Exhibit 10.7
PATENT LICENSE AGREEMENT
THIS AGREEMENT, effective the last date of signature below, is by and
between GENERAC CORPORATION, a Wisconsin corporation ("Licensor") and GENERAC
PORTABLE PRODUCTS, INC. (F/K/A GPPC, INC.), a Delaware corporation ("Licensee").
RECITALS
A. Licensor is the owner of certain patents, together with the
inventions disclosed thereby, as described more fully below.
B. Licensee wishes to obtain a license to the patents, and Licensor has
authority to grant such a license in conjunction with Licensee's purchase of
Licensor's Portable Products Division (the "Division") and in accordance with
the parties' Asset Purchase and Sale Agreement.
AGREEMENTS
In consideration of the recitals and the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS.
(a) "Patents" means U.S. Patent No. 5,504,417, U.S. Patent No.
5,489,811, and U.S. Patent No. 5,376,877, together with any reissue or
reexamination patents resulting therefrom;
(b) "Inventions" means inventions claimed in the Patents;
(c) "Patent Rights" means all rights held by the Licensor to make, use
and sell the Inventions, and to exclude third parties from making, using or
selling the Inventions;
(d) "Field of Use" means use of the Patent Rights for the manufacture
and sale of pressure washers, portable engine driven welders and portable
consumer generators (hereinafter, "Products").
2. TERM. This Agreement shall become effective on the date of the last
signature below, and shall remain in effect until expiration of the last of the
Patents to expire, or until terminated under paragraph 5 of this Agreement, or
until terminated by mutual written agreement of Licensee and Licensor (the
"Term"). Upon the expiration
and/or termination of this Agreement, the license to exercise the Patent Rights
shall cease.
3. GRANT OF LICENSE. Licensor hereby grants to Licensee an exclusive
right and paid-up license to exercise the Patent Rights in the Field of Use and
the right to sublicense such Patent Rights in the Field of Use during the Term,
subject to the terms and conditions set forth herein. The right to sublicense is
contingent upon the prior written consent of Licensor, which consent shall not
be unreasonably withheld.
4. RIGHT OF INSPECTION. Licensee shall keep accounts and records of the
manufacture and sale of goods incorporating the Inventions, in sufficient detail
to enable compliance with the terms of this Agreement to be verified by Licensor
and/or its authorized representative. Licensee shall make such records available
for inspection and audit by Licensor and/or its authorized representative during
reasonable business hours and at such time or times as Licensor may reasonably
request for the purpose of verifying compliance under this Agreement.
5. TERMINATION.
(a) Licensee and Licensor agree that this Agreement may be terminated
before the Term expires by either Licensee or Licensor if the other breaches or
defaults on any material obligation under this Agreement and fails to cure such
breach within 120 days after written notice from the other setting forth the
basis of such breach and the intent to terminate this Agreement due to such
breach.
(b) Either Licensee or Licensor may terminate this Agreement if (i) a
petition in bankruptcy is filed against the other and not dismissed within 90
days thereafter, or (ii) if the other's business or any substantial portion of
the assets of the other are attached by order of the court, and such attachment
is not dissolved within 90 days.
(c) Termination of this Agreement shall extinguish the respective
rights and obligations of Licensee and Licensor, except that (i) Licensee shall
have the right to sell any Products in its possession and/or fulfill any
purchase order obligations existing at the time of termination, and to meet any
manufacturing obligation and/or to sell any Products in its possession at the
time of termination; (ii) the respective warranty and indemnification
obligations of Licensor and Licensee, as provided herein, shall survive
termination of this Agreement; and (iii) both Licensee and Licensor shall be
responsible to the other for any obligation incurred prior to termination.
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6. REPRESENTATIONS AND WARRANTIES.
(a) Licensor represents and warrants that Licensor has full and
complete authority as the owner of the Patents to enter into this Agreement and
the right to license the Patent Rights as provided herein.
(b) Licensor represents and warrants that it has taken no action which
adversely affect the rights of Licensee under this Agreement.
(c) Licensee warrants and represents that it will not in any manner
challenge the validity of the Patents. Furthermore, Licensee will not
intentionally act in any manner to induce or cause a third party to challenge or
question the validity of any of the Patents. Without limiting Licensor remedies,
action by Licensee contrary to this paragraph will be cause for termination of
this Agreement by Licensor.
(d) Licensor represents and warrants that the Patents are enforceable
and that the maintenance fees for each of the Patents will be paid in a timely
manner during this Agreement to maintain enforceability of the Patents.
(e) Licensor represents and warrants that it has no notice of any
infringement claims against the Division relating to the Patents.
7. IMPROVEMENTS. Licensee agrees that inventions, innovations or
technology conceived, made and/or reduced to practice by either Licensee or
Licensor, and representing improvements to the Inventions, shall be owned solely
by Licensor, and Licensee shall execute, or have executed, documents reasonably
required by Licensor to perfect such ownership. Licensor agrees that Licensor
and Licensee shall enter into good faith negotiations to permit Licensee to
make, use and/or sell such inventions, innovations or technology, the terms of
any such agreement to be mutually agreeable by the parties.
8. ENFORCEMENT OF PATENTS. Licensee shall promptly report in writing to
Licensor any known or suspected infringement of any of the Patents by any third
party, and shall provide Licensor with any and all available information and
evidence supporting such infringement. Notwithstanding the reporting requirement
contained herein, enforcement of the Patents shall be the right of Licensor
until such time as Licensor, following written notice from Licensee of a third
party's infringement of any of the Patents, declines to enforce the Patents. If
Licensor so declines, Licensee may bring an infringement action against the
third party identified in the notice, and may join Licensor as a necessary party
if so required by the court. In such an action, after both Licensee and Licensor
have been fully compensated for any out-of-pocket expenses incurred in the
course of said action, any remaining damage award or settlement payment made in
compensation for lost sales or other harm incurred within the Field of Use shall
be the property of Licensee.
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9. NOTICES. Any notice to be given hereunder shall be given
and deemed sufficient if in writing and delivered or two business days after
being mailed by registered or certified mail, in the case of Licensor, to:
Generac Corporation
X.X. Xxx 0
Xxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Chairman of the Board
with a copy to:
Reinhart, Boerner, Van Deuren, Xxxxxx & Rieselbach, s.c.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Van Deuren, Esq.
and, in the case of Licensee, to:
Generac Portable Products Inc. (f/k/a GPPC, Inc.)
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxxxx
with a copy to:
King & Spalding
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxxx, Esq.
10. RELATIONSHIP OF THE PARTIES. The relationship established between
the parties under this Agreement during its term shall be solely that of
licensor and licensee. Under no circumstances shall the contractual relationship
between the parties be deemed or construed as one of agency, partnership, joint
venture, employment or otherwise. Except as expressly provided herein, this
Agreement does not give either party any right to act as a representative or
agent of the other party or any authority to incur or create any obligation in
the name of or on behalf of the other party.
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11. ASSIGNMENT. But for the right of Licensee to sublicense the Patent
Rights, neither party may assign or otherwise transfer this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party; provided, however, either party may assign, upon written notice to the
other party and without the other party's consent, this Agreement or its
interest herein to any third party succeeding to its business. Subject to the
foregoing, this Agreement shall bind and inure to the benefit of Licensor,
Licensee, and their respective representatives, heirs, successors and assigns.
12. GOVERNING LAW. This Agreement shall be interpreted, applied and
performed according to the laws of the State of Wisconsin, without regard to
conflict of law principles.
13. WAIVER. The failure of either party to insist, in any one or more
instances, upon performance of any of the terms, promises and conditions of this
Agreement, shall not be construed as a waiver or relinquishment of any right
granted hereunder or of the future performance of any such term, promise or
condition.
14. SEVERABILITY. If any paragraph, term or condition of this Agreement
is held to be invalid or unenforceable for any reason, the parties agree that
such invalidity or unenforceability shall not affect any other paragraph, term
or condition of this Agreement, and that the remaining paragraphs, terms and
conditions shall remain in full force and effect and any court of competent
jurisdiction may so modify any objectionable paragraph, term or condition as to
make it valid and enforceable.
15. ENTIRE AGREEMENT. This Agreement, together with the Asset Purchase
and Sale Agreement, constitutes and contains the entire agreement of the parties
with respect to the subject matter hereof. This Agreement supersedes any and all
prior understandings and agreements between the parties. Any modification of
this Agreement shall be in writing and executed in the same manner as this
license.
16. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which taken together shall
constitute one and the same instrument.
GENERAC CORPORATION GENERAC PORTABLE PRODUCTS, INC.
(F/K/A GPPC, INC.)
BY____________________________ BY____________________________
Xxxxxx X. Xxxx Xxxx X. Xxxxxxxxx
Chairman of the Board President
Date: July 9, 1998 Date:___________________________
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