INTELLECTUAL
PROPERTY LICENSE AGREEMENT
THIS INTELLECTUAL
PROPERTY LICENSE AGREEMENT (this “ Agreement ”)
is made this 19 th day of November 2008 (the “
Effective Date ”), by and between Lassen Energy, Inc.,
a California corporation (“ Lassen ”); DBK
Corporation, a Nevada corporation (“ DBK Corp
”); Darry Boyd, an individual and resident of California
(“ Boyd ”) (DBK Corp. and Boyd are collectively
referred to herein as (“ DBK ”); and NATCO
International Inc., a Delaware corporation (“ NATCO
”) (collectively referred to as the “ Parties
”).
RECITALS
WHEREAS, DBK is the
owner of certain intellectual property relating to solar power
technology and development, the specifications of which are
described in Exhibit A , (the " Lassen Solar Panels
"), a copy of which is attached hereto and hereby incorporated by
reference, and the uses of this intellectual property for
applications of one (1) Megawatt (" MW ") or less and the
development, construction and operation of solar/hydrogen/fuel cell
power plants and other uses requiring the ability to generate
greater than one (1) Megawatt of solar power with the Lassen Solar
Panels;
WHEREAS, the Lassen
Solar Panels consists of two (2) primary parts: i) Part A, which is
represented by Patent Application, Reference Number 20070204899,
filed with the United States Patent and Trademark Office on March
2, 2006 (the " Portion A "), a copy of which is attached
hereto as Exhibit B , and is hereby incorporated by
reference; and ii) Part B, a general description of which is
described on Exhibit C (the " Legacy Portion "), a
copy of which is attached hereto and hereby incorporated by
reference, and which includes trade secrets, trademarks, service
marks, trade names (including, in the case of trademarks, service
marks and trade names, all goodwill pertaining thereto),
inventions, copyrights, technology licenses, know-how, confidential
information, shop rights, technical data, drawings, diagrams,
designs, prototypes, engineering files, documentation, processes,
procedures, marketing techniques and/or materials, marketing plans,
timetables, strategies and development plans, charts, research,
design specifications either developed or acquired by DBK in
connection with the development of the Assigned Patents and the
Legacy Portion, and the documents (written or electronic), physical
properties of components of manufactured goods, techniques used or
sequences in manufacture, sources (suppliers) and costs of
components, costs of any aspect or phase of manufacture, profit
margins, sub-licensing agreements and other information pertaining
to customers, pricing policies and financial
information;
WHEREAS, on February 28,
2008, pursuant to an Assignment of Patents Agreement by and between
Boyd and Lassen, Boyd assigned to Lassen the patents associated
with the Lassen Solar Panels (“ Assigned Patents
”), a copy of which is attached hereto with Exhibit D
, and is hereby incorporated by reference;
WHEREAS, in April 2008
Lassen entered into an Amended and Restated Exclusive Intellectual
Property Licensing, Manufacturing and Purchase Agreement (the
“ DBK License Agreement ”), a copy of which,
along with all schedules, exhibits, and collateral agreements, are
attached hereto as Exhibit E, and hereby incorporated by
reference, with DBK Corp. pursuant to which DBK Corp. granted to
Lassen exclusive worldwide licenses to: (i) utilize the Legacy
Portion to manufacture and assemble the Lassen Solar Panel for uses
less than or equal to one (1) MW to exclusively sell to DBK Corp.
or its dealer network; (ii) develop, commercialize, directly
manufacture and/or sell products incorporating the inventions
contained in the Assigned Patents and DBK Licensed Property for
uses in excess of one (1) MW; and (iii) develop, construct
and operate the Power Plants with the ability to produce solar
energy in excess of one (1) MW (the Legacy Portion and the Power
Plants shall be collectively referred to as the " DBK Licensed
Property ");
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WHEREAS, pursuant to
Section 2.10(b) of the DBK License Agreement, Lassen has the
authority, subject to the prior written consent of DBK, to
sub-license the DBK Licensed Property and to enter into
distribution agreements with respect to the products manufactured
utilizing inventions contained in the DBK Licensed Property to such
persons and on such terms as Lassen deems appropriate;
WHEREAS, Lassen wishes
to grant, pursuant to its rights under the DBK License Agreement
and its ownership of the Assigned Patents, and NATCO wishes
to receive, a performance based irrevocable exclusive license
to manufacture and assemble, Lassen Solar Panels throughout the
Nations of India, and Canada, and the State of Hawaii, USA
(collectively referred to as the “ Licensed
Territories ”);
WHEREAS, Lassen wishes
to grant, pursuant to its rights under the DBK License Agreement
and its ownership of the Assigned Patents, and NATCO wishes to
receive, a performance based exclusive irrevocable license to
manufacture, assemble, utilize, distribute and sell the Lassen
Solar Panels in applications above 1 MW in the Licensed
Territories, which means for uses of 1 MW or greater such as small
and larger power plants, etc., but does not mean or imply the sale
of multiple panels above 1 MW in amount to a vendor for later sale
as individual units or any other like such use;
WHEREAS, Lassen wishes
to grant, pursuant to its rights under the DBK License Agreement
and its ownership of the Assigned Patents, and NATCO wishes to
receive, a performance based exclusive irrevocable license to
assemble panels for distribution to DBK or its dealers for uses
equal to or below 1MW;
WHEREAS, DBK has
consented to Lassen’s granting of the license(s) contained
herein to NATCO; and
WHEREAS, all Exhibits
referenced in this Agreement including, but not limited to,
Exhibits A through G, shall be attached before the release of
documents from Escrow as defined in Article VI of the NATCO Lassen
Agreement to which this License Agreement shall be attached as
Exhibit 2.1, and hereby incorporated by reference.
AGREEMENT
NOW THEREFORE, for and
in consideration of the foregoing, the warranties and
representations herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
1.1
Definitions
"Contracts" means all contracts, agreements,
arrangements, understandings, leases, licenses, commitments, sales
and purchase orders and other instruments.
"Governmental
Entity" means
any Federal, state or local or any foreign governmental, regulatory
or administrative authority, agency, official, body or commission
or any court, tribunal or arbitral body.
"Knowledge of
Warrantors" shall mean that Warrantors are
actually aware of a fact or a matter.
"Law"
means any Federal,
state, foreign or local statute, law, ordinance, regulation, rule,
code,
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order, judgment, decree,
other requirement or rule of law of the United States or any other
jurisdiction and any other similar act or law.
"Lien"
means any mortgage,
liability, lien (including any tax lien), obligation, pledge,
charge, security interest or encumbrance of any kind.
"Material Adverse
Effect" means
any change in or effect on the DBK Licensed Property or the Lassen
Licensed Property that, individually or in the aggregate (taking
into account all other such changes or effects), is, or is
reasonably likely to be, materially adverse to either: i) the value
of the DBK Licensed Property; or ii) the value of the Lassen
Licensed Property; or iii) the rights and licenses granted to NATCO
within this Agreement.
"Person"
means an individual,
corporation, partnership, association, trust or other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof.
ARTICLE
II
GRANT OF
LICENSES
2.1
License For
Manufacture, Assembly and Distribution of Lassen Solar
Panels .
Lassen hereby grants, bargains, assigns, licenses and conveys to
the NATCO a performance based irrevocable exclusive license to
utilize all of the intellectual property, including, but not
limited to, the Assigned Patents, the Legacy Portion, and the DBK
Licensed Property (collectively referred to as the “
Lassen Licensed Property ”) related to and necessary
for the manufacture, assembly, and sale of Lassen Solar Panels
throughout the Licensed Territories.
2.2
License For Use of
Lassen Solar Panels in Applications above 1 MW
. Lassen and DBK hereby
grants, bargains, assigns, licenses and conveys to NATCO a
performance based irrevocable exclusive license to utilize the
Lassen Solar Panels in any and all applications above 1MW
throughout the Licensed Territories, which means for uses of 1 MW
or greater such as small and larger power plants, etc., but does
not mean or imply the sale of multiple panels above 1 MW in amount
to a vendor for later sale as individual units or any other like
such use.
2.3
Distribution and sale
for uses above 1MW. Lassen and DBK hereby grants,
bargains, assigns, licenses and conveys to NATCO a performance
based irrevocable exclusive license to sell and distribute the
Lassen Solar Panels for any and all applications above 1 MW
throughout the Licensed Territories, which means the sale and
distribution of the Lassen Solar Panels for uses of 1 MW or greater
such as small and larger power plants, etc., but does not mean or
imply the sale of multiple panels above 1 MW in amount to a vendor
for later sale as individual units or any other like such
use.
2.4
Distribution
and sale for uses equal to or below 1MW. Lassen and DBK
hereby grants, bargains, assigns, licenses and conveys to NATCO a
performance based irrevocable exclusive license to sell and
distribute the Lassen Solar Panels for uses equal to or below 1MW
to DBK or its dealer network.
2.5
DBK Grants NATCO the
Right to Obtain Distribution Rights in Licensed
Territories. To the extent in any of the
licensed territories that distribution, sales and service rights
for uses of the Lassen Solar Panel equal to or below 1MW are
available NATCO may at is sole discretion acquire any or all of
such from DBK as per DBK’s established dealership agreement,
a copy of which is attached hereto as Exhibit F and a
current list of Dealers in the License Territories attached hereto
as Exhibit G .
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2.6
License of Related
Rights .
To the extent that Lassen or DBK owns or controls any future
intellectual property that might otherwise block or interfere with
NATCO’s exercise of the rights assigned or licensed to NATCO
under this Agreement (collectively referred to as “
Related Rights ”), Lassen and/or DBK hereby grants to
NATCO a performance based, exclusive, fully transferrable
sublicensable perpetual, irrevocable, royalty-free except for
royalties required as a part of this Agreement, fully paid-up
license to make (and have made), use, offer for sale, sell, import,
copy, modify, distribute, display, perform or transmit any
products, methods or other materials of any kind that are covered
by such Related Rights, to the extent necessary to enable NATCO and
its employees, contractors, affiliates, sub licensees and customers
to exercise all of the rights assigned or licensed to NATCO under
this Agreement.
2.6
General Duties of
Lassen & DBK . Lassen and DBK shall provide NATCO
with all information related the completion of NATCO’s duties
hereunder, including, but not limited to proprietary information
related to and necessary for both the manufacture, assembly,
distribution and sale of Lassen Solar Panels in the Licensed
Territories as it relates to the licenses granted in Sections 2.1,
2.2, 2.3, 2.4 and 2.5 above, except it is understood that the
Legacy Portion of the Lassen Solar Panel is protected by trade
secrets of DBK and these shall be provided in quality condition
ready for assembly to the Lassen Solar Panel by DBK or Lassen in
event of DBK’s failure to perform.
2.7
General Duties of
NATCO .
NATCO shall use its best efforts to effectively develop and
promote widespread use of the Lassen Solar Panels throughout the
Licensed Territories. Additionally, six (6) months from the
date that NATCO receives written notice, delivered pursuant to
Section 10.1 herein, from Lassen and DBK that Lassen has obtained
UL certification on the Lassen Solar Panels, or the payment of the
License Fee, whichever is later, NATCO shall begin the process of
establishing assembly facilities in the Licensed Territories.
Lassen agrees to advise NATCO as to standards, processes, and
procedures of such assembly facilities. The facilities shall be
established and operational within three (3) years of the
notification by Lassen of the UL certification, unless mutually
agreed to otherwise by the Parties.
ARTICLE
III
OWNERSHIP
3.1
Ownership of Lassen
Licensed Technology . NATCO hereby acknowledges
that, subject to the DBK Licensing Agreement, Lassen is and shall
be the exclusive owner of all right, title and interest in and to
the Lassen Licensed Technology.
3.2
Foreign Licensed
Patents . The
Parties agree that, Lassen or DBK Corp. shall have the sole right
and discretion to determine whether, when and if to apply for
foreign patents covering the inventions contained in the Lassen
Licensed Property. In the event that Lassen or DBK Corp. determines
to apply for foreign patents covering the inventions contained in
the Lassen Licensed Property, they shall prosecute such foreign
patent applications at their sole expense. Any such foreign patents
shall be prosecuted in the name of Lassen or DBK Corp. Lassen and
DBK Corp hereby agree that NATCO shall have and is hereby granted
the same license rights with respect to any such foreign patents as
NATCO is granted with respect to the Lassen Licensed Property by
Sections 2.1, 2.2, 2.3, 2.4, 2.5, and 2.6 of this Agreement. NATCO
agrees to cooperate with Lassen or DBK Corp. in prosecuting any
such patent applications and, subsequent to the granting of any
such patents, Lassen or DBK Corp agree to cooperate with NATCO to
confirm NATCO's exclusive license rights throughout the Licensed
Territories and hereby appoints NATCO as its attorney in fact for
such purposes.
3.3
Future Improvements
and Discoveries . The Parties acknowledge and agree
that, except as expressly proscribed by this Agreement, Lassen
shall have the right to continue Lassen's research and development
activities in building materials and designs. Should those
activities produce new patents,
4
trade secrets, or
know-how (“ New Patents ”), which arise
exclusively from Lassen’s independent activities, Lassen
hereby grants to NATCO, in accordance to the terms set forth in
this Agreement, exclusive license rights to the New Patents
pursuant to Section 2.6 herein.
ARTICLE
IV
LICENSE FEE &
ROYALTY
4.1
License
Fee .
In consideration for the licenses granted hereunder, NATCO
will pay to Lassen a license fee of $1,000,000 USD (the “
License Fee ”), of which an initial payment of
$200,000 (the “ Initial Payment ”) shall be due
and payable within 25 days of Lassen providing NATCO and NATCO
acceptance of a report about the viability of the Lassen Solar
Panels pursuant to Section 6.1 of the Agreement, dated November 19,
2008 by and between Lassen and NATCO (the “ Lassen NATCO
Agreement ”). NATCO shall have three (3) business
days following its receipt of the written report described in
Section 6.1(a) of the Lassen NATCO Agreement to either accept or
reject the report or to request additional information or
verification from the expert providing the report. In the
event that NATCO rejects the report, NATCO may terminate this
Agreement effective immediately. In the event NATCO accepts
the report, it shall, within 25 days thereafter, pay the Initial
Payment. The balance of the $1,000,000 USD License Fee, which will
be $800,000 shall be due and payable within 60 days following the
Initial Payment or 90 days from Closing, whichever is longer, and
NATCO shall have no right to use the licenses granted herein under
2.1, 2.2, 2.3, 2.4, 2.5, and 2.6 until such payments are made in
full and received by Lassen. The payments required pursuant to this
Section 4.1 shall be sent to: Lassen Energy, Inc., if by mail to
595 South Bluff Street #9, St George UT 84770; or if by wire:
Lassen Energy, Inc., Wells Fargo Bank, Account No:
9737583287, ABA No: 121000248. Also a confirming email on the day
sent to the CFO for Lassen.
4.2
Application of
License Fee .
Lassen agrees that it shall use the License Fee as
specifically directed by the Lassen NATCO Agreement.
4.3
Royalty
Payment .
In addition to the License Fee, Lassen shall be entitled to
receive a royalty in the amount of 2% of the gross revenue
generated from both the sales of the Lassen Solar Panels through
DBK and its dealers, and the applications and uses of the Lassen
Solar Panels above 1MW (the “ Royalty ”).
Payment of the Royalty shall be due each quarter, and the payments
required pursuant to this Section 4.3 shall be sent to: Lassen
Energy, Inc., if by mail to 595 South Bluff Street #9, St George UT
84770; or if by wire: Lassen Energy, Inc., Wells Fargo Bank,
Account No: 9737583287, ABA No: 121000248. Also a confirming
email on the day sent to the CFO for Lassen. After a period of: i)
three (3) years from time the Lassen Solar Panel receives UL
Certification, NATCO shall have business activities sufficient that
the amount of the Royalty shall be at least $500,000 annually;
ii) four (4) years from the time the Lassen Solar Panel
receives UL Certification, NATCO shall have business activities
sufficient that the amount of the Royalty shall be at least
$1,000,000 annually; and iii) five (5) years from the time the
Lassen Solar Panel receives UL Certification, NATCO shall have
business activities sufficient that the amount of the Royalty shall
be at least $2,000,000 annually (all of the foregoing are
collectively referred to as the “ Required Royalty
Payments ”). In the event that NATCO fails to meet
the foregoing Required Royalty Payments, NATCO shall have the
right, but not the obligation, to pay to Lassen the balance
necessary to meet the Required Royalty Payments. In the event
that NATCO fails to meet the Required Royalty Payments either
through sales, or through the payment as prescribed herein, the
license rights herein granted shall be suspended as defined in 6.2
below until methods to generate such revenues have been established
and mutually approved.
4.4
Investigative
Rights .
For each twelve month (12) period after the closing and release
Escrow of documents as agreed to in the Lassen NATCO Agreement,
NATCO shall provide to Lassen, and/or its counsel, accountants,
auditors and other authorized representatives, full access during
normal business hours
5
and upon reasonable
advance written notice, which for purposes of this License
Agreement shall be twenty (20) business days, to all of it’s
properties, books, contracts, commitments and records for the
purpose of examining the same as to the amount of and accuracy of
the royalty payments for the previous twelve (12) month period.
ARTICLE
V
PURCHASE AND
SUPPLY
5.1
Purchase
. DBK Corp. agrees
to sell to NATCO and NATCO agrees to purchase from DBK Corp., the
Legacy Portion of the Solar panel (see Exhibit A) related to the
manufacture of the Lassen Solar Panels. DBK Corp and Lassen further
agrees upon request from NATCO, to supply NATCO with all of the
other materials required for the manufacture of the Lassen Solar
Panel NATCO shall have the right, but not the obligation, to
purchase from Lassen and DBK all material necessary for the quality
manufacture and assembly of the Lassen Solar Panel; provided
however that in the event that NATCO chooses to acquire all or any
portion of the Lassen Solar Panel from independent third party
suppliers, NATCO shall be required to notify Lassen and DBK
of the identity of any such supplies and the specifications of the
products to be provided. Lassen and DBK shall have the right
to reject any product proposed to be purchased by NATCO in the
extent it believes in the exercise of its reasonable discretion
that such product does not satisfy minimum quality
standards.
5.2
Product Delivery and
Sourcing .
DBK Corp. and Lassen agree to deliver, or cause to be delivered to
NATCO, all of NATCO's requirements to be purchased pursuant to
Section 5.1 for manufacture and assembly of the Lassen Solar
Panels.
5.3
Product
Volume .
NATCO shall have the right, but not the obligation, to
require DBK Corp., or its designees, to purchase not less than 91%
of the Lassen Solar Panels produced by NATCO each quarter
throughout the term of this Agreement.
5.4
Inventory
. DBK Corp. shall
maintain a sufficient inventory of Legacy Portion of the Solar
panel and other materials that may be required to efficiently and
effectively manufacture and assemble the Lassen Solar Panel to meet
NATCO’s requirements an
