Product Development And Manufacturing Agreement

PRODUCT DEVELOPMENT AND MANUFACTURING AGREEMENT


AGREEMENT made as of this 30th day of December, 1994, by and between Kurt/DynEco Compressor Corporation, a Minnesota corporation ("Kurt/DynEco"), Kurt Manufacturing Company, a Minnesota corporation ("Kurt"), and DynEco International, Inc., a Minnesota corporation ("DynEco").


WHEREAS, Kurt/DynEco has technology licensed from DynEco for the manufacture of an air compressor air end for industrial air compressors and systems but has no manufacturing facilities and desires Kurt to manufacture industrial air compressors and systems for purchase and resale by Kurt/DynEco; and


WHEREAS, Kurt has extensive know-how in the design, development and manufacture of various precision parts, components and machines and has facilities capable of manufacturing or being adapted to manufacture air compressor air ends and air compressor systems and has agreed to manufacture Kurt/DynEco's requirements by an arrangement whereby Kurt is compensated; and


WHEREAS, the parties to this Agreement desire to reduce their agreement to a writing which set forth the purpose, policy, aims and understandings between the parties hereto and each such party agrees to promote and adhere thereto;


NOW, THEREFORE, in consideration of the promises and of the mutual covenants contained herein, the parties intending to be legally bound by this Agreement, agree as follows:


A. DEFINITIONS


"INTELLECTUAL PROPERTY" means any patent, copyright, registered or
unregistered design right or trade mark, license, sublicense, know-how,
show-how or the like owned by any party hereto.


"KNOW-HOW" means any information owned by any party hereto not available
other than from such party.


"SHOW-HOW" means any information not available other than from any party
hereto, and most effectively and/or conveniently transmitted by
demonstration and/or explanation by such party.


"TECHNICAL KNOWLEDGE" means any knowledge of a party hereto which is or is
intended to be confidential and any information that is protected by any
Intellectual Property right or sufficiently secret to be either or both of
Know-how or Show-how as defined herein.


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"PROJECT" means the design, development and manufacture of air compressor
air ends and industrial air compressor systems related to the Products
contemplated by this Agreement.


"PRODUCT" OR "PRODUCTS" means industrial air compressors air ends and/or
industrial air compressor systems intended to bear the tradename or other
identification "Kurt/DynEco Compressor" and/or "Kurt/DynEco Compressor
System" or other such similar designation as designated or otherwise
described in Schedule A attached hereto.


"PROJECT INTELLECTUAL PROPERTY" means any patent, registered or
unregistered design right know-how, show-how or the like relating to the
Products or any element of or of the conduct of the project research and
development not available other than from the parties, or any of them.


"PROJECT KNOW-HOW" means the method of production of the Products and/or
Products according to information and methods devised by Kurt.


"PROJECT SHOW-HOW" means any information relating to the Products or any
element of or of the conduct of the project research and development not
available other than from the parties, or any of them, and most
effectively and/or conveniently transmitted by demonstration and/or
explanation.


"PROJECT TECHNICAL KNOWLEDGE" means any knowledge which is or is intended
to be confidential and any information that is protected by any Project
Intellectual Property right or sufficiently secret to be either or both of
Project Know-how or Project Show-how as defined herein.


"TERRITORY" means North America (the geo-political boundaries of the
United States, Canada and Mexico).


SECTION 1
INTELLECTUAL PROPERTY


1.1 Upon Kurt/DynEco disclosing Intellectual Property to Kurt in sufficient detail to enable Kurt to design, develop and produce the Products, Kurt shall make immediate arrangements to procure adequate production machinery and equipment or allocate existing machinery and/or equipment for the purpose of production of the Products and shall commence design, development and manufacture of the Products. In the absence of any other agreement the costs of such Product design and development shall be borne by Kurt on behalf of itself and Kurt/DynEco.


1.2 Should Kurt deem it necessary or desirable to arrange trial runs of the Products for evaluation of quality, such trial runs shall be conducted without delay and all data thereon made


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available to Kurt/DynEco. In the absence of other agreement the costs of such trial run shall be borne by Kurt on behalf of itself and Kurt/DynEco.


1.3 DynEco shall arrange for the attendance at Kurt's plant suitably qualified technicians on a reasonable basis who shall advise and guide those employees of Kurt so far as is necessary in or relating to the use and application of Kurt/DynEco Intellectual Property for the development and production of the Products.


1.4 DynEco warrants that the DynEco Intellectual Property rights are the property of DynEco.


1.5 Subject to the provisions and/or limitations set forth in Sections 1.6, 1.7. 1.8, and 2.2 hereinafter, all of the parties shall be free to use each and every item of Project Intellectual Property and Project Technical Knowledge as shall result from the Project even in the event this Agreement is terminated.


1.6 In respect of all Project Intellectual Property rights as require registration or application for letters patent, the parties shall collaborate to insure that: (i) all such registrations or applications are made promptly and accurately; and (ii) all necessary payments are made and all necessary formalities are timely complied with preserve the validity and integrity of such rights; and (iii) neither Kurt, Kurt/DynEco or DynEco acquires superior rights therein or thereunder.


1.7 In respect of all Project Intellectual Property rights which do not require registration or application for grant, the parties shall collaborate to insure that such rights vest either: (i) in Kurt, Kurt/DynEco, and DynEco jointly; or (ii) in Kurt, Kurt/DynEco, and DynEco individually.


1.8 In respect of all Project Intellectual Property rights provided for in Sections 1.6 and 1.7 above:


(a) each party is hereby granted unrestricted rights to use that Project
Intellectual Property without payment of any royalty or other fee for
the duration of the subsistence of that right; and


(b) each party may license any third party outside of the Territory to
use that Project Intellectual Property provided that payment of any
royalty or other fee to such party shall be shared equally with the
other parties.


1.9 No party shall cause whether directly or indirectly an ...