INTEGRATED SECURITY SYSTEMS INC
PATENT ASSIGNMENT & TECHNOLOGY TRANSFER AGREEMENT
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<TYPE>EX-10.1
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<FILENAME>d95591ex10-1.txt
<DESCRIPTION>PATENT ASSIGNMENT & TECHNOLOGY TRANSFER AGREEMENT
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                                                                    EXHIBIT 10.1

                              PATENT ASSIGNMENT AND
                          TECHNOLOGY TRANSFER AGREEMENT

This Patent Assignment and Technology Transfer Agreement ("Agreement") is
entered as of March 18, 2002 between Quixote Corporation ("Quixote"), a Delaware
corporation with offices at One East Wacker Drive, 30th Floor, Chicago, Illinois
and B&B Electromatic, Inc. ("B&B") a Delaware corporation with offices at 14113
Main Street, Norwood, Louisiana.

WHEREAS, B&B through beneficial ownership of various intellectual property
rights including patent rights, copyrights and various other arrangements has
the right to assign the rights in certain assets including Patents,
Documentation, Technology and Improvement rights (as hereinafter defined).

WHEREAS, Quixote wishes to obtain full right, title and interest to the various
Patent, Documentation, Technology and Improvement rights of B&B and B&B wishes
to assign and transfer to Quixote all such rights under the terms and conditions
hereinafter appearing.

NOW, THEREFORE, for and in consideration of the mutual promises herein made, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

1. Definitions

In this Agreement the following terms shall have the following meanings unless
the context otherwise requires:

1.1 "Affiliate" means, with respect to a specified Person, any Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the specified Person.

1.2 "Documentation" means all manuals, models, drawings, designs, diagrams,
bills of material, manufacturing routers, vendor lists, computer programs and
all other tangible technical information relating to the nature or operation of
the Technology, including but not limited to 120 Volts single phase and 12 Volt
technology, which might reasonably be of interest to either party.

1.3 "Licensed Territory" means the world.


1.4 "Patents" means: (a) any of the patents and patent applications listed on
Exhibit A; (b) any additional patent issuing in any jurisdiction on any patent
application listed on Exhibit A; (c)





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any patents issuing as a result of a re-examination or reissue proceeding of any
of the foregoing patents; (d) renewals, extensions and certificates of
corrections of any of the foregoing patents; and (e) continuations,
continuations-in-part, divisional or other applications claiming filing priority
of the foregoing applications.

1.5 "Person" means any individual, partnership, corporation, limited liability
company or other entity.


1.6 "Technology" means the Patents, the Documentation and trade secrets and
know-how, skill and knowledge for thoroughfare-crossing guards as more
particularly described and embodied in the Patents.

2. Transfer

2.1 Assignment of Patents. B&B hereby irrevocably assigns to Quixote exclusively
throughout the Licensed Territory, all right, title and interest (choate or
inchoate) in (i) the Patents, (ii) all precursors, portions and work in progress
with respect thereto and all inventions, works of authorship, mask works,
technology, information, know-how, materials and tools and fixtures specifically
acquired or designed for use with products embodying the Patents or to the
development, support or maintenance thereof and (iii) all copyrights, patent
rights, trade secret rights and all other intellectual and industrial property
rights of any sort and all business, contract rights, causes of action, and
goodwill in, incorporated or embodied in, used to develop, or related to any of
the foregoing, all as specified in Schedule A, attached hereto and made a part
hereof

B&B agrees to assist Quixote in every legal way to evidence, record and perfect
the Section 2 transfer including executing the Patent Assignment attached hereto
as Exhibit B and to apply for and obtain recordation of and from time to time
enforce, maintain, and defend the assigned rights, all at Quixote's expense.

2.2 Technology, Documentation and Models. B&B hereby transfers or otherwise
provides to Quixote, free and clear of all security interests, including any
conditional sale or other title retention agreements, liens, changes, claims,
pledges, exceptions, defects of title and other encumbrances of any kind, all
Technology in its possession that has not previously been disclosed or
transferred and which is necessary and desirable to Quixote to exploit the
Technology to a standard at least equivalent to those being operated by B&B at
the date hereof. Upon execution of this Agreement, B&B will deliver Quixote all
Documentation in possession of B&B and the demonstration or exhibition physical
model, specified as serial number CN5277 (the "Model"); provided, however, that
Quixote shall allow B&B to use the Model for purposes of demonstration or
exhibition as long as (i) B&B provides Quixote with reasonable notice, (ii) the
Model is not currently used by Quixote, and (iii) B&B agrees to pay any freight
cost to move the Model to any demonstration or exhibition site. Without
prejudice to the generality of the foregoing, the transfer of Technology shall
also include the following obligations:




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     a.   B&B will train or consult with such personnel of Quixote as selected
          by Quixote for up to a total of one hundred and twenty (120) B&B man
          days within the first two (2) years from the date hereof on all
          matters relating to the Technology at B&B facilities in Norwood,
          Louisiana at no charge Quixote.

     b.   Thereafter, B&B undertakes to train or consult with such additional
          personnel of Quixote as selected by Quixote at Quixote request on all
          matters relating to the Technology in such manner, at such locations,
          and at such reasonable rates as agreed by the parties at Quixote' s
          expense.

3. Transition Activities

3.1 Orders, Leads. B&B hereby assigns and transfers all orders, marketing leads
and related materials pertaining to the railroad and railroad bridge industry to
Quixote. Quixote shall pursue said leads and accept orders on terms and
conditions it believes reasonable.

3.2 Manufacturing. With respect to sales by Quixote of the first four (4)
crossings or for a period of one (1) year from the date hereof, whichever is
sooner, B&B will manufacture the products for such orders. For purposes of this
Agreement, a crossing will consist of two complete B&B VT6802 safety barriers,
including all electronics plus one spare VT6802 arm. If the sale is for
demonstration purposes, Quixote will pay B&B $65,000 per crossing. If the sale
is pursuant to a third party purchase, but not for demonstration purposes,
Quixote will pay B&B 90% of the net proceeds but not less than $90,000 per
crossing for those products.

4. Consideration

In consideration of the rights granted hereunder, Quixote hereby pays to B&B a
lump sum payment of $350,000 cash at closing. The consideration described in
this Section 4, Section 3 and the license agreement between Quixote and B&B,
attached hereto and made a part hereof, shall be the only consideration required
of Quixote with respect to the subject matter of this Agreement.

5. Representations and Warranties

B&B represents and warrants to Quixote that:

     A.   B&B is the sole owner of all rights, title and interest in and to the
          Technology including the Patents;

     B.   B&B has not assigned, transferred, licensed, pledged or otherwise
          encumbered any of the Technology , including the Patents, or agreed to
          do so;



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     C.   B&B has full power and authority to enter into this Agreement and to
          make the assignments as provided for herein;

     D.   To the best of B&B's knowledge, there are no violations, infringements
          or misappropriations of any third party's rights (or any claim
          thereof) by the Patents or the Technology;

     E.   Neither B&B nor any of its agents was acting within the scope of
          employment by any third party when conceiving, creating or otherwise
          performing any activity with respect to anything purportedly
          transferred or assigned herein;

     F.   To the best of B&B's knowledge, there are no current challenges with
          respect to the patentability or validity of any claims of any existing
          patents or patent applications relating to the Patents or Technology;
          and Quixote acknowledges that neither it nor any affiliate has any
          current challenges with respect to the patentability or validity of
          any claims of any existing patents relating to the Patents or
          Technology; and

     G.   The B&B railroad safety barriers currently being offered for sale are
          known as VT6802 and VT6802HD products, and meet the requirements of
          the Federal Highway Administration NCHRP-350, Test Level II guidelines
          and have been accepted by the Federal Railroad Authority.

6. Other Assurances

6.1 Andy Davis. B&B assumes all obligations currently owed or owed in the future
to Andy Davis or his Affiliates (together "Davis") under a certain contract
dated as of January 1, 2000(the "Davis Contract"). B&B shall defend, indemnify
and hold Quixote harmless from any such claims that might arise under the Davis
Contract.

6.2 Sales and Installations. B&B does not transfer or assign, and Quixote does
not assume, any obligations with respect to B&B sales and installations,
including but not limited to the installations in Santa Clara, California and
Madison, Wisconsin. B&B shall defend, indemnify and hold Quixote harmless from
any such claims that might arise from any such sales and installations. The B&B
obligations with respect to the installation in Santa Clara, California include
but are not limited to those obligations evidenced in a certain letter dated
March 12, 2002 to the Santa Clara Valley Transportation Authority, a copy of
which is attached hereto as Exhibit C.

7. Confidential Information

B&B will not disclose any Technology, know-how, trade secrets, information or
materials assigned hereunder or materials provided by Quixote provided such is
Confidential Information.




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"Confidential Information" is any information which has value due to the fact
that such information is not generally known to the public. Confidential
Information does not include any information, which (i) is generally to the
public or that becomes generally available to the public through no fault on
B&B's part after the assignment herein; or (ii) is received from a third party
not associated with Quixote and having no obligation of confidentiality to
Quixote; or (iii) is required to be disclosed by law. B&B may use Confidential
Information only for the purposes (i) of manufacturing crossing guards pursuant
to a license from Quixote or as provided in Section 3 hereof, or (ii) of
maintaining the installations in Santa Clara, California and Madison, Wisconsin
as provided in Section 6.2 hereof. B&B may not use non-confidential Technology,
know-how, trade secrets, information or materials assigned hereunder or
non-confidential materials provided by Quixote where such is restricted by
license, patent rights, copyright, or other intellectual property rights. B&B
recognizes and agrees that there is no adequate remedy at law for a breach of
this Section, that such breach would irreparably harm Quixote and that Quixote
is entitled to equitable relief (including, without limitations, injunctions)
with respect to any such breach or potential breach in addition to any other
remedies.

8. Patent Prosecution.

The parties agree that Quixote has the sole and exclusive right to prosecute any
and all patent applications and foreign equivalents of the Patents in the U.S
and foreign countries. B&B will cooperate with Quixote in obtaining such patent
rights and Quixote will pay all reasonable expenses.

9. Legal Actions

9.1 Quixote shall, at its sole discretion, pursue or defend any legal action
brought in connection with the subject matter of this Agreement. In any legal
suit or dispute, B&B agrees to cooperate fully with Quixote. At the request and
expense of Quixote, B&B will provide access to all relevant personnel, records,
papers, information, samples, specimens, etc., during regular business hours.

9.2 B&B shall promptly report in writing to Quixote any:


          a.   known infringement or suspected infringement of any of the
               Patents, or

          b.   known unauthorized use, infringement, suspected infringement,
               duplication, distribution, unauthorized use or other
               misappropriation of the Patents by a third party of which it
               becomes aware, and shall provide Quixote with any available
               evidence supporting said infringement, suspected infringement,
               duplication, distribution, unauthorized use or other
               misappropriation.




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10.  General

10.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of Illinois without reference to the choice of law principles
thereof. Any dispute arising under this Agreement shall be definitively and
finally resolved by arbitration and judgment upon any award of arbitration may
be entered in any court having jurisdiction thereof. Such arbitration shall be
held in Chicago, Illinois and be in accordance with the rules of the American
Arbitration Association. Any fees and expenses payable to the American
Arbitration Association shall be borne by the losing party.

10.2 This Agreement is not assignable or transferable by B&B (whether by
contract, by sale of stock or assets of B&B, or by merger or consolidation or
any other legal means) without the prior written consent of Quixote, such
consent not to be unreasonably withheld; any attempt to do so shall be void. Any
notice, report, approval or consent required or permitted hereunder shall be in
writing and will be deemed to have been duly given if delivered personally or
mailed by first-class, certified U.S. mail, postage prepaid to the respective
addresses of the parties as set above (or such other address as a party may
designate by ten (10) days notice) or by facsimile transmission with evidence of
receipt and a paper copy mailed to the receiving party by regular mail. Subject
to the above, this agreement is binding on all successor, assigns or
transferees.

10.3 If Quixote is unable after reasonable efforts to secure B&B's signature to
any document it is entitled to under this Agreement, B&B hereby irrevocably
designates and appoints Quixote and its duly authorized officers and agents, as
its agents and attorneys-in-fact with full power of substitution to act for and
on its behalf and instead of B&B, to execute and file any such document or
documents and to do all other lawfully permitted acts to further the purposes of
the foregoing with the same legal force and effect as if executed by B&B.

10.4 If any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions hereof nor the
legality, validity, or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby, and the
remainder of the provisions of this Agreement shall remain in full force and
effect. The parties shall endeavor in good faith negotiations to replace any
illegal, invalid or unenforceable provision with a valid, legal and enforceable
provision, the economic effect of which comes as close as possible to the
illegal, invalid or unenforceable provision.

10.5 The terms of this Agreement are confidential and no press release or other
written or oral disclosure of any nature regarding the terms of this Agreement
shall be made by B&B without Quixote's prior written approval; however, approval
for such disclosure shall be deemed given to the extent such disclosure is
required to comply with governmental regulation.



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10.6 This Agreement may not be modified or amended except by an instrument or
instruments in writing signed by the party (or such party's duly authorized
agent) against whom enforcement of any such modification or amendment is sought.
Either party may, only by an instrument in writing, waive compliance by the
other party regarding any term or provision of this Agreement. The waiver by a
party of a breach of any term or provision of this Agreement shall not be
construed as a waiver of any subsequent breach.

10.7 The parties are independent contractors. Nothing stated in this Agreement
shall be deemed to create the relationship of partners, joint venturers,
employee-employer or franchiser-franchisee between the parties hereto.

10.8 This Agreement may be executed in counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more counterparts have been signed by each party and delivered to the other
party.

10.9 This Agreement, and the Schedules thereto, contains the entire agreement
between the parties with respect to the subject matter hereof, and there are no
agreements or understandings between the parties as to this subject matter other
than those set forth or referred to herein or therein.

IN WITNESS WHEREOF, parties hereto have caused their duly authorized
representatives to execute this Agreement on the date first above written.



              Quixote Corporation                        B&B Electromatic, Inc.

By:           /s/ LESLIE J. JEZUIT           By:         /s/ JACK CALDWELL
   -------------------------------------        --------------------------------
Name:         Leslie J. Jezuit               Name:       Jack Caldwell
      ----------------------------------          ------------------------------
Title:  President and Chief Executive        Title:         President
                 Officer                           -----------------------------
      ----------------------------------     Date:       March 15, 2002
Date:         March 18, 2002                      ------------------------------
     -----------------------------------







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                                    EXHIBIT A

Issued Patents:

         US PATENT NUMBER:  6,115,963 "CROSSING GUARD"


         6,115,963 ABSTRACT: A crossing guard is disclosed which comprises an
         operator positioned on one side of a thoroughfare for raising and
         lowering an arm, a gate connected to the arm, a first lock positioned
         on the opposite side of the thoroughfare, a plurality of cables
         supported within the gate, joined together at fixed points intermediate
         the ends of the cables, and a first end assembly connectable with the
         cables and the gate at the end of the gate opposite the operator with
         the first end assembly engagable with the first lock. The device
         further comprises a second lock positioned on the side of the
         thoroughfare nearer said operator engagable with a second end assembly
         positioned on the end of the gate nearer said operator.

         US PATENT NUMBER:  6,289,634 "CROSSING GUARD"


         6,289,634 ABSTRACT: A crossing guard is disclosed which comprises an
         operator positioned on one side of a thoroughfare for raising and
         lowering an arm, a gate connected to the arm, a first lock positioned
         on the opposite side of the thoroughfare, a plurality of cables
         supported within the gate, joined together at fixed points intermediate
         the ends of the cables, and a first end assembly connectable with the
         cables and the gate at the end of the gate opposite the operator with
         the first end assembly engagable with the first lock. The device
         further comprises a second lock positioned on the side of the
         thoroughfare nearer said operator engagable with a second end assembly
         positioned on the end of the gate nearer said operator.



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                                    EXHIBIT B

                                PATENT ASSIGNMENT

THIS ASSIGNMENT is made and entered into as of the March 18, 2002, by B&B
Electromatic, Inc., a Delaware Corporation with offices at 14113 Main Street,
Norwood, Louisiana ("B&B") in favor of Quixote Corporation, a Delaware
corporation with offices at One East Wacker Drive, Chicago, Illinois
("Quixote").

         For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, B&B hereby sells and assigns to Quixote all right,
title and interest of every kind throughout the world in and to U.S. Patents No.
6,115,963 entitled "CROSSING GUARD" and No. 6,289,634 entitled "CROSSING GUARD"
(the "Patents") and any reissues, renewals, or extensions thereof as may be
granted, including the right to sue for past infringement of the Patent and
recover for past damages.

         B&B agrees to execute such additional documents as may be reasonably
requested by Quixote to further evidence, perfect, or protect the foregoing
assignment.

                                     B&B Electromatic, Inc.


                                     /s/ JACK CALDWELL
                                     -------------------------------------------


                                     By: Jack Caldwell

                                     Title: President

STATE OF LOUISIANA                          )
                                            ) ss
PARISH OF EAST BATON ROUGE                  )

         On this 15th day of March, 2002, before me appeared Jack Caldwell, the
person who signed this instrument, who acknowledged that he signed it as a free
act on behalf of B&B, Electromatic, Inc. with authority to do so.

/s/ LISA R. PHILLIPS
--------------------------------
Notary Public

My commission expires on:  At Death

Date: March 15, 2002





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                                    EXHIBIT C

March 12, 2002

Mr. Christof D. Eichin
Maintenance Engineering Manager
Santa Clara Valley Transportation Authority
3331 North First Street
San Jose, CA 95134-1906

Dear Chris,

Just a note to let you know that we have passed 66,000 cycles in the test on the
unit here in Norwood. Jay Smith will be sending you further information in the
next few day.

I also wanted to summarize what we committed to do at our meeting on February
13, 2002.

     o   I have already provided you with a copy of our standard warranty policy
         along with the statement that the two year warranty clock would start
         running on the date the "super gate" is put back in operation.

     o   Update the IOM Manual to include modifications made to the gate,
         including maintenance/inspection steps for said modifications. The
         revised version will also include inspection steps in case of a crash
         at the gate.

     o   Send formal test procedure being used on the test currently in process.

     o   Give 4 week notice before traffic control is required to install the
         new arm.

     o   Provide on-site lead person to install and commission the new arm after
         200,000 cycle test is complete. VTA will provide all equipment and
         labor assistance required for said installation and commissioning.

     o   Provide on-site training on maintenance and inspection procedures
         immediately after start up is achieved.

     o   Provide a final test result report after 200,000 cycles have been
         accomplished.

     o   Revise the Hazard Analysis to include all affected parts resulting from
         the redesign. We will also edit some of the objectionable language in
         the report.

We look forward to completing the test and putting your gate back into
operations.

Sincerely,


/s/ JACK CALDWELL
------------------------------
Jack Caldwell



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                                   SCHEDULE A

1.       "Documentation" to be transfered

         A)  Manuals - one operating manual in electronic format:

         B)  Models - one working model of model gate serial number CN5277

         C)  Drawings - all engineering drawings for B&B models VT6802 and
             VT6802HD in electronic format (AutoCAD 14.0 preferred).

         D)  Designs - none, other than the designs shown showing in the
             engineering drawings

         E)  Diagrams - none, other that contained in the engineering drawings

         F)  Bills of material - for B&B models VT6802 and VT6802HD

             o  Hard copy of Indented Bills

             o  Electronic form of indented Bills compatible with Microsoft
                Access.

         G)  Manufacturing routers - none

         H)  Vendor lists - provided, but B&B will continue to use for other
             products.

             o Cut sheets listing vendor sources for individual components

         I)  Computer programs - none

         J)  Other tangible technical information - any test results of models
             VT6802 and VT6802HD

         K)  Sample electrical schematics and suggested drive components
             (documentation) for potential sites with electrical power other
             than 12V DC (such as 120 V single phase). Documents could be from
             an existing B&B Gate system other than the VT 6802 or VT 6802HD.
             Documents shall be supplied in electronic format.

2.       Assigned "Technology"

         A)  Patents - patent numbers 6,115,963 and 6,289,634 and B&B's patent
             files for same

         B)  Trade secrets - none

         C)  Know- how - to be transferred by training

         D)  Inventions - none other than as disclosed in the patent claims

         E)  Works of authorship - all copyrights in the engineering drawings
             and operation manual

         F)  Mask works - none

         G)  Information - none, other than Know-How

         H)  Materials - none

         I)  Tools and fixtures - none

         J)  Business - B&B will prepare a list of its leads

         K)  Contract rights - none, B&B retains contract rights for product
             sold prior to the assignment

         L)  Causes of action - any right to sue for infringement or
             infringement for all patent and copyrights assigned hereunder

         M)  Goodwill - none other than associated with the VT6802 product
             itself, B&B is not assigning any trademark rights hereunder.

B&B represents and warrants that, to the best of its knowledge, the above is all
that is needed to make, use and sell the patented crossing gates to the standard
at least equivalent to that currently employed by B&B.



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