Exhibit 10.6
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (as hereinafter defined, this "Agreement), made and entered into as of the Effective Date (as hereinafter defined), by and between LOCKHEED MARTIN CORPORATION, a Maryland corporation acting through its Electronics and Missiles operating unit in Orlando, Florida (as hereinafter defined, "LMC"), and TRITON NETWORK SYSTEMS, INC., a Delaware corporation with an office in Orlando, Florida (as hereinafter defined "Triton").
WITNESSETH:
WHEREAS, capitalized terms used in these recitals and not otherwise defined shall have the respective meanings specified in Section 1 of this Agreement; and
WHEREAS, Triton has marketing and technical expertise in commercial wireless communications and wishes to engage in the development and production of Commercial Systems, with a particular view toward its eventual offering for sale of a production Microwave External Device (MED); and
WHEREAS, Triton will need certain licensed technology, certain development efforts, and certain technical assistance if it is to achieve the goals set forth in the preceding recital; and
WHEREAS, LMC has developed and owns certain Millimeter Wave MMIC Design Technology primarily intended for military-specification-designed products;
WHEREAS, LMC would like to assist Triton in Triton's efforts to make, have made, use, sell, offer to sell, service, and improve a production MED, all on the terms set forth in
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this Agreement; and
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, LMC and Triton agree as follows:
1. DEFINITIONS. In addition to the other terms defined elsewhere in this Agreement, each of the following capitalized terms used in this Agreement shall have the respective meaning as follows:
"Agreement" shall mean this License Agreement and all subsequent amendments hereto executed and delivered by the parties in the manner contemplated hereby.
"Commercial System" shall mean non-military-specification packaged MEDs.
"Effective Date" shall mean the date when this Agreement shall become effective, which shall be the date when the Party who later signs and dates this Agreement does so at the signature pages of this Agreement.
"Field of Use" shall mean any Commercial System that is used for wireless communications.
"Improvement" shall mean any modification or update to Millimeter Wave MMIC Design Technology, which modifies or relates to a manufacturing, servicing, performance, or other characteristic of Millimeter Wave MMIC Design Technology.
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"LMC" shall mean Lockheed Martin Corporation, a Maryland corporation acting through its Electronics and Missiles operating unit in Orlando, Florida, together with its successors and assigns.
"LMC Intellectual Property" shall mean the inventions, discoveries, methods, techniques, data and other information set forth in Exhibit A that are useful or necessary in the design, development, manufacture, servicing or operation of Commercial Systems.
"LMC Intellectual Property Rights" shall include any legally enforceable right owned by LMC in LMC Intellectual Property, including but not limited to a right in a patent, a patent application, copyright, know-how, mask work, trademark or trade secret.
"LME&M" shall mean the Lockheed Martin Electronics and Missiles operating unit of LMC that is headquartered in Orlando, Florida.
"MED" shall mean a millimeter wave external device, and components thereof, consisting of a transmitter, receiver, frequency synthesizer, antenna, digital modem, CPU controller and power supply, and characterized by having an operating frequency range of 18.0 to 41.0 GHz, a transmitter CW output power between 0.5 to 5.0 watts, a receiver noise figure of less than 9 dB, a modulation of m-PSK or other suitable equivalent and a full duplex interface. By way of example, and not limitation, Exhibit B comprises a detailed specification for an MED within the scope of this Agreement.
"Millimeter Wave MMIC Design Technology" shall mean LMC developed patents, know-how and trade secrets related to the design, development and production of
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monolithic millimeter wave integrated circuit (MMIC) components, modules, and systems as further defined in Exhibit A hereto.
"Party" shall mean either LMC or Triton, and "Parties" shall mean both of them.
"Territory" shall mean the United States of America and all international markets for which export licenses have been obtained by Triton.
"Triton" shall mean Triton, Network Systems, Inc., a Delaware corporation, together with its successors and assigns.
"Triton Intellectual Property" shall mean the inventions, discoveries, methods, techniques, data and other information known to Triton and Improvements by Triton that are useful or necessary in the design, development, manufacture, servicing, or operation of wireless communications systems.
"Triton Intellectual Property Rights" shall mean a legally enforceable right owned by Triton in Triton Intellectual Property, including but not limited to a right in a patent, a patent application, copyright, know-how, mask work, trademark or trade secret.
2. GRANT OF LICENSE; ROYALTY.
2.1 LMC hereby grants Triton for the term of this Agreement an exclusive, nontransferable (except as otherwise provided in Section 2.5 hereof) license under LMC Intellectual Property Rights to make, have made, improve, have improved, use, sell, and offer to sell throughout the Territory, Commercial Systems incorporating Millimeter Wave
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MMIC Design Technology and related LMC Intellectual Property, provided, however that LMC expressly reserves whatever rights in the Millimeter Wave MMIC Design Technology and related LMC Intellectual Property as may be necessary or useful to enable LMC to continue in existing pursuits and to pursue future business in natural areas of expansion. The reservation expressed herein shall not be deemed or interpreted to limit Triton's right to make, have made, improve, have improved, use, sell and offer to sell Commercial Systems as aforesaid. Moreover, LME&M shall extend to Triton a right of first refusal to supply to LME&M MEDs then being manufactured by or for Triton, or variations on an MED which could be produced by Triton within a competitive timeframe, and supplied by Triton to others. This extension to Triton of a right of first refusal is limited to those instances where LME&M's activities pursuant to the reservation expressed herein would otherwise be inconsistent with the aforesaid exclusive grant of rights to Triton.
2.2 The scope of the license granted in Section 2-1 above is limited to the design, manufacture, use, sale, offer for sale, and importation of Commercial Systems. No other right or license under the Millimeter Wave MMIC Design Technology and related LMC Intellectual Property is herein granted.
2.3 From the Effective Date hereof, Triton agrees to pay LMC a royalty on each MED utilizing Millimeter Wave MMIC Design Technology that Triton sells or otherwise disposes of, all in accordance with the following rules:
(a) The amount payable as a royalty to LMC shall be determined in accordance with this Section 23 and the royalty schedule set forth in Exhibit C hereto.
(b) For the purposes of this Section, an MED utilizing Millimeter Wave
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MMIC Design Technology that has not been sold shall be deemed "otherwise disposed of" whenever in return for valuable consideration such system is delivered by Triton to a third party or put into use by Triton either on behalf of a third party or for any purpose other than demonstration and/or routine testing. The sales price deemed to apply to any system "otherwise disposed of" for the purposes of computing the royalty shall be the sales price at which Triton or any of its subsidiaries or affiliates at the time is offering products of similar kind and quality, less any customary discount that Triton is offering on such system.
(c) For Purposes of this Section and Exhibit C, the gross sales price for the purposes of computing LMC's royalty shall be only the fair gross sales price of the MED included in the system, it being specifically acknowledged that Triton shall on its own develop or purchase from others certain software for the MED and certain hardware and software for related items that ultimately will constitute a majority of the selling price of each system. LMC shall not be entitled to a royalty on any portions of any system sold by Triton other than in respect of the gross sales price of the portion of the MED which LMC developed.
(d) The parties should mutually agree on the value. If the parties are unable to agree on what portion of the selling price of an integrated system is fairly allocable to the hardware of the MED (and therefore constitutes the gross sales price of the MED) and what portion of such selling price is fairly allocable to the balance of the system (including both software for the MED and hardware and software for the related items), they shall submit that question to binding arbitration in Orlando, Florida through the American Arbitration Association.
(e) If Triton pays LMC all sums required for five years after the date
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Triton first sells or otherwise disposes of an MED, then the license granted in Section 2.1 above shall be deemed to be fully paid up.
2.4 Triton agrees to furnish to LMC, within thirty days of the end of each calendar quarter, a written royalty report setting forth the number of MED's sold or otherwise disposed of, or, where the Millimeter Wave MMIC Design Technology is incorporated into a higher assembly, the number of such higher assemblies sold or otherwise disposed of, the sales price of such products, the royalties due thereon, and the manner in which Triton calculated said royalties. With each quarterly royalty report, Triton shall also submit financial statements of Triton that break out in detail LMC designed Millimeter Wave MMIC Design Technology sales and royalty payment checks, with such financial statements to be certified as to accuracy and completeness by Triton's chief financial officer. LMC shall have the right to cause an audit of Triton's books and records to be performed at LMC's expense by an independent auditor reasonably acceptable to Triton. The sole objective of that audit shall be to verify reported LMC designed Millimeter Wave MMIC Design Technology sales. Triton shall cooperate with the audit by affording the auditor access to the names and addresses of Triton customers for systems involving Millimeter Wave MMIC Design Technology.
2.5 The license granted to Triton in this Section shall be assignable to new commercial ventures that are owned in whole or in part by Triton providing that Triton notifies LMC of such assignment and that the new commercial venture accepts in writing all terms of this Agreement. Nothing in this Agreement shall be construed to preclude the license from going with Triton in connection with any change in control of Triton or any sale of substantially all of the assets or business of Triton to a third party.
3. DUTIES OF LMC
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3.1 LMC specifically agrees, in accordance with its exclusive license to Triton, the following:
(a) LME&M will not while this Agreement is in force directly or indirectly compete with Triton within the scope of the exclusive license granted in Section 2.1 above.
(b) LME&M will not make its Millimeter Wave MMIC Design Technology available to any other company or LMC Division that will make, have made, use, sell, and offer to sell Commercial Systems in the Field of Use. LME&M cannot transfer Triton proprietary or contract data to other LMC divisions without prior written approval from Triton.
3.2 During the term of this Agreement, LMC will not initiate contact with any Triton employee supporting Millimeter Wave MMIC Design Technology development for the purpose of recruiting such employee to join LMC in the Millimeter Wave MMIC Design Technology development area. LMC will, however, have the right to use standard advertising methods and job postings when searching for individuals to support its Millimeter Wave MMC Design Technology development activities. It shall not be a violation of this Section for LMC to hire any Triton employee who approaches LMC, either as a consequence of such standard advertising methods and job postings or otherwise as long as LMC shall not have initiated the contact for the purpose of recruitment.
4. DUTES OF TRITON.
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4.1 Except with the consent of LMC, in no event may Triton, its affiliates or subsidiaries hire any current or former employee of LME&M who performs or performed significant dut ...
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