AMENDMENT TO THE BUSINESS ALLIANCE
AND LICENSE AGREEMENT
This Amendment (the "Amendment") to the Business Alliance
and License Agreement dated September 1, 1993 by and between
Electrosource, Inc. ("Electrosource") and Electric Power Research
Institute ("EPRI") as amended on September 17, 1993 (the
"Agreement") shall be entered into effective as of this 1st date
of November, 1995. Capitalized terms used herein and not defined
have the same definitions as set forth in the Agreement.
WHEREAS, EPRI purchased certain equipment listed on Exhibit
A hereto in connection with research activities undertaken by
Electrosource on behalf of EPRI and the parties now wish to
transfer title of such equipment to Electrosource.
WHEREAS, pursuant to the Agreement, EPRI granted to
Electrosource a personal, nontransferable, perpetual, worldwide,
royalty-bearing license to use EPRI's Patent Rights and the
Technology, if any, and the parties now desire to transfer all
right, title and interest in the EPRI Patent Rights and the
Technology, if any, to Electrosource subject to any rights held
by the Participating Utilities set forth in the agreements listed
on Exhibit B hereto.
WHEREAS, EPRI has agreed to pay an additional $200,000 to
Electrosource as full payment of all obligations owed to
Electrosource pursuant to the Agreement.
WHEREAS, the parties wish to provide that if any
Participating Utility chooses not to convert its rights to
receive royalties into equity of Electrosource, then EPRI shall
receive the shares that otherwise would have been allocated to
such Participating Utility and the Participating Utility shall
receive a proportionate part of the cash royalties as set forth
in the Agreement.
NOW THEREFORE, the parties hereto, intending to the legally
bound, agree as follows:
1. Section 3 of the Agreement is amended and restated in
its entirety as follows:
"3. Transfer of Title. In consideration for this
Amendment to the Agreement, EPRI sells conveys,
assigns, transfers and delivers to Electrosource
all right, title and interest of EPRI in EPRI's
Patent Rights and the Technology, if any, free and
clear of all liens, pledges, charges, claims,
security interests or other encumbrances;
provided, however, that such transfer shall be
subject to the rights of the Participating
Utilities set forth in the agreements listed in
Exhibit B hereto, copies of which Electrosource
hereby acknowledges receiving."
2. Section 4 of the Agreement is deleted in its
entirety.
3. Title of Equipment. EPRI purchased the equipment
listed on Exhibit A attached to this Amendment for
$581,339.26 and such equipment is now located at
Electrosource facilities. EPRI hereby transfers all right,
title and interest in the equipment listed on Exhibit A (the
"Transferred Equipment") to Electrosource.
4. Settlement of Outstanding Obligations. EPRI agree
to pay Electrosource $200,000 upon execution of this
Amendment and such payment shall be in final settlement of
all amounts or obligations owed or owing by EPRI to
Electrosource under the Agreement.
5. Royalties.
a. Electrosource hereby acknowledges and agrees
that EPRI and the Participating Utilities, or both, are
deemed to have provided funds in an amount satisfactory
under Sections 5.2(b), 5.3 and 5.4 of the Agreement to give
EPRI and the Participating Utilities the right to elect to
exercise the conversion rights under Subarticle 5.3 of the
Agreement. Electrosource agrees that XXXX and the
Participating Utilities may exercise its right to receive
stock in lieu of cash royalties at any time during the six
month period following the effective date of this Amendment.
Electrosource also acknowledges that EPRI and the
Participating Utilities shall be issued any such shares
pursuant to the terms of the Stock Issuance Agreements
attached as Exhibit A to the Agreement.
b. Section 5.4 of the Agreement shall be amended
and restated in its entirety as follows:
"5.4 Number of Shares Issuable for Conversion.
If EPRI or the Participating Utilities elect to
exercise the conversion rights under Subarticle
5.3, EPRI and the Participating Utilities shall be
entitled to an aggregate of 2,158,000 shares of
Common Stock of Electrosource which amount is
equal to 13% of a stipulated 16,600,000 full
diluted number of shares of Common Stock of
Electrosource as of December 31, 1994 (the
"Electrosource Stock"), with EPRI and each such
Participating Utility pursuant to this Agreement.
A schedule of such pro rata amounts is attached as
Exhibit A hereto. In addition, if any
Participating Utility chooses not to exercise its
conversion rights under Subarticle 5.3 within the
six months period following the effective date of
this Amendment, EPRI shall receive the shares of
Common Stock of Electrosource that otherwise would
have been allocated to be issued to such
Participating Utility.:
c. The Participating Utilities who do not elect to
exercise the conversion rights under Subarticle 5.3 of this
Agreement will receive royalties on the terms set forth in
Section 5.1 and 5.2 of the Agreement based on their pro rata
contribution as set forth on Exhibit C.
6. Taxes. Electrosource agrees to pay or to
reimburse EPRI for any and all taxes incurred by either EPRI
or Electrosource in connection with the equipment transfer
contemplated by this Amendment.
7. Miscellaneous Provisions.
a. Counterparts. This amendment may be executed
in any number of counterparts, each of which shall be deemed
an original and all of which together shall be deemed to be
one and the same instrument.
b. Entire Agreement. This Amendment, together
with the Agreement and the Exhibits thereto, constitutes the
entire agreement by and between the parties with respect to
the subject matter hereof and supersedes all prior oral
and/or written understandings and agreements relating
thereto, except for the Research and Development Agreement
(RP2415-15/3593-2) dated July 21, 1992 (the "R&D
Agreement"). Neither party nor any of its agents has made
any representations to the other party which the parties
intend to have any force or effect, except as specifically
set forth therein and in the Agreement or the Exhibits
thereto, and neither party, in executing or performing this
Agreement, is relying upon any statement, covenant,
representation or information, or any nature, whatsoever, to
whomsoever made or given, directly or indirectly, verbally
or in writing, by any person or entity, except as
specifically set forth herein and in the Exhibits hereto.
This Amendment may not be modified or amended, in any way,
except in writing signed by the parties. In the event of
any conflict between the terms of this Amendment and the
Agreement and any of the Exhibits thereto the provisions of
this Amendment shall be controlling.
c. New Agreement. Prior to January 31, 1996,
the parties agree to use reasonable efforts to enter into a
new agreement on mutually acceptable terms which will
replace the Agreement and the R&D Agreement.
d. No Warranty. The equipment is sold "AS IS,"
WITH NO WARRANTY, STATUTORY, EXPRESS OR IMPLIED (INCLUDING
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE AND WARRANTIES ARISING FROM COURSE OF DEALING OR
USAGE OF TRADE).
IN WITNESS WHEREOF, the parties have each caused this
Agreement to be duly executed as of the 1st day of November,
1995.
ELECTRIC POWER RESEARCH INSTITUTE ELECTROSOURCE, INC.
By:____________________________ By: /s/
Xxxxxxx X. Xxxxxxx
Title:__________________________ President, CEO and Chairman
Date:__________________________ Date: October 30, 1995
Exhibit A
Schedule of Equipment
Purchased by EPRI for Electrosource for $581,339.26
Serial EPRI tag
Description Number Number Cost
FYE 12/31/92:
SFUDs Tester upgrade n/a 23047 $14,573.00
Omnipower UPS n/a 23046 1,350.00
Chiller 3788 23045 2,831.22
Power supply 92PS584 23044 1,199.78
Power supply 92PS586 23043 1,199.78
Power supply 92PS583 23042 1,199.78
Power supply 92PS585 23041 1,199.78
Computer 000 XXx x/x 00000 1,379.84
Computer 000 XXx x/x 00000 1,338.58
Computer 000 XXx x/x 00000 1,338.58
Computer 000 XXx x/x 00000 1,338.58
Computer 000 XXx x/x 00000 1,338.58
Computer 000 XXx x/x 00000 1,338.58
Monitor w/keyboard H2GB701149 n/a 400.00
Monitor w/keyboard H2GB701223 n/a 400.00
Monitor w/keyboard H2GB700982 n/a 400.00
Monitor w/keyboard H2GB701170 n/a 400.00
Monitor w/keyboard H2GB701150 n/a 400.00
Monitor w/keyboard H1CB803838 n/a 400.00
FYE 12/31/93:
Power supply n/a 24360 1,199.00
Power supply n/a 24361 1,199.00
Mixer 1930362 24303 1,250.00
Beater n/a 24304 553.00
Mixer and beater 1729085 24301 4,901.00
Freezer n/a 24298 10,390.00
Power supply n/a 24362 1,210.00
Pump n/a 24296 8,075.00
Chiller 4365 24349 2,622.00
Chiller 4435 24353 2,701.00
Chiller 4389 24352 5,513.00
Power supply 93PS743 24325 1,770.00
Power supply 93PS799 24305 2,063.00
Power supply 93PS786 24306 2,063.00
Power supply 93PS794 24307 2,063.00
Power supply 93PS793 24308 2,063.00
Power supply 93PS791 24309 2,063.00
Power supply 93PS802 24310 2,063.00
Power supply 93PS785 24311 2,063.00
Power supply 93PS784 24312 2,063.00
Power supply 93PS800 24313 2,063.00
Power supply 93PS789 24314 2,063.00
Power supply 93PS790 24315 2,063.00
Power supply 93PS787 24316 2,063.00
Power supply 93PS788 24317 2,063.00
Power supply 93PS783 24318 2,063.00
Power supply 93PS797 24319 2,063.00
Power supply 93PS795 24320 2,063.00
Power supply 93PS801 24321 2,063.00
Power supply 93PS792 24322 2,063.00
Power supply 93PS796 24323 2,063.00
Power supply 93PS798 24324 2,063.00
Electric Cabinet Oven 118791 24289 6,767.00
Chiller 4425 24350 2,622.00
Chiller 4540 24351 2,622.00
Chiller 4172 24354 2,701.00
Xxxxxx xxxxxxx x/x 00000 3,308.00
Acid converter n/a 24291 3,293.00
Power supply 93PS737 24326 1,770.00
Power supply 93PS736 24327 1,770.00
Power supply 93PS738 24328 1,770.00
Power supply 93PS745 24329 1,770.00
Power supply 93PS746 24330 1,770.00
Power supply 93PS293 24356 1,782.00
Power supply 93PS290 24358 1,782.00
Power supply 93PS292 24357 1,782.00
Power supply 93PS739 24331 1,770.00
Power supply 93PS742 24332 1,770.00
Power supply 93PS747 24333 1,770.00
Power supply 93PS741 24334 1,770.00
Power supply 93PS744 24335 1,770.00
Power supply 93PS740 24338 1,770.00
Power supply 93PS289 24358 1,782.00
Power supply 93PS291 24359 1,782.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Computer 000 00 XXx x/x 00000 570.00
Raritan computer A8280015 24374 2,495.00
Computer 000 00 XXx x/x 00000 1,444.00
Computer 000 00 XXx x/x 00000 1,444.00
Computer 000 00 XXx x/x 00000 1,444.00
Computer 000 00 XXx x/x 00000 1,444.00
Computer 000 00 XXx x/x 00000 1,444.00
Computer 000 00 XXx x/x 00000 1,444.00
Computer 000 00 XXx x/x 00000 579.00
Printer, laser USA3807916 24373 1,737.00
Computer 000 00 XXx x/x 00000 1,666.00
Xxxxxxx xxxxxxxx x/x 00000 2,125.00
Electronic balancer 0052310 24300 1,782.00
Micro-ohmmeter B469 24299 3,134.00
Power supply 93PS752 24383 10,864.00
Discharge unit n/a 24292 16,500.00
Wave solder machine n/a 24302 2,815.00
Vacuum pump 14730 24293 5,684.00
Cutter 930159 24294 7,997.00
Pump 3993207003 24297 8,075.00
Data monitor n/a 24372 3,217.00
FYE 12/31/94:
Genie lift 0593-35239 See note 1 1,097.15
Injection mold 0033177 See note 1 4,509.00
Survo motor n/a See note 1 1,821.15
Survo motor n/a See note 1 2,386.35
Load bank on pack tester n/a See note 1 2,545.52
Chiller 230 volt n/a See note 1 6,444.41
Chiller 230-volt n/a See note 1 6,444.41
Enclosure n/a See note 1 1,121.30
Xxxx n/a See note 1 1,305.46
Air filtration system n/a See note 1 42,288.00
Oven drain pan n/a See note 1 840.78
DC contactor 535 amp n/a See note 1 1,602.09
Transformer 480 volt n/a See note 1 2,208.58
Explore 2010 Electron Microscope E21029388 See note 1
187,198.89
Pasting machine n/a See note 1 44,285.00
Portable lead getter n/a See note 1 16,916.00
BADICHEQ 2000 n/a See note 1 3,240.00
Microscoper attachments n/a See note 1 3,435.56
PS9.0 n/a See note 1 1,113.53
Total $581,339.26
Note 1 - The 1994 capital items have not been submitted to EPRI
yet, thus there are no EPRI tag numbers assigned.
Note 2 - All other capital items billed to EPRI were relatively
minor components used to assemble various machinery.
Exhibit B
Agreements between EPRI and the Participating Utilities
Participating Utility Agreement Date
Oklahoma Gas & Electric Tailored Collaboration Agreement 05/18/93
Empire State Electric Energy
Research Corporation Cofunding Agreement 05/02/94
Pacific Gas &
Electric Company Cofunding Agreement 12/22/93
Houston Lighting & Power
Master Agreement for Tailored
Collaboration Projects 02/23/93
Centerior Energy Corporation Cofunding Agreement 03/23/94
Southern California
Edison Company Cofunding Agreement 12/09/93
Consolidated Edison Company
of New York, Inc. Cofunding Agreement 09/30/93
New York State Electric &
Gas Corporation Cofunding Agreement 11/21/94
Exhibit C
Funding Contributions
EQUITY CALCULATION:
Number of
Name Shares
EPRI 1,571,859
Oklahoma Gas & Electric 161,694
Houston Light & Power Company 161,694
Pacific Gas & Electric Company 101,059
Centerior Energy 161,694
Total 2,158,000
ROYALTY SHARE CALCULATION:
Name Amount Funded % of Royalty
Southern California Edison Company $200,000 20.0%
Empire State Electric Research Corporation 200,000 20.0
Consolidated Edison Company of New York 200,000 20.0
New York State Electric & Gas 400,000 40.0
Total $1,000,000* 100.0%
*Cash royalties will be paid on $1,000,000 with each of the above
four utilities receiving the percentage of royalties indicated
