Patent And Know How License Agreement

EXHIBIT 10.1

PATENT AND KNOW HOW LICENSE AGREEMENT
-------------------------------------


This License Agreement, dated as of September 30, 1998, is among Owens- Corning Fiberglas Technology, Inc., an Illinois corporation, having its principal place of business at 7734 West 59th St., Summit, IL 60501 ("OC Tech"),
------- Owens Corning, a Delaware corporation, having its principal place of business at One Owens Corning Parkway, Toledo, Ohio 43659 ("Parent" and, together with OC
------ Tech, the "Seller"), and Advanced Glassfiber Yarns LLC, a Delaware limited
------ liability company (the "Company").
-------


WHEREAS, pursuant to an LLC Interest Sale and Purchase Agreement, dated as of July 31, 1998 (the "SPA"; capitalized terms not defined herein shall have the
--- meanings ascribed to them in the SPA or the Non-Compete Agreement, as applicable) among Parent, Company, and AGY Holdings, Inc. (as assignee of Glass Holdings Corp. under an assignment agreement dated


as of September 28th, 1998), AGY Holdings, Inc. agreed to purchase from Seller a 51% membership interest ("Interest") in the Company;
--------


WHEREAS, Seller and its Affiliates have technology (including patents and technical and business know how) related to the Business, and the parties have agreed that certain of the rights will be licensed from Seller to Company; and


WHEREAS, Company has technology (including patents and technical and business know how) related to the Business, certain of which is also related to Seller's business and the parties have agreed that certain of the rights will be licensed by Company to Seller.


NOW, THEREFORE, in consideration of the premises of and the mutual promises and agreements in the SPA and contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:


1. DEFINITIONS
-----------


As used in this License Agreement, the following defined terms shall have the meanings indicated below:


(a) "Business Know How" means the know how assigned to Company by the
----------------- Master Patent and Know How Assignment between the parties.


(b) "Business Products" has the meaning given thereto in the SPA and
----------------- further includes products made of High Strength Glass (as defined in Seciton 3.1(d) of the Non-Compete Agreement).


(c) "Business Patents" means all of the patents and patent
---------------- applications assigned to Company by, or pursuant to, the Master Patent and Know How Assignment.


(d) "Business Manufacturing Technology" has the meaning given thereto
--------------------------------- in the SPA.


(e) "Effective Date" means the date first above written.
--------------


(f) "Manufacturing Facilities" means the portions of Seller's
------------------------ facilities at Aiken, South Carolina, Huntingdon, Pennsylvania, and South Hill, Virginia to be transferred to Company which do not include the portions of the Aiken and Huntingdon facilities at which Seller manufactures continuous filament mat or wet process mat.


(g) "Restricted Products" has the meaning given thereto in Section
------------------- 1.2(a) of the Non-Compete Agreement.


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(h) "Seller Licensed Know How" means such of Seller's and Seller's
------------------------ Affiliates' technical knowledge and data, formulations, processes, techniques, drawings and designs, unpatented inventions, operating manuals, manufacturing and quality control procedures, trade secrets, plans, accumulated experience, plant and tool design, installation instructions, raw material specifications, advertising procedures, sales promotion literature, and other know how of any kind as: (a) is in use, or has been used, or is or was under development for use, in the Manufacturing Facilities to manufacture Business Products on or before the Effective Date; (b) is necessary to the use of the Business Manufacturing Technology; or (c) is necessary to the continued manufacture of the Business Products using the Business Manufacturing Technology. Seller Licensed Know How does not include Business Know How, but does include, without limitation, the know how listed on Schedule C to this Patent and Know How License Agreement Notwithstanding the foregoing, Seller Licensed Know How does not include any know how relating to the coating of a glass fiber product with a conductive material, to the composition of such conductive material, or to any glass fiber product to be coated with a conductive material, except know how relating to the graphite coating process employed at the Huntingdon, Pennsylvania facility before the Effective Date.


(i) "Seller Licensed Patents" means all patents issued as of the
----------------------- Effective Date and all patents issuing worldwide in the future on patent applications pending as of the Effective Date, as well as patents issuing worldwide from later filed continuations, substitutions, or divisionals thereof, and any reissues thereof, that Seller owns as of the Effective Date, which are necessary to: (i) the use of the Business Manufacturing Technology; (ii) the continued manufacture of the Business Products using the Business Manufacturing Technology; or (iii) the


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use or sale of the Business Products, which patents and patent applications are listed in Schedule A to this Patent and Know How License Agreement. Notwithstanding the foregoing, Seller Licensed Patents does not include any patents or patent applications relating to the coating of a glass fiber product with a conductive material, to the composition of such conductive material, or to any glass fiber product to be coated with a conductive material, except patents or patent applications relating to the graphite coating process employed at the Huntingdon, Pennsylvania facility before the Effective Date.


(j) "Seller Products" means glass fiber products including glass
--------------- fibers, direct roving, conventional roving, sliver, tow or skein, and mats and veils made from any of the foregoing, and whether or not coated, cut, sized, bonded, shaped, texturized, cured, lubricated, or treated, including without limitation all products manufactured by Seller or any Affiliates of Seller before the Closing Date, but excluding Business Products.


(k) "S Glass" means glass having at least all of the following
------- constituents in the indicated ranges:


===============================================================
Component Lower Weight % Upper Weight %
---------------------------------------------------------------

SiO/2/ 63.5 72.0
---------------------------------------------------------------
Al/2/O/3/ 18.0 26.0
---------------------------------------------------------------
MgO 9.0 11.0
---------------------------------------------------------------
Na/2/O 0.0 0.5
===============================================================


(l) "ZTY Winders" winders used at the Manufacturing Facilities and
----------- Guelph to wind Zero Twist Yarn products.


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(m) "ZTY Winder Technology" has the meaning given thereto in Section
--------------------- 3.4 of this Patent and Know How License Agreement.


2. TERM AND TERMINATION
--------------------


2.1 Term
----


Unless otherwise earlier terminated as provided below, this License Agreement shall remain in effect (i) with respect to the patent license and sublicense under Sections 3.1 and 3.3, until the expiration of the last to expire of the Seller Licensed Patents, (ii) with respect to the patent license and sublicense under Sections 5.1 and 5.3, until the expiration of the last to expire of the Business Patents, and (iii) with respect to the know how license under Sections 3.2 and 5.2, perpetually.


2.2 Remedies for Breach
-------------------


(a) If either party commits a material breach of any provision of this License Agreement and fails to correct such breach within thirty (30) days after written notice from the other party, neither party shall have the right to terminate this agreement or to suspend its performance hereunder and this Agreement shall not be terminable, but such party shall have available all other legal and equitable remedies to which it may be entitled.


(b) Without limiting the foregoing, each party recognizes that irreparable injury will result from a breach of any provision of this Agreement not curable solely by the payment of money damages and that money damages will be inadequate to fully remedy such injury. Accordingly, in the event of a breach or threatened breach of one or more of the provisions of this Agreement, either party, in addition to any other remedies available to it, will be entitled to one or more preliminary or permanent orders (i) restraining and enjoining any act which would constitute


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a breach, or (ii) compelling performance of any obligations which, if not performed, would constitute a breach. Nothing contained in Section 2.2(b) is intended to limit the rights of either party to seek or any court to enter any lawful form of equitable relief or any available provision of such relief ordered by the court, other than termination of this Agreement.


2.3 Termination
-----------


Unless otherwise agreed by the parties before such transfer, this Patent and Know How License Agreement shall terminate immediately upon: (a) the transfer by the Company of any rights in any or all of the Business Patents, Business Know How, Seller Licensed Patents or Seller Licensed Know, or any tangible assets of the Company that incorporate any of the foregoing, to Compagnie Saint Gobain ("CSG") or any Affiliate thereof (unless Company believed in good faith, based upon reasonable inquiry, that the transferee entity was not at the time of the transfer an Affiliate of CSG); or (b) upon the Company becoming an Affiliate of CSG: (i) by CSG acquiring a majority of the voting rights or the right to elect a majority of the board of directors of the Company, Buyer or Porcher Industries; or (ii) through actions directly initiated or directly facilitated by the Company, Buyer or Porcher Industries. Contingent upon such termination, and in addition to the license grants in Sections 5.1 and 5.2 of this Patent and Know How License Agreement, Company hereby grants to Seller a worldwide, paid-up, royalty-free, non-exclusive license under the Business Patents and the Business Know How to make, have made, use, sell, import, and offer to sell Restricted Products.


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3. SELLER LICENSE GRANTS
---------------------


3.1 Seller Patent License
---------------------


Seller grants to Company a worldwide, paid-up, royalty-free license under the Seller Licensed Patents to make, have made, use, sell, import, and offer to sell Business Products and products other than Seller Products. With regard to Restricted Products, such license is exclusive, and with regard to Business Products other than Restricted Products, such license is sole (as to Seller and its Affiliates) for the Term of the Non-Compete Agreement, subject to the licenses listed in Schedule B of the Non-Compete Agreement and subject to the need for rights under the Seller Licensed Patents for Seller and/or its Affiliates to perform their obligations to Company and its Affiliates to manufacture and supply Business Products, glass marbles, and sliver and to fabricate and/or repair bushings pursuant to the various agreements pursuant to the SPA, including without limitation the Guelph Facility Supply Agreement, Battice Facility Supply Agreement, Glass Marble Supply Agreement, Sliver Supply Agreement, and Alloy Services Agreement (the "Seller Agreement Obligations"), and is non-exclusive thereafter. With regard to products other than Restricted Products, Business Products, and Seller Products, such license is non-exclusive.


3.2 Seller Know How License
-----------------------


Seller grants to Company a worldwide, paid-up, royalty-free license under the Seller Licensed Know How to make, have made, use, sell, import, and offer to sell Business Products and products other than Seller Products. With regard to Restricted Products, such license is exclusive, and with regard to Business Products other than Restricted Products, such license is sole (as to Seller and its Affiliates) for the Term of the Non-Compete Agreement, subject to the


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licenses listed in Schedule B of the Non-Compete Agreement and subject to the need for rights under the Seller Licensed Know How for Seller and/or its Affiliates to perform the Seller Agreement Obligations, and is non-exclusive thereafter. With regard to products other than Restricted Products, Business Products, and Seller Products, such license is non-exclusive.


3.3 Company Sublicense Rights
-------------------------


Company shall have the right to sublicense its rights under Sections 3.1 and 3.2, subject to the limitations of Section 3.4, provided that Company shall not have the right to sublicense its rights to CSG or any Affiliate thereof.


3.4 ZTY Winder Technology
---------------------


Company acknowledges that the technology embodied in the ZTY Winders ("ZTY
--- Winder Technology") is a particularly sensitive and valuable component of the - ----------------- Seller Licensed Know How, that Seller is particularly concerned that ZTY Winder Technology not be used by a competitor of Seller in the manufacture of Seller Products, and that the purchase price of the Business reflects Company's access to, and use of, the ZTY Winder Technology only for products other than Seller Products. Similarly, Company is concerned that Seller not use the ZTY Winder Technology to manufacture Restricted Products. Accordingly, each party shall have the right to inspect the other party's manufacturing facilities for a period of five years from the Effective Date. Such inspection rights shall be as follows:


(i) inspections will be conducted by a neutral third party unaffiliated
with either party and reasonably acceptable to both parties;


(ii) the inspector shall prepare a report on the results of each such
inspection, which reports shall include no information regarding
Company's manufacturing facilities


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or operations other than whether ZTY Winder Technology is being, or
has been, employed in the production of Seller Products, and shall
include no information regarding Seller's manufacturing facilities or
operations other than whether ZTY Winder Technology is being, or has
been, employed in the production of Restricted Products, and the
inspector shall supply such reports to both the Company and Seller;


(iii) inspections may be conducted on 72 hours notice, during normal
business hours, no more than one time per calendar year; and


(iv) no inspections may be conducted after five years from the Effective
Date.


Neither Company nor Seller shall initiate any legal proceeding against the other based on the results of any report within thirty (30) days of the inspector giving the report to the parties. If by the end of such thirty (30) day per ...