EXHIBIT 10.88
TWENTY SIXTH
AMENDMENT
TO
LICENSE AGREEMENT
This TWENTY SIXTH AMENDMENT, effective as of the later date of the signatures
below, is to that certain Reproduction and Service Part Tooling License
Agreement effective December 1, 1993 by and between Service Parts Operations,
General Motors Corporation ("LICENSOR") and Xxxxxx Industries, Inc. ("LICENSEE")
as amended by the FIRST through TWENTY FIFTH AMENDMENTS (collectively the
"AGREEMENT").
WHEREAS, the parties have entered into the AGREEMENT and mutually desire to
amend such AGREEMENT as specifically provided herein;
NOW THEREFORE for good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. Paragraph 4.1 of the AGREEMENT is hereby amended to extend the Initial Term
from July 31, 2001 to December 31, 2001.
2. Paragraph 4.2 of the AGREEMENT is hereby stricken in its entirety and is
replaced with the following new Paragraph 4.2:
"4.2 Renewal Term. Upon expiration of the Initial Term, LICENSEE shall
have the right to two successive automatic five-year renewal terms
(i.e., January 1, 2002 to December 31, 2006 and January 1, 2007 to
December 31, 2011) provided: a) LICENSEE has paid earned Net Royalties
(defined in Exhibit III) in the amount of $750,000 during the 12 months
immediately preceding the start of the first renewal term (i.e., in the
12 months ending December 31, 2001) and in the amount of $1,000,000
during the 12 months immediately preceding the start of the second
renewal term (i.e., in the 12 months ending December 31, 2006), and b)
LICENSEE is not otherwise in breach of the AGREEMENT at the time of
renewal."
3. Exhibit I of the AGREEMENT, as amended, is hereby further amended to delete
the LICENSED PARTS identified on ATTACHMENT A to this TWENTY SIXTH
AMENDMENT. These parts are being deleted because LICENSOR has thus far been
unable to locate, and make available to LICENSEE, the GM TOOLS used to
produce such LICENSED PARTS and LICENSEE is not currently manufacturing and
selling such parts, nor does LICENSEE plan to do so in the future.
4. Exhibit I of the AGREEMENT, as amended, is further amended to also delete
the LICENSED PARTS identified on ATTACHMENT B to this TWENTY SIXTH
AMENDMENT. These parts are currently being sold by LICENSEE; however,
LICENSEE is purchasing these parts from other General Motors licensees, and
provided the parts remain officially licensed, LICENSEE is not required to
also be licensed on the parts and pay a royalty thereon.
5. In accordance with Paragraph 8 of this TWENTY SIXTH AMENDMENT, LICENSEE and
LICENSOR have identified the GM part numbers for additional parts LICENSEE
is currently selling. As a result, Exhibit I of the AGREEMENT, as amended,
is further amended to specifically include the LICENSED PARTS MADE WITHOUT
TOOLS, as first referenced in the SECOND AMENDMENT, identified on
ATTACHMENT C to this TWENTY SIXTH AMENDMENT.
6. Exhibit III, "ADVANCE ROYALTY" and "MINIMUM GUARANTEED ROYALTIES" of the
AGREEMENT are hereby stricken in their entirety and are replaced by the
following new sections:
"ADVANCE ROYALTY
Pursuant to Paragraphs 5.2 and 5.3, LICENSEE has paid LICENSOR a
non-refundable advance royalty ("Advance") in the amount of U.S.
$1,000,000, and such amount may be credited by LICENSEE against Net
Royalties earned up through December 31, 1998. No carry-over of excess
Net Sales (over the Advance) or deficiency of Net Sales (under the
Advance) into subsequent years within the Initial Term or any renewal
term shall be allowed except only as may be applicable under "Minimum
Guaranteed Royalties" below.
MINIMUM GUARANTEED ROYALTIES
The minimum annual royalty guarantees ("Guaranteed Minimum") to be paid
by LICENSEE to LICENSOR shall be as follows:
For the period December 1, 1993 through December 31, 1998, there shall
be no Guaranteed Minimum due LICENSOR in addition to the Advance
already paid; and For each twelve month period from January 1, 1999
through December 31, 2001, and annually thereafter during any Renewal
Term, the Guaranteed Minimum shall be $500,000; provided, however, if
during the period of December 1, 1993 through December 31, 1998
aggregate Net Royalties earned in the amount of at least $1,000,000 are
not achieved, then LICENSEE shall be permitted to reduce the $500,000
Guaranteed Minimum for the period January 1, 1999 to December 31, 1999
by an amount equal to the difference between the $1,000,000 Advance and
actual Net Royalties earned up to a maximum of $350,000.
The Guaranteed Minimum amounts due after January 1, 1999, are due and
payable in equal quarterly installments at the end of each calendar
quarter within the applicable time period of the Initial Term or any
Renewal Term unless otherwise paid as Net Royalties or the Advance
during such period. The Guaranteed Minimum shall stand alone. No
carry-over of excess Net Sales (over the Guaranteed Minimum) or
deficiency of Net Sales (under the Guaranteed Minimum) into subsequent
time periods within the Term or any renewal term shall be allowed
unless otherwise specifically noted above."
7. Exhibit III, "ROYALTY RATE" of the AGREEMENT, as amended by the SECOND
AMENDMENT, is further amended as follows:
"The parties agree that the Net Royalty Rate for LICENSED PARTS MADE
WITHOUT TOOLS, as referenced in the SECOND AMENDMENT, shall be five
percent (5%) effective, retroactively, October 1, 1996, as such is the
date agreed to by the parties that the parts were matched to a GM part
number and entered by LICENSOR into its parts database."
8. LICENSEE and LICENSOR will continue to work diligently to identify specific
GM part numbers for additional parts which LICENSEE is now selling which
presently are not identified by a GM part number. When additional GM part
numbers are identified for any such parts, then the Net Royalty Rate on
such parts will increase from the two percent (2%) rate to five percent
(5%) rate when the specific part numbers are added to the AGREEMENT by an
amendment fully-executed by the parties. Execution of such an amendment by
the parties shall trigger the process for LICENSOR to add such part numbers
to the GMSPO system.
9. LICENSOR will continue to consider requests by LICENSEE to add more
products as "GM Official Licensed Products" under the AGREEMENT at the
applicable eight percent (8%) royalty rate.
10. In an effort to provide further detail on LICENSEE'S license rights under
Exhibit I of the AGREEMENT, as amended, LICENSEE shall have the Right of
First Refusal on the GM Catalog Groups specifically identified on
ATTACHMENT D to this TWENTY SIXTH AMENDMENT. In the event LICENSOR learns
during the Term or any renewal term that additional GM part
numbers/products in the GM Catalog Groups specifically identified on
ATTACHMENT D to this TWENTY SIXTH AMENDMENT are discontinued and eligible
for licensing, or a third party has made a bona fide offer to become
licensed on such GM part numbers/products, LICENSOR will advise LICENSEE of
the opportunity to exercise its Right of First Refusal and become licensed
thereto; LICENSEE shall expressly notify LICENSOR in writing (within 15
days of receiving notice from LICENSOR of the specific part number/product
license opportunity) of its intent to exercise its Right of First Refusal
thereon. If exercised, such part numbers/products will be added to the
AGREEMENT by amendment. LICENSEE'S rejection of the right, or failure to
timely respond in writing, shall allow LICENSOR to offer a license on such
part numbers/products to a third party.
11. Other than as specifically set forth in this TWENTY SIXTH AMENDMENT, the
AGREEMENT remains unchanged and of full force and effect; any conflict
between the AGREEMENT and this TWENTY SIXTH AMENDMENT shall be controlled
by this TWENTY SIXTH AMENDMENT.
GENERAL MOTORS CORPORATION, XXXXXX INDUSTRIES, INC.
SERVICE PARTS OPERATIONS
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxx X. Xxxx
------------------------ -------------------
Name: Xxxxxx X. Xxxxxx Name: Xxx X. Xxxx
Title:Manager, Trademark Licensing Title: Vice President
Date: May 7, 1997 Date: April 30, 1997
