EXHIBIT 10.21
H Power Corp.
Agreement
AGREEMENT
AGREEMENT, made this 7th day of December, 1994, by and between
H POWER CORP., a Delaware corporation with its principal place of business at
60 Montgomery Street, Belleville, New Jersey 07109 (hereafter called "H Power"),
and Hydrogen Burner Technology, Inc., a California corporation with its
principal place of business at 1310 Logan Street, Costa Mesa, California
92626-4023 (hereafter called "HBT").
WITNESSETH;
WHEREAS, HBT represents and warrants that it has developed and
is the owner of all right, title and interest in and to an invention of an
Underoxidized Burner (hereinafter UOB-TM- for producing hydrogen from
virtually any hydrocarbon fuel without the use of catalysts and addition of
steam, although steam may have some down-stream uses; and
WHEREAS, HBT represents and warrants that it is the owner of
all right, title, and interest in and to the patents lists in Schedule A,
(all which are hereinafter called the "Patents"); and
WHEREAS, H Power desires to secure a non-exclusive license to
make, use and sell the UOB-TM- and to practice the invention disclosed in the
Patents, subject to certain terms and provisions hereinafter contained, for
use with fuel cells and in fuel cell systems only, including the right to
sublicense thereunder, and HBT is willing to grant the same upon the terms
and conditions herein set forth;
NOW THEREFORE, in consideration of the mutual covenants and
undertakings of the parties, it is hereby agreed as follows:
(1) "Invention" shall mean the invention of a UOB-TM- for
producing hydrogen from virtually any hydrocarbon fuel without the use of
catalysts and addition of steam although steam may have some uses down-stream
and any and all improvements thereto which may hereafter be owned or
controlled by Licensor, (hereafter called the UOB-TM- or "Invention").
(2) HBT hereby grants to H Power a non-exclusive world wide
license to make, have made, use, and sell the UOB-TM- and to practice the
Invention for use with fuel cells and fuel cell systems ONLY.
(3) In the event H Power has affiliates or subsidiaries, H
Power's non-exclusive license will extend to such entities; and likewise H
Power may sublicense, but only after first
1 of five pages
obtaining the approval of Licensor in writing, and at the sole discretion of
HBT.
(4) In the event of sales or use of the UOB-TM- by itself, or
as a component to anyone, H Power shall pay to HBT a royalty of 6 (six)
Percent of said Net Sales or revenue by H Power, its affiliates, subsidiaries,
divisions and sublicensees. Net Sales, as used herein, shall mean the total
invoiced amount of all sales of the UOB-TM- made to non-affiliated parties,
less cash and trade discounts, returns allowances, free goods, and
replacements, taxes (other than income taxes) applicable to such sales, and
governmental charges assumed and delivery charges borne by H Power. In the
event H Power utilizes the UOB-TM- with its fuel cells or in its fuel cell
systems, H Power shall pay to HBT a royalty of 6 (six) Percent of the selling
price of the UOB-TM- utilized by H Power with its fuel cells or in its fuel
cell systems, determined in a manner consistent with good accounting
principles.
(5) In the event H Power elects to purchase Underoxidized
Burners from HBT, the price paid by H Power for equipment, services and
warranties will be the lowest price paid by third parties for like equipment
and service provided by HBT. No royalty will be paid by H Power to HBT for
equipment purchased by H Power from HBT.
(6) H Power will pay at least 20% down for equipment ordered
by it and will make progress payments as mutually agreed upon on a monthly
basis during equipment manufacture and delivery.
(7) H Power may not contract with or sublicense to or send any
products of HBT referred to herein to any persons or entities in foreign
countries until such time as HBT has received patent protection for the
Invention and/or technology being considered in that foreign country. During
the interim period, from contract execution until the date of patent
protection in such foreign country, HBT and H Power will work together to
identify foreign patent protection necessary to internationally optimize H
Power's non-exclusive license and HBT's patent position and resolve payment
for the same.
(8) All royalties payable hereunder on Net Sales effected in
countries other than the United States shall accrue in the currency of the
country in which the sales are made at the request of HBT. H Power shall
apply its best efforts to secure U.S. dollar transfers in respect of such
royalty payments, but solely for the convenience and account and at the
expense and risk of HBT, and any and all loss of exchange value, taxes, or
other expenses incurred in the transfer or conversion of foreign currency
into U.S. dollars, and any income, remittance, or other taxes on such
royalties required to be withheld at source shall be borne exclusively and
solely by HBT. In the event U.S. dollars are for any reason legally not
available for transfer, H Power may discharge the payment obligations
hereunder by depositing said royalty payments to the credit of HBT, or its
nominee, in any
2 of five pages
recognized banking institution to be designated by HBT in the country in
which the sales are made and in the currency of that country at its then
exchange rate.
In the event that currency regulations of a country in which sales
are made prohibit payment or deposit of royalties to HBT or its nominee,
H Power shall provide for payment to HBT in the United States or through an
alternatively agreed upon method.
(9) H Power shall keep accurate records of Net Sales for at
least 3 (three) years after the close of each calendar year, unless in
dispute, in which event they shall be kept until said dispute is settled, and
such records shall be open during reasonable business hours at the place
where such records are customarily kept for examination by an independent
certified public accountant selected by HBT for the purpose of verifying the
accuracy of such Net Sales reported to HBT and enforcing payments due
thereon. If the examination is in a foreign country which has no certified
public accountant, then by accountants reasonable similar in qualifications.
Said accountant shall not disclose any information that either may thereby
obtain other than is necessary for the purpose of enabling HBT to determine
the accuracy of such reports and to enforce payments made in connection
therewith.
(10) With respect to modifications, changes, or improvements
made to the Invention by either party to this Agreement during its term, HBT
shall be the owner of all rights thereto, and if the same constitutes
inventions for which a patent may issue, H Power shall assign or compel the
assignment thereof to HBT, but is such case, H Power will have an Exclusive
License for such modifications, changes, or improvements for which a patent
issues. The party making a modification, change, or improvement to the
Invention shall have the obligation to promptly notify the other party and to
provide the other party with sufficient information for it to be able to
utilize the modification, change, or improvement in the making, using, or
selling of the UOB-TM-.
(11) If someone other than HBT secures patent protection in the
United States for the UOB-TM-, or for another similar product, so that
H Power cannot in its judgment economically or legally make or sell the
UOB-TM-, then H Power shall have the right to terminate this Agreement by
thirty (30) days notice to HBT in writing.
(12) In the event H Power has placed orders for product from HBT
and notice is given to terminate the Agreement by either party and HBT has
commenced production, HBT may finish the purchase order and deliver the same
to H Power upon payment of the balance of the purchase price COD Costa Mesa,
California.
(13) HBT hereby indemnifies and holds H Power, its subsidiaries,
affiliates, and sublicensees harmless against any and all actions, suits,
claims, or demands whatsoever, including the costs and expenses connected
therewith, which any of them may incur or become liable to pay by reason of
any claim, suit, or demand for
3 of five pages
infringement of patent because of the manufacture, use, or sale of the
UOB-TM-; provided HBT shall be promptly notified of any such action, suit,
claim, or demand before it spends any money on said claim, action, suit or
demand and shall be authorized to handle the same in its own name and/or in
the name of H Power and to settle or take such action it deems advisable. In
such case H Power will completely cooperate in supplying documents or
personal testimony required by HBT and its attorneys in its sole discretion
without charge to HBT. Such indemnity shall be credited with profits made by
H Power from sale of such UOB-TM-'s or components thereof after H Power has
been advised of such claim, suit or demand.
(14) The term of this Agreement shall be for the life of the
last of such patents and improvements thereto, on condition that H Power has
aggressively marketed the UOB-TM- with relation to fuel cells and fuel cell
systems.
(15) This Agreement embodies all the understandings and
Agreements of the parties and supersedes all prior and contemporaneous, oral
or written Agreement or understandings relating to the matters referred to
herein. This Agreement may be amended or modified only by an instrument of
equal formality signed by duly authorized officers or representatives of the
respective parties. In the event any of the provisions of this Agreement, for
any reason, shall be declared invalid, such decision shall not affect the
validity of the remaining portion, which shall remain in full force and
effect. All notices hereunder shall be given by registered or certified
mail, postage prepaid, addressed to the addresses aforementioned in this
Agreement, except as each party may change its address by written notice to
the other party. Notice may be given by FAX (Facsimile), but shall be
followed by Notice by mail, the Notice shall be effective from the date of
Faxing, or three (3) days after mailing by registered or certified mail,
whichever is sooner.
(16) Neither party shall have the right to assign this
Agreement, in whole or in part, without prior approval of the other;
provided, however, that H Power shall have the right to assign this
Agreement, in whole or in part, at any time to one of its divisions,
subsidiaries, or affiliates which is financially able to comply with the
terms of this license, and after supplying to HBT the last financial
statements of said entity, and such assignment shall not relieve H Power's
liability for performance except by consent of HBT at its sole discretion.
HBT shall have the right, upon written notice to H Power, to assign the
collection or royalties hereunder.
(17) All matters affecting the interpretations, form, validity,
and performance of this Agreement shall be decided under the laws of the
State of California.
(18) Either party may require arbitration of any controversy
between the parties under the rules and regulations of the American
Arbitration Society or some other mutually agreeable party or entity. Such
arbitration shall be pursuant to the laws of
4 of five pages
the State of California. Either party shall have full right of discovery. Any
arbitration or action at law shall commence and proceed in the County of Los
Angeles, State of California.
(19) The parties will provide each other with a certificate from
the Secretary of the Corporation to the effect that this contract was
authorized by the Board of Directors of such party at a meeting duly and
regularly held.
(20) This Agreement shall become binding and shall enure to the
benefit of the parties and their successors upon execution by both parties.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement
as of the date and year first written above.
HYDROGEN BURNER TECHNOLOGY, INC. H POWER CORP.
By: /s/ David Moard 12/7/94 By: /s/ Arthur Kaufman
----------------------------- --------------------------------
David Moard, President Arthur Kaufman, President
12/07/94
5 of five pages