Exhibit 10.4
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PATENT LICENSE AGREEMENT
THIS Agreement is between Xxxx Xxxxxxx ("Licensor"), whose address is 0000 Xxx
Xxxxx Xxxxxxxx, Xxx Xxxxx, Xxxxxxxxx 00000, and ASI Technology Corporation, a
Nevada corporation having a principal place of business located at 000 Xxxxxxxx
Xxxxxxx Xxxxx, Xxxxx #000, Xxxxxxxxx, Xxxxxx 00000 ("Licensee").
RECITALS
A. Licensor owns certain Patent Rights and Technology Rights related to
Licensed Subject Matter, which were invented by Licensor.
B. Licensor has authorized Licensee to begin to develop the Patent Rights
and Technology Rights.
C. Licensee has obtained a government contract to support development of
the Patent Rights and Technology Rights for decontamination of
equipment and facilities and Licensee has employed Licensor as a
consultant related to this contract.
D. Licensor desires to have the Licensed Subject Matter developed and used
for a variety of commercial and government applications for the benefit
of Licensee and Licensor.
E. Licensee wishes to now formalize a license from Licensor to practice
and commercialize Licensed Subject Matter.
NOW, THEREFORE, in consideration of the mutual covenants and premises herein
contained, the parties agree as follows:
1. EFFECTIVE DATE
This Agreement is effective January 1, 2003 ("Effective Date").
2. DEFINITIONS
As used in this Agreement, the following terms have the meanings indicated:
2.1 "Affiliate" means any business entity more than 50% owned by Licensee,
any business entity which owns more than 50% of Licensee, or any
business entity that is more than 50% owned by a business entity that
owns more than 50% of Licensee.
2.2 "Licensed Field(s)" means the fields of [***].
2.3 "Licensed Product" means any product, system, device or apparatus sold
by Licensee comprising Licensed Subject Matter pursuant to this
Agreement.
2.4 "Licensed Subject Matter" means inventions and discoveries covered by
Patent Rights or Technology Rights within the Licensed Fields.
2.5 "Licensed Territory" means worldwide.
2.6 "Net Sales" means the gross revenues actually received by Licensee from
the Sale of Licensed Products less sales and/or use taxes actually
paid, import and/or export duties actually paid, outbound
transportation prepaid or allowed, and amounts allowed or credited due
to returns (not to exceed the original billing or invoice amount).
2.7 "Patent Rights" means Licensor's rights in information or discoveries
claimed by U.S. patent # 6,232,723 and subsequent patent applications
based thereon ("Improvements"), including all divisions, continuations,
continuations-in-part, reissues, reexaminations or extensions thereof,
and any letters patent that issue thereon, whether foreign or domestic,
except as any such is excluded such as under Section 13 of this
Agreement.
2.8 "Sale or Sold" means the transfer or disposition of a Licensed Product
for value to a party other than Licensee. The terms "sale" and "sold"
include without limitation leases and other transfers and similar
transactions.
2.9 "Technology Rights" means Licensor's rights in technical information,
know-how, processes, procedures, compositions, devices, methods,
formulas, protocols, techniques, software, designs, drawings or data
created by Inventor which are not covered by Patent Rights but which
are necessary for practicing the invention(s) covered by Patent Rights.
3. WARRANTY: SUPERIOR-RIGHTS
3.1 Licensor represents and warrants his belief that (i) he is the owner of
the entire right, title, and interest in and to U.S. Patent #
6,232,723, (ii) he has the sole right to grant licenses thereunder, and
(iii) he has not granted licenses thereunder to any other entity that
would restrict rights granted to Licensee.
3.2 Licensor represents that U.S. Patent # 6,232,723 has not been developed
under any funding agreement with the Government of the United States of
America and that he has not granted the Government any rights relative
thereto.
3.3 Licensee understands and acknowledges that Licensor, by this Agreement,
makes no representation as to the operability or fitness for any use,
safety, efficacy, ability to obtain regulatory approval, patentability,
or breadth of the Licensed Subject Matter. Licensor makes no
representation as to whether there are any patents now held, or which
will be held, by others in the Licensed Field, nor does Licensor make
any representation that the inventions contained in Patent Rights do
not infringe any other patents now held or that will be held by others.
4. LICENSE
4.1 Licensor hereby grants to Licensee a royalty-bearing, exclusive license
under Patent Rights and Technology Rights to make, have made, use,
import, sell and offer to sell, and have sold Licensed Products within
the Licensed Territory for use within Licensed Field with the right to
sublicense to others. This grant is subject to the payment by Licensee
to Licensor of all consideration as provided herein, and is further
subject to rights retained by Licensor to:
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a. Publish the general scientific findings from research related
to Licensed Subject Matter subject to the terms of Section 12,
Confidential Information; and
b. Use Licensed Subject Matter for research, teaching and other
education-related purposes.
4.2 Licensee may extend the license granted herein to any Affiliate if the
Affiliate consents to be bound by this Agreement to the same extent as
Licensee.
4.3 Licensee may grant sublicenses consistent with this Agreement.
5. PAYMENTS AND REPORTS
5.1 In consideration of rights granted by Licensor to Licensee under this
Agreement, Licensee will pay Licensor the following:
a. A non-refundable initial license fee to cover patent costs to
date in the amount of [***] due and payable within 15 days of
when this Agreement is executed by Licensee, and
b. A running royalty equal to [***] of Net Sales for Licensed
Products Sold under this Agreement.
5.2 In consideration of rights granted by Licensor to Licensee under this
Agreement, Licensee further agrees to pay Licensor the following after
the execution of a sublicense hereunder:
a. Within 30 days after the execution of the sublicense, a
sublicense fee of [***] of any up-front payment made to
Licensee in consideration of the sublicense, excluding funds
paid to Licensee for NRE or research and development or
similar purposes;
b. [***] of the gross revenue royalty payments received by
Licensee on sales of Licensed Products from any sublicensee.
5.3 During the Term of this Agreement and for 1 year thereafter, Licensee
agrees to keep complete and accurate records of its and its
sublicensees Sales and Net Sales of Licensed Products under the license
granted in this Agreement in sufficient detail to enable the royalties
payable hereunder to be determined. Licensee agrees to permit Licensor
or its representatives, at Licensor's expense, to periodically examine
its books, ledgers, and records during regular business hours for the
purpose of and to the extent necessary to verify any report required
under this Agreement. If the amounts due to Licensor are determined to
have been underpaid, Licensee will pay the cost of the examination and
accrued interest at the lesser of 12% or the highest allowable rate.
5.4 Within 30 days after March 31, June 30, September 30, and December 31,
beginning immediately after the first calendar quarter that royalties
are due after the Effective Date, Licensee must deliver to Licensor a
true and accurate written report, giving the particulars of the
business conducted by Licensee and its sublicensee(s), if any exist,
during the preceding three calendar months under this Agreement as are
pertinent to calculating payments hereunder. This report will include
at least:
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a. the quantities of Licensed Subject Matter that it has
produced;
b. the total gross Sales;
c. the total Net Sales;
d. the calculation of royalties thereon; and
e. the total royalties computed and due Licensor.
Simultaneously with the delivery of each report, Licensee must pay to
Licensor the amount, due for the period of each report.
5.5 On or before each anniversary of the Effective Date upon 30 day advance
written request of Licensor, Licensee shall deliver to Licensor a
progress report as to Licensee's (and any sublicensee's) efforts and
accomplishments during the preceding year in diligently commercializing
Licensed Subject Matter in the Licensed Territory and Licensee's (and,
if applicable, sublicensee's) commercialization plans for the upcoming
year.
6. TERM AND TERMINATION
6.1 The Term of this Agreement is from the Effective Date to the greater of
either the full end of the term or terms for which Patent Rights have
not expired or for a minimum term of 15 years.
6.2 Any time after 3 years from the Effective Date, Licensor has the right
to terminate the exclusivity of this license in the Licensed Territory
if Licensee, within 90 days after receiving written notice from
Licensor of intended termination of exclusivity, fails to provide
reasonably satisfactory written evidence that Licensee or its
sublicensees has reasonably and continually attempted to sell Licensed
Products.
6.3 The following definitions apply to this Article 6: (i) "Commercialize"
means having Sales of Licensed Products; and (ii) "Active attempts to
commercialize" means having Sales of Licensed Products or an effective,
ongoing and active research, development, manufacturing, marketing or
sales program as appropriate, directed toward obtaining regulatory
approval, production or Sales of Licensed Products in any jurisdiction,
and plans to commercialize licensed inventions.
6.4 This Agreement will earlier terminate:
a. automatically if Licensee becomes bankrupt or insolvent and/or
if the business of Licensee is placed in the hands of a
receiver, assignee, or trustee, whether by voluntary act of
Licensee or otherwise; or
b. upon 60 days written notice from Licensor if Licensee breaches
or defaults on its obligation to make payments (if any are
due) or reports, in accordance with the terms of Article 5,
unless, before the end of the 60 day period, Licensee has
cured the default or breach and so notifies Licensor, stating
the manner of the cure; or
c. upon 90 days written notice if Licensee breaches or defaults
on any other obligation under this Agreement, unless, before
the end of the 90 day period, Licensee has cured the default
or breach and so notifies Licensor, stating the manner of the
cure; or
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d. at any time by mutual written agreement between Licensee and
Licensor subject to any terms herein which survive
termination; or
e. under the provisions of Paragraph 6.2 if invoked.
6.5 If this Agreement is terminated for any cause:
a. nothing herein will be construed to release either party of
any obligation matured prior to the effective date of the
termination;
b. after the effective date of the termination, Licensee may sell
all Licensed Products and parts therefor it has on hand at the
date of termination, if it pays earned royalties thereon
according to the terms of Article 5; and
c. Licensee will be bound by the provisions of Articles 10
(Indemnification), 11 (Use of Inventor's Name), and 12
(Confidential Information) of this Agreement.
7. INFRINGEMENT BY THIRD PARTIES
7.1 Licensee, at its expense, may enforce any patent exclusively licensed
hereunder against infringement by third parties and it is entitled to
retain recovery from such enforcement. Licensee shall pay Licensor a
royalty on any monetary recovery if the monetary recovery is for
damages, including punitive damages of any type, or a reasonable
royalty in lieu thereof. If Licensee does not file suit against a
substantial infringer of a patent within 6 months of knowledge thereof,
then Licensor may enforce any patent licensed hereunder on behalf of
itself and Licensee, Licensor retaining all recoveries from such
enforcement.
7.2 In any infringement suit or dispute, the parties agree to cooperate
fully with each other. At the request and expense of the party bringing
suit, the other party will permit access to all relevant personnel,
records, papers, information, samples, specimens, etc., during regular
business hours.
8. ASSIGNMENT
This Agreement may be assigned by Licensee with the prior written consent of
Licensor, which will not be unreasonably withheld.
9. PATENT MARKING
\
Licensee must permanently and legibly xxxx all products and documentation
manufactured or sold by it under this Agreement with a patent notice as may be
permitted or required under Xxxxx 00, Xxxxxx Xxxxxx Code.
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10. INDEMNIFICATION
Licensee agrees to hold harmless and indemnify Licensor, from and against any
claims, demands, or causes of action whatsoever, including without limitation
those arising on account of any injury or death of persons or damage to property
caused by, or arising out of, or resulting from, the exercise or practice of the
license granted hereunder by Licensee, its Affiliates or their officers,
employees, agents or representatives.
11. USE OF INVENTOR'S NAME
Licensee may use the name and likeness of Inventor (the "Licensor") to promote
the Licensed Products, Patent Rights or Technology Rights. Inventor shall be
provided copies of such promotional materials for review and comment in advance
of such use by Licensee, and may deny the use of his name and likeness in any
material which he reasonably believes is not appropriate.
12. CONFIDENTIAL INFORMATION, PUBLICATION AND NON-COMPETITION
12.1 Licensor and Licensee each agree that all information contained in
documents marked "confidential" and forwarded to one by the other are
to be (i) received in strict confidence, (ii) used only for the
purposes of this Agreement, and (iii) not disclosed by the recipient
party, its agents or employees without the prior written consent of the
other party, except to the extent that the recipient party can
establish competent written proof that such information:
a. was in the public domain at the time of disclosure;
b. later became part of the public domain through no act or
omission of the recipient party, its employees, agents,
successors or assigns;
c. was lawfully disclosed to the recipient party without an
obligation of confidentiality by a third party having the
right to so disclose it;
d. was already known by the recipient party at the time of
disclosure and not under an obligation of confidentiality;
e. was independently developed by the recipient party; or
f. is required by law or regulation to be disclosed.
12.2 Each party's obligation of confidence hereunder shall be fulfilled by
using at least the same degree of care with the other party's
confidential information as it uses to protect its own confidential
information of a similar nature, which shall not be less than a
reasonable degree of care. This obligation shall exist while this
Agreement is in force and for a period of 2 years thereafter.
12.3 Licensor will submit any manuscript for any proposed publication of
research related to Licensed Subject Matter to Licensee at least 30
days before publication, and Licensee shall have the right to review
and comment upon the publication in order to protect Licensee's
confidential information. Upon Licensee's reasonable request,
publication will be delayed
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up to 60 additional days to enable Licensee to secure adequate
intellectual property protection of Licensee's property that would be
affected by the publication.
12.4 Licensor acknowledges that the pursuit of the activities forbidden by
this Article 12.4 might impermissibly make use of the exclusively
licensed Patent Rights or Technology Rights but that proof of such
breach of Licensee's exclusivity by Licensor may be extremely difficult
to prevent or detect. To forestall such breach, and in consideration of
this Agreement, Licensor agrees that during the term of this Agreement
he shall not, for himself or any third party, directly or indirectly
(i) divert or attempt to divert from Licensee any business of any kind
in which it is engaged, including, without limitation, the
inappropriate solicitation of or interference with any of its suppliers
or customers, (ii) employ or solicit for employment any person employed
by ASI for a period of one (1) year thereafter, or (iii) engage in any
business activity that is or may be competitive with ASI as conducted
related to this Agreement.
13. PATENTS AND INVENTIONS
13.1 Licensee shall pay future costs of the prosecution and maintenance of
the issued patent #6,232,723 (and any applications pending as of the
date of this Agreement) which are reasonably necessary to obtain and
maintain a patent. Furthermore, at its election Licensee will pay for
the costs of filing, prosecuting and maintaining foreign counterpart
applications to the issued patent and pending patent applications. If
Licensee elects to not pay for such costs, then such applications and
patents are excluded from the definition of Patent Rights, and are not
licensed to Licensee under this Agreement.
13.2 Licensor shall own all rights to the improvements by Licensee or its
agents. Licensee shall pay future costs of preparation, filling,
prosecuting and maintenance of patents and applications on improvements
made by inventors of Licensee or by Licensor, however, in the event
that Licensee refuses to file patent applications on such improvements
when requested by Licensor, then such improvements are excluded from
the definition of Patent Rights, and are not licensed to Licensee under
this Agreement.
13.3 Preparation and maintenance of patent applications and patents
undertaken at Licensee's cost shall be performed by patent attorneys
reasonably selected by Licensee; and due diligence and care shall be
used in preparing, filling, prosecuting, and maintaining such
applications on patentable subject matter. Licensee may review and
comment on any and all patent related documents.
13.4 Licensee shall have the right to, on thirty (30) days written notice to
Licensor, discontinue payment of its share of the prosecution and/or
maintenance costs of any patents and patent applications. Upon receipt
of such written notice, Licensor shall have the right to continue such
prosecution and maintenance at his own expense in which event this
license shall be automatically revert to nonexclusive as to the subject
matter claimed in said patents and applications.
13.5 Notwithstanding the provisions of this Section, Licensee's obligations
under this Section shall continue only so long as Licensee continues to
have an exclusive license under the Patent Rights and, in the event of
conversion of this License to non-exclusive, after the date of such
conversion:
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a. The costs of subsequent preparation, filing, prosecuting and
maintaining of the licensed patents and patent applications
shall be the responsibility of Licensor, provided such
payments are at the sole discretion of the Licensor ; and
b. Licensee shall have a non-exclusive license without right to
future sublicense under those of such patents and applications
under which Licensee had an exclusive license prior to the
conversion.
14. ALTERNATE DISPUTE RESOLUTION
Any dispute or controversy arising out of or relating to this Agreement, its
construction or its actual or alleged breach will be first taken to mediation.
If the mediation does not result in a resolution of such dispute or controversy,
it will be finally decided by an appropriate method of alternate dispute
resolution, including without limitation, arbitration, conducted in the city of
Las Vegas, Nevada in accordance with the Commercial Dispute Resolution
Procedures [xxxx://xxx.xxx.xxx/xxxxx/xxxxxxxxxx_xxxxx.xxxx] of the American
Arbitration Association. The arbitration panel will include members
knowledgeable in the evaluation of the subject technology. Judgment upon the
award rendered may be entered in the highest court or forum having jurisdiction,
state or federal. The provisions of this Article 14 will not apply to decisions
on the validity of patent claims or to any dispute or controversy as to which
any treaty or law prohibits such arbitration. The decision of the arbitration
must be sanctioned by a court of law having jurisdiction to be binding upon and
enforceable by the parties.
15. GENERAL
15.1 This Agreement constitutes the entire and only agreement between the
parties for Licensed Subject Matter and all other prior negotiations,
representations, agreements, and understandings are superseded hereby.
No agreements altering or supplementing the terms hereof may be made
except by a written document signed by both parties.
15.2 Any notice required by this Agreement must be given by prepaid, first
class, certified mail, return receipt requested, addressed in the case
of Licensor to:
Xxxx Xxxxxxx
0000 Xxx Xxxxx Xxxxxxxx
Xxx Xxxxx, Xxxxxxxxx 00000
or in the case of Licensee to:
Xxxxx X. Xxxxx
ASI Technology Corporation
000 Xxxxxxxx Xxxxxxx Xxxxx, Xxxxx #000
Xxxxxxxxx, Xxxxxx 00000
or other addresses as may be given from time to time under the terms of
this notice provision.
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15.3 Licensee must comply with all applicable federal, state and local laws
and regulations in connection with its activities pursuant to this
Agreement.
15.4 This Agreement will be construed and enforced in accordance with the
laws of the United States of America and of the State of Nevada.
15.5 Failure of Licensor to enforce a right under this Agreement will not
act as a waiver of that right or the ability to later assert that right
relative to the particular situation involved.
15.6 Headings are included herein for convenience only and shall not be used
to construe this Agreement.
15.7 If any part of this Agreement is for any reason found to be
unenforceable, all other parts nevertheless remain enforceable.
IN WITNESS WHEREOF, the parties hereto have executed or caused their duly
authorized representatives to execute this Agreement.
ASI TECHNOLOGY CORPORATION LICENSOR
(Licensee)
000 Xxxxxxxx Xxxxxxx Xxxxx Xxxx Xxxxxxx
Suite 111 0000 Xxx Xxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000 Xxx Xxxxx, XX 00000
By: /s/ XXXXX X. XXXXX By: /s/ XXXX XXXXXXX
------------------ ----------------
Xxxxx X. Xxxxx, President Xxxx Xxxxxxx
1/31/03 1/31/03
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