LICENSE AGREEMENT
THIS LICENSE AGREEMENT (this "Agreement"), dated as of October 22,
1996, is by and between Xxxxxxx X. Xxxx, a resident of the State of Maryland
(together with his heirs and permitted assigns, "Xxxx"), and The Ashton
Technology Group, Inc., a Delaware corporation ("Ashton").
WHEREAS, Ashton is the owner of certain technology and rights relating
thereto; and
WHEREAS, Ashton is willing to grant to Xxxx and Xxxx desires to
acquire from Ashton a license to use such technology;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises set forth herein and for other good and valuable
consideration, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement:
"AFFILIATE" means, with respect to a Person, any other Person
controlled by or, as of the date of this Agreement, controlling or under common
control with, such Person. "Control" (including the terms "controlling",
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, the
holding of proxies, by contract or otherwise.
"Field of Use" means any and all fields of use other than the
Financial Services Industry.
"Licensed Technology" means the technology described on Exhibit A
hereto employed by Ashton, utilizing CSI, Alliant TechSystems Inc. and
Information Security Systems Incorporated, as subcontractors, to develop the
Ashton Technology Encryption Devices ("ATED"), including the ATED Key Management
System, encryption software and crypto-server technology, but excluding all
trade and service names and trademarks and service marks associated therewith.
"Financial Market Participants" means any Person who participates, in
any capacity, in the Financial Markets, including, without limitation,
investment banking companies, broker dealers, investment companies, banks,
commercial trust companies, thrift institutions, savings and loan associations,
mutual savings banks and credit unions, life insurance companies, property and
casualty insurance companies, reinsurance companies, pension funds, and state
and government retirement funds.
"Financial Markets" means (A) all U.S. and foreign registered national
securities exchanges, the Nasdaq market systems, markets for securities,
physical commodities in commercially accepted bulk units, commodities and other
futures, derivatives, options, currencies
and commercial paper, (B) clearing corporations and depository trust companies,
(C) wire transfer systems including, without limitation, the Federal wire and
S.W.I.F.T, and (D) electronic market information systems, including, without
limitation, Instinent, Bloomberg, Investment Technology Group, Dow Xxxxx,
Telerate and Reuters.
"Financial Services Industry" means all U.S. and foreign Financial
Markets and Financial Market Participants to the extent, and only to the extent,
such Financial Markets and Financial Market Participants involve, execute or
engage in the trading, by electronic or other means, of securities, physical
commodities in commercially accepted bulk units, commodities and other futures,
derivatives, options, currencies and commercial paper. For example, the
definition of Financial Services Industry would not encompass a network
established by a company for communication among its branch offices. The
definition would, however, encompass a computer network used by the same company
to allow its pension administrator to execute trades on behalf of the company's
pension fund.
"Person" means any individual, corporation, partnership, limited
liability company or partnership, firm, joint venture, association, joint stock
company, trust, unincorporated organization, governmental entity or other entity
or organization.
2. GRANT OF LICENSE. Effective as of the Effective Date, Ashton
hereby grants to Xxxx, a perpetual, exclusive (subject to the provisions of
Section 4 hereof) and worldwide license, at his own cost, to use, sublicense,
reproduce, and make derivative works and enhancements of, the Licensed
Technology for any purpose within the Field of Use. Neither Ashton nor its
Subsidiaries nor Xxxx shall have any present or future obligation to update,
upgrade or modify the Licensed Technology.
3. TRANSFER AND HANDLING OF LICENSED TECHNOLOGY. (a) Upon written
request of Xxxx and at such place and time as reasonably requested by Xxxx,
Xxxxxx shall provide Xxxx with one (1) copy of the Licensed Technology as it
exists on the date of transfer. To the extent reasonably practicable, upon
transfer to Xxxx all components of the Licensed Technology shall be stamped or
marked as "Confidential and Proprietary Information." The Licensed Technology
and copies thereof shall be kept in a locked and safe place at the principal
offices of Xxxx or other place as disclosed to Ashton in writing.
(b) Notwithstanding anything contained herein to the contrary, the
Licensed Technology is provided "AS-IS" and ASHTON DOES NOT MAKE NOR SHALL
ASHTON BE DEEMED TO HAVE MADE, AND ASHTON HEREBY EXPRESSLY DISCLAIMS, ANY
WARRANTY, EXPRESS OR IMPLIED, AS TO THE VALUE, CONDITION, WORKMANSHIP, DESIGN,
PATENT INFRINGEMENT, COPYRIGHT INFRINGEMENT, OPERATION, MERCHANTABILITY, OR
FITNESS FOR USE OF THE LICENSED TECHNOLOGY OR ANY OTHER REPRESENTATION OR
WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE LICENSED
TECHNOLOGY. In no event shall Ashton be liable to Xxxx, his Affiliates,
permitted assigns or sublicensees for lost profits, lost savings, or other
special, indirect or consequential damages arising out of any use or inability
to use the Licensed Technology, or for any claim against them by any other
party.
4. LICENSE FEE. During the period beginning on the date of this
Agreement and ending four years thereafter, Xxxx shall pay to Ashton a
cumulative license fee equal to $100,000 (the "License Fee") in order to retain
the exclusivity of the license granted in Section
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2. The License Fee shall be reduced by the total amount of royalties paid to
Ashton during such period pursuant to Section 6. If (i) Xxxx fails to pay the
License Fee when due or (ii) Xxxxxxx X. Xxxx dies prior to paying the License
Fee and his heirs or permitted assigns do not agree in writing within three
months of Xxxxxxx X. Xxxx'x death to pay the License Fee when due, in either
case, Ashton shall have the right, effective immediately upon default to license
the Licensed Technology, on such terms and conditions as Ashton shall determine,
to any one or more persons for use in any field of use including the Field of
Use.
5. RIGHT TO SUBLICENSE. Ashton hereby grants to Xxxx the right to
grant sublicenses to third parties to use the Licensed Technology in the Field
of Use on such terms and conditions as are consistent with this Agreement.
6. ROYALTY. In consideration of the license granted in Section 2,
Xxxx shall, or shall cause his Affiliates and permitted assigns under this
Agreement, if any, to pay to Ashton a perpetual royalty equal to 2% of the total
gross revenues earned by Xxxx, his Affiliates and permitted assigns under this
Agreement, if any, from use, maintenance or support of the Licensed Technology.
Such royalty shall be payable on an annual calendar year basis within 90 days
after the end of each calendar year. Royalty payments which are not timely made
shall bear interest at 10% per annum.
7. RECORDS. Xxxx shall, and shall require his Affiliates,
sublicensees and permitted assigns under this Agreement to keep accurate
financial accounts of the gross revenues generated by use of the Licensed
Technology in accordance with generally accepted accounting principles. Xxxx
shall and shall cause each such Person to render a full statement (the "Royalty
Statement") of the same in writing to Ashton for each calendar quarter for so
long as this Agreement remains in effect. All Royalty Statements shall be
accompanied by a certificate signed by Xxxx, or an executive officer of Xxxx'x
Affiliates, sublicensees or permitted assigns under this Agreement, as the case
may be, which certificate shall show in sufficient detail how the royalty amount
was computed and state that the Royalty Statement has been reviewed by qualified
independent public accountants. Ashton shall have the right during normal
business hours to examine all of the books and records of Xxxx, his Affiliates,
sublicensees and permitted assigns under this Agreement that are relevant to the
determination of the royalties for the purpose of verifying Royalty Statements
and earned royalties.
8. DISCLAIMER OF OWNERSHIP; RESERVATIONS. Xxxx hereby disclaims and
waives for himself and his Affiliates and permitted assigns under this Agreement
any ownership rights, title, patent rights, copyrights and intellectual property
rights to the Licensed Technology, and all such rights, if any, are hereby
transferred and assigned in perpetuity to Ashton. Ashton hereby reserves to
itself the right to use, sell and sublicense the Licensed Technology itself for
any purpose in the Financial Services Industry, which Xxxx agrees is exclusively
reserved to Ashton.
9. IMPROVEMENTS. Xxxx shall be the exclusive owner of all rights,
title and interest in and to any derivative works, enhancements, upgrades,
improvements or developments of or in the Licensed Technology that may be made
or developed by Xxxx after the Effective Date ("Improvements"); PROVIDED,
HOWEVER, that Xxxx shall not use, sell or sublicense Improvements for any
purpose in the Financial Services Industry.
10. ENFORCEMENT. In the event that Xxxx or Ashton become aware that
any third
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party is or may be infringing or misappropriating any intellectual property
rights in the Licensed Technology, each shall promptly notify the other in
writing of such infringement or misappropriation. Either party may, at its
option, include in such notification a demand that the other party take
appropriate steps to enforce the rights in the Licensed Technology against such
third parties. If either party does not take such steps within ten calendar days
after receipt of such a demand, the other party shall have the right (but not an
obligation), at its own expense, to enforce the rights in the Licensed
Technology against third parties who are or may be infringing or
misappropriating any intellectual property rights in the Licensed Technology.
Xxxx'x rights of enforcement of the Licensed Technology shall be the same as if
Xxxx were a joint owner of all rights, title and interest in and to the Licensed
Technology. Ashton and Xxxx shall each provide reasonable cooperation and
assistance in connection with any enforcement of the Licensed Technology by
either party, including joining in any litigation or proceedings, at their own
cost, to the extent reasonably required for enforcement of Ashton and Xxxx'x
respective rights in the Licensed Technology against third parties. In the
event that either party takes action against any third party with respect to the
Licensed Technology (including without limitation the commencement of litigation
or licensing or settlement discussions), any and all recovery of damages,
monetary settlements or licensing or other revenues shall belong exclusively to
the party bringing such action, unless the other party has participated in the
defense of the Licensed Technology in which case such recoveries shall go first
to each party in the amount of such party's reasonable documented legal fees and
other expenses directly connected with its participation in the defense of the
Licensed Technology and then to Ashton to the extent that the infringement or
misappropriation was not within the Field of Use and to Xxxx to the extent that
the infringement or misappropriation was within the Field of Use, subject in the
case of recoveries to Xxxx in excess of Xxxx'x reasonable documented legal fees
and other expenses, to Xxxx'x royalty obligations under Section 6. Neither
Ashton nor Xxxx shall enter into any settlement or other agreement limiting the
other's rights in the Licensed Technology without the prior written consent of
the other party to such limitation.
11. CONFIDENTIALITY AND NON-DISCLOSURE. Xxxx shall, and shall cause
his Affiliates, permitted assigns and sublicensees to maintain the confidential
and proprietary status of the Licensed Technology and not use the Licensed
Technology for any purpose other than as provided in this Agreement. Xxxx
agrees that the Licensed Technology will not be disclosed to third parties and
will not be accessible to anyone without a need to know, or use, the Licensed
Technology to give effect to the purposes of this Agreement. Xxxx shall notify
each employee to whom access is given or disclosure is made with respect to the
Licensed Technology that such disclosure is made in confidence and shall be kept
confidential. Xxxx shall enter into appropriate agreements with his employees
to protect the confidentiality of the Licensed Technology. Xxxx will not
disclose the Licensed Technology to independent contractors and consultants
without first obtaining appropriate confidential disclosure agreements, and will
otherwise use at least the same degree of care used to protect his own
confidential information.
12. GOVERNMENT APPROVALS. It is understood and agreed that the grant
of a license hereunder may be limited by and subject to the export license
requirements of the United States Government respecting all intellectual
property rights in and to the Licensed Technology and encryption computer
software and hardware systems generally. Xxxx agrees to abide by and comply
with all existing and future laws and regulations which may be required to
obtain export licenses pursuant to the laws and regulations of the United States
Government respecting the Licensed Technology. Xxxx agrees to indemnify and
hold Ashton harmless from any breach of
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this obligation in connection with Licensed Technology including reasonable
attorneys' fees.
13. MISCELLANEOUS.
13.1 REPRESENTATIONS AND WARRANTIES. Each party represents and
warrants to the other party that (i) the execution, delivery and performance of
this Agreement has been duly authorized and all actions necessary for the due
execution, delivery and performance of this Agreement have been taken, (ii) this
Agreement constitutes the legal, valid and binding obligation of the parties
enforceable against each party in accordance with its terms, (iii) it has been
represented by legal counsel of its choosing, and (iv) this Agreement has been
executed and delivered as its own free act and deed and not as the result of
duress by any other party hereto.
13.2 FURTHER ASSURANCES. Each party agrees from time to time, at the
request of any other party to execute such documents or ratify such agreements
as may be reasonably necessary to effect the agreements contained herein.
13.3 MODIFICATION. This Agreement shall not be modified or amended
except by an agreement in writing executed by all parties hereto.
13.4 APPLICABLE LAW. This Agreement shall be governed under the law
of the State of Delaware without regard to the principles of conflicts of law
thereof.
13.5 ASSIGNMENT. Ashton may assign or otherwise transfer any of its
rights and interests, or delegate any of its respective obligations hereunder
without the prior written consent of Xxxx. Xxxx shall not assign or otherwise
transfer any of his rights and interests, nor delegate any of his respective
obligations hereunder without the prior written consent of Ashton; PROVIDED,
HOWEVER, that Xxxx may fully assign his rights and interests, and delegate his
obligations hereunder, effective upon written notice thereof, to any Affiliate
of Xxxx if such Affiliate assumes all of the obligations of Xxxx hereunder,
agrees to be bound by the terms of this Agreement and this Agreement remains
binding upon Xxxx.
13.6 ENTIRE AGREEMENT. This Agreement contains the entire and final
agreement between the parties with respect to the subject matter hereof, and no
oral statements, assumptions or representations or prior written matter not
contained or referred to in this instrument shall have any force or effect.
13.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be one and the same instrument.
13.8 SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
13.9 HEADINGS. The headings used in this Agreement are for
convenience only and shall not be deemed part of the agreements of the parties
set forth herein.
13.10 WAIVER. No consent or waiver, express or implied, by any
party to or of any breach or default by another party in performance by the
breaching party of its obligations
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under this Agreement shall be deemed or construed to be a consent or waiver to
or of any breach or default by the breaching party in the performance by such
breaching party of any other obligations of such breaching party under this
Agreement. Failure on the part of any party to object to or complain of any act
or failure to act of any of the other parties or to declare any of the other
parties in default shall not constitute a waiver of any right or remedy or the
ability to object or complain or to declare any default at any time in the
future.
13.11 SPECIFIC PERFORMANCE. The parties agree that any breach of
this Agreement by any party would result in irreparable harm for which the other
parties would not have an adequate remedy at law and that the parties shall each
be entitled to injunctive and other equitable relief to enforce specifically the
terms and provisions hereof, in addition to any other rights or remedies
available to such parties.
13.12 SUBMISSION TO JURISDICTION. Any judicial proceeding brought
with respect to this Agreement must be brought in any United States District
Court (or if such court lacks jurisdiction, any state court) sitting in
Wilmington, Delaware and by execution and delivery of this Agreement, each
signatory hereto (i) hereby submits to and accepts, generally and
unconditionally, the exclusive jurisdiction of such courts and any related
appellate court, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement and (ii) irrevocably waives any
objection it may now or hereafter have as to the venue of any such suit, action
or proceeding brought in such a court or that such court is an inconvenient
forum.
13.13 NOTICES. Unless otherwise provided herein, any notice,
request, instruction or other document to be given hereunder by any party to the
other parties shall be in writing and delivered in person or by courier or by
facsimile transmission to the address for notices set forth next to each party's
name on the signature page hereto or to such other place and with such other
copies as either party may designate as to itself by written notice to the
others. Any failure by any party to deliver copies of any notice shall not, in
itself, affect the validity of such notice if otherwise properly made to the
other party.
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IN WITNESS WHEREOF, this Agreement is executed by parties, effective
as of the day and year first above written.
THE ASHTON TECHNOLOGY GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
-----------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Director
00000 Xxxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
XXXXXXX X. XXXX
/s/ Xxxxxxx X. Xxxx
------------------------------------
Address for Notices: 00000 Xxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
Tel: 000-000-0000
Fax: 000-000-0000
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