UNDIVIDED RIGHTS (SOLE COMMERCIAL) LICENSE AGREEMENT
THIS AGREEMENT, made effective on the 5th day of January, 1997, by and
between LOCKHEED ▇▇▇▇▇▇ ENERGY RESEARCH CORPORATION (hereinafter "LMER"), a
corporation organized and existing under the laws of the State of Delaware and
whose address for notices is ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, AND COMMODORE SEPARATION TECHNOLOGIES, INC., (hereinafter
"Licensee"), a corporation organized and existing under the laws of the State of
Ohio and whose address for notices is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇.
W I T N E S S:
A. LMER, pursuant to ▇▇▇▇▇▇▇▇ ▇▇. ▇▇-▇▇▇▇-▇▇▇▇▇▇▇▇▇ (hereinafter
"Prime Contract") with the United States Government as represented by the
Department of Energy (hereinafter "DOE") has developed and/or obtained rights to
Proprietary Rights relating to Products and Processes subject to the DOE
nonexclusive, nontransferable, irrevocable, paid-up license for the United
States Government and certain march-in rights and any other conditions of
waivers granted by the DOE (collectively the "Government Use License"); and
B. Licensee desires to obtain rights under LMER Proprietary Rights.
THEREFORE, in consideration of the foregoing premises, covenants and
agreements contained herein, the parties hereto agree to be bound as follows:
1. Definitions
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1.1 "Proprietary Rights" shall mean LMER's undivided rights as joint owner of
the U.S. patents and patents arising from patent applications listed in Exhibit
A attached hereto and hereby incorporated into this Agreement by reference
including all continuations, continuations-in-part, divisions, reissues,
re-examinations and temporal extensions of any of the foregoing.
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1.2 "Processes or Products" shall mean any and all processes used or sold, or
products manufactured, used, sold or transferred by Licensee covered by one or
more claims of the Proprietary Rights licensed hereunder.
1.3 "Net Sales" shall mean the total amounts invoiced to purchasers during the
accounting period in question for Processes used or Products sold by Licensee,
less allowances for returns of Products, discounts, commissions, freight, and
excise or other taxes on Products. Net Sales in the case of Products used or
transferred by Licensee shall mean the fair market value of Products as if they
were sold to an unrelated third party in similar quantities.
2. Grants
------
2.1 Subject to the terms and conditions of this Agreement, LMER hereby grants to
Licensee wherever U.S. or foreign patent protection is obtained, an exclusive
license, subject to the government use license, to its undivided rights in the
Exhibit A, Proprietary Rights with respect to which LMER is a joint owner.
2.2 LMER hereby agrees not to grant to any other party right and license to
Proprietary Rights in accordance with the grant hereinabove as long as Licensee
abides by the terms and conditions of this Agreement, unless required to so
grant such right and license in accordance with Federal Statutory or Regulatory
enactments conditioning the waiver of rights to LMER by the DOE, particularly as
set forth in 41 CFR 9-9.109-(6)i; 10 CFR Part 781; or 37 CFR Part 404.
2.3 Licensee agrees that any Products for use or sale in the United States shall
be manufactured substantially in the United States.
2.4 Licensee agrees to affix appropriate markings of the applicable LMER
proprietary rights (and the fact that LMER was the source of these rights) upon
or in association with Licensee's Products or licensed services and Licensee
agrees to use its best efforts to follow any guidance from LMER concerning such
markings.
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3. Royalties And Commercialization Plan
------------------------------------
3.1 In consideration of the right and license to the undivided rights in the
Exhibit A, Proprietary Rights granted herein, Licensee agrees to the provisions
of Exhibit B and Exhibit C attached hereto and hereby incorporated by reference.
3.2 No royalties shall be owing on any Processes used or Products produced for
or under any Federal governmental agency contract pursuant to the DOE
nonexclusive license for Federal governmental purposes but only to the extent
that Licensee can show that the Federal government received a discount on
Product or Process sales which discount is equivalent to or greater than the
amount of any such royalty that would otherwise be due. Any sales for Federal
governmental purposes shall be reported under the Records and Reports Section
hereinbelow by providing: (a) a Federal government contract number; (b)
identification of the Federal government agency; and (c) a description as to how
the benefit of the royalty free sale was passed onto the Federal government.
3.3 Upon termination of this Agreement for any reason whatsoever, any royalties
that remain unpaid shall be properly reported and paid to LMER within thirty
(30) days of any such termination.
4. Records and Reports
-------------------
4.1 License agrees to keep adequate records in sufficient detail to enable
royalties payable hereunder to be determined and, upon reasonable notice, to
provide such records for inspection by authorized representatives of LMER at any
time during regular business hours of Licensee. Except as hereinafter provided,
Licensee agrees that any additional records of Licensee, as LMER may reasonably
determine are necessary to verify the above records, shall also be provided to
LMER for inspection. Provided that before Licensee furnishes any additional
records or information to LMER, Licensee may require LMER to execute and deliver
a non-disclosure agreement in form and substance as that attached hereto as
Exhibit "D".
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4.2 Within thirty (30) calendar days after the close of each calendar half-year
during the term of this Agreement (i.e., January 31 and July 31), Licensee will
furnish LMER a written report providing: (a) all domestic Net Sales in U.S.
Dollars during the preceding calendar half-year period including any Federal
governmental agency under section 3.2 hereinabove and all export Net Sales, if
none so indicate; (b) amount of royalties due in U.S. Dollars for the preceding
calendar half-year period pursuant to the provisions hereof; and (c) payment of
the royalties due in U.S. Dollars payable to the order of Lockheed ▇▇▇▇▇▇ Energy
Research Corporation, pursuant to the report to be transmitted in accordance
with the Notices Section of this Agreement hereinbelow.
4.3 Should Licensee fail to make any payment to LMER within the time period
prescribed for such payment, then the unpaid amount shall bear interest at the
rate of one and one half percent (1.5%) per month from the date when payment was
due until payment in full, with interest, is made.
5. Technical Assistance
--------------------
5.1 LMER agrees, upon the written request of Licensee, to assist Licensee in
obtaining necessary DOE approvals for technical assistance at LMER facilities
under appropriate agreements. The cost of such technical assistance shall be
paid for by the Licensee.
5.2 LMER agrees to permit its employees, within LMER corporate policy guidelines
then in effect and subject to DOE requirements then in effect, to provide
consulting services to Licensee with reference to Licensee's use and commercial
exploitation of the Proprietary Rights as contemplated herein. Licensee shall
make payment directly to the individual consultant(s) for all such services.
6. Infringement by Third Parties
-----------------------------
6.1 Licensee shall give notice of any discovered third party infringement to
LMER. Licensee has the right to take appropriate action to stop and prevent the
infringement, including the right to file suit. During the prosecution of such
suit, LMER hereby agrees to cooperate with Licensee in any such suit.
4.
6.2 In the event that Licensee files suit to stop infringement or defends any
action against the validity of the patent, and where LMER is joined in such suit
as a necessary party, Licensee shall indemnify and hold LMER harmless against
all liability, expense and costs, including attorney's fees incurred as a result
of any such suit.
6.3 Licensee may, however, apply all such costs as a reduction of any royalties
due and payable to LMER under the terms of this Agreement at such time as
verified bills of costs actually incurred are reported to LMER in accordance
with the Records and Reports Section hereinabove.
6.4 In the event Licensee secures a judgment against any third party infringer,
after accounting for and paying all of Licensee's costs associated with
prosecution of such action as well as paying LMER for any reduction of royalties
pursuant to this section, Licensee shall pay LMER its royalties as set forth
hereinabove on any balance of proceeds actually received and Licensee shall
retain any such remaining balance of proceeds.
6.5 The parties hereby agree to cooperate with each other in the prosecution of
any such legal actions or settlement actions undertaken under this section and
each will provide to the other all pertinent data in its possession which may be
helpful in the prosecution of such actions; provided, however, that the party in
control of such action shall reimburse the other party for any and all costs and
expenses in providing data and other information necessary to the conduct of the
action.
6.6 The party having filed such action shall be in control of such action and
shall have the right to dispose of such action in whatever reasonable manner it
determines to be the best interest of parties hereto, except that any settlement
which affects or admits issues of patent validity shall require the advance
written approval of LMER.
7. Representations and Warranties
------------------------------
7.1 LMER represents and warrants that Exhibit A contains a complete and accurate
listing of all the Proprietary Rights licensed and that LMER has the full right,
power and interest to grant the rights, licenses, and privileges granted herein.
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7.2 LMER represents and warrants that LMER has no knowledge of any claims of
infringement filed against LMER for practicing the Exhibit A Proprietary Rights
anywhere in the world.
7.3 Except as set forth hereinabove, LMER makes NO REPRESENTATIONS OR
WARRANTIES, express or implied, with regard to the infringement of proprietary
rights of any third party.
7.4 LMER represents and warrants that, to the best of its knowledge, subject to
the Government Use License, it is the exclusive assignee of the undivided rights
of its employees, and the exclusive licensee of the undivided rights of the
employees of the University of Tennessee to such Proprietary Rights and that it
is authorized to make, execute and deliver this License.
7.5 Licensee acknowledges that the export of any of the Proprietary Rights from
the United States or the disclosure of any of the Proprietary Rights to a
foreign national may require some form of license from the U.S. Government.
Failure to obtain any required export licenses by Licensee may result in
Licensee subjecting itself to criminal liability under U.S. laws.
8. Disclaimers
-----------
8.1 Neither LMER, the DOE, nor persons acting on their behalf will be
responsible for any injury to or death of persons or other living things or
damage to or destruction of property or for any other loss, damage, or injury of
any kind whatsoever resulting from Licensee's manufacture, use, or sale of
materials, information, or Proprietary Rights hereunder.
8.2 EXCEPT AS SET FORTH HEREINABOVE, NEITHER LMER, THE DOE, NOR PERSONS ACTING
ON THEIR BEHALF MAKE ANY WARRANTY, EXPRESS OR IMPLIED: (1) WITH RESPECT TO THE
MERCHANTABILITY, ACCURACY, COMPLETENESS, OR USEFULNESS OF ANY SERVICES,
MATERIALS, OR INFORMATION FURNISHED HEREUNDER; (2) THAT THE USE OF ANY SUCH
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SERVICES, MATERIALS, OR INFORMATION WILL NOT INFRINGE PRIVATELY OWNED RIGHTS;
(3) THAT THE SERVICES MATERIALS, OR INFORMATION FURNISHED HEREUNDER WILL NOT
RESULT IN INJURY OR DAMAGE WHEN USED FOR ANY PURPOSE; OR (4) THAT THE SERVICES,
MATERIALS, OR INFORMATION FURNISHED HEREUNDER WILL ACCOMPLISH THE INTENDED
RESULTS OR ARE SAFE FOR ANY PURPOSE, INCLUDING THE INTENDED OR PARTICULAR
PURPOSE. FURTHERMORE, LMER AND THE DOE HEREBY SPECIFICALLY DISCLAIM ANY AND ALL
WARRANTIES, EXPRESS OR IMPLIED, FOR ANY PROCESSES USED OR PRODUCTS MANUFACTURED,
USED, OR SOLD BY LICENSEE. NEITHER LMER NOR THE DOE SHALL BE LIABLE FOR
CONSEQUENTIAL OR INCIDENTAL DAMAGES IN ANY EVENT.
8.3 Licensee agrees to indemnify LMER, the DOE, and persons acting on their
behalf for all damages, costs, and expenses, including attorney's fees, arising
from, but not limited to, Licensee's making, using, selling, or exporting of any
Proprietary Rights, information, or Products, in whatever form furnished
hereunder.
9. Term of Agreement and Early Termination
---------------------------------------
9.1 This Agreement shall run until the expiration of the Proprietary Rights
subject to early termination as set forth hereinbelow and the terms and
conditions set forth in Exhibit B and Exhibit C attached hereto and hereby
incorporated into this Agreement by reference thereto.
9.2 Either party shall have the right to terminate this Agreement without
judicial resolution upon written notice to the other after a material breach of
any provision by the other party has gone uncorrected for sixty (60) days after
the other party has been notified in writing of such breach.
9.3 This Agreement shall terminate automatically upon the extinguishment of all
of the Exhibit A Proprietary Rights, for any reason, but only after the time for
appealing said extinguishment has expired.
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9.4 The parties agree that LMER, at its sole discretion, may immediately
terminate this Agreement upon any attempted transfer of Licensee's interest, in
whole or in part, in this Agreement to any party which is not an "Affiliated
Party" as hereinafter defined. Subject to LMER's review and approval, which
approval shall not be unreasonably withheld, Licensee may assign, transfer or
sublicense any Proprietary Rights hereby licensed to an "Affiliated Party". For
purposes of this Agreement, "Affiliated Party" means any business organization
which Licensee owns, directly or indirectly, at least 20% of and any business
organization which, directly or indirectly, owns at least 20% of Licensee.
9.5 Licensee shall provide notice to LMER of its intention to file a voluntary
petition in bankruptcy or of another party's intention to file an involuntary
petition in bankruptcy for Licensee, said notice to be received by LMER at least
thirty (30) days prior to filing such a petition. Licensee's failure to provide
such notice to LMER of such intentions shall be deemed a material, pre-petition,
incurable breach of this Agreement.
9.6 Licensee agrees that this Agreement shall automatically terminate upon any
attempt by Licensee to offer Licensee's rights under this Agreement as
collateral to a third party.
9.7 Except as hereinafter set forth, Licensee may terminate this Agreement upon
sixty (60) days notice to LMER. Termination of this Agreement, and Licensee's
rights hereunder, shall not relieve Licensee's liability for royalties,
including any annual minimum royalty or prorated portion thereof, which accrued,
but were not paid, prior to termination. In the event Licensee terminates this
Agreement and its rights hereunder after the third anniversary date hereof, then
Licensee shall remain liable for the prorated portion (prorated annually) of any
annual minimum royalty which accrues after an anniversary date, but before
termination. For example, if Licensee terminates this license Agreement six (6)
months following any anniversary date after the third anniversary, then Licensee
shall remain liable for one-half of any annual minimum royalty provided in
Exhibit "B" hereto, less the amount of royalty paid for that fiscal year.
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10. Rights of Parties After Termination
-----------------------------------
10.1 Neither party shall be relieved of any obligation or liability under this
Agreement arising from any act or omission committed prior to the effective date
of such termination.
10.2 The rights and remedies granted herein, and any other rights or remedies
which the parties may have, either at law or in equity, are cumulative and not
exclusive of others. On any termination, Licensee shall duly account to LMER and
transfer to it all rights to which LMER may be entitled under this Agreement.
11. Force Majeure
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11.1 No failure or omission by LMER or by Licensee in the performance of any
obligation under this Agreement shall be deemed a breach of this Agreement or
create any liability if the same shall arise from acts of God, acts or omissions
of any government or agency thereof, compliance with requests, recommendations,
rules, regulations, or orders of any governmental authority or any office,
department, agency, or instrumentality thereof, fire, storm, flood, earthquake,
accident, acts of the public enemy, war, rebellion, insurrection, riot,
sabotage, invasion, quarantine, restriction, transportation embargoes, or
failures or delays in transportation.
12. Notices
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12.1 All notices and reports shall be addressed to the parties hereto as
follows:
If to LMER:
Business Manager, Technology Transfer Telephotocopy No.
Lockheed ▇▇▇▇▇▇ Energy Research Corp. (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
If to Licensee:
Commodore Separation Technologies, Inc. Telephotocopy ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ Verify No.
(▇▇▇) ▇▇▇-▇▇▇▇
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12.2 All minimum and royalty payments due LMER shall be sent to:
Lockheed ▇▇▇▇▇▇ Energy Research Corp.
Royalty Account
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
12.3 Any notice, report or any other communication required or permitted to be
given by one party to the other party by this Agreement shall be in writing and
either (a) served personally on the other party, (b) sent by express, registered
or certified first-class mail, postage prepaid, addressed to the other party at
its address as indicated above, or to such other address as the addressee shall
have previously furnished to the other party by proper notice, (c) delivered by
commercial courier to the other party, or (d) sent by facsimile to the other
party at its facsimile number indicated above or to such other facsimile number
as the party shall have previously furnished to the other party by proper
notice, with machine confirmation of transmission.
13. Waivers
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13.1 The failure of LMER at any time to enforce any provisions of this Agreement
or to exercise any right or remedy shall not be construed to be a waiver or such
provisions or of such rights or remedy or the right of LMER thereafter to
enforce each and every provision, right or remedy.
14. Modifications
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14.1 It is expressly understood and agreed by the parties hereto that this
instrument contains the entire agreement between the parties with respect to the
subject matter hereof and that all prior representations, warranties, or
agreements relating hereto have been merged into this document and are thus
superseded in totality by this Agreement. This Agreement may be amended or
modified only by a written instrument signed by the duly authorized
representatives of both of the parties.
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15. Headings
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15.1 The headings for the sections set forth in this Agreement are strictly for
the convenience of the parties hereto and shall not be used in any way to
restrict the meaning or interpretation of the substantive language of this
Agreement.
16. Law
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16.1 This Agreement shall be construed according to the laws of the State of
Tennessee and the United States of America.
17. Incorporation of Recitals
-------------------------
17.1 The Parties hereby incorporate by reference recital paragraphs A. and B.
set forth on page 1 of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed in their respective names by their duly authorized representatives.
"LMER"
LOCKHEED ▇▇▇▇▇▇ ENERGY RESEARCH CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President, Technology Transfer
-----------------------------------
Date: 1-6-97
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"Licensee"
COMMODORE SEPARATION TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Vice Chairman of the Board
------------------------------------
Date: ____________________________________
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