EXHIBIT 10.11
JPF
3/30/94
LICENSE AGREEMENT
THIS AGREEMENT, dated this 31st day of March, 1994, by and between
AlliedSignal Inc. (hereinafter called "LICENSOR") a Delaware corporation
having a principal place of business at Columbia Road and Park Avenue, Xxxxxx
Township, New Jersey and The Brighton Industries Corporation (hereinafter
called "LICENSEE") a Delaware corporation having a principal place of
business at 00 Xxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx.
W I T N E S S E T H, T H A T
WHEREAS, Licensor is in the possession of certain valuable
information, know-how and technology relating to the manufacture of certain
chrome products;
WHEREAS, Licensee desires to represent Licensor as agent (whether
known or unknown) in the grant of a license to the PRC Sublicensee (as
defined in Section 1.8) and to obtain a license with the right to sublicense
to utilize said information, know-how and technology for the design,
construction and operation of a facility in the People's Republic of China
for the production of such chrome products; and
WHEREAS, Licensor is willing to allow Licensee to act as agent for
Licensor with respect to the PRC Sublicensee and to grant such license and
sublicensing rights to Licensee on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good valuable considerations, it is hereby agreed as
follows:
1. DEFINITIONS
1.1 "Effective Date" shall mean the date first above written.
1.2 "PRC" means the People's Republic of China.
1.3 "Agreement" means this agreement and the Appendices.
1.4 "Plant" means Licensor's chrome chemicals plant located
at Baltimore, Maryland, which has been shut down.
1.5 "Products" shall mean chromic add, sodium bichromate and
KOREON-TM- product (chromic basic sulfate) manufactured in PRC by means of
Technology, or any portion thereof, furnished under this Agreement.
1.6 "Technology" shall mean the technical information owned
or controlled by Licensor which is in written or other documentary form and
which was used in the commercial production of Products at the Plant at the
time of its shut-down (but including an updated heat and materials balance)
such information including trade secrets, know-how, engineering drawings,
specifications and flow sheets, and further including all technical
information which will be disclosed to Licensee under the terms of this
Agreement in the form of consultation and technical assistance as specified
in Section 4 hereof.
1.7 "PRC Plant" shall mean a single facility for the
commercial practice of Technology located at the Chouguing Dongfeng Chemical
Plant, Sichuan Province, PRC, including any modifications or expansions of
such facilities under this Agreement.
1.8 "PRC Sublicensee" shall mean the ultimate user of
Technology at PRC Plant.
2. GRANT OF RIGHTS
2.1 Licensor hereby grants to Licensee upon receipt by
Licensor of the down payment provided for in Subsection 5.1.1 below, a
non-exclusive right and license, together with the right to grant
sublicenses, to construct, operate and maintain PRC plant to manufacture
Products in PRC and a non-exclusive right to sell the Products anywhere in
the world.
2.2 No license is granted herein, by implication or
otherwise, under any patent or patent application or any other technology of
Licensor, or to use Technology outside of PRC, or for any other purpose, or
for other than in PRC Plant.
2.3 All sublicenses granted by Licensee shall be subject to
all applicable terms and conditions, including payments to Licensor as
provided in this Agreement; which terms and conditions shall first have been
accepted in writing and delivered to Licensor by each such sublicensee.
Licensee shall be and remain responsible to
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Licensor for the reporting and payment of all sums due from sublicensees.
3. TRANSFER OF TECHNOLOGY
Promptly after the Effective Date, PRC Sublicensee's
representatives shall visit Plant to receive the documentation on Technology
and Licensor shall furnish to such representatives such documentation as
specified below:
3.1 Existing documentation as follows:
3.1.1 Process descriptions
3.1.2 Process flowsheets
3.1.3 Piping and instrument diagrams
3.1.4 Supervisors' and operators' operating manuals
3.1.5 Research and plant research reports
3.1.6 Baltimore plant layout drawings
3.1.7 Baltimore plant equipment arrangement drawings
3.1.8 Cardex file of equipment which contains detailed
equipment
3.1.9 Descriptions of laboratory analytical procedures
3.1.10 General information on process piping, valves and
fittings
3.1.11 Safety data sheets for products and chemicals used
3.1.12 General information for the prevention of major
incidents.
3.1.13 Names, addresses and phone numbers of former Allied
personnel
3.1.14 Recommended spare equipment or parts
3.2 Updated heat and material balance.
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Licensee agrees to obtain from PRC Sublicensee a confirmation
certificate that PRC Sublicensee has received all of the required
documentation immediately after it is received by PRC Sublicensee and provide
a copy of such certificate to Licensor. It is understood that such
confirmation certificate shall confirm only that the categories of documents
listed have been transferred without regard to the content of such documents.
4. TECHNICAL ASSISTANCE
4.1 Upon written request received from Licensee with
reasonable notice, Licensor shall provide consultation and/or written
comments on the Technology as provided for herein. All such consultation
and/or comments shall be provided by Licensor at its facilities in the U.S.
All visits by Licensee's or its sublicensees' personnel shall be at mutually
convenient times. Such consultation and/or comments shall be according to
the terms of Appendix I, provided that Licensor shall have no obligation to
provide such consultation and/or comments after forty (40) weeks from the
Effective Date.
4.2 Upon written request received from Licensee within the
time frames specified in Appendix II and on 30 days' prior written notice,
Licensor shall provide the additional consultation and/or comments to
Licensees or its sublicensees according to the terms of Appendix II.
Licensor shall have no obligation to provide such additional consultation
and/or comments after eight-five (85) weeks from the Effective Date.
4.3 All travel and living expenses including communications
for representatives of Licensee or its sublicensees in connection with
Licensor's provision of technical assistance pursuant to Subsections 4.1 and
4.2 above shall be for the account of Licensee.
4.4 Licensee shall reimburse Licensor for Licensor's costs
and expenses in connection with the furnishing of the services specified in
Appendices I and II at the rate of Eight Hundred Dollars ($800.00) per
man-day of Licensor's representatives utilized, plus any related travel
expenses.
5. CONSIDERATION
5.1 For the disclosure of Technology hereunder and for the
rights and licenses herein granted to represent Licensor and to use and to
sublicense the use of Technology, or any portion thereof in the manufacture
of Products in the PRC Plant, Licensee shall pay to Licensor in
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United States funds the sum of Two Million Dollars ($2,000,000.00) payable
according to the following schedule:
5.1.1 50% of said sum, i.e., One Million Dollars
($1,000,000.00), within thirty (30) days from PRC Sublicensee's receipt of
the documentation on Technology as specified in Section 3 hereof as evidenced
by PRC Sublicensee's signing of the confirmation certificate as specified in
Section 3, but in no event later than September 30, 1994 (down payment).
5.1.2 25% of said sum, i.e. Five Hundred Thousand
Dollars ($500,000.00), as soon as the basic engineering design is completed
by Licensee, but in no event later than twelve (12) months from Licensor's
receipt of the down payment.
5.1.3 25% of said sum, i.e. Five Hundred Thousand
Dollars ($500,000.00), as soon as Licensor has completed its review of the
detailed design pursuant to this Agreement, but in no event later than twenty
(20) months from Licensor's receipt of the down payment.
5.2 Payments made in accordance with Subsection 5.1 of this
Section shall be nonrefundable.
6. PAYMENTS
All payments which shall become due hereunder shall be made by
Licensee to Licensor without discount or offset in lawful money of the United
States at the address provided in Section 18 hereof, or at such other bank or
location in the United States that Licensor shall designate, except that
Licensee may deduct up to ten (10)% of all payments made but only to the
extent that PRC Sublicensee deducts such amounts from its payments to
Licensee with respect to the PRC tax on technical know-how and related
services and then and only then, if such tax is creditable under United
States tax law against Licensor's United States Federal Income Tax liability.
With such payments (with deductions), Licensee shall deliver to Licensor a
certified copy of the receipt by the taxing authority of payment by Licensor
of any such tax in form suitable to enable Licensor to obtain its credit as
described above.
7. DISCLAIMERS AND INDEMNITIES
7.1 Licensee understands that improper use or practice of
Technology could present in-plant health and safety hazards to employees of
Licensee or its sublicensees and also waste disposal problem which could
present a hazard to the environment and public health. Licensee agrees to
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alert its employees and its sublicensees as to these hazards and to require
its sublicensees to take appropriate measures in the practice and use of
Technology to avoid or minimize such hazards.
7.2 Licensor's sole obligation with respect to Technology to
be provided to Licensee hereunder shall be to use reasonable care to verify
correspondence and completeness of same as against Licensor's records.
7.3 Licensor shall bear no responsibility whatsoever to
Licensee or its sublicensees or any other party for any and all liabilities,
loss, cost, expense, damage, claim or demand arising or in any manner
resulting from, Licensee's contracts with its sublicensees or any other
party. Licensee shall indemnify and hold Licensor harmless with respect to
any such liabilities, loss, cost, expense, damage, claim or demand.
7.4 Licensor shall have no obligation to Licensee or to its
sublicensees to defend any claim or suit, or to hold harmless or immune or to
indemnify against any loss, cost, expense, payment or damage, arising from
any allegation of violation of any contractual right or patent right or other
right or alleged right of any third party by reason of the manufacture, use
or sale of Products, or by reason of Licensee's or its sublicensees' design,
engineering or construction of PRC Plant, or by reason of licensee's or its
sublicenses' design, engineering, construction, operation and maintenance of
PRC Plant; or any other use of Technology by Licensee or its sublicensees.
7.5 Licensee shall exonerate, hold harmless and indemnify
Licensor against any loss, cost, expense, payment or damage in any way
arising from or connected with such claim or suit described in Subsection 7.4
above.
7.6 Licensee shall assume, or contract so that its
sublicensees shall assume, all duties and obligations arising out of the
practice of Technology or production or use of Products, or arising out of
the design, engineering, construction and operation of Plants, including,
without limitation, those relating to compliance with any governmental laws,
rules, regulations or ordinances, including without limitation, laws, rules,
regulations and ordinances pertaining to employee safety and to the
environment. Licensee shall assume or contract with its sublicensees to
assume all risk and liability for failure or alleged failure to meet such
duties or obligations and Licensee shall exonerate, hold harmless, defend and
indemnify Licensor against any kind of claim or liability whatsoever arising
out of such failure or alleged
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failure including, without limiting the generality of the foregoing, claims
of customers, end-users, members of the public or any government, or any
agency thereof, or employees' claims.
8. CONFIDENTIALITY AND NON-USE
8.1 Licensee shall keep secret Technology and shall not
disclose Technology to any third party or use Technology for any purpose,
except as licensed herein, without the prior written approval of Licensor.
However, this obligation shall not apply to any information which:
(i) is at the time of disclosure, or
thereafter becomes, a part of the public domain through no act or omission by
Licensee or its employee; or
(ii) had been independently perfected by
Licensee or was otherwise in Licensee's lawful possession prior to disclosure
as shown by written records; or
(iii) Is hereafter lawfully disclosed to
Licensee by a third party which did not acquire the information under an
obligation of confidentiality from or through Licensor.
Any combination of known information shall be within any of the foregoing
exclusions only if the combination as such is within such exclusion.
8.2 Notwithstanding the foregoing, Licensee shall have the
right to communicate Technology to its employees, its contractors and their
employees, and to its sublicensees and its contractors and employees, but
only to the extent necessary to exercise its sublicensing rights hereunder,
provided, however, that in advance of such communication, each permitted
disclosee of Technology or other information shall have assumed a
corresponding obligation of secrecy and non-use as provided for herein.
9. GOVERNMENT EXPORT REGULATIONS
9.1 In addition to its obligation to maintain Technology
confidential, as provided by Section 8 hereof, Licensee hereby agrees that,
for so long as the rules and regulations of the U.S. Government prohibit the
same, neither Technology nor other technical data including software in any
manner disclosed or furnished to Licensee by Licensor to Licensee's
sublicensees hereunder will be shipped, transmitted, exported or re-exported,
nor will any "direct product" of such Technology or such other technical
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data be shipped, transmitted, exported or re-exported, either directly or
indirectly, to any country or destination prohibited by the laws, regulations
or policies of the U.S. Government. Licensee agrees to provide similar
language defining such restrictions in its contracts with all sublicensees.
9.2 For the purpose of this Section, the term "technical
data" shall be defined as in Sec. 379.1(a) of the U.S. Export Control
Regulations, and the term "direct product" shall mean only the immediate
product (including processes and services) produced or constructed directly
by use of the technical data, e.g., a plant or any major component thereof,
capable of producing Products, all in accordance with said Export Control
Regulations.
9.3 Licensee is advised that is unlawful to reexport without
U.S. Government permission U.S. origin products or technology if Licensee
knows that the products, technology, or software are (a) destined for any
missile technology project listed in Supplement No. 6 to EAR Part 778; (b)
will be used in the design, development, production, or use of missiles in or
by a country where a project listed in Supplement No. 6 to EAR Part 778 is
located; (c) will be used in the design, development, production,
stockpiling, or use of chemical or biological weapons in or by a country
listed in Supplement No. 5 to EAR Part 778; or (d) will be used in any
destination except those listed in Supplement 2 to EAR Part 778 for sensitive
nuclear end-uses; or if Licensee is informed by the U.S. Government that a
validated license is required for export to this consignee because it may
apply to the design, development, production, stockpiling, or use of missiles
or chemical or biological weapons.
9.4 Licensee agrees to indemnify and hold harmless Licensor
against any claim, demand, action, proceeding, judgment, penalty, fine, loss,
liability, cost or expense (including reasonable attorneys fees) suffered or
incurred by Licensor and arising out of or relating to any violation by
Licensee or any of its sublicensees, contractors, consultants or customers of
any U.S. export control laws or regulations.
9.5 Licensee understands that the foregoing obligations are
U.S. legal requirements and agrees that they shall survive any term or
termination of this Agreement.
10. TERMINATION
10.1 This Agreement may be terminated by Licensor at any time
by giving not less than thirty (30)
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days' prior written notice of termination; (i) if Licensee or its
sublicensees fail to perform any obligation hereunder when due, including,
without limitation, Licensee's obligation to make payments pursuant to
Section 5 hereof, unless Licensee or its PRC Sublicensee cures such failure
to perform within thirty (30) days after receipt of such notice from
Licensor, or (ii) if Licensee or its PRC Sublicensee becomes bankrupt or
insolvent, or makes any assignment for the benefit of creditors, or if a
trustee or receiver of its property is appointed, or if Licensee or its PRC
Sublicensee takes or is subjected to any other action under law based upon
its inability to meet its financial obligations. In the event of such
termination, all rights and licenses acquired by Licensee and sublicensees
hereunder shall cease and terminate and Licensee and/or its sublicensees
shall cease to use and shall forthwith return or surrender to Licensor all
Technology and information received from Licensor, and all papers and
documents made by Licensee and its sublicensees embodying such Technology and
information.
10.2 Termination of this Agreement by Licensor shall not
release licensee of its obligations under Sections 8 and 9 hereof or to make
payments due or which shall become due, in accordance with Section 5 hereof.
The immunities of Licensor under Section 7 hereof shall not be affected by
termination of this Agreement.
11. USE OF LICENSOR'S NAME OR TRADEMARKS PROHIBITED
Licensee shall have no rights or hereunder with respect to the use
of any business name or trademark of Licensor in any manner in connection
with the manufacture, use or sale of Products.
12. FORCE MAJEURE
If either party is rendered unable, wholly or in part, to carry out
any of its duties or obligations under this Agreement, by reason of (i) act
of God or the public enemy, fire, explosion, perils of the sea, flood,
drought, war, riot, sabotage, accident, embargo, or (ii) without limiting the
foregoing circumstances, any circumstance of like or different character
beyond the reasonable control of the party so failing; or (iii) interruption
of or delay in transportation, inadequacy or shortage or failure of supply of
materials or equipment, breakdowns, labor trouble from whatever cause arising
and whether or not the demands of the employees involved are reasonable and
within said party's power to concede; or (iv) compliance by either party with
any order, action, direction, or request of any Governmental officer,
department agency, authority or committee thereof,
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or (v) delays in obtaining or inability to obtain any US. Government
approvals including, but not necessarily limited to, export licenses which
may be required in the future; and (vi) whether in any case the circumstance
now exists or hereafter arises, such party shall forthwith give written
notice thereof to the other party (such notice briefly to describe the
circumstance causing such inability); and thereupon, to the extent that the
party giving such notice is unable to perform such duty or obligation by
reason of said circumstance, such duty or obligation shall be suspended
during, but no longer than the continuance of such circumstance.
13. MISCELLANEOUS
Licensee agrees to incorporate in its contracts with its
sublicensees in the PRC, language which will maximize the enforceability of
the confidentiality provisions herein by its sublicensees under PRC law and
policy. To this end all contractual relationships between Licensee and its
sublicensees in the PRC are subject to the prior written approval of Licensor
as to form and content as impacting on these terms.
14. ARBITRATION
14.1 Any controversy or dispute arising out of or in
connection with this Agreement, its interpretation, performance, or
termination, which the parties are unable to resolve within a reasonable time
after written notice by one party to the other of the existence of such
controversy or dispute, shall be submitted to arbitration by either party and
if so submitted by either party, shall be finally settled by arbitration
conducted in accordance with the rules of conciliation and arbitration of the
American Arbitration Association in effect on the date hereof. Any such
arbitration shall take place in the City of New York, New York, United States
of America, before three arbitrators, one of whom shall be designated by
Licensee one by Licensor, and the third by the two so designated. If one
party fails to designate an arbitrator within thirty (30) days after the
designation of any arbitrator by the other party, the arbitrator who should
have been chosen by the other party shall be appointed by the American
Arbitration Association as soon as possible. In the event that the said two
arbitrators designated by the parties am unable to agree upon a third
arbitrator within thirty (30) days after the nomination of the last of the
said two arbitrators, the third arbitrator shall be appointed by the American
Arbitration Association on as soon as possible. None of the arbitrators need
be designated from any panel published by
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the American Arbitration Association or any other arbitration association.
14.2 The arbitrators shall apply the laws of the State of New
York. In no event shall the arbitrators have power to assess against
Licensor any sum, or account of any allegation of patent infringement or
other violation of any right or alleged right of a third party, or an account
of non-performance or alleged non-performance of Technology.
14.3 The institution of any arbitration proceeding hereunder
shall not relieve Licensee of its obligation to make payments accrued
hereunder pursuant to Section 5 hereof to Licensor during the continuance of
such proceeding.
14.4 The decision by the arbitrators, to the extent that the
issues decided therein fall within the powers of the arbitrators conferred by
this Section, shall be binding and conclusive upon the parties, their
successors and assigns and they shall comply with such decision in good
faith. Each party hereby submits itself to the jurisdiction of the courts of
the place where the arbitration is held, but only for the entry of judgement
with respect to the decision of the arbitrators hereunder. Notwithstanding
the foregoing, judgment upon the award may be entered in any court in the
country where the arbitration takes place, or any court having jurisdiction.
15. GOVERNING LAW LANGUAGE
This Agreement shall be governed by and interpreted and construed in
accordance with the laws of the State of New York, U.S.A., excluding any such
laws which may direct the application of the laws of another jurisdiction.
16. HEADINGS
The headings of the Sections of this Agreement are for convenience
only and shall not affect in any way the interpretation of this Agreement.
17. ASSIGNMENT
This Agreement may not be assigned by Licensee except to a wholly
owned subsidiary of Licensee. In the event of any such assignment however,
Licensee shall remain fully liable and responsible for all obligations under
this Agreement. Except as so provided, any purported assignment hereof shall be
null and void.
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18. NOTICES
Any notice or other communication required or authorized to be
given by either party to the other hereunder shall be in writing and shall be
delivered personally or sent by registered or certified mail, or by
telegraph, cable or TELEX message, postage or other charges prepaid,
addressed to the party to receive the same at the address set forth below or
such other address as such party shall have specified by written notice given
hereunder. Any such notice or communication given by mail shall be effective
as of the time it is received.
If to Licensee: Brighton Industries Corporation
00 Xxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx
Attention: Kit Kung
If to Licensor: AlliedSignal Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: X.X. Xxxxxxx
19. WAIVER
Waiver by Licensor of any breach of failure to enforce any of the
terms and conditions of this Agreement at any time she not in any way affect,
limit or waive Licensor's rights thereafter to enforce or compel strict
compliance with every term and condition thereof.
20. ENTIRETY
This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof, and
merges and supersedes all prior discussions and writing with respect thereto.
Unless expressly set forth in this Agreement, no warranties, express or
implied, are made, nor shall any statements, promises or inducements made or
offered by either party or by any agent or representative of either party by
valid or binding. No modification or alteration of this Agreement shall be
effective unless made in writing and signed by both parties hereto.
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21. EXECUTION
IN WITNESS WHEREOF, the parties hereto by their duly authorized
representatives have executed this Agreement in duplicate as of the date
first above written.
AlliedSignal Inc.
Engineered Materials Sector
By: /s/ X.X. Xxxxxxx 4/21/94
-----------------------------------
X.X. Xxxxxxx
Vice President
Operations
The Brighton Industries Corporation
By: /s/ Kit Kung 3/31/94
-----------------------------------
Kit Kung
President & CEO
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APPENDIX I
DOWN PAYMENT MAXIMUM NO. OF SPECIALTIES (1) MAN-
LICENSOR PEOPLE DAYS
-------------------------------------------------------------------------------------------------
PHASE 1 - BASIC ENGINEERING DESIGN
-------------------------------------------------------------------------------------------------
1 Collecting & Sorting [1 - 9] 2 PE(1) 30
Documentation
Basic Data Sorting &
Consultation
--------------------------------------------------------------------------------------------------
2 PFD(2) & Equipment Spec's Review [16 - 17] 2 PE 16
--------------------------------------------------------------------------------------------------
3 PID(3) & [30 - 31] 3 PE, IE(4) 30
--------------------------------------------------------------------------------------------------
4 Major Equipment Layout Review [26 - 35] 2 ME(5) 20
--------------------------------------------------------------------------------------------------
5 Third Version of PID Review [37 - 38] 2 PE 20
--------------------------------------------------------------------------------------------------
6 Environmental Documents Review [40 - 41] 2 PE 20
--------------------------------------------------------------------------------------------------
7 Equipment Layout Review [36 - 38] 2 PE 18
--------------------------------------------------------------------------------------------------
8 Miscellaneous (Review) [1 - 38] 2 PE 16
--------------------------------------------------------------------------------------------------
TOTAL 5 170
--------------------------------------------------------------------------------------------------
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(1) PE = Process Engineer
(2) PFD = Process Flow Diagrams
(3) PID = Piping and Instrumentation Diagrams
(4) IE = Instrument Engineer
(5) ME = Mechanical Engineer
APPENDIX II
DOWN PAYMENT MAXIMUM NO. OF SPECIALTIES (1) MAN-
LICENSOR PEOPLE DAYS
-------------------------------------------------------------------------------------------------
PHASE 2 - DETAILED ENGINEERING DESIGN
REVIEW
--------------------------------------------------------------------------------------------------
1 Process Engineer [78 82] 2 PE(1) 15
--------------------------------------------------------------------------------------------------
2 Mechanical Engineer [78 82] 1 ME(2) 7.5
--------------------------------------------------------------------------------------------------
3 Instrument Engineer [78 82] 1 IE(3) 7.5
--------------------------------------------------------------------------------------------------
TOTAL 4 30
--------------------------------------------------------------------------------------------------
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(1) PE = Process Engineer
(2) ME = Mechanical Engineer
(3) IE = Instrument Engineer
