EXHIBIT 10.56
AMENDED AND RESTATED
LICENSE AND ROYALTY AGREEMENT
This Amended and Restated License and Royalty Agreement ("Agreement"),
is made and entered into as of this 3rd day of January, 2001, by and among
LASERSIGHT TECHNOLOGIES, INC., a Delaware corporation ("Licensee"), XXXX X.
XXXX, M.D. and XXXXXX XXXXXXX (collectively, "Licensors").
WHEREAS, Licensors are the owners of the entire, right, title and
interest in and to a certain U.S. letters patent and foreign patents, as
identified on Exhibit A attached hereto and made a part hereof, pertaining to a
device for use in human corneal refractive surgery (collectively, the "Licensed
Patents");
WHEREAS, Licensors have certain know-how and confidential technical
information directed to the Licensed Patents (collectively, the "Licensed
Technology");
WHEREAS, Licensee desires to acquire a world wide, non-exclusive
license to make, have made, use or sell the device described in or covered by
any claims of the Licensed Patents (the "Device") in those countries identified
on Exhibit A (the "Territory") and throughout the world, in accordance with the
terms and conditions provided herein;
WHEREAS, Licensors are willing to grant such a license to Licensee in
accordance with the terms and conditions provided herein;
WHEREAS, the Licensors and Licensee have entered into that certain
License and Royalty Agreement dated as of September 10, 1997 (the "Original
Agreement");
WHEREAS, the Licensors and Licensee have entered into that certain
First Amendment to License and Royalty Agreement (the "Amendment"), dated
January 18, 2000, amending the Original Agreement;
WHEREAS, the Licensors and Licensee desire to amend and restate the
Original Agreement, as amended by the Amendment, as provided herein; and
WHEREAS, LaserSight Incorporated, a Delaware corporation
("LaserSight"), has agreed to guaranty certain obligations of Licensee and to
undertake certain obligations described in this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises and
valuable consideration set forth herein, the parties hereto mutually agree as
follows:
1. Grant of License. Licensors hereby grant to Licensee during
the Term (as defined herein) a world-wide, non-exclusive, terminable,
non-transferable, non-sublicensable (except as provided herein) right and
license to make, have made, use and sell the Device under the Licensed Patents
and the Licensed Technology (the "License"). As used herein, the term Licensed
Patents shall include those items listed on Exhibit A, and any reissues,
divisionals, continuations, and continuations-in-part. As used herein, the term
Licensed Technology is limited to that information known to Licensors as of the
Effective Date (as defined herein) and specifically excludes any information of
Licensors concerning proprietary software developed or owned by Licensors.
2. Term. This Agreement was effective as of September 10, 1997,
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and commenced on January 1, 2000 (the "Commencement Date"), and shall continue
thereafter until July 31, 2005 (the "Initial Term"), unless earlier terminated
as provided herein. At the conclusion of the Initial Term Licensee shall have
the sole option to renew this Agreement for additional one (1) year terms (each
a "Renewal Term" and collectively "Renewal Terms", and the Initial Term together
with the Renewal Terms shall constitute the "Term") upon the terms and
conditions as set forth herein. If Licensee elects to renew this Agreement for
one or more Renewal Terms, then Licensee shall be obligated to pay to Licensors
only the payments described in Section 5(d), provided that, unless otherwise
agreed to by the parties, the ten percent (10%) royalty rate contemplated by
Section 5(d) will increase to fifty percent (50%) and any Minimum Quarterly
Payment (as defined herein) to be paid during such Renewal Term(s) shall be
equal to $400,000 per calendar quarter.
3. Ownership of Intellectual Property.
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(a) Licensee acknowledges that Licensors have all right, title
and interest in the Licensed Patents and the Licensed Technology, and
that as between Licensors and Licensee, Licensors have the exclusive
right to use the Licensed Patents and the Licensed Technology, except
as otherwise provided herein. Licensee shall not, at any time, file any
trademark or patent application with the United States Patent and
Trademark Office or any other governmental entity, any copyright
registration with the U.S. Copyright Office or with any other
governmental entity for the Licensed Patents and the Licensed
Technology. Licensee shall not use any of the Licensed Patents and the
Licensed Technology except in accordance with this Agreement. Any
patent or copyright registration obtained or applied for anywhere in
the world that contains the Licensed Patents and the Licensed
Technology or any substantially similar design, shall be transferred to
Licensors without compensation. Notwithstanding anything set forth in
this Section 3(a) to the contrary, the parties acknowledge and agree
that U.S. Letters Patent No. 5,586,980, dated December 24, 1996 (the
"Xxxxxx Patent"), is the sole and exclusive property of LaserSight or
one of its affiliates, and that the provisions of this Section 3(a)
shall not apply to LaserSight's activities in connection with the
Xxxxxx Patent.
(b) Licensee shall not oppose or seek to cancel or challenge,
in any forum, including, but not limited to, the United States Patent
and Trademark Office or any other governmental authority, any
application or registration of any trademark, service xxxx or patent
which contains the Licensed Patents or the Licensed Technology.
Licensee shall not oppose or seek to cancel or challenge, in any forum,
including, but not limited to, the U.S. Copyright Office, any
application or registration of a design containing the Licensed Patents
or the Licensed Technology. Licensee shall not object to, or file any
action or lawsuit because of any use by Licensors of the Licensed
Patents or the Licensed Technology, whether such use is by Licensors
directly or through different licensees or authorized users unless such
use conflicts with the terms of this Agreement.
(c) Nothing in this Agreement gives Licensee any right, title,
or interest in any of Licensors' intellectual property except the right
to use in accordance with the terms of this Agreement.
(d) Licensee acknowledges that all designs, artwork,
compilations or derivatives ("Works") included in the Licensed Patents
or the Licensed Technology are the sole property of Licensors. Licensee
acknowledges that any Works, other than trademarks or service marks,
created by it pursuant to this Agreement that contain the Licensed
Patents or the Licensed Technology are also the property of Licensors.
Licensee hereby assigns to Licensors any right, title or interest they
may have in Works, other than trademarks or service marks, developed
under this Agreement to Licensors. Licensee warrants they have and will
maintain appropriate agreements with their employees and independent
contractors to give effect to this Section. Accordingly, Licensee shall
not copy, use, assign or otherwise transfer any rights in any Works or
any derivatives thereof included, except in accordance with this
Agreement. Licensee shall not attempt to obtain or assert copyright
rights in any artwork or design, other than with respect to trademarks
and service marks, which contains the Licensed Patents and the Licensed
Technology, without the express written authorization of Licensors.
Notwithstanding anything set forth in this Section 3(d), the parties
acknowledge and agree that the Xxxxxx Patent is the sole and exclusive
property of LaserSight and that the provisions of this Section 3(d)
shall not apply to LaserSight's activities in connection with the
Xxxxxx Patent.
(e) Licensee acknowledges that its material breach of this
Agreement will result in immediate and irreparable damage to Licensors,
and that money damages alone would be inadequate to compensate
Licensors. Therefore, in the event of a material breach of this
Agreement by Licensee, Licensors, in addition to other remedies, may
immediately obtain and enforce injunctive relief prohibiting the
material breach or compelling specific performance.
4. Limitations on the License. The License is subject to the
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following additional limitations:
(a) Distribution. In the event Licensee sells or distributes
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the Covered Products (as defined herein) to any person, firm or
corporation related in any manner to Licensee or its officers,
directors or major stockholders, or to an exclusive distributor,
Licensee shall make Quarterly Gross Profit Payments (as defined herein)
with respect to such sales or distribution based upon the Sales Price
(as defined herein) generally charged to Licensee's normal distribution
network.
(b) No Other Use. Licensee shall not use the Device, the
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Licensed Patents or the Licensed Technology for anypurpose other than
in connection with this Agreement.
(c) Manufacture of Covered Products. Licensee shall (i) be
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responsible for the cost of purchasing or manufacturing the Covered
Products, as applicable, and (ii) shall enter into agreements for the
manufacture of the Keratomes.
(d) Premium Rights. Licensee shall not manufacture, sell, or
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distribute the Covered Products as Premiums, for publicity purposes,
for fund raising, as giveaways, in combination sales, or for disposal
under similar methods of merchandising except as provided in this
subsection; provided, however, during the first two (2) calendar
quarters following the Commencement Date, Licensee shall have the right
to grant Premiums in an amount not to exceed five percent (5%) of the
total disposable microkeratomes produced during the applicable calendar
quarter, and such amount will be reduced to one percent (1%) for each
calendar quarter thereafter. For purposes of this Agreement, "Premium"
shall be defined as any time the Covered Products are sold or given
away for the purposes of increasing sales, promoting, or publicizing
any other product, service or establishment, including incentives for
sales force, trade or consumer promotions.
(e) Notices. Licensee shall stamp on the Device or any
packaging for the Device such intellectual property notices as
reasonably directed from time to time by Licensors.
5. Consideration. As consideration for the License, Licensee
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shall pay the following to Licensors:
(a) on the date hereof, LaserSight shall wire transfer an
aggregate amount of $250,000 U.S. in immediately available funds to the
Licensors in accordance with wire transfer instructions provided to
Licensee by the Licensors.
(b) on the date hereof, LaserSight shall send its transfer
agent an irrevocable letter of direction to issue two stock
certificates (one in the name of each Licensor) each representing
365,276 shares (the "License Shares") of LaserSight common stock, $.001
par value per share ("Common Stock").
The Licensors acknowledge and agree that the License Shares
(i) are authorized but previously unissued Common Stock which have not
been registered under the Securities Act of 1933, as amended ("the
Act"), or any state securities laws, (ii) have been acquired for
investment purposes only and not with a view to distribution or resale,
(iii) may not be sold or transferred unless such shares have been
registered under the Act and such applicable state securities laws, or
unless in the opinion of counsel acceptable to LaserSight an exemption
from registration is available, and (iv) the certificates representing
such shares shall bear substantially the following legend:
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE SECURITIES LAW
AND MAY NOT BE TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT
UNDER THE ACT AND SUCH APPLICABLE STATE SECURITIES LAWS SHALL
HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR (II) IN THE
OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY, REGISTRATION
UNDER SUCH SECURITIES ACTS AND SUCH APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
PROPOSED TRANSFER.
The License Shares shall have those registration rights that are more
fully described in that certain Registration Rights Agreement, dated as
of the date hereof, substantially in the form which is attached hereto
as Exhibit B.
(c) during the period commencing on the date hereof and
continuing through July 31, 2002 (such period referred to herein as the
"Fixed Quarterly Payment Period"), on the date indicated in column 2 of
Exhibit C attached hereto Licensee shall pay jointly to Licensors the
applicable amount set forth in column 3 of Exhibit C (each such payment
referred to herein as a "Fixed Quarterly Payment").
Notwithstanding anything set forth herein to the contrary,
the amount of each Fixed Quarterly Payment shall be subject to
adjustment (the "Fixed Quarterly Payment Adjustment") if at any time
during the Fixed Quarterly Payment Period, (A) a royalty is imposed in
connection with the sale of the Device, or (B) an injunction is issued
by a court of competent jurisdiction whereby Licensee is prevented from
distributing the Device or any other dispute arises in connection with
the Licensed Patents or the Licensed Technology (collectively, a
"Patent Dispute"), the Fixed Quarterly Payment then in effect shall be
reduced to the amount resulting from multiplying such Fixed Quarterly
Payment times eighty percent (80%). Any such adjustment shall remain in
effect until such time as the Patent Dispute is finally resolved in a
manner acceptable to Licensee or the royalty is no longer imposed in
connection with the sale of the Device, as the case may be. If the
amount of a Fixed Quarterly Payment is reduced as result of a Patent
Dispute such reduction shall only affect the Fixed Quarterly Payment
prospectively. If the duration of any such event or events described
above is less than a calendar year, any such adjustment shall be
pro-rated based on the number of months during which such event is
continuing.
(d) during the period commencing August 1, 2002 and continuing
through July 31, 2005 (such period referred to herein as, the "Extended
Period"), on the date indicated in column 2 of Exhibit C Licensee shall
pay jointly to Licensors an amount equal to the greater of (i) ten
percent (10%) of the Gross Profit (as defined herein) (each such
payment referred to herein as a "Quarterly Gross Profit Payment"), or
(ii) the applicable amount set forth in column 3 of Exhibit C (each
such payment referred to herein as a "Minimum Quarterly Payment").
(i) Calculation of Gross Profit. "Gross Profit"
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shall be calculated by Licensee within thirty (30)days after
the end of each calendar quarter during the Term and shall be
determined as follows:
(A) Sales Price less the sum of (1) the Cost
of Goods Sold (as defined herein), (2) any royalty
fee imposed (i) by a court, or (ii) in connection
with a settlement agreement, within the Territory
that determines that the Covered Products sold by
Licensee infringe the intellectual property rights of
a third party not affiliated with Licensee or
resolves any such dispute, as applicable, and (3)
distribution discounts and sales commissions
associated with the Covered Products; provided,
however, for purposes of this calculation
distribution discounts and sales commissions that
exceed 35% of gross sales shall not be considered for
purposes of calculating Gross Profits. For purposes
of this Agreement, the term "Sales Price" shall mean
the total invoiced amount of all sales of the Covered
Products less any credits for returns actually made
and supported by credit memoranda issued to the
customer;
(B) for purposes of determining Gross
Profit, the Sales Price shall include all amounts
invoiced by Licensee or LaserSight which are the
result of sales of Covered Products and other
components which are related to the Covered Products.
For purposes of this Agreement, the term "Covered
Products" shall mean: (A) a Keratome (as defined
herein) with gear box, suction ring, and suction
handle, (B) motor, (C) motor power cord, (D)
tonometer, (E) suction and power supply, (F) foot
switch, (G) tubing, (H) user's manual, (I) sterile
packaging, (J) control consoles, (K) blades, (L)
replacement parts, (M) lid speculum, and other
component parts which are manufactured utilizing the
Licensed Patents and/or the Licensed Technology. For
purposes of this Agreement, the term "Keratome" shall
mean Licensee's UniShaperTM keratome, UltraShaperTM
keratome and any other keratome manufactured,
distributed or sold by Licensee or LaserSight.
(ii) Cost of Goods Sold. "Cost of Goods Sold" shall
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include (i) the manufacturing costs from an OEM vendor of the
Covered Products, (ii) packaging costs associated with the
manufacture and distribution of the Covered Products, (iii)
sterilization costs associated with the Covered Products, and
(iv) shipping costs associated with the Covered Products. Any
rebates and commissions from manufacturers, distributors or
other sources shall be deducted from the Cost of Goods Sold.
(iii) Minimum Quarterly Payment Adjustment.
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Notwithstanding anything set forth herein to the contrary,
each Minimum Quarterly Payment shall be subject to adjustment
as follows (the "Minimum Quarterly Payment Adjustment"):
(A) if at any time during the Extended
Period or a Renewal Term, (A) a royalty is imposed in
connection with the sale of the Device, or (B) a
Patent Dispute arises, the amount of the Minimum
Quarterly Payment then in effect shall be reduced to
the amount resulting from multiplying such Minimum
Quarterly Payment times eighty percent (80%). Any
such adjustment shall remain in effect until such
time as the Patent Dispute is finally resolved in a
manner acceptable to Licensee or the royalty is no
longer imposed in connection with the sale of the
Device, as the case may be. If the Minimum Quarterly
Payment is reduced as result of a Patent Dispute such
reduction shall only affect the Minimum Quarterly
Payment prospectively. If the duration of any such
event or events described above is less than a
calendar year, any such adjustment shall be pro-rated
based on the number of months during which such event
is continuing; and
(B) unless the payment of the Minimum
Quarterly Payments is accelerated in accordance with
Section 5(d)(v), for each calendar quarter ending
during the Extended Period the Minimum Quarterly
Payment to be paid for the next succeeding calendar
quarter will be increased to an amount equal to the
amount of the Quarterly Gross Profit Payment paid in
connection with the immediately preceding calendar
quarter if (1) the amount of the Quarterly Gross
Profit Payment paid for the immediately preceding
calendar quarter exceeds the amount of the Minimum
Quarterly Payment for the immediately following
calendar quarter, and (2) the cumulative amount of
all Quarterly Gross Profit Payments, Fixed Quarterly
Payments and Minimum Quarterly Payments, as
applicable, paid to Licensors from the period
commencing January 1, 2001 continuing through the end
of the immediately preceding calendar quarter (the
"Reconciliation Period") is less than 10% of the
cumulative amount of all Gross Profits earned by
Licensee during the Reconciliation Period. If either
of the requirements described in item (1) or (2) of
the immediately preceding sentence is not applicable
then the amount of the applicable Minimum Quarterly
Payment will not be increased. For example:
Scenario 1
Assumptions:
o 3rd Quarter 2002 Quarterly Gross Profit
Payment = $370,000.
o 4th Quarter 2002 Minimum Quarterly Payment =
$250,000.
o the cumulative amount of all Quarterly Gross
Profit Payments, Fixed Quarterly Payments
and Minimum Quarterly Payments paid to
Licensors during the Reconciliation Period
is greater than 10% of the cumulative amount
of all Gross Profits earned by Licensee
during the Reconciliation Period.
Result: No change in the amount of the Minimum
Quarterly Payment for the 4th Quarter 2002.
Scenario 2
Assumptions:
o 3rd Quarter 2002 Quarterly Gross Profit
Payment = $370,000.
o 4th Quarter 2002 Minimum Quarterly Payment =
$250,000.
o the cumulative amount of all Quarterly Gross
Profit Payments, Fixed Quarterly Payments
and Minimum Quarterly Payments paid to
Licensors during the Reconciliation Period
is less than 10% of the cumulative amount of
all Gross Profits earned by Licensee during
the Reconciliation Period.
Result: The amount of the Minimum Quarterly Payment
for the 4th Quarter 2002 would be increased
to $370,000.
Scenario 3
Assumptions:
o 4th Quarter 2002 Minimum Quarterly Payment
was increased to $370,000, as described
above.
o 4th Quarter 2002 Gross Profit Payment =
$225,000.
o 1st Quarter 2003 Minimum Quarterly Payment =
$250,000.
o the cumulative amount of all Quarterly Gross
Profit Payments, Fixed Quarterly Payments
and Minimum Quarterly Payments paid to
Licensors during the Reconciliation Period
is less than 10% of the cumulative amount of
all Gross Profits earned by Licensee during
the Reconciliation Period.
Result: No change in the amount of the Minimum
Quarterly Payment for the 1st Quarter 2003.
(iv) Quarterly Gross Profit Payment Reconciliation.
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During the thirty (30) day period after the end of each
calendar quarter commencing with the calendar quarter ending
September 30, 2002, Licensee shall calculate the amount of the
Quarterly Gross Profit Payment that would be payable to
Licensors for the immediately preceding calendar quarter, and
if the amount of the Quarterly Gross Profit Payment exceeds
the Minimum Quarterly Payment for the applicable calendar
quarter, Licensee shall pay to the Licensors the amount of the
Quarterly Gross Profit Payment in accordance with this Section
5(d).
(v) Acceleration of Fixed and Minimum Quarterly
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Payments. If prior to July 31, 2002 LaserSight, through an
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underwritten public offering or through a single private
placement transaction, raises at least $25,000,000 in proceeds
through the sale of Common Stock, then within five (5) days
after the closing of such a transaction, LaserSight shall pay,
in a single lump sum, the aggregate amount of each then unpaid
Fixed Quarterly Payment that is to be paid during the Fixed
Quarterly Payment Period and Minimum Quarterly Payment that is
to be paid during the Extended Period. If the payment of the
Fixed Quarterly Payments and the Minimum Quarterly Payments is
accelerated as described in this Section 5(d)(v), then the
Licensors shall be entitled to receive only that portion of
the Quarterly Gross Profit Payments that exceed the Minimum
Quarterly Payments that would have been made during applicable
quarter of the Extended Period.
(e) Licensee, at its sole cost and expense, will use all
its reasonable efforts to repair the LaserScan 2000 excimer laser
currently in Xxxxx X. Xxxx'x, M.D. possession to working condition.
(f) Licensee shall take possession of that certain LaserScan
LSX(R) System (the "Laser Unit") previously delivered to Xx. Xxxx.
Licensors shall cooperate with Licensee in delivering the Laser Unit to
a location designated by Licensee, and Licensee shall be responsible for
the payment of the shipping costs associated with Licensee taking
delivery of the Laser Unit. Licensors acknowledge and agree that after
the Laser Unit is delivered to Licensee, Licensors shall have no right,
title or interest in or to the Laser Unit.
6. Statement, Payments and Penalties.
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(a) During the Term, no later than thirty (30) days after each
calendar quarter ending in March, June, September and December,
Licensee shall submit to Licensors full and accurate statements (each a
"Quarterly Statement") showing the quantity, description, Cost of Goods
Sold, and Gross Profits relating to the Covered Products distributed
and/or sold during the applicable calendar quarter then ended,
including any additional information kept in the normal course of
business by Licensee which is appropriate to enable an independent
determination of the amount due hereunder with respect to the Covered
Products. All Quarterly Gross Profit Payments or the Fixed Quarterly
Payments or Minimum Quarterly Payments, as applicable, then due shall
be made simultaneously with the submission of each Quarterly Statement.
Quarterly Statements shall be submitted whether or not they reflect any
sales or whether any Quarterly Gross Profit Payment need be made.
(b) Failure to submit timely or accurate Quarterly Statements,
Quarterly Gross Profit Payments or Fixed Quarterly Payments or Minimum
Quarterly Payments, as applicable shall result in an additional charge
of 1% per month on any balance unpaid as of the applicable reporting
period or the maximum allowed by applicable law, whichever is lower.
(c) The receipt and/or acceptance by Licensors of the
Quarterly Statements, Quarterly Gross Profit Payments, Fixed Quarterly
Payments or Minimum Quarterly Payments or any payments paid hereunder,
shall not preclude Licensors from questioning the correctness thereof.
In the event that any inconsistencies or mistakes are discovered in
Quarterly Statements or payments, they shall immediately be rectified
by Licensee and the appropriate payment shall be made by Licensee.
(d) Licensee shall, unless otherwise directed in writing by
Licensors, send all Quarterly Gross Profit Payments, payments of the
Fixed Quarterly Payment or Minimum Quarterly Payment, as applicable, by
wire transfer as directed by Licensors, and shall send all statements
to Licensors by mail and facsimile transmission with delivery confirmed
to the addressee at the addresses set out in Section 25.
7. Records and Right to Audit.
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(a) Licensee each shall keep, maintain and preserve in its
principal place of business during the Term, any renewal periods and at
least five (5) years following termination or expiration, complete and
accurate books, accounts, records and other materials covering all
transactions related to this Agreement in a manner such that the
information contained in the statements referred to in Section 6 can be
readily determined including, without limitation, customer records,
invoices, correspondence and banking, financial and other records in
Licensee's possession or under its control. Licensors may designate an
independent auditor or auditors and such independent auditor or
auditors shall have the right to inspect and audit all materials
related to this Agreement, subject to the confidentiality requirements
set forth in Section 23.
(b) Such materials shall be available for inspection and audit
(including photocopying) at any time during (i) the Term, and (ii) the
period six (6) months immediately following Licensors receipt of its
final payment due hereunder in the event of termination or expiration;
however, such inspection or audit shall not occur more often than once
every twelve (12) months during the Term, and shall take place during
reasonable business hours and upon at least five (5) days notice by
Licensors and/or their representatives. Licensee will cooperate and
will not cause or permit any interference with Licensors and/or their
representatives in the performance of their duties of inspection and
audit. Licensors, and/or their representatives, shall have free and
full access to said materials for inspection and audit purposes.
(c) Should any audit indicate an underpayment of five percent
(5%) or more of the Quarterly Gross Profit Payments due Licensors for
the period since (i) the Commencement Date, or (ii) date of the last
audit, whichever is later, the reasonable cost of the audit shall be
paid by Licensee. Should any audit indicate an underpayment of ten
percent (10%) or more, during the same period, Licensee shall pay
Licensors an additional fee equal to ten percent (10%) of the
underpayment. Payment of the audit cost and any additional fees is in
addition to the full amount of any underpayment, including interest as
provided in Section 6(b), shall be paid by Licensee if the results of
such audit indicate an underpayment of ten percent (10%) or more.
Licensee shall cure any contract breaches discovered during the audit,
provide amended reports if required, and submit the amount of any
underpayment including interest, additional fees and, if applicable,
the cost of the audit within sixty (60) days from the date of the
delivery to Licensee of the results of the audit.
8. Disclosure of Licensed Patents/Licensed Technology. Upon
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execution of this Agreement, Licensors shall promptly disclose to Licensee all
information it possesses relating to the Licensed Patents and the Licensed
Technology. Licensors shall continue to provide any technical assistance
reasonably requested by Licensee from time to time during the Term.
9. Maintenance of Patents. Licensors shall be responsible for
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all payments, including, without limitation, payments ofmaintenance fees,
required to keep the Licensed Patents in force for their full terms.
10. Additional Filings; Approvals. If Licensee (i) desires to
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market the Devices in any country where regulatory approval is required but not
granted as of the Effective Date, (ii) desires to obtain patent protection
relating to any further discoveries, inventions, technology, know-how,
enhancements, improvements, modifications or other developments relating to the
Licensed Patents or the Licensed Technology in any country where such patent
protection may be granted and has not been granted as of the Effective Date, or
(iii) is required to file with any governmental or other licensing agency any
form or application related to the Devices, including without limitation, the
filings or applications described in Section 22(a), Licensors shall provide all
assistance reasonably necessary to enable Licensee to obtain such regulatory
approval, licensing approval or patent protection, as the case may be. The costs
of obtaining all relevant approvals or protection shall be borne solely by
Licensee.
11. Patent Litigation.
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(a) Infringement of the Licensed Technology. Should Licensee
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or Licensors learn of any infringements of the Licensed Patents or the
Licensed Technology or any part thereof by any third party, they or it
shall promptly notify the other party. Licensors shall have the sole
right but not the obligation to pursue such infringements. Should
Licensors pursue such an infringement, Licensee will cooperate therein
as reasonably requested by Licensors. If any monetary settlement or
judgment is obtained as a result of a suit for infringement, the
proceeds obtained shall be the sole property of Licensors.
If Licensors decline to pursue such an infringement, Licensee
may institute and prosecute suits for infringement in its own name and
at its own expense, and Licensors will join as parties plaintiff in
such suits and cooperate therein as reasonably requested by Licensee.
If any monetary settlement or judgment is obtained as a result of a
suit for infringement, the proceeds obtained shall be applied first to
recover Licensors' and Licensee's reasonable expenses in proportion to
the amount each expended in such suit, and any excess proceeds shall be
equally divided between Licensee and Licensors.
(b) Defense of Licensed Technology. With the exception of the
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Litigation, should any litigation by a third party against Licensee
alleging that the manufacture, use or sale of the Device infringes any
patent or rights under a patent of such third party arise, Licensee
shall promptly notify licensors of such litigation, and Licensors shall
defend and/or settle such litigation at their sole cost and expense;
provided however, the terms and conditions of any such settlement which
affect the rights and/or obligations of Licensee under this Agreement
shall be subject to Licensee's
prior approval. In addition, Licensors shall indemnify and hold harmless
Licensee for any costs and expenses incurred by Licensee in connection with such
third party litigation including, without limitation, reasonable attorneys'
fees, expert witness fees and accounting fees.
12. Representations and Warranties.
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(a) Licensors. Licensors, and each of them, represent,
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warrant and covenant:
(i) that they are the sole and exclusive owners of
the Licensed Patents and Licensed Technology and that they
have full legal capacity, power and authority to (A) enter
into this Agreement, (B) fully perform all of their
obligations hereunder, and (C) grant the license concerning
the Licensed Patents and Licensed Technology in the Territory,
provided, however, Licensors make no representation or
warranty concerning the Licensed Patents and Licensed
Technology outside the Territory;
(ii) that to their knowledge all of the Licensed
Patents and the Licensed Technology known to Licensors has
been or will be promptly disclosed to Licensee and included
in the license granted hereunder;
(iii) that Exhibit A represents a complete and
accurate list of all jurisdictions and registration numbers
related to such jurisdictions where the Licensed Patents have
been registered, and there are no other jurisdictions where
the Licensed Patents have been registered or an application
for registration has been made;
(iv) that except for the license granted to Chiron
Vision Corporation pursuant to that certain Amended and
Restated License Agreement dated effective January 1, 1994,
they have not, individually or collectively, previously
licensed, used or disclosed the Licensed Patents or the
Licensed Technology or any part thereof anywhere in the world,
and during the Term will not license or consent to any
additional license or sublicense of the Licensed Patents;
(v) that to their knowledge no part of the
Licensed Patents or the Licensed Technology is being infringed
in the Territory;
(vi) that to their knowledge each of the Licensed
Patents are valid and enforceable, and no part of the Licensed
Technology will infringe the rights of any third parties in
the Territory;
(vii) that prior to the Commencement Date the
disposable microkeratome will have been adequately tested and
shall be safe and effective for its intended use provided it
is properly used by qualified surgeons specialized in
refractive surgery.
(b) Licensee. Licensee represents, warrants and
--------
covenants:
(i) that it has the full legal power and authority
to enter into this Agreement and to fully perform all of its
obligations hereunder;
(ii) that its performance hereunder will ccomply
with all applicable laws, ordinances, regulations and codes;
(iii) Licensee shall use its best efforts to continue
the bona fide manufacture, distribution and sale of the
Covered Products during the Term; and
(iv) during the Term, Licensee shall not tie the
sale of the Device to any other product.
13. Termination.
-----------
(a) Termination by Licensors. This Agreement may be
------------------------
terminated by Licensors in the event any of the following
defaults occur:
(i) Licensee fails to make any payment due or fails
to deliver any required statement, and fails to cure such
default within fifteen (15) days from receipt of notice from
Licensors; provided, however, Licensors and Licensee
acknowledge and agree that an underpayment of any Gross Profit
Payment shall not constitute a failure to make a payment
hereunder;
(ii) Licensee attempts to grant or grants a
sublicense other than as provided pursuant to Section 31 or
attempts to assign or assigns any right or duty under this
Agreement to any person or entity without the prior written
consent of Licensors;
(iii) Licensee, or any related entities, manufacture,
distribute or sell any products infringing upon or competing
with the Licensed Patents. Nothing herein is intended to
prohibit or restrict Licensee, or any related entities, from
continuing to sell their existing products, the Covered
Products or their utilization or disposition of the Xxxxxx
Patent; and
(iv) Licensee materially breaches any provision in
this Agreement in addition to those set out above in this
section, and fails to cure such breach within thirty (30) days
from receipt of notice from Licensors.
(b) Termination by Licensee. Licensors materially breach
-----------------------
any provision in this Agreement, and fail to cure such breach within
thirty (30) days from receipt of notice from Licensors.
14. Effect of Expiration or Termination.
-----------------------------------
(a) Other Rights/Remedies. Any termination of this Agreement
---------------------
will be without prejudice to the rights and remedies of either party
with respect to any provisions or covenants arising out of breaches
committed prior to such termination.
(b) Effect of Expiration or Termination. On the date (the
-----------------------------------
"Termination Date") which is ninety (90) days after expiration or
termination of this Agreement for any reason Licensee shall immediately
cease all further use of the Device, the Licensed Patents or the
Licensed Technology, directly or indirectly, or any derivation of the
Device, the Licensed Patents or the Licensed Technology. Until payment
to Licensors of any monies due it, Licensors shall have a lien on any
units of Device not then disposed of by Licensee and on any monies due
Licensee from any person or firm with respect to sales of the Covered
Products.
(c) Acceleration of Payments. If Licensee or LaserSight
------------------------
defaults on any of their respective payment obligations described in
this Agreement and such default is not cured within fifteen (15) days
from receipt of notice from Licensors, then, in addition to any other
rights the Licensors may have under this Agreement, the following
amounts would become immediately due and owing by Licensee: (i) a lump
sum amount equal to the aggregate amount of each then unpaid Fixed
Quarterly Payment that is to be paid during the Fixed Quarterly Payment
Period and Minimum Quarterly Payment which is to be paid during the
Extended Period, as applicable, and (ii) the attorney's fees (up to a
maximum of $250,000) incurred by the Licensors in connection Civil
Action No. 00-896-A that was filed in the United States District Court
for the Eastern District of Virginia, Alexandria Division.
Notwithstanding the foregoing, Licensors and Licensee acknowledge and
agree that an underpayment of any Quarterly Gross Profit Payment shall
not constitute a failure to make a payment hereunder.
(d) Disposal of Inventory. After the Termination Date,
---------------------
Licensee shall have no further right to manufacture the Device or other
products utilizing the Licensed Patents or the Licensed Technology, but
may continue to distribute its remaining inventory of Devices in
existence at the time of expiration or termination for a period of
ninety (90) days, provided all statements (including the Final
Statement (as defined herein)) and payments then due have been
delivered and that during the disposal period Licensee deliver all
statements and payments due in accordance with Sections 6 and comply
with all other terms and conditions of this Agreement. Licensors shall
have the option for thirty (30) days (the "Option Period"), to purchase
all remaining stock after said ninety (90) day period at a price which
shall equal Licensee's actual Cost of Goods Sold. During the Option
Period, Licensee shall not sell its remaining inventory of Devices in
liquidating its inventory at a price that is less than that charged by
Licensee to its normal distribution network during the Term. In the
event Licensors elect not to purchase Licensee's remaining inventory,
Licensee will destroy any remaining inventory within thirty (30) days.
(e) Reversion of Rights. After the Termination Date, all
-------------------
rights granted to Licensee in this Agreement shall revert to Licensors,
including, but not limited to, the right to manufacture and sell
Devices. Nothing contained herein shall be construed to allow Licensee
to utilize the Licensed Patents or the Licensed Technology after the
Termination Date.
(f) Final Statement. Thirty (30) days before the expiration of
---------------
this Agreement, Licensee shall furnish a statement to Licensors showing
the number and description of Devices on hand or in process (the "Final
Statement"). If this Agreement is terminated for any reason, such
statement shall be furnished within thirty (30) days after notice of
termination. Licensors shall have the right to conduct physical
inventories to ascertain or verify the amount of remaining inventory.
15. Survival of Rights.
------------------
(a) The terms and conditions of this Agreement necessary to
protect the rights and interests of Licensors in the Licensed Patents
and the Licensed Technology and the Device including, but not limited
to, Licensee's obligations under Sections 3, 7, 11, 14, 15, 18, 19, 21
and 23, shall survive the termination or expiration of this Agreement.
(b) The terms and conditions of this Agreement providing for
any activity following the effective date of termination or expiration
of this Agreement shall survive until such time as those terms and
conditions have been fulfilled or satisfied.
16. Marketing Strategy. Licensee shall be responsible for funding
------------------
the development and implementation of a sales and marketing strategy related to
the Covered Products.
17. Additional Obligations. Nothing contained in the Agreement or
----------------------
the Amendment shall be construed to prohibit Licensee from manufacturing,
distributing, marketing, promoting in any manner, or selling any keratome,
whether or not such keratome is covered by claims of the Licensed Patents or
Licensed Technology.
18. Mold Use and Manufacture. Licensors agree to provide Licensee
------------------------
with single cavity limited production molds ("Limited Production Molds") capable
of producing disposable microkeratomes which are safe and effective for their
intended use. Licensors and Licensee shall share equally in the cost of
manufacturing the Limited Production Molds. In the event the Limited Production
Molds need to be replaced, as determined by the manufacturer thereof, Licensors
and Licensee shall share equally in the cost of such replacement.
The Licensee shall be solely responsible for the design, manufacture,
engineering, tooling and testing of the dual cavity, automatic production molds
(the "Final Production Molds") capable of producing disposable microkeratomes
which are safe and effective for their intended use and shall pay the entire
cost thereof, including all unpaid amounts currently owed therefor. In the event
the Final Production Molds need to be replaced, as determined by the
manufacturer thereof, Licensee shall be solely responsible for the cost of such
replacement.
The Licensors acknowledge and agree that the Final Production Molds
shall be the sole and exclusive property of Licensee. After the Termination Date
(as defined in the Agreement) Licensee agrees to entertain any reasonable offer
from Licensors for the purchase of the Final Production Molds. If, after the
Termination Date, Licensee receives a bona fide offer from a licensee of the
Licensed Patents or the Licensed Technology for the purchase of the Final
Production Molds (the "Offer"), Licensee shall notify Licensors of the existence
and terms and conditions of the Offer. Licensors shall have ten (10) days after
receipt of such notice from Licensee to notify Licensee that Licensors desire to
purchase the Final Production Molds on the same terms and conditions as set
forth in the Offer. If Licensors fail to notify Licensee within said ten (10)
day period, Licensors shall be deemed to have elected not to exercise its option
hereunder. Licensee shall then be free to accept the Offer, but only from such
prospective purchaser and in strict accordance with the terms and conditions of
the Offer. In no event and under no circumstances shall Licensee or LaserSight
sell or transfer the Final Production Molds to any person or entity to whom or
which Licensors have not granted a license to the Licensed Patents or Licensed
Technology.
19. Return of Molds. Within fifteen (15) days following the
---------------
Termination Date, Licensee shall return the Limited Production Molds to
Licensors.
20. Payment of Taxes. Licensors represent that they are not
----------------
subject to any such tax and no taxes should be deducted, however, if any tax is
lawfully imposed and Licensee is required by law to withhold it, Licensee shall
notify Licensors in order to allow Licensors to contest such imposition. All
consideration paid to Licensors pursuant to this Agreement shall not take into
account any national, federal, state, province, municipal or other government
excise, sales, use, occupational or like taxes, duties, customs or penalties now
in force or enacted in the future (collectively, a "Tax"). If any Tax is
imposed, Licensors shall be responsible for the payment of such Tax. If Licensee
is required by law, rule or regulation to pay or withhold any Tax in connection
with any consideration paid to Licensors pursuant to this Agreement, Licensee
shall be entitled to reduce the applicable Fixed Quarterly Payment or Minimum
Quarterly Payment, as applicable, by the amount of any such Tax paid or withheld
by Licensee during the applicable year. The parties agree to use reasonable
efforts to pursue any certificate of exemption or similar document or proceeding
if advised by counsel that consideration paid to Licensors pursuant to this
Agreement may be exempted from any Tax.
21. Product Liability. Licensee agrees to indemnify, defend and
-----------------
hold Licensors their successors and assigns harmless from and against any and
all liability, loss, damage, cost or expense (including reasonable attorneys'
fees and disbursements) arising out of any claims of personal injury or property
damage based on the use, manufacture or sale of the Covered Products
manufactured and sold by Licensee, their subsidiary, affiliated and controlled
companies. At all times during the Term, Licensee shall procure and maintain
product liability insurance coverage related to the Covered Products sold
pursuant to this Agreement in the amount of $2 million per year in the
aggregate. Licensee shall cause Licensors to be named as additional insureds
under any such insurance policy. Evidence of insurance coverage will be made
available to Licensors upon request.
22. Additional Obligations-Liquidated Damages. Upon execution of
-----------------------------------------
this Agreement, Licensors shall deliver and/or provide to Licensee or its
designee:
(a) all engineering and manufacturing drawings, diagrams,
schematics, reports and specifications, xxxx of materials, testing
procedures and testing data, assembly instructions and other related
items utilized in connection with the manufacture of the Device and the
Covered Products, technical support in connection with the filing of
United States Food and Drug Administration ("FDA") form 510(k) and
application for CE xxxx; assistance in establishing and, thereafter,
maintaining the design and associated documentation of the Covered
Products; and
(b) purchase orders for the Molds relating to the Device as
may be necessary for the manufacturer to achieve project schedules.
Licensors acknowledge and agree that Licensee would incur substantial damages in
the event Licensee reasonably determines that Licensors have not satisfied their
obligations set forth in Section 18 and/or this Section 22, and that such
damages would be difficult to calculate. Licensors further acknowledge and agree
that all amounts of money paid and all other property previously paid or
delivered to Licensors by Licensee is a reasonable estimate of Licensee's
damages in the event of default by Licensors pursuant to Section 18 and/or this
Section 22.
23. Confidentiality. Both during and after the Term, none of the
---------------
parties shall in any manner, directly or indirectly, disclose or divulge to any
person or entity (other than such party's employees, agents or consultants) any
information related to the Licensed Patents, the Licensed Technology or other
confidential and proprietary trade secret information disclosed to them pursuant
to this Agreement; provided, that such confidentiality obligations will not
apply to (a) matters of public knowledge in the industry; (b) matters known or
disclosed to any party under no obligation of confidentiality either before
entering this Agreement or thereafter; (c) matters which are required to be
disclosed or divulged by law; and (d) matters which the parties hereto mutually
agree in writing to disclose.
24. Force Majeure. Neither party shall be liable for failure to
-------------
perform hereunder if such failure is occasioned by any cause beyond such party's
control, including, without limitation, war or civil disturbance, fire, flood,
accident, explosion, interruption of transportation, embargo, inability to
procure or shortage of materials or equipment, interruption of production
facilities, governmental order or regulation (including, without limitation, the
FDA), or labor dispute. Suspension of a party's performance for any such cause
shall be limited to the period of time during which such cause is in effect,
plus a reasonable time thereafter. Such suspension shall not affect the running
of the Term and shall not be regarded as a breach of this Agreement.
25. Notice. Every notice, request, demand, and other communication
------
contemplated by this Agreement shall be in writing and deemed to have been made
either when personally delivered to the respective party, or three days after it
is deposited, postage prepaid, with an express mail service, or 10 days after it
is deposited, postage prepaid, in the United States mail to the addresses stated
below or such changed address as any party may give by written notice to the
other, provided that concurrently with such deposits a copy of any notice is
sent by telefacsimile:
If to LICENSORS: Xxxx X. Xxxx, M.D. and
Xxxxxx Xxxxxxx
Xxxxx 000 Xx. 00X-00, Xxxxxxxxx 000
Xxxxxxx xx Xxxxxx, Xxxxxxxx
South America
Facsimile: 00-0-000-0000 - Attn: Xxxxxx Xxxxxxx
Facsimile: 00-0-000-0000 - Attn: Xxxx X. Xxxx, M.D.
with a copy to: Xxxxx X. Xxxxxxxxxxx, Esq.
XxXxxxxxxx Kaine 0000 Xxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: 804-775-3800
If to LICENSEE: LaserSight Technologies, Inc.
00000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: President
Facsimile: 000-000-0000
with a copy to: Xxxxxxx X. Xxxxxxx, Esq.
The Lowenbaum Partnership, L.L.C.
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Facsimile: 000-000-0000
26. Waiver. Neither waiver by either party of any breach or
------
default under this Agreement by the other party, nor the failure of either party
to exercise promptly its rights in the event of such breach or default, shall be
construed as a waiver of any subsequent breach or default, or of any term,
condition or provision of this Agreement.
27. Attorneys Fees. In the event that either party incurs costs
--------------
and fees, including attorneys' fees, in enforcing its or their rights under this
Agreement, the party substantially prevailing in any suit or action, including
any appeal, shall be entitled to recover from the other such costs and
attorneys' fees.
28. Severability. Each provision hereof is intended to be
------------
shall not severable and the invalidity or illegality of any portion of this
Agreement affect the validity or legality of the remainder hereof.
29. Governing Law. The validity, formulation, interpretation and
-------------
performance of this Agreement shall be governed by the laws of the State of
Virginia, without giving effect to choice of law principles. The parties do
hereby irrevocably submit themselves to the personal jurisdiction of the United
States Federal Court for the Eastern District of Virginia, Richmond Division and
do hereby irrevocably agree to service of such court's process upon them, and
with respect to Licensors, on their counsel, Xxxxx X. Xxxxxxxxxxx of XxXxxxxxxx
Kaine, so long as they remain counsel to Licensors and thereafter until such
time as it is verified to Licensee in writing that Licensors' successor counsel
has agreed to accept such service on Licensors' behalf.
30. Entire Agreement. This Agreement represents the entire
----------------
agreement between the parties hereto with respect to the subject matter hereof,
and supersedes all prior or contemporaneous understandings between the parties,
including, without limitation, the Original Agreement and the Amendment. The
parties agree that neither party has any right, claim or interest under the
Original Agreement or the Amendment that is not specifically reflected in this
Agreement. This Agreement may not be amended, supplemented or modified except by
a subsequent written agreement signed by both parties hereto.
31. Assignment. This Agreement and all rights granted pursuant to
----------
its terms shall be personal to Licensee and shall not be assigned, sublicensed
or transferred in whole or in part without the prior written consent of
Licensors; provided, however, Licensee may assign or transfer its interest in
this Agreement in connection with the sale or transfer of all or substantially
all of its assets. Licensors may assign this Agreement, in whole or in part,
provided that Licensors agree to continue to provide technical assistance to
Licensee under Section 8(a). Licensee may sublicense the Patents only for the
purpose of having the Device manufactured and/or in order to sell and distribute
the Device and for no other purpose whatsoever.
32. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original and all of which shall
be deemed one and the same instrument. The English language version of this
Agreement shall be the official version of this Agreement.
33. Captions. The captions contained herein are intended for
--------
convenience of reference only and shall not be used to interpret any of the
terms or provisions hereof.
34. Additional Documents. The parties hereto agree to execute,
--------------------
acknowledge and deliver such further documents as may be necessary or proper to
carry out the purpose and intent of this Agreement.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto, by their respective duly
authorized officers, have executed this Agreement as of the date first written
above.
LICENSORS: XXXX X. XXXX, M.D.
/S/Xxxx X. Xxxx, M.D.
-------------------------
Xxxx X. Xxxx, M.D.
XXXXXX XXXXXXX
/s/Xxxxxx Xxxxxxx
-------------------------
Xxxxxx Xxxxxxx
LICENSEE: LASERSIGHT TECHNOLOGIES, INC.
By: /s/Xxxxxxx X. Xxxxxx
-----------------------
Xxxxxxx X. Xxxxxx, CEO
The undersigned hereby unconditionally guarantees the payment of the
sums described in Section 5 of this Agreement as and when such sums become due
and payable according to the terms thereof. In case of failure of Licensee to
pay the obligations guaranteed hereby, the undersigned agrees to cause such
payment to be made as and when the same shall become due and payable, in the
manner specified in this Agreement and as if such payment were made by Licensee.
The undersigned agrees to those terms of this Agreement which pertain to the
performance by the undersigned. This is a guarantee of payment, not of
collection.
LaserSight Incorporated
By: /s/Xxxxxxx X. Xxxxxx
-----------------------
Xxxxxxx X. Xxxxxx
President and CEO
EXHIBIT A
Licensed Patents
ISSUED PATENTS:
1. United States: U.S. Patent No. 5,133,726/RE35,421
-------------
2. Brazil: Xxx. No. XX0000000
------
3. Columbia: Xxx. No. 144267
--------
4. Taiwan: Xxx. No. 179735
------
5. Portugal: 94986
--------
6. Germany: Xxx. No. 69005285 (derived from EPO Patent 442156)
-------
7. Spain: Xxx. No. 2048415 (derived from EPO Patent 442156)
-----
8. Sweden: Xxx. No. G94986 (derived from EPO Patent 442156)
------
9. Japan: Xxx. No. 0000000
-----
PENDING PATENT APPLICATIONS:
1. Austria Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
2. Belgium Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
3. Switzerland Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
4. Denmark Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
5. France Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
6. United Kingdom Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
7. Greece Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
8. Italy Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
9. Luxembourg Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
10. Netherlands Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
11. Liechtenstein Patent Appln. No. 90201166.7 (derived from EPO Patent 442156)
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
EXHIBIT C
Calendar Quarter for Payment
Which Payment is Due Date Payment is Due1 Requirement2
(Column 1) (Column 2) (Column 3)
1st Quarter 2001 04-30-01 $325,000
2nd Quarter 2001 07-30-01 $425,000
3rd Quarter 2001 10-30-01 $400,000
4th Quarter 2001 01-30-02 $500,000
1st Quarter 2002 04-30-02 $500,000
2nd Quarter 2002 07-30-02 $500,000
3rd Quarter 2002 10-30-02 $367,000
4th Quarter 2002 01-30-03 $250,000
1st Quarter 2003 04-30-03 $250,000
2nd Quarter 2003 07-30-03 $250,000
3rd Quarter 2003 10-30-03 $250,000
4th Quarter 2003 01-30-04 $250,000
1st Quarter 2004 04-30-04 $250,000
2nd Quarter 2004 07-30-04 $250,000
3rd Quarter 2004 10-30-04 $250,000
4th Quarter 2004 01-30-05 $250,000
1st Quarter 2005 04-30-05 $250,000
2nd Quarter 2005 07-30-05 $250,000
3rd Quarter 2005 10-30-05 $150,000
4th Quarter 2005 and each On or before 30 days
calendar quarter thereafter, if this after the end of the $400,000
Agreement is renewed by applicable calendar
Licensee beyond the Initial Term quarter
1 Payment Date for each Fixed Quarterly Payment, Minimum Quarterly Payment or
Quarterly Gross Profit Payment, as applicable, which is payable in connection
with the corresponding calendar quarter indicated in column 1.
2 The amount of each Fixed Quarterly Payment or Minimum Quarterly Payment, as
applicable, which is payable in connection with the corresponding calendar
quarter indicated in column 1.
