1
EXHIBIT N
----------
ASSIGNMENT AGREEMENT
--------------------
THIS ASSIGNMENT AGREEMENT (this "Agreement"), dated as of
November 1, 1993, by and between UNIQUE MOBILITY, INC., a Colorado corporation
("Unique"), and ALCAN INTERNATIONAL LIMITED, a Canadian corporation
("Alcanint"), supersedes in its entirety that certain License Agreement, dated
June 20, 1988, by and between Unique and Alcanint (the "Prior Agreement").
In consideration of the mutual promises hereinafter set forth
and other good and valuable consideration had and received, the parties hereto,
upon the terms and subject to the conditions contained herein, hereby agree as
follows:
SECTION 1. DEFINITIONS
-----------
For purposes of this Agreement:
1.1 AFFILIATE. "Affiliate" shall mean any Person that,
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person specified. As used in
this Agreement, the term "control" shall mean the power through equity
ownership, contract, or otherwise to direct the affairs of another Person. For
purposes of this Agreement, Alcanint shall not be deemed to be an Affiliate of
Unique.
2
1.2 AGREEMENT. "Agreement" shall mean this Agreement as
originally executed or as further amended, modified, supplemented, or restated
from time to time.
1.3 ALCANINT TECHNOLOGY. "Alcanint Technology" shall mean all
Technology developed by or on behalf of Alcanint on or prior to the date hereof
for the expressed benefit of Unique or its Affiliates pursuant to written
contracts between Alcanint (or its Affiliates) and Unique (or its Affiliates).
1.4 PATENT EXPENSES. "Patent Expenses" shall have the meaning
set forth in Section 5.1 hereof.
1.5 PATENTS. "Patents" means all currently existing and
future, domestic and foreign patents and patent applications owned in whole or
in part or utilized by Unique that disclose and claim Technology related to
permanent magnet motors and the controllers for permanent magnet motors,
including, without limitation: (i) United States Patent Number 5,004,944 titled
"Lightweight High Power Electromagnetic Transducer" and a continuation of such
patent filed October 11, 1990, under serial number 596371, (ii) United States
Patent Number 5,107,151 titled "Improved Switching Circuit Employing Electronic
Device in Series with an Inductor to Avoid Communication Breakdown" and
continuation of such patent filed November 19, 1991, under serial number 794679,
(iii) United States Patent Number 4,216,839 issued August 12, 1980 titled
"Electricity Powered Motor Vehicle," and (iv) United States Patent Application
Number 937,311
2
3
filed September 1, 1992, titled "Stator and Method of constructing same for High
Power Density Electric Motors and Generators," and, with respect to all such
patents and patent applications, all related continuation, continuation-in-part
or divisional applications, corresponding domestic and foreign applications and
domestic and foreign patents issuing therefrom, and all revisions,
reapplications and reissues thereof, whether now or hereafter existing.
1.6 PERSON. "Person" shall mean any natural person,
individual, corporation, partnership, firm, joint venture, business association,
governmental authority or any entity or enterprise.
1.7 TERM. "Term" has the meaning set forth in Section 6.1
hereof.
1.8 TECHNOLOGY. "Technology" shall mean all of the right,
title and interest of Unique and its Affiliates in and to all of the inventions,
trademarks, patents, trade names, copyrights, know-how, intellectual property,
software, shop rights, licenses, developments, research data, designs,
technology, discoveries, trade secrets, test procedures, processes, formulas and
other confidential information and other similar intangible property rights,
whether or not patentable (or otherwise subject to legally enforceable
restrictions or protections against unauthorized third party use), and any and
all applications for, and extensions, divisions and reissuances of any of the
foregoing, and rights therein, owned by or
3
4
otherwise employed in or related to Unique and its Affiliates or to the
respective businesses conducted thereby, but only insofar as such technology is
related to permanent magnet motors and the controllers for permanent magnet
motors.
SECTION 2. ASSIGNMENT BY ALCANINT
----------------------
2.1 ASSIGNMENT. For good and valuable consideration, Alcanint
hereby sells, transfers, conveys, assigns and delivers to Unique all of its
right, title and interest in and to all of the Alcanint Technology, and Unique
hereby assumes and agrees to pay, perform and discharge as and when due any and
all liabilities and obligations arising out of or with respect to the Alcanint
Technology, whether known or unknown, accrued or to accrue.
2.2 RIGHT OF FIRST REFUSAL. Unique shall have the right to
license the Technology, including without limitation the Alcanint Technology
assigned to Unique hereunder, to any Person; PROVIDED, HOWEVER, that in the
event that Unique shall enter into an agreement to effect an assignment (rather
than a license) of any Technology to any Person, prior to consummating such an
assignment Unique shall first offer to Alcanint a right of first refusal to
purchase such Technology on the terms and conditions set forth below. Upon
reaching an agreement to assign any Technology, Unique shall provide Alcanint
with written notice of such agreement, including a detailed description of the
parties to the proposed transfer and the material terms thereof. During the 30
day period following receipt of such
4
5
notice, Alcanint shall have the right, upon written notice to Unique, to
purchase the Technology subject to the proposed transfer, on the terms and
conditions set forth in the written notice provided by Unique. In the event that
Alcanint does not exercise its right of first refusal hereunder during the 30
day period following delivery of notice by Unique, Unique may, during the 90 day
period thereafter, assign such Technology on the terms and conditions set forth
in the written notice provided to Alcanint; PROVIDED, HOWEVER, that such
transferee shall first enter into an agreement, in form and substance
satisfactory to Alcanint, agreeing to pay to Alcanint royalties on the same
terms and conditions as royalties are payable by Unique hereunder. If such
transfer of Technology is not completed during such 90 day period, any further
assignment thereof shall again be subject in all respects to the provisions set
forth in this Section 2.2.
2.3 ROYALTIES. In consideration of the assignment granted in
Section 2.1, Unique shall pay to Alcanint royalties based upon revenues received
by Unique and its Affiliates arising out of: (a) use of the processes included
in, and manufacture, use and sale of equipment and products embodying, the
Technology by Unique or its Affiliates and (b) use of processes included in, and
manufacture, use and sale of equipment and products embodying, the Technology by
Persons other than Unique or its Affiliates, in each case in
5
6
accordance with the rates set forth on SCHEDULE A hereto (subject to the offset
for Patent Expenses pursuant to Section 4.2 hereof).
SECTION 3. ROYALTIES; ACCOUNTS AND DOCUMENTATION
-------------------------------------
3.1 PAYMENT OF ROYALTIES. With respect to each calendar
quarter during the Term hereof, Unique shall prepare and deliver to Alcanint, on
or prior to the next January 31, April 30, July 31 and October 31, a statement
of royalties due hereunder with respect to the immediately preceding calendar
quarter, in such detail as to provide Alcanint with a reasonably specific
understanding of the calculation thereof and basis therefor, and in the event of
a deduction by Unique of Patent Expenses pursuant to Section 4.2 hereof, a
detailed description of the nature, timing and amount of total Patent Expenses
incurred in such period and the calculation of the portion of the Patent
Expenses (including any carry forward thereof) to be deducted from such royalty
payment. Subject to Section 4.2 hereof, Unique shall deliver payment of such
royalties, in United States dollars, to Alcanint or other Person designated by
Alcanint concurrently with such statement.
3.2 RETENTION OF RECORDS. Unique shall keep at its principal
places of business detailed and separate accounts and records showing the
calculation of royalties due hereunder and the basis therefor and detailed and
separate accounts and records showing the calculation of total Patent Expenses
and the portion thereof to be deducted from the payment of royalties hereunder.
6
7
Such records shall be in a form which allows for fast and accurate checks to be
made by Alcanint and its agents and shall be supported by all relevant vouchers,
invoices, work orders, delivery notes, receipts and other documentation.
3.3 RIGHT TO INSPECT RECORDS. Alcanint, at its own expense,
shall have the right at all reasonable times during business hours, upon
reasonable notice, to inspect and audit the accounts and records of Unique, and
all other relevant documentation, relating to the calculation of royalties due
hereunder and relating to the calculation of any Patent Expenses deducted
therefrom. Alcanint's representatives shall be entitled to make copies of or
extracts from any of the foregoing.
SECTION 4. PATENT MAINTENANCE
------------------
4.1 MAINTENANCE OF PATENTS; APPLICATION AND RENEWAL FEES.
Unique shall at all times do all such acts and things as may be necessary or
appropriate to diligently prosecute (no further than final rejection by the
applicable Patent Office) in the United States, Canada and the European Patent
Office countries such patent applications regarding the currently existing and
future Technology as may be mutually agreeable to Unique and Alcanint, and
corresponding patent applications in such other countries as may be agreed upon
by the parties, and shall use its best efforts to obtain and maintain currently
existing and any future Patents and Patent applications in the United States,
Canada, the European Patent
7
8
Office countries and such other countries. In the event that Unique fails to
fulfill any of its obligations pursuant to this Section 4.1, Alcanint shall have
the right to carry out the same (and Unique shall cooperate with Alcanint in so
doing) without waiving any of its rights or remedies against Unique with respect
to Unique's nonperformance.
4.2 PAYMENT OF PATENT EXPENSES/OFFSET OF ROYALTY PAYMENTS. For
so long as Alcanint and its Affiliates own at least five percent of the issued
and outstanding common stock, par value $.01 per share, of Unique (assuming the
conversion or exercise of all securities convertible into or exercisable or
exchangeable for such common stock), Alcanint shall be obligated to fund up to
one-half of the patent expenses incurred in connection with (i) all application
and renewal fees with respect to such patents and such patent applications
related to Technology and (ii) reasonable attorneys fees related thereto
("Patent Expenses"), subject to the limitations set forth below. Unique shall be
entitled to deduct from the royalty payments payable to Alcanint pursuant to
Section 3.1 hereof up to one-half of the Patent Expenses incurred by Unique
during the calendar quarter for which such royalty payment is due and payable.
In no event shall Alcanint be obligated to pay Unique for any Patent Expenses
incurred during a calendar quarter in which Alcanint's ownership of Unique
common stock falls below the threshold amount set forth above or for any Patent
Expenses to the
8
9
extent that Patent Expenses for any calendar quarter exceed the royalties
payable to Alcanint for such calendar quarter; PROVIDED, HOWEVER, that Unique
may carry forward such excess amount to any future calendar quarter of the same
calendar year.
SECTION 5. INFRINGEMENTS; THIRD PARTY CLAIMS
---------------------------------
Each party hereto shall notify the other party hereto
immediately upon becoming aware of (i) an infringement or threatened
infringement by third parties of Technology or (ii) any commencement of or
threat to commence any legal action by a third party on the ground that
Technology or the use thereof infringes any intellectual property rights of such
third party. Unique shall have the right in the first instance, but not the
obligation, to bring legal action against any Person infringing or threatening
to infringe Technology. In the event that Unique elects not to do so, Alcan
shall have the right to do so, at its expense. The party bringing legal action
pursuant to the preceding provisions shall have the right to retain any
resulting awards, subject to the payment of royalties and payments then due and
owing to the other party as agreed herein.
SECTION 6. TERM OF AGREEMENT
-----------------
6.1 TERM. The term of this Agreement (the "Term") shall begin
on the date of this Agreement and shall continue until all Patents issued or
applied for, and claiming priority to a filing date, prior to December 31, 1992
have lapsed, expired or otherwise terminated.
9
10
SECTION 7. MISCELLANEOUS
-------------
7.1 NO PARTNERSHIP OR JOINT VENTURE. Nothing being contained
shall be construed as creating a partnership or joint venture or any other
relationship between the parties other than that of assignee and assignor, and
neither party shall have power or right to incur any obligations on behalf of,
or to pledge the credit of, the other in any manner whatsoever.
7.2 AMENDMENT. Neither this Agreement nor any term hereof may
be amended, changed or modified in any manner except by an instrument in writing
which refers to this Agreement executed by both parties hereto.
7.3 WAIVER. No waiver by either party of any breach of or
failure to comply with, or failure to enforce at any time, any of the provisions
of this Agreement shall be construed as or constitute a continuing waiver of
such provision, or a waiver of any other breach of, or failure to comply with,
any other provision of this Agreement, nor shall it in any way affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every provision of this Agreement.
7.4 NOTICES. All notices, requests, consents, demands and
other communications to be given or delivered under or by reason of the
provisions of this Agreement shall be in writing, shall be personally delivered
or sent by certified mail and shall be deemed to have been duly given when
received.
10
11
Communications to Unique shall be delivered to:
Unique Mobility, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxx, Chairman
with a copy to:
Stevens, Miller, Xxxxx & Xxxxxx
000 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Communications to Alcanint shall be delivered to:
Alcan International Limited
0000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
Attention: Secretary
with a copy to:
Xxxxxxx Xxxxxxxx, Esq.
Vice President, General Counsel and Secretary
Alcan Aluminum Corporation
000 Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxx 00000.
Any party hereto may change its address for purposes of this
Section 7.4 by delivering notice thereof in the manner provided in this Section
7.4.
7.5 GOVERNING LAW. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of New York,
without giving effect to the choice of law provisions thereof.
7.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and the
11
12
successors and permitted assigns of the parties hereto; PROVIDED, HOWEVER, that
no rights, obligations or liabilities hereunder shall be assignable by either
party hereto without the consent of the other party hereto, except that either
party may assign any of its rights, obligations or liabilities to any of its
Affiliates provided that such assigning party shall remain liable hereunder.
7.7 SCHEDULES. The Schedules to this Agreement shall be
construed with and as an integral part of this Agreement to the same extent as
if the same had been set forth verbatim herein.
7.8 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement.
7.9 TITLES AND HEADINGS. Titles and headings herein are
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
7.10 EXPENSES. Except as expressly provided herein, each party
hereto shall bear its own costs, fees and expenses incident to the transactions
contemplated hereby.
12
13
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute this Agreement as of the day and year first above
written.
UNIQUE MOBILITY, INC.
By: /s/ Xxx X. Xxxxxx
----------------------------
Title: Chairman
-------------------------
ALCAN INTERNATIONAL LIMITED
By:
----------------------------
Title:
-----------------------
And:
----------------------------
Title:
-----------------------
13
14
SCHEDULE A
----------
ROYALTY PAYMENTS
----------------
1. To the extent that royalties are payable pursuant to the terms
of this Agreement, Unique shall pay to Alcanint such royalties
at the following rates with respect to the Technology:
(a) Use of processes included in, and manufacture, use and
sale of equipment and products embodying, Technology by
Unique or its Affiliates: one-half of one percent (.5%) of
Net Revenues received.
(b) Use of processes included in, and manufacture, use and sale of
equipment and products embodying, Technology by Persons other
than Unique or its Affiliates: five and one-half percent
(5.5%) of Net Royalties received from such person.
2. "Net Revenues" shall mean the aggregate revenue received by
Unique and its Affiliates with respect to the use of processes
included in, and the manufacture, use and sale of equipment and
products embodying, Technology (including, without limitation,
revenue received from the sale of services). In the case of
sales of equipment and products, Net Revenues shall mean the
aggregate price invoiced to a customer, less quantity and cash
discounts and credits for returns actually allowed, and less
sales, use and other similar taxes and transportation, delivery
i
15
and insurance charges borne by the seller. With respect to sales to
Affiliates, Net Revenues shall be deemed to be the Net Revenues which
would be charged at arm's-length to a third-party customer for the same
equipment or products under comparable commercial conditions. If
royalty-bearing equipment or products are sold as a part of a larger
system, the Net Revenues shall be the greater of (i) the Net Revenues
which would be charged for such equipment or products if sold alone at
arm's-length to a third party customer under comparable commercial
conditions and (ii) the Net Revenues for the entire system multiplied
by the manufacturing cost for the royalty-bearing equipment or products
included therein and divided by the manufacturing cost for the entire
system.
3. "Net Royalties" shall mean the aggregate licensing or sublicensing
fees, royalties or similar income received during the relevant period
and derived directly or indirectly from the licensing, sublicensing or
other grant of a right to use Technology in any manner, less sales, use
and other similar taxes with respect to such fees, royalties or income
actually paid by Unique other than to Alcanint.
4. The obligation of Unique to pay royalties to Alcanint hereunder
(including, for purposes of this calculation, royalties paid pursuant
to the Prior Agreement) shall be limited to Ten Million Dollars
($10,000,000) (the "Initial Cap") in the
ii
16
aggregate, provided that, on each anniversary of the date of the Prior
Agreement, that portion of the Initial Cap remaining unpaid shall be
adjusted for inflation according to the national consumer price index
for the immediately preceding year as published by the U.S. Department
of Labor, Bureau of Labor Statistics, or similar U.S. government agency
succeeding to such responsibility; and provided, further, that for
purposes of the foregoing calculation, royalty payments shall be deemed
to equal the amount of such payments actually received by Alcanint
after the deduction of any Patent Expenses pursuant to Section 4.2 of
the Agreement. In addition, in no event shall any royalties be payable
hereunder in respect of any Net Revenues or Net Royalties following the
expiration of the Term set forth in Section 6.1 of this Agreement.
iii
