Exhibit 10.9 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 RUSSELL-STANLEY CORPORATION
230 HALF MILE ROAD
RED BANK, NEW JERSEY 07701
UNITED STATES OF AMERICA
hereinafter referred to as "RUSSELL-STANLEY"
KNOW HOW AND PATENT
LICENSING AGREEMENT
PREAMBLE
MAUSER possesses several years of experience and knowledge in the manufacture
and marketing of blown plastic containers made of thermoplastic synthetic
materials. MAUSER has developed its own machines, appliances and molds for the
production of such containers.
The experience for the manufacture of blown plastic containers, as developed by
MAUSER, relates in particular to:
- - the processing of plastics
- - the industrial design of blown containers
- - the design of production plants and equipment
- - selling and marketing, e.g. the special points relating to this market of
plastic packagings, the relevant selection of suitable plastic containers
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 containers which comply with the requirements called
for under international transport and packing regulations (especially
concerning dangerous products)
- - testing procedures for the operation of plastic containers
- - quality control
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- - possibilities of exchange of experience on the occasion of MAUSER Know How
Conferences
RUSSELL-STANLEY intends to manufacture and market in the United States of
America plastic container of the types according to the MAUSER PATENT RIGHTS and
the MAUSER KNOW HOW, all as defined in Article I hereof.
Therefore, the contracting parties agree as follows:
ARTICLE 1
LICENSED ARTICLE AND KNOW HOW
LICENSED ARTICLE 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 United States Letters Patent No.
4,177,934.
This Patent is the contractual PATENT RIGHT.
ARTICLE 2
USE OF TRADEMARKS
RUSSELL-STANLEY has the right to use the MAUSER trademark: No. 634.252 for the
LICENSED ARTICLES.
"MAUSER" may be used on the LICENSED ARTICLES by RUSSELL-STANLEY only in
connection with RUSSELL-STANLEY's own name and not as a company name.
The permission to use the trademark extends for the lifetime of the Agreement.
However, it can be cancelled at half year's notice to the end of every calendar
year.
In order to protect the reputation of MAUSER and MAUSER's rights in and to the
Trademarks, RUSSELL-STANLEY 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. RUSSELL-STANLEY also agrees that MAUSER shall have the right at
any time on not less than two days prior written notice during ordinary business
hours to inspect the premises and facilities of RUSSELL-STANLEY, 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.
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ARTICLE 3
CONTRACTUAL TERRITORY
TERRITORY means the United States of America and its territories and
possessions.
ARTICLE 4
LICENSE GRANT AND TRANSMISSION OF KNOW HOW
1. MAUSER hereby grants to RUSSELL-STANLEY a non-exclusive license to
manufacture LICENSED ARTICLES in RUSSELL-STANLEY's plants in the TERRITORY
and to sell empty LICENSED ARTICLES during the life of this Agreement in the
TERRITORY in accordance with the PATENT RIGHT and the KNOW HOW.
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 declares that the KNOW HOW and the PATENT RIGHT to the best knowledge
of MAUSER do not infringe upon the rights of third parties with respect to
the manufacture of the LICENSED ARTICLE.
3. The transmission of KNOW HOW in the TERRITORY shall be limited to the
present business premises of RUSSELL-STANLEY or any relocation thereof:
Rancho Cucamonga, California; Houston, Texas; Romeoville, Illinois; Reserve,
Louisiana; Nitro, West Virginia; Camden, New Jersey. In case of
establishment of a new location, RUSSELL-STANLEY shall pay a lump sum
charge, the amount of which is to be negotiated in good faith to compensate
MAUSER for its technical assistance in connection with the start up of said
new location.
4. RUSSELL-STANLEY is not authorized to grant sublicenses under the PATENT
RIGHT or to pass the MAUSER KNOW HOW to third parties.
ARTICLE 5
TECHNICAL ASSISTANCE
1. MAUSER will provide RUSSELL-STANLEY 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
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of average qualifications to produce the LICENSED ARTICLES after a
reasonable start-up time.
2. MAUSER will furnish RUSSELL-STANLEY with all presently existing documents,
plans and drawings required for the production, use and distribution of the
LICENSED ARTICLES. All documents, plans and drawings made available in
accordance with this Agreement must not be used by RUSSELL-STANLEY for
purposes other than the execution of this Agreement.
ARTICLE 6
TRAINING OF SPECIALIST STAFF
1. MAUSER undertakes to acquaint specialists of RUSSELL-STANLEY on MAUSER's
production premises with the manufacture and use of the LICENSED ARTICLES.
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 instructions 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 RUSSELL-STANLEY
to be instructed; and
- - the lodging, boarding, liability and insurance of the specialists.
3. The contracting parties agree that all expenses directly incurred by
personnel of RUSSELL-STANLEY during the training courses, in particular
travel and daily expenses and salaries, will always be at RUSSELL-STANLEY's
charge. However, expenses and costs for MAUSER personnel for the training
and instruction of personnel of RUSSELL-STANLEY will be borne by MAUSER.
Should MAUSER, however, at the request of RUSSELL-STANLEY send specialists
to The United States of America, the travel and daily expense and salaries
for such specialists will be borne by RUSSELL-STANLEY.
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ARTICLE 7
SECRECY
RUSSELL-STANLEY is under strict obligation to keep secret the documents received
from MAUSER and the KNOW HOW transmitted by MAUSER from the commencement of
negotiations of this Agreement and 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 RUSSELL-STANLEY or (b) which RUSSELL-STANLEY receives from a third
party who is legally entitled to such information and to communicate it to
RUSSELL-STANLEY. RUSSELL-STANLEY undertakes to take all precautionary measures
necessary for the maintenance of such secrecy (also for their employees).
ARTICLE 8
KNOW HOW FEES AND ROYALTIES
For LICENSED ARTICLES manufactured under this Agreement RUSSELL-STANLEY shall
pay to MAUSER until 31.12.1996 a combined royalty and KNOW HOW fee of **** of
the net invoice value of all LICENSED ARTICLES manufactured or sold by
RUSSELL-STANLEY under the authority of this Agreement.
Starting from January 1st, 1997 the combined royalty and KNOW HOW fee will be
**** of the net invoice value per LICENSED ARTICLE.
The net invoice value shall be deemed to be the sales price billed by
RUSSELL-STANLEY after deduction of taxes on sales, and/or turnover and/or the
added value, costs for packaging, transport and insurance, credits and returns
and customery trade discounts. Where material is supplied free of charge, its
current value shall be added to the sales price.
If taxes are payable in the United States of America on the KNOW HOW fee,
RUSSELL-STANLEY shall be responsible for the payment of such taxes and shall
remit MAUSER the net amount due to MAUSER after deduction of such taxes.
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RUSSELL-STANLEY shall observe the Double Taxation Agreement between the United
States of America and the Federal Republic of Germany when deducting such taxes
and shall furnish MAUSER with all receipts issued for such taxes deducted by
RUSSELL-STANLEY and paid to the revenue authorities in the TERRITORY.
ARTICLE 9
KNOW HOW FEE ACCOUNTS AND PAYMENTS
1. RUSSELL-STANLEY shall maintain complete records at its Corporate
Headquarters relating to licensed production and sales. Within 30 (thirty)
days after the end of each calendar quarter of this Agreement up to and
including the end of the calendar quarter following termination of this
Agreement RUSSELL-STANLEY shall render a written report to MAUSER listing
the total net sales of the LICENSED ARTICLE produced and sold by
RUSSELL-STANLEY during such calendar quarter 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 3 (three) days
prior written notice at its own expense and not more than once in any
calendar quarter to have the pertinent records of RUSSELL-STANLEY 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 RUSSELL-STANLEY will not be disclosed to
MAUSER and further provided that in the event MAUSER's accountants' report
is not accepted by RUSSELL-STANLEY or acceptable adjustments made thereon,
confidential information may be disclosed as necessary to MAUSER and its
attorneys.
ARTICLE 10
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
contract year will end on December 31, 1995. The first contractual period
will be five years.
2. After December 31, 1999, this Agreement will be tacitly renewed by periods
of one year each, unless notice of cancellation by registered letter is
given by either contracting party not later than six months before expiry of
any contract year. All notices given pursuant to this Article 10.2 shall be
in writing and delivered by facsimile transmission and confirmed by
international overnight
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delivery service, delivery receipt requested, or the functional equivalent
thereof at the time of notice. Decisive date for the observance of the
period of notice shall be the date of receipt of the notice.
3. MAUSER has the right to cancel this Agreement by written notice of
cancellation and with immediate effect for any of the following, if
RUSSELL-STANLEY is in default of a material obligation resulting from this
Agreement, especially with the payment of the KNOW HOW and License fees, or
has violated material obligations under the Agreement and has not remedied
such violation within three months after receipt of a corresponding notice
by MAUSER to do so,
RUSSELL-STANLEY undertakes measures which are a material breach of trust
and/or breach of secrecy,
one of MAUSER's or MAUSER's subsidiaries' competitors acquires a
participation in the company of RUSSELL-STANLEY without MAUSER's prior
written consent and thus obtains a possibility of inspection or influence
or control of RUSSELL-STANLEY.
4. RUSSELL-STANLEY has the right to cancel this Agreement by written notice of
cancellation and with immediate effect, if
- - MAUSER does not fulfill material obligations under this Agreement within
three months after having received a corresponding notice to do so,
5. In the event of any adjudication of bankruptcy, assignment for the benefit
of creditors or levy of execution directly involving RUSSELL STANLEY or
MAUSER, the other shall have the immediate right to terminate this Agreement
by giving written notice to the other party hereto,
6. In the event of a premature termination of this Agreement by cancellation
all rights of RUSSELL-STANLEY 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
RUSSELL-STANLEY loses its rights resulting from this Agreement.
7. Within one month after expiry or termination of this Agreement for any cause
RUSSELL-STANLEY shall return all documents and drawings received from
MAUSER. Upon the termination of this Agreement all rights of the contracting
parties from this Agreement will cease, with the exception of those provided
in its Article 7 (Secrecy).
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8. Should this Agreement expire in accordance with paragraph 10.2 hereof,
RUSSELL-STANLEY shall have the absolute non-exclusive right to use the Know
How forever thereafter free of any and all royalties and fees.
9. RUSSELL STANLEY may only transfer its rights under this Agreement in
connection with a transfer of all or substantially all of the assets of
the company or its plastic business or the sale of more than 51% of its
common voting stock. For any such sale MAUSER's prior written consent is
required unless the transferee is an affiliate of RUSSELL-STANLEY or a
company not in the plastic drum business. If the proposed transferee of
any of the aforementioned assets or stock of the company is an international
competitor of MAUSER, MAUSER shall have the right to withhold its consent
to the transfer of RUSSELL STANLEY's rights under this Agreement, otherwise
the written consent of MAUSER shall not be unreasonably withheld.
ARTICLE 11
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.
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 PATENT RIGHT which falls under the patent law
of the United States of America.
3. Any and all disputes arising from or in connection with the execution,
delivery, performance or interpretation and construction of this Agreement
shall be submitted to binding arbitration before a single arbitrator in
Zurich, Switzerland, in accordance with the rules and regulations of the
International Chamber of Commerce except that where such rules and
regulations differ from the provisions of this Article 12.3 the latter shall
govern. There shall be no discovery, the arbitrator shall be selected within
30 days of the service of the written demand for arbitration, the first
hearing shall be conducted within 60 days of the service and shall continue
day to day until completed. The decision shall be rendered within 15
business days from the date of the last hearing, shall set forth the
decision and the reasons for same and shall be unappealable except for fraud
or bias. The loser shall pay all the administrative costs of the arbitration
and the winners costs including without limitation attorneys' fees, experts'
fees, reasonable travel and living costs. The winning party shall
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have the right to seek confirmation of the arbitrator's award in any of
competent jurisdiction over the losing party without objection.
ARTICLE 12
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 reasonably intended, had they
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.
ARTICLE 13
The parties to this Agreement are aware that their contractual relationship has
been renewed by a group of agreements signed today, namely
1. KNOW HOW and LICENSING AGREEMENT L-Ring USA;
2. LICENSING AGREEMENT L-RING Canada;
3. KNOW HOW and LICENSING AGREEMENT Open Top USA and
4. LICENSING AGREEMENT L-Ring USA between RUSSELL-STANLEY CORP. and HUNTER DRUM
LTD.
5. Release of any rights and obligations under the L-RING AGREEMENT of January
1, 1995.
Bruhl, 26.06.1995 Red Bank,
------------------------- -----------------------------
MAUSER-WERKE RUSSELL-STANLEY
G M B H CORPORATION
By /s/Dr. Burgdorf /s/Effnert By /s/John Priesing
------------------ ------------- -------------------------------------
Dr. Burgdorf Effnert John Priesing
(Chief Exec. Officer) (Director) (President)
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