EX-10.23 32 d256111dex1023.htm EX-10.23 INTELLECTUAL PROPERTY LICENSE AGREEMENT
EXHIBIT 10.23
INTELLECTUAL PROPERTY LICENSE AGREEMENT
This INTELLECTUAL PROPERTY LICENSE AGREEMENT (this “Agreement”), dated as of March 16, 2016 (the “Effective Date”), is made and entered into by and between Trican Well Service Ltd., an Alberta corporation (“Licensor”) and Xxxxx Frac LP (“Buyer”). Licensor and Buyer are sometimes collectively referred to herein as the “Parties” and individually referred to herein as a “Party”.
WHEREAS, pursuant to that certain Asset Purchase Agreement dated January 25, 2016 (the “Purchase Agreement”), by and among Xxxxx Group Holdings, LLC, a Delaware limited liability company (“Xxxxx Parent”), Buyer (Buyer together with Xxxxx Parent, the “Buyer Companies”), Licensor and Trican Well Service, L.P., a Delaware limited partnership (“Trican U.S.”), (Trican U.S. collectively with any other Subsidiary of Licensor that has any right, title and interest in the Purchased Assets, including those Subsidiaries set forth on Annex I thereto, the “Seller Companies”), Buyer shall license from the Licensor, and Licensor has agreed to license to Buyer, certain of Licensor’s Intellectual Property Rights utilized in connection with the Business within the Territory as of the Closing Date.
ARTICLE I
Section 1.1 For the purpose of this Agreement, capitalized terms used in this Agreement shall have the meanings specified in this Section 1.1. Capitalized terms not otherwise defined in this Agreement have the meanings set forth in the Purchase Agreement.
“Affiliate(s)” as used in this Agreement in connection with Buyer or Licensor means any Person, company or legal entity of which the designated company or legal entity now or hereafter owns or controls, directly or indirectly, more than fifty percent (50%) of the stock having the right to vote for directors thereof or other indicia of equity, or any Person, company or legal entity which owns or controls, or is under common control with, the designated company or legal entity. For the purpose of this definition, the stock or other indicia of equity owned or controlled by a particular Person, company or legal entity shall be deemed to include all stock owned or controlled, directly or indirectly, by any other Person, company or legal entity of which the particular Person, company or legal entity owns or controls, directly or indirectly, more than fifty percent (50%) of the stock having the right to vote for directors thereof or other indicia of equity.
“Canadian Insolvency Law” means the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the Winding-Up and Restructuring Act (Canada) or any other like, equivalent or analogous legislation of any Canadian jurisdiction and any plan of arrangement law provision of any corporations statute under which a corporation may propose a compromise or an arrangement with respect to its creditors or any class or the claims of any class of creditors of the corporation.
“Canadian Insolvency Proceeding” in relation to any Person means any proceeding contemplated by any application, petition, assignment, filing of notice or other means, whether voluntary or involuntary, under any Canadian Insolvency Law seeking any moratorium, reorganization, adjustment, composition, proposal, compromise, arrangement, administration or other like or similar relief in respect of any or all of the obligations of that Person, seeking the winding up, liquidation or dissolution of that Person or all or any part of its property, seeking any judgment or order declaring, finding or adjudging that Person insolvent or bankrupt, seeking the appointment (provisional, interim or permanent) of any receiver or resulting, by operation of law, in the bankruptcy of that Person.
“Change-of-Control-of-the-Company” means (i) Sale-of-the-Company; (ii) another Person, other than Permitted Holders, directly or indirectly owns a majority of the voting equity securities of Xxxxx Parent; or (iii) Buyer ceases to be a wholly-owned Subsidiary of Xxxxx Parent (or its successor).
“Confidential Information” means any confidential and proprietary information that one Party (the “Disclosing Party”) discloses to the other Party (the “Receiving Party”) hereunder, or that the Receiving Party otherwise obtains hereunder, including Know-How, algorithms, source code, specifications, methods of processing, techniques, data, ideas, concepts, drawings, designs, proprietary electronic equipment, software and schematics. The terms and conditions of this Agreement shall be the Confidential Information of both Parties. Without limiting the generality of the foregoing, the Parties acknowledge and agree that any Know-How that comprise the Licensed Intellectual Property are the Confidential Information of Licensor. Notwithstanding any of the foregoing, Confidential Information does not include any information the Receiving Party can establish through written documentation: (a) is or, through no improper action or inaction by the Receiving Party or any of its authorized representatives, becomes generally available and known to the public; (b) was rightfully in the Receiving Party’s possession or known by it without any obligation of confidentiality prior to receipt from the Disclosing Party; (c) was rightfully disclosed to the Receiving Party without any restriction by a third party that was authorized to make such disclosure; or (d) was independently developed by the Receiving Party without the use of or reference to any Confidential Information of the Disclosing Party.
“Contractor” means, with respect to a Party, any Person engaged by such Party to perform a service for or on behalf of such Party including selling, distributing, maintaining or producing any products or services of such Party, including manufacturing products for or on behalf of a Party, in connection with providing oilfield services.
“Electronic Control Systems Technology” means the proprietary electronic control systems and Software used in the Business as of the Closing Date, including the Trican pump control software, owned by Licensor.
“Intellectual Property” means (i) patents; (ii) copyrights, works of authorship (including Software), and all registrations, applications, and renewals of any of the foregoing; and (iii) Know-How. For the avoidance of doubt, “Intellectual Property,” under this Agreement, shall not include any trademarks or Internet domain names.
“Xxxxx Parties” means Xxxxx Xxxxx, Xxxxx Xxxxx, Xxx Xxxxx, Xxxxx Xxxxx and KSD Newco Corporation (each, including their respective successors and permitted assigns).
“Know-How” means trade secret and confidential and proprietary information concerning industrial, commercial or scientific experience, including, but not limited to, trade secret and confidential information regarding technology, know-how, databases, inventions, formulas, processes, developments and research.
“Licensed Intellectual Property” means Intellectual Property owned by Licensor and used in the Electronic Control Systems Technology, including the Intellectual Property set forth on Exhibit 1.
“Newly Developed IP” means any Intellectual Property related to the Business (but not the Excluded Businesses) conceived or developed by or on behalf of the Licensor or its Affiliates after the Effective Date of this Agreement.
“Permitted Holders” means (i) funds and accounts managed by Cerberus Capital Management, L.P. or its Affiliates; (ii) the Xxxxx Parties or its Affiliates; and (iii) Trican Parent or its Affiliates.
“Sale-of-the-Company” means the sale of all or substantially all of the consolidated assets of Xxxxx Parent to a Person the majority of the voting equity securities of which are not owned by Permitted Holders, whether held by Xxxxx Parent or one or more of its Subsidiaries, and whether by way of an asset sale or direct or indirect sale of equity interests, tender offer, merger, consolidation or other similar transaction.
“Software” means any and all computer programs, including operating system and applications software, computerized implementations of algorithms, and program interfaces, whether in source code or object code form (including all of the foregoing that is installed on computer hardware) and all available documentation, including user manuals, relating to the foregoing.
“Territory” shall mean the United States (including Alaska and Hawaii), including its territorial waters.
(iv) reference to a Person in a particular capacity or capacities excludes such Person in any other capacity; (v) reference to any contract means such contract as amended, supplemented or modified from time to time in accordance with the terms thereof; (vi) all references to Sections shall be deemed to be references to the Sections of this Agreement; (vii) where any provision of this Agreement refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person; and (viii) whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.”
ARTICLE II
LICENSES; DOCUMENTATION; TECHNICAL SUPPORT
no such licenses exist, consistent with comparable, commercially reasonable non-exclusive license agreements in the industry. Within twenty days after the beginning of the 60 day period, Licensor shall transmit to Buyer a form of license agreement in compliance with this Section 2.3. If Buyer does not elect to license the Newly Developed IP, Buyer may, at any time during the Term (subject to Section 4.2(b)), license on a non-exclusive basis such Newly Developed IP on terms at least as favorable as the most favorable terms granted by Licensor to any other licensee(s).
ARTICLE III
DOCUMENTATION; TECHNICAL SUPPORT
ARTICLE IV
TERM AND LICENSE TERMINATION; ASSIGNMENTS
Section 4.2 Termination for Breach.
Section 4.3 Assignments; Preservation of Rights.
ARTICLE V
request in such notice to enjoin and/or seek damages and other monetary remedies for such infringements. Upon Licensor’s reasonable inquiry into and confirmation that such infringement or misappropriating is occurring and there is a legal basis for bringing a legal action, Licensor shall commence, within a reasonable period following Buyer’s notice, any such action or proceeding at Buyer’s request. Licensor reserves the right to first transmit a demand letter seeking cessation of such infringement or misappropriation before filing a legal action.
ARTICLE VI
ARTICLE VII
if to the Licensor:
Trican Well Service Ltd.
2900, 000 - 0xx Xxx XX
Xxxxxxx, XX x X0X 0X0
Facsimile: 403.231.7975
Attention: Xxxx Xxxxxxxxxx, Chief Executive Officer
with a copy to (which shall not constitute notice):
Blake, Xxxxxxx & Xxxxxxx LLP
Suite 3500
000 0xx Xxxxxx X.X.
Xxxxxxx XX X0X 0X0
Xxxxxx
Facsimile: 403.260.9700
Attention: Xxx Xxxxxx
if to Buyer:
Xxxxx Frac LP
0000 Xxxx Xxxx
Xxxxxxx, XX 00000
Facsimile: 713.960.1048
Attention:
Xxxxx Xxxxxxx, Chairman and Chief Executive Officer
Xxxx Xxxxxx, President and Chief Financial Officer
with a copy to (which shall not constitute notice):
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
A Party may change its address and contact information for purposes of this Section 7.1 by providing notice of such change in writing to the other parties in accordance with this Section 7.1.
Section 7.4 Waivers and Consents; Amendments.
(a) For the purposes of this Agreement and all Contracts, documents and instruments executed pursuant hereto, no course of dealing between or among any of the parties hereto and no delay on the part of any Party hereto in exercising any rights hereunder or thereunder shall operate as a waiver of the rights hereof and thereof. No covenant or provision hereof may be waived otherwise than by a written instrument signed by the Party or Parties so waiving such covenant or other provision as contemplated herein.
(b) No amendment to this Agreement may be made without the written consent of Buyer and the Licensor.
Section 7.5 Licensor Bankruptcy.
(a) All rights and licenses granted by Licensor under this Agreement are and shall be deemed to be rights and licenses to “intellectual property” and the subject matter of this Agreement, including all Licensed Intellectual Property and Newly Developed IP, is and shall be deemed to be “embodiments” of “intellectual property,” in each case, as such terms are used in and interpreted under Section 365(n) of the United States Bankruptcy Code (the “Code”) (11 U.S.C. § 365(n)).
(b) This Agreement and the obligations of Licensor hereunder are not assignable by Licensor by reason of their nature and may not be assigned by court order in a Canadian Insolvency Proceedings involving Licensor (including under Section 84.1 of the Bankruptcy and Insolvency Act (Canada) (“BIA”), section 11.3 of the Companies’ Creditors Arrangement Act (Canada) (“CCAA”) and any statutory provisions or legal or equitable principles of similar effect in any jurisdiction). All rights and licenses granted by Licensor under this Agreement are and shall be deemed to be rights to use intellectual property as contemplated in Section 65.11(7) of the BIA and Section 32(6) of the CCAA, and Buyer is and shall be entitled to the protections of those legislative provisions, and all statutory provisions or legal or equitable principles of similar effect in all jurisdictions.
(c) Buyer shall have all rights, elections and protections under the Code, the BIA, the CCAA and all other Canadian Insolvency Laws and principles of law and equity with respect to this Agreement and the subject matter hereof. Without limiting the generality of the foregoing, Licensor acknowledges and agrees that, if Licensor or its estate becomes subject to any bankruptcy or similar proceedings under the Code or otherwise, or becomes subject to any Canadian Insolvency Proceedings:
(i) Subject to Buyer’s rights of election under Section 365(n), of the Code and legal and equitable rights of similar effect in other jurisdictions, all rights, licenses and privileges granted to Buyer under this Agreement will continue subject to the respective terms and conditions hereof, and will not be affected, even by rejection, disclaimer or resiliation of this Agreement; and
(ii) Buyer shall be entitled to a complete duplicate of (or complete access to, as appropriate) all Licensed Intellectual Property and Newly Developed IP, as applicable, and embodiments thereof, which, if not already in Buyer’s possession, shall be promptly delivered to Buyer or its designee, unless Licensor elects to and does in fact continue to perform all of its obligations under this Agreement.
(d) Notwithstanding the foregoing, if the Licensor or its estate becomes subject to any bankruptcy or similar proceeding under the Code or becomes subject to any Canadian Insolvency Proceedings and as a result of which this Agreement is terminated, rejected, disclaimed or resiliated, or Buyer shall otherwise lose its rights under this Agreement in connection with such proceeding, then Trican U.S.’s Xxxxx Common Equity Units will
immediately and automatically be reduced on a dollar-for-dollar basis based on the amount of losses, damages, fees, costs, expenses ( including reasonable fees and expenses of outside counsel), fines and penalties (“Losses”) incurred by Buyer related to or arising from Buyer’s loss of rights under this Agreement. Such Losses may include the fair market value of the licenses granted under this Agreement, Buyer’s costs and expenses to replace any Intellectual Property licensed or licenseable under this Agreement, and damage to the Business.
Section 7.7 Governing Law. This Agreement shall be deemed to be a Contract made under, and shall be construed in accordance with, the Laws of the State of Delaware applicable to Contracts entered into, and to be wholly performed within such State.
Section 7.8 Jurisdiction. Except as provided in this Section 7.8, each of the Parties hereto irrevocably and unconditionally consents to the sole and exclusive jurisdiction of the Court of Chancery of the State of Delaware or, if such Court does not have jurisdiction, in the courts of the State of Delaware, or if it has or can acquire jurisdiction, in the United States District Court for the District of Delaware, and each of the parties hereby consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any Party anywhere in the world, whether within or without the State of Delaware. Each of the Parties hereto hereby consents to service of process by registered mail at the address to which notices are to be given. Each of the Parties hereto agrees that its or his submission to jurisdiction and its or his consent to service of process by mail is made for the express benefit of the other Parties hereto.
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IN WITNESS WHEREOF, the Parties hereto have signed and executed this Intellectual Property License Agreement on the Effective Date.
XXXXX FRAC LP | ||
By: | Xxxxx Frac GP, LLC, as the general partner of the Company | |
By: | KGH Intermediate Holdco II, LLC, its managing member | |
By: | /s/ XXXXXXX XXXXXX | |
Name: | Xxxxxxx Xxxxxx | |
Title: | Vice President and Chief Financial Officer | |
TRICAN WELL SERVICE LTD | ||
By: | /s/ XXXX X. XXXXXXXXXX | |
Name: | Xxxx X. Xxxxxxxxxx | |
Title: | Chief Executive Officer |