Exhibit 10.51
LICENSE AGREEMENT
THIS
LICENSE AGREEMENT (“ Agreement ”) is dated as of
September 29, 2006 (“ Effective Date ”), by
and between Catalytica Energy Systems, Inc., a Delaware corporation
(“ CESI ”), and Kawasaki Heavy Industries, Ltd.,
a Japanese corporation (“ Kawasaki ”).
WHEREAS,
CESI and Kawasaki have entered into that certain Asset Purchase
Agreement dated simultaneously herewith (“ Asset Purchase
Agreement ”);
WHEREAS,
CESI has developed expertise and technology of a catalytic
combustion system that incorporates catalytic modules that are
utilized to oxidize hydrocarbon fuels in the combustion system of
gas turbines;
WHEREAS,
Kawasaki desires to obtain from CESI certain patents and technical
materials associated with such CESI catalytic combustion system
that are necessary or useful in the manufacturing, operation,
distribution, sales, and support of such catalytic combustion
systems for Small Gas Turbines; and
WHEREAS,
CESI desires to grant a license of such patents and technical
materials to Kawasaki.
NOW,
THEREFORE, in consideration of the covenants contained herein and
other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as
follows:
1. Definitions .
Capitalized terms not otherwise defined herein shall have the
meanings specified in the Asset Purchase Agreement.
1.1.
“ Affiliate ” shall have the meaning set forth
in the Asset Purchase Agreement.
1.2.
“ Assigned Patents ” shall have the meaning set
forth in the Asset Purchase Agreement.
1.3.
“ Patents ” means patents (including utility
models, as well as divisions, reissues, continuations,
continuations-in-part, renewals and extensions of any of the
foregoing) and provisional and regular applications therefor, and
patents which may be issued on such applications.
1.4.
“ SGT Catalytic Module ” means a catalytic
container module designed for use solely with Small Gas Turbines to
reduce the nitrous oxide emissions of such Small Gas
Turbines.
1.5.
“ Small Gas Turbines ” shall have the meaning
set forth in the Asset Purchase Agreement and shall include the
term “SGT.”
1.6.
“ Technical Information ” means all technical
information, know-how, trade secrets, 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) that are required or reasonably necessary for Kawasaki to
continue the manufacturing of SGT Catalytic Modules from and after
the Closing Date.
2. License .
2.1.
Multi-Use Patents . The parties acknowledge that the patents
listed in Exhibit A (“ Multi-Use Patents ”
or “ Licensed Patents ”) are applicable to both
Small Gas Turbines and to other products and technologies,
including, without limitation, gas turbines that are not Small Gas
Turbines. Kawasaki may request in writing from time to time that
CESI identify which Multi-Use Patents, if any, that it has decided
to abandon, and CESI shall respond in writing to such requests.
Subject to the terms and conditions of this Agreement, with respect
to any Multi-Use Patents that CESI indicates in any such response
that it has decided to abandon (“ Abandoned Multi-Use
Patents ”), CESI shall, upon Kawasaki’s written
request, and without additional consideration, assign such
Abandoned Multi-Use Patents to Kawasaki. Notwithstanding anything
to the contrary, the obligations of CESI under this
Section 2.1 (a) shall not apply to any third parties,
including, without limitation, any successors or assigns of CESI or
any acquirers or other assignees of any Multi-Use Patents, and
(b) shall terminate with respect to any Multi-Use Patent upon
the acquisition or other transfer of such Multi-Use Patent
(including, without limitation, as a result of a voluntary
assignment of such Multi-Use Patent to a third party, an
acquisition by a third party of CESI assets that include such
Multi-Use Patent, or a merger involving CESI).
2.2.
Licenses .
(a)
Patents . Subject to the terms and conditions of this
Agreement, CESI hereby grants to Kawasaki a perpetual, fully
paid-up, royalty-free, worldwide, irrevocable license, under the
Multi-Use Patents, to make, have made, test, use, sell, offer to
sell, import, export, distribute, market, promote, sublicense,
create improvements, and commercially exploit SGT Catalytic
Modules.
(b)
Technical Materials . Subject to the terms and conditions of
this Agreement, CESI hereby grants to Kawasaki a perpetual, fully
paid-up, royalty-free, worldwide, irrevocable license to:
(i) use,
modify, create derivative works of, and reproduce the technical
materials listed in Exhibit B (“ New Technical
Materials ”), Technical Information associated with the
Multi-Use Patents (the “ Multi-Use Technical
Information ”), and the Technical Information and Xonon
Control Algorithms (as such terms are defined in the TDTA) owned by
CESI and previously delivered by CESI to Kawasaki pursuant to the
TDTA (the New Technical Materials, Multi-Use Technical Information,
and such Technical Information and Xonon Control Algorithms,
collectively, “ Licensed Technical Materials ”)
as reasonably necessary to design, develop, manufacture, have made,
test, use, sell, offer to sell, import, export, distribute, market,
promote, sublicense, create improvements, and commercially exploit
SGT Catalytic Modules;
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(ii) distribute
the Licensed Technical Materials to Kawasaki’s Affiliates,
and sublicense to such Affiliates the rights granted in subsection
(i) above;
(iii) distribute
the Licensed Technical Materials to contractors and consultants of
Kawasaki and its Affiliates (collectively, “ Kawasaki
Contractors ”), and sublicense to such contractors and
consultants the rights granted in subsection (i) above solely
on behalf of Kawasaki and its Affiliates; and
(iv) distribute
the Licensed Technical Materials to customers and potential
customers of SGT Catalytic Modules and associated Small Gas
Turbines (collectively, “ Kawasaki Customers ”)
as Kawasaki reasonably deems appropriate in the Small Gas Turbine
market, and sublicense to such customers and potential customers
the right to use such Licensed Technical Materials in the offering
for sale, sale, service and repair of SGT Catalytic Modules and
associated Small Gas Turbines.
CESI
shall use commercially reasonable efforts to deliver the New
Technical Materials to Kawasaki in both hardcopy and in electronic
form.
(c)
Authorized Users . Kawasaki shall be responsible for
compliance by its Affiliates, Kawasaki Contractors and Kawasaki
Customers (collectively, “ Authorized Users ”)
with the terms and conditions of Sections 2.2 and 2.3 of this
Agreement to the same extent as Kawasaki itself, and any act or
omission of any Authorized User shall constitute an act or omission
of Kawasaki. Kawasaki and the Authorized Users shall not use or
disclose any Licensed Technical Information except as permitted in
Section 2.2.
(d)
Exclusivity . CESI agrees that Kawasaki’s licenses as
to the Licensed Patents and Licensed Technical Materials under
Sections 2.2(a) and 2.2(b) shall be EXCLUSIVE to
Kawasaki as to SGT Catalytic Modules. CESI agrees that as of the
Effective Date, CESI shall have no right to manufacture, make, have
made, license, sublicense, distribute, or otherwise commercially
exploit the Licensed Technical Materials in connection with any SGT
Catalytic Modules without the prior written consent of
Kawasaki.
(e)
Marking; Requests for Disclosure . Kawasaki shall (and shall
cause its Affiliates and Kawasaki Contractors to) mark
substantially permanently and legibly, and shall require the
permanent and legible marking of, all SGT Catalytic Modules and
related documentation with such patent notice as may be required
under Title 35, United States Code or other applicable rules or
regulations in foreign jurisdictions. With respect to the Licensed
Patents, Kawasaki shall respond to any request for disclosure under
35 U.S.C. § 287(b)(4)(B) only by notifying CESI of the request
for disclosure.
2.3.
Sublicense Limitations . If Kawasaki grants any sublicense
to the Licensed Patents or the Licensed Technical Materials:
(A) Kawasaki shall be responsible for compliance by the
sublicensee with the terms and conditions of Sections 2.2 and
2.3 of this Agreement to the same extent as Kawasaki itself,
(B) any act or omission of a sublicensee shall constitute an
act or omission of Kawasaki, and (C) each sublicensee shall
agree in writing that it is subject to the terms and conditions of
Sections 2.2 and 2.3 of this Agreement (without the right to
further sublicense), and that CESI shall be third party beneficiary
of each such sublicense as necessary
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to
enforce its rights in the Licensed Patents and Licensed Technical
Materials. Notwithstanding subsection (C) to the contrary,
Kawasaki shall have the right to include in its specifications
sheets, product data sheets, support manuals and other marketing,
sales and support materials for SGT Catalytic Modules any Licensed
Technical Materials that are customarily included in such
materials, without entering into any writing with the recipients of
such materials.
2.4.
No Implied Rights . Each party hereby retains all rights not
expressly granted by this Agreement. Each party hereby disclaims
any and all implied licenses, rights and obligations, including any
licenses, rights or obligations that may be deemed granted by this
Agreement or the activities of the parties hereunder.
3. Xonon Trademark
.
3.1.
License . During the term of this Agreement, subject to the
terms and conditions of this Agreement, CESI hereby grants to
Kawasaki the EXCLUSIVE right to use the marks listed in
Exhibit C (the “ CESI Trademarks ”) on and
in relation to its sale of the SGT Catalytic Modules. Kawasaki
shall have the right to sublicense the foregoing right to its
Affiliates and contractors; provided that (a) Kawasaki shall
be responsible for compliance by its sublicensees with the terms
and conditions of Section 3 of this Agreement to the same
extent as Kawasaki itself, (b) any act or omission of any
sublicensee shall constitute an act or omission of Kawasaki, and
(c) each sublicensee shall agree in writing that it is subject
to the terms and conditions of Section 3 of this Agreement and
that CESI shall have a right of action against the sublicensee as
necessary to enforce the terms and conditions of this
Section 3. Nothing in this Agreement requires Kawasaki to use
any CESI Trademarks.
3.2.
Quality Control .
(a) Kawasaki
shall ensure that all use of the CESI Trademarks shall be in
accordance with the reasonable instructions and guidelines of CESI
as provided to Kawasaki from time to time.
(b) All
SGT Catalytic Modules that are marked using a CESI Trademark and
are manufactured by Kawasaki or any of its sublicensees
(“Marked Modules”) shall be of such quality as will, in
CESI’s reasonable judgment, protect and enhance the goodwill,
image and reputation adhering to the CESI Trademarks. Kawasaki
shall cooperate reasonably with CESI in enabling CESI to ascertain
that the Marked Modules meet CESI’s quality standards. Such
cooperation shall include, without limitat
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