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Exhibit 10.7
PATENT LICENSE AGREEMENT
This is a Patent License Agreement (the "Agreement") dated as of
October 4, 1997, (the "Effective Date") between Spectra-Physics Lasers, Inc., a
Delaware corporation ("Licensor") and Spectra Precision, Inc. (formerly known as
Spectra-Physics Laserplane, Inc.), a Delaware corporation ("Licensee").
Background
WHEREAS Licensor owns the patents listed in the attached Exhibit
A, and any and all divisionals, continuations, continuations-in-part,
reexaminations, and reissues, and any U.S. or foreign equivalents thereof
(collectively, the "Licensed Patents"); and
WHEREAS Licensee desires to obtain, and Licensor desires to
grant, a license to use the Licensed Patents subject to the terms and conditions
herein.
NOW, THEREFORE, intending to be legally bound, Licensor and
Licensee agree as follows:
Terms
1. LICENSE.
1.1. Grant of Rights. Licensor hereby grants to Licensee a non-exclusive,
irrevocable (except as provided herein), perpetual (except as provided herein),
world-wide, royalty-free right and license throughout the world to manufacture,
have manufactured, use, sell, and import the Licensed Products, so long as said
Licensed Products comprise a part of a System or are sold as a replacement part
for a previously-sold System.
As used in this Agreement "Licensed Products" shall mean products
embodying or made in accordance with inventions of the Licensed Patents, which
are used in, or manufactured for use in, a System and which are used for
applications in construction, land or hydrographic surveying, mining, dynamic
positioning or agriculture.
As used in this Agreement "Permitted Subsidiary" shall mean any
direct or indirect majority owned subsidiary of Licensee, but only for so long
as it remains a direct or indirect majority owned subsidiary of Licensee.
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As used in this Agreement "System" shall mean a system
manufactured by Licensee for sales to its customers, in which:
(a) the portion of the Direct Product Cost of the System
attributable to a Licensed Product is less than fifty percent (50%), or,
in the case of a System comprising a rotating interior construction
system emitting light having a wavelength of between approximately 490
and 570 nanometers, the portion the Direct Product Cost of the System
attributable to a Licensed Product is less than seventy-five percent
(75%); and
(b) the average power output of the System is less than 10
milliwatts for all applications except underground applications, in
which case the average power output of the System is less than 20
milliwatts.
As used in this Agreement "Direct Product Cost" shall mean the
standard manufacturing cost which shall include, without limitation, the cost of
direct labor and materials and a standard allocation for overhead.
1.2. Dispute Resolution. If the parties disagree as to the scope of the
license granted pursuant to Section 1.1 of this Agreement, the parties agree to
use the following procedure to resolve the dispute:
1.2.1. After the dispute arises, a meeting shall be held promptly
between the parties, attended by individuals with decision-making authority
regarding the dispute, to attempt to negotiate a resolution in good faith;
1.2.2. If, within thirty (30) days after such meeting, the parties
have not succeeded in negotiating a resolution of the dispute, then at the
written request of either party, the parties will jointly appoint a
mutually-acceptable neutral person not affiliated with either of the parties. If
the parties have been unable to agree upon such appointment within ten (10) days
after either party requests appointment of the neutral person, they shall seek
assistance from the American Arbitration Association or other mutually
agreed-upon provider of neutral services. The fees of the neutral person shall
be shared equally by the parties.
1.2.3. If the parties have been unable to agree on any of such
matters within twenty (20) days after initial consultation with the neutral
person, the parties agree to negotiate to resolve said dispute through
arbitration to be conducted in Mountain View, California, under the Patent
Arbitration Rules of the American Arbitration Association. Any resulting award
shall be final, binding upon the parties, their successors and assigns, and
non-appealable, and shall be entered in any court of competent jurisdiction to
enforce it. Each party shall bear its own costs and expenses, including
attorneys' fees, in the arbitration.
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1.2.4. Nothing in this Agreement shall limit the right of either
party, before and during any dispute resolution, to have recourse to such
judicial remedies, including temporary or permanent injunction and attachment,
as would be available in the absence of this Section 1.2.
1.3. Maintenance of Licensed Patents and this License. Licensor will
provide reasonable notice to Licensee of its intent not to file necessary
documents, pay necessary fees, or take other actions necessary to ensure the
continued validity and enforceability of the Licensed Patents. If Licensor
chooses not to maintain the validity and enforceability of any of the Licensed
Patents, then Licensor shall permit Licensee to maintain some or all of the
Licensed Patents at its own expense. Licensor will reasonably cooperate with
Licensee in such maintenance. Licensee will pay Licensor's reasonable
out-of-pocket expenses of such cooperation.
2. INFRINGEMENT.
2.1. Notice of Infringement Claims. If Licensee becomes aware of actual
or threatened infringement by a third party of any of the Licensed Patents, it
shall promptly notify Licensor in writing of such infringement or threat.
2.2. Prosecution of Infringement Claims. After any notice provided
pursuant to Section 2.1, the parties will promptly consult in good faith as to
the steps to be taken with respect to such infringement, provided; however, that
in the absence of any agreement to the contrary, the Licensor will be obliged
either: (a) to promptly take such action at its expense as is reasonably
necessary to enjoin such infringement; or (b) to promptly notify Licensee that
Licensor has good cause for refraining from taking such action.
2.2.1. Licensor Prosecution. In the event that Licensor takes
action under Section 2.2(a), Licensee shall cooperate fully with Licensor in
such action, provided that Licensee is reimbursed for all of its reasonable
out-of-pocket expenses incurred in connection with such cooperation. Licensor
shall keep Licensee informed on all material developments throughout the
progress of any such action. The Licensor shall retain all amounts recovered,
whether by judgment, award, settlement, license, sublicense or otherwise, in any
such action.
2.2.2. Licensee's Rights. In the event that Licensor either
notifies Licensee of its intent not to take action pursuant to Section 2.2(b),
or does not take such action within sixty (60) days of notice by Licensee
pursuant to Section 2.1, Licensee shall have the right to prosecute any action
to enforce any of the Licensed Patents if such alleged third party infringer is
engaged in substantially the same business as the Licensee (as determined by
reasonable mutual agreement of Licensor and Licensee) at the time of said actual
or threatened infringement. In all other circumstances, Licensee shall have no
right to prosecute any action to enforce any of the Licensed Patents or
participate in any administrative proceeding relating to the Licensed Patents
except upon the express written consent of Licensor, which consent shall be at
Licensor's sole discretion. In the event that Licensee takes such action,
Licensor agrees to render Licensee all reasonable assistance that may be
required and shall have the right to be represented therein by advisory counsel
of its own selection and at its own expense.
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3. DEFAULT AND TERMINATION.
3.1. Term. This Agreement shall commence on the Effective Date and,
unless terminated earlier pursuant to Section 3.2, shall terminate upon the
latest expiration date of any of the Licensed Patents, or upon final
adjudication that no claim of any Licensed Patent is enforceable, whichever
comes later.
3.2. Termination. Either party may terminate this Agreement only if the
other party materially fails to perform any obligation under this Agreement and
such failure continues, substantially uncured, for 60 days following notice
thereof by the terminating party. The contents of any notice tendered by the
terminating party pursuant to this Section 3.2 shall set forth with reasonable
specificity the claimed material failure of the other party.
4. ASSIGNMENT AND SUBLICENSING.
4.1. Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by Licensee without the prior written
consent of Licensor; provided, however, that Licensee may, without such consent,
assign such rights and such obligations set forth in this Agreement, in whole or
in part: (a) in connection with a sale of all or substantially all of the assets
and business of Licensee and its Permitted Subsidiaries in which the Licensed
Patents are principally used, or (b) to the surviving entity after a merger,
reorganization or other corporate restructuring of Licensee. This Agreement and
all of the provisions hereof shall be binding upon and shall inure to the
benefit of the parties hereto and their respective permitted successors and
assigns. Licensor reserves the right to assign its rights under this agreement
at its discretion.
4.2. Sublicensing. Licensee may grant sublicenses under some or all of
the Licensed Patents to a Permitted Subsidiary. Licensee shall notify Licensor
of all pertinent details of such sublicenses, and any subsequent amendments
thereto.
5. MISCELLANEOUS.
5.1. Notices. Any notice or other communication required or permitted
under this Agreement shall be in writing and shall be deemed to have been duly
given: (a) on the date of delivery, if delivered personally; (b) on the business
day after dispatch by documented overnight delivery service such as Federal
Express, if sent in such manner; (c) on the date of transmission by telecopy or
telex or other means of electronic transmission, if so transmitted, provided
that a confirmation copy of any such electronic transmission is sent no later
than the business day following the date of electronic transmission by
documented overnight delivery service or first class mail, postage prepaid; or
(d) on the third business day after deposit in the United States mail, postage
prepaid. Notices or other communications shall be directed to the following
addresses:
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5.1.1. Notices to Licensee:
Spectra Precision Inc.
0000 Xxxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: President
5.1.2. Notices to Licensor:
Spectra-Physics Lasers, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx 0
Xxxxxxxx Xxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Attention: President
Either party may change the addresses set forth above by providing written
notice to the other party.
5.2. Entire Agreement, Amendment, Waiver. This Agreement, and the
exhibits hereto, constitutes the entire understanding between the parties with
respect to the subject matter hereof, and supersedes all other understandings
and negotiations with respect thereto. This Agreement may be amended only in a
writing signed by both parties hereto. Any provision of this Agreement may be
waived only in a writing signed by the party to be charged with such waiver. No
course of dealing between the parties shall be effective to amend or waive any
provision of this Agreement.
5.3. Further Assurances. After the execution of this Agreement, each
party shall take further actions and execute such further documents as may be
necessary or reasonably requested by the other in order to effectuate the intent
of this Agreement and to provide such other party with the benefits of this
Agreement.
5.4. Representations and Warranties. No representation or warranty,
express or implied, is made by either party with respect to the Licensed
Patents.
5.5. Insolvency. All rights and licenses granted under or pursuant to
this Agreement by Licensor to Licensee are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the United States Bankruptcy Code or
replacement provision therefor (the "Code"), license to rights to "intellectual
property" as defined in the Code. The parties agree that Licensee, as licensee
of such rights under this Agreement, shall retain and may fully exercise all of
its rights and elections under the Code.
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5.6. Governing Law. This Agreement shall be governed by, interpreted
under, and construed and enforced in accordance with the internal laws, and not
the laws pertaining to conflicts or choice of laws, of the State of Delaware.
5.7. Captions. The captions in this Agreement are for purposes of
reference only and shall not limit or otherwise affect the interpretation
thereof.
5.8. Severability. The provisions of this Agreement are severable. In
the event of the unenforceability or invalidity of any one or more of the terms,
covenants, conditions or provisions of this Agreement under applicable law such
unenforceability or invalidity shall not render any other of the terms,
covenants, conditions or provisions hereof unenforceable or invalid and the
parties hereto agree that this Agreement shall be construed as if such
unenforceable or invalid provision were never contained herein.
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IN WITNESS WHEREOF, the parties have executed this Agreement on
the date first above written.
SPECTRA-PHYSICS LASERS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, President
SPECTRA PRECISION, INC. (f.k.a
SPECTRA-PHYSICS LASERPLANE, INC.)
By: /s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx, President
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