MANUFACTURING/LICENSING AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of January,
1994, by and between PolyChem Corporation, a Washington corporation ("PolyChem"
herein), and The Bullhide Liner Corporation, a Washington corporation
("Bullhide" herein).
RECITALS
A. PolyChem has developed a variety of polyurethane formulations and
products therefrom for use in the transportation industry as well as other
industries, which products currently include Bullhide 2000, Xxxxxxxx 0000,
Xxxxxxxx 600, Primer 350 and Bullhide Colorants; (referred to collectively
herein as "Technology").
B. PolyChem maintains manufacturing operations for the production of
the foregoing products, and continues to conduct research and development to
expand the applications of the Technology.
C. Bullhide operates a business which sell products manufactured by
PolyChem in the transportation industry, and desires to obtain an exclusive
license from PolyChem with respect to its products and Technology developed for
the transportation industry, and a non-exclusive license for products and
Technology developed and manufactured for other industries.
D. PolyChem is willing to grant the foregoing licenses, pursuant to the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the promises contained herein and
the mutual benefit to be derived herefrom, the parties hereto agree as follows:
1. Grant of Licenses by PolyChem. PolyChem hereby grants to Bullhide
the exclusive license to sell products manufactured by PolyChem for use in the
transportation industry, which shall include but be limited to trucks,
automobiles, boats, trains, planes, helicopters, shipping vessels and so forth.
This license shall apply to the United States, North America and the world.
PolyChem further grants to Bullhide the non-exclusive license to sell products
manufactured by PolyChem in other industries. The foregoing licenses are granted
pursuant to the terms and conditions set forth herein.
2. PolyChem to be Sole Manufacturing Source. Bullhide agrees to
purchase all of its polyurethane related products from PolyChem exclusively, and
not from any other manufacturer, provided that PolyChem can meet the
manufacturing requirements of Bullhide within a reasonable time frame. In
addition, Bullhide agrees to grant to PolyChem a first right of refusal to
develop and produce new products from related Technology as requested by
Bullhide, provided that said new
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products can be developed within a reasonable time frame. Any products developed
pursuant to this Right of First Refusal shall be manufactured exclusively for
Bullhide, as long as Bullhide continues to sell such products at reasonable
volumes.
3. Assignment to Franchisees. It is hereby acknowledged and agreed by
the parties, that Bullhide is in the process of establishing franchisees who
will sell similar products in different regions of the country and the world.
The license agreements contained herein shall be assignable by Bullhide to its
franchisees, provided that said franchisees shall specifically be required to be
bound by the terms of the this Agreement in all respects. Bullhide shall be
responsible for assuring that its franchisees comply with the terms of this
Agreement. Upon the termination of any such franchisee relationship, all rights
under this Agreement must revert to Bullhide.
4. Price; Payment. All products to be purchase by Bullhide pursuant to
this License Agreement, shall be at prices established by PolyChern from time to
time, representing approximately the total manufacturing costs plus twenty
percent (20%). For this purpose, total manufacturing costs shall include cost of
raw materials, packaging, labeling, labor and a reasonable allocation of
overhead. Costs of shipment shall be in addition to the foregoing purchase
price. All purchases shall be paid for within thirty (30) days of invoice,
unless otherwise mutually agreed by the parties.
5. Manufacturing Parameters; Quality Control. PolyChem shall be
responsible for all aspects of the manufacturing of the products and the
development of the Technology, so as to meet Bullhide's specifications.
PolyChem's responsibilities shall include, but not be limited to, ordering and
purchasing raw materials from sources it determines, oversight of the
manufacturing process, oversight of quality assurance process, packaging and
labeling of the finished components pursuant to Bullhide's specifications, and
shipment of the finished product to locations specified by Bullhide.
6. Limitation of Warranties. PolyChem warrants that it shall produce
products which meets the quality assurance parameters and specifications that
are established by Bullhide and are agreed to by both parties. POLYCHEM SHALL
MAKE NO OTHER WARRANTIES AS TO FITNESS FOR A PARTICULAR USE, WARRANTIES OF
MERCHANTABILITY OR WARRANTIES ARISING FROM A COURSE OF DEALING OR USAGE AND ANY
SUCH WARRANTIES ARE SPECIFICALLY EXCLUDED. POLYCHEM'S LIABILITY TO BULLHIDE AND
BULLHIDE'S CUSTOMERS SHALL BE LIMITED SOLELY TO THE REPLACEMENT OF OR CREDIT FOR
MATERIALS PROVEN TO BE DEFECTIVE.
7. Indemnification; Hold Harmless. Bullhide agrees to indemnify and
hold PolyChem harmless for any and all liability whatsoever arising out of the
use of the components of the Technology in a finished product, product failure
with respect to any use whatsoever, or any other liability related to the use of
products manufactured by PolyChem.
8. Term of Agreement; Termination. This Agreement shall be effective
immediately upon execution by the parties. The Agreement shall continue in
effect for as long as Xxx Xxxxxxxx
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is actively working at least twenty (20) hours per week on average, for either
PolyChem, Bullhide or both combined, and for a period of five (5) years
thereafter. Upon termination of this Agreement, Bullhide shall have no further
rights to products or Technology unless the parties otherwise agree.
9. Dispute Resolution; Arbitration; Venue. In the event that either
party breaches this Agreement, the other party shall provide the breaching party
with written notice of such breach which specifically describes the breach and
the corrective action required, and the breaching party shall have thirty (30)
days to cure the breach. If the breach is not cured within the thirty (30) day
period, or there is a dispute as to whether there has been a breach or whether
the breach has been satisfactorily cured, the parties agree to follow the
following dispute resolution procedures: If the parties do not agree, in
writing, within the allowed time period that the alleged default has been
corrected to the satisfaction of both parties, either party may demand that the
dispute be settled by arbitration and the parties do hereby agree to binding
arbitration in accordance with the provisions of RCW 7.04 et seq. Venue for any
such arbitration shall be Spokane County, Washington. The prevailing party in
any such arbitration shall be entitled to recover reasonable attorney's fees and
cost incurred.
10. Miscellaneous Provisions.
10.1 Entire Agreement. This Agreement shall constitute the
entire Agreement between the parties with respect to the subject matter hereof,
and shall supersede, cancel and replace all other prior negotiations, agreements
and writings. This Agreement may not be released, discharged, abandoned, changed
or modified in any manner except by an instrument in writing signed by the
parties.
10.2 Waive. The failure of either party at any time to require
performance of any provision hereof shall not affect the right to require full
performance hereof at any time thereafter, and waiver by either party of a
breach of any provision of this Agreement shall not constitute a waiver by that
party of its rights to enforce that provision in accordance with the terms in
the event of any subsequent breach of that provision, nor shall it nullify such
provisions.
10.3 Successors in Interest. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and the respective
successors and assigns.
10.4 Headings. The headings herein are for convenience of
reference only and shall in no way affect the interpretation of this Agreement
or any part hereof.
10.5 Governing Law. This Agreement shall be interpreted and
construed according to the laws of the State of Washington.
10.6 Attorney's Fees. Either party hereto shall be entitled to
collect reasonable attorney's fees and costs from the other party resulting from
any action taken to enforce provisions of this Agreement.
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10.7 Counterpart Signatures. For the convenience of the
parties hereto, this Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
POLYCHEM CORPORATION: THE BULLHIDE LINER CORPORATION:
By: /s/ Xxx Xxxxxxxx By: /s/ Xxx Xxxxxxxx
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Its: President Its: President
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