EXHIBIT 00.XX
LICENSE AGREEMENT
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License Agreement (the "Agreement"), between SCT Development Venture, a
joint venture (the "Venture") of LoJack Venture Corporation and Micrologic, Inc.
("Micrologic"), and LoJack Corporation, a Massachusetts corporation having its
principal place of business at Norfolk Place, 000 Xxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx (hereinafter "LoJack"), with respect to certain proprietary rights
and certain patents that have been registered or are being registered with the
Patent and Trademark Office of the United States of America. The parties agree
as follows:
I. DEFINITIONS:
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Field means all aspects of stolen Vehicle recovery systems and Vehicle
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security systems, and any product or system in any way utilizing or operating on
LoJack's Sector Activation System as it now or hereafter may be operated.
Licensed Rights mean the LJU-III Patents and the LJU-III Proprietary
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Information.
LJU-III Patents. All patents now or hereafter during the term of this
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Agreement held by the Venture relating to LJU-III.
LJU-III Products include all products manufactured or distributed in any
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way utilizing or operating on LoJack's Sector Activation System as it is now or
hereafter may be operated by LoJack, including third-generation LoJack Units for
installation in consumer vehicles.
LJU-III Proprietary Information means all unpatented proprietary
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information of the Venture, including design details and operating
characteristics, information relating to installation, and all other things
treated as confidential by the Venture or not generally known, including all
related software, file structures, documentation, algorithms and related
software concepts, and all aspects of the Registration System, except as
otherwise provided
herein.
LoJack System means the system for locating and recovering stolen motor
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vehicles utilizing a computerized transceiver located in the vehicle (the
"LoJack Unit"), a terrestrial radio system for activating the LoJack Unit after
report of the theft (the "Sector Activation System"), and method of assigning
code numbers (the "Registration System") and a directional tracking unit
designed for installation in police vehicles (the "LoJack Tracking Computer").
Territory means, subject to Article VII, Section 4, anywhere in the
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world.
Vehicle means passenger motor vehicles, trucks, vans, motorcycles,
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tractors, trailers, buses, motorized construction equipment, aircraft and water
craft.
II. LICENSE GRANTS:
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1. PATENT AND PROPRIETARY INFORMATION LICENSE
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1. For the term of this Agreement and within the Territory,
the Venture grants to LoJack and its distributors and licensees, subject to all
terms and conditions set forth in this Agreement, the exclusive right, with the
right to sublicense, within the Field to make, use and sell LJU-III Products
within the scope of the LJU-III Patents and the LJU-III Proprietary Information,
provided, however, that LoJack's right to sublicense manufacture shall be
limited to subcontractors manufacturing for LoJack, and shall not authorize
distributors or licensees to manufacture. Initially, the Venture shall be
responsible to manufacture, or select the manufacturer of, the LJU-III. LoJack
shall have the right to approve the manufacturer, the specifications, and the
terms of the contract, which approval shall not unreasonably be withheld or
delayed. The Venture shall sell LJU-III units it
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manufactures or has manufactured to LoJack at its direct cost. The Venturers
responsibility for and right to manufacture or contract for manufacturing
LJU-III units shall be limited to the first 100,000 units. If earlier, such
responsibility and right shall terminate one year after manufacturing commences,
in the event of the termination of the Venture, or upon failure of the Venture
to commence manufacturing.
2. For the term of this Agreement and within the Territory, the
Venture grants to LoJack and its distributors and licensees, subject to all
terms and conditions set forth in this Agreement, the right, co-terminous and
coextensive with the rights granted to LoJack herein, to sublicense the LJU-III
Patents and the LJU-III Proprietary Information, provided, however, that LoJack
may sublicense manufacturing only for the use of and sale by LoJack and not for
sale to third parties.
3. To the extent that any intellectual property developed by the
Venture constitutes an improvement to inventions encompassed by patents owned by
LoJack Corporation, such property hereby is assigned to LoJack, and LoJack shall
have the right to file patents on and to own such improvements. The filing or
granting of such patents shall not affect royalty or other obligations of LoJack
pursuant to this Agreement.
III. LIMITATIONS AND USE:
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1. USE OF LJU-III PROPRIETARY INFORMATION. The LJU-III Proprietary
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Information shall continue to be treated as Confidential by LoJack, and may be
used by LoJack only in connection with the rights granted hereunder, and with
reasonable care to assure its continued confidentiality.
2. EXTENT OF LICENSES. Subject to the limitations set forth in
paragraph II,
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2, above, the licenses granted herein shall be transferable within the Territory
for use within the Field.
IV. ROYALTIES.
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1. In each year, LoJack shall pay to the Venture royalties based
on the sale of third-generation LoJack Units according to the following
formula:
UNIT VOLUME PERCENTAGE OF
WHOLESALE
PRODUCT REVENUE
RECEIVED
First 99,999 Units 5%
Next 50,000 Units 4.5%
Next 50,000 Units 4%
All Additional Units 3%
Such Royalties shall be payable thirty (30) days after the end of each calendar
quarter.
2. LoJack will pay to the Venture a minimum royalty of $8,333.33
per month, commencing twelve (12) months after initial production of third-
generation LoJack Units commences. The minimum royalty shall be applicable to
the second, third, fourth and fifth years of production only, and shall
terminate after the fifth year.
3. As soon as practicable after the end of each fiscal year,
LoJack shall provide to the Venture accounting information sufficient to
determine wholesale product revenue received for the sale of LJU-III Products
and royalties due. The Venture shall have, at its own expense, the right to
audit such information, on reasonable advance notice. All accounting and
financial information provided by LoJack to the Venture shall be deemed
confidential and proprietary information of LoJack Corporation.
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V. OWNERSHIP OF RIGHTS. LoJack acknowledges the Venture's exclusive right,
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title and interest in and to the LJU-III Patents and the LJU-III Proprietary
Information, and will not at any time do or cause to be done any act or thing
contesting or in any way impairing or tending to impair any part of such right,
title and interest. The Venture acknowledges the LoJack's exclusive right, title
and interest in and to the intellectual property within the scope of Section II,
3, above, and will not at any time do or cause to be done any act or thing
contesting or in any way impairing or tending to impair any part of such right,
title and interest.
Each party agrees that for the term of this Agreement it shall promptly
notify the other in writing of any infringement or potential infringement of
patents owned by such other party of which it becomes aware.
VI. EXCLUSIVITY. The rights granted herein are exclusive in the Field.
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VII. TERMINATION.
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1. Except as specifically set forth below, the Venture shall not
have the right to terminate this Agreement at any time, for any reason, with or
without cause. In the event of a dispute between the parties, it shall be
submitted to binding arbitration under the commercial rules of the American
Arbitration Association, in Boston, Massachusetts. Both parties shall continue
to perform this Agreement pending resolution of the dispute.
2. If LoJack fails, for a continuous period of sixty days or more,
to pay royalties due pursuant to this Agreement, the Venture shall have the
right, on thirty (30) days advance written notice, to terminate this Agreement
in its entirety.
3. If LoJack ceases, for a continuous period of 12 months or more,
to
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manufacture any LJU-III Products, the Venture shall have the right, on thirty
(30) days advance written notice, to terminate this Agreement in its entirety.
4. The Venture shall have the right to limit the territories so as
to exclude any designated country on six (6) months written notice to LoJack
given not earlier than three (3) years from the commencement of manufacturing of
the third-generation LoJack Unit, provided that LoJack shall not, directly or
through a licensee or distributor, have sold the lesser of 25,000 LJU-III units,
or units representing 2% of annual new vehicle sales, in such countries as
operate a stolen vehicle recovery system compatible with such units. The
Venture's right so to limit the Territory shall expire, and the Territory shall
be restored to include such country, if, within six (6) months of the expiration
of such notice period, the Venture a stolen vehicle recovery system operating in
such country utilizing, at least in part, the LJU-III Patents or the LJU-III
Proprietary Information. With respect to jurisdictions which operate
incompatible systems, the Venture shall not supply units adapted for use with
such system or contract for their supply unless the opportunity shall have been
offered to and declined by LoJack.
5. Upon any termination of the Venture, LoJack's rights to use the
Licensed Rights within the Field and within the Territory shall continue,
however, royalties will not be payable to the Venture. Upon any termination of
the Venture, LoJack shall pay royalties to Micrologic, Inc. in an amount equal
to that percentage of the royalties which would have been due to the Venture
pursuant to this Agreement had the Venture continued in existence which equals
Micrologic.'s proportionate share in the Venture immediately prior to its
termination.
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In witness whereof the parties have signed this agreement this 1st day
of December, 1995.
SCT DEVELOPMENT VENTURE
By:
MICROLOGIC, INC.
By: /s/ Xxxxxxx Xxxxxx
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duly authorized
LOJACK VENTURE CORPORATION
By: /s/ Xxxxxx X. Xxxxx
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duly authorized
LOJACK CORPORATION
By: /s/ Xxxxxx X. Xxxxx
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duly authorized
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