Document:

Consulting Agreement dated October 1, 2002 with Arizona Microsystems L.L.C.

  
 Exhibit 10.13

  
 LUMERA CORPORATION 
  
 CONSULTING AGREEMENT 
  
 This Consulting Agreement (the “Agreement”) is entered into by and between Lumera
Corporation (the “Company”), a Washington corporation and Arizona Microsystems, L.L.C., an Arizona limited liability company (“AZM”). 
  

	1.	Consulting Relationship. During the term of this Agreement, AZM will provide consulting services (the “Services”) to the Company as described in Exhibit A
attached to this Agreement. AZM represents that AZM is duly licensed (as applicable) and has the qualifications, the experience and the ability to properly perform the Services. AZM or AZM’s employees or agents shall devote at least four (4)
hours per week to performance of the Services. 

  

	2.	Fees. As consideration for the Services to be provided by AZM and other obligations, the Company shall pay to AZM the amounts specified in Exhibit B attached to this
Agreement at the times specified therein. 

  

	3.	Expenses. AZM shall not be authorized to incur on behalf of the Company any expenses without the prior consent of the Company’s Chief Executive Officer, which
consent shall be evidenced in writing for any expenses in excess of $1,500. As a condition to receipt of reimbursement, AZM shall be required to submit to the Company reasonable evidence that the amount involved was expended and related to Services
provided under this Agreement. 

  

	4.	 Terms and Termination. AZM shall serve as consultant to the Company for a period commencing on September 6, 2002 and terminating on September 5, 2004.
Any subsequent renewals to this Agreement shall be on terms and conditions mutually agreed to by the Company and AZM. Notwithstanding the above, either party may terminate this Agreement at any time upon receipt of ten days’ written notice. In
the event of such termination, AZM shall be paid for any portion of the monthly Services performed prior to the date of such termination. Should either party default in the performance of this Agreement or materially breach any of its obligations
under this Agreement, including but not limited to AZM’s obligations under the Proprietary Information and Invention Assignment Agreement between the Company and AZM referenced below in Section 8 of this Agreement (“Cause” for the
succeeding sentences), the non-breaching party may terminate this Agreement immediately following the failure of the breaching party to cure the breach within thirty (30) business days after having received written notice by the non-breaching, party
of the breach or default. In the event that the Company terminates this Agreement without Cause, or AZM terminates this Agreement with Cause, AZM shall be paid and shall retain the initial payment it received at execution of this Agreement, the two
hundred thousand dollars ($200,000) due AZM upon Company’s succeeding fund raising (as defined in Exhibit B), and shall be granted a warrant to purchase 164,000 shares of the Company’s Common Stock (to the extent such warrant has
not previously been granted) pursuant to the terms set forth in Exhibit B. In the event that the Company terminates this Agreement with Cause or AZM terminates this Agreement without 

  

	 	 
Cause, AZM shall only retain any earnings previously paid and any rights to purchase stock pursuant to issued warrants that have been granted prior to
termination. 

  

	5.	Independent Contractor. AZM’s relationship with the Company will be that of an independent contractor and not that of an employee. 

  
 (a) Method of Provision of Services: AZM shall
be solely responsible for determining the method, details and means of performing the Services. AZM may employ or engage the services of such employees or subcontractors as AZM deems necessary to perform the Services required by this Agreement and
the Company shall pay the costs of such employees or subcontractors to AZM provided, that, Company is given ten (10) days notice of such hiring and that Company shall be able to decline paying such costs if it does not agree with such hire (the
“Assistants”). Such Assistants are not the employees of the Company and AZM shall be wholly responsible for the professional performance of the Services by its Assistants such that the results are satisfactory to the Company. AZM shall
expressly advise the Assistants of the terms of this Agreement, excluding financial arrangements, and shall require each Assistant to execute a Proprietary Information and Invention Assignment Agreement substantially in the form attached to this
Agreement as Exhibit C (the “Confidentiality Agreement”). 
  
 (b) No Authority to Bind Company: Neither AZM nor any partner, agent or employee of AZM has authority to enter into contracts that bind the Company or create obligations on the part of the Company
without the prior written authorization of the Company. 
  
 (c) No Benefits: AZM acknowledges and agrees that AZM (or AZM’s employees) will not be eligible for any Company employee benefits and, to the extent AZM (or AZM’s employees) otherwise would be
eligible for any Company benefits but for the express terms of this Agreement, AZM (on behalf of itself and its employees) hereby expressly declines to participate in such Company employee benefits. 
  
 (d) Withholding; Indemnification: AZM shall
have full responsibility for applicable withholding taxes for all compensation paid to AZM its partners, agents or its employees under this Agreement, and for compliance with all applicable labor and employment requirements with respect to
AZM’s self-employment, sole proprietorship or other form of business organization, and AZM’s partners, agents and employees, including state worker’s compensation insurance coverage requirements and any US immigration visa
requirements. AZM agrees to indemnify, defend and hold the Company harmless from any liability for, or assessment of any claims or penalties with respect to such withholding taxes, labor or employment requirements, including any liability for, or
assessment of withholding taxes imposed on the Company by relevant taxing authorities with respect to any compensation paid to AZM or AZM’s partners, agents or employees. 
  
 (e) Indemnification of AZM. Company agrees to indemnify, defend and hold AZM harmless from any
liability for, or assessment of any claims or penalties imposed on AZM with respect to Services performed by AZM for the Company under the terms and 

  

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conditions of this Agreement; provided, that such claims or penalties do not arise from any negligent or willful acts of AZM, the Company is given full
control of the defense of such claims or penalties and AZM promptly notifies the Company of such claims or penalties and the Company isn’t prejudiced in its ability to defend against such claims or penalties by AZM’s delinquent notice.

  

	6.	Supervision of AZM’s Services. All of the Services to be performed by AZM, including but not limited to the Services, will be agreed to between AZM and the
Company’s Chief Executive Officer. AZM will be required to report to the Chief Executive Officer concerning the Services performed under this Agreement. The nature and frequency of these reports will be left to the discretion of the Chief
Executive Officer. 

  

	7.	Consulting or Other Services for Competitors. If this Agreement terminates naturally at the end of one year, AZM terminates without cause or Company terminates with
cause, AZM represents and warrants that AZM does not presently and will not during the term of the Agreement, or for a period of two (2) years thereafter, engage in any electro-optic business (as defined in Exhibit E) that in any material way will
compete with the Company, or presently perform or intend to perform, during the term of the Agreement and for a period of one (1) year thereafter, consulting or other services for, or engage in or intend to engage in an employment relationship with,
companies whose business or proposed business to the best of the AZM’s knowledge, may in any way involve products or services which would be competitive with the Company’s electro-optic polymer products or services, or those electro-optic
polymer products or services proposed or in development by the Company during the term of this Agreement (except for those companies, if any, listed on Exhibit D attached hereto). If however, AZM decides to do so, AZM agrees that, in advance of
accepting such work in the field of electro-optic polymers, AZM will promptly notify the Company in writing, specifying the organization with which AZM proposes to consult, provide services, or become employed by and to provide information
sufficient to allow the Company to determine if such work would conflict with the terms of this Agreement, including the terms of the Confidentiality Agreement, the interests of the Company or further services which the Company might request of AZM.
If the Company determines that such work conflicts with the terms of this Agreement, the Company reserves the right to terminate this Agreement pursuant to Section 4 above. 

  

	8.	Confidentiality Agreement. In the event that AZM as an entity will be causing individuals in its employ or under its supervision to participate in the rendering of the
Services, AZM warrants that it shall cause each of such individuals to execute a Confidentiality Agreement in the form attached as Exhibit C. The Company understands and acknowledges that those employees of AZM who are also employed by the
University of Arizona, are subject to the policies and restrictions imposed by the Arizona Board of Regents related hereto. Such employees are obligated to disclose to the University of Arizona any inventions developed by them and the University of
Arizona may have some rights to such inventions. All reasonable attempts will be made to make a clear distinction between work performed by employees of the University of Arizona and those that are solely employees of AZM in the field of use of
electro-optic polymers. 

  

 -3- 

	9.	Conflicts With this Agreement. AZM represents and warrants that neither AZM nor any of AZM’s partners, employees or agents is under any pre-existing
obligations in conflict with the provisions of this Agreement AZM represents and warrants that in the performance of this Agreement it will not breach any existing or prior confidentiality or proprietary information and inventions agreements. AZM
warrants that AZM has the right to disclose and/or use all ideas, processes, techniques and other information, if any, which AZM has gained from third parties, and which AZM discloses to the Company or uses in the course of performance of this
Agreement, without liability to such third parties. Notwithstanding the foregoing, AZM agrees that AZM shall not bundle with or incorporate into any deliveries provided to the Company herewith any third party products, ideas, processes, or other
techniques, without express written prior approval of the Company. AZM represents and warrants that AZM has not granted and will not grant any rights or licenses to any intellectual property or technology that would conflict with AZM’s
obligations under this Agreement. AZM will not knowingly infringe upon any copyright, patent, trade secret or other property right of any former client, employer or third party in the performance of the Services required by this Agreement. The
Company acknowledges and accepts that AZM’s ability to perform Services or license Inventions are subject to the following limitations: (a) any limitations in the licensing agreement between AZM and the California Institute of Technology
(“Caltech”), (b) any limitations in a licensing agreement between AZM and The University of Arizona (“UA”) and (c) policies and procedures of the Arizona Board of regents (ABOR) as they may apply to AZM’s employees, agents
or contractors. 

  

	10.	Miscellaneous. 

  
 (a) Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the
parties. 
  
 (b) Sole Agreement.
This Agreement, including the Exhibits hereto, constitutes the sole agreement of the parties and supersedes all oral negotiations and prior writings with respect to the subject matter hereof. 
  
 (c) Notices. Any notices required or permitted by
this Agreement shall be in writing and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight delivery service or confirmed facsimile, 48 hours after being deposited in the regular mail as certified or registered
mail (airmail if sent internationally) with postage prepaid, if such notice is addressed to the party to be notified at such party’s address or facsimile number as set forth below, or as subsequently modified by written notice. 
  
 (d) Choice of Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of the State of Washington, without giving effect to the principles of conflict of laws. 
  
 (e) Severability. If one or more provisions of this Agreement are held to be unenforceable
under applicable law, the parties agree to renegotiate such provisions in 

  

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good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be
excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms. 
  
 (f) Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed an original, but all of which together will constitute one and the same instrument. 
  
 (g) Arbitration. Any disputes or claims arising out of or in connection with any provisions of this Agreement will be
finally settled by binding arbitration in King County, Washington, in accordance with the rules of the American Arbitration Association by three arbitrators appointed in accordance with set rules, with each party choosing one and the chosen
arbitrators selecting the third. The arbitrators shall apply Washington law, without reference to rules of conflicts of law or rules of statutory arbitration, to the resolution of any dispute. Judgment on the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief or to compel arbitration in accordance with this paragraph,
without breach of this arbitration provision. This Section 10(g) shall not apply to the Confidentiality Agreement. 
  
 (h) Advice of Counsel. EACH PARTY ACKNOWLEDGES THAT, IN EXECUTING THIS AGREEMENT, SUCH PARTY HAS HAD THE OPPORTUNITY
TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND HAS READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION THEREOF. 
  
 {Signature Page Follows} 
  

 -5- 

 The parties have executed this Agreement on the respective dates set forth below.  
  

			
	LUMERA CORPORATION
		
	 By:
	 	 /s/ Thomas D. Mino

	 	 	

		
	 Title:
	 	 CEO

		
	 Address:
	 	 P.O. Box 3008
 19910 North Creek Parkway
 Bothell, WA 98011-3008

		
	 Date:
	 	 10/1/02

  

			
	ARIZONA MICROSYSTEMS, L.L.C.
		
	 By:
	 	 /s/    Alex J. Mautner        

	 	 	

		
	 Title:
	 	 PRESIDENT

		
	 Address:
	 	 9030 South Rita Rd.
 Suite 300
 Tucson, AZ 85747

		
	 Date:
	 	 9–12–02

  

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 EXHIBIT A 
  
 DESCRIPTION OF CONSULTING SERVICES 
  
 AZM will support and direct electro-optic polymer activities as Consultant for Term of this Agreement and will otherwise take direction for
Services to be provided in the field of electro-optic polymers by Company’s Chief Executive Officer or Senior Chemist. 
  

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 EXHIBIT B 
  
 COMPENSATION 
  
 AZM shall be paid, separate and aside from all other payments, $5,000 per month for no more than 4 hours per week (plus $300 per each additional hour
after 20 hours each month), from the date of this Agreement, until the earlier of completion of Services specified on Exhibit A to this Agreement or until this Agreement is terminated. 
  
 AZM has been paid $75,000 upon joint signature of an agreement in principle
dated May 31, 2002 and June 2, 2002. 
  
 AZM will be paid $125,000
upon signature of this Agreement. 
  
 AZM will be paid $200,000
upon Company’s succeeding round or rounds of funding when it attains a minimum of $10,000,000 regardless of whether the Agreement is still in effect at such time. 
  
 The Company will recommend that the Board grant a warrant to purchase 164,000 shares of the Company’s Common Stock, at
an exercise price equal to $3.65 per share, and which will be purchasable at the discretion of AZM over the term of the warrant period which is ten (10) years from the date of grant, as follows: twenty-five percent (25%) on the date of grant and
twenty-five percent (25%) annually from the date of grant. 
  
 The
Company grants AZM registration rights on the same terms and conditions as those contained in Section 1.3 of the Investors’ Rights Agreement. 
  

 -8- 

 EXHIBIT C 
  
 CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT 
  
 THIS CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT (the “Agreement”) is entered into and made effective as of
                     (“Effective Date”), by and between Lumera Corporation, a Washington Corporation (“Lumera”), and
                     
  
 The purpose of this Agreement is to facilitate the exchange of proprietary information and/or technical data concerning concepts, plans, proposals, markets,
implementation steps, financial projections and goals relating to business ventures that either party has or may undertake. In furtherance of this purpose, the parties have each agreed to disclose or otherwise make available certain data or
information to the other party, which data or information the disclosing party considers to be confidential and proprietary. Each party wishes to review and examine the data or information received under this Agreement only for the purposes of
evaluating technology, determining whether to enter into the relationships and/or provide the services relating to the purposes described herein. The intent of the parties is to protect the data or information which each elects to disclose, but not
to obligate either party to disclose any data or information. 
  
 Hereinafter, the
party disclosing such confidential or proprietary information (including its affiliates, directors, officers, employees, financial advisors, legal counsel, accountants or other agents, advisors or representatives) is referred to as the
“Disclosing Party,” and the party receiving such confidential or proprietary information (including its affiliates, directors, officers, employees, financial advisors, legal counsel, accountants or other agents, advisors or
representatives) is referred to as the “Receiving Party.” 
  
 1.
CONFIDENTIAL INFORMATION. As used in this Agreement, the term “Confidential Information,” means any non-public information, including, without limitation, customer lists, business plans and proposals, financial information, marketing
information, technical information, standard and special pricing information, reseller agreements, problem solving methods, implementation steps, know-how, technology, trade secrets and drawings and renderings related to each party’s ongoing
and proposed businesses, products and services which is being provided or which has been provided to the Receiving Party by the Disclosing Party, or which is obtained by the Receiving Party from its meetings and contacts with the Disclosing Party,
or any information derived by Receiving Party from information so provided or obtained. Confidential Information includes all written or electronically recorded materials identified and marked as confidential or proprietary or which on their face
appear to be confidential or proprietary, oral disclosures of Confidential Information by the Disclosing Party, and information which is demonstrated and observed by the Receiving Party as being Confidential Information during a visit to the
Disclosing Party’s facility. 
  
 Confidential Information does not include
any of the following: (a) information that is in or becomes part of the public domain without violation of this Agreement by the Receiving Party; (b) information that was known to or in the possession of the Receiving Party on a non-confidential
basis prior to the disclosure thereof to the Receiving Party by the Disclosing Party, as evidenced by written records; (c) information that was developed independently by the Receiving Party’s employees, as established by written evidence,
which employees have not received the Confidential Information; (d) information that is disclosed to the Receiving Party by a third party under no obligation of confidentiality to the Disclosing Party and without violation of this Agreement by the
Receiving Party; or (e) is authorized by the Disclosing Party in writing for disclosure or release by the Receiving Party. The burden of proving that information may be disclosed because it does not fall within the definition of Confidential
Information shall be on the Receiving Party. 
  
 2. PERFORMANCE OF AGREEMENT.
The parties agree that it is imperative for each of them that the Confidential Information remain confidential. Accordingly, in order to maintain the confidentiality of the 

  

 
Confidential Information, and in consideration of each party’s making it available to the other party, the parties hereby further agree as follows: (a)
not to disclose or otherwise reveal, without the Disclosing Party’s prior written consent, any portion of the Confidential Information or any notes, extracts, summaries or other materials derived in any way from the inspection or evaluation
thereof by the Receiving Party or its representatives, except to representatives who agree in writing to be bound by the terms of this Agreement; (b) to advise each Receiving Party representative to whom any Confidential Information is to be made
available of the confidential nature of such Confidential Information and of the terms of this Agreement before making such information available to such representative; (c) not to use the Confidential Information for personal gain or to advance or
support its business ventures or the business ventures of third parties, other than for the purposes contemplated by this Agreement and for no other purpose; (d) to promptly return to the Disclosing Party (or its designees), upon the Disclosing
Party’s request, all Confidential Information and all copies thereof (one copy may be kept for archival purposes); (e) the Receiving Party shall not reverse engineer, disassemble or decompile any prototypes, software or other objects which
embody the Disclosing Party’s Confidential Information; (f) the Receiving Party undertakes that it will not include the Disclosing Party’s Confidential Information in any application for patent or utility model or design protection in any
country filed by or on behalf of the Receiving Party; (g) the Receiving Party shall not use Confidential Information to manufacture, enable manufacture by itself or third parties, products that are derived from the Disclosing Party’s
Confidential Information or product; and (h) upon discovery of an unauthorized disclosure, the Receiving Party shall endeavor to prevent further disclosure or use and shall notify the Disclosing Party immediately. Subject to the terms of any signed
definitive agreement between the parties, the parties understand and agree that neither party has made or makes any representation or warranty as to the accuracy or completeness of the Confidential Information, and that neither party shall have any
liability resulting from use of the Confidential Material by the other. 
  
 Notwithstanding any other terms or conditions of this Agreement, the Receiving Party may disclose Confidential Information to satisfy a legal demand by a court of competent jurisdiction, provided however that the Receiving Party shall have
first advised the Disclosing Party prior to the disclosure so that the Disclosing Party has had the opportunity to seek appropriate relief from the court order, and provided further that the Receiving Party shall disclose only that portion of the
Confidential Information which is legally required to be disclosed and request confidential treatment of the Confidential Information by the court. 
  
 3. NOTICES. All notices, requests, demands and other communications under this Agreement must be in writing and will be deemed duly given, unless otherwise
expressly indicated to the contrary in this Agreement, (i) when personally delivered, (ii) upon receipt of a telephonic facsimile transmission with a confirmed telephonic transmission answer back; provided that such notice, request, demand or other
communication is also sent by a nationally recognized overnight courier, (iii) three (3) days after having been deposited in the United States mail, certified or registered, return receipt requested, postage prepaid, or (iv) one (1) business day
after having been dispatched by a nationally recognized overnight courier service, addressed to the parties or their permitted assigns at the addresses which follow their signatures below (or at such other address or number as is given in writing by
either party to the other). 
  
 4. REPRODUCTION AND RETURN OF
CONFIDENTIAL INFORMATION. The Confidential Information provided or made available by the Disclosing Party shall not be copied or reproduced without the Disclosing Parry’s express written permission, except for such copies as may reasonably
be required for internal evaluation. Upon termination of this Agreement, the Receiving Party agrees to return to the Disclosing Party or certify as destroyed all copies of the Confidential Information, in whatever form, including written or
electronically recorded information received under this Agreement. One copy may be kept for archival purposes. 
  
 5. TERM OF AGREEMENT. This Agreement shall terminate five (5) years from the Effective Date, unless extended by mutual written agreement, but may be
terminated prior to that time as to receipt of further information by either party on thirty (30) days written notice. Each party’s obligations under Sections 1, 2, and 4 hereof shall survive any termination. 
  
 6. NO LICENSE/COMMITMENT/OBLIGATION. Neither the execution of this Agreement
nor the furnishing of any information hereunder shall be construed by the Receiving Party as granting any license or any other rights other than as set forth herein under any trade secrets, copyrights or patents now or hereafter owned by or
controlled 

  

 -2- 

 
by the Disclosing Party, or under any trade secrets, copyrights or patents in which the Disclosing Party is now licensed. Nothing in this Agreement shall
grant to either party the right to make commitment of any kind for or on behalf of the other party without the prior written consent of the other party. This Agreement shall not be construed by either party in any manner to be an obligation to enter
into a subsequent agreement of any kind, or to result in any claim of obligation to enter into a subsequent agreement of any kind, or to result in any claim whatsoever by one party against the other party for reimbursement of costs or payment for
any efforts expended hereunder. If a subsequent agreement is entered into between the parties, then the terms of the obligations of confidentiality and nondisclosure and the rights of the parties in any developments from such agreement shall be as
exclusively set forth therein. 
  
 7. NO PUBLIC ANNOUNCEMENT. Neither party
hereto shall, without the express written consent of the other party, publicly announce the existence or terms of this Agreement or advertise or release any publicity in regard thereto. 
  
 8. ASSIGNMENT/BINDING EFFECT. Neither party shall assign or transfer any of its rights or obligations hereunder without the prior
written consent of the other party hereto, except to a successor in ownership of all or substantially all of the assets of the assigning party if the successor in ownership expressly assumes in writing the terms and conditions of this Agreement. Any
attempted assignment without written consent will be void. This Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the parties. 
  
 9. UNITED STATES EXPORT CONTROL LAWS AND REGULATIONS. Technical data exchanged hereunder may be subject to United States Export
Control Laws and Regulations. Accordingly, the Receiving Party shall not transfer such data directly or indirectly to any third person or firm, country or countries, without specific authorization from the Disclosing Party. 
  
 10. GOVERNING LAW. The parties agree that this Agreement shall be interpreted and
construed both as to performance and validity in accordance with and governed by the laws of the State of Washington even if its choice of law provisions are in conflict with this requirement. 
  
 11. REMEDIES. The Receiving Party recognizes and agrees that the Confidential
Information is of a special, unique and extraordinary character which gives it a peculiar value the loss of which cannot be reasonably or adequately compensated in damages, and that a breach of this Agreement will cause irreparable damage and injury
to the Disclosing Party. The Receiving Party, therefore, expressly agrees that the Disclosing Party shall be entitled to injunctive and/or other equitable relief to prevent a breach of the provisions of this Agreement, or any part thereof, in
addition to any other remedies available to the Disclosing Party. All remedies available to the Disclosing Party hereunder are cumulative, and may, to the extent permitted by law, be exercised concurrently or separately. The exercise by the
Disclosing Party of any one remedy shall not be deemed to be an election of such remedy or to preclude the exercise of any other remedy. A failure or delay by the Disclosing Party in exercising any right, privilege or remedy shall neither operate as
a waiver thereof nor modify the terms of this Agreement, nor shall any single or partial exercise by the Disclosing Party of any right, privilege or remedy preclude any other or further exercise of the same or of any other right, privilege or
remedy. 
  
 12. HEADINGS/WAIVER OF BREACH/SEVERABILITY. The section and
sub-section headings contained herein are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but, if any provision hereof shall be prohibited by or held invalid or unenforceable under any such law, such provision shall be ineffective to the extent of such prohibition, invalidity or unenforceability,
without invalidating or nullifying the remainder of such provision or any other provision of this Agreement. The parties further agree to substitute a provision that effects the intent of the invalidated provision as nearly as possible. The failure
to enforce or to require the performance at any time of any of the provisions of this Agreement shall not be construed to be a waiver of any other provisions, and shall not affect either the validity of this Agreement or any part hereof or the right
of any party thereafter to enforce each and every provision of this Agreement. 
  

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 13. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall,
when executed, be deemed to be an original, but all of which together shall constitute one and the same instrument. 
  
 14. AUTHORITY. Each party represents and warrants that its delivery of this Agreement has been duly authorized by all necessary corporate or other action and that
the person signing the Agreement on its behalf is duly authorized to do so. 
  
 15. ENTIRE AGREEMENT/MODIFICATION. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior representations, agreements, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof. This Agreement may not be modified except by a writing that expressly refers to this Agreement and is executed by all parties hereto. 
  
 IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written. 
  

											
	LUMERA CORPORATION	 	 	 	EMPLOYEE OR SUB CONTRACTOR
					
	By:	 	 /s/ Thomas D. Mino
	 	 	 	By:	 	 
	 	 	
	 	 	 	 	 	

					
	 Name:
	 	 Thomas D. Mino
	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 	 	

					
	 Title:
	 	 CEO
	 	 	 	 Title:
	 	 
	 	 	 	 	 	 	 	 	

			
	 Notice Addresses:
	 	 	 	 Notice Addresses:

			
	 P.O. Box 3008
	 	 	 	 
	 19910 North Creek Parkway
	 	 	 	 Address:
	 	 
	 	 	 	 	 	 	 	 	

	 Bothell, WA 98011-3008
	 	 	 	 City, ST:
	 	 
	 	 	 	 	 	 	 	 	

	 Attention: Paula Loud
	 	 	 	 Attention:
	 	 
	 	 	 	 	 	 	 	 	

	 Tel: 425.415.6847
	 	 	 	 Tel:
	 	 	 	 
	 	 	 	 	 	 	 	

	 Fax: 425.481.1625
	 	 	 	 Fax:
	 	 	 	 
	 	 	 	 	 	 	 	

			
	 with a copy to:
	 	 	 	 with a copy to:

					
	 P.O. Box 3008
	 	 	 	 	 	 	 	 
	 19910 North Creek Parkway
	 	 	 	 Address:
	 	 
	 	 	 	 	 	 	 	 	

	 Bothell, WA 98011-3008
	 	 	 	 City, ST:
	 	 
	 	 	 	 	 	 	 	 	

	 Attention: General Counsel
	 	 	 	 Attention:
	 	 
	 	 	 	 	 	 	 	 	

	 Tel: 425.415.6847
	 	 	 	 Tel:
	 	 
	 	 	 	 	 	 	 	

	 Fax: 425.415.6795
	 	 	 	 Fax:
	 	 
	 	 	 	 	 	 	 	

  

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 EXHIBIT D 
  
 LIST OF COMPANIES EXCLUDED UNDER SECTION 7 
  
 1. Nitto Denko Technical Corporation 
  

 -5- 

 EXHIBIT E 
  
 PROPRIETARY INFORMATION TECHNOLOGY 
  
 The following technology to be considered part of the electro-optic polymer Field –of Use covered by this Agreement, is
limited to: 
  
 1. Organic and metal-organic chromophores for
electro-optic modulation applications; specifically, chromophores designed to have substantial first hyperpolarizability. 
  
 2. Polymers and dendrimers that can be used in conjunction with chromophores for the preparation of electro-optic polymers. 
  
 3. Additives that can be used to improve the thermal/optical stability of
electro-optical polymers. 
  
 4. Methods of electric field poling
to induce non-centrosymetric alignment in electro-optic materials. 
  
 Technology not to be considered part of the electro-optic polymer field-of-use covered by this Agreement includes: 
  
 1. Any materials, methods, instruments, and know-how involving the use of 2-photon or multi-photon absorption processes for fabrication, patterning,
imaging, and sensing applications. 
  
 2. Any photo refractive or
holographic applications. 
  
 3. Any information storage and
retrieval application, excluding those based solely on electro-optic modulation. 
  
 4. Any work pertaining to organic, light emitting diodes, field-effective transistors, and organic semi-conductor based devices including but not limited to solar cells. 
  
 5. Any work involving materials and methods dealing with use of surface
enhancements or non-linear optical effects through interaction with metal surfaces, nano particles, or aggregates of nano particles. 
  

 -6-License Agreement effective March 27, 2004 with Arizona Microsystems L.L.C.

 Exhibit 10.14 
 LICENSE AGREEMENT 
  
 THIS AGREEMENT is effective as of the 27th day of March
27, 2004 (the “Effective Date”), between ARIZONA MICROSYSTEMS, L.L.C. having a principal place of business at 9030 S. Rita Rd., Suite 300, Tucson, Arizona 85747 (hereinafter
called “AZM”) and Lumera Corporation, a Washington corporation, having a principal place of business at 9040 S. Rita Rd., Suite 300, Tucson, Arizona 85747 (hereinafter called “Licensee”). 
  
 WHEREAS AZM warrants that it executed an
exclusive license for the inventions listed in Exhibit A, which were warranted as being solely owned by California Institute of Technology (“Caltech”), under the Caltech License, and; 
  
 WHEREAS, AZM warrants that it executed
an exclusive license to Caltech’s ownership interest in the inventions listed in Exhibits B and C attached hereto, which Caltech warranted it is a joint owner by assignment, under the Caltech License; and 
  
 WHEREAS, Licensee is desirous of
obtaining, and AZM wishes to grant to Licensee, an exclusive license to the Licensed Patent Rights (as defined in Paragraph 1.5) in the Field (as defined Paragraph 1.2) and a nonexclusive license to the Technology (as defined in Paragraph 1.7) in
the Field. 
  
 NOW,
THEREFORE, the parties agree as follows: 
  
 ARTICLE 1 
  
 DEFINITIONS 
  
 1.1 “Licensed
Product” means any product, device, service or system in the Field which is covered by, or is made by a process covered by, any Valid Claim of any Licensed Patent Rights or which utilizes the Technology in material part. 
  
 1.2 “Field” means electro-optic polymers including (1)
Organic and metal-organic chromophores for electro-optic modulation applications; specifically, chromophores designed to have substantial first hyperpolarizability; (2) Polymers and dendrimers that can be used in conjunction with chromophores for
the preparation of electro-optic polymers; (3) Additives that can be used to improve the thermal/optical stability of electro-optical polymers; and (4) Methods 
  

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 of electric field poling to induce non-centrosymetric alignment in electro-optic materials; but not including (1) Any
materials, methods, instruments, and know-how involving the use of 2-photon or multi-photon absorption processes for fabrication, patterning, imaging, and sensing applications; (2) Any photo refractive or holographic applications; (3) Any
information storage and retrieval application, excluding those based solely on electro-optic modulation; (4) Any work pertaining to organic, light emitting diodes, field-effective transistors, and organic semi-conductor based devices like solar
cells; and (5) Any work involving materials and methods dealing with use of surface enhancements or non-linear optical effects through interaction with metal surfaces, nano particles, or aggregates of nano particles. 
  
 1.3 “Deductible Expenses” means the following
deductions, at rates customery within the industry (if not already deducted from the gross invoice price), when calculating the total gross prices including (a) allowances (actually paid and limited to rejections, returns, and prompt payment and
volume discounts grant to customers of Licensee, or a sublicensee, whether in cash or other consideration in lieu of cash); (b) freight, transportation, packing, and/or insurance charges associated with transportation; and (c) taxes based on sales
when included in gross sales, but not taxes asses on income derived from such sales. 
  
 1.4 “Related Company” means any corporation, limited liability company or other legal entity directly or indirectly controlled by Licensee or its successors or assigns, or any successor or
assign of such an entity. For the purpose of this Agreement, “control” shall mean the direct or indirect ownership of at least fifty percent (50%) of the outstanding shares or other voting rights of the subject entity to elect directors,
or if not meeting the preceding, any entity owned or controlled by or owning or controlling at the maximum control or ownership right permitted in the country where such entity exists. 
  
 1.5 “Licensed Patent Rights” means AZM’s rights pursuant to the Caltech License in which AZM
received an exclusive license to Caltech’s sole and joint ownership rights under all domestic and foreign patents and patent applications listed in Exhibits A, B and C attached hereto and all patents and patent applications that describe and
claim inventions set forth in the invention disclosures listed on Exhibits A, B and C; any patents which issue on the applications listed in Exhibits A, B and C or any applications that claim inventions set forth in the invention 
  

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 disclosures set forth on Exhibit A, B and C; and all reissues, reexaminations, substitutions, renewals, extensions,
divisionals, and continuations of the foregoing patents and patent applications; and any foreign counterparts and any other forms of protection directed to the inventions covered by the patents or patent applications and invention disclosures listed
in Exhibits A, B and C. 
  
 1.6 “Caltech
Technology” means the Licensed Patent Rights and Technology. 
  
 1.7 “Technology” means all proprietary information, know-how, procedures, methods, prototypes, designs, technical data and reports licensed from Caltech that are necessary or useful in the development of Licensed
Products and which relate to the Licensed Products, but which are not the subject of the Licensed Patent Rights. Subject to the foregoing, inventions which (i) are the subject of applications for patents listed in Exhibits A, B and C, or
applications which claim priority from such applications, and (ii) are not claimed in an issued patent included in the Licensed Patent Rights shall be considered to be Technology. 
  
 1.8 “Net Revenues” shall mean the total of the gross invoice prices from the sale of Licensed
Products by Licensee and Related Companies or a sublicensee to any third parties for cash or other forms of consideration, in accordance with generally accepted accounting principles, less Deductible Expenses. 
  
 (a) Where Licensee distributes Licensed Products for
end use to itself or a sublicensee, then such distribution will be considered a sale at the list price normally charged to independent third parties, and AZM will be entitled to collect a royalty on such a sale. 
  
 1.9 “Valid Claim” means (a) an issued claim of an
issued patent within the Licensed Patent Rights, which has not (i) expired or been canceled, (ii) been declared invalid by an unreversed and unappealable decision of a court or other appropriate body of competent jurisdiction, (iii) been admitted to
be invalid or unenforceable through reissue, disclaimer or otherwise, and/or (iv) been abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written agreement; or (b) a claim included in a pending patent
application within the Licensed Patent Rights that is being actively prosecuted in accordance with this Agreement and which has not been (i) canceled, (ii) withdrawn from consideration, (iii) 
  

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 finally determined to be unallowable by the applicable governmental authority (and from which no appeal is or can be
taken), and/or (iv) abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written consent. 
  
 1.10 “Sublicensee” shall mean, with respect to a particular Licensed Product, a third-party to whom Licensee has granted a license
or sublicense under the Caltech Technology to develop, make, have made, use and sell such Licensed Product. 
  
 1.11 “Caltech License” shall mean the License Agreement between Caltech and AZM executed on July 25, 2002. 
  
 1.12 “Consulting Agreement” shall mean the Consulting
Agreement between AZM and Licensee executed on October 1, 2002. 
  
 ARTICLE 2 
  
 PATENT LICENSE GRANT

  
 2.1 AZM hereby grants to Licensee the following
licenses: 
  
 (a) an exclusive,
royalty-free license under Licensed Patent Rights to research, develop, make, have made, import, have imported, use, have used, sell, have sold, offer for sale, have offered for sale, and otherwise exploit Licensed Products in the Field throughout
the world; 
  
 (b) a nonexclusive,
royalty-free worldwide license to the Technology to make, have made, import, have imported, use, have used, sell, have sold, offer for sale, have offered for sale, and otherwise exploit Licensed Products in the Field throughout the world.

  
 2.2 These licenses are subject to: (a) the reservation
of Caltech’s right to make, have made, and use Licensed Products for noncommercial educational and research purposes, but not for sale or other distribution to third parties; and (b) the rights of the U.S. Government under Title 35, United
States Code, Section 200 et seq., including but not limited to the grant to the U.S. Government of a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced any invention conceived or first actually reduced to
practice in the performance of work for or on behalf of the U.S. Government throughout the world. These licenses are not 
  

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 transferable by Licensee except as provided in Paragraph 15.4, but Licensee shall have the right to grant nonexclusive or
exclusive sublicenses hereunder, provided that: 
  
 (a) Licensee shall furnish AZM within thirty (30) days of the execution thereof, a true and complete copy of each sublicense and any changes or additions thereto, which AZM shall in turn furnish to Caltech; 
  
 (b) Licensee may grant sublicenses of no greater
scope than the license granted under Section 2.1 which shall remain in effect and be assigned to AZM in the event this license terminates; and 
  
 (c) Each sublicense granted by Licensee shall include provisions similar in all material respects to those of Articles 6, 12, 14,
15 and Paragraph 2.2. 
  
 2.3 The license grants shall
continue for the term of this Agreement as set forth in Article 11; provided, however, that if this Agreement expires pursuant to the first sentence of Paragraph 11.1, Licensee shall retain a nonexclusive, perpetual, royalty-free, worldwide license,
with the right to sublicense, under the Caltech Technology, to research, develop, make, use, sell, offer for sale and import Licensed Products. 
  
 2.4 Licensee may assign the license in connection with the sale or transfer of all or substantially all the assets of Licensee relating to the
License Products or services utilizing the methods within the Licensed Patents. 
  
 ARTICLE 3 
  
 ROYALTIES
AND LICENSE FEES 
  
 3.1 This license shall be royalty
free. 
  
 3.2 Licensee shall pay annually, commencing on
the Effective Date, a minimum of ten thousand dollars ($10,000.00) as a licensee fee. 
  
 3.3 Any sublicenses granted by Licensee, including, without limitation, any nonexclusive sublicenses, shall remain in effect and be assigned to AZM in the event this license 
  

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 terminates pursuant to Article 11; provided, the financial obligations of each Sublicensee to AZM shall be limited to the
amounts Licensee shall be obligated to pay to AZM for the activities of such Sublicensee pursuant to this Agreement. In such event and subject to the preceding sentence, AZM shall assume all the rights and obligations of Licensee. 
  
 ARTICLE 4 
  
 LICENSOR EQUITY INTEREST 
  
 4.1 Under the terms of the Consulting Agreement and subsequent action
by Licensee’s Board of Directors, Licensee granted AZM a warrant to purchase 164,000 shares of Licensee’s common stock at a price and per vesting provisions stated therein. 
  
 ARTICLE 5 
  
 DUE DILIGENCE 
  
 5.1 Licensee shall have discretion over the commercialization of Licensed Products. However, Licensee agrees to use commercially reasonable efforts
to diligently introduce commercial Licensed Product(s) in the United States as soon as practical, consistent with sound and reasonable business practices and judgments. Licensee shall be deemed to have satisfied its obligations under this Paragraph
if Licensee has diligently acquired and spent adequate resources to conduct an ongoing and active research program, a product development and deployment program, and a sales and marketing program, as appropriate, directed toward production and use
of one or more Licensed Products. 
  
 5.2 After the first
year from the Effective Date, AZM shall have the right, no more often than twice each year, to require Licensee to report to AZM in writing on its progress in introducing commercial Licensed Product(s) in the United States. 
  
 5.3 If Licensee is not fulfilling its obligations under Paragraph 5.1
with respect to the Field and AZM so notifies Licensee in writing, AZM and Licensee shall negotiate in good faith any additional efforts to be taken by Licensee. If the parties do not reach agreement within ninety (90) days, the parties shall submit
the issue to arbitration as provided in Article 14 to determine whether any additional efforts shall be required of Licensee. If subsequent to the conclusion of such arbitration proceedings Licensee then fails to make any required efforts, and

  

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 does not remedy that failure within sixty (60) days after further written notice to Licensee, AZM may terminate
the license granted in Paragraph 2.1 in any part of the Field in which Licensee is not fulfilling its obligations under Paragraph 5.1. 
  
 ARTICLE 6 
  
 INFRINGEMENT BY THIRD PARTY 
  
 6.1 AZM shall at its expense, have the first right but not the obligation to protect the Licensed Patent Rights from infringement and prosecute infringers when, in its sole judgment, such action may be
reasonably necessary, proper and justified. Notwithstanding the foregoing, Licensee shall have the right to sublicense any alleged infringer pursuant to Paragraph 2.1. 
  
 6.2 If Licensee shall have supplied AZM with evidence of infringement of Licensed Patent Rights or patents by a third
party, Licensee may by notice request AZM to take steps to enforce the Licensed Patent Rights. If Licensee does so, and AZM does not, within three (3) months of the receipt of such notice, either (i) cause the infringement to terminate or (ii)
initiate a legal action against the infringer, Licensee may, upon notice to and approval of AZM, initiate an action against the infringer at Licensee’s expense, either in Licensee’s name or in AZM’s name if so required by law.
Licensee shall have sole control of the action. 
  
 6.3 If
a declaratory judgment action alleging invalidity, unenforceability or noninfringement of any of the Licensed Patent Rights is brought against Licensee and/or AZM, Licensee may elect to have sole control of the action, and if Licensee so elects it
shall bear all the costs of the action. 
  
 6.4 In the
event one party shall institute or carry on a legal action pursuant to Paragraphs 6.2 or 6.3, the other party shall fully cooperate with and supply all assistance reasonably requested by the party instituting or carrying on such action, including by
using commercially reasonable efforts to have its employees testify when requested and to make available relevant records, papers, information, samples, specimens, and the like. A party controlling an action pursuant to Paragraphs 6.2 or 6.3 shall
bear the reasonable expenses incurred by said other party in providing such assistance and cooperation as is requested pursuant to this Paragraph. A party instituting or carrying on such an action shall keep the other party 
  

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 informed of the progress of such action, and said other party shall be entitled to be represented by counsel in
connection with such action at its own expense 
  
 6.5 The
party controlling any action referred to in this Article 6 shall have the right to settle any claims, but only upon terms and conditions that are reasonably acceptable to the other party hereto. Should either party elect to abandon such an action
other than pursuant to a settlement with the alleged infringer that is reasonably acceptable to the other party, the party controlling the action shall give timely notice to the other party who, if it so desires, may continue the action; provided,
however, that the sharing of expenses and any recovery in such suit shall be as agreed upon between the parties. 
  
 6.6 Any amounts paid to a party by third parties as the result of such an action (such as in satisfaction of a judgment or pursuant to a
settlement) shall first be applied to reimbursement of the unreimbursed expenses (including attorneys’ fees and expert fees) incurred by each party. Any remainder shall be divided between the parties as follows: 
  
 (a) To the extent the amount recovered reflects lost
profits or royalties, Licensee shall retain the remainder; and 
  
 (b) To the extent the amount recovered does not reflect lost profits, sixty percent (60%) shall be paid to the party initiating the action and forty percent (40%) to the other party. 
  
 6.7 If an infringement or infringements by third parties of Licensed
Patent Rights is on a scale that significantly affects sales of Licensed Products, and neither AZM nor Licensee elect to bring an infringement suit against the infringers, the license fees hereunder payable by Licensee pursuant to Paragraph 3.2
shall be reduced by twenty-five percent (25%) of the sums otherwise payable if Licensee presents information to AZM that such infringer has refused to enter into a royalty-bearing, sublicensing agreement with Licensee on terms reasonably acceptable
to Licensee. 
  

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 ARTICLE 7 
  

BENEFITS OF LITIGATION, EXPIRATION OR ABANDONMENT 
  
 7.1 General. In a case where one or more patents or particular claims thereof within the Licensed Patent Rights expire, or are abandoned, or are
declared invalid or unenforceable or otherwise construed by a court of last resort or by a lower court from whose decree no appeal is taken, or certiorari is not granted within the period allowed therefor, then the effect thereof hereunder shall be:

  
 (a) that such patents or particular
claims shall, as of the date of expiration or abandonment or final decision as the case may be, cease to be included within the Licensed Patent Rights for the purpose of this Agreement; 
  
 (b) that such construction so placed upon the Licensed Patent Rights by the court shall be followed
from and after the date of entry of the decision. 
  
 ARTICLE 8

  
 RECORDS, REPORTS AND PAYMENTS 
  
 8.1 Licensee shall keep records and books of account in respect of all
Licensed Products made and sold by Licensee or Related Companies under this Agreement and of royalties or other revenues Licensee receives from Sublicensees other than Related Companies for the sale of Licensed Products. AZM shall have the right,
during business hours, no more often than annually, to examine, or to have its designated auditors examine, such records and books. Licensee shall keep the same for at least three (3) years after it receives such revenues for such Licensed Products
and require Related Companies to do the same. AZM shall not disclose to any third party any confidential information learned through an examination of such records and books except as may be required to disclose to Caltech under the terms of the
Caltech License, nor shall AZM use any such information for any purpose other than determining and enforcing its rights under this Agreement. 
  

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 8.2 On each anniversary of the Effective Date, Licensee shall render to AZM a report in writing,
setting forth Net Revenues and the number of units of Licensed Products sold during the preceding year by Licensee and Related Companies, and the royalties or other revenues Licensee received from Sublicensees other than Related Companies during the
preceding year for the sale of Licensed Products. Notwithstanding the foregoing, if (i) AZM materially breaches this Agreement, (ii) Licensee gives AZM written notice of the breach, and (iii) AZM has not cured the breach by the time a payment is due
under this Paragraph, then Licensee may make the required payment into an interest bearing escrow account to be released when the breach is cured, less any damages that may be payable to Licensee by virtue of AZM’s breach. 
  
 8.3 On each anniversary of the Effective Date, Licensee shall render
to AZM a report in writing, setting forth Licensee’s efforts, progress and future plans regarding ongoing and active research programs, sales and marketing programs, and product development and deployment programs, and progress towards the
introduction of commercial Licensed Products in the US. 
  
 ARTICLE 9 
  
 CONFIDENTIALITY 

 
 9.1 All reports provided to AZM pursuant to this Agreement shall be
treated as confidential information of Licensee and shall not be disclosed to any third party without the prior written consent of Licensee except as may be required to disclose to Caltech under the terms of the Caltech License. 
  
 9.2 Except as expressly provided herein, each party agrees not to
disclose any terms of this Agreement to any third party without the consent of the other party; provided, however, that disclosures may be made as required by securities or other applicable laws, or to actual or prospective investors or corporate
partners, or to a party’s accountants, attorneys, and other professional advisors. 
  

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 ARTICLE 10 
  
 PROSECUTION AND PAYMENT OF PATENT COSTS 
  
 10.1 Caltech will be responsible, using patent counsel of its choice with AZM having right of review and comment, for
preparing, filing prosecuting and maintaining patent applications listed in Exhibit A. Caltech will coordinate with joint owners of the applications listed in Exhibits B and C to determine the party responsible for such applications. In coordination
with any joint owners, Caltech will provide AZM with right of review and comment, for preparing, filing, prosecuting and maintaining these patent applications and patents. 
  
 10.2 For any patent or patent application listed in Exhibit A, Licensee will pay the reasonable costs incurred in
connection with such activities, and Licensee will pay Caltech’s reasonable share of costs, past, present and future, incurred in connections with the preparation, filing, prosecuting and maintaining the patents and patent applications listed
in Exhibits B, and C. Such costs will include any such costs incurred to date as shown in Exhibit D, future costs of prosecuting such US and foreign patent application, and related maintenance fees for as long as the Licensee is in effect.

  
 10.3 Licensee shall pay AZM in full at the time of
execution of this Licensee the amounts listed in Exhibit D herein. For any additional or ongoing fees, payment shall be made to Caltech within thirty (30) days following receipt by AZM from Caltech of (i) an invoice covering such fees (including
copies of invoices for legal fees describing the legal services performed in reasonable detail) and (ii) reasonably satisfactory evidence that such fees were paid. Licensee shall pay AZM in full within thirty (30) days following receipt by Licensee
from AZM of (i) an invoice covering such fees (including copies of invoices for legal fees describing the legal services performed in reasonable detail) and (ii) reasonably satisfactory evidence that such fees were paid. To the extent that Licensee
terminates this Agreement pursuant to Paragraph 11.2 with respect to any patent application or patent, Licensee shall have no further liability under Paragraph 10.1 for fees relating to applications or patents affected by the termination.

  

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 ARTICLE 11 
  
 TERMINATION 
  
 11.1 The term of this Agreement shall commence upon the Effective Date and expire upon the date of expiration the last to expire of the Licensed
Patent Rights. AZM shall have the right to terminate this Agreement prior to the date it would otherwise expire pursuant to this Paragraph 11.1 if Licensee fails to make any payment due hereunder and Licensee continues to fail to make the payment,
either to AZM directly or by placing any disputed amount into an interest bearing escrow account to be released when the dispute is resolved, for a period of sixty (60) days after receiving notice from AZM specifying Licensee’s failure or if
Licensee fails to honor or interferes with the grant of stock specified in the Consulting Agreement. Upon any such termination, (i) Licensee and Related Companies shall have two (2) months to complete the manufacture of any Licensed Products that
then are work in progress and to sell their inventory of Licensed Products, in accordance with Paragraph 8.2, and (ii) AZM shall accept an assignment by Licensee of any sublicenses granted by Licensee to entities other than Related Companies, and
any sublicense so assigned shall remain in full force and effect. 
  
 11.2 If either party materially breaches this Agreement, the other party may elect to give the breaching party written notice describing the alleged breach. If the breaching party has not cured such breach within sixty (60) days
after receipt of such notice, the notifying party will be entitled, in addition to any other rights it may have under this Agreement, to terminate this Agreement effective immediately; provided, however, that if either party receives notification
from the other of a material breach and if the party alleged to be in default notifies the other party in writing within thirty (30) days of receipt of such default notice that it disputes the asserted default, the matter will be submitted to
arbitration as provided in Article 13 of this Agreement. In such event, the nonbreaching party shall not have the right to terminate this Agreement until it has been determined in such arbitration proceeding that the other party materially breached
this Agreement, and the breaching party fails to cure such breach within ninety (90) days after the conclusion of such arbitration proceeding. 
  
 11.3 Licensee shall have the right to terminate this Agreement either in its entirety or as to any jurisdiction or any part of the Licensed Patent
Rights or Licensed Patents upon 
  

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 sixty (60) days written notice. If Licensee does so, it shall submit all required reports and make all required payments
in accordance with Paragraph 8.2 
  
 11.4 [deleted]

  
 11.5 Notwithstanding anything herein to the contrary,
in the event of any termination or expiration of the term of this Agreement, Licensee shall have the right to use or sell Licensed Products on hand on the date of such termination or expiration and to complete Licensed Products in the process of
manufacture at the time of such termination or expiration and use or sell the same. 
  
 11.6 Licensee shall have the right to dispose of its existing inventory, whether completed or in the process of manufacture, for a period of two (2) months after termination. 
  
 11.7 Termination of this Agreement for any reason shall not release
any party hereto from any liability which, at the time of such termination, has already accrued to the other party or which is attributable to a period prior to such termination, nor preclude either party from pursuing any rights and remedies it may
have hereunder or at law or in equity which accrued or are based upon any event occurring prior to such termination. 
  
 11.8 Paragraphs 4.2, 8.2 (if Paragraph 11.2 applies), 11.2, 11.4, 11.5 and Articles 8, 9, 13, 14 and 15 of this Agreement shall survive termination
of this Agreement for any reason. 
  
 ARTICLE 12 

 
 WARRANTIES AND NEGATION OF 
 WARRANTIES, IMPLIED LICENSES AND AGENCY 
  
 12.1 AZM represents and warrants that it executed an exclusive license to the Licensed Patent Rights listed in Exhibit A, which Caltech represented
were solely owned by Caltech, and executed an exclusive license to Caltech’s ownership interests in the Licensed Patent Rights listed in Exhibits B and C, which Caltech represented are jointly owned by Caltech and other parties. 
  

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 12.3 AZM represents and warrants it has the right to grant the rights and licenses granted herein.

  
 12.4 Nothing in this Agreement shall be construed as:

  
 (a) a representation or warranty of
AZM as to the validity or scope of Licensed Patent Rights or any claim thereof; or 
  
 (b) a representation or warranty that any Licensed Product is or will be free from infringement of rights of third parties (except
to the extent that Paragraph 12.3 constitutes a representation and warranty that Licensed Products will not infringe rights of third parties in the Licensed Patent Rights); or 
  
 (c) an obligation to bring or prosecute actions or suits against third parties for infringement;

  
 (d) conferring by implication,
estoppel or otherwise, any license or rights under any patents of AZM other than Licensed Patent Rights, regardless of whether such other patents are dominant or subordinate to Licensed Patent Rights; 
  
 (e) a representation or warranty of Caltech’s
ownership interest in the Licensed Patent Rights. 
  
 12.5
AZM MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ASSUMES NO RESPONSIBILITIES WHATEVER WITH RESPECT TO THE USE, SALE, OR OTHER DISPOSITION BY LICENSEE OF LICENSED PRODUCT (S). 
  
 12.6 AZM and Licensee are independent parties in this Agreement.
Accordingly, there is no agency relationship between AZM and Licensee under this Agreement with respect to any products made or sold, or any methods used, by Licensee under this Agreement. 
  

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 ARTICLE 13 
  
 ARBITRATION 
  
 13.1 Any controversy or claim arising out of or related to the parties’ obligations under this Agreement, or the breach thereof, shall be
settled by arbitration conducted in the State of Arizona and, except as otherwise provided in this Paragraph 13.1, shall be conducted in accordance with the Commercial Arbitration Rules of the American Arbitration Association. Discovery shall be
permitted as set forth in the Federal Rules of Civil Procedure with respect to the performance by the Parties of their obligations under this Agreement and such other matters as the arbitrators may determine (it being the intent of the Parties that
full discovery occur with respect to salient facts). Judgment upon an award rendered by the Arbitrator may be entered in any court having jurisdiction thereof. 
  

ARTICLE 14 
  
 PRODUCT LIABILITY 
  
 14.1 Licensee agrees that AZM and Caltech shall have no liability to Licensee or to any purchasers or users of Licensed Products made or sold by Licensee for any claims, demands, losses, costs, or damages
suffered by Licensee, or purchasers or users of such Licensed Products, or any other party, which may result from personal injury, death, or property damage related to the manufacture, use, or sale of such Licensed Products (“Claims”).
Licensee agrees to defend, indemnify, and hold harmless AZM, Caltech, their trustees, officers, agents, and employees from any such Claims, provided that (i) Licensee is notified promptly of any Claims, (ii) Licensee has the sole right to control
and defend or settle any litigation within the scope of this indemnity, and (iii) all indemnified parties cooperate to the extent necessary in the defense of any Claims. 
  
 14.2 At such time as Licensee begins to sell or distribute Licensed Products (other than for the purpose of obtaining
regulatory approvals), Licensee shall at its sole expense, procure and maintain policies of comprehensive general liability insurance in amounts not less than $2,000,000 per incident and $2,000,000 in annual aggregate and naming those indemnified
under Paragraph 14.1 as additional insureds. Such comprehensive general liability insurance shall provide (i) product liability coverage and (ii) broad form contractual liability coverage for Licensee’s indemnification under Paragraph 14.1. In
the event the aforesaid product liability 
  

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 coverage does not provide for occurrence liability, Licensee shall maintain such comprehensive general liability
insurance for a reasonable period of not less than five (5) years after it has ceased commercial distribution or use of any Licensed Product. 
  
 14.3 Licensee shall provide AZM with written evidence of such insurance upon request of AZM. Licensee shall provide AZM with notice at least
fifteen (15) days prior to any cancellation, non-renewal or material change in such insurance, to the extent Licensee receives advance notice of such matters from its insurer. If Licensee does not obtain replacement insurance providing comparable
coverage within sixty (60) days following the date of such cancellation, non-renewal or material change, AZM shall have the right to terminate this Agreement effective at the end of such sixty (60) day period without any additional waiting period;
provided that if Licensee uses reasonable efforts but is unable to obtain the required insurance at commercially reasonable rates, AZM shall not have the right to terminate this Agreement, and AZM instead shall cooperate with Licensee to either
grant a waiver of Licensee’s obligations under this Article or assist Licensee in identifying a carrier to provide such insurance or in developing a program for self-insurance or other alternative measures. The previous Article shall survive
the expiration or termination of this Agreement. 
  
 ARTICLE 15

  
 MISCELLANEOUS 
  
 15.1 Licensee agrees that it shall not use the name of Caltech, or
California Institute of Technology, AZM, or Arizona Microsystems in any advertising or publicity material, or make any form of representation or statement which would constitute an express or implied endorsement by Caltech or AZM of any Licensed
Product, and that it shall not authorize others to do so, without first having obtained written approval from AZM or Caltech, except as may be required by governmental law, rule or regulation. 
  
 15.2 Licensee agrees to mark the appropriate U.S. patent number or
numbers on all Licensed Products made or sold in the United States in accordance with all applicable governmental laws, rules and regulations, and to require its Sublicensees to do the same. 
  
 15.3 This Agreement sets forth the complete agreement of the parties
concerning the subject matter hereof. No claimed oral agreement in respect thereto shall be considered as any 
  

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 part hereof. No waiver of or change in any of the terms hereof subsequent to the execution hereof claimed to have been
made by any representative of either party shall have any force or effect unless in writing, signed by duly authorized representatives of the parties. 
  
 15.4 This Agreement shall be binding upon and inure to the benefit of any successor or assignee of AZM. This Agreement is not assignable by
Licensee without the prior written consent of AZM and any such attempt will render the assignment void, except that Licensee may assign this Agreement without the prior written consent of AZM, to any Related Company, or any successor of, or
purchaser of a substantial part of the assets of, the business to which this Agreement pertains. Any permitted assignee shall succeed to all of the rights and obligations of Licensee under this Agreement. 
  
 15.5 This Agreement is subject in all respects to the laws and
regulations of the United States of America, including the Export Administration Act of 1979, as amended, and any regulations thereunder. 
  
 15.6 Licensee agrees that a Licensed Product which embodies a patented invention or is produced through the use thereof for sale in the United
States shall be manufactured substantially in the United States to the extent required by 35 U.S.C. Section 204. 
  
 15.7 This Agreement shall be deemed to have been entered into in Arizona and shall be construed and enforced in accordance with Arizona law.

  
 15.8 Any notice or communication required or permitted
to be given or made under this Agreement shall be addressed as follows: 
  

	 	AZM:	Arizona Microsystems, L.L.C. 

	 	    	9030 S. Rita Road, Ste 1100 

	 	    	Tucson, Arizona 85747 

	 	    	Attn: President 

	 	    	Fax No: 

  

 -17- 

	 	Licensee:	Lumera Corporation 

	 	    	P.O. Box 3008 

	 	    	19910 North Creek Parkway 

	 	    	Bothell, WA 98011-3008 

	 	    	Attn: President 

	 	    	Fax No: 

  
 Either party may notify the other in writing of a change of address or fax number, in which event any subsequent communication relative to this Agreement shall be sent to the last said notified address or number,
provided, however, that the parties shall deliver all material notices under this Agreement by registered mail or overnight delivery service. All notices and communications relating to this Agreement shall be deemed to have been given when received.

  
 15.9 Nothing in this Agreement will impair
Licensee’s right to independently acquire, license, develop for itself, or have others develop for it, intellectual property and technology performing similar functions as the Caltech Technology or to market and distribute products other than
Licensed Products based on such other intellectual property and technology. 
  
 15.10 NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY. 
  
 15.11 AZM shall indemnify, defend and hold harmless Licensee from and
against any and all losses, damages, costs and expenses (including attorneys’ fees) arising out of a material breach by AZM of its representations and warranties (“Claims”), provided that (i) AZM is notified promptly of any Claims,
(ii) Licensee has the sole right to control and defend or settle any litigation within the scope of this indemnity, and (iii) all indemnified parties cooperate to the extent necessary in the defense of any Claims. Licensee shall indemnify, defend
and hold harmless AZM, its trustees, officers, agents and employees from and against any and all losses, damages, costs and expenses (including attorneys’ fees) arising out of sale of Licensed Products by Licensee, but not involving or relating
to a material breach by AZM of its representations and warranties. 
  

 -18- 

 15.12 Neither party shall lose any rights hereunder or be liable to the other party for damages or
losses (except for payment obligations) on account of failure of performance by the defaulting party if the failure is occasioned by war, strike, fire, Act of God, earthquake, flood, lockout, embargo, governmental acts or orders or restrictions,
failure of suppliers, or any other reason where failure to perform is beyond the reasonable control and not caused by the negligence or intentional conduct or misconduct of the nonperforming party, and such party has exerted all reasonable efforts
to avoid or remedy such force majeure; provided, however, that in no event shall a party be required to settle any labor dispute or disturbance. 
  
 15.13 In the event that any provisions of this Agreement are determined to be invalid or unenforceable by a court of competent jurisdiction, the
remainder of the Agreement shall remain in full force and effect without said provision. The parties shall in good faith negotiate a substitute clause for any provision declared invalid or unenforceable, which shall most nearly approximate the
intent of the parties in entering this Agreement. 
  
 15.14
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 
  
 15.15 The headings of the several Paragraphs are inserted for convenience of reference only and are not intended to
be a part of or to affect the meaning or interpretation of this Agreement. 
  
 15.16 Whenever provision is made in this Agreement for either party to secure the consent or approval of the other, that consent or approval shall not unreasonably be withheld or delayed, and whenever in this
Agreement provisions are made for one party to object to or disapprove a matter, such objection or disapproval shall not unreasonably be exercised. 
  
 15.17 NOTWITHSTANDING ANY OTHER PROVISION, THIS AGREEMENT IS MADE AND THE EXCLUSIVE LICENSES IN THE FIELD GRANTED AS SUBLICENSES PURSUANT TO THE
CALTECH LICENSE, HENCE SUBJECT TO ANY LIMITATIONS AND RESPONSIBILITIES ON AZM OR SUBSEQUENT SUBLICENSEES CONTAINED THEREIN. 
  

 -19- 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed: 
  

									
	 Date:
4/6/04                    
	 	 	 	ARIZONA MICROSYSTEMS (AZM)
					
	 	 	 	 	 	 	 By:
	 	 /s/    Alex Mautner

	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Alex Mautner
	 	 	 	 	 	 	 Title:
	 	President

  

									
	 Date:
3/31/03                    
	 	 	 	LUMERA (LICENSEE)
					
	 	 	 	 	 	 	 By:
	 	 /s/    Tom Mino

	 	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 Name:
	 	Tom Mino
	 	 	 	 	 	 	 Title:
	 	President

  

 -20- 

 EXHIBIT A 
 CALTECH/JPL PATENTS 
  
 1. US Patent No.
5,255,428 entitled “Electrooptic Polymer Voltage Sensor and Method of Manufactuer Thereof,” A. Gottsche and J.W. Perry, Caltech ID# 2077 
  

 -21- 

 EXHIBIT B 
 CALTECH/UNIVERSITY OF ARIZONA PATENTS 
  

									
	Caltech
ID #

	  	 Appl. Serial #/
 Issued Patent #

	  	Date

	  	 Title

	  	 Inventors

	2634	  	09/078,211
6,090,332	  	5/13/1998
7/18/2000	  	 Process of Changing the Refractive Index of a Composite Containing a Polymer and a Compound Having Large Dipole Moment and Polarizability and
Applications Thereof
	  	 Bernard Kippelen—UA
 Seth R.
Marder
 Boris Volodin—UA
 Nasser
Peyghambarian—UA
 Derek Steele—UA
 Eric
Hendrickx—UA/Leuven?

					
	2634-D1	  	09/577,314
6,402,994	  	5/24/2000	  	Thermally Stable Molecules with Large Dipole Moments and Polarizabilities and Applications Thereof	  	 Bernard Kippelen—UA
 Seth R.
Marder
 Boris Volodin—UA
 Eric Hendrickx—
UA/Leuven?
 Nasser Peyghambarian—UA

  

 -22- 

 EXHIBIT C 
  

CALTECH/DUPONT PATENTS 
  

									
	Caltech
ID #

	  	 Appl. Serial #/
 Issued Patent #

	  	Date

	  	 Title

	  	 Inventors

	2163-1A	  	 08/918,653
 5,804,101
	  	8/22/1997
9/8/1998	  	Nonlinear Optical Materials with Reduced Aromaticity and Bond Length Alternation	  	 Lap-Tak Cheng—DUPONT
 Seth R.
Marder

					
	2163-2	  	 08/456,808
 5,670,091
	  	6/1/1995
9/23/1997	  	 Non-Linear Optical Material with Reduced Aromaticity and Bond Length Alternation
	  	 Lap-Tak Cheng—DUPONT
 Seth R.
Marder

					
	2163-3	  	 08/456,547
 5,670,090
	  	6/1/1995
9/23/1997	  	 Non-Linear Optical Material with Reduced Aromaticity and Bond Length Alternation
	  	 Lap-Tak Cheng—DUPONT
 Seth R.
Marder

					
	2267	  	 08/225,582
 5,500,156
	  	4/11/1994
3/19/1996	  	Unsymmetrical Squaraines for Nonlinear Optical Materials	  	 Chin-Ti Chen
 Lap-Tak Cheng—DUPONT

Seth R. Marder

  

 -23- 

 EXHIBIT D 
  
 PATENT COSTS TO DATE FOR EXHIBITS A, B AND C 
  
 Exhibit A 
  

				
	 1. US Patent No. 5,225, 428
	  	$	1,000
		
	 Exhibit B
	  	 	 
	 1. US Patent 6,090,332
	  	$	18,526.89
	 2. US Patent 6,402,994
	  	$	6,072,04
		
	 Exhibit C
	  	 	 
	 1. US Patents 5,804,101; 5,670,091 and 5,670,090
	  	$	2329.15
	 2. US Patent 5,500,156
	  	$	495

  
  
  

 -24-

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