License Agreement With Clark University

EXHIBIT "A"


CLARK UNIVERSITY LICENSE AGREEMENT


This Agreement is made and entered into as of September 17, 1998 ("the date hereof"), by and between Clark University, a corporation duly organized and existing under the laws of the Commonwealth of Massachusetts and having a principal office at 950 Main Street, Worcester, Massachusetts ("Clark") and REDOX Technology Corporations, a Delaware corporation having its principal office at 340 N. Sam Houston Pkwy, East, Suite 250, Houston, TX 77060 (hereinafter "REDOX").


The parties agree as follows:


ARTICLE I - DEFINITIONS.


1.1. "Patents" shall mean the United States and foreign patents and patent applications set forth in Exhibit B attached hereto and any United States and foreign patents issuing from any such patent applications, and any continuations, continuations-in-part, divisions, reissues, extensions, and renewals of any of the foregoing.


1.2. "Technology" shall mean the trade secret, know-how, data, and other information (whether or not patentable or qualifying as a trade secret) relating to the "Field of Use" and that was discovered or developed at Clark and that has been revealed to REDOX or that may hereafter be revealed to REDOX pursuant to the requirements of this Agreement. The Technology shall not include the Patents but shall include any information included in patent applications if and when it is subsequently deleted therefrom before the patent is issued.


1.3. "Confidential Technology" shall mean all Technology, and all information in or concerning patent applications included in the Patents, provided, however, that REDOX need not keep confidential any information that:


(a) at the date of its disclosure by Clark to REDOX was known to REDOX as documented in REDOX's files and is revealed to Clark within thirty (30) days after Clark's disclosure to REDOX; or


(b) at the date of disclosure by Clark to REDOX was, or thereafter becomes, through no fault of REDOX, publicly known by means of a single publication or so widely known and used that it can be said to be generally available to the public.


1.4. "Field of Use" shall mean Aluminum or Aluminum Alloy Sulfur energy storage devices employing REDOX proprietary thin-film electrode fabrication methods for use on board apparatus to be deployed into space or beneath the sea, and for the separate use


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as a back-up power source for medical life support systems, and as a portable, non-integrated, stand alone, back-up power source for electronic devices.


1.5. "License Period" shall mean collectively the respective periods commencing on the date hereof and ending (unless sooner terminated): as to the Patents, until expiration of the last to expire of the Patents (treating pending applications as issued patents for so long as they are pending).


1.6. "Licensed Products" shall mean all products that are within or made by a process within the Field of Use and that embody or are made in accordance with or using or are based upon or derived from any aspect of the Patents.


1.7 "Gross Sales" shall mean the gross sales of Licensed Products billed to customers by REDOX, its Subsidiaries, and its sublicensees, less the following:


(a) allowances and adjustments actually credited to customers for spoiled, damaged, outdated, and returned Licensed Products;


(b) trade, quantity, cash, and prompt payment discounts actually allowed and taken; and


(c) third-party charges of the following kinds collected by the seller from the buyer and separately identified on the invoice: transportation charges, sales taxes, and excise taxes and duties.


Gross Sales shall also include and be deemed to have been made with respect to any Licensed Products used by REDOX, any Subsidiary, or any sublicensee, for its own purposes, or transferred to any third-party for less than the transferee is then charging in normal arms-length sales transactions; and Gross Sales in all such cases shall be deemed to have been made at the prices therefor at which such Licensed Products are then being sold to the customers of such user or transferor (or of REDOX, if a Subsidiary is a user but not a seller) in arms-length sales transactions.


1.8. "Subsidiary" shall mean any corporation, partnership, or other business organization that directly or indirectly controls, is controlled by, or is under common control with REDOX. For the purpose of this Agreement, "control" shall mean the holding directly or indirectly of fifty percent (50%) or more of the voting stock or other ownership interest of the corporation or other business organization invoiced.


ARTICLE II - GRANT: SUBLICENSES.


2.1. Grant. Subject to the terms and conditions hereinafter set forth, Clark hereby grants to REDOX, to the extent that it lawfully may, a royalty-bearing, exclusive license to practice the Patents and use the Technology in the Territory, only for the purpose of making,


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using, and selling Licensed Products (the "License"). The License shall exist as such an exclusive, royalty-bearing license during and will terminate as such at the end of the License Period, unless sooner terminated as hereinafter provided. If the License as to the Technology does not terminate before the end of the License Period for the Technology, then the License to use the Technology shall continue in effect thereafter without limitation of time as a non-exclusive, fully-paid-up license but without fights of sublicensing, and subject to termination only as provided in Article IX.


2.2. Reserved Rights. During the License Period, Clark shall have no right to use the Patents or Technology to make, use, or sell Licensed Products for commercial purposes in the Field of Use, but Clark reserves to itself (a) the right at all times to make and use Licensed Products for research purposes within Clark, and (b) all other rights not granted to REDOX, including the rights to use and permit the use of Patents and Technology for any purpose not in conflict with the provisions of the License.


2.3. Licensee Rights. Clark shall have no right to use ReDox proprietary thin film electrode fabrication methods without the prior written permission of ReDox.


2.4. Sublicenses. REDOX shall also have the right to grant to its Subsidiaries or other sublicensees, exclusive or non-exclusive sublicenses under the License during the License Period; provided, however, and REDOX agrees that:


(a) the terms and conditions of each sublicense shall be consistent with the terms and conditions of this Agreement and shall contain, among other things (by way of example but not limitation), provisions substantially similar to and consistent with: the "Gross Sales" definition; Article III (providing, among other things, that royalties shall be paid to REDOX in amounts at least equal to those of Article III hereof, so that REDOX may in turn pay those royalties to Clark); Article V; Section 7.1 (so that no representations or warranties inconsistent with that Article shall be extended to or by any sublicensee); Article IX, but the sublicense must terminate not later than one day before the end of the License Period, or earlier if the License terminates earlier for any reason; Article XI; and Article XII.


(b) each sublicense shall provide that the obligations to Clark of Sections 3.5, 3.6, 3.7, 7.1, 8.1, 8.5, and 9.2, and Articles V, XI, and XII of this Agreement shall be binding on the sublicensee and be enforceable both by Clark and the REDOX.


(c) Clark shall have the right to approve any sublicense that grants exclusive rights of any kind to anyone other than a Subsidiary, such approval not to be unreasonably withheld or delayed;


(d) REDOX shall furnish to Clark a true and complete copy of each sublicense agreement and each amendment thereto, promptly after the sublicense or amendment has been agreed upon;


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(e) no Subsidiary or other sublicensee shall have the right to further license, sublicense, or assign its rights without the approval of Clark; and


(f) no sublicense shall relieve REDOX of any of its obligations hereunder, and REDOX shall be responsible for the acts or omissions of its Subsidiaries and sublicensees and for compliance by them with their obligations, and REDOX shall take all steps necessary to enforce that compliance to the extent required to allow REDOX to fully comply with all of its obligations under this agreement.


ARTICLE III - PAYMENTS; RECORDS.


3.1. License Fee. REDOX agrees to pay to Clark on the date hereof the non-refundable sum of $30,000, which shall not be creditable against any minimum payments or royalties due hereunder.


3.2. Minimum Payments. REDOX agrees to pay to Clark on the anniversary of this Agreement, a non-refundable payments in the amount of $35,000, each such payment to be creditable against the royalties that are due under Section 3.3, below, with respect to the period beginning on the due date of that payment and ending with the day before the due date of the next following payment.


3.3. Running Royalties. REDOX agrees to pay to Clark royalties of five percent (5%) of the Gross Sales of Licensed Products, the making, using, or selling of which infringes (were it not for the License) at least one claim in a pending application or unexpired and non-lapsed patent included in the Patents (treating pending applications as issued patents for these purposes);


3.4. Other Payments. In addition to Running Royalties REDOX agrees to pay CLARK twenty percent (20%) of any payments, including, but not limited to, sublicense issue fees, received from sublicensees in consideration for licensing of the Patent Rights. Sponsored research is excluded from such payments.


3.5. Statements; Payments. REDOX shall, within sixty (60) days after the last days of March, June, September, and December in each year or portion thereof during the License Period, and within sixty (60) days after the end of the License Period, provide Clark with a statement accounting for the Gross Sales of Licensed Products by REDOX, its Subsidiaries, and its sublicensees (and with copies of the corresponding statements to REDOX from its Subsidiaries and sublicensees), for the immediately preceding three (3) month period or portion thereof, accompanied by payment for the full amount of royalties due under this Article III for that period or portion thereof. Each such statement shall be certified by the Chief Financial Officer of REDOX as being true, correct, and complete.


3.6. Currencies. All payments to be paid to Clark shall be computed and made in United States Dollars, and REDOX shall use best efforts to convert royalty payments payable on Gross Sales in any country to United States Dollars; provided, however, that if conversion


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to and transfer of such Dollars cannot be made by REDOX, its Subsidiaries, or its sublicensees in any country for any reason, REDOX may pay such sums in the currency of the country in which such Gross Sales are made, deposited in Clark name in a bank designated by Clark in any such country. The rate of exchange of local currencies to U.S. Dollars shall be at the rate of exchange prevailing at the Bank of Boston (or such other bank in Boston, Massachusetts or New York, New York as Clark may designate from time to time), for currencies of the amounts involved, as such rate is stated for the first business day after the end of the period with respect to which the royalties are due.


3.7. Records; Audits. REDOX shall keep (and cause to be kept) and maintain complete and accurate records of Gross Sales of the Licensed Products by REDOX, its Subsidiaries, and its sublicensees, in accordance with generally accepted accounting procedures. Such records shall be accessible to independent certified public accountants selected by Clark and reasonably acceptable to REDOX, by audits conducted not more than once a year during the License Period and for one year after the termination thereof, at any reasonable times during business hours, for the purpose of verifying Gross Sales and any royalties due thereon. Such accountants shall disclose to Clark only information relating to the accuracy of the records kept and the payments made, and shall be under a duty to keep confidential any other information obtained from such records. REDOX, its Subsidiaries, and its sublicensees shall not be required to retain such records for more than three (3) years after the close of any calendar quarter-year. No period shall be subject to audit under this Section more than once as to any entity being audited.


3.8. Substantial Underpayment. If any such audit reveals that the aggregate of royalties paid during any four consecutive calendar quarters was more than five percent (5%) less than the amount that should have been paid, then the reasonable expenses of the audit shall be borne by REDOX, which shall pay those expenses within thirty (30) days after demand therefore by Clark accompanied by the accountants' statement therefor.


ARTICLE IV - PATENT PROSECUTION.


4.4. Patents Prosecution. Clark shall apply for, seek prompt issuance of, and maintain while the License is in effect, the Patents in the United States and in the foreign countries (if any) listed on Exhibit B attached hereto. REDOX may request Clark to file and prosecute patent applications corresponding to the Patents in any one or more other countries, and Clark may of its own accord elect to file and prosecute any such other patent applications. If REDOX makes any request for such an additional foreign patent applications, and if Clark decides not file such an application or prosecute same or maintain a patent so obtained, Clark shall thereafter promptly notify REDOX and REDOX shall then be entitled, at its own expense, to take over the application, prosecution, or maintenance, as the case may be, of such patent application or such patent for the benefit of Clark. In such case, Clark shall cooperate fully with REDOX and provide all such information and data and execute any documents reasonable required in order to allow REDOX to do so. REDOX shall cooperate with Clark in any prosecution, filing, and maintenance, that Clark is required to or elects to undertake hereunder.


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4.5. Patents Expenses. REDOX shall pay all reasonable costs associated with the preparation, filing, prosecution, and maintenance of all patent applications filed and patents obtained, which are incurred by or on behalf of Clark, to the extent Clark is required by Section 4.4 to do so, or for which REDOX has requested Clark to make application. Clark shall periodically send REDOX invoices for any such patent expense incurred by Clark (whether incurred before or after the date hereof), and REDOX shall pay such invoices within thirty (30) days of receipt thereof.


ARTICLE V - CONFIDENTIALITY.


5.1. Limitations on Use. Disclosure. R ...