Exhibit 10.6
COLLABORATION AGREEMENT
This COLLABORATION AGREEMENT (the "Agreement") is made and entered into
between: Neah Power Systems, Inc., with its principal place of business at 00000
00xx Xxx XX, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000 ("Neah") and Novellus Systems,
Inc. with its principal place of business at 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx,
XX 00000 ("Novellus"), effective as of April 1, 2004 ("Effective Date").
RECITALS
Neah is in the business of developing silicon-based fuel cell
technology. Novellus is a provider of advanced deposition and surface
preparation systems for the semiconductor industry. Neah desires to collaborate
with Novellus to develop technology related to the application of catalyst and
conductive films to silicon to be used as a fuel cell electrode, and Novellus is
willing to enter into such collaboration on the terms set forth in this
Agreement.
NOW, THEREFORE, for valuable consideration, receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1.0 DEFINITIONS.
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.
1.2 "COMPONENTS" shall mean porous silicon (a) to which catalyst
and conductive films have been applied, and (b) that are designed,
developed or manufactured using any Project IP.
1.3 "COMPONENT EQUIPMENT" shall mean equipment that (a) is
designed, developed or manufactured using any Project IP, and (b) is
specifically designed to manufacture Components.
1.4 "COMPONENT EQUIPMENT PROCESSES" shall mean all unit processes
performed by Component Equipment.
1.5 "DEVELOPED" shall mean, (a) conceived, with respect to
inventions and discoveries, (b) fixed in a tangible medium of
expression, with respect to works of authorship, and (c) created with
respect to other designs, ideas, and technology.
1.6 "FUEL CELL FIELD OF USE" shall mean the design, development,
manufacturing, sale and other distribution of Components used as fuel
cell electrodes, but not the design, development, manufacturing, sale
or other distribution of Component Equipment or the use or exploitation
of Component Equipment Processes.
1.7 "INTELLECTUAL PROPERTY RIGHTS" shall mean all copyrights,
copyright applications, patents, patent applications, trade secrets,
trademarks, moral rights,
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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, or any other state, country or
jurisdiction.
1.8 "JOINTLY DEVELOPED IP" shall mean all Project IP which is
Developed jointly by Neah and Novellus in connection with the
activities contemplated by this Agreement.
1.9 "NEAH PROJECT IP" shall mean all Project IP which is Developed
by Neah in connection with the Project independently of Novellus.
1.10 "NOVELLUS PROJECT IP" shall mean all Project IP which is
Developed by Novellus in connection with the Project independently of
Neah.
1.11 "PROJECT" shall mean the joint development of technology
related to Components, Component Equipment and Component Equipment
Processes pursuant to this Agreement in accordance with the Project
Plan, and commencing on the Effective Date.
1.12 "PROJECT IP" shall mean all inventions, discoveries, works of
authorship, designs, ideas, and technology Developed by either party,
jointly or independently, in the course of performance of the Project,
and shall not include any Background IP.
1.13 "PROJECT PLAN" shall mean the detailed plan for the Project, a
draft of which is set forth on EXHIBIT A and shall be finalized by
mutual agreement of the parties prior to June 1, 2004, as may be
amended by mutual written agreement of the parties from time to time.
2.0 THE PROJECT.
2.1 COLLABORATION. The parties agree to collaborate to complete
the Project in accordance with this Agreement and the Project Plan. The
parties agree, prior to June 1, 2004, to mutually identify each party's
obligations under the Project Plan.
2.2 NOVELLUS PERSONNEL. During the term of the Project, Novellus
shall provide Neah with the services of Novellus technical personnel,
to be mutually agreed upon and listed in EXHIBIT B (the "Novellus
Personnel"), on a full time or part time basis, to be mutually agreed
upon and specified on EXHIBIT B. Novellus reserves the right to change
the Novellus Personnel in its reasonable discretion, and shall consult
with Neah prior to such change if such consultation is reasonably
practicable.
2.2.1 Some of the Novellus Personnel, to be mutually agreed
upon and specified on EXHIBIT B, may relocate to Neah's
Seattle, Washington facility during the Project Term to
perform work on the Project. Neah shall reimburse Novellus in
a lump-sum amount to be mutually agreed upon in accordance
with Novellus' standard relocation policies and specified on
Exhibit B for the reasonable relocation costs for such
Novellus Personnel.
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2.2.2 Neah shall reimburse Novellus for (a) the gross
amount of all salaries and wages, benefit costs and other
compensation associated with the Novellus Personnel with
respect to the time period of their work on the Project, in an
amount to be mutually agreed upon and specified on EXHIBIT B,
and (b) for costs approved in advance by Neah, in accordance
with rates and procedures to be mutually agreed upon and
specified on EXHIBIT B. Novellus shall invoice Neah for such
costs on a monthly basis.
2.2.3 All Novellus Personnel shall at all times remain the
employees of Novellus. Neah shall have no responsibility for
withholding of taxes or other matters which are customarily
the responsibility of an employer. All Novellus Personnel
shall comply with reasonable workplace rules and procedures
established by Neah.
2.2.4 Neah shall indemnify, defend and hold harmless
Novellus and its officers, directors, employees, shareholders
and agents (each an "Indemnified Party"), from and against any
and all claims, demands, liabilities, costs, damages, expenses
(including attorneys' fees and expenses), and causes of action
of any nature whatsoever (collectively, "Losses") brought by
or on behalf of a member of the Novellus Personnel arising
from or in any way related to (a) workplace conditions at
Neah's Seattle, Washington facility, or (b) the actions or
omissions of any Neah employee or contractor, except for
Losses arising from or in any way related to the gross
negligence or willful misconduct of the Novellus Personnel.
Losses may include, but are not limited to, claims related to
personal injury or alleged emotional distress, damage to
personal property, or employment practices.
2.2.5 Neah shall provide a suitable and safe work
environment for the Novellus Personnel during the time period
of their work on the Project, and the Novellus Personnel shall
not be required to sign Neah's nondisclosure or invention
assignment agreement, or a waiver or release in connection
with their work on the Project. Novellus and each of the
Novellus Personnel shall have executed Novellus' standard
proprietary information and inventions agreement prior to the
time period of his or her work on the Project.
2.3 NEAH PERSONNEL. During the term of the Project, Neah shall
dedicate a sufficient number of technical personnel to diligently
perform its obligations under the Project Plan. Neah shall provide the
Novellus Personnel with access to qualified Neah technical personnel
and shall otherwise provide reasonable technical support to the
Novellus Personnel in connection with the Project.
2.4 EXCLUSIVITY. During the Project term, neither Novellus nor
Neah shall enter into any discussions or agreements with any third
parties with respect to the application of catalyst and conductive
films to silicon to be used as a fuel cell electrode. Except for the
foregoing restriction, nothing herein shall be deemed to restrict, in
any way, the freedom of either party to conduct any business or
activity whatsoever without any accountability to the other party.
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2.5 EQUIPMENT. Novellus shall loan Neah equipment to be reasonably
determined by Novellus and described on EXHIBIT C, together with such
other equipment as may be agreed upon in writing by the parties (the
"Equipment") for use during the Project term, at no cost to Neah. The
Equipment (a) shall be delivered to Neah's Seattle, Washington facility
at Neah's cost, (b) shall not be moved or transferred from such
facility without Novellus' prior written consent, and (c) shall be
returned by Neah to Novellus upon termination of this Agreement at
Neah's expense and in the same condition as received, normal wear
excepted. While the Equipment is in Neah's possession, Neah shall be
responsible for all necessary maintenance of the Equipment as specified
by Novellus to Neah, shall bear all risk of loss or damage to the
Equipment, and shall maintain physical damage insurance covering the
Equipment on an "all risks" of physical loss or damage basis, for the
full replacement cost (subject to reasonable deductible amounts). Such
insurance policy will (i) be in form and content reasonably acceptable
to Novellus, (ii) provide that such insurance will not be canceled or
coverage changed unless thirty (30) days' prior written notice has been
given to Novellus, and (iii) will name Novellus as an additional
insured. Neah will deliver such policy or certificate thereof to
Novellus on or before five (5) days prior to delivery of Equipment by
Novellus to Neah.
2.6 WARRANT. Upon execution of this Agreement, Neah shall grant
Novellus a warrant to purchase one million shares of the common stock
of Neah at an exercise price of twenty-five cents ($0.25) per share in
accordance with the terms set forth on EXHIBIT D attached hereto. The
Warrant shall vest upon completion of the milestones as provided in
EXHIBIT D.
2.7 INDEPENDENT RELATIONSHIP. The parties shall at all times act
as independent contractors and nothing contained in this Agreement
shall be deemed to constitute either party as the partner, agent, or
legal representative of the other party, or to create any fiduciary
relationship between them for any purpose whatsoever. Neither party
hereto shall have any authority to act for or to assume any obligation
or responsibility on behalf of the other party, except as may be
expressly authorized in writing by the other party.
3.0 SUPPLY OF COMPONENTS AND COMPONENT EQUIPMENT. It is the intent of the
parties that Neah and Novellus shall enter into an agreement pursuant
to which Novellus shall manufacture Components, and Neah hereby grants
Novellus a right of first negotiation with respect to the manufacture
of Components.
3.1 COMPONENTS: RIGHT OF FIRST NEGOTIATION. Prior to commencing
negotiations with any third party with respect to the manufacture of
Components, Neah shall notify Novellus and the parties shall enter into
discussions, in good faith, with respect to terms pursuant to which
Novellus shall have, for a period of five years (subject to renewal on
mutually acceptable terms), (a) the exclusive right to manufacture
Components for use by or sale to Neah, (b) the exclusive right to sell
such Components to Neah, and (c) an exclusive license under all of
Neah's Intellectual Property Rights necessary for such manufacture and
sale. If the parties have been unable to enter into an agreement with
respect to the manufacture of Components by Novellus within thirty (30)
days following the date of the notice from Neah, the parties shall
enter
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into non-binding mediation as provided in Section 11.4.1 below in an
attempt to agree upon the terms of such an agreement. If the parties
continue to be unable to reach agreement within sixty (60) days
following the commencement of the mediation, Neah may negotiate with
third parties with respect to the manufacture of Components used as
fuel cell electrodes, but shall not enter into an agreement with any
such third party unless (i) each material term of such agreement is no
more favorable to such third party than the term offered by Neah to
Novellus during the negotiations pursuant to this Section 3.1, and (ii)
the terms of such agreement (and any related or side agreements), taken
as a whole, are no more favorable to such third party than the terms,
taken as a whole, offered by Neah to Novellus during the negotiations
pursuant to this Section 3.1. If the terms of a proposed agreement with
a third party do not meet the conditions of (i) and (ii) above, then
Neah must notify Novellus of the terms of the proposed agreement and
must repeat the procedures set forth in this Section 3.1 with Novellus
with respect to such terms. At Novellus' request, Neah shall provide a
copy of all agreements with respect to the manufacture of Components
used as fuel cell electrodes (and any related or side agreements) to an
independent party selected by Novellus and under a duty not to disclose
the terms of such agreements (or any related or side agreements) for
the purposes of confirming to Novellus whether such agreements meet the
conditions of (i) and (ii) above.
3.2 TECHNICAL INFORMATION. In the event that, pursuant to Section
3.1, Neah enters into an agreement with a third party with respect to
the manufacture of Components used as fuel cell electrodes, Novellus
shall, at Neah's expense, provide reasonable cooperation to Neah and
such third party to provide Neah and such third party with technical
information solely related to Project IP necessary to manufacture
Components used as fuel cell electrodes, but not technical information
related to Project IP that can be used to manufacture Component
Equipment or to use or exploit Component Equipment Processes. For
purposes of clarification, no license, express or implied, is granted
by Novellus to Neah or such third party under any Intellectual Property
Rights to Novellus Background IP or under Novellus' rights pursuant to
Section 5.6.
3.3 COMPONENT EQUIPMENT.
3.3.1 Novellus agrees not to sell Component Equipment if
Novellus knows (with no duty to investigate) that such sale
would constitute contributory infringement by Novellus of
Neah's rights under patents to the Project IP in the Fuel Cell
Field of Use ("Contributory Infringement"). If Novellus has
sold Component Equipment to a third party and Neah believes
that such sale would constitute Contributory Infringement, the
parties shall enter into non-binding mediation and binding
arbitration as provided in Section 11.4 below to determine
whether such sale constituted Contributory Infringement.
3.3.2 In the event Novellus provides notice to Neah that it
has decided not to use and commercialize the Project IP for
the design, development, manufacturing, sale and other
distribution of Component Equipment, Novellus shall negotiate
the grant of a royalty-free, non-exclusive license to Neah to
use and commercialize the Project IP for the design,
development, manufacturing, sale and other distribution of
Component Equipment, and the use or exploitation of Component
Equipment Processes.
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3.3.3 Neah and any third party designee who will
manufacture Components on Neah's behalf (each, a "Purchaser")
agree to purchase Component Equipment only from Novellus,
subject to the procedures set forth in this Section 3.3.3. A
third party designee shall not purchase Component Equipment
unless authorized to manufacture Components used as fuel cell
electrodes in accordance with the right of first negotiation
granted to Novellus in Section 3.1 above. In the event that a
Purchaser desires to purchase Component Equipment following
completion of the Project, Neah shall notify Novellus and the
parties shall negotiate the sale of Component Equipment to
such Purchaser. If the parties have been unable to enter into
an agreement with respect to such sale within thirty (30) days
following the date of the notice from Neah, the parties shall
enter into non-binding mediation as provided in Section 11.4.1
in an attempt to agree upon the terms of such an agreement. If
the parties continue to be unable to reach agreement within
sixty (60) days following the commencement of the mediation,
the parties shall enter into binding arbitration as provided
in Section 11.4.2 below to establish terms that would be
commercially reasonable for such sale. At such time, Novellus
shall, at its option, either (a) agree to sell such Component
Equipment to the Purchaser on the commercially reasonable
terms established through arbitration, in which case Purchaser
shall be obligated to purchase such Component Equipment on
such terms, or (b) grant a royalty-free, non-exclusive,
non-transferable, and non-sublicenseable license to the
Purchaser to use and commercialize the Project IP for the
design, development, manufacturing, sale and other
distribution of Component Equipment, and the use or
exploitation of Component Equipment Processes.
3.4 TECHNICAL INFORMATION. In the event that, pursuant to Section
3.3.2 or 3.3.3, Novellus grants a license to use and commercialize the
Project IP for the design, development, manufacturing, sale and other
distribution of Component Equipment, and the use or exploitation of
Component Equipment Processes, Novellus shall, at Neah's expense,
provide reasonable cooperation to Neah to provide Neah with technical
information solely related to Project IP necessary to manufacture
Component Equipment or to use or exploit Component Equipment Processes.
For purposes of clarification, no license, express or implied, is
granted by Novellus to Neah or such third party under any Intellectual
Property Rights to Novellus Background IP.
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4.0 CONFIDENTIALITY.
4.1 "PROJECT CONFIDENTIAL INFORMATION" shall mean any and all
information and materials (whether in writing, or in oral, graphic,
electronic or any other form) developed by either party, jointly or
independently, in the course of performance of the Project, and that
derives independent economic value, actual or potential, from not being
generally known to the public or to other persons who can obtain
economic value from its disclosure or use.
4.2 OBLIGATIONS REGARDING PROJECT CONFIDENTIAL INFORMATION. Each
party agrees that it shall protect the confidentiality of Project
Confidential Information with at least the same degree of care as it
uses to protect its own confidential information (but in no event less
than reasonable care). Each party agrees not to use Project
Confidential Information for any purpose other than (a) its performance
of the Project, (b) as reasonably necessary to register, confirm or
perfect the Project IP as mutually agreed upon by the parties pursuant
to Section 5.8, (c) as reasonably necessary to exercise such party's
rights to commercialize Project IP under Section 5.5 or 5.6,
respectively, (d) as reasonably necessary to enforce such party's
rights to Intellectual Property Rights in the Project IP in accordance
with Section 5.12, and (e) as reasonably necessary to defend itself in
accordance with Section 5.13. Each party shall not disclose Project
Confidential Information to any person or entity other than (i) to its
officers, employees and consultants that need access to such Project
Confidential Information in order to effect the intent of this
Agreement and who agree to be bound by the terms of this Section 4 or a
similar written agreement, (ii) as reasonably necessary to register,
confirm or perfect the Project IP as mutually agreed upon by the
parties pursuant to Section 5.8, (iii) as reasonably necessary to
exercise such party's rights to commercialize Project IP under Section
5.5 or 5.6, respectively; provided that such disclosure is subject to
confidentiality obligations similar to the terms of this Section 4,
(iv) as reasonably necessary to enforce such party's rights to
Intellectual Property Rights in the Project IP in accordance with
Section 5.12, and (v) as reasonably necessary to defend itself in
accordance with Section 5.13.
4.3 "BACKGROUND CONFIDENTIAL INFORMATION" shall mean any and all
information and materials (whether in writing, or in oral, graphic,
electronic or any other form), other than Project Confidential
Information, disclosed by one party to the other party that is marked
as confidential or that from its nature should reasonably be considered
to be confidential.
4.4 OBLIGATIONS REGARDING BACKGROUND CONFIDENTIAL INFORMATION.
Each party agrees that it shall protect the confidentiality of the
other party's Background Confidential Information with at least the
same degree of care as it uses to protect its own confidential
information (but in no event less than reasonable care). Each party
agrees not to use the other party's Background Confidential Information
for any purpose other than its performance of the Project. Each party
shall not disclose the other party's Background Confidential
Information to any person or entity other than its officers, employees
and consultants that need access to such Confidential Information in
order to effect the intent of this Agreement and who agree to be bound
by the terms of this Section 4 or a similar written agreement.
4.5 UNAUTHORIZED USE OR DISCLOSURE. Each party shall immediately
give notice to the other party of any unauthorized use or disclosure of
Project Confidential Information or the other party's Background
Confidential Information, and agrees to assist the other party to
remedy such unauthorized use or disclosure.
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4.6 SURVIVAL. The obligations set forth in this Section 4 shall
survive for a period of five (5) years following the termination of
this Agreement.
4.7 EXCEPTIONS. Notwithstanding the foregoing, the parties agree
that (a) all information and materials which are or become available to
the general public other than through breach of this Agreement, and (b)
a party's Background Confidential Information which (i) is rightfully
in the recipient's possession prior to disclosure by such party, as
evidenced by the recipient's contemporaneous written records, (ii) is
disclosed to the recipient by a third party without breach of any
confidentiality obligation, or (iii) is independently developed by the
recipient without use of the other party's Background Confidential
Information, as evidenced by the recipient's contemporaneous written
records, shall not be subject to the restrictions set forth in this
Section 4.
5.0 INTELLECTUAL PROPERTY RIGHTS
5.1 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. Upon
Neah's request, Novellus shall use commercially reasonable efforts to
identify and provide notice to Neah of all patents owned by Novellus
(excluding patents to Project IP) that may be infringed upon by
Background IP incorporated by Novellus into Components. Upon Novellus'
request, Neah shall use commercially reasonable efforts to identify and
provide notice to Novellus of all patents owned by Neah (excluding
patents to Project IP) that may be infringed upon by Background IP
incorporated by Neah into Component Equipment or Component Equipment
Processes.
5.2 OWNERSHIP OF INDEPENDENTLY DEVELOPED PROJECT IP. Subject only
to the express license granted in Section 5.5, all right, title and
interest (including Intellectual Property Rights) to Novellus Project
IP shall be owned solely and exclusively by Novellus. Subject only to
the express license granted in Section 5.6, all right, title and
interest (including Intellectual Property Rights) to Neah Project IP
shall be owned solely and exclusively by Neah.
5.3 OWNERSHIP OF JOINTLY DEVELOPED IP. Subject only to the express
licenses granted in Sections 5.5 and 5.6, 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 hereby assigns to
Novellus and Novellus hereby assigns to Neah an equal, undivided, joint
ownership interest in Jointly Developed IP so that Neah and Novellus,
respectively, each has an equal, undivided, joint ownership interest in
the Jointly Developed IP.
5.4 USE OF JOINTLY DEVELOPED IP. Subject to the terms of Sections
5.5 and 5.6, each party shall have the right to use, make, have made,
sell, import and
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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 IP.
Neither party shall have a "duty to account" or share profits from the
Jointly Developed IP with the other party.
5.5 EXCLUSIVE RIGHT TO COMMERCIALIZE IN THE FUEL CELL FIELD OF
USE. Notwithstanding the other terms of this Agreement, Neah shall have
the exclusive right to use and commercialize the Project IP in the Fuel
Cell Field of Use, except that Novellus shall have the right to use and
commercialize the Project IP in connection with the supply of
Components by Novellus to Neah. Novellus agrees that it shall not,
directly 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. Novellus
hereby grants Neah 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 Novellus Project IP and
the Jointly Developed IP, solely in the Fuel Cell Field of Use.
5.6 EXCLUSIVE RIGHT TO COMMERCIALIZE OUTSIDE THE FUEL CELL FIELD
OF USE. Notwithstanding the other terms of this Agreement, Novellus
shall have the exclusive right to use and commercialize the Project IP
outside the Fuel Cell Field of Use. Neah agrees that it shall not,
directly or indirectly, use or commercialize, or license third parties
to use or commercialize, the Project IP outside the Fuel Cell Field of
Use. Neah hereby grants Novellus 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 Project IP and the
Jointly Developed IP, solely outside the Fuel Cell Field of Use.
5.7 BACKGROUND IP. The licenses referred to in Sections 5.5 and
5.6 above shall not include any rights in any Background IP. Novellus
agrees to negotiate the grant of a non-exclusive license to Neah on
commercially reasonable terms under Novellus' Background IP as
necessary for Neah to use and commercialize the Project IP in the Fuel
Cell Field of Use. Neah agrees to negotiate the grant of a
non-exclusive license to Novellus on commercially reasonable terms
under Neah's Background IP as necessary for Novellus to use and
commercialize the Project IP other than for the design, development,
manufacturing, sale or other distribution of Components used as fuel
cell electrodes or Component Equipment.
5.8 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 parties 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.
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5.9 PATENTS ON JOINTLY DEVELOPED IP.
5.9.1 JOINT PATENTS. Each patent (including divisions,
reissues, renewals, continuations and
continuations-in-part) issuing from patent
applications for Jointly Developed IP (each, a "Joint
Patent") shall be owned jointly by the parties in
accordance with Section 5.3. The Joint Patents shall
be subject to the licenses granted in Sections 5.5
and 5.6.
5.9.2 PROCESS FOR PROPOSING PROSECUTION. Either party may
suggest the prosecution of a patent application for
Jointly Developed IP or any portion thereof in any
country. The proposing party ("Proposing Party")
shall describe the scope of the proposed patent
application and the countries in which it desires to
seek patent protection.
5.9.3 PROCESS FOR JOINING PROSECUTION. The other party
("Nonproposing Party") shall have sixty (60) days to
give notice of its desire to join in the prosecution
of such patent application in all or some of the
countries in the notice. The Nonproposing Party may
propose additional countries in which it desires to
seek patent protection, in which case it will be
deemed the Proposing Party with respect to such
additional countries for the purposes of this Section
5.9.
5.9.4 EFFECT OF NOT JOINING PROSECUTION. If the
Nonproposing Party fails to respond within such sixty
(60) day period, the Proposing Party shall
exclusively control the prosecution of such patent
application. If the Nonproposing Party declines to
join in the prosecution of the patent application in
a particular country or countries, the Proposing
Party shall exclusively control the prosecution of
such patent application only in such country or
countries. The Nonproposing Party shall provide, at
the expense of the Proposing Party, information
reasonably necessary for the Proposing Party to
prosecute such patent application. The Proposing
Party shall be responsible for paying one hundred
percent (100%) of the costs and expenses for such
prosecution, and one hundred percent (100%) of the
fees related to the maintenance of the resulting
Joint Patent. The Nonproposing Party shall reimburse
the Proposing Party for fifty percent (50%) of the
prosecution costs and expenses and maintenance fees
related to the resulting Joint Patent, solely to the
extent the Non-Proposing Party receives royalties
from the license of such Joint Patent or an amount as
mutually agreed upon by the parties which would
approximate a reasonable royalty for the sale of
products which would otherwise infringe such Joint
Patent.
5.9.5 EFFECT OF JOINING PROSECUTION. If the Nonproposing
Party chooses to join in the prosecution of the
patent application in a particular country or
countries, the parties shall mutually control the
prosecution of such patent application in such
country or countries, and shall mutually select a
patent attorney for such prosecution. Each party
shall be responsible for paying fifty
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percent (50%) of the prosecution costs and expenses
and maintenance fees related to the resulting Joint
Patent.
5.9.6 FAILURE TO PAY PROSECUTION COSTS AND EXPENSES, OR
MAINTENANCE FEES. If a party (the "Non-Paying Party")
fails to pay its share of the prosecution costs and
expenses or maintenance fees pursuant to Section
5.9.5 within thirty (30) days following receipt of a
notice of nonpayment from the other party (the
"Paying Party"), the Paying Party may give notice of
its intent to continue to prosecute the relevant
patent application or maintain the relevant Joint
Patent, and shall thereafter pay one hundred percent
(100%) of the costs and expenses for such
prosecution, and one hundred percent (100%) of the
fees related to the maintenance fees for such Joint
Patent. The Paying Party shall control the
prosecution of such patent application, and the
Non-Paying Party shall provide, at the expense of the
Paying Party, information reasonably necessary for
the Paying Party to prosecute such patent
application. The Non-Paying Party shall reimburse the
Paying Party for fifty percent (50%) of the
prosecution costs and expenses and maintenance fees
related to the Joint Patent, solely to the extent the
Non-Paying Party receives royalties from the license
of such Joint Patent or an amount as mutually agreed
upon by the parties which would approximate a
reasonable royalty for the sale of products which
would otherwise infringe such Joint Patent.
5.9.7 ABANDONMENT OF PATENT APPLICATION OR JOINT PATENT. If
a party (the "Abandoning Party") desires to abandon a
patent application for Jointly Developed IP or a
Joint Patent in a particular country or countries, it
shall give the other party (the "Non-Abandoning
Party") sixty (60) days prior written notice of its
intention to abandon such patent application or Joint
Patent. If the Non-Abandoning Party desires to
continue to prosecute such patent application or
maintain such Joint Patent, it shall give notice of
such intent to the Abandoning Party within such
period and shall thereafter pay one hundred percent
(100%) of the costs and expenses for such prosecution
and one hundred percent (100%) of the fees related to
the maintenance of such Joint patent. The
Non-Abandoning Party shall control the prosecution in
such country or countries, and the Abandoning Party
shall provide, at the expense of the Non-Abandoning
Party, information reasonably necessary for the
Non-Abandoning Party to prosecute such patent
application. The Abandoning Party shall reimburse the
Non-Abandoning Party for fifty percent (50%) of the
prosecution costs and expenses and maintenance fees
related to the Joint Patent, solely to the extent the
Abandoning Party receives royalties from the license
of such Joint Patent or an amount as mutually agreed
upon by the parties which would approximate a
reasonable royalty for the sale of products which
would otherwise infringe such Joint Patent.
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5.10 PATENTS ON INDEPENDENTLY DEVELOPED PROJECT IP.
5.10.1 NON-JOINT PATENT. Each patent (including divisions,
reissues, renewals, continuations and
continuations-in-part) issuing from a patent
application for Neah Project IP or Novellus Project
IP (each, a "Non-Joint Patent") shall be owned solely
and exclusively by Neah or Novellus, respectively, in
accordance with Section 5.2. The Non-Joint Patents
shall be subject to the licenses granted in Sections
5.5 and 5.6.
5.10.2 PROCESS FOR PROPOSING PROSECUTION. In the event that
(a) Neah desires to prosecute a patent application
for Novellus Project IP which is licensed to it by
Novellus pursuant to Section 5.5, or (b) Novellus
desires to prosecute a patent application for Neah
Project IP which is licensed to it by Neah pursuant
to Section 5.6, such party (the "Requesting Party")
shall notify the other party (the "Responding
Party").
5.10.3 OPTION TO PROSECUTE. The Responding Party shall have
the sole right to initiate the prosecution of the
patent application within ninety days following
receipt of the notice from the Requesting Party. If
the Responding Party initiates the prosecution of the
patent application within such time, the Responding
Party shall exclusively control the prosecution of
such patent application and the Requesting Party
shall reimburse the Responding Party for one hundred
percent (100%) of the reasonable costs and expenses
for such prosecution.
5.10.4 FAILURE TO INITIATE PROSECUTION. If the Responding
Party fails to initiate the prosecution of the patent
application within ninety (90) days following receipt
of the notice from the Requesting Party, the
Requesting Party may prosecute, at its own expense,
the patent application, and shall exclusively control
such prosecution. In such event, the Responding Party
shall execute such documents and take such other
action in connection therewith as may be reasonably
requested by the Requesting Party, at the Requesting
Party's expense.
5.10.5 MAINTENANCE FEES. The Requesting Party shall be
responsible for paying one hundred percent (100%) of
the fees related to the maintenance of the Non-Joint
Patent.
5.11 COOPERATION.
5.11.1 JOINTLY DEVELOPED IP. Each party shall provide to the
other party copies of all documentation and other
information in support of any patent application or
other agreed upon registration process for Jointly
Developed IP.
5.12 INFRINGEMENT OF PROJECT IP.
5.12.1 NOTIFICATION OF INFRINGEMENT. If either party learns
of an infringement by a third party of Intellectual
Property Rights to the Project IP, such party shall
promptly notify the other party and
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shall provide the other party with available evidence
of such infringement.
5.12.2 ENFORCEMENT BY THE PARTIES. Neah shall have the
exclusive right, at its expense, but not the
obligation, to bring and maintain any action in its
own name alleging that a third party has infringed or
misappropriated Intellectual Property Rights to
Project IP in the Fuel Cell Field of Use. Novellus
shall have the exclusive right, at its expense, but
not the obligation, to bring and maintain any action
in its own name alleging that a third party has
infringed or misappropriated Intellectual Property
Rights to Project IP outside the Fuel Cell Field of
Use. In no event shall the non-enforcing party be
obligated to join as a party in any such action,
whether or not the non-enforcing party is deemed an
indispensable party thereto, and the enforcing party
shall not seek to join the non-enforcing party. There
shall be no accounting to the other party in the
event of a favorable judgment or award in such
action. Neither party may settle any such dispute
without the consent of the other party, unless such
settlement would not adversely affect the rights of
the other party.
5.13 INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.
5.13.1 NOTIFICATION OF INFRINGEMENT. If either party learns
that the performance of the Project may infringe upon
the Intellectual Property Rights of a third party,
such party shall promptly notify the other party and
shall provide the other party with available evidence
of such potential infringement.
5.13.2 DEFENSE. In the event a third party brings an action
against either party alleging infringement of any
third party's Intellectual Property Rights arising
out of the commercial exploitation of Project IP, the
party against whom such action is brought (the
"Defending Party") shall defend such action at its
expense. In the event of such action, the parties
shall confer with each other, cooperate and provide
reasonable assistance to each other during the
defense of the action.
6.0 TERM AND TERMINATION.
6.1 TERM. This Agreement shall commence on the Effective Date and,
unless earlier terminated in accordance with Section 6.2 and 6.3, shall
continue until the earlier of (i) the completion of the Project, or
(ii) December 31, 2005. The term of this Agreement may be extended upon
mutual agreement of the parties.
6.2 TERMINATION FOR CAUSE. Either party may terminate this
Agreement by written notice if the other party materially breaches this
Agreement and does not cure such breach within thirty (30) days of
receipt of notice of such breach. Either party may also terminate this
Agreement by written notice to the other party in the event that the
other party (a) becomes or is insolvent; (b) makes an assignment for
the benefit of its creditors; (c) applies for or consents to the
Page 13 of 20
appointment of a receiver, trustee or liquidator for substantially all
of its assets, or such a receiver, trustee or liquidator is appointed
for the other party; (d) files a voluntary petition or proceeding under
any statute of any state or country relating to insolvency or the
protection of the rights of creditors; or (e) has filed against it an
involuntary petition or proceeding under any statute of any state or
country relating to insolvency or the protection of the rights of
creditors that has not been dismissed within sixty (60) days thereof.
6.3 TERMINATION UPON ACQUISITION. Novellus may terminate this
Agreement if Neah undergoes a change of control, including, without
limitation, through the sale of all or substantially all of Neah's
assets, the sale of fifty percent (50%) of the outstanding voting
securities of Neah, or the reorganization, consolidation or merger of
Neah where the holders of Neah's securities before the transaction
beneficially own less than fifty percent (50%) of the outstanding
voting securities of the surviving entity after the transaction,
provided that the acquirer is (a) a competitor of Novellus, as
reasonably determined by Novellus, or (b) a semiconductor equipment
manufacturer.
6.4 EFFECTS OF TERMINATION. Termination of this Agreement by
either party shall not act as a waiver of any breach of this Agreement
and shall not release either party from any liability for breach of
such party's obligations under this Agreement. All other rights and
obligations of the parties shall terminate as of the termination or
expiration of this Agreement, except that each party's rights and
obligations pursuant to Sections 2.2.4, 2.5(c), 2.7, 3, 4, 5, 6.4, 9,
10, and 11 of this Agreement shall survive.
7.0 RELATIONSHIP MANAGER. Each party agrees to appoint, in writing, an
individual to coordinate activities under this Agreement and to act as
the primary point of contact for the other party (the "Relationship
Manager"). The Relationship Managers shall meet at least monthly to
discuss the activities conducted, and to be conducted, pursuant to this
Agreement. The Relationship Managers shall review the Project Plan at
least once every ninety (90) days and discuss amendments and updates
thereto. Either party may change their designated Relationship Manager
upon written notice to the other. The initial Relationship Managers
are:
INITIAL RELATIONSHIP MANAGER FOR NEAH:
Name: Xxxxxx X. Xxxx
Address: 00000 00xx Xxx. XX
Xxxxx 000
Xxxxxxx, XX 00000
Phone: 000-000-0000 Ext. 108
Fax: 000-000-0000
Email: xxxxx@xxxxxxxxx.xxx
INITIAL RELATIONSHIP MANAGER FOR NOVELLUS:
(Name: Xxxx Xxxxxxx
Address: 0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: xxxx.xxxxxxx@xxxxxxxx.xxx
Page 14 of 20
8.0 NO OTHER CONSIDERATION. Neither party shall have any monetary or other
obligations to the other arising out of or related to this Agreement except as
expressly provided for herein. Each party further acknowledges and agrees that
any and all costs, expenses or liabilities incurred by a party arising out of or
related to this Agreement shall be the responsibility of the party incurring
such cost, expense or liability, and neither party shall be liable or obligated
to pay any cost, expense or liability paid or incurred by the other.
9.0 DISCLAIMER OF WARRANTIES. NEITHER PARTY MAKES ANY WARRANTIES (WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE) RELATING TO THIS AGREEMENT, THE
PROJECT, ITS BACKGROUND IP, OR ITS BACKGROUND CONFIDENTIAL INFORMATION,
INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT, OR ANY WARRANTY THAT MAY ARISE OUT
OF COURSE OF PERFORMANCE, COURSE OF DEALING, OR USAGE IN TRADE.
10.0 LIMITATION OF LIABILITY. EXCEPT FOR THE OBLIGATIONS OF THE PARTIES
UNDER SECTION 4 ABOVE, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES, OR FOR ANY
LOSS OF PROFITS, LOSS OF REVENUE, OR LOSS RESULTING FROM INTERRUPTION OF
BUSINESS, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE PROJECT,
REGARDLESS OF THE FORM OF ACTION OR IF THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. EACH PARTY ACKNOWLEDGES THAT THE OTHER PARTY HAS
ENTERED INTO THIS AGREEMENT IN RELIANCE UPON THE LIMITATIONS OF LIABILITY SET
FORTH HEREIN, AND THAT THE SAME FORM AN ESSENTIAL BASIS OF THE BARGAIN BETWEEN
THE PARTIES, WITHOUT WHICH SUCH PARTY WOULD NOT HAVE ENTERED INTO THIS
AGREEMENT. EACH PARTY AGREES THAT THE LIMITATIONS OF LIABILITY SET FORTH HEREIN
WILL SURVIVE AND APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE.
11.0 GENERAL TERMS
11.1 NON-SOLICITATION. During the term of this Agreement and for a
period of one year following the termination of this Agreement, neither
party will directly or indirectly solicit, hire or attempt to hire any
of the other party's employees, or cause others to solicit, hire or
attempt to hire any such employees; provided, however, this obligation
shall not apply to or be breached by (a) advertising of open positions,
or other forms of soliciting employees or contractors that are general
in nature, or (b) responding to unsolicited inquiries about employment
or contract opportunities from any individual or agent.
11.2 ASSIGNMENT. Neither party shall assign, delegate or otherwise
transfer this Agreement or any of the rights and obligations under this
Agreement voluntarily, by operation of law, or otherwise, without the
other party's prior written consent, not to be unreasonably withheld,
provided, however, that either party may assign, delegate and otherwise
transfer all of its rights and obligations under this Agreement to a
successor in connection with a merger or sale of all or substantially
all of the party's business to which this Agreement relates. An
Page 15 of 20
assignment without the requisite consent, if required, shall be void
and unenforceable. Subject to the foregoing, this Agreement will be
binding and inure to the benefit of the parties and their respective
successors and permitted assigns.
11.3 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California,
without giving effect to its provisions governing conflicts of law.
11.4 DISPUTES. All disputes arising under this Agreement shall be
resolved by non-binding mediation and binding arbitration in accordance
with the following terms.
11.4.1 Either party may commence an action by notifying the
other party and the American Arbitration Association
("AAA"). Unless the parties agree upon a mediator
within thirty (30) days following such notification,
AAA will promptly designate a mediator who is
independent, impartial and has relevant industry
experience, and AAA's decision about the identity of
the mediator will be final and binding. The parties
agree to conduct at least eight (8) consecutive hours
of non-binding mediated negotiations within 30 days
after the notice is sent. Each party shall bear its
own expenses for the mediation and they shall each
share equally in the expenses and fees of the
mediator.
11.4.2 If the dispute is not resolved by negotiation or
mediation within thirty (30) days after the first
notice to AAA is sent, then, upon notice by either
party to the other and to AAA, the controversy or
dispute will be submitted for binding arbitration in
accordance with AAA's Commercial Arbitration Rules.
The arbitrator may be selected by mutual agreement of
the parties. If the parties cannot mutually agree
upon an arbitrator within thirty (30) days of notice
of the controversy or dispute, then each party shall
select an arbitrator, and such arbitrators shall
select a third arbitrator. The arbitration shall be
held at a mutually agreeable location in the city of
San Francisco, California, and the United States
Arbitration Act will govern the arbitration, 9 U.S.C.
Sections 1-16 (or by the same principles enunciated
by such Act in the event it may not be technically
applicable). The parties agree that they will abide
by and perform any judgment rendered by the
arbitrator(s). The judgment of the arbitrator(s) will
be final and binding on the parties. Each party shall
bear its own expenses for the arbitration and they
shall each share equally in the expenses and fees of
the arbitrator(s). Notwithstanding the foregoing,
neither party shall be precluded from seeking
injunctive relief from a court of competent
jurisdiction pending the resolution of any dispute in
accordance with this Section 11.4.
11.5 ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties and supersedes all prior or contemporaneous
agreements or representations, written or oral.
Page 16 of 20
11.6 NOTICES. Any notice required or permitted under this Agreement
shall be given in writing and shall be deemed effectively given (a)
upon personal delivery to the party to be notified, (b) upon
confirmation of receipt by fax by the party to be notified, or (c) one
(1) business day after deposit with a reputable overnight courier,
prepaid for overnight delivery and addressed to the party to be
notified at the address indicated for such party in Section 7, or at
such other address as such party may designate by five (5) days advance
written notice to the other party given in the foregoing manner.
11.7 FURTHER ASSURANCES. The parties shall perform all such further
acts, provide such further documents or written assurances, and execute
such further documents as are reasonably required or necessary to carry
out the acts and transactions contemplated by this Agreement.
11.8 COUNTERPARTS. This Agreement may be executed by facsimile and
in counterparts, each of which shall be deemed an original and all of
which together shall constitute one instrument.
11.9 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be
enforceable in accordance with its terms.
11.10 HEADINGS. The headings in this Agreement are for convenience
only, and shall not affect the interpretation of this Agreement.
11.11 BANKRUPTCY CODE. The licenses granted under this Agreement
shall be treated as a license of rights to "intellectual property" (as
defined in Section 101(35A) of Title II of the Unites States Code, as
amended (the "BANKRUPTCY CODE")) for purposes of Section 365(n) of the
Bankruptcy Code. The parties agree that the recipient of each license
may elect to retain and may fully exercise all of its rights and
elections under the Bankruptcy Code provided that such party abides by
the terms of this Agreement, including without limitation the terms of
all licenses granted by such recipient to the other party hereunder.
11.12 AMENDMENT; WAIVER. No modification, amendment or waiver of any
provision of this Agreement shall be effective except pursuant to a
writing signed by a duly authorized representative of each party. The
waiver by either party of a breach of or a default under any provision
of this Agreement shall not be construed as a waiver of any subsequent
breach of or default under the same or any other provision of this
Agreement, nor shall any delay or omission on the part of either party
to exercise or avail itself of any right or remedy that it has or may
have hereunder operate as a waiver of any right or remedy.
Page 17 of 20
IN WITNESS WHEREOF, THE parties hereto have executed this Agreement as of the
Effective Date.
NEAH POWER SYSTEMS, INC. NOVELLUS SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx X. Royal
Name: Xxxxx Xxxxxxx Name: Xxxxx X. Royal
Title: President & CEO Title: Chief Financial Officer
Date: April 30, 2004 Date: April 28, 2004
LIST OF EXHIBITS
EXHIBIT A - PROJECT PLAN
EXHIBIT B - NOVELLUS PERSONNEL
EXHIBIT C - EQUIPMENT
EXHIBIT D - WARRANT
EXHIBIT D
WARRANT
