LICENSE AGREEMENT
This License Agreement is entered into on this ____ day of February, 1997, by
and between U.S. Electricar, Inc., a California corporation (hereinafter
referred to as "Licensor"), and Hyundai Motor Company and Hyundai Electronics
Industries Co., Ltd. (hereinafter jointly referred to as "Licensee").
WITNESSETH:
WHEREAS, Licensor has acquired or developed considerable technical information
and expertise relating to the design, assembly, manufacture and sale of the
Panther-TM- Systems; and
WHEREAS, Licensee desires to secure from Licensor the right to use such
technical information and expertise in order to develop, manufacture, assemble,
sell and distribute the Panther-TM- Systems; and
WHEREAS, it is the mutual intent of the parties to set forth the terms and
conditions under which Licensor will permit Licensee to use said technical
information.
NOW, THEREFORE, the parties hereby agree as follows:
I. DEFINITIONS
(A) "Licensed Panther-TM- Systems" as used herein shall mean Propulsion Systems
for Electric Vehicles which are or will be developed by Licensor during the term
of this License Agreement, including upgrades to said systems developed by
Licensor, all of which may be assembled by Licensee, or Licensee's designated
manufacturer, in accordance with the Technical Data. Notwithstanding the
foregoing, Licensor may customize a propulsion system exclusively for a customer
other than Licensee using Technical Data and the Licensed Panther-TM- Systems
("Customized System").
(B) "Licensed Component(s)" as used herein shall mean such parts of the
Licensed Panther-TM- Systems as are designed and manufactured by Licensor at its
plants and identified in Exhibit A attached hereto, all of which Licensed
Components may be manufactured by Licensee in accordance with the Technical
Data.
(C) "Licensed Item(s)" as used herein shall mean Licensed Panther-TM- Systems
and Licensed Component(s).
(D) "Technical Data" as used herein shall mean such technical data and any
patents relating thereto, assembly, subassembly and parts drawings, and
applicable material specifications,
Page 1 of 8
stamping, casting and forging drawings, labor and tool routing sheets, process
specifications, drawings of special tools, fixtures, dies, jigs, gauges and
patterns, and production and inspection procedures as are designed or created by
Licensor and used by it in the development and assembly of Licensed Panther-TM-
Systems, and the manufacture of Licensed Components, and which are specified in
Exhibits A and B attached hereto and incorporated herein by this reference.
(E) "Korea" as used herein means the territory of Korea.
II. GRANT
Subject to the terms and conditions of this License Agreement, Licensor hereby
grants to Licensee license to use Technical Data in the manufacture and assembly
of Licensed Panther-TM- Systems, and the manufacture and assembly of Licensed
Components for use in such Licensed Items, for the following purposes:
1) Use within motor vehicles built by Licensee or built by subsidiaries
owned more than fifty percent (50%) by Licensee (hereinafter referred to as
"Licensee Motor Vehicles"), or for use as spare parts for such Licensee Motor
Vehicles;
2) The manufacturing and distributing licenses to the Licensed Panther-
TM- Systems shall also be exclusive to HMC for the territory of Korea; and
3) Motor vehicles manufactured pursuant to this Article II may be
exported to any other country.
III. OWNERSHIP OF TECHNICAL DATA AND LICENSED ITEMS
(A) During the term of this License Agreement, the Technical Data and the
Licensed Items shall remain owned by Licensor. In addition to any other rights
it may have, Licensor expressly retains the right to customize a propulsion
system exclusively for a customer other than Licensee, provided that:
(B) Nothing in this License Agreement shall be deemed to constitute a transfer
of title, or any interest other than a license, in the Technical Data or the
Licensed Items.
(C) Any improvements, enhancements, and/or modifications made by Licensee to
the Technical Data or the Licensed Items shall be the property of Licensee.
Licensor shall have a fully-paid, worldwide, non-exclusive license to use,
manufacture, sell, distribute and sublicense such improvements, enhancements,
and/or modifications. The obligations of Licensee to provide Licensor with
information regarding any improvements, enhancements or modifications to the
technology is expressly understood to be ongoing. In furtherance of this
obligation, Licensee xxxx
Xxxx 2 of 8
meet at least quarterly with Licensor to review the status of transfer of
technical data, as well as progress on improvements, updates or upgrades
thereto.
(D) Any improvements, enhancements, and/or modifications made by Licensor to
the Technical Data shall be the property of Licensor. Licensee shall have such
license rights in the improvements, enhancements, and/or modifications made by
Licensor as have been granted to Licensee in Article II above. The obligations
of Licensor to provide Licensee with information regarding any improvements,
enhancements or modifications to the technology is expressly understood to be
ongoing. In furtherance of this obligation, Licensor will meet at least
quarterly with Licensee to review the status of transfer of technical data, as
well as progress on improvements, updates or upgrades thereto
(E) The parties agree to cooperate with and to assist each other in protecting
the intellectual property rights to the Technical Data, the Licensed Items, and
any improvements, enhancements, and/or modifications made thereto by Licensee or
Licensor, including assistance in filing for patent protection worldwide. The
parties agree that this is one of the material terms of this License Agreement,
and each recognizes the importance of protecting the intellectual property and
providing assistance in filing for patent protection worldwide. Each party
further agrees that these obligations are expressly understood to be ongoing
throughout the term of this License Agreement.
IV. DISCLOSURE OF TECHNICAL DATA
(A) Licensor shall supply the Technical Data to Licensee as requested by
Licensee during the term of this License Agreement. Unless the parties shall
otherwise agree, the Technical Data shall be supplied in written form at the
office of Licensor located in Torrance, California. In addition, Licensor shall
also supply to Licensee identification listings of basic manufacturing and
inspection equipment for use by the latter in connection with the development,
assembly and manufacture of Licensed Items.
(B) In no event shall Licensor disclose or supply any Technical Data to
Licensee on or after the date of termination of this License Agreement. All
Technical Data to be supplied under the terms of this License Agreement shall be
in the language and the system of measures used by Licensor.
(C) The Technical Data is confidential. Licensee shall preserve and protect
the confidential nature of the Technical Data, and accordingly shall not
disclose the Technical Data to third parties without the written consent of
Licensor. Said consent will not, however, be required in order to disclose the
Technical Data to the following parties, provided that, in each case, said
parties shall agree in writing that (i) the Technical Data will only be used to
develop, assemble, and manufacture Licensed Items under this License Agreement,
and (ii) the Technical Data shall not be disclosed to third parties.
Page 3 of 8
1. To those of their respective employees necessary to enable Licensee
and/or Licensee's designated manufacturer to manufacture and assemble Licensed
Panther-TM- Systems and Licensed Components.
2. To suppliers of Licensee and/or Licensee's designated manufacturer to
the extent necessary to enable such suppliers to deliver to Licensee and/or
Licensee's designated manufacturer the materials and components required to
manufacture and assemble Licensed Components and Licensed Panther-TM- Systems.
3. To subcontractors and sub-subcontractors of Licensee and/or Licensee's
designated manufacturer to the extent necessary to enable such subcontractors
and sub-subcontractors to perform work required to manufacture and assemble
Licensed Components and Licensed Panther-TM- Systems.
The disclosures permitted under (1), (2) and (3) above of this Article IV shall
not relieve Licensee, or permitted third parties under this License Agreement,
of the obligation to maintain the Technical Data in confidence.
(D) Notwithstanding the foregoing, the obligation provided for in this Article
IV shall not apply to any information: 1) which is already known to Licensee at
the time of disclosure; or 2) which becomes lawfully known to the public through
sources other than Licensee; and 3) which is received by Licensee from a third
party where the disclosure by the third party is not in violation of any law or
contract.
V. TECHNICAL ASSISTANCE
(A) Licensor shall use its reasonable efforts to furnish, upon written request
of Licensee, the services of engineers, and/or technicians ("technicians") in
Korea to assist Licensee in acquiring knowledge and training relating to the
development or assembly of Licensed Panther-TM- Systems and manufacture of
Licensed Components in accordance with the Technical Data (hereinafter referred
to as "Technical Assistance"). Such technicians shall be made available to
Licensee for reasonable periods of time throughout the term of this License
Agreement. Subject to the agreement on the terms of visit, Licensee agrees to
pay for the out-of-pocket expenses incurred by such technicians in providing
said services, such expenses to include airfare, room and board.
(B) Licensor shall permit a reasonable number of Licensee's employees to visit
the plants of Licensor for reasonable training periods to enable Licensee's
employees to gain knowledge with respect to the assembly of Licensed Panther-TM-
Systems and the manufacture of Licensed Components in accordance with the
Technical Data and training program. Licensor and Licensee shall consult and
agree upon the number of Licensee's employees to visit and the duration of the
visits, it being understand that the aggregate duration of all such visits
during any one (1) year
Page 4 of 8
shall not exceed sixty (60) man-days unless Licensor shall otherwise agree. All
salaries, costs and expenses of Licensee's technicians for such periods of
training shall be paid by Licensee.
(C) All employees or other representatives of either party hereto, while at the
premises of the other party, shall comply with all the then regularly
established and existing rules and regulations of such other party.
VI.INDEMNITIES
(A) Licensor shall not be liable to Licensee for any claim by any third party
for personal injury or property damages based on breach of warranty or products
liability allegedly due to a defect in a motor vehicle manufactured by HMC and
using the Technical Data or Technical Assistance transferred under this
Agreement. Specifically, Licensor shall not be liable for claims of personal
injury or damage to property based on the design, manufacture, or assembly of
Hyundai motor vehicles utilizing the Technical Data or Technical Assistance.
Nevertheless, with respect to a claim made where the claim is based solely on an
alleged defect in the Technical Data or Technical Assistance, Licensor shall
defend and indemnify Licensee with respect to such claim. If a claim is made
where the claim is based on both: (i) an alleged defect in the Technical Data
or Technical Assistance; and (ii) an alleged defect in the design, materials or
workmanship produced by Licensee; then each party shall bear its own costs of
suit and its allocable share of any damages.
(B) Licensor warrants and represents that (i) it is the Licensor and proprietor
of all right, title and interest in and to the Technical Data; (ii) it has the
right and authority to enter into this Agreement and to license the Technical
Data to Licensee in accordance with the terms hereof, and as of the date hereof,
has no actual knowledge of any claim that the Technical Data infringes any
copyright, patent, trade secret or other proprietary rights of any third party,
and (iii) the performance of the terms of this Agreement and of Licensor's
duties to Licensee hereunder will not breach any separate agreement or
arrangement by which Licensor is bound.
(C) Licensor hereby agrees to defend, indemnify and hold Licensee, its
directors, shareholders, agents, officers, employees, authorized assignees and
successors in interest harmless from and against any claims, suits, losses,
damages, judgments, fines, costs, expenses, obligations, recoveries and
deficiencies, including penalties, interests, and reasonable attorney fees, and
all liability that Licensee may incur or suffer resulting from any claim of
infringement of any patent, copyright, trademark, trade secret or any other
intellectual property right of any third party by the Technical Data or
resulting from its use under this Agreement.
(D) Where indemnification is required or appears probable pursuant to
paragraphs (A) and (C) herein, the Licensee shall provide prompt written notice
to the Licensor, and cooperate reasonably and
Page 5 of 8
at the Licensor's expense with the Licensor. Licensee shall not settle any
claim hereunder, without the Licensor's prior approval. The foregoing rights to
indemnification are contingent upon the Licensee: (i)promptly notifying the
Licensor in writing; (ii) allowing the Licensor, at Licensor's expense, to
direct the defense or settlement of such claim or suit; and (iii) giving to the
Licensor, at the Licensor's expense, reasonable information and assistance for
such defense or settlement, including providing such witnesses for testimony as
may reasonably be required.
(E) The indemnity provisions herein shall continue throughout the term of this
Agreement and shall survive any termination or expiration of this Agreement.
VII. ROYALTIES
In consideration for the rights granted to Licensee hereunder, Licensee agrees
to pay a fee to Licensor in the total sum of $2 million. At Licensor's request,
$1.85 million of said fee shall be paid by Licensee to Licensor within ____ days
of the Effective Date of this License Agreement. The remaining $150,000 portion
of said $2 million fee shall be paid on a periodic installment basis as follows:
a $25,000 payment by Licensee to Licensor on or before the anniversary of the
Effective Date of this License Agreement, through and including the sixth
anniversary of this License Agreement, for a total of $150,000 in installment
payments (6 x $25,000).
VIII. BOARD MEMBERSHIP
Licensor hereby agrees to take such steps as may be required to appoint a person
designated by Licensee to the Board of Directors of Licensor or as an Observer
to said Board, as Licensee may elect in its sole discretion, such appointment to
be effective within ______ days of the execution of this Agreement. Licensor
also hereby agrees, during the term of the Agreement, to provide Licensee
(either through Licensee's designee serving on the Licensor's Board of Directors
or otherwise upon the Licensee's written request to the Licensor) with prompt
delivery of, or access to, the Licensor's corporate, business, accounting and
financial information and documents, including but not limited to all
information and documents made available or discussed at meetings of the
Licensor's Board of Directors, all documents and reports filed or proposed to be
filed by the Licensor with any executive, legislative, administrative or
judicial office or agency; and all corporate minutes, articles of incorporation,
bylaws, contracts, agreements, shareholder lists, correspondence, press
releases, financial statements, books and records, and other documents of the
Licensor (collectively "Information"); provided, however, that Licensee shall
hold in strict confidence all Information which has not yet been made generally
available to the public and shall not engage, directly or indirectly, in any
transaction involving securities of the Licensor while in possession of
Information which is material and has not yet been made generally available to
the public.
Page 6 of 8
IX. TRADEMARKS AND PUBLICITY
(A) Nothing in this License Agreement shall be construed to authorize the use
by Licensee of any trademarks or other distinctive marks or signs owned by
Licensor unless prior approval in writing is received from Licensor. Licensee
shall only utilize its own trademarks. Licensee may, if it so elects, affix to
any Licensed Item made by Licensee under this License Agreement such marks as
the parties may agree upon in writing.
(B) Notwithstanding anything contained in this License Agreement to the
contrary, the parties shall have the right to use the trademarks of the other
parties in connection with announcements regarding the relationship of the
parties. No such announcement shall be made, however, without the prior consent
of the other party. Consent of the other party shall be deemed to have been
given if a written copy of the notice is provided to the other party, and such
party does not object in writing to such announcement. Neither party shall
unreasonably withhold its consent to such announcements.
X. FAILURES AND DELAYS IN PERFORMANCE
Neither Licensor nor Licensee shall be liable in damages or otherwise for any
delay or default in performance under this License Agreement where such delay or
default is due to any cause beyond its control or is caused by war, strikes,
other labor trouble, shortage of labor or material, riots, fires, floods, public
calamity, transportation difficulties, or by an act or omission of any
governmental authority.
XI. TERM AND TERMINATION
(A) This License Agreement shall be effective from the date when this License
Agreement is signed by the parties hereto ("Effective Date") and continue in
effect until December 31, 2010.
(B) Without limiting any other rights either party may have, it is specifically
understand that:
1) In the event of either party's dissolution, or the liquidation of
either party's assets, or the filing of a voluntary petition in bankruptcy, or
the filing of an involuntary petition in bankruptcy that is not dismissed within
sixty (60) days after filing; or
2) In the event either party breaches any material term hereunder more
than twice in any twelve (12) month period and the defaulting party has received
written notice of each breach; then the other party shall have the right, at
its sole option and upon written notice to the bankrupt and/or defaulting
party, to terminate this License Agreement immediately.
(C) The parties agree and acknowledge that this License Agreement constitutes,
and throughout its term shall continue to be, an executory contract under which
Licensor is a licensor of a right to
Page 7 of 8
intellectual property, pursuant to 11 U.S.C. Section 365(n), and therefore that
this License Agreement is, in the event of a future bankruptcy filing against
Licensor, subject to the provisions of 11 U.S.C. Section 365(n), and
accordingly, in such event, Licensee would have the rights and privileges
enumerated in 11 U.S.C. Section 365(n).
XII. CONSEQUENCES OF TERMINATION
Upon termination of this License Agreement for any reason, except breach of its
terms by Licensee, Licensee shall have a permanent, fully-paid license to the
Technical Data, under the same terms as set forth in Article II, without any
additional payments. Licensor shall retain title and ownership to the Technical
Data. If Licensee breaches the License Agreement, all Technical Data shall be
returned to Licensor. Licensee shall have no rights to improvements,
enhancements, or modifications to the Technical Data or Licensed Items made by
Licensor subsequent to the termination of this License Agreement.
XIII. ASSIGNMENT AND SUBLICENSE RIGHTS
Except as otherwise provided in this License Agreement, Licensee shall not
assign or sublicense its rights under this License Agreement.
Licensee may appoint subcontractors as its subcontractors to undertake the
manufacture or assembly of Licensed Components.
XIV. DISCLAIMER OF AGENCY
This License Agreement shall not constitute Licensee as the legal representative
or agent of Licensor, nor shall Licensee have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or implied,
against, or in the name of, or on behalf of, Licensor.
XV. GENERAL PROVISIONS
(A) Title and Subtitles. The titles of the Articles and Paragraphs of this
License Agreement are for the convenience of reference only, and are not to be
considered in construing this License Agreement.
(B) Counterparts. This License Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
Page 8 of 8
(C) Entire Agreement. This License Agreement is the entire agreement between
the parties hereto with respect to the subject matter hereof, and supersedes all
documents and correspondence with respect to such subject matter prior to the
date hereof. No amendment to this License Agreement shall be effective unless
in writing and signed by all parties hereto.
(D) Waiver. The failure of a party to insist on the strict performance of any
provision of this License Agreement or to exercise any right, power, or remedy
upon a breach hereof shall not constitute a waiver of any provision of this
License Agreement or limit the party's right thereafter to enforce any provision
or exercise any right.
(E) Notice. Any notice, payment, report or other communication required or
permitted to be given by one party to any other party by this License Agreement
shall be in writing and either (i) served personally on the other party, (ii)
sent by express, registered or certified first class mail, postage prepaid,
addressed to the other party or parties at its/their address indicated next to
their signatures below, or to such other address as any addressee shall have
theretofore furnished to the other parties by like notice, (iii) delivered by
commercial courier to the other party, or (iv) sent by facsimile with the
original sent by express mail. Such notice shall be deemed received on the
second day after transmittal if sent by one day courier together with a
transmission of such notice by facsimile if the recipient has the capability to
notice a facsimile at its address, and if sent by other methods shall be deemed
received upon receipt.
(F) Governing Law. This License Agreement has been entered into in California,
and shall be governed by the laws of the State of California, United States of
America.
(G) Arbitration. All disputes arising in connection with this License
Agreement shall be finally settled under the rules of Conciliation and
Arbitration of the International Chamber of Commerce ("ICOC") by one or more
arbitrators appointed in accordance with ICOC rules. The place of arbitration
shall be the country of the respondents.
IN WITNESS WHEREOF, the parties have executed this License Agreement as of the
date first above stated.
Hyundai Motor Company
By:
Hyundai Electronics & Industries Co., Ltd.
By:
Page 9 of 10
U.S. Electricar, Inc.
By:
* NOTE:
"Exhibit A" means the drawing tree of Licensed Panther-TM- Systems.
"Exhibit B" means the "Technical Data List" which will be attached to this
License Agreement.
Page 10 of 10