EXHIBIT 10.37
LICENSE AGREEMENT
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THIS LICENSE AGREEMENT ("Agreement") is made and entered into as of the
28th day of October, 1999, by and between TURBOCHEF TECHNOLOGIES, INC., a
Delaware corporation, (hereinafter called "Licensor") and MAYTAG CORPORATION, a
Delaware corporation (hereinafter called "Licensee").
WITNESSETH:
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WHEREAS, Licensor and Licensee have entered into that certain Strategic
Alliance Agreement dated September 26, 1997 ("SAA"), pursuant to which the
parties agreed to work together in the development and commercialization of
highly innovative products based on leading edge technologies with respect to
heat transfer, thermodynamics and controls; and
WHEREAS, pursuant to the SAA, the parties have executed, among other
documents, that certain Commercial Cooking Appliance Agreement dated July 29,
1998 ("CCAP") regarding the development of commercial cooking appliances and
related technologies and software (collectively, "Commercial Cooking Systems");
and
WHEREAS, Licensor is the sole and exclusive owner of Letters Patent of the
U.S. No. 5,254,823 entitled QUICK COOKING OVEN, issued October 19, 1993 ("823
Patent") and No. 5,434,390 entitled QUICK COOKING OVEN, issued July 18, 1995
("390 Patent") and No. 5,558,793 entitled QUICK COOKING OVEN, issued September
24, 1996 ("793 Patent"), and U.S. No. 5,927,265 entitled RECYCLING COOKING OVEN
WITH CATALYTIC CONVERTER, issued July 27, 1999 ("265 Patent"); and
WHEREAS, Licensor is the sole and exclusive owner of U.S. Patent
Application No. 09/053/960 entitled APPARATUS FOR SUPPLYING MICROWAVE ENERGY TO
A CAVITY, filed April 2, 1998, now allowed, and U.S. Patent Application No.
09/064/988 entitled SYSTEM FOR RAPID AIR TEMPERATURE MODIFICATION IN A
RECIRCULATING OVEN, filed April 23, 1998, and U.S. Patent Application No.
09/169/523 entitled APPARATUS FOR SUPPLYING MICROWAVE ENERGY TO A CAVITY, filed
October 9, 1998; now allowed, and U.S. Patent Application No. 09/199/902
entitled QUICK-COOKING RESIDENTIAL OVEN, filed November 24, 1998; and
WHEREAS, Licensor has applied for patent coverage with regard to inventions
which may be incorporated into the Commercial Cooking Systems in other parts of
the world, including Canada; and
WHEREAS, Licensor has other proprietary technology that Licensor intends to
protect through patents and other forms of intellectual property protection; and
WHEREAS, Licensee desires to obtain certain licenses to use the Licensed
Patents (as hereinafter defined) and the Intellectual Property (as hereinafter
defined) in the manufacture and sale of certain licensed products; and
WHEREAS, Licensor has the power and authority to grant to Licensee such
licenses.
NOW, THEREFORE, in consideration of the premises and of the undertakings of
the parties herein contained, the sufficiency whereof being hereby acknowledged
by each of them, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
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1.01 Certain Definitions. The terms specified in this Section 1.01 shall,
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for all purposes of this Agreement, have the meanings herein specified, unless
the context expressly or by necessary implication otherwise requires.
Affiliate. The term "Affiliate" shall mean, with respect to any Person, any
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other Person that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such Person.
Intellectual Property. The term "Intellectual Property" means any
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copyrights, whether registered or unregistered, mask works, and other
copyrightable works (the "Copyrights"); any computer software applications,
software systems, tools, interfaces, in any form, including object code and
source code, in any media, and related documentation (the "Software"); and any
proprietary inventions, discoveries, improvements, know-how, show-how, works-in-
progress, processes, designs, concepts, technologies, ideas, customer
information, customer lists, marketing strategies, market research, industrial
designs and any other trade secrets (collectively, the "Trade Secrets").
Licensed Products. The term "Licensed Products" means the dual cavity or
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* and the single cavity counter top cooking unit and
substantially similar commercial cooking products as to functionality, which are
designed utilizing the Licensed Patents and/or the Intellectual Property.
Licensed Patents. The term "Licensed Patents" means (i) the 823 Patent, the
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390 Patent, the 793 Patent and the 265 Patent (collectively, the "Basic
Patents"), (ii) any patent issued on an application which has been or may be
filed relating to the disclosure contained in the applications that led to any
of the Basic Patents and any and all foreign counterparts of such Basic Patents,
which may be filed in Canada or Mexico, all as the same may be amended,
modified, reissued, reexamined or revised hereafter.
* Language has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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Person. The term "Person" means an individual, corporation, partnership,
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trust, unincorporated organization or a government or any agency or political
subdivision thereof.
Sold. The term "Sold" shall mean the time at which Licensed Products are
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first billed, shipped or delivered by Licensee to a customer other than any of
Licensee's Affiliates. In the case of consignment transactions, Licensed
Products shall be deemed to have been sold when Licensee has processed a
withdrawal notice. A lease or other disposition of a Licensed Product by which
a right of possession, sale and/or use (except non-commercial experimental use)
of a Licensed Product is transferred by Licensee to a third party, shall be
deemed to be a sale hereunder. For purposes of this Agreement, all Licensed
Products shall be deemed to be Sold in the United States of America.
Territory. The term "Territory" means the United States of America, Canada,
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Mexico and the Caribbean Islands.
Trademark. The term "Trademark" means Licensor's trademark
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TurboChef/(R)/.
1.02 Other Definitions. In addition to the terms defined in Section 1.01
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hereof, certain other terms are defined elsewhere in this Agreement, and
whenever such terms are used in this Agreement, they shall have their respective
defined meanings, unless the context expressly or by necessary implication
otherwise requires.
ARTICLE II
SCOPE
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2.01 Grant of Exclusive Licenses. Licensor hereby grants to Licensee the
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necessary right, license and authority for the period commencing on the date
hereof and ending on March 31, 2002, and subject to the provisions of this
Agreement:
A. To market, distribute, use and sell the Licensed Products on an
exclusive basis in the Territory to commercial foodservice
establishments, including, but not limited to, commercial food
service businesses, restaurants, hotels and lodging businesses,
supermarkets and convenience stores.
B. To use the Trademark (i) on the Licensed Products manufactured or
assembled in the Territory, and (ii) in connection with marketing,
selling and distributing the Licensed Products in accordance with
this Agreement.
C. Licensee shall be permitted to export Licensed Products on an
exclusive basis only in connection with the sale of Licensed
Products to multi-national foodservice businesses which have their
principal executive offices in the Territory pursuant to written
sales agreements with such multi-national foodservice businesses
which calls for the sale of the Licensed Products to
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such businesses or any commercial foodservice Affiliate thereof
outside of the Territory; provided, that no Licensed Product shall
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be exported to, or sold for installation or use in the United
Kingdom, without the prior written consent of Licensor.
2.02 Grant of Non-Exclusive Licenses.
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A. Licensor hereby grants to Licensee the necessary right, license and
authority for the period commencing on the date hereof and ending
on March 31, 2002, and subject to the provisions of this Agreement:
(i) To manufacture and assemble, and to have manufactured and
assembled, the Licensed Products on a non-exclusive basis in
the Territory according to the Intellectual Property and
Licensed Patents and the Intellectual Property furnished by
Licensor; and
(ii) Licensee shall be permitted to export Licensed Products
outside of the Territory on a non-exclusive basis in
connection with sales of Licensed Products to multi-national
foodservice businesses and their commercial foodservice
Affiliates, provided, that, Licensee establishes a
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relationship with such multi-national foodservice business
and such business has its principal executive offices in the
Territory. Notwithstanding the foregoing, Licensee shall not
export any Licensed Product outside of the Territory if such
exported Licensed Product is sold for installation or use in
the United Kingdom, without the prior written consent of
Licensor.
B. Licensor hereby grants to Licensee the necessary right, license and
authority for the period commencing on April 1, 2002 and ending
upon the termination of this Agreement and subject to the
provisions of this Agreement:
(i) To manufacture and assemble, and to have manufactured and
assembled, the Licensed Products on a non-exclusive basis in
the Territory according to the Licensed Patents and the
Intellectual Property furnished by Licensor;
(ii) To market, distribute, use and sell the Licensed Products on
a non-exclusive basis in the Territory to commercial
foodservice establishments, including, but not limited to,
commercial food service businesses, restaurants, hotels and
lodging businesses, supermarkets and convenience stores;
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(iii) To use the Trademark (i) on the Licensed Products
manufactured or assembled in the Territory, and (ii) in
connection with marketing, selling and distributing the
Licensed Products in accordance with this Agreement; and
(iv) Licensee shall be permitted to export Licensed Products
outside of the Territory on a non-exclusive basis in
connection with sales of Licensed Products to multi-national
foodservice businesses and their commercial foodservice
Affiliates, provided, that, Licensee establishes a
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relationship with such multi-national business and such
business has its principal executive offices in the
Territory. Notwithstanding the foregoing, Licensee shall not
export any Licensed Product outside of the Territory if such
exported Licensed Product is sold for installation or use in
the United Kingdom, without the prior written consent of
Licensor.
2.03 Grant of Exclusive Rights Regarding * .
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Licensor hereby grants to Licensee the exclusive right to market, distribute and
sell the Licensed Products to *
and its commercial foodservice Affiliates throughout the world during the period
commencing on the date of this Agreement and ending on March 31, 2003 (the
* Exclusivity Period"); provided, that, * approves
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Licensee as the single source of supply for the Licensed Products. In the event
that during the * Exclusivity Period, * requests one
or more additional sources of supply of the Licensed Products, then Licensor and
Licensee shall mutually designate such additional sources of supply. In the
event that within one hundred and twenty (120) days after the date that
* requests one or more additional sources of supply of the Licensed
Products, Licensor and Licensee are unable to agree as to the requested
additional sources of supply, then * shall have the right to
designate such additional sources of supply.
2.04 Extension of Exclusive Licenses and Rights. Licensor and Licensee
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acknowledge and agree that the commercial launch of the Licensed Products
currently under development (the single cavity counter top cooking unit and the
dual cavity or * by * is
critically important to the parties. Accordingly, the parties shall use their
respective best efforts to achieve the commercial launch of such products prior
to such date. However, in the event that the commercial launches for both of
these products do not occur prior to * the Licensee may
request that the respective exclusivity periods contemplated by Section 2.01 and
Section 2.03 be extended for up to three (3) additional months and such
requested extension shall be granted by Licensor; provided, that, at the time of
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such request Licensee is otherwise in compliance with the terms of this
Agreement.
2.05 Early Termination of Exclusive Licenses and Rights. In the event
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that during the period commencing on April 1, 2000 and ending March 31, 2001,
the cumulative actual royalties payable by Licensee to Licensor pursuant to
Section 4.02 hereof are more than twenty percent (20%) less than the minimum
royalty payment due from Licensee for such period, Licensor shall have the
option to terminate the exclusive licenses and rights granted to Licensee
pursuant to Section 2.01
* Language has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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hereof. Licensor shall exercise such option by (i) providing Licensee with
written notice thereof, and (ii) no later than June 30, 2001, reimbursing
Licensee an amount equal to fifty percent (50%) of the development fees paid to
Licensor by Licensee with respect to the single cavity counter top cooking unit
pursuant to Section 4.01 hereof. Provided that Licensor properly exercises such
early termination option in accordance with the preceding sentence, all
exclusive licenses and rights granted by Licensor to Licensee pursuant to
section 2.01 hereof shall terminate on August 31, 2001.
2.06 Reasonable Efforts of License. During the term of this Agreement,
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Licensee agrees to use all reasonable commercial efforts to promote the
commercialization of the Licensed Patents and the Intellectual Property through
Licensee's manufacturing, marketing and selling of the Licensed Products in the
Territory and to * .
2.07 Reservation of Rights. Notwithstanding anything contained in this
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Article II to the contrary, all licenses and rights granted to Licensee
hereunder shall be subject to a reserved, non-exclusive, non-assignable license
in Licensor to manufacture, assemble, have manufactured and assembled, market,
distribute, use and sell any apparatus embodying any of the Licensed Patents
and/or the Intellectual Property anywhere in the world; provided, that neither
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Licensor nor any of its licensees shall have any license or right to distribute
or sell any Licensed Products in the Territory during such period as the
exclusive rights and licenses granted to Licensee pursuant to Section 2.01 are
in effect.
2.08 Non-Exclusive Arrangement. Subject to the confidentiality
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provisions contained in Article VI hereof, Licensor and Licensee shall each have
the right to participate in, propose, support or agree to participate in,
propose or support, the development and/or commercialization of any commercial
cooking system or appliance; provided, that, (i) Licensor shall not have the
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right to directly or indirectly market, distribute or sell any commercial
cooking system or appliance in violation of the provisions of Sections 2.01 and
2.03, to the extent then in effect, (ii) Licensee shall not have the right to
directly or indirectly market, distribute or sell any Rapid Cook Cooking
Appliance in the Territory during the period that the exclusive licenses and
rights granted to Licensee pursuant to Section 2.01 are in effect, and (iii)
Licensee shall not have the right to directly or indirectly market, distribute
or sell any Rapid Cook Cooking Appliance to * or any of its
Affiliates anywhere in the world during the period that the exclusive licenses
and rights granted to Licensee pursuant to Section 2.03 are in effect. For
purposes of this Agreement, the term "Rapid Cook Cooking Appliance" shall mean
any commercial cooking appliance or system which is designed to cook food at
more than three (3) times the speed that the standard commercial convection oven
in existence as of the date of this Agreement can cook food, excluding the
Licensed Products. Notwithstanding the foregoing, Licensor and Licensee may
mutually agree to work together in the development and/or commercialization of
any Rapid Cook Cooking Appliance which utilizes intellectual property other than
the Licensed Patents and Licensor's Intellectual Property. In the event that
Licensor and Licensee mutually agree not to develop and/or commercialize a
particular Rapid Cook Cooking Appliance, than Licensee may pursue alternative
technologies to meet the customer's requirements.
* Language has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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ARTICLE III
DEVELOPMENT OF LICENSED PRODUCTS
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3.01 Development of Licensed Products. During the period commencing on the
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date of this Agreement and ending approximately on May 1, 2000, Licensor shall
assist Licensee in developing the dual cavity or * proof of
concept prototype, based upon specifications provided by Maytag. During the
period commencing on the date of this Agreement and ending approximately on
April 30, 2000, Licensor shall assist Licensee in developing the single cavity
counter top cooking unit, based upon specifications provided by Maytag.
3.02 Termination of Development Arrangement. Licensee may terminate
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either development arrangement described in Section 3.01 upon providing thirty
(30) days prior written notice to Licensor. In the event that Licensee provides
such notice to Licensor, Licensee's obligation to pay the development fees set
forth on Schedule A with respect to such Licensed Product shall terminate as of
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the effective date of the termination of development arrangement with respect to
such Licensed Product. Under no circumstances shall Licensee be entitled to any
refund of any development fees paid to Licensor.
3.03 Training at Licensee Facilities. At the written request of Licensee
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and upon reasonable prior notice, Licensor will dispatch a reasonable number of
qualified technical personnel to visit Licensee for such period of time as may
be mutually agreed upon, to act as consultants to Licensee on matters pertaining
to the manufacture, quality control, inspection and testing of the Licensed
Products. Licensee agrees to reimburse Licensor for all costs and expenses for
such training, including all traveling and reasonable living expenses incurred
by Licensor's technical employees, and to pay Licensor such other fees as the
parties may mutually agree upon.
ARTICLE IV
PAYMENTS
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4.01 Development Fees. In consideration of the assistance given and to be
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given under the terms of this Agreement, Licensee shall pay to Licensor the
development fees set forth on Schedule A hereto at the times and in the manner
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described therein.
4.02 Royalty Payments. In consideration of the licenses granted by
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Licensor hereunder, during the term of this Agreement Licensee shall pay to
Licensor, in respect of all Licensed Products, the royalties as set forth on
Schedule B hereto.
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4.03 Payment of Royalties. The royalties due to Licensor under this
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Agreement shall be remitted to Licensor promptly not later than forty-five (45)
days after the end of every fiscal quarter of Licensee. Such amounts shall be
payable in U.S. dollars. If Licensee issues partial invoices, such
* Language has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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partial invoices shall cause payment of proportional royalties to Licensor. Any
amount not paid when due shall bear interest at the lesser of (i) the rate of
one percent (1%) per month, and (ii) highest rate per month permitted by
applicable law, until the date of payment.
4.04 Periodic Statements. During the term of this Agreement, within forty-
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five (45) days after the end of every fiscal quarter of Licensee, Licensee shall
furnish to Licensor a written statement setting forth all calculations relating
to the royalties, including, without limitation, the quantities, models, gross
margins and net sales of the Licensed Products manufactured and/or Sold by
Licensee during such quarter. Such written statements shall be furnished by
Licensee to Licensor regardless of whether any Licensed Products were Sold
during the fiscal quarter or whether any royalties were payable to Licensor.
4.05 Books and Records. Licensee shall keep at its usual place of business
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all such proper books of account and records as may be necessary to enable the
royalties hereunder to be accurately ascertained and shall permit Licensor's
duly authorized representatives to audit and investigate the same during
Licensee's regular business hours, at Licensor's own expense; provided, however,
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that if Licensor identifies any inaccuracies in such books of account and/or
records to the detriment of Licensor which aggregate One Hundred Thousand
Dollars ($100,000.00) or more then the costs of such audit and/or investigation
shall be paid by Licensee. Licensee agrees that all books of account and
records with respect to the Licensed Products and/or the royalties payable to
Licensor under this Agreement shall be maintained by Licensee and made available
for inspection by Licensor for a period of two (2) years after the termination
of this Agreement.
4.06 Taxes. Should Licensee be required by any governmental authorities to
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withhold or pay any amount of taxes on account of any payment due to Licensor
hereunder, such amounts may be deducted from payments to Licensor. The proof
that such payments have been made shall be timely furnished to Licensor for its
use in obtaining tax credits.
ARTICLE V
ENHANCEMENTS
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5.01 Ownership of Enhancements. Any improvement, modification, discovery,
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process, know-how, derivative work, or other enhancement ("Enhancement") based
upon, or related to any Licensed Patent or any of Licensor's Intellectual
Property that is created, invented or discovered in connection with this
Agreement shall be owned exclusively by Licensor.
5.02 Limited License to Use Enhancements. During the period that the
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exclusive licenses and rights granted to Licensee pursuant to Section 2.01
hereof are in effect, if Licensee shall have contributed to the development,
creation or discovery of an Enhancement based upon, or related to, any Licensed
Patent or any of Licensor's Intellectual Property, upon Licensee's request,
Licensor shall grant to Licensee a limited, exclusive, non-assignable license at
a reasonable royalty rate to use such Enhancement in accordance with the terms
and conditions of a license to be mutually agreed upon by the parties.
Thereafter, during the term of this Agreement, if Licensee shall have
contributed to the
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development, creation or discovery of an Enhancement based upon, or related to,
any Licensed Patent or any of Licensor's Intellectual Property, upon Licensee's
request, Licensor shall grant to Licensee a limited, non-exclusive, non-
assignable, revocable license at a reasonable royalty rate to use such
Enhancement in accordance with the terms and conditions of a license agreement
to be mutually agreed upon by the parties.
5.03 Prosecution of Patent Applications or Other Protection for
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Enhancements. Licensee will reasonably cooperate and execute all documents
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reasonably required to assist Licensor to file and prosecute any patent
application or obtain other protection for any Enhancement.
ARTICLE VI
CONFIDENTIALITY
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6.01 Confidential Information. Information communicated by one party
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(the "Disclosing Party") to the other (the "Receiving Party") pursuant to this
Agreement which the Disclosing Party considers confidential shall, when
communicated in documentary form or on computer tape or disc or transmitted
electronically, be marked, or designated, as "Confidential." In the event
information is communicated orally or by transfer of non-documentary materials,
the confidential nature of such information shall be confirmed to the Receiving
Party in writing within twenty (20) days after such disclosure. "Confidential
Information" shall mean any and all information in any form with respect to the
Disclosing Party's technical or business matters which are designated by the
Disclosing Party as "Confidential" in the manner set forth above.
Notwithstanding the provisions of this Section 6.01, as to those subjects within
Licensor, it is agreed that all disclosure of information with respect to said
subjects shall be considered "Confidential Information," regardless of the form
in which it is communicated and whether marked "confidential" or not, unless
otherwise indicated in writing by the Disclosing Party.
6.02 Maintenance of Confidentiality. During the term of this Agreement
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and for a period of five (5) years thereafter, the Receiving Party shall
maintain all Confidential Information of the Disclosing Party in strict
confidence, shall not publish, disseminate, disclose or otherwise make such
Confidential Information available to any third party, and shall not use such
Confidential Information for any purpose other than for the benefit of the
Disclosing Party in a manner approved by the Disclosing Party; provided, that as
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to documentation containing Confidential Information which is designated by a
party as "Super Confidential," the obligations of this Section 6.02 shall remain
in force beyond the period specified in this Section 6.02 for so long as such
information remains confidential. The Receiving Party agrees to limit the
dissemination of, and access to, the Confidential Information to employees of
the Receiving Party (together with its legal advisors) who have a "need to know"
such information, provided that such employees shall have entered into
appropriate confidentiality relationships with the Receiving Party so as to
ensure that the Receiving Party has the legal right to implement the terms and
conditions of this Confidentiality Agreement.
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6.03 Exceptions. Notwithstanding anything contained in Section 6.02 to
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the contrary, the obligations of confidentiality and non-use on the part of the
Receiving party shall not apply to information which:
(a) the Receiving Party can establish was publicly known or was known to
the Receiving Party at the time of disclosure;
(b) become publicly known subsequent to the time of disclosure, provided
that such public knowledge is not the result of disclosure of
Confidential Information by the Receiving Party;
(c) is approved for release by prior written authorization of the
Disclosing Party; or
(d) is required to be disclosed by applicable law, regulation or legal
process (whether by subpoena, civil investigative demand, or other
similar process), provided that if the Receiving Party is so required
to disclose any of the Confidential Information the Receiving Party
will provide the Disclosing Party with prompt notice of any such
request of which the Receiving Party has knowledge so that the
Disclosing party may seek a protective order or other appropriate
remedy or waive the Receiving Party's compliance with the provisions
of this Confidentiality Agreement, as appropriate. Regardless of
whether the Disclosing Party waives compliance with the terms hereof,
or whether a protective order or other appropriate remedy is
obtained, the Receiving Party will furnish only that portion of the
Confidential Information which is required to be disclosed by such
applicable law, regulation or legal process.
6.04 Remedies. The parties acknowledge and agree that a breach of this
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Article VI by either of them would cause irreparable damage to the non-breaching
party, that such damage would be difficult to measure, and that such damage may
not be adequately compensated by monetary damages. Consequently, the parties
agree that each shall be entitled to equitable relief, including injunction and
specific performance, in the event of any breach of the provisions of this
Article VI, in addition to all remedies available to the parties at law or in
equity.
ARTICLE VII
MARKINGS; SAMPLES
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7.01 Patent Identification. Licensee shall affix, display or otherwise
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conspicuously mark each Licensed Product to indicate any Licensed Patent, if
any, applicable thereto, together with the number(s) of such patent(s) in
accordance with applicable statutory patent marking requirements. Licensee shall
indicate on each of the Licensed Products manufactured or assembled by the
Licensee, in compliance with Licensor's instructions, that such Licensed
Products were manufactured or assembled by Licensee, under the license of
Licensor.
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7.02 Use of Trademark on Licensed Products. Licensee shall affix,
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display or otherwise conspicuously mark the front of each Licensed Product with
Licensor's Trademark. The specific details with respect to such marking,
including, without limitation, the size and precise location thereof shall be
mutually agreed upon from time to time by the parties.
7.03 Use of Corporate Name, Trademark in Marketing Activities.
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Subject to the provisions of this Agreement, Licensor hereby grants Licensee the
right and authority to use Licensor's corporate name and Trademark in connection
with marketing and promoting the sale of the Licensed Products. Licensee shall
include references to Licensor in its marketing material with respect to the
Licensed Products, including, without limitation, materials distributed at trade
shows and publications regarding the Licensed Products. The specific details
with respect to the manner in which such marketing materials shall incorporate
Licensor's corporate name and/or Trademark shall be mutually agreed upon from
time to time by the parties.
7.04 Termination of Use of Licensor's Markings. Licensor reserves the
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right to immediately terminate the rights granted to Licensee pursuant to
Sections 7.01, 7.02 and 7.03 if at any time the quality of the Licensed Product
does not conform to Licensor's standards; provided, that, Licensor shall have
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furnished Licensee with at least sixty (60) days prior written notice of such
quality issues and Licensor shall have failed to address such issues to
Licensor's satisfaction.
7.05 Use of Markings Upon Termination of Agreement. Any consent or
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designation of any marking and any permission that may be granted hereunder by
Licensor to Licensee to apply any Licensed Patent, Licensor's corporate name, or
any of Licensor's trademarks or trade names to the Licensed Products terminates
with the end of this Agreement or with the earlier cessation of royalty
payments. Upon such termination, Licensee shall cease all use of such Licensed
Patents, corporate name, trademarks or trade names in connection with its
business; provided, that, Licensee shall be permitted a transition period of
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sixty (60) days subsequent to the termination of this Agreement in which to
utilize and phase out all inventory of Licensed Products evidencing any Licensed
Patent or the Trademark.
7.06 Licensee Rights. Licensee shall not make any claim that its use of
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any of the Licensed Patents, or any of Licensor's Intellectual Property,
corporate name, trademarks or trade names or parts thereof gives or shall have
given Licensee any rights to such Licensed Patents, Intellectual Property
corporate name, trademarks, trade names, or parts thereof, except as
specifically provided in this Agreement. Each party shall retain exclusive
ownership of and rights to its own Intellectual Property.
7.07 Samples. From time to time during the term of this Agreement,
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upon the written request of Licensor, Licensee shall provide Licensor with
samples of product literature and marketing and promotional materials with
respect to the Licensed Products. In addition, each calendar year that this
Agreement is in effect, Licensee shall provide Licensor with two (2) samples of
each Licensed Product, at no cost or expense to Licensor.
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ARTICLE VIII
PATENT INFRINGEMENT BY THIRD PARTIES
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In the event either party hereto has reason to believe that any Licensed
Patent is being infringed upon by a Person in the Territory, such party shall
promptly notify the other party in writing of such belief. The two parties
shall then consult to examine the proper action to be taken, such as the
negotiation of a settlement or the initiation and prosecution of a lawsuit,
although Licensor alone shall be entitled to decide the appropriate action to
take. Licensor shall have one hundred and twenty (120) days from said
notification to decide whether it will take action to enforce said Licensed
Patent. If Licensor decides to initiate a lawsuit, then Licensor shall be
entitled to individually prosecute such infringement claim. In such case
Licensor shall assume all of the risks and expenses arising therefrom and shall
be entitled to receive all monies recovered therefrom.
If no action has been taken to enforce said Licensed Patent within one
hundred fifty (150) days of said notice of an infringement, Licensee may demand
that Licensor initiate such suit, provided Licensee agrees to bear all risks and
expenses with respect to such legal action. In such case, in the event that
Licensor receives an award of damages or payment in settlement of such action,
Licensee shall first be entitled to receive reimbursement for all costs and
attorneys fees relating to such action. Thereafter, subject to the provisions of
any intellectual property insurance policies of Licensor which are then in
effect, Licensor and Licensee shall share equally in all amounts awarded as
damages, profits or otherwise in connection with such action.
In any suit covered by this Article, both parties shall cooperate in the
conduct of such suit and shall take all steps reasonable and necessary to assist
one another in its prosecution.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
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9.01 Licensor Representations and Warranties. In order to induce the
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Licensee to enter into this Agreement and to consummate the transactions
contemplated hereby, Licensor hereby represents and warrants as of the date
hereof as follows:
(a) Organization; Power and Authority. Licensor is a corporation duly
---------------------------------
organized, validly existing and in good standing under the laws of
the State of Delaware. Licensor has full corporate power and
authority to execute and deliver this Agreement and to perform
Licensor's obligations hereunder and to consummate the transactions
contemplated hereby.
(b) Authorization. The execution, delivery and performance of this
-------------
Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary
corporate action on the part of Licensor. This Agreement has been
duly executed and delivered by Licensor, and constitutes the valid,
legal and
12
binding obligation of Licensor, enforceable against Licensor in
accordance with its terms.
(c) Conflicts; Defaults. The execution and delivery of this Agreement
-------------------
does not, and the performance by Licensor of its obligations
hereunder and the consummation by Licensor of the transactions
contemplated hereby, will not (i) violate, conflict with, or
constitute a breach or default under any of the terms of Licensor's
Articles of Incorporation or Bylaws, as such documents have been
amended, or (ii) conflict with or result in a breach of, create an
event of default (or event that, with the giving of notice or lapse
of time or both, would constitute an event of default) under, or give
any third party the right to terminate, cancel or accelerate any
obligation under, any contract, agreement, note, bond, guarantee,
deed of trust, loan agreement, mortgage, license, lease, indenture,
instrument, order, arbitration award, judgment or decree to which
Licensor is a party or by which Licensor or any of its assets or
properties are bound or affected.
(d) Ownership of Licensed Patents. Licensor, either legally or
-----------------------------
beneficially, owns or controls the entire right, title and interest
in and to the Licensed Patents, including the right to (i) grant
licenses with respect to any of the Licensed Patents, and (ii)
enforce any issued patent or patents included among the Licensed
Patents against any third party infringing any claim or claims
thereof. To the actual knowledge of Licensor, there are no written
claims, actions or lawsuits pending which could adversely affect the
Licensed Patents or Licensor's rights thereto.
(e) No Implied Warranties. The Licensed Patents and Intellectual Property
---------------------
provided to Licensee by Licensor pursuant to this Agreement are
provided as is and with all faults; that is, all implied warranties,
including without limitation implied warranties of merchantability
and fitness for a particular purpose, are excluded, and no express
warranties are given by Licensor hereunder.
9.02 Licensee Representations and Warranties. In order to induce the
---------------------------------------
Licensor to enter into this Agreement and to consummate the transactions
contemplated hereby, Licensee hereby represents and warrants as of the date
hereof as follows:
(a) Organization and Good Standing; Power and Authority. Licensee is a
---------------------------------------------------
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Licensee has full corporate
power and authority to execute and deliver this Agreement and to
perform Licensee's obligations hereunder and to consummate the
transactions contemplated hereby.
(b) Authorization. The execution, delivery and performance of this
-------------
Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary
corporate action on the part of Licensee. This Agreement has been
duly executed and delivered by Licensee, and constitutes the valid,
legal and binding obligation of Licensee, enforceable against
Licensee in accordance with its terms.
13
(c) Conflicts; Defaults. The execution and delivery of this Agreement
does not, and the performance by Licensee of its obligations
hereunder and the consummation by Licensee of the transactions
contemplated hereby, will not (i) violate, conflict with, or
constitute a breach or default under any of the terms of Licensee's
Articles of Incorporation or Bylaws, as such documents have been
amended, or (ii) conflict with or result in a breach of, create an
event of default (or event that, with the giving of notice or lapse
of time or both, would constitute an event of default) under, or give
any third party the right to terminate, cancel or accelerate any
obligation under, any contract, agreement, note, bond, guarantee,
deed of trust, loan agreement, mortgage, license, lease, indenture,
instrument, order, arbitration award, judgment or decree to which
Licensee is a party or by which Licensee or any of its assets or
properties are bound or affected.
ARTICLE X
INDEMNIFICATION
---------------
10.01 Indemnification by Licensor. Licensor shall indemnify, defend and
---------------------------
hold Licensee and its Affiliates harmless from and against and reimburse
Licensee and its Affiliates for any and all claims, losses, liabilities,
damages, and reasonable and necessary costs and expenses (collectively,
"Liabilities") that may be incurred by, imposed upon or asserted against
Licensee and/or its Affiliates arising from any inaccuracy in or breach of any
representation, warranty, covenant, obligation or agreement of Licensor
contained herein.
10.02 Indemnification by Licensee. Licensee shall indemnify, defend and
---------------------------
hold Licensor and its Affiliates harmless from and against and reimburse
Licensor and its Affiliates for any and all Liabilities that may be incurred by,
imposed upon or asserted against Licensor and/or its Affiliates arising from or
relating to: (i) any inaccuracy in or breach of any representation, warranty,
covenant, obligation or agreement of Licensee contained herein; and (ii)
manufacturing, assembling, marketing, distributing, selling or using any of the
Licensed Products, including, without limitation, all Liabilities arising from
claims founded upon product liability or product warranty.
10.03 Notification of Claim. Each indemnified party under this Article
---------------------
X will promptly, and within ten (10) days after notice to such indemnified party
of any claim as to which it asserts a claim for indemnification, notify the
indemnifying party of such claim and the amount thereof; provided, however, that
the failure to give such notification shall not relieve the indemnifying party
from any liability which it may have pursuant to the provisions of this Article
X as long as the failure to give such notice within such time is not prejudicial
to the indemnifying party. Notice to an indemnified party for the purpose of
the preceding sentence shall mean the filing of any legal action, receipt of any
claim in writing or similar form of actual notice.
10.04 Defense of Claim. If any claim for indemnification by any
----------------
indemnified party arises out of a claim by a person other than such indemnified
party, the indemnifying party may, by written notice to the indemnified party,
undertake to conduct any proceedings or negotiations in connection
14
therewith or necessary to defend the indemnified party and take all other steps
or proceedings to settle or contest such claim, including, but not limited to,
the employment of counsel; provided, however, that the indemnifying party shall
reasonably consider the advice of the indemnified party as to the defense and
settlement of such claim and the indemnified party shall have the right to
participate, at its own expense, in such defense, but control of such litigation
and settlement shall remain with the indemnifying party. The indemnified party
shall provide all reasonable cooperation in connection with any such defense by
the indemnifying party. Counsel and auditor fees, filing fees and court fees of
all proceedings, contests or lawsuits with respect to any such claim shall be
borne by the indemnifying party. If any such claim is made hereunder and the
indemnifying party elects not to undertake the defense thereof by written notice
to the indemnified party, the indemnified party shall be entitled to
indemnification with respect thereto pursuant to the terms of this Article X. To
the extent that the indemnifying party undertakes the defense of such claim by
written notice to the indemnified party and diligently pursues such defense at
its expense, the indemnified party shall be entitled to indemnification
hereunder only to the extent that such defense is unsuccessful as determined by
a final judgment of a court of competent jurisdiction, or by written
acknowledgment of the parties.
ARTICLE XI
SUB-LICENSING
-------------
During the term of this Agreement, Licensee may not sublicense the Licensed
Patents or the Intellectual Property to any third party, or utilize
subcontractors in the performance of this Agreement, without the prior written
consent of the Licensor, which consent shall not be unreasonably withheld or
delayed. The terms of any such sublicensing will be as mutually agreed to by all
the parties concerned, including Licensor. The termination of the licenses
granted under this Agreement shall automatically terminate all sublicenses which
may have been granted by Licensee in accordance with this Agreement. Any
sublicense granted hereunder by Licensee shall refer to and incorporate by
reference this Agreement and shall provide that Licensor shall be deemed a third
party beneficiary of such sublicense.
ARTICLE XII
TERM AND TERMINATION
--------------------
12.01 Term. Unless earlier terminated as provided herein, this
----
Agreement shall remain in full force and effect until the expiration or
termination of the last to expire of the Licensed Patents.
12.02 Termination of Agreement Due to Default. In the event that a
---------------------------------------
party to this Agreement shall fail or refuse to fulfill or perform any material
conditions of this Agreement, such party shall be considered to have breached
this Agreement and such a breach shall entitle the other party to terminate this
Agreement at any time solely in its judgment by giving sixty (60) days' written
notice therefor to the party in breach. If the party in breach does not rectify
the default within said sixty (60) day period, the termination shall become
effective immediately upon the expiration of such period.
15
12.03 Termination of Agreement by Licensor. Licensor shall have the
------------------------------------
right to terminate this Agreement by giving written notice to that effect to
Licensee upon the occurrence of any of the following events:
(a) If Licensee should cease to function as a going concern or
conduct its operations in the normal course of business;
(b) If a voluntary or involuntary petition under the provisions
of any federal or state bankruptcy law is filed with respect
to Licensee, or any application for or appointment of a
trustee or receiver for Licensee's property is filed, the
filing of which remains unsatisfied and not discharged at the
end of sixty (60) days after the occurrence of such event;
(c) If Licensee defaults in the payment of any amount due
pursuant to the provisions of this Agreement for a period of
thirty (30) days; or
(d) If Licensee wrongfully attempts to assign, transfer,
sublicensee or otherwise encumber this Agreement or any of
Licensee's rights or obligations hereunder.
12.04 Termination of Agreement by Licensee. Licensee may terminate this
------------------------------------
Agreement at any time by providing Licensor with at least one hundred eighty
(180) days' prior written notice of Licensee's intention to terminate this
Agreement. In the event that Licensee exercises its right to terminate this
Agreement pursuant to this Section 12.04, the entire amount of the minimum
royalties described on Schedule B hereto which have not previously been paid to
----------
Licensor shall immediately become due and payable. Such outstanding minimum
royalties shall be paid by Licensee to Licensor in a single lump sum cash
payment no later than thirty (30) days prior to the effective date of any
termination hereunder.
12.05 Effect of Termination. The termination of this Agreement for any
---------------------
cause whatsoever shall not affect or prevent payment of any and all royalties
then due to Licensor from Licensee or any royalties which would become due
thereafter under this Agreement. Furthermore, such termination shall not affect
any obligation whatsoever stipulated in the individual provisions herein which
bind the parties hereto even after termination hereof, including, without
limitation, the indemnification provisions set forth in Article X hereof which
shall survive indefinitely.
12.06 Return of Intellectual Property. In the event of the termination of
-------------------------------
this Agreement, unless otherwise agreed by Licensor and Licensee, upon
Licensor's written request, Licensee shall promptly return to Licensor at
Licensee's expense all Intellectual Property supplied by Licensor under or in
connection with this Agreement, together with any and all copies of all
documents and materials containing any Intellectual Property, and shall
immediately pay to Licensor all sums owing to Licensor.
12.07 Limited Liability. In the event that either party shall be held
-----------------
liable to the other party on account of such party's performance or non-
performance of its obligations under this Agreement, the
16
measure of damages shall not include any amounts for indirect or consequential
damages of any party, including any third parties.
ARTICLE XIII
MISCELLANEOUS
-------------
13.01 Force Majeure. If the performance by either party of any of its
-------------
obligations shall be in any way prevented, interrupted or hindered in
consequence of an Act of God, war, civil disturbance, riots, strike, lockout,
fire, earthquake or other natural calamities, legislation or restriction of any
government or other authority, force majeure or any other circumstances beyond
the reasonable control of such party, the obligations of the party concerned
shall be wholly or partially suspended during the continuance and to the extent
of such prevention of interruption or hindrance.
13.02 Notices. All notices, requests and other communications under
-------
this Agreement shall be in writing (including a writing delivered by facsimile
transmission) and shall be deemed to have been duly given if delivered
personally, or sent by either certified or registered mail, return receipt
requested, postage prepaid, or by overnight courier guaranteeing next day
delivery, or by facsimile, addressed as follows:
(a) If to Licensee:
Maytag Corporation
403 West Fourth Street North
P. O. Box 39
Newton, Iowa 50208
Attn: General Counsel
Facsimile: (515) 791-8102
or at such other address or facsimile number as Licensee may have advised
Licensor in writing; and
(b) If to Licensor:
TurboChef Technologies, Inc.
10500 Metric Drive
Suite 128
Dallas, Texas 75243
Attn: President
Facsimile No.: (214) 340-8477
or at such other address or facsimile number as Licensor may have advised
Licensee in writing.
All such notices, requests and other communications shall be deemed to have
been received on the date of delivery thereof, if delivered by hand, on the
fifth day after the mailing thereof, if
17
mailed, on the next day after the sending thereof, if by overnight courier, and
when receipt is acknowledged, if faxed.
13.03 Waivers and Amendments. No amendment or waiver of any provision
----------------------
of this Agreement, nor consent to any departure therefrom, shall be effective
unless the same shall be in writing and signed by an officer of each party
hereto, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
a party hereto to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law.
13.04 Binding Effect. This Agreement shall be binding upon and inure to
--------------
the benefit of the parties hereto and their respective successors and permitted
assigns.
13.05 Schedules. The Schedules attached hereto or referred to herein
---------
are incorporated herein and made a part hereof for all purposes. As used herein,
the expression "this Agreement" means this document and such Schedules.
13.06 Governing Law. THIS AGREEMENT, AND THE RIGHTS AND OBLIGATIONS OF
-------------
THE PARTIES HERETO, SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF IOWA, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW OF SUCH STATE.
13.07 Dispute Resolution. Any and all claims or controversies relating
------------------
to this Agreement shall be finally resolved by arbitration. Either of the
parties to such claim or controversy shall have the right to submit the same to
arbitration by delivery of a written dated notice (the "Arbitration Notice") for
arbitration delivered to the other party to such claim or controversy. Upon
receipt of such Arbitration Notice, the parties shall have ten (10) days to
agree on a single arbitrator. If no such agreement is reached during such ten
(10) day period, each party shall have ten (10) additional days to appoint one
neutral and impartial individual to serve on the arbitration panel. Within ten
(10) days after such two arbitrators are selected, a third arbitrator who shall
preside shall be appointed by the two (2) arbitrators so selected. Any vacancy
which is not filled within ten (10) days by the parties shall be filled with a
neutral and impartial individual by the American Arbitration Association.
Following designation and appointment of the three (3) arbitrators to serve
on the arbitration panel, the parties to such claim or controversy shall
undertake in good faith informal efforts to mediate and negotiate to resolve
such claim or controversy. If a negotiated solution cannot be achieved within
fifteen (15) days after the date such arbitration panel is constituted, then
unless the parties to such claim or controversy agree otherwise to a reasonable
extension of time in order to negotiate to resolve such claim or controversy,
the arbitration proceeding shall commence.
18
The arbitration proceedings shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association ("AAA")
subject to the following modifications:
(a) discovery shall be permitted under the same standards provided for in
the Federal Rules of Civil Procedure;
(b) the members of the arbitration panel shall interpret and apply the
provisions of this Agreement;
(c) the arbitration panel shall determine and award costs between the
parties to the arbitration proceedings;
(d) the proceedings will be held in Dallas, Texas, unless the parties
otherwise agree in writing;
(e) to the extent permissible under applicable law, the decisions and
award of the arbitrators shall be final and conclusive, and may be
enforced in any court having proper jurisdiction; and
(f) it is not intended by the parties that the arbitrators shall be
required to be members of the AAA's Panel of Commercial Arbitrators
or that the arbitration be subject to the auspices of the AAA or
subject to AAA administration.
13.08 Independent Contractor. Each party hereto is, and at all times
----------------------
will remain, an independent contractor and will not represent itself to be the
agent, joint venturer, or partner of the other party hereto or to be related to
such other party. No representations will be made or acts done by either party
which would establish any apparent relationship of agency, joint venture, or
partnership.
13.09 Number and Gender. Whenever herein the singular number is used,
-----------------
the same shall include the plural where appropriate, and words of any gender
shall include each other gender where appropriate.
13.10 Captions. The captions, headings and arrangements used in this
--------
Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.
13.11 Invalid Provisions. If any provision of this Agreement is held to
------------------
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable; this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or its severance from this
Agreement.
19
13.12 Entirety. This Agreement and the documents executed and delivered
--------
pursuant hereto, executed on the date hereof or in connection herewith, contain
the entire agreement among the parties with respect to the matters addressed
herein and supersedes all prior representations, inducements, promises or
agreements, oral or otherwise, which are not embodied herein or therein.
13.13 Counterparts. This Agreement may be executed in multiple
------------
counterparts, each of which shall be deemed an original for all purposes and all
of which shall be deemed collectively to be one agreement.
13.14 Assignment. It is mutually agreed that, except as otherwise
----------
herein provided, this Agreement shall be binding upon and inure to the benefit
of the successors of the parties, but shall not be assigned by either party to
third party without prior written consent of the other party.
13.15 Third Party Beneficiaries. Nothing contained herein, express or
-------------------------
implied, is intended to confer upon any person or entity other than the parties
hereto and their successors in interest and permitted assigns any rights or
remedies under or by reason of this Agreement.
20
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement as of the day and year first above
written.
LICENSOR: TURBOCHEF TECHNOLOGIES, INC.
By:
--------------------------------------------
Printed Name: Richard N. Caron
Title: President and Chief Executive Officer
LICENSEE: MAYTAG CORPORATION
By:
--------------------------------------------
Printed Name: Glenn B. Kelsey
Title: President, G. S. Blodgett Corporation
By:
--------------------------------------------
Printed Name: Jerome L. Davis
Title:
-------------------------------------
21
SCHEDULE A
----------
DEVELOPMENT FEES
1. Single Cavity Counter Top Cooking Unit. Licensee shall pay to Licensor a
development fee in the aggregate amount of Two Million Dollars (U.S.
$2,000,000) with respect to the development of the commercial single cavity
counter top cooking unit proof of concept prototype. Licensee shall pay such
development fee as follows:
Development Period Payment Date Amount
------------------ ------------ ------
Up through October 31, 1999 November 1, 1999 $500,000
Nov. 1 through Nov. 30, 1999 November 1, 1999 $250,000
Dec. 1 through Dec. 31, 1999 December 1, 1999 $250,000
Jan. 1 through Jan. 31, 2000 January 1, 2000 $250,000
Feb. 1 through Feb. 29, 2000 February 1, 2000 $250,000
Mar. 1 through Mar. 31, 2000 March 1, 2000 $250,000
Apr. 1 through Apr. 30, 2000 April 1, 2000 $250,000
--------
$2,000,000
==========
2. Dual Cavity or * Licensee shall pay to Licensor a
development fee in the aggregate amount of Three Million Five Hundred
Thousand Dollars (U.S. $3,500,000) with respect to development of the dual
cavity or * proof of concept prototype. Licensee shall pay
such development fee as follows:
Development Period Payment Date Amount
------------------ ------------ ------
Up through October 31, 1999 November 1, 1999 $500,000
Nov. 1 through Nov. 30, 1999 November 1, 1999 $500,000
Dec. 1 through Dec. 31, 1999 December 1, 1999 $500,000
Jan. 1 through Jan. 31, 2000 January 1, 2000 $500,000
Feb. 1 through Feb. 29, 2000 February 1, 2000 $300,000
Mar. 1 through Mar. 31, 2000 March 1, 2000 $300,000
Apr. 1 through Apr. 30, 2000 April 1, 2000 $300,000
May 1 through May 31, 2000 May 1, 2000 $300,000
June 1 through June 30, 2000 June 1, 2000 $300,000
----------
Total $3,500,000
==========
A-1
* Language has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
SCHEDULE B
----------
ROYALTIES
1. Royalty Rates. In consideration of the licenses granted pursuant to
--------------
this Agreement, Licensee shall pay Licensor the following royalties:
A. Single Cavity Counter Top Cooking Unit. Subject to adjustment as
provided hereinbelow, Licensee shall pay Licensor a minimum royalty
equal to Five Hundred Dollars (U.S. $500) per unit sold by Licensee,
based upon
*
The "all-in" cost for the unit shall be derived from a manufacturer
selected by Licensee with Licensor's prior advice and consent, which
shall not be unreasonably withheld or delayed.
*
B. Dual Cavity or * Subject to
adjustment as provided hereinbelow, Licensee shall pay Licensor a
minimum royalty equal to Eight Hundred Dollars (U.S. $800) per unit
sold by Licensee for installation anywhere other than the United
Kingdom and a minimum royalty equal to One Thousand Dollars (U.S.
$1,000) per unit sold by Licensee for installation in the United
Kingdom, based upon
*
The "all-in"
cost for the unit shall be derived from a manufacturer selected by
Licensee with Licensor's prior advice and consent, which shall not be
unreasonably withheld or delayed.
*
B-1
* Language has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
*
2. Minimum Royalties. As a material and additional consideration and
-----------------
inducement to Licensor to execute this Agreement, Licensee shall pay to Licensor
guaranteed minimum royalty payments in accordance with the following schedule:
Minimum Royalty Payments
----------------------------------------------
1/st/ Qtr. 2/nd/ Qtr. 3/rd/ Qtr. 4/th/ Qtr.
---------- ---------- ---------- ----------
Payment
Date: May 15 August 14 Nov. 14 Feb. 14
---------- ---------- ---------- ----------
Year of Payment/
Guaranteed Minimum Royalty:
2000 -0- $500,000 $500,000
2001 $500,000
2001 $500,000 $937,500 $937,500
2002 $937,500
2002 $937,500
The minimum royalty payments shall be made in quarterly installments with the
first such installment being payable on or before August 14, 2000, and each
subsequent installment being payable on or before forty-five (45) days after the
end of each calendar quarter, with the final minimum royalty payment due May 15,
2002. To the extent that the exclusivity periods contemplated by Section 2.01
and Section 2.03 are extended as contemplated by Section 2.04, then the payment
dates of the minimum royalty payments shall be extended for the same period of
any extension granted pursuant to Section 2.04. Notwithstanding anything
contained in this Schedule B to the contrary, in the event that Licensor
----------
exercises its option to terminate Licensee's exclusive licenses and rights
pursuant to Section 2.05 hereof, then the minimum royalty payable shall be
prorated for the third quarter in 2001 to reflect the actual number of days
which Licensee had exclusive licenses and rights with respect to the single
cavity counter top cooking unit in such calendar quarter.
B-2
* Language has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
Actual royalty fee payments made during a particular quarter pursuant to Section
1 of this Schedule B with respect to either the single cavity counter top
-----------
cooking unit or the dual cavity or * shall be
credited against the guaranteed minimum royalty payment due for that quarter
with respect to such Licensed Products.
In the event that the total actual royalty fee payment made during a particular
quarter pursuant to Section 1 of this Schedule B exceeds the guaranteed minimum
----------
royalty amount for that quarter, such excess shall be credited against the
guaranteed minimum royalty payment due for the following quarter with respect to
such Licensed Products.
B-3
* Language has been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.