This License Agreement (“Agreement”) is made this (date) day of (month) (year) (the “Effective Date”)

between

(name of licensee) (hereinafter referred to as “Licensee”) whose registered office is located at (address of licensee), of the first part;

and

Hong Kong University of Science and Technology R and D Corporation Limited (hereinafter referred to as “RDC”) whose registered office is situated at The Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong, of the second part.

RECITALS

1. WHEREAS, The Hong Kong University of Science and Technology (hereinafter referred to as “HKUST”) has developed technology on “(description of licensed technology)” (HKUST Reference No. TTC.PA.xxx) (hereinafter referred to as “Technology” and is further described in Schedule 1 of this Agreement). HKUST is the sole and exclusive owner of the Technology and its associated Intellectual Property Rights (as defined in Clause 1.1).
   
    
2. WHEREAS, RDC is a company incorporated in Hong Kong whose entire issued share capital is legally and beneficially owned by HKUST for the purpose, inter alia, of entering into commercial contracts and in which corporation HKUST has granted a license to further sub-license the Technology to any party.
   
    
3. WHEREAS, RDC desires to have the Technology developed and commercialized to benefit the public and is willing to grant a license hereunder.

D.        WHEREAS, Licensee has represented to RDC that Licensee shall commit itself to a thorough, vigorous and diligent program of further developing and exploiting the Technology.

E.         WHEREAS, Licensee desires to obtain a license under the Technology upon the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual promises and undertakings set forth herein, Licensee and RDC hereby agree as follows:

1. Definitions and Interpretation

1. 1. In this Agreement, unless the context otherwise requires or expressly provides, the following words shall have the following meanings respectively:

“Confidential Information” shall mean all information and/or materials in relation to the Technology and disclosed by RDC and/or HKUST to Licensee.

“Customers” shall mean any person, firm or company who (or which) purchases or licenses any of the Products from Licensee for his (or its) own use and not for the purpose of resale.

“Dealers” shall mean any person, firm or company appointed by Licensee in accordance with the terms of this Agreement to resell Products to Customers within the Territory.

“Field” shall mean (description on specific applications or areas).

“Gross Sales” shall mean all sums received by Licensee from the sale of Products, including but not limited to the fair market value of consideration received from barter, exchange or similar arrangements.

“Intellectual Property Rights” shall mean (i) all Patent Rights; (ii) all rights to trade secret and know-how arising under the laws of any jurisdiction; and (iii) all copyrights rights and all other literary property and author rights, whether or not copyrightable, and all copyrights and copyrighted interests, including any renewal thereof but shall not include any rights in any trademarks, trade names, service marks, logos and the goodwill associated therewith.

“Parties” shall mean RDC and Licensee, and “Party” shall mean either of the Parties.

“Patent Rights” shall mean all the patent applications and patents (if filed and/or granted in such jurisdictions), industrial models, industrial designs, utility models, certificates of invention, and other indications of invention ownership, including any such rights granted upon any reissue, division, continuation or continuation-in-part applications now filed.

“Products” shall mean any products and/or services as may be developed and/or provided by Licensee utilizing and/or based on and/or derived from modifying or developing the Technology.

“Territory” shall mean worldwide.

1.     2. All references to a statutory provision shall be construed as to include references to any statutory modification, consolidation or re-enactment (whether before or after the date of this Agreement) for the time being in force and all statutory instruments or orders made pursuant to a statutory provision.

1.     3. Except where the context otherwise requires, words denoting the singular include the plural and vice versa; words denoting any one gender include all genders; words denoting persons include firms and corporations and vice versa.

1.     4. Unless otherwise stated, a reference to a Recital, Clause or Sub-clause or a Schedule is a reference to a recital, clause, sub-clause or schedule respectively in this Agreement.  All Schedules annexed to this Agreement shall form part and parcel of this Agreement as if the provisions in the Schedules are provisions of this Agreement.

2. Grant of Rights

2.1       License Grants

2.1.1    Subject to the terms and conditions of this Agreement including but not limited to Clauses 4.2, 4.3, 5.1 and 6, RDC hereby grants to Licensee a royalty-bearing, non-exclusive, non-sublicensable and non-transferrable license to use the Technology to develop, make, use, offer to sell, lease, and import Products in the Field within the Territory, for a period of five (5) years from the Effective Date, or from the Effective Date until the expiration of HKUST’s right, title and interest in the last expiring Patent Rights of the Technology, whichever is earlier (hereinafter referred to as “License Period”).  

2.1.2    Three (3) months before the end of the License Period, if Licensee wishes to renew the license, Licensee will inform RDC and both Parties shall negotiate in good faith for the terms and conditions for such extension.  The agreed terms and conditions for the extension of License Period shall be covered by a separate agreement to be signed between the Parties. If no extension of License Period has been agreed upon between the Parties, RDC shall have the sole discretion to continue or discontinue the application of the patents filed or granted for the Technology in any countries after the License Period, without any obligations to Licensee.

2.2       Retained Rights

2.2.1    At all times, Licensee acknowledges and agrees that HKUST and RDC expressly reserves the rights to use the Technology and the associated information for educational and research purposes and to publish the results thereof.

2.2.2    At all times, Licensee acknowledges and agrees that HKUST and RDC expressly reserve the right to use, further develop and commercialize the Technology for any purposes with any parties, and shall have the right to make, sell, have made, have sold, and distribute products based thereon, without subject to any obligation to Licensee.

2.2.3    At all times, Licensee expressly acknowledges and agrees that HKUST and RDC shall have the right to further develop the Technology, and all derived technology and invention generated from such further development shall be solely owned by HKUST and shall not be construed as part of the license granted herein. In the event Licensee wishes to use any further developed technology and invention, Licensee shall negotiate a separate license with RDC.

3. Intellectual Property Ownership

1.     1. At all times, all right, title and interest in Technology and the associated Intellectual Property Rights, including but not limited to copyrights, trade secrets, trademarks, patents and other intellectual property rights, shall belong to HKUST.

1.     2. At all times, all right, title and interest in Products and the associated Intellectual Property Rights, including but not limited to copyrights, trade secrets, trademarks, patents and other intellectual property rights, shall belong to Licensee, subject to Clause 3.1.

4. Duration of License and Termination

4.1       Subject to Clauses 4.2 and 4.3 below, the license granted to Licensee under this Agreement shall expire upon completion of the License Period.

4.2       In case any of the following events occurs, RDC shall be entitled to terminate this Agreement immediately upon written notice to Licensee and the right granted to Licensee in Clause 2.1.1 shall then be rescinded immediately:

4.2.1    Licensee committing a breach of its obligations under this Agreement and failing to cure the breach within fifteen (15) days after receiving written notice thereof;

4.2.2    Licensee has not paid any royalty as stipulated in Clause 6.1 to RDC within three (3) years from the Effective Date.

4.2.3    Change of control of the majority of ownership of Licensee;

4.2.4    Suspension of this Agreement for more than three (3) months due to an event of force majeure under Clause 10.10;

4.2.5    Any Adverse Change (as defined under Clause 10.11) that cannot be remedied for a period of three (3) months; and

4.2.6    Licensee ceases to carry on its business related to this Agreement.

4.3       This Agreement shall be automatically terminated in the event of bankruptcy, insolvency, receivership, dissolution, winding-up, or any similar event, of Licensee and the right granted to Licensee in Clause 2.1.1 shall be rescinded immediately.

4.4       Upon the early termination of this Agreement, Licensee may complete and sell any work-in-progress and inventory of Products that exist as of the effective date of termination, provided that (i) Licensee pays RDC the applicable running royalty or other amounts due on such sales of Products in accordance with the terms and conditions of this Agreement, and (ii) Licensee shall complete and sell all work-in-progress and inventory of Products within one (1) month after the effective date of termination.

4.5       In no event shall termination of this Agreement release Licensee from the obligation to pay any amounts that became due on or before the effective date of termination.

4.6       After the termination and/or expiry of the Agreement, Clauses 3, 4.4. 4.5, 4.6, 5.5, 5.6, 5.7, 7.2, 7.3, 7.4, 7.6, 8, 10.4, 10.12 and 10.13 shall survive.

5. Licensee’s Obligations

1.     1. Licensee hereby agrees to perform sufficient due diligence on the utilization of the Technology for commercial purpose in particular the application to the Products before commercialization thereof, use diligent efforts to develop Products and to introduce Products into the commercial market; thereafter Licensee shall make Products reasonably available to the public.

1.     2. Upon request by RDC, Licensee shall furnish RDC with a written research and development plan describing the major tasks to be achieved in order to bring to market a Product and specifying the number of staff and other resources to be devoted to such commercialization effort.

1.     3. Upon request by RDC, Licensee shall furnish RDC with a written report on the progress of its efforts during the immediately preceding calendar year to develop and commercialize the Products. The report shall also contain a discussion of intended efforts and sales projections for the year in which the report is submitted.

1.     4. In the event that Licensee has notice or actual acknowledge or may be reasonably aware of a third party being found potentially or actually infringing the Technology within the Territory, Licensee shall inform RDC immediately, take the necessary legal actions to protect the right, title and interest of HKUST in the Technology within the Territory, and bear all the legal costs in taking all such legal actions.

1.     5. Licensee shall fully indemnify, defend and hold harmless RDC, HKUST and their trustees, officers, faculty, students, employees, and agents and their respective successors, heirs and assigns (the “Indemnitees”), against any liability, damage, loss or expenses (including without limitation to reasonable attorney’s fees and expenses) incurred by or imposed upon any of the Indemnitees in connection with any claims, suits, actions, demands or judgments arising out of any theory of liability (including without limitation actions in the form of tort, warranty, or strict liability and regardless of whether such action has any factual basis) concerning any product, process or service that is made, used, sold, imported, or performed pursuant to any right or license granted under this Agreement.

1.     6. Licensee shall obtain and carry in full force and effect commercial general liability insurance necessary to protect RDC and Indemnitees with respect to events covered by Clause 5.5 above. Such insurance (i) shall be issued by an insurer licensed to practice in Hong Kong or an insurer pre-approved by RDC, such approval not to be unreasonably withheld, and (ii) shall list RDC as an additional insured thereunder, (iii) shall be endorsed to include product liability coverage, and (iv) shall require thirty (30) days written notice to be given to RDC prior to any cancellation or material change thereof. Licensee shall provide RDC with certificates of insurance evidencing compliance with this Clause upon request by RDC. Licensee shall continue to maintain such insurance after the expiration or termination of this Agreement during any period in which Licensee continues to make, use, or sell a product that was a Product under this Agreement, and thereafter for a period of five (5) years.

1.     7. Licensee shall comply with all laws and regulations applicable to this Agreement, including but not limited to relevant laws and regulations controlling the export of certain commodities and technical data. Among other things, Licensee shall comply where the relevant laws and regulations prohibit or require a license for the export of certain types of commodities and technical data to specified countries. Licensee further acknowledges and agrees that the Technology shall only be used for non-military applications. Licensee hereby gives written assurance that it shall comply with all the applicable laws and regulations as aforesaid, that it shall be solely liable for any violation of such laws and regulations by itself, and that it shall fully indemnify, defend and hold harmless RDC against the consequences of any such violation.

6.         Consideration for the Grant of License

6.1       Royalty

            Licensee hereby agrees to pay RDC 3% of the Gross Sales as royalty on a yearly basis.

6.2       Each payment shall be paid by Licensee to RDC within thirty (30) days of receipt of an invoice from RDC. All payments made pursuant to this Agreement are non-refundable.

6.3       Payment shall be paid via wire transfer to the following bank account:

Beneficiary:              HKUST R and D Corporation Limited
Bank Name:             Hang Seng Bank Limited (HKUST Branch)
Bank Address:         Room G30, HKUST, Clear Water Bay, Kowloon,

                                 Hong Kong
Account Name:        HKUST R and D Corporation Limited
Account Number:     024-361-033988-001
SWIFT Code:          HASE HKHH

6.4       Accounting and Royalty Statement

Within thirty (30) days of the end of each calendar year after the granting of the license to Licensee under Clause 2.1.1, Licensee shall provide RDC with an audited financial statement listing (i) the Gross Sales for such calendar year, and (ii) a calculation of the corresponding payment due to RDC for such calendar year. If no amounts are due to RDC for any reporting period, the report shall so state.

6.5       Records

            Licensee shall maintain complete and accurate records relating to the rights and obligations under this Agreement and any amount payable to RDC in relation to this Agreement (including but not limited to the records on the Gross Sales), which records shall contain sufficient information to permit RDC to confirm the accuracy of any financial statements or reports delivered to RDC and compliance in other respects with this Agreement.  The relevant party shall retain such records for at least seven (7) years following the end of the calendar year to which they pertain, during which time RDC, or RDC’s appointed agents, shall have the right, at RDC’s expense, to inspect such records during normal business hours to verify any financial statement or report and payment made or compliance in other aspects under this Agreement.  In the event that any audit performed under this Clause 6.5 reveals an underpayment in excess of five (5) percent, Licensee shall bear the full cost of such audit and shall remit any amounts due to RDC within thirty (30) days of receiving notice thereof from RDC.

6.6       Tax

Licensee shall ensure that all necessary authorizations, approvals, consents and permits from the Territory’s authorities have been duly obtained for all payments to be made under this Agreement.  Any withholding tax imposed by the Territory’s government on any payments made to RDC herein shall be borne by Licensee and Licensee shall furnish to RDC the receipt of any withholding tax paid.

7.         Warranty

7.1       Ownership

RDC warrants that it has full power and authority to enter into this Agreement. 

7.2       AS IS

7.2.1    The Technology is provided to Licensee on an “AS IS” basis.  Except as may otherwise be expressly set forth in this Agreement, RDC makes no representations or warranties of any kind concerning the Technology, express or implied, including but not limited to warranties of merchantability, fitness for a particular purpose, non-infringement, validity of Patent Rights claims, whether issued or pending, and the absence of latent or other defects, whether or not discoverable. RDC accepts no liability with respect to any usage and/or commercialization of the Technology.

7.2.2    The use of the Technology shall be left to the discretion of Licensee. In no event shall RDC, its trustees, directors, officers, employees and affiliates be liable for incidental or consequential damages of any kind, including but not limited to economic damages or injury to property and lost profits, regardless of whether RDC shall be advised of, shall have other reason to know of, or in fact shall know of the possibility of the foregoing. RDC shall not be liable for any claims or liabilities associated, either directly or indirectly, with the use of the Technology by Licensee or any other parties.

7.2.3    RDC shall make no warranty as to the patentability of the Technology.

7.2.4    RDC makes no warranty or representation (i) regarding the validity or scope of the Patent Rights of the Technology, and (ii) that the exploitation of the Technology or any Products will not infringe any third-party rights and title, including but not limited to patent and Intellectual Property Rights.

7.3       Licensee shall not refer to or use the name of  “Hong Kong University of Science and Technology R and D Corporation Limited”, “The Hong Kong University of Science and Technology” or any variation, adaptation, or abbreviation thereof, or any names of their trustees, officers, faculty, students, employees, or agents, or any trademark and logo owned by RDC or HKUST, or any terms of this Agreement in any promotional material or other public announcement or disclosure, or for product and/or service endorsement and public promotion without obtaining express prior written permission from RDC.

7.4       Licensee warrants and undertakes that it and its employees, agents, consultants or any personnel will not commit and have not committed any offense under the Prevention of Bribery Ordinance in relation to this Agreement.

7.5       For the avoidance of doubt, Licensee hereby agrees and acknowledges that neither RDC nor HKUST shall have any obligation to make any patent application to any national patent office and/or maintain any patent application and/or patent (if granted) with any national patent office during the License Period.

7.6       Notwithstanding anything in this Agreement, the aggregate liability of RDC (if any) to Licensee (whether under this Agreement, in tort or otherwise) shall not in any event exceed the actual annual sum already paid by Licensee to RDC under this Agreement.

8.         Confidentiality

8.1       General

Licensee shall not disclose any Confidential Information to any other person or organisation without the prior written consent of RDC.  Licensee shall protect such information from disclosure to others with at least the same degree of care as Licensee exercises to protect its own information of similar type and importance.  The following shall be excluded from the definition of Confidential Information:

8.1.1    Information which is or becomes publicly available without breach of this Agreement;

8.1.2    Information which is received from a third party without an obligation of confidentiality to RDC and/or HKUST and without breach of this Agreement;

8.1.3    Information which is disclosed by RDC to a third party without an obligation of confidentiality;

8.1.4    Information which is developed independently by employees of Licensee not having access to such information;

8.1.5    Information which is disclosed in response to a valid order by a court or other governmental body of competent jurisdiction.

8.2       Confidentiality of Terms                  

The Parties hereto shall keep all contents contained herein this Agreement, including but not limited to the terms and conditions of this Agreement confidential and shall not now or hereafter divulge these contents in whole or in parts to any third party except with the prior written consent of the other Party.

8.3       Licensee shall maintain confidential any Confidential Information both during the term of this Agreement and after its expiration or termination.

8.4       Notwithstanding anything in this Agreement, Licensee acknowledges and agrees that RDC may use the name of Licensee, title of the Technology and Field of application solely for internal reporting purposes.

9.         Marketing and Support

9.1       Licensee shall promote Products under its own name.

9.2       Licensee shall provide both pre-sale and after-sale support to their Customers and Dealers.  If Licensee desires to receive continuing support from RDC, including but not limited to consultation, customization or enhancement service, the Parties shall negotiate in good faith for the fees for continuing support for the further development of the Technology and Products derived therefrom.

10.       Miscellaneous

10.1     Headings

            The clause headings are inserted for convenience only and shall not affect the construction or interpretation of the content.

10.2     Waiver

            No terms or conditions hereof shall be deemed waived and no breach or default excused unless such waiver or excuse shall be in writing and signed by the Party issuing the same.

10.3     Partial Invalidity

            If any of the provisions of this Agreement prove to be legally invalid, this shall not affect the validity of the remaining provisions hereof which shall continue in full force and effect between the Parties hereto.

10.4     Nothing within this Agreement shall be construed by any Party as relating to a transfer of, intention or indication to transfer, Intellectual Property Rights and ownership from one Party to another. 

10.5     Entire Agreement

            This Agreement supersedes all prior representations and arrangements and understandings between the Parties relating to the subject matter and is intended by the Parties as the complete and exclusive statement of the terms of this Agreement.  Any modifications, additions to or waiver of this Agreement shall not be effective unless in writing and signed by duly authorized representatives of the Parties to this Agreement.

10.6     Independent Contractors

            The relationship between Licensee and RDC established by this Agreement is that of independent contractors, and nothing contained in this Agreement shall be construed (i) to give either Party the power to direct or control the day-to-day activities of the other or (ii) to constitute the Parties as partners, joint venturers, co-owners or otherwise as participants in a joint or common undertaking.

10.7     No Assignment

            This Agreement and all the rights granted herein to Licensee shall not be assigned or otherwise transferred without RDC’s prior written consent.  RDC shall have the right to terminate this Agreement immediately upon written notice to Licensee and upon a purchase of a majority of Licensee’s outstanding voting securities in a single transaction by a third party without RDC’s prior written consent.

10.8     Notice

            All notices required or permitted to be given hereunder shall be in writing and shall be delivered (i) by hand; (ii) by prepaid courier; (iii) by confirmed facsimile transmission or electronic email, or (iv) by registered mail, postage prepaid, to the following addresses or facsimile numbers of the Parties:

If to RDC:       The Hong Kong University of Science and Technology

Clear Water Bay, Kowloon

Hong Kong

Attention: Chief Executive Officer

Tel: 852-2358 8060

Fax: 852-2358 2751

If to Licensee: (address of licensee)

Attention: (contact person of licensee)

Tel: (tel no. of licensee)

Fax: (fax no. of licensee)

            All notices under this Agreement shall be deemed effective upon receipt.  Either Party may change its contact information immediately upon written notice to the other Party in the manner provided in this Clause.

10.9     Modification

            No modification or amendment to this Agreement shall be effective unless assented to in writing by both Parties.

10.10   Force Majeure

            Neither Party shall be liable for delays resulting from causes beyond the reasonable control of such Party, including but not limited to fire, explosion, flood, war, strike, or riot, provided that the non-performing Party uses commercially reasonable efforts to avoid or remove such causes of non-performance and continues performance under this Agreement with reasonable dispatch whenever such causes are removed.

10.11   Adverse Changes

If during the term of this Agreement, any of the present laws or regulations of the Territory are repealed or amended, or new laws or regulations are enacted, or any tax rates are increased or new taxes imposed, so that the result of any of the foregoing has an adverse impact on RDC (an “Adverse Change”), then Licensee shall use its best efforts to obtain such exemption for itself and RDC as may be required or to otherwise negate the adverse result from the occurrence of the Adverse Change.  If that is not obtainable, the Parties hereto shall re-negotiate and amend this Agreement in good faith to achieve the same economic benefit for RDC as may have been anticipated had there not been any Adverse Change.

10.12   Governing Law

            This Agreement is made under and shall be construed in accordance with the Laws of the Hong Kong Special Administrative Region of the People’s Republic of China, without reference to conflicts of law provisions or principles.  Any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, shall be settled by arbitration in accordance with the UNCITRAL Arbitration Rules as at present in force.  The appointing authority shall be the Hong Kong International Arbitration Centre (“HKIAC”).  The place of arbitration shall be in Hong Kong at HKIAC.  There shall be only one arbitrator.  The language to be used in the arbitral proceedings shall be English.

10.13   No Third-party Right          

This Agreement is personal to, and is made solely for, the benefit of the Parties hereto and shall not create or give any rights to or purport to confer any benefits on any third parties whatsoever.  The application of the Contracts (Rights of Third Parties) Ordinance (Chapter 623 of the Laws of Hong Kong) and/or any comparable law in any jurisdiction giving to or conferring on third parties the right to enforce any terms of this Agreement is expressly excluded, and no terms of this Agreement are, or intended to be, enforceable by any person not being a party to it. The rights of the Parties hereto to terminate, rescind or agree any amendment, waiver, variation or settlement under or relating to this Agreement, or any terms of this Agreement, are not subject to the consent of any third party.