SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 18, 1997
RESEARCH FRONTIERS INCORPORATED
(Exact name of registrant as specified in charter)
Delaware 1-9399 11-2103466
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
240 Crossways Park Drive, Woodbury, New York 11797
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:(516) 364-1902
<PAGE>
Item 5. Other Events.
Effective January 18, 1997, the Company entered into a license
agreement with Material Sciences Corporation ("MSC"), a major
manufacturer of specialty films and coated materials, which include solar
control and safety window films used in the automotive aftermarket and in
building applications to improve the performance of conventional
windows. The agreement grants MSC a non-exclusive license to
manufacture and sell electrically-controllable variable light transmission
or "smart" windows for architectural and automotive applications
throughout most of the world. The agreement also permits MSC to
produce and sell films incorporating Research Frontiers' proprietary
suspended particle device (SPD) light control technology to window
companies for automotive and architectural uses, and to a selected list of
Research Frontiers' licensees and prospective licensees for a variety of
applications. Under the license agreement, MSC will pay Research
Frontiers an earned royalty of up to 10% of the net selling price of products
sold under the agreement. Other terms of the license agreement were not
disclosed. MSC's products are sold internationally to manufacturers and
distributors of industrial and consumer products, with specialty films being
distributed in over 60 countries. MSC sells specialty films through its
wholly-owned subsidiary, Solar-Gard International and through
independent distributors. When acquired by MSC in late 1995, Solar-Gard
International was the largest independent distributor of professionally-
installed solar control window film products in the world, with eight
wholly-owned distribution centers across the United States, as well as
distribution centers in Canada, England, and Singapore. Since the
acquisition, MSC has added several additional distribution centers in
California and Florida (which also serves as its Latin American export
center). MSC owns or leases facilities with over 1.1 million square feet of
space, operates seven manufacturing facilities in the United States, and
employs over 880 people. There can be no assurance that MSC or any
licensee of the Company will succeed at introducing commercial products
using the Company's technology.
The Company recently amended the terms of its option-license
agreement with Saint-Gobain Vitrage International SA (now know as
Saint-Gobain Vitrage, SA). The agreement, as amended, gives Saint-
Gobain the option through December 31, 1997 (with the right to further
extent the option until June 30, 1998) to enter into a non-exclusive license
agreement with the Company which covers the manufacture and sale of
variable light transmission "smart" windows for architectural applications
using Research Frontiers' patented SPD technology. If Saint-Gobain
exercises the option and enters into the license agreement, Saint-Gobain
would pay Research Frontiers a royalty of five percent of net sales of
licensed products, subject to the payment of minimum annual royalties or
an up-front fee which, under the terms of the original option-license
agreement, remained to be negotiated.
Item 7. Exhibits
(c) Exhibits.
10.12 License Agreement effective as of January 18, 1997 between
the Company and Material Sciences Corporation. Filed
herewith with portions of this document omitted pursuant to
the Registrant's request for confidential treatment and filed
separately with the Securities and Exchange Commission.
Item 9. Sales of Equity Securities Pursuant to Regulation S.
On February 18, 1997, the Company continued to strengthen its
balance sheet and raised approximately $500,000 from the private sale of
83,334 shares of common stock to an institutional investor affiliated with
a North American bank. In addition, the investor received (A) two year
warrants to purchase (1) 13,889 shares of common stock at a warrant
exercise price of $7.20 per share, and (2) 13,889 shares of common stock
at a warrant exercise price of $9.60 per share, and (B) the right to receive
up to 8,334 additional shares of common stock if certain market conditions
occur. The warrants are redeemable by the Company under certain
conditions. DJ Limited acted as the placement agent for this transaction.
These shares are subject to various restrictions on their resale or transfer
by such institution, and the proceeds from their sale have been invested by
the Company in short-term U.S. Treasury securities.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RESEARCH FRONTIERS INCORPORATED
(Registrant)
/s/ Robert L. Saxe
Robert L. Saxe, President and Treasurer
(Principal Executive, Financial, and
Accounting Officer)
Date: March 3, 1997
EXHIBIT 10.12
TECHNOLOGY LICENSE AGREEMENT
BETWEEN
RESEARCH FRONTIERS INCORPORATED
AND
MATERIAL SCIENCES CORPORATION
<PAGE>
TABLE OF CONTENTS
RECITALS 1
1 DEFINITIONS 1
2 GRANT OF LICENSE 4
3 FEES AND PAYMENT SCHEDULE 5
4 OBLIGATIONS OF LICENSOR AND LICENSEE 7
5 TRADEMARKS 9
6 INSURANCE AND INDEMNIFICATION 9
7 FUTURE PATENTS 10
8 TECHNOLOGY TRANSFER 11
9 INTELLECTUAL PROPERTY PROTECTION RESPONSIBILITIES 13
10 TERM AND TERMINATION 13
11 EVENTS OF DEFAULT AND REMEDIES 15
12 CONFIDENTIALITY 16
13 WARRANTIES AND REPRESENTATIONS 17
14 MISCELLANEOUS 18
SCHEDULE A-LIST OF PATENTS AND PATENT APPLICATIONS A-1
SCHEDULE B-LIST OF AUTHORIZED USERS B-1
<PAGE>
TECHNOLOGY LICENSE AGREEMENT
BETWEEN
RESEARCH FRONTIERS INCORPORATED
AND
MATERIAL SCIENCES CORPORATION
This Technology License Agreement ("Agreement") is made as of the
_____ day of January, 1997 by and between Research Frontiers
Incorporated, a Delaware corporation ("LICENSOR") and Material
Sciences Corporation, a Delaware corporation ("LICENSEE"). The
"Effective Date" of this Agreement shall be the date which is the last date
of formal execution of this Agreement by duly authorized representatives
of the parties to this Agreement as indicated on the signature page of this
Agreement.
RECITALS
WHEREAS, LICENSOR has been engaged in research and
development in the application of physicochemical concepts to Light Valve
Film and Licensed Products and of methods and apparatus relating to
products incorporating such concepts, and is possessed of and can convey
information and know-how for such products and rights to manufacture,
use and sell such products; and
WHEREAS, LICENSEE is interested in manufacturing and selling
Light Valve Film and Licensed Products; and
WHEREAS, LICENSEE desires to acquire from LICENSOR, and
LICENSOR desires to grant to LICENSEE, certain rights and licenses with
respect to such technology of LICENSOR;
NOW, THEREFORE, in consideration of the promises and the
mutual covenants herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows.
1DEFINITIONS.
The following terms when used herein shall have the respective
meanings set forth in this Article 1.
"Authorized User" means LICENSOR and/or any other person or entity
listed by LICENSOR on Schedule B hereof. LICENSEE agrees that
LICENSOR may amend Schedule B hereof at any time during the term of
this Agreement for any reason by sending LICENSEE a written notice of
such amendment. The persons or entities now or hereafter listed on
Schedule B may not include all of LICENSOR's current licensees and may
include prospective licensees of LICENSOR, and for legal or practical
reasons, LICENSOR may restrict the type of Light Valve Film that may be
sold, leased or transferred to such person or entity. LICENSEE agrees that
immediately upon receipt of any written notice from LICENSOR that any
person or entity is no longer included on Schedule B, or if LICENSEE
becomes aware that any such person or entity listed on Schedule B or
otherwise receiving Light Valve Film is making any improper use of Light
Valve Film, LICENSEE shall notify LICENSOR of such improper use and
shall take reasonable efforts to cease all sales, leases, or other dispositions
of Light Valve Film to such persons or entities, unless and until
LICENSOR consents in writing to the resumption of such sales, leases or
other dispositions.
"Licensed Product" means a Light Valve Architectural Window Product
or a Light Valve Transportation Vehicle Window Product incorporating
Light Valve Film manufactured by or for, and sold, leased or otherwise
disposed of by LICENSEE or a permitted sublicensee, or Light Valve Film
which is solely used or intended to be used in, or in combination with, a
Light Valve Architectural Window Product or a Light Valve
Transportation Vehicle Window Product. The term "Licensed Product"
shall not include Light Valves used or intended for use in any other
product other than as specifically defined herein, such as other window
products not specifically defined herein, windows for space craft and
space-stations, and non-window products such as but not limited to
displays, eyewear, mirrors or filters for scientific instruments, lamps or
contrast enhancement of displays. The term "display" means any device
for displaying letters, numbers, images or other indicia or patterns.
Nothing contained herein shall permit LICENSEE to sell, lease, or
otherwise dispose of Light Valve Film which is not combined or intended
to be combined as described above into a Light Valve Architectural
Window Product or a Light Valve Transportation Vehicle Window
Product, except as otherwise permitted by Section 2.1(B) hereof.
"Licensed Territory " means all countries of the world except, with respect
to Light Valve Architectural Window Products means all countries of the
world except North and South Korea until July 31, 1998, and thereafter
shall mean all countries of the world.
"Light Valve" means a variable light transmission device comprising: a
cell including cell walls, containing or adapted to contain an activatable
material, described hereinafter, such that a change in the optical
characteristics of the activatable material affects the characteristics of light
absorbed by, transmitted through and/or reflected from the cell; means
incorporated in or on the cell, or separate therefrom for applying an electric
or magnetic field to the activatable material within the cell; and coatings,
(including, but not limited to, electrodes), spacers, seals, electrical and/or
electronic components, and other elements incorporated in or on the cell.
The activatable material, which the cell contains or is adapted to contain,
includes in it solid suspended particles, which when subjected to a suitable
electric or magnetic field, orient to produce a change in the optical
characteristics of the device.
"Light Valve Architectural Window Product" means a Light Valve used or
intended for use solely as a window integrally incorporated in, or attached
as a fixture to the external structure or internal structure of any building,
whether permanent or temporary, and whether above or below ground.
"Light Valve Film" means a film or sheet comprising a suspension of
particles used or intended for use solely in or as a Light Valve. The Light
Valve Film shall only comprise either (a) a suspension of particles
dispersed throughout a continuous liquid phase enclosed within one or
more rigid or flexible solid films or sheets, or (b) a discontinuous phase of
a liquid comprising dispersed particles, said discontinuous phase being
dispersed throughout a continuous phase of a rigid or flexible solid film or
sheet. The Light Valve Film may also comprise one or more other layers
such as, without limitation, a film, coating or sheet or combination thereof,
which may provide the Light Valve Film with (1) scratch resistance, (2)
protection from ultraviolet radiation, (3) reflection of infrared energy,
and/or (4) electrical conductivity for transmitting an applied electric or
magnetic field to the activatable material.
"Light Valve Transportation Vehicle Window Product" means a Light
Valve used or intended for use solely as a window (including sunroofs and
window panes which are an integral part of the internal or external
structure) integrally incorporated in a transportation vehicle of a type not
designed or primarily intended for military use. The term "Light Valve
Transportation Vehicle Window Product" shall not include a Light Valve
used or intended for use as a sun visor, but may include Light Valves
which are used or intended for use in a non-military transportation vehicle
as, or as part of, or are laminated to, or whose surface area is primarily
attached to, a window, sunroof or windshield. The term "transportation
vehicle" shall include, but shall not be limited to, passenger cars,
recreational vehicles, trucks, mobile cranes, trains, aircraft and boats.
The "Net Selling Price" of Licensed Products on which royalties are
payable shall be the actual selling price of LICENSEE and its sublicensees
hereunder (including amounts charged for any wiring and installation
services provided by LICENSEE and its sublicensees hereunder) at which
nonaffiliated customers are billed in the usual course of business for
Licensed Products, as packed for shipment to the customer, reduced only
by the following if, and to the extent that, amounts in respect thereof are
reflected in such selling price: (i) trade discounts actually allowed; (ii)
sales, use or excise and added value taxes and custom duties paid; (iii) if
the actual selling price is other than f.o.b. factory, amounts paid for f.o.b.
transportation of Licensed Products to the customer's premises or place of
installation or delivery; (iv) the cost to LICENSEE or its sublicensees
hereunder of any part or component included in Licensed Products which
is purchased directly from LICENSOR; (v) insurance costs and the costs
of packing material, boxes, cartons and crates required for shipping;
provided, however, that the Net Selling Price of a Licensed Product may
not be less than 90% of the gross selling price of said Licensed Product
after all deductions therefrom excluding deductions for normal trade
discounts actually allowed and materials purchased by LICENSEE from
LICENSOR pursuant to subsection (iv) hereof, if any. If a Licensed
Product is leased, sold, used or to otherwise disposed of on terms not
involving a bona fide arm's length sale to an unaffiliated third party, then
the Net Selling Price for such transactions shall be deemed to be the Net
Selling Price as defined above for identical products sold to a nonaffiliated
customer nearest to the date of such lease, sale, use, or other disposition.
Provided that LICENSEE or its sublicencees are selling commercially
substantial quantities of Light Valve Film for use by third parties in OEM
Window Products such that a prevailing commercial market price for such
Light Valve Film exists in the market, then for purposes of calculating the
variable royalty due pursuant to Section 3.2 hereof on sales of MSC
Window Products by LICENSEE or its sublicensees, such variable royalty
shall not exceed 10% of the prevailing bona fide arm's length selling price
of Light Valve Film for use by unaffiliated third parties in OEM Window
Products. LICENSEE agrees to provide LICENSOR with all data
reasonably required to verify such selling price of Light Valve Film for use
by unaffiliated third parties in OEM Window Products.
"Technical Information" means all useful information relating to apparatus,
methods, processes, practices, formulas, techniques, procedures, patterns,
ingredients, designs and the like including (by way of example) drawings,
written recitations of data, specifications, parts, lists, assembly procedures,
operating and maintenance manuals, test and other technical reports and
the like owned or controlled by LICENSOR, to the extent they exist, that
relate to Light Valve Film, Licensed Products and/or to the suspensions
used or usable for Licensed Products or Light Valve Film and that consist
of concepts invented or developed by LICENSOR. Know-how of
LICENSOR's suppliers and of LICENSOR's other licensees and their
sublicensees under licenses from LICENSOR shall not be considered
Technical Information owned or controlled by LICENSOR.
2GRANT OF LICENSE.
2.1 License. During the term of this Agreement, LICENSOR hereby
grants LICENSEE a non-exclusive right and license to use (a) all of the
Technical Information furnished by LICENSOR pursuant to this
Agreement, and (b) any invention claimed in (i) any of the unexpired
patents now or hereafter listed on Schedule A attached hereto or (ii)
unexpired patents which issue from pending patent applications now or
hereafter listed in Schedule A, and any continuations, continuations-in-
part, divisions, reissues, reexaminations, or extensions thereof:
(A) To make, lease, use, import, and sell Licensed Products in
the Licensed Territory, and
(B) To make, lease, import, and sell, or otherwise dispose of
Light Valve Film manufactured by LICENSEE pursuant to this
Agreement solely to an Authorized User in the permitted territory and
for the applications specified and purpose permitted on Schedule B
hereof. The license granted pursuant to this Section 2.1(B) shall be
royalty-free.
2.2 No Other Rights. LICENSEE agrees that, except for the specific
licenses granted to it under Section 2.1 hereof, LICENSEE has not
acquired any rights or licenses under this Agreement to use Light Valve
Film or any components thereof made by LICENSEE pursuant to this
Agreement except for the purposes of research and development pursuant
to Section 4.2 hereof.
2.3 Sublicenses. LICENSEE shall have the right to grant non-
exclusive sublicenses to any majority-owned and controlled subsidiary of
LICENSEE, whose obligations LICENSEE hereby guarantees, and which
acknowledges to LICENSOR in writing that it wishes to become a
sublicensee hereunder prior to doing so and agrees to be bound by the
terms and conditions of this Agreement. All sublicenses shall (i) be non-
exclusive, (ii) shall terminate with the termination of the rights and licenses
granted to LICENSEE under Section 2.1 hereof, and be otherwise limited
in accordance with the limitations and restrictions which are imposed on
the rights and licenses granted to LICENSEE hereunder, (iii) contain
confidentiality provisions no less protective than those contained in
Section 12.1 hereof, and (iv) shall contain such other terms, conditions,
and licenses as are necessary to enable LICENSEE to fulfill its obligations
hereunder. LICENSEE shall send LICENSOR a copy of every sublicense
agreement or other agreement entered into by LICENSEE in connection
with a sublicense hereunder within thirty (30) days of the execution
thereof.
3 FEES AND PAYMENT SCHEDULE.
3.1 Fixed Royalties. During the term of this Agreement LICENSEE
agrees to pay LICENSOR the non-refundable fixed royalties (in U.S.
Dollars) specified below for each of the stated periods;
Period Amount
[Confidential Information Omitted and filed separately with the Securities
and Exchange Commission.]
3.2 Variable Royalties. In addition, LICENSEE shall pay
LICENSOR variable royalties to the extent that such variable royalty
exceeds the applicable period's fixed royalty. Until that threshold is
reached, there is no variable royalty due for that period. Subject to the
limitation in the foregoing, during the term of this Agreement, LICENSEE
agrees to pay LICENSOR a variable royalty which shall be the percentage
specified below of the Net Selling Price of Licensed Products which
embody, or the manufacture of which utilizes, any of the rights granted
under Section 2.1(A) hereof, and which are manufactured by or for
LICENSEE and sold, leased, used or otherwise disposed of by or for
LICENSEE or a permitted sublicensee. Payments under Section 3.2 shall
be made on a quarterly basis and made within 45 days after the end of the
calendar quarter in which such Licensed Products were sold, leased, used
or otherwise disposed of by or for LICENSEE or a permitted sublicensee
hereunder.
Percent Royalty Type of Licensed Product
No Royalty Sales of Light Valve Film to Authorized Users.
5% Light Valve Film used to retrofit (i.e., be combined with)
a pre-existing installed window which at the time of the
window's original installation was not intended to be or
comprise a Light Valve, regardless of whether said
combination is effected by attaching or bonding or
otherwise integrating said Light Valve Film into or onto
the pre-existing window ("Retrofit Products").
5% Light Valve Architectural Window Products or Light
Valve Transportation Vehicle Window Products sold by
LICENSEE directly, rather than as a Retrofit Product
("MSC Window Products")
10% Light Valve Film which is not sold, leased or otherwise
disposed of to Authorized Users pursuant to the license
granted under Section 2.1(B) hereof and which is used or
intended for use in combination with any type of window
other than Retrofit Products and MSC Window Products,
including, but not limited to, newly constructed windows
("OEM Window Products").
3.3 Method of Payment. All payments made to LICENSOR under
this Agreement shall be in U.S. dollars and shall be paid by wire transfer
of immediately available funds to the account of Research Frontiers
Incorporated at Chase Manhattan Bank, 1064 Old Country Road,
Plainview, New York 11803, Account No.: 210-007702, ABA Wire Code
No.: 021 000 128, or to such other account or place, as LICENSOR may
specify in a notice to LICENSEE.
3.4 Reports. Within 45 days after the end of each fiscal quarter,
LICENSEE shall send to LICENSOR: (a) a quarterly report setting forth
(1) the amount of Light Valve Film sold, leased, disposed of, or delivered
by or for LICENSEE and its sublicensees during such quarter to
Authorized Users, with the amounts sold to each Authorized User and their
identity clearly broken down, and (2) in reasonable detail the amount of
Licensed Products sold, used, leased or otherwise disposed of by or for
LICENSEE and its sublicensees during such quarter, the applicable
variable royalty percentage being used, any deductions taken or credits
applied, and the currency exchange rate used to report sales made in
currencies other than U.S. dollars. LICENSEE shall use the exchange rates
for buying U.S. dollars in effect on the last day of each quarter, as specified
in The New York Times. The first report submitted under this Agreement
shall cover the period from the Effective Date of the Agreement to the end
of the first quarter in which Light Valve Film is produced hereunder or
Licensed Products are sold, leased, used or otherwise disposed of
hereunder by or for LICENSEE and its sublicensees. LICENSEE shall also
furnish to LICENSOR at the same time it becomes available to any third
party, a copy of each brochure, price list (for purposes of verifying the
statements given by LICENSEE to LICENSOR under this Agreement),
advertisement or other marketing and promotional materials prepared,
published or distributed by LICENSEE or its sublicensees relating to Light
Valve Film or Licensed Products.
3.5 Recordkeeping. LICENSEE shall keep and shall cause each
sublicensee to keep for four (4) years after the date of submission of each
report supported thereby, true and accurate records, files, data and books
of accounts that relate to the manufacture, sale or other disposition of
Light Valve Film and Licensed Products, reasonably required for
verification of the Net Selling Price of Licensed Products, deductions
therefrom and variable royalties paid, as well as the other information to
be given in the statements herein provided for. LICENSOR and
LICENSEE agree that an independent certified public accounting firm
(selected by LICENSOR from the largest ten certified public accounting
firms in the United States of America) may audit such records, files and
books of accounts to determine the accuracy of the statements given by
LICENSEE pursuant to Section 3.4 hereof and report solely thereon. Such
an audit shall be made upon reasonable advance notice to LICENSEE and
during usual business hours, and LICENSOR shall audit the records no
more than once per calendar year and any such audit shall be limited to the
preceding three (3) calendar years. The cost of the audit shall be borne by
LICENSOR, unless the audit shall disclose a material breach by
LICENSEE of any term of this Agreement, or an underpayment error in
excess of five percent of the total monies paid to LICENSOR by
LICENSEE, during the audited period, in which case LICENSEE shall
bear the full cost of such audit. LICENSEE agrees to pay LICENSOR all
additional monies that are disclosed by the audit to be due and owing to
LICENSOR within thirty days of the receipt of the report.
3.6 Sales, Use and Returns. Licensed Products shall be considered
as sold, leased or used and royalties shall accrue when such Licensed
Products are paid for by the customer. If as a result of a price reduction or
a return of Licensed Products previously sold, a credit or refund to a
customer is given on part or all of the sale price of such Licensed Products,
a credit shall be allowed against royalties accruing thereafter under this
Agreement equal to the royalty paid on that part of the sales price so
credited or refunded.
4OBLIGATIONS OF LICENSOR AND LICENSEE.
Confidential Information Omitted and filed separately with the Securities
and Exchange Commission.]
4.2 Development of Light Valve Film. LICENSOR and LICENSEE
shall cooperate to develop initial specifications for Light Valve Film which
specifications may include desired thickness, particle concentration and
other items. LICENSEE shall then use its reasonable efforts to produce
sample production rolls or pieces of Light Valve Film meeting such
specifications for the evaluation and use of LICENSOR and licensees and
prospective licensees of LICENSOR, and for use by LICENSEE but only
for internal research and development and for use in Licensed Products
pursuant to Section 2.1(A) hereof. After consultation with LICENSEE,
LICENSOR may at any time propose changes in the size or other
specifications of the Light Valve Film to be produced under this
Agreement. LICENSEE agrees to use reasonable efforts, as it determines
at its sole discretion, throughout the term of this Agreement, including
giving due consideration to the implementation of reasonable processes,
procedures or modifications suggested by LICENSOR, to improve the
quality of Light Valve Film. However, LICENSEE shall be solely
responsible for determining the specifications for all Light Valve Film and
Licensed Products, and for any improvements therein.
4.3 LICENSOR Purchases; No Resales by LICENSOR. Upon
request of LICENSOR, LICENSEE shall sell and deliver to LICENSOR,
for its own use (including for purposes of demonstration, publicity,
marketing and evaluation purposes) only, sample quantities of Light Valve
Film at LICENSEE's prevailing market prices, or if there is no prevailing
market price, at a price equal to LICENSEE's direct manufacturing cost for
the Light Valve Film purchased by LICENSOR. No royalty shall be due
on any sales of Light Valve Film by LICENSEE to LICENSOR.
LICENSEE acknowledges that LICENSOR and its licensees (or entities
who have been granted the option of entering into license agreements with
LICENSOR) may independently manufacture (or have third parties
manufacture for them) and sell Light Valve Film under the terms of
agreements between them and LICENSOR, or may independently
manufacture and sell Light Valve Film which LICENSOR produces, or has
produced on its behalf. Nothing contained in this Agreement shall impose
any obligation on LICENSOR or any other parties to purchase any Light
Valve Film from LICENSEE. Notwithstanding anything contained herein
to the contrary, during the term of this Agreement LICENSOR may
provide Light Valve Film samples obtained by LICENSOR pursuant to this
Section 4.3 to third parties so long as LICENSOR does not receive any
monetary payment from the recipient for the provision of such Light Valve
Film.
4.4 Compliance. LICENSEE agrees that, without limitation, any
manufacture, sale, lease, use or other disposition of Light Valve Film that
is not in strict accordance with (1) the provisions of this Agreement, (2)
restrictions on the type of product, or the territory in which such product
may be, made, used, sold or otherwise disposed of by or for an Authorized
User, or other provisions or restrictions, which are contained in any other
agreement in force between LICENSOR and an Authorized User which is
known to LICENSEE which relates to Light Valves or Light Valve Film,
or (3) with the provisions of any other agreement then in force to which
LICENSEE is a party and which relates to Light Valves or Light Valve
Film, shall be deemed a material breach of this Agreement.
4.5 End Users. LICENSEE agrees to require all direct recipients of
Light Valve Film to whom Light Valve Film is sold, leased, or otherwise
disposed of by LICENSEE or its sublicensees, to look only to LICENSEE
and not to LICENSOR or its affiliates for any claims, warranty, or liability
relating to such Light Valve Film. LICENSEE agrees to take steps to
reasonably assure itself that Light Valve Film sold, leased or otherwise
disposed of by or for LICENSEE is being used for permitted purposes
only. If a party which is not then listed on Schedule B hereto wishes to
obtain samples of Light Valve Film or to purchase Light Valve Film from
LICENSEE, LICENSEE shall notify LICENSOR and shall refer such party
to LICENSOR. If such party enters into a suitable agreement with
LICENSOR, LICENSOR shall inform LICENSEE whether such party may
then obtain samples or purchase Light Valve Film from LICENSEE.
LICENSEE and its sublicensees may sell Light Valve Film to distributors
and other third parties in accordance with the licenses granted under
Section 2.1 hereof, and shall require, by way of sales order, purchase order,
agreement or otherwise ("Sales Documentation"), that all third parties
receiving such Light Valve Film (whether or not incorporated into a
Licensed Product) agree to the use the Light Valve Film only in the
specific manner indicated in the Sales Documentation and consistent with
the licenses granted under Section 2.1 hereof. As between LICENSOR and
LICENSEE, the burden of proving whether a particular sale of Light Valve
Film is for a Retrofit Product, MSC Window Product, or OEM Product,
shall be with the LICENSEE, and any sales of Light Valve Film not
otherwise proven to be a Retrofit Product or a MSC Window Product, shall
be deemed to be an OEM Window Product.
[Confidential Information Omitted and filed separately with the Securities
and Exchange Commission.]
4.7 Laws and Regulations. LICENSEE agrees that it shall be solely
responsible for complying with all laws and regulations affecting the
manufacture, use and sale or other disposition of Licensed Products and
Light Valve Film by LICENSEE and its sublicensees, and for obtaining all
approvals necessary from governmental agencies and other entities.
LICENSEE agrees to maintain a file of all such approvals and, after
entering into a confidentiality agreement reasonably acceptable to
LICENSEE and LICENSOR so as to minimize disclosure to competitors
of any proprietary information which may be contained in such approvals,
to send LICENSOR a copy of all such approvals (including English
translations thereof in the case of approvals required by any foreign
country) within 10 business days of any written request for such copies by
LICENSOR.
4.8 Purchase of Materials and Components from Others. By virtue
of the disclosure of Technical Information and training provided from time
to time by LICENSOR to LICENSEE and to its other licensees, and each
of their sublicensees and affiliates, any Light Valve or suspensions, films,
polymers, coatings and particles (each, a "Component"), which
LICENSEE or its sublicensees makes, has made for it, or purchases from
any third party for use in Light Valve Film or Licensed Products shall be
deemed to have been manufactured at least in part using the Technical
Information provided by LICENSOR. LICENSEE and its sublicensees
each hereby agrees that (i) all Components shall be used only in strict
accordance with the provisions of this Agreement, and that such
Components may not be used for any other purpose or resold by
LICENSEE or its sublicensees except as specifically permitted by the
license granted in Section 2.1(A) hereof as an integral part of a Licensed
Product or as specifically permitted by the license granted in Section
2.1(B) hereof, and (ii) LICENSEE and its sublicensees will only look to the
manufacturer or supplier of such Component or other item used by
LICENSEE or its sublicensees, and not to LICENSOR or its affiliates for
any claims, warranty, or liability relating to such Component or other item.
4.9 No other obligations. LICENSEE and LICENSOR have no other
obligations to each other except as expressly provided in this Agreement.
5 TRADEMARKS.
5.1 Trademarks. All trademarks or service marks that either party
may adopt and use for Light Valve Film or other products incorporating
Light Valves are and shall remain the exclusive property of the adopting
party, and the other party shall not obtain any rights and license to such
marks under this Agreement, but may inform others that the adopting party
has produced Light Valve Film or products incorporating Light Valves
under such mark or marks.
6 INSURANCE AND INDEMNIFICATION.
6.1 Insurance. LICENSEE shall maintain at all times ample product
liability and other liability insurance covering its operations relating to the
subject matter of this Agreement.
6.2 Indemnification. LICENSEE, and its affiliates, successors and
assigns and sublicensees (each, an "Indemnifying Party"), each hereby
indemnify and agree to hold harmless LICENSOR and its shareholders,
officers, directors, agents and employees (each, an "Indemnified Party"),
against any liability, damage, loss, fine, penalty, claim, cost or expense
(including reasonable costs of investigation and settlement and attorneys',
accountants' and other experts' reasonable fees and expenses) arising out
of any action or failure to take action by any Indemnifying Party relating
to this Agreement including an Indemnifying Party's manufacture, sale,
use, lease or other disposition of Light Valve Film, Licensed Products and
related materials (other than sales by LICENSEE to LICENSOR pursuant
to Section 4.3 hereof), or other use of the information and rights granted
hereunder. Any knowledge of LICENSEE's or its sublicensee's activities
by LICENSOR or its representatives shall in no way impose any liability
on LICENSOR or reduce the responsibilities of LICENSEE hereunder or
relieve it from any of its obligations and warranties under this Agreement.
7FUTURE PATENTS.
7.1 Future Patents. Each party, at its cost, shall have the right to file
patent applications in the United States and in foreign countries covering
any invention made by such party.
7.2 Improvements and Modifications. (a) If during the term of this
Agreement, LICENSOR makes any improvements or modifications which
are invented or developed by or on behalf of LICENSOR after the Effective
Date of this Agreement and on or before [Confidential Information
Omitted and filed separately with the Securities and Exchange
Commission], and which relate in any way to or are useful in the design,
operation, manufacture and assembly of Light Valve Film or Licensed
Products, such improvements and modifications shall be automatically
included, on a non-exclusive basis, in the rights and licenses granted
pursuant to Section 2.1 hereof, and any patents and/or patent applications
relating thereto shall automatically be added to Schedule A hereof.
(b) If during the term of this Agreement, LICENSOR makes any
improvements or modifications pertaining to [Confidential Information
Omitted and filed separately with the Securities and Exchange
Commission], and which relate in any way to or are useful in the design,
operation, manufacture and assembly of Light Valve Film or Licensed
Products, LICENSEE shall have the option, exercisable by LICENSEE
sending LICENSOR notice of such exercise, of having such improvements
and modifications pertaining to particle colors and film durability
included, on a non-exclusive basis, in the rights and licenses granted
pursuant to Section 2.1 hereof, and any patents and/or patent applications
relating thereto shall be added to Schedule A hereof. For each license year
beginning with the license year in which such option is exercised, the fixed
royalties payable under Section 3.1 shall be doubled, and the variable
royalty percentages of the Net Selling Price listed in Section 3.2 for
Licensed Products which embody, or the manufacture of which utilizes,
such improvements or modifications, shall be multiplied by 1.5 so as to
equal 7.5% in the case of Retrofit Products and MSC Window Products,
and shall equal 15% in the case of OEM Products.
(c) Any future improvements or modifications invented or developed
by or on behalf of LICENSEE, LICENSEE's sublicensees and LICENSOR
(other than as specifically described in Sections 7.2(a) and 7.2(b)) after the
Effective Date of this Agreement, if any, which relate in any way to or are
useful in the design, operation, manufacture and assembly of Light Valve
Film, Licensed Products and/or to the suspensions or other components
used or usable in Light Valve Film or Licensed Products shall not be
included in this Agreement. Upon written request by the non-inventing
party, LICENSOR and LICENSEE shall negotiate with each other
regarding the grant of nonexclusive rights and licenses to use such
improvements and modifications, but neither party shall be obligated to
grant such rights and licenses to one another.
(d) During the term of this Agreement each of the parties hereto
agrees to inform the other in writing (without any obligation to reveal
details which would be confidential information), at least as frequently as
once a year in January of each calendar year, if any significant
improvements or modifications have been made relating to the subject
matter of this Agreement, and as to the general nature of any such
improvements and modifications.
(e) Notwithstanding the foregoing, LICENSOR, after first receiving
approval from LICENSEE, may, but shall not be required to, voluntarily
and without additional cost to LICENSEE disclose certain information
relating to future improvements and modifications and license to
LICENSEE rights in such certain future improvements and modifications,
and any information so disclosed will be considered Technical Information
which LICENSEE shall be obligated to keep confidential pursuant to
Section 12.1 of this Agreement. In connection therewith, LICENSOR,
after first receiving approval from LICENSEE, may voluntarily add patents
and/or patent applications to Schedule A hereof. No disclosure of any
information by LICENSOR shall in any way establish a course of dealing
or otherwise require LICENSOR to make any future disclosure of
information under this Agreement.
7.3 Foreign Patent Applications. During the term of this Agreement,
LICENSEE shall have the right to designate that any patent application
now or hereafter listed on or incorporated into Schedule A shall be filed or
maintained in any foreign country. If so designated and if legally possible
to do so, LICENSOR agrees to promptly file, prosecute and maintain such
applications and resulting patents, and LICENSEE shall pay to LICENSOR
the complete cost, including reasonable attorney's fees, to file, prosecute
and maintain any such patent application and resulting patents specifically
so designated by LICENSEE.
8TECHNOLOGY TRANSFER.
8.1. Documentation. Within thirty calendar days after the Effective
Date of this Agreement, LICENSOR shall furnish LICENSEE with all
Technical Information owned or controlled by LICENSOR, which is
reasonably necessary or desirable in order for LICENSEE to manufacture
Light Valve Film and Licensed Products. Such Technical Information,
which relates to experimental products, shall include, without limitation
thereto (1) a document entitled Handbook of Technical Information
Relating to Variable Density Optical Devices Incorporating a Suspension
which contains confidential and proprietary information of LICENSOR
and (2) photocopies of all U.S. Patents and patent applications relating to
Light Valve Film and Licensed Products owned or controlled by
LICENSOR as of the Effective Date of this Agreement or hereafter
incorporated into Schedule A hereto pursuant to the terms of this
Agreement. LICENSOR shall not be obligated hereunder to furnish copies
of LICENSOR's foreign patents and patent applications, but will furnish
a list thereof in Schedule A hereto.
8.2 Training. LICENSEE's technically skilled personnel designated
by LICENSEE (with travel and living expenses paid by LICENSEE) shall
make one or more visits for training and to inspect LICENSOR's research
and development facilities relating to Light Valve Film and Licensed
Products. The visits of employees of LICENSEE to LICENSOR's facility
shall be carried out within the six-month period commencing with the
Effective Date of this Agreement, and shall not exceed 200 man-hours
during such period. To assist LICENSEE's employees while they are at
LICENSOR's facility, LICENSOR's technical staff shall provide up to 200
man-hours assistance during such period at no cost to LICENSEE.
Additionally, there shall be no cost to LICENSEE for materials used for
training during the initial training at LICENSOR's facility.
8.3 Materials and Additional Training. Upon request by LICENSEE
during the term of this Agreement, when mutually convenient to
LICENSOR and LICENSEE, LICENSOR shall supply LICENSEE with
additional training and with small quantities of suspension for
experimental use only by LICENSEE, and shall charge LICENSEE $750
per man/day plus the cost of any materials used in providing such training
or making such suspension, plus the cost of shipping such suspension to
LICENSEE. Each invoice submitted by LICENSOR for such service shall
include detailed explanations of the charges, and, if requested by
LICENSEE, copies of receipts.
8.4 Inquiries. LICENSEE and LICENSOR may also at any time
during the term of this Agreement make reasonable inquiry by telephone,
facsimile or mail to one another in regard to any information or data
furnished by LICENSOR to LICENSEE pursuant to this Agreement.
8.5 Visits. During all visits by either party to the facilities of the
other party, visitors shall comply with all reasonable rules of the host
company, and each party to this Agreement will indemnify and hold the
other party harmless from any liability, claim or loss whatsoever (i) for any
injury to, or, death of, any of its employees or agents while such persons
are present at the facility of the other party; and (ii) for any damages to its
own property or to the property of any such employee or agent which may
occur during the presence of any such person at the facility of the other
party, regardless of how such damage occurs, if the rules of the host are
followed.
8.6 Sole Purpose. Any documentation or information supplied
pursuant to this Agreement by either party to the other shall be used solely
for the purposes set forth in this Agreement.
9INTELLECTUAL PROPERTY PROTECTION RESPONSIBILITIES.
9.1 Proprietary Rights: Notices. Each party shall provide
appropriate notices of patents, or other similar notice of the patent rights
of the other party on all products utilizing the patented inventions of the
other party. Either party may add its own patent notice to any copy or
embodiment which contains its patented inventions.
9.2 LICENSOR Exclusive Owner. LICENSEE hereby acknowledges
LICENSOR as purporting to be the sole and exclusive owner of the patents
and patent applications listed on Schedule A, and that, except for the rights
granted hereunder, LICENSEE shall not have any rights or attempt to
assert any ownership rights in and to those patents and patent applications.
9.3 Infringement. If within six months of receipt by LICENSOR
from LICENSEE of a notice that a third party is infringing on one of the
patents now or hereafter listed on Schedule A hereto in connection with the
sale of Licensed Products in a country (the "Infringed Country") within the
Licensed Territory (with the details and evidence of such infringement
included in such notice), LICENSOR does not stop such infringement in
the Infringed Country or bring suit against at least one such infringer, and
provided that the third party's infringing sales of such Licensed Products
(as demonstrated by LICENSEE) in the Infringed Country are at least equal
to twenty percent (20%) of LICENSEE's sales of Licensed Products for the
most recently-completed fiscal year in the Infringed Country, then fifty
percent (50%) of LICENSEE's royalty obligation under Section 3.2 of this
Agreement with respect to sales of Licensed Products within the Infringed
Country shall cease for sales of such Licensed Products in the Infringed
Country for which royalties are based solely on LICENSEE's use of such
infringed patent. Such relief from royalty obligations shall commence on
the date six months after the notice referred to above and shall continue
until the date LICENSOR takes the action called for above or until such
infringer's sales fall below the 20% threshold described above, whichever
occurs first. There shall be no obligation on the part of LICENSOR to
bring suit against more than one infringer at a time.
9.4 Patents in Force. To the best of LICENSOR's knowledge, all of
the patents listed on Schedule A hereto are currently in force.
10 TERM AND TERMINATION.
10.1 Term. The term of this Agreement shall extend from the
Effective Date of this Agreement to the date of termination of this
Agreement. Unless sooner terminated or extended, as herein provided for
below, this Agreement shall terminate upon the expiration of the later of
(A) the last to expire of the patents now or hereafter listed in Schedule A
hereof, and (B) the expiration of the period in which LICENSEE is
obligated to maintain confidential Technical Information of LICENSOR
pursuant to Section 12.1 hereof. LICENSEE shall confirm to LICENSOR
periodically that it is still obligated to maintain Technical Information
confidential, but the failure of LICENSEE to give such confirmation shall
in no event diminish the confidentiality obligations contained in Section
12.1 hereof. During such period, LICENSEE shall continue to pay
royalties under Sections 3.1 and 3.2.
10.2 Termination by LICENSEE. LICENSEE may terminate this
Agreement effective as of June 30, 1998 or as of any anniversary thereof
by giving LICENSOR prior notice thereof unless sooner terminated as
hereinafter provided. Such notice shall be made in writing and shall be
given between 30 and 90 days prior to the effective date for which such
termination is to be effective. If LICENSEE decides to terminate this
Agreement for any reason, LICENSEE shall provide LICENSOR, along
with the aforementioned notice of termination, with a written report
describing the reasons for such termination.
10.3 Termination by LICENSOR. LICENSOR may terminate this
Agreement at any time upon 30 days written notice specifying with
reasonable detail any alleged material breach, if LICENSEE shall at any
time breach any material term of this Agreement and such breach is not
cured within any applicable cure period specified in Article 11 of this
Agreement, or default in the payment of any monies due in accordance
with this Agreement, repeatedly provide inaccurate reports hereunder, or
if there has been a cessation by LICENSEE of general operations or of
work related to Light Valve Film and Licensed Products.
10.4 Effect of Termination. If this Agreement expires or is
terminated for any reason whatsoever, in addition to any other remedies
which one party may have against the other: (1) all of LICENSEE's rights
and licenses under this Agreement shall cease, and LICENSEE shall
immediately return to LICENSOR all Technical Information furnished to
LICENSEE under this Agreement, together with all reproductions, copies
and summaries thereof; provided, however, that LICENSEE may retain
solely for archival purposes one copy of all such documents in its legal
department files, (2) at LICENSOR's option, LICENSEE shall, within 30
days of the date of such termination, either (A) sell and deliver to
LICENSOR under the terms specified in Section 4.3 any Light Valve Film
which shall then be in the possession of LICENSEE, and, if requested by
LICENSOR, LICENSEE shall finish and deliver to LICENSOR any Light
Valve Film in the process of manufacture as soon as possible and, in any
case, not later than 30 days after receiving LICENSOR's request, and/or
(B) with respect to any unsold inventory and work in the process of
manufacture, to complete such work in process and sell any remaining
inventory during the period not to exceed six months from the date of
termination or expiration of this Agreement provided that the LICENSEE
makes all royalty payments due under Section 3.2 hereof with respect to
such sales, and provided further that at the completion of such six-month
period, LICENSEE shall promptly destroy and dispose of any Light Valve
Film (and Light Valve Film in the process of manufacture) not sold under
this Section 10.4 and (3) if this Agreement is terminated for any reason on
or before [Confidential Information Omitted and filed separately with the
Securities and Exchange Commission], LICENSEE hereby grants to
LICENSOR a nonexclusive, royalty-free, irrevocable, worldwide license
with the right to grant sublicenses to others to utilize all technical
information, improvements and/or modifications (whether or not the
subject of patents or pending patent applications) developed or invented
by or on behalf of LICENSEE and/or its sublicensees, subcontractors, or
agents hereunder through the date of such termination of this Agreement
relating to Light Valves, Light Valve Film or Licensed Products, and upon
such termination, LICENSEE shall provide LICENSOR in reasonable
detail complete information regarding such technical information,
improvements and/or modifications. The foregoing license shall be self-
effectuating, but LICENSEE agrees upon written notice by LICENSOR at
any time hereafter to deliver to LICENSOR within 30 days of such notice
any document or other instrument reasonably requested by LICENSOR to
convey such license rights to LICENSOR such as, by way of example,
confirmations or instruments of conveyance or assignment. No
termination of this Agreement by expiration or otherwise shall release
LICENSEE or LICENSOR from any of its continuing obligations
hereunder, if any, or limit, in any way any other remedy one party may
have against the other party. Notwithstanding the foregoing, LICENSEE's
obligations to LICENSOR under Sections 3.4, 3.5, 4.7, 4.8, 6.1, 6.2, 7.2,
8.5, 10.4, 12.1, and Articles 13 and 14 shall survive any termination or
expiration of this Agreement.
11 EVENTS OF DEFAULT AND REMEDIES.
11.1 Events of Default. Each of the following events shall constitute
an "Event of Default" under this Agreement:
11.1.1(a) A party's material breach or material failure to
punctually perform any of its duties and obligations under this Agreement,
which material breach or failure, if curable, remains uncured for thirty (30)
days after written notice of such breach or failure is received by the
breaching party; or (b) a material misrepresentation is made by a party in
any representation or warranty contained in this Agreement and the
misrepresented facts or circumstances, if curable, remain uncured thirty
(30) days after written notice of such misrepresentation is received by the
breaching party; and, in either case, if such breach or misrepresentation is
not curable, termination shall occur thirty (30) days after such
misrepresentation or breach at the option of the non-breaching party; or
11.1.2The failure by a party upon request to provide the other
party with adequate assurances of its performance of all obligations under
this Agreement upon: (a) such first party's filing of a voluntary petition in
bankruptcy; (b) the filing of any involuntary petition to have such first
party declared bankrupt which has not been dismissed within ninety (90)
days of its filing; (c) the appointment of a receiver or trustee for such first
party which has not been rescinded within ninety (90) days of the date of
such appointment; or (d) such first party otherwise becoming insolvent or
otherwise making an assignment for the benefit of creditors.
11.2 Default by LICENSEE. If there occurs an Event of Default
with respect to LICENSEE, LICENSOR may:
(a) seek damages; and/or
(b)seek an injunction or an order for mandatory or specific
performance; and/or
(c) terminate this Agreement and the licenses granted to
LICENSEE hereunder whereupon LICENSOR shall have no
further obligations under this Agreement except those which
expressly survive termination.
11.3 Default by LICENSOR. If there occurs an Event of Default
with respect to LICENSOR, LICENSEE may:
(a)seek damages; and/or
(b)seek an injunction or an order for mandatory or specific
performance; and/or
(c) terminate this Agreement and the licenses granted to
LICENSEE hereunder whereupon LICENSEE shall have no
further obligations under this Agreement except those which
expressly survive termination, and except with respect to
royalty payments due and owing as of the termination date or
any subsequent period specified in Section 10.4.
12CONFIDENTIALITY.
12.1 Confidential Information. (a) LICENSEE agrees for itself, its
sublicensees, and their employees and agents that for twenty (20) years
from the date of its receipt of confidential information disclosed to
LICENSEE by LICENSOR pursuant to this Agreement, such information
shall be held in confidence; provided, however, there shall be no obligation
to treat as confidential information which is or becomes available to the
public other than through a breach of this obligation, or which was already
possessed by LICENSEE in writing (or otherwise provable to be in the
possession of LICENSEE) prior to the Effective Date of this Agreement or
which is shown by LICENSEE to have been received by it from a third
party who had the legal right to so disclose it without restrictions and
without breach of any agreement with LICENSOR or its licensees. The
burden of proving the availability of any exception of confidentiality shall
be on the LICENSEE. LICENSOR shall affix an appropriate legend on all
written documentation given to LICENSEE which contains confidential
information. LICENSOR's policy is to require any third party receiving
Technical Information to maintain such information in confidence subject
to reasonable exceptions similar to the ones contained in this Agreement.
LICENSEE understands that some of LICENSOR's Technical Information
will become public through the issuance of patents and the publication of
patent applications, or as may be required by law. LICENSOR agrees to
inform LICENSEE if it learns that any material confidential Technical
Information becomes public otherwise than through the issuance of patents
and the publication of patent applications. Other than for the oral
information conveyed during the training conducted pursuant to Sections
8.2 and 8.3 hereof all of which shall be deemed to be confidential
information, if confidential information is otherwise conveyed orally by
LICENSOR after training has been completed, LICENSOR shall specify
in writing to LICENSEE within 30 days after the date such information is
being conveyed that the information conveyed is confidential. It is
understood and agreed that, unless otherwise provided in a separate
agreement between LICENSEE and LICENSOR, LICENSEE has no
obligation hereunder to provide LICENSOR with any confidential or
proprietary information, and that LICENSOR shall have no obligation
hereunder to LICENSEE to maintain in confidence or refrain from
commercial or other use of any information which LICENSOR is or
becomes aware of under this Agreement. The terms and provisions of this
Agreement shall not be considered confidential, and the parties hereto
acknowledge that, pursuant to the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder, LICENSOR files
copies of its license agreements with the Securities and Exchange
Commission (SEC) and with NASDAQ and the Boston Stock Exchange.
LICENSOR agrees that it will make application to the SEC requesting, at
the discretion of the SEC, confidential treatment of the fixed royalties
payable by LICENSEE under Section 3.1 hereof. LICENSEE agrees that
for the period of time during which LICENSEE is obligated to keep
Technical Information confidential hereunder, LICENSEE will not make,
use, sell, lease or otherwise dispose of products using or directly or
indirectly derived from Light Valve Film or Licensed Products or which
otherwise comprise suspended particles, which when subjected to a
suitable electric or magnetic field, orient to produce a change in the optical
characteristics of the suspension ("SPD Technology") unless an agreement
between LICENSOR and LICENSEE permitting it to do so is in full force
and effect and the royalties, if any, provided in such agreement are being
paid to LICENSOR on such products. The foregoing restriction shall not
apply to products (i) which do not directly or indirectly incorporate SPD
Technology, such as, but not limited to, liquid crystal devices, or
electrochromic devices, or (ii) which incorporate technology involving
suspended particles, which when subjected to a suitable electric or
magnetic field, orient to produce a change in the optical characteristics of
the suspension but which are independently developed and which is not in
any way directly or indirectly derived from any Technical Information of
LICENSOR or its licensees, sublicensees, or any of their affiliates. Nothing
contained in this section, however, shall be construed as granting
LICENSEE any rights or licenses with respect to any Technical
Information or patents of LICENSOR or its other licensees or their
sublicensees.
(b) LICENSEE will have the right to disclose Technical Information
of LICENSOR to a subcontractor; provided, however, that LICENSEE
shall only disclose such Technical Information as is appropriate and
necessary to enable said subcontractor to perform its task, and provided
that prior to disclosing any Technical Information to said subcontractor,
said subcontractor has signed a secrecy agreement with LICENSEE at least
as protective of LICENSOR's Technical Information as the provisions of
this Agreement, including, without limitation, said subcontractor's specific
agreement to be bound by the provisions of Section 12.1 hereof to the same
extent as LICENSEE. For such purposes, LICENSEE and LICENSOR will
develop a standard form of secrecy agreement, after which LICENSEE
may use such secrecy agreement with all subcontractors without
LICENSOR's prior approval of the secrecy agreement being necessary.
LICENSEE shall have all subcontractors sign said secrecy agreement prior
to the disclosure of Technical Information to said subcontractor, and
LICENSEE shall send LICENSOR a copy of every such secrecy agreement
within thirty (30) days after the execution thereof.
13 WARRANTIES AND REPRESENTATIONS.
13.1 Reciprocal Representations. Each party represents and
warrants to the other that:
13.1.1 Valid Agreement. The execution and delivery of this
Agreement by the officer or representative so doing, and the consummation
of the transactions contemplated hereby, have been duly authorized by all
necessary corporate action by LICENSOR and LICENSEE and this
Agreement is a valid and binding obligation enforceable against the parties
in accordance with its terms, except to the extent limited by bankruptcy,
insolvency, moratorium and other laws of general application relating to
general equitable principles;
13.1.2 No Conflicts. Nothing herein conflicts with its rights and
obligations pursuant to any agreement by a party and any other entity; and
13.1.3 Publicity. The parties shall have the right to use non-
confidential information, including but not limited to information
concerning this Agreement, for marketing, sales, technical assistance,
investor relations, disclosure and public relations purposes. Unless
disclosure is otherwise required by law, all press releases issued by a party
about this Agreement shall be approved by the other party, with such
party's approval being deemed to have been given if no reasonable
objection has been conveyed to the party wishing to make the press release
within 24 hours of the other party's receipt of a draft of such press release.
The parties acknowledge that the draft press release provided by
LICENSOR to MSC Specialty Films, Inc. on December 18, 1996 has been
approved by LICENSEE, and that information permitted to be disclosed
by a party under this Section 13.1.3 may appear on such party's (or its
subsidiaries') Internet web site, along with links to the Internet web sites
of the other party and its subsidiaries.
13.2 LICENSOR Representations. LICENSOR represents and
warrants, for the benefit of LICENSEE, that:
13.2.1 Title. As of the date hereof, LICENSOR represents and
warrants that it has the right to convey the rights and licenses granted by
this Agreement, and otherwise to perform its obligations under this
Agreement. LICENSOR has caused its employees who are employed to do
research, development, or other inventive work to disclose to it any
invention or information within the scope of this Agreement and to assign
to it rights in such inventions and information in order that LICENSEE
shall receive, by virtue of this Agreement, the licenses granted to it under
Section 2.1 hereof. LICENSOR represents and warrants to LICENSEE
that LICENSOR does not have any information that any of the patents
listed on Schedule A hereof are invalid.
13.2.2 Infringement. As of the date hereof, LICENSOR is not aware
of any claim for patent infringement or the misappropriation of trade
secrets, being asserted against it by any third party; or of any infringement
of the patents listed on Schedule A hereto by any entity.
13.3 No Warranty. LICENSOR and LICENSEE make no guaranty
or warranty to one another under this Agreement (a) that LICENSEE will
be able to develop, manufacture, sell or otherwise commercialize Light
Valve Film or any Licensed Products, or (b) as to the validity of any patent.
14 MISCELLANEOUS.
14.1 Applicable Law. This Agreement shall be interpreted,
construed, governed and enforced in accordance with and governed by the
laws of the State of New York, and LICENSOR and LICENSEE hereby
submit to the exclusive jurisdiction of the state or federal courts located in
the County of Nassau and State of New York for such purposes.
14.2 Confidentiality In Court Proceeding. In order to protect and
preserve the confidential information of a party which the parties recognize
may be exchanged pursuant to the provisions of this Agreement, the
disclosing party may request, and the receiving party shall not oppose, the
court in any action relating to this Agreement to enter a protective order to
protect information which is confidential information under Section 12.1
and to seal the record in the action or to hold the proceedings, or portion
of the proceedings, in camera; provided, that the requested terms do not
prejudice the receiving party's interests. Nothing, however, shall preclude
either party from thereafter moving to unseal its own records or to have
matter and information designated as confidential under any relevant
protective order designated otherwise in accordance with the circumstances
as they shall appear at that time.
14.3 Severability. If any provision of this Agreement is declared or
found to be illegal, unenforceable or void, the parties shall negotiate in
good faith to agree upon a substitute provision that is legal and enforceable
and is as nearly as possible consistent with the intentions underlying the
original provision. If the remainder of this Agreement is not materially
affected by such declaration or finding and is capable of substantial
performance, then the remainder shall be enforced to the extent permitted
by law.
14.4 Waiver. Unless agreed to by the parties in writing to the
contrary, the failure of either party to insist in any one or more instances
upon the strict performance of any one or more of the provisions of this
Agreement, or to exercise any right contained in this Agreement or
provided by law, shall not constitute or be construed as a waiver or
relinquishment of the performance of such provision or right or the right
subsequently to demand such strict performance or exercise of such right,
and the rights and obligations of the parties shall continue unchanged and
remain in full force and effect.
14.5 Captions. The captions and headings in this Agreement are
inserted for convenience and reference only and in no way define or limit
the scope or content of this Agreement and shall not affect the
interpretation of its provisions.
14.6 Assignment. This Agreement shall be binding on and shall
inure to the benefit of the parties and their successors and assigns.
However, LICENSEE agrees that it shall not assign this Agreement or its
rights hereunder without the prior written consent of LICENSOR which
consent LICENSOR may withhold for any reason unless such assignee's
obligations are guaranteed to LICENSOR by LICENSEE, and provided
further that such assignee is a successor to substantially all of LICENSEE's
business relating to Light Valves. Notwithstanding the foregoing,
LICENSEE may assign this agreement upon the prior written consent of
LICENSOR, which consent may not be unreasonably withheld, to any
successor to LICENSEE by way of merger, acquisition, restructuring,
consolidation, or combination (A) whose obligations hereunder are
guaranteed to LICENSOR by LICENSEE if LICENSEE maintains its
corporate existence after such merger, acquisition, restructuring,
consolidation, or combination, or (B) which successor entity has, after
such merger, acquisition, restructuring, consolidation, or combination,
substantial net tangible assets and has provided LICENSEE with adequate
security for all obligations hereunder if LICENSEE no longer maintains its
corporate existence after such merger, acquisition, restructuring,
consolidation, or combination. Upon thirty days prior notice to
LICENSEE, LICENSOR may assign all of its rights and obligations
hereunder to any successor to any of its business interests or to any
company controlling or controlled by LICENSOR. All assignees shall
expressly assume in writing the performance of all the terms and
conditions of this Agreement to be performed by the assigning party.
14.7 Schedules. All Schedules attached to this Agreement shall be
deemed to be a part of this Agreement as if set forth fully in this
Agreement.
14.8 Entire Agreement. This Agreement constitutes the entire
understanding and agreement between LICENSOR and LICENSEE with
respect to the subject matter hereof, supersedes all prior agreements,
proposals, understandings, letters of intent, negotiations and discussions
with respect to the subject matter hereof and can be modified, amended,
supplemented or changed only by an agreement in writing which makes
specific reference to this Agreement and which is executed in writing by
the parties; provided, however, that either party may unilaterally waive in
writing any provision imposing an obligation on the other.
14.9 Notices. Any notice required or permitted to be given or made
in this Agreement shall be in writing and shall be deemed given on the
earliest of (i) actual receipt, irrespective of method of delivery, (ii) on the
delivery day following dispatch if sent by express mail (or similar next day
air courier service), or (iii) on the sixth day after mailing by registered or
certified air mail, return receipt requested, postage prepaid and addressed
as follows:
LICENSOR: Robert L. Saxe, President
and to: Joseph M. Harary, Vice President and General Counsel
Research Frontiers Incorporated
240 Crossways Park Drive
Woodbury, New York 11797-2033
Facsimile: (516) 364-3798
Telephone: (516) 364-1902
LICENSEE: Gerald G. Nadig
President and Chief Operating Officer
Material Sciences Corporation
2300 East Pratt Blvd.
Elk Grove Village, Illinois 60007
Facsimile: (847) 439-8270
Telephone: (847) 439-9800
Copy to: Joseph W. Berenato, III
Myers, Liniak & Berenato
6550 Rock Spring Drive, Suite 240
Bethesda, Maryland 20817
Facsimile:(301) 299-5482
Telephone:(301) 365-8000
or to such substitute addresses and persons as a party may designate to the
other from time to time by written notice in accordance with this provision.
14.10 Bankruptcy Code. In the event that LICENSOR should file a
petition under the federal bankruptcy laws, or that an involuntary petition
shall be filed against LICENSOR, the parties intend that LICENSEE shall
be protected in the continued enjoyment of its rights hereunder to the
maximum feasible extent including, without limitation, if it so elects, the
protection conferred upon licensees under section 365(n) of Title 17 of the
U.S. Code. LICENSOR agrees that it will give LICENSEE immediate
notice of the filing of any voluntary or involuntary petition under the
federal bankruptcy laws.
14.11 Construction. This Agreement and the exhibits hereto have
been drafted jointly by the parties and in the event of any ambiguities in
the language hereof, there shall no be inference drawn in favor or against
either party.
14.12 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
14.13 Status of the Parties. The status of the parties under this
Agreement shall be solely that of independent contractors. No party shall
have the right to enter into any agreements on behalf of the other party nor
shall it represent to any person that it has such right or authority.
The parties, through their duly authorized representatives, and
intending to be legally bound, have executed this Agreement, as of the date
and year first above written, whereupon it became effective in accordance
with its terms.
RESEARCH FRONTIERS INCORPORATED
By: /s/ Robert L. Saxe
Robert L. Saxe, President
Date: January 18, 1997
MATERIAL SCIENCES CORPORATION
By: /s/ Frank D. Graziano
Frank D. Graziano, Senior Vice President-Technology
Date: January 17, 1997
<PAGE>
Schedule A
(As of December 31, 1996)
LIST OF PATENTS
AND PATENT APPLICATIONS
Date Expiration
Patents in the United States Issued Date
4,113,362 Robert L. Saxe et al
"Light Valve, Light Valve Suspension
Materials and Suspension Therefor" 9/12/78 5/11/97
4,131,334 Michael Witte et al
"Light Polarizing Materials, Suspensions
Thereof, and Process for Manufacturing
Such Suspensions" 12/26/78 5/11/97
4,164,365 Robert L. Saxe
"Light Valve for Controlling the
Transmission of Radiation Comprising
a Cell and a Stabilized Liquid Suspension" 8/14/79 8/10/98
4,270,841 Robert L. Saxe
"Light Valve Containing Suspension of
Perhalide of Alkaloid Acid Salt" 6/02/81 10/31/98
4,273,422 Robert L. Saxe
"Light Valve Containing Liquid
Suspension Including PolymerStabilizing System" 6/16/81 3/5/99
4,407,565 Robert L. Saxe
"Light Valve Suspension Containing
Fluorocarbon Liquid" 10/04/83 1/16/01
4,422,963 Robert I. Thompson et al
"Improved Light Polarizing Materials
and Suspension Thereof" 12/27/83 12/27/00
4,772,103 Robert L. Saxe
"Light Valve Containing an Improved
Suspension,and Liquids Therefor" 9/20/88 8/8/06
4,877,313 Robert L. Saxe et al
"Light Polarizing Materials and
Suspensions Thereof" (QA) 10/31/89 2/10/09
5,002,701 Robert L. Saxe
"Light Polarizing Materials and
Suspensions Thereof" 3/26/91 10/27/09
5,093,041 Joseph A. Check, III et al
"Light-Polarizing Material Based on
Ethylene-diamine Polyacetic Acid Derivatives" 3/03/92 7/30/10
5,111,331 Paul Rosenberg
"Electro-Optical Light Modulator" 5/05/92 7/5/09
5,130,057 Robert L. Saxe
"Light Polarizing Materials and Suspensions Thereof"7/14/92 10/31/06
5,279,773 Robert L. Saxe
"Light Valve Incorporating A Suspension
Stabilized With A Block Polymer" 1/18/94 3/23/12
5,325,220 Robert L. Saxe
"Light Valve With Low Emissivity
Coating As Electrode" (JDR-105) 6/28/94 3/9/13
5,463,491 Joseph A. Check III
"Light Valve Employing a Film Comprising
An Encapsulated Liquid Suspension And
Method of Making Such Film" (JDR-101) 10/31/95 11/6/12
5,463,492 Joseph A. Check III
"Light Modulating Film of Improved
Clarity For A Light Valve" (JDR-102) 10/31/95 11/6/12
5,461,506 Joseph A. Check III et al
"Light Valve Suspensions Containing A
Trimellitate Or Trimesate And Light
Valves Containing The Same" (JDR-103) 10/24/95 5/11/13
5,467,217 Joseph A. Check III et al
"Light Valve Suspensions and Films
Containing UV Absorbers and Light
Valves Containing The Same" (JDR-104) 11/14/95 5/11/13
5,516,463 Joseph A. Check III et al
"Method of Making Light Polarizing Particles"
(JDR-106) 05/14/96 7/08/14
<PAGE>
PENDING APPLICATIONS
Serial Number Filing Date
[Confidential Information Omitted and filed separately with the Securities and
Exchange Commission]
<PAGE>
Schedule B
(As of December 31, 1996)
LIST OF ELIGIBLE CUSTOMERS (AUTHORIZED USERS) FOR LIGHT VALVE FILM
Permitted
Name of Customer Licensed Application Territory
Research Frontiers Incorporated All applications Worldwide
Material Sciences Corporation Application and Territory as set forth in
(and its permitted sublicensees) Section2.1(A) of this License Agreement
[INFORMATION REGARDING OTHER AUTHORIZED USERS WILL BE
PROVIDED BY LICENSOR TO LICENSEE FROM TIME TO TIME IN THE FUTURE]
