Exhibit 10.11
Certain portions of
this Exhibit have
been omitted and
filed separately
pursuant to a request
for confidential
treatment. The Symbol
"****" has been
inserted in place of
the portions so
omitted.
Between MAUSER-WERKE GMBH
SCHILDGESSTR. 71-163
50321 BRUHL
FEDERAL REPUBLIC OF GERMANY
- - hereinafter referred to as "MAUSER"
and HUNTER DRUMS LIMITED
5420 NORTH SERVICE ROAD
BURLINGTON, ONTARIO L7L 6C7
CANADA
hereinafter referred to as HUNTER DRUMS
the following
KNOW HOW AND PATENT
LICENSING AGREEMENT
With this new Agreement all previous Agreements relating to the subject matter
of the new Agreement and including the KNOW HOW AND PATENT LICENSE AGREEMENT
dated 1, March, 1980 between the parties, letters, etc. become invalid and are
superseded hereby.
PREAMBLE
MAUSER and HUNTER DRUMS have, for approximately fifteen (15) years cooperated to
develop markets for LICENSED ARTICLES, shared technical experience and generally
enjoyed a mutually beneficial relationship, and:
MAUSER possess several years of experience and knowledge in the manufacture and
marketing of blown plastic container made of thermoplastic synthetic materials.
MAUSER have developed their own machines, appliances and moulds for the
production of such containers.
The experience for the manufacture of blown plastic container, as developed by
MAUSER, relates in particular to:
- - the processing of plastic materials
- - the industrial design of blown plastic container
- - the design of production plants and equipment
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- - selling and marketing, e.g. the special points relating to this market
for plastic packagings, the relevant selection of suitable plastic
container for particular products, information on previously used and
new fields of application and also publicity to this market as
developed by MAUSER
- - the design of plastic container which comply with the requirements
called for under international transport and packing regulations
(especially concerning dangerous products)
- - testing procedures for the operation of plastic container
- - quality control
- - possibilities of exchange of experience on the occasion of MAUSER KNOW
HOW Conferences
HUNTER DRUMS also possess many years of experience and knowledge in the
manufacture and marketing of blow molded plastic containers made of
thermoplastic synthetic materials.
HUNTER DRUMS intends to continue to manufacture in Canada LICENSED ARTICLES
according to the MAUSER PATENT RIGHTS and the MAUSER KNOW HOW, all as defined in
Article 1 hereof.
Therefore, the contracting parties agree as follows:
ARTICLE 1
LICENSED ARTICLES, PATENT RIGHTS AND KNOW HOW
LICENSED ARTICLES refers to lid-type or open-top plastic drums made with or
otherwise involving any of the KNOW HOW made available by MAUSER under this
Agreement and made in accordance with the Canadian patents/patent applications
as defined in Article 1 hereof.
PATENT RIGHTS ore the following patents and patent applications owned by MAUSER
as well as any reissue, continuation, continuation-in-part or divisional patent
arising therefrom relating to LICENSED ARTICLES.
================== ========== =========== ============= =========== ==================
APPLICATION NO. PATENT NO. FILING DATE ISSUEING DATE EXPIRY DATE TITLE
================== ========== =========== ============= =========== ==================
1.093.015 06.01.1981 06.01.1998 Standard
lid-type drum
1.323.316 19.10.1993 19.10.2010 Footring
PCT/EP95/03586 12.09.1995 12.09.2015 Lid-type drum
(Vanguard design)
Ser. No. 2,134,879 12.05.1993 12.05.2013 HOT Drum
================== ========== =========== ============= =========== ==================
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PATENT RIGHTS are limited to the LICENSED ARTICLES because some special features
of these patents are also utilized with other drum designs, such as but not
limited to closed head drums.
KNOW HOW means all of the KNOW HOW in the possession of MAUSER relating to the
LICENSED ARTICLES, and in particular, but not limited to, technical data,
drawings, photographs, engineering and/or market test reports, models, specimen,
samples and/or other information relating to the LICENSED ARTICLES of this
Agreement.
ARTICLE 2
USE OF TRADEMARKS
HUNTER DRUMS shall mark all LICENSED ARTICLES with such patent Nos. and/or
trademark as MAUSER may reasonably request. HUNTER DRUMS shall have the
non-exclusive right during the term of this Agreement and any renewals or
extensions thereof to use the following Canadian trademark owned by MAUSER: No.
213/46564
[TRADEMARK OF MAUSER]
in which event HUNTER DRUMS shall indicate on the goods an (R), in a circle or
"Reg. CA Pat. Off." after the trademark.
1. The name MAUSER (trademark only - not company name) may be used on the
LICENSED ARTICLE produced by HUNTER DRUMS only in connection with
HUNTER DRUMS' own name.
2. In order to protect the reputation of MAUSER and MAUSER's rights in and
to the Trademarks, HUNTER DRUMS agrees that all LICENSED ARTICLES sold
by it and marked with any of MAUSER's Trademarks shall meet the highest
quality standards set by MAUSER. HUNTER DRUMS also agrees that MAUSER
shall have the right at any time during ordinary business hours to
inspect the premises and facilities of HUNTER DRUMS, to inspect the
operations being conducted therein and to inspect and take samples of
the LICENSED ARTICLES manufactured, assembled and/or sold by it and
marked with any of MAUSER's Trademarks, in reasonable quantities, to
enable MAUSER to verify that its quality standards are being met at all
times.
ARTICLE 3
CONTRACTUAL TERRITORY
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CONTRACTUAL TERRITORY means the Dominion of Canada and its Provinces and
Territories.
ARTICLE 4
LICENSE GRANT AND TRANSMISSION OF KNOW HOW
1. MAUSER hereby grants to HUNTER DRUMS an exclusive license in Canada to
manufacture LICENSED ARTICLES and to sell empty LICENSED ARTICLES
during the life of this Agreement in the Territory. In case of standard
lid-type drums (Canadian Patent No. 1,093,015 - US Patent No.
4,177,934), HUNTER DRUMS is allowed to manufacture and sell those drums
in the US as well. In case of Canada the LICENSE is exclusive, in case
of the US the LICENSE is non-exclusive.
2. Except for the delivery of documents and for assistance provided in the
Agreement, MAUSER will not assume any liability for the risk of
technical production, operation and commercial use of the LICENSED
ARTICLE described in Article 1.
MAUSER declare that the KNOW HOW and the contractual PATENT RIGHTS to
the best knowledge of MAUSER do not infringe upon the rights of third
parties with respect to the manufacture of the LICENSED ARTICLE.
Possible future patents with regard to the LICENSED ARTICLE are not
included in this contract but MAUSER is prepared to discuss the use of
such patents by HUNTER DRUMS in case such need should arise. In any
event MAUSER shall not unreasonably withhold the addition and use of
any new patents relating to the LICENSED ARTICLE, and shall give HUNTER
DRUMS the right of first refusal on any patents in the Territory for
the LICENSED ARTICLE.
3. HUNTER DRUMS is not authorized to grant sublicenses or to pass the
MAUSER KNOW HOW to third parties except as required in the normal
course of business.
ARTICLE 5
TECHNICAL ASSISTANCE
1. MAUSER will provide HUNTER DRUMS during the life of this Agreement with
all information, experience and methods, present and future, including
special techniques and production secrets that are required to enable
technicians of average qualification to produce the LICENSED ARTICLES
referred to in this Agreement after a reasonable start-up time.
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2. MAUSER will furnish HUNTER DRUMS with all documents, plans and drawings
required for the production, use and distribution of the LICENSED
ARTICLES described in this Agreement. All documents, plans and drawings
made available in accordance with this Agreement must not be used for
purposes other than the execution of this Agreement.
ARTICLE 6
TRAINING OF SPECIALIST STAFF
1. MAUSER undertakes to acquaint specialists of HUNTER DRUMS on MAUSER
production premises with the manufacture and use of the LICENSED
ARTICLE described in this Agreement. In supplementation of any plans
and drawings that may have been made available, suitable specialists of
MAUSER will give further verbal information, explanations and normal
additional instruction for a better understanding of the KNOW HOW.
2. Details of the technical instructions shall be fixed by separate
agreements between the contracting parties. Their agreements shall
relate in particular to the regulation of
- - the number and duration of instruction courses
- - the number and technical qualification of the specialists of HUNTER
DRUMS to be instructed
- - the lodging, boarding, liability and insurance of the specialists
3. The contracting parties agree that all expenses directly incurred by
personnel of HUNTER DRUMS during the training courses, in particular
travel and daily expenses and salaries, will always be at HUNTER DRUMS'
charge. However, expenses and cost for MAUSER personnel for the
training and instruction of personnel of HUNTER DRUMS will be borne by
MAUSER. Should MAUSER, however, on the request of HUNTER DRUMS send
specialists to Canada, the travel and daily expenses and salaries for
such specialists will be borne by HUNTER DRUMS.
ARTICLE 7
SECRECY
HUNTER DRUMS is under strict obligation to keep secret the documents received
from MAUSER and the KNOW HOW transmitted by MAUSER, except as required during
the normal course of business, from the commencement of negotiations of this
Agreement and
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during its life. Such obligation to secrecy shall continue even after
termination of this Agreement for any cause except for information (a) which
enters the public domain without the fault or negligence of HUNTER DRUMS or (b)
which HUNTER DRUMS receives from a third party who is legally entitled to such
information and to communicate it to HUNTER DRUMS. HUNTER DRUMS undertakes to
take all precautionary measures necessary for the maintenance of such secrecy
(also for their employees).
ARTICLE 8
KNOW HOW FEES AND ROYALTIES
HUNTER DRUMS shall pay to MAUSER for the lid-type drum (VANGUARD design) and for
the HOT style Open Head Drum as a continuing fee or royalty **** and for the
standard lid-type drum **** of the net invoice value per container for LICENSED
ARTICLES manufactured under this Agreement.
The net invoice value shall be deemed to be the sales price billed by HUNTER
DRUMS after deduction of taxes on sales, and/for turnover and/for the added
value, duties, brokerage charges, cost for transport and insurance, credits and
returns and customary trade discounts. Where material is supplied free of
charge, its current value shall be added to the sales price.
With respect to LICENSED ARTICLES produced by HUNTER DRUMS for its own use or
the use of its affiliated companies the current market price is to be taken as
the basis for calculation of the continuing fee or royalty.
Both license and know-how fees to remain constant over the six years' period.
If taxes are payable in Canada on the KNOW HOW fee/royalty, HUNTER DRUMS shall
be responsible for the payment of such taxes and shall remit to MAUSER the net
amount due to MAUSER after deduction of such taxes.
HUNTER DRUM shall observe the Double Taxation Agreement between Canada and the
Federal Republic of Germany when deducting such taxes and shall furnish MAUSER
with all receipts issued for such taxes deducted by HUNTER DRUMS and paid to the
revenue authorities in the Contractual Territory.
6
ARTICLE 9
KNOW HOW FEE ACCOUNTS AND PAYMENTS
1. HUNTER DRUMS shall maintain complete records at its Corporate
Headquarters relating to licensed production and sales for a period of
at least 3 (three) years from the date they occurred. Within 60 (sixty)
days after the end of each calendar half of this Agreement up to and
including the end of the calendar half following termination of this
Agreement HUNTER DRUMS shall render a written report to MAUSER listing
the total net sales of the LICENSED ARTICLE produced and sold by HUNTER
DRUMS during such calendar half and the royalty due thereon. Each
report so rendered shall be accompanied by the required royalty
payment.
2. MAUSER shall have the right during normal business hours on 5 (five)
days prior written notice at its own expense and not more than once in
any calendar year to have the pertinent records of HUNTER DRUMS
examined by an independent certified public accountant for the purpose
of verifying the reports rendered hereunder, provided, however, any
report of the accountant to MAUSER shall be made in such a manner that
all information properly deemed confidential by HUNTER DRUMS will not
be disclosed to MAUSER and further provided that in the event MAUSER's
accountants' report is not accepted by HUNTER DRUMS or acceptable
adjustments made thereon, confidential information may be disclosed as
necessary to MAUSER and its attorneys.
3. All reports supplied to MAUSER by HUNTER DRUMS or any independent
public accountant shall be kept confidential by MAUSER.
ARTICLE 10
INFRINGEMENT
1. In the event that any unlicensed third party infringes any of the
PATENT RIGHTS, affecting the LICENSED ARTICLES by the commercial use,
manufacture and/or sale of the LICENSED ARTICLES in the TERRITORY and
after written notification to MAUSER of the name of the infringer and
place and circumstances of the infringement and delivery of a sample of
the infringing product to MAUSER and after determination that such
infringement requires action because of the economic extent or impact
thereof, ****.
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shall MAUSER be required to prosecute more than one legal action at any
given time. Should action be taken, there shall be no settlement of any
legal action without the prior written consent of both MAUSER and
HUNTER to such settlement.
The costs and expenses and the proceeds of such legal action
(preparation and execution) shall be shared equally by MAUSER and
HUNTER DRUMS. MAUSER's share of such cost shall be restricted to and
derived from a fund of one-third (1/3) of license and royalty fees
actually received from HUNTER DRUMS after commencement of legal action
until its termination.
In the event a PATENT RIGHT is held to be invalid or has expired, this
Agreement may be terminated at the option of HUNTER DRUMS and/or HUNTER
DRUMS shall not be obligated to pay future license fees to MAUSER
provided the LICENSED ARTICLE produced and sold by HUNTER DRUMS is not
covered by any other valid Canadian patent held by MAUSER.
Should HUNTER DRUMS, in particular in order to continue to receive
Technical Assistance under Art. 5 and Training of Specialist Staff
under Art. 6. elect to continue this Agreement, royalties and fees
shall be continuously payable for the KNOW-HOW in an amount equal to
**** of the royalties and fees otherwise specified hereunder.
ARTICLE 11
LIFE OF AGREEMENT
1. This Agreement will come into effect on being signed by the latest
contracting party commencing with January 1, 1995. Therefore, the first
contractual year will end on December 31, 1995. The first contractual
period will be six years.
2. After December 31, 2000, this Agreement shall be tacitly renewed by
periods of 5 (five) years each, unless notice of cancellation by
registered letter is given by either contracting party not later than
six months before expiry of any contractual period. Decisive date for
the observance of the period of notice shall be the date of mail
delivery of the registered letter.
3. MAUSER have the right to cancel this Agreement by written notice of
cancellation and with immediate effect for any of the following, if
- - HUNTER DRUMS is in default with an obligation resulting from this
Agreement, especially with the payment of the KNOW HOW
8
and License fees, or has violated his obligations under the Agreement
and did not remedy such default or violation within three months after
receipt of a corresponding notice by MAUSER to do so,
- - HUNTER DRUMS undertakes measures which have to be regarded as breach of
trust and/or breach of secrecy,
- - insolvency or bankruptcy proceedings are applied for or ordered for the
property of HUNTER DRUMS,
- - ****
4. HUNTER DRUMS has the right to cancel this Agreement with immediate
effect for an important reason, particularly if
- - MAUSER do not fulfill their obligations under this Agreement within
three months after having received a corresponding notice to do so,
- - insolvency or bankruptcy proceedings are applied for or ordered for the
property of MAUSER,
- - MAUSER undertakes measures which have to be regarded as breach of trust
and/or breach of secrecy,
5. In the event of a premature termination of this Agreement by
cancellation all rights of HUNTER DRUMS arising from this Agreement
will cease by the latest two months after receipt of the notice of
cancellation. The contractual KNOW HOW fees shall be payable until that
date, when HUNTER DRUMS loses all rights resulting from this Agreement.
6. Within one month after expiry or termination of this Agreement for any
cause HUNTER DRUMS shall return all documents and drawings received
from MAUSER. Upon the termination of this Agreement all rights of the
contracting parties from this Agreement shall cease, with the exception
of those provided in its Article 7 (Secrecy).
ARTICLE 12
APPLICABLE LAW, JURISDICTION
1. This Agreement has been drawn up in English. Any amendments and
additions to this Agreement must be made in writing and signed by both
parties to become valid.
9
2. The contracting parties have agreed that as a whole and in all its
individual provisions this Agreement is subject to German substantive
and procedural law, except for the contractual patent rights which fall
under Canadian patent law.
3. Court of jurisdiction for all disputes arising from this Agreement
shall be the District Court in Dusseldorf (Chamber for Patent
Disputes), FRG.
4. Place of performance for all obligations under this Agreement for both
contracting parties shall be Cologne, FRG.
ARTICLE 13
SUBSTITUTION CLAUSE
Should any individual provision of this Agreement be or become void, or should a
gap be ascertained in this Agreement, the validity of the other provisions shall
not be affected thereby. As a substitute for the provision, which is void or
inoperative, or for the purpose of filling the gap, an appropriate arrangement
shall be valid, which, if it is legally possible, shall be as close as possible
to what the contracting parties would have intended, had they reasonably
considered that point. If a provision is void or inoperative owing to measures
or outputs or times (periods or time limits) indicated therein, this shall be
replaced by a measure which is as close as legally possible to the provision in
question.
Bruhl, 29.07.1996 Burlington, 31-07-1996
____________________________ ___________________________
MAUSER-WERKE HUNTER DRUMS LIMITED
G M B H
By /s/Dr. Schonwald /s/Effnert By /s/Michael W. Hunter
_________________________________ _____________________________________
Dr. Schonwald Effnert
(Chief Exec. Officer) (Director)
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