EXHIBIT 10.1
LICENSE AGREEMENT
THIS AGREEMENT dated for reference March 5, 1999.
BETWEEN:
818879 ALBERTA LTD., an Alberta, Canada, corporation
having its head office at 4500 Bankers Hall West,
000 Xxxxxx Xxxxxx, X.X., Xxxxxxx, XX, X0X 0X0, Xxxxxx
("818879")
OF THE FIRST PART
AND:
CLEAN ENERGY TECHNOLOGY INC., a Delaware, U.S.A.
corporation having its head office at 0000
XxxXxxxxxx Xxxxxx, Xxxxxxx, X.X., X0X 0X0, Xxxxxx
("CETI")
OF THE SECOND PART
WHEREAS:
A. 818879 owns the exclusive right to exploit a novel blade combustion
geometry which utilizes pulse blade combustion for which the letters patent
detailed in Schedule "A" attached hereto have been issued or applied for
(the "PBC Technology");
B. Xxxx X. Xxxxx, the inventor of the PBC Technology and the original holder
of the Patents, has granted to 818879 and its assignees a 120 day right of
first refusal to acquire from him the exclusive right to exploit any future
inventions using pulse blade combustion which are outside the scope of the
definition of "patents" contained in paragraph 1.1(g) of this Agreement
(the "Right of First Refusal");
C. 818879 has agreed to grant to CETI the exclusive worldwide right and
license to design, engineer, manufacture, market, distribute, lease and
sell burner products using the PBC Technology, and to sublicense and
otherwise commercially exploit the PBC Technology;
D. 818879 has also agreed to grant to CETI an option to purchase the PBC
Technology the Right of First Refusal, and related intellectual property,
as set out in this License Agreement.
NOW THEREFORE in consideration of CETI paying U.S. $10.00 to 818879 and other
good and valuable consideration contemplated by this Agreement (the receipt and
sufficiency of which is hereby acknowledged by 818879), the parties hereto
covenant and agree as follows:
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1. DEFINITIONS
1.1 In this Agreement the following definitions apply:
(a) "Business Day" means means any day other than a day which is a
Saturday, a Sunday or a statutory holiday in British Columbia, Canada.
(b) "Confidential Information" means all trade secrets, know-how,
proprietary knowledge, technology, improvements and other valuable
information relating to the PBC Technology or the Patents which is not
yet in the public domain.
(c) "License" mean the exclusive world-wide right to design, engineer,
manufacture, market, distribute, lease and sell burner products using
the PBC Technology, and to sublicense and otherwise commercially
exploit the PBC Technology.
(d) "Licensed Activities" mean the designing, engineering, manufacturing,
marketing, distributing, leasing and selling of burner products and
other heating applications which utilize, or are used in conjunction
with, the PBC Technology, and the sublicensing of such activities.
(e) "Licensed Applications" mean all burner products and other heating
applications which utilize, or are used in conjunction with, the PBC
Technology;
(f) "National Market" means any of the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Market (both SmallCap and
National Markets);
(g) "Patents" means and includes:
(i) the patents and patent applications listed in Schedule "A";
(ii) any divisional, continuation or substitute patent applications
which are based on the patents or patent applications listed in
Schedule "A";
(ii) any patent which may issue or be re-issued from any patent
application described in (ii); and
(iv) patents and patent applications corresponding to each of the
patents and patent applications described in (i), (ii) and (iii)
above which are issued, filed, or to be filed in any and all
foreign jurisdictions, and patents (including but not limited to
patents of importation, improvement, or addition, utility models
and inventors certificates) which may subsequently issue thereof,
and any renewals, divisions, renewals, continuations or
extensions thereof.
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(h) "Personnel" means any employee, officer, director, shareholder,
independent contractor, representative or other agent of an entity;
(i) "Related Party" means any person, corporation, partnership, firm or
other entity which is related to CETI in any of the following ways:
(i) as an affiliate of CETI (as interpreted below);
(ii) as the Personnel of CETI, an affiliate of CETI, or a Sublicense;
(iii) as a financial institution leasing, or otherwise providing
financing for, a purchased item of Licensed Application to CETI
or to a Sublicensee or affiliate of CETI.
For the purpose of this definition, "affiliate" is to be interpreted
broadly to apply to any person, corporation, firm or other entity
which controls, is controlled by or is under common control with CETI
or any Sublicensee; and "control" is also to be interpreted broadly to
include actual control. Without limiting the generality of the
foregoing, "affiliate" shall include any person, corporation, firm or
other entity which has an interest in not less than 35% of the issued
voting capital of CETI or any Sublicensee; and any corporation in
which CETI or any Sublicensee have in aggregate an interest in not
less than 35% of the issued voting capital of that corporation.
(j) "Sublicense" means any agreement between CETI and another party under
which CETI sublicenses its right to pursue any of the Licensed
Activities in respect of any of the Licensed Applications;
(k) "Sublicensee" means the holder of a subsisting Sublicense;
(l) "Term" means the period commencing March 5, 1999 and ending on the
earlier of: (i) March 5, 2019 and (ii) the lapsing date of the newest
of the underlying patents for the PBC Technology, including patents on
any improvements thereto.
2. GRANT OF LICENSE
2.1 For the consideration set out in this Agreement, 818879 hereby grants to
CETI the License for the Term. During the Term, CETI will use its best
efforts to pursue the Licensed Activities to the fullest extent possible,
and without interruption.
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Ancillary Grant
2.2 Ancillary to this grant of License, 818879 hereby grants to CETI for use
solely in pursuit of the Licensed Activities during the term of this
Agreement, the exclusive right to use the PBC Technology, the Patents,
the Confidential Information and all those ancillary assets owned by
818879 which CETI will need to carry out the Licenced Activities, (the
"Ancillary Assets").
Licensed Trademarks
2.3.1. In order to promote and identify the Licensed Applications, 818879
hereby grants to CETI the right to use any trademarks and trade names
designated by 818879 for use from time to time in conjunction with the
Licensed Applications during the term of this Agreement (the "Licensed
Trademarks"); 818879 authorizes CETI to grant to Sublicensees, when
necessary under a Sublicense, the right to use specified Licensed
Trademarks in a specified territory during the term of this Agreement;
but CETI, each Sublicensee and any applicable Related Party must first
enter into such user agreements with 818879, in forms approved by
818879, as 818879 shall from time to time deem appropriate for each
jurisdiction in which any of the Licensed Trademarks are to be used, but
no such user agreements may require payment of any fee or royalty to
818879 or to CETI. CETI may not use, nor will it allow any Sublicensee
or Related Party to use, the Licensed Trademarks except in connection
with Licensed Activities as permitted under this Agreement.
2.3.2. The Licensee will identify or cause to be identified prominently on each
item of a Licensed Application the applicable patent or pending patent,
together with the trademark and trade name specified by 818879 for such
item. On each item of a Licensed Application must be affixed an
identification plate which indicates:
(a) the relevant patent or pending patent with its serial number or
numbers;
(b) the place of manufacture; and
(c) the following statement: "CETI (or the name of the relevant
Sublicensee as the case may be) under license from 818879". No
trade name other than one of 818879's Licensed Trademarks, as
specified by 818879, one of CETI's trade names, as specified by
CETI, and one of the trade names of a Sublicensee, if such item was
manufactured or distributed by a Sublicensee, may be affixed to any
item of a Licensed Application. Unless 818879 and CETI specifically
agree in writing otherwise, the size of 818879's Licensed
Trademarks and CETI's trade names affixed to items of a Licensed
Application must be at least 100% of the size of the largest of any
Sublicensee's trade names or trademarks affixed to such items.
2.3.3 CETI will use, and cause the Licensed Trademarks to be used, in strict
compliance with all applicable laws and regulations.
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2.3.4 CETI will conduct any advertising and promotion in which the Licensed
Trademarks are used in such a way as to ensure the continued validity
and enforceability of the Licensed Trademarks.
Patent and Trademark Applications
2.4 Except as provided for in this paragraph, no one other than 818879 may
apply for or register any patent, trademark or other proprietary
intellectual property rights in any jurisdiction with respect to the PBC
Technology, the Confidential Information or the Licensed Applications.
CETI, each Sublicensee and each Related Party will notify 818879 in
writing at least 30 days before using a Patent, a Licensed Trademark or
the Confidential Information in any jurisdiction in which such Patent,
Licensed Trademark or the Confidential Information has not previously
been used by CETI, such Sublicensee or such Related Party. CETI will, at
the request of 818879, execute such documents as may be appropriate for
filing or recording in any jurisdiction evidence as to the status of
CETI or a Sublicensee as a licensee or registered user. 818879 will use
its best efforts to apply for and register patent, trademark or other
proprietary intellectual property rights, or such evidence as to the
status of CETI or a Sublicensee in any jurisdiction requested by CETI,
but 818879's inability or failure to obtain such registration or
evidence will not be a breach of this Agreement. If 818879 fails to
obtain any such registration or evidence CETI may, with the prior
written consent of 818879, attempt to obtain such registration or
evidence in the name of 818879. All costs and expenses of either 818879
or CETI in connection with such attempts (including without limitation
reasonable legal expenses) will be the responsibility of CETI. At the
request of CETI, either during or after the term of this Agreement,
818879 will execute such documents and render such assistance as may be
appropriate to enable CETI to obtain registration or evidence as to
status in any jurisdiction. Other than as set out in this paragraph,
818879 has no obligation whatsoever to apply for or register patents,
trademarks, or other proprietary intellectual rights in any jurisdiction
in which such patents, trademarks or rights are not registered as of the
reference date of this Agreement.
Superior Rights of 818879
2.5 CETI acknowledges that subject only to this exclusive License to CETI,
818879 is the owner of the PBC Technology, the Patents, the Confidential
Information and the Licensed Trademarks. CETI may not, during the term
of this Agreement or at any time after the termination of this Agreement
(unless CETI has exercised its option to purchase under Parts 9 or 10),
in any way whatsoever dispute, object to or challenge, through
proceedings or otherwise, the validity of the Patents, or 818879's
ownership of the PBC Technology, the Patents, the Confidential
Information or the Licensed Trademarks.
No Rights by Implication
2.6 No rights or licenses with respect to the PBC Technology, the Patents or
the Confidential Information, are granted or deemed granted to CETI
other than as expressly set out in paragraph 2.2 of this Agreement.
Without limiting the foregoing, no Sublicensee or Related
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Party has any right whatsoever to conduct any research, development,
modification, alteration or improvement of the PBC Technology, or any
application of it.
Quality Control
2.7 If CETI manufactures or assembles any items of Licensed Applications, it
covenants to use its best efforts to ensure that each such item:
(a) satisfies any and all applicable governmental laws and regulations;
(b) is constructed of materials of appropriate high quality; and
(c) is tested with due care before its use, operation or sale to any
third party.
Export Licenses
2.8 At the reasonable request of CETI, 818879 will use its best efforts to
obtain any export and re-export authorizations or licenses, which CETI
may require from time to time, but its inability to obtain such
authorizations or licenses will not constitute a breach of this
Agreement. CETI is responsible for the costs and expenses of 818879 in
obtaining any export and re-export authorizations and licenses. If
818879 is unable to obtain any such authorizations or licenses, CETI
may, but is not required to, attempt to obtain such authorizations or
licenses itself, in which case, 818879 will assist and co-operate with
CETI in this process.
3. REPORTS
Contents of Reports
3.1 CETI will deliver to 818879 within 90 days of the end of each year, a
written report, certified by the chief operating officer of CETI as
being true and correct, describing, for the applicable year, all CETI's
initiatives, efforts, and results in pursuit of the Licensed Activities
during the year.
Right to Review
3.2 On seven days' prior notice to CETI, 818879 and its agents may have full
access to the books and records of CETI pertaining to activities under
this Agreement, and may make copies of them at 818879's expense. 818879
and its agents may have such access at all reasonable times during
normal business hours throughout the term of this Agreement.
Information Confidential
3.3 818879 will keep confidential all information obtained in the course of
any examination of
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CETI's books and records, except when it is necessary
for 818879 to reveal such information in order to enforce its rights
under this Agreement in court, arbitration or similar dispute resolution
or enforcement proceedings and except when compelled by law.
4. SUBLICENSE CONDITIONS
Limited Right to Grant Sublicenses
4.1 818879 grants to CETI the right to grant Sublicenses during the term of
this Agreement, but only with the prior written consent of 818879, such
consent not to be unreasonably withheld, and only if such Sublicense
complies in all respects with the provisions of this Part 4.
Quality Control
4.2 CETI must include in each Sublicense a quality control provision
identical to paragraph 2.7, except that in such Sublicense, a reference
to CETI will instead refer to the relevant Sublicensee.
Sublicensee Bound by License
4.3 In each Sublicense, the Sublicensee must acknowledge that it is bound by
all CETI's obligations contained in this Agreement and that CETI's
rights, powers and remedies with respect to the Sublicensee are at least
as great as 818879's rights, powers and remedies with respect to CETI
contained in this Agreement, and CETI will cause each Sublicensee to
execute any and all additional documents reasonably requested by 818879
to that effect.
CETI's Obligations Continue
4.4 Notwithstanding any such Sublicense, CETI will remain responsible to
818879 for all CETI's obligations under this Agreement.
Termination of Sublicense
4.5.1 Upon the termination or expiry of this Agreement for any reason (other
than the exercise by CETI of its option to purchase under Parts 9 or
10), each Sublicense will automatically terminate except that, for a 90
day period following such termination, each Sublicensee may reinstate
its Sublicense with 818879 (or its assignee, as the case may be) taking
the place of CETI in such Sublicense. Such reinstatement will be
effective upon 818879 receiving a written acknowledgment and agreement
from the relevant Sublicensee to the effect that:
(a) 818879 is the assignee of CETI's rights under such Sublicense;
(b) all rights and remedies of CETI in effect on or before the
effective date of such
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reinstatement pursuant to such Sublicense are also assigned to
818879; and
(c) the obligations of 818879 (or its assignee, as the case may be)
under such reinstated Sublicense will under no circumstances be
greater than the obligations of 818879 to CETI under this
Agreement.
Sublicense to Become CETI License
4.6 If CETI exercises its option to purchase the PCB Technology under Parts
9 or 10, each Sublicense which is in good standing at the time will
automatically continue as a license with CETI.
5. CONFIDENTIAL INFORMATION
5.1 CETI will maintain the confidentiality of the Confidential Information
during the term of this Agreement and for the period after termination
or expiry of this Agreement until such information has entered the
public domain.
5.2 CETI will not disclose any Confidential Information to any of its
Personnel, to a Sublicensee, to a Related Party, or to any of their
Personnel, except to those specific Personnel to whom knowledge of the
Confidential Information is reasonably necessary to enable them to
pursue the Licensed Activities in accordance with this Agreement.
5.3 CETI will not disclose Confidential Information to a person other than
one identified in paragraph 5.2 unless it is necessary to do so in the
ordinary course of CETI's Licensed Activities and unless:
(a) such person has executed a confidentiality agreement (the
"Confidentiality Agreement") substantially in the form of Schedule "B"
attached to and made a part of this Agreement; or
(b) CETI has taken other steps acceptable to 818879, acting reasonably,
to ensure that such person will maintain the confidentiality of the
Confidential Information during the term of this Agreement and for
the period after termination or expiry of this Agreement during
which such information has not yet entered the public domain.
6. IMPROVEMENTS
Disclosure of Improvements
6.1 818879, CETI, each Sublicensee and each Related Party will immediately
disclose to each other all improvements to the PBC Technology, the
Licensed Applications or the Confidential
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Information. Nothing contained in this paragraph will by implication or
otherwise sanction the conduct by CETI, any Sublicensee or any Related
Party of those activities expressly prohibited by the terms of paragraph
2.6 of this Agreement.
Improvements Included in License
6.2 Improvements to the PBC Technology, the Licensed Applications or to the
Confidential Information (whether capable of being patented or not) made
by Xxxx X. Xxxxx, or by or on behalf of 818879, CETI, any Sublicensee or
any Related Party, will be the exclusive property of 818879, and as
such, will be deemed part of this License and of the right to purchase
in paragraph 9.2 and the PBC Technology Option and may be used by CETI
in connection with the Licensed Activities, subject to the terms and
conditions of this Agreement. Neither party will be entitled to
additional monetary consideration from the other party for the use of
such improvements in the pursuit of the Licensed Activities and neither
party will disclose such improvements to third parties without first
obtaining from such third parties obligations substantially the same as
those set forth in Part 5 CONFIDENTIAL INFORMATION.
Improvements to be Assigned to 818879
6.3 In the case of improvements made to the Licensed Applications or to the
Confidential Information by CETI, any Sublicensee, any Related Party or
their Personnel, during the term of this Agreement, CETI will
immediately take all steps and cause any Sublicensee, Related Party or
their Personnel to take all steps as are reasonably required by 818879
to transfer title and ownership of such improvements to 818879. 818879
alone has the right to apply for and obtain patents or other proprietary
registrations in respect of such improvements. 818879 hereby appoints
CETI as its sole agent and Power of Attorney for the purpose of pursuing
such applications and registrations on behalf of 818879, and 818879 will
assist and co-operate with CETI in this process. Any patents so obtained
will be deemed included in the License, the right to purchase in
paragraph 9.2 and the PBC Technology Option, and will be subject to the
terms and conditions of this Agreement.
7. PROTECTION OF PATENTS & TRADEMARKS
Detect and Report Patent Infringements
7.1 CETI will keep watch to detect any possible infringements or other
unauthorized use of any of the Patents or Licenced Trademarks. Upon
discovery of a possible infringement or other unauthorized use, CETI
will immediately notify 818879.
7.2 Patent and Trademark Infringements
7.2.1 During the term of this License, 818879 will, at the expense of CETI, be
solely responsible for taking all actions, legal or otherwise, which, in
the judgment of 818879 are reasonably necessary to protect or enforce
any of the Patents or Licenced Trademarks. CETI will be solely
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responsible for paying any award of court costs or damages resulting
from such actions. The selection and conduct of such actions will be at
the sole discretion of 818879. CETI will cooperate with 818879 and not
interfere in any way with 818879 in respect of the conduct of such
actions.
7.2.2 If 818879 does not take action to protect or enforce a Patent or
Licensed Trademark within 120 days after receiving notice from CETI of a
possible infringement or other unauthorized use, then CETI may itself
commence an action to protect or enforce the Patent or Licensed
Trademark. 818879 will have the right to be kept informed of the status
and progress of any such action instituted by CETI.
7.2.3 Any recoveries, awards or settlements by 818879 resulting from efforts
to protect or enforce any of the Patents or Licensed Trademarks, after
the deduction of any costs or expenses incurred by 818879, will be paid
to CETI.
Patent or Trademark Validity Defences
7.3 As between 818879 and CETI, 818879 will have the sole responsibility for
defending, at the expense of CETI, all legal actions asserting the
invalidity of any of the Patents or Licensed Trademarks. 818879 will
conduct such defence, and CETI will cooperate with and not interfere
with 818879's defence of such actions. CETI will be solely responsible
for any award of court costs and damages resulting from such a defence.
If 818879 does not defend against any such action (including appropriate
appeals), CETI may defend against such an action and 818879 will have
the right to be kept informed of the status and progress of each such
defence by CETI.
Other Party's Name in Suit
7.4 Where, in the judgment of either 818879 or CETI, as the case may be, it
is necessary to join the other as a party in order to effectively
prosecute or defend an action asserting infringement or invalidity of
any of the Patents or Licensed Trademarks, each party will allow the
other to so join such other party as a party to the action.
Notification of Suit
7.5 Each Party will immediately notify the other of any suit or action
wherein such party or any Sublicensee or Related Party is named as a
party and which directly or indirectly relates to the use of the
Patents, the Licensed Trademarks, the Licensed Applications or the
Licensed Activities.
Detect and Report Breach of Confidential Information
7.6 Each party will keep watch to detect any possible unauthorized
disclosures or use of the Confidential Information and will immediately
notify the other party of any such possible unauthorized disclosures or
uses.
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Action Against Confidential Information Breaches
7.7 If any unauthorized disclosure or use of Confidential Information has
not ceased within a reasonable period, not to exceed 15 days, after
written notice given by either 818879 or CETI which demands that the
relevant person or entity terminate such unauthorized disclosure or use,
then 818879 may, and at CETI's request will, at CETI's expense,
immediately bring legal action to enjoin and seek damages for such
unauthorized disclosure or use, and CETI will become a party to such
action if, in the judgment of 818879, it is necessary or advisable; but
if 818879 has not commenced any such action within 30 days after either
818879 or CETI has given notice demanding termination, then CETI may do
so upon written notice to 818879. 818879 will conduct such action and
CETI will cooperate with 818879 in such action. CETI will bear the costs
of such action as well as any award of court costs and damages resulting
from such action. Any recoveries, awards, or settlements resulting from
actions taken against parties making unauthorized disclosures or uses
will be paid to CETI after deduction of any costs or expenses incurred
by 818879.
Requests for Payment
7.8 All amounts payable by CETI to 818879 pursuant to this Article 7 will be
payable immediately after 818879 makes a written request and provides
CETI with a written summary of the amounts outstanding, together with
such supporting documentation as may be reasonably requested by CETI.
8. INDEMNITY BY CETI AND SUBLICENSEES
Indemnity
8.1 CETI will indemnify and hold 818879 harmless from and against any and
all claims, injuries, liabilities, costs and expenses resulting from, or
claimed to have resulted from, any Licensed Activity or the use or
operation of the Licensed Applications by CETI, any Sublicensee, any
Related Party or any Unrelated Party (whether based on negligence,
strict liability or other grounds) and against claims for consequential
damages and/or lost profits arising from such Licensed Activity or the
use or operation of Licensed Applications. CETI will maintain insurance
with reputable insurance companies approved by 818879 (such approval not
to be unreasonably withheld) for such risks and in such amounts as
818879 in its reasonable business judgment determines to be appropriate.
818879 will be named as an additional insured and loss payee on each
such insurance policy.
Sublicensee Indemnity
8.2 CETI will cause each Sublicensee to indemnify and hold 818879 harmless
from and against any and all claims, damages, injuries, liabilities,
costs and expenses incurred by 818879 resulting from a claim in respect
of:
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(a) a design or manufacturing defect in any item of Licensed Applications
manufactured by such Sublicensee or by any sublicensee of such
Sublicensee (whether characterized as product liability, negligence,
strict liability, breach of warranty or otherwise) or
(b) any other cause which was under the control of such Sublicensee or
any sublicensee of such Sublicensee during the manufacture of any
item of Licensed Applications. CETI will cause Sublicensees to be
solely responsible for all costs and expenses of 818879 in respect of
all such actions brought against 818879. No Sublicensee will
compromise or settle any such claim or action against it without the
prior written consent of 818879 and any such attempted compromise or
settlement will be void and of no effect whatsoever as against
818879.
8.2.1 Each Sublicensee indemnifying 818879 pursuant to this paragraph 9.2 will:
(a) maintain insurance with reputable insurance companies approved by
818879 (such approval not to be unreasonably withheld) for such
risks, and in such amounts as 818879 in its reasonable business
judgment determines to be appropriate, with such polices naming
818879 and CETI as additional insured and loss payees; and
(b) at the reasonable request of either 818879 or CETI, pay premiums on
insurance policies identified by 818879 or CETI which insure 818879
or CETI against adverse final monetary judgment awards in excess of
the insurance coverage provided by such Sublicensee pursuant to part
(i) of this sub-paragraph.
9. TERMINATION AND EXPIRY
Automatic Expiry
9.1 Unless it is terminated on an earlier date pursuant to this Part 9 or by
the exercise by CETI of its option under Part 10, this Agreement will
continue in full force and effect until it automatically expires at the
end of the Term.
Early Termination by 818879 and Resulting Right to Purchase by CETI
9.2 If for any reason CETI's Common Stock is not actively trading on a
National Market by March 4, 2002, then 818879 and CETI will have the
following rights, respectively:
(a) 818879 will have the right, on giving CETI written notice
accompanied by Cdn $1.00, to terminate this Agreement, but ;
(b) if 818879 exercises its termination right, CETI will have the
right, for 90 days following receipt of the written notice of
termination, to obtain the listing of CETI's Common Stock on a
National Market (in which case 818879's
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termination right shall lapse), or, in the alternative, to
purchase title to the PBC Technology, the Confidential
Information, all the Patents, the Right of First Refusal, all
Licensed Trademarks and the Ancillary Assets, by payment of Cdn
$525,000 plus interest accrued thereon at the rate of 13% per
annum from January 1, 1999, but only if 818879 first tenders to
CETI (i) 593,750 shares of CETI's Common Stock, without
additional consideration therefore; to the extent that 818879 is
unable to tender such shares, the monetary consideration referred
to above will be reduced on a pro rata basis based upon the
number of shares of Common Stock actually tendered; and (ii) all
shares of Series A Preferred Stock then remaining outstanding;
(c) if 818879 has not exercised its termination right by March 4,
2003, then CETI has the right, on giving 818879 written notice,
to require 818879 to exercise its termination right within 90
days of receipt of the written notice;
(d) if 818879 fails to exercise its termination right within the 90
day period in (c), title to the PBC Technology, the Confidential
Information, all the Patents, the Right of First Refusal, all
Licensed Trademarks and the Ancillary Assets will automatically
revert to CETI upon payment of Cdn $1.00 to 818879.
Insolvency
9.3 This Agreement will terminate at any time at the option of 818879 if CETI
becomes bankrupt or insolvent, is threatened with bankruptcy or insolvency,
or makes an assignment in favour of creditors.
CETI will Cease Licensed Activities
9.4 Within 90 days of termination of this Agreement for any reason, and except
(i) as permitted under paragraph 9.5, or (ii) if CETI acquires the PCB
Technology and the related intellectual property under its rights in
paragraph 9.2 or Part 10, CETI will cease to pursue any Licensed
Activities and will cease to use the Confidential Information, all the
Patents, any Licensed Trademarks, and the Ancillary Assets in any manner
whatsoever.
Completion Period
9.5 Notwithstanding paragraph 9.4 CETI may, during the nine month period
immediately following termination of this Agreement, complete uses or
operations in progress, finish items of Licensed Applications then in the
process of being manufactured and liquidate its inventory, all in
accordance with the terms and conditions of this Agreement.
Adverse Infringement Judgment not Default
9.6 818879 may not terminate this Agreement by reason only of an adverse
judgment in favour of a
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third party in respect of an infringement or unfair competition action
involving the use of any of the Patents or any Licensed Trademarks.
10. OPTION
10.1 On or after March 4, 2002, CETI has the option (the "PBC Technology
Option") to purchase from 818879 all its right, title and interest in the
PBC Technology, the Confidential Information, all the Patents, the Right
of First Refusal, all Licensed Trademarks and the Ancillary Assets, for
Cdn $1.00, but only so long as:
(a) CETI's Common Stock has been accepted for listing or quotation on a
National Market by that date; and
(b) CETI has not become bankrupt or insolvent, has not been threatened
with bankruptcy or insolvency, or has not made an assignment in
favour of creditors.
10.2 If following the exercise of the PBC Technology Option, CETI become
bankrupt or insolvent, is threatened with bankruptcy or insolvency, or
makes an assignment in favour of creditors, then 818879 may repurchase
from CETI the PBC Technology, the Confidential Information, all the
Patents, the Right of First Refusal, all Licensed Trademarks and the
Ancillary Assets (the "PBC Technology Repurchase Option"), but the PBC
Technology Repurchase Option will expire once CETI has been accepted for
listing or quotation on a National Market for a period of two years, or if
the percentage of 818879's ownership of outstanding CETI Common Stock
falls below 5%. To exercise the PBC Technology Repurchase Option, 818879
must tender to CETI 593,750 shares of CETI Common Stock, without
additional consideration therefore.
11. GOVERNING LAW
11.1 This Agreement will be governed by and construed in accordance with the
laws of the Province of British Columbia, Canada. The parties irrevocably
attorn to the jurisdiction of the Supreme Court of British Columbia,
Canada, Vancouver Registry, for the purposes of all litigation in respect
of or arising out of the terms of this Agreement.
12. ASSIGNMENT
Assignment by 818879
12.1 818879 may not assign any or all of its rights under this Agreement or
sell the PBC Technology to a third party except with the prior written
consent of CETI, which consent may not to be unreasonably withheld. Any
such assignment or sale will be subject to CETI's rights to acquire
-15-
the PBC Technology under this Agreement.
Assignment by CETI Restricted
12.2 CETI may not assign any of its rights under this Agreement except with the
prior written consent of 818879, which consent may be arbitrarily
withheld.
13. MISCELLANEOUS
Waiver
13.1 A waiver of any breach of any provision of this Agreement will not be
construed as a continuing waiver of other breaches of the same or other
provisions of this Agreement.
No Other Relationship
13.2 Nothing in this Agreement will be deemed to create an agency, joint
venture, partnership or franchise relationship between the parties.
Notices
13.3 Any notice required or permitted to be given or sent under this Agreement
will be given by hand delivery or by registered or recorded air mail post
to the receiving party at the address appearing on the first page. Either
party may change its address for receiving notices under this Agreement by
giving the other party written notice of its new address. Any such notice
if given or made by registered or recorded delivery air mail post will be
deemed to have been received on the earlier of the date actually received
and the date ten days after the same was posted (and in proving such it
will be sufficient to prove that the envelope containing the same was
properly addressed and posted as aforesaid) and if given or made by hand
delivery will be deemed to have been received at the time of actual
delivery, unless such date is not a Business Day, in which case the date
of delivery will be deemed to be the next succeeding Business Day after
actual delivery.
Entire Understanding; Prior Agreements to be Replaced
13.4 This Agreement embodies the entire agreement between the parties relating
to the subject matter hereof and replaces any prior representations,
warranties or agreements of any kind between the parties.
Severability
13.5 If any term or provision of this Agreement or the application thereof to
any person or circumstance is, to any extent, determined to be invalid,
illegal or unenforceable by a court
-16-
of competent jurisdiction, then, and in that event:
(a) the performance of the offending term or provision (but only to the
extent its application is invalid, illegal or unenforceable) shall be
excused as if it had never been incorporated into this Agreement,
and,in lieu of such excused provision, there shall be added a
provision as similar in terms and amount to such excused provision as
may be possible and be legal, valid and enforceable; and
(b) the remaining part of this Agreement (including the application of the
offending term or provision to persons or circumstances other than
those as to which it is held invalid, illegal or unenforceable) shall
not be affected thereby, and shall continue in full force and effect
to the fullest extend provided by law.
Amendments
13.6 All amendments to this Agreement must be in writing and signed by both
parties.
Rights, Powers, Remedies Cumulative; Waiver
13.7 Each and every right and remedy in this Agreement specifically given to
818879 will be cumulative and will be in addition to every other right and
remedy herein or now or hereafter existing at law, in equity, or by
statute, and each and every right, and remedy, whether specifically given
in this Agreement or otherwise existing may be exercised from time to time
and as often and in such order as may be deemed expedient by 818879, and
the exercise at the same time or thereafter any other right or remedy. It
is expressly understood and agreed by CETI that time is of the essence of
the Agreement and that no delay or omission by 818879 in the exercise of
any right or power or in the pursuit of any remedy accruing upon any
ground for termination hereunder will impair any such right, power or
remedy or be construed to be a waiver thereof or of any such ground for
termination or to be an acquiescence therein, nor will the acceptance by
818879 of any payment be deemed a waiver of any right to take advantage of
any future ground for termination or of any past ground for termination
not completely cured thereby.
Headings
13.8 The headings contained in this Agreement, do not constitute a part of this
Agreement, and may not be employed in interpreting this Agreement.
Cooperation
13.9 Each party agrees, without further consideration, to cooperate and
diligently perform any further acts, deeds and things, and to execute and
deliver any documents that may be reasonably
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necessary or otherwise reasonably required to consummate, evidence,
confirm and/or carry out the intent and provisions of this Agreement, all
without undue delay or expense.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the reference date appearing on the first page.
Executed by 818879 ALBERTA LTD. in Executed by CLEAN ENERGY
the presence of: TECHNOLOGY XXX.xx:
S/R. Xxxx Xxxxxxx S/Xxxx Xxxxx
-------------------------------- ------------------------------
Authorized Signatory Authorized Signatory
S/Xxxxx Xxxxxxx
------------------------------
Authorized Signatory
Dated for Reference March 5, 1999
-------------------------------------------------------
BETWEEN:
818879 ALBERTA LTD.
AND:
CLEAN ENERGY TECHNOLOGIES INC.
-------------------------------------------------------
PBC TECHNOLOGY LICENSE
&
PBC TECHNOLOGY OPTION
-------------------------------------------------------
SCHEDULE "A"
PBC TECHNOLOGY PATENTS
SERIAL PATENT DATE OF
DESCRIPTION JURISDICTION NUMBER NUMBER ISSUE
Fluid Heater using
Pulsating Combustion Blade Xxxxxx Xxxxxx 0000000 4,846,149 July 11, 1989
Pulsating Combustor Cylinder (United States 07/829,058 5,242,294 September 7, 0000
(
(Xxxxxx Xxxxxx (CIP) 115,635 5,403,180 April 4, 1995
(
(Europe (U.K.) 91910669 486,643 August 23, 0000
Xxxxxxxx Xxxxxxxxx Xxxxxx Xxxxxx 60/098,540 Provisional, filed 8/31/98
SCHEDULE "B"
CONFIDENTIALITY AGREEMENT
This Agreement dated for reference __________________________________________
BETWEEN:
CLEAN ENERGY TECHNOLOGY INC., a Delaware, U.S.A,
corporation having its head office at 0000 XxxXxxxxxx Xxxxxx,
Xxxxxxx, X.X. X0X 0X0, Xxxxxx
("CETI")
OF THE FIRST PART
AND:
----------------------------------------------------
("the Recipient")
OF THE SECOND PART
WHEREAS:
A. CETI is in possession of certain confidential information relating to a new
technology and has the exclusive license to pursue certain licensed
activities utilizing such confidential information.
B. CETI is about to enter into a [sublicense/employment/consulting] agreement
(the "Agreement") with the Recipient; and to enable the Recipient to
properly carry out the terms of the Agreement, it will be necessary for
CETI to disclose some or all of such confidential information to the
Recipient;
C. The parties have agreed to enter into this Confidentiality Agreement to
ensure that any such confidential information which is discovered by,
disclosed to, or otherwise made available to the Recipient by CETI or by
any of its agents or employees during the term of the Agreement will be
used by the Recipient only for the purposes of the Agreement and will at
all times be protected by the Recipient in accordance with the terms and
conditions of this Confidentiality Agreement.
NOW THEREFORE in consideration of the payment to the Recipient of $1.00, the
Agreement, and other good and valuable consideration given by CETI to the
Recipient, the Recipient covenants and agrees with CETI as follows:
1. The term "Confidential Information" as used in this Confidentiality
Agreement means: all trade secrets, know-how, proprietary knowledge,
technology, improvements and other information of every nature and kind
whatsoever, relating in any way to the technology, whether disclosed to the
Recipient or discovered by the Recipient as a consequence of or through the
Agreement, including information conceived, originated discovered or
developed CETI which is not at the time in question lawfully in the public
-21-
domain. The term "Confidential Information" also includes all trade
secrets and all discoveries, concepts and ideas, whether patentable or not,
relating to any present or prospective activities CETI, and any information
relating to the administration, financing, personnel or business of CETI,
or any other information which the Recipient becomes acquainted with or
responsible for as a result of or in consequence of CETI the Agreement or
of disclosing information to the Recipient, or of any other ongoing
association between CETI and the Recipient.
2. All Confidential Information discovered by, disclosed to, or otherwise made
available to the Recipient pursuant to the Agreement or otherwise will be
maintained in secrecy by the Recipient, using the same safeguards as are
customarily used to protect commercially confidential information of a
similar character, but at least using reasonable care, and, except for the
purposes of the Agreement, the Recipient will not use, in any manner, or
disclose to any third party, the Confidential Information, without the
prior written consent of CETI.
3. The Recipient acknowledges that the Confidential Information is the
property of CETI, and the Recipient will not assert any rights under any
inventions, discoveries, concepts, ideas, improvements, know-how, or
related know-how disclosed by CETI, as having been made or acquired by the
Recipient before being associated with CETI or since then and not otherwise
covered by the terms of this Confidentiality Agreement.
4. Nothing in this Confidentiality Agreement will be construed as granting to
the Recipient either expressly, or by implication, estoppel or otherwise,
any licence or right to use the Confidential Information or any other
proprietary information of any kind received from CETI (except the limited
right to use such information for the purposes of the Agreement).
5. All information furnished by CETI pursuant to the Agreement, including
records, notebooks, designs, specifications, prototypes, and electronic
data storage media will be returned by the Recipient on demand and the
Recipient will thereupon certify to CETI that the Recipient has destroyed
all copies and excerpts therefrom.
6. If it is necessary and expressly authorized under the terms of the
Agreement for the Recipient to give access to any Confidential Information
to any other person, the Recipient will restrict such access to those
persons needing to have such information for the purposes of the Agreement,
and will inform and instruct such persons as to the restrictions applicable
to such information, and specifically, as to the terms of this
Confidentiality Agreement.
7. This Confidentiality Agreement must be signed by the Recipient before or
concurrently with the Agreement, and will be effective immediately upon
being signed. It applies to all Confidential Information disclosed by CETI
or discovered by the Recipient as a consequence of the Agreement. When the
Agreement is completed or is otherwise earlier terminated by either of the
parties for any reason, the provisions of this Confidentiality Agreement
will survive the Agreement.
8. The Recipient recognizes that CETI has expended substantial funds and
effort in the development of the Confidential Information, and agrees not
to engage in competition with CETI using any Confidential Information
obtained during the term of the Agreement.
-22-
9. The Recipient hereby acknowledges to and covenants and agrees with CETI
that a breach by the Recipient of any covenants under this Confidentiality
Agreement may result in damages to CETI, and that a monetary award would
not adequately compensate for such damages. Accordingly, the Recipient
hereby agrees with CETI that in the event of any such breach, in addition
to all other remedies available at law or in equity, CETI will be entitled
as a matter of right to apply to court of competent jurisdiction for
equitable relief by way of restraining order, injunction, decree or
otherwise as may be appropriate to ensure compliance by the Recipient with
the provisions of this Confidentiality Agreement.
10. This Confidentiality Agreement will be governed by and construed in
accordance with the laws of the Province of British Columbia, Canada.
11. The obligations of each of the parties under this Confidentiality Agreement
are to be binding upon their successors, associates, affiliates, and
subsidiaries.
12. The benefits under this Confidentiality Agreement will accrue to and enure
to the benefit of the successors, affiliates and permitted assigns of the
parties.
13. All references to the Recipient, or to CETI will include all subsidiaries,
employees, consultants, agents, directors, and officers of them.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the
dates appearing below.
Executed by CLEAN ENERGY )
TECHNOLOGY INC. in the presence of: )
) _______________________________
) Date:__________________________
____________________________________ )
Authorized Signatory )
)
) _______________________________
____________________________________ ) Date:__________________________
Authorized Signatory )
Executed by the Recipient in the
presence of: )
)
) _______________________________
) Date:__________________________
____________________________________ )
Authorized Signatory )
)
) _______________________________
____________________________________ ) Date:__________________________
Authorized Signatory )
