tion, we have found out that in the case following figures are obtained, it is worth to materialize the plan. Charging stock 3,000 Bbls. (477 kiloliters) per day Kettleman Hill's crude mentioned in our letter of October 23th. Yield per day: Cracked gasoline (E. P. 175° C.; O. N. plus 82) above 33 vol. %; From this gas we expect― Isooctane, 32 kiloliters; Regular polymer (E. P. 175° C.), 90 kiloliters. We are thanking for your trouble in advance, JAPAN GASOLINE COMPANY, LTD. /s/ FUKIO HORIE, Chief Engineer. EXHIBIT No. 446 [Letter from Fukio Horie, Chief Engineer, Japan Gasoline Company, to Universal Oil Products Company dated February 15, 1938] JAPAN GASOLINE COMPANY, LTD. (Nippon Kihatsuyu Kabushiki Kaisha) UCHISAIWAICHO, TOKYO UNIVERSAL OIL PRODUCTS Co. TOKYO, Feb. 15, 1938. Chicago, Ill., U. S. A. Attention: Mr. R. E. Nagel. DEAR SIRS: This is to to confirm the telegrams exchanged between us, yours of Feb. 14th and ours of Feb. 15th, as per copies herewith enclosed. Upon receipt of your cable of Feb. 14th we are very sorry to find that our cable of Feb. 12th gave you somewhat confusion. We only ment [sic] to inform you in that cable rather complicated situation of 5 refineries from whom we planned to gather gases for our new enterprise of catalytic polymerization (please refer to our letter of March 17th, 1937). These refineries are up to certain extent under strict Government supervision, and any extensions or new enterprise require Government permission and gasoline is allotted thus by quota, under the circumstances it is quite possible that some of them want to get extension permission on the ground of manufacturing aviation gasoline. As we referred in our letter of yesterday's date, we are not successful to let these refiners cooperate together in supplying gases, and we cabled you on Feb. 12th inst. to put off the matter for the time being. This telegram therefore has nothing to do with our other enquirs of Mitsui, Mitsubishi, and others (such as our letter of Jan. 14th, 1938), and we shall be obliged if you will take prompt attention to design the same. Yours very truly, [Letter from Masao Saneyoshi, President, Japan Gasoline Company to Hiram J. Halle, President, Universal Oil Products Company, dated July 5, 1937] DEAR MR. HALLE: I think there are many matters I would like to talk with you personally, but owing to my other engagements here, it will be impossible for me to see you for a while. Therefore I venture to explain informally the matters which are in my mind at present, and hope this will help you in some way to understand the circumstances better. RE CAPTAIN YANAGIWARE He had returned here and was appointed to the Department Head of the Fuel Bureau, which position is important as the link between the naval and civic requirements of the liquid fuels. Upon his special request I called upon him the other day and had more than two hours' conversation. He made me understand that he was talking as my friend and not as an official, therefore I think his opinion was without reserve. He was very deeply impressed with your staff's and their works in Riverside Laboratory and he talked very highly of Dr. Egloff. He said U. O. P. is the only firm in the States who make such fundamental investigation regarding very [sic] aspect of oil and congratulated me as the only Japanese who has such personal as well as business connection with the best research institute of oils in the world. From what we talked, I gather that he is willing to help us to become an authoritative consulting engineering firm, through whom domestic oil companies can obtain the art of your latest improvements and inventions, when we act more positively in this direction (which were intending to do, since the beginning of this year). In keeping close personal touch with him, I think I can develop his idea as one of our specialities. EE FISCHER PROCESS From the various communications, I believe you have already noticed that at the back of Mitsui, there is strong governmental power to push the enterprize. The Miike plant will be only a test plant and I think they are considering several plants at other convenient places in Japan Proper, capacities totalling 300,000 tons annual production. Up to now, they were planning to produce gasoline from Kogasin by the pipestill and mix benzol to raise octane value. But lately there appeared strong opinion that this policy would be very harmful for the future of Fischer products, because people may talk that Fischer gasoline is so poor that it could be sold only af er mixing benzol. As the result of this opinion, they are eagerly waiting your advice regarding the best method of operation to reform all Kogasin. I found the name of Dr. Egloff has such influence among the engineers in oil circles, that as our sales purpose sometimes it might be necessary to use his signature as the origin of the authority. For instance, Mr. Takei wanted Dr. Egloff's opinion as to the best method of reforming. I expect Mitsui will send you Kogasin and ask you the actual experiments, after they receive your advice mentioned above and when they are satisfied with the result, they will speedily construct the plant. When I had personal talk with Mr. Kii of Mitsui Mining Co., I mentioned the polymerization of Gasol as experiment. Mr. Kii seemed very much interested and if the construction cost is not expensive they might construct one for experimental purpose, disregarding the high operating cost resulting from the small capacity of the plant. When Mr. Takei came over to discuss the matters of reforming, he confirmed Mr. Kii's request and asked us the approximate estimate of this plan.. RE AVIATION GASOLINE PLANT At first I was rather afraid of the attitude of various refineries who will be the supplier of the charging gases to our contemplated polymerization plant. But I found the authority to be very much in favor of the plan and they are offering various assitances to the scheme. I found if we can prove technically the advantage of the process, the realization of the plan will be unexpectedly soon. RE MR. SAKURAI I regret to inform you that after all, I could not manage to employ him. I had noticed his eccentricity for a long while, but owing to his engineering talents, I tolerated it. But when he became so dissatisfied with me and with the firm, that he expressed his desire to resign the post, I had to consent. I have heard him enter Mitsubishi Kakoki Kaisha (Chemical Machineries Co.), and hoped he would become more level minded, but I hear from various quarters, he is still using bitter words against us and discrediting us, which is a pity. I hope I shall write more about my plans about the future of the business, and wish you are kind enough to give me your personal help. Yours sincerely, EXHIBIT No. 448 MASAO SANEYOSHI, ' [Copy of memorandum from Joseph G. Alther, Vice President, Universal Oil Products Company to Hiram J. Halle, President, Universal Oil Products Company, dated October 13, 1938] To: Halle, New York. OCTOBER 13, 1938. On Tuesday of this week Mr. Rokura Shinohara, member of the Japanese House of Parliament, spent an interesting day with us. I had an extended discussion with him regarding our company, its operations, and especially its processes. I explained to him the original deal which was made with the Japan Gasoline Company years ago, which gave them the rights to pyrolytic cracking, and that recently Mr. Saneyoshi was here negotiating with you to acquire the rights to all of our other patents. I mentioned to him that it was difficult for us to understand the present delay in concluding this deal which involves enormous benefits to Japan for merely a nominal sum. I emphasized the importance of this deal which should go beyond merely the Japan Gasoline Co. or the parties thereto. I also mentioned to him that we are in a position where our Government could indicate some displeasure in our making these important processes of ours available to Japan. Therefore, it behooves them to lend their suport in urging Japan Gasoline Co. to consummate the deal without further delay. He seemed intensely interested in this phase of the discussion. He spent the afternoon at Riverside. As Prof. Horie was here, I had him sit in part of the meeting. He also went to Riverside with Mr. Saneyoshi. EXHIBIT No. 449 [Three memoranda of Tentative understandings entered into between Japan Gasoline Company and Universal Oil Products Company dated August 19, 1938 AUGUST 19, 1938. MEMORANDUM OF TENTATIVE UNDERSTANDINGS BETWEEN MR. SANEYOSHI, REPRESENTING JAPAN GASOLINE COMPANY, AND MR. HALLE, REPRESENTING UNIVERSAL OIL PRODUCTS COMPANY, AS BASIS FOR AGREEMENT 1. Japan Gasoline Company will have rights under Universal's selective phosphoric acid process, and I. H. P.'s (International Hydrogenation Patents Company's) hot sulphuric acid process and low pressure hydrogenation process, and all information required for the methods of producing hydrogen and catalysts used in connection with the phosphoric acid and the low pressure hydrogenation process, for the production of not to exceed 300 barrels daily capacity iso-octane. 2. Japan Gasoline Company will pay $100,000 United States funds to Universal on Mr. Saneyoshi's return to Japan and consummation of contracts between him and Mitsubishi Oil Company and Nippon Oil Company, but not later than October 31, 1938; $100,000 United States funds to be paid to Universal against delivery by Universal to Japan Gasoline Company of plans, specifications and information for the construction and operation of the first plant for the production and hydrogenation of iso-octane; $100.000 United States funds to be paid to Universal on completion and test of said first plant. Japan Gasoline Company will arrange for the guarantee of this third payment by Mitsui & Company or Mitusbishi Shoji Company in the United States. 3. Japan Gasoline Company shall have the rights for increased capacity above 300 barrels on the basis of payment of $1,000 per barrel daily capacity in excess of 300 barrels. 4. If and when a total of $750,000 shall have been paid, including the $300,000 presently to be paid, thereafter no further payments shall be made, and Japan Gasoline Company will have unlimited and exclusive rights subject only to any other then existing intervening rights granted by Universal and I. H. P. and to rights heretofore granted by Universal, if any, and existing commitments of I. H. P. at the date of this Understanding. 5. Japan Gasoline Company shall have the option until December 31, 1938, to obtain unlimited and exclusive rights in the fields identified in paragraph 1 (subject only to rights heretofore granted by Universal, if any, and existing commitments of I. H. P. at the date of this Understanding), all on payment of $600,000 total, including the $300,000 of present commitment and $100,000 additional to be paid at the time of payment of the second $100,000 specified in paragraph 2, and $200,000 additional to be paid at the time of payment of the third $100,000 specified in paragraph 2. 6. One year's supply for Japan Gasoline Company and its licensees of catalysts for the polymerization and the low-pressure hydrogenation processes shall be purchased by Japan Gasoline Company from Universal or I. H. P. at the lowest prevailing rates. Thereafter Japan Gasoline Company shall have the rights of manufacturing the phosphoric acid catalyst, upon the payment of royalty of 10¢ per pound to Universal, for their own use and the use of their licensees under this agreement but without rights of export or sale to others. 7. Japan Gasoline Company shall make available and give all information to Universal and I. H. P. required to enable them to take out patents outside the territory of the Understanding on inventions by Japan Gasoline Company and its licensees, and their employees, constituting improvements in the processes_in respect of which rights are currently granted hereunder by Universal or I. H. P.; and Universal and I. H. P. shall have the right at all reasonable times to inspect the plants erected by Japan Gasoline Company or any of its licensees and Japan Gasoline Company shall have the opportunity of inspecting plants using such processes in the United States and such other countries insofar as Universal and I. H. P. are able to do so. 8. All expenses in the furnishing of plans, designs, and specifications, and for engineering service for construction and operation, shall be charged for by Universal on behalf of Universal and I. H. P. at their most favorable rates and to be paid to Universal in United States funds. 9. All necessary information and technical assistance shall be available to Japan Gasoline Company for the successful carrying out of the processes, to be made available by Universal at Chicago and by I. H. P. at The Hague. 10. If Universal or I. H. P. acquires rights under any patents or processes of others, in respect of which either shall be obligated to make payment to others, such rights shall be available to Japan Gasoline Company and its licensees upon payment to Universal for account of Universal or I. H. P. in United States funds, to the extent that Japan Gasoline Company or any of its licensees shall avail themselves of such rights, at the rate required to be paid by Universal or I. H. P. or of the part thereof allocable to the territory of this understanding. 11. This understanding covers the same territory covered by the agreement dated July 19, 1928, between Universal and Hisashi Sekiguchi and also includes Manchukuo where the rights of Japan Gasoline hereunder shall be nonexclusive, provided, however, that neither Universal nor I. H. P. will license directly or indirectly any Manchukuo group or company effectively owned or controlled in Japan with Japanese capital. 12. All of the payments hereunder shall be net to Universal at Chicago, Illinois, U. S. A., or elsewhere as Universal may designate, without deduction for any tax or other governmental charge now or hereafter imposed, levied, or assessed in respect thereof, except by the Government of the United States of America. 13. This understanding is subject to approval by the Boards of Directors of all parties. (Initialed) H. J. H. M. S. FIRST SUPPLEMENTAL MEMORANDUM OF TENTATIVE UNDERSTANDING BETWEEN MR. SANEYOSHI, REPRESENTING JAPAN GASOLINE COMPANY, AND MR. HALLE, REPRESENTING UNIVERSAL OIL PRODUCTS COMPANY, AS BASIS FOR AGREEMENT AUGUST 19, 1938. Referring to the principal Memorandum of Tentative Understandings, etc., initialed by the parties today, if Japan Gasoline Company shall exercise the option granted to it under paragraph 5 thereof, it shall have the further option until December 31, 1938, to acquire rights under all of Universal's processes in the entire petroleum field (whether solid, liquid, vapor, or gas) specifically including (but without limitation of the generality of the foregoing) Dehydrogenation, Isomerization, Cyclization, and Alkylation. The provisions of paragraphs 7, 8, 9, 10, 11, 12, and 13 of said principal Memorandum shall then apply to all such fields. In the event that Japan Gasoline Company shall exercise said option, it will pay $400,000 United States funds, $100,000 to be paid upon the exercise of this option, $100,000 at the time of delivery of plans and specifications for a plant for the dehydrogenation process or any of the other processes called for in the fields herein covered, and $200,000 at the time of completion and test of such plant. SECOND SUPPLEMENTAL MEMORANDUM OF TENTATIVE UNDERSTANDINGS BETWEEN MR. SANEYOSHI, REPRESENTING JAPAN GASOLINE COMPANY, AND MR. HALLE, REPRESENTING UNIVERSAL OIL PRODUCTS COMPANY, AS BASIS FOR AGREEMENT AUGUST 19, 1938. In the event Japan Gasoline Company shall obligate itself under the principal Memorandum of Tentative Understandings, dated August 19, 1938, only to the extent of $300,000 for the rights to be conveyed for that amount as therein specified, then and thereafter Japan Gasoline Company shall in addition to such rights have the nonexclusive right to license the cracking and treating processes defined in the agreement of July 19, 1928, between Universal and Sekiguchi in Manchukuo at rates not lower than Universal's prevailing scheduled rates current or paid-up and shall account to and promptly pay Universal in United States funds, without deduction or withholding of any taxes, one-half of the proceeds under each such license agreement, Japan Gasoline Company retaining for its services the remaining one-half of the sums and considerations received for each such license. Japan Gasoline Company's obligation so to account and pay Universal shall terminate upon the exercise by Japan Gasoline Company of the option contained in First Supplemental Memorandum of Tentative Understandings, etc., of even date herewith. (Initialed) H. J. M. M. S. EXHIBIT No. 450 [Printer's copy of unsigned Formal Agreement between Universal Oil Products Co. and Japan Gasoline Company, dated October 31, 1938] 8705. Dec. 11, 1939. Schmitt. I. LICENSING GRANTS 1. Universal hereby grants to Japan Gasoline an unlimited and exclusive license in Japan and an unlimited but nonexclusive license in Manchukuo, under Universal's patent rights for the full term thereof, for its own use together with the right to grant sublicenses, subject to the rights heretofore granted by Universal under its patent rights as hereinafter set forth in Article IV hereof. 2. Universal covenants that it will not directly or indirectly license its patent rights in Manchukuo to any companies which shall be actually effectively owned or controlled by Japanese or Manchukuo capital of which ownership or control Japan Gasoline shall upon request furnish evidence satisfactory to Universal. 3. If Universal acquires rights under any patent rights of others in Japan and Manchukuo in respect of which it shall be obligated to make payment to others, for the use thereof, such rights shall be made available to Japan Gasoline upon payment therefor to or on the order of Universal at the rate payable by Universal. II. ENGINEERING SERVICES AND EXCHANGE OF INFORMATION 1. Japan Gasoline shall provide itself and its sublicensees with engineering services in connection with the patent rights, but Universal, upon request from |