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EXHIBIT 10(h)
NONEXCLUSIVE LICENSE AGREEMENT
BETWEEN
THE UNIVERSITY OF CHICAGO
AND
SUPERCONDUCTIVE COMPONENTS, INC.
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THIS LICENSE AGREEMENT ("License Agreement") is made by and between THE
UNIVERSITY OF CHICAGO ("University"), organized and existing under the laws of
the State of Illinois and acting in its capacity as Operator of Argonne National
Laboratory under Contract No. W-31-109-ENG-38 with the U.S. Government and
SUPERCONDUCTIVE COMPONENTS, INC., ("SCI") a corporation organized and existing
under the laws of the State of Ohio, either of which may also be referred to
individually as a "Party," and collectively as the "Parties" to this license
agreement.
BACKGROUND
The University as Operator of Argonne National Laboratory under Contract
No. W-31-109-ENG-38 with the U.S. Department of Energy (DOE) conducts research
and development at the Laboratory. Inventions described in patent applications
enumerated in Appendix A attached to this License Agreement were conceived by
the University in the course of and under said Contract and are Subject
Inventions under said Contract in accordance with the terms and conditions
thereof.
The University is entitled to elect title to and obtain patents for Subject
Inventions generated under such Contract, and to license patent rights in
patents which issue thereon in accordance with the terms and conditions of such
Contract and applicable DOE policies. The University elected title to the
enumerated inventions pursuant to said Contract and is the owner thereof subject
to the retention of certain rights thereto by the U.S. Government.
SCI, a small business, manufactures its products in the United States. SCI
is a collaborator with the University under HTS Pilot Center Agreement #85092
for the development of levitator materials, and desires certain rights in and to
the enumerated inventions, principally for the manufacture and sale of high
temperature superconducting powders.
NOW, THEREFORE, the Parties agree as follows:
1. DEFINITIONS
1.1 "Combination Product" means any product sold as a single unit but which
incorporates both (a) one or more Licensed Products and (b) one or more
products, not themselves Licensed Products, which the seller of the
Combination Product also offers for sale separately from the Combination
Product.
1.1 "Effective Date" means the date upon which the last Party executed this
License Agreement
1.2 "Field of Use" means levitator materials and seeds for inducing phase
control in levitator materials during melt processing.
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1.3 "Gross Sales" means:
(a) with respect to Licensed Products sold for cash other than Licensed
Products sold as an element of a Combination Product, the price
actually charged by SCI in the sale of the Licensed Product, less
returns and allowances as are customary in the trade; and
(b) with respect to Licensed Products sold or otherwise transferred other
than for cash, and with respect to Licensed Products sold for cash as
an element of a Combination Product, and with respect to Licensed
Products used or consumed by SCI in the manufacture of another
product, either (i) an amount per unit of Licensed Product equal to
the average sale price of the Licensed Product determined in
accordance with clause (a) above for sale to third parties in the same
and the preceding quarterly accounting period, or (ii) if no sales of
the Licensed Product have occurred in the same and the preceding
quarterly accounting period, other than as an element of a Combination
Product, an amount equal to the price actually charged in the sale of
the Combination Product, less returns and allowances as are customary
in the trade.
1.4 "Licensed Patent(s)" means United States patents granted on Patent
Applications and any and all patents of addition, reissues, reexaminations,
or extensions of the foregoing, providing that the University is the owner
thereof.
1.5 "Licensed Product" means any product or composition made or manufactured by
any art, method, or process within the scope of any claim of any Licensed
Patent.
1.6 "Patent Applications" means patent applications enumerated in Appendix A,
which is attached hereto and made a part hereof, and any and all
continuations, continuations-in-part, and divisions, providing that the
University is the owner thereof.
2. GRANT
The University hereby grants to SCI a nonexclusive license, without right
to sublicense, to practice Licensed Patent(s) in the Field of Use for the term
of this License Agreement.
3. LICENSE FEES & ROYALTIES
In consideration for the license granted in this License Agreement, SCI
shall pay to the University in the manner designated below, the following
amounts:
3.1 SCI shall pay to the University license fees as follows:
3.1.1 Within thirty (30) days of the Effective Date, SCI shall pay to the
University a non-refundable license fee of Eight Thousand Dollars
($8,000), and
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3.1.2 Within thirty (30) days after each of January 1, 1996, January 1,
1997, and January 1, 1998, SCI shall pay to the University a
non-refundable license fee of Five Hundred Dollars $500.00) for each
Patent Application which is pending as of the previous January 1.
3.2 Within thirty (30) days of January 1, 1996, and each year thereafter for
the term of the License Agreement, SCI shall pay to the University, an
earned royalty of five percent (5%) of Gross Sales of Licensed Products.
3.3 SCI shall pay to the University interest on any amount not paid when due.
Such interest will accrue from the fifteenth (15th) day after the payment
was due at a rate of 14% per annum, and the interest payment will be due
and payable on the first day of each month after interest begins to accrue
until full payment of all amounts due the University is made.
4. PATENT PROSECUTION AND MAINTENANCE
During the term of this License Agreement, the University will be
responsible for all costs associated with preparation, filing, prosecution,
issuance, and maintenance of Licensed Patents. It is understood that the
University shall control prosecution of Licensed Patents.
5. TERM AND TERMINATION OF THE AGREEMENT
5.1 This License Agreement shall be in full force and effect from the Effective
Date and shall remain in effect for the lives of the Licensed Patent(s)
unless terminated by one of the Parties in accordance with the terms of
this License Agreement.
5.2 If SCI breaches any material term of this License Agreement, the University
may give written notice to SCI of such breach. If SCI fails to take
reasonable steps to cure such breach within ninety (90) days from the date
of delivery of such notice, the University shall have the right to
terminate this License Agreement upon delivery of written termination
notice to SCI.
5.3 SCI may at any time, with or without cause, terminate this License
Agreement upon delivery of a written termination notice to the University.
5.4 Upon termination of this License Agreement pursuant to Paragraph 5.2 or
5.3, all rights granted SCI shall cease, and SCI shall not manufacture,
have manufactured, use, sell, lease, or otherwise transfer any Licensed
Product(s), excepting inventory existing at the time of termination which
shall be subject to the terms of this License Agreement.
5.5 If at any time after the first anniversary of the Effective Date the
University determines that it will no longer pay maintenance fees on
Licensed Patent(s) or continue prosecution of any Patent Application, the
University will give SCI at least ninety (90) days prior written notice of
its intention to discontinue such payment or prosecution. For any Patent
Application or Licensed Patent for which the University discontinues such
payments or
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prosecution, SCI shall be relieved of its obligations to make payments
under Paragraphs 3.1 and 3.2 as of the date of receipt of the University's
notice under this Paragraph. If SCI elects by written notice to pay
maintenance fees or costs of prosecution at SCI's sole expense, the
University agrees to continue such payment or prosecution and SCI shall
reimburse said fees or costs to the University no less than thirty (30)
days after billing.
5.6 Any termination pursuant to Paragraph 5.2 or 5.3 or 5.4 or 5.5 shall not
relieve SCI of any obligation or liability accrued hereunder prior to the
effective date of such termination.
6. USE OF NAMES, TRADENAMES, AND TRADEMARKS
Nothing contained in this License Agreement shall be construed as
conferring any right to use in advertising, publicity, or other promotional
activities any name, tradename, trademark, or other designation of any Party
hereto or of the. U.S. Department of Energy or the U.S. Government, or any of
their employees or officers, and any contraction, abbreviation, or simulation of
any of the foregoing.
7. REPRESENTATIONS, WARRANTIES AND DISCLAIMERS
7.1 The University hereby represents that it is not aware of any third party
rights which may in any way interfere with SCI's exercise of the right and
licenses granted herein.
7.2 Except as expressly set forth herein. nothing in this License Agreement
shall be construed as:
7.2.1 a warranty or representation by the University as to the validity or
scope of any Licensed Patents; or
7.2.2 an obligation of the University to bring or prosecute actions or
suits against third parties for infringement of the Licensed Patents;
or
7.2.3 conferring by implication, estoppel, or otherwise any license or
right under any intellectual property of the University other than as
expressly set forth herein; or
7.2.4 an obligation of the University to furnish any know-how? technical
assistance or technical data that is unrelated or unnecessary to the
practice of the Licensed Patents, or
7.2.5 an obligation of the University to file, prosecute, maintain or
enforce Licensed Patents.
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7.3 SCI AGREES THAT THE EXPORT OF GOODS AND/OR TECHNICAL DATA FROM THE UNITED
STATES MAY REQUIRE SOME FORM OF EXPORT CONTROL LICENSE FROM THE U.S.
GOVERNMENT AND THAT FAILURE TO OBTAIN SUCH EXPORT CONTROL LICENSE MAY
RESULT IN CRIMINAL LIABILITY UNDER U.S. LAWS.
7.4 NEITHER THE UNIVERSITY, THE UNITED STATES DEPARTMENT OF ENERGY NOR ANY OF
THEIR EMPLOYEES MAKE ANY WARRANTY, EXPRESS OR IMPLIED, OR ASSUMES ANY LEGAL
LIABILITY OR RESPONSIBILITY FOR THE ACCURACY, COMPLETENESS, OR USEFULNESS
OF ANY INFORMATION, APPARATUS, PRODUCT, OR PROCESS DISCLOSED AND COVERED BY
A LICENSE GRANTED UNDER THIS LICENSE AGREEMENT.
7.5 IN NO EVENT WILL THE UNIVERSITY OR THE DOE BE LIABLE FOR ANY INCIDENTAL,
SPECIAL, OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE
AGREEMENT OR THE PRACTICE OF THE LICENSED PATENTS.
8. PRODUCT LIABILITY
8.1 Except for any liability resulting from any negligent act or omission of
the U.S. Government or the University, SCI indemnifies the U.S. Government
and the University, and their officers, employees, and agents, for all
damages, costs, and expenses, including attorneys' fees, arising from
personal injury or property damage to third parties occurring as a result
of the commercialization and utilization of the Licensed Patents by SCI,
including but not limited to, the making, using, selling, or exporting of
products, processes, or services derived therefrom. This indemnification
shall include, but not be limited to, indemnification for any product
liability resulting from the commercialization and utilization of the
Licensed Patents by SCI.
8.2 The indemnity set forth in this Paragraph 8 shall apply only if SCI shall
have been informed as soon and as completely as practical by the University
and/or the U.S. Government of the action alleging such claim and shall have
been given an opportunity, to the maximum extent afforded by applicable
laws, rules, or regulations, to participate in and control its defense, and
the University and/or the U.S. Government shall have provided reasonably
available information and reasonable assistance requested by SCI. No
settlement for which SCI shall be responsible shall be made without SCI's
consent unless required by final decree of a court of competent
jurisdiction.
9. INFRINGEMENT
In the event that any Party to this License Agreement shall learn of the
substantial infringement of any intellectual property rights licensed hereunder,
that Party shall inform the other Party in writing and shall provide the other
Party with available evidence of such infringement.
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10. WAIVER
No waiver by any Party hereto of any breach or default of any of the
covenants or agreements herein set forth shall be deemed a waiver as to any
subsequent and/or similar breach or default.
11. ASSIGNABILITY
11.1 This License Agreement is assignable by SCI only with the written
consent of the University, which consent shall not be unreasonably withheld.
11.2 This License Agreement is assignable by the University only with the
written consent of SCI, which consent shall not be unreasonably withheld;
provided, however, in the event the University ceases to be the management and
operating contractor for the Argonne National Laboratory, the University may
assign this License Agreement to DOE or to the succeeding management and
operating contractor, as directed by DOE.
12. FORCE MAJEURE
Neither Party shall be responsible for delay or failure in performance of
any of the obligations imposed by this License Agreement, provided such failure
shall be occasioned by fire, flood, explosion, lightning, windstorm, earthquake,
subsidence of soil, court order or government interference, civil commotion,
strike, riot, war, or by any cause of like or unlike nature-beyond the control
and without fault or negligence of such Party.
13. NOTICES, PAYMENTS AND REPORTS
13.1 All notices, reports, payments, and requests between the University
and SCI related to this License Agreement shall be in writing and shall be
deemed duly given and effective (a) when actually received by mail or personal
delivery, or (b) when mailed by prepaid registered or certified mail to the
receiving party at the address set forth below, or to such other address as may
be later designated by written notice from either party to other party:
The University's Notification Address:
Argonne National Laboratory
c/o Donald Mingesz, Acting Director
Industrial Technology Development Center
9700 S Cass Avenue
Argonne IL 60439
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SCI's Notification Address:
J.R. Gaines, Jr.
c/o Superconductive Components, Inc.
1145 Chesapeake Avenue
Columbus, OH 43212
13.2 Payments shall be made payable to "Argonne National Laboratory" and
directed to the University's Notification Address.
13.3 SCI shall keep, at its own expense, accurate books of account, using
accepted accounting procedures, detailing all data necessary to calculate
and easily audit any payments due the University from SCI under this
License Agreement, Royalties paid by SCI to the University within the five
(5) year period immediately preceding the start of an audit, and their
supporting books of account shall be subject to audit. Each payment made to
the University shall be accompanied by a written report summarizing, in
sufficient detail to allow the University to verify all payment amounts,
the data used to calculate the amounts paid.
13.4 Upon written request by the University, such books of account shall be made
available for an audit at a reasonable time and place by an agent of the
University's choice. Such agent shall be entitled to make abstracts from
such books for the purpose of verifying the payment amounts due or for the
purpose of determining SCI's compliance with other provisions of this
Agreement. No more than one such audit shall be made in one calendar year.
The fees and expenses of such examination shall be borne by the University
unless an error in royalties owed to the University is greater than ten
percent (10%) whereupon the fees and expenses therefor shall be borne by
SCL.
14. MISCELLANEOUS
14.1 The headings of the several sections of this License Agreement are included
for convenience of reference only and are not intended to be a part of or
to affect the meaning or interpretation of this License Agreement.
14.2 No amendment or modification of this License Agreement shall be binding on
the Parties unless made in a writing executed by duly authorized
representatives of the Parties.
14.3 In the absence of applicable Federal law, this License Agreement shall be
interpreted and construed in accordance with the laws of the State of
Illinois.
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15. ENTIRE AGREEMENT
This License Agreement contains the entire and only agreement between the
Parties respecting the subject matter hereof, and supersedes and cancels all
previous negotiations, agreements, commitments and writings in respect thereto.
IN WITNESS WHEREOF, a duly authorized officer or representative of each of
the Parties has signed duplicate originals of this License Agreement.
UNIVERSITY OF CHICAGO
AS OPERATOR OF SUPERCONDUCTIVE COMPONENTS,
ARGONNE NATIONAL LABORATORY INC.
By: /s/ D.E. Bugielski By: /s/ Edward R. Funk
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D.E. Bugielski Edward R. Funk
Manager, Procurement President
Argonne National Laboratory
Date: 9/30/95 Date: 10/12/95
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APPENDIX A
PATENT APPLICATIONS
U.S. Patent Application Ser. No. 8/371,933, "Method for Producing 123
Superconductors for Fine 211 Pinning Sites," filed January 12, 1995, invented by
Donglu Shi, Chakrapani Varanasi, Suvankar Sengupta, and Paul J. McGinn
(designated ANL-93-008).
U.S. Patent Application Ser. No. 8/372,042, "Method for Harvesting Single
Crystals from a Peritectic Melt," filed January 12, 1995, invented by Volker R.
Todt, Suvankar Sengupta, and Donglu Shi (designated ANL-IN-93-130b).
U.S. Patent Application Ser. No. 8/371,931, "Large Single Domain 123 Material
Produced by Seeding with Single Crystal Rare Earth Barium Copper Oxide Single
Crystals," filed January 12, 1995, invented by Volker R. Todt, and Dean J.
Miller (designated ANL-IN-94-102 and ANL-IN-93-134).
Invention Report No. ANL-IN-94-123, "Seed Crystals with Improved Properties for
Melt Processing Superconductors for Practical Applications," invented by Boyd W.
Veal, Arvydas Paulikas, Uthamalingam Balachandran, and Wei Zhong.
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