EXHIBIT 10.4
LICENSE AGREEMENT
This Agreement is effective as of the 1st day of April, 1998, by and
between Xxxxxx X. Xxxxxxxx, Xx. an individual resident of Texas (hereinafter
"Licensee"), Logic Laboratories, Inc., a Delaware corporation having a place of
business at Leesburg, Virginia, (hereinafter "LLI") and Elgin E^2 Inc., a
Delaware corporation having a place of business at 00 Xxxxxxxxx Xxxxx, Xxxxxx,
Xxx Xxxxxxxxx 00000 (hereinafter "Elgin").
WHEREAS, LLI is the owner of certain patents and patent applications
related to lamp technology, especially for use in fluorescent lightning; and
WHEREAS, Elgin is the corporate parent of LLI and controls LLI; and
WHEREAS, Licensee as a condition of his investment in Elgin has
requested a license in LLI's proprietary fluorescent lamp technology as set
forth hereafter, and Elgin and LLI are willing to grant such a license.
NOW, THEREFORE, in consideration of the mutual promises made herein
and of other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
1.1 "Patent(s)" shall mean the issued patents and pending patent
applications relating to LLI's proprietary lamp technology, including without
limitation those listed in the attached Exhibit A, any divisions, continuations,
continuations-in-part or reissues thereof, and any foreign counterpart patents
and patent applications to any of the foregoing United States patents or patent
applications; and any U.S. or foreign patents covering "Improvements" as defined
below to any of the foregoing.
1.2 "Technical Data" shall mean any and all documents containing
design and technical information, engineering or production data, drawings,
plans, specifications, techniques, methods, processes, trade secrets, reports,
models, market research data, and any and all other material and matter used by
or in possession of LLI or Elgin and applicable to the design, manufacture,
assembly, service and sale of Products as defined hereafter.
1.3 "Know-how" shall mean the general and specific knowledge,
experience and information known to LLI or Elgin, not in written or printed
form, applicable to the design, manufacture, assembly, service and sale of
Products.
1.4 "Improvement" shall mean any modification of a product or method
described in a Patent, or any new product or method developed or acquired by
LLI or Elgin which relates to fluorescent lamp technology.
1.5 "Product" means any product which if manufactured, used or sold
by an unlicensed entity would constitute an infringement of a valid claim of a
Patent of the relevant jurisdiction.
1.6 "Method" means any method or process which if practiced by an
unlicensed entity would constitute an infringement of a valid claim of a Patent
of the relevant jurisdiction.
1.7 "Net Selling Price" shall mean the gross invoice or contract
price charged by Licensee or a sublicensee for each Product, but excluding the
following:
(a) all commercial, trade or cash discounts; and
(b) all adjustments or allowances actually granted by Licensee;
and
(c) all charges made by Licensee for boxing or packaging and for
transportation to destination; and
(d) all sales tax or direct governmental taxes;
(e) parts or components purchased from Elgin or LLI, or their
successors under this Agreement; and
(f) all charges for design, installation or other services in
connection with contracts to both provide and install
Products, unless such services constitute a Licensed Method.
1.8 "Territory" shall mean the states or countries listed in Exhibit
B to this Agreement and any other exclusive territories which Licensee acquires
exclusive rights in by exercise of its right of first refusal as provided in
Section 3 hereafter.
1.9 "Exclusive Account(s)" shall mean the entities listed in Exhibit
B and any other entities which Licensee acquires exclusive rights in by exercise
of its right of first refusal as provided in Section 3 hereafter, and
subsidiaries, parents, affiliates and successors of all such entities.
1.10 "Confidential Information" shall mean information regarding the
development of products or otherwise relating to the business of either party or
of a related company, including without limitation Technical Data and Know-how.
Confidential Information shall include all documents prepared by one party after
receipt of Confidential Information from the other and which contain or
otherwise reflect the Confidential Information. Information shall not be
considered confidential nor subject to this Agreement if it can be demonstrated:
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(a) to have been rightfully in the possession of the receiving party
prior to the date of the disclosure of such information to receiving party
by the disclosing party;
(b) To have been in the public domain prior to the date of the
disclosure of such information to the receiving party by the disclosing
party;
(c) To have become part of the public domain by publication or by
any other means except an unauthorized act or omission by the receiving
party; or
(d) To have been supplied to the receiving party without restriction
by a third party who is under no obligation to the disclosing party to
maintain such information in confidence.
1.11 "Change of Control" shall mean a merger, consolidation, or
acquisition of a corporation, or other transactions which result in a new person
or entity having power to control the corporation as power to control is defined
in 13 C.F.R. 121.401 (c) and (e) as of the date of this Agreement.
1.12 "Reserved States" shall mean those states identified as such in
Exhibit B to this Agreement.
2. GRANT
2.1 LLI hereby grants to Licensee a world-wide, right and license
under the Patents, Technical Data, Know-how and any other related intellectual
property rights of LLI to make, use and sell Products and to practice Methods,
with the right on the part of Licensee to grant sublicenses. Such right and
license shall be non-exclusive except:
(a) Licensee shall have the exclusive right to sell, lease or otherwise
dispose of Products to customers located in the Territory, to
install Products at sites located in the Territory, and to practice
Methods in the Territory; and
(b) Licensee shall have the exclusive, world-wide right to sell, lease
or otherwise dispose of Products to Exclusive Accounts and to
practice Methods on behalf of Exclusive Accounts.
Purchasers of Products shall acquire the right to practice any and all Methods
unless Licensee expressly provides in writing that such purchaser is not so
licensed. Elgin and LLI do not retain any right to market Products directly or
indirectly to customers in the Territory, or to Exclusive Accounts.
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2.2 LLI and Elgin shall furnish Licensee with all Technical Data and
Know-how owned by or in the possession of LLI or Elgin which is applicable to
the Products.
2.3 LLI and Elgin will immediately disclose any Improvement to
Licensee.
2.4 The acceptance of the foregoing licenses and/or any technical
assistance provided by LLI or Elgin, or the payment of any royalty or other
compensation by Licensee to LLI with respect to any Products manufactured and
sold by Licensee shall in no way constitute an admission by Licensee that such
product comes within the scope of the Patents or that the Patents are valid or
enforceable against Licensee or its customers.
2.5 The granting by Licensee of sublicenses under the Patents,
Technical Data and Know-how shall be in the discretion of Licensee, and Licensee
shall have the sole power to determine whether or not to grant sublicenses, the
identity of the sublicensees, and the royalty rates, terms and conditions of
such sublicenses, provided that LLI is paid a royalty as provided in Section 4
on Products manufactured and sold by sublicensees just as if such Products had
been manufactured and sold by Licensee. Licensee shall further provide in the
terms of any sublicense that sublicensee's rights are subject to any existing or
future exclusive licenses granted by LLI, and that sublicensee may be required
to cease marketing of Products in areas outside the Territory, or to specific
customers, in accordance with such exclusive agreements.
2.6 Licensee agrees to use reasonable efforts to market Products
sold to Licensee by LLI in the Territory. Such obligation shall remain effective
until the last of the Patents covering states in the Territory expires, but
shall apply only if and to the extent that Products are made available to
Licensee by LLI pursuant to Section 6 below. Licensee may exploit the licenses
granted herein as determined in his sole discretion, and is under no express or
implied obligation to commercialize Products or Methods in the event that
Licensee's obligation to purchase Products from LLI lapses as provided in
Section 6.
3. ADDITIONAL LICENSES; RIGHT OF FIRST REFUSAL
3.1 LLI and Elgin agree that, for a period of two (2) years from the
effective date of this Agreement, neither LLI nor Elgin shall grant or offer to
grant to anyone other than Licensee an exclusive license under any of the
Patents, or an exclusive right to distribute Products, in any Reserved States.
If Licensee and/or its sublicensees make sales in a Reserved State during such
two year period, such state shall cease to be a Reserved State and become part
of the Territory.
3.2 In the event that LLI intends to grant an exclusive license
under any of the Patents, Technical Data or Know-how or an exclusive right to
distribute its products for a geographic area outside of the Territory or for a
customer other than an Exclusive Account, Licensee shall have a right of first
refusal as to such exclusive license or exclusive right of
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distribution. Upon receipt by Licensee of a copy of specific, detailed offer to
enter into an exclusive license or exclusive right of distribution, which
Licensee agrees to review in confidence, Licensee shall have fifteen (15)
business days from the date it receives the terms of the offer to enter into an
agreement adding the territory covered by the offer to the exclusive Territory
of this Agreement, or adding the customer to Licensee's Exclusive Accounts, on
substantially the same terms as the terms agreed to by the third party. LLI may
if it wishes withhold the name of the offeror from the terms of the offer it
provides to Licensee. If Licensee does not exercise his right of first refusal
as provided in this paragraph, then the scope of the license granted in Section
2 of this Agreement shall be deemed modified to exclude from the non-exclusive
license grant the territory or customer(s) to which exclusive rights have been
granted by LLI.
3.3 Any exclusive or non-exclusive license or distribution rights
granted by LLI to a third party shall unambiguously state that the third party
is prohibited from marketing products covered by a Patent in the Territory or to
an Exclusive Account, and shall include in the terms of any such license or
distribution agreement a provision for the termination of such agreement in the
event that a violation of Licensee's exclusive rights under this Agreement
occurs. LLI shall invoke such right of termination upon Licensee's request if
such a violation has occurred and continues unabated for more than 30 days after
LLI or Licensee informs the third party of the violation, and Licensee provides
LLI with reasonable evidence that a violation has occurred and is ongoing, or
LLI has ready access to such evidence. LLI shall also invoke such right of
termination upon Licensee's request if the same third party commits three or
more such violations, whether or not abated within 30 days of notice, and
Licensee provides LLI with reasonable evidence that the violations have
occurred, or LLI has ready access to such evidence.
4. ROYALTIES, REPORTS AND PAYTMENTS
4.1 Licensee agrees to pay a royalty at the rates provided for in
paragraph 4.4 of this Section 4 on all Products manufactured by Licensee or a
sublicensee and thereafter sold or otherwise disposed of for profit under the
license herein granted by Licensee or a sublicensee. No royalty shall be payable
on Products purchased by Licensee or a sublicensee from LLI or Elgin, other than
Products purchased from LLI or Elgin designated for delivery or installation in
the State of Texas, for which a royalty shall be payable. No royalty shall be
payable for Products purchased from LLI or Elgin designated for delivery or
installation in states of the Territory other than Texas.
4.2 Licensee agrees to make written reports to LLI quarterly within
thirty (30) days after the first days of each January, April, July and October,
during the life of this Agreement and, as of such dates, stating in each such
report the number and description of Products manufactured and thereafter, used,
sold or otherwise disposed of under the license herein granted during the period
for which the report is rendered. The first such report shall
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cover the quarterly period or portion of quarterly period beginning on the
effective date of this Agreement; provided, however, that no report shall be due
for any quarter if no Products are used, sold or otherwise disposed of during
such period by Licensee or a sublicensee, unless LLI has requested such a
report. LLI may not request such a report more often than semiannually.
4.3 Licensee also agrees to make a written report to LLI within
thirty (30) days after the date of any termination of this Agreement, stating in
such report the number and description of Products manufactured and thereafter
used, sold or otherwise disposed of and not previously reported to LLI.
4.4 Simultaneously with the making of each report provided for in
paragraphs 4.2 and 4.3 of this Section 4, Licensee agrees to pay to LLI for the
quarterly period covered by such report, a percent royalty of the Net Selling
Price of all royalty-bearing Products sold by Licensee or its sublicensee(s).
The royalty rate shall be two and a half percent (2.5%) of the Net Selling Price
of such Products.
4.5 When the total cumulative royalties paid to LLI pursuant to this
Section 4 reach one million dollars ($1,000,000.00), the licenses granted
hereunder shall be deemed paid-up, and Licensee and its sublicensees shall have
no further obligation to pay the royalty specified in paragraph 4.4.
5. RECORDS
Licensee agrees to keep records of manufacture, use, sale or other
disposition of Products by Licensee and any sublicensees with respect to which
royalty payments hereunder are to be made in sufficient detail to enable the
royalties payable hereunder by Licensee to be determined, and further agrees to
permit its books and records to be examined from time to time to the extent
necessary to verify the reports provided for in Section 4 hereof, such
examination to be made at the expense of LLI by LLI or any auditor appointed by
LLI reasonably acceptable to Licensee, such examination to occur on no less than
ten (10) business days advance notice in writing during Licensee's regular
business hours.
6. SUPPLY
6.1 For so long as a Patent covering a state in the Territory
remains valid and unexpired, LLI agrees to make and sell to Licensee the
Products listed in Exhibit C to this Agreement, and any Products of like kind
offered by LLI which supercede such listed Products. Such Products shall be made
available in amounts sufficient to meet one hundred percent (100%) of Licensee's
requirements and at prices and terms that are the most favorable prices and
terms for comparable products of similar nature sold by LLI. Licensee shall
place orders for Products from time to time in accordance with its needs, and
except as provided
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below, shall not purchase Products from other suppliers during the term of this
Agreement, but shall have no continuing obligation to purchase Products.
6.2 If LLI is unable to produce and sell to Licensee Products at
prices, quality and quantity reasonably acceptable to Licensee, Licensee shall
give notice to LLI in writing of the basis for its non-acceptance, and LLI shall
have a period of thirty (30) days in which to take corrective action or to seek
arbitration, if the dispute is over what constitutes a reasonable price for
Products and quality and quantity are not at issue. If at the end of such thirty
day period the condition(s) which caused Licensee to give such notice have not
been corrected and neither party has requested arbitration pursuant to Section
14 below, then Licensee may elect to obtain Products from another supplier or
suppliers, or manufacture Products on his own account, or pursue the same
options with products competitive with Products offered by LLI not covered by a
Patent of the relevant jurisdiction.
6.3 During the pendency of any arbitration proceeding concerning
pricing of Products, LLI will continue to sell Products to Licensee at the price
in effect prior to the request for arbitration, or if there is no price then in
effect, at a price which represents the average of what LLI and Licensee each
consider to be a reasonable price.
6.4 Except as provided in Section 6.5, Licensee agrees to return to
purchasing Products from LLI if LLI can provide reasonable proof that it is able
once again to meet Licensee's current and reasonably foreseeable needs for
Products at prices, quality and quantity reasonably acceptable to Licensee.
6.5 Once Licensee has made a substantial investment in preparation
for manufacture of Products himself or through a sublicensee pursuant to
paragraph 6.2, should LLI again become able to meet such demand in the future,
LLI may be reinstated as sole supplier of the Products under this Section 6 by
purchasing at Licensee's original cost the manufacturing capability invested in
by Licensee and complying with the conditions of paragraph 6.4. In the event
that LLI purchases Licensee's manufacturing capability as provided herein,
orders for Products placed by Licensee or his sublicensees at that facility
shall have priority over and be filled prior to orders placed by others, such
that existing supplies of Products made at that facility shall not be shipped to
other customers while orders placed by Licensee or his sublicensees are pending.
7. TERMINATION
7.1 This Agreement shall remain in force perpetually until
terminated. The obligation to pay royalties pursuant to Section 4 shall expire
when the last of the Patents expires.
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7.2 Licensee shall have the right at its option to terminate this
Agreement for material breach by LLI or Elgin upon thirty (30) days' written
notice to LLI, unless within such 30 day period the breach shall have been cured
by Elgin or LLI.
7.3 Licensee's failure to use reasonable efforts to market Products
in the Territory as set forth in Paragraph 2.3 shall not be grounds for
termination of this Agreement by LLI or Elgin. LLI and Elgin's exclusive remedy
in such event will be to declare any state in which LLI or Elgin can prove
Licensee's failure to use reasonable efforts to market Products as provided in
Paragraph 2.3 no longer part of the Territory. In no event shall either LLI or
Elgin have the right to assert a failure by Licensee to use reasonable efforts
to market Products in the Territory as set forth in Paragraph 2.3 sooner than
two (2) years from the effective date of this Agreement.
7.4 In the event of any termination of this Agreement, Licensee and
its sublicensees shall continue to have a nonexclusive license to make, use and
sell Products and practice Methods for a period of one year thereafter, for the
sole and limited purpose of permitting Licensee and its sublicensees to complete
any and all then existing contracts and disposal of any inventory of Products.
Any such manufacture and sale or other disposition shall be subject to the
payments provided for hereunder. No termination of this Agreement pursuant to
the terms hereof shall relieve Licensee from its obligation to make any payments
accrued, due or payable up to the date of such termination.
8. INFRINGEMENTS
8.1 LLI shall have first right to institute actions for infringement
of the Patent(s). LLI shall exercise control over and bear the costs of any such
actions, and shall be entitled to retain the entire amount of any recovery by
way of judgment or settlement, except that Licensee shall be entitled to the
entire amount of any recovery by way of judgment or settlement attributable to
infringement in the Territory or sales to Exclusive Accounts. If LLI proceeds
under this paragraph, such payment to Licensee shall be without deduction of any
kind for costs or attorneys fees.
8.2 LLI shall have the option, if it declines to enforce a Patent as
provided in paragraph 8.1, of offering to enforce a Patent jointly with
Licensee. If Licensee agrees, LLI and Licensee shall exercise joint control over
any such action, split the costs of any such action equally, and shall share
equally in any recovery by way of judgment or settlement.
8.3 If LLI declines to proceed under either of paragraphs 8.1 or
8.2, then Licensee may institute an action for infringement of the Patent. In
such a case, Licensee shall exercise control over and bear the costs of any such
action, and shall be entitled to retain the entire amount of any recovery by way
of judgment or settlement, whether or not attributable to infringements in the
Territory or to Exclusive Accounts. LLI shall cooperate with Licensee in
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any such action, and agrees at Licensee's request and expense to join such an
action as plaintiff or co-plaintiff.
8.4 The parties will promptly inform each other of any actual or
suspected infringement of any Patent that they become aware of.
9. PROSECUTION AND MAINTENANCE OF PATENTS
9.1 LLI shall control the prosecution of all applications for
Patents, provided, however, that LLI must use reasonable efforts to obtain broad
patent coverage that will increase the value of the license granted herein to
Licensee. LLI agrees that it shall pay the expenses of filing, prosecution and
maintenance of the Patents, and that it will not abandon (without refiling) or
fail to maintain a Patent or application for a Patent without providing Licensee
an opportunity to take ownership of such patent as provided hereafter.
9.2 LLI agrees to keep pending a continuation or division claiming
priority of Serial No. 08/656,687, filed May 31, 1996, for a DYNAMIC RANGE
DIMMER FOR GAS DISCHARGE LAMPS, until such time as Licensee agrees in writing
that such an application need no longer be maintained.
9.3 LLI agrees to file, upon Licensee's request, an application for
a broadening reissue of Xxxxxxxxx U.S. Patent No. 5,654,609 prior to August 5,
1999.
9.4 If Licensee so requests for one or more Patents, patent counsel
for LLI shall consult with patent counsel for Licensee to discuss patent
prosecution strategy before taking action on any application for a Patent. In no
event shall LLI or patent counsel for LLI take any action which would tend to
invalidate, render unenforcable, or disclaim any rights under any Patent (other
than terminal disclaimers required by law) without the prior written consent of
Licensee or patent counsel for Licensee.
9.5 Except as provided below, with respect to Improvements developed
or acquired by LLI, if LLI declines to file and prosecute an application to
obtain a Patent on such an Improvement, then Licensee may elect to file or take
over the prosecution of any such patent application. LLI shall assign such
patent application to Licensee without further consideration, and Licensee shall
bear all expenses thereafter incurred in connection with such prosecution. In
the event one or more patents owned by Licensee issue on such Improvements, LLI
shall have a non-exclusive license to practice inventions claimed in such
patents, provided it pays to Licensee a royalty of two and a half percent (2.5%)
of net sales of products covered by such patents. Notwithstanding the foregoing,
in the event that LLI determines in good faith that the Improvement is a
valuable trade secret, Licensee agrees not to file a patent application thereon
if LLI can provide reasonable evidence that the Improvement can be used
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commercially in a manner that competitors cannot reverse engineer in less than
three years, and that LLI has taken reasonable security measures to maintain the
secrecy of the trade secret.
9.6 LLI agrees that all applications for Patents shall be filed
first in the United States prior to filing in other countries.
9.7 If LLI determines that it wishes to abandon (without refiling)
or no longer maintain an issued Patent or pending application for a Patent, it
shall provide Licensee with a reasonable opportunity to take over the
prosecution or maintenance of such patent or application. LLI shall assign such
patent application to Licensee without further consideration, and Licensee shall
bear all expenses thereafter incurred in connection with such prosecution and
maintenance.
9.8 No later than nine (9) months following the filing date of any
United States application for a Patent, LLI shall give written notice to
Licensee or patent counsel for Licensee of its intention to file for foreign
patent protection based on the priority of such U.S. application. If LLI
determines that it does not wish to file for patent protection in one or more
countries in which Licensee desires protection, Licensee may file for such
protection on its own behalf and expense, and LLI shall assign such foreign
patent application(s) to Licensee without further consideration.
10. TRANSFERS
10.1 This Agreement and any license or rights hereunder shall be
assignable or otherwise transferable by Licensee, and any transferee of
Licensee, without the prior written consent of LLI.
10.2 This Agreement and any license or rights hereunder shall be not
assignable or otherwise transferable by LLI without the prior written consent of
Licensee, which shall not be unreasonably withheld. Licensee's withholding of
consent shall be deemed reasonable if it can demonstrate that the transfer of
the Agreement will have a material adverse effect on Licensee's ongoing business
under the license, or if it can demonstrate that the new owner will have
difficulty meeting its performance obligations under this Agreement. For
purposes of this section, this Agreement will be considered transferred if there
is a Change of Control of LLI or of Elgin.
10.3 LLI and Elgin agree that neither shall sell, pledge or
otherwise encumber any of the Patents, Technical Data or Know-how without the
prior written content of Licensee.
10.4 The licenses granted herein shall continue in effect in the
event that the ownership of the Patents changes, with or without breach of this
Agreement, and shall be considered to run with the Patents.
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11. REPRESENTATIONS AND WARRANTIES
(a) LLI covenants, represents and warrants that it is the exclusive
owner of all rights to the Patents, Know-how and Technical Data, except as noted
in (c) below.
(b) LLI and Elgin covenant, represent and warrant, to the best of
their knowledge, the Products do not infringe upon any other patents heretofore
issued in the United States or any foreign country, or the claims of any
presently pending third party patent application LLI or Elgin is aware of.
(c) LLI covenants, represents and warrants that there is no other
person, firm, corporation or other entity having any title or interest in or
license to the Invention, except as provided in the Security Agreements of
Xxxxxx Xxxxxxxxx and Xxxxxxxxx Xxxxxxxxx, which are of record in the U.S. Patent
and Trademark Office.
(d) LLI covenants, represents and warrants that there are no
outstanding options, licenses or agreements of any kind relating to the Patents,
or to the manufacture, use, sale or distribution of the Products or Improvements
except as specifically stated in this Agreement.
(e) LLI and Elgin covenant, represent and warrant that LLI has full
power to grant the rights, licenses and privileges herein given.
(f) LLI covenants, represents and warrants that it can perform as
set forth in this Agreement without violating the terms of any agreement it has
with any third party.
12. INDEMNITY
LLI and Elgin jointly and severally agree to indemnify Licensee
against all losses or damages that Licensee may suffer, including Licensee's
reasonable attorneys' fees, as a result of LLI's breach of any of the warranties
or representations set forth in Section 11 of this Agreement, or as a result of
any claim of patent infringement, copyright infringement, trade secret
misappropriation, or other intellectual property claim resulting from Licensee's
or its sublicensee's manufacture, use or sale of Products or practice of
Methods. During the term of any action brought against it as a result of such a
breach of warranty or representation or intellectual property claim, Licensee
shall be entitled to withhold such royalties as may otherwise be due under this
Agreement pending the outcome of the action, provided that when and if such
claim is abated, Licensee shall promptly pay over to LLI any royalties so
withheld not used to offset such damages or losses.
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13. CONFIDENTIALITY
Each party agrees to hold all Confidential Information of the other
in confidence, and shall take all necessary care to maintain the confidentiality
of such other's Confidential Information. Each party shall each restrict the
number of employees having access to the Confidential Information to those
directly connected with the Products or those who otherwise need to know the
Confidential Information. Except as otherwise provided herein, neither party
shall use any of the Confidential Information made available to it by the other
for any purpose other than as contemplated by this Agreement without the prior
written consent of the other. Information communicated to Elgin or LLI by Mr.
Xxxx Xxxxxx shall be considered information disclosed by Licensee for purposes
of this Agreement unless and until Xx. Xxxxxx advises the parties hereto
otherwise.
14. ARBITRATION
In the event the parties cannot agree to what constitutes a
reasonable price for Products as stated in Section 6 of this Agreement, the
parties agree to submit the matter to binding arbitration in accordance with the
Rules for Commercial Arbitration (the "Rules") of the American Arbitration
Association ("AAA") in effect at the effective date of this Agreement and in
accordance with the following Subsections of this Section. In the event of any
inconsistency between the Rules and the arbitration provisions of this Section,
the latter shall control.
(a) The arbitration shall be conducted by a sole arbitrator, to be
appointed by the parties within ten days from the filing of the Demand and
Submission in accordance with Section 7 of the Rules. If the parties fail
to agree upon a sole arbitrator within such ten-day period and fail to
agree to an extension of such period, the arbitration shall be conducted
by a sole arbitrator appointed by the AAA in accordance with Section 14 of
the Rules. The arbitrator appointed shall be knowledgeable concerning the
subject matter of the dispute. namely pricing evaluation for lighting
products, or products of a similar nature.
(b) The place of arbitration shall be Dallas, Texas, and the final
decision or award of the arbitrator shall be issued at the place of
arbitration. The arbitrator may, however, call and conduct hearings and
meetings at such other places as (i) the parties hereto may agree or (ii)
the arbitrator may, on the motion of a party, determine to be necessary to
obtain significant testimony or evidence. The law applicable to the
arbitration procedure shall be the Federal Arbitration Act, as
supplemented by any law of the place of arbitration that is not
inconsistent with the Federal Arbitration Act.
(c) The arbitrator shall have the power to authorize discovery
(including depositions, interrogatories, and document production) on a
showing of particularized
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need that the requested discovery (i) is likely to lead to material
evidence needed to resolve the controversy and (ii) is not excessive in
scope, timing, or cost.
(d) The arbitrator shall not have the power to rule upon any issue
or controversy other than price determination pursuant to Section 6.
(e) The final decision of the arbitrator shall be made within 120
days after the appointment of the arbitrator pursuant to Subsection (a) of
this Section.
(f) The final decision of the arbitrator shall be final and binding
on the parties. The affected party shall pay to the other party the
difference between the interim price in effect since the controversy arose
as provided in paragraph 6.3 and the reasonable price as determined by the
arbitrator. A reasonable price as determined by the arbitrator under this
section shall remain in effect until a material change in business
conditions creates a need for re-pricing, but in any event not less than
one (1) year, and the arbitrator may provide for a mechanism for future
annual price adjustments to account for inflation or deflation.
(g) Each of the parties shall bear an equal portion of the
arbitrator's fees, and each shall bear all of its own expenses.
15. MISCELLANEOUS
15.1 This Agreement constitutes the entire understanding and
agreement of and between the parties with respect to the subject matter hereof
and supersedes all prior representations and agreements. It shall not be
modified or varied by any oral agreement or representation or otherwise than by
an instrument in writing of subsequent date hereto duly executed by the parties.
Failure of either party to insist upon strict performance of any of the
covenants, terms or conditions of this Agreement shall not be deemed to be a
waiver of any other breach of default in the performance of the same or any
other covenant, term or condition contained therein.
15.2 This Agreement shall be construed and interpreted in accordance
with the internal laws of the State of Texas.
15.3 The waiver of any breach of this Agreement by either party
hereto shall in no event constitute a waiver as to any future breach, whether
similar or dissimilar in nature.
15.4 Each of the parties hereto forthwith upon request from the
other shall execute and deliver such documents and take such actions as may be
reasonably requested in order to fully carry out the intent and purposes of this
Agreement.
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15.5 It is hereby declared and acknowledged by the parties hereto
that nothing herein shall constitute them partners or agents one for the other.
Neither LLI nor Elgin shall have any authority to bind Licensor legally or
equitably by contract, admission acknowledgement, undertaking or otherwise
except as expressly provided herein.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
below.
Elgin E^2 Inc.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxx
__________________, President
Logic Laboratories, Inc.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Xxxxxxx Xxxxxxx
__________________, President
/s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------------
Xxxxxx X. Xxxxxxxx, Xx.
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EXHIBIT A
U.S. PATENTS
------------
Title Patent No. Issue Date
----- ---------- ----------
Gas discharge lamp and power distribution system therefor 5,485,057 January 16, 1996
Gas discharge lamp and power distribution system therefor 5,654,609 August 5, 1997
PENDING U.S. PATENTS
--------------------
Title Application No. Filing Date
----- --------------- -----------
Improved dynamic range dimmer for gas discharge lamps 08/656,687 May 31, 1996
Socket and ballast for a gas discharge lamp 08/826,378
Light switch cover plate with audio recording and playback feature 08/885,027 June 30, 1997
FOREIGN PATENT APPLICATIONS
---------------------------
Country Application No. Filing Date
------- --------------- -----------
PCT 94US9955 Xxxxx 0, 0000
Xxxxxxxxx 9477947 March 22, 1995
Europe 94928556 December 11, 1996
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EXHIBIT B
Territory: Texas
Exclusive Accounts: Wal-Mart Stores, Inc.
The Boeing Company
Lockheed-Xxxxxx Corporation
Reserved States: Florida, California
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EXHIBIT C
Specific Products to be Sold by LLI:
Drivers for fluorescent lights
Control units for controlling operation of multiple drivers
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