EXHIBIT 10.3
TECHNOLOGY LICENSE AGREEMENT
This License Agreement ("Agreement") is made and entered into as of the
October 23, 1998, by and between SurgiJet, Inc., a California corporation
("Company") and VisiJet, Inc., a California corporation ("LICENSEE"), with
respect to the following facts:
A. COMPANY has invented or possesses the rights to the inventions set
forth in Exhibit A ("Devices");
B. LICENSEE desires to obtain from COMPANY, and COMPANY desires to
grant to LICENSEE, pursuant to the terms and conditions herein, a license in and
to such devices and any and all technology related thereto.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. DEFINITIONS
1.1 Device. The term "Devices" as used in this Agreement shall mean
those Devices invented by COMPANY and described on EXHIBIT A attached hereto.
The use of the plural may be substituted by the use of the singular where
necessary for interpretation of the terms of this Agreement.
1.2 Technology. The term "Technology" as used in this Agreement shall
mean all information, data and know-how, including, but not limited to,
inventions, creations, idea, discoveries, copyrights, mask works, programs, and
trade secrets, in whatever form or medium, owned or developed by COMPANY,
relating to the Devices, and all improvements, modifications, enhancements,
refinements and the like thereto (whether patentable or unpatentable) owned or
developed by COMPANY, and all United States and foreign patent applications and
patents, whether filed or issued now or in the future, with respect thereto.
1.3 "Net Sales" means the gross revenue derived by LICENSEE and/or its
sublicensees from any products utilizing the Technology or based all or
substantially on the Devices, whether or not assembled (and without excluding
therefrom any components or subassemblies thereof, whatever their origin and
whether or not patent impacted), less the following items but only insofar as
they actually pertain to the disposition of such products by LICENSEE or its
sublicensees, are included in such gross revenue, and are separately billed:
(a) Import, export, excise and sales taxes, and custom duties;
(b) Costs of insurance, packing, and transportation from the
place of manufacture to the customer's premises or point of installation;
(c) Costs of installation at the place of use; and
(d) Credit for returns, allowances, or trades.
1.4 "Licensed Field of Use" means the medical and surgical fields
related to ophthalmological applications.
1.5 "Licensed Territory" means the territory set forth is EXHIBIT B
attached hereto.
1.6 "Exclusive" means that, subject to any provisions to the contrary
in this Agreement, COMPANY shall not grant further licenses in the Licensed
Territory in the Licensed Field of Use.
2. GRANT OF LICENSE
COMPANY hereby grants to LICENSEE an Exclusive license (including the
right to grant sublicenses) in and to the Devices and the Technology, within the
Licensed Field of Use and the Licensed Territory, for a period of twenty five
(25) years from the date hereof, for the purposes of making, having made, using
and selling the Devices.
3. FEES, ROYALTIES AND SUBLICENSING ROYALTIES
3.1 Payment. As consideration for the license granted hereunder,
LICENSEE shall pay to COMPANY earned royalties on Net Sales as follows: five
percent (5%) of the Net Sales for such period of time equal to the duration of
the license contemplated under this Agreement (the "Running Royalties"). All
Running Royalties shall be paid by LICENSEE to COMPANY on or before 45 days
after March 31st, June 30th, September 30th and December 31st of each calender
year of the license contemplated is this Agreement, and shall be submitted
together with a statement of Running Royalties for each such applicable period
setting forth the calculation thereof.
3.2 Running Royalties on sales in currencies other than U.S. Dollars
shall be calculated using the appropriate foreign exchange rate for such
currency quoted by the Bank of America (San Francisco) foreign exchange desk, on
the close of business on the last banking day of each calendar quarter. All
royalty payments to COMPANY shall be in U.S. Dollars. All non U.S. taxes related
to royalty payment shall be paid by LICENSEE and are not deductible from the
payments due COMPANY.
3.3 In the event of any sublicense pursuant to Article 10 herein,
LICENSEE shall pay to COMPANY one-half of all royalties received by LICENSEE
from its sublicensees is excess of that which is payable to COMPANY pursuant to
this Article 3. LICENSEE may retain the remainder of such income from
sublicensees.
3.4 Cessation of Payment. If on the date (the "Two Year Date"), which
is two (2) yeas after the day first set forth above, there does not exist a
valid United Sates patent showing COMPANY as the inventor and covering any one
or more aspects of the Devices, then from and after the Two Year Date no Fees,
Royalties or Sublicensing Royalties shall be due or payable by LICENSEE to
COMPANY pursuant to Section 3.1 above for the affected Devices, but the license
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granted by COMPANY to LICENSEE pursuant to Article 2 above shall remain is full
force and effect. In addition, if on the Two Year Date there does exist a valid
United Sates patent showing COMPANY as the inventor and covering any one or more
aspects of the Devices, but at any date thereafter there is no patent covering
one or more aspects of the Devices that is valid or enforceable, then from and
after such date no Fees, Royalties or Sublicensing Royalties shall be due or
payable by LICENSEE to COMPANY pursuant to Section 3.1 above for the affected
Devices, but the license granted by COMPANY to LICENSES pursuant to Article 2
above shall remain is full force and effect. Notwithstanding either of the
immediately foregoing sentences, if at any time after the Two Year Date LICENSEE
desires to make or have made the Devices, and such making or having made the
Devices would not (without regard to any license, covenant not to xxx, consent
or other agreement or arrangement with any third party) infringe any proprietary
rights of any third party, then LICENSEE will pay COMPANY Fees, Royalties and
Sublicensing Royalties reduced by a rate negotiated in good faith by LICENSEE
and COMPANY.
3A. ROYALTY REPORTS, PAYMENTS, AND ACCOUNTING
3A.1 Beginning with the first sale of any products utilizing the
Technology or based all or substantially all on a Device, LICENSEE shall make
quarterly written reports (even if there are no sales) and Running Royalty
payments to COMPANY on the dates set forth in Article 3. The reports shall be in
a form of mutually agreeable to the parties and shall state the number,
description, and aggregate Net Sales of Licensed Products during such completed
calendar quarter, and resulting calculation pursuant to Article 3 of the Running
Royalty payment due COMPANY for such completed calendar quarter. Concurrent with
the making of each such report, LICENSEE shall include the payment due COMPANY
for the Running Royalty for the calendar quarter covered by such report.
3A.2 LICENSEE agrees to keep and maintain records for a period of three
(3) years showing the manufacture, sale, use, and other disposition of products
sold or otherwise disposed of under the license herein granted. Such records
will include general ledger records showing cash receipts and expenses, and
records which include production records, customers, serial numbers, and related
information in sufficient detail to enable the royalties payable hereunder by
LICENSEE to be determined. LICENSEE further agrees to permit its books and
records to be examined by COMPANY from time to time to the extent necessary to
verify the reports provided for in Paragraph 3A.1. Such examination is to be
made by COMPANY or its designee, at the expense of COMPANY, except is the event
that the results of the audit reveal an under-reporting of royalties due COMPANY
of five percent (5%) or more, then the audit costs shall be paid by LICENSEE.
4. PRODUCT PROTOTYPE DEVELOPMENT
4.1 COMPANY's Contribution. COMPANY shall provide to LICENSEE all
Technology ('including, without limitation, all schematics and technical and
other information) owned, known or possessed by it. COMPANY shall use its best
efforts to cooperate and assist is the development of the prototype of that
Devices. Unless otherwise specifically agreed to in writing by LICENSEE, COMPANY
shall not be entitled to any compensation or reimbursement of expenses (other
than the Fees, Royalties and Sublicensing Royalties as provided for is Article 3
above) in consideration of the foregoing.
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4.2 LICENSEE'S Contribution. LICENSEE shall use its best efforts to
develop prototypes of the Devices and to provide the programming necessary for
the operation of the Devices. LICENSEE'S failure to satisfy either of the
foregoing obligations shall not be or be deemed to be a breach of this
Agreement, but the license granted by COMPANY to LICENSEE pursuant to Article 2
above shall revert to COMPANY, subject to the obligation of COMPANY to reimburse
LICENSEE for any and all expenses incurred by LICENSEE in connection with the
filing of any patent applications with respect to the Devices, with such
reimbursement to come from any movies obtained by COMPANY from exploiting
(whether by license, sale or otherwise) the Devices, with the understanding that
all such movies shall first go to LICENSEE until LICENSEE has been fully
reimbursed for any and all such expenses.
5. WARRANTIES
5.1 Standing. COMPANY represents that it is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
California, with all corporate powers necessary to own its assets and property
and to carry on its business as so owned and conducted.
5.2 Authority. COMPANY represents and warrants that it has full power
and authority to execute and deliver this Agreement, to grant the license
granted herein and to perform its obligations hereunder.
5.3 Negation of Warranties. Nothing in this Agreement is or shall be
construed as:
(a) A warranty or representation that anything made, used,
sold, or otherwise disposed of under any license granted or contemplated by this
Agreement is or will be free from infringement of patents, copyright, and other
rights of third Parties;
(b) An obligation to bring or prosecute actions or suit
against third parties for infringement, except to the extent and in the
circumstances described in Article 8; or
(c) An obligation to furnish any technology or technological
information other than that contemplated herein.
5.4 Except as expressly set forth is this Agreement, COMPANY MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE LICENSED PRODUCTS WILL
NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK OR OTHER RIGHTS OR ANY OTHER
EXPRESS OR IMPLIED WARRANTIES.
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6. PATENT APPLICATIONS AND PATENTS
To the extent LICENSEE determines that one or more aspects of the
Devices are patentable, LICENSEE shall file and prosecute or cause to be filed
and prosecuted one or more applications for a United States patent or patents
covering one or more aspect of the Devices. LICENSEE shall have the right to
file and prosecute or cause to be filed and prosecuted one or more applications
for a foreign patent or patents covering one or more aspects of the Devices.
COMPANY shall be shown as an inventor of record on all such United States and
foreign patent applications and all United States and foreign patents issued
thereon shall be subject to the Patent License Agreement entered into by the
COMPANY and the LICENSEE concurrently herewith. All costs and expenses relating
to, and the control of (including, without limitation, matters relating to
filing, prosecution, reissue, reexamination and withdrawal) such patent
applications shall be the exclusive responsibility of LICENSEE in its sole and
absolute discretion.
7. CONFIDENTIALITY
7:1 Obligation. COMPANY and LICENSEE each acknowledge that this
Agreement may require the disclosure by the other to it of the other's
confidential and proprietary information ("Confidential Information"). COMPANY
and LICENSEE each shall at all times regard and preserve such Confidential
Information as secret and confidential and shall not publish or disclose any of
such Confidential Information in any manner to any third parry without the prior
written consent of the other party in each instance, which consent ,may not be
unreasonably withheld.
7.2 Non-Confidential Information. The following shall not be considered
to be Confidential Information: (i) information that is publicly known or which
becomes publicly known through no fault of either party; (ii) information that
is lawfully obtained by either party from a third party (which itself lawfully
obtained the Confidential Information and has no obligation of confidentiality);
and (iii) information that is in the lawful possession of a party, as documented
by its records, prior to such information having been initially disclosed by the
other party. COMPANY and LICENSEE shall bear the burden of proof with respect to
establishing that any of its claimed Confidential Information falls within any
of the foregoing exceptions.
7.3 Publication. Neither COMPANY nor LICENSEE shall publish or arrange
for the publication in any scientific, trade or other publication information
concerning the Technology without the other's prior written consent is each
instance, which consent may not be unreasonably withheld.
7.4 Injunctive Relief. COMPANY and LICENSEE each acknowledges that in
the event of any breach or default by it of this Article 7, the other party, in
addition to any other available rights or remedies, shall be entitled to
specific performance, injunctive relief and any other equitable remedy.
8. INFRINGEMENT
In the event that either party learns of facts which it concludes might
constitute an actual, threatened or alleged infringement ("Infringement") of any
of COMPANY's or LICENSEE'S rights in or to the Devices or the Technology by any
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third party, the party, learning of such facts shall promptly notify the other
party is writing, setting forth such facts and the basis for its conclusion, and
shall include is such notice any other reasonably available evidence in support
thereof. The Infringement shall be treated as follows:
8.1 Pursuit by Licensee. LICENSEE shall have the obligation to take all
appropriate action against the infringing party and LICENSEE shill pay all costs
and expenses (including without limitation attorneys' fees and costs of
investigation and experts) incurred in connection with such action. Any legal
counsel engaged by LICENSEE shall be reasonably satisfactory to COMPANY.
COMPANY, at LICENSEE's expense, shall have the right to participate in, and, to
the extent that it may wish, to jointly assume the prosecution of such action
with counsel reasonably satisfactory to LICENSEE. LICENSEE shall obtain the
consent of COMPANY prior to settling any such action. If LICENSEE shall fail to
take all appropriate action as specified hereunder, then COMPANY shall have the
right to take such action and LICENSEE shall pay or reimburse COMPANY for all
costs and expenses (including without limitation attorneys' fees and costs of
investigation and experts) incurred in connection with such action.
8.2 Proceeds. Any proceeds from any settlement or judgment of any
infringement claim, action, suit or proceeding brought by LICENSEE shall be
allocated and/or paid within thirty (30) days of receipt thereof as follows: (i)
first to reimburse LICENSEE (and COMPANY, pari passu to the extent that it has
not otherwise been reimbursed for attorneys' fees, costs and expenses incurred
in connection with participation in the prosecution of such infringement) for
attorneys' fees and other costs and expenses reasonably incurred in connection
with the prosecution or other efforts to terminate the infringement pursuant to
the terms of this Agreement; and (ii) thereafter, the remainder shall be divided
equally between the parties.
8.3 Equitable Relief. Any equitable relief, including, without
limitation, declaratory and injunctive relief, whether or not obtained in
conjunction with the recovery of monetary damages, shall inure to the benefit of
both COMPANY and LICENSEE.
8.4 Nominal Plaintiff. Notwithstanding any provision of this Article 8,
in the event any infringement action, suit or proceeding is brought hereunder by
either party to enforce any rights in or to the Devices or the Technology, each
party, if legally necessary, shall, upon the written request of the other party,
be named, joined and participate therein as a nominal plaintiff.
9. TERMINATION
9.1 LICENSEE may terminate this Agreement only by giving COMPANY
notice, in writing at least thirty (30) days in advance of the effective date of
the proposed termination selected by LICENSEE, of good cause for termination of
the Agreement, and COMPANY fails to remedy any such cause within thirty (30)
days after such notice. For the purposes of this Section 9.1, the term "good
cause" shall mean the failure or breach of any representation or warranty made
by COMPANY in Article 5 of this Agreement, with the exception that LICENSEE
shall be deemed to have waived any misrepresentation or breach of representation
or warranty of which such party had knowledge before the effective date of this
Agreement.
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9.2 COMPANY may terminate this Agreement if LICENSEE:
(a) Is in default in payment of royalty or providing of
reports;
(b) Becomes a bankrupt or is insolvent;
(c) Is in breach of any provision hereof; or
(d) Provides any false report;
and LICENSEE fails to remedy any such default, breach, or false report within
(30) days after written notice thereof by COMPANY.
9.3 Surviving any termination are:
(a) LICENSEE's obligation to pay royalties accrued or
accruable;
(b) Any cause of action or claim of LICENSEE or COMPANY,
accrued or to accrue, because of any breach or default by the other party; and
(c) All of LICENSEE's covenants and agreements contained
herein with respect to confidentiality and secrecy.
10. SUBLICENSES
10.1 LICENSEE may grant sublicenses during the term of the license of
any Devices or Technology contemplated hereunder as set forth herein and only
pursuant to express written consent of COMPANY, such written consent not to be
unreasonably withheld.
10.2 If LICENSEE ix unable or unwilling to serve or develop any of the
Devices or Technology contemplated hereunder and for which there are willing
sublicensees, LICENSEE will, at COMPANY'S request, negotiate in good faith all
necessary sublicenses hereunder.
10.3 Any sublicenses granted by LICENSEE under this Agreement shall be
subject and subordinate to terms and conditions of this Agreement, except:
(a) Sublicense terms and conditions shall reflect that any
sublicensees shall not further sublicense; and
(b) The royalty rate specified in the subliceases may be at a
higher rate than the rate in this Agreement.
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Any such subliceases also shall expressly include the provisions of all Articles
of this Agreement for the benefit of COMPANY and provide for the transfer of all
obligations, including the payment of royalties specified in such sublicenses,
to COMPANY or its designee, in the event that this Agreement is terminated.
10.4 LICENSEE agrees to provide COMPANY a copy of any sublicense
granted pursuant to this Article 10.
11. FAILURE TO EXPLOIT THE DEVICES
If LICENSEE fails to market the Devices for any continuous period of
two (2) years, then the license granted by COMPANY to LICENSEE pursuant to
Article 2 , above shall revert to COMPANY.
12. NOTICE
All notices under this Agreement shall be deemed to have been fully
given when done in writing and deposited in the United States mail, registered
or certified, and addressed as follows:
To COMPANY: SurgiJet, Inc.
00X Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
To LICENSEE: VisiJet, Inc.
00X Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Either party may change its address upon written notice to the other
party.
13. CONSTRUCTION
13.1 This Agreement shall be governed by the laws of the United States
and of the state of California applicable to agreements negotiated, executed and
performed wholly within California.
13.2 The failure of COMPANY to enforce at say time any of the
provisions of this Agreement, or any rights in respect thereto, or to exercise
any election herein provided, shall in no way be considered to be a waver of
such provisions, rights, or elections or in any way to affect the validity of
this Agreement.
13.3 It is mutually agreed that this Agreement contains the entire
Agreement between the parties hereto applying to the matters herein contained,
and that the same has been entered into in reliance upon only the provision
contained herein and not upon any representations by either of the parties; that
this Agreement shall supersede all representations, agreements, statements and
understandings relating to such matters made prior to execution of his
Agreement, and that this Agreement can only be amended by as Agreement in
writing executed by all of the parties hereto.
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13.4 The rule of construction that an agreement shall be interpreted
against the drafting party shall not apply to this Agreement. In this Agreement,
whenever the context so requires, the masculine, feminine or neuter gender, and
the singular or plural number or tense, shall include the others.
14. ASSIGNMENT
This Agreement may not be assigned.
15. ARBITRATION
15.1 Any controversy arising under or related to this Agreement, and
any disputed claim by either party against the other under this Agreement
excluding any dispute relating to patent validity or infringement arising under
this Agreement, shall be settled by arbitration in accordance with the Licensing
Agreement Arbitration Rules of the American Arbitration Association.
15.2 Upon request by either party, arbitration will be by a third party
arbitrator mutually agreed upon in writing by LICENSEE and COMPANY within thirty
(30) days of such arbitration request. Judgment upon the award rendered by the
arbitrator shall be final and non-appealable and may be entered in any court
having jurisdiction thereof.
15.3 The parties shall be entitled to discovery in like manner as if
the arbitration were a civil suit in the California Superior Court. The
Arbitrator may limit the scope, time and/or issues involved in discovery.
15.4 Any arbitration shall be held at the place then designated by the
COMPANY, California, unless the parties hereto mutually agree in writing to
another Place.
16. RELATIONSHIP OF PARTIES
Each party shall conduct all business in such party's own name as as
independent contractor. No joint venture, partnership, employment, agency or
similar arrangement is hereby created between the parties. Neither party has the
right or power to act for or on behalf of the other or to bind the other in any
respect whatsoever.
17. SEVERABILITY
If any provision of this Agreement is determined to be illegal, invalid
or otherwise unenforceable by a court of competent jurisdiction, then to the
extent necessary to make such provision and/or this Agreeement legal, valid or
otherwise shall be limited, construed or severed and deleted from this
Agreement, and the remaining portion of such provision and the remaining other
provisions hereof shall survive, remain in full force and effect and continue to
be binding, and shall be interpreted to give effect to the intention of the
parties insofar as that is possible.
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18. AMENDMENT AND WAIVER
Neither this Agreement nor any of its provisions may be amended,
changed, modified or waived except in a writing duly executed by the party to be
bound thereby.
19. FURTHER ASSURANCES
The parties shall shall execute any and all additional documents and
instruments and shall take any and all other actions necessary or desirable to
carry out the intent and purpose of this Agreement.
20. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which shall together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate originals by their duly authorized officers or representative.
SURGIJET, INC.
By: /S/ XXX X. XXXXXXX
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Name: Xxx X. Xxxxxxx
Title: Chairman
VISIJET, INC.
By: /S/ XXX X. XXXXXXX
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Name: Xxx X. Xxxxxxx
Title: President
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EXHIBIT A
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Devices related to ophthalmic applications of fluid jet technology.
EXHIBIT B
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The Licensed Territory is worldwide.
