EXHIBIT 10.11
AGREEMENT
The present agreement is entered into by and between :
COMPAGNIE EUROPEENNE DE COMPOSANTS ELECTRONIQUES - LCC a French Corporation
having its registered office at 00, xxx Xxxx-Xxxxxx Xxxxxxx 00000 XXXXXXXXXX,
XXXXXX, Represented by Mr Louis AGNERAY, Chairman of the Board, hereinafter
referred to as "LCC",
AND
XXXXXXX LABORATORIES INC. An US corporation having its registered office at 8888
BALBOA Avenue, SAN DIEGO, CALIFORNIA, USA, Represented by Xx Xxxx X. XXXX,
Chairman and CEO, hereinafter referred to as "XXXXXXX",
LCC and XXXXXXX being hereinafter referred to individually as "Party" and
collectively as "Parties".
SUMMARY
ARTICLE 1 DEFINITIONS
ARTICLE 2 PURPOSE
ARTICLE 3 TECHNICAL DOCUMENTATION - TECHNICAL KNOW-HOW
SERVICES
ARTICLE 4 IMPROVEMENTS
ARTICLE 5 PRICE
ARTICLE 6 XXXXXXX UNDERTAKINGS
ARTICLE 7 SUPPLY OF THE LICENSED PRODUCT
ARTICLE 8 QUALITY OF THE LICENSED PRODUCT MANUFACTURED BY
XXXXXXX
ARTICLE 9 WARRANTY OF THE LICENSED PRODUCT MANUFACTURED BY
XXXXXXX
ARTICLE 10 STEERING COMMITTEE
ARTICLE 11 FORCE MAJEURE
ARTICLE 12 WARRANTY ON THE KNOW HOW AND ON THE PATENT
ARTICLE 13 INFRINGEMENT
ARTICLE 14 CONFIDENTIALITY
ARTICLE 15 COMING INTO FORCE - DURATION
ARTICLE 16 TERMINATION.
ARTICLE 17 EFFECTS OF TERM AND TERMINATION
ARTICLE 18 AUTHORIZATIONS - TAXES, LEVIES AND DUTIES
ARTICLE 19 REPRESENTATION
ARTICLE 20 APPLICABLE LAW - SETTLEMENT OF DISPUTES
ARTICLE 21 PUBLICITY - ANNOUNCEMENT
ARTICLE 22 MISCELLANEOUS
APPENDIX 1 LICENSED PRODUCT
APPENDIX 2 KNOW-HOW PATENT
APPENDIX 3 EXCLUSIVE SUPPLY AGREEMENT
APPENDIX 4 COST PRICE FORECASTS - SALE PRICE OF THE LICENSED
PRODUCT
APPENDIX 5 DELIVERY LEAD TIME
APPENDIX 6 QUALITY REQUIREMENTS
APPENDIX 7 TEST PROCEDURE FOR QUALIFICATION OF THE LICENSED
PRODUCT
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PREAMBLE
WHEREAS LCC is a company which conceives, develops, manufactures and sells
throughout the entire world passive components,
WHEREAS LCC has in particular conceived and developed capacitors for medium DC
voltage filtering applications and LCC owns technologies, technical information
and patent rights in relation to such capacitors ;
WHEREAS XXXXXXX is a company with great capacity and experience in the field of
passive components which XXXXXXX manufactures in its US premises together with
power supply and auxiliary equipment for various applications, such equipment
integrating components and in particular passive ones ;
WHEREAS XXXXXXX is willing to manufacture in its plant in California the above
referred LCC's capacitors and for such purpose to obtain a license of use of
related technology ;
WHEREAS LCC is interested in having its above referred capacitors manufactured
in the USA for distributing the same through its US affiliated company in the
territory of North America, thereby allowing customers to benefit from
attractive conditions, in particular in terms of price ;
WHEREAS XXXXXXX is willing to act as manufacturer of LCC's capacitors to supply
LCC's US affiliated company which possesses experience and expertise in the
distribution of components ;
WHEREAS the Parties executed on September 14, 1993 a non disclosure agreement -
to protect proprietary information exchanged by and between themselves during
their preliminary discussions on their possible cooperation as described above ;
WHEREAS the Parties are both today convinced that their respective experience,
skill and competence allow them to cooperate to their mutual benefit as well as
to the benefit of all concerned potential customers ;
WHEREAS the Parties have decided to conclude the present agreement in order to
define the terms and conditions under which LCC is willing to grant license on
its technology on LCC's capacitors, as specifically hereinafter defined, to
XXXXXXX for manufacture of the same by XXXXXXX for supply to LCC's affiliated
company in the USA and distribution by this latter and also possible supply by
XXXXXXX to LCC.
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NOW THEREFORE IT IS AGREED AS FOLLOWS :
ARTICLE 1 - DEFINITIONS
The following terms shall mean :
"Agreement" : the present text including its preamble and its appendices 1
to 7 which form an integral part thereof.
"Licensed Product" : the biologic oil impregrated, selfhealing, metallized
polypropylene dielectric capacitor for medium DC voltage and resonance filtering
applications.
The detailed description and range of the Licensed Product is given in
Appendix 1 hereto.
"Know-How" : shall mean any technical process or data, including
engineering, developing, designing and assembly information, drawings,
performance specifications, material specifications, tests specifications
belonging to LCC which are necessary for the manufacture, repair and maintenance
of the Licensed Product as defined in the Technical Documentation and Technical
KnowHow Services.
"Technical Documentation" : shall mean the written support of the Know-how
as defined in this Agreement.
"Technical Know-How Services" : shall mean collectively the training and
technical assistance to be provided by LCC to XXXXXXX as per Article 3 hereof.
"Patent" : the patent ref. 9008227 issued on June 29, 1990 a copy of which
is attached hereto as Appendix 2, applied by LCC in the territories defined in
same Appendix to protect the Licensed Product.
"Affiliate" : any legal entity in which LCC or LCC's mother company holds
directly or indirectly fifty per cent or more of the voting stock or of the
rights entitling to elect a majority of the members of the board of such entity,
it being understood that LCC's mother company designates the company which
itself holds directly or indirectly fifty per cent or more of LCC's voting
stock.
"US Affiliate" : the Affiliate located in the USA, i.e. THOMSON PASSIVE
COMPONENTS CORPORATION having its registered office at 0000, Xxxx Xxxxxx,
Xxxxxxxxxx, XX - 00000 XXXXXXXXXX, XXX.
"NDA" : the non disclosure agreement referred to in the preamble hereof.
"Territory" : collectively the territories of the USA, Canada and Mexico.
The above definitions are without prejudice to other definitions given in
this Agreement herebelow.
ARTICLE 2 - PURPOSE
2.1. The purpose of this Agreement is to define the terms and conditions under
which :
- XXXXXXX agrees to be the exclusive supplier of the US Affiliate (or of any
other Affiliate in the Territory upon demand of LCC) for the Licensed Product
in the Territory and to supply LCC, on an exclusive basis, with the Licensed
Product manufactured by it with the Know-How and the Patent according to
orders which may be placed under this Agreement by LCC for purchase of
Licensed Product for resale in any country in the world with the exclusion of
the Territory.
- LCC grants for the abovementioned purpose to XXXXXXX which accepts :
- a non transferable license of the Know-How for the purpose of manufacturing
the Licensed Product in the USA and selling, repairing and maintaining the
Licensed Product in the Territory ;
- a non transferable right and license under the Patent to manufacture, sell,
repair and maintain the Licensed Product in the USA ;
The above right and licenses are exclusive as such exclusivity is defined in
Articles 2.2. and 2.3. below.
The above right and licenses are granted without the right to sublicense.
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2.2. No right is hereby given to XXXXXXX with respect to the manufacture of the
Licensed Product outside the USA.
Furthermore, it is expressly understood that such right and licenses granted to
XXXXXXX extend only to XXXXXXX'x plant in California and do not include any
right in XXXXXXX to utilize the Know-How and Patent for additional manufacturing
facilities or other plants.
As a consequence of the exclusive right of manufacture of the Licensed Product
granted to XXXXXXX, LCC shall not during the term of this Agreement grant any
right of manufacture under the Know-How and the Patent to any third party in the
Territory.
2.3. The right and licenses on the Know-How and under the Patent for sale,
repair and maintenance of the Licensed Product in the Territory are
exclusive, it being understood that :
- XXXXXXX has no right to sell, repair and maintain the Licensed Product outside
the Territory save upon express demand of LCC through appropriate orders as
set forth in Article 2.1. above, LCC having the right to grant any such right
and licenses to any third party outside the Territory and more generally to
dispose of the Licensed Product outside the Territory for its sale, repair and
maintenance, directly or indirectly ; furthermore right and licenses on the
Know-How and under the Patent for sale, repair and maintenance of the Licensed
Product in the Territory granted by LCC to any third party before coming into
force of this Agreement shall not be considered as a breach of the exclusivity
granted to XXXXXXX hereunder;
- LCC agrees not to sell, repair and maintain the Licensed Product directly in
the Territory save in cases where (i) any customer in the Territory requests
from LCC the Licensed Product manufactured by LCC before qualification of the
Licensed Product or (ii) any customer in the Territory requests the Licensed
Product manufactured by LCC due to LCC being certified ISO and then before
XXXXXXX is certified ISO or (iii) LCC sells, repairs and/or maintains Licensed
Products supplied to any customer in the Territory under orders placed before
qualification of the Licensed Product or XXXXXXX being certified ISO or (iv)
XXXXXXX is in default in the supply of the Licensed Product to the US
Affiliate or any other Affiliate in the Territory.
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- the US Affiliate (as well as any other Affiliate in the Territory which could
be designated by LCC to distribute the Licensed Product) shall freely
distribute the Licensed Product and as a consequence sell, repair and maintain
it in the Territory, provided it procures the Licensed Product from XXXXXXX
save in the (iv) case as set forth in the above paragraph.
2.4. As a consequence of the exclusivity granted to XXXXXXX, XXXXXXX agrees
during the term of this Agreement not to manufacture in the USA and not to
market in the Territory products similar to the Licensed Product (as
defined in 17.3).
ARTICLE 3 - TECHNICAL DOCUMENTATION - TECHNICAL KNOW-HOW SERVICES
The transfer of the Know-How by LCC to XXXXXXX shall be performed through :
- the sending of the Technical Documentation,
- the performance of the Technical Know-How Services.
3.1. TECHNICAL DOCUMENTATION
LCC shall establish a full set of the Technical Documentation in the English
language and deliver it, together with a copy of the French original version, in
two (2) copies to XXXXXXX within two (2) months of the date of coming into force
of this Agreement.
It is understood that the Technical Documentation shall be in the form used by
LCC, i.e. in metric system and in accordance with French industrial standards.
It is furthermore understood that the translation of the Technical Documentation
from French to English is not a certified translation and that it shall be the
responsibility of XXXXXXX to have such translation certified if it so desires.
The delivery shall take place in accordance with the CIP Incoterm (according to
the international commercial terms ("Incoterms(s)") of the International Chamber
of Commerce, 1990 edition).
The Technical Documentation shall be considered as confidential information and
treated as such by XXXXXXX in accordance with the provisions of Article 14
hereof.
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3.2. TECHNICAL RNOW-HOW SERVICES
A. TRAINING AT XXXXXXX
(i) After expiry of a four month period of time from the date of coming into
force of this Agreement, and at a date mutually agreed upon by the Parties
and taking into account French and US legal holidays, LCC shall provide
XXXXXXX with training in XXXXXXX'x plant at the address of its registered
office.
The training shall consist of one session by two employees of LCC to train
XXXXXXX'x personnel (up to five people) to the use of the Know-How and
understanding of the Technical Documentation for an agreed period of time, it
being understood that the training shall in no case exceed twenty man/day.
(ii) The training is conditional upon having all manufacturing equipment for
the Licensed Product in place and good working order as set forth in
Article 6 below.
(iii) XXXXXXX shall provide free and complete access to its plant to the LCC
personnel assigned to the training and shall also provide all reasonable
assistance to them regarding any authorization required under any US law,
rule and/or regulation for their coming and stay in the USA.
Furthermore XXXXXXX shal1 make available free of charge to LCC's training
personnel telex and phone facilities as well as one office.
(iv) LCC shall bear all expenses and costs incurred by its personnel in
connection with the training.
(v) LCC's personnel assigned to the training will have to comply with the
security regulations in force in XXXXXXX'x plant.
B. TRAINING AT LCC
(i) After expiry of a two month period from the coming into force of this
Agreement and delivery of the Technical Documentation, and at a date
mutually agreed upon by the Parties, LCC SHALL PROVIDE XXXXXXX with
training in LCC's plant in Dijon to show LCC's production line of the
Licensed Product.
The training shall consist of one session for one person and not exceed one week
in duration and shall include explanation of the Technical Documentation.
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(ii) XXXXXXX shall bear all expenses and costs incurred by its personnel in
connection with the training.
(iii) XXXXXXX'x employee assigned to the training will have to comply with
the security regulations in force in LCC's plant.
C. TECHNICAL ASSISTANCE
UPON written request of XXXXXXX, LCC agrees to provide it with technical
assistance.
All conditions pertaining to the technical assistance SHALL be mutually agreed
upon by the Parties, it being already agreed and understood that :
- the technical assistance shall take place in XXXXXXX'x plant and the
provisions of Article 3.2a subparagraphs (ii), (iii), (iv) and (v) shall
apply to it,
- accommodation and living expenses of LCC's personnel assigned to the
technical assistance shall be borne by XXXXXXX.
The price of the first level of technical assistance, i.e. limited to the
assistance of one LCC's technician, once a calendar year and for a duration of
five days in a row, SHALL be deemed included in the price mentioned in Article
5.1.. For other levels of assistance, the price shall be mutually determined by
the Parties.
ARTICLE 4 - IMPROVEMENTS
4.1. Should improvements to the Know-How and/or to the Patent be realized
by LCC during the term of this Agreement, LCC shall inform accordingly
XXXXXXX.
In such case, the right and license granted to XXXXXXX hereunder shall extend to
such improvements and the Parties shall meet to examine any modifications to
this Agreement which could be necessary in relation thereto.
Nothing herein shall be construed as compelling LCC to realize any such
improvements.
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4.2. Should improvements to the Know-How and/or the Patent be realized by
XXXXXXX during the term of this Agreement, XXXXXXX expressly agrees to
irrevocably tranfer to LCC any and all information relating thereto and to grant
to LCC, should LCC ask for it, an irrevocable, non exclusive, royalty free right
and license to use such improvements, with right to sublicense the Affiliates.
However, both Parties acknowledge that XXXXXXX is currently working on
development of new materials and has initiated such work before coming into
force of this Agreement. Such material development if applied to the Licensed
Product shall remain the sole property of XXXXXXX and the above referred license
not apply to it, provided XXXXXXX proves by all appropriate means that related
development works have been done without any use of the Know-How and of the
Patent.
ARTICLE 5 - PRICE
5.1. In consideration for the right and licenses granted to it hereunder,
XXXXXXX agrees to pay to LCC :
- a license fee amounting to the lump sum of 1 600 000 (one million six hundred
thousand) French Francs ;
- a royalty amounting to four (4) per cent of the turnover realized by XXXXXXX
for its activities of sale of the Licensed Product.
The above amounts exclude any amount which may be due to LCC in the future for
technical assistance above the first level as defined in Article 3.
5.2. The license fee shall be paid as follows :
(i) fourteen per cent (14 %), i.e. 224 000 (two hundred twenty four thousand)
French Francs upon execution of this Agreement ;
(ii) fourteen per cent (14 %), i.e. 224 000 (two hundred twenty four thousand)
French Francs upon sending of the Technical Documentation and completion
of training ;
(iii) twenty per cent (20 %), i.e. 320 000 (three hundred twenty thousand)
French Francs upon expiry of a one year period of time from the date of
first order of the Licensed Product being placed with XXXXXXX and provided
that during such one year period the total amount of orders of the
Licensed Product placed by LCC and the US Affiliate with XXXXXXX reaches
four hundred thousand (400 000) US dollars.
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Should such amount of booking orders be not reached, the 20 % instalment shall
be reduced in proportion to the amount of booking orders actually reached and
payment the remaining part of it be postponed at the date of payment of the last
instalment of 52 % as mentioned below.
(iv) fifty two (52) per cent, i.e. 832 000 (eight hundred thirty two thousand)
French Francs (plus, as the case may be, payment of the remaining part of
the 20 % instalment as set forth above) at the end of a two year period of
time from the date of first order of the Licensed Product being placed with
XXXXXXX and provided that during the second year of this two year
period,the total amount of orders of the Licensed Product placed by LCC and
the US Affiliate with XXXXXXX reaches one (1) million US Dollars.
In case that the amount of booking orders for the two year period of time is
between 50 % and 80 % of the 1,4 million US dollars booking orders target, then
the two year period of time shall be increased by six months, the target
remaining unchanged and payment of the 52 % instalment postponed accordingly. At
the end of this additional period, payment of the 52 % instalment shall be
apportioned to the amount of booking orders actually made during the second year
and a half of the two year and a half period of time.
In case that the amount of booking orders for the two year period of time is
above 80 % of the 1,4 million US dollars booking orders target, then payment of
the 52 % instalment shall be apportioned to the amount of booking orders
actually made during the second year of this two year period of time.
In case that the amount of booking orders for the two year period of time is
less than 50 % of the 1,4 million US dollars booking orders target, the 52 %
instalment shall become a 26 % instalment of the sum mentioned in the first
paragraph of (iv). Furthermore the Parties agree that for an additional three
year period, the average booking order per year shall amount to 500 000 US
dollars. If at the end of this three year additional period, the average amount
per year is not reached, then the Parties agree that their relationships under
this Agreement shall turn into that of non exclusive ones and consequently :
- the right and licenses granted to XXXXXXX on the KnowHow and the Patent shall
be non exclusive, LCC having the right to grant any third party any right of
manufacture of the Licensed Product under the Know-How and the Patent in the
Territory and to sell, maintain, repair and more generally dispose of the
Licensed Product in the Territory, directly or indirectly ;
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- XXXXXXX shall no more be the exclusive supplier of the US Affiliate and shall
have the right to commercialize directly the Licensed Product to any customer
in the Territory.
In such case XXXXXXX and the US Affiliate will modify accordingly their
exclusive supply agreement so that it becomes non exclusive and that the US
Affiliate be free to purchase the Licensed Product from any third party and
XXXXXXX be free to sell the same to any third party.
- however XXXXXXX shall remain the supplier of LCC, on a non exclusive basis,
XXXXXXX having no right to dispose of the Licensed Product outside the
Territory save for sale to LCC.
- the amount of the royalty shall become 2 (two) per cent of the turnover
realized by XXXXXXX for its activities of sale of the Licensed Product.
- the commitment of XXXXXXX under Article 2.4. shall no more be applicable.
(v) The license fee shall not be refundable even in case of termination
under Article 16(b).
5.3.
a. The royalty shall be paid as follows within forty five (45) days of each
semester, and for the first time for the first semester of year 1995 and
XXXXXXX shall send to LCC a report indicating for the concerned semester :
- the number of manufactured Licensed Products sold, the name of the concerned
customers (including LCC and the US Affiliate) and the selling prices
identifying clearly the price of the Licensed Product when the latter is
integrated in a power supply or auxiliary equipment manufactured and sold by
XXXXXXX in case that the relationships between the Parties turn into non
exclusive ones as set forth in 5.2 (iv) above ;
- the amount of royalties due for such semester.
XXXXXXX shall keep relevant records with sufficient details relating to the
manufacture, sale, maintenance and repair of the Licensed Product in order to
enable LCC to verify the payments o' royalties due by XXXXXXX.
LCC shall have the right to examine or have examined such records by an expert
or to delegate such right to the US Affiliate, at least once a year with a
thirty (30) day prior written notice to XXXXXXX.
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b. The royalties shall be paid in US dollars and calculated by applying the
percentage of royalty to the sales prices.
For such purpose and for sales which would be made in the Territory outside the
USA, the sales price in Canadian dollars or in Mexican currency shall be
converted in US currency using exchange rate between Canadian dollars (or
Mexican currency) quoted at NEW YORK Foreign Exchange Market at the date of
placing of the concerned order(s).
5.4. Each payment from XXXXXXX shall be made by wire transfer to LCC's
account number 31489 00010 00038620356 47, Receiving Bank : INDOSUEZ BANK,
00 xxx xx Xxxxxxxxxx, 00000 Xxxxx, XXXXXX.
ARTICLE 6 - XXXXXXX UNDERTAKINGS
In addition to any of its obligations hereunder, XXXXXXX shall :
- carry out in its plant all necessary investments to enable it to manufacture
the Licensed Product at a competitive price ;
- having great expertise in the field of components, put in place a production
line of the Licensed Products at least four (4) months from the date of
coming into force of this Agreement and immediatly start the manufacture of
twelve samples of the Licensed Product to be sent free of charge to LCC for
test by this latter which shall keep six of them and send free of charge the
remaining six to XXXXXXX if the test procedure as described in Appendix 7 is
positive and consequently the Licensed Product is qualified ;
- not sell and/or permit the sales of the Licensed Product outside the
Territory save as provided for in Article 7.2. below,
- put in place and maintain a production line of the Licensed Product so that
the production capacity for the Licensed Product reaches 2 000 (two
thousand) units of Licensed Products at least per calendar year, such
production capacity being reviewed each year by the Parties through the
Steering Committee ;
- put into practice the Know-How and the Patent as well as any improvements
thereto as set forth in Article 4.1. ; with respect to improvements made by
XXXXXXX as per Article 4.2., XXXXXXX shall receive LCC's approval before
putting the same into practice ;
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- conclude with the US Affiliate the exclusive supply agreement in the form
attached hereto as Appendix 3 ;
- maintain a competitive cost price of the Licensed Product in accordance with
the forecasts which form Appendix 4 hereof,
- comply with the delivery lead time of the Licensed Product per quantity
ordered as described in Appendix 5 hereof.
ARTICLE 7 - SUPPLY OF THE LICENSED PRODUCT
7.1. As set forth in Articles 2 and 6 hereof, with respect to the sale of
the Licensed Product, in the Territory, XXXXXXX shall be the exclusive
supplier of the US Affiliate through the execution of the exclusive supply
agreement attached hereto and LCC shall cause its US Affiliate to enter
into such agreement at the date of qualification of the Licensed Product.
In case that LCC elects to designate another Affiliate in the Territory to
distribute the Licensed Product, it shall inform XXXXXXX accordingly and XXXXXXX
shall enter with such Affiliate into a supply agreement using the same form as
the one attached hereto in Appendix 3.
The exclusive supply agreement between XXXXXXX and the US Affiliate would be
modified to take into account any such new supply agreement.
7.2. As set forth in Article 2, LCC may order from XXXXXXX the Licensed
Product.
In such case, the following ordering procedure shall apply.
(a) Request for quotation shall be issued by LCC, referencing this Agreement
and sent to XXXXXXX.
Each request for quotation shall indicate the quantities of Licensed Product to
be ordered, the delivery place, the requested delivery date, the specifications
asked by the customer, the means of transportation, the special packing methods
if any, drop shipment if required.
XXXXXXX shall send its quotation at least fifteen days from receipt of the
request of quotation, indicating in particular the price of the Licensed Product
calculated in accordance with the rules set forth in Appendix 4.
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However in the event of a specific sale which cannot be supported by the normal
price list as defined in the above referred Appendix 4, LCC shall identify such
sale in its request for quotation and XXXXXXX shall do its best efforts to
propose a sale price allowing to maintain the competitivity of the Licensed
Product for such specific sale.
If the quotation is acceptable, LCC shall then issue a firm purchase order
stating all conditions accepted by the Parties.
It is agreed and understood that all purchase orders shall be governed by the
terms and conditions of this Agreement and that neither the general conditions
of sale of XXXXXXX nor the general conditions of purchase of LCC shall apply to
them.
(b) All Licensed Products ordered shall be delivered Free Carrier ("FCA") San
Diego according to the Incoterms.
Unless LCC gives specific instructions in its purchase order for transportation,
XXXXXXX will select the most economical and secured method and route of shipment
and forward shipment collect or ship the Licensed Products prepaid and invoice
LCC for transportation charges depending upon the best method for each shipment.
Transfer of risks and title to the Licensed Products shall vest in LCC upon
their delivery as defined in the FCA Incoterm by XXXXXXX into the custody of the
carrier named by LCC or chosen by XXXXXXX as set forth above.
However XXXXXXX agrees to provide assistance to LCC, upon this latter's demand,
in case of damage, breakage or delay due to the carrier.
(c) All Licensed Products ordered shall be packed in accordance with LCC's
requirements.
Prices include the cost of standard packing.
Additional packing expenses for special packing for meeting LCC's requirements
will be invoiced to LCC.
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(d) Marking
All Licensed Products shall be marked with LCC brand name and logos as such will
be communicated by LCC to XXXXXXX.
The origin of manufacture of the Licensed Product shall also be indicated on it
in a form mutually agreeable to the Parties.
(e) Payment
Payment of the Licensed Products ordered and delivered shall be made by LCC
within forty five days of delivery and upon receipt of appropriate invoice to
XXXXXXX by wire transfer to:
Receiving Bank: Sanwa bank of California 0000 Xxxxxx Xxxxxx Xxx Xxxxx, XX 00000,
XXX
Bank ABA 000000000
Beneficiary name XXXXXXX Laboratories, Inc.
Beneficiary Acct 271101191
(d) Termination of a purchase order
In case of delay in delivery superior to thirty days LCC shall have the right to
terminate by operation of law and without demand the concerned purchase order.
Such termination shall not affect the validity of other orders or of this
Agreement nor shall it affect the right of LCC for remedies and/or termination
of this Agreement itself.
ARTICLE 8 - QUALITY OF THE LICENSED PRODUCT MANUFACTURED BY XXXXXXX
8.1. XXXXXXX having great expertise and capacities in the field of components,
XXXXXXX shall manufacture the Licensed Product so that in all respects it
meets the technical specifications and the quality requirements as laid
down in Appendix 6 attached hereto.
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XXXXXXX shall implement the compatibility test as defined in the Technical
Documentation in order to verify the compatibility of the impregnated,
dielectric and metallization elements of the Licensed Product.
XXXXXXX'x supply sources for these elements shall in any case comply with the
raw materials specifications as defined in the Technical Documentation.
A quality control of the Licensed Product shall be performed by XXXXXXX during
the manufacturing process and a lot acceptance sheet in the form attached in the
above referred Appendix t"Lot Acceptance Sheet") shall be supplied by XXXXXXX
with each Licensed Product delivered evidencing that the Licensed Product MEETS
THE ABOVE referred requirements.
XXXXXXX hereby guarantees LCC that all Licensed Products will always be
controlled as set forth above and that they always can be used without the need
of any further control by the purchasing party.
XXXXXXX shall ensure a complete traceability of any item of Licensed Product
mentioned in each Lot Acceptance Sheet and relevant Licensed Product packing.
XXXXXXX undertakes towards LCC not to alter or modify the quality of the
Licensed Product without prior written consent of LCC.
8.2. XXXXXXX shall apply for being certified according to the ISO 9002
rules and more generally do all that is necessary to obtain such
certification no later than three years after coming into force of this
Agreement.
ARTICLE 9 - WARRANTY OF THE LICENSED PRODUCT MANUFACTURED BY XXXXXXX
FOR EACH Licensed Product it will manufacture and supply to LCC or to the US
Affiliate, XXXXXXX warrants that such Licensed Product shall be of new
manufacture, free from defect in material and/or workmanship and strictly
compliant with the technical specifications and quality conditions as set forth
in Article 3 above.
The above warranty shall be given for a 36 (thirty six) month period of time
starting from delivery of the concerned Licensed Product to its end user.
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The above warranty shall not apply in case that the concerned Licensed Product
has been stored, installed, protected and maintained contrary to the
instructions given in writing by XXXXXXX to its purchaser or in case that the
Licensed Product is not used under normal operating conditions as specified in
writing by XXXXXXX to its purchaser.
Should a proper claim be made against LCC or the US Affiliate by any third party
in connection with any delivered Licensed Product, XXXXXXX shall free of charge
replace the concerned defective Licensed Product.
The latter shall be returned by LCC or the US Affiliate to XXXXXXX, carriage
prepaid by XXXXXXX.
The above is without prejudice to any reimbursement by XXXXXXX to LCC and to the
US Affiliate of costs, damages or the like suffered or incurred by LCC and the
US Affiliate by reason of the claim of any third party in connection with the
use of any defective Licensed Product.
LCC and the US Affiliate will endeavour to obtain from customers purchasing the
Licensed Product that warranty of the Licensed Product be limited to its
replacement and that liability for indirect and consequential damages be
excluded. Any such provisions will be included in the general conditions of sale
of the Licensed Product proposed by LCC and the US Affiliate to their customers.
ARTICLE 10 - STEERING COMMITTEE
10.1. XXXXXXX and LCC hereby agree to constitute a steering committee (the
"Steering Committee") composed of two (2) representatives for each of
them.
The names of such representatives shall be communicated by each Party to the
other within thirty (30) days of execution of this Agreement.
Each Party shall have the right to redesignate any of its representative and
shall inform accordingly the other at least ten days before the meeting where
such change occurs.
10.2. The Steering Committee shall meet during the first year of validity
of this Agreement on a three-month basis and thereafter on a semestrial
basis and at any time upon request of either Party with a thirty day prior
written notice to the other Party.
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The Steering Committee shall meet in January 1995 in order for the Parties to
review Appendix 4 to adapt, as far as necessary, the sales price scale for the
Licensed Product and to complete the Licensed Product cost price forecasts.
10.3. The location of ,the Steering Committee shall be alternatively
XXXXXXX and LCC premises, unless otherwise mutually agreed.
For each meeting, the hosting Party shall prepare minutes within fifteen days of
the meeting date and send them to the other Party for its approval.
In case of remarks, they shall be sent in writing by the receiving Party within
fifteen days of receipt of the minutes.
Such remarks shall be examined during the next meeting of the Steering
Committee.
10.4. Through the Steering Committee, the Parties shall examine and discuss
all questions relating to their cooperation hereunder.
ARTICLE 11 - FORCE MAJEURE
11.1. Neither Party shall be liable for any delay in, or failure or
diminution of performance hereunder due to any cause which is reasonably
beyond its control.
The following shall be, without limitation, deemed as events of force majeure :
- wars (whether declared or not) ;
- natural disasters ;
- acts of God ;
- fires ;
- riots ;
- floods ;
- embargoes ;
- strikes and lock out ;
- labour disputes ;
- acts of civil or military authorities.
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11.2. The Party suffering the cause of force majeure shall advise the other
Party within fifteen (15) days of the occurrence of the cause of force
majeure and shall use its reasonable best efforts to avoid, remove or
mitigate the effects of such causes of delay and continue the full
performance of this agreement as soon as such causes are removed.
11.3. Delays resulting from force majeure will be deemed excusable delays
and the delayed Party shall be granted an equitable extension period at
least equal to the period of delay caused by the force majeure.
11.4. However, should the delay caused by force majeure reasonably be
expected to last longer than four (4) months, the Parties shall without
delay meet to consult each other and try to find an appropriate remedy to
the situation and to reach an agreement thereon.
ARTICLE 12 - WARRANTY ON THE KNOW HOW AND ON THE PATENT
12.1. LCC declares that the use of the Know-How and the Patent should
enable XXXXXXX, which furthermore is an expert in the field of components,
to manufacture the Licensed Product in the same way as LCC does in its own
factories, in particular in terms of quality and performance of the
Licensed Product.
12.2. Notwithstanding the above, LCC shall not be liable in any case whatsoever
for any loss and/or damage of any kind, including but not limited to
consequential damages, indirect damages, loss of production, loss of
revenue, incurred or suffered by XXXXXXX in connection with the use of the
Know-How and/or of the Patent.
ARTICLE 13 - INFRINGEMENT
13.1. LCC hereby certifies that, to the best of its knowledge at the date of
execution of this Agreement, neither the Know-How nor the Patent are
subject of a claim by a third party for infringement of any intellectual
and/or industrial property rights and that, to the best of its knowledge
at the date of execution of this Agreement, there is no such pending
claim.
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13.2. In case that any claim, suit or proceeding is brought against XXXXXXX on
the issue of infringement of any valid patent, copyright or other
proprietary rights by the Know-How in the Territory or by the Patent in
the USA then XXXXXXX shall immediatly notify in writing LCC of such action
and provide it with all available information thereupon.
XXXXXXX expressly agrees to give LCC full authority to
- defend or settle the action, to fully cooperate with LCC in such defense or
settlement and not to incur any costs, expenses or fees in defending such
action without having received prior written approval of LCC.
LCC shall reimburse XXXXXXX all direct costs incurred by XXXXXXX in connection
with the claim, with the exclusion of costs which would not have been previously
agreed upon by LCC as set forth above and with the exclusion of any indirect
and/or consequential damages, costs, expenses or the like incurred or suffered
by XXXXXXX in connection with the claim.
13.3. LCC shall have no liability for any claim, suit or proceeding of
infringement based on (i) the use of the Know-How and/or of the Patent in
combination with any other intellectual and/or industrial property right,
(ii) the use of the Know-How and/or the Patent after Xxxxxxx having
received notice of the alleged infringement, (iii) manufacture of the
Licensed Product not conform to the Know-How and the Patent.
13.4. LCC agrees that, during the term of this Agreement, it shall protect
the Patent against infringement by any third party in the USA which would
come to LCC's knowledge.
ARTICLE 14 - CONFIDENTIALITY
14.1. As used in this Agreement the term "Proprietary Information" shall
mean any information or data disclosed by either Party to the other Party,
pursuant to this Agreement, either in writing or orally, subject to the
conditions set forth hereafter, and including without limitation any
written or printed documents, samples, models, or any means of disclosing
such Proprietary Information that LCC and XXXXXXX may elect to use during
the term of this Agreement.
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14.2. Nothing in this Agreement may be construed as compelling either Party
hereto to disclose any Proprietary Information to the other Party.
14.3. Each Party, to the extent of its right to do so, shall disclose to
the other Party only such Proprietary Information which the disclosing
Party deems appropriate to fulfill the purpose of this Agreement.
The Parties hereby represent that the disclosure of Proprietary Information by
and between themselves is not contrary to the laws and regulations of their
respective countries.
14.4. Any information or data in whatever form disclosed by either Party to the
other Party and which is designated as Proprietary Information by the
disclosing Party by an appropriate stamp, legend or any other notice in
writing, or when disclosed orally, has been identified as Proprietary
Information at the time of disclosure and has been promptly (thirty (30)
days at the latest) confirmed and designated in writing as Proprietary
Information of the disclosing Party, shall be subject to the relevant
terms and conditions of this Article.
14.5. The receiving Party hereby covenants that, for the term of this
Agreement as well as for a period of ten (lO) years from its expiry or
termination, the Proprietary Information received from the disclosing
Party shall :
(a) be protected and kept in strict confidence by the receiving Party which
must use the same degree of precaution and safeguards as it uses to protect
its own Proprietary Information of like importance, but in no case any less
than reasonable care ;
(b) be only disclosed to and used by those persons within the receiving
Party's organization who have a need to know and solely for the purpose
specified in this Agreement, it being understood that LCC shall have the
right to disclose to the US Affiliate (and any other Affiliate in the
Territory which would be appointed to distribute the Licensed Product) any
Proprietary Information received from XXXXXXX ;
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(c) not be used in whole or in part for any purpose other than the purpose of
this Agreement without the prior written consent of the disclosing Party ;
(d) neither be disclosed nor caused to be disclosed whether directly or
indirectly to any third party or persons other than those mentioned in
subparagraph (b) above ;
(e) neither be copied, nor otherwise reproduced nor duplicated in whole or
in part where such copying, reproduction or duplication have not been
specifically authorized in writing by the disclosing Party.
14.6. Any Proprietary Information and copies thereof disclosed by either
Party to the other Party shall remain the property of the disclosing Party
and shall be returned by the receiving Party immediately upon request and
in any case upon term or termination of this Agreement.
14.7. Except as aforementioned, the receiving Party shall have no
obligations or restrictions with respect to any Proprietary Information
which the receiving Party can prove :
(a) has come into the public domain prior to, or after the disclosure
thereof and in such case through no wrongful act of the receiving Party ;
or
(b) is already known to the receiving Party, as evidenced by written
documentation in the files of the receiving Party ; or
(c) has been lawfully received from a third party without restrictions or
breach of this Agreement ; or
(d) has been or is published without violation of this Agreement ; or
(e) is independently developed in good faith by employees of the receiving
Party who did not have access to the Proprietary Information ; or
(f) is approved for release or use by written authorization of the disclosing
Party ; or
(g) is not properly designated or confirmed as proprietary.
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14.8. With respect to any exchange of Proprietary Information which may occur as
a result of this Agreement, it is expressly understood and agreed that the
below listed employees shall, on behalf of the respective Parties, be the
exclusive individuals authorized to receive and/or transmit Proprietary
Information under this Agreement :
FOR LCC FOR XXXXXXX
X. XXXXXXXXXXXXX E. BLANK
X. XXXXX X. XXXXX
As regards the individuals identified above, each Party shall have the right and
power to redesignate such persons within their organizations as are authorized
to receive and/or transmit Proprietary Information exchanged under this
Agreement. Any such redesignations which are made by either Party shall be
effected by rendering written notice of such change to the other Party.
14.9. Any Proprietary Information disclosed by the Parties under this
Agreement which is Classified Information shall be identified by the
disclosing Party as Classified Information at the time of disclosure and
the disclosure, protection, use and handling of such information shall be
in accordance with the security procedures prescribed by the appropriate
Government.
14.10 It is expressly understood and agreed by the Parties hereto that the
disclosure and provision of Proprietary Information under this Agreement
by either Party to the other Party shall not be construed as granting to
the receiving Party any rights whether expressed or implied by licence or
otherwise on the matters, inventions or discoveries to which such
Proprietary Information pertains or any copyright, trademark or trade
secret rights.
The property in all information and/or data disclosed by either Party to the
other Party pursuant to this Agreement and which is precisely designated as
proprietary shall, subject to any right of any other owner, rest with the
disclosing Party.
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ARTICLE 15 - COMING INTO FORCE - DURATION
15.1. This Agreement shall come into force upon its execution by both
Parties hereto.
15.2. Unless earlier terminated as set forth in Article 16 below, this
Agreement shall stay in force for a ten (10) year period of time.
ARTICLE 16 - TERMINATION
This Agreement may be terminated by operation of law and without demand in the
following cases :
(a) by either Party in case that the other Party is in breach of any of its
obligations hereunder and does not remedy such breach within sixty days of
receipt of the notice from the non defaulting Party to remedy the same ;
(b) by LCC in case that the test procedure as defined in Appendix 7 is not
positive ;
(c) by LCC in case that XXXXXXX becomes controlled by a competitor of LOUT,
the term control being understood as the direct or indirect owership of at
least fifty per cent of the voting stocks of XXXXXXX or of any rights
entitling to elect the majority of the board of XXXXXXX.
(d) subject to applicable laws, by either Party upon the other Party's
cessation of business, election to dissolve, dissolution, insolvency,
bankruptcy or filing of any petition therein or for relief.
In all cases, termination shall be effective upon receipt by the non terminating
Party of a termination notice from the other Party.
ARTICLE 17 - EFFECTS OF TERM AND TERMINATION
17.1. In case of term or termination, XXXXXXX shall keep temporary right and
license to manufacture and sell the Licensed Product for the sole purpose
of performing its obligations under any order placed by any client (in the
case provided in Article 5.2. (iv) last paragraph) or under any order
placed under the exclusive supply agreement with the US Affiliate and
under any order of the Licensed Product placed by LCC, subject to the
payment of the royalties due to LCC as set forth in Article 5.
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After the fulfilment of all the above referred commitments, XXXXXXX shall cease
using the Know-How and the Patent and shall immediatly return to LCC or, at its
option, destroy the Technical Documentation given by LCC (in such case XXXXXXX
shall provide LCC without delay with a notice signed by a duly authorized
representative that such destruction has been made).
17.2. In case of termination by LCC of this Agreement for cases under Article 16
(a), (c) or (d), LCC may elect to terminate automatically any order placed
with XXXXXXX which shall be informed accordingly within fifteen days of
termination of this Agreement.
In such case, LCC shall pay for the Licensed Products completed at the price
agreed in the concerned order(s) and for the Licensed Products in process at a
price calculated in proportion with the state of manufacture of the concerned
Licensed Products.
17.3. In case of termination by LCC due to XXXXXXX'x default, in addition to the
provisions of paragraph 17.2., it is agreed and understood that XXXXXXX
shall not for a period of three years from the date of termination of this
Agreement manufacture in the USA and/or market in the Territory products
similar to the Licensed Product, i.e. DC Filter capacitor using metallized
polypropylene.
17.4. Term or termination of this Agreement shall not affect the provisions of
Articles 14 and 17.3 above which shall survive for the period set forth in
each such Article.
ARTICLE 18 - AUTHORIZATIONS - TAXES, LEVIES AND DUTIES
18.1. AUTHORIZATIONS
LCC shall file at its own expenses all request in order to obtain, if necessary,
from French competent authorities any export licence and/or other governmental
authorization(s) necessary for the grant of the right and licenses under the
Know-How and the Patent, delivery of the Technical Documentation and performance
of the Technical Know-How Services.
XXXXXXX shall file at its own expenses all request in order to obtain, if
necessary, from any governmental authorities in the Territory any import licence
and/or other governmental authorization(s) necessary for the grant of the right
and licenses under the Know-How and the Patent, delivery of the Technical
Documentation and performance of the Technical Know-How Services.
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18.2. TAXES, LEVIES AND DUTIES REGARDING SALE OF THE LICENSED PRODUCT TO LCC
(a) All taxes, levies, duties, charges and the like with respect to the grant of
the right and licenses under the Know-How and the Patent, delivery of the
Technical Documentation and performance of the Technical Know-How Services
or assessed against LCC by any authority in the Territory shall be borne
exclusively by XXXXXXX, save income taxes which may be due by LCC.
(b) Sale of the Licensed Product.
XXXXXXX shall pay the costs of US customs formalities as well as all duties,
taxes and other official charges payable upon exportation of the Licensed
Product.
LCC shall pay all duties, taxes and other official changes as well as the cost
of carrying out custom formalities payable upon importation of the Licensed
Products.
ARTICLE 19 - REPRESENTATION
LCC recognizes that in the manner and to the extent expressly provided for
herein, it is committing the US Affiliate and declares that it is authorized to
do so.
As a consequence, the US Affiliate shall benefit by the terms and provisions of
this Agreement to the extent above stated as if it were original signatory of
this Agreement.
AS WELL, any other Affiliate which would be designated by LCC to distribute the
Licensed Product in the Territory would benefit by the terms and provisions to
the same extent as the US Affiliate.
ARTICLE 20 - APPLICABLE LAW - SETTLEMENT OF DISPUTES
20.1. This Agreement shall be construed and governed in accordance with the laws
of France.
20.2. Any and all disputes between the Parties in connection with the existence,
validity, interpretation, execution or termination of this Agreement shall
be finally settled by arbitration in accordance with the Rules of
Arbitration and Conciliation of the International Chamber of Commerce by
one or more arbitrators appointed in accordance with the said Rules.
00
Xxx xxxxxxxxxxx xxxxx xxxx xxxxx xx XXX-XXXX (XXX).
The proceedings shall be held in English.
ARTICLE 21 - PUBLICITY - ANNOUNCEMENT
No advertisement, publicity or public announcement regarding the execution,
contents and implementation of this Agreement SHALL be made by either Party
without prior written consent of the other, such consent shall not be
unreasonably withheld.
Notwithstanding the above, LCC shall have the right to issue press release
mentioning the execution of this Agreement and mentioning XXXXXXX as its
exclusive manufacturer for the Licensed Product in the USA.
ARTICLE 22 - MISCELLANEOUS
22.1. ASSIGNMENT
No Party may assign or transfer any of its rights and obligations under this
Agreement without the prior written consent of the other which shall not be
unreasonably withheld.
Notwithstanding the above, LCC shall have the right to assign or transfer any of
its rights and obligations to any of the Affiliates as well as to its mother
company as defined in Article 1.
22.2. ENTIRE AGREEMENT
This Agreement supersedes and cancels all prior representations, negotiations,
commitments, undertakings, communications oral or written, acceptance,
understandings and agreements between the Parties with respect to its purpose
and in particular the NDA.
22.3. DISCREPANCY
In case of discrepancy between this text and any of its Appendices, the present
text shall prevail.
22.4. SEVERABILITY
If any of the provisions of this Agreement is found by an arbitrator, court or
other competent authority to be void or unenforceable, such provision shall be
deemed deleted from this Agreement and the remaining provisions of this Agrement
shall continue in full force and effect.
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Should the deleted provision be a substantial one, the Parties shall meet in
order to mutually agree upon the terms of a mutually satisfactory provision to
be substituted to the deleted one.
22.5. AMENDMENT
This Agreement shall not be modified or supplemented except by way of an
amendment executed by the Parties.
22.6. ENFORCEMENT OF PROVISIONS
The failure of either Party to enforce at any time any of the provisions of this
Agreement or to exercise any option herein provided or to require at any time
performance by the other Party of any provision hereof shall in no way be
construed to be a waiver of such provision nor in no way affect the validity of
this Agreement or any part thereof or the right of such Party to enforce each
and every provision of this Agreement.
22.7. HEADINGS
The headings used in this Agreement are for convenience only and shall not
affect the interpretation of the provisions which they introduce.
22.8. NOTICES
A notice to be given under this Agreement shall be in writing and in English and
served :
. personnally, the notice shall be deemed to have been served at the time of
delivery ; or
. by posting the same by registered or certified air mail to the Party to which
the notice is directed at the relevant address appearing in this Agreement or
at any other address of which prior notification in writing shall have been
given by the addressee prior to the dispatch of said notice and any notice
given by post shall be deemed to have been received by the Party to which it
is addressed at the expiration of fifteen (1S) days after the same has been
properly posted ; or
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. by facsimile :
if to LCC : Fax number 00.0.00.00.00.00. if to XXXXXXX : Fax number (619) 277 -
6754
Or any other facsimile number of which prior notification in writing as set
forth above shall have been given to the sender prior to the transmission of the
facsimile and any facsimile transmission shall be deemed to have been served on
the date of transmission by the sender provided that the sender shall receive
confirmation of receipt from the recipient in writing as set forth above.
Done in two original copies
FOR LCC FOR XXXXXXX
---------------------------- --------------------------------
(Signature) (Signature)
Louis AGNERAY Xxxx X. XXXX
Chairman of the Board Chairman and C.E.0
---------------------------- --------------------------------
(Date) (Date)
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