Exhibit 10.9
JOINT VENTURE & MANUFACTURING AGREEMENT
This Joint Venture & Manufacturing Agreement (the "Agreement") is by and between
RPM TECHNOLOGIES, INC., a Delaware corporation having its principal office at
0000 Xxxx 000xx Xxxxxx, Xxxxx X, Xxxxxx, Xxxxxxxx 00000 ("RPM Tech"), and Black
Dog Ranch, LLC, dba RPM Roofing, a Colorado limited liability company, having
its principal place of business in Bellevue, Idaho and its roofing manufacturing
facility at 0000 Xxxxx Xxxxxxxxxx Xxx., Xxxxx Xxxxx, Xxxxxxx 00000 (hereafter
"RPM Roofing"). This Agreement is effective as of January 8, 2008 (the
"Effective Date").
WHEREAS, RPM Tech has developed, markets and distributes certain plastic
products, including plastic pallets and plastic roofing materials;
WHEREAS, RPM Roofing is a manufacturer of plastic products.
WHEREAS, RPM Tech desires RPM Roofing to manufacture certain plastic pallets and
plastic roofing materials on an exclusive basis until such time as RPM Roofing
has exhausted its capacity to manufacture all demand created by RPM Tech for its
plastic products.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:
DEFINITIONS:
For purposes of this Agreement, the following terms have the meanings ascribed
to them below:
"Confidential Information" of a Party means all confidential and proprietary
information of such Party regarding such Party's products and business not
generally known to the public (and marked or otherwise designated in writing as
"Confidential," or if orally or visually disclosed, so designated in writing
within thirty (30) days after such disclosure) that are disclosed by such Party
(the "Disclosing Party") to the other Party (the "Non-Disclosing Party") under
this Agreement, including, but not limited to, such party's Intellectual
Property. Confidential Information does not include information (i) in the
public domain at the time of delivery, (ii) subsequently published or otherwise
made part of the public domain through no fault of the Non-Disclosing Party or
of its representatives, (iii) in the Non-Disclosing Party's possession at the
time of disclosure and not acquired by the Non- Disclosing party directly or
indirectly from such Disclosing Party or its representatives on a confidential
basis, (iv) which becomes available to the Non-Disclosing Party on a non-
confidential basis from a source that, to the best of its knowledge, is not
under an obligation to the Disclosing Party; or (v) which the non-Disclosing
Party demonstrates is independently developed by the Non-Disclosing Party
through its own efforts.
"Customers" shall mean RPM Tech Customers, as the context dictates.
"End User License" shall mean either: (i) end user license agreement executed
between RPM Roofing and RPM Tech with respect to RPM Tech Products.
"Intellectual Property" means all Inventions (whether or not patentable), Trade
Secrets, works of authorship (whether or not copyrightable), patents,
copyrights, trademarks, trade names, ideas or concepts, or improvements,
modifications or additions to any of the above.
"Person" means any individual, corporation, partnership, trust or other
association or entity.
"Products" shall mean RPM Products, as the context dictates, but not other
products of the Parties.
"Term" of this Agreement is defined in Section 10 hereof.
"Trade Secrets" means all concepts, ideas, formulas, patterns, devices or
compilations of information used in a company's business which may relate to the
development, production, licensing, or sale of the company's goods or services,
to the management or administration of the company, or which otherwise give it a
competitive advantage, which are not publicly known without restriction and
without breach of this Agreement.
1. EXCLUSIVE MANUFACTURING
a. RPM Roofing agrees to manufacture roofing tiles for RPM Tech pursuant to
the formula and blends of the "licensed technology" specified in a certain
License and Royalty Agreement from RDA Associates, Ltd. to RPM Tech including
the intellectual property rights for production of the plastic roofing tiles and
associated products described hereinafter which includes:
1. Simulated Slate. Cast from natural slate in six (6) colors black,
charcoal, gray, brown, red and green with a Class A and C fire rating and Class
4 impact rating. These tiles are 12" X 18" weighing approximately 2.0 lbs.
2. Simulated Cedar Shake. Simulated wood in multiple patterns cast from
real selected cedar shake in various widths of 5", 7" and 12". The height is 24"
with weights of 1.5, 2.0, and 3.0 respectfully with a Class A and C fire rating
and Class 4 impact rating in five colors, pewter, charcoal, xxxxx and a
weathered xxxx.
3. Simulated Spanish Tile known as Mission Tile. A simulated Mediterranean
style clay tile roof made from recycled plastic material with a Class C fire
rating and a Class 3 impact rating in three (3) colors available terra cotta,
xxxxx and black weighing approximately 2.2-2.4 lbs. per piece with a height of
16.5" and width of 13".
5. Accessory Tiles. All necessary tile materials associated with each
square of roofing tiles as specified in paragraphs 1(a) 1 through 4 above.
b. Production Capacity. RPM Roofing agrees to maintain the production
capacity for roofing titles specified hereinafter and RPM Tech agrees to
maintain a minimum demand for roofing tiles as specified hereinafter:
1. Two (2) full production lines with a capacity of 4200 squares of Mission
roofing tiles per month and 3000 squares of Simulated Cedar Shake or Slate Tiles
per month running 3 eight hour shifts, 7 days per week..
2. RPM Roofing agrees to add a new production line for roofing tiles as the
demand from RPM Tech requires the same to keep up with RPM Tech's sales
requirements.
3. RPM Roofing shall also maintain a production line for accessory
materials capable of meeting RPM Tech's demand for accessory materials as
necessary.
4. RPM Tech guarantees orders for roofing tiles of at least an average of
500 squares per month for the first six (6) month period and increasing to the
following average levels over the next three and half (3 1/2) years:
1,000 squares per month beginning in June of 2008;
1,600 squares per month beginning in September 2008;
2,000 squares per month beginning in 2009;
3,500 squares per month beginning in 2010; and
5,000 squares per month beginning in 2011.
In the event RPM Tech fails to timely order and pay for roofing tiles in the
minimum average quantities established by this Agreement, RPM Roofing shall be
entitled to manufacture and sell roofing tiles produced using the licensed
technology to any person, firm or corporation of its choosing and shall be
released from the exclusivity provisions of this Agreement. In the event RPM
Roofing elects to sell such roofing tiles to others, RPM Tech shall not be
released from its continuing obligation to the specified purchase and pay for
the specified minimum average quantities of roofing tiles. In addition, in the
event RPM Tech fails to order and /or pay for the minimum average required
quantities of roofing tiles, RPM Roofing shall be released from any future
obligation under this Agreement to add additional production lines. Payment
shall be made within thirty (30) days of delivery.
5. RPM Roofing shall have the right of first refusal to fulfill any higher
demand requirements by RPM Tech for roofing tiles above and beyond the stated
order requirements outlined in paragraph 1(b)(4) above.
6. Separate End User Licenses. RPM Roofing shall not have the right to
license the RPM Tech Products or to set prices for or bind RPM Tech to enter
into an End User License with respect to its Products.
7. RPM Roofing's selling price to RPM Tech for roofing tiles at the date
of this Agreement is $185 for Mission, $205 for Slate and $225 for Cedar Shake.
Said pricing can be changed at any time by using the following formula with the
agreement of the Parties. If the minimum average monthly quantities are
achieved, as specified herein, than an additional ten percent (10%) credit
discount on the price per square shall earned and applied.
The price of the roofing tiles shall be calculated at cost(s) plus eighteen
percent (18%). Cost(s) as used in this agreement shall include [a] Raw
materials; [b] Operating Expenses including: (1) Payroll, (2) Health
Insurance; (3) Worker's Compensation; (4) Taxes; (5) Telephone, (6) Gas; (7)
Electricity, (8) Maintenance and (9) Misc. Supplies and [c] Fixed Overhead
Expenses including (1) Building/Equipment/Taxes, (2) Property & Equipment
Insurance and (3) Liability Insurance
8. RPM Tech agrees to pay for the costs of any selling efforts needed to
promote and sell the roofing tiles including but not limited to the costs and
expense of brochures, website maintenance, samples and commissions to sales
representative on behalf of RPM Tech . RPM Tech shall pay RPM Roofing
immediately upon receipt of said invoice and not conditioned upon receipt of
payment for roofing tiles sold since RPM Roofing will not have knowledge of the
credit worthiness of any of the RPM Tech customers nor had the opportunity to
evaluate the same.
9. As further consideration for this Agreement, RPM has agreed to contribute
$1.0 million in capital towards the start costs associated with RPM Roofing's
manufacturing facility and this Agreement as the Parties both acknowledge that
RPM Roofing has invested approximately $5.0 million towards the start of its
manufacturing facility. RPM Roofing relied on RPM Tech's capital contribution as
one of the main reasons and inducement for RPM Roofing's entering into this
Agreement to manufacture the RPM Tech roofing tiles and meet the demands of this
Agreement. RPM Tech agrees that any all monies classified by RPM Tech as Deposit
on Joint Venture RPM Roofing shall be credited towards and in complete and full
satisfaction RPM Tech's capital contribution requirements of this Agreement as
set forth herein.
3. WARRANTIES:
a. Warranties of RPM Tech. RPM Tech hereby warrants that in entering into
and performing this Agreement, RPM Tech is in no way compromising any rights or
trust relationships between any other party and RPM Tech. RPM Tech further
warrants that (i) performance of RPM Tech's obligations under this Agreement
will not result in a breach or default under any agreement with or obligation to
any third party, and (ii) all Products and related services provided by RPM Tech
to Customers will be provided in accordance with all federal, state and local
laws, regulations, and executive orders. To the extent that RPM Tech provides
any Products or services to a referred Customer, RPM Tech further warrants that
(i) it has the right to license its Products to the Customer and the right to
perform the services and the right, if applicable, to use its proprietary
software programs in connection with the provision of services to the Customer;
(ii) performance of RPM Tech' obligations under this Agreement and any End User
License will not result in infringement of any third party's United States of
America intellectual property rights; and (iii) RPM Tech has or will have the
resources to timely perform its obligations under this Agreement. THE WARRANTIES
AND REPRESENTATIONS OF RPM TECH EXPRESSLY SET FORTH IN THIS SECTION ARE LIMITED
WARRANTIES AND THE ONLY WARRANTIES MADE BY RPM TECH UNDER THIS AGREEMENT. ALL
OTHER WARRANTIES OR REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, CONDITION, AND FITNESS FOR A
PARTICULAR PURPOSE ARE EXPRESSLY DISCLAIMED AND EXCLUDED. Nothing in this
Section shall require RPM Tech to make any similar warranties to a Customer and
no Customer shall be considered either a direct or intended third party
beneficiary of the foregoing warranties.
b. Warranties of RPM Roofing. RPM Roofing hereby warrants that in entering
into and performing this Agreement, (i) performance of RPM Roofing's obligations
under this Agreement will not result in a breach or default under any agreement
with or obligation to any third party, and (ii) all Products and related
services provided by RPM Roofing to RPM Tech will be provided in accordance with
all applicable federal, state and local laws, regulations, and executive orders,
provided that RPM Roofing makes no representation or warranty that the licensed
technology does not infringe any patent or similar right. RPM Roofing warrants
and guarantees that all products manufactured by RPM Roofing will be and are
made to the industry standards and that the roofing tile products manufactured
for RPM Tech will meet all specifications set forth in the Licensed Technology.
4. NATURE OF RELATIONSHIP.
Mutual Disclaimer of Agency. Each Party acknowledges and agrees that it will not
act as an agent nor be deemed an agent of the other Party for any purpose.
5. SAFEGUARDING CONFIDENTIAL INFORMATION:
a. Protection of Confidential Information. Each Party shall safeguard and
keep confidential all Confidential Information of the other Party and shall
return all Confidential Information to the other Party promptly upon request.
The Non-Disclosing Party agrees to safeguard any Confidential Information
received from the Disclosing Party by using measures that are equal to the
standard of performance used by the Non-Disclosing Party to safeguard its own
Confidential Information of comparable value, but in no event less than
reasonable care.
b. Additional Obligations. Neither Party shall, without the prior written
consent of the other Party: (i) disclose any Confidential Information of the
other Party to any person other than an employee or an independent contractor
who agrees to be bound by this Section or as expressly contemplated by this
Agreement; (ii) make any unauthorized copies of Confidential Information of the
other Party; or (iii) use any Confidential Information of the other Party for
any purpose except to implement its rights and obligations under this Agreement
and as otherwise expressly contemplated by this Agreement. If any party is
requested or required to disclose any Confidential Information of a Disclosing
Party, it will promptly notify the Disclosing Party of such request or
requirement so that the Disclosing Party may seek an appropriate protective
order or other appropriate relief and/or waive compliance with provisions of
this Agreement. If in the absence of such relief or waiver hereunder, the other
party is, in the opinion of its counsel, compelled by law, by regulation of a
government agency or by order of a court to disclose Confidential Information,
then it may disclose such of the Confidential Information to the person
compelling disclosure as is, according to such opinion, required without
liability to the Disclosing Party hereunder for such disclosure.
c. Injunctive Relief. Each Party acknowledges that breach of the foregoing
obligations may cause irreparable injury to the Party whose Confidential
Information is disclosed and that (notwithstanding any contrary provision
relating to the mediation or arbitration of disputes) such Party may seek and
obtain injunctive relief against such breach or threatened breach without
prejudice to any other remedies which may be available to it.
d. Third Parties' Rights. Each Party agrees not to use or disclose to, or
induce or cause the other Party to use, any proprietary information including
Intellectual Property belonging to any third party Person without the prior
written consent of that Person.
e. Other Obligations. Each Party acknowledges that the other Party may,
from time to time, have agreements with other Persons including the U.S.
Government, or agencies thereof, which impose obligations or restrictions
regarding proprietary information or regarding the confidential nature of their
work. Each Party agrees to be bound by all such obligations and restrictions and
to take all actions necessary to discharge the obligations of the other Party
thereunder, including signing such other confidentiality agreements as may be
required by other Persons as a condition to obtaining or using proprietary
information.
6. TERM AND TERMINATION:
a. Term and Renewal. The term of this Agreement ("Term") shall be for a
term commencing on the Effective Date and extending through January 1, 2018. The
Term of this Agreement shall automatically renew thereafter for ten-year renewal
terms unless either Party provides written notice to the other at least one (1)
year prior to the end of the then current term that this Agreement will not be
renewed. Expiration or termination of this Agreement shall not relieve either
RPM Tech or RPM Roofing of their respective warranties and other obligations
under this agreement shall also survive expiration or termination of this
Agreement.
b. Termination for Cause. If either Party breaches any material provision
under this Agreement, the other party may give written notice to the breaching
Party, which describes in reasonable detail the breach. If the breaching Party
fails to remedy such material breach within ninety (90) days following such
written notice (the "Cure Period"), or if such breach is not capable of cure
within the Cure Period, then the other party may, in its sole discretion,
terminate this Agreement immediately upon written notice to the breaching Party.
7. ASSIGNMENT:
This Agreement is binding on the successors and assigns of the parties;
provided, that this Agreement may not be assigned by either Party without the
prior written consent of the other except as provided in this Section. A Party
(the "assigning Party") may assign its rights and obligations under this
Agreement, without the consent of the other Party, to any corporation which is a
wholly owned subsidiary or parent of the assigning Party which survives a merger
in which the assigning Party participates, or to any corporation or other person
or business entity which acquires all or substantially all of the assets of the
assigning Party; provided, however, that upon any such assignment the non-
assigning Party may terminate the Agreement immediately upon notice for the
first forty-five (45) days after receipt of notice of the assignment.
a. Waivers. No failure on the part of either Party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy granted hereby or by any related document or law.
b. Notices. Service of notices under this Agreement shall be effective only
upon the third (3rd) business day after mailing, if mailed by registered mail,
return receipt requested, or upon delivery, if personally delivered and
receipted for, or delivered by telecopy with machine confirmation, as follows:
(i) if to RPM Roofing addressed to RPM Roofing LLC. 0000 Xxxxx Xxxxxxxxxx Xxx.,
Xxxxx Xxxxx, Xxxxxxx and (ii) if to RPM Tech addressed to RPM Technology, Inc.
0000 Xxxx 000xx Xxxxxx, Xxxxx X, Xxxxxx, Xxxxxxxx 00000.
c. Governing Law. This Agreement shall be deemed to be a contract made
under the laws of the State of Indiana and for all purposes this Agreement,
together with any related or supplemental documents and notices, shall be
construed in accordance with and governed by the law of the State of Illinois.
d. Amendments. This Agreement may not be and shall not be deemed or
construed to have been modified, amended, rescinded, canceled or waived in whole
or in part, except by written instruments signed by the Parties hereto.
e. Entire Agreement. This Agreement constitutes and expresses the entire
agreement and understanding between the Parties with respect to the transactions
contemplated herein. All previous discussions, promises, representations and
understandings between the Parties relative to this Agreement, if any, have been
merged into this document.
f. Severability. To the fullest extent possible each provision of this
Agreement shall be interpreted in such fashion as to be effective and valid
under applicable law. If any provision of this Agreement is declared void or
unenforceable for particular facts or circumstances, such provision shall remain
in full force and effect for all other facts or circumstances. If any provision
of this Agreement is declared entirely void or unenforceable, such provision
shall be deemed severed from this Agreement, which shall otherwise remain in
full force and effect.
g. Publicity. The Parties shall cooperate with each other in the
development of a joint press announcement of the transactions contemplated by
this Agreement to be issued by RPM Roofing, and shall cooperate with each other
and provide advance notice of the content and timing of all future public
announcements with respect to this Agreement and an opportunity to comment
thereon.
h. Counterparts. This Agreement may be signed in any one or more
counterparts with the same effect as if the signatures to each counterpart were
upon a single instrument, and all such counterparts together shall be deemed an
original of this Agreement.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
RPM TECHNOLOGIES, INC. BLACK DOG RANCH, LLC dba RPM ROOFING
By: /S/Xxxxx Xxxx By: /S/ Xxxx Xxxx
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Xxxxx Xxxx, CEO Xxxx Xxxx, Manager
