Exhibit 10.23
LICENSE AGREEMENT
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AGREEMENT entered into the 16th day of April, 1987 by and between
GALLY S.A. a Limited Company, having its Registered Offices at 26 Boulevard
Louise Michel - 92232 GENNEVILLIERS, FRANCE (hereinafter called "Gallay") and
HUNTER DRUMS LIMITED, having its offices at 1121 Pioneer Road - BURLINGTON -
ONTARIO L7M 1K5, CANADA (hereinafter called "Licensee").
W I T N E S S E T H
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WHEREAS, Gallay S.A. of Paris, France has developed, perfected and
is using a new Triple Seam Process for steel drums or containers, possesses
necessary technical information and confidential know-how in the production
of such containers and is the owner of United States Letters Patent Reissue
No. 29 307.
WHEREAS, Licensee is desirous of obtaining such information and
confidential know-how in the manufacture of such metal containers and a non-
exclusive license for the use thereof and a non-exclusive license under the
aforesaid patents for the manufacture and sale of metal containers.
NOW, THEREFORE, in consideration of the premises, the mutual
undertakings and obligations of the parties hereto, it is hereby agreed as
follows:
I. DEFINITIONS
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The term "Products" as used herein shall mean steel containers in
accordance with Gallay's process and confidential know-how and United States
Letters Patent Reissue No. 29 307.
The term "Production Line" as used herein is defined as a line to
manufacture Products, said line having one welding machine at the beginning
thereof and at least one seaming machine at the end thereof.
II. LICENSE
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(a) Subject to the provisions and conditions herein, Gallay hereby
grants to Licensee a non-exclusive, non-transferable and non-divisible right
to use the confidential information and know-how, as defined in Article III
hereof, as used in the manufacture of Products.
(b) Subject to the provisions and conditions herein, Gally also
grants to Licensee a non-exclusive, non-transferable and non-divisible
license under United States Letters Patent Reissue No. 29 307 thereof.
III. KNOW-HOW AND TECHNICAL ASSISTANCE
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As soon as practicable, after execution of this Agreement and
payment of the fee hereinafter set forth in Article IV, Gallay will provide
to Licensee necessary technical information, procedures, technical skills and
drawings (in manuals, in English and in the metric system) for the
manufacture of the Products. Gallay will also provide at no cost to the
licensee, all technical information, procedures, technical skills and
drawings relevant to any future developments and improvements which pertain
to the manufacture of the Products covered by this Agreement.
IV. FEES AND ROYALTIES
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(a) Licensee agrees to pay to Gallay a fee in the amount of 9,200
US $ per year for a period of five years for each Production Line
established and equipped by Licensee for the manufacture of Products. The
total fee being 46,000 US $ and payable as outlined above, will represent the
total license fee and will guarantee the licensee use of all know-how and
technical assistance as outlined in Article III hereof, indefinitely. The
first payment shall be due and payable at the time of execution of this
Agreement.
(b) The fee paid hereunder, shall not be refundable to Licensee
under any circumstances.
(c) The payment set forth in paragraph (a) above shall be
attributable to the disclosure of information and confidential know-how and
trade secrets.
V. PAYMENTS AND RECORDS
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(a) Licensee agrees that Gallay shall have the right to select an
independent auditor, acceptable to Licensee, which such auditor shall report
to Gallay the number of Production Lines for Products.
(b) In the event that errors are found by the auditor, Licensee
agrees to pay the full cost of auditing and any other fees and costs
encountered by Gallay for any proceedings involving failure to pay the agreed
amount herein requested.
(c) Payment to Gallay by Licensee under the provisions set forth
in Article IV above are to be made without any deductions whatsoever for any
tax or other reasons. If, because of this clause, the Licensee is assessed
any penalty or withholding fee by the Canadian Government then Gallay shall
accept reduced payments of the license fee to offset such penalty or will
reimburse the Licensee for the total amount of the assessment, whichever is
applicable.
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VI. PATENT INFRINGEMENT AND PATENT ENFORCEMENT
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(A) In the event that Licensee is sued by another party for
infringement of a United States Patent or of a Canadian patent as a direct
result of using the process for manufacture of Products licensed hereunder,
Licensee shall inform Gallay of any notice of such suit and Gallay agrees to
consult with Licensee as to the reasons for said suit and the defense
thereof. Should such suit be brought for infringement solely as a result of
use of the process licensed hereunder, Gallay agrees to defend such suit and
pay damages, provided however, that Gallay's total liability shall not exceed
fifty percent (50%) of the fee paid by and received from Licensee. Should
such suit be brought for infringement against Licensee using other or
additional processes, equipment, tools, etc., not specifically required in
the process herein disclosed by Gallay, the Licensee agrees that Gallay shall
have no liability or responsibility for such infringement.
(b) Licensee shall have the right to participate in defense of any
such infringement suit provided, however, that Licensee shall pay its full
own costs of such participation.
VII. MISCELLANEOUS
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(a) Licensee agrees to use its best efforts to promote and sell
Products and, in so doing, to adhere to the quality of the Products
contemporarily produced by Gallay. For this purpose, Licensee shall permit
Gallay's technicians and employees to examine Licensee's licensed Products
and Production Line therefore upon request with reasonable notice.
(b) Licensee agrees to keep confidential all information,
materials, manuals, drawings, data and trade secrets in any form received
from Gallay pursuant to this Agreement with notice of confidentiality and
Licensee further agrees to take all reasonable steps to keep confidential all
such information in whatever disclosure necessarily may be made to third
parties during and after this Agreement, or until such information is
otherwise publicly known.
(c) In the event that Licensee requires parts, materials or tools
from a third party supplier thereof, and which utilize confidential
information and know-how of Gallay, Licensee agrees to obtain from such
supplier an agreement to keep confidential in the form attached hereto as
Exhibit 1.
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(d) It is understood that Licensee may produce Products in Canada
which thereafter are exported from Canada to other countries of the world
including the United States. In such event Gallay would take no action
against Licensee or a customer of Licensee for enforcement of a patent of
Gallay, if any, that may exist in any other country which would prevent or in
any way interfere with the importation into such other countries of such
products.
(e) This License Agreement is personal to Licensee and may not be
assigned or transferred by Licensee except as part of sale or assignment of
Licensee's entire business in Products.
(f) Notices under this Agreement shall be in writing and shall be
sufficient if sent by registered mail, addressed to the last known address of
the other party.
(g) This Agreement shall be construed in accordance with the laws
of France.
(h) This Agreement shall expire at the time of expiration of the
patent of Gallay licensed hereunder.
(Gallay) (Licensee)
HUNTER DRUMS LIMITED,
By /s/ Pierre-Henri Gallay Per /s/ M.W. Hunter
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M.W. Hunter, President
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EXHIBIT 1
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In consideration of (Licensee's) order for the manufacture of seaming rolls
and other tooling, which order is hereby acknowledged, (Supplier) agrees to
maintain in confidence all information and data contained in or on or
disclosed by the specifications and drawing numbers furnished to (Supplier)
in connection therewith, and (Supplier) agrees not to disclose to another or
use, either directly or indirectly, for its own benefit said confidential
information, data or specifications, until such information otherwise becomes
public through acts or others than (Supplier).
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