Exhibit No. 10.3
License dated March 5, 1997 between Mason Hanger National, Inc. and
Electronic Control Security Inc. relating to the license of certain intellectual
property used in connection with the manufacture of the FOIDS Product Line
LICENSE AGREEMENT
This LICENSE AGREEMENT is made and entered into by and between XXXXX &
HANGER NATIONAL, Inc., a Delaware corporation, having its principal office and
place of business at 000 Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000, (hereinafter
the Licensor), and ECSI International, Inc., a New Jersey company, having its
principal office and place of business at 00 Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx
00000, (hereinafter the Licensee).
WITNESSETH
WHEREAS, Licensor is the owner by Assignments recorded in the United
States Patent Office of the Licensed Patents listed in Section 1 below; and
WHEREAS, the parties hereto desire that Licensor grant Licensee a License
to manufacture, use and sell products, hereinafter referred to as "Licensed
Products", and to practice the inventions described and claimed within the
Licensed Patents.
NOW THEREFORE, in consideration of the promises and mutual covenants cited
herein, and other good and valuable consideration, the receipt thereof which is
hereby acknowledged, and subject to Licensee obtaining a Licensing agreement
from Lucent, the parties do hereby agree as follows:
1. LICENSED PATENTS:
As used in this Agreement, the phrase "Licensed Patents" shall mean and
include:
A) U.S. Patent 5,355,208, entitled: "DISTRIBUTED FIBER OPTIC SENSOR FOR
LOCATING AND IDENTIFYING REMOTE DISTURBANCES", inventors: Xxxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxxxxxx, Xxxxx X. Xxxx and Xxxx X. Xxxxxxxx and any reisssues,
reexaminations or extensions thereof;
B) U.S. Patent 5,373,487, entitles: "DISTRIBUTED ACOUSTIC SENSOR",
inventors: Xxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxxxx, Xxxx X. Xxxxxx, Xxxx X.
Xxxxxxxx and Xxxx Xxxxxx and any reissues, reexaminations or extensions thereof;
and
C) US. Patent 5,567,933 (issuing 10/22/96) entitled: "OPTICAL FIBER
DETECTION SYSTEM WITH DISTURBANCE AND POSITIVE CUT-LOOP DETECTION CAPABILITIES",
inventors; Xxxxxxx X. Xxxxxxxx and Xxxxx X. Xxxxxxxx and any reissues,
reexaminations or extensions thereof.
2. LICENSED PRODUCTS
As used in this Agreement, the phrase "Licensed Products"
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shall mean goods, systems, structures and/or installations and components
thereof, the manufacture, use or sale of which would constitute an infringement
or a contributory infringement with respect to one or more of the claims of the
Licensed Patents and including equivalents thereof and Improvements thereon.
3. GRANT OF LICENSE:
Licensor agrees to and does hereby grant to Licensee, upon and subject to
the terms and conditions hereinafter set forth, including Section 7, an
Exclusive License to make, use and sell Licensed Products covered by the
Licensed Patents within the geographic area described in Section 5 hereof.
Licensor specifically retains the right to make, use and sell the License
Products covered by the Licensed Patents within the geographic area described in
Section 5 hereof.
4. TERM:
This Agreement and the License granted under it shall expire ten (10)
years from the effective date of this Agreement which shall be March 5, 1997
unless sooner terminated under the provisions hereof.
5. GEOGRAPHIC AREA:
The rights granted to Licensee hereunder shall be exercised by Licensee
world wide.
6. DEFINITION OF "NET SALES PRICE":
As used herein the term "Net Sales Price" shall mean the invoice price
charged by Licensee for Licensed Products sold by Licensee less:
A) Refunds, credits and allowances actually made or allowed to customers
for returned Licensed Products;
B) Any sales, or similar, taxes set forth as part of the invoice price;
C) Trade discounts and allowances that would normally be incurred in
Licensee's business exclusive of anticipations afforded to and actually taken
by customers in payment of Licensed Products; and
D) Any freight charges.
If Licensee sells Licensed Products to a related marketing organization or
any individual or company in whole or in part controlled or owned by Licensee,
the invoice price used to determine the "Net Sales price" hereunder shall be, if
greater than Licensee's "Net Sales Price", the invoice price at which the
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Licensed Products are sold by such related entity to any unrelated customer in
an arms length transaction.
7. ROYALTIES:
For the License herein granted with respect to the Licensed Patents,
Licensee shall pay to Licensor royalties in the sum equal to five percent (5%)
of the "Net Sales Price" for Licensed Products sold.
Should Licensor not be paid royalties of at least $25,000.00 for a full
license year, beginning the first license year of this agreement, Licensor shall
have the right: at any time during the succeeding license year to declare this
exclusive license to be a non-exclusive license or to terminate the license, at
Licensor's option. In such event Licensor may grant licenses to any other
persons or entities on terms and conditions as Licensor deems appropriate.
Licensee may retain the exclusive license by paying to Licensor, in addition to
the royalties actually paid for any full license year, the difference between
the sum of $25,000.00 and such royalties. Such payments must be made within
thirty (30) days of the end of the license year. Licensor must notify Licensee,
in writing, within ninety (90) days of the end of such license year of any
termination or change in the status of the license to a non-exclusion license
for failure to pay Licensee the minimum royalties recited herein.
8. LICENSEE'S RECORDS:
Licensee shall keep and maintain at its regular place of business complete
books and records of business transactions by Licensee in connection with the
Licensed Products covered by the Licensed Patents, including, but not limited
to, books and records relating to the "Net Sales Price" and orders for such
products. Licensee's accounting records of sales, shipments, installations and
returns of Licensed Products shall be maintained separately from accounting
records relating to other items manufactured or sold by Licensee. Such books and
records shall be maintained in accordance with generally accepted accounting
procedures. Licensor, or its duly authorized agents or representatives, shall
have the right to inspect such books and records at Licensee's premise during
regular business hours, provided that Licensor shall give Licensee at least ten
(10) days advanced written notice of its intention to do so and provided that
such inspections will be limited to one inspection per calendar year. In the
event that Licensee has understated "Net Sales Price" or underpaid royalties in
excess of ten percent (10%) of said net shipments for the calendar year,
Licensee shall forthwith and upon written demand also pay Licensor's costs, fees
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and expenses incurred in conducting an audit with respect to books and records
kept with respect to the Licensed Products. Should any audit disclose that the
royalties paid exceed the actual royalties due, Licensee shall be entitled to a
credit equal to such excess royalties against the royalties next accruing under
this Agreement. In the event no further royalties will be accruing under this
Agreement, then to the extent such audit discloses that the royalties paid
exceeded the actual royalties due, the excess shall be paid to Licensee.
9. LICENSEE'S MONTHLY REPORTS 0F SALES AND ROYALTY PAYMENTS:
On or before the first day of each month during the term hereof, Licensee
shall deliver to Licensor written statements certified to be true and correct by
the Chief Financial Officer of Licensee, setting forth the sales and "Net Sales
Prices" of Licensed Products for the proceeding month together with a check
payable to Licensor in full payment of the earned royalties shown on such
statement to be due under Section 7 hereof.
10. BEST EFFORTS OF LICENSEE:
Licensee shall use its best efforts and skills to make, use and sell the
Licensed Products. In the event Licensee fails to sell Licensed Products using
such best efforts and skills, Licensor shall have the right to cancel and
terminate this Agreement by giving written notice of such termination to
Licensee.
11. RESTRICTIONS UPON SUBCONTRACTS:
Licensee shall only have the right to enter into subcontracts including
imports for the manufacture, use and sale of Licensed Products upon written
consent of Licensor. Any subcontracts by Licensee shall be governed and
condition on the same rights, privileges, restrictions and requirements
including payment of royalties, right to inspect, and to take accountings as
provided elsewhere in this Agreement.
12. ASSIGNMENT AND TRANSFERS:
No assignment, transfer, sale, sub-license, or conveyance of any of
Licensee's rights, duties or interest in this Agreement shall be made without
Licensor's prior written consent and shall be subject to the provisions of this
Agreement, including royalties, right to inspect, accountings, termination and
rights of Licensor unless otherwise agreed to in writing between the parties.
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13. PRESERVATION OF THE PATENTS:
Licensee shall cause to appear on all Licensed Products and/or on all
materials used in connection with the sale thereof such legends, markings and
notices as may be required by laws governing the geographic area in order to
give appropriate notice of all patent rights granted and pertaining to the
Licensed Patents. Such products or materials associated with the Licensed
Product should bear the xxxx "Patented" and the Patent Number(s) of the Licensed
Patent(s).
14. INFRINGEMENT AND OTHER LITIGATION:
Licensor represents that it is the sole owner of all rights to the
Licensed Patents exclusive of the rights of all others. The Licensor has no
present knowledge or belief that any of the claims of the Licensed Patents are
not valid and enforceable and that Licensor has the absolute right to grant this
License.
In order to protect rights of each party under this Agreement, each party
will keep the other fully informed of the infringement of any Licensed Patent
by third parties. The Licensor shall have the right to be represented by council
at Licensor's expense in any legal action taken to enforce any patent rights
with respect to the Licensed Patents against a third party infringer.
Responsibility for the cost and expenses of such legal action shall be mutually
agreed upon in writing between the Licensor and Licensee prior to the
institution of any such legal action. In any action by Licensor or Licensee
whether by original petition, complaint, or by counterclaim against a third
party for violation of patent rights in the Licensed Patents, each party shall
be entitled to retain any settlement, recovery, and/or awarded damages in
proportion to the agreed upon percentage of the cost and expenses of such
action. Absent any agreement for maintaining such a legal matter to enforce the
Patent Rights, Licensor shall, in its own judgment, take whatever action it
deems necessary at its own expense.
With respect to any third party suit or action against Licensee whether by
original petition, complaint, or by counter-claim, seeking to declare invalid
and/or unenforceable all or any of the claims of any of the Licensed Patents,
the defense fees, cost, and expenses shall be agreed upon by the parties hereto
as soon as reasonably practical after the commencement or such third party suit
or action. If Licensor refuses to participate in any such third party suit or
action, the Licensee may defend and prosecute such action and, in such event,
shall be entitled to the entire amount of any award of damages, settlement or
recover,
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exclusive of royalties otherwise due to the Licensor.
15. DEFAULTS BY LICENSEE:
Except as otherwise expressly provided for in this Agreement, in the event
Licensee shall default in the performance of any of the terms and conditions to
be performed hereunder, including the payment of royalties, and the same shall
not be cured within ten days (10) after written notice to Licensee, Licensor
may, at its option, or any time thereafter, cancel and terminate this Agreement.
16. LICENSOR'S RIGHT UPON TERMINATION:
In the event this Agreement is cancelled or terminated, Licensee shall
assign and transfer any and all rights of Licensee to all Licensed Patents and
Licensed Products to Licensor and shall not thereafter use the same in any
manner. Upon cancellation or termination, all Licensee's stock of Licensed
Products on hand may be purchased by Licensor.
17. INSURANCE
Licensee does indemnify and hold harmless Licensor for any liability or
claim thereof based upon the manufacture, use and sale by Licensee of the
Licensed products. To this end, Licensee and its Sub-Licensees, if any, agree to
carry product liability insurance with respect to License Products. Such
insurance may be obtained in conjunction with product liability insurance which
covers products other than the Licensed Products. Licensee shall deliver to
Licensor, at Licensor's request, a certificate evidencing the existence of such
insurance policies promptly upon written request by Licensor.
18. ATTORNEY'S FEES AND APPLICABLE LAW:
In the event Licensor or Licensee shall commence any action or proceeding
against the other by reason of any breach or claimed breach of the performance
of any of the terms or conditions of this Agreement, or to seek a judicial
declaration or rights hereunder, the prevailing party of such action or
proceeding shall be entitled to reasonable attorney's fees to be fixed by the
court or the applicable hearing officer(s). In any legal action or proceeding
brought in which any right or obligation arising from this Agreement is at
issue, the law applicable hereunder shall be the law of the State of Kentucky.
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19. NO AGENCY OF PARTIES:
This Agreement does not make Licensee the agent or legal representative
of Licensor nor Licensor the agent or legal representative of Licensee for any
purpose whatsoever. Except as otherwise provided herein, Licensee is not granted
any right or authority to assume or to create any obligation or responsibility,
express or implied, on behalf of, or in the name of, Licensor or to bind
Licensor in any manner or thing whatsoever; nor, except as otherwise provided
herein, is Licensor granted any right or authority to assume or create any
obligation or responsibility, express or implied, on behalf of, or in the name
of, Licensee or to bind Licensee in any manner or thing whatsoever. No joint
venture or partnership between Licensor and Licensee is intended nor shall be
inferred.
20. ADDRESS FOR NOTICE
All notices between the Licensor and Licensee shall be in writing
addressed to Licensee or Licensor at the respect address set forth below and
shall be effective upon receipt if mailed by first class mail.
Licensor: Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Licensee: c/o, Xxxxxx Xxxxx, President and COO
ECSI International, Inc.
00 Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
If any of the parties hereto shall during the term of this Agreement
change address, then, upon given written notice to the other party of the new
address, the new address shall be the address for notice hereunder.
21. WAIVER BY LICENSOR:
In the event Licensor shall, at any time waive any of its rights hereunder
this Agreement or the performance by Licensee of any of its obligations
hereunder, such waiver shall not be construed as a continuous waiver or the same
rights or obligations or a waiver of any other rights or obligations.
22. SEPARABILITY:
Any provision of this Agreement which shall be, or is
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determined to be, invalid, shall be effective, but such invalidity shall not
affect the remaining provisions hereof.
23. BINDING UPON SUCCESSOR:
This Agreement shall be binding upon and shall enure in order to the
benefit it of the parties hereto and their respective heirs, successors and
assigns.
FOR LICENSOR
XXXXX & HANGER NATIONAL, INC.
By: [ILLEGIBLE] its TREASURER
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3/7/97
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Date
FOR LICENSEE;
ECSI INTERNATIONAL, INC.
By: Xxxxxx Xxxxx its Pres.
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11/29/96
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Date
