTICLE VI — PATENT ENFORCEMENT

 

6.1  Tongji University shall immediately inform Coates of any actual or potential infringement of the Patent Rights by any third party which may come to Tongji University's attention. It shall be solely at Coates' discretion (which it shall not be obligated to exercise) to terminate any such potential or actual infringement of any of•the Patent Rights.

 

  

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ARTICLE VII — REPRESENTATIONS AND WARRANTIES

 

 

7.1  Coates represents and warrants as follows:

 

(a)  Coates Trust is a duly organized, validly existing corporation in the Commonwealth of the Bahamas and Coates International, Ltd. is a duly organized, validly existing corporation in the United States of America. Since the establishment, the corporate charters of Coates Trust and Coates International, Ltd have never been revoked or suspended.

 

(b)  Coates is the rightful owner of the Patent Rights and has the exclusive right to license all of the Patent Rights.

 

(c)  All Technical Information delivered prior to the date of execution hereof has been, and all Technical Information delivered hereafter will be, to the best of Coates' knowledge, substantially accurate and complete with respect to material matters.

 

(d)  Coates has the power and authority to execute, deliver and perform its obligations under this Agreement, and neither the execution nor delivery of this Agreement nor the performance of its obligations hereunder will constitute a breach of the terms or provisions of any contract or agreement to which it is a party.

 

7.2Tongji University represents and warrants as follows:

 

(a)  Tongji University is a duly organized, validly existing university of the

 

Ministry of Education of China.

 

(b)  Tongji University has the power and authority to execute, deliver and perform its obligations under this Agreement, and neither the execution nor delivery of this Agreement nor the performance of its obligations hereunder will constitute a breach of the terms or provisions of any contract or agreement to which it is a party.

 

7.3  OBLIGATION OF TONGJI UNIVERSITY  Tongji University will use its best efforts to execute all such tasks as may be necessary to bring about the speedy completion of testing consistent with good business practice after receiving the engines; and

 

7.4  INDEMNIFICATION  Tongji University shall indemnify and hold Coates harmless from and against any and all expenses including costs and attorney's fees, claims, demands, liabilities or money judgments for death or bodily injury arising from the use and testing of the CSRV Engine to the extent that the damage is caused by Tongji University.

 

Coates shall indemnify and hold Tongji University harmless from and against any and all expenses including costs and attorney's fees, claims, demands, liabilities or money

judgments for death or bodily injury arising from the design defect of the CSRV Engine or the quality problems of the two engines offered by COATES.

 

One party shall inform the other party as soon as practicable of any claim or action to which these foregoing provisions apply. The informed pqrty shall have the right, but not the obligation, to participate in any compromise, settlement or defense of any such claim or action.

 

7.5 MUTUAL INDEMNITITES Each of the parties hereto shall indemnify and save harmless the other from and against any losses, damages and costs (including legal fees and expenses), which the other may suffer or incur by reason of such party's breach of this Agreement.

 

7.6 SECURITY OF CSRV ENGINE The CSRV Engine must be placed in a secure room and only the project team shall be allowed to review the CSRV Engine. Unless provided otherwise in this Agreement, all testing results must be kept confidential and a copy of the testing results shall be delivered to Coates in a timely manner. All CSRV project personnel must sign a Confidential Information Agreement. All signed Confidential Agreements must also be delivered to Coates in a timely manner.

 

  

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ARTICLE XIII — WAIVERS

 

 

8.1  No provision of this Agreement shall be deemed to have been modified by any act of either party, its agents or employees, or by the failure to object to any act of the other party which may be inconsistent herewith, or otherwise, signed by both parties.

 

ARTICLE IX — LIMITATIONS OF RIGHTS AND AUTHORITY

 

9.1  No rights or title whatsoever in the Patent Rights or Technical Information is granted by Coates to Tongji University, or shall be taken or assumed by Tongji University, in this Agreement.

 

9.2   Neither party shall in any respect whatsoever be taken to be the agent or representative of the other party and neither party shall have any authority to assume any obligation for the other party or to commit or bind the other party in any way 

 

9.3  Neither party shall at any time heretofore or hereafter state or imply that the terms and conditions specified herein, or that the relationships between Coates and Tongji University, are in any way different from those specifically set forth in this Agreement.

 

ARTICLE X — FORCE MAJEURE

 

 

10.1 Neither party shall be liable for failure to perform or delay in performing obligations set forth in this Agreement, if to the extent and for so long as, such failure or delay or breach is due to natural disaster or any cause reasonably beyond the control of each party. If a party desires to invoke this Article it shall notify the other promptly of such desire and shall use reasonable efforts to resume performance of its obligations as soon as is reasonably possible. However, if performance by a party becomes impossible for more than twelve (12) consecutive months by reason thereof, this Agreement may be terminated upon either party giving thirty (30) days' prior written notice.

 

10.2 Each of the covenants contained in this Agreement shall be construed as separate covenants, and if any court shall finally determine that any covenants are too broad as to the area, activity, or time set forth therein, said area, activity or time shall be deemed reduced to whatever extent the court deems reasonable and such covenants shall be enforced as to such reduced area, activity or time, without limiting the scope or enforceability of the remaining provisions of those sections.

 

10.3 If any provision of this Agreement is declared invalid by a court of last resort or by any court from the decision of which an appeal is not taken within the time provided by law, then in such an event, this Agreement will be deemed to have been terminated only as to the portion thereof which relates to the provision invalidated by that judicial decision, but this Agreement, in all respects, will remain in force.

 

10.4 It is specifically agreed that no provision that is in any manner violation of the anti-trust laws of the United States of America or the related laws of China as now or hereafter enacted or construed, is intended to be or will be considered to be incorporated into this Agreement or will be binding upon the parties.

 

ARTICLE XI — LIMITATIONS OF ASSIGNMENT

 

11.1 The rights, duties and privileges of the parties hereunder shall not be transferred or assigned, either in whole or in part to any other entity or company.

 

ARTICLE XII — ARBITRATION AND GOVERNING LAW

 

12.1  In the event a claim or dispute arises between the parties related to this Agreement or the relationship or duties contemplated under this Agreement, it is hereby agreed that the claim or dispute shall be resolved by binding arbitration by the Hong Kong International Arbitration Center ("HKIAC"), under the HKIAC arbitration rules then in effect. Any award of the arbitrator(s) may be entered as a judgment in any court of competent jurisdiction. Information may be obtained and claims may be filed at the office of the Hong Kong International Arbitration Center.

 

12.2  If any party is unsatisfied with the arbitration award, the party can then submit the case to the jurisdiction of the competent courts in Hong Kong, China, and this Agreement shall be governed by and construed and enforced in accordance with the laws of Hong Kong Special Administrative Region.

 

  

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ARTICLE XIII — ENTIRE AGREEMENT

 

 

13.1 This Agreement sets forth the entire Agreement and understanding by and between Coates and Tongji University as to the subject matter hereof and it supersedes all documents, verbal consents and understandings made before the execution of this Agreement and none of the terms of this Agreement shall be amended or modified except in a written document signed by Coates and Tongji University.

 

13.2 In the event of an inconsistency between any of the terms of this Agreement and any translation thereof into another language, the English language version shall control.

 

13.3 Should any portion of this Agreement be declared null and void, the remainder of this Agreement shall remain in full force and effect.

 

ARTCLE XIV — NOTICES

 

 

14.1 Any notice, consent or approval required under this Agreement shall be in English and in writing, and shall be delivered to the following addresses (a) personally by hand, (b) by Certified Mail, postage prepaid, with return receipt requested, or (c) by telefax, confirmed by such Certified Mail.

 

I f to Coates:

 

Coates International Ltd.

2100 Highway 34 & Ridgewood Road Wall Township, New Jersey 07719-9738 

Attn: George J. Coates

 

If to Tongji University: Tongji University

School of Automotive Studies 4800 Cao An Road 201804 Shanghai, P.R. China

 

All notices shall be deemed effective upon the date delivered. If either party desires to change the address to which notice is sent to such party, it shall so notify the other party in writing in accordance with the foregoing.

 

ARTICLE XV — MISCELLANEOUS

 

15.1 "HEADINGS AND REFERENCES" — Headings in this Agreement are included herein for ease of reference only and have no legal effect. References herein to Sections or Attachments are to Sections and Attachments to this Agreement, unless expressly stated otherwise. 

 

15.2 "RESTRICTION ON DISCLOSURE OF TERMS AND PROVISIONS"

 

This Agreement shall be distributed solely to: (i) those personnel of Coates and Tongji University who shall have a need to know its contents; (ii) those persons whose knowledge of its contents will facilitate performance of the obligations of the parties under this Agreement, (iii) those persons, if any, whose knowledge of its contents is essential in order to permit Tongji University or Coates to place or maintain or secure benefits under policies of insurance; or (iv) as may be required by law, regulation or judicial order.

 

  

5

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first above written in duplicate by their duly-authorized representative.

 

	ATTEST:  	THE COATES TRUST & COATES INTERNATIONAL LTD.	 
	 	 	 	 
	
 

	
By: 

	/s/ George J. Coates	 
	 	 	GEORGE J. COATES, Trust Adjustor	 
	 	 	 	 
	 	 	 	 

	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ George J. Coates	 
	 	 	GEORGE J. COATES, President & CEO	 
	 	 	 	 
	 	 	 	 

 

	ATTEST: 	
TONGJI UNIVERSITY

SCHOOL OF AUTOMOTIVE STUDIES

	 
	 	 	 	 
	
 

	
By: 

	/s/ Diming Lou	 
	 	 	DIMING LOU, PhD. & Professor	 
	 	 	 	 
	 	 	 	 

	 	 	 
	 	 	 	 
	
 

	
By: 

	/s/ Aimin Du	 
	 	 	DU AIMIN, PhD. & Associate Professor	 
	 	 	Title 	 
	 	 	 	 

 

6

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