JOINT VENTURE AGREEMENT
AGREEMENT, made as December 23, 1995 by and between TRB Systems, Inc.
("TRB"), a Delaware corporation with a business Address at 000 Xxxxxxxxxx
Xxxxxxx, Xxxxx Xx.00, Xxxxxxxxxx, Xxx Xxxxxx 00000, and Xx. Xxxxx Xxxx
("Indian Partner") with a business address at 00-00 Xxxxxxx Xxxx..
Xxxxx #00X. Xxxxxxxx, X.X. 00000.
WHEREAS, Indian Partner desires to enter into an exclusive contractual
arrangement with TRB for the exclusive right to assemble, market and sell
bicycles and other products of TRB ("Covered Products") in the Territory
(defined below);
WHEREAS, TRB desires to have Covered Products assembled, marketed and sold
in the Territory in conjunction with Indian Partner; and
WHEREAS, TRB and Indian Partner wish to establish, and work together
through, a joint venture to achieve the foregoing.
NOW, THEREFORE, the parties agree as follows:
1. Formation of Joint Venture
For the purposes of implementing the joint venture, the parties shall
form a new entity, to be a corporation, limited liability company or
partnership, as the parties deem appropriate for purposes of tax and
business planning (the "Joint Venture Company"). The parties shall
enter into such further agreements (such as a shareholder, partnership
or other similar agreement) and documents as may be necessary or desirable
to implement the purposes of this Agreement and shall incorporate the
applicable provisions contained herein.
2. Purpose of Joint Venture
The Joint Venture Company (or hereinafter called JVC) shall be established
for the purpose of engaging in the assembly, marketing, distribution and
sale of the Covered Products throughout the Territory. It is intended that
this will include without limitation, the establishment of assembling,
office and other facilities, staff, labor, machinery, equipment,
distribution, network, advertising and such other resources as are necessary
to assemble, market, distribute and sell the Covered Products in the
Territory. The parties shall use their best efforts to cause this Joint
Venture Company to go public in India within 3-5 years from the date of
this Agreement. The "Territory" shall mean India.
TRB shall provide orders received from Continental Africa to the Joint
Venture Company for fulfillment to the fullest extent possible considering
price and quality of products produced by the Joint Venture Company.
After satisfactory production is achieved, TRB will place order with JYC
for exports in the first year for a minimum amount of $2 million.
3. TRB License
(i) Promptly after its formation, the Joint Venture Company shall enter
into a License and Marketing Agreement with TRB in substantially the form
attached hereto as Exhibit A. TRB hereby covenants to enter into such
License and Marketing Agreement with the Joint Venture Company.
(ii) Payment of the $750,000 (seven hundred and fifty thousand U.S.
dollar) License Fee set forth in the License and Marketing Agreement shall
he made by Indian Partner on behalf of the Joint Venture Company as follows:
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$100,000 (One hundred thousand U.S. dollars) is due upon the execution of
this Agreement;
$75,000 (seventy-five thousand U.S. dollars) is due by January 15,1996.
$75,000 (seventy-five thousand U.S. dollars) is due by February 15, 1996.
$500,000 (five hundred thousand U.S. dollars) is due by December 22,1996
or before Indian domestic marketing and sales is ready whichever comes first.
(iii) In addition to the License Fee, the Joint Venture Company shall
pay to TRB the royalties set forth in the Licensing and Marketing Agreement
which shall be paid to TRB's account (or MOTION PLUS INT'L Corporation) in
the United States or as otherwise instructed in writing by TRB from time to
time.
4. Capitalization of the Joint Venture
The Joint Venture Company shall be owned 50% by Indian Partner, 50% by TRB,
with profit sharing rights of 60% by Indian Partner and 40% by TRB. The
contributions of the parties in consideration of their respective interest
in the Joint Venture Company shall be as follows:
(i) Indian Partner
(a) Capitalization of the License Fees to be paid by Indian Partner on
behalf of the Joint Venture Company as set forth in Section 3(ii) above;
(b) arrangement for and provision to the Joint Venture Company at JVC's
cost and expense of all assembling, office and other facilities, staff,
labor, machinery, equipment, distribution networks, advertising and all
other resources necessary to assemble, market, distribute and sell the
Covered Products in the Territory; and
(c) Besides licensing fee, contribution of such working capital and
domestic sales/marketing expenses at list, One million for the first year
as may be necessary from time to time to ensure the operation of the Joint
Venture Company and the development of its business will be the
responsibility of the Indian partner.
(ii) TRB
(a) in addition to granting the Joint Venture Company the license of
TRB technology, know-how, intellectual property and technical assistance
provided under the license and Marketing Agreement, TRB shall supply
reasonable technical expertise and production know-how to enable the
Joint Venture Company to assemble products of a quality satisfactory to
TRB;
(b) Services of one TRB technician to be on location at the Joint
Venture company's production site for up to three months; provided that
TRB shall pay airfare to and from India and salary of the technician while
on location but the Joint Venture Company shall pay for the technicians
accommodations, meals and other reasonable incidental and travel expenses
while in India.
(iii) TRB will invest $500,000 (five hundred thousand U.S. dollars) in
JVC upon receipt of 100% of the license fee. Additional capital
contributions or loans by Indian Partner to the Joint Venture Company shall
not dilute the 40% profit share and 50% voting rights of TRB as provided
herein.
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(iv) Distributions (whether as dividends or equivalent payments
depending on the form of the Joint Venture Company) to the owners in respect
of their interests in the Joint Venture Company shall be made in accordance
with their percentage profit sharing interest.
5. Management of the Joint Venture
(i) The Joint Venture Company shall be managed by a Board of Directors
(or equivalent management board depending upon the form of the organization
finally chosen).
The Board shall be comprised of two representatives from TRB and two
representatives from Indian Partner. All decisions of the board shall be
made by a majority vote; however, the Board shall delegate to TRB exclusive
authority to supervise, inspect and approve the quality of all Covered
Products in TRB's sole discretion along with export policies to Africa.
TRB and Indian Partner shall each have full and free access to the books and
records of the Joint Venture Company at all times;
In the event of any future incidents regarding dilution of promoters' equity
such as primary or secondary public issues, TRB retains the exclusive
authority to make company policy and to supervise, inspect and approve the
quality of all "covered products". However, TRB will not be responsible for
claims made by customers, any returns for any reason, and after market
defects except TRB's proprietary parts.
(ii) Notwithstanding their respective profit sharing interest in the Joint
Venture Company, Indian Partner and TRB shall each have a 50% and 50% vote,
respectively, on all issues to be decided by them as owners;
(iii) Notwithstanding any other provision of this Agreement, neither Indian
Partner nor the Joint Venture Company shall cause the Joint Venture Company
to incur any debt resulting in recourse to TRB, without the prior written
consent of TRB
6. Exclusivity
(i) Indian Partner hereby covenants and agrees that neither it nor its
affiliates nor any party in which it has an economic interest will assemble
or distribute or otherwise engage in any economic venture involving products
similar in form or function to those products of TRB, during the term of
this agreement and for a five year period following termination of the
Agreement.
7. Transfer of Interest: Registration of Shares
(i) Either party may sell its interest in the Joint Venture Company by
first offering its interest to the other party in writing at a price and on
terms not less favorable than offered to the selling party in a bona fide
written offer from a third party in an arm's 5 length transaction. In the
event the other party does not accept such offer in writing within thirty
(30) days, the selling party shall have the right to sell its interest at a
price, and on terms, set forth in the bona fide third party offer described
above.
(ii) Notwithstanding the foregoing, during the initial three year period
from the date of this Agreement, the purchasing party shall have the right
to purchase the selling party's interest as the lower of (a) the price set
forth in the bona fide third party offer or b) the current market value.
(iii) In the event the Joint Venture Company shall offer its shares (or
comparable interests) to the public in an offering in India, TRB and
Indian Partner shall have the right to have their shares (or comparable
interests) included in any registration of such shares or interests at the
Joint Venture Company's expense.
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(iv) Either party can not sell or transfer their shares, rights or
interests to any of TRB's competitor (or competitors) without the other
party's written consent.
8. Term of Joint Venture
This Joint Venture Agreement shall continue in effect;
(i) for so long as the Joint Venture company shall remain a party to the
Licensing and Marketing Agreement; or
(ii) until terminated by agreement of the parties;
provided, that in the event of the termination of this Agreement for any
reason while the Licensing and Marketing Agreement remains in force with
the Joint Venture Company, the parties shall cause the Joint Venture
Company to assign the License and Marketing Agreement to TRB and TRB
shall assume such agreement.
9. Further Agreements
The parties shall cooperate to negotiate and execute such additional or
other definitive agreements, such as a shareholder or similar agreement,
as may be deemed necessary or appropriate to achieve the purposes of this
Agreement.
10. This agreement supersedes any and all other agreements, either
oral or in writing between the parties hereto with respect to the engagement
of "TRB" and "Indian Partner" or between "TRB" (and/or Xxxxx Xxx) and
"Indian Partner" (and/or Xxxxx Xxxx or Xxxxx Xxxx with any of his associates).
11. Applicable law
This Joint Venture Agreement shall be interpreted in accordance with and
governed by the laws of the State of New Jersey without regard to principles
of conflicts of laws.
IN WITNESS WHEREOF; the parties have entered into this Agreement as of the
date first written above.
By Indian Partner By TRB Systems Inc.
By: /s/ Xxxxx Xxxx /s/ /s/ Xxxxx X. Xxx /s/ President
Witness Witness:
By: By:
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LICENSE AND MARKETING AGREEMENT
Agreement dated as of December 23, 1995 by and between TRB SYSTEMS, INC., a
Delaware corporation with its registered office at 000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 hereinafter called "LICENSOR"), and
representative for JVC. Xx. Xxxxx Xxxx. and/or "Indian Partner and TRB.
and/or Joint Venture Company( hereinafter called "Licensee") at temporary
business address 00-00 Xxxxxxx Xxxx. Xxxxx #00X. Xxxxxxxx, XX 00000.
WHEREAS, LICENSOR owns or controls patents, trademarks, tradenames and
know-how relating to bicycles with variable speed lever action drive and
their manufacture; and
WHEREAS, LICENSEE desires to obtain from LICENSOR (i) licenses under
tradenames, trademarks and proprietary know-how of LICENSOR applicable
to such bicycles, (ii) to the extent LICENSOR has or controls patents
applicable to such bicycles in the relevant territory described in this
Agreement, licenses under such patents, and (iii) technical assistance
related to such bicycles, together with the exclusive right to assemble,
use, import, sell, and distribute such bicycles within the relevant
territory in conformity with the standard quality control and design
requirements established by LICENSOR.
In consideration of the mutual covenants, terms and conditions hereinafter
set forth, the parties hereto mutually agree as follows:
ARTICLE I - DEFINITIONS
For the purposes of this Agreement, the terms listed below are defined,
whether in the singular or in the plural, as follows:
1.1 Affiliate - Any corporation or other business entity in which a party
hereto, directly or through one or more affiliates, (i) owns more than fifty
percent (50%) of the stock entitled to vote for the election of directors,
or (ii) otherwise exercises a controlling interest in the management in such
corporation or entity, LICENSOR to determine, in its sole judgment, whether
such controlling interest exists.
1.2 Agreement - This License and Marketing Agreement, including the
Appendices and Exhibits hereto, as the same may be amended from time to time.
1.3 Anniversary Date - the date which occurs one (1) year from the
date of this Agreement and each succeeding anniversary thereof.
1.4 Gross Sales - For any period controlled by this Agreement, the
total of all sales of units of Licensed Product during the period at
invoiced prices, not reduced by discounts allowances or other
adjustments other than defective returns. For purposes of this
definition, a transfer of a completed unit will be deemed a sale
hereunder and the invoice price will be the amount actually billed
but will be no less than the LICENSEE's wholesale list price for
such a unit of the Licensed Products as published and distributed
to the trade.
1.5 Know-How - All of the ideas, concepts. technical information,
inventions, materials (including. without limitation. drawings and
specifications) and processes used in the Licensed Products and the
assembly and servicing thereof.
1.6 Licensed Products - Invention(s) covered by the patents and
know-how relating to a bicycle with a variable lever action drive and
components or parts thereof, including but not limited to those listed
in Appendix I attached hereto.
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1.7 Patents - Any and all patents and patent applications in the
Territory covering the Licensed Products or any component part thereof
either now or hereinafter during the duration of the patent or the term
of this Agreement, whichever is longer, owned or controlled by LICENSOR
or any Affiliate thereof, as listed in Appendix III attached hereto and/
or to be listed and added in the future.
1.8 Territory - The geographic area listed in Appendix II attached
hereto.
1.9 Trademarks - The trademark, logo, and trade name "TRB" and those
included in Appendix IV attached hereto, and any and all other trademarks,
logos and tradenames to be used, developed and obtained by LICENSOR or any
Affiliate thereof and as may be added to Appendix IV by LICENSOR during the
term of this Agreement.
ARTICLE II - LICENSE GRANTS
2.1 Patents - LICENSOR hereby grants to LICENSEE the exclusive right
and license in the Territory to assemble, use, import, sell and distribute
bicycles containing the inventions and improvements covered by the Patents
in the Territory.
2.2 Trademarks - LICENSOR hereby grants to LICENSEE the exclusive right
and license to use, and LICENSEE hereby undertakes to use, the Trademarks
in the Territory in connection with the Licensed Product.
2.3 Know-How - LICENSOR hereby grants to LICENSEE the exclusive right
and license in the Territory to use the Know-How that is now in the
possession of LICENSOR or that will be developed or acquired by LICENSOR
during the term of this Agreement.
2.4 Limitation - The licenses granted under Sections 2.1 2.2 and 2.3
hereunder shall not include the right to manufacture Licensed Products in
or out of the Territory or export
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Licensed Products, directly or indirectly, from the Territory. The
limitation contained herein shall apply to LICENSEE and its Affiliates.
ARTICLE III - LICENSE AND ROYALTY FEES
3.1 License Fees - LICENSEE shall pay LICENSOR a license fee of seven
hundred and fifty thousand United States dollars (U.S.$750,000), payable
as specified in Appendix V attached hereto.
3.2 Royalties - In addition to the license fee payable under Section
3.1 above. LICENSEE shall pay to LICENSOR royalties for each of LICENSEE's
fiscal years during the term of this Agreement, in amounts as specified in
Appendix VI attached hereto.
3.3 Payment Terms - All payments due to LICENSOR under Sections 3.1 and
3.2 shall be made in United States dollars, when due, and via wire transfer
to the bank account in the U.S. specified by LICENSOR. The only deduction to
be made shall be for taxes imposed by the applicable taxing authorities in
the Territory on royalty payments, if any. In calculating royalty amounts
based on Gross Sales, the conversion into United States dollars shall be at
the average official rate of exchange prevailing in the
000
Xxxxxx Xxxxxx during the period for which Gross Sales have been calculated.
All royalty payments shall be due and payable thirty (30) days
after the close of each of the LICENSEE'S quarterly accounting periods
commencing with the date on which Gross Sales begin. The amount
of each estimated quarterly payment shallbe equal to the greater of
(i) the applicable percentage of Gross Sales for
that quarter. Each quarterly and final annual payment of royalty shall be
accompanied by a statement signed by LICENSEE stating in detail satisfactory
to LICENSOR the amount of Gross Sales for the preceding year. LICENSEE shall
pay interest to LICENSOR upon any and all amounts overdue and payable
hereunder to LICENSOR at the rate charged to LICENSOR by its principal
commercial bank in New Jersey, plus one percent (1 %) per annum, for the
due date to the date of payment. Such right to payment of interest shall be
without prejudice to any other remedies LICENSOR may have under this
Agreement or by law.
3.4 Maintenance of Books and Records - LICENSEE shall keep true and
accurate records, files and books of account, in accordance with generally
accepted accounting principles in the Territory, containing all data
required to determine the amounts to be paid hereunder and the information
to be given in statements provided herein. LICENSEE shall permit LICENSOR
and LICENSOR'S representatives to inspect and examine such records, files,
books of account and facilities of LICENSEE for the purpose of determining
or verifying the amount payable to LICENSOR and to conduct or have conducted
in an annual audit thereof, including, without limitation, inspection of all
inventory of any kind. Any expenses incurred at the request and under the
direction of LICENSOR shall be paid by LICENSOR. provided, however. that in
the event any such audit reveals an error in any statement provided by
LICENSEE, the cost of the audit shall be borne by LICENSEE if the error
equals or exceeds five percent (5) of the royalty amount reported due in
such statement.
ARTICLE IV - TECHNICAL ASSISTANCE
4.1 Documents - As soon as practicable after the date of this Agreement
and commensurate with LICENSOR's production schedule, LICENSOR shall deliver
to LICENSEE sufficient written data and information for the assembly and
service of the Licensed Products by LICENSEE as deemed necessary by LICENSOR.
LICENSEE shall provide to its retailers, information sufficient to assemble
and service Licensed Products to LICENSOR's agreed standards.
4.2 Training - As a further means of disclosing LICENSOR's Know-How to
LICENSEE, LICENSOR shall arrange, on a schedule to be mutually agreed upon,
for training of a reasonable number, to be determined by LICENSOR, of
personnel employed by LICENSEE. All salaries, traveling and living expenses
and any other remuneration and expenses to which such trainees may be
entitled, and all expenses incurred by LICENSOR in the operation of such
training program, shall be paid by LICENSEE at LICENSOR's actual cost.
4.3 Other Technical Assistance - LICENSOR agrees to provide technical
assistance upon the written request of LICENSEE. The cost of such assistance
shall be borne by LICENSEE and shall be approved by LICENSEE in writing
prior to such technical assistance being provided.
ARTICLE V - TRADEMARKS AND GOODWILL
5.1 Use of Trademarks - All Licensed Products assembled or sold by
LICENSEE shall bear the Trademarks. The permitted use by LICENSEE of the
Trademarks shall be made only on Licensed Products that conform strictly to
the standards, quality and specifications furnished by LICENSOR to LICENSEE.
Component parts of the Licensed Products shall be purchased by LICENSEE only
from LICENSOR or suppliers approved by LICENSOR in writing to LICENSEE.
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5.2 Inspection - LICENSEE shall at all reasonable times permit LICENSOR,
by representatives designated by LICENSOR, to inspect all of LICENSEE's
facilities and properties relating to the Licensed Products, at LICENSOR's
cost.
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5.3 Labels - All labels and promotional materials used by LICENSEE shall
be submitted to and approved by LICENSOR prior to use. Such approval will
not be unreasonably withheld or delayed. All labels shall have to meet the
legal requirements applicable in the Territory.
5.4 Title to Trademarks - LICENSEE shall refrain from any act or acts
that may prejudice the validity of the title of LICENSOR to the Trademarks.
After termination of this Agreement. LICENSEE will not use at any time for
bicycles or bicycle parts any trademark., tradename or label bearing any
resemblance to the Trademarks. LICENSOR shall retain ownership and the
exclusive right to Trademarks except as permitted to LICENSEE pursuant
to the conditions of this Agreement during the term of this Agreement.
5.5 Promotional Activities - LICENSEE will use its best efforts and
means to meet the needs of the Territory for the Licensed Products, to
promote, advertise and otherwise further the sale and distribution of
the Licensed Products in the Territory, particularly in population centers,
and to further and preserve the goodwill and reputation of the Licensed
Products sold under the Trademarks and meet the standards and conditions as
set forth in Appendix VII attached hereto. LICENSOR shall make available to
LICENSEE, at prices equal to LICENSOR's actual cost, promotional materials
used by LICENSOR in the United States in connection with the sale of
Licensed Products sold under the Trademarks. LICENSEE shall submit to
LICENSOR all advertising materials proposed to be used by LICENSEE in
connection with the Licensed Products for LICENSEE's prior written approval,
such approval not to be unreasonably withheld or delayed.
5.6 Customer Service - LICENSEE shall inform and forward to LICENSOR all
correspondence or communications with customers relating to the quality of
or defects or malfunction in the Licensed Products and shall handle all
inquiries or complaints expeditiously and courteously. LICENSEE and its
distribution chain shall at all times maintain adequate facilities for the
repair, service and storage of the Licensed Products and components and any
parts thereof.
LICENSEE shall at all times maintain a staff of adequately trained personnel
to properly insure the mechanical integrity of the Licensed Products,
service the Licensed Products when necessary and to train service personnel
in the LICENSEE's distribution chain. LICENSEE shall provide literature and
parts to properly support the sale and service of the Licensed Products and
shall provide LICENSOR with service reports on a quarterly basis. Such
reports shall be on a form provided by LICENSOR and shall specify models
requiring service during the period, the type of service, parts found
defective, reason service is required, date service is performed, bicycle
serial number and name and address of consumer.
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5.7 Distributor and Dealer network LICENSEE shall provide to LICENSOR
an updated list of subdistributors and dealers constituting LICENSEE's
distribution chain in the Territory on the first day of each calendar
year quarter. The list will include company name. address. principals. and
fax. telex, and telephone numbers.
ARTICLE VI - IMPROVEMENTS
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6.1 Inventions Improvement - LICENSEE shall require each of its
employees and consultants having access to technical information, data and
Know-How relating to the Licensed Products or component parts thereof to
enter into an agreement with LICENSEE, in form and substance satisfactory to
LICENSOR, whereby each such employee or consultant agrees to assign to
LICENSEE the entire right, title and interest in and to any and all
inventions relating to the Licensed Products, or relating to or useful in
the manufacture thereof. made by him whether during or after the course of
his employment or engagement by LICENSEE. If during the term of this
Agreement, LICENSEE, or any of its Affiliates or employees makes or acquires
any invention or claim in any patent that in use would infringe any Patent
or that constitutes an improvement of a Licensed Product, LICENSEE shall
promptly assign to LICENSOR such invention or claim. LICENSOR shall have
the exclusive right and option to file and perfect any and all patent
applications embodying or arising out of such invention or claim, in the
Territory, and elsewhere, in the name of LICENSOR and to that end shall
have the right to receive and/or inspect all drawings, plans, models,
specifications and worksheets relating thereto and to interview any and
all of LICENSEE's employees and associated personnel and organizations
having knowledge thereof. LICENSEE shall retain an exclusive license in
the Territory to use such invention or claim on the Licensed Product,
free of additional royalty charges.
6.2 Know-How Improvements - During the term of this Agreement, each
party shall promptly inform and transfer to the other Know-How that is
developed or acquired by such party. The method of such transfer shall
be such as the transferor, acting in good faith and with due diligence,
deems appropriate. LICENSOR shall have the right to receive and/or
inspect all drawings, plans, models, specifications and worksheets relating
thereto and to interview any and all of LICENSEE's employees and
associated personnel and organizations having knowledge thereof.
LICENSEE shall retain an exclusive license in the Territory to use such
Know-How, in connection with Licensed Products. free of additional royalty
charges.
ARTICLE VII - CONFIDENTIALITY AND COMPETITION
7.1 Confidentiality Obligation - LICENSEE shall hold, and shall cause
its Affiliates to hold. all Know-How disclosed to it under this Agreement
in confidence at all times during and after the term of this Agreement
and each party shall require each of its employees and
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consultants. and the employees and consultants of its Affiliates, having
access to Know-How relating to the Licensed Products or component parts
thereof to enter into an agreement whereby each such employee or consultant
agrees to hold such Know-How in confidence at all times, and agrees not to
compete with LICENSOR or LICENSEE either during his employment or engagement
and for a three (3) year period thereafter, or. in the event such time
period is not enforceable, then a reasonable period as agreed by a judicial
body within the Territory. Other measures to be taken by LICENSEE and its
Affiliates to hold Know-How in confidence shall be subject to the review and
approval of LICENSOR. LICENSOR shall have the right, in the event of a
violation or breach of this Section 7.1 by LICENSEE, its Affiliates,
employees, or consultants, to seek and obtain specific enforcement of the
provisions of this Section; and to commence an action, in LICENSEE's name
and stead, against any party with whom LICENSEE has a confidentiality agreement
as required by this Section if such party breaches any
provision of such agreement and if LICENSEE for any reason elects not to
enforce such provision. The obligations regarding confidentiality contained
hereinabove shall not apply to any Know-How that;
(i) is at the time of disclosure generally available to the public;
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(ii) becomes generally available to the public through no breach of
confidentiality obligations by the party to whom the disclosure is made or
by any of its Affiliates or the employees or consultants of any of them;
or
(iii) is disclosed to the receiving party by another party not bound by any
confidentiality obligation.
An individual feature of Know-How shall not be considered within the above
exceptions merely because the feature is embraced by more general
information within the exceptions. A combination of features of Know-How
shall not be considered within the above exceptions unless the combination
itself and its principle of operation are within the exceptions.
7.2 Restriction on Competition by LICENSEE - In consideration of
LICENSEE's receiving the exclusive rights conferred under this Agreement,
LICENSEE shall not, during the term of this Agreement, sell or deal in any
manner in bicycles or parts or components thereof not constituting Licensed
Products, but may deal in bicycle accessories approved by LICENSOR. In
addition, for a period of three (3) years after the termination of this
Agreement. LICENSEE shall not become involved or associated with any other
person or business entity engaged in the manufacture or sale of lever
propelled bicycles; provided, that if such time period is held to be
unenforceable, then the restrictive period shall be such reasonable
period as may be agreed by a judicial body within the Territory.
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ARTICLE VIII- TERM AND TERMINATION
8.1 Term - Except to the extent provided herein with respect to the
survival of certain provisions following the term of this Agreement, and
unless earlier terminated pursuant to Sections 8.2 and 8.3 hereof. the
term of this Agreement shall commence on the date of this Agreement and
shall upon the mutual consent of the parties be renewed at the third year
anniversary Date, and renewed at each Anniversary Date thereafter without
the payment of any additional licensing fees, unless either party breaches
any material term of this Agreement.
8.2 Termination by LICENSEE - LICENSEE may terminate this Agreement on
any Anniversary Date hereof by giving ninety (90) days prior written notice
of termination.
8.3 Termination by LICENSOR - LICENSOR may terminate this Agreement
at any time:
(i) by giving LICENSEE thirty (30) days prior written notice if
LICENSEE'shall have committed a material breach of any of its obligations
hereunder, including without limitation, the prompt and timely payment of
license fee and royalties hereunder and failure to fill customers orders
for Licensed Products, or to perform service orders, in a timely fashion;
provided that LICENSEE shall have been previously advised of the alleged
material breach and has been given fifteen (15) days to cure such breach.
It is further provided that no such breach shall be deemed to have occurred
or be continuing (as applicable) if and to the extent LICENSEE's failure to
perform its obligations is due to acts beyond the reasonable control of
LICENSEE, including but not limited to strikes, lock-outs or civil
insurrection or lack of material including component or part supplied
by LICENSOR, any of its Affiliates or suppliers generally.
(ii) upon (a) the filing of a petition in bankruptcy by or against
LICENSEE; (b) the appointment of a referee, trustee or receiver for a
substantial portion of the property or assets of the LICENSEE; (c) the
insolvency of LICENSEE; (d) the consolidation, merger or other business
combination of the LICENSEE or its Affiliates with, or the sale of a
substantial portion of the LICENSEE'S assets to, another corporation,
business entity or person. or the execution of an agreement by LICENSEE
to that effect, or a change in control of LICENSEE or its Affiliates
without the prior written consent of the LICENSOR such consent
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not to be unreasonable withheld; or (e) if LICENSEE is an individual, the
death or incapacity of LICENSEE.
8.4 Termination - Should a termination of this Agreement occur:
(i) LICENSEE shall cease all use of Trademarks and return to LICENSOR
all materials supplied by LICENSOR and deliver to LICENSOR all materials
title to which has been acquired by LICENSOR pursuant to this Agreement;
and
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(ii) any agreements entered into by LICENSEE with third parties in the
Territory, including but not limited to subdistributors and dealers, shall
be assignable to LICENSOR and LICENSEE shall assign to LICENSOR all such
agreements and other documents regarding such subdistributors and dealers
and will do all that is reasonable to have them continue as LICENSOR's
subdistributors and dealers In the event of Termination. LICENSEE shall
submit a full inventory (including costs of parts and stock on hand,
within five (5) days. LICENSOR shall have the option to purchase within
thirty (30) days all or part thereof at LICENSEE's cost or market value,
whichever is less. Any such purchase shall be F.O.B. LICENSEE's warehouse.
ARTICLE IX - INFRINGEMENT ACTIONS
9.1 Trademark Claims Against LICENSEE - On Licensed Products, LICENSOR
shall defend. indemnify and hold LICENSEE harmless against claims of
trademark infringement brought against LICENSEE pursuant to this Agreement;
provided, nothing hereunder shall be construed to obligate LICENSOR to
defend, indemnify or hold LICENSEE harmless against claims of trademark i
nfringement brought against LICENSEE arising out of acts taken by LICENSEE
not required by this Agreement or approved by LICENSOR in writing.
LICENSOR may, however, elect to defend any such action at its own expense.
If LICENSOR elects not to so defend, LICENSEE may, with the consent of
LICENSOR, defend such action at its own expense. LICENSEE shall not
settle any such action without the consent of LICENSOR.
9.2 Patent Infringement & Wrongful Use Claims Against LICENSEE -
LICENSOR will assume the defense of any suit brought against LICENSEE
for infringement of any patent or for wrongful use of proprietary
information of any third party insofar as such suit is based upon a
claim that the infringement or wrongful use is attributable to LICENSEE's
application without substantial modification of technology supplied under
this Agreement. In any such suit, LICENSOR will indemnify LICENSEE against
any money damages or costs awarded in such suit in respect to such a claim.
The obligations of LICENSOR stated in this Section 9.2 apply only if (i)
LICENSEE promptly informs LICENSOR in writing of any claim within the
scope of this Section 9.2; (ii) LICENSOR is given exclusive control of the
defense of such claim and all negotiations relating to its settlement; and
(iii) LICENSEE provides all reasonable assistance to LICENSOR in all
necessary respects in conduct of the suit.
LICENSOR's total liability in out-of-pocket costs in the defense of any
suit or suits and to pay damages awarded in any suit or suits shall be
limited to the amount theretofore paid to LICENSOR by LICENSEE under this
Agreement, and LICENSEE will advance to LICENSOR any amount required to be
expended by LICENSOR in excess of that
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limit. Amounts so advanced shall be credited to future payments due from
LICENSEE to LICENSOR as a result of LICENSEE's operations under this
Agreement.
The provisions of this Section 9.2 state the entire liability of LICENSOR
to LICENSEE in respect of LICENSEE's use of the technology granted herein,
and. except as specifically provided in this Section, LICENSOR shall not be
liable either directly or as indemnity of LICENSEE for or on account of any
claim arising in any way from LICENSEE's use of the technology.
9.3 Claims by LICENSEE or LICENSOR - In case Trademarks or any of the
Patents are infringed by any third party in the Territory. LICENSEE shall
notify LICENSOR and LICENSOR may, if it chooses, bring suit to enjoin such
infringement. In the event LICENSOR elects not to bring such suit, LICENSEE
may bring such suit upon advice to, and with the consent of, LICENSOR.
Neither party shall settle any such suit without the consent of the other,
which consent shall not be unreasonably withheld. Since actions by LICENSEE
or LICENSOR hereunder are for the protection of LICENSEE's rights within the
Territory, the costs of any actions brought under this Section 9.2 shall be
borne equally by LICENSEE and LICENSOR.
9.4 Indemnification of LICENSOR - Except as otherwise provided in this
Article IX, LICENSEE will hold LICENSOR harmless against all liabilities,
demands. damages, expenses, or losses arising (i) out of use by LICENSEE or
its transferees of inventions licensed or information furnished under this
Agreement or (ii) out of any use, sale or other disposition by LICENSEE of
its inventions or information.
ARTICLE X - SUPPLY AGREEMENT
10.1 Ordering of Licensed Products - LICENSOR agrees to provide the
Licensed Products to LICENSEE. LICENSEE shall be entitled to order and
receive Licensed Products, provided that LICENSEE shall give written notice
of such order to the LICENSOR within the mutually agreed upon lead time as
stated on order acknowledgments. Payment for goods ordered shall be a
confirmed irrevocable (transferable and divisible) letter of credit
(allowing partial shipments and transshipments) confirmed by the LICENSOR's
U.S. Bank, payable upon the presentation of shipping documents.
10.2 Terms and Conditions of Sale - LICENSEE agrees to assemble, use,
import, sell and distribute such components, parts, and/or completely
assembled items of the Licensed Products and other products as may be
necessary for the LICENSEE's use and/or distribution, from LICENSOR, its
Affiliates and/or LICENSOR's suppliers as may be agreed upon in accordance
with such of LICENSOR's forms of Purchase and Terms and Conditions of Sales
as LICENSOR may from time to time establish. Such Terms and Conditions of
Sale shall include provisions relating to price, limited warranty,
delivery,
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title of goods, freight and insurance charges. subrogation of claims and such
other items as are customarily expressed in such documents.
10.3 Force Majeure - LICENSOR shall not be liable for any damage or
penalty for delays in delivery, or complying with the warranty provisions
hereunder, due to acts of God, acts or omissions of LICENSEE, acts of civil
or military authorities, government regulations, or priorities, fire,
floods, epidemics, quarantine restrictions. war, riots, strikes,
differences with suppliers, inability of suppliers to perform, accidents
to machinery, inability to obtain material, delays in transportation,
failure or delay in furnishing complete or correct information by LICENSEE,
impossibility or impracticability of performance or any other cause or
causes beyond the control of LICENSOR, whether or not similar to the
foregoing.
LICENSOR SHALL UNDER NO CIRCUMSTANCES BE LIABLE FOR SPECIAL OR
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CONSEQUENTIAL DAMAGES FOR DELAYS OR FAILURE TO GIVE NOTICE OF
DELAY.
ARTICLE XI - DOCUMENTS DELIVERED UPON CONTRACT EXECUTION
11.1 On the signing of this Agreement, LICENSOR shall deliver to LICENSEE
an affidavit of LICENSOR stating that it has full power and authority to
confer the rights being granted hereunder and no encumbrances of any
nature exist therein, nor are there any agreements of options in existence
which would in any way prohibit the written granting of rights described
in this Agreement.
11.2 The parties agree to do or execute or cause to be done or executed
all such further acts, deeds, instruments or transfer as may be reasonably
required from time to time to effect the rights between the parties hereto.
ARTICLE XII- MISCELLANEOUS
12.1 Survival of Provisions - The provisions of Sections 3.4,5.4, 7.1,
7.2. 8.4,9.1, 9.2, 9.4. 12.1 and 12.8 shall survive any termination of this
Agreement.
12.2 Assignment and Sublicensing - LICENSEE may not sublicense, assign
or transfer this Agreement or any license granted hereunder: provided, that
LICENSEE shall sublicense the Trademarks to any of its subdistributors and
dealers selling the Licensed Products, the sublicense agreements to contain
provisions substantially similar to the provisions of Article V of this
Agreement relating to the protection of Trademarks and to be in form and
substance satisfactory to LICENSOR.
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12.3 No Agency - Nothing contained in this Agreement shall be construed
so as to make either LICENSOR or LICENSEE the agent or partner of the other,
it being the intention of the parties to deal as principals with one another.
12.4 Entire Agreement - This Agreement sets forth the entire Agreement
between the parties as to the subject matter hereof and merges all prior
discussions and writings between them. This Agreement may be amended only
by written instrument duly signed by both parties hereto.
12.5 No Implied Right - Nothing in this Agreement shall be construed
as conferring any right by implication, estoppel or under any patent,
patent applications or trademarks, except as herein expressly provided.
12.6 Notices - All notices, communications, and correspondence required
under this Agreement, or pursuant to the activities which it governs, or
associated with it shall be in writing, shall use United States English only
and shall become effective either when served by personal delivery or by
certified mail addressed as follows (or to such other address for a party
as that party may designate by notice to the other party):
If to LICENSOR: TRB Systems Inc.
000 Xxxxxxxxxx Xxxxxxx
Xxxxx Xx.00
Xxxxxxxxxx, Xxx Xxxxxx 00000
U.S.A.
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Fax: (000) 000-0000
If to LICENSEE: Representative of JYC, Xx. Xxxxx Xxxx, and/or
Indian Partner and TRB, and/or JVC
00-00 Xxxxxxx Xxxx., Xxxxx #00X
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
12.7 Severability - Should any provision of this Agreement or the
application thereof, to any extent, be held invalid or unenforceable,
the remainder of this Agreement and the application thereof shall not
be affected thereby and shall continue valid and enforceable to the fullest
extent permitted by law or equity.
12.8 Arbitration - Any controversy or claim arising out of or relating
to this Agreement, or the breach thereof, shall be settled by arbitration
before one or more arbitrators in New York City, in accordance with the
Commercial Arbitration rules of the American Arbitration Association.
Furthermore, if any controversy or claim arises out of the provisions of
Section 7.1 of this Agreement, LICENSOR may apply to the federal or state
courts located in the State and County of New York for injunctive or interim
relief in aid of arbitration. Judgment upon the award rendered by the
arbitrator(s) in accordance with the aforesaid rules may be entered in
any court having jurisdiction thereof. LICENSEE hereby consents to the
non-exclusive jurisdiction of the federal and state courts located in the
State and County of New York for the sole purpose of the issuance of any
injunctive or interim relief or for the entry of any award as hereinabove
provided.
All trade terms used herein shall have the meaning defined in the
International Chamber of Commerce publication "International Rules for
Interpretation of Trade Terms".
12.9 This agreement supersedes any and all other agreements either
oral or in writing between the parties hereto with respect to the engagement
of "TRB" and "Indian Partner" or between TRB (and/or Xxxxx Xxx) and
"Indian Partner" (and/or Xxxxx Xxxx or Xxxxx Xxxx with his associates).
ARTICLE XIII - GOVERNING LAW
13.1 This Agreement shall be governed by and construed in accordance with
the substantive law of the State of New York and the United States without
regard to principles of conflicts of laws.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first above written.
LICENSEE: LICENSOR:
TRB SYSTEMS, INC.
/s/ Xxxxx Xxxx /s/ /s/ Xxxxx X. Xxx /s/
Xxxxx Xxxx, Representative of JVC Xxxxx X. Xxx, President
WITNESS: WITNESS:
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Name: Name:
Company or Address: Company or Address:
w:\data\client\10006\WP\licagree.208
APPENDIX I
Licensed Products
All Transbar Bicycles including but not limited to those listed below:
(1) TRB 190
(2) TRE 240
(3) TRB 250
(4) TRB 500
(5) TRE 1000
(6) TRB 100 (BMX)
(7) TRB 300 (Cruiser)
Also includes but not limited to all special parts listed below:
(a) Rear hub assembly
(b) See-saw idler assembly
(c) Lever and Transbar assembly
(d) Gearshift lever
(e) Special chain connecting cable
(f) All service parts of above assemblies
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APPENDIX II
Territory
THE ENTIRE COUNTRY OF INDIA
APPENDIX III
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Patents
A patent application in the Territory for an improvement in the
Licensed Products is in the course of preparation
APPENDIX IV
Trademarks
09152\001\SS2600\9061TA\3473.1/10/21/93
APPENDIX V
License Fees
(i) Payment of the $750,000 (seven hundred seventy five thousand U.S.
dollars) License Fee set forth in the License and marketing Agreement
shall be made by Indian Partner on behalf of the Joint Venture Company as
follows:
$100,000 (one hundred thousand U.S. dollars) is due upon execution of this
Agreement;
$75,000 (seventy-five thousand U.S. dollars) is due by January 15, 1996.
$75,000 (seventy-five thousand U.S. dollars) is due by February 15,1996.
$500,000 (five-hundred thousand U.S. dollars) is due by December 22,1996
or before Indian domestic marketing and sales is ready, whichever comes
first.
(ii) In addition to the License Fee, the Joint Venture Company shall
pay to TRB the royalties set forth in the Licensing and Marketing Agreement
which shall be paid to TRB's account (or MOTIONPLUS INT'L Corporation) in
the United States or as otherwise instructed in writing by TRB from time
to time.
Royalties
Year 1- Five percent (5%) of Gross Sales, but not less than U.S.$100,000
(one hundred thousand U.S. dollars)
Year 2- Five percent (5%) of Gross Sales, but not less than U.S.$220,000
(two hundred twenty thousand U.S. dollars)
Year 3 and every year thereafter - Four percent (4%) of Gross Sales, but
not less than U.S.$350,000 (three hundred and fifty thousand U.S. dollars)
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APPENDIX VII
Promotional Activities
LICENSEE must provide and participate in such promotional activities and
production of materials to support, promote, and generate full sales
potential of Licensed Product.
LICENSOR will make available to LICENSEE at its cost all promotional
and advertising materials and printed service literature.
APPENDIX VIII
Terms and Conditions of Sale
Payment - By irrevocable (transferable and devisable) letter of credit
allowing partial shipments and transshipments in favor of LICENSOR,
payable upon presentation of shipping documents to LICENSOR's bank.
Remarks - All orders are subject to final confirmation by LICENSOR
Sales Forecast - LICENSEE will provide LICENSOR twelve (12) month sales
forecast by month by model with sixty (60) day lead time updated by month.
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EXHIBIT I CONFIDENTIALITY AGREEMENT- PR0PRIETARY INFORMATION
PRODUCT IMPROVEMENT AND CONFIDENTIALITY AGREEMENT
Gentlemen:
The following confirms an agreement between me and ____________ hereinafter
referred to as "LICENSEE" which is a material part of the consideration for
my employment or affiliation with
LICENSEE:
1. I recognize that the LICENSEE has entered into an agreement with
TRB Systems Inc. hereinafter referred to as the "Company", which Company
is engaged in a continuous program of research, development and production
respecting its products, patents and know-how, hereinafter referred to as
"Proprietary Information."
2. I understand that my employment or affiliation with LICENSEE
creates a relationship of confidence and trust between me and the
LICENSEE with respect to any Proprietary Information.
3. In consideration of my employment or affiliation with the
LICENSEE, I hereby agree as follows:
(a) I understand and agree that I have no rights in any Proprietary
Information of the Company or the LICENSEE. At all times, both during my
employment or affiliation with the years, I will keep in confidence and
trust all Proprietary Information, and I will not use or disclose any
Proprietary Information, and I will not use or disclose any Proprietary
Information or anything relating to it without the written consent of the
LICENSEE and the Company, except as may be necessary in the ordinary course
155
of performing my duties with the LICENSEE. I will at all times fully and
accurately document any Proprietary Information or Inventions (as
hereinafter defined) developed by me so that at all times the LICENSEE
shall have in its possession descriptions and directions with respect
thereto that will enable the LICENSEE and its assigns to utilize such
Proprietary Information and Inventions to their full benefit.
b) All documents, records, apparatus, equipment and other physical
property, whether or not pertaining to Proprietary Information, furnished
to me by the LICENSEE or produced by myself or others in connection with my
employment or affiliation shall be and remain the sole property of the
LICENSEE or its assigns and shall be returned to it immediately as and when
requested by the LICENSEE. Even if the LICENSEE does not so request,
I shall return and deliver all such property upon termination of my
employment or affiliation by
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me or by the LICENSEE for any reason and I will not take with me any such
property or any reproduction of such termination. I will keep all
information relating to the Proprietary Information confidential during
my empIoyment or affiliation and for three years thereafter.
(c) I will promptly disclose to the LICENSEE or any persons
designated by it, all improvements, inventions, ideas, formulas, processes,
techniques, know-how and data, whether or not patentable, made or
conceived or reduced to practice or learned by me, either alone or jointly
with others, during the term of my employment or affiliation (all said
improvements, inventions, formulas, processes. techniques, know-how
and data shall be hereinafter collectively called "Inventions").
(d) I agree that all Inventions which I developed in whole or in part,
either alone or jointly with others utilizing equipment, supplies,
facilities or Proprietary Information of the LICENSEE or its assigns or
during my periods of employment or affiliation with the LICENSEE shall be
the sole property of the LICENSEE and its assigns, and the LICENSEE and its
assigns shall be the sole owner of all patents and other rights in connection
therewith. I hereby assign to the LICENSEE and its assigns any rights I may
have to acquire in such Inventions. I further agree as to all such
Inventions to assist the LICENSEE and its assigns in every proper way
but shall not bear the expenses involved) to obtain and from time to time
enforce patents on said Inventions in any and all countries, and to that end
I will execute all documents for use in applying for and obtaining such
patents thereon and enforcing same, as the LICENSEE or its assigns may
desire, together with any assignments thereof to the LICENSEE or persons
designated by it.
My obligations to assist the LICENSEE or its assigns in obtaining of and
enforcing patents for such inventions in any and all countries shall
continue beyond the termination of my employment or affiliation for a
period of three years, but the LICENSEE or its assigns shall compensate
me at a reasonable rate after such termination for time actually spent by
me on such assistance.
In the event that the LICENSEE is unable for any reason whatsoever to
secure my signature to any lawful and necessary document required to
apply for or execute any patent applications with respect to such an
Invention (including renewals, extensions, continuations, divisions or
continuations in part thereof), I hereby irrevocably designate and
appoint the LICENSEE and its duly authorized officers and agents, to its
assigns, as my agents and attorneys-in-fact to act for and in my behalf
and instead of me, to execute and file any such application and to do
all other lawfully permitted acts to further the prosecution and issuance
of patents thereon with the same legal force and effect as if executed by me.
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(e) I represent that my performance of all terms of this Agreement will
not breach any agreement to keep in confidence any proprietary
information acquired by me in confidence or in trust prior to my
156
employment or affiliation with the LICENSEE. I have not entered
into, and agree I will not enter into, any agreement either written
or oral in conflict with the obligations set forth in this Agreement.
(f) I represent that I did not learn during my prior employment or
affiliation any ideas or information which the LICENSEE indicated were
considered confidential and proprietary or which were disclosed to me in
a manner which should have made me realize they were so considered.
(g) If I cannot make the representation provided in (f) I approve,
I will check the following box:
( ) I cannot make the representation in paragraph (f) above.
If I checked the above box, I hereby represent that I will not make use of
any such confidence and proprietary information or ideas during my
employment or affiliation with the LICENSEE unless such information or
ideas during my employment by the LICENSEE or become publicly available
for reasons other than actions on my part.
4. This Agreement shall be effective as of the first day of my
employment or affiliation with the LICENSEE.
5. This Agreement shall be binding upon me, my heirs, executors,
assigns, and administrators and shall insure to the benefit of the
Company, its successors.
Accepted and Agreed to (date):
SIGNED:
NAME AND TITLE:
COMPANY NAME:
WITNESS:
LICENSEE:
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