PATENT LICENSE AGREEMENT
EXCLUSIVE
Cover Page
Patent License Issued: May 27, 2003
Serial Numbers of Licensed Patents: U.S. Design Patent no. D 475,161
Licensee: Sport Technologies, Inc., of Plant City, Florida
Additional Remarks: Sport Technologies, Inc. intends to be acquired by GloTech
Industries, Inc., of Gainesville, Florida within 30 days of the execution of
this license agreement.
This Patent License Agreement, hereinafter referred to as THE "AGREEMENT,"
consists of this Cover Page, an attached AGREEMENT, a Signature Page, Appendix A
(List of Patent(s) or Patent Application(s)), Appendix B (Fields of Use and
Territory), Appendix C (Royalties), Appendix D (Modifications), Appendix E
(Benchmarks), and Appendix F (Commercial Development Plan). The Parties to this
AGREEMENT are:
1) Xxxx X. Xxxxx ("PDM"), inventor, hereinafter singly referred to as "PDM";
and
2) The person, corporation, or institution identified ABOVE AND/OR ON the
Signature Page, having offices at the address indicated on the Signature
Page, hereinafter referred to as "Licensee,"
1
PATENT LICENSE AGREEMENT--EXCLUSIVE
PDM and LICENSEE agree as follows:
BACKGROUND
----------
1.01 In the course of conducting investigative work and research, PDM made
inventions that may have commercial applicability.
1.02 By assignment of patent rights from US Patent Office, PDM owns
intellectual property rights claimed in any United States and foreign
patent applications or patents corresponding to the assigned
inventions.
1.03 PDM the authority to enter into this Agreement for the licensing of
rights to these inventions.
1.04 PDM desires to transfer these inventions to the private sector through
commercialization licenses to facilitate the commercial development of
products and processes for public use and benefit.
1.05 LICENSEE desires to acquire commercialization rights to certain of
these inventions in order to develop processes, methods, or marketable
products for public use and benefit.
DEFINITIONS
-----------
2.01 "BENCHMARKS" mean the performance milestones that are set forth in
Appendix E.
2.02 "COMMERCIAL DEVELOPMENT PLAN" means the written commercialization plan
attached as Appendix F.
2.03 "FIRST COMMERCIAL SALE" means the initial transfer by or on behalf of
LICENSEE or its sublicensees OF LICENSED PRODUCTS or the initial
practice of a LICENSED PROCESS by or on behalf of LICENSEE or its
sublicensees in exchange for cash or some equivalent to which value
can be assigned for the purpose of determining NET SALES.
2.05 "LICENSED FIELDS OF USE" means the field(s) of use identified in
Appendix B.
2.06 "LICENSED PATENT RIGHTS" shall mean:
a) U.S. patent applications and patents listed in Appendix A, all
divisions and continuations of these applications, all patents
issuing from such applications, divisions, and continuations, and
any reissues, reexaminations, and extensions of all such patents;
b) to the extent that the following contain one or more claims
directed to the invention or inventions disclosed in a) above: i)
continuations-in-part of a) above; ii) all divisions and
continuations of these continuations-in-part; iii) all patents
issuing from such continuations-in-part, divisions, and
continuations; and iv) any reissues, reexaminations, AND
EXTENSIONS OF ALL SUCH PATENTS;
2
c) to the extent that the following contain one or more claims
directed to the invention or inventions disclosed in a) above:
all counterpart foreign applications and patents to a) and b)
above, including those listed in Appendix A.
LICENSED PATENT RIGHTS shall not include b) or c) above to the extent
that they contain one or more claims directed to new matter which is
not the subject matter disclosed in a) above.
2.07 "LICENSED PROCESS(ES)" means processes which, in the course of being
practiced would, in the absence of this AGREEMENT, infringe one or
more claims of the LICENSED PATENT RIGHTS that have not been held
invalid or unenforceable by an unappealed or unappealable judgment of
a court of competent jurisdiction.
2.08 "LICENSED PRODUCT(S)" means tangible materials which, in the course of
manufacture, use, offer to sell, sale, or importation would in the
absence of this Agreement, infringe one or more claims of the LICENSED
PATENT RIGHTS that have not been held invalid or unenforceable by an
unappealed or unappealable judgment of a court of competent
jurisdiction.
2.09 "LICENSED TERRITORY" means the geographical area identified in
Appendix B.
2.10 "NET SALES" means the total gross receipts for sales of LICENSED
PRODUCTS or practice of LICENSED PROCESSES by or on behalf of Licensee
or its sublicensees, and from leasing, renting, or otherwise making
LICENSED PRODUCTS available to others without sale or other
dispositions, whether invoiced or not, less returns and allowances,
packing costs, insurance costs, freight out taxes or excise duties
imposed on the transaction (if separately invoiced), and wholesaler
and cash discounts in amounts customary in the trade to the extent
actually granted. No deductions shall be made for commissions paid to
individuals, whether they be with independent sales agencies or
regularly employed by LICENSEE, or sublicensees, and on its payroll.
or for the cost of collections.
2.11 "PRACTICAL APPLICATION" means to manufacture in the case of a
composition or product, to practice in the case of a process or
method, or to operate in the case of a machine or system: and in each
case, under such conditions as to establish that the invention is
being utilized and that its benefits are to the extent permitted by
law or GOVERNMENT regulations available to the public on reasonable
terms.
2.12 "RESEARCH LICENSE" means a nontransferable, nonexclusive license to
make and to use the LICENSED PRODUCTS or LICENSED PROCESSES as defined
by the LICENSED PATENT RIGHTS for purposes of research and not for
purposes of commercial manufacture or distribution in lieu of
purchase.
GRANT OF RIGHTS
-----------------
3.01 PDM hereby grants and LICENSEE accepts, subject to the terms and
conditions of this AGREEMENT. a nonexclusive license under the
LICENSED PATENT RIGhts in the LICENSED TERRITORY to make and have
made, to use and have used, and to sell and have sold, to offer to
sell, and to import any LICENSED PRODUCTS in the LICENSED FIELDS OF
USE and to practice and have practiced any LICENSED PROCESSES in the
LICENSED FIELDS OF USE.
3
3.02 This AGREEMENT confers no license or rights by implication, estoppel,
or otherwise under any patent applications or patents of PDM other
than LICENSED PATENT RIGHTS regardless of whether such patents are
dominant or subordinate to LICENSED PATENT RIGHTS.
SUBLICENSING
------------
4.01 Upon written approval by PDM, which approval will not be unreasonably
withheld, LICENSEE may enter into sublicensing agreements under the
Licensed Patent Rights.
4.02 LICENSEE agrees that any sublicenses granted by it shall provide that
the obligations to PDM of Paragraph 7.01 9.01, 9.02, 11.05 and
12.07-12.09 of this Agreement shall be binding upon the sublicensee as
if it were a party to this Agreement. LICENSEE further agrees to
attach copies of these Paragraphs to all sublicense agreements.
4.03 Any sublicenses granted by Licensee shall provide for the termination
of the sublicense, or the conversion to a license directly between
such sublicensees and PDM, at the option of the sublicensee, upon
termination of this Agreement under Article 13. Such conversion is
subject to PDM approval and contingent upon acceptance by the
sublicensee of the remaining provisions of this Agreement.
4.04 Licensee agrees to forward to PDM a copy of each fully executed
sublicense agreement postmarked within thirty (30) days of the
execution of such agreement. To the extent permitted by law, PDM
agrees to maintain each such sublicense agreement in confidence.
ROYALTIES AND REIMBURSEMENT
-----------------------------
5.01 LICENSEE agrees to pay to PDM a noncredltable, nonrefundable license
issue royalty as set forth in Appendix C within thirty (30) days from
the date that this AGREEMENT becomes effective.
5.02 LICENSEE agrees to pay to PDM a nonrefundable minimum annual royalty
as set forth in Appendix C. The minimum annual royalty is due and
payable on January 1 of each calendar year and may be credited against
any earned royalties due for sales made in that year. The minimum
annual royalty due for the first calendar year of this AGREEMENT may
be prorated according to the fraction of the calendar year remaining
between the effective date of this AGREEMENT and the next subsequent
January 1.
5.03 LICENSEE agrees to pay PDM earned royalties as set forth in Appendix
C.
5.04 LICENSEE agrees to pay PDM benchmark royalties as set forth in
Appendix C.
5.05 LICENSEE agrees to pay PDM sublicensing royalties as set forth in
Appendix C.
5.06 A claim of a patent or patent application licensed under this
AGREEMENT shall cease to fall within the LICENSED PATENT RIGHTS for
the purpose of computing the minimum annual royalty and earned royalty
payments in any given country on the earliest of the dates that a) the
claim has been abandoned but not continued, b) the patent expires or
irrevocably lapses, or c) the claim has been held to be invalid or
unenforceable by an unappealed or unappealable decision of a court of
competent jurisdiction or administrative agency.
4
5.07 No multiple royalties shall be payable because any LICENSED PRODUCTS
or LICENSED PROCESSES are covered by more than one of the LICENSED
PATENT RIGHTS.
5.08 On sales of LICENSED PRODUCTS by LICENSEE to sublicensees or
affiliated parties or on sales made in other than an arm's-length
transaction, the value of the NET SALES attributed under this Article
6 to such a transaction shall be that which would have been received
in an arm's-length transaction, based on sales of like quantity and
quality products on or about the time of such transaction.
5.09 With regard to expenses associated with the preparation, filing,
prosecution, and maintenance of all patent applications and patents
included within the LICENSED PATENT RIGHTS incurred by PDM prior to
the effective date of this AGREEMENT, LICENSEE shall not be liable to
PDM.
5.10 With regard to expenses associated with the preparation, filing,
prosecution, and maintenance of all patent applications and patents
included within the LICENSED PATENT RIGHTS incurred by PDM on or after
the effective date of this AGREEMENT, PDM, at its sole option, may
require LICENSEE:
(a) To pay PDM on an annual basis, within sixty (60) days of PDM'S
submission of a statement and request for payment, a royalty
amount equivalent to a prorated share of all such patent expenses
incurred during the previous calendar year(s); or
(b) To pay such expenses directly to the law firm employed by PHS to
handle such functions. However, in such event, PHS and not
LICENSEE shall be the client of such law firm.
Under exceptional circumstances, LICENSEE may be given the right to
assume responsibility for the preparation, filing, prosecution, or
maintenance of any patent application or patent included with the
LICENSED PATENT RIGHTS. In that event, licensee shall directly pay the
attorneys or agents engaged to prepare, file, prosecute or maintain
such patent applications or patents and shall provide to PDM copies of
each invoice associated with such services as well as documentation
that such invoices have been paid.
5.11 LICENSEE may elect to surrender its rights in any country of the
LICENSED TERRITORY under any LICENSED PATENT RIGHTS upon sixty (60)
days written notice to PDM and owe no payment obligation under Article
5.10 for patent-related expenses incurred in that country after the
effective date of such written notice.
PATENT FILING, PROSECUTION, AND MAINTENANCE.
------------------------------------------------
6.01 Except as otherwise provided in this Article 6, PDM agrees to take
responsibility for, but to consult with, the Licensee in the
preparation, filing, prosecution, and maintenance of any and all
patent applications or patents included in the Licensed Patent Rights
and shall furnish copies of relevant patent-related documents to
Licensee.
6.02 Upon PDM's written request, Licensee shall assume the responsibility
for the preparation, filing, prosecution, and maintenance of any and
all patent applications or patents included in the Licensed Patent
Rights and shall on an ongoing basis promptly furnish copies of all
patent-related documents to PDM. In such event, Licensee shall,
subject to the prior approval of PDM, select registered patent
5
attorneys or patent agents to provide such services on behalf of
Licensee and PDM. PDM shall provide appropriate powers of attorney and
other documents necessary to undertake such actions to the patent
attorneys or patent agents providing such services. Licensee and its
attorneys or agents shall consult with PDM in all aspects of the
preparation, filing, prosecution and maintenance of patent
applications and patents included within the Licensed Patent Rights
and shall provide PDM sufficient opportunity to comment on any
document that Licensee intends to file or to cause to be filed with
the relevant intellectual property or patent office.
6.03 At any time, PDM may provide Licensee with written notice that PDM
wishes to assume control of the preparation, filing, prosecution, and
maintenance of any and all patent applications or patents included in
the Licensed Patent Rights. If PDM elects to assume such
responsibilities, Licensee agrees to cooperate fully with PDM, its
attorneys and agents in the preparation, filing, prosecution, and
maintenance of any and all patent applications or patents included in
the Licensed Patent Rights and to provide PDM with complete copie$ of
any and all documents or other materials that PDM deems necessary to
undertake such responsibilities. Licensee shall be responsible for all
costs associated with transferring patent prosecution responsibilities
to an attorney or agent of PDM's choice.
6.04 Each party shall promptly inform the other as to all matters that come
to its attention that may affect the preparation, filing, prosecution,
or maintenance of the Licensed Patent Rights and permit each other to
provide comments and suggestions with respesct to the preparation,
filing, and prosecution of Licensed Patent Rights, which comments and
suggestions will be considered by the other party.
RECORD KEEPING
---------------
7.01 LICENSEE agrees to keep accurate and correct records of LICENSED
PRODUCTS made, used, sold, or imported and LICENSED PROCESSES
practiced under this Agreement appropriate to determine the amount of
royalties due PDM. Such records shall be retained for at least five
(5) years following a given reporting period, and shall be available
during normal business hours for inspection at the expense of PDM by
an accountant or other designated auditor selected by PDM for the sole
purpose of verifying reports and payments hereunder. The accountant or
auditor shall only disclose to PDM information relating to the
accuracy of reports and payments made under this AGREEMENT. If an
inspection shows an underreporting or underpayment in 5 excess of five
percent (5%) for any twelve (12) month period, then LICENSEE shall
reimburse PDM for the cost of the inspection at the time LICENSEE pays
the unreported royalties. including any late charges as required by
Paragraph 8.08 of this Agreement. All payments required under this
Paragraph shall be due within thirty (30) days of the date PDM
provides LICENSEE notice of the payment due.
7.02 LICENSEE agrees to conduct an independent audit of sales and royalties
conducted by an independent auditor at least every two (2) years if
annual sales of the LICENSED PRODUCT or LICENSED PROCESSES are over
two (2) million dollars. The audit shall address, at a minimum, the
amount of gross sales by or on behalf of LICENSEE during the audit
period, the amount of royalty funds owed to PDM under this AGREEMENT,
and whether the royalty amount owed has been paid to PDM and is
reflected in the records of the LICENSEE. A report by the auditor
shall be submitted promptly by the auditor directly to PDM on
completion LICENSEE shall pay for the entire cost of the audit.
REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS
----------------------------------------------------------
6
8.01 Prior to signing this AGREEMENT, LICENSEE has provided to PDM the
COMMERCIAL DEVELOPMENT PLAN at Appendix F, under which LICENSEE
intends to bring the subject matter of the LICENSED PATENT RIGHTS to
the point of PRACTICAL APPLICATION. This COMMERCIAL DEVELOPMENT PLAN
is hereby incorporated by reference into this Agreement. Based on this
plan, performance BENCHMARKS are determined as specified in Appendix
E.
8.02 LICENSEE shall provide written annual reports on its product
development progress or efforts to commercialize under the COMMERCIAL
DEVELOPMENT PLAN for each of the LICENSED FIELDS OF USE within sixty
(60) days after December 31 of each calendar year. These progress
reports shall include, but not be limited to progress on research and
development, status of applications for regulatory approvals,
manufacturing, marketing, importing, and sales during the preceding
calendar year, as well as plans for the present calendar year. PDM
also encourages these reports to include information on any of
LICENSEE'S public service activities that relate to the LICENSED
PATENT RIGHTS. If reported progress differs from that projected in the
COMMERCIAL DEVELOPMENT PLAN and BENCHMARKS, LICENSEE shall explain the
reasons for such difference. In any such annual report, LICENSEE may
propose amendments to the COMMERCIAL DEVELOPMENT PLAN, acceptance of
which by PDM may not be denied unreasonably. LICENSEE agrees to
provide any additional information reasonably required by PDM to
evaluate LICENSEE'S performance under this AGREEMENT. LICENSEE may
amend the BENCHMARKS at any time upon written consent by PDM. PDM
shall not unreasonably withhold approval of any request of LICENSEE to
extend the time periods of this schedule if such request is supported
by a reasonable showing by LICENSEE of diligence in its performance
under the COMMERCIAL DEVELOPMENT PLAN and toward bringing the LICENSED
PRODUCTS to the point of practical application as defined in 37 CFR
404.3(d). LICENSEE shall amend the COMMERCIAL DEVELOPMENT PLAN and
BENCHMARKS at the request of PDM to address any LICENSED FIELDS OF USE
not specifically addressed in the plan originally submitted.
8.03 LICENSEE shall report to PDM the dates for achieving Benchmarks
specified in Appendix C and/or Appendix E and the FIRST COMMERCIAL
SALE in each country in the LICENSED TERRITORY within thirty (30) days
of such occurrence.
8.04 LICENSEE shall submit to PDM within sixty (60) days after each
calendar half-year ending June 30 and December 31 a royalty report
setting forth for the preceding half-year period the amount of the
LICENSED PRODUCTS sold or LICENSED PROCESSES practiced by or on behalf
of LICENSEE in each country within the LICENSED TERRITORY, the NET
SALES, and the amount of royalty accordingly due. With each such
royalty report, LICENSEE shall submit payment of the earned royalties
due. If no earned royalties are due to PDM for any reporting period,
the written report shall so state. The royalty report shall be
certified as correct by an authorized officer of LICENSEE and, shall
include a detailed listing of all deductions made under Paragraph 2.10
to determine NET SALES made under Article 5 to determine royalties
due.
8.05 LICENSEE agrees to forward semi-annually to PDM a copy of such reports
received by Licensee from its sublicense during the preceeding
half-year period as shall be pertinent to a royalty accounting to PDM
by Licensee for activities under the sublicense.
8.06 Royalties due under Article 4 shall be paid in U.S. dollars. For
conversion of foreign currency to U.S. dollars, the conversion rate
shall be the New York foreign exchange rate quoted in The Wall Street
Journal on the day that the payment is due. All checks and bank drafts
shall be drawn on United States banks and shall be payable, as
7
appropriate, to Xxxx X. Xxxxx, 0000 X. Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx
00000. Any loss of exchange, value, taxes or other expenses incurred
in the transfer or conversion to U.S. dollars shall be paid entirely
by LICENSEE. The royalty report required by Paragraph 8.04 of this
AGREEMENT shall accompany each such payment and a copy of such report
shall also be mailed to PDM at its address for notices indicated on
the Signature Page of this AGREEMENT.
8.07 LICENSEE shall be solely responsible for determining if any tax on
royalty income is owed outside the United States and shall pay any
such tax and be responsible for all filings with appropriate agencies
of foreign governments.
8.08 Late charges will be assessed by PDM as additional royalties on any
overdue payments at a rate of one (1) percent per month compounded
monthly. The payment of such late charges shall not prevent PDM from
exercising any other rights it may have as a consequence of the
lateness of any payment.
8.09 All plans and reports required by this Article 8 and marked
"confidential" by LICENSEE shall, to the extent permitted by law, be
treated by PDM as commercial and financial information obtained from a
person and as privileged and confidential, and any proposed disclosure
of such records by the PDM under the Freedom of Information Act, 5
U.S.C. Sec. 552 shall be subject to the pre-disclosure notification
requirements of 45 CFR Sec. 5.65(d).
PERFORMANCE
-----------
9.01 LICENSEE shall use its reasonable best efforts to bring the License
Products and Licensed Processes to Practical Application. "Reasonable
best efforts" for the purposes of this provision shall include
adherence to the COMMERCIAL DEVELOPMENT PLAN at Appendix F and
performance of the BENCHMARKS at Appendix E. The efforts of a
sublicensee shall be considered the efforts of LICENSEE.
9.02 Upon the FIRST COMMERCIAL SALE, until the expiration of this
Agreement, LICENSEE shall use its reasonable best efforts to make
LICENSED PRODUCTS and LICENSED PROCESSES reasonably accessible to the
United States public.
INFRINGEMENT AND PATENT ENFORCEMET
-------------------------------------
10.01 PDM and LICENSEE agree to notify each other promptly of each
infringement or possible infringement of the LICENSED PATENT RIGHTS,
as well as any facts which may affect the validity, scope, or
enforceability of the LICENSED PATENT RIGHTS of which either Party
becomes aware.
10.02 Pursuant to this Agreement and the provisions of Chapter 29 of Tile
35, United States Code, Licensee may, a) bring suit in its own name,
at its own expense, and on its own behalf for infringement of
presumably valid claims in the Licensed Patent Rights; b) in any such
suit, enjoin infringement and collect for damages, profits, and awards
of whatever nature recoverable for such infringement; and c) settle
any claim or suit for infringement of the LICENSED PATENT RIGHTS
provided, however, that PDM shall have the first right to take such
actions. If Licensee desires to initiate a suit for patent
infringement, Licensee shall notify PDM in writing. If PDM does not
notify Licensee of its intent to pursue legal action within ninety
(90) days, Licensee will be free to initiate the suit. PDM shall have
a continuing right to intervene in such suit. In all cases, Licensee
agrees to keep PDM reasonably apprised of the status and progress of
any litigation. Before Licensee commences an infringement action,
Licensee shall notify PDM and give careful consideration to the views
of PDM and to any potential effects of the litigation on the public
health in deciding whether to bring suit.
8
10.03 In the event that a declaratory judgment action alleging invalidity
or non-infringement of any of the LICENSED PATENT RIGHTS shall be
brought against LICENSEE or raised by way of counterclaim or
affirmative defense in an infringement suit brought by Licensee under
paragraph 10.02, pursuant to this Agreement and the provisions of
Chapter 29 of Tile 35, United States Code, Licensee may, a) defend the
suit in its own name, at its own expense, and on its own behalf for
presumably valid claims in the Licensed Patent Rights; b) in any such
suit, ultimately to enjoin infringement and collect for its use,
damages, profits, and awards of whatever nature recoverable for such
infringement; and c) settle any claim or suit for declaratory judgment
involving the LICENSED PATENT RIGHTS provided, however, that PDM shall
have the first right to take such actions and shall have a continuing
right to intervene in such suit. If PDM does not notify Licensee of
its intent to respond to the legal action within a reasonable time,
Licensee will be free to do so. If Licensee elects not to defend
against such declaratory judgment action, PDM, at its own option, may
do so at its own expense. In all cases, Licensee agrees to keep PDM
reasonably apprised of the status and progress of any litigation.
Before Licensee commences an infringement action, Licensee shall
notify PDM and give careful consideration to the views of PDM and to
any potential effects of the litigation on the public health in
deciding whether to bring suit.
In the event that fifty (50%) percent of such expenses exceed the
amount of rayalties payable by the licensee in any calendar year, the
expenses may be carried over as a credit on the same basis in
succeeding calendar years. A credit against litigation expenses,
however, may not reduce the royalties due in any calendar year to less
than the minimum annual royalty. Any recovery made by LICENSEE,
through court judgment or settlement, first shall be applied to
reimburse PDM for royalties withheld as a credit against litigation
expenses and then to reimburse Licensee for its litigation expense.
Any remaining recoveries shall be shared equally by Licensee and PDM.
10.04 PDM shall cooperate fully with LICENSEE in connection with any action
under Paragraph 10.02 or 10.03. PDM agrees promptly to provide access
to all necessary documents and to render reasonable assistance in
response to a request by Licensee.
NEGATION OF WARRANTIES AND INDEMNIFICATION
----------------------------------------------
11.01 PDM offers no warranties other than those specified in Article 1.
11.02 PDM does not warrant the validity of the LICENSED PATENT RIGHTS and
makes no representations whatsoever with regard to the scope of the
LICENSED PATENT RIGHTS, or that the LICENSED PATENT RIGHTS may be
exploited without infringing other patents or other intellectual
property rights of third parties.
11.03 PDM MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF ANY SUBJECT MATTER DEFINED BY THE
CLAIMS OF THE LICENSED PATENT RIGHTS.
9
11.04 PDM does not represent that it will commence legal actions against
third parties infringing the LICENSED PATENT RIGHTS.
11.05 LICENSEE shall indemnify and hold PDM, its employees, students,
fellows, agents, and consultants harmless from and against all
liability, demands, damages, expenses, and losses, including but not
limited to death, personal injury, illness, or property damage in
connection with or arising out of a) the use by or on behalf of
Licensee, its sublicensees, directors, employees, or third parties of
any LICENSED PATENT RIGHTS, or b) the design, manufacture,
distribution, or use of any LICENSED PRODUCTS, LICENSED PROCESSES or
materials by LICENSEE, or other products or processes developed in
connection with or arising out of the LICENSED PATENT RIGHTS. LICENSEE
agrees to maintain a liability insurance program consistent with sound
business practice.
TERM AND MODIFICATION OF RIGHT
----------------------------------
12.01 This AGREEMENT is effective when signed by all parties and shall
extend to the expiration of the last to expire of the LICENSED PATENT
RIGHTS unless sooner terminated as provided in this Article 12.
12.02 In the event that LICENSEE is in default in the performance of any
material obligations under this AGREEMENT, including but not limited
to the obligations listed in Article 12.05, and if the default has not
been remedied within ninety (90) days after the date of notice in
writing of such default, PDM may terminate this AGREEMENT by written
notice.
12.03 In the event that LICENSEE becomes insolvent, files a petition in
bankruptcy, has such a petition filed against it, determines to file a
petition in bankruptcy, or receives notice of a third party's
intention to file an involuntary petition in bankruptcy, LICENSEE
shall immediately notify PDM in writing.
12.04 LICENSEE shall have a unilateral right to terminate this AGREEMENT
and/or any licenses in any country by giving PDM sixty (60) days
written notice to that effect.
12.05 PDM shall specifically have the right to terminate or modify, at its
option, this AGREEMENT, if PDM determines that the LICENSEE: 1) is not
executing the COMMERCIAL DEVELOPMENT PLAN submitted with its request
for a license and the LICENSEE cannot otherwise demonstrate to PDM'S
satisfaction that the LICENSEE has taken, or can be expected to take
within a reasonable time, effective steps to achieve practical
application of the LICENSED PRODUCTS or LICENSED PROCESSES; 2) has not
achieved the Benchmarks as may be modified under Paragraph 8.02; 3)
has willfully made a false statement of, or willfully omitted, a
material fact in the license application or in any report required by
the license agreement; 4) has committed a material breach of a
covenant or agreement contained in the license; 5) is not keeping
LICENSED PRODUCTS or LICENSED PROCESSES reasonably available to the
public after commercial use commences; 6) cannot reasonably satisfy
unmet health and safety needs. In making this determination, PDM will
take into account the normal course of such commercial development
programs conducted with sound and reasonable business practices and
judgment and the annual reports submitted by LICENSEE under Paragraph
8.02. Prior to invoking this right, PDM shall give written notice to
LICENSEE providing LICENSEE specific notice of, and a ninety (90) day
opportunity to respond to, PDM'S concerns as to the previous items 1)
to 7). If LICENSEE fails to alleviate PDM'S concerns as to the
previous items 1) to 7) or fails to initiate corrective action to
PDM'S satisfaction, PDM may terminate this AGREEMENT.
10
12.06 When the public health and safety so require, and after written
notice to Licensee providing Licensee a sixty (60) day opportunity to
respond, PDM shall have the right to require Licensee to grant
sublicenses to responsible applicants, on reasonable terms, in any
Licensed Fields of Use under the Licensed Patenet rights, unless
Licensee can reasonable demonstrate that the granting of the
sublicense would not materially increase the availability to the
public of the subject matter of the Licansed Pataent Rights. PDM will
not require the granting of a sublicense unless the responsible
applicant has first negotiated in good faith with Licensee.
12.07 PDM reserves the right according to 35 U.S.C. Sec. 209(f)(4) to
terminate or modify this AGREEMENT if it is determined that such
action is necessary to meet requirements for public use specified by
federal regulations issued after the date of the license and such
requirements are not reasonably satisfied by LICENSEE.
12.08 Within thirty (30) days of receipt of written notice of PDM'S
unilateral decision to modify or terminate this Agreement, LICENSEE
may, consistent with the provisions of 37 CFR 404.11, appeal the
decision by written submission to the designated PDM official. The
decision of the designated PDM official shall be the final agency
decision. LICENSEE may thereafter exercise any and all administrative
or judicial remedies that may be available.
12.08 Within ninety (90) days of termination of this AGREEMENT under this
Article 12 or expiration under Paragraph 3.02, a final report shall be
submitted by LICENSEE. Any royalty payments, including those related
to patent expense, due to PDM shall become immediately due and payable
upon termination or expiration. If terminated under this Article 12,
sublicensees may elect to convert their sublicenses to direct licenses
with PDM pursuant to Paragraph 4.03.
GENERAL PROVISIONS
-------------------
13.01 Neither Party may waive or release any of its rights or interests in
this AGREEMENT except in writing.
13.02 This AGREEMENT constitutes the entire agreement between the Parties
relating to the subject matter of the LICENSED PATENT RIGHTS, and all
prior negotiations, representations, agreements, and understandings
are merged into, extinguished by, and completely expressed by this
AGREEMENT.
13.03 The provisions of this AGREEMENT are severable, and in the event that
any provision of this AGREEMENT shall be determined to be invalid or
unenforceable under any controlling body of law, such determination
shall not in any way affect the validity or enforceability of the
remaining provisions of this AGREEMENT.
13.04 If either Party desires a modification to this AGREEMENT, the Parties
shall, upon reasonable notice of the proposed modification by the
Party desiring the change, confer in good faith to determine the
desirability of such modification. No modification will be effective
until a written amendment is signed by the signatories to this
AGREEMENT or their designees.
11
13.05 The construction, validity, performance, and effect of this AGREEMENT
shall be governed by Federal law as applied by the Federal courts in
the State of Florida.
13.06 All notices required or permitted by this AGREEMENT shall be given by
prepaid, first class, registered or certified mail properly addressed
to the other Party at the address designated on the following
Signature Page, or to such other address as may be designated in
writing by such other Party and shall be effective as of the date of
the postmark of such notice.
13.07 This AGREEMENT shall not be assigned by LICENSEE except a) with the
prior written consent of PDM, such consent not to be withheld
unreasonably; or b) as part of a sale or transfer of substantially the
entire business of LICENSEE relating to operations which concern this
Agreement. LICENSEE shall notify PDM within ten (10) days of any
assignment of this Agreement by LICENSEE. It is the intent of the
Licensee, and with approval by PDM, to be acquired in its entirety by
GloTech Industries, Inc., of Gainesville, Florida within 30 days of
the execution of this Agreement.
13.08 LICENSEE acknowledges that it is subject to and agrees to abide by
the United States laws and regulations (including the Export
Administration Act of 1979 and Arms Export Control Act) controlling
the export of technical data, computer software, laboratory
prototypes, biological material, and other commodities. The transfer
of such items may require a license from the cognizant Agency of the
U.S. GOVERNMENT or written assurances by LICENSEE that it shall not
export such items to certain foreign countries without prior approval
of such agency. PDM neither represents that a license is or is not
required or that, if required, it shall be issued.
13.09 LICENSEE agrees to xxxx the LICENSED PRODUCTS or their packaging sold
in the United States with all applicable U.S. patent numbers and
similarly to indicate "Patent Issued" status. All Licensed Products
manufactured in, shipped to, or sold in other countries shall be
marked in such manner as to preserve PDM patent rights in such
countries.
13.10 The Parties agree to attempt to settle amicably any controversy or
claim arising under this AGREEMENT or a breach of this AGREEMENT,
except for appeals of modifications or termination decisions provided
for in Article 12. LICENSEE agrees first to appeal any such unsettled
claims or controversies to the designated PDM official, or designee,
whose decision shall be considered the final agency decision.
Thereafter, LICENSEE may exercise any administrative or judicial
remedies that may be available.
13.13 Nothing relating to the grant of a license, nor the grant itself,
shall be construed to confer upon any person any immunity from or
defenses under the antitrust laws or from a charge of patent misuse,
and the acquisition and use of rights pursuant to 37 CFR Part 404
shall not be immunized from the operation of state or Federal law by
reason of the source of the grant.
12
PDM PATENT LICENSE AGREEMENT-NONEXCLUSIVE
SIGNATURE PAGE
For PDM:
/s/Xxxx X. Xxxxx 08/28/03
---------------------------------------- --------
Signature of Authorized PDM Official Date
Xxxx X. Xxxxx
---------------
Inventor
--------
Title
Mailing Address for Notices:
0000 X. Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
For Licensee (Upon, information and belief, the undersigned expressly certifies
or affirms that the contents of any statements of Licensee made or referred to
in this document are truthful and accurate.):
by:
/s/ Xxx Xxxxxx 08/28/2003
----------------------------------- ----------
Signature of Authorized Official Date
Xxx Xxxxxx
-----------
Printed Name
President
---------
Title
Official and Mailing Address for Notices:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxx 00000
13
APPENDIX A--PATENT(S) OR PATENT APPLICATION(S)
Patent(s) or Patent Application(s):
United States Patent Design Patent No. D475,161
Date of Patent: May 27, 2003
Title: "Sports Enthusiast's Helmet with Battery Powered Strobe Unit"
Inventor: Xxxx X. Xxxxx
Term: 14 Years
Appl. No.: 29/165,480
Filed August 12, 2002
14
APPENDIX B--LICENSED FIELD(S) OF USE AND TERRITORY
Licensed Field(s) of Use: All
Licensed Territory: Worldwide
15
APPENDIX C--ROYALTIES
Royalties:
Licensee agrees to pay to PDM a noncreditable, nonrefundable license issue fee
in the amount of $10,000.
Licensee agrees to pay to PDM a nonrefundable minimum annual royalty in the
amount of 3%.
Licensee agrees to pay to PDM earned royalties on net sales as follows:
Year Minimum Payment (creditable)
1st $ 0
2nd $ 7,500
3rd $ 10,000
4th plus each year
thereafter until the end
of the patent life $15,000
Licensee agrees to pay PDM benchmark royalties as follows:
A one-time payment of:
$25,000 due upon cumulative sales benchmark of $1,000,000
$75,000 due upon cumulative sales benchmark of $3,000,000
$100,000 due upon cumulative sales benchmark of $6,000,000
Benchmark payments are in addition to royalty payments
Licensee agrees to pay PDM sublicensing royalties as follows:
50% of all royalties, payments, fees, and income received from sublicensees.
16
APPENDIX D--MODIFICATIONS
PDM and LICENSEE agree to the following modifications to the Articles and
Paragraph ____ of this AGREEMENT:
17
APPENDIX E--BENCHMARKS AND PERFORMANCE
LICENSEE agrees to the following BENCHMARKS for its performance under this
AGREEMENT and, within thirty (30) days of achieving a BENCHMARK, shall notify
PDM that the BENCHMARK has been achieved.
18
APPENDIX F--Commercial Development Plan
With the desire to bring the licensed technology to the marketplace, Licensee
will work together with PDM to construct an agreeable commercial development
plan in the immediate future, exploring any and all contacts and leads presented
by PDM to achieve this goal, including marketing agents, manufacturing,
suppliers, endorsements, sports and entertainment venues, etc.
19
