Intellimold Technology License & Support Agrmnt

INTELLIMOLD
TECHNOLOGY LICENSE
AND
SUPPORT AGREEMENT


THIS TECHNOLOGY LICENSE AND SUPPORT AGREEMENT (this "Agreement"), dated as of December 20, 2001 (the "Effective Date"), is by and between, on the one hand, Textron, Inc., a Delaware corporation ("Textron"), and, on the other hand, Collins & Aikman Corporation, a Delaware corporation ("Holdings"), and Collins & Aikman Products Co., a Delaware corporation and a wholly owned subsidiary of Holdings ("C&A Products").


WHEREAS, pursuant to the Purchase Agreement by and among Textron, C&A Products and Holdings dated as of August 7, 2001, as amended and restated as of November 30, 2001 (the "Purchase Agreement"), C&A Products will indirectly purchase, among other things, all of the issued and outstanding stock of M&C Advanced Processes, Inc. ("M&C"), a wholly-owned subsidiary of Textron Automotive Interiors Inc.;


WHEREAS, among the assets of M&C are certain rights in technology relative to pressurized injection molding and the molding of products (such rights, as described more particularly herein, the "Intellimold IP");


WHEREAS, Textron wishes to obtain for itself and its Affiliates (as defined herein) a worldwide, perpetual and irrevocable license from C&A Products to use the Intellimold IP in Textron's and its Affiliates' existing businesses and elsewhere on the terms and conditions set forth herein;


WHEREAS, Textron also wishes to obtain for itself and its Affiliates certain services from C&A Products relative to the support of the Intellimold IP, including engineering, marketing, technical and training services, on the terms and conditions set forth herein; and


WHEREAS, Textron and C&A Products each wish to obtain from the other a license to use any enhancements and improvements to and derivative works of the Intellimold IP (as described more particularly herein, "Intellimold Enhancements") which such other party may create or to which such other party may otherwise obtain rights after the Effective Date;


NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements set forth in this Agreement and in the Purchase Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
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ARTICLE I
DEFINITIONS


In addition to certain capitalized terms defined on first use herein, for purposes of this Agreement, except as otherwise expressly provided herein or unless the context clearly requires otherwise:


"Affiliate" of any Person shall mean any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person. "Affiliate" includes, with respect to Textron, "Authorized Affiliates" (as defined herein).


"Authorized Affiliate" of Textron shall mean any Affiliate of Textron, provided that no Competitor of C&A Products or group of Competitors of C&A Products owns or has the right to acquire, individually or in the aggregate, twenty percent (20%) or greater of the total equity interest in such Affiliate.


"Bison Subsidiaries" shall have the meaning ascribed to it in the Purchase Agreement.


"Business" shall have the meaning ascribed to it in the Purchase Agreement.


"C&A Products Intellimold Enhancement" shall mean any Intellimold Enhancement developed by or on behalf of C&A Products or any of its Affiliates, or to which C&A Products or any of its Affiliates obtains rights (including the right to grant sublicenses) other than from Textron or any of Textron's Affiliates, after the Effective Date.


"Competitor of C&A Products" shall mean any Person that materially competes with C&A Products or its Affiliates in the sale of products of C&A Products or such Affiliates within the Restricted Field.


"Equipment Lease Term Sheet" shall have the meaning ascribed to it in the Purchase Agreement.


"Indemnified Party" shall have the meaning ascribed to it in Section 9.1.


"Indemnifying Party" shall have the meaning ascribed to it in Section 9.1.


"Intellectual Property" shall mean all intellectual property, and all legal rights related thereto everywhere in the world, including, but not limited to, patents and patent applications; copyrights, copyright registrations, renewals and applications for copyrights; data and database rights; software, trade secrets and other confidential information, materials, know-
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how, proprietary processes, formulae, algorithms, models and methodologies, customer lists and contacts, research and other technical information, and general intangibles of like nature, provided, however, that Intellectual Property shall not include Trademarks.


"Intellimold Enhancements" shall mean any and all enhancements or improvements to or derivative works of all or any part of the Intellimold IP, developed after the Effective Date.


"Intellimold IP" shall mean all Intellectual Property existing as of the Effective Date relating to the technology owned or controlled by or licensed to M&C for pressurized injection molding of a molten material (e.g. plastic or metal) to provide a substantially pressure-balanced molding environment, including without limitation the invention disclosures, patents and patent applications (including any patents issuing or derived therefrom) listed on Exhibit A hereto.


"Losses" shall mean any and all actual losses, liabilities, costs and expenses (including reasonable attorneys' fees and costs of investigation), after giving effect to any related Tax Benefit and net of any reserves and amounts recovered from third parties, including amounts recovered under insurance policies, with respect to such Losses; provided, however, that Losses shall not include any costs or expenses of any Indemnified Party related to the time spent on any indemnified matter by employees or management of the Indemnified Party.


"Net Licensing Revenue" shall mean the aggregate revenue received by Textron and its Affiliates from the grant of licenses or sublicenses by Textron and its Affiliates of the Intellimold IP to third parties (other than Affiliates of Textron), less the following amounts: (a) discounts, including cash discounts, or rebates actually allowed or granted from the invoiced amount, (b) taxes, duties or other governmental charges levied on or measured by the invoice amount when included in an invoice, as adjusted for rebates, charge-backs and refunds, (c) accounts that are uncollectible and written off on the books of Textron or the relevant Affiliate as uncollectible, (d) revenues from "combination" sublicenses to the extent attributable to components of such sublicenses other than Intellimold IP license rights, (e) any amounts paid or payable to C&A Products or its Affiliates by Textron or its Affiliates for Support Services rendered hereunder during the period at issue with respect to the relevant sublicenses, (f) revenues from Textron Intellimold Licenses, and (g) any amounts received in connection with any use, lease, license, sale or other transfer of Equipment (as defined in any lease contemplated by the Equipment Lease Term Sheet).


"Non-Bison Subsidiary" shall have the meaning ascribed to it in the Purchase Agreement.


"Permitted Sublicensee" shall mean (i) any third party acting on behalf of the party granting the sublicense in the performance of a specific contract or contracts for the
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manufacture, supply, distribution, maintenance or servicing of products, components or materials by or for the party granting the sublicense; (ii) any third party performing development activities on behalf of the party granting the sublicense, provided that such activities are performed pursuant to an agreement assigning to the party granting the sublicense all rights (excluding general know-how and residuals) within the Restricted Field in any resulting Intellectual Property relating to the sublicensed Intellectual Property; (iii) any end-user purchaser of products based upon or incorporating the licensed Intellectual Property solely to the extent necessary for such purchaser to use such products; (iv) any third party acting as a second supplier at the request of a customer of the party granting the sublicense, but, within the Restricted Field only if such customer is unwilling to agree that C&A Products or a C&A Products Affiliate act in such capacity despite the good faith efforts of the party granting the sublicense to obtain such agreement; and (v) any Authorized Affiliate.


"Person" shall mean any individual, corporation, partnership, limited liability company, joint venture, trust, association, organization or other entity.


"Restricted Field" shall mean (i) the business of (a) manufacturing or selling overhead systems, headliners, interior instrument panels, interior quarter panel/sidewall trim, interior trim consoles, lift-gate trim panels, painted or unpainted fascia and bumpers, claddings/exterior trim moldings, exterior grilles, structural composite bumpers, or signal, taillight and other lighting or (b) assembling or selling cockpit systems or front-end modules, in each case as currently manufactured, assembled in the Business and, in each case, for use in automotive passenger cars and light and heavy trucks; (ii) the automotive products business of C&A Products and the Subsidiaries of C&A Products as currently conducted; and (iii) extensions after the Effective Date of the businesses described in clauses (i) and (ii) that are reasonably related to such businesses and primarily serve an automotive customer base.


"Subsidiary of C&A Products" shall mean any corporation, partnership, limited liability company, joint venture or other legal entity of which C&A Products, either alone or together with any other Subsidiary of C&A Products, owns, directly or indirectly, more than forty percent (40%) of the stock or other equity interests of such corporation or other legal entity.


"Support Services" shall have the meaning set forth for such term in Article VIII.


"Tax" or "Taxes" shall mean all United States federal, state, provincial, local, territorial and foreign income, profits, franchise, license, capital, transfer, ad valorem, wage, severance, occupation, import, custom, gross receipts, payroll, sales, employment, use, property, real estate, excise, value added, estimated, stamp, alternative or add-on minimum, environmental, withholding and any other taxes, duties, assessments or governmental tax charges of any kind whatsoever.
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"Tax Benefit" shall mean the present value of any refund, credit or reduction in otherwise required Tax payments, including any interest payable thereon, which present value shall be computed as of the first date on which the right to the refund, credit or other Tax reduction arises or otherwise becomes available to be utilized, (i) using the Tax rate applicable to the highest level of income with respect to such Tax and (ii) using the interest rate on such date imposed on corporate deficiencies paid within thirty (30) days of notice of proposed deficiency under the Internal Revenue Code of 1986, as amended.


"Textron Intellimold Enhancement" shall mean any Intellimold Enhancement developed by or on behalf of Textron or any of its Affiliates (including by C&A Products or its Affiliates in connection with the rendering of Support Services to Textron and its Affiliates hereunder), or to which Textron or any of its Affiliates obtains rights (including the right to grant sublicenses) other than from C&A Products or any of C&A Products' Affiliates, after the Effective Date.


"Textron Intellimold License" shall mean any license or sublicense agreement entered into after August 7, 2001 between Textron or any Affiliate and any party listed on Exhibit B and granting such party rights in Intellimold IP or Intellimold Enhancements outside the Restricted Field


"Textron Intellimold Trademarks" shall mean the Trademarks listed on Exhibit C hereto.


"Trademarks" shall mean trademarks, service marks, trade names, logos and other business identifiers, any registrations and applications for registration of any of the foregoing, and all goodwill connected therewith.


"Use" shall mean, with respect to any Intellectual Property, (a) to the extent patented, to practice all methods, and to make, use, sell, offer for sale, import and export machines, manufactures and compositions of matter using or embodying such rights and to exercise any other rights that may be associated with patents in any jurisdiction, (b) to the extent copyrighted, to copy, distribute, display, transmit and prepare derivative, combination and collective works, of such Intellectual Property, and (c) to the extent otherwise neither patented nor copyrighted, to make, use, sell, offer for sale, import and export, and have imported and exported, products using or embodying the rights included in such Intellectual Property.
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ARTICLE II
GRANT OF RIGHTS FROM C&A PRODUCTS TO TEXTRON


2.1. License of Intellimold IP Outside Restricted Field. Except as set forth in the second sentence of this Section 2.1, C&A Products hereby grants, and, as applicable, shall cause its Affiliates to grant, to Textron a royalty-bearing (pursuant to Article V) worldwide, perpetual and irrevocable license to Use C&A Products' and its Affiliates' rights in the Intellimold IP and the C&A Products Intellimold Enhancements. The foregoing grant of license (a) excludes the right to use the Intellimold IP and the C&A Products Intellimold Enhancements within the Restricted Field, but shall be exclusive (even as to C&A Products and its Affiliates) outside the Restricted Field and (b) includes the right to sublicense such rights, in whole or in part, to Textron's Affiliates and to third parties, including to injection molding machine OEMs, for Use outside the Restricted Field.


2.2. Limited License of Intellimold IP Within Restricted Field. C&A Products hereby grants, and, as applicable, shall cause its Affiliates to grant, to Textron (excluding its Affiliates) a non-exclusive, royalty-free, fully-paid, worldwide, perpetual and irrevocable license to Use C&A Products' and its Affiliates' rights in the Intellimold IP and C&A Products Intellimold Enhancements within the Restricted Field solely in connection with Textron's and its Authorized Affiliates' manufacturing, sales and development operations. The foregoing grant of license includes the right to sublicense such rights solely to Permitted Sublicensees; provided, however, that no Permitted Sublicensee granted rights pursuant to this Section 2.2 shall further sublicense such rights.


2.3. Other Restrictions.


(a) The exercise by Textron, its Authorized Affiliates and their respective sublicensees of the license granted pursuant to Section 2.2 is subject to the non-competition covenants set forth in Section 5.11 of the Purchase Agreement, the terms of which Section are hereby incorporated herein by reference.


(b) Textron shall not transfer (including in connection with a sale of assets) the license contained in Sections 2.1 or 2.2 to any third party that is not an Authorized Affiliate of Textron unless such third party agrees in writing that such transferred license shall be limited to use outside the Restricted Field.


(c) The license granted pursuant to Section 2.2 shall automatically terminate in the event that Textron is acquired by a third party that is a direct competitor in the Restricted Field of the Business or of C&A Products or any of its Affiliates; provided, however, that notwithstanding any such termination, (i) Textron and its Authorized Affiliates and their respective Permitted Sublicensees shall be permitted to continue to exercise the rights granted
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pursuant to Section 2.2 for a period of up to twelve (12) months as necessary to liquidate existing inventory, fulfill existing orders and otherwise wind down operations relative to the terminated license, and (ii) any express or implied sublicenses of the rights granted pursuant to Section 2.2 to end users in connection with their purchase of products using or incorporating such rights shall survive.


(d) Nothing in this Agreement shall be construed to limit in any way the operations of the existing businesses of Textron or any Non-Bison Subsidiary, including without limitation the Use of the Intellimold IP in such operations.


2.4. Term of Licenses. The license grants contained in Sections 2.1 and 2.2 shall extend from the Effective Date until (i) with respect to grants of rights under any patent owned by C&A Products or any Affiliate, the date on which each and every claim of such patent has expired or is invalidated, or (ii) with respect to grants of rights under any other type of Intellectual Property, the date on which the underlying rights of C&A Products and its Affiliates expire or are invalidated.


ARTICLE III
GRANT OF RIGHTS FROM TEXTRON TO C&A PRODUCTS


3.1. License of Textron Intellimold Enhancements. Textron hereby grants, and, as applicable, shall cause its Affiliates to grant, to C&A Products and C&A Products' Affiliates an exclusive (even as to Textron and its Affiliates except as set forth in Sections 2.2 and 3.1(b)) royalty-free, fully-paid, worldwide, perpetual and irrevocable license to Use Textron's and its Affiliates' rights in any Textron Intellimold Enhancements solely within the Restricted Field as and when such Textron Intellimold Enhancements are created. The foregoing grant of license (a) includes the right to sublicense such rights, in whole or in part, solely to C&A Products' Affiliates and to any third party (i) acting on behalf of C&A Products or any of C&A Products' Affiliates in performance of a specific contract or contracts for the manufacture, supply, distribution, maintenance or servicing of products, components or materials by or for C&A Products or such Affiliate, or (ii) performing development activities on behalf of C&A Products or such Affiliate, provided that such activities are performed pursuant to an agreement assigning to C&A Products or such Affiliate all rights (excluding general know-how and residuals) outside the Restricted Field in any resulting Intellectual Property relating to the sublicensed Intellectual Property; or (iii) acting as a second supplier of C&A Products or any of its Affiliates but only if such customer is unwilling to agree that Textron or a Textron Affiliate act in such capacity (as appropriate, where permitted by Section 5.11 of the Purchase Agreement) despite the good faith efforts of C&A Products or the relevant C&A Products Affiliate to obtain such agreement and (b) shall not be deemed to restrict in any manner Textron's and its Affiliates' Use of the Textron Intellimold Enhancements within the Re-
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stricted Field in connection with Textron's and its Affiliates' internal manufacturing and development operations.


3.2. Trademark License.


(a) Grant of Rights. Textron hereby grants, and, as applicable, shall cause its Affiliates to grant, to C&A Products and C&A Products' Affiliates a non-exclusive, royalty-free, fully-paid, worldwide, non-transferable license to use the Textron Intellimold Trademarks solely in connection with the promotion and s ...