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EXHIBIT 10.4
EXECUTION COPY
TECHNICAL COOPERATION AGREEMENT
AGREEMENT, dated as of 20 April, 1998, by and between SMARTIRE
SYSTEMS INC., a British Columbia corporation having a place of business at 00000
Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0
("SmarTire"), and TRW INC., a corporation existing under the laws of the State
of Ohio, United States of America, acting for and on behalf of its Automotive
Electronics Group in the U.S. and having a place of business at 00000 Xxxxxxxx
Xxxxx, Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxx Xxxxxx of America 48335-2642 ("TRW").
WHEREAS SmarTire designs and manufactures tire pressure sensing
systems for motor vehicles and possesses certain technology relating to same;
WHEREAS SmarTire, in a license agreement dated 20 April, 1998,
granted TRW an exclusive license to use the SmarTire tire pressure sensing
technology in the original equipment market for passenger cars and light,
medium, and heavy truck;
WHEREAS TRW has certain relevant technology relating to automotive
electronics, in general, and radio frequency communications systems, in
particular;
WHEREAS TRW will now have a need to develop new tire pressure
sensing products for its licensed markets and, further, SmarTire will have a
continuing need to develop new tire pressure sensing products for the markets
which it has retained; and
WHEREAS TRW and SmarTire wish to cooperate in future technical
development of the tire pressure sensing products for the mutual benefit of both
companies;
NOW, THEREFORE, in view of the foregoing premises and in
consideration of the mutual promises and covenants contained in this Agreement,
SmarTire and TRW agree as follows:
Article 1
Definitions
The following words and phrases will have the meanings set forth
below where used herein with initial capital letters:
1.1 Affiliate: Any corporation, partnership, or other business
entity in which SmarTire or TRW owns or controls more than fifty percent (50%)
of the
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voting stock or otherwise has more than fifty percent (50%) of the right to
control the entity.
1.2 Effective Date: The date set forth in the preamble of this
Agreement.
1.3 Intellectual Property Rights: Patents and applications
therefor, utility models and applications therefor, copyrights, trade secrets,
and any and all other forms of intellectual property.
1.4 Project Statement: As defined in Section 2.3.
1.5 Secrecy Agreement: The secrecy agreement between the
parties dated as of 6 January, 1998, as amended 18 February 1998.
1.6 Shared Intellectual Property: As defined in Section 3.1.
1.7 SmarTire Markets: Aftermarket sales of products and
components for all vehicles.
1.8 TRW Markets: The market for original equipment products and
components for passenger car and light, medium, and heavy duty trucks, and for
service parts for such products and components.
1.9 Other Definitions and Meanings: For purposes of this
Agreement, (a) the term "person" includes any natural person, firm, association,
partnership, corporation, or other entity and (b) the words "hereof", "herein",
"hereby" and other words of similar import refer to this Agreement as a whole.
Article 2
Technical Cooperation
2.1 Generally: SmarTire and TRW will cooperate in the
development of new tire pressure sensing technology of mutual benefit to both
companies. To the extent that the parties conduct individual development work in
the area of tire pressure sensing technology, the parties will share the results
of such development work pursuant to the terms of this Agreement.
2.2 Technology Exchange Meetings: The parties will meet
regularly, at least once every calendar quarter, to discuss tire pressure
sensing developments at each party. At such meetings the parties will freely
exchange technical information, design information, and intellectual property
information. The parties will not be obliged to disclose any information, the
disclosure of which is
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prohibited by a secrecy agreement with a third party. However, each party will
use reasonable efforts to avoid any secrecy obligations which might prohibit
such disclosures. The meetings will take place at mutually agreeable locations,
and each party will bear its own costs in attending such meetings.
2.3 Specific Projects: The parties will from time to time work
together in good faith and using reasonable commercial efforts on specific
projects, each of which will be identified and outlined in a project statement
("Project Statement"). Each Project Statement will specify at least (a) the goal
of the project, (b) the tasks to be performed by each party, (c) the estimated
timetable of such project, (d) the deliverables (if any) that each party is to
provide to the other, and (e) the special rules (if any) for sharing of the
costs of the project. Each Project Statement will specifically state that it is
a Project Statement under this Agreement, will be signed by both parties, and
will thereafter be a part of this Agreement. In the absence of special cost
sharing rules, each party will bear its own costs in participating in each such
project.
2.4 Initial Projects: The parties will initially cooperate on
the specific projects set forth in Exhibit A hereof.
2.5 Work Under Project Statements: The parties will work in
good faith to complete the work specified in each Project Statement. However, in
no event will a failure by a party to complete a task or deliver a deliverable
specified in a Project Statement be considered to be a breach of this Agreement,
or give rise to any action for any damages, whether regular, consequential,
special, or otherwise, on the part of either party hereto.
Article 3
Technology Rights
3.1 Shared Intellectual Property: TRW and SmarTire will share,
under the terms and subject to the limitations of this Article 3, Intellectual
Property Rights which both (a) relate to tire pressure sensing systems or
components thereof, and (b) either TRW or SmarTire develops during the term of
this Technical Cooperation Agreement ("Shared Intellectual Property").
3.2 Excluded Technology: Shared Intellectual Property does not
include any technology which a party acquires through purchase from a third
party (rather than from internal developments), or subsequent development of
such technology acquired by the party. However, the parties will in good faith
discuss the terms under which such new technology acquired by one party through
purchase and useful in the area of tire pressure sensing systems will be made
available to the other party. Further, Shared Intellectual Property does not
include technology developed
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and owned by divisions of TRW Inc. other than the Automotive Electronics Group
in the U.S.
3.3 License from TRW to SmarTire: TRW hereby grants to SmarTire
under Shared Intellectual Property owned by TRW a perpetual, worldwide,
cost-free, exclusive license to make, have made, use, and sell tire pressure
sensing products and components thereof in the SmarTire Markets.
3.4 License from SmarTire to TRW: SmarTire hereby grants to TRW
under Shared Intellectual Property owned by SmarTire a perpetual, worldwide,
cost-free, exclusive license to make, have made, use, and sell tire pressure
sensing products and components thereof in the TRW Markets.
3.5 Market Overlap: The parties recognize that there could be
some minor overlap between the TRW Markets and the SmarTire Markets. For
avoidance of doubt, it will not be considered to be a violation of exclusive
licenses granted in this Agreement if some aftermarket products sold by SmarTire
in aftermarket channels are used by customers as replacements for original
equipment products, or if some original equipment products sold by TRW in
original equipment channels are used by customers as aftermarket products.
3.6 Sublicenses: Each party may grant to its Affiliates
sublicenses under the rights granted herein.
Article 4
Secrecy and Use of Information
4.1 Existing Secrecy Agreement: The obligations of the parties
with respect to secrecy and use of information will be governed by the terms of
the Secrecy Agreement.
4.2 Exceptions: The parties recognize that each party may need
to disclose certain of the other party's Proprietary Information, as defined in
the Secrecy Agreement, to others as part of the party's permitted activities
under this Agreement. Each party may disclose such Know-how to its employees,
agents, subcontractors, suppliers, customers, and sublicensees to the extent
that each such disclosure is reasonably necessary for purposes of manufacturing,
selling, installing, repairing, and/or servicing tire pressure sensing, systems
and components hereunder, or procuring goods and services required in connection
therewith.
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Article 5
Warranty
5.1 By SmarTire: SmarTire warrants that it has the right to
enter into this Agreement and that SmarTire's performance of this Agreement will
not violate any agreement between SmarTire and any third person.
5.2 By TRW: TRW warrants that it has the right to enter into
this Agreement and that TRW's performance of this Agreement will not violate any
agreement between TRW and any third person.
Article 6
Products Liability
6.1 Product Defects: SmarTire will have full responsibility for
determining that (a) the designs of the products and components made for the
SmarTire Markets are suitable for the uses intended by purchasers of such
products and components and (b) each product and component made for the SmarTire
Markets is manufactured and tested to insure that such product or component is
not defective. TRW will have full responsibility for determining that (a) the
designs of the products and components made for the TRW Markets are suitable for
the uses intended by purchasers of such products and components and (b) each
product and component made for the TRW Markets is manufactured and tested to
insure that such product or component is not defective. This Section 6.1 will
not, however, relieve either party from any responsibility it may have as a
supplier to the other party of products and components under a separate purchase
agreement for such components.
6.2 Indemnification: Subject to the last sentence of Section
6.1, each party will have no recourse against the other party, and will
indemnify and hold the other party harmless in respect of any and all expenses,
damages, losses, and liabilities that may arise in connection with each party's
use of the other party's technology in the manufacture and sale of products and
components hereunder. However, if a defect should appear in the documents which
relate to one party's design of any product or component and which was provided
to the other party hereunder, the one party will use reasonable efforts to
correct such defect and to provide the other party with corrected documents,
without undue delay and without charge to the other party.
6.3 Limitation of Liability: Other provision of this Agreement
notwithstanding, under no circumstances will either party be liable to the other
for any incidental or consequential damages arising under this Agreement.
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Article 7
Patents
7.1 Title: Nothing in this Agreement will be deemed to convey
to either party the legal title to any Intellectual Property Right owned by the
other party.
7.2 Acquisition and Maintenance of Patents: Nothing in this
Agreement will be deemed to require either party (a) to file, prosecute, or
maintain any patent or (b) to respond to or otherwise defend any action for
reexamination or revocation of any patent.
7.3 Notice of Infringements By Third Persons: Each party will
promptly (a) notify the other party of any conduct by any third person which may
constitute infringement of any Intellectual Property Right owned by the other
party and licensed herein and (b) make available to such other party any
information with respect to such possible infringement as the party may possess
or to which the party may have access. TRW will have the right and discretion,
but no obligation, to take whatever action it deems desirable in connection with
any alleged infringement, of any SmarTire Intellectual Property Right licensed
exclusively to TRW herein, by products for use as original equipment in
passenger car and light, medium, and heavy duty truck markets. The parties will
consult with one another regarding any such TRW actions. SmarTire will give TRW
all reasonable assistance in connection with any action. If TRW requests
assistance, then SmarTire will advise TRW of the estimated cost of providing the
requested assistance. TRW will reimburse SmarTire for reasonable costs incurred
by SmarTire in providing such requested assistance.
7.4 Infringement Claims By Third Persons: If a third person
asserts a claim or institutes a suit or proceeding against one party alleging
that any tire pressure sensing product or component made by or for the one party
infringes any patent, utility model, or other intellectual property right of a
third person, then the other party will at its own expense cooperate with the
one party in every reasonable way in the defense of such claim, suit, and/or
proceeding.
Article 8
Default
8.1 Default: A party will be deemed in default under this
Agreement if (a) the party becomes insolvent, bankrupt or any of its assets are
seized or placed in trust for the benefit of creditors, or (b) the party
breaches any obligation required to be performed by the party under this
Agreement and fails to cure such breach within sixty (60) days after receipt of
a written notice of breach from the other party or undertaken diligently to cure
such breach if more than sixty (60) days is required to effect such cure.
However, a party will not be deemed to be in default
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for breach unless the notice of breach described the breach in reasonable detail
and indicated that the Agreement would be subject to termination if the breach
were not corrected within the aforementioned cure period.
8.2 Remedy for Default: If a party is in default as provided in
Section 8.1, the non-defaulting party may (a) terminate this Agreement by giving
the defaulting party notice of termination and (b) pursue any other remedy under
this Agreement or otherwise available to the non-defaulting party.
Article 9
Delay
9.1 Notice: If either party is unable to perform or is delayed
in performing any of its respective obligations under this Agreement, then the
party who is unable to perform or is delayed in performing will give the other
party notice of such inability to perform or delay in performing as soon as
reasonably possible under the circumstances, including information regarding the
cause or reason for such inability to perform or delay in performing.
9.2 Excusable Delay: If either party is prevented from
performing or is delayed in performing any of its respective obligations under
this Agreement due to any circumstance beyond its reasonable control, but not
due to its negligence, (including but not limited to strikes, war, an act of
God, a public enemy, interference by any civil or military authority, or
inability to secure governmental approval, materials or services or similar
cause) and gives notice to the other party, then the time for performance of any
such obligation (except the payment of any sum due hereunder) will be extended
for a period equal to the number of days during which performance thereof was
prevented or delayed and, during such period, such party will not be deemed in
default under this Agreement.
Article 10
Term and Termination
10.1 Term: The term of this Agreement will begin on the
Effective Date, upon execution of this Agreement by both SmarTire and TRW and,
unless terminated early for default under Section 8.2, the Agreement will
thereafter continue in full force and effect until the end of its then-current
term. The initial term of the Agreement will end on the fifth anniversary of the
Effective Date. The Agreement will automatically extend year by year following
such fifth anniversary, however, unless one party gives notice hereunder to the
other party, at least three months prior to such fifth anniversary or a
subsequent anniversary, of non-extension of the Agreement.
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10.2 Wrapping-up of Projects: Upon the giving of a notice of
non-extension under Section 10.1, the parties will consult with one another
regarding the manner in which the remaining work in any outstanding Project
Statements will be wrapped up.
10.3 Survival of Rights and Obligations: The licenses to Shared
Intellectual Property given under Sections 3.3 through 3.5 will survive
termination of this Agreement. In addition, the rights and obligations of the
parties under Articles 4, 5, and 6 will survive termination of this Agreement.
Article 11
Assignment
Neither party may assign or transfer this Agreement or any of its
rights or duties under this Agreement without the prior written consent of the
other party, except to a successor in interest by amalgamation, merger,
consolidation, or the acquisition of substantially all of the assets of the
party, and provided such assignee agrees in writing to perform all of the
assignor's obligations under this Agreement.
Article 12
Notice
Any notice or other communication to any party under this Agreement
will be in writing and will be deemed to have been duly given, if communicated
by facsimile, cable or similar electronic means, at the time receipt thereof has
been confirmed by return electronic communication or signal that the message has
been clearly received, or if mailed, ten (10) days after mailing, registered
mail, postage prepaid, return receipt requested:
If to TRW: TRW Automotive Electronics Group in the U.S.
00000 Xxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000-0000
X.X.X.
FAX: 000.000.0000
Attention: General Manager
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With a copy to: TRW Automotive Electronics Group
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
X.X.X.
FAX: 000.000.0000
Attention: VP and Assistant General Counsel
If to SmarTire: SmarTire Systems Inc.
00000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxx Xxxxxxxx
XXXXXX X0X 0X0
FAX: 000.000.0000
Attention: President
provided, however, that if either party will have designated a different address
by notice to the other party given as provided above, then to the last address
so designated.
Article 13
Miscellaneous
13.1 Headings: Except for the headings for the Definitions in
Article 1, the headings and titles to the Articles and Sections of this
Agreement are inserted for convenience only and will not be deemed a part of
this Agreement or affect the construction or interpretation of any provision of
this Agreement.
13.2 Entire Agreement: This Agreement, the Secrecy Agreement,
and Exhibit A comprise the entire agreement between TRW and SmarTire and
supersede all other agreements, oral or written, heretofore made with respect to
the technical cooperation contemplated by the Agreement.
13.3 Modification: This Agreement may be amended only in writing
signed by both parties which specifically refers to the provision of this
Agreement to be amended and clearly recites the amendment thereto.
13.4 Waiver: No waiver of any right or remedy in respect of any
occurrence or event on one occasion will be deemed a waiver of such right or
remedy in respect of such occurrence or event on any subsequent occasion.
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13.5 Remedies: Unless otherwise expressly provided in this
Agreement, the rights and remedies set forth in this Agreement are in addition
to, and not in limitation of, other rights and remedies under the Agreement, at
law or in equity, and the exercise of one right or remedy will not be deemed a
waiver of any other right or remedy.
13.6 Governing Law: The validity, construction, interpretation
and enforceability of this Agreement will be determined and governed by the laws
of the State of Ohio, United States of America.
13.7 Dispute Resolution: The parties agree to use good faith
efforts to resolve any disputes, controversies or differences which may arise
between the parties hereto, out of, in relation to or in connection with this
Agreement, including disputes regarding default under Section 8.1(b) but not
including disputes regarding default under Section 8.1(a), by means of
negotiation between the parties. If any such matter is not promptly resolved by
such means, such matter will be decided exclusively and with binding effect upon
the parties by arbitration under the International Arbitration Rules of
conciliation and arbitration of the American Arbitration Association which are
in effect at the time of invocation of the arbitration. The arbitration will be
conducted by a panel of three arbitrators, one appointed by each party and the
third, who will act as chairman of the panel, by the two arbitrators so
appointed. The place of the arbitration will be Detroit, Michigan, and the
arbitration will be conducted in the English language. The arbitration will be
decided according to the law. The panel will issue a written opinion stating the
decision of the panel and the legal reasoning of the panel in reaching the
decision.
13.8 Counterparts: This Agreement may be executed in multiple
counterparts with equal force and effect in the English language, and each such
counterpart will be deemed an original of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first shown hereinabove, and this Agreement will be deemed dated as of
such date.
TRW INC. SMARTIRE SYSTEMS INC.
By: By:
------------------------------ -----------------------------------
---------------------------------- -----------------------------------
(Typed/Printed Name) (Typed/Printed Name)
Title: Title:
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Exhibit A: Initial Projects
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Exhibit A
Project Statement
This is Project Statement No. ___ under the Technical Cooperation
Agreement between TRW and SmarTire dated as of ___ April 1998.
1. Project Title
2. Project Description
3. Project Goal(s)
4. Project Activities and Deliverables
5. Project Schedule
6. Project Cost
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