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EXCLUSIVE DISTRIBUTION AND MANUFACTURING LICENSE

AGREEMENT - VEHICLES
 
THIS AGREEMENT ("Agreement"), effective this 27th day, of August, 2009
("Effective Date"), is entered into by Serenergy A/S, CVR-no. 29 61 66 47,
Majsmarken 1, DK-9500 Hobro, Denmark (the "Company") a Denmark Corporation
(hereinafter "Serenergy" or the "Supplier" or a "Party") a Danish Corporation,
and Inscrutor Inc., a company incorporated in the State of Delaware, company
number EID 32-0251358, (hereinafter "Inscrutor" or the "Distributor" or a
"Party"), a Delaware Corporation.
 
WHEREAS, the Supplier is in the business of developing, manufacturing and
selling fuel cells and related products throughout the world;

WHEREAS, the Distributor is in the business of market development and business
devel­opment and wishes to distribute globally the Supplier's products within
the segments for all types of vehicles;

WHEREAS, the Supplier wishes to provide all such products to the Distributor for
distri­bution globally to the segments for all types of vehicles on an exclusive
basis;

NOW THEREFORE, in consideration of the promises and agreements set forth herein,
the parties, each intending to be legally bound hereby, do promise and agree as
follows:

 

1.  
Definitions
 
1.1  In this Agreement the terms mentioned below shall have the following
meaning:  
 
    Agreement 
Shall mean this agreement, including schedules.
 
  Effective Date
Means the date first written above.
 
  Confidential Information Means any information of any kind or nature
whatsoever, whether written or oral, includ­ing, without limitation, this
Agreement, fi­nancial information, trade secrets, customer

 
 
 
 

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lists and other information, regarding the Par­ties and the Products, which is
not known to the general public.
 
  Global
Means all countries in the world without limita­tion.
 
  Products
Means all the Supplier's products from time to time.
 
  Term
Means the period commencing on the Effec­tive Date and terminating as set forth
in Clause 10 hereof.
 
  Trademarks
Means all trademarks, service marks, logos, brand names, trade names, domain
names and/or slogans used by the Supplier and /or the Distributor in connection
with the Prod­ucts from time to time (whether registered or unregistered).
 
  Segment
Means the segments for all types of vehicles driving on wheels intended for
driving on public roads (i.e. excluding aeroplanes, golf carts and work vehicles
such as fork lifts and tractors), including but not limited to cars of any kind,
busses of any kind, vans of any kind, trucks of any kind and motorcycles of any
kind.
 
  USD Means US Dollars. The Parties have agreed that the exchange rate between
USD and DKK shall be calculated in accordance with the official exchange rate of
Danmarks Na-tionalbank on the date in question. However, the Parties have agreed
that the exchange rate between USD and DKK shall in no case be lower than 5.10,
e.g. 100 USD shall at all times be equal to minimum DKK 510.

 
 
 

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2.
Grant of Right to Distribute and manufacture
 
2.1
Appointment. Subject to the terms and conditions of this Agreement, the Supplier
hereby appoints the Distributor as its Global exclusive distributor of the
Products under which the Distributor has the exclusive right to conduct all
sales, marketing and project-development within the Segment for the Term (see
Clause 10), and the Distributor hereby accepts such appointment.
 
2.2
Restriction on the Distributor's activities. The Distributor shall not, directly
or indirectly i) engage in any promotional activities relating to the Products
directed primarily to customers outside the Segment, or ii) solicit orders for
Products from any prospective customer not be­longing to the Segment.
 
2.3
 Manufacturing license. The Supplier hereby grants to the Distributor for the
Term an exclu­sive irrevocable license to manufacture the Products and/or other
products based on the Supplier's technology to be sold by the Distributor to
customers within the Segment. The Distributor has the right to decide, at the
Distributer's sole discretion, whether the Products and/or other products based
on the Supplier's technology shall be (i) manufactured by the Supplier, cf.
Clause 6.2, (ii) manufactured and/or production coordinated by the Distributor,
cf. Clause 7.1, or manufactured and/or production coordinated by an external
manufacturer, cf. Clause 7.2.
 
2.4
Restrictions on the Supplier's Activities. The Supplier shall not, directly or
indirectly i) en­gage in any promotional activities relating to the Products
directed primarily to any custom­ers within the Segment, or (ii) solicit orders
for Products from any prospective customer within the Segment. The Supplier is
entitled (i) to participate in scientific conferences, semi­nars, etc. within
the Segment, and (ii) to perform work within EU with fully publicly funded,
either Danish or EU funded, development projects within the Segment, without the
Distribu­tor's prior written consent.
 
2.5 Reservation of Rights by the Supplier. The Supplier reserves the right to
take the following actions at any time upon sixty (60) calendar days prior
written notice to the Distributor without liability: (i) to add Products to be
used within the Segment, (ii) to modify the design of or upgrade the Products or
any part of the Products to be used within the Segment. The Supplier shall be
entitled to cancel Products upon one (1) year's prior written notice to the
Distributor.

 
 
 

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3.
Trademarks and intellectual property rights
 
3.1 
Ownership to Trademarks and other intellectual property rights:
 
3.1.1
The Supplier shall have exclusive ownership to all Trademarks and other
intellectual prop­erty rights connected to products invented and/or developed by
the Supplier.
 
3.1.2
The Distributor shall have exclusive ownership to all Trademarks and other
intellectual property rights connected to products invented and/or developed by
the Distributor.
 
3.1.3
The Supplier and the Distributor shall have joint ownership to all Trademarks
and other in­tellectual property rights connected to products invented and/or
developed jointly by the Supplier and the Distributor.
 
3.2
Grant of Rights. The Supplier hereby grants to the Distributor for the Term, and
subject to the terms and conditions herein, an exclusive irrevocable right to
use the Supplier's Trademarks and other intellectual rights from time to time in
connection with the marketing, use, sale and service of the Products within the
Segment in accordance with the terms and conditions of this Agreement.
 
4.  
The Distributor's Obligations
 
4.1
Promotion Efforts. The Distributor shall no later than 6 months after the
Effective Date es­tablish a sales department located within the United States
focusing on the Segment, which shall ensure that all relevant potential
customers within the Segment will be contacted and presented with the
possibility of implementing the Products as a component for a motor-system.
Immediately upon the establishment of the said sales department the Distributor
shall facilitate a fulltime sales person to promote the sales of the Products
within the Seg­ment. The Distributor may develop materials in connection with
the promotion of the sale of Products (including, but not limited to, product
brochures). The Distributor shall submit cop­ies of such promotional material to
the Supplier.
 
4.2
Customer Service. No later than 6 months after the Effective Date the
Distributor shall pro­vide effective customer service (including, but not
limited to, taking orders, responding to customer inquiries, fulfilling requests
for quotes on Product pricing and providing after-sales service) on a timely
basis and shall provide such assistance and information to customers.
 
4.3 Reports. With effect from Q2 2010 the Distributor shall provide the Supplier
with quarterly operation reports of the Distributor's activities to market the
Products within the Segment.

 
 

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4.4
Annual Report. The Distributor shall provide the Supplier with an annual report
within five (5) months after the end of each calendar year, for the first time
for the calendar year 2010, showing annual sales figures and the quantity of
Products on hand as at 31 December of each year.
 
4.5
Product Recalls. In order to assist the Supplier in the event of a recall of
Products sold by the Distributor within the Segment, the Distributor shall
maintain a complete and current listing of the locations of all Products in the
Distributor's inventory and the names of customers within the Segment who have
purchased Products from the Distributor together with the dates of such
purchases and Product serial numbers.
 
4.6
Order Forecasts. With effect from 1 March 2010 the Distributor shall prior to
the beginning of each calendar quarter, for the first time prior to Q2 2010,
provide to the Supplier a written forecast of the number and type of Products
expected to be ordered in the following three (3) month period. The
Distributor's forecasts are not binding on the Distributor and will be used by
the Supplier only for planning purposes.
 
4.7
 Pricing - customers. The Distributor shall be free to establish its own pricing
for the Prod­ucts within the Segment. The Distributor shall notify the Supplier
of its pricing, as in effect from time to time.
 
5.
The Supplier's Obligations
 
5.
Supply. The Supplier agrees to sell to the Distributor the Products and spare
parts ordered by the Distributor in accordance with the terms of this Agreement.
The Supplier shall provide spare parts for repairing the Products for a period
of not less than two (2) years from the date of the last shipment of a
particular type of Product to the Distributor.
 
5.2 Marketing Assistance. The Supplier shall translate all existing promotional
material from time to time into the English language and provide this to the
Distributor in written and elec­tronic version. Furthermore, the Supplier agrees
to actively support the Distributor in the Distributor's process of developing
promotional material for the sales of the Products within the Segment, including
but not limited to proof reading, submission of technical input, pic­tures,
etc., in connection with the Distributor's promotion of the sale of the Products
within the Segment.

 
 
 

 
 

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5.3
Technical Support. The Supplier shall provide technical support to the
Distributor via tele­phone consultations during normal business hours of the
Supplier. Further, the Supplier shall provide to the Distributor a range of
after-sales technical information in the English lan­guage at regular intervals
to ensure that the Distributor has all current and relevant informa­tion
regarding the Products. The Supplier shall allocate one qualified and
high-skilled em­ployee as the Distributor's point of contact, who shall be made
available to the Distributor by the Supplier for participation in meetings
regarding various projects within the Segment. The said employee shall report
directly to the management of the Supplier.
 
5.4
In case the Distributor decides to manufacture the Products and/or other
products based on the Supplier's technology under the manufacturing license
granted by the Supplier to the Distributor, cf. Clause 2.3, in the form of the
Distributor's own manufacturing, cf. Clause 7.1 and/or in the form of external
manufacturing, cf. Clause 7.2, the Supplier is obligated at its own costs to
supply with all competence necessary the technology transfer necessary for the
Distributor to carry out such own manufacturing cf. Clause 7.1 and/or external
manufac­turing, cf. Clause 7.2.
 
5.5
Training. The Supplier shall provide training to the Distributor's staff,
external sales agents, etc., in connection with the marketing, sale and service
of the Products at regular intervals. The Supplier and the Distributor shall pay
their own costs for travel, food and lodging dur­ing the training period. It is
the intention of the Supplier and the Distributor that such train­ing shall take
place every second time at the Supplier's premises and every second time at the
Distributor's premises. In case the Supplier participates in meetings with the
Distribu­tor's sales staff, customers, etc., upon the Distributors prior written
request, the Supplier is entitled to include the Supplier's travel expenses
including food and lodging in the Sup­plier's calculation of the Supplier's
direct variable production costs, cf. Clauses 6.1 and 6.2. In the event that the
Distributor assigns this Agreement to a third party, cf. Clause 13, such third
party shall accept to cover any and all direct variable costs the Supplier may
have pro­viding the work described in this Clause 5.5.
 
5.6 Approvals. The Supplier is responsible for obtaining all applicable
regulatory approvals necessary to permit the Distributor to market, sell and
service the Products within the Seg­ment. The Supplier shall bear all costs
associated with such approvals. In the event that the Distributor assigns this
Agreement to a third party, cf. Clause 13, such third party shall ac­cept to
cover any and all direct variable costs the Supplier may have obtaining such
regula­tory approvals described in this Clause 5.6.    

 
 

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5.7
Product liability. The Supplier is solely responsible for any product liability
which arises from the Products and/or products based on the Supplier's
technology. The Supplier shall indemnify, protect and hold harmless the
Distributor, without the execution of any further documents, from and against
all losses, damages, injuries, claims, demands and expenses, including
reasonable attorneys' fees, for all proceedings, trials and appeals arising out
of or connected with or in any manner related to the product liability.
 
6.  
Prices and Payment
 
6.1
 
 
 
6.2
 
 
 
6.3
 
 
 
7.
Distributor's manufacturing and external manufacturing -Royalties
 
 
7.1  

 

 
 

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7.2
 
 
 
7.3
 
 
 
7.4
 
 
 
7.5
 
 
 
8.
Confidentiality
 
8.1
Each Party undertakes not to use or disclose any Confidential Information unless
(i) re­quired to do so by law or pursuant to any order of court or other
competent authority or tribunal (ii) required to do so by any applicable stock
exchange regulations or the regu­lations of any other recognised market place
(iii) such disclosure has been consented to by the other Party in writing (such
consent not to be unreasonably withheld) or (iv) to its professional advisors
who are bound to such party by a duty of confidence which applies to any
information disclosed. If a Party becomes required, in circumstances
contemplated by (i) or (ii) to disclose any information, the disclosing Party
shall use its reasonable endeavours to consult with the other Party prior to any
such disclosure.
 
8.2 If this Agreement is terminated, irrespective of the cause of such
termination, the Par­ties shall - and shall procure that its advisors - upon a
request in writing from a Party, return or destroy any document containing
Confidential Information, and any copy thereof. Notwithstanding the above, the
Parties shall be entitled to retain one (1) copy solely for archival purposes
and the Party's advisors shall be entitled to retain copies to the extent
required by applicable law.

 
 
 

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9. 
Infringement of Trademarks and other intellectual property rights
 
9.1
The Distributor and the Supplier agree that if it is notified or otherwise
obtains knowledge of any actual or alleged infringement of the Trademarks or any
other intellectual property rights of a Party by a third party, it shall
promptly notify the other Party. No legal proceed­ings shall be instituted by a
Party against any third party in respect of any such actual or al­leged
infringement without the prior written consent of the Party that, exclusively or
jointly, has ownership to the Trademark or other intellectual property rights,
cf. Clause 3.1.
 
10. 
Term and Termination
 
10.1
Term. This Agreement shall commence on the Effective Date and shall continue for
a term of thirtysix (36) months following the Effective Date (the "Initial
Term"). Upon expiration of the Initial Term this Agreement may be terminated by
each Party with thirtysix (36) months prior written notice to the end of a
calendar month. Thereafter, this Agreement will be automatically renewed for an
additional one (1) year term (the "Renewal Term") unless terminated by either
Party upon ninety (90) calendar days prior written notice prior to the
expiration of the Initial Term or any Renewal Term.
 
10.2
Exclusivity. The Distributor has on this date entered into an Investment
Agreement with the Supplier. If Inscrutor by 31 May 2010 has not raised
investments in Inscrutor for a minimum subscription amount of USD 1,500,000, the
exclusivity of this Agreement shall automatically lapse on 31 May 2010 with the
effect that the Distributor shall be entitled to continue as the Supplier's
global distributor of the Products from time to time within the Segment on a
non-exclusive basis. In such case, the Distributor shall be entitled to purchase
the Products from the Supplier at the lowest price, at which the Supplier sells
the Products to other distributors.
 
10.3
Material Breach. This Agreement may be terminated by either Party by giving
thirty (30) calendar days written notice of such termination to the other Party
in the event of a material
 

 
 

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breach by the other Party. "Material breach" shall include: (i) any violation of
the terms of Clauses 2.2, 2.3, 3, or 8, (ii) any other breach that a Party has
failed to cure within thirty (30) calendar days after receipt of written notice
by the other Party, (iii) any activity or assistance by a Party of challenging
the validity or ownership of the Trademarks or any other intellec­tual property
rights of the Supplier and/or the Distributor, (iv) an act of gross negligence
or wilful misconduct of a Party, or (v) the insolvency, liquidation or
bankruptcy of a Party.
 
11.
Sell-Off Period; Repurchase of inventory
 
11.1
Sell-Off Period. Upon termination or expiration of this Agreement, the
Distributor shall have the right to sell off its remaining inventory of Products
and spare parts on a non­exclusive basis for so long as such inventory exists;
provided, however, that the Distributor shall comply with all terms and
conditions of this Agreement, including those that restrict the Distributor's
activities. The Distributor's rights under this Clause 10.1 are expressly
subject to the Supplier's option to repurchase the Distributor's inventory of
Products and spare parts as set forth in Clause 11.2 hereof.
 
11.2
Option to Repurchase. Upon termination or expiration of this Agreement, the
Supplier shall have the option to repurchase the Distributor's inventory of
Products and spare parts, which option must be exercised in writing within
thirty (30) calendar days after such termination or expiration. If the Supplier
so exercises such option, the Supplier shall repurchase the Distributor's
inventory of Products and spare parts that are saleable and in the original
packages and unaltered from their original form and design. Any such repurchase
of the Distributor's inventory of Products and spare parts shall be at the
original purchase price paid by the Distributor to the Supplier hereunder. The
Supplier shall pay the Distributor for such repurchased Products within thirty
(30) calendar days after the Supplier receives those Products and spare parts.
 
12.
Independent Contractors
 
12.1   It is understood that both Parties hereto are independent contractors and
engage in the operation of their own respective businesses. Neither Party hereto
is to be considered the agent of the other Party for any purpose whatsoever and
neither Party has any authority to enter into any contract or assume any
obligation for the other Party or to make any warranty or representation on
behalf of the other Party. Each Party shall be fully responsible for its own
employees, servants and agents, and the employees, servants and agents of one
Party shall not be deemed to be employees, servants and agents of the other
Party for any purpose whatsoever.

 
 
 

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13.
Assignment
 
13.1
The Distributor is entitled to - in whole or in part - to assign this Agreement
to any third party, provided that the assignee respects and assumes all rights
and obligations of the assignor.
 
13.2
Notwithstanding Clause 13.1, the Distributor is obligated to offer in writing
the Supplier to buy this Agreement as the Supplier has the right of first
refusal. The offer shall comprise the price as well as other conditions under
which the potential assignment is to take place. The Supplier shall no later
that 14 calendar days after receiving such written offer give notice to the
Distributor that the Supplier wishes to exercise its right of first refusal. In
case the Sup­plier wishes to exercise its right of first refusal, the Supplier
shall no later that three (3) months after giving notice to the Distributor pay
to the Distributor an amount equal to the Distributors share of the purchase
price, cf. the table set out in Clause 13.3.
 
13.3 Provided that the Supplier has waived its right of first refusal, cf.
Clause 13.2, the Distributor is entitled to assign- in whole or in part - this
agreement to any third party. In such case, the Distributor is obligated to pay
to the Supplier a percentage of any profit the Distributor may make as a result
of such assignment. The profit is defined as the amount paid by the assignee to
the Distributor less transaction costs, legal fees, etc.  However, the
Distributor is obligated to pay to the Supplier a minimum payment of 
USD  xxxxxxxxxx in accordance with the following table:

 
 

 Contract size (mill. $)  Inscrutor Share  Serenergy Share*                    
                 * Minimum Payment xxxxxxxxxx  

 
 
 
 

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14. 
Contact information
 
The Distributor:
 
Inscrutor Inc.
Company No. 32-0251358
410 Park Avenue, 15th floor
New York, NY 10022
United States
 
The Supplier:
 
Serenergy A/S
CVR-no. 29 61 66 47
Majsmarken 1
DK-9500 Hobro
Denmark
 
15.    
Governing law and Arbitration
 
15.1
This Agreement, including the Schedules, shall be governed by and construed in
accor­dance with the laws of Denmark, without giving effect to any choice of law
or conflict of law provisions.
 
15.2
Any dispute or controversy arising out of or in connection with this Agreement,
its con­clusion, implementation or any breach of its provisions or its
termination shall - failing an amicable settlement - be settled with final and
binding effect by arbitration in Co­penhagen in accordance with the rules of the
rules of the Danish Institute of Arbitration (Copenhagen Arbitration). The
arbitration panel shall have two arbitrators and an um­pire appointed by the
institute unless the parties to the dispute agree otherwise. The Distributor and
the Supplier shall each appoint one arbitrator. The language of the arbi­tration
shall be English unless the parties to the dispute agree otherwise.
 
16. 
General
 
16.1 This Agreement constitutes the entire agreement of the Parties on the
subject hereof and su­persedes all prior understandings and instruments on such
subject. In the event of any dis­crepancy between the provisions of the
Exclusive Distribution Agreement and the provisions of the schedules, the terms
and conditions of the Exclusive Distribution Agreement shall

 
 

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prevail. This Agreement may not be modified other than by a written instrument
executed by duly authorized representatives of the Parties.
 
17.  
Survival of Provisions
 
17.1
The following provision of this Agreement shall survive the termination of this
Agreement: Clauses 8,11, and 17 of the Exclusive Distribution and Manufacturing
License Agreement and all other provisions of the Exclusive Distribution and
Manufacturing License Agreement that by their nature extend beyond the
termination of this Agreement.
 
18.  Schedules  
 
Schedule 6.1                                        Price calculation -
development phases.
Schedule 6.2                                        Price calculation -
Supplier's manufacturing

 
 
IN WITNESS WHEREOF, and intending to be legally bound, the Parties have duly
executed this Agreement by their authorized representatives as of the date first
written above.
 
 

Signed for and on behalf of  
Signed for and on behalf of
 
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