Confidential treatment is being requested for bracketed material which has been
separately filed with the Commission.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Security Exchange Act of 1934
Date of Report (Date of earliest event reported) December 18, 1996
------------
METROLOGIC INSTRUMENTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-24172 22-1866172
(State of other jurisdiction of (Commission File (IRS Employer
incorporated organization) Number) identification No.)
90 Coles Road
Blackwood, New Jersey 08012
(address of principal executive offices)
Registrant's telephone number, including area code: (609)228-8100
<PAGE>
Confidential treatment is being requested for bracketed material which has been
separately filed with the Commission.
Item 5. Other Events
Following negotiations which commenced in 1995, on December 18, 1996, Metrologic
Instruments, Inc. (the "Registrant") entered into a comprehensive cross-license
agreement (the "Agreement") with Symbol Technologies, Inc., a competitor of the
Registrant ("Symbol"). Under the terms of the Agreement, which is effective as
of January 1, 1996, the Registrant is granted a royalty-bearing license under
Symbol's laser scanning patents including rights to develop and market the
Registrant's next generation triggerless laser scanning bar code reader
products. Also pursuant to the Agreement, the Registrant granted Symbol the
option to acquire royalty-bearing licenses under a broad range of the
Registrant's patents and the option to purchase certain of the Registrant's
products under Symbol's private label. The term of the Agreement is the longer
of 17 years or the last of the patents to expire unless terminated by either
party after 5 years upon 90 days notice.
With the exception of certain specific amendments, the Agreement does not affect
the Agreement of Settlement between the Registrant and Symbol dated December 3,
1993, and the consent decrees entered into by the Registrant terminating the
civil actions set forth in the Agreement of Settlement remain in full force and
effect, all as described in the Registrant's periodic reports filed with the
Securities and Exchange Commission.
Item 7. Financial Statements and Exhibits
c. Exhibits
The following exhibits are filed herewith:
Agreement between Symbol Technologies, Inc. and
Metrologic Instruments, Inc. dated December 18, 1996
(portions of which are subject to an Application for
Confidential Treatment Pursuant to Rule 24b-2 filed under
separate cover).
<PAGE>
Confidential treatment is being requested for bracketed material which has been
separately filed with the Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METROLOGIC INSTRUMENTS, INC.
By:__C. Harry Knowles__
C. Harry Knowles
President and CEO
January 28, 1996
<PAGE>
Confidential treatment is being requested for bracketed material which has been
separately filed with the Commission.
EXHIBIT INDEX
Exhibit No.
10 Agreement between Symbol Technologies, Inc. and Metrologic Instruments, Inc.
dated December 18, 1996 (portions of which are subject to an Application for
Confidential Treatment Pursuant to Rule 24b-2 filed under separate cover).
Confidential treatment is being requested for bracketed material which has been
separately filed with the Commission.
EXHIBIT 10 AGREEMENT BETWEEN
SYMBOL TECHNOLOGIES, INC.
AND
METROLOGIC INSTRUMENTS, INC.
THIS AGREEMENT, effective as of January 1, 1996 between SYMBOL TECHNOLOGIES,
INC., a Delaware corporation, and its subsidiaries, ("SYMBOL") having its
principal place of business at One SYMBOL Plaza, Holtsville, New York
11742-1300, and METROLOGIC INSTRUMENTS, INC., a New Jersey corporation, and its
subsidiaries, ("METROLOGIC") having its principal place of business at Coles
Road at Route 42, Blackwood, New Jersey 08012:
W I T N E S S E T H
WHEREAS, SYMBOL is, and has been engaged in the design, development, manufacture
and sale of laser scanner devices of various types and is the owner of various
patents, patent applications and patent rights related to bar code scanners;
WHEREAS, METROLOGIC is, and has been engaged in the design, development,
manufacture and sale of laser scanner devices of various types and is the owner
of various patents, patent applications and patent rights related to bar code
scanners;
WHEREAS, in connection with certain patent litigation the Parties entered into
an Agreement for Settlement dated December 3, 1993;
WHEREAS, METROLOGIC is desirous of using inventions disclosed in various U.S.
and foreign patents of SYMBOL in METROLOGIC's present and future products, and
wishes the assurance of continued and complete access to such patents to be able
to make and sell METROLOGIC products currently in commercial production, and to
improve and modify such products (including making cost reduction and de minimus
changes and variations) in the near future in such products;
WHEREAS, SYMBOL is desirous of having the option to obtain a predefined, limited
number of licenses under METROLOGIC's patents for use in SYMBOL's present and
future products, including the ability to improve and modify such products
(including making cost and de minimus changes and variations) in the future
including such METROLOGIC patents as those in the METROLOGIC Activated-Decoder
Patent Family, Consecutive-Read Patent Family, Dual-Decode Patent Family,
Dual-Field Patent Family, Dual-Range Patent Family, Flicker-Frequency Patent
Family, One-Way RF Patent Family, Narrow Scan-Volume Patent Family,
Spatially-Separated Spectral-Filtering Patent Family, Miscellaneous Patent
Family, and Universal Digitizer Patent Family, but not including the Holographic
Patent Family;
WHEREAS, METROLOGIC and SYMBOL have been holding discussions and now both desire
to enter into modification of certain financial provisions of the Agreement of
Settlement, and into a new, comprehensive agreement providing for the
cross-license of certain patents and for the supply of certain standard and
custom METROLOGIC products to SYMBOL;
WHEREAS, SYMBOL does not currently resell any products manufactured by
METROLOGIC, but SYMBOL and METROLOGIC recognize that METROLOGIC manufactures
certain bar code reader products for which SYMBOL does not manufacture a
competitively close substitute;
WHEREAS, METROLOGIC's desire to sell such bar code reader products to SYMBOL for
resale by SYMBOL under SYMBOL's own trademarks, is based upon SYMBOL's and
METROLOGIC's common belief that making such sales to SYMBOL will increase
METROLOGIC's sales, and that SYMBOL's resale of those products should not take a
significant amount of sales away from other resellers of METROLOGIC products in
view of the different customer bases presently served by SYMBOL and other
resellers of METROLOGIC products;
NOW, THEREFORE, in consideration of the premises, SYMBOL and METROLOGIC hereby
agree as follows:
<PAGE>
ARTICLE 1 DEFINITIONS
1.1 "Additional METROLOGIC Patent Family" shall mean a Class B
Family or Class C Family.
1.2 "Affiliate" shall mean a corporation, company or other
entity which is substantially controlled, directly or
indirectly, through stock ownership or otherwise (such as
partnerships or management contracts), by a Party hereto or
which is directly or indirectly under common control with
such Party, including control derived by means other than
ownership of a majority of the voting securities or voting
rights. An Affiliate shall not include a wholly owned
Subsidiary of a Party.
1.3 "Annual Shortfall" shall mean the difference between (i) the
Minimum Purchase Commitment in a calendar year to purchase
METROLOGIC Qualifying Product pursuant to Section 11.1.6, and
(ii) the actual number of units of METROLOGIC Qualifying
Products ordered by SYMBOL during such calendar year, or
prorated in that calendar year pursuant to Section 11.6.2.
1.4 "Asian Territory" shall mean the countries listed in Exhibit A.
1.5 "Authorized Application" shall mean the use of a Royalty
Bearing METROLOGIC Product (as defined by corresponding
specific product categories (i) through (vi) respectively in
Section 1.83), in the specific field of use under which such
products are covered by the license with respect to such
product granted in Article 3, and on which METROLOGIC has paid
all applicable royalties pertaining to such product category
or categories and field of use.
1.6 "Change in Control" (of METROLOGIC) shall mean a change in
control of the nature that would be required to be reported
under the Securities Exchange Act of 1934, as amended (the
"1934 Act") (or any corresponding or succeeding law), provided
that, without limitation, such change in control shall be
deemed to have occurred if:
(a) Any Person (as hereinafter defined) (except one or more
elected officers or directors of METROLOGIC as of the
Effective Date or a Person controlled by them) (i) is or
becomes the beneficial owner (within the meaning of Rule
13d-3 promulgated under the 1934 Act, directly or indirectly
of thirty percent (30%) or more of the combined voting power
of METROLOGIC's then outstanding voting securities generally
entitled to vote in the election of directors, or (ii)
acquires actual control of the operations of METROLOGIC,
whether by means of contract or otherwise; or
(b) The individuals who, as of the date hereof are members of
the board of directors of METROLOGIC (the "Incumbent
Board"), cease for any reason to constitute at least a
majority of the board of directors of METROLOGIC; provided,
however, that if the election or nomination for election by
METROLOGIC's stockholders, of any new director was approved
by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of this Agreement, be
considered as a member of the Incumbent Board; or
<PAGE>
(c) The occurrence of (i) a merger or consolidation involving
METROLOGIC if the stockholders of METROLOGIC, immediately
before such merger or consolidation do not, as a result of
such merger or consolidation, own, directly or indirectly,
more than sixty percent (60%) of the combined voting power
of the then outstanding voting securities, generally
entitled to vote in the election of directors, of the
corporation surviving or resulting from such merger or
consolidation in substantially the same proportion as their
ownership of the combined voting power of such voting
securities of METROLOGIC outstanding immediately before such
merger or consolidation, or (ii) the sale or other
disposition of all or substantially all of the assets of
METROLOGIC to any Person, (except one or more elected
officers or directors of METROLOGIC as of the Effective Date
(as hereinafter defined) or a person controlled by them) or
(iii) the sale or other disposition of METROLOGIC's
hand-held laser scanner business to any Person (except one
or more elected officers or directors of METROLOGIC as of
the Effective Date or a Person controlled by them).
For purposes of this Agreement, the term "Person" means a
natural person (other than Mr. C. Harry Knowles, his heirs,
members of his immediate family, legal representatives of his
estate or any charitable organization who may receive shares
of METROLOGIC from any of the foregoing persons by gift or
testamentary transfer).
1.7 "Change in Control" (of SYMBOL) shall mean a change in control
of the nature that would be required to be reported under the
Securities Exchange Act of 1934, as amended (the "1934 Act")
(or any corresponding or succeeding law), provided that,
without limitation, such change in control shall be deemed to
have occurred if:
(a) Any Person (as hereinafter defined) (except one or more
elected officers or directors of SYMBOL as of the Effective
Date or a Person controlled by them) (i) is or becomes the
beneficial owner (within the meaning of Rule 13d-3
promulgated under the 1934 Act, directly or indirectly of
thirty percent (30%) or more of the combined voting power of
SYMBOL's then outstanding voting securities generally
entitled to vote in the election of directors, or (ii)
acquires actual control of the operations of SYMBOL, whether
by means of contract or otherwise; or
(b) The individuals who, as of the date hereof are members of
the board of directors of SYMBOL (the "Incumbent Board"),
cease for any reason to constitute at least a majority of
the board of directors of SYMBOL; provided, however, that if
the election or nomination for election by SYMBOL's
stockholders, of any new director was approved by a vote of
at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Agreement, be
considered as a member of the Incumbent Board; or
<PAGE>
(c) The occurrence of (i) a merger or consolidation involving
SYMBOL if the stockholders of SYMBOL, immediately before
such merger or consolidation do not, as a result of such
merger or consolidation, own, directly or indirectly, more
than sixty percent (60%) of the combined voting power of the
then outstanding voting securities, generally entitled to
vote in the election of directors, of the corporation
surviving or resulting from such merger or consolidation in
substantially the same proportion as their ownership of the
combined voting power of such voting securities of SYMBOL
outstanding immediately before such merger or consolidation,
or (ii) the sale or other disposition of all or
substantially all of the assets of SYMBOL to any Person,
(except one or more elected officers or directors of SYMBOL
as of the Effective Date (as hereinafter defined) or a
person controlled by them) or (iii) the sale or other
disposition of SYMBOL's hand-held laser scanner business to
any Person (except one or more elected officers or directors
of SYMBOL as of the Effective Date or a Person controlled by
them).
1.8 "Class A Family" shall mean a METROLOGIC Predefined Patent
Family (as defined hereunder).
1.9 "Class B Family" shall mean
(i) a group of patents of METROLOGIC including patents
both in the U.S. and all foreign countries , each
having issued or having been granted after the
Execution Date, but excluding (A) all those patents
which now or hereafter are included within any
METROLOGIC Predefined Patent Family, and (B) all
those patents included in METROLOGIC Holographic
Patent Family, wherein:
(1) each patent in said group:
(a) has not issued from an
application which is a
continuation or divisional
application of any
METROLOGIC Predefined
Patent Family, or any
existing Additional
METROLOGIC Patent Family
not containing as a member
a patent issued from said
application; or
(b) has not issued from (x) an
application containing one
or more claims to an
invention to which a claim
to priority of the filing
date of an earlier filed
application of METROLOGIC
has been made and to which
such patent is entitled, or
(y) from an application
containing one or more
claims which would have
otherwise been entitled to
the benefit of such filing
date had priority under 35
USC 120, or its equivalent,
been claimed (the "Earlier
Filed Application")and from
such Earlier Filed
Application a patent has
issued to METROLOGIC and
such issued patent is
included in a METROLOGIC
Predefined Patent Family,
or existing Class B or
Class C Family (not
including as a member a
patent issuing from said
application); and
<PAGE>
(2) each patent in said group includes one
or more claims dominated by the same
Inventive Concept as set forth at the time
of creation of such Class B Family and
wherein said one or more claims are not
dominated by any claim in any patent in any
Class A or Class C Family or any other Class
B Family ; and
(ii) any U.S. patent issuing to METROLOGIC from a
continuation or divisional application of any patent in
said group of patents defined in Section 1.1 (i) above.
(1) in which a Terminal Disclaimer has been
filed in order to overcome a double-patenting
rejection based upon one or more claims
contained in any patent in the group of
patents in Section 1.1 (i) above; or
(2) which contains method claims which correspond to
substantially similar apparatus claims in a
METROLOGIC Patent having the same, or being entitled
to the same priority date; or
(3) which contains apparatus claims which correspond
to substantially similar method claims in a
METROLOGIC Patent being entitled to the same priority
date,
(iii) any patent issued to METROLOGIC after the Execution
Date in which all claims thereof are dominated by any
claim in any of the patents in the groups defined in
(i) or (ii) above, (the term "dominated" is defined
hereunder, and
(iv) any re-examinations and reissues of any of the
patents defined in any of (i) (ii) or (iii) above,
wherein such Class B Family has been properly defined
and created pursuant to Article 4 hereunder.
1.10 "Class C Family" shall mean
(i) a group of patents of METROLOGIC including patents
both in the U.S. and all foreign countries , each
issuing or having been granted after the Execution
Date, but excluding (A) all those patents which now
or hereafter are included within any Class A or Class
B Family or any other Class C Family, and (B) all
those patents included in METROLOGIC Holographic
Patent Family, wherein each patent in said group
includes one or more claims dominated by the same
Inventive Concept (as defined hereunder) and wherein
each of such claims are not dominated by any claim in
any patent in any Class A or Class B Family or any
other Class C Family; and
(ii) (1) any U.S. patent issuing to METROLOGIC in which a
Terminal Disclaimer has been filed in order to
overcome a double-patenting rejection based on one or
more claims contained in any patent in said group of
patents defined in Section 1.1 (i) above; or
(2) which contains method claims which correspond to
substantially similar apparatus claims in a
METROLOGIC Patent being entitled to the same priority
date; or
(3) which contains apparatus claims which correspond
to substantially similar method claims in a
METROLOGIC Patent being entitled to the same priority
date, and
<PAGE>
(iii) any re-examinations and reissues of any of the
patents defined in any of (i) and (ii) above, wherein
such Family has been properly defined and created
pursuant to Article 4 hereunder.
1.11 "Class C Group" shall mean all Class C Patent Families
1.12 "Countable Class C Group" shall mean the Class C Group during
the period of time when both of the following conditions are
satisfied:
(i) the Class C Group is an Elected METROLOGIC
Patent Family; and
(ii) one or more patents in the family or
families of the Class C Group cover more
than one SYMBOL Product Family.
During the period of time when the Class C Group is not a
Countable Class C Group, it shall be deemed an Uncountable
Class C Group.
1.13 "Custom Interface Omnidirectional Hand-Held Scanner Product"
shall mean a triggerless omnidirectional hand-held bar code
symbol reading product designed, custom-manufactured (or have
manufactured) and sold by METROLOGIC to SYMBOL on special order
by SYMBOL, (e.g. a custom version of the METROLOGIC MS 6720)
wherein said Product comprises: a hand-held housing with a laser
scanning means disposed within the hand-held housing for
producing an omnidirectional laser scanning pattern for scanning
bar code symbols within a scan field defined external to said
hand-held housing; and a custom interface specified by SYMBOL;
and optionally a stand (e.g. the MS 6720 stand) for supporting
the scanner housing above a counter surface during bar code
symbol reading, and may include an RF Option (as defined
hereunder).
1.14 "Custom Interface RF Scanner Product" shall mean a triggerless
operated bar code symbol reading product designed,
custom-manufactured (or have manufactured) and sold by
METROLOGIC to SYMBOL on special order by SYMBOL, wherein said
Product comprises: a housing with a laser scanning means
disposed within the housing for producing a laser scanning
pattern for scanning bar code symbols within a scan field
defined external to said housing; and may include an RF
Option.
1.15 "Custom Interface ScanGlove Product" shall mean a triggerless bar
code symbol reading product designed, custom-manufactured (or
have manufactured) and sold by METROLOGIC to SYMBOL on special
order by SYMBOL (e.g. a custom version of the METROLOGIC IS
4200), wherein said Product comprises: a housing with a laser
scanning means disposed within the housing for producing a laser
scanning pattern for scanning bar code symbols within a scan
field defined external to said housing, the housing worn by and
supported on a glove worn by a user; and a custom interface
specified by SYMBOL; and may include an RF Option.
1.16 "Distributor" shall mean a Person not a Subsidiary or
Affiliate of METROLOGIC which is principally engaged in the
regular course of business in the resale of products without
substantial change in such products, such Person being a
bona-fide reseller selling products at least at a markup over
the Person's cost of such products, and not acting as a sales
agent or commissioned representative.
1.17 "Dominate" or "dominated" shall mean the following in the
circumstances in each respective case set forth below:
<PAGE>
Case (i) An invention defined by a claim of a first patent (e.g. Claim
A) is said to "dominate" the invention defined by a claim in a
second patent (e.g. Claim B) if each element in claim A has a
corresponding element in Claim B;
Case (ii) The inventive concept of a METROLOGIC Patent Family is said
to "dominate" the invention defined by a claim in a METROLOGIC
Patent (e.g. Claim C) if each element of the inventive concept
has a corresponding element in Claim C of the METROLOGIC Patent.
1.18 "Early Termination Date" shall mean the date after January 1,
2002 on which a Party hereto terminates this Agreement
pursuant to Section 15.9.
1.19 "Effective Date" shall mean January 1, 1996.
1.20 "Elected Licensable METROLOGIC Patent Family" shall mean a
Licensable METROLOGIC Patent Family (as defined hereunder)
that SYMBOL has elected under Section 4.3 hereunder and which
has not been terminated, and under which SYMBOL is current in
its royalty payments.
1.21 "Elected New METROLOGIC Product" shall mean a laser scanning bar
code reader product as represented by the Escrowed Specimen of
the METROLOGIC Product deposited pursuant to Section 12.1 which
is in the form of a finished product (e.g., ready for use "out of
the box" by the end user for reading bar codes or by the OEM for
producing an OEM Product) that includes: a housing; means in the
housing for producing a laser scanning pattern; a Scanner
Interface; and optionally including a stand for supporting said
reader product during bar code symbol reading applications, and
only Non-Infringing Modifications to such Escrowed Specimen,
provided that
(i) the external form factor (i.e., shape) of the housing
remains substantially the same as the Escrowed
Specimen, although the size of the housing may be
uniformly decreased so that the total volume of the
housing decreases by a maximum of thirty (30%)
percent;
(ii) the Scanner Interface either (w) remains substantially the same
compared to the Scanner Interface of the product represented by
the Escrowed Specimen; or (x) conforms to a standard interface
specification published by an independent standards organization
(e.g. IEEE, ANSI, etc.); or (y) conforms to a proprietary or
non-proprietary interface (e.g. OCIA, "Appletalk", etc.) of any
third party (including OEM manufacturers), but such Scanner
Interface shall not be (z) any SYMBOL interface that is
commercially introduced by SYMBOL in a SYMBOL product after the
Execution Date hereof, such SYMBOL product being sold to a
customer as a customized or proprietary SYMBOL interface and such
interface thereafter being reverse engineered or copied by
METROLOGIC without authorization;
(iii) the scan speed of the laser spot in the product does
not differ more than thirty (30%) percent from the
scan speed of said Escrowed Specimen,
(iv) the scan pattern is substantially the same as the scan
pattern of said Escrowed Specimen; and further provided
that (A) the product does not include a
hand-supportable housing and manually operated trigger
switch in or on the housing to initiate laser scanning;
and (B) the product does not include any one or more of
the following elements: (a) a display for displaying
information, or (b) keyboard, keypad, or function keys,
or the functional equivalent of (a) or (b) integrated
with the housing of the product.
1.22 "Escrow Agent" shall mean Sprung, Horn, Kramer & Wood, 120
White Plains Road, Tarrytown, New York 10591 ("SYMBOL's Escrow
Agent") or Hopgood, Calimafde, Kalil & Judlowe, 60 East 42nd
Street, New York, New York 10165 ("METROLOGIC's Escrow
Agent"), or any successor thereto appointed by such law firm.
<PAGE>
1.23 "Escrowed Specimen" shall mean an operational specimen of a METROLOGIC
product and/or the METROLOGIC product represented by the respective
Technical Data Package or "TDP" (as hereinafter defined) on deposit
with the law firm of Sprung, Horn, Kramer & Wood; or an operational
specimen of a SYMBOL product and/or the SYMBOL product represented by
the respective Technical Data Package on deposit with the law firm of
Hopgood, Calimafde, Kalil & Judlowe pursuant to Section 3.19 and/or
Section 12.1 hereunder, as the context requires. The Escrowed
Specimens of METROLOGIC products shall be representative of the
METROLOGIC product family designs as of the Execution Date when
deposited under Section 3.19, and as of the actual date of deposit
when deposited pursuant to Section 12.1. The Escrowed Specimens of the
SYMBOL products shall be representative both of the SYMBOL product
family designs as of (i) December 3, 1993 and (ii) January 1, 1996
(the Effective Date). All substantially similar product designs within
a product family shall be deemed to be covered by the corresponding
Escrowed Specimen.
1.24 "Execution Date" shall mean the date of execution of this
Agreement by the last of the Parties hereto.
1.25 "Field" shall mean one of the licensed fields of use of the
Licensed SYMBOL Patents as defined in Sections 1.26, 1.27,
1.28, 1.29, 1.30, 1.31, and 1.32..
1.26 "Field of Aperture-Stop Slot/Projection Scanner Product" shall
mean only uses of inventions covered by claims in the SYMBOL
Aperture Patents, and embodied in laser scanning bar code
readers that are (i) mounted or supported in a fixed or
stationary position when installed in the user's facility; and
(ii) which produce a multi-line or omnidirectional laser
scanning pattern.
1.27 "Field of Elected New METROLOGIC Product" shall mean only uses
of inventions covered by claims in the Licensed SYMBOL Patents,
and embodied in laser scanner bar code, provided that such
product: (a) is not a ring or other finger-mounted reader; (b)
does not include a manually actuated trigger to initiate laser
scanning, and (c) does not include any one or more of the
following: (i) display, or (ii) keyboard, keypad or function
keys or the functional equivalent of such elements defined in
(i) and (ii); (d) does not infringe any claim of any SYMBOL RF
Patents or SYMBOL Data Communication Patents; (e) does not
function to read coded indicia in which information is stored
in two dimensions, such as stacked bar code symbologies (such
as Code 49, PDF 417, and Supercode, etc.), matrix code
symbologies (such as Code One, DataMatrix, MaxiCode, VeriCode,
Glyph, Array Tag, etc.) and dot code symbologies (such as MMP,
Drexler code, etc.).
1.28 "Field of RF Scanner Product" shall mean only uses of
inventions covered by claims in the Licensed SYMBOL Patents,
and embodied in a system having a portable scanner and a
remote base unit, provided that the portable scanner unit is
also:
(i) a METROLOGIC ScanGlove Product, or
(ii) a METROLOGIC Omnidirectional Hand-Held Scanner
Product, or
(iii) a METROLOGIC Triggerless Single Scanline Hand-Held
Scanner Product.
1.29 "Field of ScanGlove Product" shall mean only uses of inventions
covered by claims in the Licensed SYMBOL Patents, and embodied in
laser scanner bar code readers that are worn by or supported by a
glove worn on a user's hand, provided that such product: (a) is not a
ring or other finger-mounted reader; (b) is not designed to be held in
the hand and used as a hand-held bar code reader, (c) does not include
a manually actuated trigger to initiate laser scanning, and (d) does
not include any one or more of the following: (i) display, or (ii)
keyboard, keypad or function keys or the functional equivalent of such
elements defined in (i) and (ii).
1.30 "Field of ScanKey Product" shall mean only uses of inventions
covered by claims in the Licensed SYMBOL Patents, and embodied
in a laser scanning bar code reader designed to be worn by and
supported by the back of a user's hand or wrist but not finger
mounted.
<PAGE>
1.31 "Field of Triggerless Omnidirectional Hand-Held Scanner
Product" shall mean only uses of inventions covered by
claims in the Licensed SYMBOL Patents, and embodied in laser
scanning bar code readers which produce a multi-line,
omnidirectional laser scan pattern, and has a housing
designed to be held in the hand of the user while reading
bar code symbols, and which includes means in the housing to
initiate laser scanning without use of a manually operable
"trigger" switch.
1.32 "Field of Triggerless Single Scanline Hand-Held Scanner" shall
mean only uses of inventions covered by claims in the Licensed
SYMBOL Patents, and embodied in a laser scanning bar code
reader having a housing designed to be held in the hand of the
user while reading bar code symbol, and which includes means
within the housing to initiate laser scanner without a
manually operable "trigger" switch.
1.33 "Field of 2-D Bar Code Scanner" shall mean using a bar code
symbol reader to read coded indicia in which information is
stored in two dimensions, such as stacked bar code symbologies
(such as Code 49, PDF 417, and Supercode, etc.), matrix code
symbologies (such as Code One, DataMatrix, MaxiCode, VeriCode,
Glyph, Array Tag, etc.) and dot code symbologies (such as MMP,
Drexler code, etc.).
1.34 "First SYMBOL Purchase Order" shall mean the first purchase
order released by SYMBOL to METROLOGIC requesting the
purchase of a specified number of Custom Interface
Omnidirectional Scanner Product to be shipped (i.e.
delivered) to SYMBOL by a specified delivery (i.e. shipping)
date.
1.35 "Good Standing" shall mean an attribute of a licensee of a
SYMBOL patent (not including METROLOGIC) under an express
written license agreement (the
"License") with SYMBOL at a specific time when (i) the License
is then currently in force and has not expired or terminated;
or (ii) SYMBOL has not provided formal written notification of
a material breach or default of the licensee and such breach
or default has not been timely cured; or (iii) SYMBOL is not
then in litigation or other formal dispute resolution process
(i.e. arbitration) with such licensee which may reasonably
result in a finding that the licensee has breached its license
agreement or otherwise would not have the benefit of its
license agreement with respect to a product at issue.
1.36 "Incremental Material Cost" shall mean the difference between
(i) the cost of all materials used to make a Standard
METROLOGIC Product, e.g. a MS 6720 , and (ii) the cost of all
materials used to make a Modified Qualified METROLOGIC Product
or Modified Elected New METROLOGIC Product. Such cost shall
reflect only the actual cost of purchased materials, and not a
cost-accounting concept of "cost" that could include the cost
of scrap, rework, overhead, or other factors.
1.37 "Infringing Modification" (to a product of METROLOGIC) shall
mean an improvement, change or modification made by
METROLOGIC subsequent to the Execution Date of this
Agreement to a product of METROLOGIC represented by an
Escrowed Specimen deposited pursuant to Section 3.19,
wherein such improvement, change or modification results in
the infringement of one or more claims of one or more
unexpired SYMBOL patents, and said Escrowed Specimen
deposited pursuant to Section 3.19 does not infringe said
one or more claims of at least one or more unexpired SYMBOL
patents. Any improvement, change or modification made by
METROLOGIC that is not an Infringing Modification (to a
product of METROLOGIC) shall be deemed to be a
Non-Infringing Modification (to a product of METROLOGIC).
1.38 "Infringing Modification" (to a product of SYMBOL) shall mean an
improvement, change or modification made by SYMBOL subsequent to
December 3, 1993 to a product of SYMBOL represented by an
Escrowed Specimen deposited pursuant to Section 4.9, wherein such
improvement, change or modification results in the infringement
of one or more claims of one or more unexpired METROLOGIC patents
and said Escrowed Specimen deposited pursuant to Section 4.9 does
not infringe said one or more claims of at least one or more
unexpired METROLOGIC patents. Any improvement, change or
modification made by SYMBOL that is not an Infringing
Modification (to a product of SYMBOL) shall be deemed to be a
Non-Infringing Modification (to a product of SYMBOL).
<PAGE>
1.39 "Inventive Concept" shall mean a generic description of a
invention for a METROLOGIC Patent Family as set forth either in
(i) Section 1.46, 1.48, 1.49, 1.50, 1.51, 1.52, 1.58, 1.61,1.71
and 1.75; or (ii) as defined pursuant to the procedures set forth
in Section 4.8 within one hundred eighty (180) days after the
date of issuance of a new U.S. patent to METROLOGIC, unless
earlier requested by SYMBOL, in which event METROLOGIC shall
respond to SYMBOL's request within sixty (60) days of the date of
issuance of such patent to METROLOGIC, or thirty (30) days after
the date of SYMBOL's request, whichever is later.
1.40 "Licensable METROLOGIC Patent Family" shall mean:
(i) any family in the Class A Families; or
(ii) any family in the Class B Families; or
(iii) the Class C Group.
1.41 "Licensed METROLOGIC Product" shall mean any (i) Royalty
Bearing METROLOGIC Products (as defined hereunder) and any
(ii) METROLOGIC Triggerless Omnidirectional Hand-Held Scanner
Products.
1.42 "Licensed SYMBOL Patent" shall mean: all U.S. patents of SYMBOL
as of the Execution Date containing claims to an invention
pertaining to or used in laser scanning bar code readers; any
future U.S. patents of SYMBOL issuing from a patent application
filed by SYMBOL containing claims to an invention which (i)
pertain to or are used in laser scanning bar code symbol readers
or scanners, and (ii) are entitled to a date of conception prior
to the Effective Date; any reissues and reexaminations of any of
the above patents of SYMBOL; and any counterpart foreign patent
applications and patents of SYMBOL heretofore or hereafter filed
and granted corresponding to any of the patents and applications
above of SYMBOL, in any and all countries except Japan.
1.43 "Licensed Extended SYMBOL Patent" shall mean: all U.S. patents of
SYMBOL as of the date of deposit of the Escrowed Specimen of the
Elected New METROLOGIC Product containing claims to an invention
pertaining to or used in laser scanning bar code readers; any
reissues and reexaminations of any of the above patents of
SYMBOL; and any counterpart foreign patent applications and
patents of SYMBOL heretofore or hereafter filed and granted
corresponding to any of the patents and applications above of
SYMBOL, in any and all countries except Japan.
1.44 "Licensed SYMBOL Product" shall mean a product of SYMBOL
covered by a claim in at least one METROLOGIC patent in a
METROLOGIC Patent Family which SYMBOL has elected to license
from METROLOGIC.
1.45 "METROLOGIC" shall mean METROLOGIC INSTRUMENTS, INC., and its
Subsidiaries, and any Successor thereto.
<PAGE>
1.46 "METROLOGIC Activated-Decoder Patent Family" shall mean
(i) all present and future U.S. patents of METROLOGIC,
including having one or more claims dominated by the
Inventive Concept of a bar code symbol reader which
comprises: a housing; means disposed in said housing
for scanning a bar code symbol on an object in at
least a portion of a scan field definable external to
said housing, in response to the detection of said
object; laser light detecting means for detecting the
intensity of laser
light reflected off said scanned bar code symbol, and
automatically producing scan data indicative of said
detected intensity; a bar code symbol detection
circuit for processing produced scan data so as to
detect said bar code symbol on said object, and
automatically generate an activation signal in
response to the detection of said bar code symbol; a
programmed processor for processing produced scan
data, when activated, so as to decode said detected
bar code symbol, and automatically produce symbol
character data representative of said decoded bar
code symbol; and activation means for automatically
activating said programmed processor in response to
the generation of said activation signal produced
from said bar code symbol detection circuit; (i.e.
the foregoing defines the Inventive Concept of each
Patent Family)
(ii) U. S. Patent No. 5,424,525 and any reissues and
reexaminations thereof;
(iii) any U.S. patent issuing to METROLOGIC in which a
terminal disclaimer has been filed in order to
overcome a double-patenting rejection based on
one or more claims contained in any US patent
defined in (i) or (ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains
method claims corresponding to substantially similar
apparatus claims in a "METROLOGIC Patent defined in
(i), (ii), or (iii) above being entitled to the same
priority date,;
(v) any U.S. patent issuing to METROLOGIC which contains
apparatus claims corresponding to substantially
similar method claims in a METROLOGIC Patent defined
in (i), (ii), (iii), or (iv) above being entitled
to the same priority date;
(vi) any METROLOGIC patent in which all claims thereof
are dominated by any of the claims of any patent in
(i), (ii), (iii), (iv), or (v) above;
(vii) any reissues and reexaminations of any of the
foregoing patents; and METROLOGIC Patent defined in
(i), (ii), (iii), (iv), (v), or (vi) above;
(viii) any foreign counterpart patents of any of the patents
in (i), (ii), (iii), (iv), (v), (vi) or (vii) above.
1.47 "METROLOGIC Aperture-Stop Slot/Projection Scanner Product" shall
mean a bar code symbol reader product as represented by an
Escrowed Specimen thereof that is a finished end-user product and
includes: (i) a housing which is designed for mounting or being
supported in a fixed or stationary position when installed in the
user's facility, and not designed or sold to be held in the hand
while performing bar code symbol reading; (ii) includes laser
scanning means in the housing for producing a multi-line or
omnidirectional laser scan pattern; and (iii) wherein the
scanning product, or its method of manufacture or use is covered
by any claim in any SYMBOL Aperture Patent.
<PAGE>
1.48 "METROLOGIC Consecutive-Read Patent Family" shall mean
(i) all present and future U.S. patents of METROLOGIC having one or
more claims dominated by the Inventive Concept of a bar code
symbol reader which comprises: a hand-supportable housing; scan
data producing means disposed in said hand-supportable housing
for producing a laser scanning pattern for automatically scanning
a bar code symbol on an object located in at least a portion of a
scan field definable external to said hand- supportable housing,
automatically detecting the intensity of laser light reflected
off said bar code symbol, and automatically producing scan data
indicative of said detected intensity; and scan data processing
means for processing produced scan data so as to detect and
decode said detected bar code symbol, and automatically produce
symbol character data representative of said decoded bar code
symbol, and for decoding said decoded bar code symbol once again
and produce symbol character data representative thereof, upon
automatically detecting the momentary absence of the decoded bar
code symbol from the scan field (i.e. the foregoing defines the
Inventive Concept of such patent family);
(ii) U. S. Patent No. 5,260,553;
(iii)any U.S. patent issuing to METROLOGIC in which a terminal
disclaimer has been filed in order to overcome a double-patenting
rejection based on one or more claims contained in any US patent
defined in (i) or (ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains method
claims corresponding to substantially similar apparatus claims in
a "METROLOGIC Patent defined in (i), (ii), or (iii) above being
entitled to the same priority date;
(v) any U.S. patent issuing to METROLOGIC which contains apparatus
claims corresponding to substantially similar method claims in a
METROLOGIC Patent defined in (i), (ii), (iii), or (iv) above
being entitled to the same priority date;
(vi) any METROLOGIC patent in which all claims thereof are dominated
by any of the claims of any patent in (i), (ii), (iii), (iv), or
(v) above;
(vii)any reissues and reexaminations of any of the foregoing patents;
and METROLOGIC Patent defined in (i), (ii), (iii), (iv), (v), or
(vi) above;
(viii) any foreign counterpart patents of any of the patents in (i),
(ii), (iii), (iv), (v), (vi) or (vii) above.
1.49 "METROLOGIC Dual-Decode Patent Family" shall mean:
(i) all present and future U.S. patents of METROLOGIC having one or
more claims dominated by the Inventive Concept of a digital
signal processing device for decoding a plurality of digital data
signals produced as output from a plurality of scanning devices,
wherein said digital signal processing device comprises: a
plurality of data input ports, each said data input port being
operably connectable to one said scanning device, for supplying a
digital data signal therefrom to one said data input port; signal
processing means for processing the digital data signal supplied
to any one of said plurality of data input ports, and producing
digital data related to the supplied digital signal; data
processing means for processing said digital data produced from
the supplied digital signal, and producing decoded symbol data
representative of the code symbol being scanned by said scanning
device producing the supplied digital signal; and a data output
port for providing the decoded symbol data to a host device
operably connectable to said data output port (i.e. the foregoing
defines the Inventive Concept of such patent family);
(ii) U.S. Patent No. 5,343,027;
<PAGE>
(iii)any U.S. patent issuing to METROLOGIC in which a terminal
disclaimer has been filed in order to overcome a double-patenting
rejection based on one or more claims contained in any US patent
defined in (i) or (ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains method
claims corresponding to substantially similar apparatus claims in
a "METROLOGIC Patent defined in (i), (ii), or (iii) above being
entitled to the same priority date;
(v) any U.S. patent issuing to METROLOGIC which contains apparatus
claims corresponding to substantially similar method claims in a
METROLOGIC Patent defined in (i), (ii), (iii), or (iv) above
being entitled to the same priority date;
(vi) any METROLOGIC patent in which all claims thereof are dominated
by any of the claims of any patent in (i), (ii), (iii), (iv), or
(v) above;
(vii)any reissues and reexaminations of any of the foregoing patents;
and METROLOGIC Patent defined in (i), (ii), (iii), (iv), (v), or
(vi) above;
(viii) any foreign counterpart patents of any of the patents in (i),
(ii), (iii), (iv), (v), (vi) or (vii) above.
1.50 "METROLOGIC Dual-Field Patent Family" shall mean:
(i) all present and future U.S. patents having one or more claims
dominated by the Inventive Concept of a bar code symbol reader
which comprises: a housing; means disposed within said housing
for producing a visible laser beam and scanning said visible
laser beam so as to produce a laser scanning pattern, for
scanning a bar code symbol on an object located within at least a
portion of a scan field definable external to said housing; and
means disposed within said housing for automatically detecting
the object within an object detection field spatially
encompassing at least a portion of said scan field along the
operative scanning range of said laser scanning bar code symbol
reader; and automatically initiating laser scanning of the bar
code symbol (i.e. the foregoing defines the Inventive Concept of
such patent family) ;
(ii) U. S. Patent No. 5,468,951;
(iii)any U.S. patent issuing to METROLOGIC in which a terminal
disclaimer has been filed in order to overcome a double-patenting
rejection based on one or more claims contained in any US patent
defined in (i) or (ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains method
claims corresponding to substantially similar apparatus claims in
a "METROLOGIC Patent defined in (i), (ii), or (iii) above being
entitled to the same priority date;
(v) any U.S. patent issuing to METROLOGIC which contains apparatus
claims corresponding to substantially similar method claims in a
METROLOGIC Patent defined in (i), (ii), (iii), or (iv) above
being entitled to the same priority date;
(vi) any METROLOGIC patent in which all claims thereof are dominated
by any of the claims of any patent in (i), (ii), (iii), (iv), or
(v) above;
(vii)any reissues and reexaminations of any of the foregoing patents;
and METROLOGIC Patent defined in (i), (ii), (iii), (iv), (v), or
(vi) above;
(viii) any foreign counterpart patents of any of the patents
in (i), (ii), (iii), (iv), (v), (vi) or (vii) above.
<PAGE>
1.51 "METROLOGIC Dual-Range Patent Family" shall mean
(i) all present and future U.S. patents of METROLOGIC
having one or more claims dominated by the Inventive
Concept of a bar code symbol reader which comprises:
first and second modes of operation; a housing; means
disposed within said housing for producing a visible
laser beam and scanning said visible laser beam so as
to produce a laser scanning pattern for scanning a bar
code symbol on an object located within at least a
portion of a scan field definable external to said
housing; means for selecting either the first or second
mode of operation; and means disposed within said
housing for automatically reading a bar code symbol
located within a first portion of said scan field when
said first mode of operation is selected, and for
automatically reading a bar code symbol located within
a second portion of said scan field when said second
mode of operation is selected (i.e. the foregoing
defines the Inventive Concept of such patent family) ;
(ii) U.S. Patent No. 5,340,971;
(iii) any U.S. patent issuing to METROLOGIC in which a
terminal disclaimer has been filed in order to overcome
a double-patenting rejection based on one or more
claims contained in any US patent defined in (i) or
(ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains
method claims corresponding to substantially similar
apparatus claims in a "METROLOGIC Patent defined in
(i), (ii), or (iii) above being entitled to the same
priority date;
(v) any U.S. patent issuing to METROLOGIC which contains
apparatus claims corresponding to substantially similar
method claims in a METROLOGIC Patent defined in (i),
(ii), (iii), or (iv) above being entitled to the same
priority date;
(vi) any METROLOGIC patent in which all claims thereof are
dominated by any of the claims of any patent in (i),
(ii), (iii), (iv), or (v) above;
(vii) any reissues and reexaminations of any of the
foregoing patents; and METROLOGIC Patent defined in
(i), (ii), (iii), (iv), (v), or (vi) above;
(viii) any foreign counterpart patents of any of the patents
in (i), (ii), (iii), (iv), (v), (vi) or (vii) above.
1.52 "METROLOGIC Flicker-Frequency Patent Family" shall mean
(i) all present and future U.S. patents of METROLOGIC
having one or more claims dominated by the Inventive
Concept of a bar code symbol reader which comprises: a
bar code symbol detection mode of operation; a
hand-supportable housing; means disposed within said
hand-supportable housing for producing a visible laser
beam and scanning said visible laser beam so as to
produce a laser scanning pattern for scanning a bar
code symbol on an object located within at least a
portion of a scan field definable external to said
hand-supportable housing; and means for flickering said
visible laser beam within said scan field during said
bar code symbol detection mode, at a rate below the
critical flicker frequency of the human vision system
of the user (the foregoing defines the Inventive
Concept of such patent family);
<PAGE>
(ii) U. S. Patent No. 5,484,992;
(iii) any U.S. patent issuing to METROLOGIC in which a
terminal disclaimer has been filed in order to overcome
a double-patenting rejection based on one or more
claims contained in any US patent defined in (i) or
(ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains
method claims corresponding to substantially similar
apparatus claims in a "METROLOGIC Patent defined in
(i), (ii), or (iii) above being entitled to the same
priority date;
(v) any U.S. patent issuing to METROLOGIC which contains
apparatus claims corresponding to substantially similar
method claims in a METROLOGIC Patent defined in (i),
(ii), (iii), or (iv) above being entitled to the same
priority date;
(vi) any METROLOGIC patent in which all claims thereof are
dominated by any of the claims of any patent in (i),
(ii) ,or (iii) above;
(vii) any reissues and reexaminations of any of the
foregoing patents; and METROLOGIC Patent defined in
(i), (ii), (iii), (iv), (v), or (vi) above;
(viii) any foreign counterpart patents of any of the patents
in (i), (ii), (iii), (iv), (v), (vi) or (vii) above.
1.53 "METROLOGIC Holographic Patent Family" shall mean
(i) all present and future U.S. patents of METROLOGIC,
dominated by the Inventive Concept of a laser scanner
including one or more holograms or holographic
optical elements used for scanning a light beam and
producing a scanning pattern; and/or one or more
holograms or holographic optical elements for
producing a light beam and scanning such light beam
to provide a scanning pattern;
(ii) any Patent issuing from U.S. Patent Application
08/573,949 relating to holographic scanning;
(iii)any U.S. patent issuing to METROLOGIC in which a
terminal disclaimer has been filed in order to overcome
a double-patenting rejection based on one or more
claims contained in any US patent defined in (i) or
(ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains
method claims corresponding to substantially similar
apparatus claims in a "METROLOGIC Patent defined in
(i), (ii), or (iii) above being entitled to the same
priority date;
(v) any U.S. patent issuing to METROLOGIC which contains
apparatus claims corresponding to substantially similar
method claims in a METROLOGIC Patent defined in (i),
(ii), (iii), or (iv) above being entitled to the same
priority date;
(vi) any METROLOGIC patent in which all claims thereof are
dominated by any of the claims of any patent in (i),
(ii), (iii), (iv), or (v) above;
(vii) any reissues and reexaminations of any of the
foregoing patents; and METROLOGIC Patent defined in
(i), (ii), (iii), (iv), (v), or (vi) above;
(viii) any foreign counterpart patents of any of the patents
in (i), (ii), (iii), (iv), (v), (vi) or (vii) above.
<PAGE>
1.54 "METROLOGIC Holographic Scanner Product" shall mean bar
code reader product including METROLOGIC
Holotrak(TM)Products that includes one or more hologram
or holographic optical element (HOE) as a scanning
element, provided that (i) the product is not designed
or intended for use as a hand-held or body- mounted or
"wearable" product; (ii) the product does not include a
Scanner Interface which infringes any SYMBOL patent
relating to Scanner Interfaces; (iii) the product does
not infringe any claim of any SYMBOL RF Patent; (iv)
the product does not include a portable or hand-held
housing with a manually operated trigger switch to
initiate laser scanning; (v) the product does not
include a portable or hand-held housing provided with
any one or more of the following elements: (a) a
display for displaying information, or (b) keyboard,
keypad, or function keys, or the functional equivalent
of (a) or (b), and (vi) the product does not infringe
any claim to a SYMBOL patent directed to Two
Dimensional Bar Codes, unless otherwise mutually agreed
by the Parties.
1.55 "METROLOGIC Holotrak Product" shall mean the METROLOGIC
Holotrak(TM) Model IS 5700 , Holotrak Model IS 5800, and
related Models in the same family of products available on or
about the Execution Date of this Agreement, and any other
products identified by METROLOGIC from time to time during the
term of this Agreement.
1.56 "METROLOGIC Modified Licensed Product" or "MLP" shall
mean either: (i) a METROLOGIC Product that results from
a change, modification or improvement to the METROLOGIC
Triggerless Omnidirectional Hand-Held Scanner Product
commercially introduced in 1996, and represented by the
Escrowed Specimen thereof; or (ii) a METROLOGIC Product
that results from a change, modification, or
improvement made after the Execution Date of this
Agreement to a METROLOGIC Royalty Bearing Product as it
existed and was commercially sold or offered for sale
as of the Execution Date, as represented by the
Escrowed Specimen thereof, provided that the external
form factor (i.e., design, shape and dimensions) of the
housing remains substantially the same as that of the
Escrowed Specimen.
1.57 "METROLOGIC Miscellaneous Patent Family" shall mean
(i) the following METROLOGIC U.S. patents 5,473,464,
4,983,818, 4,962,980, 4,960,985, 4,958,894, 4,930,848,
4,805,175, 4,762,984, 4,713,532, 4,575,625, 4,050,037,
4,020,357, 5,019,714 and all foreign counterparts
thereto except for the counterpart foreign patents in
Europe corresponding to U.S. Patent No. 5,019,714, such
patents having been exclusively licensed to a third
party;
(ii) any continuations and divisionals of (i) above and
reissues and reexaminations of any of the foregoing
patents; and
(iii)any U.S. patent issuing to METROLOGIC in which a
terminal disclaimer has been filed in order to overcome
a double-patenting rejection based on one or more
claims contained in any US patent defined in (i) or
(ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains
method claims corresponding to substantially similar
apparatus claims in a "METROLOGIC Patent defined in
(i), (ii), or (iii) above;
<PAGE>
(v) any U.S. patent issuing to METROLOGIC which contains
apparatus claims corresponding to substantially similar
method claims in a METROLOGIC Patent defined in (i),
(ii), (iii), or (iv) above being entitled to the same
priority date;
(vi) any METROLOGIC patent in which all claims thereof are
dominated by any of the claims of any patent in (i),
(ii), (iii), (iv), or (v) above;
(vii) any reissues and reexaminations of any of the
foregoing patents; and METROLOGIC Patent defined in
(i), (ii), (iii), (iv), (v), or (vi) above;
(viii) any foreign counterpart patents of any of the patents
in (i), (ii), (iii), (iv),(v), (vi) or (vii) above;
and
(ix) any patent classified into such family pursuant to
Sections 4.7 and/or 4.9 hereunder.
1.58 "METROLOGIC Narrow Scan-Volume Patent Family" shall mean
(i) all present and future U.S. patents of METROLOGIC
having one or more claims dominated by the Inventive
Concept of a bar code symbol scanner which comprises:
a housing; and means disposed within said housing for
producing a highly collimated laser scanning pattern
within a narrowly confined 3-D scanning volume, for
omnidirectional scanning of a bar code symbol
presented to said highly collimated laser scanning
pattern (i.e. the foregoing defines the Inventive
Concept of such patent family);
(ii) U.S. Patent No. 5,216,232;
(iii) any U.S. patent issuing to METROLOGIC in which a
terminal disclaimer has been filed in order to
overcome a double-patenting rejection based on one
or more claims contained in any US patent defined
in (i) or (ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains
method claims corresponding to substantially similar
apparatus claims in a "METROLOGIC Patent defined in
(i), (ii), or (iii) above being entitled to the same
priority date;
(v) any U.S. patent issuing to METROLOGIC which contains
apparatus claims corresponding to substantially
similar method claims in a METROLOGIC Patent defined
in (i), (ii), (iii), or (iv) above being entitled
to the same priority date;
(vi) any METROLOGIC patent in which all claims thereof are
dominated by any of the claims of any patent in (i),
(ii), (iii), (iv), or (v) above;
(vii) any reissues and reexaminations of any of the
foregoing patents; and METROLOGIC Patent defined in
(i), (ii), (iii), (iv), (v), or (vi) above;
(viii) any foreign counterpart patents of any of the patents
in (i), (ii), (iii), (iv), (v), (vi) or (vii) above.
1.59 "METROLOGIC Omnidirectional Hand-Held Scanner Product" shall
mean Custom Interface Operated Omnidirectional Scanner Product
and METROLOGIC Triggerless Omnidirectional Hand-Held Scanner
Product.
1.60 "METROLOGIC One-Way RF Patent" shall mean any patent of
METROLOGIC having claim which expressly recites and is limited
to a bar code reader having either a radio frequency (RF)
transmitter or RF receiver, but not both, i.e., a bar code
reader unit which communicates only in a single direction and
not bi-directionally to and from a remote station.
<PAGE>
1.61 "METROLOGIC One-Way RF Patent Family" shall mean:
(i) all present and future U.S. patents of METROLOGIC having one
or more claims dominated by the Inventive Concept of a bar
code symbol reader and a remote base unit for use therewith,
wherein said bar code symbol reader comprises: a housing
designed for support within the hand or mounting upon the
body of a user during bar code symbol reading; a radio-
frequency (RF) transmitter disposed within said housing for
transmitting digital data to said remote base unit
positioned within the data transmission range of said laser
scanning bar code symbol reader, wherein said digital data
transmission is carried out by wireless electromagnetic-wave
transmission and said housing does not contain an RF
receiver; means disposed within said housing for producing a
laser scanning pattern for scanning a bar code symbol on an
object located within at least a portion of a scan field
definable external to said housing; and wherein said remote
base unit comprises: means disposed within said remote base
unit for receiving digital data transmitted from said laser
scanning bar code symbol reader; and means disposed within
said remote base unit for automatically producing an
acoustical acknowledgment signal perceptible by the user
within said data transmission range, to acknowledge the
reception of said transmitted data (i.e. the foregoing
defines the Inventive Concept of such patent family);
(ii) U. S. Patent Application Serial No. 08/292,237 now allowed;
(iii) any U.S. patent issuing to METROLOGIC in which a terminal
disclaimer has been filed in order to overcome a
double-patenting rejection based on one or more claims
contained in any US patent defined in (i) or (ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains method
claims corresponding to substantially similar apparatus
claims in a "METROLOGIC Patent defined in (i), (ii), or
(iii) above being entitled to the same priority date;
(v) any U.S. patent issuing to METROLOGIC which contains
apparatus claims corresponding to substantially similar
method claims in a METROLOGIC Patent defined in (i), (ii),
(iii), or (iv) above being entitled to the same priority
date;
(vi) any METROLOGIC patent in which all claims thereof are
dominated by any of the claims of any patent in (i), (ii),
(iii), (iv), or (v) above;
(vii) any reissues and reexaminations of any of the foregoing
patents; and METROLOGIC Patent defined in (i), (ii), (iii),
(iv), (v), or (vi) above;
(viii) any foreign counterpart patents of any of the patents in
(i), (ii), (iii), (iv), (v), (vi) or (vii) above.
1.62 "METROLOGIC Patent Family" shall mean any one family of the
set of families of METROLOGIC patents consisting of (i) the
METROLOGIC Predefined Patent Families (the Class A Families) ;
(ii) the METROLOGIC Holographic Patent Family; (iii) the Class
B Families, and (iv) the Class C Families, such that each and
every METROLOGIC patent is a member of one and only one
family, and all METROLOGIC Patent Families include all
METROLOGIC patents.
1.63 "METROLOGIC Predefined Patent Family" (also referred to as a
"Class A Family") shall mean any one or more of the following
patent families:
(i) METROLOGIC Narrow-Scan Volume Patent Family; or
(ii) METROLOGIC Dual-Range Patent Family; or
<PAGE>
(iii) METROLOGIC Dual-Decode Patent Family; or
(iv) METROLOGIC Flicker-Frequency Patent Family; or
(v) METROLOGIC Consecutive-Read Patent Family; or
(vi) METROLOGIC Activated-Decoder Patent Family; or
(vii) METROLOGIC Universal-Digitizer Patent Family; or
(viii) METROLOGIC Dual-Field Patent Family; or
(ix) METROLOGIC Spatially-Separated Spectral Filter Patent
Family; or
(x) METROLOGIC One-Way RF Patent Family; or
(xi) METROLOGIC Miscellaneous Patent Family.
1.64 "METROLOGIC Product" shall mean a bar code reading product
designed, developed, and manufactured (or have manufactured)
by METROLOGIC.
1.65 "METROLOGIC Qualifying Product" shall mean any one or more of
the following METROLOGIC products that are made by METROLOGIC
during the term of this Agreement:
(i) METROLOGIC Omnidirectional Triggerless Hand-Held Scanner
Products (with or without an RF Option);
(ii) METROLOGIC RF Scanner Products;
(iii) METROLOGIC ScanGlove Products (with or without an RF
Option);
(iv) Custom Interface Omnidirectional Hand-Held Scanner Products
(with or without an RF Option);
(v) Custom Interface RF Scanner Products; and
(vi) Custom Interface ScanGlove Products (with or without an RF
Option).
1.66 "METROLOGIC RF Scanner Product" shall mean a bar code reader
system (the "System") of METROLOGIC that is in the form of a
finished product which includes: (i) a finished portable
unit (the "Portable Unit") and a finished remote base unit
(the "Base Unit"), wherein the Portable Unit includes a
housing; and an RF Option in said housing for transmitting
and/or receiving data between the Portable Unit and the Base
Unit, and (ii) wherein the Base Unit includes a receiver or
transmitter or both for carrying out data transmission to or
data communication with said Portable Unit by way of
wireless or electromagnetic-wave transmission, without using
spread-spectrum modulation techniques; and wherein the
Portable Unit may optionally include manually-actuable means
mounted on said housing for manually resetting a power
control circuit within the Portable Unit for enabling
automatic detection of an object within at least a portion
of said scan field after the lapsing of a predetermined time
period, no less than one (1) minute, while conserving the
electrical power-consumption actuation provided that:
(a) the Portable Unit is either a METROLOGIC ScanGlove
Product; or a METROLOGIC Triggerless Single Scanline
Hand-Held Scanner Product; or a METROLOGIC
Omnidirectional Hand-Held Scanner Product; and
(b) the Portable Unit does not include either (i) a
display, or (ii) keyboard, keypad, or function keys
or their functional equivalent, (iii) nor is designed
to be integrated with or connected by a wire, cable
or electrical connector to a unit that includes a
display, keyboard, keypad, or function key or their
functional equivalent; and
<PAGE>
(c) the System does not infringe any SYMBOL Spectrum One
or Spectrum 24 two-way data communication protocols,
the specifications of which shall be in the form of
Technical Data Package and escrowed with METROLOGIC's
Escrow Agent.
1.67 "METROLOGIC Scan Engine Product" shall mean: (i) a
subassembly or module as represented by the Escrowed
Specimen thereof designed for sale to an OEM Customer for
the manufacture of an OEM Product including: (a) a laser
light source for producing a single linear scan line for
scanning a bar code symbol; and (b) a detector for receiving
reflected light from the symbol and for producing electrical
signals corresponding to data represented by such symbol;
and (iii) only Non-Infringing Modifications to said
subassembly or module, provided that (x) the overall size of
the subassembly or module is not less than 0.4 inches high,
by 1.3 inches wide, by 1.5 inches deep; (y) the laser
scanning pattern produced by the subassembly or module is
the same single linear scan line pattern; and (z) the
subassembly or module does not include a manually actuated
trigger to initiate laser scanning.
1.68 "METROLOGIC ScanGlove Product" shall mean a laser scanning bar
code reader of METROLOGIC that is in the form of a finished
product which is designed to be worn and supported on a glove
worn by a user, and is represented by:
(i) the Escrowed Specimen of the METROLOGIC ScanGlove
Product deposited pursuant to this Agreement (the
"Escrowed ScanGlove Product"), or
(ii) the immediate subsequent successor product to the
Escrowed ScanGlove Product introduced by METROLOGIC
(the "Next Generation ScanGlove Product or the
"NGSP"), provided that such NGSP is commercially
produced and sold within eighteen (18) months after
the Execution Date hereof and includes only
Non-Infringing Modifications to the Escrowed
ScanGlove Product; wherein such NGSP includes:
(a) a housing having exterior height-depth-width
dimensions not less than 0.65" x 1.55" x
1.75";
(b) a glove for mounting the housing upon a
user's hand or wrist so that the reader is
supported by and worn upon the back of the
hand or wrist of a user during bar code
symbol reading;
(c) laser scanning means disposed within said
housing for producing a single-scanline
laser scanning pattern for scanning a bar
code symbol on an object located within at
least a portion of a scan field definable
external to said housing;
(d) means disposed within said housing for
automatically initiating laser scanning of
the bar code symbol upon the automatic
detection of the object, without using a
manually actuable trigger;
(e) a Scanner Interface (as defined hereunder) to interface the
NGSP with one or more external peripheral units; and
<PAGE>
(f) any Non-Infringing Modifications to such NGSP, provided that
(1) no Infringing Modifications are made to such NGSP,
provided that (2) the form-factor of the glove of the NGSP
as represented by the Escrowed Specimen of the glove, and
the external form-factor (i.e., the size and shape of the
housing) each remain substantially the same as compared to
the Escrowed ScanGlove Product; (3) the Scanner Interface of
the NGSP either (x) remains substantially the same compared
to that in the scanner product represented by Escrowed
ScanGlove Product or (y) conforms to either (i) a standard
interface specification (e.g. RS-232) published by an
independent standards organization (e.g. IEEE, ANSI, etc.),
or (ii) a proprietary interface of METROLOGIC, or (iii) a
proprietary or non-proprietary interface (e.g. OCIA,
"Appletalk", etc.) of any third party (including OEM
manufacturers), but excluding (iv) any SYMBOL interface that
is commercially introduced by SYMBOL in a SYMBOL product
after the Execution Date hereof, such SYMBOL product being
sold to a customer as a customized or proprietary SYMBOL
interface and such interface thereafter being reverse
engineered or copied by METROLOGIC without authorization;
(4) the external laser scanning pattern produced by the NGSP
remains as a single scanline; and (5) the NGSP does not
include a manually actuated trigger to initiate laser
scanning.
1.69 "METROLOGIC ScanKey Product" shall mean the laser scanning
bar code reader product Model IS 4320 family of METROLOGIC
which includes: a housing designed to be worn by and
supported on the back of the user's hand or wrist; a keypad
and a display on the housing, as represented solely by the
Escrowed Specimen of the METROLOGIC ScanKey Product
deposited pursuant to this Agreement. Any changes,
modifications, or improvements to the product represented by
such Escrowed Specimen of the METROLOGIC ScanKey Product,
and any modified or improved product, shall not be within
the scope of this definition, and shall not be licensed
under this Agreement.
1.70 "METROLOGIC Scanner Product License" shall mean any license
granted to METROLOGIC by SYMBOL under Article 3 of this
Agreement.
1.71 "METROLOGIC Spatially-Separated Spectral-Filtering Patent
Family" shall mean:
<PAGE>
(i) all present and future U.S. patents of METROLOGIC having one
or more claims dominated by the Inventive Concept of a laser
code symbol scanning system, which comprises: a housing
having a light transmission aperture through which visible
light can exit and enter said housing; a first optical
filter element installed over said light transmission
aperture, and having wavelength-selective filtering
characteristics in the visible band for preventing light
having wavelengths slightly below a predetermined wavelength
in said visible band from passing from the outside of said
housing, through said light transmission aperture, and into
said housing; and a scan data producing means disposed in
said housing, for producing scan data indicative of the
intensity of laser light reflected off a code symbol on an
object located within at least a portion of a scan field
definable external to said housing, said scan data producing
means including a laser beam producing means for producing a
visible laser beam characterized by said predetermined
wavelength, a laser beam scanning means for projecting said
visible laser beam through said scanning window and scanning
said visible laser beam across said scan field and said code
symbol, a laser light focusing means for focusing along a
laser light return path, light reflected off said code
symbol and passing through said light transmission window,
and a laser light detecting means for detecting the
intensity of laser light reflected off said code symbol and
focused by said laser light focusing means, and
automatically producing scan data indicative of the detected
light intensity; a second optical filter element, spatially
separated from said first optical filter element and
disposed along said laser light return path, said second
optical filter element having wavelength- selective
filtering characteristics in said visible band and
co-operating with said first optical filter element so as to
form a band-pass optical filtering system having a narrow
wavelength bandwidth positioned about said predetermined
wavelength, and passing only laser light having wavelengths
within said narrow wavelength bandwidth and reflected off
said code symbol; and a scan data processing means for
processing produced scan data so as to decode said scanned
code symbol and produce symbol character data representative
of the decoded symbol (i.e. the foregoing defines the
Inventive Concept of such patent family).
(ii) any patents issuing from Serial No. 08/342,761, and
(iii) any U.S. patent issuing to METROLOGIC in which a terminal
disclaimer has been filed in order to overcome a
double-patenting rejection based on one or more claims
contained in any US patent defined in (i) or (ii) above;
(iv) any U.S. patent issuing to METROLOGIC which contains method
claims corresponding to substantially similar apparatus
claims in a "METROLOGIC Patent defined in (i), (ii), or
(iii) above being entitled to the same priority date;
(v) any U.S. patent issuing to METROLOGIC which contains
apparatus claims corresponding to substantially similar
method claims in a METROLOGIC Patent defined in (i), (ii),
(iii), or (iv) above being entitled to the same priority
date;
(vi) any METROLOGIC patent in which all claims thereof are
dominated by any of the claims of any patent in (i), (ii),
(iii), (iv), or (v) above;
(vii) any reissues and reexaminations of any of the foregoing
patents; and METROLOGIC Patent defined in (i), (ii), (iii),
(iv), (v), or (vi) above;
(viii) any foreign counterpart patents of any of the patents
in (i), (ii), (iii), (iv), (v), (vi) or (vii) above.
1.72 "METROLOGIC Standard Product" shall mean any METROLOGIC bar
code reading product except METROLOGIC Holographic Scanner
Products that is commercially available for sale.
<PAGE>
1.73 "METROLOGIC Triggerless Omnidirectional Hand-Held Scanner
Product" shall mean a laser scanning bar code reader as
represented by the Escrowed Specimen of the METROLOGIC
Triggerless Omnidirectional Hand-Held Scanner Product
deposited hereto which is in the form of a finished product
(e.g., ready for use "out of the box" by the end-user for
reading bar codes) that includes: a housing designed to be
held in the hand of the user while reading bar code symbols;
means in the housing for producing a multi-line,
omnidirectional laser scanning pattern; and a Scanner
Interface; and optionally including a stand for supporting
said reader during bar code symbol reading applications, and
only Non-Infringing Modifications to such Escrowed Specimen,
provided that (i) the external form factor (i.e., shape) of
the housing remains substantially the same as the Escrowed
Specimen, although the size of the housing may be uniformly
decreased so that the total volume of the housing decreases
by a maximum of twenty (20%) percent; (ii) the Scanner
Interface of the METROLOGIC Triggerless Omnidirectional
Hand- Held Scan Product either (x) remains substantially the
same compared to that in the scanner product represented by
Escrowed ScanGlove Product or (y) conforms to either (a) a
standard interface specification (e.g. RS-232) published by
an independent standards organization (e.g. IEEE, ANSI,
etc.), or (b) a proprietary interface of METROLOGIC, or (c)
a proprietary or non-proprietary interface (e.g. OCIA,
"Appletalk", etc.) of any third party (including OEM
manufacturers), but excluding (d) any SYMBOL interface that
is commercially introduced by SYMBOL in a SYMBOL product
after the Execution Date hereof, such SYMBOL product being
sold to a customer as a customized or proprietary SYMBOL
interface and such interface thereafter being reverse
engineered or copied by METROLOGIC without authorization;
(iii) the scan speed of the laser spot in the product does
not differ more than twenty (20%) percent from the scan
speed of said Escrowed Specimen, (iv) the scan pattern is
substantially the same as the scan pattern of said Escrowed
Specimen; (v) the product does not include a manually
operated trigger switch to initiate laser scanning; and (vi)
the product does not include any one or more of the
following elements: (a) a display for displaying
information, or (b) keyboard, keypad, or function keys, or
the functional equivalent of (a) or (b).
1.74 "METROLOGIC Triggerless Single Scanline Hand-Held Scanner"
shall mean a laser scanning bar code reader represented by
the Escrowed Specimen thereof deposited pursuant to this
Agreement which is in the form of a finished end-user
product which includes: a housing designed to be held in the
hand of the user while reading bar code symbols, means in
the housing for producing a single scanline laser scanning
pattern; means in the housing for initiating laser scanning
without the use of a manual trigger and only Non-Infringing
Modifications thereto; provided that (i) the external
form-factor (i.e., the size and shape) of the housing,
remains substantially the same as that in the Escrowed
Specimen and in no event may be modified to be a "gun
shaped" although the total length of the housing may be
shortened by no more than 1.25 inches; (ii) the external
scan pattern produced by the reader remains as a single
linear scan line; (iii) the reader performs substantially
the same functions as the reader represented by the Escrowed
Specimen; and (iv) the product does not include any one or
more of the following elements: (a) a display for displaying
information, or (b) keyboard, keypad, or function keys, or
the technical equivalent of (a) or (b). A METROLOGIC
Triggerless Single Scanline Product incorporating a
METROLOGIC Scan Engine Product may be incorporated in such
reader provided the incorporation of such scan engine is a
Non-Infringing Modification.
<PAGE>
1.75 "METROLOGIC Universal Digitizer Patent Family" shall mean
(i) all present and future U.S. patents of METROLOGIC
having one or more claims dominated by the
Inventive Concept of a digital signal processing
device for processing a plurality of digital input
signals produced as output from a plurality of
different scanning devices, wherein each said
digital input signal has first and second signal
levels representative of a code symbol scanned by
each said different scanning device, and wherein
said digital signal processing device comprises:
means for generating a plurality of frequencies;
means for measuring the time duration of each of
the first and second signal levels of said digital
input signals using one or more of said plurality
of frequencies; and means for producing digital
data representative of the measured time durations
of the first and second signal levels of said
digital input signals, for use in decoding said
code symbols scanned by different scanning devices
(i.e. the foregoing defines the Inventive Concept
of such patent family);
(ii) U.S. Patent No. 5,081,342;
(iii) any U.S. patent issuing to METROLOGIC in which a
terminal disclaimer has been filed in order to
overcome a double-patenting rejection based on one
or more claims contained in any US patent defined
in (i) or (ii) above;
(iv) any U.S. patent issuing to METROLOGIC which
contains method claims corresponding to
substantially similar apparatus claims in a
"METROLOGIC Patent defined in (i), (ii), or (iii)
above being entitled to the same priority date;
(v) any U.S. patent issuing to METROLOGIC which
contains apparatus claims corresponding to
substantially similar method claims in a
METROLOGIC Patent defined in (i), (ii), (iii), or
(iv) above being entitled to the same priority
date;
(vi) any METROLOGIC patent in which all claims thereof
are dominated by any of the claims of any patent
in (i), (ii), (iii), (iv), or (v) above;
(vii) any reissues and reexaminations of any of the
foregoing patents; and METROLOGIC Patent defined in
(i), (ii), (iii), (iv), (v), or (vi) above;
(viii) any foreign counterpart patents of any of the patents
in (i), (ii), (iii), (iv), (v), (vi) or (vii) above.
1.76 "Minimum Purchase Commitment" shall mean the minimum number of
METROLOGIC Omnidirectional Scanner Products (or other mutually
agreed METROLOGIC product) which SYMBOL is required to
purchase from METROLOGIC each calendar year until December 31,
1998.
1.77 "Modified Elected New METROLOGIC Product" shall mean a
METROLOGIC product that is based upon an Elected New
METROLOGIC Product to which a modification has been made
pursuant to Article 11 Part III.
1.78 "Modified METROLOGIC Qualifying Product" shall mean a
METROLOGIC product that is based upon a METROLOGIC Qualifying
Product to which a modification has been made pursuant to
Article 11 Part III
1.79 "Modified METROLOGIC Standard Product" shall mean a METROLOGIC
product based upon a METROLOGIC Standard Product which a
modification has been made for SYMBOL in response to a SYMBOL
"Request for Quotation" (RFQ).
<PAGE>
1.80 "Net Sales Value" shall mean, in the case of sales by a Party
hereto to third parties at arm's length for monetary
consideration, the Party's gross invoice price to the
Customer, less allowances for returns and uncollectible
accounts and less (to the extent separately stated on or
calculable from the invoices or other written agreements):
(1) cash, trade, or volume discounts or commissions paid
to third parties,
(2) shipping, customs and insurance charges, and
(3) sales, use, value added, withholding and similar
taxes.
The Net Sales Value shall be calculated based upon all
integrated components of the Royalty Bearing Product sold to
the Customer, and intergradable components, such as embedded
integrated circuits and printed circuit cards, cables,
batteries and battery chargers for use with such Royalty
Bearing Product, if any, sold to said Customer (except spare
parts for repair purposes).
In the case of a sale of a Royalty Bearing Product which is
integrated in an array or package, or integrated as part of a
system or subsystem made up of a plurality of parts, wherein
the Royalty Bearing Product is not separately priced, or a
transfer of a Royalty Bearing Product to a Customer which does
not deal at arm's length with the Party, or a transfer by that
Party to a Customer for other than monetary consideration or
use of a Royalty Bearing Product by that Party (such as for
sales demonstration purposes, or for actual business use in
the facilities of that Party or by employees of that Party),
Net Sales Value shall be calculated based upon the price at
which METROLOGIC sells comparable quantities of the Royalty
Bearing METROLOGIC Product at substantially the same time to
Customers dealing at arm's length.
Notwithstanding the foregoing, in the case of (i) the transfer
of a Royalty Bearing Product to an unaffiliated third party
Customer which does not deal at arm's length with that Party,
or (ii) the transfer of a Royalty Bearing Product by that
Party including components supplied by a Customer, or (iii) a
transfer of a Royalty Bearing Product by that Party for other
than monetary consideration or to an Affiliate, or (iv) the
transfer of a Royalty Bearing Product excluding a cable, or
for consideration in addition to monetary consideration, then
the Net Sales Price of the Royalty Bearing Product shall be
calculated based upon the price (less normal trade discounts,
freight, and credits and allowances for returns) at which that
Party sells, at arm's length, solely for monetary
consideration, comparable quantities of the same or similar
complete (including cable), finally assembled, fully
functional, Royalty Bearing Products in which none of the
components are supplied by the Customer and the sale occurs at
substantially the same time.
In the event in any instance an additional product or service,
such as an external peripheral device or other accessory item
(including manuals, documentation, media, ribbons, software,
cables, connectors, batteries, power supplies, cradles,
stands, mounting fixtures, carrying cases and similar items),
extended warranties or special services are sold or provided
together with the Royalty Bearing Product and are not
separately priced, Net Sales Value shall be calculated by
including such device, service or items as a component of the
Royalty Bearing Product and without any deduction relating to
the cost of such device, service or item, as a matter of
mutual accounting convenience agreed to by the Parties, unless
that Party can demonstrate that such additional products or
services have been sold to at least five different customers
at a separate and distinctly priced line item to such
customer, in which case a deduction equal to the average
selling price of such device in the most recent quarter shall
be applied.
<PAGE>
1.81 "New METROLOGIC Product" shall mean a METROLOGIC Product that
is commercially introduced after the Execution Date and which
is neither a Licensed METROLOGIC Product nor a Modified
Licensed METROLOGIC Product.
1.82 "New SYMBOL Product" shall mean a SYMBOL Product that is
commercially introduced after the Execution Date and which is
not a SYMBOL Modified Escrowed Product.
1.83 "Non-Holographic SYMBOL Scanner Product" shall mean a SYMBOL
Product that does not include either (i) one or more holograms
or holographic optical elements for scanning a light beam and
producing a scanning pattern; or (ii) one or more holograms or
holographic optical elements for producing a light beam and
scanning such light beam to produce a scanning pattern. l
1.84 "OEM" or "OEM Customer" shall mean a Person, not a
Subsidiary or Affiliate of METROLOGIC, which is
engaged in the design, development and manufacture
of electronic or information processing hardware
products into which is incorporated a Royalty
Bearing METROLOGIC Product purchased directly or
indirectly, from METROLOGIC. Such Royalty Bearing
METROLOGIC Product is utilized as a constituent
component or subassembly of an integral product
manufactured and sold by such Person to its
customers. The product manufactured by an OEM
provides functionality beyond that of the
subassembly or components purchased from
METROLOGIC. The identity of the product purchased
from METROLOGIC is usually not apparent in the OEM
Product (as defined hereunder).
1.854 "OEM Product" shall mean a product manufactured by an OEM into
which product a Royalty Bearing METROLOGIC Product is
incorporated or with which a Royalty Bearing METROLOGIC
Product is used.
1.86 "Party" shall mean METROLOGIC or SYMBOL. "Parties" shall mean
METROLOGIC and SYMBOL collectively.
1.87 "PEP" or "Product Evaluation Package" shall mean a written
technical disclosure of the design of a product or
modification to a product of a Party hereto, which may
include, but is not limited to, electrical schematic and
timing diagrams, mechanical drawings, functional
specifications, computer source code and user and operator
manuals, and optionally including an operational specimen of
the product (to the extent available) which a Party may elect
to submit to the other Party pursuant to Articles 9 and 10,
and subject to the confidentiality provisions of Article 12 of
this Agreement
1.88 "Purchasable METROLOGIC Product" shall mean a METROLOGIC
Qualified Product and Elected New METROLOGIC Product.
1.89 "RF Option" shall mean a radio frequency (RF) transmitter or
receiver or both for carrying out data transmission to or data
communication with a remote unit by way of wireless
electromagnetic wave transmission.
1.90 "Reseller Customer" shall mean any person or entity purchasing
or leasing products from METROLOGIC that is not a Subsidiary
or Affiliate of METROLOGIC and is not an end-user of the
products purchased or leased, including, without limitation,
Distributors, OEMs, VARs (as hereinafter defined), and other
types of resellers.
<PAGE>
1.91 "Royalty Bearing METROLOGIC Product" shall mean any of the
following:
(i) METROLOGIC ScanKey Product, or
(ii) METROLOGIC ScanGlove Product, or
(iii) METROLOGIC RF Scanner Product, or
(iv) METROLOGIC Scan Engine Product, or
(v) METROLOGIC Aperture-Stop Slot/Projector Scanner
Product, or
(vi) METROLOGIC Triggerless Single Scanline Hand-Held
Scanner Product, or
(vii) Elected New METROLOGIC Product.
1.92 "Royalty Bearing Product" shall mean a Royalty Bearing
METROLOGIC Product or a Royalty Bearing SYMBOL Product, as the
context requires.
1.93 "Royalty Bearing SYMBOL Product" shall mean any Licensed
SYMBOL product on which royalty is paid to METROLOGIC under
the provision of Article 6 hereunder.
1.94 "SIT Patent" or "Scanner Integrated Terminal Patent" shall
mean U.S. Patent Nos. 4,758,717; 5,130,520; 5,262,628;
5,396,055; and 5,532,469 of SYMBOL.
1.95 "Scanner Interface" shall mean (i) in the case of a cabled or
tethered bar code scanner unit, the physical and electrical
specifications of the external connector or connectors of such
product, and (ii) in the case of a wireless RF bar code
scanner unit, the data communication protocol specifications.
1.96 "Standard METROLOGIC Triggerless Omnidirectional Scanner
Product" or "SCATSOP" shall mean an automatic omnidirectional
laser scanning bar code symbol reading product designed,
manufactured (or have manufactured) commercially available
sold by METROLOGIC in the normal course of business sold to
third party customers (i.e. not to SYMBOL), e.g., the
METROLOGIC MS6720.
1.97 "Subsidiary" shall mean a corporation, company or
other entity more than fifty (50%) percent of
whose outstanding voting securities generally
entitled to vote for the election of directors or
other managing authority (including voting
securities issuable upon conversion of another
security which is, or may become, convertible into
such voting securities, or voting securities
issuable upon the exercise of any warrant, option
or similar right) are, now or hereafter, owned or
controlled, directly or indirectly, by another
corporation, company or other entity, but such
first corporation, company or other entity shall
be deemed to be a subsidiary only at such time as
and for so long as such ownership or control
exists.
1.98 "Successor" shall mean an entity that succeeds to the business
or operations of METROLOGIC having the benefit of this
Agreement and the rights and licenses granted thereunder,
whether by assignment, transfer, merger or consolidation, or
sale and transfer of assets.
1.99 "SYMBOL" shall mean SYMBOL TECHNOLOGIES, INC. and its
Subsidiaries.
<PAGE>
1.100 "SYMBOL Aperture Patent" shall mean U.S. Patent Nos.
4,816,660; 4,816,660B; and 5,247,162, and continuations and
divisionals thereof covering apertures in laser scanning bar
code readers, and any reissues and reexaminations thereof, and
any counterpart foreign patent applications and patents
heretofore or hereafter filed corresponding to said patents
and applications, in any and all countries except Japan.
1.101 "SYMBOL Core Technology Patents" shall mean U.S. Patent Nos.
4,387,297; 4,593,186; the SIT Patents; and the SYMBOL RF
Patents.
1.102 "SYMBOL Designed Scanner Product" shall mean a bar code
reading product designed by SYMBOL which SYMBOL elects to have
manufactured by METROLOGIC for purchase by SYMBOL under the
provisions of Article 11 Part III.
1.103 "SYMBOL Escrowed Product" shall mean: (i) any SYMBOL product
sold or offered for sale before December 3, 1993 and which is
represented by an Escrowed Specimen deposited hereunder and
designated as a "Pre-Settlement Introduced Product"; and (ii)
any SYMBOL product sold or offered for sale after December 3,
1993 and represented by an Escrowed Specimen as of January 1,
1996 deposited hereunder and designated a "Post-Settlement
Introduced Product."
1.104 "SYMBOL Modified Escrowed Product" shall mean a SYMBOL product
that results from a change, improvement, or modification after
December 3, 1993 to a SYMBOL Escrowed Product as defined
herein.
1.105 "SYMBOL RF Patent" shall means SYMBOL U.S. Patent Nos.
4,460,120 and 5,321,246 and continuations and divisionals
thereof covering wireless and/or radio data transmission from
bar code readers, and any reissues and reexaminations thereof,
and any counterpart foreign patent applications and patents
heretofore or hereafter filed corresponding to said patents
and applications, in any and all countries except Japan.
1.106 "SYMBOL One-Way RF Product" shall mean a hand-supported or
body-wearable bar code symbol reading device having a
radio-frequency (RF) transmitter, but not an RF receiver,
embodied therein for supporting one-way digital data
transmission to an RF receiver embodied in a remote base unit,
by way of wireless electromagnetic-wave transmission.
1.107 "SYMBOL Product" shall mean a bar code reading product of
SYMBOL.
1.108 "SYMBOL Product Family" shall mean a family of
related SYMBOL Products the individual products
wherein individual products in such family usually
have substantially similar housing designs but
different model numbers, features, and interfaces.
Examples of distinct SYMBOL Product Families
include the SYMBOL , SE 1000 family, LS 1200
family, LP 1500 family, LT 1700 family, the LS
2000 family, the LS 3000 family, the LS 4000
singlescanline family, LS 4800 2D scan line
family, LS 5000 family, the LS 6000 family, and
the LS 9100 family.
<PAGE>
1.109 "Termination Exempt Products" shall mean a product
of a Party hereto which (i) has been publicly
announced as a product (ii) is in commercial
production with at least one hundred production
units having been manufactured and shipped to
customers prior to the Early Termination Date; and
(iii) a TDP pertaining to such product has been
deposited with the appropriate Escrow Agent
pursuant to Section 15.11 hereunder. Termination
Exempt Products shall not include "modifications"
to escrowed Termination Exempt Products except for
those products having normal engineering
component-level revisions or changes which may
subsequently be made from time to time to such
Termination Exempt products which do not change
the form, fit, functions, or performance of such
products ("Allowable Changes"). Notwithstanding
anything to the contrary in this Agreement, any
changes to Termination Exempt Products are limited
only to the Allowable Changes recited above and
shall not include any modified METROLOGIC Products
or modified SYMBOL Products which are released to
production subsequently to the Early Termination
Date irrespective of whether or not such products
include only Non-Infringing Modifications.
1.110 "Two Dimensional Bar Code Symbology" shall mean a bar code
symbology in which information is stored in two dimensions or
directions such as stacked bar code symbologies (such as Code
49, PDF 417, and Supercode, etc.), matrix code symbologies
(such as Code One, DataMatrix, MaxiCode, VeriCode, Glyph,
Array Tag, etc.) and dot code symbologies (such as MMP,
Drexler code, etc.), as contrasted with a one dimensional or
"linear" bar code symbol such as UPC.
1.111 "TDP" or "Technical Data Package" shall mean a
written technical disclosure of the design of a
product or modification to a product of a Party
hereto, which may include, but is not limited to,
electrical schematic and timing diagrams,
mechanical drawings, functional specifications,
computer source code and user and operator
manuals, and optionally including an operational
specimen of the product (to the extent available)
which a Party may elect to submit pursuant to
Section 3.19 or 15.11 to the Escrow Agent of the
other Party.
1.112 "VAR" or value-added-reseller shall mean a company
which is engaged in the resale of products
manufactured by other companies which are intended
to satisfy general purpose requirements, such
products typically being combined with software or
other products that "add value" to the original
product and provide customers with a system
intended to satisfy a specific application or
purpose. A VAR may provide its own software or
services or that of third parties, but a VAR does
not manufacture or "private label" the hardgoods
that are sold in conjunction with the purchased
products. The trademark of METROLOGIC and the
identity of the original products purchased from
METROLOGIC are apparent in the VAR product.
<PAGE>
ARTICLE 2 - RELATIONSHIP WITH AND AMENDMENT OF THE AGREEMENT OF
SETTLEMENT
2.1 Release. Except as set forth in Sections 2.3 and
2.4, this Agreement does not terminate or
supersede the Agreement of Settlement between the
parties dated December 3, 1993. The consent
decrees terminating the civil actions set forth in
the Agreement of Settlement remain in full force
and effect. In consideration for entry into this
Agreement and in settlement of all disputes
between the Parties to the date of this Agreement,
each Party hereby releases and discharges any and
all claims or demands, of any type or description,
whether known or unknown, that it asserted or
could have asserted against the other Party as of
the Effective Date except as provided hereunder in
Section 2.2.
2.2 Transition. The release set forth in Section 2.1 shall not
excuse METROLOGIC's obligation to make payments of sums due
and payable to SYMBOL as of January 1, 1996 and thereafter
pursuant to the provisions of the Agreement of Settlement as
amended in Article 2.4 hereunder or pursuant to any other
outstanding note or agreement between the Parties.
2.3 Non-Waiver. Notwithstanding the foregoing, in partial
consideration for entry into this Agreement, METROLOGIC agrees
that effective January 1, 1996 the manufacture, use or sale of
any Royalty Bearing METROLOGIC Product or METROLOGIC
Omnidirectional Hand-Held Scanner Product shall not be deemed
immune from suit for patent infringement of any SYMBOL patent
under any provision of the Agreement of Settlement or the
consent decrees thereunder.
2.4 Amendment. The Agreement of Settlement is hereby amended as
follows effective July 1, 1996:
Amend Paragraph 1 to read as follows:
1. As consideration for and in settlement of
all patent litigation between the parties
and for future rights, METROLOGIC shall pay
to SYMBOL the amount of [ ] of METROLOGIC's
[ ] of products and services made, used, or
sold in the United States, commencing with
April 1, 1993, and running through June 30,
1996.
Add the following provisions to Paragraph 1:
In addition, commencing July 1, 1996,
METROLOGIC shall pay to SYMBOL the amount [
] of METROLOGIC's [ ] as reported on
METROLOGIC's financial statements until such
time as the cumulative payments under this
Article total [ ] or December 31, 2004,
whichever is earlier.
All other provisions of the Agreement of Settlement
remain the same.
<PAGE>
ARTICLE 3 - LICENSES AND IMMUNITIES GRANTED TO METROLOGIC
3.1 ScanKey Products. SYMBOL hereby grants to METROLOGIC a
personal, non-transferable (except as provided in Article 18),
non-exclusive, worldwide license, subject to the terms of this
Agreement, to make, (and to have made only as provided in
Section 3.9 below), use and sell METROLOGIC ScanKey Products
covered by any claim of any of the Licensed SYMBOL Patents
only in the Field of ScanKey Products.
3.2 ScanGlove Products. SYMBOL hereby grants to
METROLOGIC a personal, non-transferable (except as
provided in Article 18), non-exclusive, worldwide
license, subject to the terms of this Agreement,
to make, (and to have made only as provided in
Section 3.9 below), use and sell METROLOGIC
ScanGlove Products covered by any claim of any of
the Licensed SYMBOL Patents only in the Field of
ScanGlove Products, provided that the Next
Generation ScanGlove Product is not licensed, and
prior to a date that is twelve (12) months after
the Execution Date of this Agreement. The Next
Generation ScanGlove Product cannot be offered for
sale or sold by METROLOGIC under the benefit of
this license.
3.3 RF Products. SYMBOL hereby grants to METROLOGIC a personal,
non-transferable (except as provided in Article 18),
non-exclusive, worldwide license, subject to the terms of this
Agreement, to make, (and to have made only as provided in
Section 3.9 below), use and sell METROLOGIC RF Scanner
Products covered by any claim of any of the Licensed SYMBOL
Patents only in the Field of RF Scanner Products.
3.4 Slot/Projection Products. SYMBOL hereby grants to
METROLOGIC a personal, non-transferable (except as
provided in Article 18), non-exclusive, worldwide
license, subject to the terms of this Agreement,
to make (and to have made only pursuant to Section
3.9 below), use and sell METROLOGIC Aperture-Stop
Slot/Projection Scanner Products covered by any
claim of any of the SYMBOL Aperture Patents only
in the Field of Aperture-Stop Slot/Projection
Scanner Products.
3.5 Scan Engine Products. SYMBOL hereby grants to
METROLOGIC a personal, non-transferable (except as
provided in Article 18), non-exclusive, worldwide
license, subject to the terms of this Agreement,
to make (and to have made only pursuant to Section
3.9 below), use and sell METROLOGIC Scan Engines
covered by any claim of any of the Licensed SYMBOL
Patents. The "Field" restrictions and limitations
on the use of Scan Engine Products pertaining to
this license grant include those covenants,
conditions and restrictions pursuant to Section
3.14 through 3.18 hereunder.
3.6 Triggerless Single ScanLine Hand-Held Products.
SYMBOL hereby grants to METROLOGIC a personal,
non-transferable (except as provided in Article
18), non-exclusive, worldwide license, subject to
the terms of this Agreement, to make (and to have
made only pursuant to Section 3.9 below), use and
sell METROLOGIC Triggerless Single Scanline Hand
Held Scanner Products covered by any claim of any
of the Licensed SYMBOL Patents only in the Field
of Triggerless Single Scanline Hand Held Scanner
Products.
<PAGE>
3.7 Omnidirectional Products. SYMBOL hereby grants to
METROLOGIC a personal, non-transferable (except as
provided in Article 18), non-exclusive, worldwide
license, subject to the terms of this Agreement,
to make (and to have made only pursuant to Section
3.9 below), use and sell METROLOGIC Triggerless
Omnidirectional Hand-Held Scanner Products covered
by any claim of any of the Licensed SYMBOL Patents
only in the Field of Triggerless Omnidirectional
Hand-Held Scanner Products, expressly conditioned
on METROLOGIC offering to sell to SYMBOL the
products and fulfilling the terms and provisions
of Article 11 hereto.
3.8 Elected New METROLOGIC Product ("ENMP"). SYMBOL
hereby grants to METROLOGIC a personal,
non-transferable (except as provided in Article
18), non-exclusive, worldwide license, subject to
the terms of this Agreement, to make (and to have
made only pursuant to Section 3.9 below), use and
sell Elected New METROLOGIC Products covered by
any claim of any of the Licensed Extended SYMBOL
Patents only in the Field of Elected New
METROLOGIC Scanner Products such license being,
expressly conditioned on both the following
conditions (i) and (ii) being satisfied:
(i) METROLOGIC satisfying and fulfilling the terms and
provisions of Article 12 .
(ii) and only in the event SYMBOL has elected to
purchase such ENMPs pursuant to Section 12.2
METROLOGIC sells such ENMP to SYMBOL and
thereafter continues to offer such ENMP for sale
to SYMBOL and satisfies and fulfills the terms and
provisions of Article 11 Part II hereto pertaining
to the sale of such ENMPs to SYMBOL.
3.9 Have Made Rights. SYMBOL hereby grants to
METROLOGIC a personal, nontransferable,
non-exclusive worldwide license, subject to the
terms of this Agreement, to have up to two
manufacturers at any given time make Licensed
METROLOGIC Products, provided that such products
are manufactured exclusively by such manufacturers
for METROLOGIC for resale by METROLOGIC to
independent third parties (not affiliated with
such manufacturers), under METROLOGIC trademarks
or trade names or trademark of a bona-fide
METROLOGIC end-user or OEM customer that purchases
such products directly from METROLOGIC (e.g., the
attachment of a label "IBM" as customer private
labeling on a METROLOGIC Product made by
METROLOGIC or subcontractor (but not the customer,
i.e. IBM) and purchased by IBM for resale or use
by IBM), and provided further that such products
are made solely to METROLOGIC's own designs and
specifications.
3.10 Resales. Nothing herein shall restrict the right of Reseller
Customers of METROLOGIC from reselling or transferring to
third parties Licensed METROLOGIC Products for use and
application solely in the respective Field of application
usage for which such Licensed METROLOGIC Products have been
made and sold by METROLOGIC.
<PAGE>
3.11 Different Fields. No right or license is granted
by this Agreement to any customer of METROLOGIC,
or transferee of a METROLOGIC product, either
expressly or by implication, estoppel or
otherwise, to use the Licensed SYMBOL Patents for
the use, lease or sale of products (covered by the
claims of the Licensed SYMBOL Patents and sold to
such customer by METROLOGIC for use in a specific
Application) for subsequent use in an application
other than its respective specific Authorized
Application (e.g., a METROLOGIC ScanKey Product
made and sold to a customer that is used outside
the Field of ScanKey Products, or is modified so
as to be outside of the definition of METROLOGIC
ScanKey Products, shall not have the benefit of
any license granted under Article 3).
3.12 No Implied Licenses. Notwithstanding any other
term of this Agreement, no right or license is
granted by this Agreement, either expressly or by
implication, estoppel, or otherwise, under any
other SYMBOL patent, patent application, or patent
right, whether in the same field or in a related
field, including any right or license under any
SYMBOL patents, whether now or hereafter existing,
not expressly licensed to METROLOGIC in Article 3
of this Agreement, pertaining to and claiming bar
code readers, laser scanning bar code readers,
components or subassemblies thereof, or their
method of manufacture, application, or use,
whether or not such patents depict, illustrate,
pertain to or claim the subject matter disclosed
in the Licensed SYMBOL Patents.
3.13 No Technical Information. No right or license is
granted by this Agreement, either expressly or by
implication, under any SYMBOL technical
information.
3.14 SIT Patents. METROLOGIC further acknowledges that
the assembly or manufacture of certain integrated
scanner/radio or scanner/computer units
incorporating laser scanning bar code reader
subassemblies may infringe one or more SYMBOL
patents under which METROLOGIC is not licensed.
SYMBOL acknowledges that it has licensed certain
patents (the SYMBOL scanning integrated terminal
("SIT") patents (U.S. Patents No. 4,758,717;
5,130,520; 5,262,628; 5,396,055 and 5,532,469
hereinafter the "SIT Patents") to several
independent third parties (the "SYMBOL SIT
Licensees"), to allow such parties to make certain
products covered by claims of any of such patents.
Except for its rights to make, have made use and
sell the METROLOGIC ScanKey product pursuant to
Section 3.1 hereunder, METROLOGIC acknowledges
that it is not licensed either expressly or by
implication, estoppel, or otherwise, under any of
the SIT Patents, and except for the grant under
Section 3.1 to make, have made, use and sell
METROLOGIC ScanKey Products, METROLOGIC has no
right or other basis to grant a license,
sublicense or immunity, either express or implied,
under such SYMBOL patents to any purchaser or
transferee of a METROLOGIC Product, including any
METROLOGIC Scan Engine Products. Except for
license granted in Section 3.1 to make, have made,
use and sell the METROLOGIC ScanKey Product, the
licenses and covenants granted under Section 3.1
of this Agreement to METROLOGIC shall not, either
expressly or by implication, estoppel, operation
of law, or otherwise, act as an exhaustion,
waiver, exemption or otherwise affect SYMBOL's
rights against third parties under the SIT
Patents, including SYMBOL's right to receive
royalties from the SYMBOL SIT Licensees, who may
purchase or may have purchased any METROLOGIC
Product (including the METROLOGIC ScanKey
Product).
<PAGE>
3.15 Inducing Infringement of SYMBOL's Core Technology
Patents. METROLOGIC shall not induce or contribute
to infringement of a SYMBOL Core Technology Patent
(defined in Article 1) by knowingly selling any
METROLOGIC product, including but not limited to a
METROLOGIC Scan Engine Product, to any third party
customer for use in an application which infringes
a SYMBOL Core Technology Patent (which is not
licensed to METROLOGIC in connection with the
manufacture or sale by METROLOGIC of a METROLOGIC
product sold to the customer), unless such third
party customer is licensed by SYMBOL for such
application and the license agreement between
SYMBOL and that third party customer is in force
and in "Good Standing." Upon written request of
METROLOGIC, SYMBOL shall advise METROLOGIC whether
a specified third party customer application
infringes any SYMBOL Core Technology Patent. Also
upon written request by METROLOGIC., SYMBOL shall
advise METROLOGIC whether or not any specified
third party has been expressly granted a license
by SYMBOL under specified SYMBOL Core Technology
Patents, and if so, whether or not such license to
such party is at that time in "Good Standing" as
defined herein. For the purposes of Sections
3.14-3.18, SYMBOL shall thereafter be bound by its
response to METROLOGIC, unless either (i) the
specified third party customer application is
changed, or (ii) the license to such third party
no longer remains in Good Standing, in which case
SYMBOL shall have the affirmative obligation to
notify METROLOGIC of the changed status of the
license. .
3.16 Stipulation with Respect to Inducing Infringement
of SYMBOL's Core Technology Patents. If at any
time during the term of this agreement, METROLOGIC
sells a METROLOGIC product, including but not
limited to METROLOGIC products which are
general-purpose (e.g., so-called "staple" or
"commodity" product that may have non-infringing
uses with respect to certain patents of SYMBOL),
to a customer of METROLOGIC (the "Customer"), and
the Customer's product, when incorporating or
utilizing the METROLOGIC product, results in the
infringement of one or more SYMBOL Core Technology
Patents (the "Specified SYMBOL Patent") (albeit
that the METROLOGIC product as sold by METROLOGIC
does not infringe said Specified SYMBOL Patent),
then the METROLOGIC product shall be deemed to
infringe the Specified SYMBOL Patent. Such
infringement may arise either because (1) the
Customer is not licensed under the Specified
SYMBOL Patent, or (2) the Customer has entered
into a license agreement with SYMBOL or may
otherwise allege to have the benefit of a license
under the Specified SYMBOL Patent but (a) the
Customer's product or method of use is outside of
the scope of such license; or (b) the Customer's
license is not then in Good Standing
<PAGE>
3.17 Notification and Counsel Letter If at any time
during the term of this Agreement, SYMBOL becomes
aware of an infringement under Section 3.16, or a
public announcement of a product which
incorporates or uses a METROLOGIC product which
reasonably suggests that an infringement will
occur, of a Specified SYMBOL Patent by a Customer
of METROLOGIC, then SYMBOL may at any time notify
METROLOGIC of such infringement, or potential
infringement, and shall accompany such
notification pursuant to Article 19 with a letter
from an outside counsel for SYMBOL, along with
accompanying drawings, identifying in full
particularity the specific SYMBOL patent claims in
the Specified SYMBOL Patent being infringed and
the features or steps of the Customer's product or
its method of use which infringe such patent
claims with a detailed technical recitation and
application of the claims to the features and
components of the product as shown in the drawings
or its method of use, which clearly establishes
infringement (such notification being hereinafter
referred to as the "Inducing Infringement
Notification", and such use by the Customer being
hereinafter referred to as the "Infringing Use.")
3.18 METROLOGIC Sales for an Infringing Use. The offer
to sell or sale by METROLOGIC of a METROLOGIC
product to a Customer which is deemed to infringe
a SYMBOL patent under the preceding Section 3.15
at any time after receiving an Inducing
Infringement Notification with respect to such
Customer shall be deemed knowing inducement of
infringement by METROLOGIC. Within three (3)
business days after receipt of an Inducing
Infringement Notification from SYMBOL (the "Three
Day Period") , METROLOGIC shall cease to accept
any purchase orders from the Customer for the
identified METROLOGIC product, or offer to sell
such identified METROLOGIC product. This provision
shall not prohibit METROLOGIC from fulfilling any
outstanding purchase orders from the customer
which have been actually received and accepted by
METROLOGIC prior to the beginning of such Three
Day Period by shipping the identified METROLOGIC
product to such customer for a period of
forty-five (45) days after receipt of the Inducing
Infringement Notification, but the fulfillment of
such orders shall not relieve METROLOGIC from any
damages incurred by SYMBOL for such inducement of
infringement, and SYMBOL shall be entitled to any
and all remedies including but not limited to
enjoining the Infringing Use.
As provided above , following receipt of the Inducing
Infringement Notification, METROLOGIC shall cease to sell the
identified METROLOGIC product to such Customer for use in the
Infringing Use, and confirm to SYMBOL in writing that it has
done so. Any failure of METROLOGIC to cease such sales and
shipment of the identified METROLOGIC product within forty
five days after receipt of such Inducing Infringement
Notification shall be deemed to be a material breach of this
Agreement. Such Inducing Infringement Notification shall be
final and binding upon METROLOGIC until the expiration of the
Specified SYMBOL Patent or a final judicial determination is
made that the stated Infringing Use in products of such
entities have not and do not infringe the Specified SYMBOL
Patent.
<PAGE>
3.19 METROLOGIC Escrow. Within twenty (20) days after
the date of execution of this Agreement,
METROLOGIC will deposit in escrow with SYMBOL's
Escrow Agent Escrowed Specimens of current
versions of the following METROLOGIC Products: (a)
METROLOGIC ScanKey Product; (b) METROLOGIC
ScanGlove Product; (c) METROLOGIC Scan Engine
Product; (d) the METROLOGIC Triggerless Single
Line Hand-Held Scanners; (e) the METROLOGIC
Aperture Slot/Projection Scanner Product; and (f)
within eighty (80) days after the date of
execution of this Agreement, the METROLOGIC
Triggerless Omnidirectional Hand-Held Scanner
Product. Any operational specimen or written
technical disclosure of the design of a METROLOGIC
product received into escrow subsequent to the
date provided hereinabove shall not be deemed to
be an Escrowed Specimen of such METROLOGIC
product.
3.20 Augmentation. METROLOGIC has the right at any time
during the term of this Agreement to augment any
Escrowed Specimen deposited hereunder with
additional documentation (such as annotations to
software source code, or timing diagrams
representing the action of an electrical circuit,
such additional documentation being hereinafter
referred to as the "Augmented Material")
descriptive of the disclosed Escrowed Specimen as
of the date of deposit of Escrowed Specimen. Such
additional documentation is intended only to be as
explanatory of the disclosed and deposited
technical material as of the date of deposit of
the Escrowed Specimen and shall not include any
additional undisclosed technical material, or
technical material that was developed or
implemented in the product represented by the
Escrowed Specimen at any time after the date of
deposit of the Escrowed Specimen. Such Augmented
Material shall be dated to reflect the date of its
creation or writing and clearly marked as to the
date of deposit with the Escrow Agent. In the
event of any question or dispute about the use or
relevance of such material, the includability of
such material as part of the Escrowed Specimen
shall be subject to review and final determination
by the arbitrator pursuant to Article 16.
3.21 Products Not Licensed. Notwithstanding any other
provision of this Agreement, METROLOGIC
Holographic Scanner Products and METROLOGIC
Products capable of reading Two Dimensional Bar
Codes are not licensed under any SYMBOL patents
licensed hereunder, nor are such products covered
by any immunity from suit (except as provided for
in 3.24), arbitration proceeding or other
provisions of this Agreement. The Parties agree to
discuss at a later date a potential business
relationship concerning SYMBOL's interest in
purchasing such products in the future and
METROLOGIC's interest in purchasing from SYMBOL
scan engines for reading Two Dimensional Bar Codes
or licensing from SYMBOL any relevant Two
Dimensional Bar Code patents. Neither Party
presumes that it will enter into such business
relationship or that such discussions will lead to
any license relationship with respect to
intellectual property rights of either Party with
respect thereto.
<PAGE>
3.22 Products Sold to SYMBOL. The manufacture and sale of any
product manufactured by METROLOGIC and sold to SYMBOL,
including METROLOGIC Qualifying Products, that may be covered
by any applicable SYMBOL patent shall not constitute an
infringement of such patent thereof and the purchase, use and
sale of such products by SYMBOL that may be covered by any
applicable METROLOGIC patent, shall not constitute an
infringement thereof.
3.23 Immunity and Waiver of Damages for Current
METROLOGIC Aperture-Stop Slot/Projection Scanners.
During the term of this Agreement, and subject to
the terms and conditions herein, SYMBOL hereby
covenants not to sue METROLOGIC for any claim of
infringement of any SYMBOL patent by any current
commercially available Aperture-Stop
Slot/Projection Scanners for a period of twenty
four (24) months after the Effective Date of this
Agreement, and SYMBOL hereby waives any claim for
damages it may have for such infringement during
such period. Such covenant not to sue shall not be
deemed to be in lieu of any license grant under
this Agreement, nor shall such covenant affect in
any way the payment of royalties due under any
such license.
3.24 Immunity of METROLOGIC Holographic Scanner
Products. During the period of time in which both
this Agreement and Purchasing Provision, Article
11, Part III (for the purchase of METROLOGIC
Holographic Scanner Products), are both effective,
and subject to the terms and conditions herein,
SYMBOL hereby covenants not to sue METROLOGIC for
any claims of infringement of any SYMBOL patent by
current commercially available METROLOGIC
Holographic Scanner Product offered for sale to
SYMBOL and SYMBOL hereby waves any claim for
damages it may have for such infringement during
such period.
<PAGE>
ARTICLE 4 - LICENSE GRANT TO SYMBOL
Overview.
1. This Article 4 describes the licenses grantable to SYMBOL by METROLOGIC under
families of METROLOGIC patents. Each METROLOGIC patent (except holographic
patents), whether already issued or to be issued in the future, is categorized
by subject matter into one (and only one) patent family, each family consisting
of one or more patents. The patent families are in turn categorized into three
distinct classes, which are designated "Class A", "Class B", and "Class C"
Families. There are eleven "Class A Families" which are predefined and as of the
Execution Date in the aggregate contain all of METROLOGIC's issued patents
(except patents in the METROLOGIC Holographic Patent Family). As of the
Execution Date, there are no Class B or Class C Families, defined or in
existence. "Additional" families of the Class B or Class C category will be
defined and created from time to time as patents issue by METROLOGIC Families
covering Inventive Concepts that do not fall into an existing family. There is
no limit on the number of such "additional" families that may be created. One
difference between a Class B and a Class C patent is that a Class C patent may
be created from a continuation or divisional patent application.
2. From time to time, at its option, SYMBOL may specify and elect one or more
METROLOGIC Patent Families, with the royalty payable thereon being determined by
the chronological order of election more particularly set forth in Article 6.
The royalty payable on sales of a specific SYMBOL Product is the sum of the
royalties payable with respect to each elected METROLOGIC Patent Family
applicable to such SYMBOL Product, subject to certain limitations as provided in
this Article (e.g. [ ]). The royalty payable on a SYMBOL Product covered by an
Elected Class C Group depends on whether or not the Licensed SYMBOL Product is
only covered by the Elected Class C Group. If the Licensed SYMBOL Product is
only covered by the Elected Class C Group the royalty rate shall be [ ] If not,
the royalty rate shall be [ ]
3. At the time SYMBOL introduces a new SYMBOL Product, it is contemplated that
because of certain features of some models of such product, licenses may be
required under one or more METROLOGIC Patent Families. However, as a negotiated
compromise by the Parties, all such Class C Families shall be aggregated
together as a single "Class C Group" for purposes of license election and
royalty computation.
4.1 License. Subject to the terms of this Agreement,
METROLOGIC grants to SYMBOL a non-exclusive
worldwide license to make, have made, use and sell
SYMBOL Products covered by any claim in any patent
included within each Licensable METROLOGIC Patent
Family licensed by SYMBOL (i.e. Elected Licensable
METROLOGIC Patent Family.) Except as provided
under Section 4.5 at any time during the term of
the Agreement SYMBOL may have a license under up
to, but no more than, six (6) Licensable
METROLOGIC Patent Families, provided that at any
one time no more than four (4) of the Licensable
METROLOGIC Patent Families (under which SYMBOL is
then licensed) are either Class B Families and/or
the Countable Class C Group. The license grant
provided in preceding sentences shall be personal,
non-transferable, non-exclusive and worldwide,
excluding, however, any patent claims in any
METROLOGIC patent in the METROLOGIC Holographic
Patent Family.
4.2 No Implied Licenses. Notwithstanding any other
term of this Agreement, no right or license is
granted by this Agreement, either expressly or by
implication, estoppel, or otherwise, under any
other METROLOGIC patent, patent application, or
patent right, whether in the same field or in a
related field, including any right or license
under any METROLOGIC patents, whether now or
hereafter existing, not expressly licensed to
SYMBOL in Article 3 of this Agreement, pertaining
to and claiming bar code readers, laser scanning
bar code readers, components or subassemblies
thereof, or their method of manufacture,
application, or use, whether or not such patents
depict, illustrate, pertain to or claim the
subject matter disclosed in the Licensed SYMBOL
Patents.
<PAGE>
4.3 Procedure for Election. The license grant provided
in Section 4.1 shall commence at any time during
the term of this Agreement upon SYMBOL making
written notification to METROLOGIC specifying the
Licensable METROLOGIC Patent Family under which
SYMBOL elects to be licensed, and such license
shall be terminated with respect to a specific
Licensable METROLOGIC Patent Family upon
termination under Article 15 or the expiration of
the end of term of the patents included in such
Licensable METROLOGIC Patent Family or upon
written notification to METROLOGIC by SYMBOL.
4.4 DELETED
4.5 DELETED
4.6 DELETED
4.7 Allocation of New METROLOGIC Patents to METROLOGIC Patent
Families. Each METROLOGIC patent issued or granted subsequent
to the Execution Date (the "Issued Patent") shall be assigned
to one and only one METROLOGIC Patent Family (i.e. a Class A,
Class B, Class C or METROLOGIC Holographic Patent Family) as
follows:
(a) if the Issued Patent satisfies the definition of
either (i) or (ii) or (iii) , but not more than
one: (i) the Class A Families and the METROLOGIC
Holographic Patent Family; (ii) the then existing
Class B Families, (iii) the then existing Class C
Families, then the Issued Patent shall be assigned
into the family into which it can be classified
such assignment, being carried out by considering
the definition of each family in turn considering
each definition of the Class A (i.e., the
METROLOGIC Predefined Patent Families) in the
order set forth in Section 1.62 followed by the
METROLOGIC Holographic Patent Family, followed by
consideration of each Class B Family in the
chronological order of creation, followed by each
Class C Family in the chronological order of
creation. However, in the event the Issued Patent
satisfies the definition of a METROLOGIC Patent
Family as determined according to the procedure
above, and also satisfies the definition of a
different METROLOGIC Patent Family which is an
Elected Licensable METROLOGIC Patent Family, then
the Issued Patent shall be automatically assigned
to the Elected Licensable METROLOGIC Patent
Family;
(b) if the Issued Patent satisfies the definition of any
existing Class B or Class C Family (i.e. created by
METROLOGIC pursuant to Section 4.7 (c) prior to the
date of issuance of the Issued Patent), then the
Issued Patent shall be assigned to the first such
existing Family in the chronological order of
creation of such Family into which the Issued Patent
can be properly classified;.
(c) if the Issued Patent does not satisfy the
definition of any Predefined METROLOGIC Patent
Family (a Class A Family) or any existing Class B
Family or Class C Family, and the Issued Patent is
a patent falling within the definition of either a
Class B Family or a Class C Family set forth in
Section 1.1 or 1.2 as determined from the
assignment procedure of paragraph as above, then a
new Class B or Class C Family respectively shall
be created under this paragraph (c) , and the
Issued Patent shall be deemed a member of the
newly created Class B Family or new Class C Family
as the case may be and a definition of such family
set forth in writing and notified to SYMBOL under
Section 4.8. As used herein, the term "assigned
to" shall mean that the Issued Patent shall be
deemed a member of the specified one and only one
METROLOGIC Patent Family;
<PAGE>
(d) if the foregoing procedural steps (a), (b), (c) do
not properly assign the Issued Patent to any existing
Class A, Class B, or Class C Family, or result in the
creation of a new Class B or Class C Family, the
Issued Patent shall be assigned to METROLOGIC
Miscellaneous Patent Family notwithstanding anything
to the contrary set forth in this Agreement.
4.8 Definition of New Additional (Class B or Class C
Families). If an Issued Patent satisfies the
criteria of Section 4.7 (c), METROLOGIC may
forthwith create and specify the new Class B or
Class C Family , as the case may be, by setting
forth the following elements: (1) a written
description of the Inventive Concept which shall
recite the features or elements of one or more
specified claims of the Issued Patent but being no
broader than the invention covered by such claim
or claims , and each such claim not being
dominated by at least one claim of a patent in any
Class A or any other Class B Family or Class C
Family; and (2) the U.S. patent number of the
Issued Patent of METROLOGIC upon which the newly
created Class B or Class C Family is founded. The
properly defined new Class B or Class C Family
shall be numerically designated (e.g. Family B1,
B2, B3, etc., and Family C1, C2, C3, etc., as the
case may be).
4.9 Notification of Creation of an Additional
METROLOGIC Patent Family In the event a new Class
B or Class C Family is created pursuant to Section
4.7 (c), METROLOGIC shall notify SYMBOL in writing
identifying the definition of the new Class B or
Class C Family as the case may be, in accordance
with Section 4.7 within one hundred eighty (180)
days after the date of issuance of the Issued
Patent (as such term is used in Section 4.7) and
specifying the Inventive Concept thereof in
writing, together with the attribute of such
patent (such as the identification of the
application family history) which (i) properly
determines its classification either as being a
member of a Class B or Class C Patent Family under
the procedure of Section 4.7; and (ii) properly
determines its inclusion within a specific
identified METROLOGIC Patent Family (e.g. Family
B2, or Family C3) within such Class. In the event
METROLOGIC has not notified SYMBOL in writing
within one-hundred eighty (180) days after
issuance of the Issued Patent, or within thirty
(30) days of an earlier written request by SYMBOL
during the six month period after the issue date,
with the written statement, Classification, and
Specific Family membership, the Issued Patent
shall automatically be classified into the
METROLOGIC Miscellaneous Patent Family
notwithstanding anything to the contrary set forth
in this Agreement
4.10 SYMBOL Escrow. Within twenty (20) days after the
date of execution of this Agreement, SYMBOL will
deposit in escrow with METROLOGIC's Escrow Agent
specimens of (i) the December 3, 1993 version
(i.e., the "Pre-Settlement Introduced Products"
under Section 4.14) and (ii) January 1, 1996
version (i.e., the "Post-Settlement Introduced
Products" under Section 4.15), of those SYMBOL
products for which SYMBOL elects to receive the
benefit of patent infringement immunization from
METROLOGIC pursuant to Sections 4.14 and 4.15
hereunder, respectively. Any operational specimen
or written technical disclosure of a product not
received into escrow prior to the date provided
hereinabove shall not be deemed to be an Escrowed
Specimen of a SYMBOL Product, and shall not be
subject to any immunization or waiver of damages
under Section 4.14 and 4.15 hereunder.
<PAGE>
4.11 Subsequent SYMBOL Escrows. Within one hundred
eighty (180) days after the Release to Production
of a New SYMBOL Product in connection with which
SYMBOL has elected one or more Licensable
METROLOGIC Patent Families, or within sixty days
after the Election under 4.3, whichever is later,
SYMBOL may, at its option, deposit in escrow with
METROLOGIC's Escrow Agent specimens of production
version of the new SYMBOL Product for which SYMBOL
elects to receive the benefit of the license from
METROLOGIC pursuant to Section 4.13 hereunder.
4.12 Augmentation. SYMBOL has the right at any time
during the term of this Agreement to augment any
Escrowed Specimen deposited hereunder with
additional documentation (such as annotations to
software source code, or timing diagrams
representing the action of an electrical circuit,
such additional documentation being hereinafter
referred to as the "Augmented Material")
descriptive of the disclosed Escrowed Specimen as
of the date of deposit of Escrowed Specimen. Such
additional documentation is intended only to be as
explanatory of the disclosed and deposited
technical material as of the date of deposit of
the Escrowed Specimen and shall not include any
additional undisclosed technical material, or
technical material that was developed or
implemented in the product represented by the
Escrowed Specimen at any time after the date of
deposit of the Escrowed Specimen. Such Augmented
Material shall be dated to reflect the date of its
creation or writing and clearly marked as to the
date of deposit with the Escrow Agent. In the
event of any question or dispute about the use or
relevance of such material, the includability of
such material as part of the Escrowed Specimen
shall be subject to review and final determination
by the arbitrator pursuant to Article 16.
4.13 License under Subsequently Issued METROLOGIC
Patents. If (i) SYMBOL elects the necessary number
(but at least one) of METROLOGIC Patent Family
Licenses under Section 4.1 (an "Elected Group") to
cover a particular SYMBOL Product against
infringement and all of the SYMBOL Products in the
SYMBOL Product Family do not infringe any other
METROLOGIC patent not in the Elected Groups, and
(ii) SYMBOL has timely deposited an Escrowed
Specimen of a representative specimen of each
SYMBOL Product in such Family in accordance with
Section 4.11 and (iii) thereafter pays the
royalties due to METROLOGIC in accordance with
Article 5 on the Elected Group, then METROLOGIC
hereby grants to SYMBOL, under any METROLOGIC
Patent issuing after the date of deposit of said
Escrowed Specimen under Section 4.11, a royalty
free worldwide non-exclusive license to make, have
made, use and sell the particular SYMBOL products
as represented by the deposited Escrowed Specimen,
and any Non-Infringing Modifications thereto. The
grant of a license under this Section 4.13 shall
not "count" as a conditional license under Section
4.1
<PAGE>
4.14 Immunity and Waiver of Damages for SYMBOL Products
Introduced Before December 3, 1993
("Pre-Settlement Introduced Products"). During the
term of this Agreement, and subject to the terms
and conditions herein, METROLOGIC hereby covenants
not to sue SYMBOL for any claim of infringement of
any METROLOGIC patent by any SYMBOL Product sold
or offered for sale before December 3, 1993 and
represented by an Escrowed Specimen, and
METROLOGIC hereby waives any claim for damages it
may have for such infringement by such SYMBOL
Products, except for any Infringing Modification
made to such SYMBOL Product after the Effective
Date and sold or offered for sale after the
Effective Date. If an Infringing Modification has
been made to such SYMBOL Product after December 3,
1993 but before the Effective Date, METROLOGIC
hereby covenants not to sue SYMBOL for any claim
of infringement and waives any claim for damages
it may have for such infringement during the
twenty-four month period after the Effective Date.
4.15 Immunity and Waiver of Damages for SYMBOL Products
Introduced After December 3, 1993 but Prior to the
Effective Date of this Agreement. During the term
of this Agreement, and subject to the terms and
conditions herein, METROLOGIC hereby covenants not
to sue SYMBOL for any claim of infringement of any
METROLOGIC patent by any SYMBOL Product sold or
offered for sale after December 3, 1993 but before
the Effective Date of this Agreement and
represented by an Escrowed Specimen, for a period
of twenty four (24) months after the Effective
Date (the "24 Month Period"), and METROLOGIC
hereby waives any claim for damages it may have
for such infringement during such period, except
for any Infringing Modification made to such
SYMBOL Product sold or offered for sale after the
Effective Date. Such covenant not to sue shall not
be deemed to be in lieu of any license grant under
this Agreement, nor shall such covenant affect in
any way the payment of royalties due under any
such license (except for any Infringing
Modification made to such SYMBOL Product sold or
offered for sale after the end of the 24 Month
Period).
4.16 Immunity for Non-Holographic SYMBOL Scanner
Products under METROLOGIC Holographic Patent
Family. To the extent that an Issued Patent is
classified in the METROLOGIC Holographic Patent
Family, and such Issued Patent or any other claims
in any patent that is a member of the METROLOGIC
Holographic Patent Family are deemed broad enough
to be infringed by a Non-Holographic SYMBOL
Scanner Product then such patent claims shall not
be asserted or enforceable against such SYMBOL
product, and METROLOGIC covenants not to sue
SYMBOL or its customers for any claim of
infringement by such product, and waives any claim
to damages it may have for such infringement.
4.17 No Implied Licenses. Notwithstanding any other
term of this Agreement, no right or license is
granted by this Agreement, either expressly or by
implication, estoppel, or otherwise, under any
other METROLOGIC patent, patent application, or
patent right, whether in the same field or in a
related field, including any right or license
under any METROLOGIC patents, whether now or
hereafter existing, not expressly licensed to
SYMBOL in Article 4 of this Agreement, pertaining
to and claiming bar code readers, laser scanning
bar code readers, components or subassemblies
thereof, or their method of manufacture,
application, or use, whether or not such patents
depict, illustrate, pertain to or claim the
subject matter disclosed in the Licensed
METROLOGIC Patents.
4.18 No Technical Information. No right or license is
granted to SYMBOL by this Agreement, either
expressly or by implication, under any METROLOGIC
technical information.
<PAGE>
ARTICLE 5 - ROYALTY PAYMENTS TO SYMBOL
5.1 Royalties. For the license of the Licensed SYMBOL Patents,
during the term of this Agreement, and subject to the terms
and conditions herein, METROLOGIC shall make the following
royalty payments to SYMBOL:
5.2 Fixed Payment. In partial consideration for entry
into this Agreement, METROLOGIC shall pay SYMBOL
the sum of [ ] as follows: (i) on the date of
execution of this Agreement, METROLOGIC shall pay
SYMBOL the sum of [ ] by wire of federal funds to
SYMBOL's Account No. 2236-22-3910 at Fleet Bank,
Bohemia, New York 11716; and (ii) the sum of [ ] [
] payable on February 15, 1997, May 15, 1997,
August 15, 1997, November 15, 1997, February 15,
1998, May 15, 1998, August 15, 1998, and November
15, 1998.
5.3 METROLOGIC ScanKey and METROLOGIC ScanGlove Products. For the
license of the Licensed SYMBOL Patents, during the term of
this Agreement, and subject to the terms and conditions
herein, METROLOGIC shall make the following royalty payments
to SYMBOL:
[ ] of all METROLOGIC ScanKey Products and METROLOGIC
ScanGlove Products made, used or sold by METROLOGIC worldwide;
provided, however, that all METROLOGIC Next Generation
ScanGlove Products shall be subject to a minimum fixed royalty
of [ ] [ ].
No royalty payment shall be due or owing to SYMBOL under any
claim of the SIT Patents by any third party customer of
METROLOGIC who purchases and uses a METROLOGIC ScanKey Product
pursuant to Section 3.1 of this Agreement, and under which
royalties have been paid by METROLOGIC pursuant to this
Article 5.
5.4 RF Scanner Products. For the License of the Licensed SYMBOL
Patents, during the term of this Agreement, and subject to the
terms and conditions herein, METROLOGIC shall make the
following royalty payments to SYMBOL:
(a) Commencing January 1, 1996, and continuing to
December 31, 1998 for METROLOGIC RF Scanner
Products sold in the U.S., [ ] [ ] all METROLOGIC
RF Scanner Products made and sold or used by
METROLOGIC in the U.S., provided that such royalty
[ ] and further provided that during only the
calendar year 1996 METROLOGIC may sell [ ] [ ] of
METROLOGIC RF Scanner Products [ ] [ ] under an
identified pre-existing contract at a royalty rate
[ ] in lieu of the royalty rate set forth
hereinabove; and further provided that if at any
time during the term of this Agreement SYMBOL
shall manufacture and sell a One-Way RF Scanner
Product the royalty payable to SYMBOL under this
Section shall be reduced by [ ] for each
METROLOGIC RF Scanner Products unit equal to but
not exceeding the number of units of SYMBOL
One-Way RF Scanner Products sold by SYMBOL in the
U.S. during the preceding royalty reporting period
and reported to METROLOGIC as set forth in Article
7. In the event in any quarter the number of units
of One-Way RF Scanner Product sold by SYMBOL in
the U.S. in the preceding period exceed the number
of METROLOGIC RF Scanner Products sold by
METROLOGIC in the U.S., the excess credit may not
be carried over or carried back to other quarters.
<PAGE>
(b) Commencing January 1, 1999 and continuing to
December 31, 2001 for METROLOGIC RF Scanner
Products sold in the U.S., [ ] [ ] of all
METROLOGIC RF Scanner Products made and sold, or
used by METROLOGIC in the U.S., provided that such
royalty [ ] [ ]; and further provided that if at
any time during the term of this Agreement SYMBOL
shall manufacture and sell SYMBOL One-Way RF
Scanner Products the royalty payable to SYMBOL
under this Section shall be reduced by [ ] [ ] for
each METROLOGIC RF Scanner Product unit equal to
but not exceeding the number of units of SYMBOL
One-Way RF Scanner Products sold by SYMBOL in the
U.S. during the preceding royalty reporting period
as set forth in Article 7. In the event in any
quarter the number of units of One-Way RF Scanner
Product sold by SYMBOL in the U.S. in the
preceding period exceed the number of METROLOGIC
RF Scanner products sold by METROLOGIC in the U.S.
the excess credit may not be carried over or
carried back to other quarters.
(c) The royalty for RF Scanner Products sold in the U.S.
commencing January 1,2002 shall be as mutually
agreed.
(d) In the event the Parties do not reach an agreement
for the level of royalties commencing January 1,
2002, the royalty level for 2002 and subsequent years
shall be deemed the same as for calendar year 2001.
(e) Commencing January 1, 1996, and continuing to
December 31, 2001, a royalty as set forth in the
table below for all METROLOGIC RF Scanner Products
sold outside the U.S.
Calendar Year Unit Volume Unit Royalty
1996 [ ] [ ]
[ ] [ ]
1997 [ ] [ ]
[ ] [ ]
1998 [ ] [ ]
[ ] [ ]
1999 [ ] [ ]
[ ] [ ]
2000 [ ] [ ]
[ ] [ ]
2001 [ ] [ ]
[ ] [ ]
- --------------------- ------------------- -------------------
Thus, by way of example, each of the first [ ] sold during
1996 shall bear a royalty of [ ] while the [ ] and all
subsequent units shall bear a royalty of [ ]
The royalty for RF Scanner Products sold outside the U.S.
commencing January 1, 2002 shall be as mutually agreed.
In the event the Parties do not reach an agreement for the
level of royalties commencing January 1, 2002, the royalty
level for 2002 and subsequent years during the term of this
Agreement shall be deemed the same as for calendar year 2001.
<PAGE>
(f) In the event that all claims of SYMBOL RF Patents
covering METROLOGIC RF Scanner Products are found
or otherwise declared invalid by the United States
Patent and Trademark Office during a reissue or
reexamination proceeding from which there is no
further appeal, or during litigation by a court of
competent jurisdiction from which there is no
appeal, then METROLOGIC shall be released from any
and all obligations to pay SYMBOL a royalty for
making, having made, using or selling RF Scanner
Products anywhere worldwide.
5.5 Aperture-Stop Slot/Projection Scanner Products. For the
license of the Licensed SYMBOL Patents, during the term of
this Agreement, and subject to the terms and conditions
herein, METROLOGIC shall make the following royalty payments
to SYMBOL:
(a) [ ] of all METROLOGIC Slot/Projection Scanner
Products made, used and sold worldwide by
METROLOGIC covered by the SYMBOL Aperture Patents.
<PAGE>
5.6 Scan Engine Products. For the license of the
Licensed SYMBOL Patents, during the term of this
Agreement, and subject to the terms and conditions
herein, METROLOGIC shall make the following
royalty payments to SYMBOL:
A [ ] METROLOGIC Scan Engine Product made, used or sold
worldwide by METROLOGIC, subject to the provisions of Section
5.8 below.
5.7 Triggerless Single Scanline Hand Held Scanner Products. For
the license of the Licensed SYMBOL Patents, during the term of
this Agreement, and subject to the terms and conditions
herein, METROLOGIC shall make the following royalty payments
to SYMBOL:
A [ ] METROLOGIC Triggerless Single Scanline Hand Held Scanner
Product made, used or sold worldwide by METROLOGIC, subject to
the provisions of Section 5.8 below.
5.8 Annual Royalty Cap On Specific METROLOGIC Products.
(a) During the term of this Agreement, in each
calendar year in which METROLOGIC has accrued and
paid [ ] or more for royalties due to SYMBOL
pursuant to only Section 5.4(e) hereinabove (the
"Offshore RF Royalty Threshold"), the maximum
annual royalty payable by METROLOGIC to SYMBOL for
the aggregate of categories (i) METROLOGIC Scan
Engine Products and (ii) METROLOGIC Triggerless
Single Scanline Hand Held Scanner Products shall
not exceed an amount (the "Royalty Cap") equal to:
(X) for calendar year 1996 [ ] [ ] and (Y) in each
succeeding year after 1996 [ ] [ ] of the Royalty
Cap for the preceding year. (Thus, for example,
the "Royalty Cap" for 1997 shall be computed to be
[ but such amount will not be deemed a maximum
annual royalty for that year unless the Offshore
RF Royalty Threshold has been exceeded for that
year).
(b) In each calendar year in which METROLOGIC has accrued
and paid less than [ ] for royalties due to SYMBOL
pursuant to only Section 5.4(e), there shall be no
maximum annual royalty for the aggregate of
categories (i) and (ii) above.
5.9 Scan Engines. The payment of royalties by METROLOGIC for sales
of METROLOGIC Scan Engines shall not be deemed to (i) enlarge
the express license granted hereunder, or (ii) to waive any
rights SYMBOL may have pursuant to the Agreement of Settlement
(including the Consent Decrees thereunder), or (iii) waive any
rights under any other license agreement of which METROLOGIC
may have the benefit.
5.10 Royalty Due Under Multiple License Grants. In the
event a METROLOGIC product falls into more than a
single Authorized Application (e.g., a METROLOGIC
product is covered by the definition of a
METROLOGIC Triggerless Single Scanline Hand-Held
Scanner Product and also is covered by the
definition of a METROLOGIC RF Scanner Product),
and is thereby covered by more than one license
grant under Article 3, such product shall comply
with the Field restrictions in respective
applicable sections of Article 3 for each
Authorized Application in connection with the
manufacture, use, or sale of such product. The
royalty payable for such METROLOGIC product under
this Agreement shall be the highest of each of the
applicable respective royalty rates corresponding
to the license grant applicable to the product as
set forth above in this Article 5
<PAGE>
5.11 Triggerless Omnidirectional Hand-Held Scanner
Products. The license under Section 3.7 shall be [
] (i.e. Initial Term and Renewal Terms thereof) of
Article 11 (the "Purchasing Provision"), and upon
the expiration or termination of the Purchasing
Provision, the Parties shall negotiate in good
faith a license fee for the extension of the
license under Section 3.7 based upon a percentage
of the Net Sales Value of each Triggerless
Omnidirectional Hand-Held Scanner Products
licensed and sold under the provisions of Section
3.7, provided that such royalty rate shall not
exceed [ ][ ] METROLOGIC's [ ] of the applicable
Triggerless Omnidirectional Hand-Held Scanner
Product, whichever is less.
5.12 Effect of Payment of Royalties on Other Agreements. The
payment of royalties under this Agreement shall not affect,
discharge, excuse, exempt, or exhaust any rights of SYMBOL
under any other agreement which METROLOGIC or any of its
customers or suppliers may be a party to, or may otherwise
have the benefit of, that pertains to the same or similar
SYMBOL Patents as licensed to METROLOGIC under this Agreement.
5.13 Elected New METROLOGIC Products. For the license
under Section 3.8, during the term of this
Agreement, the royalty rate for the license
granted under Section 3.8 shall be negotiated
between the Parties and established pursuant to
the procedure set forth in Article 12 but in no
event shall such rate exceed [ ] of the [ ] of
each Elected New METROLOGIC Products made, used
and sold worldwide by METROLOGIC. Upon the
expiration or termination of Article 11, Part II,
the Parties shall negotiate in good faith a
license fee for the extension of the license under
Section 3.8 based upon a percentage of the Net
Sales Value of each Elected New METROLOGIC
Products licensed and sold under the provisions of
Section 3.8, provided that such royalty rate shall
not exceed [ ] METROLOGIC's [ ] of the applicable
Elected New METROLOGIC Product, whichever is less.
<PAGE>
ARTICLE 6 - ROYALTY PAYMENTS TO METROLOGIC
Overview.
This Article 6 sets forth the computation of the royalty rate
applicable to sales by SYMBOL of a Licensed SYMBOL Product. The royalty payable
on sales of a specific Licensed SYMBOL Product is the sum of royalties payable
on each Family applicable to that product. For Class A Families (except Dual
Decode) and Class B Families, the royalty rate depends upon the chronological
order of election of such family. The Dual Decode Family is at a royalty rate of
[ ] The royalty rate on the Class G Group is not fixed, but depends upon the
number of Elected METROLOGIC Patent Families that cover a specific Licensed
SYMBOL Product.
6.1 Royalty Rates. For the license granted to SYMBOL by METROLOGIC
under Article 4 of this Agreement during the term of this
Agreement, and subject to the terms and conditions herein,
SYMBOL shall make the following royalty payments to
METROLOGIC, subject to the aggregate annual maximum set forth
in Section 6.4.4 herein below:
6.2 Royalties Due To METROLOGIC If Dual-Decode Patent Family Is
Not Elected.
6.2.1 First and Second METROLOGIC Patent Families. If
SYMBOL has not elected a license under the
METROLOGIC Dual Decode Patent Family, then with
respect to the first and second Elected Licensable
METROLOGIC Patent Families (not including the
METROLOGIC Dual- Decode Patent Family), SYMBOL
shall pay METROLOGIC: a royalty of [ ] percent of
the Net Sales Value of Licensed SYMBOL Products
covered by patents in the first Elected Licensable
METROLOGIC Patent Family applicable to a given
Licensed SYMBOL Product; and a royalty of [ ]
percent of the Net Sales Value of Licensed SYMBOL
Products covered by patents in the second Elected
Licensable METROLOGIC Patent Family applicable to
a given Licensed SYMBOL Product.
6.2.2 Third and Fourth METROLOGIC Patent Families. In
the event SYMBOL elects a license under a third or
fourth Licensable METROLOGIC Patent Family (not
including the METROLOGIC Dual- Decode Patent
Family), SYMBOL shall pay METROLOGIC: a royalty of
[ ] percent of the Net Sales Value of Licensed
SYMBOL Products covered by patents in the first
Elected Licensable METROLOGIC Patent Family
applicable to a given Licensed SYMBOL Product; a
royalty of [ ] percent of the Net Sales Value of
Licensed SYMBOL Products covered by patents in the
second Elected Licensable METROLOGIC Patent Family
applicable to a given Licensed SYMBOL Product; a
royalty of [ ] percent of the Net Sales Value of
Licensed SYMBOL Products covered by patents in the
third Elected Licensable METROLOGIC Patent Family
applicable to a given Licensed SYMBOL Product; and
a royalty of [ ] percent of the Net Sales Value of
Licensed SYMBOL Products covered by patents in the
fourth Elected Licensable METROLOGIC Patent Family
applicable to a given Licensed SYMBOL Product;
wherein the first, second, third, and fourth
Elected Licensable METROLOGIC Patent Families are
ranked (i.e. assigned a number such as first,
second, third or fourth) in order the election of
such Elected Licensable METROLOGIC Patent
Families.
<PAGE>
6.2.3 Fifth or Sixth METROLOGIC Patent Families. In the
event SYMBOL - licenses a fifth or sixth
Licensable METROLOGIC Patent Family (not including
the METROLOGIC Dual-Decode Patent Family), SYMBOL
shall pay METROLOGIC: a royalty of [ ] percent of
the Net Sales Value of Licensed SYMBOL Products
covered by patents in the first Elected Licensable
METROLOGIC Patent Family applicable to a given
Licensed SYMBOL Product; a royalty of [ ] percent
of the Net Sales Value of Licensed SYMBOL Products
covered by patents in the second Elected
Licensable METROLOGIC Patent Family applicable to
a given Licensed SYMBOL Product; a royalty of [ ]
percent of the Net Sales Value of Licensed SYMBOL
Products covered by patents in the third Elected
Licensable METROLOGIC Patent Family applicable to
a given Licensed SYMBOL Product; a royalty of [ ]
percent of the Net Sales Value of Licensed SYMBOL
Products covered by patents in the fourth Elected
Licensable METROLOGIC Patent Family applicable to
a given Licensed SYMBOL Product; a royalty of [ ]
percent of the Net Sales Value of Licensed SYMBOL
Products covered by patents in the fifth Elected
Licensable METROLOGIC Patent Family applicable to
a given Licensed SYMBOL Product; and a royalty of
[ ] [ ] percent of the Net Sales Value of Licensed
SYMBOL Products covered by patents in sixth
Elected Licensable METROLOGIC Patent Family
applicable to a given Licensed SYMBOL Product;
wherein the first, second, third, fourth, fifth
and sixth Elected Licensable METROLOGIC Patent
Family are ranked (i.e. assigned a number such as
first, second third, fourth, fifth or sixth) in
order of the election of such Elected Licensable
METROLOGIC Patent Families by SYMBOL.
6.3 If Dual-Decode Patent Family Is Elected. In the event SYMBOL
elects a license under the METROLOGIC Dual-Decode Patent
Family, SYMBOL shall pay METROLOGIC a royalty of [ ] percent
of the Net Sales Value of Licensed SYMBOL Products covered by
patents in the METROLOGIC Dual-Decode Patent Family.
6.4 Royalties Due to METROLOGIC If Dual-Decode Patent
Family is Elected
6.4.1 First and Second METROLOGIC Patent Families. In
the event SYMBOL has elected the METROLOGIC
Dual-Decode Patent Family, then with respect to
the first and second Licensable METROLOGIC Patent
Families in addition thereto that SYMBOL elects to
license from METROLOGIC (not including the
METROLOGIC Dual-Decode Patent Family), SYMBOL
shall pay METROLOGIC: a royalty of [ ] percent of
the Net Sales Value of Licensed SYMBOL Products
covered by patents in the first Elected Licensable
METROLOGIC Family applicable to a given Licensed
SYMBOL Product; and a royalty of [ ] percent of
the Net Sales Value of Licensed SYMBOL Products
covered by patents in the second Elected
Licensable METROLOGIC Family applicable to a given
Licensed SYMBOL Product.
<PAGE>
6.4.2 Third and Fourth METROLOGIC Patent Families. In
the event in addition SYMBOL licenses a third
Licensable METROLOGIC Patent Family (not including
the METROLOGIC Dual-Decode Patent Family), SYMBOL
shall pay METROLOGIC: a royalty of [ ] percent of
the Net Sales Value of Licensed SYMBOL Products
covered by patents in the first Elected Licensable
METROLOGIC Family applicable to a given Licensed
SYMBOL Product; a royalty of [ ] percent of the
Net Sales Value of Licensed SYMBOL Products
covered by patents in the second Elected
Licensable METROLOGIC Family applicable to a given
Licensed SYMBOL Product; a royalty of [ ] percent
of the Net Sales Value of Licensed SYMBOL Products
covered by patents in the third Elected Licensable
METROLOGIC Family applicable to a given Licensed
SYMBOL Product; and a royalty of [ ] percent of
the Net Sales Value of Licensed SYMBOL Products
covered by patents in the fourth Elected
Licensable METROLOGIC Family applicable to a given
Licensed SYMBOL Product; wherein the first,
second, third, and fourth Elected Licensable
METROLOGIC Patent Families are numerically ranked
(i.e. assigned a number such as first, second
third or fourth) in order of the election of such
Elected Licensable METROLOGIC Patent Families by
SYMBOL.
6.4.3 Fifth METROLOGIC Patent Family. In the event
SYMBOL licenses a fifth Licensable METROLOGIC
Patent Family (not including the METROLOGIC
Dual-Decode Patent Family), SYMBOL shall pay
METROLOGIC: a royalty of [ ] percent of the Net
Sales Value of Licensed SYMBOL Products covered by
patents in the first Elected Licensable METROLOGIC
Family applicable to a given Licensed SYMBOL
Product; a royalty of [ ] percent of the Net Sales
Value of Licensed SYMBOL Products covered by
patents in the second Elected Licensable
METROLOGIC Family applicable to a given Licensed
SYMBOL Product; a royalty of [ ] percent of the
Net Sales Value of Licensed SYMBOL Products
covered by patents in the third Elected Licensable
METROLOGIC Family applicable to a given Licensed
SYMBOL Product; a royalty of [ ] percent of the
Net Sales Value of Licensed SYMBOL Products
covered by patents in the fourth Elected
Licensable METROLOGIC Family applicable to a given
Licensed SYMBOL Product; a royalty of [ ] percent
of the Net Sales Value of Licensed SYMBOL Products
covered by patents in the fifth Elected Licensable
METROLOGIC Family applicable to a given Licensed
SYMBOL Product; wherein the first, second, third,
fourth, and fifth Elected Licensable METROLOGIC
Patent Family are ranked (i.e. assigned a number
such as first, second third, fourth, or fifth) in
order of the of such Elected Licensable METROLOGIC
Patent Families.
6.5 Royalties on Elected Class C Group.
6.5.1 If a license to the Class C Group is elected by
SYMBOL pursuant to Article 4 (i.e. the Class C Group
is an "Elected Class C Group") then:
(i) SYMBOL shall pay METROLOGIC a royalty of [ ]
percent of the Net Sales Value of Licensed SYMBOL
Products covered by any patent in the Elected
Class C Group provided that the Elected Class C
Group is the only Elected Licensable METROLOGIC
Patent Family during that royalty reporting period
applicable to such Licensed SYMBOL Product (i.e.
there are no Class A or Class B Families that have
been elected by SYMBOL which are applicable to
such Licensed SYMBOL Products); and
<PAGE>
(ii) SYMBOL shall pay METROLOGIC a royalty of [ ] [ ]
percent of the Net Sales Value of Licensed SYMBOL
Products covered by any patent in the Elected
Class C Group applicable to such Licensed SYMBOL
Product, provided that there are other Elected
Licensable METROLOGIC Patent Families covering
such Licensed SYMBOL Product (i.e. there is at
least one elected Class A Family or Class B Family
applicable to such Licensed SYMBOL Product.)
6.5.2 Not withstanding anything in this Article 6, in no
event shall the total aggregate royalty rate used to
compute royalties payable on a given Licensed SYMBOL
Product [ ] [ ]
6.6 Maximum Royalty. For the license of the Licensable
METROLOGIC Patent Families (except for any
royalties payable to METROLOGIC for the license of
METROLOGIC One-Way RF Patents), the maximum
aggregate royalty payable to METROLOGIC by SYMBOL
shall be [ ] and in each calendar year thereafter
a maximum aggregate amount [ ] [ ] [ ]
6.7 Future Meeting. The Parties shall meet on or about October 1,
1997 to discuss the appropriateness of the royalty levels and
maximum aggregate royalty under Articles 5 and 6 on a going
forward basis in view of business conditions at that time. In
the event the parties do not reach an agreement, the Royalty
shall be the same going forward as set forth in Article 5 and
Sections 6.1 and 6.2.
6.8 Royalty Waiver for Certain SYMBOL Products. For
the license of the METROLOGIC Patents, royalties
shall be payable by SYMBOL with respect to a
SYMBOL product that is commercially available on
or before January 1, 1996 only to the extent that
if at some time subsequent to January 1, 1996
SYMBOL introduces an Infringing Modification into
such commercially available product. No license
from METROLOGIC shall be required by SYMBOL, nor
shall any royalties be payable at any time prior
to January 1, 1998, with respect to SYMBOL
products that were commercially available on or
before January 1, 1996 and METROLOGIC hereby
covenants not to sue SYMBOL for any claim of
infringement and waives any claims for damages it
may have for such infringement during such period.
<PAGE>
ARTICLE 7. ROYALTY REPORTING AND ROYALTY PAYMENTS
7.1 First Royalty Payment. The royalty for three quarters covering
the period January 1, 1996 through September 30, 1996 shall be
paid on the Execution Date of this Agreement. METROLOGIC has
made a non-refundable estimated prepayments of [ ] to SYMBOL
for royalties due for the first and second quarter of 1996,
which shall be credited to the payment due on the Execution
Date of this Agreement.
METROLOGIC acknowledges that each of its current commercially
available METROLOGIC RF Scanner Products, METROLOGIC ScanKey
Products, METROLOGIC ScanGlove Products, METROLOGIC
Aperture-Stop Slot/Projection Scanner Products, and the
METROLOGIC Triggerless Single ScanLine Hand-Held Scanner
Products are each respectively licensed under Article 3 and
royalty-bearing under Article 5 hereunder, and that the
Prepayment made shall be allocated to the royalty due under
Article 5 based upon any sales of such products in the period
January 1, 1996 through June 30, 1996.
7.2 Royalty Reports. Royalty reports of each of the
parties shall be made quarterly beginning within
45 days after the end of each calendar quarter
setting forth a computation of net royalty payable
for such quarter, including a list of unit sales
of Royalty Bearing METROLOGIC Products by model
number prepared by METROLOGIC, and a list of unit
sales of Royalty Bearing SYMBOL Products by model
number prepared by SYMBOL, and with such royalty
reports, each of the Parties shall pay the royalty
payment amounts due under this Agreement. In the
event SYMBOL manufactures and sells One Way RF
Scanner Products, SYMBOL shall report the unit
volume of such products within thirty (30) days
after the end of each calendar quarter to enable
METROLOGIC to compute the royalty payable under
Section 5.1(2) hereunder. Such reports shall be
held confidential by each of the Parties
respectively and shall be used solely for the
purpose of this agreement. Net royalty payments
shall be made in US dollars. In the event a
product is sold for a currency other than U.S.
dollars, the Net Sales Value of such products so
sold shall be converted into the equivalent in
U.S. dollars at: (i) the average of the
telegraphic transfer selling and buying rates for
U.S. dollars as of the last day in the reporting
period published by a leading commercial bank in
New York, New York; or (ii) if there are no
applicable rates so published, then the rate
applicable to the transfer of funds arising from
the transaction established by the exchange
control authorities of the country of which such
funds are the national currency.
7.3 Royalty Reports to METROLOGIC. Royalty reports to
METROLOGIC made by SYMBOL shall include the
following:
(1) A current list of Elected METROLOGIC Patent
Families in a tabular format indicating the
sequence of royalty rates [ ] [ ] for each elected
family as of the date of report.
<PAGE>
(2) A current list of Royalty Bearing SYMBOL
Products, and for each product, a list of
the elected METROLOGIC Patent Families
applicable to such product; based upon such
tabulation , a computation and listing of
the applicable royalty rate for
each product.
(3) The total Net Sales of each Royalty Bearing
SYMBOL Product during the reporting period;
the royalty rates, and the royalty payable
to METROLOGIC for each respective product.
7.4 Accrual. In any fiscal quarter for which royalties are
payable, royalties shall accrue at the date of the invoice or
transfer of a royalty bearing product.
7.5 Accounting Records. In connection with such
royalty payments and related compliance with terms
and conditions of this Agreement, the sales and
accounting records of each of the Parties,
respectively, shall be available for inspection by
an independent public accountant firm (the "Audit
Firm") selected from the ten largest U.S.
accounting firms which is not retained by either
Party for their general accounting and audit. Such
firm shall be mutually selected and appointed by
each Party's own public accounting firm within
thirty (30) days after request of a Party hereto.
In the event both accounting firms are unable to
agree on an Audit Firm, or one Party or its
accounting firm fails to propose an Audit Firm
within the thirty day period, the first name
proposed by either party meeting the
qualifications set forth above shall be the Audit
Firm. Such firm shall conduct their audit during
usual business hours and upon reasonable notice
and not more often than once per year for the
purpose of verifying the accuracy of such reports
and compliance with the Agreement; provided,
however, that such Audit Firm shall not transmit
to the Party requesting the audit any confidential
information, including, without limitation,
customer identities in connection with such
inspection.
7.5 Late Payments. Should any Party fail to pay any royalty due
within the time period such payments become due, it shall pay
the other Party interest on such delinquent payment at the
rate of one and one-half percent (1.5%) per month, compounded
monthly, from the date such payment was due.
7.6 Audit. In the event the actual royalty payments
due as determined by an audit by such independent
public accountants exceed by more than five (5%)
percent the royalty payment reported by a Party
pursuant to Section 7.1 with respect to any
reporting period covered by such audit, the
reporting Party shall reimburse the other Party
for the professional fees, costs and expenses of
the independent public accountants in conducting
such audit. Such reimbursement shall be made upon
completion of such audit within thirty (30) days
of presentation of an invoice for such
reimbursement together with the audit report that
identifies the shortfall in royalty payments. Each
Party otherwise bears the expense of the audit.
<PAGE>
7.7 Royalty Credits. In the event during the term of
this Agreement METROLOGIC enters into a license
agreement with Olympus Optical Co., Ltd.
("Olympus") for a license under the Japanese
equivalent of the licensed SYMBOL Patents (the
"Japanese Patents") in connection with the
manufacture, use, or sale of METROLOGIC products
in Japan covered by such Japanese Patents, and
pays to Olympus a royalty for the license of such
patents in any reporting period during the term of
this Agreement, then to the extent that METROLOGIC
has paid to SYMBOL a royalty under any of Sections
5.3 through 5.7 inclusive on the identical units
of METROLOGIC products for which METROLOGIC has
paid a royalty to Olympus, METROLOGIC may take a
credit in U.S. dollars in that reporting period
for the amount of royalty paid to Olympus
(converted into U.S. dollars, if paid in a
currency other than U.S. dollars at the exchange
rate on the date of payment), and apply such
credit against any sum due to SYMBOL for royalties
payable under this Agreement.
ARTICLE 8 - MARKING PURSUANT TO 35 USC 287
8.1 METROLOGIC Products. METROLOGIC shall mark its
products with the SYMBOL patent numbers applicable
thereto and licensed hereunder, pursuant to the
provisions of 35 USC 287, with the marking "See
Reference Manual for Patent Coverage" (or a
substantially similar statement) on the product,
and shall provide the inclusion of the list of
patents set forth in the Reference Manual Patent
Listing as set forth in Exhibit D-1 hereof (and
supplemental amendments thereto provided to
METROLOGIC from time to time by SYMBOL as new
patents includable in such list issue or are
granted) in the applicable product reference
manuals of METROLOGIC, shall be deemed sufficient
for the purposes of this Section 8.1.
8.2 SYMBOL Products. SYMBOL shall mark its products
with the METROLOGIC patent numbers applicable
thereto and licensed hereunder, pursuant to the
provisions of 35 USC 287 with the marking "See
Reference Guide for Patent Coverage" (or a
substantially similar statement) and the inclusion
of the patent numbers as set forth in Exhibit D-2
hereof (and supplemental amendments thereto
provided to SYMBOL from time to time by METROLOGIC
as new patents includable in such list issue or
are granted) and as notified to SYMBOL in writing
by METROLOGIC shall be deemed sufficient for the
purposes of this Section 8.2.
<PAGE>
ARTICLE 9 - COOPERATION: METROLOGIC PRODUCTS
Overview
1. This Article 9, consisting of Parts I, and II relates to the evaluation by
SYMBOL of products of METROLOGIC to provide a procedure for modification and
resolution of potential patent infringement issues.
2. Part I of this Article relates to the evaluation of changes, improvements, or
modifications to products represented by an Escrowed Specimen. Part II of this
Article relates to New METROLOGIC Products.
PART I - METROLOGIC MODIFIED LICENSED PRODUCTS
Overview of Part I.
This Part I relates to the evaluation of Products of
METROLOGIC which are changes, improvements, or modifications
to a product represented by an Escrowed Specimen enable the
parties to learn whether they require any license required
under a SYMBOL Patent, including establishing a mechanism
(binding arbitration) to have an objective, third party
determination made pertaining to infringement of identified
SYMBOL patents by the METROLOGIC Product to determine the
rights and obligations of the Parties with respect to sales of
the METROLOGIC Modified Licensed Product.
9.1 Evaluation of "Prequalified" METROLOGIC Modified
Licensed Product. At any time during the term of
this Agreement, METROLOGIC shall have the right at
its option to submit a written request, executed
by a corporate officer of METROLOGIC making
reference to this Section 9.1 (i.e. an Article 9
Notification) together with a Product Evaluation
Package (the "PEP") of a METROLOGIC Modified
Licensed Product (the "MLP") to SYMBOL for
evaluation to determine whether the change,
improvement or modification to the product (the
"Modification") represented by the Escrowed
Specimen requires (i) a license under any existing
SYMBOL patent; or (ii) may require a license under
a SYMBOL patent that may issue at some future time
based upon a then pending patent application.
Within sixty (60) days from the date of receipt of
such PEP, SYMBOL shall advise METROLOGIC in
writing whether:
(A) as a result of the Modification, SYMBOL identifies
and asserts, any one or more of following grounds
(1), (2), or (3) below:
(1) the MLP infringes specifically identified
claims of a SYMBOL patent (the "Identified
SYMBOL Patent") that are not infringed by
the corresponding Escrowed Specimen (i.e.,
the Modification is an Infringing
Modification) (such assertion being
hereinafter referred to as a "Type 1
Ground"); or
(2) the MLP is not covered by a METROLOGIC
Scanner Product License that covers the
corresponding Escrowed Specimen (e.g., one
or more of the limitations of the definition
of the Licensed METROLOGIC Product that were
satisfied by the Escrowed Specimen are not
satisfied by the MLP) (such assertion being
hereinafter referred to as a "Type 2
Ground"); or
(3) the application or use of the MLP is not
covered by a METROLOGIC Scanner Product
License that covers the application or use
of the corresponding Escrowed Specimen (such
assertion being hereinafter referred to as a
"Type 3 Ground"); or
<PAGE>
(B) as a result of the Modification, no existing
SYMBOL patent (i.e., a patent having issued or
been granted as of the date of Notification as
defined in Section 9.2.1) is infringed by the MLP
(i.e., the Modification is a Non- Infringing
Modification), but a SYMBOL patent may issue at
some future time based upon a then pending SYMBOL
patent application (the "Pending SYMBOL Patent
Application") which patent would contain claims
that would be infringed by the MLP, but such
claims would not be infringed by the corresponding
Escrowed Specimen (i.e., the Modification is an
Infringing Modification) or the MLP is not covered
by a METROLOGIC Scanner Product License,
identifying the Serial No. or Nos. of such patent
application; or
(C) the Modification is de minimus (i.e., the
Modification is an Infringing Modification but
SYMBOL elects not to treat it as an Infringing
Modification under either A or B above and waives
its right to bring a cause of action against
METROLOGIC for such Infringing Modification), or
no existing SYMBOL patent is infringed as a result
of the Modification, and no pending SYMBOL patent
application is deemed applicable to the subject
matter disclosed in the PEP pertaining to the
change, improvement or modification in such MLP.
If SYMBOL does not respond within the sixty (60) day period,
unless mutually extended by the Parties, at the end of such
period, it shall be deemed that SYMBOL's response to
METROLOGIC's submission is option "C" set forth above. Any
determination "A", "B" or "C" made by SYMBOL under this
Section 9.1 shall be based solely on the technical contents
disclosed in the PEP, and shall not constitute a waiver of any
rights SYMBOL may have to assert any SYMBOL patent right
against technology that may be present in the MLP but is not
disclosed in the PEP.
9.2 Warning Notification: "Nonqualified METROLOGIC
Modified Licensed Products" SYMBOL also shall have
the right at any time during the term of this
Agreement to apprise METROLOGIC in writing, signed
by a corporate officer of SYMBOL making reference
to this Section 9.2 (i.e. an Article 9
Notification), that a MLP which it may become
aware of either directly from METROLOGIC or from
another source is not covered by a METROLOGIC
Scanner Product License granted in Article 3
hereunder and thus requires (A) a license under
one or more existing unexpired SYMBOL patent; or
(B) may require a license under a SYMBOL patent
that may issue at some future time based upon a
then pending patent application.
<PAGE>
9.2.1 Response to "A" In the event SYMBOL notifies
METROLOGIC under provision (A) in Section 9.1 or
Section 9.2 above (the "Notification"), METROLOGIC
shall have six (6) months from the date of such
Notification (the "Six Month Period") to: (i)
remove the change, improvement or modification
from the MLP which results in the Infringing
Modification, and certify in writing (the
"Certification") to SYMBOL that such product
feature has been removed from the MLP and all
METROLOGIC products; or (ii) commence a binding
arbitration proceeding under the provisions of
Article 16 to conclusively determine solely
whether (a) the Modification is an Infringing
Modification, or (b) the Modification results in a
MLP not covered by a METROLOGIC Scanner Product
License granted under Article 3, and therefore an
affirmative determination of either (a) or (b)
shall result in a finding by the arbitrator that
the MLP is outside the scope of the METROLOGIC
Scanner Product License and hence not licensed
under this Agreement; or (iii) at SYMBOL's option,
negotiate and execute a license agreement with
SYMBOL under the Identified SYMBOL Patent,
including, optionally, a private label arrangement
selling such product to SYMBOL. At any time after
sixty (60) days after the date of the
Notification, SYMBOL shall also have the right to
commence a binding arbitration proceeding under
Article 16 to conclusively determine whether (a)
the Modification is an Infringing Modification, or
(b) the Modification results in a MLP not covered
by any METROLOGIC Scanner Product License under
Article 3 and therefore an affirmative
determination of either (a) or (b) shall result in
a finding by the arbitrator that the MLP is
outside the scope of the METROLOGIC Scanner
Product License and hence not licensed under this
Agreement. The determination of the arbitrator
shall be made using the Instructions for
Arbitrator set forth in Section 16, and such
arbitral determination shall be thereafter binding
on the Parties. After the end of the Six Month
Period, each Party's right to commence arbitration
proceedings shall lapse.
9.2.1.1 SYMBOL Waiver of Damages. In the event METROLOGIC
elects response (i) in Section 9.2.1 above, upon
the timely receipt of such Certification, and
conditional upon the accuracy thereof, SYMBOL
shall waive any claim for damages SYMBOL may have
against METROLOGIC for infringement of the
Identified SYMBOL Patent with respect solely to
the MLP for a period of time up to the date of
Certification, not to exceed six months after the
date of Notification.
<PAGE>
9.2.1.2 METROLOGIC Elects Binding Arbitration. In the
event METROLOGIC elects response (ii) in Section
9.2.1 above, and an arbitration proceeding is
conducted, and the proceeding results in a
decision (the "Decision") that holds that (a) the
Modification of the MLP is an Infringing
Modification or (b) the Modification results in an
MLP not covered by a METROLOGIC Scanner Product
License, then METROLOGIC shall have thirty (30)
days after the date of the Decision to remove such
Modification from the MLP, and certify in writing
to SYMBOL that such Modification has been removed
from all METROLOGIC products (the
"Certification"). Upon receipt of such
Certification, and conditional upon the accuracy
thereof, SYMBOL shall waive any claim for damages
SYMBOL may have against METROLOGIC for
infringement of the Identified SYMBOL Patent by
the MLP for a period of time terminating at a date
sixty (60) days after the date of the Decision,
but in no event extending for a period of time
more than six (6) months after the date of
Notification. Each Party shall bear its own legal
costs and expenses in connection with such
arbitration
9.2.1.3 SYMBOL Right to Legal Action. In the event SYMBOL
notifies METROLOGIC under provision (A) in Section
9.1 or Section 9.2, SYMBOL shall be precluded from
bringing any legal action against METROLOGIC to
enjoin the manufacture, have manufactured, use, or
sale of the MLP until (i) the expiration of the
six (6) month period after the date of
Notification in the event arbitration has not been
elected, or (ii) the date of the Decision in the
event arbitration has been elected within six (6)
months after Notification.
9.2.1.4 METROLOGIC Right to Legal Action. In the event
SYMBOL notifies METROLOGIC under provision (A) in
Section 9.1 or Section 9.2, METROLOGIC shall be
precluded from bringing any legal action to
challenge the validity of the Identified SYMBOL
Patent until (i) the expiration of the six (6)
month period after the date of Notification in the
event arbitration has not been elected, or (ii)
the date of the Decision in the event arbitration
has been elected within six (6) months after
Notification.
9.2.2 Response to "B". In the event SYMBOL notifies
METROLOGIC under provision B in Section 9.1 or
Section 9.2 above, and at some time thereafter a
patent (the "Issued Patent") issues or is granted
to SYMBOL during the twelve (12) month period
after the later of (i) the date of Notification to
METROLOGIC by SYMBOL under Section 9.2.1 above, or
(ii) the date when METROLOGIC has shipped a
cumulative number of five hundred (500) units of
the MLP to customers and SYMBOL notifies
METROLOGIC that certain identified claims of the
Issued Patent are infringed, METROLOGIC shall then
during the period six (6) months from the date
such Issued Patent issues (the "Post-Issue
Period") have to either (a) remove the
Modification from the MLP that results in an
Infringing Modification or the MLP being not
covered by a METROLOGIC Scanner Product License,
or cease the infringing activity, application, or
use relating to the MLP which results in the MLP
being not covered by a METROLOGIC Scanner Product
License granted in Article 3 hereunder and certify
in writing (the "Certification") that such product
feature has been removed from all METROLOGIC
Products and/or that the infringing activity,
application, or use relating to the MLP has
ceased, and that no further manufacture or sale of
products shall be made with such product feature
subsequent to such Certification; or (b) commence
a binding arbitration proceeding under the
provisions of Article 16 whereby the
<PAGE>
Arbitrator shall use the Instructions for Arbitrator
set forth in Section 16.7.2 to determine whether as a
result of the Modification the MLP infringes the
Issued Patent; or (c) at SYMBOL's option, negotiate
and execute a mutually agreeable license agreement
under the Issued Patent. At any time subsequent to
SYMBOL becoming aware of the MLP or the receipt of a
PEP from METROLOGIC, SYMBOL shall also have the right
to commence an arbitration proceeding under Article
16 whereby the Arbitrator shall use the Instructions
for Arbitrator set forth in Section 16.7.2 to
determine whether as a result of the Modification the
MLP infringes the Issued Patent.
9.2.2.1 SYMBOL Waiver of Damages. In the event
METROLOGIC elects response (a) in Section
9.2.2. above, SYMBOL shall waive any claim
for damages it may have for infringement of
the Issued Patent with respect solely to the
MLP for a period of time up to the date of
Certification, not to exceed the date at the
expiration of the Post-Issue Period.
9.2.2.2 License Under Subsequently Granted Patents. In the
event (i) SYMBOL notifies METROLOGIC under
provision "B" in Section 9.1 above, and (ii) no
SYMBOL patent issues from said SYMBOL patent
application or is granted to SYMBOL on the pending
patent application during the twelve (12) month
period after the later of (a) the date of
Notification to METROLOGIC by SYMBOL under the
Section 9.2.1 above, or (b) the date when
METROLOGIC has shipped a cumulative number of five
hundred (500) units of the MLP to customers, and
(iii) at some time thereafter a patent or patents
issue (except for Japanese patents) on the Pending
SYMBOL Patent Application (the "Subsequently
Granted SYMBOL Patents"), then, except as provided
in Section 9.5 below, SYMBOL shall grant to
METROLOGIC a non-exclusive license in all
countries except for Japan, subject to the terms
of this Agreement, to make (have made in
accordance with Section 3.9), use and sell only
the MLP as described in the PEP. The royalty due
under such license shall be paid to SYMBOL
pursuant to Article 5 for the applicable Royalty
Bearing METROLOGIC Product.
9.2.3 Response "C". In the event SYMBOL notifies
METROLOGIC under provision "C" in Section 9.1
above, then during the term of this Agreement, and
subject to the terms and conditions herein, SYMBOL
hereby covenants not to sue METROLOGIC for any
claim of infringement of any SYMBOL patent,
whether then or thereafter in existence, by the
MLP to the extent that the relevant features of
the MLP are described in the PEP evaluated by
SYMBOL pursuant to Section 9.1. Such covenant not
to sue shall not be deemed in lieu of any license
grant or immunization or non-assertion provision
under this Agreement, nor shall such covenant
affect the payment of royalties due under any such
license in any way.
<PAGE>
9.3 Royalty for MLP Licensed Under 9.2.2.2. To the
extent that a license is granted under Section
9.2.2.2 above, and in the immediately preceding
four quarters prior to the end of the twelve (12)
month period provided in Section 9.2.2.2 SYMBOL
has accrued or paid royalties due to METROLOGIC
less than $1.5 million, then the royalty due on
the MLP licensed under Section 9.2.2.2 shall be
paid to SYMBOL by METROLOGIC pursuant to the
classification of the MLP under Article 5.
9.4 Negotiated Royalty for License. In the event that
SYMBOL (i) notifies METROLOGIC under provision "B"
in Section 9.1 above, and (ii) no patent issues
from said pending patent application or is granted
to SYMBOL during the twelve (12) month period
provided in Section 9.2.2.2., and (iii) in the
immediately preceding four quarters prior to the
end of such twelve (12) month period SYMBOL has
accrued or paid royalties due to METROLOGIC equal
to or exceeding the maximum royalty for that year
pursuant to Section 6.4.4 and (iv) a Subsequently
Granted SYMBOL Patent issues on said pending
patent application, then in addition to the
royalties payable to SYMBOL by METROLOGIC under
Article 5 on the Royalty Bearing METROLOGIC
Product, METROLOGIC and SYMBOL shall negotiate a
mutually agreeable royalty for the rights in the
license granted under Section 9.2.2.2 [ ]
METROLOGIC's [ ] on the applicable product for the
license under the Subsequently Granted Patents
commencing upon the issuance thereof as provided
pursuant to Section 9.2.2.2, and such royalty
shall be paid to SYMBOL pursuant to Article 7.
9.5 Current Consideration for License. In the event a
license is granted to METROLOGIC under Section
9.2.2.2. above, and a license has been granted to
SYMBOL under Article 4 hereinabove for which
SYMBOL is subject to making royalty payments under
Article 6, then effective on the date of the
license granted to METROLOGIC under Section
9.2.2.2., the royalties due for the license under
any and only one of the METROLOGIC Patent
Families, designated by SYMBOL (the "Designated
METROLOGIC Patent Family"), shall be waived by
METROLOGIC during the period of the license grant
under Section 9.2.2.2. In the event METROLOGIC
elects to terminate the license granted under
Section 9.2.2.2. because it no longer is
manufacturing, using, selling or reconstructing
the products to which the license granted under
Section 9.2.2.2 pertains, then METROLOGIC shall
notify SYMBOL in writing, and commencing thirty
(30) days after the date of such notification,
SYMBOL shall resume accruing and paying royalties
under the provisions of Article 6 hereunder on the
Designated METROLOGIC Patent Family. The normal
field service and repair of customer- owned
products shall not be deemed "reconstructing" the
products under the preceding sentence.
9.6 Deferred Consideration to SYMBOL for License. In
the event a license is granted to METROLOGIC under
Section 9.2.2.2. above, and no license to SYMBOL
under Article 4 hereinabove is outstanding and in
effect and for which SYMBOL is then currently
subject to making royalty payments under Article
6, then effective on the date of the license
granted to METROLOGIC under Section 9.2.2.2.,
SYMBOL shall commence the accrual of a temporal
credit for the period of time that the license
granted to METROLOGIC under Section 9.2.2.2. is in
effect. Such temporal credit may be applied by
SYMBOL at any time after it elects to license one
of the METROLOGIC Patent Families, and upon such
election, such temporal credit shall irrevocably
waive for the period of time corresponding to
length of the temporal credit the royalties due
for the license granted to SYMBOL under the
Elected METROLOGIC Patent Family.
<PAGE>
9.7 Condition for License Grant for Publicly Disclosed
Inventions. Notwithstanding the foregoing Section
9.2.2.2., no license shall be granted to
METROLOGIC with respect to a SYMBOL patent that
claims an invention that was publicly disclosed
(e.g. through product announcement, scientific or
journal articles, or published patent
applications) prior to (i) the actual reduction to
practice of the claimed invention such as by a
working prototype or the construction of a working
prototype of a METROLOGIC device, subassembly,
software program, or product that is reasonably
documented by a written record which is dated and
witnessed, or (ii) by the constructive reduction
to practice of the invention at METROLOGIC (e.g.,
the filing of a patent application by METROLOGIC).
PART II - METROLOGIC NEW PRODUCTS
Overview of Part II.
This Part II relates to the optional evaluation of New METROLOGIC
Products to enable the Parties to learn whether such products require
any license under a SYMBOL patent, including establishing a mechanism
(non-binding arbitration) to have an objective, third party
determination made pertaining to infringement of identified SYMBOL
patents by the New METROLOGIC Product to assist the Parties in their
negotiation to either license or develop an OEM arrangement.
9.8 Optional Evaluation of New METROLOGIC Product. At
any time during the term of this Agreement,
METROLOGIC shall have the right at its option to
submit a written request, executed by a corporate
officer of METROLOGIC making reference to this
Section 9.8 (i.e. an Article 9 Notification),
together with a Technical Data Package (the "TDP")
of a New METROLOGIC Product (the "NMP") to SYMBOL
for evaluation to determine whether the NMP
requires (i) a license under any existing SYMBOL
patent; or (ii) may require a license under a
SYMBOL patent that may issue at some future time
based upon a then pending patent application.
Within sixty (60) days from the date of receipt of
such TDP, SYMBOL shall at its sole discretion
advise METROLOGIC in writing whether (A) an
existing SYMBOL patent is infringed, identifying
the patent number (the "Identified SYMBOL Patent")
and claims of such SYMBOL patent; or (B) no
existing SYMBOL patent is infringed, but a SYMBOL
patent may issue at some future time based upon a
then pending SYMBOL patent application (the
"Pending SYMBOL Patent Application"), identifying
the Serial No. or Nos. of such patent application;
or (C) that no existing SYMBOL patent is infringed
and no pending SYMBOL patent application is deemed
applicable to such MLP.
9.9 Warning Notification: "Nonqualified METROLOGIC New
Products" SYMBOL also shall have the right at any
time during the term of this Agreement to apprise
METROLOGIC in writing, signed by a corporate
officer of SYMBOL making reference to this Section
9.9 (i.e. an Article 9 Notification), that a NMP
which it may become aware of either directly from
METROLOGIC or from another source requires (A) a
license under any existing SYMBOL patent; or (B)
may require a license under a SYMBOL patent that
may issue at some future time based upon a then
pending patent application.
9.9.1 Response to "A" In the event SYMBOL notifies
METROLOGIC under provision (A) in Section 9.8 or
Section 9.9 above (the "Notification"), METROLOGIC
shall have two (2) months from the date of such
Notification to: (i) remove such product feature
from the NMP, and certify in writing to SYMBOL
that such product feature has been removed from
all METROLOGIC products; or (ii) commence a
non-binding arbitration proceeding under the
provisions of Article 16 to obtain an advisory
opinion whether or not the Identified SYMBOL
Patent is infringed by the NMP; or (iii) at
SYMBOL's option, negotiate and execute a license
agreement with SYMBOL under the Identified SYMBOL
Patent, including, optionally, a private label
arrangement selling such product to SYMBOL.
<PAGE>
9.9.2 Response to "B". In the event SYMBOL notifies
METROLOGIC under provision B in Section 9.8 or
Section 9.9 above, and a patent (the "Issued
Patent") issues or is granted to SYMBOL during the
twelve (12) month period after the later of (i)
the date of notification to METROLOGIC by SYMBOL
under provision B of Section 9.8 or 9.9 above, or
(ii) the date when METROLOGIC has shipped a
cumulative number of five hundred (500) units of
the MLP to customers, METROLOGIC shall then have
during the period six (6) months from the date
such Issued Patent issues (the "Six Month Period")
to either (a) remove the infringing product
feature from the NMP, and certify in writing (the
"Certification") that such product feature has
been removed from all METROLOGIC Products and that
no further manufacture or sale of products shall
be made with such infringing product feature
subsequent to such certification; or (b) commence
a non-binding arbitration proceeding under the
provisions of Article 16 to obtain an advisory
opinion if the Issued Patent is infringed, or (c)
at SYMBOL's option, negotiate and execute a
mutually agreeable license agreement under the
Issued Patent.
9.9.3 Non-Binding Arbitration Expense. In the event
METROLOGIC elects to bring a non-binding
arbitration under the provisions of this Article
9.9, and the arbitrator renders a decision that
finds infringement of the Identified SYMBOL Patent
or the Issued Patent by the NMP, and the NMP is
not covered by the METROLOGIC Scanner Product
license granted under Article 3, then METROLOGIC
shall pay SYMBOL's out of pocket costs and
expenses, including outside counsel legal fees,
but excluding any internal salary allocations or
corporate overhead, in connection with the
arbitration proceeding.
<PAGE>
ARTICLE 10 - COOPERATION: SYMBOL PRODUCTS
Overview
1. This Article 10, consisting of Parts I and II relates to the evaluation by
METROLOGIC of products of SYMBOL to provide a procedure for modification and
resolution of potential patent infringement issues.
2. Part I of this Article relates to the evaluation of changes, improvements, or
modifications to products represented by an Escrowed Specimen. Part II of this
Article relates to new SYMBOL products. Part III of this Article relates to the
election of a license by SYMBOL for a new SYMBOL product, and the optional right
of METROLOGIC to market that product pursuant to procedures set forth in Article
11.
3. It is noted that the Parties contemplate that as a normal and customary
business practice, SYMBOL may, at its option, from time to time, discuss with
METROLOGIC the development and release of proposed new SYMBOL Products, or from
time to time discuss then currently existing commercially available SYMBOL
Products and provide specimens of such products for examination, for the purpose
of ascertaining and/or soliciting METROLOGIC's interest in purchasing and
reselling such products.
4. In order that there be no misunderstanding by either Party as a result of the
discussion noted in the preceding paragraph , the provisions in this Article 10
expressly provide that a disclosure of a new or improved SYMBOL product pursuant
to Article 10 (i.e. a disclosure that results in imposing rights and obligations
on each Party under Article 10) expressly requires written notification and
reference to Article 10 of this Agreement and executed by a corporate officer of
the Party giving the notification (hereinafter referred to as an "Article 10
Notification"). Unless SYMBOL expressly states in writing in its disclosure of a
SYMBOL Product to METROLOGIC that such disclosure is an Article 10 Notification
, such disclosure of a new SYMBOL product shall not invoke the procedures of any
Part of this Article 10.
PART I - SYMBOL MODIFIED ESCROWED PRODUCTS
Overview of Part I.
This Part I (consisting of Sections 10.1 through 10.3) relates
to the evaluation of newly released products of SYMBOL that
are modifications of SYMBOL Escrowed Products to enable the
Parties to learn whether as a result of the modification
SYMBOL may require a license under a METROLOGIC patent,
including establishing a mechanism (binding arbitration) to
have an objective, third party determination made pertaining
to infringement of METROLOGIC identified patents by the SYMBOL
product to determine the rights and obligations of the Parties
with respect to sales of the SYMBOL Modified Escrowed Product.
10.1 Evaluation of "Prequalified" SYMBOL Modified
Escrowed Product. At any time during the term of
this Agreement, SYMBOL shall have the right at its
option to submit a written notice, executed by a
corporate officer of SYMBOL making reference to
this Section 10.1 (i.e. an Article 10
Notification) a Product Evaluation Package (the
"PEP") of a SYMBOL Modified Escrowed Product (the
"SMLP") to METROLOGIC for evaluation to determine
whether the change, improvement or modification to
a product represented by the Escrowed Specimen
(the "Modification") requires (i) a license under
any existing METROLOGIC patent; or (ii) may
require a license under a METROLOGIC patent that
may issue at some future time based upon a then
pending patent application. Within sixty (60) days
from the date of receipt of such PEP, METROLOGIC
shall advise SYMBOL in writing whether
(A) as a result of the Modification, METROLOGIC
identifies and asserts that the SMLP infringes
specifically identified claims of a METROLOGIC patent
(the "Identified METROLOGIC Patent") that are not
infringed by the corresponding Escrowed Specimen,
identifies the patent number and claims of the
Identified METROLOGIC patent; or
<PAGE>
(B) as a result of the Modification, no existing
METROLOGIC patent is infringed by the SMLP (i.e.,
the Modification is a Non-Infringing
Modification), but a METROLOGIC patent may issue
at some future time based upon a then pending
METROLOGIC patent application (the "Pending
METROLOGIC Patent Application") which patent would
be infringed by the SMLP that is not infringed by
the corresponding Escrowed Specimen (i.e., the
Modification is an Infringing Modification) and is
not covered by an Elected METROLOGIC Patent Family
licensed, identifying the Serial No. or Nos. of
such patent application; or
(C) that the Modification is de minimus (i.e., the
Modification is an Infringing Modification but
METROLOGIC elects not to treat it as an Infringing
Modification under either A or B above and waives
its rights to bring a cause of action against
SYMBOL for such Infringing Modification), or no
existing METROLOGIC patent is infringed as a
result of the Modification, and no pending
METROLOGIC patent application is deemed applicable
to the subject matter disclosed in the PEP
pertaining to the change, improvement or
modification in such SMLP.
If METROLOGIC does not respond within the sixty (60)
day period, unless mutually extended by the Parties,
at the end of such period, it shall be deemed that
METROLOGIC's response to SYMBOL's submission is
option "C" set forth above. Any election by
METROLOGIC under this Section 10.1 shall be limited
solely to the technical contents disclosed in the
PEP, and shall not constitute a waiver of any rights
METROLOGIC may have to assert any METROLOGIC patent
right against technology that may be present in the
SMLP but is not disclosed in the PEP.
10.2 Warning Notification: "Nonqualified SYMBOL
Modified Licensed Products" METROLOGIC also shall
have the right at any time during the term of this
Agreement to apprise SYMBOL in writing, signed by
a corporate officer of METROLOGIC, making
reference to this Section 10.2 (i.e. an Article 10
Notification) that a SMLP which it may become
aware of either directly from SYMBOL or from
another source is not covered either by an
immunity granted under Article 2 or an Elected
Licensable METROLOGIC Patent Family License
granted in Article 4 hereunder and thus requires
(A) a license under any existing METROLOGIC patent
not in any Elected Licensable METROLOGIC Patent
Family; or (B) may require a license under a
METROLOGIC patent (not in any Elected Licensable
METROLOGIC Patent Family) that may issue at some
future time based upon a then pending patent
application.
<PAGE>
10.2.1 Response to "A" In the event METROLOGIC notifies
SYMBOL under provision (A) in Section 10.1 or
Section 10.2 above (the "Notification"), SYMBOL
shall have six (6) months from the date of such
Notification (the "Six Month Period") to: (i)
remove the change, improvement or modification in
the SMLP which results in the Infringing
Modification, and certify in writing (the
"Certification") to METROLOGIC that such product
feature has been removed from the SMLP and all
SYMBOL products; or (ii) commence an arbitration
proceeding under the provisions of Article 16 to
conclusively determine solely whether or not the
Modification is an Infringing Modification, and
the SMLP is not covered by an Elected Licensable
METROLOGIC Patent Family license granted
hereunder, and therefore the determination of the
arbitrator shall be made using the Instructions
for Arbitrator set forth in Section 16, and such
arbitral determination shall be thereafter binding
on the Parties; or (iii) at SYMBOL's option, elect
a license under the provisions of Article 4
hereunder under a Licensed METROLOGIC Patent
Family including Identified METROLOGIC Patent. At
any time after sixty (60) days after the date of
the Notification, METROLOGIC shall also have the
right to commence an arbitration proceeding under
Article 16 to conclusively determine whether or
not the Modification is an Infringing Modification
or results in a SMLP not covered by any Elected
Licensable METROLOGIC Patent Family license and
therefore results in the infringement of the
Identified METROLOGIC Patent by the SMLP, such
arbitral determination being thereafter binding on
the Parties. After the end of the Six Month
Period, each Party's right to commence an
arbitration proceeding shall lapse.
10.2.1.1 METROLOGIC Waiver of Damages. In the event SYMBOL
elects response (i) in Section 10.2.1 above, upon
the timely receipt of such Certification, and
conditional upon the accuracy thereof, METROLOGIC
shall waive any claim for damages it may have for
infringement of the Identified METROLOGIC Patent
with respect solely to the SMLP for a period of
time up to the date of Certification, not to
exceed six months after the date of Notification.
10.2.1.2 SYMBOL Elects Binding Arbitration. In the event
SYMBOL elects response (ii) in Section 10.2.1
above, and an arbitration proceeding is conducted,
and the proceeding results in a decision (the
"Decision") that holds that (a) the Modification
not covered by an Elected Licensable METROLOGIC
Patent Family license infringes the Identified
METROLOGIC Patent and results in an SMLP not
covered by an Elected Licensable METROLOGIC Patent
Family license, then SYMBOL shall have thirty (30)
days after the date of the Decision to remove such
Modification from the SMLP, and certify in writing
to METROLOGIC that such Modification has been
removed from all SYMBOL products, or SYMBOL may
exercise an option to license a METROLOGIC Patent
Family under Article 4, if applicable.. Upon
receipt of such Certification, and conditional
upon the accuracy thereof, METROLOGIC shall waive
any claim for damages it may have for infringement
of the Identified METROLOGIC Patent by the SMLP
for a period of time terminating at a date sixty
(60) days after the date of the Decision, but in
no event extending the period of time more than
six (6) months after the date of Notification.
Each Party shall bear their own legal costs and
expenses in connection with such arbitration.
10.2.1.3 METROLOGIC Right to Legal Action. In the event
METROLOGIC notifies SYMBOL under provision (A) in
Section 10.1 or Section 10.2, METROLOGIC shall be
precluded from bringing any legal action against
SYMBOL to enjoin the manufacture, use, or sale of
the SMLP until (i) the expiration of the six (6)
month period after the date of Notification in the
event arbitration has not been elected, or (ii)
the date of the Decision, in the event arbitration
has been elected within six (6) months after
Notification.
<PAGE>
10.2.1.4 SYMBOL Right to Legal Action. In the event
METROLOGIC notifies SYMBOL under provision (A) in
Section 10.1 or Section 10.2, SYMBOL shall be
precluded from bringing any legal action to
challenge the validity of the Identified
METROLOGIC Patent until (i) the expiration of the
six (6) month period after the date of
Notification in the event arbitration has not been
elected, or (ii) the date of the Decision, in the
event arbitration has been elected within six (6)
months after Notification.
10.2.2 Response to "B". In the event METROLOGIC notifies SYMBOL
under provision B in Section 10.1 or Section 10.2 above, and
a patent (the "Issued Patent") issues or is granted to
METROLOGIC during the twelve (12) month period after the
later of (i) the date of Notification to SYMBOL by
METROLOGIC under Section 10.2.1 above, or (ii) the date when
SYMBOL has shipped a cumulative number of five hundred (500)
units of the SMLP to customers, SYMBOL shall then during the
period six (6) months from the date such Issued Patent
issues (the "Post-Issue Period") have to either (a) remove
the infringing Modification from the SMLP, and certify in
writing (the "Certification") that such product feature has
been removed from all SYMBOL Products and that no further
manufacture or sale of products shall be made with such
infringing product feature subsequent to such Certification;
or (b) commence an arbitration proceeding under the
provisions of Article 16 to determine if as a result of the
Modification the SMLP infringes the Issued Patent, with the
Arbitrator using the Instructions for Arbitrator set forth
in Section 16, or (c) at SYMBOL's option, elect a license
under the provisions of Article 4 hereunder under a
Licensable METROLOGIC Patent Family including the Issued
Patent. At any time subsequent to METROLOGIC becoming aware
of the SMLP or the receipt of a PEP from SYMBOL , METROLOGIC
shall also have the right to commence an arbitration
proceeding under Article 16 to determine if the SMLP does or
does not infringe the Issued Patent at any time commencing
sixty (60) days after METROLOGIC notifies SYMBOL writing
that the SMLP infringes an Issued Patent or receives the
PEP, whichever is earlier.
10.2.2.1 METROLOGIC Waiver of Damages. In the event
SYMBOL elects response (a) in Section
10.2.2. above, METROLOGIC shall waive any
claim for damages it may have for
infringement of the Issued Patent with
respect solely to the SMLP for a period of
time up to the date of Certification, not
to exceed the date at the expiration of
the Post Issue Period.
10.2.2.2 License Under Subsequently Granted Patents. In the
event METROLOGIC notifies SYMBOL under provision
"B" in Section 10.1 above, and no patent issues or
is granted to METROLOGIC during the twelve (12)
month period after the later of (i) the date of
Notification to SYMBOL by METROLOGIC under the
Section 10.1 above, or (ii) the date when SYMBOL
has shipped a cumulative number of five hundred
(500) units of the SMLP to customers, and a patent
or patents issue on the Pending METROLOGIC Patent
Applications (the "Subsequently Granted METROLOGIC
Patents"), then METROLOGIC shall grant to SYMBOL
under said Subsequently Granted METROLOGIC
Patents, a non-exclusive, worldwide license,
subject to the terms of this Agreement, to make,
have made, use and sell only the SMLP as described
in the PEP and only Non-Infringing Modification
thereto during the term of this Agreement. A
Subsequently Granted METROLOGIC Patent may be
identified by METROLOGIC under Section 10.1 for
SYMBOL products which are improvements, changes,
or modifications to an escrowed specimen.
<PAGE>
10.2.3 Response "C". In the event METROLOGIC notifies
SYMBOL under provision "C" in Section 10.1 above,
then during the term of this Agreement, and
subject to the terms and conditions herein,
METROLOGIC hereby covenants not to sue SYMBOL for
any claim of infringement of any METROLOGIC patent
whether then or thereafter in existence by the
SMLP to the extent the relevant features of the
SMLP are described in the PEP evaluated by
METROLOGIC pursuant to Section 10.1. Such covenant
not to sue shall not be deemed in lieu of any
license grant under this Agreement, nor shall such
covenant affect the payment of royalties due under
any such license in any way.
10.3 "No Copying" Condition for License Grant.
Notwithstanding the foregoing Section 10.2.2.2.,
no license shall be granted to SYMBOL with respect
to a METROLOGIC patent that claims an invention
that was publicly disclosed (through product
announcement, scientific or journal articles, or
published patent applications) prior to (i) the
actual reduction to practice of the claimed
invention by SYMBOL, or (ii) the constructive
reduction to practice of the invention, such as by
a working prototype or the construction of a
working prototype of a SYMBOL device, subassembly,
software program, or product that is reasonably
documented by a written record which is dated and
witnessed (e.g., the filing of a patent
application by METROLOGIC).
PART II - NEW PRODUCTS
Overview of Part II
This Part II (consisting of Sections 10.4 and 10.5) relates to the
optional evaluation of New Products of SYMBOL to enable the Parties to
learn whether SYMBOL may require license under a METROLOGIC patent,
including establishing a mechanism (non-binding arbitration) to have an
objective, third party determination made pertaining to infringement of
METROLOGIC identified patents by the SYMBOL New Product to assist the
Parties in their negotiation to either license or develop an OEM
arrangement.
10.4 Optional Evaluation of New SYMBOL Product. At any
time during the term of this Agreement, SYMBOL
shall have the right at its option to submit a
Product Evaluation Package (the "PEP") of new
SYMBOL products (the "NSP") to METROLOGIC for
evaluation to determine whether the NSP requires
(i) a license under any existing METROLOGIC
patent; or (ii) may require a license under a
METROLOGIC patent that may issue at some future
time based upon a then pending patent application.
Within sixty (60) days from the date of receipt of
such PEP, METROLOGIC shall at its sole discretion
advise SYMBOL in writing whether (A) an existing
METROLOGIC patent is infringed, identifying the
patent number (the "Identified METROLOGIC Patent")
of such METROLOGIC patent; or (B) no existing
METROLOGIC patent is infringed, but a METROLOGIC
patent may issue at some future time based upon a
then pending METROLOGIC patent application (the
"Pending METROLOGIC Patent Application"),
identifying the Serial No. or Nos. of such patent
application; or (C) no existing METROLOGIC patent
is infringed and no pending METROLOGIC patent
application is deemed applicable to such NSP.
10.5 Non-Binding Arbitration Expense. In the event
SYMBOL elects to bring a non-binding arbitration
under the provisions of this Article 10, and the
arbitrator renders a decision that finds
infringement of the Identified METROLOGIC Patent
or the Issued Patent by the NSP, and/or is not
immune under this Agreement from the assertion of
a METROLOGIC patent applicable thereto, then
SYMBOL shall pay METROLOGIC's out-of-pocket costs
and expenses, including outside counsel legal
fees, in connection with the arbitration
proceeding.
<PAGE>
ARTICLE 11 - PURCHASE OF METROLOGIC PURCHASABLE PRODUCTS ("THE
PURCHASE PROVISION")
Overview
1. This Article 11, consisting of Parts I, II and III, relates to the
purchase and sale arrangement of the following categories of METROLOGIC
products: (i) METROLOGIC Qualifying Products, (ii) Elected New
METROLOGIC Products, (iii) METROLOGIC Holographic Scanner Products,
(iv) Modified METROLOGIC Standard Products, and (v) SYMBOL Designed
Scanner Products. The products in categories (i) through (v) shall be
referred to as "METROLOGIC Purchasable Products."
2. Part I of this Article relates to the purchase and sale of products
in categories (i) and (iii) . Part II of this Article relates to the
purchase and sale of products in category (ii). Part III of this
Article relates to the purchase and sale of products in categories (iv)
and (v).
3. At SYMBOL's option, the products in (i) and (ii) may be "customized"
to meet SYMBOL requirements (such customized products being hereinafter
referred to as "Custom Qualifying Products" and "Custom Elected New
METROLOGIC Products " respectively) pursuant to Section 11.3.
"Customizing" relates to relatively minor modifications to a METROLOGIC
Standard Product to make it into a distinctive SYMBOL product, such as
the molding of the plastic housing of a METROLOGIC Standard Product
being custom colored to the standard SYMBOL color (e.g. Cash Register
White '95, Munsell 4.6 GY 7.43/0.5), or incorporating a proprietary
SYMBOL "Scanner Interface" (e.g. the Synapse (TM) interface), or other
distinctive packaging and labeling.
4. In response to a "Request for Quotation" to METROLOGIC, SYMBOL may
propose the "modification" of a METROLOGIC Standard Product to meet
certain specified customer requirements. Such "modifications", as
distinguished from simple "customization" as contemplated in the
immediately preceding paragraph, includes major changes to product
ergonomics such as the production of new molds for housings or other
parts (e.g. for adding a mechanical "trigger" switch on the housing),
or substantial changes to optics, laser assemblies, of photodetector
arrays. The procedure for such "Request for Quotation" is set forth in
Part III. Only by mutual agreement of the Parties on the respective
engineering design and development efforts to be undertaken by each of
the Parties, along with the production pricing of such products when
and if such products are manufactured by METROLOGIC and purchased by
SYMBOL from METROLOGIC, shall any obligation of either Party be
incurred under Part III.
PART I - PURCHASE OF METROLOGIC QUALIFYING PRODUCTS AND
METROLOGIC HOLOGRAPHIC SCANNING PRODUCTS
Overview of Part I.
This Part I of Article 11 relates to the purchase of METROLOGIC
Qualifying Products and METROLOGIC Holographic Scanning Products by
SYMBOL. This Part I of Article 11 shall hereinafter be referred to as
"Part I" or the "Part I Purchasing Provision".
11.1 Scope. METROLOGIC shall sell and deliver METROLOGIC Qualifying
Products and METROLOGIC Holographic Scanning Products to
SYMBOL and SYMBOL shall purchase and accept delivery of such
products in accordance with purchase order releases issued by
SYMBOL at the pricing schedule attached hereto as Exhibit B
and on the Terms and Conditions set forth herein and in
Exhibit C, which form a part of this Article 11.
11.2 Branding. SYMBOL shall specify the design and contents of the
product label including a "SYMBOL" logo or trademark, or
alternatively a private customer name or logo, on the label to
be applied to such product by METROLOGIC.
11.3 Design and Production of Custom Qualifying Products. During
the term of Part I of this Article 11, METROLOGIC shall design
Custom Qualifying Products for SYMBOL, and manufacture and
sell such products to SYMBOL in accordance with the pricing
schedule attached hereto as Exhibit B and the Terms and
Conditions set forth in Exhibit C
<PAGE>
11.4 Points of Contact. During the term of this Part I of Purchase
Provision of Article 11, each Party shall designate a single
"point of contact" for coordinating technical discussions and
transfer of information between the Parties. As of the
Execution Date, the point of contact for SYMBOL shall be Mr.
Altaf Mullah, and the point of contact for METROLOGIC shall be
Mr. Mark Schmidt.
11.5. Minimum Purchase Commitments.
11.5.1 Assuming METROLOGIC commences shipment
of Custom Interface Omnidirectional
Hand-Held Scanner Products in 1996 and
subject to the terms and conditions in
this Part I and in Exhibit C, SYMBOL is
required to purchase an aggregate amount
of at least [ ] each calendar year (the
"Minimum Purchase Commitment") during
the period beginning on January 1, 1997
and ending December 31, 1998 of any
combination of Custom Interface
Omnidirectional Hand-Held Scanner
Product, and/or METROLOGIC Triggerless
Omnidirectional Scanner Products.
11.5.2 If the Custom Interface Omnidirectional Scanner
Product (or substitute Custom METROLOGIC Qualifying
Product ordered by SYMBOL) is not yet available for
shipment beginning January 1, 1997, then the Minimum
Purchase Commitment of [ ] units thereof shall be
pro-rated based upon the date METROLOGIC commences
shipment of production units of such product to
SYMBOL after January 1 1997 and the 365 days in the
period from January 1, 1997 to December 31, 1997.
11.5.3 There shall be no minimum purchase requirement for
METROLOGIC Qualifying Product in 1996.
11.5.4 During each calendar year beginning on January 1,
1997 and ending December 31, 1998, the Minimum
Purchase Commitment by SYMBOL shall be no less than [
] units of Custom Interface Omnidirectional Scanner
Product and METROLOGIC Triggerless Omnidirectional
Hand-Held Scanner Product (and any combination of
other METROLOGIC product mutually agreed by the
Parties as substitutes therefor)
11.5.5 In the event SYMBOL fails to meet its Minimum
Purchase Commitment in any calendar year, SYMBOL will
pay METROLOGIC, as fixed and agreed upon, liquidated
damages, in lieu of all other remedies or damages to
which METROLOGIC may be entitled, cash in the amount
of [ ] [ ] of the Annual Shortfall for such year
which amount is intended to approximate METROLOGIC [
] on such product.
11.6 Future Minimum Purchase Commitments.
Beginning January 1, 1999 and during the
term of the purchase agreement between
the Parties pursuant to Article 11,
METROLOGIC shall continue to sell and
deliver to SYMBOL units of METROLOGIC
Qualifying Products, and corresponding
minimum purchase requirements by SYMBOL
for this time period will be negotiated
by the Parties based upon current
business conditions at that time. The
failure of the Parties to agree on
minimum purchase requirements shall not
affect either the purchase agreement
under Part I or this Agreement in any
way.
<PAGE>
11.7 METROLOGIC Default. If METROLOGIC does
not meet the specified shipment dates on
an accepted purchase order under this
Part I, considering METROLOGIC's
customary production and shipment
schedules to all its customers, then
SYMBOL shall have the option of either
accepting the specified quantity of
units by the late delivery date, or
canceling that portion of the order with
units undelivered while still getting
credit for the order as part of its
Minimum Purchase Commitment, if any, for
that year. Anything to the contrary
notwithstanding, if SYMBOL places any
order during a period, and METROLOGIC
agrees to ship such order during that
period, but subsequently METROLOGIC
fails to ship the order during that
period, in addition to any other remedy
SYMBOL may have SYMBOL shall have the
option of either (i) getting credit for
the order as part of its Minimum
Purchase Commitment for that period or
(ii) getting credit for the period when
the units covered by such order are
actually shipped to SYMBOL. In the event
credit is given to SYMBOL for a period
prior to the period during which
shipment of units is actually made by
METROLOGIC, SYMBOL will not receive
credit for the order with respect to the
period in which the units are actually
shipped by METROLOGIC and delivered to
SYMBOL.
11.8 Warranties. METROLOGIC's product
warranty on any and all METROLOGIC
Qualifying Products purchased hereunder
shall be two years from the date of
purchase, and shall be applicable to all
end-user customers who purchase such
METROLOGIC Qualifying Products from
SYMBOL with the product warranty
commencing on the date of shipment of a
METROLOGIC product to SYMBOL's customer,
provided that the date of shipment of
the METROLOGIC product is shipped to
SYMBOL's customer within one (1) year
from the date of shipment of the
METROLOGIC product to SYMBOL. METROLOGIC
shall be responsible for warranty
service pursuant to Exhibit C unless
mutually agreed otherwise.
11.9 Term and Termination of Purchasing Provision: Part I
11.9.1 The obligations of each of the Parties with respect
to the purchase and sale of METROLOGIC Qualifying
Products under this Part I of this Article 11 ("the
Part I Purchasing Provision") shall be effective for
an initial term of five (5) years commencing on the
date of execution of this Agreement by both parties
(the "Initial Term"). Thereafter, this Part I
Purchasing Provision may be automatically renewed
during the term of this Agreement for successive
renewal during the term of this Agreement terms of
two (2) years each (individually, a "Renewal Term")
upon written request of either Party, subject to the
provisions of 11.9.2 below.
<PAGE>
11.9.2 If at any time during the term of this Part I
Purchasing Provision, SYMBOL has ordered and received
delivery of less than an aggregate of [ ] of
METROLOGIC Qualifying Product and/or METROLOGIC
Holographic Scanning Product during a twelve (12)
month period, SYMBOL shall have the option of
advising METROLOGIC that the Part I Purchasing
Provision shall not be renewed for the next Renewal
term by giving written notice to METROLOGIC at least
ninety days prior to the beginning of the next
Renewal term. After receipt of such notice, the Part
I Purchasing Provision shall expire at the end of the
current term in which notice is given.
11.9.3 Purchase Orders after Expiration of Purchasing
Provision (Phase Out). In order to accommodate
customer requests, SYMBOL shall have the right to
continue purchasing from METROLOGIC under the
provisions of this Part I, any METROLOGIC Qualifying
Product and/or METROLOGIC Holographic Scanning
Product purchased from METROLOGIC for a one-year
period after the termination or expiration date of
this Part I Purchasing Provision.
11.9.4 Maintenance after Expiration of Purchasing Provisions
In the event SYMBOL is performing maintenance
services of any METROLOGIC Qualifying Product and/or
METROLOGIC Holographic Scanning Product after the
termination or expiration of this Part I Purchasing
Provision, SYMBOL shall have the right to purchase
spare parts (including buffer stock replenishment
units) for a period of three years after the
termination or expiration date of this Part I
Purchasing Provision.
Notwithstanding anything otherwise provided herein,
METROLOGIC shall make available to SYMBOL for
purchase, maintenance and support services with
respect to the METROLOGIC Qualifying Product and/or
METROLOGIC Holographic Scanning Product as specified
in the Post-Warranty Maintenance provisions agreed by
the Parties and at the prices specified therein. The
terms and conditions of a product service agreement
shall be negotiated in good faith between the Parties
containing general terms (in addition to those
specified in Support Requirements) consistent with
the terms of the Part I Purchasing Provision; such
post-warranty maintenance and service obligations
shall survive the termination or expiration of the
Part I Purchasing Provision.
11.10 Non-Termination for Breach or Default of this Agreement.
Breach of or default under any of Articles 3, 4, 5, 6, 7, 8, 9
or 10 of this Agreement by either or both Parties shall not
constitute grounds for termination of this Part I Purchasing
Provision.
<PAGE>
11.11 Limited Effect of Breach on Section 3.7
License. Any material breach or non-
performance of the provisions of this
Part I Purchasing Provision relating to
the METROLOGIC Omnidirectional Hand-Held
Scanner Product by METROLOGIC shall give
SYMBOL the right to terminate any and
all of the rights and licenses granted
to METROLOGIC pursuant to Section 3.7
absent cure of the breach within the
time period provided under Section 15.3
of this Agreement or any other
applicable provision. Any breach or
termination of specified rights and
licenses under Section 3.7 shall in no
way affect any rights and licenses
granted to METROLOGIC, or the
obligations of either Party, under any
of the other licenses in Article 3 (e.g.
Sections 3.1 through 3.8) or any other
provisions of this Agreement not
affected by such termination.
11.12 Conflicts in Terms. All agreements
between METROLOGIC and SYMBOL for the
sale of METROLOGIC Qualifying Products
by METROLOGIC to SYMBOL pursuant to
purchase orders issued pursuant to this
Agreement shall be governed exclusively
by this Part I Purchasing Provision and
the Terms and Conditions of Sale set
forth in Exhibit C. In case of any
conflict between such provisions and any
releases, purchase orders, acceptances,
acknowledgments, correspondence,
memoranda or other documents for or
relating to the METROLOGIC Product
purchased by SYMBOL from METROLOGIC
during the term of this Part I
Purchasing Provision which are not
executed by a duly authorized
representative of both of the parties,
the Order of Precedence set forth in
Exhibit C shall govern and prevail.
PART II - PURCHASE OF SUBJECT OR ELECTED NEW METROLOGIC
PRODUCTS
Overview of Part II
1. This Part II of Article 11 relates to the purchase of Subject or
Elected New METROLOGIC Products ( as defined in Article 12) by SYMBOL
from METROLOGIC pursuant to the provisions of Article 12. This Part II
of Article 11 shall hereinafter be referred to as "Part II" or the
"Part II Purchasing Provision".
11.13 Scope. METROLOGIC shall sell and deliver
Subject or Elected New METROLOGIC
Products (hereinafter "SENMP") to SYMBOL
and SYMBOL shall purchase and accept
delivery of such products in accordance
with purchase order releases issued by
SYMBOL at the pricing schedule attached
hereto as Exhibit B and on the Terms and
Conditions set forth herein and in
Exhibit C, which form a part of this
Part II . The term "Elected New
METROLOGIC Products" in this Part II of
Article 11 and Exhibits B and C, and
only in this Part II of Article 11 and
Exhibits B and C, shall also refer to
Subject New METROLOGIC Products in the
event such products are not elected by
METROLOGIC pursuant to Section 12.4..
<PAGE>
11.14 Branding. SYMBOL shall specify the design and contents of the
product label including a "SYMBOL" logo or trademark or
alternatively a private customer name or logo, on the label to
be applied to such product by METROLOGIC.
11.15 Design and Production of Custom Elected New METROLOGIC
Products. During the term of this Agreement, METROLOGIC shall
design Custom Elected New METROLOGIC Products for SYMBOL, and
manufacture and sell such products to SYMBOL in accordance
with the pricing schedule attached hereto as Exhibit B and the
Terms and Conditions of Sale set forth in Exhibit C.
11.16 Points of Contact. During the term of this Part II Purchasing
Provision, each Party shall designate a single "point of
contact" for coordinating technical discussions and transfer
of information between the Parties to be mutually agreed.
11.17 Warranties. METROLOGIC's product
warranty on any and all Elected New
METROLOGIC Products purchased hereunder
shall be two years from the date of
purchase, and shall be applicable to all
end-user customers who purchase such
Elected New METROLOGIC Products from
SYMBOL with the product warranty
commencing on the date of shipment of a
METROLOGIC product to SYMBOL's customer,
provided that the date of shipment of
the METROLOGIC product is shipped to
SYMBOL's customer within one (1) year
from the date of shipment of the
METROLOGIC product to SYMBOL. METROLOGIC
shall be responsible for warranty
service pursuant to Exhibit C unless
mutually agreed otherwise.
11.18 Term and Termination of Purchasing Provision: Part II
11.18.1 The obligations of each of the Parties with respect
to the purchase and sale of Elected New METROLOGIC
Products under this Part II Purchasing Provision
shall be effective for an initial term of five (5)
years commencing on the date of shipment by
METROLOGIC of a ENMP ordered by SYMBOL (the "Initial
Term"). Thereafter, this Part II Purchasing Provision
may be automatically renewed during the term of this
Agreement for successive renewal during the term of
this Agreement terms of two (2) years each
(individually, a "Renewal Term") upon request of
either Party, subject to the provisions of 11.18.2
below.
11.18.2 If at any time during the term of this Part II
Purchasing Provision, SYMBOL has ordered and received
delivery of less than an aggregate of [ ] of Elected
New METROLOGIC Product during a twelve (12) month
period, SYMBOL shall have the option of advising
METROLOGIC that the Part II Purchasing Provision
shall not be renewed for the next Renewal Term by
giving written notice to METROLOGIC at least ninety
days prior to the beginning of the next Renewal term.
After receipt of such notice, the Part II Purchasing
Provision shall expire at the end of the current term
in which notice is given.
11.18.3 Purchase Orders after Expiration of Part II
Purchasing Provision (Phase Out). In order to
accommodate customer requests, SYMBOL shall have the
right to continue purchasing from METROLOGIC under
the provisions of this Article 11, any Elected New
METROLOGIC Product purchased from METROLOGIC for a
one-year period after the termination or expiration
date of this Part II Purchasing Provision.
<PAGE>
11.18.4 Maintenance after Expiration of Part II Purchasing
Provision. In the event SYMBOL is performing
maintenance services of any Elected New METROLOGIC
Product after the termination or expiration of this
Part II Purchasing Provision, SYMBOL shall have the
right to purchase spare parts (including buffer stock
replenishment units) for a period of three years
after the termination or expiration date of this Part
II. Notwithstanding anything otherwise provided
herein, METROLOGIC shall make available to SYMBOL for
purchase, for a period of five years after the
termination or expiration of this Part II Purchasing
Provision, maintenance and support services with
respect to the Elected New METROLOGIC Product as
specified in the Post-Warranty Maintenance provisions
agreed by the Parties and at the prices specified
therein. The terms and conditions of a product
service agreement shall be negotiated in good faith
between the Parties containing general terms (in
addition to those specified in Support Requirements)
consistent with the terms of the Part II Purchasing
Provision; such post-warranty maintenance and service
obligations shall survive the termination or
expiration of this Part II Purchasing Provision.
11.19 Non-Termination for Breach or Default of Agreement. Breach of
or default under any of Articles 3, 4, 5, 6, 7, 8, 9 or 10 of
this Agreement by either or both Parties shall not constitute
grounds for termination of this Part II Purchase Provision.
11.20 Limited Effect of Breach on Section 3.8
License. Any material breach or non-
performance of the provisions of this
Part II by METROLOGIC in connection with
the supply of an Elected New METROLOGIC
Product to SYMBOL shall give SYMBOL the
right to terminate any and all of the
rights and licenses granted to
METROLOGIC pursuant to Section 3.8
absent cure of the breach within the
time period provided under Section 15.3
of this Agreement or any other
applicable provision. Any breach or
termination of specified rights and
licenses under Section 3.8 shall in no
way affect any rights and licenses
granted to METROLOGIC, or the
obligations of either Party, under any
of the other licenses in Article 3 (e.g.
Sections 3.1 through 3.7) or any other
provisions of this Agreement not
affected by such termination.
11.21 Conflicts in Terms. All agreements
between METROLOGIC and SYMBOL for the
sale of Elected New METROLOGIC Products
by METROLOGIC to SYMBOL pursuant to
purchase orders issued pursuant to this
Agreement shall be governed exclusively
by this Purchasing Provision of Article
11, Part II and the Terms and Conditions
of Sale set forth in Exhibit C. In case
of any conflict between such provision
and any releases, purchase orders,
acceptances, acknowledgments,
correspondence, memoranda or other
documents for or relating to the
METROLOGIC Product purchased by SYMBOL
from METROLOGIC during the term of this
Part II which are not executed by a duly
authorized representative of both of the
parties, the Order of Precedence set
forth in Exhibit C shall govern and
prevail.
<PAGE>
PART III PURCHASE OF SPECIAL PRODUCTS
Overview of Part III.
1. This Part III relates to the purchase of Modified METROLOGIC Standard
Products including Modified METROLOGIC Qualifying Products, Modified Elected New
METROLOGIC Products, as well as SYMBOL Designed Scanner Products each of which
shall be hereinafter referred to as a "Special Product". This Part III of
Article 11 shall hereinafter be referred to as "Part III" or "Part III
Purchasing Provision".
11.22 Scope. METROLOGIC shall sell and deliver Special Products to
SYMBOL and SYMBOL shall purchase and accept delivery of such
products in accordance with purchase order releases issued by
SYMBOL at a pricing schedule to be agreed, and on the Terms
and Conditions set forth herein and in Exhibit C, which form a
part of this Article III.
11.23 Branding. SYMBOL shall specify the design and contents of the
product label including a "SYMBOL" logo or trademark, or
alternatively a private customer name or logo, on the label to
be applied to such product by METROLOGIC.
11.24 Design and Production of Modified
METROLOGIC Standard Products. In the
event SYMBOL desires that METROLOGIC
design a modification to a METROLOGIC
Standard Product which requires more
than a mere customization (e.g., the
inclusion of manual trigger to initiate
scanning), SYMBOL may request METROLOGIC
to design the proposed product on a
"request for quotation" ("RFQ") basis.
METROLOGIC may respond to the RFQ within
thirty (30) days providing a quotation
for their fee for doing the necessary
engineering design work during the
period of time set forth in the RFQ
together with a price quotation for
manufacturing the product for sale to
SYMBOL. If SYMBOL should accept the
METROLOGIC quotation, METROLOGIC shall
provide the engineering design of the
Modified METROLOGIC Standard Product and
manufacture and sell the METROLOGIC
Modified Standard Product to SYMBOL
pursuant to purchase order releases
issued by SYMBOL at an engineering fee
and production product pricing schedule
to be mutually agreed, and on the Terms
and Conditions set forth herein and in
Exhibit C which form part of this Part
III.
11.25 Production of SYMBOL Designed Products.
In the event SYMBOL desires that
METROLOGIC manufacture a SYMBOL Designed
Scanner Product for sale to SYMBOL,
SYMBOL may submit a "request for
quotation" to METROLOGIC for such
services. If SYMBOL should accept the
METROLOGIC quotation, during the terms
of this Part III of this Article 11,
METROLOGIC shall manufacture and sell
the SYMBOL Designed Products to SYMBOL
in accordance with pricing schedule
agreed to by the Parties and on the
terms and conditions set forth in
Exhibit C, which form a part of this
Part III.
<PAGE>
11.26 Point of Contact. During the term of
this Part III Purchase Provision, each
Party shall designate a single "point of
contact" for coordinating technical
discussions and transfer of information
between the Parties relating to Special
Products.
11.27 Warranties. METROLOGIC's product
warranty on any and all Modified
METROLOGIC Standard Products purchased
hereunder shall be two years from the
date of purchase, and shall be
applicable to all end-user customers who
purchase such Modified METROLOGIC
Standard Products from SYMBOL with the
product warranty commencing on the date
of shipment of a METROLOGIC product to
SYMBOL's customer, provided that the
date of shipment of the METROLOGIC
product is shipped to SYMBOL's customer
within one (1) year from the date of
shipment of the METROLOGIC product to
SYMBOL. METROLOGIC shall be responsible
for warranty service pursuant to Exhibit
C unless mutually agreed otherwise.
11.28 Term and Termination of Part III Purchasing Provision
11.28.1 The obligations of each of the Parties with respect
to the purchase and sale of Special Products under
this Part III Purchasing Provision shall be effective
for an initial term of five (5) years commencing on
the date of shipment by METROLOGIC of production
units of a Special Product ordered by SYMBOL (the
"Initial Term"). Thereafter, this Part III Purchasing
Provision may be automatically renewed during the
term of this Agreement for successive renewal during
the term of this Agreement terms of two (2) years
each (individually, a "Renewal Term") upon written
request of either Party, subject to the provisions of
11.28.2 below.
11.28.2 If at any time during the term of this Part III
Purchasing Provision, SYMBOL has ordered and received
delivery of less than an aggregate of [ ] of Special
Product during a twelve (12) month period, SYMBOL
shall have the option of advising METROLOGIC that the
Part III Purchasing Provision shall not be renewed
for the next Renewal Term by giving written notice to
METROLOGIC at least ninety days prior to the
beginning of the next Renewal Term. After receipt of
such notice, the Part III Purchasing Provision shall
expire at the end of the current term in which notice
is given.
11.28.3 Purchase Orders after Expiration of Part III
Purchasing Provision (Phase Out). In order to
accommodate customer requests, SYMBOL shall have the
right to continue purchasing from METROLOGIC under
the provisions of this Article 11, any Special
Product purchased from METROLOGIC for a one-year
period after the termination or expiration date of
this Part III Purchasing Provision.
<PAGE>
11.28.4 Maintenance after Expiration of Part III Purchasing
Provisions In the event SYMBOL is performing
maintenance services of any Special Product after the
termination or expiration of this Part III Purchasing
Provision, SYMBOL shall have the right to purchase
spare parts (including buffer stock replenishment
units) for a period of three years after the
termination or expiration date of this Part III.
Notwithstanding anything otherwise provided herein,
METROLOGIC shall make available to SYMBOL for
purchase, for a period of five years after the
termination or expiration of this Part III Purchasing
Provision, maintenance and support services with
respect to the Special Product as specified in the
Post-Warranty Maintenance provisions agreed by the
Parties and at the prices specified therein. The
terms and conditions of a product service agreement
shall be negotiated in good faith between the Parties
containing general terms (in addition to those
specified in Support Requirements) consistent with
the terms of the Part III Purchasing Provision; such
post-warranty maintenance and service obligations
shall survive the termination or expiration of the
Part III Purchasing Provision.
11.29 Non-Termination for Breach or Default of Agreement. Breach of
or default under any of Articles 3, 4, 5, 6, 7, 8, 9 or 10 of
this Agreement by either or both Parties shall not constitute
grounds for termination of this Part III Purchase Provision.
11.30 Limited Effect of Breach on Section 3.8
License. Any material breach or non-
performance of the provisions of this
Part III by METROLOGIC in connection
with the supply of an Special Product to
SYMBOL shall give SYMBOL the right to
terminate any and all of the rights and
licenses granted to METROLOGIC pursuant
to Section 3.8 absent cure of the breach
within the time period provided under
Section 15.3 of this Agreement or any
other applicable provision. Any breach
or termination of specified rights and
licenses under Section 3.8 shall in no
way affect any rights and licenses
granted to METROLOGIC, or the
obligations of either Party, under any
of the other licenses in Article 3 (e.g.
Sections 3.1 through 3.6) or any other
provisions of this Agreement not
affected by such termination.
11.31 Conflicts in Terms. All agreements
between METROLOGIC and SYMBOL for the
sale of Special Products by METROLOGIC
to SYMBOL pursuant to purchase orders
issued pursuant to this Agreement shall
be governed exclusively by this Part III
Purchasing Provision, and the Terms and
Conditions of Sale set forth in Exhibit
C and engineering fee and production
pricing schedule negotiated and mutually
agreed by the Parties. In case of any
conflict between such provision and any
releases, purchase orders, acceptances,
acknowledgments, correspondence,
memoranda or other documents for or
relating to the METROLOGIC Product
purchased by SYMBOL from METROLOGIC
during the term of this Part III which
are not executed by a duly authorized
representative of both of the parties,
the Order of Precedence set forth in
Exhibit C shall govern and prevail.
<PAGE>
ARTICLE 12. SYMBOL OEM MARKETING EVALUATION; ELECTION OF
SECTION 3.8 LICENSE
Overview.
1. It is noted that the Parties contemplate that, as a normal and customary
business practice, METROLOGIC may, at its option, from time to time, discuss
with SYMBOL the development and release of proposed new METROLOGIC Products, or
from time to time discuss then currently existing commercially available
METROLOGIC Products and provide specimens of such products for examination, for
the purpose of ascertaining and/or soliciting SYMBOL's interest in purchasing
and reselling such products outside of the scope of Articles 11 or 12
hereunder..
2. In order that there be no misunderstanding by either Party as a result of the
discussion noted in the preceding paragraph , the provisions in this Article 12
expressly provide that a disclosure of a new or improved METROLOGIC product
pursuant to Article 12 (i.e. a disclosure that results in imposing rights and
obligations on each Party under Article 12) expressly requires written
notification and reference to Article 12 of this Agreement and executed by a
corporate officer of the Party giving the notification (hereinafter referred to
as an "Article 12 Notification"). Unless METROLOGIC expressly states in writing
in its disclosure of a METROLOGIC Product to SYMBOL that such disclosure is an
"Article 12 Notification" , such disclosure of a new METROLOGIC product shall
not invoke the procedures of this Article 12. No license may be obtained by
METROLOGIC pursuant to this Article 12 unless a proper Article 12 Notification
has been effected.
3. This Article relates to the procedures to be followed by METROLOGIC
subsequent to the evaluation by SYMBOL of a specific METROLOGIC Product
satisfying certain criteria by SYMBOL which METROLOGIC has voluntarily presented
to SYMBOL to determine if SYMBOL would like to market such product. These
provisions as expressly requested by METROLOGIC also provide that METROLOGIC may
excercise an option to acquire a product license under certain patents of SYMBOL
that will apply only to that specific New METROLOGIC Product (and Non-Infringing
Modifications thereto, including cost reductions) evaluated by SYMBOL. Upon such
exercise of METROLOGIC's option, the specific New METROLOGIC Product shall be
referred to as the Elected New METROLOGIC Product. The identification under
Section 12. 1 and election under Section 12.4 may be made by METROLOGIC
irrespective of whether or not the New METROLOGIC Product has been evaluated
pursuant to Part II of Article 9. This Article also relates to the terms of
SYMBOL's exclusive OEM marketing rights to such product.
12.1 Procedure for Presentation of New
METROLOGIC Product. At any time during
the term of this Agreement, should
METROLOGIC wish to apprise SYMBOL of a
proposed or unannounced New METROLOGIC
Product ("NMP") under the provisions of
this Article 12 but at least thirty (30)
days prior to the first public
announcement of such NMP METROLOGIC
shall submit a written notice, executed
by a corporate officer of METROLOGIC
making reference to this Article 12
(such notice being referred to as an
Article 12 Notification), together with
a Technical Data Package (the "TDP") of
a the NMP to SYMBOL, and a specimen of
such product to SYMBOL and SYMBOL's
Escrow Agent (such specimen product
shall hereinafter be referred to as the
"Escrowed Specimen"). The NMP which
METROLOGIC has so submitted shall
satisfy the criteria set forth in the
definition of a "Elected New METROLOGIC
Product" or "ENMP" in Article 1 and such
NMP shall be referred to hereinafter as
the Subject NMP.
<PAGE>
12.2 Procedure for Election of Marketing
Rights of the Subject NMP Within sixty
(60) days from the date of receipt of
the TDP and specimen under Section 12.1
(hereinafter, such material collectively
being referred to as the "Subject NMP
Documentation"), or such further time as
mutually agreed, SYMBOL shall have the
"right of first refusal" to elect to be
the exclusive OEM customer of METROLOGIC
of the Subject NMP pursuant to the
provisions of Article 11, Part II.
SYMBOL shall advise METROLOGIC in
writing executed by a corporate officer
of SYMBOL making reference to this
Article 12 (hereinafter referred to as
the "OEM Marketing Notification")
whether or not it wishes to elect to
purchase such product from METROLOGIC on
an OEM basis.
12.3 OEM Marketing Exclusivity. In the event
SYMBOL has elected to purchase the NMP
from METROLOGIC pursuant to Section
12.2, METROLOGIC shall not sell the NMP
to any OEM other than SYMBOL. Subject to
the terms and conditions of this
Agreement, METROLOGIC shall have the
unrestricted right to sell the NMP to
any end-user customer, Distributor, or
VAR, provided that such customers agree
not to resell the NMP with a trademark
or logo other than "METROLOGIC".
12.4 Election and Effectiveness of License
under Section 3.8. Provided that the
provisions of 12.1 and 12.5 are
satisfied and further provided that no
other license under Section 3.8 has been
granted, and subject to the terms and
conditions of this Agreement , and
independent of whether SYMBOL has
elected marketing rights pursuant to
Section 12.2, METROLOGIC shall have the
option of electing the license under
Section 3.8 for the Subject NMP. Upon
the Parties reaching an agreement on the
royalty rate for the license under
Section 3.8, and subject to the terms
and conditions of this Agreement, the
license to METROLOGIC under Section 3.8
shall commence and become effective on a
date (the "Commencement Date")sixty (60)
days after the receipt by METROLOGIC of
the OEM Marketing Notification from
SYMBOL, if any, or the date the Parties
agree on a royalty rate for the license
under Section 3.8, whichever date is
earlier, or other mutually stipulated
date. METROLOGIC may withdraw its
request for election of a license at any
time prior to the Commencement Date
without prejudice or obligation. Upon
commencement of the license under
Section 3.8, the Subject NMP shall be
referred to as the Elected New
METROLOGIC Product, or ENMP. In event no
agreement is reached on the royalty rate
by the Commencement Date, the royalty
rate for the license under Section 3.8
shall be [ ] [ ] The grant of a license
under Section 3.8 may occur once and
only once during the term of this
Agreement. Any cessation of production
of the ENMP, or expiration of the
applicable patent rights, shall not
affect the one and only one license
granted under Section 3.8 in any way.
<PAGE>
12.5 "No Copying" Condition for License
Grant. Notwithstanding the foregoing
provisions in Section 12.1 through 12.4,
no license shall be granted under
Section 3.8 with respect to a SYMBOL
Patent that claims an invention that is
used or embodied in a SYMBOL product
that has been commercially sold prior to
the date of submitting the Subject NMP
Documentation to SYMBOL, unless
METROLOGIC can reasonably demonstrate
(i) the actual reduction to practice of
the claimed invention by METROLOGIC, or
(ii)constructive reduction to practice
of the invention by METROLOGIC inventors
, such as by the construction of a
working prototype of a METROLOGIC
device, subassembly software program, or
product that is reasonably documented by
a written record which is dated and
witnessed (e.g. the filing of a patent
application by METROLOGIC), prior to the
first public disclosure (through product
announcement, published patent
application, etc.) of the same invention
by SYMBOL that is embodied in a SYMBOL
product.
<PAGE>
ARTICLE 13 - CONFIDENTIALITY, COOPERATION, COMMUNICATION,
DISPUTES AND FUTURE NEGOTIATIONS
13.1 Confidentiality. The Parties covenant
and agree that this Agreement and
provisions thereof, and certain
confidential business and technical
information (including, but not limited
to, mechanical drawings, electrical
schematics and layouts, and software
relating to Custom Qualifying Products,
royalty rates and reports, and the
provisions of Exhibit B hereunder and
the data supplied thereunder, the
Technical Data Package supplied to a
Party under this Agreement, which if
designated in writing to be proprietary
or confidential) (hereinafter
collectively the "Confidential
Information") shall not be used or
disclosed by the Parties except as
provided pursuant to this Agreement. The
Parties agree that, without the prior
written consent of the party supplying
such Confidential Information, none of
the Parties shall, in any manner
whatsoever, disclose or communicate to
any party any such Confidential
Information or use any such Confidential
Information for any purpose except for
the purpose for which such Confidential
Information was supplied. Each of the
Parties shall use its best efforts to
conform with such confidentiality
requirement. Confidential Information
shall exclude information which:
(a) is or becomes publicly known through no wrongful act of the
receiving party;
(b) is received without restriction from a third party without a
breach of any obligation of non-disclosure;
(c) is independently developed by the receiving party as shown
to the satisfaction of the supplying party by written
records; or
(d) is required to be disclosed by applicable law,
regulation, rule, order or other governmental action,
provided that each of the Parties is given adequate
prior notice of such disclosure and adequate
opportunity to object thereto.
13.2 Indemnification. Each Party shall indemnify and hold the other
Party harmless from any loss, liability and expenses suffered
by such other Party as a result of any unauthorized
disclosure, communication or use of Confidential Information
by the receiving Party, its officers, directors, employees or
agents. The obligations contained in this Article 13 shall
survive the termination of this Agreement.
13.3 Future Discussions. The Parties contemplate that additional
Patent Family Licenses and/or additional licenses may be
desired by either or both Parties, and therefore the Parties
agree to meet in October, 1997 to negotiate in good faith the
granting of such additional cross-licenses, and to discuss any
appropriate modification of the maximum royalties set forth
herein under terms mutually acceptable by the Parties.
13.4 RF Market. The Parties agree to meet on or about the
anniversary date of the Execution Date of this Agreement to
discuss prevailing RF market conditions and negotiate in good
faith the modification of the royalty rates for RF Scanner
Products set forth herein.
<PAGE>
ARTICLE 14 - THIRD PARTY INFRINGEMENT
14.1 Third Party Infringement. In the event either SYMBOL or
METROLOGIC discover any infringement of any SYMBOL patents
by an unlicensed laser scanning bar code reader including a
radio transmitter and/or receiver of a third party, the
discovering Party shall, as soon as possible, communicate
details of same to the other Party. Thereupon, and in the
event SYMBOL has reasonable belief such infringement has
exceeded an annual volume of $5 million in infringing sales
upon which liability and damages could be adjudicated and
assessed, and conditioned upon METROLOGIC's continued
payment of the royalty for RF Scanner Products set forth in
Article 5.1(2), SYMBOL shall take appropriate action,
including the filing of a lawsuit to enforce the infringed
SYMBOL patent or patents against the unlicensed product of
the third party, provided that SYMBOL need not undertake
more than one action on such patent against infringing
parties at a time. METROLOGIC shall cooperate with SYMBOL,
but all expenses of such action shall be borne by SYMBOL. In
the event SYMBOL recovers any damages or other compensation
as a result of any such action, METROLOGIC shall not be
entitled to a share in such damages or other compensation
recovered by SYMBOL as a result of such action.
14.2 METROLOGIC Legal Action. In the event SYMBOL has not taken
legal action against the alleged infringer pursuant to
Section 14.1 within a reasonable time, METROLOGIC shall have
the right to take such action at its own cost and expense,
using counsel of its choice, reasonably satisfactory to
SYMBOL. SYMBOL shall give all reasonable assistance
necessary to the prosecution of such lawsuit. SYMBOL may, at
its own expense, and at its option, be represented by its
own counsel in such lawsuit and join in the prosecution of
such claim or action to the extent the interests of SYMBOL
vary from those of METROLOGIC. METROLOGIC may not, without
SYMBOL's consent, accept any settlement or consent to any
determination in connection with any lawsuit undertaken by
METROLOGIC that entails equitable relief without SYMBOL's
consent.
14.3 Damages. In the event any damages are awarded as a result of
an action undertaken by METROLOGIC pursuant to Section 14.2,
METROLOGIC shall be entitled to recover its costs and expenses
of the litigation from such damage award, and the remainder
after deducting such expenses shall be divided sixty percent
to METROLOGIC, and forty percent to SYMBOL.
14.4 Royalty Reduction Option. In the event during the term of
this Agreement SYMBOL grants a license under the SYMBOL RF
Scanner Patents to a third party (the "Third Party
Licensee") that provides for a royalty rate less than that
provided to METROLOGIC under Article 5.1(2) hereunder, then
at METROLOGIC's option SYMBOL shall reduce the royalty rate
on METROLOGIC RF Scanner Products under Article 5.1.(2) (the
"RF Royalty Rate") to a royalty rate (the "Reduced RF
Royalty Rate") which is the greater of: (i) the royalty rate
set forth in the Third Party License, or (ii) the royalty
rate equal to [ ] of the level set forth in Article
5.1(2)(a) and (b). Any credit of [ ] and [ ] set forth in
Article 5.1(2)(a) and 5.1(2)(b) respectively which may be
creditable to METROLOGIC under the provisions of Article
5.1(2) shall not be credited or otherwise made applicable to
such Reduced RF Royalty Rate if the Reduced RF Royalty Rate
is less than the RF Royalty Rate (By way of explanation, the
foregoing provision provides that in the event a license is
granted to a third party by SYMBOL under SYMBOL RF Scanner
Patents after the Effective Date, METROLOGIC's royalty rate
on a unit-by-unit basis of METROLOGIC RF Scanner Product may
be reduced as a result of METROLOGIC's exercise of the
option under this Section 14.4, but never increased.
<PAGE>
14.5 Third Party Infringement. In the event either SYMBOL or
METROLOGIC discover any infringement of any METROLOGIC
patents that are licensed to SYMBOL under Article 4
hereunder by an unlicensed laser scanning bar code reader
made, used or sold by some third party, the discovering
Party shall, as soon as possible, communicate details of
same to the other Party. Thereupon, and in the event
METROLOGIC has reasonable belief such infringement has
exceeded an annual volume of $5 million in infringing sales
upon which liability and damages could be adjudicated and
assessed, and conditioned upon SYMBOL's continued payment of
the royalty under Article 6, METROLOGIC shall take
appropriate action, including the filing of a lawsuit to
enforce the infringed METROLOGIC patent or patents against
the unlicensed product of the third party, provided that
METROLOGIC need not undertake more than one action on such
patent against infringing parties at a time. SYMBOL shall
cooperate with METROLOGIC, but all expenses of such action
shall be borne by METROLOGIC. In the event METROLOGIC
recovers any damages or other compensation as a result of
any such action, SYMBOL shall not be entitled to a share in
such damages or other compensation recovered by METROLOGIC
as a result of such action.
<PAGE>
14.6 SYMBOL Legal Action. In the event METROLOGIC has not taken
legal action against the alleged infringer pursuant to
Section 14.5 within a reasonable time, SYMBOL shall have the
right to take such action at its own cost and expense, using
counsel of its choice, reasonably satisfactory to
METROLOGIC. METROLOGIC shall give all reasonable assistance
necessary to the prosecution of such lawsuit. METROLOGIC
may, at its own expense, and at its option, be represented
by its own counsel in such lawsuit and join in the
prosecution of such claim or action to the extent the
interests of METROLOGIC vary from those of SYMBOL. SYMBOL
may not, without METROLOGIC's consent, accept any settlement
or consent to any determination in connection with any
lawsuit undertaken by SYMBOL that entails equitable relief
without METROLOGIC's consent.
14.7 Damages. In the event any damages are awarded as a result of
an action undertaken by SYMBOL pursuant to Section 14.6,
SYMBOL shall be entitled to recover its costs and expenses of
the litigation from such damage award, and the remainder after
deducting such expenses shall be divided sixty percent to
SYMBOL, and forty percent to METROLOGIC.
<PAGE>
ARTICLE 15 - TERM & TERMINATION
This Article 15 provided provisions related to the term and termination of the
Agreement. The normal term of the Agreement, and provisions relating to a "for
cause" termination of the Agreement as a result of predefined material breaches,
is set forth in Part I. An optional "not for cause" or early "termination"
procedure is set forth in Part II.
PART I.
Overview of Part I.
Part I relates to "for cause" termination.
15.1 Term. This agreement shall commence on the Effective Date
and shall continue in full force and effect for a period of
seventeen (17) years from the Effective Date, or until the
last to expire of any issued patents of each of the Parties
hereto in each respective country included within the
licensed METROLOGIC Patents and licensed SYMBOL Patents,
whichever is longer (the "Full Term"), unless earlier
terminated under Section 15.9 below. In the event of a
termination under Section 15.9, the period of time between
the Early Termination Date (as defined therein) and the end
of the Full Term shall be referred to hereinafter as the
"Remaining Term."
15.2 Material Breaches.
(A) The following shall be deemed to be material breaches of
this Agreement:
(1) the non-payment of royalties due by a Party
hereto within the time period set forth in
Article 7 including the failure of that
Party to pay royalties under a specific
product configuration or product line,
notwithstanding royalties are paid on
another product configuration or product
line of that Party; or
(2) the manufacture, use or sale of a METROLOGIC Product thirty
days after the Decision of an arbitrator acting pursuant to
Article 16, that (i) such METROLOGIC product is outside the
scope of the METROLOGIC Scanner Product License grant
granted under Article 3; or (ii) such METROLOGIC Product
includes an Infringing Modification; or (iii) such
METROLOGIC Product is an MLP that is, or the use thereof is,
not covered by a METROLOGIC Scanner Product License grant;
or
(3) within thirty (30) days after receiving an
Inducing Infringement Notification
METROLOGIC fails to cease sales of an
identified METROLOGIC product to a customer
pertaining to such identified METROLOGIC
product pursuant to Section 3.16; or
(4) either Party fails to comply with any
binding arbitration award made pursuant to
Section 16.2 within the time period provided
under this Agreement, or pursuant to the
award, as the case may be; or
(5) the manufacture, use or sale of a SYMBOL
product thirty (30) days after the Decision
of an arbitrator acting pursuant to Article
16, that (i) such SYMBOL product includes an
Infringing Modification; or (ii) such SYMBOL
product is a SMLP that is, or the use
thereof is, not covered by a METROLOGIC
Patent Family License granted under Article
4.
<PAGE>
(B) The following occurrences shall be deemed not to be
material breaches of this Agreement:
(1) the manufacture, use or sale of a New
Product by either Party which allegedly
infringes claims of a patent of the other
Party; any such infringement or alleged
infringement shall not otherwise affect the
rights and obligations of either Party under
this Agreement, or the enforceability
thereof; or cause a breach of the Agreement;
or
(2) any breach or default of either Party in
connection with the purchase by SYMBOL and
the supply by METROLOGIC of METROLOGIC
Qualifying Product under the provisions of
Article 11; or
(3) the sale or offer to sell a Next Generation
ScanGlove Product after eleven (11) but
before twelve (12) months from the Execution
Date of this Agreement.
15.3 Termination.
15.3.1 Material Breach. In case of a material breach of this
agreement by either Party as defined in Section 15.2, the
other Party shall have the right to terminate any or all of
the rights and licenses granted to that Party under this
Agreement, in whole or in part, by giving the other Party
sixty (60) days written notice of its intention to terminate
any or all of such rights and license, without limitation of
any other right the terminating Party may have on account of
such breach under this Agreement. Any termination of some of
the rights and licenses granted to a Party shall not affect
the rights and licenses not terminated, or the obligations
of that Party under this Agreement pertaining to such rights
and licenses. Such written notice shall specify with
particularity the cause for breach or default under this
Agreement; provided, however, that if the breaching Party
shall remedy such failure within such sixty (60) day period
(the "Sixty Day Period"), then such rights and licenses
specified in the notice shall not be terminated on the date
specified in such notice.
15.3.2 Declaratory Action. During this Sixty Day Period (defined
above), either Party may file an action in a court for a
declaratory judgment or other relief to obtain a judicial
declaration as to whether there has been a material breach,
whether as expressly set forth in Section 15.2 or otherwise.
The right of a Party to file such an action shall not
however, in any way affect either Party's right to
subsequently elect to arbitrate an issue which is arbitrable
under Section 16.2 of this Agreement, or affect any
arbitration proceeding then underway, or affect the
enforceability of any arbitrator's award under this
Agreement.
15.3.3 Waiver. If the non-breaching Party (i.e., the Party
asserting that the other Party has breached) prevails in an
action pursuant to Section 15.3.2 insofar as finding the
breach was material and the termination was authorized
pursuant to this Agreement, the non-breaching Party shall be
entitled to a declaration that the termination be deemed
effective as of a date at the end of the Sixty Day Period,
and shall be entitled to damages under 35 USC 284
accordingly. It is the intent of the Parties that any cure
of the breaching Party must take place during the Sixty Day
Period following receipt of notice of breach and the filing
or prosecution of any legal action in connection with such
breach shall not act to waive or toll such Sixty Day Period.
<PAGE>
15.4 Other Termination. In addition to the grounds for termination
for breach or default set forth in Section 15.3, in the event
of a Change of Control of METROLOGIC and the occurrence of a
condition set forth in Section 18.3, any or all of the rights
granted to METROLOGIC may be terminated as set forth in
Article 18.
15.5 Accounting. After any termination of this agreement, or any
rights or licenses hereunder, including the expiration of
the last of the licensed METROLOGIC or SYMBOL Patents, as
the case may be, each Party, respectively, shall render an
accounting for all royalty bearing products sold pursuant to
the license from the last such report to the termination
date. Such final accounting shall be made within sixty (60)
days after such termination date or the date of the court
decision under Section 15.3.3, as applicable.
15.6 Disposition of Products. Upon termination of this Agreement
or any rights and licenses granted hereunder solely as
provided in Section 15.2 the Party having its rights and
licenses terminated shall have a period of sixty (60) days
from the date of termination to sell, transfer or dispose of
any previously manufactured licensed products held in its
inventory as of the date of such termination; provided,
however, that such sale or other disposition shall be
subject to making the royalty payments provided for in
Articles 5 and 6 as applicable thereto.
15.7 Waiver. Waiver of either Party of any default shall not
deprive such Party of any right arising by reason of any
subsequent default.
15.8 False and Misleading Press Announcements. In the event a
Party hereto (the "Announcing Party") makes a formal public
announcement or statement (e.g., press release, or "on the
record" press interview) that falsely states or implies that
this Agreement (i) extends to parties other than the Parties
expressly licensed hereunder; or (ii) licenses or otherwise
covers products of a Party other than those products
expressly licensed hereunder, then the Announcing Party
shall be liable to the other Party (the "Injured Party") for
a breach of this Section 15.8. The Parties further agree
that in the event of a breach of this Section 15.8, the
amount of damages would be impractical or extremely
difficult to fix with precision. Both Parties further
acknowledge that it would be in the interest of both Parties
to agree in advance on an amount of damages for each
incident in breach of this Section 15.8 that is reasonably
related to the actual damages estimated to be sustained by
the Injured Party based upon the injured reputation and lost
sales and profits that such Injured Party would in
reasonably high probability have incurred as a consequence
of such breach. Accordingly, the Parties have agreed that
the damages sustained by the Injured Party under the
incidents set forth above shall be presumed to be equal to
the amount of fifty thousand ($50,000) dollars for each such
announcement, press release, or Interview.
<PAGE>
PART II - EARLY TERMINATION
Overview of Part II.
In order to allow each Party greater flexibility to be able to
structure a new license arrangement that would pertain to "next
generation" products, i.e. products that are introduced after Jan. 1,
2002, the present Agreement has an option for a limited early
"termination" of the applicability of the license grants to later
introduced products. Such opinion may be exercised unilaterally by
either Party without cause after Jan. 1, 2002. Such early "termination"
is not intended to cancel or terminate any license or immunity that
applies to products of either Party in production at that time. Thus,
the exercise of such limited "termination" right will not have the
effect of raising a charge of infringement. Upon such early
termination, neither the immunities and licenses granted under the
Agreement applicable solely to such products will be terminated, nor
will any corresponding obligations to pay royalties on such products be
extinguished. However, the early termination is a "termination" in the
sense that no new or additional "family member" products of a licensed
or immune product may be subsequently released by either Party under
the benefit of a license or immunity from suit. Furthermore, no
"modified" or "new" products of either Party will enjoy the benefit of
any license, waiver, or immunity. Accordingly to the extent any such
licenses are required, the Parties will have to enter negotiations for
such license or potentially risk a charge of infringement on such
products.
15.9 Early Termination. At any time after January 1, 2002, either
Party may terminate this Agreement by providing the other
Party with written notice of termination at least ninety
(90) days prior to such termination. Upon such termination
(hereinafter, the "Early Termination", such date of
termination being the Early Termination Date), all rights
immunities, covenants not to sue, and licenses granted under
Articles 3 and 4 shall be automatically terminated (except
as provided in Section 15.10 below), all rights licenses,
obligations and waivers under Articles 9 and 10 shall be
automatically terminated (except with in connection with
licenses or waivers granted as provided in 15.10), and all
rights and obligations under Articles 14, 16, 17 and 18
shall be automatically terminated. Any arbitrations in
progress under Article 16 shall be withdrawn and terminated
forthwith, with each Party bearing their own expenses in
connection with the proceedings.
15.10Effect of Early Termination: License Continuance on
Products in Production. In the event of an Early Termination
under Section 15.9, such termination shall not terminate the
immunities, covenants not to sue, and licenses granted to
each Party under Articles 3 and 4 solely with respect to
Termination Exempt Products of such Party nor shall the
obligations of each Party to pay the applicable royalties on
such Products during the Remaining Term of this Agreement be
terminated. Termination Exempt Products shall not include
any Modified METROLOGIC Products or modified SYMBOL Products
which are released to production subsequently to the Early
Termination Date irrespective of whether or not such
products include only Non-Infringing Modifications.
15.11Escrow of Termination Exempt Products. Within twenty (20)
days after the Early Termination Date, each party will
deposit in escrow with the Escrow Agent a TDP of those
products for which such Party elects to receive the benefit
of a continuation of the patent license or immunization
granted pursuant to Articles 3 and 4 hereunder subsequent to
the Early Termination, such product being the Termination
Exempt Products. Any operational specimen or written
technical disclosure of a product not received into escrow
prior to the date provided hereinabove shall not be deemed
to be an Escrowed Specimen Product, and shall not receive
the benefit of any license or immunization hereunder.
<PAGE>
ARTICLE 16 - DISPUTE RESOLUTION AND ARBITRATION
16.1 Dispute Resolution. If any controversy or claim arises out of
or relates to this Agreement, the senior management of each
party shall meet within thirty (30) days after notification of
such claim to attempt to resolve the matter.
16.2 Scope of Binding Arbitration. If not otherwise settled by
the Parties within the thirty (30) day period pursuant to
Section 16.1, upon the initiative of either Party a
controversy or claim dealing with the enumerated issues set
forth in this Section 16.2 subparagraphs (i) through (vii)
shall be finally settled by expedited arbitration in New
York, N.Y. in accordance with the then existing Commercial
Arbitration Rules of the American Arbitration Association
("AAA"), subject to the additional provisions set forth in
this Article:
(i) whether a change, modification or improvement to a
METROLOGIC product represented by an Escrowed Specimen is an
Infringing Modification or is not covered by a METROLOGIC
Scanner Product License; or
(ii) whether a change, modification or improvement to a SYMBOL
product represented by an Escrowed Specimen is an Infringing
Modification; or
(iii)whether specific products of METROLOGIC are Royalty Bearing
METROLOGIC Products; or
(iv) whether Royalty Bearing METROLOGIC Products have been used
or sold for use outside the respective Authorized
Application pertaining to such products; or
(v) the amount and computation of royalties due to a Party under
this Agreement, or damages due or other relief available to
a Party in the event of a breach of this Agreement, or
(vi) whether METROLOGIC has fulfilled its obligations to
SYMBOL pertaining to the design, manufacture and
delivery of products under Article 11 during a
reporting period; or
(vii) whether SYMBOL has fulfilled its obligations to
METROLOGIC pertaining to the design, manufacture and
delivery of products under Article 11 during a
reporting period.
In addition to the enumerated issues above, but subject to the
exceptions from non-binding arbitration set forth in Section
16.3, and further subject to the instructions in Section 16.7,
if there be a question pertaining to the enumerated issues
(i), (ii), (iii), (iv), (v), (vi) or (vii) above as to whether
a particular controversy or claim is subject to arbitration,
that issue of arbitrability may be determined by the
arbitrator hereunder, provided, however, that the legality or
validity of a provision per se of this Agreement under any
circumstances, nor the validity of any patent, shall not be
subject to arbitration.
16.3 Non-Binding, Advisory Arbitration. At the option of either of
the Parties hereto, any controversy or claim dealing solely
with the enumerated issues (i) and (ii) below may be referred
to arbitration at the initiative of either Party in accordance
with this Article 16 solely for a non-binding, advisory
opinion of the Arbitrator:
(i) whether or not the Identified SYMBOL Patent noted by SYMBOL
pursuant to Section 9.8 is infringed by the NMP;
(ii) whether or not the Identified METROLOGIC Patent notified by
METROLOGIC pursuant to Section 10.4 is infringed by the NSP.
<PAGE>
Such non-binding and advisory opinion is intended by the
Parties to assist the Parties in resolving their differences
by negotiation, and shall not be used by either Party in any
legal or administrative proceeding, or be made public.
16.4 Appointment of Arbitrator. The single arbitrator shall be
selected according to the following procedure:
(1) Persons on the rank-ordered list in Exhibit F attached
hereto shall be invited by either both Parties, by fax or
telephone, to accept employment as arbitrator of such
dispute at a fee deemed appropriate. The arbitrator shall be
the highest ranked name on the list of potential arbitrators
attached hereto as Exhibit F who is available (including
suffering no then existing conflicts) and agrees to act as
arbitrator at the time a Party hereto elects arbitration.
Any candidate who does not respond to fax or telephone
offers of his employment within three working days shall be
stricken from such list.
(2) In the event the highest ranked name has not confirmed his
availability to act as arbitrator after due inquiry, and
none of the arbitrators nominees listed in Exhibit F are
then available to act as arbitrator at such fee, each Party
shall prepare a rank-ordered list of up to ten (10) names of
proposed arbitrator candidates, each arbitrator candidate
either meeting the qualifications set forth in Section 16.5
and each Party shall submit such list to the other Party,
with a copy to the AAA, within twenty (20) days after the
date of the notice commencing arbitration.
If there are one or more common names on each of the
lists of proposed arbitrator nominees, the name of
the highest ranking common name that confirms his
availability to act as arbitrator shall be made the
sole arbitrator. If only one Party submits a list,
the highest ranked name on such list that confirms
his availability to act as arbitrator shall be made
the sole arbitrator who shall be qualified as defined
in Section 16.5.
(3) In the event the procedure in Section 16.4(1) or (2) does
not result in the confirmation of the appointment of an
arbitrator (e.g., there are no common names on the lists, or
neither party submits a list of names in accordance with
Section 16.4(2)), or nobody accepts the invitation within
three working days of an invitation the AAA shall upon
application of either Party forthwith appoint a single
arbitrator who shall be qualified as defined in Section
16.5.
16.5 Qualifications of Arbitrator. The qualifications of the
arbitrator, whether appointed by the Parties or the AAA,
shall be as follows:
(1) be a licensed lawyer practicing in any one of the states of
New York, New Jersey, Pennsylvania, Connecticut,
Massachusetts, Illinois, Ohio, Indiana, Virginia, Maryland,
Delaware or Washington, D. C., and is not presently or has
ever been a partner or employed by a law firm or
organization which has had either Party as a client; or
being a retired Federal judge who has presided over at least
two bench trials or appeals of a case including an action
for patent infringement;
(2) be "av" rated in the Martindale-Hubble Directory;
(3) be willing to commit to giving the arbitration a high
priority on his docket, whereby all submissions of
questions to him will normally be considered and
decided within ten (10) working days, and whereby he
will only rarely if at all have to postpone any
action or hearing beyond a date agreeable to the
parties;
<PAGE>
(4) unless the arbitrator is a retired Federal judge, for
any issue arising under any of the enumerated issues
(i), (ii), (iii), or (iv) of Section 16.2 or (i) or
(ii) of Section 16.3, the arbitrator must also:
(i) be admitted to practice before the U.S. Patent and Trademark
Office; and
(ii) have represented a party at a trial
proceeding before a U.S. District Court in
at least one patent infringement suit each
for a patentee and at least one patent suit
for an accused infringer.
16.6 Proceedings. The arbitrator shall schedule the proceedings
on an expedited basis so that the hearing (the "Hearing") is
held no later than three months after the confirmation of
the arbitrator, unless mutually extended by the parties. In
the event that the Rules of the AAA do not cover a question
arising during the arbitration, then the laws of New York
pertaining to arbitration shall apply. The arbitrator shall
provide for discovery solely in accordance with Section 16.8
below. The arbitrator is empowered and instructed to take an
active role in the management of the discovery and to limit
discovery in accord with his sole discretion subject to the
provisions of Section 16.8.
16.7 Instructions for Arbitrator (METROLOGIC Product Type I Ground).
16.7.1 In the event SYMBOL asserts a Type I Ground under
Section 9.1, and METROLOGIC or SYMBOL elects to
commence an arbitration proceeding under Section
9.2.1, the arbitrator shall proceed solely to
determine the answer to the questions posed: whether
any claims identified by SYMBOL pursuant to Section
9.1 or 9.2 of the Identified SYMBOL Patent (a) are
infringed by the MLP, and (b) are not infringed by
the corresponding Escrowed Specimen. The arbitrator
shall not entertain any counterclaims in such
arbitration proceeding, nor shall the arbitrator
proceed to find infringement or non-infringement of
the Identified SYMBOL Patent on any other basis
except or as set forth in this Section 16.7.1 as may
be stipulated by the Parties . In the event both (a)
and (b) are found by the arbitrator to be satisfied
for at least one claim in the Identified SYMBOL
patent, then the MLP shall be deemed as infringing
such Identified SYMBOL Patent claim, and the
arbitrator shall so render such conclusion as a
finding of fact and conclusion of law, and set forth
his decision under which the Parties shall henceforth
be bound. The instructions in this Section 16.7.1 are
intended to limit the scope of the arbitral issues in
order to simplify the proceedings and to enable the
Parties to obtain a decision as quickly as possible.
16.7.2 Instructions for Arbitrator (METROLOGIC Product Type II
Ground). In the event SYMBOL asserts a Type II Ground under
Section 9.1, and METROLOGIC or SYMBOL elects to commence an
arbitration proceeding under Section 9.2.1, the arbitrator
shall proceed solely to determine the answer to the question
posed: whether the features or attributes of the MLP
identified by SYMBOL pursuant to Section 9.1 or 9.2 fails to
satisfy the definition of the Licensed METROLOGIC Product
corresponding to the Escrowed Specimen (the "Question for
Arbitration"). The Arbitrator shall not entertain any
counterclaims in such arbitration proceeding, nor shall the
arbitrator proceed to find infringement or non- infringement
of any SYMBOL patent except as may be stipulated by the
Parties. In the event the Question for Arbitration is found
by the arbitrator to be answered in the affirmative, then
the MLP shall be deemed as outside of the scope of the
METROLOGIC Scanner Product License and hence not licensed
under this Agreement; the arbitrator shall so render such
conclusion as a finding of fact and conclusion of law, and
set forth his decision under which the Parties shall
henceforth be bound. The instructions in this Section 16.7.2
are intended to limit the scope of the arbitral issues in
order to simplify the proceedings and to enable the parties
to obtain a decision as quickly as possible.
<PAGE>
16.7.3 Instructions for Arbitrator (METROLOGIC Product Type III
Ground). In the event SYMBOL asserts a Type III Ground under
Section 9.1, and METROLOGIC or SYMBOL elects to commence an
arbitration proceeding under Section 9.2.1, the arbitrator
shall proceed solely to determine the answer to the question
posed: whether the application or use of the MLP intended by
METROLOGIC and identified by SYMBOL pursuant to Section 9.1
or 9.2 fails to satisfy the Field restrictions and
limitations set forth in the license grant in Article 3 are
not satisfied (the "Question for Arbitration"). The
Arbitrator shall not entertain any counterclaims in such
arbitration proceeding, nor shall the arbitrator proceed to
find infringement or non-infringement of any Identified
SYMBOL patent except as may be stipulated by the Parties. In
the event the Question for Arbitration is found by the
arbitrator to be answered in the affirmative, then the MLP
shall be deemed as outside the scope of the license grant of
Article 3, and hence not licensed under the Agreement; the
arbitrator shall so render such conclusion as a finding of
fact and conclusion of law, and set forth his decision under
which the Parties shall henceforth be bound. The
instructions in this Section 16.7.3 are intended to limit
the scope of the arbitral issues in order to simplify the
proceedings and to enable the parties to obtain a decision
as quickly as possible.
16.7.4 Instructions for Arbitrator (METROLOGIC Product - "B"
Election. In the event SYMBOL asserts provision (B) under
Section 9.1, and METROLOGIC or SYMBOL elects to commence an
arbitration proceeding under Section 9.2.2, the arbitrator
shall proceed solely to determine the answer to the question
posed: whether any claims identified by SYMBOL pursuant to
Section 9.2.2 of the Issued Patent (a) are infringed by the
MLP, and (b) are not infringed by the corresponding Escrowed
Specimen. The Arbitrator shall not entertain any
counterclaims in such arbitration proceeding, nor shall the
arbitrator proceed to find infringement or non-infringement
of the Identified SYMBOL Patent on any other basis except or
as set forth in this Section 16.7.4 or as may be stipulated
by the Parties . In the event both (a) and (b) are found by
the arbitrator to be satisfied for at least one claim, then
the MLP shall be deemed as infringing the Issued Patent
claim, and the arbitrator shall so render such conclusion as
a finding of fact and conclusion of law, and set forth his
decision under which the Parties shall henceforth be bound.
The instructions in this Section 16.7.4 are intended to
limit the scope of the arbitral issues in order to simplify
the proceedings and to enable the parties to obtain a
decision as quickly as possible.
16.7.5 Instructions for Arbitrator (SYMBOL Product). In the event
METROLOGIC asserts a claim under Section 10.1, and SYMBOL or
METROLOGIC elects to commence an arbitration proceeding
under Section 10.2.1, the arbitrator shall proceed solely to
determine the answer to the questions posed below (1)
whether any claims identified by METROLOGIC pursuant to
Section 10.1 or 10.2 of the Identified METROLOGIC Patent (a)
are infringed by the SMLP, and (b) are not infringed by the
corresponding Escrowed Specimen. The Arbitrator shall not
entertain any counterclaims in such arbitration proceeding,
nor shall the Arbitrator proceed to find infringement or
non-infringement of the Identified METROLOGIC Patent on any
other basis except as set forth in this Section 16.7.5 or as
may be stipulated by the Parties. In the event both (a) and
(b) are found by the arbitrator to be satisfied for at least
one claim, then the SMLP shall be deemed as infringing the
Identified METROLOGIC Patent claim, and the arbitrator shall
so render such conclusion as a finding of fact and
conclusion of law, and set forth his decision under which
the Parties shall henceforth be bound. The instructions in
this Section 16.7.5 are intended to limit the scope of the
arbitral issues in order to simplify the proceedings and to
enable the parties to obtain a decision as quickly as
possible.
<PAGE>
16.8 Discovery.
16.8.1 Discovery shall be permitted in accordance with the
Federal Rules of Civil Procedure (FRCP) except as
follows:
(1) Interrogatories (FRCP 33) shall not be
permitted.
(2) Requests for Admission (FRCP 36) shall not
be permitted.
(3) Discovery from third parties, whether in the
form of requests for production of documents
or things, or in the form of depositions
shall not be permitted, regardless of
whether a subpoena (FRCP 45) would otherwise
be required to obtain the discovery.
16.8.2 Conference. The arbitrator shall hold a Rule 26(f)
discovery conference within twenty eight (28) days of
being appointed arbitrator.
16.8.3 Depositions.
(1) Each Party shall be permitted to take up to
only five (5) depositions of the other
Party, and no more than a cumulative twenty
(20) hours of testimony shall be taken from
all witnesses..
(2) Except for FRCP 30(b)(6) witnesses treated
in Section (3) below each deposition shall
not exceed four (4) hours, except for good
cause shown.
(3) In the case of depositions under FRCP
30(b)(6), each four (4) hours of testimony
shall constitute one deposition.
(4) Objections and instructions not to answer
shall be stated in accordance with FRCP
30(b)(1). Objections should ordinarily be
limited to those which might be waived if
not made at the time of the deposition. FRCP
32(d)(3). Objections shall be stated in a
non-argumentative and non-suggestive manner.
There shall be no argument in response to an
objection.
(5) Counsel shall not engage in any conduct during a
deposition that would not be allowed in the presence of
a judge.
(6) If Parties have a dispute which may be resolved with
assistance from the arbitrator, or if unreasonable or bad
faith deposition techniques are being used, the deposition
may be suspended so that a motion may be made immediately
and heard by the arbitrator. Alternatively, a written motion
relating to the deposition may be filed after a transcript
is available. The arbitrator may impose costs, including
attorney fees, on any person responsible for unreasonable or
bad faith deposition techniques or behavior.
(7) If a question is pending, it shall be answered before a
recess is taken, unless the question involves a matter
of privacy rights or privilege.
16.8.4 Requests for Production.
(1) Each request for production shall state in
concise language the documents or other
things requested without reference to any
definitions or other instructions not
contained within a request in the same
document.
<PAGE>
(2) Responses to requests made pursuant to FRCP
34(a) shall set forth each request in full
before each response or objection. Each
objection shall be followed by a statement
of reasons.
16.8.5 Motions to Compel Discovery.
(1) The arbitrator will deny any motion pursuant
to FRCP 26 through 37 unless a statement of
moving counsel is attached thereto
certifying that, after personal or telephone
consultation and sincere effort to do so,
counsel have been unable to satisfactorily
resolve the matter before filing the motion.
(2) If counsel for the moving party seeks to
arrange such a conference and opposing
counsel willfully refuses or fails to
confer, the arbitrator may award the payment
of reasonable expenses, including attorneys'
fees pursuant to FRCP 37(a)(4). Counsel for
the moving Party shall include in the motion
a certificate of compliance with this rule.
(3) The Party against whom an order to compel
has been issued shall comply with the order
within five (5) days after receiving the
arbitrator's order unless a different time
is set.
(4) No ruling of the arbitrator to limit
discovery deemed to be outside of the scope
of this Agreement shall be grounds for
judicial review or reversal of the
arbitrator's award.
16.8.6 Stipulations. Throughout discovery, the Parties are
requested where appropriate to stipulate to the
admissibility of documents at the arbitration Hearing so as
to avoid the need for deposition discovery to establish the
admissibility of a document. If a Party (or counsel for a
Party) unreasonably refuses to stipulate to the
admissibility of a particular document, then the arbitrator
may order the payment of reasonable expenses, including
attorneys' fees spent in establishing the admissibility of
the document in discovery and in establishing the
unreasonableness of the refusal to stipulate.
16.9 Decision. The arbitrator shall make his decision (the
"Decision") in accordance with applicable principles of
substantive and adjectival, procedural law applicable in the
forum of arbitration except insofar as modified by the
chosen rules of arbitration and this Agreement, and except
that the conflict of law rules of that forum shall not be
applied to justify the application of law of some other
forum. Within twenty (20) days after the Hearing, which
Hearing shall begin within sixty (60) days after the close
of the discovery period described in Section 16.8, the
arbitrator shall furnish the Parties with a written award
determination which shall include any injunctive relief to
which a Party may be entitled without findings of fact or
conclusions of law or opinion. Any damages that a court
could award, including as punitive damages and attorneys
fees, may be awarded by the arbitrator pursuant to
applicable law. Judgment upon any award in an arbitration
under Section 16.2 (but not Section 16.3) may be entered and
enforced in any court of competent jurisdiction.
<PAGE>
16.10 Stay of Other Actions; Consolidation.
16.10.1 Stay of Actions. In an action brought in any court on an
issue arising out of or in connection with this Agreement,
which issue may be subject to either binding arbitration
pursuant to either Section 16.2 or 16.3 of this Agreement,
the Parties will agree and consent to any order of the
court, which if satisfied that the specific issue before it
is subject to arbitration, further orders such arbitration
and stays that portion of the action which may be affected
by the decision in the arbitration until the arbitration
proceeding is complete, provided however the court may issue
orders for interim relief to preserve a status quo until an
arbitrator is confirmed and commences the arbitration
proceeding, at which time the arbitrator shall have
authority and jurisdiction to determine all issues relative
to interim relief.
16.10.2 Consolidation. If the issues and questions to be resolved
by arbitration pursuant to this Agreement involve evidence,
witnesses and testimony reasonably necessary to resolve
issues and facts in disputes arising out of related
transactions or agreements, the court proceedings and the
arbitration proceedings may be consolidated by motion of a
Party. If such disputes are at that time currently before a
court of law, the court may authorize consolidation upon
motion of a Party. Any such consolidation shall not be made
if it unduly delays the resolution of the arbitration
proceedings.
16.11 Expenses of Arbitration. Except as expressly provided in this
Agreement, each Party shall bear its own costs and expenses
for arbitration.
<PAGE>
ARTICLE 17 - NO ASSIGNMENT
17.1 Permitted Assignment. This Agreement and the rights and
licenses granted to METROLOGIC hereunder may not be
assigned, directly or indirectly, by METROLOGIC other than
in accordance with the provisions of Section 17.2 hereof
(each, a "Permitted Assignment") including, without
limitation, by means of the sale, transfer or exchange of
stock of any Subsidiary of METROLOGIC, which Subsidiary
acquired such license in a Permitted Assignment. Any
purported assignment of this Agreement, in whole or in part,
or of any license, interest, or other right granted or
created hereby other than in accordance with this Article 17
shall be null and void and of no force and effect and shall
in no way affect the obligations of METROLOGIC hereunder.
17.2 Conditions for Assignment. This Agreement and the rights and
licenses granted to METROLOGIC hereunder may be assigned by
METROLOGIC only (a) with the prior written consent of SYMBOL;
or (b) in accordance with and subject to the conditions set
forth in Article 18 hereof.
17.3 Benefit of Parties Hereto. Except as otherwise provided
herein, this Agreement is solely for the benefit of, and is
binding upon, the Parties hereto and nothing in this
Agreement is intended to convey to any other person or
entity any right, remedy, obligation, or liability under, or
by reason of this Agreement. Subject to the provisions of
Section 17.2 hereof, this Agreement shall inure to the
benefit of and be binding upon METROLOGIC and SYMBOL and
their authorized assigns and successors.
<PAGE>
ARTICLE 18 - CHANGE IN CONTROL
18.1 Notification. METROLOGIC (or its Successor) shall provide written
notification to SYMBOL immediately when it has knowledge of the
occurrence of a Change in Control of METROLOGIC.
18.2 Subsidiary Changes in Control. In the event of the occurrence
of a Change in Control of a Subsidiary of METROLOGIC (or its
Successor) having the benefit of the licenses granted in
Article 3, the rights and licenses granted to such Subsidiary
shall terminate.
18.3 Conditions for Termination. In the event of the occurrence of
a Change in Control of METROLOGIC, or its Successor, SYMBOL
may, by written notice to METROLOGIC or its Successor,
forthwith terminate any or all of the rights and licenses
granted to METROLOGIC or its Successor hereunder, unless each
of the following conditions are fulfilled:
(1) METROLOGIC (or its Successor) and each Person (including each
Person in a chain of ownership up to the ultimate parent) having
(i) beneficial ownership (as defined in Section 1.7 hereof) of
fifty (50%) or more of the combined voting securities of
METROLOGIC or any Successor, or (ii) otherwise in actual control
of the operations of METROLOGIC or any Successor thereof,
maintains its principal executive offices, base operations, and
place of organization in a place other than the Asian Territory;
and
(2) the Person acquiring control of METROLOGIC (or any Successor) is
not (i) PSC, Inc., a New York corporation, or any Affiliate
thereof (hereinafter cumulatively referred to as "PSC") or (ii)
any successor to PSC, or (iii) any successor in interest to the
rights and licenses under SYMBOL patents held by PSC as of the
Execution Date.
18.4 Non-Compliance with Conditions. If at any time during the term of
this Agreement, METROLOGIC or its Successor shall not comply with
the condition set forth in Section 18.3, SYMBOL, in its sole
discretion, shall have the right to terminate any and all of the
rights and licenses granted to METROLOGIC or its Successor
without any further liability to SYMBOL, whereupon any and all
rights granted hereunder to METROLOGIC or its Successor, as the
case may be, shall be terminated and without any further force or
effect.
18.5 Notification. SYMBOL (or its successor) shall provide written
notification to METROLOGIC immediately when it has knowledge of the
occurrence of a Change in Control of SYMBOL. 18.6 Subsidiary Changes
in Control. In the event of the occurrence
of a Change in Control of a Subsidiary of SYMBOL (or its
successor) having the benefit of the licenses granted in
Article 4, the rights and licenses granted to such Subsidiary
shall terminate.
18.7 Conditions for Termination. In the event of the occurrence of
a Change in Control of SYMBOL, or its successor, METROLOGIC
may, by written notice to SYMBOL or its successor, forthwith
terminate any or all of the rights and licenses granted to
SYMBOL or its successor hereunder, unless the following
conditions are fulfilled:
(1) the Person acquiring control of SYMBOL (or any
successor) is not (i) PSC, Inc., a New York
corporation, or any Affiliate thereof (hereinafter
cumulatively referred to as "PSC") or (ii) any
successor to PSC, or (iii) any successor in interest
to the rights and licenses under SYMBOL patents held
by PSC as of the Execution Date.
<PAGE>
18.8 Non-Compliance with Conditions. If at any time during the
term of this Agreement, SYMBOL or its successor shall not
comply with the condition set forth in Section 18.7,
METROLOGIC, in its sole discretion, shall have the right to
terminate any and all of the rights and licenses granted to
SYMBOL or its successor without any further liability to
METROLOGIC, whereupon any and all rights granted hereunder
to SYMBOL or its successor, as the case may be, shall be
terminated and without any further force or effect.
ARTICLE 19 - NOTICES
19.1 Notification Address. Except as otherwise set forth herein,
all notices given in connection with this Agreement shall be
in writing and shall be delivered either by personal delivery,
by certified or registered mail, return receipt requested, or
by express courier or delivery service, addressed to the
Parties hereto at the following addresses:
To SYMBOL: To METROLOGIC:
SYMBOL Technologies, Inc. METROLOGIC Instruments, Inc.
One SYMBOL Plaza Coles Road at Route 42
Holtsville, NY 11742-1300 Blackwood, NJ 08012
Attn: President Attn: President
Fax: 516/244-4110 Fax: 609/232-2932
or at such other address and number as either Party shall have
previously designated by written notice given to the other
Party in the manner hereinabove set forth. Notices shall be
deemed given when received; and when delivered and receipted
for (or upon the date of attempted delivery where delivery is
refused), if hand-delivered, sent by express courier or
delivery service, or sent by certified or registered mail,
return receipt requested.
<PAGE>
ARTICLE 20 - MISCELLANEOUS
20.1 Entire Agreement. This Agreement constitutes the entire
Agreement and understanding between the Parties as to the
subject matter thereof, and supersedes and replaces all prior
or contemporaneous agreements, written or oral, as to the
subject matter. This Agreement may be changed only in writing
stating that it is an amendment or modification to this
Agreement, and signed by an authorized representative of each
of the Parties hereto.
20.2 Unenforceability. Any term or provision of this Agreement
which is invalid or unenforceable or in conflict with the
law of any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or
unenforceability without affecting the validity of the
remaining terms and provisions of this Agreement or affecting
the validity or enforceability of any of the terms and
provisions of this Agreement in any other jurisdiction.
Further, the Parties agree that an arbitrator or a court of
competent jurisdiction in a particular jurisdiction may reform
a specific term of this Agreement should the applicability of
such term or provision be held invalid or unenforceable in
that jurisdiction so as to reflect the intended agreement of
the Parties hereto solely with respect to the applicability of
such provision in said jurisdiction.
20.3 Release. Neither this Agreement nor any provision thereof may
be released, discharged, waived, abandoned or modified in any
manner, except by an instrument in writing signed on behalf of
both of the Parties hereto by their duly authorized officers
or representatives.
20.4 Waiver. Any waiver of a default or condition hereof by either
Party shall not be deemed a continuing waiver of such default
or condition. Any delay or omission by either Party to
exercise any right or remedy under this Agreement shall not be
construed to be a waiver of any such right or remedy or any
right hereunder. All of the rights of either Party under this
Agreement shall be cumulative and may be exercised separately
or concurrently.
20.5 Not a Joint Venture. This Agreement does not constitute a
partnership, joint venture or agency between the Parties
hereto, nor shall either of the Parties hold itself out as
such contrary to the terms hereof by advertising or otherwise,
nor shall either of the Parties become bound or become liable
because of any representation, action, or omission of the
other.
20.6 Press Release. Promptly after the execution of this Agreement,
SYMBOL and METROLOGIC shall issue the joint press release
attached hereto as Exhibit E. Except as may be required by law
or regulation, any additional press release or public
statement pertaining to this Agreement shall be made only
after consultation with and consent of the other Party (whose
consent shall not be unreasonably withheld). Each Party
agrees not to describe this Agreement or the transaction
hereunder in any financial statement or filing with any
Federal or State securities authority or in any disclosure
document prepared in connection with a securities offering
without first giving the other Party an opportunity to
review the description.
20.7 Headings and Overviews. The overviews and headings of
articles, sections and other subdivisions hereof are inserted
only for the purpose of convenient reference and it is
recognized that they may not adequately or accurately describe
the contents of the provisions which they head. Such headings
shall not be deemed to govern, limit, modify or in any other
manner affect the scope, meaning or intent of the provisions
of this Agreement or any part or portion thereof, nor shall
they otherwise be given any legal effect. The overviews are
provided for the purpose of summarizing particular features of
the associated articles or parts thereof. Such overviews may
be used for purposes of evidencing the intent of the parties
with respect to the associated provisions.
<PAGE>
20.8 Grammar. Where the context of this Agreement requires,
singular terms shall be considered plural, and plural terms
shall be considered singular.
20.9 Choice of Law. This Agreement shall be governed by, performed
under and construed in accordance with the laws of the State
of New York without giving effect to the conflicts of law
principles thereof.
In WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year last written below.
SYMBOL TECHNOLOGIES, INC. METROLOGIC INSTRUMENTS, INC.
BY: ____________________ BY: ____________________
TITLE: Chairman and CEO TITLE: President, Chairman of
the Board & CEO
Date:_____________________ Date:_____________________
<PAGE>
EXHIBIT A
Asian Territory
Afghanistan
Bangladesh
Bhutan
Brunei
Cambodia
Hong Kong
India
Indonesia
Iran
Japan
Laos
Malaysia
Mongolia
Myanmar (Burma)
Nepal
North Korea
Pakistan
People's Republic of China
Philippines
Republic of China (Taiwan)
Singapore
South Korea
Sri Lanka
Thailand
Tibet
Vietnam
<PAGE>
EXHIBIT B
Pricing of Purchasable METROLOGIC Products to SYMBOL
Table Of Contents
1. Standard METROLOGIC Triggerless Omnidirectional Scanner Products
2. Custom, Private Label Omnidirectional Scanner Product
3. Standard, Commercially Available METROLOGIC RF Scanner Products,
ScanGlove Products, and Elected New METROLOGIC Products
4. Custom, Private Label METROLOGIC RF Scanner Products, Elected New
METROLOGIC Products and ScanGlove Products
5. METROLOGIC Holographic Scanning Products
<PAGE>
1. Standard METROLOGIC Triggerless Omnidirectional Scanner Products
(hereinafter referred to as a "SCATOSP")
B1.1 In each calendar quarter, the price to SYMBOL for each
designated SCATOSP Model (hereinafter the "Contractual Sales
Price") including all standard accessories, including at least
a standard six (6) foot coiled cable and standard mounting
stand shall be the lesser of the respective amount on Table I
below corresponding to the year of sale and [ ] of
METROLOGIC's [ ] (as hereinafter defined) of such respective
Model sold by METROLOGIC in the immediately preceding calendar
quarter.
TABLE I
Year Maximum Sales Price
1996 [ ]
1997 [ ]
1998 [ ]
All years after 1998 [ ]
The price to SYMBOL for any Accessory not included in the
above shall be [ ] [ ] of METROLOGIC's [ ] of such Accessory
sold by METROLOGIC in the immediately preceding calendar
quarter.
B1.2 The Average Selling Price shall be computed based upon the
average selling price of the respective SCATOSP Model sold
by METROLOGIC only in the U.S., including cable and stand,
but excluding any other accessories or options (such as
holsters, belts, battery packs, or options such as extended
warranties, training and service courses, or additional
documentation). In the event other accessories are
separately priced and invoiced, METROLOGIC shall also
compute and report the Average Selling Price of each such
accessory used with the SCATSOP (hereinafter "Accessory")
B1.3 METROLOGIC shall compute the Average Selling Price
(hereinafter "ASP") for each Model and Accessory in
METROLOGIC's family of SCATOSPs within the first twenty days
of each calendar quarter, and promptly report such ASPs by
Model number and Accessory to SYMBOL if such ASP is below
the Maximum Sales Price for that year as set forth in Table
I above, or confirm for such Model that the ASP for that
Model is equal to or greater than such Maximum Sales Price.
In no event shall METROLOGIC report or otherwise provide to
SYMBOL the actual selling price or bids made on individual
transactions or to individual customers.
B1.4 In the event METROLOGIC has issued any invoices to SYMBOL
during a calendar quarter for a SCATOSP Model at a sales price
that differs from the Contractual Sales Price as computed
pursuant to Paragraph B1.1 above, such invoices shall be
restated to the Contractual Sales Price within thirty days of
the sales price pursuant to Section B1.1 being determined, and
an appropriate credit or debit issued to SYMBOL.
2. Custom, Private Label Omnidirectional Scanner Product (including
"Custom Interface" versions) (hereinafter referred to as a "Custom
Product")
B2.1 At any time during the term of this Agreement, should SYMBOL
desire to have a custom version of a SCATOSP manufactured by
METROLOGIC, (such as, for example, a SCATOSP with a custom
interface) the Parties shall follow the procedure set forth
in Section 11.3 and Exhibit C. SYMBOL shall send METROLOGIC
a detailed product specification and identifying the most
closely related SCATOSP Model or Models. METROLOGIC shall
promptly proceed to design and manufacture such product for
SYMBOL at a price determined from the procedure set forth in
Section B2.2 below and based upon METROLOGIC's reasonable
estimate of tooling costs for the design and manufacture of
the custom version.
<PAGE>
B2.2 In each calendar quarter, the price to SYMBOL (hereinafter
the "Contractual Sales Price") for a custom version of a
SCATOSP, in which mechanical, electrical or other
modifications have been made to a SCATOSP according to
SYMBOL's design specifications, shall be equal to the sum of
(i) the lesser of the respective amount on Table I below
corresponding to the year of sale and [ ] of METROLOGIC's
[ ] of the Corresponding SCATOSPs (as hereinafter defined)
sold by METROLOGIC in the immediately preceding calendar
quarter, plus (ii) an amount equal to METROLOGIC's actual
reasonable cost for parts and direct labor representing
solely the cost of the additional components provided in the
customized SYMBOL version of a SCATOSP. No charge shall be
included in such cost computation by METROLOGIC for scrap,
rework, engineering design, administrative costs or overhead
expenses.
TABLE I
Year Maximum Sales Price
1996 [ ]
1997 [ ]
1998 [ ]
All years after 1998 [ ]
"Corresponding SCATOSP" shall mean a particular Model of
SCATOSP which is most closely related in design and function
to the custom version specified by SYMBOL, i.e., the SCATOSP
Model in which the least number of mechanical and electrical
changes have to be made to produce the custom version.
B2.3 The Average Selling Price shall be computed based upon the
average selling price of the respective SCATOSP Model sold by
METROLOGIC only in the U.S., including cable and stand, but
excluding any other accessories or options (such as holsters,
belts, battery packs, or options such as extended warranties,
training and service courses, or additional documentation). In
no event shall METROLOGIC report or otherwise provide to
SYMBOL the actual selling price or bids made on individual
transactions or to individual customers.
B2.4 METROLOGIC shall compute the Average Selling Price
(hereinafter "ASP") within the first twenty days of each
calendar quarter for a SCATOSP Model together with the cost
for parts and labor associated with each Custom Product, which
shall be the Contractual Sales Price for such Custom Product
for that quarter.
B2.4 In the event METROLOGIC has issued any invoices to SYMBOL
during a calendar quarter at a sales price that differs from
the Contractual Sales Price as computed pursuant to Paragraph
B2.1 above, such invoices shall be restated to the Contractual
Sales Price within thirty days of the correct sales price
being determined, and an appropriate credit or debit issued to
SYMBOL.
3. Standard, Commercially Available METROLOGIC RF Scanner Products,
ScanGlove Products and Elected New METROLOGIC Products, (any of such
products being hereinafter referred to as a "SCAMP")
B3.1 In each calendar quarter, the price to SYMBOL for each
designated METROLOGIC RF Scanner Product Model (hereinafter
the "Contractual Sales Price"), or Elected New METROLOGIC
Products, including all standard accessories, shall be [ ] of
METROLOGIC's [ ] [ ] (as hereinafter defined) of such
respective Model sold by METROLOGIC in the immediately
preceding calendar quarter.
<PAGE>
B.3.2 In each calendar quarter, the price to SYMBOL for each
designated METROLOGIC ScanGlove Product (with or without an RF
option) Model (hereinafter the "Contractual Sales Price"),
including all standard accessories, shall be [ ] of
METROLOGIC's [ ] (as hereinafter defined) of such respective
Model sold by METROLOGIC in the immediately preceding calendar
quarter.
B3.3 The Average Selling Price shall be computed based upon the
average selling price of the respective SCAMP Model sold by
METROLOGIC in the U.S. but excluding any accessories or
options (such as holsters, belts, power supplies, or options
such as extended warranties, training and service courses, or
additional documentation). In the event accessories are
separately priced and invoiced, METROLOGIC shall also
compute and report the Average Selling Price of each such
accessory. In no event shall METROLOGIC report or otherwise
provide to SYMBOL the actual selling price or bids made on
individual transactions or to individual customers.
B3.4 METROLOGIC shall compute the Average Selling Price
(hereinafter "ASP") for each Model in METROLOGIC's family of
SCAMPs within the first twenty days of each calendar quarter,
and promptly report such ASPs by Model number to SYMBOL.
B3.5 In the event METROLOGIC has issued any invoices to SYMBOL
during a calendar quarter for a SCAMP Model at a sales price
that differs from the Contractual Sales Price as computed
pursuant to Paragraph B3.1 above, such invoices shall be
restated to the Contractual Sales Price within thirty days of
the sales price pursuant to Section B3.1 being determined, and
an appropriate credit or debit issued to SYMBOL.
4. Custom, Private Label METROLOGIC RF Scanner Products, Elected New
METROLOGIC Products and ScanGlove Products (including "Custom
Interface" versions) (hereinafter referred to as a "Custom Product")
B4.1 At any time during the term of this Agreement, should SYMBOL
desire to have a custom version of a SCAMP manufactured by
METROLOGIC, (such as, for example, a SCAMP with a custom
interface), SYMBOL shall send METROLOGIC a written Request for
Quotation (RFQ) including a detailed product specification and
identifying the most closely related SCAMP Model or Models.
METROLOGIC shall respond to the RFQ with a firm quotation to
promptly proceed to manufacture such product for SYMBOL at a
price determined from the procedure set forth in Section B4.2
below and based upon METROLOGIC's reasonable estimate of
projected component and labor costs for the manufacture of
the custom version.
B4.2 In each calendar quarter, the price to SYMBOL (hereinafter the
"Contractual Sales Price") for a custom version of a SCAMP, in
which mechanical, electrical or other modifications have been
made to a SCAMP according to SYMBOL's design specifications,
shall be equal to the sum of (i) [ ] of METROLOGIC's [ ]of the
Corresponding SCAMP (as hereinafter defined) sold by METROLOGIC
in the immediately preceding calendar quarter, plus (ii) an
amount equal to METROLOGIC's actual reasonable cost for parts
and direct labor representing solely the cost of the additional
components provided in the customized SYMBOL version of a
SCAMP. No charge shall be included in such cost
computation by METROLOGIC for engineering design or overhead
expenses.
"Corresponding SCAMP" shall mean a particular Model of SCAMP
which is most closely related in design and function to the
custom version specified by SYMBOL, i.e., the SCAMP Model in
which the least number of mechanical and electrical changes
have to be made to produce the custom version.
<PAGE>
B4.3 The Average Selling Price shall be computed based upon the
average selling price of the respective SCAMP sold by
METROLOGIC only in the U.S., including cable and stand, but
excluding any other accessories or options (such as holsters,
belts, battery packs, power supplies, or options such as
extended warranties, training and service courses, or
additional documentation. In no event shall METROLOGIC report
or otherwise provide to SYMBOL the actual selling price or
bids made on individual transactions or to individual
customers.
B4.4 METROLOGIC shall compute the Average Selling Price
(hereinafter "ASP" within the first twenty days of each
calendar quarter for a SCAMP Model together with the cost for
parts and labor associated with each Custom Product, which
shall be the Contractual Sales Price for such Custom Product
for that quarter.
B4.5 In the event METROLOGIC has issued any invoices to SYMBOL
during a calendar quarter at a sales price that differs from
the Contractual Sales Price as computed pursuant to Paragraph
B4.1 above, such invoices shall be restated to the Contractual
Sales Price within thirty days of the correct sales price
being determined, and an appropriate credit or debit issued to
SYMBOL.
5. METROLOGIC Holographic Scanning Products
B5.1 The pricing of METROLOGIC Holographic Scanning Products to
SYMBOL shall be as mutually agreed by the Parties from time to
time, but in no event shall be greater than the most favorable
price granted to any METROLOGIC customer at the time of the
price quotation.
<PAGE>
EXHIBIT C
Terms and Conditions of Sale
Table of Contents
1. Scope
2. Definitions
3. Purchase Orders
4. Design and Production of Custom Qualifying Products and/or Custom
Elected New METROLOGIC Products
5. Design and Production of Modified Qualifying Products and Modified
Elected New METROLOGIC Products
6.. Specifications, Engineering and Other Changes
7. Engineering Change Documentation
8. Acceptance of Engineering Samples
9. Inspection of Final Products
10. User and Other Documentation
11. Ship Acceptance and Regulatory Compliance
12. Delivery and Schedules
13. Reliability Goals
14. Service Training
15. Post Warranty Maintenance Service
16. Infringement Indemnification
17. Price
18. Invoices, Payment
19. Technical Consulting Services
20. Drawings, Source Code
21. Confidential Information
22. Insurance
23. Personal Injury Indemnification
24. Force Majeur
25. Limitation of Liability
26. Changes
27. Spare Parts and Documentation
28. Incorporation of Exhibits
29. Order of Precedence
30. Software License
31. Miscellaneous
<PAGE>
EXHIBIT I.
Appendix A. Product Specification
Appendix B. Scanner Customization Drawings
Appendix C. Scanner Modification Specification and Drawings (Section 5)
Appendix D. Statement of Work (Section 5)
Appendix E. Packaging and Labeling Specification
Appendix F. Schedule Information
Appendix G. Failure Report Requirements
Appendix H. Support Requirements
EXHIBIT II Acceptance Test Plan
Appendix A. Product Test Plan
Appendix B. System Test Plan
Appendix C. Quality Standard
EXHIBIT III Option for Post-Warranty Maintenance
EXHIBIT IV Pricing of Spare Parts
<PAGE>
1. SCOPE
1.1 General. These Terms and Conditions of Sale (or hereinafter "Terms
and Conditions") apply to the sale by METROLOGIC to SYMBOL of METROLOGIC
Purchasable Products, pursuant to the applicable Part of Article 11.
2. DEFINITIONS
2.1 "Acceptance Test Criteria" shall mean the operational, physical,
electrical and environmental specifications set by METROLOGIC for a specific
METROLOGIC Purchasable Product, including Custom Qualifying Product, e.g., a
Custom Interface Omnidirectional Scanner Product supplemented by specified
SYMBOL custom specifications (e.g. the custom color of housing meeting the
specifications set forth by SYMBOL). For METROLOGIC Qualifying Product,
METROLOGIC Holographic Scanning Products, and Elected New METROLOGIC Products,
including any applicable customized or modified version thereof, such
specifications shall be substantially similar to that for corresponding
standard, commercially available METROLOGIC products, unless otherwise mutually
agreed by the Parties.
2.2 "Acceptance Test Plan" shall mean a mutually agreed plan for
testing the operational, physical, electrical, and environmental performance of
a specific METROLOGIC Purchasable Product against the applicable Acceptance Test
Criteria.
2.3 "Accessories" shall mean attachment devices, batteries, cables,
antennas, network control units, and transceivers which are required to
effectively use the METROLOGIC Purchasable Product in accordance with its
Product Specifications and which are normally provided to the customer on an
itemized basis and separately invoiced..
2.4 "Alpha Units" shall mean METROLOGIC Purchasable Product delivered
prior to the Ship Acceptance Date which may not be manufactured with the same
components and methods as a Production Unit, and may not conform to all Product
Specifications.
2.5 "Beta Units" shall mean METROLOGIC Purchasable Product delivered
prior to the Ship Acceptance Date which is manufactured with substantially the
same components and manufacturing methods as Production Units, but may not
conform to all Product Specifications.
2.6 "METROLOGIC Standard Product Drawings" shall mean the drawings
(including CAD models, schematics, and printouts) as currently used by
METROLOGIC for the manufacture of a specified METROLOGIC Standard Product which
are necessary for SYMBOL to perform a customization design of such METROLOGIC
Standard Product and for SYMBOL to produce all necessary Scanner Customization
Drawings or Scanner Modification Specification and Drawings for METROLOGIC to
produce a Custom Purchasable Product, or, as the case may be, a Modified
METROLOGIC Product.
2.6 "Pilot Units" shall mean METROLOGIC Purchasable Product delivered
prior to the Ship Acceptance Date which is manufactured with the same components
and manufacturing methods as Production Units, and which is intended and
expected to conform to all Product Specifications.
2.7 "Post Warranty Maintenance" shall mean the agreement for service by
METROLOGIC of METROLOGIC Purchasable Products during the period after expiration
of the warranty provided in Section 11.9 of the Agreement for customers of
SYMBOL who have purchased such products from SYMBOL for a fee and according to
the procedures.
2.8 "Product Specification" shall mean the operational, physical,
electrical, and environmental specification set forth by METROLOGIC in its most
current published product description for a standard METROLOGIC Purchasable
Product and the corresponding specification for a Custom Purchasable Product, or
the specification as agreed by the Parties and set forth herein as Exhibit I,
Appendix A, for any other METROLOGIC Purchasable Product that SYMBOL may
purchase hereunder.
2.9 "Production Units" shall mean METROLOGIC Purchasable Product
delivered after the Ship Acceptance Date, and which fully conforms with all
Product Specifications; the term "Production Units" shall also apply to Alpha
Units, Beta Units and Pilot Units that have been upgraded, as required, to fully
conform to all Product Specifications.
<PAGE>
2.10 "Scanner Customization Drawings" shall mean drawings (including
CAD models, schematics and printouts) provided by SYMBOL to METROLOGIC in
connection with a customized METROLOGIC Scanner Product based on a specific
standard METROLOGIC Scanner Product and derived from METROLOGIC Standard Product
Drawings, such drawings to specify all artwork (e.g. labels and logos) to be
applied to the customized METROLOGIC Scanner Products, and the Scanner Interface
defined by SYMBOL to be utilized in the Custom Qualifying Product.
2.11 "Scanner Modification Specification and Drawings" shall mean a
detailed product specification and drawings (including CAD models, schematics
and computer printouts) provided by SYMBOL to METROLOGIC in connection with a
Modified METROLOGIC Scanner Product based on a specific standard METROLOGIC
Scanner Product and which specifies artwork (e.g. labels and logos) to be
applied to the Modified METROLOGIC Scanner Product, and any other structural,
electrical, optical and/or functional modifications to the standard METROLOGIC
Scanner Product (e.g. redesign of housing, inclusion of manually actuated
trigger, etc.) mutually agreed to in writing by the Parties.
2.12 "Ship Acceptance Date" shall mean the date upon which SYMBOL
notifies METROLOGIC that the METROLOGIC Purchasable Product has successfully
passed all requirements specified in the Acceptance Test Plan.
2.13 "Spare Parts" shall mean all components and subassemblies of
METROLOGIC Purchasable Products sold by METROLOGIC to SYMBOL under this
Agreement as normally used for product service and maintenance.
2.14 "Statement of Work" shall mean the mutually agreed plan and
procedure for the design, development, and engineering of a Modified METROLOGIC
Standard Product or Modified Elected New METROLOGIC Product in accordance with
the Scanner Modification Specification and Drawings, including the production of
a first Alpha unit of such product.
Any defined term used herein not defined above shall have the meaning
set forth in Article 1 of the Agreement between SYMBOL and METROLOGIC effective
January 1, 1996 (the "Agreement").
3. PURCHASE ORDERS
3.1 General Procurement Procedure. SYMBOL shall purchase units of
METROLOGIC Purchasable Product Accessories, Spare Parts, and Post-Warranty
Maintenance Services by releasing purchase orders to METROLOGIC for such units
consistent with the applicable Part of Article 11 of the Agreement. Each such
SYMBOL purchase order shall list (i) the quantity of units of METROLOGIC
Purchasable Product and Accessories ordered by SYMBOL, (ii) the sales price of
each unit and Accessory as provided pursuant to Exhibit B (or as mutually
agreed, if not set forth therein), and (iii) the requested date or dates of
delivery (i.e. shipment). Such purchase orders shall be sent to METROLOGIC,
either by (A) "Next Day" air courier service or United States mail, in
duplicate; or (B) facsimile device over telecommunications line ("FAX"), a
numbered, signed order letter or purchase order, referencing the applicable
Purchasing Provision and containing such information as quantity, product
identity, delivery location(s), delivery date(s), net purchase price and
installation fee (if applicable) of the METROLOGIC Purchasable Product,
Accessories, or Spare Parts being ordered; or (C) regular mail ("the Order").
3.2 Order Entry. SYMBOL shall address all Orders to:
METROLOGIC Instruments, Inc.
Coles Road at Route 42
Blackwood, NJ 08012
Attn: Sales Administration.
METROLOGIC shall not honor any telephone, walk-in, or other form of
order from SYMBOL's apparent representatives without proper authorization, which
authorization shall be evidenced by SYMBOL's issuance of an order as required by
Section 3.1
3.3 Order Acceptance. METROLOGIC shall accept or reject each Order
within twenty four (24) hours of receipt thereof, and in the event of rejection
thereafter provide to SYMBOL written notice of the reasons therefor, within
forty eight (48) hours after receipt of such Order. Orders shall be effective
upon acceptance by METROLOGIC.
<PAGE>
3.4 Conditional Orders. SYMBOL may place an initial order for
METROLOGIC Purchasable Product ("Initial Conditional Order") substantially
coincidental and consistent with the Parties' mutual agreement on the specifics
of the Product Specification and METROLOGIC's capacity to manufacture and
deliver units of approved Pilot Unit, as discussed above. Such Initial
Conditional Order shall be conditioned upon the occurrence of the Ship
Acceptance Date on or before the first scheduled shipment of Production Units of
the specific METROLOGIC Purchasable Product. In the event that the Ship
Acceptance Date does not occur on or before such date, the Parties agree to
arbitrate under Article 16 the issue of whether the METROLOGIC Purchasable
Product complies with the Acceptance Test Plan. If it is determined by the
arbitration that the METROLOGIC Purchasable Product does not meet the Acceptance
Test Plan, then SYMBOL may terminate the Initial Conditional Order without any
obligation or liability to METROLOGIC.
3.5 Buffer Stock. Starting on a date that is three (3) months after
METROLOGIC completes delivery of products ordered under the Initial Conditional
Order, METROLOGIC shall manufacture and hold in stock a buffer stock of a
certain number of such finished METROLOGIC Purchasable Products, as computed
hereunder, which can be ordered by SYMBOL. Such buffer stock will be shipped
upon SYMBOL placing a Purchase Order, with a maximum of one week turnaround.
Should an order by SYMBOL deplete METROLOGIC's buffer stock, METROLOGIC agrees
to replenish stock within 30 days of such order. For each product type purchased
under the Terms and Conditions hereof, the quantity of the buffer stock shall
not be less than the average monthly quantity of that particular product type
purchased by SYMBOL during the previous three month period, and shall not be
greater than 500 units. SYMBOL agrees to purchase all buffer stock units upon
the termination or expiration of the applicable Part of Article 11. As product
models change, METROLOGIC shall provide replacement units of more current
revisions to rotate buffer stock by accepting returns of models to be
discontinued and to ensure that current models are in buffer stock at all times.
3.6 Retention of Rights in Computer Programs. The sale of each item of
METROLOGIC Purchasable Product to SYMBOL hereunder includes the sale of a copy
of any computer programs embedded or incorporated therein and does not
constitute an assignment of METROLOGIC's intellectual property rights therein.
SYMBOL acknowledges that METROLOGIC shall retain all patent, copyright, trade
secret, and other intellectual property rights METROLOGIC may have in such
computer program portions of the METROLOGIC Purchasable Product.
4. DESIGN AND PRODUCTION OF CUSTOM QUALIFYING PRODUCTS AND/OR
CUSTOM ELECTED NEW METROLOGIC PRODUCTS
4.1 Delivery Of Scanner Customization Drawings By SYMBOL. At any time
during the term of the applicable Part of Article 11, should SYMBOL elect to
have METROLOGIC design and manufacture a Custom Qualifying Product and/or a
Custom Elected New METROLOGIC Product, SYMBOL shall request that METROLOGIC
provide SYMBOL with METROLOGIC Standard Product Drawings of the related
METROLOGIC Standard Product to enable SYMBOL to customize such product by making
minor modifications to the drawings, and within thirty (30) days after such
request, METROLOGIC shall provide SYMBOL with the appropriate and necessary
drawings. After completion of the customized design, SYMBOL shall physically or
electronically deliver Scanner Customization Drawings of the Custom Qualifying
Product and/or Elected New METROLOGIC Product to METROLOGIC. METROLOGIC shall
promptly acknowledge in writing receipt of and the completeness of the Scanner
Customization Drawings delivered by SYMBOL for production purposes, (or if such
drawings are incomplete, shall provide SYMBOL with the requirements for any
additional drawings needed by METROLOGIC) and provide SYMBOL with the estimated
delivery date of the Alpha Unit corresponding to the customized product.
4.2 Design and Manufacture. METROLOGIC shall design, manufacture, and
deliver Alpha Units, Beta Units, and Pilot Units of Custom Qualifying Product
and/or Custom Elected New METROLOGIC Product to SYMBOL upon receipt of an
Initial Conditional Order or firm purchase order therefor.
4.3. Testing. METROLOGIC shall test the METROLOGIC Custom Qualifying
Product and/or Elected New METROLOGIC Product in accordance with the Acceptance
Test Plan.
<PAGE>
4.4 Corrective Action to Meet Criteria by METROLOGIC. If any of the
Pilot Units do not successfully pass the Acceptance Test Criteria in accordance
with the Acceptance Test Plan attached to the Initial Conditional Order or
purchase order, ( the Acceptance Test Plan being Exhibit II of these Terms and
Conditions of Sale). SYMBOL shall review the test results with METROLOGIC and
METROLOGIC shall determine the cause of failure. METROLOGIC shall promptly
modify the Custom Qualifying Products and/or Elected New METROLOGIC Products as
necessary, or its procurement, inspection, or manufacturing processes as
necessary to cause it to pass the Acceptance Test Criteria..
4.5 Term and Supply. Following the Ship Acceptance Date, METROLOGIC
shall make Custom Qualifying Product and/or Elected New METROLOGIC Product and
sell to SYMBOL on a requirements basis during the entire term of the applicable
Part of Article 11 of this Agreement under these Terms and Conditions in such
quantities of the Custom Qualifying Product and/or Elected New METROLOGIC
Product as SYMBOL may order hereunder.
4.6 Upgrade of Pre-Production Units. Upon request by SYMBOL, following
the Ship Acceptance Date, METROLOGIC shall upgrade all Alpha Units, Beta Units
and Pilot Units to Production Units, based on a mutually agreeable upgrade
schedule. The cost to SYMBOL for upgrading a Beta Unit, if required, shall be
40% of the purchase price of a Production Unit when ordered in quantities
commensurate with the Initial Conditional Order, and the cost to SYMBOL for
upgrading a Pilot Unit, if required, shall be 20% of such purchase price. In the
event that SYMBOL requests that an Alpha Unit be upgraded, SYMBOL's cost for
such upgrade shall be 60% of such purchase price.
4.7 Changes and Modifications. In the event SYMBOL has issued a
purchase order for a specific Custom Qualifying Product and/or Custom Elected
New METROLOGIC Product, METROLOGIC may not, without SYMBOL's written consent,
make changes to such specific customized product at any time prior to a date
that is four months after the date of the last scheduled delivery under any
outstanding purchase Order for such specific Customized product if any such
change would adversely affect: (i) form, fit or function of the specified Custom
Qualifying Product and/or Custom Elected New METROLOGIC Product, or (ii)
compatibility of the product with the specified Scanner Interface, or (iii)
price or delivery schedule of the specific Custom Qualifying METROLOGIC Product
and/or Custom Elected New METROLOGIC Product, or (iv) compatibility of the
product with the host computer and/or network for which it was intended, or (v)
the applicable Product Specification. METROLOGIC's changes to specific products
shall be in accordance with Section 6 and 7 of these Terms and Conditions.
5. DESIGN AND PRODUCTION OF MODIFIED QUALIFYING PRODUCTS AND
MODIFIED ELECTED NEW METROLOGIC PRODUCTS.
5.1 Delivery Of Scanner Modification Specification and Drawings By
SYMBOL. At any time during the term of the applicable Part of Article 11, should
SYMBOL and METROLOGIC mutually agree in writing that METROLOGIC design and
manufacture a Modified METROLOGIC Qualifying Product (MMQP) and/or Modified
Elected New METROLOGIC Product (MENMP), SYMBOL may purchase the same under the
applicable Part of Article 11. Upon such mutual agreement, SYMBOL may request
that METROLOGIC provide SYMBOL with METROLOGIC Standard Product Drawings of the
related METROLOGIC product to enable SYMBOL to produce a proposed modified
design and within thirty (30) days after such request, METROLOGIC shall provide
SYMBOL with the appropriate and necessary drawings. In order to develop the
modified design by engineering efforts of SYMBOL and/or METROLOGIC, the Parties
shall agree on a Statement of Work which upon completion shall be made part of
Exhibit I as Appendix D, thereof, which shall be part of these Terms and
Conditions. As more particularly provided pursuant to the Statement of Work,
SYMBOL shall physically or electronically deliver to METROLOGIC Scanner
Modification Specification and Drawings of the proposed Modified METROLOGIC
Qualifying Product and/or Modified Elected New METROLOGIC Product. METROLOGIC
shall promptly acknowledge in writing receipt of and the completeness of the
drawings delivered by SYMBOL for production purposes (or if such drawings are
incomplete, shall provide SYMBOL with the requirements for any additional
drawings needed by METROLOGIC). METROLOGIC shall design and produce the MMQP and
MENMP in accordance with the Statement of Work and provide and the estimated
delivery date of the first Alpha Unit corresponding to the modified product.
5.2 Design and Manufacture. METROLOGIC shall design, manufacture, and
deliver Alpha Units, Beta Units, and Pilot Units of Modified METROLOGIC
Qualifying Product and/or Modified Elected New METROLOGIC Product, as
applicable, to SYMBOL upon the receipt of a purchase Order therefor.
<PAGE>
5.3 Testing. METROLOGIC shall design and test the Modified METROLOGIC
Qualifying Product and/or Modified Elected New METROLOGIC Product as applicable
in accordance with the Statement of Work, the provisions of this Section, and
these Terms and Conditions. SYMBOL has the right to participate in and
reasonably review all testing and test procedures.
5.4 Corrective Action to Meet Criteria. If any of the Pilot Units do
not successfully pass the Acceptance Test in accordance with the Acceptance Test
Plan, SYMBOL shall review the test results with METROLOGIC and METROLOGIC will
determine the cause of failure. METROLOGIC shall promptly modify the Modified
Qualifying METROLOGIC Products and/or Modified Elected New METROLOGIC Products,
or its procurement, inspection, or manufacturing processes as necessary to cause
it to pass the Acceptance Test. If, as a result of execution of the Acceptance
Test Plan, modifications to the Modified Qualifying Product and/or Modified
elected New METROLOGIC Product, Product Specifications, or Acceptance Test Plan
may be required, such modifications will be implemented in accordance with
Sections 6 and 7 of these Terms and Conditions.
5.5 Changes and Modifications. In the event SYMBOL has issued a
purchase Order for a specific Modified Qualifying METROLOGIC Product and/or
Modified Elected New METROLOGIC Product, METROLOGIC may not, without SYMBOL's
written consent make changes to such specific product at any time prior to a
date that is four months after the date of the last scheduled delivery under any
outstanding purchase Order for such specific product, if such a change would
adversely affect: (i) form, fit or function of the Modified Qualifying
METROLOGIC Product and/or Modified Elected New METROLOGIC Product, or (ii)
compatibility of the product with the specified Scanner Interface or (iii) price
or delivery schedule of the Modified Qualifying METROLOGIC Product and/or
Modified Elected New METROLOGIC Product, or (iv) compatibility with the host
computer and/or network for which it was intended, or (v) the applicable Product
Specification. METROLOGIC changes shall be in accordance with Sections 6 and 7
of these Terms and Conditions.
5.6 Term and Supply. Following the Ship Acceptance Date, METROLOGIC
shall make Modified Qualifying METROLOGIC Product and/or Modified Elected New
METROLOGIC Product available and sell to SYMBOL on a requirements basis during
the entire term of the applicable Part of Article 11 such quantities of the
Modified Qualifying METROLOGIC Product and/or Modified Elected New METROLOGIC
Product as SYMBOL may order under these Terms and Conditions. From time to time
during the Term, either party may suggest to the other certain design
modifications or engineering changes to the Modified Qualifying METROLOGIC
Product and/or Modified Elected New METROLOGIC Product , or changes as may
otherwise be required, which may cause an increase or decrease in the price of,
or the time required to produce and deliver, the Modified Qualifying METROLOGIC
Product and/or Modified Elected New METROLOGIC Product. The Parties will agree
upon the terms of a change order and any necessary adjustments in contract price
and/or shipment schedule resulting therefrom.
5.7 Upgrade of Pre-Production Units. Upon request by SYMBOL, following
the Ship Acceptance Date, METROLOGIC shall upgrade all Alpha Units, Beta Units
and Pilot Units to Production Units, based on a mutually agreeable upgrade
schedule. The cost to SYMBOL for upgrading a Beta Unit, if required, shall be
40% of the purchase price of a Production Unit when ordered in quantities
commensurate with the Initial Conditional Order, and the cost to SYMBOL for
upgrading a Pilot Unit, if required, shall be 20% of such purchase price. In the
event that SYMBOL requests that an Alpha Unit be upgraded, SYMBOL's cost for
such upgrade shall be 60% of such purchase price.
5.8 Reimbursement to METROLOGIC by SYMBOL for Out-of-Pocket Expenses
for Tooling, and Incremental Material Costs. SYMBOL will reimburse METROLOGIC or
otherwise pay for all reasonable out of pocket expenses incurred by METROLOGIC
in connection with design and manufacture of tooling (e.g. injection molds,
fixtures, tools, etc.) used in manufacturing of both the Alpha Unit(s), approved
Alpha Unit, Pilot Unit(s), and approved Pilot Unit of the Modified Qualifying
METROLOGIC Product and/or Modified Elected New METROLOGIC Product. METROLOGIC
shall invoice SYMBOL each thirty (30) days for such expenses. In addition to the
out-of pocket expenses set forth above, and the Purchase Price for METROLOGIC
set forth in Exhibit B herein, SYMBOL will pay METROLOGIC for the Incremental
Material Costs associated with the design and manufacture of each Modified
Qualifying METROLOGIC Product and/or Modified Elected New METROLOGIC Product to
SYMBOL under the Purchasing Provision.
<PAGE>
5.9 Invoices. METROLOGIC will document and inform SYMBOL of the out of
pocket expenses noted in Section 5.8 above by providing SYMBOL with copies of
invoices of charges by vendors associated therewith within thirty (30) days
after receipt of such invoices by METROLOGIC.
6. ACCEPTANCE OF PILOT UNITS OF SPECIAL PRODUCTS
6.1 Inspection and Evaluation. SYMBOL shall as soon as possible but no
later than thirty (30) days from the date of its receipt from METROLOGIC of each
iteration of the engineering samples or Pilot Units delivered by METROLOGIC,
inspect and evaluate the same in accordance with inspection and evaluation
standards as may be agreed upon by the Parties and give METROLOGIC written
notice of the results of such inspection and evaluation. Failure to send such
notice to METROLOGIC within thirty (30) days after receipt of a Pilot Unit shall
be deemed to be an acceptance of such iteration of Pilot Units. If, as a result
of such inspection and evaluation, SYMBOL determines that the Pilot Units
furnished to it by METROLOGIC hereunder fully satisfy the Product Specifications
set forth in Exhibit A hereto, it shall so state in the aforesaid written
notice, and in such case the Pilot Unit shall be deemed accepted by SYMBOL and
shall be the model for subsequent Production Units. Such acceptance shall
authorize METROLOGIC to release to production the design of the accepted Pilot
Unit (hereinafter, the "Release to Production").
7. ACCEPTANCE TEST PLAN
7.1 METROLOGIC and SYMBOL shall agree on appropriate Acceptance Test
Criteria and an Acceptance Test Plan, prior to shipment of Production Units.
Such inspection standards and procedures as may be agreed upon by the parties
and shall be attached to these Terms and Conditions as Exhibit II and made a
part hereof.
8. ENGINEERING AND OTHER CHANGES TO PRODUCT SPECIFICATIONS
8.1 Procedure. METROLOGIC may, without obtaining prior written consent
from SYMBOL, make changes to the Product Specification of any METROLOGIC
Purchasable Product except for Special Products. If METROLOGIC desires such
changes, it shall first notify SYMBOL in writing and within thirty (30) days
from receipt of notice from METROLOGIC, SYMBOL shall notify METROLOGIC of its
view whether or not such changes are acceptable from SYMBOL's perspective in
connection with product marketability to SYMBOL's customers, and the future
likelihood of Symbol continuing to purchase the affected METROLOGIC product.
Documentation pertaining to the change made by METROLOGIC shall be provided to
SYMBOL to permit SYMBOL to make an engineering evaluation of the proposed
change.
8.2 Superseding Specifications. For the purpose of these Terms and
Conditions, changes to the Product Specification accepted by SYMBOL under
Section 6.1 of these Terms and Conditions shall be deemed to amend and supersede
the Product Specifications then currently applicable to the Product, unless
expressly noted on the new Product Specifications that the new Product
Specifications are applicable only to a variant of the METROLOGIC Product such
as a customer-specific model of the METROLOGIC Product.
8.3 Compatibility. Prior to any amendment to the Product Specifications
pursuant to this Article 8 becoming effective, all METROLOGIC Purchasable
Products and Spare Parts shipped by METROLOGIC to SYMBOL shall conform to the
then existing Product Specification. All METROLOGIC Purchasable Products and
Spare Parts with amended Product Specifications that are considered by both
Parties significant enough to affect backward compatibility, performance
criteria, Product Specification or any other factors shall be subject to new
inspection, testing and review in accordance with Sections 8 and 9 hereof. After
the effective date of any amendment, all METROLOGIC Purchasable Products shipped
by METROLOGIC shall conform to such amended Product Specifications, except
METROLOGIC shall continue to make available, for a mutually agreed period of
time established on a case-by-case basis for each product and for each
amendment, parts under all previous Product Specifications (unless change to the
part does not affect its interchangeablity with parts manufactured before such
time). Interchangeability includes form, fit and function. METROLOGIC guarantees
forward compatibility of decoder and application interface software, if any,
which may be included in the finished production product.
<PAGE>
8.4 SYMBOL Requested Changes. From time to time, after Release to
Production, (as defined in Section 8.1) SYMBOL may propose additions or changes
to the Product Specification for the purpose of providing a product variant or
product upgrade. METROLOGIC shall consider the feasibility of any such proposal
and shall, within a reasonable period of time, not to exceed thirty (30) days
after receipt of the proposal, furnish to SYMBOL the written comments of
METROLOGIC regarding such proposed changes, including its willingness or
non-willingness to implement the same, the non-recurring cost to implement such
change and/or the effect, if any, on the price of the METROLOGIC Product having
the SYMBOL revised Product Specification, and the time schedule required for
implementation. In the event SYMBOL and METROLOGIC agree to implement such
change, documentation pertaining to such changes shall be made pursuant to
Section 7 hereunder and all costs associated with such new or modified
documentation shall be itemized and included in METROLOGIC's response to
SYMBOL's proposal.
8.5 Quality Related Changes. If either Party determines that changes
are necessary for safety or due to the epidemic failure of the Products or parts
and components thereof to perform in accordance with the Product Specifications,
or to meet the Quality Standards set forth in Exhibit II, Appendix C, METROLOGIC
shall respond with a written corrective action response plan as soon as possible
but no later than three (3) business days after notification, and METROLOGIC
shall execute such plan to enable SYMBOL to make the required changes in
installed Products and Products in production within fifteen (15) business
days after notification by SYMBOL to proceed with such plans. METROLOGIC shall
promptly make the appropriate engineering changes by implementing Engineering
Change Orders ("ECOs") within such fifteen (15) day period to all such
affected Products and parts thereof to be delivered to SYMBOL thereafter.
8.6 Change Induced Problems. If SYMBOL determines, after any
engineering or any other change, that Products or parts thereof do not operate
in accordance with the Products Specification or fail to meet the Quality
Standards set forth in Exhibit II, Appendix C attached hereto, then upon
SYMBOL's request, METROLOGIC shall evaluate any defective product or part and
notify SYMBOL of the result of its evaluation and its corrective action plan, if
needed, within thirty (30) days after receipt of such request from SYMBOL.
8.7 Parts Obsolescence. If any engineering or any other change
initiated by METROLOGIC obsoletes any Spare Parts of a METROLOGIC Purchasable
Product purchased by SYMBOL, METROLOGIC shall so notify SYMBOL, in writing, and
shall accept the return of such obsolete parts and reimburse SYMBOL its cost or,
at METROLOGIC's option, replace all parts so returned with the changed or
modified part at no additional charge to SYMBOL.
8.8 Changes in Parts. If any change to Products or parts affects the
interchangeability of latest version and previous version parts, METROLOGIC
shall provide a different part number for the latest version parts, and all
Products thereafter delivered by METROLOGIC shall be promptly identified to
SYMBOL by serial number so as to reflect which version part is used therein.
METROLOGIC will confirm system configurations, models, and versions of material
parts and other technical descriptives reasonably requested by SYMBOL to enable
SYMBOL to service and support the METROLOGIC Products.
9. ENGINEERING CHANGE DOCUMENTATION
9.1 Modification and Approval. In order to ensure appropriate records
are maintained by SYMBOL for regulatory, service, and document control procedure
reasons, METROLOGIC shall provide SYMBOL with all proposed Engineering Change
Orders (ECOs) to METROLOGIC Products purchased hereunder at least thirty days
prior to their proposed implementation for review, and to the extent that such
ECO pertain to a Custom Qualified Product for approval by SYMBOL. Following
review or approval by SYMBOL, as the case may be, METROLOGIC shall, within
fifteen (15) business days after issue of the ECO by METROLOGIC, provide SYMBOL
with a final copy of each Engineering Change Order ("ECO") or like documentation
issued by METROLOGIC with respect to operation or maintenance of the applicable
METROLOGIC Product. The cost shall be borne by METROLOGIC if, due to the sole
fault of METROLOGIC, the ECO is initiated at METROLOGIC's initiative or pursuant
to Section 8.5; otherwise the cost of preparing such documentation shall be
borne by SYMBOL.
<PAGE>
10. USER AND SERVICE DOCUMENTATION
10.1 Documentation. For each METROLOGIC Product purchased hereunder,
METROLOGIC shall promptly furnish to SYMBOL, at METROLOGIC's its expense, two
(2) copies of the following documentation (a) service related engineering
drawings which may include drawings of optical and mechanical assemblies,
electrical schematics, and logic and timing diagrams; (b) complete user
adjustment, operation and installation instructions and specifications; (c)
service test procedures and a list of any special tools and service test
equipment utilized by METROLOGIC; (d) user manuals and application notes ; (e)
print-out of service related software and/or firmware source listings and
related documentation; (f) engineering drawings, logic diagrams and
documentation necessary for interfacing the product to the remainder of the
system in which it has been designed for use; and (g) any other published
METROLOGIC service documentation concerning the operation and maintenance of the
product which will permit SYMBOL to develop at its own option, its own
customized operator and service manuals otherwise required by SYMBOL for
marketing, service, support and repair of such Products. The foregoing
METROLOGIC material shall be: (i) of the type generally made available to
METROLOGIC's customers and/or used by METROLOGIC's sales and service personnel,
as applicable; (ii) in a form capable of reproduction; and (iii) updated by any
new materials from time to time as they become available. SYMBOL shall have the
unrestricted right solely in connection with the METROLOGIC Product purchased
hereunder to copy, modify, and use and have copied, modified, and used any such
documentation for providing desired service or user manuals or the like
concerning the Product.
10.2 Published Accompanying User Documentation. Unless otherwise
directed by METROLOGIC, SYMBOL shall provide METROLOGIC with camera ready
artwork and text for the printing of a "Quick Reference Guide" user
documentation by METROLOGIC which METROLOGIC shall then pack with the Product
and at no additional charge to SYMBOL accompanying each METROLOGIC Product unit
purchased by SYMBOL hereunder. SYMBOL shall be responsible, at its sole expense,
for the design and printing of all other user documentation relating to the
operation and/or user maintenance thereof as is customarily supplied to end
users.
11. SHIP ACCEPTANCE CRITERIA AND REGULATORY COMPLIANCE
11.1 Factory Test Procedures. Before shipping any Production Unit of a
METROLOGIC Qualifying Product, METROLOGIC will test such product in accordance
with METROLOGIC standard factory procedures and in accordance with METROLOGIC
quality control procedures. In addition, before shipping any Production Unit of
a METROLOGIC Purchasable Product, SYMBOL shall demonstrate that the METROLOGIC
Purchasable Product shall have successfully completed the acceptance tests
defined in the Acceptance Test Plan, as evidenced by SYMBOL's written notice to
METROLOGIC, of successful completion of acceptance testing. When SYMBOL and
METROLOGIC have demonstrated that the METROLOGIC Purchasable Product has
successfully completed such acceptance test, SYMBOL may authorize METROLOGIC to
"Release to Production" and manufacture METROLOGIC Purchasable Product, but such
authorization shall not affect the Ship Acceptance Date. Any changes necessary
to the METROLOGIC Purchasable Product, after SYMBOL grants METROLOGIC
authorization to Release to Production METROLOGIC Purchasable Product, that are
necessary as a result of METROLOGIC initiated design changes, shall will be at
the sole expense of METROLOGIC.
11.2 Incoming Inspection. Upon receipt of the METROLOGIC Purchasable
Product by SYMBOL, SYMBOL shall at its option perform an incoming quality
inspection in accordance with the Acceptance Test Plan to determine if the
METROLOGIC Purchasable Product conforms with these Test Criteria or has suffered
any physical damage in shipment.
11.3 Non-Conforming Goods. In the event that the METROLOGIC Purchasable
Product fails SYMBOL's incoming inspection in accordance with Acceptance Test
Criteria, SYMBOL may reject such units or entire shipments as damaged or
non-conforming to the order and dispose of them as mutually agreed..
11.4 Certifications. METROLOGIC certifies that all Production Units of
METROLOGIC Purchasable Products sold to SYMBOL under these Terms and Conditions
shall meet all applicable FCC and other regulatory requirements as specified in
the Product Specification as of the date of shipment. METROLOGIC shall obtain
certifications and type approvals for compliance with all safety, emissions,
immunity, and laser product regulations as specified in the Product
Specification.
<PAGE>
12. DELIVERY AND SCHEDULES
12.1 Packaging. METROLOGIC will pack the METROLOGIC Purchasable Product
for shipment and storage to meet commercial standards in accordance with Exhibit
I Appendix .
12.2 Scheduling Incentives. METROLOGIC acknowledges that time is of the
essence in these Terms and Conditions with respect to METROLOGIC's timely
completion of the development, test, and manufacture of the METROLOGIC
Purchasable Product to SYMBOL in accordance with the schedule set forth in
Exhibit I Appendix, herein. Accordingly, if METROLOGIC fails to deliver, without
excuse under section 24, the cumulative quantities of METROLOGIC Purchasable
Products specified in accordance with the Schedule Information, to SYMBOL in
accordance with this Terms and Conditions on or before the dates that are, in
each instance, fourteen (14) days after the scheduled shipment dates specified
below, METROLOGIC will be assessed the amounts indicated below as liquidated
damages, and not as a penalty. It is agreed that actual damages would be
difficult to ascertain and such liquidated damage amounts reflect a reasonable
estimate of such actual damages. The liquidated damages assessed shall be
applied as credits towards SYMBOL's next release of a purchase Order for
METROLOGIC Purchasable Product. In the event that SYMBOL does not utilize the
credit amount within a one (1) year period of issuance, SYMBOL shall notify
METROLOGIC of such non-utilization and METROLOGIC shall pay SYMBOL a cash amount
equal to the unused credit amount within thirty (30) days, and whereupon the
balance of the unused credit shall be set to zero:
Shipping Date Liquidated Damages
Shipment of Pilots Units in accordance 2% of the aggregate proceeds of the
with Exhibit I, Appendix shipment of METROLOGIC Purchasable
Product Pilot Units on such date in
accordance with Exhibit I, Schedule
Shipment of the first eight (8) scheduled 2% of the aggregate price of the
shipments of Production Units of particular shipment of METROLOGIC
METROLOGIC Purchasable Product, which are Purchasable Product which is
scheduled in accordance with Exhibit I, shipped more than two (2) weeks
Appendix C. after the date scheduled in
accordance with Exhibit I, Appendix
C. Under this section, each
particular late shipment can be
subject to, at most, a single
liquidated damages assessment.]
Shipment of each scheduled shipment after 4% of the aggregate price of the
the first eight(8) scheduled shipments of particular shipment of METROLOGIC
Production METROLOGIC Purchasable Products, Purchasable Product which is
which are scheduled in accordance with the shipped more than 2 weeks after
applicable purchase Order. the date scheduled for shipment in
accordance with the Order. Under
this section, each particular late
shipment can be subject to, at
most, a single liquidated damages
assessment.
METROLOGIC will give SYMBOL twenty four (24) hours' advance notice when any
Production Shipment will be delayed, specifying the duration, reason for such
delay and corrective action. Such notice shall be addressed to SYMBOL as
follows:
Symbol Technologies, Inc.
One Symbol Plaza
Holtsville, NY 11742-1300.
Both Parties agree that under no circumstances will METROLOGIC be liable to
SYMBOL for any other expenses or damages as a result of METROLOGIC's delay in
shipping METROLOGIC Purchasable Product to SYMBOL except as set forth in this
Section 12.
12.3 Title and Risk of Loss. Title to METROLOGIC Purchasable Product
and risk of loss or damage will pass from METROLOGIC to SYMBOL at FOB
METROLOGIC's point of shipment.
<PAGE>
13. RELIABILITY GOALS: METROLOGIC PURCHASABLE PRODUCTS
13.1 Definitions. For the purposes of defining reliability goals, a
failed Unit shall be defined as a unit of METROLOGIC Purchasable Product
returned by a customer as being inoperative or not conforming to the applicable
Product Specification. The parameter, "Monthly Failure Rate" is hereby defined
as a number equal to the cumulative number of Failed Units of a specific
METROLOGIC Purchasable Product under warranty in a month divided by the total
population of product units of such specific product under warranty delivered to
SYMBOL. Reliability goals shall exclude Failed Units satisfying one or more of
the following: (i) "No Trouble Found" units as defined below, (ii) "Abused"
units as defined below, (iii) failure due to failure of an attachment devices,
(iv) failure due to failure of batteries, and (v) failure due to the failure of
SYMBOL second sourced components in the product.
13.2 Standards for Classification. A committee of METROLOGIC and SYMBOL
service personnel shall periodically meet to mutually agree upon the standards
and criteria to determine if specific returned units from customers which fall
into categories of "Abused" or "No Trouble Found " as defined below based upon
the applicable environmental specifications for the unit. A "No Trouble Found"
unit shall be a unit that is returned for service with no apparent defect,
unless said unit is returned three (3) or more times within a six (6) month
period, at which time the unit shall be counted for the purposes of reliability
goals as three (3) failed units. An "Abused" unit is defined as a physically
damaged unit that has been damaged due to forces beyond normal use in the end
user operating environment. In the event of a dispute in the determination as to
whether a METROLOGIC Purchasable Product has been "Abused," a mutually agreed
independent third party testing lab shall test the product and arbitrate the
dispute and the Parties shall share the testing and arbitration costs equally.
13.3 Failure to Meet Reliability Goal. The Monthly Failure Rates will
be reported monthly by the Party performing the service of the product. If
SYMBOL determines that METROLOGIC has failed to achieve the Liquidated Damages %
Threshold reliability goals set forth in this Section 13.4 (without excuse under
Section 24) SYMBOL shall notify METROLOGIC. METROLOGIC shall promptly pay to
SYMBOL the amounts set forth below as liquidated damages and not as a penalty,
it being agreed that actual damages would be difficult to ascertain and such
amounts reflect a reasonable estimate of such damages:
13.4 Reliability Assessment. Beginning three (3) months after
commencement of delivery of production units of the specific METROLOGIC
Purchasable Product and thereafter throughout the warranty period, the following
threshold parameters will be utilized to compare the actual MFR with (i) a
target MFR; (ii) a threshold MFR level which will trigger liquidated damages;
for failure to achieve the stated reliability goals:
Target Reliability Percentage ( % per month): 2%
Liquidated Damages Reliability Percentage ( % per month): 6.5%
(hereinafter "LDRP")
Account credit per unit failure in excess
of the LDRP (assessed monthly): $3
The liquidated damages computed by determining the number of
Failed Units in excess of the LDRP units, times $3.00 shall be limited to a
maximum of 1% of the aggregate value of METROLOGIC Purchasable Product under
warranty. Such damages shall be applied as account credits towards SYMBOL's next
purchases of METROLOGIC Purchasable Product. In the event that SYMBOL does not
utilize the account credit, or portion thereof, within a one (1) year period of
issuance, METROLOGIC shall pay SYMBOL a cash amount equal to the unused credit
whereupon the balance of the unused credit shall be set to zero.
13.5 Warranty Extension. In addition to the assessment of liquidated
damages, for each month during which the Monthly Failure Rate falls into the
range indicated in the chart below, the warranty for that product category will
be extended for the period of time set forth in the first column in such chart
below. In no event shall a warranty be extended beyond a four (4) year period.
<PAGE>
Warranty Extension Monthly Failure Rate
Ranges
No extension of the warranty period Less than 5%
Two week extension of the warranty period 5% - 6.5%
Four week extension of the warranty period Greater than 6.5%
13.6 Loaner Units. During the warranty period, in the event the actual
Monthly Failure Rate for a METROLOGIC Purchasable Product purchased hereunder
exceeds the Target Reliability Percentages Set forth in Section 13.4 then at
SYMBOL's written request, METROLOGIC shall supply SYMBOL, at no cost to SYMBOL,
the number of loaner units for that specific product category ("Loaner Units")
determined in accordance with the following formula:
Number of Loaner Units = (Monthly failures in excess of the
Target) times ((number of turn days [2](days per month [20])). Illustrative
example: Assuming 10,000 units in the field with a 350 monthly failure rate,
then; if the target monthly failures = 200 units (e.g. 2% of 10,000{ the result
is; number of loaner units = (350-200)*(2/20) = 15 loaner units.
13.7 Return of Loaner Unit. The Loaner Units supplied by METROLOGIC are
not required to be in new condition. When the Monthly Failure Rate declines to a
number less than the Target Reliability Percentage, METROLOGIC shall notify
SYMBOL and SYMBOL shall return to METROLOGIC the Loaner Units which were
provided in accordance with Section 13.6. During the first nine (9) months after
delivery of the first production units of a product, the number of Loaner Units
shall be calculated on a monthly basis, and thereafter, the number of Loaner
Units shall be calculated on a quarterly basis.
14. SERVICE TRAINING
14.1 Initial Disclosure. Upon SYMBOL's request, METROLOGIC shall,
without additional cost, disclose to SYMBOL all technical service information
necessary for the service of METROLOGIC Products purchased hereunder. Such
disclosure shall be made from time to time during the term of the applicable
Part of Article 11, or upon request by SYMBOL, subsequent to termination or
expiration of the applicable Part of Article 11, by the furnishing to SYMBOL of
all relevant documents by METROLOGIC pursuant to Section 10 of these Terms and
Conditions and by visits to METROLOGIC facilities by SYMBOL as provided
hereunder. Disclosure of the technical service information, to the extent such
technical service information is in documentary or fixed form, shall be made by
delivery of two (2) copies thereof. To the extent the technical service
information is not available in such document or fixed form, disclosure shall be
made by providing to SYMBOL reasonable technical assistance and consultation to
demonstrate and explain the practical use and operation of the technical service
procedures, including diagnosis, use of Spare Parts, in such appropriate detail
as to permit SYMBOL to make full use of the information for servicing the
METROLOGIC Purchasable Product.
14.2 Location. The disclosure of technical service information
contemplated hereunder shall be performed by qualified METROLOGIC technical
personnel, knowledgeable about the service of the METROLOGIC Purchasable
Products, at either METROLOGIC's facility in New Jersey or elsewhere as mutually
agreed. Each party shall be responsible for the travel and subsistence expenses
of its own employees in connection with such activities.
14.3 Completion of Disclosure. The disclosure of all technical service
information and training shall be completed no later than Release to Production
of the METROLOGIC Purchasable Products.
14.4 Additional Technical Assistance and Consultation. In addition to
the basic disclosure of technical service information provided in Section 14.1
above, should SYMBOL need and request additional training, technical assistance
and consultation relating to the service of the Products during the term of this
Agreement, such as in connection with engineering changes made to the product
which result in new service procedures, METROLOGIC agrees to provide to SYMBOL
at SYMBOL's request such additional appropriate assistance and consultation by
qualified METROLOGIC technical personnel, knowledgeable about the METROLOGIC
Purchasable Products, at METROLOGIC's facility in New Jersey, or elsewhere as
mutually agreed.
<PAGE>
14.5 Visits to METROLOGIC by SYMBOL. During the first three years of
the term of the applicable Part of Article 11, METROLOGIC shall, upon reasonable
notice, permit duly authorized and technically qualified personnel of SYMBOL to
be given access to those areas of METROLOGIC where the testing, manufacture,
service, support, and/or operation of the METROLOGIC Purchasable Product
purchased hereunder is undertaken. During such visits, SYMBOL's personnel shall
have adequate opportunity to consult qualified personnel of METROLOGIC or its
authorized agents, representatives, or consultants who may be available at that
time or upon reasonable notice regarding such METROLOGIC Products, and to
observe, study and receive training with respect to the service of such
METROLOGIC Products.
15. POST-WARRANTY MAINTENANCE SERVICE
15.1 Election for Service. SYMBOL shall notify METROLOGIC at least six
(6) months before the expiration of the warranty period applicable to the
METROLOGIC Purchasable Product if SYMBOL wishes that Post-Warranty Maintenance
be performed by METROLOGIC following such notification the Parties shall
negotiate in good faith the pricing and other provisions applicable to such
service agreement. The provisions for Post-Warranty Maintenance as mutually
agreed by the Parties and shall be attached hereto as Exhibit III and shall
thereafter apply to such METROLOGIC Purchasable Product.
16. INFRINGEMENT INDEMNIFICATION
16.1 Infringement Claims. Subject to the provisions of Section 16.2, if
any third party claims or asserts in any suit, action, or proceeding that the
possession or use, offer to sale, or sale of a METROLOGIC Purchasable Product
(excluding SYMBOL Designed Products) or any portion thereof, by SYMBOL or any
SYMBOL affiliate or their respective directors, officers, employees and agents
or any SYMBOL customer who purchases from SYMBOL or from a reseller of SYMBOL
any such party or parties being hereinafter referred to as (the "SYMBOL
Indemnifiable Parties"), infringes or violates any patent, copyright, trademark,
trade secret, right on mask work, or other third party proprietary right (an
"Infringement Claim"), then SYMBOL shall promptly notify METROLOGIC thereof and
METROLOGIC shall, at its own expense, defend such action and indemnify and hold
harmless SYMBOL Indemnifiable Parties from and against any and all claims,
losses, damages, judgments, costs, and expenses (including attorneys' fees)
arising therefrom or caused thereby.
16.2 Exclusions. METROLOGIC shall have no liability to SYMBOL
Indemnifiable Parties under any provision of this Section 16, nor shall
METROLOGIC extend indemnification to SYMBOL Indemnifiable Parties, if the
Infringement Claim:
(1) results from METROLOGIC's compliance with SYMBOL's
particular design requirements, specifications or instructions relating to the
design and/or production of customized or modified METROLOGIC Products, provided
that the corresponding Standard METROLOGIC Product upon which the customized or
modified METROLOGIC Product is based does not support the Infringement Claim
(i.e. does not infringe the claim(s) asserted as being infringed by the
customized or modified METROLOGIC Product); or
(2) is based upon the (i) use of METROLOGIC Purchasable
Products delivered hereunder in connection or in combination with equipment,
devices or software not delivered by METROLOGIC to SYMBOL; or (ii) use of
METROLOGIC Purchasable Products delivered to SYMBOL hereunder in a manner for
which the same were not designed; or (iii) modification by SYMBOL or its
customer of METROLOGIC Purchasable Products delivered hereunder to the extent
such modification is the cause of the Infringement Claim or suit.
16.3 Defense. METROLOGIC shall permit SYMBOL to participate in the
defense of the action on the Infringement Claim to the extent that, in SYMBOL's
judgment, SYMBOL may be prejudiced thereby, and METROLOGIC shall not settle any
such action in any manner which will adversely affect SYMBOL without the prior
written consent of SYMBOL, which consent shall not be unreasonably withheld.
16.4 Remedies. If any of the SYMBOL Indemnifiable Parties is enjoined
from using the METROLOGIC Purchasable Product or any portion thereof, METROLOGIC
shall promptly, at its expense, either (a) procure for such SYMBOL Indemnifiable
Parties the right to use or to sell the METROLOGIC Purchasable Product or
portion thereof, the use or sale of which is enjoined; or (b) modify the
METROLOGIC Purchasable Product so that it is no longer infringing, but still
performs the same functions; or (c) replace the METROLOGIC Purchasable Product
with a non-infringing product which performs the same functions. If, despite
exercising its best efforts, METROLOGIC is unable to accomplish one of the
foregoing measures, SYMBOL may immediately terminate any outstanding Orders for
the infringing METROLOGIC Purchasable Product effective upon written notice to
METROLOGIC, and subsequent to such termination METROLOGIC shall promptly refund
to SYMBOL the aggregate purchase price for the infringing METROLOGIC Purchasable
Product previously ordered and delivered to SYMBOL. The obligations of this
Section 16 shall survive the termination or expiration of the applicable Part of
Article 11.
<PAGE>
17. PRICE
17.1 Price Schedules. The price for each item of METROLOGIC Purchasable
Product purchased pursuant to these Terms and Conditions which SYMBOL shall pay
to METROLOGIC shall be in accordance with the applicable schedule of Exhibit B
(Pricing of METROLOGIC Purchasable Products to SYMBOL). In addition to the
Purchase Price, SYMBOL shall pay to METROLOGIC all sales and use taxes levied,
assessed, or imposed on METROLOGIC by federal or local government authorities in
connection with the sale of the METROLOGIC Purchasable Product hereunder,
subject to any resale or other exemption certificate, except any such taxes
based on METROLOGIC's income, which shall be borne by METROLOGIC.
18. INVOICES; PAYMENTS
18.1 Invoicing Procedure. METROLOGIC shall invoice SYMBOL for amounts
payable by SYMBOL hereunder upon the date of shipment of the applicable item(s)
of METROLOGIC Purchasable Product. SYMBOL shall pay each valid invoice within
thirty (30) days after SYMBOL's receipt thereof. Valid invoices must contain the
following: shipment date, product name or item description, model number, serial
numbers shipped, and shipping destination. All invoices are to be sent to:
SYMBOL Technologies, Inc.
One SYMBOL Plaza
Holtsville, NY 11742-1300
Attn: Accounts Payable
unless otherwise noted on the Order.
19. ADDITIONAL TECHNICAL CONSULTING SERVICES
19.1 Scope. In addition to the disclosures and services provided under
Sections 10 and 14 of these Terms and Conditions, from time to time, at SYMBOL's
request, and under the terms of an addendum to these Terms and Conditions,
METROLOGIC shall provide SYMBOL with technical consulting services regarding
METROLOGIC Products purchased hereunder, as well as additional or supplementary
educational or technical training services for SYMBOL's employees in the use,
operation, sale, service and support of such METROLOGIC Products, and field
service and technical support personnel to assist SYMBOL in system design or
problem analysis outside the scope of these Terms and Conditions and Exhibits.
Upon receipt of a written SYMBOL request for such additional services or
support, METROLOGIC shall, within fourteen (14) days from the receipt of the
request, provide a quotation to SYMBOL for such services on a fee basis, and the
parties shall mutually agree to the terms of the addendum to these Terms and
Conditions.
20.
20.1 Information Delivery Trigger Events. If SYMBOL has purchased
one or more METROLOGIC Purchasable Products hereunder, then in the event that:
(a) a voluntary or involuntary petition in bankruptcy is filed against
METROLOGIC, and such petition is not stayed or removed within sixty (60) days
after the filing thereof; or
(b) a receiver, trustee, or custodian is appointed for all or any
substantial portion of METROLOGIC's assets; or
(c) METROLOGIC becomes insolvent (however evidenced) or fails to
pay its debts in the ordinary course of business; or
(d) METROLOGIC makes any substantial assignment for the benefit of
creditors; or
(e) METROLOGIC (or any designee of METROLOGIC) defaults in its
obligations to perform maintenance services with respect to the METROLOGIC
Purchasable Product pursuant to this Terms and Conditions and fails to cure such
default within thirty (30) days written notice from SYMBOL or METROLOGIC
defaults in any other agreement related to such services; or
(f) METROLOGIC discontinues the sale of any of the METROLOGIC
Purchasable Product being purchased by SYMBOL generally to the public (any one
or more of these provisions ; then METROLOGIC shall promptly deliver to SYMBOL,
or shall cause its escrow agent to promptly deliver to SYMBOL, all then-current
engineering drawings, manufacturing drawings, functional, technical, and
mechanical specifications, the then-current version of all source code listings
related to all software and firmware programs that form any part of said one or
more METROLOGIC Purchasable Product purchased hereunder , and all other
documentation, in whatever medium embodied, related to the design, engineering,
and manufacture of said one or more METROLOGIC Purchasable Product, including
all software and firmware components thereof.
20.2 Authorization for Use. METROLOGIC hereby grants to SYMBOL the
paid-up, irrevocable, perpetual, non-exclusive, royalty-free right and license
under all of METROLOGIC's right, title and interest in and to the METROLOGIC
Purchasable Product, software, and inherent technology, to use, modify, repair,
reconstruct, further develop, enhance, and manufacture the METROLOGIC
Purchasable Product (except that the license to manufacture shall not apply in
the event of the occurrence of the event specified in subsection (e) of this
Section 20), software, and inherent technology solely for the purposes of
SYMBOL's (and its affiliated companies') use. SYMBOL shall exercise its rights
licensed in the foregoing sentence only upon and after the occurrence of any of
the events specified in this section 20.
<PAGE>
21. CONFIDENTIAL INFORMATION AND SYMBOL PROPERTY
21.1 Confidentiality. METROLOGIC shall treat as confidential, shall not
use for its own purposes, and shall exercise reasonable care not to divulge or
permit to be divulged to others: (i) all information and data prepared by SYMBOL
and obtained by METROLOGIC in connection with these Terms and Conditions, such
as SYMBOL Scanner Customization Drawings and Scanner Modification and Drawings
In the event of a breach or threatened breach of the provisions of this
paragraph, SYMBOL shall be entitled to an injunction restraining such breach or
threatened breach without having to prove actual damages. The obligations of
this paragraph shall survive the termination or expiration of the applicable
Part of Article 11.
SYMBOL shall treat as confidential, shall not use except as provided
hereunder for its own purposes, and shall exercise reasonable care not to
divulge or permit to be divulged to others: (i) all information and data
prepared by METROLOGIC and obtained by SYMBOL form METROLOGIC in connection with
these Terms and Conditions, such as METROLOGIC Standard Product Drawings, and
software which are confidential or proprietary to SYMBOL or its customers,
including, without limitation, information and data relating to SYMBOL's
products, operations, policies, procedures, techniques, accounts and personnel;
and (ii) all information and data which are confidential or proprietary to a
third party and which are in the possession, custody or control of SYMBOL and
supplied to METROLOGIC hereunder. In the event of a breach or threatened breach
of the provisions of this paragraph, METROLOGIC shall be entitled to an
injunction restraining such breach or threatened breach without having to prove
actual damages. The obligations of this paragraph shall survive the termination
or expiration of the applicable Part of Article 11.
21.2 SYMBOL Property Used by METROLOGIC. All physical property used by
METROLOGIC in connection with an fulfillment of Order for Modified Qualifying
Products, Modified Elected METROLOGIC Products, and Special Products, which is
owned, furnished, charged to or paid for by SYMBOL (as evident by invoices)
including, but not limited to, materials, tools, dies, jigs, molds, patterns,
fixtures, equipment, as well as drawings and other technical information, and
specifications associated therewith, and any replacement thereof, shall be and
remain in the property of SYMBOL subject to removal and inspection by SYMBOL at
any time without cost or expense to SYMBOL. SYMBOL shall have free access to
METROLOGIC's premises (or the premises of any supplier or subcontractor while
such property is located) for the purpose of inspecting or removing such
property. All such property shall be identified and marked as SYMBOL's property,
used only for the applicable Order and adequately insured by METROLOGIC at its
expense for SYMBOL's protection. METROLOGIC shall assume all liability for and
maintain and repair such property and return same to SYMBOL in its original
condition, reasonable wear and tear excepted, when such property is no longer
required hereunder at SYMBOL's request and expense. SYMBOL shall furnish
METROLOGIC with a list of all such property upon request, and METROLOGIC shall
comply with any SYMBOL disposition instructions applicable hereto. SYMBOL shall
not be obligated to pay any invoices for tooling until the first article
produced therefrom shall have been received and accepted by SYMBOL. Materials
furnished by SYMBOL on other than a charge basis in connection with any Order
issued hereunder shall be deemed to be held by METROLOGIC as bailee thereof.
METROLOGIC agrees to pay SYMBOL's replacement cost for all such material spoiled
or otherwise not satisfactorily accounted for by METROLOGIC.
22. INSURANCE
22.1 Coverage. METROLOGIC shall, at its own cost and expense, obtain
and maintain in full force and effect, with sound and reputable insurers, the
following insurance coverages: Worker's Compensation as required by the law of
the state of hire; employer's liability with a minimum limit of $100,000.00 of
liability, and not less than $100,000.00 aggregate limit of liability per policy
year for disease, including death at any time resulting therefrom, not caused by
accident; Comprehensive General Liability insurance against all hazards with a
minimum limit of liability for personal injury, including death resulting
therefrom, on an occurrence basis of $1,000,000.00 in the aggregate, and with a
minimum limit of liability for property damage on an occurrence basis of
$1,000,000.00 in the aggregate; and Automobile Liability insurance against
liability arising from the maintenance or use of all owned, non-owned and hired
automobiles and trucks with a minimum limit of liability for bodily injury of
$1,000,000.00 in the aggregate, and with a minimum limit of liability for
property damage of $500,000.00 per accident. METROLOGIC's insurance shall be
deemed primary. METROLOGIC shall provide SYMBOL with certificates of insurance
evidencing the coverages required hereunder upon request. Each policy required
hereunder shall provide that SYMBOL shall receive thirty (30) days' advance
written notice in the event of a cancellation or material change in such policy.
In the event that any service under this Terms and Conditions is to be rendered
by persons other than METROLOGIC's employees, METROLOGIC shall arrange to
furnish SYMBOL with evidence of insurance for such persons subject to the same
terms and conditions as set forth above and applicable to METROLOGIC prior to
commencement of service by such person(s).
<PAGE>
23. PERSONAL INJURY INDEMNIFICATION
23.1 Scope. METROLOGIC shall defend, indemnify, and hold SYMBOL
harmless from and against any and all claims, losses, damages, judgments, costs,
and expenses (including attorneys' fees) which SYMBOL may suffer or incur
arising out of or in connection with injuries to persons (including death) or
loss of, or damage to, property, occasioned by the negligence, unlawful act, or
willful misconduct of METROLOGIC, or of METROLOGIC's personnel, subcontractors,
or agents.
24. FORCE MAJEURE
24.1 Delays. Neither METROLOGIC nor SYMBOL shall be liable to the other
for any delays in performance or nonperformance of any obligations hereunder to
the extent that such performance is prevented or delayed by acts of God or other
causes beyond the reasonable control of such Party, and no default hereunder
shall result therefrom. METROLOGIC shall immediately notify SYMBOL of a force
majeure and shall make best efforts to remedy a force majeure within sixty (60)
days from the date of occurrence. In the event that METROLOGIC cannot remedy a
force majeure within sixty (60) days from the date of occurrence, then SYMBOL
shall have the option of terminating the applicable Purchase Order, effective
upon notice to METROLOGIC.
25. LIMITATION OF LIABILITY
Neither METROLOGIC nor SYMBOL shall be liable to the other for any
special, indirect, or consequential damages arising out of this Terms and
Conditions, even if advised in advance of the possibility of such damages.
26. SPARE PARTS AND DOCUMENTATION
26.1 Pricing and Availability. METROLOGIC also agrees to sell Spare
Parts at prices set forth in Exhibit IV, until the end of seven years after the
date of SYMBOL's last purchase of that model from METROLOGIC, and METROLOGIC
shall give SYMBOL at least six (6) months' advance notice of discontinuance of
the availability of Spare Parts. At any time prior to such discontinuance SYMBOL
may place an order of unlimited size for any Spare Parts, subject to reasonable
delivery schedules established by METROLOGIC. METROLOGIC also agrees to provide
product repair service to SYMBOL consistent with services set forth in
Post-Warranty Maintenance provision at a reasonable price and lead time
throughout the applicable Part of Article 11.
27. INCORPORATION OF EXHIBITS
27.1 The following Exhibits are, or will be, incorporated into and made
a part of these Terms and Conditions as such documents are actually agreed upon
for each respective product:
EXHIBIT I, including the following Appendices:
Appendix A. Product Specification
Appendix B. Scanner Customization Drawings
Appendix C. Scanner Modification Specification and
Drawings (Section 5)
Appendix D. Statement of Work (Section 5)
Appendix E. Packaging and Labeling Specification
Appendix F. Schedule Information
Appendix G. Failure Report Requirements
Appendix H. Support Requirements
EXHIBIT II, including the following Appendices:
Appendix A. Product Test Plan
Appendix B. System Test Plan
Appendix C. Quality Standard
EXHIBIT III Option for Post-Warranty Maintenance
EXHIBIT IV Pricing of Spare Parts
<PAGE>
28. ORDER OF PRECEDENCE
28.1 In the event of a conflict between the Agreement, these Terms and
Conditions and the Exhibits during the performance of any Order issued hereunder
, such conflicts will be resolved by the following Order of Precedence:
1. The Agreement
2. These Terms and Conditions of Sale
3. Exhibit B (to the Agreement)
4. Exhibit I (to be negotiated and provided at a future date
for each respective METROLOGIC product)
5. Exhibit II Acceptance Test Plan (to be negotiated and
provided at a future date for each respective
METROLOGIC product purchased hereunder)
6. Exhibit III Option for Post-Warranty Maintenance (to be
negotiated and provided at a future date in the
event Symbol)
29. SOFTWARE LICENSE
29.1 Software is furnished by METROLOGIC to SYMBOL under a
non-exclusive, royalty-free, unrestricted, perpetual license for use in one unit
of METROLOGIC Purchasable Product. METROLOGIC hereby grants SYMBOL during the
term of the applicable Part of Article 11, the right and license to copy all
machine readable executable code contained within the METROLOGIC Purchasable
Product solely for: (i) code revision control, and (ii) incorporation into
METROLOGIC Purchasable Product purchased under this Terms and Conditions. No
rights are granted under this Section 29 to the source code corresponding to the
machine readable executable code of the METROLOGIC Purchasable Product.
30. MISCELLANEOUS
30.1 Entire Terms and Conditions. These Terms and Conditions of Sale,
which includes all attached schedules and exhibits referenced herein, together
with Article 11 of the Agreement, constitutes the entire agreement between
SYMBOL and METROLOGIC with respect to the subject matter hereof, and supersedes
all proposals, oral or written, and all other communications between the Parties
with respect to such subject matter.
30.2 Amendments The terms and conditions of this Terms and Conditions
may not be amended, waived, or modified, except in a writing signed by the party
to be charged therewith. All changes to this Terms and Conditions, and all
requests for the performance of additional services not specified in this Terms
and Conditions shall be made only pursuant to a written change order specifying
the change and any effect on the project schedule, the performance of the
METROLOGIC Purchasable Product, and the price of the METROLOGIC Purchasable
Product under this Terms and Conditions which must be signed by an officer of
each of the parties.
30.3 No Waiver. No failure or delay of either party to exercise any
rights or remedies under these Terms and Conditions shall operate as a waiver
thereof, nor shall any single or partial exercise of the same or other rights or
remedies preclude any further or other exercise of the same or other rights or
remedies, nor shall any waiver of any rights or remedies with respect to any
circumstances be construed as a waiver thereof with respect to any other
circumstances.
30.4 No Assignment. Neither METROLOGIC nor SYMBOL may assign any of its
rights pursuant to these Terms and Conditions without the prior written consent
of the other, and any attempted assignment without such consent shall be void.
Notwithstanding the foregoing, SYMBOL may assign its rights under these Terms
and Conditions to any now-existing or future direct or indirect subsidiary upon
prior notice to METROLOGIC without such consent.
30.5 Use of Name. METROLOGIC shall not use the name or logo of SYMBOL,
or any abbreviation or adaptation thereof, in any advertising, trade display,
public statement, or for any other commercial purposes without the prior written
consent of SYMBOL. SYMBOL shall not use the name or logo of METROLOGIC or any
abbreviation or adaptation thereof, in any advertising, trade display, public
statement, or for any other commercial purposes without the prior written
consent of METROLOGIC.
30.6 Headings. The headings of sections of these Terms and Conditions
are for convenience of reference only and shall not affect the meaning or
interpretation of these Terms and Conditions in any way.
30.7 Governing Law. These Terms and Conditions shall be governed by
and construed in accordance with the laws of the State of New York.
<PAGE>
EXHIBIT D-1
Reference Manual Patent Listing
The following statement (or substantially similar statement) shall be printed in
the reference manual (or similar document) accompanying all METROLOGIC Royalty
Bearing Products and METROLOGIC Omnidirectional Hand-Held Scanner Products:
"Patent Information
This METROLOGIC product may be covered by one or more of the following U.S.
Patents:
U.S. Patent No. 4,360,798; 4,369,361; 4,387,297; 4,460,120; 4,496,831;
4,593,186; 4,607,156; 4,673,805; 4,736,095; 4,758,717; 4,816,660;
4,845,350; 4,896,026; 4,923,281; 4,933,538; 4,992,717; 5,015,833;
5,017,765; 5,059,779; 5,117,098; 5,124,539; 5,130,520; 5,132,525;
5,140,144; 5,149,950; 5,180,904; 5,200,599; 5,229,591; 5,247,162;
5,250,790; 5,250,791; 5,250,792; 5,262,628; 5,280,162; 5,280,164;
5,304,788; 5,321,246; 5,324,924; 5,396,053; 5,396,055; 5,408,081;
5,410,139; 5,436,440; 5,449,891; 5,468,949; 5,479,000; 5,532,469;
5,545,889,
No license right or sublicense is granted, either expressly or by implication,
estoppel, or otherwise, under any METROLOGIC or third party intellectual
property rights (whether or not such third party rights are licensed to
METROLOGIC), including any third party patent listed above, except for an
implied license only for the normal intended use of the specific equipment,
circuits, and devices represented by or contained in the METROLOGIC products
that are physically transferred to the user, and then only to the extent of
METROLOGIC's license rights and subject to any conditions, covenants and
restrictions therein."
<PAGE>
EXHIBIT D-2
Reference Manual Patent Listing
The following statement (or substantially similar statement) shall be printed in
the reference manual (or similar document) accompanying all SYMBOL products that
may be covered by METROLOGIC patents provided under this Agreement:
"Patent Information"
This product may be covered by one or more of the following U.S. Patents:
U.S. Patent No. 5,424,525; 5,260,553; 5,343,027; 5,468,951; 5,340,971;
5,484,992; 5,216,232; 5,557,093; 5,081,342.,
No license right or sublicense is granted, either expressly or by implication,
estoppel, or otherwise, under any third party intellectual property rights
(whether or not such third party rights are licensed to SYMBOL), including any
third party patent listed above, except for an implied license only for the
normal intended use of the specific product, circuits, and devices represented
by or contained in the products that are physically transferred to the user, and
then only to the extent of license rights and subject to any conditions,
covenants and restrictions therein."
<PAGE>
EXHIBIT E
Press Release
Symbol Technologies and Metrologic Sign Licensing Agreement
HOLTSVILLE, NY and BLACKWOOD, NJ -- December, 1996 -- Symbol Technologies, Inc.
(NYSE:SBL), the world leader in bar code driven data transaction systems, and
Metrologic Instruments, Inc. (NASDAQ:MTLG), a leading manufacturer of laser and
holographic bar code scanners, today announced that they have entered into a
comprehensive cross-license agreement.
Under the terms of the agreement, Metrologic is granted a royalty-bearing
license under Symbol's laser scanning patents including rights to develop and
market Metrologic's next-generation triggerless laser scanning bar code reader
products. Symbol also has the option for royalty-bearing licenses under a broad
range of Metrologic patents and the option to purchase certain Metrologic
products under Symbol's private label.
Dr. Jerome Swartz, chairman and chief executive officer of Symbol said, "This
licensing agreement recognizes the strength of each company's technology and
patent position, and represents a positive, mutually beneficial business
solution for both parties. It does not change the Consent Decree and injunction
entered into by Metrologic in 1993 pertaining to "triggered hand-held laser
scanner bar code readers."
C. Harry Knowles, chairman, president and chief executive officer of Metrologic,
said "This agreement is evidence of the mutual respect each party has for the
other's patents. We are pleased to expand our product line of laser scanners
using Symbol's significant core of patents. The financial implications of this
agreement have already been reflected in Metrologic's financial results for the
first three quarters of 1996."
Symbol Technologies is the world leader in bar-code-driven data transaction
systems with more than 3.5 million scanners and hand-held computers installed.
The company designs, manufactures and markets bar code reading products,
application-specific hand-held computers and radio frequency data communications
products that are used as strategic building blocks in solutions in retail,
package and parcel delivery, manufacturing, warehousing and distribution, health
care and other industries.
Metrologic Instruments is a leading manufacturer of laser and holographic bar
code scanners. The company designs, manufactures and markets bar code scanning
products incorporating laser and holographic technology. The company's principal
products are hand-held scanners, fixed projection scanners, in-counter scanners
and industrial scanners. The company ships its products into more than 80
countries.
<PAGE>
EXHIBIT F
Rank-Ordered List of Arbitrators
Charles R. Brainard
(Kenyon and Kenyon, New York, NY)
Lloyd McAulay
(McAulay, Fisher et al., New York, NY)
John L. Alex
(Lockwood, Alex et al., Chicago, IL)
Thomas L. Creel
(Kaye, Scholer et al., New York, NY)
Jesse J. Jenner
(Fish and Neave, New York, NY)
