INTELLECTUAL PROPERTY RIGHTS
LICENSE AGREEMENT
SURGX CORPORATION
(LICENSOR)
▇▇▇▇▇▇-▇▇▇▇▇▇ COMPANY
(LICENSEE)
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INTELLECTUAL PROPERTY RIGHTS LICENSE AGREEMENT
THIS AGREEMENT, effective as of August _, 1997 (the "Effective Date"), is by and
between SurgX Corporation, a Delaware corporation, having its principal office
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter "Licensor") and
▇▇▇▇▇▇-▇▇▇▇▇▇ Company, a Delaware corporation, having a principal office at ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 63 178 (hereinafter "Licensee").
WHEREAS, Licensor has been engaged in the development of products, with respect
to which it is possessed of certain proprietary rights and engineering
production knowledge essential to or helpful in the manufacture of the Licensed
Products as defined herein, and owns, has or may have in the future the right to
grant licenses with respect to certain inventions, copyrights, and other
industrial and intellectual property, technical and production data, and other
secret and confidential information relating to the manufacture of the Licensed
Products;
WHEREAS, Licensee desires to obtain from Licensor certain patent rights,
technical assistance, technical and production know-how, and services of
technical representatives, including drawings, designs, and specifications,
formulae, data, information and engineering assistance relating to Licensed
Products, to the extent the same is possessed by Licensor, and Licensor has the
right to grant the same, to assist Licensee in manufacturing and selling the
Licensed Products as hereinafter set forth;
WHEREAS, Licensor is willing to provide Licensee with the technical assistance,
technical and production know-how, and services of technical representatives, in
connection with the manufacture and sale of Licensed Products hereunder, to the
extent and upon the terms and conditions hereinafter set forth-,
WHEREAS, Licensor is willing to direct its technical competence to certain
projects to advance certain technologies to hopefully urge them toward
commercialization-, and Licensee is desirous of having that occur; and
WHEREAS the parties wish to expand on some of the understandings reached in
their July 1996 Intellectual Property Rights License Agreement and delete or add
more appropriate terms and conditions thereto;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, Licensor and Licensee covenant and agree as follows~
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1. DEFINED TERMS.
1.1 "Affiliate" means any person controlling, controlled by (either directly or
indirectly) or under common control with Licensee or Licensor as applicable.
1.2 "Agreement" means this Intellectual Property Rights License Agreement
between Licensee and Licensor and all attachments, exhibits, schedules , lists
or other documents expressly called out herein.
1.3 "Confidential Information" has the meaning set forth in Section 12.
1.4 "Disclosing Party" shall mean a Party or an Affiliate thereof that discloses
Confidential Information to the other Party or an Affiliate thereof
1.5 "Gross Profit" means under United States generally accepted accounting
principles(i) the aggregate sum of revenue recognized by Licensee, its
Affiliates and any sublicensee from sales or other dispositions of Licensed
Products to unaffiliated third parties net of freight out, returns and credits
allowed and taken ("Net Sales"); (ii) minus Licensee's cost of sales at standard
costs including direct and indirect labor and associated fringe benefits, scrap,
perishable tooling, supplies and maintenance on machinery and equipment (only
costs associated with the manufacture of Licensed Products will be included in
standard costs), (iii) plus or minus, as applicable, operating variances from
standard costs of sales; (iv) minus semi-variable costs equal to 5% of Net Sales
for selling commissions and distribution costs; (v) minus amortization
associated with incremental machinery and equipment used in the manufacture of
the Licensed Products (using a 10 year useful life); and (vi) minus amortization
associated with development costs incurred by Licensor and reimbursed by
Licensee as described in Section 3 hereof using a 5year amortization period.
1.6 "Improvements" shall mean those supplements, changes, revisions, updates,
advancements, corrections, and modifications to the Technical Information or
Licensed Intellectual Property Rights including developments in Microgap
technology and any manufacturing process improvements made during the term of
this Agreement which are necessary or useful for the manufacture, use or sale of
Licensed Products,
1.7 "Licensee Components" means the materials, components and processes of
Licensee which are not covered by the Licensed Intellectual Property Rights
which, in combination with the Liquid Polymer Material or SurgeTape, form the
Licensed Products.
1.8 "Licensed Intellectual Property Rights" shall mean, solely with respect to
Licensed Products, Licensor's interest in any patents, patent applications,
inventions (including but not limited to the inventions and patent applications
listed on Attachment 1. 8), the " SurgX"
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trademark, the "SurgeTape" trademark, Technical Information, and copyrights
owned, controlled, conceived, developed and applied for or obtained by Licensor
at any time before or during the term of this Agreement to the extent such
rights are necessary or essential for the manufacture, use and sale of the
Licensed Products. Wherever used in this Agreement, Licensed Intellectual
Property Rights includes any such rights relating to Improvements of Licensor.
1.9 "Licensed Products" means discrete components and connector products
described on Attachment 1.9 which utilize the Licensed Intellectual Property
Rights and incorporate either the Liquid Polymer Material or SurgeTape.
1.10 "Liquid Polymer Material" means a polymeric provided in a solvated liquid
form that can be used to provide electrical overstress (EOS) or electrostatic
discharge (ESD) protection for integrated circuits (IC's). The Liquid Polymer
Material can be applied between signal lines and the ground plane of an
electrical board assembly, a connector and other applications where it can be
positioned between signal lines and ground. The Liquid Polymer Material has a
high impedance, and low leakage state during normal circuit operation. During an
EOS or an ESD event, the Liquid Polymer Material has a low impedance state that
shunts the offending charge to the ground plane. The capacitance of the devices
using Liquid Polymer Material is typically less than I picofarad. The mechanical
flexibility and the semiconducting characteristics of the Liquid Polymer
Material allow for a wide variety of packaging concepts, including arrays in
which a common ground is used with multiple signal lines. Specifically, the
Liquid Polymer Material covered by the patent applications listed on Attachment
1.8.
1.11 The Liquid Polymer Material shall specifically exclude ICs and applications
therefor and other SurgX products, such as, without limitation, the family of
products identified by Licensor as SurgX Epoxy Packages or custom SurgX
applications such as a layer on a printed circuit board and novel packaging,
including hybrid designs and multichip modules.
1.12 "SurgeTape" means a flexible film of proprietary polymer-based material
that can be applied between signal lines and a ground plane that has a high
impedance and low leakage state during normal circuit operation. During an
electrical overstress (EOS) or electrostatic discharge (ESD) event, the polymer
has a low impedance state that shunts the offending charge to the ground plane.
Specifically, SurgeTape is covered by the patent applications listed on
Attachment 1.8, if any.
1.13 "ICs" means an interconnected array of active and passive elements
integrated with a single semiconductor substrate or deposited or deposited on
the substrate by a continuous series of compatible processes, and capable of
performing at least one complete electronic circuit function. Abbreviated ICs.
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1.14 "Microgap" means properties of and techniques for forming gaps in
circuit(s) on a substrate which may be filled with an electrically insulating
material which, when placed into the precision gap (less than 1.6 mils wide),
will switch to an electrically conductive state in response to an overvoltage
event.
1.15 "Minimum Annual Royalties" has the meaning set forth in Section 5.
1.16 "Parties" shall mean ▇▇▇▇▇▇-▇▇▇▇▇▇ Company and SurgX Corporation.
1.17 "Receiving Party" has the meaning set forth in Section 12.2.
1.18 "Royalty Year" means a period of twelve (12) months used to measure the
royalties payable to Licensor. The "First Royalty Year" is the twelve (12) month
period which commenced on ______________, 1997, the "Second Royalty Year" is the
twelve (12) month period which immediately follows the "First Royalty Year", and
so on for subsequent Royalty Years.
1.19 "Technical Assistance" means providing the appropriate Licensor personnel
to assist personnel of Licensee in becoming trained in the use of Technical
Information to be delivered or provided hereunder to the extent such Technical
Information is necessary or essential for the manufacture, use or sale of
Licensed Products and Improvements thereto.
1.20 "Technical Information" means trade secrets, know-how, drawings, designs,
specifications and industrial, commercial and scientific information controlled
by Licensor and disclosed to Licensee under this Agreement. Whenever used in
this Agreement, Technical Information includes any information relating to
Improvements of Licensor.
1.21 "Territory" means worldwide.
2. GRANT OF LICENSE.
2.1 Licensor grants to Licensee an exclusive license with respect to Liquid
Polymer Material and SurgeTape, both within the Territory, and both to use (i)
the Licensed Intellectual Property Rights; and (ii) the Technical Information,
solely to manufacture, use, and sell these as Licensed Products provided,
however, that, except as provided in Section I I hereof, Licensee shall have no
right to manufacture the Liquid Polymer Material and SurgeTape unless the
parties enter into a trade secret agreement permitting manufacture of the Liquid
Polymer Material or SurgeTape by Licensee.
2.2 Licensed Products shall include application of SurgeTape to ICs if Licensor
grants a license to an unaffiliated third party for application of SurgeTape to
ICs.
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2.3 Subject to Section 5.2 hereof, the exclusive license granted to Licensee
under Section 2. 1 of this Agreement shall be for a period of twenty (20) years
commencing on the first day of the month in which Licensee makes its initial
sale of a Licensed Product. Thereafter, the exclusive license granted to
Licensee hereunder shall continue on a nonexclusive basis, Notwithstanding the
provisions of Section 2.1, Licensee will permit Licensor to grant a
nonexclusive license to Iriso Electronics Company, Ltd., a Japanese corporation
("Iriso") allowing Iriso to manufacture, use and sell Licensed Products,
excluding ICs, in Japan incorporating or utilizing the Licensed Intellectual
Property Rights to utilize the Technical Information, provided that Iriso shall
have no right to sell any Licensed Products (a) outside of Japan or (b) to a
distributor that would sell any Licensed Products outside of Japan. However,
Licensor may grant Iriso the right to sell Licensed Products to an original
equipment manufacturer or to an added value reseller in Japan that may
incorporate such Licensed Products into goods that are sold outside of Japan.
2.4 Licensee is not authorized to grant a sublicense to any third party without
Licensor's prior written consent; provided, however, that Licensee may grant a
sublicense to any of its Affiliates without Licensor's prior written consent. No
Affiliate or sublicensee may be granted a sublicense pursuant to the terms of
this Agreement unless it shall first agree in writing to be bound by all of the
terms of this Agreement. The revenues and costs of any Affiliate of sublicensee,
directly related to any sublicense properly granted hereunder and falling within
the definition of Gross Profit, shall be aggregated with the revenues and costs
of Licensee for the purpose of determining the royalties payable to Licensor
pursuant to Section 5.1 hereof
3. DEVELOPMENT AND COMMERCIALIZATION OF THE LICENSED PRODUCTS AND PRODUCT
MODIFICATIONS.
3.1 In partial consideration for the licenses granted to Licensee in Section 2
and in partial consideration of the development of the Licensed Products and
product modifications and enhancements as described in this Section 3, Licensee
has previously paid Licensor the amount of One Hundred Thousand Dollars
($100,000). In addition, Licensee has paid Licensor an additional Six Hundred
Fifty Thousand Dollars ($650,000) by check delivered to Licensor on July 16,
1.996, receipt of which Seven Hundred Fifty Thousand Dollars ($750,000) total is
hereby acknowledged by Licensor. Licensee further agrees to pay Licensor One
Million Seven Hundred Thousand Dollars ($1,700,000) which shall be credited as
non-refundable prepaid minimum royalties for Royalty Years one to four. Such One
Million Seven Hundred Thousand Dollar ($1,700,000) payment shall be made in six
(6) equal monthly installments on the first day of each calendar month beginning
on August 1, 1997, with the first actual payment on September 15, 1997 including
the payments for August 1997 and September 1997.
3.2 Upon execution of the Agreement, both Parties will use their good faith
reasonable efforts to develop the Licensed Products and bring them to
commercialization as soon
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as feasible within the agreed period therefor. It is understood by Licensee, in
particular with respect to production and utilization of SurgeTape, that
commercialization may not be possible in spite of the Parties' efforts. In
connection therewith, Licensor will provide Licensee with the following:
3.2.1 During the term of this Agreement, Training, Technical Information and
Technical Assistance required to allow Licensee to manufacture the Licensed
Products in its facilities to the extent that commercialization of the Licensed
Products, particularly the SurgeTape, has been proven feasible by Licensor;
3.2.2 As soon as reasonably possible, a final report documenting all processing
requirements and procedures necessary for Licensee to manufacture the Licensed
Products to the extent that commercialization of theLicensed Products,
particularly the SurgeTape, has been proven feasible by Licensor; and
3.2.3 As soon as reasonably possible, the technology necessary to improve the
Liquid Polymer Material for broader product application as follows:
(a) Trigger voltage = 200 V.
(b) Clamping voltage = 25 V.
3.2.4 Within six (6) months of the Effective Date of this Agreement, those
deliverables concerning laser-formed Microgap technology set forth in Attachment
3.2.4.
3.2.5 Within six (6) months of the Effective Date of this Agreement, those
deliverables concerning SurgeTape set forth in Attachment 3.2.5.
3.2.6 The six (6) month duration set forth in Sections 3.2A and 3.2.5 may be
adjusted upon mutual approval by the Parties as necessary to focus resources to
suit priorities that may shift as development activities proceed.
3.3 Licensor also agrees to work at its own expense toward and expend
commercially reasonable efforts in developing information, processes, techniques
and means for commercializing the manufacture of SurgeTape for six (6) months
after the Effective Date hereof Licensor shall not be penalized or deemed to
have breached any obligation under this Agreement if it fails to develop viable
methods and means for commercializing the manufacture of SurgeTape.
3.4 To the extent that Licensor specifically undertakes any Licensed Product
modifications or enhancements at Licensee's written request (other than the
product modifications
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and enhancements described in Section 3.2.3 above which will be undertaken by
Licensor at its sole expense), Licensee shall reimburse Licensor for its
development costs as described below in conducting such modifications or
enhancements, including any additional capital equipment that Licensee requires
to perform such modifications and enhancements. The development costs incurred
by Licensor to be reimbursed by Licensee shall consist of direct and indirect
labor and associated fringe benefits of Licensor's employees and independent
contractors as allocated to the project, scrap, perishable tooling, supplies,
maintenance on machinery and equipment, capital equipment costs, material costs
and travel costs. The development costs incurred by Licensor will be amortized
over a period of five (5) years and capital equipment cost incurred by Licensee
will be amortized over a period of ten (10) years and the annual amortization
will be included in the cost structure of the Licensed Products for the purpose
of determining annual royalties based on Gross Profits (or if annual royalties
are based on net sales, the royalties based on net sales will be reduced by an
equivalent amount to account for the annual amortization).
3.5 All inventions or other intellectual property conceived or reduced to
practice jointly by the employees or independent contractors of the Parties, as
a result of this collaboration and during the term of this Agreement, shall be
jointly owned by the Parties and shall be included in the license without charge
to Licensee, provided that all expenses incurred to file, obtain, maintain,
register or perfect any patents or other intellectual property right based on
such joint inventions or intellectual property is equally shared by the Parties.
If one joint invention owner declines to contribute its share of expenses to
file, issue and maintain a patent based thereon or to register or perfect a
right in the jointly created intellectual property, the Party paying such
expenses shall own the resultant patent or intellectual property right paid for.
In any event, the joint owner of an invention or other intellectual property
right under this Section 3.5 shall have no duty of accounting to the other joint
owner. Licensee shall not grant a sublicense in such jointly owned inventions or
intellectual property without the prior written consent of Licensor.
3.6 Licensee may utilize the SurgX and SurgeTape trademarks in connection with
the sale and promotion of the respective Licensed Products to which they apply.
Licensee may also utilize its trade names or trademarks in conjunction with the
SurgX and SurgeTape trademarks in connection with the sale and promotion of the
Licensed Products, provided that no composite trademarks are formed thereby.
Licensor and Licensee shall enter into a Trademark License Agreement, that
defines the permitted uses of the SurgX and SurgeTape trademarks, in the form
attached hereto as Attachment 3.6 before Licensee may use these Licensor
trademarks,
4. DISCLOSURE OF TECHNICAL INFORMATION.
4.1 Licensor shall disclose and furnish to Licensee all Technical Information
necessary or essential for the incorporation and use of Liquid Polymer Material
and SurgeTape in the manufacture, use and sale of the Licensed Products.
Disclosure of Technical Information, to the extent such Technical Information is
in documentary or fixed form, shall be by delivery of two
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copies of the most recent versions thereof Delivery of Technical Information
shall be completed in compliance with the schedule of Attachment 4. 1.
4.2 To the extent that Technical Information is not available in documentary or
fixed form, disclosure shall be made by Licensor, at its expense, providing
Technical Assistance to Licensee, including training and consultation normally
sufficient to demonstrate the practical use of the Technical Information, and to
communicate information applicable thereto in such detail as to reasonably
permit Licensee to understand and make full use thereof in the establishment and
operation of a production capability for Licensed Products, and to exercise the
rights and licenses granted herein. Such Technical Assistance will be performed
at the request of Licensee, consistent with the Technical Information delivery
schedule of Attachment 4. 1, by qualified Licensor technical personnel, at
Licensee's manufacturing plants and locations. During such visits, Licensor
personnel shall observe such rules and regulations as are applicable to
employees of Licensee, and Licensor shall indemnify Licensee from any liability
which might be asserted or claimed against Licensee, arising out of said visits
by Licensor's personnel, including personal injury to or property damage caused
by such personnel. Licensee will provide, at no cost to Licensor, reasonable
facilities for such training and Technical Assistance, including access to
office space, secretarial support and local phone use for Licensor personnel
engaged in such training and Technical Assistance. Notwithstanding Section 2.4
hereof, Licensee may not sublicense the rights contained in this Section 4.2
without the specific prior written approval of Licensor.
4.3 By arrangement with Licensor, Licensee may, at its expense, send qualified
personnel to Licensor's establishment for training for the purpose of enabling
Licensor to demonstrate and Licensee's employees to observe, the manufacturing
and engineering operations and the application and use of Technical Information
pertaining to the Licensed Products. The identity and number of any such
personnel, and the date and duration of each such visit shall be such as
Licensor and Licensee mutually agree. During such visits, Licensee's personnel
shall observe such rules and regulations as are applicable to employees of
Licensor, and Licensee shall indemnify Licensor from any liability which might
be asserted or claimed against Licensor arising out of said visits by Licensee's
personnel, including personal injury to or property damage caused by such
personnel. Licensor will provide, at no cost to Licensee, reasonable facilities
for such training, including access to office space, secretarial support and
local phone use for Licensee's personnel engaged in such training.
4.4 After delivery of the Technical Information pursuant to Attachment 4, 1,
Licensee's personnel may direct correspondence or telephone inquiries to
Licensor's personnel requesting reasonable amounts of Technical Assistance and
oral explanation concerning Licensor's method of manufacturing, Technical
Information or operation of the Licensed Products, and Licensor agrees to
promptly respond to such inquiries and to supply such assistance to the extent
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it is in the possession of, or known to, Licensor, and at the place and times
upon which the Parties may mutually agree.
4.5 Licensor agrees to promptly notify Licensee of any defect or error
discovered in the Technical Information, and of any corrective action, revisions
or customer notice made by Licensor with regard thereto.
4.6 During the term of this Agreement, Licensor shall promptly disclose and
deliver to Licensee any Improvements conceived or reduced to practice in whole
or in part by Licensor. Licensor also agrees to promptly deliver sufficient
information to allow Licensee to incorporate such Improvements into the Licensed
Products. During the term of this Agreement, Licensee shall promptly deliver to
Licensor any Improvements conceived or reduced to practice in whole or in part
by Licensee. Licensee also agrees to promptly deliver sufficient information to
allow Licensor to incorporate such Improvements into the Licensed Products.
5. ROYALTIES.
5.1 Commencing with the First Royalty Year, Licensee shall pay to Licensor an
annual royalty for the licenses granted herein equal to Twenty five percent
(25%) of the Gross Profit recognized by Licensee, its Affiliates and any
sublicensee on the sale of Licensed Products during the relevant Royalty Year.
The Parties acknowledge that it is their desire to ultimately convert this
royalty to a royalty based upon net sales of the Licensed Products (instead of
Gross Profit) but they do not have sufficient experience to currently calculate
the appropriate royalty rate. Therefore, the Parties agree that after four (4)
years from the Effective Date of this Agreement, they shall discuss in good
faith a royalty rate based on net sales which provides the same economic
allocation as that intended by the royalty based on Gross Profit. Unless both
Parties execute a written amendment to this Agreement setting forth the terms of
the royalty based on net sales, any promises, agreements or understandings made
by the Parties during their discussions and negotiations will not be binding on
the Parties, If the Parties do not execute a written amendment to this Agreement
setting forth the terms of the royalty based on net sales, then Licensee shall
continue to pay Licensor an annual royalty based on Gross Profit as described
above.
5.2 In order to maintain the licenses granted to it under Section 2 hereof,
including the exclusivity of the exclusive license for its twenty (20) year
period as described in Section 23, Licensee shall insure that the annual
royalties payable to Licensor are no less than the following amounts ("Minimum
Annual Royalties"):
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Royalty Year Minimum Annual Royalties
1st $0
2nd $200,000
3rd $500,000
4th and 5th $1,000,000 (each Royalty Year)
6th through 20th $2,500,000 (each Royalty Year)
If in any Royalty Year after the fourth, the royalties based on Gross Profit (or
net sales, if applicable) are less than the Minimum Annual Royalties, Licensee,
at its option, has the right to pay up the difference to a total equaling the
respective year's Minimum Annual Royalty. If Licensee elects not to pay up the
difference to a total equaling the respective year's Minimum Annual Royalty,
then the exclusive license granted hereunder shall become a non-exclusive
license for the remaining term of this Agreement, subject to the rights of the
Licensor to terminate this Agreement as set forth in Section 14. In the event
the exclusive license reverts to a nonexclusive license because Licensee elects
not to pay the Minimum Annual Royalties, the Licensee shall no longer be liable
for payment of Minimum Annual Royalties but shall continue to be liable for
royalties based on the Gross Profit (or net sales, if applicable) of Licensed
Products sold.
5.3 As a matter of convenience, to protect Licensor's Licensed Intellectual
Property Rights and as an acknowledgment that Licensee is not currently in the
business of producing any resettable electrostatic discharge protection products
or products incorporating any resettable electrostatic discharge protection
products, Licensee agrees that the royalty under this Section 5 shall apply to
all resettable electrostatic discharge protection products which are covered by
(a) the Licensed Intellectual Property Rights or (b) Improvements of Licensee.
5.4 Subject to Section 5.3, nothing in this Agreement shall be deemed to
prohibit Licensee from conceiving, reducing to practice, developing, making,
using, marketing or otherwise distributing or promoting products competitive
with the Licensed Products produced hereunder, provided that Licensee does not
breach any provision of Section 12 or disparage the Licensed Products produced
hereunder in doing so.
6. PAYMENTS.
6.1 Royalties (including Minimum Annual Royalties) are due and payable for each
quarter of each Royalty Year within forty five (45) days after the end of each
quarter of each such Royalty Year.
6.2 All payments payable by Licensee to Licensor are assigned by Licensor and
shall be paid in US. dollars by Licensee to Oryx Technology Corporation, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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7. RECORDS, REPORTS AND INSPECTION.
7.1 Licensee shall at all times keep complete and proper records of all Licensed
Products manufactured, used or sold by Licensee, its Affiliates and any
sublicensee. Sales or dispositions shall be considered as made on the date of
the invoice or shipment, whichever occurs first.
7.2 Within forty five (45) days after the end of each quarter of each Royalty
Year during the term of this Agreement, Licensee shall send to Licensor a full
statement in writing identifying separately the total number of pieces in each
product category of Licensed Products sold by Licensee, its Affiliates and any
sublicensee during the preceding quarter of such Royalty Year, together with a
computation of royalties due Licensor.
7.3 Licensor shall have the right, upon giving at least thirty (30) days'
advance notice, at any time during normal business hours, to audit the records
of Licensee, any sublicensee and any Affiliate to which Licensee has granted a
sublicense by having an independent auditor examine the books and records of
Licensee, any sublicensee and any Affiliate to which Licensee has granted a
sublicense relating to the computation of royalties on the Licensed Products.
Licensee, any sublicensee and any Affiliate to which Licensee has granted a
sublicense shall keep the records available for inspection for three (3) years
after expiration of the Royalty Year in which they are made and Licensor's right
to audit the records of Licensee, any sublicensee and any Affiliate to which
Licensee has granted a sublicense shall not extend beyond such three year
period. Licensor shall, and shall cause its independent auditor to maintain the
confidentiality of all information, books and records examined during such
audit. Licensor will bear the expense of any such audit unless the audit shows
an underpayment of more than five percent (5%) for the applicable period, in
which case Licensee shall bear the expense of the audit.
8. WARRANTY.
8.1 Licensor warrants that it has the right to grant a license to the rights
licensed hereunder and that there are no outstanding assignments, grants,
licenses, encumbrances or obligations inconsistent with licenses granted under
this Agreement.
8.2 To the knowledge of Licensor and its Affiliates as of the Effective Date,
Licensor warrants that the Licensed Intellectual Property Rights do not
interfere with, infringe upon, misappropriate or otherwise conflict with any
intellectual property rights of third parties and Licensor and its Affiliates
have never received any charge, complaint, claim or notice alleging any such
interference, infringement, misappropriation or violation, To the knowledge of
Licensor and its Affiliates, no third party has interfered with, infringed upon,
misappropriated or otherwise come into conflict with any of the Licensed
Intellectual Property Rights,
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9. INDEMNIFICATION.
9.1 Licensor agrees to indemnify Licensee, its agents, employees, officers,
directors and representatives (the "Licensee Group") against any and all losses
and expenses arising from any claims, demands, actions, suits, or prosecution
(collectively, a "Claim") that may be initiated against the Licensee Group by an
unaffiliated third party relating to infringement claims (specifically including
claims that may arise from the patents described in Attachment 9.1 hereof) which
are the result of the incorporation or combination of the Liquid Polymer
Material and SurgeTape with Licensee Components in the Licensed Products
manufactured, used or sold by Licensee in the Territory, pursuant to the terms
of this Agreement. Licensor will have no such obligation (i) unless it is
promptly notified by Licensee of any Claim or threat of a Claim provided,
however, that delay or failure to so notify shall not relieve Licensor of its
indemnity obligations unless and to the extent Licensor is thereby damaged, (ii)
unless upon Licensor's request and expense, Licensee cooperates reasonably in
any such Claim, (iii) to the extent the Claim involves specifications provided
by Licensee or any change or addition to or modification of such Licensed
Intellectual Property Rights or any use or application thereof different from
the commercial uses and applications of Licensor as of the date of this
Agreement or (iv) for any settlement Licensor does not approve in advance in
writing. Licensee, at its sole cost and expense, may elect to join Licensor to
defend such Claim so long as Licensee is an exclusive licensee hereunder. If any
resolution of such a Claim results in the payment of a royalty by Licensee to a
third party as necessary to make, use, or sell Licensed Products, such royalty
shall be allocated to Gross Profit to the extent such royalty accrues on the
manufacture, use or sale of the Licensed Products (or if royalties are based on
net sales rather than Gross Profit, twenty five percent (25%) of such third
party royalties shall be deducted from and credited against any royalties
otherwise due to Licensor under this Agreement).
9.2 Licensee agrees to indemnify Licensor, its agents, employees, officers,
directors and representatives (the "Licensor Group") against any and all losses
and expenses arising from any claims, demands, actions, suits or prosecution
(collectively, a "Claim") that may be initiated against the Licensor Group by an
unaffiliated third party relating to infringement claims which are the result of
the use or sale of Licensee Components which are incorporated in the Licensed
Products manufactured, used or sold by Licensee in the Territory pursuant to the
terms of this Agreement, Licensee will have no such obligation (i) unless it is
promptly notified by Licensor of any Claim or threat of a Claim provided,
however, that delay or failure to so notify shall not relieve Licensee of its
indemnity obligations unless and to the extent Licensee is thereby damaged, (ii)
unless upon Licensee's request and expense Licensor cooperates reasona ly in any
such Claim and (iii) for any settlement Licensee does not approve in advance in
writing. Licensor, at its sole cost and expense, may elect to join Licensee to
defend such Claim. If any resolution of such a Claim results in the payment of a
royalty by Licensor to a third party as necessary to make, use or sell Licensed
Products (other than the patent rights specified in Attachment 1 .8 to the
13
extent such patent rights are incorporated in the Licensed Products), such
royalty shall be allocated to Gross Profit to the extent such royalty accrues on
the manufacture, use or sale of the Licensed Products (or if royalties are based
on net sales rather than Gross Profit, twenty five (25%) of such third party
royalties shall be deducted from and credited against any royalties otherwise
due to Licensor under this Agreement).
10. IMPROVEMENTS.
10.1 Licensor agrees to disclose to Licensee any Improvements made by Licensor
relating to the Licensed Intellectual Property Rights and where applicable, the
Optional Licensed Intellectual Property Rights, developed, conceived or reduced
to practice by Licensor during the term of this Agreement and to grant Licensee
the right to use the Improvements in the manufacture, use and sale of the
Licensed Products at no additional cost under the same terms and conditions of
this Agreement for the term of this Agreement.
10.2 Licensee agrees to disclose to Licensor any Improvements made by Licensee,
its Affiliates or any sublicensee relating to the Licensed Intellectual Property
Rights and where applicable, the Optional Licensed Intellectual Property Rights,
developed, conceived or reduced to practice by Licensee during the term of this
Agreement and to grant Licensor a worldwide, royalty-free license to any such
Improvements for the term of this Agreement. To the extent that any such
Improvement as made by Licensee can only be used or sold with reference to the
Licensed Products or such Improvement constitutes an enhancement or improvement
to the Liquid Polymer Material or SurgeTape, Licensor shall have the full right
to sublicense such Improvement. Conversely, to the extent any such Improvement
has uses both with reference to the Licensed Products and other products of
Licensee, Licensor shall have no right to sublicense such Licensee Improvement
without the prior written consent of Licensee.
11. MANUFACTURE AND SUPPLY OF LIQUID POLYMER MATERIAL AND
SURGETAPE.
11.1 Pursuant to the terms of a Supply Agreement to be negotiated and entered
into by the Parties, Licensor shall manufacture, or have manufactured for it,
and shall sell to Licensee all of Licensee's forecasted requirements for the
Liquid Polymer Material and SurgeTape at a price equal to Licensor's cost for
such material as defined on Attachment 11. 1. In the event the Parties are
unable in good faith to negotiate and enter into a Supply Agreement, the terms
and conditions of the supply arrangement will be governed by this Section 11. At
least four (4) months prior to each delivery date, Licensee shall deliver a
forecast to Licensor of Licensee's quantity requirements for the Liquid Polymer
Material and SurgeTape. Licensee shall act in a commercially reasonable manner
to schedule orders to avoid creating production capacity problems for Licensor.
The Liquid Polymer Material and SurgeTape delivered to Licensee shall be F.O.B.
Licensee's manufacturing facility in the Continental United States. Licensor
shall use
14
reasonable commercial efforts to deliver the Liquid Polymer Material and
SurgeTape by the applicable delivery date. All customs, duties, costs, taxes,
insurance premiums and other expenses related to transportation and delivery
shall be at Licensee's expense. Licensor agrees to deliver Liquid Polymer
Material and SurgeTape to Licensee in conformity with Licensee's forecast, free
of material and workmanship defects and meeting the Parties' mutually agreed
upon quality control requirements.
11.2 Licensee shall have the right, upon giving at least thirty (30) days'
advance notice, at any time during normal business hours, to audit Licensor's
records by having an independent auditor examine the books and records of
Licensor relating to the cost of the Liquid Polymer Material and SurgeTape.
Licensor shall keep the records available for inspection for three years after
each date of delivery of the Liquid Polymer Material and SurgeTape and
Licensee's right to audit Licensor's records shall not extend beyond such three
year period, Licensee shall, and shall cause its independent auditor to,
maintain the confidentiality of all information, books and records examined
during such audit. Licensee shall bear the expense of any such audit unless the
audit shows an overpayment of more than 5% for the applicable period, in which
case Licensor shall bear the cost of the audit.
11.3 Licensee shall have the right to self-manufacture the Liquid Polymer
Material or SurgeTape if (i) Licensor fails to meet its obligations under the
Supply Agreement with regard to delivering Licensee's forecasted requirements
for the Liquid Polymer Material or SurgeTape under the terms and conditions
thereof, unless such failure is a result of a breach or anticipatory breach of
this Agreement by Licensee and such failure continues for a period of sixty (60)
days after written notice thereof to Licensor, (ii) under this Section I I if
the Parties have not entered into a Supply Agreement, or (iii) Licensor becomes
insolvent, or a case or proceeding under bankruptcy, insolvency or similar law
is commenced by or against Licensor, but not by Licensee or a party acting in
its behalf, and is not dismissed within forty five (45) days or Licensor makes a
general assignment for the benefit of creditors. If Licensee has the right to
selfmanufacture the Liquid Polymer Material or SurgeTape pursuant to Section
11.3(i), (ii) or (iii) hereof, Licensee shall exercise its right to
self-manufacture the Liquid Polymer Material or SurgeTape by giving written
notice thereof to Licensor and immediately upon receipt of such notice Licensor
shall provide Licensee with any and all Technical Information and Technical
Assistance to allow Licensee to manufacture the Liquid Polymer Material or
SurgeTape. If any event of force majeure disrupts the supply of Liquid Polymer
Material or SurgeTape to Licensee which disruption continues for a period of
sixty (60) days, then, notwithstanding Section 22.2, Licensor shall find an
alternate source to supply the Liquid Polymer Material or SurgeTape to Licensee
or shall allow Licensee to self-manufacture the Liquid Polymer Material or
SurgeTape; provided, however, that the foregoing shall apply only during the
time period that the disruption in the supply of Liquid Polymer Material or
SurgeTape as a result of an event of force majeure continues.
15
11.4 Upon execution of this Agreement, as a precautionary measure to insure all
information relating to the manufacture of the Liquid Polymer Material or
SurgeTape is available to Licensee in the event Licensee exercises its right to
self-manufacture the Liquid Polymer Material or SurgeTape, Licensor shall
deliver all of the documents relating to the manufacture of the Liquid Polymer
Material or SurgeTape that are necessary for Licensee to selfmanufacture the
Liquid Polymer Material or SurgeTape to an escrow agent mutually agreed to by
the parties, it being understood by Licensee that Licensor may not have and may
not develop any documents or information relating to the successful manufacture
of SurgeTape, The escrow agent shall hold all of such documents in escrow
pursuant to the terms of an Escrow Agreement between the parties. The Escrow
Agreement shall provide that the escrow agent will not disclose such documents
to Licensee unless and until Licensee issues its written notice to both Licensor
and the escrow agent that it is exercising its right to self-manufacture the
Liquid Polymer Material or SurgeTape and Licensor has not provided the escrow
agent with notice within ten (10) days thereafter that it is disputing
Licensee's right to self-manufacture the Liquid Polymer Material or SurgeTape.
Licensor and Licensee shall enter into an Escrow Agreement in the form attached
hereto as Attachment 11.4.
12. NONDISCLOSURE.
12.1 Prior to and during the term of this Agreement, the Parties have made and
will make certain disclosures to each other regarding information which is
proprietary and confidential to them in their businesses (the "Confidential
Information"). In order to constitute Confidential Information, information
being disclosed must either be in writing and marked as being proprietary or
confidential or, if given orally, must be identified as proprietary when stated
and confirmed in writing to be proprietary within thirty (30) days of the
original oral disclosure. In particular, Licensee recognizes that the Licensed
Intellectual Property Rights and the confidential nature, thereof are critical
to the business of Licensor and that Licensor would not enter into this
Agreement without assurance that such technology and information and the value
thereof will be protected as provided in this Section 12 and elsewhere in this
Agreement. Accordingly, each party agrees as follows:
12.2 The party receiving such information (the "Receiving Party") agrees (i) to
hold the Disclosing Party's Confidential Information in confidence and to take
all reasonable precautions to protect such Confidential Information (including,
without limitation, all precautions the Receiving Party employs with respect to
its confidential materials), (ii) not to divulge any such Confidential
Information or any information derived therefrom to any third person, (iii) not
to make any use whatsoever at any time of such Confidential Information except
as expressly authorized in this Agreement, and (iv) not to remove or export from
the United States or reexport any such Confidential Information or any direct
product thereof (e.g., Licensed Products by whomever made) to Afghanistan, the
Peoples' Republic of China or any Group Q, S, W, Y or Z country (as specified in
Supplement No. I to Section 770 of the U.S. Export Administration
16
Regulations, or a successor thereto) or otherwise except in compliance with and
with all licenses and approvals required under applicable export laws and
regulations, including without limitation, those of the U.S. Department of
Commerce. Any employee given access to any such Confidential Information must
have a legitimate "need to know" and shall have executed the standard form of
the confidentiality agreement of the Receiving Party. Without granting any right
or license, the Disclosing Party agrees that the foregoing clauses (i), (ii) and
(iii) shall not apply with respect to information the Receiving Party can
document (i) is in or (through no improper action or inaction by the Receiving
Party or any Affiliate, sublicensee, agent or employee) enters the public
domain, or (ii) was rightfully in its possession or known by it prior to receipt
from the Disclosing Party, or (iii) was rightfully disclosed to it by another
person without restriction, (iv) was disclosed by the Disclosing Party to a
third party on an unrestricted nonconfidential basis, or (v) was independently
developed by the Receiving Party by persons without access to such information
and without use of any Confidential Information of the Disclosing Party. If the
Receiving Party believes that information that a Disclosing Party has identified
as Confidential Information is no longer Confidential Information due to the
circumstances in the immediately preceding sentence, the Receiving Party shall
establish same by clear and convincing evidence prior to making a disclosure of
such information. Each party's obligations under this Section 12.2 (except under
clause (iv) of the first sentence) shall terminate five (5) years after the
termination of this Agreement.
12.3 Immediately upon any termination or expiration of the Receiving Party's
license under Section 13, the Receiving Party will turn over to the Disclosing
Party all Confidential Information of the Disclosing Party and all documents or
media containing any such Confidential Information and any and all copies or
extracts thereof
12.4 Licensor recognizes that Licensee may have a need to furnish Technical
Information received hereunder to third parties in the exercise of rights
granted hereunder, and to customers (e.g., OEM) incorporating LicensedProducts
into other equipment. Licensee may disclose such Technical Information to any
such third party for its use in the exercise of the rights granted by Licensor
hereunder, solely for the benefit of Licensee, provided such disclosure is made
to such third parties under a written agreement containing restrictions on
disclosure and use equivalent to those contained in this Section 12.
13.1 This Agreement shall begin on the Effective Date. This Agreement shall
remain in effect, unless terminated at an earlier date pursuant to Section 14
herein, for a period of twenty (20) years or until the expiration of or failure
to maintain the last issuing patent which is included in Licensed Intellectual
Property Rights, whichever is greater. Notwithstanding the foregoing, Licensee
shall have the option to extend the term of this Agreement on a year-to-year
basis by providing written notice of its election to extend the term within
sixty (60) days prior to the expiration of the initial term or any extended
term. Any extension of this Agreement
17
shall be subject to all terms and conditions herein, provided that Licensee
shall be obligated to pay only seventy five percent (75%) of the royalties that
it would have been obligated to pay during the initial term of this Agreement.
14. TERMINATION.
14.1 This Agreement may be terminated at any time prior to the expiration of its
normal term by the mutual written agreement of the Parties.
14.2 This Agreement may be terminated by Licensor upon written notice to
Licensee if Licensee fails to make any payment when due hereunder and such lack
of timely payment is not remedied within thirty (30) days from written notice
thereof However, the Licensor may not terminate the Agreement to the extent
there is a bona fide dispute as to the amount of royalties due, provided the
amount of royalties not in dispute are paid by Licensee within the thirty (30)
day cure period.
14.3 This Agreement may be terminated by either party upon written notice to the
other party:
14.3.1 immediately, if the other party defaults under or breaches any of the
terms of this Agreement and such default or breach is not remedied within a
period of sixty (60) days after written notification thereof (except breach of
the payment obligation, as set out above),- or
14.3.2 immediately, if a material provision of this Agreement is held invalid or
unenforceable by the determination of a court of competent jurisdiction; or
14.4 This Agreement may be terminated by Licensor upon thirty (30) days' prior
notice to Licensee given within the one (1) year period following the applicable
Royalty Year and the payment of Seven Hundred Fifty Thousand Dollars ($750,000)
to Licensee in the event:
14.4.1 Licensee has failed to pay the Minimum Annual Royalties applicable to the
Second or Third Royalty Year and has not cured within the thirty (30) day notice
period; or
14.4.2 Licensee has failed to pay a minimum of One Million Dollars ($1,000,000)
in royalties to Licensor each year during the Fourth or Fifth Royalty Years and
a minimum of Two Million Dollars, Five Hundred Thousand Dollars ($2,500,000)
during each of the Sixth through Twentieth, inclusive, Royalty Years and has not
cured such default within the thirty (30) day notice period.
18
14.5 If this Agreement is terminated pursuant to Section 14.4 above, the
Licensee shall retain a license to manufacture, use and sell the Licensed
Products under the Licensed Intellectual Property Rights, but such license shall
be limited to the manufacture, use and sale of Licensed Products to those
customers of Licensee who have previously purchased Licensed Products (such
customers to be derived by a customer/product sales history and Licensee may
sell to any such existing customer only those pieces in each product category of
the Licensed Products that such customer had purchased from Licensee prior to
the termination of this Agreement), During the term of such limited license and
until the expiration of the term of this Agreement under Section 13 hereof (i)
Licensee shall continue to pay Licensor royalties based on Gross Profit (or net
sales, if applicable) as provided in Section 5. 1, and (ii) Licensee may
continue to obtain Liquid Polymer Material and SurgeTape according to the terms
of Section 11.
15. RIGHTS AFTER TERMINATION OR EXPIRATION.
15.1 Except to the extent necessary for Licensee to exercise its rights under
Section 14.5, upon the termination of this Agreement under Sections 14.1, 14.2,
14.3 or 14.4, Licensee shall - (i) immediately cease all further use of
Technical Information and manufacture of Licensed Products, but shall be allowed
to continue to use or sell Licensed Products manufactured prior to the date of
termination of this Agreement provided, Licensee continues to pay Licensor any
royalties relating to such use or sales; (ii) Licensee shall cease all use of
the Licensed Intellectual Property Rights and if applicable, (iii) Licensee will
return to Licensor or destroy and provide Licensor a complete list of all
Technical Information, including all specifications and drawings, and all copies
thereof.
15.2 Termination or expiration of this Agreement (i) shall not release Licensee
from its obligation to make payment in full of all royalties which have accrued
to that date, (ii) shall not relieve the Parties from all other obligations or
liabilities under this Agreement which expressly extend beyond the termination
or expiration and (iii) shall not be construed as a waiver of any rights, claims
(including claims for damages), or obligations that have accrued up to and
including the date of termination or expiration. In particular, it is understood
that Sections 3.5, 4, 5, 6, 7, 9, 11, 12, 15, 16 and 20 hereof shall survive any
termination or expiration of this Agreement.
16. LITIGATION AND FILING MATTERS.
16. 1 Licensor retains the sole right and discretion to file and prosecute
patent applications, maintain patents and apply for intellectual property rights
in the Territory relating to the Licensed Intellectual Property Rights, or any
Improvements, but not joint inventions. At Licensee's request while Licensee
remains an exclusive licensee hereunder, Licensor will discuss its decision on
these matters with Licensee, but Licensee will not attempt to
19
file or prosecute any such patent applications or maintain any such patent (i)
except as Licensor may, in its sole discretion, approve in writing and (ii)
except that Licensee may continue maintenance of licensed patents issued in the
Territory if Licensor elects not to do so. Licensor's existing relevant patents
and patent applications in the Territory are listed on Attachment 1.8.
16.2 If Licensee becomes aware of any product or activity of any third party
that involves infringement or violation of any Licensed Intellectual Property
Right in the Territory, then Licensee shall promptly notify Licensor in writing
of such infringement or violation. Licensor may in its discretion take or not
take whatever action it believes is appropriate; if Licensor elects to take
action, Licensee will reasonably cooperate therewith at Licensor's expense.
Licensor will indemnify Licensee for any damages, expenses, costs and fees in
connection with Licensor's actions under this Section 16.2.
If Licensor does not, within ninety (90) days after receipt of such a notice of
a patent infringement within the scope of Licensee's license hereunder, commence
action directed towards restraining or enjoining such patent infringement,
Licensee, so long as it is an exclusive licensee hereunder may take such legally
permissible action as it deems necessary or appropriate to enforce Licensor's
patent rights and restrain such infringement. Licensor agrees to cooperate
reasonably in any such action initiated by Licensee including supplying
essential documentary evidence and making essential witnesses then in Licensor's
employment available, As part of such cooperation, Licensee may join Licensor as
a party, if the need arises, although such joinder shall be entirely at
Licensee's expense. Licensee will indemnify Licensor for any damages, expenses,
costs and fees in connection with Licensee's actions under this Section 16.2.
Nothing in this Section 16.2 allows Licensee or requires Licensor to disclose
the Licensed Intellectual Property Rights except the patent rights set forth in
Attachment 1.8.
If Licensor solely initiates and prosecutes any such an action under this
Section 16.2, all legal expense (including court costs and attorneys' fees)
shall be for Licensor's account and it shall be entitled to all amounts awarded
by way of judgment, settlement or compromise.
Licensee may join, solely at its own expense, an action prosecuted by Licensor
and any amounts awarded by way of judgment shall be allocated between Licensor
and Licensee as the court shall determine each party has been damaged.
In the event Licensor elects not to initiate suit and if Licensee solely
initiates and prosecutes such an action, all legal expenses (including court
costs and attorneys' fees) shall be for Licensee's account and it shall be
entitled to all amounts awarded by way of judgment, settlement, or compromise.
16.3 Licensee understands that Licensor has not conducted comprehensive patent
searches in all of the countries in the Territory.
20
16.4 INCIDENTAL AND CONSEQUENTIAL DAMAGES. NEITHER PARTY WILL BE LIABLE UNDER
ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR FOR LOST PROFITS WITH RESPECT TO ANY SUBJECT MATTER OF
THIS AGREEMENT EXCEPT A BREACH OF SECTION 12. NOTWITHSTANDING THE FOREGOING,
THIS SECTION 16.4 SHALL NOT LIMIT THE INDEMNITY OBLIGATION OF THE PARTIES UNDER
SECTION 9 WITH RESPECT TO CLAIMS OF THIRD PARTIES.
16.5 LIMITATION OF OBLIGATIONS AND LIABILITY. LICENSOR WILL NOT BE LIABLE WITH
RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE,
STRICT LIABILITY OR OTHER THEORY FOR COST OF PROCUREMENT OF SUBSTITUTE GOODS,
SERVICES, TECHNOLOGY OR RIGHTS OR FOR ANY AMOUNTS AGGREGATING IN EXCESS OF
AMOUNTS PAID TO IT HEREUNDER.
17. WAIVER OF DEFAULT.
17.1 The failure of either party at any time to enforce or require performance
of any of the provisions of this Agreement, or to exercise any right or option
herein provided, shall in no way be construed to be a waiver of that or any
other provision of this Agreement or to affect the right of such party
thereafter to enforce each and every such provision. All waivers shall be in
writing and signed by the waiving party. No waiver by either party of any
default of the other party shall be held to be a waiver of any other or
subsequent default.
18. RELATIONSHIP OF PARTIES.
18.1 It is agreed that the Parties are independent contractors and not partners,
joint venturers or otherwise affiliated. Neither party has any right or
authority to assume, create or incur any liability or obligation of any kind,
express or implied, against, in the name of, or on behalf of the other party.
19. NOTICE.
19.1 Any notice pursuant to this Agreement shall be in writing and shall be
deemed given (i) when delivered by hand or mail, (ii) when transmitted by
telecopier, with confirmation of receipt, provided that a copy is sent at about
the same time by registered or certified mail, return receipt requested, or
(iii) three days after being sent by Express Mail, Federal Express or other
express delivery service, to the addressee at the following addresses or
21
telecopier numbers (or to such other address or telecopier number as a party may
specify from time to time by notice):
If to Licensor: SurgX Corporation
Attention: President
▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to Licensee: Bussmann Division of ▇▇▇▇▇▇-▇▇▇▇▇▇ Company
Attention: President
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to: ▇▇▇▇▇▇ Industries, Inc.
Attention: General Counsel
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
20. DISPUTE RESOLUTION.
20.1 Any dispute or claim arising out of, or in connection with, this Agreement
which is not settled to the mutual satisfaction of the Parties within thirty
(30) days (or such longer period as may be mutually agreed upon) from the date
that either party informs the other in writing that such dispute or disagreement
exists, shall be submitted to mediation conducted by a mediator mutually
acceptable to the Parties. In the event the Parties cannot resolve the dispute
or claim through mediation, then the claim or dispute shall be finally settled
by binding arbitration in the counties of Alameda, San Mateo or Santa Clara,
California in accordance with the rules of the American Arbitration Association
by three (3) arbitrators appointed in accordance with said rules in effect on
the date that such notice is given. The decision of the arbitrators shall be
final and binding upon the Parties and judgment upon any award rendered by all
or a majority of the arbitrators may be entered in any court of competent
jurisdiction. Each party shall bear the cost of preparing its case. The cost of
the arbitration, including the fees and expenses of the arbitrators, will be
shared equally by the Parties unless the arbitrators' award otherwise provides.
The Parties agree that, any provision of applicable law notwithstanding, they
will not request, and the arbitrators shall not have authority to award punitive
damages against any party or Parties, Either party may request a court to
provide interim or provisional relief and such a request shall not be deemed
incompatible with the agreement to arbitrate or as a waiver of that agreement.
22
21. ASSIGNMENT.
21.1 This Agreement shall be binding upon the Parties and their permitted
successors and assigns. Licensor may assign or delegate any of its rights or
obligations under this Agreement to an Affiliate with notice to Licensee
provided the Licensor remains liable for its performance under this Agreement.
Licensee may assign or delegate any of its rights or obligations under this
Agreement to an Affiliate with notice to Licensor provided Licensee remains
liable for its performance under this Agreement. Except for assignments to
Affiliates as described above, neither party may assign any of its rights or
obligations to a third party without the prior written consent of the other
party which consent shall not be unreasonably withheld or delayed.
22. MISCELLANEOUS.
22.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of Delaware and the United States without
regard to conflicts of laws provisions thereof and without regard to the United
Nations Convention on Contracts for the International Sale of Goods. Subject to
Section 20 and unless otherwise elected by Licensor in writing for the
particular instance (which Licensor may do at its option), the sole jurisdiction
and venue for actions related to the subject matter hereof shall be the U.S.
federal courts having within their jurisdiction the location of Licensor's
principal place of business. Both parties consent to the jurisdiction of such
courts and agree that process may be served in the manner provided herein for
giving of notices or otherwise as allowed by California or federal law. In any
action or proceeding to enforce rights under this Agreement, the prevailing
party shall be entitled to recover costs and attorneys' fees.
22.2 Force Majeure. Neither party hereto shall be responsible for any failure to
perform its obligations under this Agreement (other than obligations to pay
money or obligations under Sections 9, 12 or 16) if such failure is caused by
acts of God, war, strikes, revolutions, lack or failure of transportation
facilities, laws or governmental regulations or other causes which are beyond
the reasonable control of such party. Obligations hereunder, however, shall in
no event be excused but shall be suspended only until the cessation of any cause
of such failure. In the event that such force majeure should obstruct
performance of this Agreement for more than three (3) months, the parties hereto
shall consult with each other to determine whether this Agreement should be
modified. The party facing an event of force majeure shall use its best
endeavors in order to remedy that situation as well as to minimize its effects.
A case of force majeure shall be notified to the other party by telex or telefax
within five (5) days after its occurrence and shall be confirmed by a letter.
23
22.3 Export Control. Each party hereby agrees to comply with all export laws and
restrictions and regulations of the Department of Commerce or other United
States or foreign agency or authority, and not to knowingly export, or allow the
export or re-export of any Licensed Intellectual Property Rights or Licensed
Products or derivative of the Licensed Intellectual Property Rights or the
Licensed Products or any direct product thereof in violation of any such
restrictions, laws or regulations, or, without all required licenses and
authorizations, to Afghanistan, the Peoples' Republic of China or any Group Q,
S, W, Y or Z country specified in the then current Supplement No. I to Section
770 of the U.S. Export Administration Regulations (or any successor supplement
or regulations).
22.4 Severability. If any provision of this Agreement is held illegal, invalid
or unenforceable by a court of competent jurisdiction, that provision will be
limited or eliminated to the minimum extent necessary so that this Agreement
shall otherwise remain in full force and effect and enforceable.
22.5 Entire Agreement. This Agreement constitutes the entire agreement between
the Parties and supersedes all prior agreements, including but not limited to
the parties' July 1996 Intellectual Property Rights License Agreement,
negotiations or discussions between them regarding the subject matter hereof
22.6 No Third-Party Beneficiaries. This Agreement shall not confer any rights or
remedies upon any person or entity other than the Parties and their respective
successors and permitted assigns.
22.7 Headings. The section headings contained in this Agreement and in the
attachments are inserted for convenience only and shall not affect the meaning
or interpretation of this Agreement.
22.8 Amendments and Waivers, No amendment of any provision of this Agreement or
any Attachments hereto shall be valid unless it is in writing and signed by each
party.
22.9 Incorporation of Schedules. The attachments identified in this Agreement
are incorporated by reference and made a part of this Agreement.
22.10 Counterparts. This Agreement may be executed in any number of Counterparts
with the same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed an original of
this Agreement.
On the date indicated below, each party by an authorized representative executes
this Agreement in duplicate, each of which shall be considered an original.
24
Agreed to on behalf of Agreed to on behalf of
SURGX CORPORATION by McGRAW7F~▇▇▇▇▇ COMPANY by
Name: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------ ----------------------------
Title: C.F.O. Title:
----------------------------- --------------------------
Date: 10/2/97 Date:
------------------------------ ----------------------------
25
ATTACHMENT 1.8
Invention: Licensed Polymer Material
The inventions constituting the Liquid Polymer Material and SurgeTape are
covered by the following patent applications and any continuations, divisionals,
continuations in part, as well as foreign counterparts which may be assigned to
Licensor, it being understood that these patents and applications cover
inventions which may be broader than those used solely in the Liquid Polymer
Material and SurgeTape:
Patent Application File Date
020327-002 07/14/94 SurgX Devices
020327-003 07/14/94 SurgX Manufacturing and ESD
Devices
020327-005 01/22/96 Printed Circuit Board Designs for
ESD
(list SurgeTape patent applications here)
26
ATTACHMENT 1.9
The term "Licensed Products" may include: Discrete products to be mounted on
printed circuit boards for the purpose of providing ESD protection, which
discrete products are manufactured by depositing Liquid Polymer Material on a
rigid substrate such as a FR-4 printed circuit board or a ceramic substrate.
Examples of such discrete products include 1206, 0805, 0603 surface mount
packages and board mounted network array packages. Such discrete products shall
also include discrete arrays for placement on or in connectors such as RJ,
D-subminiature and other connectors.
Licensed Products shall not include other SurgX products, such as, without
limitation, the family of products identified by SurgX as SurgeTape (excluding
discrete components and connector arrays made from SurgTape), SurgX Epoxy
Packages, or custom SurgX applications such as a layer in a printed circuit
board and novel packaging, including hybrid designs and multichip in modules.
27
ATTACHMENT 3.2.5
SurgX / SurgeTape MANUFACTURING PROCESS DEVELOPMENT
DELIVERABLE DATE
----------- ----
1. Project Definition
o Project Statement: A concise statement of the projects Middle of month 1
purpose that helps establish agreement of the overall goal.
o Project objectives: What do we plan to have at the end of
the project.
Work breakdown structure: Listing of the human resources,
facilities, equipment and materials/supplies, including the
amount and cost.
Resource requirements: Listing of human resources, facilities,
equipment and materials/supplies, including the amount and cost.
2. Detailed Project Plan
o Responsibility assignment matrix: Listing of person(s) Middle of month 1
responsible for each task of the work breakdown structure
list.
o Grant chart showing the anticipated start and completion date
of each task:
3. Project Monitoring and Control
o Reporting of progress, potential problems and potential Monthly
opportunities, project modifications.
o Revised ▇▇▇▇▇ Chart
o Project expense report
o Test reports and lab notes
4. Proposed Manufacturing Method
o Practical manufacturing process flow and procedures. End of month 6
o Identify potential raw material and equipment suppliers.
29
ATTACHMENT 3.2.4
Laser Formed Microgap Technology
Laser Machining of Surg-X Devices
o Identify up to three appropriate substrate materials (surface mount
and connector components).
o Recommend optimum gap geometry and electrode materials with respect
to performance and manufacturability for filled and unfilled polymers.
o Specify filled and unfilled polymers used, and encapsulants, if any.
o Propose practical manufacturing process flow.
o Identify potential vendors and equipment suppliers.
o Target trigger voltages !~ 50V, 150V, 450V(1).
o All test reports and lab notes.
(1) As defined in Bussmarm data sheet (I 5KV direct discharge, IMCS System 700).
28
ATTACHMENT 3.6
Trademark License Agreement
30
TRADEMARK LICENSE AGREEMENT
THIS TRADEMARK LICENSE AGREEMENT ("Agreement") is effective as of this
day of August, 1997 ("Effective Date"), by an between SURGX CORPORATION
("Licensor"), a Delaware corporation, having offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and McGRAWEDISON COMPANY ("Licensee"), a Delaware
corporation, having offices at ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
In consideration of the mutual covenants and promises contained herein, the
parties hereto agree as follows:
1. Definitions.
The following terms shall have the meanings set forth below:
(a) "Affiliate" means any person controlling, controlled by (either directly or
indirectly) or under common control with Licensee.
(b) "License Agreement" shall mean the Intellectual Property Rights License
Agreement, of even Effective Date herewith, entered into by the parties hereto.
(c) "Licensed Marks" shall mean solely the trademark SurgX' and the trademark
SurgeTape(Trademark) provided, however, that the appearance and/or style of
either trademark may change from time to time in Licensor's sole discretion. As
of the Effective Date hereof, the trademark SurgX* is the subject of U.S.
trademark registration Serial No. 74/461054 and any other pending applications.
Trademark SurgeTape(Trademark) is a common law trademark for which an
application to register has not yet been submitted.
(d) "Product" shall mean the "Licensed Products" as defined in the License
Agreement.
(e) "Territory" shall mean the world.
2. License Right Granted.
(a) In partial consideration of the consideration set forth in the License
Agreement, Licensor hereby grants to Licensee, and Licensee accepts, upon the
terms and conditions set forth herein, a non-transferable (subject to Section 9
herein), non-sublicensable (subject to Section 9 herein), royalty-free license
to use the Licensed ▇▇▇▇ in the Territory solely in connection with the Product.
(b) Licensee hereby acknowledges and agrees that, except as set forth herein,
Licensee has no rights, title or interest in or to the Licensed Marks and that
all use of the Licensed Marks by Licensee shall inure to the benefit of
Licensor. Licensee shall not have the right to use either of the Licensed Marks
as a trade name, company name, trade style or fictitious business name.
31
(c) Licensee understands and agrees that it does not have the right to use the
Licensed Marks in any manner that conflicts with the rights of any third party.
If, in Licensor's sole determination, Licensee's use of the Licensed ▇▇▇▇
infringes the rights of any third party or weakens or impairs Licensor's rights
in. the Licensed ▇▇▇▇, including but not limited to the creation of a composite
▇▇▇▇, then Licensee agrees to immediately terminate or modify such use in
accordance with Licensor's instructions. In the event Licensee falls to
terminate or modify such use as directed by Licensor, Licensor may terminate
this Agreement and the license granted hereunder.
(d) Licensee acknowledges that it is often difficult, particularly in foreign
countries, to obtain clear, registered title to trademarks. Accordingly,
Licensee agrees that the rights granted herein exist only to the extent that
Licensor owns such rights, and (except as specifically set forth herein or in
the License Agreement) no warranty, express or implied, is made with respect
thereto or to the Licensed ▇▇▇▇ or with respect to the rights of any third
parties that may conflict with the rights granted herein. If the laws of any
country included in the Territory require that a trademark be registered prior
to use in order to fully protect the owner of the trademark, the license granted
herein with respect to the Licensed ▇▇▇▇ shall not extend to such country until
the Licensed ▇▇▇▇ has been registered there at Licensor's expense under
appropriate classes relating to the Product. Licensor and Licensee shall
cooperate in constituting Licensee as a registered user (or its equivalent) of
the Licensed ▇▇▇▇ in each of the countries comprising the Territory in which
such Licensed ▇▇▇▇ is registered or may be registered, and in which such
registered user filing is required. Any expenses for constituting Licensee as a
registered user in any country shall be borne by Licensee,
(e) Licensor agrees to defend, indemnify and hold Licensee harmless from any and
all costs and expenses (including reasonable attorney's fees), liabilities,
damages or other loss resulting from or relating to an infringement by the
Licensed Marks of any trademark, service ▇▇▇▇ or trade name right of a third
party; provided that (i) Licensor is promptly notified of any and all threats,
claims and proceedings related thereto; provided ,further that no delay on the
part of Licensee to notify Licensor shall relieve Licensor from its indemnity
obligations hereunder unless (and then solely to the extent) the Licensor is
thereby damaged; (ii) Licensor shall have sole control of the defense and/or
settlement thereof, (iii) upon Licensor's request and expense, Licensee
immediately ceases use of the offending Licensed ▇▇▇▇; and (iv) upon Licensor's
request and expense, Licensee provides Licensor with reasonable assistance and
information available to Licensee for such defense, The foregoing obligation of
Licensor does not apply to the extent any liabilities, costs or expenses result
from (a) Licensee continuing the allegedly infringing activity after being
notified thereof or after being informed of modifications that would have
avoided the alleged 'infringement or (b) if Licensee's use of the Licensed ▇▇▇▇
is not strictly in accordance with the terms and provisions of this Agreement.
32
3. Quality Standards.
(a) Licensor shall have the right to control the quality of the Products sold
under the Licensed ▇▇▇▇ solely as provided herein. Licensee shall furnish to
Licensor, at no expense to Licensor, pre-production samples of the Product in
the form that Licensee intends to manufacture and sell under either of the
Licensed Marks to allow Licensor to review the quality of the Product, which
shall be of a quality at least equal to that of Licensee's other fuse products
in production. Thereafter, upon the request of Licensor, Licensee shall furnish,
at no expense to Licensor, production samples of the Product Licensee intends to
sell under each of the Licensed Marks to allow Licensor to monitor the quality
of the Product.
(b) Licensee agrees to adopt the level of quality as set forth in Section 3 (a)
hereof for the Product manufactured and sold under the Licensed Marks as the
minimum standard of quality for the Product.
(c) Licensor shall have the right to request Licensee to make any changes and/or
corrections to the Product manufactured and sold by Licensee under the Licensed
▇▇▇▇ as may be required to maintain the quality standard prescribed by Licensor
in Section 3(a) above, and Licensee agrees to make and incorporate said changes
or corrections at Licensee's sole cost and expense.
(d) Licensee shall utilize the Licensed Marks in accordance with Section 3.5 of
the License Agreement. Upon Licensor's request, Licensee shall furnish to
Licensor, at no expense to Licensor, samples of all literature and materials
containing the Licensed ▇▇▇▇ that Licensee distributes or intends to distribute.
Licensor shall have the right to control the quality of all marketing materials
bearing the Licensed ▇▇▇▇ and Licensee's use of the Licensed ▇▇▇▇ solely as
provided herein. If Licensor believes that the Licensed ▇▇▇▇ is being used in a
manner that could diminish License's rights in or protection of the Licensed
▇▇▇▇, Licensee agrees, at Licensee's sole cost and expense, to make whatever
reasonable changes and/or corrections Licensor deems necessary to protect the
Licensed ▇▇▇▇.
(e) Licensee agrees that it shall not engage, participate or otherwise become
involved in any activity or course of action that diminishes and/or tarnishes
the image and/or reputation of the Licensed Marks.
(f) Licensee agrees to comply with all applicable local, state, federal and
foreign laws and, at all times, to conduct its activities under this Agreement
in a lawful manner.
(g) Licensee agrees to use the Licensed Marks in accordance with and only on or
in connection with the Product.
4. Use and Display of Licensed ▇▇▇▇.
(a) Licensee acknowledges and agrees that the presentation and image of the
Licensed
33
Marks should be uniform and consistent with respect to all services, activities
and products associated with the Licensed Marks. Accordingly, Licensee agrees to
use the Licensed Marks solely in the manner which Licensor shall specify from
time to time in Licensor's sole discretion. In particular, Licensee agrees to
use the Licensed Marks as adjectives, coupled at least the first time they are
used 'in marketing material, brochures, advertisements, manuals or other
documents with a generic term (for example: SurgX' liquid) and not as verbs or
nouns.
(b) All usage by Licensee of the Licensed Marks shall include the registered or
common law trademark symbol and shall be in the following form, as appropriate:
SurgX' or SurgeTape(Trademark). All marketing materials printed, distributed or
electronically transmitted by Licensee and containing the Licensed Marks shall
include the appropriate one of the following notices:
1) SurgX' is a registered trademark of SurgX Corporation, or
2) SurgeTape(Trademark) is a trademark of SurgX Corporation.
5. Term and Termination.
(a) This Agreement shall commence on the Effective Date and shall continue in
effect for a period coterminous with the term of the License Agreement, unless
earlier terminated in accordance with the terms and conditions set forth herein.
(b) This Agreement shall automatically terminate upon termination (for whatever
reason) of the License Agreement. If under the License Agreement Licensor
extends to Licensee a sell-off period within which to sell the Product to
certain existing customers of Licensee, Licensee shall have the right to
continue using the Licensed Marks in connection with its marketing and
distribution efforts only for such Products and only for the duration of such
sell-off period.
(c) This Agreement and the license granted herein may be terminated by Licensor
if licensee falls to perform or comply with a material provision of this
Agreement and such breach or default is not cured by Licensee within thirty (30)
days after written notice of termination is received by License.
(d) Except as expressly set forth *in Section 5(b) above, Licensee shall
immediately cease all use of the Licensed ▇▇▇▇ upon expiration or termination of
this Agreement.
6. Cooperation and Protection.
(a) Licensee agrees to reasonably cooperate with and assist Licensor in
protecting and defending the Licensed Marks and shall promptly notify Licensor
in writing of any infringements, claims or actions by others (which come to the
attention of Licensee) in derogation of either of the Licensee Marks; provided,
however, that Licensor shall have the
34
sole right to determine whether any action shall be taken on account of any such
infringement, claim or action. Licensee shall not take any action on account of
any such infringement, claim. or action without the prior written consent of
Licensor. (b) Licensee agrees not to apply for registration of the Licensed
Marks (or any marks confusingly similar thereto) anywhere in the Territory.
Licensor may elect to apply for registration of the Licensed ▇▇▇▇ in a
particular country(ies) within the Territory at its expense, and, in such event
and if applicable, Licensee agrees to reasonably assist and cooperate with
Licensor in connection therewith.
7. Indemnification.
Licensee agrees to defend, indemnify and hold Licensor harmless from and against
any and all costs and expenses (including reasonable attorneys' fees),
liabilities, damages or other loss arising out of Licensee's actions or omission
to act under this Agreement or Licensee's organization, business or activities.
8. Independent Contractors.
The parties hereto are independent contractors and are not partners, joint
venturers or otherwise affiliated, and neither party has any right or authority
to bind the other in any way.
9. Assignment.
Licensee may not assign this Agreement or any of its rights or obligations under
this Agreement without the prior written consent of Licensor; provided, however,
Licensee may assign or delegate any of its rights or obligations under this
Agreement to an Affiliate with notice to Licensor (and without Licensor's
consent), provided Licensee remains liable for its performance under this
Agreement.
10. Notice.
Any notice pursuant to this Agreement shall be in writing and shall be deemed
given (i) when delivered by hand or mail, (ii) when transmitted by telecopies,
with confirmation of receipt; provided that a copy is sent at about the same
time by registered or certified mail, return receipt requested, or (iii) three
(3) days after being sent by Express Mail, Federal Express or other express
delivery service, to the addressee at the following addresses or telecopier
numbers (or to such other address or telecopier number as a party may specify
from time to time by notice):
35
If to Licensor: SurgX Corporation
Attention: President
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Licensee: Bussmann Division of ▇▇▇▇▇▇-▇▇▇▇▇▇
Company
Attention: President
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to: ▇▇▇▇▇▇ Industries, Inc.
Attention: General Counsel
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ 772 10
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
11. General.
(a) Amendment, Modification and Waiver. The failure of either party to enforce
its rights or to require performance by the other party of any term or condition
of this Agreement shall not be construed as a waiver of such rights or of its
right to require future performance of that term or condition. Any amendment or
modification of this Agreement or any waiver of any breach of any term or
condition of this Agreement must be in a writing signed by both parties in order
to be effective, and any such waiver shall not be construed as a waiver of any
continuing or succeeding breach of such term or condition., a waiver of the term
or condition itself or a waiver of any right under this Agreement.
(b) Governing Law. This Agreement shall be governed and interpreted under the
laws of the State of Delaware without regard to the conflicts of interest
provisions thereof.
(c) Headings. Headings and captions are for convenience of reference only and
shall not be deemed to interpret, supersede or modify any provision of this
Agreement.
(d) Severability. In the event that any provision of this Agreement shall be
determined to be illegal or unenforceable, that provision will be limited or
eliminated to the minimum extent necessary so that this Agreement shall
otherwise remain in full force and effect and enforceable.
(e) Entire Agreement. Upon execution by both parties, this Agreement shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersedes all discussions, negotiations, agreements and past
dealings, either oral or written,
36
between or among the parties relating to the subject matter hereof, including
but not limited to the Trademark Agreement having an Effective Date of
_________________________________, 1996 by and between the parties hereto.
(f) Dispute Resolution. Any dispute or claim arising out of, or in connection
with, this Agreement which is to settled to the mutual satisfaction of the
parties within thirty (30) days (or such longer period as may be mutually agreed
upon) from the date that either party informs the other in. writing that such
dispute or disagreement exists, shall be submitted to mediation conducted by a
mediator mutually acceptable to the parties, In the event the parties cannot
resolve the dispute or claim through mediation, then the claim or dispute shall.
be finally settled by binding arbitration in the counties of Alameda, San Mateo
or Santa Clara, California, in accordance with the rules of the American
Arbitration Association by three (3) arbitrators appointed in accordance with
said rules in effect on the date that such notice is given. The decision of the
arbitrators shall be final and binding upon. the parties and judgment upon any
award rendered by all or a majority of the arbitrators may be entered in any
court of competent jurisdiction. Each party shall bear the cost of preparing its
case. The cost of the arbitration, including the fees and expenses of the
arbitrators, will be shared equally by the parties unless the arbitrators' award
otherwise provides. The parties agree that, any provision of applicable law
notwithstanding, they will not request, and the arbitrators shall not have
authority to award punitive damages against any party or parties. Either party
may request a court to provide interim or provisional relief and such a request
shall not be deemed incompatible with the agreement to arbitrate or as a waiver
of that agreement.
(g) Survival. Sections 2(e, 5(b), 6(b), 7, 11(b) and 11(f) hereof shall survive
the termination of this Agreement.
(h) Counterparts. This Agreement may be executed in any number of counterparts
with the same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed an original of
this Agreement,
37
In Witness Whereof, the parties hereto have each caused this Agreement
to be executed by their authorized representatives as of the date first above
written.
SURGX CORPORATION ▇▇▇▇▇▇-▇▇▇▇▇▇ COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Printed Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: CFO Title:
38
ATTACHMENT 4.1
Delivery Schedule for
Technical Information
1. SurgX Specification and Manufacturing Procedures Control Documents
2. R5-11 Environmental Test Results
3. SurgX ESD QC Test Procedure
All items to be delivered on or before July 22, 1996.
(list Delivery Schedule for SurgeTape Technical Information here.)
39
ATTACHMENT 9.1
526 0848 Foldback Switching Material and Devices
514 2263 Surface Mount Device with Overvoltage Protection Feature
5189 387 Surface Mount Device with Foldback Switching Overvoltage Protection
Feature
506 8634 Overvoltage Protection Device and Material
497 7357 Overvoltage Protection Device and Material
524 8517 Paintable/Coatable Overvoltage Protection Devices and Devices Made
Therefrom
40
ATTACHMENT 11.1
Licensor's cost of the Liquid Polymer Material and SurgeTape shall equal
Licensor's standard costs for the Liquid Polymer Material and SurgeTape
including direct and indirect labor and associated fringe benefits, scrap,
perishable tooling, supplies, and maintenance on machinery and equipment. Only
costs directly associated with the manufacture of Liquid Polymer Material and
SurgeTape will be included in standard costs.
41
ATTACHMENT 11.4
Escrow Agreement
42
ESCROW AGREEMENT
BETWEEN
SURGX CORPORATION
(Licensor)
AND
▇▇▇▇▇▇-▇▇▇▇▇▇ COMPANY
(Licensee)
AND
BURNS, DOANE, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
(Escrow Agent)
43
ESCROW AGREEMENT
Table of Contents
Page
-----
1. Deposits ............................................................. 1
2. Representations of Licensor to Licensee............................... 2
3. Notice of Default .................................................... 2
4. Disputes.............................................................. 2
5. Payment to Escrow Agent............................................... 3
6. Termination........................................................... 3
7. Waiver, Amendment or Modification; Severability....................... 3
8. Notices............................................................... 3
9. Limitation on Escrow Agent's Responsibility and Liability............. 3
10. Counterparts.......................................................... 4
Schedule A Description of Materials Containing the Escrow Information Relating
to the Manufacture of the Liquid Polymer Material and SurgeTape
44
ESCROW AGREEMENT
ESCROW AGREEMENT dated as of August ____, 1997 by and among SurgX
Corporation, having its principal offices at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ (hereinafter the "Licensor"); ▇▇▇▇▇▇-▇▇▇▇▇▇ Company, a Delaware
corporation having its principal offices at ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ (hereinafter the "Licensee"); and Burns, Doane, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP,
a law firm having an office at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ (hereinafter the "Escrow Agent").
WITNESSETH:
WHEREAS, the Licensor and the Licensee have entered into a Intellectual
Property Rights License ("License Agreement"), a copy of which is appended
hereto and made a part hereof, pursuant to which the Licensor has agreed to
license to the Licensee patents, patent applications, information, technology
and rights relating to Licensed Products which incorporate the Liquid Polymer
Material and SurgeTape; and
WHEREAS, it is the policy of the Licensor not to disclose the
information to allow another party to self-manufacture the Liquid Polymer
Material and SurgeTape including technical and production know-how, drawings,
designs, specifications, formulas, data, trade secrets and other information
relating to the manufacture of the Liquid Polymer Material and SurgeTape
("Escrow Information") except as provided in an applicable Escrow Agreement; and
WHEREAS, Licensor and Licensee agree that upon the occurrence of
certain events described in Section 3(a) hereof, the Licensee shall be able to
obtain the Escrow Information for the Liquid Polymer Material and SurgeTape, and
accordingly, the Licensor agrees to deliver said Escrow Information to the
Escrow Agent; and
WHEREAS, capitalized terms not otherwise defined herein shall have the
meaning set forth in the License Agreement;
45
NOW, THEREFORE, in consideration of the mutual covenants contained for
other valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the Licensor, the Licensee and the Escrow Agent hereby act and
agree as follows:
1. Deposits
The Escrow Agent agrees to accept from the Licensor the Escrow
Information (as more fully described in Schedule A hereto) and revisions thereof
as provided in Section 2 hereof, The Escrow Agent will issue to the Licensor a
receipt for the Escrow Information upon delivery, The Escrow Information held by
the Escrow Agent shall remain the exclusive property of the Licensor, and the
Escrow Agent shall not use the Escrow Information or disclose the same to any
third party except as specifically provided for herein. The Escrow Agent will
hold the Escrow Information in safekeeping at its offices hereinabove indicated
unless and until the Escrow Agent receives notice pursuant to the terms of this
Agreement that the Escrow Agent is to deliver the Escrow Information. to
Licensee, in which case the Escrow Agent shall deliver the Escrow Information to
Licensee, subject, however, to the provisions of this Escrow Agreement.
2. Representations of Licensor to Licensee
Licensor represents and warrants to Licensee that: (i) the Escrow
Information, as it concerns the Liquid Polymer Material, constitutes all of the
information necessary to allow a reasonably skilled engineer, without reference
to any other material or the help of any other person to manufacture the Liquid
Polymer Material; (ii) the Escrow Information, as it concerns the SurgeTape,
constitutes all of the information known to Licensor that pertains to
manufacture of the SurgeTape; and (iii) Licensor will promptly supplement the
Escrow Information delivered hereunder with all Improvements thereof developed
by Licensor from time to time pursuant to the License Agreement so that the
Escrow Information constitutes the most current information available relating
to the manufacture of the Liquid Polymer Material and SurgeTape.
3. Notice of Default
(a) The Licensor shall be deemed to be in default of its
responsibilities to Licensee for purposes of this Escrow Agreement if: (i)
Licensor fails to meet the obligations referred to in Section 11.3(i) of the
License Agreement; (ii) Licensor becomes insolvent, or a case or
46
proceeding under bankruptcy, insolvency or similar law is commenced by or
against Licensor and is not dismissed within 45 days or Licensor makes a general
assignment for the benefit of creditors; or (iii) if any event of force majeure
disrupts the supply of Liquid Polymer Material and SurgeTape to Licensee which
disruption continues for a period of 60 days and Licensor fails to find an
alternate source to supply the Liquid Polymer Material and SurgeTape to Licensee
or allow Licensee to self-manufacture the Liquid Polymer Material and SurgeTape.
Licensee shall give a sworn statement (the "Notice of Default") to Licensor of
any such default by the Licensor stating that such default has not been cured
with a copy of such notice to the Escrow Agent.
(b) If the Licensor desires to dispute the Notice of Default, the
Licensor shall, within ten business (10) days after the receipt of the copy of
the Notice of Default from the Licensee, deliver to Licensee a sworn statement
(the "Affidavit") saying that no default has occurred or such default has been
cured and Licensor shall provide a copy of such Affidavit to the Escrow Agent,
whereupon the provisions of Section 4 hereof will become applicable. If the
Escrow Agent receives the Affidavit within said ten (10) business days, the
Escrow Agent shall continue to hold the Escrow Information in accordance with
this Escrow Agreement. If the Escrow Agent does not receive the Affidavit within
said ten (10) business days, the Escrow Agent is authorized and directed to
deliver the Escrow Information to the Licensee.
(c) Following a release of the Escrow Information as provided in
Section 3, Licensee shall have the non-exclusive right to use the released
material as and only as authorized by Section 11 of the License Agreement.
Additionally, Licensee shall be required to maintain the confidentiality of the
related materials and technology in accordance with the terms of the License
Agreement.
4. Disputes
(a) In the event that Licensor files the Affidavit with the Escrow
Agent in the manner and within the time period set forth in Section 3(b) hereof,
the Escrow Agent shall not release the Escrow Information to Licensee except in
accordance with (i) a final decision of the arbitration panel as hereinafter
provided, or (ii) receipt of an agreement with notarized signatures of both
Licensor and Licensee, authorizing the release of the Escrow Information to
Licensee.
47
(b) Disputes arising under this Agreement shall be referred immediately
to, and finally settled by, binding arbitration pursuant to the provisions of
Section 20 of the License Agreement. The Escrow Agent shall give prompt effect
to any authenticated arbitration award. This agreement to arbitrate shall
survive termination of this Agreement.
5. Payment to Escrow Agent
As payment for its services hereunder, the Licensor shall reimburse the
Escrow Agent for its reasonable out-of-pocket expenses incurred in connection
with the discharge by the Escrow Agent of its duties and responsibilities under
this Escrow Agreement.
6. Termination
This Escrow Agreement shall terminate on the termination of the License
Agreement or upon the mutual written agreement of Licensor and Licensee.
7. Waiver, Amendment or Modification;
This Escrow Agreement shall not be waived, amended, or modified except
by the written agreement of all the parties hereto. Any invalidity, in whole or
in part, of any provision of this Escrow Agreement shall not affect the validity
of any other of its provisions.
8. Notices
All notices required to be given hereunder shall be in writing and
shall be deemed given if delivered personally (upon recipient's actual receipt),
if mailed by certified or registered mail, return. receipt requested (upon the
date of delivery to recipient), or if by nationally recognized air courier which
confirms delivery (upon date of delivery to the recipient), to the parties at
their respective addresses hereinabove written, or at such other address as
shall be specified hereinabove in. writing to all other parties.
9. Limitation on Escrow Agent's Responsibility and Liability
(a) The Escrow Agent shall maintain the Escrow Information in a safe
and shall provide the same degree of care for the Escrow Information as it
maintains for its valuable documents and those of its customers lodged in the
same location.
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(b) The Escrow Agent shall be protected in acting upon any written
notice, request, waiver, consent, receipt or other paper or document furnished
to it, not only in assuming its due execution and the validity and effectiveness
of its provisions but also as to the truth and acceptability of any information
therein contained, which it in good faith believes to be genuine and what it
purports to be.
(c) In no event shall the Escrow Agent be liable for any act or failure
to act under the provisions of this Escrow Agreement except where its acts are
the result of its gross negligence or willful misconduct. The Escrow Agent shall
have no duties except those which are expressly set forth herein, and it shall
not be bound by any notice of a claim, or demand with respect thereto, or any
waiver, notification, amendment, termination or rescission of this Escrow
Agreement, unless in writing received by it, and, if its duties are affected,
unless it shall have given its prior written consent thereto.
(d) The Licensor and Licensee hereby agree, jointly and severally, to
indemnify the Escrow Agent against any loss, liability, or damage (other than
any caused by the gross negligence or willful misconduct of the Escrow Agent),
including reasonable costs of litigation and counsel fees, arising from and in
connection with the performance of its duties under this Agreement. The Licensor
and Licensee will not bring a suit or file a claim against the Escrow Agent for
any act or failure to act under the provisions of this Escrow Agreement except
where its acts are the result of its gross negligence or willful misconduct.
10. Counterparts
This Escrow Agreement may be executed in any number of counterparts
with the same effect as if the signatures to each counterpart were upon a single
instrument, and all such counterparts together shall be deemed an original of
this Escrow Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be duly executed as of the year and date first above written..
SURGX CORPORATION ("Licensor")
Attest:
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇-▇▇▇▇▇▇ COMPANY
("Licensee")
Attest: By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
BURNS, DOANE, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
("Escrow Agent")
Attest:
By:
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