EXHIBIT 10.8
License Agreement
Anuvu Incorporated, a California corporation ("Anuvu"), with its principal
mailing address at 0000 X Xx., Xxxxxxxxxx, XX 00000 and H2 ERA. a New Hampshire
corporation ("Licensee"), with principal mailing address at 0000 X. Xxxxxxxx
Xxxxxx, Xxxxxxxxx, X.X. X0X 0X0 agree as follows, effective as of November ___,
2001 ("Effective Date").
1. BACKGROUND.
1.1 Anuvu. Anuvu has developed and owns the fuel cell technology described
in the Settlement Agreement and, as defined below (the "Fuel Cell"), and the
polymer formula technology described in the Settlement Agreement (the
"Polyelectric Formula", with the Fuel Cell and the Polyelectric Formula
collectively referred to as the "Technology"). Anuvu is not qware of any
intellectual property infringements associated with the Technology.
1.2 Licensee. Licensee seeks to obtain a license to the Technology (for all
uses as to the Fuel Cell, and only for the manufacture of fuel cells, as to the
Polyelectric Formula) (collectively, the "Business"), provided, however, that
Anuvu shall retain the right to the Fuel Cell and Polyelectric Formula for all
uses. Licensee wishes to use the Technology to manufacture a fuel cell product
to be sold independently and as part of an integrated system ("Fuel Cell
Product").
1.3 License. Licensee wishes to obtain, and Anuvu wishes to grant to
Licensee a license to manufacture, distribute and commercialize the Technology
with respect to the Business on the terms and conditions described below.
2. LICENSE.
2.1 License. Anuvu grants to Licensee the worldwide right and license to
manufacture, use, distribute and commercialize the Technology as delivered to
Licensee pursuant to the terms and conditions of the Settlement Agreement and
Mutual General Release dated as of November __, 2001 (the "Settlement
Agreement"), by and among the parties, Whistler, Inc., Cell Power, Inc.,
Plugless Power Corporation, Xxxxxx Xxxxx, Xx., Xxxxxx X.X. Xxxxx, Xxxxxx
Friszche, Xxxxxxx Xxxxx, Xxxxx Xxxxxx and Xxxx X. Xxxxx with respect to the
Business subject to the terms and conditions contained herein. Except for such
license and the other rights expressly granted herein, no right, title or
interest to the Technology is granted to Licensee. Anuvu shall retain all right,
title and interest in the Technology.
2.2 Improvements and Enhancements. Licensee may make modifications and/or
changes and enhancements to the Technology ("New Works"), which shall be owned
by Licensee. The Technology shall remain the property of Anuvu. Anuvu shall have
no obligation to disclose to Licensee, and Licensee shall have no right to
obtain, any new product design, software, services, technologies, inventions,
intellectual property, patent and trademark rights developed by Anuvu other than
as specified in the Settlement Agreement.
2.3 Technical Support. Anuvu shall provide up to 45 hours per month up to a
total of 540 hours in twelve months in technical support to Licensee regarding
the Fuel Cell (including the mass production of the Fuel Cell), the Polyelectric
Formula and the Fuel Cell Product.
2.4 Restrictions on License. Anuvu is a party to that certain agreement
dated _____________ with ________________ ("SSPC"), whereby SSPC was granted the
exclusive right to use the Fuel Cell as a stationary back-up power supply (the
"SSPC Agreement" a copy of which is attached as Exhibit A). The SSPC Agreement
has approximately two (2) years remaining on its term and the license granted
herein is subject to the use restrictions contained in the SSPC Agreement. The
parties hereby agree to work together in an effort to buy out the remaining term
of the SSPC Agreement. The costs and expense of seeking and obtaining such a buy
out shall be equally shared by the parties.
3. LICENSE ROYALTY.
3.1. License Royalty. Licensee shall pay Anuvu a royalty equal to two
percent (2%) on the Good Faith List Price (as defined below) of all Fuel Cell
Products sold independently or as part of a system ("Royalty Payment"). Good
Faith List Price shall mean the price at which Licensee offers for sale any Fuel
Cell Product to independent third parties for cash or other forms of
consideration without any discounts, rebates or deductions of any kind. Good
Faith List Price does not include the value of any extended warranty (any
warranty providing coverage beyond the industry-standard) offered by Licensee to
its customers so long as customers have the option of purchasing Fuel Cell
Products from Licensee without an extended warranty. Where Licensee distributes
Fuel Cell Products for end use to itself or an Affiliate (as defined below) such
distribution shall be considered the Good Faith List Price charged to
independent third parties and Anuvu shall be entitled to Royalty Payments. In
the case of sales to resellers (e.g. distributors or original equipment
manufacturers), the Royalty Payment shall be based on Licensee's Good Faith List
Price to such reseller. The two percent (2%) royalty rate shall remain in effect
for the term of this Agreement and shall survive the termination of this
Agreement. Affiliate shall mean any entity which, directly or indirectly,
controls Licensee, is controlled by Licensee, or is under common control with
Licensee, provided however, that in any country where the local law shall not
permit foreign equity participation of a majority, then an Affiliate shall
include any company in which Licensee shall own or control, directly or
indirectly, the maximum percentage of such outstanding stock or voting rights
permitted by local law
3.2 Royalty Payment. Licensee shall pay to Anuvu within thirty (30) days
after the end of each calendar quarter all Royalty Payments due to Anuvu under
this Agreement. All Royalty Payments shall be made in U.S. dollars in funds
immediately available.
3.3 Quarterly Reports. Licensee shall provide to Anuvu written quarterly
reports within thirty (30) days after the end of each calendar quarter stating
the number, description and aggregate Good Faith List Prices of the Fuel Cell
Products produced or sold during the preceding quarter.
3.4 Obligation to Keep Records. During the term of this Agreement and for a
minimum of two (2) years after the termination of this Agreement, Licensee shall
maintain a complete, clear, and accurate record of the number, description and
aggregate gross selling prices of the Fuel Cell Products produced or sold. To
ensure compliance with the terms of this Agreement, Anuvu shall have the right
to inspect and audit all the relevant accounting and sales books and records of
Licensee conducted by Anuvu or an independent certified public accountant whose
fee shall be paid by Anuvu. Any such audit shall be conducted during regular
business hours upon seven (7) days prior written notice at Licensee's offices
and in such a manner as to not unreasonably interfere with Licensee's normal
business activities. In no event shall audits be made hereunder more frequently
than every six (6) months. If such inspections should disclose any
underreporting, Licensee shall promptly pay to Anuvu such amounts, together with
the audit costs if the underreporting is greater than five percent (5%).
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3.5 Right to Purchase Royalty. Licensee, its successors or assigns, shall
retain the right at its sole discretion, during the Quiet Period set forth
below, to acquire Anuvu's interest in royalty payments authorized herein from
Licensee by the payment to Anuvu of the sum of five million dollars
($5,000,000.00).
4. TERM AND TERMINATION.
4.1 Term. This Agreement shall have a term of equal to the life of the
patents referenced herein, subject to early termination pursuant to Section 4.2
below.
4.2 Early Termination. Either party may terminate this Agreement at any
time in the event that the other party fails to perform any obligation,
warranty, duty or responsibility or is in default with respect to any other term
or condition undertaken by such other party under this Agreement or the
Settlement Agreement and such failure or default continues unremedied for a
period of seven (7) days in the event of Licensee's failure to make a Royalty
Payment under Section 4 or fifteen (15) days in the event of any other breach or
default, following written notice from the terminating party to the other party
specifying in reasonable detail the item or items of default. Either party may
terminate this Agreement immediately upon notice if (i) a receiver is appointed
for the other party or its property, (ii) the other party makes an assignment
for the benefit of its creditors, (iii) any proceedings are commenced by, for or
against the other party under bankruptcy, insolvency or debtor's relief law and
such involuntary proceeding are not dismissed within sixty (60) days thereafter,
(iv) the other party is liquidated or dissolved, or (v) if Licensee assigns the
rights hereunder in violation of Section 10 of this Agreement.
4.3 No Damages for Termination. Neither party shall be liable to the other
for damages of any kind, including incidental or consequential damages, on
account of the termination of this Agreement in accordance with this Section 4,
even if advised of the possibility of such damages. Neither party shall be
liable by reason of termination of the Agreement to the other for compensation,
reimbursement or damages on account of any loss of prospective profits on
anticipated sales or on account of expenditures, investments, leases or other
commitments relating to the business or goodwill or either party,
notwithstanding any law to the contrary.
4.4 Return of Information. Upon termination of this Agreement, Licensee
shall cease use and distribution of the Technology and each party shall return
to the other all Confidential Information (as defined in the Nondisclosure
Agreement entered into pursuant to Section 8 below). Any liabilities incurred
prior to the termination of this Agreement shall remain the responsibility of
the party incurring the liability.
4.5 Payments Due Upon Termination. In the event this Agreement is
terminated pursuant to this Section 4, Licensee shall promptly pay to Anuvu all
sums due under the terms of this Agreement up to and including the date of
termination.
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5. RESTRICTIONS UPON LICENSEE. Licensee shall not file any patent or otherwise
claim any other intellectual or other industrial property right in or to the
Technology that is disclosed to Licensee pursuant to this Agreement.
6. BRAND NAME, COMPLIANCE WITH LAWS. Licensee and any successor in interest to
Licensee (collectively, "Promisor") shall not use in any manner, copy or
distribute Anuvu trademarks, including, but not limited to Anuvu and Carbon-X,
and shall not use or mention Anuvu or Carbon-X in any written or verbal
materials; provided, however, Promisor may mention the Anuvu name as required in
order to comply with applicable disclosure requirements.
7. WARRANTIES & INDEMNIFICATIONS; CONDITIONS.
7.1 Capacity. Each party warrants its ability and capacity to enter into
and perform the terms of this Agreement.
7.2 Authority of Anuvu. Anuvu represents and warrants to Licensee that
Anuvu has the right and authority to grant world-wide rights to license the
Technology as contemplated hereunder.
7.3 Licensee Indemnity. Licensee agrees to indemnify, defend and hold
harmless Anuvu and the agents of Anuvu from and against any loss, cost,
liability, action, suit, proceeding, claim, demand, expense, penalty or fine,
including without limitation attorneys' fees (without regard to whether
litigation is commenced) suffered or incurred, directly or indirectly, as a
result of any claim that arises from the actual or alleged use by Licensee of
the Technology. Anuvu shall promptly notify Licensee of the existence of any
matter to which the indemnification obligations would apply. Licensee shall
defend such claim or settle such claim at Licensee's own expense. If Licensee
does not provide a defense or settle the matter in accordance with the
requirements of this Section, Anuvu may provide the defense and Licensee shall
promptly reimburse Anuvu for the reasonable defense costs and fees.
7.4 GENERAL LIMITATION. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
HEREIN, NEITHER OF THE PARTIES SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL,
CONSEQUENTIAL OR SPECIAL DAMAGES, INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOST
PROFITS OR LOST SALES ARISING FROM ANY BREACH OF THIS AGREEMENT. THE WARRANTIES
AND REPRESENTATIONS SET FORTH HEREIN ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY, QUALITY OR FITNESS FOR A PARTICULAR PURPOSE.
8. Confidentiality. In performing its obligations under this Agreement, each
party shall have access to certain confidential or proprietary information,
technical data, trade secrets or know-how of the other party, which may include,
without limitation, research, product plans, products, services, customer lists
and customers, markets, software, developments, inventions, numbers or other
business information ("Confidential Information") identified with more
particularity in the Mutual Nondisclosure Agreement attached as Exhibit B
("Nondisclosure Agreement"). The parties have or immediately shall enter into
the Nondisclosure Agreement, the terms of which shall govern the use and
disclosure of the Confidential Information both during and after the term of
this Agreement.
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9. LAW AND JURISDICTION.
9.1 Choice of Law. This Agreement shall be governed by the laws of the
state of California without regard to conflict of law principles.
9.2 Arbitration. Any dispute or issue arising under the terms of this
Agreement (or breach hereof) that cannot be resolved by good faith negotiations
between or among the parties may be submitted for final and binding arbitration
in Sacramento, California pursuant to the Arbitration Rules of the American
Arbitration Association, including the Optional Rules for Emergency Measures of
Protection. The number of arbitrators shall be one. The arbitration shall
proceed with due dispatch, and a decision shall be rendered within thirty (30)
days after conclusion of the arbitral proceeding. The arbitration decision shall
be in such written form that a judgment may be entered on it in any court of
competent jurisdiction. This agreement to arbitrate is specifically enforceable,
and the award rendered by the arbitrator is final and binding on the parties to
this Agreement and may be made the basis for entry of a judgment.
9.3 Injunctive Relief. Notwithstanding Section 9.2, either party may seek
temporary injunctive relief in any court of competent jurisdiction pending the
ruling in any arbitration proceeding.
10. SUBLICENSING AND ASSIGNMENT.
10.1 Sublicensing and Assignment. Licensee shall have the right, at any
time, to grant sublicenses hereunder to third parties, subject to the
limitations set forth in this Section. It is understood by the parties that any
and all such sublicenses shall be expressly limited to the manufacture, use and
sale of the Technology for the Business. Furthermore, Licensee shall grant only
one sublicense for each product type (as defined by a Standard Industrial
Classification) and for each country. Licensee must provide Anuvu with written
notice upon the grant of sublicense, identifying the sublicensee and expressly
acknowledging the limitation of the sublicense. Otherwise, Licensee may not
assign the rights hereunder in whole or in part, except in the case of merger or
change in the persons or entities who control one hundred percent (100%) of the
equity securities or voting interests in Licensee. Any assignment contrary to
the provisions of this Agreement shall be deemed a default under this Agreement,
allowing Anuvu to exercise all remedies available under law.
10.2 Quiet Period. For a period of one (1) years from execution of this
Agreement, the parties agree that neither party shall seek to assign, license or
sublicense, as the case may be, the Technology to any third party other than as
a consequence of a merger, acquisition or sale of substantially all assets or
Anuvu's right to grant a license or sublicense in the Peoples Republic of China.
Any entity resulting from such a merger, acquisition or sale of assets shall be
bound by the same terms and such transaction shall not cause the Quiet Period to
be extended.
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11. GENERAL PROVISIONS.
11.1 Entire Agreement. This document, including all exhibits, constitutes
the entire agreement between the parties, all oral agreements being merged
herein, and supersedes all prior representations. There are no representations,
agreements, arrangements, or understandings, oral or written, between or among
the parties relating to the subject matter of this Agreement that are not fully
expressed herein. All provisions contained in Sections 5, 7, 8, 9, 10 and 11 of
this Agreement shall survive the termination of this Agreement.
11.2 Modification. The provisions of this Agreement may be modified at any
time by agreement of the parties. Any such agreement hereafter made shall be
ineffective to modify this Agreement in any respect unless in writing and signed
by both parties.
11.3 Waiver. Any of the terms or conditions of this Agreement may be waived
at any time by the party entitled to the benefit thereof, but no such waiver
shall affect or impair the right of the waiving party to require observance,
performance or satisfaction either of that term or condition as it applies on a
subsequent occasion or of any other term or condition.
11.4 Successors. Subject to the provisions otherwise contained in this
Agreement, this Agreement shall inure to the benefit of and be binding on the
successors and assigns of the respective parties.
11.5 No Third Party Beneficiaries. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action against any party to this Agreement.
11.6 Specific Performance. Each party's obligations under this Agreement
are unique. The parties each acknowledge that, if any party should default in
performance of the duties and obligations imposed by this Agreement, it would be
difficult to measure the resulting damages. Accordingly, the nondefaulting
party, in addition to any other available rights or remedies, may assert a claim
in equity in for specific performance in any arbitration proceeding brought
hereunder and may enforce the arbitration award in any court of competent
jurisdiction, and the parties each expressly waive the defense that a remedy in
damages shall be adequate.
11.7 Notices. Any notice under this Agreement shall be in writing, and any
written notice or other document shall be deemed to have been duly given (i) on
the date of personal service on the other party, (ii) on the third business day
after mailing, if the document is mailed by registered or certified mail, or
(iii) one day after being sent by professional or overnight courier or messenger
service guaranteeing one-day delivery, with receipt confirmed by the courier.
Any such notice shall be delivered or addressed to the other party at the
addresses set forth below or at the most recent address specified by the
addressee through written notice under this provision. Failure to give notice in
accordance with any of the foregoing methods shall not defeat the effectiveness
of notice actually received by the addressee.
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11.8 Attorneys' Fees. If the services of an attorney are required by any
party to secure the performance of this Agreement or otherwise upon the breach
or default of the other party to this Agreement, or if any judicial remedy or
arbitration is necessary to enforce or interpret any provision of this Agreement
or the rights and duties of any person in relation thereto, the prevailing party
shall be entitled to reasonable attorneys' fees, costs and other expenses, in
addition to any other relief to which such party may be entitled.
11.9 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if the parties had all signed the same
document. All counterparts shall be construed together and shall constitute one
agreement.
11.10 Captions. All paragraph captions are for reference only and shall not
be considered in construing this Agreement.
11.11 Severability. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid or unenforceable, the remainder of the
Agreement which can be given effect without the invalid provision shall continue
in full force and effect and shall in no way be impaired or invalidated.
11.12 Exhibits. All exhibits to which reference is made are deemed
incorporated in this Agreement whether or not actually attached.
11.13 Time. Time is of the essence of this Agreement.
11.14 Gender, etc. As used in this Agreement, the masculine, feminine, or
neuter gender, and the singular or plural number, shall each be deemed to
include the others whenever the context so indicates.
11.15 Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall whenever possible be cumulative with all other remedies at
law or in equity
11.16 Joint Drafting. Each party has cooperated and participated in the
drafting and preparation of this Agreement. Therefore, in any construction to be
made of this Agreement or any of its terms, both parties shall be construed to
be equally responsible for the drafting and preparation of the same.
11.17 Relationship of Parties. Neither party shall have, and shall not
represent that it has, any power, right or authority to bind the other, or to
act on behalf of the other, except as expressly provided herein. Nothing stated
in this Agreement shall be construed as constituting Anuvu and Licensee as
partners or as creating the relationship of employer/employee,
franchisor/franchisee or principal/agent between the parties.
11.18 Force Majeure. Neither party shall be responsible for any failure to
perform due to unforeseen circumstances or to causes beyond their control,
including but not limited to acts of God, war, riot, embargos, acts of civil or
military authorities, fire, floods, accidents, strikes, or shortages of
transportation, facilities, fuel, energy, labor or materials. In the event of
any such delay, the affected party may defer the delivery date for a period
equal to the time of such delay.
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ANUVU INCORPORATED H2 ERA, INC.
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By: By:
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Title: Title:
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SIGNATURE PAGE FOR LICENSE AGREEMENT
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EXHIBIT A
SSPC AGREEMENT
EXHIBIT B
MUTUAL NONDISCLOSURE AGREEMENT
