EXHIBIT 10.18
DATED JANUARY 22, 1998
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(1) ▇▇▇▇▇ LIMITED
(2) PRESTOLITE ELECTRIC LIMITED
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LICENCE OF INTELLECTUAL PROPERTY
RELATING TO IN-LINE DIESEL PUMPS
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THIS LICENCE is made on 22nd day of January 1998
BETWEEN:
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(1) ▇▇▇▇▇ LIMITED whose registered office is at Stratford Road, Solihull,
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West Midlands, B90 4LA ("▇▇▇▇▇")
(2) PRESTOLITE ELECTRIC LIMITED whose registered office is at Cleveland Road,
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Leyland, Preston, Lancashire PR5 1XB ("the Company")
RECITALS
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(A) Pursuant to a Sale and Purchase Agreement (as defined below) ▇▇▇▇▇ is
selling the Activity and Assets (as therein defined) to the Company.
Notwithstanding the sale of the Activity and Assets to the Company any
existing Intellectual Property Rights (defined later) which relate to in-line
diesel pumps (the manufacture of which is part of the Activity) are to remain
vested in ▇▇▇▇▇.
(B) The Company requires a licence of such Intellectual Property Rights in
order to manufacture and supply such in-line diesel pumps to the OE Market
(defined later) and to ▇▇▇▇▇ for the Aftermarket (defined later) and ▇▇▇▇▇
agrees to grant such licence on the terms set out in this Licence.
NOW IT IS AGREED as follows:-
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1. DEFINITIONS
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In this Licence:
1.1 the following words and expressions shall have the following meanings
except where inconsistent with the subject matter or context:-
"Aftermarket" means the market for (a) spare and
replacement parts for components or
sub-assemblies comprised within the
products of Original Equipment
Manufacturers and (b) automotive
accessories and includes (i) supplies
of such spare replacement parts and
accessories to the MOD and (ii)
Original Equipment Service
"Associated Company" means any person which is either a
holding company (whether direct or
indirect) or a subsidiary company of
the relevant party or a subsidiary
company of any such holding company or
is otherwise directly or indirectly
controlled by, or is under the same
control, direct or indirect, as the
relevant party from time to time and at
the time that the relevant clause in
which such expression appears has
application, which where a claim is to
be made under the relevant clause shall
mean when the cause of action accrued
under such clause
"Competitor of ▇▇▇▇▇" means Bosch, Denso, Zexel and
Stanadyne or any of their Associated
1.
Companies
"control" means in relation to any person the
power of any other person or persons to
secure by law or by corporate structure
that the affairs of the first person
are conducted in accordance with the
wishes of that other person or persons,
and any cognate word shall be construed
accordingly
"holding company" has the meaning given in Section 736 of
the Companies Act 1985 as amended
"Improvement" means any invention, discovery or
design comprised within any change
hereafter made to Products or their
method of manufacture or use which
makes them of better quality or more
efficient or adaptable or enables them
to be manufactured more cheaply or more
efficiently provided that such
expression shall not for the purposes
of any non-exclusive licence granted
pursuant to clause 3 include any novel
feature which is patentable in its own
right or which will materially extend
the life of any Product
"In-Line Diesel Pump Marks" means the Registered Trade Marks and
the Unregistered Trade Mark and
includes any one or more of such trade
marks
"Intellectual Property Rights" means all the registered and
unregistered intellectual property
subsisting at the date hereof owned by
▇▇▇▇▇ or any Associated Company of
▇▇▇▇▇ in or relating to the Products
including any patent, registered
design, design right, copyright and
know-how or similar property or right
by whatever name it is called and in
whatever country it subsists and which
has hitherto been used by the Activity
in relation to the manufacture,
sourcing and/or sale of Products
including the In-Line Diesel Pump Marks
but excluding any other trade marks
registered or unregistered
"▇▇▇▇▇ Standards of Quality" means the standards of quality applying
at the date hereof to the
2.
manufacture of Products and any reasonable
standards specified or approved by ▇▇▇▇▇ at
any time hereafter in connection with the
quality of Products
"MOD" means the Ministry of Defence in the
United Kingdom of Great Britain and
Northern Ireland
"Original Equipment means any manufacturer or assembler of
Manufacturer" transport vehicles, engines or similar
equipment including, but not limited
to, a manufacturer or assembler of
motor cars, vans, buses, coaches,
forklifts, industrial vehicles, trucks,
tractors or marine, motive power or
stationary engines or a manufacturer of
components or sub-assemblies to be
fitted as original equipment to such
vehicles, engines or similar equipment
"O E Market" means Original Equipment Manufacturers
in their capacity as buyers of Products
for fitting as original equipment
"Original Equipment means the market for supplies of spare
Service" and replacement parts to any Original
Equipment Manufacturer or to any dealer
of any Original Equipment Manufacturer
in its capacity as a dealer of such
Original Equipment Manufacturer
"person" means any person, firm, association,
company or body corporate or
unincorporate
"Products" means those products set out in
Schedule 1
"Registered Trade means the registered trade marks
Marks" details of which are set out in
Schedule 2
"Sale and Purchase Agreement" means the agreement made between ▇▇▇▇▇
and the Company of even date herewith
for the sale of the Activity and Assets
(as defined therein)
"Supply Agreement" means an agreement having the same date
as this Licence and made between (1)
▇▇▇▇▇ Limited and (2) the Company and
entitled "In-Line Diesel Pumps Supply
Agreement"
"subsidiary" has the meaning given in Section 736
3.
of the Companies Act 1985 as amended
"Unregistered Trade means the mark "Maximec"
Mark"
1.2 words which denote the singular shall be deemed to include the plural
and vice versa. References to a particular gender include all other
genders;
1.3 references to clauses and Schedules are to clauses and Schedules of
this Licence;
1.4 the headings to the clauses will not affect its construction;
1.5 the word "including" or any cognate word shall be construed as though
the words "without limitation" immediately followed such word;
1.6 references to any instrument or agreement shall include such
instrument or agreement as may have been or may hereafter be varied.
2. GRANT
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2.1 ▇▇▇▇▇ hereby grants to the Company a royalty free non-exclusive
world-wide perpetual (subject to clause 8) transferable (in accordance with
clause 10) licence, together with the right to grant sub licences to use
the Intellectual Property Rights to a person who is not a Competitor of
▇▇▇▇▇, but only for the purposes of manufacturing, having manufactured and
supplying Products to (a) the OE Market, (b) ▇▇▇▇▇ or any Associated
Company of ▇▇▇▇▇ for supply to the Aftermarket and (c) the Aftermarket if
under either clause 3.2.2 or clause 3.2.3 of the Supply Agreement the
Company's rights shall arise but then only to the extent therein provided.
2.2 The Company acknowledges that the Intellectual Property Rights shall
belong absolutely to ▇▇▇▇▇. Save as provided in clause 2.1 the Company
shall have no rights in respect of the Intellectual Property Rights and
shall not use the Intellectual Property Rights except for the purposes
specified in clause 2.1 and in particular shall not use any of the In-Line
Diesel Pump Marks as the whole or part of a corporate or other business
name.
3. IMPROVEMENTS
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Each of the parties shall promptly notify the other in writing of any
Improvements to the Products which it develops or acquires, giving full
details thereof, and shall, so far as lies within its ▇▇▇▇▇▇, ▇▇▇▇▇ the other
a world-wide non-exclusive licence to use any intellectual property rights in
relation to such Improvements royalty free during the subsistence of such
rights (subject to clause 8) Provided always that such licence shall in
relation to Improvements (a) developed or acquired by ▇▇▇▇▇ be granted only
for the purposes of the Company exploiting the rights granted to it pursuant
to clause 2.1; (b) developed or acquired by the Company be granted only for
the purposes of ▇▇▇▇▇ or any Associated Company of ▇▇▇▇▇ manufacturing for,
and/or supplying Products to, the Aftermarket.
4. INFRINGEMENTS
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4.1 Each of the parties will promptly notify the other in writing if they
become aware that any third party may be infringing the Intellectual
Property Rights or any intellectual property rights in relation to any
Improvements or that the use of the Intellectual Property Rights or any
4.
such intellectual property rights in relation to any Improvements may be
infringing the rights of any third party.
4.2 ▇▇▇▇▇ shall have the sole right to bring or defend and to have conduct
of any proceedings to which a third party is party relating to the
Intellectual Property Rights and the Company will at the request of ▇▇▇▇▇
give reasonable co-operation to ▇▇▇▇▇ at ▇▇▇▇▇' cost and expense in any
action, claim or proceedings brought or threatened in respect of the
Intellectual Property Rights by or against a third party.
4.3 The party (the "Owner Party") who owns the intellectual property
rights in any Improvements shall have the sole right to bring or defend and
to have conduct of any proceedings relating to such intellectual property
rights and the other party will give reasonable co-operation to the Owner
Party at the Owner Party's expense in any action, claim or proceedings
brought or threatened in respect of such intellectual property rights by or
against a third party.
5. COVENANTS BY THE COMPANY
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5.1 The Company shall comply with the ▇▇▇▇▇ Standards of Quality and in
particular shall use the In-Line Diesel Pump Marks only in the form and
manner directed or approved in writing by ▇▇▇▇▇ and in connection therewith
shall permit inspection by ▇▇▇▇▇' authorised representatives at any
reasonable time by prior arrangement of the manufacture, storage and
transport of the Products of or by the Company or any sub-contractor of the
Company.
5.2 If at any time any Products bearing the In-Line Diesel Pump Marks do
not, insofar as is material and recognising that from time to time Products
may occasionally be made which are defective, comply with ▇▇▇▇▇' Standards
of Quality ▇▇▇▇▇ ▇▇▇ give notice in writing of its dissatisfaction and
require the Company to take such remedial action as ▇▇▇▇▇ ▇▇▇ reasonably
direct. If within a period of thirty (30) days after receipt of such notice
the Company has not taken such remedial action to ▇▇▇▇▇' reasonable
satisfaction ▇▇▇▇▇ shall provide to the Company in writing full particulars
of those matters ▇▇▇▇▇ reasonably considers still do not comply with ▇▇▇▇▇'
Standards of Quality and stating that if by the expiration of a further 30
days ▇▇▇▇▇ shall not have issued a letter confirming its satisfaction with
the Company's remedial action then the Company will be in material breach
of this Licence.
5.3 The Company shall not use in its business in relation to Products or
any other products any other trade marks or devices so resembling the In-
Line Diesel Pump Marks as to be likely to cause confusion or deception.
5.4 All aspects of the manufacture, use and sale of Products by the
Company shall be at the Company's risk and for the Company's account and
the Company shall act as an independent contractor and the Company shall
indemnify and hold ▇▇▇▇▇ harmless against all actions, claims, demands,
costs, charges and expenses arising out of or in connection with the
manufacture, use or sale or offer of sale of Products in relation to which
any Intellectual Property Right has been used, other than the sale or offer
of sale of Products to ▇▇▇▇▇ or any Associated Company of ▇▇▇▇▇ but
5.
without prejudice to the rights of ▇▇▇▇▇, any Associated Company of ▇▇▇▇▇
or the Company under any other agreement or at law.
5.5 The Company shall effect and maintain or cause another Associated
Company of the Company to effect and maintain for its and the Associated
Company's benefit full product liability insurance relating to Products in
relation to which any Intellectual Property Right has been used, with a
reputable insurer in an amount equal to not less than US$10,000,000 for
each and every event and in the aggregate in any one year of insurance
under such policy and shall provide to ▇▇▇▇▇ on request a copy of the
policy and proof of the payment of premiums.
6. REGISTRATION
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6.1 Nothing in this Licence shall oblige ▇▇▇▇▇ to defend any proceedings
for the revocation of registration of any of the Registered Trade Marks or
other registered Intellectual Property Rights nor to bring any proceedings
against an infringer of the Registered Trade Marks or other registered
Intellectual Property Rights, or in relation to any passing off, or other
action in connection with the Unregistered Trade Mark or other unregistered
Intellectual Property Rights, but should ▇▇▇▇▇ decide in its absolute
discretion to defend or take any such proceedings it shall do so at its own
cost. The Company shall in any case execute all documents and do all things
reasonably necessary at ▇▇▇▇▇' expense to enable ▇▇▇▇▇ to pursue any such
proceedings provided that the Company shall not be required to be joined as
a party to any such proceedings.
6.2 The Company shall comply with applicable laws of any country as to the
registration and usage of any registered Intellectual Property Rights which
are required in order to maintain the validity of the same in such country
and to make the provisions of this Licence valid between the parties hereto
and against third parties but nothing in this clause 6.2 shall require the
Company to pay any renewal fees in relation to any such registered
Intellectual Property Rights.
6.3 ▇▇▇▇▇ and the Company shall if it is necessary to do so in order to
protect the registration of the same use all reasonable endeavours to have
the Company recorded as the licensee of any registered Intellectual
Property Rights in any relevant registry and the Company will where it is
so necessary at the request of ▇▇▇▇▇ execute all documents, including a
short form of this Licence. All costs incurred under the provisions of this
clause will be shared equally by ▇▇▇▇▇ and the Company.
7. WARRANTY
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7.1 ▇▇▇▇▇ warrants that it does not know of any present or proposed
proceedings concerning the Intellectual Property Rights but does not
warrant that any Products manufactured, used, sold or offered for sale will
not infringe the rights of others.
7.2 The Activity's manufacture and supply of Products immediately prior to
the date hereof complied in all respects with ▇▇▇▇▇' Standards of Quality
and ▇▇▇▇▇ has not during the 12 months prior to the date of this Licence
had cause to be dissatisfied with the Activity's level of compliance with
▇▇▇▇▇' Standards of Quality recognising that from time to
6.
time during that period Products may occasionally have been made which were
or are defective.
8. TERMINATION
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8.1 ▇▇▇▇▇ or the Company may terminate this Licence summarily by written
notice to the other if the other is:-
8.1.1 in material breach of this Licence and shall have failed to
remedy the breach within 30 days of the receipt of a request in
writing from the party not in breach to remedy the breach, such
request indicating that failure to remedy the breach may result in
termination of this Licence;
8.1.2 insolvent or has a receiver, manager, administrator,
administrative receiver, liquidator (other than for the purposes of a
solvent reconstruction or amalgamation) appointed over it or its
undertaking, assets or income or any part thereof.
8.2 ▇▇▇▇▇ shall be entitled to terminate this Licence summarily in the
event of there being any change in the control of the Company or of any
direct or indirect holding company of the Company resulting in a Competitor
of ▇▇▇▇▇ having control.
8.3 Upon the termination of this Licence howsoever occasioned the Company
shall cease to be authorised to use the Intellectual Property Rights and
any intellectual property rights in relation to any Improvements owned by
▇▇▇▇▇ and shall forthwith return to ▇▇▇▇▇ all originals and copies of all
documents and other information (in whatever form) comprising, relating to
or recording such Intellectual Property Rights and intellectual property
rights in relation to any Improvements owned by ▇▇▇▇▇ provided that to the
extent that the Company would be entitled on such termination to use the
then unregistered Intellectual Property Rights but for this clause because
they are in the public domain otherwise than by reason of a breach of this
Licence by the Company then the restriction in this clause 8.3 on the
Company not to use such unregistered Intellectual Property Rights shall not
apply.
8.4 The obligation on the Company to indemnify ▇▇▇▇▇ in clause 5.4 shall
continue indefinitely on the termination of this Licence.
9. CONFIDENTIALITY
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Each party undertakes that it shall not, and shall ensure that its employees
and agents shall not, disclose, use or permit the use of any confidential
information disclosed to it by the other party except as may be necessary for
complying with its obligations under this Licence and then only in such a
manner as to protect fully the confidentiality of such confidential
information. The obligations of non-disclosure by each party shall continue
to apply notwithstanding the termination of this Licence but shall not apply
to any information which falls into the public domain other than by breach of
such obligation of non-disclosure. Registration or notification of this
Licence with or to any regulatory authority shall not be a breach of
confidence for the purposes of this clause.
10. ASSIGNMENT AND SUB-LICENSING
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10.1 Neither party shall be entitled to assign the benefit or delegate the
burden of any rights or obligations under this Licence without the prior
7.
written consent of the other party save that ▇▇▇▇▇ shall be entitled to
assign the benefit and burden of this Licence without such consent to an
Associated Company of ▇▇▇▇▇ and the Company shall be entitled to assign the
benefit of this Licence at the same time as the Company assigns the benefit
of the Supply Agreement to any person to whom it becomes entitled to assign
the Supply Agreement pursuant to the terms thereof provided that it shall
be a condition of the assignment of this Licence that the assignee enters
into a novation agreement with ▇▇▇▇▇, the form of such novation agreement
to be in terms reasonably stipulated by ▇▇▇▇▇ and which shall require the
assignee to covenant with ▇▇▇▇▇ to be bound by the terms of this Licence.
10.2 The Company is not permitted to sub-licence the rights granted
hereunder save only for the purposes and to the persons specified in clause
2.1 and if any sub-licence is granted by the Company for any of such
purposes the Company shall be liable for any act or omission of the sub
licensee which if it had been committed or omitted by the Company would
have been a breach of this Licence.
11. LAW
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The formation, construction, performance, validity and all aspects whatsoever
of this Licence shall be governed by the law of England and Wales and the
parties submit to the exclusive jurisdiction of the English Courts.
8.
SIGNED by ▇▇▇▇▇ ▇▇▇▇-LEATHER ) /s/ ▇▇▇▇▇ ▇▇▇▇-Leather
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as duly authorised attorney for and ) ▇▇▇▇▇ ▇▇▇▇-Leather as
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on behalf of ▇▇▇▇▇ LIMITED ) attorney of ▇▇▇▇▇ Limited
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SIGNED by ▇. ▇▇▇ ▇▇▇▇▇▇▇ ) /s/ ▇. ▇▇▇ ▇▇▇▇▇▇▇
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duly authorised for and on behalf of ) Director
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PRESTOLITE ELECTRIC LIMITED )
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9.