Exhibit 10.1

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

COMMERCIALIZATION AGREEMENT

 

This Commercialization Agreement (“CA”) has been entered into this October 23,
2013 (“Effective Date”) by and between Ocean Power Technologies, Inc. (“OPT”)
with a place of business at 1590 Reed Road, Pennington, New Jersey, USA and
Mitsui Engineering & Shipbuilding Co., Ltd. (“MES”) with a place of business at
6-4, Tsukiji 5-chome, Chuo-ku, Tokyo 104-8439, Japan (each a “Party” and
collectively, the “Parties”).

 

WHEREAS, OPT and MES have entered into the Joint Development Agreement between
the Parties dated January 23, 2013 (“JDA”);

 

WHEREAS, MES has passed the [***] test on March 4, 2013 with a good result using
OPT’s PowerBuoy® technology;

 

WHEREAS, the Parties wish to cooperate with each other in commercializing OPT’s
PowerBuoy® technology including its improvements by entering into CA; and

 

WHEREAS, the Parties have entered into the Letter of Intent regarding this CA,
dated April 26, 2013;

 

NOW THEREFORE, the Parties hereby confirm and agree as follows:

 

Article 1 (Purpose)

 

The purpose of this CA is (i) to confirm the joint development within the
framework of [***] Project by the Parties, (ii) to set out the terms of the
licensing and other financial arrangements of the technologies of OPT’s
PowerBuoy® technology and of its Improvement as envisioned in the JDA a copy of
which is attached hereto as Appendix 1, and (iii) to set out the rules on
licensing after this CA and/or JDA has ended.

 

Article 2 (Definitions)

 

Capitalized terms used herein shall have the following meanings:

 

2.1

“AIMS” shall mean OPT’s wave capture optimization and control systems including
algorithm and associated source code for wave capture optimization.

 

2.2

“Collection Amount” shall mean the amount which MES actually receives from its
customer, in total or in installments, as consideration for MES sale of Products
and related services to the customer. If such customer becomes insolvent, the
Collection Amount includes the amount which MES receives in accordance with the
insolvency procedure, such as dividends.

 

2.3

“Documented Purchase Price of the High Voltage Power Cable” shall mean the
purchase price of such cable from the cable supplier excluding [***].

 

2.4

“[***]” shall mean [***] as referred to in Article 5.3 of JDA.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

2.5

“[***] Contract 2013” shall mean a contract between [***] and MES dated March
19, 2013 on a joint research of which the research period is expected to end on
March 20, 2015.

 

2.6

“[***] Project” shall mean the joint research concerning the wave energy power
generation between [***] and MES pursuant to the [***] Contract 2013 and
possible subsequent contract(s) between [***] and MES, which is expected to last
until 2017 or 2018, as the case may be.

 

2.7

“OPT’s Trademarks” shall mean “PowerBuoy®” and/or (Japanese katakana for
“PowerBuoy”).

 

2.8

“PTO” shall mean the power take-off system with respect to wave energy, which
includes (i) for hardware: single line diagrams, electricity drawings,
mechanical drawings, and (ii) for software: the controlling system including
algorithm and associated source code for power management. For the sake of
precaution, Intellectual Property Rights of PTO shall solely be owned by OPT.
K-Model and N-Model are not included in the PTO within this meaning.

 

2.9

“Term” shall mean the term of this CA.

 

Unless otherwise expressly defined hereunder, all defined terms in the JDA shall
also apply to this CA.

 

Article 3 (Confidential Information)

 

The Parties shall keep records of new Confidential Information disclosed by one
Party to the other Party after January 23, 2013 in writing, materially in the
form of Appendix 2.

 

Article 4 ([***] Project)

 

The Parties shall work together on [***] Project, including the phases pursuant
to [***] Contract 2013.

 

Article 5 (Terms and Conditions of License)

 

The following terms shall apply to the licenses granted under JDA.

 

 

1.

OPT agrees to make up to [***] PowerBuoys royalty-free throughout the entire
experimental phases funded by [***] which starts in April 2013 and is expected
to last until 2017 or 2018 as the case may be, on condition that such deployment
is a clear requirement documented by [***] in their contract. If more than [***]
PowerBuoys (including any parts thereof) shall be manufactured within the
framework of such [***] Project, the Royalties are payable under the terms
hereunder with respect to any PowerBuoys (including any parts thereof) except
for the first [***].

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

 

2.

MES shall have the sole authority to market, manufacture, sell and maintain the
OPT System for use in the MES-Territory in accordance with the terms of this CA,
subject to the obligation for MES to purchase PTO from OPT under applicable
terms of the JDA, this CA and the PTO-Frame Sales Agreement (as defined below).
MES shall be the prime contractor in all such contracts within the
MES-Territory. However, MES may not make any commitments or warranties on behalf
of OPT without OPT’s prior written approval.

 

 

3.

For Combined Utility Solution or APB including [***] and related services sold
by MES in the MES-Territory, MES shall purchase all of its requirements for PTO
units from OPT. However, MES may use the K-Model or N-Model control system for
wave capture optimization or OPT’s control system for wave capture optimization
in conjunction with OPT’s PTO subject to the various related terms and
provisions in the JDA, this CA and the PTO-Frame Sales Agreement.

 

 

4.

OPT shall sell, or provide technology access to, the OPT System for use in the
MES-Territory only in cooperation with MES and subject to the terms of this CA,
and OPT shall not license or sell the OPT System into the MES-Territory or
otherwise cooperate with any third party to distribute a wave energy based
electrical power generation solution in the MES-Territory.

 

 

5.

MES shall not license, sell or otherwise distribute, or cooperate with any third
party to distribute, a wave energy based electrical power generation solution in
the MES-Territory other than the OPT System and [***].

 

 

6.

Unless otherwise agreed in writing between the Parties, each Party shall be
responsible for the support to its own customers within its own territory and
shall be the primary point of contact with such customers with respect to the
OPT System and any APB or Combined Utility Solution.

   

  7.

Pricing and Compensation.

 

  7a. PTO.

 

The Parties shall execute a frame agreement that sets out the terms and
conditions on the sale and purchase of PTO (the “PTO-Frame Sales Agreement”)
including the terms on price, invoicing, payment and warranty. The price of PTO
shall not unreasonably adversely affect each Party’s ability to conduct business
in their respective territories. The Parties shall exert their best efforts to
execute the PTO-Frame Sales Agreement until [***].

  7b. Technology License Fees.

 

The Parties agree that there will be no initial upfront payments to OPT for use
of its wave energy technology, and that there is no minimum royalty payment
arrangements. However, throughout the Term of this CA, MES shall demonstrate all
best efforts to sell OPT System in the MES-Territory. Royalty rates due to OPT
as noted below recognize the absence of such upfront and/or minimum royalty
payments. Furthermore, the Royalty rates agreed hereunder already reflect all
technical and financial contributions by both Parties made in the past and which
may be made in the future during the Term of JDA and/or this CA. Accordingly,
Royalty payments are not and will not be made by OPT to MES [***].

       

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

  7c.

Technology License Fees regarding Combined Utility Solution.

 

Royalties shall be paid by MES to OPT for sales by MES in the MES-Territory
related to the Combined Utility Solution at the flat rate of [***], multiplied
by the royalty base.

 

If MES uses OPT’s advanced wave optimization control technology such as AIMS for
wave capture optimization, Royalty payable by MES to OPT related to the Combined
Utility Solution will be at [***], multiplied by the royalty base.

 

For Combined Utility Solution sales, the royalty base amount (“RBA”) shall be an
amount equal to [***].

 

If MES receives payment from its customer in installments (regardless of the
reason), RBA for each of the installment payment shall be [***].

 

  7d. Technology License Fees regarding APB.

 

(1)

General Rule

 

   

Royalties shall be paid by MES to OPT for sales by MES in the MES-Territory
related to the APB at the following rates:

 

[***]

[***]

[***]

[***]

[***]

[***]

    *All of these amounts are Collection Amounts

 

multiplied by an amount equal to [***]. If, in the future, MES chooses to use
OPT’s advanced wave optimization control technology such as AIMS for wave
capture optimization, the Royalty rates shown in the table above will be
increased by an amount of [***] respectively.

 

If MES receives payment from its customer in installments (regardless of the
reason), RBA for each of the installment payment shall be [***].

 

 

(2)

Rules on [***]

 

   

Among the APBs sold by MES, the following special rules shall apply for the
[***]:

 

[***]

[***]

[***]

[***]

[***]

[***]

    *All of these amounts are Collection Amounts

 

multiplied by an amount equal to [***]. For the sake of precaution, MES shall
purchase PTO for [***] from OPT, just like for other APBs. If in the future, MES
chooses to use OPT’s advanced wave optimization control technology such as AIMS
for wave capture optimization, the Royalty rates shown in the table above will
be increased by an amount of [***], respectively.

 

If MES receives payment from its customer in installments (regardless of the
reason), RBA for each of the installment payment shall be [***].

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

  7e. K-Model or N-Model.

 

In the case where OPT uses K-Model or N-Model control system for wave capture
optimization, no Royalty is payable by OPT to MES, because such a situation is
already reflected in the net Royalty payable as agreed hereunder to OPT as
provided for in Paragraphs 7c and 7d above. If OPT uses the Confidential
Information of K-Model or N-Model that does not relate to any Improvement, OPT
shall pay Royalty to MES, which amount shall be agreed separately.

 

 

8.

Each Party shall have the reasonable discretion to establish the sale prices for
the Combined Utility Solution and APB and related maintenance contracts in their
respective territories. Each Party shall not disproportionately or artificially
allocate discounts and costs between and among revenues associated with the
Combined Utility Solution /APB and the revenues associated with such Party’s
other products and services in the applicable customer sales, which could have
unreasonable impact on the royalty calculation hereunder.

 

 

9.

Payment of Royalty shall be made on a quarterly basis. The entire Royalty
regarding the Collection Amount which MES received during a quarter and
calculated in accordance with Paragraph 7 hereof, shall be made within thirty
(30) calendar days after elapse of the relevant quarter to the bank account
designated in writing by OPT by way of wire transfer. Bank commission shall be
borne by MES. Royalty payments shall be accompanied by (i) a schedule showing
the applicable customer name, all amounts billed to such customer, Collection
Amount and the date of receipts for each invoice, list of the open invoices that
were due during the relevant quarter but not paid, and the calculation of the
Royalty amount (“Schedule”), and (ii) copy of all invoices (including all
additional invoices regarding the project, if any) regarding the Products and
related services issued by MES during the relevant quarter each indicating the
payment date (the “Invoices”), and (iii) a certificate prepared by a director of
MES, certifying that the calculation of the Royalty amount described in the
Schedule is true and correct (“Director’s Certificate”). Furthermore, MES shall
submit a certificate prepared by MES’s external CPA with international good
standing every six months certifying that the calculation of the Royalty amount
described in the Schedule for the last two quarters is true and correct (“CPA’s
Certificate”). MES shall bear the cost for these certificates.

 

If there is a reasonable doubt concerning the Schedule, the Invoices, Director’s
Certificate, CPA’s Certificate, or payment situation, OPT may raise questions to
MES and MES shall answer to such questions in good faith. If a situation occurs
in which questions regarding the royalty calculation methods and payment
information as set out in Paragraph 7 and in this Paragraph are not easily
resolved, the Parties shall consult each other and agree on a solution.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

 

10.

The Royalty amounts to be paid to OPT may not be paid with deduction for
withholding for or on account of any taxes or similar governmental charge
(“Withholding Taxes”). In case Withholding Taxes shall be deducted from the
Royalty, the Royalty shall be automatically grossed-up so that OPT may receive
the Royalty without deduction. Further, MES shall immediately send to OPT a
certified tax receipt of the Withholding Taxes issued by a competent tax
authority.

 

Article 6 (Terms and Conditions of FRR)

 

The following terms and conditions shall apply to the FRR granted by OPT to MES
under Article 7.1 of JDA:

 

 

1.

The FRR shall not apply to [***] or the territorial waters related thereto.

 

 

2.

When OPT receives notice from MES of a Territorial Customer opportunity, and OPT
decides to pursue the business opportunity with the Territorial Customer, OPT
shall on a timely basis submit to MES a request for bid (“Tender Request”) for
any of the following that may apply to the business opportunity and the hardware
or services OPT decides to supply to the business opportunity:

–     Manufacture hardware of the Product, excluding PTO, and provide its
transportation to project sites.
–     Deployment of hardware at the project site.
–     Operations and maintenance activity of the structure, but not the PTO.

 

 

3.

The Tender Request submitted to MES will be made at the same time and on the
same terms (including timetable, design specifications, point of delivery of
hardware and location of operations and maintenance services) as such Tender
Request may be made to other prospective third party suppliers (“Third Party”).

 

 

4.

In making the selection of appropriate supplier for the Territorial Customer
business opportunity, OPT shall take into consideration applicable mandatory
laws and contractual requirements, and consider the following factors
(“Factors”) in making its selection of the supplier:

 

–     Overall contribution to project

–     Price

–     Quality of work and prior applicable experience

–     Ability to scale up production volumes

–     Timeliness of fabrication and delivery

–     Risk of performance by supplier

–     Others as applicable

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

 

5.

OPT agrees that if:

 

 

(i)

the price included in MES’s tender (“MES Tender”) is no higher than the lowest
price included in any other response to the Tender Request submitted by a Third
Party, and the terms and conditions of the MES Tender including the Factors
other than price does not contain a clause which significantly adversely affects
the interest of OPT (which such interest shall be determined by OPT acting
reasonably and in good faith); or

 

 

(ii)

the terms and conditions of the MES Tender (taken as a whole, including the
Factors) are in the opinion of OPT (acting reasonably and in good faith) no more
disadvantageous to OPT than the terms and conditions offered by a Third Party,

 

   

then OPT, if it decides to proceed with the procurement of the hardware or
services detailed in the Tender Request, will (aa) accept the MES Tender for the
provision of that hardware and/or services, and (bb) not procure from any Third
Party any of that hardware and/or services contemplated by the Tender Request
for that specific customer.

 

 

6.

If the MES Tender does not meet the requirements of the preceding Paragraphs
5(i) and 5(ii) above, OPT is free to contract with any Third Party for any of
the services contemplated by the Tender Request on terms no less favorable than
the terms and conditions offered in the MES Tender.

 

 

7.

OPT will use best efforts to offer MES the FRR in OPT-Territory. This will be at
OPT’s discretion and subject to local laws, regulations and contractual
obligations.

 

Article 7 (Terms on Extraterritorial Commissions)

 

The following terms and conditions shall apply to the application of
extraterritorial commissions set forth in Article 7.1 of JDA:

 

 

1.

The commission rate will be [***] of commission base of cash actually received
by the Territorial Party from the Territorial Customer from the sale of the
Products. For [***] sales, however, the commission base shall be an amount equal
to [***].

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

 

2.

On a [***], within thirty (30) days of the end of each such [***] period, the
Territorial Party will pay the commissions due to the Extraterritorial Party
related to cash received from Territorial Customer during that preceding [***]
period.

 

 

3.

Commission payments made each [***] shall be accompanied by a schedule showing
the Territorial Customer name, amounts paid and subject to commission, and the
calculation of the commission payment.

 

 

4.

The commission shall not be payable if MES is the Extraterritorial Party and the
relevant territory is located in the [***] (including the territorial waters
related thereto). The commission shall not be payable if OPT is the
Extraterritorial Party and the relevant territory is located in Japan (including
the territorial waters related thereto).

 

Article 8 (Improvements)

 

 

1.

Ratio of Co-Ownership of Intellectual Property Rights.

 

   

The ratios of Intellectual Property Rights co-ownership of the Improvements
listed below are as follows:

 

 

(1)

Combined Utility Solution / PowerBuoy® PB80:

   

OPT: [***] %     MES: [***]%

 

 

(2)

[***]*:

   

OPT: [***] %     MES: [***]%

         

*For avoidance of doubt, Intellectual Property Rights ownership ratio of [***]
shall be OPT: [***] / MES: [***].

 

 

2.

Detailed Rules on Determination of Ratio of Co-Ownership.

 

   

The Improvement Notice pursuant to Article 5.3 of JDA shall contain the outline
of the relevant Improvement and relevant analyses (including, but not limited
to, the completion date of the Improvement, the other Party’s Background
Information used, performance impacts of the Improvement on manufacturability,
reliability and the operational and maintenance costs, etc.) and detailed
drawings shall be attached thereto. Each Party shall review the outline of the
Improvement, associated analyses and relevant testing data, if applicable; and
attached detailed drawings and/or sketches, take into account the factors to be
considered listed in Article 5.3 of JDA and notify its desired ratio of
co-ownership and the reason thereof to the other Party within thirty (30) days
after the Improvement Notice. Upon receipt of the Improvement Notices which
contain the outline and relevant analyses for the Improvement by the receiving
Party, both Parties shall start technical discussions to ensure validity of the
Improvement. Once agreement is reached on such validity, negotiations shall
start to determine the ratio of co-ownership of each Party for the Improvement.
The days spent for discussions for such validity shall be counted as ninety (90)
days within the meaning of Article 5.3(ii)(aa) of JDA. The ninety (90)-day
period starts to run on the date when the Improvement Notice is issued. The
receiving Party shall acknowledge receipt of such Improvement Notice without
delay.

 

 
 

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*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

 

3.

Filing.

 

In case where application for patent rights, etc. in connection with the
Improvement is made, regardless of countries in which such application is made,
both Parties shall jointly file the application unless the Parties agree from
time to time otherwise in writing. All costs associated with filing and
maintaining the joint patent, etc. shall be borne by both Parties based on
proportionate ownership. For the avoidance of doubt, the registration of patent
rights, etc. shall not affect the Royalty rate, etc. stipulated in Article 5
above.

 

 

4.

Further Improvements.

 

For avoidance of doubt, if both Parties, or either Party make/makes any further
improvements or develop(s) any inventions based on or using the Improvement,
such further improvement shall also be regarded the same way as any other
Improvement within the meaning of Article 5.3 of JDA and the standard rules
(including on the ownership ratio) on the Improvement shall apply.

 

Article 9 (Termination of License)

 

 

1.

When JDA and/or this CA end(s) for any reason whatsoever, all licenses for the
Background Information and the co-ownership interest in Improvement granted by
each Party to the other Party shall automatically expire and unless otherwise
agreed in writing, each Party must not use the Background Information and the
co-ownership interest in Improvement of the other Party thereafter.

 

 

2.

Notwithstanding the preceding Paragraph 1, when JDA and/or this CA end(s) for
any reason whatsoever and the license for the Background Information required
for the use of Improvement and the co-ownership interest in Improvement pursuant
to JDA and/or this CA automatically expire(s), (i) each Party will grant to the
other Party a non-sub-licensable (except for (aa) Subsidiary of the relevant
Party, or (bb) where the other Party gives prior written consent which consent
shall not be unreasonably withheld) and non-exclusive license for its own
Background Information required for the use of Improvement and its co-ownership
interest in the Improvement to the extent it is necessary to use the
Improvement, and (ii) each Party may use the Improvements, regardless of whether
the purpose of the application is wave energy or not, only if the royalty rate
of (i) above and other terms such as the period and territory is agreed by the
Parties in advance in writing.

 

Article 10 (Trademark)

 

MES shall indicate OPT’s Trademarks on all references to OPT’s devices or
technology that relate to Combined Utility Solutions and/or APB in its web page,
brochure and all other relevant marketing and presentation materials. MES shall
use due care to maintain brand image and value of OPT’s Trademarks.

 

 
 

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*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Article 11 (Currencies, Late Payment Charge)

 

All payments hereunder to OPT shall be made in US Dollars and all payments
hereunder to MES shall be made in Japanese Yen. If either Party fails to make
payment hereunder by due date, such Party shall pay the other Party interest at
a rate of [***] per annum of the unpaid amount as a late payment charge for the
period from the day on which the delay occurred to the day the payment is made,
together with the payment hereunder.

 

Article 12 (Press Release)

 

In case where a Party wishes to make a press release regarding the Project, such
Party shall consult with the other Party in advance.

 

Article 13 (Disclaimer)

 

OPT has not made any express or implied representation or warranty with respect
to OPT’s PTO, the Products or any parts thereof or the other matters set forth
in this CA or JDA. Any additional representations or warranties to be made by
OPT will be separately negotiated as part of the PTO-Frame Sales Agreement.

 

Article 14 (Term)

 

The Term of this CA shall end upon elapse of ten (10) years after entering into
this CA.

This CA may be renewed upon mutual consultation.

If JDA ends for any reason whatsoever, CA automatically ends too, and vice
versa.

 

Article 15 (Termination and Acceleration)

 

 

1.

Either Party may terminate this CA (i) if the other Party materially breaches
this CA and fails to cure such breach within thirty (30) days’ written notice of
such breach, or (ii) in the event that the other Party is adjudicated insolvent,
consents or acquiesces to the appointment of a receiver or liquidator, takes any
step towards dissolution or liquidation, voluntarily or involuntarily becomes a
debtor subject to proceedings under bankruptcy law, company rehabilitation law,
civil rehabilitation law or other comparable law, or otherwise ceases to do
business in the ordinary course. If such termination is made, the liability of
the other Party hereunder shall become immediately due and payable without
demand.

 

 

2.

If for [***] after the completion of verification test in the [***] Project (i)
there are no sales of Products by MES or (ii) MES does not purchase any PTO from
OPT, either Party shall have the right to terminate this CA.

 

 
 

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*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Article 16 (Miscellaneous)

 

 

1.

Articles 4, 6, 9.1, 9.2, 9.5 (second sentence) and 9.8 of JDA shall also apply
to this CA.

 

 

2.

Article 9.7 of JDA shall also apply to this CA. For the sake of precaution, the
arbitration language shall be English.

 

 

3.

Article 9.3 of JDA shall remain in full force and effect. If, however, there are
any conflicts between JDA and this CA, this CA shall prevail.

 

 

4.

The provisions contained in Article 5 Paragraphs 9 and 10, Article 8, Article 9,
Article 11, Article 13, Article 15 and Article 16 Paragraphs 1, 2 and 4 shall
survive without time limit after this CA ends for whatever reason.

 

 

5.

All notices and certificates to be made under or in relation to this Agreement
shall be made in English.

 

IN WITNESS WHEREOF, the Parties have executed this CA by their duly authorized
representatives as of the Effective Date.

 

Ocean Power Technologies, Inc. 

 

Mitsui Engineering & Shipbuilding Co., Ltd. 

 

 

 

 

 

 

 

 

          /s/ Charles F. Dunleavy   /s/ Osamu NIHO   Charles F. Dunleavy   Osamu
NIHO   Chief Executive Officer  

Managing Director
General Manager
Business Development & Innovation Hq.

 

           

 
 

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*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Appendix 1

 

Copy of the executed JDA

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Execution Copy

 

Joint Development Agreement

 

This Joint Development Agreement (“Agreement”) is made this 23rd day of January,
2013, by and between Ocean Power Technologies, Inc. (“OPT”) with a place of
business at 1590 Reed Road, Pennington, New Jersey, USA and Mitsui Engineering &
Shipbuilding Co., Ltd. (“MES”) with a place of business at 6-4, Tsukiji 5-chome,
Chuo-ku, Tokyo 104-8439, Japan (each a “Party” and collectively, the “Parties”).

 

WHEREAS, MES is a leading engineering company for power generation plant, wishes
to seek opportunities to expand its business opportunities as to wave power
generation. MES strength includes:

 

1) World class shipbuilder as a member of prestigious Mitsui Group; 2) Prominent
achievement in both design and manufacturing of steel structure; 3)
Sophisticated wave tank test facility and its proven R&D track record;

4)

A wealth of engineering resources in the field of fluid dynamics, wave
absorber/generator, steel structure design and manufacturing; and

5) Regular recipient of advanced R&D fund from various Japanese government
bodies.

     

WHEREAS, OPT is a developer of a leading edge, ocean-tested, proprietary system
integrating its patented technologies in hydrodynamics, electronics, energy
conversion and power take-off units, computer control systems, wave energy
converters, underwater substations and other infrastructure, equipment and
know-how to extract the natural energy of ocean waves including its PowerBuoy®
technology (the foregoing and all improvements thereto, the “OPT System”);

 

WHEREAS, the Parties entered into a Memorandum of Understanding on September 10,
2009 to cooperate to develop the business market in Japan for marine renewable
energy generation (the “2009 MoU”);

 

WHEREAS, the Parties entered into “Confidential Information, Inventions and
Trade Secrets Agreement” dated August 6, 2010 (the “2010 NDA”);

 

WHEREAS, in 2012 the Parties have started a test of the operational viability of
the OPT System and/or Combined Utility Solution which integrates the OPT System
or components thereof with products and services provided by MES in the Japanese
territorial waters;

 

WHEREAS, the Parties desire to work together to develop, commercialize and sell
the Combined Utility Solution in Japan, if the [***] Project including Combined
Utility Solution passes the evaluation by [***] to be conducted in accordance
with contract dated February 29, 2012 (“[***] Contract”) between MES and [***]
(“[***]”) (such evaluation is expected to take place by the end of March, 2013).
If the [***] Project passes the evaluation test, it is envisioned that a new
contract may be agreed between MES and [***]; and

 

WHEREAS, the Parties desire to work together on other projects.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

NOW THEREFORE, the Parties hereby confirm and agree as follows:

 

Article 1
Definitions

 

Capitalized terms used herein shall have the following meanings:

 

1.1     “APB” shall mean non-grid-connected power solutions utilizing wave
energy buoys using the Confidential Information of any of the Parties and/or
Improvement (as defined in Article 5.3 below).

 

1.2     “Background Information” shall mean the Confidential Information based
on which Improvement was made on or after the Project Commencement Date.

 

1.3     “Combined Utility Solution” shall mean grid-connected power solutions
utilizing wave energy buoys using the Confidential Information of any of the
Parties and/or Improvement.

 

1.4     “Confidential Information” shall mean specifications, techniques,
designs, plans, drawings, data, know-how, prototypes, software, formulae,
results of experiments, marketing plans or other technical or business
information which is disclosed to the Receiving Party and conspicuously
designated by the Disclosing Party as confidential and, in case of oral
disclosure, summary of which is reduced to writings within thirty (30) days
after such disclosure. If the Party who received such designated information
does not raise objection to the alleged confidential nature within ten (10) days
after receipt of such information, it shall be deemed that such Party has agreed
with the confidential nature of such information. The terms shall also be deemed
to include all notes, analyses, compilations, studies, interpretations or other
documents prepared by the Receiving Party which contain, reflect or are based
upon, in whole or in part, the information furnished to the Receiving Party
pursuant hereto. Specifications, techniques, designs, plans, drawings, data,
know-how, prototypes, software, formulae, results of experiments, marketing
plans or other technical or business information with respect to the Improvement
shall also fall under Confidential Information.

 

1.5     “Disclosing Party” shall mean the Party which disclosed Confidential
Information held by it to the other Party.

 

1.6     “Employees, etc.” shall mean employees, directors, designated third
parties, consultants, advisors and sub-contractors.

 

1.7     “Intellectual Property Rights” shall mean patent fights, utility model
rights, design rights, layout-design exploitation rights for semiconductor
integrated circuit, copyrights (which shall mean any and all rights provided in
Article 21 through Article 28 of the Japanese Copyright Law and any other rights
in foreign countries equivalent to the same), rights to be registered for all
such rights, and know-how (which shall mean technical information which can be
kept confidential and which has property value).

 

1.8     “K-Model” shall mean the software of the controlling system including
algorithm and source code developed and co-owned by MES and [***].

 

1.9     “MES-Territory” means Japan, Vietnam, Malaysia, the Philippines,
Mozambique, South Africa and Namibia.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

1.10     “N-Model” shall mean the software of the controlling system including
algorithm and source code developed by [***] and solely owned by MES.

 

1.11     “[***] Project” shall mean the joint research concerning the wave
energy power generation between [***] and MES pursuant to the [***] Contract.

 

1.12     “OPT-Territory” means the whole world except for MES-Territory.

 

1.13     [***]

 

1.14     “Products” shall mean Combined Utility Solution and APB.

 

1.15     “Project” shall mean joint development and other joint activities
conducted between the Parties to cooperate, among others, in relation to the
[***] Projects as well as to the most suitable and efficient Products.

 

1.16     “Project Commencement Date” means July 1, 2008.

 

1.17     “PTO” shall mean the power take-off system with respect to wave energy,
which includes (i) single line diagrams, electricity drawings, mechanical
drawings, as well as (ii) the software of the controlling system including
algorithm and source code. Just for the sake of precaution, disclosure of (ii)
above is not intended, until the Commercial Agreement as mentioned in Article 7
is executed.

 

1.18     “Receiving Party” shall mean the Party which received Confidential
Information held by the Disclosing Party from the Disclosing Party.

 

1.19     “Subsidiary” shall mean an entity or partnership of whatever legal
form, in which the Party has, directly or indirectly, the simple majority of the
voting power.

 

1.20     All references to days in this Agreement shall mean calendar days.

 

1.21     All references to the countries and regions in this Agreement shall
mean the marine area within the exclusive economic zone of each of the relevant
countries and regions.

 

 

Article 2
Purpose of this Agreement

 

The purpose of this Agreement is to (i) confirm the joint development between
the Parties to cooperate with each other and jointly develop and/or market the
most suitable and efficient Products, meeting the evaluation criteria of [***]
with respect to Combined Utility Solution and (ii) introduce proper rules on the
protection of Confidential Information that may be disclosed from time to time
between the Parties in various Project opportunities.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Article 3
Communication

 

Each Party will designate one of its employees as the primary individual
responsible for facilitating communication between the Parties including the
documentation of Confidential Information (each, a “Project Manager”).
Throughout the Term (as defined in Article 8.1 below), the Project Managers and
any additional personnel they select shall regularly confer by conference call
or, as mutually agreed, in person. The names and contact addresses of Project
Manager of the Parties are as follows:

 

MES:     [***]

 

OPT:     [***]

 

Article 4
Confidentiality

 

4.1     The Receiving Party shall restrict disclosure of the Confidential
Information solely to the Employees, etc. with a need to know for the
implementation of the Project and the [***] Project, and not disclose such
Confidential Information to any other third parties. When MES discloses to [***]
any Confidential Information of OPT in the [***] Project, MES shall affix a
“confidential” seal to the Confidential Information, demand [***] to treat it as
confidential, and further shall demand [***] protection of the know-how under
Article 31 of the Terms and Conditions of the Joint Research Agreement (“[***]
Terms and Conditions”) provided in Article 5, Paragraph 2 of the [***] Contract.

 

4.2     The Receiving Party shall impose the Employees, etc. who receive the
Confidential Information the obligation of confidentiality equivalent to those
hereunder and acquire from the Employees, etc. signed letter/(Japanese for
“signed letter”) in which the Employees, etc. declare to abide by
confidentiality obligation.

 

4.3     The Receiving Party shall use and cause the Employees, etc. to use the
same degree of care to protect the Confidential Information as is used with its
own proprietary information.

 

4.4     Notwithstanding anything to the contrary herein, the Receiving Party
shall have no obligation to preserve the confidentiality of any Confidential
Information which:

 

a.     Was previously known to the Receiving Party free of any obligation to
keep it confidential; or

 

b.     Is or becomes publicly available by other than unauthorized disclosure,
by the Receiving Party; or

 

c.     Is independently developed by the Receiving Party; or

 

d.     Is disclosed to third parties by the Disclosing Party without any
confidentiality obligation; or

 

e.     Is received from a third party whose disclosure thereof does not violate
any confidentiality obligations; or

 

f.     Is subject to subpoena or court orders.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

4.5     The Confidential Information disclosed shall at all times, namely
throughout the Term of this Agreement and after this Agreement ends for whatever
reason, remain the property of the Disclosing Party and the Receiving Party
shall return to the Disclosing Party, upon termination of this Agreement (for
whatever reason) or written demand by the Disclosing Party, any Confidential
Information and all copies thereof, and will return, expunge or destroy any
notes, analyses, compilation, studies, reports or other documents containing the
Confidential Information, or prepared or generated from the Confidential
Information by the Receiving Party. The Receiving Party shall, on written demand
from the Disclosing Party, promptly certify to the Disclosing Party in writing
that it has complied with the obligations hereunder.

 

4.6     Nothing contained in this Article shall be construed as granting or
conferring any rights by license or otherwise in any Confidential Information
disclosed.

 

Article 5
Intellectual Property Rights

 

5.1     The Receiving Party shall not use or disclose any of such Confidential
Information or any related Intellectual Property Rights except for (i) the
implementation of the Project, (ii) otherwise explicitly agreed in this
Agreement, or (iii) where there is explicit permission in writing by the
Disclosing Party. Just for the sake of precaution, all Intellectual Property
Rights related to PTO of PowerBuoy® up to and as of the date hereof is owned by
OPT and the trademark of PowerBuoy and katakana thereof (Japanese katakana for
“PowerBuoy”) is and will be owned by OPT.

 

5.2     Notwithstanding anything to the contrary contained herein, the Parties
mutually confirm that any information which each Party disclosed to the other
Party after the Project Commencement Date (including relevant Intellectual
Property Rights), as well as those which are listed in Appendix 5.2, are the
Confidential Information and the exclusive property of the Disclosing Party.

 

5.3     Ownership of Improvement: If both Parties or either Party make or makes
any improvements or develops any invention (together “Improvement”) based on or
using the Background Information of the other Party, the Party who made the
Improvement shall notify such Improvement to the other Party in writing on a
timely basis (“Improvement Notice”), in any event within thirty (30) days after
making of the Improvement. The ownership of any Intellectual Property Rights in
connection with the Improvement shall be subject to the following rules:

 

(i)

All Intellectual Property Rights related to the Background Information are and
will be owned by the Party who discloses the same.

 

(ii)

Intellectual Property Rights regarding the Improvement shall be co-owned by both
Parties, and the ratio of co-ownership of each Party shall be determined upon
discussion between the Parties taking into consideration the extent of
contribution to Improvement as well as contributions in terms of the Background
Information, human resources and financial resources etc. (aa) If no agreement
can be reached on the ownership ratio within ninety (90) days after the
Improvement Notice is made, the ratio shall be fixed on a [***] basis. (bb) If
no Improvement Notice is made for whatever reason within thirty (30) days after
making of the Improvement, the other Party has the right to declare that the
Improvement is owned on a [***] basis.

 

(iii)

Any Party may not transfer, or create any security interest in, its co-ownership
interest in Improvement without explicit written consent by the other Party.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

The Parties shall keep the records of the Improvements materially in the form of
Appendix 5.3A.

 

If the Intellectual Property Rights in connection with the Improvement fall
under Article 33, Paragraph 1 of the [***] Terms and Conditions, and therefore
the assignment of such rights requires such procedures as approval of [***] as
provided in Article 33-3, Paragraph 1 of the [***] Terms and Conditions, then
MES shall perform such procedures for the co-ownership interest held by OPT as
described above.

 

Just for the sake of precaution, the matters that are mentioned in Appendix 5.3B
(wave energy buoys as shown in MES brochure 1211REV0-04-SBC and APBs for the
purpose of [***], both as disclosed by MES to OPT at MES offices on December 12,
2012) fall under the Improvement and thus co-owned by the Parties. The Parties
may, however, consider in the Commercial Agreement the possible special
treatment for APBs for the purpose of [***].

 

The [***] is the sole property of MES only if (i) it does not use any of OPT’s
Confidential Information and/or any OPT-MES commonly developed and owned
technology, and (ii) it is used [***]. If the [***] uses any of OPT’s
Confidential Information and/or any OPT-MES commonly developed and owned
technology, MES shall pay a royalty to OPT. In such a case, the license
agreement shall be agreed upon separately by the Parties, but outside the
framework of this Agreement.

 

5.4       Use of Improvement

 

5.4.1     Principles: During the Term (as defined in Article 8.1 below), each
Party shall grant to the other Party a right to use the Background Information
if and to the extent it is necessary to use Improvement as well as the
co-ownership interest in Improvement held by such Party under the following
rules, provided that each Party can use the Background Information of the other
Party and/or Improvement without following such rules if such Party uses the
same solely for the implementation of the Project and the [***] Project. After
expiration or termination of this Agreement for whatever reason, each Party
shall not use the Background Information of the other Party and/or Improvement,
unless (i) otherwise agreed expressly in this Agreement, or (ii) there is
express written consent of the other Party.

 

5.4.2     Background Information:

 

(1)

If OPT is the Receiving Party

 

MES grants exclusive license to use the Background Information of MES to OPT if
all of the following conditions are met: (i) the territory is OPT-Territory,
(ii) if the main purposes of the application is wave energy, and (iii) the
Commercial Agreement as mentioned in Article 7 is executed. If the main purpose
of the application is non-wave energy, a non-exclusive license to use the
Background Information shall be given if and to the extent it is necessary for
OPT to exercise its right to use the co-ownership interest in Improvement held
by MES as licensed under Article 5.4.3 below. The terms of which shall be agreed
upon on a case by case basis.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

(2)

If MES is the Receiving Party

 

OPT grants exclusive license to use the Background Information of OPT to MES if
all of the following conditions are met: (i) the territory is MES-Territory,
(ii) if the main purpose of the application is wave energy, and (iii) the
Commercial Agreement as mentioned in Article 7 is executed. If the main purpose
of the application is non-wave energy, a non-exclusive license to use the
Background Information shall be given if and to the extent it is necessary for
MES to exercise its right to use the co-ownership interest in Improvement held
by OPT as licensed under Article 5.4.4 below. The terms of which shall be agreed
upon on a case by case basis.

 

5.4.3     Co-ownership interest in Improvement held by MES: With regard to the
co-ownership interest in Improvement held by MES, MES grants to OPT (i)
exclusive license in OPT-Territory, for wave energy application, and (ii)
non-exclusive license in OPT-Territory, for non-wave energy application.

 

5.4.4     Co-ownership interest in Improvement held by OPT: With regard to the
co-ownership interest in Improvement held by OPT, OPT grants to MES (i)
exclusive license in MES-Territory, regardless of whether the main purpose of
the application is wave energy or not, and (ii) non-exclusive license for the
whole world except for MES-Territory, for non-wave energy application.

 

5.4.5     Restrictions on License: No Party shall license the co-ownership
interest in Improvement held by such Party to any third party except for (i)
Subsidiary of the relevant Party, or (ii) where the other Party gives prior
written consent which consent shall not be unreasonably withheld.

 

5.4.6     Restrictions on Sub-license: No Party shall sublicense the licensed
rights hereunder regarding the co-ownership interest in Improvement held by the
other Party as well as the other Party’s Background Information associated
therewith, to any third party except for (i) Subsidiary of the relevant Party,
or (ii) where the other Party gives prior written consent which consent shall
not be unreasonably withheld.

 

5.4.7     Terms and Conditions: The details of the terms and conditions of
licenses of the Background Information and Improvement under Articles 5.4.2,
5.4.3, and 5.4.4 shall be determined in the Commercial Agreement (as defined in
Article 7.1 below), including the calculation of Royalty (as defined in Article
7.1 below). Each Party shall not use the Background Information of the other
Party and/or Improvement until such details are determined in the Commercial
Agreement for any purpose other than those solely for the implementation of the
Project and the [***] Project.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Article 6
Injunctive Relief

 

In the event of a breach of this Agreement, each Party understands and agrees
that the other Party may suffer irreparable harm and will therefore be entitled
to injunctive relief to enforce this Agreement.

 

Article 7
Commercialization

 

7.1     The Parties shall start the negotiation on the commercial terms of their
relationship (the “Commercial Agreement”) which shall address, among other
things, the following items: licensing, distribution, territory split, revenue
sharing, costs and press releases. The Commercial Agreement shall contain a
clause under which MES shall purchase PTO (which may include K- model or AIMS)
from OPT if MES deploys the Product in the waters of MES-Territory. The
Commercial Agreement shall also contain clauses regarding a case in which one
Party (the “Extraterritorial Party”) finds a customer (“Territorial Customer”)
in the territory of the other Party (the “Territorial Party”).

 

–

The Party shall pay royalty (“Royalty”) for a license to be granted by the other
Party pursuant to Articles 5.4.2 through 5.4.4.

 

–

The Extraterritorial Party must refer such Territorial Customer to the
Territorial Party forthwith, but in any event no later than seven (7) days after
initial customer contact. The Territorial Party shall then become the party who
will be the direct point of contact with, and the contract partner of, such
Territorial Customer, unless Territorial Party decides otherwise at its sole
discretion. The Territorial Party shall further have the sole discretion to
determine whether or not to pursue the business opportunity with such
Territorial Customer. The referral mentioned in the preceding sentence shall be
made by (i) notifying the contact details of the person in charge at the
Territorial Customer as well as the details of the business opportunity to the
Territorial Party in writing, and (ii) notifying the contact details of the
Territorial Party to the Territorial Customer in writing.

 

–

If the Territorial Party is OPT, OPT shall grant MES a first refusal right
(“FRR”) to the extent permissible under applicable mandatory law, to
manufacture, transport, deploy and maintain the structure (but not the PTO) of
the Products. The FRR shall not apply to [***]. The details of the FRR shall be
agreed upon in the Commercial Agreement. In this case, the Parties shall give
due consideration to the purpose of the Agreement.

 

–

In addition to the above, the Territorial Party shall pay a reasonable
commission to be agreed in the Commercial Agreement to the Extraterritorial
Party if the customer which the Extraterritorial Party referred to the
Territorial Party actually purchases the Products from the Territorial Party.
The commission shall not be payable, however, if MES is the Extraterritorial
Party and the relevant territory is located in the [***].

 

The Parties shall agree on the terms of the Commercial Agreement without delay,
but no later than March 31, 2013.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

7.2     Each Party agrees that it will not use and/or will not permit any of its
affiliated companies and any third party to use, Confidential Information it has
received or may receive from the other Party, or any derivatives based on such
Information (excluding technology developed or obtained independently by not
using such Information) or any improvements achieved based on such Information,
for any purpose other than for the Project and the [***] Project, and shall not,
among others, use it for any commercial purpose, unless the Commercial Agreement
has been executed by OPT and MES.

 

Any use of Confidential Information of the other Party and Improvement for any
purpose other than the Project and the [***] Project is strictly subject to the
execution of the Commercial Agreement.

 

Article 8
Term and Termination

 

8.1     Term: The term of this Agreement (“Term”) shall end upon elapse of ten
(10) years after entering into this Agreement. This Agreement may be renewed
upon mutual consultation.

 

8.2     Termination: Either Party may terminate this Agreement: (i) if the other
Party materially breaches this Agreement and fails to cure such breach within
thirty (30) days’ written notice of such breach; or (ii) in the event that the
other Party is adjudicated insolvent, consents or acquiesces to the appointment
of a receiver or liquidator, takes any step towards dissolution or liquidation,
voluntarily or involuntarily becomes a debtor subject to proceedings under
bankruptcy law, company rehabilitation law, civil rehabilitation law or other
comparable law, or otherwise ceases to do business in the ordinary course.

 

Article 9
Miscellaneous

 

9.1     This Agreement shall inure to the benefit of, and be binding upon each
of the Parties hereto and their respective successors or assigns; provided,
however, that this Agreement shall not be assignable by one Party without the
prior written consent of the other Party.

 

9.2     The relationship of the Parties established under this Agreement is that
of independent contractors. This Agreement shall not be construed to establish a
partnership, joint venture, agency, or other similar relationship between the
Parties.

 

9.3     This Agreement constitutes the entire understanding and agreement of the
Parties with respect to its subject matter, and supersedes all prior and
contemporaneous understandings and agreements including 2009 MoU and 2010 NDA,
whether written or oral, with respect to such subject matter. No delay or
failure by either Party to exercise or enforce at any time any right or
provision of this Agreement shall be considered a waiver thereof of such Party’s
rights thereafter to exercise or enforce each and every right and provision of
this Agreement. No single waiver shall constitute a continuing or subsequent
waiver. No waiver, modification or amendment of any provision of this Agreement
shall be effective unless it is in writing and signed by the Parties.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

9.4     For the sake of effective implementation of this Agreement, both Parties
shall not compete against each other directly or indirectly regarding the
development, manufacturing, marketing, selling and maintenance of the Products,
by any manner. This limitation also applies to the activities of MES, among
others, through [***] For example:

 

(i)

MES shall not seek business opportunities in relation to wave power generation
market with OPT’s serious competitors without the consent by OPT.

 

(ii)

OPT shall not seek business opportunities in relation to wave power generation
market with MES’s serious competitor in [***] without the consent by MES.

 

The details of the rules on the non-compete shall be agreed upon in the
Commercial Agreement.

 

9.5     The provisions contained in Article 4 shall survive ten (10) years after
this Agreement ends for whatever reason, and the provisions contained in
Articles 5.1, 5.2, 5.3, 6, 7.2 and 9.7 shall survive without time limit after
this Agreement ends for whatever reason. This Agreement may be executed in two
(2) or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

 

9.6     Notwithstanding anything to the contrary herein, this Agreement shall
terminate if the Parties determine not to execute the Commercial Agreement and
in such a case the provisions contained in Article 4 shall survive ten (10)
years after the termination, and the provisions contained in Articles 5.1, 5.2,
5.3, 6, 7.2 and 9.7 shall survive without time limit after the termination.

 

9.7     This Agreement shall be governed and construed in accordance with the
laws of the State of New York. Each Party agrees that any dispute arising out of
or in connection with this Agreement, including any question regarding the
existence, scope, validity or termination of this Agreement, shall be
exclusively resolved by arbitration in San Francisco, California under the
Arbitration Rules of the International Chamber of Commerce.

 

9.8     This Agreement shall be written in English and the English version shall
be controlling against any Japanese version.

 

IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives as of the date set forth above.

 

Ocean Power Technologies, Inc. 

 

Mitsui Engineering & Shipbuilding Co., Ltd. 

 

 

 

 

 

 

 

 

          /s/ Charles F. Dunleavy   /s/ Hirotaka Ohashi   Charles F. Dunleavy  
Hirotaka Ohashi   Chief Executive Officer  

Deputy General Manager
Business Development & Innovation Hq.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Appendix 1.13

 

EXAMPLES OF [***]

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Appendix 1.13-1

 

[***] (Diagram redacted)

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Appendix 1.13-2

 

[***] (Diagram redacted)

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Appendix 5.2

 

LIST OF CONFIDENTIAL INFORMATION

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

1. List of OPT

 

[***] (List redacted – two pages)

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

2. List of MES

 

[***]

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Appendix 5.3A

 

RECORD OF IMPROVEMENTS

 

[***]

 

Appendix 5.3B

 

LIST OF IMPROVEMENTS

 

[***]

 

The ratio of co-ownership of the Improvements listed above shall be agreed upon
in the Commercial Agreement.

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Attachment 1

 

[***](Diagram redacted)

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Attachment 2

 

[***](Diagram redacted)

 

 
 

--------------------------------------------------------------------------------

 

 

*** Indicates a portion of the exhibit has been omitted based on a request for
confidential treatment submitted to the Securities and Exchange Commission. The
omitted portions have been filed separately with the Commission.

 

Appendix 2

 

RECORD OF NEW CONFIDENTIAL INFORMATION

 

DATE PROVIDED TO OPT/MES

RECIPIENT(S)

SENT BY

SUBJECT OR DESCRIPTION OF GOODS