LICENSE AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                  EXHIBIT 10.1

 

                   LICENSE AGREEMENT DATED SEPTEMBER 13, 2005

 

 

<PAGE>

 

 

 

                                LICENSE AGREEMENT

 

         This Agreement is between The Johns Hopkins   University,   a corporation

of the State of Maryland, acting through its Applied Physics Laboratory having a

place   of   business   at   11100   Johns   Hopkins   Road,    Laurel,    MD   20723-6099

(hereinafter   "JHU/APL")   and Link Plus   Corporation,   a   Delaware   corporation,

having a place of business at 6996 Columbia   Gateway Drive,   Columbia,   MD 21046

(hereinafter "COMPANY").

 

                                    RECITALS

 

         JHU/APL,   by   virtue   of   its   role   as   a   government   contractor   and

educational   institution,   carries   out   scientific   and   applied   research   and

development through its staff and is committed to licensing JHU/APL INTELLECTUAL

PROPERTY   (hereinafter   defined)   in a manner   that will   benefit   the public by

bringing   the results of that   research   and   development   into   widespread   use

through   the   distribution   of   useful   products   and   the   utilization   of   new

processes,   but is without capacity to commercially   develop,   manufacture,   and

distribute any such product or processes itself.

 

         JHU/APL has developed certain valuable inventions,   copyrighted matter,

proprietary   technical   information,   know-how,   show-how   and/or trade   secrets

comprising   the   JHU/APL   INTELLECTUAL    PROPERTY   and   generally   describing   a

molecularly imprinted polymer sensor for explosives.

 

         The Johns   Hopkins   University   through   JHU/APL has   acquired   through

assignment   or   otherwise   all   right,   title   and   interest   in   said   valuable

inventions,   copyrighted matter,   proprietary technical   information,   know-how,

show-how and/or trade secrets.

 

         COMPANY   desires   to   commercially    develop,    manufacture,    use   and

distribute   products and processes embodying the JHU/APL   INTELLECTUAL   PROPERTY

throughout the world.

 

 

 

                                        1

<PAGE>

 

         NOW,   THEREFORE,   in   consideration   of the foregoing   premises and the

following   mutual   covenants,   and other good and   valuable   consideration,   the

receipt of which is hereby   acknowledged,   and   intending   to be   legally   bound

hereby, the parties agree as follows:

 

                             ARTICLE 1 - DEFINITIONS

 

         1.1   "AFFILIATED   COMPANY"   or   "AFFILIATED   COMPANIES"   shall mean any

corporation, company, partnership, joint venture or other entity which controls,

is controlled by or is under common   control with COMPANY.   For purposes of this

section   1.1,   control   shall mean the direct or indirect   ownership of at least

fifty percent (50%).

 

         1.2 "COMPANY   IMPROVEMENT(S)"   shall mean any   inventions,   copyrighted

matter,   technical   information,   know-how,   show-how or trade secrets made by a

COMPANY employee relating to the CORE TECHNOLOGY.

 

         1.3 "CORE TECHNOLOGY" shall mean a molecularly imprinted polymer sensor

for explosives as described in the JHU/APL INTELLECTUAL PROPERTY.

 

         1.4 "EFFECTIVE DATE" of this License   Agreement shall mean the date the

last party hereto has executed this Agreement.

 

         1.5   "EXCLUSIVE   LICENSE"   shall   mean a grant by JHU/APL to COMPANY of

exclusive   rights in the JHU/APL   INTELLECTUAL   PROPERTY,   subject to any rights

retained by the United   States   Government in accordance   with P.L.   96-517,   as

amended by P.L. 98-620, and with the provisions of any U.S. Government contracts

under which the JHU/APL INTELLECTUAL PROPERTY was developed, and further subject

to the retained right of JHU/APL to make, have made, provide, use, copy, modify,

distribute and practice   LICENSED   PRODUCT(S) and LICENSED   PROCESS(ES)   for its

non-profit   purposes   in

 

 

                                       2

<PAGE>

 

 

connection with its research, education   and public service   missions   including

the provision of research and development   services for federal, state and local

governments.

 

         1.6 "JHU/APL IMPROVEMENT(S)" shall mean improvements in CORE TECHNOLOGY

comprising any inventions,   copyrighted matter, technical information, know-how,

show-how and/ or trade secrets   comprising   JHU/APL   PATENT RIGHTS   (hereinafter

defined) and JHU/APL UNPATENTED INTELLECTUAL PROPERTY (hereinafter defined) that

result from any R&D AGREEMENTS   (hereinafter defined) whether funded by JHU/APL,

COMPANY,   or the United   States   Government   and made either solely by a JHU/APL

employee or jointly by a JHU/APL employee and a COMPANY employee in the LICENSED

FIELD.

 

         1.7   "JHU/APL   INTELLECTUAL   PROPERTY"   shall   mean,   individually   and

collectively,    JHU/APL   PATENT   RIGHTS   and   JHU/APL   UNPATENTED    INTELLECTUAL

PROPERTY.

 

         1.8       "JHU/APL PATENT RIGHTS" shall mean:

 

         a.    previously   filed patent   application(s) listed in Appendix A, any

         future   filed   patent   application(s) relating to invention disclosures

         listed in   Appendix A, and the inventions disclosed and claimed therein

         and   patents   issuing   thereon,   and   all continuations, divisions, and

         reissues based thereon,   and   any corresponding U.S. and foreign patent

         applications, and any patents, patents of addition, or other equivalent

          foreign patent rights issuing, granted or registered thereon; and

 

         b.    any additional U.S. or foreign patent applications filed on behalf

         of   JHU/APL (whether invented   solely by   JHU/APL or jointly by JHU/APL

         and COMPANY) and directed   to patentable features that may be contained

         within the JHU/APL   UNPATENTED INTELLECTUAL PROPERTY (including JHU/APL

         IMPROVEMENT(S) as   provided in and subject to the conditions of Section

         2.3 of this Agreement).

 

 

                                        3

<PAGE>

 

 

         1.9 "JHU/APL UNPATENTED INTELLECTUAL PROPERTY" shall mean and include:

JHU/APL's copyrighted matter, proprietary technical information, know-how,

show-how and/or trade secrets as listed in Appendix B hereto associated with the

CORE TECHNOLOGY. The above includes, but is not limited to, what is:

 

         a.   existing as of the EFFECTIVE DATE and delivered to COMPANY prior to

         the EFFECTIVE DATE, or under this Agreement; and

 

         b.     disclosed    in   the    invention   disclosure(s)    and   in    patent

         application(s) listed in Appendix A and included   in the JHU/APL PATENT

         RIGHTS; and

 

         c.    representing and included in JHU/APL IMPROVEMENT(S) as provided in

          and subject to the conditions of section 2.3 of this Agreement.

 

         1.10       "LICENSED FIELD" shall mean all fields of use.

 

         1.11      "LICENSED PRODUCT(S)" shall mean any device or other product:

 

         a.   the manufacture, use or sale of which would constitute, but for the

         license   granted to COMPANY pursuant to this Agreement, an infringement

         of a claim of JHU/APL PATENT RIGHTS (infringement shall include, but is

         not limited to, direct, contributory, or inducement to infringe); or

 

         b.    embodying,    was   made   using, is   derived primarily from or based

         substantially on JHU/APL UNPATENTED INTELLECTUAL PROPERTY.

 

         1.12   "LICENSED PROCESS(ES)" shall mean any process or method performed

on behalf of a third party or used in the manufacture or use of a product:

 

 

                                       4

<PAGE>

 

 

         a.   the practice of which would constitute, but for the license granted

         to   COMPANY pursuant   to this   Agreement, an infringement of a claim of

         JHU/APL PATENT RIGHTS (infringement   shall   include, but is not limited

         to, direct, contributory, or inducement to infringe); or

 

         b.    the   practice   of   which uses, is   derived primarily from or based

         substantially on the JHU/APL UNPATENTED INTELLECTUAL PROPERTY.

 

         1.13 "NET   SALES",   subject   to   section   6.8   below,   shall mean gross

revenues of any nature including,   but not limited to, sales and licensing fees,

maintenance   and service   fees,   access   payments   and other   amounts   billed by

COMPANY, AFFILIATED COMPANIES and COMPANY's sublicensees from the sale, lease or

other disposal of LICENSED PRODUCT(S) or the practice or performance of LICENSED

PROCESS(ES) less

 

         a.   credits (including credit card charge-backs) or allowances, refunds

         or discounts, if any, actually granted on account of price adjustments,

         recalls,   rejection   or   return   of   items   previously   sold, leased or

         otherwise disposed of;

 

         b.   excises, sales taxes, value added taxes, consumption taxes, duties,

         or other   taxes   imposed   upon   and   paid   with   respect to   such sales

         (excluding income or franchise taxes of any kind); and

 

         c.    separately itemized insurance and transportation costs incurred in

         shipping the LICENSED PRODUCT(S).

 

         1.14 "R&D   AGREEMENTS"   shall mean any future   agreements   relating   to

sponsored research, facility use and/or technical assistance negotiated or to be

negotiated   between   JHU/APL and COMPANY   pertaining to research and development

directed to the CORE   TECHNOLOGY,   whether   funded by JHU/APL,   COMPANY,   or the

United States Government.

 

 

                                       5

<PAGE>

 

 

          1.15   "SUBLICENSE   REVENUES" shall mean   consideration   of any kind for

sublicensee sales of LICENSED PRODUCT(S) or LICENSED PROCESS(ES),   including but

not limited to cash, equity, and other consideration,   whether in the form of up

front fees or milestone   fees, and including any premium paid by the sublicensee

over   Fair   Market   Value for   stock of   COMPANY,   received   by   COMPANY   from a

sublicensee in consideration for a sublicense to JHU/APL   INTELLECTUAL   PROPERTY

granted by COMPANY;   however,   not included in   SUBLICENSE   REVENUES are amounts

paid to COMPANY by the   sublicensee   for product   development   and research work

performed   by COMPANY,   or third   parties on its behalf.   The term "Fair   Market

Value" as used in this paragraph shall mean the average price at which the stock

in question is publicly trading for sixty (60) days prior to the announcement of

its   purchase by the   sublicensee   or if the stock is not publicly   traded,   the

value of such   stock as   determined   by the most   recent   private   financing   of

COMPANY or if no private financing has occurred,   then as reasonably   determined

by COMPANY's accountants.

 

         1.16 "TERRITORY" shall mean the world.

 

         1.17   COMPANY TECHNOLOGY shall mean LinkPlus's transceiver hardware and

              software.

 

         1.18   "CATEGORY A and CATEGORY B EQUITY" shall mean equity specifically

               defined   for   distribution   within   JHU/APL between inventors and

               JHU/APL and is not related to COMPANY's share designation.

 

 

                               ARTICLE 2 - GRANTS

 

 

         2.1   Subject to the terms and   conditions   of this   Agreement,   JHU/APL

hereby grants to COMPANY an EXCLUSIVE LICENSE to make, use, market,   sell, offer

to sell, import, and practice the LICENSED   PRODUCT(S) and LICENSED   PROCESS(ES)

in the TERRITORY under the JHU/APL INTELLECTUAL PROPERTY in the LICENSED FIELD.

 

 

 

                                       6

<PAGE>

 

         2.2   COMPANY   may   sublicense   others   under this   Agreement   and amend

existing   sublicenses provided that the terms of any such sublicense shall be no

less   favorable to COMPANY   than this   Agreement is to JHU/APL and no broader in

scope and no less   restrictive   on the   sublicensee   than this   Agreement   is on

COMPANY   and are   otherwise   consistent   with the   terms of this   Agreement   and

include   provisions for the payment of JHU/APL's   royalties,   indemnification of

JHU/APL   and the flow   down of the   limited   warranties   contained   herein,   and

further provided that COMPANY provides a copy of each such sublicense   agreement

and   amendment to an existing   sublicense   agreement to JHU/APL   within five (5)

business days after its execution.   Any sublicense agreement and amendment to an

existing sublicense agreement not consistent with the terms of this Agreement or

not containing   royalty,   indemnification   and warranty   provisions as set forth

above or granting the right to the sublicensee to further   sublicense the rights

granted   herein,   must be submitted to JHU/APL prior to its execution for review

and   approval,   and COMPANY   shall   provide at least ten (10)   business days for

JHU/APL's review.

 

         2.3 Subject to the terms of funding agreements with third parties,   all

JHU/APL IMPROVEMENT(S) shall be licensed to COMPANY under this Agreement.

 

         2.4   COMPANY   hereby   grants   to   JHU/APL   a   nonexclusive,    paid   up,

nontransferable,   worldwide   license   to make,   have   made,   use,   and   practice

products and processes under all COMPANY owned intellectual   property in COMPANY

IMPROVEMENT(S),    such   license   only   for   JHU/APL's    non-profit   purposes   in

connection with its research,   education and public service   missions   including

the provision of research and development services for federal,   state and local

governments.   Notwithstanding the foregoing,   upon termination of this Agreement

or termination of exclusivity under this Agreement, JHU/APL shall be entitled to

license COMPANY IMPROVEMENT(S) to third parties on the same terms as it licenses

the JHU/APL INTELLECTUAL PROPERTY.

 

 

                            ARTICLE 3 - DELIVERABLES

 

                                       7

<PAGE>

 

 

 

         3.1 JHU/APL   shall use   reasonable   efforts to deliver to COMPANY those

deliverables   in   existence as of the   EFFECTIVE   DATE   directly   related to the

JHU/APL INTELLECTUAL PROPERTY and listed in Appendix B.

 

 

             ARTICLE 4 - RELATED CONTRACTS AND CONFLICT OF INTEREST

 

         4.1   JHU/APL   and   COMPANY   agree   that,   from   time to time,   they may

negotiate   R&D   AGREEMENTS   between   them but   neither   party shall be under any

obligation to do so.

 

         4.2   COMPANY   understands   and   agrees   that   JHU/APL   has a   technical

direction agent   relationship   with the United States   Government which requires

that   JHU/APL   avoid   any work   under   any   contract   or   agreement   that   would

jeopardize its or its employees' ability to act for the United States Government

as an   impartial or neutral   evaluator.   Therefore,   JHU/APL   shall at all times

under this   Agreement   retain the right to refuse to accept any   subcontract   or

other   agreement   to   perform   any   work   under   any such   subcontract   or other

agreement   between JHU/APL and COMPANY which in JHU/APL's sole discretion   would

create an actual or perceived organizational or individual conflict of interest.

 

 

                         ARTICLE 5 - PATENT INFRINGEMENT

 

 

         5.1 Each   party   will   notify the other   promptly   in writing   when any

infringement by another is uncovered or suspected.

 

         5.2   COMPANY   shall   have the   first   right to   enforce   any   patent or

copyright   within JHU/APL   INTELLECTUAL   PROPERTY   against any   infringement   or

alleged infringement thereof, and shall at all times keep JHU/APL informed as to

the status   thereof.   COMPANY may, in its sole   judgment and at its own expense,

institute   suit   against any such   infringer or alleged   infringer   and control,

settle,   and   defend   such   suit in a   manner   consistent   with   the

 

 

                                        8

<PAGE>

 

 

terms and provisions hereof and recover, for its account, any damages, awards or

settlements   resulting therefrom,   subject to section 5.4. This right to sue for

infringement   shall not be used in an arbitrary or   capricious   manner.   JHU/APL

shall reasonably cooperate in any such litigation at COMPANY's expense.

 

         5.3 If   COMPANY   elects not to enforce   any patent   within the   JHU/APL

INTELLECTUAL PROPERTY, then it shall so notify JHU/APL in writing within six (6)

months of receiving notice that an infringement   exists, and JHU/APL may, in its

sole   judgment   and at its own   expense,   take   steps to   enforce   any patent or

copyright and control,   settle, and defend such suit in a manner consistent with

the terms and provisions hereof, and recover,   for its own account, any damages,

awards or settlements resulting therefrom.

 

         5.4 Any   recovery   by   COMPANY   under   section   5.2   shall be deemed to

reflect loss of commercial   sales,   and COMPANY shall pay to JHU/APL out of such

recovery   the   royalties   it   would   have   otherwise   received   in   light of the

infringing sales net of all reasonable   costs and expenses   associated with each

suit or settlement. If the cost and expenses exceed the recovery, then [*] shall

be   credited   against   royalties   payable by COMPANY   to   JHU/APL   hereunder   in

connection   with   sales in the   country   of such   legal   proceedings,   provided,

however,   that any such   credit   under   this   section   5.4 shall not   exceed [*]

otherwise   payable to JHU/APL with regard to sales in the country of such action

in any one calendar year, with any excess credit being carried forward to future

calendar years.

 

       ARTICLE 6 - PAYMENTS, ROYALTY AND RESEARCH AND DEVELOPMENT SUPPORT

 

         6.1       Reimbursement of costs and expenses:

 

         COMPANY   will   reimburse    JHU/APL   for   future    reasonable   costs   of

preparing,   filing,   prosecuting   and   maintaining   any foreign   JHU/APL   PATENT

RIGHTS, elected by

 

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED

 

                                       9

<PAGE>

 

 

COMPANY as set forth in paragraph 7.1 of this Agreement. COMPANY shall reimburse

JHU/APL within thirty (30) days of receipt of an invoice from JHU/APL.

 

         6.2     Fees and equity:

 

                 6.2.1.    LICENSE EXECUTION FEE:   COMPANY   shall pay to JHU/APL a

                License Execution Fee of [*] to JHU/APL, due   within thirty (30)

                days from the EFFECTIVE DATE;

 

                6.2.2.   EQUITY:   COMPANY   shall   issue to JHU/APL   [*] shares of

                Common Stock within   thirty (30) days from the   EFFECTIVE   DATE.

                [*]

 

                6.2.3.   COMPANY   shall issue to JHU/APL [*] warrants to purchase

                shares   of   Common   Stock   within   thirty   (30)   days   from   the

                EFFECTIVE DATE. [*]

 

                6.2.4.   MILESTONE PAYMENt:   COMPANY shall pay to JHU/APL a Proof

                of   Concept   Milestone   payment   of [*]   either   30   days   after

                demonstration of proof of concept for the integration of the APL

                TECHNOLOGY   with   COMPANY's   TECHNOLOGY,   or six (6) months from

                EXECUTION DATE; whichever comes later.

 

         6.3   COMPANY   shall pay to   JHU/APL a [*]   annual   maintenance   fee due

within   thirty   (30)   days of each   anniversary   of the   EFFECTIVE   DATE of this

Agreement.   Such   fees are   nonrefundable   and   shall   not be   credited   against

royalties or other fees.

 

         6.4 For the term of this   Agreement,   COMPANY   shall   pay to   JHU/APL a

running royalty for each LICENSED   PRODUCT(S) sold, leased or otherwise disposed

of or for the practice or   performance   of LICENSED   PROCESS(ES)   by COMPANY and

AFFILIATED COMPANIES as follows:

 

                     [*] CONFIDENTIAL TREATMENT IS REQUESTED

 

 

                                       10

<PAGE>

 

 

         a.    [*] of NET SALES if the particular LICENSED PRODUCT(S) or LICENSED

         PROCESS(ES) includes   a   feature   covered   by   one or more then pending

          claim(s) of   a   pending   patent application   included in JHU/APL PATENT

         RIGHTS, or   directly   or contributory infringes any valid and unexpired

         claim(s) of a patent included in JHU/APL PATENT RIGHTS, that is pending

         or   issued   in the country where that particular LICENSED PRODUCT(S) or

         LICENSED PROCESS(ES) are   either produced, sold, otherwise disposed of,

         practiced or performed.   The   royalty   rate   for   each such product and

         process shall not exceed the rates above even if the particular product

         or process contains   features covered by more than one patent or patent

         application included in JHU/APL PATENT RIGHTS.

 

         b.    [*] of   NET SALES if,   within   one (1) year of the EFFECTIVE DATE,

         paragraph 6.4a does not apply to the particular LICENSED PRODUCT(S) and

         LICENSED PROCESS(ES) and, thereafter, until such time as paragraph 6.4a

         does apply.

 

         c.    All   such   running   royalty   payments   shall   be made quarterly as

         provided in section 6.6.

 

         d.   Sales of LICENSED PRODUCT(S) and LICENSED PROCESS(ES) to the United

         States   Government   by COMPANY, and   AFFILIATED   COMPANY, or   COMPANY's

         sublicensees   shall be   subject to   the royalty   stated in this section

         6.4; however, COMPANY   agrees that it shall not bi