***Confidential Portions of this document have been redacted and filed
separately with the Commission
Exhibit 10.28.1
LICENSE AND REMARKETER AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into as of February 13,
2003 (the "Effective Date"), by and between American Technology Corporation,
located at 00000 Xxxxxxx Xxxxx Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 ("ATC"),
and Bath Iron Works Corporation, located at 000 Xxxxxxxxxx Xxxxxx, Xxxx, Xxxxx
00000 ("BIW").
WHEREAS, ATC has developed or acquired and owns or has the right to
license, certain patent rights, technical information and know-how, including
trade secrets and copyrights therein, relating to the design, manufacture,
testing, operation and maintenance of certain transducers and high intensity
directed acoustics; and
WHEREAS, BIW desires to obtain an exclusive, worldwide license to make,
have made, use and sell Products (defined below) and sell ATC Products (defined
below) for and to Customers (defined below) for Applications (defined below),
which use or incorporate the Technologies (defined below);
NOW, THEREFORE, for and in consideration of the covenants and
undertakings herein provided, and other good and valuable consideration, the
receipt and sufficiency of which is reciprocally acknowledged, IT IS AGREED AS
FOLLOWS:
1. DEFINITIONS.
"Affiliate" means, with respect to any person or entity, any present or
future entity directly or indirectly controlling, controlled by, or under common
control with such person or entity. With respect to BIW, the term "Affiliates"
includes, but is not limited to, General Dynamics Corporation and any direct or
indirect subsidiary of General Dynamics Corporation.
"Agreement Year" means, for the first Agreement Year, the period
commencing on the Effective Date and ending December 31, 2003, and thereafter,
each successive calendar year during the Term.
"Applications" means the applications listed in Attachment A.
"ATC Products" means the Products listed in Attachment B.
"Claims" has the meaning specified in Section 9(a).
"Customers" means the customers listed in Attachment A.
"Components" means the components based on the Technologies and listed
on Attachment B.
"Confidential Information" has the meaning specified in Section 10(a).
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***Confidential Portions of this document have been redacted and filed
separately with the Commission
"Improvements" means any and all improvements including but not limited
to findings, discoveries, inventions, additions, modifications, or changes to or
relating to the Technologies, Components or Products or to processes for
manufacturing, testing, operating or maintaining Products or Components.
"Losses" has the meaning specified in Section 9(a).
"Products" means any and all products using or incorporating any
Component or Technology, including without limitation ATC Products.
"Technology" or "Technologies" means all inventions (whether or not
patentable), issued patents, pending applications for patents, and patents which
may be issued from current applications (including divisionals, reissues,
renewals, re-examinations, continuations, continuations in part and extensions),
technical knowledge and information, whether public or proprietary, including,
but not limited to, all drawings, bills of materials, specifications, manuals,
trade secrets, and proprietary or confidential technical information,
copyrightable works (whether or not copyrighted), software and computer
programs, electronic data files, manufacturing and production processes,
maintenance information, and any other such technical information owned by ATC
or which ATC has the right to license during the term of this Agreement and
relating to the technologies set forth on Attachment A. Technologies shall also
include any Improvements or copyrighted materials related to the foregoing
developed by or for ATC prior to or during the term of this Agreement or by BIW
during the term of this Agreement.
"Term" means the term of this Agreement as specified in Section 4(a) as
may be extended pursuant to that section.
"Trademarks" has the meaning specified in Section 2(f).
2. LICENSE AND REMARKETING RIGHTS.
(a) LICENSE GRANT. ATC hereby grants BIW, and BIW accepts, a worldwide,
exclusive, even as to ATC and except as to any Affiliate of BIW, license (with a
limited right to sublicense as set forth herein) to use the Technologies to
make, have made, use, import, export, sell, offer to sell, and/or service
Products, including but not limited to ATC Products, for exclusive use in the
Applications and for exclusive sale to the Customers listed on Attachment A;
provided, however, that all Products sold by BIW pursuant to this Agreement
shall include one (1) or more Components; provided further, that all Components
shall be acquired by BIW exclusively from ATC. BIW shall have the right to grant
sublicenses hereunder, without ATC's consent (i) to any of its Affiliates to the
full extent of BIW' s rights under this Agreement, and (ii) to any third party
for the purposes of having made, making, importing, exporting, repairing and
servicing Products. Nothing herein shall limit ATC's ability to sell items
directly to the United States government to the extent not otherwise in
violation of this Agreement or 48 C.F.R. 52.203-6.
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separately with the Commission
(b) COMPONENT PURCHASES. BIW agrees that all Components incorporated
into Products shall be acquired exclusively from ATC. With respect to Components
purchased other than for BIW's or a sublicensee's use for research, display or
demonstration purposes, ATC shall charge BIW or the sublicensee [***], as may be
amended from time to time, or [***]. ATC may add Components to Attachment B,
and, upon twenty (20) days prior written notice, change the list prices for
Components specified on Attachment B. BIW recognizes that ATC may manufacture
components having different features than the Components, and which incorporate
the Technologies, for applications other than the Applications and for customers
other than Customers. [***].
(c) ATC PRODUCT PURCHASES. BIW and its sublicensees may purchase ATC
Products for resale with or without modification by BIW or its sublicensees.
With respect to ATC Products purchased other than for BIW's or a sublicensee's
use for research, display or demonstration purposes, ATC shall charge BIW and
its sublicensees the lower of thirty percent (30%) off the list prices shown in
Attachment B, as may be amended from time to time, or ATC's then current list
prices. In addition, ATC agrees that it shall not sell ATC Products to any other
entity at a price lower than that offered to BIW and any sublicensees without
modifying the price charged BIW and any sublicensees for future sales to match
the more favorable sales price. ATC may add ATC Products to Attachment B and
upon twenty (20) days prior written notice change the list prices for ATC
Products specified on Attachment B. BIW recognizes that ATC may manufacture
products having different features than the ATC Products, and which incorporate
the Technologies, for applications other than the Applications and for customers
other than Customers. [***].
(d) ADDITIONAL CUSTOMERS. During the Term of this Agreement, BIW may
request ATC to add customers to the list of Customers in Attachment A by
submitting a request in writing to ATC. Such request shall inform ATC of the
nature of BIW's relationship with the proposed customer, and the basis for BIW's
request. ATC shall respond to such request within twenty (20) days subsequent to
its receipt, and the decision to grant such request shall be within the sole
discretion of ATC. Nothing in this Agreement shall restrict ATC from licensing
the Technologies or selling Components or Products (i) to persons other than
Customers or (ii) for applications not designated in Attachment A, on an
exclusive or non-exclusive basis.
(e) IMPROVEMENTS TO THE TECHNOLOGIES. Improvements to the Technologies
developed solely by or on behalf of [***] shall be [***] (the "Developing
Party"), subject to the license grants made in Section 2(a) and in this Section
2(e). [***] a worldwide, non-exclusive, perpetual, fully paid-up, royalty-free
license (with the right to sublicense) to make, have made, use, sell, offer to
sell and/or service products using and/or incorporating any Improvement to the
Technologies developed by or on behalf of [***]. Each party shall promptly
disclose to the other party each of its Improvements. With respect to any
Improvement to the Technologies that is jointly developed by the parties or is
developed on behalf of both parties (with or without collaboration by either
party or both parties) ("Joint Improvements"), the parties agree that [***] in
and to any such Joint Improvement, as well as in and to any patent applications
and patents thereon in all countries, subject to the provisions hereof. [***].
3
(f) TRADEMARK LICENSE. During the term of this Agreement, and
thereafter to the extent necessary to allow BIW and/or its sublicensees to
exercise their rights and fulfill their obligations under Section 4(b), ATC
hereby grants BIW a worldwide, non-exclusive, fully paid-up, royalty-free
license to use ATC's trademarks, trade names, logos, other distinguishing marks
of ATC (collectively, "Trademarks") and ATC marketing materials on or in
connection with Products which BIW or its sublicensees market or sell as
permitted by this Agreement; provided, however, that BIW shall at least maintain
ATC's quality standards in connection with Products and shall not intentionally
do or cause anything to be done to adversely affect ATC's rights in and to the
Trademarks. BIW shall not distribute any marketing materials that have not been
first approved by ATC, which approval shall not be unreasonably withheld.
(g) DEMONSTRATION PRODUCTS AND MARKETING MATERIALS. ATC shall provide
BIW with demonstration Products as appropriate (but at least one (1)
demonstration unit of each existing and new Product), free of charge, as
mutually agreed, and with copies of its sales and marketing literature regarding
ATC and the Products as reasonably required by BIW, and with sufficient training
in the use of the Products to permit BIW to make effective sales presentations,
all at no charge to BIW. BIW and its sublicensees may purchase additional
Products and Components for their internal research, display and demonstration
purposes [***] shown in Attachment B. If BIW and ATC reasonably believe that
specialized marketing materials or demonstration Products are necessary in
connection with a particular potential Customer in an Application, ATC shall
provide such materials and support to BIW which shall reimburse ATC for such
materials and support [***]. Any request for payment by ATC pursuant to this
section shall be in writing and accompanied by a detailed description of ATC's
cost.
(h) MARKETING ASSISTANCE. BIW shall provide reasonable display space
for Products at certain trade shows as mutually agreed to by the parties. In
addition, BIW shall use reasonable efforts to assist ATC with efforts to obtain
government/customer funding to further develop existing or new Products
employing the Technologies. BIW will not exert improper influence to solicit or
obtain government contracts, and has not represented to ATC that it is able to
obtain any government contract through improper influence. The parties agree and
acknowledge that use of government funds for development as contemplated
hereunder may preclude either party from exercising exclusive rights in certain
information related to new Products employing the technologies, and that
obtaining government funding may cause certain trade secret and patent rights to
be granted to the government, which in turn may permit the government to
disclose such information to third parties.
(i) EXCLUSIVITY. BIW will provide ATC with annual good faith forecasts
of the dollar amount of purchases for each Component and ATC Product that BIW
expects BIW and its sublicensees to purchase from ATC. Each forecast shall
separately forecast sales with respect to each of the Technologies identified in
Attachment C. The forecast for the first Agreement Year is set forth on
Attachment C. On or before each annual anniversary of the Effective Date during
the term, BIW shall provide a good faith forecast of its dollar purchase
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separately with the Commission
forecast per Technology for the next Agreement Year. Such purchase forecasts
will not be binding on BIW, except to the extent provided by this section with
respect to exclusivity. BIW and ATC will attempt to agree in good faith prior to
each Agreement Year on an aggregate dollar purchase forecast for the next
Agreement Year, taking into account prior year sales and prior year growth in
sales, new ATC Products and Components and anticipated new sales to Customers.
The license granted in Section 2(a) hereof shall become non-exclusive for a
particular Technology (and only for that Technology) if all of the following
conditions occur with respect to that Technology in a particular Agreement Year:
(i) the total dollar amount of purchase orders actually received from BIW and
all of its sublicensees for Components and ATC Products relating to that
Technology, plus any funding obtained from any source or provided for research
and development relating to that Technology, is less than [***] (the
"Exclusivity Threshold") and [***]; (ii) [***] is not attributable to any
material action, inaction or fault of ATC, or material government restrictions
on BIW's or its sublicencees' ability to sell the Products for use in
Applications or to sell to material Customers; and (iii) no Force Majeure Event
(as defined below) has prevented the achievement by BIW and its sublicensees of
the Exclusivity Threshold; provided, however, that the license granted in
Section 2(a) shall remain exclusive for all Technologies [***]. Purchases and/or
funding obtained [***].
(j) MARKETING EFFORTS. BIW shall (i) create product and marketing
strategies for the Applications, (ii) market the Products and/or ATC Products to
Customers for the Applications, (iii) provide service consistent with the nature
of the business to the Customers, and (iv) assist ATC in identifying new
products based on the Technologies that may be appropriate for development at
ATC's discretion for the Customer Applications.
3. INTERNAL USE PURCHASES. BIW and its sublicensees may purchase
Products and Components for their respective internal research, display and
demonstration purposes, and not for resale at the [***] described in Attachment
B. [***].
4. TERM AND TERMINATION.
(a) TERM. The initial term of this Agreement is for a period of five
(5) years from the Effective Date. BIW shall have the option of extending the
term for an additional five (5) years by providing ATC with at least thirty (30)
days' prior written notice of its intention to extend the term before the term
would otherwise expire. Notwithstanding the foregoing, BIW may terminate this
Agreement at any time without cause by providing ATC with at least sixty (60)
days' prior written notice of such termination.
(b) RIGHTS ON TERMINATION. In the event that this Agreement is
terminated for any reason other than a breach by BIW, BIW and its sublicensees
shall continue to have the right to (i) resell ATC Products and Components, (ii)
manufacture and have manufactured Products pursuant to existing Customer
contracts, (iii) sell Products to exhaust its inventory of Components, ATC
Products and Products in existence at the date of termination and to fulfill
obligations under any existing Customer contracts, and (iv) provide maintenance
and related services to Customers using the Technology, Components, ATC Products
and Products; and BIW shall continue to have the right to grant sublicenses
hereunder for the purpose of exercising its rights under this Section 4(b).
5
(c) EFFECT OF DEFAULT. In the event that either party defaults in the
performance of any of its material duties or obligations set forth in this
Agreement, and such default is not substantially cured within thirty (30) days
after written notice is given to the defaulting party specifying the default,
then the non-defaulting party may, by giving written notice thereof to the
defaulting party, terminate this Agreement as of the date specified in such
notice of termination.
(d) EFFECT OF BANKRUPTCY. Any licenses granted hereunder shall not be
affected by a voluntary filing for bankruptcy or insolvency regarding either
party, or an involuntary filing not dismissed within ninety (90) days, or any
adjudication that either party is bankrupt or insolvent, or by the filing of any
petition or answer seeking reorganization, readjustment, or arrangement of the
business of either party under any federal or state law relating to bankruptcy
or insolvency, or by the appointment of a receiver for all or substantially all
of the property of either party, or by the making by either party of any
assignment or attempted. assignment for the benefit of creditors, or by the
institution of any proceedings for the liquidation or winding up of either
party's business. ATC acknowledges that in the event a petition for bankruptcy
of ATC is filed under federal bankruptcy law and this Agreement is rejected in
the bankruptcy proceedings, BIW may elect to retain its license rights as this
Agreement is an executory contract protected under Section 11 U.S.C. Section
365(n).
(e) EFFECT OF TERMINATION. Upon the expiration or any termination of
this Agreement, the license granted hereunder to BIW shall terminate, except as
provided in Sections 2(e) and 4(b). BIW shall, except as provided hereunder,
thereupon cease and desist from making, having made, using, selling, and
distributing the Products, or using the Trademarks, and will likewise cease and
desist from any and all use of the Technology, including the proprietary rights
therein, subject to the rights granted to BIW in Sections 2(e) and 4(b), and BIW
shall have no further obligation hereunder. All proprietary information,
including Confidential Information, in whatever form, in the custody or control
of either party or any third-party contractor, bearing on the subject matter of
this Agreement or transferred incident to activities hereunder, shall be
returned to the disclosing party, or secured, or destroyed, as is reasonable in
each case in light of all circumstances, so as to enable the maintenance of
confidentiality with respect thereto, and preserve the value of the Confidential
Information to the parties.
5. PERMITTED ACTIVITIES.
(a) BIW'S ACTIVITIES. Nothing in this Agreement shall be construed to
prevent BIW from: (i) engaging in any activities with respect to products or
services competitive with those supplied by ATC or entering into agreements with
third parties having a similar purpose or similar terms to this Agreement; or
(ii) independently developing and/or selling any materials, products or services
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separately with the Commission
which are similar to those of ATC as long as they do not infringe on any
existing ATC patents or patents that issue from pending ATC applications and
they were not developed using any ATC Confidential Information; or (iii) using
data, processing, techniques, ideas, and other know-how gained during the
performance of this Agreement in the furtherance of its business, to the extent
such use does not conflict with the confidentiality provisions of this
Agreement.
(b) ATC'S PRICING. BIW recognizes that the Components, ATC Products and
Products targeted for the Applications herein are expected to be different in
quality and features than products that ATC has developed or may develop from
the Technologies for other markets and applications for consumers or industrial
customers or others. Except for the exclusivity relating to Applications,
Customers, Products, and ATC Products set forth herein, [***].
6. REPRESENTATIONS AND WARRANTIES.
(a) MUTUAL WARRANTIES. Each party to this Agreement represents and
warrants to the other party that: (i) such party has the full corporate right,
power and authority to enter into this Agreement and to perform all acts
required of it hereunder; (ii) the execution of this Agreement by such party,
and the performance by such party of its obligations and duties hereunder, do
not and will not violate any agreement to which such party is a party, or by
which it is otherwise bound; (iii) when executed and delivered by such party,
this Agreement will constitute the legal, valid and binding obligation of such
party, enforceable against such party in accordance with the terms and
conditions of this Agreement; (iv) it is not subject to any pending or
threatened litigation or governmental action that could materially interfere
with its performance of this Agreement; and (v) such party is in compliance with
and will comply with all applicable U.S. material laws, rules and regulations
with respect to its obligations under this Agreement. Neither party has been
induced to enter into this Agreement by any representations or promises not
specifically stated herein.
(b) INTELLECTUAL PROPERTY WARRANTY. ATC represents and warrants to BIW,
its sublicensees and Customers that the exercise by BIW, its sublicensees and
Customers of rights granted under this Agreement will not infringe upon any
patent, trademark, copyright, trade secret, or other intellectual property or
proprietary right of any third party.
(c) PRODUCT WARRANTY. ATC represents and warrants to BIW, its
sublicensees and Customers that the Components and ATC Products comply with the
highest industry standards and will be free from defects in materials and
workmanship for a period of one (1) year from the date of installation by BIW or
a sublicensee, or [***] from the date of shipment by ATC, whichever is earlier.
If a defect exists, ATC will (i) repair the defective item at no charge, using
new replacement parts or, if not prohibited under a government contract or by
law, refurbished replacement parts, (ii) exchange the item with an item that is
new or which has been manufactured from new or, if not prohibited under a
government contract or by law, serviceable used parts and is at least
functionally equivalent to the original item, or (iii) reimburse the total
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separately with the Commission
amount paid for the defective item. A replacement or repaired item shall be
warranted for the remainder of the warranty period or [***] from the date the
replacement or repaired item is shipped from ATC, whichever provides longer
coverage. BIW, its sublicensee or a Customer (as applicable) shall deliver the
defective item, at its expense, to ATC at the address first written above. The
parties agree and acknowledge that BIW, its sublicensee or a Customer (as
applicable) shall be responsible for all loss or damage during shipment of an
item by them pursuant to this paragraph. Repaired or replaced items will be
shipped to BIW, its sublicensee or a Customer (as applicable) via the same
shipping method as they were received by ATC, at ATC's expense and risk of loss.
(d) AUTHORIZED WARRANTIES. No agent, employee, or representative of BIW
has any authority to bind ATC to any affirmation, representation, or warranty
concerning the Components or the Products, unless such affirmation,
representation, or warranty is specifically included in this Agreement or in
another document generated by ATC which expressly authorizes BIW to make
specified warranties. Any unauthorized affirmation, representation, or warranty
shall not be enforceable by BIW or any subsequent buyer of any Components or
Products. BIW shall be liable for any representations or warranties made by it,
whether in writing or orally, other than those made by ATC herein, unless it
receives written approval from ATC.
7. INTELLECTUAL PROPERTY ENFORCEMENT. Each of BIW and ATC shall notify
the other party in writing of any suspected or known infringement or
misappropriation of the Technology by a third party, and shall inform the other
party of any evidence in their possession of such infringement or
misappropriation, and provide details to the extent known of such infringement.
(a) ACTION BY ATC. ATC shall have the option but not the obligation to
take such measures as may be required to terminate any infringement or
misappropriation by a third party. Any such action shall be at the sole expense
of ATC. ATC shall be entitled to all damages and settlement proceeds from third
parties resulting from any such proceeding. BIW shall provide any assistance
reasonably requested by ATC in the preparation and prosecution of that claim, at
the expense of ATC.
(b) ACTION BY BIW. Should ATC decide to not pursue a Claim, as defined
in Section 9(a), against a third party for misappropriation or infringement
under Section 7(a), BIW shall be entitled to pursue such Claim. Any such Claim
shall be at the sole expense of BIW. BIW shall be entitled to all damages and
settlement proceeds from any third parties resulting from any such Claim. ATC
shall provide any assistance reasonably requested by BIW in the preparation and
prosecution of that Claim, at the expense of BIW.
(c) JOINDER BY ATC. At its sole option, ATC may join as plaintiff in
any action brought to enforce a Claim by BIW brought pursuant to Section 7(b)
with respect to the Technologies. In such event, the parties shall share equally
the expenses of any such action. Each party shall be entitled to one-half of all
damages and settlement proceeds recovered after first reimbursing each party for
any amounts expended by them in the prosecution of such Claim.
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separately with the Commission
(d) SETTLEMENT. The settlement of any Claim involving any consent or
agreement allowing any third party any rights with respect to the intellectual
property of ATC shall require the prior written consent of ATC.
8. LIMITATION OF LIABILITY.
(a) MUTUAL LIMITATION OF LIABILITY. UNDER NO CIRCUMSTANCES WILL EITHER
PARTY, ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR CUSTOMERS BE LIABLE TO
THE OTHER PARTY, ITS AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES OR CUSTOMERS FOR
ANY CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES OR LOST
PROFITS, WHETHER FORESEEABLE OR UNFORESEEABLE, ARISING OUT OF BREACH OF
CONTRACT, MISREPRESENTATION, NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE,
EVEN IF THE PARTY HAS PREVIOUSLY BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. THIS EXCLUSION AND LIMITATION SHALL BE EFFECTIVE TO HE EXTENT PERMITTED
BY APPLICABLE LAW.
(b) LIMITATION OF PRODUCT WARRANTY LIABILITY. THE PRODUCT WARRANTY AND
REMEDIES SET FORTH ABOVE ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES,
REMEDIES AND CONDITIONS, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, REGARDING
PRODUCT MATERIALS AND WORKMANSHIP. ATC SPECIFICALLY DISCLAIMS ANY AND ALL
IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE. IF ATC CANNOT LAWFULLY DISCLAIM IMPLIED
WARRANTIES, ALL SUCH WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, ARE LIMITED IN DURATION TO THE DURATION OF THE
PRODUCT WARRANTY. NO ATC LICENSEE, DISTRIBUTOR, RETAILER, INSTALLER, OR EMPLOYEE
IS AUTHORIZED TO MAKE ANY MODIFICATION, EXTENSION, OR ADDITION TO THE PRODUCT
WARRANTY. ATC SHALL NOT BE LIABLE FOR, NOR SHALL THE PRODUCT WARRANTY INCLUDE OR
APPLY TO, LOSS OR DAMAGE CAUSED BY OR RESULTING FROM ANY OF THE FOLLOWING: (i)
IMPROPER INSTALLATION OF THE PRODUCT OR THE FAILURE BY A PARTY OTHER THAN ATC TO
INSTALL THE PRODUCT IN STRICT COMPLIANCE WITH ATC'S SPECIFICATIONS; (ii)
IMPROPER OPERATION OR USE OF THE PRODUCT; (iii) USE OF THE PRODUCT BEYOND ITS
RATED CAPACITY OR SPECIFICATIONS; (iv) IMPROPER OR UNAUTHORIZED MODIFICATION,
ALTERATION OR REPAIR; (v) A FORCE MAJEURE EVENT (AS DEFINED BELOW); OR (vi) THE
ENFORCEMENT OF ANY LAW OR ORDINANCE REGULATING USE OF THE PRODUCT, EXCEPT FOR
ANY LAW OR ORDINANCE IN EFFECT AS OF THE EFFECTIVE DATE. For purposes of this
Section 8(b), BIW shall be considered an authorized agent of ATC.
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separately with the Commission
9. INDEMNITY.
(a) INTELLECTUAL PROPERTY INDEMNITY BY ATC. ATC shall defend, hold
harmless, and indemnify BIW, its Affiliates, its sublicensees and their
respective employees, directors, officers, contractors, subcontractors,
customers, attorneys, partners and agents ("BIW Indemnitees") from and against
any and all damages, judgments, liabilities, payments made in settlement, costs,
and expenses, including reasonable attorneys' fees (collectively, "Losses") for
claims, actions or proceedings ("Claims") arising out of ATC's breach of any
warranty set forth in this Agreement or alleging that BIW Indemnitees' use of a
Product, ATC Product, Component or any of the Technologies infringes or violates
any patent, copyright, trade secret, license, or other intellectual property
right of any third party, provided that a BIW Indemnitee promptly notifies ATC
of any such Claim. ATC shall have control over the defense or settlement of such
Claim, except that BIW Indemnitees may participate in the defense of any such
suit or proceeding through counsel of their choice and at their expense. The BIW
Indemnitees shall provide ATC such reasonable assistance as ATC may require, at
ATC's expense, in defending or settling such Claim. In the event that a Product,
ATC Product, Component or any of the Technologies, or any portion thereof, is
held to constitute an infringement and its use is enjoined, ATC may, at its
option and expense, (i) modify the infringing Product, ATC Product, Component or
Technology so that it or they are non-infringing, (ii) procure for BIW the right
to continue to use the infringing Product, ATC Product, Component or Technology,
or (iii) replace the Product, ATC Product, Component or Technology with
functionally equivalent, non-infringing replacement products or technologies.
Notwithstanding the foregoing, this indemnification shall not apply if the
claimed infringement is attributable solely to a BIW Indemnitee's use of the
Product, ATC Product, Component or Technology in combination with other products
such that the Product, ATC Product, Component or Technology would not be
infringing apart from its use in the combination, or if such Claim arises from
ATC's compliance with BIW's designs, specifications or instructions, or from
BIW's or a sublicensee's modification of the Product, ATC Product, Component or
Technology and, in both instances, the Claim could not be brought but for
compliance with BIW's designs, specifications or instructions or the
modification by BIW or the sublicensee.
(b) GENERAL INDEMNITY BY ATC. ATC shall defend, hold harmless, and
indemnify the BIW Indemnitees from and against any and all Losses (including,
but not limited to, damages for injury to or death of employees or other
individuals or destruction of property) arising directly or indirectly from or
in connection with any breach of this Agreement, negligence, gross negligence or
willful misconduct by ATC or its agent, provided that a BIW Indemnitee promptly
notifies ATC of any such Claim. ATC shall have control over the defense or
settlement of such Claim, except that BIW Indemnitees may participate in the
defense of any such suit or proceeding through counsel of their choice and at
their expense. The BIW Indemnitees shall provide ATC such reasonable assistance
as ATC may require, at ATC's expense, in defending or settling such Claim.
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separately with the Commission
(c) GENERAL INDEMNITY BY BIW. BIW agrees to defend, hold harmless and
indemnify, at its sole expense, ATC and its Affiliates and their employees,
directors, officers, contractors, subcontractors, attorneys, partners, agents,
successors and assigns ("ATC Indemnitees") from and against any and all Losses
(including, but not limited to, damages for injury to or death of employees or
other individuals or destruction of property) arising directly or indirectly
from or in connection with (i) the incorporation of any Components into products
by BIW or a sublicensee if such Claim could not have arisen but for such
incorporation, (ii) any breach of this Agreement by BIW, and (iii) negligence,
gross negligence or willful misconduct by BIW or its sublicensees, provided that
an ATC Indemnitee promptly notifies BIW of any such Claim. BIW shall have
control over the defense or settlement of such Claim, except that ATC may
participate in the defense of any such Claim through counsel of its choice and
at its own expense. The ATC indemnitees shall provide BIW such assistance as BIW
may require, at BIW's expense, in defending or settling such Claim. The parties
agree and acknowledge that BIW shall under no circumstances defend, hold
harmless or indemnify any ATC Indemnitee hereunder for a Claim arising out of or
related to a breach of this Agreement, negligence, gross negligence or willful
misconduct on the part of ATC or its agent, or arising out of any warranty or
indemnity obligations of ATC.
10. CONFIDENTIALITY.
(a) NONDISCLOSURE. Each party agrees to protect the confidentiality of
any information concerning the other party, the other party's customers
(including without limitation Customer information provided to ATC by BIW under
Section 2(d)), trade secrets, business methods, processes, or procedures, or
other information learned during the course of performance under this Agreement
and marked "Confidential," and any information transferred incident to any prior
non-disclosure agreement between the parties, including without limitation the
non-disclosure agreement dated March 22, 2002 (collectively, the "Confidential
Information"), with the same degree of care that it regularly uses to protect
its own similar confidential information, and to use the other party's
Confidential Information solely for the purpose of carrying out this Agreement.
The parties agree and acknowledge that each has received Confidential
Information from the other in expectation of entering into this Agreement. If
the party receiving Confidential Information from the other is required by any
governmental authority (other than a Customer in connection with BIW's sale of
Products or ATC Products) or court order to disclose the disclosing party's
Confidential Information to a third party, the receiving party shall promptly
advise the disclosing party of the requirement or order to permit the disclosing
party the opportunity to object and/or seek other relief.
(b) EXCEPTIONS. With reference to Section 10(a), Confidential
Information shall not include: (i) information that becomes generally known to
the public other than as a result of breach of this Agreement; (ii) information
that a party can show through written documentation was known to it prior to
such party receiving such information in connection with this Agreement; (iii)
information a party lawfully receives from a third party without any restriction
or obligation of confidentiality with respect to such information; (iv)
information that was developed or obtained independently of and without
connection to this Agreement; and (v) a first party's information that a first
party discloses to a third party without any obligation to maintain the
confidentiality of the disclosed information.
11
***Confidential Portions of this document have been redacted and filed
separately with the Commission
(c) OBLIGATIONS UPON TERMINATION. Except as necessary for BIW and its
sublicensees to exercise their rights and fulfill their obligations as set forth
in Section 4(b) of this Agreement, and excluding any Confidential Information
included in a contractual deliverable to a Customer, all Confidential
Information, in whatever form, in the custody or control of a receiving party or
any third-party contractor, transferred incident to activities under this
Agreement or under any predecessor agreement between the parties, including
without limitation the non-disclosure agreement dated March 22, 2002, shall be
returned to the disclosing party or secured or destroyed, at the disclosing
party's option, upon the termination or expiration of this Agreement.
11. AUDIT RIGHTS. BIW shall maintain records for two (2) years
following the date of the payments to which such records pertain, sufficient to
allow verification of compliance with the terms of this Agreement and the
accuracy of payments made by BIW to ATC hereunder. An independent auditor
mutually agreeable to ATC and BIW shall be permitted, [***], to audit such
records during normal business hours upon fourteen (14) days prior written
notice. Such audit shall be subject to the confidentiality terms of this
Agreement. [***] shall bear the cost and expense of such audit, [***]. BIW shall
promptly pay ATC all underpayments; provided, however that BIW shall have no
obligations to pay any such underpayments to ATC which BIW in good faith
believes are not properly owed, provided that the issue of whether any such
purported underpayment is owed is the subject of a pending dispute resolution
procedure as provided by Section 14(k).
12. NONSOLICIT. Neither party shall recruit or solicit employees or
independent contractors of the other party until [***] after the end of the Term
of this Agreement without the advance written consent of the other party.
13. GENERAL.
(a) SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
(b) FORCE MAJEURE. Neither Party shall be liable or deemed to be in
default for any delay, interruption, or failure in performance under this
Agreement resulting from the following events: acts of God, acts of civil or
military authority; acts of the public enemy; war; accidents, fires, explosions,
power surges, earthquakes, floods, or unusually severe weather; strikes or labor
disputes; delays in transportation or delivery outside the reasonable control of
the affected party; epidemics; and any similar event beyond the affected party's
reasonable control ("Force Majeure Event"). The party whose performance is
affected by a Force Majeure Event will use reasonable efforts to avoid, remove
or minimize the impact of such event on the performance of its obligations at
the required level at the earliest possible date. If either party is, or
anticipates it is likely to be, delayed or prevented from performing its
obligations in connection with a Force Majeure Event, such party will notify the
other party within ten (10) business days after such party first becomes aware
of such Force Majeure Event.
12
***Confidential Portions of this document have been redacted and filed
separately with the Commission
(c) NO AGENCY. The relationship between ATC and BIW is only that of
independent contractors. Nothing in this Agreement shall be construed or
interpreted as creating an agency, joint venture, or partnership relationship
between the parties. Neither party shall have, nor shall it hold itself out as
having any right, power, or authority to create any contract or obligation,
either express or implied, on behalf of, in the name of, or binding upon the
other party or to pledge the other party's credit, or to extend credit in the
other party's name unless that party consents thereto in advance in writing. BIW
may appoint or otherwise designate suitable sales representatives, employees,
and agents ("Representatives") to perform BIW's obligations. BIW shall be solely
responsible for its Representatives and their acts.
(d) PUBLIC RELEASES. Except as provided in Section 2(f) of this
Agreement or as required by law or regulation, neither party may use the
trademarks or trade names of the other party or issue a news release, public
announcement, advertisement, or other form of publicity concerning the existence
of this Agreement or the services to be provided under this Agreement without
obtaining prior written approval from the other party.
(e) ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns. Except as expressly permitted by this Agreement, neither party shall
assign, sublicense, delegate, or transfer any of its rights or obligations
hereunder without the prior written consent of the other party. Provided,
however, that both parties shall be allowed to assign this Agreement without the
other's consent to an Affiliate or as part of any reorganization or purchase of
substantially all of the assets of or ownership interest in, the assigning
party. This Agreement shall be binding upon, and inure to the benefit of, each
party and its respective successors and permitted assigns.
(f) WAIVER. The failure of either party to insist upon the performance
of any provision herein or to exercise any right or privilege granted to it
hereunder, shall not be construed as a waiver of such provision or any
provisions herein, and the same shall continue in full force. The various rights
and remedies given to or reserved by either party herein or allowed by law,
shall be cumulative, and no delay or omission to exercise any of its rights
shall be construed as a waiver of any default or acquiescence, nor shall any
waiver of any breach of any provision be considered the condoning of any
continuing or subsequent breach of the same provision.
(g) AMENDMENTS, MODIFICATIONS AND SUPPLEMENTS. Any amendment,
modification, supplement or change hereto must be in writing and signed by the
parties hereto. No other act, document, usage or custom shall be deemed to amend
or modify this Agreement.
13
(h) GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the state of New York without giving effect to
conflict-of-laws principles thereof. Each party consents to the personal
jurisdiction in the state and federal courts in the state of New York and agrees
not to commence any actions arising out of or relating to this Agreement in any
other state.
(i) NOTICES. All notices required to be sent hereunder shall be in
writing and shall be deemed to have been given on: (i) the, date sent by
confirmed facsimile, (ii) the date it was delivered by courier, or (iii) if by
certified mail return receipt requested, the date received, to the addresses and
to the attention of the persons set forth below, or to such other address or
individual as the parties may specify from time to time by written notice to the
other party:
------------------------------ -----------------------------------------
If to ATC: American Technology Corporation
Attention: Xxxxx Xxxxxx
00000 Xxxxxxx Xxxxx Xxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Phone: (000) 000-0000 Fax: (000) 000-0000
------------------------------ -----------------------------------------
With a copy to:
------------------------------ -----------------------------------------
If to BIW Xxxxx Xxxxxxxxxxx
Vice President, Surface Ship Support and
Advanced Technology
Bath Iron Works Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxx, XX 00000
Phone: (000) 000-0000 Fax: (000) 000-0000
------------------------------ ---------------------------------------------
With a copy to General Counsel
Bath Iron Works Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxx, XX 00000
Phone: (000) 000-0000 Fax: (000) 000-0000
------------------------------ ---------------------------------------------
(j) COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same document. The exchange of a fully
executed Agreement (in counterparts or otherwise) by facsimile shall be
sufficient to bind the parties to the terms and conditions of this Agreement.
(k) ARBITRATION. Except with respect to claims regarding a breach of
obligations related to Confidential Information or infringement of intellectual
property rights, including without limitation the right of a party to apply to a
court of competent jurisdiction for a temporary restraining order, preliminary
injunction or other equitable relief to preserve the status quo or to prevent
irreparable harm, all claims, disputes, controversies, or other matters in
question arising out of or relating to this Agreement that cannot be resolved by
14
***Confidential Portions of this document have been redacted and filed
separately with the Commission
the parties through face-to-face negotiations, first between the respective
manager for each party involved in the day-to-day performance of this Agreement,
and then, if still not resolved, between senior executives of each party, will
be settled by binding arbitration in accordance with the Commercial Rules
("Rules") of the American Arbitration Association then in effect. All
arbitration proceedings will be held in New York, New York, and will be
conducted by a single arbitrator mutually agreed upon by the parties, provided,
however, that in the event the parties cannot agree on an arbitrator, each party
shall choose one arbitrator and the two arbitrators shall choose a third
arbitrator and the arbitration proceedings shall be conducted by the foregoing
panel of three arbitrators. If the two initial arbitrators cannot agree upon a
third arbitrator within ten days after the appointment of the second arbitrator,
the third arbitrator shall be selected in accordance with the Rules. The parties
may take discovery by any means allowed by the Federal Rules of Civil Procedure
then in effect. The arbitrator may exclude from evidence any evidence not
previously shared with the other side. The cost of any arbitration or litigation
will be borne equally by the parties pending the arbitrator's awards. The
prevailing party in any arbitration proceeding or litigation hereunder will be
entitled, in addition to any other relief granted to it, to recover reasonable
attorneys' fees and the costs incurred in connection with the arbitration or
litigation. The arbitrator shall be bound by the express provisions set forth in
this Agreement and by the substantive law of the courts of New York that relate
to any controversy arising from this Agreement, and shall not modify any terms
of this Agreement or make any award of damages in excess of the amounts set
forth in this Agreement or grant any relief not expressly set forth in this
Agreement. The determinations of the arbitrator shall be final and, except as
provided by law, shall not be subject to judicial review. Any court of competent
jurisdiction may enforce any award or determination rendered by the arbitrator.
(l) HEADINGS. The headings and sub-headings included in this Agreement
are for convenience only and do not in any way alter or affect the terms of this
Agreement.
(m) ENTIRE AGREEMENT. This Agreement, together with any exhibits and
any attachments hereto, sets forth the entire agreement of the parties with
respect to the subject matter hereof, and supersedes any prior agreement or
understandings, including without limitation the non-disclosure agreement
between the parties dated March 22, 2002. If any provision hereof is held to be
invalid, void, or unenforceable, the remainder of the provisions shall
nevertheless remain unimpaired and in effect.
(n) SURVIVAL. The following Sections of this Agreement shall survive
the expiration or any termination of this Agreement: 2(e), 4(a), 4(b), 4(e),
6(a), 6(b), 6(c), 6(d), 8(a), 8(b), 9(a), 9(b), 9(c), 10(a), 10(b), 19(c), 11
and 12.
15
***Confidential Portions of this document have been redacted and filed
separately with the Commission
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective duly authorized representative
effective on the date and year first written above.
AMERICAN TECHNOLOGY CORPORATION
By: /S/ XXXXX XXXXXX
--------------------------------
Name: Xxxxx Xxxxxx
Title: President
BATH IRON WORKS CORPORATION
By: /S/ XXXXX X. X'XXXX
--------------------------------
Name: Xxxxx X. X'Xxxx
Title: Director, Contracts/Estimating
16
***Confidential Portions of this document have been redacted and filed
separately with the Commission
ATTACHMENT A
------------
LISTING OF TECHNOLOGIES, CUSTOMERS AND APPLICATIONS
TECHNOLOGIES
------------
o NeoPlanar(R)technology as characterized by the [***] installation
CUSTOMERS
---------
DoD including:
o US Army
o US Navy
o US Marine Corps
o US Air Force
o SOCOM
o DARPA
o DTRA
o National Laboratories (Sandia, Livermore, etc.)
Dept. of Homeland Security including: o US Coast Guard
o Immigration and Naturalization Service / Border Patrol
o Customs Service
o Federal Protective Services
o Transportation Security Agency
Other Federal, State and Local Agencies / organizations / entities
o National Guard
o Embassies
o Federal and State Prisons
o DOE/U.S. Power Plants
o DEA
o CIA
o Federal, state and local law enforcement agencies
17
***Confidential Portions of this document have been redacted and filed
separately with the Commission
ATTACHMENT A
------------
LISTING OF CUSTOMERS AND APPLICATIONS (CONTINUED)
APPLICATIONS - COMMUNICATIONS
-----------------------------
o Shipboard communications, interior & exterior
o Submarine communications, interior & exterior
o Wheeled and tracked vehicles interior communications systems
o Hanger facilities (land and ship based)
o USAF cargo aircraft interior communications
o US Army / USMC forts / camps outdoor communications
o USN shipyard outdoor communications
o US Army / USMC / US Navy semi-covert voice communications
o US Army / USMC tunnel communications
o Specialized communications in Combat Information Centers (multi-branch
applications)
o Electronic Sentry System applications o Man-mobile, manned and
unmanned vehicle, or fixed installations / applications
18
***Confidential Portions of this document have been redacted and filed
separately with the Commission
ATTACHMENT B
------------
ATC PRODUCTS LIST PRICES (AS OF SEPTEMBER 1, 2002)*
---------------------------------------------------
MILITARY LONGSPEAKER (CONSISTING OF 9-24" TRANSDUCERS WITHOUT INTERNAL
----------------------------------------------------------------------
AMPLIFIER)--FINISHED UNIT
-------------------------
[***]
FUTURE PRODUCTS
---------------
[***]
*BIW, its Affiliates and sublicensees can purchase these Products for their
internal use [***]
COMPONENTS LIST PRICES (AS OF SEPTEMBER 1. 2002)**
--------------------------------------------------
NEOPLANAR(R) TRANSDUCER COMPONENTS
---------------------------------
[***]
** BIW, its Affiliates and sublicensees can purchase Products and Components for
their internal use [***]. This shall also apply to future products using
Components that BIW, its Affiliates and sublicensees purchase for internal use.
For purposes of this Attachment B, [***].
ATC may add ATC Products and/or Components to this Attachment B from time to
time.
19
***Confidential Portions of this document have been redacted and filed
separately with the Commission
ATTACHMENT C
------------
FORECAST OF REVENUE TO ATC
YEAR 1 (Year 1 shall be October 1, 2002, through the day before the first
anniversary of the Effective Date)
[***]
YEAR 2
Year two financial forecast-- [***] to ATC
YEARS 3--5
[***]
For purposes of this Attachment C, [***] shall be established pursuant to
Section 2(i).
20
