EXHIBIT 10.2
LICENSE AGREEMENT
THIS AGREEMENT dated for reference March 5, 1999.
BETWEEN:
▇▇▇▇ ▇. ▇▇▇▇▇,
of ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
("Chato")
OF THE FIRST PART
AND:
CLEAN ENERGY TECHNOLOGY INC., a Delaware, U.S.A.
corporation having its head office at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇.▇., ▇▇▇ ▇▇▇, ▇▇▇▇▇▇
("CETI")
OF THE SECOND PART
WHEREAS:
A. ▇▇▇▇ ▇. ▇▇▇▇▇ ("Chato") is the inventor of, and has the exclusive right to
exploit a novel mantle technology for low emission liquid carbon based fuel
heating for which the letters patent detailed in Schedule "A" attached
hereto have been issued or applied for (the "Mantle Technology");
▇. ▇▇▇▇▇ has agreed to grant to CETI the exclusive world-wide right and
license to design, engineer, manufacture, market, distribute, lease and
sell heating products using the Mantle Technology, and to sublicense and
otherwise commercially exploit the Mantle Techonology;
▇. ▇▇▇▇▇ has also agreed to grant CETI an option to purchase the Mantle
Technology.
NOW THEREFORE in consideration of CETI paying U.S. $10.00 to Chato and other
good and valuable consideration contemplated by this Agreement (the receipt and
sufficiency of which is hereby acknowledged by Chato), the parties hereto
covenant and agree as follows:
1. DEFINITIONS
1.1 In this Agreement the following definitions apply:
(a) "Business Day" means means any day other than a day which is a
Saturday, a Sunday or a statutory holiday in British Columbia,
Canada;
(b) "Confidential Information" means all trade secrets, know-how,
proprietary knowledge, technology, improvements and other valuable
information relating to the Mantle
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Technology or the Patents which is not yet in the public domain and
which Chato now holds or in the future acquires the right to use.
(c) "License" mean the exclusive world-wide right to design, engineer,
manufacture, market, distribute, lease and sell heating applications
using the Mantle Technology, and to sublicense and otherwise
commercially exploit the Mantle Technology.
(d) "Licensed Activities" mean the designing, engineering, manufacturing,
marketing, distributing, leasing and selling, of all the applications
and inventions owned or developed by Chato which utilize, or are used
in conjunction with, the Mantle Technology, and the sublicensing of
such activities.
(e) "Licensed Applications" mean all the applications and inventions
owned or developed by Chato which utilize, or are used in conjunction
with, the Mantle Technology.
(f) "Patents" means and includes:
(i) the patents and patent applications listed in Schedule "A";
(ii) any divisional, continuation or substitute patent applications
which are based on the patents or patent applications listed in
Schedule "A";
(iii) any patent which may issue or be re-issued any patent
application described in (ii); and
(iv) patents and patent applications corresponding to each of the
patents and patent applications described in (i), (ii) and
(iii) above which are issued, filed, or to be filed in any and
all foreign jurisdictions, and patents (including but limited
to patents of importation, improvement, or addition, utility
models and inventors certificates) which may subsequently issue
thereof, and any renewals, divisions, renewals, continuations
or extensions thereof.
(g) "Personnel" means any employee, officer, director, shareholder,
independent contractor, representative or other agent of an entity;
(h) "Related Party" means any person, corporation, partnership, firm or
other entity which is related to CETI in any of the following ways:
(i) as an affiliate of CETI (as interpreted below);
(ii) as the Personnel of CETI, an affiliate of CETI, or a
Sublicense;
(iii) as a financial institution leasing, or otherwise providing
financing for, a purchased item of Licensed Application to CETI
or to a Sublicensee or affiliate of CETI.
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For the purpose of this definition, "affiliate" is to be interpreted
broadly to apply to any person, corporation, firm or other entity
which controls, is controlled by or is under common control with CETI
or any Sublicensee; and "control" is also to be interpreted broadly
to include actual control. Without limiting the generality of the
foregoing, "affiliate" shall include any person, corporation, firm or
other entity which has an interest in not less than 35% of the issued
voting capital of CETI or any Sublicensee; and any corporation in
which CETI or any Sublicensee have in aggregate an interest in not
less than 35% of the issued voting capital of that corporation.
(i) "Sublicense" means any agreement between CETI and another party under
which CETI sublicenses its right to pursue any of the Licensed
Activities in respect of any of the Licensed Applications;
(j) "Sublicensee" means the holder of a subsisting Sublicense;
(k) "Term" means the period commencing March 5, 1999 and ending on the
earlier of: (i) March 5, 2019 and (ii) the lapsing date of the newest
of the underlying patents for the Mantle Technology, including
patents on any improvements thereto.
2. GRANT OF LICENSE
2.1 For the consideration set out in this Agreement, Chato hereby grants to
CETI the License for the Term. During the Term, CETI will use its best
efforts to pursue the Licensed Activities to the fullest extent possible,
and without interruption.
Ancillary Grant
2.2 Ancillary to this grant of License, Chato hereby grants to CETI for use
solely in pursuit of the Licensed Activities during the term of this
Agreement, the non-exclusive right to use the Mantle Technology, the
Patents, the Confidential Information and all those ancillary assets
owned by Chato which CETI will need to carry out the Licensed Activities
(the "Ancillary Assets").
Licensed Trademarks
2.3.1. In order to promote and identify the Licensed Applications, Chato hereby
grants to CETI the right to use any trademarks and trade names designated
by Chato for use from time to time in conjunction with the Licensed
Applications during the term of this Agreement (the "Licensed
Trademarks"); Chato authorizes CETI to grant to Sublicensees, when
necessary under a Sublicense, the right to use specified Licensed
Trademarks in a specified territory during the term of this Agreement;
but CETI, each Sublicensee and any applicable Related Party must first
enter into such user agreements with Chato, in forms approved by Chato,
as Chato shall from time to time deem appropriate for each jurisdiction
in which any of the Licensed Trademarks are to be used, but no such user
agreements may require payment of any fee or royalty to Chato or to CETI.
CETI may not use, nor will it allow any Sublicensee or Related Party to
use, the
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Licensed Trademarks except in connection with Licensed Activities as
permitted under this Agreement.
2.3.2. The Licensee will identify or cause to be identified prominently on each
item of a Licensed Application the applicable patent or pending patent,
together with the trademark and trade name specified by Chato for such
item. On each item of a Licensed Application must be affixed an
identification plate which indicates:
(a) the relevant patent or pending patent with its serial number or
numbers;
(b) the place of manufacture; and
(c) the following statement: "CETI (or the name of the relevant
Sublicensee as the case may be) under license from Chato". No trade
name other than one of Chato's Licensed Trademarks, as specified by
Chato, one of CETI's trade names, as specified by CETI, and one of
the trade names of a Sublicensee, if such item was manufactured or
distributed by a Sublicensee, may be affixed to any item of a
Licensed Application. Unless Chato and CETI specifically agree in
writing otherwise, the size of Chato's Licensed Trademarks and CETI's
trade names affixed to items of a Licensed Application must be at
least 100% of the size of the largest of any Sublicensee's trade
names or trademarks affixed to such items.
2.3.3 CETI will use, and cause the Licensed Trademarks to be used, in strict
compliance with all applicable laws and regulations.
2.3.4 CETI will conduct any advertising and promotion in which the Licensed
Trademarks are used in such a way as to ensure the continued validity and
enforceability of the Licensed Trademarks.
Patent and Trademark Applications
2.4 Except as provided for in this paragraph, no one other than Chato may
apply for or register any patent, trademark or other proprietary
intellectual property rights in any jurisdiction with respect to the
Mantle Technology, the Confidential Information or the Licensed
Applications. CETI, each Sublicensee and each Related Party will notify
Chato in writing at least 30 days before using a Patent, a Licensed
Trademark or the Confidential Information in any jurisdiction in which
such Patent, Licensed Trademark or the Confidential Information has not
previously been used by CETI, such Sublicensee or such Related Party.
CETI will, at the request of Chato, execute such documents as may be
appropriate for filing or recording in any jurisdiction evidence as to
the status of CETI or a Sublicensee as a licensee or registered user.
Chato will use its best efforts to apply for and register patent,
trademark or other proprietary intellectual property rights, or such
evidence as to the status of CETI or a Sublicensee in any jurisdiction
requested by CETI, but Chato's inability or failure to obtain such
registration or evidence will not be a breach of this Agreement. If Chato
fails to obtain any such registration or evidence CETI may, with the
prior written consent of Chato, attempt to obtain such registration or
evidence in the name of Chato. All costs and expenses of either Chato or
CETI in connection
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with such attempts (including without limitation reasonable legal
expenses) will be the responsibility of CETI. At the request of CETI,
either during or after the term of this Agreement, Chato will execute
such documents and render such assistance as may be appropriate to enable
CETI to obtain registration or evidence as to status in any jurisdiction.
Other than as set out in this paragraph, Chato has no obligation
whatsoever to apply for or register patents, trademarks, or other
proprietary intellectual rights in any jurisdiction in which such
patents, trademarks or rights are not registered as of the reference date
of this Agreement.
Superior Rights of Chato
2.5 CETI acknowledges that subject only to this exclusive License to CETI,
Chato is the owner of the Mantle Technology, the Confidential Information
and the Licensed Trademarks. CETI may not, during the term of this
Agreement or at any time after the termination of this Agreement (unless
CETI has exercised its option to purchase under Part 11), in any way
whatsoever dispute, object to or challenge, through proceedings or
otherwise, the validity of the Patents, or Chato's ownership of the
Mantle Technology, the Patents, the Confidential Information or the
Licensed Trademarks.
No Rights by Implication
2.6 No rights or licenses with respect to the Mantle Technology the Patents
or the Confidential Information, are granted or deemed granted to CETI
other than as expressly set out in paragraph 2.2 of this Agreement.
Without limiting the foregoing, no Sublicensee or Related Party has any
right whatsoever to conduct any research, development, modification,
alteration or improvement of the Mantle Technology, or any application of
it.
Quality Control
2.7 If CETI manufactures or assembles any items of Licensed Applications, it
covenants to use its best efforts to ensure that each such item:
(a) satisfies any and all applicable governmental laws and regulations;
(b) is constructed of materials of appropriate high quality; and
(c) is tested with due care before its use, operation or sale to any
third party.
Export Licenses
2.8 At the reasonable request of CETI, Chato will use its best efforts to
obtain any export and re-export authorizations or licenses, which CETI
may require from time to time, but its inability to obtain such
authorizations or licenses will not constitute a breach of this
Agreement. CETI is responsible for the costs and expenses of Chato in
obtaining any export and re-export authorizations and licenses. If Chato
is unable to obtain any such authorizations or licenses, CETI may, but is
not required to, attempt to obtain such authorizations or licenses
itself, in
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which case, Chato will assist and co-operate with CETI in this process.
3. REPORTS
Contents of Reports
3.1 CETI will deliver to Chato within 90 days of the end of each year, a
written report, certified by the chief operating officer of CETI as being
true and correct, describing, for the applicable year, all CETI's
initiatives, efforts, and results in pursuit of the Licensed Activities
during the year.
Right to Review
3.2 On seven days' prior notice to CETI, Chato and its agents may have full
access to the books and records of CETI pertaining to activities under
this Agreement, and may make copies of them at Chato's expense. Chato and
its agents may have such access at all reasonable times during normal
business hours throughout the term of this Agreement.
Information Confidential
3.4 Chato will keep confidential all information obtained in the course of
any examination of CETI's books and records, except when it is necessary
for Chato to reveal such information in order to enforce its rights under
this Agreement in court, arbitration or similar dispute resolution or
enforcement proceedings and except when compelled by law.
4. ROYALTY PAYMENTS
4.1 As consideration for the License, CETI will pay Chato an on going royalty
payment (the "Royalty") equal to 10% of the net profits of CETI derived
from these Licensed Activities (after reasonable allowance for bad debts
and the allocation of administrative and overhead items to these Licensed
Activities).
4.2 The Royalty is payable annually immediately following delivery of the
report referred to in paragraph 3.1.
5. SUBLICENSE CONDITIONS
Sublicense Right Limited
5.1. Chato grants to CETI the right to grant Sublicenses during the term of
this Agreement, but only with the prior written consent of Chato, such
consent not to be unreasonably withheld, and only if such Sublicense
complies in all respects with the provisions of this Part 5. The right of
CETI to grant a Sublicense shall exist only so long as CETI is in
compliance with the terms of this Agreement and is current in making
payments to Chato as required under it.
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Quality Control
5.2 CETI must include in each Sublicense a quality control provision
identical to paragraph 2.7, except that in such Sublicense, a reference
to CETI will instead refer to the relevant Sublicensee.
Sublicensee Bound by License
5.3 In each Sublicense, the Sublicensee must acknowledge that it is bound by
all CETI's obligations contained in this Agreement and that CETI's
rights, powers and remedies with respect to the Sublicensee are at least
as great as Chato's rights, powers and remedies with respect to CETI
contained in this Agreement, and CETI will cause each Sublicensee to
execute any and all additional documents reasonably requested by Chato to
that effect.
CETI's Obligations Continue
5.4 Notwithstanding any such Sublicense, CETI will remain responsible to
Chato for all CETI's obligations under this Agreement.
Termination of Sublicense
5.5.1 Upon the termination or expiry of this Agreement for any reason (other
than by the exercise by CETI of its option to purchase under Part 11)
each Sublicense will automatically terminate except that, for a 90 day
period following such termination, each Sublicensee may reinstate its
Sublicense, with Chato (or its assignee, as the case may be) taking the
place of CETI in such Sublicense. Such reinstatement will be effective
upon Chato receiving a written acknowledgment and agreement from the
relevant Sublicensee to the effect that:
(a) Chato is the assignee of CETI's rights under such Sublicense;
(b) all rights and remedies of CETI in effect on or before the effective
date of such reinstatement pursuant to such Sublicense are also
assigned to Chato; and
(c) the obligations of Chato (or its assignee, as the case may be) under
such reinstated Sublicense will under no circumstances be greater
than the obligations of Chato to CETI under this Agreement.
5.6 If CETI exercises its option to purchase the Mantle Technology under Part
11, each Sublicense which is in good standing at the time will
automatically continue as a license with CETI.
6. CONFIDENTIAL INFORMATION
6.1 CETI will maintain the confidentiality of the Confidential Information
during the term of this Agreement and for the period after termination or
expiry of this Agreement until such information has entered the public
domain.
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6.2 CETI will not disclose any Confidential Information to any of its
Personnel, to a Sublicensee, to a Related Party, or to any of their
Personnel, except to those specific Personnel to whom knowledge of the
Confidential Information is reasonably necessary to enable them to pursue
the Licensed Activities in accordance with this Agreement.
6.3 CETI will not disclose Confidential Information to a person other than
one identified in paragraph 6.2 unless it is necessary to do so in the
ordinary course of CETI's Licensed Activities and unless:
(a) such person has executed a confidentiality agreement (the
"Confidentiality Agreement") substantially in the form of Schedule
"B" attached to and made a part of this Agreement; or
(b) CETI has taken other steps acceptable to Chato, acting reasonably, to
ensure that such person will maintain the confidentiality of the
Confidential Information during the term of this Agreement and for
the period after termination or expiry of this Agreement during which
such information has not yet entered the public domain.
7. IMPROVEMENTS
Disclosure of Improvements
7.1 Chato, CETI, each Sublicensee and each Related Party will immediately
disclose to each other all improvements to the Mantle Technology, the
Licensed Applications or the Confidential Information. Nothing contained
in this paragraph will by implication or otherwise sanction the conduct
by CETI, any Sublicensee or any Related Party of those activities
expressly prohibited by the terms of paragraph 2.6 of this Agreement.
Improvements Included in License
7.2 Improvements to the Mantle Technology, the Licensed Applications or to
the Confidential Information made by Chato, CETI, any Sublicensee or any
Related Party will be the exclusive property of Chato, and as such, will
be deemed part of this License, and may be used by CETI in connection
with the Licensed Activities, subject to the terms and conditions of this
Agreement. No party will be entitled to additional monetary consideration
(beyond compensation already set forth in this Agreement) from any other
party for the use of such improvements in the pursuit of the Licensed
Activities and no party will disclose such improvements to third parties
without first obtaining from such third parties obligations substantially
the same as those set forth in Part 6 CONFIDENTIAL INFORMATION.
Improvements to be Assigned to Chato
7.3 In the case of improvements made to the Licensed Applications or to the
Confidential Information by CETI, any Sublicensee, any Related Party or
their Personnel, during the term of
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this Agreement, CETI will immediately take all steps and cause any
Sublicensee, Related Party or their Personnel to take all steps as are
reasonably required by Chato to transfer title and ownership of such
improvements to Chato. Chato alone has the right to apply for and obtain
the appropriate patents or other proprietary registrations in respect of
such improvements. Chato hereby appoints CETI as its sole agent and Power
of Attorney for the purpose of pursuing such applications and
registrations on behalf of Chato, and Chato will assist and co-operate
with CETI in this process. Any patents so obtained will be deemed
included in the License and the Mantle Technology Option, and will be
subject to the terms and conditions of this Agreement.
8. PROTECTION OF PATENTS & TRADEMARKS
Detect and Report Patent Infringements
8.1 CETI will keep watch to detect any possible infringements or other
unauthorized use of any of the Patents or Licenced Trademarks. Upon
discovery of a possible infringement or other unauthorized use, CETI will
immediately notify Chato.
8.2 Patent and Trademark Infringements
8.2.1 During the term of this License, Chato will, at the expense of CETI, be
solely responsible for taking all actions, legal or otherwise, which, in
the judgment of Chato are reasonably necessary to protect or enforce any
of the Patents or Licenced Trademarks. CETI will be solely responsible
for paying any award of court costs or damages resulting from such
actions. The selection and conduct of such actions will be at the sole
discretion of Chato. CETI will cooperate with Chato and not interfere in
any way with Chato in respect of the conduct of such actions.
8.2.2 If Chato does not take action to protect or enforce a Patent or Licensed
Trademark within 120 days after receiving notice from CETI of a possible
infringement or other unauthorized use, then CETI may itself commence an
action to protect or enforce the Patent or Licensed Trademark. Chato will
have the right to be kept informed of the status and progress of any such
action instituted by CETI.
8.2.3 Any recoveries, awards or settlements by Chato resulting from efforts to
protect or enforce any of the Patents or Licensed Trademarks, after the
deduction of any costs or expenses incurred by Chato, will be paid to
CETI.
Patent or Trademark Validity Defences
8.3 As between Chato and CETI, Chato will have the sole responsibility for
defending, at the expense of CETI, all legal actions asserting the
invalidity of any of the Patents or Licensed Trademarks. Chato will
conduct such defence, and CETI will cooperate with and not interfere with
Chato's defence of such actions. CETI will be solely responsible for any
award of court costs and damages resulting from such a defence. If Chato
does not defend against any such action (including appropriate appeals),
CETI may defend against such an action and Chato will
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have the right to be kept informed of the status and progress of each
such defence by CETI.
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CETI Name in Suit
8.4 Where, in the judgment of either Chato or CETI, as the case may be, it is
necessary to join the other as a party in order to effectively prosecute
or defend an action asserting infringement or invalidity of any of the
Patents or Licensed Trademarks, each party will allow the other to so
join such other party as a party to the action.
Notification of Suit
8.5 Each Party will immediately notify the other of any suit or action
wherein such party or any Sublicensee or Related Party is named as a
party and which directly or indirectly relates to the use of the Patents,
the Licensed Trademarks, the Licensed Applications or the Licensed
Activities.
Detect and Report Breach of Confidential Information
8.6 Each party will keep watch to detect any possible unauthorized
disclosures or use of the Confidential Information and will immediately
notify the other party of any such possible unauthorized disclosures or
uses.
Action Against Confidential Information Breaches
8.7 If any unauthorized disclosure or use of Confidential Information has not
ceased within a reasonable period, not to exceed 15 days, after written
notice given by either Chato or CETI which demands that the relevant
person or entity terminate such unauthorized disclosure or use, then
Chato may, and at CETI's request will, at CETI's expense, immediately
bring legal action to enjoin and seek damages for such unauthorized
disclosure or use, and CETI will become a party to such action if, in the
judgment of Chato, it is necessary or advisable; but if Chato has not
commenced any such action within 30 days after either Chato or CETI has
given notice demanding termination, then CETI may do so upon written
notice to Chato. Chato will conduct such action and CETI will cooperate
with Chato in such action. CETI will bear the costs of such action as
well as any award of court costs and damages resulting from such action.
Any recoveries, awards, or settlements resulting from actions taken
against parties making unauthorized disclosures or uses will be paid to
CETI after deduction of any costs or expenses incurred by Chato.
Requests for Payment
8.8 All amounts payable by CETI to Chato pursuant to this Article 8 will be
payable immediately after Chato makes a written request and provides CETI
with a written summary of the amounts outstanding, together with such
supporting documentation as may be reasonably requested by CETI.
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9. INDEMNITY BY CETI AND SUBLICENSEES
Indemnity
9.1 CETI will indemnify and hold Chato harmless from and against any and all
claims, injuries, liabilities, costs and expenses resulting from, or
claimed to have resulted from, any Licensed Activity or the use or
operation of the Licensed Applications by CETI, any Sublicensee, any
Related Party or any Unrelated Party (whether based on negligence, strict
liability or other grounds) and against claims for consequential damages
and/or lost profits arising from such Licensed Activity or the use or
operation of Licensed Applications. CETI will maintain insurance with
reputable insurance companies approved by Chato (such approval not to be
unreasonably withheld) for such risks and in such amounts as Chato in its
reasonable business judgment determines to be appropriate. Chato will be
named as an additional insured and loss payee on each such insurance
policy.
Sublicensee Indemnity
9.2 CETI will cause each Sublicensee to indemnify and hold Chato harmless
from and against any and all claims, damages, injuries, liabilities,
costs and expenses incurred by Chato resulting from a claim in respect
of:
(a) a design or manufacturing defect in any item of Licensed Applications
manufactured by such Sublicensee or by any sublicensee of such
Sublicensee (whether characterized as product liability, negligence,
strict liability, breach of warranty or otherwise) or
(b) any other cause which was under the control of such Sublicensee or
any sublicensee of such Sublicensee during the manufacture of any
item of Licensed Applications. CETI will cause Sublicensees to be
solely responsible for all costs and expenses of Chato in respect of
all such actions brought against Chato. No Sublicensee will
compromise or settle any such claim or action against it without the
prior written consent of Chato and any such attempted compromise or
settlement will be void and of no effect whatsoever as against Chato.
9.2.1 Each Sublicensee indemnifying Chato pursuant to this paragraph 9.2 will:
(a) maintain insurance with reputable insurance companies approved by
Chato (such approval not to be unreasonably withheld) for such risks,
and in such amounts as Chato in its reasonable business judgment
determines to be appropriate, with such polices naming Chato and CETI
as additional insured and loss payees; and
(b) at the reasonable request of either Chato or CETI, pay premiums on
insurance policies identified by Chato or CETI which insure Chato or
CETI against adverse final monetary judgment awards in excess of the
insurance coverage provided by such Sublicensee pursuant to part (i)
of this sub-paragraph.
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10. TERMINATION AND EXPIRY
Automatic Expiry
10.1 Unless it is terminated on an earlier date pursuant to this Part 10 or by
the exercise by CETI of its option under Part 11, this Agreement will
continue in full force and effect until it automatically expires at the
end of the Term.
Early Termination
10.2 If 818879 Alberta Ltd. terminates the PBC Burner Technology License which
it granted to CETI on March 5, 1999, and if CETI does not exercise its
concurrent right to purchase the PBC Burner Technology, then at Chato's
option, this Agreement will terminate concurrently with the termination
of the PBC Burner Technology License, and all CETI's rights under this
Agreement will be at an end.
Defaults - Insolvency
10.3 This Agreement will terminate at any time at Chato's option if CETI:
(a) defaults in a Royalty payment due to Chato;
(b) becomes bankrupt or insolvent, is threatened with bankruptcy or
insolvency, or makes an assignment in favour of creditors.
Payment Obligations Continue
10.4 Termination of this Agreement for any reason does not release CETI from
any of its obligations or liabilities to Chato under this Agreement
including, without limitation, its obligations to pay Chato any amounts
accrued but unpaid before the date of such termination.
CETI will Cease Licensed Activities
10.5 Upon termination of this Agreement for any reason, and except (i) as
permitted under paragraph 10.6, or (ii) if CETI acquires the Mantle
Technology under Part 11, CETI will immediately cease to pursue any
Licensed Activities in respect of the Licensed Applications and will
immediately cease to use the Confidential Information and Licensed
Trademarks in any manner whatsoever.
Completion Period
10.6 Notwithstanding paragraph 10.5, CETI may, during the nine month period
immediately following termination of this Agreement, complete uses or
operations in progress, finish items of Licensed Applications then in the
process of being manufactured and liquidate its inventory, all in
accordance with the terms and conditions of this Agreement.
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Adverse Judgment not Default
10.7 Chato may not terminate this Agreement by reason only of an adverse
judgment in favour of a third party in respect of an infringement or
unfair competition action involving the use of the Licensed Trademarks.
11. OPTION
11.1 If CETI acquires title to the PBC Technology under its rights in either
part 9 or part 10 of its license from 818879 Alberta Inc. in respect of
the PBC Technology, then on the same date, CETI has the option under this
Agreement (the "Mantle Technology Option") to purchase from Chato all his
right, title and interest in and to the Mantle Technology, the
Confidential Information, the Patents, all Licensed Trademarks and the
Ancillary Assets for Cdn $1.00; in such event CETI will continue to pay
the Royalty to Chato or to his designated assigns in perpetuity.
12. GOVERNING LAW
12.1 This Agreement will be governed by and construed in accordance with the
laws of the Province of British Columbia, Canada. The parties irrevocably
attorn to the jurisdiction of the Supreme Court of British Columbia,
Canada, Vancouver Registry, for the purposes of all litigation in respect
of or arising out of the terms of this Agreement.
13. ASSIGNMENT
Assignment by Chato
13.1 Chato may freely assign its right to receive the Royalty under this
Agreement, but he may not sell, assign or otherwise dispose of his other
rights under this Agreement except with the prior written consent of
CETI, which consent may not be unreasonably withheld. Any such assignment
will be subject to CETI's rights to acquire the Mantle Technology under
Part 11.
Assignment by CETI Restricted
13.2 CETI may not assign any of its rights under this Agreement except with
the prior written consent of Chato, which consent may be arbitrarily
withheld
14. MISCELLANEOUS
Waiver
14.1 A waiver of any breach of any provision of this Agreement will not be
construed as a
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continuing waiver of other breaches of the same or other provisions of
this Agreement.
No Other Relationship
14.2 Nothing in this Agreement will be deemed to create an agency, joint
venture, partnership or franchise relationship between the parties.
Notices
14.3 Any notice required or permitted to be given or sent under this Agreement
will be given by hand delivery or by registered or recorded air mail post
to the receiving party at the address appearing on the first page. Either
party may change its address for receiving notices under this Agreement
by giving the other party written notice of its new address. Any such
notice if given or made by registered or recorded delivery air mail post
will be deemed to have been received on the earlier of the date actually
received and the date ten days after the same was posted (and in proving
such it will be sufficient to prove that the envelope containing the same
was properly addressed and posted as aforesaid) and if given or made by
hand delivery will be deemed to have been received at the time of actual
delivery, unless such date is not a Business Day, in which case the date
of delivery will be deemed to be the next succeeding Business Day after
actual delivery.
Entire Understanding; Prior Agreements to be Replaced
14.4 This Agreement embodies the entire agreement between the parties relating
to the subject matter hereof and replaces any prior representations,
warranties or agreements of any kind between the parties.
Severability
14.5 If any term or provision of this Agreement or the application thereof to
any person or circumstance is, to any extent, determined to be invalid,
illegal or unenforceable by a court of competent jurisdiction, then, and
in that event:
(a) the performance of the offending term or provision (but only to the
extent its application is invalid, illegal or unenforceable) shall be
excused as if it had never been incorporated into this Agreement,
and, in lieu of such excused provision, there shall be added a
provision as similar in terms and amount to such excused provision as
may be possible and be legal, valid and enforceable; and
(b) the remaining part of this Agreement (including the application of
the offending term or provision to persons or circumstances other
than those as to which it is held invalid, illegal or unenforceable)
shall not be affected thereby, and shall continue in full force and
effect to the fullest extend provided by law.
Amendments
14.6 All amendments to this Agreement must be in writing and signed by both
parties.
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Rights, Powers, Remedies Cumulative; Waiver
14.7 Each and every right and remedy in this Agreement specifically given to
Chato will be cumulative and will be in addition to every other right and
remedy herein or now or hereafter existing at law, in equity, or by
statute, and each and every right, and remedy, whether specifically given
in this Agreement or otherwise existing may be exercised from time to
time and as often and in such order as may be deemed expedient by Chato,
and the exercise at the same time or thereafter any other right or
remedy. It is expressly understood and agreed by CETI that time is of the
essence of the Agreement and that no delay or omission by Chato in the
exercise of any right or power or in the pursuit of any remedy accruing
upon any ground for termination hereunder will impair any such right,
power or remedy or be construed to be a waiver thereof or of any such
ground for termination or to be an acquiescence therein, nor will the
acceptance by Chato of any payment be deemed a waiver of any right to
take advantage of any future ground for termination or of any past ground
for termination not completely cured thereby.
Headings
14.8 The headings contained in this Agreement, do not constitute a part of
this Agreement, and may not be employed in interpreting this Agreement.
Cooperation
14.9 Each party agrees, without further consideration, to cooperate and
diligently perform any further acts, deeds and things, and to execute and
deliver any documents that may be reasonably necessary or otherwise
reasonably required to consummate, evidence, confirm and/or carry out the
intent and provisions of this Agreement, all without undue delay or
expense.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the reference dates appearing on the first page.
Executed by ▇▇▇▇ ▇. ▇▇▇▇▇ in the )
presence of: )
) /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------- ) -----------------------------
Witness ) ▇▇▇▇ ▇. ▇▇▇▇▇
)
Executed by CLEAN ENERGY
TECHNOLOGY INC. by
/s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
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▇▇▇▇▇ ▇▇▇▇▇▇▇ A:\Chato lic agmt
Dated for Reference March 5, 1999
-------------------------------------------------------
BETWEEN:
▇▇▇▇ ▇. ▇▇▇▇▇
AND:
CLEAN ENERGY TECHNOLOGIES INC.
----------------------------------------------------
MANTLE TECHNOLOGY LICENSE
&
MANTLE TECHNOLOGY OPTION
----------------------------------------------------
SCHEDULE "A"
MANTLE TECHNOLOGY PATENTS
SERIAL PATENT DATE OF
DESCRIPTION JURISDICTION NUMBER NUMBER ISSUE
Improvements in
Diesel Burners United States 60/095,238 Provisional, filed 8/4/98
SCHEDULE "B"
CONFIDENTIALITY AGREEMENT
This Agreement dated for reference
-----------------------
BETWEEN:
CLEAN ENERGY TECHNOLOGY INC., a Delaware, U.S.A,
corporation having its head office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇
("CETI")
OF THE FIRST PART
AND:
------------------------------
("the Recipient")
OF THE SECOND PART
WHEREAS:
A. CETI is in possession of certain confidential information relating to a new
pulse blade technology and has the exclusive license to pursue certain
licensed activities utilizing such confidential information.
B. CETI is about to enter into a [sublicense/employment/consulting] agreement
(the "Agreement") with the Recipient; and to enable the Recipient to
properly carry out the terms of the Agreement, it will be necessary for
CETI to disclose some or all of such confidential information to the
Recipient;
C. The parties have agreed to enter into this Confidentiality Agreement to
ensure that any such confidential information which is discovered by,
disclosed to, or otherwise made available to the Recipient by CETI or by
any of its agents or employees during the term of the Agreement will be
used by the Recipient only for the purposes of the Agreement and will at
all times be protected by the Recipient in accordance with the terms and
conditions of this Confidentiality Agreement.
NOW THEREFORE in consideration of the payment to the Recipient of $1.00, the
Agreement, and other good and valuable consideration given by CETI to the
Recipient, the Recipient covenants and agrees with CETI as follows:
1. The term "Confidential Information" as used in this Confidentiality
Agreement means: all trade secrets, know-how, proprietary knowledge,
technology, improvements and other information of every nature and kind
whatsoever, relating in any way to the Mantle Technology, whether
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disclosed to the Recipient or discovered by the Recipient as a consequence
of or through the Agreement, including information conceived, originated
discovered or developed CETI which is not at the time in question lawfully
in the public domain. The term " Confidential Information" also includes
all trade secrets and all discoveries, concepts and ideas, whether
patentable or not, relating to any present or prospective activities CETI,
and any information relating to the administration, financing, personnel or
business of CETI, or any other information which the Recipient becomes
acquainted with or responsible for as a result of or in consequence of CETI
disclosing information to the Recipient, and any ongoing association
between CETI and the Recipient.
2. All Confidential Information discovered by, disclosed to, or otherwise made
available to the Recipient pursuant to the Agreement will be maintained in
secrecy by the Recipient, using the same safeguards as are customarily used
to protect commercially confidential information of a similar character,
but at least using reasonable care, and, except for the purposes of the
Agreement, the Recipient will not use, in any manner, or disclose to any
third party, the Confidential Information, without the prior written
consent of CETI.
3. The Recipient acknowledges that the Confidential Information is the
property of CETI, and the Recipient will not assert any rights under any
inventions, discoveries, concepts, ideas, improvements, know-how, or
related know-how disclosed by CETI, as having been made or acquired by the
Recipient before being associated with CETI or since then and not otherwise
covered by the terms of this Confidentiality Agreement.
4. Nothing in this Confidentiality Agreement will be construed as granting to
the Recipient either expressly, or by implication, estoppel or otherwise,
any licence or right to use the Confidential Information or any other
proprietary information of any kind received from CETI (except the limited
right to use such information for the purposes of the Agreement).
5. All information furnished by CETI pursuant to the Agreement, including
records, notebooks, designs, specifications, prototypes, and electronic
data storage media will be returned by the Recipient on demand and the
Recipient will thereupon certify to CETI that the Recipient has destroyed
all copies and excerpts therefrom.
6. If it is necessary and expressly authorized under the terms of the
Agreement for the Recipient to give access to any Confidential Information
to any other person, the Recipient will restrict such access to those
persons needing to have such information for the purposes of the Agreement,
and will inform and instruct such persons as to the restrictions applicable
to such information, and specifically, as to the terms of this
Confidentiality Agreement.
7. This Confidentiality Agreement must be signed by the Recipient before or
concurrently with the Agreement, and will be effective immediately upon
being signed. It applies to all Confidential Information disclosed by CETI
or discovered by the Recipient as a consequence of the Agreement. When
the Agreement is completed or is otherwise earlier terminated by either of
the parties for any reason, the provisions of this Confidentiality
Agreement will survive the Agreement.
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8. The Recipient recognizes that CETI has expended substantial funds and
effort in the development of the Confidential Information, and agrees not
to engage in competition with CETI using any Confidential Information
obtained during the term of the Agreement.
9. The Recipient hereby acknowledges to and covenants and agrees with CETI
that a breach by the Recipient of any covenants under this Confidentiality
Agreement may result in damages to CETI, and that a monetary award would
not adequately compensate for such damages. Accordingly, the Recipient
hereby agrees with CETI that in the event of any such breach, in addition
to all other remedies available at law or in equity, CETI will be entitled
as a matter of right to apply to court of competent jurisdiction for
equitable relief by way of restraining order, injunction, decree or
otherwise as may be appropriate to ensure compliance by the Recipient with
the provisions of this Confidentiality Agreement.
10. This Confidentiality Agreement will be governed by and construed in
accordance with the laws of the Province of British Columbia, Canada.
11. The obligations of each of the parties under this Confidentiality Agreement
are to be binding upon their successors, associates, affiliates, and
subsidiaries.
12. The benefits under this Confidentiality Agreement will accrue to and enure
to the benefit of the successors, affiliates and permitted assigns of the
parties.
13. All references to the Recipient, or to CETI will include all subsidiaries,
employees, consultants, agents, directors, and officers of them.
IN WITNESS WHEREOF the parties hereto have executed this Agreement on the
dates appearing below.
Executed by CLEAN ENERGY )
TECHNOLOGY INC. in the presence of:)
)
------------------------------- ) -----------------------------
Authorized Signatory ) Date
)
------------------------------- )
Authorized Signatory )
Executed by the Recipient in the )
presence of: )
)
------------------------------- ) -----------------------------
Authorized Signatory ) Date
)
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------------------------------- ) -----------------------------
Authorized Signatory ) A:\Chato lic agmt