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EXHIBIT 10.9
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.
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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
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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
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DOWN PAYMENT MAXIMUM NO. OF SPECIALTIES (1) MAN-
LICENSOR PEOPLE DAYS
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PHASE 1 - BASIC ENGINEERING DESIGN
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1 Collecting & Sorting Documentation [1 - 9] 2 PE(1) 30
Basic Data Sorting & Consultation
2 PFD(2) & Equipment Spec's Review [16 - 17] 2 PE 16
3 PID(3) & Instruments Spec's Review [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
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(APPENDIX II)
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DOWN PAYMENT MAXIMUM NO. OF SPECIALTIES (1) MAN-
LICENSOR PEOPLE DAYS
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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
