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EXHIBIT 10.1
THIS SUBLICENSE, made this 2nd day of January , 1996, by and between
INTEGRAL CONCEPTS, INC., a West Virginia corporation (hereinafter referred to
as "ICI"), Sublicensor; and EMERGENT TECHNOLOGIES CORPORATION, a West Virginia
corporation (hereinafter referred to as "ETC"), Sublicensee.
WITNESSETH
WHEREAS, ICI has a License Agreement from West Virginia University
Research Corporation of Morgantown, West Virginia (hereinafter referred to as
"WVURC"), for certain technologies related to the design, construction and
operation of the Toroidal Helical Antenna, U.S. Patent No. 5,442,369 and
defined herein to be embraced within the expression "The Technology"; and,
WHEREAS, ETC understands and recognizes the terms and conditions of
the License Agreement between WVURC and ICI for The Technology and wishes to
incorporate said terms and conditions into this Sublicense, a copy of which is
attached hereto as Exhibit A; and,
WHEREAS, ETC wishes to obtain an exclusive sublicense from ICI of its
right, title and interest in and to all worldwide government and military
applications and resulting procurement interests in The Technology, subject to
the terms and conditions hereof;
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NOW, THEREFORE, in consideration of the payment of moneys as
hereinafter required, and of the mutual exchange of promises recited herein,
the parties hereto intending to be legally bound hereby agree as follows:
I. DEFINITIONS
1.1 As used in this Sublicense, the following terms shall have the
following meanings:
(a) "The Technology" shall mean that process and equipment related
to the design, construction and operation of the Toroidal Helical Antenna as
set forth and identified in Exhibit B and its attachments and amendments, if
any, all of which are, or if attachment or amendments shall be, attached hereto
and made a part hereof. The Technology specifically includes, regardless of the
date of initiation or completion, modifications or enhancements to such process
or equipment developed or performed independently by ICI, its agents, servants,
employees, contractors, assigns or successors, which are subject to patent or
copyright protection in their own right, whether so protected or not. The
Technology also includes modifications or enhancements to such process or
equipment developed or performed independently by ETC, its agents, servants,
employees, contractors, assigns or successors, which are subject to patent or
copyright protection in their own right, whether so protected or not.
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(b) "Net Revenues" means any and all money or the monetary value of
other consideration received by ETC from the sale, leasing or sublicensing of
The Technology pursuant to which third parties are permitted to use or market
The Technology, less customer discounts and returns and less sales commissions
and royalty payments (other than royalty payments due under Article III hereof)
and less actual operational expenses incurred.
(c) "Gross Revenues" means any and all money or the monetary value
of other consideration received by ETC from the sale, leasing or sublicensing
of The Technology pursuant to which third parties are permitted to use or
market The Technology.
(d) "Royalty Statements" means a written statement made within
thirty (30) days of the end of each calendar quarter certified by a duly
authorized officer of ETC and setting forth a full enumeration of:
(i) model numbers, type designations, and trade or brand names
of all Items sold by ETC that incorporate The Technology;
(ii) the total number of Items of each model or type of
equipment produced and the total number sold during the preceding quarter;
(iii) the Selling Price for each Item;
(iv) the Discounts and Shipping Charges for each Item;
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(v) the Net Revenue from each Item; and
(vi) the amount of the royalties payable thereon as provided in
this Sublicense.
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II. SUBLICENSE
2.1 ICI hereby grants to ETC the exclusive worldwide right and
sublicense (i) to manufacture, sell copies of, sublicense and distribute any
and all worldwide government and military applications and resulting
procurement interests in The Technology; and (ii) to sublicense others to
manufacture, sell copies of, license and distribute any and all government and
military applications and resulting procurement interests in The Technology.
Specifically, ETC or their sublicensees may not manufacture, market or sell any
products for other than government and military applications.
2.2 ETC will assign any and all developments and enhancements made by
ETC, whether before or after execution of this Sublicense, to WVURC and WVURC
will grant the license to such developments and enhancements to ICI pursuant to
the conditions of the WVURC-ICI License, which in turn will grant back to ETC
the worldwide, exclusive government and military application sublicense, to use
and license such developments and enhancements pursuant to the terms of this
Sublicense. The royalties to be paid to WVURC provided in this Sublicense will
also apply to such developments and enhancements.
2.3 ICI reserves the nonterminable, royalty-free right to manufacture,
use and copy The Technology for research, development and noncommercial ICI
purposes.
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2.4 WVURC reserves the nonterminable, royalty-free right to
manufacture, use and copy The Technology for research, development and
noncommercial WVURC purposes.
III. PAYMENTS
3.1 ETC shall pay to ICI as a nonrefundable, noncreditable sublicense
fee the sum of Three Thousand Dollars ($3,000.00) due upon the execution of
this Sublicense or, at the option of the Sublicensee, upon and from the first
net profits of ETC.
3.2 ETC shall assume the responsibility for payments from ICI to WVURC
pursuant to Section 3.2 of the License Agreement between WVURC and ICI and pay
to WVURC as a minimum annual royalty on December 31, 1996, and each December 31
thereafter during the term of this Sublicense, or any renewals thereof, the sum
of Three Thousand Dollars ($3,000.00).
3.3 ETC shall pay to WVURC as an earned royalty on sales, leases or
sublicenses by ETC as to The Technology a sum equal to ten percent (10%) of the
Net Revenues as above defined, less a credit for annual royalty. In any year
which the earned royalties exceed the minimum royalty, no additional payment of
the annual minimum royalty shall be required.
3.4 Royalties as set forth herein will be paid by ETC to ICI and WVURC
with a Royalty Statement within thirty (30) days of the end of each calendar
quarter.
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3.5 ETC agrees that it will keep and maintain financial records
showing all sales, leases and subleases for a period of at least five (5)
years. ETC agrees to maintain its business transaction records, e.g., invoices,
cost documents, etc. needed to determine royalties as provided herein, for a
period of two (2) years or as long as required by applicable tax laws,
whichever is longer. All such records will be maintained in sufficient detail
to enable authorized representatives and/or certified public accountants of
WVURC and ICI to determine royalties payable to WVURC and ICI under this
Sublicense. ETC will permit WVURC and ICI such investigation of its operations
and records as may be necessary to verify ETC's compliance with this Sublicense
and the accuracy of its records and of the Royalty Statements to be furnished
hereunder.
IV. MARKETING
4.1 It is understood by the parties that further work may be required
to complete The Technology and that ETC will, at its own expense, seek to
effect such completion using such efforts and resources as it, in its sole
discretion, determines appropriate under the then existing circumstances. The
parties agree that WVURC shall participate as an owner in any subsequent
development work and will own or have assigned all intellectual property
resulting from this license under the terms set forth in Section 2.2 herein.
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4.2 ETC shall have the right to prepare, copy, edit, publish, sell,
distribute and license all government and military applications and resulting
procurement interests in The Technology throughout the world in any variety of
forms or applications. ETC shall provide WVURC and ICI with a written
comprehensive report providing details of the status of the work under this
Sublicense, including, but not limited to, documentation, support, packaging,
advertising and promotion concepts and designs related to The Technology and as
to sublicenses. Such written comprehensive reports are to be provided to WVURC
and ICI on an annual basis no later than thirty (30) days after the year end
and at such other times as WVURC and ICI may reasonably request. ETC agrees to
provide WVURC and ICI with at least two (2) copies of all material concerning
the Technology it provides to its shareholders.
V. CONFIDENTIALITY, INFRINGEMENT AND PROTECTION
5.1 ETC acknowledges that ICI has a proprietary interest in the
Technology and agrees to use all reasonable efforts to protect any and all
trade secrets disclosed to ETC from unauthorized disclosure, use or release,
including, without limitation, (i) providing reasonable physical security at
ETC's facilities and (ii) taking the same care to prevent unauthorized
disclosure that ETC takes to protect information, data or other tangible and
intangible property of its own that it regards as proprietary or confidential.
ETC agrees that it will not sell,
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disclose or otherwise make the Technology available to others except: (i) as
authorized by the license rights granted to ETC under this Sublicense and (ii)
to its employees, agents, contractors, consultants or others with a need to
have access to the Technology to reasonably enable ETC to fully exercise its
rights under this Sublicense. ETC will neither knowingly nor negligently allow
its employees, agents, consultants or independent contractors to sell or
disclose the trade secrets disclosed to ETC except: (i) that ETC may provide
the trade secrets of the Technology to third parties in connection with
exercising ETC's sublicense rights hereunder, provided each such party executes
a written agreement binding it to confidentiality obligations similar to ETC's
obligations under this Sublicense and (ii) as otherwise permitted by this
Sublicense. In execution of its confidentiality obligation, ETC will indemnify
and hold ICI harmless from any and all damages caused by a breach of
confidentiality by ETC or any of ETC's employees, agents, contractors, officers
or directors. Because damages may be difficult to assess, ETC agrees to pay as
liquidated damages (and not as a penalty) the sum of $50,000.00 for each
disclosure in breach of this confidentiality obligation.
5.2 ETC will use reasonable efforts to enforce any patent or
copyright, if any is issued for the Technology, and to protect its trade
secrets, but ETC will be the sole judge in its absolute discretion of what
efforts are reasonable and
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appropriate. In this regard, ETC will exercise its best efforts to keep ICI
fully advised of any and all commercial threats to the Technology. If ETC is
unwilling or unable to protect the Technology, ICI may do so at its own expense
and cost.
5.3 During the term of this Sublicense, ETC will not directly or
indirectly contest the validity or ICI's ownership of any trade secret,
knowhow, copyright or any patent issued for the Technology to ICI or to WVURC.
5.4 The obligations of this Section V shall survive the expiration or
termination of this Sublicense.
VI. PROPRIETARY RIGHTS
6.1 WVURC, ICI and ETC acknowledge that The Technology is of a
character which is or may be protectable by patent, trade secret and/or
copyright under the laws of the United States and other countries. WVURC and
ICI have, at their own expense, made application to obtain patent and/or
copyright or other statutory protection of the original Technology described in
Exhibit B.
It is explicitly recognized that developments and enhancements of the
Technology may be developed and such developments and enhancements of the
Technology will be incorporated by amendment or attachment to Exhibit B of this
Sublicense pursuant to the procedure set forth in Article 2.2 of this
Sublicense. Neither WVURC nor ICI will be responsible for obtaining patent
and/or copyright or other statutory protection
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of such developments and enhancements of the Technology. ETC will be solely
responsible for obtaining patent and/or copyright or other statutory protection
of all forms of The Technology as defined in Exhibit B which are developed in
the future and incorporated by amendment to this Sublicense. All such patents
and/or copyrights or other statutory protection shall name WVURC as the owner
of each so protected Technology, which will then be licensed through ICI to ETC
pursuant to the terms of the License Agreement between WVURC and ICI and this
Sublicense.
ETC shall treat documentation regarding The Technology, including
listings of source code for The Technology but not including instructions,
manuals or other elements of any publicly marketed material from The
Technology, as proprietary, confidential information. ETC shall use reasonable
efforts to obtain and maintain proprietary protection for The Technology
consistent with ETC's ability to effectively market The Technology in each
country in which The Technology is distributed. ICI agrees to cooperate with
ETC, at ETC's expense, and where necessary ETC agrees to obtain patent,
copyright or other statutory protection for The Technology in each country in
which the same are sold, distributed or sublicensed; and ICI hereby authorizes
ETC to execute and prosecute in WVURC's name as authors or inventors an
application for patent, copyright or similar protection of The Technology; and
WVURC and ICI shall execute such other documents of registration and
recordation as
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may be necessary to perfect in ETC, or protect, the exclusive rights granted
ETC hereunder in each country in which such items are sold or distributed.
6.2 Any trademark used by ETC to identify The Technology shall be
owned by WVURC, ICI and ETC to the same extent and in the same proportions as
the underlying technology.
6.3 ETC may identify WVURC and ICI as owners or participants in The
Technology and its development, provided that such use of the WVURC and ICI
identification is an accurate statement of WVURC's and ICI's role and notice
thereof has been given to WVURC and ICI at the address indicated herein not
less than thirty (30) days prior to the first such identification.
VII. TERM, TERMINATION AND CONVERSION
7.1 The term of this Sublicense shall commence on the date first set
forth above and shall continue until December 31, 1996, unless earlier
terminated as provided in this Sublicense or by the terms of the license by and
between ICI and WVURC.
7.2 This Sublicense shall be renewed for one year periods after
December 31, 1996, so long as payments to ICI and WVURC equal or exceed the
minimum royalty payment specified in Articles 3.1, 3.2 and 3.3 and those
conditions of ICI's license as renewed by its licensors are satisfied.
7.3 In the event of the bankruptcy of either party or a breach of a
material provision hereof, which breach is not
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cured within sixty (60) days after written notice thereof by the nonbreaching
party, then said party may, effective sixty (60) days after written notice
thereof to the other, terminate this Sublicense, and the rights granted
hereunder shall thereupon revert to the appropriate party as provided in
Section 7.5 hereof. In addition to or in lieu of their rights to terminate this
Sublicense upon material breach, the nonbreaching party shall have the right to
pursue any remedies available to them under the law.
7.4 Waiver of a particular instance of a breach shall not preclude a
party from objecting to future breaches of the same or any other type.
7.5 Upon any termination of this Sublicense: (1) all rights, title and
interest of ETC in and to The Technology as conveyed hereby, including, but not
limited to, design drawings and production materials relating thereto in ETC's
possession will terminate and revert to ICI; (2) all rights and sublicenses
granted by ETC to third parties shall continue in full force and effect, and
monies due thereunder shall be received by ETC and royalties paid to WVURC and
ICI as provided herein; (3) WVURC and ICI shall in any event have the right to
retain copies of any version of The Technology for WVURC's and ICI's own use;
and (4) ETC's obligation to pay WVURC and ICI earned royalties then due shall
continue.
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VIII. MISCELLANEOUS
8.1 Each party will notify the other of any infringements of rights in
The Technology that come to such party's attention and shall cooperate fully
with the other in determining what action, if any, should be taken.
8.2 This Sublicense states the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior
negotiations, understandings and agreements between the parties hereto
concerning the subject matter hereof. No amendment or modification of this
Sublicense shall be made except by an instrument in writing signed by all
parties.
8.3 ICI represents: (i) this Sublicense has been duly executed and
delivered and is a valid and binding agreement; and (ii) the execution and
delivery of this Sublicense, and the performance by ICI of its obligations
hereunder, are not to the best of the undersigned's belief in violation of and
will not conflict with any agreement, law, order or other restriction binding
on ICI concerning The Technology.
8.4 The parties' rights and obligations hereunder shall be binding
upon and inure to the benefit of their respective successors and assigns. Each
party hereto will notify the other party in writing of any transfer of its
rights or obligations hereunder within thirty (30) days of such transfer,
provided, however, that ETC or its assignee will not be required
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to give notice of any transfer made pursuant to a sublicense agreement or other
transaction in the ordinary course of its business and recognized in this
Sublicense.
8.5 This Sublicense shall be governed by and interpreted in accordance
with the laws of the State of West Virginia.
8.6 Should any provision of this Sublicense be held to be void,
invalid or inoperative, the remaining provisions of this Sublicense shall not
be affected and shall continue in effect as though such provisions were
deleted.
8.7 All payments to others, as required by WVURC's "Patent and
Trademark Policy," shall be the sole responsibility of WVURC, and such payments
shall be made from WVURC's royalties received under this Sublicense.
8.8 All royalty payments and other conditions as outlined in the
original WVURC/ICI License Agreement and this Sublicense due to WVURC will be
paid directly by ETC to WVURC.
8.9 ETC, with the execution of this Sublicense, assumes all financial
responsibilities for the development and protection of the government and
military applications of The Technology, agrees to pay all existing patent and
license fees now in effect for the government and military applications of The
Technology, and will continue with existing efforts to extend said protection.
8.10 ETC agrees to be maintained as a West Virginia corporation.
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8.11 Any notice required or permitted to be sent hereunder shall be
deemed given (a) if hand delivered when received, or (b) if mailed when mailed
by postage prepaid, by registered or certified mail, return receipt requested,
to any party at the following address or such other addresses which either
party may from time to time identify:
Xx. Xxxxx X. Xxxxx
Integral Concepts, Inc.
Xxxxx #0, Xxx 000
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Mr. Xxxx Xxxxxxx
Emergent Technologies Corporation
0000 Xxxx Xxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have executed this Sublicense
on the dates shown below but with effect as of the date first above written.
INTEGRAL CONCEPTS, INC.,
a West Virginia corporation
(CORPORATE SEAL)
BY: /s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX
Its President
DATE: 1/2/96
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EMERGENT TECHNOLOGIES CORPORATION,
a West Virginia corporation
(CORPORATE SEAL)
BY: /s/ Xxxx Xxxxxxx
---------------------------------------
XXXX XXXXXXX
Its President
DATE: 1/2/96
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