Technology License Agreement - Korea Delphi Automotive Systems Corp. and Jingzhou Henglong Automotive Parts Co. Ltd.
TECHNOLOGY LICENSE AGREEMENT
BETWEEN
KOREA DELPHI AUTOMOTIVE SYSTEMS COPERATION
AND
JINGZHOU HENGLONG AUTOMOTIVE PARTS CO., LTD
JANUARY 13, 2005
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TECHNOLOGY LICENSE AGREEMENT
THIS TECHNOLOGY LICENSE AGREEMENT (the "Agreement") is entered into this
_13th___ day of January, 2005, by and between KOREA DELPHI AUTOMOTIVE SYSTEMS
CORPORATION, a corporation duly organized and validly existing under the laws of
the Republic of Korea ("Korea") with its office at 580-1, Buk-Ri, Nongong-Eup,
Dalseong-Gun, Daegu, Korea ("Licensor"), and JINGZHOU HENGLONG AUTOMOTIVE PARTS
CO., LTD., a company duly organized and validly existing under the laws of
People's Republic of China("China") with its principal office at Henglong Road,
Yuqiao Exploration District, Jingzhou, China ("Licensee"). (Licensor and
Licensee, collectively, the "Parties", and individually, a "Party")
The Parties hereby agree as follows:
ARTICLE 1 - DEFINITIONS
When used herein, each of the following terms shall have the respective
meanings set forth below:
1.1 . "LICENSED PRODUCT" means the manual gear assembly for GMDAT's Matiz
(Project Name: M150 & M200) as specifically identified hereinbelow.
Part Number:
521266(M150 LHD)
521269(M150 RHD)
522018(M200 LHD)
522094(M200 RHD)
1.2 "TECHNICAL DOCUMENTATION" means the documentary technical information on
the Licensed Product as identified in the Exhibit B attached hereto to be
furnished to Licensee by Licensor under Article 2.
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1.3 "DERIVATE TECHNOLOGY" means all technology developed subsequent to the
date entered above that is based on or similar to the technology embodied
by the Technical Documentation used in the design and production Licensed
Products.
1.4 "TECHNICAL COOPERATION PERIOD" means the period beginning on the Effective
Date as defined herein below and ending concurrently with the Royalty
Period.
1.5 "EFFECTIVE DATE" means the date on which this Agreement has been executed
by both Parties and approved by the relevant authority of China.
1.6 "MAN DAY" means one person's normal working-hours per day.
1.7 "DOLLARS, USD OR US$" means the lawful currency of the United States of
America.
1.8 "GMDAT" means GM-DAEWOO AUTO & TECHNOLOGY COMPANY, a company incorporated
under the laws of Korea.
ARTICLE 2 - TECHNICAL ASSISTANCE
2.1 TECHNICAL DOCUMENTATION
(a) Licensor shall furnish to Licensee, in accordance with the time
schedule to be agreed upon between the Parties, one (1) set of hard
copies of the Technical Documentation. If Licensee discovers that
any of the documents are missing or illegible or damaged, Licensee
shall inform Licensor in writing and Licensor shall make such
documents available for Licensee within twenty (20) days of
receiving such notice.
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(b) The foregoing Technical Documentation to be furnished under
paragraph 2.1 (a) above shall be delivered to Licensee and shall be
the latest version as of the time it is delivered or sent.
(c) Licensee shall pay Licensor for any additional copies of the
Technical Documentation requested by Licensee at the rates agreed
upon in writing by both Parties prior to sending.
(d) Nothing in this Agreement shall be construed to require that
Licensor furnish Licensee with any technical information on any
products other than Licensed Product or any technical information
which may not be furnished because of a government contract, act,
regulation or restriction or the proprietary interest of a third
party.
(e) Errors in Technical Documentation. Each Party shall promptly advise
the other of any significant error it may discover in the Technical
Documentation. In that event, Licensor shall correct any error in
the Technical Documentation and shall furnish such corrected
Technical Documentation to Licensee without charge.
(f) Strict Compliance with Technical Documentation. In order to maintain
the quality of the Licensed Products manufactured and assembled by
Licensee pursuant to this Agreement, Licensee shall manufacture
and/or assemble the Licensed Products in strict accordance with the
standards and specifications stated in the Technical Documentation
provided by Licensor and as otherwise specified by Licensor.
Licensee shall exercise the utmost care in the selection of the
materials and parts to be used and incorporated into the Licensed
Products.
2.2 ASSISTANCE BY LICENSOR
Licensor shall provide reasonable assistance in the use of the Technical
Documentation to the extent such assistance is reasonably necessary for
Licensee to make use of the Technical Documentation to manufacture the
Licensed Product. Such assistance may include, but will not be limited to,
technical assistance, training, testing and limited application
engineering services.
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2.3 TECHNICAL ASSISTANCE
(a) At the request of Licensee, Licensor shall, at times agreed upon by
the Parties, dispatch its engineers to Licensee to provide technical
assistance on matters concerning the use of the Technical
Documentation during the Technical Cooperation Period. All costs and
expenses of such Licensor's personnel dispatched to Licensee shall
be borne, or reimbursed to Licensor, by Licensee and shall include:
(i) round trip economic air fare between Korea and China;
(ii) suitable accommodations, meals , traveling and transportation
expenses in China and other reasonable charges in connection
with the performance of their duties hereunder;
(iii) wage and daily allowance, payable to Licensor, on its demand,
amounting to U$500 per Man Day for Licensor's personnel;
(b) Licensee shall take appropriate steps necessary to protect and
ensure the safety of Licensor's personnel and their property,
including without limitation, against war, war-like operation,
terror, revolution, civil commotion, catastrophe and acts of public
enemies. Licensor reserves the right to instruct any or all of its
dispatched personnel to return to Korea, or such other place as it
may designate, at Licensee's expense when, in Licensor's sole
judgment, one of the above-mentioned situations arises which may
endanger the safety and well-being of such personnel.
(c) Licensee is responsible for obtaining any permits or authorizations
required for Licensor's personnel to enter China to provide services
hereunder, and to bring any related materials required by Licensor.
(d) The number of such personnel, the period of their stay at Licensee's
plant and other terms and conditions not set forth herein shall be
agreed upon between the Parties on a case by case basis.
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2.4 TRAINING
At the request of Licensee, Licensor will, during the Technical
Cooperation Period, provide training on the use of the Technical
Documentation for Licensee's employees (the "Trainees") at Licensor's
place or other places designated by Licensor, subject to the following
terms and conditions:
(i) Licensor and Licensee shall agree on the most efficient training
program for the Trainees;
(ii) Licensee shall bear all the cost and expenses relating to the
Trainees, including but not limited to their salaries, round trip
airfare between China and Korea, lodgings and meals of Trainees in
Korea, transportation and insurance;
(iii) Licensor shall provide working lunches for the trainees during
working days and transportation for the trainees between dormitory
and training site.
(iv) Licensee shall pay to Licensor as training fee, payable upon demand,
US$300 per Trainee per day, as the compensation of training services
provided by Licensor;
(v) Licensee shall instruct the Trainees to observe and abide by all
rules and regulations of Licensor and the laws of Korea during their
training period;
(vi) All Trainees shall be insured at the expense of Licensee by an
internationally recognized accident compensation insurance during
the entire training period between their departure from and return
to Thailand;
(vii) Licensee shall indemnify and hold harmless Licensor against any
loss, damage, claim, liabilities, cost or expense arising out of any
act of a Trainee or any injury or death of the Trainee or any damage
to his/her property.
2.5 SUPPORT OF TESTS
Pursuant to the terms of a purchase order, sale agreement or other
document to be separately agreed by the Parties or Licensee and Delphi,
Licensor will support the necessary manufacturing Part Production Approval
Process validation tests for the Licensed Products.
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2.6 SAMPLE TEST AND VERIFICATION
Before distribution and sale of any of the Licensed Product manufactured
or assembled hereunder, Licensor shall submit, at its expense, samples of
the Licensed Product for approval by Licensor. Licensor shall promptly
conduct appropriate tests on such samples and advise Licensee of the
results thereof. The costs of any tests on the samples shall be
responsibility of Licensee, and Licensor shall advise Licensee of the test
fees in advance.
2.7 LIABILITIES
Licensor shall not be responsible for any liabilities of any kind
whatsoever which Licensee may incur as a result of its using the Technical
Documentation and assistance furnished hereunder or as a result of its
manufacture and sale of any of the Licensed Product and Licensee shall
indemnify and hold Licensor harmless against all claims of third parties
against Licensor based thereon. All Technical Documentation, services,
testing and assistance furnished hereunder are provided without any
warranties or guaranties of any kind, express or implied.
2.8 CONFIDENTIALITY
In recognition of the confidential nature of the Technical Documentation
furnished hereunder, Licensee shall not transmit such Technical
Documentation to any third party during the term of this Agreement and for
a period of five (5) years after the expiration or termination of this
Agreement without the prior written consent of Licensor and shall
establish adequate procedures to prevent such transmittal. Licensor hereby
agrees to Licensee's transmittal of only that portion of the Technical
Documentation that is necessary to be disclosed to its suppliers in order
to have them make parts of Licensed Products for Licensee, provided,
always, that such suppliers shall have agreed in writing that they will
only use the Technical Documentation for that purpose, that they will not
disclose it to others, and that they will return or destroy it in
accordance with the request of Licensor under Article 9.1 hereof. This
obligation of confidentiality shall survive the expiration or termination
of this Agreement and shall be valid and binding upon Licensee pursuant to
the terms hereof.
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2.9 LANGUAGE
The Technical Documentation furnished hereunder and all other
communication between the Parties, including oral communication, shall be
in English.
2.10 PERMANENT ESTABLISHMENT
The aforementioned assistance provided by Licensor under this Agreement
shall not be of a nature or duration so as to constitute a permanent
establishment of Licensor in Licensee's jurisdiction. The Licensee's
presence in Licensor's jurisdiction to receive aforementioned assistance
shall also not be of a nature or duration so as to constitute a permanent
establishment of Licensee in Licensor's jurisdiction.
2.11 IMPROVEMENTS
In the event that Licensee has implemented changes or developed Derivative
Technology, Licensor and Delphi has right to use such changes or
Derivative Technology without royalty.
In the event that Licensor makes any revisions, changes, improvements and
modifications to the aforesaid Technical Documentation, Licensor will
furnish one set of copies of such revisions, changes, improvements and
modifications to Licensee.
2.12 The Technical Documentation made available to Licensee under this
Agreement and all intellectual property rights therein shall remain the
property of Licensor..
ARTICLE 3 - LICENSE
3.1 Licensor hereby grants to Licensee, in strict accordance with the terms
and subject to the condition set forth herein, a non-transferable and
non-exclusive right, without a right to grant sublicenses, to use the
Technical Documentation during the term of this Agreement to manufacture,
made, assemble and/or sell the Licensed Product in China for incorporation
into motor vehicles.
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3.2 Licensee shall not sell any of the Licensed Product outside China without
Licensor's prior written consent.
3.3 Licensee agrees that Technical Documentation made available to it by
Licensor pursuant to this Agreement shall not be used or applied in the
manufacture or assembly of any product other than the Licensed Product.
3.4 Licensor retains all benefits and burdens of ownership of the intellectual
property rights contained in the Technical Documentation licensed under
this Agreement, and is entitled to grant future licenses to others under
such Technical Documentation to the extent such future licenses do not
conflict with this Agreement.
ARTICLE 4 - PURCHASE OF PARTS AND COMPONENTS OF LICENSED PRODUCTS
After signing of this Agreement, the Parties may enter into a separate agreement
for purchase and sale of the parts and components of the Licensed Products and
the spare parts thereof under the mutually agreeable terms and conditions.
ARTICLE 5 - TECHNICAL FEE AND ROYALTY
5.1 TECHNICAL FEE AND ROYALTY PAYMENTS
For and in consideration of the license to be granted by Licensor to
Licensee hereunder and the Technical Documentation to be provided by
Licensor to Licensee as specified herein, Licensee shall pay Licensor the
following:
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(i) a technical fee of Eighty Thousand United States dollars (US$
80,000), payable as follows: The first installment of the technical
fee in an amount of forty Thousand United States Dollars (US$40,000)
shall be paid within thirty (30) days from the signing of this
Agreement; and the second installment of the technical fee in an
amount of forty Thousand United States Dollars (US$40,000) will be
paid within thirty (30) days after the delivery of Technical
Documentation to Licensee in an accordance with Article 2.1 hereof.
(ii) a royalty of three percent (3%) of Selling Price per each set of the
Licensed Product sold by Licensee during the Royalty Period, payable
on quarterly basis as specified in Article 5.2 hereof.
Notwithstanding the foregoing, the Parties agree that no royalty is
payable for the Licensed Product sold by Licensee to Licensor.
5.2 METHOD OF PAYMENT
All payments to be made by Licensee hereunder shall be made in Dollars and
remitted by telegraphic transfer to such bank account as designated by
Licensor.
5.5 PAYMENTS OF TAXES, ETC
Licensee may deduct from payments due any taxes which Licensee is required
to pay in China for the account of Licensor. Licensee shall, on behalf of
and in the name of Licensor, pay any such taxes and arrange to furnish
Licensor with proper receipts for the same from the Chinese tax
authorities. Licensee shall be liable and responsible for any Value Added
Tax levied on any payment. In no event shall any Value Added Tax be
withheld from any payment to Licensor.
5.6 APPROVALS
Licensee shall obtain all approvals required under the laws and
regulations of China to enable Licensee to comply with its obligations
hereunder.
ARTICLE 6 - TRADEMARKS
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This Agreement does not grant Licensee any rights under any trademarks, trade
names, logos or other distinctive marks, words or symbols owned by Licensor.
Licensee shall never, except as may be provided in written agreements with
Licensor, use or authorize the use of (i) any of Licensor's trademarks, trade
names and other distinctive marks or signs, or (ii) any mark, name, word or sign
which so nearly resembles any of the foregoing marks, names, words or signs as
to be likely to cause confusion or mistake, or to deceive the public.
ARTICLE 7 - TERM
This Agreement shall continue in force and effect until the expiry of the
Royalty Period unless sooner terminated in accordance with Article 8.1 hereof.
However, this Agreement may be extended if the Parties enter into an extension
agreement before the expiration of this Agreement
ARTICLE 8 - TERMINATION
8.1 TERMINATION
(a) This Agreement may be terminated by either Party by its giving one
hundred twenty (120) days notice to the other Party in the event of
failure by such other Party to fulfill any of its obligations under
this Agreement; provided, however, that if during the period of such
notice, such other Party remedies such failure, this Agreement shall
continue with the same force and effect as if such notice had not
been given.
(b) This Agreement may be terminated by Licensor in the event that
Licensee become owned and controlled, directly or indirectly, by a
competitor of Licensor in the business of manufacturing Licensed
Products.
(c) Licensor may terminate this Agreement forthwith in the event of the
liquidation, moratorium, bankruptcy or insolvency of Licensee, the
attachment, sequestration or other similar judicial acts on all or
substantially all of Licensee's assets, the nationalization of the
industry which encompasses any of the Licensed Products, any
suspension of payments hereunder by governmental regulation, or the
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existence of a state of war or national emergency in China. Such
termination shall be without prejudice to any other rights or claims
Licensor may have against Licensee.
(d) In the event of expiration or termination of this Agreement for any
reason other than Licensor's breach of its material obligations
hereunder, Licensee's right under Article 3 shall cease and Licensee
shall promptly cease the manufacture and sale of the Licensed
Products and, in accordance with Licensor's request, return or
destroy the Technical Documentation.
8.2 IMMEDIATE PAYMENT
Unless this Agreement is terminated due to Licensor's breach of its
material obligations hereunder, Licensor shall not be liable to Licensee
for damages of any kind on account of termination of this Agreement, as
provided herein, whether such damages result from loss through commitments
or obligations, from loss of investments or of present or prospective
profits or from inability to meet obligations or from any other cause.
Termination of this Agreement shall not relieve Licensee from its
obligation to make all payment called for under this Agreement. Upon
expiration or termination of this Agreement for any reason, all
outstanding payments payable by Licensee hereunder shall accrue and become
immediately due and payable to Licensor. Nothing in the Agreement shall
prevent either party from enforcing the provisions thereof by such
remedies as may be available in lieu of termination.
ARTICLE 9 - SETTLEMENT OF DISPUTES AND GOVERNING LAW
9.1 GENERAL
Any dispute, controversy or claim among the Parties arising out of,
relating to or in connection with this Agreement, or the breach,
termination or validity hereof (a " Dispute") shall be finally settled by
arbitration under the Arbitration Rules of the Singapore International
Arbitration Centre (the "Rules") for the time being in force by one
arbitrator appointed in accordance with the Rules. To the extent that the
procedure of the arbitration is not covered by the Rules, it shall be
decided by the arbitrator. Prior to the initiation of any arbitration, the
Parties shall first attempt amicably and promptly to settle such Dispute
by negotiation and consultation. In the event the Parties are
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unable to settle a Dispute by negotiation and consultation within 90 days
of notice by any Party as to the existence of such Dispute, any Party to
such Dispute may submit the Dispute to arbitration. The arbitral award
shall be final and binding upon the Parties.
9.2 PLACE OF ARBITRATION, GOVERNING LAW AND LAW AND ENFORCEMENT
The place of arbitration shall be Singapore, and the language to be
employed shall be English. This Agreement shall be construed in accordance
with the substantive law of England excluding the doctrine of Renvoi, and
without the possibility to appeal to the ordinary courts. Judgment upon
the award rendered by the arbitrators may be entered in any court having
jurisdiction thereof. The foregoing, however, shall not preclude the
Parties from applying for any preliminary or injunctive remedies available
under applicable laws for any purpose including, but not limited to,
securing the subsequent enforcement of an arbitration award.
9.3 CONTINUED PERFORMANCE
During the period when a Dispute is being resolved in accordance with this
Article 9, the Parties shall continue their performance of this Agreement
except for the matter being disputed. However, if any payment due to
Licensor is disputed, any amount not disputed shall be paid to Licensor in
accordance with the provisions of this Agreement.
ARTICLE 10 - NOTICES
10.1 METHODS OF NOTICE
All notices, requests, demands, and other communications under this
Agreement or in connection herewith shall be given in writing in the
English language delivered by hand, by air courier, by registered air
mail, or by fax, which shall be addressed to the respective Parties as
follows:
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To: Jingzhou Henglong Automotive Parts Co., Ltd.
Attention: General Manager
Address: Henglong Road, Yuqiao Exploration District, Jingzhou, China
Fax No: 86-716-8325538
Tel No: 86-716-8313500
To: Korea Delphi Automotive Systems Corporation
Attention: General Manager
Address: 580-1, Buk-Ri, Nongong-Eup, Dalseong-Gun, Daegu, Korea
Fax No: 82-53-610-2829
Tel No: 82-53-610-2851
10.2 DELIVERY OF NOTICES
Notices sent by personal delivery shall be deemed to have been given on
the date of delivery; by air courier, on the fifth (5) day after they are
sent; by fax, when transmitted; and by registered air mail, fifteen (15)
days after the date of mailing. Either Party may change its address for
notices at any time by written notice to the other Party.
ARTICLE 11 - GENERAL PROVISIONS
11.1 ASSIGNABILITY
This Agreement and each and every covenant, term and condition hereof
shall be binding upon and inure to the benefit of the Parties and their
respective successors and permitted assigns. This Agreement shall not be
assigned by the Party without prior consent of the other Party in writing.
11.2 DISCLAIMER OF AGENCY
This Agreement shall not be deemed to grant either Party hereto the
authority or power to act as an agent of the other Party. No Party shall
have any authority to represent or
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to bind the other Party.
11.3 EFFECT OF HEADINGS
The headings to Articles and Sections of this Agreement are to facilitate
reference only, and do not form a part of this Agreement and shall not in
any way affect or be considered in the interpretation hereof.
11.4 ENTIRE AGREEMENT
This Agreement supersedes all previous oral or written representations,
understandings, or agreements, oral or written, between the Parties with
respect to the subject matter hereof, and the agreements and documents
contemplated hereby contain the entire understanding of the Parties as to
the terms and conditions of their relationship.
11.5 SEVERABILITY
If any term or provision of this Agreement shall be hereafter declared by
a final adjudication of any tribunal or court of competent jurisdiction to
be illegal or invalid, such determination shall not affect the validity or
enforceability of the entire Agreement. In such case, this Agreement shall
be construed, to the extent possible, in a manner to give effect by means
of valid provisions to the intent of the Parties, including their intent
as to the provisions so held to be illegal or invalid, and the Parties
shall negotiate in good faith new provisions to restore, as best as
possible, the original intent and effect of this Agreement.
11.6 MODIFICATION
Changes in, additions to, and amendments of this Agreement shall be valid
and binding on the Parties only if they are in writing, signed by duly
authorized representatives of the Parties.
11.7 WAIVER
The failure with or without intent of any Party to insist upon the strict
performance by the other of any terms or provisions of this Agreement
shall not be treated or deemed
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to constitute a modification of any terms or provisions hereof, nor shall
such failure be deemed to constitute a waiver of the right of such Party
at any time whatsoever thereafter to insist upon the performance by the
other strictly in accordance with any terms or provisions hereof.
11.8 FURTHER ASSURANCES
Each Party shall promptly take all such action as may be required by law,
or as may be necessary or desirable, or that the other Party may
reasonably request, in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions
contemplated hereby.
11.9 EXHIBITS
All Exhibits referred to herein shall form an integral part of this
Agreement.
11.10 FORCE MAJEURE
In addition to any other exception from liability specifically provided
for in this Agreement and subject to the provisions of Article 11.1 above,
neither party will be liable for failure to perform any part of this
Agreement when the failure is due to fire, flood, strike or other labor
dispute, shortage of material, transportation difficulty, accident, war,
riot, act of God, insurrection, civil disturbance, act of government,
government regulation or other occurrence beyond the control of such
party; provided, however, that neither party shall be relieved by any of
the above-cited events or occurrences from its obligation to make payments
due hereunder. In the event performance is prevented or delayed for a
consecutive period of six (6) months or more, the party other than the
party which incurs the delay in its performance may terminate this
Agreement by providing written notice to that effect.
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IN WITNESS WHEREOF, the duly authorized representatives of the Parties
have executed this Agreement in two counterparts, each of which shall be deemed
original on the date first above written.
LICENSEE: LICENSOR:
Jingzhou Henglong Automotive Korea Delphi Automotive Systems
Parts Co., Ltd. Corporation
By _______________________ By ________________________
Name: Name:
Title: Title:
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EXHIBIT B: TECHNICAL DOCUMENTATION
Technical Documentation furnished to Licensee under this Agreement shall
be limited to the Technical Documentation that is available to Licensor, and the
Technical Documentation that Licensor has no restriction in disclosing to
Licensee.
PRODUCT PRODUCTION QUALITY
------------------------- -------------------- ---------------------
- Assembly drawing - Operation Sheet - Inspection Standard
- Parts drawings - Process Flow Chart - Control Plan
- Engineering Parts List
- Material Specification
- Test Specification
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