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Exhibit 10.6
LICENSE AGREEMENT
LICENSE
AGREEMENT (the "Agreement") made as of this 26th day of
October,
2004 (the "Effective Date")
by and between Dresser, Inc. ("Dresser") and
Dresser-Rand Group Inc.
("Dresser-Rand"). (Dresser and Dresser-Rand each
referred to herein as a
"Party" and collectively as the "Parties.")
WHEREAS, Dresser
is the owner of the "Dresser" name and mark (the
"Dresser
Name");
WHEREAS,
Dresser-Rand has been previously licensed to use the Dresser
Name
solely as part of the
combined name and mark "Dresser-Rand", and formatives
and
derivatives thereof
(collectively, the "Dresser-Rand Name"); and
WHEREAS, the
Parties wish to confirm their agreement that Dresser-Rand
may
continue to use the
Dresser-Rand Name in connection with those types of
products
and services that it offers
as of the Effective Date and on new products and
services that are natural
extensions of those business lines (the "Dresser-Rand
Business Lines"), pursuant to
the terms and subject to the conditions set forth
in this Agreement.
NOW, THEREFORE,
for good and valuable consideration, the receipt and
sufficiency of which is
hereby acknowledged, Dresser and Dresser-Rand hereby
agree as follows:
1. GRANT OF LICENSE. Dresser grants to Dresser-Rand a
world-wide,
limited, nonexclusive (except
as set forth in this Section 1 with respect to the
combined name
"Dresser-Rand"), terminable (solely as set forth in Section
5)
license ("LICENSE") to use as
a part of any trade name, corporate name, domain
name (or similar or successor
system), trademark or service mark, the Dresser
Name solely as part of the
combined name and mark "Dresser-Rand" in connection
with the Dresser-Rand
Business Lines and to use in a like manner the
formatives
and derivatives of
Dresser-Rand also solely in connection with the
Dresser-Rand
Business Lines.
Notwithstanding the foregoing sentence, the License is
exclusive
(even as to Licensor) with
respect to the use of the Dresser Name as a part of
the combined name and mark
"Dresser-Rand" and formatives and derivatives
thereto. Dresser-Rand accepts
the License subject to all of the terms and
conditions herein. All rights
owned or held by Dresser but not expressly granted
to Dresser-Rand hereunder
with respect to the Dresser Name and all other
trademarks owned by Dresser
are reserved to Dresser. Subject to the terms and
conditions herein set forth,
the license granted to Dresser-Rand hereunder will
include the right of
Dresser-Rand to grant sublicenses to use the Dresser
Name
in connection with the
Dresser-Rand Business Lines. For each such sublicensee,
Dresser-Rand must either (i)
Control the sublicensee or (ii) by law, contract or
otherwise, be able to
terminate the sublicensee's right to use the Dresser
Name
should the sublicensee fail
to adhere to the Standards and Quality or the other
applicable terms and
conditions hereof. ("CONTROL" or any grammatical
variations
thereof shall mean either the
ownership, directly or indirectly, of more than
50% of the voting securities
of a corporation or other entity or the power to
direct the management or
policies of such corporation or other entity whether by
operation of law, by
contract, or otherwise.) Any sublicense granted by
Dresser-Rand in violation of
the foregoing sentence, without the express written
consent of Dresser, shall be
void.
2. OWNERSHIP. Dresser-Rand covenants and agrees
that, as between the
Parties, (a) Dresser and not
Dresser-Rand is the sole and exclusive owner of the
Dresser Name; (b)
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Dresser-Rand will do nothing
inconsistent with such ownership of Dresser; (c)
all use of the Dresser Name
by Dresser-Rand, and the goodwill associated
therewith, shall inure solely
to the benefit of and be on behalf of Dresser; (d)
Dresser-Rand shall assist
Dresser in recording this Agreement with appropriate
government authorities if
Dresser requests such assistance; (e) nothing in this
Agreement shall give
Dresser-Rand any right, title or interest in the Dresser
Name other than the right to
use the Dresser Name in accordance with this
Agreement; (f) other than as
set forth in this Section 2, Dresser-Rand will not
file any trademark
application for registration of any of the Dresser Name
or
any marks similar thereto
without the express written permission of
Dresser, (g) Dresser-Rand
shall not acquire and shall not claim any title
to the Dresser Name adverse
to Dresser by virtue of the License or through
Dresser-Rand's use of the
Dresser Name, and (h) Dresser-Rand shall not contest
the title of Dresser to the
Dresser Name or contest the validity of the License.
Subject to the other terms of
this Agreement, Dresser-Rand at its own expense
shall have the right to file
and maintain in its own name trademark or service
mark registrations for the
Dresser-Rand Name. As between the Parties, (a)
Dresser-Rand shall be the
sole and exclusive owner of the combined Dresser-Rand
Name (but not the underlying
Dresser Name) and all goodwill associated with such
combined mark (but not the
Dresser Name); (b) except as specifically allowed
herein, Dresser will do
nothing inconsistent with such ownership of
Dresser-Rand; (c) nothing in
this agreement shall give Dresser the right to use
the Dresser-Rand Name; (d) as
a part of its obligations under and subject to
Section 11, Dresser shall
assist Dresser-Rand in registering the Dresser-Rand
Name; and (e) Dresser will
not file any trademark application or registration of
any of the Dresser-Rand
Name.
3. QUALITY
STANDARDS. Dresser-Rand shall conduct its business under
the
Dresser-Rand Name at a level
of quality that is not materially lower than that
maintained as of the
Effective Date ("STANDARDS AND QUALITY"). Dresser-Rand
shall not take any action
which causes, or is reasonably likely to cause,
material destruction,
decrease, or diminution of the "Dresser" name or the
reputation or goodwill
thereof. Dresser-Rand agrees to cooperate with Dresser
in
facilitating Dresser's
monitoring of such nature and quality, to permit
commercially reasonable
inspections of Dresser-Rand's operation, and to supply
Dresser with specimens of the
uses of the Dresser Name upon Dresser's reasonable
request.
4. ROYALTY.
During the first ten years from the Effective Date,
Dresser-Rand shall pay to
Dresser a total of $5,000,000 as follows: Dresser-Rand
shall pay to Dresser
$1,000,000 upon the execution of the Agreement and
$444,445
within thirty (30) days of
each of the nine (9) successive anniversaries of this
Agreement. Notwithstanding
the foregoing, Dresser-Rand shall not have any
obligation to make any such
payment for any such year following Dresser's or
Dresser-Rand's termination of
this Agreement pursuant to Section 5. Dresser-Rand
shall have no obligation to
make any royalty payments to Dresser under or in
connection with this
Agreement other than as set forth in this Section 4. The
royalty payments set forth in
this Section 4 may be prepaid by Dresser-Rand at
any time, and Dresser-Rand
shall have no obligation to make future royalty
payments under this Section 4
to the extent such prepayment covers amounts
otherwise due
hereunder.
5. TERM. This
Agreement shall remain in effect for the first ten (10)
years
from the Effective Date, and
if Dresser-Rand pays to Dresser a total of
$5,000,000 in royalties as
set forth in Section 4, then this Agreement shall
remain in effect in
perpetuity (subject to termination as set forth below in
this Section 5), provided,
however, that in any jurisdiction which prohibits
such perpetual licenses the
Agreement shall remain in effect for no less than 50
years (and provided further
that as between the Parties, neither Party shall
challenge the validity of
such perpetual grants in any jurisdiction).
Notwithstanding the
foregoing, (i) Dresser-Rand may terminate this Agreement
at
any time in its discretion by
providing written notice to Dresser, and (ii)
Dresser
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may terminate this Agreement
in the event that Dresser-Rand materially breaches
Sections 2, 3 or 4 of this
Agreement and fails to remedy such default within
sixty (60) days after
receiving written notice of such default from Dresser
(other than a royalty default
under Section 4, which must be cured by
Dresser-Rand within seven (7)
days of receipt of such written notice and may be
cured only upon payment by
Dresser-Rand to Dresser of the amount due plus a
$25,000 late fee), subject to
Dresser-Rand's right to phase out use of the
Dresser Name portion of the
Dresser-Rand Name as soon as reasonably practicable
following such termination
but in any event within six (6) months following
such termination. In the
event of any expiration or termination of this
Agreement: (a) the provisions
of Section 10 shall survive such termination and
(b) Dresser-Rand shall (i)
within the previously specified period (i.e., within
six (6) months) discontinue
all use of the Dresser Name and any mark, term, or
name confusingly similar
thereto and delete the same from its corporate or
business name, and (ii) at
Dresser's request, cooperate with Dresser to apply
to the appropriate
authorities to cancel recording of this Agreement from
all
government records.
Dresser-Rand further agrees that in the event of any
expiration or termination of
this Agreement, all right in the Dresser Name and
the goodwill connected
therewith shall remain the property of Dresser.
6. ENFORCEMENT. Dresser-Rand
shall promptly notify Dresser in writing
should it become aware of
activity by a third party that reasonably would be
construed to constitute an
infringement of the Dresser Name. Dresser shall
promptly notify Dresser-Rand
in writing should it become aware of activity by a
third party that reasonably
would be construed to constitute an infringement of
the Dresser-Rand Name.
Dresser shall have the sole initial right to take, and
to determine whether or not
to take, at Dresser's expense, any action(s) it
deems appropriate with
respect to any such infringement, and Dresser-Rand
shall,
at Dresser's expense,
reasonably cooperate with Dresser in connection with any
such action. If Dresser
declines or otherwise fails to take action sufficient
to prevent or terminate a
particular infringement of the Dresser-Rand Name,
then Dresser-Rand may
undertake, at Dresser Rand's expense, such action, and
Dresser shall, at
Dresser-Rand's expense, reasonably cooperate with
Dresser-Rand in connection
with any such action. All recovery in the form of
monetary damages or
settlement shall belong to the Party principally bearing
the expense of bringing such
claim or suit to the extent of the expense
incurred by such Party and
then shall be apportioned equitably to the Parties
according to whether the
damages were suffered by the Dresser Name or the
Dresser-Rand Name,
respectively.
7. BUSINESS LINES. Dresser-Rand
may use the Dresser-Rand Name on its
current products and services
and on new products and services that are logical
extensions of those business
lines (its "Existing Business"). Likewise, Dresser
may use the Dresser Name on
its current products and services and on new
products and services that
are logical extensions of those business lines (its
"Existing Business").
Dresser-Rand shall not expand beyond its Existing
Business
under the Dresser-Rand Name
into products or services which are directly and
materially competitive with
the Dresser as of the Effective Date or such
products and services that
are natural extensions thereof (the "Dresser Business
Lines"), and Dresser shall
not expand beyond its Existing Business under the
Dresser Name into products or
services which are directly and materially
competitive with the
Dresser-Rand Business Lines. Either Dresser or
Dresser-Rand
may expand its respective
business lines under the Dresser Name or Dresser-Rand
Name, respectively, by
entering into or acquiring a business that involves
products and services that
are not in either the Dresser-Rand Business Lines or
the Dresser Business Lines (a
"New Business"). If Dresser or Dresser-Rand first
enter into a New Business in
a bona fide manner (e.g., substantially,
materially, in good faith,
etc.), such New Business shall automatically be
deemed incorporated into the
Dresser Business Lines (if Dresser enters such New
Business prior to
Dresser-Rand) or the Dresser-Rand Business Lines (if
Dresser-Rand enters such New
Business prior to Dresser) for all purposes under
this Agreement for so long as
such
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Party engages in such New
Business in a bona fide manner. This Section is
intended to affect only the
names and marks that the Parties use in conducting
their respective businesses,
but not to otherwise affect the scope of each
Party's permissible
activities.
8. DR NAME. The
Parties acknowledge that nothing in this Agreement shall
restrict or control the right
of Dresser-Rand to use and register the name and
mark "DR" or any derivation
thereof in any manner, and that, as between the
Parties, Dresser-Rand is the
sole and exclusive owner of such name and mark.
9. DISCLAIMERS.
Dresser represents and warrants that: (i) the Dresser
Name
is the subject of a number of
United States and foreign trademark registrations
for a variety of goods and
services; (ii) it has not gr
