LICENSE AGREEMENT
THIS AGREEMENT is made effective as of the thirty-first day of December, 1999
("Effective Date"), between TECHNOLOGY RESEARCH CORPORATION, a corporation
organized under the laws of the State of Florida, United States of America
(herein "TRC"), having its registered office at 0000 000xx Xxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxx 00000, and WINDMERE-DURABLE HOLDINGS, INC. (hereinafter
"WINDMERE"), a corporation organized under the laws of the State of Florida,
United States of America, having its principal office at 0000 Xxxxx Xxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxxxx 00000.
WHEREAS, TRC has developed expertise and technology used in a product offering
shock detection, insulation failure detection, flame detection and an automatic
shut-off feature ("SAFETY CIRCUIT"); and
WHEREAS, TRC represents and warrants that it is the owner of all rights in and
to inventions described and claimed in United States Patent Application, as
identified in attached Schedule A;
WHEREAS, TRC represents and warrants that it has the legal power to extend the
licenses granted to WINDMERE under the Licensed Patents (as hereinafter
defined); and
WHEREAS, WINDMERE is desirous of obtaining licenses pursuant to the terms,
conditions and limitations hereinafter set forth under the Licensed Patents and
to use the technical information and data that shall be conveyed by TRC to
WINDMERE pursuant to this Agreement.
ARTICLE I
Definitions
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Section 1.1 Licensed Patents
The term "Licensed Patents" shall mean the
(i) United States patent applications listed on Schedule A, additional
counterpart applications filed in the future in the Territory (as hereinafter
defined) by TRC;
(ii) all patents issuing from the patent applications defined in (i)
above;
(iii) all divisions, continuations, continuations-in-part, reissues,
reexaminations or extensions of the patents or patent applications defined in
(i) and (ii) above; and
(iv) Improvement Patents (as hereinafter defined in Section 2.2).
Section 1.2 Licensed Products
The term "Licensed Products" shall mean consumer electrically operated food
cooking appliances, specifically toasters and toaster ovens incorporating the
SAFETY CIRCUIT.
Section 1.3 Subsidiaries
The term "Subsidiaries" shall mean companies which during the Term, directly
or indirectly, are controlled by WINDMERE. A company is controlled by
ownership of more than fifty percent (50%) of the capital stock entitled to
vote for directors or persons performing a function similar to that of
directors.
Section 1.4 Territory
The term "Exclusive Territory" shall mean Canada, the United States, Mexico
and each of their respective possessions and territories. The term
"Non-Exclusive Territory" shall mean all countries of the world other than the
countries comprising the Exclusive Territory.
Section 1.5 Improvements
The term "Improvements" means any modification of the SAFETY CIRCUIT described
in a Licensed Patent, provided such modified SAFETY CIRCUIT, if unlicensed,
would infringe one or more claims of such Licensed Patents.
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Section 1.6 Additional Licensed Products
The term "Additional Licensed Products" shall mean further categories of
products incorporating the SAFETY CIRCUIT.
ARTICLE II
Grant
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Section 2.1 Grant of License
TRC grants and agrees to grant to WINDMERE and its Subsidiaries throughout the
Term (with the right to sublicense on the terms and conditions set forth
herein), an exclusive license in the Exclusive Territory under the Licensed
Patents to make, have made for its own account, use, import, offer to sell,
sell and otherwise dispose of Licensed Products. TRC further grants and agrees
to grant to WINDMERE and its Subsidiaries throughout the Term (with the right
to sublicense according to the terms and conditions set forth herein) a non-
exclusive license in the Non-Exclusive Territory under the Licensed Patents to
make, have made for its own account, use, import, offer to sell, sell, and
otherwise dispose of Licensed Products. The licenses granted under this
Section 2.1 to WINDMERE and its Subsidiaries shall extend throughout the
Territory. The exclusive license granted pursuant to this Section 2.1 shall
extend for a period of one year from May 31, 2000. At the expiration of the
one year period, the exclusive license granted pursuant to this Section 2.1
shall automatically convert to a non-exclusive license under the same terms
and conditions.
Section 2.2 Improvement Inventions
TRC further agrees to grant to WINDMERE and its Subsidiaries licenses of the
scope specified in Section 2.1 in respect to inventions, whether patentable or
otherwise, developed, or otherwise acquired by TRC on any Improvements, which
inventions are developed or acquired before the termination or expiration of
the Term. Any patents on Improvements shall, when issued, be added to
Schedule A.
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Section 2.3 Technical Information
TRC shall provide in English language to WINDMERE, at no cost or charge, and
at the time WINDMERE makes the first payment provided in Section 3.2, all
written reports, test data, prototypes, written product information, sourcing
information (if any) for components of the SAFETY CIRCUIT, engineering drawings
in either computer or hard copy form, calculations, and any and all data and
information of a similar nature ("Information") to enable Windmere or its
Subsidiaries to manufacture the SAFETY CIRCUIT. TRC represents and warrants
that it has no knowledge that practice of the subject matter disclosed in the
Licensed Patents or in the Information infringes patents or other intellectual
property rights of third parties.
Section 2.4 Confidentiality
WINDMERE shall retain Information provided pursuant to Section 2.3 in
confidence, both during and subsequent to the Term of this Agreement, subject,
however, to the conditions that no such obligation on the part of WINDMERE
shall apply if such Information was known by WINDMERE based upon written
evidence prior to first receipt of same from TRC; is now or through no act or
failure to act on the part of WINDMERE becomes generally known to the public;
is properly furnished to WINDMERE by a third party without restriction on
disclosure; is developed independently by a third party and furnished to
WINDMERE; is disclosed pursuant to an Order from a court or other governmental
authority; or is developed independently by an employee of WINDMERE who has not
been privy to the Information. WINDMERE's obligation to maintain the
Information in confidence shall expire eighteen (18) months after termination
of this Agreement. Notwithstanding anything herein to the contrary, WINDMERE
shall have the right to use the Information in the exercise of its license
under Section 2.1 herein.
Section 2.5 Option
WINDMERE shall have the option ("Option") to acquire all or part of the
Licensed Patents pursuant to the terms of a separate Letter Agreement between
WINDMERE and TRC.
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Section 2.6 Additional Licensed Products
During the Term of this Agreement, WINDMERE shall have both the right of first
option and the right of first refusal to add Additional Licensed Products to
this Agreement. If WINDMERE decides to exercise its rights, it shall pay TRC a
non-refundable fee of Twenty-Five Thousand Dollars (US $25,000.00) for each
category of Additional Licensed Products. As used herein the term "category"
means a type of product defined by a task, such as, by way of example and not
limitation, garment care, heaters, fans, beverage makers and the like. Upon
payment of the Twenty-Five Thousand Dollar (US $25,000.00) fee, TRC grants and
agrees to grant to WINDMERE and its Subsidiaries for a period of one (1) year
an exclusive license under the Licensed Patents in the Exclusive Territory, and
a non-exclusive license under the Licensed Patents in the Non-Exclusive
Territory, to make, have made for its own account, use, import, offer to sell,
sell, and otherwise dispose of Additional Licensed Products in the category.
As consideration for the Twenty-Five Thousand Dollar (US $25,000.00) payment,
TRC shall perform the necessary engineering tasks associated with adapting the
SAFETY CIRCUIT to the Additional Licensed Products and assist WINDMERE in the
process of obtaining U.L. certification for any Additional Licensed Products
that are covered by the payment of the aforementioned fee. The one (1) year
period for the exclusive license(s) granted pursuant to this Section 2.6 shall
commence upon the date that TRC shall deliver to WINDMERE functional drawings
adapting the SAFETY CIRCUIT to the Additional Licensed Products. At the
expiration of the one (1) year period, the exclusive license granted pursuant
to this Section 2.6 shall automatically convert to a non-exclusive license
under the same terms and conditions. The license granted under this
Section 2.6 to WINDMERE and its Subsidiaries shall extend throughout the
Exclusive and Non-Exclusive Territories.
ARTICLE III
Compensation
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Section 3.1 Royalties
Royalties shall be paid by WINDMERE to TRC throughout the Term at the rate
set forth in Schedule B.
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Section 3.2 Initial License Fee
In return for the exclusivity rights granted pursuant to Section 2.1, WINDMERE
shall pay to TRC an initial license fee of Two Hundred Fifty Thousand Dollars
(US $250,000.00) payable as of the Effective Date of this Agreement.
Section 3.3 Royalty Credit
WINDMERE shall receive a five percent (5%) credit towards the payment of any
royalties due TRC pursuant to Section 3.1.
Section 3.4 Underwriters Laboratories Approval
TRC shall assist WINDMERE in the process of obtaining U.L. certification for
Licensed Products and Additional Licensed Products.
Section 3.5 Most Favored Licensee
If TRC, after expiration of the exclusivity period, grants a license to any
third party for a Licensed Product containing provisions that require
payments at rates of royalty less than provided for in Schedule B hereof, TRC
shall promptly notify WINDMERE of those royalty provisions. WINDMERE shall
then be entitled, upon written request to TRC, to the more favorable royalty.
ARTICLE IV
Reports and Payments
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Section 4.1 Statement
Within forty-five (45) days after the end of each quarter year on the last day
of March, June, September and December of each calendar year during the Term,
WINDMERE shall furnish TRC with written statements reflecting WINDMERE's
production of all Licensed Products during the preceding calendar quarter and
shall pay the royalties due pursuant to Article III. The first statement
submitted under this Agreement shall cover the period commencing with the first
sale of Licensed Products to the end of the quarter being reported. All
royalties and other payments to be made pursuant to this Agreement shall be
payable by WINDMERE in United States dollars to TRC at its address specified
in Section 6.12 hereof.
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Section 4.2 Accounts
WINDMERE shall keep for three (3) years after the date of submission of each
statement, true and accurate records and books of accounts containing all the
data reasonably required for the verification of WINDMERE's manufacture of
Licensed Products. WINDMERE shall permit a public accountant to inspect such
records and books of account at WINDMERE's premises during normal business
hours provided reasonable prior notice is given to WINDMERE, and all expenses
associated with such inspection are borne by TRC.
ARTICLE V
Term and Termination
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Section 5.1 Term
This Agreement shall commence as of the Effective Date and continue in force
until the expiration of the last Licensed Patent unless sooner terminated by
TRC or WINDMERE as hereinafter provided, or unless WINDMERE exercises its
Option pursuant to Section 2.5.
Section 5.2 Termination on Default
If TRC or WINDMERE shall at any time default on any payments due in
accordance with this Agreement, or in fulfillment of any of the other
obligations or conditions hereof, the non-defaulting party shall give notice of
such default specifying the reasons therefor. If such default is not cured
within sixty (60) days of such notice, the non-defaulting party shall then have
the right in its discretion to terminate this Agreement by giving written
notice of termination. This Agreement shall terminate on the tenth (10) day
after such notice is given.
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Section 5.3 Termination on Insolvency
In the event that WINDMERE shall cease conducting business in the normal
course, become insolvent, make a general assignment for the benefit of
creditors, or suffer or permit the appointment of a receiver for its business
or assets, then this Agreement shall terminate automatically effective on the
date of such event.
Section 5.4 Waiver of Default
No failure or delay on the part of TRC or WINDMERE in exercising its right of
termination hereunder for any one or more defaults shall be construed to
prejudice its right of termination for such or for any other or subsequent
default.
ARTICLE VI
Additional Provisions
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Section 6.1 Offensive Litigation
If either TRC or WINDMERE knows or has reason to believe that any Licensed
Patent is being infringed, either directly or indirectly or contributively or
otherwise by a third party, the party possessing such knowledge or belief shall
promptly notify the other party thereof.
While and as long as TRC is the owner of Licensed Patents, TRC at its own
discretion and judgment may take action to terminate such infringement.
WINDMERE agrees to cooperate with TRC in such enforcement. If TRC initiates
litigation for enforcement of the Licensed Patents against a third party, all
reasonable expenses associated with any such legal suits or proceedings
incurred by WINDMERE in relation to all aspects of such suits, including
defenses to any counterclaims and cross-claims that may be asserted by third
party defendants, shall be borne by TRC. If WINDMERE is joined in any lawsuit
brought by TRC, either voluntarily or involuntarily, TRC shall provide counsel
for WINDMERE (who may at TRC's option also be the same counsel who represents
TRC) at TRC's sole expense. TRC shall be entitled to all amounts received from
third parties resulting from settlement or enforcement of the suits alleging
infringement of Licensed Patents.
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Should TRC decline to exercise a right of enforcement or bring suit to
terminate any infringement of any Licensed Patents, then WINDMERE may, at its
own discretion, bring such an action and incur all expenses and attorney fees
and keep all proceeds of any such actions. In such an instance, TRC agrees to
cooperate with WINDMERE in such enforcement. If TRC is joined in any lawsuit
brought by WINDMERE, either voluntarily or involuntarily, WINDMERE shall
provide counsel for TRC (who may at WINDMERE's option also be the same counsel
who represents WINDMERE) at WINDMERE's sole expense. If TRC desires counsel of
its own to represent it in such suits, TRC shall have the right to designate
its own counsel. TRC shall pay its own designated attorney fees.
Section 6.2 Patent Validity
In the event of any challenge in any judicial or administrative forum relating
to the validity or enforceability of any Licensed Patent, any obligation
specified in this Agreement to pay royalties to TRC shall continue unless and
until the challenged patent has been finally determined, without possibility of
appeal, by duly constituted judicial or administrative authority in the country
in question, to be invalid and/or unenforceable ("Finally Determined"). Once
any Licensed Patent has been held invalid at trial, all subsequent royalty
payments due TRC shall be paid into an escrow account established by WINDMERE
for receipt of said royalty payments. In the event a Licensed Patent is
Finally Determined not invalid, the monies from the escrow account shall be
paid to TRC. In the event the Licensed Patent is Finally Determined invalid,
the monies from the escrow account shall be paid to WINDMERE, and WINDMERE
shall have no further obligation to pay the royalties set forth in Schedule B;
provided, however, if TRC has other Licensed Patents covering Licensed
Products, then WINDMERE's obligation to pay TRC royalties shall continue, and
TRC shall be entitled to receive the monies from the escrow account.
Section 6.3 Assignment
This Agreement may be assigned by WINDMERE without TRC's consent with the
disposition of all or a substantial portion of the business to which this
Agreement relates provided, however, that such assignee shall have agreed in
writing with TRC to assume all of the obligations of
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WINDMERE and at any other time by WINDMERE only with the prior written consent
of TRC. This Agreement may be assigned by TRC under the same terms and
conditions by which WINDMERE may assign the Agreement. This Agreement shall
extend to and be binding upon the parties hereto, their successors and
permitted assigns.
Section 6.4 Construction
This Agreement will be governed by and construed in accordance with the laws
of the State of Florida, without regard to its law of conflicts. The headings
of Articles and Sections in this Agreement are intended solely for convenience
of reference and shall not be considered in construing this Agreement.
Section 6.5 Extraneous Writings
This Agreement constitutes the entire understanding between the parties with
respect to the subject matter hereof; all prior agreements, drafts,
representations, negotiations and undertakings are superseded hereby. No
amendment to this Agreement shall be effective unless it is in writing and
signed by duly authorized representatives of both parties.
Section 6.6 Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together constitute
one and the same Agreement.
Section 6.7 Patent Marking
WINDMERE agrees to place, and cause its Subsidiaries to place, in a
conspicuous location on each Licensed Product sold in the United States, a
patent notice in the form authorized by 35 U.S.C. Section 287 setting forth
the number of each United States Letters Patent licensed under this Agreement,
and agrees further to similarly place the patent notice on each Licensed
Product sold by WINDMERE or its Subsidiaries in the other countries within the
Territory, in the manner and form as may be requested reasonably by TRC from
time to time during the Term.
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In addition, WINDMERE agrees to use the trademark "FIRE SHIELD" to identify
the SAFETY CIRCUIT used in Licensed Products. WINDMERE shall attribute
ownership of the trademark "FIRE SHIELD" to TRC.
Section 6.8 Negation of Agency and Similar Relationships
Nothing herein contained shall be deemed to create an agency, joint venture or
partnership relationship between the parties hereto.
Section 6.9 Enforceability
The illegality of any clause or paragraph in this Agreement shall not affect
the enforceability of the remaining portions of this Agreement unless said
clause or paragraph is an essential, material portion of the Agreement, in
which case the parties agree to negotiate in good faith with respect to
modification of said clause or paragraph.
Section 6.10 Vicarious Performance
WINDMERE may perform any of its duties and obligations hereunder through any of
its Subsidiaries, and performance by any Subsidiary shall be deemed to be
performance by WINDMERE. Any rights granted hereunder to WINDMERE may be
exercised by any of its Subsidiaries. Any Subsidiary performing any of
WINDMERE's duties and obligations or exercising its rights shall conclusively
be deemed to be bound by the terms of this Agreement as if a signatory hereto.
WINDMERE shall be fully liable for breach of the terms of this Agreement by any
Subsidiary.
Section 6.11 News Release
No news release relating to the subject matter of this Agreement shall be
issued by either party without the express written approval of the other party.
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Section 6.12 Notice
All notices, payments or statements given under this License Agreement shall
be in writing and shall be deemed to have been properly given when delivered
personally or sent by prepaid registered or certified mail, or by facsimile or
electronic transmission to the following addresses:
If given to TRC:
TECHNOLOGY RESEARCH CORPORATION
Attention of Xx. Xxx Xxxxxxx
0000 000xx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000.
If given to WINDMERE:
WINDMERE-DURABLE HOLDINGS, INC.
Attention of Xx. Xxxxx X. Xxxxxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000,
with a copy to:
Xxxxx X. Deutsch, Esq.
Windmere-Durable Holdings, Inc.
Six Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000.
The date of service shall be deemed to be the date on which such notice,
payment or statement was personally delivered, posted, or sent by facsimile or
electronic transmission. Either party may give written notice of a change of
address, and after notice of such change has been received, any notice, payment
or statement thereafter shall be given to such party as herein provided at such
changed address.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
in their names by their proper officers thereunto duly authorized.
WINDMERE-DURABLE HOLDINGS, INC.
By /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Title C.O.O.
Date December 31, 1999
TECHNOLOGY RESEARCH CORPORATION
By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Title President
Date December 31, 1999
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SCHEDULE A
Patent Application Serial Number
Filing Date entitled "Protection System
For Devices Connected to an
an Alternating Current
Electrical Power Supply
(Attorney Docket TRC-P-42)
SCHEDULE B
WINDMERE shall pay TRC a royalty of US $0.05 for each of the first million
(1,000,000) Licensed and Additional Licensed Products manufactured by or for
WINDMERE.*
WINDMERE shall pay TRC a royalty of US $0.10 for each Licensed and Additional
Licensed Products manufactured by or for WINDMERE in excess of one million
(1,000,000) units.*
*Each of the royalty payments above shall be
discounted by five percent (5%) per Section 3.3.
