EXHIBIT 10.9
AGREEMENT FOR THE
LICENSE AND TRANSFER OF INTELLECTUAL PROPERTY RIGHTS
FROM LIGHTRAYS, LTD. TO XENONICS, INC.
This Agreement is entered into at Carlsbad, California March 27, 1997.
ARTICLE I
PARTIES
The parties to this Agreement are:
LIGHTRAYS, LTD., a limited partnership organized under the California
Revised Limited Partnership Act, herein "Licensor", and
XENONICS, INC., a corporation organized under the laws of the State of
Delaware, herein "Licenses".
ARTICLE II
DEFINITIONS
The terms defined in this Article II unless the context otherwise
requires, for all purposes of this agreement and any amendment hereto shall have
the respective meaning herein set forth.
(a) "Lightrays Patent" means that certain United States Patent No.
5036444.
(b) "Lightrays Patent Improvements" means and includes all inventions,
discoveries, techniques, systems, methods, processes, improvements,
developments, enhancements and modifications (whether or not patentable,
commercially useful or reducible to writing or practice) that Lightrays or its
General Partner may hereafter, either solely or jointly with other, acquire,
discover, invent, originate, make, develop, conceive or hay, rights to, in whole
or in part pertaining to the Lightrays Patent herein defined, including, without
limitation, (i) any such invention or other item the practice of which would
fall within the scope of a claim of any Lightrays Patent Right, (ii) any Such
invention or other item which may be competitive with operations or applications
within the scope of any claim of any Lightrays Patent Right, any Lightrays
Know-How, any of the Other Rights or any Lightrays Products, and (iii) any
future application of the Lightrays Rights including by not limited to the
X-100, X-200 Speech Beam Lamp, X-300 Beacon Lamp, X-400 Cinematography Lamp,
aircraft landing lights and other marine search and spotlights.
(c) "Lightrays Patent Know-How" means all confidential or proprietary
information and knowledge not generally known to the public (including, without
limitation, information and knowledge regarding inventions, discoveries,
techniques, systems, methods and processes of any type, technical date,
drawings, designs, manufacturing and design information, computer programs and
other information), whether or not patentable and whether or not in written
form, the Lightrays owns or possesses and that relates directly or indirectly to
(i) any Lightrays Patent
Right or any product, process, design or other matter covered by any Lightrays
Patent Right, or (ii) the design, development, manufacture, testing, use of sale
of any Lightrays Products.
(d) "Lightrays Products" means (a) any light or light generating product
that (i) is encompassed by the claim of the Patent or any patent that issues
therefrom, or by the claims of any Lightrays Patent Know-How or Lightrays Patent
Improvements related to such patents, or (ii) otherwise relate to methods of
projecting light encompassed within the scope of the Lightrays Patent Rights,
the Lightrays Patent Know-How or any Lightrays Patent Improvements; and (b) any
products that otherwise utilize methods of projecting light and light
frequencies encompassed within the scope of the Lightrays Patent Rights, the
Lightrays Patent Know-How or any Lightrays Patent Improvements (regardless of
whether such methods or products are currently in existence or are developed
hereafter).
(e) "Lightrays Rights" means the Lightrays Patent Rights, the Lightrays
Know-How, and Other Rights and the Lightrays Patent Improvements.
(f) "Other Rights" means (i) the trademarks identified with the Lightrays
Products, (ii) any other trademark or service xxxx that is owned by the General
Partner as of the date of this Agreement and that relates directly or indirectly
to any Lightrays Patent Right, any Lightrays Patent Know-How or any Lightrays
Products, (iii) any other Proprietary Right that is owned by the General Partner
as of the date of this Agreement and that relates directly or indirectly to any
Lightrays Patent Right, Lightrays Patent Know-How, or any Lightrays Products,
(iv) any Proprietary Right that is developed or acquired by the General Partner
on or after the date of this Agreement and that relates directly or indirectly
to any Lightrays Patent Right, any Lightrays Patent Know-How, any of the
Lightrays Patent Improvements or any Lightrays Products, and (v) all goodwill of
the General Partner and Xxxxxxx Xxxxxx relating directly or indirectly to the
foregoing.
(g) "General Partner" means World Wide Technologies, Inc., General Partner
of Lightrays, Ltd.
(h) "Interpretation". Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter genders, and
vice versa, where applicable. Words importing the singular number shall include
the plural number, and vice versa, unless the context shall otherwise dictate.
ARTICLE III
LICENSE
The Licensor hereby grants to Licensee, an exclusive license, subject to
the terms and conditions of this Agreement, to the intellectual property of the
Licensor pertaining to the technology for a high intensity light developed on
low voltage electric power supply, including but not limited to: patent, patent
improvements, Lightrays Patent Improvements, Lightrays Know-How, Lightrays
Product and Other Rights as herein defined.
A. Authority of Licensee, subject to the terms and conditions of this Agreement:
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(1) Licensee is authorized to manufacture or cause to be manufactured,
sell, market, distribute, license, sublicense or otherwise market the products
developed or produced pursuant to this grant.
(2) To conduct such program for development, refinement, extension and
perfection of the technology and to conduct such experiments and research as may
lead to the application of the licensed technology to new products as are
consistent with this Agreement and the business plan hereinabove referred to.
(3) All conduct and activities of the Licensee pursuant to this Agreement
shall be consistent with the manufacture and production of quality products
manufactured in conformity with the highest commercial standards for utility and
durability.
(4) All business conducted by Licensee pursuant to this License shall be
conducted and carried out in compliance with all Federal, State, and local laws
and regulations applicable to the area where the business is conducted.
ARTICLE IV
TERM
The covenants and conditions of this Agreement shall Continue and shall
remain in effect until one of the following events shall occur:
A. Licensee shall not be in default of the terms of this Agreement and shall
complete in full all payments as provided in Article 6 of this Agreement. Upon
the full payment of consideration as provided in Article 6 this license shall
terminate and the Licensee shall acquire all, rights which are the subject of
this Agreement free and clear of any and all claims of the Licensor.
B. In the event Licensee, either by its acts or omission, shall commit a
significant breach of this Agreement, and the Licensor terminate this Agreement
by giving written notice of termination stating specifically the grounds and the
basis for such termination, the license and the rights granted pursuant to this
instrument shall terminate 60 days after the mailing of such notice unless said
breach is cured within said 60 day period. The following matter shall be deemed
to be significant breaches:
(1) Licensee fails to initiate a program for the manufacture or marketing
of the product utilizing the technology herein licensed within six months
following the granting of this license or Licensee ceases to aggressively carry
on a program for the development, manufacture or sale of any product under this
license for a continuous period of three months following the execution of this
Agreement.
(2) The Licensee fails to make any significant payment to the Licensor
pursuant to the terms of Article 6 of this Agreement within the period of
eighteen months immediately following the execution of this Agreement.
(3) The Licensee fails and refuses to protect the intellectual property
rights herein licensed as provided in Article 8 of this Agreement after notice
Of infringement
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(4) Licensee challenges the rights of Licensor to the intellectual
property which is the subject of this Agreement.
(5) Licensee violates the obligations set forth in Article 9 pertaining to
infringement as set forth in said Article 9.
(6) Licensee fails to perform the provisions of this Agreement pertaining
to assignments and sub-licensing as set forth in Article 12.
C. Immediately upon the expiration or termination of the license and the rights
granted under this Agreement, by reason of Licensee's conduct as set forth in
sub paragraph B of Article 4, Licensee agrees to cease and discontinue
completely and permanently further use of the license intellectual property
including any trade marks or trade names except that in the event the license
and the rights granted under this Agreement expire or terminate, Licensee shall
have a period of six months from the date of said expiration or termination to
use its supplies of marketing material and products on which the licensed rights
and trademarks have been applied prior to the date of the expiration or
termination provided that such use of license trademarks shall otherwise be in
accordance with the provisions of this Agreement.
After the cancellation, expiration or termination of this Agreement by its
terms, operation of law or otherwise, all rights, privileges and obligations
arising from this Agreement shall cease to exist; provided however the
confidentiality required in subsection A set forth in Article 11 of this
Agreement shall remain in effect.
D. In the event this license is terminated pursuant to the provisions of Article
4 above, the parties agree that any consideration paid licensor prior thereto
shall be deemed reasonable compensation to licensor for the rights granted
during the effective term of this Agreement. Licensor shall retain all such
consideration as liquidated damages for said breach.
E. Upon full performance of the obligation by Licensee, and payment of all
consideration to Licensor as provided in Article 6, Licensor shall forthwith
execute all paper and perform all acts required to vest legal title to the
proprietary rights and patent which is the subject of the Agreement.
ARTICLE V
TERRITORY
This license is granted to the licensee to be exercised throughout the
world. Licensee agrees that any and all transactions carried out pursuant to
this license which are conducted outside the United States shall be conducted in
conformity with all statutory and regulatory requirements of the United States
that may exist from time to time and at the time any particular transaction for
export control and on all statutory or regulatory standards of the location and
jurisdiction where the transaction is conducted.
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ARTICLE VI
CONSIDERATION
As consideration for the licensing and sale of the patent and intellectual
property rights which Lightrays, Ltd. agrees to transfer to Xenonics under the
provisions of the Agreement, Xenonics agrees to pay to Lightrays, Ltd. an amount
equal to the total investment to date by Lightrays, Ltd., by its individual
partners and by its predecessors in the development of the patent, the
proprietary rights and trade secrets, plus an additional sum equal to 100% of
said investment and to transfer to Lightrays, Ltd. a 10% interest in Xenonics,
Inc., a Delaware Corporation. The consideration shall be transferred and paid as
follows:
A. 10% interest in the corporation shall be transferred immediately upon the
execution of this Agreement.
B. Xenonics shall pay to Lightrays, Ltd. an amount equal to 66 and 2/3% of its
gross profit until an amount equal to the investment of Lightrays has been paid
in full.
C. After Xenonics has paid to Lightrays an amount equal to Lightrays, Ltd.'s
investment in the technology as herein above provided in subparagraph B of this
paragraph 3, Xenonics will pay to Lightrays, Ltd. a royalty of 3% of its annual
gross sales until such time as it has paid to Lightrays, Ltd. an additional sum
equal to 100% of the Lightrays, Ltd. investment in the light technology.
D. Upon completion of the payment as provided in this paragraph 3, and it
performance of the conditions herein provided, Xenonics shall own, free from all
claims of Lightrays, Ltd., all right, title and interest in and to the
intellectual property transferred pursuant to this Agreement, including but not
limited to U.S. Patent #5,036,444, together with any and all improvements,
refinements, adoptions, developments or other information that has been
generated or developed in any research or development program pertaining to the
subject matter of this Agreement whether by Xenonics, or Lightrays, Ltd., or any
other predecessor agreements.
E. For the purpose of this Agreement the partners of Lightrays, Ltd. total
investment in the technology is to date $1,983,825.00.
F. The initial payments herein provided on account of the purchase price shall
be made to Licensor no later than 60 days after the close of Xenonics fiscal
year ending in 1998 on the basis of the year end financial statement prepared by
a licensed CPA.
X. Xxxxx profit for the purpose of this Agreement is defined as net profit
before taxes. Annual gross sales as used in this paragraph include all income
derived from the sales of either products or intellectual property rights.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES:
A. Licensor represents and warrants that it has the right, power and authority
to enter into this Agreement and that the Agreement has been duly executed and
delivered; that this Agreement is valid, legal and binding and does not
contravene any other agreement to which the Licenser is a party or its
partnership agreement.
B. Licensee represents and warrants that it has the right, power and authority
to enter into this Agreement and that the Agreement has been duly executed and
delivered and this Agreement is valid and legal and does not contravene in any
country any other agreement to which the Licensee as a party has entered into or
presently exists.
C. Licensor represents and warrants to Licensee: The Licensor has not previously
assigned, transferred, conveyed, or otherwise encumbered such rights, title, or
interest other than any encumbrance listed on the attached schedule.
D. The Licensor is the sole, exclusive owner of the intellectual property, all
of which is free and clear of any liens, charges and encumbrance other than the
encumbrances listed on the attached schedule, and no other person or entity has
or shall have any claim of ownership with respect to the intellectual property
whatsoever.
E. There are no claims, judgments, or settlements to be paid by the Licensor or
pending claims or litigation relating to the intellectual property.
F. Parties acknowledge that a full and complete demonstration of the performance
of a prototype of the product has been demonstrated to Licensee; that production
products have not been produced and that Licensee enters into this Agreement
with the understanding and intention to conduct studies on the development,
refining and perfection of the products and the technology licensed under this
Agreement prior to production.
ARTICLE VIII
PROPRIETARY RIGHTS
A. The Licensee acknowledges that the Licensor is the sole owner of the
proprietary rights and the intellectual property licensed by this Agreement and
Licensee covenants that it shall not at any time during the term of this
Agreement challenge or contest the Licensor's title or ownership in and to the
intellectual property license.
B. The Licensee agrees on all occasions when the product or intellectual
property is introduced into a new country, jurisdiction or area, Licensee
agrees/will to take such action as is required to protect the intellectual
property herein licensed.
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ARTICLE IX
INFRINGEMENT
A. During the term of this Agreement Licensor grants to the Licensee an
independent right to initiate litigation against third parties for infringement
of the property licensed under this Agreement.
B. Licensee shall notify Licensor of any infringement, imitations, or
unauthorized possession of knowledge or use of the intellectual property by
others which the Licensee becomes aware.
C. Licensor shall notify the Licensee if it obtains knowledge of infringing
activity by any third party.
ARTICLE X
CONFIDENTIALITY:
A. During the term of this Agreement, each party shall keep confidential, and
other than as provided herein shall not use or disclose, directly or indirectly,
any trade secrets, confidential or proprietary information, or any other
knowledge, information, documents or materials, owned, developed or possessed by
the other party, whether in tangible or intangible form, the confidentiality of
which such other party takes reasonable measures to protect, including but not
limited to the technology. Each party shall take any and all lawful measures to
prevent the unauthorized use and disclosure of such information, and to prevent
unauthorized persons or entities from obtaining or using such information. Each
party further agrees to refrain from directly or indirectly taking any action
which would constitute or facilitate the unauthorized use or disclosure of such
information. Each party may disclose such information to its officers and
employees to the extent necessary to enable such party to perform its
obligations hereunder; provided, that such officers and employees have entered
into an appropriate confidentiality agreement for secrecy and non-use as such
information which by its terms shall be enforceable by injunctive relief at the
instance of the disclosing party. Each party shall be liable for any
unauthorized use and disclosure of such information by its officers and
employees.
B. Notwithstanding the foregoing, the provisions of Section A hereof shall not
apply to knowledge, information, documents or materials which the receiving
party can conclusively establish: (i) have entered the public domain without
such party's breach of any obligation owed to the disclosing party; (ii) have
become known to the receiving party prior to the disclosing party's disclosure
of such information to such receiving party; (iii) are permitted to be disclosed
by the prior written consent of the disclosing party; (iv) have become known to
the receiving party from a source other than the disclosing party other than by
breach of an obligation of confidentiality owed to the disclosing party; (v) are
disclosed by the disclosing party to a third party without restrictions on its
disclosure; or (iv) are independently developed by the receiving party without
breach of this Agreement.
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ARTICLE XI
ASSIGNMENT AND SUB-LICENSE:
A. During the term of this Agreement Licensee is authorized to enter into
sub-license agreement provided however, Licensee agrees to hold Licensor
harmless for all damages or loss sustained by Licensee by such sub-license
entered into by Licensee during the term of this Agreement and, if this
Agreement is terminated subject to Section 4B herein at all times after such
termination, that the licensee shall remain liable and at all times hereafter if
this Agreement is terminated under Article 4B hereof for all claims, which arise
under the sub-license agreement after the transfer. Licensee shall provide
Licensor with advanced notification of all of the sub-licenses and provide
Licensor of sub-licensee's identity and terms of the sub-license. Licensor, for
good cause, may deny Licensee the right to execute any specific sub-license
agreement proposal.
B. Licensee may assign the rights it acquired under the Agreement only with the
written consent of the Licensor.
ARTICLE XII
PAROLE EVIDENCE:
This Agreement, including the documents incorporated herein by reference
and assigned by Licensee and Licensor supersede all prior negotiations and
contain the entire agreement of the parties. No draft of this Agreement, any
changes or modifications made in the drafts in this Agreement or any difference
between drafts of this Agreement and this Agreement shall be utilized in any
manner, including as evidence of the parties intent or interpretation of this
Agreement.
ARTICLE XIII
TRADE XXXX AND TRADE NAME:
This License Agreement includes the grant of the right to use the trade
name and trade xxxx, "LR-100", on the high intensity, low voltage lamp. The
provisions, covenants, conditions, and terms of this license in addition to the
conveyance of the technology, patent, proprietary rights, and trade secrets,
also includes the trademark or trade name "LR-100" or "Lightrays 100" or
"Lightrays". The Licensee and the Licensor agree that the value of a trade xxxx
or trade name consists in its effectiveness of calling to a consumers' mind the
owner's reputation for quality in connection with the goods sold under the xxxx.
Licensee agrees that products produced under this License Agreement, utilizing
the trade xxxx LR-100 or Lightrays or any other trademark or trade name attached
to the products produced or sold under the technology licensed under this
Agreement shall duly include the xxxx on or with all goods licensed to be sold
under such xxxx shall include all notices and memoranda with respect to the xxxx
as are and may be required by applicable Federal, State or local law within the
territory which may be reasonably requested by the Licensor.
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ARTICLE XIV
TRADE XXXX AND TRADE NAME NOT USED ON PRODUCTS
NOT LICENSED HEREIN:
Except as required by law, no product other than that which is licensed
pursuant to this Agreement shall use the trade name, trademark, inscription, or
designation which is affixed to goods or packaging for the goods or shall appear
in advertising or promotion material placed or produced by the Licensee which
marks are used on the products produced under this license.
ARTICLE XV
TRADE XXXX - TRADE NAME USE VARIATIONS:
The Licensee shall at no time adopt or use without the Licensor's prior
written consent any variation of the marks or any word or marks likely to be
similar or confusingly similar with the xxxx used on products produced pursuant
to this license.
ARTICLE XVI
SEVERABILITY:
If any provision of this Agreement is held to be illegal, invalid, or
unenforceable under the present or future laws effective during the term of this
Agreement, the provision is fully severable; this Agreement is construed and
enforced as if the illegal, invalid, or unenforceable provision had never
comprised a part of this agreement; and the remaining provisions of the
Agreement will remain in full force and effect and will not be effected by the
illegal, invalid, or unenforceable provision; and there will be added
automatically as part of this Agreement a provision as similar in terms to the
illegal, invalid or unenforceable provision as may be possible and be legal,
valid and enforceable.
ARTICLE XVII
NOTICES:
Any notice to be given or to be served on any party to this Agreement in
connection with this Agreement must be in writing and is deemed to have been
given and received when delivered to the address specified by the party to
receive the notice. The notice shall be addressed to the respective parties at
the address which they designate in writing to opposing party.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS:
A. Governing Law - This Agreement and the rights of the parties under this
Agreement will be governed by, interpreted, and enforced in accordance with the
laws of the State of California.
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B. Binding Effect - Subject to the provisions of this Agreement relating to
transferability, this Agreement is binding on and inures to the benefit of the
Members, and their respective distributees, successors, and assigns.
C. Multiple Counterparts - This Agreement may be executed in several
counterparts, each of which is deemed an original but all of which constitute
one and the same instrument. However, in making proof only one copy signed by
the party to be charged is required.
D. Additional Documents and Acts - Each party agrees to execute and deliver
additional documents and instruments and to perform all additional acts
necessary or appropriate to effectuate, carry out, and perform all of the terms,
provisions, and conditions of this Agreement and the transactions contemplated
by it.
E. Amendments - All amendments to this Agreement must be in writing and signed
by all of the parties.
IN WITNESS WHEREOF, the undersigned have executed this Agreement, to be
effective as of the date of the date signed by the last party to sign.
Date: 3/27, 1997 LICENSOR: LIGHTRAYS, LTD.
BY WORLD WIDE TECHNOLOGIES, INC.,
a Nevada Corporation.
By______________________________
Date: 3/27, 1997 LICENSEE: XENONICS, INC.,
a Delaware Corporation
By_______________________________
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AMENDMENT TO AGREEMENT FOR THE
LICENSE AND TRANSFER OF INTELLECTUAL PROPERTY RIGHTS
FROM LIGHTRAYS, LTD. TO XENONICS, INC.
The parties to this Agreement agree:
WHEREAS a License Agreement has heretofore been entered into between
Lightrays, Ltd., a California limited partnership and Xenonics, Inc., a Delaware
corporation on April ___, 1997, and
WHEREAS the parties wish to acknowledge satisfaction by Xenonics of
provisions of that Agreement and to clarify ambiguities existing in the language
of said Agreement,
IT IS HEREBY AGREED
1. The requirements of Xenonics, Inc. specified in the last phrase of
the sentence set forth in Article IV, Paragraph B, sub-paragraph (1)
has as of the date of this document been satisfied.
2. The provisions of Article IV, Paragraph B set forth in sub-paragraph
(2) are stricken from the Agreement as superfluous and inconsistent
with the provisions of Article VI, Paragraph G.
Dated: June 9, 1997 LIGHTRAYS, LTD.,
a California limited partnership
By: WORLDWIDE TECHNOLOGIES, INC.
its General Partner
By_______________________________
Dated: June 9th 1997 XENONICS, INC.,
a Delaware Corporation
By_______________________________
President
