Patent License Agreement

Exhibit 10.10(b)


PATENT LICENSE AGREEMENT


Effective as of the "Effective Date" referred to in Article VII hereof, by and between Edmond B. Cicotte of 11086 Hedgeway, Utica, Michigan 48327, and or assigns, hereinafter referred to as "LICENSOR", and Williams Controls, Inc., a Delaware Corporation, and Proactive Acquisition Corporation, a Michigan Corporation, having a corporate office at 7001 Orchard Lake Road, Suite 424, West Bloomfield, Michigan 48322 , collectively hereinafter referred to as "LICENSEE".


WITNESSETH:


WHEREAS LICENSOR is now and has been engaged in developing certain products embodying inventions or designs owned by LICENSOR and has available technical information and know-how relating to the manufacture thereof; and


WHEREAS LICENSOR owns or controls or may hereinafter own certain patents as identified in Schedule A appended hereto, relating to such products; and


WHEREAS LICENSOR has in the past granted an exclusive technical assistance and patent license agreement for the Licensed Patents defined herein to Active Tool and Manufacturing Company (hereinafter ACTIVE) on November 1, 1993; and


WHEREAS ACTIVE seeks to make a sale of said exclusive license agreement along with certain business assets related to Licensed Products defined hereinafter; and


WHEREAS LICENSEE, as defined herein, has expressed an interest in obtaining said exclusive license agreement but only subject to certain changes as set forth herein; and


WHEREAS LICENSOR has agreed to act as a consultant and advisor to LICENSEE on matters pertaining to the engineering, design, and manufacture of automotive brake, clutch and/or accelerator pedals and related technology and has this date entered into a written consulting agreement with LICENSEE in this regard; and


WHEREAS LICENSEE desires to use LICENSOR technical information and know-how and to acquire licenses with respect to current and/or future designs, patents and applications for patents owned or developed by LICENSOR, including those developed in conjunction with said consulting agreement, and LICENSOR is willing to grant the licenses to LICENSEE;


NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements hereinafter set forth, the parties hereto hereby covenant and agree as follows:


ARTICLE I


General Definitions


As used herein, the following terms shall have the following meanings:


Section 1-A The term "Licensed Territory", as used herein, means all the countries of the world.


Section 1-B The term "Licensed Products", as used herein means all products upon which a claim of any of the Licensed Patents reads and equivalents, with Licensed Patents being defined hereinafter and set forth in Schedule A hereof. Licensed Products include adjustable automotive brake, clutch and/or accelerator pedals and parts therefor and associated adjustable components as claimed in Licensed Patents. Supplemental components, such as a wiring harness, electronic sensors, or an Electronic Control Unit are excluded from "Licensed Products". If LICENSEE and LICENSOR are unable to agree on whether an article sold by LICENSEE is a Licensed Products, then LICENSOR and LICENSEE agree to submit the issue of arbitration in accord with Section 8-F of this Agreement.


Section 1-C The term "Licensed Year", as used herein, means a period of twelve (12) consecutive months commencing on November 1, 1998 or on any anniversary of said date occurring during the life or term of this agreement.


Section 1-D The term "Technical Information", as used herein, means all information including, but not limited to, data, know-how, patent applications, and other assistance LICENSEE obtains from LICENSOR that relates to Licensed Products.


Section 1-E The term "Licensed Patents", as used herein, means all patents and applications for patents in the Licensed Territory which relate to Licensed Products and which are now or hereafter owned by LICENSOR, and patents or applications for patents owned by LICENSEE which, if practiced, would infringe either literally or by equivalents any Licensed Patent owned by LICENSOR, but excluding patents and applications for patents which are removed by LICENSEE or which are not elected by LICENSEE or are removed by LICENSOR under the appropriate provisions of this agreement. The term "Licensed Patents" shall include all patents and applications for patents in the Licensed Territory as set forth in Schedule A hereof.


Section 1-F The term "Affiliate" means any entity in which LICENSEE has an ownership interest, LICENSEE's parent company, and any companies owned by LICENSEE's parent company.


Section 1-G The terms "have made" and "having made" mean use by LICENSEE of a third party to fabricate and/or assemble the Licensed Products.


Section 1-H The term "Confidential Information" as used herein means all information a Receiving Party obtains from a Disclosing Party pertaining to Licensed Products, the Licensed Patents, or the business of LICENSEE, which is identified as Confidential Information by the Disclosing Party.


ARTICLE II


License Granted


Section 2-A LICENSOR grants and agrees to grant to LICENSEE:


(a) An exclusive right and license to use the Technical Information for the purpose of making, having made, using and selling Licensed Products and parts therefor in the Licensed Territory;


2


(b) An exclusive non-transferable right and license to make, having made, use and sell Licensed Products and parts therefor covered by any Licensed Patent in the Licensed Territory.


Section 2-B No license, either express or implied, is granted by LICENSOR to LICENSEE hereunder with respect to any patent or information except as specifically stated above.


Section 2-C No license, either express or implied, is granted hereunder to use as a trademark or otherwise any work of LICENSOR used as a designation of origin or any other trademark or trade or product name of LICENSOR, or any word or mark similar thereto.


Section 2-D LICENSEE may, at its option, indicate that Licensed Products and parts therefor are made under license from LICENSOR by a suitable legend, if the form of such legend and the extent of LICENSEE's use thereof have received prior written approval from LICENSOR. LICENSOR may amend or revoke prior approvals to use such legends at any time during the term of this agreement, and all rights to use such legends shall terminate with this agreement.


Section 2-E LICENSOR hereby grants the rights to sublicense Licensed Products hereunder providing Sublicensee agrees in writing to comply with all of the provisions of this License Agreement and further providing LICENSOR is given timely notice of such sublicense arrangement and consents, in writing, to such Sublicense. Such consent shall not be unreasonably withheld.


ARTICLE III


Patent Provision


Section 3-A Subject to any United States Government restrictions, LICENSOR shall submit to LICENSEE, within one (1) month of the signing of this agreement or within three (3) months after it is filed, for purposes of the election as set forth below, a copy of each LICENSOR owned United States patent application which is now pending or is hereafter filed by LICENSOR and which relates to: (i) Licensed Products, or (ii) automotive brake, clutch, and/or accelerator pedals, parts therefor and assemblies thereof.


Section 3-B LICENSEE shall, within ninety (90) days of receiving a copy of a U.S. patent or U.S. patent application submitted under Section 3-A, notify LICENSOR in writing of its election to include in Schedule A such U.S. patent or U.S. patent application submitted under Section 3-A of this Agreement. Upon notification of LICENSOR by LICENSEE of such election, such U.S. patent or U.S. patent application shall automatically be included in Licensed Patents and set forth in Schedule A hereof.


Section 3-C Where LICENSEE has made an election under Section 3-B to include a Patent or Patent Application in Schedule A, LICENSEE shall further notify LICENSOR not less than one hundred twenty (120) days prior to the first anniversary date of the U.S. filing date of such application, which countries in which LICENSEE elects to file a corresponding patent application. LICENSOR shall file and prosecute such an application, at LICENSEE's expense, which, upon such filing will be automatically included in Licensed Patents as defined in Section 1-E and set forth in Schedule A hereof. LICENSEE agrees to maintain a Twenty-five Thousand Dollar ($25,000.00) trust account with LICENSOR to pay the expenses associated with filing, prosecuting, and maintaining patent applications and patents.


3


Section 3-D LICENSEE shall submit to LICENSOR, within sixty (60) days after it filed, a copy of each United States patent application owned by LICENSEE which relates to Licensed Products. So long as the making, having made, using, or selling articles embodying the invention that is covered by the claims of such LICENSEE owned patent infringes literally or by equivalents any Licensed Patent owned by LICENSOR, such LICENSEE owned patent will automatically be included in Licensed Patents as defined in Section 1-E and set forth in Schedule A hereof. Notwithstanding the foregoing however, LICENSOR shall have the right, upon written notice to LICENSEE within sixty (60) after LICENSEE has submitted its patent application LICENSOR, to exclude such application from Schedule A hereof. This Agreement does not transfer any ownership interest in any LICENSEE owned patent or patent application from LICENSEE to LICENSOR.


Section 3-E LICENSEE may remove any Licensed Patent from this agreement by giving LICENSOR written notice of its desire to do so, removal of such Licensed Patent to become effective ninety (90) days from the date of such notice.


Section 3-F LICENSEE shall have no rights hereunder with respect to any LICENSOR owned patent application or patent which it either (1) has failed to elect, or (2) has removed from this agreement, in accordance with the provisions of this Agreement. LICENSEE shall be deemed to have relinquished all rights hereunder to make, have made, use or sell Licensed Products covered by a LICENSOR owned patent application or patent in a particular country where such LICENSOR owned patent application or patent has been non-elected or removed by LICENSEE.


Section 3-G In the event that LICENSEE elects to include such patent application or patent in Schedule A hereof, LICENSEE shall bear the reasonable costs incurred in the filing, prosecution and maintenance of such patent application and the patent issuing thereon in the Licensed Territory, including the United States, and shall reimburse such party who files, prosecutes and maintains the application or the patent issuing thereon. LICENSOR agrees to consult with LICENSEE regarding continued prosecution of any pending patent application. In the event that LICENSEE elects to remove any Licensed Patent from this agreement as provided in Section 3-E or elects to no longer bear the costs incident to the maintenance as provided in Section 3-K, LICENSEE shall bear the ordinary and necessary costs incurred as provided in this section for ninety (90) days from the date of such notice to LICENSOR.


Section 3-H LICENSEE shall place appropriate patent notices on all Licensed Products which incorporate any invention covered by any Licensed Patent.


Section 3-I Upon mutual written consent by LICENSOR and LICENSEE, LICENSEE shall be entitled to commence infringement proceedings against third parties who are engaged in activities infringing the Licensed Patents. Such proceedings shall be promptly brought after such mutual written consent and be vigorously and diligently prosecuted by LICENSEE in the Licensed Territory. LICENSEE shall have the right to include LICENSOR as a party to such proceedings where necessary for the conduct thereof. Subject to the limitation in the following sentence concerning LICENSOR's attorney fees, all expenses including attorney fees arising out of any mutually consented to infringement proceedings initiated hereunder shall be borne by LICENSEE . Solely with respect to issues where the interests of LICENSEE and LICENSOR are at a conflict in such infringement litigation, LICENSOR may obtain independent counsel at LICENSEE's expense, providing LICENSOR first seeks and obtains LICENSEE's written consent,


4


which consent shall not be unreasonably withheld. LICENSOR shall render to LICENSEE at sixty (60) day intervals during the period of such proceedings or the preparation thereof an account of the expenses associated therewith. LICENSEE shall have complete control over the conduct and settlement of such infringement proceedings, providing legal counsel for LICENSEE timely consults with legal counsel for LICENSOR regarding strategic or settlement decisions during such proceedings. LICENSEE shall first obtain LICENSOR's written consent to any settlement which includes any economic benefits or concessions granted from the opposing party to LICENSEE coupled with an effective royalty rate equal to what LICENSEE would be obligated to pay LICENSOR under Sec ...