PATENT LICENSE AGREEMENT
between
AMERICAN TELEPHONE AND TELEGRAPH COMPANY
and
CELL ROBOTICS, INC.
Effective as of April 1, 1994
Relating to Optical Traps
PATENT LICENSE AGREEMENT
TABLE OF CONTENTS
ARTICLE I - GRANTS OF LICENSES
1.01 Grant
1.02 Duration
1.03 Scope
1.04 Ability to Provide Licenses
1.05 Publicity
1.06 Infringement Actions
ARTICLE II - ROYALTY AND PAYMENTS
2.01 Royalty Calculation
2.02 Accrual
2.03 Exclusions
2.04 Records and Adjustments
2.05 Reports and Payments
ARTICLE III - TERMINATION
3.01 Breach
3.02 Voluntary Termination
3.03 Survival
ARTICLE IV - MISCELLANEOUS PROVISIONS
4.01 Disclaimer
4.02 Nonassignability
4.03 Addresses
4.04 Taxes
4.05 Choice of Law
4.06 Integration
4.07 Outside the United States
4.08 Dispute Resolution
4.09 Prior Agreement Superseded
DEFINITIONS APPENDIX
PATENT LICENSE AGREEMENT
Effective as of April 1, 1994, AMERICAN TELEPHONE AND TELEGRAPH COMPANY, a New
York corporation ("AT&T"), having an office at 32 Avenue of the Americas, Xxx
Xxxx, Xxx Xxxx 00000, and CELL ROBOTICS, INC., a New Mexico corporation (the
"Corporation"), having an office at 0000 Xxxxxxxxx Xxxxxxx, XX, Xxxxxxxxxxx,
Xxx Xxxxxx 00000, agree as follows:
ARTICLE I
GRANTS OF LICENSES
1.01 Grant
----------
(a) AT&T grants to the CORPORATION under AT&T's PATENT personal and
nontransferable licenses to make, have made, use, lease, sell and import
products of the following kind:
OPTICAL TRAPS
(b) The CORPORATION grants to AT&T personal, non-exclusive, royalty-free
licenses under any and all patents which claim or are otherwise directed to an
invention made by any of the CORPORATION's employees or representatives, which
inventions are related to, or which are an improvement of, the invention
described in AT&T's PATENT.
(c) The licenses granted to the CORPORATION pursuant to Section1.01(a) shall
be exclusive, subject to (i) licenses previously granted to third parties, and
(ii) a license reserved by AT&T for AT&T's and its SUBSIDIARIES own
activities.
1.02 Duration
-------------
All licenses granted herein under any patent shall continue for the entire
unexpired term of such patent.
1.03 Scope
----------
(a) Licenses granted herein are not to be construed either (i) as consent by
either party to any act which may be performed by the other, except to the
extent impacted by a patent licensed herein to that other party, or
----------------------
Any term in capital letter which is defined in the General Definitions
Appendix shall have the meaning specified therein.
(ii) to include licenses to contributorily infringe or induce infringement
under U.S. law or a foreign equivalent thereof.
(b) The grant of each license to a party hereunder includes the right of such
party to grant sublicenses within the scope of such license to that party's
SUBSIDIARIES for so long as they remain its SUBSIDIARIES. Any such sublicense
may be made effective retroactively, but not prior to the effective date
hereof, nor prior to the sublicensee's becoming a SUBSIDIARY of the party.
1.04 Ability to Provide Licenses
--------------------------------
AT&T's failure to meet any obligation hereunder, due to the assignment of
title to any invention or patent, or the granting of any licenses, to the
United States Government or any agency or designee thereof pursuant to a
statute or regulation of, or contract with, such Government or agency, shall
not constitute a breach of this agreement.
1.05 Publicity
--------------
Nothing in this agreement shall be construed as conferring upon the
CORPORATION or its SUBSIDIARIES any right to include in advertising, packaging
or other commercial activities related to a LICENSED PRODUCT, any reference to
AT&T (or any of its SUBSIDIARIES), its trade names, trademarks or service
marks in a manner which would be likely to cause confusion or to indicate that
such LICENSED PRODUCT is in any way certified by AT&T or its SUBSIDIARIES.
1.06 Infringement Actions
-------------------------
For as long as the CORPORATION retains an exclusive license pursuant to
Section 1.01(c) of this agreement, the CORPORATION shall have the exclusive
right to bring any legal action against any third party, not licensed by AT&T
prior to the effective date hereof, for infringement of AT&T's PATENT;
provided, however, that the CORPORATION agrees to pay, or to reimburse AT&T,
all costs and expenses of AT&T relating to or resulting from any such legal
action, whether or not AT&T is joined as party thereto.
ARTICLE II
ROYALTY AND PAYMENTS
2.01 Royalty Calculation
------------------------
(a) Subject to Section 2.01(b) and Section 2.01(c), royalty shall be payable
to AT&T at the rate of five percent (5%) on each REPORTABLE PRODUCT which is
sold, leased or put into use by the CORPORATION, or any of its SUBSIDIARIES.
Such royalty rate shall be applied, except as otherwise provided in this
Article II, to the FAIR MARKET VALUE of such REPORTABLE PRODUCT.
(b) Notwithstanding Section 2.01(a), the following minimum amounts shall be
payable for the twelve (12) month period beginning on April 1st of each of the
years specified:
1994 - $ 25,000.00 2005 - $ 500,000.00
1995 - $ 50,000.00 2006 - $ 500,000.00
1996 - $ 100,000.00 2007 - $ 500,000.00
1997 - $ 150,000.00 2008 - $ 250,000.00
1998 - $ 200,000.00 2009 - $ 250,000.00
1999 - $ 250,000.00 2010 - $ 250,000.00
2000 - $ 300,000.00 2011 - $ 250,000.00
2001 - $ 350,000.00 2012 - $ 250,000.00
2002 - $ 400,000.00 2013 - $ 250,000.00
2003 - $ 450,000.00 2014 - $ 125,000.00
2004 - $ 500,000.00 2015 - $ 125,000.00
(c) In the event that the royalty payable for any year specified in Section
2.01(b), as calculated in accordance with Section 2.01(a), reaches three (3)
times the minimum amount specified in Section 2.01(b) for such year ("the
First Reduction Level"), then the royalty rate applicable pursuant to Section
2.01(a) to the FAIR MARKET VALUE of additional REPORTABLE PRODUCTS sold,
leased or put into use during such year, after achievement of the First
Reduction Level for such year, shall be reduced to four and one-half percent
(4.5%).
(d) In the event that the royalty payable for any year specified in Section
2.01(b), as calculated in accordance with Section 2.01(a), reaches five (5)
times the minimum amount specified in Section 2.01(b) for such year ("the
Second Reduction Level"), then the royalty rate applicable pursuant to Section
2.01(a) to the FAIR MARKET VALUE of additional REPORTABLE PRODUCTS sold,
leased or put into use during such year, after achievement of the Section
Reduction Level for such year, shall be further reduced to four percent (4%).
----------------------
Based on premise that corresponding patents will be in force in Japan and
Europe.
Based on premise that European patents expire this year. Otherwise,
schedule will be adjusted to reflect actual year of expiration of the
patents, using corresponding rates.
2.01 Accrual
------------
(a) Royalty shall accrue on any LICENSED PRODUCT upon its first becoming a
REPORTABLE PRODUCT and shall become payable upon the first sale, lease or
putting into use of such REPORTABLE PRODUCT. (Rebuilding or enlarging any
product shall be deemed to be a first putting into use of such product).
Obligations to pay accrued royalties shall survive termination of licenses and
rights pursuant to Article III and the expiration of any payment.
(b) When a company ceases to be a SUBSIDIARY of the CORPORATION, royalties
which have accrued with respect to any products of such company, but which
have not been paid, shall become payable with the CORPORATION's next scheduled
royalty payment.
(c) Notwithstanding any other provisions hereunder, royalty shall accrue and
be payable only to the extent that enforcement of the CORPORATION's obligation
to pay such royalty would not be prohibited by applicable law.
2.03 Exclusions
---------------
A LICENSED PRODUCTS, which is a REPORTABLE PRODUCT on account of AT&T's
PATENT, may be treated by the CORPORATION as not licensed an not subject to
royalty with respect to sales of such LICENSED PRODUCT if the purchaser is
licensed under the same patent to have said LICENSED PRODUCT made and/or
imported, and the purchaser advises the CORPORATION, in writing at or prior to
the time of such sale, that it is exercising its own license under such patent
with respect to such manufacture and/or importation.
2.04 Records and Adjustments
----------------------------
(a) The CORPORATION shall keep full, clear and accurate records with respect
to all REPORTABLE PRODUCTS and shall furnish any information which AT&T may
reasonably prescribe from time to time to enable AT&T to ascertain the proper
royalty due hereunder on account of products sold, leased and put into use by
the CORPORATION or any of its SUBSIDIARIES. AT&T shall have the right through
its accredited auditors to make an examination, during normal business hours,
of all records and accounts bearing upon the amount of royalty payable to it
hereunder. Prompt adjustment shall be made to compensate for any errors or
omissions disclosed by such examination.
(b) Independent of any such examination, AT&T will credit to the CORPORATION
the amount of any overpayment of royalties made in error which is identified
an fully explained in a written notice to AT&T delivered within eighteen (18)
months after the due date of the payments which included such alleged
overpayment, provided that AT&T is able to verify, to its own satisfaction ,
the existence and extent of the overpayment.
(c) No refund, credit or other adjustment of royalty payments shall be made
by AT&T except as provided in this Section 2.04. Rights conferred by this
Section 2.04 shall not be affected by any statement appearing on any check or
other document, except to the extent that any such right may be expressly
waived or surrendered by a party having such right and signing such statement.
2.05 Reports and Payments
-------------------------
(a) Within sixty (60) days after the end of each semiannual period ending on
April 30th or October 31st, commencing with the semiannual period ending on
October 31, 1994, the CORPORATION shall furnish to AT&T at the address
specified in Section 4.03 a statement certified by a responsible official of
the CORPORATION showing in a manner acceptable to AT&T:
(i) all REPORTABLE PRODUCTS which were sold, leased or put into use
during such semiannual period, (ii) the FAIR MARKET VALUES of such
REPORTABLE PRODUCTS, (iii) the amount of royalty payable thereon without
regard to the minimum payment amounts specified in Section 2.01(b), and
(iv) all exclusions from royalty pursuant to Section 2.03.
If no REPORTABLE PRODUCT has been so sold, leased or put into use, the
statement shall show that fact.
(b) Within such sixty (60) days the CORPORATION shall pay in United States
dollars to AT&T at the address specified in Section 4.03 either (i) the
royalties payable in accordance with such statement or (ii) one half of the
minimum amount specified in Section 2.01(b) for the year of such semiannual
period, whichever is greater provided, however, that the payment to be made
for the second semiannual period of each such year may be adjusted such that
the total payment for the year is no greater than the minimum amount for the
year if the royalty payable for the year pursuant to Section 2.01(a) does not
exceed such minimum amount. Any conversion to United States dollars shall be
at the prevailing rate for bank cable transfers as quoted for the last day of
such semiannual period by leading United States banks in New York City dealing
in the foreign exchange market.
(c) Overdue payments hereunder shall be subject to a late payment charge
calculated at an annual rate of three percent (3%) over the prime rate or
successive prime rates (as posted in New York City) during delinquency. If
the amount of such charge exceeds the maximum permitted by law, such charge
shall be reduced to such maximum.
ARTICLE III
TERMINATION
3.01 Breach
-----------
(a) In the event of a breach of this agreement by the CORPORATION, AT&T may,
in addition to any other remedies that it may have, at any time terminate all
licenses and rights granted by it hereunder by not less than two (2) months'
written notice specifying such breach, unless within the period of such notice
all breaches specified therein shall have been remedied.
(b) In the event that, during any year specified in Section 2.01(b), the
CORPORATION shall pay to AT&T less than the minimum amount specified in
Section 2.01(b), but not less than twenty-five (25%) of such minimum amount,
the failure to pay such minimum amount shall not be considered a breach of
this agreement. However, upon the occurrence of such event:
(i) the licenses granted to the CORPORATION pursuant to Section 1.01(b)
shall, notwithstanding Section 1.01(c), immediately become
nonexclusive, and the CORPORATION shall lose any and all right
thereafter to bring any legal action for any infringement of AT&T's
PATENT; and
(ii) each remaining minimum amount specified in Section 2.01(b) shall
thereupon be reduced to twenty-five (25%) thereof.
3.02 Voluntary Termination
--------------------------
By written notice to AT&T, the CORPORATION may voluntarily terminate all or a
specified portion of the licenses and rights granted to it hereunder. Such
notice shall specify the effective date (not more than six (6) months prior to
the giving of said notice) of such termination and shall clearly specify any
affected invention or product.
3.03 Survival
-------------
Any termination of licenses and rights of the CORPORATION under the provisions
of this Article III shall not affect the CORPORATION's licenses rights and
obligation with respect to any LICENSED PRODUCT made prior to such
termination.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.01 Disclaimer
---------------
Neither AT&T nor any of its SUBSIDIARIES makes any representations, extends
any warranties of any kind, assumes any responsibility or obligations
whatever, or confers any right by implication, estoppel or otherwise, other
than the licenses an rights herein expressly granted.
4.02 Nonassignability
---------------------
(a) AT&T has entered into this agreement in contemplation of personal
performance by the CORPORATION and it is AT&T's intention that a transfer of
the CORPORATION's licenses or rights not occur without AT&T's express written
consent.
(b) Neither this agreement nor any licenses or rights hereunder, in whole or
in part, shall be assignable or transferable by the CORPORATION (by operation
of law or otherwise) without AT&T's express written consent.
(c) Any purported assignment or transfer of this agreement or licenses or
rights hereunder by the CORPORATION without AT&T's necessary consent shall be
void (without affecting any other licenses or rights hereunder).
(d) AT&T shall not unreasonably withhold its written consent to any such
assignment.
4.03 Address
------------
(a) Any notice or other communication hereunder shall be sufficiently given
to the CORPORATION when sent by certified mail addressed to President, Cell
Robotics, Inc., 0000 Xxxxxxxxx Xxxxxxx, XX, Xxxxxxxxxxx, Xxx Xxxxxx 00000, or
to AT&T when sent by certified mail addressed to Contract Administrator,
Intellectual Property, 00 Xxxxxxxxxxxx Xxxxxxxxx, X.X. Xxx 0000, Xxxxxx, Xxx
Xxxxxx 00000-0000. Changes in such addresses may be specified by written
notice.
(b) Payments by the CORPORATION shall be made to AT&T at the address
specified in this section. Alternatively, payments to AT&T may be made by
bank wire transfers to AT&T's accounts: AT&T Licensing, Account No. 910-2-
568475, at Chase Manhattan Bank, N.A., 4 Chase Metrotech Center, Brooklyn, New
York 11245, United States of America. Changes in such address or account may
be specified by written notice.
4.04 Taxes
----------
The CORPORATION shall pay any tax, duty, levy, customs fee, or similar charge
("taxes"), including interest and penalties thereon, however designated,
imposed as a result of the operation or existence of this agreement, including
taxes which the CORPORATION is required to withhold or deduct from payments to
AT&T, except (i) net income taxes imposed upon AT&T by any governmental entity
within the United States (the fifty (50) states and the District of Columbia),
and (ii) net income taxes imposed upon AT&T by jurisdictions outside the
United States which are allowable as a credit against the United States
Federal income tax of AT&T or any of its SUBSIDIARIES. In order for the
exception in (ii) to be effective, the CORPORATION must furnish AT&T any
evidence required by the United States taxing authorities to establish that
such taxes have been paid.
4.05 Choice of Law
------------------
The parties are familiar with the principles of New York commercial law, and
desire and agree that the law of the State of New York shall apply in any
dispute arising with respect to this agreement.
4.06 Integration
----------------
This agreement (including the General Definitions Appendix) sets forth the
entire agreement and understanding between the parties as to the subject
matter hereof and merges all prior discussions between them. Neither of the
parties shall be bound by any warranties, understandings or representations
with respect to such subject matter other than as expressly provided herein or
in a writing signed with or subsequent to execution hereof by an authorized
representative of the party to be bound thereby.
4.07 Outside The United States
------------------------------
(a) There may be countries in which the CORPORATION may have, as a
consequence of this agreement, rights against infringers of AT&T's PATENT.
The CORPORATION hereby waives any such right it may have by reason of any
third party's infringement or alleged infringement of such patent.
(b) The CORPORATION hereby agrees to register or cause to be registered, to
the extent required by applicable law, and without expense to AT&T or any of
its SUBSIDIARIES, any agreements wherein sublicenses are granted by it under
AT&T's PATENT. The CORPORATION hereby waives any and all claims or defenses,
arising by virtue of the absence of such registration, that might otherwise
limit or affect its obligations to AT&T.
4.08 Dispute Resolution
-----------------------
(a) If a dispute arises out of or relates to this agreement, or the breach,
termination or validity thereof, the parties agree to submit the dispute to a
sole mediator selected by the parties or, at any time at the option of a
party, to mediation by the American Arbitration Association ("AAA"). If not
thus resolved, it shall be referred to a sole arbitrator selected by the
parties within thirty (30) days of the mediation, or in the absence of such
selection, to AAA arbitration which shall be governed by the United States
Arbitration Act.
(b) Any award made (i) shall be a bare award limited to a holding for or
against a party and affording such remedy as is deemed equitable, just and
within the scope of the agreement; (ii) shall be without findings as to issues
(including but not limited to patent validity and/or infringement) or a
statement of the reasoning on which the award rests; (iii) may in appropriate
circumstances (other than patent disputes) include injunctive relief; (iv)
shall be made within four (4) months of the appointment of the arbitrator; and
(v) may be entered in any court.
(c) The requirement for mediation and arbitration shall not be deemed a
waiver of any right of termination under this agreement and the arbitrator is
not empowered to act or make any award other than based solely on the rights
and obligations of the parties prior to any such termination.
(d) The arbitrator shall determine issues of arbitrability but may not limit,
expand or otherwise modify the terms of the agreement.
(e) The agreement shall be interpreted in accordance with the laws of the
State of New York exclusive of its conflict of laws provisions and the place
of mediation and arbitration shall be New York City.
(f) Each party shall bear its own expenses but those related to the
compensation and expenses of the mediator and arbitrator shall be borne
equally.
(g) A request by a party to a court for interim measures shall not be deemed
a waiver of the obligation to mediate and arbitrate.
(h) The arbitrator shall not have authority to award punitive or other
damages in excess of compensatory damages and each party irrevocably waives
any claim thereto.
(i) The parties, their representatives, other participants and the mediator
and arbitrator shall hold the existence, content and result of mediation and
arbitration in confidence.
4.09 Prior Agreement Superseded
-------------------------------
This agreement supersedes the November 1, 1990 Patent License Agreement
between the parties relating to OPTICAL TRAPS.
IN WITNESS WHEREOF, each of the parties has caused this agreement to be
executed in duplicate originals by its duly authorized representatives on the
respective dates entered below.
AMERICAN TELEPHONE AND TELEGRAPH COMPANY
By:
--------------------------------------
Vice President, Intellectual Property
Date:
------------------------------------
CELL ROBOTICS, INC.
By:
--------------------------------------
Title:
-----------------------------------
Date:
------------------------------------
THIS AGREEMENT DOES NOT BIND OR OBLIGATE EITHER PARTY
IN ANY MANNER UNLESS DULY EXECUTED BY AUTHORIZED
REPRESENTATIVE OF BOTH PARTIES
GENERAL DEFINITIONS APPENDIX
AT&T's PATENT means U.S. Patent 4,893,886, any reissue thereof, and any
foreign patent corresponding thereto.
FAIR MARKET VALUE means, with respect to any OPTICAL TRAP sold, leased or put
into use, the greater of (i) the selling price which a seller would realize
from an unaffiliated buyer in an arm's length sale of an identical OPTICAL
TRAP in the same quantity and at the same time and place as such sale, lease
or putting into use; or (ii) the selling price actually obtained for such
OPTICAL TRAP in the form in which it is sold, whether or not assembled (and
without excluding from such OPTICAL TRAP any components or subassemblies
thereof which are included in such selling price).
In determining "selling price" the following shall be excluded:
(a) usual trade discounts actually allowed to unaffiliated persons or
entities;
(b) packing costs;
(c) costs of insurance and transportation; and
(d) import, export, excise, sales and value added taxes, and customs
duties.
LICENSED PRODUCT means any product of the kind specified in Section 1.0(a).
REPORTABLE PRODUCT means any LICENSED PRODUCT the manufacture, importation,
sale, lease or use of which by the CORPORATION or any of its SUBSIDIARIES
would but for licenses or rights under this agreement, constitute (i)
infringement of AT&T's PATENT by the CORPORATION or its SUBSIDIARIES, or (ii)
any other violation of applicable law by the CORPORATION or its SUBSIDIARIES
for which AT&T or any of its SUBSIDIARIES would be entitled to compensation or
other remedy on account of such patent.
SUBSIDIARY of a company means a corporation or other legal entity (i) the
majority of whose shares or other securities entitled to vote for election of
directors (or other managing authority) is now or hereafter controlled by such
company either directly or indirectly; or (ii) which does not have outstanding
shares or securities but the majority of the equity interest in which is now
or hereafter owned and controlled by such company either directly or
indirectly; but any such corporation or other legal entity shall be deemed to
be a SUBSIDIARY of such company only as long as such control or ownership and
control exists. Sandia Corporation, a Delaware corporation established to
operate Sandia National Laboratories for the United States Government, is
deemed not to be a SUBSIDIARY of AT&T.
TECHNICAL DEFINITIONS:
----------------------
OPTICAL TRAP shall mean any instrumentality or aggregate of instrumentalities
which by itself, or when attached to a microscope, serves to confine a
biological sample in a single beam, gradient force optical trap with a
wavelength of between 0.8um and 1.8um optical beam and shall include any
auxiliary equipment locally associated therewith for performing the function
thereof.
