MANUFACTURING AGREEMENT
THIS
IS
AN AGREEMENT made this 6th
day of
March, 1998 between WESTERN FARM SERVICE, INC. a Delaware corporation,
(hereinafter "WFS"), and ITRONICS METALLURGICAL, INC., a Nevada corporation,
(hereinafter “IMI”)
1. GRANT
OF LICENSE. IMI
hereby grants to WFS a license and right to manufacture the products identified
in Exhibit "A", hereinafter the "Products", attached hereto and incorporated
herein by this reference.
2.
TRADE
SECRET.
The
parties acknowledge that IMI holds the Products and their formulas trade
secrets
as defined in NRS Chapter 600A.
3. CONFIDENTIALITY.
All
disclosures made by IMI to WFS regarding the manufacture of the Products,
are to
be considered as confidential. Except as set forth in paragraph 6 herein,
WFS
agrees to use this information strictly for the purpose of performing its
service to IMI and agrees, to the best of their ability, to hold it in the
strictest confidence at all times. WFS agrees to not reveal, publish or
communicate the subject matter except to those WFS employees required to
provide
the contracted service set forth herein. At no time will WFS disclose the
subject matter to any other party for any purpose without the prior written
consent of IMI Upon the termination of this Agreement, WFS agrees to return
to
IMI all confidential and other related material which may have been provided
by
IMI to WFS. Notwithstanding anything stated herein to the contrary, should
any
of the materials given to WFS by IMI already be in the public domain, become
available through public domain or if WFS can document prior knowledge of
the
materials from another source, WFS is not obligated to hold that specific
material in confidence.
4.
PRODUCT
CONFORMITY AND QUALITY OF MANUFACTURE.
IMI
hereby confirms to WFS that the Products and formulas to manufacture such
products, conform to all federal, state and local laws. WFS agrees that the
Products manufactured by WFS will be produced and distributed in accordance
with
federal, state and local laws and will be produced using the formulas supplied
by IMI under the terms of this Agreement. WFS further agrees to submit a
sample
of said Products, its carton, containers, and packing material to IMI for
approval, which approval shall not be unreasonably withheld. Any item not
specifically disapproved at the end of ten (10) working days after submission
and receipt by IMI shall be deemed to be approved. The approved Product(s)
may
not thereafter be materially changed without approval of IMI.
S. RIGHT
TO USE NAME/EXCLUSIVITY.
IMI
hereby grants to WFS the exclusive right to use the Gold'n Gro trademark
for the
20-1-7 and other primary formulas provided to WFS, the Products, for the
purpose
of manufacturing and marketing such Products within the territory set forth
in
paragraph 7 (hereinafter "Territory"). IMI further grants WFS the exclusive
rights to market those products, within the territory, identified within
Exhibit
"B", attached hereto and incorporated herein by this reference. WFS may modify
the primary Gold'n Gro product labels by obtaining IMI's prior approval to
include a credit that the product is manufactured and distributed by WFS.
WFS
shall not produce or use any other label, name or trademark on such Products.
On
the
termination of this Agreement, WFS shall discontinue its use of the Gold'n
Gro
trademark for 20-1-7 and other primary formulas provided to WFS under the
terms
of this Agreement and its manufacture of 20-1-7 and other primary formulas
provided. WFS shall however maintain the right to market all such Products
that
WFS has in its inventories until said product inventory is depleted.
Notwithstanding anything stated to the contrary herein, IMI shall maintain
the
right to sell into the homeowner market, using its small container/packages
goods.
6. NEW
PRODUCTS.
IMI
hereby grants to WFS a license and right to use the Gold'n Gro formulas provided
to WFS under the terms of this Agreement for the purpose of blending into
other
formulas to be manufactured by WFS under other trade names and trade marks.
All
new products developed by WFS, or in cooperation with IMI will be the
proprietary products of WFS and will be labeled under the FIRST CHOICE trademark
of WFS. Such license and right to use such formulas shall survive the
termination of this Agreement.
7. TERRITORY.
IMI
hereby grants to WFS the exclusive rights to market the Products within the
States of Arizona, California, Oregon, Washington, Idaho and
Hawaii.
8. BEST
EFFORT.
WFS
shall promote, to the best of its abilities, the Sale of the Products in
the
territory. WFS shall carry out, where applicable, customer workshops, exhibit
at
trade shows and provide product presentations to its marketed
customers.
9. RAW
MATERIALS.
IMI
shall supply to WFS the base Gold'n Gro product and/or formulating material.
WFS
shall supply low biuret urea, low biuret UAN-32, AN-20, phosphate liquids,
including feed grade 10-34-0 and 0-17-17. Such products shall be used by
WFS in
the manufacturing of Gold'n Gro products, test products and/or the manufacturing
of new products.
10.
MATERIAL
PRICE.
IMI and WFS shall supply their respective raw materials and/or product at
a
price which shall be agreed to between the parties hereto and shall be set
forth
in Exhibit "C" attached hereto and incorporated herein by this reference.
Any
adjustment to the base price set forth in Exhibit C shall be in writing and
agreed to between the parties hereof. The parties further agree to review
such
prices on a quarterly bases.
11.
TERM.
The
term of this agreement shall be for five (5) year beginning on the 6th
day of
March, 1998 and ending on the
5th
day of
March, 2003 and
shall
automatically extend in five year increments unless either party gives the
other
prior written notice that it wishes to terminate the agreement as provided
in
paragraph 12 herein.
12.
TERMINATION.
Either
party may terminate this agreement at the end of the primary term by giving
the
other 120 day prior written notice or at anytime following the primary term
and
during any automatic extension period by giving the other prior written notice
120 days prior to December 31st of each agreement year.
13.
INDEMNITY.
IMI
agrees to indemnify and hold WFS, its officers, directors, employees assignees,
and agents, harmless from and against any and all claims, damages, losses,
expenses, penalties, lawsuits, judgments, (including attorney fees and costs),
arising from or related to any breach of this Agreement by IMI excepting
any
loss, liability, claim, damage, or expense which is directly attributable
to the
active negligence or intentional conduct or omissions of WFS, its officer,
directors, employees or agents. All indemnities contained in this Agreement
shall survive the termination hereof, however same shall occur.
WFS
agrees to indemnify and hold IMI, its officers, directors, employees, assignees,
and agents, harmless from and against any and all claims, damages, losses,
expenses, penalties, lawsuits, judgments, (including attorney fees and costs),
arising from or related to any breach of this Agreement by WFS, excepting
any
loss, liability, claim, damage, or expense which is directly attributable
to the
active negligence or intentional conduct or omissions of IMI its officers,
directors, employees or agents. All indemnities contained in this Agreement
shall survive the termination hereof, however same shall occur.
14. GOVERNING
LAW. This
agreement shall be construed and interpreted according to the laws of the
State
of California.
15. SEVERABILTTY.
If any
provision of this Agreement is held in whole or in part to be unenforceable
for
any reason, the remainder of that provision and of the entire Agreement will
be
severable and remain in effect.
16. ATTORNEY
FEES.
In any
action or proceeding to enforce this Agreement, the prevailing party shall
be
entitled to its reasonable attorney fees and cost.
17. BINDING
EFFECT ON SUCCESSORS AND ASSIGNS.
This
Agreement shall be binding on and shall inure to the benefit of the successors
and assigns of the parties to this Agreement.
EXECUTED
by the parties hereto on this 6th
day of
March, 1998.
| ITRONICS METALLURGICAL, INC. | WESTERN FARM SERVICE, INC. | ||
| A Nevada corporation | a Delaware corporation | ||
| By: /s/ Xxxx Xxxxxxx | By: /s/ Xxxxxx Xxxxxx | ||
| Xxxx
Xxxxxxx Title: President |
Xxxxxx
Xxxxxx Title: V.P. West |
