AMENDED CYLINDER LICENSE AGREEMENT
NORMAN C. FAWLEY AND
NCF INDUSTRIES, INC.,
LICENSOR,
AND
NATURAL GAS VEHICLE SYSTEMS, INC.,
LICENSEE,
AND
CNG CYLINDER CORPORATION,
AS WITHDRAWING LICENSEE.
TABLE OF CONTENTS
Page
Introduction Information .................................................... 1
ARTICLE I DEFINITIONS
- ---------
1.1 Affiliate ........................................................... 2
1.2 Caithness/NCF ....................................................... 2
1.3 CNG Corp. ........................................................... 2
1.4 CNG L.P. ............................................................ 2
1.5 Confidential Data ................................................... 2
1.6 Effective Date ...................................................... 3
1.7 Fawley .............................................................. 3
1.8 Fawley Technology ................................................... 3
1.9 Improvement Patents ................................................. 3
1.10 License ............................................................. 3
1.11 License Agreement ................................................... 3
1.12 Licensed Products ................................................... 3
1.13 Licensed Territory .................................................. 3
1.14 Licensee ............................................................ 3
1.15 Licensor ............................................................ 4
1.16 NCF ................................................................. 4
1.17 NGVSI ............................................................... 4
1.18 Original Agreement .................................................. 4
1.19 Patent Rights ....................................................... 4
1.20 Returned Technology ................................................. 4
1.21 Secrecy Agreement ................................................... 4
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1.22 Settlement Agreement ............................................... 4
1.23 Sublicense Agreement ............................................... 4
1.24 Term ............................................................... 4
1.25 Termination Agreement .............................................. 5
1.26 Withdrawing Licensee ............................................... 5
ARTICLE II AMENDMENT OF THE LICENSE
- ----------
2.1 Replacement of Original Agreement ................................. 5
2.2 Grant of Exclusive License and Limitations ........................ 5
2.3 Licensor Covenant ................................................. 6
2.4 Purposes .......................................................... 6
2.5 Limitations ....................................................... 6
2.6 Cooperation by Licensor and Licensee .............................. 6
2.7 Acceptance ........................................................ 7
ARTICLE III FORBEARANCE AND REPRESENTATIONS
- -----------
3.1 Forbearance ....................................................... 8
3.2 Fawley's Acknowledgment of Representations ........................ 8
3.3 NGVSI's Acknowledgement of Representations ........................ 9
3.4 CNG Corp. Representations ......................................... 9
ARTICLE IV LICENSE FEES
- ----------
4.1 Amount ............................................................ 10
4.2 Liability of Licensee for Fees on Termination ..................... 11
4.3 License Fee Statements ............................................ 11
ii
ARTICLE V DURATION AND TERMINATION
- ---------
5.1 Length of License ................................................ 12
5.2 Default, Termination and Notice .................................. 12
5.3 Duties on Termination ............................................ 12
5.4 Rights on Termination ............................................ 12
ARTICLE VI ASSIGNMENT OF LICENSE
- ----------
6.1 Limitations ....................................................... 13
ARTICLE VII CONFIDENTIAL OBLIGATIONS
- -----------
7.1 Confidentiality and Limitations ................................... 13
7.2 Right to Disclose ................................................. 14
7.3 Secrecy Agreement ................................................. 14
ARTICLE VIII IMPROVEMENTS
- ------------
8.1 ......................................................................... 14
ARTICLE IX PROSECUTION AND MAINTENANCE
- ---------- OF PATENT APPLICATIONS AND PATENTS
9.1 ......................................................................... 14
ARTICLE X DEFENSE OF LICENSED PATENTS
- ---------
10.1 ........................................................................ 16
10.2 ........................................................................ 17
ARTICLE XI EXPORT
- ----------
11.1 ........................................................................ 17
ARTICLE XII SUCCESSORS AND ASSIGNS
- -----------
12.1 ........................................................................ 17
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ARTICLE XIII NOTICES
- ------------
13.1 ........................................................................ 17
ARTICLE XIV WAIVERS
- -----------
14.1 ........................................................................ 18
ARTICLE XV SEVERABILITY
- ----------
15.1 ........................................................................ 19
ARTICLE XVI ARBITRATION OF DISPUTES
- -----------
16.1 ........................................................................ 19
ARTICLE XVII ATTORNEY'S FEES
- ------------
17.1 ........................................................................ 20
ARTICLE XVIII CAPTIONS
- -------------
18.1 ........................................................................ 20
ARTICLE XIX GOVERNING LAW
- -----------
19.1 ........................................................................ 20
ARTICLE XX CONFIRMATION AND ACKNOWLEDGMENT
- ----------
20.1 ........................................................................ 20
EXHIBIT 1.12 PORTFOLIO OF LICENSED PRODUCTS
EXHIBIT 1.12(A) RETURNED TECHNOLOGY
EXHIBIT 1.22 AGREEMENT OF MARCH 4, 1993
EXHIBIT 2.2(B) RESERVED RIGHTS OF LICENSOR
EXHIBIT 2.2(C) POTENTIAL DISPUTE
EXHIBIT 2.6(A) NCF INDUSTRIES SECRECY AGREEMENT
EXHIBIT 2.6(B) CNG CYLINDER CORPORATION SECRECY AGREEMENT
iv
AMENDED CYLINDER LICENSE AGREEMENT
THIS AGREEMENT made as of the 25th day of May, 1993 by and among NORMAN C.
FAWLEY ("Fawley") and NCF INDUSTRIES, INC. ("NCF"), as their interests may
appear, individually and collectively as Licensor
-and-
NATURAL GAS VEHICLE SYSTEMS, INC. ("NGVSI"), as Licensee, CNG CYLINDER
CORPORATION ("CNG Corp."), a California corporation, as Withdrawing Licensee
-and-
CAITHNESS/NCF COMPANY ("Caithness/NCF") and CAITHNESS RESOURCES, INC., a New
Jersey corporation.
WITNESSETH THAT:
1. On February 9, 1990, Fawley, as licensor, executed and delivered that
certain license agreement (the "Original Agreement") to CNG Corp. as licensee.
2. On February 9, 1990, CNG Corp., as sublicensor, executed and delivered
to CNG Cylinder Company of North America, L.P. ("CNG LP"), as sublicensee, that
certain sublicense agreement (as amended on March 25, 1991, pursuant to which
Fawley and CNG Corp. agreed to expand CNG LP's sublicense to a worldwide
sublicense, collectively referred to as the "Sublicense Agreement").
3. On May 25, 1992, by consent of Fawley and CNG Corp., and by reason of
the execution, delivery and implementation of CNG LP's Plan of Reorganization of
even date therewith, NGVSI assumed all rights, duties and obligations of CNG LP
arising under the Sublicense Agreement.
4. Each of Fawley, CNG Corp., and NGVSI desire to (i) amend the Original
Agreement in the manner herein set forth and (ii) cause the Sublicense Agreement
to be replaced and superceded by this License Agreement.
NOW THEREFORE, in consideration of the covenants and agreements contained
in this License Agreement, Fawley, NCF, CNG Corp., NGVSI, Caithness Resources,
Inc. and Caithness/NCF agree as follows:
1
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms are defined terms and shall
have the meaning attributed to them:
1.1 "Affiliate" means any person or entity related to either Licensor or
Licensee in such a way that either Licensor or Licensee or such person or entity
directly or indirectly controls or is controlled by or is under common control
with the other. For this purpose "control" means the power, direct or indirect,
to direct or cause direction of management and policies through ownership of
voting securities, contracts, voting trusts or otherwise.
1.2 "CAITHNESS/NCF" shall mean Caithness/NCF Company, a joint venture
formed under the laws of the State of California pursuant to a Joint Venture and
License Agreement dated October 11, 1989, as amended and restated by the Amended
and Restated Joint Venture and License Agreement dated February 9, 1990 which
Agreement is being terminated concurrently herewith.
1.3 "CNG Corp." shall mean CNG Cylinder Corporation, a California
corporation, and as further described on page 1.
1.4 "CNG LP" shall mean CNG Cylinder Company of North America, L.P., a
Delaware limited partnership, and as further described on page 1.
1.5 "Confidential Data" shall mean all transferable technical information,
including but not limited to, data, reports, programs, methods, tapes, recorded
notes, computer-generated data, tests, studies and other written documents or
computer programs, and any and all other information embodied in a tangible form
relating to the Fawley Technology or Licensed Products licensed pursuant to this
License Agreement and disclosed to the nontransferring party in tangible form.
Such technical information, data and other items referenced in the preceding
sentence shall be deemed to be "confidential" within the meaning hereof when,
and so long as, it relates to the Fawley Technology or Licensed Products and
applications thereof; is not in the possession of the transferring party without
binder of secrecy prior to the disclosure thereof (except in the event same is
wrongfully obtained by, or wrongfully disclosed to, the transferring party); or
is not then and does not become part of the public knowledge and literature
through the fault of the transferring party; or is not thereafter received from
a third party other than an Affiliate without binder of secrecy. For purposes
hereof, Confidential Data shall also mean all such information, data and other
items referenced in the first
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sentence of this Section 1.5 which relate to the Fawley Technology or Licensed
Products, which information, data and other items are developed by Licensor or
Licensee during the Term.
1.6 "Effective Date" of this License Agreement shall be the date upon which
it is made as set out in the introductory language of this License Agreement.
1.7 "Fawley" means Norman C. Fawley, an individual having a principal place
of business located at 2320 Cherry Industrial Circle, Long Beach, California
90805.
1.8 "Fawley Technology" shall mean the know-how of Licensor or NCF,
including, but not limited to, confidential manufacturing techniques,
copyrights, claims, trade secrets, manufacturing information, equipment designs,
technical assistance, data, design information relating to, associated with or
now existing or hereafter created with respect to the Licensed Products defined
in Section 1.12 (i) and (ii).
1.9 "Improvement Patents" shall mean any patentable modification of the
Fawley Technology or Licensed Products.
1.10 "License" means the license by Fawley and NCF to NGVSI referred to in
Section 2.2.
1.11 "License Agreement" means this Amended Cylinder License Agreement as
it may be amended from time to time, together with all exhibits to it, which are
incorporated herein by this reference.
1.12 "Licensed Product(s)" means any and all products or processes now
existing or hereinafter developed or acquired, using the Fawley Technology
related to: (i) Composite Reinforced Cylinders and Tubes; and (ii) all
supplements, enhancements, replacements, by-products and proceeds of the
Licensed Product identified in a portfolio delivered by Licensor to CNG Cylinder
Corporation as licensee under the Original Agreement, which portfolio contains a
detailed, functional description of the Licensed Products and is attached as
Exhibit 1.12 hereto and made a part hereof which together with this description
constitutes the Licensed Products, except as modified by the Settlement
Agreement.
1.13 "Licensed Territory" means the entire world and all nations,
countries, territories, states and areas therein contained.
1.14 "Licensee" means NGVSI and its permitted assigns.
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1.15 "Licensor" means Norman C. Fawley and NCF Industries, Inc., as their
interests may appear, individually and collectively.
1.16 "NCF" means NCF Industries, Inc., a California corporation having its
principal place of business at 2320 Cherry Industrial Circle, Long Beach,
California 90805.
1.17 "NGVSI" means Natural Gas Vehicle Systems, Inc., a Delaware
corporation having its principal place of business at 2250 Cherry Industrial
Circle, Long Beach, California 90805.
1.18 "Original Agreement" has the meaning ascribed to it in Section 1 on
page 1.
1.19 "Patent Rights" means, to the extent and only to the extent licensed
to Licensee, all rights to and in patent applications filed in any Country in
the world and patents issuing in any country in the world to Licensor which
pertain to the Licensed Products, or patents under which Licensor or any
Affiliate of Licensor has rights that cover, or any claim thereof that covers
the Fawley Technology or Licensed Products, and any continuation, divisional or
reissue applications with respect thereto.
1.20 "Returned Technology" shall have the meaning ascribed to it in Exhibit
l.12A of which each section thereof is related to this License Agreement except
for Section 3.
1.21 "Secrecy Agreement" shall mean the secrecy agreements referred to in
Section 2.6(A) and shall be applicable as referred to in the context of this
License Agreement.
1.22 "Settlement Agreement" shall mean the Agreement dated March 4, 1993
and the signatories thereto including Fawley, NCF and NGVSI as set forth in
Exhibit 1.22 hereto and made a part hereof as amended in part by Exhibit l.12A
("Returned Technology") which exhibit has pertinence to this License Agreement.
1.23 "Sublicense Agreement" has the meaning ascribed in Section 2 on page
1.
1.24 "Term" The Term of this License Agreement shall be measured from
February 9, 1990 and shall continue until the later of (i) fifteen years after
such date or (ii) until termination of any commercial sales, manufacturing,
distribution, licensing or sublicensing of Licensed Products commenced within
fifteen years of February 9, 1990, each subject to earlier termination as
hereinafter set forth. Notwithstanding any provision hereof to the contrary, in
the event of termination of this License
4
Agreement, the License granted in Section 2.2 hereof shall terminate in
accordance with the provisions hereof.
1.25 "Termination Agreement" shall mean that certain Termination Agreement
executed and delivered on even date herewith.
l.26 "Withdrawing Licensee" shall mean CNG Corp.
ARTICLE II
AMENDMENT OF THE LICENSE
2.1 Replacement of Original Agreement. Licensor and Licensee agree to and
hereby do amend and restate the Original Agreement as herein set forth. CNG
Corp. hereby withdraws as a licensee under the Original Agreement. Licensor,
Licensee and CNG Corp. further acknowledge and agree that the Original Agreement
is hereby replaced and superceded by this License Agreement with the result that
Licensor hereby establishes a direct license with Licensee as herein provided.
2.2 Grant of Exclusive License and Limitations. Licensor hereby grants to
Licensee, and Licensee hereby accepts from Licensor, upon the terms and
conditions hereinafter specified, an exclusive world-wide license in the
Licensed Territory under the Patent Rights, Improvement Patents, Licensed
Products, Confidential Data and Fawley Technology to (i) manufacture, use,
exploit and sell Licensed Products; and (ii) with the express prior written
consent of Licensor, which Licensor shall not unreasonably withhold, sublicense
to credit-worthy and commercially capable parties the right to manufacture, use
and sell, Licensed Products and to utilize the Patent Rights, Improvement
Patents, Confidential Data and the Fawley Technology in connection therewith.
(A) The license described in the preceding sentence of this Section
2.2 shall be noncancellable during the Term of this License Agreement, except in
the event of termination of the License as specifically permitted under the
provisions of this License Agreement.
(B) Notwithstanding the foregoing, Licensor and Licensee expressly
acknowledge and agree that the exclusive and sole world-wide license in the
Licensed Territory granted to Licensee in Section 2.2 above is subject to and
limited by the reserved rights of Licensor set forth on Exhibit 2.2(B) attached
hereto and made a part hereof.
5
(C) There is a potential dispute between NCF and Swiss Aluminum Ltd.
of Zurich, Switzerland with respect to certain of the Fawley Technology, which
is further described in Exhibit 2.2(C) attached hereto and made a part hereof.
2.3 Licensor Covenant. Licensor covenants and agrees that the License
granted herein to Licensee is hereby permitted under the terms hereof.
2.4 Purposes. The purpose of this License Agreement is for Licensee:
(A) To use and exploit Fawley Technology in order to develop,
manufacture and market Licensed Products, within the Licensed
Territory.
(B) To enter into arrangements or contracts for the manufacture
and/or distribution or sale, by others, of Licensed Products; and
(C) To acquire all or any interest in, or form, or as permitted,
sublicense other companies to be engaged in the design,
development, manufacture or sale of Licensed Products, or
products or technologies similar to the Fawley Technology or
Licensed Products.
Further, Licensee will use commercially reasonable efforts in its
business judgment to profitably use this license.
2.5 Limitations. Nothing in this License Agreement shall be construed:
(A) To create a general partnership among Licensor and Licensee for
any other purpose;
(B) To authorize Licensor or Licensee to act as agent for the other
except as may be provided in this License Agreement;
(C) To permit Licensor or Licensee to undertake the conduct of any
other business on behalf of the other.
2.6 Cooperation by Licensor and Licensee. (A) Licensor on or about May 18,
1989, disclosed to Caithness Resources Confidential Data pursuant to the terms
of that certain Secrecy Agreement, executed and delivered between Licensor and
Caithness Resources on May 18, 1989, a true copy of which is attached hereto as
Exhibit 2.6(A) and made a part hereof. Subsequent thereto, and on or about
February 9, 1990, Licensor disclosed
6
Confidential Data to CNG Corp. pursuant to the Original Agreement. On or about
February 9, 1990, CNG Corp. disclosed to CNG LP Confidential Data pursuant to
the terms of that Certain Secrecy Agreement dated February 9, 1990, by and
between CNG Corp. and CNG LP, a true copy of which is attached hereto as Exhibit
2.6(B) and made a part hereof. Licensor acknowledges and agrees that the duties
and rights of CNG LP arising under the Secrecy Agreement referred to in the
preceding sentence have been assumed and acquired by Licensee as of May 29,
1992. Licensee acknowledges and agrees that the duties and rights of CNG Corp.
arising under said Secrecy Agreement have been assumed and acquired on said date
by Licensee. Said acquisitions and assumptions are confirmed by Licensee by
reason of the consummation of the transactions contemplated under the
Termination Agreement, including without limitation the liquidation and
dissolution of CNG Corp. and the termination of the Original Agreement.
(B) During the Term of this License Agreement, Licensor shall make
available at the time of the Quarterly Business Review meeting described in
NGVSI's letter to Norman C. Fawley dated May 25, 1993 to Licensee all
Confidential Data and all other transferable technical information relating to
the Fawley Technology or Licensed Products pursuant to the terms of the Secrecy
Agreement referred to in Exhibit 2.6(B). Licensee shall make a reasonable effort
to make available to Licensor within thirty (30) days of the Effective Date all
Confidential Data and all transferrable technical information relating to any
improvements made by Licensee or C/NCF in the Fawley Technology or Licensed
Products prior to or during the term of the Original Agreement and the
Sublicense Agreement and shall make available to Licensor from and after the
Effective Date all Confidential Data and all transferrable technical information
relating to any improvements made by Licensee in the Fawley Technology or
Licensed Products during the Term of this License Agreement. Licensor shall
safeguard the confidential nature of such information of Caithness/NCF,
CNG,NGVSI or CNG LP that is Confidential Data. The agreement by Licensor and
Licensee, C/NCF, CNG and CNG LP pursuant to the Secrecy Agreements and this
License Agreement not to disclose, and to maintain the confidentiality of, the
Confidential Data shall survive the termination of this License Agreement, the
Original Agreement and the Sublicense Agreement.
2.7 Acceptance. (A) Licensee accepts the appointment as the exclusive and
sole licensee throughout the Licensed Territory of the Patent Rights,
Improvement Patents, Confidential Data, Licensed Products and Fawley Technology,
licensed in Section 2.2 hereinabove, and acknowledges the prior reservation of
rights specified in Section 2.2(B).
7
(B) Licensee covenants that its Licensed Products shall be reasonably
and readily identified as "Manufactured under License from NCF Industries,
Inc.".
ARTICLE III
FORBEARANCE AND REPRESENTATIONS
3.1 Forbearance. During the Term of this License Agreement, Licensor
covenants that he and it shall not develop or design or exploit in any fashion
the Fawley Technology or Licensed Products, nor develop improvements,
enhancements or substitutions therefor either alone or in connection with any
other person or entity, other than with, in and through Licensee as contemplated
herein. The foregoing covenant shall not be deemed violated by Licensor because
of the activity specified in Section 2.2(B) hereof or activity undertaken in
connection with the returned technology as described in the Settlement
Agreement.
3.2 Fawley's Acknowledgment of Representations. Fawley acknowledges that he
made the following representations contained in the CAITHNESS/NCF Joint Venture
Agreement dated February 9, 1990 at Section 2.15 which provides as follows:
(A) he has read this Agreement and all attachments and Exhibits hereto
and that (x) the license granted in Section 2.9(A) hereof, and (y) the Patent
Rights, Confidential Data, NCF Technology and Improvement Patents (if any)
licensed and/or disclosed to the Joint Venture, contains or represents all the
technical information which exists in the possession or control of Fawley as of
the Effective Date which is, or may reasonably be, required by the Joint Venture
to effect the purposes of the Joint Venture set forth in Section 2.3;
(B) except as set forth in Exhibit 2.9(C) annexed hereto Fawley has
not licensed, nor has he permitted any Affiliate to license, any of the Patent
rights, Licensed Products, Confidential Data, NCF Technology or Improvement
Patents to any third party under any form of agreement, contract, partnership,
business entity or other arrangement, nor has he formed any entity with any
third party with which to exploit, develop or in any way engage in business
associated with any of the NCF Technology;
(C) except as otherwise disclosed in this Agreement (including any and
all exhibits thereto), to the best of Fawley's knowledge and belief, there are
pending or threatened no claims or suits for infringement or violation of any
patent, trademark, copyright, trade secret or other confidential business asset
instituted by any third party against Fawley or any of his
8
Affiliates pursuant to which such third party alleges or claims that the NCF
Technology or Confidential Data or Licensed Products in any way infringe upon or
violate such third party's patent, trademark, copyright, trade secret or other
confidential business asset.
3.3 NGVSI's Acknowledgment of Representations. In order to induce Licensor
and NCF to enter into this License Agreement, and recognizing that Licensor is
relying upon the truthfulness and completeness hereof, NGVSI hereby represents
that:
(A) NGVSI is a corporation duly organized, validly existing, duly
qualified to do business, and in good standing under the laws of the State of
Delaware and in all other states in which it conducts business. It has all
requisite corporate power and authority to carry on its business as now
conducted and as proposed to be conducted under this License Agreement.
(B) The execution, delivery and performance of this License Agreement
by it has been duly and validly authorized by all required corporate action and
constitutes the valid and binding obligation of NGVSI enforceable against it in
accordance with its terms.
(C) Neither the execution and delivery of this License Agreement nor
the consummation by NGVSI of the transactions contemplated hereby or compliance
with any of the provisions hereof will: (a) conflict with or result in a breach
of its Articles of Incorporation or By-laws; (b) violate any statute, law, rule
or regulation, or any order, writ, injunction or decree of any court or
governmental authority; (c) except as otherwise disclosed in this Agreement
(including any and all exhibits thereto), violate or conflict with or constitute
a default under any agreement or writing of any nature to which it is a party;
or (d) require the consent of any governmental body or agency or of any other
person, except to the extent previously obtained.
(D) Except as otherwise disclosed in this License Agreement (including
any and all exhibits thereto), to the best of NGVSI's knowledge and belief,
there are no claims, actions, litigation or proceedings pending or, threatened
against NGVSI relating to the transactions contemplated by this License
Agreement.
3.4 CNG Corp. Representations. In order to induce Licensor and NCF to enter
into this License Agreement, and recognizing that Licensor is relying upon the
truthfulness and completeness hereof, CNG Corp. hereby represents that:
(A) CNG Corp. is a corporation duly organized, validly existing, duly
qualified to do business, and in good standing
9
under the laws of the State of California and in all other states in which it
conducts business. It has all requisite corporate power and authority to carry
on its business as now conducted and as proposed to be conducted under this
License Agreement.
(B) The execution, delivery and performance of this License Agreement
by it has been duly and validly authorized by all required corporate action and
constitutes the valid and binding obligation of CNG Corp. enforceable against it
in accordance with its terms.
(C) Neither the execution and delivery of this License Agreement nor
the consummation by CNG Corp. of the transactions contemplated hereby or
compliance with any of the provisions hereof will: (a) conflict with or result.
in a breach of its Articles of Incorporation or By-laws; (b) violate any
statute, law, rule or regulation, or any order, writ, injunction or decree of
any court or governmental authority; (c) except as otherwise disclosed in this
License Agreement (including any and all exhibits thereto), violate or conflict
with or constitute a default under any agreement or writing of any nature to
which it is a party; or (d) require the consent of any governmental body or
agency or of any other person, except to the extent previously obtained.
(D) Except as otherwise disclosed in this License Agreement (including
any and all exhibits thereto), to the best of CNG Corp.'s knowledge and belief,
there are no claims, actions, litigation or proceedings pending or, threatened
against CNG Corp. relating to the transactions contemplated by this License
Agreement.
ARTICLE IV
LICENSE FEES
4.1 Amount. (A) For the rights and privileges granted under this License
Agreement, Licensee shall pay to Licensor, his executors, heirs or
administrators, in the manner hereinafter provided, a license fee of three
percent (3%) of the F.O.B. shop selling price of each Licensed Product sold and
shipped by Licensee, or an Affiliate, or any sublicensee, after reduction of
said price for allowances actually made or paid by Licensee, any Affiliate, or
any sublicensee, for claims, returns, promotional discounts and the like, and
Licensee shall pay to Licensor, his executors, heirs or administrators, three
percent (3%) of the amount of any research and development contract received by
Licensee or any Affiliate, or any sublicensee, which relates principally to the
Licensed Products or Fawley Technology.
10
(B) Payment by Licensee, any Affiliate or any sublicensee to Licensor
for Licensed Products as provided in Section 4.1 shall be made commencing on
June 10, 1993 and on the tenth day of each month thereafter during the term
hereof. The sums called for in Section 4.1(A) shall be based on payments
received in the prior month by the Licensee or an Affiliate or any sublicensee,
for Licensed Products sold and shipped and amounts received pursuant to any
research and development contract. The payment due June 10, 1993 shall include
all unpaid sums for any month prior thereto during the term of the License
Agreement or the Original Agreement.
(C) Sales or transfers to Affiliates, or sublicensees, or
interdivisional sales or transfers shall not be included in the payment
calculation until the actual sale and shipment by such Affiliate, or
sublicensee, to a third party except if such Affiliate or sublicensee is an end
user of the Licensed Products. Under such circumstances, the license fee shall
be based on the lowest sales price of Licensed Products charged to others for
the calendar quarter in which the Licensed Product is shipped to such Affiliate
or sublicensee which calendar quarter shall be the calendar quarter of payment;
provided that such transactions with Affiliates shall be on prevailing market
terms taking into account volumes of purchases, but for transactions with "tech
centers" and Affiliates, products may be offered at the maximum discounts
available to any person. If no such shipment has occurred, such payment shall be
based on the average sales price of the total quantity of the Licensed Products
(separated as to category, if any) in the previous calendar quarter (exclusive
of sales to Affiliates or sublicensees) in which sales have occurred. If no such
sales have occurred, such payment shall be based on the then prevailing market
price.
4.2 Liability of Licensee for Fees on Termination. In the event the Term
hereof expires or the License is terminated in accordance with the provisions of
Article V, Licensee shall remain liable to pay such royalties to Licensor with
respect to payment for Licensed Products which have been sold prior to
expiration of the Term of the License.
4.3 License Fee Statements. Licensee shall furnish Licensor statements
supporting license fee payments in sufficient detail so that the basis for the
payment can be readily ascertained which statements should be similar to that
currently furnished to Licensor. Licensor at reasonable times and places and
with notice to Licensee shall have the right to have independent Certified
Public Accountants inspect the relevant records of Licensee in order to confirm
the correctness of the license fee payment; provided that such Certified Public
Accountants agree in writing to maintain the confidentiality of the matters
disclosed to them in connection therewith except as
11
may be required in accordance with generally accepted accountancy practices. If
such payment is more than 5% less than it should be, Licensee shall pay the
reasonable costs of such examination. Licensee shall maintain and allow Licensor
to inspect all necessary records at reasonable times and places.
ARTICLE V
DURATION AND TERMINATION
5.1 Length of License. This License Agreement shall, unless sooner
terminated as hereinafter provided, remain in full force and effect during the
Term.
5.2 Default, Termination and Notice. In the event that Licensee shall at
any time (i) fail to make payments to Licensor, or otherwise abide by the
material obligations herein provided, or (ii) in the event that Licensee is
dissolved, ceases to do business, terminates its existence, or becomes insolvent
or unable to pay its debts as they mature, or (iii) upon the appointment of a
receiver of any part of the property of Licensee, the assignment for the benefit
of creditors of Licensee, or the filing of a voluntary or involuntary petition
by or against Licensee, then Licensor shall have the right to notify Licensee of
such default and that Licensor intends to terminate this License Agreement
unless such default is corrected. Unless such default shall be corrected by
Licensee within thirty (30) days from the receipt by it of such notice or for
non-monetary obligations such time as Licensee may reasonably require to correct
such default but in no event more than 120 days, then, in such event, this
License Agreement and the license and rights granted pursuant to this License
Agreement, shall thereupon automatically terminate.
5.3 Duties on Termination. Upon any termination becoming effective,
Licensor or Licensee shall be relieved of all duties and obligations hereunder
except that the obligations of confidentiality as provided in Article VII of
this License Agreement shall survive any termination under Article V hereof and
Licensee shall pay to Licensor license fees accrued or thereafter accruing and
unpaid up to such time; provided, however, that Licensee shall under no
circumstances be entitled to a return of license fees previously paid or to a
reduction of license fees accrued and paid on the effective date of termination.
5.4 Rights on Termination. Termination of this License Agreement for any
reason shall be without prejudice to Licensor's right to receive all payments
accrued and unpaid at the effective date of such termination and to the remedy
of either party hereto
12
in respect of any previous breach of any of the covenants herein contained.
ARTICLE VI
ASSIGNMENT OF LICENSE
6.1 Limitations. This License Agreement may not be sold, exchanged, gifted,
contributed, encumbered, assigned or otherwise transferred by Licensee without
the prior written consent of Licensor which he may withhold in his discretion;
provided, however, that Licensee may assign to or sublicense any Affiliate of
Licensee without such consent, so long as such assignment shall not materially
or adversely affect Licensor's rights hereunder and provided such sublicensee
agrees to be bound by the terms and conditions hereof. Licensee guarantees the
payment by each assignee or sublicensee of Licensee of all payments which become
due or payable to Licensor and all of Licensee's obligations hereunder shall
continue during the Term hereof. Licensee shall also require any and all such
sublicensees and any assignee to agree to hold in confidence the Fawley
Technology and Confidential Data on terms and conditions commensurate with those
set forth in Article VII. Licensor shall have the same rights as to any such
sublicensee or assignee as Licensor has as to Licensee.
ARTICLE VII
CONFIDENTIAL OBLIGATIONS
7.1 Confidentiality and Limitations. Licensee and any assignee or
sublicensee of Licensee and all of their shareholders, officers, partners,
employees, consultants and agents shall take reasonable precautions, including
those in accordance with procedures they follow with respect to their own
confidential information, including the use of such secrecy agreements as they
deem necessary, to maintain in confidence for a period of ten (10) years from
the Effective Date of this License Agreement or the date of disclosure,
whichever is longer, the Fawley Technology and Confidential Data provided by
Licensor. However, the confidential obligations imposed herein shall not apply
to any information which:
(A) is or later becomes generally available to members of the public
in the form of a publication or otherwise through no act or fault of Licensee or
any assignee thereof or sublicensee or their shareholders; or
(B) is lawfully obtained by Licensee or any assignee or sublicensee
thereof or their shareholders from a third party having no confidential
obligation to Licensor.
13
7.2 Right to Disclose. To the extent necessary for the use of Fawley
Technology and Confidential Data, Licensee, any permitted assignee or
sublicensee thereof shall have the right to disclose such Fawley Technology and
Confidential Data to governmental entities and their agents and designees as
reasonably necessary in connection with patent or licensing applications or
otherwise and to Licensee's Affiliates or permitted sublicensees provided that
such subsidiary or permitted sublicensee agrees in writing before such
disclosure to be bound by the same secrecy obligations to Licensor which are
imposed by Licensor upon Licensee in this License Agreement and to not use such
Fawley Technology and Confidential Data except for the account of Licensee as
specified above. Nothing in this License Agreement shall be interpreted as
restricting the Licensee or any assignee or sublicensee thereof from obtaining
commercially available equipment for manufacturing Licensed Products from any
third party whatsoever so long as Licensee discloses to such third party no
Fawley Technology or Confidential Data which Licensee is required to hold in
confidence in accordance with Section 7.1 above.
7.3 Secrecy Agreement. The rights and duties under the Secrecy Agreement
are not modified by this License Agreement.
ARTICLE VIII
IMPROVEMENTS
8.1 During the term of this License Agreement, Licensor and Licensee shall
promptly disclose to one another all improvements in Fawley Technology and
Patent Rights which relate to the Licensed Products and which Licensor or
Licensee owns, develops or controls and which either one may lawfully transmit.
ARTICLE IX
PROSECUTION AND MAINTENANCE
OF PATENT APPLICATIONS AND PATENTS
9.1 (A) Licensee shall bear the cost of maintaining (and shall maintain)
all original patent positions relating to the Patent Rights. In addition
Licensee shall obtain and maintain all Improvement Patents for inventions
conceived by Licensor with respect to the Licensed Products or Fawley Technology
licensed hereunder or under the Original Agreement. Licensor shall retain sole
title in and to such Patents Rights originally licensed hereunder and such
Improvement Patents, as Licensor shall have or does conceive, the rights under
which shall be governed by this License Agreement.
14
(B) Licensee shall bear the cost of obtaining and maintaining (and
shall maintain) Improvement Patents for inventions conceived by Licensee and
present and past Affiliate employees. Licensee shall retain sole title in and to
any Improvement Patents conceived by Licensee and present and past Affiliate
employees.
(C) Licensee shall bear the cost of obtaining and maintaining (and
shall maintain) Improvement Patents conceived jointly by Licensor and Licensee,
and title thereto shall be held jointly by Licensor and Licensee. The rights
under any jointly developed Improvement Patents shall be governed by this
License Agreement.
(D) The obtaining and maintaining of patent positions and/or copyright
and/or trademark registration or protection on each Licensed Product and in each
country by Licensee, together with related costs, as set forth in subsections
(A), (B) and (C) hereinabove shall be within the sole discretion of Licensee
except as to original patent patent positions relating to the Patent Rights.
Prior to or at the quarterly Owner's Committee as described in the letter from
NGVSI to Licensor, Licensor and Licensee will each inform the other of all new
potential patent related developments of the Licensed Products. Either Licensor
or Licensee may call for the obtaining and maintaining of patent protection in
connection with any such development, and Licensor and Licensee shall then
proceed as agreed. The abandonment of maintenance of patent positions may be
discussed and agreed to by Licensor and Licensee. If the parties do not agree on
a course of conduct, for a period of 30 days after which meeting, either
Licensor or Licensee; (i) can call for mediation and proceed with mediation if
both Licensor and Licensee agree on mediation, or (ii) if there is no such
agreement on mediation, either Licensor or Licensee may demand arbitration. If
the arbitrator concludes that Licensee should not be required to obtain and
maintain a patent at that time, unless mutually agreed between Licensor and
Licensee, the subject matter may not be brought up again for one year. If the
arbitrator concludes that the Patent Protection should be obtained and
maintained as to a specific country or countries or otherwise, Licensee shall
have the sole discretion as to whether or not it should obtain and maintain such
protection. Should Licensee decide not to obtain patent protection and/or
copyright and/or trademark registration or protection on a particular Licensed
Product in any specific country at its own expense, then Licensor can obtain
such patent protection and/or copyright and/or trademark registration or
protection in Licensor's own name and expense and license others in such country
with respect to such patent; provided, however, that Licensor shall first give
written notice to the Licensee, that Licensor intends to exercise the rights
afforded in the preceding clause of this sentence, whereupon the Licensee shall
15
have 60 days after receipt of said notice to perform its duties set forth above
and upon the Licensee performing said duties, Licensor's rights under the
preceding clause of this sentence shall be nullified and rendered void. If
Licensee fails to perform within said time period, then all such rights
(including the right to license such Licensed Products in such country) with
reference to the patent position(s) of such Licensed Products shall revert to
Licensor.
(E) All employees or independent contractors of Caithness/NCF have
been and those of Licensee have been, are and shall be required to execute and
perform under a form of appropriate intellectual property and confidentiality
agreement, as a condition of employment or engagement, in form and substance
(from and after the Effective Date) satisfactory to Licensor and Licensee.
(F) All references to Licensor in this Article IX shall be deemed to
include Fawley and NCF except as Fawley may otherwise disclose by notice to
Licensee.
(G) In the event during the Term of this License Agreement, Licensee
or any Affiliate incurs expenses in filing, maintaining or prosecuting Licensed
Patents in the United States of America all such expenses shall be reimbursed by
GRI pursuant to the Licensing Agreement shall belong to and be received by
Licensee. In the event during the Term of this License Agreement, Licensee
incurs expenses in filing, maintaining or prosecuting such Licensed Patents
outside the United States of America, any contribution required to be made by
GRI with respect thereto pursuant to Article II of the Licensing Agreement shall
belong to and be received by Licensee.
ARTICLE X
DEFENSE OF LICENSED PATENTS
10.1 In the event that Licensee shall become aware of any infringement of
any patent within the Patent Rights, Licensee shall immediately notify Licensor
of such infringement and shall be entitled by itself to initiate and maintain
proceedings against such infringement, at its own expense and for its own
benefit as regards any damages and costs recovered. Licensor shall be entitled,
if Licensor so elects, to be represented at such proceedings by Licensor's own
counsel at Licensor's own expense and for its own benefit as regards any damages
and costs recovered.
16
10.2 In the event Licensee (a) fails to initiate and maintain proceedings
against infringement of Patent Rights as provided in Section 10.1 within one (1)
year after first becoming aware of such infringement, or (b) advises Licensor in
writing during such time period that Licensee does not intend to initiate or
maintain such proceedings, Licensor shall be entitled by itself to initiate and
maintain proceedings against such infringement to the exclusion of Licensee, at
Licensor's own expense and for Licensor's own benefit as regards any damages and
costs recovered.
ARTICLE XI
EXPORT
11.1 Licensor and Licensee acknowledge that the laws and regulations of the
United States may restrict the export and re-export of technical data of United
States origin, including the Licensed Products, the Fawley Technology, the
Patent Rights and the Confidential Data. The parties agree that they will not
export or re-export any of the Licensed Products, the Fawley Technology, the
Patent Rights and the Confidential Data, or any portion of them in any form
without the appropriate United States and foreign government licenses.
ARTICLE XII
SUCCESSORS AND ASSIGNS
12.1 This License Agreement shall be binding upon the heirs, executors,
administrators, representatives, agents, successors and assigns of any person
that is a party hereto and the directors, officers, stockholders,
representatives, employees, agents, successors and assigns of Licensee.
ARTICLE XIII
NOTICES
13.1 All notices requested or permitted by this License Agreement shall be
sufficiently given as of the date posted by registered or certified mail with
proper postage, correctly addressed to the person to be notified. The addresses
of the parties shall be as set forth below, unless changed by like notice to the
other party:
17
Licensor: Norman C. Fawley, President
NCF Industries, Inc.
2320 Cherry Industrial Circle
Long Beach, California 90805
NCF Industries, Inc.
2320 Cherry Industrial Circle
Long Beach, California 90805
with copy to: Jerry Fine, Esq.
Sanders, Barnet, Goldman, Simons & Mosk
1901 Avenue of the Stars, Suite 850
Los Angeles, California 90067
Licensee: Natural Gas Vehicle Systems, Inc.
2250 Cherry Industrial Circle
Long Beach, California 90805
Other Parties: Caithness Resources, Inc.
1114 Avenue of the Americas
35th Floor
New York, New York 10036-7790
Caithness/NCF Company
1114 Avenue of the Americas
35th Floor
New York, New York 10036-7790
CNG Cylinder Corporation
2250 Cherry Industrial Circle
Long Beach, California 90805
CNG Cylinder Corporation of
North America, L.P.
c/o Caithness Resources, Inc.
1114 Avenue of the Americas
35th Floor
New York, New York 10036-7790
ARTICLE XIV
WAIVERS
14.1 The failure of Licensor or Licensee to enforce at any time any of the
provisions of this License Agreement shall in no way constitute or be construed
as a waiver of that or any other provision of this License Agreement, nor in any
way to affect the
18
validity of such a party to enforce thereafter each and every provision of this
License Agreement. No waiver of any breach of this License Agreement shall be
held to be a waiver of any other or subsequent breach.
ARTICLE XV
SEVERABILITY
15.1 Each provision of this License Agreement shall be considered separable
and if for any reason any provision which is not essential to the effectuation
of the basic purpose of this License Agreement is determined to be invalid and
contrary to any existing or future law, such invalidity shall not impair the
operation of or affect those provisions of this License Agreement which are
valid.
ARTICLE XVI
ARBITRATION OF DISPUTES
16.1 Any controversy or claim arising out of or relating to this contract,
or the breach thereof, shall be settled by arbitration in Los Angeles,
California, administered by the American Arbitration Association in accordance
with its Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall have the power to provide any form of relief authorized by law,
including, but not limited to damages, punitive damages, equitable relief and
declaratory relief. Any party hereto may seek any provisional or interim relief,
including, but not limited to injunctive relief and attachment, in a court of
competent jurisdiction, without waiving the right to arbitration hereunder.
The parties shall mutually attempt to designate the arbitrator. Either
party may at any time request that the arbitrator be designated in accordance
with the rules of the American Arbitration Association. If either party so
requests, the selection of the arbitrator shall be expedited so that the
arbitrator can be designated as quickly as practicable. The arbitrator shall be
selected from a list of retired California appellate justices, retired Los
Angeles Superior Court judges or the American Arbitration Association panel for
Large, Complex Disputes.
If requested by any of the parties, the award of the arbitrator shall be
accompanied by a statement of the reasons upon which such award is based. The
arbitrator shall have no jurisdiction to render an award which is not in
conformity with the substantive law of the State of California.
19
The award of the arbitrator shall include (a) interest at such rate and
from such date as the arbitrator may deem appropriate; (b) an apportionment
between the parties of all or part of the fees and expenses of the American
Arbitration Association and the compensation and expenses of the arbitrator; and
(C) an award of costs, including reasonable attorneys' fees, to the prevailing
party.
ARTICLE XVII
ATTORNEYS' FEES
17.1 In the event that any party to this License Agreement shall commence
any suit or action permitted by the arbitration provision set out in Section
16.1 to interpret or enforce this License Agreement, the prevailing party in
such action shall recover such party's costs and expenses incurred in connection
therewith, including attorney's fees and costs of appeal, if any.
ARTICLE XVIII
CAPTIONS
18.1 The captions of the sections of this License Agreement are for
convenience only and shall not control or affect the meaning or construction of
any of the provisions of this License Agreement.
ARTICLE XIX
GOVERNING LAW
19.1 This License Agreement shall be construed in accordance with and
governed by the laws of California and any legal proceedings brought by a party
to this License Agreement shall be brought in Los Angeles County, California.
ARTICLE XX
CONFIRMATION AND ACKNOWLEDGMENT
20.1 By their signatures hereunder each of NCF, CNG, CNG LP, Caithness
Resources, Inc. and Caithness/NCF confirm that the language in this License
Agreement, as it refers to each of them, is correct and each (for itself) agrees
to be bound thereby and perform each and every act, if any, that is required of
each of them.
20
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed by their proper representatives thereunto duly authorized.
WITNESS: Licensor:
/s/Jerry Fine /s/Norman C. Fawley
- --------------------- ---------------------------
Norman C. Fawley
WITNESS: NCF Industries, Inc.
/s/Jerry Fine By: /s/Norman C. Fawley
- --------------------- -----------------------
Its: President
----------------------
ATTEST: Licensee:
NATURAL GAS VEHICLE SERVICES, INC.
/s/Howard T. Phelan By: /s/ [ILLEGIBLE]
- --------------------- -----------------------
Its: E. Vice President
----------------------
Withdrawing Licensee
ATTEST: CNG CLYINDER CORPORATION
/s/ [ILLEGIBLE] By: /s/Howard T. Phelan
- --------------------- -----------------------
Its: Chairman
----------------------
ATTEST: CNG CYLINDER CORPORATION OF
NORTH AMERICA, L.P.
/s/ [ILLEGIBLE] By: /s/Caithness Resources, Inc. G.P.
- --------------------- ---------------------------------
Its: /s/ [ILLEGIBLE]
---------------------------
/s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
Its: Chairman
ATTEST: CAITHNESS RESOURCES, INC.
/s/ [ILLEGIBLE] By: /s/ [ILLEGIBLE]
- ---------------------- --------------------------
Its: /s/S.V.P.
-------------------------
21
ATTEST: CAITHNESS NCF COMPANY
/s/ [ILLEGIBLE] By: /s/Howard T. Phelan
- ---------------------- --------------------------
Its: /s/Chairman
-------------------------
22
PORTFOLIO OF LICENSED PRODUCTS
REQUIRED PURSUANT TO SECTION 1.10
OF LICENSE AGREEMENT
The Licensed Products licensed by Norman C. Fawley to Natural Gas Vehicle
Systems, Inc. means any and all products or processes now existing or
hereinafter developed or acquired, using the Fawley Technology, including but
not limited to:
Composite Reinforced Cylinders and Tubes. Composite reinforced cylinders or
tubes are spun, produced from either aluminum or steel, or other metals, and
then reinforced with high-strength composite material. Patents held by
sublicensor pertaining to the products described herein include: U.S. #4,589,562
"Structures Reinforced by a composite material", and related foreign patents;
U.S. #4,559,974.
------------------------------------
Norman C. Fawley
Exhibit 1.12
The Returned Technology transferred and assigned to Norman C. Fawley
pursuant to that certain Settlement Agreement dated May, 1993 includes all
technology, patent rights, improvement patents and confidential data, invented,
authored, owned, developed or acquired by Norman C. Fawley or NCF Industries,
Inc., relating to the following products or processes.
1. Composite Reinforced Pipe Without Autofrettage, being pipe produced of
any metal which is reinforced with high-strength composite on the outside to
prevent propagating ductile fractures or to increase the burst pressure. Patents
pertaining to the product described herein include: U.S. #4,589,562 "Structures
Reinforced by a Composite Material", and related foreign patents; and U.S.
#4,676,276 "Method of Treating a Pipe and Product Produced Thereby" and related
foreign patents.
2. Composite Reinforced Pipe with Autofrettage, being pipe produced of any
metal which is reinforced with high-strength composite on the outside to prevent
propagating ductile fractures or to increase the burst pressure of the pipe.
After hydraulically or mechanically, past its yield point to induce a negative
or compressive stress on the pipe itself at zero pressure. Patents held by
Licensor pertaining to the products described herein include: U.S. #4,589,562
"Structures Reinforced by a Composite Material", and related foreign patents;
and U.S. #4,676,276 "Method of Treating a Pipe and Product Produced Thereby" and
related foreign patents.
3. Composite Reinforcement Rehabilitation Systems, being products or
processes composed of, or utilizing products composed of lightweight,
non-metallic, high tensile strength filaments in a resin matrix wound around or
otherwise applied in shops, fabricators or pipe manufacturing facilities,
facilities to pipe or other objects for the purpose of (i) preventing a
propagating ductile fracture in, or to increase the burst strength of, such pipe
or other object or (ii) reinforcing, repairing or rehabilitating objects, such
as pipe. Patents held by Licensor pertaining to the products or processes
described herein include: U.S. #4,589,562 "Structures Reinforced by a Composite
Material", and related foreign patents; U.S. #4,559,974 "Apparatus and Method of
Arresting Ductile Fracture Propagation" and related foreign patents; U.S.
#4,676,276 "Method of Treating a Pipe and Product Produced Thereby" and related
foreign patents;
Exhibit 1.12A
and U.S. #4,700,752 "Clock Spring Crack Arrestor" and related foreign patents
and other patents pending.
4. Storage Tank Rehabilitation Systems, being systems which involve the use
of composite technology described in (1) hereinabove ("Composite Reinforced Pipe
Without Autofrettage") to reinforce large diameter liquid storage tanks,
typically 100' to 300' in diameter to prevent a catastrophic rupture of these
tanks. Patents held by Licensor pertaining to the Products described herein
include: U.S. #4,589,562 "Structures Reinforced by a Composite Material", and
related foreign patents; U.S. #4,559,974 "Apparatus and Method of Arresting
Ductile Fracture Propagation" and related foreign patents; U.S. #4,676,276
"Method of Treating a Pipe and Product Produced Thereby" and related foreign
patents. A pending U.S. patent application held by Licensor and pertaining to
the products described herein is Serial No. 07/274,278, "Method of Preventing
Bursting of Storage Tanks and Burstproof Tanks Products Thereby".
5. Gas Transport Module being a product which involves the use of 30" to
42" diameter line pipe, configured in 80' sections, with heads welded on each
end, sidewalls reinforced and then subjected to Autofrettage. The tubes could be
placed on barges and collect gas from offshore wells. Similar applications are
also envisioned for onshore facilities. In this case, these tubes might be
either spun tubes or have heads welded on them. Patents held by Licensor
pertaining to the products described herein include: U.S. #4,589,562 "Structures
Reinforced by a Composite Material", and related foreign patents; and U.S.
#4,676,276 "Method of Treating a Pipe and Product Produced Thereby" and related
foreign patents.
Exhibit 1.12A
A G R E E M E N T
This is an Agreement by and among NORMAN C. FAWLEY, NCF INDUSTRIES, INC.,
CAITHNESS/NCF COMPANY, CAITHNESS/NCF LIMITED PARTNERSHIP, CLOCK SPRING COMPANY
OF NORTH AMERICA, L.P., CNG CYLINDER CORPORATION, CAITHNESS RESOURCES, INC.,
CAITHNESS COMPOSITES, INC. and NATURAL GAS VEHICLE SYSTEMS, INC., dated March 4,
1993.
R E C I T A L S:
1. Natural Gas Vehicle Systems, Inc. ("NGVSI") has requested Norman C.
Fawley ("Fawley") and NCF Industries, Inc. ("NCF") to issue a limited, one-time
waiver of certain of Fawley and NCF's remedies in the form attached hereto as
Exhibit A in connection with NGVSI's loan and stock purchase settlements with
Amoco Oil Company and Hanseatic Corporation.
2. NCF and Fawley are willing to issue the aforesaid limited, one-time
waiver in the form attached hereto as Exhibit A provided that NGVSI consents and
agrees to the items hereinbelow set forth and simultaneously upon closing
between NGVSI and Hanseatic and Amoco makes the payments and transfers
hereinbelow recited.
NOW, THEREFORE in consideration of the foregoing and of the mutual promises
hereinbelow set forth the parties agree as follows:
1. Simultaneously upon the closing and transfer of funds between Amoco and
Hanseatic, as lenders and stock purchasers and NGVSI as issuer and borrower
(collectively the "Closing"), Fawley and NCF shall authorize to be released to
NGVSI and Hanseatic and Amoco an original executed for of limited waiver
substantially in the form set forth as Exhibit A hereto.
2. Simultaneously upon Closing NGVSI shall remit to NCF the sum of $100,000
in payment to NCF of NCF's performance under its Independent Contractor
Agreement by and between Caithness NCF Company and NCF in and for the year of
1992.
3. Simultaneously upon the Closing NGVSI shall cause the sum of $37,500 to
be remitted to the firm of Sanders, Barnet, Goldman, Simons & Mosk in full
payment of all legal fees owed by NGVSI or its affiliates to said law firm.
4. Simultaneously upon the Closing NGVSI shall pay to Fawley the license
fee due under section 4.5 of the CNG Cylinder Company of North America Limited
Partnership and Sublicense Agreement dated February 9, 1990 with respect to the
sale of Licensed Products in and for the fourth quarter of 1992.
Exhibit 1.22
5. Simultaneously upon the Closing NGVSI, Caithness/NCF Company, Clock
Spring Company of North America, LP, Caithness/NCF Limited Partnership, CNG
Cylinder Corporation and Caithness Resources, Inc. shall and hereby undertake to
withdraw with prejudice all notices of default which each or any of them may
have served or issued upon NCF or Fawley prior to March 4, 1993 arising under
any agreement of document between or among said parties.
6. Simultaneously with the Closing Caithness/NCF Company shall and hereby
does transfer and reassign without recourse to Fawley the technology described
on Exhibit B hereto, constituting the "Returned Technology." Following said
transfer and reassignment Caithness/NCF Company, Caithness Resources, Inc. and
Caithness/NCF Limited Partnership hereby agree that neither or any of them shall
have any right whatsoever to enjoy or exploit said Returned Technology.
7. Immediately following the Closing NCF, Caithness Resources, Inc. and
Caithness NCF L.P. shall use their best efforts to reach agreement in order to
liquidate and dissolve Caithness NCF Company. If for any reason the dissolution
and liquidation of Caithness/NCF Company is not effected before April 4, 1993,
then in that event NCF shall have the option to cause Caithness/NCF Company, and
Caithness/NCF Limited Partnership to issue to NCF, NCF's pro rata amount of
shares of common stock of NGVSI as partial liquidation of NCF's interest in
Caithness/NCF Company and as a special distribution by Caithness/NCF Limited
Partnership. For purposes of the foregoing undertaking Caithness/NCF Company
shall, upon the exercise of said option by NCF, cause to be issued and
registered in the name of NCF, NCF's pro rata portion of NGVSI common stock then
owned by Caithness NCF Company. Caithness/NCF Limited Partnership through its
general partner Caithness Composites, Inc. shall further, upon the exercise of
said option by NCF cause to be issued and registered in the name of NCF shares
of common stock of NGVSI equal to 5% of the aggregate shares of common stock of
NGVSI then owned by Caithness/NCF Limited Partnership.
8. The parties hereto acknowledged, and agrees that this Agreement shall in
no way affect, modify, serve to amend or supplement any or other agreement now
existing or hereafter entered into by or among any of the said parties. Further,
all parties hereto agree that this Agreement shall not affect the settlement or
compromise or create or give rise to a waiver of release by any of the parties
hereto of their respective rights, remedies, duties or obligations arising under
any agreement to which they are a party except as expressly agreed to herein.
-2-
Exhibit 1.22
9. Simultaneously upon Closing, all parties hereto other than Fawley and
NCF shall acknowledge, permit and abide Fawley and/or NCF conducting a business,
whether alone, or in conjunction with others, relating to the conversion of
diesel powered vehicles to "dual-fuel vehicles" and relinquish any claim to
profits or income therefrom.
10. Promptly after Closing NGVSI shall use its best efforts to have the
shares of common stock of NGVSI attributable to NCF as noted in Paragraph 7
above to be treated as Registrable Securities as described in the Registration
Rights Agreement between NGVSI and Hanseatic Corporation. Pursuant to such
consent NCF shall have the same rights and duties with respect to the
Registrable Securities except that any rights of registration may only be
instituted by the party or parties referred to in such agreement. Further, to
the extent that such joinder by NCF exceeds the acceptable dollar amount of
shares to be registered as described in said agreement, any reduction in shares
to be registered pursuant to the rights acquired by Hanseatic shall be met first
and totally by NCF. No other registration rights or opportunities afforded to
shareholders of NGVSI in general are affected by the foregoing consent and
grant.
NATURAL GAS VEHICLE SYSTEMS, INC.
By: __________________________________
CAITHNESS/NCF COMPANY
By: __________________________________
CAITHNESS/NCF LIMITED PARTNERSHIP
By: __________________________________
NCF INDUSTRIES, INC.
By: __________________________________
-3-
Exhibit 1.22
_______________________________________
NORMAN C. FAWLEY
CLOCK SPRING COMPANY OF NORTH
AMERICA, L.P.
By: __________________________________
CNG CYLINDER CORPORATION
By: __________________________________
CAITHNESS RESOURCES, INC.
By: __________________________________
CAITHNESS COMPOSITES, INC.
By: __________________________________
-4-
Exhibit 1.22
EXHIBIT A
LIMITED WAIVER
DATED MARCH 4, 1993
The undersigned, for valuable consideration received, hereby grants to CNG
Cylinder Corporation and Natural Gas Vehicle Systems, Inc. a limited and
one-time waiver of the undersigned's rights arising under the License Agreement
dated February 9, 1990 and the CNG Cylinder Company of North America Limited
Partnership and Sublicense Agreement dated February 9, 1990 to terminate the
License or Sublicense respectively therein described, based upon or as the
result of any "Notice of Defaults" or any fact or circumstance directly or
indirectly forming the basis of any such notice issued by or on behalf of the
undersigned to CNG Cylinder Corporation; or Natural Gas Vehicle Systems, Inc.;
or Caithness/NCF Company; or Caithness/NCF Limited Partnership.
The undersigned represents that this is a limited, and one-time waiver, and
shall not constitute a waiver of any of the undersigned's other rights and
remedies arising under or in connection with the afore License Agreement, the
CNG Cylinder Company of North America Limited Partnership and Sublicense
Agreement, or otherwise.
_______________________________________
NORMAN C. FAWLEY
NCF INDUSTRIES, INC.
By: __________________________________
NORMAN C. FAWLEY
Exhibit 1.22
EXHIBIT B
"Returned Technology"
As of March 4, 1993, all Fawley Technology relating to Patent Rights
relating to Improvement Patents relating to, Confidential Data relating to and
all products or processes relating to:
(i) Composite Reinforced Pipe without Autofrettage. Pipe produced of any
metal which is reinforced with high-strength composite on the outside to prevent
propagating ductile fractures or to increase the burst pressure products
described herein include: U.S. #4,589,562 "Structures Reinforced by a composite
material", and related foreign patents; and U.S. #4,676,276 "Method of Treating
a Pipe and Product Produced Thereby" and related foreign patents.
(ii) Composite Reinforced Pipe and Autofrettage. Products of any metal
which are reinforced with high-strength composite on the outside to prevent
propagating ductile fractures or to increase the burst pressure of the pipe.
After reinforcement, the pipe is pressurized internally, either hydraulically or
mechanically, past its yield point to induce a negative or compressive stress on
the pipe itself at zero pressure. Patents held by Fawley pertaining to the
products described herein include: U.S. #4,589,562 "Structures Reinforced by a
composite material", and related foreign patents; and U.S. #4,676,276 "Method of
Treating a Pipe and Product Produced Thereby" and related foreign patents.
(iii) Except as exclusively licensed to Clock Spring Company as set forth
on Exhibit A attached to the Agreement to which this Exhibit C is attached,
Composite Pipeline Rehabilitation Systems. These systems use the products and
technology described in (i) hereinabove ("Composite Reinforced Pipe without
Autofrettage") or (ii) hereinabove ("Composite Crack Arrestors") in applications
in shop, facilities or yards, but not in situ or in over the ditch settings, in
order to repair or reinforce other structures. Patents held by Fawley pertaining
to the products described herein include: U.S. #4,589,562 "Structures Reinforced
by a composite material", and related foreign patents; U.S. #4,559,974
"Apparatus and Method of Arresting Ductile Fracture Propagation" and related
foreign patents; U.S. #4,676,276 "Method of Treating a pipe and product produced
thereby" and related foreign patents; and U.S. #4,700,752 Clock Spring Crack
Arrestore.
(Superceded by Exhibit 1.12A)
(iv) Storage Tank Rehabilitation System. Storage Tank Rehabilitation
Systems involve the use of composite technology described in (i) hereinabove
("Composite Reinforced Pipe Without Autofrettage") to reinforce large diameter
liquid storage tanks, typically 100' to 300' in diameter to prevent a
catastrophic rupture of these tanks. Patents held by Fawley pertaining to the
products described herein include: U.S. #4,589,562 "Structures Reinforced by a
composite material", and related foreign patents; U.S. #4,559,974 "Apparatus and
Method of Arresting Ductile Fracture Propagation" and related foreign patents;
U.S. #4,676,276 "Method of Treating a pipe and product produced thereby" and
related foreign patents. A pending U.S. patent application held by Fawley and
pertaining to the products described herein is Serial No. 07/274,278, "Method of
Preventing Bursting or Storage Tanks and Burstproof Tanks Products Thereby".
(v) Gas Transport Module. Gas Transport Module involves the use of 30" to
42" diameter line pipe, configured in 80' sections, with heads welded on each
end, sidewalls reinforced and then subjected to Autofrettage. The tubes could be
placed on barges and collect gas from offshore wells. Similar applications are
also envisioned for onshore facilities. In this case, these tubes might be
either spun tubes or have heads welded on them. Patents held by Fawley
pertaining to the products described herein include: U.S. #4,589,562 "Structures
Reinforced by a composite material", and related foreign patents; and U.S.
#4,676,276 "Method of Treating a pipe and product produced thereby" and related
foreign patents.
(Superceded by Exhibit 1.12A)
RESERVED RIGHTS OF LICENSOR
NCF Industries will continue to produce Fibralume cylinders for Union
Carbide-Linde, with all costs and revenue accruing to NCF.
Exhibit 2.2(B)
POTENTIAL DISPUTE
There is a potential dispute between NCF and Swiss Aluminum Ltd.
("Alusuisse") of Zurich, Switzerland with respect to certain of the NCF
Technology. In late 1980 Alusuisse invited Fawley to make a presentation of the
NCF Technology to its technical staff in Zurich for the purpose of entering into
either a joint venture between Fawley and Alusuisse or long-term exclusive
license agreement to be granted Alusuisse by Fawley. During three of four days
of presentation Fawley discussed and disclosed proprietary NCF Technology with
and to Alusuisse personnel. Following said meeting, by letter dated January 22,
1981, Alusuisse informed Fawley that Alusuisse had filed a patent position in
mid-1980 regarding fiber reinforced cylinders and suggested that Fawley simply
consult for Alusuisse and that Fawley would be offered some undefined equity
position in an Alusuisse company producing fiber reinforced vessels. A copy of
the letter from Alusuisse dated January 22, 1981, the responses from Fine,
Perzik & Friedman, attorneys for Fawley and NCF, dated April 10, 1981 and July
31, 1981, and the responding letter from Alusuisse dated November 17, 1981 have
been provided Caithness by NCF.
Exhibit 2.2(C)
NCF INDUSTRIES
SECRECY AGREEMENT
This agreement is made on May 18 1989 among NCF Industries ("NCF"), NORMAN
C. FAWLEY ("FAWLEY") and CAITHNESS RESOURCES, INC. ("RECIPIENT").
Whereas NCF and FAWLEY possess specialized information and know-how in the
marketing and production of products for use in the Compressed Gas and Composite
Reinforced Metals Industries and CNG-powered vehicles, which products are
identified on Attachment 1 hereto (the "Products");
Whereas NCF and/or FAWLEY have the right to disclose to RECIPIENT the
information and know-how relating to the Products;
Whereas RECIPIENT desires to evaluate the Products in connection with
assessing the business opportunities presented for its consideration by NCF and
FAWLEY.
It is therefore agreed:
1. Disclosure. NCF and FAWLEY shall disclose to the designated employees
and agents of RECIPIENT, information which includes drawings, designs, plans,
proposals, marketing and sales plans, financial information, costs, pricing
information and concepts and ideas reasonably related to the Products (the
"Trade Secrets"), and such other information and assistance requested
Exhibit 2.6(A)
by RECIPIENT which is reasonably necessary to enable it to understand and
evaluate the Trade Secrets and Products. Such disclosure shall be in written
form and marked Confidential. Disclosures made other than in written form, i.e.,
verbally or by observation, must be reduced to writing, marked Confidential and
delivered to RECIPIENT within thirty (30) days of disclosure in order to be
considered Trade Secrets hereunder.
2. Confidential Data. RECIPIENT acknowledges and agrees that Trade Secrets
shall be communicated by NCF and FAWLEY and received by RECIPIENT in confidence.
RECIPIENT further acknowledges and agrees that the Trade Secrets are proprietary
information of NCF and FAWLEY. It is understood that RECIPIENT receives such
Trade Secrets in trust solely for its own benefit or use and RECIPIENT agrees
that, absent prior written consent by or agreement with NCF or FAWLEY, the Trade
Secrets shall not be directly or indirectly disclosed by RECIPIENT to any other
person or entity, governmental or private.
RECIPIENT shall at all times preserve the secrecy of the Trade Secrets and
shall prevent the disclosure of any Trade Secrets and shall prevent the
disclosure of any Trade Secrets received hereby by any of RECIPIENT's employees,
officers, directors, business associates, subcontractors, vendors, subsidiaries,
affiliates or any other person obtaining knowledge of the Trade Secrets through
RECIPIENT. In view of this obligation, RECIPIENT agrees and warrants that it
shall use its best efforts, including the use of such secrecy agreements as it
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Exhibit 2.6(A)
deems necessary, to prevent any such disclosure.
All reasonable expenses incurred by FAWLEY and NCF in furnishing the
assistance and information pursuant to this Section, including travel and per
diem expenses for FAWLEY, and all other business-related expenses for NCF and
FAWLEY, shall be paid by RECIPIENT within ten (10) days of submission of said
expenses. Any other special expenses agreed to in advance by RECIPIENT, such as
testing, shall also be paid by RECIPIENT within ten (10) days of submission of
said expenses.
3. Duty to Examine and Report. RECIPIENT shall diligently and thoroughly
examine and analyze the Products and Trade Secrets to assess their marketability
and development potential. Within sixty (60) days of the date hereof, RECIPIENT
shall prepare and deliver to NCF or FAWLEY a confidential report setting forth
the specific efforts undertaken with respect to such examination and analysis,
as well as any findings, recommendations or conclusions reached by RECIPIENT.
Such report shall also indicate whether RECIPIENT is interested in negotiating a
commercial licensing agreement for development of any or all of the Products or
Trade Secrets.
4. Restrictions on Use of Products and Trade Secrets. RECIPIENT agrees that
it will not make use of the Products or the Trade Secrets obtained from NCF or
FAWLEY, except for purposes of examination and analysis as set forth in Section
3 hereinabove, or pursuant to a commercial license agreement with NCF or FAWLEY.
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Exhibit 2.6(A)
RECIPIENT specifically agrees that except pursuant to such a commercial
licensing agreement, it will not engage in any manner in the manufacture of
products the same as or essentially similar to the Products and will not engage
in any other activity that would tend to reduce the value of Products or Trade
Secrets.
5. Return of Materials. RECIPIENT agrees that, if no commercial licensing
agreement is executed between the parties within ninety (90) days of the date
hereof, it shall promptly return to NCF and FAWLEY all written information,
samples, models, documents, reports, drawings, designs, tools, equipment, plans,
proposals, marketing and sales plans, and other materials supplied to it by NCF
or FAWLEY pursuant to this Agreement (the "Materials"). In the event the parties
do enter into any commercial licensing agreement, RECIPIENT agrees that upon
termination of such commercial licensing agreement it shall promptly return the
Materials to NCF or FAWLEY.
6. No Assignment. RECIPIENT acknowledges and agrees that nothing in this
agreement shall be construed to assign to RECIPIENT any right, title or interest
in the Trade Secrets or the Products, or in any patents that may be granted
related thereto in the United States or any foreign country, or in any
application for such patent.
7. Waiver. If NCF or FAWLEY should at any time waive their rights due to a
breach by RECIPIENT of any provisions of this Agreement, such waiver is not
construed as a continuing
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Exhibit 2.6(A)
waiver of other breaches of the same or other provisions of this Agreement.
8. Arbitration and Controlling Law. Any controversy or claim arising out of
this Agreement or the breach thereof shall be finally settled by arbitration in
the State of California, County of Los Angeles, under the Rule of Conciliation
and Arbitration of the American Arbitration Association, by one or more
arbitrators appointed in accordance with said Rules, and such determination
shall be final and binding on both parties and either party may file the
findings of said arbitration as a final judgment in a competent court or agency
of any jurisdiction. The arbitrators shall construe this Agreement in accordance
with the Laws of the State of California and shall apply said Laws in the
resolution of any dispute hereunder.
9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
10. RECIPIENT's Use of Information Other Than Trade Secrets. RECIPIENT
shall not be restricted from disclosing or using, nor shall RECIPIENT have any
other obligations relating to, data or other information which are not Trade
Secrets. Trade Secrets shall not include any data or other information received
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Exhibit 2.6(A)
from NCF or FAWLEY which:
a) Prior to such receipt was known to RECIPIENT.
b) After receipt was disclosed to RECIPIENT by a third party who is
lawfully in possession of the Trade Secrets and is not under an
obligation of confidentiality to NCF or FAWLEY, or
c) Prior to receipt, or which after receipt, becomes through no
fault of RECIPIENT available to the public in the same form as
information received by RECIPIENT from NCF or FAWLEY.
11. Binding Effect. This Agreement shall bind and inure to the benefit of
the parties and their respective heirs, legal representatives, successors and
assigns.
The parties hereto have executed this Agreement as of the date first above
written.
NCF INDUSTRIES
RECIPIENT: /s/CAITHNESS RESOURCES INC.
---------------------------
BY: /s/[Illegible] BY: /s/[Illegible]
---------------------------- ------------------------
TITLE: /s/President TITLE: /s/President
---------------------------- ------------------------
/s/Norman C. Fawley
-------------------------
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Exhibit 2.6(A)
ATTACHMENT 1
"PRODUCTS"
HIGH PRESSURE REDUCED WALL AUTO-FRETTAGE COMPOSITE-
REINFORCED LINE PIPE SYSTEM (CRLP)
COMPOSITE REINFORCED PIPE
COMPOSITE CRACK ARRESTOR
COMPOSITE PIPELINE REPAIR SYSTEM
COMPOSITE REINFORCED CYLINDERS & TUBES
CLOCK SPRING PIPELINE REINFORCEMENT SYSTEMS
COMPOSITE REINFORCED STORAGE TANKS
Exhibit 2.6(A)
CNG CYLINDER CORPORATION
SECRECY AGREEMENT
This Agreement is made on February 9, 1990 by CNG CYLINDER CORPORATION (the
"CORPORATION") and CNG CYLINDER COMPANY OF NORTH AMERICA, L.P. ("RECIPIENT").
WHEREAS, the CORPORATION possesses specialized know-how, trade secrets,
patentable inventions, technologies and patent rights with respect to the CNG
Technology, as that term is defined in that certain Agreement of Limited
Partnership and Sublicense Agreement between Caithness/NCF Company, Korte
Investments, Inc., Caithness/NCF Limited Partnership, CNG Cylinder Corporation
and CNG Cylinder Company of North America, L.P.;
WHEREAS the CORPORATION has the right to disclose to RECIPIENT the
know-how, trade secrets, patentable inventions, technologies and patent rights
with respect to the CNG Technology;
WHEREAS RECIPIENT desires to evaluate the CNG Technology in connection with
assessing the business opportunities presented for its consideration by the
CORPORATION;
Exhibit 2.6(B)
It is therefore agreed:
1. Disclosure. The CORPORATION shall disclose to the designated employees
and agents of RECIPIENT, information which includes drawings, designs, plans,
proposals, marketing and sales plans, financial information, costs, pricing
information and concepts and ideas reasonably related to the CNG Technology (the
"Trade Secrets"), and such other information and assistance requested by
RECIPIENT which is reasonably necessary to enable it to understand and evaluate
the Trade Secrets and CNG Technology. Such disclosure shall be in written form
and marked Confidential. Disclosures made other than in written form, i.e.,
verbally or by observation, must be reduced to writing, marked Confidential and
delivered to RECIPIENT within thirty (30) days of disclosure in order to be
considered Trade Secrets hereunder.
2. Confidential Data. RECIPIENT acknowledges and agrees that Trade Secrets
shall be communicated by the CORPORATION and received by RECIPIENT in
confidence. RECIPIENT further acknowledges and agrees that the Trade Secrets are
proprietary information of the CORPORATION. It is understood that RECIPIENT
receives such Trade Secrets in trust solely for its own benefit or use and
RECIPIENT agrees that, absent prior written consent by or agreement with the
CORPORATION, the Trade Secrets shall not be directly or indirectly disclosed by
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Exhibit 2.6(B)
RECIPIENT to any other person or entity, governmental or private.
RECIPIENT shall at all times preserve the secrecy of the Trade Secrets and
shall prevent the disclosure of any Trade Secrets received hereby by any of
RECIPIENT's employees, officers, directors, business associates, subcontractors,
vendors, subsidiaries, affiliates or any other person obtaining knowledge of the
Trade Secrets through RECIPIENT. In view of this obligation, RECIPIENT agrees
and warrants that it shall use its best efforts, including the use of such
secrecy agreements as it deems necessary, to prevent any such disclosure.
All reasonable expenses incurred by the CORPORATION in furnishing the
assistance and information pursuant to this Section, including travel and per
diem expenses, and all other business-related expenses for the CORPORATION,
shall be paid by RECIPIENT within ten (10) days of submission of said expenses.
Any other special expenses agreed to in advance by RECIPIENT, such as testing,
shall also be paid by RECIPIENT within ten (10) days of submission of said
expenses.
3. Duty to Examine and Report. RECIPIENT shall diligently and thoroughly
examine and analyze the CNG Technology and Trade Secrets to assess their
marketability and development potential. Within sixty (60) days of the date
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Exhibit 2.6(B)
hereof, RECIPIENT shall prepare and deliver to the CORPORATION a confidential
report setting forth the specific efforts undertaken with respect to such
examination and analysis, as well as any findings, recommendations or
conclusions reached by RECIPIENT. Such report shall also indicate whether
RECIPIENT is interested in negotiating a commercial licensing agreement for
development of any or all of the CNG Technology or Trade Secrets.
4. Restrictions on Use of Clock Spring Technology and Trade Secrets.
RECIPIENT agrees that it will not make use of the CNG Technology or the Trade
Secrets obtained from the CORPORATION, except for purposes of examination and
analysis as set forth in Section 3 hereinabove, or pursuant to a commercial
license agreement with the CORPORATION. RECIPIENT specifically agrees that
except pursuant to such a commercial licensing agreement, it will not engage in
any manner in the manufacture of products the same as or essentially similar to
the CNG Technology and will not engage in any other activity that would tend to
reduce the value of the CNG Technology or Trade Secrets.
5. Return of Materials. RECIPIENT agrees that, if no commercial licensing
agreement is executed between the parties within ninety (90) days of the date
hereof, it shall promptly return to the CORPORATION all written information,
samples, models, documents, reports, drawings, designs, tools,
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Exhibit 2.6(B)
equipment, plans, proposals, marketing and sales plans, and other materials
supplied to it by the CORPORATION pursuant to this Agreement (the "Materials").
In the event the parties do enter into any commercial licensing agreement,
RECIPIENT agrees that upon termination of such commercial licensing agreement it
shall promptly return the Materials to the CORPORATION.
6. No Assignment. RECIPIENT acknowledges and agrees that nothing in this
Agreement shall be construed to assign to RECIPIENT any right, title or interest
in the Trade Secrets or the CNG Technology, or in any patents that may be
granted related thereto in the United States or any foreign country, or in any
application for such patent.
7. Waiver. If the CORPORATION should at any time waive its rights due to a
breach by RECIPIENT of any provisions of this Agreement, such waiver is not
construed as a continuing waiver of other breaches of the same or other
provisions of this Agreement.
8. Arbitration and Controlling Law. Any controversy or claim arising out of
this Agreement or the breach thereof shall be finally settled by arbitration in
the State of California, County of Los Angeles, under the Rule of Conciliation
and Arbitration of the American Arbitration Association, by one or more
arbitrators appointed in accordance with said Rules, and such determination
shall be final and
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Exhibit 2.6(B)
binding on both parties and either party may file the findings of said
arbitration as a final judgment in a competent court or agency of any
jurisdiction. The arbitrators shall construe this Agreement in accordance with
the Laws of the State of California and shall apply said Laws in the resolution
of any dispute hereunder.
9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original.
10. RECIPIENT's Use of Information Other Than Trade Secrets. RECIPIENT
shall not be restricted from disclosing or using, nor shall RECIPIENT have any
other obligations relating to data or other information which are not Trade
Secrets. Trade Secrets shall not include any data or other information received
from the CORPORATION which:
a) Prior to such receipt was known to RECIPIENT;
b) After receipt was disclosed to RECIPIENT by a third party who is
lawfully in possession of the Trade Secrets and is not under an
obligation of confidentiality to the CORPORATION; or
c) Prior to receipt, or which after receipt, becomes through no fault of
RECIPIENT, available to the public in the same form as information
received by RECIPIENT from the CORPORATION.
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Exhibit 2.6(B)
11. Binding Effect. This Agreement shall bind and inure to the benefit of
the parties and their respective heirs, legal representatives, successors and
assigns.
The parties hereto have executed this Agreement as of the date first above
written.
CAITHNESS/NCF COMPANY
RECIPIENT: CNG CYLINDER COMPANY
OF NORTH AMERICA, L.P.
BY: /s/Howard T. Phelan BY: /s/NCF
---------------------------- ---------------------------
Howard T. Phelan Norman C. Fawley
TITLE: Chairman TITLE: President
---------------------------- ---------------------------
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Exhibit 2.6(B)