Exhibit 10.10(b)
PATENT LICENSE AGREEMENT
Effective as of the "Effective Date" referred to in Article VII hereof,
by and between Xxxxxx X. Xxxxxxx of 00000 Xxxxxxxx, Xxxxx, Xxxxxxxx 00000, and
or assigns, hereinafter referred to as "LICENSOR", and Xxxxxxxx Controls, Inc.,
a Delaware Corporation, and Proactive Acquisition Corporation, a Michigan
Corporation, having a corporate office at 0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000,
Xxxx Xxxxxxxxxx, Xxxxxxxx 00000 , collectively hereinafter referred to as
"LICENSEE".
WITNESSETH:
WHEREAS LICENSOR is now and has been engaged in developing certain
products embodying inventions or designs owned by LICENSOR and has available
technical information and know-how relating to the manufacture thereof; and
WHEREAS LICENSOR owns or controls or may hereinafter own certain
patents as identified in Schedule A appended hereto, relating to such products;
and
WHEREAS LICENSOR has in the past granted an exclusive technical
assistance and patent license agreement for the Licensed Patents defined herein
to Active Tool and Manufacturing Company (hereinafter ACTIVE) on November 1,
1993; and
WHEREAS ACTIVE seeks to make a sale of said exclusive license agreement
along with certain business assets related to Licensed Products defined
hereinafter; and
WHEREAS LICENSEE, as defined herein, has expressed an interest in
obtaining said exclusive license agreement but only subject to certain changes
as set forth herein; and
WHEREAS LICENSOR has agreed to act as a consultant and advisor to
LICENSEE on matters pertaining to the engineering, design, and manufacture of
automotive brake, clutch and/or accelerator pedals and related technology and
has this date entered into a written consulting agreement with LICENSEE in this
regard; and
WHEREAS LICENSEE desires to use LICENSOR technical information and
know-how and to acquire licenses with respect to current and/or future designs,
patents and applications for patents owned or developed by LICENSOR, including
those developed in conjunction with said consulting agreement, and LICENSOR is
willing to grant the licenses to LICENSEE;
NOW, THEREFORE, in consideration of the promises and mutual covenants
and agreements hereinafter set forth, the parties hereto hereby covenant and
agree as follows:
ARTICLE I
General Definitions
As used herein, the following terms shall have the following meanings:
Section 1-A The term "Licensed Territory", as used herein, means all
the countries of the world.
Section 1-B The term "Licensed Products", as used herein means all
products upon which a claim of any of the Licensed Patents reads and
equivalents, with Licensed Patents being defined hereinafter and set forth in
Schedule A hereof. Licensed Products include adjustable automotive brake, clutch
and/or accelerator pedals and parts therefor and associated adjustable
components as claimed in Licensed Patents. Supplemental components, such as a
wiring harness, electronic sensors, or an Electronic Control Unit are excluded
from "Licensed Products". If LICENSEE and LICENSOR are unable to agree on
whether an article sold by LICENSEE is a Licensed Products, then LICENSOR and
LICENSEE agree to submit the issue of arbitration in accord with Section 8-F of
this Agreement.
Section 1-C The term "Licensed Year", as used herein, means a period of
twelve (12) consecutive months commencing on November 1, 1998 or on any
anniversary of said date occurring during the life or term of this agreement.
Section 1-D The term "Technical Information", as used herein, means all
information including, but not limited to, data, know-how, patent applications,
and other assistance LICENSEE obtains from LICENSOR that relates to Licensed
Products.
Section 1-E The term "Licensed Patents", as used herein, means all
patents and applications for patents in the Licensed Territory which relate to
Licensed Products and which are now or hereafter owned by LICENSOR, and patents
or applications for patents owned by LICENSEE which, if practiced, would
infringe either literally or by equivalents any Licensed Patent owned by
LICENSOR, but excluding patents and applications for patents which are removed
by LICENSEE or which are not elected by LICENSEE or are removed by LICENSOR
under the appropriate provisions of this agreement. The term "Licensed Patents"
shall include all patents and applications for patents in the Licensed Territory
as set forth in Schedule A hereof.
Section 1-F The term "Affiliate" means any entity in which LICENSEE has
an ownership interest, LICENSEE's parent company, and any companies owned by
LICENSEE's parent company.
Section 1-G The terms "have made" and "having made" mean use by
LICENSEE of a third party to fabricate and/or assemble the Licensed Products.
Section 1-H The term "Confidential Information" as used herein means
all information a Receiving Party obtains from a Disclosing Party pertaining to
Licensed Products, the Licensed Patents, or the business of LICENSEE, which is
identified as Confidential Information by the Disclosing Party.
ARTICLE II
License Granted
Section 2-A LICENSOR grants and agrees to grant to LICENSEE:
(a) An exclusive right and license to use the Technical Information for
the purpose of making, having made, using and selling Licensed Products and
parts therefor in the Licensed Territory;
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(b) An exclusive non-transferable right and license to make, having
made, use and sell Licensed Products and parts therefor covered by any Licensed
Patent in the Licensed Territory.
Section 2-B No license, either express or implied, is granted by
LICENSOR to LICENSEE hereunder with respect to any patent or information except
as specifically stated above.
Section 2-C No license, either express or implied, is granted hereunder
to use as a trademark or otherwise any work of LICENSOR used as a designation of
origin or any other trademark or trade or product name of LICENSOR, or any word
or xxxx similar thereto.
Section 2-D LICENSEE may, at its option, indicate that Licensed
Products and parts therefor are made under license from LICENSOR by a suitable
legend, if the form of such legend and the extent of LICENSEE's use thereof have
received prior written approval from LICENSOR. LICENSOR may amend or revoke
prior approvals to use such legends at any time during the term of this
agreement, and all rights to use such legends shall terminate with this
agreement.
Section 2-E LICENSOR hereby grants the rights to sublicense Licensed
Products hereunder providing Sublicensee agrees in writing to comply with all of
the provisions of this License Agreement and further providing LICENSOR is given
timely notice of such sublicense arrangement and consents, in writing, to such
Sublicense. Such consent shall not be unreasonably withheld.
ARTICLE III
Patent Provision
Section 3-A Subject to any United States Government restrictions,
LICENSOR shall submit to LICENSEE, within one (1) month of the signing of this
agreement or within three (3) months after it is filed, for purposes of the
election as set forth below, a copy of each LICENSOR owned United States patent
application which is now pending or is hereafter filed by LICENSOR and which
relates to: (i) Licensed Products, or (ii) automotive brake, clutch, and/or
accelerator pedals, parts therefor and assemblies thereof.
Section 3-B LICENSEE shall, within ninety (90) days of receiving a
copy of a U.S. patent or U.S. patent application submitted under Section 3-A,
notify LICENSOR in writing of its election to include in Schedule A such U.S.
patent or U.S. patent application submitted under Section 3-A of this Agreement.
Upon notification of LICENSOR by LICENSEE of such election, such U.S. patent or
U.S. patent application shall automatically be included in Licensed Patents and
set forth in Schedule A hereof.
Section 3-C Where LICENSEE has made an election under Section 3-B to
include a Patent or Patent Application in Schedule A, LICENSEE shall further
notify LICENSOR not less than one hundred twenty (120) days prior to the first
anniversary date of the U.S. filing date of such application, which countries in
which LICENSEE elects to file a corresponding patent application. LICENSOR shall
file and prosecute such an application, at LICENSEE's expense, which, upon such
filing will be automatically included in Licensed Patents as defined in Section
1-E and set forth in Schedule A hereof. LICENSEE agrees to maintain a
Twenty-five Thousand Dollar ($25,000.00) trust account with LICENSOR to pay the
expenses associated with filing, prosecuting, and maintaining patent
applications and patents.
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Section 3-D LICENSEE shall submit to LICENSOR, within sixty (60) days
after it filed, a copy of each United States patent application owned by
LICENSEE which relates to Licensed Products. So long as the making, having made,
using, or selling articles embodying the invention that is covered by the claims
of such LICENSEE owned patent infringes literally or by equivalents any Licensed
Patent owned by LICENSOR, such LICENSEE owned patent will automatically be
included in Licensed Patents as defined in Section 1-E and set forth in Schedule
A hereof. Notwithstanding the foregoing however, LICENSOR shall have the right,
upon written notice to LICENSEE within sixty (60) after LICENSEE has submitted
its patent application LICENSOR, to exclude such application from Schedule A
hereof. This Agreement does not transfer any ownership interest in any LICENSEE
owned patent or patent application from LICENSEE to LICENSOR.
Section 3-E LICENSEE may remove any Licensed Patent from this agreement
by giving LICENSOR written notice of its desire to do so, removal of such
Licensed Patent to become effective ninety (90) days from the date of such
notice.
Section 3-F LICENSEE shall have no rights hereunder with respect to any
LICENSOR owned patent application or patent which it either (1) has failed to
elect, or (2) has removed from this agreement, in accordance with the provisions
of this Agreement. LICENSEE shall be deemed to have relinquished all rights
hereunder to make, have made, use or sell Licensed Products covered by a
LICENSOR owned patent application or patent in a particular country where such
LICENSOR owned patent application or patent has been non-elected or removed by
LICENSEE.
Section 3-G In the event that LICENSEE elects to include such patent
application or patent in Schedule A hereof, LICENSEE shall bear the reasonable
costs incurred in the filing, prosecution and maintenance of such patent
application and the patent issuing thereon in the Licensed Territory, including
the United States, and shall reimburse such party who files, prosecutes and
maintains the application or the patent issuing thereon. LICENSOR agrees to
consult with LICENSEE regarding continued prosecution of any pending patent
application. In the event that LICENSEE elects to remove any Licensed Patent
from this agreement as provided in Section 3-E or elects to no longer bear the
costs incident to the maintenance as provided in Section 3-K, LICENSEE shall
bear the ordinary and necessary costs incurred as provided in this section for
ninety (90) days from the date of such notice to LICENSOR.
Section 3-H LICENSEE shall place appropriate patent notices on all
Licensed Products which incorporate any invention covered by any Licensed
Patent.
Section 3-I Upon mutual written consent by LICENSOR and LICENSEE,
LICENSEE shall be entitled to commence infringement proceedings against third
parties who are engaged in activities infringing the Licensed Patents. Such
proceedings shall be promptly brought after such mutual written consent and be
vigorously and diligently prosecuted by LICENSEE in the Licensed Territory.
LICENSEE shall have the right to include LICENSOR as a party to such proceedings
where necessary for the conduct thereof. Subject to the limitation in the
following sentence concerning LICENSOR's attorney fees, all expenses including
attorney fees arising out of any mutually consented to infringement proceedings
initiated hereunder shall be borne by LICENSEE . Solely with respect to issues
where the interests of LICENSEE and LICENSOR are at a conflict in such
infringement litigation, LICENSOR may obtain independent counsel at LICENSEE's
expense, providing LICENSOR first seeks and obtains LICENSEE's written consent,
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which consent shall not be unreasonably withheld. LICENSOR shall render to
LICENSEE at sixty (60) day intervals during the period of such proceedings or
the preparation thereof an account of the expenses associated therewith.
LICENSEE shall have complete control over the conduct and settlement of such
infringement proceedings, providing legal counsel for LICENSEE timely consults
with legal counsel for LICENSOR regarding strategic or settlement decisions
during such proceedings. LICENSEE shall first obtain LICENSOR's written consent
to any settlement which includes any economic benefits or concessions granted
from the opposing party to LICENSEE coupled with an effective royalty rate equal
to what LICENSEE would be obligated to pay LICENSOR under Section 5-A(4) hereof
had LICENSEE rather than the opposing party made the opposing party's accused
infringing sales. Any settlement or damage award which may be collected shall be
first used to (1) reimburse LICENSEE and LICENSOR for the expenses incurred by
them with respect to such infringement proceedings, then (2) to satisfy the
royalty requirements as set forth in Article V, Section 5-A(4), then (3) to pay
LICENSEE the normal incremental profit it would have earned on the opposing
party's infringing sales had LICENSEE made such sales, and then (4) any balance
then remaining shall be divided equally between LICENSEE and LICENSOR.
"Incremental profit" shall be computed by subtracting from LICENSEE's average
selling price for comparable products only its direct material and labor costs.
In the event LICENSEE and LICENSOR do not consent within a reasonable
time, in writing, to initiate an infringement proceeding, the party who has
failed to receive consent from the other party shall have the option to initiate
and control such infringement proceedings. The lawsuit-initiating party shall
have the right to join the other party, if necessary, which other party shall
fully cooperate at no out-of-pocket expense to itself other than the cost of its
own attorney if it elects to retain one. Any award as a result of settlement
and/or disposition of such action shall be granted solely to the
lawsuit-initiating party.
Section 3-J LICENSOR represents that he is the true and sole inventor
of the LICENSOR owned Licensed Patents licensed hereunder. LICENSOR does not
make any representation to LICENSEE regarding the scope of enforceability of the
Licensed Patents, and does not warrant that any Licensed Products manufactured
or sold under this agreement will not infringe patents of others. LICENSEE
hereby acknowledges that at the advice of counsel for ACTIVE he has been
provided with certain disclosure relevant to a past ownership and/or
inventorship issue related to a prior consulting arrangement and associated
civil lawsuit filed in the Circuit Court for the County of Wayne, Michigan, Case
No. 95-501324-CK, and based upon such disclosure LICENSEE agrees to defend and
hold harmless LICENSOR with regard to any litigation concerning said prior
consulting arrangement related to inventorship and/or ownership of said Licensed
Patents. LICENSEE further agrees to consult LICENSOR regarding strategic
decisions concerning such litigation. In the event LICENSEE fails to defend
LICENSOR regarding such inventorship and/or ownership litigation this license
agreement shall be terminated forthwith. LICENSEE shall not have any settlement
thereof or other disposition effecting the validity or ownership of Licensed
Products without the written consent of LICENSOR.
Section 3-K LICENSEE may, at any time and from time to time during the
term of this agreement, give ninety (90) days notice, in writing, to the
LICENSOR that it no longer desires to bear the costs incident to the maintenance
of any one or more of the LICENSOR Owned Licensed Patents or patent applications
licensed, and upon expiration of such ninety (90) days, all rights of LICENSEE
in the invention or inventions claimed in such LICENSOR owned patent
applications or patents, shall terminate.
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Section 3-L In the event that LICENSEE shall have no rights hereunder
due to non-election under Section 3-B or 3-C, or elections under Section 3-E or
3-K of this Article, LICENSOR shall have all rights to prosecute and/or maintain
such LICENSOR owned patent applications and/or patent(s) on his own account.
ARTICLE IV
Technical Information
Section 4-A LICENSEE shall be entitled to receive data, know-how, and
other assistance as set forth with respect to any designs or models of Licensed
Products originated by LICENSOR.
Section 4-B LICENSOR will keep LICENSEE generally informed concerning
the origination by LICENSOR of new or improved standard designs or models of
Licensed Products. If LICENSEE requests in writing that any such design or model
be included in this Agreement, LICENSOR may at its option include it therein,
such inclusion to be effective as of the date of LICENSOR's written acceptance
of LICENSEE's request.
Section 4-C Any Confidential Information disclosed to the Receiving
Party by the Disclosing Party is supplied in confidence solely for the use of
the Receiving Party under this agreement and remains the property of the
Disclosing Party. The Receiving Party agrees: (a) not to use or permit use of
any Confidential Information except in accordance with this Agreement; (b) not
to disclose any Confidential Information to others; and (c) not to use or permit
use of any Confidential Information after termination of this agreement except
information which is in the public domain through no fault of the Receiving
Party
Section 4-D LICENSEE shall select an employee who shall act as its
technical correspondent in receiving data and know-how from LICENSOR, and in
making arrangements with LICENSOR for other assistance called for by this
agreement. LICENSEE shall promptly indicate to LICENSOR in writing the name of
its technical correspondent, but shall have the right at any time to substitute
another of its employees as technical correspondent by giving writing
notification of the change.
Section 4-E LICENSOR shall be responsible for providing information, to
the extent it is available in LICENSOR, in answer to reasonable technical
inquiries received from LICENSEE's technical correspondent relating to Licensed
Products and shall provide to the extent requested copies of pertinent technical
data theretofore documented by LICENSOR, including to the extent applicable
assembly and detail drawings, parts lists, test reports and other technical
reports, operation and maintenance manuals, written information relating to
manufacturing processes and apparatus, lists of ingredients and their
proportions in compositions of matter, and written information pertaining to
quality control.
Section 4-F Subject to any United States Government restrictions,
LICENSOR shall arrange for visits of LICENSEE's representatives, to the extent
they do not unduly interfere with the normal business of LICENSOR, at mutually
agreeable times and upon reasonable advance notice to the facilities of LICENSOR
for the purpose of obtaining assistance relating to the Licensed Products and
their manufacture.
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Section 4-G Visits by LICENSOR's representatives to LICENSEE's
factories and laboratories for the purpose of providing assistance shall be
subject to mutually acceptable arrangements as to their timing.
Section 4-H If approval by any government is required in order to
render this agreement fully effective, LICENSOR shall not be obligated to
furnish any Technical Information hereunder until such approval has been
obtained and evidence thereof has been supplied to LICENSOR. Currently, LICENSOR
is not aware of a requirement for any such government approval.
Section 4-I LICENSEE shall upon written request promptly reimburse
LICENSOR for any costs, including material costs, incurred by LICENSOR in
providing Technical Information to LICENSEE, providing LICENSOR obtains
LICENSEE's prior written approval of such costs.
Section 4-J LICENSOR will use its best efforts to provide LICENSEE with
accurate Technical Information, but LICENSOR does not make any warranty and
shall have no liability with respect to the Technical Information or the use
thereof; nor does LICENSOR assume any responsibility or make any warranty with
respect to Licensed Products, or parts thereof, manufactured, sold or used under
this agreement. LICENSEE shall defend and hold LICENSOR harmless from any
liability arising from Licensed Products or parts therefor, manufactured, sold
or used under this agreement.
Section 4-K Technical Information is supplied in confidence solely for
the use of LICENSEE under this agreement and remains the property of LICENSOR.
After termination of this agreement, LICENSEE shall, if LICENSOR requests in
writing, promptly return to LICENSOR, or its designee, all documented Technical
Information (including copies). LICENSEE agrees (a) not to use or permit use of
any Technical Information except in accordance with the licenses herein granted;
(b) not to disclose any Technical Information to others except to the extent
such disclosure is absolutely necessary to LICENSEE's operation under this
agreement and only then if such disclosure is subject to the same limitations on
the recipient as on LICENSEE; and (c) not to use or permit use of any Technical
Information after termination of this agreement except information which is in
the public domain through no fault of LICENSEE, or is independently developed by
LICENSEE without reference to the Technical Information. Notwithstanding
anything to the contrary in this agreement however, LICENSEE may, with written
notice to LICENSOR, disclose such Confidential and Technical Information on a
need to know basis to its customers if required to do so by a customer, where
such customer is not willing to enter into an agreement with LICENSEE respecting
the confidentiality of such information.
Section 4-L Promptly after the execution of this agreement, LICENSOR
shall consult with LICENSEE to transfer to LICENSEE any Technical Information
possessed by LICENSOR that relates to the Licensed Products. Thereafter,
LICENSOR shall provide LICENSEE with continuing technical assistance and
consulting services related to the Licensed Products. So long as this agreement
remains in effect, LICENSOR shall not with respect to the subject matter of the
Licensed Patents: (1) provide technical assistance or consulting services to any
third parties, or (2) compete with LICENSEE, either directly or indirectly
except concerning Licensed Product removed or not elected by LICENSEE as stated
in Section 3-G.
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ARTICLE V
Compensation
Section 5-A LINCENSEE shall pay to LICENSOR the following nonrefundable
amounts:
1. An initial down payment of Six Hundred Thousand Dollars
($600,000.00) payable upon execution of this agreement and an
agreement between LICENSEE and ACTIVE.
2. A Minimum Royalty of One Million One Hundred Forty Thousand
Dollars ($1,140,000.00) payable in twelve Annual Minimum
Royalty Payments of Ninety-five Thousand Dollars ($95,000) to
be paid within thirty (30) days of the beginning of each
Licensed Year beginning with the Licensed Year starting
November 1, 1998 and the twelfth Payment being made within
thirty (30) days of November 1, 2009. LICENSOR hereby
acknowledges receipt of the Annual Minimum Royalty Payment for
the Licensed Year starting November 1, 1998 prior to execution
of this Agreement.
3. Continuing Minimum Annual Royalty Payments of Ninety-five
Thousand Dollars ($95,000.00) payable beginning with the
Licensed Year starting November 1, 2010, as long as at least
one unexpired patent remains on Schedule A.
4. An Earned Royalty of three (3%) percent of LICENSEE'S Net
Receipts from all sales of Licensed Products for each Licensed
Year covered by any Licensed Patent minus any Minimum
Royalties paid during such Licensed Year and also minus
previous Minimum Royalties paid for which no credit was
received in previous years. The Earned Royalty for each
Licensed Year is to be paid within forty-five (45) days after
the end of the Licensed Year.
5. In the event this Agreement is terminated, no portion of the
Minimum Royalty, or of any Continuing Minimum Annual Royalty
for that License Year in which such termination becomes
effective will be refunded to LICENSEE. LICENSEE shall pay to
LICENSOR the above-stated minimum royalties irrespective of
LICENSEE'S ability to accomplish sales of Licensed Products.
Section 5-B The term "Net Receipts", as used herein, means all payments
received by LICENSEE from all sales of Licensed Products; provided, however,
that with respect to Licensed Products which are (a) sold by LICENSEE to any
customer having a special relationship with or enjoying a favored position for
dealing with LICENSEE as a result of which payments received by LICENSEE are
less than the payments received from ordinary customers, (b) sold by LICENSEE
for other than monetary payments, or (c) used rather than sold by LICENSEE, the
term "Net Receipts" means the most recent monetary payments received by LICENSEE
for such Licensed Products and parts therefor from ordinary customers. Net
Receipts must include all payments received for sales commissions and normal
packaging. Net Receipts may exclude separately billed payments for
transportation from LICENSEE'S place of business to the customer's destination,
for replacement of defective Licensed Products under warranty provisions, for
excise and sales taxes, and for extra packaging charges caused by special
customer requests.
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Section 5-C Each earned royalty payment due hereunder will be made
during the month following the Licensed Year covered thereby and will be
accompanied by a report showing for such Licensed Year: (a) a list of all
separately identifiable types (i.e., by model numbers or equivalent) of Licensed
Products sold or otherwise utilized, (b) the quantity of such Licensed Products
of each type, (c) the Net Receipts from Licensed Products of each type, (d) the
quantities of, and Gross Receipts for, parts sold or otherwise utilized,
identified by the Licensed Products types for which supplied, and (e) the
derivation of the amount payable to LICENSOR from the foregoing information.
Section 5-D LICENSEE shall pay interest to LICENSOR at a rate of two
percent (2%) over the prime per annum interest rate as set by Comerica Bank on
any and all amounts that are at any time overdue and payable to LICENSOR under
this agreement, such interest being calculated on each such overdue amount from
the date when such amount became due to the date of actual payment thereof. The
payment of such interest shall not replace any of LICENSOR'S other rights under
this agreement resulting from LICENSEE'S default by failure to pay any amounts
due hereunder.
Section 5-E All amounts payable to LICENSOR under this agreement are
to be paid in U.S. Dollars.
Section 5-F LICENSEE shall at all times during the life of this
agreement and for one year after termination accumulate accurate and up-to-date
records which will contain the complete data from which amounts due to LICENSOR
under this agreement can be readily calculated, shall preserve and permit
examination of such records by LICENSOR'S representatives at reasonable
intervals and under reasonable conditions during the life of this agreement and
for three (3) years thereafter, and shall supply to LICENSOR'S representatives
upon request all information useful in making a proper audit and verification of
LICENSEE'S performance of its obligations under this agreement. If an audit
determines that any accounting or royalties paid to LICENSOR is less than 97% of
the royalties due to LICENSOR, then LICENSEE shall bear the entire cost of said
audit and make payments forthwith to LICENSOR of any shortage based on the
actual number of Licensed Products sold.
ARTICLE VI
Duration and Legal Effect
Section 6-A This agreement is effective as of the date established by
Section 7 of this Agreement and, unless sooner terminated under the provisions
below, will continue in effect for the life of the Licensed Patents set forth in
Schedule A hereof, subject to the termination provisions set forth herein.
Section 6-B If either party defaults for any reason in any of its
obligations hereunder, the other party will have the right to terminate this
agreement by giving written notice of termination at least sixty (60) days prior
to the effective date of such termination, such notice specifying the default;
provided, however, that such notice will be of no effect and termination will
not occur if the specified default is remedied prior to said effective date of
termination.
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Section 6-C LICENSOR may terminate this agreement forthwith in the
event of the bankruptcy or insolvency of LICENSEE or any part of LICENSEE, an
assignment for the benefit of creditors of LICENSEE or any part of LICENSEE, the
nationalization of the industry which encompasses any of the Licensed Products,
or any suspension of payments hereunder by governmental regulation. Such
termination shall be without prejudice to any other rights or claims LICENSOR
may have against LICENSEE. LICENSOR's ability to terminate this agreement due to
nationalization, or to the suspension of payments hereunder by government
regulations shall be limited to terminating this agreement in the country in
which such event occurs.
Section 6-D During the period of one year after termination of this
agreement, LICENSEE may, subject to its earned royalty payment and reporting
obligations set forth above, dispose of Licensed Products, and parts therefor,
which it has on hand prior to termination.
Section 6-E This agreement may not be assigned or otherwise transferred
by LICENSEE to anyone without the prior written consent of LICENSOR.
Notwithstanding the aforesaid, LICENSEE may upon LICENSOR'S written consent
assign this agreement to a successor of LICENSEE of all of the business of
LICENSEE providing such successor agrees in writing to assume all of the
obligations of LICENSEE hereunder. Such consents shall not be unreasonably
withheld. LICENSOR may assign this agreement, subject only to the limitation
that LICENSOR's obligations under Article III and under Article VIII, Section
8-C hereof are personal to LICENSOR, and shall survive any assignment of this
agreement by LICENSOR.
ARTICLE VII
Contingency and Effective Date
This Agreement is contingent upon LICENSEE and Active executing an
agreement relating to the Licensed Products ("Active Agreement") and shall be
effective on the Effective Date of the ACTIVE Agreement.
ARTICLE VIII
Miscellaneous Provisions
Section 8-A Failure of either party to insist upon the strict
performance of any provisions hereof or to exercise any right or remedy shall
not be deemed a waiver of any right or remedy with respect to any existing or
subsequent breach or default; the election by either party of any particular
right or remedy shall not be deemed to exclude any other; and all rights and
remedies of either party shall be cumulative.
Section 8-B LICENSEE shall bear all development costs, sales costs and
related expenses in connection with the commercialization of Licensed Products.
LICENSEE shall endeavor in every reasonable and proper way and to the best of
its ability to use its best efforts to further sales of Licensed Products with
the aim of achieving a good exploitation of Licensed Products in the Licensed
Territory.
Section 8-C In the event of any actual or threatened infringement suit
against LICENSEE or its customers which would affect the manufacture, use or
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sale of Licensed Products, LICENSEE shall promptly give written notice thereof
to LICENSOR, and LICENSOR will make himself available to testify by deposition
or at trial as well as to provide to LICENSEE free of charge any information in
its possession which LICENSOR believes will assist LICENSEE in defending or
otherwise dealing with such suit. LICENSEE shall vigorously and diligently
defend such suit with appropriate consultation with LICENSOR regarding strategic
issues. LICENSEE shall not have any settlement thereof or other disposition
affecting the validity or ownership of Licensor owned Licensed Patents without
the written consent of LICENSOR.
Section 8-D LICENSOR does not assume any responsibility or make any
warranty with respect to Licensed Products, or parts therefor, manufactured,
sold or used under this agreement, nor does LICENSOR assume any responsibility
for any representations or warranties made by the LICENSEE with respect to
Licensed Products, whether express or implied. LICENSEE shall hold LICENSOR
harmless from any liability arising from Licensed Products, or parts therefor,
manufactured, sold or used under this agreement.
Section 8-E Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given when mailed postpaid first class
registered mail and addressed to the party for whom it is intended at its record
address, and such notice shall be effective as of the date it is deposited in
the mail. The record address of LICENSOR for this purpose is:
Xxxxxx X. Xxxxxxx
Xxxxxxx Consultants, Inc.
11086 Hedgeway
Xxxxx, Xxxxxxxx 00000
and the record address of LICENSEE is:
Chief Financial Officer
Xxxxxxxx Controls Industries, Inc.
00000 XX 00xx Xxxxxx
Xxxxxxxx, XX 00000
Either party may, at any time, substitute for its previous record address any
other address by giving written notice of the substitution.
Section 8-F The rights and obligations of the parties hereto under this
agreement shall be subject to all applicable laws, orders, regulations,
directions, restrictions and limitations of the Governments having jurisdiction
of the parties hereto. In the event, however, that any such law, order,
regulation, direction, restriction, limitation or construction thereof shall
substantially alter the relationship between the parties under this agreement or
the advantages derived from such relationship, the adversely affected party may
request the other party hereto to modify this agreement, and if, within ninety
(90) days subsequent to the making of such a request, the parties hereto are
unable to agree upon mutually satisfactory modifications hereof, then the
adversely affected party may submit such issue to arbitration under the rules
and regulations of the American Arbitration Association upon appropriate notice
to the other party. Each party shall pay its own arbitration costs, including
attorney fees, and the parties agree to abide by the decision of the
arbitration. Any decision by the arbitrators shall be enforceable in any Court
of competent jurisdiction.
11
Section 8-G This agreement contains all of the terms and conditions
agreed upon by LICENSOR and LICENSEE regarding the specific subject matter
hereof; and this agreement may be modified only by an instrument in writing
executed by LICENSOR and LICENSEE by its duly authorized officers.
LICENSEES and LICENSOR have caused this agreement to be executed, in
triplicate, by its duly authorized officers and the date and at the places
indicated below.
PROACTIVE ACQUISITION, Inc.
XXXXXXXX CONTROLS, INC.
Attest: By:________________________
Name:
Its:_______________________
__________________________________
Title Dated:_____________________
(seal) At:________________________
(City, State and County)
XXXXXX X. XXXXXXX
Attest: By:________________________
__________________________________
Title Dated:_____________________
(seal) At:________________________
(City, State and County)
12
SCHEDULE A
Licensed Patents
Patents Entitled: Adjustable Automotive Pedal System
U.S. Patent No. 5,351,573, Issued October 4, 1994
U.S. Patent No. 5,771,752, Issued on June 30, 1998
U.S. Patent No. 5,823,064, Issued October 20, 0000
Xxxxxxxxx Patent Xx. 000000, Xxxxxx Xxxxxxxx 00, 0000
Xxxxxxxxx Patent No. 685315, Issued April 30, 0000
Xxxxxx Patent No. 9206597 Granted June 23, 0000
Xxxxxx Patent Application No. 9508605A Published November 25, 0000
Xxxxxx Patent Application No. 2,119,237, Published April 15, 0000
Xxxxxx Patent Application No. 2,197,760 Published Xxxxxxxx 00, 0000
Xxxxx Xxxxxxxx Patent No. 283392B6 Issued Xxxxx 00, 0000
Xxxxx Xxxxxxxx Patent Application No. CZ9700464A3 (PV464197) Published January
14, 1998
European Patent Application No. EP607281A4 (92921592.9) Published July 27, 1994
European Patent Application No. EP776497A4 (95928282.3) Published June 4, 1997
Georgia Patent Application No. 553/01 filed December 30, 1994
Georgia Patent Application Xx. 0000/00 xxxxx Xxxxxxxx 0, 0000
Xxxxxxx Patent Application No. HUT69854A2 (P9400976) Examined September 28, 1995
Hungary Patent Application No. HUT77426A2 (P9701677) Examined April 28, 0000
Xxxxx Patent Application No. JP6507035T2 (506,976) Published August 4, 0000
Xxxxx Patent Application No. JP10506730T2 (507,403) Published June 30, 1998
Mexico Patent No. 180,663 Issued January 18, 0000
Xxxxxx Patent Application No. 953516, filed August 15, 1995
13
Poland Patent No. 168510 Published February 29, 0000
Xxxxxx Patent Application No. 319789 Published September 1, 1997
Russian Federation Patent Application No. 94045823.0 filed April 6, 1994
Russian Federation Patent Application No. 97103946 filed Xxxxx 00, 0000
Xxxxxxxxx Patent Application No. 94005483 filed Xxxxx 0, 0000
Xxxxxxxxx Patent Application No. 97031162 filed March 14, 1997
14
