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Exhibit 10.05 Letter of Understanding
LICENSE AGREEMENT
This agreement evidences the terms and conditions on which POWERBALL
Technologies LLC, a Utah limited liability company, located at 0000 Xxxx 0000
Xxxxx, Xxxx Xxxxxx Xxxx, Xxxx (hereinafter referred to as "POWERBALL") will
grant to OMEGA DYNAMICS, INC., a Delaware corporation, located at X.X. Xxx
0000, Xxxxx Xxxxx, Xxxx 00000, (hereinafter referred to as "OMEGA") a
worldwide exclusive license to POWERBALL'S PATENTED PELLETIZED HYDRIDE,
HYDROGEN GENERATING SYSTEM (Powerball System) a copy of the Patent attached,
subject to the terms and conditions set forth herein.
Type of Transaction: Omega agrees to purchase and Powerball agrees to sell
under the terms and conditions of this agreement an exclusive, world wide
license of POWERBALL'S patented technology of a pelletized hydride, hydrogen
generating system integrated and in conjunction with electric generated fuel
cell system, except as limited herein. The license shall not grant to OMEGA
rights regarding Proton Exchange Membrane based fuel cell electric generating
systems for any applications sold to General Motors, Daimler Chrysler, Ford
Motor Company, Toyota, Nissan, Honda, Xxxxxxx, or any of their subsidiaries or
affiliates.
Purchase Price: The Purchase Price shall be paid by Omega to Powerball for
this license as follows:
a. Five hundred thousand dollars ($500,000.00) to be placed in a special
account to be released by Omega at its sole discretion. The amounts in the
account are to be used to build an integrated fuel cell system working in
conjunction with Pelletized Hydride, Hydrogen Generating System (Powerball
System) and to integrate that system into an electric powered vehicle and
thereafter to drive the vehicle across the United States for the purpose of
advertizing Omega's integrated fuel cell system technology and the Powerball
System. Omega agrees to provide prominent advertising of the Powerball System
as it relates to the electric vehicle both physically on the vehicle and in
press releases, news statements, etc. relating to the vehicle.
b. Any technological improvements and or enhancements that are developed
as a direct result of this join effort will be the sole property of Omega.
c. The sum of One Million Dollars ($1,000,000.00) to paid to Powerball
(Twenty Five Thousand ($25,000) at the signing of this Agreement, an
additional Seventy Five Thousand ($75,000) within 10 days of signing, and an
additional One Hundred and Fifty Thousand ($150,000 within 30 days of signing
with the remaining funds to be paid at a rate of one half (1/1) of all funds
raised by Omega up to and until the funding requirements are met. The entire
One Million Dollars ($1,000,000.00) must be paid on or before February 1,
2000.
d. Powerball shall have the full right to determine the use of the One
Million Dollars ($1,000,000.00), however its present intent is to build a
manufacturing plant to produce Powerballs and to build a refueling station in
order to transport the Powerballs and to build a refueling station in order to
transport the Powerballs from the manufacturing plant to the various
applications. Powerball agrees that they will make use of enough of the funds
to produce sufficient Pelletized Hyride (pellets) at a 'Reasonable Cost' to
fill Omega's needs. If Powerball fails to produce sufficient Pellets, Omega
shall have the right to produce the Pellets in a quantity to satisfy their
requirements. 'Reasonable Cost' shall be defined as it is used in this
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Agreement as 'Cost of manufacture plus a reasonable mutually agreed to
profit'. Omega agrees they will stay actively involved to the satisfaction of
both parties to develop the integration of the Powerball Systems with fuel
cells.
e. Omega agrees to assume the obligation of Natex to pay Powerball
Industries, Inc., the royalty as specifically set forth in that certain
Assignment of Exclusive License Agreement and Exclusive License Agreement,
copies of which are attached hereto.
f. Powerball agrees to pay Omega a One percent gross royalty (1%) of any
and all sales of the Powerball System to General Motors, Daimler Chrysler,
Ford Motor Company, Toyota, Nissan, Honda or any of their subsidiaries or
affiliates.
g. Omega and Powerball agree to share on a fifty/fifty basis the net
profit sales for any Powerball Systems to any and all Governments worldwide.
(Net profit to be mutually agreed upon by the parties).
h. Powerball agrees that they will not enter into any agreement,
partnership and or development contract with any other company or entity for
the purpose of marketing and or manufacturing a system that could be construed
as competitive to the Powerball system as outlined in this agreement.
Representations and Warranties: Powerball and Omega shall make customary
representations as to organization and to authorization, execution, delivery
and enforceability of the documents, and such other representations and
warranties as are customary or as shall reasonably be requested by any parties
thereto. The parties shall undertake to indemnify and hold one another
harmless from any loss occasioned by any inaccuracy in the representations and
warranties as set forth in the Definitive Agreement to the date of closing.
Encumbrances: Powerball shall grant the license free and clear of all liens
and encumbrances.
Regulatory Approval: Any and all filings necessary to be made with any
regulatory agencies shall be made by Omega and Powerball.
Accessed Information: Powerball and Omega agree that, on a confidential
basis to each other, its legal counsel, accountants, consultants and other
representatives ("Representatives") access to, and the right to inspect their
respective corporate and financial business records and the patented
technology owned by Powerball.
Definitive Agreement: Powerball and Omega agree that a more comprehensive
agreement may be developed embodying the terms and conditions in this
agreement (the "Definitive Agreement") and containing such representations,
warranties, covenants and conditions as shall be agreed upon between Powerball
and Omega.
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Confidentiality: Public Disclosures
Omega and Powerball agree that the integration of the Powerball Systems
with Electric Generating Fuel Cells shall be held mutually confidential during
the research and development stage.
Conditions to Closing: the closing shall be conditioned upon (I) Powerball
and Omega executing the Definitive Agreement; (II) the absence of an order of
relief having been entered against any of the parties under the Federal
Bankruptcy Law; (III) all material, federal, state and local government
approvals required by reason of the transactions set forth herein begin
obtained, or reasonably obtainable.
WHEREFORE, the parties have executed this License Agreement effective the
date and day set forth herein above:
POWERBALL TECHNOLOGIES, LLC, a Utah limited
Liability company
By-------------------------------------------
(Its Managing Representative)
OMEGA DYNAMICS, INC., a Delaware Corporation
By-------------------------------------------
(Its President)
