EXHIBIT 10.5
BULLHIDE
STANDARD UNIT LICENSE AGREEMENT
THIS AGREEMENT, made at Spokane, Washington, as of the date set forth below, by
and between THE BULLHIDE LINER CORPORATION , a Washington corporation,
(hereinafter "Bullhide"'), and Protective Surfacing, Inc. (hereinafter
"Licensee").
WHEREAS, Bullhide is engaged in the business of operating and licensing a
process under the name of "Bullhide Liner" which offers to sell to the public a
custom spray-molded permanent polyurethane lining that protects and preserves
the beds of trucks, vans, trailers and boats; and
WHEREAS, Bullhide has developed information and methods in connection with the
operation of such Bullhide Liner Installation Centers for providing products and
services, utilizing certain standards, specifications, methods, procedures,
techniques, management systems, identification schemes, recipes and proprietary
marks and information (hereinafter "Bullhide Liner System"); all of which may be
changed, improved and further developed from time to time by Bullhide; and
WHEREAS, the distinguishing characteristics of the Bullhide Liner System
include, without limitations, the name and xxxx "Bullhide Liner," together with
such other trade names, service marks, trademarks and trade symbols, emblems,
signs, slogans, insignia and copyrights as Bullhide has adopted and designated
for use in connection with the Bullhide Liner System and as Bullhide may
hereafter acquire or develop and designate for use in connection with the
Bullhide Liner System (hereinafter "Licensed Rights"); and
WHEREAS, Bullhide has established an excellent reputation and goodwill with the
public with respect to the quality of products and services available at
Bullhide Liner Installation Centers, which reputation and goodwill have been and
continue to be of major benefit to Bullhide and its Licensees; and
WHEREAS, Licensee recognizes the benefits to be derived from being identified
with and licensed by Bullhide and being able utilize the Bullhide Liner System
and the Licensed Rights which Bullhide makes available to its Licensees; and
WHEREAS, Licensee has the right to select proposed sites on which to construct
Bullhide Liner Installation Centers under that certain Development Agreement
between Bullhide and Licensee dated
__________________________________(hereinafter "Development Agreement"), within
the area described in that Development Agreement (hereinafter "Licensed Area");
and
WHEREAS, Licensee desires to construct, own and operate Bullhide Liner
Installation Centers described in P. 1 hereof upon the tam and conditions set
forth herein, which tam and conditions are reasonably necessary to maintain
Bullhide's high and uniform standards of quality and service and to protect the
goodwill and enhance the public image of the Bullhide Liner
System and the Licensed Rights; and
WHEREAS, the location described in P. 1 is within the Licensed Area and has been
proposed by Licensee and accepted by Bullhide as a site for a Bullhide Liner
Installation Center;
NOW, THEREFORE, in consideration of the foregoing and of the covenants herein
contained, the parties, intending to be legally bound, hereby agree as follows:
1. Grant of License and Licensed Rights.
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1.1 Subject to the terms and conditions of this Agreement,
Bullhide hereby grants to the Licensee the exclusive license
to construct, lease, own and operate a Bullhide Liner
Installation Center (hereinafter the "Installation Center") at
the following location:
1.2 Subject to the terms and conditions of this Agreement,
Bullhide agrees to license to Licensee the right to use the
Bullhide Liner System and the Licensed Rights of the
Installation Center.
1.3
1.3.1
It is understood and agreed that Licensee
shall have the exclusive right to operate a
Bullhide Liner Installation Center and to
use the Bullhide Liner System and the
Licensed Rights at the Installation Center
within an area determined by such factors as
population, truck and boat density and other
factors that may influence the potential of
success for the Licensee. The continuous
purchase of Bullhide materials is necessary
to maintain the exclusive rights to the
area. Each location or equivalent machine
must purchase a minimum average of one drum
set of material (160 gallons) every month on
average for the first year period, beginning
after the initial two mouth start-up period,
and 240 gallons per month in the second and
continuing years of operation. Failure to
purchase the minimum amount of Bullhide
material could result in reduction in the
size of the exclusive territory, up to and
including the loss of exclusivity for the
entire territory.
Subject to negotiation prior to the time of
signing this Agreement and the Development
Agreement, if applicable, the Exclusive
Licensed Unit Marketing Area Unit License")
is:
Bounded between: Xxxxx 00, Xxxxxxx 00, Xxxx
Xxxx Xx. and Interstate 24
2. Term and Performance.
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The license is extended indefinitely as long as all the terms of this
agreement are fulfilled.
3. Payments .
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Licensee specifically acknowledges that no fee is being paid for the
license to operate their Installation Center under the Bullhide Liner
System, and for the licensed rights there of. Exclusive continuous
purchase by the licensee at what is considered to be bonafide wholesale
prices and use of the products sold by Bullhide constitute the full
consideration given to BULLHIDE by the Licensee for the full licensed
rights under the Unit License Agreement.
4. Services by Bullhide
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Bullhide agrees to use its best efforts to maintain the excellent
reputation of all Bullhide Liner Installation Centers and, in
connection therewith, to make available to Licensee the following:
4.1 Initial training in the Bullhide Liner System, including
standards, methods, procedures and techniques, for each person
identified in 19 of this Agreement,-- at such time and places
as Bullhide may designate for its training program, in its
discretion, and subject to the terms of 19 hereof
4.2 Such assistance as Bullhide determines is required in
connection with the opening of the Installation Center by
Licensee, including assistance by Bullhide's personnel in
planning and developing of pre-opening and promotional
programs.
4.3 The use of Bullhide's Operations Manual and other manuals and
training aids as developed and revised from time to time.
4.4 Such merchandising, marketing and other data and advice as may
from time to time be developed by Bullhide and deemed by it to
be helpful in the operation of the Installation Center.
4.5 Such periodic continuing individual or group advice,
consultation and assistance, rendered by personal visit or
telephone, or by newsletters or bulletins made available from
time to time to all Licensees of Bullhide as Bullhide may deem
necessary or appropriate.
4.6 Such bulletins, brochures and reports as may from time to time
be published by Bullhide regarding its plans, policies,
research, developments and activities.
4.7 Such other resources and assistance as may hereafter be
developed and offered by Bullhide to its Licensees.
5. Limitations of Licensed Right . Licensee acknowledges and agrees that:
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5.1 The license and Licensed Rights granted hereunder are personal
to Licensee and cannot be sold, assigned or transferred, in
whole or in part, except as set forth in 113 hereof.
5.2 Bullhide is the exclusive owner of the Licensed Rights and of
the identification schemes, standards, specifications,
operating procedures and other concepts embodied in the
Bullhide Liner System. Licensee will use the Bullhide Liner
System and the Licensed Rights strictly in accordance with the
terms of this Agreement, and any unauthorized use of the
Bullhide Liner System and the Licensed Rights is and shall be
deemed an infringement of Bullhide's rights. Except as
expressly provided by this Agreement and any other Unit
License Agreements, Licensee shall acquire no right, title or
interest to the Bullhide Liner System or the Licensed Rights;
any and all goodwill associated with the Bullhide Liner System
and the Licensed Rights shall inure exclusively to Bullhide's
benefit. Licensee will at no time take any action whatsoever
to contest the validity or ownership of the Licensed Rights
and the goodwill associated therewith.
5.3 Licensee shall have no right without permission to use in its
name the name "Bullhide", "Bullhide Liner", or other names
used by Bullhide. If licensee has heretofore obtained
permission to use any of these names, and does use any of them
in its name, then, upon termination of this Agreement for any
reason whatsoever, Licensee shall immediately take all steps
necessary to eliminate any of these names from its name,
except as permitted by any other Unit License Agreement.
5.4 Except as provided in I I hereof the Licensed Rights granted
hereunder are nonexclusive, and Bullhide retains the right, in
its sole discretion:
5.4.1 To continue to conduct and operate other Bullhide
Liner Installation Centers and to use the Bullhide
Liner System and the Licensed Rights at
5.9 Because complete and detailed uniformity under many varying
conditions may not be possible or practical, Bullhide
specifically reserves the right and privilege, at its sole
discretion and as it may deem in the best interests of all
concerned in any specific instance, to vary standards for any
Licensee based upon the peculiarities of a particular site or
circumstance, density of population, business potential,
population of trade area, existing business practices or any
other condition which
Bullhide deems to be of importance to the successful operation
of such Licensee's business. Licensee shall not be heard to
complain on account of any variation from standard
specifications and practices granted to any other Licensee and
shall not be entitled to require Bullhide to grant them a like
or similar variation hereunder.
5.10 Licensee has sole responsibility for the performance of all
obligations arising out of the operation of its business
pursuant to this Agreement, including, but not limited to, the
payment when due of any and all taxes levied or assessed by
reason of such operation.
5.11 Licensee, or each person who is actively involved in the
management or operation of the business of Licensee, must
continuously demonstrate to Bullhide its ability to operate
the business of Licensee pursuant to this Agreement and all
other Unit License Agreements.
5.12 In all public records, in its relationship with other persons,
and in any offering circular, prospectus or similar document,
Licensee shall indicate clearly the independent ownership of
Licensee's business and that the operations of said business
are separate and distinct from the operation of Bullhide's
business.
6. *SECTION 6 IS VOID FOR THE PURPOSES OF THIS AGREEMENT
7. *SECTION 7 IS VOID FOR THE PURPOSES OF THIS AGREEMENT
8. Operations. Licensee covenants and agrees that:
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8.1 In order to protect the Bullhide Liner System and to maintain
uniform standards of operation under the Licensed Rights,
Licensee shall operate the Installation Center in accordance
with Bullhide's Operations Manual, a numbered copy of which
Licensee acknowledges receiving on loan from Bullhide for the
term of this Agreement. Licensee understands and acknowledges
that Bullhide may, from time to time, revise the contents of
the Operations Manual to implement new or different operating
requirements applicable to all Bullhide Liner Installation
Centers, including Installation Centers owned by Bullhide, and
Licensee expressly agrees to comply with each changed
requirement within such reasonable time as Bullhide may
require. Licensee shall at all times ensure that its copy of
the operations Manual and any other manuals given to it are
kept current and up to' date and, in the event of any dispute
as to the contents thereof the terms of the master copies
maintained by Bullhide at its principal place of business
shall be controlling.
8.2 In order to protect the Bullhide Trademark, the Licensed
Rights and the goodwill associated therewith, it will:
8.2.1 Operate, Produce and Install the liner under the name
"Bullhide Liner" and advertise only under the
Licensed Rights designated by Bullhide for use for
that purpose and will use such rights without Prefix,
except where such use may conflict with a prior
registration or use, in which event Licensee shall
operate and advertise only under such other names as
Bullhide has previously approved in writing.
8.2.2 Feature and use the Licensed Rights solely in the
manner prescribed by Bullhide.
8.2.3 Observe such reasonable requirements with respect to
service xxxx, trade name, trademark and fictitious
name registrations and copyright notices as Bullhide
may, from time to time, direct in writing.
8.3 Licensee shall use only such materials for the manufacture of
linings and methods of preparation, application and service as
conform to the specifications and standards of Bullhide in
effect from time to time. Licensee shall discontinue selling
or offering for sale any competitive products Bullhide may, in
its discretion, disapprove in writing at any time.
8.4 It will cause its employees to wear apparel which conforms
strictly to the specifications, design and style approved by
Bullhide from time to time.
8.5 It will maintain at all times, at its expense, the
Installation Center, equipment, fixtures, furnishings and
furniture and related premises, parking areas, landscape areas
and interior and exterior sips in a good, clean, attractive
and safe condition in conformity with Bullhide's high
standards and public image, and in connection therewith, shall
make such additions, alterations, repairs and replacements
thereto as may be required to keep the Installation Center in
the highest degree of repair and condition, including, without
limitation, such periodic repainting, repairs to equipment not
in good working order, and replacement of outdated signs as
Bullhide may reasonably direct.
8.6 It will comply with all laws, ordinances and regulations
affecting the operation of the Installation Center. Without
limiting the generality of the foregoing, Licensee
specifically agrees to comply with applicable health and
safety laws, and air pollution laws, ordinances and
regulations so as to be rated in the highest available health
and safety and air purity classifications by the appropriate
governmental authorities and to furnish to Bullhide, within
ten (10) days of Licensee's receipt thereof, copies of all
inspection reports, warnings, certificates and ratings issued
by any governmental agency which reflect Licensee's failure to
meet and maintain the highest applicable ratings, or
Licensee's noncompliance or less than full compliance with any
applicable law, rule or regulation.
8.7 It will notify Bullhide in writing within ten (10) days of the
commencement of any
action, suit or proceeding, and of the issuance of any order,
writ, injunction, award or decree of any court, agency or
other governmental instrumentality, which may adversely affect
Licensee's financial condition or ability to meet its
obligations hereunder.
8.9 It will permit authorized personnel of Bullhide to enter the
Installation Center at any time during normal business hours
for the purpose of inspecting and examining the operations and
facilities (including, but not limited to, testing, sampling
and inspecting the materials for the manufacturing of linings
used by Licensee and the products and services sold by it, as
well as the storage, preparation and application of such
linings and products). Licensee shall cooperate with
Bullhide's representatives in such inspections by rendering
such assistance as they may reasonably request. It shall
permit Bullhide's representatives to remove from the
Installation Center samples of any ingredients and products
without payment therefor in amounts reasonably necessary for
testing by Bullhide, or an independent certified laboratory to
determine whether said samples meet Bullhide's then-current
standards and specifications. In addition to any other
remedies it may have under this Agreement, Bullhide may
require Licensee to bear the cost of such testing if the
supplier from whom such ingredients and products were acquired
has not been approved by Bullhide or if the sample fails to
conform to Bullhide's specifications. Upon notice from
Bullhide or its agents, Licensee shall take such steps as may
be necessary immediately to correct any deficiencies detected
during any inspection or by such testing, without limitation,
immediately ceasing to use any methods, ingredients, products
or advertising materials which do not conform to Bullhide's
then current specifications, standards or requirements.
8.9 It shall purchase all liner materials and chemicals
exclusively from Bullhide, as well as the application
equipment utilized in the production of the liner. All
Bullhide materials are warranted to be free from manufacturer
defect, and will be replaced free of charge if found to be
defective. Product defect is defined as product properties
outside of Bullhide's material specification. All other
equipment, inventory, other supplies, products, and
ingredients used in the operation of the Installation Center
as Bullhide, in its discretion, may specify from time to time,
solely from suppliers who demonstrate to Bullhide's continuing
reasonable satisfaction the ability to meet Bullhide's
standards and specifications for such items, who have been
approved in writing by Bullhide and not thereafter
disapproved. If Licensee desires to purchase any such items
from a supplier who is not approved, Licensee shall submit to
Bullhide a written request for such or shall request the
supplier to do so. Bullhide shall have the right to require,
as a condition of its approval that its representatives be
permitted to inspect the suppliers facilities and that samples
from the supplier be delivered, at Bullhide's option, to
Bullhide or as designee for testing. A charge not to exceed
the cost of inspection and testing shall be paid by the
Licensee or by the supplier seeking approval, and Bullhide
shall not be liable for damage to any sample which might
result from the testing process. Bullhide reserves the right,
at its option, to re inspect the facilities and to reject the
products of any such approved supplier at any time and to
revoke such approval if the supplier has failed to continue to
meet any of the foregoing criteria.
8.10 It will open and operate the Installation Center at least five
days per week (except during such periods as it may be
required by law or permitted by Bullhide to be closed) during
the minimum hours of 8:00 A.M. to 5:00 P.M. local time.
Minimum requirements are that the phones be forwarded or
awarded.
8.11 It will pay on a timely basis for all products and other items
used in the operation of the Installation Center. Licensee is
aware that failure to make prompt payment to its suppliers may
cause irreparable harm to the reputation and credit of
Bullhide and other Licensees.
8.12 Licensee, at its expense, shall have annual financial
statements covering the results of operations of the
Installation Center prepared by a qualified accountant
selected by Licensee and, if requested by Bullhide in writing,
shall deliver such financial statements to Bullhide.
8.13 It shall comply with all other requirements set forth in this
Agreement.
9. Bullhide Training Program.
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9.1 The following persons shall satisfy all of the conditions
established by Bullhide from time to time for admission to,
and graduation from, Bullhide's management initial training
program.
9.1.1 Licensee, if he is an individual.
9.1.2 One person who is actively involved in the management
or operation of the business of Licensee and one
Application Specialist from the Installation Center,
9.1.3 Each person who has an interest in Licensee (if
Licensee is a group of individuals or a corporation,
partnership, unincorporated association or similar
entity) at the option of the Licensee.
Each such person shall successfully complete Bullhide's
training program to Bullhide's satisfaction. Upon the failure
of Licensee or any other such person to complete the training
program successfully for any reason, a substitute trainee
satisfactory to Bullhide shall attend and successfully
complete the program and shall operate or supervise the
operation of the Installation Center thereafter if Bullhide,
at its option, so directs.
9.2 The classroom and on-the-job training is held in Spokane,
Washington, for five (5) days and averages six (6) hours per
day. The training involves the use of Bullhide's Operating
Manual and covers basic principles of marketing, management,
bookkeeping, scheduling, cost control, product costs, health
and safety, operating procedures, equipment operation and
Bullhide Liner application methods.
9.3 No fee shall be charged by Bullhide for participation in the
initial training program. Licensee shall be responsible for
the costs and expenses (such as room, board and
transportation) of each person who attends the program. At
Bullhide's discretion, there may be a charge for the cost of
materials used during training.
9.4 The persons listed above in 19.1 may also attend any optional
advanced training programs or seminars offered and conducted
by Bullhide. Licensee shall be responsible for the costs and
expenses of each person who attends any such program.
9.5 Bullhide may, in the future, authorize Licensee to offer and
sell additional products and services beyond the current
product and service line. If they choose to offer and sell the
additional products and services, Licensee and all employees
Bullhide so designates must complete Bullhide's advanced
training seminars for those additional products and services
to Bullhide's satisfaction.
9.6 Bullhide also maintains an in-service training program. If
requested by Licensee, and if personnel is available, a
Bullhide staff member will provide on-the-job training at the
Licensee's Installation Center. Bullhide reserves the right to
charge a fee for this service equal to two times the
Installation Center managers daily salary, as established by
Bullhide's Payroll Guidelines in effect at the time of the
request, plus expenses.
10. Advertising and Promotion.
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10.1 SECTION 10.1 IS VOID FOR THE PURPOSES OF THIS AGREEMENT
10.2 Licensee agrees to honor all valid warranty claims made by any
customer of Bullhide when presented with the proper warranty
certification. The direct cost of materials and labor, as
directed by Bullhide, shall be reimbursed by producer of
original liner or Bullhide if original producing Installation
Center is no longer operating. Licensee farther agrees to
reimburse other Licensees their cost as stated above, for
providing warranty service on liners produced by Licensee.
11. Hold Harmless: Insurance.
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11.1 Licensee agrees to indemnify and hold harmless Bullhide from
any liability or damage Bullhide may incur, including
reasonable attorney fees, as a result of
claims, demands, costs or judgments, of any kind or nature, by
anyone whomsoever, arising out of or otherwise connected with,
this Agreement, the franchise, the Licensed Rights or the
ownership, maintenance or operation of the Installation Center
by the Licensee.
11.2 Notwithstanding the foregoing, Bullhide agrees to cooperate
with Licensee to protect Licensee against the infringement of
the Bullhide Liner System and the Licensed Rights, including,
but not limited to, the defense or prosecution of any lawsuits
W, in the judgment of Bullhide's counsel, such action is
necessary or advisable.
11.3 Licensee agrees to maintain insurance as follows:
11.3.1 All insurable properties shall be insured against
loss or damage by fire, lightning, windstorm, hail,
explosion, riot, riot attending a strike, civil
commotion, air traffic, vehicle, smoke or other risks
usually insured against by persons operating like
properties in the localities where the properties
operated by Licensee are located, in amounts
sufficient to prevent Bullhide or the Licensee from
becoming a co-insurer within the terms of the
policies in question, and in any event in amounts not
less than eighty percent (80%) of the then-insurable
value thereof
11.3.2 During the construction or remodel of the
Installation Center, policies of Builder's Risk
Insurance shall be maintained in amounts not less
than customarily maintained by Bullhide.
11.3.3 Public liability insurance shall be maintained
against claims for personal injury, death or property
damage suffered by others upon, in or about the
Installation Center or occurring as a result of the
maintenance or operation by Licensee of any
automobiles, trucks, or other vehicles, airplanes or
other facilities or as a result of the use of
products sold by it or services rendered by it or any
claims arising out of the business of Licensee
pursuant to this Agreement or the operation of the
Installation Center in a total amount not less than
$500,000.
11.3.4 Workmen's compensation, unemployment compensation,
disability insurance, social security, and other
insurance coverage, shall be maintained in such
amounts as may now, or hereafter, be required by the
State law where the licensee is located.
All such policies shall insure Licensee and Bullhide (if
necessary under any law, ordinance or regulation) and shall
protect the Licensee and Bullhide against any liabi* which may
accrue by reason of this agreement, the LwmnW Rights, or
the ownw*p, maintenance or operation by Licensee of the
Installation Center. quality in appearance and service in the
operation of the Installation Center.
12.1.7 If Licensee shall purport to effect any assignment
other than in accordance with 113 hereof
12.1.8 If Licensee shall be in default under any lease or
sublease of the Installation Center site or loses the
right to possession thereof for any reason
whatsoever.
12.1.9 If a threat or danger to public health or safety
results from the construction, maintenance or
operation of the Installation Center.
12.1.10 If Licensee makes, or has made, any misrepresentation
to Bullhide in connection with obtaining the
Development Agreement or this Agreement or in
conducting the business Licensed and licensed
hereunder.
12.1.11 If Licensee fails to obtain Bullhide's prior written
approval or consent as expressly required by this
Agreement.
12.1.12 If Licensee defaults in the performance of any other
obligation under this Agreement.
12.1.13 If the Installation Center ceases operations without
the written consent of Bullhide for any reason except
for a period of not more than one hundred eighty
(180) days as a result of fire, condemnation or Act
of God.
12.1.14 If Licensee, or any person controlling, controlled by
or under common control with Licensee, shall be
convicted or pleads guilty or no contest to a felony
charge of violating any law.
12.2 Upon occurrence of any of the events set forth in 112. 1,
Bullhide may, without prejudice to any other rights or
remedies contained in this Agreement or provided by law or
equity, terminate this Agreement. Such termination shall be
effective thirty (30) days after written notice (or such other
notice as may be required by applicable Washington law) is
given by Bullhide to Licensee of any of the events set forth
in subparagraphs 12. 1.1 through 12.1.13 if such defaults are
not cured within such period. Termination shall be effective
immediately and without notice, however, upon occurrence of
any of the events specified in subparagraphs 12.1.14, except
where prohibited by Washington law.
12.3 Upon termination of this Agreement for any reason, or upon
expiration of the term hereof Licensee agrees as follows:
12.3.1 To pay immediately to Bullhide the full amount of all
sums due under this Agreement.
12.3.2 To cease immediately to use the Bullhide Liner System
and all of the Licensed Rights provided by Bullhide
hereunder and any confusingly similar names, marks,
systems, insignia, symbols or other rights,
procedures or methods except to the extent permitted
pursuant to 14.4.
12.3.3 To return Bullhide's Operations Manual and all other
manuals, plans and specifications, designs, records,
data, samples, models, programs, handbooks or
drawings touching or concerning Bullhide's operations
or business.
12.3.4 To cease immediately to hold itself out in any way as
a Licensee of Bullhide or to do anything which would
indicate any relationship between it and Bullhide
except to the extent permitted pursuant to 12.4.
12.3.5 To permit Bullhide's agents to enter the premises and
to remove or permanently cover all signs or
advertisements identifiable in any way with
Bullhide's name or image.
12.3.6 To sell to Bullhide at their option all of the spray
mix-metering machine, including the gun and spare
parts, at a price of up to thirty-five percent (3 5%)
of its original cost depending upon the condition of
the equipment. Bullhide shall also purchase at
Bullhide's option from Licensee, all Bullhide Liner
component materials, in usable condition, at a price
of up to fifty percent (50%) of its original cost.
12.3.7 SECTION 12.3.7 IS VOID FOR THE PURPOSES OF THIS
AGREEMENT
12.3.8 Licensee shall also be responsible, at its expense,
for compliance with state or local laws, rules and
regulations for the removal of unusable chemicals or
other waste or materials considered by law to be
hazardous or not.
12.4 Termination of this Agreement shall not affect the rights of
Licensee to operate other Bullhide Liner Installation Centers
in accordance with the terms of any Unit License Agreements
until and unless such Unit License Agreements, or any of them
are terminated in accordance with their terms. Notwithstanding
the foregoing& termination of this Agreement or any default
hereunder may be grounds for termination of the Development
Agreement.
13. Assignment. Conditions and Limitations.
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13.1 If Licensee is a corporation, partnership, unincorporated
association or similar entity, the terms of this 113 shall be
deemed to apply to any sale, resale, pledge, assignment,
transfer or encumbrance of the voting stock of, or other
ownership interest in, Licensee, which would, alone or
together with other related, previous, simultaneous or
proposed transfers, result in a change of "control" of
Licensee within the meaning of the Securities Exchange Act of
1934 and the regulations thereunder.
The term "Licensee," as used in this 113, shall be deemed to
include the person or persons who control Licensee as
disclosed to Bullhide in a writing upon the execution of the
Development Agreement.
13.2 In the event of the death, disability or permanent incapacity
of Licensee, Bullhide shall not unreasonably withhold its
consent to the transfer of all of the interest of Licensee to
his spouse, heirs or relatives, by blood or marriage, whether
such transfer is made by will or by operation of law, provided
that the requirements of 13.6 hereof have been met. In the
event that Licensee's heirs do not obtain the consent of
Bullhide as prescribed herein, the personal representative of
Licensee shall have a reasonable time to dispose of Licensee's
interest hereunder, which disposition shall be subject to all
the terms and conditions for transfers under this Agreement.
13.3 If Licensee receives from a third person other than their
spouse, heirs, or relatives, and desires to accept a bona fide
written offer to purchase its business, Licensed Rights and
interests, Bullhide shall have the option, exercisable within
forty-five (45) days after receipt of written notice, and a
copy of such offer and the other information set forth in this
113.3, to purchase such business, Licensed Rights and
interests, including Licensee"s right to occupy and use the
Installation Center, on the same term and conditions as
offered by said third party. In order that Bullhide may have
information sufficient to enable it to determine whether to
exercise its option, Licensee shall deliver to Bullhide
certified financial statements as of the end of Licensee's
most recent fiscal year and such other information about the
business and operations of Licensee as they have provided to
said third party. If Bullhide does not exercise its option,
Licensee may, within sixty (60) days from the expiration of
the option period, sell, assign and transfer its business,
Licensed Rights and interests to said third party provided
Bullhide has consented to such transfer as required by this
113. Any material change in the terms of the offer prior to
closing of the sale to such third party shall constitute a new
offer, subject to the same Tights of first refusal by Bullhide
or its nominee as in the case of an initial offer. Failure by
Bullhide to exercise the option afforded by this 113.3 shall
not constitute a waiver of any other provision of this
Agreement, including a of the requirements of this 113 with
respect to the proposed transfer.
13.4 In the event Licensee or its successor is a corporation or
partnership or similar entity, it is agreed as follows: The
Articles of Incorporation (Charter) and the Bylaws
(Regulations) or the Partnership, Agreement shall reflect that
the issuance and transfer of voting stock of, or other
ownership interest dierein (*securities"), is restricted by
the terms of this Agreement. Licensee shall furnish Bullhide
at the time of execution of this Agreement or assignment to
the corporation or partnership an agreement executed by all
stockholders or partners of the Licensee, stating that no
stockholder or partner will sell, assign or transfer
voluntarily or by operation of law any securities of the
Licensee to any person or entity other than existing
stockholders or partners to the extent permitted hereunder
without the prior written consent of Bullhide. All securities
issued by Licensee will bear the' following legend which shall
be printed legibly and conspicuously on each stock certificate
or other evidence of ownership interest:
The transfer of these securities is subject to the
terms and conditions of a License Agreement with The
Bullhide Corporation, d/b/a Bullhide Liner
("Bullhide"), dated ______________________ and
certain other Agreements executed thereunder.
Reference is made to said Agreements and to the
restrictive provisions of the Articles and Bylaws of
this Corporation.
A stop transfer order shall be in effect against the transfer
of any securities on the Licensee's records, except transfers
permitted by this P. 13.
13.5 Licensee acknowledges and agrees that the restrictions on
transfer imposed herein are reasonable and are necessary to
protect Bullhide, the Bullhide Liner System and the Licensed
Rights, as well as Bullhide's excellent reputation and image,
and are for the protection of Bullhide, Licensee, and other
Licensees. Any assignment or transfer permitted by this 113
shall not be effective until Bullhide receives a completely
executed copy of all transfer documents, and consents in
writing.
13.6 Bullhide agrees not to unreasonably withhold its consent to a
sale, assignment or transfer by Licensee hereunder. Consent to
such transfer otherwise permitted or permissible as reasonable
may be refused unless:
13.6.1 All obligations of the Licensee created by this
Agreement, all other documents, including the
Development Agreement and any other Unit License
Agreement, and the relationship created hereunder are
assumed by the transferee.
13.6.2 All ascertained debts of Licensee to Bullhide are
paid.
13.6.3 Licensee is not in default under this Agreement, the
Development Agreement, or any other Unit License
Agreement.
13.6.4 Transferee satisfactorily completes the training
required of new Licensees on Bullhide then-current
terms prior to the date of transfer.
13.6.5 Licensee satisfies Bullhide that the transferee meets
all of the requirements of Bullhide for new
Licensees, including, but not limited to, good
reputation and character, business acumen,
operational ability, financial strength and other
business considerations.
13.6.6 Transferee executes or, in appropriate circumstances,
causes all necessary parties to execute Bullhide's
standard form of Unit License Agreement for the
Installation Center and such other then current
ancillary agreements being required by Bullhide of
new Licensees on the date of transfer.
13.6.7 Licensee executes a general release in a form
satisfactory to Bullhide of any and all claims
against Bullhide.
13.6.8 Licensee or transferee pays to Bullhide a transfer
fee in an amount equal to $5,000.00 to cover
Bullhide's reasonable costs in effecting the transfer
and in providing training and other initial
assistance to transferee.
13.7 This Agreement shall inure to the benefit of Bullhide, its
successors and assignees, and Bullhide shall have the right to
transfer or assign all or any part of its interest herein to
any person or legal entity.
14. Non-Competition: Confidentiality.
14.1 Licensee, and persons controlling, controlled by or under
common control with Licensee, will not, without Bullhide's
prior written consent:
14.1.1 Have any interest, direct or indirect, in the
ownership or operation of any Installation Center
engaged in the sale or use of competitive liners to
Bullhide or related products (i) within the United
States during the term of this Agreement or (ii)
within the Licensed area or within a two hundred mile
radius of the Installation Center for the term of
this Agreement.
14.1.2 At any time during the term of this Agreement or
thereafter, use, in connection with the operation of
any other shop wherever located, any of the Licensed
Rights or any other names, marks, systems, insignia
or symbols, provided by Bullhide to Licensee pursuant
to this Agreement, or cause or permit any such
Installation Center to
look like, copy or imitate any Bullhide Liner
Installation Center or to be operated in a manner
tending to have such effect.
14.2 During the term of this Agreement, any officer or area
supervisor of Bullhide or their representatives shall have the
right to inspect any Installation Center in which Licensee has
an interest at reasonable times and during normal business
hours to the extent reasonably necessary to determine whether
the conditions of this paragraph are being satisfied. If by
reason of such inspections or otherwise, Bullhide has reason
to believe that Licensee is not in full compliance with the
terms of this paragraph, Bullhide shall give notice of such
default to Licensee, specifying the nature of such default. If
Licensee denies that it is in default hereunder, as specified
by Bullhide, it shall have the burden of establishing that
such default does not exist and shall give notice to Bullhide
of its position, within ten (10) days of receipt of the notice
from Bullhide. Unless Licensee so denies such default, it
shall immediately take all steps to cure said default in a
manner satisfactory to Bullhide.
14.3 Licensee, and persons controlling, controlled by or under
common control with Licensee, shall at all times treat as
confidential the Operations Manual, any other manuals or
materials designated for user with the Bullhide Liner System
and such other information as Bullhide may designate from time
to time for confidential user with the Bullhide Liner System
(as well as all other trade secrets, if any, and confidential
information, knowledge and know-how concerning the
construction or operation of the Installation Center that may
be imparted to, or acquired by, Licensee from time to time in
connection with this Agreement), and shall use all reasonable
efforts to keep such information confidential. Licensee
acknowledges that the unauthorized use or disclosure of such
confidential information (and trade secrets, if any) will
cause incalculable and irreparable injury to Bullhide.
Licensee accordingly agrees that it shall not at any time,
without Bullhide's prior written consent, disclose (except to
such employees or agents as must have access to such
information in order to construct or operate the Installation
Center) or use or permit the use (except as may be required by
local state of federal law or authorized by this Agreement) of
such information, in whole or in part, or otherwise make the
same available to any unauthorized person or source. Any and
all information, knowledge and know-how, not generally known
in the auto after market business about the Bullhide Liner
System and Bullhide's products, services, standards,
specifications, systems, procedures and techniques, and such
other information or material as Bullhide may designate as
confidential, shall be deemed confidential for purposes of
this Agreement, except information which Licensee can
demonstrate came to its attention prior to disclosure thereof
by Bullhide, or which is or has become a part of the public
domain through publication or communication by others. The
Operations Manual, any other manuals or material designated
for use with the Bullhide Liner System and all confidential
information (and trade secrets, if any) shall at all times be
deemed to be, and shall remain, the sole property of Bullhide,
and Licensee shall acquire no
rights, title or interest therein by virtue of its
authorization pursuant to this Agreement to possess and use
the same.
14.4 Licensee shall cause any person who is actively involved in
the management or operation of the business of Licensee
pursuant to this Agreement or the operation of the
installation Center, at the time of his employment, to enter
into a Confidentiality and Non-Competition Agreement in the
form recommended from time to time by Bullhide. A copy of this
signed confidentiality & non-competition agreement shall be
sent to Bullhide upon completion. Licensee shall use his best
efforts to prevent any such persons from using, in connection
with the operation of any Installation Center wherever
located, the Bullhide Liner System and any of the Licensed
Rights or from operating any Installation Center which looks
like, copies or imitates any Bullhide Liner Installation
Center or operates in a manner tending to have such effect. If
Licensee has reason to believe that any such person has
violated the provisions of the Confidentiality and
Non-Competition Agreement of this paragraph, Licensee shall
notify Bullhide and shall cooperate with Bullhide to protect
Bullhide against infringement or other unlawful use of the
Licensed Rights or the Bullhide Liner System, including, but
not limited to, the prosecution of any lawsuits if, in the
judgment of Bullhide's counsel, such action is necessary or
advisable.
14.5 Licensee will not analyze or cause to be analyzed any of the
materials, ingredients or components thereof of any of the
products purchased from or received as samples from Bullhide,
for purposes of determining chemical or physical properties,
without Bullhide's written consent. All requests from
"authorities" for such materials shall be referred to
Bullhide.
14.6 The unenforceability of all or part of the covenants not to
compete in any state shall not affect the enforceability of
the covenants not to compete in other states, or the
enforceability of the remainder of this Agreement. The
covenants not to compete are given in part in specific
consideration for access to trade secrets provided as a part
of Bullhide's training or ongoing support programs.
15. Notices.
-------
All notices hereunder shall be in writing and shall be duly given if
hand delivered or sent by registered or certified mail, postage
prepaid, addressed:
If to Bullhide, at: The Bullhide Corporation
000 Xxxxx Xxxxxxx Xxx
Xxxxxxx, XX 00000
If to Licensee
Owner, at: 000 Xxxxxxxx Xxx.
Xxxx Xxxx, Xxxxxxxx 00000.
or at such other address as Bullhide or Licensee shall have specified by notice
to the other party hereunder.
16. Governing Law and Venue.
------------------------
This Agreement shall be deemed to have been made and entered into in
the State of Washington and all rights and obligations of the parties
hereto shall be governed by and construed in accordance with the laws
of the State of Washington and giving full force and effect to, and
that the application of the laws of Washington will not derogate
against RCW 19. 100. 180. Venue shall lie in the Superior Court in
Spokane County, State of Washington.
17. Remedies Cumulative: Waiver: Consent.
------------------------------------
All rights and remedies of Bullhide and of Licensee enumerated in this
Agreement shall be cumulative and, except as specifically contemplated
otherwise by this Agreement, none shall exclude any other right or
remedy allowed at law or in equity and said rights or remedies may be
exercised and enforced concurrently. No waiver by Bullhide or by
Licensee of any covenant or condition or the breach of any covenant or
condition of this Agreement to be kept or performed by the other party
shall constitute a waiver by the waiving party of any subsequent the
same Or breach or non-observance on any other occasion of any other
covenant or condition of this Agreement. Subsequent acceptance by
Bullhide of any payments due to it hereunder shall not be deemed to be
a waiver by Bullhide of any preceding breach by Licensee of any term,
covenants or conditions of this Agreement.
Whenever this Agreement requires Bullhide's prior approval or consent,
Licensee shall make a timely written request to Bullhide therefor, and
such approval shall be obtained in writing. Bullhide will also consider
granting, in its sole discretion, other reasonable requests
individually submitted by Licensee in writing for Bullhide's prior
waiver of any obligation imposed by this Agreement. Bullhide makes no
warranties or guarantees upon which Licensee may rely, and assumes no
liability or obligation to Licensee, by providing any waiver, approval,
consent or suggestion to Licensee in connection with this Agreement, or
by reason of any neglect, delay or denial of any request therefor. Any
waiver granted by Bullhide shall be subject to Bullhide's continuing
review, may subsequently be revoked any reason effective upon
Licensee's receipt of ten (10) days' prior written notice, and shall be
without prejudice to any other rights Bullhide may have.
18. Severablity.
------------
If any provision of this Agreement or the application of any provision
to any person or to any circumstances shall be determined to be invalid
or unenforceable, then such determination shall not affect any other
provision to any other person or circumstance, all of which other
provisions shall remain in full force and effect, and it is the
intention of Bullhide and Licensee that if any provision of this
Agreement is susceptible of two or more constructions, one of which
would render the provision enforceable and the other or others of which
would render the provision unenforceable, then the provision shall have
the meaning which renders it enforceable.
19. Entire Agreement.
-----------------
This Agreement, together with the Development Agreement and any other
Unit License Agreements thereunder, constitutes the entire agreement
between Bullhide and Licensee in respect of the subject matter hereof~
and this Agreement supersedes all prior and contemporaneous agreements
between Bullhide and Licensee in connection with the subject matter of
this Agreement. No officer, employee or other
servant or agent of Bullhide or Licensee is authorized to make any
representation, warranty or other promise not contained in this
Agreement. No change, termination or attempted waiver of any of the
provisions of this Agreement shall be binding upon Bullhide or Licensee
unless in writing and signed by Bullhide and Licensee.
20. Joint and Several Obligation .
------------------------------
If the Licensee consists of more than one person, their liability under
this Agreement shall be deemed to be joint and several.
21. Counterpart: Paragraph Headlines: Pronouns.
-----------
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument. The paragraph headings in this
Agreement are for convenience of reference only and shall not be deemed
to alter or affect any provision thereof. Each pronoun used herein
shall be deemed to include the other number and genders.
22. Acknowledgments. Licensee acknowledges that:
----------------
22.1 It has conducted an independent investigation of the business
contemplated by this Agreement and recognizes that it involves
business risks making the success of the venture largely
dependent upon the business abilities of Licensee. Bullhide
expressly disclaims the making of, and Licensee acknowledges
that it has not received or relied upon, any warranty or
guarantee, express or implied, as to the potential site,
volume, profits or success of the business venture
contemplated by this Agreement.
22.2 It has no knowledge of any representations by Bullhide or its
officers, directors, shareholders, employees, agents or
servants about the business contemplated by this Agreement,
that are contrary to the terms of this Agreement or the
documents incorporated herein, and further represents to
Bullhide, as an inducement to its entry into this Agreement,
that it has made no misrepresentations in obtaining this
Agreement.
22.3 It has received, read and understood this Agreement, the
attachments hereto, if any. Bullhide has fully and adequately
explained the provisions of each to its satisfaction; and
Bullhide has accorded it ample time and opportunity to consult
with advisors of its own choosing about the potential benefits
and risks of entering into this Agreement.
22.4 It is aware of the fact. that other Licensees of Bullhide may
now or in the future operate under different forms of
agreement and, consequently, that Bullhide's obligations and
rights in respect to its various Licensees may differ
materially in certain circumstances.
23. Effective Date.
---------------
This Agreement shall be effective as of the date it is executed by The
Bullhide Corporation, d/B/a Bullhide Liner.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement.
Bullhide:
---------
THE BULLHIDE LINER CORPORATION, d/b/a
BULLHIDE LINER
By /s/
Its
WITNESSES:
/S/ Dated:
LICENSEE:
---------
If Sole Proprietor:
By
Its
WITNESSES:
/S/
If Partnership:
By
Partner
By
Partner
Dated:
If Corporation:
/s/
By: /s/
Title: Treasurer
By:
Title
Do Not Write Below This Line
Unit License Agreement No.
