Technology License Agreement

TECHNOLOGY LICENSE
AGREEMENT


THIS TECHNOLOGY LICENSE 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 purchase certain shares of capital stock and assets of the Business (as defined herein);


WHEREAS, pursuant to the Purchase Agreement, Textron and its Affiliates will retain ownership of certain rights in technology currently used in the Business (as hereinafter defined, the "Retained IP"); and


WHEREAS, C&A Products wishes to obtain a worldwide, perpetual and irrevocable license from Textron and its Affiliates to use the Retained IP on the terms and conditions set forth herein;


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:


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" 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


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to acquire, individually or in the aggregate, twenty percent (20%) or greater of the total equity interest in such Affiliate.


"Automotive Products Field" shall mean the manufacture and sale of products for use in automotive passenger cars and light and heavy trucks.


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


"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.


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


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


"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-how, proprietary processes, formulae, algorithms, models and methodologies, customer lists and contacts, research and other technical information, and general intangibles of like nature; trademarks, service marks, trade names and other business identifiers.


"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 Retained IP to third parties (other than Affiliates of Textron) outside the Automotive Products Field, 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 Retained


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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 licenses and sublicenses, and (f) 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 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 or sold 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.


"Retained IP" shall mean the patents, invention disclosures, patent applications (including any patents issuing or derived therefrom) and software identified in Exhibit A, including all Intellectual Property rights therein.


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"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.


"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.


"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.


"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.


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


2.1. License Grant. Textron hereby grants, and, as applicable, shall cause its Affiliates to grant, to C&A Products a non-exclusive, worldwide, fully-paid, royalty-free, perpetual and irrevocable license, including the right to sublicense, to Use Textron's and its Affiliates' rights in the Retained IP solely within the Automotive Products Field.


2.2. Other Restrictions. The exercise by Textron and its Affiliates of any of their respective rights in Retained IP 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


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herein by reference. In addition, Textron agrees to not, and to cause its Affiliates to not, (i) during the period from the Effective Date to the third anniversary of the Effective Date, grant for use in the Automotive Products Field any of the rights covered by the grant of license in Section 2.1 to any third party, and (ii) from and after the third anniversary of the Effective Date, grant for use in the Restricted Field any of the rights covered by the grant of license in Section 2.1 to any third party; provided, however, that the foregoing restrictions in clauses (i) and (ii) shall not apply to grants to Permitted Sublicensees (except that no such Permitted Sublicensee shall be granted the right to grant further sublicenses in the Automotive Products Field or ...