TECHNOLOGY LICENSE AGREEMENT
This Technology License Agreement (Agreement) dated as of the Effective Date as
defined below is made by and between Silicon Evolution, Inc., an Oregon
corporation, ("SEI"), and Isonics Corporation, a California corporation,
("Isonics").
RECITALS
A) SEI owns certain intellectual property assets which are more particularly
described on Exhibit "A" (the " SEI IP").
B) SEI has licensed intellectual property from Wacker Siltronic Corporation
and Wacker-Siltronic AG by agreement dated May 31, 2000 which are more
particularly described on Exhibit "B" (the "Wacker IP").
C) Isonics desires to obtain a license to use, commercialize, and sell
products made with the IP, and to further license and sublicense the SEI IP
and the Wacker IP.
D) SEI is willing to grant such a license to Isonics on the terms set forth
herein.
1. DEFINITIONS
a. AFFILIATE: "Affiliate" of a party shall mean any person,
organization, or entity that in any way, directly or indirectly, controls,
is controlled by, or is under common control with such party. For the
purposes of this definition, "control" shall mean ownership of at least
fifty percent (50%) equity interest in or by such person, organization, or
entity.
b. BUSINESS: "Business" shall mean the business of manufacturing and
marketing silicon-on-insulation wafers for the semiconductor industry.
c. BUSINESS INFORMATION: "Business Information" means any material
in human or machine readable form used, compiled or produced by or for the
business of manufacturing and using the Licensed Technology for the
Licensed Products as set forth on Exhibit "A".
d. CLEAN ROOM LEASES. "Clean Room Leases" means a sublease and two
equipment leases, each of which is currently existing (although in default)
between SEI and: (i) IMAT, Inc. who is the lessee of Building D (Phase
VIII), D-100, located at 00000 X.X. 00xx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx,
which granted SEI a sublease for that property on March 1, 2000, but has
served a notice of termination of that sublease effective October 7, 2001;
(ii) IMAT, Inc. who is the owner of a DI water system made by US Filter
Corporation and who has leased that equipment to SEI pursuant to a lease
dated April 1, 2000, which lease is in default and as to which the lessor
has served a notice of termination effective October 7, 2001; and (iii)
Techno Vest International who is the owner of a Class 10 Cleanroom with
related facilities which includes chiller, air-handling unit and air-duct,
and a water clean station with related facilities which include waste
chemical pump stations and chemical fume exhaust systems, and who has
leased that
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equipment to SEI pursuant to a lease dated April 30, 2000, which lease is
in default and as to which the lessor has served a notice of termination
effective October 7, 2001.
e. CONFIDENTIAL INFORMATION. "Confidential Information" shall mean
(i) any patent applications, Trade Secrets, or Know-How held by either
party and regardless of whether marked or designated "confidential" or
"proprietary," and (ii) any information disclosed to the receiving party
orally or in writing or in model form, in whatever format, relative to
operations, existing and proposed contracts, sales training and techniques,
financial data, trade secrets, marketing and business plans, research
and/or development, data, formulae, processes, designs, specifications,
product knowledge, procedures, methods and techniques whether disclosed by
way of documents, oral communications, or visits to factories or other
premises, and all information regarding the existing and proposed
commercial operations of the disclosing party or relative to any other
confidential proprietary information which is clearly marked at the time of
disclosure as being "Confidential." Information transmitted orally and
identified at that time as being Confidential shall be considered as
"Confidential Information" if it is reduced to writing and transmitted to
the receiving party within 15 days of its disclosure. "Confidential
Information" does not include information relating to the Licensed
Technology that SEI may provide to Isonics, which information Isonics may
use and disclose in its discretion.
f. COPYRIGHTS: "Copyright(s)" means all forms of proprietary rights
granted by a government with respect to an original work of authorship
fixed in any tangible medium of expression from which it can be perceived,
reproduced or otherwise communicated relating to the relating to the
Technology covered by, and existing at the time of, this Agreement as
specifically set forth in Exhibit "A".
g. EFFECTIVE DATE: "Effective Date" means that date when SEI
executes and delivers this Agreement to Isonics by facsimile or hand
delivery.
h. IMPROVEMENTS: "Improvements" shall mean any enhancement or
modification of the Licensed Technology by Isonics.
i. KNOW-HOW: "Know How" means all factual knowledge and information
related to the Business and the Technology which is not capable of precise,
separate description but which, in accumulated form, after being acquired
as a result of trial and error, gives to the one acquiring it the ability
to produce and market something which one would otherwise not have known
how to produce and market with the same accuracy or precision necessary for
commercial success, provided, however, that such knowledge and information
is not in the public domain or readily available to any third party other
than a limited number of persons who have agreed to keep that information
secret.
j. LICENSED PRODUCT: "Licensed Product" shall mean the products
manufactured using any of the Licensed Technology.
k. LICENSED TECHNOLOGY: "Licensed Technology" shall mean the SEI IP
and the Wacker IP.
l. PARTY: "Party" shall mean either SEI or Isonics as the context
requires.
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m. PATENTS: "Patent(s)" means all forms of proprietary rights
granted by a government with respect to a design or an Invention, including
patents and certificates of addition, utility models, and enforceable
patent applications, i.e. those under which injunctive relief is available,
as well as any continuation, division, extension, renewal, revival, or
reissue thereof or substitution therefor relating to the Technology covered
by, and existing at the time of, this Agreement as specifically set forth
on Exhibit "A"
n. TECHNICAL INFORMATION: "Technical Information" means any material
in human or machine-readable form which embodies or describes the Licensed
Technology set forth on Exhibit "A".
o. TECHNOLOGY: "Technology" shall mean any and all compositions,
machines, articles of manufacture, processes, apparatus, (collectively the
"Inventions"); Patents, Copyrights, Trade Secrets, and Know-How; data,
writings and works of authorship (including without limitation software,
protocols, program codes, audiovisual effects created by program code, and
documentation related thereto, drawings); mask works; other tangible and
intangible items (including without limitation materials, samples,
components, tools, and operating devices, E.G., board assemblies, and
engineering models); and Technical Information relating to the IP.
p. TECHNOLOGY RIGHTS: "Technology Rights" shall mean intellectual
property rights including Patents, Copyrights, Trade Secrets and Know-How,
but not trademarks and trade names.
q. TERRITORY: "Territory" shall mean world-wide.
r. TRADE SECRETS: "Trade Secrets" means any Technical Information
and Business Information that generally facilitates the sale of products,
increases revenues, is not generally known by others than the parties
except by those subject to restrictions on disclosure, and provides an
advantage over the competition.
2. XXXXX
x. XXXXX OF LICENSE: Subject to the terms and conditions of this
Agreement, SEI hereby grants to Isonics: (A) (and to the fullest extent
allowable in the license of the Wacker IP) a fully paid, non-exclusive,
royalty free, perpetual, transferable, license of all of SEI's rights to
the Wacker IP and all related Licensed Technology within the Territory and
(B) a fully paid, exclusive, royalty free, perpetual, transferable, license
of all of SEI's rights to the SEI IP and all related Licensed Technology
within the Territory to (i) use, modify or create derivative works of the
Licensed Technology and Licensed Products, or sublicense such rights (as
set forth below) and (ii) make, have made, and sell the Licensed Products
within the Territory.
b. IMPROVEMENTS: All Improvements to the Licensed Technology
developed by Isonics will belong to Isonics. To the extent Isonics (or any
person at the direction of Isonics) creates, invents, or authors such
Improvement shall have the right to file patent applications, or any
continuations, renewals or extensions thereof in its own name, or copyright
registrations
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c. SUBLICENSES: Isonics may sub-license the Licensed Technology, or
any portion thereof, in its discretion. SEI may not grant further licenses
or sublicenses to the Licensed Technology without Isonics' approval. After
the Effective Date, SEI may not practice the Licensed Technology without
Isonics' written consent, which consent Isonics will not unreasonably
withhold.
d. CONVERSION TO NON-EXCLUSIVE LICENSE. SEI may (upon 30 days' prior
written notice and an opportunity during such 30 day period for Isonics to
cure the deficiency described by SEI in the written notice) convert this
Agreement into a non-exclusive license if either: (i) Isonics fails to
engage in the production of silicon-on-insulation wafers on or before
October 1, 2002; or (ii) Isonics fails to invest at least $2,000,000 in
facilities for the production of silicon wafers (including plant and
equipment) on or before October 1, 2002.
e. Isonics has the right to terminate this Agreement (and upon
written notice to SEI of such event, SEI will return to Isonics the
consideration described in paragraph 3(b), below, or the shares of common
stock issued upon conversion of that consideration) at any time until
December 1, 2001, unless prior to that time Isonics has entered into an
agreement acceptable to Isonics in its sole discretion for the continuation
of the Clean Room Leases, or the substitution of new leases for the Clean
Room Leases.
3. OBLIGATION OF LICENSOR AND LICENSEE
a. NONASSERTION. SEI agrees that it shall not assert against Isonics
or its customers and licensees or sublicensees, any claims for infringement
or misappropriation based on the manufacture, use, or sale of any Licensed
Products.
b. CONSIDERATION. As full payment for the grant of the license
hereby, Isonics hereby agrees to issue to SEI 500,000 shares of its Series
B Convertible Preferred Stock.
c. In connection with the acceptance of the shares, SEI represents
and warrants that:
(i) SEI and its board of directors have consulted with its and
their legal, tax, financial, and investment advisors regarding the
acceptance of Isonics stock as full consideration for this Agreement.
(ii) SEI and its advisors have reviewed information about Isonics
as they have determined necessary or appropriate in making an
investment decision with respect to the acquisition of Isonics stock
(including, without limitation, Isonics' annual report on Form 10-KSB
for the year ended April 30, 2001 and subsequent reports filed with
the Securities and Exchange Commission all of which are available
online at xxx.xxx.xxx).
(iii) SEI is accepting the shares for investment purposes only
and will not further distribute the shares except pursuant to a
registration statement that Isonics may file in accordance with other
commitments, or pursuant to an exemption from registration that must
be established to the satisfaction of Isonics.
(iv) SEI understands that because of the risks associated with
its
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acquisition of Isonics shares and because of the lack of
transferability of those shares it may not be able to profit from the
ownership of those shares for a significant period of time, if ever.
(v) SEI will cooperate with Isonics in establishing an exemption
from registration for the issuance to SEI of the shares under the
Securities Act of 1933 and under applicable state securities laws. For
the purposes of this exemption, SEI represents and warrants that its
principal place of business is in Vancouver, Washington.
4. PROTECTION OF INTELLECTUAL PROPERTY RIGHTS
a. GENERAL. Both Parties shall take reasonable measures to prevent
unauthorized copying and protect the Licensed Technology, and use best
efforts to protect the Trade Secrets and Know-How therein, but neither
Party shall be obligated hereunder to take any measures in excess of those
it takes to protect its own valuable Technology.
b. THIRD PARTY INFRINGERS. Upon the discovery of any infringement or
misappropriation of the Licensed Technology under the Technology Rights,
the Parties hereto shall consult together with a view to reaching an
agreement as to the ways and means of eliminating such infringement or
addressing such misappropriation. If the Parties agree jointly to commence
litigation against potential third party infringers, they will agree by
their respective shares the expense burden thereof, which shares will be
identical to their respective division of any recoveries thereof. In the
event that SEI declines to participate in the enforcement and/or protection
of the Licensed Technology under the Technology Rights, Isonics may, at its
sole discretion and expense and to the extent permitted by law, initiate
proceedings or take such steps as it deems appropriate, to enforce its
rights with respect thereto. SEI shall cooperate with Isonics in such
defense at Isonics' sole expense.
c. SEI DISCLOSURE. During the period following the Effective Date,
SEI will disclose to Isonics all information regarding the Technology that
is or may be relevant to Isonics' contemplated operations, and will provide
Isonics with copies of all written documentation relating to the
Technology.
d. CONFIDENTIAL TREATMENT. The Parties will treat any Confidential
Information obtained by the receiving party pursuant to the provisions of
this Agreement as confidential, except that in the event of any dispute,
litigation or arbitration proceedings between the parties, such
Confidential Information may be disclosed to the tribunal. Prior to any
Confidential Information being disclosed pursuant to the preceding
sentence, the receiving party shall give the disclosing party reasonable
notice of pending disclosure and both parties shall cooperate to undertake
all reasonable measures to obtain a protective order prohibiting or
limiting disclosure of such Confidential Information.
5. REPRESENTATIONS AND WARRANTIES SEI warrants and represents to Isonics
that (i) SEI has the right, power and legal capacity to enter into this
Agreement and has the right to license the Licensed Technology as set forth
above; and (ii) to the best of SEI's knowledge, the Licensed Technology does not
infringe upon the rights of any third party.
6. REMEDIES
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a. INJUNCTIVE RELIEF. In the event of a breach by either Party, of
the confidentiality or licensing provisions contained in this Agreement,
the non-breaching Party shall be entitled to an injunction from engaging in
or continuing with any conduct which may constitute a breach or threatened
breach of those provisions. An injunction may also be sought against the
breaching Party from rendering services to any person, firm, corporation,
association or other entity which may in some manner receive benefit from
the breaching Party's breach or threatened breach of those provisions. The
Parties agree that there is no adequate remedy at law for the irreparable
harm that would result from a breach thereof and therefore the Parties
consent to injunctive relief to enforce this Agreement. Nothing in this
Section shall be construed as prohibiting the Parties from pursuing other
remedies which may be available for breach or threatened breach, including
the recovery of damages.
b. ATTORNEYS' FEES. In the event of any action or proceeding brought
by either Party against the other under this Agreement, the prevailing
Party shall be entitled to recover all expenses incurred therefor,
including, but not limited to, reasonable attorneys' fees.
c. DISPUTE RESOLUTION.
(i) STEP NEGOTIATIONS. The Parties shall attempt in good faith
to resolve any dispute arising out of or relating to this Agreement
promptly by negotiations, as follows. Any Party may give the other
Party written notice of any dispute not resolved in the normal course
of business. Executives of both Parties who have previously been
involved in the dispute shall meet at a mutually acceptable time and
place within 10 days after delivery of such notice, and thereafter as
often as they reasonably deem necessary, to exchange relevant
information and to attempt to resolve the dispute. If the matter has
not been resolved by these persons within 30 days of the disputing
Party's notice, or if the Parties fail to meet within 10 days, the
dispute shall be referred to senior executives of both Parties who
have authority to settle the dispute and who shall likewise meet to
attempt to resolve the dispute. If the matter has not been resolved
within 30 days from the referral of the dispute to senior executives,
or if no meeting of senior executives has taken place within 15 days
after such referral, either Party may initiate mediation as provided
hereinafter. If a negotiator intends to be accompanied at a meeting by
an attorney, the other negotiator shall be given at least three
working days' notice of such intention and may also be accompanied by
an attorney. All negotiations pursuant to this clause are confidential
and shall be treated as compromise and settlement negotiations for
purposes of the Federal Rules of Evidence and state rules of evidence.
(ii) MEDIATION. If the dispute has not been resolved by
negotiation as provided above, the Parties shall endeavor to settle
the dispute by mediation by the Judicial Arbiter Group, Inc., Denver,
Colorado, under its then effective rules.
(iii) ARBITRATION. Should all good faith attempts to resolve the
dispute amicably as set forth above be exhausted, and if agreed to by
the Parties, any dispute arising in connection with this Agreement may
be finally settled by arbitration before the Judicial Arbiter Group,
Denver, Colorado, by three
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arbitrators appointed on an expedited basis. Such arbitration shall
take place in Denver, Colorado. The arbitrators shall be bound by the
laws governing this Agreement, and this Agreement, and shall be bound
by the obligation to retain Confidential Information in confidence in
perpetuity and not to disclose Confidential Information.
7. MISCELLANEOUS
a. SUCCESSORS AND ASSIGNMENT. Except as provided herein, this
Agreement or any rights hereunder shall not be assigned or transferred, in
whole or in part, by either Party without the prior written consent of the
other Party, and any such permitted assignment or transfer shall be binding
on each Party's successors and permitted assignees.
b. LIMITATION OF RIGHTS. Except as expressly provided in this
Agreement, nothing contained herein shall be construed as conferring any
license or other rights by implication, estoppel or otherwise.
c. SEVERABILITY. If any provision of this Agreement be adjudicated
invalid or against public policy for any reason by a court of competent
jurisdiction, it is specifically intended that each and every provision not
so invalidated shall remain in full force and effect.
d. CHOICE OF LAW. This Agreement is made and entered into in the
State of Colorado, and shall in all ways be governed and construed by the
law of such State, without regard to conflicts of law.
e. WAIVER. No waiver of any provision of this Agreement shall be
construed to be a waiver of any subsequent breach of the same or any other
provision of this Agreement.
f. INDEXING. All indexing set forth in this Agreement is intended
for convenience only and shall not control or affect the meaning,
construction or effect of this Agreement or of any of the provisions
thereof.
g. NON-PARTNERSHIP. Each Party shall bear its respective expenses,
risks, and liabilities arising out of its efforts related to this
Agreement. The Parties to this Agreement are independent contractors. This
Agreement shall not constitute, create, give effect to, or imply a joint
venture, pooling arrangement, partnership, formal business organization or
any type of permanent arrangement of any kind. Neither Party shall (i) have
the authority to bind the other except to the extent authorized herein,
(ii) be liable to the other for any damages, whether direct, indirect,
special, incidental or consequential, whether arising out of contract, tort
(negligence) or strict liability, or (iii) share losses with the other.
h. NO THIRD-PARTY BENEFICIARY RIGHTS. No provision of this Agreement
is intended nor shall be interpreted to provide or create any third party
beneficiary rights or any other rights of any kind in any sublicensee, and
all provisions hereof shall be personal solely between the Parties hereto.
i. NOTICES. All notices which Lessor or Isonics may be required, or
may
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desire, to serve on the other may be served by personal service or by
mailing by certified mail, postage prepaid, at such address as the parties
may from time to time designate to the other in writing, or by facsimile to
such telephone number as the parties may from time to time designate
provided the sending facsimile machine automatically prints out a receipt
for such transmission. The time of rendition of such notice shall be deemed
to be the time when the notice is either personally delivered or deposited
in the mail as herein provided, or a facsimile receipt has been printed.
j. INTEGRATION. This Agreement constitutes the entire Agreement
between the Parties. No amendments to this Agreement shall be made other
than by a written amendment signed by both Parties.
By their signatures below: (a) SEI affirmatively represents to Isonics that
it's board of directors has unanimously approved this Agreemenet and the grant
of this license to Isonics; and (b) Isonics affirmatively represents to SEI that
it will submit this Agreement to its board of directors and that it will advise
SEI of the Effective Date hereof.
Licensor Licensee
Silicon Evolutions, Inc. Isonics Corporation
By: By:
--------------------------- ---------------------------------
Xxxxx Xxxxxxx, President Xxxxx X. Xxxxxxxxx, President
By:
---------------------------
Xxxx Xxxxxxxx, Vice President
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