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AMENDED LICENSE AND TECHNOLOGICAL ASSISTANCE AGREEMENT
INTRODUCTION
THIS AMENDED AGREEMENT ("Agreement") is made this 22nd day of November,
1996, between Carborundum Corporation, a corporation organized under the laws
of the State of Delaware with principal offices at Crows Xxxx Xxxx, Xxxxxxx, Xxx
Xxxxxx 00000, (hereinafter referred to as "Licensor"), and New Castle
Refractories Company, a division of Xxxxx Ticonderoga Company, a corporation
organized under the laws of the State of Delaware, with principal offices at 000
Xxxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xxxxxxxxxxxx 00000 (hereinafter referred to as
"Licensee").
WHEREAS, Licensor, pursuant to a Federal Trade Commission (FTC) Consent
Order executed by the FTC and by Saint-Gobain/Norton Industrial Ceramics
Corporation on February 26, 1996, and entered as final on June 12, 1996, arising
out of "In the Matter of Saint-Gobain/Norton Industrial Ceramics Corporation,"
is interested in enabling Licensee to enter the Silicon Carbide Refractory Brick
business by providing Licensee with a patent and technology license and with a
technology transfer;
WHEREAS, Licensee is interested in entering the Silicon Carbide Refractory Brick
business through the acquisition of a patent and technology license from
Licensor;
WHEREAS, Licensor is further willing to provide Licensee with equipment
purchase and product sourcing options pursuant to companion agreements
entitled "Equipment Option and Purchase Agreement" and "Product Purchase
Agreement" respectively;
WHEREAS, Licensor and Licensee entered into an agreement dated August 23,
1996 ("Original Agreement"), providing Licensee a license from Licensor for
Silicon Carbide Refractory Brick Technology; and
WHEREAS, Licensor and Licensee wish to amend the Original Agreement;
NOW, THEREFORE, in consideration of the terms and conditions expressed
hereinbelow, Licensor and Licensee agree as follows:
1. DEFINITIONS
As used herein:
1.1 "Effective Date Of This Agreement" shall mean the date on which this
Agreement has been finally approved by the FTC.
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1.2 "Silicon Carbide Refractory Bricks" shall mean all refractory
products composed of bonded silicon carbide grains which are formed
by hydraulic, mechanical or vibratory pressing, and are marketed
for use in the manufacture of primary metals, including aluminum
reduction cells, steel blast furnaces, and copper shaft furnaces.
1.3 "Silicon Carbide Refractory Brick Technology" shall mean: all
patents, trade secrets, technology and know-how of Licensor for
producing any Silicon Carbide Refractory Brick product sold by
Carborundum on or before the date hereof, all such information
being sufficiently detailed for the commercial production and sale of
such products, including, but not limited to, all technical
information, data, specifications, drawings, design and equipment
specifications, manuals, engineering reports, manufacturing designs
and reports, operation manuals, and formulations, laboratory
research, and quality control data.
1.4 "Licensed Patents" shall mean all letters patent identified in
Appendix A.
1.5 "Licensed Products" shall mean products manufactured with the
Silicon Carbide Refractory Brick Technology.
1.6 "Sole License" shall mean an exclusive license with the exception of:
(a) Licensor, Licensor's affiliate, and other non North
American third parties; and
(b) any third party to whom the Silicon Carbide Refractory
Brick Technology had been licensed or otherwise
transferred prior to the date hereof.
2. PATENT AND TECHNOLOGY LICENSE
2.1 Subject to and conditioned upon final approval by the FTC, Licensor
hereby grants to Licensee a fully paid-up, Sole License, without the
right to sublicense, under the Licensed Patent and under the Silicon
Carbide Refractory Brick Technology to manufacture, use and sell
Licensed Products.
2.2 Licensor shall provide Licensee prior to the Effective Date Of This
Agreement, a list which represents Licensor's best understanding of
the third parties to whom the Silicon Carbide Brick Technology had
been licensed or otherwise transferred prior to the date hereof.
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3. TECHNICAL INFORMATION AND KNOW-HOW AND TECHNICAL
SERVICES
3.1 During the period of 12 months after the Effective Date Of This
Agreement, on reasonable notice and request by Licensee, Licensor
shall provide to the Licensee information, technical assistance, and
advice sufficient to effect the transfer to the Licensee of the
Silicon Carbide Refractory Brick Technology and to enable the
Licensee to manufacture Silicon Carbide Refractory Bricks.
3.2 During the period of 12 months after the Effective Date Of This
Agreement, on reasonable notice and request by Licensee, Licensor
shall also provide to the Licensee consultation and training with
knowledgeable employees of Licensor, including at least one qualified
engineer, at the Licensee's facility for a period of time, not to
exceed three (3) months, sufficient to satisfy Licensee's
management that its personnel are adequately trained in the
manufacture of Silicon Carbide Refractory Bricks.
3.3 Licensee shall reimburse Licensor for all of its direct out-of-pocket
expenses, including direct travel expenses, incurred in providing
the assistance required by this Article 3. Licensee shall also pay
Licensor a per diem (including time spent in travel to Licensee's
site) equal to Licensor's actual expenses (including but not limited
to daily wages or salary plus benefits) not to exceed five hundred
dollars per day ($500.00/day) per Licensor employee for each day
greater than 30 days of on-site assistance incurred in providing
the assistance required by this Article 3. All such payments
shall be made in United States dollars or in such other currency
as Licensor may approve in writing.
3.4 Licensor shall provide the Licensee with all promotional,
advertising, and marketing materials regarding Silicon Carbide
Refractory Bricks prepared or made available by Licensor at any time
during the period commencing twelve (12) months prior to the date
hereof, a list of all customers of Licensor's Silicon Carbide
Refractory Bricks during the period commencing twenty four (24)
months prior to the date hereof, and a list of Licensor's
suppliers of silicon carbide, other raw materials, and production
components used to produce Licensor's Silicon Carbide Refractory
Bricks.
3.5 Nothing in this Agreement shall obligate Licensor to transfer to
Licensee any technology or know-how (or rights thereto) that was
not in Licensor's possession or control during the entire period
between June 12, 1996 and the Effective Date of This Agreement.
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3.6 If, prior to six (6) months following the Effective Date of This
Agreement, Licensor makes a SiC Refractory Brick product
development and introduces an improved SiC Refractory Brick
product which is different from a Licensed Product in the primary
metals marketplace (i.e., the aluminum reduction cell, the steel
blast furnace, and the copper shaft furnace marketplaces), Licensor
shall transfer such product development to Licensee according to
paragraphs 3.1 and 3.2 hereinabove.
4. CONFIDENTIAL INFORMATION
4.1 When either party ("Discloser") discloses to the other ("Disclosee")
in connection with this Agreement any proprietary information with
respect to Silicon Carbide Refractory Bricks (said proprietary
information along with Silicon Carbide Refractory Brick Technology,
hereinafter referred to as "Technical Information"), it is agreed
that such disclosure of Technical Information is conditioned upon
the following:
4.2 Disclosee shall maintain in confidence and refrain from using for or
on behalf of anyone other than Discloser and/or Disclosee (and/or
Licensee's assignee if an assignment is made under paragraph 6.2
below) all Technical Information received from Discloser, whether
such Technical Information is embodied in documentation or
otherwise; provided that if Licensor is the Disclosee and Licensor
receives proprietary information of Licensee in the course of
providing technical assistance under this Agreement, then Licensor
shall also refrain from using such proprietary information on its own
behalf; and provided further that the obligations of this Article 4
shall not apply to any information which:
4.2.1 is, at the time Disclosee receives it or shall thereafter
become, part of the public domain except where this is due to
Disclosee's own acts or omissions, or the acts or omissions of
any of Disclosee's employees, or any third party acting on
Disclosee's behalf;
4.2.2 has been furnished or made known to Disclosee by any third
party as a matter of right and without restriction on
disclosure, provided that Disclosee does not know or have
reason to know that such information was acquired by such
third party directly or indirectly from Discloser under binder
of secrecy; or
4.2.3 was legally in Disclosee's possession at the time the parties
entered into this Agreement as evidenced by written records,
and was not acquired directly or indirectly from Discloser or a
predecessor in interest of Discloser.
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4.3 Disclosee shall limit the disclosure of Discloser's Technical
Information within Disclosee's organization to only those employees
who are required to use such Technical Information in connection
with the purposes for which such Technical Information was
disclosed to Disclosee and shall maintain current a continuing list
of the names of all of Disclosee's employees to whom such disclosure
has been made, which list shall be made available to Discloser upon
request.
5. CONSIDERATION
5.1 The parties hereto agree that in consideration of the rights and
licenses granted and conveyed in this Agreement, Licensee shall pay
to Licensor a fixed sum in the amount of Four Hundred and Fifty
Thousand Dollars ($450,000.00). This sum shall be paid by Licensor
to Licensee in the following manner:
5.1.1 Licensee shall pay to Licensor a sum in the amount of One
Hundred Thousand Dollars ($100,000.00) within thirty (30)
days of the Effective Date of This Agreement.
5.1.2 Licensee shall pay to Licensor a sum in the amount of One
Hundred and Fifty Thousand Dollars ($150,000.00) within
thirty (30) days of the earlier of:
a. the second anniversary of the Effective Date of
This Agreement; or
b. Licensee's cumulative invoicing of One Million
Dollars ($1,000,000) of gross sales of Licensed Product.
5.1.3 Licensee shall pay to Licensor a sum in the amount of Two
Hundred Thousand Dollars ($200,000.00) within thirty (30)
days of the earlier of:
a. the fifth anniversary of the Effective Date of This
Agreement, or
b. Licensee's cumulative invoicing of Four Million
Five Hundred Thousand Dollars ($4,500,000) of gross sales of
Licensed Product.
5.2 All payments to Licensor under this Agreement shall be made in
United States dollars at the office of Licensor set forth at the
beginning of this Agreement or at such other place as Licensor may
direct.
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5.3 If Licensee fails to make any payment required to be made by it
under this Agreement and Licensor initiates a mediation under
paragraph 7.3 and/or a judicial proceeding to collect such payment
or payments, then in addition to any payments that are due, Licensor
shall be entitled to recover from Licensee reasonable attorneys' fees
incurred by Licensor in connection with such mediation and/or
judicial proceedings along with interest at the Prime Rate plus two
(2) percent running from the time such payment or payments were
due under this Agreement.
6. TERM OF AGREEMENT
6.1 The license granted in Article 2 above shall be perpetual.
6.2 Licensee may assign its rights under this Agreement, including but
not limited to the Sole License that is granted hereunder, provided
that upon such assignment, the Sole License granted hereby to
Licensee shall immediately be fully transferred to Licensee's
assignee and shall terminate as to Licensee, and Licensee shall
cease to use the Silicon Carbide Refractory Brick Technology
furnished hereunder and the inventions embodied in the Licensed
Patents, and shall turn over to Licensee's assignee all documentation
and other physical forms embodying Technical Information (as defined
in paragraph 4.1 above) together with all copies that may have been
prepared by Licensee while such Technical Information was in
Licensee's possession; and provided further that Licensee shall have
a continuing obligation to comply with the confidentiality provisions
of Article 4 above; and provided further that Licensee's assignee
shall agree in writing, delivered to Licensor, that assignee shall be
fully bound by all obligations of Licensee under this Agreement,
including but not limited to the obligations of confidentiality set
forth in Article 4 hereof. In the event that Licensee makes an
assignment under this paragraph 6.2, Licensee shall give prompt
notice of such assignment and the identity of the assignee to
Licensor. The provisions of this paragraph 6.2 shall not oblige
Licensee to cease manufacture of any product using technology or
know-how which has been developed exclusively by it, or is part of
the public domain, or lawfully furnished by a third party, or was in
its possession prior to the Effective Date Of This Agreement.
6.3 The provisions of this Agreement, including but not limited to the
payment obligations set forth in Article 5, shall continue to be
binding upon Licensee notwithstanding an assignment under
paragraph 6.2 above.
6.4 This Agreement shall be terminated, and no party shall be obligated
hereunder, if this Agreement is not finally approved by the FTC on
or before August 26, 1997.
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7. GENERAL
7.1 During the term of this Agreement, Licensee shall diligently employ
its best efforts in the manufacture of Silicon Carbide Refractory
Bricks.
7.2 Any notice or other communication to either party to this Agreement
required or permitted hereunder shall be in writing and shall be sent
by registered airmail, return receipt requested, postage prepaid,
addressed to the address of such party set forth at the beginning of
this Agreement or to such changed address as such party shall be
deemed to have been served when delivered or, if delivery is not
accepted by reason of the fault of the addressee, when tendered.
7.3 All disputes arising in connection with this Agreement shall be
finally settled by mediation held and conducted in Worcester,
Massachusetts, U.S.A. in accordance with the rules of the American
Arbitration Association. Judgment to enforce the agreement reached
may be entered in any court having jurisdiction, or application may
be made to such court for a judicial acceptance of the award and an
order of enforcement, as the case may be. In interpreting the
provisions of this Agreement, the mediators shall apply the law of
Massachusetts.
7.4 This Agreement may be executed in several counterparts and each
such counterpart shall be deemed an original hereof.
7.5 Licensor warrants that prior to a final decision by the FTC, Licensor
will not continue any further discussions with any other party
regarding licensing Silicon Carbide Brick Technology.
IN WITNESS WHEREOF, Licensor and Licensee have caused this Agreement to be
duly executed on the date first written above.
LICENSOR COMPANY LICENSEE COMPANY
BY: /s/ Xxxxxx X. Xxxxxx BY /s/ Xxxx X. Xxxx
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Xxxxxx X. Xxxxxx Xxxx X. Xxxx
President and CEO President and CEO
Carborundum Corporation Xxxxx Ticonderoga Company
Date: 11/22/96 Date: 11/21/96
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APPENDIX A
U.S. Patent Number 4,578,363, "Silicon Carbide Refractories Having Modified
Silicon Nitride Bond" dated March 25, 1986.
