EXHIBIT 10.16
LICENSE AGREEMENT
By and Between: Xxxxxxx Xxxxx, Israel Citizen, of 14 Ganei Binyamina, Binyamina
30 500, ISRAEL, hereinafter, "LICENSOR";
And IRVINE SENSORS CORPORATION, A Corporation of the State of Delaware, of 0000
Xxxxxxx Xxxxxx, Xxxxxxxx 000, Xxxxx Xxxx, Xxxxxxxxxx 00000, hereinafter,
"LICENSEE";
WHEREAS
1. LICENSOR has developed and is the owner of an invention related to
electronic photography, which is described and claimed in U.S. Patents
5,282,040 & 5,452,000; U.K. National Phase of European Patent
Application 00000000.4 and Japanese Patent Application 4-511948;
2. LICENSEE wishes to obtain an exclusive license to develop, manufacture
and sell products produced using the aforesaid invention;
NOW, THEREFORE, IT IS AGREED BETWEEN THE PARTIES AS FOLLOWS:
1. DEFINITIONS
a. TERRITORY - The entire world.
b. LICENSOR PATENTS - U.S. Patents 5,282,040 & 5,452,000; U.K.
National Phase of European Patent Application 00000000.4 and Japanese
Patent Application 4-511948 and any patents granted thereon as well as
any other applications filed in the past or the future relating to the
subject matter thereof, improvements thereto and modifications thereof
to the extent developed by LICENSOR, as well as all extensions,
continuations, continuations in part, divisions and reissues thereof.
c. LICENSED PRODUCTS - products which are covered by LICENSOR
PATENTS in force at the time of manufacture, sale or use of the
products.
d. DATE OF AGREEMENT - The date on which the last of the
parties hereto signs this agreement.
x. XXXXX SALES PRICE - The arm's length price at which the
LICENSED PRODUCTS are sold by LICENSEE to third parties, less excise
taxes, sales taxes, separately invoiced shipping and import duties and
actual returns.
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2. GRANT OF EXCLUSIVE LICENSE
Subject to fulfillment of all of the conditions set forth
hereinbelow, LICENSOR hereby grants to LICENSEE an exclusive license
for the TERRITORY to make, use, lease, sell or otherwise commercialize
LICENSED PRODUCTS. This license is subject to sublicense, provided that
LICENSEE shall remain liable for all obligations to LICENSOR.
3. PAYMENTS TO LICENSOR
In consideration of the aforesaid LICENSE GRANT and as a
condition of its continuation in force, LICENSEE shall make the
following payments to LICENSOR:
1. An initial non-refundable payment upon execution
of this Agreement of thirty thousand (30,000) shares of the common
stock of LICENSEE which is traded on NASDAQ, said shares to be included
in a registration statement to be filed with the U.S. Securities and
Exchange Commission (SEC) at the earliest practical time, presently
estimated to be within thirty (30) days of the date hereof, said shares
to have a value of at least $US30, 000 on the date of execution of this
License Agreement;
2. A non-refundable payment of $US35, 000.00 to Elbit
Systems Ltd. as per the assignment document set forth in Annex A
hereto; and
3. In respect of each LICENSED PRODUCT sold by
LICENSEE or any sublicensee, royalties as follows:
3% (Three Percent) of the GROSS SALES PRICE
of LICENSED PRODUCTS for sales of LICENSED PRODUCTS of up to $US50
million per calendar year; and
1% (One Percent) of the GROSS SALES PRICE of
LICENSED PRODUCTS for sales of LICENSED PRODUCTS in excess of $US50
million per calendar year.
The royalty payments under this subparagraph
will be paid twice a year, one month following both June 30 and
December 31 of each year, in respect of the proceeding six month
calendar period.
LICENSEE will provide LICENSOR before
February 1 of each year with a full statement of all LICENSED PRODUCTS
which were sold prior to January 1 of such year and at the same time
will pay the balance of the royalties due for all LICENSED PRODUCTS
sold. The statement will be certified by LICENSEE'S auditor.
C. C. LICENSEE'S records relating to the LICENSED PRODUCTS will be
available for inspection on behalf of LICENSOR by an independent firm
of certified auditors. Such inspections shall not take place more often
than once per period of three months. If an error of more than ten
percent is found, LICENSEE will pay the cost of such audit.
4. WARRANTIES
LICENSOR declares and warrants that it is the sole and
registered owner, free and clear of any and all liens, claims, royalty
obligations, licenses, encumbrances, security interests or other rights
granted to third parties, of presently existing LICENSOR PATENTS and
the underlying technology.
LICENSOR warrants that there is no legal impediment limiting
his right to enter into this Agreement and carry out its obligations
pursuant thereto.
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5. PATENTS
All costs incurred subsequent to June 1, 1997 in the
maintenance and prosecution of the LICENSED PATENTS shall be borne by
LICENSEE and shall be promptly paid upon presentation of an invoice by
LICENSOR'S patent attorney.
6. DURATION AND TERMINATION
A. This Agreement shall come into force upon execution thereof by both
parties hereto and shall remain in force for the duration of the last
to expire LICENSOR PATENT.
B. This Agreement may be terminated immediately by LICENSOR upon
occurrence of any of the following circumstances:
1. If any payment payable pursuant to paragraph 3 herein shall
be in arrears and shall remain unpaid 90 days following written notice
to LICENSEE that the date established for such payment has passed; or
2. If LICENSEE shall commit or allow to be committed a breach
of any of the terms and conditions thereof and shall fail to make good
such breach within thirty days of receipt of notice in writing from
LICENSOR to make good such breach.
3. If LICENSEE shall fail to pay minimum royalties as set
forth in Annex B hereto.
7. NOTICES
All notices hereby required or authorized to be given by any
party to the other shall be given by letter sent by air mail registered
post or delivered by hand to the address of the other party hereinabove
shown, provided that notice by letter delivered by hand shall be deemed
to have been received on the next following business day and notice by
air mail registered post shall be deemed to have been received ten days
following the date of posting.
8. GOVERNING LAW AND JURISDICTION
This Agreement shall be governed by and construed in
accordance with the laws of the State of California, USA.
9. PRIOR AGREEMENTS
This Agreement supersedes all prior agreements, oral or
written, between the parties or their legal predecessors with respect
to the LICENSED PRODUCTS.
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10. FINAL STIPULATIONS
A. If any of the conditions mentioned in this Agreement should turn out
to be void, this will have no bearing on the legality of the other
conditions of this Agreement.
B. This Agreement supersedes any prior written agreement or undertaking
made by the parties or their principals or representatives.
IN WITNESS WHEROF the parties have hereunto affixed their hands and
seals the day and year first hereinabove mentioned.
/s/ X. Xxxxx /s/ Xxxx X. Xxxxxx, Xx.
----------------------------- ----------------------------
LICENSOR LICENSEE
Date: 10-7-97 Irvine Sensors Corporation
-------------- Xxxx X. Xxxxxx, Xx.
Chief Financial Officer
Date: 10/6/97
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ANNEX B
MINIMUM ROYALTIES
LICENSOR may terminate this Agreement as provided under Section 5,
subsection 3 should the following cumulative minimum royalties not be paid to
LICENSOR by the dates indicated herein- below:
December 31, 1998 $US10,000.00
December 31, 1999 $US110,000.00
December 31, 2000 $US210,000.00
December 31, 2001 $US310,000.00
Satisfaction of this royalty obligation relates solely to payment of
royalties to LICENSOR whether or not such royalties have been earned.
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