THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
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Exhibit 10.12
COLLABORATIVE COMMERCIALIZATION AND LICENSE AGREEMENT
among
CATALYTICA COMBUSTION SYSTEMS, INC.,
and
GENXON POWER SYSTEMS, LLC.,
and
GENERAL ELECTRIC COMPANY,
dated as of November 19, 1998
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
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COLLABORATIVE COMMERCIALIZATION AND LICENSE AGREEMENT
THIS COLLABORATIVE COMMERCIALIZATION AND LICENSE AGREEMENT dated as of November
19, 1998 (this "Agreement"), is entered into among CATALYTICA COMBUSTION
SYSTEMS, INC., a Delaware corporation ("CCSI"), having a place of business
located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, including its
affiliate, GENXON POWER SYSTEMS LLC., a Delaware limited liability company
("GPS"), also with offices at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, and GENERAL ELECTRIC COMPANY, a New York corporation ("GE"), having a
place of business located at ▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, CCSI has developed expertise and technology directed to its proprietary
XONON(TM) Combustion System in the field of catalytic combustion; and
WHEREAS, GE manufactures and sells heavy duty industrial gas turbines, and has
developed technology relating thereto; and
WHEREAS, CCSI and GE desire to design, develop and commercialize heavy duty
industrial gas turbine components employing catalytic combustion through the use
of various elements of the XONON Combustion System; and
WHEREAS, in addition to collaborating in the development and commercialization
of such components, GE, with CCSI's cooperation and assistance, will lead an
effort to obtain funding for such development and commercialization, in exchange
for certain considerations as more particularly described in this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained in this Agreement, CCSI, GPS and GE hereby agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the terms defined in this Article 1 shall have
the respective meanings set forth below:
1.1. "Additional Period" shall mean the time period commencing upon the date
of expiration or earlier termination of the Incentive Term relating to
Gas Turbines (as
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such Incentive Term may be modified pursuant to Sections 7.3, 7.4, 7.5
or 6.2.2 below), and ending on the fifth (5th) anniversary of such
expiration date.
1.2. "Affiliate" shall mean, with respect to any Person, any other Person
which directly or indirectly controls, is controlled by, or is under
common control with, such Person. A Person shall be regarded as in
control of another Person if it owns, or directly or indirectly
controls, at least fifty percent (50%) of the voting stock or other
ownership interest of the other Person, or if it directly or indirectly
possesses the power to direct or cause the direction of the management
and policies of the other Person by any means whatsoever.
1.3. "Background" shall mean, with respect to Patents, Technical Information
and Technology, that as to which a party has acquired or acquires prior
to the Effective Date or otherwise not (i) in connection with its work
under this Agreement, or (ii) from the other party.
1.4. [*]
1.5. "CCSI" shall mean Catalytica Combustion Systems, Inc. and/or its
affiliate, GENXON Power Systems, LLC.
1.6. "CCSI Technology" shall mean all Technology relating to the XONON
Combustion System, including Background and Commercialization Program
Technology which is now or hereafter may be owned by CCSI and/or
possessed by CCSI with rights to sublicense.
1.7. "Commercialization" shall mean the offering to sell, and/or the actual
sale, of an item.
1.8. "Commercialization Phase" shall mean the second phase of the
Commercialization Program, during which the parties shall pursue
Commercialization of the Products, as more particularly described in
Article 7 below.
1.9. "Commercialization Plan" shall mean a plan in accordance with the
outline attached to this Agreement as Exhibit B for the
Commercialization of the Products during the Commercialization Phase,
including estimated funding amounts and dates for certain milestones,
as such plan may be modified pursuant to the provisions of Section
5.1.3 below.
1.10. "Commercialization Program" shall mean the collaborative program of
research, development and Commercialization, to develop and adapt the
XONON Combustion System and/or XONON Modules to Gas Turbines, and to
supply GE
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with XONON Combustion System units and/or XONON Modules, for
incorporation into Gas Turbines to be sold to GE's customers, all as
more particularly described in the Development Workplan and the
Commercialization Plan. The Commercialization Program shall be divided
into a Technology Development Phase and a Commercialization Phase.
1.11. "Commercialization Program Technology" shall mean Technology conceived
during the Commercialization Program.
1.12. "Development Costs" shall mean the costs to GE or CCSI of performing
its development obligations during the Technology Development Phase in
accordance with the Development Workplan, including without limitation
all costs of direct labor and benefits, raw materials, overhead, and
all other direct and indirect costs, fees and out-of-pocket and other
expenses incurred, paid or accrued by GE or CCSI, all as determined in
accordance with generally accepted accounting principles, consistent
with such party's internal cost accounting practices, allocated on a
reasonable and consistent basis and charged for the performance of such
activities.
1.13. "Development Funds" shall mean any and all amounts raised by the
parties under Section 4.1 below or expended by GE under Section 4.2
below, for the purpose of funding Development Costs.
1.14. "Development Workplan" shall mean the detailed work plan for the
technological development of the Products during the Technology
Development Phase, which shall be (i) based on the Program Schedule and
Milestones attached as Exhibit A, and (ii) agreed upon by the parties
on or before December 15, 1998 and modified or updated by the parties
on at least an annual basis by mutual agreement on or before December
15th preceding the year in question.
1.15. "Effective Date" shall mean the date of this Agreement as first set
forth above.
1.16. "Executive Committee" shall mean the joint committee composed of one
representative of GE and one representative of CCSI as described in
Section 5.2 below.
1.17. "Gas Turbine(s)" shall mean the heavy duty industrial gas turbines
rated at greater than or equal to 70MW, both new and retrofit (that is,
installed).
1.18. "GE" shall mean General Electric Company acting through its GE Power
Systems business, including its Affiliates.
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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
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1.19. "GE Components" shall mean the fuel/air mixer package, the preburner
and other elements (excluding the XONON Module) supplied by GE that
have performance acceptable to operate with the XONON Module and
equivalent to performance offered by XONON Components.
1.20. "Incentive Term" shall mean (a) with respect to the Commercialization
of the Products in the 7E Market Segment and the 7F Market Segment, the
period commencing on the Effective Date and ending on December 31, [*],
subject to modification as provided in Sections 7.3, 7.4, 7.5 and 6.2.2
below, and (b) with respect to the Commercialization of the Products in
the [*] Market Segment, the period commencing on the Effective Date and
ending on December 31, [*].
1.21. "Initial Term" shall mean the period commencing on the Effective Date
and ending with either the first Gas Turbine test, or upon the first
anniversary of the Effective Date, whichever occurs first.
1.22. "Management Committee" shall mean the joint committee composed of two
representatives of GE and two representatives of CCSI as described in
Section 5.1 below.
1.23. "Market Segments" shall mean all, and "Market Segment" shall mean any
one of, the following: the 7E Market Segment, the 7F Market Segment,
and the [*] Market Segment.
1.24. "Maximum GE Required Expenditure" shall mean, for each Market Segment,
the maximum dollar amount that GE shall be required to expend under
Section 4.2 for the funding of the Technology Development Phase due to
a failure of the parties to raise sufficient funds from Third Parties
with respect to such Market Segment.
1.25. "Patents" shall mean patents (including patents of importation, patents
of confirmation, patents of improvements, patents and certificates of
addition and utility models, as well as divisions, reissues,
continuations, continuations-in-part, renewals and extensions of any of
the foregoing) and applications therefore, and patents which may be
issued on such applications covering inventions with respect to which
the first application for patent anywhere was filed prior to the date
of any termination of the Agreement.
1.26. "Person" shall mean an individual, corporation, partnership, trust,
business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically
listed herein.
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
1.27. "Pre-Commercial Activities" shall mean activities with a Person
regarding an item, where such activity does not involve the sale or
field testing of the item.
1.28. "Products" shall mean the XONON Module, the XONON Components, and/or
the XONON Combustion System.
1.29. "Program Schedule and Milestones" shall mean the schedule for the
development milestones (GE "Tollgates")leading up to and including the
first gas turbine firing date at a customer site for each Market
Segment as set forth in Exhibit A which is attached to this Agreement.
1.30. "7E Market Segment" shall mean the worldwide market for the Products
for GE Frame 7E Gas Turbines.
1.31. "7F Market Segment" shall mean the worldwide market for the Products
for GE Frame 7F Gas Turbines.
1.32. [*]
1.33. "[*] Market Segment" shall mean the worldwide market for the Products
where the Products will be incorporated into a gas turbine (including,
but not limited to, GE's Frame 7E and Frame 7F Gas Turbines) utilized
in the [*]
1.34. [*]
1.35. "Target Funding Amount" shall mean, for each Market Segment, the amount
that the parties must raise, either from Third Parties or expended by
GE (totaling up to the Maximum GE Required Expenditure), in order to
fund the Technology Development Phase expenses with respect to such
Market Segment, as estimated in the Yearly Development Budgets for each
Market Segment.
1.36. "Technical Information" shall mean all technical information, know-how,
manufacturing techniques, software and other copyrightable works,
engineering and other data, drawings, material and process
specifications, whether patented or unpatented, whether in written,
printed, oral or other form, relating to, in the case of GE, heavy duty
industrial gas turbines, and, in the case of CCSI, the XONON Combustion
System.
1.37. "Technology" shall mean Patents and Technical Information.
1.38. "Technology Development Phase" shall mean the first phase of the
Commercialization Program, during which the parties shall cooperate
in the
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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
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development of the Products in accordance with the Development
Workplan, as more particularly described in Article 3 below.
1.39. "Third Party" shall mean any Person other than CCSI, GE and their
respective Affiliates.
1.40. "Yearly Development Budget(s)" shall mean the budgets prepared by the
Management Committee and approved by the parties, concurrent with the
Development Workplan or updates thereof, pursuant to the provisions of
Section 3.1.1 below for each year during the term of the Technology
Development Phase, as the same may be modified pursuant to the
provisions of Section 5.1.3 below. The Yearly Development Budgets shall
be approved on or before each December 15 for the following year
(except that the Yearly Development Budget for calendar year 1999 shall
include any expenditures during 1998).
1.41. "XONON Combustion System" shall mean the XONON Module and XONON
Components.
1.42. "XONON Components" shall mean the fuel/air mixer package, the
preburner, and other elements supplied by CCSI to be agreed upon by the
Parties, such as combustor hardware components, which are necessary
combustion system modifications to enable optimum operation of the
XONON Module.
1.43. "XONON Control Algorithm(s)" shall mean the logic developed by or on
behalf of CCSI (outside of the scope of work done pursuant to the
Agreement) as of the Effective Date hereof to provide necessary control
of the start up, operation, management and protection of the XONON
Combustion System or XONON Module in a Gas Turbine.
1.44. "XONON Module" shall mean the CCSI catalyst structure as used in Gas
Turbines, including its container and supporting structure for fixing
the catalyst structure in the container, and replacement XONON Modules.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties. Each party hereby represents and
warrants to the other Party except to the extent that a deviation from
a representation or warranty would not have a material adverse effect
on the properties, business, financial, technological or other
condition of such party and would not materially adversely affect
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such party's ability to perform its obligations under this Agreement,
as follows:
2.1.1 Corporate Existence and Power. Such party (a) is a
corporation duly organized, validly existing and in good
standing under the laws of the state in which it is
incorporated; (b) has the corporate power and authority and
the legal right to own and operate its property and assets, to
lease the property and assets it operates under lease, and to
carry on its business as it is now being conducted and (c) is
in compliance with all requirements of applicable law.
2.1.2 Authorization and Enforcement of Obligations. Such party
(a) has the corporate power and authority and the legal right
to enter into this Agreement and to perform its obligations
hereunder and (b) has taken all necessary corporate action on
its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder.
This Agreement has been duly executed and delivered on behalf
of such party, and constitutes a legal, valid, binding
obligation, enforceable against such party in accordance with
its terms.
2.1.3 Consents. All necessary consents, approvals and
authorizations of all governmental authorities and other
Persons required to be obtained by such party in connection
with this Agreement have been obtained.
2.1.4 No Conflict. The execution and delivery of this Agreement
and the performance of such party's obligations hereunder (a)
do not conflict with or violate any requirement of applicable
laws or regulations and (b) do not conflict with, or
constitute a default under, any contractual obligation of such
party.
2.2. Representations and Warranties of CCSI. CCSI hereby represents
and warrants to GE, as of the Effective Date, except to the
extent that a deviation from a representation or warranty
would not materially adversely affect either party's ability
to perform its obligations under this Agreement, as follows:
2.2.1 CCSI is the owner or co-owner of record of all patents,
copyrights, trademarks, service marks, logos, slogans, and
trade names (collectively, "Intellectual Property") for which
registrations have been issued to CCSI by the United States
Patent and Trademark Office or any similar office of a foreign
country with respect to the CCSI Intellectual Property.
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2.2.2 CCSI (i) owns on an exclusive basis, or has the exclusive
right to use, all of the Products and the Technology relating
to the Products necessary to perform its obligations under
this Agreement, and (ii) has the exclusive right to sell and
commercialize, and license the sale and commercialization of,
the Products to the extent required to perform its obligations
under this Agreement, in each case without any limitations or
restrictions of any kind, and without known conflict or
asserted conflict with intellectual property rights of others.
2.2.3 Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated by this
Agreement will conflict in any way with, result in a breach
of, constitute a default under, or create in any party the
right to terminate, modify or cancel any agreement, contract,
license, instrument or other arrangement relating to the CCSI
Intellectual Property.
2.2.4 CCSI has sufficient rights under the CCSI Intellectual
Property to permit CCSI to perform its obligations under the
Agreement.
2.2.5 CCSI has not given or received any notice of any pending
conflict with, or infringement of, the rights of others with
respect to any CCSI Intellectual Property or with respect to
any license of CCSI Intellectual Property under which CCSI is
licensor or licensee.
2.2.6 There are no pending causes of action, claims, actions,
suits, judgments, orders, decrees, rulings, charges, hearings
or investigations involving CCSI or the CCSI Intellectual
Property (collectively, "Legal Proceedings") or threatened
Legal Proceedings of, in, or before any court or quasi-
judicial or administrative agency of any federal, state,
local, or foreign jurisdiction or any arbitrator which could
impair CCSI's ability to perform its obligations under this
Agreement. There are no interference, opposition or
cancellation proceedings or infringement suits pending, or to
the knowledge of CCSI, threatened with respect to the CCSI
Intellectual Property. CCSI is not subject to any judgment,
order, writ, injunction or decree of any governmental
authority, and has not entered into or become a party to any
contract, which restricts or impairs its use of the CCSI
Intellectual Property or right to sell or commercialize, and
license the sale and commercialization of, the Products, as
contemplate by the Agreement.
2.2.7 CCSI has not entered into any consent or settlement
agreement with respect to any CCSI Intellectual Property and
no claim has been asserted and, to
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CCSI's knowledge, no claim is threatened or contemplated by
any person with respect to the validity of, or CCSI' s
ownership of or right to use, the CCSI Intellectual Property,
or any of the Patents relating to the CCSI Intellectual
Property.
2.2.8 CCSI has complied with its contractual obligations relating
to the protection of the CCSI Intellectual Property used
pursuant to licenses whereby CCSI has licensed CCSI
Intellectual Property or portions thereof to or from Third
Parties.
2.2.9 None of the licenses or other rights granted by, contemplated
to be granted by, or claimed to have been granted by CCSI to
any person or entity conflict in any way with the licenses and
other rights granted by CCSI to GE under the terms of this
Agreement and the performance by CCSI of the transactions
contemplated by this Agreement.
2.2.10 CCSI has delivered to its legal counsel, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ ("CCSI Counsel"), true and correct copies of
all the agreements of CCSI which relate to the CCSI
Intellectual Property, and redacted versions of such
agreements are attached as exhibits to the copy of CCSI
Counsel's legal opinion of even date herewith delivered to
counsel for GE (provided that such redacted versions shall not
be delivered to GE).
2.2.11 Upon execution, this Agreement will be enforceable against
CCSI in accordance with its terms.
ARTICLE 3
COMMERCIALIZATION PROGRAM
3.1. Technology Development Phase. The first phase of the Commercialization
Program shall be the Technology Development Phase, during which GE and
CCSI will pursue the technological development of the Products so as to
enable their Commercialization. GE and CCSI will conduct their
respective development efforts in accordance with the Program Schedule
and Milestones attached hereto as Exhibit A, the Development Workplan
and the Yearly Development Budgets approved by the Management
Committee, as such Development Workplan and Yearly Development Budgets
may be modified by the Management Committee under Section 5.1.3 below.
3.1.1 Preparation of Yearly Development Budgets and Development
Workplans. Within sixty (60) days from the Effective Date and
each
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October 1 thereafter during the Technology Development Phase,
the Management Committee shall jointly prepare the Yearly
Development Budget and Development Workplan for the next
calendar year. CCSI and GE shall approve such Yearly
Development Budget and Development Workplan with such changes
as CCSI and GE mutually deem necessary, prior to December 15,
1999 and each December 15 thereafter.
3.1.2 Technology Development Phase Activities. Consistent with
the Development Workplan, the Yearly Development Budgets, and
any directives issued by the Management Committee:
3.2.1.1. Conduct of Commercialization Program Activities.
CCSI and GE each shall conduct the Commercialization
Program in a sound scientific manner, and in
compliance in all material respects with all
requirements of applicable laws and regulations and
all applicable good research and manufacturing
practices to attempt to achieve the Development
Workplan objectives efficiently and expeditiously.
CCSI and GE each shall proceed diligently with the
work set out in the Development Workplan by using
their respective good faith efforts to provide, among
others, the following resources: (a) allocation of
sufficient time, effort, equipment and facilities to
the Commercialization Program as each reasonably
believes is necessary carry out its obligations under
the Development Workplan and to accomplish the
objectives thereof; and (b) use of personnel with
sufficient skills and experience as are required to
carry out its obligations under the Development
Workplan and to accomplish the objectives thereof.
3.2.1.2. Subcontracts. CCSI and GE each may subcontract
portions of the Commercialization Program to be
performed by it in the normal course of its business
without the prior consent of the other; provided,
however, that every subcontracted party shall enter
into a confidentiality agreement with the
subcontracting party in accordance with Article 10
below and each party shall be fully responsible for
any activities of its subcontractors under this
Agreement.
3.1.3 Project Leaders. CCSI and GE each shall appoint a person
(a "Project Leader") to coordinate its part of the
Commercialization Program. The Project Leaders shall be the
primary contacts between the parties with respect to the
Commercialization Program. Each party shall notify the
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other within thirty (30) days after the date of this Agreement
of the appointment of its Project Leader and shall notify the
other party as soon as practicable upon changing this
appointment. A Project Leader may be, but shall not be
required to be, a member of the Management Committee.
3.1.4 Availability of Employees. Each party shall make its
employees and relevant reports of nonemployee consultants
available, upon reasonable notice during normal business
hours, at each party's respective places of employment to
consult with the other party on issues arising during the
Commercialization Program and in connection with any request
from any regulatory agency, including regulatory, scientific,
and technical testing issues.
3.1.5 Quarterly Reports. GE and CCSI each shall keep the other
informed of the progress of such party's research and
development activities under the Development Workplan during
the Technology Development Phase. Within thirty (30) days
following the end of each quarter during the term of the
Commercialization Program, GE and CCSI shall each prepare, and
provide to the Management Committee, a written summary report
which shall describe the development activities performed for
by such party during such quarter. In addition, each party
shall respond informally to any reasonable inquiry from the
other party as to such progress and any other matters relevant
to the Commercialization Program.
3.2. Commercialization Phase. The second phase of the Commercialization
Program shall be the Commercialization Phase, during which GE and CCSI
will jointly pursue the Commercialization of the Products as developed
during the Technology Development Phase. GE and CCSI will conduct their
respective efforts in accordance with the Commercialization Plan
attached hereto as Exhibit B, as such Commercialization Plan may be
modified by the Management Committee under Section 5.1.3 below, Article
7, and any other relevant terms of this Agreement.
ARTICLE 4
FUNDING OF THE TECHNOLOGY DEVELOPMENT PHASE
4.1. Joint Efforts to Obtain Funding. GE and CCSI shall use best efforts
to obtain, with respect to each Market Segment, funding from Third
Parties equal to or greater than the Target Funding Amount established
in the Yearly Development Budgets. GE shall determine from which Third
Parties such funding shall be accepted, and upon what terms; provided
any material adverse impact on CCSI is agreed to in advance by CCSI.
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4.2. GE Required Expenditures. If the parties are unable to obtain, with
respect to any Market Segment, funding equal to or greater than the
Target Funding Amount for such Market Segment on or before the date set
forth in the applicable Yearly Development Budget, then GE will fund
the Development Workplan in an amount equal to the difference between
the Target Funding Amount and the funding actually obtained from Third
Parties, not to exceed the following amounts (each, a "Maximum GE
Required Expenditure") with respect to each Market Segment:
Market Segment Maximum GE Required Expenditure
-------------- -------------------------------
7E Market Segment [*] in any 12-month period, each such 12
month period starting on the annual
anniversary of the Effective Date, not to
exceed [*] in the aggregate over the term
of this Agreement.
7F Market Segment [*] in any 12 month period, each such 12
month period starting on the annual
anniversary of the Effective Date, not to
exceed [*] in the aggregate over the term
of this Agreement.
[*] [*]
4.3. Failure to Obtain Target Funding. In the event the aggregate amount
raised by the parties from Third Parties and expended by GE pursuant to
Sections 4.1 and 4.2 above with respect to any Market Segment is less
than the Target Funding Amount for such Market Segment, then the
Parties shall consider, in good faith, alternative funding arrangements
which would provide an equitable sharing of risks and benefits in view
of any Development Cost overruns, and shall in good faith pursue such
alternative funding. In the event the parties are unable to obtain or
agree on alternative funding, then each will have its termination
rights under Section 13.2 below.
In the event of a funding shortfall with respect to the [*] Market
Segment, in addition to triggering termination rights under Section
13.2 below, [*] Market Segment only.
4.4. Funding Contributions by Customers of GE. The parties acknowledge that
the ability of the parties to obtain Commercialization Program funding
from customers of GE stems from the existing relationship between such
customers and GE and such customers' confidence in GE's ability to
successfully pursue the Commercialization Program. Accordingly, any
funding obtained from customers
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of GE shall be deemed to be funding provided by GE (except that such
customer funding shall not be counted toward the Maximum GE Required
Contribution), and shall constitute a material part of the
consideration being provided by GE for the performance of CCSI's
obligations under this Agreement.
ARTICLE 5
MANAGEMENT OF THE COMMERCIALIZATION PROGRAM
5.1. Management Committee.
5.1.1 Composition of the Management Committee. The
Commercialization Program shall be conducted under the
direction of the Management Committee composed of two (2)
named representatives of CCSI and two (2) named
representatives of GE. The CCSI representatives to the
Management Committee shall consist of the CCSI Project Leader
and a Vice President of CCSI. The GE representatives to the
Management Committee shall consist of the GE Project Leader
and a General Manager of GE. Each party shall appoint its
respective representatives to the Management Committee from
time to time, and may substitute one or more of its
representatives, in its sole discretion, effective upon notice
to the other party of such change, provided the replacements
hold positions with the parties which are consistent with the
functional roles set forth above.
5.1.2 Meetings. The Management Committee shall meet at least
semiannually during the term of this Agreement, on such dates
and at such times and places as agreed to by CCSI and GE,
alternating between Mountain View, California and Schenectady,
New York, or such other locations as the parties shall agree.
5.1.3 Committee Responsibilities. The Management Committee is
responsible for ensuring efficient and effective management of
the Commercialization Program, including the establishment and
approval of the Development Workplan, the Yearly Development
Budgets and the Commercialization Plan. Any approval,
determination or other action agreed to by a majority of the
members of the Management Committee shall be the approval,
determination or other action of the Management Committee.
5.2. Disagreements: Executive Committee. Within thirty (30) days after any
acknowledged deadlock, all disagreements within the Management
Committee shall be submitted to the Executive Committee for resolution.
GE's representative
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to the Executive Committee shall be a functional vice president. CCSI's
representative to the Executive Committee shall be the President of
CCSI. Each party shall appoint its respective representatives to the
Executive Committee from time to time, and may substitute its
representatives, in its sole discretion, effective upon notice to the
other party of such change, provided the replacement holds a position
and title with the replacing party which is consistent with the
functional role set forth above.
5.3. Management Committee Reports. Within thirty (30) days following each
Management Committee meeting during the term of this Agreement, the
Management Committee shall prepare and provide minutes to each party
which shall include a reasonably detailed written summary report
describing collaboration activities and plans as well as any committee
decisions.
5.4. Day-to-Day Control. Each party shall have day-to-day control over its
development and Commercialization activities, subject to compliance
with the Development Workplan and the Commercialization Plan.
ARTICLE 6
CONTRIBUTION OF TECHNOLOGY AND LICENSE RIGHTS
6.1. Technology Transfer. Promptly following the Effective Date and
thereafter as such information becomes available, GE and CCSI each
shall disclose to the other party all Technical Information in its
possession that is relevant to the Commercialization Program, to the
extent deemed necessary by the disclosing party, in its reasonable
discretion, to enable the other party to perform its obligations and to
conduct its activities contemplated by this Agreement.
6.2. Licenses.
6.2.1 License Under CCSI Technology. As partial consideration for
GE's contribution to the Commercialization Program, CCSI
hereby grants to GE for the term of this Agreement a paid up,
worldwide license under all CCSI Technology:
(a) to purchase the Products from CCSI for application to Gas
Turbines and the [*] and
(b) To use, sell and offer to sell the Products for Gas
Turbines and the [*].
[*]
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6.2.2 [*]
Furthermore, and in the alternative, GE may, in its sole
discretion (after giving due regard to CCSI's concerns), elect
to terminate the Incentive Term prior to its expiration date
by written notice to CCSI setting forth such expiration date,
and in such event, the length of the Additional Period shall
be increased on an equivalent basis to compensate GE for any
such reduction in the Incentive Term (such that the Additional
Period shall commence on the date of termination of the
Incentive Term and expire on the same date it would have
expired if the Incentive Term (including any modifications
pursuant to Sections 7.3, 7.4 and 7.5) had not been terminated
early). In addition, in a timely fashion after the Effective
Date, or from time to time thereafter as appropriate, CCSI and
GE shall consider in good faith other modifications of the
Incentive Term, including elimination of all or any part of
the Incentive Term in exchange for appropriate compensating
expansions of the Additional Term and a reconsideration of the
continuing existence or structure of Section 8.1 hereof.
[*]
6.2.3 License Under XONON Trademark. CCSI hereby grants to GE for
the term of this Agreement, a royalty-free, non-exclusive,
worldwide license under CCSI's XONON trademark for GE's
marketing and sales activities related to the Products. In
this regard, GE agrees to market the XONON Modules and/or
XONON Components under CCSI's XONON trademark. This agreement
on the part of GE to use the XONON trademark does not require
GE to use the trademark directly on any gas turbine. In
connection with this trademark license, GE agrees that it will
submit samples of all XONON trademark usage to CCSI for
approval prior to use in GE advertising, promotion and/or
sales activities and that GE will promptly discontinue any
usage of the XONON trademark which CCSI specifically objects
to and so informs GE in writing in a timely manner.
6.2.4 License for XONON Control Algorithms. CCSI hereby grants to GE
for the term of this Agreement, a non-exclusive, royalty-
bearing worldwide license (with rights to sub-license) to
copy, have copied, use, sublicense and offer to sub-license
the XONON Control Algorithm(s) for use with the Products
applied to Gas Turbines (including any gas turbines employed
in the [*] Market Segment), at a royalty of [*] for a paid up
license for each gas turbine sold incorporating a XONON
Control Algorithm, not to exceed total royalty payments of [*]
for a fully paid up,
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irrevocable, perpetual worldwide license (with right to
sublicense) for the XONON Algorithms.
6.2.5 License for Sale of GE Components. CCSI hereby grants to GE
for the term of this Agreement, a non-exclusive, worldwide
license to make, have made, use, and sell and offer to sell GE
Components employing or otherwise based upon CCSI Background
Technology for incorporation into GE gas turbines and GE shall
pay CCSI a royalty of [*] per MW (ISO natural gas rating) for
each gas turbine sold by GE incorporating a XONON module and
GE Components irrespective of whether CCSI Background
Technology is actually used in such GE Components, [*] for any
individual gas turbine and a fully paid-up irrevocable,
perpetual worldwide license with a [*] for such license. In
connection with such license, CCSI shall provide to GE any and
all CCSI Background Technology in CCSI's possession relevant
to and useful in the design, manufacture and use of GE
Components, including, without limitation, the following: (i)
Computational Fluid Dynamics (CFD) models for analyzing and
designing aerodynamic mixers and preburners, flow fields and
flow paths to preclude recirculation zones; (ii) performance
test data on fuel/air mixers and preburners; (iii) fuel/air
mixers and preburner designs; and (iv) technical information,
art, knowledge and training to use CCSI Background Technology.
6.3. GE Audit Rights. In the event CCSI elects to compensate GE under option
(b) set forth in paragraph 6.2.2 [*] during the term of this Agreement.
Such books and records shall be subject to inspection by an independent
auditor acceptable to CCSI at reasonable times, but not more frequently
than once every twelve months, for the purpose of verifying the
accuracy of [*] under the aforesaid Section 6.2.2. The fees and
expenses of the auditor performing such an examination shall be borne
by GE. These books and records shall be preserved for at least two (2)
years from [*] Further, if the independent audit reveals to GE that
CCSI has [*] as required in Section 6.2.2 then CCSI shall promptly [*]
or, b) if CCSI in good faith disagrees with the independent auditor's
report, immediately request binding arbitration solely on the issue of
[*] as reported by GE's independent auditor. Within thirty (30) days
after any written request by CCSI for arbitration on the [*], CCSI and
GE shall agree on an independent expert arbitrator to review all of the
relevant evidence including the GE auditor's report and render a
decision on the correctness of [*] reported by the independent auditor.
The site of arbitration shall be New York, NY, unless otherwise agreed.
Both parties shall use all reasonable efforts to select the independent
arbitrator and complete the arbitration within sixty (60) days after
GE's written notice of [*] as set forth above. The decision of the
independent expert arbitrator shall be final and binding, and the party
found to
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be in error shall pay all of the costs of the independent arbitrator in
reaching his/her decision. In the event CCSI is found to be in error
and CCSI does not immediately compensate GE for [*] as set forth above,
or if CCSI does not immediately [*] GE shall have the immediate right
to terminate for cause as set forth in Sections 13.1 and 13.4 below [*]
ARTICLE 7
COMMERCIALIZATION
The Commercialization of the Products shall be subject to the Commercialization
Plan attached hereto as Exhibit B and the provisions of this Article 7.
7.1. Supply Agreement. During the Incentive Term and during the Additional
Period provided in this Article 7, CCSI shall supply all of GE's
requirements for the Products for incorporation into Gas Turbines,
provided that CCSI can meet GE's quality, quantity and schedule
requirements, pursuant to the Purchase Terms and Conditions set forth
in Exhibit C. During this period, GE reserves the right to engage in
Pre-commercial Activities with Third Parties regarding catalytic
combustion systems for use on any GE gas turbine, provided CCSI shall
have the right to treat any purchase or accepted written offer to
purchase by GE of catalytic combustion systems for heavy duty gas
turbines from a Third Party or other obtaining by GE, through license
or otherwise, of catalytic combustion systems for such heavy duty gas
turbines during the Incentive Term, as a material breach of this
Agreement, triggering CCSI's rights under Sections 8.1, 13.1.3 and 13.3
hereof.
7.2. Purchase Terms. All GE purchases from CCSI of the Products shall be
subject to the Purchase Terms and Conditions as set forth on Exhibit C.
7.2.1 [*]
7.2.2 In any event and as further consideration for GE's
contribution to the Commercialization Program, to the extent
GE procures all of its requirements for Gas Turbine catalytic
combustion systems from CCSI, [*]
7.2.3 To assist CCSI in planning its manufacturing activities, GE
shall promptly provide CCSI with its best estimate of its
requirements for goods over the next annualized or consecutive
twelve (12) month period broken down by one (1) month periods.
Further GE shall update this twelve (12) month estimate on a
calendar quarter basis, such that CCSI
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receives a revised estimate of GE's requirements for the goods
for the next four (4) calendar quarters. If GE places any firm
orders which exceeds by more than fifty percent (50%) the
rolling twelve (12) month estimates, CCSI shall use all
reasonable efforts to fill such order but shall not be in
breach for failure to do so unless GE gives CCSI at least six
months written notice of the revised estimate.
7.2.4 For the purposes of Article 7 of Exhibit C, Terms & Conditions
of Purchase, GE and CCSI shall agree upon CCSI's process and
control system and such agreed upon system shall be deemed
acceptable to GE for purposes of Article 7 of Exhibit C, Terms
& Conditions of Purchase.
7.3. Extension of the Incentive Term - Year 2003 Deliveries. If, on or
before January 1, 2002, GE commits in writing to purchase XONON Modules
for delivery in calendar year 2003 in the following quantities, the
Incentive Term for Gas Turbines only shall be extended as follows:
(a) A commitment to purchase XONON Modules for at least [*] of the
Gas Turbines shipped by GE during calendar year [*] (excluding
Gas Turbines shipped during such time period for which the
customers do not require a Selective Catalytic Reduction Unit
(SCR) or equivalent NOx control systems) shall result in an
extension of the Incentive Term through December 31, [*].
(b) A commitment to purchase XONON Modules for either:
(1) at least [*] of the Gas Turbines shipped by GE during
calendar year [*] (excluding Gas Turbines shipped
during such period for which the customers do not
require SCR or equivalent NOx control systems); or
(2) at least [*] of all Gas Turbines shipped by GE during
calendar year [*]; shall result in an extension of
the Incentive Term through December 31, [*]
7.4. Extension of the Incentive Term - Year [*] Deliveries. If GE commits in
writing on or before January 1, [*] to purchase XONON Modules for
delivery in calendar year [*] of the Gas Turbines shipped by GE during
the calendar year [*] (excluding Gas Turbines shipped for which the
customers do not require SCR or equivalent NOx control systems), or six
(6) such Gas Turbines (whichever is greater), then the Incentive Term
shall be extended by one (1) year, over and above any extension
provided for in Section 7.3 above.
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7.5. Reduction of Incentive Term. If GE fails, through no fault of CCSI, to
[*] as set forth in the Commercialization Plan attached hereto as
Exhibit B, then the Incentive Term for each Market Segment (excluding
the [*] Market Segment, if funding from [*] or other Third Party
funding to fully fund the [*] Program cannot be obtained in timely
fashion) shall be reduced as follows:
Delay in Meeting Target Dates: Reduction in the Incentive Term:
[*] [*]
[*] [*]
[*] [*]
[*] [*]
On the other hand, if the target dates for first Gas Turbine firings
are not met because of CCSI's fault, or if CCSI is unable to commit to
the deliveries contemplated by Sections 7.3 and 7.4 in quantities that
would extend the Incentive Term due to XONON Module technical, quality
or delivery reasons, then GE and CCSI will consider in good faith a
revised schedule for extension of the Incentive Term that would provide
GE with the benefits contemplated in Sections 7.3 and 7.4.
7.6. Purchase of Products for Application to Smaller Turbines. As further
consideration for GE's contribution to the Commercialization Program,
GE shall have the right to purchase from CCSI, on a non-exclusive basis
(but exclusive as to GE designed gas turbines), Products for
application to GE designed and manufactured gas turbines in the 2 to
70MW size range, and to use, sell and offer to sell Products for such
applications, subject to reasonable purchase terms and conditions to be
negotiated at the time, but in any event at [*].
7.7. Alternative Products Source. If CCSI is unable to consistently meet
GE's requirements for Products from a quality, quantity or delivery
standpoint, CCSI shall promptly establish a second source of supply (as
a vendor to CCSI) with a Third Party manufacturer designated by CCSI
and approved by GE (which approval shall not be unreasonably withheld),
solely for the purpose of satisfying CCSI's obligations to supply
Products to GE under this Agreement.
ARTICLE 8
ROYALTIES
8.1. Royalties Upon Certain Terminations. In the event of a termination of
this Agreement by CCSI under Section 13.1, or 13.2 subparagraph
b)including, in each case, any termination by individual Market Segment
under Section 13.6, and
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subject to any surviving terms of this Agreement, if GE elects
thereafter to continue to sell and offer to sell Products to new
customers, with respect to any such Market Segment, then CCSI shall
grant to GE a non-exclusive, royalty-bearing, irrevocable, worldwide
license under CCSI's Commercialization Program Technology, CCSI's
Background Technology and XONON Control Algorithms to sell and offer to
sell Products and sublicense XONON Control Algorithms, and GE shall pay
to CCSI fees and royalties with respect to such Market Segment, payable
in the form of (a) a one-time fee in the amount set forth below,
payable upon the first sale of a gas turbine incorporating such Product
in such Market Segment; and (b) a royalty in the amount set forth below
for each subsequent sale of a gas turbine incorporating such Product
[*].
Market Segment [*] One-Time Fee Royalty Per Sale
7F [*] [*] [*]
7E [*] [*] [*]
[*] [*] [*] [*]
8.2. Royalties on XONON Control Algorithms. If GE sublicenses the XONON
Control Algorithms in connection with its sales of Gas Turbines
incorporating the Products, then GE shall pay to CCSI the royalty
provided in Section 6.2.4.
8.3. Royalties on Sale of GE Components Employing CCSI Technology. If ▇▇
▇▇▇▇▇ or leases GE gas turbines incorporating a XONON Module and GE
Components, GE shall pay to CCSI the royalty provided in Section 6.2.5.
8.4. Royalty Accrual. For purposes of royalty payments hereunder, GE Gas
Turbines or GE Components shall be considered sold when title is
transferred to a Third Party, or upon lease execution if leased to a
Third Party.
8.5. Royalty Payment. Any and all royalties accruing to CCSI under this
Agreement, shall be paid by GE within forty-five (45) days following
the end of each quarter year period of the calendar year during which
the royalties have accrued. In this regard, all monies due as royalty
payments under this Agreement shall be payable in the United States
funds collectible at par in San Francisco, California.
8.6. Royalty Accounting. GE shall within forty-five (45) days after the end
of each quarter year during which royalties are due under this
Agreement forward to CCSI a written statement showing the quantities of
royalty bearing GE Gas Turbine(s) or GE Components which have been sold
(in U.S. dollars) during each quarter year of this Agreement and a
computation of royalties payable thereon and shall accompany each
statement by payment of the amount due. If no sales of such
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royalty bearing Gas Turbines or Component has been made during any
reporting period, a statement to this effect shall be required.
8.7. Royalty Records & Audits. GE shall use its best efforts to keep books
and records accurately showing all GE gas turbines and/or GE Components
sold or leased by it and subject to royalties under the terms of this
Agreement. Such books and records shall be open to inspection by an
independent auditor acceptable to GE at reasonable times, but not more
frequently than once every twelve months, for the purpose of verifying
the accuracy of the quarterly reports and the royalties due. The fees
and expenses of the auditor performing such an examination shall be
borne by CCSI. These books and records shall be preserved for at least
two (2) years from the date of the royalty payment to which they
pertain.
ARTICLE 9
PATENT INFRINGEMENT AND
TECHNOLOGY RIGHTS ENFORCEMENT ACTIONS
9.1. CCSI Indemnification. CCSI shall indemnify and hold GE, its Affiliates,
customers and sublicensees harmless, and hereby forever releases and
discharges GE, its Affiliates, customers, and sublicensees, from and
against all liabilities, damages and expenses, including attorneys' and
experts' fees and costs, arising out of any claim of patent or
copyright infringement brought by a Third Party because of the
manufacture, use or sale of, or offer to sell, any Product supplied by
CCSI to GE, its Affiliates, customers or sublicensees, provided such
use is in accordance with Product or XONON Control Algorithm
specifications and CCSI is notified promptly of receipt of the Third
Party claim and CCSI is given full control of any defense against such
claim. If as a result of the claim, the use by GE of the Product or
XONON Control Algorithm is enjoined, then CCSI shall at its option (i)
obtain the appropriate license from the Third Party claimant to enable
GE and its customers to continue such Product or XONON Control
Algorithm use, (ii) modify the Product or XONON Control Algorithm so
that it no longer is infringing, but still satisfies agreed upon
performance specifications, or (iii) replace the Product or XONON
Control Algorithm with a non-infringing Product or XONON Control
Algorithm which satisfies agreed upon performance specifications. In
the event CCSI is unable to eliminate the infringement by any of the
aforementioned measures, then CCSI and GE shall meet and agree on
possible alternatives which, as a last resort, shall include CCSI
taking back any infringing Product or XONON Control Algorithm and
refunding the purchase price for such Product or XONON Control
Algorithm, subject to GE's agreement which shall not be unreasonably
withheld.
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9.2. GE Patent Indemnification. GE shall indemnify and hold CCSI and its
Affiliates harmless and forever releases and discharges CCSI and its
Affiliates from and against all liabilities, damages and expenses,
including attorney's and experts fees and costs arising out of any
claim of patent infringement brought by a Third Party because of the
manufacture, use or sale of, or offer to sell, any GE Components
incorporating Technology licensed by CCSI to GE under Section 6.2.5
hereof (other than claims based solely on Products supplied by CCSI) by
GE, its Affiliates, customers or sublicensees, provided CCSI notifies
GE promptly of receipt of the Third Party claim and GE is given full
control of any defense against such claim.
9.3. Enforcement of Patents and Other Technology Rights. CCSI shall, at its
sole expense, use its best efforts to enforce CCSI owned Patents and
other Technology rights relating to any Products purchased by GE
against any infringement of such Patents or unauthorized use or
misappropriation of such Technology rights by a Third Party of which
CCSI becomes aware. GE shall promptly notify CCSI if GE becomes aware
of any such infringement or Technology misappropriation. In the event
such action includes the bringing of a suit against such Third Party,
GE shall provide such assistance as CCSI shall reasonably request,
provided that CCSI shall reimburse GE for all reasonable expenses
thereby incurred. All costs and expenses, including attorney's fees of
any lawsuit instituted by CCSI shall be born by CCSI. The amount of
recovery paid to CCSI shall belong to and be the sole property of CCSI.
ARTICLE 10
CONFIDENTIALITY
10.1. Nondisclosure and Use Obligations. Except as otherwise provided in this
Article 10, during the term of this Agreement and for a period of ten
(10) years thereafter, all information of a confidential nature
disclosed pursuant to this Agreement by one party to another and, in
the case of documents, designated by the disclosing party by an
appropriate stemp, marking or legend as being confidential to the
disclosing party shall be used by the receiving party only for the
purposes of this Agreement and shall be maintained as confidential by
the receiving party, using the same safeguards as it uses to protect
its own confidential information of a similar character. The receiving
party will not publish or disclose to Third Parties any such received
information of a confidential nature without the prior express written
consent of the disclosing party. The foregoing obligations on use and
disclosure of confidential information shall not apply to any
information which:
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(a) is shown by objective evidence to be already in the possession
of the receiving party at the time of first receipt from the
disclosing party; or
(b) is shown by objective evidence to be developed independently
by employees of the receiving party who had not had access to
the confidential information; or
(c) is or becomes part of the public domain without breach of this
Agreement by the receiving party; or
(d) is made available by the disclosing party to a third party
without like obligations on disclosure; or
(e) is rightfully obtained by the receiving party from third
person without restriction or breach of this Agreement by the
receiving party; or
(f) in the case of documents, is not designated by an appropriate
stamp, marking or legend as being confidential to the
disclosing party at the time of disclosure.
Oral information disclosed by one party to the other shall be confirmed
as confidential by a written summary to be submitted by the disclosing
party to the receiving party within ten (10) days after the oral
transmission thereof. For purposes of this Article 10, information and
data described above shall be referred to as "Information".
10.2. Permitted Disclosures. To the extent it is reasonably necessary or
appropriate to fulfill its obligations or exercise its rights under
this Agreement, (a) a party may disclose Information it is otherwise
obligated under this Article 10 not to disclose to its directors,
officers, employees, attorneys, accountants, consultants and
sublicensees, on a need-to-know basis on the condition that such
Persons agree to keep the Information confidential for the same time
periods and to the same extent as such party is required to keep the
Information confidential; (b) a party may disclose Information,
described in Section 10.1 above, that it is otherwise obligated under
this Article 10 not to disclose to its Affiliates and outside
contractors, on a need-to-know basis on the condition that such Persons
agree to keep the Information confidential for the same time periods
and to the same extent as such party is required to keep the
information confidential; and (c) a party may disclose such Information
to government or other regulatory authorities to the extent that such
disclosure is required by applicable law, regulation or court order, or
is reasonably necessary to obtain patents and to commercially market
the Products, provided that the disclosing party shall provide written
notice to the
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other party and sufficient opportunity to object to such disclosure or
to request confidential treatment thereof.
10.3. Terms of this Agreement. CCSI and GE shall not disclose any terms or
conditions of this Agreement to any Third Party without the prior
consent of the other party, except as required by applicable law.
ARTICLE 11
PUBLICATION
11.1. Notice of Publication. During the term of this Agreement, CCSI and GE
each acknowledge the other party's interest in publishing certain of
its results to obtain recognition within the scientific and investment
communities and to advance the state of scientific knowledge. Each
party also recognizes the mutual interest in obtaining valid patent
protection and protecting business interests. Consequently, either
party, its employees or consultants wishing to make a publication
(including any oral disclosure made without obligation of
confidentiality) relating to work performed by such party as part of
the Commercialization Program (the "Publishing Party") shall transmit
to the other party (the "Reviewing Party") a copy of the proposed
written publication at least forty-five (45) days prior to submission
for publication, or an outline of such oral disclosure at least fifteen
(15) days prior to presentation. The Reviewing Party shall have the
right (a) to propose modifications to the publication for patent
reasons or to protect or delete proprietary information, and (b) to
request a reasonable delay in publication in order to protect
patentable or proprietary information.
11.2. Timing of Publication. If the Reviewing Party requests such a delay,
the Publishing Party shall delay submission or presentation of the
publication for a period of ninety (90) days to enable patent
applications protecting each party's rights in such information to be
filed. Upon the expiry of forty-five (45) days, in the case of proposed
written disclosures, or fifteen (15) days, in the case of proposed oral
disclosures, from transmission to the Reviewing Party, the Publishing
Party shall be free to proceed with the written publication or the
presentation, respectively, unless the Reviewing Party has requested
the delay described above.
11.3. Disclosure Regarding Agreement. Neither party shall make a press
release or other public disclosure of the fact that this Agreement has
been entered into or any details of its terms without the other party's
prior consent, unless such disclosure is required, on the advice of
counsel, to comply with any local, state or federal law
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or regulation, in which case disclosure can be made upon prior written
notice to the other party.
ARTICLE 12
TECHNOLOGY AND PATENT RIGHTS
12.1. Ownership of Background Technology. The entire right, title and
interest in all Background Technology shall be retained by the party
owning it. To the extent a party is granted any right to use Background
Technology under this Agreement, the use of such Background Technology
shall be limited to the express purposes of this Agreement.
12.2. Ownership of Commercialization Program Technology. The entire right,
title and interest in all Commercialization Program Technology (a)
conceived by employees or others acting solely on behalf of CCSI or its
Affiliates shall be owned solely by CCSI, (b) conceived by employees or
others acting solely on behalf of GE or its Affiliates shall be owned
solely by GE. Inventions conceived during the term of this Agreement by
employees of CCSI and GE, or their respective Affiliates, shall be
owned jointly by CCSI and GE based on employees or agents of both
parties being named as inventors in accordance with laws of
inventorship of the United States (the "Jointly Owned Technology").
Such ownership rights of each party with respect to the Technology are
subject to the licenses granted under Article 6 above and this Article
12. CCSI and GE each hereby represents that all employees performing
its obligations under this Agreement shall be obligated under a binding
written agreement to assign to it, or as it shall direct, all
Technology conceived by such employees.
12.3. Commercialization Program Technology Cross-Licenses.
12.3.1 GE License. In the event GE conceives inventions or exchanges
Technical Information comprising improvements and/or
modifications to the XONON Module during the period of ten
(10) years following the Effective Date of this Agreement
and/or if GE conceives, by means of GE employees who had
access to CCSI Technology, any invention comprising an
improvement or modification to the XONON Module or develops
Technology which is derived from CCSI owned Technology, during
such period, then GE shall grant to CCSI a non-exclusive
royalty-free, perpetual, world-wide, irrevocable license (with
unrestricted rights to sublicense) to make, have made, use,
sell, lease and/or export Products under both the aforesaid
Technical Information and any Patents which result from the
aforesaid inventions; said non-exclusive license being
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
restricted in field-of-use to Products for gas turbines
employing catalytic combustion, other than aircraft gas
turbines of the type manufactured by GE Aircraft Engines.
12.3.2 CCSI License. In the event CCSI conceives inventions or
exchanges Technical Information comprising improvements and/or
modifications to the XONON Components or GE Components or any
other portion of the combustion system (excluding the XONON
Module) during the period of ten (10) years following the
Effective Date of this Agreement and/or if CCSI conceives, by
means of CCSI employees who had access to GE Technology, any
invention relating to the aforesaid XONON Components or GE
Components or any other portion of the combustion system or
develops Technology which is derived from GE owned Technology,
during such period, then CCSI shall grant to GE a non-
exclusive royalty-free, perpetual, world-wide, irrevocable
license (with unrestricted right to sublicense) to make, have,
made, use, sell, lease and/or export XONON Components, GE
Components, and any other portion of the combustion system
(excluding the XONON Module) under both the aforesaid
Technical Information and any Patents which result from the
aforesaid inventions, said non-exclusive license being
restricted in field-of-use to gas turbines employing catalytic
combustion.
12.4. Patent Filing Procedure. In all cases, the inventing party shall retain
the sole right to determine whether or not Patent applications will be
filed, and whether Patents and Patent applications will be maintained,
on any such inventions which are conceived by its employees. With
regard to inventions conceived jointly by both parties during work
under this Agreement and Patents arising from such joint inventions
which shall be the joint property of GE and CCSI, each party shall be
free to utilize the same and to license third parties of its own
choosing thereunder without consultation with the other party, and
without an accounting or sharing of licensing income thereby received,
if any. The parties agree to select mutually acceptable Patent
attorneys to file and prosecute Patent applications based on such joint
patentable inventions and to share equally the cost of such services
and expenses reasonably incurred by such attorneys, including the
payment of Patent maintenance fees, and without further compensation,
to give such attorneys all reasonable assistance, to cause all
necessary papers to be executed and do all things that may reasonably
be required to obtain and maintain Patents on such joint inventions.
Each party shall be kept fully advised of the status of the prosecution
of each such Patent application and shall be consulted in advance with
respect to the advisability of continuing said prosecution in the event
of any final rejection, appeal, interference, or the like, and each
party may, at any time by ten (10) days' notice to the other party,
elect not to continue to pays its share of such
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
services and expenses incurred after the date of said election with
respect to any such Patent or Patent application; provided, however,
that the party making such election shall, at the time of so notifying
the other party, immediately assign to the other party all rights to
the Patent or Patent application with respect to which the election is
being made. Neither party hereto shall be obligated to make any
payments for or on account of proceedings before any court or any other
tribunal or agency in connection with the maintenance or assertion of
any Patents based on joint inventions.
12.5. No Other Technology Rights. Except as otherwise provided in this
Agreement, under no circumstances shall a party, as a result of this
Agreement, obtain any ownership interest or other right in any
technology, know-how, patents, pending patent applications or products
of the other party, including items owned, controlled or developed by
the other, or transferred by the other to such party at any time
pursuant to this Agreement.
ARTICLE 13
TERMINATION
13.1. Termination for Cause. Either party may terminate this Agreement for
cause upon the occurrence of any of the following:
13.1.1 The other party shall (a) seek the liquidation,
reorganization, dissolution or winding up of itself (other
than dissolution or winding up for the purposes of
reconstruction or amalgamation) or the composition or
readjustment of all or substantially all of its debts, (b)
apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of
itself or substantially all of its assets, (c) make a general
assignment for the benefit of its creditors, (d) commence a
voluntary case under the Bankruptcy Code, (e) file a petition
seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, winding-up or
composition or readjustment of debts, or (f) adopt any
resolution of its Board of Directors or stockholders for the
purpose of effecting any of the foregoing; or
13.1.2 A proceeding or case shall be commenced without the
application or consent of the other party and such proceeding
or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the following shall be
entered and continue unstayed in effect, for a period of
ninety (90) days from and after the date service of process is
effected upon the other party, seeking (a) its liquidation,
reorganization,
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
dissolution or winding up, or the composition or readjustment
of all or substantially all of its debts, (b) the appointment
of a trustee, receiver, custodian, liquidator or the like of
itself or of all or substantially all of its assets, or (c)
similar relief under any law relating to bankruptcy,
insolvency, reorganization, winding up or composition or
readjustment of debts; or
13.1.3 Except as otherwise provided in Article 15 below, upon or
after the breach of any material provision of this Agreement,
if the breaching party has not cured such breach within ninety
(90) days after notice thereof from the other party, this
Agreement shall terminate for cause, at the option of the
other party, upon the expiration of such ninety (90) day cure
period. Notwithstanding the foregoing, GE shall have the right
to terminate this Agreement for cause upon thirty (30) days
notice if GE has terminated any three (3) purchase orders due
to CCSI material default in performing those purchase orders
during any twelve (12) month period.
In addition, GE may terminate this Agreement for cause in
accordance with Article 16 due to an assignment of this
Agreement, or a transfer of control of CCSI, to a Competing
Manufacturer.
13.1.4 In the event that either GE or CCSI elects to terminate this
Agreement under the provisions of this Section 13.1 or Section
13.2, the other party shall have the right, within thirty (30)
days of receipt of a termination notice, to request binding
arbitration on the issue. In such event, CCSI and GE shall
agree on an independent arbitrator to review the relevant
evidence and render a decision on whether termination is
justified under the circumstances. The site of arbitration
shall be New York, NY if requested by CCSI and in San
Francisco, CA if requested by GE, unless otherwise agreed.
Both parties shall use all reasonable efforts to select the
independent arbitrator and complete the arbitration within
sixty (60) days after the notice of request for arbitration.
The decision of the arbitrator shall be final and binding, and
the non-prevailing party shall pay all of the costs of the
arbitrator. If arbitration is requested hereunder, in no event
shall any remedies provided in this Agreement and triggered by
default under this Section 13.1 be implemented until after the
decision of the arbitrator has been rendered.
13.2. Termination Without Cause. Either party shall have the unilateral right
to terminate this Agreement by giving written notice to the other party
(a) at any time, if the parties are unable, after best efforts, to
raise funds from Third Parties within a Market Segment in at least an
amount equal to the difference between
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
(i) the Target Funding Amount for such Market Segment, and (ii) the
Maximum GE Required Contribution for such Market Segment, excluding the
Syntroleum Market Segment, or (b) after the end of the Initial Term,
upon the terminating party's written notice to the other party of
significant technical issues which indicate that the technical
objectives of the Commercialization Program are not achievable or
cannot be achieved within the timetable established in the Development
Workplan or any extension thereof agreed to by the parties; with GE
having the right to terminate under (b) above only if the technical
issues relate to the XONON Module or XONON Components, and CCSI having
the right to terminate under (b) above only if the technical issues
relate to the GE Components.
13.3. Consequences of Termination -- CCSI Not in Default. In the event this
Agreement is terminated by GE under Section 13.2, or by CCSI under
Section 13.1: (a) CCSI shall have no obligation to make improvements to
the XONON Combustion System available to GE beyond those developed in
the Commercialization Program prior to such termination; (b) GE's
licenses under CCSI Technology pursuant to Section 6.2.1 shall [*], and
(e) if GE elects to pursue its options under Section 8.1, GE shall pay
CCSI the predetermined royalty or fee as provided therein.
13.4. Consequences of Termination -- GE Not in Default. In the event this
Agreement is terminated by CCSI under Section 13.2, or by GE under
Section 13.1: (a) GE's licenses under CCSI Technology pursuant to
Article 6 shall continue in effect and CCSI shall promptly arrange with
GE for a Third Party source of supply (as a vendor to CCSI) of the
XONON Combustion System using the procedure set forth in Section 7.7
above which assures GE of a continuing and uninterrupted source of
supply for the XONON Modules and/or XONON Components, and [*]. Further,
if GE terminates under Section 6.3 above because of failure on the part
of CCSI to pay [*], CCSI shall immediately set up and license, at
CCSI's cost, a Third Party source of Product under the procedure set
forth in Section 7.7 above except in this case the Third Party shall be
a vendor to GE, provided the Third Party license is limited to
manufacture and sale of Products solely to GE at the Discount Price and
not to Third Parties. In the event the Third Party source of supply
established above under clause (a) as a vendor to CCSI fails to supply
GE with Product in a timely fashion pursuant to this Agreement, then GE
shall, upon written notice to CCSI, also have the right to have a Third
Party Product vendor to GE established pursuant to the procedure set
forth in the preceding sentence.
13.5. Effect of Termination. Termination of this Agreement shall not relieve
the parties of any obligation accruing prior to such termination. The
provisions of Sections 9.1, 9.2 and this 13.5, and Articles 10
[Confidentiality], 11 [Publication],
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
12 [Technology and Patent Rights] and 14 [Indemnity], in addition to
those rights and obligations specifically noted in Section 13.3 or
13.4, to the extent applicable, shall survive the termination of this
Agreement. Each party shall bear its own termination costs. There will
be no liquidated damages.
13.6. Termination by Market Segment. Any right to terminate this Agreement
under this Article 13 may, at the election of the party seeking to
terminate, be exercised as to one or more individual Market Segments as
specified in such party's written notice of termination. In such event,
this Agreement shall continue in full force an effect with respect to
the remaining Market Segments.
ARTICLE 14
INDEMNITY
14.1. Direct Indemnity. Each party shall indemnify and hold the other party,
its Affiliates and sublicensees harmless, and hereby forever releases
and discharges the other party, its Affiliates and sublicensees, from
and against all claims demands, liabilities, damages and expenses,
including attorneys fees and costs (all "Liabilities") arising out of
any breach of a representation or warranty contained in Section 2
hereof, negligence, recklessness or intentional wrongful acts or
omissions of the indemnifying party, its Affiliates or sublicensees in
connection with the work performed by such party during the term of
this Agreement except in each case to the extent such Liabilities
resulted from negligence, recklessness or intentional wrongful acts or
omissions of the other party. Neither party shall be liable to the
other for any indirect, incidental or consequential damages arising out
of any terms or conditions in this Agreement or with respect to the
performance thereof.
14.2. Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article 14 shall promptly notify the other
party (the "Indemnitor") of any Liability or action in respect of which
the Indemnitor or any of its Affiliates intend to claim such
indemnification, and the Indemnitor shall have the right to participate
in, and, to the extent the Indemnitor so desires, jointly with any
other Indemnitor similarly noticed, to assume the defense thereof with
counsel selected by the Indemnitor. The indemnity obligations under
this Article 14 shall not apply to amounts paid in settlement of any
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Indemnitor, which consent shall not be
withheld unreasonably. The failure to deliver notice to the Indemnitor
within a reasonable time after the commencement of any such action, if
materially prejudicial to its ability to defend such action, shall
relieve such Indemnitor of any liability to the Indemnitee under this
Article 14, but the omission so to deliver
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
notice to the Indemnitor will not relieve it of any liability that it
may have to any Indemnitee otherwise than under this Article 14. The
Indemnitor may not settle the action or otherwise consent to an adverse
judgment in such action that diminishes the rights or interests of the
Indemnitee without the express written consent of the Indemnitee. The
Indemnitee, its employees and agents, shall cooperate fully with the
Indemnitor and its legal representatives in the investigation of any
action, claim or liability covered by this indemnification at
Indemnitor' s expense.
ARTICLE 15
EXCUSABLE DELAY
Neither party shall be held liable or responsible to the other party nor be
deemed to have defaulted under or breached this Agreement for failure or delay
in fulfilling or performing any term of this Agreement to the extent, and for so
long as, such failure or delay is caused by or results from causes beyond the
reasonable control of the affected party including but not limited to fire,
floods, embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other party. The foregoing shall be subject to the
delayed party using reasonable efforts to mitigate the adverse consequences of
such delay.
ARTICLE 16
ASSIGNMENT
This Agreement may not be assigned or otherwise transferred, nor, except as
expressly provided hereunder, may any right or obligations be assigned or
transferred by either party without the consent of the other party; provided
further, however that (i) each party may assign its rights and interests, and
delegate its obligations, hereunder, effective upon written notice thereof, to
any Affiliate, and (ii) either party may assign its rights and interests, and
delegate its obligations, hereunder, effective upon written notice thereof, to
any Third Party which acquires all or substantially all of the assets of CCSI or
GE, as the case may be, or which is the surviving third party in a merger or
consolidation with CCSI or GE as the case may be, if such Third Party assumes
all of the obligations of CCSI or GE, as the case may be, hereunder. Subject to
the foregoing, any reference to CCSI or GE hereunder shall be deemed to include
the successors thereto and assigns thereof. Notwithstanding anything to the
contrary contained in this Article 16, if, without GE's prior written consent,
either (a) CCSI assigns or otherwise transfers its rights and interests under
this Agreement to any Competing Manufacturer (defined below) including any
transfer by merger or asset sale; or (b) any Competing Manufacturer purchases or
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
otherwise obtains a controlling ownership interest (defined as 50% or more
ownership interest) in CCSI; then this Agreement shall terminate upon GE's
election and written notice thereof to CCSI, and such termination shall be
deemed a termination for cause under Section 13.1, resulting in the consequences
to the parties described in Section 13.4. For the purposes of this Agreement,
"Competing Manufacturers" shall mean only companies that design, manufacture and
sell gas turbines of greater than 2 MW for power generation or mechanical drive
applications. Further, in the event the assignment or transfer of rights under
clause a) above or the sale or transfer of controlling interest under clause b)
above are to a company (other than a Competing Manufacturer) that designs,
manufactures and sells gas turbines of greater than 2 but less than 70MW for
power generation or mechanical drive applications (herein "Other Turbine
Manufacturer") then the Parties hereby agree that GE has the right after good
faith consideration of any CCSI concerns, to Terminate under Section 13.1 with
consequences set forth in Section 13.4. Notwithstanding the foregoing, GE may
assign its rights and obligations with respect to intellectual property to GE
Power Systems Licensing, Inc., a wholly-owned subsidiary of GE.
ARTICLE 17
SEVERABILITY
Each party hereby acknowledges that it does not intend to violate any public
policy, statutory or common laws, rules, regulations, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries. Should one or more provisions of this Agreement be or
become invalid, the parties shall substitute, by mutual consent, valid
provisions for such invalid provisions which valid provisions in their economic
effect are sufficiently similar to the invalid provisions that it can be
reasonably assumed that the parties would have entered into this Agreement with
such provisions. In case such provisions cannot be agreed upon, the invalidity
of one or several provisions of this Agreement shall not affect the validity of
this Agreement as a whole, unless the invalid provisions are of such essential
importance to this Agreement that it is to be reasonably assumed that the
parties would not have entered into this Agreement without the invalid
provisions.
ARTICLE 18
MISCELLANEOUS
18.1. Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one of the parties to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by personal delivery, U.S. First class mail or courier), U.S.
first class mail or courier, postage
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
prepaid (where applicable), addressed to such other party at its
address indicated below, or to such other address as the addressee
shall have last furnished in writing to the addressor and (except as
otherwise provided in this Agreement) shall be effective upon receipt
by the addressee.
If to CCSI: Catalytica Combustion Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
If to GPS: GENXON Power Systems, LLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
If to GE: GE Power Systems
▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: VP, Power Plants
18.2. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to
the conflicts of law principles thereof.
18.3. Agreement Limited to Express Terms. Except as otherwise expressly
provided in this Agreement, the parties agree that the
Commercialization Program contemplated herein, and any discussions or
communications between the parties relating thereto, shall not restrict
either party's right to take whatever future actions such party
unilaterally determines to be in its best interest, including the right
to undertake similar programs or relationships with Third Parties
covering subjects related to the matters covered herein and neither the
holding of any discussions between the parties, nor the exchange of any
information shall diminish or restrict in any way the right that any
party has to market, lease, sell or otherwise make available its
products and services to any customer or Third Party.
18.4. Entire Agreement. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof. All express or
implied agreements and understandings, either oral or written,
heretofore made are expressly superseded by this Agreement. This
Agreement may be amended, or any term hereof modified, only by a
written instrument duly executed by both parties.
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
18.5. Headings. The captions to the Articles and Sections hereof are not a
part of the terms but are merely guides or labels to assist in locating
and reading the Articles and Sections hereof.
18.6. Independent Contractors. It is expressly agreed that CCSI and GE shall
be independent contractors and that the relationship between the two
parties shall not constitute a partnership, joint venture or agency.
Neither CCSI nor GE shall have the authority to make any statements,
representations or commitments of any kind, or to take any action or
undertake any obligation, which shall be binding on the other party,
without the prior consent of the other party.
18.7. Waiver. The waiver by either party of any right hereunder or the
failure to perform or of a breach by the other party shall not be
deemed a waiver of any other right hereunder or of any other breach or
failure by said other party whether of a similar nature or otherwise.
18.8. Counterparts. 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.
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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
AGREED FOR AND ON BEHALF OF AGREED FOR AND ON BEHALF OF
GENERAL ELECTRIC COMPANY CATALYTICA COMBUSTION
SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------- -------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------- -------------------------
Title: VP Power Plants Title: Chief Executive Officer
------------------------- -------------------------
AGREED FOR AND ON BEHALF OF
GENXON
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title: President
-------------------------
Witness: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------
Title: GM-GT Product Management
-------------------------
Witness: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
Title: Director, Marketing CCSI
-------------------------
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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
EXHIBIT A
PROGRAM SCHEDULE AND MILESTONES
[*]
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OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
EXHIBIT B
COMMERCIALIZATION PLAN
Time to Market Focus of Commercialization Program
Basic Principles
Customer requirements drives market timing
Development compatible with GE's NPI Tollgate process
Program Targets
[*] Market [*] Estimated
Segments/ Incentive Program Budgets (3)
Turbines Term ($ million)
-------------- ------------ -------------------
[*] PGT10 or Other [*] [*] GE [*]
CCSI [*]
Total [*]
[*] 7E [*] [*] GE [*]
CCSI [*]
Total [*]
[*] 7F [*] [*] GE [*]
CCSI [*]
Total [*]
______________________
[*]
(2) To first engine firing which includes 2 full size test combustors and 1
full combustor set (10 combustors for a 7E and 14 combustors for a 7F), but
excludes costs for installation and appropriate field testing. The cost
will be site specific - very preliminary estimate of [*]. Field testing is
estimated at 2 months.
(3) Assumes that both GE and CCSI will pursue parallel "Component" paths
through the Preliminary Design Phase (includes prototype test hardware),
and GE will select a "Component" path to go forward to Final Design Phase.
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
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EXHIBIT C
TERMS & CONDITIONS OF PURCHASE
1. APPLICABLE TERMS AND CONDITIONS. Purchaser and Seller agree that the
following statement shall be printed on the front of any Purchase Order or
Contract for the sale of XONON Modules or XONON Components (herein referred to
individually or collectively as the "Product" or "Products" or "Goods"): "The
purchase and sale of the Products set forth in this Purchase Order shall be
subject to the Terms and Conditions of Purchase attached as Exhibit C to the
Collaborative Commercialization and License Agreement (the "CCLA"), dated
November 19, 1998, between Catalytica Combustion Systems, Inc., (the "Seller")
and General Electric Company (the "Purchaser"). Any other terms and conditions
included in this Purchase Order or in any acknowledgment of this Purchase Order
shall not be applicable to this purchase and sale of Products.
2. PRICES AND PAYMENTS. Unless otherwise stated on the face of this Purchase
Order, Seller shall invoice Purchaser for one hundred percent (100%) of the
purchase price within thirty (30) days after delivery. Purchaser shall remit
full payment of the purchase price to Seller by wire transfer within forty five
(45) days of receipt of Seller's invoice. All prices specified here in are firm
and shall not be subject to change, and includes all federal and state income
taxes and payroll taxes. Seller's invoice shall separately state any local
sales, use, VAT or other types of local taxes and duties applicable to the goods
furnished to the Purchaser. No extra charges of any kind will be allowed unless
specifically agreed to in writing by the Purchaser. Purchaser shall be entitled
at all time to set-off any amount owing, excluding disputed claims, at any time
from Seller to Purchaser against any amount payable at any time by Purchaser in
connections with this between Purchaser and Seller.
3. DELIVERY, RISK OF LOSS, TITLE TRANSFER, DELAY. Products manufactured in
the United States shall be delivered to Purchaser FOB Seller's factory. Unless
otherwise stated on the face of this Purchase Order, Purchaser shall be
responsible for risk of loss and all transportation and insurance costs after
delivery. Unless otherwise stated on the face of this Purchase Order title shall
pass to Purchaser upon placement of the goods on the trucks or other transit of
Purchaser's designated carriers. Goods delivered to Purchaser in advance of the
delivery schedule may be returned to Seller at Seller's expense.
Seller shall use all reasonable efforts to meet any delivery schedule specified
by Purchaser, provided Purchase Orders are placed in a timely fashion and
contain all necessary information including but not limited to a full
description of the goods ordered, the quantity ordered and requested delivery
dates. All Purchase Orders shall be placed as
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
firm orders for goods setting forth the quantities of goods required and the
requested delivery date(s). Purchaser shall endeavor to place purchase orders
not later than one hundred and twenty (120) days prior to the requested delivery
date. Provided Purchaser has complied with the foregoing one hundred and twenty
(120) day prior notification, and except to the extent caused by an Excusable
Delay as defined in Article 15 of the CCLA, Seller shall be liable for
liquidated damages for failure to achieve delivery on or prior to Purchaser's
designated delivery date at the rate of 0.5% of the purchase price allocable to
the delayed goods per day (beginning with the fifteenth (15) day after the
delivery date). Seller's liquidated damages shall not exceed ten percent 10% of
Purchase Order purchase price. Purchaser shall waive such liquidated damages if
Purchaser's contract with its customer does not include a provision for delay
liquidated damages between Purchaser and its customer or if Seller is able to
remedy its delay at its sole cost such that Purchaser does not incur any delay
liquidated damages to its customer arising out of the delay of the Products. If
Seller is more than sixty (60) days late, Purchaser shall have the right to
terminate this Purchase Order.
4. PURCHASER'S PROPERTY. Unless otherwise agreed in writing, all tools,
equipment or material of every description furnished to Seller by Purchaser or
specially paid for by Purchase, and any replacement thereof, or any materials
affixed or attached thereto, shall be and remain the personal property of
Purchaser. Such property and, whenever practical, each individual item thereof,
shall be plainly marked or otherwise adequately identified by Seller as the
property of the Purchaser and shall be safely stored separate and apart from
Seller's property. Seller shall not substitute any property for Purchaser's
orders. Such property, while in Seller's custody or control, shall be held at
Seller's risk, shall be kept insured by Seller at Seller's expense in an amount
equal to the replacement cost with loss payment to Purchaser and shall be
subject to removal at Purchaser's written request, in which event Seller shall
prepare such property for shipment and shall redeliver to Purchaser in the same
condition as originally received by Seller, reasonable wear and tear excepted,
all at Seller's expense.
5. DRAWINGS. Unless otherwise specifically agreed in writing by Purchaser,
any check or approval of drawings by Purchaser will be for Seller's convenience
and will not relieve Seller of its responsibility to meet all requirements of
this order.
6. CHANGES. Subject to the order scheduling requirements in Article 7.2.3 of
the CCLA and Article 3 above, the Purchaser may at any time, in writing, make
changes within the general scope of this Purchase Order in any one or more of
the following: (a) drawings, designs or specification where the goods to be
furnished are to be specially manufactured for the Purchaser in accordance
therewith, but not Seller's specifications which the parties have mutually
agreed upon under the CCLA as being applicable to this Purchase Order, or other
mutually agreed upon specifications; (b) method of packing; (c) time of
delivery; (d) the amount of Purchaser's furnished property; or (e) quality. If
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
any such changes causes an increase or decrease in the cost of, or the time
required for the performance of any work under this Contract, whether changed or
not changed, an equitable adjustment shall be made in the Contract Price or
delivery schedule, or both, and the Purchase Order shall be modified in writing
accordingly. Notification to Purchaser of any Claim by the Seller for
adjustment under this clause must be asserted within thirty (30) days from the
date of receipt by the Seller of the notification of change. Any change to this
order shall be authorized only by a duly executed Purchase Order amendment.
7. INSPECTION. (a) All goods (which term throughout this order includes
without limitation raw materials, components, intermediate assemblies, tools and
end products) shall be subject to inspection and test by the Purchaser and its
Customer, (where GE is required under its contracts with its Customers to
provide inspection rights at Seller's facility, then Seller's agreement will not
be required) at all reasonable times and places, including the place of
manufacture; (b) If any inspection or test is made on the premises of Seller or
its supplier, Seller, without additional charge, shall provide all reasonable
facilities and assistance for the safety and convenience of the inspectors in
the performance of their duties and Purchaser shall comply with Seller's
premises, security and safety rules; (c) acceptance or rejections of the goods
shall be made as promptly as practical after delivery, except as otherwise
provided in this order, but failure to inspect and accept or reject goods or
failure to detect defects by inspection, shall neither relieve Seller from
responsibility for such goods as are not in accordance with the order
requirements nor impose liabilities on Purchaser thereof; (d) Seller shall
provide and maintain an inspection and process control system mutually
acceptable to Purchaser and Seller covering the goods hereunder. Records of all
inspection work by Seller shall be kept complete and available to Purchaser
during the performance of this order and for such longer periods as may be
specified in this order, not to exceed five (5) years after order date. Seller
will allow representative of Purchaser and Purchaser's customers reasonable
access to the facilities involved in performing this order for purposes of
reviewing the status and progress of production, subject to compliance with
Seller's facility security and safety rules. If during the course of any
inspection in Seller's factory, Purchaser finds that any of the goods are
defective or otherwise not in conformity with the requirements of this Purchase
Order or the CCLA, including any drawings or specifications, Seller shall remedy
such non conformity at its own expense by reperforming any nonconforming service
or replacing any non conforming goods.
8. WARRANTIES. Seller warrants that all goods sold will be free of any claims
of any nature and by any third person and that Seller shall convey clear title
to Purchaser. Seller further warrants that the Products supplied by Seller to
Purchaser shall perform in accordance with agreed upon specifications and shall
be free from defects (a) in materials and workmanship, whatever the origin, (b)
in design having regard to the state of the art at the time of the order and
including defects arising from the choice of materials and / or
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
parts; (c) in manufacturing process; and (d) arising from non-suitability for
the use for which it was intended. This warranty shall take effect from the date
of acceptance of the Products by Purchaser and shall remain in force until the
earliest of the following to occur: (i) the gas turbine in which the Products
have been installed achieve 8000 operating hours; (ii) forty eight months from
Start-Up; or (iii) sixty (60) months after the delivery of the Products to
Purchaser. Start-Up means the time when the equipment installation is complete
and the gas turbine in which the Product has been installed is first
synchronized to the grid. Purchaser's sole remedy in the event of any breach of
this warranty shall, at Seller's option, be the replacement or repair in a
timely fashion of the defective Product. Seller shall make replacement Products
available and pay transportation, taxes, custom duties and insurance to the site
where the gas turbine is located. Any repaired or replaced Product shall be
warranted for 8000 operating hours, provided that in no event shall Seller's
warranty obligation extend beyond seventy two (72) months from the delivery of
the initial Product.
Purchaser shall notify Seller of obvious defects within sixty (60) days of
delivery and of latent defects within thirty (30) days of discovery.
The warranties set forth in this section shall not apply to any claims, problems
or defects which are the result of normal wear and tear, mishandling, misuse,
neglect or improper testing and repair by other than CCSI or its authorized
representatives.
THE EXPRESS WARRANTIES PROVIDED HEREIN ARE IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ALL OTHER WARRANTIES
ARE HEREBY DISCLAIMED AND EXCLUDED BY SELLER.
9. SUSPENSION; TERMINATION FOR CONVENIENCE. Purchaser may, at any time, by
written notice to Seller and termination for convenience, suspend performance of
the work. Said notice of suspension shall specify the date of suspension and
the estimated duration of the suspension. Upon receiving any such notice of
suspension, Seller shall promptly suspend further performance of the work to the
extent specified, and during the period of such suspension shall properly care
for and protect all work in progress and materials, supplies, and equipment
Seller has on hand for performance of the work. Purchaser may at any time
withdraw the suspension of performance of the work as to all or part of the
suspended work by written notice to Seller specifying the effective date and
scope of withdrawal, and Seller shall resume diligent performance of the work
for which the suspension is withdrawn on the specified effective date of
withdrawal, subject to then existing contracts and commitments.
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Purchaser may terminate all or any part of this Purchase Order at any time by
providing written notice to Seller.
If this Purchase Order is canceled or terminated for the convenience of
Purchaser or suspended upon the direction of Purchaser for other than Seller
fault, in either case when there is less than 120 days until the scheduled
delivery date, Purchaser shall be responsible for, and shall pay Seller for
Product-in-process on a percent of completion basis, established on a
proportional basis, where fifty (50%) completion is assumed on day one hundred
and twenty (120) and one hundred (100%) completion is assumed on day thirty (30)
in each case prior to the scheduled delivery date as a result of such
cancellation, termination or suspension, plus any uncancelable commitments made
by Seller, but not to exceed the amount of the Purchase Price allocable to the
terminated portion of this Purchase Order. Purchaser shall pay undisputed
amounts to Seller within thirty (30) days after Seller provides Purchaser with
an invoice.
10. DEFAULT. Except in instances of Excusable Delay as defined in Article 15
of the CCLA, Purchaser may by written notice of default to Seller, terminate
this Purchase Order, in whole or in part' (a) if Seller is greater than sixty
(60) days late in delivering the Products, at least twice in any given twelve
(12) month period, or (b) if Seller fails to comply with any of the material
terms and conditions of this Purchase Order and upon receipt of written notice
from Purchaser does not commence corrective action within ten (10) days and cure
such default within sixty (60) days. Upon termination, Purchaser may procure
goods similar in function to the Products, such as SCR or DLN components, and,
subject to the Limitation of Liability set forth below, Seller shall reimburse
Purchaser such costs Purchaser incurs in excess of the Purchase Price.
As an alternative remedy, and in lieu of termination for default, Purchaser may
in its sole discretion, elect to extend the time for delivery and/or waive other
deficiencies in Seller's performance in which case an equitable adjustment in
the Purchase Price shall be negotiated.
11. INDEMNITY AND INSURANCE - WORK ON SELLER'S PREMISES. Each Party (the
"Indemnifying Party") shall indemnify and hold harmless the other party, its
affiliates, officers, directors, agents and employees (the "Indemnified
Parties") against any losses resulting from any third party claim for death or
personal injury or damage to third party tangible real or personal property to
the extent such claim arises from the Indemnifying Party's negligence, gross
negligence or willful misconduct."
Seller shall take all reasonable precautions to prevent the occurrence of any
injury to persons or to property during the progress of work, and, except to the
extent that any such injury or damage is due solely and directly to Purchaser,
shall defend and indemnify Purchaser against any claim which may result in any
way from any act or omission of the
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Seller, its agents, employees, or subcontractors. Seller shall maintain
comprehensive general liability (including contractual liability coverage
insuring the liabilities assumed above). Automobile Liability and Employers and
Employers Liability insurance with limits as reasonably required by Purchaser,
as well as appropriate Workers Compensation Insurance as well protect Seller
from all claims under any applicable Workers Compensation and Occupational
Disease Act. Seller shall furnish to Purchaser, upon written request, a
Certificate of Insurance completed by its insurance carrier(s) certifying that
insurance coverages are in effect and will not be canceled or materially changed
until ten days after prior written notice has been delivered to the purchaser as
required by Purchaser.
12. LIMITATION OF LIABILITY. The total liability of Seller, on all claims of
any kind, whether in contract, warranty, indemnity, tort (including negligence),
strict liability, or otherwise, arising out of the performance or breach of this
Purchase Order shall not exceed two (2) times the Purchase Price.
In no event, whether as a result of breach of contract, warranty, indemnity,
tort (including negligence), strict liability, or otherwise, shall either party
or their respective subcontractors or suppliers be liable for loss of profit or
revenues or for any special, consequential, incidental, indirect or exemplary
damages.
13. PROPER BUSINESS PRACTICES. Seller shall comply with all laws dealing with
improper or illegal payments, gifts or gratuities, and Seller agrees not to pay,
promise to pay or authorize the payment of any money or anything of value,
directly or indirectly to any person for the purpose of illegally or improperly
inducing a decision or obtaining or retaining business in connection with this
Order.
14. COMPLIANCE WITH LAWS General. Seller agrees to comply with the applicable
provisions of any federal, state, provincial or local law or ordinance and all
lawful orders, rules, and regulations issued thereunder. In addition, Seller
shall comply with Good Industry Practices, including the exercise of that degree
of skill, diligence, prudence and foresight which can reasonably be expected
from a competent Seller who is engaged in the same type of manufacture under
similar circumstances in a manner consistent with all applicable requirements
and with all applicable general recognized international standards. No forced
or prison labor may be used in manufacturing the products to be supplied under
this contract. If forced or prison labor is determined to have been used in the
manufacture of the products supplied hereunder the Purchaser shall have the
right to immediately terminate the contract without further compensation to the
Seller.
Provisions applicable to orders for work to be performed, goods to be produced,
or services to be rendered within the United Stated. (a) Seller shall comply
with any
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
provisions, representations or agreements or contractual clauses required
thereby to be included or incorporated by reference or operation of law in the
contract resulting from acceptance of this order and dealing with: (I) Equal
Opportunity (Executive Order 11246 as amended by Executive Orders 113575 and
10286 and applicable regulations promulgated pursuant thereto); (ii) Employment
of Veterans (Executive Order 11701 and applicable regulations promulgated
pursuant thereto); (iii) Employment of the Handicapped (Executive Order 11758 as
amended by Executive Order 11867 and applicable regulations promulgated pursuant
thereto); (iv) Employment Discrimination Because of Age (Executive Order 11141
and applicable regulations promulgated pursuant thereto); and (v) Utilization of
Disadvantaged and Business Enterprises (Executive Order 11625. Public Law 95-507
and applicable regulations promulgated pursuant thereto). (b) Seller certifies
that with respect to orders which exceed $10,000 it is in compliance with the
requirements for nonsegregated facilities set forth in 41 CFR Chapter 60-1.8.
(c) Seller warrants that each chemical substance constituting or contained in
goods sold or otherwise transferred to Purchaser hereunder is on the list of
chemical substances compiled and published by the Administrator of the
Environmental Protection Administration pursuant to the Toxic Substances Control
Act (P.L. 92-573 as amended, and the Federal Hazardous Substances Act (P.L. 92-5
16) as amended and lawful standards and regulations thereunder. (d) In accepting
this order Seller represents that the goods to be furnished hereunder were or
will be produced in compliance with the requirements of the Fair Labor Standards
Act of 1938, as amended, including Section 12(a) and Seller shall insert a
certificate to that effect on all invoices submitted in connection with this
order.
Provisions applicable to orders for goods or materials, the destination of
which, final or intermediate, is in the United States. Seller warrants that
each chemical substance constituting or contained in goods sold or otherwise
transferred to Purchaser hereunder is on the list of chemical substances
compiled and published by the United States Administrator of the Environmental
Protection Administration pursuant to the Toxic Substances Control Act (P.L. 92-
573) as amended, and the Federal Hazardous Substances Act (P.L. 92-516) as
amended and lawful standards and regulations thereunder.
Provisions applicable to orders for goods from outside the United States, to be
delivered DEQ, FAC or DAF (INCO TERMS 1990) at point of entry to the United
States. Seller warrants that all sales made hereunder are or will be made at
not less than fair value under the United States Anti-dumping Law (19 U.S.C.
SEC. 160o ct set.), and Seller will indemnify, defend and hold Purchaser
harmless from and against any costs or expenses (including, but not limited to,
any anti-dumping duties which may be imposed) arising out of or in connection
with breach of this warranty.
Provisions applicable to orders for goods from outside the United States, to be
delivered within the United States. Seller agreed that Purchaser will not be a
party to the
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
importation of the goods, that the transaction(s) represented by this order will
be consummated subsequent to importation and that Seller will neither cause nor
permit Purchaser's name to be shown as "importer of record" on any customs
declaration. If Seller will be the importer of record to the United States,
Seller shall provide Purchaser with Customs Form 331 entitled "Certificate of
Delivery" properly executed as well as Customs Form 7501 "Entry Summary" and a
copy of Seller Invoice.
Provisions applicable to technical data provided to Seller from within the
United States. Seller hereby assures the Purchaser that all technical data
received from Purchaser will not be exported from the United States or re-
exported from Seller's country without the express written concurrence to such
export by Purchaser.
15. PACKING, PRESERVATION AND MARKING. Packing, preservation and marking
requirements will be in accordance with the specification drawing or as
specified on the Purchaser Order. If none specified, use the best commercially
accepted practice.
16. GOVERNING LAW. This order shall in all respects be governed by and
interpreted in accordance with the substantive law of the State of New York,
U.S.A. excluding its conflicts of law provisions. The Parties hereby exclude
the application of the United Nations Convention on Contracts for the
International Sale of Goods.
17. DISPUTE RESOLUTION. Purchaser and Seller shall attempt amicably to resolve
any controversy, dispute or difference arising out of this Order, failing which
either party may initiate litigation. Litigation arising from this Order may be
brought only in the United States District Court for the Southern District of
New York or, if such court lacks subject matter jurisdiction, in the Supreme
Court of the State of New York in and for New York County. The Parties hereby
submit to the jurisdiction of said courts, and waive any defense of forum non
conveniens.
18. YEAR 2000 COMPLIANCE WITH DATE PROCESSING REQUIREMENTS. In addition to any
other warranties and representations provided by Supplier to Purchaser, whether
pursuant to this purchase order, by law, equity, or otherwise, Seller
represents, warrants and covenants that Seller shall use all reasonable efforts
to insure that (a) any product(s) and/or service(s) provided by Seller hereunder
including, without limitation, each item of hardware, software, or firmware; any
system, equipment, or products consisting of or containing one or more thereof;
and any and all enhancements, upgrades, customizations, modifications,
maintenance and the like ("Products/Services") shall be Year 2000 Compliant at
the time of delivery and at all times thereafter and in all subsequent updates
or revisions of any kind, and (b) Seller's supply of the Products/Services to
Purchaser shall not be interrupted, delayed, decreased, or otherwise affected by
dates prior to, on, after or spanning January 1, 2000. For purposes of this
purchase order, the term "Year 2000 Compliant" means that (1) the
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Products/Services accurately process, provide and/or receive date data
(including without limitation calculating, comparing, and sequencing), within,
from, into, and between centuries (including without limitation, the twentieth
and twenty-first centuries, the last year of a century (e.g. 1999) and the first
year of the next century (e.g. 2000), and leap year calculations, and (2)
neither the performance nor the functionality nor Seller's supply to Purchaser
of the Products/Services will be affected by dates prior to, on, after, or
spanning January 1, 2000. Moreover, Seller convenants and agrees all reasonable
steps shall be taken to insure that the design of said Product/Services to
ensure compliance with the foregoing warranties, representations and covenants
shall include, without limitation, date data century recognition, calculations
that accommodate same century and multi-century formulae and date values, and
date data interface values that reflect the century. In particular, but without
limitation, (I) no value for current date will cause any error, interruption, or
decreased performance in the operation of such Products/Services, (ii) all
manipulations of date-related data including, but not limited to, calculating,
comparing, sequencing, processing and outputting) will produce correct results
for all valid dates, including when used in combination with other products,
(iii) date elements in interfaces and data storage will specify the correct
century to eliminate date ambiguity without human intervention, including leap
year calculations, (iv) where any date element is represented without a century,
the correct century will be unambiguous for all manipulations involving that
element, (v) authorization codes, passwords, and zaps (purge functions) should
function normally and in the same manner prior to, on, after and spanning
January 12, 2000, including, without limitation, the manner in which they
function with respect to expiration dates and CPU serial numbers. No obligation
of Seller under this purchase order shall be excused by reason of the failure of
Seller's or any other person's Products/Services to be Year 2000 Compliant, nor
shall such occurrence(s) be deemed a force majeure event. As used in this
purchase order, the words "date" and "dates" shall be deemed to include "time".
In the event of breach of this warranty, in addition to any other remedies
Purchaser may have, whether pursuant to this purchase order, by law, equity or
otherwise, Purchaser shall, at its option, be entitled to repair or replacement
of any non-compliant Products/Services, at no cost to Purchase, within sixty
(60) days after notice of breach from Purchaser to Seller.
Notwithstanding anything in this purchase order to the contrary, the period of
the representations, warranties and covenants set forth in this section shall
extend at least until January 31, 2001. Any statute of limitations that might
be applicable to Seller's Year 2000 Compliant warranty and representation shall
not accrue or begin to run until the later of January 31, 2001 or the time when
such statute of limitations would otherwise accrue or begin to run, and, with
respect to any claim based on any failure of the Products/Services to be Year
2000 Compliant, Seller shall not assert any defense based
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THE SYMBOL "[*]" IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
on or alleging the passage of time from the effective date of this purchase
order to January 31, 2001.
19. WAIVER. No claim or right arising out of a breach of this Contract can be
discharged in whole or in part by a waiver or renunciation of the claim or right
unless the waiver or renunciation is supported by consideration and is in
writing signed by the aggrieved party. The failure of Purchaser to enforce at
any time or for any period of time any of the provisions hereof shall not be
construed to be a waiver of such provisions or of the right to Purchaser
thereafter to enforce each and every such provision.
20. ENTIRE AGREEMENT. This Purchase Order and the CCLA with such documents as
are expressly incorporated herein by reference, is intended by the parties as a
final expression of their Agreement with respect to such terms as are included
herein, and is intended also as complete and exclusive statement of the terms of
their Agreement. No course of prior dealings between parties and no usage of
the trade shall be relevant to determine the meaning of this Agreement even
though the accepting or acquiescing party has knowledge of the performance and
opportunity for objection. The invalidity, in whole or in part, of any of the
foregoing articles or paragraphs of this Purchase Order shall not affect the
remainder of such article or paragraphs or any other article or paragraphs of
this Purchase Order.
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