Terms & Conditions Research

Fraunhofer USA

TERMS & CONDITIONS – RESEARCH AGREEMENT

THE FOLLOWING STANDARD TERMS AND CONDITIONS ("Terms") shall be applicable to the research agreement between Fraunhofer USA, Inc. ("Fraunhofer") and the person with whom Fraunhofer has contracted to perform research and development services (the "Sponsor").  Research and development services will be performed through one of Fraunhofer's Resource Centers.  The parties' agreement is set forth in Fraunhofer's Proposal to Sponsor (the "Proposal") and, if applicable, Sponsor's Purchase Order which incorporates the Proposal (the "Purchase Order").  (The Proposal, the Purchase Order, if any, and these Terms are collectively called the "Agreement").  The terms of Fraunhofer's proposal shall supersede these Standard Terms and Conditions to the extent that they are inconsistent herewith and the Proposal and these Terms shall supersede any inconsistent pre-printed terms and conditions set forth in the Purchase Order.
 
 1. Project Specifications; Term of Agreement.   
Fraunhofer will perform research and development services as specified in the Proposal (the "Services").  Fraunhofer will use commercially reasonable efforts to complete those services within the time period specified in the Proposal.  If Sponsor asks Fraunhofer to perform research and development services in addition to those specified in the Agreement, Fraunhofer shall invoice Sponsor for such additional services at Fraunhofer's then current rates.
 
 2. Compensation.
  (a) Fraunhofer shall be paid as provided in the Agreement.  Fraunhofer's prices do not include applicable sales, use, value added or other taxes directly attributable to the services performed by Fraunhofer.
  (b)  If Fraunhofer determines that the resources allocated by it to performance of the Services are inadequate to perform the Services in the manner contemplated by the Agreement, or if Fraunhofer cannot complete the services within the time period specified in the Agreement, Fraunhofer shall give Sponsor written notice of that determination.  That notice shall include a proposal by Fraunhofer to modify the scope of the Services, increase the resources allocated by it to the Services, extend the time period of the Agreement, and any additional payment required to compensate Fraunhofer for such changes to the Agreement.  The parties shall thereafter negotiate in good faith a revision of their Agreement in order to document the increased commitments.
  (c) Unless otherwise specified in the Agreement, Fraunhofer shall invoice Sponsor periodically (no less often than quarterly) for services performed and expenses incurred to date and all Fraunhofer invoices shall be payable on net-30 day terms.  All payments shall be paid in U.S. Dollars and without holdback or setoff.  
 
 3. Research and Development Results.
  (a) Upon Sponsor's payment of all compensation that is due to Fraunhofer under the Agreement, Fraunhofer shall deliver the final research and development results (including prototypes or other equipment developed by Fraunhofer while performing services) (the "Results"), to Sponsor in accordance with any specifications set forth in the Agreement.
  (b) Except for tangible property delivered to Sponsor, Fraunhofer shall retain title to all tangible property and intellectual property that is acquired or created by it during the course of performing research and development services for Sponsor.  Fraunhofer shall grant Sponsor a non-exclusive license to use any intellectual property rights created by Fraunhofer in performing Services.  That license shall be worldwide, perpetual and royalty free.  In exchange for that license, Sponsor shall reimburse Fraunhofer any previously unreimbursed costs paid to third parties in securing property rights included in the licensed rights and any costs incurred by Fraunhofer in seeking legal protection for the licensed rights, including without limitation, the cost of application, continuation and defense of patent and copyright registrations and any legally required inventor's fees payable to individuals who contribute to the creation of the licensed rights.
   (c) Alternatively, upon Sponsor's written request (which must be made within sixty (60) days after delivery to Sponsor of the final research and development results), the parties shall negotiate an exclusive license to use any intellectual property rights created by Fraunhofer in performing Services, on terms mutually acceptable to the parties.  Those terms will include, at minimum, a royalty rate to be paid by Sponsor to Fraunhofer in consideration of the grant of license and a limitation of Sponsor's exclusive use of the licensed rights to the specific application or field of use described in the Agreement.
  (d) The parties recognize that much of Fraunhofer's research and development activity builds upon similar activities performed for third parties.  Fraunhofer will incorporate into the Results delivered to Sponsor only such intellectual property rights as Fraunhofer is legally permitted to utilize for that purpose.  Any license granted by Fraunhofer to Sponsor shall encompass those rights.
 
 4. Infringement. 
Each of the parties shall give the other immediate written notice of any claim by a third party that the Results infringe any property rights of that third party.  On learning of any such claim, Fraunhofer shall change the Services or the Results so as not to incorporate the complaining third party's intellectual property rights, or acquire from that third party the right to incorporate those intellectual rights into the Results delivered to Sponsor or terminate the Services prior to delivering the Results to Sponsor.  Fraunhofer shall control the defense and/or settlement of any such claim. Sponsor shall cooperate with Fraunhofer in addressing any such claim.
 
 5. Representations; Remedies.  
  (a) Fraunhofer warrants that it will perform Services in accordance with the specifications set forth in the Agreement, (the "Specifications") and that it will perform the Services applying scientific diligence and observing accepted rules of technological development.  Fraunhofer does not guarantee the results of its research, however.
  (b) At any time during Fraunhofer's performance of the Services and for six (6) months after the delivery by Fraunhofer of the research and development results, Sponsor may give Fraunhofer written notice of Fraunhofer's failure to perform the Services in accordance with the Specifications.  Fraunhofer may, but shall not be required to, cause the research and development results to comply with the Specifications.  If Fraunhofer is unable or unwilling to do so, Sponsor may, at its option and upon written notice to Fraunhofer, terminate the Agreement in accordance with Section 9 (a) (i) of these Terms or demand an adjustment to the compensation payable to Fraunhofer under the Agreement.  If Sponsor demands such an adjustment, the parties shall negotiate the amount of that adjustment in good faith. 
  (c) FRAUNHOFER DISCLAIMS ALL OTHER WARRANTIES, INCLUDING WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  ALL OF FRAUNHOFER'S WARRANTIES EXPIRE SIX (6) MONTHS AFTER THE DATE THAT THE RESULTS ARE DELIVERED TO SPONSOR.
 
 6. Limitation of Liability.  
  (a) The liability of Fraunhofer, all of Fraunhofer's affiliated organizations of Fraunhofer's (and its affiliates') directors, officers, employees and agents, for claims arising out of any act or omission of Fraunhofer under the Agreement shall be limited to the total amount paid by Sponsor to Fraunhofer under the Agreement.  Fraunhofer disclaims liability for any incidental or consequential damages (whether or not foreseeable) that may arise out of the alleged breach of the Agreement by Fraunhofer.  Sponsor must give Fraunhofer written notice of any claim for damages no later than six (6) months after the delivery by Fraunhofer to Sponsor of the final research and development results or those claims shall be forever barred.
  (b) Each of the parties shall be responsible for personal injury or property damage caused by its officers, employees, agents or representatives when present at the premises of the other party.  Each of the parties waives any right of subrogation that it has to indemnification or contribution from the other party in the event of such damage or personal injury.   
 
 7. Nondisclosure. 
For so long as Fraunhofer is performing research and development services for Sponsor under the Agreement and for five (5) years after the delivery of the Results to Sponsor, neither party shall disclose to third parties any information received by it from the other party that is identified in writing as confidential.  This covenant shall not apply to information that is known to the recipient at the time of its disclosure, is independently developed or acquired by the recipient without violation of this covenant, is in the public domain at the time of its disclosure to third parties or is required to be disclosed by law. This section shall apply in addition to any non-disclosure agreement separately executed by the parties.  To the extent that this section and any such other agreement are inconsistent, the terms of that separate agreement shall control.
 
 8. Publications; Advertising 
Fraunhofer may publish articles that incorporate aspects of its research and development services for Sponsor, provided that no such publication shall include Sponsor's name or any proprietary information that is licensed exclusively to Sponsor without Sponsor's prior written consent.  Sponsor may publish the proprietary results of Fraunhofer's research and development services for Sponsor or use Fraunhofer's name only with Fraunhofer's prior written consent. 
 
 9. Termination.
  (a) Either party may terminate the Agreement (i) immediately following a default by the other party; (ii) upon one month's prior written notice under all other circumstances.  Fraunhofer may suspend performance of the Services if Sponsor defaults in making any payment due to Fraunhofer.
  (b) Upon any early termination of the Agreement, Fraunhofer shall deliver to Sponsor the Results as they exist on the effective date of termination in exchange for payment by Sponsor to Fraunhofer for the services performed by Fraunhofer through the date of termination and reimbursement of expenses incurred by Fraunhofer through the date of termination, including any expenses attributable to periods following the date of termination that cannot be canceled upon the termination of this Agreement.  Further, upon such a termination, each of the parties shall return to the other any confidential information provided to it by the other party.
 
 10. Michigan Law.  This Agreement shall be governed by Michigan law, without giving effect to Michigan's conflict of laws principles.  
 
 11. Arbitration.
Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be resolved by the American Arbitration Association pursuant to its Rules of Commercial Arbitration, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction.  Arbitration shall occur in Ann Arbor, Michigan.  Any litigation required to enforce this Agreement (including without limitation, any provision that can only be enforced through specific performance) shall occur in Michigan courts, in Washtenaw County, Michigan or the U.S. District Court for the Eastern District of Michigan, Southern Division.
 
 12. Entire Agreement.   
The documents that comprise the Agreement represent the entire understanding of the parties with regard to Fraunhofer's research and development services for Sponsor.  They supersede all prior oral or written negotiations and agreements.  The Agreement is expressly limited to the terms of the Proposal and these Terms, as well as those terms in the Purchase Order (if any) that are not inconsistent with the provisions of the Proposal and these Terms.  All different, conflicting or other terms in the Purchase Order or any other document submitted by Sponsor in confirmation of the parties' agreement are considered counter offers and are specifically rejected by Fraunhofer.  The parties' agreement may only be modified in a writing signed by an officer of each party.