Exhibit 10.1

 

EXCLUSIVE LICENSE AGREEMENT

 

This Agreement is entered into this 30th day of June, 2004, by and between
AXCESS, Inc., having a principal place of business at 3208 Commander Drive,
Carrollton, TX 75006 (“Licensor”), and TechSearch, LLC (“TS”), having a
principal place of business at 500 Skokie Boulevard, Suite 585, Northbrook, IL
60062 (collectively referred to herein as the “Parties”).

 

WITNESSETH:

 

Whereas, Licensor is the owner of the U.S. Patents listed on the Schedule hereto
and all corresponding patent applications, foreign patents and foreign patent
applications, and all continuations, continuations in part, divisions,
extensions, renewals, reissues and re-examinations of any of the foregoing (the
“Patents”);

 

Whereas, Licensor is willing to grant worldwide exclusive license rights in the
Patents to TS and TS in turn, desires to exploit and enforce the Patents and to
provide Licensor a certain percentage of the net profits, royalties, revenues
and other proceeds arising from such exploitation and enforcement as provided
herein.

 

NOW, THEREFORE, in consideration of the promises and mutual covenants contained
herein and for other good and valuable consideration, Licensor and TS agree as
follows:

 

ARTICLE 1  — TITLE; CERTAIN REPRESENTATIONS

 

1.1  Licensor represents that it is the sole owner of the Patents and has all
right, title, claims, interest and privileges arising from such ownership, free
and clear of liens, encumbrances, rights or restrictions. Licensor has not
assigned, licensed, transferred or otherwise conveyed to any other person or
entity any of its rights, title, claims, interest or privileges with respect to
the Patents. Licensor has not granted any covenant not to sue with respect to
the Patents. Licensor further represents and warrants that all maintenance fees
that have become due with respect to the Patents have been paid in full; the
Patents are not subject to any action or proceeding concerning their validity or
enforceability; Licensor has no knowledge of any basis for any claim that the
Patents are invalid or unenforceable; and, to the best of Licensor’s knowledge,
Licensor has not engaged in any conduct, or omitted to perform any necessary
act, the result of which would invalidate the Patents or preclude their
enforceability. The parties understand and agree that Licensor has manufactured
certain products which it has sold to third party customers and such use of the
Patents by Licensor’s customers in the past shall not be subject to this
Agreement, as such use shall be considered a permissible use in the same manner
as the Licensor’s future customers as described in Section 2.2 below.

 

ARTICLE 2 — GRANT

 

2.1  Subject to Section 2.2 below, Licensor grants TS the worldwide, exclusive
right and license under the Patents to make, have made, use, offer or sell
products or services covered by the Patents, including the exclusive right to
grant sublicenses, to sue for and collect past and future damages and to seek
and obtain injunctive or any other relief for infringement of the Patents.  The
exclusive right and license granted herein shall exist for the life of the
Patents, or as otherwise provided in Article 6, below.

 

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2.2  Immediately after execution of this Agreement, TS shall grant to Licensor a
royalty-free, world-wide, non-exclusive and non-transferable sublicense to make,
use and sell its own products using the patented inventions (the “Sublicense”);
provided, the Sublicense shall automatically terminate in the event of any
change in Control of Licensor if the company obtaining Control is a company that
TS had previously notified in writing is or may be infringing the Patents.  For
this purpose, the terms “Affiliate” and  “Control” shall have the meanings
assigned to them in Rule 12b-2 under the Securities Exchange Act of 1934.

 

ARTICLE 3 — ROYALTIES AND OTHER PAYMENTS

 

3.1  TS shall pay Licensor a continuing royalty equal to fifty percent (50%) of
the Net Proceeds, as defined below. For purposes hereof, the following terms
shall have the following meanings:

 

“Net Proceeds” shall mean Total Recoveries less the TechSearch Costs.

 

“Total Recoveries” shall mean the total recoveries actually received by TS from
the exploitation of the Patents including all recoveries from lawsuits or
settlements, including without limitation, recoveries in the form of cash,
stock, personal property, credits or benefits.

 

“TechSearch Costs” shall mean all costs and expenses incurred with third parties
in connection with prosecuting, licensing, enforcing or defending the Patents,
of a kind that are reasonably necessary in connection with such matters,
including without limitation (A) attorneys’ and paralegal fees (whether on an
hourly or contingent basis and whether for general or local counsel), costs and
disbursements, (B) the fees and costs of consultants, experts or technical
advisors (other than principals of TS or its affiliates); (C) travel and lodging
expenses; (D) duplicating, secretarial, stenographer, postage, courier and
similar expenses; (E) filing fees and other Patent Office fees or costs; (F)
court costs; (G) legal and other costs related to any re-examination or reissue
proceeding or in prosecuting any foreign application;  (H) legal and other costs
incurred in defending any action or counterclaim in respect of the Patents and
(I) legal and other costs in prosecuting or processing any application,
continuing application or continuation in part (collectively, the “TechSearch
Costs”).

 

3.2  Total Recoveries shall be applied in the following order of priority: first
to TS in an amount equal to the TechSearch Costs, then to TS and Licensor in
proportion to their respective shares of the Net Proceeds.

 

3.3  All amounts payable to Licensor shall be due within thirty (30) days after
the end of each calendar quarter with respect to Total Recoveries received by TS
in such quarter. TS will provide Licensor with a report of Total Recoveries and
TechSearch Costs in connection with each recovery.  Licensor will have the
right, at its expense, to audit TS’ records as they pertain to the Patents.

 

3.4  For purposes of confirming the payments to which it is entitled under this
Agreement, Licensor shall have the right to receive copies of any license or
sublicense agreement(s) and any settlement documents, subject to the execution
by Licensor of any necessary confidentiality agreement. TS shall disclose to
Licensor any relationship or arrangement between TS or any of its principals and
any proposed licensee or sublicensee.  Licensor’s consent shall be required
before TS may grant a license or sublicense to, or enter into any other
agreement or arrangement relating to the Patents with, any related party. TS
shall not solicit or receive any “kick back” or similar improper form of payment
from any prospective sublicensee.

 

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3.5  Licensor will be available from time to time to consult with TS or its
attorneys on matters relating to the Patents.  In the event the testimony of
Licensor is taken in any action relating to the Patents, TS’ attorneys will
represent it without charge, and it will cooperate in preparing for such
testimony.  Licensor will grant access to TS and allow TS to make copies of all
files in Licensor’s possession or control relating to the Patents, including
access to such documents as may be necessary to conduct enforcement and
licensing efforts. TS will pay for Licensor’s reasonable out of pocket travel
expenses incurred at the request of TS.

 

ARTICLE 4 – RECORDS; FEES

 

4.1  TS shall keep complete and proper records of the Total Recoveries and
TechSearch Costs.

 

4.2  Licensor shall have the right, during reasonable business hours, to have
the correctness of any report by TS audited, at Licensor’s expense, by an
independent public accountant chosen by Licensor who may examine TS’ records
pertinent to this Agreement. Licensor and its representatives shall hold in
confidence any such information and shall not use the information for any
purposes other than in connection with this Agreement.

 

4.3  For so long as this Agreement is in effect, Licensor shall pay all
maintenance fees with respect to the Patents on or before their due dates, at
the appropriate small or large entity rate.  In the event Licensor fails to make
any maintenance fee payment when due, TS may make such payment and such payment
shall be considered a TechSearch Cost.

 

ARTICLE 5 — ENFORCEMENT OF LICENSED PATENT RIGHTS

 

5.1  Subject to the terms of this Agreement, TS will pursue licensing and
enforcement of the Patents at its expense. TS will attempt to negotiate licenses
with companies that TS believes may be infringing the Patents. If, in TS’s
judgment, it is necessary and appropriate taking into account all the
circumstances, TS will institute enforcement action against certain or all of
the companies that TS believes are infringing the Patents. TS hereby agrees to
notify Licensor at least fifteen (15) days prior to TS filing legal action
against any third parties. The purpose of such notice to Licensor is to allow
Licensor to provide any information it may have to TS regarding the potential
defendant and to confirm that TS is not asserting claims against a customer’s
use of Licensor’s products.

 

5.2  TS shall have the exclusive right to bring suit to enforce the Patents.
Licensor may join as a plaintiff in such suit at its election, provided TS’
counsel determines that Licensor has standing.  Licensor shall join as a
plaintiff at TS’ request in the event TS’ counsel determines that Licensor is a
necessary party to the action; and TS may bring an action in Licensor’s name if
Licensor refuses to join as a party. In the event Licensor joins in the suit,
either before or after it is initiated, Licensor shall have the right to be
represented by counsel of its choice, provided that if Licensor chooses to have
representation separate from TS, Licensor shall be responsible for paying all
its own fees and costs related to such representation and TS shall be solely
responsible for the fees and costs incurred by its own counsel.  In the event
Licensor joins as a plaintiff at TS’ request or TS brings an action in
Licensor’s name, or Licensor is named as a party by another party to such
action, TS shall defend and indemnify Licensor against all liabilities, costs
and expenses related to such action, except that, as provided above, Licensor
shall be responsible for its own counsel’s fees and costs if it elects to retain
separate counsel. The parties agree to fully cooperate with each other in any
litigation that is brought.  Whether or not Licensor is named as a party to any
enforcement action, TS

 

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reserves the sole right to direct the litigation and to negotiate and determine
the terms of any settlement or other disposition of such action; and Licensor
will cooperate with TS as relates thereto.

 

ARTICLE 6 — TERMINATION

 

6.1 All grants, obligations and provisions recited in this Agreement and
relating to the Patents shall continue in full force and effect, unless sooner
terminated as provided herein, until the expiration date of the Patents or until
a final decree of invalidity thereof from which no appeal can be, or is, taken.

 

6.2  Licensor may terminate this Exclusive License in the event that TS files
for bankruptcy protection under any state or federal bankruptcy law or a
petition for bankruptcy is filed against TS and not dismissed within 90 days. 
Licensor may also terminate this Exclusive License unless, within five years
from the date hereof, TS has paid Licensor an aggregate of at least $10,000 in
royalties pursuant to this Exclusive License; provided, however, that, Licensor
shall provide TS with 90 days written notice of its intention to exercise its
right to terminate and during such 90 day period, TS may cure the failure giving
rise to the right of termination by paying such amount to Licensor.

 

6.3  Either party may terminate this Agreement upon written notice to the other
if the other party breaches any material representation, warranty or agreement
in this Agreement and fails to cure such breach within 90 days of receipt of
such written notice detailing the alleged breach.

 

6.4  TS may terminate this Agreement, upon 90 days notice to Licensor, if it
determines, in its judgment, that licensing or enforcement of the Patents on
commercially reasonable terms is not possible or practicable.

 

6.5  In the event of any dispute as to whether a party has breached this
Agreement pursuant to Section 6.3 above or whether a cure has been effected, the
matter shall be submitted to arbitration pursuant to Article 8 hereof, and there
shall be no termination of the license under this Agreement unless and until
there is a final ruling by the arbitration panel that there has been a breach as
provided herein that has not been cured.

 

6.6  Any termination of this Agreement shall not relieve TS of liability for any
payments due to Licensor accrued prior to the effective date of such
termination.

 

6.7  In the event of any termination of this Agreement, regardless of the cause,
after payment of any monies due Licensor, TS shall be entitled to retain or
receive the portion of Total Recoveries that it would be entitled to retain or
receive if this Agreement were in effect, which (i) accrued or was received
prior to the termination date,  (ii) accrues or is received after the
termination date as a result of any settlement, license agreement or other
agreement or transaction that was negotiated, made or occurred prior to the
termination date or (iii) resulted from any lawsuit or negotiations that were
pending at or prior to the occurrence of such termination.

 

6.8  Licensor expressly retains no right in itself to sue for infringement of
the Patents prior to any termination of this Agreement and specifically grants
TS all such rights prior to any termination.

 

6.9  The parties acknowledge and agree that this Agreement is a contract under
which TS is a licensee of intellectual property as provided in Section 365(n) of
title 11, United States Code (the “Bankruptcy Code”).  Licensor acknowledges
that if Licensor, as a debtor in possession or a trustee in bankruptcy in a case
under the Bankruptcy Code (the “Bankruptcy Trustee”), rejects this Agreement, TS
may elect to retain all of its rights under this Agreement as provided in
Section 365(n) of the Bankruptcy Code.  Upon written request of TS to Licensor
or

 

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the Bankruptcy Trustee, Licensor will not interfere with any of the rights of TS
as provided in this Agreement.

 

ARTICLE 7 — ASSIGNMENT

 

7.1  This Agreement shall inure to the benefit of, and be binding upon the
respective successors, assigns, heirs, beneficiaries and personal
representatives of Licensor and TS, subject to Section 7.2, below.

 

7.2  This Agreement is personal and non-assignable, except it may be assigned by
TS to an affiliate of TS, provided such affiliate agrees to be bound by all the
terms and conditions of this Agreement including the obligation to make payments
hereunder. Licensor may transfer or assign all or any part of its interest in
this Agreement or sell or transfer all or some of the Patents, provided that the
transferee or assignee agrees to be bound by the terms of this Agreement and
Licensor shall continue to be bound by the terms of this Agreement.

 

ARTICLE 8 — ARBITRATION

 

8.1  Any dispute or controversy arising out of, relating to, or in connection
with this Agreement or the interpretation, validity, construction, performance,
breach, or termination thereof, shall be settled by binding arbitration to be
held in Chicago, Illinois in accordance with the arbitration rules, as they
pertain to commercial disputes, of the American Arbitration Association.  The
decision of the arbitrator(s) shall be final, conclusive and binding on the
parties to the arbitration.  The costs and expenses of such arbitration
(including the reasonable fees and expenses of one counsel for each of the
parties) shall be paid by the non-prevailing party in such arbitration, as
determined by the arbitrator(s).

 

8.2  Neither TS nor Licensor shall be liable for any consequence or damage
arising out of or resulting from the manufacture, use or sale of products under
the Patents.  In no event shall any party be entitled to special, indirect,
consequential damages, including lost profits, or punitive damages for breach of
this Agreement.

 

ARTICLE 9 — MISCELLANEOUS

 

9.1  All notices or communications which either party may desire, or be
required, to give or make to the other shall be in writing and shall be deemed
to have been duly given or made if and when forwarded by registered or certified
mail to the address set forth above in this Agreement or to such other address
as a party shall give to the other in writing delivered at the last address
specified in the manner prescribed by this Agreement.

 

9.2  The failure to act upon any default hereunder shall not be deemed to
constitute a waiver of such default.

 

9.3  This Agreement constitutes the entire understanding of the parties with
respect to its subject matter and may not be modified or amended, except in
writing by the parties.

 

9.4  If for any reason in any jurisdiction in which any provision of this
Agreement is sought to be enforced, any one or more of the provisions of this
Agreement shall be held invalid, illegal or unenforceable in any respect, such
holding shall not affect any other provision of this Agreement and this
Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained therein.

 

9.5  This Agreement shall be governed by and construed in accordance with the
internal law of the State of Illinois applicable to contracts made and to be
performed wholly in that state, without regard to the law of conflicts.

 

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9.6  This Agreement may be executed in several counterparts, each of which shall
constitute an original, but all of which together shall constitute one and the
same instrument.  A faxed copy of a signature page shall be considered an
original for purposes of this Agreement.

 

9.7  The headings contained in this Agreement have been inserted for convenient
reference only and shall not modify, define, expand or limit any of the
provisions of this Agreement.

 

9.8  The parties agree to keep in confidence and not to disclose to any third
party the terms and conditions of this Agreement (although they may disclose the
existence of the Agreement), except to the extent required by statute or
regulation, subpoena or order of a court of competent jurisdiction and except to
their respective agents, employees, principals or representatives; and provided
that any third party to which disclosure is made as provided in this Section 9.8
shall agree to hold the information confidential except as otherwise required by
any subpoena or court order.

 

IN WITNESS WHEREOF, the Parties have executed this Exclusive License Agreement
on the date first written above.

 

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TECHSEARCH, LLC

 

 

By:

    /s/ ANTHONY BROWN

 

Its:

    President

 

 

 

STATE OF ILLINOIS)

COUNTY OF COOK)

 

On this 8th day of July, 2004, before me, Brian Spencer, a Notary Public in and
for said state, personally appeared Anthony O. Brown, who, being by me duly
sworn did say that it is the President of TechSearch, LLC, an Illinois limited
liability company, known to me to be the company described in the foregoing
Agreement, and acknowledged that said instrument was signed on behalf of said
company and said person acknowledged said instrument to be its free act and deed
and the free act and deed of said company.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal
in the County and State aforesaid, the day and year first above written.

 

 

 

/s/ Brian Spencer

 

 

Notary Public

 

 

My Commission Expires:  11/2/07

 

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AXCESS INC.

 

 

By:

  /S/ Allan Frank

 

Its:

   Vice President and CFO

 

 

 

STATE OF TEXAS           )

COUNTY OF DALLAS    )

 

On this 1st day of July, 2004, before me, Jason Lay, a Notary Public in and for
said state, personally appeared Allan Frank, who, being by me duly sworn did say
that it is the VP and CFO of Axcess Inc., a Delaware corporation, known to me to
be the company described in the foregoing Agreement, and acknowledged that said
instrument was signed on behalf of said company and said person acknowledged
said instrument to be its free act and deed and the free act and deed of said
company.

 

IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal
in the County and State aforesaid, the day and year first above written.

 

 

/S/ Jason Lay

 

 

Notary Public

 

 

My Commission Expires:  09/04/05

 

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SCHEDULE TO EXCLUSIVE LICENSE AGREEMENT

 

6,061,475

6,005,638

5,838,266

5,140,412

4,914,508

4,857,993

4,849,807

4,847,677

4,843,466

4,816,901

 

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