LICENSE AGREEMENT
AGREEMENT
made and entered into on this 25th day of
September, 2006 by and between Single Crystal Technologies, Inc, a corporation
organized and existing under the laws of Arizona, having offices and doing
business at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxx, Xxxxxxx 00000 (Hereinafter referred
to as “Licensor”), and CRC Crystal Research Corporation a corporation organized
and existing under the laws of Nevada, having offices and doing business at 0000
Xxxx Xxxxxxx Xxxxxx, Xxxx, Xxxxxxx (Hereinafter referred to as
“Licensee”).
WITNESSETH
WHEREAS,
Licensor posses certain intellectual property rights relating to certain
products
and has developed certain machinery and apparatus for the manufacture of the
Products;
WHEREAS,
Licensor has agreed to grant Licensee certain rights to manufacture, use and
sell the Products in the Licensed Territory for the life of this Agreement, and
to avail itself of Licensor's technical know-how and skill in the said
manufacture under the terms and conditions as set forth herein;
WHEREAS,
Licensee desires to use and sell the Products in other countries, to use
Licensor’s intellectual property rights and to avail itself of the technical
know-how and skill of Licensor in the said manufacture, use and sale of the
Products upon the terms and conditions as set forth in this
Agreement;
NOW
THEREFORE, in consideration of the mutual covenants and promises contained
herein, the parties do hereby agree as follows:
Article I:
Definitions
As used
above and throughout this Agreement, the following terms shall have the
meanings
as hereinafter defined:
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(a) “Products”
shall mean Scintillation Crystals, Well Logging Assemblies, Scintillation
Crystal late Assemblies and Gamma Camera Plate Assemblies manufactured in
accordance with intellectual property rights of Licensor.
(b) “Intellectual
property rights” shall mean patents, applications for patents, reissues,
renewals, extensions, divisions, and patents of addition relating to the
Products.
(c) “Know-how”
shall mean all technical information designs and data relating to the
manufacture of the Products presently owned by Licensor or acquired by the
parties hereto and/or the affiliated company of Licensee during the life of this
Agreement.
(d) “Licensed
Territory” shall mean the United States and countries in the North American Free
Trade Area (NAFTA), Canada and Mexico, Central and South America, Europe, Asia,
Australia and New Zealand and the remainder of the world.
(e) “Affiliated
Company” shall mean any company or entity of which fifty percent (50%) or more
of its voting shares, quotas or other interest is owned or controlled directly
or indirectly by Licensee or any company or entity of which Licensee owns or
controls all the voting shares, quotas, or other interest not owned or held by
local nationals as a result of the requirements of local laws or
policy.
Article II:
Grant
(a)
Licensor hereby grants to Licensee the non-exclusive right to use and employ
Licensor’s
intellectual property rights related to the Products and to manufacture, use and
sell the Products in the Licensed Territory.
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Article III: Technical
Assistance and Know-How
(a) Licensee
may from time to time at its own expense send such of its technically qualified
specialists to the manufacturing plant of Licensor to obtain such instructions,
information
and data as may reasonably by necessary for the manufacture of the Products by
Licensee. The number of such qualified specialists and the time when they shall
be sent shall be arranged from time to time with the consent of Licensor. The
length of visit of the said qualified specialists shall be limited in each case
to such times as the parties shall first agree is necessary for their
instruction. Such qualified specialists shall at all times remain in the
employment of Licensee.
(b) Licensor
shall assist Licensee in preparing the factory layout and plant facilities for
the manufacture of the Products in the Licensed Territory, and from time to time
during the life of this Agreement shall send at Licensee’s request and within a
reasonable time thereafter such of its technicians as may be available to assist
Licensee in preparing the factory layout and plant facilities for the
manufacture of the Products in the Licensed Territory, and to instruct Licensee
in the use and application of the secret processes, intellectual property rights
and know- how to the manufacture of the Products. Such technicians shall remain
at the disposal of Licensee for such period or periods as Licensor shall deem
necessary.
(c) Licensee
shall pay for the services of the technicians supplied by Licensor in accordance
with Paragraph (b) of this Article at the rate of U.S. $1,500 per day or part
thereof from the time of the departure of such technicians from Phoenix, Arizona
until the time of their return thereto. Licensee shall likewise pay and/or
reimburse Licensor for all of the expenses of the said technicians in providing
the services as aforesaid, including all charges of traveling, and all living
costs incurred by such technicians during their absence from Phoenix, Arizona in
rendering
the services in accordance with Paragraph (b) of this Article.
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(d) Licensor
shall supply Licensee with the Products in such quantities and upon such terms
as the parties shall agree pending the start-up of the Licensee's facilities for
the manufacturing
of the Products in the Licensed Territory.
Article IV: Development of
Intellectual Property Rights and Know-How
(a) Licensor
hereby agrees immediately to communicate to Licensee any improvements,
modification, further invention and design it may discover, make or develop with
respect to the secret processes, intellectual property rights or know-how
pertaining to the manufacture, use and sale of the Products, and shall fully
disclose to Licensee the nature and manner of applying and utilizing such
improvements, modifications, further inventions or designs.
(b) Licensee
hereby agrees immediately to communicate to Licensor any improvements,
modification, further invention and design it may discover, make or develop with
respect to the secret processes, intellectual property rights or know-how
pertaining to the manufacture, use and sale of the Products, and shall fully
disclose to Licensor the nature and manner of applying and utilizing such
improvements, modifications, further inventions or designs.
(c) (i) If,
during the life of this Agreement, Licensor shall discover, make or develop
any improvement, modification, further invention or design required to be
disclosed to Licensee as aforesaid, Licensor may at its own expense file
applications for letters patent in the United States, or take other necessary
legal steps to protect such improvements, modifications or further inventions as
it shall determine. Upon issuance of such letters patent or the acquisition of
such
legal rights, Licensor shall thereupon grant to Licensee for the remaining term
of this Agreement, without additional charge or royalties, the right to make,
use and sell the Products under the said improvements, modifications, further
inventions or designs covered by the said letters
patent or other legal protection. The right so granted to Licensee shall be
exclusive with respect to the Licensed Territory.
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(ii)
If, during the life of this Agreement, Licensee shall wish to have patent
protection
in countries other than the United States, Licensee shall report those countries
to Licensor and shall pre-pay Licensor the cost of securing patents in those
countries in Licensor’s name, after first receiving estimates from
Licensor.
(d) If,
during the life of this Agreement, Licensee shall discover any improvements,
modifications, inventions or designs required to be disclosed as aforesaid
Licensee shall assign rights in those improvements, modifications, inventions or
designs to Licensor. Licensor shall thereupon grant to Licensee for the
remaining term of this Agreement, without additional charge, the exclusive
rights related to the improvements, modifications, inventions or designs, under
the terms of this Agreement.
(e) In
the event that Licensee or any of its affiliated companies shall acquire any
technical information, data, processes, formulae or patent rights from third
parties pertaining to the manufacture, use or sale of the Products, Licensee
shall use its best efforts to secure the additional right to permit Licensor to
manufacture, use and sell under such technical information, data, processes and
patents.
(f) The
parties hereby agree that all renewal fees and the cost of all such actions and
things as may be necessary to maintain and keep effective the letters patent
referred to in this Article
shall be borne by the Licensee who has rights in the Licensed Territory under
this Agreement.
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(g)
In the event of any action for infringement or institution of any proceedings
for the
revocation of any industrial property rights of letters patent owned by Licensor
under which Licensee shall have been granted an exclusive right to make, use and
sell the Products, Licensee shall be
responsible, at its own expense and in its own name, to prosecute such actions
or defend such proceedings. Licensor shall, at its option, assist Licensee in
such actions or proceedings, and shall lend its name to such actions or
proceedings if required by Licensee. If Licensee shall elect not to bring any
action for infringement or defend any proceedings for the revocation of any
industrial property rights or letters patent as aforesaid, Licensor may bring
such action or defend such proceedings in its own name and recover its costs
from Licensee. Licensee shall assist Licensor in such actions or proceedings if
so requested, and shall lend its name to such actions or proceedings if
required.
Article V: Secrecy and
Nondisclosure
(a) Licensee
hereby agrees that, during the life of this Agreement and for a period of
five (5)
years after its termination, it will hold secret and confidential, will not
disclose in any manner to any person or concern (except to such of its
sublicensees as are referred to in Article IX (b) and to such of its employees
as are required to use the information and only then under an obligation of
secrecy binding upon such sublicensees and employees), and will not use except
under and pursuant to this Agreement, any of the secret processes, formulae or
know-how pertaining to the manufacture, use or sale of the Products which
Licensee, its affiliated companies, sublicensees or any of the officers,
representative or employees of Licensee, its affiliated
companies or sublicensees may acquire from Licensor under and pursuant to this
Agreement.
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(b)
In the event that Licensee should grant any rights by sublicense to any of its
affiliated
companies to manufacture, use or sell the Products in the Licenses Territory in
accordance with Article IX (b) hereof, Licensee shall impose upon such
sublicensee the same requirements of secrecy and nondisclosure as are set forth
in Paragraph (a) of this Article.
Article VI: Market
Demands
[Intentionally
Deleted]
Article VII: Marking and
Quality Control
(a) All
the Products sold by Licensee or others under this Agreement shall be marked
“Single Crystal Technologies, Inc.”, “SCT” or “Microscint”. Licensor reserves
the right to control the use of “Single Crystal Technologies, Inc.”, “SCT” or
“Microscint” and the quality and specification of all the Products made under
this Agreement.
(b) Licensor
shall from time to time provide Licensee with specifications and changes to
Specifications as required.
(c) All
the Products sold in the Licensed Territory shall be made to the Specifications,
Including sized, shape, thicknesses, composition, electronics, surface
preparation and coating.
(d) Licensee
shall from time to time provide Licensor, at its request, production samples of
the Products made in the Licensed Territory in intermediate and final conditions
for inspection and testing by Licensor.
(e) Licensor
shall report results of such tests and inspections to Licensee, and any
necessary changes to production shall be quickly accomplished.
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(f)
Out of Specification production the Products will be destroyed and certified as
destroyed
by the manufacturer and by Licensee.
Article VIII: Compensation
and Royalties
(a)
Upon execution of this Agreement but not before $500,000 or more are raised for
Licensee
capitalization, Licensee shall pay to Licensor the sum of Fifty Thousand United
States Dollars (US$50,000).
(b)
In addition to the aforesaid payment, Licensee shall pay to Licensor royalties
in such
amounts as, after deduction of all taxes, shall be equal to up to six percent
(6%) of the net sales
prices of such Products, as follows:
(i) 1.5%
of the sales if the Licensee’s end product uses only one Licensor’s
patent;
(ii) 3%
of the sales if the Licensee’s end product uses two Licensor’s
patents;
(iii) 4.5%
of the sales if the Licensee’s end product uses three Licensor’s patents;
and
(iv) 6%
of the sales if the Licensee’s end product uses four or more Licensor’s
patents.
(c)
In determining the quantities of the Products made, used or sold by Licensee and
its
affiliated companies for purposes of computing the royalties payable to Licensor
in accordance with Paragraph (b) of this Article, no account shall be taken of
any Products manufactured and sold by Licensor (or by any licensee of Licensor
other than Licensee) to Licensee or its affiliated companies, and no royalty
shall be payable with respect thereto.
(d)
As used above and throughout this Agreement, the term “net sales price” shall
mean the
amount invoiced by Licensee or its affiliated companies to unrelated third
parties for the total number of the Products sold to such unrelated third
parties. Such amount shall not include any allowances to such unrelated third
parties, sales taxes or cost of packaging and packing. In the event that
Licensee or its affiliated companies shall sell or ship the Products to related
parties, it shall be deemed to have been sold at the net sales price which would
be charged if the said Products had been sold or offered for sale to unrelated
third parties in the same area.
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(e) If
Licensee shall at any time grant any right by sublicense to any affiliated
company in any area in the Licensed Territory to manufacture the Products in
such area, Licensee shall require the affiliated company to pay royalties to
Licensor on the same basis as set forth in Paragraph (b) of this Article. The
quantity of the Products made, used or sold by such manufacturing
affiliated company shall be calculated separately for the purpose of computing
the amount of royalties payable by such affiliated company to Licensor on the
basis as set forth in Paragraph (b) of this Article, and such quantity shall not
be taken into account in calculating the annual quantity of the Products used or
sold by Licensee or its other affiliated companies for purposes of computing the
amount of royalties payable by Licensee in accordance with Paragraph (b) of this
Article.
(f) Licensee
hereby agrees that payment of royalties shall be made with respect to each
calendar quarter and shall be made within thirty (30) days of the last working
day of March, June, September and December of each year with respect to all
Products used or sold by Licensee and its affiliated companies in the calendar
quarter ending on the said working day. All payments shall be in U.S. dollars
converted from any other currency at the official rate of exchange prevailing at
the close of the Exchange Market in New York City, New York, U.S.A.,
on the
last working day of the calendar quarter for which the said payment is being
made. Such payments shall be made to Licensor or to such bank as Licensor shall
designate from time to time, and shall be accompanied by a written report
showing the amount and details of the Products made, used and sold by Licensee
and its affiliated companies in the said calendar quarter.
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(g) (i) Licensee
agrees that it will at all times keep complete, separate and accurate
books of account containing a current record of all Products made, used and sold
by Licensee and its affiliated companies, and such books will be maintained in
sufficient detail to enable Licensor to ascertain the royalties accruing and
payable hereunder.
(ii)
Licensee further agrees to permit Licensor or its authorized accredited
accounting
agent to have access to said books of account at reasonable intervals during
business hours.
(iii)
In the event that Licensee shall grant any rights hereunder to any affiliated
company by sublicense, it shall impose the same obligation on the affiliated
company with respect to maintaining books of account, and shall require the said
affiliated company to permit Licensor or its authorized agent to have access to
the said books of account at reasonable intervals during business
hours.
Article IX: Duration and
Termination
(a) This
Agreement shall continue in force until expiration of the last patent for the
Products.
(b) In
the event of any of the following:
(i)
any breach of this agreement not cured within sixty (60) days after notification
thereof;
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(ii) insolvency
or bankruptcy of either party;
(iii) appointment
of a trustee or receiver for either party; or
(iv) Licensee
or any of its affiliated companies fails to commence production of the Products
in the Licensed Territory within a period of two (2) years from the date of
execution of this Agreement; then, and in addition to all other rights and
remedies which either party may have in law or equity, the party not in default
may at its option terminate this Agreement by written notice. Such termination
shall become effective on the date set forth in the said notice of termination,
but in no event shall it be earlier than sixty (60) days from the date of
mailing thereof. The waiver of the right of termination for any default under
this Agreement shall not constitute a waiver of the right to claim damages for
such default or the right to terminate for any subsequent default.
(c) Termination
of this Agreement for any cause whatsoever shall not affect or prevent payment
of any and all royalties then due to Licensor from Licensee and which would
become due with respect to any sales of the Products in the quarterly period in
which termination occurs.
(d) On
termination of this Agreement, Licensee hereby agrees that it will not, either
directly or through any of its affiliated companies, licensees or sublicensees,
use or employ for a period of five (5) years any of the secret processes,
formulae or know-how acquired from Licensor in the manufacture, use or sale of
the Products in or outside of the Licensed Territory. In the event Licensee
shall assign transfer, license or sublicense any rights with respect to the
manufacture, use or sale of the Products, it shall impose the same condition
upon its assignees, transferees,
licensees or sublicensees with respect to not using or employing any of the
secret processes, formulae or know-how acquired from Licensor for the same
period of five (5) years following the date of termination of this
Agreement.
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Article X: Assignment and
Sublicensing
(a) This
Agreement is personal to the parties hereto and shall be binding upon and inure
solely to their benefit. Any assignment of the rights of obligations hereunder
by either of the parties, whether in whole or in part, shall only be made with
the prior written consent of the other party. Any attempted assignment not made
in accordance with the provisions of this Paragraph (a) shall be void and of no
effect.
(b) Subject
to Article V (b) hereof, Licensee shall be free to sublicense its affiliated
companies any of the rights granted to it by Licensor under Article II hereof,
provided that no new or additional sublicenses of such affiliated companies
shall be agreed or executed for a period of five (5) years following the
termination of this Agreement.
Article XI: Unforseen
Occurrences
Neither
party to this Agreement shall be held responsible for the damages caused by any
delay or failure to perform under this Agreement which are the result of any
happenings or events which could not have been reasonably avoided. Such
happenings or events shall include, but shall not be limited to, fire; flood;
explosion; action of the elements; acts of God; accidents; epidemics; strikes,
lockouts or other labor trouble or shortage; inability to obtain or shortage of
material, equipment or transportation; insurrections, riots or other civil
commotion; war, enemy action, acts, demands or requirements of laws or of
Governments.
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Article XII:
Notice
(a)
All notices, requests, demands and other communications under this Agreement or
in
connection therewith shall be given to or made upon the respective parties
hereto as follows:
|
To
Licensor at:
|
Single
Crystal Technologies, Inc.
0000 Xxxx Xxxxxxx Xxxxxx, Xxxx, XX
00000
|
|
To
Licensee at:
|
CRC
Crystal Research Corporation
0000 Xxxx Xxxxxxx Xxxxxx, Xxxx, XX
00000
|
or to
such other address and to the attention of such other officers or persons as
each of the parties hereto may specify by notice in writing to the
other.
(b)
All notices, requests, demands and other communication given or made in
accordance
with the provisions of this Agreement shall be in writing, shall by given either
by registered air mail or by cable, and if received shall be deemed to have been
given when deposited in the United States mail, as the case may be, postage
prepaid, or in the case of notices delivered by cable, courier or facsimile,
when delivered to the office of a party addressed as specified in Subparagraph
(a) of this paragraph.
Article XIII: Dispute
Resolution
In the
event of any dispute, difference or question arising between the parties in
connection with this Agreement, the construction thereof, or the rights, duties
or liabilities of either party, the matter of difference shall be settled first
by meaningful face-to-face discussions between the parties or, if not so
settled, second by non binding mediation lasting no more than half a day or, if
not so settled, third by binding arbitration by a single arbitrator nominated
and agreed upon by both parties. If the parties cannot agree upon the identity
of the single arbitrator within one (1) month after the first demand for
arbitration has been made, an arbitrator shall be randomly selected from any
recognized list of arbitrators. Any arbitrator shall agree to serve with
full
powers to compel the production of documents and things and the attendance of
witnesses, to conduct a hearing lasting no more than two days within one month
of appointment, and to render a written decision with an opinion within two
weeks of the hearing, with the sole purpose of achieving a speedy, just and
inexpensive conclusion. A court having jurisdiction over either or both of the
parties, may enter judgement on the award and may issue exception thereof. All
costs of the said arbitration shall be borne equally by the parties
hereto.
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Article XIV: Construction
and Interpretation
(a) It
is agreed that this Agreement along with the Agreement provided for in Article
VI (a) supersede all documents or arrangements previously concluded by the
parties, and evidences the entire Agreement of the parties hereto. This
Agreement cannot be changed, modified or supplemented except in writing signed
by the properly authorized executive officials of both of the parties
hereto.
(b) This
Agreement shall be deemed to be a contract make under the laws of Arizona, and
for all purposes shall be construed exclusively in accordance with such laws.
The parties hereby agree that the District Court of the District of Arizona
shall be competent court to adjudicate any disputes arising out of the Agreement
which are not settled in accordance with the procedure set forth in Article XI,
and the parties agree to submit themselves to the jurisdiction of the said
District Court.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement by their duly
authorized representatives on the day and year set forth above.
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| Single Crystal Technologies, Inc., LICENSOR | ||||
|
Attested
by:
|
By:
|
/s/ Xxxxx X. Pandelisev | ||
| Title: President/CEO | ||||
| CRC Crystal Research Corporation, LICENSEE | ||||
|
Attested
by:
|
By: | /s/ Xxxxx X. Pandelisev | ||
| Title: President/CEO | ||||
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