TECHNOLOGY TRANSFER AGREEMENT
THIS TECHNOLOGY TRANSFER AGREEMENT (the "Agreement") dated as of September
18, 2002 is entered into by and between DCH Technology, Inc., a Delaware
corporation ("Seller"), and H2SCAN, a Washington limited liability company
("Buyer").
RECITALS
A. DCH Sensors, Inc. ("Sensors"), a wholly-owned subsidiary of Seller,
is engaged in the business of licensing, developing and commercializing
hydrogen-specific gas sensors (the "Business"). Certain of the intellectual
property used by Sensors in the Business is owned by Seller (the "Assets," as
more specifically described below in Section 1).
B. Sensors is in the process of an Assignment for Benefit of Creditors,
from Sensors to The C.F. Boham Campany, Inc., dba The Hamer Group ("Assignee")
with respect to certain assets necessary to operate the business of Sensors
("ABC"). Assignee intends to sell all of the assets received by it from Sensors
to Buyer, a recently formed Washington limited liability company.
C. In order to allow Buyer to operate the Business as formerly operated
by Sensors, Seller desires to sell to Buyer, and Buyer desires to purchase the
Assets from Seller, in accordance with the terms and subject to the conditions
hereinafter set forth.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. SALE AND PURCHASE OF THE ASSETS
(a) Description of Assets to be Acquired. Upon the terms and
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subject to the conditions set forth in this Agreement, at the Closing Date (as
defined in Section 6 of this Agreement), Seller shall convey, sell, transfer,
assign, and deliver to Buyer, and Buyer shall purchase from Seller, all right,
title and interest of Seller at the Closing Date in and to all of the assets set
forth below:
(i) Contracts. All of Seller's rights under those certain
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agreements, contracts, contract rights, licenses and licensing agreements as
listed on Exhibit A (collectively, the "Contracts"); and
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(ii) Intellectual Property and Intangible Assets. All
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intangible assets owned by Seller and used, usable or held for use in, or
otherwise required for the services of the Business including but not limited to
the licenses, United States patent rights, patents, patent applications,
provisionals, divisionals, continuations, continuations-in-part, reissuances,
renewals, re-examinations, additions and extension of any such patents and
patent applications, any foreign counterparts thereof and any related US or
foreign patents that may issue therefrom in the future (the "Patents"),
trademarks, trademark applications, trade names, service marks, service mark
applications (whether such marks are registered or at common law)(the
"Trademarks"), all inventions (whether patentable or not), invention
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disclosures, improvements, know-how, trade secrets, copyrights (whether
registered or not) proprietary information, computer programs, software code,
source and object code, technology and technical data, and all documentation
relating to any of the foregoing (collectively, the "Proprietary Rights"),
including without limitation those listed on Exhibit B attached hereto, and all
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of Seller's causes of action, judgments and claims or demands of whatever kind
or description arising out of or relating to the Business;
(iv) Permits and Licenses. All permits, licenses, product
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registrations, filings, authorizations, approvals or indicia of authority (and
any pending applications for any thereof) issued by any governmental agency,
authority or other instrumentality of the United States or any state or any
foreign country or political subdivision thereof relating to the Proprietary
Rights; and
(iii) Books and Records. All prototypes, samples, equipment,
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records, files, papers, drawings, engineering information, computer programs,
manuals and data, originals of all tangible records relating to the Proprietary
Rights and Patent certificates, Copyright or Trademark registrations thereof,
research and development records, and copies or originals of all customer
records, vendor records, financial and procedures information relating to
customers, files, papers and all other records relating to the Business
(collectively, the "Records").
(b) The assets, properties, and rights to be conveyed, sold,
transferred, assigned and delivered to Buyer pursuant to this Section 1 are
hereinafter collectively referred to as the "Assets."
2. PURCHASE PRICE. The aggregate purchase price ("Purchase Price") for
the Assets shall be One Hundred Thousand Dollars ($100,000). The Purchase Price
shall be paid at the Closing (as defined in Section 6) via wire transfer or
certified check.
3. OWNERSHIP RIGHTS
(a) Ownership. As of the Closing Date, Buyer shall own all right,
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title and interest in and to the Assets and Seller and Sensors shall have no
right, title or interest therein or thereto.
(b) Enforcement of Rights. Buyer shall have the sole right to
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control and the sole right to prosecute and/or enforce all Patents and
Trademarks and all infringements of Proprietary Rights by third parties, at
Buyer's expense, which rights Buyer may exercise in its sole and absolute
discretion.
(c) Further Assurances. Seller shall, upon the request of Buyer,
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reasonably cooperate with and assist Buyer in filing, prosecuting ,perfecting
and/or enforcing all US and foreign Patent, Trademark and/or Copyright to which
Buyer is entitled with respect to the Assets to the extent permitted or made
necessary by statute, regulation or government agency, including, without
limitation, executing and delivering all documents in connection therewith;
provided that Buyer shall reimburse Seller for reasonable out-of-pocket costs
and expenses incurred by Seller in connection with such cooperation. All such
Patents and Copyrights shall be applied for in the names of the actual inventors
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or authors and shall be assigned to Buyer, and Seller shall execute and deliver
such forms of assignment, powers of attorney and/or other documents which are
necessary to give effect to the provisions hereof.
(d) Power of Attorney. In the event that Seller is unable or
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unwilling to fully perform its obligations under Section 3(c) above, Seller
hereby irrevocably designates and appoints Buyer or its assigns and their duly
authorized officers and agents as Seller's agents and attorneys-in-fact to act
for and in Seller's behalf and instead of Seller, to execute and file any
Patent, Trademark or Copyright application or other document relating to the
Assets and to do all other lawfully permitted acts in connection with any of the
Assets.
4. REPRESENTATIONS AND WARRANTIES OF SELLER. Except as specifically set
forth in Seller's disclosure schedule, Seller hereby represents and warrants to
Buyer that:
(a) Incorporation and Authority. Seller is a corporation duly
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organized, validly existing and in good standing under the laws of the State of
Delaware and has all necessary corporate power and authority to enter into this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement by Seller, the performance by Seller of its obligations hereunder
and thereunder and the consummation by Seller of the transactions contemplated
hereby and thereby have been duly authorized by all requisite action on the part
of Seller, and to the best of Seller's knowledge after consulation with Seller's
legal counsel, no approval of the shareholders of Seller is required.
(b) Governmental Consents and Approvals. Seller shall promptly
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record the sale of its Proprietary Rights with the United States Patent and
Trade Mark Office ("USPTO") or other appropriate office.
(c) Validity, Execution. This Agreement has been duly and validly
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executed and delivered by Seller, and constitutes a valid and binding obligation
of Seller, enforceable in accordance with its terms.
(d) No Breach. To the best of Seller's knowledge, the
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consummation of the transactions contemplated hereby will not result in any
breach of, or constitute a default under, any material agreement or other
instrument or obligation to which Seller is a party or by which Seller or
Seller's property is bound, and will not result in the creation of any lien,
charge or encumbrance upon any of the Assets.
(e) Rightful Owner. Prior to execution of this Agreement, Seller
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was the sole and exclusive owner of all of the Assets and, as of the Closing
Date, Seller conveys to Buyer full, absolute, good and marketable title to the
Assets, to the best of Seller's knowledge, free and clear of all liens,
liabilities, charges or other encumbrances of any kind.
(f) No Previous Grants. Other than this Agreement, to the best of
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Seller's knowledge, Seller has not previously granted, and will not grant, any
rights in conflict with the rights assigned to Buyer herein;
(g) No Third Party Intellectual Property. To the best of
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Seller's knowledge, except for the rightful use of licenses under the Contracts
listed on Exhibit A attached hereto, no proprietary technology or materials of
any third party is incorporated in any way in the Assets;
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(h) No Infringement. To the best of Seller's knowledge, neither
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the Assets, nor any part thereof, as delivered and provided by Seller to Buyer,
infringes upon any intellectual property right of any third party, and to the
best knowledge of Seller, there is no infringement on the part of any third
party of the Assets; and
(i) No Claims. There is no pending nor, to the best knowledge of
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Seller, threatened claim or litigation contesting the validity, ownership or
right to sell, use, license or dispose of the Assets or any portion thereof nor,
to the best knowledge of Seller, is there any basis for any such claim, nor has
Seller received any notice asserting that any such portion of the Assets or the
proposed use, sale, license or disposition thereof conflicts or will conflict
with the rights of any other party, nor to the best knowledge of Seller is there
any basis for any such assertion.
(i) Operation of Business. The Assets, together with the Acquired
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Assets (as defined in that certain Asset Sale Agreement between the Assignee and
Buyer of even date herewith) constitutes all assets or property of any kind
required to operate the business of Sensors as it has been operated prior to the
ABC.
5. REPRESENTATIONS AND WARRANTIES OF BUYER. Except as specifically set
forth in the disclosure schedule, Buyer hereby represents and warrants to Seller
that:
(a) Organization. Buyer is a Washington limited liability company
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duly organized, validly existing and in good standing under the laws of the
State of Washington and has all necessary power and authority to enter into this
Agreement, to carry out its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Buyer, the performance by Buyer of its obligations hereunder and the
consummation by Buyer of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of Buyer.
(b) Validity, Execution. This Agreement has been duly and validly
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executed and delivered by Buyer, and constitutes a valid and binding obligation
of Buyer, enforceable in accordance with its terms.
(c) No Breach. To the best of Buyer's knowledge, the consummation
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of the transactions contemplated hereby will not result in any breach of, or
constitute a default under, any material agreement or other instrument or
obligation to which Buyer is a party.
6. THE CLOSING.
(a) Date and Location. The closing (the "Closing") of the
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transactions provided for herein shall take place at the offices of Buyer, by
5:00p.m., local time, on September 18, 2002 or at such other time and place as
Seller and Buyer may agree upon in writing (the "Closing Date"). The
transactions contemplated herein may be closed via the exchange of facsimile
signature pages followed by overnight delivery of original executed documents.
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The Closing is contingent upon the execution of certain other documents,
including without limitation the following: (i) the purchase of assets by Buyer
from Assignee pursuant to the Asset Sale Agreement of even date herewith; (ii)
the execution of the LLC Agreement for H2scan LLC, and receipt by H2scan of the
capital investments outlined therein; and (iii) the amendment of the Sandia
License (as defined below in Exhibit A) in form satisfactory to Buyer.
(b) Documents Delivered by Seller. At the Closing, Seller shall
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deliver to Buyer, all duly and properly executed, the following:
(i) An Officer's Certificate executed by the President of
Seller, dated as of the Closing, certifying that all of Seller's representations
and warranties are true and correct as of the Closing Date and Seller has
performed all of its covenants and obligations required to be performed by it on
or prior to Closing;
(ii) (ii) An Assignment Agreement transferring Seller's
rights, title and interest to the Trademarks;
(iii) Resolution of the Board of Directors of Seller
approving the sale of Assets; and
(iv) Consent of Sandia Corporation ("Sandia") where
applicable.
(c) Documents and Instruments delivered by Buyer. At the Closing,
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Buyer shall deliver to Seller, all duly and properly executed, the following:
(i) An Officer's Certificate executed by the President of
Buyer, dated as of the Closing, certifying that all of Buyer's representations
and warranties are true and correct as of the Closing Date and Buyer has
performed all of its covenants and obligations required to be performed by it on
or prior to Closing;
(ii) The consideration set forth in Section 2 hereof; and
(iii) Resolutions of the Board of Directors of Buyer
approving the purchase of the Assets.
(d) Delivery of Possession of the Assets. Simultaneously with
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such deliveries, Seller will take all such steps as may be requested by Buyer to
put Buyer in actual possession and operating control of the Assets.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. All of the
obligations of Buyer under this Agreement are subject to the fulfillment prior
to or on the Closing Date of each of the following conditions, any of which
Buyer may waive in whole or in part:
(a) Representations True. All representations and warranties made
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by Seller in this Agreement, or in any written statement delivered by Seller to
Buyer pursuant to this Agreement, shall be true on and as of the Closing Date as
though such representations and warranties were made at and as of such date.
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(b) Performance. Seller shall have performed and complied with
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all agreements or conditions required by this Agreement to be performed and
complied with by Seller prior to or on the Closing Date.
(c) Delivery of Documents. There shall have been delivered to
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Buyer the documents and instruments set forth in Section 6.
8. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. All of the
obligations of Seller under this Agreement are subject to the fulfillment prior
to or on the Closing Date of each of the following conditions, any of which
Seller may waive in whole or in part:
(a) Representations True. All representations made by Buyer in
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this Agreement or in any written statement delivered by Buyer to Seller pursuant
to this Agreement shall be true and correct as of the Closing Date as though
such representations and warranties were made as of such date.
(b) Performance by Buyer. All covenants, conditions and other
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obligations under this Agreement that are to be performed or complied with by
Buyer shall have been fully performed and complied with at or prior to the
Closing, including the delivery of the instruments and documents;
(c) Delivery of Documents. There shall have been delivered to
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Seller the documents and instruments set forth in Section 6.
9. TRANSFER AND FURTHER ASSURANCES. From time to time after the
Closing Date, at the request of Buyer, Seller shall, without further
consideration, deliver such further instruments of transfer and take such other
actions as may be reasonably necessary in order to more effectively transfer any
of the Assets to Buyer.
10. MISCELLANEOUS.
(a) Expenses. Each party shall bear its own expenses incurred in
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connection with this Agreement and the transactions contemplated hereby.
(b) Binding Effect. This Agreement shall be binding upon and
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shall inure to the benefit of the parties, and their heirs, personal
representatives, executors, administrators and assigns.
(c) Attorneys' Fees. Should any litigation be commenced between
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the parties hereto, or their personal representatives, concerning any provision
of this Agreement, or the rights and duties of any person in relation thereto,
the party or parties prevailing in such litigation shall be entitled, in
addition to such other relief as may be granted, to a reasonable sum for its
attorneys' fees and costs in such litigation which shall be determined by the
court in such litigation or in a separate action brought for that purpose.
(d) Entire Agreement. This Agreement including the Exhibits
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hereto, contains the entire agreement of the parties hereto, and supersedes any
prior written or oral agreement between them concerning the subject matter
hereof. There are no representations, agreements, arrangements or
understandings, oral or written, between the parties hereto, relating to the
Technology Transfer Agreement - Execution 6
subject matter hereof, which are not fully expressed or incorporated by
referenced herein.
(e) Governing Law. All questions with respect to the construction
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of this Agreement and the rights and liabilities of the parties hereto shall be
governed by the laws of the State of California.
(f) Notices. Whenever this Agreement provides for the delivery of
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a notice or other communications, it shall be deemed sufficient if in writing
and served either personally by United States mail, or a reputable overnight
mail carrier postage prepaid, addressed as follows:
BUYER : H2SCAN
16560 Vasquez Canyon Road
Canyon Country, CA 91351
Phone: (661) 775-9575
Fax: (661) 775-9515
Attention: Steven A. Huenemeier
President
SELLER: DCH Technology, Inc.
24832 Avenue Rockefeller
Valencia, California 91355
Phone: (661) 775-8120
Attention: John Donohue
Chief Executive Officer
Any notice so sent shall be deemed received the same day if delivered
personally, the next day if sent by overnight mail, or three days after mailing
if sent by U.S. mail.
(g) Amendments. This Agreement may be waived, altered, amended or
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repealed, in whole or in part, only by the written consent of both Buyer and
Seller.
(h) Counterpart Execution. This Agreement may be executed in any
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number of counterparts, each of which shall be an original, but all of which
shall constitute one instrument.
(i) Severability. If one or more provisions of this Agreement are
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held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision was so excluded and shall be enforceable in accordance with its
terms.
(j) Equitable Remedies. It is understood and agreed that breach
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of this Agreement will cause irreparable damage for which recovery of money
damages would be inadequate, and that any party may seek timely injunctive
relief, without obligation to post a bond, to protect such party's right in
addition to any and all remedies available at law.
(k) Confidentiality. Seller agrees to treat the Assets as
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confidential information and will take reasonable steps to keep the Assets
confidential.
Technology Transfer Agreement - Execution 7
(l) Non-Waiver. No term or provisions hereof shall be deemed
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waived, and no breach excused unless such waiver or consent shall be in writing
and signed by the party claimed to have waived or consented. Any consent by any
party to, or waiver of, a breach by the other, whether express or implied, shall
not constitute a consent to, waiver of, or excuse for any other different or
subsequent breach.
(m) Assignment. This Agreement shall inure to the benefit of and
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be binding upon each party's successors and assigns.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed date first above written.
BUYER: H2SCAN LLC
By: /s/ Steven A. Huenemeier
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Its: President and CEO
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SELLER: DCH TECHNOLOGY, INC.
By: /s/ John T. Donohue
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Its: Chief Executive Officer
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TABLE OF EXHIBITS
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EXHIBIT A - Contracts
EXHIBIT B - Intellectual Property & Intangible Assets
Technology Transfer Agreement - Execution 9
EXHIBIT A
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CONTRACTS
1. License Agreement between Sandia Corporation and DCH Technology, Inc.,
License No. 96-C00333, as amended (together, the "Sandia License).
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EXHIBIT B
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INTELLECTUAL PROPERTY & INTANGIBLE ASSETS
TRADEMARKS AND SERVICE MARKS
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REGISTRATION
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MARK NUMBER REGISTRATION DATE
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ROBUST HYDROGEN SENSOR 2459306 June 12, 2001
HYDROGEN IS THE FUTURE, WE
CAN SENSE IT 2561317 April 16, 2002
H2SCAN Not registered.
PATENTS
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NONE
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