[Member] License Agreement (Technology)

 

This Agreement made and entered into this … by and between ……..,, a corporation incorporated and existing under the laws of the Republic of ……, having its principal place of business at (hereinafter referred to as “Licensor”) and ……., a company incorporated in Malaysia and having its registered office at ………. (hereinafter referred to as “Licensee”).

 

WITNESSETH

 

WHEREAS, Licensor owns Technical Information (defined below) and all manufacturing and know-how necessary for the manufacture and sale of the Product (as defined below);

 

WHEREAS, ……, an affiliate of Licensor owns the Patent (as defined below) covering the technologies pertaining to the manufacture of the Product;

 

WHEREAS, Licensor undertakes to complete the registration of the Applied Patent Assignment from ….. to Licensor with the Malaysian Patent Authority within four (4) months of effective date of this Agreement; and

 

WHEREAS, Licensee desires to acquire the right to use the Patent and Technical Information and to receive technical assistance from Licensor for the manufacture of the Product in the Territory (as defined below) for sale and Licensor is willing to grant such right to Licensee.

 

NOW, THEREFORE, to effect the above purpose and in consideration of the mutual covenants and premises set forth herein, Licensor and Licensee hereby agree as follows:

 

I.Definitions

 

The terms defined in this Section shall, for all purposes of this Agreement, except where the context clearly requires otherwise or except as otherwise indicated, have the meaning herein below specified:

 

1.1 “Products” shall mean the etched lead frame using the patented process.

 

1.2 “Technical Information” shall mean all the proprietary

And confidential information, technical data and processes, prototype designs, equipment designs, operation specification, raw material specifications, equipment lists and any other information which Licensor provides to Licensee relating to the manufacture of the Products.

 

1.3 “Territory” shall mean Malaysia.

 

1.4 “Patent” shall mean the pending patent application filed by Licensor in the Territory pertaining to the manufacture of the Products.

 

1.5″ Effective Date” shall mean the Joint Venture Agreement dated …… becomes unconditional.

 

1.6 “Net Selling Price” shall mean the gross selling price of the Products invoiced by the Licensee less taxes, dues, transportation, packing costs, insurance premiums, refunds, customs and excise duties, discounts and customer returns.

 

II. Licence Grant

 

2.1 Licensor hereby grants to Licensee, during the term of this Agreement, an exclusive right and licence to manufacture the Products using the Technical Information in the Territory. However, Licensee does not have the right to sub-licence Technical Information, in full or partially, to any third party.

 

2.2 All the Products manufactured and sold by Licensee shall indicate the licensing to the extent required by law.

 

2.3 Licensor agrees to assist the Licensee to sell its Products and shall further undertake to sell or to arrange the international purchase of all the excess Products manufactured by Licensee for a period of three (3) years upon full commercial production for a five percent commission of invoice value (less witholding tax if any).

 

2.4 Licensor warrants that the Technical Information is sufficient to produce Products which are free from defects in material or workmanship, merchantable, which are fit for their intended purposes, and which otherwise conform in quality and quantity to the performance specifications, production capacity and other technical characteristics described by Licensor, including those stated in or used to produce the Business Plan.

 

III. Term

 

3.1 Subject to the provisions for termination and variation herein, the term of this Agreement shall commence on the Effective Date and shall continue in effect for fifteen years, unless terminated earlier by either Licensor or Licensee in accordance with the provisions of this Agreement.

 

3.2 Licensee shall have the option to convert the licence granted hereunder into a paid-up, perpetual, exclusive licensce in the Territory by paying reasonable price to be agreed on by mutual agreement between Licensor and Licensee.

 

IV. Royalties: Accounting

 

4.1 Until the termination hereof or the conversion of the licence hereunder into a paid-up and perpetual licence pursuant to Article 3.2 hereof, in consideration of the grant of the licence and the rights set forth herein, starting from …., Licensee shall pay Licensor three point three three percent (3.33%) of the Net Selling Price of the Products. Within sixty (60) days of the close of each calendar quarter, Licensee shall send the appropriate royalty, along with a statement of sales of the Products, for the quarter by telegraphic transfer to a bank account to be designated by Licensor Provided always and it is hereby agreed that no royalty shall be payable in respect of sales to Licensor, its related companies and affiliates own use.

 

4.2 Licensee shall keep such accurate records and books of account as are necessary for ready determination of royalty obligations due by Licensee sales of the Products and to maintain the same for a minimum of three (3) years from preparation thereof. Such records and books of account shall be open for inspection upon request during regular business hours by an authorized representatives of Licensor. If, after the accounting, royalties due to Licensor vary more than five percent ( 5%) from those paid to Licensor, then Licensee shall pay for the accounting costs and will pay the deficient sum plus a delay interest from the date such royalties would have been due at an annual rate of twenty percent (20%). If royalties due to Licensor vary five percent (5%) or less, Licensee will pay the deficient sum plus interest from the date such royalties would have been due at an annual rate of ten percent (10%)

 

V.  Taxes

 

All taxes and any similar charges (e.g. withholding tax) which may be imposed by the Malaysia Government with respect to payments to be made under this Agreement shall be borne by Licensor and Licensee shall retain the appropriate amounts for payment to the authorities.

 

VI. Patents and Technical Information

 

6.1 Subject to the provisions herein contained, all rights in the Patents and Technical Information are reserved by the Licensor for its own use and benefit. Licensee acknowledges that Licensee shall not acquire any right, title, or interest in or to the Patents or Technical Information as a result of the Licensee’s use thereof. Licensee acknowledges that Licensor is the owner of the Patents and Technical Information and agrees that it will not challenge the validity of the Patents or Technical Information or the Licensor’s ownership thereto.

 

6.2 Licensor undertakes to furnish such Technical Information and assistance/work as is required hereunder to the Licensee with the same care used by the Licensor in dealing with its own establishments and shall comprise the very latest break through technology and shall not include any obsolete or passed information.

 

6.3 Until full commercial production commences, Licensor agrees to correct without charge any errors in the Technical Information and undertake again or to remedy without charge any engineering assistance/work, improperly performed. Licensor shall, in addition, provide such reasonable assistance without charge as the Licensee may request in relation to circumstances arising from any such errors in improper performance until full commercial production commences.

 

6.4 If any Technical Information provided by the Licensor pursuant to this Agreement shall infringe any letters patent or other right of any third party, the Licensor shall keep the Licensee indemnified against all liabilities, claims, costs and expenses which may result from such infringement provided that in the event that Licensee receives notice or is informed of any claim, suit or demand against Licensee on account of any alleged infringement, relating to the use of the Licensor’s Patents or Technical Information, Licensee shall promptly notify Licensor of any such claim, suit or demand. Thereupon, Licensor is required to shall take such action as may be necessary to protect and defend Licensee against any such claim by any third party at Licensor’s expense, and, to indemnify the Licensee for any damage or loss caused by such claim, suit or demand.

 

VII.     Confidentiality and Non-Disclosure

 

7.1 Licensee shall hold the Technical Information in confidence (“Confidential Information”).

 

7.2 The Confidential Information shall be used by Licensee for the sole purpose of manufacturing and marketing the Products. Licensee shall refrain from using or allowing the use of the Confidential Information for any other private or commercial purpose.

 

7.3 The Confidential Information received by Licensee shall not be disclosed or divulged to any third party or parties, other than the employees of Licensee who clearly need to know the Technical Information to perform their job responsibilities, without prior written approval of Licensor. Such approval shall not be unreasonably witheld. Each of those employees who need access to the Technical Information shall enter into a confidentiality agreement with Licensee in such form and substance as approved by Licensor in advance.

 

7.4 Licensee’s obligations under this Article 7 shall survive the termination or expiration of this Agreement.

 

VIII.Termination

 

8.1 This Agreement may be terminated by Licensor upon:-

 

(a) The failure of Licensee to cure a material or persistent breach of this Agreement within thirty (30) days of receipt of written notice to Licensee of such breach;

 

(b) The insolvency or a winding-up order made against Licensee or an assignment for the benefit of creditors by Licensee; or

 

(c) The failure of Licensee to pay royalties due or to make adjustment to the royalty as described in Article IV (4.2) within thirty (30) days from the due date.

 

8.2 This Agreement may be terminated by Licensee upon:-

 

(a) The failure of Licensor to cure a material or persistent breach of this Agreement within thirty (30) days of receipt of written notice to Licensor of such breach; or

 

(b) The insolvency or winding-up order made against the Licensor or an assignment for the benefit of creditors by Licensor.

 

8.3 Upon termination or expiration of this Agreement for any reason, Licensee shall not have any right to the Technical Information and the Patents, and shall immediately cease the manufacture and/or sale of the Products and deliver to Licensor all documents and drawings containing the Technical Information for Licensor’s free disposal provided that:-

 

(a) Licensee may complete all orders accepted or contracts entered into in respect of sale of the Products prior to date of termination;

 

(b) All rights that have accrued to either party prior termination in respect of any breach of the terms hereof shall continue.

 

IX.Technical Assistance

 

 

9.1 Licensor shall also provide the following technical assistance/work upon the conditions as stipulated hereunder:

 

(a)Licensor shall dispatch engineers to Licensee’s facilities in the Territory in the number and for the period reasonably requested by the Licensee to supply Licensee with available basic know-how and technical information for the purpose of instruction in the manufacture, installation, repair and servicing and successful operation of the business of manufacturing the Products, in accordance with the terms of this Agreement.

 

(b) Upon reasonable written request of Licensee, Licensor agrees to provide training to a reasonable number of Licensee’s engineers at Licensor’s facilities for a period requested by Licensee during the term of this agreement.

 

9.2 Licensee shall bear round-trip airfares and expenses of

 lodgings and meals incurred by its personnel dispatched under Article 9.1 (b) hereof during their

stay in Korea.

 

9.3 When so requested by Licensee, Licensor shall assist to undertake additional engineering work in relation to the Products. Such additional engineering work shall include but shall not be limited to:-

 

(a) preparing and supplying to Licensee such design engineering or other data or information which is not available in the records of the Licensor or which is not available in the requested form;

 

(b) undertaking special studies project work or development work such as may be required to ensure compliance of the Products with local law and regulations.

 

X.Supply Of the Equipment and Raw Materials

 

Licensor shall provide raw materials and equipment which are required for the manufacture of the Products at reasonable market price. Licensee reserves the right however to place orders for equipment and raw materials elsewhere if Licensor is unable to meet delivery schedule or if Licensor’s price quoted is not competitive.

 

XI. Arbitration

 

All disputes, controversies or differences which may arise between the parties out of or in relation to this Agreement shall be finally settled by arbitration in Singapore in accordance with the rules and regulations of the Singapore International Arbitration Centre. The award of the arbitrators shall be final and binding on the parties.

 

XII. Applicable Law

 

This Agreement shall be governed by and construed in accordance with the laws of the Malaysia.

 

 

XIII.Improvements

 

13.1 The licence granted hereby shall extend to all Product improvements or developments made by Licensor while Licensee pays running royalties under Article 4.1 hereof, and all know-how and patent rights related thereto pursuant to the same terms and conditions as those provided herein, without the parties hereto having to enter into a specific agreement with respect thereto and without any additional fees thereon.

 

13.2 Licensee shall grant, free of charge, a perpetual, non-exclusive licence to Licensor with regard to any Product improvements or developments made by Licensee during the term of this Agreement and all know-how and patent rights related thereto.

 

13.3 With regard to any Product improvements or developments made by either Licensor or Licensee after the conversion of the licence hereunder to a paid-up and perpetual license pursuant to Article 3.2 hereof, the party making the improvements or developments shall make them available to the other party, provided that the terms and conditions of such availability, including royalty, shall be determined by mutual agreement in each such instance.

 

XIV. Force Majeure

 

14.1 Neither party shall be liable to the other party for the failure or delay in performance of any of its obligations under this Agreement due to acts of God, fire, flood, strikes, labor disputes or other industrial disturbances, acts of Government, laws and regulations, riots, insurrections or any other cause beyond the control of the affected party. Upon the occurrence of such an event, the affected party shall immediately notify the other party of such an event with as much detail as possible. The affected party shall, immediately after the cause is removed, perform its obligations with all due diligence.

 

14.2 Notwithstanding the foregoing, no event of Force Majeure shall affect Licensee’s obligation for the payment of money it owes Licensor. In the event that the prevention of performance of any party’s obligations under this Agreement due to an event of force majeure shall continue beyond a period of six (6) months, the party unaffected by such event shall have the right to terminate this Agreement upon thirty (30) days prior notice to the other party.

 

XV. Assigmment

 

Neither party shall assign any of its rights or obligations, under this Agreement, in whole or in part, to any third party without the prior written approval of the other.

 

XVI. Notices

 

16.1 All notices or communications given or required to be given hereunder shall be given by personal delivery, by register airmail or by facsimile (being followed by a confirmation letter dispatched within twenty-four (24) hours) to the following addresses:

 

 To Licensor:

 

 To Licensee:

 

16.2 Notices and communications shall be deemed received by the addressee on the date of delivery if delivered personally, on the tenth (10th) day from the date of posting if sent by registered airmail, or upon transmission if sent by facsimile.

 

16.3 The parties may change their address at any time by giving a written notice thereof in the manner provided in this Article.

 

XVII.Miscellaneous Provisions

 

17.1 The headings of the Articles have been inserted for convenience of reference only and shall not affect the interpretation or construction of the provisions of this Agreement.

 

17.2 This Agreement shall not be modified except by a written instrument executed by duly authorized representatives of the parties hereto.

 

17.3 In the event any term or provision of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement, and this Agreement shall be interpreted and construed as if such

 term or provision, to the extent which it is invalid, illegal or unenforceable, had never been contained in this Agreement.

 

17.4 Waiver of any right by a party hereto towards the other for breach or a series of breaches hereof shall not affect the right of the waiving party to exercise any of its rights provided hereunder on account of any other breach hereof or similar breach subsequent thereto.

 

 

 

THE REMAINING SPACE HAS BEEN LEFT BLANK INTENTIONALLY