Exhibit 10.21
SYNTRON, INC. - BENTHOS, INC.
HYDROPHONE LICENSE AGREEMENT
This Agreement made effective as of the fifth day of December, 1996, regardless
of the date of last signature hereto, is by and between SYNTRON, INC., a for
profit corporation duly organized and existing under the laws of the State of
Delaware and having an office at 17200 Park Row, Houston, Texas 77084-4925
(LICENSOR) and BENTHOS, INC., a for profit corporation duly organized and
existing under the laws of the State of Massachusetts and having an office at 49
Edgerton Drive, North Falmouth, Massachusetts 02556-2826 (LICENSEE).
WITNESSETH
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WHEREAS, LICENSOR is dedicated to fostering and advancing scientific research
within its own organization and is responsible for developing inventions made by
employees of LICENSOR by evaluating invention disclosures, pursuing patents and
licensing patents which are obtained thereon; and
WHEREAS, LICENSOR is the owner of certain "Proprietary Rights" as later defined
herein, and has the right to grant licenses thereunder; and
WHEREAS, LICENSOR'S Hydrophone design arose out of research performed at the
place of business of LICENSOR and in part by the inventor named in the patent
described in Proprietary Rights, which inventor has the capabilities and
experience to exploit Proprietary Rights; and
WHEREAS, LICENSEE recognizes the validity of the LICENSOR'S Proprietary Rights;
and
WHEREAS, LICENSEE is capable of manufacturing, distributing, using, leasing and
selling the "Licensed Product" as later defined herein, and LICENSEE desires to
obtain an exclusive license under the Proprietary Rights to manufacture, use,
distribute and sell the Licensed Product upon the terms and conditions
hereinafter set forth;
NOW, therefore, in consideration of the premises and mutual covenants contained
herein, and with intent to be legally bound, the parties hereto agree as
follows:
DISPUTES ARISING BETWEEN THE PARTIES HERETO SHALL BE RESOLVED BY BINDING
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ARBITRATION AS PROVIDED HEREINAFTER.
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Page 1 of 14
ARTICLE I - DEFINITIONS
For purpose of this Agreement, the following words and phrases shall have the
following meanings:
1.1 "LICENSEE" shall refer to the corporate entity Benthos, Inc. and all
entities a) in which LICENSEE owns more than fifty percent (50%) equity
interest or b) over which LICENSEE may, directly or indirectly,
effectively influence or control the conduct of such entity.
1.2 "LICENSOR" shall refer to the corporate entity Syntron, Inc. and all
entities a) in which LICENSOR owns more than fifty percent (50%) equity
interest or b) over which LICENSOR may, directly or indirectly,
effectively influence or control the conduct of such entity.
1.3 "Proprietary Rights" shall mean all of the following LICENSOR intellectual
property:
a. United States Patent Application No. 08/545,111 thereon; and
United States Patent Application No. 08/579,327 thereon.
b. Any reissues, extensions, divisional applications,
continuations, or continuations in part of the Patent
described in (a) above, and any Patents issuing as a result of
the Patent Applications thereon; and described in (a) above;
and
c. All foreign counterparts to the items described in (a) and (b)
above; and
d. All information transmitted to Benthos, Inc. via the
information packet labeled "Proposed Syntron Hydrophone
10/l/96"; and
e. Other trade secrets, confidential information, know-how and
other information related to the subject matter hereof
conveyed by any means to LICENSEE by LICENSOR; and
f. All information based upon the LICENSOR's intellectual
property described in items (a) through and including (e)
above including, but not limited to, information developed by
LICENSEE hereunder and any derivative of, enhancement to, or
other extension of LICENSOR's intellectual property provided
by LICENSOR to LICENSEE hereunder or related hereto.
1.4 A "Licensed Product" shall mean any product or material which is
covered in whole or in part by Proprietary Rights, or is manufactured
using a process which is covered in whole or in part by Proprietary
Rights, that is manufactured by LICENSEE for its own use or Commercial
Sale.
1.5 A "Licensed Process" shall mean any process which is covered in whole
or in part by Proprietary Rights and/or LICENSEE's trade secrets,
confidential information, know-how, and other information relating
thereto, including without limitation, LICENSEE's proprietary technical
information pertaining to LICENSEE's existing manufacturing processes
and know-how imparted in the Documentation as later defined herein.
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1.6 "Net Selling Price" shall mean the actual gross selling price of
Licensed Products collected by LICENSEE upon a Commercial Sale by
LICENSEE, excluding all packaging, instructional, shipping, insurance,
taxes or other charges made to any purchaser and evidenced as a
separately priced item on LICENSEE's invoice to the purchaser, and also
excluding reasonable and customary trade discounts, documented
commissions to third party sales representatives and/or agency fees
and/or similar documented selling costs, if any, provided any
combination of which shall not exceed fifteen percent (15%) of the
gross selling price and none of such costs are a component of
LICENSEE's auditable overhead rates, and refunds or credits allowed or
taken by the purchaser on account of returns or defective articles.
1.7 "Commercial Sale" shall mean any transaction which transfers to any
purchaser, who is not in any way related to LICENSEE, physical
possession of and title to Licensed Products, after which transfer
LICENSEE has no right or power to determine directly or indirectly the
purchaser's resale price, if any, or to benefit directly or indirectly
from such resale price other than by increased sales of the Licensed
Products.
1.8 "Documentation" shall mean the documentation to be generated by
LICENSEE hereunder to a complete set of manufacturing (including but
not limited to piece part, subassembly and related specifications)
drawings, process documentation, work instructions, test procedures and
software, and design verification parameters and performance criteria,
and any future updates thereto as and when initiated by LICENSEE.
ARTICLE II - GRANT
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2.1 Subject to the terms and conditions hereof, LICENSOR hereby grants to
LICENSEE and LICENSEE hereby accepts an exclusive, worldwide license to
make, distribute, use, and sell the Licensed Products, to practice the
Licensed Processes, and to utilize the Documentation for a period of five
(5) years commencing on the effective date of this Agreement. The
foregoing notwithstanding, LICENSEE and LICENSOR expressly acknowledge and
agree that the granting by LICENSOR to LICENSEE of such exclusive license
shall only limit for a period of three (3) years commencing on the
effective date of this Agreement LICENSOR from making, or granting a
license to a current or future LICENSOR Affiliate entity to make on behalf
of LICENSOR or LICENSOR Affiliate entity, the Licensed Product, practice
the Licensed Processes and utilize the Documentation, for LICENSOR's or
LICENSOR Affiliate entity's use, lease, or sale as a component part of a
product of LICENSOR or LICENSOR's Affiliate entity. The term of this
Agreement may be extended by written agreement of the parties at any time
prior to the expiration of the then current term of the Agreement. In the
event of expiration or termination of the exclusive License granted by
LICENSOR to LICENSEE hereinabove, LICENSEE shall have a non-exclusive
worldwide license to make, distribute, use, and sell the Licensed
Products, to practice the Licensed Processes, and to utilize the
Documentation, on the same terms and conditions as this Agreement.
Concurrently, LICENSEE hereby grants a reciprocal, royalty free,
perpetual, non-exclusive license to LICENSOR with respect to utilization
of LICENSEE's proprietary information embedded in and/or a part of the
Licensed Processes and Documentation. The provisions herein with respect
to these non-exclusive licenses shall survive the termination of this
Agreement.
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2.2 LICENSOR represents that it neither owns nor controls nor is aware of
patent rights or other proprietary rights to technology which would
prevent LICENSEE from enjoying the benefits of the rights granted to
LICENSEE herein.
2.3 LICENSEE shall use all reasonable commercial efforts to bring to market
the Licensed Products or Licensed Processes, including without limitation
the generation of the Documentation. The initial design verification
parameters and performance criteria have been mutually agreed between the
parties hereto and are documented in Appendix A attached hereto and made a
part hereof. The Documentation shall be deemed Work For Hire due to
contemplation of the compensation to be provided to LICENSEE by LICENSOR
in accordance with paragraph 4.1(B) hereof and shall be licensed to
LICENSEE by LICENSOR under this Agreement and be subject to the terms and
conditions hereof. Due to potential LICENSOR commercial impact known to
and hereby acknowledged by LICENSEE, should LICENSEE fail to bring
Licensed Products or Licensed Processes to market not later than 5 January
1998 with a review of the status of final determination of the design path
not later than 30 November 1997 and such failure is attributable to
LICENSEE and LICENSOR is not in default hereunder, this Agreement may be
terminated at the sole discretion of LICENSOR with forty-five (45) days'
notice to LICENSEE notwithstanding other provisions herein to the contrary
and the Documentation as it exists at the time of such termination shall
be owned by LICENSOR and delivered to LICENSOR by LICENSEE at the time of
such termination. All obligations of either LICENSEE or LICENSOR that by
their nature would survive termination of this Agreement for any reason
herein provided shall so survive.
2.4 LICENSEE agrees that any improvement, enhancement or derivative
information or product it develops to, or that results from, the
Proprietary Rights during the term of this Agreement, or any extension
thereto, shall be disclosed to LICENSOR. LICENSOR shall have equal
ownership of and/or proprietary rights to such improvement, enhancement or
derivative information or product. LICENSEE's rights to use of any such
improvement, enhancement or derivative information or product LICENSEE
develops to, or that results from, the Proprietary Rights shall be equally
licensed to LICENSEE hereunder as the original subject matter of this
Agreement. In the event either party intends to protect said improvement,
enhancement or derivative information or product it develops to, or that
results from, the Proprietary Rights by filing patents, such party shall
provide notice to the other. In the event that such party is LICENSEE and
where the practice of resulting patent applications and patents would
infringe Proprietary Rights, LICENSEE shall provide to LICENSOR an
exclusive, perpetual, worldwide, royalty-free license under such patent
applications and patents for such rights as may have been granted under,
or derived from, such patent applications and patents. Where the practice
of resulting patent applications and patents would not infringe
Proprietary Rights, LICENSEE shall provide to LICENSOR a non-exclusive,
perpetual, worldwide, royalty-free license under such patent applications
and patents for such rights as may have been granted under, or derived
from, such patent applications and patents.
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ARTICLE III - EXPORT CONTROLS
3.1 It is understood that LICENSOR and LICENSEE are subject to United States
law and regulations controlling the export of technical data, computer
software, laboratory prototypes and other commodities, and that their
obligations hereunder are contingent on compliance with applicable United
States export laws and regulations. The transfer of certain technical data
and commodities may require a license from the cognizant agency of the
United States Government and/or written assurances by LICENSEE that
LICENSEE shall not export data or commodities to certain foreign countries
without prior approval of such agency. LICENSOR neither represents that a
license shall not be required nor that, if required, it shall be issued.
LICENSEE shall be responsible for payment of all reasonable costs,
attendant to securing said licenses.
ARTICLE IV - FEE, COST BASIS/REMUNERATION, ROYALTIES, AND REPORTING
4.1. For the rights, privileges and license granted hereunder, LICENSEE shall
pay a license fee, provide preferred selling price and delivery status,
and pay royalties to LICENSOR in the manner hereinafter provided to the
end of the term of the Proprietary Rights, which shall be until the last
patent to expire of all patents included within Proprietary Rights, or
until this Agreement shall be terminated as hereinafter provided:
(A) LICENSEE agrees to pay LICENSOR a License Issue fee in the amount of
Ten Dollars ($10.00);
(B.1) LICENSOR shall pay LICENSEE an amount equal to $ 158,500.00 (One
Hundred Fifty-eight Thousand Five Hundred Dollars) for the
completion of the engineering required to place the Licensed Product
in a high volume manufacturing design state including without
limitation the generation of the Documentation. The fee hereinabove
to be paid by LICENSOR to LICENSEE will include full compensation
for all engineering design, manufacturing design, the generation and
copying of the Documentation and any future updates thereto as and
when initiated by LICENSEE and prototype materials required to
fabricate parts for proof of design. Said fee shall be deemed earned
by LICENSEE on 1) the successful completion of testing to the
satisfaction of LICENSOR and LICENSEE to a mutually agreed upon set
of performance specifications documented in Appendix B attached
hereto and made a part hereof and 2) delivery to LICENSOR by
LICENSEE of a complete and accurate reproducible copy of the then
current Documentation. Once the fee is earned as stated above,
payment of said fee shall be effected in stages as follows:
a) By issuance of an Invoice with Net payment terms for, and
payment of, $ 108,500.00 which shall be due and payable on the later
of 5 January 1998 or 30 days following the date upon which the total
fee is deemed earned as stated above, and
b) By retention by LICENSEE of $0.50/unit of the $2.20/unit
portion of the royalty due LICENSOR on the first 100,000 units sold
by LICENSEE to a third party in accordance with paragraph 4.1.(F)
hereof.
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The work product of LICENSEE's services, including results, and all
ideas, plans, developments, and inventions which LICENSEE conceives
or reduces to practice during the course of performance under this
subparagraph 4.1.(B) and this Agreement shall be the exclusive
property of LICENSOR. This information, material, plans, and any
such ideas or inventions shall be deemed LICENSOR Proprietary
Information and shall not be disclosed to anyone outside of LICENSOR
or used by LICENSEE outside the terms and conditions of this
Agreement or used by others without the prior written consent of
LICENSOR. Such work product which qualifies as a "work for hire"
under the copyright laws of the United States shall be the exclusive
property of LICENSOR as "work for hire". All right, title, and
interest, including any copyright in and to any written data which
does not qualify as a "work-for-hire" shall be deemed to have been
automatically transferred to LICENSOR from the date of inception
thereof. Upon LICENSOR's request, LICENSEE shall execute any
document and render such other assistance as reasonably necessary to
perfect full right, title, and interest worldwide in the written
data, including formal conveyance of copyright. Written data shall
not be published or submitted for publication by LICENSEE without
the prior written approval of LICENSOR. Further, if any such
article, paper, treatise, or report includes work previously
copyrighted by LICENSEE, LICENSEE hereby grants to LICENSOR a
nonexclusive, worldwide, irrevocable, paid-up license under such
copyrights to reproduce, distribute, and use the works in any
manner.
During the period of this Agreement and thereafter at any reasonable
time when called upon to do so by LICENSOR, LICENSEE shall execute
patent applications, assignments to LICENSOR, and other papers and
shall render such other assistance that LICENSOR believes necessary
to secure for LICENSOR the full protection and ownership of all
rights in and to the work product of the services performed by
LICENSEE. The filing of patent applications on inventions made by
LICENSEE shall be decided by LICENSOR and shall be for such
countries as LICENSOR shall elect. LICENSOR shall bear all the
expenses in connection with the preparation, filing, and prosecution
of applications for patents and for all matters provided in this
subparagraph requiring the time and/or assistance of LICENSEE as to
inventions. Further, LICENSOR shall pay LICENSEE the hourly rate of
$ 75.00 for services which LICENSEE performs in connection with
inventions and patent applications which may be required by LICENSOR
whether during the term of this Agreement or after expiration or
termination of this Agreement. LICENSEE warrants that the
engineering design, manufacturing design, the generation and copying
of the Documentation and any future updates thereto shall not
violate any third party's intellectual property rights nor include
any unauthorized disclosure of any third party's intellectual
property and agrees to, at its sole expense, at all times during the
term of this Agreement and thereafter indemnify, defend, and hold
LICENSOR, their trustees, officers, employees and affiliates
harmless against any and all costs and/or liabilities of whatever
nature that may result from any claim by any third party for
infringement of such third party's intellectual property rights. The
aforementioned documentation deemed "work for hire" shall be clearly
marked as the property and proprietary information of LICENSOR.
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(B.2) LICENSOR shall pay LICENSEE an amount equal to $ 61,000.00
(Sixty-one Thousand Dollars) for production tooling required by
LICENSEE or LICENSEE's subcontractors to produce the Licensed
Product. The fee hereinabove to be paid by LICENSOR to LICENSEE will
include full compensation for all engineering design and
manufacturing for production tooling required by LICENSEE or
LICENSEE's subcontractors and any future updates thereto as and when
initiated by LICENSEE to produce the Licensed Product. Issuance of
an Invoice with Net 30 payment terms for, and the payment of, said
fee is contingent on 1) the successful completion of testing to the
satisfaction of LICENSOR and LICENSEE of Licensed Product
manufactured using the production tooling to be tested to a mutually
agreed upon set of performance specifications documented in Appendix
B attached hereto and made a part hereof and 2) delivery to LICENSOR
by LICENSEE of a complete and accurate listing of such production
tooling with values per individual item, the extended total of which
shall equal said fee, and the physical location address for each
individual item. Title to such production tooling shall vest in
LICENSOR upon payment of such invoice. LICENSOR shall have complete
and unhindered access to such production tooling at all times.
LICENSEE shall be responsible for maintenance and replacement of
such production tooling as long as LICENSEE derives benefit from its
use or until such time as LICENSOR shall take physical possession of
it.
(C) LICENSEE shall manufacture the Licensed Product to the
specifications agreed to for the use of LICENSOR and all other
customers that may have a need for this product regardless of these
other customers competitive position with LICENSOR.
(D) In consideration of granting said exclusive license to LICENSEE,
LICENSEE will provide most favored customer status to LICENSOR with
respect to any selling price and delivery of the Licensed Product to
LICENSOR. NO ROYALTIES ARE DUE LICENSOR ON THE VALUE OF PRODUCTS
SOLD TO LICENSOR. At all times that this license is exclusive to
LICENSEE, LICENSOR will not compete with LICENSEE in the Licensed
Product as an saleable end-item.
(E) LICENSEE is free to set the unit sales price of the Licensed Product
to any LICENSEE customer. The foregoing notwithstanding and by way
of indication of most favored customer status of LICENSOR, the Net
Selling Price of such unit sales price to any third party will not
be lower at any time than the actual gross selling price to LICENSOR
for like or lesser quantity purchase commitment.
(F) For all sales of the Licensed Product to any organization or entity
other than LICENSOR, LICENSEE shall pay to LICENSOR running
Royalties in the amount of five and one half percent (5.5 %) of the
Net Selling Price plus $ 2.20 per unit for each Commercial Sale of
Licensed Products by LICENSEE for the first 100,000 units sold by
LICENSEE to a third party and ten percent (10.0 %) of the Net
Selling Price only thereafter for each Commercial Sale of Licensed
Products by LICENSEE, said Royalty to be due and payable upon
delivery of the report due pursuant to Paragraph 4.5 hereof. In the
event a Commercial Sale of Licensed Products occurs together with
the sale or
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lease of a system or other product, (a) such royalty shall be
calculated solely on the Licensed Product, as no royalty shall be
payable with respect to any other portion of such system or product;
and (b) in the event the Net Selling Price of the Licensed Product
is not separately stated, the royalty shall be calculated based upon
the Net Selling Price from the most recent prior comparable
Commercial Sale of a separate Licensed Product.
4.2 No multiple royalties shall be payable solely for the reason that any
Licensed Products, its manufacture, use, or sale are or shall be covered
by more than one patent application, patent or certificate of registration
licensed under this Agreement.
4.3 Royalty payments shall be paid in United States dollars in Houston, Texas,
or at such other place as LICENSOR may reasonably designate.
4.4 LICENSEE shall keep full, true and accurate books of account and records
containing all particulars that may be necessary for the purposes of
showing the amounts payable to or by LICENSOR hereunder. Said books of
account shall be kept at LICENSEE's principal place of business or the
principal place of business of the appropriate division of LICENSEE to
which this Agreement relates. Said books and the supporting data shall be
open at all reasonable times for three (3) years following the end of the
calendar year to which they pertain, to the inspection of independent
CPA's to be proposed by LICENSOR and approved by LICENSEE, said approval
not to be unreasonably withheld, for the purpose of verifying LICENSEE's
royalty statement or compliance in other respects with this Agreement,
such inspection to occur no more than once each calendar year upon
reasonable prior notice to LICENSEE. The expense of such inspection shall
be borne by LICENSOR unless such inspection reveals a shortfall in
payments due to LICENSOR by LICENSEE or other violation of the terms and
conditions of this Agreement by LICENSEE in which case such expenses shall
be borne by LICENSEE.
4.5 The Royalty provided in Paragraph 4.1(F) shall be payable to LICENSOR
within in one (1) month after the end of each calendar quarter. LICENSEE
shall have the option of paying any portions of the royalty herein
provided at any time earlier than that specified. Each royalty payment to
LICENSOR shall include an appropriate statement of the gross revenues due
LICENSOR and shall identify the portion(s) of the Agreement under which
said royalty payments are made. In addition, each royalty payment shall be
accompanied by true and accurate reports giving such particulars of the
business conducted by LICENSEE during the period to which such payment
applies under this Agreement ending thirty (30) days prior to such payment
date as shall be pertinent to an accounting hereunder.
4.6 The royalty payments set forth in this Agreement shall, if overdue, bear
interest until payment at the maximum per annum rate permitted by
applicable law. The payment of such interest shall not foreclose LICENSOR
from exercising any other rights it may have as a consequence of the
lateness of any payment.
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ARTICLE. V - INFRINGEMENT
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5.1 Enforcement of Patent Rights. In the event LICENSEE alleges that a third
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party is infringing a right contained within Proprietary Rights, LICENSEE
shall immediately notify LICENSOR of said alleged infringement. LICENSOR
shall, in its sole discretion, determine whether an infringement is
occurring and shall take whatever actions it deems necessary to enforce
Proprietary rights. LICENSOR shall, within thirty (30) days after notice
thereof, inform LICENSEE how and to what extent it is pursuing such third
party. In the event LICENSEE deems such action to be insufficient,
LICENSEE shall have, with LICENSOR's prior written consent signed by an
officer of LICENSOR, such consent not to be unreasonably withheld, the
right, in LICENSOR's name, to pursue such infringer, as LICENSEE may
reasonably deem appropriate; provided, however, that in the event LICENSEE
takes such action in LICENSOR's name, it shall provide LICENSOR prior
written notice thereof, shall keep LICENSOR fully informed of the progress
thereof and shall act in a reasonable manner at all times in connection
with the prosecution thereof. In the event LICENSOR recovers any amounts
from such third party as a result of any action taken by LICENSOR,
LICENSOR shall deduct therefrom the out-of-pocket legal and related
expenses LICENSOR incurred in obtaining such amount, retain a percentage
of the remainder equal to the percentage that the royalty fee
hereinprovided is of the then current Net Selling Price and remit the rest
to LICENSEE. In the event LICENSEE recovers any amounts from such third
party as result of any action taken by LICENSEE, such amounts shall be
treated as a Net Selling Price hereunder, provided that LICENSEE shall
deduct therefrom the out-of-pocket legal and related expenses it incurred
in obtaining such amounts prior to paying Royalties thereon. LICENSOR may
bring and prosecute suits for infringement against others under the
Proprietary Rights. LICENSOR shall retain whatever financial recoveries
are obtained from said litigation and shall bear all the expenses of the
litigation.
5.2 Prosecution of Patents. LICENSOR shall, at its sole discretion and
----------------------
expense, diligently prosecute any patent applications included within
Proprietary Rights.
5.3 Third Party Actions. In the event a third party at any time brings a claim
-------------------
against LICENSEE alleging that LICENSEE's exercise of the Proprietary
Rights infringe any rights of such third party, LICENSOR shall, with the
reasonable cooperation of LICENSEE, defend LICENSEE against such claim at
the expense of LICENSOR and LICENSOR shall pay any settlement amount or
the damages that a court of competent jurisdiction awards, plus any other
costs and expenses incurred by LICENSEE in connection therewith provided
LICENSEE shall a) promptly notify LICENSOR in writing of any such claim,
b) allow LICENSOR to control such defense and any related settlement
negotiation, and c) cooperate with LICENSOR in the defense of any such
claim or any related settlement negotiations.
ARTICLE VI - LIABILITY AND INSURANCE
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6.1 LICENSEE, at its sole expense, shall at all times during the term of this
Agreement and thereafter indemnify, defend, and hold LICENSOR, their
trustees, officers, employees and affiliates harmless against any claims,
liabilities, judgments and expenses arising out of the
Page 9 of 14
death of or injury to any person or persons or out of any damage to
property and against any other claim of any kind resulting from the
production, manufacture, sale, advertising, distributing, use, sale or
transfer of Licensed Products or Licensed Processes pursuant to this
Agreement. LICENSOR shall give prompt written notice to LICENSEE of any
matter asserted by LICENSOR to be covered by this Section 6.1. LICENSEE
shall have the sole right to defend any matter covered by this Section
6.1.
6.2 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR MAKES
NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESSED
OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, AND VALIDITY OR NON-INFRINGEMENT OF
PATENT RIGHT CLAIMS WHICH ARE ISSUED OR PENDING. LICENSOR represents that
LICENSOR is not aware of any patent right claims pending with respect to
LICENSOR's Proprietary Rights as of the effective date of this Agreement.
6.3 The only rights being granted pursuant to this Agreement are those
specifically set forth in Article II herein and this Agreement is not to
be construed or implied in any way to create any additional rights, or
options to any rights with regard to the licensing of Proprietary Rights.
LICENSEE shall keep in confidence and secrecy not only the subject matter
of the rights herein conveyed, but also such trade secrets, confidential
information, know-how, and other information relating thereto as it
relates to the present Proprietary Rights. LICENSOR shall keep in
confidence and secrecy LICENSEE's trade secrets, confidential information,
know-how, and other information relating thereto, including without
limitation, LICENSEE's proprietary technical information pertaining to
LICENSEE's existing manufacturing processes and know-how. LICENSEE and
LICENSOR hereby covenant to maintain the other's confidential and
proprietary information in secrecy. The parties further agree that but for
the representations of the parties that such information is received in
confidence and will be maintained in confidence, the present Agreement
would not have been entered into. Each party is free to use the
information conveyed hereunder and such future information as is conveyed
by the other party during the life of the present Agreement subject to the
provisions hereof and after expiration of the present Proprietary Rights,
should this Agreement remain in force until such time. However, should
this Agreement be terminated for any reason, then each party shall be
forbidden from using the trade secrets, confidential information and other
proprietary information of the other party for ten (10) years after such
termination, except for such information as contained in Licensed Process
and Documentation and except as otherwise provided in Paragraph 2.1
hereof.
6.4 LICENSEE agrees it has obtained liability insurance with coverage in an
amount no less than $1,000,000.00 per occurrence. Adequate evidence, such
as a Certificate of Insurance, of the required coverage will be provided
by LICENSEE to LICENSOR's Manager of Purchasing, 17200 Park Row, Houston,
Texas 77084 and LICENSEE agrees to keep said office of LICENSOR informed
of any changes in coverage or carriers.
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ARTICLE VII - USE OF NAMES
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7.1 LICENSEE shall be free to use the name of LICENSOR in any advertising,
promotional or sales literature, provided that, in each case, LICENSEE has
obtained the prior written consent of an officer of LICENSOR, except that
LICENSEE may state that it is licensed by LICENSOR under one or more of
the patents and/or applications comprising the Proprietary Rights.
LICENSOR shall be free to use the name of LICENSEE, provided that, for
each such use, LICENSOR has obtained the prior written consent of
LICENSEE.
ARTICLE VIII -ASSIGNMENT
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8.1 Except as provided below, this Agreement is not assignable and any attempt
to do so shall be void.
8.2 This Agreement is made subject of the condition LICENSEE shall not become
bankrupt, insolvent or placed in the hands of a receiver or trustee, in
which event LICENSOR may, at its option, cancel this Agreement provided
that all sums of money owing to LICENSOR and all affirmative duties and
obligations hereunder shall survive such cancellation. If LICENSOR does
not so cancel this Agreement, this Agreement shall bind the heirs,
assigns, successors in interest, trustees, devises, executors and
administrators of the parties hereto in the same manner as is binding on
the signatory parties hereto.
8.3 LICENSEE may not transfer the present License except:
a) LICENSEE transfers substantially all its assets, and
b) LICENSEE shall advise LICENSOR at least thirty (30) days in advance
of any such contemplated transfer, and
c) LICENSEE shall provide the identity of the prospective transferee,
and
d) LICENSOR, at its sole discretion, is fully satisfied with the
qualifications of the prospective transferee, and
e) The prospective transferee shall agree in writing to be bound
by the terms and conditions hereof.
ARTICLE IX- PATENT MAINTENANCE
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9.1 So long as LICENSEE is generating sufficient Royalties hereunder to cover
the expense to do so, LICENSOR shall diligently maintain the Proprietary
Rights during the term of this Agreement at its expense.
ARTICLE X - TERMINATION
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10.1 If LICENSEE shall cease a) to carry on its business, or b) to produce
Licensed Product, or c) to maintain competitive market pricing for
Licensed Product, this Agreement shall subject to immediate termination at
the sole discretion of LICENSOR.
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10.2 Upon any material breach or default of this Agreement by LICENSEE,
LICENSOR shall have the right to terminate this Agreement and the rights,
privileges and license granted hereunder by forty-five (45) days' notice
to LICENSEE. Such termination shall become immediately effective upon the
expiration of said forty-five (45) day period, unless LICENSEE a) shall
have cured any such breach or default prior thereto, b) shall have been
granted a definite extension of such cure period in writing by LICENSOR,
or c) has demanded resolution under Article XI prior thereto.
10.3 LICENSEE shall have the right to terminate this Agreement at any time
after three (3) years on three (3) months' written notice to LICENSOR and
upon payment of all amounts due LICENSOR through the effective date of the
termination.
10.4 Termination under this Article, or any other termination provision
elsewhere expressed in this Agreement, shall not relieve LICENSEE of its
obligation to pay royalties due and owing at the time of said termination
or as otherwise due and owing under this Agreement. Termination of this
Agreement shall not relieve either party of any obligation which this
Agreement expressly provides shall survive termination of this Agreement
for any reason.
10.5 In the event of termination of this Agreement for any reason other than
default hereunder by LICENSEE, and should such termination occur before
the termination of the Proprietary Rights and thereby place LICENSEE in a
position of holding Licensed Product built in accordance with or pursuant
to the Proprietary Rights wherein LICENSEE would be unable to sell such
Licensed Product, in that event, LICENSOR shall be obligated to purchase
such inventory at a price to be mutually agreed, but not to exceed the
cost thereof plus twenty percent (20%).
ARTICLE XI - ARBITRATION
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11.1 BINDING ARBITRATION. ALL CONTROVERSIES AND/OR DISPUTES ARISING OUT OF THIS
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AGREEMENT SHALL BE DECIDED BY THREE (3) ARBITRATORS. WRITTEN NOTICE OF ANY
DISPUTE SHALL BE GIVEN BY THE AGGRIEVED PARTY, CLEARLY SPECIFYING THE
NATURE OF THE DISPUTE AND THE RELIEF REQUESTED, INCLUDING THE PARAGRAPH OF
THIS AGREEMENT IN QUESTION, IF ANY. IF THE DISPUTE CANNOT BE AMICABLY
RESOLVED (EVIDENCED BY WRITING SIGNED BY BOTH PARTIES) WITHIN THIRTY (30)
DAYS OF SUCH NOTICE, EITHER PARTY MAY SERVE THE OTHER WITH A WRITTEN
DEMAND FOR ARBITRATION PURSUANT TO THIS ARTICLE. WHERE LICENSEE HAS
DEMANDED THE ARBITRATION UNDER PARAGRAPH 10.2, THE THIRTY (30) DAY PERIOD
IN THE FOREGOING SENTENCE SHALL BE INAPPLICABLE.
11.2 Procedure
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11.2.1 Each party shall be responsible for one half of the cost of the
arbitrators. The arbitrators shall be selected as follows;
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11.2.1.1 The party demanding arbitration shall, together with its demand
for arbitration, submit the name of one arbitrator.
11.2.1.2 Within twenty (20) calendar days thereafter the party receiving
such demand shall respond with the name of an additional
arbitrator.
11.2.1.3 The two arbitrators so selected shall, within twenty (20)
calendar days after the selection of the second arbitrator,
select a third arbitrator. Failure of the two arbitrators so
selected to select a third arbitrator shall be referred to the
American Arbitration Association for immediate resolution.
11.2.2 All pre-hearing, hearing, and post-hearing procedures shall be governed
by the Commercial Arbitration Rules of the American Arbitration
Association then in effect, except as modified by this Agreement.
11.2.3 The site of the arbitration proceedings pursuant to this Article shall be
Boston, Massachusetts if commenced by LICENSOR and Houston, Texas if
commenced by LICENSEE.
11.2.4 All decisions of the arbitrators shall be by majority vote. The
arbitrators shall be bound to make specific findings of fact and reach
conclusions of law, based upon the submissions and evidence of the
parties. and shall issue a written decision explaining the basis for the
decision and award. Proceedings shall be concluded within sixty (60) days
of the date the third arbitrator is selected.
11.3 Court Actions During the pendency of any proceeding under Section 11.1 or
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11.2, neither party will commence any litigation relating to any dispute
under this Agreement and any litigation commenced prior to commencement of
any proceeding under Sections 11.1 or 11.2 shall be stayed pending the
outcome thereof. The parties agree to fully abide by the terms of any
arbitration award hereunder as final and binding. Judgment upon any award
may be entered and enforced by either party in any court of competent
jurisdiction.
ARTICLE XII - MISCELLANEOUS PROVISIONS
- --------------------------------------
12.1 This Agreement shall be construed, governed, interpreted and applied in
accordance with the laws of the State of Texas.
12.2 The parties hereto acknowledge that this Agreement sets forth the entire
agreement and understanding of parties hereto as to the subject matter
hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.
12.3 Whenever possible each provision of this Agreement shall be interpreted in
the same manner as to be effected and valid under applicable law. The
provisions of this Agreement, other than Article II, are severable, and in
the event that any provisions of this Agreement shall be determined to be
invalid or unenforceable under any controlling body of the law, such
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invalidity or unenforceability shall not in any way affect the validity or
enforceability of the remaining provisions hereof.
12.4 LICENSEE agrees to mark the Licensed Products as Patented for all products
shipped from any location of manufacture.
12.5 The failure of either party to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or any other right hereunder and shall
not excuse a similar subsequent failure to perform any such term or
condition by the other party.
12.6 All notices and correspondence provided for herein shall be given by
depositing same in the United States Mail, first class postage prepaid,
mailed to the following addresses:
If to LICENSOR: If to LICENSEE:
Syntron, Inc. Benthos, Inc.
Attention: Manager of Purchasing Attention: President
17200 Park Row 49 Edgerton Drive
Houston, TX 77084-4925 North Falmouth, MA 02556-2826
The above addresses are the registered offices of the parties. Changes in
address shall be given by utilizing the notice provisions of this
paragraph.
12.7 This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.8 No provision of this Agreement shall be construed or be deemed to create a
joint venture or partnership or establish the relationship of principal
and agent between LICENSOR and LICENSEE. The relationship of LICENSOR and
LICENSEE shall at all times be that of licensor and licensee, neither
party being empowered to act on behalf of the other except to the extent
expressly authorized herein.
IN WITNESS THEREOF, the parties have hereunto set their hands and seals and duly
executed this Agreement the day and year set forth below,
SYNTRON, INC. BENTHOS, INC.
By: /s/ BRUCE NELSON By: /s/ JOHN L. COUGHLIN
-------------------------- --------------------------
Name: BRUCE NELSON Name: JOHN L. COUGHLIN
Title: President Title: President/CEO
Date: 3 Nov 97 Date: 10/21/97
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