Document:

exv10w20

 

Exhibit 10.20

SOFTWARE LICENSE AGREEMENT

This software license agreement (“Agreement”) is effective as of the 15th day of March, 2006
(“Effective Date”) between VIASPACE Inc. a Nevada corporation located at 2400 Lincoln Avenue,
Altadena, CA 91001 (hereinafter called “Licensee”) and the California Institute of Technology, a
not-for-profit California corporation, located at 1200 E. California Blvd., Pasadena, CA 91125
(“Caltech”) through its operating division, the Jet Propulsion Laboratory (“JPL”). All rights not
specifically granted in this Agreement are reserved to Caltech.

ARTICLE 1

DEFINITIONS

The following words, phrases, or terms in this Agreement shall have the following meanings:

1.1 “SHINE” means Executable Code and Source Code pertaining to Spacecraft Health Inference Engine
(SHINE) and associated programs and tools including: SHINE Development Environment software, SHINE
Delivery Environment (including, inter alia, SHINE cross-compiler) software.

1.2 “Executable Code” means computer software programs, not readily perceivable by humans, and
suitable for machine execution without the intervening steps of interpretation or compilation.

1.3 “Source Code” means computer software programs not in machine-readable format and not suitable
for machine execution without the intervening steps of interpretation or compilation.

1.4 “Software” means copyright rights, as defined by United States copyright laws and applicable
international treaties and/or conventions, as well as any other legally recognized intellectual
property rights to the suite of programs, scripts, and manuals owned Caltech that constitute SHINE.

1.5. “Derivative Works” means any work consisting of revisions, annotations, elaborations, or other
modifications to Software made by Licensee which, as a whole, represent an original work of
authorship. Derivative Works includes any updates and new releases developed by Licensee during the
term of this license, inclusive of backups, updates, or merged copies permitted hereunder including
the file structures, programming instructions, user interfaces and screen formats and sequences.

1.6 “Licensed Product” means any product, device, service, which comprises, incorporates, is made
by, is enabled by, is designed by, or uses the Software.

1.7 “Sublicense” shall mean, with respect to a particular Licensed Product, an agreement with a
third party to whom Licensee has granted a right under this Agreement to make, have made, import,
have imported, use, have used, sell, have sold, offer for sale, have offered for sale, sublicense,
import, have imported and otherwise exploit Licensed Products.

1.8 “Net Revenue” shall mean revenue attributable to the use of the Software including, but not
limited to, any sale, license, lease, service, maintenance, upgrade or support activities
(including the provision of technical assistance to a sublicense directly related to and
attributable to the Software), or distribution less Deductible Expenses. For a Licensed Product
that incorporates Software with substantially no modifications or other components, the
attributable revenue shall comprise the gross revenue. For a Licensed Product that is a component
of a larger more complex system, the attributable revenue shall comprise a pro rata portion of
the gross revenue based on the relative contribution provided by the Licensed Product as
compared to the other components and shall specifically exclude revenue attributable to the other
components.

 

 

 

1.9 “Deductible Expenses” means the following items incurred in connection with sales of Licensed
Products to the extent actually paid by Licensee and included in accordance with recognized
principles of accounting in the gross sales price billed: (i) sales, use or turnover taxes; (ii)
excise value added or other taxes, custom duties or consular fees; (iii) transportation, freight,
and handling charges, and insurance on shipments to customers; (iv) trade, cash or quantity
discounts or rebates to the extent actually granted; (v) agent fees or commissions; (vi) rebates,
refunds, and credits for any rejected or returned Software or because of retroactive price
reductions, rebates or chargebacks; and (vii) uncollected accounts receivable attributable to sales
of Software.

1.10 “Related Company” means any corporation, Limited Liability Company or other legal entity
directly or indirectly controlled by Licensee or its successors or assigns, or any successor or
assign of such an entity. For the purpose of this Agreement, “control” shall mean the direct or
indirect ownership of at least fifty percent (50%) of the outstanding shares or other voting rights
of the subject entity to elect directors, or if not meeting the preceding, any entity owned or
controlled by or owning or controlling at the maximum control or ownership right permitted in the
country where such entity exists.

1.11 “Field” means applications relating to, explosives detection, detection of weapons of mass
destruction, environmental monitoring and control, automotive and transportation, power and gas
management, water management, asset and personnel tracking, financial, business intelligence,
supply chain management, gaming, interactive radio and television, video and audio processing,
maritime security, building and structure security and management (including security access, HVAC,
control systems), inference and sensor data fusion products for emergency response applications,
and Artificial Intelligence software development environments.

1.12 “Related Materials” means any materials owned by Caltech useful for understanding and
implementing the Software.

ARTICLE 2

CONFIDENTIALITY

2.1 Except as expressly provided herein, each party agrees not to disclose any terms of this
Agreement to any third party without the consent of the other party; provided, however, that
disclosures may be made as required by securities laws or other applicable laws, or to actual or
prospective investors or corporate partners, or to a party’s accountants, attorneys, and or other
professional advisors, and additionally to any potential Sublicensees.

ARTICLE 3

COPYRIGHT MARKING

3.1 Licensee will mark, in at least one conspicuous location in a Licensed Product, a notice that
the Software and Related Materials are owned by Caltech. All marking should include: © [2004]
California Institute of Technology, Pasadena, California. ALL RIGHTS RESERVED. Based on Government
Sponsored Research NAS7-03001.

 

 

 

ARTICLE 4

GRANT OF LICENSE

4.1 Caltech hereby grants to Licensee and Related Companies (i) an exclusive license to Software,
with the right to sublicense (in the form of a Sublicense), to make, have made, import, have
imported, use, have used, sell, have sold, offer for sale, have offered for sale, import, have
imported and otherwise exploit Licensed Products throughout the world in the Field; and (ii) a
non-exclusive
nontransferable license to Software, with the right to sublicense (in the form of a Sublicense), to
make, have made, import, have imported, use, have used, sell, have sold, offer for sale, have
offered for sale, import, have imported and otherwise exploit Licensed Products throughout the
world in all areas other than the Field. Caltech also hereby grants to Licensee and Related
Companies a nonexclusive throughout the world, with the right to sublicense (in the form of a
Sublicense), to Related Materials to make, have made, import, have imported, use, have used, sell,
have sold, offer for sale, have offered for sale, import, have imported and otherwise exploit
Licensed Products. For the avoidance of doubt, the rights granted under this Section 4.1 are
subject to existing nonexclusive licenses previously granted to Arroyo Sciences, Inc.,
ViaChange.com, Inc., ViaLogy Corp., and Smiths Detection.

4.2 Caltech retains ownership of any copyright rights to the Software (as defined above), licensed
under this Agreement.

4.3 Licensee agrees to grant Caltech a fully paid-up, royalty-free nonexclusive, license for
educational and research purposes to any Derivative Works of Software in executable form that are
owned in whole or in part by Licensee and that are made available to customers of Licensee.

4.4 This Agreement is not assignable by Licensee to any party without the express written consent
of Caltech, provided, however, that Licensee may assign this Agreement to a third party that
acquires substantially all of Licensee’s assets relating to this Agreement. In addition, Licensee
may assign this Agreement to a third party by (i) providing Caltech thirty (30) days prior written
notice of the assignment, including the new assignee’s contact information; (ii) the new assignee
agreeing in writing to Caltech to be bound by this Agreement; and (iii) providing Caltech with the
lesser of one hundred thousand dollars ($100,000) or thirty-percent (30%) of the consideration
received by Licensee for such assignment. Upon a permitted assignment of this Agreement pursuant to
this Section, Licensee will be released of liability under this Agreement and the term “Licensee”
in this Agreement will mean the assignee.

4.5 Upon request of Licensee, Caltech shall provide a written statement to Licensee to furnish to
potential sublicensees describing the rights granted to Licensee hereunder.

ARTICLES

USES NOT PERMITTED

5.1 Licensee may not remove or obscure any copyright or trademark notices.

5.2 The Software shall not become subject to application for patent or copyright by Licensee. For
the avoidance of doubt, any Derivative Works shall be owned by Licensee and/or its Sublicenses and
such entities may obtain patent or copyright protection for any Derivate Works.

5.3 Licensee and its sublicensees may each install a reasonable number of copies of Software and
shall use best efforts to minimize the number of copies installed in order to prevent the
unauthorized access or transfer of Software. Licensee may not install any copies of Software on
computers that are not owned or leased by Licensee, its customers, sublicensees, or Related
Companies.

ARTICLE 6

ROYALTIES

6.1 Licensee agrees to pay to Caltech, on a quarterly basis, two percent (2.0%) of the Net Revenues
(including any equity consideration received by Licensee).

 

 

 

6.2 Licensee shall pay Caltech thirty percent (30%) of the Net Revenues that Licensee receives from
Sublicenses (including any equity consideration received by Licensee). Such Net Revenues
specifically shall not include payments made by a sublicensee in consideration of: (a) equity or
debt securities of Licensee; (b) to support research or development activities to be undertaken by
Licensee; (c) upon the achievement by Licensee of specified milestones or benchmarks relating to
the development of Licensed Products; (d) pilot studies;; (e) the license or sublicense of any
intellectual property other than the Software; (I) products other than Licensed
Products; or (g) reimbursement for patent or other expenses. Any non-cash consideration that is
received by Licensee for the sublicensing or use of the Software will be converted to a cash value
based on fair market value or a value mutually agreed upon. Only in the case of non-cash
consideration received by Licensee for sublicensing or use of the Software, Licensee may pay the
royalties provided in Article 6 with equity interests.

6.3 A minimum annual royalty of twenty five thousand dollars ($25,000.00) is due Caltech on
February I, 2008 and every year thereafter upon written invoice by Caltech. Any royalties paid
under Sections 6.1 and 6.2 for the one-year period preceding the date of payment of the minimum
annual royalty shall be creditable against the annual minimum.

6.4 If Licensee or a Related Company is required to make any payment (including, but not limited
to, royalties or other license fees) to one or more third parties to obtain a patent license in the
absence of which it could not legally make, import, use, sell, or offer for sale
Licensed Products in any country, and Licensee provides Caltech with reasonably satisfactory
evidence of such third-party payments, such third party payments shall be fully creditable against
royalties owed to Caltech hereunder, provided that in no one year shall the aggregate of all such
expenses be credited against more than twenty-five percent (25%) of royalty payments to Caltech.
Any greater amount of such expenses may be carried over and credited against royalties owed in
future years, subject in every case to the 25% annual cap for that year.

6.5 For the purpose of determining royalties payable under this Agreement, any royalties or other
revenues Licensee receives from sublicensees in currencies other than U.S. dollars and any Net
Revenues denominated in currencies other than U.S. dollars shall be converted into U.S. dollars
according to the noon buying rate of the Federal Reserve Bank of New York on the last business day
of the quarterly period for which such royalties are calculated.

6.6 Licensee shall keep complete and accurate production and accounting records relating to
commercialization (including via sublicensing) of Licensed Products. Caltech shall be entitled to
have an independent CPA periodically audit such records, during Licensee’s normal business hours,
to determine Licensee’s compliance with the provisions of this Article 5. Licensee shall reimburse
Caltech 100% of any unpaid royalties resulting from any noncompliance discovered as a result of any
such audit; and Licensee shall also pay Caltech an additional 25% of the entire amount of any
underpayment exceeding 10% of the corresponding amount previously paid. Such audits shall be at
Caltech’s expense, and shall occur no more than once annually, except that in the case of any
underpayment exceeding 10% of the amount actually paid: (a) Licensee shall reimburse Caltech for
the cost of such audit; and (b) Caltech shall be entitled to conduct additional quarterly audits,
at Licensee’s expense, until any such audit demonstrates that Licensee is in compliance with its
obligations.

6.7 For so long as royalties are payable under this Agreement, Licensee shall, at the written
request of Caltech, report in writing to Caltech on or before April 30th, July 31st, October 31st,
and January 31st, Net Revenues and the number of units of Licensed Products sold during the
preceding calendar quarter by Licensee, and the royalties or other revenues Licensee received from
sublicensees during the preceding calendar quarter for the sale of Licensed Products. Each such
report shall also set forth an explanation of the calculation of the royalties payable hereunder
and be accompanied by payment of the royalties shown by said report to be due Caltech.

 

 

 

ARTICLE 7

DUE DILIGENCE

7.1 Licensee shall have discretion over the commercialization of Licensed Products. However,
Licensee agrees to use commercially reasonable efforts to introduce commercial Licensed Product(s)
in the United States as soon as practical, consistent with sound and reasonable business practices
and judgments. Licensee shall be deemed to have satisfied its obligations under this Paragraph if
Licensee has an ongoing and active research program or marketing program, as appropriate, directed
toward production and use of one or more Licensed Products. Any efforts of Licensee’s sublicensees
(pursuant to a Sublicense) shall be considered efforts of Licensee for the sole purpose of
determining Licensee’s compliance with its obligation under this Paragraph.

7.2 After the First Year from the Effective Date, Caltech shall have the right, no
more often than twice each year, to require Licensee to report to Caltech in writing on its
progress in introducing commercial Licensed Product(s) throughout the world.

ARTICLE 8

TERM

8.1 This Agreement shall commence on the Effective Date and continue for a period often
(10) years (“Term”), unless otherwise extended by the mutual agreement of the parties in writing,
or unless earlier terminated by Licensee with thirty (30) days advanced written notice to Caltech.
Upon any such termination, (i) Licensee and its affiliates shall have six (6) months to complete
any pending licensing or sublicensing negotiations and/or to complete the manufacture of any
Licensed Products that are work in progress and to sell their inventory, provided Licensee pays the
applicable royalties in accordance with paragraph 6.1; and (ii) Caltech shall accept an assignment
by Licensee of any Sublicenses granted by Licensee, and any Sublicense so assigned shall remain in
full force and effect. Notwithstanding the preceding sentence, Licensee shall be entitled to extend
the term of this Agreement for an additional five (5) year period and subject to the terms and
conditions herein, provided, however, that Licensee provides Caltech with ninety (90) days advanced
written notice prior to the expiration of the first ten (10) year period. At the end of the Term,
Licensee shall return all copies of Software or certify their destruction.

ARTICLE 9

TERMINATION

9.1 If either party materially breaches this Agreement, the other party may elect to
give the breaching party written notice describing the alleged breach. If the breaching
party has not cured such breach within sixty (60) days after receipt of such notice, the notifying
party will be entitled, in addition to any other rights it may have under this Agreement, to
terminate this Agreement effective immediately.

9.2 Licensee shall have the right to terminate this Agreement either in its entirety or
as to any jurisdiction or any part of the Software upon sixty (60) days written notice.

9.3 Termination of this Agreement for any reason shall not release any party hereto from any
liability which, at the time of such termination, has already accrued to the other party or which
is attributable to a period prior to such termination, nor preclude either party from pursing any
rights and remedies it may have hereunder or at law or in equity which accrued or are based upon
any event occurring prior to such termination.

 

 

 

ARTICLE 10

EQUITY GRANT; RELATIONSHIP OF THE PARTIES

10.1 Licensee agrees to irrevocably issue to Caltech, in partial consideration of Licensee’s
receipt of the licenses granted under this Agreement, one hundred thousand (100,000) shares of
common stock of Licensee pursuant to a mutually acceptable stock purchase agreement between
Licensee and Caltech.

10.2 Caltech and Licensee are independent parties in this Agreement. Accordingly, there is no
agency, joint venture or partnership relationship between Caltech and Licensee under this
Agreement.

ARTICLE 11

PRODUCT LIABILITY

11.1 Indemnification: Licensee agrees that Caltech (including its trustees, officers, faculty and
employees) shall have no liability to Licensee its affiliates, their customers or any third party,
for claims, demands, losses, costs, or other damages, which may result from personal injury, death,
or property damage related to the Licensed Products (“Product Liability Claims”). Licensee agrees
to defend, indemnify, and hold harmless Caltech, its trustees, officers, agents, faculty and
employees from any such Product Liability Claims, provided that: (a) Licensee is notified promptly
of any Product Liability Claims, (b) Licensee has the sole right to control and defend or settle
any litigation within the scope of this indemnity, and (c) all indemnified parties cooperate to the
extent necessary in the defense of any Product Liability Claims.

ARTICLE 12

DISCLAIMER

12.1 THE SOFTWARE IS EXPERIMENTAL IN NATURE AND IS BEING LICENSED “AS IS.“THE LICENSE OF THE
SOFTWARE DOES NOT INCLUDE ANY TECHNICAL SUPPORT. CALTECH MAKES NO WARRANTIES, REPRESENTATION OR
UNDERTAKING WITH RESPECTTO THE UTILITY, EFFICACY, SAFETY, OR APPROPRIATENESS OF USING THE SOFTWARE.
CALTECH REPRESENTS AND WARRANTS THAT IT HAS THE RIGHT TO LICENSE THE SOFTWARE TO LICENSEE AND THAT
SOFTWARE IS PROTECTED BY UNITED STATES COPYRIGHT LAWS AND APPLICABLE INTERNATIONAL TREATIES AND/OR
CONVENTIONS.

THE SOFTWARE ARE PROVIDED “AS-IS” WITHOUT WARRANTY OF ANY KIND INCLUDING ANY WARRANTIES OF
PERFORMANCE OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE (as set forth in UCC
§§232l2-2313) OR FOR ANY PURPOSE WHATSOEVER, FOR THE LICENSED PRODUCT, HOWEVER USED.

IN NO EVENT SHALL CALTECH BE LIABLE FOR ANY DAMAGES AND/OR COSTS, INCLUDING BUT NOT LIMITED TO
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY
AND LOST PROFITS, REGARDLESS OF WHETHER CALTECH SHALL BE ADVISED, HAVE REASON TO KNOW, OR IN FACT
SHALL KNOW OF THE POSSIBILITY.

LICENSEE BEARS ALL RISK RELATING TO QUALITY AND PERFORMANCE OF THE SOFTWARE.

CALTECH SHALL NOT BE LIABLE FOR ANY USE OF THE SOFTWARE OR RELATED KNOWHOW, AND LICENSEE HEREBY
AGREES TO DEFEND, INDEMNIFY AND HOLD CALTECH AND ITS EMPLOYES HARMLESS FROM ANY LOSS, CLAIM, DAMAGE
OR LIABILITY, OR WHATEVER KIND OF NATURE, WHICH MAY ARISE FROM THE AGREEMENT, OR THE USE BY
LICENSEE OF THE SOFTWARE OR RELATED KNOW-HOW HEREUNDER.

 

 

 

ARTICLE 13

MISCELLANEOUS

13.1 Licensee agrees that it shall not use the name of Caltech, California Institute of Technology,
Jet Propulsion Laboratory, or JPL in any advertising or publicity material, or make any form of
representation or statement which would constitute an express or implied endorsement by Caltech of
any Licensed Product, and that it shall not authorize others to do so, without first having
obtained written approval from Caltech, except as may be required by governmental law, rule or
regulation. Notwithstanding the foregoing, Licensee shall be entitled to announce or otherwise
release factually accurate information describing this Agreement with the prior written approval of
Caltech, such approval not to be unreasonably withheld.

13.2 This Agreement shall be binding upon and inure to the benefit of any successor or assignee of
Caltech and Licensee.

13.3 Any notice or communication required or made under this Agreement shall be addressed as
follows:

	 	 	 	 	 
	 

	 	CALTECH:
	 	Director, Office of Technology Transfer
	 

	 	 	 	California Institute of Technology
	 

	 	 	 	1200 East California Boulevard (MC 210-85)
	 

	 	 	 	Pasadena, CA 91125
	 

	 	 	 	Fax No.: (626) 356-2486 
	 
	 	 	 	 
	 

	 	LICENSEE:
	 	VIASPACE Inc.
	 

	 	 	 	Attn: CEO
	 

	 	 	 	2400 Lincoln Avenue
	 

	 	 	 	Altadena, CA 91001 
	 

	 	 	 	Fax No.: (626) 296-6311

Either party may notify the other in writing of a change of address or fax number, in which event
any subsequent communication relative to this Agreement shall be sent to the last said notified
address or number, provided, however, that the parties shall deliver all material notices under
this Agreement by registered mail or overnight delivery service. All notices and communications
relating to this Agreement shall be deemed to have been given when received.

13.4 In the event that any provisions of this Agreement are determined to be invalid or
unenforceable by a court of competent jurisdiction, the remainder of the Agreement shall remain in
full force and effect without said provision. The parties shall in good faith negotiate a
substitute clause for any provision declared invalid or unenforceable, which shall most nearly
approximate the intent of the parties in entering this Agreement.

13.5 This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument.

13.6 The headings of the several Paragraphs are inserted for convenience of reference only and are
not intended to be a part of or to affect the meaning or interpretation ofthis Agreement.

13.7 Whenever provision is made in this Agreement for either party to secure the consent or
approval of the other, that consent or approval shall not unreasonably be withheld or delayed, and
whenever in this Agreement provisions are made for one party to object to or disapprove a matter,
such objection or disapproval shall not unreasonably be exercised.

 

 

 

ARTICLE 14

FORCE MAJEURE

14. Neither party shall lose any rights hereunder or be liable to the other party for damages or
losses (except for payment obligations) on account of failure of performance by the defaulting
party if the failure is occasioned by war, strike, fire, Act of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure of suppliers, or any other reason
where failure to perform is beyond the reasonable control and not caused by the negligence or
intentional conduct or misconduct of the nonperfornring party, and such party has exerted all
reasonable efforts to avoid or remedy such force majeure; provided, however, that in no event shall
a party be required to settle any labor dispute or disturbance.

ARTICLE 15

EXPORT REGULATION

15.1 If at any time after Licensee has received the Software and has reason to transfer the
Software or Licensed Product incorporating the Software to its subsidiary, associated or related
company, either within or outside of the United States, Licensee shall immediately notify Caltech
of such fact before executing the delivery. When exporting Caltech Software or Licensed Product
incorporating such Software to a foreign entity, Licensee shall comply with all federal export laws
and statutes. In the event an export license is required to execute the transfer,
Licensee shall apply and obtain approval for such license through the appropriate U.S. government
agency. Warning: An unsecured internet transfer (ftp) is an export for purposes of this Agreement,
even if the destination address is a domestic site.

ARTICLE 16

SUPPORT, MAINTENANCE AND UPGRADES

16.1 Caltech shall use best efforts to transfer the Software and Related Materials to Licensee
after the Effective Date. In addition, Caltech shall provide updated versions ofthe
Software as they become available or after any significant modifications or enhancements have been
made for a period no less than two (2) years after the Effective Date.

ARTICLE 17

MISCELLANEOUS

17.1 If any provision(s) of this Agreement shall be held to be invalid, illegal, or unenforceable
by a court or other tribunal of competent jurisdiction, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby.

17.2 No failure or delay by Caltech in enforcing any right or remedy under this Agreement shall
beconstrued as a waiver of any future or other exercise of such right or remedy by Caltech.

17.3 Licensee agrees to pay any and all taxes (if applicable) on any amounts of royalties and/or
fees paid by Licensee to Caltech hereunder.

17.4 This Agreement, entered into in the County of Los Angeles, shall be construed and enforced in
accordance with and be governed by the laws of the State of California without reference to
conflict of laws principles. The parties hereby consent to the exclusive personal jurisdiction and
venue of the courts within the State of California.

17.5 This Agreement constitutes the sole and entire agreement of the parties as to the matter set
forth herein and supersedes any previous agreements, understandings, and arrangements, whether oral
or written, between the parties relating hereto. No waiver of or change in any of the terms hereof
subsequent to the execution hereof claimed to have been made by any representative of either party
shall have any force or effect unless in writing, signed by duly authorized representatives of the
parties.

 

 

 

SIGNATURES

IN WITNESS WHEREOF, the parties hereto have executed this Agreement to he effective,
valid, and binding upon the parties as of the date below as executed by their duly authorized
representatives.

	 	 	 	 	 	 	 	 	 
	VIASPACE Inc.	 	 	 	California Institute of Technology
	(Licensee)	 	 	 	(CALTECH)
	 
	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 	 	 
	Authorized Signature	 	 	 	Authorized Signature
	Printed Name: Carl Kukkonen	 	 	 	Printed Name: Lawrence Gillbert
	Title: CEO	 	 	 	Title: SR DR Tech Transfer
	Date: 3/16/06	 	 	 	Date: 3/14/06exv10w23

 

Exhibit 10.23

LICENSE AGREEMENT

THIS AGREEMENT is effective as of the 9th day of May 2006 (the “Effective Date”), between
CALIFORNIA INSTITUTE OF TECHNOLOGY, 1200 East California Boulevard, Pasadena, CA 91125 (“Caltech”)
and DMFCC (“Licensee”), a corporation having a place of business at 171 N. Altadena Drive,
Pasadena, CA 91107.

WHEREAS, Licensee is desirous of obtaining, and Caltech wishes to grant to Licensee, an
exclusive license to certain Exclusively Licensed Patent Rights, and a nonexclusive license under
the Technology, all relating to the aforementioned research and as further defined below; and

WHEREAS, Licensee is hereby exercising its option dated January 17, 2003 and amendments
thereto and has obtained equity financing in an amount greater than two million dollars
($2,000,000.00) upon said exercise;

Now, THEREFORE, the parties agree as follows:

ARTICLE I

DEFINITIONS

1.1 “Affiliate” means any corporation, limited liability company or other legal
entity which directly or indirectly controls, is controlled by, or is under common control with
Licensee as of the Effective Date of this Agreement. For the purpose of this Agreement, “control”
shall mean the direct or indirect ownership of greater than or equal to 50 percent (50%) of the
outstanding shares on a fully diluted basis or other voting rights of the subject entity to elect
directors, or if not meeting the preceding, any entity owned or controlled by or owning or
controlling at the maximum control or ownership right permitted in the country where such entity
exists. In addition, a party’s status as an Affiliate of License shall terminate if and when such
control ceases to exist.

 

1

 

1.2 “Exclusively Licensed Patent Rights” means (a) all patents and patent applications
listed in Exhibit A attached hereto; (b) any patents issuing there from; and (c) any patents or
patent applications claiming a right of priority thereto (including reissues,
reexaminations, renewals, extensions, divisionals, continuations, continued prosecution
applications, continuations-in-part and foreign counterparts of any of the foregoing).

1.3 “Technology” means any technology existing as of the Effective Date, including all
proprietary information, know-how, procedures, methods, prototypes, and designs, which is requested
by Licensee and consented to by Caltech, and which is (a) specifically listed in Exhibit B, or (b)
which is disclosed in the patent applications and patents listed in Exhibit A. Such Technology must
not be covered by any claim of a patent application or patent owned or controlled by Caltech.

1.4 “Caltech Technology” means the Exclusively Licensed Patent Rights, and the
Technology.

1.5 “Deductible Expenses” means the following expenses incurred in connection with
sales or licensing of Licensed Products to the extent actually paid by Licensee or an Affiliate in
accordance with generally recognized principles of accounting: (a) sales, use or turnover taxes;
(b) excise, value added or other, taxes or custom duties; (c) transportation, freight, and handling
charges, and insurance on shipments to customers; (d) trade, cash or quantity discounts or rebates
to the extent actually granted; (e) agent fees or commissions; and (1) rebates, refunds, and
credits for any rejected or returned Licensed Products or because of retroactive price reductions,
or rebates.

1.6 “Effective Date” has the meaning set forth in the preamble.

1.7 “Field” means fuel cells and related components.

1.8 “Licensed Product” means any product, device, system, article of manufacture,
composition of matter, or process or service in the Field that is covered by, or is made by a
process covered by, any Valid Claim.

 

2

 

1.9  “Net Revenues” means all amounts, less Deductible Expenses, received by Licensee
and/or its Affiliates from the sale or other distribution (whether commercial or not) of Licensed
Products or the licensing of Exclusively Licensed Patent Rights. Any non-cash consideration
received by Licensee for the sale or other distribution of Licensed Products or the licensing of
Exclusively Licensed Patent Rights will be converted to a cash value based on the fair market value
or a value mutually agreed upon.

1.10 “Valid Claim” means:

(a) a claim of an issued patent within the Exclusively Licensed Patent Rights that has not:

(i) expired or been canceled,

(ii) been finally adjudicated to be invalid or unenforceable by a decision of a court
or other appropriate body of competent jurisdiction (and from which no appeal is or can be
taken),

(iii) been admitted to be invalid or unenforceable through reissue, disclaimer or
otherwise, or

(iv) been abandoned in accordance with or as permitted by the terms of this Agreement
or by mutual written agreement; or

(b) a claim included in a pending patent application within the Exclusively Licensed Patent
Rights, which claim is being actively prosecuted in accordance with this

Agreement and which has not been:

(i) canceled,

(ii) withdrawn from consideration,

(iii) finally determined to be unallowable by the applicable governmental authority
(and from which no appeal is or can be taken), or

(iv) abandoned in accordance with or as permitted by the terms of this Agreement or by
mutual written agreement.

 

3

 

ARTICLE 2

LICENSE GRANT

2.1 Grant of Rights. Caltech hereby grants to Licensee the following licenses:

(a) an exclusive, royalty-bearing license under the Exclusively Licensed Patent Rights to
make, have made, import, use, sell, offer for sale, and otherwise exploit Licensed Products in the
Field throughout the world; and

(b) a nonexclusive, royalty-bearing license under the Technology to make, have
made, import, use, sell, offer for sale, reproduce, distribute, display, perform, create derivative
works of, and otherwise exploit Licensed Products in the Field throughout the world.

These licenses are personal to and nontransferable by Licensee, except as provided in Sections
6.3, 6.5, and 14.9.

Rights not explicitly granted herein are reserved by Licensor.

2.2 Reservation of Rights; Government Rights. These licenses are subject to: (a) the
reservation of Caltech’s right to make, have made, import, use, sell and offer for sale Licensed
Products for noncommercial educational and research purposes, but not for commercial sale or other
commercial distribution to third parties; and (b) any existing right of the U.S. Government under
Title 35, United States Code, Section 200 et seq. and under 37 Code of Federal Regulations, Section
401 et seq., including but not limited to the grant to the U.S. Government of a nonexclusive,
nontransferable, irrevocable, paid-up license to practice or have practiced any invention conceived
or first actually reduced to practice in the performance of work for or on behalf of the U.S.
Government throughout the world.

Licensed Products shall be substantially manufactured in the United States to the extent (if
at all) required by 35 U.S.C. Section 204.

2.3 Sublicensing. Licensee has the right hereunder to grant sublicenses to third
parties, but sublicensees shall not have the right to grant further sublicenses, and the
sublicenses may be of no greater scope than the licenses under Sections 2.1.

Licensee shall not receive, or agree to receive, anything of value in lieu of cash or equity
from a third party under a sublicense granted pursuant to this Section 2.3, without Caltech’s
express prior written permission which shall not be unreasonably withheld. Licensee shall
furnish Caltech within thirty (30) days of the execution thereof a true and complete copy of
each sublicense and any changes or additions thereto.

 

4

 

Any sublicenses granted by Licensee shall survive termination of the licenses granted in
Section 2.1, or of this Agreement, provided that the following conditions are met as of the date of
such termination: (a) the written agreement between Licensee and sublicensee pursuant to which the
sublicense was granted (i) obligates the sublicensee to thereafter render to Caltech all sublicense
royalties or other sublicense-related consideration that the sublicensee would have owed to
Licensee under the sublicense, (ii) names Caltech as a third party beneficiary, and (iii) affirms
that Licensee shall remain responsible for all liabilities to sublicensee accrued prior to the date
of such termination (other than those requiring Licensee to hold a license under the Exclusively
Licensed Patent Rights or Technology, unless Caltech (at its discretion) elects to assume such
obligations; and (b) Licensee informs the sublicensee in writing (with a copy to Caltech) that the
sublicensee’s obligations pursuant to (a) are in effect as a result of the termination.

2.4 No Other Rights Granted. The parties agree that neither this Agreement, nor any
action of the parties related hereto, may be interpreted as conferring by implication, estoppel or
otherwise, any license or rights under any intellectual property rights of Caltech other than as
expressly and specifically set forth in this Agreement, regardless of whether such other
intellectual property rights are dominant or subordinate to the Exclusively Licensed Patent Rights.

2.5 Preferential Purchaser Status. Caltech shall be entitled to purchase Licensed
Products from Licensee for Caltech’s own internal educational, research or other noncommercial
purposes on pricing terms that are at least as favorable as any commercial pricing made available
by Licensee to any third party.

ARTICLE 3

DISCLOSURE AND DELIVERY

Exclusively Licensed Patent Rights. Within one month of the Effective Date,
Caltech shall disclose and deliver to Licensee copies of all patent applications and issued patents
within
the Exclusively Licensed Patent Rights. Moreover, Caltech shall use reasonable efforts to
transfer the Technology to Licensee as may be reasonably required to exploit Licensed Products.
Caltech shall additionally periodically provide information relating to the Technology as may be
reasonably requested by Licensee.

 

5

 

ARTICLE 4

PROSECUTION OF PATENT APPLICATIONS AND

PAYMENT OF PATENT COSTS

4.1 Prosecution by Caltech. Caltech shall use reasonable efforts, consistent with
its normal practices, to prosecute any and all patent application(s) in connection with the
Exclusively Licensed Patent Rights. Licensee may recommend patent counsel for this purpose. Caltech
shall permit Licensee to review all patent applications and claims made therein, and Caltech shall
make reasonable efforts to implement modifications thereto as may be requested by Licensee prior to
filing.

4.2 Prosecution by Licensee. If Caltech declines to file, prosecute or maintain
Exclusively Licensed Patent Rights, then Licensee may elect to assume responsibility for such
filing, prosecution or maintenance at its expense in the name of both Caltech and Licensee. Caltech
agrees to fully cooperate with Licensee in filing, prosecuting, and maintaining any such patent
applications and patents, and Caltech agrees to execute any documents as shall be necessary for
such purpose, and not to impair in any way the patentability of any of the foregoing.

4.3 Patent Costs. Except as specified in the next paragraph, Licensee shall reimburse
Caltech for all reasonable past and future expenses (including attorneys’ fees) incurred by Caltech
for the filing, prosecution and maintenance, interference or reexamination proceedings, of
Exclusively Licensed Patent Rights. All amounts owed by Licensee for the reimbursement of past
patent expenses shall be due within twelve (12) months of the Effective Date of this Agreement. At
the written request of Caltech, Licensee shall directly reimburse outside patent counsel for all
other patent expenses following receipt by Licensee from outside patent counsel of an invoice
covering such fees.

 

6

 

Licensee may elect not to pay the foregoing patent costs and fees with respect to a particular
patent application or patent. In the event that Licensee elects not to pay any of the forgoing
costs and fees with respect to a particular application or patent, Caltech, may, at its option,
continue such prosecution or maintenance, although any patent or patent application resulting from
such prosecution or maintenance will thereafter no longer be subject to the licenses granted in
Section 2.1 hereunder.

ARTICLES

ROYALTIES

5.1 Timing and Computation. All royalties hereunder shall be computed on a
quarterly basis for the quarters ending March 31st, June 30th , September
30th, and December 31st of each calendar year. Royalties for each such
quarter shall be due and payable within thirty (30) days after the end of such quarter.

5.2 Valid Claims. Except as otherwise provided in Section 5.6 below, Licensee shall
pay Caltech a royalty of one percent (1%) of Net Revenues in countries in which the Licensed
Product is covered by at least one Valid Claim. Royalties due under this Section 5.2 shall be
payable on a country-by-country and Licensed Product-by-Licensed Product basis until the expiration
of the last-to-expire issued Valid Claim covering such Licensed Product in such country.

5.3 Technology. Except as otherwise provided in Section 5.6 below, Licensee shall pay
Caltech a royalty of one-half of one percent (0.5%) of Net Revenues in countries in which the
Licensed Product is not covered by at least one Valid Claim, but such Licensed Product is covered
by at least one Valid Claim in the United States of America.

5.4 Bundled Products and Services. In the event that Licensed Products are sold,
licensed, distributed or used in combination with one or more other products or services which are
not Licensed Products, the Net Revenues for such combination products will be calculated on a
country-by-country basis by multiplying actual net sales (calculated on the basis as if they were
Net Revenues) of such combination products by the fraction A/(A+B) where A is the average invoice
price, during the relevant quarterly period, of the Licensed Product when sold or licensed separately by Licensee or a Affiliate, and B is the average invoice price during such period

 

7

 

of any other product(s) or services in the combination when sold or licensed separately by Licensee
or an Affiliate. If the products or services in the combination that are not Licensed Products have
not been sold or licensed separately by Licensee or a Affiliate in the relevant quarterly period,
Net Revenues shall be calculated by multiplying actual net sales (calculated on a basis as if they
were Net Revenues) of such combination products by the fraction A/C where A is the average invoice
price, during the last quarterly period, of the Licensed Product when sold or licensed separately
and C is the average invoice price of the combination product during such period. If the Licensed
Product has not been sold or licensed separately by Licensee or a Affiliate in the last quarterly
period, regardless whether the combination product without the Licensed Product is sold or licensed
separately, Net Revenues shall be calculated as in the immediately preceding sentence except that A
shall be the total manufacturing cost of Licensed Product and C shall be the total manufacturing
cost of the combination.

5.5 Sublicensing Royalties. Except as otherwise provided in Section 5.6 below,
Licensee shall pay Caltech fifteen percent (15%) of the Net Revenues (including payments for
technical assistance and the like) that Licensee receives from sublicensing with respect to
Exclusively Licensed Patent Rights. For non-monetary consideration, Licensee, may, in its sole
discretion, and when feasible, provide Caltech with fifteen percent (15%) of such non-monetary
consideration. Such Net Revenues specifically shall not include payments made by a sublicensee
solely in consideration of: (a) equity or debt securities of Licensee; (b) to support research or
development activities to be undertaken by Licensee; (c) upon the achievement by Licensee of
specified milestones or benchmarks relating to the development of Licensed Products; (d) pilot
studies; (e) performance-based milestones (excluding milestones tied to sales or marketing
performance, which shall be subject to the percentage-based payments to Caltech); (f) the license
or sublicense of any intellectual property other than Caltech Technology; (g) products other than
Licensed Products; or (h) reimbursement for patent or other expenses.

5.6 License Bundling. Licensee shall not be obligated to pay any royalties under this
Article 5 in connection with the sale, distribution, sublicensing or other exploitation of Licensed
Products as defined by one or both of that Confidential License Agreement by and among
Licensee, Caltech, and the University of Southern California dated January 19, 2006 and that
Confidential Non-Exclusive License Agreement by and among Licensee, Caltech, and the University of
Southern California dated January 19, 2006.

 

8

 

5.6A Minimum Annual Royalties. A minimum annual royalty often thousand dollars
($10,000.00) is due Caltech on the later of (i) November 1, 2008; or (ii) such date as Licensee is
first obligated to pay sublicensing royalties under Section 5.5. Any royalties paid under Sections
5.2, 5.3, 5.4 and 5.5 for the one-year period preceding the date of each payment of the minimum
annual royalty shall be creditable against the annual minimum. Caltech shall have the right to
terminate this Agreement pursuant to Section 10.2 for failure to pay such minimum annual royalty.

5.7 Third Party Royalty Offset. If Licensee, an Affiliate, or a sublicensee of
Licensee is required to make any payment (including, but not limited to, royalties or other license
fees) to one or more third parties to obtain a patent license in the absence of which it could not
legally make, import, use, sell, or offer for sale Licensed Products in any country, and Licensee
provides Caltech with reasonably satisfactory evidence of such third-party payments, such third
party payments shall be fully creditable against royalties owed to Caltech hereunder, provided that
in no one year shall the aggregate of all such expenses be credited against more than twenty five
percent (25%) of royalty payments to Caltech. Any greater amount of such expenses may be carried
over and credited against royalties owed in future years, subject in every case to the 25% annual
cap for that year.

5.8 Currency Conversion. For the purpose of determining royalties payable under this
Agreement, any royalties or other revenues Licensee receives from sublicensees in currencies other
than U.S. dollars and any Net Revenues denominated in currencies other than U.S. dollars shall be
converted into U.S. dollars according to the noon buying rate of the Federal Reserve Bank of New
York on the last business day of the quarterly period for which such royalties are calculated.

 

9

 

5.9 Recordkeeping and Audits. Licensee shall keep complete and accurate production and
accounting records relating to commercialization (including via sublicensing) of Licensed Products.
Caltech shall be entitled to have an independent CPA periodically audit such records, during
Licensee’s normal business hours, to determine Licensee’s compliance with the provisions of this
Article 5. Licensee shall reimburse Caltech 100% of any unpaid royalties resulting from any
noncompliance discovered as a result of any such audit; and Licensee shall also pay Caltech an
additional 50% of the entire amount of any underpayment exceeding 10% of the corresponding amount
previously paid. Such audits shall be at Caltech’s expense, and shall occur no more than once
annually, except that in the case of any underpayment exceeding 10% of the amount actually paid:
(a) Licensee shall reimburse Caltech for the cost of such audit; and (b) Caltech shall be entitled
to conduct additional quarterly audits, at Licensee’s expense, until any such audit demonstrates
that Licensee is in compliance with its obligations.

5.10 For so long as royalties are payable under this Agreement, Licensee shall report in
writing to Caltech on or before April 30th , July 31st , October
31st , and January 31st , Net Revenues and the number of units of Licensed
Products sold during the preceding calendar quarter by Licensee and Related Companies, and the
royalties or other revenues Licensee received from sublicensees other than Related Companies during
the preceding calendar quarter for the sale of Licensed Products. Each such report shall also set
forth an explanation of the calculation of the royalties payable hereunder and be accompanied by
payment of the royalties shown by said report to be due Caltech.

ARTICLE 6

LICENSEE EQUITY INTEREST

6.1 Common Stock Grant. Licensee agrees to irrevocably issue to
Caltech, in partial consideration of Licensee’s receipt of the licenses granted under this
Agreement, 150,000 shares of common stock.

6.2 Transfer Restrictions. Caltech agrees that, in the event of any
underwritten or public offering of securities of Licensee or an Affiliate, Caltech shall comply
with and agree to any legally required restriction on the transfer of its equity interest, or any
part thereof, imposed by the
underwriter, and shall perform all acts and sign all necessary documents required with respect
thereto. Other than the foregoing, Caltech shall not be restricted from transferring its equity
interest to any entity in any manner not prohibited by law.

 

10

 

6.3 Permitted Assignment by Licensee. Licensee may assign this
Agreement without the consent of Caltech as part of a sale, regardless of whether such a sale
occurs through an asset sale, stock sale, merger or other combination, or any other transfer of:

(a) substantially all of Licensee’s business; or

(b) that part of Licensee’s business that exercises all rights granted under this Agreement.

6.4 Any Other Assignment by Licensee. Any other attempt to assign this
Agreement by Licensee is null and void.

6.5 Conditions of Assignment. Notwithstanding anything else, Licensee may assign this
Agreement in a transaction other than as provided in Sections 6.3 and 14.9, in its sole discretion,
provided that, the following conditions are met:

(a) Licensee must give Caltech thirty (30) days prior written notice of the assignment,
including the new assignee’s contact information; and

(b) the new assignee must agree in writing to Caltech to be bound by this Agreement; and

(c) Caltech must have (i) provided written permission to assign the agreement,
(ii) received a $250,000 assignment fee; or (iii) received the full amount for the liquidation of
Caltech’s equity holdings under this license agreement (150,000 shares), or in the event that the
amount received for the liquidation of Caltech’s equity holdings is less than $250,000, an
additional amount equivalent to the difference between the $250,000 assignment fee and the amount
received for Caltech’s liquidated equity; or (iv) Licensee may establish that a royalty be paid to
Caltech for the sales of Licensed Products by the assignee of this Agreement in lieu of any
assignment fee. If Licensee chooses to pay a royalty in lieu of an assignment fee, Caltech and
Licensee agree to amend this Agreement in good faith to address the royalty considerations prior to
the assignment of this license.

 

11

 

6.6 After the Assignment. Upon a permitted assignment of this Agreement pursuant to
this Section, Licensee will be released of liability under this Agreement and the term
“Licensee” in this Agreement will mean the assignee.

ARTICLE 7

DUE DILIGENCE

7.1 Commercialization. Licensee agrees to use reasonable efforts to commercially
introduce Licensed Products in the Field as soon as practicable. Licensee shall be deemed to have
satisfied its obligations under this Section 6.1 if Licensee has an ongoing and active research,
development or marketing program, directed primarily toward commercial production and use of one or
more Licensed Products. Any efforts of Licensee’s Affiliates or sublicensees shall be considered
efforts of Licensee for the sole purpose of determining Licensee’s compliance with its obligation
under this Section 6.1.

7.2 Reporting. On each yearly anniversary of the Effective Date, Licensee shall, at
the request of Caltech, issue to Caltech a detailed written report on its progress in introducing
commercial Licensed Product(s). Such report shall be considered confidential information of
Licensee subject to Article II.

7.3 Failure to Commercialize. If Licensee is not fulfilling its obligations under
Section 7.1 with respect to the Field in any country, and Caltech so notifies Licensee in writing,
Caltech and Licensee shall negotiate in good faith any additional efforts to be taken by Licensee.
If the parties do not reach agreement within thirty (30) days of Caltech’s written notice, the
parties shall submit the issue to arbitration as provided in Article 12.

ARTICLE 8

LITIGATION

8.1 Enforcement. Both Caltech and Licensee agree to promptly notify the other in
writing should either party become aware of possible infringement by a third party of the
Exclusively Licensed Patent Rights. If Licensee has supplied Caltech with evidence of infringement
of Exclusively Licensed Patent Rights, Licensee may by notice request Caltech to take steps to
enforce the Exclusively Licensed Patent Rights. If Caltech does not, within sixty (60) days of the
receipt of such notice, initiate an action against the alleged infringer in the Field,
Licensee may upon notice to Caltech initiate such an action at Licensee’s expense, either in
Licensee’s name or in Caltech’s name if so required by law. Licensee shall be entitled to control
any such action initiated by it.

 

12

 

8.2 Other Defensive Litigation. If a declaratory judgment action alleging invalidity,
unenforceability or noninfringement of any of the Exclusively Licensed Patent Rights is brought
against Licensee and/or Caltech, Licensee may elect to control the defense of such action, and if
Licensee so elects it shall bear all the costs of the action. If mutually agreed between the
parties, Licensee may also undertake the defense of any interference, opposition or similar
procedure with respect to the Exclusively Licensed Patent Rights, providing that Licensee bears all
the costs thereof.

8.3 Cooperation. In the event either party takes control of a legal action or defense
pursuant to this Sections 8.1 or 8.2, (thus becoming the Controlling Party) the other party shall
fully cooperate with and supply all assistance reasonably requested by the Controlling Party,
including by: (a) using commercially reasonable efforts to have its employees consult and testify
when requested; (b) making available relevant records, papers, information, samples, specimens, and
the like; and (c) joining any such action in which it is an indispensable party. The Controlling
Party shall bear the reasonable expenses (including salary and travel costs) incurred by the other
party in providing such assistance and cooperation. Each party shall keep the other party
reasonably informed of the progress of the action or defense, and the other party shall be entitled
to participate in such action or defense at its own expense and using counsel of its choice. As a
condition of controlling any action or defense involving the Exclusively Licensed Patent Rights
pursuant to Sections 8.1 or 8.2, Licensee shall use its best efforts to preserve the validity and
enforceability thereof.

8.4 Settlement. If Licensee controls any action or defense under Section 8.1 or 8.2,
then Licensee shall have the right to settle any claims thereunder, but only upon terms and
conditions that are reasonably acceptable to Caltech. Should Licensee elect to abandon such an
action or defense other than pursuant to a settlement with the alleged infringer that is reasonably
acceptable to Caltech, Licensee shall give timely advance notice to Caltech who, if it so
desires, may continue the action or defense.

 

13

 

8.5 Recoveries. Any amounts paid to Caltech or Licensee by third parties as the result
of an action or defense pursuant to Sections 8.1 or 8.2 (including in satisfaction of a judgment or
pursuant to a settlement) shall first be applied to reimbursement of the unreimbursed expenses
(including attorneys’ fees and expert fees) incurred by each party. Any remainder shall be divided
between the parties as follows: seventy percent (70%) shall be paid to the party controlling the
action at the time of recovery, and thirty percent (30%) to the other party.

8.6 Infringement Defense. If Licensee, its Affiliate or sublicensee, distributor or
other customer is sued by a third party charging infringement of patent rights that cover a
Licensed Product, Licensee will promptly notify Caltech. Licensee will be responsible for the
expenses of, and will be entitled to control the defense or settlement of, any such action(s).

8.7 Marking. Licensee agrees to mark the Licensed Products with the numbers of
applicable issued patents within the Exclusively Licensed Patent Rights, unless such marking is
commercially infeasible in accordance with normal commercial practices in the Field, in which case
the parties shall cooperate to devise a commercially reasonable alternative to such marking.

8.8 Expiration or Abandonment. In a case where one or more patents or particular
claims thereof within the Licensed Patent Rights expire, or are abandoned, or are declared invalid
or unenforceable by a court of last resort or by a lower court from whose decree no appeal is
taken, or certiorari is not granted within the period allowed therefore, then the effect thereof
hereunder shall be:

(a) that such patents or particular claims shall, as of the date of expiration or abandonment
or final decision as the case may be, cease to be included within the Licensed Patent Rights for
the purpose of this Agreement; and

 

14

 

(b) that such construction so placed upon the Licensed Patent Rights by the court shall be
followed from and after the date of entry of the decision, and royalties shall thereafter be
payable by Licensee only in accordance with such construction.

In the event that Licensee challenges the validity of Licensed Patent Rights,
Licensee may not cease paying royalties as of the date validity of the claims in issue are
challenged, but rather may cease paying royalties as to those claims only after a final
adjudication of invalidity of those claims.

8.9 Adjustment. In the event that any of the contingencies provided for in Section 8.8
occurs, Caltech agrees to renegotiate in good faith with Licensee a reasonable royalty rate under
the remaining Licensed Patent Rights which are unexpired and in effect and under which Licensee
desires to retain a License.

ARTICLE 9

REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION

9.1 Representations and Warranties of Caltech. Caltech hereby represents and
warrants to Licensee that as of the Effective Date:

(a) there are no outstanding licenses, options or agreements of any kind relating to the
Exclusively Licensed Patent Rights, other than pursuant to this Agreement herein;

(b) Caltech has the power to grant the rights, licenses and privileges granted herein and can
perform as set forth in this Agreement without violating the terms of any agreement that Caltech
has with any third party.

9.2 Exclusions. The parties agree that nothing in this Agreement shall be construed
as, and CALTECH HEREBY DISCLAIMS, ANY EXPRESS OR IMPLIED
REPRESENTATION, WARRANTY, COVENANT, OR OTHER OBLIGATION:

(a) THAT ANY PRACTICE BY OR ON BEHALF OF LICENSEE OF ANY
INTELLECTUAL PROPERTY LICENSED HEREUNDER IS OR WILL BE FREE FROM
INFRINGEMENT OF RIGHTS OF THIRD PARTIES;

 

15

 

(b) AS TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR NONINFRINGEMENT OF THIRD PARTY RIGHTS, WITH
RESPECT TO ANY TECHNOLOGY PROVIDED BY CALTECH TO LICENSEE HEREUNDER.

9.3 Indemnification by Caltech. Caltech shall indemnify, defend and hold harmless
Licensee from and against any and all losses, damages, costs and expenses (including attorneys’
fees) arising out of a material breach by Caltech of its representations and warranties (“Licensee
Indemnification Claims”), except to the extent involving or relating to a material breach by
Licensee of its representations and warranties, provided that: (a) Caltech is notified promptly of
any Licensee Indemnification Claims; (b) Caltech has the sole right to control and defend or settle
any litigation within the scope of this indemnity; and (c) all indemnified parties cooperate to the
extent necessary in the defense of any Licensee Indemnification Claims. The foregoing shall be the
sole and exclusive remedy of Licensee for breach of Section 9.1.

9.4 Indemnification by Licensee. Licensee shall indemnify, defend and hold harmless
Caltech, its trustees, officers, agents and employees from and against any and all losses, damages,
costs and expenses (including reasonable attorneys’ fees) arising out of third party claims brought
against Caltech relating to the manufacture, sale, licensing, distribution or use of Licensed
Products by or on behalf of Licensee or its Affiliates, except to the extent involving or relating
to a material breach by Caltech of its representations and warranties (“Cal tech Indemnification
Claims”), provided that: (a) Licensee is notified promptly of any Caltech Indemnification Claims;
(b) Licensee has the sole right to control and defend or settle any litigation within the scope of
this indemnity; and (c) all indemnified parties cooperate to the extent necessary in the defense of
any Caltech Indemnification Claims ..

9.5 Certain Damages. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES
ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.

 

16

 

ARTICLE 10

TERM AND TERMINATION

10.1 Term. This Agreement and the rights and licenses hereunder shall take effect
on the Effective Date and continue until the expiration, revocation, invalidation, or
unenforceability of the Exclusively Licensed Patent Rights licensed to Licensee hereunder unless
earlier terminated pursuant to the terms of this Agreement.

10.2 Termination for Monetary Breach. Caltech shall have the right to terminate this
Agreement and the rights and licenses hereunder if Licensee fails to make any payment due including
patent expenses, minimum annual royalties or royalties hereunder and Licensee continues to fail to
make the payment, (either to Caltech directly or by placing any disputed amount into an
interest-bearing escrow account to be released when the dispute is resolved) for a period of seven
(7) days after receiving written notice from Caltech specifying Licensee’s failure. Upon any such
termination, (a) Licensee shall have six (6) months to complete the manufacture of any Licensed
Products that are then works in progress for sale and to sell its inventory of Licensed Products,
provided that Licensee pays the applicable royalties, and (b) any sublicenses shall survive
termination in accordance with Section 2.3.

10.3 Non-Monetary Termination for Breach. Non-monetary breach shall include, but is
not limited to, failure to fulfill the obligations in Article 6 and pursuit of exploitation of
Exclusively Licensed Patent Rights inside the Field. If this Agreement is materially breached by
either party, the non-breaching party may elect to give the breaching party written notice
describing the alleged breach. If the breaching party has not cured such breach within thirty (30)
days after receipt of such notice, the notifying party will be entitled, in addition to any other
rights it may have under this Agreement, to terminate this Agreement and the rights and licenses
hereunder.

 

17

 

10.4 Other Termination. This Agreement may also be terminated, in whole or in part, as
set forth in Sections 5.6 and 7.3. In addition, Licensee may terminate this Agreement for
convenience by providing Caltech with thirty (30) days advanced written notice.

10.5 Accrued Liabilities. Termination of this Agreement for any reason shall not
release any party hereto from any liability which, at the time of such termination, has already
accrued to the other party or which is attributable to a period prior to such termination, nor
preclude either party from pursuing any rights and remedies it may have hereunder or at law or in
equity which accrued or are based upon any event occurring prior to such termination,

10.6 Survival. The following shall survive any expiration or termination (in whole or
in pat) of this Agreement: (a) any provision plainly indicating that it should survive; (b) any
royalty due and payable on account of activity prior to the termination; and (c) Sections or
Articles 6.2, 9.2, 9.3, 9.4, 9.5, 10.4, II, 12, 13.1 & 14.

ARTICLE 11

CONFIDENTIALITY

11.1 Nondisclosure and Nonuse. Except as may be reasonably required by Licensee
in connection with potential customers and the provision of a sublicense or a potential investment,
during the term of this Agreement, each party agrees not to disclose any of the terms of this
Agreement to any third party without the prior written consent of the other party.

11.2 Permitted Disclosures. Notwithstanding the foregoing, each party may disclose:
(a) confidential information as required by securities or other applicable laws or pursuant to
governmental proceedings, provided that the disclosing party gives advance written notice to the
other party and reasonably cooperates therewith in limiting the disclosure to only those third
parties having a need to know; and (b) the fact that Licensee has been granted a license under the
Exclusively Licensed Patent Rights. In addition, upon Caltech’s approval, Licensee shall be
entitled to issue one or more factual press releases announcing the execution of this Agreement and
describing the Exclusively Licensed Patent Rights.

 

18

 

ARTICLE 12

DISPUTE RESOLUTION

12.1 No issue of the validity of any of the Licensed Patents, enforceability of any of the
Licensed Patents, infringement of any of the Licensed Patents, the scope of any of the claims of
the Licensed Patents and/or any dispute that includes any such issue, shall be subject to
arbitration under this Agreement unless otherwise agreed by the Parties in writing.

12.2 Except for those issues and/or disputes described in Section 10.2, any dispute between
the Parties concerning the interpretation, construction or application of any terms, covenants or
conditions of this Agreement shall be resolved by arbitration.

12.3 Arbitration shall be in accordance with the CPR Institute For Dispute Resolution (CPR)
Rules for Non-Administered Arbitration of Patent and Trade Secret Disputes or Rules for
Non-Administered Arbitration, as appropriate, in effect on the Effective Date by a sole Arbitrator
who shall be appointed in accordance with the applicable CPR rules. Any other choice of law clause
to the contrary in this Agreement notwithstanding, the arbitration shall be governed by the United
States Arbitration Act, 9 U.S.C. Section 1-16.

12.4 Any award made (i) shall be a bare award limited to a holding for or against a party and
affording such remedy as is within the scope of the Agreement; (ii) shall be accompanied by a brief
statement (not to exceed ten (10) pages) of the reasoning on which the award rests; (iii) shall be
made within four (4) months of the appointment of the Arbitrator; (iv) may be entered in any court
of competent jurisdiction; and (v) any award pertaining to a patent which is subsequently
determined to be invalid or unenforceable or otherwise precluded from being enforced, in a judgment
rendered by a court of competent jurisdiction from which no appeal can or has been taken, may be
modified as it relates to such patent by any court of competent jurisdiction upon application by
any party to the arbitration, however, under no circumstances shall Caltech be required to refund
any monies paid, or forego any amounts accrued, under the terms of this Agreement.

 

19

 

12.5 The requirement for arbitration shall not be deemed a waiver of any right of termination
under this Agreement and the Arbitrator is not empowered to act or make any award other than based
solely on the rights and obligations of the Parties prior to any such termination.

12.6 Each party shall bear its own expenses incurred in connection with any attempt to resolve
disputes hereunder, but the compensation and expenses of the Arbitrator shall be borne equally.

12.7 The Arbitrator shall not have authority to award punitive or other damages III excess of
compensatory damages, and each party irrevocably waives any claim thereto.

ARTICLE 13

PRODUCT LIABILITY

13.1 Indemnification. Licensee agrees that Caltech (including its trustees,
officers, faculty and employees) shall have no liability to Licensee, its Affiliates, their
customers or any third party, for any claims, demands, losses, costs, or other damages which may
result from personal injury, death, or property damage related to the Licensed Products (“Product
Liability Claims”). Licensee agrees to defend, indemnify, and hold harmless Caltech, its trustees,
officers, faculty and employees from any such Product Liability Claims, provided that: (a) Licensee
is notified promptly of any Product Liability Claims; (b) Licensee has the sole right to control
and defend or settle any litigation within the scope of this indemnity; and (c) all indemnified
parties cooperate to the extent necessary in the defense of any Claims.

13.2  Insurance. Prior to such time as Licensee begins to manufacture, sell, license,
distribute or use Licensed Products, Licensee shall at its sole expense, procure and maintain
policies of comprehensive general liability insurance in amounts not less than $1,000,000 per
incident and $3,000,000 in annual aggregate, and naming those indemnified under Section 13.1 as
additional insureds. Such comprehensive general liability insurance shall provide: (a) product
liability coverage; and (b) broad form contractual liability coverage for Licensee’s
indemnification of Caltech under Section 13.1. In the event the aforesaid product liability
coverage does not provide for occurrence liability, Licensee 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. Licensee shall provide Caltech
with written evidence of such insurance upon request of Caltech.

 

20

 

13.3  Loss of Coverage. Licensee shall provide Caltech with notice at least fifteen
(15) days prior to any cancellation, non-renewal or material change in such insurance, to the
extent

Licensee receives advance notice of such matters from its insurer. If Licensee does not obtain
replacement insurance providing comparable coverage within sixty (60) days following the date of
such cancellation, non-renewal or material change, Caltech shall have the right to terminate this
Agreement effective at the end of such sixty (60) day period without any additional waiting period;
provided that if Licensee provides credible written evidence that is has used reasonable efforts,
but is unable, to obtain the required insurance, Caltech shall not have the right to terminate this
Agreement, and Caltech instead shall cooperate with Licensee to either (at Caltech’s discretion)
grant a limited waiver of Licensee’s obligations under this Article or assist

Licensee in identifying a carrier to provide such insurance or in developing a program for
self-insurance or other alternative measures.

ARTICLE 14

MISCELLANEOUS

14.1 Notices. All notice, requests, demands and other communications hereunder
shall be in English and shall be given in writing and shall be: (a) personally delivered; (b) sent
by telecopier, facsimile transmission or other electronic means of transmitting written documents
with confirmation of receipt; or (c) sent to the parties at their respective addresses indicated
herein by registered or certified mail, return receipt requested and postage prepaid, or by private
overnight mail courier services with confirmation of receipt. The respective addresses to be used
for all such notices, demands or requests are as follows:

	 	(a)	 	If to CALTECH, to:

California Institute of Technology

1200 East California Boulevard

Mail Code 210-85

Pasadena, CA 91125

ATTN: Senior Director, Technology Transfer

Phone No.: (626) 395-3288

Fax No.: (626) 356-2486

 

21

 

Or to such other person or address as Caltech shall furnish to Licensee in writing.

	 	(b)	 	If to LICENSEE, to:

Direct Methanol Fuel Cell Corporation (DMFCC)

171 N. Altadena Drive

Pasadena, CA 91107

ATTN: Carl Kukkonen

Phone No.: (626) 768-3360

Fax No.: (626) 578-9063

If personally delivered, such communication shall be deemed delivered upon actual receipt by
the “attention” addressee or a person authorized to accept for such addressee; if transmitted by
facsimile pursuant to this paragraph, such communication shall be deemed delivered the next
business day after transmission, provided that sender has a transmission confirmation sheet
indicating successful receipt at the receiving facsimile machine; if sent by overnight courier
pursuant to this paragraph, such communication shall be deemed delivered upon receipt by the
“attention” addressee or a person authorized to accept for such addressee; and if sent by mail
pursuant to this paragraph, such communication shall be deemed delivered as of the date of delivery
indicated on the receipt issued by the relevant postal service, or, if the addressee fails or
refuses to accept delivery, as of the date of such failure or refusal. Any party to this Agreement
may change its address for the purposes of this Agreement by giving notice thereof in accordance
with this Section 14.1

14.2 Entire Agreement. This Agreement sets forth the complete agreement of the parties
concerning the subject matter hereof. No claimed oral agreement in respect thereto shall be
considered as any part hereof. No amendment or change in any of the terms hereof subsequent to the
execution hereof shall have any force or effect unless agreed to in writing by duly authorized
representatives of the parties.

 

22

 

14.3 Waiver. No waiver of any provision, of this Agreement shall be effective unless
in writing. No waiver shall be deemed to be, or shall constitute, a waiver of a breach of any other
provision of this Agreement, whether or not similar, nor shall such waiver constitute a continuing
waiver of such breach unless otherwise expressly provided in such waiver.

14.4 Severability. Each provision contained in this Agreement IS declared to
constitute a separate and distinct covenant and provision and to be severable from all other
separate, distinct covenants and provisions. It is agreed that should any clause, condition or
term, or any part thereof, contained in this Agreement be unenforceable or prohibited by law or by
any present or future legislation then: (a) such clause, condition, term or part thereof, shall be
amended, and is hereby amended, so as to be in compliance therewith the legislation or law; but (b)
if such clause, condition or term, or part thereof; cannot be amended so as to be in compliance
with the legislation or law, then such clause, condition, term or part thereof shall be severed
from this Agreement all the rest of the clauses, terms and conditions or parts thereof contained in
this Agreement shall remain unimpaired.

14.5 Construction. The headings in this Agreement are inserted for convenience only
and shall not constitute a part hereof. Unless expressly noted, the term “include” (including all
variations thereof) shall be construed as merely exemplary rather than as a term of limitation.

14.6 Counterparts/Facsimiles. This Agreement may be executed in one or more
counterparts, all of which taken together shall be deemed one original. Facsimile signatures shall
be deemed original.

14.7 Governing Law.  This Agreement, the legal relations between the parties and any
action, whether contractual or non-contractual, instituted by any party with respect to matters
arising under or growing out of or in connection with or in respect of this Agreement shall be
governed by and construed in accordance with the internal laws of the State of California,
excluding any conflict of law or choice of law rules that may direct the application of the laws of
another jurisdiction.

 

23

 

14.8 No Endorsement. Licensee agrees that it shall not make any form of representation
or statement which would constitute an express or implied endorsement by Caltech of any Licensed
Product, and that it shall not authorize others to do so, without first having obtained written
approval from Caltech, except as may be required by governmental law, rule or regulation.

14.9 Transferability. This Agreement shall be binding upon and inure to the benefit of
any successor or assignee of Caltech. This Agreement is not transferable by Licensee without the
prior written consent of Caltech, and any attempted transfer shall be void, except that Licensee
may transfer this Agreement without the prior written consent of Caltech to any Affiliate or any
successor of, or purchaser of substantially all of, the assets or operations of its business to
which this Agreement pertains. Any permitted transferee shall succeed to all of the rights and
obligations of Licensee under this Agreement. See Sections 6.3 and 6.5.

14.10 Export Regulations. This Agreement is subject in all respects to the laws and
regulations of the United States of America, including the Export Administration Act of 1979, as
amended, and any regulations thereunder. Licensee or its sublicensees 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

14.11 Force Majeure. Neither party shall lose any rights hereunder or be liable to the
other party for damages or losses (except for payment obligations) on account of failure of
performance by the defaulting party if the failure is occasioned by war, strike, fire, Act of God,
earthquake, flood, lockout, embargo, governmental acts or orders or restrictions, failure of
suppliers, or any other reason where failure to perform is beyond the reasonable control and not
caused by the negligence or intentional conduct or misconduct of the nonperforming party, and such
party has exerted all reasonable efforts to avoid or remedy such force majeure; provided, however,
that in no event shall a party be required to settle any labor dispute or disturbance.

 

24

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed:

	 	 	 	 	 
	 	CALIFORNIA INSTITUTE OF TECHNOLOGY (Caltech)

 	 
	Date: 5/15/06 	By:  	/s/ Lawrence Gilbert
 	 
	 	 	Name:  	Lawrence Gilbert 	 
	 	 	Title:  	Sr. Director, Office of Technology Transfer 	 
	 
	 	

(LICENSEE)

 	 
	Date: 5/15/06 	By:  	/s/ Carl Kukkonen
 	 
	 	 	Name:  	Carl Kukkonen 	 
	 	 	Title:  	CEO 	 
	 

 

25

 

Exhibit A

	 	 	 	 	 	 	 	 	 
	 	 	Serial or	 	Filing or	 	 
	CIT #	 	Patent No.	 	Issued Date	 	Title and Inventors
	CIT 3011

	 	 	6,440,594	 	 	8/27/02
	 	Aerosol Feed Direct Methanol Fuel Cell

          Andrew Kindler

          Sekharipuran R. Narayanan

          Thomas I. Valdez
	CIT 3227

	 	 	6,680,139	 	 	1/20/04
	 	Reduced Size Fuel Cell for Portable Applications

          Sekharipuran R. Narayanan

          Harvey A. Frank

          Filberto Clara

          Thomas I. Valdez.
	CIT 3227-CA

	 	 	2412558	 	 	6/13/01
	 	Micro or miniature Fuel cell Power Source for
Small Portable Applications

          Sekharipuran R. Narayanan

          Harvey A. Frank

          Filberto Clara

          Thomas I. Valdez.
	CIT 3227-EPO

	 	 	01952871.0	 	 	6/13/01
	 	Micro or miniature Fuel cell Power Source for
Small Portable Applications

          Sekharipuran R. Narayanan

          Harvey A. Frank

          Filberto Clara

          Thomas I. Valdez.
	CIT 3338

	 	 	6,756,145	 	 	6/29/04
	 	Electrode and Interconnect for Miniature Fuel
Cells using Direct Methanol Feed

          Sekharipuran R. Narayanan

          Filberto Clara

          Thomas I. Valdez.
	CIT 3633

	 	 	10/410,761	 	 	4/9/03
	 	Methanol Monopolar, Miniature Fuel Cell and
Method of Fabricating a Stack of the same

          Sekharipuran R. Narayanan

          Thomas I. Valdez.
	CIT 3633-JP

	 	2003-585214
	 	4/9/03
	 	Methanol Monopolar, Miniature Fuel Cell and
Method of Fabricating a Stack of the same

          Sekharipuran R. Narayanan

          Thomas I. Valdez.
	CIT 3799

	 	 	10/704,196	 	 	11/7/03
	 	Cathode Structure for Direct Methanol Fuel Cell

          Sekharipuran R. Narayanan

          Thomas I. Valdez.
	CIT3800

	 	 	10/704,203	 	 	11/7/03
	 	Anode Structure for Direct Methanol Fuel Cell

          Sekharipuran R. Narayanan

          Thomas I. Valdez.

 

26

 

Exhibit B

Technology

	 	 	 
	Name	 	Technology
	NONE
	 	 

 

27

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