Cooperative Research And Development Agreement

EXHIBIT 10.32


STEVENSON-WYDLER (15 USC 3710)
COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT
MASTER TERMS AND CONDITIONS
(hereinafter "CRADA Terms") NO. BG9938900


BETWEEN Ernest Orlando Lawrence Berkeley National Laboratory
(hereinafter "Laboratory")


AND


Isonics Corporation
United States Industry Coalition Member Company(s)
(hereinafter "Participant")


both being hereinafter jointly referred to as the "Parties."


The U.S. Department of Energy (DOE) is the agency responsible for the federally-owned facility known as Laboratory managed and operated under a prime contract with DOE, designated Contract No. DE-AC03-76SF00098. This instrument constitutes the Master Terms and Conditions for use in a series of Cooperative Research and Development Agreements (CRADA) initiated by individual Project Letter Agreements (PLA) under the Initiatives for Proliferation Prevention (IPP) Program of the DOE, the United States Industry Coalition, Inc. (USIC), and cooperating New Independent States (NIS) of the Former Soviet Union (FSU). When these "CRADA Terms" are combined with an approved PLA, the instrument constitutes a CRADA under the authority of the Stevenson-Wydler Technology Innovation Act of 1980, as amended (15 U.S.C. 3710 et seq).


ARTICLE I. DEFINITIONS


A. "Government" means the United States of America and agencies thereof.


B. "DOE" means the Department of Energy, an agency of the Government.


C. "Contracting Officer" means the DOE employee administering the Laboratory's DOE Contract.


D. "Generated Information" means information produced in the performance of this CRADA.


E. "Proprietary Information" means information which is developed at private expense outside of this CRADA, is marked as Proprietary Information, and embodies (I) trade secrets or (ii) commercial or financial information which is privileged or confidential under the Freedom of Information Act (5 USC 552 (b)(4)).


F. "Protected CRADA Information" means Generated Information which is marked as being Protected CRADA Information by a Party to this CRADA and which would have been Proprietary Information had it been obtained from a non-federal entity.


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G. "Subject Invention" means any invention of the Laboratory or Participant conceived or first actually reduced to practice in the performance of work under this CRADA.


H. "Intellectual Property" means patents, Trademarks, copyrights, Mask Works, and other forms of comparable property rights protected by Federal law and other foreign counterparts.


I. "Trademark" means a distinctive mark, symbol, or emblem used in commerce by a producer or manufacturer to identify and distinguish their goods or services from those of others.


J. "Mask Work" means a series of related images, however fixed or encoded, having or representing the predetermined, three-dimensional pattern of metallic, insulating, or semiconductor material present or removed from the layers of a semiconductor chip product; and in which series the relation of the images to one another is that each image has the pattern of the surface of one form of the semiconductor chip product. (17 USC 901(a)(2))


K. "Participating NIS Institute" means the scientific institute of the New Independent State of the Former Soviet Union that is performing work in support of this CRADA under subcontract with the Laboratory.


L. "Participating NIS Institute Invention" means any invention of the Participating NIS Institute conceived or first actually reduced to practice in the performance of work under its subcontract with the Laboratory in support of this CRADA.


ARTICLE II. STATEMENT OF WORK


Appendix A, Statement of Work, is hereby incorporated into this CRADA by reference.


ARTICLE III. TERM, FUNDING AND COSTS


A. The effective date of this CRADA shall be the latter date of (1) the date on which the Project Letter Agreement (PLA) incorporating the Terms and Conditions of this instrument is signed by the last of the Parties hereto or (2) the date on which it is approved by DOE. The work to be performed under this CRADA shall be completed within the time specified in the PLA Statement of Work (SOW).


B. The cost contribution of the Participant unless otherwise approved by the DOE will be at least fifty percent (50%) of the total cost of the project.


The estimated contribution by the Participant and the Government for each cooperative research project shall be as set forth in the specific PLA entered into under this CRADA, subject to available funding.


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C. Neither Party shall have an obligation to continue or complete performance of its work at a cost in excess of its estimated cost as contained in paragraph B of this Article, including any subsequent amendment.


D. Each Party agrees to provide at least thirty (30) days notice to the other Party if the actual cost to complete performance will exceed the estimated cost.


ARTICLE III.1 SPECIAL PAYMENT TERMS AND CONDITIONS


An advance payment is required on the funds-in contribution made by the Participant under any PLA entered into hereunder. The terms and conditions of the advance payment will be set forth in the PLA.


ARTICLE IV. PERSONAL PROPERTY


All tangible personal property produced or acquired under this CRADA shall become the property of the Participant or the Government depending upon whose funds were used to obtain it. Such property will be identified in the Statement of Work, attached to the individual PLA. Personal property shall be disposed of as directed by the owner at the owner's expense. All jointly funded property shall be owned by the Government.


ARTICLE V. DISCLAIMER


THE GOVERNMENT, THE PARTICIPANT, THE PARTICIPATING NIS INSTITUTE, AND THE LABORATORY MAKE NO EXPRESS OR IMPLIED WARRANTY AS TO THE CONDITIONS OF THE RESEARCH OR ANY INTELLECTUAL PROPERTY, GENERATED INFORMATION, OR PRODUCT MADE OR DEVELOPED UNDER THIS CRADA, OR THE OWNERSHIP, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE RESEARCH OR RESULTING PRODUCT. NEITHER THE GOVERNMENT, THE PARTICIPANT, THE PARTICIPATING NIS INSTITUTE, NOR THE LABORATORY SHALL BE LIABLE FOR SPECIAL, CONSEQUENTIAL, OR INCIDENTAL DAMAGES ATTRIBUTED TO SUCH RESEARCH OR RESULTING PRODUCT, INTELLECTUAL PROPERTY, GENERATED INFORMATION, OR PRODUCT MADE OR DEVELOPED UNDER THIS CRADA.


ARTICLE VI. PRODUCT LIABILITY


Except for any liability resulting from any negligent acts or omissions of the Participating NIS Institute, Participant agrees to indemnify the Government, The Regents, and the Participating NIS Institute for all damages, cost and expenses, including attorney's fees, arising from the commercialization and utilization of technologies, including, but not limited to, the making, using, selling or exporting of a product, process or service by or on behalf of the Participant, its


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assignees or licensees, which were derived from the work performed under this CRADA. In respect to this Article, neither the Government nor The Regents shall be considered assignees or licensees of the Participant as a result of reserved Regents and/or Government rights. The indemnity set forth in this paragraph shall apply only if the Participant shall have been informed as soon and as completely as practical by The Regents and/or the 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 Regents and/or Government shall have provided all reasonably available information and reasonable assistance requested by the Participant. No settlement of an action against The Regents and/or the Government for which the Participant would be responsible hereunder shall be made without the Participant's consent unless required by final decree of a court of competent jurisdiction.


ARTICLE VII. OBLIGATIONS AS TO PROPRIETARY INFORMATION


A. If Proprietary Information is orally disclosed to a Party, it shall be identified as such, orally, at the time of disclosure and confirmed in a written summary thereof, appropriately marked by the disclosing party, within ten (10) days as being Proprietary Information.


B. Each Party agrees to not disclose Proprietary Information provided by a Participating NIS Institute or another Party to anyone other than the CRADA Participant, the Participating NIS Institute, and the Laboratory without written approval of the providing Party, except to Government employees who are subject to the statutory provisions against disclosure of confidential information set forth in the Trade Secrets Act (18 USC 1905).


C. All Proprietary Information shall be returned to the provider thereof at the conclusion of this CRADA at the provider's expense.


D. All Proprietary Information shall be protected, unless and until such Proprietary Information shall become publicly known without the fault of the recipient, shall come into recipient's possession without breach of any of the obligations set forth herein by the recipient, or shall be independently developed by recipient's employees who did not have access to such Proprietary Information.


ARTICLE VIII. OBLIGATIONS AS TO PROTECTED CRADA INFORMATION


A. Each Party may designate as Protected CRADA Information, as defined in Article I, any Generated Information produced by its employees, and with the agreement of the other Party, designate any Generated Information produced by the other Party's employees. All such designated Protected CRADA Information shall be appropriately marked.


B. For a period of five (5) years from the date Protected CRADA Information is produced, the Parties agree not to further disclose such information except:


(1) as necessary to perform this CRADA, including disclosure to the
Participating NIS Institute;


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(2) as provided in Article XI;


(3) as requested by the DOE Contracting Officer to be provided to other
DOE facilities for use only at those DOE facilities with the same
protection in place;


(4) as requested by Participant for disclosure to other USIC members with
the same protection in place;


(5) to existing or potential licensees, affiliates, customers or suppliers
of the Parties in support of commercialization of the technology with
the same protection in place. Disclosure of Participant's Protected
CRADA Information under this subparagraph shall only be done with
Participant's consent; or


(6) as mutually agreed by the Parties in advance.


C. The obligations of paragraph B of this Article shall end sooner for any Protected CRADA Information which shall become publicly known without fault of either Party, shall come into a Party's possession without breach by that Party of the obligations of paragraph B of this Article, or shall be independently developed by a Party's employees who did not have access to the Protected CRADA Information.


ARTICLE IX. RIGHTS IN GENERATED INFORMATION


The Government shall have unlimited rights in all Generated Information produced or provided by the Parties under this CRADA, except for information which is disclosed in a Subject Invention disclosure being considered for patent protection, protected as a Mask Work right, or marked as being copyrighted, Protected CRADA Information, or Proprietary Information.


ARTICLE X. EXPORT CONTROL


THE PARTIES UNDERSTAND THAT MATERIALS AND INFORMATION RESULTING FROM THE PERFORMANCE OF THIS CRADA MAY BE SUBJECT TO EXPORT CONTROL LAWS AND THAT EACH PARTY IS RESPONSIBLE FOR ITS OWN COMPLIANCE WITH SUCH LAWS.


ARTICLE XI. REPORTS AND ABSTRACTS


A. The Parties agree to produce the following deliverables:


(1) an initial abstract suitable for public release at the time the CRADA
is approved by DOE;


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(2) other abstracts (final when work is complete, and others as
substantial changes in scope and funding occur);


(3) a final report, upon completion or termination of this CRADA, to
include a list of Subject Inventions;


(4) a semi-annual, signed financial report of the Participant's in-kind
contributions to the project;


(5) other topical/periodic reports where the nature of research and
magnitude of funding justify; and


(6) computer software in source and executable object code format as
defined within the Statement of Work or elsewhere within the CRADA
documentation.


B. It is understood that the Laboratory has the responsibility to provide the above information at the time of its completion to the DOE Office of Scientific and Technical Information.


C. Participant agrees to provide the above information to the Laboratory to enable full compliance with paragraph B of this Article.


D. It is understood that the Laboratory and DOE have a need to document the long-term economic benefit of the cooperative research being done under this CRADA. Therefore, the Participant acknowledges a responsibility to respond to reasonable requests, during the term of this CRADA and for two years thereafter, from the Laboratory for pertinent information.


ARTICLE XII. PRE-PUBLICATION REVIEW


A. The Parties agree to secure pre-publication approval from each other which shall not be unreasonably withheld or denied beyond thirty (30) days.


B. The Parties agree that neither will use the name of the other Party or its employees in any promotional activity, such as advertisements, with reference to any product or service resulting from this CRADA, without prior written approval of the other Party.


ARTICLE XIII. COPYRIGHTS


A. The Parties may assert copyright in any of their Generated Information. Assertion of copyright generally means to enforce the copyright or give any indication of an intent or right to enforce, such as by marking or securing Federal registration.


B. Each Party may retain ownership of copyrights in works created by its employees or contractors. Copyrights in jointly developed works shall be jointly owned.


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C. For Generated Information, the Parties acknowledge that the Government has for itself and others acting on its behalf, a royalty-free, non-transferable, nonexclusive, irrevocable worldwide copyright license to reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly, by or on behalf of the Government, all copyrightable works produced in the performance of this CRADA, subject to the restrictions this CRADA places on publication of Proprietary Information and Protected CRADA Information.


D. For all copyrighted computer software produced in the performance of this CRADA, the Party owning the copyright will provide the source code, an expanded abstract as described in Appendix B (Abstract Format Description), the executable object code and the minimum support documentation needed by a competent user to understand and use the software to DOE's Energy Science and Technology Software Center, P.O. Box 1020, Oak Ridge, TN 37831. The expanded abstract will be treated in the same manner as Generated Information in paragraph C of this Article.


E. The Laboratory and the Participant agree that, with respect to any copyrighted computer software produced in the performance of this CRADA, DOE has the right, at the end of the period set forth in paragraph B of Article VIII hereof and at the end of each two-year interval thereafter, to request the Laboratory and the Participant and any assignee or exclusive licensee of the copyrighted software to grant a nonexclusive, partially exclusive, or exclusive license to a responsible applicant upon terms that are reasonable under the circumstances, provided such grant does not cause a termination of any licensee's right to use the copyrighted computer software. If the Laboratory or the Participant or any assignee or exclusive licensee refuses such request, the Laboratory and the Participant agree that DOE has the right to grant the license if DOE determines that the Laboratory, the Participant, assignee, or licensee has not made a satisfactory demonstration that it is actively pursuing commercialization of the copyrighted computer software.


Before requiring licensing under this paragraph E, DOE shall furnish the Laboratory/Participant written notice of its intentions to require the Laboratory/Participant to grant the stated license, and the Laboratory/Participant shall be allowed thirty (30) days (or such longer period as may be authorized by the cognizant DOE Contracting Officer for good cause shown in writing by the Laboratory/Participant) after such notice to show cause why the license should not be required to be granted.


The Laboratory/Participant shall have the right to appeal the decision by DOE to the grant of the stated license to the Invention Licensing Appeal Board as set forth in paragraphs (b)-(g) of 10 CFR 781.65, "Appeals."


F. The Parties agree to place copyright and other notices, as appropriate for the protection of copyright, in human readable form onto all physical media, and in digitally encoded form in the header of machine readable information recorded on such media such that the notice will appear in human readable form when the digital data are off-loaded or the data are accessed for display or printout.


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ARTICLE XIV. REPORTING SUBJECT INVENTIONS


A. The Parties agree to promptly disclose to each other every Subject Invention which may be patentable or otherwise protectable under the Patent Act. The Laboratory agrees to promptly disclose to Participant every Participating NIS Institute Invention which is reported to the Laboratory. The P ...