MasterLicense Agreement ThisAgreement is made and entered into by and between Bajaj Auto,Ltd. Akurdi, Pune 411 035,India and New Generation MotorsCorporation 44645 Guilford Drive, Suite201 Ashburn, VA 20147,USA

1.

LICENSE.

 

a.

Manufacturing License: Upon the terms and conditions set out herein, the Licensor hereby grants to Licensee

 

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an exclusive right and license to manufacture the Products upon the specifications attached hereto as Attachment 1, in India for use in the Licensee’s Three wheeler Products;

 

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an exclusive license to manufacture the Products upon the specifications attached hereto as Attachment 1, in India for use in the Licensee’s Two wheeler Products;

 

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a non exclusive license to manufacture the Products upon the specifications attached hereto as Attachment 1, in India for use in the Licensee’s four wheeler Products ;

 

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a non-exclusive license to manufacture the Products upon the specifications attached hereto as Attachment 1, in India for use in products other than the Licensee’s Two wheeler / three wheeler / four wheeler products,

 

b.

Distribution License: Upon the terms and conditions set out herein, the Licensor hereby grants Licensee

 

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an exclusive right and license to use / sell the Products for incorporation into the Licensee's three wheeler Products (“Distribution License” and together with the Manufacturing License, the “Product License”) for sale throughout the world, except the USA. It is expressly agreed that, the Licensor agrees not to license the Products to any other three (3) wheeler application to any party anywhere in the world except for sale in the United States of America.

 

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A non-exclusive right and license , a Product License, (“Distribution License” and together with the Manufacturing License)  to use / sell the Products for incorporation into the Licensee's three (3) wheeler Products for sale in USA.

 

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an exclusive right and license to use / sell the Products for incorporation into the Licensee's two (2) wheeler Products (“Distribution License” and together with the Manufacturing License, the “Product License”) for sale in India;

 

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a non-exclusive right and license ,a   Product License, (“Distribution License” and together with the Manufacturing License)  to use / sell the Products for incorporation into the Licensee's two (2) wheeler Products in the rest of the world (excluding India) & Licensee’s four (4) wheeler products  for sale throughout the world.

 

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a non-exclusive right and license, a Product License (“Distribution License” and together with the Manufacturing License), to use / sell the Products for any other applications (other than those mentioned in foregoing paragraphs of this clause) for sale throughout the world excluding the USA. The Licensee shall inform the Licensor on a quarterly basis, on all such sales made by the Licensee.

 

c.

Requirements of the Licenses. Licensee acknowledges that the Licenses do not include any right to sell either directly or through any reseller, distributor or similar party, to any company that designs, manufactures and markets or sells products that compete with the Products.

 

d.

Rights Retained.  All rights to the Products not specifically granted herein are retained by Licensor

 

e.

Retention of Exclusivity.  If Commercial Production has not started within 3 years from the Effective Date, parties will discuss any further  extension of this period and related terms.   Should there be no conclusion within thirty (30) days thereafter, Licensee will negate any exclusivity right under but not limited to the “Manufacturing License” and the “Distribution License” that it may have and all such rights will be considered to be non-exclusive from the expiry of the said 30 days.

2.

TERM.

3.

TECHNOLOGY FEE.

 

1.

$495,500 Pre-production Fee to be completed before Commercial Production commences, as follows:

 

a.

$245,500 on signing of the Agreement.

 

b.

$250,000 being the amount calculated at the rate of $400.00 for the first 625 units of Licensee’s 3 wheeler Products sold. Payment of this amount shall be made on a quarterly basis, for sale during Jan-March; April – June; July-September and during October to December periods.  Remittances shall be accompanied by statements showing the computation of amounts, duly certified by the Licensee's regular Chartered Accountants. Payment will be made within 45 days of end of the respective quarter.

 

2.

$150,000 Commercial Production Fee.

 

a.

$ 50,000 upon the commencement of Commercial Production of Licensee’s Products;

 

b.

$ 50,000 on completion of cumulative sale from the date of commencement of Commercial Production of ,000 units of Licensee’s Products and

 

c.

$ 50,000 on completion of cumulative sale from the date of commencement of Commercial Production of 10,000 units of Licensee’s Products.

4.

 

i.

For sales made pursuant to the Distribution License involving the Licensee’s three (3) wheeler Products: the Licensee shall pay $32.00 net of taxes, for sale of the Product.  The License Fee will be limited to a cumulative volume of 250,000 systems from the date of commencement of Commercial Production when used in Licensee’s three (3) wheeler Products, during the term of this Agreement.  No License Fee is payable on the first 1,200 units when used in Licensee’s  three (3) wheeler Products and this volume will be excluded from the 250,000 cumulative count.

 

ii.

For sales made pursuant to the Distribution  License involving products other than Licensee’s  three (3) wheeler products:

 

1.

For sale of Licensee’s  two (2) wheeler products and Licensee’s  four (4) wheeler products, parties will discuss and arrive at a License fee mutually and record separate agreements for the same, prior to commencement of commercial sales of such products.

 

2.

For sale of Products for applications other than Licensee’s 2/3/4 wheeler products, the Licensee shall pay Licensor four percent (4%) of the total sales revenue net of taxes and net of landed value of imported parts of such Products as a Licensing Fee for the Products net of applicable with-holding taxes.

 

3.

No License Fee will be payable for any sale of the Products  by Licensee to Licensor under Section 8.

5.

DERIVATIVE TECHNOLOGY.

 

Unless otherwise specifically agreed to between the parties and specified herein as it relates to the Products, all Derivative Technology conceived by and / or originated by the Licensee shall be the joint property of the Licensor and the Licensee; provided the Derivative Technology is not an immaterial or simple engineering change that is readily obvious due to information transferred to the Licensee by the Licensor. By virtue of provisions of this agreement, the Licensor shall have exclusive rights to the said Derivative technology originated by the Licensee for manufacture and sale in USA and the Licensee shall have exclusive rights to sale in India.  For rest of the World, parties will discuss and mutually settle.

6.

 

1.

The Licensor shall provide the following support without the Support Fees or any other charges for the same with all costs borne by the Licensor, including costs for engineers travel, man-day charges and other expenses of Licensor's except for materials or travel to other than Licensees premises in Akurdi, India, for enabling the completion of initial batches up to 100 units of  Licensee’s Products planned to be sold in the Indian market:

 

1.

Analysis of data collated by Licensee from the actual product ionization conditions directly relating to the Licensor’s Products – to confirm the specifications for mass manufacture and performance specifications targeted.

 

2.

Establishment of technical liaisons to help resolve all problems faced in production and sale of the Products.

 

3.

Analysis of data collated by Licensee from the actual usage conditions of Licensors Products – to analyze any problems failures that may be reported from the field (customers, service points, etc.) and technical development efforts to countermeasure any gaps in the same.

 

2.

The Licensor shall, within 90 days of Effective Date and receipt of initial Technology fee as specified in 3.i.a, make available to the Licensee a "Technology Transfer package" consisting of any information listed in Attachment 4 that is available at the Licensor up till that date such, as specifications, drawings, software and, processes required for the manufacture, testing and maintenance of requisite quality levels by the Licensee.

 

3.

Should the “Technology Transfer Package” not be transferred in the allotted time, the parties will discuss a possible extension period to fulfill and complete said package.  Should there be no conclusion within thirty (30) days the Licensor will repay to Licensee any funds received under Article 3.1.a to the Licensee and the Master License Agreement will be considered terminated with no Default associated to any of the parties.

 

4.

The Licensor shall continue to provide consulting assistance for the Products to the Licensee up to completion of 1200 units of Licensee’s Products or a period of one (1) year from the effective date, whichever is earlier, without the Support Fees or any other charges for the same with all costs borne by the Licensor, including costs for engineers travel man-day charges and other expenses of Licensor's except for materials or travel to other than Licensees premises in Akurdi, India.

 

5.

For any consulting assistance after completion of 1200 units of Licensee’s Products or expiry of 1 year from effective date whichever is earlier, the fees and expenses to be borne by the Licensee are detailed in Attachment 3, “Support Fees”.

 

6.

In order to facilitate the technical support and increase its effectiveness, the Licensee shall allow and provide office space and office facilities for up to two (2) representatives of the Licensor at the Licensee’s premises, and shall make available to such representative(s) any relevant information requested and permit said representative(s) to inspect its operations, as well as to make such inspections as representatives of the Licensor consider necessary for the purpose of facilitating said Master License Agreement.

 

7.

If such technical support requires travel within India other than the Licensee’s premises, the Licensee shall pay for all associated expenditures, such as but not limited to, travel and lodging, at actual, costs, duly supported by requisite receipts.

7.

8.

SUPPLY OF THE PRODUCTS TO LICENSOR.

 

a.

In case of supplies to Licensor, the Licensee is absolved of any liabilities, costs, damages, warranties, product liabilities, etc. that may arise there from. All such and any other liabilities & costs arising directly or otherwise, shall be the total responsibility of the Licensor. Licensor may, if he deems necessary, ensure the quality of the supplies prior to dispatch and Licensee’s responsibilities shall end with dispatch from India.

 

b.

The Licensee will provide five (5) of the Products (“Test Units”) for testing and final production qualification (100% produced by the Licensee) to the Licensor at no charge before the Licensor can attest to the reliability and stability of the Products.

 

c.

The Licensee will manufacture and sell up to a maximum of 300 units of the Products to the Licensor at total cost and the Licensee agrees not to charge a profit margin on the same. The total cost of the product to Licensor shall be the cost of materials, other direct costs to Licensee, with other overheads as used internally with only the additions of actuals for export processing (packing, agent, commissions, insurance etc.).

 

d.

For supplies beyond the above 305 units, the pricing shall be computed on the basis of total cost + 10%.

 

e.

In case of any dispute as to the total cost, the figure duly certified by the Licensee’s auditors shall be final and binding.

 

b.

“Confidential Information” shall mean all technical data, including design information, engineering diagrams, computer software, computer programs, and any other information in tangible or recorded form, and other non-public, confidential, proprietary, trade secret or restricted information which is furnished by one party to the other in the course of performing under this Agreement.  Confidential Information also includes the above items of a customer if provided by Licensor.  Confidential Information also includes the specific terms and conditions of this Agreement, including, but not limited to, the development schedule for as may be agreed upon by the parties.

 

c.

The obligation not to disclose however shall not be applicable in respect of Confidential Information which:

 

i)

was in the possession of, or was known to the other, without any obligation to maintain its confidentiality, prior to disclosure by the party owning the Confidential Information and which information was obtained otherwise than in breach of this Agreement;

 

ii)

is or becomes generally known to the public without any violation of this Agreement by the party receiving the same;

 

iii)

is obtained by the party receiving the same from a third party, which obtained the same without any obligation to keep such Confidential Information confidential; or

 

iv)

can be shown to be independently developed by the party receiving the same without use of such Confidential Information.

 

d.

From time-to-time, information regarding schedule of development, progress against the same, etc. may be provided to the Indian Governmental ministries / departments / agencies, and other agencies like USAID, GEF, UNDP, etc. as Licensee deems fit.

 

e.

The provisions of this Article 9 shall survive the termination expiration of this Agreement for a period of five (5) years.

10.

WARRANTIES:

 

a.

Licensor assures that to the best of its knowledge, the Intellectual Property Rights, designs and technical know-how utilized in the licensed Products hereunder do not infringe or violate any existing patent or design registration, trademarks or copyrights or such other rights of anyone anywhere in the world.

 

b.

The Licensor shall, as a part of this Agreement, and for reference provide the Licensee with a copy of the Claims and extract thereof, of the Patents, Provisional Patents, design registration, trademarks or copyrights utilized by the Products and filed by the Licensor, and further, one complete copy of the Patents/ Provisional Patents utilized by the Products filed till the Effective Date and that are filed during the term of this agreement.

 

c.

Licensor shall hold Licensee harmless and shall reimburse Licensee for all costs, expenses including legal expenses, direct losses, etc. excluding profits during the term of this agreement in case of any third party infringement suits arising out of the Intellectual Property Rights, designs and technical know-how  utilized by the Products as licensed by the Licensor under this Agreement.

 

d.

If an injunction, decree or judgment is entered providing that Licensee may not use any of the Products in the manner contemplated by this Agreement without violating the intellectual property rights of a third party, Licensor may, at its sole option either (i) procure for Licensee the right to use the Products as furnished hereunder, or (ii) replace or modify the Products to make the same non-infringing, within a reasonable time.

 

e.

If the Licensee receives notice of the assertion by any third party of any claim or of the commencement by any such third person of any claim or action (any such claim or action being referred to herein as an “Indemnifiable Claim”) with respect to the Licensor, the Licensee shall promptly notify the Licensor in writing (the “Claim Notice”) of the Indemnifiable Claim.

 

f.

The Licensor will have the right to assume defense and defend the Licensee against the Indemnifiable Claim with counsel of the Licensor’s choice so long as (i) the Licensor notifies the Licensee in writing within twenty-one (21) days after the Licensee has given notice of the Indemnifiable Claim that the Licensor, subject to the terms and conditions hereof, will indemnify the Licensee from and against the entirety of any costs and damages the Licensee may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Indemnifiable Claim, (ii) the Licensor provides the Licensee with evidence reasonably acceptable to the Licensee that the Licensor will have the financial resources to defend against the Indemnifiable Claim and fulfill its indemnification obligations hereunder, (iii) the Indemnifiable Claim involves only money damages and does not seek an injunction or other equitable relief, (iv) settlement of, or an adverse judgment with respect to, the Indemnifiable Claim is not, in the good faith judgment of the Licensee, likely to establish a precedential custom or practice materially adverse to the continuing business interests of the Licensee, and (v) the Licensor conducts the defense of the Indemnifiable Claim actively and diligently.

 

g.

So long as the Licensor is conducting the defense of the Indemnifiable Claim in accordance with this Article 10, (i) the Licensee may retain separate co-counsel at its sole cost and expense and participate in the defense of the Indemnifiable Claim, (ii) the Licensee will not consent to the entry of any judgment or enter into any settlement with respect to the Indemnifiable Claim without the prior written consent of the Licensor (not to be withheld unreasonably).  , and (iii) the Licensor will not consent to the entry of any judgment or enter into any settlement with respect to the Indemnifiable Claim without the prior written consent of the Licensee (not to be withheld unreasonably).

 

h.

Licensor warrants that it has the right to enter into this Agreement and Licensor’s performance of this Agreement will not violate any Agreement between Licensor and any third persons.

 

i.

Licensee warrants that it has the right to enter into this Agreement and Licensor’s performance of this Agreement will not violate any Agreement between Licensee and any third persons.

 

 

12.

RENEWAL.

13

FORCE MAJEURE.

14.

a.

This AGREEMENT may be terminated in any one of the following ways:

 

i.

By not less than 90 days written notice from the Licensee to the Licensor if the Licensee has elected to discontinue manufacture and sale of the Licensee’s Products, provided however, that all orders for the Product then outstanding under Section 8 shall nevertheless be completed and delivered to Licensor.

 

ii.

By either party, if the other defaults in its performance of any material provision, warranty, term or condition of this Agreement and fails to cure the default within thirty (30) days of receipt of written notice from the non defaulting party, describing such default in reasonable detail, and

iii.

By written consent of both parties;

 

b.

Each party shall also have the right to terminate this Agreement by giving written notice of termination on the other party at any time upon or after:

 

1.

filing by the other party of a petition of bankruptcy for liquidation; or

 

2.

appointment of a Receiver for all or a substantial part of the property of the other party; or

 

3.

making by the other party of any assignment for the benefit of its creditors; or

 

4.

institution of any proceeding for the liquidation or winding up of the business or for the termination of the corporate charter of the other party which is not dismissed for a period of ninety(90) days..

15.

CONSEQUENCES OF TERMINATION:

 

a.

Upon the termination of this Agreement for any cause arising out of Licensee’s default, the Licensee will immediately discontinue the use and sale of all the Products, Trade Names, trademarks, signs, structures, and forms of advertising showing the relationship with the Licensor and the Products thereof.  Upon expiration of the Agreement or upon termination of this Agreement owing to default of Licensor or procedure suffered by Licensor as described in Section 14b, or owing to force majeure affecting either party, Licensee shall have the right to continue to produce and sell Licensee’s three (3) wheeler, two (2) wheeler & four (4) wheeler products incorporating the Products, without any further payments, other than those that have fallen due up to the date of expiration / termination as the case may be, under this agreement.

 

b.

However, Licensee will discontinue use of Trade Names, trademarks, signs, structures, and forms of advertising previously approved by the parties.

16.

GOVERNING LAW.

17.

ARBITRATION:

18.

NOTICES:

19.

ENTIRE AGREEMENT:

20.

AMENDMENTS:

21.

NO WAIVER:

22.

SEPARABILITY OF PROVISIONS.

1)

Integrated Electric Motor and Controller operating off of a nominal 48V DC bus, or 12V variations thereof that may be referred to but not limited to as the, EMS EMS401-043, and has similar specifications but not limited to that shown in LICENSOR Documents 340-000018 EMS401-043.

2)

Vehicle Control Module that may be referred to but not limited to VCM, VCM440, and has similar specifications but not limited to that shown in LICENSOR Document 340-000015 VCM440.

3)

Any major subcomponent of the EMS401-043 such as the electric motor and or the motor controller package in a standalone configuration that may be referred to but not limited to M401 or EVC401-043, 3 Phase Motor Controllers These components will have similar but not limited to the following specifications as shown in LICENSOR documents 340-000025 and 340-000014 EVC401

4)

Any derivatives of said components that exists and or may exist in the future that meet all of the following criteria:

 

a)

Motor components

 

i)

Stator sizes equal to or within the range of 230 to 250mm Outer diameter and of 130mm to 150mm Inner diameter.

 

ii)

Stator Assemblies equivalent to 8 poles with winding configuration of 4 coils per phase in parallel, 4 coils in series per phase or any combination thereof.

 

iii)

Motor configurations consisting of one stator per system or unit.

 

iv)

Single Rotors with 8 magnet poles that may consist of but not limited to 1 or more magnets per pole.

 

v)

Motor configurations consisting of various steady state Air-gap, allowing various Torque and Speed Combinations.

 

b)

Controller System Components

 

i)

Similar Peak power levels as described in LICENSOR document 340-000018 plus 1kW

 

ii)

With or without the various subsections of the Controller system such as but not limited too, the Power Junction, State of Charge, DC/DC converter, and Solid State Contactor.

 

iii)

Operation at a nominal 48 volts DC plus or minus 12V.

1)

Patent Pending

 

a)

“A Variable Speed Drive For A Synchronous Electric Motor” also referred to but not limited to “MORPH code”

2)

Provisional Patents Filed

 

a)

*****

 

b)

*****

 

c)

*****

3)

Proprietary & Confidential

 

a)

Software, Algorithm & Controls:

 

i)

Overall Vehicle Control, configuration and system interaction.

 

ii)

Controller- Software, algorithms and source code.

 

iii)

Vehicle Control Module (VCM) - Software, algorithms and source code.

 

iv)

Battery and Transmission Interface Module (BXIM) - Software, algorithms and source code.

 

v)

Battery Monitoring Module (BMM) - Software, algorithms and source code

 

vi)

Various Utilities, such as but not limited to Vehicle Set-up and interface, Test bench, EMS Tuning –Software, algorithms and source code.

 

vii)

A list of Software that may or may not apply to THE PRODUCTS as represented by LICENSOR’s part numbers commencing with 070-XXXXX can be found in Attachment 5.  The list shall not be construed to represent everything in entirety or convey transfer of rights and/ or required by the LICENSEE for purposes of production as defined in the MASTER LICENSE AGREEMENT.

 

b)

Overall Vehicle interface – Primary circuit, schematic,

 

i)

Electrical Circuits, Schematics, and but not limited to PCB design, layout and population.

 

ii)

Controller- Circuit, schematic, PCB design, layout and population, consisting of the following:

 

iii)

VCM - Circuit, schematic, PCB design, layout and population.

 

iv)

BXIM- Circuit, schematic, PCB design, layout and population.

 

v)

BMM- Circuit, schematic, PCB design, layout and population.

 

vi)

Position Sense Board (PSB)

 

vii)

Transmission synchronizer and Auto Shifter- Circuit, schematic, PCB design, layout and population.

 

c)

Rotor construction, dimensions, primary component make up and assembly.

 

d)

Electro-magnetics:

 

i)

Stator assembly, primary construction, dimensions, and wiring configurations consisting of four coils in parallel, series or combinations thereof.

 

ii)

Coils – primary construction, shape, dimension and configuration such as but not limited to the size, number of turns and method of achieving said turns.

 

e)

Mechanical Design, Configuration and Concept:

 

i)

Controller housing concept, layout, assembly and primary construction.

 

ii)

Motor housing concept and primary layout and primary construction.