Royalty Agreement

Royalty Agreement and License of Rights under Patent

License Agreement made on the , between , a corporation organized and existing under the laws of the state of , with its principal office located at , and referred to herein as Licensor, and , a corporation organized and existing under the laws of the state of , with its principal office located at , referred to herein as Licensee.

Whereas, Licensor is the owner of the entire right, title, and interest in Letters Patent of the United States, No. issued , for an Invention entitled , and described generally as follows:

Whereas, Licensee desires to secure, and Licensor is willing to grant, license under the Patent to manufacture, use, sell, and otherwise practice the Invention;

Now, therefore, for and in consideration of the mutual covenants contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

I. Definitions. In interpretation of this Agreement, the following definitions shall apply:

A. Licensed Patents means all patents issued after or issuing on patent applications filed after and as to which Licensor has the right at any time during the term of this Agreement to grant licenses of the scope granted under this Agreement.

B. Licensed Invention means .

C. Licensed Products means .

II. Grant of License. Licensor grants to Licensee license to manufacture, use, sell, and otherwise practice the Licensed Invention throughout the United States, its territories, and possessions for the full term of the Licensed Patents, including any extensions or reissues of the same.

III. Royalty. Licensee will pay royalties to Licensor at the rate of % of the net selling price of all Licensed Products sold or otherwise disposed of subsequent to . Net selling price means: invoice price, f.o.b. factory, after deduction of standard discounts, but before deduction of any other items.

IV. Resale of Licensed Products. If any Licensed Products are sold for resale to a corporation or firm in which Licensee owns a controlling interest, the royalties to be paid in respect to such Products shall be computed on the net selling price at which the purchaser for resale resells such Products rather than on the net selling price of Licensee.

V. Payment. Royalty payments under this Agreement shall be due and payable quarterly on or before the day of , , and of each year during which this Agreement is in effect.

VI. Cooperation. Licensor shall provide Licensee with all requested technical information relating to the Licensed Invention, provided that such information is in its possession, and shall aid Licensee in developing the Licensed Invention.

VII. Reporting. Licensee shall submit written reports to Licensor quarterly, according to the following schedule: Each such report shall include a statement of the number, description, and aggregate net selling prices of Licensed Products sold or otherwise disposed of during the preceding three calendar months and on which royalty is payable as provided in Section III.

VIII. Improvements. Any improvements relating to the Licensed Inventions are included within the scope of this License Agreement. If a patent is granted for any such improvement, Licensor shall then pay Licensee the royalty as provided for in Section III.

IX. Default. If Licensee commits any default or breaches with respect to any of the provisions of this Agreement, or fails to account for or pay to Licensor any of the royalties that become due under this Agreement, Licensor shall have the right to cancel this Agreement on days' written notice to Licensee. However, if Licensee cures the default or breach within days of written notice of the default or breach, the License shall not be canceled.

X. Bankruptcy. In the event of any adjudication of bankruptcy, appointment of a receiver, assignment for the benefit of creditors, or levy of execution directly involving Licensee, this Agreement shall then terminate.

XI. Warranties. Neither party makes any representations, extends any warranties, or assumes any responsibilities whatever with respect to use, sale or other disposition by the other party or its vendees or transferees of the Licensed Products.

XII. Transferability of Rights and Obligations. The License granted in this Agreement shall be binding on any successor to ownership or control of the Licensed Patents. The obligations shall run in favor of any successor of Licensee. Neither party shall have any right to assign its rights under this Agreement except to the purchaser of substantially all its business, without the written consent of the other party.

XIII. Termination. Licensee shall have the right to cancel this Agreement on days' written notice to Licensor.

XV. Severability. The invalidity of any portion of this Agreement will not and shall not be deemed to affect the validity of any other provision. If any provision of this Agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision.

XVI. No Waiver. The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

XVII. Governing Law. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

XVIII. Notices. Unless provided herein to the contrary, any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

XIX. Mandatory Arbitration. Any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect.

XX. Entire Agreement. This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

XXI. Modification of Agreement. Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

XXII. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

XXIII. Compliance with Laws. In performing under this Agreement, all applicable governmental laws, regulations, orders, and other rules of duly-constituted authority will be followed and complied with in all respects by both parties.

WITNESS our signatures as of the day and date first above stated.