EXHIBIT 10.30
Confidential Treatment Requested
[*] indicates deletion of confidential portions.
AMENDMENT NO. 1
To
Collaborative Commercialization and License Agreement
Between
Catalytica Combustion Systems, Inc.
And
Genxon Power Systems, L.L.C.
And
General Electric Company
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This Amendment No. 1 is entered into as of this 3 day of January, 2002 by
and between General Electric Company, a corporation organized and existing under
the laws of New York, having offices at 0 Xxxxx Xxxx, Xxxxxxxxxxx, Xxx Xxxx
(hereinafter "GE"), and Catalytica Energy Systems, Inc., a corporation organized
and existing under the laws of Delaware, having offices at 000 Xxxxxxxx Xxxxx,
Xxxxxxxx Xxxx, Xxxxxxxxxx (hereinafter "CESI"), including its affiliate, Genxon
Power Systems L.L.C., a Delaware limited liability company, also with offices at
000 Xxxxxxxx Xxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx (hereinafter "GPS").
This Amendment No. 1 includes the following Exhibits: Exhibit A - Program
Schedule and Milestones; and Exhibit D - Exceptions to the Exclusive Rights of
Section 6.2.1.
WHEREAS, GE and GPS and Catalytica Combustion Systems, Inc., a corporation
organized and existing under the laws of Delaware, having offices at 000
Xxxxxxxx Xxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx (hereinafter "CCSI") entered into a
Collaborative Commercialization and License Agreement ("CCLA") dated November
19, 1998 under which they have cooperated in the area of catalytic combustion
systems for gas turbines; and
WHEREAS, Catalytica Combustion Systems, Inc. (CCSI) was renamed Catalytica
Energy Systems, Inc. (CESI) in October, 2000; and
WHEREAS, GPS, a joint venture between CESI and Xxxxxxxx Governor Company
("Xxxxxxxx"), will be dissolved pursuant to a "Genxon Membership Transfer and
Settlement Agreement," dated December 19, 2001 (hereinafter "Genxon Settlement
Agreement") wherein all GPS rights and properties are transferred to CESI; and
WHEREAS, GE, GPS and CESI desire to update certain terms of the CCLA to
reflect the parties' ongoing objectives with respect to developing and
commercializing catalytic combustion systems for gas turbines; and
WHEREAS, GE, GPS and CESI each represents that it is fully authorized to
deal generally with and to make this Amendment respecting the subject matter
hereof.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree to amend the CCLA as follows:
Each occurrence of "Catalytica Combustion Systems, Inc." and "CCSI" is hereby
revised to read "Catalytica Energy Systems, Inc." and "CESI", respectively. Each
occurrence of "XONON" is hereby revised to read "Xonon".
Article 1 - Definitions
Section 1.1 is hereby revised to read as follows:
1.1 "Additional Period" shall mean the time period commencing upon the
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date of expiration or earlier termination of the Incentive Term (as
such Incentive Term may be modified pursuant to Sections 6.2.2, 7.3,
or 7.5 below), and ending on the fifth (5th) anniversary of such
expiration date.
Section 1.9 is hereby revised to read as follows:
1.9 "Commercialization Plan" shall mean a plan for the Commercialization
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of the Products in a particular Market Segment during the
Commercialization Phase, including estimated funding amounts and dates
for certain milestones, as such plan may be modified pursuant to the
provisions of Section 5.1.3 below.
Section 1.13 is hereby revised to read as follows:
1.13 "Development Funds" shall mean any amounts raised or expended by the
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parties under Article 4 below.
Section 1.14 is hereby revised to read as follows:
1.14 "Development Workplan" shall mean the detailed work plan for the
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technological development of the Products in a particular Market
Segment during the Technology Development Phase, which shall (i) be
based on the tollgate milestones identified in Exhibit A, (ii) include
a tollgate milestone schedule to be agreed upon by the parties, and
(iii) be modified or updated by the parties on at least an annual
basis by mutual agreement.
Section 1.17 is hereby revised to read as follows:
1.17 "Gas Turbine(s)" shall mean gas turbines rated at [*] for industrial
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and power generation applications.
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Section 1.20 is hereby revised to read as follows:
1.20 "Incentive Term" shall mean:
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(1) with respect to the Small Gas Turbine Market Segment, the term
beginning on the Effective Date (November 19, 1998) and ending on
the earlier of (a) three (3) years after the date that the first
Small Gas Turbine is shipped with a Xonon Combustion System, or
(b) three years after the date that the first Small Gas Turbine
is retrofit with a Xonon Combustion System;
(2) with respect to the Large Gas Turbine Market Segment, the term
beginning on the Effective Date (November 19, 1998) and ending on
December 31, 2003; or, if a Market Segment Agreement is mutually
agreed upon, the term beginning on the Effective Date and ending
on the earlier of (a) three (3) years after the date that the
first Large Gas Turbine is shipped with a Xonon Combustion
System, or (b) three years after the date that the first Large
Gas Turbine is retrofit with a Xonon Combustion System;
(3) with respect to the Syntroleum Market Segment, the period
commencing on the Effective Date (November 19, 1998) and ending
December 31, 2001;
(4) with respect to all other Market Segments, the term beginning on
the date of execution of a Market Segment Agreement and ending on
the earlier of (a) three years after the date that the first Gas
Turbine in that Market Segment is shipped with a Xonon Combustion
System, or (b) three years after the date that the first Gas
Turbine in that Market Segment is retrofit with a Xonon
Combustion System.
The Incentive Term for any Market Segment is subject to extension and
reduction as provided in Sections 6.2.2, 7.3, and 7.5.
Section 1.23 is hereby revised to read as follows:
1.23 "Market Segment" shall mean any one of the following: the Large Gas
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Turbine Market Segment, the Small Gas Turbine Market Segment, the
Syntroleum Market Segment, and any other mutually agreed upon market
segment as defined in a subsequent Market Segment Agreement.
Section 1.29 is hereby revised to read as follows:
1.29 "Program Schedule and Milestones" shall mean a schedule for achieving
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the development milestones ("GE Tollgates") identified in Exhibit A
leading up to and including the first Gas Turbine firing date at a
customer site for each Market Segment.
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The following Sections are hereby deleted:
1.21 (Initial Term)
1.24 (Maximum GE Required Expenditures)
1.30 (7E Market Segment)
1.31 (7F Market Segment)
1.35 (Target Funding Amount)
The following Sections are hereby added:
1.45 "Large Gas Turbine Market Segment" shall mean the worldwide market for
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the Products for Gas Turbines having outputs at ISO conditions of [*],
including without limitation the GE Frame 7E and 7F Gas Turbines.
1.46 "Small Gas Turbine Market Segment" shall mean the worldwide market for
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the Products for Gas Turbines having outputs at ISO conditions of [*],
excluding aeroderivative Gas Turbines.
Article 2 - Representations and Warranties
The following Sections 2.2.12, 2.3, 2.4, and 2.5 are hereby added:
2.2.12 CESI has obtained, by assignment from Xxxxxxxx, U.S. Patent No.
6,095,793 to Greeb and all foreign counterparts thereof, including
without limitation the worldwide right to grant licenses to make, use,
sell, offer for sale, and import products and to practice methods
covered by U.S. Patent No. 6,095,793 and foreign counterparts thereof.
2.3 CESI hereby represents and warrants that, pursuant to the Genxon
Settlement Agreement, CESI has obtained sufficient rights to permit
CESI to perform all of its obligations under this Agreement, including
any and all licenses or grants of intellectual property rights to GE.
2.4 CESI hereby represents and warrants that CESI (as opposed to Xxxxxxxx)
has acquired all of the rights and obligations of GPS with respect to
the CCLA as a result of the Genxon Settlement Agreement.
2.5 CESI hereby represents and warrants that CESI has the legal power to
extend the rights granted to GE in Section 6.2.1 and that it has not
made any commitments to others except as defined in Exhibit D,
concerning catalytic combustion systems for gas turbines rated [*] in
derogation of such rights.
Article 3 - Commercialization Program
The following Section 3.0 is added to the beginning of Article 3,
before Section 3.1:
3.0 The parties, by a written agreement ("Market Segment Agreement"), may
enter into a Commercialization Program for a particular Market
Segment. The Market Segment
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Agreement will include (a) with respect to the Technology Development
Phase, a Program Schedule and Milestones, a development funding plan,
a Development Workplan to be updated annually, and Yearly Development
Budgets; (b) with respect to the Commercialization Phase, a
Commercialization Plan; and (c) with respect to a Market Segment not
defined in this Agreement, a definition of the Market Segment. The
Market Segment Agreement will define the scope of any and all
exceptions to the exclusive rights granted to GE in Section 6.2.1 for
the relevant Market Segment, and any and all exceptions to GE's
ability to purchase all of its requirements for catalytic combustion
systems for Gas Turbines in the relevant Market Segment from CESI
during the Incentive Term. If there are no such exceptions, GE and/or
CESI, as the case may be, will represent and warrant the same in the
Market Segment Agreement.
Section 3.1 is hereby revised to read as follows (subsections 3.1.1
through 3.1.5 remain unchanged):
3.1 "Technology Development Phase". The first phase of the
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Commercialization Program shall be the Technology Development Phase,
during which GE and CESI will pursue the technological development of
the Products so as to enable their Commercialization. GE and CESI will
conduct their respective development efforts in accordance with the
Program Schedule and Milestones, the Development Workplan, and the
Yearly Development Budgets approved by the Management Committee, as
such Development Workplan and Yearly Development Budgets may be
modified by the Management Committee under Section 5.1.3 below.
Section 3.2 is hereby revised to read as follows:
3.2 "Commercialization Phase". The second phase of the Commercialization
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Program shall be the Commercialization Phase, during which GE and CESI
will jointly pursue the Commercialization of the Products as developed
during the Technology Development Phase. GE and CESI will conduct
their respective efforts in accordance with the Commercialization
Plan, as such Commercialization Plan may be modified by the Management
Committee under Section 5.1.3 below, Article 7, and any other relevant
terms of this Agreement.
Article 4 - Funding of the Technology Development Phase
Replace Section 4.1 with the following:
Funding for the Technology Development Phase for a Market Segment
defined subsequent to the execution of Amendment No. 1 to the CCLA
shall be agreed upon by the parties pursuant to the relevant Market
Segment Agreement during Tollgate 1 as depicted in Exhibit A. Funding
sources may include customer funding, government funding, funding by
GE and/or CESI, or a combination of the above.
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The following Sections are hereby deleted:
4.2 (GE Required Expenditures)
4.3 (Failure to Obtain Target Funding)
4.4 (Funding Contributions by Customers of GE)
Article 6 - Contribution of Technology and License Rights
Section 6.1 is hereby revised to read as follows:
6.1 Technology Transfer. Promptly following the Effective Date and
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thereafter as such information becomes available, GE and CESI each
shall disclose to the other party all Technical Information in its
possession that is relevant to the Commercialization Program, to the
extent deemed necessary by the disclosing party, in its reasonable
discretion, to enable the other party to perform its obligations and
to conduct its activities contemplated by this Agreement. GE shall not
be obligated to disclose any information to CESI concerning, without
limitation, the fuel/air mixer package or the preburner. CESI shall
not be obligated to disclose any Technical Information to GE
concerning the Xonon Module.
Section 6.2.1 is hereby revised to read as follows:
6.2.1 License under CESI Technology. As partial consideration for GE's
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contribution to the Commercialization Program, CESI hereby grants to
GE for the term of this Agreement a paid up, worldwide license under
all CESI Technology:
(a) to purchase and import the Products from CESI for application to
Gas Turbines and the Syntroleum Mod 2 Process, and
(b) to use, sell, offer to sell, and import the Products for Gas
Turbines and the Syntroleum Mod 2 Process.
The license granted in this Section 6.2.1 shall be exclusive with
respect to a Market Segment during the Incentive Term of such Market
Segment and subject to (i) CESI's reservation, during the Incentive
Term, of the right and license under the CESI Technology only to
conduct Pre-Commercial Activities with Third Parties relating to
catalytic combustion equipment for Third Party Gas Turbines, (ii) with
respect to exclusivity, GE purchasing all of its requirements for
catalytic combustion systems for Gas Turbines in a particular Market
Segment from CESI during the Incentive Term of any license rights
granted under this Section 6.2.1, and (iii) with respect to
exclusivity, those exceptions to the exclusive rights granted to GE in
this Section 6.2.1 which are defined in a Market Segment Agreement or
in Exhibit D to this Agreement (for the Small Gas Turbine, Large Gas
Turbine, and Syntroleum Market Segments). As used in this Agreement,
the term "catalytic combustion system" means a gas turbine combustion
system that employs a catalyst upstream of the turbine inlet and
integrated with the combustion process and shall not include SCR,
SNCR, SCONOx or other catalytic devices employed in pollution
clean-up.
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Section 6.2.2 is hereby revised to read as follows:
6.2.2 For all periods other than the Incentive Term, the license granted in
section 6.2.1 shall be exclusive only with respect to GE-designed Gas
Turbines so that CESI can, itself or through its licensees, sell and
offer to sell the Products to Third Parties for non GE-designed Gas
Turbine applications under the CESI Technology.
GE may, in its sole discretion (after giving due regard to CESI's
concerns), elect to terminate the Incentive Term for a particular
Market Segment prior to its expiration date by written notice to CESI
setting forth such expiration date, and in such event, the length of
the Additional Period shall be increased on an equivalent basis to
compensate GE for any such reduction in the Incentive Term (such that
the Additional Period shall commence on the date of termination of the
Incentive Term and expire on the same date it would have expired if
the Incentive Term (including any modifications pursuant to Sections
7.3 and 7.5) had not been terminated early). In addition, in a timely
fashion after the Effective Date, or from time to time thereafter as
appropriate, CESI and GE shall consider in good faith other
modifications of the Incentive Term, including elimination of all or
any part of the Incentive Term in exchange for appropriate
compensating expansions of the Additional Period and a reconsideration
of the continuing existence or structure of Section 8.1 hereof.
As partial consideration for the rights being granted back to CESI
under this Section 6.2.2., GE shall receive either (a) a fixed payment
in an amount to be mutually agreed upon by CESI and GE or (b) the
right during the Additional Period to purchase the Products from CESI
or its licensees [*]. CESI shall, at its sole option, elect which
consideration GE shall receive, either (a) or (b) specified above, at
least 60 days prior to the end of the Incentive Term for a particular
Market Segment and, if CESI elects option (a) and the parties agree on
the amount of the payment, shall pay GE the mutually agreed upon
amount in full by wire transfer upon the expiration of the Incentive
Term; otherwise, CESI shall elect option (b). The grant back of rights
to CESI shall not be effective until payment under option (a) is
received by GE or until CESI notifies GE in writing that it elects to
compensate GE under option (b) set forth in this Section 6.2.2.
If there is no [*] at any time after the Incentive Term has terminated
(due to the lack of any sales by CESI or a CESI licensee to a Third
Party), [*], as defined in Section 7.2.1, shall apply.
The following Section 6.2.6 is hereby added:
6.2.6 CESI hereby grants to GE a nonexclusive, worldwide, royalty-free
license to make, use, sell, offer for sale, and import products and to
practice methods covered by CESI's U.S. Patent 6,095,793 and foreign
counterparts thereof in connection with Gas Turbines rated at [*] MW
at ISO conditions and Gas Turbines rated at [*] at ISO conditions
including without limitation the GE 10 Gas Turbine. CESI agrees to
xxxxx XX a royalty free license under the aforementioned U.S. Patent
6,095,793 and foreign counterparts thereof for any Market Segment
which is the subject of a Commercialization Program between GE and
CESI.
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Article 7 - Commercialization
The first sentence in Article 7 is hereby revised to read as follows:
The Commercialization of the Products for a particular Market Segment
shall be subject to the Commercialization Plan for that Market Segment
and the provisions of this Article 7.
Section 7.1 is hereby revised to read as follows:
7.1 Supply Agreement. For a particular Market Segment, during the
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Incentive Term, CESI shall supply all of GE's requirements for the
Products for incorporation into Gas Turbines, provided that CESI can
meet GE's quality, quantity and schedule requirements, pursuant to the
Purchase Terms and Conditions set forth in Exhibit C. During this
period, GE reserves the right to engage in activities with Third
Parties regarding catalytic combustion systems for use on any GE gas
turbine, provided CESI shall have the right to treat any sale, field
test, or accepted written offer to sell by GE of Third Party catalytic
combustion systems for Gas Turbines during the Incentive Term as a
material breach of this Agreement with respect to the relevant Market
Segment, triggering CESI's rights under Sections 8.1, 13.1.3, and 13.3
hereof. The purchase or otherwise obtaining of catalyst modules by GE
from Third Parties for the purpose of evaluation and testing (other
than field testing) shall not be a breach of this Agreement. The sale
by GE of a Third Party catalytic combustion system in a particular
Market Segment outside of the Incentive Term or for a gas turbine not
included in a Market Segment shall not be a breach of this Agreement.
Section 7.2.2 is hereby revised to read as follows:
7.2.2 In any event and as further consideration for GE's contribution to the
Commercialization Program, to the extent GE procures all of its
requirements for Gas Turbine catalytic combustion systems in a
particular Market Segment from CESI, GE may purchase the Products at
[*], with the exception of GE procurement during the Additional Period
during which period Article 6 shall control pricing.
Section 7.3 is hereby revised to read as follows:
7.3 Extension of the Incentive Term. In the event that the Target
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Percentage (defined below) or more of the Gas Turbines shipped or in
production by GE in the last year of the Incentive Term in a
particular Market Segment include a Xonon Module, or have associated
therewith an order for a Xonon Module, or result in an order for a
Xonon Module, then the Incentive Term shall be extended by one (1)
year. The Target Percentage shall be [*] for the first extension, [*]
for the second extension, [*] for the third extension, [*] for the
fourth extension, [*] for the fifth extension, and [*] for the sixth
and all subsequent extensions. In calculating such percentages, the
total number of Gas Turbines shipped or in production during such time
period (i.e., the last year of the Incentive Term) shall not include
Gas Turbines for which the customer does not require a NOx reduction
system, such as a Selective Catalyst Reduction Unit (SCR) or a Xonon
Combustion System or an equivalent NOx reduction system. For the
purpose of this Section 7.3 only, a Gas Turbine
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shall be considered "shipped" when it leaves the factory and "in
production" from the date of the order definition meeting (in which
the scope of supply is defined with the customer) until the date of
shipment. For the purpose of this Section 7.3 only, an "order" for a
Xonon Module means a commitment in writing to purchase a Xonon Module.
With respect to each Market Segment in the Incentive Term, GE shall
use its best efforts to keep books and records accurately showing all
shipment and production by GE of Gas Turbines which include a Xonon
module, or have associated therewith a Xonon module, or result in an
order for a Xonon module in such manner as to enable GE to determine
whether GE is entitled to an extension of the Incentive Term as set
forth in this Section 7.3. Such books and records shall be subject to
inspection by an independent auditor acceptable to GE at reasonable
times, but not more frequently than once every twelve months, for the
purpose of verifying GE's entitlement to an extension of the Incentive
Term. The fees and expenses of the auditor performing such an
examination shall be borne by CESI. GE shall notify CESI in writing of
GE's entitlement to an extension of the Incentive Term at least 14
days prior to the beginning of such extension.
Section 7.4 is hereby deleted.
Section 7.5 is hereby revised to read as follows:
7.5 Reduction of the Incentive Term.
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7.5.1 If GE fails, through no fault of CESI, to meet the target date for
first shipment or retrofit of a Gas Turbine in a particular Market
Segment as set forth in Sections 7.5.2 or 7.5.3 of this Agreement or
in a Market Segment Agreement, then the Incentive Term for that Market
Segment shall be reduced as follows:
Delay in Meeting
Target Date Reduction in Incentive Term
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1 - 182 Days One day reduction for each day that GE is late
in meeting the target date.
183 - 365 Days 1 year reduction plus one day reduction for each
day that GE is late in meeting target date + 182
Days.
Over 365 Days 2 year reduction plus one day reduction for each
day that GE is late in meeting the target date +
365 Days.
7.5.2 The target date for first shipment or retrofit for the Small Gas
Turbine Market Segment is [*], which date can be modified only by
mutual agreement of the parties.
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7.5.3 The target date for first shipment or retrofit for the Large Gas
Turbine Market Segment is [*], which date can be modified only by
mutual agreement of the parties.
Example: GE's first shipment of a Small Gas Turbine occurs June 30,
2003, [*] days after the target date of [*]. The Incentive Term is
defined in Section 1.20(1) to end June 30, 2006, three years after
actual shipment. The Incentive Term is reduced by 1 year plus 1 day
for each day after May 31, 2003 (target date + 182 Days), i.e., a
reduction of 1 year + 30 days. The reduced Incentive Term therefore
ends May 31, 2005.
If the target dates for first shipment or retrofit are not met because
of CESI's fault, or if CESI is unable to commit to the deliveries
contemplated by Section 7.3 in quantities that would extend the
Incentive Term due to Xonon Module technical, quality or delivery
reasons, then GE and CESI will consider in good faith a revised
schedule for extension of the Incentive Term that would provide GE
with the benefits contemplated in Section 7.3.
Section 7.6 is hereby deleted.
The following Section 7.8 is hereby added:
7.8 CESI guarantees that all Xonon Modules sold to GE will perform
satisfactorily in accordance with the Xonon Module product
specifications for at least 8000 operating hours. Xonon Modules which
fail to operate satisfactorily for at least 8000 operating hours will
be replaced by CESI on a pro-rata basis, including freight.
Article 8 - Royalties
Section 8.1 is hereby revised to read as follows:
8.1 Royalties Upon Certain Terminations. In the event of a termination of
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this Agreement by CESI under Section 13.1 or 13.2, including, in each
case, any termination by individual Market Segment under Section 13.6,
and subject to any surviving terms of this Agreement, if GE elects
thereafter to continue to sell and offer to sell Products to
customers, with respect to any such Market Segment, then CESI shall
grant to GE a non-exclusive, royalty-bearing, irrevocable, worldwide
license under CESI's Commercialization Program Technology, CESI's
Background Technology, the Xonon Control Algorithms, and CESI's U.S.
Patent 6,095,793 and foreign counterparts thereof to sell and offer to
sell Products and to sublicense Xonon Control Algorithms, and GE shall
pay to CESI fees and royalties with respect to such Market Segment,
payable in the form of (a) a one-time fee in the amount set forth
below or set forth in a subsequent Market Segment Agreement, payable
upon the first sale of a gas turbine incorporating such Product in
such Market Segment; and (b) a royalty in the amount set forth below
or set forth in a subsequent Market Segment Agreement for each
subsequent sale of a gas turbine incorporating such Product until the
Royalty Cap is achieved, at which time GE's License shall be fully
paid up, irrevocable, perpetual and worldwide. The royalties set forth
in Sections 6.2.4 and 6.2.5 are payable only for sales of
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Gas Turbines made during the life of this Agreement and, after
termination, are not payable in addition to the royalties set forth in
this Section 8.1.
------------------------ ---------------------- ------------------------ ----------------------
Market Segment Royalty Cap One-Time Fee Royalty Per Sale
------------------------ ---------------------- ------------------------ ----------------------
Large Gas Turbine [*] [*] [*]
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Syntroleum [*] [*] [*]
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Small Gas Turbine [*] [*] [*]
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Article 10 - Confidentiality
The following Section 10.4 is hereby added:
10.4 CESI shall not disassemble, measure, analyze, or otherwise reverse
engineer any fuel/air mixer package or preburner which is designed,
modified, or manufactured in whole or in part by or on behalf of GE
for GE designed gas turbines. CESI shall not modify its fuel/air mixer
package or preburner design based on the design of a fuel/air mixer
package or preburner which is designed, modified, or manufactured in
whole or in part by or on behalf of GE for GE designed gas turbines.
CESI retains the right to independently develop, modify, or improve
the fuel/air mixer package or pre-burner provided that such
developments, modifications, and improvements are based on CESI
Technology.
Article 12 - Technology and Patent Rights
Section 12.3.1 is hereby revised to read as follows:
12.3.1 GE License. In the event GE exchanges Technical Information comprising
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improvements and/or modifications to the Xonon Module during the
period of ten (10) years following the Effective Date of this
Agreement and/or if GE conceives, by means of GE employees who had
access to CESI Technology, any invention comprising an improvement or
modification to the Xonon Module, then GE shall grant to CESI a
non-exclusive royalty-free, perpetual, world-wide, irrevocable license
(with unrestricted rights to sublicense) to make, have made, use,
sell, lease, and/or export Products under both the aforesaid Technical
Information and any Patents which result from the aforesaid
inventions; said non-exclusive license being restricted in
field-of-use to Products for gas turbines employing catalytic
combustion, other than aircraft gas turbines. GE is not obligated to
grant any license to CESI under any GE Patents or Technical
Information relating to the fuel/air mixer package, the preburner, or
any combustor hardware components (other than the Xonon Module as set
forth in this Section 12.3.1).
Article 13 - Termination
Section 13.2 is hereby revised to read as follows:
13.2 Termination Without Cause. Either party shall have the unilateral
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right to terminate this Agreement by giving written notice to the
other party, upon the terminating party's written
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notice to the other party of significant technical issues which
indicate that the technical objectives of the Commercialization
Program are not achievable or cannot be achieved within the timetable
established in the Development Workplan or any extension thereof
agreed to by the parties; with GE having the right to terminate only
if the technical issues relate to the Xonon Module or Xonon
Components, and CESI having the right to terminate only if the
technical issues relate to the GE Components.
Section 13.3 is hereby revised to read as follows:
13.3 Consequences of Termination -- CESI Not in Default. In the event this
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Agreement is terminated by GE under section 13.2, or by CESI under
Section 13.1: (a) CESI shall have no obligation to make improvements
to the Xonon Combustion System available to GE beyond those developed
in the Commercialization Program prior to such termination; (b) GE's
exclusive licenses under CESI Technology pursuant to Section 6.2.1
shall be limited to GE-designed Gas Turbines, (c) GE's right to [*]
under Article 6 shall be extinguished, (d) GE's rights to [*], rights
to purchase and sole distribution rights under Article 7 shall all
terminate, and (e) if GE elects to pursue its options under Section
8.1, GE shall pay CESI the predetermined royalty or fee as provided
therein.
Sub-Section (a) of Section 13.4 is hereby revised to read as follows:
(a) GE's licenses pursuant to Article 6 shall continue in effect and
CESI shall promptly arrange with GE for a Third Party source of supply
(as a vendor to CESI) of the Xonon Combustion System using the
procedure set forth in Section 7.7 above which assures GE of a
continuing and uninterrupted source of supply for the Xonon Modules
and/or Xonon Components, and
Section 13.5 is hereby revised to read as follows:
13.5 Effect of Termination. Termination of this Agreement shall not relieve
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the parties of any obligation accruing prior to such termination. The
provisions of Sections 6.2.6, 7.8, 9.1, 9.2 and this 13.5, and
Articles 10 [Confidentiality], 11 [Publication], 12 [Technology and
Patent Rights] and 14 [Indemnity], in addition to those rights and
obligations specifically noted in Section 13.3 or 13.4, to the extent
applicable, shall survive the termination of this Agreement. Each
party shall bear its own termination costs. There will be no
liquidated damages.
Except as provided above, all other provisions of the CCLA remain unchanged and
said CCLA as amended by this Amendment No. 1 constitutes the entire
understanding between GE, CESI, and GPS with respect to the subject matter
thereof and supersedes all previous negotiations, commitments and writings with
respect thereto.
-12-
IN WITNESS WHEREOF, each of the parties has caused this Amendment No. 1 to be
executed in three (3) original copies by its duly authorized officers or
representatives and to become effective upon the last date of signature below.
General Electric Company Catalytica Energy Systems, Inc.
GE Power Systems
By By
----------------------------- --------------------------------
Title Title
----------------------------- --------------------------------
Witness Witness
----------------------------- --------------------------------
Date Date
----------------------------- --------------------------------
Genxon Power Systems LLC
By
--------------------------------
Title
--------------------------------
Witness
--------------------------------
Date
--------------------------------
-13-
EXHIBIT A [replaces Exhibit A in CCLA]
Program Schedule and Milestones
NPI Tollgate Completion Status and NPI Risk
Tollgate 1 Tollgate 2 Tollgate 3 Tollgate 4
PRODUCT OPTIONS REQUIREMENT & CONCEPTUAL
IDENTIFICATION RESOURCES DESIGN PRELIMINARY DESIGN
------------------------- --------------------------- --------------------------- ----------------------------
Define Market Driver Factor SI Feedback In Plan Launch Program Expand POS to Feature
------------------------- --------------------------- --------------------------- ----------------------------
* 000 * 200 * 300 * 400
------------------------- --------------------------- --------------------------- ----------------------------
------------------------- --------------------------- --------------------------- ----------------------------
Define Program Team Define Funct/Tech Req'ts Initiate Eng/Prod Process Perform Program Reviews
------------------------- --------------------------- --------------------------- ----------------------------
* 100 * 210a * 310 * 405
------------------------- --------------------------- --------------------------- ----------------------------
------------------------- --------------------------- --------------------------- ----------------------------
Define Cust. Expectations Define Services Req'ts Perform DFSS Studies Define/Record Interfaces
------------------------- --------------------------- --------------------------- ----------------------------
* 120 * 210b * 320 * 410
------------------------- --------------------------- --------------------------- ----------------------------
------------------------- --------------------------- --------------------------- ----------------------------
Establish Business Goals Generate Prel. Approach Establish Detailed Schedule Perform Risk Reviews
------------------------- --------------------------- --------------------------- ----------------------------
* 130 * 220 * 330 * 415
------------------------- --------------------------- --------------------------- ----------------------------
------------------------- --------------------------- --------------------------- ----------------------------
Develop Product Concepts Conduct Patent Search Hold Concept Risk Review Define Block Introduction
------------------------- --------------------------- --------------------------- ----------------------------
* 131 * 225 * 340 * 420
------------------------- --------------------------- --------------------------- ----------------------------
------------------------- --------------------------- --------------------------- ----------------------------
Assess Technology Perform Product Assess. Conduct Interface Reviews DFSS Projects Identified
------------------------- --------------------------- --------------------------- ----------------------------
* 132 * 230 * 350 * 430
------------------------- --------------------------- --------------------------- ----------------------------
------------------------- --------------------------- --------------------------- ----------------------------
Evaluate Business Impact Revalidate Customer QPD Perform Legal Reviews Create Test Plan Req'ts
------------------------- --------------------------- --------------------------- ----------------------------
* 140 * 240 * 360 * 440
------------------------- --------------------------- --------------------------- ----------------------------
------------------------- --------------------------- --------------------------- ----------------------------
Perform Risk Review Finalize Best Option Prepare Design Review Perform Concept Demo's
------------------------- --------------------------- --------------------------- ----------------------------
* 145 * 245 * 370 * 445
------------------------- --------------------------- --------------------------- ----------------------------
------------------------- --------------------------- --------------------------- ----------------------------
Scope Project Req'ts Establish Resource Req'ts Hold Design Review Develop Schedule & Budget
------------------------- --------------------------- --------------------------- ----------------------------
* 150 * 250 * 380 * 450
------------------------- --------------------------- --------------------------- ----------------------------
------------------------- --------------------------- --------------------------- ----------------------------
Hold Pre-SI Review Set Subsystem CTQ's Define Prod. Quoting Limits Hold Design Review
------------------------- --------------------------- --------------------------- ----------------------------
* 199 * 260 * 385 * 460
------------------------- --------------------------- --------------------------- ----------------------------
--------------------------- --------------------------- ----------------------------
Finalize Product Spec Finalize Cycle Deck Hold Product Spec Review
--------------------------- --------------------------- ----------------------------
* 265 * 387 * 470
--------------------------- --------------------------- ----------------------------
--------------------------- --------------------------- ----------------------------
Hold Pre-SII Review Hold Tollgate Review Develop Introduction Plan
--------------------------- --------------------------- ----------------------------
* 270 * 390 * 480
--------------------------- --------------------------- ----------------------------
--------------------------- --------------------------- ----------------------------
Finalize Program Plans Decision to Develop Product Hold Prelim. Tollgate Review
--------------------------- --------------------------- ----------------------------
Tollgate 5 Tollgate 6 Tollgate 7
PRODUCTION &
DETAILED DESIGN DESIGN VALIDATION POST SHIPMENT
--------------------------- ---------------------------- ----------------------------
Update Program Plan Refine Teams, Schedules Update Program Status
--------------------------- ---------------------------- ----------------------------
* 500 * 600 * 700
--------------------------- ---------------------------- ----------------------------
--------------------------- ---------------------------- ----------------------------
Complete Component Test Procure/Manufact H'dware Ship Units(s)
--------------------------- ---------------------------- ----------------------------
* 510 * 610a * 705
--------------------------- ---------------------------- ----------------------------
--------------------------- ---------------------------- ----------------------------
Complete Design Activities Build/Validate Subassy Perform Pre-Install Review
--------------------------- ---------------------------- ----------------------------
* 520 * 510b * 710
--------------------------- ---------------------------- ----------------------------
--------------------------- ---------------------------- ----------------------------
Complete Documentation Build, Test & Validate Unit Perform Post-Install Review
--------------------------- ---------------------------- ----------------------------
* 530 * 620 * 720
--------------------------- ---------------------------- ----------------------------
--------------------------- ---------------------------- ----------------------------
Develop System Test Plan Complete Product Validation Document Lessons Learned
--------------------------- ---------------------------- ----------------------------
* 540 * 630a * 730
--------------------------- ---------------------------- ----------------------------
--------------------------- ---------------------------- ----------------------------
Complete Production Plan Conduct Problem Reviews Conduct Product Test
--------------------------- ---------------------------- ----------------------------
* 550 * 630b * 740
--------------------------- ---------------------------- ----------------------------
--------------------------- ---------------------------- ----------------------------
Hold Final Design Review Verify Status for Field Ship Complete Product Validation
--------------------------- ---------------------------- ----------------------------
* 560 * 640 * 750
--------------------------- ---------------------------- ----------------------------
--------------------------- ---------------------------- ----------------------------
Conduct Final Patent Revw Prepare for Customer Test Conduct Problem Reviews
--------------------------- ---------------------------- ----------------------------
* 570 * 650 * 760
--------------------------- ---------------------------- ----------------------------
--------------------------- ---------------------------- ----------------------------
Predict Design Performance Hold Tollgate 6 Review Update Business Plans
--------------------------- ---------------------------- ----------------------------
* 580 * 699 * 770
--------------------------- ---------------------------- ----------------------------
--------------------------- ----------------------------
Update Risk Review Conduct Post-Install Review
--------------------------- ---------------------------- ----------------------------
* 590 Completion Status Key * 780
--------------------------- ---------------------------- ----------------------------
/ Done
--------------------------- + Partially Complete ----------------------------
Update Introduction Plan Integrate Lessons Learned
--------------------------- * No Progress ----------------------------
* 585 ---------------------------- * 790
--------------------------- ----------------------------
X Change Since Last Review
--------------------------- ---------------------------- ----------------------------
Hold Tollgate 5 Review NPI Risk Key Hold Tollgate 7 Review
--------------------------- ----------------------------
* 599 * 799
--------------------------- ----------------------------
-00-
Xxxxxxx X
Xxxxxxxxxxxxxxxxx Xxxx
Xxxxxxx X is hereby deleted.
-15-
Exhibit D
Exceptions to Exclusive Rights of Section 6.2.1
[*]
-16-
