EXHIBIT 10.20
J. nr. 000-00000-0
CONSULTANCY AGREEMENT
This Agreement (the "Agreement") made as of June 14th 2006 ("Effective Date")
entered into between:
Danfoss A/S, a Danish company
Xxxxxxxxxxx 00 0000
Xxxxxxxx Xxxxxxx
("Danfoss")
and
Neah Power Systems, a US corporation 00000 00xx
Xxx XX
Xxxxx 000
Xxxxxxx, XX 00000
XXX
("Neah Power Systems")
(each referred to as a "Party" and together as the "Parties")
PREAMBLE
Neah Power Systems and Danfoss wish to enter a written agreement regarding the
consultancy services to be provided by Danfoss and planned cooperation between
the Parties within the field of fluid control and disposable fluid cartridge
technology for portable fuel cells with a power capacity up to 500W.
This Agreement shall apply for any kind of consultancy or assistance provided to
Neah Power Systems by Danfoss and supersedes all prior agreements between the
Parties, whether, oral or written.
The Parties agree that this Agreement is a frame agreement setting out the main
rights and obligations of the Parties and that terms for individual services
shall be agreed and set out in details in statements of work (the "SOW's") to
this Agreement, which shall be agreed upon in writing by the parties and shall
be deemed incorporated into this Agreement and be attached as enclosures hereto.
The initial SOW is attached hereto as EXHIBIT A.
Any standard terms and conditions laid down by the Parties which disagree with
those contained in this Agreement shall not be binding upon the Parties, unless
otherwise agreed in writing.
1 THE SERVICES
1.1 Danfoss shall accomplish the tasks specified in each SOW (hereinafter
referred to as the "Services"). The Services must he accomplished within agreed
period of time, acad. the stipulated deadline for accomplishing each Service
must be kept.
1.2 The Parties agree that the SOW's shall specify details as the
following:
o Specification of individual Services and objectives
o Budget and costs
o Time schedule and milestones
o Working place
o Report procedures
o Contact persons
1.3 Any additions to or modifications of the Services shall be
agreed in writing.
2 THE PARTIES' CONTRIBUTION
2.1 The Parties agree to work together in good faith and do all
that can be reasonably expected of them for the completion of the
Services.
2.2 Danfoss shall accomplish the Services as principal at its own
account and risk. Danfoss shall for its own account make the persons
and facilities available necessary and appropriate to accomplish the
Services.
2.3 Neah Power Systems shall neither make personnel, facilities
nor premises available in order for Danfoss to accomplish the Services,
unless otherwise specified in an SOW or agreed between the Parties.
3 WORKING PLACE AND HOURS OF DANFOSS
3.1 Danfoss must only stay at such of Neah Power Systems' premises
and/or such periods of time as agreed upon between the Parties.
4 NEAH POWER SYSTEMS' PAYMENT
4.1 Neah Power Systems shall pay remuneration to Danfoss for
accomplishment of the Services. The exact amount and times of payment
shall be separately agreed upon in the SOW's. Unless otherwise agreed
payments shall be made in Euro.
4.2 Danfoss shall make out an invoice prior to each payment to be
made by Neah Power Systems, such payment for undisputed invoices to be
made within current month plus 30 days to an account designated by
Danfoss.
4.3 The remuneration for each Service: shall be as specified in
the applicable SOW.
4.4 Danfoss shall only be allowed to initiate activities, which
cause extension of the stipulated remuneration, if such activities have
been agreed by the Parties in writing.
4.5 Neah Power Systems shall reimburse Danfoss for its reasonable
documented expenses for transport, traveling, board and lodging in
connection with accomplishment of the Services, subject to prior
approval of Neah Power Systems, which shall not be unreasonably
withheld.
5 PERIODICAL REPORTING AND DELIVERY
5.1 During the accomplishment of the Services Danfoss shall forward to Neah
Power Systems periodical reports describing the cause of the
accomplishment of the Services, and provide the deliverables specified
in each SOW. The reports must be of such form and ex-tent that Neah
Power Systems is kept informed of all essential activities and as a
minimum such reports shall be made immediately after conclusion of each
Services. Further details about reporting may be agreed in the SOW's.
6 INTELLECTUAL PROPERTY RIGHTS
6.1 Definitions
6.1.1 "BACKGROUND IP"' shall mean all inventions,
discoveries, works of authorship, designs, ideas, and
technology developed prior to or outside the course
of performance of the Project. Danfoss shall make
reason-able disclosure to Neah of the Danfoss
Background IP prior to commencement of the Project.
6.1.2 "COMPONENTS" stall mean devices that are designed,
developed or manufactured using any Project W.
6.1.3 "FUEL CELL FIELD OF USE" shall mean use in connection
with fuel cells, which are a collection of components
whereby a fuel and an oxidizer are supplied to a
device that converts them into electricity. Fuel
cells differ from batteries in that the energy
conversion continues as long as fuel and, if
necessary, an oxidizing agent is fed to the fuel
cell. If components are contained in detachable
assemblies (such as a cartridge) that must be
attached and/or connected to other assemblies so as
to form a complete fuel cell system, they are
considered part of the fuel cell.
6.1.4 "INTELLECTUAL PROPERTY RIGHTS" shall mean all
copyrights, copyright applications, patents, patent
applications, trade secrets, trademarks, moral
rights, author's rights, and all other intellectual
and proprietary rights of any kind, as may now or
hereafter come into existence, and all renewals and
extensions thereof, regardless of whether such rights
arise under the laws of the United States, Denmark,
or any other state, country or jurisdiction.
6.1.5 "JOINTLY DEVELOPED IP" shall mean all Project IP
which is developed jointly by Neah Power Systems and
Danfoss in connection with the activities
contemplated by this Agreement.
6.1.6 "NEAH POWER SYSTEMS PROJECT IP" shall mean all
Project IP which is developed by Neah Power Systems
in connection with the Project independently of
Danfoss.
6.1.7 "DANFOSS PROJECT IP" shall mean all Project IP which
is developed by Danfoss in connection with the
Project independently of Neah Power Systems.
6.1.8 "PROJECT" shall 1nean the joint development of
technology related to Components, pursuant to this
Agreement and commencing on the Effective Date.
6.1.9 "PROJECT IP" shall mean all inventions, discoveries,
works of author-ship, designs, ideas and technology
developed by either party, jointly or independently,
ii the course of performance of the Project, and
shall not include any Background IP.
6.2 INTELLECTUAL PROPERTY RIGHTS
6.2.1 OWNERSHIP OF BACKGROUND IP. All right, title and interest
(including Intellectual Property Rights) to Background IP of a
party shall remain the property of such party and no licenses
or other rights with respect to such Background IP are granted
to the other party.
6.2.2 OWNERSHIP OF INDEPENDENTLY DEVELOPED PROJECT IP. Subject only
to the express license granted in Section 6.2.6, all right,
title and interest (including Intellectual Property Rights) to
Danfoss Project IP shall be owned solely and exclusively by
Danfoss. Subject only to the express license granted in
Section 6.2.5, all right, title and interest (including
Intellectual Property Rights) to Neah Power Systems Project IP
shall be owned solely and exclusively by Neah Power Systems.
6.2.3 OWNERSHIP OF JOINTLY DEVELOPED IP. Subject only to the express
licenses granted in Sections 6.2.5 and 6.2.6, all right, title
and interest (including Intellectual Property Rights) to
Jointly Developed IP shall be owned jointly by the parties.
Each party shall have an equal, undivided, joint ownership
interest in all right, title and interest (including
Intellectual Property Rights) in and to such Jointly Developed
IP immediately upon its creation. Neah Power Systems hereby
assigns to Danfoss and Danfoss hereby assigns to Neah Power
Systems an equal, undivided, joint ownership interest in
Jointly Developed IP so that Neah Power Systems and Danfoss,
respectively, each has an equal, undivided, joint ownership
interest in the Jointly Developed W.
6.2.4 USE OF JOINTLY DEVELOPED IP. Subject to the terms of Sections
6.2.5 and 6.2.6, each party shall have the right to use, make,
have made, sell, import and otherwise exploit the Jointly
Developed IP, and hereby consents to any licenses granted by
the other party to third parties to use, make, have made,
sell, import and otherwise exploit the Jointly Developed W.
Neither party shall have a "duty to account" or share profits
from the Jointly Developed IP with the other party.
6.2.5 EXCLUSIVE RIGHT TO COMMERCIALIZE IN THE FUEL CELL FIELD OF
USE. Notwithstanding the other terms of this Agreement, Neah
Power Systems shall have the exclusive right to use and
commercialize the Project IP in the Fuel Cell Field of Use,
except that Danfoss shall have the right to use and
commercialize the Project IP in connection with the supply of
Components by Danfoss to Neah Power Systems. Danfoss agrees
'that it shall not, direct or indirectly, use or
commercialize, or license third parties to use or
commercialize, the Project IP in the Fuel Cell Field of Use,
except in connection with the supply of Components to Neah
Power Systems. Danfoss hereby grants Neah Power Systems an
exclusive, perpetual, transferable, sublicensable, worldwide,
irrevocable, royalty-free license to use, make, have made,
sell, offer to sell and import goods and services under the
Intellectual Property Rights to the Danfoss Project IP and the
Jointly Developed IP, solely in the Fuel Cell Field of Use.
6.2.6 EXCLUSIVE RIGHT; TO COMMERCIALIZE OUTSIDE THE FUEL CELL FIELD
OF USE. Notwithstanding the other terms of this Agreement,
Danfoss shall have the exclusive right to use and
commercialize the Project IP outside the Fuel Cell Field of
Use. Neah Power Systems agrees that it shall not, directly or
indirectly, use or commercialize, or license third parities to
use or commercialize, the Project IP outside the Fuel Cell
Field of Use. Neah Power Systems hereby grants Danfoss an
exclusive, perpetual, transferable, sublicensable, worldwide,
irrevocable, royalty-free license to use, make, have made,
sell, offer to sell and import goods and services under the
Intellectual Property Rights to the Neah Power Systems Project
IP and the Jointly Developed IP, solely outside the Fuel Cell
Field of Use.
6.2.7 BACKGROUND IP. The licenses referred to in Sections 6.2.5 and
6.2.6 above shall not include any rights in any Background IP.
Danfoss agrees to negotiate the grant of a non-exclusive
license (without right to grant sublicenses; to Neah Power
Systems on commercially reasonable terms) to make or have made
Fuel Cell components under Danfoss Background IP as necessary
for Neah Power Systems to use and commercialize the Prefect IP
in the Fuel Cell Field of Use. The royalty for such
non-exclusive license shall not exceed (i) if manufactured by
Neah Power, three percent (3%) of the total cost of the
applicable Fuel Cell component, and (ii.) if manufactured by
Neah Power's subsupplier, three percent (3%) of the net
transfer price (excl. taxes and cost of transportation) from
such subsupplier. Neah Power Systems shall not enter into any
agreement with any third party to produce any Fuel Cell
component using Danfoss Background IP on terms more favorable
for the supplier than terms previously offered by Neah Power
Systems to Danfoss with respect to an offer lay Neah Power
Systems to engage Danfoss to pro-duce such component on Neah
Power System's behalf. Neah Power Systems agrees to negotiate
the grant of a non-exclusive license to
Danfoss on commercially reasonable terms under Neah Power
Systems's Background IP as necessary for Danfoss to use and
commercialize the Project IP outside the Fuel Cell Field of
Use.
6.2.8 IDENTIFICATION OF PROJECT IP. The parties agree to meet at
least quarterly during the term of the Project to identify and
discuss Project IP. Upon the identification of any such
Project IP, the parties will discuss the necessary protection
for the parties' rights in such Project IP, including whether
the 1Mjarties should file for patent, copyright, mask work, or
trademark protection, the countries in which such filings
should be made, and whether such Project IP shall be treated
as trade secrets.
6.2.9 FILING OF PATENT APPLICATIONS.
6.2.9.1 The ownership of a patent with respect to an
invention included within Jointly Developed IP
("Project Invention") in a particular country shall
be based on the payment of an equal share of the
prosecution and maintenance fees. Either party may
suggest the prosecution of a patent application for a
Project Invention in any country. The proposing party
shall describe the scope of the proposed patent
application and the countries in which it desires to
seek patent protection. The other party shall have
sixty (60) days to give notice of its desire to join
in the prosecution of the patent application in all
or some of the countries in the notice. If the
nonproposing party fails to give notice of its desire
to join in the prosecution within such sixty (60) day
period or declines to share the Tense of such patent
applications in a particular country, the proposing
party may prosecute the patent applications and all
own any patents based upon such applications. The
nonproposing party shall provide information to
prosecute such patent applications at the expense of
the proposing party.
6.2.9.2 If the nonproposing party chooses to join in
prosecuting the patent applications, the proposing
party shall choose the patent attorneys to prosecute
the patents in the countries in the nonproposing
party's notice and consult with the nonproposing
parlay regarding rile scope of the patent. The
proposing party shall be responsible for paying the
costs and expenses of prosecution and shall xxxx the
nonproposing party for half of the costs and expenses
for such prosecution, payable within sixty (60) days
of the receipt of such xxxx. If the nonproposing
party fails to pay such bills when due and within
thirty (30) days of a notice of nonpayment on such
date by the proposing party, the proposing party may
give notice to the nonproposing party of its
forfeiture of any rights in that application and the
nonproposing party shall assign all its right, title
and interest in the application to the pro-posing
part and the proposing party shall be the sole owner
of that applicant ion and the resulting patent. If
the proposing party desires to abandon the
application, it shall give the nonproposing party
sixty 50) days prior written notice of its intention
to abandon the application. If the nonproposing party
desires to continue the prosecution of the
application, it shall give notice of such intent in
the proposing party within such period. In such
event, the proposing party shall assign all its
right, title and interest in the application to the
nonproposing party, and the nonproposing part y,
shall be the sole owner of the application and the
resulting patent. The same procedures shall be
followed for the failure to pay maintenance fees or
to abandon an issued patent.
6.2.9.3 Each party shall be entitled to prosecute
patent applications for its Independently
Developed Project IP in any country party
and shall be responsible for paying the
costs and expenses of prosecution. The
parties agree to inform each other of any
such filings. If a party does not wish to
protect patentable Independently Developed
Project IP it shall offer the other party in
writing to assume ownership of the
respective IP. In the event that a party
should wish to abandon Independently
Developed Project IP for which patent
protection has been sought or obtained, it
shall give written notice to the other
party, which shall be entitled to assume
ownership hereof against payment of the
first party's documented costs for patent
protection. The other party shall have
thirty (30) days to give notice of its
desire to assume such owner-ship and ii such
party fails to give notice within such
thirsty (30) day period or declines to
reimburse the expense of patent costs, the
first party may abandon the relevant patent
protection.
7 NO RESTRICTION - WARRANTY
7.1 Danfoss agrees to inform Neah Power Systems without undue delay in the
event that Danfoss during the term of this Agreement, directly or
indirectly, takes on any work as a consultant, subcontractor or
otherwise, within the Field.
7.2 The Parties warrant that they are free to perform the Services and
obligations under this Agreement and that their performance under this
Agreement will not violate or conflict with any non-competition
restrictions, other restrictions or confidentiality undertakings agreed
with any other third party.
8 TERMINATION
8.1 This Agreement shall commence on the Effective Date and shall terminate
upon completion or termination of all SOW's.
8.2 This Agreement may be terminated by Neah Power Systems by giving 1
month's prior written notice to Danfoss.
8.3 If a Party commits any material xxxxxx of this Agreement, the other
Party shall have the right to terminate the same forthwith. If the
breach is of such a nature that the breaching Party will be able to
remedy the breach, the other Party shall give the breaching Party a
written notice of the breach where after the breaching Party must
remedy the breach within seven (7) days. In case of failure to remedy
such breach the Agreement can be terminated forthwith by the other
Party without further notice.
8.4 All provisions of this Agreement w Xxxxx by their nature require
performance following termination shall survive termination of this
Agreement. Upon termination of this Agreement, the parties shall
provide each other with reasonable documentation with respect to all
Project IP.
9 LAW AND ARBITRATION
9.1 This Agreement shall be governed by the laws of Denmark without regard
to its rules of conflicts of law. The UN Convention on Contracts for
the International Sale of Goods shall not apply to this Agreement,
9.2 The Parties shall endeavor to settle de all disputes and conflicts
arising out of or in connection with this Agreement amicably and in
good faith. Should those attempts fail, all disputes between the
Parties arising out of or in connection with this Agreement - including
disputes concerning the validity this Agreement - shall be finally
settled under the arbitration Rules of the International Chamber of
Commerce, by three arbitrators to be appointed in accordance with said
rules. The place of arbitration shall be Stockholm, Sweden. The
language of arbitration shall be English. Notwithstanding the
foregoing, in the event of a dispute with respect to the terms of any
license granted pursuant to Sections 6.2.7, such dispute shall be
resolved by a mutually agreeable expert in the applicable technical
field. If the parties are unable to agree upon an expert, each party
shall select an expert, and such experts shall select a third expert
who shall resolve the dispute. The par-ties shall share equally the
costs of resolving any such dispute.
9.3 The jurisdiction of ordinary courts shall be excluded except for the
right of the Parties to seek for preliminary injunctions of similar
relief.
10 CONFIDENTIALITY
10.1 The Nondisclosure Agreement between the parties dated shall apply with
respect to all confidential information disclosed or generated pursuant
to this Agreement.
11 MISCELLANEOUS
11.1 The Parties shall perform all of their duties under this Agreement as
independent contractors. Nothing in this Agreement shall be construed
to constitute the Parties as principal and agent, partners, joint
venturers, co-owners, or otherwise as participants in a joint
undertaking.
11.2 This Agreement may not be transferred or assigned by either Party
without the prior writ-ten consent of the other Party, which consent
shall not be unreasonably withheld. Not-withstanding the foregoing,
consent of the other Party shall not be required for assignment or
transfer made by Danfoss to a subsidiary affiliate within the Danfoss
Group, or for assignment or transfer made by Neah Power Systems in
connection with a merger, sale or other transaction involving
substantially all of the assets of its business to which this Agreement
relates.
11.3 This Agreement constitutes the entire understanding between the parties
relating to the subject matter hereof, but does not modify any other
agreement that may exist between the parties. No party has relied upon
any representation or promise except as expressly set out in this
Agreement.
11.4 This Agreement may not be modified or amended, including by customer,
usage of trade, or course of dealing, except by an instrument in
writing signed by duly authorized employees of both of the Parties
hereto.
11.5 No omission or delay on the part of any Party in exercising any right,
power or privilege under this Agreement shall operate as a waiver by it
of any right to exercise it in the future or of any other of its rights
under this Agreement. No waiver of any term, provision or condition of
this Agreement shall be effective except to the extent to which it is
made in writing and signed by the waiving Party.
11.6 If any provision of this Agreement shall be held illegal or
unenforceable, that provision shall be limited or eliminated to the
minimum extent necessary so that this Agreement shall otherwise remain
in full force and effect and enforceable.
Place and date:
Bothell, WA Nordborg, Denmark
06/08/2006 2006-06-13
For Neah Power Systems For Danfoss:
/s/ Xxxx Xxxxxxxxxx /s/ Xxxxx Xxxxxxxx
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Xxxx Xxxxxxxxxx Xxxxx Xxxxxxxx
EXHIBIT A
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Man- Man- Parts and Traveling Sum
power power tooling
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Hours $ $ $ $
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PHASE 1
MAIN ACTIVITIES
o Validation of platform materials
o Validate bag material and joining
technology
o Validation of connection material (needle,
O-ring, etc...)
o Negotiate user requirement specification
(URS)
TO BE DELIVERED BY NEAH POWER
o Final URS as attachment to contract
o Sign-up contract
TO BE DELIVERED BY DANFOSS
o Sign-up contract
o List of wetted materials
o Basic test of seals 90 17550 1000 18550
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The milestone of phase 1 is the agreement and assignment of the contract between
the two parties. The agreement of Danfoss continuance to Phase 2 is that the
above stated assignments have been completed to the extent of XXXX Xxxxxx
approval.
TERMS OF PAYMENT:
Neah will pay at contract sign-up.
COMPLETION OF PHASE 1 IS HEREBY ACCEPTED BY NEAH POWER AND DANFOSS:
/s/ Xxxx Xxxxxxxxxx Xxxxxxxx 2006-06-13 /s/ Xxxxx Xxxxxxxx
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Xxxx Xxxxxxxxxx Xxxxx Xxxxxxxx
Date and place Neah Power Date and place Danfoss
