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."
Page 1 of 21
PATENT LICENSE AGREEMENT--EXCLUSIVE
PDM and LICENSEE agree as follows:
1. 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 has the authority to enter into this AGREEMENT for the
licensing of rights to this invention.
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.
2. 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 fields 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
Page 2 of 21
continuations; and iv) any reissues, reexaminations,
AND EXTENSIONS OF ALL SUCH PATENTS;
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, or sale 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 actually granted, 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. 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.
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 or in lieu of purchase.
Page 3 of 21
3. GRANT OF RIGHTS
3.01 PDM hereby grants and LICENSEE accepts, subject to the terms
and conditions of this AGREEMENT, an exclusive 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
any LICENSED PRODUCTS in the LICENSED FIELDS OF USE and to
practice and have practiced any LICENSED PROCESSES in the
LICENSED FIELDS OF USE.
3.02 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.
4. 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.
5. ROYALTIES AND REIMBURSEMENT
5.01 LICENSEE agrees to pay to PDM a noncreditable, nonrefundable
license issue royalty fee 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.
Page 4 of 21
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.
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 all such patent expenses incurred
during the previous calendar year(s); or
(b) to pay such expenses directly to the law firm employed by
PDM to handle such functions. However, in such event, PDM 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
Page 5 of 21
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.
5.12 This AGREEMENT will be null and void if the noncreditable,
nonrefundable license issue royalty fee is not paid within 30
days of the execution of this AGREEMENT.
6. 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 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 copies 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
Page 6 of 21
RIGHTS and permit each other to provide comments and
suggestions with respect to the preparation, filing, and
prosecution of LICENSED PATENT RIGHTS, which comments and
suggestions shall be considered by the other party.
7. RECORD KEEPING
7.01 LICENSEE agrees to keep accurate and correct records of
LICENSED PRODUCTS made, used, or sold 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. They 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
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 at least every two 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 funds owed to the PDM under this
AGREEMENT, and whether the amount owed has been paid to the
PDM and is reflected in the records of the Licensee. A report
by the auditor shall be submitted promptly to PDM on
completion. LICENSEE shall pay for the entire cost of the
audit.
8. REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS
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,
sublicensing, marketing, and sales during the preceding
calendar year, as well as plans for the present calendar year.
Page 7 of 21
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 differences. 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 date of 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 sublicensees during the
preceding 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 5 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 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.
Page 8 of 21
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. ss. 552 shall be subject
to the predisclosure notification requirements of 45 CFR ss.
5.65(d).
9. 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.
10. INFRINGEMENT AND PATENT ENFORCEMENT
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
title 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 its use, 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
suit. PDM shall have a continuing right to intervene in such
suit. In all cases, LICENSEE agrees to keep PDM reasonably
Page 9 of 21
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.
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 Xxxxx 00, Xxxxxx
Xxxxxx Code or other statutes, 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 to
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 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 percent (50%) of such expenses exceed
the amount of royalties payable by LICENSEE in any calendar
year, the expenses in excess may be carried over as a credit
on the same basis into 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.
11. 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.
Page 10 of 21
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.
12. TERM, TERMINATION, AND MODIFICATION OF RIGHTS
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
Page 11 of 21
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.
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 Patent Rights, unless LICENSEE can reasonably
demonstrate that the granting of the sublicense would not
materially increase the availability to the public of the
subject matter of the LICENSED PATENT 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. ss. 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.
12.09 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.
13. 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,
Page 12 of 21
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.
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 a 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
Page 13 of 21
of this Agreement, except for appeals of modifications or
termination decisions provided for in Article 13. 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.
13.11 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.
13.12 Paragraph 4.03, 7.01, 8.06-8.08, 11.01-11.05, 12.08, 12.09,
and 13.12 of this AGREEMENT shall survive termination of this
AGREEMENT.
SIGNATURES BEGIN ON NEXT PAGE
Page 14 of 21
PDM PATENT LICENSE AGREEMENT--EXCLUSIVE
SIGNATURE PAGE
For PDM:
--------------------------------------- ------------
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:
-------------------------------------- ------------
Signature of Authorized Official Date
XXX XXXXXX, ESQ.
Printed Name
PRESIDENT
Title
MAILING ADDRESS FOR NOTICES:
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxx 00000
Page 15 of 21
APPENDIX A--Patent(s) or Patent Application(s)
PATENT(S) OR PATENT APPLICATION(S):
UNITED STATES 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: AUG. 12, 2002
Page 16 of 21
APPENDIX B--Licensed Fields of Use and Territory
Licensed Fields of Use: All
Licensed Territory: Worldwide
Page 17 of 21
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 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 $ 15,000
the end of the patent life
----------------------------------- ----------------------------
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.
Page 18 of 21
APPENDIX D--Modifications
PDM and LICENSEE agree to the following modifications to the Articles and
Paragraph of this AGREEMENT:
Page 19 of 21
APPENDIX E--Benchmarks and Performance
LICENSEE agrees to the following BENCHMARKS for its performance under this
AGREEMENT and, within ten (10) days of achieving a BENCHMARK, shall notify PDM
that the BENCHMARK has been achieved.
1) Work with PDM under the previously fully paid and agreed upon
consulting service under a separate arrangement.
2) Under mutually agreeable terms, continue to work together with PDM to
achieve desired result of bringing licensed technology to the market.
Page 20 of 21
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.
Page 21 of 21
