STRATEGIC ALLIANCE AGREEMENT
Exhibit
10.5
[*]
INDICATES CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT AND
HAS
BEEN FILED SEPARATELY WITH THE COMMISSION
THIS
STRATEGIC ALLIANCE AGREEMENT is entered into and effective as of December
29,
2006 by and between Cummins Power Generation Inc., a Delaware corporation
(“Cummins”) and Chapeau, Inc. d/b/a BluePoint Energy, Inc., a Utah corporation
(“BluePoint”). Cummins and BluePoint are sometimes referred to herein,
individually, as a “Party” and, together, as the “Parties.”
RECITALS
WHEREAS,
Cummins has superior expertise in developing, marketing, selling, distributing,
servicing and maintaining Cummins power generation and related products
(“Cummins Products”); and
WHEREAS,
BluePoint has superior expertise in developing, financing, packaging, and
engineering combined heat and power ( “CHP”) products 1 megawatt and below;
and
WHEREAS,
BluePoint has developed expertise in marketing and funding its proprietary
discount energy purchase (“DEP”) agreements which dramatically enhance market
penetration of CHP products and projects; and
WHEREAS,
BluePoint has developed the EnviroGen™ Energy Module line of products (the
“System”) and has expertise in integrating and packaging the System; and
WHEREAS,
Cummins desires for BluePoint to integrate, manufacture and supply Systems
integrating Cummins Products exclusively, both diesel and natural gas prime
mover-based, and to be commercially co-branded as or similar to EnviroGen™
Energy Module - Powered by Cummins Inside;
and
WHEREAS,
Cummins and BluePoint desire to develop state-of-the-art “packaged” CHP
co-branded EnviroGen™ Energy Modules -
Powered by Cummins Inside
through
prime mover technology collaboration; and
WHEREAS,
Cummins and BluePoint desire to make available for sale on an exclusive basis,
except as otherwise precluded by any previous commitments, alliances or
agreements entered into by Cummins, EnviroGen™ Energy Modules - Powered
by Cummins Inside
up to 1
megawatt in packaged size through Cummins’s worldwide distribution network;
and
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WHEREAS,
the Parties will mutually benefit from this Agreement due to the additional
credibility, product availability and revenues achieved; and
WHEREAS,
Cummins and BluePoint desire to enter into this Agreement to formalize a
joint
strategic relationship;
NOW,
THEREFORE, in consideration of the obligations herein made and undertaken,
the
Parties, intending to be legally bound, covenant and agree as
follows:
1. Cummins
Obligations.
Cummins
shall have the following obligations under this Agreement:
(a) Integration
Assistance.
Cummins, either directly or through a Cummins authorized designee, will provide
[*] assistance related to integration of Cummins Products into the
System.
(b) Technical
Training.
Cummins
, either directly or through a Cummins authorized designee, will provide
technical training to BluePoint personnel with respect to Cummins Products.
[*]
(c) Marketing
Activities.
Cummins
will assist in activities to jointly co-brand and market the Systems through
targeted members of distribution and support network of Cummins. Marketing
assistance will be provided through Cummins for applications suitable for
the
BluePoint System. [*]
(d) Service
and Maintenance Activities.
Cummins
will assist, either directly or through a Cummins authorized designee, in
activities to service, maintain and support the [*] Systems, under a separately
negotiated maintenance agreement, throughout the distribution and support
network of Cummins. During the [*] first 12 months of this Agreement, Cummins
Service and Maintenance obligations will be limited to the [*] unless authorized
earlier by Cummins. Furthermore, [*]BluePoint will use its best commercially
reasonable effort to identify geographies in which the System will be deployed.
[*]
(e) Supply
Cummins Products to BluePoint [*].
Cummins
will use its best commercially reasonable efforts to provide to BluePoint
certain Cummins Products [*]
(f) Key
Cummins Personnel.
Key
Cummins personnel will initially include [*] and [*]; or their designees
and
other senior management personnel as required.
2. BluePoint
Obligations.
BluePoint shall have the following obligations under this
Agreement:
(a) Financing
Activities.
BluePoint will use its best commercially reasonable efforts to promote and
enable the BluePoint DEP model for those customers referred to BluePoint
by
Cummins or members of the distribution and support network of Cummins that
prefer not to undertake the capital investment to build, own, operate and
maintain the System.
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(b)
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[*]
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(c) Manufacturing.
BluePoint will assemble, manufacture and package Systems incorporating Cummins
Products exclusively. [*]BluePoint will deliver Systems incorporating
exclusively Cummins Products to Cummins distributors and dealers [*]
(d) Technical
Training.
BluePoint will provide technical training and marketing materials with respect
to the Systems to Cummins personnel.
(e) Marketing
Activities.
In
addition to BluePoint’s own internal sales efforts, BluePoint will also assist
in activities to jointly market the System and related cogeneration products,
services and support as requested by Cummins and/or Cummins distributors
.
(f) Evaluate
Cummins Products.
BluePoint will assess Cummins Products [*]
(g Purchase
Estimates.
BluePoint will provide for the 24-month period subsequent to the effective
date
of this Agreement purchase estimates of all prime movers as set forth in
Exhibit
A attached hereto and a part hereof. [*]
(h) Key
BluePoint Personnel.
Key
BluePoint personnel will initially include Xxx X. Xxxxxxxx, Chief Executive
Officer of BluePoint and Xxxxxx X. Xxxxxxx, Executive Vice President or their
designees and other senior management personnel as required.
3. Contact
Persons.
Each of
Cummins and BluePoint shall designate a contact person for purposes of
monitoring performance of each Party under this Agreement. Initially, the
contact person for Cummins will be [*]and the contact person for BluePoint
will
be Xxx X. Xxxxxxxx.
4. [*]
Installation.
[*] The
Parties agree that no integrated CHP System, as contemplated by this Agreement,
will be commissioned for commercial sale and installation unless both Parties
approve the readiness of the product for the proposed application and
installation.
5. Exclusive
Alliance.
During
the term of this Agreement, neither Cummins, nor BluePoint, nor their respective
affiliates or subsidiaries will enter into a similar joint strategic agreement
with any competitor of the other Party for the sole purpose of developing
packaged CHP products up to 1 megawatt in packaged size without prior written
consent of the other Party. [*]
6. Relationship
of the Parties.
The
relationship of Cummins and BluePoint is solely that of independent contractors,
and nothing in this Agreement shall be construed to (i) give either party
the
power to direct and control the day-to-day activities of the other or (ii)
constitute the parties as joint venturers, co-owners or otherwise as
participants in a joint or common undertaking or (iii) make either party
an
agent of the other for any purpose whatsoever.
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7. Protection
of Confidential Information.
The
Parties acknowledge and agree that they are bound and shall continue to be
bound
by the terms of that certain Mutual Nondisclosure Agreement dated October
27,
2006 by and between Cummins and BluePoint and that such Nondisclosure Agreement
shall continue in full force and effect for so long as this Agreement has
not
been terminated.
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8.
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Intellectual
Property
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8.1
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DEFINITIONS
|
A. “Intellectual
Property” means any inventions, ideas, discoveries, developments, improvements,
innovations, and know-how, whether or not patentable; copyrightable works,
such
as reports, databases, and documentation; trade secrets; such as software;
including source code and object code; compositions of matter; procedures;
and
experimental results.
B. “Background
Intellectual Property” means all Intellectual Property developed, conceived, or
controlled by a Party or their respective employees, agents, or contractors
that
was developed prior to the effective date of this Agreement, prior to or
separate from the Program, and is necessary to utilize or otherwise practice
the
BLUEPOINT Technology or CUMMINS Technology, as applicable. All Background
Intellectual Property is and shall remain the separate intellectual property
of
the Party who developed, conceived, or controlled it.
C. “BLUEPOINT
Reserved Intellectual Property” means all Intellectual Property developed,
conceived, or made by the Parties or their employees, agents, or contractors,
whether alone or in concert, whether or not conceived, made, or developed
during
working hours, solely in connection with and under the Program, but which
expressly excludes any Intellectual Property pertaining to:
i.
packaging
combined heat and power systems; and
ii. non-generator
interfaces from combined heat and power systems;
D. “CUMMINS
Reserved Intellectual Property” means all Intellectual Property developed,
conceived, or made by the Parties or their employees, agents, or contractors,
whether alone or in concert, whether or not conceived, made, or developed
during
working hours, solely in connection with and under the Program limited to
that
Intellectual Property pertaining to:
i. generators;
ii. interfaces
to generators;
iii. engines
and technologies associated with G-Drive engines;
iv. generator
technology necessary for all applications not part of the Program;
and
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v. Any
other
information or technology not otherwise set forth hereinunder in Program
Intellectual Property or Jointly Developed Intellectual Property.
E. “CUMMINS
Technology” means all Intellectual Property disclosed by CUMMINS under this
Agreement, including but not limited to materials, compositions, or products
developed therefrom, whether in existence prior to the effective date of
this
Agreement or subsequently developed by Cummins independent of BLUEPOINT,
including all Background Intellectual Property of the CUMMINS and CUMMINS
Reserved Intellectual Property, or cooperatively with BLUEPOINT under this
Program excluding any BLUEPOINT Intellectual Property or BLUEPOINT Technology
F. “BLUEPOINT
Technology” means all Intellectual Property disclosed by BLUEPOINT under this
Agreement, including but not limited to materials, compositions, or products
developed therefrom, whether in existence prior to the effective date of
this
Agreement or subsequently developed by BLUEPOINT independent of CUMMINS,
including all Background Intellectual Property of BLUEPOINT and BLUEPOINT
Reserved Intellectual Property, or cooperatively with CUMMINS under this
Program.
G. “Jointly
Developed Intellectual Property” means all Intellectual Property jointly
developed, conceived, or made by the Parties or their employees, agents,
or
contractors, whether or not conceived, made, or developed during working
hours,
solely in connection with and under the Program limited to that Intellectual
Property created under the Program, such as all designs, plans, reports,
specifications, drawings, schematics, prototypes, models, inventions, work
in
progress and all other information and items made during the course of this
Agreement arising solely from the services performed pursuant to this Agreement
which may or may not be incorporated in the Product, exclusive of any CUMMINS
Intellectual Property, CUMMINS Technology, BLUEPOINT Intellectual Property,
BLUEPOINT Technology and any Background Intellectual Party of either of CUMMINS
or BLUEPOINT.
H. “Product”
shall
mean the prototypes and resulting developed offering readied for commercial
use
by BLUEPOINT resulting under the Program inclusive of components under the
relevant Cummins Products and
parts
list which will support the Program and which shall be produced and offered
for
sale by the Cummins distribution channel.
I. “Program”
shall mean the process under which joint development work and product
improvement work will be performed for the purpose of creating or improving
the
interface between a Cummins Product and a CHP System, as contemplated by
this
Agreement.
8.2.
Communications.
The
Parties agree to communicate to one another all Intellectual Property created
under the Program, and agree to grant one another and their affiliates an
irrevocable, non-exclusive, fully-paid up, royalty free license to make,
have
made, use, sell, and lease the Jointly Developed Intellectual Property,
including the right to make derivate works of or have made derivative works
of
the Jointly Developed Intellectual Property, and each shall execute or cause
its
employees, contractors or subcontractors to execute any and all reasonable
documents which may become necessary for the Parties to utilize, assign or
otherwise cause this license or the underlying rights therein to be available
to
the other.
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8.3.
Markings.
The
Parties agree to xxxx and attribute all drawings, graphics, technical analyses,
models, prototypes, writings, computer programs, algorithms, and other materials
developed under the Program, which are not otherwise CUMMINS Technology or
BLUEPOINT Technology, to the extent possible, as:
a.
“Confidential and Proprietary Information” to their respective Party owner in
accordance with the Program and the definitions hereunder.
8.4
Covenant
Not to Xxx.
The
Parties agree that neither they nor any of their employees or subcontractors
will xxx the other, the other’s customers, or the other’s suppliers for
infringement of patents, copyrights, trade secrets or other proprietary rights
of the other arising from the sale or use of Product(s) or processes utilizing
the Product(s), but only where the Product(s) is made, sold, offered or used
in
an authorized manner expressly set forth hereinunder. The covenants of this
paragraph expressly exclude any unauthorized activities, any non-Program
related
activities including any “aftermarket” products, and/or activities involving
portions, components, combinations, improvements, and derivative works of
Product(s) not otherwise expressly reserved elsewhere herein.
8.5
No
Infringement of 3rd
Parties.
The
Parties agree that they will not knowingly infringe and are unaware of any
actual or alleged claim for infringement for the patent, copyright or trade
secret rights of any third parties in the performance of this Agreement,
and
agree to advise the other in writing within thirty (30) days of being or
first
becoming knowledgable if one is, or becomes, aware that the other’s role,
participation, development or use of any aspect of the Program would violate
the
intellectual property rights of a third party.
8.6
No
Disclosure.
Each
Party agrees not to disclose to any third party, or use, except in connection
with the Program, any confidential information disclosed by the other Party
relating to processes, products, equipment or trade secrets, as well as
confidential information resulting from the Program. Any information not
available to the public shall be considered confidential for the purposes
of
this Agreement; but should any of this information be published or otherwise
made available to the public by a Party or by third parties without breach
of
this Agreement, each Party shall be free to use for its own purposes that
information which is actually publicly available.
a. Except
for internal purposes, each Party further agrees that it will not utilize
any of
the work product developed by the other that is expressly and directly related
to Jointly Developed Intellectual Property herein on behalf of any party
other
than themselves
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8.7.
Return
of
Party Property. Excepting that which may be applicable to Jointly Developed
Intellectual Property, all materials including, without limitation, documents,
drawings, physical and electronic models, sketches, designs, computer tapes
and
disks, and lists furnished by one Party to the other, shall remain the property
of the furnishing Party and shall be returned promptly upon completion of
the
Program by the receiving Party or at any time upon written request by the
furnishing Party. Except as may be provided elsewhere in this Agreement,
the
Parties agrees not to make any copies of such materials without the other’s
permission, and to return all copies with the original materials and delete
all
electronic versions of such materials. The Parties shall be permitted to
make a
reasonable number of internal copies for each of their use required in their
performance of this Agreement.
8.8
Jointly
Owned IP.
The
Jointly Developed Intellectual Property shall be jointly and equally owned
by
the Parties where each Party shall equally contribute to the costs associated
with any formal protections (i.e., patent applications, etc.) associated
therewith. [*]
8.8
Miscellaneous.
|
a.
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The
Parties shall not be financially accountable to the other for costs
associated with the development or protection of any their individually
owned intellectual property rights.
|
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b.
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Neither
Party grants to the other any license to or in any Intellectual
Property
or Technology not otherwise expressly set forth
herein.
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c.
|
The
Parties agree that each Party may independently and freely make
improvements, make, have made, sell, offer for sale, and otherwise
transfer their respective Technology and Intellectual Property
without
restriction.
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d.
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The
Parties shall mutually agree, within thirty (30) days after execution
of
this Agreement, to establishing a formal process in the Program
for
creating and providing for adequate intellectual property protection
and
associated costs with the process.
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e.
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Records
and Reports.
The Parties agree to keep and maintain adequate and current records
of all
Jointly Developed Intellectual Property made by themselves (in
the form of
notes, sketches, drawings or other means as may be specified by
the
Parties) for a period of five years after termination of this Agreement
which records shall be available to and remain the sole property
of
BluePoint at all times.
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f.
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Parties
Assistance.
Parties further agree as to all Jointly Developed Intellectual
Property to
reasonably assist one another in the creation and execution of
formal
intellectual property protections.
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9.
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Term
and Termination.
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(a) This
Agreement will commence on the date first written above and will continue
until
the earlier of (i) December 29, 2011, unless one Party delivers a notice of
termination to the other Party not later than thirty (30) days prior to such
termination date or yearly anniversary thereafter, or (ii) termination as
provided below.
(b) Either
Party may terminate this Agreement upon thirty (30) days written notice to
the
other Party if such other Party refuses to, is unable to perform or is in
breach
of any material provision of this Agreement; provided however that such noticed
Party shall have a period of thirty (30) days to cure performance deficiency
or
breach per such notice.
(c) Upon
any
such termination of this Agreement all rights and duties of the Parties toward
each other shall cease except: Section 7 (Protection of Confidential
Information), Section 8 (Ownership of Intellectual Property), Section 10
(Returning Documents) and Section 11 (Indemnification) shall survive termination
of this Agreement.
(d) This
Agreement shall be predicated upon [*]EnviroGen™ Energy Module [*]that shall
meet the application performance standards established by Cummins.
[*]
10.
Returning
Documents.
Each
Party agrees that, upon termination of this Agreement, it shall deliver to
the
other Party or Parties (and will not keep in its possession or deliver to
anyone
else) any and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any of the
aforementioned items belonging to such other Party, its successors or assigns.
11.
Indemnification.
Each
Party (the “Indemnifying Party”) shall indemnify, defend and hold harmless, the
other Party and its affiliates, officers, directors, employees and shareholders
(collectively, the “Indemnified Party”) against and in respect of any and all
damages, losses, claims, penalties, liabilities, costs and expenses (including,
without limitation, all fines, interest, reasonable legal fees and expenses
and
amounts paid in settlement), that arise from or relate or are attributable
to
any breach of any representation, warranty, covenant or agreement on the
part of
the Indemnifying Party in this Agreement. Promptly after the assertion of
any
claim by a third party or occurrence of any event which may give rise to
a claim
for indemnification from the Indemnifying Party, the Indemnified Party shall
notify the Indemnifying Party in writing of such claim. The Indemnifying
Party
shall have the right to assume the control and defense of any such action,
provided,
that
the Indemnified Party may participate in the defense of such action subject
to
the Indemnifying Party’s reasonable direction and at the Indemnified Party’s
sole cost and expense. The Party contesting any such claim shall be furnished
all reasonable assistance in connection therewith by the other Party and
be
given full access to all information relevant thereto. In no event shall
any
such claim be settled without the Indemnifying Party’s consent.
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12.
Representations
and Warranties.
Each
Party hereby represents and warrants to the other Party as follows:
(a) Corporate
Status.
Such
Party is a corporation duly incorporated, validly existing, and in good standing
under the laws of its state of incorporation, and has all requisite corporate
power and authority to own, operate and lease its properties and to carry
on its
business as and in the places where such properties are now owned, operated
and
leased or such business is now being conducted.
(b) Authorization;
Validity.
When
executed and delivered by such Party, this Agreement will constitute the
valid
and legally binding obligation of such Party, enforceable against such Party
in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization and moratorium laws and other laws of general application
affecting the enforcement of creditors' rights generally and general principles
of equity.
(c) No
Conflict.
The
execution, delivery and performance of this Agreement do not and will not
violate any material agreements to which such Party is a party.
(d) Approvals
and Consents.
No
action, approval, consent or authorization, including, but not limited to,
any
action, approval, consent or authorization by any governmental or
quasi-governmental board, agency, commission, bureau, or instrumentality
is
necessary or required in order to constitute this Agreement as the valid,
binding and enforceable obligation of such Party in accordance with its
terms.
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13.
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Miscellaneous.
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(a) Entire
Agreement.
This
Agreement, together with the exhibits attached hereto, if any, constitutes
the
entire agreement between the BluePoint and Cummins relating to the subject
matter hereof and supersedes all prior, written or oral negotiations,
representations or agreements. No modification of this Agreement shall be
binding on any Party unless it is in writing and signed by all Parties.
(b) Severability.
The
provisions of this Agreement are severable, and if one or more provisions
are
judicially determined to be illegal or otherwise unenforceable, in whole
or in
part, the remaining provisions or portions of this Agreement shall nevertheless
be binding on and enforceable by and between the Parties hereto.
(c) Assignment.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
assigns of the Parties hereto.
(d) Governing
Law.
The
rights and obligations of the Parties to this Agreement shall be governed
by and
construed in accordance with the laws of the State of Indiana, without regard
to
its conflict of laws, rules or provisions.
(e) Heading.
Section
headings are for convenience of reference only and shall not be considered
in
the interpretation of this Agreement.
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(f) Unavoidable
Delays.
Either
Party shall be excused for any delays or defaults in the performance of this
Agreement (except the payment of amounts due and payable hereunder) unavoidably
caused by the act of the other, the act of any agent of the other, the act
of
any governmental authority, acts of God, the elements, war, litigation, strikes,
walkouts, or any other cause beyond its reasonable control. Each Party shall
use
all reasonable diligence to avoid any such delay or default and to resume
performance under this Agreement as soon as practicable after such delay
or
default.
(g) Notices.
All
notices and other communications required or permitted hereunder shall be
in
writing and shall be deemed effectively given upon personal delivery or on
the
day sent by facsimile transmission if a true and correct copy is sent the
same
day by first class mail, postage prepaid, or by dispatch by an internationally
recognized express courier service, and in each case addressed as
follows:
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If
to Cummins:
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Cummins
Inc.
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[*]
Attn:
Senior Counsel for Power Generation
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If
to BluePoint:
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Chapeau,
Inc.
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d/b/a
BluePoint Energy, Inc.
0000
Xxxxxxx Xxxx, Xxxxx 0
Xx
Xxxxxx
Xxxxx, Xxxxxxxxxx 00000
(h) Counterparts.
This
Agreement may be executed in one or more counterparts, and when so executed
each
counterpart shall be deemed to be an original, and said counterparts together
shall constitute one and the same instrument.
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IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date
first above written.
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CUMMINS
POWER GENERATION INC.
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By:
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[*]
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Name:
[*]
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Title:
[*]
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CHAPEAU,
INC.
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D/B/A
BLUEPOINT ENERGY, INC.
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By:
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/s/ Xxx X.
Xxxxxxxx
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Name:
Xxx X. Xxxxxxxx
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Title:
Chief Executive Officer
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by
and between
Cummins
Power Generation Inc. and
Chapeau,
Inc. dba BluePoint Energy, Inc.
December
29, 2006
Exhibit
A
Engine
Purchase Estimates
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Period
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Projected Megawatts(1)(2)
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[*]
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[*]
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[*]
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[*]
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[*]
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[*]
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[*]
|
[*]
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[*]
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[*]
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[*]
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[*]
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[*]
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[*]
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(1)
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Estimated
megawatt demand in connection with projects projecting to close
during the
noted period.
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(2)
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The
demand for the projected megawatts is anticipated to be filled
by a
combination of [*]engines, the distribution [*]to be dependent
upon actual
site specifications and project configurations.
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