EXHIBIT 10.51
CONFIDENTIAL TREATMENT REQUESTED
MEMORANDUM OF UNDERSTANDING
AND CONFIDENTIALITY AGREEMENT
BETWEEN
FIRESTONE BUILDING PRODUCTS COMPANY
DIVISION OF BRIDGESTONE/FIRESTONE, INC.
525 CONGRESSIONAL BOULEVARD
CARMEL, INDIANA
AND
UNIROYAL ADHESIVES & SEALANTS DIVISION
OF UNIROYAL TECHNOLOGY CORPORATION
312 N. HILL STREET
MISHAWAKA, INDIANA
1) EFFECTIVE DATE AND TERM OF AGREEMENT:
The effective date of this Agreement between Firestone Building
Products Company, hereafter referred to as "Firestone", and Uniroyal
Adhesives and Sealants, hereafter referred to as "UAS", is February 23,
1995 (the "Effective Date"). The term of this Agreement shall be in
effect for five (5) years expiring on February 20, 2000.
2) PURPOSE:
This Agreement is entered into to provide Firestone with an exclusive
supply of adhesives and sealants at conversion pricing with materials
purchased by Firestone.
3) MINIMUM REQUIREMENT:
For a period of five (5) years from the Effective Date, Firestone will
buy from UAS and UAS will sell to Firestone a minimum of eighty percent
(80%) of
Firestone's annual volume requirements of all UAS adhesives and
sealants qualified by Firestone, including adhesive formulations
previously developed by or purchased by Firestone and those purchased
or developed during the term of this Agreement, all such products being
hereinafter referred to as "Products". Products manufactured by UAS not
meeting Firestone's specifications and roofing tapes and tape laminates
will not be included in the calculation of Firestone's total
requirements.
4) FORECAST REQUIREMENTS:
Upon signing of this Agreement and by the fifteenth day of each
calendar month thereafter, Firestone will furnish UAS with an itemized
estimate of Firestone's purchases from UAS by type and quantity for the
following three months. In addition, Firestone will provide UAS with an
annual forecast by October 1 of each twelve-month period beginning
November 1 and ending the following October 31. Uniroyal will be
responsible for all factory scheduling and raw material order releasing
as required to meet Firestone's forecasted production requirements. In
the event of an increase in premium labor cost to Uniroyal resulting
from a change in Firestone's projected 30-day requirements, Firestone
will reimburse Uniroyal for such documented premium cost increases that
have been pre-approved by Firestone.
5) RAW MATERIALS / INVENTORY MINIMUM:
Quality requirements will be mutually agreed upon and communicated to
raw material suppliers. Firestone and Uniroyal will ensure that raw
material suppliers comply with quality assurance standards and will
provide technical assistance for testing and specifications. Both
parties will use their best efforts to ensure the lowest raw material
prices for the Products. Firestone will have the primary responsibility
for negotiation of raw material purchases but may request assistance
from Uniroyal. UAS will keep in inventory fresh (within UAS' specified
shelf life) adhesives and sealants sufficient to meet Firestone's
requirements for 30 days as indicated by Firestone's forecasts and will
provide for sufficient capacity to meet Firestone's annual forecasts.
UAS will furnish to Firestone a weekly inventory summary which may be
used to adjust production requirements as necessary by Firestone.
6) TECHNICAL ASSISTANCE:
Firestone will direct all technical support, if and as required, and
will compensate Uniroyal for trials run based upon cost per hour mix
time. UAS will provide Firestone with technical assistance relating to
adhesives and sealants.
7) NEW PRODUCT DEVELOPMENT:
Should Firestone develop or cause to be developed an adhesive, primer
or sealant that it wishes to use, it will disclose such product to UAS
and will provide UAS the opportunity to manufacture the product(s),
provided that such product(s) can be produced at competitive prices.
UAS will in good faith consider production of such product(s) under
this Agreement but shall not be obligated to enter into such
production. If the parties agree upon production of such products,
Uniroyal shall qualify and begin production of such production within
one (1) year after such agreement and such products shall be Products
subject to this Agreement. If the parties do not agree upon production
of such product(s), such product(s) shall not be considered as part of
Firestone's requirements under this Agreement to the extent that
Firestone purchases such new product(s) elsewhere or manufactures them,
and Firestone will not be restricted by this Agreement from purchasing
such product(s) from any other supplier.
8) EXCLUSIVITY:
Effective upon the completion of UAS's existing obligations to other
roofing customers, which UAS estimates will occur in or about October
1995, and as long as Firestone is not in default under this Agreement,
UAS will produce all roofing Products for the exclusive use of
Firestone. Such Products will in each calendar year during the term of
this Agreement, comprise eighty percent (80%) of the volume of Products
purchased by Firestone. Such Products will include adhesive
formulations previously developed by or purchased by Firestone, as well
as Products purchased or developed during the term of this Agreement.
The parties will coordinate the public announcement of the exclusivity
provided for in this Paragraph 8 at a mutually acceptable time, but not
later than December 31, 1995.
9) PRICE / BILLING:
The price of the Products will be the sum of the costs of the raw
materials used in the production of the Products and the conversion
charges set forth in Exhibit A, such conversion charges being
hereinafter referred to as "Conversion Charges". UAS will supply
Firestone with the cost of raw materials for each formulation of
Products. It is intended that Firestone will enjoy the benefit of lower
raw material costs resulting from formulation changes developed by
Firestone. UAS will invoice Firestone for raw materials and packaging
based on minimum purchase requirements on the fifteenth (15th) day of
each month for the next month's forecasted requirements (or the minimum
required purchase quantities) based upon the then current negotiated
raw material prices. Uniroyal will bill Firestone for the Conversion
Charges on a per gallon basis once the Products have been canned or
packaged. Such Conversion Charges will be subject to change upon
notification of contractual increases in labor costs and/or increases
in utility costs of Uniroyal to perform its obligations under this
Agreement or other increases in costs resulting from formulation
changes made by Firestone. Uniroyal shall include documentation of the
cost increases with such notification. Processing efficiencies will not
affect the Conversion Charges.
10) TERMS OF SALE:
The following terms will apply to all sales:
Packaged In: Metal containers or foil-lined cartridges identifying the
manufacturer as UAS (if requested by Firestone) and meeting all U.N.
and D.O.T. regulations.
Freight Classifications: Adhesives; Flammable Liquid; Class 3; UN1133
and UN1256; Packing Group III/Isocyanates; Liquid; Class 6.1; UN2207;
Packing Group III. NMFC Item No. 170060-Roofing; Weight Class 55.
Red diamond (Flammable); Flammable Liquid, Class 3 White Diamond
(Non-flammable); harmful; stow away from foodstuffs, Class 6.1.
Payment and Price Changes: Terms shall be net ** days - Prices are
F.O.B. UAS's plant in Mishawaka, Indiana.
Standard Package:
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Confidential Information omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Minimum Orders:
MINIMUM
PACKAGE QUANTITY
11 Oz. Tubes (Lap Sealant) ********
11 Oz. Tubes (Fastener Sealer) ********
1 Qt. Tubes ********
Gallon Cans ********
5 Gallon Pails ********
55 Gallon Drums ********
DC11620 ********
Confidential Information omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Returns:
Return of merchandise (for any reason) must be pre-authorized. Please
contact Uniroyal Adhesives & Sealants Customer Service 1-800-336-1973
or 1-219-256-8655 for assistance.
11) WARRANTY:
The Products are hereby warranted to Firestone to meet the
specifications furnished by Firestone to Uniroyal, if any, for such
Products. Such warranty may not be assigned or otherwise transferred by
Firestone. UAS also makes the warranty set forth in Paragraph 16
hereof. NO OTHER WARRANTY, EXPRESSED OR IMPLIED, OF FITNESS FOR A
PARTICULAR PURPOSE OR ANY OTHER THING IS MADE. Firestone's exclusive
remedy for breach of the foregoing warranties shall be a refund of the
net price paid by Firestone for the Product in question, replacement
with a similar quantity or some other mutually agreed upon settlement.
Except as stated above, UAS shall not be liable for any defect in, or
breach of obligation relating to the quality of defects in the Products
sold pursuant to this Agreement, regardless of the theory that may be
asserted, including, without limitation, negligence, contract, absolute
liability in tort or misrepresentation.
12) COMPETITION:
On and after February 21, 1996, if Firestone obtains a bona fide offer
from a qualified toll supplier for competitive products at prices *%
lower (after all discounts) than the Conversion Cost and all other
terms are identical to the terms of this Agreement, Firestone may
provide UAS written evidence of such offer and UAS shall have the right
to:
a) meet the competitive price offer to retain its share of
Firestone's business for the said product to the extent of the
quantity contained in and period of time specified in such
offer ("Option A") or
b) decline to meet the competitive price offer and release
Firestone from its obligation to purchase its requirements of
said Product from UAS, pursuant to the terms of this
Agreement, during the period of time set forth in the
competitive offer ("Option B"). UAS's exercise of Option B in
no way shall preclude UAS from exercising Option A after a
period of twelve (12) months has elapsed from the exercise of
Option B.
In the event that UAS shall exercise Option B, Firestone shall purchase
from UAS existing work-in-process, finished goods, packaging inventory
and raw materials held by UAS in connection with such products.
Reimbursement of work-in-process and finished goods will be at
conversion costs as specified in Exhibit A. Reimbursement of raw
material and packaging costs will be at actual costs to Uniroyal not
previously paid by Firestone.
13) TOLL LICENSING OF PRODUCTS:
During the term of this Agreement and provided that Firestone is not in
default, Uniroyal will license a supplier specified by Firestone to
produce up to 20% of Firestone's annual requirements of each Product.
At the end of the term of this Agreement, Firestone will acquire the
exclusive rights and ownership of the splice adhesive patent and of all
other Products for no additional consideration. In the event that
Uniroyal shall cease to produce roofing adhesives as a result of its
election of Option B under Paragraph 12 of this Agreement for
substantially the remainder of the term of this Agreement, Uniroyal
will license splice adhesive patent number 4,603,164 to Firestone for a
royalty fee of $50,000 per year for the remainder of the term of this
Agreement; such fee will be prorated for periods of less than a year.
In the event that UAS shall cease to produce Products for reasons other
than election of Option B under Paragraph 12 of this Agreement,
Uniroyal shall release the aforesaid splice adhesive patent and
Uniroyal's rights to the other Products to Firestone for no further
consideration.
14) FORCE MAJEURE:
UAS will make a good faith effort at all times and under all conditions
to perform hereunder. UAS, however, shall not be liable for delay in
the performance or for failure to render any performance under this
Agreement, and without in any way limiting the generality of the
foregoing, any such delay or failure shall be excused, when such delay
or failure is caused by governmental regulations (whether or not
valid), fire, strike, differences with workmen, war, flood, accident,
epidemic, embargo, shortage or raw materials with which goods sold
hereunder are made, shortage of railroad cars or steamers, delays or
failures of vendors to UAS, appropriation of plant or product in whole
or in part by federal or state authority, or any other cause or causes,
whether of like or different nature, beyond the reasonable control of
UAS. UAS may make partial delivery hereunder, and to other customers,
in proportions which are reasonable under all circumstances considering
its ability reasonably to procure materials and supplies, for making
the goods herein described and other goods, its ability to produce and
deliver goods to fulfill its contracts and fill its orders and its
whole business in the usual expected course thereof.
15) RIGHT OF TERMINATION:
Firestone reserves the right to terminate this agreement upon 90 days'
written notice upon the filing of a petition for bankruptcy under the
U. S. Bankruptcy Code by Uniroyal Technology Corporation.
16) HAZARDOUS SUBSTANCES:
UAS represents and warrants that the materials provided to Firestone
contain no substances other than those disclosed to Firestone on the
material safety data sheets issued from time to time which would
necessitate either the treatment of the material as a hazardous
substance pursuant to the Federal Resource Conservation and Recovery
Act or similar legislation of which Firestone notifies UAS or which
would require safety warnings or special handling of the material due
to risk of occupational disease or personal injury. UAS agrees to
notify Firestone about basic changes in product formulation or method
of manufacture which are significant enough to impact the performance
of the product(s) and performance as it relates to FM and UL code
approvals.
17) CHANGE OF OWNERSHIP OF EITHER PARTY:
Each of UAS and Firestone agrees to cause any entity that shall acquire
ownership of such party to assume this Agreement and all of such
party's obligations hereunder.
18) CONTINGENCY:
The effectiveness of this Agreement is contingent upon Firestone's
notification of Uniroyal within 30 days from the execution of this
Agreement that Firestone has removed any provisions inconsistent with
this Agreement from any other contract to which Firestone is a party
for the purchase of liquid adhesives.
19) NOTICES:
Any forecast, notice or other communication required or permitted to be
given under this Agreement shall be deemed to have been duly given if
delivered personally or if mailed, postage prepaid, in a depository
maintained by the United States Postal Service addressed as follows:
a) if to UAS, to:
Uniroyal Adhesives & Sealants Division
Uniroyal Technology Corporation
312 North Hill Street
Mishawaka, Indiana 46544
with a copy (except forecasts) to:
General Counsel
Uniroyal Technology Corporation
Two North Tamiami Trail, Suite 900
Sarasota, Florida 34236
b) if to Firestone, to:
The Firestone Building Products Company
Division of Bridgestone/Firestone, Inc.
525 Congressional Boulevard
Carmel, Indiana 46032-5607
20) MISCELLANEOUS:
This Agreement constitutes the entire agreement between the parties,
supersedes all prior or contemporaneous written or oral understandings
and agreements and may not be modified, added to or waived, in whole or
in part, except by a writing specifically amending this Agreement
signed by the party against whom such modification, addition or waiver
is asserted. No document or form used to order or acknowledge receipt
of an order for goods purchased under this Agreement shall in any way
alter the terms of this Agreement. This Agreement shall be governed by
and construed in accordance with the laws of the State of Indiana,
without giving effect to the conflict of laws principles thereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their duly authorized officials as of February 23, 1995.
FIRESTONE BUILDING PRODUCTS COMPANY
Division of Bridgestone/Firestone, Inc.
By: /s/ Paul Mineart
Paul Mineart
President
UNIROYAL ADHESIVES & SEALANTS
Division of Uniroyal Technology Corporation
By: /s/ Robert L. Soran
Robert L. Soran
President
RIDER
TO
MEMORANDUM OF UNDERSTANDING
AND CONFIDENTIALITY AGREEMENT
BETWEEN
FIRESTONE BUILDING PRODUCTS COMPANY
AND
UNIROYAL ADHESIVES & SEALANTS DIVISION
The following provisions are incorporated in the Memorandum of
Understanding and Confidentiality Agreement dated as of February 23, 1995,
between Firestone Building Products Company Division of Bridgestone/Firestone,
Inc. and Uniroyal Adhesives & Sealants Division of Uniroyal Technology
Corporation (the "Agreement") and made a part thereof:
1) The license specified by the first sentence of paragraph 13 of
the Agreement shall be made without charge to Firestone or the
supplier.
2) The following new paragraph 21 is hereby added to the Agreement:
21. In the event that UAS shall desire to make
any changes to the formulation of any
Product, manufacturing process or quality
control standards from those in effect on
the Effective Date or as agreed to by the
parties thereafter, UAS shall consult with
Firestone and shall not implement any such
changes without Firestone's prior written
consent.
IN WITNESS WHEREOF, the parties have caused this Rider to be signed by
their duly authorized officers as of February 23, 1995.
FIRESTONE BUILDING PRODUCTS COMPANY
Division of Bridgestone/Firestone, Inc.
By: /S/ Paul Mineart
Paul Mineart
President
UNIROYAL ADHESIVES & SEALANTS
Division of Uniroyal Technology Corporation
By: /S/ Robert L. Soran
Robert L. Soran
President
AMENDMENT TO
MEMORANDUM OF UNDERSTANDING
AND CONFIDENTIALITY AGREEMENT
BETWEEN
FIRESTONE BUILDING PRODUCTS COMPANY
DIVISION OF FIRESTONE, INC.
525 CONGRESSIONAL BOULEVARD
CARMEL, INDIANA
AND
UNIROYAL ADHESIVES & SEALANTS DIVISION
OF UNIROYAL TECHNOLOGY CORPORATION
2001 WEST WASHINGTON STREET
SOUTH BEND, INDIANA 46628
WHEREAS, Firestone Building Products Company ("Firestone") and Uniroyal
Adhesives & Sealants Division of Uniroyal Technology Corporation ("Uniroyal")
entered into a Memorandum of Understanding and Confidentiality Agreement dated
February 23, 1995, which agreement as modified by a Rider dated February 23,
1995 and an amendment dated May 10, 1998 is hereinafter referred to as the
"Agreement"; and
WHEREAS, Firestone and Uniroyal desire to extend the term of the
Agreement and to amend certain other provisions of the Agreement;
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency whereof are hereby
acknowledged, the parties hereby agree as follows (terms defined in the
Agreement being used as so defined except as otherwise provided herein):
1. The term of the Agreement is hereby extended to December 31,
2002.
2. The first clause of Section 3 of the Agreement is hereby
revised to read as follows: "For the term of this Agreement,".
3. The fifth sentence of Section 5 of the Agreement is hereby
revised to read as follows: "UAS will keep in inventory fresh
(within UAS' specified shelf life) adhesives and sealants
sufficient to meet Firestone's requirements for 30 days
(except that for Splice and Quick Prime the period shall be 45
days of approved inventory) as indicated by Firestone's
forecasts and will provide for sufficient capacity to meet
Firestones' annual forecasts."
4. Exhibit A attached hereto shall replace Exhibit A to the
Agreement.
5. The following portions of Section 10 of the Agreement are
hereby revised to read as follows:
Payment and Price Changes: Terms shall be net 10 days - Prices
are F.O.B. UAS's plant in South Bend, Indiana.
Minimum Orders:
PACKAGE MINIMUM QUANTITY
10.1 Oz. Tubes (Fastener Sealer) *************
Gallon Cans *************
5 Gallon Pails *************
55 Gallon Drums *************
M6391 Pourable Sealer *************
3 Gallon Low VOC *************
Confidential Information omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Returns:
Return of merchandise (for any reason) must be pre-authorized.
Please contact Uniroyal Adhesives & Sealants Customer Service
1-800-999-4583 or 1-219-246-5321 for assistance.
6. Upon execution of this Amendment, Uniroyal shall deliver to
Firestone copies of all formulas used in producing the
Products.
7. The second sentence of Section 13 of the Agreement is hereby
revised to read as follows: "On February 22, 2000, Uniroyal
shall transfer to Firestone the exclusive rights and ownership
of the splice adhesive patent and of all the other Products
for no additional consideration, and Firestone hereby grants a
license to Uniroyal to use such patent and other intellectual
property for the production of Products covered by this
agreement.
8. The address for UAS in Section 19 of the Agreement is hereby
revised to read as follows:
Uniroyal Adhesives & Sealants Division
Uniroyal Technology Corporation
2001 West Washington Street
South Bend, Indiana 46628
Except as otherwise modified by this Amendment, all of the terms and
conditions of the Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to
Memorandum of Understanding and Confidentiality Agreement to be executed by
their duly authorized officers this 9 day of June, 1998.
FIRESTONE BUILDING PRODUCTS COMPANY
Division of Bridgestone/Firestone, Inc.
By: /s/ David Grass
David Grass
President
UNIROYAL ADHESIVES & SEALANTS
Division of Uniroyal Technology Corporation
By: /s/ Robert L. Soran
Robert L. Soran
President
EXHIBIT A
06/01/1998 THRU 05/31/1999 06/01/1999 THRU 05/31/2000 06/01/2000 THRU 12/31/2002
MAT'L CONV. TOTAL MAT'L CONV. TOTAL MAT'L CONV. TOTAL
PRICE PRICE PRICE
BONDING (M6504)
SPLICE 1 GALLON
SPLICE 5 GALLON
QUICK PRIME 1 GALLON
QUICK PRIME 5 GALLON
SPLICE WASH
POURABLE SEALER
BONDING (DC12147)
ON-PRODUCTION TRIAL BATCH
* JUNE 1998 RAW MATERIAL COSTS ARE FOR REFERENCE ONLY
Confidential Information omitted and filed separately with the Securities and
Exchange Commission. All figures deleted.