Exhibit 10.2
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
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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 limitation, upon CESI’s written request,
providing CESI with communications from third parties regarding the
quality of the Marked Modules, and upon at least ten (10) days
prior written notice, providing CESI with access to the Marked
Module packagin
