MUTUAL LICENSE AGREEMENT
THIS AGREEMENT is made and entered into by and between Bethlehem Steel
Corporation ("Bethlehem") and Scientific Measurement Systems, Inc. ("SMS").
WHEREAS Bethlehem and SMS have developed profile gaging and flat rolled
gage technology under a Letter Agreement dated November 20, 1987, and Amendments
thereto;
WHEREAS Bethlehem and SMS are desirous of maximizing the financial benefits
to each from the manufacture, use, and/or sale of technology so developed; and
WHEREAS various meetings and agreements have occurred subsequent to the
Letter Agreement for the purpose of defining the interests of each party;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. Terms used herein are defined as follows:
"Development Period": the period covered by the November 20, 1987,
Letter Agreement and subsequent Amendments from November 20, 1987 to May 6,
1993.
"Contract Period": the period beginning upon the execution date of this
Agreement and ending on either the tenth anniversary thereof or the date of
expiration of the last to expire of the Joint Patents (as defined below),
whichever shall occur last.
"Flat Rolled Gage": a device for measuring cross-sectional dimensions
of flat rolled steel product during the manufacture of the product which
incorporates tomographic techniques.
"Profile Gage": a device for measuring dimensions of any steel product
during manufacturing which incorporates tomographic techniques.
"Bethlehem Patents": patents and applications owned or controlled by
Bethlehem based on inventions made by Bethlehem employees during the Development
Period and directed to Profile Gages.
"SMS Patents": patents and applications owned or controlled by SMS
based on inventions made by SMS employees during the Development Period and
directed to Profile Gages.
"Joint Patents": patents and applications owned or controlled by
Bethlehem and SMS based on inventions made jointly by one or more Bethlehem
employees and one or more SMS employees during the Development Period directed
to Flat Rolled and Profile Gages.
"Selling Price": the invoice price of the Gage, Lo.b. plant of
manufacture plus or minus any returns or adjustments.
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2. Bethlehem and SMS shall jointly pay the cost of preparing, filing,
prosecuting, and maintaining Joint Patents. The costs win be split from the date
they were incurred starting March 31, 1992, and forward. The approximate amount
of those fees to date are $12,500.00. This amount shall be split subject to
review of itemized invoices concerning the work done for this amount of money.
Subsequently, Bethlehem agrees to transfer this patent work and all files and
documentation related thereto from the firm currently handling these matters to
the law firm of Xxxxxxx & Xxxxxxxxxx in Austin, Texas.
3. SMS shall have the exclusive, perpetual, royalty-free right and license
to make, have made by others, use and sell equipment and license others, under
any Bethlehem, SMS and Joint Patents developed during the Development Period for
gages other than Flat Rolled Gages.
4. Bethlehem shall have the exclusive, perpetual, royalty-free right and
license to make, have made by others, use and sell equipment and license others,
under any Bethlehem, SMS and Joint Patents developed during the Development
Period for Flat Rolled Gages.
5. Subject to the provisions noted in paragraphs 6 through 9 below,
Bethlehem agrees to assign and hereby does assign to SMS Bethlehem's exclusive
right and license to make, have made, and sell Flat Rolled Gages to third
parties and license purchasers to use Flat Rolled Gages under any Bethlehem
Patents, SMS Patents, and Joint Patents. This shall include the right of SMS to
develop a business relationship, including but not limited to joint ventures or
sublicenses as permitted in paragraph 10, with a third party for the sole
purpose of making and selling Flat Rolled Gages to Bethlehem or any other
person.
6. Bethlehem retains the exclusive, perpetual, royalty-free right and
license to make, have made by others, and use Flat Rolled Gages and Profile
Gages within Bethlehem Company facilities under any Bethlehem, SMS and Joint
Patents and related technologies and software developed or used by SMS or
Bethlehem during the Development Period and SMS will be given the opportunity to
negotiate an acceptable sales agreement with Bethlehem.
7. During the Contract Period, SMS will use its best efforts to develop the
capability to manufacture and sell Flat Rolled Gages, and Bethlehem wig provide
a reasonable amount of assistance to SMS for marketing Flat Rolled Gages in the
form of permitting and assisting visits by potential customers to Sparrows
Point, joint technical papers, and other assistance as reasonably required. SMS
further agrees not to use Bethlehem's name in any advertising without first
obtaining Bethlehem's written approval as to the proposed text.
8. SMS agrees to pay Bethlehem a license fee equal to ten percent (10%) of
the Selling Price of all Flat Rolled Gages sold to purchasers other than
Bethlehem during the Contract Period. Such fees shall accrue whenever the Flat
Rolled Gages are delivered to the purchaser and shall be paid to Bethlehem at
the end of the calendar year in which they accrue. Bethlehem agrees to reduce
the license fee downward to an appropriate level if SMS can reasonably
demonstrate that the fee is seriously restricting commercialization of Flat
Rolled Gages. Should SMS become a non-exclusive licensee as provided herein, a
non-exclusive license fee equal to that paid by the lowest non-exclusive
licensee will be paid.
That is, SMS will not pay more in license fees than any other licensee.
9. If SMS has not sold at least one Flat Roiled Gage to a third party wi@
three years or two Flat Rolled Gages to third parties within five years of the
execution date of this Agreement, Bethlehem may, after giving SMS ninety (90)
days prior written notice (with opportunity to cure within 75 days) of
Bethlehem's election to do so, make SMS's exclusive license, as defined in
Paragraph 5, nonexclusive. In such event, SMS and Bethlehem will still be bound
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by paragraphs 7 and 8 for the Contract Period, and both Bethlehem and SMS shall
thereafter be free to license others as provided in paragraphs 3 and 4.
10. This Agreement and any rights and licenses granted hereunder shall not
be assigned by either party without the prior written consent of the other
party, except that this Agreement may be assigned by either party without such
consent to any corporation which shall succeed to substantially all of its
business and property or to its subsidiaries or by Bethlehem to any of the
Bethlehem Companies, subject only to the condition that such successor or other
Bethlehem Company shall agree in writing to be bound by the obligations of its
assignor under this Agreement. The term "Bethlehem Companies" shall mean and
include Bethlehem Steel Corporation, a Delaware corporation, its successors and
assigns, all companies now or hereafter wholly or partially owned, directly or
indirectly, by said Bethlehem Steel Corporation or by its successors or assigns,
and the successors and assigns of any or all such companies. Subject as
aforesaid, this Agreement shall be binding upon and inure to the benefit of the
parties hereunto and their respective successors and assigns.
11. Nothing herein contained shall be construed as creating a partnership
or joint venture by or among the parties hereto.
12. Bethlehem shall not be responsible for either the satisfactory
performance of, or any alleged infringements of Letters Patent owned by third
parties caused by any Flat Rolled Gage made or sold by SMS or their agents. The
parties are jointly obligated to defending the joint patents and prosecuting
infringements of the Joint Patents. The parties are obligated to notify each
other of infringements of the Joint Patents.
13. This Agreement shall be subject to mandatory binding arbitration. Any
controversy or claim arising out of, or relating to, this Agreement, or the
breach thereof, including any dispute relating to patent validity or
infringement arising under this Agreement, shall be settled by arbitration in
accordance with the Patent Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof. The parties agree further that
the arbitration will take place in Washington, D.C. and that New York law will
govern.
14. Notices under this Agreement shall be deemed to have been sufficiently
given three days following the date such notice is enclosed in a sealed envelope
addressed as follows:
If to Bethlehem: Bethlehem Steel Corporation
Director of Research
Xxxxx Research Laboratories
Xxxxxxxxx, Xxxxxxxxxxxx 00000
If to SMS: Scientific Measurement Systems, Inc.
CEO
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
and deposited as registered mail, postage prepaid, in a station of the United
States Postal Service.
15. This Mutual License Agreement constitutes the entire understanding and
agreement between the parties hereto and respect to the subject matter hereof,
supersedes and integrates all prior understandings and agreements with respect
thereof and may not be altered, amended, or modified in any manner except by
written agreement of the parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Mutual License
Agreement to be properly executed and delivered as of the date last indicated
below.
BETHLEHEM STEEL CORPORATION SCIENTIFIC MEASUREMENT SYSTEMS,INC.
By: /s/ W. N. Xxxxxxxx By: /s/ Xxxxx Xxxxxxx
------------------------- -------------------------
Date: May 5, 1993 Date: May 5, 1993
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