SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 18, 1996
INFINITE MACHINES CORP.
(Exact name of Registrant as specified in its charter)
DELAWARE 0-21816 52-1490422
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
923 Incline Way #9, P.O. Box 8219, Incline Village NV 89452
(Address of principal executive office) (Zip Code)
(702) 831-4680
Registrant's telephone number, including area code:
N/A
(Former name or former address, if changed since last report)
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Item 5. Other Events.
By Agreement dated June 18, 1996 between Brown University Research
Foundation ("Brown University") and HGG Laser Fare, Inc., a wholly owned
subsidiary of the Registrant, the Registrant was granted a license from Brown
University with respect to certain patented technology owned by Brown University
related to the fabrication of micro-lenses and micro-machining of glass for
exploitation by the Registrant in connection with its commercial laser machining
and materials processing businesses. The license, which is worldwide, is
terminable on or after January 1, 2000 in the event that minimum royalty
payments are not achieved.
In consideration for the license, the Registrant is obligated to pay to
Brown University a $25,000 license fee on or before July 1, 1996, of which
$5,000 has been paid to date and the Registrant has issued to Brown University,
for investment, 10,000 shares of the Registrant's Common Stock. In addition,
annual license maintenance fees are due on or before July 1 of each year during
the term of the license in amounts ranging from $12,000 per year to $25,000 per
year.
Item 7. Exhibits.
1. License Agreement dated June 18, 1996 by and between Brown University
Research Foundation and HG Laser Fare, Inc. (Filed herewith).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INFINITE MACHINES CORP.
Date: June 25, 1996 By: /s/ Carle C. Conway
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Carle C. Conway, Chief Executive Officer
LICENSE AGREEMENT
THIS AGREEMENT, effective this 18th day of June, 1996 ("EFFECTIVE DATE") by
and between BROWN UNIVERSITY RESEARCH FOUNDATION, a corporation duly organized
and existing under the laws of the State of Rhode Island and having a principal
office at 42 Charlesfield Street, Providence, Rhode Island 02912 ("BURF") and
HGG LASER FARE, INC. ("Laser Fare"), a Rhode Island corporation having its
principal office at One Industrial Drive South, Smithfield, Rhode Island 02917
("LICENSEE").
WHEREAS, BURF is the owner by assignment from Brown University of U.S.
Patent Application S.N. 8/400,835 "Microlenses Fabricated by Laser Heating of
Semiconductor Doped Glasses" and certain other inventions and proprietary
information related to the fabrication of microlenses; U.S. Patent Application
S.N. 60/005,973 "Maskless Photo-Encoded Selective Etching for Glass Based
Microtechnology Applications" and other proprietary information related to
micromachining of glass; U.S. Patent Application S.N. 8/586,437 "Laser Diode
Having In Situ Fabricated Lens Element; and Provisional Patent Application filed
June 1, 1996 (invention disclosure 96-8) "Optically Controlled Imaging Phase
Mask Element"; and
WHEREAS, LICENSEE has expertise in commercial laser machining and materials
processing; and
WHEREAS, LICENSEE and Brown University have entered or will enter into a
RESEARCH AGREEMENT which may result in additional patents, inventions and
proprietary information being assigned to BURF; and
WHEREAS, BURF desires to have its patents, inventions and proprietary
information used in the public interest and is willing to grant a license
thereto on the terms set forth below; and
WHEREAS, LICENSEE desires to obtain a license for such patents, inventions
and proprietary information rights upon the terms and conditions set forth
below;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows:
ARTICLE 1 - DEFINITIONS
For the purpose of this Agreement, the following words and phrases shall
have the following meanings:
1.1 "AFFILIATE" shall mean a corporation or other business entity
controlled by, controlling or under common control with, a party hereto. For
purposes of this Agreement, except Section 1.6, control of a corporation or
other business entity shall mean direct
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or indirect beneficial ownership of fifty-one percent (51%) or more of the
voting interest in, or a fifty-one percent (51%) or greater interest in the
equity of, such corporation or other business entity. For purposes of Section
1.6, "thirty percent (30%)" shall be substituted for "fifty-one percent (51%)".
1.2 "CONFIDENTIAL INFORMATION" shall mean all information related to the
PATENT RIGHTS or TECHNOLOGY which is disclosed by one party to the other, to the
extent that such information, as of the date of disclosure, is not (a) known to
the receiving party (as demonstrated by competent documentary evidence); (b)
disclosed in published literature through no fault of the receiving party; (c)
generally available to industry; or (d) obtained by the receiving party from a
third party without binder of secrecy, provided, however, that such third party
has no confidentiality obligations to the disclosing party or to any of its
affiliates relating to the disclosed information.
1.3 "ELECTED INVENTION" shall mean any invention developed under the
RESEARCH AGREEMENT which has been disclosed to LICENSEE and which LICENSEE has
elected to add to this Agreement by notice to BURF, which notice shall be added
to this Agreement for purposes of listing such inventions in Exhibit A hereto.
1.4 "FIRST COMMERCIAL SALE" shall mean the initial transfer by LICENSEE, or
any of its Affiliates or sublicensees, to an unrelated third party of LICENSED
PRODUCTS subject to royalties hereunder for commercial use and not for research,
development or testing purposes.
1.5 "LICENSED PRODUCT" shall mean any product, device, software, protocol,
process or service, the manufacture, use or sale of which is within the claims
of the PATENT RIGHTS.
1.6 "NET SALES" shall mean the gross sales collected from unrelated third
party customers by LICENSEE and its Affiliates for LICENSED PRODUCTS, less the
sum of (a) transportation, insurance, handling charges, discounts, allowances
and returns, (b) commissions and other fees in amounts customary in the trade
paid to third party distributors and other sales agencies and (c) sales, excise,
turnover and similar taxes and any duties and other governmental charges imposed
upon the production, importation, use or sale of such LICENSED PRODUCTS. For
purposes of this definition, LICENSED PRODUCTS shall be considered sold when
billed out to a customer other than Licensee's Affiliate or sublicensee, subject
to appropriate adjustment on account of items in the preceding sentence.
In the event that (i) LICENSEE or an Affiliate shall manufacture and/or
sell an instrument or system (a "System") which consists of more than one
component or device, and (ii) one or more of the components or devices in the
System is within the claims of
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the PATENT RIGHTS ("Patented Components"), and one or more of the components or
devices in the System is not within the claims of the PATENT RIGHTS ("Unpatented
Components"), then for the purposes of this Agreement, the Patented Components
shall be deemed to be LICENSED PRODUCTS and subject to payment of royalties
hereunder, but the Unpatented Components and the entire System shall not be
LICENSED PRODUCTS and shall not be subject to the payment of royalties
hereunder. The NET SALES with respect to any such Patented Component shall be
calculated as a proportion of the NET SALES of the System, based on the separate
selling prices of the individual Patented Components and Unpatented Components
included therein, or, if all of such Patented Components and Unpatented
Components are not sold separately, then based on the relative value of the
Patented Components and the Unpatented Components and the technology embodied
therein, which relative value shall be negotiated in good faith by the parties.
In the event the parties are not able to agree on such relative value, it will
be determined by submission to arbitration in accordance with Article 12 hereof.
In construing this Section, it is the intention of the parties that a royalty be
paid only on that portion of a System which, if sold separately, would infringe
any of the PATENT RIGHTS. An instrument or Component will be deemed a separate
instrument or component if such instrument or component is capable of
functioning either independently, or in combination with additional separate
instruments or components of the type generally available in the market.
1.7 "PATENT RIGHTS" shall mean (a) all United States and foreign patent
applications listed in Exhibit A hereto; (b) all United States and foreign
patent applications based upon an ELECTED INVENTION; (c) any additions,
continuations, continuations-in-part, divisions, reissues or renewals and
extensions based thereon; and (d) all United States and foreign patent and other
industrial property rights obtained from any of said United States or foreign
patent applications, and reissues and extensions thereof. PATENT RIGHTS shall
not include any patent or patent application (or additions, continuations,
continuations-in-part, divisions, reissues or renewals or extensions based
thereon) as to which LICENSEE shall have surrendered its rights under Section
5.3 or 7.4 hereof.
1.8 "RESEARCH AGREEMENT" shall mean the agreement between LICENSEE and
Brown University which is, or will be, attached to and made part of this
Agreement.
1.9 "TECHNOLOGY" shall mean all technology, know-how, processes,
improvements and other proprietary information associated with the PATENT RIGHTS
developed under the RESEARCH AGREEMENT.
1.10 "TERRITORY" shall mean the world.
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ARTICLE 2 - GRANT
2.1 Grant. BURF hereby grants to LICENSEE, subject to the terms herein
recited, the exclusive, except for the rights of the Federal Government,
nontransferable (except as provided in ARTICLE 9 herein) perpetual, royalty
bearing right and license under the PATENT RIGHTS and the TECHNOLOGY with the
right to grant sublicenses, to make, have made, use, sell and distribute
(directly or indirectly through third parties) LICENSED PRODUCTS in the
TERRITORY. LICENSEE agrees that so long as this license remains exclusive in the
United States that any LICENSED PRODUCT produced for the sale in the United
States will be manufactured substantially in the United States unless otherwise
permitted under applicable law.
2.2 Reservation of Research Rights. Anything to the contrary
notwithstanding, BURF reserves the right to use (and to permit Brown University
to use) the PATENT RIGHTS and CONFIDENTIAL INFORMATION for its own research and
educational non-commercial purposes, subject to the confidentiality provisions
of this Agreement and the Research Agreement.
2.3 Rights of the Federal Government. LICENSEE recognizes and accepts that
the Federal Government retains a non-exclusive, irrevocable, paid-up license
under the PATENT RIGHTS. In addition, any right granted in this Agreement
greater than that permitted under 35 U.S.C. Section 200 et. seq. (the "Federally
Assisted Inventions Statute"), shall be subject to modification as may be
required to conform to the provisions of that statute. BURF shall take all
action necessary under the Federally Assisted Inventions Statute to preserve its
ownership of all PATENT RIGHTS.
2.4 Non-Assertion of Patent Rights. During the term of this Agreement and
so long as LICENSEE is not in default with respect to any payment due to BURF
hereunder, BURF will not assert its rights under the PATENT RIGHTS to prevent
any party from using or selling any quantity of product on which royalty has
been paid hereunder.
ARTICLE 3 - ROYALTIES
3.1 License Fee. LICENSEE shall pay BURF a license fee of (a) Twenty-Five
Thousand Dollars ($25,000) of which Five Thousand Dollars ($5,000) has been paid
to BURF and the balance of which shall be paid on July 1, 1996 plus (b) the
issuance of ten thousand (10,000) shares of the common stock of Infinite
Machines Corp. within ten (10) business days of the date hereof, subject to the
execution and delivery by BURF of the form of agreement attached hereto as
Exhibit B.
3.2 Royalties. Beginning with the first COMMERCIAL SALE and subject to the
terms hereof, LICENSEE agrees to pay to BURF, as partial consideration for the
rights granted under this Agreement,
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an amount equal to five percent (5%) of NET SALES of LICENSED PRODUCTS within
the claims of an issued patent which is part of the PATENT RIGHTS.
3.3 Sublicenses. In the event that LICENSEE enters into a sublicense and if
no royalty payment is payable to BURF pursuant to Section 3.2, LICENSEE shall
pay to BURF thirty percent (30%) of any royalty payments received by LICENSEE
under such sublicense with respect to the sale by the sublicense of LICENSED
PRODUCTS within the claims of an issued patent which is part of the PATENT
RIGHTS. In no event will equity investments in LICENSEE or payments for research
and development conducted by LICENSEE be considered to be royalty payments.
LICENSEE shall not offer sublicense royalty rates less than the rate that would
be due under Section 3.2 for NET SALES of LICENSEE without the written prior
approval of BURF, which approval shall not be unreasonably withheld, delayed or
conditioned. In no event shall LICENSEE pay BURF less than three percent (3%) of
NET SALES by a sublicensee pursuant to this Section 3.3.
3.4 Royalty Period. The obligation to pay royalties under Section 3.2 shall
continue in each country in which sales are made until the date of expiration of
the last to expire of any patent issued by such country which is part of the
PATENT RIGHTS, whereupon exclusive licenses granted hereunder shall be fully
paid and LICENSEE and its Affiliates and sublicensees shall be free to develop,
make, have made, use, sell and distribute LICENSED PRODUCTS in such country
without further duties or responsibilities to BURF.
3.5 License Maintenance Payments. In order to preserve the rights and
licenses granted hereunder, on or before July 1, 1997 and on each anniversary of
such date, LICENSEE shall pay to BURF the following non-refundable license
maintenance fees which shall be applied against payments required under Section
3.2 for the subsequent twelve (12) month period beginning July 1:
(a) on account of LICENSED PRODUCTS incorporating patent application
S.N. 8/400,835, Five Thousand Dollars ($5,000) on or before July 1, 1997;
Seven Thousand Five Hundred Dollars ($7,500) on or before July 1, 1998; and
Ten Thousand Five Hundred Dollars ($10,500) on or before July 1, 1999; and
(b) on account of LICENSED PRODUCTS incorporating patent applications
S.N. 60/005,973 and S.N. 8/586,437, Seven Thousand Dollars ($7,000) on or
before July 1, 1997; Ten Thousand Five Hundred Dollars ($10,500) on or
before July 1, 1998; and Fourteen Thousand Five Hundred Dollars ($14,500)
on or before July 1, 1999.
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3.6 Payment. Royalties will be due and payable within forty-five (45) days
of the end of each calendar quarter. Royalty and fee payments shall be made in
United States dollars in Providence, Rhode Island. Late payment of these amounts
shall be subject to interest charges at an annual rate of one and one-half
percent (1 1/2%) in excess of the "prime rate" published from time to time in
The Wall Street Journal. Exchange rates applied will be the closing buying rates
quoted by The Wall Street Journal on the last business day of the applicable
calendar quarter.
3.7 Joint Intellectual Property. The royalties provided defined above in
Section 3.2 shall apply to all PATENT RIGHTS derived from technology based upon
the current patent applications as well as any continuations, additions,
divisions, continuations-in-part, reissuances, or other continuing applications
which claim the priority of such initial application and whether or not the
initial application or any of the continuing applications names one or more
employees of LICENSEE as co-inventors together with BURF employees or employees
of Brown University. If, however, a distinct improvement or invention is made
subsequent to the execution of this AGREEMENT and is the subject of a separate
patent application which names both LICENSEE'S employees and BURF's employees or
employees of Brown University as co-inventors, then the applicable royalty rate
shall be one-half (1/2) the royalty rate set forth in Section 3.2.
3.8 Credit for Third Party Payments. In the event that LICENSEE makes a
payment to one or more third parties for patent rights which LICENSEE reasonably
believes are a dominant position which is necessary or proper to commercialize a
LICENSED PRODUCT, then the royalty due under Section 3.2 shall be reduced by
one-half (1/2) of the payments made to said third parties; provided, however,
the royalty from LICENSEE to BURF shall not be reduced by such reduction (or
multiple reductions) to less than fifty percent (50% of the royalties that would
have been due in any period in the absence of such payments to said third
parties.
3.9 Only One Royalty Payable. Only one royalty will be paid with respect to
any particular product, regardless of the number of inventions within the claims
of PATENT RIGHTS which are included therein. If different royalty rates apply to
different inventions, the highest royalty rate will apply to the product.
ARTICLE 4 - REPORTS AND RECORDS
4.1 Reports. LICENSEE shall report to BURF quarterly on its efforts to
bring the PATENT RIGHTS into broad commercial use and shall provide copies of
all sublicenses granted. At the time of each royalty payment, LICENSEE shall
provide a full account of all business activities subject to royalty payments
hereunder. BURF shall keep all information furnished under this Article 4
confidential.
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4.2 Records. LICENSEE and its sublicenses shall keep complete and accurate
books of account containing all particulars which may be reasonably necessary
for the purpose of showing the royalties payable to BURF. Said books of account
shall be kept at LICENSEEs principal place of business or the principal place of
business of a division of LICENSEE which is marketing LICENSED PRODUCTS. Said
books and particulars shall be available during normal business hours, upon
reasonable notice, for two (2) years following the end of the calendar year to
which they pertain, to the inspection (at the expense of BURF except as provided
in Section 4.3) of an independent certified public accountant retained by BURF
and reasonably acceptable to LICENSEE for the purpose of verifying LICENSEE
royalty statements. Any person performing such inspection shall enter into a
confidentiality agreement reasonably acceptable to LICENSEE. Inspection shall be
limited solely to those records directly related to LICENSEE royalty obligations
under this Agreement and shall be made no more often than once during any
calendar year.
4.3 Audit Costs. If an audit conducted on behalf of BURF pursuant to
Section 4.1 reveals that LICENSEE has made an error of five percent (5%) or more
in its favor in the aggregate payments due BURF in any one year, LICENSEE shall
be obligated to pay the audit fee in connection with the audit.
4.4 Marking. LICENSEE and its sublicensees agree to mark all LICENSED
PRODUCTS sold in the United States with all applicable U.S. patent numbers to
the extent commercially practicable. ALL LICENSED PRODUCTS shipped to or sold in
other countries shall be marked in such a manner as to conform with the patent
laws and practice of the country to which such products are shipped or in which
such products are sold, to the extent commercially practicable.
ARTICLE 5 - PATENT PROSECUTION AND ENFORCEMENT
5.1 BURF and LICENSEE shall cooperate fully in the preparation, filing,
prosection and maintenance of the PATENT RIGHTS and of all patents and patent
applications licenses to LICENSEE hereunder, executing all papers and
instruments or requiring inventors to execute such papers and instruments so as
to enable BURF to apply for, to prosecute and to maintain patent applications
and patents in BURF's name in any country. Each party shall provide to the other
prompt notice as to all matters which come to its attention and which may affect
the preparation, filing, prosection or maintenance of any such patent
applications or patents.
5.2 LICENSEE shall reimburse BURF for all reasonable out of pocket expenses
BURF incurs after June 1, 1996 for the preparation, filing, prosecution and
maintenance of PATENT RIGHTS. LICENSEE shall pay BURF within thirty (30) days of
receipt of invoices from
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BURF. Late payment of these invoices shall be subject to interest charges at the
annual rate provided Section 3.5. BURF shall take responsibility for the
preparation, filing, prosecution and maintenance of any and all patent
applications and patents included in PATENT RIGHTS; provided, however, that BURF
shall first consult with LICENSEE as to the preparation, filing, prosecution and
maintenance of such patent applications and patents and shall furnish to
LICENSEE copies of documents relevant to any such preparation, filing,
prosecution or maintenance. If BURF fails promptly to take any action reasonably
requested by LICENSEE and LICENSEE reasonably determines that such failure will
materially and adversely affect the PATENT RIGHTS, LICENSEE, in the name and as
the agent of BURF, may take all such action.
5.3 If LICENSEE elects to no longer pay the expenses of a patent
application or patent included within PATENT RIGHTS, LICENSEE shall notify BURF
not less than sixty (60) days prior to such action and shall thereby surrender
its rights under such patent or patent application.
5.4 Enforcement. BURF and LICENSEE shall each give immediate notice to the
other of any infringement of PATENT RIGHTS by third parties which may come to
their attention. BURF hereby grants LICENSEE, at LICENSEE's expense, the right
to institute and conduct such legal action against third party infringers of the
PATENT RIGHTS, or enter into such settlement agreements, as are deemed
appropriate by LICENSEE. The benefits of any action taken by LICENSEE shall
first be applied to reimburse LICENSEE for its reasonable expenses incurred in
such action and then shall be divided equally between BURF and LICENSEE. To the
extent LICENSEE is unable to recover such expenses from such benefits, LICENSEE
may offset the same against up to fifty percent (50%) of Royalties payable from
time to time hereunder until fifty percent (50%) of such costs are recovered. In
any such action, LICENSEE shall be entitled to join BURF as a party plaintiff
and BURF will be obligated to reasonably assist at LICENSEE's expense. Should
LICENSEE fail to commence actions or proceedings against infringers of the
PATENT RIGHTS within sixty (60) days of receiving written notice thereof from
BURF, BURF, at BURF's expense, shall have the right to initiate and pursue such
action and receive all resulting benefits. If BURF fails to take such action
within sixty (60) days of receiving written notice from LICENSEE, LICENSEE shall
again have such right and authority to take such actions as set forth in this
Section 5.4. No settlement, consent judgment or other voluntary final
disposition of the suit may be entered into without the consent of BURF, which
consent shall not be unreasonably withheld, delayed or conditioned. In the event
that a declaratory judgment action alleging invalidity of any of the PATENT
RIGHTS shall be brought against LICENSEE or BURF, BURF, at its sold option,
shall have the right to intervene and take over the sole defense of the action
at its own expense.
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ARTICLE 6 - REPRESENTATIONS AND WARRANTIES
6.1 Utilization. LICENSEE represents and warrants that it will use
commercially reasonable efforts to exploit the PATENT RIGHTS so that utilization
will result therefrom.
6.2 Authority. Each party represents and warrants that it has the right and
authority to enter this Agreement.
6.3 Rights of BURF. BURF represents and warrants that to the best of its
knowledge, it has the unrestricted right to grant the license contained in this
Agreement and that no other party, except the Federal Government has any rights
in or to the PATENT RIGHTS.
6.4 Exceptions. Nothing in this Agreement shall be construed as:
(A) a warranty or representation that anything made, used, sold or
otherwise disposed of under any license granted in this Agreement is or will be
free from infringement of patents, copyrights and trademarks of third parties.
(B) conferring rights on BURF to use in advertising, publicity or
otherwise the name of LICENSEE or of its employees, AFFILIATES or sublicensees
without the prior written approval of LICENSEE; or
(C) conferring rights on LICENSEE to use in advertising, publicity the
name of "Brown University", "Brown University Research Foundation" or their
employees without the prior written approval of BURF.
6.5 Disclaimer. EXCEPT AS EXPRESSLY PROVIDED HEREIN, BURF 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. THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT IS
NOT A CONSUMER TRANSACTION UNDER THE UNIFORM COMMERCIAL CODE OF RHODE ISLAND.
ARTICLE 7 - TERM AND TERMINATION
7.1 Bankruptcy. If LICENSEE undergoes a liquidation in bankruptcy, or files
a petition for liquidation in bankruptcy, or receiver, trustee or assignee for
the benefit of creditors, whether by the voluntary act of LICENSEE or otherwise,
and if LICENSEE fails to terminate any such proceeding within one hundred twenty
(120) days after its commencement BURF may at its election terminate this
Agreement upon thirty (30) days written notice to LICENSEE. LICENSEE agrees to
provide written notice to BURF of LICENSEE'S or third party's intention to file
a petition for liquidation of LICENSEE in bankruptcy prior to such filing, if
known.
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7.2 Failure to Pay Royalties. Should LICENSEE fail in its payment to BURF
of royalties or fees due in accordance with the terms of this Agreement, BURF
shall have the right to serve notice upon LICENSEE by certified mail at an
address designated in Article 11 hereof, of its intention to terminate this
Agreement within thirty (30) days after receipt of said notice of termination
unless LICENSEE shall either (a) pay BURF within the thirty (30) day period or
(b) refer the matter for arbitration as provided in Article 12. If LICENSEE has
not paid all such royalties properly due and payable within such thirty (30) day
period (or within thirty (30) days following the receipt of the arbitration
decision), the rights, privileges and license granted hereunder shall terminate
upon the end of such thirty (30) day period.
7.3 Material Breach. Upon any material breach or default by LICENSEE or the
failure of LICENSEE to pay the amounts set forth in the Research Agreement
(unless the Research Agreement has been terminated), BURF shall have the right
to terminate this Agreement and the rights and license granted hereunder by
ninety (90) days notice by certified mail to LICENSEE. Such termination shall
become effective at the end of such ninety (90) day period unless LICENSEE has
cured or has commenced good faith efforts to cure any such breach or default
prior to the expiration of the ninety (90) day period. Notwithstanding the
foregoing, BURF may not terminate this Agreement based on non-payment of
royalties unless and until there has been an arbitration decision pursuant to
Section 7.2 and LICENSEE has failed to pay the amount required within thirty
(30) days of the date thereof.
7.4 Termination by LICENSEE. LICENSEE may terminate this Agreement upon
ninety (90) days notice by certified mail to BURF. LICENSEE may terminate its
rights and obligations under this Agreement as to any patent included in the
PATENT RIGHTS upon ninety (90) days notice by certified mail to BURF.
7.5 Termination by BURF. At any time after January 1, 2000, BURF may
terminate the license granted under this Agreement with respect to any of the
patents included in the PATENT RIGHTS upon ninety (90) days notice by certified
mail to LICENSEE if aggregate NET SALES by LICENSEE or LICENSEE'S sublicensees
in connection with transfers of all LICENSED PRODUCTS during the preceding
twelve months are less than $500,000, unless during such ninety day period
LICENSEE submits evidence reasonably satisfactory to BURF demonstrating
LICENSEE'S substantial and diligent efforts to develop a LICENSED PRODUCT for
potential commercial use.
7.6 Obligations on Termination. Upon termination of this Agreement for any
reason, nothing herein shall be construed to release either party of any
obligation which natured prior to the effective date of such termination, and
LICENSEE and its Affiliates and sublicensees may, after the effective date of
such termination, complete LICENSED PRODUCTS in the process of or manufacture at
the
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time of such termination and sell the same together with LICENSED PRODUCTS in
inventory provided that LICENSEE pays to BURF royalties as required by Article 3
of this Agreement and submits the reports required by Article 4.
7.7 Sublicenses. Any sublicenses granted by LICENSEE under this Agreement
shall provide for termination or assignment to BURF, at the option of BURF, of
LICENSEE'S interest therein upon termination of this Agreement.
7.8 Survival. Article 8 and Section 7.6 shall survive termination of this
Agreement as wells as the right of BURF to collect any accrued royalties as
recited in Article 3.
ARTICLE 8 - INDEMNIFICATION AND INSURANCE
8.1 Indemnification. Except as provided below, LICENSEE shall indemnify,
defend and hold harmless BURF, BROWN UNIVERSITY and their trustees, officers,
professional staff, employees, and agents and their respective successors, heirs
and assigns (the "Indemnitees"), against any liability, damage, loss or expense
(including reasonable attorneys' fees and expenses of litigation) incurred by or
imposed upon the Indemnitees or any one of them in connection with any claims,
suits, actions, demands or judgments arising out of (i) any theory of product
liability (including, but not limited to, actions in the form of tort, warranty,
or strict liability) concerning any product, process of service made, used or
sold by LICENSEE, its Affiliates or sublicensees pursuant to any right or
license granted under this Agreement, or (ii) the exercise by LICENSEE of the
rights and licenses granted to LICENSEE under this Agreement. LICENSEE shall
have no obligation to indemnify any of the Indemnitees under this Article 8 to
the extent that a court of competent jurisdiction or arbitrator pursuant to
Article 12 determines that the damages were the result of the fraud, gross
negligence, or willful misconduct of the Indemnitees. LICENSEE reserves all
rights it may have against the Indemnitees arising by reason of such fraud,
gross negligence or willful misconduct.
8.2 Defense. LICENSEE agrees, at its own expense, to provide attorneys
reasonably acceptable to BURF to defend against any actions brought or filed
against any party indemnified hereunder with respect to the subject of indemnity
contained herein, whether or not such actions are rightfully brought.
8.3 Insurance. Beginning at the time of the FIRST COMMERCIAL SALE, LICENSEE
shall, at its sole cost and expense, procure and maintain comprehensive general
liability insurance in amounts consistent with the prudent industry practice,
naming the Indemnitees as additional insureds, to the extent they may be so
named without material increase in premium. To the extent available on
commercially reasonable terms and rates, such comprehensive general liability
insurance shall provide (i) product
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liability coverage and (ii) broad form contractual liability coverage for
LICENSEE's indemnification under this Agreement. LICENSEE shall provide BURF
with written evidence of such insurance upon request of BURF. To the extent
available on commercially reasonable terms and rates, LICENSEE shall maintain
such comprehensive general liability insurance beyond the expiration or
termination of this Agreement during the period that any product, process, or
service, relating to, or developed pursuant to, this Agreement is being
commercially distributed or sold by LICENSEE or by an agent of LICENSEE and for
a reasonable period thereafter. LICENSEE shall notify BURF in the event any
insurance is not available as provided herein. If such insurance is not
available on commercially reasonable terms, Licensee will not sell, distribute
or otherwise dispose of Licensed Products unless and until Licensee and BURF
have agreed to a reasonable arrangement or accommodation to protect the
Indemnitees from exposure to product liability claims.
8.4 Sublicense. Without in any way limiting LICENSEE's Indemnification
obligations hereunder, LICENSEE shall require all of its sublicenses hereunder
to indemnify and hold harmless BURF and Brown University under the same terms as
stated in Section 8.1 and to carry insurance under the same terms as Section
8.3.
ARTICLE 9 - ASSIGNMENT
9.1 BURF agrees that its rights and obligations under this Agreement may
not be transferred or assigned without the prior written consent of LICENSEE.
LICENSEE may assign or otherwise transfer this Agreement and the license granted
hereby and the rights acquired by it hereunder only if such assignment or
transfer (a) is to an Affiliate or (b) is accompanied by a sale or other
transfer of LICENSEE's entire business or of that part of LICENSEE's business to
which the license granted hereby relates; provided, that any such assignee or
transferee has agreed in writing to be bound by the terms and provisions of this
Agreement. Upon such assignment or transfer and agreement by such assignee or
transferee, the term LICENSEE as used hereunder shall include such assignee or
transferee.
ARTICLE 10 - EXPORT REQUIREMENTS
10.01 License to Export. Any and all licenses, permits or other
governmental approvals for the export of materials, data, know-how, and the like
carried out under this Agreement by LICENSEE shall be the responsibility of
LICENSEE.
ARTICLE 11 - PAYMENTS, NOTICES AND COMMUNICATIONS
11.1 Any payment, notice or other communication pursuant to this Agreement
shall be sufficiently made or given on the date of mailing if sent to such party
by certified first class mail,
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postage prepaid, addressed to it at its address below or as it shall designate
by written notice given to the other party:
In the case of BURF:
Brown University Research Foundation
42 Charlesfield Street
Box 1949
Providence, RI 02912
Attention: President
In the case of LICENSEE:
HGG Laser Fare, Inc.
One Industrial Drive South
Smithfield, RI 02917
Attention: President
ARTICLE 12 - ARBITRATION
12.1 Any controversy arising under or related to this Agreement, or 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. Upon
request of either party, arbitration will be by:
a. A third party arbitrator mutually agreed upon in writing by
LICENSEE and BURF within thirty (30) days of such arbitration request; or
b. A member of the American Arbitration Association.
12.2 Judgment upon the award rendered by the Arbitrator may be entered in
any court having jurisdiction thereof. The parties shall be entitled to discover
in like manner as if the arbitration were a civil suit in the Rhode Island
Superior court.
12.3 Any arbitration shall be held in Providence, Rhode Island, unless the
parties hereto mutually agreed in writing to another place.
ARTICLE 13 - MISCELLANEOUS PROVISIONS
13.1 Confidentiality. During the duration of this Agreement and for a
period of five (5) years thereafter, each party agrees to use reasonable efforts
not to (i) disclose to third parties any CONFIDENTIAL INFORMATION of the other
party or (ii) use the CONFIDENTIAL INFORMATION of the other party in any manner
except as contemplated by this Agreement. Nothing in this Agreement shall limit
in any way the disclosure of information required by a public
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authority of the disclosure of information that is necessary to prevent imminent
danger to the public.
13.2 Limitation of Liability. Neither party shall be liable to the other
for any special, consequential, incidental or indirect damages arising out of
this Agreement, however caused, under any theory of liability.
13.3 Governing Law. This Agreement shall be construed, governed,
interpreted and applied in accordance with the laws of the State of Rhode
Island, U.S.A., except that questions affecting construction and effect of any
patent shall be determined by the law of the country in which the patent was
granted.
13.4 Entire Agreement. The parties hereto acknowledge that this instrument
sets forth the entire agreement and understandings of the parties hereto as to
the subject matter hereof, and shall not be subject to any change or
modification except by the execution of a written instrument subscribed to by
the parties hereto.
13.5 Severability. The provisions of this Agreement are severable, and in
the event that any provisions of this Agreement are determined to be invalid or
unenforceable under any controlling body of law, such invalidity or
enforceability shall not in any way affect the validity or enforceability of the
remaining provisions hereof.
ARTICLE 14 - IMPROVEMENTS
BURF shall have no right, title or interest in or to improvements to the
TECHNOLOGY made by LICENSEE, LICENSEE's sublicensees or LICENSEE's consultants,
contractors, subcontractors, joint venturers, customers or the like, except that
to the extent that a product or process incorporating such improvements is
within the scope of a LICENSED PRODUCT, the terms and conditions of this
Agreement apply; provided, however, that the provisions of this Article 14 shall
not limit any rights of BURF with respect to improvements made pursuant to the
RESEARCH AGREEMENT.
BROWN UNIVERSITY RESEARCH HGG LASER FARE, INC.
FOUNDATION
By:_______________________ By:________________________
Title:____________________ Title:_____________________
Date:_____________________ Date:______________________
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EXHIBIT A
List of patent applications
U.S. Patent Application S.N. 8/400,835
U.S. Patent Application S.N. 60/005,973
U.S. Patent Application S.N. 8/586,437
U.S. Provisional Patent Application (Brown University Invention
Disclosure 96-8) filed June 1, 1996
