4.22 Model Exclusive Patent License (Janicke)
AGREEMENT
1. Parties and consideration
1.1 This agreement is between Super Corp. (hereafter “SUPER”), a Delaware corporation
having a place of business at ______ , and Acme Corp. (hereafter “ACME”), a New
York corporation having a place of business at ______.
1.2 The consideration for this agreement consists of the representations and undertakings
expressed herein. Neither party is relying on any other representation or understanding
not expressed herein.
2. Definitions
The following definitions apply to the terms used herein:
2.1 “Licensed Patents” means the following United States patents, foreign counterparts
thereof, any reissues thereof, any reexamination certificates thereof, and any patents
issued upon applications claiming the benefit of the filing date of an application on which
the following patents are based:
(1) U.S. 4,000,000, issued 1/2/93 filed 1/2/91;
(2) U.S. 4,500,000, issued 1/2/95 filed 1/2/90;
(3) U.S. 5,000,000, issued 1/2/97 filed 1/2/94;
(4) U.S. 5,500,000 issued 1/2/01 filed 1/2/98;
(5) U.S. 6,000,000 issued 1/2/02 filed 1/2/97
2.2 “Subsisting claim” means any claim of any Licensed Patent, which claim has not:
expired, been declared invalid in a final judgment from which no further right of appeal
lies at a given time, been awarded to another in an interference, or been disclaimed. A
claim shall be deemed to subsist only in the country of its issuance.
2.3 “Acme Residential Lighting Product” means any product designed primarily by
Acme and intended to be sold by Acme under its trademarks and under its warranty,
whose primary intended use is in lighting fixtures and circuitry in residential buildings. A
Seg. 4, item 22 (2008)
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4.22 Model Exclusive Patent License (Janicke)
product whose design is controlled by another entity is not an Acme Residential Lighting
Product even if it is made by Acme.
2.4 “Licensed Product” means any Acme Residential Lighting Product covered by a
subsisting apparatus claim, or whose manufacture or use involves a method or
composition covered by a subsisting claim.
2.5 “Net selling price” means the actual price charged to an ACME customer for a
product packed ready for shipment, excluding freight, sales taxes, and insurance. If such
price is not in U.S. dollars, payments hereunder shall be calculated based upon the
average currency exchange rate for the date in question, as appearing in the New York
Times.
3. Representations
3.1 SUPER represents that it the owner of all right, title and interest in and to the
Licensed Patents.
3.2 ACME represents that it is engaged in the business of manufacturing and selling copy
machines, that it has never been the subject of a bankruptcy petition, and that it has never
been insolvent.
4. Exclusive license grant
4.1 SUPER hereby grants to ACME an exclusive license:
(a) With respect to any apparatus covered by a subsisting claim of a Licensed
Patent, to make, have made, sell, offer to sell, import, and use such apparatus in
Licensed Products.
(b) With respect to any method covered by a subsisting claim of a Licensed Patent,
to use such method and to sell the product of such method in connection with
Licensed Products.
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4.22 Model Exclusive Patent License (Janicke)
(c) With respect to any composition covered by a subsisting claim of a Licensed
Patent, to make, use, and import such composition in connection with Licensed
Products.
The licenses granted in this paragraph 4.1 are limited to activities in connection with
Licensed Products as defined herein, and only within the geographic area wherein United
States patents have lawful force. The parties recognize that subsisting claims of the
Licensed Patents also embrace products whose intended use is outside the field of
residential lighting. No license is granted with respect to such products.
4.2 The benefit of this license shall inure to wholly owned or majority owned subsidiaries
of ACME, unless ACME gives written notice to the contrary with respect to a particular
subsidiary. The license granted herein shall not be otherwise transferable or sublicensable
without the consent of SUPER.
5. Payments
5.1 Upon the effective date of this agreement ACME shall pay to SUPER the sum of
$100,000.
5.2 ACME shall make the following payments to SUPER in U.S. dollars during the term
hereof, for transactions by ACME or such of its subsidiaries as have the benefit of this
agreement pursuant to paragraph 4.2:
(a) Where a Licensed Product or its method of manufacture is covered by a
subsisting claim of only one Licensed Patent, 5% of net selling price
(b) Where a Licensed Product or its method of manufacture is covered by a
subsisting claim of only two Licensed Patents, 6% of net selling price
(c) Where a Licensed Product or its method of manufacture is covered by a
subsisting claim of only three Licensed Patents, 7% of net selling price
(d) Where a Licensed Product or its method of manufacture is covered by a
subsisting claim of only four Licensed Patents, 8% of net selling price
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4.22 Model Exclusive Patent License (Janicke)
(e) Where a Licensed Product or its method of manufacture is covered by a
subsisting claim of five or more Licensed Patents, 9% of net selling price
(f) Where materials used in the production of a Licensed Product are covered by a
subsisting claim of one or more Licensed Patents, but the product does not otherwise fall
under any of subparagraphs (a) through (e) hereof, 5% of the fair market value of the
materials at the time of such production. If such materials are purchased from SUPER or
a source authorized by SUPER, this subparagraph (f) shall not apply.
(g) Notwithstanding any of the above provisions for additional payments, during
any year in which payment accruals exceed $500,000, subsequent royalty accruals during
that year shall be calculated at one-half the rates stated above.
(h) Notwithstanding any of the above provisions for additional payments, when
total payments for all years under this agreement have reached $4,000,000 dollars, all
licenses hereunder shall become paid up, and no further payments shall be required.
5.3 Time for accrual of payment obligations. A payment obligation for a product does not
accrue until the product is sold, even though other activities are licensed, e.g., making,
offering to sell. Only one payment is due for each Licensed Product, regardless of how
many licensed acts may have been performed with respect to it. A sale is deemed to occur
whenever it is booked as such by ACME, but in no event later than the date of physical
delivery of the product to the customer. A lease or other possessory arrangement with a
customer shall be regarded as a sale for purposes of this paragraph, and in that event all
monies received by ACME from the customer shall be regarded as parts of the selling
price.
5.4 Time for payments. Payments accruing under this Article 5 shall be made based on
accrual time periods. The first accrual period shall be the period from the effective date of
this agreement to the end of the next full calendar quarter. From then on each accrual
period shall be each calendar quarter during the term hereof. Payment for an accrual
period shall be made within thirty days of the close of that accrual period.
5.5 Minimum payments. Beginning in the third full calendar year of the term hereof, if
ACME’s payments to SUPER under the terms of this agreement are less than $200,000
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4.22 Model Exclusive Patent License (Janicke)
for a given calendar year, ACME may make an additional payment for the fourth
calendar quarter, such that its total payments for the year equal $200,000. For the sixth
full calendar year hereunder and for each year thereafter, this amount shall be $300,000
per year. Upon ACME’s failure to make the specified minimum payments for any given
year, SUPER may terminate this agreement by serving written notice to that effect within
six months following the end of the year in question. The provisions of this paragraph
shall not apply at all if the license has become paid up pursuant to paragraph 5.2(h)
hereof.
5.6 Reports. Each payment under paragraph 5.2 shall be accompanied by a report stating
the manner of calculation of the amount due. ACME shall maintain accurate records from
which the correctness of each report can be verified. SUPER shall have the right to audit
such records at reasonable times. If an audit reveals underpayment by 5% or more,
ACME shall, in addition to promptly paying the difference, reimburse SUPER for the
cost of the audit.
6. Term
6.1 The term of this agreement shall begin on the date when this agreement is signed by
both parties, which date shall be the effective date hereof. Unless sooner terminated as
herein provided, the term shall end when no claim of any Licensed Patent is subsisting.
6.2 If ACME shall default on any obligation hereunder, SUPER shall have the right to
send a written notice thereof, which shall be effective upon dispatch. ACME shall have
thirty days in which to cure such default. Upon ACME’s failure to timely cure the
default, SUPER shall be entitled to terminate this agreement by sending written notice of
termination, which shall be effective on dispatch.
6.3 No waiver by SUPER of default for any obligation of ACME hereunder shall operate
as a waiver in the case of any subsequent default by ACME.
6.4 ACME shall have the right to terminate this agreement at any time by giving prior
notice to that effect to SUPER at least six months before the effective date of such
termination.
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4.22 Model Exclusive Patent License (Janicke)
6.5 No termination shall affect any payment obligation that accrued prior to the
termination date.
7. Warranties
7.1 Each party warrants that it has authority to enter this agreement.
7.2 There is no warranty by SUPER with respect to any patents other than Licensed
Patents.
7.3 SUPER does not warrant that the Licensed Patents are valid or that ACME’s
operating under subsisting claims thereof will not infringe patents of others.
7.4 In the event a third party shall be infringing any of the Licensed Patents by activities
within the field of the licenses granted hereunder, ACME shall have the right to decide
upon negotiations or appropriate litigation against the infringer, using outside counsel
approved by SUPER, which approval shall not be unreasonably withheld. SUPER agrees
to cooperate in such negotiations, and to join any such litigation if such joinder is
requested by ACME and is otherwise proper. ACME will pay the costs reasonably
incurred by SUPER for participating in the litigation.
8. Notices and miscellaneous
8.1 Notice to ACME shall be sufficient hereunder if in a writing addressed to ACME as
follows: ______________. Notice to SUPER shall be sufficient if in a writing addressed
to SUPER at __________.
8.2 Except for terminations as provided for herein, this agreement may be modified only
by a writing signed by both parties.
IN WITNESS WHEREOF, the parties have caused their duly authorized representatives
to execute this agreement on their respective behalfs.
Seg. 4, item 22 (2008)
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4.22 Model Exclusive Patent License (Janicke)
Super Corp.
Acme Corp.
By: __________________
By: __________________
Title: _________________
Title: _________________
Date: _________________
Date: _________________
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