LICENSE AGREEMENT
License Agreement (hereinafter referred to as ("AGREEMENT") entered
into this 1st day of July, 1996, by and between Parlex Corporation, a
Massachusetts corporation with a principal place of business at 000 Xxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter referred to as ("PARLEX"),
and Pucka Industrial Co., Ltd.., a Taiwan corporation with a principal place
of business at Xx. 00, Xxxx 000, Xxx Xx Xxxx, Xxxx Xxxxx, Xxxxxx, Xxxxxx,
R.O.C.(hereinafter referred to as "PUCKA").
WHEREAS, PARLEX has designed, developed and patented certain Flexible
Circuit Technology (as defined below) to manufacture certain Products (as
defined below) and wishes to transfer to PUCKA, a nonexclusive,
nontransferable, area specific license and right to use and practice such
Flexible Circuit Technology on the terms and conditions as provided for
herein; and
WHEREAS, PUCKA is desirous of acquiring such Flexible Circuit
Technology with such right to use and practice such Flexible Circuit
Technology for the purposes and on the terms and conditions as provided for
herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth and for other good and valuable consideration, the receipt
and sufficiency of which the parties hereby acknowledge, the parties hereto
agree as follows:
Section 1. DEFINITIONS
A. Flexible Circuit Technology: The term "Flexible Circuit
Technology", as used herein, shall mean the process described in U.S. patent
5,334,800 and U.S. patent 5,334,800 Rev. 1 Amendment A as well as any future
amendments and revisions used by PARLEX as of the Effective Date (as defined
below) to manufacture the circuits described under the definition of
Products, including engineering and manufacturing documents and drawings,
written procedures, processes, prints and process sheets now being used by
PARLEX in the manufacture, use and sale of the Products (as defined below).
B. Products: The term "Products" as used herein, shall mean all
single-sided and double-sided flexible circuits with silver shielding using
Flexible Circuit Technology..
C. Effective Date: The term "Effective Date", as used herein, shall
mean the date of this Agreement, the 1st day of July, 1996.
D. License Year: The term "License Year", as used herein, shall mean
a twelve (12) calendar month period; provided, however, that the first
License Year shall commence on the Effective Date of this Agreement and end
on December 31, 1996, and the subsequent License Years shall mean each
twelve (12) calendar month period thereafter.
Section 2. GRANT OF LICENSE
2.1 Subject to the terms and conditions of this Agreement, PARLEX
hereby grants to PUCKA an exclusive, nontransferable, area specific license
and right to use and practice such Flexible Circuit Technology, without the
right to grant sublicenses, for the sole purpose of using the Flexible
Circuit Technology to design, develop, market, manufacture and sell the
Products solely in Taiwan. PARLEX will consider, on a written case by case
basis, allowing PUCKA to sell to customers outside of Taiwan.
2.2 Notwithstanding the foregoing, PARLEX hereby reserves the right
to develop, manufacture and sell the Products to its existing and future
customers worldwide.
2.3 PUCKA shall use commercially reasonable efforts to manufacture
and sell the Flexible Circuit Technology to the fullest extent possible.
Pucka shall, at its own expense, provide, keep, maintain and operate a
modern plant(s) designed for and equipped with the necessary machinery and
equipment for manufacturing and processing the Products as well as any other
equipment, materials and supplies which are necessary to promptly supply all
demands and requirements for the Products. Pucka shall maintain at all
times in its plant(s) the necessary personnel (including qualified and
experienced management) for manufacturing, processing and selling the
Products, and shall operate all departments of its plant(s) in accordance
with standards of orderliness, cleanliness and appearance as specified by
PARLEX.
2.4 PUCKA shall act as an independent contractor and will not be
subject to the will and control of PARLEX. Neither PUCKA or its employees
are in any sense employees of PARLEX and PUCKA and its employees are not
authorized to commit any acts which might be construed as acts of PARLEX.
Both parties shall have no authority to bind the other in any respect. It
is agreed and understood that PUCKA and its employees are not employees of
PARLEX under the meaning or application of any federal or state unemployment
insurance law, or the social security law, tax law or any workmen's
compensation law that relate to employer/employee relationships. PUCKA
hereby agrees to assume all liabilities or obligations imposed by or
incurred as a result of anyone or more of the above-enumerated laws with
respect to its employees and their performance under this Agreement.
2.5 During the term of this Agreement, PUCKA shall have the right to
indicate to the public that it is an authorized manufacturer of the Products
and to use PARLEX's trademarks, marks, and trade names that PARLEX may adopt
from time to time ("Trademarks") solely for the sale of the Products.
Nothing herein shall grant to PUCKA any right, title or interest in the
Trademarks. At no time during or after the term of this Agreement shall
PUCKA challenge or assist others to challenge the Trademarks or the
registration thereof or attempt to register any trademarks, marks or trade
names confusingly similar to the Trademarks.
2.6 All representations of the Trademarks that PUCKA intends to use
shall first be submitted to PARLEX for approval (which shall not be
unreasonably withheld) of design, color, and other details or shall be exact
copies of those used by PARLEX. If any of the Trademarks are to be used in
conjunction with another trademark on or in relation to the Products, then
PARLEX's xxxx shall be presented equally legibly, equally prominently, and
of equal or greater size than the other but nevertheless separated from the
other so that each appears to be a xxxx in its own right, distinct from the
other xxxx.
2.7 Upon termination of this Agreement, PUCKA shall immediately cease
displaying, advertising, and using the Trademarks, and shall not hereafter
use, advertise or display any name, xxxx, or logo which is or any part of
which is similar to or capable of being confused with any of the Trademarks.
Section 3. TRANSFER OF TECHNOLOGY AND TECHNICAL ASSISTANCE
3.1 PARLEX shall to the extent practicable, provide at its
facilities in Methuen, Massachusetts, training and instruction of PUCKA
personnel in the use of the Flexible Circuit Technology for the manufacture
of the Products. Such training and instruction by PARLEX shall be according
to EXHIBIT A. If at any time during the term of this Agreement PUCKA desires
additional training and instruction beyond that outlined in EXHIBIT A,
PARLEX shall provide such additional training and instruction to the extent
agreed upon by the parties and at a charge by PARLEX of one thousand
U.S.Dollars ($1,000) per day or fraction thereof and subject to the
availability of PARLEX personnel.
3.2 Upon PUCKA's reasonable request made during the term of this
Agreement, PARLEX shall give or shall cause to be given to PUCKA such
technical assistance after the date hereof as PUCKA and its employees may
reasonably require in connection with the transfer of Flexible Circuit
Technology provided in the preceding paragraph and to enable PUCKA to fully
utilize the Flexible Circuit Technology to manufacture and sell Products as
heretofore manufactured and sold by PARLEX and to provide services as
heretofore provided by PARLEX. The term "technical assistance" as used
herein shall refer solely to consultation provided either by telephone or
facsimile and there is no obligation expressed or implied that PARLEX will
be expected to travel or visit for or at the request of PUCKA. However, if
PARLEX agrees to send personnel anywhere for or at the request of PUCKA,
then all expenses, including salaries, shall be paid for by PUCKA.
3.3 All costs incurred to provide technical assistance and training
to PUCKA and its employees, as contemplated by Sections 3.1 and 3.2 above,
including travel, living, lodging, and all other expenses, shall be borne by
PUCKA.
3.4 In accordance with the provisions of section 3.1 above PARLEX and
PUCKA agree to Exhibit A below.
3.5 PARLEX may request PUCKA to provide technical or sales service to
existing or future customers in Taiwan. Costs incurred by PUCKA will be
reimbursed by PARLEX only when specifically approved in advance. The exact
cost to provide this service shall be determined by PUCKA on a case-by-case
basis and submitted to PARLEX prior to commencement of the service.
Section 4. FLEXIBLE CIRCUIT TECHNOLOGY OWNERSHIP
4.1 PUCKA acknowledges and agrees that PARLEX is the sole and
exclusive owner of all right, title and interest, including all business or
technical information proprietary to PARLEX and all trademarks, copyrights,
patents, trade names, trade secrets and other intellectual property rights,
in and to the Flexible Circuit Technology and Products and all products or
information derived or to be derived from PUCKA'S use of said Flexible
Circuit Technology and manufacture of the Products.
4.2 PUCKA understands and acknowledges that the rights granted under
this Agreement do not constitute a license to use the Flexible Circuit
Technology and manufacture the Products for any reason or purpose other than
as specified herein.
Section 5. ROYALTIES AND PAYMENTS
5.1 *
5.2 The term "Net Sales Price", as used in this Section 5 and for
purposes hereof, shall mean PUCKA's actual invoice price less cash and
quantity discounts, and duties, excise and sales taxes paid.
5.3 *
_______________________
Confidential information has been omitted and filed separately with the
Commission.
Section 6. WARRANTIES AND REPRESENTATIONS
6.1 PUCKA warrants and represents that it will in good faith provide
PARLEX with all information relative to any modification, enhancements or
improvement made to the manufacturing equipment, raw materials, processes or
any other aspect of the Flexible Circuit Technology.
6.2 PARLEX warrants and represents that it will in good faith provide
PUCKA will all information relative to any modification, enhancements or
improvement made to the manufacturing equipment, raw materials, processes or
any other aspect of the Flexible Circuit Technology.
6.3 PUCKA and PARLEX warrant and represent to each other that neither
the execution, delivery nor performance of this Agreement will, with or
without the giving of notice or the passage of time, or both, conflict with,
result in a default, right to accelerate or loss of rights under, or result
in the creation of any lien, charge or encumbrance pursuant to, any
provision of either party's Articles of Organization or Bylaws or any
franchise, mortgage, deed of trust, lease, license, agreement,
understanding, law, rule, or regulation or any order, judgment or decree to
which either is a party or by which it may be bound or affected. Both
parties have the full power and authority to enter into this Agreement and
to carry out the transactions contemplated thereby, all proceedings required
to be taken by them to authorize the execution, delivery and performance of
this Agreement and all other agreements relating hereto or contemplated
hereby have been properly taken and this Agreement constitutes a valid and
binding obligation.
6.4 PUCKA and PARLEX warrant and represent to each other that there
is no claim, legal action, suit, arbitration, governmental investigation or
other legal or administrative proceeding, nor any order, decree or judgment
in progress, pending or in effect, or to their knowledge threatened, against
or relating to either party and the transactions contemplated by this
Agreement, and neither party knows or has reason to be aware of any basis
for the same.
6.5 PARLEX warrants and represents that it is the owner of the
right, title and interest in the Flexible Circuit Technology and that it has
full right to grant the rights set forth in this Agreement. PARLEX also
warrants and represents that there are no outstanding agreements,
assignments or encumbrances inconsistent with the provisions of this
Agreement. PARLEX makes no other representations or warranties, express or
implied, nor does it assume any liability in respect of any infringement of
patents or other rights of third parties due to PUCKA's operation under the
rights granted herein.
6.6 PUCKA warrants and represents that it will maximize its best
efforts to manufacture and sell the Products.
Section 7. COVENANT NOT TO COMPETE
7.1 As further consideration for PARLEX's agreement to license the
Flexible Circuit Technology under the terms and conditions of this
Agreement, *.
_______________________
Confidential information has been omitted and filed separately with the
Commission.
7.2 PUCKA agrees and acknowledges PARLEX will suffer irreparable
injury and damage and cannot be reasonably or adequately compensated in
monetary damages for the loss by PARLEX of its benefits or rights under this
Agreement as a result of a breach, default or violation by PUCKA of its
obligations thereunder. Accordingly, PARLEX shall be entitled, in addition
to all other remedies which may be available to it (including monetary
damages), to injunctive and other available equitable relief in any court of
competent jurisdiction to prevent or otherwise restrain or terminate any
actual or threatened breach, default or violation by PUCKA of any provision
thereunder or to enforce any such provision. Any legal action or other
proceeding for any purpose with respect to this covenant shall be brought
exclusively in any court of competent jurisdiction sitting in the
Commonwealth of Massachusetts, and the parties hereto agree to submit to the
jurisdiction of such court and to comply with all requirements necessary to
give such court exclusive jurisdiction thereof. The losing party to any
such proceeding shall pay all costs (including reasonable attorney's fees)
of all parties with respect to that proceeding.
7.3 It is acknowledged further by PUCKA that this provision is
restrictive but is necessary to induce PARLEX to enter into this Agreement.
Section 8. INDEMNIFICATION
8.1 PUCKA agrees to indemnify and hold PARLEX harmless from and
against any and all claims, damages, expenses, debts, demands, actions,
causes of action, suits, costs and liabilities whatsoever (including
reasonable attorneys' fees and costs of investigation and preparation) which
may be brought against PARLEX by any third party arising out of, in
connection with or related in any way to the design, manufacture, sale, use
and marketing of the Flexible Circuit Technology and/or the Products
including but not limited to, all product liability claims and patent
infringement claims.
8.2 PUCKA assumes full responsibility for any use by it of the
Flexible Circuit Technology as well as the Products manufactured by it using
the Flexible Circuit Technology.
Section 9. CONFIDENTIALITY
9.1 PUCKA hereby covenants and agrees to keep and cause to be kept
secret and confidential all business and technical information (whether
written or oral) including the Flexible Circuit Technology and will not
divulge, publish or use any such information to any person or persons, firms
or corporations, nor use the same for its or their own benefit.
9.2 PUCKA has or will require all of its employees and consultants
who have access to any of the Flexible Circuit Technology to execute
agreements similar in content to Section 9 and will exercise its best
efforts to obtain compliance therewith.
Section 10. RECORDS AND REPORTS
10.1 *.
_______________________
Confidential information has been omitted and filed separately with the
Commission.
10.2 PUCKA shall keep, for at least the three (3) most recent License
Years, accurate books and records of the number and type of all Products
sold, the amount of sales thereof and the royalties owed PARLEX.
10.3 PARLEX may, on reasonable notice, have its duly authorized agent
or representative, inspect, check, and verify all such books and records
either at PUCKA's business premises or at a place mutually agreed upon. The
agent's reports and the aforesaid royalty statements, and the information
contained therein, shall be maintained in confidence by PARLEX.
Section 11. NOTICES
11.1 All notices required or permitted to be sent or delivered under
the terms of this Agreement shall be considered to have been duly sent or
delivered when sent by certified or registered mail, return receipt
requested, postage prepaid, and addressed to the party for whom or for which
intended at such party's address herein above set forth or to such other
address or addresses as may be designated by like notice.
Section 12. TERM
12.1 This Agreement shall be in full force and effect commencing with
the date of execution of this Agreement and shall continue in full force and
effect for a term of five years. In addition to all other remedies
available to the parties under the law, and except as otherwise provided
herein, this Agreement may be terminated by either party as specifically
provided herein:
(a) PARLEX may, upon thirty (30) days written notice to PUCKA
terminate this Agreement if PUCKA fails to make any payment in
compliance with the terms of this Agreement. However, notwithstanding
the foregoing, PUCKA shall have the right to cure said default for
failure to make payment if within ten (10) days after the date of
breach it tenders the overdue payment.
(b) If a petition of bankruptcy or any arrangement for the
benefit of creditors or a petition for reorganization is filed by or
against either party, or if either party makes an assignment for the
benefit of creditors; or if a receiver (permanent or temporary) of
either parties' property or any party thereof, is appointed by a court
of competent authority.
(c) Except as otherwise provided above in sub sections (a)and
(b), if either party defaults in the performance of any term,
condition or obligation hereunder, and if such default is not cured
within thirty (30) days after written notice by the non-defaulting
party.
12.2 Upon termination, the due dates for royalties owed by PUCKA to
PARLEX shall be accelerated automatically so that such amounts become due
and payable on the Effective Date of Termination regardless of the payment
term provisions set forth in this Agreement.
12.3 All engineering and manufacturing documents, processes, written
procedures, print and process sheets, trademarks, trade names, patents,
designs, drawings, formulas or other data, photographs, samples, literature
and sales aids of every kind shall remain the property of PARLEX. Within
thirty (30) days after termination of this Agreement for any reason, PUCKA
shall prepare all such items in its possession for shipment as PARLEX may
direct, at PARLEX's expense. PUCKA shall not make or retain any copies of
any confidential items or information which may have been entrusted to it.
12.4 The provisions of Sections 4,5,6,7,8,9,and 13 shall survive the
termination of this Agreement for any reason. All other rights and
obligations of the parties shall cease upon termination of this Agreement.
Section 13. USE OF FLEXIBLE CIRCUIT TECHNOLOGY AFTER
EXPIRATION OR TERMINATION OF AGREEMENT
13.1. Upon expiration of this Agreement, or upon termination of this
Agreement by either party, the obligations of both parties to maintain the
confidentiality of the Flexible Circuit Technology under Section 11 hereof
shall continue. All rights and Licenses granted to PUCKA under this
Agreement shall immediately cease and terminate and PUCKA shall immediately
cease all new developments of projects with the customers. PUCKA shall have
the right to continue to supply current customers with parts produced for
those customers at the date of termination until the current purchase order
runs out.
Section l4. GOVERNING LAW
14.1 This Agreement, executed in duplicate, shall be interpreted in
accordance with and its performance shall be governed by the laws of the
Commonwealth of Massachusetts. Any litigation or legal action between the
parties concerning this Agreement shall take place in a court of competent
jurisdiction in the Commonwealth of Massachusetts. PUCKA hereby consents to
and submits itself to the jurisdiction of the Commonwealth of Massachusetts
and agrees to appear in any such action upon written notice thereof.
14.2. All rights and remedies available to PARLEX shall be cumulative
and in addition to all rights and remedies available to PARLEX under all
applicable laws, including without limitation, the Uniform Commercial Code
in effect in Massachusetts. No waiver of any right or remedy available to
PARLEX in any instance shall constitute a waiver of any other right of
remedy.
Section l5. BINDING EFFECT AND SEVERABILITY
15.1. The terms of this Agreement shall be binding upon and inure to
the benefit of and shall be enforceable by the executors, administrators,
successors, assigns and transferees of the parties hereto. In case any term
of this Agreement shall be held invalid, illegal or unenforceable in whole
or in part, neither the validity of the remaining part of such term nor the
validity of any other term of this Agreement shall in any way be affected
thereby.
15.2. This Agreement constitutes the full and complete understanding
and agreement of the parties, supersedes all prior understandings and
agreements, both oral and written as to the subject matter of this
Agreement, and cannot be amended, changed, modified, or terminated without
the consent in writing of both parties hereto.
Section l6. NON-WAIVER
16.1 The failure of PARLEX, at any time or from time to time, to
enforce or require the strict keeping and performance of any of the terms or
conditions of this Agreement shall not constitute nor be construed to be a
waiver of such terms or conditions in any way. The exercise by PARLEX of
any right arising thereunder shall not preclude nor prejudice it from
thereafter exercising the same or any other right nor shall the waiver of
any breach of the Agreement prevent a subsequent enforcement of such term or
obligation or be deemed to be a waiver of a subsequent breach.
Section l7. ASSIGNABILITY
17.1 Neither party hereto shall, during the term of this Agreement,
assign, transfer or otherwise dispose of this Agreement or its interests,
rights and obligations in or under this Agreement, without the prior written
approval of the other party hereto, except that either party may assign this
Agreement without approval of the other party, to a wholly-owned subsidiary
of the assigning party.
Section l8. LANGUAGE
18.1 This Agreement is in the English language, and is to be governed
and interpreted in the English language, and is executed in duplicate
originals, one duplicate to be retained by each party hereto.
Section 19. HEADINGS
19.1 Any headings in this Agreement are inserted for convenience only
and shall not constitute a part hereof for any purpose whatsoever.
Section 20. SUCCESSION
20.1 This agreement has override and supersede all previous License
Agreements.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers or representatives as of the day and year
first above written.
PARLEX CORPORATION
By:________________________
XXXXX X. XXXXXX,
PRESIDENT
PUCKA INDUSTRIAL CO., LTD.
By:________________________
XXXXX XXXX,
PRESIDENT
EXHIBIT A
1.0 Training and Technology Transfer
1.1 PHASE I
PUCKA agrees to send up to 3 individuals to PARLEX for a period of 2 months
maximum for training in the areas of:
*
1.2 PHASE II
PUCKA agrees to send up to 3 individuals to PARLEX for a period of 2 months
maximum for training in the following areas:
*
2.0 Cost Considerations
2.1 * Should PUCKA request the additional support,
the cost shall be paid for these services under the provisions of the basic
AGREEMENT.
3.0 Equipment Procurement
3.1 *
3.2 *
4.0 Timing
4.1 PHASE I
- PARLEX procure and ship equipment *
- PARLEX commence training of PUCKA *
4.2 PHASE II
- PARLEX procure and ship equipment *
- PARLEX commence training of PUCKA *
- PARLEX commits to "best effort" in our attempt to meet the procurement and
ship schedule however, due to the uncertainty of equipment manufacture
performance we are unable to guarantee these dates.
_______________________
Confidential information has been omitted and filed separately with the
Commission.
