exv10w14



 







Exhibit 10.14




Confidential materials omitted and filed separately with the Securities and Exchange

Commission. Asterisks denote omissions.




CONFIDENTIAL




NON-EXCLUSIVE LICENSE AGREEMENT




BY AND AMONG




UNIVERSITY OF SOUTHERN CALIFORNIA,




CALIFORNIA INSTITUTE OF TECHNOLOGY




and




DIRECT METHANOL FUEL CELL CORPORATION




January 19, 2006




 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	ARTICLE 1       Definitions and Interpretations	 	 	2	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.1	 	 	Definitions
	 	 	2	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	1.2	 	 	Interpretations
	 	 	2	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 2       License	 	 	2	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.1	 	 	Grant of License
	 	 	2	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 3       Disclosure of Licensed Technology	 	 	3	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.1	 	 	Licensor’s Disclosure
	 	 	3	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.2	 	 	Subsequent Transfers
	 	 	3	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.3	 	 	Reasonable Cooperation
	 	 	3	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 4       Restrictions on Disclosure and Use of Licensor Confidential Information	 	 	4	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.1	 	 	Licensee’s Obligations
	 	 	4	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.2	 	 	Permitted Disclosures
	 	 	4	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 5       Consideration	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.1	 	 	Consideration to Licensor
	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.2	 	 	Royalties
	 	 	5	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 6       Recordkeeping and Reports	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.1	 	 	Recordkeeping
	 	 	6	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.2	 	 	Reports
	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.3	 	 	Recordkeeping for Royalty-based Licensed Products
	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 7       Licensee Improvements	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.1	 	 	Disclosure to Licensor
	 	 	7	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.2	 	 	Visits to Licensee’s Facilities
	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 8       Restrictions on Disclosure and Use of Licensee Confidential Information	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	8.1	 	 	Licensor’s Obligations
	 	 	8	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	8.2	 	 	Permitted Disclosures
	 	 	9	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 9       Representations and Warranties	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.1	 	 	Of Licensor
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.2	 	 	Of Licensee
	 	 	11	 






-i-





 









 






TABLE OF CONTENTS

(continued




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	ARTICLE 10       Disclaimers	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.1	 	 	General
	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.2	 	 	Warranty Disclaimer
	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.3	 	 	Disclaimer of Consequential Damage Liability; Limitation of Liability
	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 11       Indemnification and Insurance	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.1	 	 	Indemnification by Licensee
	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.2	 	 	Indemnification by Licensor
	 	 	13	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.3	 	 	Indemnification of DTI
	 	 	14	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.4	 	 	Insurance
	 	 	14	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 12       Prosecution and Maintenance of Patent Rights	 	 	14	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.1	 	 	Responsibility of Licensor
	 	 	14	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.2	 	 	Patent Expenses
	 	 	14	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.3	 	 	Prosecution of Infringements by Third Persons
	 	 	15	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.4	 	 	Defense of Third Party Infringement Claims
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.5	 	 	Marking
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	12.6	 	 	Public Disclosure and Use of Names or Marks
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 13       Term; Consequences of Expiration or Termination	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	13.1	 	 	Term of Agreement
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	13.2	 	 	Termination of Agreement
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	13.3	 	 	Consequences of Expiration or Termination
	 	 	17	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 14       Governing Law; Dispute Resolution	 	 	18	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.1	 	 	Governing Law
	 	 	18	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.2	 	 	Arbitration
	 	 	18	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	14.3	 	 	Rights to Bring Certain Actions
	 	 	19	 
	 
	 	 	 	 	 	 	 	 	 	 
	ARTICLE 15       Miscellaneous	 	 	20	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.1	 	 	Entire Agreement
	 	 	20	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.2	 	 	Assignments
	 	 	20	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.3	 	 	Ownership Restrictions on Licensee
	 	 	20	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.4	 	 	Third Party Beneficiary
	 	 	20	 





-ii-






 









 








TABLE OF CONTENTS

(continued




	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Page
	 

	 	 	15.5	 	 	Export Compliance
	 	 	20	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.6	 	 	Delivery of Certain Documents
	 	 	21	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.7	 	 	Headings
	 	 	21	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.8	 	 	Amendments
	 	 	21	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.9	 	 	Force Majeure
	 	 	21	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.10	 	 	Notices
	 	 	21	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.11	 	 	Relationship of the Parties
	 	 	22	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.12	 	 	Severability
	 	 	22	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.13	 	 	Waiver
	 	 	22	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.14	 	 	Prior Agreements
	 	 	22	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	15.15	 	 	Remedies Not Exclusive
	 	 	22	 






-iii-




 









 








CONFIDENTIAL NON-EXCLUSIVE LICENSE AGREEMENT




          THIS CONFIDENTIAL NON-EXCLUSIVE LICENSE AGREEMENT (this “Agreement” is entered into by
and among University of Southern California, a California nonprofit educational institution having
an address c/o Patent and Copyright Administration, 3716 South Hope Street, No. 313, Los Angeles,
California 90007-4344 (“USC”), California Institute of Technology, a California nonprofit
educational institution having an address c/o Office of Technology Transfer, 1200 East California
Boulevard, M/C 210-85, Pasadena, California 91125 (“Caltech”) (USC and Caltech are
collectively, the “Licensor”), and Direct Methanol Fuel Cell Corporation, a Delaware
corporation qualified to do business in California and having its principal place of business at
2400 Lincoln Avenue, Altadena, California 91001 (the “Licensee”), sometimes collectively
referred to as the “Parties” and individually referred to as a “Party.”




RECITALS




          WHEREAS, pursuant to the DTI License, Licensor granted to DTI an exclusive license to make,
have made and sell Licensed Products throughout the world, subject to (i) the reservation of USC’s
and Caltech’s right, on the part of themselves and the Jet Propulsion Laboratory, to make, have
made and use Licensed Products for educational, research and demonstrational purposes; and (ii) the
rights of the U.S. Government under Title 35, United States Code, Sections 200-213, and NASA
Contract NAS7-917 and the grant to the U.S. Government of a nonexclusive, non-transferable,
irrevocable, paid-up license to practice or have practiced the Licensed Technology for or on behalf
of the United States throughout the world.




          WHEREAS, pursuant to the Technology License and Transferred Rights Agreement, for the
consideration described therein, DTI surrendered, assigned, transferred and conveyed to Licensor
sufficient rights under the DTI License to enable Licensor to legally and effectively thereafter
grant a single non-exclusive, non-transferable license to a single new entity.




          WHEREAS, pursuant to the Technology License and Transferred Rights Agreement, Licensee has
been formed under the laws of Delaware and is qualified to do business in California for the
purpose of being granted such non-exclusive, nontransferable license.




          WHEREAS, Licensee desires to obtain from Licensor, and Licensor is willing to grant to
Licensee, a non-exclusive right and license (i) to use and exploit the
Licensed Products and (ii) to practice the Licensed Technology for the purposes described
herein, all subject to the terms and conditions of this Agreement.




-1-









 








AGREEMENT




     NOW, THEREFORE, in consideration of the premises and the mutual agreements, covenants and
provisions contained herein, the receipt and sufficiency of which is acknowledged by the Parties,
the Parties hereby agree as follows:



ARTICLE 1

Definitions and Interpretations




          1.1 Definitions. Unless the context requires otherwise, capitalized words and phrases
used in this Agreement shall have the meanings specified in Schedule 1.1 attached hereto.




          1.2 Interpretations. In this Agreement, unless the context indicates otherwise: (a)
the singular includes the plural and the plural the singular, and terms importing any gender shall
be deemed to include all genders; (b) references to statutes, sections or regulations are to be
construed as including all statutory or regulatory provisions consolidating, amending, replacing,
succeeding or supplementing the statute, section or regulation referred to; (c) references to
“writing” include printing, typing, lithography, facsimile reproduction and other means, including
electronic, of reproducing words in a tangible visible form; (d) the words “including,” “includes”
and “include” shall be deemed to be followed by the words “without limitation” or “but not limited
to” or words of similar import; (e) references to articles, sections and schedules are to those of
this Agreement unless otherwise indicated; (f) references to this Agreement shall be deemed to
include all schedules attached hereto and all subsequent amendments and other modifications hereto
(all of which are hereby incorporated herein by this reference); but if there is any conflict or
inconsistency between the main body of this Agreement and any schedule or attachment, or any
amendment or modification thereof, the provisions of the main body of this Agreement shall prevail;
(g) references to other agreements, instruments or documents shall be deemed to include all
amendments and other modifications thereto, but only to the extent such amendments and other
modifications are permitted by the terms of this Agreement; (h) references to Laws shall be deemed
to include all amendments, modifications and supplements thereto; and (i) references to Persons
include their respective successors and permitted assigns.




ARTICLE 2




License




          2.1 Grant of License. Subject to the terms and conditions herein contained, on the
Effective Date and for the duration of the License Period, Licensor shall grant and hereby grants
to Licensee, a royalty-bearing, non-exclusive right and license to
and under the Licensor Rights (“License”) to make, have made, assemble, manufacture,
develop, use, operate, market, lease, sell, offer for sale, distribute, import and service Licensed
Products, and to practice or have practiced the Licensed Technology in connection with the Licensed
Products in the Licensed Territory. Nothing herein shall be
 

-2-









 







construed as including the right to
transfer, sublicense or assign the rights to any Person other than as permitted pursuant to Section
15.2 hereof.




ARTICLE 3

Disclosure of Licensed Technology




          3.1 Licensor’s Disclosure. Within thirty (30) days following the Effective Date,
Licensor agrees to disclose to Licensee, at Licensor’s sole cost and expense, all existing
Confidential Information pertaining to the Licensed Technology, including technical information
which is owned or possessed by Licensor and which relates to the Licensed Technology, and relevant
experimental, test and performance information owned by Licensor concerning such Licensed
Technology or similar information.




          3.2 Subsequent Transfers. In addition to the disclosures contemplated by Section 3.1,
for the purpose of imparting technical information regarding the Licensed Technology, Licensor
agrees, for the duration of the License Period and at Licensor’s sole cost and expense to furnish
Licensee with copies of all patent applications filed in the United States Patent and Trademark
Office pertaining to the Licensed Patents.




          3.3 Reasonable Cooperation. Caltech and USC agree to cooperate reasonably with
Licensee with its efforts to commercialize the technology covered by the Transaction Documents.
Such cooperation shall include:




               3.3.1 The loan to Licensee from time to time of presently existing direct methanol fuel cell
demonstration units, which will be maintained in working order for a minimum period of twenty-four
(24) months, for the purpose of showing them to prospective financiers and strategic partners, such
loans to be requested by Licensee on at least three (3) days’ notice subject to prior commitments,
for loan duration not to exceed five (5) business days each and subject to Licensee’s obligation to
indemnify Caltech and USC for any loss, damage or other claims arising out of Licensee’s handling
or use of such units during the period of each such loan;



               3.3.2 Licensee visits from time to time the direct methanol fuel cell laboratories with
Licensee’s prospective financiers and strategic partners – such visits to be made at times
reasonably convenient to Caltech and USC on at least seven (7) days’ prior notice (with Licensee to
provide names and companies of prospective visitors), to be attended by on or more knowledgeable
scientists from the relevant laboratories for approximately one hour so that they may answer
questions within the scope of this Agreement and the Transaction Documents, and to be subject to the execution of
confidentiality agreements consistent with Article IV by each visitor in form and substance
acceptable to Caltech and USC; and



-3-









 





               3.3.3 Reasonable access by a Licensee scientist or engineer to the key laboratory scientists
involved in the technology covered by the Transaction Documents for purposes of effectively
transferring the technology to Licensee, at times reasonably convenient to Caltech and USC, on at
least seven (7) days’ notice, subject to the execution of confidentiality agreements by each such
scientist or engineer in form and substance acceptable to Caltech and USC and subject to travel and
other commitments of such scientists. Licensee shall pay the reasonable actual costs, if any, of
making such person or persons available, however, that the cost charged to Licensee shall be
applied as a credit against Licensee’s future royalty obligations to Caltech and USC.



ARTICLE 4

Restrictions on Disclosure and Use of Licensor

Confidential Information




          4.1 Licensee’s Obligations. Licensee agrees to treat as confidential, and will use
only in the manner and for the purposes expressly permitted in this Agreement, all Confidential
Information disclosed by or acquired from Licensor or Licensor Representatives. Licensee further
covenants that, except as expressly permitted by this Agreement, it will not disclose Confidential
Information to any Person, and will exercise every reasonable precaution to preclude the
unauthorized disclosure and use of Confidential Information by Licensee Representatives. To the
extent any software is included in the Confidential Information supplied by Licensor to Licensee,
Licensee agrees that it shall not decompile, disassemble or reverse engineer such software except
as permitted in writing by Licensor.




          4.2 Permitted Disclosures.




               4.2.1 General. Notwithstanding the provisions of Section 4.1, Licensee may disclose,
to the extent reasonably necessary for purposes of this Agreement or Licensee’s activities not
inconsistent herewith, Confidential Information to (a) Licensee Representatives, and (b) engineers,
consultants, contractors, vendors, partners or co-venturers of Licensee involved in the financing,
design, development, maintenance, modification and exploitation of the Licensed Products produced
by Licensee or any successor of Licensee; provided that prior to any such disclosure under (b)
above, Licensee shall require any such Person to execute a confidentiality agreement in the form of
Schedule 4.2 or other form of confidentiality agreement reasonably acceptable to Licensor
and such Person. Notwithstanding the foregoing, if due to an emergency or other event beyond the
reasonable control of Licensee it is not practicable for Licensee to obtain the execution of such
agreement prior to disclosure of Confidential Information, Licensee shall be permitted to disclose
such Confidential Information as is reasonably necessary in the circumstances provided that as soon
as reasonably practicable thereafter, Licensee secures the execution of such confidentiality
agreement by such Person to whom Licensee has disclosed Confidential Information. Within ninety
(90) days after the execution thereof, Licensee will provide Licensor a copy of each



-4-









 




confidentiality agreement which is executed by each such Person to whom Licensee has disclosed
Confidential Information under this Section 4.2.1.




               4.2.2 Disclosures Required by Law. If, pursuant to valid and applicable Law, Licensee
or any Licensee Representative is legally required to disclose Confidential Information, Licensee
will provide Licensor with prompt written notice of such requirement, as soon as reasonably
possible after Licensee becomes aware of such requirement, so that the Licensor may take whatever
action it deems appropriate, including intervening in any proceeding, seeking a protective order or
injunction, or other reliable assurance that confidential treatment will be afforded to
Confidential Information. Licensee will reasonably cooperate with Licensor and its counsel (at no
cost to Licensee) so as to enable Licensor to obtain a protective order or other reliable assurance
that confidential treatment will be afforded to Confidential Information. If, after complying with
the provisions of this Section 4.2.2, Licensee or Licensee Representative is nonetheless required
to disclose Confidential Information, Licensee or Licensee Representative, as applicable, will only
furnish that portion of the Confidential Information which is legally required to be so furnished,
and Licensee shall notify the Licensor of the disclosure within five (5) business days after such
disclosure, unless the Licensor was an intervenor or participant in the proceeding.



ARTICLE 5

Consideration




          5.1 Consideration to Licensor. In consideration for the grant of the licenses under
this Agreement and under that certain Confidential License Agreement dated as of January 19, 2006
by and among USC, Caltech and Licensee (collectively the “Licenses”), Licensee shall issue
to USC and Caltech in equal shares, a number of shares (the “License Shares”) of the Common
Stock of DMFCC equal to the difference between (i) fifteen (15%) of the issued and outstanding
shares of common stock determined on a fully diluted basis (as defined in the Technology Transfer
and Subscription Agreement dated May 21, 2002) and (ii) 5,000 of the 8,000 shares delivered as
consideration for the Option Agreement (the “Shares”). Licensee also agrees to pay
royalties on the Licensed Technology as set forth herein and in the Confidential License Agreement.




          5.2 Royalties. Licensee shall pay royalties to Licensor and to DTI under this
Agreement as follows for the grant of the License, and the consideration therefor:




               5.2.1 Royalty to DTI. Licensee shall pay to DTI royalty payments of ********** of the
Gross Revenue for Royalty-based Licensed Products sold or leased by Licensee during the License
Period. Such payments shall be made concurrently with the reports required pursuant to Section 6.2
and shall be directed to such account or address as may be directed by DTI in a notice pursuant to
Section 15.7 sent to Caltech, USC and Licensee.



-5-









 





               5.2.2 Royalty to Licensor. Licensee shall pay to Licensor royalty payments of (i)
********** of the Gross Revenue for Royalty-based Licensed Products sold or leased by Licensee for
use in non-utility vehicles; and (ii) ********** of the Gross Revenue for Royalty-based Licensed
Products sold or leased by Licensee for use in any other application. Such payments shall be made
concurrently with the reports required pursuant to Section 6.2 and shall be directed in equal
shares to USC and Caltech at their respective addresses set forth in Section 15.8, or to such other
account or address as may be directed by USC or Caltech, as the case may be, in a notice pursuant
to Section 15.8 sent to Licensee.



               5.2.3 Royalty on Imported Products. With respect to Licensed Products that are
imported or contain at least one material part that is imported (“Imported Licensed Products”), in
lieu of the royalties set forth in Section 5.2.2, Licensee shall pay to Licensor patent royalty
payments of (i) ********** of the Gross Revenue for Royalty-based Licensed Products sold or leased
by Licensee for use in non-utility vehicles; and (ii) ********** of the Gross Revenue for
Royalty-based Licensed Products sold or leased by Licensee for use in any other application. Such
payments shall be made concurrently with the reports required pursuant to Section 6.2 and shall be
directed in equal shares to USC and Caltech at their respective addresses set forth in Section
15.8, or to such other account or address as may be directed by USC or Caltech, as the case may be,
in a notice pursuant to Section 15.8 sent to Licensee.



ARTICLE 6

Recordkeeping and Reports




          6.1 Recordkeeping. During the License Period, Licensee agrees to keep records of
major activity undertaken under this Agreement as such activity relates to the Licensed Patents.
The activities of Licensee which shall constitute “major activity” for purposes of this
Section 6.1, and the scope of the reports to be provided by Licensee under Section 6.2, are as
follows:




               6.1.1 Any action with regard to a Licensed Patent or related patent application.



               6.1.2 Material correspondence with current or prospective investors.



               6.1.3 The initial manufacture, distribution or sale of each Licensed Product.



               6.1.4 Any agreement with a third party related to the exercise of any have made rights
provided herein.



               6.1.5 Such other information or activity as Licensor may, in its reasonable judgment, deem to
be a major activity hereunder material to this Agreement.



-6-









 





          6.2 Reports. On or before the last day of February, May, August and November
throughout the License Period, Licensee shall deliver an oral briefing to Licensor, telephonically
or at the offices of Licensee, and shall also furnish Licensor with a written summary report for
the preceding calendar quarter, specifying the information to be provided by Licensee pursuant to
Section 6.1. On or before the twentieth day of each January, April, July and October after the
Effective Date and after the first commercial production of Royalty-based Licensed Products by
Licensee, Licensee shall render to Licensor and DTI a report in writing, setting forth the number
of units of Royalty-based Licensed Products manufactured and the number of units sold and/or leased
during the preceding calendar quarter by Licensee and its distributors, agents and related
companies, separately identifying the Imported Licensed Products sold and/or leased and also
setting forth all information necessary to determine the royalties payable under the Agreement,
such report to be forwarded simultaneously with the royalty payment. The report shall be certified
as true and accurate by an officer of Licensee.




          6.3 Recordkeeping for Royalty-based Licensed Products. Licensee shall keep records
and books of account in respect of all Royalty-based Licensed Products made, sold and leased under
the Agreement. DTI and Licensor shall have the right, upon reasonable advance notice and during
business hours, to examine, or to have their designated auditors examine, such records and books of
account, including without limitation invoices, purchase orders or other documentation acceptable
to Licensor evidencing the number of Royalty-based Licensed Products imported and/or sold by
Licensee, and Licensee shall keep the same for at least three (3) years after it pays DTI and/or
Licensor the royalties due for such Royalty-based Licensed Products. Such examination may be
conducted no more frequently than once each calendar year and shall be conducted in a manner not
unreasonably disruptive of the research, development or operations of Licensee. The costs of such
audit shall be reimbursed to DTI and/or Licensor by Licensee if the audit identifies a shortfall of
five percent (5%) or more of royalties due hereunder for the period. Licensee shall also promptly
pay such shortfall together with a late charge in the amount of one percent (1%) per month from the
date due until the date paid.




ARTICLE 7

Licensee Improvements




          7.1 Disclosure to Licensor. During the License Period and subject to the terms and
conditions of this Agreement, Licensee agrees to disclose to Licensor all Licensee Improvements.
For the purpose of imparting technical information to Licensor regarding the Licensee Improvements,
Licensee agrees at a frequency no less than once per calendar quarter:




               7.1.1 to advise Licensor of the development of any Licensee Improvements;



-7-









 





               7.1.2 to permit Licensor’s employees and/or any technical consultants who have signed a
confidentiality agreement substantially in the form of Schedule 8.2 or other
confidentiality agreement reasonably acceptable to Licensee and such third party, to make such
inspections of the Licensee Improvements as are acceptable to Licensee, in Licensee’s sole
discretion, at reasonable times and at Licensor’s expense;



               7.1.3 to furnish Licensor with copies of drawings and other available technical data relative
to all raw materials and all equipment developed for or found particularly suitable for use in such
Licensee Improvements; and



               7.1.4 to furnish Licensor with copies of papers, documents and correspondence filed in the
United States Patent and Trademark Office and foreign patent offices pertaining to those Licensee
Patents which cover any aspect of such Licensee Improvements.



          7.2 Visits to Licensee’s Facilities. Licensee and Licensor shall develop reasonable
procedures for allowing third parties the right to visit Licensee’s facilities at reasonable times
during operation provided that (i) Licensor provides reasonable advance notice of the timing of the
visit and identity of the visitors; (ii) the visitors execute confidentiality agreements in the
form of Schedule 8.2 or other confidentiality agreement required by Licensee; (iii) the
visitors agree to adhere to Licensee’s safety rules while on Licensee’s premises; (iv) all such
visitors shall be subject to the prior approval of Licensee, not to be unreasonably withheld; and
(v) no such visit will interfere with the activities or operations of Licensee. In no event will
Licensee be obligated to provide any Licensee Confidential Information to such visitors, including
information concerning Licensee Improvements (other than Third Parties which satisfy the provisions
of Section 7.1(f)); however, Licensee will provide general performance data (at Licensor’s expense)
concerning the Licensed Technology and Licensed Patents.




ARTICLE 8

Restrictions on Disclosure and Use of Licensee

Confidential Information




          8.1 Licensor’s Obligations. Licensor agrees to treat as confidential and will use
only in the manner and for the purposes expressly permitted in this Agreement, all Licensee
Confidential Information disclosed by or acquired, directly or indirectly, by Licensor or any
Licensor Representative from Licensee or Licensee Representatives. Licensor further covenants
that, except as expressly permitted by this Agreement, it will not disclose Licensee Confidential
Information to any Person and will exercise every reasonable precaution to preclude the unauthorized disclosure and use of
Licensee Confidential Information by Licensor Representatives. To the extent any software is
included in any Licensee Confidential Information, Licensor agrees that it

-8-









 








will not decompile,
disassemble or reverse engineer such software except as permitted in writing by Licensee.




          8.2 Permitted Disclosures.




               8.2.1 General. Notwithstanding the provisions of Section 8.1, Licensor may disclose,
to the extent reasonably necessary for purposes of this Agreement or Licensor’s activities not
inconsistent herewith, Licensee Confidential Information to Licensor Representatives, provided
that, prior to any such disclosure, Licensor requires each such Person to execute a confidentiality
agreement substantially in the form of Schedule 8.2 or other confidentiality agreement
reasonably acceptable to Licensee and such Person. Notwithstanding the foregoing, if due to an
emergency or other event beyond the reasonable control of Licensor it is not practicable for
Licensor to obtain the execution of such agreement prior to disclosure of Licensee Confidential
Information, Licensor shall be permitted to disclose such Licensee Confidential Information as is
reasonably necessary in the circumstances provided that as soon as reasonably practical thereafter,
Licensor secures the execution of such confidentiality agreement by any such Person to whom
Licensor has disclosed Licensee Confidential Information. Within ninety (90) days after the
execution thereof, Licensor shall provide Licensee a copy of each confidentiality agreement which
is executed by each such Person to whom Licensor has disclosed Licensee Confidential Information
pursuant to this Section 8.2.1.



               8.2.2 Disclosures Required by Law. If, pursuant to valid and applicable Law, Licensor
or any Licensor Representative is legally required to disclose Licensee Confidential Information,
Licensor will provide Licensee with prompt written notice of such requirement, as soon as
reasonably possible after Licensor becomes aware of such requirement, so that the Licensee may take
whatever action it deems appropriate, including intervening in any proceeding, seeking a protective
order or injunction, or other reliable assurance that confidential treatment will be accorded to
Licensee Confidential Information. Licensor will reasonably cooperate with Licensee and its
counsel (at no cost to Licensee) so as to enable Licensee to obtain a protective order or other
reliable assurance that confidential treatment will be accorded to Licensee Confidential
Information. If, after complying with the provisions of this Section 8.2.2, Licensor or Licensor
Representative is nonetheless required to disclose Licensee Confidential Information, Licensor or
Licensor Representative, as applicable, will only furnish that portion of the Licensee Confidential
Information which is legally required to be so furnished, and Licensor shall notify the Licensee of
the disclosure within five (5) business days after such disclosure, unless the Licensee was an
intervenor or participant in the proceeding.



-9-









 





                8.2.3 Issued Patents and Published Patent Applications. Notwithstanding anything to the
contrary herein, Licensee may identify, to third parties having no obligations to preserve the
confidentiality of information received from Licensee, that it is a licensee of patents or patent
applications licensed herein once they are published, provided that the form and content of any
such disclosure shall be subject to the prior written approval of Licensor.




ARTICLE 9

Representations and Warranties




          9.1 Of Licensor. Licensor represents and warrants to Licensee as follows:




               9.1.1 Licensor owns or has sufficient authority to convey the rights under the Licensor Rights
free and clear of all Encumbrances and, except as set forth herein, the Licensor Rights are not
subject to any exclusive licenses or other rights of use;



               9.1.2 All necessary action has been taken by Licensor to approve the execution and
consummation of this Agreement;



               9.1.3 Licensor has all necessary power and authority to enter into and perform its obligations
under this Agreement and has taken all necessary action in accordance with its organizational
documents and has received any consents and approvals which are necessary to authorize the
execution and consummation of this Agreement;



               9.1.4 Neither the execution nor the delivery of this Agreement, nor the consummation of the
transactions herein contemplated nor the fulfillment of or compliance with the terms and provisions
hereof will (i) violate any Law, or (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, the organizational documents of
Licensor, or any agreement or instrument to which Licensor is a party or by which it is bound;



               9.1.5 Licensor has the full right, power and authority to grant to Licensee the use of the
Licensor Rights in accordance with the terms and provisions of this Agreement;



               9.1.6 To the best of Licensor’s knowledge, the Licensor Rights do not infringe on or violate
any right of any third party;



               9.1.7 There is no action, suit, claim, proceeding or governmental investigation pending or, to
the best of Licensor’s knowledge, threatened against Licensor with respect to the Licensor Rights;
and



-10-









 





               9.1.8 To the best of Licensor’s knowledge, the Licensed Patents are valid and enforceable
within the Licensed Territory.



          9.2 Of Licensee. Licensee represents and warrants to Licensor as follows:




               9.2.1 Licensee has all necessary corporate power and authority to enter into and perform its
obligations under this Agreement and has taken all necessary corporate action under its
organizational documents and has received any consents or approvals which are necessary to
authorize the execution and consummation of this Agreement;



               9.2.2 Neither the execution nor the delivery of this Agreement, nor the consummation of the
transactions herein contemplated nor the fulfillment of or compliance with the terms and provisions
hereof will (i) violate any Law, or (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, the organizational documents of
Licensee, or any agreement or instrument to which Licensee is a party or by which it is bound;



               9.2.3 All necessary government approvals have been obtained, and all government filings have
been made, as necessary for the Licensee to enter into this Agreement and to perform in accordance
with its terms;



               9.2.4 Licensee shall mark all Licensed Products with applicable patent numbers, as instructed
by Licensor;



               9.2.5 Licensee shall not be majority-owned or controlled by an existing manufacturing company
or its Affiliate for a period of three (3) years from the Effective Date; and



               9.2.6 Licensee is, as of the Effective Date, funded by one or more angel investors and/or
venture capital groups and/or Caltech and/or USC themselves, and is capitalized in the amount of
Two Million Five Hundred Thousand Dollars ($2,500,000.00), and is owned by such investors, and/or
jointly with Caltech and/or USC and/or key employees of DMFCC.



               9.2.7 Licensee shall use it best efforts to develop the Licensed Products and practice the
Licensed Technology in connection with the Licensed Products, promote the sale of Licensed Products
and enhance the reputation and goodwill associated with the Licensed Products.



-11-









 





ARTICLE 10

Disclaimers




          10.1 General. Nothing in this Agreement is or shall be construed as:




               10.1.1 an obligation of either Party to bring or prosecute actions or suits against third
parties for infringement, except to the extent and under the circumstances described in this
Agreement; or



               10.1.2 a grant by implication, estoppel or otherwise of any licenses under patent applications
or patents of Licensor, Licensee or other Persons other than as provided in this License Agreement.



          10.2 Warranty Disclaimer. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER
LICENSOR, IN RESPECT OF LICENSOR RIGHTS, NOR LICENSEE, IN RESPECT OF LICENSEE IMPROVEMENTS OR
LICENSEE CONFIDENTIAL INFORMATION, MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESS
OR IMPLIED, INCLUDING WARRANTIES AS TO MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.




          10.3 Disclaimer of Consequential Damage Liability; Limitation of Liability.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, TO THE MAXIMUM EXTENT PERMITTED BY LAW,
IN NO EVENT WILL EITHER PARTY BE RESPONSIBLE FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL,
PUNITIVE, OR EXEMPLARY DAMAGES OF ANY KIND, INCLUDING DAMAGES FOR LOST GOODWILL, LOST PROFITS, LOST
BUSINESS OR OTHER INDIRECT ECONOMIC DAMAGES, WHETHER SUCH CLAIM IS BASED ON CONTRACT, NEGLIGENCE,
TORT (INCLUDING STRICT LIABILITY) OR OTHER LEGAL THEORY, AS A RESULT OF A BREACH OF ANY WARRANTY OR
ANY OTHER TERM OF THIS AGREEMENT, AND REGARDLESS OF WHETHER A PARTY WAS ADVISED OR HAD REASON TO
KNOW OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.




ARTICLE 11

Indemnification and Insurance




          11.1 Indemnification by Licensee. Licensee agrees to indemnify, hold harmless and
defend Licensor and Licensor Representatives (collectively, the “Licensor Indemnified
Parties”) from, against, and with respect to any Claims arising out of (a) the breach of any
representation, warranty or covenant of Licensee under this Agreement, (b) the production of any
Licensed Product and (c) the combination of Licensed Technology with any other technology, product, component or good. In the event of
any such Claim, Licensee shall defend the Licensor Indemnified Parties in question at Licensee’s
sole

-12-









 








expense by counsel selected by Licensee, subject to approval by Licensor, which approval is
not to be unreasonably withheld or delayed. The settlement of a Claim which is the subject of the
foregoing indemnification and which involves more than the payment by Licensee of monetary damages,
shall require Licensor’s prior approval; provided that if Licensor does not approve any such
settlement and, after Licensee’s reasonable diligence in defending such Claim, the amount of the
final judgment or award exceeds the amount of the settlement proposed by Licensee and disapproved
by Licensor, then Licensor shall be responsible to pay any such excess amount, plus Licensee’s
reasonable costs and expenses of litigation (including reasonable attorneys’ fees). In addition,
Licensor Indemnified Parties shall have the right to hire counsel, at their sole expense, who shall
cooperate with Licensee’s counsel in the defense of any Claim indemnified under this Section 11.1;
provided that if Licensor reasonably determines there are Claims or defenses available to Licensor
Indemnified Parties which are not otherwise available to Licensee or if a conflict of interest
exists between Licensee and Licensor Indemnified Parties, or if Licensee fails to diligently
prosecute any such Claim with competent counsel, then Licensor Indemnified Parties shall be
entitled to separate representation by counsel of their choosing, and the cost thereof shall be
borne by Licensee. The settlement of any Claim which is the subject of the foregoing
indemnification and which involves more than the payment by Licensee of monetary damages shall
require Licensor’s prior approval; provided that if Licensor does not approve any such settlement
and, after Licensee’s reasonable diligence in defending such Claim, the amount of the final
judgment or award exceeds the amount of the settlement proposed by Licensee and disapproved by
Licensor, then Licensor shall be responsible to pay any such excess amount, plus Licensee’s
reasonable costs and expenses of litigation (including reasonable attorneys’ fees).




          11.2 Indemnification by Licensor. Licensor agrees to indemnify, hold harmless and
defend Licensee and Licensee Representatives (collectively, the “Licensee Indemnified
Parties”) from, against and with respect to any Claim arising out of the breach of any
representation, warranty or covenant of Licensor under this Agreement, and for any Claims that the
Licensor Rights or Licensee’s use of the Licensor Rights infringe or violate any patents,
copyrights, trademarks or trade secrets or other intellectual property rights of any Person. In
the event of any such Claim, Licensor shall defend the Licensee Indemnified Party or Parties in
question at Licensor’s sole expense by counsel selected by Licensor, subject to reasonable approval
by Licensee, which approval is not to be unreasonably withheld or delayed. In addition, Licensee
Indemnified Parties shall have the right to hire counsel, at their sole expense, who shall
cooperate with Licensor’s counsel in the defense of any Claim indemnified under this Section 11.2;
provided that if Licensee reasonably determines there are Claims or defenses available to Licensee
Indemnified Parties which are not otherwise available to Licensor or if a conflict of interest
exists between Licensor and Licensee Indemnified Parties, or if Licensor fails to diligently prosecute any such Claim with competent counsel,
then Licensee Indemnified Parties shall be entitled to separate representation by counsel of their
choosing, and the cost thereof shall be borne by Licensor. The settlement




-13-









 







of any Claim which is the subject of the foregoing indemnification and which involves more than the payment by Licensor
of monetary damages shall require Licensee’s prior approval; provided that if Licensee does not
approve any such settlement and, after Licensor’s reasonable diligence in defending such Claim, the
amount of the final judgment or award exceeds the amount of the settlement proposed by Licensor and
disapproved by Licensee, then Licensee shall be responsible to pay any such excess amount, plus
Licensor’s reasonable costs and expenses of litigation (including reasonable attorneys’ fees).




          11.3 Indemnification of DTI. DTI shall not have any liability to Caltech, USC or
Licensee, or to any purchasers or users of Licensed Products made or sold by Licensee, for any
claims, demands, losses, costs or damages suffered by Licensee or any purchasers or users of such
Licensed Products, or any other party, which may result from personal injury, death or property
damage related to the manufacture, use, or sale of such Licensed Products (“DTI Indemnifiable
Claims”). Licensee shall defend, indemnify, and hold harmless DTI, and the directors,
officers, agents, and employees of DTI from any such DTI Indemnifiable Claims, provided that (i)
Licensee is notified promptly of any DTI Indemnifiable Claims, (ii) Licensee has the sole right to
control and defend or settle any litigation within the scope of this indemnity, and (iii) all
indemnified parties cooperate to the extent necessary in the defense of any DTI Indemnifiable
Claims.




          11.4 Insurance. At such time as the Licensee (“Insured Party”) begins to sell
or distribute Licensed Products (other than for testing or demonstration in non-motive form or for
the purpose of obtaining regulatory approvals), such Insured Party so selling or distributing
Licensed Products shall at its sole expense, procure and maintain policies of comprehensive general
liability insurance with commercially reasonable limits of coverage. Such comprehensive general
liability insurance shall provide (i) product liability coverage and (ii) broad form contractual
liability coverage for the Insured Party’s indemnification under Section 11.3. In the event the
aforesaid product liability coverage does not provide for occurrence liability, the Insured Party
shall maintain such comprehensive general liability insurance for a reasonable period of not less
than five (5) years after it has ceased commercial distribution or use of any Licensed Product. The
Insured Party shall provide Licensor and DTI with written evidence of such insurance upon the
request of Licensor or DTI. In addition, Licensee, at its own expense, shall obtain and maintain
for the term of this Agreement, property damage and liability insurance or self-insurance against
injury or death to persons and loss or damage to property including loss by fire (including
so-called “extended coverage”), theft, destruction, public liability risks, and such other
risks customarily insured against by businesses in which Licensee is engaged and shall designate
Licensor as an “additional insured” on all such policies.




-14-









 








ARTICLE 12

Prosecution and Maintenance of Patent Rights




          12.1 Responsibility of Licensor. Subject to those patent expenses which are the
responsibility of DTI under the DTI License, Licensor will take all actions to maintain the
Licensed Patents during the life of such patents and shall have full control over prosecution and
maintenance of such patent applications and patents encompassed within the Licensor Rights.




          12.2 Patent Expenses. From and after the Effective Date, Licensee will pay within
thirty (30) days of invoice by Licensor one-half of all patent expenses accruing after the
Effective Date which are the responsibility of DTI under the DTI License. If DTI directly,
indirectly or effectively grants sublicenses or similar rights under any of the Licensed Patents to
third parties other than Ballard Power Systems, Inc., a corporation existing under the laws of
Canada, Licensee’s share of such patent expenses will be reduced on a pro-rata basis. For example,
if DTI grants one additional sublicense, Licensee will be responsible for one-third of all such
patent expenses. Solely with respect to the calculation of royalty payments due Licensor pursuant
to Section 5.2 above, all reasonable attorneys’ fees and expenses paid by Licensee under this
Section 12.2 shall be included in Licensee’s Deductible Expenses.




          12.3 Prosecution of Infringements by Third Persons.




               12.3.1 In the event Licensee becomes aware of any actual or threatened infringement of any
Licensor Rights, Licensee shall promptly notify Licensor and the parties shall discuss the most
appropriate course of action to be taken. Subject to Licensor’s obligations under Section 11.2,
the parties shall use commercially reasonable efforts in cooperating with each other to terminate
such infringement without litigation. Subject to any applicable statutes of limitations, if within
sixty (60) days after the date of such notification of infringement, attempts to abate such
infringement are unsuccessful, then Licensor may, but is not obligated to, file suit. Licensee
shall cooperate with Licensor’s reasonable requests related to prosecution of infringements at the
expense of or reimbursement by Licensee. If Licensor elects not file suit, Licensee may request
that Licensor file suit provided that Licensee pays all costs and expenses of such litigation, and
accepts in writing all liability arising therefrom (including without limitation from any
counterclaim(s), cross claim(s) or other cause). However, such a request shall only be construed
as Licensee’s advice to Licensor, and in no event shall Licensor be under any obligation to file or
maintain any such litigation.



               12.3.2 All recoveries, damages and awards in any such suit, after reimbursement of reasonable
litigation costs and expenses of Licensor (including amounts contributed by Licensee, if any), and
participating Third Party Licensees not previously reimbursed, shall be divided among Licensor and
the Third Party Licensees participating in such suit. To the extent that Licensee contributed
money to pay for Licensor’s costs and expenses for such litigation and such contributed amounts were used



-15-









 




by Licensor in the prosecution of such litigation, Licensee shall receive a pro-rata share from
Licensor’s portion of the recovery, if any, equal to the percentage Licensee contributed to the
total amount of Licensor’s litigation costs and expenses for such litigation; provided that all
such proportional recoveries allocated to Licensee shall be included in the calculation of Gross
Revenue on which royalties are payable pursuant to Sections 5.2.2 and 5.2.3 hereof. To the extent
recoveries exceed such costs and expenses with respect to such infringement action, such excess
recoveries shall be divided in accordance with appropriate judgment or award or, if there is no
such judgment or award, in accordance with the damages suffered by Licensor and the respective
third parties to the litigation (if any) due to the infringement. In the event that no Third Party
Licensee elects to institute or prosecute any suit to enjoin or recover damages from any third
party, then Licensor alone may, in its sole discretion and at its expense, initiate and conduct an
infringement action and keep any settlement or award which may be obtained.




          12.4 Defense of Third Party Infringement Claims. In the event Licensee’s use of any
Licensor Rights as used by Licensee becomes the subject of a Claim for which Licensor has
indemnified Licensee under Section 11.2, the Party receiving notice of such Claim shall promptly
give notice to the other, whereupon the parties will meet to consider the Claim and the appropriate
course of action, subject to Licensor’s obligations and Licensee’s rights, under Section 11.2.




          12.5 Marking. Licensee agrees to mark all Licensed Products (and, as may be
reasonably requested by Licensor, their containers, bills of lading or published specifications or
data sheets) made, sold, or otherwise disposed of by it or them, with any notices of Licensor
Rights necessary or desirable under applicable Law to enable the Licensor Rights to be enforced to
their full extent.




          12.6 Public Disclosure and Use of Names or Marks. At no time, whether prior to or
after the execution of this Agreement, shall Licensee (i) issue any public or private statement or
communication to any third party, other than to its legal counsel or except as required by law or
regulatory authority (provided that for disclosures required by law or regulatory authority, the
other Parties and, if applicable pursuant to clause (b) below, DTI shall be provided reasonable
advance written notice of any request or demand for disclosure), regarding this Agreement, the
subject matter of this Agreement or the agreements and transactions contemplated hereby (a) without
the prior written approval of the other Parties hereto, or (b) where such statement or
communication specifically names DTI, without the prior written approval of DTI and the other
Parties hereto; or (ii) use any trademark, trade name, logo or other identifying mark or
designation of any other Party without the prior written approval of the owner of such mark, name
or other designation.




-16-









 








ARTICLE 13

Term; Consequences of Expiration or Termination




          13.1 Term of Agreement. The term of this Agreement (“License Period”) shall
commence on the Effective Date and, unless terminated earlier in accordance with its terms, shall
continue in effect until the earlier of (i) the last of the Licensed Patents expires or (ii) the
Confidential License Agreement dated January 19, 2006, by and among USC, Caltech and DMFCC (the
“Confidential License Agreement”) is terminated for reasons other than the expiration of
the last of the patents licensed thereunder.




          13.2 Termination of Agreement. If Licensee breaches any of its material
representations or obligations under this Agreement, including without limitation defaults on its
royalty obligations to Licensor or DTI set forth in Section 5.2, or any obligation under the
Confidential License Agreement or any other Transaction Document, Licensor shall have the right to
terminate this Agreement and the rights in the Licensed Products and Licensed Technology granted
hereunder, and the entire conveyance of rights in the Licensed Products and Licensed Technology to
Licensee under this Agreement shall be forfeited, by giving the Licensee at least sixty (60) days
written notice thereof, provided, however, that if Licensee cures such default within such sixty
(60) day period, this Agreement shall continue in full force and effect. If any of the Parties
breach any of their respective obligations under this Agreement, the other Party shall have the
right to terminate this Agreement and the rights granted hereunder by giving the breaching Party at
least sixty (60) days written notice thereof, provided, however, that if the breaching Party cures
the breach within such sixty (60) day period, this Agreement shall continue in full force and
effect. In addition to the rights specified in Section 13.3, the non-breaching Party shall have
all rights and remedies available in law or equity, including injunctive relief, and the breaching
Party shall be liable for all costs and expenses, including reasonable legal fees, incurred as a
result of a material breach of this Agreement. No termination of this Agreement shall relieve
either of the Parties of their respective obligations arising prior to the effective date of such
termination.




          13.3 Consequences of Expiration or Termination.




               13.3.1 Upon the expiration or termination of this Agreement, neither Party shall be relieved
or discharged from any liability under this Agreement which arose prior to the date of such
expiration or termination.



               13.3.2 The provisions of Article 4 (Restrictions on Disclosure and Use of Licensor
Confidential Information), Article 8 (Restrictions on Disclosure and Use of Licensee Confidential
Information), and Section 12.6 (Use of Licensor’s Name; Confidentiality of Agreement and Terms)
shall survive the expiration or termination of this Agreement for a period of two (2) years. The
provisions of Article 9 (Representations and Warranties), Article 10 (Disclaimers), Article 11 (Indemnification



-17-









 




and Insurance), Section 12.4 (Defense of Third Party Infringement Claims), Article 14 (Governing Law;
Dispute Resolution), Section 15.7 (Notices) and Section 15.13 (Remedies Not Exclusive), shall
survive indefinitely the expiration or termination of this Agreement.




               13.3.3 If, upon the expiration or termination of this Agreement, Licensee then possesses
Licensed Products, has started the manufacture of any Licensed Products, or has accepted orders
therefor, Licensee shall have the right to sell its inventory and complete the manufacture and
marketing of such Licensed Products for a period not to exceed twelve (12) months following such
expiration or termination. During the twelve month sell-off period, Licensee shall continue to
deliver reports and maintain records as required under Article 6 hereof, and to make payments to
Licensor and DTI as required under Article 5 hereof.



               13.3.4 The expiration or termination of the Agreement shall not have the effect of terminating
any other license nor otherwise affect the parties’ respective rights and obligations under any
other licenses. For the avoidance of doubt, expiration or termination of this Agreement or the
expiration or termination of the License shall have the effect of terminating Licensor’s rights to
any Licensee Improvements or any of Licensee Confidential Information, and Licensee’s rights to use
Licensor Rights and Confidential Information under this Agreement.



               13.3.5 Except as expressly agreed in writing by the Parties, Licensor and Licensee each agrees
to return to the other Party, and to cause its representatives to return to the other Party on or
before the sixtieth (60th) day after expiration or termination of this Agreement, Licensee
Confidential Information and Confidential Information, respectively.



               13.3.6 No expiration or termination of this Agreement shall relieve Licensee of the liability
for payment of any royalty due to DTI for Licensed Products made prior to the effective date of
such expiration or termination.



               13.3.7 For the avoidance of doubt and notwithstanding anything to the contrary, after
termination of this Agreement due to the expiration of the License Period as provided in Section
13.1(i), Licensee shall have a fully paid-up, non-cancelable worldwide non-exclusive right and
license to make, have made, assemble, manufacture, develop, use, operate, market, lease, sell,
offer for sale, distribute and service Licensed Products, and to practice or have practiced the
Licensed Technology in connection with the Licensed Products subject to continuation by Licensee of
its obligations under Sections 11.1, 11.3 and 11.4 hereof throughout the continued exercise by
Licensee of its rights under such license.



-18-









 





ARTICLE 14

Governing Law; Dispute Resolution




          14.1 Governing Law. This Agreement is made in accordance with and shall be governed
and construed in accordance with the laws of the State of California, U.S.A., as applied to
contracts executed and performed entirely with the State of California, without regard to conflicts
of laws rules.




          14.2 Arbitration.




               14.2.1 In the event of any dispute, controversy, or claim arising out of or relating to, or in
connection with this Agreement, including any question regarding its existence, validity or
termination or regarding a breach hereof (a “Dispute”), the Parties agree to hold a meeting
promptly following the request of a Party, attended by individuals with decision-making authority
regarding the Dispute, to attempt in good faith to negotiate a resolution of the Dispute. If,
within thirty (30) days after such meeting, the Parties have not succeeded in negotiating a
resolution of the Dispute, such Dispute shall be exclusively resolved by final and binding
arbitration in Los Angeles, California, or other mutually agreeable location, in accordance with
the Commercial Arbitration Rules of the American Arbitration Association (the “Rules”),
then in effect.



               14.2.2 Any Party shall have the right to initiate arbitration, by providing written notice to
the other Parties of its intent to arbitrate and the nature of the Dispute, and to have such
Dispute administered and finally resolved under the Rules. Each Party hereby agrees to submit to
such arbitration. Unless the Parties agree upon the appointment of a sole arbitrator, there shall
be three (3) arbitrators appointed in accordance with the Rules. Notwithstanding anything to the
contrary contained in this Section 14.2, the Arbitrator(s) shall have no authority to compel
specific performance, order any injunctive or other equitable relief. The Parties hereby agree
that any proceedings to compel arbitration shall be brought only in accordance with Section 14.3.



               14.2.3 To the extent not provided under the Rules, the Parties shall have the right of
discovery as accorded to parties in civil litigation under the U.S. Federal Rules of Civil
Procedure; however, the period for discovery shall be limited to thirty (30) days. The Parties
shall bear the cost of arbitration equally unless the arbitrators require the non-prevailing Party
to bear all or any portion of the prevailing Party’s costs (including, without limitation, the
prevailing Party’s reasonable attorneys’ fees). The arbitrators will be instructed to prepare and
deliver to all parties a written opinion explaining their decision. Decisions of the arbitrators
shall be made by a majority vote. The award rendered in an arbitration commenced hereunder shall
be final and binding as if rendered by a court of competent jurisdiction.



               14.2.4 The rights and obligations of the Parties to arbitrate any Dispute shall survive the
expiration or termination of this Agreement for any reason and



-19-









 




shall apply notwithstanding compliance or non-use of the good faith resolution procedures of
this Section 14.2.




          14.3 Rights to Bring Certain Actions. Notwithstanding Section 14.2, since the breach
of the provisions of this Agreement cannot be adequately compensated solely by monetary damages,
nothing contained in this Agreement shall preclude an aggrieved Party from seeking a court order
compelling arbitration, enjoining or restraining any such breach, or enforcing specific performance
of any provision hereof, or any other equitable remedy to which it may be entitled in order to
compel strict compliance with the provisions of this Agreement. Any such proceeding shall be
brought only in the U.S. District Court for the Central District of California situated in the
County of Los Angeles, or if such Court lacks jurisdiction over the parties or the proceeding, in
the courts of the State of California located in the County of Los Angeles, and each Party hereby
agrees to submit to the exclusive jurisdiction of such courts for such purposes.




ARTICLE 15

Miscellaneous




          15.1 Entire Agreement. This Agreement, together with any exhibits and schedules
hereto, contains the entire agreement and understanding between the Parties hereto with respect to
the subject matter hereof, and supersedes and merges all prior discussions, representations,
negotiations, and agreements (whether written or verbal) between the Parties, with respect to the
subject matter of this Agreement.




          15.2 Assignments. Licensee may not assign or transfer any of its rights or
obligations under this Agreement except that, subject to Section 15.3, (i) a legal successor to
Licensee may, by operation of law, succeed to Licensee’s rights and obligations under this
Agreement, and (ii) Licensee may assign this Agreement to the purchaser of all or substantially all
of the assets of its business, provided that any assignment under clause (i) or clause (ii) is
subject to Licensor’s prior written approval, which approval shall not be unreasonably withheld,
conditioned or delayed, and any failure to approve or disapprove such assignment within ten (10)
business days after Licensor’s receipt of Licensee’s written request therefore shall be deemed an
approval. Any attempted or purported assignment or transfer by Licensee in breach of the preceding
sentence shall be null and void. Neither Caltech nor USC may assign or transfer any of its rights
or obligations under this Agreement without Licensee’s prior written approval, which approval shall
not be unreasonably withheld, conditioned or delayed, and any failure to approve or disapprove any
such assignment within ten (10) business days after Licensee’s receipt of the written request
therefore from Caltech or USC shall be deemed to be an approval. Any attempted or purported
assignment or transfer by Caltech or USC in breach of the preceding sentence shall be null and
void.




          15.3 Ownership Restrictions on Licensee. Licensee will not be majority-owned or
controlled by an existing manufacturing company or its Affiliate for a period of three years from
the Effective Date. Licensee is initially capitalized in the





-20-









 






amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00), and owned by investors
jointly with USC, Caltech, Via Space Technologies LLC and key employees of Licensee.




          15.4 Third Party Beneficiary. DTI shall be a third party beneficiary of this
Agreement solely with respect to the Parties’ obligations set forth in Articles 2 and 4, and
Sections 5.2.1, 6.2, 6.3, 11.3, 11.4, 12.2, 12.6, 13.2, 13.3.3 and 13.3.6, and only to the extent
each of the foregoing pertains to any of DTI’s rights or obligations set forth in the DTI License
or the Technology License and Transferred Rights Agreement.




          15.5 Export Compliance. License shall comply with all applicable local, state,
national and international laws, and License specifically agrees to comply with the export control
laws and regulations of the United States, and License shall not export or reexport any Licensed
Products in any manner contrary to the applicable export control laws or laws and regulations of
the United States or any country.




          15.6 Delivery of Certain Documents. Licensee agrees to deliver to Licensor upon
execution of this Agreement all documents provided to the Investors in connection with the closing
of the initial funding of Licensee.




          15.7 Headings. The headings used in this Agreement are for convenience of reference
only and are not intended to be a part of or to affect the meaning or interpretation of this
Agreement.




          15.8 Amendments. No amendment or modification hereof shall be valid or binding upon
the parties unless made in writing and signed by both parties.




          15.9 Force Majeure. Any delay in performance or failure to perform by any Party under
this Agreement (other than the payment of monies due) shall be excused to the extent caused by the
occurrence, of any event beyond the reasonable control of the Party affected (a “Force Majeure
Event”), including but not limited to: acts of God; embargoes; changes in Law; strikes or
other concerted acts of workers; fire, flood, explosion; riots, wars, civil disorder; rebellion or
sabotage; and accident or breakage to equipment or machinery. The Party suffering the Force
Majeure Event shall notify the other Party as soon as is reasonably possible of the occurrence of
the Force Majeure Event, the anticipated duration thereof, and anticipated impact upon the affected
Party’s obligations under this Agreement, and shall use all commercially reasonable efforts to
remedy the cause or effects of such Force Majeure Event and resume full performance under this
Agreement.




          15.10 Notices. All notices and other communications required or permitted to be given
hereunder shall be in writing and: (a) personally delivered with written confirmation of receipt;
(b) transmitted by postage prepaid priority U.S. mail;
(c) transmitted by facsimile with written confirmation of successful transmission generated by
the transmitting machine which indicates the fax number of the recipient





-21-









 







below; or (d) by overnight
air courier with written confirmation of receipt, to each Party as follows:




	 	 	 
	To Licensor:

	 	Office of Technology Transfer
	 

	 	California Institute of Technology
	 

	 	1200 East California Boulevard, M/C 210-85
	 

	 	Pasadena, California 91125
	 

	 	Fax: (626) 356-2486
	 
	 	 
	 

	 	University of Southern California
	 

	 	Patent and Copyright Administration
	 

	 	3716 So. Hope Street, No. 313
	 

	 	Los Angeles, California 90007-4344
	 

	 	Fax: (213) 744-1832
	 
	 	 
	To Licensee:

	 	Direct Methanol Fuel Cell Corporation
	 

	 	2400 Lincoln Ave.
	 

	 	Altadena, California 91001
	 

	 	Attention: Dr. Carl Kukkonen
	 

	 	Fax: (626) 296-6311





Except as otherwise specified all notices and other communications shall be deemed to have been
given on the date of receipt if delivered under (a), (b) or (d) above, or on the day of
transmission if delivered under (c) above. Any Party may change any of the above information by
written notice to the other Party.




          15.11 Relationship of the Parties. Nothing contained in this Agreement shall be
construed or implied to create an agency, partnership or employer and employee relationship between
Licensor and Licensee. At no time shall one Party make commitments or incur any charges or
expenses for or in the name of the other Party, except as specifically provided herein.




          15.12 Severability. If any term, condition or provision of this Agreement is held to
be unenforceable for any reason, it shall, if possible, be interpreted so as to avoid its
unenforceability, rather than voided, in order to achieve the intent of the parties to this
Agreement to the maximum extent possible. If the term, condition or provision cannot be so
interpreted to preserve such intent of the parties, it shall be severed and the remainder of this
Agreement shall remain in full force and effect, unless the continuation of, this Agreement absent
such severed term, condition or provision
would materially alter the Parties’ intent, as evidenced by the totality of the Agreement,
including such severed term, condition or provision.




-22-









 








          15.13 Waiver. None of the terms, covenants and conditions of this Agreement can be
waived except by the written consent of the Party waiving compliance.




          15.14 Prior Agreements. This Agreement supersedes all prior agreements and
understandings between the Parties hereto, whether written or oral, concerning as to the subject
matter hereof.




          15.15 Remedies Not Exclusive. Any remedies specified in this Agreement are cumulative
and in addition to any other remedies that a Party may have at law, in equity or otherwise.




-23-









 








          IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly authorized
officers or representatives on the dates specified below.




	 	 	 	 	 	 	 	 	 	 	 
	“LICENSOR”	 	 	 	“LICENSEE”	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	California Institute of Technology	 	 	 	Direct Methanol Fuel Cell Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

Name:
	 	 	 	 	 	 

Name:
	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 
	 

	 	Date:
	 	 	 	 	 	Date:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	University of Southern California	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 

Name:
	 	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 	 	 	 	 






-24-









 






SCHEDULE 1.1




Definitions




          1.1 Definitions. For the purposes of this Agreement, the following terms shall have
the meaning:




               1.1.1 “Affiliate” means any Person that directly or indirectly (through one or more
intermediaries) controls or is controlled by or is under common control with the Person specified.
For purposes of this definition, control of a Person means the ownership (either direct or
indirect) of fifty percent (50%) or more of the voting stock or equity shares of such Person, or
otherwise, the power (direct or indirect) to cause or determine the direction of the management and
policies of such Person (whether by contract or otherwise) provided that, if the law of any country
which is the domicile of an Affiliate limits the maximum ownership that may be held in such
Affiliate by foreign nationals to less than fifty percent (50%) then control of such Affiliate, in
the case of a corporation, shall be direct or indirect beneficial ownership of at least the maximum
percentage permitted by law of such country or, in the case of any other business entity, the right
to receive at lease the maximum percentage of the net income of such business entity permitted by
the law of such country.



               1.1.2 “Claim” means (a) any claim, demand, judgment, cause of action or settlement and
(b) any loss, costs (including costs of litigation and reasonable attorneys’ fees), damages, fines
or penalties arising out of or resulting from any of the foregoing.



               1.1.3 “Confidential Information” means Licensor’s technical, engineering and trade
secret information related to the Licensed Technology and related information, as exists now and in
the future, and all financial, marketing and other commercial or proprietary information and data
that may be disclosed by Licensor to Licensee (directly or indirectly) or otherwise acquired by
Licensee or any Licensee Representative from Licensor or any Licensor Representative, except to the
extent that such information, (a) as of the date of disclosure to or acquisition by Licensee or any
Licensee Representative, was (i) known to Licensee or any Licensee Affiliate; (ii) disclosed in
published literature; (iii) generally available to or known within industry; (iv) lawfully obtained
by Licensee or any Licensee Affiliate from a third party; or (b) after the date of disclosure to or
acquisition hereunder, is (i) disclosed in published literature through no fault of Licensee,
Licensee’s Representatives, or any Person to whom Licensee disclosed such information; (ii)
generally available to or known within industry through no fault of Licensee, Licensee’s
Representatives, or any Person to whom Licensee disclosed such information; (iii) lawfully obtained
by Licensee or any Licensee Affiliate from a third party who was determined by Licensee, after
reasonable inquiry, to be free of any fiduciary duty or obligation of confidentiality to Licensor
with respect to such information, and such information was provided to Licensee or Licensee
Affiliate without restriction on disclosure; or (iv) was independently developed by any Licensee or



Page 1 of 5









 




any Licensee Affiliate who had no access to the Confidential Information. For the purposes of
this Agreement, the collection of technical information included in the Licensed Technology and
disclosed in confidence by Licensor to Licensee or any Licensee Representative shall be presumed to
be Confidential Information and to afford a competitive advantage to Licensee even though limited
portions of such technical information may be in the public domain; provided, however, that in no
case shall any information which is in the public domain be deemed to be Confidential Information.




               1.1.4 “control” of a company by a Person occurs if securities of the company to which
are attached are greater than or equal to 50% of the votes that may be cast to elect directors of
the company or other rights to elect a majority of directors are held by or for the benefit of that
Person and the votes attached to those securities are sufficient to elect a majority of the
directors of the company.



               1.1.5 “Deductible Expenses” shall have the meaning ascribed to that term in the DTI
License and means the following items of expense incurred in connection with sales of Licensed
Products and included in accordance with recognized principles of accounting in the gross sales
price billed: (i) sales, use or turnover taxes; (ii) excise taxes, customs duties or consular
fees; (iii) transportation, freight, and handling charges, and insurance on shipments to customers;
(iv) trade or quantity discounts to the extent actually granted; (v) agent fees or commission; and
(vi) rebates, refunds and credits for any returned Licensed Products.



               1.1.6 “DTI” means that entity formerly known as DCT Technologies, Inc. and currently
known as DTI Energy, Inc., a corporation existing under the laws of the State of California having
an address at 5325 Venice Boulevard, Los Angeles, California, USA, 90019-5239.



               1.1.7 “DTI License” means that License Agreement effective as of the 24th day of
August, 1993 among Caltech, USC and DCT Technologies, Inc. (now DTI), a copy of which is attached
hereto as Schedule 1.1.7, as amended to date.



               1.1.8 “Effective Date” means the date upon which the last of the parties hereto has
executed this Agreement.



               1.1.9 “Encumbrance” means any mortgage, charge, pledge, hypothecation, security
interest, lien, easement, covenant, condition, lease, license, assignment, option or claim or any
other encumbrance or title defect of whatsoever nature or kind, regardless of form, whether or not
registered or registrable and whether or not consensual or arising at law (statute or otherwise),
including rights of creditors under bankruptcy or insolvency legislation.



               1.1.10 “Governmental Authority” means any nation or government, any state or political
subdivision thereof, any Federal, state, municipal, local, territorial or other governmental
department, commission, board, bureau, agency,



Page 2 of 5









 




regulatory authority, instrumentality, judicial or administrative body, domestic or foreign,
and any Person exercising executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government.




               1.1.11 “Gross Revenue” means the sum of (a) the gross sales price after Deductible
Expenses for Royalty-based Licensed Products or component parts thereof and (b) revenues and
recoveries otherwise received by Licensee as a result of any contribution to the funding of
Licensor’s filing and prosecution of third-party infringement litigation pursuant to Section 12.3
of this Agreement.



               1.1.12 “gross sales price” means the gross sales price established in or determined
for normal, bona fide arm’s-length transactions.



               1.1.13 “Investor” means those Persons who contributed to the initial funding of
Licensee pursuant to Section 9.2.6 of this Agreement.



               1.1.14 “Law” means any statute, law, code, regulation, ordinance, rule, judgment,
order, decree, permit, certification, concession, grant, franchise, license, agreement, directive,
guideline, policy, requirement, or other governmental restriction or any similar form of decision
of or determination by, or any interpretation or administration of any of the foregoing by, any
Governmental Authority, whether now or hereafter in effect.



               1.1.15 “License” has the meaning specified in Section 2.1.



               1.1.16 “Licensed Patents” has the meaning ascribed to that term in the DTI License,
which is listed in Schedule 1.1.16 and means any patent issued on the fuel cell technology
as set forth in New Technology Reports (“NTRs”) 19046, 19815, 19204, 19227, 19228, 19229,
19230 and any patents resulting from research funded by DTI, or which may at any time be determined
by USC, Caltech and DTI, or in the event of a dispute between USC, Caltech and DTI, as determined
by an arbitrator or court of competent jurisdiction, to be included under the DTI License and any
divisions, reissues, continuations, continuations-in-part, renewals, extensions or corresponding
foreign patents or patent applications of the foregoing patents and patent applications.



               1.1.17 “Licensed Products” has the meaning ascribed to that term in the DTI License
and means any product, device, subassembly, or assembly which consists of, incorporates, is made
by, or uses any of the Licensed Technology.



               1.1.18 “Licensed Technology” has the meaning ascribed to the term “Subject
Technology” in the DTI License and means devices or techniques covered by any claim in a
Licensed Patent.



               1.1.19 “Licensed Territory” means the world.



Page 3 of 5









 





               1.1.20 “Licensee Confidential Information” means and collectively includes all
confidential, proprietary, or other information (in any form whatsoever) of Licensee or any
Licensee Affiliate as exists now or in the future that may be disclosed to Licensor or any Licensor
Representative or otherwise acquired (directly or indirectly) by Licensor or any Licensor
Representative from Licensee or any Licensee Representative, except to the extent that such
information (a) as of the date of disclosure to Licensor or any Licensor Representative, was (i)
known to Licensor or any Licensor Affiliate; (ii) disclosed in published literature; (iii)
generally available to or known within industry; or (iv) lawfully obtained by Licensor or any
Licensor Affiliate from a third party; or (b) after the date of disclosure or acquisition
hereunder, is (i) disclosed in published literature through no fault of Licensor, Licensor
Representatives, or any Person to whom Licensor has disclosed such information; (ii) generally
available to or known within industry through no fault of Licensor, Licensor Representatives, or
any Person to whom Licensor has disclosed such information; (iii) lawfully obtained by Licensor or
any Licensor Affiliate from a third party who was determined by Licensor, after reasonable inquiry,
to be free of any fiduciary duty or obligation of confidentiality to Licensee with respect to such
information, and such information was provided to Licensor or Licensor Affiliate without
restriction on disclosure; or (iv) was independently developed by Licensor or any Licensor
Affiliate who had no access to Licensee Confidential Information. For the purposes of this
Agreement, the collection of technical information included in any Licensee Improvements and
disclosed in confidence by Licensee to Licensor or any Licensor Representative shall be presumed to
be Licensee Confidential Information and to afford a competitive advantage to Licensor even though
limited portions of such technical information may be in the public domain; provided, however, that
in no case shall any information which is in the public domain be deemed to be Licensee
Confidential Information.



               1.1.21 “Licensee Improvements” means and collectively includes any inventions,
improvements or modifications, made at any time during the License Period by Licensee, by Licensee
Affiliates or by any agent or contractor of Licensee or any Licensee Affiliate which constitute
improvements or modifications to the Licensed Patents.



               1.1.22 “Licensee Patents” means any and all United States patents and applications for
patents in respect of the Licensee Improvements, and the inventions and processes disclosed
therein, as well as all continuations, continuations-in-part, divisions and renewals thereof, all
patents that may be granted on such applications, and all reissues and extensions thereof.



               1.1.23 “Licensee Representative” means any Licensee Affiliate or any employee,
director, officer, accountant or attorney of Licensee or any Licensee Affiliate.



               1.1.24 “License Period” has the meaning set forth in Section 13.1.



Page 4 of 5









 





               1.1.25 “Licensor Representative” means any Licensor Affiliate, and any employee,
director, officer, accountant or attorney of Licensor or any Licensor Affiliate.



               1.1.26 “Licensor Rights” mean collectively the Confidential Information, the Licensed
Patents, the Licensed Technology and all other intellectual property rights and trade secrets
owned, possessed or licensed by Licensor relating to any of the foregoing, but excluding any
Licensee Confidential Information, Licensee’s intellectual property rights and Licensee’s trade
secrets.



               1.1.27 “Person” means an individual, corporation, body corporate, firm, limited
liability company, partnership, syndicate, joint venture, society, association, trust or other
unincorporated entity or federal, provincial, state, county or municipal Governmental Authority, or
trustee, executor, administrator or other legal representative.



               1.1.28 “Royalty-based Licensed Products” shall be deemed to mean and refer to any fuel
cell or fuel cell stack that is a Licensed Product and any associated system components required to
operate the fuel cell or fuel cell stack to produce electrical power which are sold therewith.



               1.1.29 “Technology License and Transferred Rights Agreement” means that certain
Technology License and Transferred Rights Agreement, dated July 29, 1999, among DTI Energy, Inc.,
California Institute of Technology and University of Southern California, attached hereto as
Schedule 1.1.27.



               1.1.30 “Third Party License” means any license granted by Licensor (whether or not for
consideration) to any other Person for use of the Licensor Rights at a plant or plants within the
Licensed Territory. “Third Party Licensee” means any Person to whom a Third Party License
is granted.



               1.1.31 “Transaction Documents” means the following documents, as may be amended from
time to time: (a) Option for Non-Exclusive License executed by the Parties on May 21, 2002, as
amended; (b) Option for Confidential License executed by the Parties on May 21, 2002, as amended;
(c) the Confidential License Agreement executed by the Parties on January 19, 2006; (d) the
Technology Transfer and Subscription Agreement executed by the Parties on May 21, 2002; and (e) the
Registration Rights Agreement executed by the Parties on May 21, 2002.



Page 5 of 5









 





SCHEDULE 1.1.7




DTI License




Page 1 of 1









 





SCHEDULE 1.1.16




Licensed Patents




SCHEDULE A




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Filed	 	 
	Ref No.	 	Title	 	Appl. No.	 	(priority)	 	Status
	CIT2209

	 	AQUEOUS LIQUID FEED

ORGANIC FUEL CELL

USING SOLID POLYMER

ELECTROLYTE MEMBRANE
	 	US 08/135,007
	 	11 Oct 93
	 	Issued 04 Feb 97

 US 5,599,638
	 
	 	 	 	 	 	 	 	 
	CIT2209-AU

	 	ORGANIC FUEL CELL &

METHODS OF OPERATION

THEREOF & MANUFACTURE

OF ELECTRODE THEREFOR
	 	AU 9481219
	 	18 Oct 94
	 	Issued 1 Jun 00 No.
716164
	 
	 	 	 	 	 	 	 	 
	CIT2209-BR

	 	“           “           “
	 	BR 9408623
	 	18 Oct 94
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209

	 	"           “           “
	 	CA 220315
	 	18 Oct 94
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-CN

	 	“           “           “
	 	CN 94195212.6
	 	18 Oct 94
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-EPO

	 	“           “           “
	 	EP 95900379.9
	 	18 Oct 94
	 	Pending (FR, DE, IT, NE, SP, SE, GB designated)
	 
	 	 	 	 	 	 	 	 
	CIT2209-IL

	 	ORGANIC FUEL CELL

METHODS & APPARATUS
	 	IL 115867
	 	18 Oct 94
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209

	 	A LIQUID FEED FUEL CELL
	 	IL 127662
	 	18 Oct 94
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209

	 	ORGANIC FUEL CELL &

METHODS OF OPERATION

THEREOF & MANUFACTURE

OF ELECTRODE THEREFOR
	 	JP 08-513186
	 	18 Oct 94
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209

	 	“           “           “
	 	KR 702571/97
	 	18 Oct 94
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-F

	 	“           “           “
	 	PCT US94/11911
	 	18 Oct 94
	 	National Phase
	 
	 	 	 	 	 	 	 	 
	CIT2209-1

	 	ORGANIC FUEL CELL

METHODS & APPARATUS
	 	US 08/478,801
	 	07 Jun 95

(12 Oct 93)
	 	Issued 19 Jun 01 6,248,460
	 
	 	 	 	 	 	 	 	 
	CIT2209-1-D1

	 	ORGANIC FUEL CELL

METHODS & APPARATUS
	 	US 09/881,222

(divisional)
	 	13 Jun 01
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-1-D2

	 	ORGANIC FUEL CELL

METHODS & APPARATUS
	 	US 09/881,309

(divisional)
	 	13 Jun 01
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-2

	 	DIRECT METHANOL FEED

FUEL CELL & SYSTEM
	 	US 08/569,452 (cip)
	 	08 Dec 95

(12 Oct 93)
	 	Issued 30 Jun 98 US 5,773,162
	 
	 	 	 	 	 	 	 	 
	CIT2209-2F-AU

	 	“           “          “
	 	AU 9716849
	 	09 Dec 96

(08 Dec 95)
	 	No. 721401
	 
	 	 	 	 	 	 	 	 
	CIT2209-2F-CA-

	 	“           “           “
	 	CA 2240019
	 	09 Dec 96

(08 Dec 95)
	 	Pending






Page 1 of 3









 







	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Filed	 	 
	Ref No.	 	Title	 	Appl. No.	 	(priority)	 	Status
	CIT2209-2F-EPO

	 	“           “           “
	 	
EP 96945597.1
	 	09 Dec 96

(08 Dec 95)
	 	Pending (FR, DE,IT, NE, SP, SE, GB designated)
	 
	 	 	 	 	 	 	 	 
	CIT2209-2F-JP

	 	“           “           “
	 	
JP 09-521493
	 	09 Dec 96
(08 Dec 95)
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-2F-JP-D1

	 	ORGANIC FUEL CELL

METHODS & APPARATUS
	 	JP 2001-255274
	 	24 Aug 01
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-2F-JP-D2

	 	“           “           “
	 	JP 2001-255277
	 	24 Aug 01
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-2F-JP-D3

	 	“           “           “
	 	JP 2001-255281
	 	24 Aug 01
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-2F-JP-D4

	 	“           “           “
	 	JP 2001-255284
	 	24 Aug 01
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-2F-JP-D5

	 	“           “           “
	 	JP 2001-255288
	 	24 Aug 01
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-2F

	 	“           “           “
	 	PCT US96/19731
	 	09 Dec 96

(08 Dec 95)
	 	National Phase
	 
	 	 	 	 	 	 	 	 
	CIT2209-2C

	 	DIRECT METHANOL FEED

FUEL CELL & SYSTEM
	 	US 09/006,846
	 	14 Jan 98

(12 Oct 93)
	 	Issued 14 Nov 00

 US 6,146,781
	 
	 	 	 	 	 	 	 	 
	CIT2209-2C-D1

	 	DIRECT METHANOL FEED

FUEL CELL & SYSTEM
	 	US 09/430,583

(divisional)
	 	29 Oct 99
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-2C-D1

	 	“           “           “
	 	US 09/433,802

(divisional)
	 	3 Nov 99
	 	Issued 16 Oct 01

 US 6,303,244
	 
	CIT2209-2C-D3

	 	“           “           “
	 	US 09/434,850

(divisional)
	 	4 Oct 99
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-2C-D4

	 	“           “           “
	 	US 09/437,331

(divisional)
	 	9 Nov 99
	 	Issued 3 Jul 01

 US 6,254,748
	 
	 	 	 	 	 	 	 	 
	CIT2209-2C-D4-C

	 	“           “           “
	 	US 09/894,022
(cont.)
	 	27 Jun 01
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2209-2C-D5

	 	DIRECT METHANOL FEED

FUEL CELL & SYSTEM
	 	US 09/437,997

(divisional)
	 	10 Nov 99
	 	Issued 24 Jul 01

 US 6,265,093
	 
	 	 	 	 	 	 	 	 
	CIT2355

	 	NEW POLYMER MATERIAL

FOR ELECTROLYTIC

MEMBRANES IN FUEL

CELLS
	 	US 08/561,899
	 	22 Nov 95
	 	Issued 18 Aug 98

 US 5,795,496
	 
	 	 	 	 	 	 	 	 
	CIT2355

	 	“           “           “
	 	AU 9714068
	 	22 Nov 96

(22 Nov 95)
	 	Pending
	 
	 	 	 	 	 	 	 	 
	CIT2355

	 	NEW POLYMER MATERIAL

FOR ELECTROLYTIC

MEMBRANES IN FUEL

CELLS
	 	CA 2238189
	 	22 Nov 96

(22 Nov 95)
	 	Pending
	 
	 	 	 	 	 	 	 	 





Page 2 of 3









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Filed	 	 
	Ref No.	 	Title	 	Appl. No.	 	(priority)	 	Status
	CIT2355

	 	“           “           “
	 	EP 96944201.1
	 	22 Nov 96

(22 Nov 95)
	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	CIT2355

	 	“           “           “
	 	JP 09-519946
	 	22 Nov 96

(22 Nov 95)
	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	CIT2355-PCT

	 	“           “           “
	 	PCT US96/18823
	 	22 Nov 96

(22 Nov 95)
	 	National Phase
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2494

	 	ASYMMETRIC ELECTRODES

FOR DIRECT FEED FUEL

CELLS
	 	US 09/021,640
	 	10 Feb 98
	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2494-PCT

	 	“           “           “
	 	PCT USS99/02677
	 	08 Feb 99

(10 Feb 98)
	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2494-EPO

	 	“           “           “
	 	99906802.6	 	 	 	08 Feb 99
	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2519

	 	DIRECT METHANOL FUEL

CELL WITH REDUCED

CATALYST LOADING
	 	US 09/021,694
	 	10 Feb 98
	 	Issued 30 Nov 99

 US 5,992,008
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2519-PCT

	 	“           “           “
	 	PCT USS99/02835
	 	09 Feb 99

(10 Feb 98)
	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2519-EPO

	 	“           “           “
	 	99905918.9	 	 	 	09 Feb 99
	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2690-P

	 	ADVANCED POLYMER

ELECTROLYTE MEMBRANE &

ELECTRODE ASSEMBLY FOR

THE METHANOL FUEL CELL

& OTHER APPLICATIONS
	 	US 60/059,493
	 	22 Sep 97
	 	Lapsed – full US appl. filed
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2690

	 	POLYMER ELECTROLYTE

MEMBRANE ASSEMBLY FOR

FUEL CELLS
	 	US 09/158,643
	 	22 Sep 98

 (22 Sep 97)
	 	Issued 21 Dec 00

 US 6,150,047
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2690-D1

	 	“           “           “
	 	US 09/717,721
(divisional)
	 	21 Sep 00
	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2690-D2

	 	“           “           “
	 	US 09/717,673
(divisional)
	 	21 Sep 00
	 	Pending
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2727-P

	 	IMPROVED HSPES

MEMBRANE ELECTRODE

ASSEMBLY
	 	US 60/066,849
	 	25 Nov 97
	 	Lapsed – full US appl. filed
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2727

	 	HSPES MEMBRANE

ELECTRODE ASSEMBLY
	 	US 09/199,074
	 	23 Nov 98

(25 Nov 97)
	 	Issued 24 Oct 00

 US 6,136,463
	 
	 	 	 	 	 	 	 	 	 	 
	CIT 2727-PCT

	 	IMPROVED HSPES

MEMBRANE ELECTRODE

ASSEMBLY
	 	PCT US98/25048
	 	23 Nov 98

(25 Nov 97)
	 	Pending






Page 3 of 3









 






SCHEDULE 1.1.27




Technology License and Transferred Rights Agreement




Page 1 of 1









 





SCHEDULE 4.2




Form of Confidentiality Agreement for Licensor Confidential Information




MUTUAL NONDISCLOSURE AGREEMENT




     This agreement is made and entered into as of the ___th day of                      200_. (“Effective
Date”) by and between                      (“Company”), having a place of business at
                                        , and University of Southern California (“USC”) and California
Institute of Technology (“Caltech”) (hereinafter referred to as the “parties”).



     WHEREAS, the parties may wish, for their mutual benefit, to disclose to each other certain
information relating to                                          (the “Purpose”), some of which may be
Proprietary Information as defined below; and



     WHEREAS, the parties wish to set forth conditions and obligations which will govern the use,
duplication and disclosure of any Proprietary Information that may be disclosed by the originating
party to the receiving party.



     NOW THEREFORE, the parties agree as follows:




	 	1.	 	For purposes of this Agreement, the term “Proprietary Information” shall mean any
information or data disclosed by either party to the other under or in contemplation of
this Agreement, including, but not limited to, the following categories of information:
the terms of this Agreement; business plans and any related information; business
processes; any technology (including, without limitation, software and hardware) used,
including, without limitation, any drawings, schematics or products, and all related
documentation; intellectual property including know-how, algorithms, trade secrets and
pending patent applications and any other legally recognized intellectual property
rights; actual or prospective business partners, investors, employees, independent
contractors or third party suppliers; financial and operational information and other
matters relating to the operation of the parties’ businesses, including, without
limitation, information relating to actual or prospective customers and customer lists,
customer usage requirements, business and customer usage forecasts and projections,
accounting, finance or tax information, pricing information, sales and marketing
information and any information relating to the corporate and/or operational structure
of USC and Caltech, Company and their respective affiliates, and all information that
the parties have received from third parties which the parties consider proprietary.
	 
	 	2.	 	When used herein Company, USC and Caltech shall include, individually and
collectively, their affiliated companies, officers, directors, agents, and employees.




Page 1 of 6









 






	 	3.	 	The parties agree to hold in confidence and withhold from third parties any and
all Proprietary Information disclosed by one party to the other and to use Proprietary
Information only for the Purpose stated hereinabove and for no other purpose unless the
originating party shall otherwise agree specifically in writing. Each party agrees to
take reasonable and appropriate measures to safeguard any Proprietary Information
received from the other party from theft, loss or disclosure to others, and to limit
access to Proprietary Information to those officers, directors, agents, and employees
within the receiving party’s organization or control who reasonably require access in
order to accomplish the Purpose. The term “originating party” shall mean the party
disclosing its Proprietary Information and the term “receiving party” shall mean the
party receiving originating party’s Proprietary Information.
	 
	 	4.	 	The receiving party agrees that information disclosed by the originating party
whether in oral or written form need not be characterized as “Proprietary” or
“Confidential” to be considered Proprietary Information, but that any information
prominently identified as proprietary using an appropriate legend, marking stamp, or
other clean and conspicuous written identification which unambiguously indicates the
information being provided is the originating party’s Proprietary Information will be
treated as Proprietary Information. In the event of a dispute between the parties, the
receiving party will have the burden of proving the non-proprietary nature of any
information characterized by and received from the originating party as Proprietary
Information.
	 
	 	5.	 	The receiving party shall not be liable for use or disclosure of any such
Proprietary Information if it can be established that the same:






	 	a.	 	is or becomes a part of the public knowledge or literature without breach of this
Agreement by the receiving party; or
	 
	 	b.	 	is known to the receiving party without restriction as to further disclosure when
received; or
	 
	 	c.	 	is independently developed by the receiving party as demonstrated by written
records without use of the originating party’s Proprietary Information; or
	 
	 	d.	 	becomes known to the receiving party from a third party who had a lawful right to
disclose it without breach of a duty owed to the originating party; or
	 
	 	e.	 	is disclosed by the originating party to a third party without restriction as to
further disclosure.




Page 2 of 6









 











     Specific Proprietary Information shall not be deemed to be available to the public or in the
possession of the receiving party merely because it is embraced by more general information so
available or in the receiving party’s possession.




	 	6.	 	Should the receiving party be faced with judicial or United States Governmental
process to disclose Proprietary Information received hereunder, the receiving party
shall forthwith notify the originating party in writing to enable the originating party
to seek a protective order or other confidential treatment for its Proprietary
Information subject to such process. In any event, such party will disclose only that
portion of the Proprietary Information legally required to be disclosed and will use
best efforts to assure confidential treatment is accorded any Proprietary Information so
disclosed.
	 
	 	7.	 	The exclusive points of contact with respect to the transmission and control of
Proprietary Information disclosed hereunder are designated by the respective parties as
follows:





	 	 	 
	California Institute of Technology

	 	University of Southern California
	1200 East California Blvd.

	 	University Park
	Pasadena, California 91125

	 	Los Angeles, CA 90089
	Attention:                                         

	 	Attention: Dennis Dougherty






     Each party may change its designee by written notice to the other.




	 	8.	 	The receiving party agrees to promptly notify the originating party of the loss
or unauthorized use or disclosure of any Proprietary Information. Proprietary
Information shall only be copied or reproduced as is reasonably necessary to permit the
receiving party to fulfill the Purpose set forth above. Upon request of the originating
party, the receiving party shall surrender any part or all of the Proprietary
Information to the originating party, except the receiving party may retain one archival
copy of the other party’s Proprietary Information, to be used only to determine its
on-going obligations this Agreement
	 
	 	9.	 	Proprietary Information, including all tangible media in which Proprietary
Information is fixed and copies thereof, shall remain the property of the originating
party. Neither this Agreement nor the disclosure of Proprietary Information hereunder
shall be construed as granting any right or license under any invention or patent or
other legally recognized intellectual property right now or hereafter owned or
controlled by either party, nor shall any such disclosure constitute any representation,
warranty, assurance, guaranty, or inducement by the originating party to the receiving
party with respect to the




Page 3 of 6









 












	 	 	 	infringement of any patent or other rights of others. No warranty or representation as
to the accuracy, completeness or technical or scientific quality of any Proprietary
Information is provided herein. WITHOUT RESTRICTING THE FOREGOING, NEITHER PARTY MAKES
ANY REPRESENTATION OR WARRANTIES AS TO MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A
PARTICULAR PURPOSE OF ANY PROPRIETARY INFORMATION DISCLOSED HEREUNDER.
	 
	 	10.	 	The originating party recognizes that the receiving party may currently or in the
future be developing information internally, or receiving information from other parties
that may be similar to the originating party’s Proprietary Information. Nothing in this
Agreement will prohibit the receiving party from developing and marketing products or
services that compete with the originating party’s products, provided that in doing so,
the receiving party does not use or disclose the originating party’s Proprietary
Information.
	 
	 	11.	 	Each party shall bear its own costs incurred under or in connection with this
Agreement. Nothing in this Agreement shall be construed as an obligation by either
party to enter into a contract, subcontract, or other business relationship with the
other party.
	 
	 	12.	 	The rights and obligations provided by this Agreement shall take precedence over
specific legends or statements associated with Proprietary Information when received.
	 
	 	13.	 	This Agreement shall be effective as of the Effective Date, but will be
retroactive to the first date of disclosure of Proprietary Information to the receiving
party relating to the Purpose. The term of this Agreement shall expire two (2) years
from the date of the last written disclosure of Proprietary Information. This Agreement
may be earlier terminated by either party upon thirty (30) days written notice to the
other party. Termination or expiration of this Agreement shall not relieve either party
of any obligation to preserve any Proprietary Information received hereunder in
confidence for a period of five (5) years from the date of receipt thereof.
	 
	 	14.	 	Upon termination or expiration of this Agreement, each party shall cease use of
all Proprietary Information furnished hereunder and shall, upon written direction of the
originating party, return to the originating party, or destroy all such Proprietary
Information, together with all copies made thereof by the receiving party. Upon
request, the receiving party shall send the originating party a destruction certificate.




Page 4 of 6









 






	 	15.	 	This Agreement, and the right and obligations hereunder, may not be transferred or
assigned by one party without prior written consent of the other party except that the
parties may assign this Agreement and its rights and obligations under it, and transfer
and Proprietary Information, in connection with the sale or other disposition of all or
substantially all of the assets of the product line or business unit to which this
Agreement relates.
	 
	 	16.	 	The validity, interpretation, and enforcement of this Agreement shall be governed
by the laws of the State of California and that any judicial relief will be sought in
either the state or federal courts found in Los Angeles County, California and the
parties expressly consent to jurisdiction therein.
	 
	 	17.	 	Each of the parties acknowledges that damages alone will not be an adequate
remedy for any breach or violation of its obligations hereunder and that, in addition to
all other remedies to which the other party may be entitled hereunder or otherwise, such
other party shall be entitled to seek injunctive relief, including specific performance,
with respect to said obligations in any court of competent jurisdiction
	 
	 	18.	 	The parties agree not to reverse engineer or attempt to obtain additional
knowledge to any feature or characteristic of either party’s Proprietary Information
that is beyond the scope of this Agreement.
	 
	 	19.	 	The receiving party will not in any form export, re-export, resell, ship, divert,
or cause to be exported, re-exported, resold, shipped, or diverted, directly or
indirectly, any product or technical data or software of the other party, or the direct
product of such technical data or software, to any country for which the United States
Government or any agency thereof requires an export license or other governmental
approval without first obtaining such license or approval.
	 
	 	20.	 	This is the entire Agreement between the parties concerning the disclosure and
use of Proprietary Information, superseding any prior or contemporaneous written or oral
agreements as to the disclosure and protection of Proprietary Information in connection
with the aforesaid purposes and may not be amended or modified except by subsequent
agreement in writing by duly authorized representatives of the parties.





[Remainder of this page intentionally left blank]




Page 5 of 6









 








     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate
originals, or in signed fax copies to be followed by duplicate originals, by their duly authorized
representatives.



	 	 	 	 	 	 	 	 	 	 	 
	Company	 	 	 	 	 	University of Southern California	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Title:

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	California Institute of Technology	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 






Page 6 of 6









 






SCHEDULE 8.2




Form of Confidentiality Agreement for Licensee Confidential Information




MUTUAL NONDISCLOSURE AGREEMENT




          This agreement is made and entered into as of the ___th day of                     , 2002. (“Effective
Date”) by and between                                          (“Company”), having a place of business at
                                        , and Direct Methanol Fuel Cell Corporation, a Delaware corporation (“DMFCC”),
having a place of business at 24 Lincoln Avenue, Altadena, CA 91001 (hereinafter referred to as the
“Parties”).




          WHEREAS, the parties may wish, for their mutual benefit, to disclose to each other certain
information relating to                                          the (“Purpose”), some of which may be Proprietary
Information as defined below; and




          WHEREAS, the Parties wish to set forth conditions and obligations which will govern the use,
duplication and disclosure of any Proprietary Information that may be disclosed by the originating
party to the receiving party.




          NOW THEREFORE, the Parties agree as follows:




          1. For purposes of this Agreement, the term “Proprietary Information” shall mean any
information or date disclosed by either party to the other under or in contemplation of this
Agreement, including, but not limited to, the following categories of information; the terms of
this Agreement; business plans and any related information; business processes; any technology
(including, without limitation, software and hardware) used, including, without limitation, any
drawings, schematics or products, and all related documentation; intellectual property including
know-how, algorithms, trade secrets and pending, patent applications and any other legally
recognized intellectual property rights; actual or prospective business partners, investors,
employees, independent contractors or third party suppliers; financial and operational information
and other matters relating to the operation of the parties’ businesses, including, without
limitation, information relating to actual or prospective customers and customer lists, customer
usage requirements, business and customer usage forecasts and projections, accounting, finance or
tax information, pricing information, sales and marketing information and any information relating
to the corporate and/or operational structure of DMFCC, Company and their respective affiliates,
and all information that the parties have received from third parties which the parties consider
proprietary.




          2. When used herein, Company and DMFCC shall include, individually and collectively, their
affiliated companies, officers, directors, agents and employees.





Page 1 of 5









 








          3. The parties agree to hold in confidence and withhold from third parties any and all
Proprietary Information disclosed by one party to the other and to use Proprietary Information only
for the Purpose stated hereinabove and for no other purpose unless the originating party shall
otherwise agree specifically in writing,. Each party agrees to take reasonable and appropriate
measures to safeguard any Proprietary Information received from the other party from theft, loss or
disclosure to others, and to limit access to Proprietary Information to those officers, directors,
agents and employees within the receiving party’s organization or control who reasonably require
access in order to accomplish the Purpose. The term “originating party” shall mean the party
disclosing its Proprietary Information and the term “receiving party” shall mean the party
receiving originating party’s Proprietary Information.




          4. The receiving party agrees that information disclosed by the originating party whether in
oral or written form need not be characterized as “Proprietary” or “Confidential” to be considered
Proprietary Information, but that any information prominently identified as proprietary using an
appropriate legend, marking stamp, or other clean and conspicuous written identification which
unambiguously indicates the information being provided as the originating party’s Proprietary
Information will be treated as Proprietary Information. In the event of a dispute between the
parties, the receiving party will have the burden of proving the non-proprietary nature of any
information characterized by and received from the originating party as Proprietary Information.




          5. The receiving party shall not be liable for use or disclosure of any such Proprietary
Information if it can be established that the same:




               a. is or becomes a part of the public knowledge or literature without breach of this Agreement
by the receiving party; or



               b. is known to the receiving party without restriction as to further disclosure when received;
or



               c. is independently developed by the receiving party as demonstrated by written records
without use of the originating party’s Proprietary Information; or



               d. becomes known to the receiving party from a third party who had a lawful right to disclose
it without breach of a duty owed to the originating party; or



               e. is disclosed by the originating party to a third party without restriction as to further
disclosure.



Page 2 of 5









 





          Specific Proprietary Information shall not be deemed to be available to the public or in the
possession of the receiving party merely because it is embraced by more general information so
available or in the receiving party’s possession.




          6. Should the receiving party be faced with judicial or United States Governmental process to
disclose Proprietary Information received hereunder, the receiving party shall forthwith notify the
originating party in writing to enable the originating party to seek a protective order or other
confidential treatment for its Proprietary Information subject to such process. In any event, such
party will disclose only that portion of the Proprietary Information legally required to be
disclosed and will use best efforts to assure confidential treatment is accorded any Proprietary
Information so disclosed.




          7. The exclusive points of contact with respect to the transmission and control of Proprietary
Information disclosed hereunder are designated by the respective parties as follows:



Direct Methanol Fuel Cell

Corporation

2400 Lincoln Avenue

Altadena, CA 91001

Attention: Legal Department

Telephone: (626) 296-6310



Each party may change its designee by written notice to the other.




          8. The receiving party agrees to promptly notify the originating party of the loss or
unauthorized use or disclosure of any Proprietary Information. Proprietary Information shall only
be copied or reproduced as is reasonably necessary to permit the receiving party to fulfill the
Purpose set forth above. Upon request of the originating party, the receiving party shall
surrender any part or all of the Proprietary Information to the originating party, except the
receiving party may retain one archival copy of the other party’s Proprietary Information, to be
used only to determine its on-going obligations this Agreement.




          9. Proprietary Information, including all tangible media in which Proprietary Information is
fixed and copies thereof, shall remain the property of the originating party. Neither this
Agreement nor the disclosure of Proprietary Information hereunder shall be construed as granting
any right or license under any invention or patent or other legally recognized intellectual
property right now or hereafter owned or controlled by either party, nor shall any such disclosure
constitute any representation, warranty, assurance, guaranty, or inducement by the originating
party to the receiving party with respect to the infringement of any patent or other rights of
others. No warranty or representation as to the accuracy, completeness or technical or scientific
quality of any Proprietary Information is provided herein. WITHOUT RESTRICTING
 

Page 3 of 5









 







THE FOREGOING, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTIES AS TO THE MERCHANTABILITY,
NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE OF ANY PROPRIETARY INFORMATION DISCLOSED
HEREUNDER.




          10. The originating party recognizes that the receiving party may currently or in the future
be developing information internally, or receiving information from other parties that may be
similar to the originating party’s Proprietary Information. Nothing in this Agreement will
prohibit the receiving party from developing and marketing products or services that compete with
the originating party’s products, provided that in doing so, the receiving party does not use or
disclose the originating party’s Proprietary Information.




          11. Each party shall bear it own costs incurred under or in connection with this Agreement.
Nothing in this Agreement shall be construed as an obligation by either party to enter into a
contract, subcontract, or other business relationship with the other party.




          12. The rights and obligations provided by this Agreement shall take precedence over specific
legends or statements associated with Proprietary Information when received.




          13. This Agreement shall be effective as of the Effective Date, but will be retroactive to the
first date of disclosure of Proprietary Information to the receiving party relating to the Purpose.
The term of this Agreement shall expire two (2) years from the date of the last written disclosure
of Proprietary Information. This Agreement may be earlier terminated by either party upon thirty
(30) days written notice to the other party. Termination or expiration of this Agreement shall not
relieve either party of any obligation to preserve any Proprietary Information received hereunder
in confidence for a period of five (5) years from the date of receipt thereof.




          14. Upon termination or expiration of this Agreement, each party shall cease use of all
Proprietary Information furnished hereunder and shall, upon written direction of the originating
party, return to the originating party, or destroy all such Proprietary Information, together with
all copies made thereof by the receiving party. Upon request, the receiving party shall send the
originating party a destruction certificate.




          15. This Agreement, and the right and obligations hereunder, may not be transferred or
assigned by one party without the prior written consent of the other party except that the parties
may assign this Agreement and its rights and obligations under it, and transfer and Proprietary
Information, in connection with the sale or other disposition of all or substantially all of the
assets of the product line or business unit to which this Agreement relates.




Page 4 of 5









 








          16. The validity, interpretation, and enforcement of this Agreement shall be governed by the
laws of the State of California and that any judicial relief will be sought in either the state or
federal courts found in Los Angeles County, California and the parties expressly consent to
jurisdiction therein.




          17. Each of the parties acknowledges that damages alone will not be an adequate remedy for any
breach or violation of its obligations hereunder and that, in addition to all other remedies to
which the other party may be entitled hereunder or otherwise, such other party shall be entitled to
seek injunctive relief, including specific performance, with respect to said obligations in any
court of competent jurisdiction.




          18. The parties agree not to reverse engineer or attempt to obtain additional knowledge to any
feature or characteristic of either party’s Proprietary Information that is beyond the scope of
this Agreement.




          19. The receiving party will not in any form export, re-export, resell, ship, divert, or cause
to be exported, re-exported, resold, shipped, or diverted, directly or indirectly, any product or
technical data or software of the other party, or the direct product of such technical data or
software, to any country for which the United States Government or any agency thereof requires an
export license or other governmental approval without first obtaining such license or approval.




          20. This is the entire Agreement between the parties concerning the disclosure and use of
Proprietary Information, superseding any prior or contemporaneous written or oral agreements as to
the disclosure and protection of Proprietary Information in connection with the aforesaid purposes
and may not be amended or modified except by subsequent agreement in writing by duly authorized
representatives of the parties.




          IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in duplicate
originals, or in signed fax copies to be followed by duplicate originals, by their duly authorized
representatives.




	 	 	 
	Company

	 	Direct Methanol Fuel Cell Corporation
	 
	 	 
	By:

	 	By:
	 
	 	 
	Name:

	 	Name:
	 
	 	 
	Title:

	 	Title:
	 
	 	 
	Date:

	 	Date:







Page 5 of 5