LICENSE AGREEMENT
This agreement ("Agreement") is between GAS RESEARCH INSTITUTE, an
Illinois Not-For Profit Corporation having an office at 8600 West Bryn Mawr
Avenue, Chicago, Illinois 60631 ("GRI"), and FUEL TECH, INC., a Massachusetts
corporation, having a principal place of business at 1001 Frontenac Road,
Naperville, Illinois 60563-1746 ("LICENSEE").
1 Background of Agreement.
1.1 Whereas, GRI is the owner, assignee, or licensee of certain
intellectual property rights related to the AEFLGR(TM) Technology;
1.2 Whereas, LICENSEE desires to acquire a license for the AEFLGR(TM)
Technology pursuant to the terms and conditions of this Agreement;
1.3 Whereas, GRI desires commercial exploitation of such intellectual
property rights and is willing to grant a exclusive license to LICENSEE
pursuant to the terms and conditions of this Agreement.
Now, therefore, in consideration of the promises and covenants set
forth below, GRI and LICENSEE (collectively the "Parties") agree as
follows:
2 Definitions.
For the purpose of this Agreement, the following terms shall have the
meanings set forth below:
2.1 "GRI Patents" means those patent registrations and licensable patent
applications, identified in Schedule A to which all right, title and
interest has been assigned to GRI, including, where appropriate, all
divisions, continuations, continuations-in-part, reissues,
reexaminations, renewals and extensions thereof.
2.2 "GRI Technical Information" means the unpublished research and
development information, unpatented manufacturing processes,
specifications, operating procedures, unpatented commercial or
industrial techniques, know-how and technical data, related to the
AEFLGR Technology which are in GRI's possession and which are
currently being evaluated for patentability.
2.3 "AEFLGR Technology" means a system of controlling Nitrogen Oxide
emissions from coal fired boilers by the injection of natural gas in
fuel-lean conditions in combination with amine as described in or that
would infringe a claim of the GRI Patents and/or which embodies or
incorporates GRI Technical Information.
2.4 "Effective Date" means the last date of signature of this Agreement by
the Parties.
2.5 "Commercial Sale" means any sale, lease, or other transfer of a
AEFLGR(TM) Technology system to an unaffiliated third party but
excludes Demonstration Sales by LICENSEE.
2.6 "Demonstration Sale" means any sale, lease, or other transfer of a
AEFLGR(TM) Technology system to an unaffiliated third party which is
intended by joint agreement between GRI and LICENSEE to demonstrate the
commercial capability of AEFLGR(TM) Technology on different types of
combustion units.
2.7 "Improvements" means all improvements, enhancements, and modifications
of the GRI Patents, GRI Technical Information, and/or AEFLGR
Technology made or conceived by LICENSEE during the life of this
Agreement.
2.8 "Customer/Sublicense" means any sublicense which includes the right to
perform and use AEFLGR(TM) Technology, including the GRI Patents and
GRI Technical Information, but which grants no rights to sublicense or
further distribute, copy, or create derivative works. A
"Customer/Sublicensee" is any entity to whom LICENSEE grants a
sublicense pursuant to this Agreement.
2.9 "Site License" means a Customer/Sublicense granted by LICENSEE to a
Customer/Sublicensee which grants the right to use AEFLGR(TM)
Technology only on the boiler specifically identified in the sublicense
and which cannot be assigned or transferred to any other boiler.
3 License Grant.
3.1 License. For the Term of this Agreement, GRI grants to LICENSEE a
worldwide, royalty-bearing, revocable, exclusive license under GRI
Patents and GRI Technical Information to make, use, offer to sell,
sell, lease, otherwise dispose of, or import AEFLGR(TM) Technology and
to grant Site Licenses to their Customer/Sublicensees.
3.2 This license shall be exclusive to FUEL TECH, INC. GRI agrees that it
will not grant any other license for the AEFLGR(TM) Technology to any
entity other than FUEL TECH, INC. unless LICENSEE fails to meet the
minimum Royalty requirements set out in Schedule B to this Agreement or
this Agreement is terminated by Licensee or terminated for cause by
GRI. However, In the event it is determined that FUEL TECH, INC. is not
meeting market demand for the AEFLGR(TM) Technology , GRI may require
that LICENSEE grant a sublicense under the GRI Patents and GRI
Technical Information to at most two other entities of LICENSEE's
choice after the second year of this Agreement.
3.3 LICENSEE may implement the sale and installation of the AEFLGR(TM)
Technology through sublicensees under sublicense agreements which shall
give sublicensees the right to license the AEFLGR(TM) Technology under
the same terms and conditions, except for the Minimum Cumulative
Megawatt requirement, as LICENSEE has agreed to with GRI in this
Agreement. LICENSEE shall ensure that all sublicense agreements granted
under this Agreement do not contain provisions which would conflict
with any of the other provisions of this Agreement and do include a
provision requiring the sublicensee to indemnify GRI to the same extent
as required of LICENSEE in this Agreement.
3.4 Any sublicense granted under Paragraph 3.3 above will require prior GRI
approval. LICENSEE shall send the request for approval, including the
proposed sublicense agreement, directly to GRI's Manager of Contract
and License Management. Notwithstanding any such consent or
concurrence, (1) GRI shall not bear any liability to LICENSEE or to any
Sublicensee arising out of any act or omission of LICENSEE or any
Sublicensee, and (2) any sublicensing by LICENSEE shall not relieve
LICENSEE of any responsibility for the performance of the terms of this
Agreement. Notwithstanding this Paragraph 3.4, LICENSEE does not need
GRI approval to grant a Site License to a Customer/Sublicensee.
3.5 GRI agrees that it will not enter into another agreement granting a
license to another party for the GRI Patents, the GRI Technical
Information, or the AEFLGR(TM) Technology on more favorable terms than
those specified in this Agreement. If, at any time during the Term of
this Agreement, GRI enters into another agreement granting a license to
another party for the GRI Patents, the GRI Technical Information, or
the AEFLGR(TM) Technology on more favorable terms than those specified
in this Agreement, then GRI shall promptly notify LICENSEE of the grant
of such other license in writing, and LICENSEE shall have the option,
exercisable by written election to GRI within sixty (60) days of such
written notice, to adopt the more favorable terms of such other
Agreement; provided, however, that such new terms shall be effective
only after LICENSEE's written election to adopt such new agreement
terms.
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3.6 LICENSEE agrees that this license is limited to the rights expressly
granted herein, and any rights not expressly granted herein are
expressly reserved to GRI. Nothing contained within this section or
elsewhere in this Agreement shall be construed as granting by
implication, estoppel, or otherwise, any licenses or rights under
patents of GRI other than GRI Patents and GRI Technical Information.,
except as expressly granted in this Agreement.
4 Confidentiality.
4.1 LICENSEE agrees that all GRI Patents and GRI Technical Information
shall remain the property of GRI. LICENSEE agrees to keep all GRI
patent applications and GRI Technical Information confidential.
LICENSEE will advise each employee to whom it discloses GRI patent
applications and GRI Technical Information as to the confidential
nature of the GRI patent applications and GRI Technical Information.
4.2 LICENSEE agrees that all GRI Patents and GRI Technical Information
shall not be disclosed to anyone outside of LICENSEE without the prior
written consent of GRI, except to the extent necessary to
Customer/Sublicensees of LICENSEE and/or third parties under written
obligations of confidentiality. Upon a reasonable request by LICENSEE,
GRI will not unreasonably withhold its consent to such disclosure.
4.3 The obligations of Paragraphs 4.1 and 4.2 above shall not apply to GRI
Patents and GRI Technical Information which:
(a) otherwise is or becomes publicly known through no fault of
LICENSEE; or
(b) was in LICENSEE's possession prior to its disclosure by GRI and not
subject to an obligation of confidentiality; or
(c) comes into LICENSEE's possession, without covenants of secrecy,
from another party who is under no confidentiality obligation to
GRI;
(d) is independently developed by LICENSEE, including application
research data owned by FUEL TECH, INC.;
(e) is furnished to a third party by GRI without any obligation of
confidentiality;
(f) is explicitly approved for release by written authorization of GRI;
or
(g) is ordered to be disclosed by a court, government agency, or other
entity of competent jurisdiction, provided LICENSEE gives timely
written notice to GRI of such order.
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4.4 GRI Patents or GRI Technical Information shall not be deemed to be
within the foregoing exceptions merely because (1) it is specific and
embraced by more general information in the public domain or in
LICENSEE's possession; or (2) it is a combination which can be pieced
together to reconstruct the GRI Patents or GRI Technical Information
from multiple sources of information in the public domain, none of
which shows the whole combination, its principle of operation, or its
method of use.
5 Royalties.
5.1 In consideration for the license rights granted to LICENSEE by GRI
pursuant to this Agreement, LICENSEE shall pay GRI (1) a Maintenance
Fee, and (2) a Royalty on all Commercial Sales (but not on
Demonstration Sales) in accordance with Schedule B of this Agreement.
5.2 It is in the best interests of the Parties to maximize the commercial
exploitation of the GRI Patents and GRI Technical Information licensed
to LICENSEE pursuant to Section 3 of this Agreement. GRI agrees to
cooperate with LICENSEE in the promotion of AEFLGR(TM) Technology at
industry meetings, conventions, and individual customer visits, as well
as in the preparation of brochures, pamphlets and other advertising
materials, including web site references. In particular, GRI agrees
that it will assist LICENSEE in the identification and choosing of
sites suitable for implementation of the AEFLGR(TM) Technology and that
it will share with LICENSEE its expertise in projecting fuel prices.
GRI further agrees that it will designate John Pratapas to provide
technical assistance to LICENSEE for so long as John Pratapas works for
GRI and that if John Pratapas ceases to work for GRI, then GRI will
designate a person with equivalent credentials to provide technical
assistance to LICENSEE.
6 Patent Procurement, Maintenance and Improvements.
6.1 GRI shall have the initial right, with respect to domestic patent
filings, to file, prosecute, control and maintain all of the GRI
Patents and shall have the initial right to determine whether or not,
and where, to file a patent application, to abandon the prosecution of
any patent or patent application, file reissue or reexamination
applications or to discontinue the maintenance of any patent or patent
applications. GRI agrees that it will advise and consult with LICENSEE
on and keep LICENSEE fully informed of the status of all of the GRI
Patents and any and all patent applications filed by GRI on the GRI
Technical Information and that it will give LICENSEE reasonable
opportunity to make suggestions with regard to the filing, prosecution,
and maintenance of patents and patent applications. If GRI elects not
to file, prosecute, or maintain any patent or patent application, then
GRI will give timely written notice to LICENSEE of its decision;
LICENSEE will then have the right to file, prosecute, and maintain any
such patent or patent application, and GRI will cooperate with LICENSEE
in the filing, prosecution, and maintenance of any such patents or
patent applications.
6.2 LICENSEE has the right to file patent applications in the European
Patent Office for select countries within NATO Europe. LICENSEE has the
right to file, prosecute, maintain, and control those foreign patent
applications. LICENSEE will advise GRI within ninety days of the
Effective Date of this Agreement for which countries it will file
patent applications.
6.3 GRI agrees that any improvements, enhancements, and modifications of
the GRI Patents, GRI Technical information, and/or AEFLGR(TM)
Technology that it makes after the Effective Date of this Agreement,
whether patented or unpatented, will be deemed automatically included
within the license granted to LICENSEE by this Agreement. GRI and
LICENSEE agree to consider an additional royalty to provide GRI a
commercially reasonable return on its additional investment in any such
improvement, enhancement, or modification to the extent that the same
demonstrably adds commercial value to the rights licensed under this
Agreement.
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6.4 LICENSEE shall retain all of the right and title in and interest to any
Improvements made by LICENSEE, and LICENSEE shall have the sole right
to file, prosecute, maintain, and control any patent or patent
applications on such Improvements. LICENSEE hereby grants a
non-exclusive, royalty-free license to GRI under any Improvements made
by LICENSEE. GRI shall have the right to sublicense any Improvements
licensed to GRI under this provision for a royalty that would provide
LICENSEE a reasonable return on its additional investment in such
Improvement to the extent that the same demonstrably adds commercial
value to the rights licensed under this Agreement. As long as this
License Agreement remains exclusive, GRI shall not have the right to
sublicense any Improvements licensed to GRI under this provision.
7 Acknowledgment of GRI, Patent Marking, Publicity.
7.1 Acknowledgement. LICENSEE shall include the following acknowledgment,
or its functional equivalent, in its AEFLGR(TM)Technology literature,
and/or marketing , and/or specification sheets: "This (insert name of
product and/or process, etc.) was developed with the assistance of Gas
Research Institute."
7.2 Patent Marking. LICENSEE shall identify the applicable patent number(s)
of all GRI Patents on all AEFLGR(TM) Technology literature and
specification sheets immediately upon issuance of the patent. If any
patent applications are pending, LICENSEE shall place "Patent Pending"
on all AEFLGR(TM) Technology literature and specification sheets until
the last currently pending GRI patent applications have issued or are
abandoned.
7.3 Publicity. LICENSEE may use the term "GRI LICENSEE" to describe or
refer to its activities under this Agreement. LICENSEE shall use the
term "GRI LICENSEE" only to designate or indicate to its
Customer/Sublicensees that it is a LICENSEE of GRI Patents and GRI
Technical Information and for no other purpose.
8 Warranty, Guarantee, and Limitation of Liability.
8.1 GRI warrants that it has title to the GRI Patents, that it has the
requisite authority to convey the rights granted in the Agreement, and
that, through the Effective Date of the Agreement, it has not abandoned
any of the GRI Patents.
8.2 GRI warrants that a AEFLGR(TM) Technology system constructed and
installed in accordance with GRI Patents and/or GRI Technical
Information will be free from infringement of the United States and
Canadian patents of any third party as adjudged by a competent court of
law. GRI MAKES NO OTHER WARRANTIES, WHETHER EXPRESSED OR IMPLIED, AS TO
THE MERCHANTABILITY OR FITNESS FOR PURPOSE OF AEFLGR(TM) TECHNOLOGY OR
AN AEFLGR(TM) TECHNOLOGY SYSTEM.
8.3 LICENSEE shall immediately notify GRI in writing of all infringement
claims made and infringement suits commenced against LICENSEE because
of its exercising any rights granted under this Agreement. So long as
LICENSEE timely tenders to GRI the defense of any such claim or suit,
GRI shall defend any such claim or suit that may be instituted for the
alleged infringement, provided that LICENSEE cooperates fully with GRI
in such defense. GRI agrees to indemnify LICENSEE against all costs of
suit, attorneys' fees, or judgments that may be incurred by or entered
against LICENSEE as a result of any such claim or suit. GRI shall have
the right to control the defense and resolution of any such claim or
suit. GRI shall not be bound by any compromise or settlement made in
such claims or suits without its written consent. The indemnification
and defense rights granted in this subparagraph are strictly limited to
the rights granted in this Agreement and shall not apply to
intellectual property developed by LICENSEE or a third party or
controlled by LICENSEE through license with a third party.
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8.4 *
* INFORMATION OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT:
SUCH INFORMATION HAS BEEN FILED SEPARATELY.
8.5 In addition to the indemnification provision of Paragraph 8.3 above,
GRI may remedy a breach of its warranty set forth in Paragraph 8.2
above, at its sole discretion, by either: (i) redesigning the
AEFLGR(TM) Technology system to avoid any patent infringement claims;
(ii) purchasing any rights from a third party necessary for LICENSEE to
continue to practice AEFLGR(TM) Technology; or (iii) bring an action to
invalidate any patent claims of third parties upon which an
infringement by AEFLGR(TM) Technology is alleged.
8.6 Performance Guarantee. If LICENSEE finds it necessary to guarantee the
performance of AEFLGR(TM) Technology when applied to a
Customer/Sublicensee's boiler, then, upon review by GRI of LICENSEE's
proposal to the Customer/Sublicensee and GRI's agreement to the level
of performance guaranteed, GRI will share equally with LICENSEE the
cost of any such performance guarantee, including any payments LICENSEE
is required to make on a letter of credit, a performance bond, and/or
contract damages owed to a Customer/Sublicensee, up to a maximum
commitment by GRI of eighty percent (80%) of GRI's portion of the Site
License Fee for such boiler.
8.7 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO ANY
THIRD PARTY FOR ANY CONSEQUENTIAL, SPECIAL, PUNITIVE, OR INCIDENTAL
DAMAGES, INCLUDING BUT NOT LIMITED TO, LOST PROFITS OR OTHER ECONOMIC
LOSS, WHETHER ARISING FROM BREACH OF CONTRACT, TORT, NEGLIGENCE, STRICT
LIABILITY, OR OTHERWISE.
9 Indemnification.
9.1. LICENSEE agrees to indemnify and save GRI harmless from and against any
and all claims of any kind, including but not limited to liability for
injury to persons and/or damage to property (including without
limitation, environmental damage) and/or violations of law, arising out
of or in connection with LICENSEE's manufacture, use, sale or other
transfer of any AEFLGR(TM) Technology, including any and all expenses,
costs, attorneys' fees, settlement, judgments, or awards incurred by
GRI in the defense of any such claim or lawsuit, except as otherwise
affirmatively assumed by GRI hereunder.
9.2 LICENSEE shall maintain appropriate liability insurance policies in an
amount and for such time period as are required to fully satisfy the
foregoing obligations of indemnification.
10 Infringement by Third Parties.
10.1 Notification. Each Party shall immediately notify the other Party in
writing of suspected infringement(s) or misappropriation(s) of the GRI
Patents and/or GRI Technical Information and shall inform the other
Party of any evidence of such infringement(s) or misappropriation(s).
10.2 GRI shall have the first option and right to bring an action to enjoin
the infringement and to recover damages against any third party against
whom GRI has evidence of patent infringement. LICENSEE shall cooperate
as necessary with GRI. All costs and expenses for such suit shall be
borne by GRI, and GRI shall be entitled to retain all damages or other
relief recovered in such litigation.
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10.3 If GRI chooses not to bring such an action, GRI shall notify LICENSEE
of its decision within thirty (30) days of receiving evidence of an
infringement, after which LICENSEE shall have the second option to
bring an action to enjoin the infringement and to recover damages. GRI
shall cooperate as necessary with LICENSEE. All costs and expenses for
such suit shall be borne by LICENSEE, and LICENSEE shall be entitled to
retain all damages or other relief recovered in such litigation.
10.4 No Party may compromise or settle with an infringer or misappropriator
without prior notice to and prior written consent of the other Party,
which consent shall not be unreasonably withheld.
11 Term and Termination.
11.1 The Term of this Agreement shall begin from the Effective Date of this
Agreement and shall continue for a period of five (5) years. LICENSEE
has the option to extend the Term of this Agreement for an additional
seven (7) years upon the negotiation of an additional minimum Royalty
agreeable to both Parties.
11.2 LICENSEE may terminate this Agreement at any time upon sixty (60) days
prior written notice to GRI.
11.3 If LICENSEE either (i) fails to pay the minimum Royalties required by
Schedule B of this Agreement, or (ii) uses its exclusive license
granted hereunder to the AEFLGR Technology to restrict, undermine or
eliminate the competition in the sale of GRI's FLGR Technology by tying
the sale of AEFLGR to the purchase by the customer of FLGR from
LICENSEE, then, upon written notice to LICENSEE, GRI has the option
either to terminate this Agreement in its entirety or to convert the
license granted in Section 3 of this Agreement from an exclusive
license to a non-exclusive license.
11.4 If any Party shall be adjudged bankrupt, or become insolvent, or make
an assignment for the benefit of creditors, or be placed in the hands
of a receiver or a trustee in bankruptcy, the other Party may terminate
this Agreement by giving sixty (60) days prior written notice to the
other Party specifying the basis for termination. If within sixty (60)
days after receipt of such notice, the Party who received notice shall
remedy the condition forming the basis for termination, such notice
shall cease to be operative, and this Agreement shall continue in full
force.
11.5 Upon termination of this Agreement, LICENSEE agree: (1) that it will
not use or sell AEFLGR(TM) Technology systems until expiration of the
last of the GRI Patents, except that LICENSEE may sublicense the
AEFLGR(TM) Technology from others, and (2) that it will promptly
transfer to GRI all documents containing unpublished GRI Technical
Information in its possession (including but not limited to videotapes,
computer media, printed documents, and prototypes).
11.6 Effect of Termination. Termination of this Agreement shall not release
LICENSEE from its obligation to pay GRI any unpaid Royalties which have
accrued prior to the termination or which may accrue to GRI after the
effective date of the termination from Commercial Sales made prior to
the date of the termination.
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12 Compliance with Export Restrictions.
12.1 LICENSEE acknowledges that the AEFLGR(TM) Technology system, and
non-patented items and all related GRI Technical Information and
materials referenced in this Agreement may be subject to export control
under U. S. Export Administration Regulations. LICENSEE accepts and
assumes all responsibility for compliance with United State and
Territory export regulations with respect to their exportation.
LICENSEE covenants and agrees to comply strictly with these
regulations, to cooperate fully with GRI in any official or unofficial
audit or inspection that relates to said regulations, and not to
export, re-export, divert, transfer or disclose directly or indirectly,
or permit the export of any item, component, or combination of an
AEFLGR(TM) Technology system and/or non-patented items and/or GRI
Technical Information and/or derivative products of non-patented items
to any country for which the United States Export Administration Act of
1979 and the regulations issued thereunder, or any other United States
law or regulation, requires export or re-export authorization or
approval under a validated export license. LICENSEE will bear the
expense of its compliance with all applicable United States laws and
regulations in this connection without reimbursement or offset.
13 Taxes and Customs Duties, Storage and Transportation Charges.
13.1 LICENSEE acknowledges and agrees that GRI has no responsibility or
liability for taxes or customs duties, harbor fees or storage or
transportation charges, related in any way to FLGR(TM) Technology,
non-patented items, or GRI's services or revenue, except that GRI shall
bear all income taxes imposed on it with respect to the Royalty
payments to be made pursuant to this Agreement. LICENSEE agrees to
assume all responsibility for collection and/or payment of other taxes,
including, without limitation, for value added taxes, sales taxes, use
taxes, excise taxes, service taxes, customs duties, customs storage
fees, without reimbursement by GRI or offset against Royalty payments
to GRI, but excluding income taxes imposed on GRI with respect to the
Royalty payments to be made pursuant to this Agreement.
14 General Provisions.
14.1 Force Majeure. Anything contained in this Agreement to the contrary
notwithstanding, the obligations of the Parties shall be subject to all
laws, both present and future, of any Government having jurisdiction
over either Party, and to orders or regulations of any such Government,
or any department, agency, or court thereof, and acts of war, acts of
public enemies, strikes, or other labor disturbances, fires, floods,
acts of God, or any causes of like kind beyond the control of the
Parties, and the Parties shall be excused from any failure to perform
any obligation under this Agreement to the extent such failure is
caused by any such law, order, regulation, or contingency, but only so
long as said law, order, regulation, or contingency continues.
14.2 Assignment. This Agreement may not be assigned in whole or in part by
either Party without the prior written consent of the other Party,
except that this Agreement may be assigned to a wholly-owned subsidiary
of a Party. Any assignment made without such consent, other than an
assignment to a wholly-owned subsidiary of a Party, shall be considered
void ab initio.
14.3 Notices. All notices and demands required or permitted to be given
under this Agreement shall be in writing and shall be served by
facsimile, personal service, or by mail at the address of the receiving
Party set forth below (or at such different address as may be
designated by such Party by written notice to the other Party). All
notices or demands by mail shall be by first class, certified or
registered mail, return receipt requested, or by nationally-recognized
private express courier, and shall be deemed received within five (5)
days of mailing by the other Party.
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(a) Gas Research Institute
8600 West Bryn Mawr Avenue
Chicago, IL 60631
Attn: Janice E. Pastryk, Associate General Counsel
Contract and License Management
(b) Fuel Tech, Inc.,
1001 Frontenac Road
Naperville, Illinois 60563-1746
Attn: Roy A. Johnson
Vice President of Business Development
14.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS, EXCLUDING ITS
CONFLICT OF LAW PRINCIPLES. GRI and LICENSEE shall attempt to settle
any claim or controversy arising out of this Agreement through
consultation and negotiation in the spirit of mutual friendship and
cooperation. If such attempts fail, then the dispute shall first be
submitted to a mutually acceptable neutral advisor for mediation,
fact-finding, or other form of alternate dispute resolution (ADR)
selected by the Parties. No Party may unreasonably withhold acceptance
of such an advisor, and his or her selection must be made within 45
days after written notice by one Party demanding the use of ADR. The
cost of such mediation or other ADR procedure shall be shared equally
among GRI and LICENSEE. Any dispute which the Parties cannot resolve
within six months of the date of the initial demand by any Party for
mediation or another ADR procedure shall be finally determined by a
court of competent jurisdiction located within the State of Illinois.
The use of an ADR procedure under this section shall not be construed
(under such doctrines as laches, waiver, or estoppel) to have affected
adversely any Party's ability to pursue its legal remedies, and nothing
in this section shall prevent any Party from resorting to judicial
proceedings if (1) good faith efforts to resolve a dispute under these
procedures have been unsuccessful or (2) interim resort to a court is
necessary to prevent serious and irreparable injury to any Party or to
others.
14.5 No Waiver For Failure to Enforce Other Rights, Cumulative Remedies. The
failure of either Party to give notice of nonperformance or to enforce
or exercise any covenant, right or remedy at law or equity, will not
constitute a waiver of the covenant, right or remedy, or preclude
either Party from exercising same thereafter.
14.6 Schedule. All schedules to this Agreement, previously designated as
Schedule A and B respectively, are incorporated herein and expressly
made a part of this Agreement.
14.7 Severability. If any provision or part of any provision of this
Agreement is adjudged by a court to be invalid, void, or unenforceable,
it shall be deemed omitted and the Parties agree that the remainder of
the Agreement shall not be affected and shall remain in force and
effect.
14.8 Rule of Construction. The Parties acknowledge that both have
contributed to this Agreement's contents and they agree that no
provision of this Agreement should be construed against either Party as
the drafter.
14.9 Survival of Certain Provisions. The warranties, indemnification,
confidentiality, obligation to pay accrued Royalties, limitation of
liability, and choice of law obligations set forth in this Agreement
shall survive the termination of the Agreement by either Party for any
reason.
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14.10 Headings. The titles and headings of the various sections and
paragraphs in this Agreement are intended solely for convenience of
reference and are not intended for any other purpose to explain, modify
or place any construction upon any of the provisions of this Agreement.
14.11 Relationship of the Parties. Nothing herein shall be deemed to create a
joint venture or partnership or agency relationship between the
Parties. No Party shall have the authority to make any statements,
representations, or commitments of any kind, or to take any action,
which shall be binding on the other, except as provided for in this
Agreement or as authorized in writing by a duly authorized agent of the
Party to be bound.
14.12 All Amendments in Writing. It is agreed that no supplement,
modification, or amendment of this Agreement shall be binding unless
executed in writing by duly authorized representatives of both Parties
to this Agreement.
14.13 Entire Agreement. The Parties have read this Agreement and agree to be
bound by its terms, and further agree that it constitutes the complete
and entire agreement of the Parties and supersedes all previous
communications, oral or written, express or implied and all other
communications between them relating to the license and to the subject
matter. No representatives or statements of any kind made by either
Party, which are not expressly stated, shall be binding on such Party.
IN WITNESS WHEREOF, the Parties have executed the foregoing Agreement.
FUEL TECH, INC. GAS RESEARCH INSTITUTE
By: /s/ V.M. Albanese By:/s/ W.H.Kockenmeister
------------------------ ----------------------
Vincent M. Albanese Willian H. Kockenmeister
Vice President Vice President and
General Counsel
12/8/98 12/2/98
------------------------ ----------------------
Date Signed Date Signed
(66437/pgc)
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SCHEDULE A
GRI PATENTS
GRI Patents include the following list of U.S. and Canadian Patents and
Pending Patent applications, as follows:
- ----------------------------------------------------------------------------------------------------------------
Patents and Patent Applications
- ----------------------------------------------------------------------------------------------------------------
Patent application # Title and Description
- ----------------------------------------------------------------------------------------------------------------
1 * *
- ----------------------------------------------------------------------------------------------------------------
* INFORMATION OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT: SUCH
INFORMATION HAS BEEN FILED SEPARATELY.
By jointly signed amendment to this Agreement the Parties may add or
delete patents to those initially listed above.
THIS INFORMATION IS CONFIDENTIAL AND SHOULD BE TREATED
ACCORDINGLY UNTIL THE RESPECTIVE PATENTS ISSUE.
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SCHEDULE B
ROYALTIES
1. In consideration of the license grant set forth in Section 3 of this
Agreement, LICENSEE shall pay to GRI a royalty ("Royalty") from the
Commercial Sale of AEFLGR(TM) Technology equal to * percent ( * %) of the
Site License Fee calculated pursuant to the FLGR(TM) Technology License
Agreement between GRI and LICENSEE plus * percent ( * %) of the difference
between (1) the Site License Fee calculated pursuant to the Site License Fee
Schedule set forth below and (2) the Site License Fee calculated pursuant to
the FLGR(TM) Technology License Agreement between GRI and LICENSEE. LICENSEE
shall keep the remaining amount of the Site License Fee.
Site License Fee Schedule
- --------------------------------------------------------------------------------
Utility Boiler Site License Fees
- --------------------------------------------------------------------------------
Boiler Size AEFLGR
- --------------------------------------------------------------------------------
<= 100 MW $ * /KW
- --------------------------------------------------------------------------------
101-200 MW $ * /KW
- --------------------------------------------------------------------------------
201-300 MW $ * /KW
- --------------------------------------------------------------------------------
301- 400 MW $ * /KW
- --------------------------------------------------------------------------------
401-500 MW $ * /KW
- --------------------------------------------------------------------------------
=> 501 MW $ * /KW
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Industrial Boiler Site License Fees
- --------------------------------------------------------------------------------
Boiler Size AEFLGR
- --------------------------------------------------------------------------------
Minimum Fee $ *
- --------------------------------------------------------------------------------
<= 250 MMBTU/HR $ * /MMBTU/hr
- --------------------------------------------------------------------------------
251 - 500 MMBTU/hr $ * /MMBTU/hr
- --------------------------------------------------------------------------------
501 - 1000 MMBTU/hr $ * /MMBTU/hr
- --------------------------------------------------------------------------------
1001 - 2000 MMBTU/hr $ * /MMBTU/hr
- --------------------------------------------------------------------------------
2001 - 3000 MMBTU/hr $ * /MMBTU/hr
- ----------------------------------------------- --------------------------------
3001 - 4000 MMBTU/hr $ * /MMBTU/hr
- --------------------------------------------------------------------------------
4001 - 5000 MMBTU/hr $ * /MMBTU/hr
- --------------------------------------------------------------------------------
5001 - 10000 MMBTU/hr $ * /MMBTU/hr
- --------------------------------------------------------------------------------
* INFORMATION OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT: SUCH
INFORMATION HAS BEEN FILED SEPARATELY.
2. For the purposes of computing Site License Fees under the Site License Fee
Schedule, multiple boilers for the same Customer/Sublicensee may be grouped
together for purposes of sizing the applicable Site License Fee if the
Customer/Sublicensee contracts to buying more than one Site License within a
period of three years. If, however, the Customer/Sublicensee does not build
or pay the applicable Site License fee within a period of three years, then
the Customer/Sublicensee will become obligated to pay the difference between
the discounted Site License Fee and the Site License Fee that the
Customer/Sublicensee would have paid had it committed only to the number of
AEFLGR(TM) Technology systems it actually built.
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3. *
* INFORMATION OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT: SUCH
INFORMATION HAS BEEN FILED SEPARATELY.
4. Notwithstanding the Site License Fee Schedule set out above, LICENSEE may,
from time to time, recommend to GRI that a Customer/Sublicensee be offered
the option of paying for AEFLGR(TM) Technology pursuant to an alternate
Royalty calculation and not pursuant to the Site License Fee Schedule, and
GRI agrees to consider such alternate Royalty calculations. LICENSEE will
recommend an alternative Royalty calculation only when, in LICENSEE's
reasonable commercial judgment, the Customer/Sublicensee is unlikely to
consider buying AEFLGR(TM) Technology unless offered such an alternative.
5. GRI and LICENSEE agree that (i) when a customer/sublicensee of GRI's
FLGR(TM) Technology has already purchased and installed as of the date of
this Agreement Fuel Tech Inc.'s NOxOUT(R) technology and then purchases
GRI's FLGR(TM) Technology; or (ii) after the effective date of this
Agreement, if a customer/sublicensee of GRI's FLGR(TM) Technology installs a
NOxOUT system and installs a FLGR Technology system more than eighteen (18)
months after installing that NOxOUT system, then the customer/sublicensee
will receive a Site License to operate its system as either a FLGR
Technology system or an AEFLGR Technology system without having to pay the
differential Site License fee for the AEFLGR Technology.
6. For each calendar year indicated below, LICENSEE agrees to use its
reasonable best efforts to sell, lease, or otherwise transfer sufficient
AEFLGR(TM) Technology systems for the following Minimum Cumulative Megawatts
(based on the boiler nameplate megawatt capacity, excluding Demonstration
Sales, to which the AEFLGR(TM) Technology is applied):
Year Minimum Cumulative Megawatts
---- ----------------------------
1999 *
2000 *
2001 *
2002 *
2003 *
* INFORMATION OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT: SUCH
INFORMAITON HAS BEEN FILED SEPARATELY.
The Minimum Cumulative Megawatts are a cumulative total, running from year
to year, of all boiler nameplate megawatt capacity to which the AEFLGR(TM)
Technology is applied, through sale, lease, or other transfer, excluding
Demonstration Sales, by LICENSEE. LICENSEE shall receive credit towards the
calculation of the Minimum Cumulative Megawatts required under the terms of
this Agreement for one-half of the boiler nameplate megawatt capacity of an
FLGR(TM) Technology system sold under FUEL TECH INC.'s FLGR(TM) Technology
license from GRI.
7. At the end of each calendar year during the term of this Agreement, LICENSEE
shall pay to GRI a minimum Royalty equivalent to the difference between the
Minimum Cumulative Megawatts indicated above and the actual cumulative
megawatts sold through the current year of the Agreement.
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8. Maintenance Fee. Beginning January 1, 1999, and on every January 1
thereafter during the term of this Agreement, LICENSEE shall pay to GRI a
yearly Maintenance Fee of $ *. * INFORMATION OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT: SUCH INFORMATION HAS BEEN FILED SEPARATELY.
9. It is in the best interests of the Parties to maximize the commercial
exploitation of the GRI Patents and the GRI Technical Information. To
achieve the most effective commercial exploitation of the AEFLGR(TM)
Technology, LICENSEE shall propose appropriate Demonstration Sales of the
AEFLGR(TM)Technology. GRI shall not unreasonably withhold its approval of
the proposed Demonstration Sales. No Royalty payments shall be due on such
Demonstration Sales. LICENSEE and GRI agree that such Demonstration Sales
shall include new and different applications of the AEFLGR(TM)Technology,
including but not limited to the application of the AEFLGR(TM)Technology to
the following types of boilers: a cyclone boiler, a cyclone boiler with
over-fire air, a wall-fired boiler, a tangentially-fired boiler, an
opposed-wall-fired boiler, and a boiler with a total megawatt capacity of
500 MW or above.
10. Notwithstanding anything to the contrary in this Agreement, if the GRI
Patents are invalidated, then LICENSEE's obligation to make Royalty
payments shall cease and this Agreement shall terminate.
11. Within forty-five (45) days of the close of each fiscal quarter of
LICENSEE, beginning with the first close of a fiscal quarter following the
Effective Date, LICENSEE shall make the Royalty payments due under this
Agreement to GRI for all Site License Fees received by LICENSEE during that
quarter on Commercial Sales of the AEFLGR(TM)Technology, or LICENSEE shall
certify to GRI that it has made no Commercial Sales of the AEFLGR(TM)
Technology. All Royalty payments shall be made in U.S. dollars. LICENSEE
shall attach a statement to its - payment indicating the size and location
of the boiler to which each Customer/Sublicense applies, the applicable
Site License Fee per boiler, the total megawatts for the number of
AEFLGR(TM)Technology systems sold, leased, or otherwise transferred to date
by year, and such other information as GRI may reasonably request from time
to time.
12. Interest on Late Payments. Royalty payments provided for in this Agreement,
when overdue, shall bear interest at a rate per annum equal to two percent
(2%) in excess of the "Prime Rate" published by "The Wall Street Journal"
on the due date for such Royalty payment. This interest charge shall
commence on the day after the due date and shall continue until payment is
received by GRI. The foregoing notwithstanding, if a royalty payment is
more than sixty (60) days past due, GRI may, at its sole option, deem such
late payment to be a material breach of this Agreement.
13. Records, Audit. LICENSEE agrees to maintain adequate books and accounting
records relating to the Royalties due. Such books and records shall be
available for GRI to audit and analyze by GRI's internal accountants, or at
GRI's discretion by GRI's independent accounting firm. These audits will be
paid for by GRI. Any such audit shall be permitted during business hours
within thirty (30) days of receipt of GRI's written request. GRI may
conduct such an audit on an annual basis but not more than once a year.
LICENSEE must maintain such records during the term of this Agreement and
for a period of two (2) years thereafter. LICENSEE shall incorporate a
similar provision into all sublicense agreements, permitting GRI to conduct
reasonable and periodic audits of the sublicensee's books and records.
14