Exhibit 10.18
COST SHARING AGREEMENT
THIS AGREEMENT is entered into on this 1st day of Jan 1998, by and
between Hosokawa Micron Corporation, a Japanese corporation, with offices at
5-14, 2-chome, Xxxxxxxxxxx, Xxxx-xx Xxxxx 000, Xxxxx ("HMC") and Hosokawa Micron
International, Inc., a Delaware, United States corporation, with offices at 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("HMII").
WITNESSETH:
WHEREAS, HMC and HMII are engaged directly and through a number of
subsidiaries in the business of designing, engineering, manufacturing, and
marketing powder and particle processing equipment, systems and
technologies;
WHEREAS, the powder and particle processing industry is extremely
competitive on a worldwide basis, so that it is imperative that HMC and HMII
be in the forefront of the acquisition and development of new ideas,
products and technologies in this business;
WHEREAS, HMC and HMII have, do and are conducting extensive research
and development in the areas of powder and particle technology;
WHEREAS, HMC AND HMII desire to develop new and improved technologies,
products, systems and processes for application in powder and particle
processing equipment and systems and technologies offered and manufactured
by HMC and HMII, and to share the costs, risks and benefits of such
development;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties hereby agree as follows.
ARTICLE 1
DEFINITIONS
SECTION 1.1. AFFILIATES(S). "Affiliate(s)" shall mean any entity that is
directly or indirectly
50 percent or more owned by a party to this Agreement.
SECTION 1.2. CONFIDENTIAL MATTERS. "Confidential Matters" is as defined in
Paragraph 5.2 of this Agreement.
SECTION 1.3. DEVELOPED INTANGIBLE PROPERTY. "Developed Intangible Property"
shall mean Intangible Property developed as part of the Research Program under
this Agreement.
SECTION 1.4. IMPROVEMENTS. "Improvements" shall mean, any and all findings,
discoveries, inventions, additions, modifications, formulations, or changes made
during the term of this Agreement that relate to Intangible Property, Developed
Intangible Property, Know-How, or Product.
SECTION 1.5. INTANGIBLE PROPERTY. "Intangible Property" shall mean and
include any and all patents and similar industrial property rights, copyrights,
process technology, inventions, computer programs, enhancements, updates,
improvements, translations, adaptations, secret and confidential Know-How,
information, data, specifications, designs, manufacturing techniques and
descriptions, or other intangible property.
SECTION 1.6. KNOW-HOW. "Know-How" shall mean any and all technical
information generated during the term of this Agreement that relates to Product
or Improvements and shall include, without limitation, all manufacturing data
and any other information relating to Products or Improvements and useful for
the development, manufacture, or effectiveness of Product.
SECTION 1.7. PRODUCT. "Product" shall mean equipment, systems, components
and processes developed under this Agreement.
SECTION 1.8. RESEARCH COMMITTEE. "Research Committee" shall mean the
Committee composed of two representatives from HMC and two representatives from
HMII that shall have responsibility for making determinations relating to this
Agreement and the Research Program.
SECTION 1.9. TERRITORY. "Territory" shall mean the geographic area of:
Japan for HMC; and North, Central and South America, Europe, Australia, New
Zealand, South Africa, India and all Asian countries west of India for HMII.
SECTION 1.10. THIRD PARTY OR THIRD PARTIES. "Third Party" or "Third
Parties" shall mean any entity other than a party to this Agreement or an
Affiliate.
ARTICLE II
TERM
SECTION 2.1. TERM. The term of this Agreement shall be for a period of 5
years from January 1, 1998, or for so long as a Research Project is in
existence, whichever is later, unless terminated earlier as provided in Article
VII of this Agreement.
ARTICLE III
RESEARCH PROGRAM
SECTION 3.1. RESEARCH PROGRAM. The Research Program is research and
development activity performed by HMC or HMII or an affiliate of either party,
or performed by Third Parties and funded by HMC or HMII or an affiliate of
either, including, without limitation, (a) basic research, (b) product specific
development, and (c) improvements to Products or systems or processes, relating
to projects previously funded by the Research Program. A list of the most
important projects included in the Research Program is attached as Exhibit A to
this Agreement. Projects specifically excluded from the Research Program are
listed in Exhibit B to this Agreement. Research activity which is not listed in
Exhibit A but not excluded in Exhibit B shall be included in the Research
Program. Exhibits A and B shall be updated no less frequently than semi-annually
as of October 1st and April 1st of each year.
SECTION 3.2. ACQUIRED PRODUCTS OR PROJECTS. A product or project may be
added to the Research Program on the acquisition of the product or a portion
thereof by purchase, license, or otherwise.
SECTION 3.3. RESEARCH PROGRAM AND BUDGET.
a. The Research Committee shall prepare an annual operating plan, which
shall set forth in detail:
i) Objectives to be accomplished during such year;
ii) Costs expected to be incurred for the year;
iii) Projected future operations and objectives:
iv) The nature of the research and development work that needs to be
completed by one or both parties in order to achieve the purposes
of this Agreement, and
v) Projects to be included in the annual operating plan ("Project"
or "Projects"). Each Project shall separately identify the nature
of the work to be performed by each party, the particular use to
which the work is expected to be put, and the total cost of such
work and an estimate of the date by which such work is to be
completed.
b. The parties shall perform the work specified for each Project. Each
party convenants with the other that all such work will be performed as
specified in the Project, and that each will cause such work to be
performed by its employees or contractors utilizing the level of skill,
care, and diligence as is exercised by its respective employees in their
own internal projects of the same or similar nature.
c. Each party shall be reimbursed for its total development costs incurred
in such work in accordance with the terms of this Agreement. The total
development costs shall include all of the direct costs incurred by the
party related to the Project, and the indirect costs necessary to maintain
the Projects. Indirect costs shall mean the allocable portion of overhead
expenses attributable to the Projects according to generally accepted
accounting
principles.
SECTION 3.4. COST SHARING
a. COST SHARE. HMC and HMII shall be responsible for its proportional share of
the costs of each Project for each year in which this Agreement is effective, as
defined in Subparagraph (b) of this Section.
b. PROPORTIONAL SHARE. The HMC proportional share for a year shall be determined
by taking the Net Sales (as defined below) sold by HMC and its affiliates over
the Net Sales sold by HMC and HMII and all of their affiliates for the preceding
fiscal year ended September 30th. The HMII proportional share for a year shall
be determined by taking the Net Sales sold by HMII and its affiliates over the
Net Sales sold by HMC and HMII and all of their affiliates for the preceding
fiscal year ended September 30th. For the purposes of this Section, "Net Sales"
shall mean the net sales of powder and particle processing product line products
and technologies, excluding the following:
i) Sales of products and technologies that are currently licensed
between HMC and HMII and all of their affiliates; and
ii) Inter-company sales between HMC and HMII and all of their
affiliates.
c. ACCOUNTING. Each party shall provide the other with detailed documents
supporting their Net Sales (as defined in Section 3.4 b) and their actual
Research Program costs incurred (as defined in Section 3.3 c.)
SECTION 3.5. REIMBURSEMENT. Upon receipt of the detailed documentation
supporting the Net Sales and the actual Research Program costs incurred by the
other party the Chief Financial Officers of the party will:
a. Confirm the calculation of the other party's proportional share of the
costs of the Research Program,
b. Monitor that the actual costs incurred by the other party are in line
with the
budgeted costs set forth in the annual operating plan (as described in
Section 3.3),
c. Compare the actual costs incurred by the other party to their
proportional share of the costs,
d. Reimburse and/or charge the other party for the amount of costs they
have either over or under incurred as compared to their proportional share,
and
e. Reimbursement shall be made within 60 days of notification by the other
party.
f. If the Chief Financial Officer of a party does not dispute the other
party's computation of the proportional share of costs within 12 months of
receipt of such calculation, the calculation will be deemed final.
ARTICLE IV
OWNERSHIP OF DEVELOPED INTANGIBLES
SECTION 4.1. LEGAL TITLE. Legal title to Developed Intangible Property
shall be in the name of the party that has responsibility for a given Territory.
SECTION 4.2. BENEFICIAL RIGHTS. HMC and HMII shall have the exclusive right
to use, license and assign the Developed Intangible Property for manufacturing,
marketing, and other purposes in its Territory, except as otherwise provided in
this Agreement.
ARTICLE V
EXCHANGE OF INFORMATION, CONFIDENTIALITY, AND TRANSFER
SECTION 5.1. KNOW-HOW AND IMPROVEMENTS. During the term of this Agreement,
each party shall promptly disclose to the other party its Know-How and inform
the other party of any information that it obtains or develops regarding Product
and Improvements.
SECTION 5.2. CONFIDENTIALITY. During the Term of this Agreement, and for a
period of 5 years from the date of expiration or termination of this Agreement,
each party shall treat this Agreement, Know-How, Intangible Property,
Improvements, and all information that it receives from the other party
(collectively, the "Confidential Matters") as confidential and shall not
disclose or use such Confidential Matters without the prior written consent of
such other party. Nothing in this Agreement shall prevent the disclosure by a
party to this Agreement or its employees of confidential information that:
a. Prior to the transmittal thereof to the party was of general public
knowledge;
b. Becomes, subsequent to the time of transmittal to the party, a matter
of general public knowledge otherwise than as a consequence of a
breach by the party of any obligation under this Agreement;
c. Is made public by the disclosing party;
d. Was in the possession of a party in documentary form prior to the time
of disclosure thereof to it by the disclosing party, and was held by
the party free of any obligation of confidence; or
e. Is received in good faith from a Third Party having the right to
disclose it.
ARTICLE VI
INDEMNIFICATION
SECTION 6.1. PRODUCT LIABILITY CLAIMS. The manufacturing party shall save,
hold harmless, and defend the other party from and against any loss, cost, or
expense, including reasonable attorney's fees, on account of or resulting from
any claim or action for product liability with respect to Developed Intangible
Property, Intangible Property, or other Confidential Matters owned,
developed, or held by such party. The manufacturing party shall defend any such
claim or action at its own expense provided that the other party cooperates with
the manufacturing party in defending any such claim or action.
SECTION 6.2. INTELLECTUAL PROPERTY CLAIMS. The developing party shall save,
hold harmless and defend the other party from and against any loss, cost, or
expense, including reasonable attorney's fees, on account of or resulting from
any claim or action for infringement of any existing or future patent, or
misappropriation of any trade secret or other intellectual property right with
respect to Developed Intangible Property, Intangible Property, or other
Confidential Matters owned, developed, or held by such party. The developing
party shall defend any such claim or action at its own expense provided that the
other party promptly notifies the developing party upon learning of any such
claim or action and cooperates with the developing party in defending any such
claim or action.
ARTICLE VII
TERMINATION
SECTION 7.1. TERMINATION BY CONSENT. This Agreement may be terminated at
any time by the unanimous written consent of the parties.
SECTION 7.2. TERMINATION FOR OTHER REASONS. This Agreement shall terminate
on the occurrence of any of the following terms:
a. The transfer of a substantial portion of the stock or assets of a party.
b. The default of a party with respect to any of its obligations under this
Agreement, and its failure to cure any such default within 30 days
following the date of notice to it from the other party identifying such
default.
c. Any act, determination, filing, judgment, declaration, notice,
appointment of receiver or trustee, failure to pay debts, or other
events under any law applicable to a party
indicating the insolvency or bankruptcy of the party.
d. The taking of any extraordinary governmental action, including, without
limitation, seizure or nationalization of assets, stock or other property
relating to a party.
SECTION 7.3. EFFECT OF TERMINATION OF THIS AGREEMENT. In the event of a
termination of this Agreement, the parties shall determine a winding-up
procedure that will have the effect of allowing each party to continue to enjoy
the rights granted to it hereunder with respect to Know-How, Improvements, and
Confidential Matter that might be in progress, relating to incomplete Research
Projects as of the effective date of such termination of this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. Any notice required to be sent hereunder will be
deemed delivered five ( 5) days after the date mailed or otherwise dispatched in
the mail, postage prepaid, by registered, express or certified mail, return
receipt requested, or by a recognized private courier, to any party at the
address listed above, or such other address of which any party may so notify the
other. Notice will also be deemed given on the date notice is faxed to the other
party.
SECTION 8.2. FORCE MAJEURE. If, by reason of acts of God, natural events,
accidents, war, government controls or any cause beyond control of any party,
performance is prevented, then in such event performance by all parties
hereunder shall be excused or deferred, as appropriate, until the effects of
such intervening cause have ended. A party has the right to terminate if a Force
Majeure event remains if effect for more than ninety (90) days.
SECTION 8.3. ASSIGNMENT. This Agreement may not be assigned in whole or in
part by either party without the written consent of the other party, which such
consent should not be
unreasonably withheld.
SECTION 8.4. ENTIRE AGREEMENT; AMENDMENT: This Agreement states the entire
agreement between the parties. No modification or amendment of this Agreement
shall be made except by an instrument in writing signed by all parties.
SECTION 8.5. REMEDIES CUMULATIVE. The remedies of the parties under this
Agreement are cumulative and shall not exclude any other remedies to which the
party may be lawfully entitled.
SECTION 8.6. FURTHER ASSURANCES. Each party hereby covenants and agrees
that it shall execute and deliver such deeds and other documents as may be
required to implement any of the provisions of this Agreement.
SECTION 8.7. NO WAIVER. The failure of any party to enforce any provision
of this Agreement shall not be deemed a waiver of that or any other provision of
this Agreement.
SECTION 8.8. CAPTIONS. Captions of paragraphs contained in this Agreement
are inserted only as a matter of convenience and for reference, and in no way
define, limit, extend, or describe the scope of this Agreement or the intent of
any provision hereof.
SECTION 8.9. COUNTERPARTS. This Agreement may be executed in multiple
copies, each of which shall for all purposes constitute an Agreement, binding on
the parties, and each partner hereby covenants and agrees to execute all
duplicates or replacement counterparts of this Agreement as may be required.
SECTION 8.10 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the United States.
SECTION 8.11 SEVERABILITY. In the event any provision, clause or obligation
stated herein is held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity
or enforceability of the remainder hereof.
SECTION 8.12. COSTS AND EXPENSES. Unless otherwise provided in this
Agreement, each party shall bear all fees and expenses incurred in performing
its obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the date first written above by their duly authorized officers.
Hosokawa Micron Corporation
/s/ Xxxxxx Xxxxxxxx
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[SIGNATURE]
[NAME AND TITLE]
XXXXXX XXXXXXXX, PRESIDENT
Hosokawa Micron International, Inc.
/s/ Xxxx Xxxx
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[SIGNATURE]
[NAME AND TITLE]
XXXX XXXX, PRESIDENT
EXHIBIT A
RESEARCH PROJECTS
EXHIBIT B
EXCLUDED RESEARCH PROJECTS
