Exhibit 10.11 Certain
portions of this
Exhibit have been
omitted and filed
separately with
the Securities and
Exchange Commission
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superseded hereby.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
5
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.
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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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