Exhibit 10.33
CONFIDENTIAL
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
LICENSE AGREEMENT
This License Agreement (this "Agreement") is entered into as of May 4
1999 between General Dynamics Information Systems, Inc., a Delaware
Corporation ("GDIS"), and Conductus, Inc., a Delaware Corporation
("Conductus").
RECITALS
Conductus owns certain technology in the area of superconductive
electronics and cryoelectronics, and uses such technology for research and
development purposes and to make products for both government and commercial
customers. Although it acknowledges that there are multiple existing
opportunities for the use of its technology and the sale of its products to
government customers, Conductus is willing to forego its independent pursuit
of such opportunities and desires to make GDIS its licensee with respect to
such government business, so that Conductus can focus on its commercial
businesses.
AGREEMENT
SECTION 1. DEFINITIONS.
1.1. An "AFFILIATE" of a party will mean an entity directly or
indirectly controlling, controlled by or under common control with that party
where control means the ownership or control, directly or indirectly, of more
than fifty percent (50%) of all of the voting power of the shares (or other
securities or rights) entitled to vote for the election of directors or other
governing authority, as of the date of this Agreement or hereafter during the
term of this Agreement; provided that such entity will be considered an
Affiliate only for the time during which such control exists. An entity will
only be considered an "Affiliate" if it has agreed to be bound to all the
obligations and restrictions set forth in this Agreement, including without
limitation the obligations of confidentiality set forth in Section 10.
1.2. "CONDUCTUS TECHNOLOGY" will mean Patents (as defined
below) as well as all trade secrets, know-how, methods, operating techniques,
processes, technical data, engineering information, drawings, software,
documentation and other technology related to high temperature
superconductive ("HTS") electronics and cryoelectronics and associated
packaging and cryogenics owned by Conductus. Notwithstanding the above,
Conductus Technology does not include (a) magnetic resonance applications, or
(b) nuclear quadrapole applications or magnetic sensing applications other
than for underwater or underground object detection.
1.3. "DISCLOSING PARTY" shall mean a party hereto that
discloses its Proprietary Information to the other party.
1.4. "GOVERNMENT CONTRACTS" will mean any contract for
Licensed Products within the Permitted Market.
1.5. "KEY PERSONNEL" will mean those individuals listed in
Exhibit C.
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1.6. "LICENSED PRODUCT(S)" means (i) any product or part
thereof, and (ii) any technology or technology application or research and
development, the use or sale of which incorporates or is based on or derived
from Conductus Technology.
1.7. "PATENTS" will mean the patents and patent applications
listed on EXHIBIT A and any continuations, continuations-in-part (to the
extent the claims are supported by patents, patent applications or invention
disclosures included in Exhibit A), divisions or reissues thereof.
1.8. "PERMITTED MARKET" will mean the U.S. government or any
state, local or foreign government or any agency, department, bureau or other
subdivision or instrumentality thereof, except that the foreign market will
be limited to military, intelligence and law enforcement entities.
1.9. "PROPRIETARY INFORMATION" of a Disclosing Party will mean
the following, to the extent previously, currently or subsequently disclosed
to the other party hereunder or otherwise: information identified as
proprietary by the Disclosing Party and relating to Licensed Products, the
manufacture or processing thereof, or to the Disclosing Party's business
(including, without limitation, know-how, formulas, processes, ideas,
inventions (whether patentable or not), schematics and other technical,
business, financial, customer and product development plans, forecasts,
strategies and information). In particular, but without limitation,
Conductus Technology will be considered Proprietary Information of Conductus,
regardless of being marked or identified as such. Information will be deemed
to be identified as proprietary, when, in the case of documents, schematics,
plans, software and other tangible information, it is clearly marked as such,
and in the case of intangible information such as know-how, the disclosing
party clearly communicates to the Receiving Party that such information is
proprietary.
1.10. "PROPRIETARY RIGHTS" will mean Patent rights, copyrights,
mask work rights, trade secret rights and all other intellectual property
rights.
1.11. "RECEIVING PARTY" will mean a party hereto that receives
Proprietary Information of the other party.
1.12. "STANDARD PRODUCTS" will mean products (a) supplied to
GDIS under the Cross-License, Supply and Training Agreement to be entered
into by the parties hereto or (b) those products listed in Exhibit F of this
Agreement that GDIS makes or has made using components from suppliers
specified by Conductus, according to procedures and designs specified by
Conductus.
SECTION 2. LICENSE GRANT.
2.1. EXCLUSIVE LICENSE. Subject to all the terms and
limitations of this Agreement, and except for that Conductus Technology
specifically subject to Section 2.2, Conductus hereby grants GDIS an
exclusive, nonsublicensable, perpetual license under its
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Proprietary Rights in the Conductus Technology, to use, make, have made
(including by Defense Microelectronics Activity ("DMEA"), but specifically
excluding Superconductor Technologies, Inc., Illinois Superconductor
Corporation, X.X.xxXxxx de Nemours and Company, Superconductor Core
Technologies, their successors and any direct competitor of Conductus in the
HTS base station commercial wireless marketplace), market and sell Licensed
Products only to the Permitted Market. Notwithstanding the above, Conductus
shall not be prohibited from exercising any rights in the Conductus
Technology for Government Contracts entered into by Conductus as permitted
under Section 3.2 or for Conductus' own internal research and development
purposes. Affiliates of GDIS will have all rights and benefits granted
hereunder subject to the limitations and restrictions of this Agreement.
2.2. NONEXCLUSIVE LICENSE. Subject to all the terms and
limitations of this Agreement, Conductus hereby grants GDIS a nonexclusive,
nonsublicensable, perpetual license under its Proprietary Rights in Conductus
Technology for magnetic quadrapole and magnetic sensing applications for
underwater and underground object detection applications, and to US Patent
Number 5,455,595 and U.S. Patent Application 08/041,731, to use, make, have
made, market and sell Licensed Products only to the Permitted Market.
Affiliates of GDIS will have all rights and benefits granted hereunder
subject to the limitations and restrictions of this Agreement.
SECTION 3. SCOPE OF LICENSE.
3.1. GOVERNMENT AND THIRD-PARTY RIGHTS IN CONDUCTUS
TECHNOLOGY. The United States Government has certain rights, as listed in
Exhibit A, in the Conductus Technology, including patent rights under FAR
52.227-11 and rights in data under DFAR 252.227-7013. Additionally, certain
research partners of Conductus have pre-existing rights to Conductus
Technology. The exclusive license granted herein is subject to and limited by
any such pre-existing rights. Such rights of other parties are listed in
Exhibit A.
3.2. RIGHTS AND LIMITATIONS OF GDIS.
3.2.1. PRODUCTS INCORPORATING CONDUCTUS TECHNOLOGY.
Subject to Section 3.2.2, GDIS will not make, have made by a third party,
market or sell any product incorporating Conductus Technology outside the
Permitted Market either directly or indirectly by a participant in a
distribution channel (for example, an original equipment manufacturer (OEM),
value-added reseller (VAR), distributor or dealer) or by resale by a GDIS
customer. Any entity that receives the "have made" right specified above
must agree to be bound in writing to all the limitations and restrictions on
GDIS hereunder, (including, without limitation, the obligations of
confidentiality in Section 10 of this Agreement.
3.2.2. GDIS LICENSE EXTENSION. Conductus will grant
GDIS, on a case-by-case basis, at the request of GDIS, a limited license to
develop, use, make, have made by a third party, market or sell products
incorporating Conductus Technology outside the Permitted Market.
Notwithstanding the foregoing, Conductus will have no
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obligation to provide such limited license if (i) the product or activities
compete with any product or activity covered by Conductus' business plans, or
(ii) Conductus is bound by other obligations which would preclude its
granting such limited license, or (iii) Conductus elects to develop the
product or pursue the opportunity itself or with another enterprise. Any such
limited license will be subject to the royalty payment provisions of Section
5, except that the 10-year time limit shall not apply. With respect to the
Final Analysis FAISAT-TM- "Xxxxxx XXX" opportunity, which is outside the
Permitted Market, Conductus will either (a) pursue the opportunity alone or
with a partner, (b) license another who agrees to pursue the opportunity or
(c) grant GDIS a limited license under this Section.
3.3. RESERVED RIGHTS AND LIMITATIONS OF CONDUCTUS.
3.3.1. BIDS SEPARATE FROM GDIS. Conductus will not bid
independently of GDIS on Government Contracts which are (a) contracts for the
delivery of hardware; (b) offered for bidding directly to GDIS by a
government customer; (c) contracts for which GDIS can provide technical
competencies which Conductus does not possess; (d) contracts for which GDIS
has access to customer or application information which Conductus does not
possess or (e) contracts which would benefit from GDIS project management
competencies which Conductus does not possess.
3.3.2. GOVERNMENT CONTRACTS. Notwithstanding the
foregoing, Conductus may bid independently of GDIS for Government Contracts
which are for (a) Small Business Innovative Research ("SBIR") awards; (b)
Category 6.1 solicitations as defined under DFAR 235.001; or (c)
opportunities GDIS elects to pursue with a subcontractor other than Conductus.
3.3.3. CONDUCTUS REFERRAL RIGHTS. Notwithstanding any
other provision of this Agreement, Conductus may bid separately on Government
Contracts that GDIS elects not to pursue.
3.4. PROCESS AND DISPUTE RESOLUTION. To ensure that the
parties have an opportunity to expeditiously resolve disputes involving the
rights and limitations of the parties set forth in Sections 2 and 3, the
parties agree to the following procedures:
3.4.1. NOTICE REQUIREMENT. The parties agree to provide
notice as follows: (i) to the extent it is permitted by law to do so, GDIS
will promptly notify Conductus of those opportunities for Government
Contracts specified under Section 3.3.1, which it does not intend to pursue
and any Government Contracts it intends to pursue with a subcontractor other
than Conductus; and (ii) Conductus will notify GDIS of its intent to pursue a
contract within the Permitted Market.
3.4.2. DISPUTE RESOLUTION PROCESS. (a) If the party
receiving notice under Section 3.4.1 believes that it has the right to submit
a bid with respect to such opportunity and intends to submit a such a bid, it
will promptly provide written notice of same to the other party (within one
week of its receipt of notice, but not later
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than fifty percent (50%) of the time remaining to the due date of the
proposal); (b) in the event that both parties believe they have the right
under this Agreement to bid on a business opportunity and that the other
party does not have such right, and have satisfied the notice requirement,
they agree to diligently try to resolve the issue of bidding rights within
one week of the date on which the second notice is delivered; (c) if the
parties cannot reach agreement they will submit the dispute to the respective
chief executive officers of GDIS or the applicable GDIS Affiliate and
Conductus who will exert reasonable, good faith efforts to resolve the
dispute within one week of the date on which the dispute is submitted to
them; and (d) if the chief executive officers cannot reach agreement, the
dispute will be submitted for binding arbitration in accordance with Section
13 of this Agreement.
3.5. FUTURE DEVELOPMENTS. The parties intend to enter into a
Cross-Licensing, Supply and Training Agreement that would, among other
things, allow each of them to cross-license future developments in the
Conductus Technology. Such agreement will address the supply of products to
GDIS and set forth various services to be provided to GDIS relating to the
Conductus Technology. Both parties acknowledge nothing herein creates any
obligation for either of the parties to develop any additional technology.
SECTION 4. TRANSFER OF TECHNOLOGY. Conductus will deliver all
tangible Conductus Technology to GDIS as set forth in Exhibit A. Conductus
will make the Key Personnel available to assist in the transfer of the
intangible Conductus Technology, as described in the Cross License, Supply
and Training Agreement executed between the parties. Any substitutions of
Key Personnel will be made only with persons having substantially similar
expertise and after prior written notice to GDIS.
SECTION 5. PAYMENTS.
5.1. UP-FRONT PAYMENTS. As consideration for the delivery of
the Conductus Technology, GDIS will pay Conductus an up-front nonrefundable,
fee of [*] upon completion of all of the following: (a) the execution of this
Agreement, (b) receipt of the releases, in the form set forth in Exhibit E,
from Transamerica and Silicon Valley Bank and any other releases, if any,
required under Section 14.3; (c) the execution of the Cross License, Supply
and Training Agreement, and (d) the delivery to GDIS of that Conductus
Technology listed in Exhibit A as deliverable on execution of this Agreement.
5.2. ON-GOING PAYMENTS. As additional consideration for this
Agreement, GDIS agrees to pay Conductus [*] on the first day of each month
for a period of [*] beginning on July 1, 1999.
5.3. ROYALTIES. For a period of [*] years after the date
of this Agreement, GDIS will pay a [*] royalty as calculated
in accordance with Exhibit D. The parties have agreed that the royalty shall
be allocated as [*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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[*] for non-patent intellectual property and [*] for Patent rights. The
royalty rates specified in this section will be reduced to [*] for any
Licensed Products or Conductus Technology neither manufactured nor sold in a
country where a patent or patent application licensed hereunder (with claims
covering the items) remains in effect. If all or any part of the royalty is
determined to be an unallowed cost by a U.S. government contracting officer
or as a result of an audit by a U.S. government agency, the royalty to
Conductus will be reduced by one half of the amount of the unallowed royalty
cost.
5.4. NONCREDITABILITY OF PAYMENTS. The payments listed in
Sections 5.1 and 5.2 are not creditable against royalties other obligations
of GDIS to Conductus.
SECTION 6. REPORTING AND PAYMENT. Beginning with the calendar quarter
during which GDIS first invoices a customer with respect to the sale of a
Licensed Product, GDIS will make written reports (even if there are no sales)
and earned royalty payments to Conductus within forty-five (45) days after
the end of each such quarter. This report will state the number,
description, and aggregate royalty base during such completed calendar
quarter, and the resulting calculation of earned royalty payment due
Conductus for such completed calendar quarter. All royalties will be paid to
Conductus in US Dollars. The royalty on sales in currencies other than US
Dollars will be calculated using the appropriate foreign exchange rate for
such currency quoted by the Bank of America (San Francisco) foreign exchange
desk, on the close of business on the last banking day of each calendar
quarter. All non-US taxes of GDIS related to royalty payments shall be paid
by GDIS and are not deductible from the payments due to Conductus. If any
payments are not received by Conductus when due, GDIS will pay to Conductus
interest charges on such payments at a rate of eighteen percent (18%) per
annum or the maximum rate permitted by law, whichever is less. Such interest
will be calculated from the date payment is due until the date of payment.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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SECTION 7. GDIS COVENANTS. GDIS will keep and maintain detailed and
accurate books and records with regard to sales of Licensed Products by it
and any of its Affiliates, royalties, and the calculation thereof. Conductus
or its representatives will be entitled to review and audit such books and
records from time to time during normal business hours upon reasonable notice
to GDIS and at Conductus' expense; provided that GDIS will bear any such
expense if the review or audit shows an underpayment of more than five
percent (5%) for the applicable period. Any underpayments discovered during
an audit will become immediately due and payable to Conductus.
SECTION 8. FINANCIAL STATEMENTS. Beginning with the month and quarter
in which this Agreement is executed, as soon as available, but no later than
the 30th day of each calendar month until the month following the first
anniversary of this Agreement, Conductus will provide GDIS with unaudited
financial statements (balance sheet, income statement and statement of cash
flows) for the preceding month. During the one-year period, Conductus will
also provide GDIS with a copy of its 10Qs and 10K as filed with Securities
and Exchange Commission, as soon as available.
SECTION 9. MAINTENANCE COSTS. If Conductus elects not to pay for
maintenance of any Patents, it will so notify GDIS and provide GDIS with the
opportunity to request that Conductus pay maintenance fees at GDIS's expense.
If GDIS requests Conductus to maintain such Patents, GDIS will advance the
cost of such maintenance charges and associated prosecution fees to Conductus
when due.
SECTION 10. PROPRIETARY INFORMATION.
10.1. IMPORTANCE OF PROPRIETARY INFORMATION. Each party
recognizes the importance to the other of the other's Proprietary
Information. In particular, (a) GDIS recognizes that the Conductus Technology
and other Conductus' Proprietary Information (and the confidential nature
thereof) are critical to the business of Conductus and that Conductus would
not enter into this Agreement without assurance that such technology and
information and the value thereof will be protected as provided in this
Section 10 and elsewhere in this Agreement; and (b) Conductus recognizes that
GDIS's strategic plans, bid decisions and technological capabilities and
other GDIS Proprietary Information (and the confidential nature thereof) are
critical to the business of GDIS in a competitive environment and that GDIS
would not enter into this Agreement without assurance that such technology
and information and the value thereof will be protected as provided in this
Section 10 and elsewhere in this Agreement.
10.2. RESTRICTIONS. Accordingly, each party agrees as
follows: The Receiving Party agrees and will cause its employees to agree (a)
to hold the Disclosing Party's Proprietary Information in confidence and to
take reasonable precautions to protect such Proprietary Information
(including, without limitation, all precautions the Receiving Party employs
with respect to its confidential materials), (b) not to divulge (except when
GDIS is the Receiving Party and has a Licensed Product made by a third party
in accordance with the requirements of Section 2 of this Agreement provided
that third party agrees in writing to be bound by the provisions of this
Section 10) any such
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Proprietary Information or any information derived therefrom to any third
person and (c) not to make any use whatsoever at any time of such Proprietary
Information except as expressly authorized in this Agreement. GDIS will take
reasonable precautions to ensure Conductus financial information disclosed to
GDIS prior to public release is not used by GDIS personnel to buy, sell or
trade Conductus stock. Any Receiving Party must have a legitimate "need to
know" the information being provided hereunder.
10.3. EXCEPTIONS. Without granting any right or license, each
party hereto agrees that the restrictions in Section 10.2 will not apply with
respect to information the Receiving Party can document (a) is in or (through
no improper action or inaction by the Receiving Party, agent or employee)
enters the public domain (and is readily available without substantial
effort), or (b) was rightfully in its possession or known by it prior to
receipt from the Disclosing Party, or (c) was rightfully disclosed to it by
another person without restriction, or (d) was independently developed by it
by persons without access to such information and without use of any
Proprietary Information of the Disclosing Party.
10.4. LEGAL REQUEST OR REQUIREMENT FOR DISCLOSURE. In the
event either party is requested or required (by oral request or written
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand or similar process) to disclose any
Confidential Information of the other party, then such party will notify the
other party promptly in writing of the request or requirement so that the
other party may seek an appropriate protective order. If, in the absence of
a protective order, the party from which disclosure is sought is, on the
advice of outside counsel, compelled to disclose any of the Confidential
Information of the other party or else stand liable for contempt, then the
party from which disclosure is sought may disclose such information provided
that such party will use its reasonable best efforts to obtain at the request
and expense of the other party an order or other assurance that confidential
treatment will be accorded to such information.
10.5. RETURN OF PROPRIETARY INFORMATION. Within thirty (30)
days after a termination of this License Agreement under the provisions of
Section 12, each party will deliver to the other party all tangible
Proprietary Information of that party including all documents or media
containing any such Proprietary Information and any and all copies or
extracts thereof.
10.6. EQUITABLE RELIEF. The parties acknowledge and agree that
due to the unique nature of the Proprietary Information, there can be no
adequate remedy at law for the breach by the other of its obligations under
this Section 10, that any such breach by the other party will result in
irreparable harm to the Disclosing Party and therefore, that upon any such
breach or any threat thereof by a Receiving Party, the Disclosing Party will
be entitled to appropriate equitable relief (without the posting of any bond)
in addition to whatever remedies it might have at law. Each party will
notify the other party in writing immediately if it becomes aware of the
occurrence of any such unauthorized release or other breach. Any breach of
this Section 10 will constitute a material breach of this Agreement.
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SECTION 11. PROTECTION OF PROPRIETARY RIGHTS.
11.1. PRODUCT MARKING. Except to the extent otherwise agreed
by Conductus, Licensed Products will include any patent markings of
Conductus. Except as expressly provided herein, (a) GDIS will not use or
register the xxxx "Clear Site" or the name "Conductus" or any similar xxxx or
name anywhere in the world and (b) GDIS has no right or license with respect
to any xxxx, name or designation of, or used by, Conductus.
11.2. PROCESS. If GDIS becomes aware of any product or
activity of any third party that may involve a material infringement or
violation of any material Patent or other material Proprietary Right relating
to the Conductus Technology, then GDIS will promptly notify Conductus in
writing of such infringement or violation. Conductus may in its discretion
take or not take whatever action it believes is appropriate. If Conductus
elects to take action, GDIS will reasonably cooperate therewith at Conductus'
expense, including joining as a party, if necessary. If Conductus does not,
within ninety (90) days after receipt of such a notice of a patent
infringement, commence action directed toward restraining or enjoining such
patent infringement, GDIS, so long as its license to the Patents is
exclusive, may take such legally permissible action as it deems necessary or
appropriate to enforce its rights relating to the Conductus Technology
granted under Section 2.1 and restrain such infringement. Conductus agrees
to cooperate reasonably, at GDIS' expense, in any such action GDIS initiates
or wishes to initiate. GDIS will indemnify Conductus for any damages, as well
as Conductus' expenses, costs and attorneys' fees, in connection with any
action or suit commenced by GDIS under this Section 11.2. Nothing in this
Section 11.2 allows GDIS or requires Conductus to disclose Proprietary
Information of Conductus.
11.3. CONDUCTUS ACTION. If Conductus initiates and prosecutes
any action under this Section 11, all legal expenses (including court costs
and attorneys' fees) will be borne by Conductus and Conductus will be
entitled to all amounts awarded by way of judgment, settlement or compromise.
11.4. GDIS ACTION. If GDIS initiates and prosecutes any action
under this Section 11, all legal expenses (including court costs and
attorneys' fees) will be borne by GDIS and GDIS will be entitled to all
amounts awarded by way of judgment, settlement, or compromise.
11.5. PATENT SEARCHES. GDIS acknowledges that Conductus has
not conducted comprehensive patent searches. Conductus and GDIS agree to
work cooperatively regarding issues concerning Patents and Proprietary Rights
and similar matters and to exercise reasonable business judgment in carrying
out the objects of this Agreement to avoid exposing either party to liability
under patent or similar laws in any country.
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SECTION 12. TERMINATION.
12.1. GROUNDS FOR TERMINATION. Notwithstanding any provision
herein to the contrary, this Agreement may be terminated: (a) at any time by
the mutual written consent of the parties; (b) by Conductus upon thirty (30)
days written notice in the event of any failure by GDIS to make a royalty
payment when due pursuant to this Agreement, unless GDIS makes such payment
within 10 days after the receipt of written notice from Conductus requesting
that such breach or default be cured; or (c) by either party in the event of
any material breach or default by the other party in the performance of any
of its material obligations under this Agreement which are not cured within
60 days after the breaching party is provided with written notice of such
breach or default, except that if Conductus believes that GDIS has committed
a material breach with respect to Sections 2 or 3, this Agreement will not be
terminated prior to the parties' use of all of the dispute resolution
procedures set forth in Sections 3.4 and 13.
12.2. LIABILITY. If this Agreement is terminated for any
reason, then all rights, licenses and obligations of the parties hereunder
will terminate without the liability of either party to the other party,
except for any liability of a party then in breach; provided that the
provisions of Sections 5 and 6 (as to any royalties due and owing by GDIS),
10, 11.1, 12.2, 12.3 and 13-18 will survive termination and remain in full
force and effect thereafter.
12.3. CONTINUATION. In the event of termination of this
Agreement for any reason, Conductus will offer a license covering the subject
matter of this Agreement to DMEA, on terms and conditions to be mutually
agreed.
SECTION 13. ARBITRATION OF CERTAIN DISPUTES.
13.1. RESOLUTION OF ARBITRAL DISPUTES. Except as otherwise
expressly provided in this Section 13, the parties agree that any dispute or
controversy between the parties arising under or in connection with Sections
2 or 3 that is not otherwise resolved pursuant to Sections 3.4.2 (an
"ARBITRABLE DISPUTE") will be settled exclusively in accordance with the
procedures set forth in this Section 13. Upon the demand of either party, the
parties agree that the procedures set forth in this Section 13 will not be
applicable to disputes or controversies arising in connection with
third-party claims against one or both of the parties to this Agreement or to
any claim, action, suit or proceeding seeking specific enforcement of the
provisions of this Agreement.
13.2. CLAIM NOTICE. Within ten (10) days after the date on
which a dispute is submitted to the chief executive officers pursuant to
Section 3.4.2(d), provided that such dispute remains unsettled, either party
will have the right to demand arbitration of the Arbitrable Dispute by
delivering to the other party a written notice (the "CLAIM NOTICE") demanding
arbitration pursuant to this Section 13.2 and setting forth in reasonable
detail the claims asserted by such party and the facts upon which such claims
are based. Within ten (10) days after delivery of the Claim Notice, the
party receiving the Claim Notice will deliver to the party demanding
arbitration a written notice (the
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"DEFENSE NOTICE") setting forth in reasonable detail such party's defense,
any counterclaims and the facts upon which such defense and counterclaims are
based. In the event of a failure to deliver the Defense Notice, all claims
set forth in the Claim Notice will be deemed denied and such failure will not
serve to delay arbitration in accordance with the provisions of this Section
13.
13.3. SELECTION OF ARBITRATOR. The parties agree that they will
arbitrate before a single arbitrator selected under the rules of the American
Arbitration Association (AAA).
13.4. ARBITRATION RULES. The Arbitrator will conduct its
activities in accordance with the Commercial Rules of the American
Arbitration Association as then in effect. The Arbitrator will decide all
procedural and substantive issues relating to the Arbitrable Dispute,
including without limitation those issues relating to the scheduling of and
rules and procedures applicable to all hearings relating to the Arbitrable
Dispute.
13.5. APPLICABLE LAW. The parties agree that the Arbitrator
will apply the internal laws of the State of Delaware to the merits of the
Arbitrable Dispute and that all hearings relating to the Arbitrable Dispute
will be held in Santa Xxxxx county, California, or at such other place as may
be mutually agreed by the parties.
13.6. DELIVERY OF INFORMATION. Each party agrees that it will
provide to the other party, at least ten (10) days prior to any scheduled
arbitration hearing, materials and information sufficient to apprise the
other party fully with regard to such party's contentions in connection with
the Arbitrable Dispute. Each party will respond promptly to all reasonable
requests for information and documents in its possessions relevant to the
Arbitrable Dispute. The Arbitrator will resolve any disputes between the
parties as to discovery procedures.
13.7. APPORTIONMENT OF COSTS. The costs of arbitration will be
apportioned by the Arbitrator in its award in such manner as the Arbitrator
deems just and reasonable taking into account the circumstances of the
dispute, the conduct of the parties during the arbitration proceeding and the
result of the arbitration. Any costs of arbitration that must be paid prior
to the Arbitrator's award will be borne by the parties equally, without
prejudice to the final apportionment of such costs by the Arbitrator.
13.8. BINDING DECISION; AWARDS. The Arbitrator will as soon as
practicable, but in any event within fifteen (15) days after the selection of
the Arbitrator, render a binding decision and, if applicable, award as to all
Arbitrable Disputes for which it was impaneled. The powers of the Arbitrator
will include the power to award declaratory judgments, specific performance
and injunctive and other equitable relief. The Arbitrator will not have the
power to modify or amend in any respect the provisions of this Agreement,
including without limitation the provision prohibiting the award of certain
damages prohibited under Section 17.
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13.9. U.S. ARBITRATION ACT; JUDGMENT. All arbitrations
conducted pursuant to this Section 13 will be governed by the United States
Arbitration Act, 9 U.S.C. Sections 1-16. Judgment on any award of the
Arbitrator may be entered in any court of competent jurisdiction.
SECTION 14. REPRESENTATIONS AND WARRANTIES OF CONDUCTUS. Conductus
hereby represents and warrants to GDIS that the statements contained in this
Section 14 are correct and complete as of the date of this Agreement.
14.1. ORGANIZATION, POWER AND QUALIFICATION. Conductus is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite corporate power and
authority to own or hold under lease its properties and assets and to carry
on its business as now conducted.
14.2. AUTHORITY. Conductus has all necessary power and
authority, corporate and otherwise, to make, execute and deliver this
Agreement and all other agreements and documents to be executed and delivered
by it pursuant hereto and has taken all necessary actions required to be
taken to authorize it to execute and deliver this Agreement and such other
agreements, and to perform all of its obligations, undertakings and
agreements to be observed and performed by it hereunder and thereunder. This
Agreement has been duly executed and delivered by Conductus, and constitutes
the valid and binding agreement of Conductus enforceable in accordance with
its terms.
14.3. NONCONTRAVENTION; CONSENTS. Neither the execution and
delivery of this Agreement by Conductus, nor the consummation by Conductus of
the transactions contemplated hereby or thereby, will violate any law to
which Conductus is subject or any provision of the charter or bylaws of
Conductus. Neither the execution and delivery of this Agreement by Conductus,
nor the consummation by Conductus of the transactions contemplated hereby,
will constitute a violation of, be in conflict with, constitute or create a
default under or result in the creation or imposition of any lien upon any
property of Conductus (including any of the Conductus Technology) pursuant
to, any agreement or commitment to which Conductus is a party or by which
Conductus is bound or any of its properties (including any of the Conductus
Technology) is bound or subject. Conductus has given all required notices and
obtained all licenses, permits, consents, approvals and authorizations from
third parties as are required in order to enable Conductus to perform its
obligations under this Agreement, including all consents and approvals
required to permit it to license the Conductus Technology and the Licensed
Products and to enable GDIS to enjoy all the rights and benefits thereof. No
Contract has been amended to increase the amount payable thereunder or to
provide any other benefit to any other party thereto in order to obtain any
such consent, approval or authorization.
14.4. NON-INFRINGEMENT. To the knowledge of Conductus, without
having made any specific inquiry, there are no actions, suits, claims,
proceedings or investigations pending or threatened against Conductus with
respect to any actual or alleged infringement. Conductus, is not prosecuting
any action, suit, claim, proceeding or
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investigation concerning any actual or potential infringement of Conductus
patents or intellectual property rights.
14.5. OWNERSHIP OF PATENTS AND CONDUCTUS TECHNOLOGY. Conductus
is the owner of the Patents included in Exhibit A, free and clear of any
liens, encumbrances or claims, and is the owner of the Conductus Technology
claims or possesses non-terminable, perpetual worldwide license rights
thereto which include the right to grant the license thereto pursuant to this
agreement, in each case free and clear of any liens, encumbrances or
Conductus has not granted and will not grant any rights in the Conductus
Technology to third parties which limits or infringes, or would limit or
infringe, the exclusivity granted to GDIS herein, except for those rights
listed in Exhibit A.
14.6. SUFFICIENCY OF LICENSED AND TRANSFERRED TECHNOLOGY. The
items listed in Exhibit A when combined with (i) the non-proprietary items
listed in Exhibit B and (ii) the training provided under the Cross-Licensing,
Supply and Training Agreement to be entered into by the parties, will include
all of the patents, documentation, trade secrets and know-how reasonably
necessary for a person skilled in the art to produce Standard Products.
SECTION 15. REPRESENTATIONS AND WARRANTIES OF GDIS. GDIS hereby
represents and warrants to Conductus that the statements contained in this
Section 15 are correct and complete as of the date of this Agreement.
15.1. ORGANIZATION, POWER AND QUALIFICATION. GDIS is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite corporate power and
authority to own or hold under lease its properties and assets and to carry
on its business as now conducted.
15.2. AUTHORITY. GDIS has all necessary power and authority,
corporate and otherwise, to make, execute and deliver this Agreement and all
other agreements and documents to be executed and delivered by it pursuant
hereto and has taken all necessary actions required to be taken to authorize
it to execute and deliver this Agreement and such other agreements, and to
perform all of its obligations, undertakings and agreements to be observed
and performed by it hereunder and thereunder. This Agreement has been duly
executed and delivered by GDIS, and constitutes the valid and binding
agreement of GDIS enforceable in accordance with its terms.
15.3. NONCONTRAVENTION; CONSENTS. Neither the execution and
delivery of this Agreement by GDIS, nor the consummation by GDIS of the
transactions contemplated hereby or thereby, will violate any law to which
GDIS is subject or any provision of the charter or bylaws of GDIS. Neither
the execution and delivery of this Agreement by GDIS, nor the consummation by
GDIS of the transactions contemplated hereby, will constitute a violation of,
be in conflict with, constitute or create a default under or result in the
creation or imposition of any lien upon any property of GDIS
-13-
pursuant to, any agreement or commitment to which GDIS is a party or by which
GDIS is bound or any of its properties is bound or subject.
SECTION 16. SURVIVAL AND INDEMNIFICATION.
16.1. SURVIVAL. The representations, warranties, covenants and
agreements of the parties contained in this Agreement will survive the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby and will continue in full force and effect
forever thereafter.
16.2. INDEMNIFICATION BY CONDUCTUS. Conductus hereby agrees to
indemnify, defend and hold GDIS harmless from and against the entirety of any
losses, expenses (including without limitation reasonable attorney's,
accountant's and expert's fees and expenses), damages and other liabilities
(collectively, "LOSSES") suffered or incurred by GDIS or any of its
stockholders, directors, officers, employees or agents, resulting from,
arising out of or caused by any third party claim of infringement with
respect to GDIS' making, having made, using or selling Standard Products, or
the misappropriation by Conductus of any trade secrets with respect to any of
the foregoing, provided that (i) GDIS promptly notifies Conductus in writing
of the claim, (ii) Conductus has sole control of the defense and all related
settlement negotiations, and (iii) GDIS gives Conductus information and
assistance for the defense all at Conductus' expense. Conductus will not be
liable under this indemnification provision to the extent that GDIS can avoid
infringement by purchase of materials from non-infringing sources and fails
to do so. To the extent that such Losses consist of fees and/or future
royalty payments, Conductus will be able to make GDIS whole by giving GDIS
credit for the amount of such Losses out of future royalty payments payable
by GDIS to Conductus.
Conductus will have no liability for any claim of patent or copyright
infringement based upon the combination, operation or use of any Standard
Product with products, software or data not supplied by Conductus, nor for
any claim based upon alteration of the products or modification of any
software supplied by entities other than Conductus.
16.3. INDEMNIFICATION BY GDIS. GDIS agrees to indemnify, hold
harmless, and defend Conductus and their respective trustees, officers,
employees, students, and agents against any and all claims for death,
illness, personal injury, property damage, and improper business practices
arising out of the manufacture, use, sale, or other disposition of Licensed
Product, or Conductus Technology by GDIS, its Affiliates, or any entity which
manufactures, uses or sells or disposes of Licensed Product under the have
made provisions of this agreement.
SECTION 17. LIMITATIONS AND WARRANTY.
17.1. LIMITATION OF DAMAGES. NOTWITHSTANDING ANY PROVISION OF
THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY WILL BE ENTITLED IN CONNECTION
WITH ANY BREACH OR VIOLATION OF THIS AGREEMENT TO RECOVER ANY PUNITIVE,
EXEMPLARY OR OTHER SPECIAL DAMAGES OR ANY INDIRECT, INCIDENTAL OR
CONSEQUENTIAL
-14-
DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES RELATING TO LOSS OF PROFIT,
BUSINESS OPPORTUNITY OR BUSINESS REPUTATION. EACH PARTY, AS A MATERIAL
INDUCEMENT TO THE OTHER PARTY TO ENTER INTO AND PERFORM ITS OBLIGATIONS UNDER
THIS AGREEMENT, HEREBY EXPRESSLY WAIVES ITS RIGHT TO ASSERT ANY CLAIM
RELATING TO SUCH DAMAGES AND AGREES NOT TO SEEK TO RECOVER SUCH DAMAGES IN
CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING RELATING TO THIS AGREEMENT.
THE FOREGOING WILL NOT LIMIT THE RIGHT OF EITHER PARTY TO INDEMNIFICATION IN
ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT WITH RESPECT TO ALL
COMPONENTS OF ANY CLAIM, AWARD OR JUDGMENT AGAINST SUCH PARTY BY ANY
UNAFFILIATED THIRD PARTY.
17.2. LIMITATION OF OBLIGATIONS AND LIABILITY. EXCEPT FOR
BODILY INJURY OF A PERSON, CONDUCTUS WILL NOT BE LIABLE WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER THEORY FOR COST OF PROCUREMENT OF SUBSTITUTE GOODS,
SERVICES, TECHNOLOGY OR RIGHTS OR FOR ANY AMOUNTS AGGREGATING IN EXCESS OF
AMOUNTS PAID TO IT HEREUNDER.
17.3. WARRANTY DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS AGREEMENT, CONDUCTUS MAKES NO WARRANTY WITH RESPECT TO ANY
TECHNOLOGY, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND
HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE AND NONINFRINGEMENT WITH RESPECT TO ANY OF THE FOREGOING.
SECTION 18. MISCELLANEOUS.
18.1. INDEPENDENT CONTRACTORS. The parties are independent
contractors and not partners, joint venturers or otherwise affiliated and
neither has any right or authority to bind the other in any way.
18.2. ASSIGNMENT. The rights and obligations of the parties
under this Agreement may not be assigned or transferred (and any attempt to
do so will be void) except (a) rights to payment of money may be assigned,
and (b) this Agreement and the rights and obligations hereunder may be
assigned to an acquiror of all or substantially all the assets, business or
stock of a party.
18.3. NON-SOLICITATION. For a period of five years from the
date of this Agreement, neither party will, without the prior written consent
of the other party, solicit any employee or consultant of the other party to
leave the employ of the other; the foregoing does not prohibit mass media
"want ads" not specifically directed towards employees or consultants of the
other party.
-15-
18.4. AMENDMENT AND WAIVER. Except as otherwise expressly
provided herein, any provision of this Agreement may be amended and the
observance of any provision of this Agreement may be waived (either generally
or any particular instance and either retroactively or prospectively) only
with the written consent of the parties.
18.5. GOVERNING LAW. This Agreement will be governed by and
construed under the laws of the State of Delaware of the United States
without regard to conflicts of laws provisions thereof and without regard to
the United Nations Convention on Contracts for the International Sale of
Goods.
18.6. HEADINGS. Headings and captions are for convenience only
and are not to be used in the interpretation of this Agreement.
18.7. NOTICES. Notices under this Agreement will be sufficient
only if personally delivered, delivered by a major commercial rapid delivery
courier service or mailed by certified or registered mail, return receipt
requested to a party at its address as set forth below or as amended by
notice pursuant to this subsection. If not received sooner, notice by mail
will be deemed received five (5) days after deposit in the U.S. mail.
If to GDIS, to: General Dynamics Information Systems, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attn.: A. Xxxxx Xxxx, VP and General Counsel
With a copy (which
shall not constitute
notice), to: Jenner & Block
601 East 13th Street, N.W.
Suite 1100 South
Washington, D.C. 20005
Attn.: Xxxxx X. Xxxxxx
If to Conductus, to: Conductus, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn.: Xxx Xxxxxxxxx, VP of Finance and CFO
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With a copy (which
shall not constitute
notice), to:
Gunderson, Dettmer, Xxxxxx
000 Xxxxxxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Attn.: Xxxxxx Xxxxxx
18.8. ENTIRE AGREEMENT. This Agreement, together with the
Cross-License, Supply and Training Agreement of even date herewith,
supersedes all proposals, oral or written, all negotiations, conversations,
or discussions between or among the parties relating to the subject matter of
this Agreement and all past dealing or industry custom and represents the
entire agreement between the parties.
18.9. EXPORT CONTROL. Each party will comply with all
applicable export laws, restrictions, and regulations of any United States or
foreign agency or authority and will not export or re-export, or allow the
export or re-export of any product, technology or information it obtains or
learns pursuant to this Agreement (or any direct product thereof) in
violation of any such laws, restrictions or regulations.
18.10. SEVERABILITY. If any provision of this Agreement is held
illegal, invalid or unenforceable by a court of competent jurisdiction, that
provision will be limited or eliminated to the minimum extent necessary so
that this Agreement will otherwise remain in full force and effect and
enforceable.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first set forth above.
GENERAL DYNAMICS INFORMATION SYSTEMS, INC.
By:
------------------------------------
[Name]
Its:
------------------------------------
[Title]
CONDUCTUS, INC.
By:
------------------------------------
Its: President & CEO
------------------------------------
[Title]
-18-
EXHIBIT A
SCHEDULE FOR DELIVERY OF CONDUCTUS TECHNOLOGY
1 PATENTS
1.1 US Issued Patents
Limitations/
Patent No. Title Rights of Others
---------- ----- ----------------
5,090,819 Superconducting Bolometer
5,157,466 Grain Boundary Junctions in HTS Films
5,207,884 Superconductor Deposition System
5,219,826 Superconducting Junctions and Method of
Making Same
5,241,828 Cryogenic Thermoelectric Cooler
5,280,013 Method of Preparing HTS Films on Opposite
Sides of a Substrate
5,449,659 Method of Bonding Multilayer Structures of Maintenance fee
Crystalline Materials must be paid by
September 12 (no
intention of
paying)
5,130,294 High Temperature Superconductor - Calcium US government
Titanate Sapphire Structures license
5,131,282 High Temperature Superconductor - US government
Strontium Titanate Sapphire Structures license
5,233,500 Package for Cascaded Microwave Devices US government
license
5,651,016 Ultrahigh Speed Laser US government
license
5,696,392 Improved Barrier Layers for Oxide US government
Superconductor Devices and Circuits license
5,831,278 Three-Terminal Devices with Wide US government
Xxxxxxxxx Junctions and asymmetric Control license
Lines
Exhibit A 1
1.2 Foreign Issued Patents
Country Limitations/
Patent No. Title Rights of Others
---------- ----- ----------------
KS Grain Boundary Junctions in HTS Films
93702809
2 PATENT APPLICATIONS
2.1 US Pending Applications
[*]
2.2 Foreign Pending Applications
[*]
Exhibit A 2
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
3 INVENTION DISCLOSURES
[*]
4 DOCUMENTATION TO BE DELIVERED AT CLOSING
[*]
Exhibit A 3
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
[*]
Exhibit A 4
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
[*]
Exhibit A 5
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
[*]
Exhibit A 6
0 Xxxxxxxxx XXX Technology
[*]
Exhibit A 7
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
[*]
Exhibit A 8
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
Exhibit A 9
6 KNOW HOW TO BE COVERED BY TRAINING AT GD' REQUEST
[*]
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
EXHIBIT B
NONPROPRIETARY INFORMATION
[*]
Exhibit B 1
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
EXHIBIT C
KEY PERSONNEL
[*]
Exhibit C 1
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
EXHIBIT D
ROYALTY CALCULATION
1 CALCULATION OF ROYALTY BASE
[*]
Exhibit D 1
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
2 ROYALTY
[*]
Exhibit D 2
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
EXHIBIT F
STANDARD PRODUCTS
[*]
Exhibit F 1
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
