TECHNOLOGY ACCESS AGREEMENT
Exhibit
10.4
This
Technology Access Agreement (the “Agreement”) is made by and between H2Diesel,
Inc., a Delaware corporation (hereinafter “H2Diesel”) and Xethanol Corporation,
a Delaware corporation (hereinafter “Xethanol”), effective as of the
15th
day of
June, 2006 (the “Effective Date”).
WHEREAS,
pursuant to an Exclusive
License Agreement dated March 20, 2006 between Xxxxxxxxxx Xxxxxxxx as Licensor
and H2Diesel
as
Licensee,
H2Diesel
is the licensee of certain intellectual property rights that relate to the
composition and manufacture of a
certain
chemical additive for use in making bio-fuel for internal combustion engines
(the “Additive”, as more fully defined below);
and
WHEREAS,
H2Diesel
and Xethanol are parties to a Sublicense Agreement entered into as of the
14th
day of
April, 2006 (the “Sublicense Agreement”), pursuant to which H2Diesel granted a
license to Xethanol with respect to intellectual property rights relating to
the
use of the Additive
in
making bio-fuel for internal combustion engines (the “Product”, as more fully
defined below);
and
WHEREAS,
as of
the date of this Agreement, the parties have agreed to amend and restate the
Sublicense Agreement (as so amended and restated, the “Amended Sublicense
Agreement”); and
WHEREAS,
Xethanol intends to construct and operate facilities to manufacture Product
using the Additive, and to invest substantial time and resources in doing so;
and
WHEREAS,
in
order to induce Xethanol to amend and restate the Sublicense Agreement and
to
construct and operate facilities for the manufacture of Product, and to ensure
Xethanol that it will be able to manufacture the Additive if H2Diesel is
unwilling or unable to do so, H2Diesel wishes to provide Xethanol with
information regarding the composition, manufacture and use of the Additive,
which information is to be received, held in confidence and used by Xethanol
on
the terms and conditions contained in this Agreement.
NOW, THEREFORE,
in
consideration of the mutual covenants and terms expressed herein, and other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Parties hereby agree, covenant, and undertake as
follows:
1. DEFINITIONS.
In
addition to other capitalized terms defined elsewhere herein, the following
terms as used in this Agreement shall have the meanings set forth below. Any
capitalized terms that are not defined herein but that are defined in the
Amended Sublicense Agreement shall have the meanings set forth in the Amended
Sublicense Agreement.
“Additive”
means a
certain chemical additive for use in making bio-fuel for internal combustion
engines, as to which the formula and intellectual property relating its
manufacture are licensed to H2Diesel
pursuant
to the Exclusive License Agreement.
“Affiliate”
means
any person or entity directly or indirectly Controlling or having the power
to
Control, or Controlled by or being under common Control with another person
or
entity.
“Amended
Sublicense Agreement”
means
the Amended Sublicense Agreement entered into between H2Diesel and Xethanol
as
of the 9th
day of
June, 2006, as amended through and including the date hereof.
“Change
of Control”
of
H2Diesel
means
(a) the sale or other disposition of all or substantially all the shares or
assets of H2Diesel,
including a sale or disposition by means of a
merger,
consolidation, reorganization or similar corporate transaction or (b) a complete
liquidation or dissolution of H2Diesel.
A“Change
of Control” does not include any transaction the purpose of which is to
reorganize the corporate structure of H2Diesel,
reincorporate H2Diesel
in
another jurisdiction or undertake any other action which does not materially
affect the ownership and control of H2Diesel
at the
time of such transaction.
“Control”
means
the direct or indirect possession of power to direct or cause the direction
of
the management or policies of such party, whether through ownership of stock
or
other securities, by contract or otherwise. Ownership of more than fifty percent
(50%) of the beneficial interest of an entity shall be conclusive evidence
that
control exists.
“Escrow
Materials”
means a
complete copy of all written materials that relate to or are or may be useful
in
connection with, the production of the Additive including, without limitation,
the formula for the Additive and all Know-How related to the production of
the
Additive, as the same now exist or as the same may exist from time to time
during the Term of this Agreement.
“Event
of Default”
means
(i) the wrongful failure by H2Diesel
to
supply Xethanol with the Additive as and when required by the Amended Sublicense
Agreement, (ii) a Change of Control of H2Diesel
in which the acquiror or resulting entity (x) is a competitor of Xethanol,
(y)
does not have a reasonably demonstrable financial capacity to perform the
obligations of H2Diesel under the Amended Sublicense Agreement, or (z) fails
to
assume in writing this Agreement and the Amended Sublicense Agreement and all
obligations of H2Diesel thereunder, or
(iii)
(x) any voluntary proceeding being commenced by H2Diesel
under
Chapter 7 of the U.S. Bankruptcy Code or (y) a voluntary proceeding under
Chapter 11 of the U.S. Bankruptcy Code (A) in which H2Diesel seeks to reject
the
Amended Sublicense or this Agreement as an executory contract or (B) after
the
commencement of which H2Diesel wrongfully fails to supply Xethanol with the
Additive as and when required by the Amended Sublicense Agreement, or (iv)
any
involuntary proceeding being commenced against H2Diesel
under
(x) Chapter 7 of the U.S. Bankruptcy Code which proceeding is not dismissed
or
stayed within thirty (30) days after commencement, or (y) under Chapter 11
of
the U.S. Bankruptcy Code (A) in which H2Diesel seeks to reject the Amended
Sublicense or this Agreement as an executory contract or (B) after the
commencement of which H2Diesel wrongfully fails to supply Xethanol with the
Additive as and when required by the Amended Sublicense Agreement.
“Exclusive
License Agreement”
means
the Exclusive License Agreement between Xxxxxxxxxx Xxxxxxxx as Licensor and
H2Diesel as Licensee, dated March 20, 2006.
“H2Diesel”
means
H2Diesel, Inc., a Delaware corporation
“Improvement”
means
any enhancement, refinement, discovery, invention, trade secret or additional
technology, whether patentable or non-patentable under the laws of any country
(including, without limitation, any test or other proprietary data, experience,
methods, processes, know-how, new apparatus, equipment, machinery, products,
specifications, designs and
information)
of or related to the Know-How, the Additive or any Product developed, conceived
or otherwise arising after the date hereof.
“Know-How”
means
technical information, including without limitation trade secrets, whether
or
not patentable, relating to, used in, or useful in connection with, the
manufacture of the Additive and the use of the Additive for production of a
Product including, without limitation, the formula for the Additive, methods
for
production of the Additive, and suggested plans and chemical plant
configurations for the manufacture of the Additive and the Product.
“License”
means
the license granted in Section 3.2 hereof.
“Licensor”
means
Xxxxxxxxxx Xxxxxxxx.
“Patent
Rights”
means
all claims of such patent applications and issued patents that are directed
to
the Additive, Know-How or Improvements (each as defined herein) hereafter filed
or issued to which H2Diesel may acquire rights during the term of this
Agreement.
“Product(s)”
means
any fuel or chemical which is manufactured using the Additive.
“Xethanol”
means
Xethanol Corporation, a Delaware corporation.
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2.
|
Delivery
of Intellectual Property to
Xethanol
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2.1.
Not
later than June 30, 2006,
H2Diesel shall deliver to Xethanol the following:
a. The
formula for the composition of the Additive, together with all information
in
its possession or under its control that relates to the manufacture of the
Additive, and
b. All
Know-How in its possession, under its control or available to it from
Licensor.
2.2. At
least
once during each semi-annual calendar period while the Amended Sublicense
Agreement is in effect, H2Diesel shall deliver to Xethanol all Improvements
made
by H2Diesel through the date of such delivery.
2.3. Within
ten (10) days after the date on which H2Diesel first delivers or uses for
commercial purposes any version of the Additive that is made by H2Diesel using
a
new or modified formula, Know-How or other information (as compared to the
formula, Know-How or other information used to make previous version of the
Additive most recently delivered or used by H2Diesel), H2Diesel shall deliver
to
Xethanol such new formula, Know-How and other information, and all Improvements
made through the date of such commercial delivery or commercial use of the
newest version of the Additive.
2.4. All
of
the materials to be delivered to Xethanol pursuant to this Paragraph 2 shall
be
delivered in written and in digital form, in such format as shall be reasonably
acceptable to Xethanol.
2.5. H2Diesel
shall provide Xethanol with a certificate of an executive officer of H2Diesel
at
any time or times as Xethanol may require, attesting that the formula,
Know-How
and
information that has been delivered to Xethanol by H2Diesel is in conformity
with the requirements of this Section 2.
| 3. |
Rights
of Xethanol.
|
3.1. Until
the
occurrence of an Event of Default, Xethanol shall have no rights in or with
respect to the Additive, Know-How, Patent Rights or Improvements, except such
rights as are granted to Xethanol under the Amended Sublicense Agreement.
Without limiting the foregoing, until the occurrence of an event of Default,
Xethanol shall not use the Know-How, Patent Rights or Improvements for any
purpose except to the extent permitted under the Amended Sublicense
Agreement.
3.2. Commencing
immediately upon the occurrence of an Event of Default and the expiration of
all
applicable cure periods, Xethanol, directly or through its controlled Affiliates
will have a License to produce and have produced solely for itself such
quantities of the Additive as Xethanol and such Affiliates need to meet their
Product supply obligations to their customers, and shall continue to be
obligated to comply with the terms of the Amended Sublicense Agreement,
including, without limitation, the obligation to pay Royalties, discounted
by
the excess costs, if any, incurred by Xethanol and such Affiliates in producing
or obtaining Additive over the price that it would have paid to H2Diesel under
the Amended Sublicense Agreement for the quantities of the Additive required
to
produce the applicable quantities of Products produced by Xethanol and its
Affiliates. If such excess costs exceed the Royalties payable under the Amended
Sublicense, then Xethanol shall, in addition to the right of set off described
above, be entitled to exercise all other legal and equitable remedies in respect
of the Event of Default giving rise to the License set forth in this Section
3.2. Xethanol shall not have the right to sell the Additive except as a
component of Product that it sells.
The term
of the License granted in this Section 3.2 shall be coextensive with the term
of
Xethanol’s right to make, have made, use and sell Products pursuant to the
Amended Sublicense Agreement.
3.3.
If an
Event of Default described in clause (iii)(x) or (iv)(x) of the definition
of
Event of Default in Section 1 of this Agreement occurs, then Xethanol is hereby
granted the right to enforce against the Licensor all rights of H2Diesel and
obligations of the Licensor under the Exclusive License Agreement insofar as
such rights and obligations relate to or affect Xethanol’s enjoyment of its
rights under the Amended Sublicense Agreement, including, without limitation,
the right to obtain indemnification for breaches of representations and
warranties of Licensor under the Exclusive License Agreement as if such
representations and warranties were made to and for the benefit of Xethanol.
4. Obligations
on Termination of License.
4.1. Promptly,
but in any event within thirty (30) business days after the termination of
the
License, Xethanol and its Affiliates shall either (a) return to H2Diesel
all
copies of all materials that have been delivered to Xethanol pursuant to the
terms of this Agreement, (b) destroy all such materials or (c) return some
of
such materials and destroy the rest. At the end of such thirty (30) business
day
period, Xethanol shall deliver to H2Diesel
a
certificate of an executive officer of Xethanol that states that all such
materials have been returned or destroyed.
4.2. Upon
termination of the License, Xethanol shall reassign the Exclusive License
Agreement to H2Diesel.
4.3. Xetrhanol
shall not use any of the materials or information provided by
H2Diesel
pursuant
to this Agreement after Xethanol is no longer entitled to make, have made,
use
or sell Products as provided in the Amended
Sublicense Agreement.
5. Ownership.
Xethanol acknowledges that H2Diesel
claims
to own or have an exclusive license under the Exclusive License Agreement to
intellectual property rights with respect to the Product, including the Patent
Rights, Know-How and Improvements. Xethanol’s rights in such intellectual
property rights are limited to those set forth in this Agreement and in the
Amended
Sublicense Agreement.
6. Confidentiality.
Xethanol
acknowledges that all information received by it from H2Diesel
concerning the Additive, including the Know-How and the Improvements,
constitutes Confidential Information belonging to H2Diesel
or
Licensor. Xethanol hereby agrees to receive all such Confidential Information
in
strict confidence and not to directly or indirectly divulge, reveal or
communicate any such Confidential Information to any person, firm, corporation
or entity whatsoever, or use, pursue or exploit any such Confidential
Information for its own benefit or for the benefit of others, except to the
extent expressly permitted by this Agreement or the Amended Sublicense Agreement
or to its employees and contractors to the extent necessary to exploit the
License and the license granted in the Amended Sublicense Agreement (and then
only if such persons have entered into written agreements to protect the
Confidential Information in the same manner and to the same extent as required
of Xethanol hereunder). Xethanol shall maintain the confidence of the
Confidential Information with the same degree of care as it uses with respect
to
its own comparable information and, in any event, with a degree of care that
is
reasonable in light of the nature of the Confidential Information.
The
foregoing restrictions shall not apply to the extent that such
information:
(i) is
or
becomes public knowledge (other than by breach of this Section);
(ii) was
obtained by the Xethanol from a third party having the right to disclose it,
without the obligation to keep such information confidential; or
(iii) is
required to be provided by law (including, without limitation, the rules and
regulations of the Securities and Exchange Commission), legal process (including
subpoena, civil investigative demand or similar process) or any regulatory
authority; provided, that Xethanol shall promptly notify H2Diesel
in
writing so that H2Diesel
may seek
a protective order and/or other motion to prevent or limit the production of
such Information.
7. Term
of the Agreement.The
Term
of this Agreement shall commence on the Effective Date and end on the date
that
Xethanol is no longer entitled to make, have made, use or sell Products as
provided in the Amended Sublicense Agreement.
8. Remedies.
Each
party acknowledges and agrees that any violation of this Agreement by the other
would result in irreparable harm to the other party. Accordingly, each party
consents and agrees that, if it violates any of the provisions of this
Agreement, the other party shall be entitled, in addition to other remedies
available to it, to an injunction to be issued by any court of competent
jurisdiction restraining it from committing or continuing any violation of
this
Agreement, without the need for posting any bond or any other
undertaking.
9. Notices. Any
notice permitted or required under this Agreement shall be in writing, and
shall
be sent or delivered to the receiving party at the address set forth below
or at
such address as either party may from time to time designate in writing.
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If
to H2Diesel, to:
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If
to Xethanol, to:
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|
H2Diesel,
Inc.
|
Xethanol
Corporation
|
|
00000
Xxxxxxxxxx Xxxx
|
1185
Avenue of the Americas, 00xx
Xxxxx
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|
Xxxx
Xxxxx, Xxxxxxx 00000
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Xxx
Xxxx, Xxx Xxxx 00000
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|
Attention:
Xxx Xxxxx, CEO
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Attention:
Xxxxxxxxxxx
x’Xxxxxx-Xxxxxx, CEO
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Telephone:
(000) 000-0000
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Telephone:
(000) 000-0000
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Facsimile:
(000) 000-0000
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Facsimile:
(000) 000-0000
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10. Severability. Should any term or provision of this Agreement be finally determined by a court of competent jurisdiction to be void, invalid, unenforceable or contrary to law or equity, the offending term or provision shall be modified and limited (or if strictly necessary, deleted) only to the extent required to conform to the requirements of law and the remainder of this Agreement (or, as the case may be, the application of such provisions to other circumstances) shall not be affected thereby but rather shall be enforced to the greatest extent permitted by law.
| 11. |
Representations
And Warranties
|
11.1. Xethanol
represents and warrants to H2Diesel
the
following:
a. It
is a
corporation duly organized, validly existing and in good standing under the
laws
of the jurisdiction of its formation, with full power and authority to execute,
deliver and perform its obligations under this Agreement.
b. The
execution, delivery and performance of this Agreement and the consummation
of
the transactions contemplated hereby by it has been duly and validly authorized
and no further authorization is required on its part to consummate the
transactions contemplated hereby.
c. This
Agreement and all other documents executed and delivered by it pursuant to
this
Agreement constitute its legal, valid and binding obligations, enforceable
against it in accordance with their respective terms.
d. The
individual executing this Agreement on its behalf has been duly authorized
and
empowered to execute this Agreement for the purpose of binding it to this
Agreement. Its performance of this Agreement does not require any third party
consents or governmental approvals, filings, registrations or permits that
have
not already been obtained. The execution, delivery and performance of this
Agreement by it does not and will not violate any contract or other arrangement
between it and any third party, or any applicable law or regulation, or infringe
or otherwise violate any third party right.
11.2. H2Diesel
represents and warrants to Xethanol the following:
a. It
is a
corporation duly organized, validly existing and in good standing under the
laws
of the jurisdiction of its formation, with full power and authority to execute,
deliver and perform its obligations under this Agreement.
b. The
execution, delivery and performance of this Agreement and the consummation
of
the transactions contemplated hereby by it has been duly and validly authorized
and no further authorization is required on its part to consummate the
transactions contemplated hereby.
c. This
Agreement and all other documents executed and delivered by it pursuant to
this
Agreement constitute its legal, valid and binding obligations, enforceable
against it in accordance with their respective terms.
d. It
either
has obtained or does not require the consent of Licensor to perform its
obligations under this Agreement and to grant the License.
e. The
individual executing this Agreement on its behalf has been duly authorized
and
empowered to execute this Agreement for the purpose of binding it to this
Agreement. Its performance of this Agreement does not require any third party
consents or governmental approvals, filings, registrations or permits that
have
not already been obtained. The execution, delivery and performance of this
Agreement by it does not and will not violate any contract or other arrangement
between it and any third party.
12. Non-Transferability.
Either
party may assign this Agreement in connection with a permitted assignment of
the
Amended
Sublicense Agreement.
| 13. |
Controlling
Law, Jurisdiction And Venue.
|
13.1. The
validity, construction, and interpretation of this Agreement shall be solely
and
exclusively governed by and construed in accordance with the laws of the State
of New York, USA, excluding any otherwise applicable rules of conflict of laws
that would cause the laws of another jurisdiction to apply.
13.2. The
courts of the State of New York shall have sole and exclusive jurisdiction
over
the parties with respect to any legal proceedings brought by either party with
respect to this Agreement.
13.3. Each
party hereby expressly consents to personal jurisdiction in the courts of the
State of New York with respect to legal proceedings involving this Agreement,
and expressly waives any right to object to such personal jurisdiction, or
the
convenience of such forum. EACH
PARTY ACKNOWLEDGES THAT A JURY TRIAL IS A CONSTITUTIONAL RIGHT BUT HEREBY WAIVES
ANY RIGHT TO A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT.
13.4. In
the
event that there is a default under this Agreement and it becomes reasonably
necessary for any party to employ the services of any attorney, either to
enforce or terminate this Agreement, with or without arbitration, the
non-defaulting party shall be entitled to collect from the defaulting party
its
reasonable attorneys fees and such other costs and expenses as are incurred
by
it in enforcing or terminating this Agreement.
| 14. |
Miscellaneous.
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14.1. Entire
Agreement. The parties hereto have read this Agreement and agree to be bound
by
all its terms. The parties further agree that this Agreement, together with
the
Amended Sublicense Agreement and the agreement entered into in connection
therewith constitutes the full,
complete
and exclusive statement of the agreements between them and supersedes all
proposals, oral or written, and all other communications between them relating
to the subject matter of this Agreement
14.2. Modifications.
No agreement changing, modifying, amending, extending, superseding, discharging,
or terminating this Agreement or any provisions hereof shall be valid unless
it
is in writing and is dated and signed by duly authorized representatives of
the
party against which enforcement is sought.
14.3. Waiver.
Failure of any of the parties hereto to enforce any of the provisions of this
Agreement or any rights with respect thereto or to exercise any election
provided for therein, shall in no way be considered a waiver of such provisions,
rights, or election or in any way to affect the validity of this Agreement.
No
term or provision hereof shall be deemed waived and no breach excused, unless
such waiver or consent shall be in writing and signed by the party claimed
to
have waived or consented. Any consent by any party to, or waiver of, a breach
by
the other, whether express or implied, shall not constitute a consent or waiver
of, or excuse for any other, different or subsequent breach. All remedies herein
conferred upon any party shall be cumulative and no one shall be exclusive
of
any other remedy conferred herein by law or equity.
14.4. Binding
Agreement. This Agreement shall be binding not only upon the parties hereto,
but
also upon their respective successors and permitted assigns.
14.5. Expenses.
Except as provided elsewhere in this Agreement, all of the legal, accounting,
and other miscellaneous expenses incurred in connection with this Agreement
and
the performance of the various provisions of this Agreement shall be paid by
the
party who incurred the expense.
14.6. Survival.
All covenants, agreements, representations, warranties, indemnities and
provisions of this Agreement which by their nature are intended survive the
termination of this Agreement shall so survive after the effective date of
termination of this Agreement.
14.7. Further
Assurances. Each party agrees to execute and deliver such other and further
documents and instruments as may be necessary to effectuate the intent and
purposes of this Agreement upon request by the other party.
14.8. Construction;
Counterparts. The headings used in this Agreement are for reference purposes
only and shall not be considered a part of this Agreement. This Agreement may
be
executed in counterparts, each of which shall be deemed to be an original and
all of which shall constitute one and the same agreement.
14.9. Force
Majeure. Neither party shall be deemed in default or otherwise liable for any
delay in or failure of its performance under this Agreement (other than the
payment of money) by reason of any act of God, fire, natural disaster, accident,
riot, terrorism, act of government, strike or labor dispute, shortage of
materials or supplies, or any other cause beyond the reasonable control of
such
party, and which cannot be reasonably circumvented by such party, provided
that
the party invoking force majeure (a) gives the other party prompt notice of
such
cause, and (b) uses its commercially reasonable best efforts to correct promptly
such failure or delay in performance.
IN
WITNESS WHEREOF,
the
Parties hereto have executed this Agreement as of the date first above
written.
H2Diesel,
Inc.
By:
/s/
Xxx Xxxxx
Xxx
Xxxxx, CEO
Xethanol
Corporation
By:
/s/
Xxxxxxxxxxx x’Xxxxxx-Xxxxxx
Xxxxxxxxxxx
x’Xxxxxx-Xxxxxx, CEO
Consent
of Licensor
The
undersigned, Xxxxxxxxxx
Xxxxxxxx, hereby consents to the provisions of Section 3.3 of the foregoing
Technology Access Agreement as of the date first above written.
/s/Xxxxxxxxxx
Xxxxxxxx
Xxxxxxxxxx
Xxxxxxxx
