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patentable, the due dates for the minimum royalty payments owed
to Research II by CemCom would be adjusted to reflect the date
of the exercise of the exclusive license. In order for CemCom
to ascertain the applicability of the new technology to CemCom's
product line and to facilitate its decision as to whether to
exercise the option, the technology transfer agreement provided
CemCom with a "review license" from December 29, 1982, through
June 30, 1984, to use, review, and evaluate each item of new
technology.
If CemCom exercised its option for the exclusive license,
the royalty arrangement would provide Research II with a profit
equal to the difference between the minimum royalty payments and
its deferred obligation to CemCom. CemCom, however, was under
no obligation to exercise its option while Research II was
unconditionally liable to CemCom for the payment of its deferred
obligation.
If CemCom chose not to exercise its option, the technology
transfer agreement obligated CemCom to grant Research II a
nonexclusive perpetual license of the old technology and the
Research I technology necessary and useful in the further
development, manufacture, use, or marketing of the new
technology. In return for the license, Research II would pay
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