LICENSE AGREEMENT
THIS LICENSE AGREEMENT is made and entered into this 1st day of July,
1996, by and between Xxxxx Xxxxxx Xxxxxxxxx, III (hereinafter referred to as
"Xxxxxxxxx") and Xxx Xxx (hereinafter referred to as "Fox") ("Xxxxxxxxx" and
"Xxx" sometimes individually and collectively referred to as "Licensor") and DCT
COMPONENT SYSTEMS, INC., a Michigan corporation whose address is 34660 Centaur,
Xxxxxxx Xxxxxxxx, Xxxxxxxx 00000 ("Licensee"):
W I T N E S S E T H:
WHEREAS, Licensor has been engaged in basic research regarding a
Push-In Sheet Metal Fastening System;
WHEREAS, Licensor has prepared, and is contemporaneously submitting to
the United States Patent and Trademark Office, a patent application for the
Subject Technology, as such term is defined below (hereinafter referred to as
"Patent Application");
WHEREAS, Licensor owns the full right, title and interest in the
Subject Technology disclosed in the above-mentioned Patent Application;
WHEREAS, Licensee is desirous of receiving an exclusive license to
make, use and sell the Subject Technology;
WHEREAS, Licensor is desirous of granting an exclusive license for such
Subject Technology to Licensee;
NOW, THEREFORE, for and in consideration of the promises and the mutual
agreements hereinafter set forth, the parties agree as follows:
Section 1. Definitions
(a) "Subject Technology" means devices or techniques relating
to a Push-In Sheet Metal Fastening System, as more fully described in the draft
of the Patent Application which is attached hereto as Exhibit A and any patents
that are issued as a result of the Patent Application and Improvements on such
Subject Technology.
(b) "Improvements" means any product or method, whether or not
patentable, which (i) incorporates any feature of the Push- In Sheet Metal
Fastening System, as more fully described in the attached Patent Application, or
(ii) is originated by or for Licensee and is derived from the Subject
Technology. A product or method is derived, for purposes of this Agreement, if
it follows reasonably from the Subject Technology. A product or
method is derived, for purposes of this Agreement, if it follows reasonably from
the Subject Technology.
(c) "Licensed Product" means any product or device which
consists of, incorporates, is made by, or uses Subject Technology.
(d) "Deductible Expenses" means the following items of expense
incurred in connection with sales of Licensed Products to the extent paid or
allowed by Licensee and included in accordance with recognized principles of
accounting in the gross sales price billed: (i) sales, use or turnover taxes;
(ii) excise taxes, custom duties or consular fees; (iii) trade or quantity
discounts to the extent actually granted; (iv) agent fees or commission and (v)
rebates, refunds, and credits for any returned Licensed Products.
(e) "Licensed Patents" mean patents that issue from the Patent
Application and/or relating to the Subject Technology.
Section 2. Grant of License.
(a) Licensor hereby grants to Licensee an exclusive license to
make, have made, and sell Licensed Products throughout the world. This license
is not transferrable by Licensee, but Licensee shall have the right to grant
written sublicenses hereunder, provided that:
(i) Licensee shall include all sales of Licensed
Products by its sublicensees in Licensee reports to Licensor, as provided in
Section 6 hereof, and Licensee shall pay royalties thereon to Licensor as though
all such sales were by Licensee hereunder;
(ii) Any such sublicense shall not be on any terms
less favorable to Licensor than the terms of this Agreement, and any such
sublicense shall be terminable, at Licensor's option, with termination of this
Agreement; and
(iii) Licensee shall furnish Licensor within thirty
(30) days of the execution thereof, a true and complete copy of each sublicense
and any changes or additions thereto, and shall assume full responsibility for
the payment of all royalties due Licensor on Licensed Products sold by any such
sublicensee; and
(iv) Licensor and Licensee each agree to bear one-
half (1/2) of the cost of any sublicense fees required pursuant to, or as a
condition precedent of, any such sublicense and will reimburse the party
responsible for payment of such sublicense fee for one-half (1/2) of such fees.
All such sublicenses must be in form and substance acceptable to the Licensor.
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(b) The exclusive license shall continue until the later of
(i) the expiration of any Patent that issues from the Patent Application, (ii)
the expiration of any Patent that issues on an Improvement, and (iii) twenty
(20) years from the date of this Agreement.
(c) In the event that the Licensor shall develop an
Improvement during the term of this Agreement, such Improvement shall be owned
by Licensor and shall be deemed to be "Subject Technology" under this License
Agreement. Licensee agrees to execute any document reasonably requested by
Licensor to reflect and/or confirm Licensor's ownership of such Improvement.
(d) In the event that the Licensee shall develop an
Improvement during the term of this Agreement, such Improvement shall be owned
by Licensee, but shall otherwise be deemed to be "Subject Technology" under this
License Agreement. Licensor agrees to execute any document reasonably requested
by Licensee to reflect and/or confirm Licensee's ownership of such Improvement.
Section 3. Patent Expenses.
(a) Licensee shall advise Licensor no later than nine (9)
months after a United States patent issues if Licensee wants to file
corresponding foreign applications and shall at that time designate countries.
Licensee shall reimburse Licensor for all reasonable patent expenses associated
with foreign filings including attorney fees, Patent Office fees and maintenance
fees. Licensee shall have the right to select counsel, subject to Licensor
concurrence.
(b) In the event Licensor does not elect to retain title to an
invention relating to the Subject Technology, then title to such invention shall
be offered by Licensor to Licensee.
Section 4. Royalty Payments.
(a) Starting from the date of this Agreement and for the full
term of the exclusive patent license granted under Section 2, unless otherwise
mutually agreed, Licensee shall pay to Licensor patent royalty payments on the
basis of (i) three percent (3%) of the gross receipts after deductible expenses
for all Licensed Products sold by Licensee, its agents, its distributors,
sublicenses or related companies, in the event that no Patent issues from the
Patent Application, and (ii) five percent (5%) of the gross receipts after
deductible expenses for all Licensed Products sold by Licensee, its agents, its
distributors, sublicenses or related companies, if a Patent does issue from the
Patent Application and/or on any Improvement.
(b) Licensor shall receive one-half of any sublicensing fees
Licensee shall receive for the granting of a sublicense for such Subject
Technology.
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Section 5. Unlicensed Manufacture, Use or Sale by Infringers.
(a) In the event either Licensee or Licensor discovers any
unlicensed manufacture, use or sale of Licensed Products, the other party shall
be promptly notified of such infringement. Licensee may, at its own option and
at its own expense, through attorneys of its own election, take appropriate
action to terminate or prevent the infringement provided, however, that Licensee
may not bring an action nor enter into any settlement agreement with an accused
infringer without prior written approval of Licensee, which approval will not be
unreasonably withheld. Licensor agrees to be joined as a party plaintiff to any
such action. If Licensee takes no action within ninety (90) days of the
discovery of the infringement, then Licensor, at its option, may take such
action as it deems appropriate.
(b) Licensor shall not be obligated to bring suit for
infringement, nor have any responsibility for taking or defending any action
whatsoever, against or by infringers or alleged infringers; provided, however,
that Licensor shall have the right and option upon giving of written notice to
Licensee, to participate in any such action, to contribute funds to the
prosecution of such action, and to be represented by counsel. Furthermore,
Licensor shall not be obligated to defend the Licensed Patents or any claim
thereof against challenge or attack by any third party in the United States
Patent and Trademark Office or the courts or elsewhere.
(c) If Licensor engages in litigation or otherwise incurs
expense in order to terminate infringement and receives any money by way of
damages, license or otherwise as a result of such action, all monies recovered
shall belong to Licensor. If Licensor and Licensee jointly engage in litigation
or otherwise incur expense in order to terminate infringement and receive any
money by way of damages, license or otherwise as a result of such action, then
to the extent that such money exceeds the expense involved of each party, the
excess shall be shared pro-rata based on actual expenses of the parties. In the
event the monies received does not exceed the respective parties expenses
incurred, the monies shall be shared pro-rata based on actual expenses of the
parties. If Licensee engages in litigation or otherwise incurs expense in order
to terminate infringement and receives any money by way of damages, license or
otherwise as a result of such action, Licensee shall be entitled to the entire
amount of monies received by Licensee and Licensor shall not be entitled to any
of the monies so received.
Section 6. Records, Reports and Payments
(a) Licensee shall keep records and books of account in
respect of all Licensed Products made and sold by Licensee under this Agreement,
including records showing the receipts and collections for such sales, and
Licensee shall require the same in
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respect to sales by its distributors agents, and related companies. Licensor
shall have the right, during business hours, to examine, or to have its
designated auditors examine, such records and books of account, and Licensee
shall keep the same for at least three years after it pays Licensor the
royalties due for such Licensed Products and require related companies to do the
same.
(b) On or before the twentieth day of each January, April,
July and October after the effective date of this Agreement, Licensee shall
render to Licensor a report in writing, setting forth the number of units of
Licensed Products manufactured and the number of units sold during the preceding
calendar quarter by Licensee and its distributors, agents and related companies,
and also setting forth all information necessary to determine the royalties
payable hereunder, such report to be accompanied by payment of the royalties
shown by said report and monies received by Licensee during the preceding
calendar quarter and due Licensor. The report is to be certified as true and
accurate by an officer of Licensee.
Section 7. Termination.
(a) (i) If the Licensor or the Licensee breach any of their
obligations hereunder, the other party shall have the right to terminate this
Agreement and the license granted hereunder by giving the breaching party sixty
(60) days written notice thereof, provided, however, that if the breaching party
cures the breach within such sixty (60) day period, this Agreement shall
continue in full force and effect. After any termination under this Section,
Licensee agrees not to make, have made, use, or sell anything which would, if
this license had not been terminated, be subject to royalty under Section 4
hereof, until the expiration of the last to expire patent of Subject Technology
and shall impose a similar requirement on its sublicensees hereunder.
(ii) In addition, the non-breaching party shall have all
rights and remedies available in law or equity, including injunctive relief, and
the breaching party shall be liable for all costs and expenses, including
reasonable legal fees, incurred as a result of a material breach of this
Agreement. And provided further, nothing contained herein shall be interpreted
to prevent Licensee from utilizing non-infringing alternatives to the Subject
Technology following any termination under this Section.
(b) No termination of this Agreement shall relieve Licensee of
the liability for payment of any royalty due for Licensed Products made prior to
the effective date of such termination.
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Section 8. Negotiation of Warranties, Implied Licenses and Agency.
(a) Nothing in this Agreement shall be construed as:
(i) a warranty or representation by Licensor as to
the validity or scope of Subject Technology or any claim thereof; or
(ii) a warranty or representation that anything made,
used, sold, or otherwise disposed or hereunder is or will be free from
infringement of rights of third parties provided, however, to the extent that it
is determined that the Subject Technology as incorporated into the Licensed
Products infringes the rights of third parties, any monies paid as a result of
the infringement as to third parties, as well as all costs and expenses,
including actual attorneys fees, shall be offset against royalties due
hereunder; or
(iii) an obligation to bring or prosecute actions or
suits against third parties for infringement; or
(iv) conferring by implication, estoppel or
otherwise, any license or rights under any patents of Licensor other than the
Subject Technology, regardless of whether such other patents are dominant or
subordinate to Subject Technology.
(b) LICENSOR MAKES NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(c) Licensor and Licensee are independent parties in this
Agreement. Accordingly, there is no agency relationship between Licensor and
Licensee under this Agreement with respect to any products made or sold, or any
methods used, by Licensee under this Agreement.
Section 9. Miscellaneous.
(a) Licensee agrees that it will not use the name of Xxxxxxxxx
and/or Fox in any advertising or publicity material, or make any form of
representation or statement which would constitute an express or implied
endorsement by Xxxxxxxxx and/or Fox of any commercial product or services, and
that it will not authorize others to do so, without first having obtained
written approval from Licensor.
(b) Licensee agrees to xxxx the appropriate U.S. patent number
or numbers on all Licensed Products made under this Agreement and to require its
sublicensees to do the same.
(c) Licensee agrees that Licensor shall have no liability to
Licensee or to any purchasers or users of Licensed
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Products made or sold by Licensee for any claims, demands, losses, costs, or
damages suffered by Licensee, or purchasers or users of Licensed Products, or
any other party, which may arise out of the manufacture, use, or sale of such
Licensed Products, and Licensee agrees to defend, indemnify, and hold harmless
Licensor, its respective trustees, officers, agents, and employees from any such
claims, demands, losses, costs, or damages.
(d) This Agreement includes all the agreements of the parties
in respect to the subject matter hereof. No claimed oral agreement in respect
thereto shall be considered as any part hereof. No waiver of or change in any of
the terms hereof subsequent to the execution hereof claimed to have been made by
any representative of either party shall have any force or effect unless in
writing, signed by duly authorized representatives of the parties.
(e) This agreement shall be binding upon and inure to the
benefit of any successor or assignee of Licensor. This Agreement is not
assignable by Licensee or by operation of law without the prior written consent
of Licensor except that Licensee may assign the Agreement to any successor of
its business, or purchaser of substantially all of the assets of its business,
to which this Agreement pertains. Should Licensee be declared bankrupt following
the filing of a petition in bankruptcy, be declared insolvent or execute an
assignment for the benefit of creditors, or should a receiver or trustee by
appointed by any court or government agency to administer the affairs and assets
of Licensee, then, in that event, this Agreement shall become terminated, unless
the receiver, or trustee, or other assignee, at the time of the assumption of
this Agreement: (i) cures defaults, if any, or gives reasonable assurance that
any such defaults will be timely cured; and (ii) provides adequate assurance of
future performance under this agreement.
(f) This Agreement shall be deemed to have been entered into
in the State of Michigan and shall be construed and enforced in accordance with
Michigan law.
(g) As to any royalty payments to be paid to Licensor
hereunder, such payments shall be paid to Fox and Xxxxxxxxx as follows:
(i) In the event no Patent issues, the first one
percent (1%) Royalty shall be paid to Fox with the balance of two percent (2%)
Royalty to Xxxxxxxxx;
(ii) In the event that a Patent issues, the first one
and one-half percent (1 1/2%) Royalty shall be paid to Fox with the balance of
three and one-half percent (3 1/2%) Royalty to Xxxxxxxxx.
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(h) Any notice or communication required or permitted to be
given or made under this agreement shall be addressed as follows:
LICENSOR: "Xxxxxxxxx"
Xxxxx Xxxxxx Xxxxxxxxx, III
DCT Companies, Inc.
00000 Xxxxxx xxxx
Xxxxxxx, Xxxxxxxx 00000
"Fox"
Xxx Xxx
-------------------------------
LICENSEE: DCT COMPONENT SYSTEMS, INC.
00000 Xxxxxxx
Xxxxxxx Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxx
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
WITNESSES: "Xxxxxxxxx"
/s/ A. Xxxxxxxx Xxxxxx /s/ Xxxxx Xxxxxx Xxxxxxxxx, III
------------------------ -------------------------------
/s/ Jan C. Chinurt Xxxxx Xxxxxx Xxxxxxxxx, III
------------------------
"Fox"
------------------------ -------------------------------
/s/ Xxxxx X. Xxxxx Xxx Xxx
------------------------
"Licensee"
DCT COMPONENT SYSTEMS, INC.,
a Michigan corporation
/s/ Xxxxx Xxxxx Xxxx
------------------------ -------------------------------
/s/ Xxxxx X. Xxxxx By: Xxxxx Xxxxx Xxxx
------------------------ Its: President
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