Exhibit 10.6
COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT (the "Agreement") is made and entered into
between: Neah Power Systems, Inc., with its principal place of business at 00000
00xx Xxx XX, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000 ("Neah") and Novellus Systems,
Inc. with its principal place of business at 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx,
XX 00000 ("Novellus"), effective as of April 1, 2004 ("Effective Date").
RECITALS
Neah is in the business of developing silicon-based fuel cell
technology. Novellus is a provider of advanced deposition and surface
preparation systems for the semiconductor industry. Neah desires to collaborate
with Novellus to develop technology related to the application of catalyst and
conductive films to silicon to be used as a fuel cell electrode, and Novellus is
willing to enter into such collaboration on the terms set forth in this
Agreement.
NOW, THEREFORE, for valuable consideration, receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1.0 DEFINITIONS.
1.1 "BACKGROUND IP" shall mean all inventions, discoveries, works
of authorship, designs, ideas, and technology Developed prior to or
outside the course of performance of the Project.
1.2 "COMPONENTS" shall mean porous silicon (a) to which catalyst
and conductive films have been applied, and (b) that are designed,
developed or manufactured using any Project IP.
1.3 "COMPONENT EQUIPMENT" shall mean equipment that (a) is
designed, developed or manufactured using any Project IP, and (b) is
specifically designed to manufacture Components.
1.4 "COMPONENT EQUIPMENT PROCESSES" shall mean all unit processes
performed by Component Equipment.
1.5 "DEVELOPED" shall mean, (a) conceived, with respect to
inventions and discoveries, (b) fixed in a tangible medium of
expression, with respect to works of authorship, and (c) created with
respect to other designs, ideas, and technology.
1.6 "FUEL CELL FIELD OF USE" shall mean the design, development,
manufacturing, sale and other distribution of Components used as fuel
cell electrodes, but not the design, development, manufacturing, sale
or other distribution of Component Equipment or the use or exploitation
of Component Equipment Processes.
1.7 "INTELLECTUAL PROPERTY RIGHTS" shall mean all copyrights,
copyright applications, patents, patent applications, trade secrets,
trademarks, moral rights,
author's rights, and all other intellectual and proprietary rights of
any kind, as may now or hereafter come into existence, and all renewals
and extensions thereof, regardless of whether such rights arise under
the laws of the United States, or any other state, country or
jurisdiction.
1.8 "JOINTLY DEVELOPED IP" shall mean all Project IP which is
Developed jointly by Neah and Novellus in connection with the
activities contemplated by this Agreement.
1.9 "NEAH PROJECT IP" shall mean all Project IP which is Developed
by Neah in connection with the Project independently of Novellus.
1.10 "NOVELLUS PROJECT IP" shall mean all Project IP which is
Developed by Novellus in connection with the Project independently of
Neah.
1.11 "PROJECT" shall mean the joint development of technology
related to Components, Component Equipment and Component Equipment
Processes pursuant to this Agreement in accordance with the Project
Plan, and commencing on the Effective Date.
1.12 "PROJECT IP" shall mean all inventions, discoveries, works of
authorship, designs, ideas, and technology Developed by either party,
jointly or independently, in the course of performance of the Project,
and shall not include any Background IP.
1.13 "PROJECT PLAN" shall mean the detailed plan for the Project, a
draft of which is set forth on EXHIBIT A and shall be finalized by
mutual agreement of the parties prior to June 1, 2004, as may be
amended by mutual written agreement of the parties from time to time.
2.0 THE PROJECT.
2.1 COLLABORATION. The parties agree to collaborate to complete
the Project in accordance with this Agreement and the Project Plan. The
parties agree, prior to June 1, 2004, to mutually identify each party's
obligations under the Project Plan.
2.2 NOVELLUS PERSONNEL. During the term of the Project, Novellus
shall provide Neah with the services of Novellus technical personnel,
to be mutually agreed upon and listed in EXHIBIT B (the "Novellus
Personnel"), on a full time or part time basis, to be mutually agreed
upon and specified on EXHIBIT B. Novellus reserves the right to change
the Novellus Personnel in its reasonable discretion, and shall consult
with Neah prior to such change if such consultation is reasonably
practicable.
2.2.1 Some of the Novellus Personnel, to be mutually agreed
upon and specified on EXHIBIT B, may relocate to Neah's
Seattle, Washington facility during the Project Term to
perform work on the Project. Neah shall reimburse Novellus in
a lump-sum amount to be mutually agreed upon in accordance
with Novellus' standard relocation policies and specified on
Exhibit B for the reasonable relocation costs for such
Novellus Personnel.
2.2.2 Neah shall reimburse Novellus for (a) the gross
amount of all salaries and wages, benefit costs and other
compensation associated with the Novellus Personnel with
respect to the time period of their work on the Project, in an
amount to be mutually agreed upon and specified on EXHIBIT B,
and (b) for costs approved in advance by Neah, in accordance
with rates and procedures to be mutually agreed upon and
specified on EXHIBIT B. Novellus shall invoice Neah for such
costs on a monthly basis.
2.2.3 All Novellus Personnel shall at all times remain the
employees of Novellus. Neah shall have no responsibility for
withholding of taxes or other matters which are customarily
the responsibility of an employer. All Novellus Personnel
shall comply with reasonable workplace rules and procedures
established by Neah.
2.2.4 Neah shall indemnify, defend and hold harmless
Novellus and its officers, directors, employees, shareholders
and agents (each an "Indemnified Party"), from and against any
and all claims, demands, liabilities, costs, damages, expenses
(including attorneys' fees and expenses), and causes of action
of any nature whatsoever (collectively, "Losses") brought by
or on behalf of a member of the Novellus Personnel arising
from or in any way related to (a) workplace conditions at
Neah's Seattle, Washington facility, or (b) the actions or
omissions of any Neah employee or contractor, except for
Losses arising from or in any way related to the gross
negligence or willful misconduct of the Novellus Personnel.
Losses may include, but are not limited to, claims related to
personal injury or alleged emotional distress, damage to
personal property, or employment practices.
2.2.5 Neah shall provide a suitable and safe work environment
for the Novellus Personnel during the time period of their
work on the Project, and the Novellus Personnel shall not be
required to sign Neah's nondisclosure or invention assignment
agreement, or a waiver or release in connection with their
work on the Project. Novellus and each of the Novellus
Personnel shall have executed Novellus' standard proprietary
information and inventions agreement prior to the time period
of his or her work on the Project.
2.3 NEAH PERSONNEL. During the term of the Project, Neah shall
dedicate a sufficient number of technical personnel to diligently
perform its obligations under the Project Plan. Neah shall provide the
Novellus Personnel with access to qualified Neah technical personnel
and shall otherwise provide reasonable technical support to the
Novellus Personnel in connection with the Project.
2.4 EXCLUSIVITY. During the Project term, neither Novellus nor
Neah shall enter into any discussions or agreements with any third
parties with respect to the application of catalyst and conductive
films to silicon to be used as a fuel cell electrode. Except for the
foregoing restriction, nothing herein shall be deemed to restrict, in
any way, the freedom of either party to conduct any business or
activity whatsoever without any accountability to the other party.
2.5 EQUIPMENT. Novellus shall loan Neah equipment to be reasonably
determined by Novellus and described on EXHIBIT C, together with such
other equipment as may be agreed upon in writing by the parties (the
"Equipment") for use during the Project term, at no cost to Neah. The
Equipment (a) shall be delivered to Neah's Seattle, Washington facility
at Neah's cost, (b) shall not be moved or transferred from such
facility without Novellus' prior written consent, and (c) shall be
returned by Neah to Novellus upon termination of this Agreement at
Neah's expense and in the same condition as received, normal wear
excepted. While the Equipment is in Neah's possession, Neah shall be
responsible for all necessary maintenance of the Equipment as specified
by Novellus to Neah, shall bear all risk of loss or damage to the
Equipment, and shall maintain physical damage insurance covering the
Equipment on an "all risks" of physical loss or damage basis, for the
full replacement cost (subject to reasonable deductible amounts). Such
insurance policy will (i) be in form and content reasonably acceptable
to Novellus, (ii) provide that such insurance will not be canceled or
coverage changed unless thirty (30) days' prior written notice has been
given to Novellus, and (iii) will name Novellus as an additional
insured. Neah will deliver such policy or certificate thereof to
Novellus on or before five (5) days prior to delivery of Equipment by
Novellus to Neah.
2.6 WARRANT. Upon execution of this Agreement, Neah shall grant
Novellus a warrant to purchase one million shares of the common stock
of Neah at an exercise price of twenty-five cents ($0.25) per share in
accordance with the terms set forth on EXHIBIT D attached hereto. The
Warrant shall vest upon completion of the milestones as provided in
EXHIBIT D.
2.7 INDEPENDENT RELATIONSHIP. The parties shall at all times act
as independent contractors and nothing contained in this Agreement
shall be deemed to constitute either party as the partner, agent, or
legal representative of the other party, or to create any fiduciary
relationship between them for any purpose whatsoever. Neither party
hereto shall have any authority to act for or to assume any obligation
or responsibility on behalf of the other party, except as may be
expressly authorized in writing by the other party.
3.0 SUPPLY OF COMPONENTS AND COMPONENT EQUIPMENT. It is the intent of the
parties that Neah and Novellus shall enter into an agreement pursuant
to which Novellus shall manufacture Components, and Neah hereby grants
Novellus a right of first negotiation with respect to the manufacture
of Components.
3.1 COMPONENTS: RIGHT OF FIRST NEGOTIATION. Prior to commencing
negotiations with any third party with respect to the manufacture of
Components, Neah shall notify Novellus and the parties shall enter into
discussions, in good faith, with respect to terms pursuant to which
Novellus shall have, for a period of five years (subject to renewal on
mutually acceptable terms), (a) the exclusive right to manufacture
Components for use by or sale to Neah, (b) the exclusive right to sell
such Components to Neah, and (c) an exclusive license under all of
Neah's Intellectual Property Rights necessary for such manufacture and
sale. If the parties have been unable to enter into an agreement with
respect to the manufacture of Components by Novellus within thirty (30)
days following the date of the notice from Neah, the parties shall
enter
into non-binding mediation as provided in Section 11.4.1 below in an
attempt to agree upon the terms of such an agreement. If the parties
continue to be unable to reach agreement within sixty (60) days
following the commencement of the mediation, Neah may negotiate with
third parties with respect to the manufacture of Components used as
fuel cell electrodes, but shall not enter into an agreement with any
such third party unless (i) each material term of such agreement is no
more favorable to such third party than the term offered by Neah to
Novellus during the negotiations pursuant to this Section 3.1, and (ii)
the terms of such agreement (and any related or side agreements), taken
as a whole, are no more favorable to such third party than the terms,
taken as a whole, offered by Neah to Novellus during the negotiations
pursuant to this Section 3.1. If the terms of a proposed agreement with
a third party do not meet the conditions of (i) and (ii) above, then
Neah must notify Novellus of the terms of the proposed agreement and
must repeat the procedures set forth in this Section 3.1 with Novellus
with respect to such terms. At Novellus' request, Neah shall provide a
copy of all agreements with respect to the manufacture of Components
used as fuel cell electrodes (and any related or side agreements) to an
independent party selected by Novellus and under a duty not to disclose
the terms of such agreements (or any related or side agreements) for
the purposes of confirming to Novellus whether such agreements meet the
conditions of (i) and (ii) above.
3.2 TECHNICAL INFORMATION. In the event that, pursuant to Section
3.1, Neah enters into an agreement with a third party with respect to
the manufacture of Components used as fuel cell electrodes, Novellus
shall, at Neah's expense, provide reasonable cooperation to Neah and
such third party to provide Neah and such third party with technical
information solely related to Project IP necessary to manufacture
Components used as fuel cell electrodes, but not technical information
related to Project IP that can be used to manufacture Component
Equipment or to use or exploit Component Equipment Processes. For
purposes of clarification, no license, express or implied, is granted
by Novellus to Neah or such third party under any Intellectual Property
Rights to Novellus Background IP or under Novellus' rights pursuant to
Section 5.6.
3.3 COMPONENT EQUIPMENT.
3.3.1 Novellus agrees not to sell Component Equipment if
Novellus knows (with no duty to investigate) that such sale
would constitute contributory infringement by Novellus of
Neah's rights under patents to the Project IP in the Fuel Cell
Field of Use ("Contributory Infringement"). If Novellus has
sold Component Equipment to a third party and Neah believes
that such sale would constitute Contributory Infringement, the
parties shall enter into non-binding mediation and binding
arbitration as provided in Section 11.4 below to determine
whether such sale constituted Contributory Infringement.
3.3.2 In the event Novellus provides notice to Neah that it
has decided not to use and commercialize the Project IP for
the design, development, manufacturing, sale and other
distribution of Component Equipment, Novellus shall negotiate
the grant of a royalty-free, non-exclusive license to Neah to
use and commercialize the Project IP for the design,
development, manufacturing, sale and other distribution of
Component Equipment, and the use or exploitation of Component
Equipment Processes.
3.3.3 Neah and any third party designee who will
manufacture Components on Neah's behalf (each, a "Purchaser")
agree to purchase Component Equipment only from Novellus,
subject to the procedures set forth in this Section 3.3.3. A
third party designee shall not purchase Component Equipment
unless authorized to manufacture Components used as fuel cell
electrodes in accordance with the right of first negotiation
granted to Novellus in Section 3.1 above. In the event that a
Purchaser desires to purchase Component Equipment following
completion of the Project, Neah shall notify Novellus and the
parties shall negotiate the sale of Component Equipment to
such Purchaser. If the parties have been unable to enter into
an agreement with respect to such sale within thirty (30) days
following the date of the notice from Neah, the parties shall
enter into non-binding mediation as provided in Section 11.4.1
in an attempt to agree upon the terms of such an agreement. If
the parties continue to be unable to reach agreement within
sixty (60) days following the commencement of the mediation,
the parties shall enter into binding arbitration as provided
in Section 11.4.2 below to establish terms that would be
commercially reasonable for such sale. At such time, Novellus
shall, at its option, either (a) agree to sell such Component
Equipment to the Purchaser on the commercially reasonable
terms established through arbitration, in which case Purchaser
shall be obligated to purchase such Component Equipment on
such terms, or (b) grant a royalty-free, non-exclusive,
non-transferable, and non-sublicenseable license to the
Purchaser to use and commercialize the Project IP for the
design, development, manufacturing, sale and other
distribution of Component Equipment, and the use or
exploitation of Component Equipment Processes.
3.4 TECHNICAL INFORMATION. In the event that, pursuant to
Section 3.3.2 or 3.3.3, Novellus grants a license to use and
commercialize the Project IP for the design, development,
manufacturing, sale and other distribution of Component
Equipment, and the use or exploitation of Component Equipment
Processes, Novellus shall, at Neah's expense, provide
reasonable cooperation to Neah to provide Neah with technical
information solely related to Project IP necessary to
manufacture Component Equipment or to use or exploit Component
Equipment Processes. For purposes of clarification, no
license, express or implied, is granted by Novellus to Neah or
such third party under any Intellectual Property Rights to
Novellus Background IP.
4.0 CONFIDENTIALITY.
4.1 "PROJECT CONFIDENTIAL INFORMATION" shall mean any and all
information and materials (whether in writing, or in oral, graphic,
electronic or any other form) developed by either party, jointly or
independently, in the course of performance of the Project, and that
derives independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain
economic value from its disclosure or use.
4.2 OBLIGATIONS REGARDING PROJECT CONFIDENTIAL INFORMATION. Each
party agrees that it shall protect the confidentiality of Project
Confidential Information with at least the same degree of care as it
uses to protect its own confidential information (but in no event less
than reasonable care). Each party agrees not to use Project
Confidential Information for any purpose other than (a) its performance
of the Project, (b) as reasonably necessary to register, confirm or
perfect the Project IP as mutually agreed upon by the parties pursuant
to Section 5.8, (c) as reasonably necessary to exercise such party's
rights to commercialize Project IP under Section 5.5 or 5.6,
respectively, (d) as reasonably necessary to enforce such party's
rights to Intellectual Property Rights in the Project IP in accordance
with Section 5.12, and (e) as reasonably necessary to defend itself in
accordance with Section 5.13. Each party shall not disclose Project
Confidential Information to any person or entity other than (i) to its
officers, employees and consultants that need access to such Project
Confidential Information in order to effect the intent of this
Agreement and who agree to be bound by the terms of this Section 4 or a
similar written agreement, (ii) as reasonably necessary to register,
confirm or perfect the Project IP as mutually agreed upon by the
parties pursuant to Section 5.8, (iii) as reasonably necessary to
exercise such party's rights to commercialize Project IP under Section
5.5 or 5.6, respectively; provided that such disclosure is subject to
confidentiality obligations similar to the terms of this Section 4,
(iv) as reasonably necessary to enforce such party's rights to
Intellectual Property Rights in the Project IP in accordance with
Section 5.12, and (v) as reasonably necessary to defend itself in
accordance with Section 5.13.
4.3 "BACKGROUND CONFIDENTIAL INFORMATION" shall mean any and all
information and materials (whether in writing, or in oral, graphic,
electronic or any other form), other than Project Confidential
Information, disclosed by one party to the other party that is marked
as confidential or that from its nature should reasonably be considered
to be confidential.
4.4 OBLIGATIONS REGARDING BACKGROUND CONFIDENTIAL INFORMATION.
Each party agrees that it shall protect the confidentiality of the
other party's Background Confidential Information with at least the
same degree of care as it uses to protect its own confidential
information (but in no event less than reasonable care). Each party
agrees not to use the other party's Background Confidential Information
for any purpose other than its performance of the Project. Each party
shall not disclose the other party's Background Confidential
Information to any person or entity other than its officers, employees
and consultants that need access to such Confidential Information in
order to effect the intent of this Agreement and who agree to be bound
by the terms of this Section 4 or a similar written agreement.
4.5 UNAUTHORIZED USE OR DISCLOSURE. Each party shall immediately
give notice to the other party of any unauthorized use or disclosure of
Project Confidential Information or the other party's Background
Confidential Information, and agrees to assist the other party to
remedy such unauthorized use or disclosure.
4.6 SURVIVAL. The obligations set forth in this Section 4 shall
survive for a period of five (5) years following the termination of
this Agreement.
4.7 EXCEPTIONS. Notwithstanding the foregoing, the parties agree
that (a) all information and materials which are or become available to
the general public other than through breach of this Agreement, and (b)
a party's Background Confidential Information which (i) is rightfully
in the recipient's possession prior to disclosure by such party, as
evidenced by the recipient's contemporaneous written records, (ii) is
disclosed to the recipient by a third party without breach of any
confidentiality obligation, or (iii) is independently developed by the
recipient without use of the other party's Background Confidential
Information, as evidenced by the recipient's contemporaneous written
records, shall not be subject to the restrictions set forth in this
Section 4.
5.0 INTELLECTUAL PROPERTY RIGHTS
5.1 OWNERSHIP OF BACKGROUND IP. All right, title and interest
(including Intellectual Property Rights) to Background IP of a party
shall remain the property of such party and no licenses or other rights
with respect to such Background IP are granted to the other party. Upon
Neah's request, Novellus shall use commercially reasonable efforts to
identify and provide notice to Neah of all patents owned by Novellus
(excluding patents to Project IP) that may be infringed upon by
Background IP incorporated by Novellus into Components. Upon Novellus'
request, Neah shall use commercially reasonable efforts to identify and
provide notice to Novellus of all patents owned by Neah (excluding
patents to Project IP) that may be infringed upon by Background IP
incorporated by Neah into Component Equipment or Component Equipment
Processes.
5.2 OWNERSHIP OF INDEPENDENTLY DEVELOPED PROJECT IP. Subject only
to the express license granted in Section 5.5, all right, title and
interest (including Intellectual Property Rights) to Novellus Project
IP shall be owned solely and exclusively by Novellus. Subject only to
the express license granted in Section 5.6, all right, title and
interest (including Intellectual Property Rights) to Neah Project IP
shall be owned solely and exclusively by Neah.
5.3 OWNERSHIP OF JOINTLY DEVELOPED IP. Subject only to the express
licenses granted in Sections 5.5 and 5.6, all right, title and interest
(including Intellectual Property Rights) to Jointly Developed IP shall
be owned jointly by the parties. Each party shall have an equal,
undivided, joint ownership interest in all right, title and interest
(including Intellectual Property Rights) in and to such Jointly
Developed IP immediately upon its creation. Neah hereby assigns to
Novellus and Novellus hereby assigns to Neah an equal, undivided, joint
ownership interest in Jointly Developed IP so that Neah and Novellus,
respectively, each has an equal, undivided, joint ownership interest in
the Jointly Developed IP.
5.4 USE OF JOINTLY DEVELOPED IP. Subject to the terms of Sections
5.5 and 5.6, each party shall have the right to use, make, have made,
sell, import and
otherwise exploit the Jointly Developed IP, and hereby consents to any
licenses granted by the other party to third parties to use, make, have
made, sell, import and otherwise exploit the Jointly Developed IP.
Neither party shall have a "duty to account" or share profits from the
Jointly Developed IP with the other party.
5.5 EXCLUSIVE RIGHT TO COMMERCIALIZE IN THE FUEL CELL FIELD OF
USE. Notwithstanding the other terms of this Agreement, Neah shall have
the exclusive right to use and commercialize the Project IP in the Fuel
Cell Field of Use, except that Novellus shall have the right to use and
commercialize the Project IP in connection with the supply of
Components by Novellus to Neah. Novellus agrees that it shall not,
directly or indirectly, use or commercialize, or license third parties
to use or commercialize, the Project IP in the Fuel Cell Field of Use,
except in connection with the supply of Components to Neah. Novellus
hereby grants Neah an exclusive, perpetual, transferable,
sublicensable, worldwide, irrevocable, royalty-free license to use,
make, have made, sell, offer to sell and import goods and services
under the Intellectual Property Rights to the Novellus Project IP and
the Jointly Developed IP, solely in the Fuel Cell Field of Use.
5.6 EXCLUSIVE RIGHT TO COMMERCIALIZE OUTSIDE THE FUEL CELL FIELD
OF USE. Notwithstanding the other terms of this Agreement, Novellus
shall have the exclusive right to use and commercialize the Project IP
outside the Fuel Cell Field of Use. Neah agrees that it shall not,
directly or indirectly, use or commercialize, or license third parties
to use or commercialize, the Project IP outside the Fuel Cell Field of
Use. Neah hereby grants Novellus an exclusive, perpetual, transferable,
sublicensable, worldwide, irrevocable, royalty-free license to use,
make, have made, sell, offer to sell and import goods and services
under the Intellectual Property Rights to the Neah Project IP and the
Jointly Developed IP, solely outside the Fuel Cell Field of Use.
5.7 BACKGROUND IP. The licenses referred to in Sections 5.5 and
5.6 above shall not include any rights in any Background IP. Novellus
agrees to negotiate the grant of a non-exclusive license to Neah on
commercially reasonable terms under Novellus' Background IP as
necessary for Neah to use and commercialize the Project IP in the Fuel
Cell Field of Use. Neah agrees to negotiate the grant of a
non-exclusive license to Novellus on commercially reasonable terms
under Neah's Background IP as necessary for Novellus to use and
commercialize the Project IP other than for the design, development,
manufacturing, sale or other distribution of Components used as fuel
cell electrodes or Component Equipment.
5.8 IDENTIFICATION OF PROJECT IP. The parties agree to meet at
least quarterly during the term of the Project to identify and discuss
Project IP. Upon the identification of any such Project IP, the parties
will discuss the necessary protection for the parties' rights in such
Project IP, including whether the parties should file for patent,
copyright, mask work, or trademark protection, the countries in which
such filings should be made, and whether such Project IP shall be
treated as trade secrets.
5.9 PATENTS ON JOINTLY DEVELOPED IP.
5.9.1 JOINT PATENTS. Each patent (including divisions,
reissues, renewals, continuations and
continuations-in-part) issuing from patent
applications for Jointly Developed IP (each, a "Joint
Patent") shall be owned jointly by the parties in
accordance with Section 5.3. The Joint Patents shall
be subject to the licenses granted in Sections 5.5
and 5.6.
5.9.2 PROCESS FOR PROPOSING PROSECUTION. Either party may
suggest the prosecution of a patent application for
Jointly Developed IP or any portion thereof in any
country. The proposing party ("Proposing Party")
shall describe the scope of the proposed patent
application and the countries in which it desires to
seek patent protection.
5.9.3 PROCESS FOR JOINING PROSECUTION. The other party
("Nonproposing Party") shall have sixty (60) days to
give notice of its desire to join in the prosecution
of such patent application in all or some of the
countries in the notice. The Nonproposing Party may
propose additional countries in which it desires to
seek patent protection, in which case it will be
deemed the Proposing Party with respect to such
additional countries for the purposes of this Section
5.9.
5.9.4 EFFECT OF NOT JOINING PROSECUTION. If the
Nonproposing Party fails to respond within such sixty
(60) day period, the Proposing Party shall
exclusively control the prosecution of such patent
application. If the Nonproposing Party declines to
join in the prosecution of the patent application in
a particular country or countries, the Proposing
Party shall exclusively control the prosecution of
such patent application only in such country or
countries. The Nonproposing Party shall provide, at
the expense of the Proposing Party, information
reasonably necessary for the Proposing Party to
prosecute such patent application. The Proposing
Party shall be responsible for paying one hundred
percent (100%) of the costs and expenses for such
prosecution, and one hundred percent (100%) of the
fees related to the maintenance of the resulting
Joint Patent. The Nonproposing Party shall reimburse
the Proposing Party for fifty percent (50%) of the
prosecution costs and expenses and maintenance fees
related to the resulting Joint Patent, solely to the
extent the Non-Proposing Party receives royalties
from the license of such Joint Patent or an amount as
mutually agreed upon by the parties which would
approximate a reasonable royalty for the sale of
products which would otherwise infringe such Joint
Patent.
5.9.5 EFFECT OF JOINING PROSECUTION. If the Nonproposing
Party chooses to join in the prosecution of the
patent application in a particular country or
countries, the parties shall mutually control the
prosecution of such patent application in such
country or countries, and shall mutually select a
patent attorney for such prosecution. Each party
shall be responsible for paying fifty
percent (50%) of the prosecution costs and expenses
and maintenance fees related to the resulting Joint
Patent.
5.9.6 FAILURE TO PAY PROSECUTION COSTS AND EXPENSES, OR
MAINTENANCE FEES. If a party (the "Non-Paying Party")
fails to pay its share of the prosecution costs and
expenses or maintenance fees pursuant to Section
5.9.5 within thirty (30) days following receipt of a
notice of nonpayment from the other party (the
"Paying Party"), the Paying Party may give notice of
its intent to continue to prosecute the relevant
patent application or maintain the relevant Joint
Patent, and shall thereafter pay one hundred percent
(100%) of the costs and expenses for such
prosecution, and one hundred percent (100%) of the
fees related to the maintenance fees for such Joint
Patent. The Paying Party shall control the
prosecution of such patent application, and the
Non-Paying Party shall provide, at the expense of the
Paying Party, information reasonably necessary for
the Paying Party to prosecute such patent
application. The Non-Paying Party shall reimburse the
Paying Party for fifty percent (50%) of the
prosecution costs and expenses and maintenance fees
related to the Joint Patent, solely to the extent the
Non-Paying Party receives royalties from the license
of such Joint Patent or an amount as mutually agreed
upon by the parties which would approximate a
reasonable royalty for the sale of products which
would otherwise infringe such Joint Patent.
5.9.7 ABANDONMENT OF PATENT APPLICATION OR JOINT PATENT. If
a party (the "Abandoning Party") desires to abandon a
patent application for Jointly Developed IP or a
Joint Patent in a particular country or countries, it
shall give the other party (the "Non-Abandoning
Party") sixty (60) days prior written notice of its
intention to abandon such patent application or Joint
Patent. If the Non-Abandoning Party desires to
continue to prosecute such patent application or
maintain such Joint Patent, it shall give notice of
such intent to the Abandoning Party within such
period and shall thereafter pay one hundred percent
(100%) of the costs and expenses for such prosecution
and one hundred percent (100%) of the fees related to
the maintenance of such Joint patent. The
Non-Abandoning Party shall control the prosecution in
such country or countries, and the Abandoning Party
shall provide, at the expense of the Non-Abandoning
Party, information reasonably necessary for the
Non-Abandoning Party to prosecute such patent
application. The Abandoning Party shall reimburse the
Non-Abandoning Party for fifty percent (50%) of the
prosecution costs and expenses and maintenance fees
related to the Joint Patent, solely to the extent the
Abandoning Party receives royalties from the license
of such Joint Patent or an amount as mutually agreed
upon by the parties which would approximate a
reasonable royalty for the sale of products which
would otherwise infringe such Joint Patent.
5.10 PATENTS ON INDEPENDENTLY DEVELOPED PROJECT IP.
5.10.1 NON-JOINT PATENT. Each patent (including divisions,
reissues, renewals, continuations and
continuations-in-part) issuing from a patent
application for Neah Project IP or Novellus Project
IP (each, a "Non-Joint Patent") shall be owned solely
and exclusively by Neah or Novellus, respectively, in
accordance with Section 5.2. The Non-Joint Patents
shall be subject to the licenses granted in Sections
5.5 and 5.6.
5.10.2 PROCESS FOR PROPOSING PROSECUTION. In the event that
(a) Neah desires to prosecute a patent application
for Novellus Project IP which is licensed to it by
Novellus pursuant to Section 5.5, or (b) Novellus
desires to prosecute a patent application for Neah
Project IP which is licensed to it by Neah pursuant
to Section 5.6, such party (the "Requesting Party")
shall notify the other party (the "Responding
Party").
5.10.3 OPTION TO PROSECUTE. The Responding Party shall have
the sole right to initiate the prosecution of the
patent application within ninety days following
receipt of the notice from the Requesting Party. If
the Responding Party initiates the prosecution of the
patent application within such time, the Responding
Party shall exclusively control the prosecution of
such patent application and the Requesting Party
shall reimburse the Responding Party for one hundred
percent (100%) of the reasonable costs and expenses
for such prosecution.
5.10.4 FAILURE TO INITIATE PROSECUTION. If the Responding
Party fails to initiate the prosecution of the patent
application within ninety (90) days following receipt
of the notice from the Requesting Party, the
Requesting Party may prosecute, at its own expense,
the patent application, and shall exclusively control
such prosecution. In such event, the Responding Party
shall execute such documents and take such other
action in connection therewith as may be reasonably
requested by the Requesting Party, at the Requesting
Party's expense.
5.10.5 MAINTENANCE FEES. The Requesting Party shall be
responsible for paying one hundred percent (100%) of
the fees related to the maintenance of the Non-Joint
Patent.
5.11 COOPERATION.
5.11.1 JOINTLY DEVELOPED IP. Each party shall provide to the
other party copies of all documentation and other
information in support of any patent application or
other agreed upon registration process for Jointly
Developed IP.
5.12 INFRINGEMENT OF PROJECT IP.
5.12.1 NOTIFICATION OF INFRINGEMENT. If either party learns
of an infringement by a third party of Intellectual
Property Rights to the Project IP, such party shall
promptly notify the other party and
shall provide the other party with available evidence
of such infringement.
5.12.2 ENFORCEMENT BY THE PARTIES. Neah shall have the
exclusive right, at its expense, but not the
obligation, to bring and maintain any action in its
own name alleging that a third party has infringed or
misappropriated Intellectual Property Rights to
Project IP in the Fuel Cell Field of Use. Novellus
shall have the exclusive right, at its expense, but
not the obligation, to bring and maintain any action
in its own name alleging that a third party has
infringed or misappropriated Intellectual Property
Rights to Project IP outside the Fuel Cell Field of
Use. In no event shall the non-enforcing party be
obligated to join as a party in any such action,
whether or not the non-enforcing party is deemed an
indispensable party thereto, and the enforcing party
shall not seek to join the non-enforcing party. There
shall be no accounting to the other party in the
event of a favorable judgment or award in such
action. Neither party may settle any such dispute
without the consent of the other party, unless such
settlement would not adversely affect the rights of
the other party.
5.13 INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.
5.13.1 NOTIFICATION OF INFRINGEMENT. If either party learns
that the performance of the Project may infringe upon
the Intellectual Property Rights of a third party,
such party shall promptly notify the other party and
shall provide the other party with available evidence
of such potential infringement.
5.13.2 DEFENSE. In the event a third party brings an action
against either party alleging infringement of any
third party's Intellectual Property Rights arising
out of the commercial exploitation of Project IP, the
party against whom such action is brought (the
"Defending Party") shall defend such action at its
expense. In the event of such action, the parties
shall confer with each other, cooperate and provide
reasonable assistance to each other during the
defense of the action.
6.0 TERM AND TERMINATION.
6.1 TERM. This Agreement shall commence on the Effective Date and,
unless earlier terminated in accordance with Section 6.2 and 6.3, shall
continue until the earlier of (i) the completion of the Project, or
(ii) December 31, 2005. The term of this Agreement may be extended upon
mutual agreement of the parties.
6.2 TERMINATION FOR CAUSE. Either party may terminate this
Agreement by written notice if the other party materially breaches this
Agreement and does not cure such breach within thirty (30) days of
receipt of notice of such breach. Either party may also terminate this
Agreement by written notice to the other party in the event that the
other party (a) becomes or is insolvent; (b) makes an assignment for
the benefit of its creditors; (c) applies for or consents to the
appointment of a receiver, trustee or liquidator for substantially all
of its assets, or such a receiver, trustee or liquidator is appointed
for the other party; (d) files a voluntary petition or proceeding under
any statute of any state or country relating to insolvency or the
protection of the rights of creditors; or (e) has filed against it an
involuntary petition or proceeding under any statute of any state or
country relating to insolvency or the protection of the rights of
creditors that has not been dismissed within sixty (60) days thereof.
6.3 TERMINATION UPON ACQUISITION. Novellus may terminate this
Agreement if Neah undergoes a change of control, including, without
limitation, through the sale of all or substantially all of Neah's
assets, the sale of fifty percent (50%) of the outstanding voting
securities of Neah, or the reorganization, consolidation or merger of
Neah where the holders of Neah's securities before the transaction
beneficially own less than fifty percent (50%) of the outstanding
voting securities of the surviving entity after the transaction,
provided that the acquirer is (a) a competitor of Novellus, as
reasonably determined by Novellus, or (b) a semiconductor equipment
manufacturer.
6.4 EFFECTS OF TERMINATION. Termination of this Agreement by
either party shall not act as a waiver of any breach of this Agreement
and shall not release either party from any liability for breach of
such party's obligations under this Agreement. All other rights and
obligations of the parties shall terminate as of the termination or
expiration of this Agreement, except that each party's rights and
obligations pursuant to Sections 2.2.4, 2.5(c), 2.7, 3, 4, 5, 6.4, 9,
10, and 11 of this Agreement shall survive.
7.0 RELATIONSHIP MANAGER. Each party agrees to appoint, in writing, an
individual to coordinate activities under this Agreement and to act as the
primary point of contact for the other party (the "Relationship Manager"). The
Relationship Managers shall meet at least monthly to discuss the activities
conducted, and to be conducted, pursuant to this Agreement. The Relationship
Managers shall review the Project Plan at least once every ninety (90) days and
discuss amendments and updates thereto. Either party may change their designated
Relationship Manager upon written notice to the other. The initial Relationship
Managers are:
INITIAL RELATIONSHIP MANAGER FOR NEAH:
Name: Xxxxxx X. Xxxx
Address: 00000 00xx Xxx. XX
Xxxxx 000
Xxxxxxx, XX 00000
Phone: 000-000-0000 Ext. 108
Fax: 000-000-0000
Email: xxxxx@xxxxxxxxx.xxx
INITIAL RELATIONSHIP MANAGER FOR NOVELLUS:
(Name: Xxxx Xxxxxxx
Address: 0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxxx.xxxxxxx@xxxxxxxx.xxx
8.0 NO OTHER CONSIDERATION. Neither party shall have any monetary or other
obligations to the other arising out of or related to this Agreement except as
expressly provided for herein. Each party further acknowledges and agrees that
any and all costs, expenses or liabilities incurred by a party arising out of or
related to this Agreement shall be the responsibility of the party incurring
such cost, expense or liability, and neither party shall be liable or obligated
to pay any cost, expense or liability paid or incurred by the other.
9.0 DISCLAIMER OF WARRANTIES. NEITHER PARTY MAKES ANY WARRANTIES (WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE) RELATING TO THIS AGREEMENT, THE
PROJECT, ITS BACKGROUND IP, OR ITS BACKGROUND CONFIDENTIAL INFORMATION,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT, OR ANY WARRANTY THAT MAY ARISE OUT
OF COURSE OF PERFORMANCE, COURSE OF DEALING, OR USAGE IN TRADE.
10.0 LIMITATION OF LIABILITY. EXCEPT FOR THE OBLIGATIONS OF THE PARTIES
UNDER SECTION 4 ABOVE, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, OR FOR ANY
LOSS OF PROFITS, LOSS OF REVENUE, OR LOSS RESULTING FROM INTERRUPTION OF
BUSINESS, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROJECT,
REGARDLESS OF THE FORM OF ACTION OR IF THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. EACH PARTY ACKNOWLEDGES THAT THE OTHER PARTY HAS
ENTERED INTO THIS AGREEMENT IN RELIANCE UPON THE LIMITATIONS OF LIABILITY SET
FORTH HEREIN, AND THAT THE SAME FORM AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN
THE PARTIES, WITHOUT WHICH SUCH PARTY WOULD NOT HAVE ENTERED INTO THIS
AGREEMENT. EACH PARTY AGREES THAT THE LIMITATIONS OF LIABILITY SET FORTH HEREIN
WILL SURVIVE AND APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE.
11.0 GENERAL TERMS
11.1 NON-SOLICITATION. During the term of this Agreement and for a
period of one year following the termination of this Agreement, neither
party will directly or indirectly solicit, hire or attempt to hire any
of the other party's employees, or cause others to solicit, hire or
attempt to hire any such employees; provided, however, this obligation
shall not apply to or be breached by (a) advertising of open positions,
or other forms of soliciting employees or contractors that are general
in nature, or (b) responding to unsolicited inquiries about employment
or contract opportunities from any individual or agent.
11.2 ASSIGNMENT. Neither party shall assign, delegate or otherwise
transfer this Agreement or any of the rights and obligations under this
Agreement voluntarily, by operation of law, or otherwise, without the
other party's prior written consent, not to be unreasonably withheld,
provided, however, that either party may assign, delegate and otherwise
transfer all of its rights and obligations under this Agreement to a
successor in connection with a merger or sale of all or substantially
all of the party's business to which this Agreement relates. An
assignment without the requisite consent, if required, shall be void
and unenforceable. Subject to the foregoing, this Agreement will be
binding and inure to the benefit of the parties and their respective
successors and permitted assigns.
11.3 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without giving
effect to its provisions governing conflicts of law.
11.4 DISPUTES. All disputes arising under this Agreement shall be
resolved by non-binding mediation and binding arbitration in accordance
with the following terms.
11.4.1 Either party may commence an action by notifying the
other party and the American Arbitration Association
("AAA"). Unless the parties agree upon a mediator
within thirty (30) days following such notification,
AAA will promptly designate a mediator who is
independent, impartial and has relevant industry
experience, and AAA's decision about the identity of
the mediator will be final and binding. The parties
agree to conduct at least eight (8) consecutive hours
of non-binding mediated negotiations within 30 days
after the notice is sent. Each party shall bear its
own expenses for the mediation and they shall each
share equally in the expenses and fees of the
mediator.
11.4.2 If the dispute is not resolved by negotiation or
mediation within thirty (30) days after the first
notice to AAA is sent, then, upon notice by either
party to the other and to AAA, the controversy or
dispute will be submitted for binding arbitration in
accordance with AAA's Commercial Arbitration Rules.
The arbitrator may be selected by mutual agreement of
the parties. If the parties cannot mutually agree
upon an arbitrator within thirty (30) days of notice
of the controversy or dispute, then each party shall
select an arbitrator, and such arbitrators shall
select a third arbitrator. The arbitration shall be
held at a mutually agreeable location in the city of
San Francisco, California, and the United States
Arbitration Act will govern the arbitration, 9 U.S.C.
Sections 1-16 (or by the same principles enunciated
by such Act in the event it may not be technically
applicable). The parties agree that they will abide
by and perform any judgment rendered by the
arbitrator(s). The judgment of the arbitrator(s) will
be final and binding on the parties. Each party shall
bear its own expenses for the arbitration and they
shall each share equally in the expenses and fees of
the arbitrator(s). Notwithstanding the foregoing,
neither party shall be precluded from seeking
injunctive relief from a court of competent
jurisdiction pending the resolution of any dispute in
accordance with this Section 11.4.
11.5 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties and supersedes all prior or contemporaneous
agreements or representations, written or oral.
11.6 NOTICES. Any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given (a)
upon personal delivery to the party to be notified, (b) upon
confirmation of receipt by fax by the party to be notified, or (c) one
(1) business day after deposit with a reputable overnight courier,
prepaid for overnight delivery and addressed to the party to be
notified at the address indicated for such party in Section 7, or at
such other address as such party may designate by five (5) days advance
written notice to the other party given in the foregoing manner.
11.7 FURTHER ASSURANCES. The parties shall perform all such further
acts, provide such further documents or written assurances, and execute
such further documents as are reasonably required or necessary to carry
out the acts and transactions contemplated by this Agreement.
11.8 COUNTERPARTS. This Agreement may be executed by facsimile and in
counterparts, each of which shall be deemed an original and all of
which together shall constitute one instrument.
11.9 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
11.10 HEADINGS. The headings in this Agreement are for convenience
only, and shall not affect the interpretation of this Agreement.
11.11 BANKRUPTCY CODE. The licenses granted under this Agreement shall
be treated as a license of rights to "intellectual property" (as
defined in Section 101(35A) of Title II of the Unites States Code, as
amended (the "BANKRUPTCY CODE")) for purposes of Section 365(n) of the
Bankruptcy Code. The parties agree that the recipient of each license
may elect to retain and may fully exercise all of its rights and
elections under the Bankruptcy Code provided that such party abides by
the terms of this Agreement, including without limitation the terms of
all licenses granted by such recipient to the other party hereunder.
11.12 AMENDMENT; WAIVER. No modification, amendment or waiver of any
provision of this Agreement shall be effective except pursuant to a
writing signed by a duly authorized representative of each party. The
waiver by either party of a breach of or a default under any provision
of this Agreement shall not be construed as a waiver of any subsequent
breach of or default under the same or any other provision of this
Agreement, nor shall any delay or omission on the part of either party
to exercise or avail itself of any right or remedy that it has or may
have hereunder operate as a waiver of any right or remedy.
IN WITNESS WHEREOF, THE parties hereto have executed this Agreement as
of the Effective Date.
NEAH POWER SYSTEMS, INC. NOVELLUS SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx X. Royal
Name: Xxxxx Xxxxxxx Name: Xxxxx X. Royal
Title: President & CEO Title: Chief Financial Officer
Date: April 30, 2004 Date: April 28, 2004
LIST OF EXHIBITS
EXHIBIT A - PROJECT PLAN
EXHIBIT B - NOVELLUS PERSONNEL
EXHIBIT C - EQUIPMENT
EXHIBIT D - WARRANT
EXHIBIT A
NOVELLUS AND NEAH POWER TECHNOLOGY COLLABORATION
APRIL 29, 2004
COMPANY CONFIDENTIAL
OVERALL DESCRIPTION OF COLLABORATION ACTIVITIES
Neah is in the business of developing silicon-based fuel cell technology.
Novellus is a provider of advanced deposition and surface preparation systems
for the semiconductor industry. Neah and Novellus will collaborate to develop
technology related to the application of catalyst and conductive films to porous
silicon structures to be used as fuel cell electrodes.
Neah has developed the ability to produce limited quantities of porous silicon
that can be used as a catalyst support structure in a fuel cell electrode. Neah
will provide porous silicon material to Novellus for use in the development of
techniques to deposit conductive films and catalysts in the porous structures.
Joint work in deposition techniques will occur when appropriate. Both Neah and
Novellus will analyze and characterize the conductive films and catalyst
particles that have been deposited on the porous structures. Neah will also
conduct various electrochemical tests on the electrodes that are produced by
Novellus, including tests in a fuel cell. Both parties will perform their work
in a timely fashion and will share results with each other in order to modify
future deposition techniques to produce improved electrode performance in fuel
cells.
Both parties desire a long-term relationship that results in ongoing
improvements in the performance of Neah's silicon-based fuel cells.
PROPOSED "MILESTONES" FOR VESTING WARRANTS
CONDUCTIVITY STRUCTURES - 33.3%
OBJECTIVES
o Agreement on a resistance model for the electrode structure -
Neah/Novellus
o Develop long term reliability test system; e.g. perform repeated
thermal cycling in presence of chemistry
o Production of targeted structures on Neah provided samples - Novellus
o Experimental verification of resistance values where possible -
Neah/Novellus
o Experimental verification of impact on electrode performance - Neah
o Demonstrate wafer level capability of process.
DELIVERABLES
o X% (tbd) ohmic loss (X will be an achievable number based on modeling)
o Modeling plus sheet resistances for verification)
o Roadmap to $Y COO per wafer
o Demonstrate techniques over 4" wafer
April 29, 2004
2 Company Confidential
---------------------------------------------------------------------------------------------------------------------------------
DESIGN PRIORITY MARCH 2004 2ND HALF 2ND HALF MEASUREMENT
ELEMENTS (A= RESULTS 2004 GOAL 2005 GOAL TECHNIQUE
HIGHEST)
---------------------------------------------------------------------------------------------------------------------------------
Material A Ru Ru Ru
SIDEWALL Compatibility Masked metal Masked metal Reliability
CONDUCTOR testing to be
agreed upon. Will
include extended
exposure to fuel
cell chemistry
before and after
repetitive
stressing.
---------------------------------------------------------------------------------------------------------------------------------
Film thickness A 100 nm (Ru) TBD based on TBD SEM
down the pore modeling
---------------------------------------------------------------------------------------------------------------------------------
Film Adherence, C Excellent (Ru) XXX XXX Investigate
pore wall micro-scratch
test.
Perform before
and after repetitive
stressing.
---------------------------------------------------------------------------------------------------------------------------------
FRONT Material A 100 micron Ru Gold Gold
ELECTRODE compatibility Masked metal Masked metal
---------------------------------------------------------------------------------------------------------------------------------
Sheet resistance A TBD by modeling TBD by modeling 4 point probe
---------------------------------------------------------------------------------------------------------------------------------
Reliability B Good >3 years >3 years Accelerated
reliability test
TBD.
---------------------------------------------------------------------------------------------------------------------------------
Overhang B <10% of pore <10% of pore SEM
(reduction in opening opening
pore radius due
to electrode
layer)
---------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------
COMMENTS
-------------------------------------------------------------
Compatibility with chemical systems
SIDEWALL will be checked with literature and
CONDUCTOR chemical analysis results.
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
FRONT Decision on solution to be based on
ELECTRODE cost and reliability considerations.
In view of the need to expose metal
and make contact at edges, inert
metal may be needed.
-------------------------------------------------------------
-------------------------------------------------------------
No degradation or delamination
following reliability test.
-------------------------------------------------------------
Importance of this issue depends on
technique used to deposit catalyst layer
-------------------------------------------------------------
April 29, 2004
3 Company Confidential
CATALYST STRUCTURES
PHASE I - 33.3%
OBJECTIVES
o Control/optimization of existing electrodeposition methods. -
Neah/Novellus
o See targets document for specific attributes and measuring
techniques.
o Identification, development and validation of alternative methods that
may provide more control and/or higher performance under same metrics
as above.
DELIVERABLES
o Repeatability
o Activity SD < 30% of mean
o Performance
o (mean +2*SD) same for new process as old process
|_| No reduction in best performance
|_| Increase in number of high binned parts
PHASE II - 33.3%
OBJECTIVES
o Identification, development and validation of processes for advanced
catalyst structures.
o Anticipated to be the production of high surface area
support structures on which catalyst particles are
deposited. Critical metrics are same as Phase I plus
catalyst loading metrics.
DELIVERABLES
o Successful feasibility exit for supported catalyst concept
o Activity corresponding to goals for stage (100mw/cm2)
o Demonstrated for electrodes, not the integrated fuel cell
o Roadmap to performance 2X (stage 2)
April 29, 2004
4 Company Confidential
---------------------------------------------------------------------------------------------------------------------------------
DESIGN PRIORITY MARCH 2004 2ND HALF 2ND HALF MEASUREMENT
ELEMENTS (A= RESULTS 2004 GOAL 2005 GOAL TECHNIQUE
HIGHEST)
---------------------------------------------------------------------------------------------------------------------------------
CATALYSTS PROPERTIES Electrochemical B .65 .8 to .9 V .8 to .9 V OCV, Exchange
Activity current density
---------------------------------------------------------------------------------------------------------------------------------
Catalyst B Poor Continuous TBD SEM, EDX
Distribution reproducibility coverage down
and Uniformity pore wall.
---------------------------------------------------------------------------------------------------------------------------------
Catalyst Layer B TBD Consistent with Consistent with SEM
Thickness loading targets loading targets
below below
---------------------------------------------------------------------------------------------------------------------------------
Catalyst A TBD Atomic Pt:Ru Atomic Pt:Ru SEM, EDX, XPS
Composition (3+-x):1 3+-y:1
---------------------------------------------------------------------------------------------------------------------------------
Real Catalyst B 4000cm2/cm2 Si 7500 10,000 CO, H2 desorption
Surface Area (CV)
---------------------------------------------------------------------------------------------------------------------------------
Catalyst B XXX XXX TBD Micro scratch,
Adherence SEM, AFM
before/after
reliability cycling
---------------------------------------------------------------------------------------------------------------------------------
Catalyst 2 mW/mg 20 mw/mg 200 mW/mg Weight and
Utilization catalytic activity
measurements
---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------
COMMENTS
---------------------------------------------------------------
CATALYSTS PROPERTIES Intent is to minimize losses that are a
function of fundamental catalytic
and Tafel slope kinetics as well as
provide a reproducible process for
catalyst deposition that can
ultimately occur at a wafer level.
---------------------------------------------------------------
Uniform means the same structure exists
at all targeted locations in the
electrode structure.
---------------------------------------------------------------
---------------------------------------------------------------
Ru may be as hydroxide X and Y TBD
based on sensitivity of catalytic
activity to composition. No halogens.
---------------------------------------------------------------
---------------------------------------------------------------
Catalyst must stay attached during
operating conditions.
---------------------------------------------------------------
This is a cost issue. Migration to
supported catalyst is at least one
anticipated concept.
---------------------------------------------------------------
April 29, 2004
5 Company Confidential
EXHIBIT D
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER UNITED STATES
FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE
SECURITIES BE TRANSFERRED ON THE BOOKS OF THE COMPANY, WITHOUT REGISTRATION OF
SUCH SECURITIES UNDER ALL APPLICABLE UNITED STATES FEDERAL OR STATE SECURITIES
LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE, AT
THE OPTION OF THE COMPANY, TO BE EVIDENCED BY AN OPINION OF SHAREHOLDER'S
COUNSEL, IN FORM ACCEPTABLE TO THE COMPANY, THAT NO VIOLATION OF SUCH
REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR ASSIGNMENT.
WARRANT TO PURCHASE COMMON STOCK OF
NEAH POWER SYSTEMS, INC.
Warrant No. COMMON STOCK-04 Bothell, Washington
Date of Issuance: April 29, 2004 Number of Shares: 1,000,000
(subject to adjustment)
THIS CERTIFIES THAT, for value received, NOVELLUS SYSTEMS, INC., or its
permitted registered assigns (the "HOLDER"), IS entitled, subject to the terms
and conditions of this Warrant, at any time or from time to time after the date
hereof (the "EFFECTIVE DATE"), and before 5:00 p.m. Pacific Time on April 29,
2009 (the "EXPIRATION DATE"), to purchase from NEAH POWER SYSTEMS, INC., a
Washington corporation (the "COMPANY"), ONE MILLION (1,000,000) shares of
Warrant Stock of the Company at a price per share of $0.25 (the "EXERCISE
PRICE"). Both the number of shares of Warrant Stock purchasable upon exercise of
this Warrant and the Exercise Price are subject to adjustment and vesting as
provided herein. This Warrant is issued pursuant to that certain Collaboration
Agreement, dated as of the date hereof (the "AGREEMENT"), between the Company
and the Holder. Unless defined otherwise herein, capitalized terms shall have
the meaning set forth in the Agreement.
1. CERTAIN DEFINITIONS. As used in this Warrant the following terms shall
have the following respective meanings:
"FAIR MARKET VALUE" of a share of Warrant Stock as of a particular date shall
mean:
(a) If traded on a national securities exchange or the NASDAQ
National Market, the Fair Market Value shall be deemed to be the
average of the closing prices of the shares of the Common Stock of the
Company on such exchange or market over the 5 business days ending
immediately prior to the applicable date of valuation;
(b) If actively traded over-the-counter, the Fair Market Value
shall be deemed to be the average of the closing bid prices over the
30-day period ending immediately prior to the applicable date of
valuation; and
(c) If there is no active public market, the Fair Market Value
shall be the value thereof, as agreed upon by the Company and the
Holder; PROVIDED, HOWEVER, that if
the Company and the Holder cannot agree on such value, such value shall
be determined by an independent valuation firm experienced in valuing
businesses such as the Company and jointly selected in good faith by
the Company and the Holder. Fees and expenses of the valuation firm
shall be paid for by the Company.
"HSR ACT" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"IPO" shall mean the first firm commitment underwritten public offering
of the Company's Common Stock pursuant to an effective registration
statement filed with the SEC under the Securities Act.
"REGISTERED HOLDER" shall mean any Holder in whose name this Warrant is
registered upon the books and records maintained by the Company.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"WARRANT" shall include this Warrant and any warrant delivered in
substitution or exchange for this warrant as provided herein.
"WARRANT STOCK" shall mean the Common Stock of the Company and any
other securities at any time receivable or issuable upon exercise of
this Warrant.
2. EXERCISE OF WARRANT.
2.1. PAYMENT. Subject to compliance with the terms and conditions of
this Warrant and applicable securities laws, this Warrant may be exercised, in
whole or in part at any time or from time to time, on or before the Expiration
Date by the delivery (including, without limitation, delivery by facsimile) of
the form of Notice of Exercise attached hereto as EXHIBIT 1 (the "NOTICE OF
EXERCISE"), duly executed by the Holder, at the principal office of the Company,
and as soon as practicable after such date, surrendering
(a) this Warrant at the principal office of the Company, and
(b) payment, (i) in cash (by check) or by wire transfer, (ii) by
cancellation by the Holder of indebtedness of the Company to the
Holder; or (iii) by a combination of (i) and (ii), of an amount equal
to the product obtained by multiplying the number of shares of Warrant
Stock being purchased upon such exercise by the then effective Exercise
Price (the "EXERCISE AMOUNT"), except that if Holder is subject to HSR
Act Restrictions (as defined in Section 2.5 below), the Exercise Amount
shall be paid to the Company within five (5) business days of the
termination of all HSR Act Restrictions.
2.2. NET ISSUE EXERCISE. In lieu of the payment methods set forth in
Section 2.1(b) above, if the Fair Market Value of one share of Warrant Stock is
greater than the Exercise Price (at the date of calculation set forth below),
the Holder may elect to exchange all or some of the Warrant for shares of
Warrant Stock equal to the value of the Warrant being exchanged on the
date of exchange. If the Holder elects to exchange this Warrant as provided in
this Section 2.2, the Holder shall tender to the Company, at the principal
office of the Company, the Warrant for the amount being exchanged, along with a
properly endorsed Notice of Exercise, and the Company shall issue to the Holder
the number of shares of the Warrant Stock computed using the following formula:
X=Y (A-B)
-------
A
Where: X = the number of shares of Warrant Stock to be issued to the
Holder.
Y = the number of shares of Warrant Stock purchasable under
the amount of the Warrant being exchanged (as adjusted to the
date of such calculation).
A = the Fair Market Value of one share of the Warrant Stock.
B = Exercise Price (as adjusted to the date of such
calculation).
All references herein to an "exercise" of the Warrant shall include an exchange
pursuant to this Section 2.2. Upon receipt of a written notice of the Company's
intention to raise capital by selling shares of Common Stock in an IPO (the "IPO
NOTICE"), which notice shall be delivered to the Holder at least forty-five (45)
but not more than ninety (90) days before the anticipated date of the
effectiveness of the registration statement associated with the IPO, the Holder
shall promptly notify the Company whether the Holder will exercise this Warrant
pursuant to this Section 2.2 prior to consummation of the IPO. Notwithstanding
whether an IPO Notice has been delivered to the Holder or any other provision of
this Warrant to the contrary, if the Holder decides to exercise this Warrant
while a registration statement is on file with the SEC in connection with the
IPO, this Warrant shall be deemed exercised on the consummation of the IPO and
the Fair Market Value will be the price at which one share of Common Stock was
sold to the public in the IPO. If the Holder has elected to exercise this
Warrant pursuant to this Section 2.2 while a registration statement is on file
with the SEC in connection with an IPO and the IPO is not consummated, then the
Holder's exercise of this Warrant shall not be effective unless the Holder
confirms in writing the Holder's intention to go forward with the exercise of
this Warrant.
2.3. STOCK CERTIFICATES; FRACTIONAL SHARES. As soon as practicable on
or after the date of exercise of this Warrant under Section 2.1 or 2.2 above, as
applicable, the Company shall issue and deliver to the person or persons
entitled to receive the same a certificate or certificates for the number of
whole shares of Warrant Stock issuable upon such exercise, together with cash in
lieu of any fraction of a share equal to such fraction of the current Fair
Market Value of one whole share of Warrant Stock as of the date of exercise of
this Warrant. No fractional shares or scrip representing fractional shares shall
be issued upon an exercise of this Warrant.
2.4. HSR ACT. The Company hereby acknowledges that exercise of this
Warrant by the Holder may subject the Company and/or the Holder to the filing
requirements of the HSR Act and that the Holder may be prevented from exercising
this Warrant until the expiration or early termination of all waiting periods
imposed by the HSR Act ("HSR ACT RESTRICTIONS"). If on or before the Expiration
Date, the Holder has sent the Notice of Exercise to Company and the Holder has
not been able to complete the exercise of this Warrant prior to the Expiration
Date
because of HSR Act Restrictions, the Holder shall be entitled to complete the
process of exercising this Warrant in accordance with the procedures contained
herein notwithstanding the fact that completion of the exercise of this Warrant
would take place after the Expiration Date or the completion of the IPO.
2.5. PARTIAL EXERCISE; EFFECTIVE DATE OF EXERCISE. In case of any
partial exercise of this Warrant, the Company shall cancel this Warrant upon
surrender hereof and shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares of Warrant Stock purchasable hereunder. This
Warrant shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above. However,
if Holder is subject to HSR Act filing requirements this Warrant shall be deemed
to have been exercised on the date immediately following the date of the
expiration of all HSR Act Restrictions. The person entitled to receive the
shares of Warrant Stock issuable upon exercise of this Warrant shall be treated
for all purposes as the holder of record of such shares of Warrant Stock as of
the close of business on the date the Holder is deemed to have exercised this
Warrant.
2.6. VESTING. The purchase rights represented by this Warrant shall
vest as follows:
(a) 333,333 shares of Warrant Stock (as adjusted pursuant
to Section 4 hereof) shall vest fully and be immediately
exercisable by the Holder upon the completion of each of the
three milestones identified in the Project Plan as defined in
the Technology Collaboration Agreement dated effective as of
April 1, 2004. The remaining one share (as adjusted pursuant
to Section 4) shall vest upon completion of the first of the
three milestones.
(b) Notwithstanding anything to the contrary set forth
herein, upon (i) the reorganization or merger (or similar
transaction or series of transactions) of the Company with or
into any other corporation or corporations in which the
holders of the Company's outstanding voting stock immediately
before such transaction or series of related transactions do
not, immediately after such transaction or series of related
transactions, retain stock representing a majority of the
voting power of the surviving corporation (or its parent
corporation if the surviving corporation is wholly owned by
the parent corporation) of such transaction of series of
related transactions; or (ii) a sale, transfer or exclusive
license of all or substantially all of the assets of the
Company, the purchase rights represented by this Warrant shall
immediately and fully accelerate and all shares of Warrant
Stock issuable under this Warrant shall vest fully and be
immediately exercisable by the Holder.
3. VALID ISSUANCE; TAXES. All shares of Warrant Stock issued upon the
exercise of this Warrant shall be validly issued, fully paid and non-assessable,
and the Company shall pay all taxes and other governmental charges that may be
imposed in respect of the issue or delivery thereof.
4. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES. The number of shares
of Warrant Stock issuable upon exercise of this Warrant (or any shares of stock
or other
securities or property receivable or issuable upon exercise of this Warrant) and
the Exercise Price are subject to adjustment upon occurrence of the following
events:
4.1. ADJUSTMENT FOR STOCK SPLITS, STOCK SUBDIVISIONS OR COMBINATIONS OF
SHARES. If the Company at any time while this Warrant, or any portion hereof,
remains outstanding and unexpired shall split, subdivide or combine the shares
of Warrant Stock, as to which purchase rights under this Warrant exist, into a
different number of securities of the same class, the number of shares of
Warrant Stock issuable upon exercise of this Warrant shall be proportionately
increased and the Exercise Price for such securities shall be proportionately
decreased in the case of a split or subdivision, and likewise, the number of
shares of Warrant Stock issuable upon exercise of this Warrant shall be
proportionately decreased and the Exercise Price proportionately increased in
the case of a combination.
4.2. ADJUSTMENT FOR DIVIDENDS OR DISTRIBUTIONS OF STOCK OR OTHER
SECURITIES OR PROPERTY. In case the Company shall make or issue, or shall fix a
record date for the determination of eligible holders entitled to receive, a
dividend or other distribution with respect to the Common Stock (or any shares
of stock or other securities at the time issuable upon exercise of the Warrant)
payable in (a) securities of the Company or (b) assets (excluding cash dividends
paid or payable solely out of retained earnings), then, in each such case, the
Holder on exercise of this Warrant at any time after the consummation, effective
date or record date of such dividend or other distribution, shall receive, in
addition to the shares of Common Stock (or such other stock or securities)
issuable on such exercise prior to such date, and without the payment of
additional consideration therefor, the securities or such other assets of the
Company to which such Holder would have been entitled upon such date if such
Holder had exercised this Warrant on the date hereof and had thereafter, during
the period from the date hereof to and including the date of such exercise,
retained such shares and/or all other additional stock available by it as
aforesaid during such period giving effect to all adjustments called for by this
Section 4.
4.3. RECLASSIFICATION. If the Company, by reclassification of
securities or otherwise, shall change any of the securities as to which purchase
rights under this Warrant exist into the same or a different number of
securities of any other class or classes, this Warrant shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Warrant immediately prior to such
reclassification or other change and the Exercise Price therefore shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 4. No adjustment shall be made pursuant to this Section 4.3 upon any
conversion or redemption of the Common Stock which is the subject of Section
4.5.
4.4. ADJUSTMENT FOR CAPITAL REORGANIZATION, MERGER OR CONSOLIDATION. If
at any time while this Warrant, or any portion hereof, is outstanding and
unexpired there shall be (a) a reorganization (other than a combination,
reclassification, exchange or subdivision of shares as otherwise provided for
herein), (b) a merger or consolidation of the Company with or into another
corporation in which the Company is not the surviving entity, or a reverse
triangular merger, or similar transaction, in which the Company is the surviving
entity but the shares of the Company's capital stock outstanding immediately
prior to the merger are converted into other property, whether in the form of
securities, cash, or otherwise, and as a result of which the ownership of the
Company shall change by fifty percent (50%) or more, or (c) a sale or transfer
of all or substantially all of the Company's assets to any other person, then,
as a part of such reorganization, merger, consolidation, sale or transfer
(collectively, A "TRANSACTION"), this Warrant shall cease to represent the right
to receive Warrant Shares and shall automatically represent the right to receive
upon the exercise of this Warrant, during the period specified herein and upon
payment of the Exercise Price then in effect, the number of shares of stock or
other securities or property offered to the Company's holders of Warrant Stock
in connection with such Transaction that a holder of shares of Warrant Stock
would have been entitled to receive in such Transaction if this Warrant had been
exercised in full immediately before such Transaction, subject to further
adjustment as provided in this Section 4. The foregoing provisions of this
Section 4.4 shall similarly apply to successive reorganizations, consolidations,
mergers, sales, and transfers to the extent that this Warrant is assigned to or
assumed by any successor corporation or entity, whether by operation of law or
otherwise, and to the stock or securities of any other corporation that are at
the time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the holder hereof for shares of Warrant Stock in
connection with any such Transaction is in a form other than cash or marketable
securities, then the value of such consideration shall be determined in good
faith by the Company's Board of Directors. In all events, appropriate adjustment
(as determined in good faith by the Company's Board of Directors) shall be made
in the application of the provisions of this Warrant with respect to the rights
and interests of the Holder after the Transaction, to the end that the
provisions of this Warrant shall be applicable after that event, as near as
reasonably may be, in relation to any shares or other property deliverable after
that event upon exercise of this Warrant.
4.5. REDEMPTION OR TERMINATION OF WARRANT STOCK. In case all or any
portion of the authorized and outstanding shares of Warrant Stock of the Company
are redeemed or converted or reclassified into other securities or property
pursuant to the Company's Articles of Incorporation or otherwise, or the Warrant
Stock otherwise ceases to exist, then, in such case, the Holder of this Warrant,
upon exercise hereof at any time after the date on which the Warrant Stock is so
redeemed or ceases to exist (the "WARRANT STOCK TERMINATION DATE"), shall
receive, subject to the terms of this Warrant, in lieu of the number of shares
of Warrant Stock that would have been issuable upon such exercise immediately
prior to the Warrant Stock Termination Date, the securities or property that
would have been received if this Warrant had been exercised in full and the
Warrant Stock received thereupon had been simultaneously converted immediately
prior to the Warrant Stock Termination Date, all subject to further adjustment
as provided in this Warrant. Additionally, the Exercise Price shall be
immediately adjusted to equal the quotient obtained by dividing (x) the
aggregate Exercise Price of the maximum number of shares of Warrant Stock for
which this Warrant was exercisable immediately prior to the Warrant Stock
Termination Date by (y) the number of shares of Warrant Stock of the Company for
which this Warrant is exercisable immediately after the Warrant Stock
Termination Date, all subject to further adjustment as provided herein.
5. CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in the Exercise
Price, or number or type of shares issuable upon exercise of this Warrant, the
Chief Financial Officer or Controller of the Company shall compute such
adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Exercise
Price. The Company shall promptly send (by facsimile and by either first class
mail, postage prepaid or overnight delivery) a copy of each such certificate to
the Holder.
6. LOSS OR MUTILATION. Upon receipt of evidence reasonably satisfactory to
the Company of the ownership of and the loss, theft, destruction or mutilation
of this Warrant, and of indemnity reasonably satisfactory to it, and (in the
case of mutilation) upon surrender and cancellation of this Warrant, the Company
will execute and deliver in lieu thereof a new Warrant of like tenor as the
lost, stolen, destroyed or mutilated Warrant.
7. RESERVATION OF WARRANT STOCK. The Company hereby covenants that at all
times there shall be reserved for issuance and delivery upon exercise of this
Warrant such number of shares of Warrant Stock or other shares of capital stock
of the Company as are from time to time issuable upon exercise of this Warrant
and, from time to time, will take all steps necessary to amend its Articles of
Incorporation to provide sufficient reserves of shares of Warrant Stock issuable
upon exercise of this Warrant. All such shares shall be duly authorized, and
when issued upon such exercise, shall be validly issued, fully paid and
non-assessable, free and clear of all liens, security interests, charges and
other encumbrances or restrictions on sale and free and clear of all preemptive
rights, except encumbrances or restrictions arising under federal or state
securities laws. Issuance of this Warrant shall constitute full authority to the
Company's officers who are charged with the duty of executing stock certificates
to execute and issue the necessary certificates for shares of Warrant Stock upon
the exercise of this Warrant.
8. TRANSFER AND EXCHANGE. Subject to the terms and conditions of this
Warrant and compliance with all applicable securities laws, this Warrant and all
rights hereunder may be transferred to any Registered Holder, parent, subsidiary
or affiliate of the Holder, in whole or in part, on the books of the Company
maintained for such purpose at the principal office of the Company referred to
above, by the Registered Holder hereof in person, or by duly authorized
attorney, upon surrender of this Warrant properly endorsed and upon payment of
any necessary transfer tax or other governmental charge imposed upon such
transfer. Upon any permitted partial transfer, the Company will issue and
deliver to the Registered Holder a new Warrant or Warrants with respect to the
shares of Warrant Stock not so transferred. Each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that when this
Warrant shall have been so endorsed, the person in possession of this Warrant
may be treated by the Company, and all other persons dealing with this Warrant,
as the absolute owner hereof for any purpose and as the person entitled to
exercise the rights represented hereby, any notice to the contrary
notwithstanding; PROVIDED, HOWEVER that until a transfer of this Warrant is duly
registered on the books of the Company, the Company may treat the Registered
Holder hereof as the owner for all purposes.
9. RESTRICTIONS ON TRANSFER. The Holder, by acceptance hereof, agrees
that, absent an effective registration statement filed with the SEC under the
Securities Act, covering the disposition or sale of this Warrant or the Warrant
Stock issued or issuable upon exercise hereof, and registration or qualification
under applicable state securities laws, such Holder will not sell, transfer,
pledge, or hypothecate any or all such Warrants or Warrant Stock, as the case
may be, unless either (i) the Company has received an opinion of counsel, in
form and substance reasonably satisfactory to the Company, to the effect that
such registration is not required in connection with such disposition or (ii)
the sale of such securities is made pursuant to Rule 144, promulgated under the
Securities Act.
10. COMPLIANCE WITH SECURITIES LAWS. By acceptance of this Warrant, the
Holder hereby represents, warrants and covenants that any shares of stock
purchased upon exercise of this Warrant or acquired upon conversion thereof
shall be acquired for investment only and not with a view to, or for sale in
connection with, any distribution thereof(.), that the Holder has had such
opportunity as the Holder has deemed adequate to obtain from representatives of
the Company such information as is necessary to permit the Holder to evaluate
the merits and risks of its investment in the Company; that the Holder is able
to bear the economic risk of holding such shares of Warrant Stock for an
indefinite period; that the Holder understands that shares of Warrant Stock will
not be registered under the Securities Act (unless otherwise required pursuant
to exercise by the Holder of the registration rights, if any, previously granted
to the Holder) and will be "restricted securities" within the meaning of Rule
144 promulgated under the Securities Act and that the exemption from
registration under Rule 144 will not be available for at least one year from the
date of exercise of this Warrant, subject to any special treatment by the SEC
for exercise of this Warrant pursuant to Section 2.2, and even then will not be
available unless a public market then exists for the stock, adequate information
concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and that all stock certificates
representing shares of Warrant Stock may have affixed thereto a legend
substantially in the following form:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER UNITED STATES FEDERAL OR STATE SECURITIES LAWS AND MAY
NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR
ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE
SECURITIES BE TRANSFERRED ON THE BOOKS OF THE CORPORATION,
WITHOUT REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE
UNITED STATES FEDERAL OR STATE SECURITIES LAWS OR COMPLIANCE
WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH COMPLIANCE, AT
THE OPTION OF THE CORPORATION, TO BE EVIDENCED BY AN OPINION
OF SHAREHOLDER'S COUNSEL, IN FORM ACCEPTABLE TO THE
CORPORATION, THAT NO VIOLATION OF SUCH REGISTRATION
PROVISIONS WOULD RESULT FROM ANY PROPOSED TRANSFER OR
ASSIGNMENT.
11. NO RIGHTS OR LIABILITIES AS SHAREHOLDERS. This Warrant shall not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company.
12. TITLES AND HEADINGS. The titles, captions and headings of this Warrant
are included for ease of reference only and will be disregarded in interpreting
or construing this Warrant. Unless otherwise specifically stated, all references
herein to "sections" and "exhibits" will mean "sections" and "exhibits" to this
Warrant.
13. LAW GOVERNING. This Warrant shall be governed in all respects by the
laws of the State of Washington, without regard to principles of conflict of
laws.
14. NOTICE.
14.1. MERGER OR SALE. If the Company proposes to sell, convey, or
otherwise dispose of all or substantially all of its property or business or
merge into or consolidate with any other corporation (other than a wholly-owned
subsidiary corporation), including an exclusive license of all or substantially
all of the intellectual property assets of the Company, or effect any other
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of (other than a
transaction or series of related transactions approved by the holders of Common
Stock and the holders of each series of Preferred Stock, voting separately), but
excluding (i) a consolidation with a wholly owned subsidiary of the Company, or
(ii) a merger effected solely for the purpose of changing the domicile of the
Company, then the Company shall give the Registered Holder written notice of
such impending transaction not later than ten (10) days prior to the
shareholders' meeting called to approve such transaction, or ten (10) days prior
to the closing of such transaction, whichever is earlier, and shall also notify
the Registered Holder in writing of the final approval of such transaction. The
first of such notices shall describe the material terms and conditions of the
impending transaction, and the Company shall thereafter give the Registered
Holder prompt notice of any material changes. The transaction shall in no event
take place sooner than ten (10) days after the Company has given the first
notice provided for herein or sooner than ten (10) days after the Company has
given notice of any material changes provided for herein; PROVIDED, HOWEVER,
that such periods may be shortened upon the written consent of the Registered
Holder.
14.2. DIVIDEND, RECLASSIFICATION OR DISSOLUTION. In case: (a) the
Company shall take a record of the holders of its Common Stock (or other stock
or securities at the time receivable upon the exercise of this Warrant), for the
purpose of entitling them to receive any dividend or other distribution; (b) of
any reclassification of the capital stock of the Company; or (c) of any
voluntary dissolution, liquidation or winding-up of the Company; then, and in
each such case, the Company will mail or cause to be mailed to the Registered
Holder a notice specifying, as the case may be, (i) the date on which a record
is to be taken for the purpose of such dividend or distribution, or (ii) the
date and the time, if any is to be fixed, as of which the holders of record of
Warrant Stock shall be entitled to exchange their shares of Warrant Stock for
securities or other property deliverable upon such event. Such notice shall be
delivered at least ten (10) days prior to the date therein specified.
14.3. MANNER OF NOTICE. Any notice required or permitted by this
Warrant shall be in writing and shall be deemed sufficient upon delivery, when
delivered personally or by overnight courier or sent by telegram or fax, or
ninety-six (96) hours after being deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, and addressed to the party to be notified
at such party's address or fax number as set forth on the signature page below
or as subsequently modified by written notice.
15. SEVERABILITY. If any section, provision or clause of this Warrant shall
be found or be held to be illegal, invalid or unenforceable, the remainder of
this Warrant shall be valid and enforceable and the parties shall use good faith
to negotiate a substitute, valid and enforceable provision that most nearly
effects the parties' intent in entering into this Warrant.
16. COUNTERPARTS. This Warrant may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
17. NO INCONSISTENT AGREEMENTS. The Company will not on or after the date
of this Warrant enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holder of this Warrant or otherwise
conflicts with the provisions hereof. The rights granted to the Holder hereunder
do not in any way conflict with and are not inconsistent with the rights granted
to holders of the Company's securities under any other agreements, except rights
that have been waived.
18. SATURDAYS, SUNDAYS AND HOLIDAYS. If the Expiration Date falls on a
Saturday, Sunday or legal holiday, the Expiration Date shall automatically be
extended until 5:00 p.m. the next business day.
[SPACE LEFT INTENTIONALLY BLANK.]
IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the
Effective Date.
NEAH POWER SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxx
-----------------
Name: Xxxxx Xxxxxxx
Title: President and CEO
Address: 00000 00xx Xxx XX, Xxxxx 000, Xxxxxxx,
XX 00000
Fax: (000) 000-0000
Date: _______________
SIGNATURE PAGE TO NOVELLUS WARRANT TO PURCHASE COMMON STOCK
OF NEAH POWER SYSTEMS, INC.
EXHIBIT 12
NOTICE OF EXERCISE
(To be executed upon exercise of Warrant)
NEAH POWER SYSTEMS, INC. WARRANT NO. COMMON STOCK-04
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by this Warrant Certificate for, and to purchase
thereunder, the securities of Neah Power Systems, Inc. as provided for therein,
and (check the applicable box):
|_| Tenders herewith payment of the exercise price in full in the form of
cash or a certified or official bank check in same-day funds in the amount of
$________________ for such securities.
|_| Elects the Net Issue Exercise option pursuant to Section 2.2 of the
Warrant, and accordingly requests delivery of a net of of such securities,
according to the following calculation:
X = Y (A-B) (_____) = [(____)-(____)]
------- -------------------------
A ( )
Where: X = the number of shares of Common Stock to be issued to Holder.
Y = the number of shares of Common Stock purchasable under the amount
of the Warrant being exchanged (as adjusted to the date of such
calculation).
A = the Fair Market Value of one share of the Company's Common Stock.
B = Exercise Price (as adjusted to the date of such calculation).
Please issue a certificate or certificates for such securities in the
name of, and pay any cash for any fractional share to (please print name,
address and social security number):
Name: ________________________________
Address: ______________________________
Signature: ______________________________
Note: The above signature should correspond exactly with the name on
the first page of this Warrant Certificate or with the name of the
assignee
appearing in the assignment form below.
If said number of shares shall not be all the shares purchasable under
the within Warrant Certificate, a new Warrant Certificate is to be issued in the
name of said undersigned for the balance remaining of the shares purchasable
thereunder rounded up to the next higher whole number of shares.
EXHIBIT 2
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
NEAH POWER SYSTEMS, INC. WARRANT NO. _________
For value received, the undersigned hereby sells, assigns and transfers unto
_________________ the within Warrant Certificate, together with all right, title
and interest therein and does hereby irrevocably constitute and appoint
_______________________ attorney, to transfer said Warrant Certificate on the
books of the within-named Company with respect to the number of Warrants set
forth below, with full power of substitution in the premises:
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Name(s) of Assignee(s) Address # of Warrants
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And if said number of Warrants shall not be all the Warrants
represented by the Warrant Certificate, a new Warrant Certificate is to be
issued in the name of said undersigned for the balance remaining of the Warrants
registered by said Warrant Certificate.
Dated: ___________________________
Signature: _________________________
Notice: The signature to the foregoing Assignment must correspond to
the name as written upon the face of this security in every particular, without
alteration or any change whatsoever; signatures) must be guaranteed by an
eligible guarantor institution (banks, stock brokers, savings and loan
associations and credit unions with membership in an approved signature
guarantee medallion program) pursuant to Securities and Exchange Commission Rule
17Ad-15.
