LICENSE AGREEMENT
EXHIBIT
10.2
THIS
AGREEMENT is entered into as of this 9th day of April, 2007 by and among Xxxxxxx
Technology, LLC, a Michigan limited liability company, Xxxxxxxx Xxxx and
Xxxxxxxx Xxx (collectively, "LICENSOR") and Advanced Automation Group, LLC,
a
Delaware limited liability company ("LICENSEE").
WITNESSETH:
WHEREAS,
LICENSOR is the owner of the intellectual property and technology identified
more fully in Schedule A attached hereto (the "Licensed Property");
and
WHEREAS,
LICENSOR has the power and authority to grant to LICENSEE the exclusive,
worldwide (the “Licensed Territory”), right, privilege and license to use the
Licensed Property in Licensee’s business, including, without limitation, for the
purpose of developing, manufacturing and selling products which incorporate
or
are otherwise based on the Licensed Property (the "Licensed Products”);
and
WHEREAS,
LICENSEE desires to obtain from LICENSOR the exclusive worldwide right,
privilege and license to use the Licensed Property in Licensee’s business,
including, without limitation, for the purpose of developing, manufacturing
and
selling products which incorporate or are otherwise based on the Licensed
Property.
NOW,
THEREFORE, in consideration of the promises and agreements set forth herein,
the
parties, each intending to be legally bound hereby, do promise and agree as
follows:
LICENSE
1. LICENSOR
hereby grants to LICENSEE for the period beginning on the date hereof and ending
on August 31, 2008 (the “Term”), an exclusive, worldwide royalty free right and
license to use the Licensed Property in Licensee’s business, including, without
limitation, for the purpose of developing, manufacturing, commercializing,
promoting, advertising and selling products which incorporate or are otherwise
based on the Licensed Property. The license includes, but is not limited to,
a
license under any and all patents and copyrights and any applications therefore
which have been filed or may be filed in the future with respect to the Licensed
Property.
2. Subject
to Section 21 hereof, all rights and title to and interest in any improvement
or
enhancement developed or discovered by LICENSEE in connection with the license
granted under Section 1 above or LICENSEE’S activities hereunder shall be vested
solely in LICENSOR and shall be deemed to be Licensed Property.
3. The
foregoing license shall be deemed to be, for purposes of Section 365(n) of
the
United States Bankruptcy Code and any foreign equivalent thereof, a license
of
rights to “intellectual property” as defined therein. LICENSEE, as licensee of
such rights, shall have the rights and elections with respect thereto as
specified in the United States Bankruptcy Code and any foreign equivalent
thereof. This Agreement shall be deemed to be an “agreement supplemental to” the
license for purposes of Section 365(n) and any foreign equivalent thereof.
If a
bankruptcy proceeding is commenced by or against LICENSOR (or any party
comprising LICENSOR) and LICENSOR (or a trustee or other party acting on its
behalf) thereafter rejects this Agreement or fails to perform all of its
obligations hereunder, then LICENSEE shall be entitled to receive, promptly
upon
request therefor, a complete duplicate of (or full access to) any such
intellectual property and all embodiments thereof.
AUDIT
4. LICENSOR
shall have the right, upon at least five (5) days written notice and no more
than once per calendar year, to inspect LICENSEE's books and records and all
other documents and material in the possession of or under the control of
LICENSEE with respect to the subject matter of this Agreement at the place
or
places where such records are normally retained by LICENSEE. LICENSOR shall
have
free and full access thereto for such purposes and shall be permitted to be
able
to make copies thereof and extracts therefrom.
5. All
books
and records relative to LICENSEE's obligations hereunder shall be maintained
and
kept accessible and available to LICENSOR for inspection for at least three
(3)
years after expiration or termination of this Agreement.
6. In
the
event that an investigation of LICENSEE's books and records is made, certain
confidential and proprietary business information of LICENSEE may necessarily
be
made available to the person or persons conducting such investigation. It is
agreed that such confidential and proprietary business information shall be
retrained in confidence by LICENSOR and shall not be used by LICENSOR or
disclosed to any third party, or without the prior express written permission
of
LICENSEE unless required by law. It is understood and agreed, however, that
such
information may be used in any proceeding based on LICENSEE's breach of any
of
its obligations under this Agreement.
WARRANTIES
& OBLIGATIONS
7. LICENSOR
hereby represents that except for the purchase option set forth in Section
4 of
the Master Agreement (as defined in Section 43 of this Agreement), it is has
good and valid title to the Licensed Property, free and clear of all Liens
(as
hereinafter defined) and there is no claim, litigation, or other proceeding
pending or threatened, which could impair, limit, diminish or otherwise impact
upon LICENSOR’S right in the Licensed Property or its ability to execute and
deliver and perform its obligations hereunder or under this Agreement. For
purposes of this Agreement, the term “Liens” shall mean any lien, encumbrance,
pledge, option, security interest, right of first refusal, mortgage, charge,
of
any kind (including any conditional sale agreement) or any subordination
arrangement in favor of another person.
8.
LICENSOR
further represents and warrants that it has the right and power to grant the
licenses granted herein and that there are no other agreements with any other
party in conflict herewith.
2
9. LICENSOR
further represents and warrants that (i) none of the Licensed Property infringes
any right of any third party (ii) no person is infringing on the rights of
LICENSOR in and to any of the Licensed Property and (iii) none of the Licensed
Property is in the public domain..
10. LICENSEE
agrees that it shall be solely responsible for the manufacture, production,
sale
and distribution of any Licensed Products and will bear all related costs
associated therewith.
NOTICES,
QUALITY CONTROL & SAMPLES
11. The
licenses granted hereunder are conditioned upon LICENSEE's full and complete
compliance with the marking provisions of any applicable trademark, patent
and
copyright laws of the United States and other countries in the Licensed
Territory.
12. The
Licensed Products, as well as all promotional, packaging and advertising
material relative thereto, shall include all appropriate legal notices are
required by LICENSEE.
13. The
Licensed Products, shall be of a high quality which is at least equal to
comparable products manufactured and marketed by LICENSEE and in conformity
with
a standard sample approved by LICENSOR.
14. If
the
quality of a class of the Licensed Products falls below such a production-run
quality, as previously approved by LICENSOR, LICENSEE shall use its reasonable
best efforts to restore such quality.
15. Prior
to
the commencement of manufacture and sale of the Licensed Products, LICENSEE
shall submit to LICENSOR, at no cost to LICENSOR and for approval as to quality,
samples of all Licensed Products which LICENSEE intends to manufacture and
sell
and one (1) complete set of all promotional and advertising material associated
therewith. Such approval by LICENSOR shall not be unreasonably withheld. Failure
of LICENSOR to approve such samples within ten (10) working days after receipt
hereof will be deemed approval. If LICENSOR should disapprove any sample, it
shall provide specific reasons for such disapproval. Once such samples have
been
approved by LICENSOR, LICENSEE shall not materially depart therefrom without
LICENSOR's prior express written consent, which shall be unreasonably
withheld.
16. The
LICENSEE agrees to permit LICENSOR or its representative to inspect the
facilities where the Licensed Products are being manufactured and
packaged.
NOTICE
17. Any
notice required to be given pursuant to this Agreement shall be in writing
and
delivered personally to the other designated party at the above stated address
or mailed by certified or registered mail, return receipt requested or delivered
by a recognized national overnight courier service.
18. Either
party may change the address to which notice is to be sent by written notice
to
the other in accordance with the provisions of this paragraph.
3
PATENTS,
TRADEMARKS AND COPYRIGHTS
19. LICENSOR
may seek, in its own name and at its own expense, appropriate patent, trademark
or copyright protection for the Licensed Property.
20. In
the
event that LICENSEE requests that LICENSOR obtain patent or trademark protection
for a particular item or in a particular country where LICENSOR had not,
heretofore, obtained such protection, LICENSOR agrees to take reasonable steps
to obtain such protection, provided, however, that LICENSEE shall be obligated
to reimburse LICENSOR for the cost of filing, prosecuting and maintaining
same.
21. It
is
understood and agreed that LICENSOR shall retain all right, title and interest
in the original Licensed Property as well as in any modifications or
improvements made to the Licensed Property by LICENSEE; provided, however,
that
notwithstanding the foregoing or any other provision set forth in this
Agreement, LICENSEE shall have and shall retain all right, title and interest
in
and to each of the inventory of Licensed Products.
22. The
parties agree to execute any documents reasonably requested by the other party
to effect any of the above provisions.
23. LICENSEE
acknowledges LICENSOR's that the Licensed Property is unique and original to
LICENSOR and that LICENSOR is the owner thereof. Subject to LICENSEE’s rights
under Section 4 of the Master Agreement to elect to transfer the Licensed
Property to a newly formed entity in consideration for the issuance to LICENSEE
or Advanced Electric Motors, Inc of 51% of the equity of such newly formed
entity and to elect to cause such newly formed entity to purchase the Licensed
Property from LICENSOR in consideration for the payment of One Dollar ($1.00),
LICENSEE shall not, at any time during or after the effective Term of the
Agreement dispute or contest, directly or indirectly, LICENSOR's exclusive
right
and title to the Licensed Property or the validity thereof.
TERMINATION
24. The
following termination rights are in addition to the termination rights provided
elsewhere in the Agreement:
25. Immediate
Right of Termination. LICENSOR shall have the right to immediately terminate
this Agreement by giving written notice to LICENSEE in the event that LICENSEE
does any of the following:
A. files
a
petition in bankruptcy or is adjudicated a bankrupt or insolvent, or makes
an
assignment for the benefit of creditors, or an arrangement pursuant to any
bankruptcy law, or if the LICENSEE discontinues its business or a receiver
is
appointed for the LICENSEE or for the LICENSEE's business and such receiver
is
not discharged within thirty (30) days; or
B. breaches
any of the provisions of this Agreement relating to the unauthorized assertion
of rights in the Licensed Property; or
4
C. fails,
after receipt of written notice from LICENSOR, to immediately discontinue the
distribution or sale of the Licensed Products or the use of any packaging or
promotional material which does not contain the requisite legal
legends.
26. Right
to
Terminate on Notice. This Agreement may be terminated by either party upon
thirty (30) days written notice to the other party in the event of a breach
of a
material provision of this Agreement by the other party, provided that, during
the thirty (30) day period, the breaching party fails to cure such breach.
In
addition, LICENSEE shall have the right to terminate this Agreement at any
time
on sixty (60) days written notice to LICENSOR.
POST
TERMINATION RIGHTS
27. Not
less
than thirty (30) days prior to the expiration of this Agreement or immediately
upon termination thereof, LICENSEE shall provide LICENSOR with a complete
schedule of all inventory of Licensed Products then on-hand (the
"Inventory");
28. Upon
expiration or termination of this Agreement, except for reason of a breach
of
LICENSEE'S duty to comply with the quality control or legal notice marking
requirements, LICENSEE shall be entitled to continue to sell such Inventory.
Such sales shall be made subject to all of the provisions of this Agreement.
29. Upon
the
expiration or termination of this Agreement, and except as provided in the
Master Agreement, all of the rights of LICENSEE under this Agreement shall
forthwith terminate and immediately revert to LICENSOR and LICENSEE shall
immediately discontinue all use of the Licensed Property, at no cost whatsoever
to LICENSOR.
30. Upon
termination of this Agreement for any reasons whatsoever and subject to the
terms of the Master Agreement, LICENSEE agrees to immediately return to LICENSOR
all material relating to the Licensed Property including, but not limited to,
all art work, color separations, prototypes and the like, as well as any market
studies or other tests or studies conducted by LICENSEE with respect to the
Licensed Property, at no cost whatsoever to LICENSOR.
GOOD
WILL
31. LICENSEE
recognizes the value of the good will associated with the Licensed Property
and
acknowledges that the Licensed Property and all rights therein including the
good will pertaining thereto, belong exclusively to LICENSOR.
INFRINGEMENTS
32. LICENSEE
shall have the right, in its discretion, to institute and prosecute lawsuits
against third persons for infringement of their rights licensed in this
Agreement. If LICENSEE does not institute an infringement suit within ninety
(90) days after LICENSOR's written request that it do so, LICENSOR may institute
and prosecute such lawsuit. Any lawsuit shall be prosecuted solely at the cost
and expense of the party bringing suit and all sums recovered in any such
lawsuits, whether by judgment, settlement or otherwise, in excess of the amount
of reasonable attorneys' fees and other out of pocket expenses of such suit,
shall be divided equally between the parties. Upon request of the party bringing
the lawsuit, the other party shall execute all papers, testify on all matters,
and otherwise cooperate in every way necessary and desirable for the prosecution
of any such lawsuit. The party bringing suit shall reimburse the other party
for
the expenses incurred as a result of such cooperation.
5
INDEMNITY
33. LICENSEE
agrees to defend and indemnify LICENSOR, its officers, directors, agents and
employees, against all costs, expenses and losses (including reasonable
attorneys' fees and costs) incurred through claims of third parties against
LICENSOR, based on the manufacture or sale of the Licensed Products including,
but not limited to, actions founded on product liability; provided, however,
that LICENSEE shall not be obligated to defend and indemnify LICENSOR against
any costs, expenses or losses described in Section 32 of this
Agreement.
34. LICENSOR
agrees to defend and indemnify LICENSEE, it officers, directors, agents and
employees, against all costs, expenses and losses (including reasonable
attorneys' fees and costs) incurred through claims of third parties against
LICENSEE challenging the authenticity of the originally submitted Licensed
Property or LICENSOR’S exclusive ownership of the Licensed Property. This
indemnity does not cover any modifications or changes made to the Licensed
Property by LICENSEE.
JURISDICTION
35. This
Agreement shall be governed in accordance with the laws of the State of New
York..
DISPUTES
36. All
disputes under this Agreement shall be resolved by the courts of the State
of
New York and the parties all consent to the jurisdiction of such courts, agree
to accept service of process by mail, and hereby waive and jurisdictional or
venue defenses otherwise available to it.
FORCE
MAJEURE
37. It
is
understood and agreed that in the event that an act of government, or war
conditions, or fire, flood or labor trouble in the factory of LICENSEE or in
the
factory of those manufacturing parts necessary for the manufacture of the
Licensed Products, prevents the performance by LICENSEE of the provisions of
this Agreement, then such non performance by LICENSEE shall not be considered
as
grounds for breach of this Agreement and such nonperformance shall be excused
while the conditions herein prevail and for two (2) months
thereafter.
AGREEMENT
BINDING ON SUCCESSORS
38. The
provisions of the Agreement shall be binding upon and shall inure to the benefit
of the parties hereto, their heirs, administrators, successors and
assigns.
6
NO
JOINT VENTURE
39. Nothing
contained herein shall be construed as a joint venture or shall make one party
the agent of the other party.
ASSIGNABILITY
40. The
license granted hereunder is personal to LICENSEE and shall not be assigned
by
any act of LICENSEE or by operation of law unless in connection with a transfer
of substantially all of the assets of LICENSEE or with the consent of
LICENSOR.
WAIVER
41. No
waiver
by either party of any default shall be deemed as a waiver of prior or
subsequent default of the same or other provisions of this
Agreement.
SEVERABILITY
42. If
any
term, clause or provision hereof is held invalid or unenforceable by a court
of
competent jurisdiction, such invalidity shall not affect the validity or
operation of any other term, clause or provision and such invalid term, clause
or provision shall be deemed to be severed from the Agreement.
INTEGRATION
43. This
Agreement and the Agreement dated as of April 9, 2007 by and among Xxxxxxx
Technology LLC, Harbin Electric, Inc, Xxxxxxxx Xxxx and Xxxxxxxx Xxx (the
“Master Agreement”) constitute the entire understanding of the parties with
respect to the subject matter hereof, and supersede all prior agreements among
the parties. In the event of any conflict between the terms of this Agreement
and the terms of the Master Agreement, the terms of the Master Agreement shall
control. This Agreement may not be modified or amended except in writing signed
by the parties hereto.
7
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have
each caused to be affixed hereto its or his/her hand and seal the day
indicated.
|
XXXXXXX
TECHNOLOGY, LLC
|
|||
|
|
|||
|
By:
/s/ Xxxxx
Xxx
|
|||
|
Name:
Xxxxx
Xxx
Title:
Managing
Director
Date:
April
9, 2007
|
|
/s/
Xxxxxxxx Xxxx
|
|||
|
Name:
Xxxxxxxx Xxxx
|
|
/s/
Xxxxxxxx Xxx
|
|||
|
Name:
Xxxxxxxx Xxx
|
|
ADVANCED
AUTOMATION GROUP, LLC
|
|||
|
|
|||
|
By:
/s/
Xxxxxx Xxxx
|
|||
|
Name:
Xxxxxx Xxxx
Title:
Chairman
and Chief Executive Officer
Date:
April
9, 2007
|
8
SCHEDULE
A
The
following shall constitute the Licensed Property:
All
patents, copyrights, trademarks, processes, formulations, trade secrets, methods
of analysis, research and development, testing, designs, techniques, data,
plans, specifications, drawings, know-how, operations experience and procedures,
special knowledge of Licensor and its employees, sales literature, customer
manuals, shop manuals, warranties, and other information related to precision
servo motor controllers for industrial automation, whether patented or
unpatented, copyrighted or uncopyrighted, trademarked or untrademarked, that
is
currently owned, used, or controlled by Licensor or any affiliate of Licensor
or, during the Term hereof, shall be developed, owned, used, or controlled
by
Licensor or any affiliate of Licensor.
9
