15 ALI-ABA Audio Seminar Negotiating Technology Agreements October 15, 2008 Telephone Seminar/Audio Webcast Model Technology Agreements and Related Material Submitted by Glenn H. Lenzen Shughart Thomson & Kilroy P.C. Denver, Colorado
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17 PATENT SALE AND PURCHASE AGREEMENT This Agreement is made as of the date of the last signature below, between, a Corporation having an office at ( SELLER ), and, a Corporation with an office at ( BUYER ). and Whereas SELLER is the owner of certain United States Letters Patents, as defined below; Whereas BUYER desires to acquire SELLER s entire right, title and interest in and to the subject Patents; and Whereas SELLER is willing to assign said Patents to BUYER for good and valuable consideration and on the terms and conditions set forth in this Agreement; NOW, THEREFORE, SELLER and BUYER hereby agree to the following: 1. DEFINITIONS 1.1 Patents shall mean the United States patents identified in Attachment A, hereto, including all divisions, continuations, continuations-in-part, reissues and reexaminations thereof and all pending applications therefor which claim priority from any application from which the listed United States patents are derived, as well, all foreign counterparts of said United States patents and applications thereof and all pending foreign applications therefor which claim priority from any of the aforementioned U. S. patents or patent applications. 1.2 Subsidiary of a party shall mean a corporation or other legal entity (i) at least 33.3% of whose shares or other securities entitled to vote for election of directors (or other managing authority) is now or hereafter owned or controlled by such party or its Subsidiary, either directly or indirectly; or (ii) at least 33.3% of the equity interest in which is now or hereafter owned or controlled by such party or its Subsidiary, either directly or indirectly, but any such corporation or other legal entity shall be deemed to be a subsidiary of such Party only so long as such ownership or control exists. 2. WARRANTIES 2.1 SELLER warrants that it is sole owner of said Patents, that SELLER has not previously granted any assignment, license or interest in or to said Patents to any third party except as specified in Paragraph 2.2 and that SELLER has the full right and capacity to assign said Patents to BUYER, and to enter into and carry out its obligations under this Agreement, without conflicting with any other obligation of SELLER. 2.2 BUYER acknowledges that certain of the Patents may be licensed to and any rights granted to BUYER hereunder are subject to any rights which may have been 2385178.01
18 previously granted under such licenses. SELLER warrants and represents that other than the licenses mentioned specifically in this subparagraph, no other licenses have been granted to the Patents. 2.3 SELLER makes no representation or warranty regarding the validity of the Patents or regarding the scope of such Patents. 2.4 BUYER expressly agrees that SELLER s liability howsoever arising under this Agreement (whether in contract, tort or otherwise, including but not limited to any breach of any representation or warranty) shall in no event exceed the amounts paid to SELLER pursuant to this Agreement. BUYER further expressly agrees that SELLER s liability in connection with or arising from breach of any representation or warranty with regard to any particular Patent or Patents shall be further limited to only a pro-rata equitable portion of the amounts paid to SELLER hereunder which may be reasonably attributed to such Patent or Patents. SELLER s liability and BUYER's remedies are exclusively as set forth herein and in no event shall SELLER, and/or its employees and/or agents be liable (whether in contract, tort or otherwise) for any special, indirect, speculative, incidental or consequential damages whatsoever, meaning to include therein, by way of example and not by way of limitation, lost profits. 2.5 Except as specifically indicated below, SELLER warrants that, to the present actual knowledge of its chief legal officer, no claim of infringement has been made by SELLER against any third party with respect to any one or more of the Patents, and SELLER has never stated or represented, by action or other conduct, to any third party that SELLER will not enforce the Patents or that said third party is free to practice the invention(s) of the Patents without fear of recourse from SELLER. 3. ASSIGNMENTS AND CONSIDERATION 3.1 SELLER agrees to assign, and hereby does assign, to BUYER SELLER s entire right, title, and interest in and to said Patents (subject to Paragraph 2.2 above), together with all damages and payments due or payable on the date of this Agreement or thereafter (other than any payments which may be due under the licenses identified in Paragraph 2.2 above), including, without limitation, damages and payments for past or future infringements thereof, and the right to bring suit and recover against any third party for acts of infringement occurring before the date of this Agreement. Concurrently with the execution of this Agreement, SELLER shall execute an Assignment Document for the Patents in the form attached hereto as Attachment B. In the event of any conflict between the provisions of this Agreement and Attachment B, the provisions of the Agreement shall take precedence. It is understood that BUYER shall be responsible for all costs and expenses associated with the preparation, and recordation of assignment documents. 3.2 SELLER agrees that, within thirty (30) business days after the date of this Agreement, SELLER will deliver to BUYER a copy of all documentation in SELLER s possession or control, regarding filings made with the patent authority of any country with respect to each of the Patents. During such thirty day period, SELLER agrees, at BUYER s expense, to take any action necessary to preserve rights to the Patents and any counterparts thereto, such as filing responses, payment of maintenance fees, and the like. 2385178.01 2
19 3.3 In consideration of the assignment of said Patents to BUYER, BUYER agrees to the following: 3.3.1 BUYER agrees to pay SELLER the sum of ($ ) as compensation for said Patents and the rights granted to BUYER pursuant to this Agreement. BUYER shall make this payment to a bank account designated in writing by SELLER via wire transfer within three (3) business days after execution of this Agreement. 3.3.2 For any license under any one or more of the Patents to a third party, BUYER will pay to SELLER a royalty of ($ ) for each such license. Such obligation will be paid within sixty (60) days after the date on which any such license is effective. 3.3.3 If, at the expiration of three (3) years of the effective date of this Agreement, BUYER has not paid to SELLER the sum of ($ ) in the increments of ($ ) contemplated by paragraph 3.3.2, BUYER agrees to pay to SELLER the difference between such sums actually paid and $. 3.3.4 Upon payment to SELLER of ($ ) pursuant to either paragraph 3.3.2 or 3.3.3, BUYER's obligations under paragraph 3.3.2 shall be reduced to ($ ) for each such license. 3.3.5 BUYER agrees to pay to SELLER twenty percent (20%) of any royalties, damages or settlement amounts directly attributable to the licensing or enforcing of BUYER s rights under the Patents, individually or in combination as a group. This obligation to pay a percentage of royalties, damages or settlement amounts shall not apply when BUYER, in its sole discretion, licenses any or all of said Patents on a royalty free basis, includes any or all of said Patents in a royalty free cross license, licenses any or all of said Patents in a cross license that requires net payments from BUYER to a third party, or uses such Patents to offset other patent royalty demands or obligations asserted against BUYER by a third party. The obligation to pay royalties, damages or settlement amounts as defined in this Paragraph 3.3.5 shall be strictly limited to any royalties, damages or settlement amounts paid to BUYER having reasonable allocation to such Patents. If BUYER makes any such allocation, it shall provide SELLER with reasonable detail and justification as to the basis for such allocation. If SELLER disagrees with the basis for any such allocation, the parties agree to attempt to have the matter resolved by referral to a mutually acceptable independent auditor and if the parties are not able to reach agreement on the allocation, the dispute shall be resolved by binding arbitration under the Commercial Rules of Arbitration of the American Arbitration association. All payments due under this Paragraph 3.3.5 shall be made to SELLER within sixty (60) days of BUYER's receipt of the corresponding funds. 3.3.6 Within sixty (60) days after the end of each calendar year during the period expiring as of the expiration date of the last to expire of the Patents and also within sixty (60) days after the expiration of the last to expire of the Patents, BUYER shall provide SELLER with a verified detailed report of any licenses granted, and royalties, damages or settlement 2385178.01 3