CROSS-LICENSE, SUPPLY AND TRAINING AGREEMENT
This Agreement is entered into as of May 4, 1999 ("Effective Date")
between General Dynamics Information Systems, Inc., a Delaware corporation
("GDIS") and Conductus, Inc., a Delaware corporation ("Conductus").
The parties have entered into a license agreement of even date herewith
whereby Conductus has licensed certain Conductus technology to GDIS ("License
Agreement"). In accordance with the terms of that License Agreement, the
parties agreed to enter into a cross-license, supply and training agreement to
supplement the terms therein. Certain capitalized terms not defined herein
shall have the meaning prescribed to them in the License Agreement.
1. SUPPLY. Conductus agrees to supply the products to GDIS under the terms
and conditions of this Agreement.
2. PURCHASE ORDERS. Prior to issuing any purchase order, GDIS will issue a
request for quotation ("RFQ") setting forth the products or services to be
delivered, the required delivery dates, and any special requirements for the
order. Conductus will respond to RFQs. GDIS will issue Purchase Orders for
products and services to be delivered under this Agreement. Such Purchase Order
will reference this Agreement and identify the product or service to be
purchased, the required delivery dates, the price and payment terms. The
parties understand that some or all purchase orders issued hereunder will be
subject to Federal Acquisition Regulation and Defense Federal Acquisition
Regulations "mandatory flow-down" provisions.
3. ORDER OF PRECEDENCE. Terms of any Purchase Order accepted hereunder
which differ from the terms of this Agreement shall take precedence over the
terms herein.
4. PAYMENT. Invoices for products and services provided pursuant to this
Agreement shall be sent to GDIS at the address set forth in the signature block,
unless otherwise specified by GDIS in accordance with Paragraph 17.4. Unless
otherwise agreed to in writing by Conductus, GDIS shall pay all invoices issued
within thirty (30) days from the date of the invoice. If GDIS fails to pay any
charges when due and payable, GDIS agrees that Conductus shall have the right to
invoice GDIS for, and GDIS will pay, all costs, including reasonable attorney
fees, expended in collecting overdue charges, plus the overdue payments shall be
subject to finance charges computed at a periodic rate (to the extent permitted
by law) of 1-1/2% per month (18% per year).
5. FORECASTS. Within fifteen (15) business days of the conclusion of a
calendar quarter, GDIS shall provide Conductus with a good faith forecast of its
requirements for the next six (6) months.
6. DELIVERY. Deliveries shall be F.O.B., Conductus' premises in Sunnyvale,
California. Conductus will use commercially reasonable efforts to ship products
to arrive on or before any requested delivery dates on the purchase order.
However, Conductus will not be liable for any delay in performance hereunder due
to causes beyond its control including, but not limited to, acts of nature, acts
of governments, riots, wars, fires, floods, and strikes. In the event of delay
due to any such cause, time for delivery shall be extended for a period equal to
the duration of the delay, subject to all reasonable commercial efforts to work
around such causes.
7. SHIPMENT. Unless GDIS supplies specific instructions to the contrary,
Conductus will select methods and routes of shipment, but Conductus will not
assume any liability in connection with shipment nor will any carrier be
considered an agent of Conductus. All shipments will be insured at GDIS's
expense and made at GDIS's risk, and GDIS shall be responsible for making all
claims with carriers, insurers, warehousemen, and others for misdelivery,
nondelivery, loss, damage, or delay.
8. CHANGES AND CANCELLATIONS.
8.1. CANCELLATIONS. GDIS may, for its convenience, terminate work
under a Purchase Order in whole or in part at any time by giving notice to
Conductus in writing. Conductus will thereupon immediately stop work on the
Purchase Order or the terminated portion thereof and notify any subcontractors
to do likewise. Conductus shall be entitled to: (i) reimbursement for its
actual costs incurred up to and including the date of termination, such costs
to be determined in accordance with recognized accounting principles, and (ii)
a fee on the work done prior to termination at a rate equal to the fee ination
claim, Conductus hereby grants to GDIS (i) the right to physically inspect any
and all inventory included in the claim, and (ii) the right of GDIS, or its
designee, to audit the directly pertinent books, records and documents,
relating to the costs claimed for reimbursement.
8.2. CHANGES. By written Change Order to existing Purchase Orders,
GDIS may at any time unilaterally (i) suspend the work in whole or in part for a
stated time period, and/or (ii) make changes in one or more of the following
elements: designs, drawings or specifications; method of shipment or packing;
place or time of delivery; or quantities to be furnished; however, any change
that requires an earlier delivery date requires Conductus advance consent. If
such suspension or change causes an increase or decrease in the cost of, or the
time required for furnishing the work (whether supplies or services), an
equitable adjustment shall be made in the Purchase Order price, delivery
schedule, or both. If the price and /or schedule adjustment is not included in
the issued Change Order, no increase in price or delay in delivery will be
allowed unless Conductus asserts such a claim in writing within 30 days from the
date of the Change Order to be followed as soon as practicable with a
specification of the claim along with supporting data. Nothing contained in this
Section shall relieve or excuse Seller from proceeding without delay in
performing the Purchase Order as changed.
9. INSPECTION AND ACCEPTANCE. GDIS shall be allowed a maximum of fifteen
(15) business days from the date of receipt of any Product to inspect such
Product. If GDIS does not give written notice to Conductus within such fifteen
(15) day period of its rejection of such Product (and the reasons therefore),
GDIS shall be deemed to have accepted such Product. For any claims validly and
timely made, Conductus shall reserve the right to repair the defective, damaged
or missing products or to replace the same with conforming products.
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10. WARRANTY. Conductus warrants for a period of one (1) year from the date
of shipment that the Product will conform in all material respects to all
specifications for that Product. Conductus' then current user documentation for
the Product. This warranty covers only problems reported to Conductus during
the warranty period. Conductus warrants that computer hardware, software and/or
firmware furnished hereunder shall be able to accurately process date/time data
(including, but not limited to, calculating, comparing, and sequencing) from,
into, and between the twentieth and twenty-first centuries, and the years 1999
and 2000 and leap year calculations to the extent that other information
technology used in combination with the information technology being acquired
properly exchanges date/time data with it. ANY LIABILITY OF CONDUCTUS WITH
RESPECT TO A PRODUCT OR THE PERFORMANCE THEREOF UNDER ANY WARRANTY, NEGLIGENCE,
STRICT LIABILITY OR OTHER THEORY WILL BE LIMITED EXCLUSIVELY TO PRODUCT REPAIR,
REPLACEMENT OR, IF THE PARTIES AGREE, TO REFUND OF THE PURCHASE PRICE. EXCEPT
FOR THE FOREGOING, ALL PRODUCTS ARE PROVIDED "AS IS" WITHOUT WARRANTY OF ANY
KIND INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR NONINFRINGEMENT (OTHER THAN AS PROVIDED IN PARAGRAPH
16.2 OF THE LICENSE AGREEMENT). FURTHER, CONDUCTUS DOES NOT WARRANT RESULTS OF
USE OR THAT THEIR USE WILL BE UNINTERRUPTED. The foregoing warranty does not
apply to any Products which have been subject to misuse, including electrostatic
discharge, neglect, accident or modification, or which have been altered such
that they are not capable of being tested by Conductus under its normal test
conditions.
11. DISCONTINUED PRODUCTS AND MODIFICATIONS. Upon written notice to GDIS,
Conductus may discontinue the manufacture and/or sale of any Product at any
time. GDIS will have sixty (60) days after receipt of such notice to place
orders for any additional units of such Product. Conductus will accept any
Purchase Orders placed prior to the expiration of the sixty days. Conductus
will have the right to make substitutions and/or modifications in the
specifications of Products sold by Conductus provided that such substitutions
or modifications will not affect overall Product performance.
12. LIMITATION OF LIABILITY. EXCEPT FOR BODILY INJURY OF A PERSON OR A
CLAIM PURSUANT TO INDEMNITY, CONDUCTUS WILL NOT BE LIABLE WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER THEORY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR FOR
COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES, TECHNOLOGY OR RIGHTS OR FOR
ANY AMOUNTS AGGREGATING IN EXCESS OF AMOUNTS PAID TO IT PURSUANT TO THE AFFECTED
PURCHASE ORDER.
13. TRAINING AND SUPPORT.
13.1. SUPPORT FOR INITIAL TECHNOLOGY TRANSFER. Conductus will use all
reasonable efforts to transfer the Conductus Technology (as defined in the
License Agreement) as follows:
13.1.1. TRANSFER OF DOCUMENTATION. Conductus will deliver any
revisions or corrections of the documentation prepared in the normal course of
its business to GDIS.
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13.1.2. SEMINARS. At times mutually agreeable to the parties,
Conductus will prepare and present training programs designed to acquaint the
GDIS selected attendees (which may include Defense Microelectronics Activity
("DMEA" personnel) with the Conductus Technology. The specific subject matter
to be covered and the number of attendees will be determined by mutual agreement
of the parties.
13.1.3. ON-SITE TRAINING. On or before July 1, 2001 and upon
thirty- (30) days prior notice to Conductus, GDIS may place up to eight
attendees (which may include DMEA personnel)) at the Conductus site in order to
obtain training and instruction regarding the Conductus Technology (as defined
in the License Agreement). On-site training will be offered in the areas of
(i) RF filter design and design tools, (ii) cryogenic packaging design,
(iii) filter fabrication, (iv) filter tuning and (v) assembly and test. Prior to
the training, such GDIS attendee shall enter into an agreement that ensures the
protection of Conductus' intellectual property rights and confidential
information and requires the attendee to abide by the rules, regulations and
policies of Conductus. GDIS will be responsible for the attendees' compliance
with such rules and regulations. Any invention of a GDIS attendee made in the
course of training at Conductus shall be jointly owned by Conductus and GDIS.
13.1.4. OFF-SITE TRAINING AND CONSULTING. Upon request from
GDIS, Conductus agrees to make its Key Personnel reasonably available to provide
training and consulting services on the Conductus Technology. GDIS shall be
responsible for the reasonable costs of any travel incurred by Conductus
personnel for off-site training and consulting.
13.2. CONTINUING TECHNOLOGY EXCHANGE. To facilitate continued
technology exchange, the parties will meet quarterly to review any new
technology developments and exchange information relevant to the cross-license
set forth in Paragraph 14.3.
13.3. KEY PERSONNEL. Provided they are employees of Conductus,
Conductus will make the people listed in Exhibit C of the Licensing Agreement
available to train GDIS attendees upon reasonable prior notice.
13.4. COSTS OF TRAINING. GDIS will pay all expenses for its employees
to attend training. Additionally, GDIS will pay for the services of Conductus
personnel (including preparation time) for services provided under Paragraphs
13.1.2. and 13.1.4. at fully loaded rates applicable to government contracts.
Conductus shall bear the cost of supervision of GDIS attendees participating in
training as set forth in Paragraph 13.1.3.
13.5. SUPPORT. Conductus agrees to use reasonable efforts to provide
the support services set forth herein. In particular, Conductus will provide
the services of the Key Personnel listed in Exhibit C of the Licensing Agreement
as well as other individuals it deems necessary to meet the needs of GDIS for
product production, training and technology/product development commensurate
with their prior involvement in government-related activities; provided that
these individuals remain Conductus employees. In the event that any of these
individuals leave the employ of the company, Conductus will provide the services
of those employees whose skills and experience most closely match those of the
originally-named employee.
14. RIGHTS IN INTELLECTUAL PROPERTY.
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14.1. OWNERSHIP. Other than as provided in Section 13.1.3, each party
shall own the title to any modification to or enhancement of Conductus
Technology ("Improvement") created solely by its employees or agents. Jointly
developed Technology shall be jointly owned. Each sole or joint owner of any
Improvement shall have the unrestricted rights to fully exploit that Improvement
and, subject to the following, may grant licenses without the consent of any
other owner.
14.2. PATENTS. The sole owner of any Improvement shall have the sole
right to determine whether to obtain, maintain, enforce or defend
intellectual property rights in such Improvement. In the case of joint
ownership, the parties may mutually agree to share the expense of patenting
and to share income from licensing such Improvement. If no agreement is
reached, either joint owner may elect to obtain, maintain, enforce, license
or defend any joint Improvement at its sole expense, and that joint owner
shall have the sole right to license and receive income from any licensing of
such joint invention. Each such joint owner will execute any necessary
documents reasonably requested for the purpose of obtaining and maintaining
rights to the Improvement. With respect to enforcement, it is expected that
expenses incurred in taking such actions will be equally shared by the
owners, but if an owner declines to bear its share of enforcement expenses,
its ownership and rights will not be affected except that such owner will not
be entitled to any proceeds of an action to enforce such intellectual
property rights if it did not share the expenses of the enforcement action.
14.3. CROSS-LICENSE. Subject to the terms and conditions of this
Agreement, each party agrees to provide the other with a royalty-free, non-
exclusive, nontransferable (except pursuant to an assignment under Paragraph
16), nonsublicensable, perpetual license to make, have made (including by DMEA),
sell, market, use, distribute, reproduce or otherwise exploit any enhancement or
modification to the Conductus Technology created by such party during the term
of this Agreement. Notwithstanding the above, such license to Conductus shall
only be exercised outside of the Permitted Market (as defined in the License
Agreement, including rights provided under Section 3.3 of the License Agreement)
and such license to GDIS shall only be exercised within the Permitted Market.
15. TERM AND TERMINATION.
15.1. TERM. This Agreement will remain in effect for 10 years after
the Effective Date.
15.2. MATERIAL BREACH. If a party materially breaches a material
provision of this Agreement, the other party may terminate this Agreement upon
sixty-(60) days' notice unless the breach is cured within the applicable notice
period.
15.3. CHANGE IN CIRCUMSTANCES. Either party may terminate this
Agreement without liability by notice pursuant to Paragraph 17.4 if the other
makes an assignment for the benefit of creditors, admits in writing its
inability to pay its debts as they mature, or proceedings are instituted by or
against the other party under the bankruptcy laws of the United States.
15.4. EFFECT OF TERMINATION. In the event of any termination of this
Agreement, the rights and licenses granted under this Agreement shall terminate.
Paragraphs 10, 12 and 14-17 shall
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survive termination and any rights to payments already accrued shall become
immediately due and payable.
15.5. LIABILITY FOR TERMINATION. Neither party shall incur any
liability whatsoever for any damage, loss or expenses of any kind suffered or
incurred by the other arising from or incident to any termination of this
Agreement (or any part thereof) by such party which complies with the terms of
the Agreement whether or not such party is aware of any such damage, loss or
expenses.
15.6. SOLE REMEDY. Termination is not the sole remedy under this
Agreement and, whether or not termination is effected, all other remedies will
remain available.
16. 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 (i) rights to payment of money may be assigned, and (ii) this
Agreement and the rights and obligations hereunder may be assigned to an
acquirer of all or substantially all the assets, business or stock of a party.
17. MISCELLANEOUS.
17.1. 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.
17.2. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Delaware and the United States without regard to
conflicts of law provisions thereof and without regard to the United Nations
Convention on Contracts for the International Sale of Goods.
17.3. HEADINGS. Headings and captions are for convenience only and
are not to be used in the interpretation of this Agreement.
17.4. 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
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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
With a copy (which
shall not constitute
notice), to:
Gunderson, Dettmer, Xxxxxx
000 Xxxxxxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000
Attn.: Xxxxxx Xxxxxx
17.5. ENTIRE AGREEMENT. This Agreement together with the License
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.
17.6. EXPORT CONTROL. Each party shall 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.
17.7. 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 shall 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:
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[Name]
Its:
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[Title]
CONDUCTUS, INC.
By:
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[Name]
Its:
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[Title]
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