EXHIBIT NO. 10.3
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MANUFACTURING AGREEMENT
BETWEEN
INFINITI PAINT CO., INC.
AND
TROPICAL ASPHALT PRODUCTS CORPORATION
THIS MANUFACTURING AGREEMENT (hereinafter "Agreement") is entered on
September 1, 2001 (hereinafter "Effective Date") between INFINITI PAINT CO.,
INC. (hereinafter "INFINITI") having an address at 0000 Xxxxx Xxxxxxxxx Xxxx,
Xxxxx X-0, Xxxxxxx Xxxxx, Xxxxxxx 00000, and TROPICAL ASPHALT PRODUCTS
CORPORATION (hereinafter "TROPICAL"), having an address at 0000 Xxxxx 00xx
Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000.
RECITALS
WHEREAS, at the time of execution of this Agreement, INFINITI is a wholly-
owned subsidiary of Urecoats Industries Inc.;
WHEREAS, INFINITI has developed and is the owner of certain proprietary
information relating to several latex paints, as well as chemical compositions,
formulas and recipes for latex paints (hereinafter collectively referred to as
"INFINITI INFORMATION");
WHEREAS, TROPICAL provides manufacturing services for latex paints and in
the past has manufactured latex paints for INFINITI based on the INFINITI
INFORMATION and/or additional proprietary information of INFINITI;
WHEREAS, INFINITI presently utilizes and desires to continue to use
TROPICAL's services for manufacturing latex paints based on the INFINITI
INFORMATION and/or additional proprietary information of INFINITI; (hereinafter
"Product" or "Products");
NOW, THEREFORE, in consideration of the mutual promises contained herein
the parties agree as follows:
TERMS AND CONDITIONS
1. DEFINITIONS.
1.1 RECITALS. The above RECITALS are true and correct and form a part of
this Agreement.
1.2 "INFINITI Know-How" means the proprietary techniques, inventions,
trade secrets, recipes, formulas, practices, methods, knowledge, designs, skill
and experience relating to latex paints disclosed to TROPICAL under this
Agreement.
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1.3 "INFINITI Technology" means the INFINITI Know-How and INFINITI
INFORMATION.
1.4 "IMPROVEMENTS" means any improvements, discoveries, developments,
modifications or derivative works, whether or not patentable.
1.5 "INTELLECTUAL PROPERTY RIGHTS" means all current and future trade
secrets, copyrights, patents and other patent rights, trademark rights, service
xxxx rights, mask work rights and any and all other intellectual property or
proprietary rights now known or hereafter recognized in any jurisdiction.
1.6 "Products" means latex paints manufactured by TROPICAL for INFINITI
under the terms of this agreement, including Products based on the INFINITI
Technology.
1.7 "SPECIFICATIONS" means any specifications for the Products provided
to TROPICAL by INFINITI.
2. DEVELOPMENT AND PURCHASE OF PRODUCTS.
2.1 TROPICAL will manufacture, exclusively for INFINITI, Products based
on the SPECIFICATIONS, the INFINITI Technology and/or any other information
provided by INFINITI.
2.2 PURCHASE OF PRODUCTS. TROPICAL agrees to sell the Products to
INFINITI on an exclusive basis and to accept purchase orders for the Products
from INFINITI on an exclusive basis under the terms and conditions of this
Agreement. In the event, and only in the event, TROPICAL is unable to meet the
production demands of INFINITI as to a specific product or TROPICAL is no longer
able to maintain the quality requirements as required by INFINITI as to a
specific product, then, and only in either or both of such events and after
having first actually receive from INFINITI a thirty (30) day prior written
notice to the effect of either or both of the foregoing and TROPICAL not having
materially cured such production demand or quality requirement, may INFINITI
manufacture or procure from other sources like or comparable Products.
2.3 TRADEMARK RIGHTS. TROPICAL acknowledges INFINITI's trademark rights
with respect to the Products and agrees that it will not use the trademark(s)
and trade names of INFINITI on any products or for any other purpose, other than
the Products ordered by and delivered to INFINITI. TROPICAL is hereby granted a
limited trademark license with respect to the INFINITI trademarks solely for the
above-mentioned use. All other use by TROPICAL is prohibited. This license shall
terminate on the earlier of termination of this Agreement, or failure of
TROPICAL to maintain the quality requirements required by INFINITI in accordance
with paragraph 2.2 above. TROPICAL shall obtain no rights to or interest of any
kind in any of INFINITI's trademarks or trade names other than the limited right
to use set out above.
3. PURCHASE ORDERS.
3.1 LEADTIME. TROPICAL agrees to deliver manufactured Products to
INFINITI within ten (10) calendar days or seven (7) working days of receiving an
order by INFINITI.
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3.2 PURCHASE ORDERS. Purchases shall be initiated by INFINITI's written
or electronically dispatched purchase orders referencing at least the quantity
and specific Product. All purchase orders for Products placed by INFINITI
hereunder shall be governed by the terms and conditions of this Agreement. In
the event of a conflict between the provisions of this Agreement and the terms
and conditions of INFINITI's purchase order or TROPICAL's acknowledgment or
other written communications, the provisions of this Agreement shall prevail and
any such conflicting terms or conditions are hereby rejected.
3.3 ISSUANCE AND ACCEPTANCE. TROPICAL shall notify INFINITI of receipt of
a purchase order by telephone or facsimile within two (2) business days after
receipt of INFINITI's purchase order. The written confirmation shall also
identify the Purchase Price. Orders are deemed accepted upon verbal confirmation
of receipt of facsimile by TROPICAL.
3.4 CANCELLATION. INFINITI may cancel without liability any purchase
order upon written notice to TROPICAL only if TROPICAL has not begun
manufacturing the Products requested in the specific purchase order.
3.5 RESCHEDULING. INFINITI shall be entitled to reschedule delivery of
Products or quantities of Product scheduled for a particular delivery at any
time for a particular purchase order. TROPICAL shall accommodate a request to
expedite the ship date, if reasonably able to do so.
4. DELIVERY TERMS.
4.1 DELIVERY POINT. Unless specified in writing by INFINITI to be a
different location, the delivery point for the Products shall be at INFINITI's
place of business at 0000 Xxxxx Xxxxxxxxx Xxxx, Xxxxx X-0, Xxxxxxx Xxxxx,
Xxxxxxx 00000.
4.2 SHIPPING. TROPICAL may ship partial orders provided TROPICAL notifies
INFINITI and INFINITI agrees prior to shipment. TROPICAL shall personally
deliver or select the best available carrier on a commercially reasonable basis,
in TROPICAL'S sole discretion, for timely delivery of the Products. TROPICAL
shall be responsible for all insurance and shipping charges for the Products
until such Products reach their designated Delivery Point, after which risk of
loss shall pass to INFINITI.
4.3 PACKING INSTRUCTIONS. All Products shall be packaged and prepared for
shipment in a reasonable manner specified by INFINITI. INFINITI will provide
TROPICAL labels to be placed by TROPICAL on the containers. Each shipment shall
be accompanied by a packing slip which will include INFINITI's Product
names/trademarks and product numbers, purchase order number, quantity shipped,
raw materials costs and container costs.
4.4 DELIVERY DELAYS. TROPICAL shall immediately notify INFINITI in
writing of any anticipated delay in meeting the delivery schedule, stating the
reasons for the delay. If TROPICAL's delivery fails to meet the committed
delivery schedule due to the action or inaction of TROPICAL, then TROPICAL, upon
INFINITI's request, shall expedite the routing at TROPICAL's expense. However,
if TROPICAL's delivery fails to meet the schedule by in excess of ten (10) days,
then INFINITI, at its sole option and without penalty or any additional expense,
may (i) require TROPICAL to expedite the routing by the fastest available
commercial carrier; (ii) reschedule the delivery; or (iii) cancel the delivery
and/or order, without liability, in whole or in part.
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4.5 EARLY DELIVERY. TROPICAL shall not deliver any Products prior to the
scheduled delivery date, without INFINITI's written consent.
4.6 IN-STOCK MINIMUM. TROPICAL agrees to use commercially reasonable
efforts to carry in "safety stock" a minimum (as determined by the parties based
on the latest monthly forecast) of completed Products and raw materials and
containers to accommodate any unforeseen or expedited demand on the part of
INFINITI.
4.7 COUNTRY OF MANUFACTURER. TROPICAL represents and warrants that the
Products are manufactured in the United States. TROPICAL shall promptly advise
INFINITI at least ninety (90) days prior to a change in or addition to any such
manufacturing locations.
5. PRICES.
5.1 PURCHASE PRICE. The price charge by TROPICAL to INFINITI for
manufacture of Products shall be cost ("Cost" is defined as raw material cost
and subsequent direct labor to produce the Product(s) and F.O.B. INFINITI) plus
**(confidential percentage information omitted) percent (**%) (hereinafter
"Purchase Price"). TROPICAL agrees to deliver the Products to INFINITI's
specified location. The Purchase Price includes all costs, fees, expenses and
charges for the delivery of the Products by TROPICAL to INFINITI's specified
location, including, but not limited to, costs of transportation, insurance,
taxes, customs, duties, landing, storage and handling fees, and/or documents or
certificates required for exportation or importation.
5.2 INVOICING AND PAYMENT. Invoices shall be due and payable within
thirty (30) days after the date of actual receipt of the Products or TROPICAL's
invoice, whichever is later.
5.3 LATE PAYMENT. Any payment not made within forty-five (45) days after
it is due shall bear interest at a rate equal to one percent (1%) per month on
the unpaid amounts from time to time outstanding from the date on which portions
of such amounts became due and owing until payment thereof in full.
6. ACCEPTANCE
If any of the Products delivered hereunder fails to conform to the
Specifications or with the parties' agreed-upon standards, INFINITI shall notify
TROPICAL of such failure, the parties will promptly discuss means to resolve any
such failure, and TROPICAL shall have up to three (3) days to deliver to
INFINITI conforming Products. If TROPICAL fails to deliver conforming Products
within such three (3) day period, absent separate agreement, INFINITI shall have
the right, without liability, to either cancel this aAgreement and/or purchase
orders for that Product and any other Products or require expedited shipping of
the conforming Products at TROPICAL's sole cost.
7. REGULATORY AGENCY COMPLIANCE.
All Products delivered hereunder, shall comply in all material respects
with any regulatory agency requirements (e.g., Product Safety, Environmental).
TROPICAL, at its sole expense, will obtain all required agency certifications
and approvals for the Products. TROPICAL will further ensure that the Product
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remain compliant with those regulatory agency requirements. INFINITI agrees to
work with TROPICAL in obtaining these certifications and approvals. TROPICAL
represents and warrants that in all respects, the manufacture and sale of the
Products comply and will throughout the term of this Agreement comply with all
applicable environmental laws, regulations and other regulatory requirements.
If INFINITI discovers a breach of any of TROPICAL's representations and
warranties in this Section 8, it shall immediately notify TROPICAL of such
breach in writing, explaining the circumstances constituting the breach and
identifying the Product(s) or portion(s) of the Product involved. Further,
TROPICAL shall defend, indemnify and hold harmless INFINITI and its officers,
directors, employees, agents, representatives, successors and assigns from any
liabilities, losses, demands, claims or judgments arising from and third party
claims regarding the breach of any of TROPICAL's representations set forth in
this Section 8; provided that INFINITI provides TROPICAL (i) prompt written
notice of the existence of such claims; (ii) sole control over the defense and
settlement of any such claim; and (iii) assistance in the defense or settlement
of any such claim upon TROPICAL's reasonable request and at TROPICAL's expense.
8. PRODUCT CHANGES.
In the event that INFINITI finds or becomes aware of a situation which in
its reasonable opinion necessitates or would benefit from a change of
material(s), formula change, process change, etc. for any of the Products,
INFINITI shall provide written notice to TROPICAL of such change at least
twenty (20) days prior to the placing of the first purchase order for
Products(s) having such change and agreed to purchase from TROPICAL the balance
of the safety stock of that particular Product.
9. LICENSE GRANTS; OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS.
9.1 INFINITI LICENSE GRANT. Subject to the terms and conditions of this
Agreement, INFINITI grants to TROPICAL a non-exclusive, non-transferable,
royalty-free license, without the right of sublicense, to use the INFINITI
Technology to manufacture the Products. All other rights not expressly granted
in this Agreement are expressly reserved.
9.2 INTELLECTUAL PROPERTY RIGHTS OWNERSHIP. The parties agree that all
Intellectual Property Rights conceived, created, made, developed, invented,
reduced to practice or first fixed in a tangible medium of expression during the
term of this Agreement for the Products shall be exclusively and solely owned by
INFINITI. All intellectual property rights for all contributions, enhancements,
improvements, etc. made by TROPICAL to the INFINITI Technology for the Products
shall owned exclusively and solely by INFINITI. TROPICAL agrees to cooperate
with INFINITI with respect to the filing of documents, including patent
applications, declarations and assignments, necessary to fully protect and
reflect INFINITI ownership of all Intellectual Property Rights (hereinafter
"IPR") in and for the Products.
9.3 INFRINGEMENT BY THIRD PARTIES. If TROPICAL learns of any possible
infringement or misappropriation of INFINITI's IPR, it shall immediately give
notice thereof to INFINITI. TROPICAL agrees to cooperate with the INFINITI's
efforts to seek legal remedies for such infringements and misappropriations at
INFINITI'S expense.
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10. WARRANTY.
10.1 PRODUCT WARRANTY.
10.1.1 WARRANTY. TROPICAL warrants that all Products sold by
TROPICAL to INFINITI under the terms of this Agreement will be materially free
from defects in workmanship and materials and substantially conform to the
Specifications and any other agreed upon standards/requirements under normal use
and service. If any Product or portion thereof contains a material defect in
materials or workmanship, or otherwise fails to conform to the Specifications or
other standards or requirements, TROPICAL shall at its expense correct any such
defect by promptly and expeditiously replacing such defective Product. TROPICAL
shall waive any expedite charges to INFINITI in order to effect earliest
replacement of such defective Product(s).
10.1.2 RETURN OF PRODUCTS. INFINITI will promptly notify TROPICAL
in writing of any nonconforming or defective Product. Such notification shall
include trademark/product name, serial numbers and reason for nonconformance.
11. CONFIDENTIALITY.
11.1 CONFIDENTIAL INFORMATION. Information that is transmitted by one
party to the other in connection with the performance or implementation of this
Agreement and, if in written form, is marked "confidential" or "proprietary" or
with a similar legend by the disclosing party before being furnished to the
other, or if disclosed orally or visually is identified as such prior to
disclosure and summarized, in writing, by the disclosing party to the receiving
party within thirty (30) days shall be deemed to be confidential information of
the disclosing party. Each party agrees that it shall use the same degree of
care and means that it utilizes to protect its own information of a similar
nature, but in any event not less than reasonable care and means, to prevent the
unauthorized use or the disclosure of such confidential information to third
parties. The confidential information may be disclosed only to employees or
contractors of a recipient with a "need to know" who are instructed and agree in
writing not to disclose the confidential information and not to use the
confidential information for any purpose, except as set forth herein. Recipient
shall have appropriate written agreements with any such employees or contractors
sufficient to allow the recipient to comply with the provisions of this
Agreement. Each of the parties further agrees to make no use of such
confidential information except as expressly permitted by this Agreement.
11.2 EXCEPTIONS. The confidential information of a party shall not
include and the foregoing obligation shall not apply to data or information
which: (i) was in the public domain at the time it was disclosed or falls within
the public domain, except through the fault of the receiving party; (ii) was
disclosed after written approval of the disclosing party; (iii) becomes known to
the receiving party from a source other than the disclosing party without breach
of this Agreement by the receiving party; or (iv) is furnished to a third party
by the disclosing party without an obligation of confidentiality. Nothing in
this Agreement shall prevent the receiving party from disclosing confidential
information to the extent the receiving party is legally compelled to do so by
any governmental investigative or judicial agency pursuant to proceedings over
which such agency has jurisdiction; provided, however, that prior to any such
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disclosure, the receiving party shall (a) assert the confidential nature of the
confidential information to the agency; (b) immediately notify the disclosing
party in writing of the agency's order or request to disclose; and (c) cooperate
fully with the disclosing party in protecting against any such disclosure and/or
obtaining a protective order narrowing the scope of the compelled disclosure and
protecting its confidentiality.
12. PUBLICITY.
TROPICAL shall not disclose, advertise, or publish the existence or the
terms or conditions of this Agreement, financial or otherwise, without the prior
written consent of INFINITI.
13. TERM AND TERMINATION.
13.1 COMMENCEMENT DATE. This Agreement commenced on the Effective Date.
13.2 TERMINATION FOR CAUSE. With the exception of the continuing
obligations, as set forth in Section 13.4, herein, either party shall have the
right to terminate this Agreement for cause as a result of:
13.2.1 The failure of the other party to perform any material
term or condition of this Agreement and to remedy such failure within thirty
(30) days after written notice of such failure given by the non-defaulting
party; or
13.2.2 The filing by or against the other party of a petition for
liquidation under the U.S. Bankruptcy Code or corresponding laws or procedures
of any applicable jurisdiction; or
13.2.3 The filing by or against the other party of any other
proceeding concerning bankruptcy, insolvency, dissolution, cessation of
operations, or the like by the other party. If such proceeding is involuntary
and is contested in good faith, this Agreement shall terminate only after the
passage of one hundred twenty (120) days without the dismissal of such
proceedings; or
13.2.4 The voluntary or involuntary execution upon; the
assignment or conveyance to a liquidating agent, trustee, mortgages or assignee
of whatever description; or the making of any judicial levy against a
substantial percentage of the other party's assets, for the benefit of its
creditors; or
13.2.5 The appointment of a receiver, keeper, liquidator or
custodian of whatever sort of description, for all or a substantial portion of
the other party's assets; or
13.2.6 The termination, dissolution, insolvency or failure in
business of the other party, the distribution of a substantial portion of its
assets, or its cessation to continue all or substantially all of its business
affairs.
13.3 TERMINATION WITHOUT CAUSE. Either party may terminate this
Agreement for any reason upon ninety (90) days written notice.
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13.4 RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION.
(A) PAYMENT. The termination of this Agreement, with or
without cause, shall in no way relieve either party from its obligations to pay
the other any sums accrued hereunder prior to such termination or expiration.
Any balance owed to TROPICAL by INFINITI shall be paid in full within forty five
(45) days of termination or expiration. Any set off against the balance owed to
TROPICAL from INFINITI shall be made in writing fifteen (15) days after
termintation or expiration.
(B) RETURN OF DOCUMENTATION AND CONFIDENTIAL INFORMATION.
Upon any termination of this Agreement, each party shall immediately return to
the other party all documentation, confidential information and any other
tangible items in its possession or under its control evidencing the know-how of
the other party.
(C) SURVIVAL. Notwithstanding the foregoing, Sections 1,
10.1, 11, and 13.4 shall survive any termination or expiration of this Agreement
for a period of five (5) years for purposes of protecting the confidentiality of
the INFINITI Technology and for any documents related to the Products.
(D) In the event of termination, TROPICAL agrees to delivery
all manufacturing documents, etc. for the Products to INFINITI within seven (7)
days from the date of termination to allow INFINITI to have a third party or
itself begin manufacturing of the Products.
14. MANUFACTURING RIGHTS.
14.1 NEW PRODUCTS. TROPICAL shall have the right of first refusal for
the manufacturing of any new products developed by INFINITI. However, this right
of first refusal is subject to and can be negated by TROPICAL's manufacturing
capabilities, quality assurances and operations, and pricing considerations.
15. GENERAL.
15.1 RELATIONSHIP OF THE PARTIES. Each of the parties shall at all times
during the term of this Agreement act as, and shall represent itself to be, an
independent contractor, and not an agent or employee of the other.
15.2 PAST DUE INVOICES. INFINITI agrees to bring its account with
TROPICAL in the following manner: $50,000.00 on or before September 10, 2001;
$75,000.00 on or before September 30, 2001; $30,000.00 on or before October 10,
2001; $20,000.00 on or before October 30, 2001, and $38,757.31 on or before
November 10, 2001.
15.3 ENTIRE AGREEMENT. This Agreement and Exhibits hereto are intended
as the complete, final and exclusive statement of the terms of the agreement
between the parties regarding the subject matter hereof and supersedes any and
all other prior or contemporaneous agreements or understandings, whether written
or oral, between them relating to the subject matter hereof. This Agreement may
not be modified except in writing executed by both parties.
15.4 NOTICES. Except for purchase orders and acknowledgments which may
be sent by normal carrier, all notices and communications hereunder are required
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to be sent to the address or facsimile number stated below (or such other
address or facsimile number as subsequently notified in writing to the other
party): (i) by facsimile with confirmation of transmission, (ii) personal same
or next day delivery or (iii) sent by commercial overnight courier with written
verification of delivery. All notices so given shall be deemed given upon the
earlier of receipt or three (3) days after dispatch.
Any notices sent to INFINITI hereunder should be sent to:
INFINITI PAINT CO., INC.
0000 Xxxxx Xxxxxxxxx Xxxx
Xxxxx X-0
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attn.: Xxxxx X. Xxxxxx
Fax No. (000) 000-0000
copy to: Xxxxx & XxXxxxx, P.A.
0000 Xxxx Xxxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, Esquire
Facsimile: (000) 000-0000
Any notices sent to TROPICAL hereunder should be sent to:
TROPICAL ASPHALT PRODUCTS CORPORATION
0000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxxxxx
Fax No. (000) 000-0000
15.5 WAIVER. A waiver of any default hereunder or of any of the terms
and conditions of this Agreement shall not be deemed to be a continuing waiver
or a waiver of any other default or of any other term or condition, but shall
apply solely to the instance to which such waiver is directed. The exercise of
any right or remedy provided in this Agreement shall be without prejudice to the
right to exercise any other right or remedy provided by law or equity, except as
expressly limited by this Agreement.
15.6 SEVERABILITY. In the event any provision of this Agreement is found
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of any of the remaining provisions shall not in any way be
affected or impaired.
15.7 ASSIGNMENT. TROPICAL may not assign or transfer this Agreement,
whether in whole or part, or any of its rights or obligations under this
Agreement without the prior written consent of INFINITI. INFINITI may not assign
or transfer this Agreement, whether in whole or part, or any of its rights or
obligations under this Agreement without the prior written consent of TROPICAL
other than to Urecoats Industries Inc., or a subsidiary or affiliate. Prior
written consent shall not unreasonably withheld. Any attempted assignment
without such written consent shall be null and void.
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15.8 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND ALL DISPUTES HEREUNDER SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF
FLORIDA. THE PARTIES HEREBY AGREE THAT THE STATE COURTS IN BROWARD COUNTY,
FLORIDA AND/OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
FLORIDA SHALL HAVE EXCLUSIVE JURISDICTION AND VENUE OVER ANY CONTROVERSIES,
PROCEEDINGS, OR DISPUTES IN CONNECTION WITH THIS AGREEMENT.
15.9 ATTORNEY'S FEES. In any action to enforce this Agreement, the
prevailing party shall be awarded all arbitration costs or courts costs and
reasonable attorneys' fees incurred, including such costs and attorneys' fees
incurred in enforcing and collecting any judgment.
15.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives effective as of the date first
above written.
INFINITI PAINT CO, INC. TROPICAL ASPHALT PRODUCTS CORP
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx Xxxxxxxxx
--------------------- --------------------------
Name: Xxxxxxx X. Xxxxxx Name: Xxxxxxx Xxxxxxxxx
Title: President Title: President
Date: 9/4/01 Date: 9-4-01
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