INTERCOMPANY AGREEMENT TEMPLATE:

INTELLECTUAL PROPERTY LICENCE

Template dated:18November2013

Purpose and scope

This template has made available by LCN Legal Limited to help corporate groups and their advisers to put in place intercompany agreements to support their transfer pricing compliance. It is not suitable for documenting commercial relationships between unconnected undertakings.

This template is written in general terms and its application to specific situations will depend on the particular circumstances involved. While it aims to set out terms which may commonly be used for intra group transactions, itdoes not purport to address every issue which parties could or should raise. What is appropriate in any particular case will depend on a variety of factors, including the functional analysis, the ownership of assets, the intended allocation of risk, the ability of the contracting parties to bear those risks, and any other contractual terms which form part of the chain of supply both internally and externally.

Structure

This template is structured as a contract schedule with standard terms. The standard terms are intended to be amended as necessary and adopted by the relevant group as governing the particular type of relationship generally. Separate contract schedules may then be entered into on a bilateral basis between counterparties within the relevant group.

Licence, terms of use and disclaimer

Subject to the terms set out below, LCN Legal Limited grants users (including corporate bodies and their advisers) a worldwide, royalty-free, non-exclusive, perpetual (for the duration of the applicable copyright) licence to use and adapt this template solely for the purpose set out above.

By using the template, you confirm that you have read, understood and agree to these terms and, where you're acting on behalf of a body corporate or partnership, that they agree to these terms and conditions. If you do not agree to these terms, you must stop using the templates immediately. The licence and terms of use are governed by English law. In the event of any matter or dispute arising out of or in connection with the licence and terms of use, you and we shall submit to the non-exclusive jurisdiction of the English courts.

This template is provided on an “as is” basis. Users should take their own professional advice, and this template should not be relied upon as a substitute for advice. No responsibility is accepted by LCN Legal Limitedor any other contributors, or any of their respective directors, partners, employees, agents or representatives for any cost, loss or liability, however caused, incurred by any person by reliance on it.

This template is protected by copyright and/or other applicable law. Any use or distribution of the template other than as authorized under this licence or copyright law is prohibited.

Improvements welcome

Templates can always be improved. Please send any comments or suggestions to LCN legal at .

LCN Legal is the trading name for LCN Legal Limited, a limited liability company registered in England and Wales with number 8496679.The practice address and registered office address is asshownabove.

LCN Legal Limited is authorised and regulated by the Solicitors Regulation Authority.

1

© LCN Legal Limited 2013

INTERCOMPANY INTELLECTUAL PROPERTY LICENCE

PARTIES:

Licensor:Full company name:

Country of incorporation:

Company registration number:

Address:

Licensee: Full company name:

Country of incorporation:

Company registration number:

Address:

AGREEMENT:

This Agreement sets out the terms on which the Licensor has granted the Licensee a[non-exclusive] licence to use the Licensed Intellectual Property:

  • in the Territory
  • for the Permitted Purpose
  • with effect from the Start Date.

[The licence hereby granted includes the right of the Licensee and its sublicensees to use, distribute, furnish or resell the Licensed Intellectual Property or any portion or derivative thereof.]

  1. START DATE: [Insert date]
  1. [END DATE: [Insert date if applicable]]
  1. TERMINATION NOTICE PERIOD:Not less than [3 months] [to take effect as at the end of a Financial Year].
  1. FINANCIAL YEAR:From the Start Date until [ ] and each successive period of 12 months.
  1. THE LICENCED INTELLECTUAL PROPERTY:[Describe IP as applicable e.g. all Intellectual Property subsisting in [describe product]]
  1. PERMITTED PURPOSE:[Describe purpose for which the Licensee can use the IP e.g. As part of the Licensee’s range of services / products provided to [type of customer]].
  1. TERRITORY: [Worldwide].
  1. IMPROVEMENTS: All improvements, modifications or adaptations made by or on behalf of the Licensee to the Licensed Intellectual Property during the term of this Agreement shall belong to the [Licensor].
  1. MAINTENANCE:The [Licensor] shall be responsible for applying for and/or maintaining any relevant registrations in respect of the Intellectual Property and any Improvements as the [Licensor] sees fit.
  1. FEES:The Fees for the licence granted by this Agreement will be calculated as follows:

[Insert details]

  1. PAYMENT:The Fees will be invoiced [quarterly] in arrears and paid within [60 days of the last day of the period to which the Fees relate]. The Fees may be settled through the setting off of intra-group accounts if the parties so agree.

[Insert any relevant provisions concerning periodic invoicing based on estimated amounts, with annual reconciliation following the end of each Financial Year].

Unless otherwise agreed, all payments under this Agreement shall be made in [currency]

  1. INTEREST ON LATE PAYMENTS:Interest at the rate of [2]% per annum above the base rate from time to time of the Bank of England will accrue on any overdue amounts, and will be compounded [annually].
  1. LIABILITY LIMITATION LEVEL:The liability of the Licensor to the Licensee under or in connection with this Agreement will be limited to the amount of £[ ].
  1. SPECIAL TERMS:[None]
  1. INCORPORATION OF STANDARD TERMS: This Agreement shall be deemed to incorporate the “Standard Terms for the Provision of Intercompany Services” attached, insofar as those Standard Terms are applicable. In those Standard Terms, references to the “Supplier” shall be deemed to replaced by references to the “Licensor”, and references to the “Customer” shall be deemed to be replaed by references to the “Licensee”.
  1. ENTIRE AGREEMENT: This Agreement, together with the Standard Terms referred to above, constitutes the whole agreement in respect of the services referred to above.

SIGNATURES:

(1) Signed for and on behalf of the LICENSOR

Signature:

Full name of Signatory:

Position / job title:

Date of actual signature:

(2) Signed for and on behalf of the LICENSEE

Signature:

Full name of Signatory:

Position / job title:

Date of actual signature:

STANDARD TERMS AND CONDITIONS FOR THE PROVISION OF INTERCOMPANY SERVICES

  1. INTERPRETATION

1.1.In these Standard Terms unless the context requires otherwise:

"Agreement" means the agreement between the Supplier and the Customer comprising the Contract Schedule and these Standard Terms;

"Contract Schedule" means a schedule signed by the Supplier and the Customer which incorporates these Standard Terms;

"Cost" means the cost incurred by the Supplier in providing the Services,

  • including without limitation: salaries relating to the personnel (apportioned to the amount of work dedicated wholly or mainly to the provision of the relevant Services), travelling expenses of such personnel, professional fees, depreciation charges and rent (in the event that a specific area or office is dedicated wholly or mainly to the provision of the relevant Services); and
  • excluding Shareholder Costs, interest, penalties, income taxes, goodwill and other non-operating expenses;

"Intellectual Property" includes any know-how, patents, database rights, design rights, trade marks or copyright, and any other intellectual property rights existing anywhere in the world;

"Shareholder Costs" means all costs relating to the provision of services for the benefit of the Customer's parent undertaking(s), such as group audit, shareholder relations and consolidations, and any other services from which the Customer does not derive a benefit; and

"VAT" means value added tax.

1.2.Words and expressions defined in the relevant Contract Schedule have the same meanings in these Standard Terms.

1.3.If there is any conflict between the Contract Schedule and these Standard Terms, the terms of the Contract Schedule shall prevail.

  1. THE SERVICES
  2. The Supplier shall supply the Services to the Customer from the Start Date until the Agreement expires on the End Date (if applicable) or is terminated in accordance with clause 6.
  3. The Supplier shall perform the Services with reasonable skill and care.
  4. The Supplier shall maintain records of all work carried out in connection with the Services and shall supply these to the Customer upon reasonable request.
  1. INTELLECTUAL PROPERTY
  2. Where the Customer is shown in the Contract Schedule as the "IP Owner":
  3. the Supplier hereby assigns to the Customer the whole of the Supplier's rights past, present and future in all Intellectual Property created in the course of performing the Services;
  4. the Suppliershall use all reasonable endeavours to procure that all moral rights in that Intellectual Property are waived; and
  5. the Supplier shall, at the Customer's expense, execute such documents, and do such acts and things as the Customer may require to vest that Intellectual Property in the Customer.
  6. Where the Supplier is shown in the Contract Schedule as the "IP Owner":
  7. the Supplier will retain all rights in the Intellectual Property created in the course of performing the Services; and
  8. the Supplier grants to the Customer a non-exclusive non-transferable licence to use that Intellectual Property solely for its own internal business purposes.
  1. FEES AND PAYMENT
  2. The Customer shall pay the Fees to the Supplier, in accordance with the provisions of the relevant Contract Schedule and this clause 4.
  3. Where an Allocation Key is specified in the Contract Schedule, then the relevant Cost shall be allocated as between the Customer and the other Customers of the Services or similar services pro rata to the average of the relevant measure during the relevant Financial Year.
  4. The Fees are exclusive of VAT which (if applicable) shall be paid by the Customer to the Supplier in addition to the Fees.
  1. LIABILITY

Where permitted by law, the Supplier's liability under or in connection with the Agreement shall be limited to the Liability Limitation Level.

  1. TERMINATION
  2. Either party may terminate the Agreement by giving written notice to the other party being not less than the Termination Notice Period set out in the Contract Schedule.
  3. Either party may terminate the Agreement with immediate effect by notice in writing to the other party (the "Defaulting Party") in the following circumstances:
  4. if the Defaulting Party materially breaches the Agreement and has not remedied the breach within 60 days after written notice is given to the Defaulting Party specifying the breach; or
  5. if any order is made or resolution passed for the winding up of the Defaulting Party, an administrator or receiver is appointed, a winding-up order is made or if the Defaulting Party takes or suffers any similar or analogous action in consequence of debt.
  1. CONSEQUENCES OF TERMINATION

Neither party shall be required to pay any compensation to the other party in connection with the expiry or termination of the Agreement for whatever reason. This does not affect the parties' accrued rights and obligations as at the date of expiry or termination.

  1. DATA PROTECTION

The parties shall at all times in the performance of the Agreement comply with all applicable laws concerning the protection of personal data.

  1. ENTIRE AGREEMENT
  2. These Standard Terms and the Contract Schedule constitute the entire agreement of the parties and supersede all prior agreements and understandings between the parties in connection with its subject matter.
  3. Any representation, warranty or undertaking implied by law or by custom is expressly excluded.
  4. Nothing in the Agreement operates to exclude any liability for fraud.
  1. APPLICABLE LAW AND JURISDICTION

The Agreement shall be governed by the laws of England and Wales and shall be subject to the non-exclusive jurisdiction of the English courts.

1

© LCN Legal Limited 2013