EXCLUSIVE LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is made and is
effective as of the day of , 1997, (hereinafter known as the
"Effective Date") by and between RUTGERS, THE STATE UNIVERSITY OF
NEW JERSEY, having its statewide Office of Corporate Liaison and
Technology Transfer at X.X. Xxx 0000, ASB Xxxxx XX, Xxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000, (hereinafter referred to as
"Rutgers"), and U.S. Plastics Lumber Corp., a Florida corporation
having a principal place of business at 0000 X. Xxxxxx Xx., Xxxxx
000, Xxxx Xxxxx, XX 00000 (hereinafter referred to as "Licensee").
RECITALS
WHEREAS, Certain inventions disclosed under Rutgers' Case No.
00-0000-0, generally characterized as "Composite Building Material
From Recycled Waste," hereinafter collectively referred to as the
"Invention," were made in the course of research at Rutgers, The
State University of New Jersey by Drs. Xxxxxxx Xxxxxxx and Xxx
Xxxxxx (hereinafter, "Inventors"); and
WHEREAS, Licensee entered into Secrecy and an Option
Agreement with Rutgers effective November 18, 1996 and June 30,
1996, respectively, and terminating on and December 31, 1997 and
January 31, 1997, respectively, for the purpose of evaluating the
Invention; and
WHEREAS, Licensee is a "small business firm" as defined in 15
U.S.C. 632; and
WHEREAS, Licensee wishes to obtain certain rights from Rutgers
for the commercial development, manufacture, use, and sale of the
Invention, and Rutgers is willing to grant such rights on the terms
and conditions set forth in this Agreement; and
WHEREAS, Licensee's early access to Rutgers' Technology prior
to the effective date of this Agreement provides the consideration
for Licensee's continuing royalty obligation for use of Rutgers
Technology; and
WHEREAS, Both parties recognize and agree that royalties due
hereunder will be paid on both pending patent applications and
issued patents, as well as on Rutgers' Technology as hereafter
defined; and
WHEREAS, Rutgers is desirous that the Invention be developed
and utilized to the fullest extent so that the benefits can be
enjoyed by the general public.
NOW THEREFORE, the parties agree as follows:
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1. DEFINITIONS
1.1 "Affiliate" means (i) any corporation or business entity
that directly or indirectly controls, is controlled by, or is under
common control with Licensee to the extent of at least fifty
percent (50%) of the outstanding stock or other voting rights
entitled to elect directors and (ii) any joint venture in which
Licensee or an Affiliate participates which markets Licensed
Products.
1.2 "Data" means all information acquired by Licensee, its
Affiliates or its sublicensees directly or indirectly from or
through Rutgers, its units, its employees, the Inventors, or its
consultants relating to the Invention, Licensed Products, on this
Agreement, including but not limited to all Rutgers Technology, all
patent prosecution documents, and all information received from
Inventors.
1.3 "Licensed Field" shall mean the use of the Invention for
plastic railroad ties, marine pilings, highway spacer blocks,
highway guard rails, and building materials.
1.4 "Second Field" shall mean the use of the Invention for
sports equipment, and other non-building products, but excluding
telephone poles and light poles.
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1. 5 "Licensed Method" means any process, method, or use
that is covered by Rutgers' Patent Rights or whose use or practice
would constitute, but for the license granted to Licensee pursuant
to this Agreement, an infringement of any issued or pending claim
within Rutgers' Patent Rights.
1.6 "Licensed Product" means any material or product or kit,
or any service, process, or procedure that (1) either is covered by
Rutgers' Patent Rights or whose manufacture, use, or sale would
constitute, but for the license granted to Licensee pursuant to
this Agreement, an infringement of any claim within Rutgers' Patent
Rights or (2) is developed, made, sold, registered, or practiced
using Rutgers' Technology or Licensed,Method or which may be used
to practice the Licensed Method, in whole or in part.
1.7 "Major Market countries" shall mean Canada, France,
Germany, Italy, Japan, Mexico, and the United Kingdom.
1.8 "Net Sales" means the total of the gross consideration
received for Licensed Products made, used, leased, transferred,
sold or otherwise disposed of by Licensee, its Affiliates, and its
sublicensees, at arms-length prices, less the sum of the following
actual and customary deductions (net of rebates or allowances of
such deductions received) included on the invoice and actually
paid: returns, bad debts not to exceed 5% of the Net Sales
annually, cash, trade, or quantity discounts; sales or use taxes
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imposed upon particular sales; import/export duties; and
transportation charges.
A Licensed Product shall be deemed made, used, leased,
transferred, sold, or otherwise disposed of at the time Licensee
bills, invoices, ships, or receives payment for such Licensed
Product, whichever occurs first.
1.9 "Research Agreement" means the research agreement
executed between Licensee and Rutgers which funds further research
in the field of Rutgers' Patent Rights.
1.10 "Rutgers Patent Rights" means U.S. Patent Application
Number 08/704,889 and foreign patents and patent applications
corresponding thereto owned by Rutgers, including any reissues,
extensions, substitutions, divisions, continuations not including
continuations-in-part thereof.
1.11 "Rutgers' Technology" means all information, and physical
objects related to the Invention or to Licensed Product, in the
field of use licensed hereunder, (other than Rutgers' Patent
Rights), including but not limited to formulations, data, drawings
and sketches, designs, testing and test results, regulatory
information of a like nature, whether patentable or not, owned or
controlled by Rutgers, which Rutgers has the right to disclose and
license to third parties and which arose in the Inventors
laboratories under the direction of one or more of the Inventors
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prior to the Effective Date of this Agreement or arises hereafter
under the Research Agreement.
1.12 "Territory" shall mean all countries of the world in
which Rutgers has intellectual property rights, subject to any
exclusions provided in this Agreement.
2. GRANT
2.1 Subject to the limitations set forth in this Agreement,
Rutgers hereby grants to Licensee an exclusive license in the
Licensed Field under Rutgers' Patent Rights and Rutgers' Technology
to make, have made, use, and sell Licensed Products and to practice
Licensed Method in the Territory during the term of this Agreement.
2.2 Subject to the limitations set forth in this Agreement,
Rutgers hereby grants to Licensee a nonexclusive license in the
Second Field under Rutgers' Patent Rights and Rutgers' Technology
to make, have made, use, and sell Licensed Products and to practice
Licensed Method in the Territory during the term of this Agreement.
2.3 If the Invention was funded by the U.S. Government, the
license granted hereunder shall be subject to the overriding
obligations to the U.S. Government set forth in 35 U.S.C. 200-212
and applicable governmental implementing regulations and to the
licenses granted to the U.S. Government that are referred to in the
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Recitals.
2.4 Rutgers expressly reserves the right to use the
Invention, Rutgers' Patent Rights, Rutgers' Technology, Licensed
Products, Licensed Methods, and associated information and
technology for educational, research and other non-business
purposes and to publish the results thereof.
2.5 Rutgers', principally through the Inventors, has provided
Rutgers Technology to Licensee. It is understood that at the time
of disclosure to the Licensee some of the Rutgers' Technology may
have been made available to the public or to Licensee without
restrictions.
3. SUBLICENSES
3.1 Rutgers grants to Licensee the right to grant sublicenses
to third parties under the licenses granted in Article 2.1,
provided Licensee has current exclusive rights thereto under this
Agreement. To the extent applicable, such sublicenses shall
include all of the rights of and obligations due to Rutgers (and,
if applicable, to the United States Government) that are contained
in this Agreement.
3.2 Within thirty (30) days after execution thereof, Licensee
shall provide Rutgers with a copy of each sublicense issued
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hereunder, and shall thereafter collect and guarantee payment of
all royalties due Rutgers from sublicensees and summarize and
deliver all reports due Rutgers from sublicensees.
3.3 Upon termination of this Agreement for any reason,
Rutgers, at its sole discretion, shall determine whether any or all
sublicenses shall be canceled or assigned to Rutgers.
4. LICENSE ISSUE FEE, LICENSE MAINTENANCE FEES
AND MILESTONE PAYMENTS
4.1 Licensee agrees to pay to Rutgers a License Issue Fee of
Ten Thousand Dollars ($10,000) and 187,500 shares of Licensee's
common stock within thirty (30) days after the execution of this
Agreement. This consideration is non-refundable and is not an
advance against royalties.
4.2 Licensee agrees to pay to Rutgers a License Maintenance
Fee of Five Thousand Dollars ($5,000)on the first anniversary of
the Effective Date in 1998, Ten Thousand Dollars ($10,000) on the
second anniversary date of the Effective Date in 1999, and Ten
Thousand Dollars ($10,000) continuing annually on the anniversary
of the Effective Date of each subsequent year. The License
Maintenance Fee shall not be payable on any due date if on said
date Licensee is commercially selling Licensed Product and paying
an earned royalty to Rutgers on the sales of Licensed Product. The
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License Maintenance Fee is non-refundable and is not an advance
against royalties.
4.4 Licensee shall pay to Rutgers a portion of all nonroyalty
consideration received by Licensee from sublicensing or
transferring the rights licensed to Licensee hereunder, and shall
pay or cause its shareholders to pay to Rutgers a portion of all
consideration, received from sale of Licensee or its Affiliates,
attributable to the rights granted to Licensee hereunder according
to the following schedule:
Cumulative Consideration Percentage to Rutgers
Received by Licensee
$0 to $2 Million 10%
>$2 Million $4 Million 25%
>$4 Million 40%
5. ROYALTIES
5.1 Except as otherwise required by law, Licensee shall pay
to Rutgers a running royalty of three percent (3%) of Net Sales
during the term of this Agreement. Sales among Licensee, its
Affiliates and its sublicensees for ultimate third party use shall
be disregarded for purposes of computing royalties. Royalties
shall be payable only upon sales or transfers between unrelated
third parties and shall be based on arms length consideration.
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5.2 Royalties payable to Rutgers shall be paid to Rutgers quarterly
on or before the following dates of each calendar year:
February 28 May 31
August 31 November 30
Each such payment will be for unpaid royalties that accrued within
Licensee's most recently completed calendar quarter.
5.3 Licensee shall pay to Rutgers a minimum annual royalty equal to
the amount set forth on the following schedule:
Year of Commercial Marketing Minimum Royalty
1 $25,000
2 $40,000
3 and thereafter $60,000
for the term of this Agreement beginning with the date of first commercial
sale of Licensed Product. This minimum annual royalty shall be paid to
Rutgers by February 28 of each year and shall be credited against the
earned royalty due and owing for the calendar year in which the minimum
annual royalty is paid. The first year's minimum annual royalty shall be
prorated by the fractional number of full months remaining in that
calendar year and shall be paid within forty-five days (45) of the date of
first commercial sale of a Licensed Product.
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5.4 All amounts due Rutgers shall be payable in United States
Dollars in New Brunswick, New Jersey. When Licensed Products are
sold for monies other than United States Dollars, the earned
royalties will first be determined in the foreign currency of the
country in which such Licensed Products were sold and then
converted into equivalent United States Dollars. The exchange rate
will be the United States Dollar buying rate quoted in the Wall
Street Journal on the last day of the reporting period.
5.5 Licensee shall be responsible for any and all taxes,
fees, or other charges imposed by the government of any country
outside the United States on the remittance of royalty income for
sales occurring in any such country. Licensee shall also be
responsible for all bank transfer charges.
5.6 If at any time legal restrictions prevent the acquisition
or prompt remittance of United States Dollars by Licensee with
respect to any country where a Licensed Product is sold, Licensee
shall pay royalties due to Rutgers from Licensee's other sources of
United States Dollars.
5.7 In the event that any patent or any claim thereof
included within the Rutgers' Patent Rights shall be held invalid in
a final decision by a court of competent jurisdiction and last-
resort in any country and from which no appeal has or can be taken,
all obligation to pay royalties based on such patent or claim or
any claim patentably indistinct therefrom shall cease as of the
date of such final decision with respect to such country. Licensee
shall not, however, be relieved from paying any royalties that
accrued before such decision or that are based on another patent or
claim not involved in such decision, or that are based on Rutgers'
Technology.
5.8 In the event that a patent application is made for
Letters Patent, but no patent issues under Rutgers' Patent Rights
as described in 5.7 above, Licensee's royalty due hereunder shall
be reduced to one-half of one percent (.5%) of Net Sales during the
term of this Agreement. Sales among Licensee, its Affiliates and
its sublicensees for ultimate third party use shall be disregarded
for purposes of computing royalties. Royalties shall be payable
only upon sales or transfers between unrelated third parties and
shall be based on arms length consideration. Royalties due herein
shall continue for a time period that ends at 17 years from the
Effective Date of this Agreement.
5.9 If a license to the Invention has been granted to the
United States Government, no royalties shall be payable hereunder
on Licensed Products sold to the U.S. Government. Licensee and its
sublicensees shall reduce the amount charged for Licensed Products
sold to the United States Government by an amount equal to the
royalty for such Licensed Products otherwise due Rutgers as
provided herein.
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6. DILIGENCE
6.1 Licensee, upon execution of this Agreement, shall use its
best efforts to endeavor to develop, test, obtain regulatory
approval, manufacture, market and sell Licensed Products in all
countries of the Territory and shall use its best efforts to
market the same within a reasonable time after execution of this
Agreement and in quantities sufficient to meet the market demands
therefor.
6.2 Licensee shall be entitled to exercise prudent and
reasonable business judgment in meeting its diligence obligations
hereunder.
6.3 Licensee shall use all reasonable efforts to obtain all
necessary governmental approvals for the manufacture, use and
sale of Licensed Products.
6.4 If Licensee fails to complete the following milestones
as described below, then Rutgers shall have the right and option
upon sixty (60) days' written notice, either to terminate this
Agreement with respect to any countries where Licensee has failed
to perform or to reduce Licensee's exclusive license to a
nonexclusive license in such countries:
a. Execute the Research Agreement in the amount of least
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$100,000 within thirty (30) days of the execution of this
Agreement and perform in accordance of the terms of that Research
Agreement.
b. Make the first commercial sale in the United States of
America and a Major Market Country in the Licensed Field by
December 31, 1998.
c. Complete construction of a plastic extrusion plant
capable of producing railroad ties at a capacity in excess of
400,000 railroad ties per year and commence operation of such
plant by December 1999.
d. Make a first commercial sale in the United States of
America and a Major Market Country in each of the Second Fields
by December 31, 1999.
Should the Licensee fail to fulfill the diligence requirements
within said sixty (60) day period, the notice shall be effective
at the end of said period. This right, if exercised by Rutgers,
supersedes the rights granted in Article 2 (GRANT).
7. PROGRESS AND ROYALTY REPORTS
7.1 Beginning August 28, 1997, and semi-annually thereafter,
Licensee shall submit to Rutgers a progress report covering
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Licensee's activities related to the development and testing of all
Licensed Products and the obtaining of the governmental approvals
necessary for marketing. These progress reports shall be made for
each Licensed Product in each country of the Territory.
7.2 The progress reports submitted under section 7.1 shall
include sufficient information to enable Rutgers to determine
Licensee's progress in fulfilling its obligations under Article 6,
including, but not limited to, the following topics:
- summary of work completed
- key scientific discoveries
- summary of work in progress, including product
development and testing and progress in obtaining
government approvals
- current schedule of anticipated events or milestones
- market plans for introduction of Licensed Products in
countries of the Territory in which Licensed Product has
not been introduced
- summary of resources (dollar value) spent in the
reporting period for research, development, and marketing
of Licensed Products
- activities in obtaining sublicensees and activities of
sublicensees
- certified financial statements annually and quarterly
financial statements that are produced internally as of
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the end of the previous calendar quarter.
- activities under the Research Agreement
7.3 Licensee shall have a continuing responsibility to keep
Rutgers informed of the large/small entity status (as defined by
the United States Patent and Trademark office) of itself and its
sublicensees.
7.4 Licensee shall report to Rutgers in its immediately
subsequent progress and royalty report the date of first commercial
sale of each Licensed Product in each country.
7.5 After the first commercial sale of a Licensed Product
anywhere in the world, Licensee will make quarterly royalty reports
to Rutgers on or before each February 28, May 31, August 31 and
November 30 of each year. Each such royalty report will cover
Licensee's most recently completed calendar quarter and will show
(a) the units and gross sales and Net Sales of each type of
Licensed Product sold by Licensee on which royalties have not been
paid, including a clear indication of how Net Sales were
calculated; (b) the royalties, in U.S. dollars, payable hereunder
with respect to such sales; (c) the method used to calculate the
royalty; (d) the exchange rates used, if any; and (e) consideration
received from sublicensing.
7.6 If no sales of Licensed Products have been made during
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any reporting period, a statement to this effect shall be made by
Licensee.
8. BOOKS AND RECORDS
8.1 Licensee shall keep and cause its sublicensees to keep
books and records in accordance with general acceptable accounting
principles accurately showing all transactions and information
relating to this Agreement. Such books and records shall be
preserved for at least five (5) years from the date of the entry to
which they pertain and shall be open to inspection by
representatives or agents of Rutgers at reasonable times upon
reasonable notice.
8.2 The fees and expenses of Rutgers' representatives
performing such an examination shall be borne by Rutgers. However,
if an error in royalties of more than five percent (5%) of the
total royalties due for any year is discovered, or if as a result
of the examination it is determined that Licensee is in material
breach of its other obligations under this Agreement, then the fees
and expenses of these representatives shall be borne by Licensee.
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9. TERM OF THE AGREEMENI
9.1 Unless otherwise terminated by operation of law or by
acts of the parties in accordance with the provisions of this
Agreement, this Agreement shall be in force from the effective date
recited on page one and shall remain in effect in each country of
the Territory until the longer of (i) expiration of the last-to-
expire patent licensed under this Agreement in such country or (ii)
ten years from the date of first commercial sale of a Licensed
Product in such country.
9.2 Any expiration or termination of this Agreement shall not
affect the rights and obligations set forth in the following
Articles:
Article 8 Books and Records
Article 12 Disposition of Licensed Products on
Hand Upon Termination
Article 13 Use of Names, Trademarks and
Confidential Data
Article 18 Indemnification and Insurance
Article 23 F ailure to Perform
Article 28 Confidentiality
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10. TERMINATION BY RUTGERS
10.1 If Licensee should breach or fail to perform any
provision of this Agreement, then Rutgers may give written notice
of such default (Notice of Default) to Licensee. If Licensee
should fail to cure such default within ninety (90) days of the
effective date of such notice, Rutgers shall have the right to
terminate this Agreement and the licenses herein by a second
written notice (Notice of Termination) to Licensee. If a Notice of
Termination is sent to Licensee, this Agreement shall automatically
terminate on the effective date of such notice. Termination shall
not relieve Licensee of its obligation to pay all amounts due to
Rutgers as of the effective date of termination and shall not
impair any accrued right of Rutgers.
11. TERMINATION BY LICENSEE
11.1 Licensee shall have the right at any time to terminate
this Agreement in whole or as to any portion of Rutgers' Patent
Rights by giving ninety (90) days notice thereof in writing to
Rutgers. If such termination is within the first two (2) years of
this Agreement, Licensee shall pay Rutgers a relicensing fee of Ten
Thousand Dollars ($10,000).
11.2 Any termination pursuant to the above paragraph shall not
relieve Licensee of any obligation or liability accrued
19
hereunder prior to such termination or rescind anything done by
Licensee or any payments made to Rutgers hereunder prior to the
time such termination becomes effective, and such termination shall
not affect in any manner any rights of Rutgers arising under this
Agreement prior to such termination.
12. DISPOSITION OF LICENSED PRODUCTS AND INFORMATION
ON HAND UPON TERMINATION
12.1 Upon termination of this Agreement by either party (i)
Licensee shall have the privilege of disposing of all previously
made or partially made Licensed Products, but no more, within a
period of one hundred and twenty (120) days after the effective
date of termination, provided, however, that the disposition of
such Licensed Products shall be subject to the terms of this
Agreement including, but not limited to, the payment of royalties
at the rate and at the time provided herein and the rendering of
reports thereon; (ii) Licensee shall promptly return, and shall
cause its sublicensees to return, to Rutgers all Rutgers'
Technology, and other property belonging to Rutgers, if any, that
has been provided to Licensee or its Affiliates or sublicensees
hereunder, and all copies and facsimiles thereof and derivatives
therefrom (except that Licensee may retain one copy of written
material for record purposes only, provided such material is not
used by Licensee for any other purpose and is not disclosed to
others); and (iii) Licensee shall provide Rutgers with copies of
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all information relating to Licensed Product or Licensed Method
developed or acquired by Licensee or its Affiliates, and Rutgers
shall have the nonexclusive, worldwide right to use such
information in connection with its research and in connection with
the relicensing of Rutgers' Patent Rights and Rutgers' Technology.
13. USE OF NAMES, TRADEMARKS, AND CONFIDENTIAL INFORMATION
13.1 Nothing contained in this Agreement shall be construed as
granting any right to Licensee or its Affiliates to use in
advertising, publicity, or other promotional activities any name,
trade name, trademark, or other designation of Rutgers or any of
its units (including contraction, abbreviation or simulation of any
of the foregoing). Unless required by law, the use by Licensee of
the name, "Rutgers, The State University of New Jersey" or any
campus or unit of Rutgers is expressly prohibited, and Licensee
shall not use such names in any manner without Rutgers' prior
written consent.
14, LIMITED WARRANTY
14.1 Rutgers warrants to Licensee that it has the lawful right
to grant this license.
14.2 This license and the associated Invention are provided
WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
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PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. RUTGERS MAKES
NO REPRESENTATION OR WARRANTY THAT THE LICENSED PRODUCTS OR
LICENSED METHODS WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY
RIGHT.
14.3 IN NO EVENT WILL RUTGERS BE LIABLE FOR ANY INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS
LICENSE OR MANUFACTURE, SALE, OR USE OF THE INVENTION OR LICENSED
PRODUCTS OR LICENSED METHODS OR RUTGERS' TECHNOLOGY OR BIOLOGICAL
MATERIAL.
14.4 Nothing in this Agreement shall be construed as:
(14.4a) a warranty or representation by Rutgers as to the
validity or scope of any Rutgers' Patent Rights or
Rutgers Technology; or
(14.4b) a warranty or representation that anything made.,
used, sold or otherwise disposed of under any
license granted in this Agreement is or will be
free from infringement of patents or other
intellectual property or biological materials of
third parties; or
(14.4c) an obligation to bring or prosecute actions or
suits against third parties except as provided in
Article 17; or
(14.4d) conferring by implication, estoppel or otherwise
any license or rights under any
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patents or other intellectual property of Rutgers
other than Biological Materials, Rutgers' Patent
Rights and Rutgers Technology as defined herein,
regardless of whether such patents are dominant or
subordinate to Rutgers' Patent Rights; or
(14.4e) an obligation to furnish any know-how not provided
in Rutgers' Patent Rights and Rutgers Technology.
15, PATENT PROSECUTION
AND MAINTENANCE
15.1 Rutgers shall diligently prosecute and maintain the
United States patents comprising Rutgers' Patent Rights using
counsel of its choice. Rutgers' counsel shall take instructions
only from Rutgers. Rutgers shall provide Licensee with copies of
all relevant documentation so that Licensee may be informed and
apprised of the continuing prosecution. Licensee agrees to keep
this documentation confidential.
15.2 Rutgers shall give due consideration to amending any
patent application to include claims reasonably requested by
Licensee to protect the Licensed Products contemplated to be sold
under this Agreement.
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15.3 Rutgers shall cooperate with Licensee in applying for an
extension of the term of any patent included within Rutgers' Patent
Rights if appropriate under the Drug Price Competition and Patent
Term Restoration Act of 1984. Licensee shall prepare all such
documents, and Rutgers agrees to execute such documents and to take
such additional action as Licensee may reasonably request in
.connection therewith.
15.4 All past, present, and future costs of preparing, filing,
prosecuting, defending, and maintaining all United States patent
applications and/or patents, including interferences and
oppositions, and all corresponding foreign patent applications and
patents covered by Rutgers' Patent Rights shall be borne by
Licensee. such costs include patent prosecution costs for this
Invention incurred by Rutgers prior to the execution of this
Agreement of approximately $6,000, based on information currently
available to Rutgers, which amount shall be due within thirty (30)
days of the execution of this Agreement. Current and future costs
shall be payable by Licensee within thirty (30) days of the billing
date. Failure to pay these bills in a timely manner is grounds for
terminating this Agreement. After Licensee has been notified three
times of failure to pay bills in a timely manner, Rutgers may
terminate this Agreement without prior notice to Licensee.
15.5 Rutgers shall, at the request of Licensee, file,
prosecute, and maintain patent applications and patents covered by
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Rutgers' Patent Rights in foreign countries if available. Licensee
consents to the filing of all PCT and foreign patent applications
that have already been filed as of the effective date of this
Agreement. Licensee shall notify Rutgers within six (6) months of
the filing of the corresponding United States application of its
decision to obtain all other foreign patents. This notice shall be
in writing and shall identify the countries desired. The absence
of such a notice from Licensee shall be considered by Rutgers to be
an election not to request foreign rights.
15.6 Licensee's obligation to underwrite and to pay patent
prosecution costs shall continue for so long as this Agreement
remains in effect, provided, however, that Licensee may terminate
its obligations with respect to any given patent application or
patent upon three (3) months' written notice to Rutgers. Rutgers
shall use reasonable efforts to curtail patent costs when such a
notice is received from Licensee. Licensee shall promptly pay
patent costs which cannot be so curtailed. Commencing on the
effective date of such notice, Rutgers may continue prosecution
and/or maintenance of such applications or patent(s) at its sole
discretion and expense, and Licensee shall have no further right or
licenses thereunder or to relat ed Rutgers Technology.
15.7 Rutgers shall have the right to file patent applications
at its own expense in any country or countries in which Licensee
has not elected to secure patent rights or in which Licensee's
25
patent rights hereunder have terminated, and such applications and
resultant patents shall not be subject to this Agreement and may be
freely licensed by Rutgers to others together with Rutgers,
Technology.
16. PATENT MARKING
16.1 Licensee shall xxxx all Licensed Products made, used,
sold or otherwise disposed of under the terms of this Agreement, or
their containers, in accordance with the applicable patent marking
laws.
17, PATENT INFRINGEMENT
17.1 In the event that Licensee shall learn of the substantial
infringement of any patent licensed under this Agreement, Licensee
shall call Rutgers' attention thereto in writing and shall provide
Rutgers with reasonable evidence of such infringement. Both
parties to this Agreement agree that during the period and in a
jurisdiction where Licensee has exclusive rights under this
Agreement, neither will notify a third party of the infringement of
any of Rutge rs' Patent Rights without first obtaining consent of
the other Party, which consent shall not be unreasonably denied.
Both parties shall use their best efforts in cooperation with each
other to terminate such infringement without litigation.
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17.2 Licensee may request that Rutgers take legal action
against the infringement of Rutgers' Patent Rights. Such request
shall be made in writing and shall include reasonable evidence of
such infringement and damages to Licensee. If the infringing
activity has not been abated within ninety (90) days following the
effective date of such request, Rutgers shall have the right to
(17.2a) commence suit on its own account; or
(17.2b) refuse to participate in such suit;
and Rutgers shall give notice of its election in writing to
Licensee by the end of the sixtieth (60th) day after receiving
notice of such request from Licensee. Licensee may thereafter
bring suit for patent infringement if and only if Rutgers elects
not to commence suit and if the infringement occurred during the
period and in a jurisdiction where Licensee had exclusive rights
under this Agreement. However, in the event Licensee elects to
bring suit in accordance with this paragraph, Rutgers may
thereafter join such suit at its own expense.
17.3 Such legal action as is decided upon shall be at the
expense of the party on account of whom suit is brought and all
recoveries recovered thereby shall belong to such party, provided,
however, that recoveries from legal actions brought jointly by
Rutgers and Licensee shall be shared equally by them, after paying
the reasonable legal expenses of both parties.
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17.4 Each party agrees to cooperate with the other in
litigation proceedings instituted hereunder but at the expense of
the party on account of whom suit is brought. Such litigation
shall be controlled by the party bringing the suit. Each party may
be represented by counsel of its choice.
18. INDEMNIFICATION AND INSURANCE
18.1 Licensee shall indemnify, hold harmless and defend
Rutgers, its governors, trustees, officers, employees, students,
agents and the Inventors against any and all claims, suits, losses,
liabilities, damages, costs, fees and expenses (including
reasonable attorneys' fees) resulting from or arising out of the
exercise of this license or any sublicense. This indemnification
shall include, but is not limited to, any and all claims alleging
products liability.
18.2 Licensee shall, throughout the term of this agreement, at
its sole cost and expense, insure its activities in connection with
this Agreement and will maintain and keep in force, with insurers
acceptable to Rutgers, or an equivalent program of self insurance
acceptable to Rutgers the following types of insurance:
(a) Comprehensive or Commercial General Liability which shall
include, but not be limited to, broad form contractual
liability and products/completed operations liability
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with minimum limits as follows:
(i) $2,000,000 combined single limit as respects
premises, operations and contractual liability;
(ii) $5,000,000 combined single limit as respects
liability arising out of Products and/or Completed
operations. This coverage may be maintained on
either an occurrence or claims made form. if
Products/Completed Operations coverage is on a
claims made form, Licensee must maintain such
coverage for six years after termination or
expiration of this license.
(iii) $5,000,000 General Aggregate.
(b) Workers' Compensation and Employers Liability insurance,
covering each employee of the Licensee engaged in the
performance of the action required under the contract,
with a limit of liability in accordance with applicable
law, in the case of workers' compensation insurance, and
with the following limits of liability in the case of
employers' liability:
Bodily injury by accident - $100,000 each accident;
Bodily injury by disease - $500,000 policy limit;
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Bodily injury by disease - $100,000 each employee.
(c) It is expressly understood and agreed, however, that the
insurance coverage and limits stated in A and B above
shall not in any way limit the liability of Licensee and
that the required insurance shall be primary coverage.
Any insurance Rutgers may purchase will be excess and
noncontributory. Licensee's liability insurance will be
endorsed to specifically name Rutgers as an additional
insured, extend to cover the indemnification pursuant to
Article 18 and provide as primary coverage.
(d) Licensee shall furnish Rutgers with a certificate of
insurance evidencing the coverage and limits required
pursuant to A and B above. The liability certificate
shall:
(i) Provide for thirty (30) day advance written notice
to Rutgers of cancellation or material alteration
of the policy;
(ii) Indicate that Rutgers has been endorsed as an
additional insured under the coverages referred to
above;
(iii) Include a provision that the insurance will be
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primary and any valid and collectible insurance or
program of self-insurance carried or maintained by
Rutgers shall be excess and noncontributory.
18.3 Rutgers shall promptly notify Licensee in writing of any
claim or suit brought against Rutgers in respect of which Rutgers
intends to invoke the provisions of Article 18. Licensee shall
keep Rutgers informed on a current basis of its defense of any
claims pursuant to Article 18.
19. NOTICES
19.1 Any notice or payment required to be given to either
party shall be deemed to have been properly given and to be
effective (a) on the date of delivery if delivered in person or (b)
five (5) days after mailing if mailed by first-class certified
mail, postage paid and deposited in the United States mail, to the
respective addresses given below, or to such other address as it
shall designate by written notice given to the other party.
In the case of Licensee: President
U S. Plastics Lumber Company
0000 Xxxxxx Xx.
Xxxx Xxxxx, XX 00000
In the case of Rutgers: Rutgers, The State University of New
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Jersey
office of Corporate Liaison and
Technology Transfer
P. 0. Box 1179
ASB Annex II, Xxxxxx Road
Xxxxx Campus
Piscataway, NJ 08855-1179
Attention: Director
20. ASSIGNABILITY
20.1 This Agreement is binding upon and shall inure to the
benefit of Rutgers, its successors and assigns, but shall be
personal to Licensee and assignable by Licensee only with the
written consent of Rutgers, which consent shall not be unreasonably
withheld.
21. LATE PAYMENTS
21.1 In the event any amounts due Rutgers hereunder, including
but not limited to royalty payments, fees and patent cost
reimbursements, are not received when due, Licensee shall pay to
Rutgers an interest charge at a rate of Three (3) percent annually
plus the current prime rate percentage per annum as established by
Citibank on the day such payment was due. Such interest shall be
calculated from the date payment was due until actually received by
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Rutgers.
22. WAIVER
22.1 It is agreed that no waiver by either party hereto of any
breach or default of any of the covenants or agreements herein set
forth shall be deemed a waiver as to any subsequent and/or similar
breach or default.
23. FAILURE TO PERFORM
23.1 In the event of a failure of performance due under the
terms of this Agreement and if it becomes necessary for either
party to undertake legal action against the other on account
thereof, then the prevailing party shall be entitled to reasonable
attorney's fees in addition to costs and necessary disbursements.
24, GOVERNING LAWS
24.1 THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, but the scope
and validity of any patent or patent application shall be governed
by the applicable laws of the country of such patent or patent
application.
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25. PREFERENCE FOR UNITED STATES INDUSTRY
25.1 If the U.S. Government sponsored the Invention in whole
or in part, Licensee agrees that any products sold in the United
States embodying this Invention or produced through the use thereo
f will be manufactured substantially in the United States.
26. FOREIGN GOVERNMENT APPROVAL
OR REGISTRATION
26.1 If this Agreement or any associated transaction is
required by the law of any nation to be either approved or
registered with any governmental agency, Licensee shall assume all
legal obligations to do so and the costs in connection therewith.
27. EXPORT CONTROL LAWS
27.1 Licensee shall observe all applicable United States and
foreign laws with respect to the transfer of Licensed Products and
related technical data to foreign countries, including, without
limitation, the International Traffic in Arms Regulations (ITAR)
and the Export Administration Regulations.
28. CONFIDENTIALITY
28.1 Licensee shall not use any Data and/or Rutgers
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Technology except for the sole purpose of performing this
Agreement, shall safeguard Data and/or Rutgers Technology against
disclosure to others with the same degree of care as it exercises
with its own data of a similar nature, and shall not disclose or
permit the disclosure of Data and/or Rutgers Technology to others
(except to its employees, agents or consultants who are bound to
Licensee and Rutgers by a like obligation of confidentiality)
without the express written permission of Rutgers, except that
Licensee shall not be prevented from using or disclosing any Data
and/or Rutgers Technology:
(28.1a) which Licensee can demonstrate by written records
was previously known to it; or
(28.1b) which is now, or becomes in the future, information
generally available to the public in the form
supplied, other than through acts or omissions of
Licensee; or
(28.1c) which is lawfully obtained by Licensee from sources
independent of Rutgers who were entitled to provide
such information to Licensee.
The obligations of Licensee under this section 28.1 shall remain in
effect for five (5) years from the date of termination or
expiration of this Agreement.
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29. INFRINGEMENT UNDER DRUG PRICE COMPETITION ACT
29.1 In the event either party receives notice pertaining to
any patent included within Rutgers' Patent Rights pursuant to the
Drug Price Competition and Patent Term Restoration Act of 1984
(Public Law 98-417, hereinafter, "the Act") , including but not
necessarily limited to notices pursuant to Sections 101 and 103 of
the Act from persons who have filed an Abbreviated New Drug
Application ("ANDAII) or a "paper" New Drug Application ("paper
NDAII), or in the case of an infringement of Rutgers' Patent Rights
as defined in Section 271(e) of Title 35 of the United States Code,
such party shall notify the other party promptly but in no event
later than ten (10) days after receipt of such notice.
29.2 If Licensee wishes action to be taken against such
infringement, as provided in the Act, Licensee shall request such
action by written notice to Rutgers. Within thirty (30) days of
receiving said request, Rutgers will give written notice to
Licensee of its election to:
(29.2a) commence suit on its own account; or
(29.2b) refuse to participate in such suit.
Licensee may thereafter bring suit for patent infringement as
provided by the Act if and only if Rutgers elects not to commence
suit and if the infringement occurred during the period that
Licensee had exclusive rights in the United States under this
Agreement. However, in the event Licensee elects to bring suit in
36
accordance with this paragraph, Rutgers may thereafter join such
suit at its own expense.
29.3 The provisions of paragraphs 17.3 and 17.4 shall likewise
apply to any legal action brought under this Article 29.
29.4 Rutgers hereby authorizes Licensee to include in any NDA
for a Licensed Product a list of patents included within Rutgers'
Patent Rights identifying Rutgers as patent owner.
30. MISCELLANEOUS
30.1 The headings of the several articles are inserted for
convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
30.2 This Agreement will not be binding upon the parties until
it has been signed below on behalf of each party, in which event,
it shall be effective as of the date recited on page one.
30.3 No amendment or modification hereof shall be valid or
binding upon the parties unless made in writing and signed on
behalf of each party.
30.4 This Agreement embodies the entire understanding of the
37
parties and shall supersede all previous communications,
representations or understandings, either oral or written, between
the parties relating to the subject matter hereof. The Secrecy
Agreement between the parties, dated November 18, 1996 and the
option Agreement between the parties dated June 30, 1996 is hereby
terminated.
30.5 In case any of the provisions contained in this Agreement
shall be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not
affect any other provisions hereof, but this Agreement shall be
construed as if such invalid or illegal or unenforceable provisions
had never been contained herein.
30.6 In the event Licensee's current assets at any time become
less than its current liabilities, or in the event Licensee is
consistently unable to meet all of its debts over a three (3) month
period, this Agreement is automatically suspended until Licensee's
financial condition improves to the reasonable satisfaction of
Rutgers, at which time the Agreement shall be reinstated, provided
however, that the Agreement shall automatically terminate if (i) a
voluntary or involuntary petition of bankruptcy is filed against
Licensee, (ii) Licensee becomes insolvent, or (iii) the financial
conditions which caused the suspension are not cured on a
consistent basis within six (6) months of the commencement of the
suspension.
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IN WITNESS WHEREOF, both Rutgers and Licensee have executed
this Agreement, in duplicate originals, by their duly authorized
representatives on the day and year hereinafter written.
U.S. PLASTIC LUMBER CORP. Rutgers, The State University
of New Jersey
By By
(Signature) (Signature)
Name Xxxx Xxxxxxxxx Name Xxxxxxx X. Xxxxx
(Please Print)
Title President Director
office of Corporate Liaison and
Technology Transfer
Date 2-17-97 Date
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