DEVELOPMENT AGREEMENT
This Agreement ("Agreement") is entered into the 9th day of June, 1998 by
and among MAXXON, INC. ("Maxxon"), TEXAS APPLIED BIOTECHNOLOGY SERVICES ("TABS")
and XXXXXXXX MANUFACTURING, INC. ("Xxxxxxxx") for the purpose of setting forth
certain preliminary agreements of the parties in connection with the manufacture
of initial tooling for the commercial development of the Maxxon Safety Syringe
TM.
Whereas, Maxxon has the exclusive right to manufacture and market the
Maxxon Safety Syringe; and
Whereas, TABS has been engaged by Maxxon as a consultant in the design and
development of a testing program which requires the building of molds to
manufacture certain parts used in the Maxxon Safety Syringe; and
Whereas, Xxxxxxxx has the expertise, knowledge and experience to
manufacture the molds according to Maxxon specification and to produce the
Maxxon Safety Syringe in quantities after the prototypes have been inspected,
evaluated, tested and approved for production; and
Whereas, in order to assure Xxxxxxxx that Maxxon has sufficient funding to
complete the initial stages of the production plan, Maxxon will deposit with
TABS a total of $125,000 for disbursement as the parties agree and Maxxon will
pursuant to this Agreement appoint TABS as Maxxon's agent for certain purposes,
including the duty to inspect, test, evaluate, modify if necessary in accordance
with this Agreement and approve the molds and the products produced by the
molds.
Now, Therefore, for good and valuable consideration, the receipt, adequacy
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Maxxon hereby appoints TABS as its agent in fact for the purposes of: (1)
receiving and holding funds of Maxxon on deposit in order to assure
Xxxxxxxx of Maxxon's ability to pay for the services of Xxxxxxxx; (2)
disbursing the funds of Maxxon to Xxxxxxxx in accordance with the accepted
production agreement and schedule attached hereto; (3) insuring that the
design, specification, quality and compliance with specification of all
molds, parts and products made; (4) assembling the working parts of the
Maxxon Safety Syringe with the new parts to be produced from the molds
being manufactured by Xxxxxxxx; (5) testing, evaluating, modifying and
retesting if necessary to assure that the final molds from which an
accepted first article for each part is made; (6) disbursing funds to
Xxxxxxxx in accordance with the schedule of 50% of the estimated costs
submitted at issue of purchase orders for mold production, 40% due with
sample submission by Xxxxxxxx and 10% with sample approval; (7) disbursing
funds in like manner for contracted mold modifications to achieve sample
approval; (8) disbursing funds in accordance with a schedule of 50% of
estimated costs submitted with issue of a purchase order for part
production/assembly and 50% upon
receipt of assembled parts meeting approved specifications; and (9)
disbursing funds to Xxxxxxxx for production of final versions of
engineering drawings and electronic files of each part.
2. TABS agrees to hold the $125,000 in a separate bank account segregated from
its other funds and not commingled therewith for the benefit of the parties
and to disburse funds from this deposit only in accordance with the
agreement of the parties set forth in this Agreement and the exhibits, as
amended by mutual written agreement of the parties from time to time.
3. TABS agrees to test, evaluate, modify if necessary in accordance with this
Agreement and approve the molds to be made by Xxxxxxxx in accordance with
the agreement of the parties and in accordance with engineering standards
of performance generally accepted in the industry in order to assure a high
quality product.
4. At the conclusion of mold modification processes, Xxxxxxxx agrees to
provide TABS with final versions of the dimensioned drawings and electronic
files for each part produced by their molds, including critical tolerances
of each part.
5. The parties agree that Maxxon and TABS are responsible for mold
specifications, and Xxxxxxxx is responsible for making the molds that
conform to the approved specifications of the parties based upon an agreed
data base. Modifications to the molds must be approved by Xxxxxxxx in order
for Xxxxxxxx to be responsible for producing molds and parts according to
agreed specifications.
6. Xxxxxxxx agrees to assemble the manufactured parts in accordance with
manufacturing standards generally accepted in the industry in accordance
with the specifications developed and approved by Maxxon/TABS and accepted
by the parties.
7. The following exhibits are attached hereto and incorporated herein by
reference:
(a) Exhibit 2--Maxxon Safety Syringe Timeline (subject to paragraph 10
below)
(b) Exhibit 3--Maxxon Safety Syringe Cost of Molds and Parts
(c) Xxxxxxxx Quotations as follows:
#0003475000-00 Luer Taper
#0003475200-00 Plunger
#0003475400-00 Syringe Barrel
#0000000000-00 Plug/Luer Taper Catch Ring
#0003475100-00 Luer Taper
#0003474501-00 Plunger Spacer
and
#0003502900-00 Assembly of Parts
7. The exhibits may be changed only by the mutual agreement of the parties.
8. The parties contemplate that there will be executed a mutually agreed
development and production agreement which will provide additional details
regarding the agreements of the parties.
9. All improvements to the design of the syringe will become the property of
Maxxon.
10. The schedule for performance hereunder is subject to force majeure events
beyond the control of a party. Upon the occurrence of an event beyond the
control of a party that is likely to result in a delay in the scheduled
time for performance, the party affected by that event agrees to notify the
other parties promptly and use is best good faith diligent efforts to
remedy the cause for the force majeure event and when remedied proceed with
diligence to perform its obligations promptly thereafter.
11. This Agreement is made and entered into in Texas and governed by Texas law.
IN WITNESS WHEREOF, the parties intending to be legally bound have executed
this Agreement with all requisite authority the 9th day of June, 1998
MAXXON, INC. TEXAS APPLIED BIOTECHNOLOGY SERVICES
BY_____________________________ BY_______________________________________
XXXXXXX XXXXX, PRESIDENT NAME:______________________TITLE________
XXXXXXXX MANUFACTURING, INC.
BY______________________________
NAME________________TITLE_____
