LICENSE AGREEMENT FOR COUNTRY OF INDIA
THIS AGREEMENT (the "Agreement") is
entered into as of this 30th day of December, 2008, by and between
W2
ENERGY, INC., a corporation organized and existing under the laws of the State
of Nevada, United States of America, with its head office located at 00 Xxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxx X0X 0X0 (“Licensor”)
and
Alpha
Renewable Energy LLC, a limited liability company organized and existing under
the laws of the State of Georgia, United States of America, with its head office
located at 0000 Xxxxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 (“Licensee”) with
respect to the following facts:
R E C I T A L
S
A.
Licensor and its affiliates have special knowledge, expertise,
“know how” and intellectual property rights, including but not limited
to:
(I) special
knowledge, expertise "know how" and ownership of that certain Patent No:
______________ relating to, among other things, the creation synthetic diesel
and electricity from biomass, a proprietary Plasma Reactor, and the GTL
reactor;
(II) special
knowledge, expertise "know how" and ownership of that certain trade secret for
its propertiory small electrical generating systems (“SEGS”) using its unique,
efficient, economical and environmentally safe and friendly technologies;
and
(III) future
developments including special knowledge, expertise, and "know how," including
enhancements, revisions, and improvements, to existing technology and processes
and patents, trade secrets, and intellectual property of every description
relating to items identified in (I), (II), and (III) above (collectively, the
“Technology”) developed subsequent to the date hereof and during the period of
effectiveness of this Agreement.
B.
Licensee desires to acquire such rights and knowledge from Licensor and to
exploit the market and promote the Technology in the Licensed Jurisdiction as
set forth herein. Licensee:
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(I)
has special knowledge of and access to the market in the Licensed
Jurisdiction;
(II)
has the ability and desire to manufacture and market in the Licensed
Jurisdiction;
(III) has
a desire to learn and provide after-sales services and maintain enough
technician staff for repairs when needed; and
(IV) has
a desire to operate the plants in his ownership as well.
A G R E E M E N
T
NOW,
THEREFORE, in consideration of their mutual promises, Licensor and Licensee
agree as follows:
I. DEFINITIONS
A.
The term "Licensed Jurisdiction" shall mean that geographical area of the
country of India only.
B.
The term "Symbols" shall mean the various emblems, logos, trademarks, trade
names, insignias, service marks, and other artistic works denoting or
identifying the Technology and services of Licensor, which the Licensee shall
have the right to use under and pursuant to this License.
C.
The term "Technology" shall mean the proprietary information; processes, data,
know-how and inventions described in Recital A(III) above as well as all
reissues and extensions of any said patent and patent application, and any
improvements.
D.
The term "Effective
Date" shall be the date
on which the two parties have signed this Agreement.
E.
The term "Authorized Contract Manufacturer” means a third party manufacturer
located in the Licensed Jurisdiction that (a) has entered into a written
agreement with Licensee, or a new company located in India (a “India Newco”)
that contains confidentiality and other provisions protecting Licensor and it’s
Technology and improvements in a manner no less restrictive than this Agreement,
and (b) to whom Licensee or India Newco will release only information that is
necessary to manufacture that particular part.
II. LICENSE
X.
Xxxxx of License
1. Licensor
hereby grants to Licensee, for the term of this Agreement, subject to the terms
and conditions herein, and the Licensee hereby accepts the exclusive right
to:
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(a) Manufacture,
market and promote the use of the Technology in the Licensed
Jurisdiction;
(b) Licensee
may manufacture and sell equipment incorporating the Technology to purchasers
outside of the Licensed Jurisdiction but such sales will be made through W2
Energy, Inc. or a joint venture company set up by Licensor and
Licensee.
2.
Licensee may use the services of an Authorized Contract Manufacturer located in
the Licensed Jurisdiction provided (a) the Authorized Contract Manufacturer
shall have agreed in writing to be bound by the provisions of this Agreement to
the same manner and extent as Licensee in protecting Licensor and it’s
Technology and improvements in a manner no less restrictive than this
Agreement, and (b) Licensee or India Newco will only release the information
that is necessary to manufacture only that part pursuant to a strict
non-disclosure agreement on Government of India stamp paper.
3. Except as otherwise
permitted herein, Licensee agrees not to directly or indirectly manufacture,
market, sell or use any of the Technology outside the
Licensed Jurisdiction or in any manner not expressly authorized, permitted or
contemplated herein.
B.
Licensor's Duties
1.
The Licensor is the owner of the Technology and has the authority to grant the
license to Licensee to manufacture, produce, assemble and sell the Technology
and ancillary equipment.
(a)
Licensor is to supply preliminary drawings and engineering details on the plants
and equipment, which have been built by or built for
Licensor. Licensee will convert the drawings and prepare detailed
engineering drawings in metric dimensions at Licensee’s expense.
(b)
Licensor will review the first drawings and, as appropriate, approve them for
use in production.
2.
Notwithstanding the foregoing, the drawings shall be and remain the property of
Licensor. The use of the drawings by Licensee shall be governed in
all respects by this Agreement. Licensor shall use the drawings in
whatever manner it deems appropriate or advisable provided that such use does
not interfere directly or indirectly with Licensee's permitted activities
pursuant to this agreement.
3.
Licensor’s grant of this License to Licensee is, except as otherwise provided
herein, exclusive, and irrevocable to manufacture, market, sell, install, and
operate the Technology and
ancillary equipment in the Licensed Jurisdiction, subject only to the terms,
conditions and provisions of this Agreement.
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C.
License Conditions. The aforesaid rights are granted on the
conditions set forth below. The failure of Licensee to
observe any one of the conditions shall be both a material breach of this
Agreement and a revocation of the rights granted hereunder.
1.
All equipment incorporating the Technology shall be:
(a)
Constructed in accordance with the plans and drawings then
available;
(b)
Comply with all local laws, regulations and restrictions regarding its
construction, deployment and use; and
(c)
Utilize only materials and fabrication practices and techniques approved by
Industry standard.
2.
Licensee shall at all times perform its duties, discharge its obligations, and
comply with all the terms and conditions, including the obligation to pay
money. Licensee shall pay promptly all amounts due to Licensor
hereunder.
D.
LICENSE FEE; ROYALTY
1.
As remuneration for the rights granted under Article II and the benefits of
Licensor's scientific research activities and services to be rendered under
Article II.B, Licensee agrees to pay Licensor upon execution and delivery of
this Agreement, a license fee of U.S. $500,000.00 (Five Hundred Thousand
Dollars) to be paid as follows:
(a) $100,000.00 upon signing
of this Agreement;
(b) $100,000.00 upon delivery
of the manufacturing drawings and plans;
(c) $100,000.00 upon
the start of production;
(d) $100,000.00 within 12
months from the start of production; and
(e) $100,000.00 within 24
months from the start of production.
2.
As additional consideration for the rights granted hereunder, Licensee agrees to
pay a royalty on the sale or deployment of each item of equipment incorporating
the Technology as follows:
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(a) year one to year 10: 6% of
gross annual sales;
(b) Any renewal term: 6% of
gross annual sales.
3.
This Agreement will be automatically renewed for another 10 years upon the
herein provided terms and conditions, if the Licensee is not in default under
any of the terms or conditions set forth in this Agreement and is current with
all royalty payments.
4.
Royalties due under subparagraph II.D shall be calculated and paid monthly
within 15 days after the close of each calendar month. Licensee shall
furnish to Licensor a statement in the form provided by Licensor certified by an
officer of Licensee and India Newco.
5.
Licensor may, in its discretion, conduct an audit of Licensee's operations
including books and records related thereto no more than once in any 12 month
period during the initial term or any renewal term of this
Agreement. Licensor shall notify Licensee of the time(s) and place(s)
of such audit and Licensee shall have the right to have a representative present
during the audit.
6.
Within sixty (60) days after the termination of each calendar year during the
term of this Agreement, Licensee shall provide Licensor with a final statement,
certified by an independent certified public accountant, of Licensee's sales and
deployments during the prior year along with any payment of unpaid royalties due
on the basis of said certification. The Licensee agrees to supply
such other data to Licensor and give Licensor or its agent or designee such
access to its records as Licensor may reasonably request for verification by
Licensor of the gross sales and royalty computations. If said
verification results in a finding that the aforesaid final statement submitted
by Licensee understated the royalties due on gross sales for the period in
question by three percent (3%) or more, Licensee will pay Licensor's costs of
conducting the verification, whether by certified public accountant or
otherwise, as well as any royalties found to be due to
Licensor. Licensee will not be responsible to pay the cost of
verification if audit results are substantially the same as reported by
Licensee.
7.
If Licensee is not able or refuses to prepare and forward monthly reports to
Licensor as required by Paragraph II.D.4 or annual reports as required by
Paragraph II.D.6 above, Licensor shall have the right to send a representative
to Licensee's
facility to prepare such reports and Licensee hereby agrees to pay the
reasonable expenses of Licensor's representative in preparing such
reports.
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8. Licensor will notify
Licensee within 60 days of receiving the sales report if any more clarification
is required.
9. Time is of the
essence. Any late payments shall be subject to a late payment charge
of one and one-half percent (1- 1/2%) per month.
E.
Registrations and Infringement Actions
1.
Licensed Jurisdiction
Filings and Registrations. Licensee shall at its own expense
file with the appropriate administrative agencies of the Licensed Jurisdiction,
patent, trademark, service xxxx and copyright applications. The
parties shall assist each other in making any other filings or applications with
jurisdictions in the Licensed Jurisdiction which either party deems advisable to
protect the Technology from infringement by unauthorized persons or
entities.
2.
Licensed Jurisdiction
Patent Infringement Actions.
(a) Licensee shall promptly
advise Licensor of any claim or suit made or brought against Licensee or its
affiliates for patent infringement based on Licensee's manufacture, construction
or operation of the Technology licensed hereunder. If such
manufacture, construction or operation is in strict accordance with design,
specifications and know-how provided by Licensor and incorporated in the
Technology, then Licensor shall defend, indemnify and hold Licensee free and
harmless from all such claims, and shall reimburse Licensee for its expenses and
any damages or other sums that may be assessed in or become payable under any
final decree or judgment by any court to the extent of Licensee’s manufacture,
construction or operation referred to above.
(b)
In any such claim or suit Licensor shall have charge and direction of the
defense; Licensee shall render all reasonable assistance that may be required
and Licensee shall have the right to be represented at its own expense by
advisory counsel of its own selection. Neither Licensor nor Licensee
shall settle or compromise any such suit without the consent of the other if the
settlement or compromise obligates the other to make any payments or part with
any property or assume any obligation or grant any license or other rights or be
subject to any injunction by reason of such settlement or
compromise.
(c)
In the event that any claim or suit as defined above is brought against Licensee
then Licensor shall have the right at its own expense to make changes in the
Technology but only in the event such change would avoid the infringement and
would not
affect unfavorably the design performance of equipment incorporating the
Technology.
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III. EXCHANGE OF EXPERIENCE
AND TECHNICAL INFORMATION
1.
During the term of this Agreement, the two parties undertake to mutually
exchange, without cost, any experience, technical information, know-how,
improvements and inventions related to the Technology, patentable or not, that
they may acquire without payment to a third party. It is understood that
either party will advise the other party of improvements acquired without any
obligation of payment to a third party.
2.
All of the information on experience, technical information, know-now,
improvements and inventions referred to in this Article III shall be subject to
and treated confidentially in accordance with the confidentiality provisions of
Article V hereof.
IV.“MOST FAVORED
NATION”
If,
within seven years from the Effective Date, Licensor shall grant to another
party anywhere in the world under circumstances comparable to Licensee, a
license to manufacture, market, and sell the Technology, on more favorable
license fee or royalty terms than specified in this Agreement, then Licensor
shall promptly notify Licensee in writing of the terms of said license and
Licensee shall, at its election, be entitled to the benefit of such more
favorable license fee or royalty terms. This benefit shall apply only
to operations subsequent to the effective date of granting said more favorable
license, and only while said more favorable license fee or royalty terms are
available to the other party, and only upon Licensee accepting all other less
favorable terms which may have accompanied the more favorable license fee or
royalty terms. Licensee shall not be entitled to the return of any
license fee or royalty previously paid.
V.
CONFIDENTIALITY
1. During the term of this
Agreement, and for a period of ten (10) years thereafter, Licensee shall hold in strict
confidence all technical information and data pertaining to the Technology
supplied by Licensor, the Third Party Manufacturer, if any, and shall use it
only for the purpose of permitted activities hereunder. Licensee
shall exercise all reasonable efforts including the execution of individual
confidentiality agreements with its employees, agents and representatives to
prevent the disclosure of such information to others.
2.
In those instances where such disclosure is necessary in the construction,
alteration, operation, maintenance or repair of equipment, Licensee shall
exercise all reasonable efforts to ensure that the disclosure is made only for
such purpose
and only to a third party which has entered into an agreement with Licensee
requiring said third party to maintain the disclosure in confidence and to limit
the use of said information to the purposes provided for herein.
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3.
The foregoing provisions shall not apply to information which becomes part of
the public domain through no fault, action or inaction on the part of Licensee
or which is obtained by the Licensee from another sources.
VI. TERM AND
TERMINATION
1. Term.
This
Agreement shall become effective on the Effective Date, shall remain in effect
for ten (10) years and subject to the provisions of section VI.B, automatically
renew for ten (10) more years if not in default on either side.
2. Termination.
(a)
If Licensee becomes subject to any of the following events the license hereby
granted shall automatically terminate forthwith without any notice whatsoever
being necessary:
(i)
Licensee becomes insolvent as defined in the applicable laws of the Licensed
Jurisdiction, admits in writing its insolvency or its present or prospective
inability to pay its debts as they become due, is unable to or does not pay all
or any material portion (in number or dollar amount) of its debts as they become
due, permits or suffers a judgment to exist against it (unless enforcement
thereof is stayed pending appeal), makes or proposes an assignment for the
benefit of creditors, convenes or proposes to convene a meeting of its
creditors, or any class thereof, for purposes of effecting a moratorium upon or
extension or composition or commences, has commenced against it or proposes to
commence any bankruptcy, reorganization or insolvency proceeding, or other
proceeding under any federal, state or other law for the relief of
debtors;
(ii)
Any receiver, trustee or custodian is appointed to take possession of all or any
substantial portion of the assets of Licensee, or any committee of
Licensee's creditors, or any class thereof, is formed for the purpose of
monitoring or investigating the financial affairs of Licensee or enforcing such
creditors' rights; or
(iii)
Licensee ceases to conduct its business as the same is now contemplated in the
ordinary course of its business.
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3.
In the event this license is so terminated, Licensee, its receivers,
representative, trustees, agents, administrators, successors and/or assigns
shall have no right to sell, exploit or in any way deal with or in the
Technology except with and under the special consent and instructions of
Licensor, in writing, which Licensee shall be obligated to follow.
4.
If Licensee shall breach any representation, warranty or any of its obligations
under the terms of this Agreement, including, but not limited to, the obligation
to make timely payment of all sums payable to Licensor hereunder, if such breach
is not cured by Licensee within sixty (60) days after notice of breach by
Licensor, Licensor shall have the immediate right to terminate the license
hereby granted upon delivery of written notice to
Licensee. Notwithstanding the above, if Licensee uses the Technology
in an unauthorized manner, Licensor shall have the immediate right to terminate
this Agreement upon delivery of written notice of such termination to
Licensee.
5.
In the event of termination of this Agreement by Licensor, Licensor shall not
enter into a License Agreement with any of Licensee's contractors or
sub-contractors or their affiliated companies for the manufacture, marketing, or
sale of the Technology.
VII.
GENERAL
1.
Assignment.
This Agreement can be assigned by Licensee without the prior permission of
Licensor to India Newco, or any successor company controlled by, controlling, or
under common control with Licensee, provided that at least 51% of the equity
interest in the ultimate controlling entity shall be owned directly by
Licensee.
2.
Arbitration. Any
dispute between the parties arising under or related to this Agreement shall be
resolved by arbitration, which shall be held in Atlanta, Georgia and conducted
in accordance with the Rules of the American Arbitration
Association. Each party shall bear its own expenses of the
arbitration, except that the arbitrator's fees and costs shall be borne equally
by the parties.
3.
Severability. The
determination that any provision of this Agreement is invalid or unenforceable
shall not invalidate this Agreement, all of said provisions being inserted
conditionally on their being considered legally valid, and this Agreement
shall be construed and performed in all respects as if such invalid or
unenforceable provision(s) were omitted.
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4.
Insurance.
Licensee will be responsible to insure its operation according to the rules of
Government of India or according to the system of insurance practice in similar
industries in India.
5.
Waiver. Failure
or inability of either party to enforce any right hereunder shall not waive any
right with respect to any other or future rights or occurrences.
6.
Headings. The
headings herein are for reference only and shall not affect the construction of
this Agreement.
7.
Entire
Agreement. This Agreement constitutes the entire agreement between the
parties regarding the subject hereof and supersedes all prior or contemporaneous
agreements, understanding and communication, whether written or
oral. This Agreement may be amended only by a writing signed by both
parties.
8.
Notice. All
notices which are required or permitted to be given pursuant to the terms of
this Agreement will be in writing and will be sufficient in all respects if
given in writing and delivered personally or by overnight service with tracking
capability as follows:
If
to Licensor:
W2
Energy, Inc.
00
Xxxxxxx Xxx.
Xxxxxxx,
Xxxxxxx X0X 0X0
If
to Licensee:
Alpha
Renewable Energy LLC
0000
Xxxxxx Xxxx Xxxx
Xxxxxxx,
XX 00000
9.
Good Faith.
Licensee and Licensor agree to cooperate under this Agreement in good faith and
shall exercise all reasonable efforts to avoid disadvantages for the other
party. Should unexpectedly any disagreement or disputes result from
this Agreement both parties will do their best to settle such problems
amicably. If this is not possible, the matter shall be decided by
arbitration according to Article VIII.B hereof.
10.
Indemnification. Licensee
shall indemnify Licensor and hold Licensor harmless from and against any
obligation, cost, expense, liability or claims of whatever kind or nature,
demanded, asserted or claimed against Licensor whether in contract or tort,
relating to or arising out of or due to the Licensee’s
operation and doing in relation to operation of Licensee or India
Newco.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers as of the dates set forth below opposite their
names.
LICENSOR | |||
W2 Energy, Inc. | |||
By: | /s/ Xxxxxxx XxXxxxx | ||
Name: | Xxxxxxx XxXxxxx | ||
Title: | CEO | ||
Date: | Dec 30, 2008 | ||
LICENSEE
|
|||
Alpha Renewable Energy LLC | |||
By: | /s/ Xxxxxx Xxxxx | ||
Name: | Xxxxxx Xxxxx | ||
Title: | President | ||
Date: | Dec 30th, 2008 |
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