Exhibit 10.9
Certain portions of
this Exhibit have
been omitted and
filed separately
pursuant to a request
for confidential
treatment. The Symbol
"****" has been
inserted in place of
the portions so
omitted.
Between MAUSER-WERKE GMBH
SCHILDGESSTR. 71-163
50321 BRUHL
FEDERAL REPUBLIC OF GERMANY
hereinafter referred to as "MAUSER"
and XXXXXXX-XXXXXXX CORPORATION
000 XXXX XXXX XXXX
XXX XXXX, XXX XXXXXX 00000
XXXXXX XXXXXX OF AMERICA
hereinafter referred to as "XXXXXXX-XXXXXXX"
KNOW HOW AND PATENT
LICENSING AGREEMENT
PREAMBLE
MAUSER possesses several years of experience and knowledge in the manufacture
and marketing of blown plastic containers made of thermoplastic synthetic
materials. MAUSER has developed its own machines, appliances and molds for the
production of such containers.
The experience for the manufacture of blown plastic containers, as developed by
MAUSER, relates in particular to:
- the processing of plastics
- the industrial design of blown containers
- the design of production plants and equipment
- selling and marketing, e.g. the special points relating to this market
of plastic packagings, the relevant selection of suitable plastic
containers for particular products, information on previously used and
new fields of application and also publicity to this market as
developed by MAUSER
- the design of plastic containers which comply with the requirements
called for under international transport and packing regulations
(especially concerning dangerous products)
- testing procedures for the operation of plastic containers
- quality control
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- possibilities of exchange of experience on the occasion of MAUSER Know
How Conferences
XXXXXXX-XXXXXXX intends to manufacture and market in the United States of
America plastic container of the types according to the MAUSER PATENT RIGHTS and
the MAUSER KNOW HOW, all as defined in Article I hereof.
Therefore, the contracting parties agree as follows:
ARTICLE 1
LICENSED ARTICLE AND KNOW HOW
LICENSED ARTICLE refers to lid type or open top plastic drums made with or
otherwise involving any of the KNOW HOW made available by MAUSER under this
Agreement and made in accordance with the United States Letters Patent No.
4,177,934.
This Patent is the contractual PATENT RIGHT.
ARTICLE 2
USE OF TRADEMARKS
XXXXXXX-XXXXXXX has the right to use the MAUSER trademark: No. 634.252 for the
LICENSED ARTICLES.
"MAUSER" may be used on the LICENSED ARTICLES by XXXXXXX-XXXXXXX only in
connection with XXXXXXX-XXXXXXX'x own name and not as a company name.
The permission to use the trademark extends for the lifetime of the Agreement.
However, it can be cancelled at half year's notice to the end of every calendar
year.
In order to protect the reputation of MAUSER and MAUSER's rights in and to the
Trademarks, XXXXXXX-XXXXXXX agrees that all LICENSED ARTICLES sold by it and
marked with any of MAUSER's Trademarks shall meet the highest quality standards
set by MAUSER. XXXXXXX-XXXXXXX also agrees that MAUSER shall have the right at
any time on not less than two days prior written notice during ordinary business
hours to inspect the premises and facilities of XXXXXXX-XXXXXXX, to inspect the
operations being conducted therein and to inspect and take samples of the
LICENSED ARTICLES manufactured, assembled and/or sold by it and marked with any
of MAUSER's Trademarks, in reasonable quantities, to enable MAUSER to verify
that its quality standards are being met at all times.
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ARTICLE 3
CONTRACTUAL TERRITORY
TERRITORY means the United States of America and its territories and
possessions.
ARTICLE 4
LICENSE GRANT AND TRANSMISSION OF KNOW HOW
1. MAUSER hereby grants to XXXXXXX-XXXXXXX a non-exclusive license to
manufacture LICENSED ARTICLES in XXXXXXX-XXXXXXX'x plants in the
TERRITORY and to sell empty LICENSED ARTICLES during the life of this
Agreement in the TERRITORY in accordance with the PATENT RIGHT and the
KNOW HOW.
2. Except for the delivery of documents and for assistance provided in the
Agreement, MAUSER will not assume any liability for the risk of
technical production, operation and commercial use of the LICENSED
ARTICLE described in Article 1.
MAUSER declares that the KNOW HOW and the PATENT RIGHT to the best
knowledge of MAUSER do not infringe upon the rights of third parties
with respect to the manufacture of the LICENSED ARTICLE.
3. The transmission of KNOW HOW in the TERRITORY shall be limited to the
present business premises of XXXXXXX-XXXXXXX or any relocation thereof:
Rancho Cucamonga, California; Houston, Texas; Romeoville, Illinois;
Reserve, Louisiana; Nitro, West Virginia; Camden, New Jersey. In case
of establishment of a new location, XXXXXXX-XXXXXXX shall pay a lump
sum charge, the amount of which is to be negotiated in good faith to
compensate MAUSER for its technical assistance in connection with the
start up of said new location.
4. XXXXXXX-XXXXXXX is not authorized to grant sublicenses under the PATENT
RIGHT or to pass the MAUSER KNOW HOW to third parties.
ARTICLE 5
TECHNICAL ASSISTANCE
1. MAUSER will provide XXXXXXX-XXXXXXX during the life of this Agreement
with all information, experience and methods, present and future,
including special techniques and production secrets that are required
to enable technicians
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of average qualifications to produce the LICENSED ARTICLES after a
reasonable start-up time.
2. MAUSER will xxxxxxx XXXXXXX-XXXXXXX with all presently existing
documents, plans and drawings required for the production, use and
distribution of the LICENSED ARTICLES. All documents, plans and
drawings made available in accordance with this Agreement must not be
used by XXXXXXX-XXXXXXX for purposes other than the execution of this
Agreement.
ARTICLE 6
TRAINING OF SPECIALIST STAFF
1. MAUSER undertakes to acquaint specialists of XXXXXXX-XXXXXXX on
MAUSER's production premises with the manufacture and use of the
LICENSED ARTICLES. In supplementation of any plans and drawings that
may have been made available, suitable specialists of MAUSER will give
further verbal information, explanations and normal additional
instructions for a better understanding of the KNOW HOW.
2. Details of the technical instructions shall be fixed by separate
agreements between the contracting parties. Their agreements shall
relate in particular to the regulation of:
- the number and duration of instruction courses;
- the number and technical qualification of the specialists of
XXXXXXX-XXXXXXX to be instructed; and
- the lodging, boarding, liability and insurance of the specialists.
3. The contracting parties agree that all expenses directly incurred by
personnel of XXXXXXX-XXXXXXX during the training courses, in particular
travel and daily expenses and salaries, will always be at
XXXXXXX-XXXXXXX'x charge. However, expenses and costs for MAUSER
personnel for the training and instruction of personnel of
XXXXXXX-XXXXXXX will be borne by MAUSER. Should MAUSER, however, at the
request of XXXXXXX-XXXXXXX send specialists to The United States of
America, the travel and daily expense and salaries for such specialists
will be borne by XXXXXXX-XXXXXXX.
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ARTICLE 7
SECRECY
XXXXXXX-XXXXXXX is under strict obligation to keep secret the documents received
from MAUSER and the KNOW HOW transmitted by MAUSER from the commencement of
negotiations of this Agreement and during its life. Such obligation to secrecy
shall continue even after termination of this Agreement for any cause. Except
for information (a) which enters the public domain without the fault or
negligence of XXXXXXX-XXXXXXX or (b) which XXXXXXX-XXXXXXX receives from a third
party who is legally entitled to such information and to communicate it to
XXXXXXX-XXXXXXX. XXXXXXX-XXXXXXX undertakes to take all precautionary measures
necessary for the maintenance of such secrecy (also for their employees).
ARTICLE 8
KNOW HOW FEES AND ROYALTIES
For LICENSED ARTICLES manufactured under this Agreement XXXXXXX-XXXXXXX shall
pay to MAUSER until 31.12.1996 a combined royalty and KNOW HOW fee of **** of
the net invoice value of all LICENSED ARTICLES manufactured or sold by
XXXXXXX-XXXXXXX under the authority of this Agreement.
Starting from January 1st, 1997 the combined royalty and KNOW HOW fee will be
**** of the net invoice value per LICENSED ARTICLE.
The net invoice value shall be deemed to be the sales price billed by
XXXXXXX-XXXXXXX after deduction of taxes on sales, and/or turnover and/or the
added value, costs for packaging, transport and insurance, credits and returns
and customery trade discounts. Where material is supplied free of charge, its
current value shall be added to the sales price.
If taxes are payable in the United States of America on the KNOW HOW fee,
XXXXXXX-XXXXXXX shall be responsible for the payment of such taxes and shall
remit MAUSER the net amount due to MAUSER after deduction of such taxes.
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XXXXXXX-XXXXXXX shall observe the Double Taxation Agreement between the United
States of America and the Federal Republic of Germany when deducting such taxes
and shall furnish MAUSER with all receipts issued for such taxes deducted by
XXXXXXX-XXXXXXX and paid to the revenue authorities in the TERRITORY.
ARTICLE 9
KNOW HOW FEE ACCOUNTS AND PAYMENTS
1. XXXXXXX-XXXXXXX shall maintain complete records at its Corporate
Headquarters relating to licensed production and sales. Within 30
(thirty) days after the end of each calendar quarter of this Agreement
up to and including the end of the calendar quarter following
termination of this Agreement XXXXXXX-XXXXXXX shall render a written
report to MAUSER listing the total net sales of the LICENSED ARTICLE
produced and sold by XXXXXXX-XXXXXXX during such calendar quarter and
the royalty due thereon. Each report so rendered shall be accompanied
by the required royalty payment.
2. MAUSER shall have the right during normal business hours on 3 (three)
days prior written notice at its own expense and not more than once in
any calendar quarter to have the pertinent records of XXXXXXX-XXXXXXX
examined by an independent certified public accountant for the purpose
of verifying the reports rendered hereunder, provided, however, any
report of the accountant to MAUSER shall be made in such a manner that
all information properly deemed confidential by XXXXXXX-XXXXXXX will
not be disclosed to MAUSER and further provided that in the event
MAUSER's accountants' report is not accepted by XXXXXXX-XXXXXXX or
acceptable adjustments made thereon, confidential information may be
disclosed as necessary to MAUSER and its attorneys.
ARTICLE 10
LIFE OF AGREEMENT
1. This Agreement will come into effect on being signed by the latest
contracting party commencing with January 1, 1995. Therefore, the first
contract year will end on December 31, 1995. The first contractual
period will be five years.
2. After December 31, 1999, this Agreement will be tacitly renewed by
periods of one year each, unless notice of cancellation by registered
letter is given by either contracting party not later than six months
before expiry of any contract year. All notices given pursuant to this
Article 10.2 shall be in writing and delivered by facsimile
transmission and confirmed by international overnight
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delivery service, delivery receipt requested, or the functional
equivalent thereof at the time of notice. Decisive date for the
observance of the period of notice shall be the date of receipt of the
notice.
3. MAUSER has the right to cancel this Agreement by written notice of
cancellation and with immediate effect for any of the following, if
XXXXXXX-XXXXXXX is in default of a material obligation resulting from
this Agreement, especially with the payment of the KNOW HOW and License
fees, or has violated material obligations under the Agreement and has
not remedied such violation within three months after receipt of a
corresponding notice by MAUSER to do so,
XXXXXXX-XXXXXXX undertakes measures which are a material breach of
trust and/or breach of secrecy,
****
4. XXXXXXX-XXXXXXX has the right to cancel this Agreement by written
notice of cancellation and with immediate effect, if
- MAUSER does not fulfill material obligations under this Agreement
within three months after having received a corresponding notice to do
so,
5. In the event of any adjudication of bankruptcy, assignment for the
benefit of creditors or levy of execution directly involving XXXXXXX
XXXXXXX or MAUSER, the other shall have the immediate right to
terminate this Agreement by giving written notice to the other party
hereto,
6. In the event of a premature termination of this Agreement by
cancellation all rights of XXXXXXX-XXXXXXX arising from this Agreement
will cease by the latest two months after receipt of the notice of
cancellation. The contractual KNOW HOW fees shall be payable until that
date, when XXXXXXX-XXXXXXX loses its rights resulting from this
Agreement.
7. Within one month after expiry or termination of this Agreement for any
cause XXXXXXX-XXXXXXX shall return all documents and drawings received
from MAUSER. Upon the termination of this Agreement all rights of the
contracting parties from this Agreement will cease, with the exception
of those provided in its Article 7 (Secrecy).
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8. Should this Agreement expire in accordance with paragraph 10.2 hereof,
XXXXXXX-XXXXXXX shall have the absolute non-exclusive right to use the
Know How forever thereafter free of any and all royalties and fees.
9. ****.
ARTICLE 11
APPLICABLE LAW, JURISDICTION
1. This Agreement has been drawn up in English. Any amendments and
additions to this Agreement must be made in writing and signed by both
parties to become valid.
2. The contracting parties have agreed that as a whole and in all its
individual provisions this Agreement is subject to German substantive
and procedural law, except for the PATENT RIGHT which falls under the
patent law of the United States of America.
3. Any and all disputes arising from or in connection with the execution,
delivery, performance or interpretation and construction of this
Agreement shall be submitted to binding arbitration before a single
arbitrator in Zurich, Switzerland, in accordance with the rules and
regulations of the International Chamber of Commerce except that where
such rules and regulations differ from the provisions of this Article
12.3 the latter shall govern. There shall be no discovery, the
arbitrator shall be selected within 30 days of the service of the
written demand for arbitration, the first hearing shall be conducted
within 60 days of the service and shall continue day to day until
completed. The decision shall be rendered within 15 business days from
the date of the last hearing, shall set forth the decision and the
reasons for same and shall be unappealable except for fraud or bias.
The loser shall pay all the administrative costs of the arbitration and
the winners costs including without limitation attorneys' fees,
experts' fees, reasonable travel and living costs. The winning party
shall
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have the right to seek confirmation of the arbitrator's award in any of
competent jurisdiction over the losing party without objection.
ARTICLE 12
SUBSTITUTION CLAUSE
Should any individual provision Of this Agreement be or become void, or should a
gap be ascertained in this Agreement, the validity of the other provisions shall
not be affected thereby. As a substitute for the provision, which is void or
inoperative, or for the purpose of filling the gap, an appropriate arrangement
shall be valid, which, if it is legally possible, shall be as close as possible
to what the contracting parties would have reasonably intended, had they
considered that point. If a provision is void or inoperative owing to measures
or outputs or times (periods or time limits) indicated therein, this shall be
replaced by a measure which is as close as legally possible to the provision in
question.
ARTICLE 13
The parties to this Agreement are aware that their contractual relationship has
been renewed by a group of agreements signed today, namely
1. KNOW HOW and LICENSING AGREEMENT L-Ring USA;
2. LICENSING AGREEMENT L-RING Canada;
3. KNOW HOW and LICENSING AGREEMENT Open Top USA and
4. LICENSING AGREEMENT L-Ring USA between XXXXXXX-XXXXXXX CORP. and HUNTER
DRUM LTD.
5. Release of any rights and obligations under the L-RING AGREEMENT of
January 1, 1995.
Bruhl, 26.06.1995 Red Bank,
_____________________________ _____________________________
MAUSER-WERKE XXXXXXX-XXXXXXX
G M B H CORPORATION
By /s/Xx. Xxxxxxxx /s/Effnert By /s/Xxxx Xxxxxxxx
__________________________________ _____________________________________
Xx. Xxxxxxxx Effnert Xxxx Xxxxxxxx
(Chief Exec. Officer) (Director) (President)
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