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EXHIBIT 10.1

LICENSE AGREEMENT

This Agreement is made by and between Temple University — Of The Commonwealth System of Higher
Education (hereinafter referred to as “TEMPLE”), a corporation organized and existing under
the laws of the Commonwealth of Pennsylvania, having a principal place of business at Broad
Street and Montgomery Avenue, Philadelphia, Pennsylvania and Save the World Air, Inc.
(hereinafter referred to as “COMPANY”), a corporation organized and existing under the laws of
the State of Nevada, having a principal place of business at 5125 Lankershim Boulevard, North
Hollywood, California 91601.

WHEREAS, TEMPLE is the owner of the entire right and interest in the United States patent
applications and patents listed in Exhibit A, attached hereto and incorporated herein by
reference, and technical information pertaining to the effect of electrical fields on fuel
droplet size; and

WHEREAS, COMPANY desires to obtain an exclusive worldwide license under patent
applications and patents for the aforementioned intellectual property;

NOW, THEREFORE, in consideration of the premises and of the covenants and obligations
hereinafter set forth, and intending to be legally bound, the parties hereby agree as
follows:

     ARTICLE 1. DEFINITIONS

The following definitions shall apply throughout this Agreement:

1.1. “AFFILIATE” shall mean each and every business entity controlling, controlled by or under
common control with COMPANY for the purposes of manufacture, use or sale of LICENSED
PRODUCT. For purposes of this definition “control” shall mean ownership, directly or
indirectly, of at least fifty percent (50%) of the voting stock.

1.2. “CONFIDENTIAL INFORMATION” shall mean any information disclosed or tangible
property supplied by one party to the other pursuant to this Agreement provided that
information
disclosed in writing shall be deemed CONFIDENTIAL INFORMATION only if marked
“Confidential” and information disclosed orally shall be deemed CONFIDENTIAL
INFORMATION only if reduced to writing and a copy marked “Confidential” is provided to the
receiving party within thirty (30) days of the date of oral disclosure. However, CONFIDENTIAL
INFORMATION shall not include information that: (i) was known to the receiving party prior to
the date of disclosure by the disclosing party or is developed independently of information
received from the disclosing party by those who have not had access to this information; or
(ii) is
lawfully received in good faith at any time by the receiving party from others lawfully in
possession of the same and having the right to disclose the same; or (iii) is, as of the date
of
receipt, in the public domain or subsequently enters the public domain other than by reason of
acts or omissions of the receiving party; or (iv) is required to be disclosed by law, rule of
court or
regulation; or (v) is independently developed by the receiving party, as evidenced by written
records.

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1.3. “EFFECTIVE DATE” shall mean the date this Agreement is signed by the last to sign of
the parties.

1.4. “INVENTOR” shall mean, singly or collectively, Dr. Rongjia Tao and others of TEMPLE.

1.5. “LICENSED PRODUCT” shall mean any product the use, SALE, offer for SALE,
manufacture, or importation of which, if unlicensed, would infringe one or more VALID
CLAIMS of: (i) a patent application within PATENT RIGHTS if such patent application were
issued as a patent or (ii) a patent within PATENT RIGHTS. A product which is a LICENSED
PRODUCT by virtue of its use, offer for SALE, manufacture, or importation under at least one
VALID CLAIM within PATENT RIGHTS shall remain a LICENSED PRODUCT for all
purposes of this Agreement including but not limited to calculation of NET SALES,
notwithstanding such product’s subsequent exportation to another country where its further
disposition is not covered by any VALID CLAIM within PATENT RIGHTS.

1.6. “LICENSEE” shall mean COMPANY and its AFFILIATES.

1.7. “NET SALES” shall mean the gross receipts from the SALE, in any country, of
LICENSED PRODUCT by LICENSEE or by its SUBLICENSEES less deductions for: (i)
transportation and insurance charges; (ii) sales and excise taxes, and any other governmental
charges or duties paid; (ii) normal and customary trade, quantity and cash discounts allowed;
(iii)
sales commissions; and (iv) allowances on account of rejection or return by customers.
However, except where the SUBLICENSEE is the end-user of LICENSED PRODUCT, any
SALE to a SUBLICENSEE shall be excluded from the computation of NET SALES, but any
subsequent SALE by the SUBLICENSEE shall be included in the computation of NET SALES.

1.8. “PATENT RIGHTS” shall mean the patent applications and patents listed in Exhibit A and
any foreign counterparts thereof, or any continuations, continuations-in-part, divisions, re-issues,
additions, renewals or extensions thereof, and any patents issuing therefrom.

1.9. “SALE” shall mean any transaction for which consideration is received for the sale, lease,
license, transfer or other disposition of LICENSED PRODUCT by LICENSEE or by its
SUBLICENSEES.

1.10. “SUBLICENSEE” shall mean a third party which is granted a sublicense under any of the
rights granted by TEMPLE to LICENSEE under this Agreement, including but not limited to any
sublicensee of LICENSEE, any sublicensee of a sublicensee of LICENSEE, and so on.

1.11. “TECHNICAL INFORMATION” shall mean any CONFIDENTIAL INFORMATION of a
technical nature relating to LICENSED PRODUCT, which is in the possession of TEMPLE as of
the EFFECTIVE DATE, and which is necessary or useful to LICENSEE in furtherance of the
development, manufacture or marketing of LICENSED PRODUCT.

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1.12.
“VALID CLAIM” shall mean a claim of a patent application or patent, which claim
has not expired and has not been held unenforceable, unpatentable or invalid by unappealable
decision of a court or other governmental agency of competent jurisdiction.

     ARTICLE 2. CONFIDENTIALITY

2.1. The receiving party shall hold all CONFIDENTIAL INFORMATION in strict confidence
for a period of five (5) years from the disclosure date; not use said CONFIDENTIAL
INFORMATION except as provided in this Agreement; and not disclose, directly or indirectly,
said CONFIDENTIAL INFORMATION to others except with the prior written consent of the
disclosing party. The receiving party shall use at least the same degree of care to maintain
CONFIDENTIAL INFORMATION secret as the receiving party uses in maintaining secret its
own confidential information, but always at least a reasonable degree of care. The receiving party
shall restrict disclosure of CONFIDENTIAL INFORMATION solely to those of its employees
and consultants having a need to know such CONFIDENTIAL INFORMATION in order to
accomplish the purposes of this Agreement. The receiving party shall also advise its employees
and consultants, before they have access to CONFIDENTIAL INFORMATION, of the
obligations of the receiving party under this Agreement, and require such employees and
consultants to maintain those obligations.

2.2. Notwithstanding any of the provisions of Paragraph 2.1, LICENSEE shall be entitled,
without TEMPLE’S prior written approval, to disclose any CONFIDENTIAL INFORMATION
of TEMPLE: (i) to the EPA or any other environmental authority in the world, but only to the
extent required by law or regulation to obtain approval to test or market LICENSED PRODUCT
and (ii) to agents, consultants or independent contractors of LICENSEE for the sole purpose of
assisting LICENSEE in accomplishing the purposes of this Agreement provided that, prior to any
such disclosure, the recipient shall be bound by written confidentiality obligations that are at least
as strict as those of LICENSEE under this Agreement.

2.3. The receiving party shall, upon written request by the disclosing party, promptly return all
written materials or samples of tangible property received hereunder, with the exception that one
copy of said written materials may be retained by the receiving party solely for archival purposes.
In the alternative, the receiving party shall destroy all materials and confirm such destruction in
writing.

2.4. Notwithstanding any other provision of this Agreement, it is recognized by LICENSEE that
TEMPLE, through the INVENTOR, shall have the right to publish or present publicly the results
of any research concerning LICENSED PRODUCT. However, TEMPLE and the INVENTOR
agree to notify LICENSEE in writing of any such proposed publication or presentation thirty
(30)
days before submission. Should LICENSEE, within thirty (30) days of such notification, advise
TEMPLE and the INVENTOR in writing that it wishes to file one or more patent applications
pertaining to information contained in the proposed publication or presentation, TEMPLE shall
delay submission until after LICENSEE has made such filing. LICENSEE may also request
deletion of sensitive information from the proposed publication, and TEMPLE agrees to give
good faith consideration to such a request.

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     ARTICLE 3. GRANT OF LICENSE RIGHTS

3.1. TEMPLE hereby grants to LICENSEE, until the date on which this Agreement is
terminated, a world-wide exclusive license under PATENT RIGHTS and TECHNICAL
INFORMATION, with the right to grant sublicenses, to make, have made, use, sell, offer for
SALE and import LICENSED PRODUCT.

3.2. Notwithstanding the preceding license grant, TEMPLE shall retain rights to make, have
made, use and import LICENSED PRODUCT royalty-free for non-commercial educational and
research purposes only, and shall be free to grant these rights to other non-profit educational and
research institutions.

3.3. The parties acknowledge that inventions in PATENT RIGHTS may have resulted from
United States Government funding, and agree that their rights and obligations under this
Agreement shall be subject to TEMPLE’S obligations to the United States Government, if any,
which arise out of the receipt by TEMPLE of research funding from the United States
Government, in which case LICENSEE agrees that LICENSED PRODUCT sold in the United
States under this Agreement shall be manufactured substantially in the United States.

3.4. LICENSEE shall at all times own all LICENSED PRODUCT as tangible property.

     ARTICLE 4. PAYMENTS

4.1. In consideration of the license granted to LICENSEE under the terms of this Agreement,
LICENSEE shall pay to TEMPLE a quarterly basis commencing on the first day of each March,
June, September and December during the term of this Agreement a royalty on account of NET
SALES in the prior calendar quarter. Royalties shall be payable at the following rates: (i) on the
first $20,000,000 of NET SALES during a calendar year of the term of this Agreement, seven
percent (7%) of NET SALES; (ii) on NET SALES during a calendar year of the term of this
Agreement in excess of $20,000,000 and less than or equal to $40,000,000, six percent (6%) of
NET SALES; (iii),on NET SALES during a calendar year of the term of this Agreement in
excess of $40,000,000, five percent (5%) of NET SALES.

4.2. In further consideration of the license granted to LICENSE under the terms of this
Agreement, LICENSEE shall pay to TEMPLE a non-refundable license fee of one hundred fifty
thousand dollars ($150,000) within thirty (30) days of the EFFECTIVE DATE. In the event that
within thirty (30) days of the EFFECTIVE DATE the parties enter into a written agreement to
further develop LICENSED PRODUCT at TEMPLE under the direction of the INVENTOR,
which agreement (the “R&D Agreement”) pays TEMPLE five hundred thousand dollars
($500,000) for two years, LICENSEE shall be entitled to pay the license fee in three (3)
installments, as follows: (i) forty percent (40%) within thirty (30) days of the EFECTIVE DATE
and (ii) thirty percent (30%) on or before each of the first and second anniversaries of the
EFFECTIVE DATE. However, if either this Agreement or the R&D Agreement is terminated

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before the second anniversary of the EFFECTIVE DATE, the entire unpaid balance of the
license fee is due immediately prior to termination.

4.3 In further consideration of the license granted to LICENSEE under the terms of this
Agreement, LICENSEE shall pay to TEMPLE, on the first day of January, 2008 and annually
thereafter, a non-refundable license maintenance fee of seventy five thousand dollars ($75,000)
regardless of or irrespective of actual NET SALES. The license maintenance fee payment due in
any calendar year pursuant to this Paragraph 4.3 shall be offset and reduced by payments actually
made to TEMPLE in the prior calendar year pursuant to Paragraph 4.1 and Paragraph 4.4.

4.4 In further consideration of the license granted to LICENSEE under the terms of this
Agreement, LICENSEE shall pay to TEMPLE twenty-five percent (25%) of all consideration,
whether in the form of cash or equity, which LICENSEE receives from its SUBLICENSEES to
secure or maintain the sublicense or option thereto, including but not limited to option or
sublicense fees, option or sublicense maintenance fees, milestone payments and minimum
royalties. However, the following types of consideration are excluded from the calculation under
this Paragraph 4.4: (i) research and development funding and (ii) royalties on account of NET
SALES by SUBLICENSEE.

4.5 Royalty payments for sales in each country shall commence with the first unit of each
LICENSED PRODUCT sold by LICENSEE or by its sublicenses in such country and will end
coincident with the expiration date of the last-to-expire issued patent within PATENT RIGHTS
in such country covering such LICENSED PRODUCT.

     ARTICLE 5. DUE DILIGENCE AND REPORTING

5.1. LICENSEE shall use reasonable efforts to advance the development of LICENSED
PRODUCT and to effect its commercialization as soon as practicable, consistent with prevailing
sound business practices relating to the commercialization of similar products; thereafter, during
the term of this Agreement, LICENSEE shall endeavor to keep LICENSED PRODUCT
reasonably available to the public.

5.2. On or before March 31 of each year during the term of this Agreement, LICENSEE shall
provide to TEMPLE a written report detailing LICENSEE’S efforts during the previous year and
plans for the current year, relating to the development, regulatory approval, manufacturing and
marketing of LICENSED PRODUCT.

     ARTICLE 6. STATEMENTS AND REMITTANCES

6.1. LICENSEE shall keep and maintain complete books and records containing an accurate
accounting in sufficient detail of all data required to enable verification of earned royalties and
other payments due hereunder.

6.2. Within sixty (60) days after the end of each calendar quarter, LICENSEE shall remit to
TEMPLE a statement of NET SALES by LICENSEE and by its SUBLICENSEES on account for

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such quarter, which statement shall be accompanied by the payment due to TEMPLE pursuant
to Paragraph 4.1 on account of NET SALES. Payments due to TEMPLE pursuant to Paragraph 4.4 on
account of consideration received by LICENSEE from SUBLICENSEES during any calendar quarter
shall be paid by LICENSEE to TEMPLE within sixty (60) days of the end of such calendar
quarter.

6.3. The financial statements of LICENSEE and of its SUBLICENSEES shall be audited
annually by an independent certified public accountant. TEMPLE shall have the right to employ,
at its own expense, a certified public accountant of its own selection to whom LICENSEE shall
make no unreasonable objection, to examine the books and records of LICENSEE and its
SUBLICENSEES relating to the SALE of LICENSED PRODUCT for the purpose of verifying
the amount of royalty payments due. Such examination of books and records of LICENSEE and
its SUBLICENSEES shall take place during regular business hours during the term of this
Agreement and for two (2) years after its termination, provided however, that such an
examination shall not take place more than once a year and shall not cover records for more than
the preceding three (3) years, and provided that such accountant shall report to TEMPLE only as
to the accuracy of the royalty statements and payments. If such accountant shall find an
underpayment to TEMPLE, presentation of a written statement substantiating the underpayment
shall be provided to LICENSEE. If LICENSEE is not in agreement with the findings of the
accountant selected by TEMPLE, then LICENSEE shall so notify TEMPLE in writing within
thirty (30) days of receipt by LICENSEE of said findings, in which case the parties shall jointly
appoint, within a further period of thirty (30) days, an independent certified public accountant to
validate, at LICENSEE’S expense, TEMPLE’s accountant’s findings, and the decision of said
independent accountant shall be final. If said independent accountant verifies that an
underpayment has occurred, the amount due and interest (accruing at the prevailing Prime Rate
from the date payment was due through the date of actual payment to TEMPLE) shall be paid to
TEMPLE within thirty (30) days. Should such underpayment represent more than five percent
(5%) of the royalties due TEMPLE, LICENSEE shall reimburse TEMPLE for the cost of the
examination by TEMPLE’s accountant that disclosed such underpayment.

6.4. All payments due to TEMPLE under this Agreement shall be made in United States dollars
and shall be sent by LICENSEE to TEMPLE to the attention of “Business Manager” at the
address shown in Paragraph 14.6. If LICENSEE receives NET SALES in currency other than
United States dollars, royalty payments due to TEMPLE on account of NET SALES shall be
converted into United States dollars at the conversion rate for the foreign currency as published
in the eastern edition of The Wall Street Journal as of the last business day of the applicable
calendar quarter. However, TEMPLE shall have the right, upon giving written notice to
LICENSEE, to receive royalty payments on account of NET SALES within a particular country
in the local currency if permitted by law.

6.5. If LICENSEE fails to make any payment due to TEMPLE within the time prescribed by the
terms of this Agreement, a penalty equal to one percent (1%) of the amount due and unpaid on
the first day of each calendar month shall be added to the amount due. However, the provisions
of this Paragraph 6.5 shall not apply to any underpayment of royalties which is uncovered by
audit of the books of LICENSEE or of its SUBLICENSEES pursuant to Paragraph 6.3.

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     ARTICLE 7. REPRESENTATIONS AND WARRANTIES

7.1. TEMPLE represents that it has the right to enter into this Agreement and to make the herein
grant of license under PATENT RIGHTS and TECHNICAL INFORMATION. TEMPLE further
represents that it is the sole and exclusive owner of PATENT RIGHTS and TECHNICAL
INFORMATION, all of which are free and clear of any liens, charges and encumbrances. To the
best of TEMPLE’S knowledge, no third party has expressed to TEMPLE, in writing, that any
patent or patent application included in the PATENT RIGHTS is invalid or unenforceable.

7.2. TEMPLE makes no warranty that exercise by LICENSEE or its SUBLICENSEES of the
rights granted herein will not infringe any patents owned by a third party, or that any patent
application within PATENT RIGHTS will issue as a patent.

7.3. LICENSEE warrants that, prior to the execution of this Agreement, it has not negotiated or
in any manner discussed, whether formally or informally, with any third party any agreement or
other arrangement, including but not limited to research or consulting agreements, which
provides for consideration to be paid in any form, including but not limited to amounts of money
or shares of stock, to any INVENTOR, any INVENTOR’S spouse or other relative, or any entity
in which any of them has a financial interest.

     ARTICLE 8. PATENT PROSECUTION AND LITIGATTON

8.1. In consultation with LICENSEE but in TEMPLE’s sole discretion, TEMPLE shall diligently
prosecute all patent applications and maintain all patents within PATENT RIGHTS, to the extent
permitted by law, in all countries designated in writing by LICENSEE during the term of this
Agreement. Except as provided in Paragraph 8.3, LICENSEE shall be responsible for all
out-of-pocket costs and expenses incurred by TEMPLE, both prior to and during the term of this
Agreement, in the preparation, filing and prosecution of all patent applications, and in the
maintenance of all patents within PATENT RIGHTS. Such costs and expenses shall not be
creditable against any other payments due to TEMPLE under this Agreement.

8.2. LICENSEE shall make all payments due to TEMPLE pursuant to Paragraph 8.1 within
thirty (30) days of receipt of a detailed invoice therefor. TEMPLE, in its sole discretion, may
elect to have its patent counsel submit such invoices directly to LICENSEE, in which case
LICENSEE shall pay TEMPLE’s patent counsel directly.

8.3. LICENSEE may give TEMPLE thirty (30) days’ prior written notice that it will stop paying
the costs and expenses with respect to any patent application or patent in any country, in
which
case TEMPLE, at its option, may assume the obligation of supporting such patent application or
patent in such country, and LICENSEE’s rights and obligations thereto under this Agreement
shall terminate at the end of such notice period in such country.
Termination of LICENSEE’s
rights and obligations with respect to any patent application or patent in any country
pursuant to
this Paragraph 8.3 shall in no way affect the rights and obligations of LICENSEE to the same

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patent application or patent in any other country or to any other patent application or
patent in any country.

8.4. TEMPLE may file patent applications in countries other than those designated by
LICENSEE provided, however, that TEMPLE shall notify LICENSEE in writing of any such
filing within thirty (30) days of the filing date. If within thirty (30) days of its receipt of such
notification LICENSEE fails to inform TEMPLE in writing that it wishes to support such
applications in such countries, TEMPLE shall bear all the costs associated with such additional
patent application filings, and such applications in such countries and any patents granting
therefrom shall not be included within PATENT RIGHTS. TEMPLE shall then be free to license
such patents and patent applications in such countries to others.

8.5. LICENSEE, at its option, may defend any claim, made by others, of infringement of
PATENT RIGHTS resulting from the manufacture, use, sale or other disposition of LICENSED
PRODUCT, whether such claim shall be made against TEMPLE or LICENSEE, and in
defending such claim, LICENSEE shall bear all costs and expenses, including reasonable
attorneys’ fees, incurred in connection with any such claim. Any such costs and expenses shall
be credited against fifty percent (50%) of royalty payments due to TEMPLE on account of NET
SALES of said LICENSED PRODUCT, pursuant to Paragraph 4.1, in each year during the term
of this Agreement until fully offset. Each party to this Agreement agrees that it shall notify the
other party in writing in the event any claim of infringement is made against that party.
LICENSEE shall have full control over the conduct of the defense of any such claim and
TEMPLE shall provide LICENSEE with all reasonable assistance and cooperation, at no cost to
TEMPLE, that LICENSEE may request in any such defense.

8.6. In the event either party becomes aware of any actual or threatened infringement of
PATENT RIGHTS in any country, that party shall promptly notify the other party in writing.
LICENSEE shall have the first right to bring an infringement suit against the infringer and to
use
TEMPLE’s name if legally required in connection therewith. LICENSEE shall not settle or
compromise any such suit in a manner that imposes any obligations or restrictions on TEMPLE
or grants any rights under PATENT RIGHTS or TECHNICAL INFORMATION, without
TEMPLE’s written consent, which consent shall not be unreasonably withheld. If LICENSEE
does not proceed with a particular infringement suit or attempt to sublicense the infringer
within
ninety (90) days of notification, TEMPLE, after notifying LICENSEE in writing, shall be
entitled
to proceed with such suit through counsel of its choice. The party conducting any suit
pursuant
to this Paragraph 8.5 shall have full control over its conduct and shall be responsible for
all
expenses associated therewith. Each party shall always have the right to be represented by
counsel of its choice and at its own expense in any suit instituted by the other party for
infringement. In any event, the parties shall provide each other, at the expense of the party
bringing suit, with all reasonable assistance and cooperation requested in any such suit. At
the
request and expense of the party bringing suit, the other party shall permit access to all
relevant
personnel, records, papers, information, samples, specimens, and the like during regular
business
hours. The parties may also jointly participate in any infringement suit if both parties agree
to do
so in writing in advance, and set forth the basis for sharing of expenses.

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8.7. The amount of any recovery resulting from an infringement suit or settlement
thereof pursuant to Paragraph 8.5 shall first satisfy the costs and expenses, including
reasonable attorneys’ fees, incurred in connection with such suit by the party bringing suit
(“COSTS AND EXPENSES”). If LICENSEE is the party bringing suit, any recovery in excess of
COSTS AND EXPENSES shall be paid to LICENSEE and shall be deemed to be NET SALES subject to
royalties due to TEMPLE pursuant to Paragraph 4.1. If TEMPLE is the party bringing suit, any
recovery in excess of COSTS AND EXPENSES shall be paid to TEMPLE. Tf the parties have agreed
to participate jointly in an infringement suit, any recovery in excess of the parties’ COSTS
AND EXPENSES shall be allocated to the parties in the same proportion as the sharing of COSTS
AND EXPENSES, and LICENSEE’S allocation shall be deemed to be NET SALES subject to royalties
due to TEMPLE pursuant to Paragraph 4.1.

     ARTICLE 9. INDEMNIFICATION

9.1. LICENSEE agrees to indemnify, hold harmless, and defend TEMPLE, its trustees, officers,
employees and agents against any and all claims, excluding claims stemming from TEMPLE’S use
of LICENSED PRODUCT as outlined in Paragraph 3.2, including legal fees and costs arising out
of the exercise of any rights granted under this Agreement, without limiting the generality of
the foregoing, against any damages, losses or liabilities whatsoever including but not limited
to death or injury to person or damage to property arising, directly or indirectly, from
LICENSEE’S exercise of the rights granted hereunder, including but not limited to commercial
sale and clinical use of LICENSED PRODUCT by LICENSEE, its SUBLICENSEES or any customers of
any of them in any manner whatsoever. TEMPLE shall give LICENSEE written notice of any
claim(s) related to LICENSED PRODUCT within thirty (30) days, and TEMPLE shall reasonably
cooperate with LICENSEE and its insurance carrier in the defense of any such claim(s).
TEMPLE agrees to indemnify and hold harmless and defend LICENSEE, its
directors, officers, employees and agents against any and all claims
stemming from the breach of any of the repreesntations, warranties or
undertaking of TEMPLE under this Agreement, including legal fees and
costs arising out of any such breach, without limiting the generality
of the foregoing, against any damages, losses or liabilities
whatsoever including but not limited to death or injury to person or
damage to property arising, directly or indirectly, from any such
breach of TEMPLE’s representations, warranties or undertakings.

9.2. LICENSEE shall maintain, during the period that any LICENSED PRODUCT is made, used,
sold or otherwise made available to others pursuant to this Agreement, Comprehensive Liability
Insurance, including Product Liability Insurance, with a reputable and financially secure
insurance carrier(s) to cover the activities of LICENSEE and its SUBLICENSEES, if any,
contemplated by this Agreement for minimum limits of two million dollars (S2,000,000.00) per
occurrence. Such insurance shall name TEMPLE, its trustees, officers, employees, and agents as
additional insureds. LICENSEE shall furnish a Certificate of Insurance, upon request,
evidencing coverage of two million dollars ($2,000,000.00) with thirty (30) days of written
notice of cancellation or material change to TEMPLE. LICENSEE’S insurance shall be written to
cover claims incurred, discovered, manifested, or made during the term, or after the
expiration, of this Agreement. LICENSEE shall at all times comply, through insurance or
self-insurance, with

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all statutory workers’ compensation and employers’ liability requirements covering any
and all employees with respect to activities performed under this Agreement.

     ARTICLE 10. SUBLICENSES

10.1. LICENSEE shall have the right to enter into sublicense agreements, provided that all
applicable material terms of this Agreement are incorporated into such sublicense agreements
to provide for the protection of TEMPLE and its trustees, officers, employees and agents, and
provided further that LICENSEE remains primarily liable for its obligations under this
Agreement. A copy of any sublicense agreement shall be provided to TEMPLE prior to execution
for TEMPLE’s review and approval, which approval shall not be unreasonably denied.

     ARTICLE 11. ASSIGNMENT

11.1. This Agreement and any and all of the rights and obligations of each party hereunder may
be assigned, delegated, sold, transferred or otherwise disposed of, by operation of law or
otherwise, only with the prior written consent of the other party, which consent shall not be
unreasonably withheld; provided, however, that either party may assign this Agreement without
consent of the other party to a third party that acquires all or substantially all of such
party’s assets or in connection with an assignment by COMPANY to an AFFILIATE.

     ARTICLE 12. TERM AND TERMINATION

12.1. The term of this Agreement shall commence on the EFFECTIVE DATE and shall end,
unless sooner terminated as provided below, upon the expiration of the last-to-expire issued
patent within PATENT RIGHTS.

12.2.
LICENSEE may, in LICENSEE’s sole discretion and for any reason whatsoever, terminate
this Agreement in its entirety or only with respect to any patent application or patent in any
country by giving TEMPLE ninety (90) days’ prior written notification thereof. In addition,
LICENSEE may terminate this Agreement by giving TEMPLE sixty (60) days’ prior written
notice upon material breach by TEMPLE of any material provision of this Agreement, unless
such breach is cured within the period of such notice.

12.3. TEMPLE may terminate this Agreement by giving LICENSEE sixty (60) days’ prior
written notice upon material breach of any material provision of this Agreement by LICENSEE,
unless such breach is cured within the period of such notice.

12.4 In the event that, in any calendar year, TEMPLE has given LICENSEE at least two (2)
written notices pursuant to Paragraph 12.3 each such notice pertaining to a separate instance
of material breach by LICENSEE of the same material provision in
Articles 4, 6 or 8 of this
Agreement, then TEMPLE may, in its sole discretion, give LICENSEE written notice of
termination of this Agreement upon any subsequent instance of material breach by LICENSEE of
said material provision in said calendar year, and the termination shall take effect sixty
(60) days from the date of notice, without regard to whether a cure was effected.

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12.5. This Agreement shall immediately terminate if either party is adjudicated bankrupt,
files a voluntary petition in bankruptcy, makes or executes an assignment for the benefit of creditors, is
liquidated or dissolved, or a receiver, trustee, liquidator, sequestrator or other judicial
representative is appointed for either party or its property. In such event, that party shall execute
any documents that are necessary to reassign or transfer the interest granted hereunder.

12.6. Upon termination of this Agreement, TEMPLE shall have the right to retain any amounts
already paid by LICENSEE under this Agreement, and LICENSEE shall pay to TEMPLE all
amounts accrued which are then due or which become due based on the SALE of LICENSED
PRODUCT, manufactured or produced prior to the effective date of termination.

12.7. The provisions of Article 2 (entitled CONFIDENTIALITY), Article 9 (entitled
INDEMNIFICATION) and Article 13 (entitled PATENT MARKING), and Paragraphs 4.2 and
14.2 shall survive the termination of this Agreement.

     ARTICLE 13. PATENT MARKING

13.1. LICENSEE agrees to mark or have marked all LICENSED PRODUCT sold by LICENSEE or by its
SUBLICENSEES under this Agreement in accordance with the statutes of the United States and
countries and territories relating to the marketing of patented articles in which any LICENSED
PRODUCT covered by a granted patent is marketed.

     ARTICLE 14. MISCELLANEOUS

14.1. Each party and its employees and agents shall not use the other party’s name, any
adaptation thereof, any logotype, trademark, service mark or slogan or the name mark or logotype
in any way without the prior written consent of the other party.

14.2. This Agreement shall be construed and the respective rights of the parties hereto
determined according to the substantive laws of the Commonwealth of Pennsylvania,
notwithstanding the provisions governing conflict of laws under such Pennsylvania law to the
contrary.

14.3. If any provision of this Agreement is held to be invalid or unenforceable under the laws of
any jurisdiction of the parties, all other provisions shall, nevertheless continue in full force and
effect.

14.4. This Agreement constitutes the entire agreement among the parties pertaining to PATENT
RIGHTS and TECHNICAL INFORMATION and supersedes all previous arrangements, except
for confidentiality agreements, whether written or oral. Any amendment or modification to this
Agreement shall be made in writing signed by both parties. Failure of either party to enforce
a right under this Agreement shall not act as a waiver of that right and shall not preclude such
party from later asserting that right relative to the particular situation involved.

Page 11 of 14 pages

 

14.5. Any breach whatsoever of any provision of ARTICLE 4 (entitled PAYMENTS) and
ARTICLE 6 (entitled STATEMENTS AND REMITTANCES) shall be deemed a material
breach of a material provision of this Agreement.

14.6. Time is of the essence under this Agreement.

14.7. Notices and payments to the parties shall be addressed as follows:

	 	 	 	 	 	 	 
	 

	 	To TEMPLE:
	 	Office of Technology Transfer
	 	 
	 

	 	 	 	Temple University (083-45) 	 	 
	 

	 	 	 	1601 N. Broad Street, Room 406	 	 
	 

	 	 	 	Philadelphia, PA 19122-6099	 	 
	 
	 	 	 	 	 	 
	 

	 	To LICENSEE:
	 	Bruce McKinnon, Chief Executive Officer	 	 
	 

	 	 	 	Save the World Air, Inc. 	 	 
	 

	 	 	 	5125 Lankershim Boulevard Los Angeles,	 	 
	 

	 	 	 	California 91601	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	With copies to:	 	 
	 

	 	 	 	Lance Jon Kimmel	 	 
	 

	 	 	 	SEC Law Firm	 	 
	 

	 	 	 	11693 San Vicente Boulevard, Suite 357	 	 
	 

	 	 	 	Los Angeles, CA 90049	 	 

Either party may change its address for notice by giving notice to the other in the manner
herein provided. Any notice required or provided for by the terms of this Agreement shall be
in writing and sent by registered or certified mail, return receipt requested, postage prepaid
and properly addressed in accordance with the paragraph above. The effective date of notice
shall be the actual date of receipt.

All notices, requests, reports, and other communications provided in this Agreement shall be
in writing and shall be deemed to have been made or given: (a) when delivered, if delivered by
hand; (b) when confirmation of transmission received, if sent by facsimile, or the like; (c)
on the day following deposit with an overnight courier; or (d) on the date three business days
following deposit with the United States mail, certified or registered.

Page 12 of 14 pages

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives as of the date first above written.

Temple University — Of The Commonwealth System of Higher Education:

	 	 	 	 	 	 	 	 	 	 	 
	By

	 	
	 	 
	 	DATE
	 	01-23-2007
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Susan J. Karakantas

Interim Treasurer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ATTESTATION:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	
	 	 
	 	DATE
	 	01-23-2007
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: JANET CARRUTH

Title: ASSISTANT SECRETARY	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Save the World Air, Inc.:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Bruce McKinnon	 	 
	 	DATE
	 	02-02-2007	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Bruce McKinnon

Chief Executive Officer	 	 	 	 	 	 	 	 

Page 13 of 14 pages

 

EXHIBIT A

US Provisional Application filed October 31, 2006 entitled “Electric-Field Assisted Fluel
Injection System”

Page 14 of 14 pagesexv10w2

 

EXHIBIT 10.2

LICENSE AGREEMENT

This Agreement is made by and between Temple University — Of The Commonwealth System of Higher
Education (hereinafter referred to as “TEMPLE”), a corporation organized and existing under
the laws of the Commonwealth of Pennsylvania, having a principal place of business at Broad
Street and Montgomery Avenue, Philadelphia, Pennsylvania and Save the World Air, Inc.
(hereinafter referred to as “COMPANY”), a corporation organised and existing under the laws of
the State of Nevada, having a principal place of business at 5125 Lankershim Boulevard, North
Hollywood, California 91601.

WHEREAS, TEMPLE is the owner of the entire right and interest in the United States patent
applications and patents listed in Exhibit A, attached hereto and incorporated herein by
reference, and technical information pertaining to the effect of electrical fields on crude
oil viscosity; and

WHEREAS, COMPANY desires to obtain an exclusive worldwide license under patent
applications and patents for the aforementioned intellectual property;

NOW, THEREFORE, in consideration of the premises and of the covenants and obligations
hereinafter set forth, and intending to be legally bound, the parties hereby agree as
follows:

     ARTICLE 1. DEFINITIONS

The following definitions shall apply throughout this Agreement:

1.1. “AFFILIATE” shall mean each and every business entity controlling, controlled by or under
common control with COMPANY for the purposes of manufacture, use or sale of LICENSED
PRODUCT. For purposes of this definition “control” shall mean ownership, directly or
indirectly, of at least fifty percent (50%) of the voting stock.

1.2. “CONFIDENTIAL INFORMATION” shall mean any information disclosed or tangible
property supplied by one party to the other pursuant to this Agreement provided that
information disclosed in writing shall be deemed CONFIDENTIAL INFORMATION only if marked
“Confidential” and information disclosed orally shall be deemed CONFIDENTIAL
INFORMATION only if reduced to writing and a copy marked “Confidential” is provided to the
receiving party within thirty (30) days of the date of oral disclosure. However, CONFIDENTIAL
INFORMATION shall not include information that: (i) was known to the receiving party prior to
the date of disclosure by the disclosing party or is developed independently of information
received from the disclosing party by those who have not had access to this information; or
(ii) is lawfully received in good faith at any time by the receiving party from others lawfully in
possession of the same and having the right to disclose the same: or (iii) is, as of the date
of receipt, in the public domain or subsequently enters the public domain other than by reason of
acts or omissions of the receiving party; or (iv) is required to be disclosed by law, rule of
court or regulation; or (v) is independently developed by the receiving party, as evidenced by written
records.

Page 1 of 14 pages

 

1.3. “EFFECTIVE DATE” shall mean the date this Agreement is signed by the last to sign of
the parties.

1.4. “INVENTOR” shall mean, singly or collectively, Dr. Rongjia Tao and others of TEMPLE.

1.5. “LICENSED PRODUCT” shall mean any product the use, SALE, offer for SALE,
manufacture, or importation of which, if unlicensed, would infringe one or more VALID
CLAIMS of: (i) a patent application within PATENT RIGHTS if such patent application were
issued as a patent or (ii) a patent within PATENT RIGHTS. A product which is a LICENSED
PRODUCT by virtue of its use, offer for SALE, manufacture, or importation under at least one
VALID CLAIM within PATENT RIGHTS shall remain a LICENSED PRODUCT for all
purposes of this Agreement including but not limited to calculation of NET SALES,
notwithstanding such product’s subsequent exportation to another country where its further
disposition is not covered by any VALID CLAIM within PATENT RIGHTS.

1.6. “LICENSEE” shall mean COMPANY and its AFFILIATES.

1.7. “NET SALES” shall mean the gross receipts from the SALE, in any country, of
LICENSED PRODUCT by LICENSEE or by its SUBLICENSEES less deductions for: (i)
transportation and insurance charges; (ii) sales and excise taxes, and any other governmental
charges or duties paid; (ii) normal and customary trade, quantity and cash discounts allowed;
(iii) sales commissions; and (iv) allowances on account of rejection or return by customers.
However, except where the SUBLICENSEE is the end-user of LICENSED PRODUCT, any
SALE to a SUBLICENSEE shall be excluded from the computation of NET SALES, but any
subsequent SALE by the SUBLICENSEE shall be included in the computation of NET SALES.

1.8. “PATENT RIGHTS” shall mean the patent applications and patents listed in Exhibit A and
any foreign counterparts thereof, or any continuations, continuations-in-part, divisions,
re-issues, additions, renewals or extensions thereof, and any patents issuing therefrom.

1.9. “SALE” shall mean any transaction for which consideration is received for the sale,
lease, license, transfer or other disposition of LICENSED PRODUCT by LICENSEE or by its
SUBLICENSEES.

1.10. “SUBLICENSEE” shall mean a third party which is granted a sublicense under any of the
rights granted by TEMPLE to LICENSEE under this Agreement, including but not limited to any
sublicensee of LICENSEE, any sublicensee of a sublicensee of LICENSEE, and so on.

1.11. “TECHNICAL INFORMATION” shall mean any CONFIDENTIAL INFORMATION of a
technical nature relating to LICENSED PRODUCT, which is in the possession of TEMPLE as of
the EFFECTIVE DATE, and which is necessary or useful to LICENSEE in furtherance of the
development, manufacture or marketing of LICENSED PRODUCT.

Page 2 of 14 pages

 

1.12. “VALID CLAIM” shall mean a claim of a patent application or patent, which claim
has not expired and has not been held unenforceable, unpatentable or invalid by unappealable
decision of a court or other governmental agency of competent jurisdiction.

     ARTICLE 2. CONFIDENTIALITY

2.1. The receiving party shall hold all CONFIDENTIAL INFORMATION in strict confidence
for a period of five (5) years from the disclosure date; not use said CONFIDENTIAL
INFORMATION except as provided in this Agreement; and not disclose, directly or indirectly,
said CONFIDENTIAL INFORMATION to others except with the prior written consent of the
disclosing party. The receiving party shall use at least the same degree of care to maintain
CONFIDENTIAL INFORMATION secret as the receiving party uses in maintaining secret its
own confidential information, but always at least a reasonable degree of care. The receiving
party shall restrict disclosure of CONFIDENTIAL INFORMATION solely to those of its employees
and consultants having a need to know such CONFIDENTIAL INFORMATION in order to
accomplish the purposes of this Agreement. The receiving party shall also advise its employees
and consultants, before they have access to CONFIDENTIAL INFORMATION, of the
obligations of the receiving party under this Agreement, and require such employees and
consultants to maintain those obligations.

2.2. Notwithstanding any of the provisions of Paragraph 2.1, LICENSEE shall be entitled,
without TEMPLE’S prior written approval, to disclose any CONFIDENTIAL INFORMATION
of TEMPLE: (i) to the EPA or any other environmental authority in the world, but only to the
extent required by law or regulation to obtain approval to test or market LICENSED PRODUCT
and (ii) to agents, consultants or independent contractors of LICENSEE for the sole purpose of
assisting LICENSEE in accomplishing the purposes of this Agreement provided that, prior to any
such disclosure, the recipient shall be bound by written confidentiality obligations that are
at least as strict as those of LICENSEE under this Agreement.

2.3. The receiving party shall, upon written request by the disclosing party, promptly return
all written materials or samples of tangible property received hereunder, with the exception that
one copy of said written materials may be retained by the receiving party solely for archival
purposes. In the alternative, the receiving party shall destroy all materials and confirm such
destruction in writing.

2.4. Notwithstanding any other provision of this Agreement, it is recognized by LICENSEE that
TEMPLE, through the INVENTOR, shall have the right to publish or present publicly the results
of any research concerning LICENSED PRODUCT. However, TEMPLE and the INVENTOR
agree to notify LICENSEE in writing of any such proposed publication or presentation thirty
(30) days before submission. Should LICENSEE, within thirty (30) days of such notification, advise
TEMPLE and the INVENTOR in writing that it wishes to file one or more patent applications
pertaining to information contained in the proposed publication or presentation, TEMPLE shall
delay submission until after LICENSEE has made such filing. LICENSEE may also request
deletion of sensitive information from the proposed publication, and TEMPLE agrees to give
good faith consideration to such a request.

Page 3 of 14 pages

 

     ARTICLE 3. GRANT OF LICENSE RIGHTS

3.1. TEMPLE hereby grants to LICENSEE, until the date on which this Agreement is
terminated, a world-wide exclusive license under PATENT RIGHTS and TECHNICAL
INFORMATION, with the right to grant sublicenses, to make, have made, use, sell, offer for
SALE and import LICENSED PRODUCT.

3.2. Notwithstanding the preceding license grant, TEMPLE shall retain rights to make, have
made, use and import LICENSED PRODUCT royalty-free for non-commercial educational and
research purposes only, and shall be free to grant these rights to other non-profit
educational and
research institutions.

3.3. The parties acknowledge that inventions in PATENT RIGHTS may have resulted from
United States Government funding, and agree that their rights and obligations under this
Agreement shall be subject to TEMPLE’S obligations to the United States Government, if any,
which arise out of the receipt by TEMPLE of research funding from the United States
Government, in which case LICENSEE agrees that LICENSED PRODUCT sold in the United
States under this Agreement shall be manufactured substantially in the United States.

3.4.LICENSEE shall at all times own all LICENSED PRODUCT as tangible property.

     ARTICLE 4. PAYMENTS

4.1. In consideration of the license granted to LICENSEE under the terms of this Agreement, LICENSEE shall pay to TEMPLE a quarterly basis commencing on the first day of each March, June, September and December during the term of this Agreement a royalty on account of NET
SALES in the prior calendar quarter. Royalties shall be payable at the following rates: (i) on the first $20,000,000 of NET SALES during a calendar year of the term of this Agreement, seven
percent (7%) of NET SALES; (ii) on NET SALES during a calendar year of the term of this Agreement in excess of $20,000,000 and less than or equal to $40,000,000, six percent (6%) of NET SALES; (iii),on NET SALES during a calendar year of the term of this Agreement in excess of $40,000,000, five percent (5%) of NET SALES.

4.2.In further consideration of the license granted to LICENSE under the terms of this Agreement, LICENSEE shall pay to TEMPLE a non-refundable license fee of one hundred thousand dollars ($100,000) within thirty (30) days of the EFFECTIVE DATE. In the event that
within thirty (30) days of the EFFECTIVE DATE the parties enter into a written agreement to further develop LICENSED PRODUCT at TEMPLE under the direction of the INVENTOR, which agreement (the “R&D Agreement”) pays TEMPLE five hundred thousand dollars ($500,000) for two years, LICENSEE shall be entitled to pay the license fee in three (3)
installments, as follows: (i) forty percent (40%) within thirty (30) days of the EFECTIVE DATE and (ii) thirty percent (30%) on or before each of the first and second anniversaries of the EFFECTIVE DATE. However, if either this Agreement or the R&D Agreement is terminated

Page 4 of 14 pages

 

before the second anniversary of the EFFECTIVE DATE, the entire
unpaid balance of the license fee is due immediately prior to termination.

4.3 In further
consideration of the license granted to LICENSEE under the terms of this
Agreement, LICENSEE shall pay to TEMPLE, on the first day of January, 2008
and annually thereafter, a non-refundable license maintenance fee of seventy
five thousand dollars ($50,000) regardless of or irrespective of actual NET SALES.
The license maintenance fee
payment due in any calendar year pursuant to this Paragraph 4.3 shall be
offset and reduced by payments actually made to TEMPLE in the prior calendar
year pursuant to Paragraph 4.1 and
Paragraph 4.4.

4.4 In further
consideration of the license granted to LICENSEE under the terms of this
Agreement, LICENSEE shall pay to TEMPLE twenty-five percent (25%) of all consideration,
whether in the form of cash or equity, which LICENSEE receives from its
SUBLICENSEES to secure or maintain the sublicense or option thereto,
including but not limited to option or sublicense fees, option or sublicense maintenance
fees, milestone payments and minimum royalties. However, the following types of
consideration are excluded from the calculation under this Paragraph 4.4:
(i) research and development funding and (ii) royalties on account of
NET SALES by SUBLICENSEE.

4.5 Royalty payments for sales in each country shall commence with the first unit of each LICENSED PRODUCT sold by LICENSEE or by its sublicenses in such country and will end coincident with the expiration date of the last-to-cxpirc issued patent within PATENT RIGHTS in such country covering such LICENSED PRODUCT.

     ARTICLE 5. DUE DILIGENCE AND REPORTING

5.1. LICENSEE shall use reasonable efforts to advance the development of LICENSED PRODUCT and to effect its commercialization as soon as practicable, consistent with prevailing sound business practices relating to the commercialization of similar products; thereafter,
during the term of this Agreement, LICENSEE shall endeavor to keep LICENSED PRODUCT reasonably available to the public.

5.2. On or before March 31 of each year during the term of this Agreement, LICENSEE shall provide to TEMPLE a written report detailing LICENSEE’S efforts during the previous year and plans for the current year, relating to the development, regulatory approval, manufacturing
and marketing of LICENSED PRODUCT.

     ARTICLE 6. STATEMENTS AND REMITTANCES

6.1. LICENSEE shall keep and maintain complete books and records containing an accurate accounting in sufficient detail of all data required to enable verification of earned
royalties and other payments due hereunder.

6.2. Within sixty (60) days after the end of each calendar quarter, LICENSEE shall remit to TEMPLE a statement of NET SALES by LICENSEE and by its SUBLICENSEES on account for

Page 5 of 14 pages

 

such quarter, which statement shall be
accompanied by the payment due to TEMPLE pursuant to Paragraph 4.1 on account of
NET SALES. Payments due to TEMPLE pursuant to Paragraph 4.4 on account of consideration
received by LICENSEE from SUBLICENSEES during any calendar quarter
shall be paid by LICENSEE to TEMPLE within sixty (60) days of the end of such calendar quarter.

6.3. The financial statements of LICENSEE and
of its SUBLICENSEES shall be audited annually by an independent certified public accountant. TEMPLE
shall have the right to employ, at its own expense, a certified public accountant of its own selection
to whom LICENSEE shall make no unreasonable objection, to examine the books and records of LICENSEE
and its SUBLICENSEES relating to the SALE of LICENSED PRODUCT for the purpose
of verifying the amount of
 royalty payments due. Such examination of books and records of LICENSEE and its SUBLICENSEES shall take
place during regular business hours during the term of this Agreement and for two (2) years after
 its termination, provided however, that such an examination shall not take place more than once a year
 and shall not cover records for more than the preceding three (3) years, and provided that such
 accountant shall report to TEMPLE only as to the accuracy of the royalty statements and payments. If
 such accountant shall find an underpayment to TEMPLE, presentation of a written statement
substantiating the underpayment shall be provided to LICENSEE. If LICENSEE is not in agreement
with the findings of the accountant selected by TEMPLE, then LICENSEE shall so notify TEMPLE in
writing within thirty (30) days of receipt by LICENSEE of said findings, in which case the
parties shall jointly appoint, within a further period of thirty (30) days, an independent
 certified public accountant to validate, at LICENSEE’S expense,
TEMPLE’s accountant’s findings, and the decision of said independent accountant
shall be final. If said independent accountant verifies that an underpayment has occurred,
the amount due and interest (accruing at the prevailing Prime Rate from the date payment was
due through the date of actual payment to TEMPLE) shall be paid to TEMPLE within
thirty (30) days. Should such underpayment represent more than five percent (5%)
 of the royalties due TEMPLE, LICENSEE shall reimburse TEMPLE for the cost of the examination by TEMPLE’s accountant that
disclosed such underpayment.

6.4. All payments due to TEMPLE under this
Agreement shall be made in United States dollars and shall be sent by LICENSEE to TEMPLE to the
attention of “Business Manager” at the address shown in Paragraph 14.6. If LICENSEE
receives NET SALES in currency other than United States dollars, royalty payments due to TEMPLE
on account of NET SALES shall be converted into United States dollars at the conversion rate
for the foreign currency a
s published in the eastern edition of The Wall Street Journal as of the last business day
of the applicable calendar quarter. However, TEMPLE shall have the right, upon giving written
notice to LICENSEE, to receive royalty payments on account of NET SALES within a particular
country in the local currency if permitted by law.

6.5. If LICENSEE fails to make any
payment due to TEMPLE within the time prescribed by the terms of this Agreement, a penalty
equal to one percent (1%) of the amount due and unpaid on the first day of each calendar month
shall be added to the amount due. However, the provisions of this Paragraph 6.5 shall not
apply to any underpayment of royalties which is uncovered by audit of the books of LICENSEE or
of its SUBLICENSEES pursuant to Paragraph 6.3.

Page 6 of 14 pages

 

     ARTICLE 7. REPRESENTATIONS AND WARRANTIES

7.1. TEMPLE represents that it has the right to enter into this Agreement and to make the herein grant of license under PATENT RIGHTS and TECHNICAL INFORMATION. TEMPLE further represents that it is the sole and exclusive owner of PATENT RIGHTS and TECHNICAL INFORMATION, all of which are free and clear of any liens, charges and encumbrances. To the best of TEMPLE’s knowledge, no third party has expressed to TEMPLE, in writing, that any patent or
 patent application included in the PATENT RIGHTS is invalid or unenforceable.

7.2. TEMPLE makes no warranty that exercise by LICENSEE or its SUBLICENSEES of the rights granted herein will not infringe any patents owned by a third party, or that any patent application within PATENT RIGHTS will issue as a patent.

7.3. LICENSEE warrants that, prior to the execution of this Agreement, it has not negotiated or in any manner discussed, whether formally or informally, with any third party any agreement or other arrangement, including but not limited to research or consulting agreements, which
provides for consideration to be paid in any form, including but not limited to amounts of money or shares of stock, to any INVENTOR, any INVENTOR’S spouse or other relative, or any entity in which any of them has a financial interest.

     ARTICLE 8. PATENT PROSECUTION AND LITIGATION

8.1. In consultation with LICENSEE but in TEMPLE’s sole discretion, TEMPLE shall diligently prosecute all patent applications and maintain all patents within PATENT RIGHTS, to the extent permitted by law, in all countries designated in writing by LICENSEE during the term of this
Agreement. Except as provided in Paragraph 8.3, LICENSEE shall be responsible for all out-of-pocket costs and expenses incurred by TEMPLE, both prior to and during the term of this Agreement, in the preparation, tiling and prosecution of all patent applications, and in the maintenance of all patents within PATENT RIGHTS. Such costs and expenses shall not be creditable against any other payments due to TEMPLE under this Agreement.

8.2. LICENSEE shall make all payments due to TEMPLE pursuant to Paragraph 8.1 within thirty (30) days of receipt of a detailed invoice therefor. TEMPLE, in its sole discretion, may elect to have its patent counsel submit such invoices directly to LICENSEE, in which case
LICENSEE shall pay TEMPLE’s patent counsel directly.

8.3. LICENSEE may give TEMPLE thirty (30) days’ prior written notice that it will stop paying the costs and expenses with respect to any patent application or patent in any country, in which case TEMPLE, at its option, may assume the obligation of supporting such patent application or patent in such country, and LICENSEE’S rights and obligations thereto under this Agreement shall terminate
at the end of such notice period in such country. Termination of LICENSEE’S rights and obligations with respect to any patent application or patent in any country pursuant to this Paragraph 8.3 shall in no way affect the rights and obligations of LICENSEE to the same

Page 7 of 14 pages

 

patent application or patent in any other country or to any other patent application or patent in any country.

8.4. TEMPLE may file patent applications in countries other than those designated by LICENSEE provided, however, that TEMPLE shall notify LICENSEE in writing of any such filing within thirty (30) days of the filing date. If within thirty (30) days of its receipt
of such notification LICENSEE fails to inform TEMPLE in writing that it wishes to support such applications in such countries, TEMPLE shall bear all the costs associated with such
additional patent application filings, and such applications in such countries and any patents granting
therefrom shall not be included within PATENT RIGHTS. TEMPLE shall then be free to license
such patents and patent applications in such countries to others.

8.5. LICENSEE, at its option, may defend any claim, made by others, of infringement of PATENT RIGHTS resulting from the manufacture, use, sale or other disposition of LICENSED PRODUCT, whether such claim shall be made against TEMPLE or LICENSEE, and in defending such claim, LICENSEE shall bear all costs and expenses, including reasonable attorneys’ fees, incurred in connection with any such claim. Any such costs and expenses shall be credited a
gainst fifty percent (50%) of royalty payments due to TEMPLE on account of NET SALES of said LICENSED PRODUCT, pursuant to Paragraph 4.1, in each year during the term
of this Agreement until fully offset. Each party to this Agreement agrees that it shall notify the other party in writing in the event any claim of infringement is made against that party.
LICENSEE shall have full control over the conduct of the defense of any such claim and TEMPLE shall provide LICENSEE with all reasonable assistance and cooperation, at no cost to
TEMPLE, that LICENSEE may request in any such defense.

8.6. In the event either party becomes aware of any actual or threatened infringement of PATENT RIGHTS in any country, that party shall promptly notify the other party in writing. LICENSEE shall have the first right to bring an infringement suit against the infringer and to use TEMPLE’s name if legally required in connection therewith. LICENSEE shall not settle or compromise any such suit in a manner that imposes any obligations or restrictions
 on TEMPLE or grants any rights under PATENT RIGHTS or TECHNICAL INFORMATION, without TEMPLE’s written consent, which consent shall not be unreasonably withheld. If LICENSEE does not proceed with a particular infringement suit or attempt to sublicense the infringer within ninety (90) days of notification, TEMPLE, after notifying LICENSEE in writing, shall be entitled to proceed with such suit through counsel of its choice. The party conducting any suit pursuant to
this Paragraph 8.5 shall have full control over its conduct and shall be responsible for
all expenses associated therewith. Each party shall always have the right to be represented by counsel of its choice and at its own expense in any suit instituted by the other party for infringement. In any event, the parties shall provide each other, at the expense of the party bringing suit, with all reasonable assistance and cooperation requested in any such suit. At the request and expense of the party bringing suit, the other party shall permit access to all
relevant personnel, records, papers, information, samples, specimens, and the like during regular business hours. The parties may also jointly participate in any infringement suit if both parties agree
to do so in writing in advance, and set forth the basis for sharing of expenses.

Page 8 of 14 pages

 

8.7. The amount of any recovery resulting from an infringement suit or settlement thereof pursuant to Paragraph 8.5 shall first satisfy the costs and expenses, including reasonable attorneys’ fees, incurred in connection with such suit by the party bringing suit (“COSTS AND EXPENSES”). If LICENSEE is the party bringing suit, any recovery in excess of COSTS AND EXPENSES shall be paid to LICENSEE and shall be deemed to be NET SALES
 subject to royalties due to TEMPLE pursuant to Paragraph 4.1. If TEMPLE is the party bringing suit, any recovery in excess of COSTS AND EXPENSES shall be paid to TEMPLE. If the parties have agreed to participate jointly in an infringement suit, any recovery in excess of the parties’ COSTS AND EXPENSES shall be allocated to the parties in the same proportion as the sharing of COSTS
AND EXPENSES, and LICENSEE’S allocation shall be deemed to be NET SALES subject to royalties due to TEMPLE pursuant to Paragraph 4.1.

      ARTICLE 9. INDEMNIFICATION

9.1. LICENSEE agrees to indemnify, hold harmless, and defend TEMPLE, its trustees, officers, employees and agents against any and all claims, excluding claims stemming from TEMPLE’s use of LICENSED PRODUCT as outlined in Paragraph 3.2, including legal fees and costs arising
out of the exercise of any rights granted under this Agreement, without limiting the generality of the foregoing, against any damages, losses or liabilities whatsoever including but not limited
to death or injury to person or damage to property arising, directly or indirectly, from LICENSEE’S exercise of the rights granted hereunder, including but not limited to commercial sale and
clinical use of LICENSED PRODUCT by LICENSEE, its SUBLICENSEES or any customers of any of them in any manner whatsoever. TEMPLE shall give LICENSEE written notice of any claim(s) related to LICENSED PRODUCT within thirty (30) days, and TEMPLE shall reasonably cooperate with LICENSEE and its insurance carrier in the defense of any such claim(s).
TEMPLE agrees to indemnify and hold harmless and defend LICENSEE, its directors, officers, employees and agents against any and all claims stemming from the breach of any of the representations, warranties or undertakings of TEMPLE under this Agreement, including legal
fees and costs arising out of any such breach, without limiting the generality of the foregoing, against any damages, losses or liabilities whatsoever including but not limited to death or injury to person or damage to property arising, directly or indirectly, from any such breach of TEMPLE’s representations, warranties or undertakings.

9.2. LICENSEE shall maintain, during the period that any LICENSED PRODUCT is made, used, sold or otherwise made available to others pursuant to this Agreement, Comprehensive Liability Insurance, including Product Liability Insurance, with a reputable and financially
secure insurance carrier(s) to cover the activities of LICENSEE and its SUBLICENSEES, if any, contemplated by this Agreement for minimum limits of two million dollars ($2,000,000.00) per occurrence. Such insurance shall name TEMPLE, its trustees, officers, employees, and agents as
additional insureds. LICENSEE shall furnish a Certificate of Insurance, upon request, evidencing coverage of two million dollars ($2,000,000.00) with thirty (30) days of written
notice of cancellation or material change to TEMPLE. LICENSEE’S insurance shall be written to cover claims incurred, discovered, manifested, or made during the term, or after the
expiration, of this Agreement. LICENSEE shall at all times comply, through insurance or self-insurance, with

Page 9 of 14 pages

 

all statutory workers’ compensation and employers’ liability requirements covering any
and all employees with respect to activities performed under this Agreement.

     ARTICLE 10. SUBLICENSES

10.1. LICENSEE shall have the right to enter into sublicense agreements, provided that all
applicable material terms of this Agreement are incorporated into such sublicense agreements
to provide for the protection of TEMPLE and its trustees, officers, employees and agents, and
provided further that LICENSEE remains primarily liable for its obligations under this
Agreement. A copy of any sublicense agreement shall be provided to TEMPLE prior to execution
for TEMPLE’s review and approval, which approval shall not be unreasonably denied.

     ARTICLE 11. ASSIGNMENT

11.1. This Agreement and any and all of the rights and obligations of each party hereunder may
be assigned, delegated, sold, transferred or otherwise disposed of, by operation of law or
otherwise, only with the prior written consent of the other party, which consent shall not be
unreasonably withheld; provided, however, that either party may assign this
Agreement without consent of the other party to a third party that acquires all or
substantially all of such party’s assets or in connection with an assignment by COMPANY to an
AFFILIATE.

     ARTICLE 12. TERM AND TERMINATION

12.1. The term of this Agreement shall commence on the EFFECTIVE DATE and shall end,
unless sooner terminated as provided below, upon the expiration of the last-to-expire
issued
patent within PATENT RIGHTS.

12.2.
LICENSEE may, in LICENSEE’s sole discretion and for any reason whatsoever, terminate
this Agreement in its entirety or only with respect to any patent application or patent in any
country by giving TEMPLE ninety (90) days’ prior written notification thereof. In addition,
LICENSEE may terminate this Agreement by giving TEMPLE sixty (60) days’ prior written
notice upon material breach by TEMPLE of any material provision of this Agreement, unless
such breach is cured within the period of such notice.

12.3. TEMPLE may terminate this Agreement by giving LICENSEE sixty (60) days’ prior
written notice upon material breach of any material provision of this Agreement by LICENSEE,
unless such breach is cured within the period of such notice.

12.4 In the event that, in any calendar year, TEMPLE has given LICENSEE at least two (2)
written notices pursuant to Paragraph 12.3 each such notice pertaining to a separate instance
of material breach by LICENSEE of the same material provision in Articles 4,6 or 8 of this
Agreement, then TEMPLE may, in its sole discretion, give LICENSEE written notice of
termination of this Agreement upon any subsequent instance of material breach by LICENSEE of
said material provision in said calendar year, and the termination shall take effect sixty
(60) days from the date of notice, without regard to whether a cure was effected..

Page 10 of 14 pages

 

12.5. This Agreement shall immediately terminate if either party is adjudicated bankrupt,
files a
voluntary petition in bankruptcy, makes or executes an assignment for the benefit of
creditors, is
liquidated or dissolved, or a receiver, trustee, liquidator, sequestrator or other judicial
representative is appointed for either party or its property. In such event, that party shall
execute
any documents that are necessary to reassign or transfer the interest granted hereunder.

12.6. Upon termination of this Agreement, TEMPLE shall have the right to retain any amounts
already paid by LICENSEE under this Agreement, and LICENSEE shall pay to TEMPLE all
amounts accrued which are then due or which become due based on the SALE of LICENSED
PRODUCT, manufactured or produced prior to the effective date of termination.

12.7. The provisions of Article 2 (entitled CONFIDENTIALITY), Article 9 (entitled
INDEMNIFICATION) and Article 13 (entitled PATENT MARKING), and Paragraphs 4.2 and
14.2 shall survive the termination of this Agreement.

     ARTICLE 13. PATENT MARKING

13.1. LICENSEE agrees to mark or have marked all LICENSED PRODUCT sold by LICENSEE or by its
SUBLICENSEES under this Agreement in accordance with the statutes of the United States and
countries and territories relating to the marketing of patented articles in which any LICENSED
PRODUCT covered by a granted patent is marketed.

     ARTICLE 14. MISCELLANEOUS

14.1. Each party and its employees and agents shall not use the other party’s name, any
adaptation thereof, any logotype, trademark, service mark or slogan or the name mark or
logotype
in any way without the prior written consent of the other party.

14.2. This Agreement shall be construed and the respective rights of the parties hereto
determined according to the substantive laws of the Commonwealth of Pennsylvania,
notwithstanding the provisions governing conflict of laws under such Pennsylvania law to the
contrary.

14.3. If any provision of this Agreement is held to be invalid or unenforceable under the laws
of
any jurisdiction of the parties, all other provisions shall, nevertheless continue in full
force and
effect.

14.4. This Agreement constitutes the entire agreement among the parties pertaining to PATENT
RIGHTS and TECHNICAL INFORMATION and supersedes all previous arrangements, except
for confidentiality agreements, whether written or oral. Any amendment or modification to this
Agreement shall be made in writing signed by both parties. Failure of either party to enforce
a
right under this Agreement shall not act as a waiver of that right and shall not preclude such
party
from later asserting that right relative to the particular situation involved.

Page 11 of 14 pages

 

14.5. Any breach whatsoever of any provision of ARTICLE 4 (entitled PAYMENTS) and
ARTICLE 6 (entitled STATEMENTS AND REMITTANCES) shall be deemed a material
breach of a material provision of this Agreement.

14.6. Time is of the essence under this Agreement.

14.7. Notices and payments to the parties shall be addressed as follows:

	 	 	 	 	 	 	 
	 

	 	To TEMPLE:
	 	Office of Technology Transfer
	 	 
	 

	 	 	 	Temple University (083-45)	 	 
	 

	 	 	 	 1601 N. Broad Street, Room 406	 	 
	 

	 	 	 	Philadelphia, PA 19122-6099	 	 
	 
	 	 	 	 	 	 
	 

	 	To LICENSEE:
	 	Bruce McKinnon, Chief Executive Officer	 	 
	 

	 	 	 	Save the World Air, Inc. 	 	 
	 

	 	 	 	5125 Lankershim Boulevard 	 	 
	 

	 	 	 	Los Angeles, California 91601	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	With copies to:	 	 
	 

	 	 	 	Lance Jon Kimmel	 	 
	 

	 	 	 	SEC Law Firm	 	 
	 

	 	 	 	11693 San Vicente Boulevard, Suite 357	 	 
	 

	 	 	 	Los Angeles, CA 90049	 	 

Either party may change its address for notice by giving notice to the other in the manner
herein provided. Any notice required or provided for by the terms of this Agreement shall be
in writing and sent by registered or certified mail, return receipt requested, postage prepaid
and properly addressed in accordance with the paragraph above. The effective date of notice
shall be the actual date of receipt.

All notices, requests, reports, and other communications provided in this Agreement shall be
in writing and shall be deemed to have been made or given: (a) when delivered, if delivered by
hand; (b) when confirmation of transmission received, if sent by facsimile, or the like; (c)
on the day following deposit with an overnight courier; or (d) on the date three business days
following deposit with the United States mail, certified or registered.

Page 12 of 14 pages

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives as of the date first above written.

Temple University — Of The Commonwealth System of Higher Education:

	 	 	 	 	 	 	 	 	 	 	 
	By

	 	
	 	 
	 	DATE
	 	01-23-2007
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Susan J. Karakantas

Interim Treasurer	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ATTESTATION:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	
	 	 
	 	DATE
	 	01-23-2007
	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: JANET CARRUTH

Title:  ASSISTANT SECRETARY	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Save the World Air, Inc.:	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Bruce McKinnon	 	 
	 	DATE
	 	02-02-2007	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Bruce McKinnon

Chief Executive Officer	 	 	 	 	 	 	 	 

Page 13 of 14 pages

 

EXHIBIT A

PCT Application PCT/US2005/04498 filed December 13, 2005, designating all member states
(including the US) entitled “Method for Reduction of Crude Oil Viscosity”

Page 14 of 14 pages

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]