A TECHNOLOGY COLLABORATION AGREEMENT
FOR THE DEVELOPMENT OF NON-GELATIN PAINTBALLS.
An agreement dated this 7th day of March 2000 by and among: BIOPROGRESS
TECHNOLOGY INTERNATIONAL, INC., a Nevada corporation (hereinafter referred to as
BPRG) having offices situated at Xxxx 0, Xxxxxxx Xxxx, Xxxxx Xxxxxxxxxxxxxx XX00
0XX, Xxxxxxx; JT USA, L.P., a California limited partnership (hereinafter
referred to as JT) having offices at 000 Xxxx Xxxxxx Xxxx, Xxxxx Xxxxx, XX
00000, XXX; and DYE PRECISION, INC., a California corporation (hereinafter
referred to DYE) having offices at 0000 Xxxxxx Xxxxx, Xxxxx X, Xxx Xxxxx, XX
00000. JT and DYE are hereinafter jointly and severally referred to as JTR.
WHEREAS: BPRG is directly or indirectly through its wholly owned subsidiaries
the absolute and beneficial owner of all intellectual property relating to the
XGeI(TM) Film System.
JTR is a major supplier of equipment to, and a well established brand name
internationally within, the paintball leisure pursuit.
BPRG and JTR wish to collaborate with each other on an exclusive basis for
the specific purpose and sole intent of developing a new kind of non-gelatin
paintball by combining BPRG's XgeI (TM) Film System with JTR's expertise and
knowledge of the product specifications and performance characteristics required
by the paintball market in this regard.
As part of this collaboration, BPRG desires to grant JTR certain
exclusivity rights and rights of first refusal to market any non-gelatin
paintball developed by BPRG.
It is agreed as follows: The parties hereto will each use their best endeavors
to perform their respective obligations as set forth in this Agreement and with
the specific intent of developing a commercially viable non- gelatin paintball,
hereinafter referred to by the code name XGelball.
Obligations of BioProgress:
BPRG shall:
Commit such dedicated resources as may be reasonably required to produce samples
of the XGelball within the Term as defined in Clause 5, below. Produce and
provide to JTR such standard XGelball samples, in such limited quantities as
reasonably requested by JTR, as may be reasonably required by JTR to carry out
tests for trade and consumer acceptability of the XGelball, and any other tests
deemed necessary by JTR to evaluate the XGelball samples.
Diligently and promptly attend to any and all reasonable requests made by JTR
with regard to any amendments or modifications required to the XGelball samples
from time to time. Supply JTR with all material safety, regulatory and
specification data as may be reasonably required.
If commercially advantageous to do so, to assist JTR to obtain endorsements for
the XGelball from environmental, vegetarian, religious, or other special
interest groups.
Permit JTR to use BPRG's XGeI(TM) Millennium Award logo on packaging and in all
sales and marketing collateral. Save for Clause 11, below, maintain as
confidential any and all information disclosed by JTR or JTR's subsidiaries,
agents, or representatives, pursuant to the Mutual Confidentiality Agreement
between BPRG and JTR. Obligations of JTR:
JTR shall:
Provide BPRG with product samples, price information and performance
specifications for upper, middle and lower end of market paintballs, and,
further, loan to BPRG a paintball gun or guns considered by JTR to be most
suitable for use in the development work subject of this Agreement.
Provide BPRG with all information reasonably determined by JTR to be required by
BPRG to enable BPRG to meet BPRG's obligations under this Agreement.
Commit such human and financial resources to the project to conduct such tests,
evaluation, consumer trials and market research on the XGelball as may be
reasonably necessary, as determined by JTR in JTR's sole discretion, to
determine the commercial potential of the XGelball.
In a timely manner, provide BPRG with the results of the tasks to be undertaken
by JTR pursuant to Clause 3.3.
Subject to the completion of the project to the mutual satisfaction of the
parties, and in consultation with BPRG, prepare a detailed marketing plan for
the launch of the XGelball internationally, and provide to BPRG a copy of said
plan. Save for Clause 11, below, maintain as confidential any and all
information disclosed by BioProgress or BPRG pursuant to the Mutual
Confidentiality Agreement between BPRG and JTR. Finance:
In contribution toward the costs to be incurred by BPRG in meeting its
obligations under this Agreement, JTR shall pay to BPRG the amounts and at the
times as follows:
On the date hereof the sum CONFIDENTIALITY REQUESTED.
On l April 2000, and thereafter on the first of each subsequent month during the
Term of this Agreement (as defined at Clause 5, below), the sum of
CONFIDENTIALITY REQUESTED.
Payment of all sums due under this Agreement shall be made by wire transfer for
the account of BIOPROGRESS TECHNOLOGY INTERNATIONAL, INC CONFIDENTIALITY
REQUESTED.
Term of agreement: The Term of this agreement, unless terminated earlier in
accordance with Clause 5.2 hereof, shall be six calendar months from the date
hereof.
This Agreement shall be effective and continue for a minimum of three calendar
months from the date hereof, and may be terminated by JTR for any or no reason
at any time thereafter by JTR serving written notice of termination on BPRG.
In the event that JTR properly terminates the Agreement pursuant to Clause 5.2
then, provided that all payments due and outstanding at the date of termination
have been paid in full to BPRG, JTR shall be forever relieved of any and all
liabilities, no matter what kind and howsoever arising solely in connection with
this Agreement.
Notwithstanding anything contained herein to the contrary, regardless of the
termination of this Agreement, JTR shall have the exclusive rights, as set forth
at Clause 6 and Clause 7, below, to distribute any and all non-gelatin
paintballs developed by BPRG.
Exclusivity:
During the Term of this agreement, and for a minimum period of six (6)
consecutive years from the date of this agreement, BPRG shall not enter into any
discussions, negotiations, collaboration, or agreement with any third party for
the development, marketing, distribution, sale, or other exploitation of
non-gelatin based paintballs, unless and until one of the following has
occurred: JTR, in JTR's sole and absolute discretion, has consented thereto in
writing; or JTR, in JTR's sole and absolute discretion, has given BPRG written
notification that JTR does not intend to pursue the commercial exploitation of
non-gelatin based paintballs developed by BPRG; or JTR fails to meet the sales
quotas established pursuant to Clause 7 of this agreement, if (i) BPRG and JTR
have agreed to proceed to market and sell the XGelball on a commercial basis,
and (ii) BPRG has timely provided JTR with sufficient quantities of XGelball
paintballs at commercially reasonable prices as agreed by the Parties in the
marketing plan pursuant to clause 3.5 above and as amended from time to time to
reflect changes (if any) in the price of raw materials and which are beyond the
reasonable control of BPRG in order for JTR to meet such sales quotas, and (iii)
the failure of JTR is not attributable in any material respect to the failure of
BPRG to perform under this agreement. JTR is in material breach of any provision
of this Agreement and fails to rectify such material breach within sixty (60)
days of receiving written notification of the same from BPRG. Commercial
Exploitation of the XGelball: Subject to the parties hereto being satisfied in
all respects as to the quality, suitability, commercial acceptance, pricing
strategy and any and all other matters that could directly or indirectly affect
the profitable commercial exploitation of the XGelball, then forthwith upon
resolution of such matters it is the intention of the parties that, in a timely
manner, they will negotiate in good faith to draft and execute a manufacturing
and distribution agreement whereby JTR shall have the following rights:
CONFIDENTIALITY REQUESTED CONFIDENTIALITY REQUESTED Subject to all parties
hereto being satisfied with the provisions of Clause 7.1 the parties agree that,
in a timely manner, they will negotiate in good faith to draft and execute a
manufacturing and distribution agreement to produce the XGelball, and said
agreement may be in the form of a manufacturing license being granted by BPRG
exclusively to JTR, or a joint venture between the parties, or the appointment
of a third party contract manufacturer or any combination thereof. In the event
that the parties are unable to agree upon a mutually satisfactory manufacturing
and distribution agreement, then the exclusivity rights of JTR set forth in
Clause 6, above, shall continue, and JTR shall have a right of first refusal to
match (and enter into with BPRG) any other manufacturing agreement or
distribution agreement that is in good faith proposed to be entered into between
BPRG and any third party for the manufacture, sale, and/or distribution of the
XGelball paintballs and/or any and all other BPRG non-gelatin paintballs. If JTR
fails to exercise such right of first refusal, then the exclusivity rights of
JTR shall expire, provided (i) BPRG shall not enter into or modify the terms of
such third party contract unless and until the JTR is given the right of first
refusal with respect to the same, (ii) BPRG enters into said third party
contract on commercially terms that evidence the good faith of BPRG with respect
to this right of first refusal in favor of JTR, and (iii) notwithstanding
anything contained herein to the contrary, JTR shall continue to have the
non-exclusive rights set forth at Clause 7.1.2, above. Sole Agreement and
Survival: With the exception of the Mutual Confidentiality Disclosure Agreement
executed by the parties, and which shall persist during the Term and survive
this Agreement, this is the sole agreement between them in respect of the
subject matter and supersedes any and all prior agreements, whether written or
oral and actual or implied. Intellectual Property: Any and all intellectual
property existing in the XGelball to be developed by BPRG under this Agreement
shall, during and after the Term and without limitation and regardless of the
outcome of this Agreement or any future agreement between the parties, be vested
in and shall remain the absolute property of BPRG, and forever JTR will not have
any claim against and will not lay any claim thereto save for those rights
expressly provided for herein. Arms Length Agreement: Other than provided for
herein nothing in this Agreement, can or shall be construed as, or implied to
be, the grant of rights by one party to another, nor does this Agreement
constitute a partnership or joint venture between the parties. Announcements:
Both parties shall be at liberty to issue a statement announcing the execution
of this Agreement; such statement shall be limited to a summary of its terms.
Enforceability: This Agreement shall be legally binding upon the parties hereto
only in respect of the subject matter, and no party shall be liable to the other
in respect of any and all other matters whatsoever, and howsoever arising. Law
and Dispute Resolution: This agreement shall be construed in accordance with,
and governed by the Laws of the State of Nevada. Any dispute, controversy, or
claim arising out of or relating to this agreement, or the breach, termination,
or invalidity thereof, shall be settled by arbitration under the UNCITRAL
Arbitration Rules then in effect at the commencement of the arbitration. The
case shall be administered by the arbitrator selected hereunder, and the
administration shall in accordance with the UNCITRAL Arbitration Rules then in
effect. Further, the following shall apply: Arbitration. Except to the extent
that the parties agree in writing to any other method of resolution of a given
dispute, in the event of any dispute arising between the parties, or any of
them, or their successors-in-interest, concerning the enforcement, meaning or
interpretation of this Agreement, or concerning the rights, duties, or
obligations of the parties or their successors-in-interest, then such dispute
shall, with reasonable promptness, be submitted to and determined by arbitration
(under the UNCITRAL Arbitration Rules) in Vancouver, Canada, or such other sight
mutually determined by the parties. Arbitration Final and Binding; No Punitive
Damages. The decision of the arbitrator, including the determination of the
amount of damages suffered by any party hereto by reason of the acts or
omissions of any party, shall be final and binding upon the parties.
Notwithstanding the foregoing, the arbitrator shall not be authorized to award
punitive damages with respect to any such claim or controversy, nor shall any
party seek punitive damages relative to any matter under, arising out of or
relating to this Agreement in any other forum. Arbitrator Selection. The
arbitrator shall be selected by the parties, but if the parties cannot agree on
the arbitrator, then the arbitrator shall be appointed by a neutral third party
agreed upon by the parties. If a neutral third party cannot be agreed upon by
the parties, then either party may petition the appropriate court in Vancouver,
Canada, to appoint an arbitrator. Judgment on Arbitration Award. Judgment upon
any arbitration award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. In the event of an arbitration award that includes
an award of specific performance, the party so awarded the specific performance
remedy, may, if such party so elects, institute proceedings in any court having
jurisdiction of the specific performance of any such award. Stay of Defaults
During Arbitration. No party shall be considered in default during the pendency
of arbitration proceedings by virtue of a default with respect to matters which
are the subject of such arbitration and which occur during the pendency of the
arbitration. Venue for Arbitration. The parties hereby consent to jurisdictioion
and venue in the City of Vancouver, Canada, for such arbitration. Costs and
Attorney Fees to Prevailing Party. If any party shall bring an arbitration
proceeding against the other party by reason of the breach of any covenant,
warranty or condition hereof, or otherwise arising out of this Agreement, then
the prevailing party in such proceeding shall be entitled to such prevailing
party's costs of suit and reasonable attorneys' fees and accountants' fees,
which shall be payable whether or not such action is prosecuted to judgment.
"Prevailing party" within the meaning of this Section shall include, without
limitation, a party who dismisses an action for recovery hereunder in exchange
for payment of the sums due, performance of covenants breached, or consideration
substantially equal to the relief sought in the proceeding.
IN WITNESS WHEREOF the parties hereto have executed this TECHNOLOGY
COLLABORATION AGREEMENT FOR THE DEVELOPMENT OF NON- GELATIN PAINTBALLS as of the
date first above written. Signed:
A duly authorized officer for and on behalf of BIOPROGRESS TECHNOLOGY
INTERNATIONAL, INC.
Signed:
President/Manager
A duly authorized officer for and on behalf of JT USA, L.P.
Signed:
President
A duly authorized officer for and on behalf of DYE PRECISION, INC.
