EXHIBIT 10.14
LICENSE AGREEMENT EXECUTION COPY
THIS AGREEMENT, made effective as of the 3rd day of January, 2003, is
by and between APJeT, INC. a corporation of the State of Delaware, having an
office and place of business at 000 Xxxxx Xxx, Xxxxx 000, Xxx Xxxxxx, XX 00000
("APJeT"), and ADVANCED ENERGY INDUSTRIES, INC. a corporation of the State of
Delaware, having an office and place of business at 0000 Xxxxx Xxxxx Xx., Xxxx
Xxxxxxx, XX 00000 ("AE"); APJeT and AE being sometimes referred to collectively
as "the Parties" and individually as a "Party" to the Agreement:
WITNESSETH:
WHEREAS, APJeT owns an Exclusive License from the University of
California, License Agreement No. 00-00-00000, with the right to sublicense
United States Patents and Patent Applications defined in Appendix A, which
relates to Atmospheric Pressure Plasma Jet Technology; and
WHEREAS, AE wishes to obtain, and APJeT is willing to grant, an
exclusive license under said Licensed Patents, and under Licensed Patent
Applications (as hereinafter further defined) in the Licensed Territory and
Licensed Field of Use (as also hereinafter defined);
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
SECTION 1- DEFINITIONS
As used in this Agreement, the following terms shall be deemed to have
the following meanings:
1.1. "Licensed Patent Applications" shall mean (a) United States Patent
Applications defined in Appendix A (b) any and all continuations, divisions, and
continuations-in-part of such Application, whether related to such Application
directly or through one or more intervening applications; (c) any foreign
application for patent or utility model claiming priority in whole or in part
from any of the applications identified in subparagraphs (a) and (b) above; and
(d) any and all continuations, divisions, and continuations-in-part of any of
the applications identified in subparagraph (c) above, whether related to such
applications directly or through one or more intervening applications.
1.2. "Licensed Patents" shall mean the United States Patents defined in
Appendix A and all corresponding Foreign Applications and Foreign Patents (a)
any and all patents and utility models issuing on or registered from any of the
Licensed Patent Applications; and (b) any and all reexaminations, reissues,
additions, or extensions of any of the patents or utility models identified in
subparagraph (a) above.
1.3 "Patent Rights" shall mean the rights arising from the U.S. or
Foreign patents or applications, including any continuing applications,
divisionals, and reissues thereof; and the patents issuing on applications,
identified in Appendix A of the University of California License Agreement No.
00-00-00000, incorporated herein by reference
1.4. "Licensed Product", singular or plural, shall mean any Atmospheric
Pressure Plasma Jet Technology wherein the manufacture, use, offer for sale,
sale or importation of Atmospheric Pressure Plasma Jet Technology by AE would,
but for the rights and license granted herein, constitute an infringement of a
valid and enforceable claim of a subsisting Licensed Patent and shall not
include AE standard power delivery equipment (i.e., stand alone AE power
supplies and match networks) but includes power generation and delivery
equipment which is designed specifically as an integral and indivisible part of
the Atmospheric Pressure Plasma Jet Technology.
1.5 "Licensed Method" shall mean any method, procedure or process whose
use, but for the license granted to AE, would constitute an infringement of a
subsisting claim of a patent or patent application identified in Appendix A.
1.6 "Sales" shall mean disposing of a Licensed Product by sale, lease,
or other transaction for consideration or practicing a Licensed Method. Sales
occur when the licensee, affiliate or sublicensee of the AE receives
consideration for the disposition of the Licensed Product or practice of
Licensed Method, when Licensed Product is paid for or delivered to a third
person, whichever occurs first. Notwithstanding the above, a sale shall be
considered to be made within ninety (90) days of delivery to a third person.
1.7. "Net Sales" shall mean the gross amounts for sales at sales price
by AE and its sub licensees, less the following deductions where applicable: (a)
Sales returns; (b) normal and customary allowances; (c) trade discounts; (d)
royalty discounts for sales to the U.S. Government calculated by the amount of
royalties that APJET would normally have had to pay for non-U.S. Government
sales; and (e) transportation charges, duties and tariffs and foreign government
or registration reporting, permitting or approval fees and costs, only if
separately stated on an invoice or other statement of account or occurrence; but
before the deduction of sales and excise taxes, cost of insurance, and agents'
commissions.
1.8. An "Affiliate" of a Party shall mean a corporation or other entity
controlled by, controlling, or under common control with APJeT or AE. For the
purpose of this Agreement, "control" or "controlling" mean (a) the ownership,
directly or indirectly, of more than fifty percent (50%) of the voting stock or
analogous interest in such corporation or other entity; or (b) the existence of
any other relationship between APJeT or AE and such other corporation or entity
which results in effective managerial control by one over the other, regardless
of whether such control is continuously exercised.
1.9. "Licensed Territory" shall mean the countries and jurisdictions,
including the United States of America and its territories and possessions, in
which APJeT now or in the future holds a valid and enforceable subsisting
Licensed Patent.
1.10 "Licensed Field of Use shall mean all fields in which AE can
demonstrate that it is one of the top three leading vendors in market share in
each of such fields, as demonstrated by dollar volume of sales in the preceding
year, including but not limited to Semiconductor Processing, Data Storage
(including but not limited to magnetic and optical), Flat Panel and Electronic
Displays, and Architectural Glass, and in any other field mutually agreed upon
by AE and APJeT as contemplated in Section 4.1.
1.11. "Effective Date" shall mean the date first written above.
1.12. "UC License" shall mean the Exclusive License APJeT has from the
University of California, License Agreement No. 00-00-00000, with the right to
sublicense United States Patents and Patent Applications defined in Appendix A,
which relates to Atmospheric Pressure Plasma Jet Technology.
1.13 "Deposition Precursor Technology" means compositions of matter
which may be deposited onto substrates using Deposition Plasma Jet Technology.
1.14 "Deposition Process Technology" means processes for depositing
compositions of matter, including Deposition Precursor Technology, onto
substrates using Deposition Plasma Jet Technology.
1.15 "Deposition Plasma Jet Technology" means apparatus operated at
substantially atmospheric pressure capable of depositing compositions of matter,
including Deposition Precursor Technology, onto substrates.
SECTION 2 - GRANT OF LICENSE
2.1. Except as set forth in 2.6 below, and in accordance with and
subject to the terms of the UC License, APJeT hereby grants to AE and its
Affiliates, and AE hereby accepts, a sole and exclusive, worldwide,
royalty-bearing right and license under the Licensed Patent Applications and the
Licensed Patents (with the right to grant sublicenses, as limited below in
section 2.5) to make, have made, use, sell, offer for sale, lease and otherwise
dispose of Licensed Products in the Licensed Territory in the Licensed Field of
Use. AE accepts the terms and conditions required for sublicensees as outlined
in the UC License.
2.2 AE hereby grants to APJeT and its Affiliates, and APJeT hereby
accepts a paid-up, royalty-free nonexclusive license in the Licensed Field of
Use to make, use, and sell, for experimental purposes only, prototype quantities
under the Licensed Patents and Licensed Patent Applications, any improvements or
other developments whether or not patentable, or patented in the Licensed
Product. AE will disclose all improvements or other developments under an
executed Confidentiality/Non-Disclosure Agreement.
2.3 The U.S government has a nonexclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced throughout the world,
for or on behalf of the U.S. Government, inventions covered by the Patent
Rights.
2.4 Under 35 U.S.C. 203 the U.S. Department of Energy has the right to
require the Licensee to grant a nonexclusive, partially exclusive or exclusive
license under the Patent Rights in any Field of Use to a responsible applicant
or applicants in accordance with 48 CFR 27.304-1(g).
2.5. APJeT hereby grants to AE and its Affiliates, and AE hereby
accepts, the right to grant sublicenses to others, contingent upon written
approval from APJeT, and also contingent upon acceptance by the prospective
sublicensee of all the terms and conditions required of sublicensees in the UC
License.
2.6 The license granted to AE under 2.1 does not include (i) any right
or license under the Licensed Patent Applications and/or the Licensed Patents to
use Deposition Process Technology, any right to grant sublicenses to use
Deposition Process Technology, or any right to xxx third-parties for
infringement of the Licensed Patent Applications and/or the Licensed Patents to
the extent that such infringement arises from use of Deposition Process
Technology by a third-party, or (ii) any right or license under the Licensed
Patent Applications and/or the Licensed Patents to make, have made, sell, use,
or import Deposition Precursor Technology, any right to grant sublicenses to
make, have made, sell, use, or import Deposition Precursor Technology, or any
right to xxx third-parties for infringement of the Licensed Patent Applications
and/or the
Licensed Patents to the extent that such infringement arises from the making,
selling, use, or importing of Deposition Precursor Technology by a third-party.
AE hereby acknowledges that APJET has exclusively licensed to Air Products and
Chemicals, Inc. ("Air Products") (and not AE): (i) all rights under the Licensed
Patent Applications and/or the Licensed Patents to use Deposition Process
Technology, including all rights to grant sublicenses to use Deposition Process
Technology, and (ii) all rights under the Licensed Patent Applications and/or
the Licensed Patents to make, have made, sell, use, or import Deposition
Precursor Technology, including all rights to grant sublicenses to make, have
made, sell, use, or import Deposition Precursor Technology.
ARTICLE 3 - IMPROVEMENTS
3.1. Under an executed Confidentiality/Non-Disclosure Agreement, APJeT
agrees to keep AE regularly and fully informed about designs, applications, and
other developments relating to the Licensed Field of Use and the Licensed
Product which become available and which APJeT is not legally prevented from
communicating to AE.
If APJeT, independently develops improvements in the Licensed Field of
Use or to the Licensed Products under this Agreement, whether or not patentable,
or patented, APJeT agrees to xxxxx XX a license with no additional royalties
beyond those provided in Section 5.2, for AE to make, have made, use, and sell
any such improvements to the Licensed Product(s) in the Licensed Field of Use.
Notwithstanding anything herein to the contrary, APJeT shall have no obligation
to xxxxx XX a license to any Foreground Technical Information or Foreground
Patent Rights owned by Air Products pursuant to Section 5.2 of the Collaboration
Agreement Between APJeT, Inc., and Air Products Chemicals, Inc., effective
December 16, 2002 (the "Collaboration Agreement.") For purposes of this section
3.1, the terms "Foreground Technical Information" and "Foreground Patent Rights"
shall have the meanings ascribed to such terms in the Collaboration Agreement.
ARTICLE 4 - MANUFACTURING AGREEMENT
4.1. AE shall be the preferred supplier in the Licensed Field of Use.
AE may from time to time submit a proposal to APJet for a specific application
outside of the Licensed Field of Use. Other parties may also submit proposals to
APJet for specific applications outside of the Licensed Field of Use. In the
event there an overlap between two proposals or if APJet receives a proposal
only from a third party, AE will be given a single opportunity to supply an
equal or better business proposal to APJeT, however the terms of the third
party's proposal to APJet will not be released to AE. Such proposal by AE to
APJet in response to a proposal by a third party must include sufficient detail
to allow APJet to determine whether the proposal submitted by AE presents an
equal or better business opportunity for APJeT. AE must respond within 30
calendar days of notice from APJet of such a third party proposal if AE's
proposal is to be considered by APJeT. Similarly, APJet will have 30 calendar
days to evaluate a proposal initiated by AE and may either accept or reject the
AE proposal within that time. Evaluation of all such proposals outside of the
Licensed Field of Use will be done by the Board of Directors at APJeT.
SECTION 5 - ROYALTIES
5.1. In partial consideration for the rights and license granted to AE
under this Agreement, AE agrees to pay to APJeT a fee of One Million Five
Hundred Thousand Dollars ($1.5 Million), in three installments conditional upon
reaching mutually agreed upon milestones as identified in Appendix B. Included
in the fee above is One Hundred Five Thousand Dollars ($105,000.00) of which
APJeT shall pay to the University of California in royalty fees as required by
the UC License. APJeT shall meet all the milestones by the dates in column 5 of
Appendix B, entitled "APJeT Completion Obligation Date".
5.2 Within the first six months of this Agreement, AE shall loan to
APJeT One Hundred Thousand Dollars ($100,000.00) worth of equipment in power
supplies, matchboxes, flow controllers, or z-scan units in any manner most
appropriate to AE. AE shall retain the entire title, right, and interest to all
equipment loaned to APJeT.
5.3. In further consideration of the rights and license granted to AE
under this Agreement, AE agrees to pay to APJeT, as a periodic royalty, the
amount of 10 percent (10%) of its Net Sales of Licensed Products sold, leased or
otherwise disposed of by or for AE to a cumulative maximum of Five Million
Dollars ($5,000,000) of royalties paid; after Five Million Dollars ($5,000,000)
to Fifty Million Dollars ($50,000,000) of cumulative royalties paid, the
periodic royalty shall be the amount of 5 percent (5%) of its Net Sales of
Licensed Products sold, leased or otherwise disposed of by or for AE; after
Fifty Million Dollars ($50,000,000) of cumulative royalties paid the periodic
royalty shall be the amount of 2.5 percent (2.5%) of its Net Sales of Licensed
Products sold, leased or otherwise disposed of by or for AE. Such royalty shall
be paid by AE to APJeT within thirty (30) days after the end of each calendar
quarter during the term of this Agreement. Only one periodic royalty shall be
payable for sale, lease or other disposition of a Licensed Product even if the
Licensed Product is covered by more than one Licensed Patent or more than one
claim of any Licensed Patent. AE shall not pay any royalties on AE standard
power delivery equipment (i.e., stand alone AE power supplies and match
networks) in which no Licensed Product is incorporated or with which no Licensed
Product is included in the same chassis.
SECTION 6 - RECORDS, REPORTS AND PAYMENT OF ROYALTIES
6.1. AE shall maintain records in sufficient detail and, upon
reasonable notice, allow any independent certified public accounting firm of
nationally recognized standing, appointed by APJeT, and reasonably acceptable to
AE, to examine its consolidated books and records, and the books and records of
its Affiliates pertaining to the Licensed Products. Such examinations shall
occur only during business hours, and not more than once a year, and shall be
for the purpose of verifying the calculation of periodic royalties due under
this Agreement and to otherwise establish compliance with the terms of this
Agreement. A final such examination shall occur once during the year immediately
succeeding termination of this Agreement. The fees and expenses of the
accounting firm performing the examination shall be borne by APJeT, unless the
examination shows that royalties for any quarterly period were underpaid by 5%
or more, in which event the fees and expenses will be borne by AE. Unless
written objection is made by APJeT and delivered to AE within sixty (60) days
after completion of such examination, the calculation of royalties paid by AE
that were the subject of such examination shall be final and binding on the
Parties, except insofar as adjusted or corrected as a result of AE's regular
annual audit. Any information provided to APJeT or its accountants pursuant
hereto shall be treated as Confidential and Proprietary Information of AE to be
used only for the purpose of the examination in accordance with this paragraph
6.1.
6.2. AE agrees to submit written reports to APJeT within ninety (90)
days after the last day of each full or partial calendar quarter during the term
of this Agreement, stating in each such report
the Net Sales of AE or the absence of such sales, for the previous calendar
quarter for the sale, lease or other disposition of Licensed Products, and the
periodic royalty due thereon. The obligation to make royalty reports under this
Agreement shall begin with the calendar quarter in which AE first makes a sale
or other transfer of a Licensed Product subject to payment of royalty to APJeT,
and shall continue thereafter. AE shall accompany each report with payment of
the amount of royalties, if any, shown to be due by such report in accordance
with Sections 3 or 4 hereof. In addition, AE shall make a written report to
APJeT within ninety (90) days after the date of termination of this Agreement,
stating in such report the Net Sales of AE of any Licensed Products not
previously reported to APJeT and the periodic royalty due thereon, and shall
accompany such report with payment of the amount of royalties shown to be due
therein.
6.3. Payment shall be made to APJeT at its offices at 000 Xxxxx Xxx,
Xxxxx 000, Xxx Xxxxxx, XX 00000, or such banking institution as APJeT may direct
from time to time, in legal tender of the United States of America. In the event
periodic royalties must be converted from foreign currency into United States
Dollars, such conversion shall be calculated using the average exchange rate
published in The New York Times for the thirty (30) day period immediately
preceding payment.
SECTION 7 - TERM AND TERMINATION
7.1. The rights and licenses granted under this Agreement shall
commence on the Effective Date. The first payment from AE to APJeT will be made
on Jan. 3, 2003.
7.2. Unless this Agreement shall be terminated by either Party pursuant
to the provisions hereof, this Agreement shall remain in force and effect during
the pendency and until the expiration of the last-to-expire of the Licensed
Patents.
7.3. APJeT shall have the right to terminate this Agreement on ninety
(90) days written notice to AE at any time on default by AE in the observance or
performance of any covenant, condition or terms herein required to be observed
and performed by AE. Termination under this paragraph 7.3 shall be effective at
the end of such notice period, provided that AE shall not have corrected such
default or embarked upon a course of action to correct such default and given
written confirmation of same to APJeT within such notice period.
AE shall have the right to terminate this Agreement on ninety (90) days
written notice to APJeT at any time on default by APJeT in the observance or
performance of any covenant, condition or terms herein required to be observed
and performed by APJeT. Termination under this paragraph 7.3 shall be effective
at the end of such notice period, provided that APJeT shall not have corrected
such default or embarked upon a course of action to correct such default and
given written confirmation of same to AE within such notice period
7.4. APJeT shall provide notice to AE of its intention to file a
voluntary petition in bankruptcy or, where known to APJeT, of another party's
intention to file an involuntary petition in bankruptcy for APJeT, said notice
to be received by AE at least thirty (30) days prior to filing such petition. AE
may terminate this License Agreement upon receipt of such notice at its sole
discretion. APJeT's failure to provide such notice to AE will be deemed a
material, pre-petition incurable breach of this License Agreement. The License
Agreement will terminate automatically on the date of a voluntary or involuntary
petition in bankruptcy whether or not notice has been given.
7.5. Termination by AE or APJeT does not relieve AE of any obligation
or liability accrued by AE or its sublicensees prior to the effective date of
termination or affect any rights of APJeT arising under this License Agreement
prior to termination.
SECTION 8 - ASSIGNABILITY
8.1. This Agreement and the rights, licenses and obligations hereunder
may not be assigned by either Party without the express written consent of the
other Party, except as part of the sale of the assigning Party's business to
which the Licensed Patent Applications and Licensed Patents relate. This
Agreement shall be binding upon and inure to the benefit of the Parties hereto,
their permitted assigns, trustees or receivers in bankruptcy or successors by
merger, purchase of assets or otherwise.
SECTION 9 - NOTICE
9.1. Any notice or communication required or permitted to be given by
either Party hereunder shall be in written form and shall be considered to be
sufficiently given if mailed by registered or certified mail or transmitted by
overnight courier, addressed to the parties hereto as follows:
To APJeT:
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxx, Xxx Xxxxxx 00000
Attention: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To AE:
Advanced Energy Industries, Inc.
0000 Xxxxx Xxxxx Xx.
Xxxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9.2. Such notices shall be effective upon receipt by the addressee.
SECTION 10 - CONTROLLING LAW
10.1. The parties hereto agree that this Agreement shall be considered
to have been made in, and construed and interpreted in accordance with the
substantive laws of the State of Colorado of the United States of America.
SECTION 11 - WARRANTIES, PARTIES' RESPONSIBILITY, AND LIABILITY
11.1. APJeT represents and warrants that it is has the right to
grant the rights and licenses granted under this Agreement.
11.2. Except as expressly provided herein, nothing contained in this
Agreement shall be construed as a grant of any right, by license or otherwise,
by either party to the other, under either Party's patent, patent application
(with the exception of the Licensed Patent Applications and Licensed Patents),
trademark, copyright, know-how, or other intellectual property rights.
11.3. Subject to APJeT meeting the milestones identified with the
"Second Closing" in Appendix B within the time period therein specified, AE
intends to diligently pursue commercialization of Licensed Products within the
Licensed Field of Use and use its best efforts to market Licensed Products. AE
has the unqualified right to reduce, suspend, or cease activities in the
marketing of some or all of the Licensed Products. However,
(i) if AE decides to cease activities for any specific field of
use or product area, it will promptly notify APJeT and will
release APJeT to grant an exclusive license to others in this
area;
(ii) if AE decides to suspend or reduce activities within the
Licensed Field Use for any specific application, it will
promptly notify APJeT of its intentions, and agrees to
consider releasing APJeT to grant nonexclusive licenses to
others; or
(iii) if in this latter case, APJeT requests that AE release its
rights so as to permit APJeT to grant an exclusive license to
others in these areas wherein AE has merely suspended or
reduced its activities, AE agrees to consider such a proposal
and not to unreasonably withhold such permission.
(iv) for specific programs that are agreed upon between AE and
APJet outside of the Licensed Field of Use and in accordance
with section 4.1, the terms of the specific proposal AE made
to APJet will govern the cancellation rights between the two
parties.
Nothing herein shall prevent AE from setting its own prices for Licensed
Products or determining AE's marketing policies and practices in its sole
discretion.
11.4. If AE or APJeT receives notice of a claim or action by a third
party alleging infringement of such third party's rights in connection with the
manufacture, use or sale of a Licensed Product by AE or its Affiliates, AE shall
have the right to conduct the legal defense, and to enter into any disposition
with respect thereto, as AE in its sole discretion deems desirable. All costs of
AE's defense, including AE's attorneys' fees and court costs, and any damages
awarded or amounts paid in settlement in any such claim or action shall be the
sole responsibility of AE. APJeT shall reasonably cooperate with AE in its
defense of such infringement claim or action, provided AE shall reimburse APJeT
for reasonable out of pocket expenses, other than attorney's fees and expenses,
incurred by APJeT in providing such cooperation.
11.5. AE shall have the sole right, but not the obligation, to take
measures to prevent the infringement by third-party infringers of any of the
Licensed Patents, whether by action, suit, proceeding or otherwise, and shall
pay the entire cost of pursuing such measure(s). AE shall have the sole right to
any proceeds from such measure(s); provided, however, that after a deduction by
AE of reasonable expenses incurred by AE in such action, suit, or proceeding,
and, if APJet joins in such action, suit or proceeding, payment to APJet of
reasonable expenses incurred by APJet in
such action, suit or proceeding, AE shall pay to APJeT a royalty of the greater
of (i) ten percent (10%) of any amounts recovered, or (ii) the amount payable by
APJet to the University of California with respect to such action, suit or
proceeding under the UC License. In no case, however, shall the total royalty
paid by AE to APJeT be more than the recovery, less reasonable expenses incurred
in such action, suit or proceeding. APJeT shall, if requested, join as a party
to any such suit or settlement and shall agree to sign all necessary rightful
instruments, and do whatever else may be necessary to further the conduct of
such proceedings.
11.6. In the event AE chooses not to take measures to prevent
infringement by any third-party infringer as permitted under paragraph 11.5
above, it shall so notify APJeT within 30 days after becoming aware of the
infringement. Thereafter, APJeT shall have the sole right, but not the
obligation, to take such measures against such third-party infringer. APJeT
shall have the sole right to any proceeds from such measures.
11.7. Except as set forth above, neither AE nor APJeT shall have any
other responsibilities or obligations in connection with actions to enforce the
License Patents.
SECTION 12 - MISCELLANEOUS
12.1. This Agreement shall be executed in two counterparts in the
English language and each such counterpart shall be deemed an original thereof.
12.2. Upon the termination of this Agreement, AE shall have the right
to dispose of all Licensed Products then on hand, including work in process, and
to complete all orders for Licensed Products on hand as of the date it received
notice of termination, but periodic royalties which would otherwise be payable
pursuant to this Agreement had such termination not become effective shall be
paid with respect to all such Licensed Products when sold as though this
Agreement had not been terminated.
12.3. Neither termination nor expiration of this Agreement shall
terminate AE's or AE's sublicensee's obligation to pay all periodic royalties
which shall then have accrued up to the date of such expiration or termination.
AE's obligation to report royalties due and submit its books and records for
inspection as provided in paragraph 4.1 hereof shall continue until AE's royalty
obligations shall have been fully determined and discharged by proper payment.
12.4. APJeT shall promptly give notice to AE of and upon commencement
of any voluntary or involuntary bankruptcy proceeding involving APJeT as a
debtor.
SECTION 13 - WAIVER
Failure by either Party to enforce any rights under this Agreement
shall not be construed as a waiver of such rights nor shall a waiver by either
Party in one or more instances be construed as constituting a continuing waiver
or as a waiver in other instances.
SECTION 14 - ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties
concerning the subject matter hereof and supersedes all written and oral prior
agreements and understandings with respect thereto. No variation or modification
of the terms of this Agreement nor any waiver of any of the terms or provisions
hereof shall be valid unless in writing and signed by an authorized
representative of each Party.
SECTION 15 - SEVERABILITY
This Agreement is subject to the restrictions, limitations, terms and
conditions of all applicable governmental regulations, approvals and clearances.
If any term or provision of this Agreement is held invalid, illegal or
unenforceable in any respect for any reason, that invalidity, illegality or
unenforceability shall not affect any other term or provision hereof, and this
Agreement shall be interpreted and construed as if such term or provision, to
the extent the same shall have been held to be invalid, illegal or
unenforceable, had never been contained herein.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in duplicate by duly authorized officers effective on the date and year
first written above.
ADVANCED ENERGY INDUSTRIES, INC. APJeT, INC.
By: By:
------------------------------ --------------------------------------
Title: Title:
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PAYMENT SCHEDULE MILESTONES
[Rev 5 - 11/11/02]
Payment Amounts ($) To be paid on APJeT
or after completion Milestone(s)
(date) obligation
date**
APCI AEI
------------------------------------------------------------------------------------------------------------------------------------
First 500,000 upon - Concurrent with signing of:
Closing + --- signing - Stock Purchase Agreement with APCI (Includes
100,000 n/a Investor Rights Agreement and Stockholders
license Agreement)
fee - Collaboration Agreement with APCI
- License agreement with AEI
-- 500,000 1/3/2003
Second 450,000 500,000 1st Closing + 1st Closing + - An installed, staffed, and functioning
Closing 6 mo. 12 mo. laboratory.
- Delivery and placement into operation of
at least one APJeT plasma jet into an
application (or delivery and operational
testing of several plasma jets into
applications) which project to create within
four years from date of first closing at
least one of the following:
- annual sales of at least $30 million,
including AEI or other OEM equipment sales
on which APJeT would collect royalties
and/or create new licenses, or
- at least $3 million per year revenue (or
licensing profit) directly to APJeT.
APJeT must provide evidence of compelling
economic driver(s) for application
acceptance in a discussion of these revenue
and market projections.
- Business Plan completed for application
outside of s/c industry.
- Technical assistance to APCI & AEI
underway for product development.
Footnote:
** This is the date after which -- if the milestones are not met -- Air
Products' and Advanced Energy's obligation to further closings is terminated. If
milestones are not met by the 'APJeT Completion Obligation Date', then the
funding parties have sole discretion whether to proceed or not with further
closings.
Payment Amount ($) To be paid on APJeT
or after completion Milestone(s)
(date) obligation
date**
APCI AEI
Third 450,000 500,000 1st Closing + 1st Closing + - Verification of combined cumulative gross
Closing 12 months 24 months receipts from licenses, royalties, equipment
sales of $400,000 excluding (i.e., must be
beyond and in addition to):
i) the initial commitment of $1.5
million from AEI, and
ii) the initial $100,000 license
payment from Air Products.
- Successful commissioning and operation of
the APJeT unit provided to Air Products
under the Collaboration Agreement signed in
conjunction with Stock Purchase Agreement.
- Good faith negotiations or discussions
underway for production-scale field
examination ((beta) trial) in at least two
different applications.
Footnote:
** This is the date after which -- if the milestones are not met -- Air
Products' and Advanced Energy's obligation to further closings is terminated. If
milestones are not met by the 'APJeT Completion Obligation Date', then the
funding parties have sole discretion whether to proceed or not with further
closings.
