Licensing Agreement - ICER Corp. and John H. Cover
LICENSING AGREEMENT
1. CONSIDERATION; EFFECTIVE DATE
1.1 The effective date of this agreement shall be Oct. 15, 1993.
2. PARTIES
2.1 John H. Cover is an individual with business located at Box 404, 4725
Sunrise Drive, Tucson, Arizona 85718 (LICENSOR)
2.2 ICER Corporation is an Arizona Corporation engaged in the development
of non lethal electronic weapons for sale to the general consumer market
(LICENSEE).
3. BACKGROUND
3.1 Licensor represents and warrants that he owns several patent rights,
both domestic and foreign as listed on Exhibit "A" though not in every
country of the world, and specifically U.S. Patent Number 4,254,132 and
5,078,117, (the Licensed Patents) concerning a power supply and ballistics
launching mechanism for weapons or other devices utilizing electricity for
immobilization purposes.
3.2 Licensor is not aware of any ownership of another of inventions or
patent rights or trade secret or know-how rights in conflict with his own;
and Licensor believes that he possesses such right, title and interest in
and to the electronic immobilization devices and equipment useful therein
as is necessary and appropriate to the terms of this agreement.
3.3 Licensee is a company seeking to develop such technology for
manufacture and marketing an alternative non lethal self defense device to
firearms.
3.4 Any other concepts, advanced technologies or other patents Licensor now
possesses or might obtain in the future are specifically excluded from this
agreement. HOWEVER, SUCH TECHNOLOGIES MAY BE COVERED IN SEPARATE
ARRANGEMENTS SPECIFYING CONTRACT AND SALARIED WORK.
4. LICENSE
4.1 Licensor hereby grants Licensee a non exclusive license for use of
patent number 4,254,132 and the electric wave form and power generator
described therein. Under said licensed patent to manufacture, use and sell
devices, with and without launching mechanisms covered by patent number
4,254,132.
4.2. LICENSOR HEREBY GRANTS LICENSEE LICENSE FOR PATENT 5,078,117. LICENSOR
IS LICENSED UNDER SAID PATENT TO MANUFACTURE, USE AND SELL DEVICES COVERED
BY PATENT 5,078,117. THIS LICENSE WILL BE EXCLUSIVE FOR DEVICES WHICH MEET
ALL OF THE FOLLOWING CHARACTERISTICS:
i) ELECTRONIC WEAPONRY DESIGNED TO IMMOBILIZE
ii) WEAPON AS IN i) WHEREIN THE GREATEST DIMENSION OF THE WEAPON IS
OF LESS THAN FOURTEEN INCHES.
iii) A WEAPON WHICH IS DESIGNED TO BE NON LETHAL
iv) A WEAPON DESIGNED FOR USE AGAINST HUMANS
THIS EXCLUSIVITY BINDS LICENSEE TO ENSURE THAT ANY FURTHER LICENSING
OF PATENT 5,078,117 DESCRIBES CLEARLY THAT THE LICENSING OF PATENT
5,078,117 DESCRIBES CLEARLY THAT THE LICENSE MAY NOT BE USED FOR
MANUFACTURE OF DEVICES WHICH MEET THOSE FOUR CHARACTERISTICS. THIS
EXCLUSIVITY WILL BE BINDING FOR TWENTY FOUR MONTHS (24). AFTER TWENTY FOUR
MONTHS, THIS EXCLUSIVITY CLAUSE WILL REMAIN IN EFFECT IF THE TOTAL EARNED
ROYALTIES PAID BY LICENSEE TO LICENSOR EXCEEDS $100,000 PER YEAR, USING
MONTHS 12-24 AS THE FIRST YEAR FOR SUCH CALCULATION. SHOULD THE EARNED
ROYALTIES FALL BELOW $100,000 PER YEAR, LICENSOR WILL BE FREE TO LICENSE
PATENT 5,078,117 FOR SIMILAR USE.
4.3. No party shall enter into any contracts or make any warranties on
behalf of the other party.
4.4. Licensee shall not negotiate sub license or assign this license unless
specifically authorized in writing by Licensor. Bona fide sales by Licensee
to bona fide third parties for resale are not sub licensing so long as
these sales are not in violation of Paragraph 6.12 below.
5. TERM OF LICENSE
5.1. The license will be for the period of validity of patent 4,254,132 on
devices utilizing the technology described therein
and for the PERIOD OF VALIDITY of patent 5,078,117 for mechanisms
utilizing the technology described therein.
5.2 Licensee's obligation to pay royalties, as set forth in
Paragraph 6, runs in favor of Licensor's heirs, successors and
assigns.
6. ROYALTIES
6.1 From Oct. 15, 1993 until the expiration of the above described
patents, unless Licensee ceases to make, use, or sell devices covered by
the Licensed Patents, Licensee agrees to pay Licensor a MINIMUM ROYALTY of
Two thousand five hundred and no/100 Dollars ($2,500) per month payable on
the 15th and on the 15th of each and every month thereafter during the
term of this license. Payment of the MINIMUM ROYALTY shall be delinquent
if not paid within 5 days after the due date.
6.2 LICENSEE ALSO AGREES TO PAY AN EARNED ROYALTY TO BE COMPUTED MONTHLY
AND, AFTER REDUCTION BY THE AMOUNT PAID IN CUMULATIVE MINIMUM ROYALTIES
ABOVE CUMULATIVE EARNED ROYALTIES, SAID EARNED ROYALTIES SHALL BE EQUAL TO
TWO DOLLARS PER UNIT ($2.00) FOR EACH UNIT WHICH UTILIZES THE POWER
GENERATION DEVICE AND ELECTRIC WAVE FORM DESCRIBED IN PATENT 4,254,132 AND
$0.25 PER UNIT FOR EACH DEVICE WHICH UTILIZES COMPRESSED GASSES TO LAUNCH
ELECTRICAL CONTACTORS FROM THE POWER GENERATOR. THIS $0.25 EARNED
ROYALTY SHALL REMAIN IN EFFECT FOR THE LIFE OF PATENT 4,254,132 IF IT DOES
NOT UTILIZE THE TECHNOLOGY DESCRIBED IN PATENT NUMBER 5,078,117. IF IT
DOES UTILIZE THE TECHNOLOGY DESCRIBED IN PATENT NUMBER 5,078,117, THEN THE
EARNED ROYALTY SHALL REMAIN IN EFFECT FOR THE LIFE OF SAID PATENT
5,078,117. AN EARNED ROYALTY OF $0.10 WILL BE PAID FOR "PRACTICE
CASSETTES" WHICH UTILIZE THE TECHNOLOGY IN PATENT 5,078,117, WHEREIN
"PRACTICE CASSETTES" ARE DEFINED AS DEVICES WHICH SIMULATE THE ACTION OF
PROPELLING ELECTRICAL CONTACTORS TO A TARGET BUT WHICH ARE
NON-FUNCTIONAL--I.E. ARE NOT RELIABLE CONTACTORS FOR USE IN COMBAT
SITUATIONS.
6.3 Licensee's MINIMUM ROYALTY payment is due on the 15th of each month.
MINIMUM ROYALTY payments are past due five days thereafter. If MINIMUM
ROYALTY payments are not made within five days of the due date, then a
DEFAULT of this agreement occurs automatically and without notice.
Licensee has
payment with a cashier's check or money order for the full amount of the
MINIMUM ROYALTY due. If the DEFAULT is not cured by payment of this MINIMUM
ROYALTY by cashier's check or money order by 5:00 P.M. on the tenth day after
which it is due, this licensing agreement is automatically terminated without
notice.
6.4. Licensee's EARNED ROYALTY payment is due on the fifteenth day of the month
following the month in which the REVENUES FROM SALES WERE RECEIVED. EARNED
ROYALTY payments are past due and delinquent if not paid by 5:00 P.M. on the
twentieth day of SAID MONTH. If EARNED ROYALTY payments are not made by the
twentieth of the month, then a DEFAULT of this agreement occurs automatically
and without notice. Licensee has until the thirtieth of the month to cure the
DEFAULT by payment with a cashier's check or money order for the full amount of
the EARNED ROYALTY due. If the DEFAULT is not cured by payment of this EARNED
ROYALTY by cashier's check or money order by 5:00 P.M. on the thirtieth day of
the month in which it is due, this licensing agreement is automatically
terminated without notice.
6.5. Royalties are payable by Licensee to Licensor at the address of the
Licensor.
6.6. Royalties are payable in U.S. Dollars
6.7. Accompanying each EARNED ROYALTY payment, Licensee will provide to Licensor
the accounting data on the sales of the licensed devices, including any daily
summaries and the monthly summary from which the gross sales figures for the
month are determined.
6.8. Licensee will keep books, accounts, and records that reflect all revenues
and expenditures incurred in connection with the operation of its business. The
books, accounts, and records shall be maintained at the regular place of
business of Licensee. Licensee, during regular business hours, shall make the
books, accounts, and records required to be maintained herein available to
Licensor and/or his designated legal representative for examination and audit by
appointment upon reasonable request and during normal business hours. Licensor
agrees to pay for said examination and audit, however, if said examination and
audit reveals a discrepancy of more than 5% of reported figures, Licensee shall
pay for an examination and audit
6.9. Within sixty days after the end of each calendar year, Licensee
shall prepare and deliver to Licensor a detailed statement of sales during
the calendar year that result from the operations of Licensee's business.
6.10. Licensor agrees that all such information shall be held by its
legal representatives, agents, trustees, attorneys, and accountants in
confidence.
6.11. Licensee will mark each of the subject devices with the following
notice: "Licensed under U.S. Patent No. 4,253,132" Or: "Licensed under U.S.
Patent No. 5,078,117" Or both.
6.12. DELETED.
7. INFRINGEMENT OF LICENSOR's PATENTS
7.1. In the event that any party shall become aware of any perceived
infringement or any appropriation of Licensor's patents, trade secrets, or
know how rights in the electronic immobilization devices or equipment,
products or materials useful therein, the party shall give notice thereof
to the other party hereto.
7.2. Licensee agrees to cooperate with any lawful efforts that
Licensor may undertake to seek legal remedies for any such infringements or
misappropriations.
8. INDEMNITIES FOR MALFEANCE, LIABILITY FOR PERSONAL INJURY OR PROPERTY
DAMAGE
8.1. The License herein granted to Licensee is primarily in the
nature of a sharing of information and a covenant not to sue for
infringements of the Licensor's rights and is not in the nature of a
specification of activities required of the Licensee or of equipment or
process of details required to be used by the Licensee.
8.2. The manufacture, use, and sale of Licensee's products shall be
the sole responsibility of Licensee and/or its agents.
8.3. Accordingly, Licensor shall not be liable for any personal injury
or property damage resulting from the design, construction, or use of the
licensed technology or of the equipment or products used in connection with
the technology, if such injury or damage arises from the activities of
Licensee.
8.4 In no event shall Licensor be liable for any direct, special,
incidental, or consequential damages, or any damages whatsoever, whether in
an action for contract, negligence, or other tortious action arising out
of, or in connection with, the use of any of the products covered by this
license.
8.5 Licensee shall protect, save, indemnify, and hold Licensor harmless
from all claims, demands, charges, or litigation arising out of the making,
using, or selling of the merchandise and devices produced and sold by
Licensee and arising, directly or indirectly, out of, or by reason of, any
business activities of Licensee. Licensee shall reimburse Licensor for all
loss, damage, or expense, including reasonable attorney's fees (should such
a creature exist), which he may suffer or incur, directly or indirectly, by
reason of any such claims, demands, charges, or litigation. This indemnity
shall extend to and include any claims for personal injuries or damage
caused to persons using the merchandise or devices made or sold by
Licensee.
9. CONTROLLING LAWS
9.1 All questions relating to the validity, interpretation, performance,
or enforcement of this agreement, whether by arbitration or otherwise,
shall be determined in a court with the laws applicable to the State of
Arizona, U.S.A.
10. BINDING EFFECT
10.1 Each and every provision on this license shall bind and shall inure to
the benefit of the parties hereto and their legal representatives.
10.2 The term "legal representatives" means in addition to executors and
administrators, every person, partnership, corporation, or association
succeeding to the interest or to any part of the interest in or to this
license or in the subject matter of this license, of either Licensor or
Licensee, whether such succession results from the act of a party interest,
occurs by operation of law, or is the effect of the operation of the law
together with the act of such a party. Each and every covenant, agreement,
and condition of this agreement to be performed by the Licensee shall be
binding upon all successors in the interest to Licensee.
11. NOTICES
11.1. All notices required herein shall be in writing.
11.2. Written notices may be delivered personally to the president of
the subject party or to the officer or person specified below.
11.3. Written notices shall be deemed to have been effective three days
following the date of mailing by certified mail, postage prepaid, return
receipt requested, addressed to John H. Cover, Licensor, as follows:
BOX 404
4725 Sunrise Dr.
Tucson, Arizona 85718
Licensee addressed to:
4601 East Indian Bend Road
Scottsdale, Arizona 85253
11.4 Each party shall have the right to change the effective address
for a notice by a notice in writing directed to the other party above.
12. ENTIRE AGREEMENT; AMENDMENTS; HEADINGS
12.1 This agreement together with its appendices constitutes the
entire agreement between the parties REGARDING LICENSING OF TECHNOLOGY, and
SUPERSEDES any prior communications ON THE SUBJECT whether written or oral.
12.2 This agreement may be amended or modified only by an instrument
in writing, signed by duly constituted officers of both parties.
12.3 No waiver, no matter how long continuing or how many times
extended, shall be construed as a permanent waiver or as an amendment to
this instrument.
12.4 The marginal headings herein are for purposes of convenient
reference only and shall not be used to construe or modify the terms
written in the text of this instrument.
13. FAILURE TO PERFORM
13.1. Licensee, as well as its successors in interest and or assigns, agrees
that failure to perform in accordance with the terms of this license,
terminates this license and any manufactures, use, or sale of devices covered
by the Licensed Patents, with or without launching mechanisms, thereafter is
without license.
AGREED,
By: /s/ Patrick Smith By: /s/ John H. Cover
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Patrick Smith John H. Cover
For ICER CORPORATION
Dated: 10/15/93
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CORPORATE SEAL
[SEAL]