LICENSE AGREEMENT
This is an AGREEMENT between Tecumseh Products Company, a Michigan
corporation having a place of business at 000 Xxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000 ("TECUMSEH") and Technology Research Corporation, a
Florida corporation, having a place of business at 0000 000xx Xxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx, 00000 ("TRC").
1. RECITALS
1.01 TECUMSEH has developed a compressor fault interrupter device; owns
certain intellectual property rights pertaining to such devices; and has
expertise in the design, manufacture and marketing of such devices.
1.02 TRC has developed, manufactures and markets a variety of ground fault
protection devices including over current sensors; owns certain intellectual
property rights pertaining to such devices; and has expertise in the design,
manufacture and marketing of such devices.
1.03 Both parties are interested in the manufacture and sale of new products
which are based on the combination of the designs of TRC's fault to ground
protection devices with the design of TECUMSEH's compressor fault interrupter
device, and, in particular, the design, manufacture and sale of such a
product which may be used with air conditioning and refrigeration units.
1.04 TECUMSEH is further interested in manufacturing additional products,
for sale exclusively to TRC, which are similar to TRC's existing fault to
ground protection devices and which do not include TECUMSEH's compressor
fault interrupter.
NOW THEREFORE, the parties agree as follows:
2. DEFINITIONS
2.01 As used in this AGREEMENT, the term "TECUMSEH CFI TECHNOLOGY" shall
refer to the design and the manufacturing details of an instantaneous current
trip that is tuned to protect the integrity of a hermetically sealed
compressor system in the event of a high current failure.
2.02 As used in this AGREEMENT, the term "TRC TECHNOLOGY" shall refer to the
design and the manufacturing details of TRC's over current detection, ground-
fault circuit-interrupter ("GFCI"), appliance leakage current interrupter
("ALCI"), immersion-detection circuit-interrupter ("IDCJ") and equipment
leakage current interrupter ("ELCI") products as exemplified, in part, by
TRC's "FireShield" products.
2.03 As used in this AGREEMENT, the term "TECUMSEH IP" shall mean those
patents and patent applications including patents which issue therefrom
identified in Appendix A, as well as all of the patents, patent applications,
copyrights, know-how and trade secrets owned by TECUMSEH necessary for the
manufacture, use and sale of LICENSED CFI PRODUCTS.
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2.04 As used in this AGREEMENT, the term "TRC IP" shall mean those patents
and patent applications including patents which issue therefrom identified in
Appendix B, as well as all of the patents, patent applications, copyrights,
know-how and trade secrets owned by TRC necessary for the manufacture, use
and sale of LICENSED AC/REFRIGERATION PRODUCTS and/or LICENSED TRC PRODUCTS.
2.05 As used in this AGREEMENT, the term "LICENSED CFI PRODUCTS" shall mean
products having a design which combines the TECUMSEH CFI TECHNOLOGY with the
TRC TECHNOLOGY
2.06 As used in this AGREEMENT, the term "LICENSED AC/REFRIGERATION
PRODUCTS" shall mean products employing the TRC TECHNOLOGY for use in
refrigeration or air conditioning systems or products having a design which
combines the TECUMSEH CFI TECHNOLOGY with the TRC TECHNOLOGY.
2.07 As used in this AGREEMENT, the term "LICENSED TRC PRODUCTS" shall mean
products having a design embodying TRC TECHNOLOGY but not the TECUMSEH CFI
TECHNOLOGY.
2.08 As used in this AGREEMENT, the term "Sold" shall be applicable to a
product at that point in time at which the selling party invoices their
dealers or customers for shipment of the product.
3. CONFIDENTIAL INFORMATION
3.01 Any information disclosed by one party ("DISCLOSING PARTY") to the
other party ("RECEIVING PARTY"), which the DISCLOSING PARTY deems to be
confidential and proprietary shall be disclosed in writing and marked with an
appropriate legend designating such information as confidential at the time
of disclosure. Any such information disclosed verbally, visually or in other
tangible form shall be identified as confidential at the time of its
disclosure and reduced to writing and appropriately marked as confidential
within thirty (30) days of its disclosure.
3.02 The RECEIVING PARTY will hold in confidence and not use for any purpose
other than the exercise of license rights granted under this AGREEMENT, any
information disclosed by the DISCLOSING PARTY under Section 3.01, provided
that the RECEIVING PARTY shall have no obligation with respect to any
information which is:
3.02.1 already publicly known or in the public domain at the time of
its disclosure to the RECEIVING PARTY;
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3.02.2 becomes publicly known or in the public domain subsequent to
its disclosure to the RECEIVING PARTY, through no fault of the
RECEIVING PARTY;
3.02.3 is already known to the RECEIVING PARTY at the time of its
disclosure to the RECEIVING PARTY or is subsequently developed by the
RECEIVING PARTY by employees who had no access to the confidential
information disclosed by the DISCLOSING PARTY; or
3.02.4 is subsequently disclosed to the RECEIVING PARTY by a third
party having no obligation of confidence to the DISCLOSING PARTY.
3.03 The confidential disclosure obligations assumed by the RECEIVING
PARTIES under this AGREEMENT shall terminate at the end of the term set forth
in this AGREEMENT.
4. DOCUMENTATION AND TECHNICAL ASSISTANCE
4.01 TRC shall provide to TECUMSEH documentation and technical assistance
reasonably necessary for TECUMSEH to manufacture LICENSED AC/REFRIGERATION
PRODUCTS and LICENSED TRC PRODUCTS including, but not necessarily limited to:
4.01.1 Copies of bills of materials and manufacturing drawings for
pertinent TRC PRODUCTS.
4.01.2 TRC shall designate a TRC Project Engineer who shall be
available to assist TECUMSEH in the further development and manufacture
of the LICENSED AC/REGRIGERATION PRODUCTS and LICENSED TRC PRODUCTS
4.01.3 TRC shall also make available to TECUMSEH technicians,
draftsman, laboratory testing facilities, and assistance in obtaining
U.L. approval and with other agency product approval processes at the
following rates:
4.01.3.1 Technicians: $ $50 per hour.
4.01.3.2 Draftsman: $ $50 per hour.
4.01.3.3 Laboratory Testing Facilities: $500 per day.
4.01.3.4 Design Engineering: $150 per hour.
4.01.4
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4.01.4.1 Within thirty (30) days of the EFFECTIVE DATE of this
AGREEMENT, TECUMSEH shall pay to TRC an advance payment in the
amount of $50,000 for such services.
4.01.4.2 TRC shall provide to TECUMSEH a written accounting of
incurred fees on a periodic basis upon TECUMSEH's request.
4.01.4.3 TECUMSEH shall not be obligated to make any payments to
TRC in excess of the advance payment set forth in section 4.01.4.1
for any services or goods provided under this AGREEMENT unless
such additional payments were the subject of the prior written
approval of TECUMSEH.
4.02 TRC shall provide TECUMSEH with access to its certification files,
including U.L. files, and provide reasonable assistance to TECUMSEH in
obtaining necessary certifications for the LICENSED PRODUCTS and TRC PRODUCTS
manufactured by TECUMSEH.
4.03 Any inventions, copyrightable works, know-how, trade secrets or other
intellectual properties developed under this AGREEMENT by one or more
employee of one of the parties hereto, shall be owned by the party whose
employees conceived or developed such invention, copyrightable work, know-
how, trade secret or other intellectual property. For any inventions,
copyrightable works, know-how, trade secrets or other intellectual properties
developed under this AGREEMENT by employees of both of the parties hereto,
such intellectual property shall be jointly owned by the parties hereto.
5. LICENSE
5.01
5.01.1 TRC hereby grants to TECUMSEH a world-wide, non-exclusive, non-
transferable license, with no right to sublicense, under the TRC IP to
manufacture, have manufactured, use and sell LICENSED AC/REFRIGERATION
PRODUCTS for use with refrigeration or air conditioning systems or
products.
5.01.2 TRC hereby grants to TECUMSEH a world-wide, non-exclusive, non-
transferable, royalty-free license, with no right to sublicense, under
the TRC IP to manufacture and have manufactured LICENSED TRC PRODUCTS
for sale to TRC.
5.02
5.02.1 TECUMSEH hereby grants to TRC a world-wide, non-exclusive, non-
transferable license, with no right to sublicense, under the TECUMSEH
IP to manufacture, have manufactured, use and sell LICENSED CFI
PRODUCTS.
5.02.2 Upon the prior written approval by TECUMSEH of an identified
sub-licensee, TRC may extend a sublicense under the license granted
under section 5.02.1 to manufacture, have manufactured, use and sell
LICENSED CFI PRODUCTS but shall in all respects be responsible for such
manufacture, use or sales under all the terms and conditions of this
AGREEMENT, as though the manufacture, use and sales were TRC's own act.
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6. ROYALTIES AND ACCOUNTING
6.01 In consideration of the rights licensed by TRC to TECUMSEH under
section 5.01.1 of this AGREEMENT, TECUMSEH agrees to compensate TRC as set
forth below:
TECUMSEH shall pay TRC a royalty of $0.25 per unit for each
LICENSED AC/REFRIGERATION PRODUCT sold by TECUMSEH.
6.02 In consideration of the rights licensed by TECUMSEH to TRC under
section 5.02.1 and 5.02.2 of this AGREEMENT, TRC agrees to compensate
TECUMSEH as set forth below:
TRC shall pay TECUMSEH a royalty of $0.25 per unit for each
LICENSED CFI PRODUCT sold by TRC or a sublicensee of TRC.
6.03 Royalties shall be paid on a quarterly basis for products subject to
the royalty provisions of this AGREEMENT which are Sold during such quarter,
and shall be paid within thirty (30) days of the end of each quarter (i.e.,
March 31, June 30, September 30 and December 31).
6.04 Each party hereto shall maintain such regular books of account as are
necessary for the other party to evaluate the accuracy of payments rendered
pursuant to section 6. A certified public accountant appointed by the party
initiating such an evaluation, shall be entitled to inspect such records and
books of account of the other party solely for the purpose of verifying the
accuracy of any such payment and such accountant shall disclose to initiating
party only such information necessary to affirm or refute the accuracy of the
payments. Such inspection must be made during the evaluated party's normal
business hours and shall not be made more often than once per year.
All contracts or arrangements between a party hereto and any sublicensee
shall require that such sublicensee make available for review by a certified
public accountant appointed by the party initiating such an evaluation, all
records and books of accounts necessary or appropriate solely for the purpose
of verifying the accuracy of records of sales of products subject to a
sublicense hereunder by such sublicensees. Such accountants shall disclose to
the party initiating such an evaluation only such information necessary to
affirm or refute the accuracy of the payment. Such inspection must be made
during such sublicensee's business hours and shall not be made more than once
per year.
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The cost and expenses of such records' inspection shall be borne by the party
initiating such evaluation unless the audit discloses that adjustments
exceeding five percent (5%) need to be made in amounts paid to the party
initiating such evaluation, in which case the other party shall reimburse the
party initiating such evaluation its reasonable expenses incurred in
verifying the accuracy of such sales records.
Each party hereto and all sublicensees shall retain their records for a
period of three (3) years after each financial statement to permit such
verifications.
7. EFFECTIVE DATE, TERM AND TERMINATION
7.01 This AGREEMENT shall have an EFFECTIVE DATE of March 31, 2002, and
unless terminated earlier as hereinafter provided, shall terminate ten (10)
years thereafter on March31, 2012.
7.02 Following the termination of this AGREEMENT pursuant to section 7.01,
nothing in this AGREEMENT shall be interpreted to prevent the parties from
manufacturing, using and selling products previously licensed under this
AGREEMENT on a royalty-free basis unless such products are covered by an
enforceable patent owned by the other party.
7.03 Either party may terminate this Agreement if the other party breaches
any material provision and has failed to cure such breach within sixty (60)
days following written notice of the details of such breach by the
complaining party.
7.04 This AGREEMENT may be extended by the mutual consent of the parties
hereto under the terms and provisions of such future mutual consent.
8. INFRINGEMENT
8.01 In the event that any third party infringes any of the TECUMSEH IP
rights licensed to TRC by TECU7MSEH under this Agreement, any and all legal
actions against such third party shall be at the sole discretion and control
of TECUMSEH and at the sole expense and for the sole benefit of TECUMSEH.
In the event TECUMSEH brings a legal action against such third party, TRC
agrees to cooperate with TECUMSEH at TECUMSEH's expense in such action and to
make available all evidence, documents, data, material and other matters in
its possession which are pertinent and valuable to the success of such legal
action.
8.02 In the event that any third party infringes any of the TRC IP rights
licensed to TECUMSEH by TRC under this Agreement, any and all legal actions
against such third party shall be at the sole discretion and control of TRC
and at the sole expense and for the sole benefit of TRC.
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In the event TRC brings a legal action against such third party, TECUMSEH
agrees to cooperate with TRC at TRC's expense in such action and to make
available all evidence, documents, data, material and other matters in its
possession which are pertinent and valuable to the success of such legal
action.
9. MARKING
9.01 TECUMSEH agrees to label those LICENSED AC/REFRIGERATION PRODUCTS sold
by TECUMSEH under this AGREEMENT, and product literature for such products,
with the term "FireShield" for such products which utilize the same design as
TRC's "FireShield"-labelled products.
9.02 TRC warrants and represents that it has the right to xxxx products
identified in section 9.01 with the term "FireShield". TRC further agrees to
indemnify TECUMSELI for any and all expenses and damages incurred by TECUMSEH
for any and all legal claims threatened or filed against TECUMSEH for the use
of the term "FireShield" in association with products identified in section
9.01.
10. WARRANTIES
10.01 TECUMSEH represents and warrants in respect to the TECUMSEH IP that it
has the legal power to extend the rights granted to TRC in this AGREEMENT and
that it has not made and will not make any commitments to others inconsistent
with or in derogation of such rights.
10.02 TRC represents and warrants in respect to the TRC IP that it has the
legal power to extend the rights granted to TECUMSEH in this AGREEMENT and
that it has not made and will not make any commitments to others inconsistent
with or in derogation of such rights.
11. MISCELLANEOUS
11.01 PROHIB1TION ON ASSIGNMENT: Neither this AGREEMENT nor any of the
rights conferred by this AGREEMENT is assignable by either party hereto
without the prior written consent of the other party hereto, which consent
will not be unreasonably withheld.
11.02 INTEREST: All sums owing under this AGREEMENT that are not received
within ten (10) days after the due date shall bear simple interest of 1.5%
per month until paid (or the maximum rate permitted by law, if lesser).
11.03 NOTICES: All notices required under this AGREEMENT shall be given in
writing and shall be deemed given if sent by certified mail, return receipt
requested, to the following:
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For TECUMSEH:
Xxxx X. Xxxxxxx
For TRC:
Xxxxxxx Xxxxxxx
11.04 CHOICE OF LAW: This AGREEMENT shall be interpreted and construed in
accordance with the laws of the State of Michigan without regard to any
conflict of laws principles.
11.05 ENTIRE AGREEMENT: This AGREEMENT constitutes the entire agreement
between the parties relating to the subject matter of this AGREEMENT and
supercedes all prior discussions between the parties. No amendment or
modification of this AGREEMENT shall be valid unless in writing and signed by
both parties.
11.06 DUPLICATE ORIGINALS: This AGREEMENT shall be executed in two
counterparts, each of which shall for all purposes be deemed an original.
IN WITNESS WHEREOF the parties have caused this AGREEMENT to be executed by
their duly authorized representatives:
TECUMSEH TRC
Tecumseh Products Company Technology Research Corporation
000 Xxxx Xxxxxxxxx Xxxxxx 5250 000000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000 Xxxxxxxxxx, Xxxxxxx 00000
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxx Xxxxxxx
Title: President & CEO Title: President
Date: 22 March 2002 Date: 22 March 2002
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APPENDIX A
TECUMSEH IP
U.S. Patent Application Serial No. 10/0 14,692 entitled COMPRESSOR TERMINAL
FAULT INTERRUPTION METHOD AND APPARATUS
PCT Application filed on December 11, 2001 entitled COMPRESSOR TERMINAL FAULT
INTERRUPTION METHOD AND APPARATUS which claims priority from U.S. Application
Serial No. 60/254,945.
APPENDIX B
TRC IP
U.S. Xxx. No. 4,567,456 entitled RESETTABLE CIRCUIT CLOSING DEVICE
U.S. Xxx. No. 5,229,730 entitled RESETTABLE CIRCUIT INTERRUPTER
U.S. Xxx. No. 4,931,894 entitled GROUND FAULT CURRENT INTERRUPTER CIRCUIT
WITH ARCING PROTECTION
U.S. Xxx. No. 6,292,337 B1 entitled ELECTRICAL SYSTEM WITH ARC PROTECTION
