ENGINEERING AND MANUFACTURING AGREEMENT
THIS ENGINEERING AND MANUFACTURING AGREEMENT (the
"Agreement") is made and entered into as of this 8 day of
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January, 1997 (the "Effective Date"), by and between PARADIGM
MEDICAL INDUSTRIES, INC., a Delaware corporation ("Paradigm") and
SUNRISE TECHNOLOGIES, INC., a Delaware corporation
("Manufacturer"). Paradigm and Manufacturer are also referred to
herein, individually, as "party," and collectively, as "parties."
RECITALS
WHEREAS, Paradigm is a supplier of technical products,
services and support to the medical and health care industry;
WHEREAS, Manufacturer is an engineer and manufacturer of
medical and health care products; and
WHEREAS, Paradigm desires to obtain engineering and
manufacturing services for its products and Manufacturer desires
to provide such services as an original equipment manufacturer
("OEM");
NOW, THEREFORE, in consideration of the respective
representations, warranties, covenants and agreements contained
herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Definitions. The capitalized terms in this Agreement
shall have the following meanings unless otherwise defined
herein:
1.1 "Laser Module" shall mean the Sunlase 800 8
Watt Nd:YAG packaged as a Subassembly (as defined in Paragraph
1.2 below) with remote safety interlock, keys, power cord and
modifications thereto, as well as any other medical equipment
developed for Paradigm.
1.2 "Subassembly" means the Sunlase 800 8 Watt
Nd:YAG without the standard display input/output board or panel,
the module cover which encloses the electronic components or the
wheels; but including the following component parts: a rigid pan
to hold electronic components in place, cable connections for the
Photon Laser Phacoemulsification System (the "System") and serial
interface software to control the System laser and interface with
the System.
2. Development and Manufacturing. Manufacturer shall
produce and manufacture the Laser Module for Paradigm.
2.1 Engineering. Manufacturer agrees to design,
develop specifications and engineering documentation, make
procurements, and test and produce serial interface software to
control the
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System laser, interface with the System and replace the standard
display input/output board. As more fully set forth in Paragraph
9 below, all documentation, specifications, designs, etc.
developed during the Term or any Renewed Terms of this Agreement
(as defined in paragraph 6 below) which relate to the Laser
Module shall be jointly owned by the parties unless otherwise
agreed in writing except that any property, and the legal right
therein, developed before or independent of this Agreement shall
remain the property of the developing party.
2.2 Engineering Compensation. Paradigm shall pay
Manufacturer's reasonable engineering costs for designing and
developing the serial interface software and, if needed, revising
material components and Subassembly hardware; provided that such
costs are pre-approved in writing by Paradigm before such costs
are incurred. The specific engineering work to be performed by
Manufacturer shall be mutually agreed to by the parties following
execution of this Agreement and set forth in writing and attached
hereto as Appendix "A". When attached hereto, Appendix A shall
be incorporated herein and considered a material part of this
Agreement.
2.3 Components. Manufacturer will subcontract
production for components only, and will assemble, calibrate,
test, document and package the complete Laser Module under
Manufacturer's direct control at its own plant.
2.4 System Changes. Manufacturer will notify
Paradigm of all proposed changes to the Laser Module and will not
perform any material changes in the Laser Module after completion
of testing and delivery of prototypes without written approval by
Paradigm by means of a Manufacturer's Engineering Change Order or
other similar document. Manufacturer will supply Paradigm with
a copy of each such change order for its records. Each party
shall keep its own master engineering and medical device files.
2.5 Quality Control. Manufacturer will perform
product testing, burn-in, calibration and quality assurance
inspections for the Laser Module to comply with regulatory
standards and product performance specifications prescribed by
Paradigm. Manufacturer will keep accurate records that comply
with regulatory standards of the Food, Drug and Cosmetics Act for
each Laser Module or other product manufactured and make copies
of the same available to Paradigm for its product history and
reporting records. Paradigm shall be entitled to integrate
Manufacturer's Quality Manual or portions thereof into its own
Quality Manual.
2.6 Regulatory Approval. Paradigm shall perform or
be responsible for all clinical evaluations, testing and
documentation related to regulatory approvals as may be required
to market the Systems in the United States and abroad.
Notwithstanding the foregoing, Manufacturer will make available
to authorized representatives of the United States Food and Drug
Administration ("FDA"), all documents reasonably necessary to
demonstrate FDA Good
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Manufacturing Practice ("GMP") requirements and will make all
reasonable efforts to comply with FDA GMP requirements.
Manufacturer will also make available to authorized
representatives of the European CE Xxxx, Japanese Ministry of
Health as well as any other governmental or regulatory body which
may oversee or control the sell of the Systems, all documents
reasonably necessary to satisfy the requirements of such body and
obtain marketing approval for the Systems. Manufacturer will
also make any and all other testing records and documents
pertaining to the Laser Module or any subarrangement thereof,
available for their inspection and copying.
2.7 Service and Training. Paradigm shall be
responsible for performing field service and maintenance of the
Laser Module. Manufacturer shall train Paradigm's designated
service technicians and sales personnel as required by Paradigm
in training classes.
Training classes shall be scheduled at least two (2) weeks in
advance through Manufacturer's customer service department.
There shall be no limit to the number of students in a class.
Notwithstanding the foregoing, Paradigm shall pay Manufacturer
$500 for each class regardless of the class size. Paradigm shall
also pay any and all reasonable travel and lodging costs for
students or instructors.
3. Purchase Price of Laser Module. Paradigm will purchase
each completed Laser Module for $16,000 (the "Fixed Purchase
Price"); provided that Paradigm orders at least 80 Laser Modules
on or before December 31, 1997, for delivery on or before March
31, 1998. In the event that Paradigm does not order at least 80
Laser Modules as set forth in this paragraph 3, the following
adjusted price list shall apply to Laser Modules ordered by
Paradigm and Paradigm shall immediately remit to Manufacturer,
the difference, if any, between the Fixed Purchase Price of the
Laser Module and the appropriate adjusted price per Laser Module
(as hereinafter set forth) times the number of Laser Modules
ordered in 1997:
Number of Laser Modules Price per
Ordered in 1997 Laser Module
20 - 39 $ 18,000
40 - 59 17,000
60 - 79 16,500
80+ 16,000
Notwithstanding the foregoing, nothing in this Section 3 shall be
construed to require Paradigm to order a specific number of Laser
Modules from Manufacturer. Further, there is no limit to the
number of Laser Modules Paradigm may order in a single order
except that Manufacturer shall not be required to accept any
order for less than 20 Laser Modules and, if an order is placed
for more than 40 Laser Modules, the parties will mutually agree
to a reasonable delivery schedule. Paradigm shall pay the
purchase price of each Laser Module within thirty (30) days after
receipt of an invoice.
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4. Warranty and Service.
4.1 Warranty. Manufacturer shall provide
replacement parts or replace defective parts or components of the
Laser Module at no cost to Paradigm or the purchaser of the Laser
Module within ten (10) days after notification for one year from
the date of purchase of the Laser Module by a Paradigm customer
or eighteen (18) months from the date of delivery of the Laser
Module to Paradigm, whichever period expires first.
Manufacturers warranties shall include the implied warranty of
merchantability, but not the implied warranty of fitness for a
particular purpose. Notwithstanding the foregoing, all
warranties shall be void if a modification is made to the Laser
Module by Paradigm or its customer which does not conform to
engineering specifications or has not been authorized by an
engineering change order from Paradigm to Manufacturer.
4.2 Field Service. Paradigm will coordinate all
customer service communications, product delivery to and from
customers, field service and service billing (post-warranty where
available).
4.3 Parts. Manufacturer will make Laser Module
parts available to Paradigm for distribution to field service
organizations and Paradigm's dealers or representatives during
the Term and any Renewed Terms of this Agreement (as defined in
paragraph 6 below) and for at least two (2) years following the
termination or expiration of this Agreement. Paradigm shall
return to Manufacturer all defective parts, components or Laser
Modules replaced pursuant to Manufacturer's warranties within
thirty (30) days after replacement. If Paradigm does not return
the defective parts, components or Laser Modules to Manufacturer
within thirty days, Paradigm shall be billed for the replacement
parts, components or Laser Modules. Notwithstanding the
foregoing, nothing in this Agreement shall be interpreted as
preventing Paradigm from returning such defective parts,
components or Laser Modules upon the agreement of the parties for
a reasonable period of time not to exceed ninety (90) days.
5. Marketing. Manufacturer shall allow Paradigm's
domestic or international dealers, representatives and/or
customers to tour Manufacturer's manufacturing facility, provided
that Paradigm reviews all such requests with the Manufacturer and
provides a complete list of all proposed visitors prior to any
final commitment by Manufacturer and such tour does not
unreasonably interfere with Manufacturer's business activities.
Paradigm will make all reasonable efforts not to allow any known
competitor of manufacturer to participate in a tour of
Manufacturer's facility.
6. Term. The term of this Agreement shall commence on
the date first above written and shall expire at midnight,
Pacific Time, December 31, 1997 (the "Term"). This Agreement
shall be renewed thereafter for successive one (1) year
additional terms (each, a "Renewed Term") by mutual, written
agreement of the
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parties at least ninety (90) days prior to the expiration of the
Term or Renewed Term.
7. Covenant Not to Compete. Manufacturer hereby covenants
and agrees that during the Term and any Renewed Term of this
Agreement and for a period of two (2) years thereafter, it and
its employees will not engage in the business of retailing or
wholesaling medical lasers for cataract removal surgery and will
not develop, manufacture or provide such equipment to any other
person, business or entity during the same period of time in any
state or country in which Paradigm's products are sold or
Paradigm does business.
8. Confidentiality; Proprietary Rights.
8.1 Definition of Confidential Information. For
purposes of this Agreement, "Confidential Information" means any
customer lists, information, materials, technical data, know-how,
or trade secrets of either party, which is disclosed to or
learned by or otherwise acquired by the other party prior to or
during the Term or any Renewed Term of this Agreement or in the
course of the business discussions contemplated hereby.
8.2 Non-Disclosure of Confidential Information. The
parties agree not to use the Confidential Information for their
own use or for any purpose except as provided for in this
Agreement. The parties agree not to disclose Confidential
Information to any third party. The parties agree that they will
protect the confidentiality of, and take all reasonable steps to
prevent unauthorized disclosure or use of, the Confidential
Information to prevent it from falling into the public domain or
the public literature or to prevent it from falling into the
possession of unauthorized persons or entities. Without limiting
the generality of the foregoing, the parties agree to take the
same steps and use the same methods to prevent the unauthorized
use or disclosure of the Confidential Information as the other
party takes to protect its secret, confidential, or proprietary
information and data, including causing their employees, agents,
consultants and representatives to agree to abide by the
conditions and promises made in this Agreement. Each party will
promptly notify the other party writing of any misappropriation
or misuse by any person or entity of the Confidential Information
that comes to either party's attention.
8.3 Return of Materials. Any Confidential
information or other information, materials, or documents of
either party that are furnished to the other party hereunder or
were derived from the Confidential Information or such
information or materials will be promptly returned to the other
party, accompanied by all copies of such Confidential Information
or such other information, materials, or documents made by the
party or in the party's possession or under the party's control,
at the earlier of the other party's request for return of the
same or the termination of this Agreement
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excluding any documents required to be maintained by any
regulatory agency.
8.4 Legal Remedies. It is understood and agreed
that no failure or delay by any party in exercising any right,
power, or privilege hereunder will operate as a waiver thereof,
nor will any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other
right, power, or privilege hereunder. It is further understood
and agreed that money damages will not be a sufficient remedy for
any breach of this Section 8 by either party or any employees,
agents, consultants or representatives of that party and that the
other party will be entitled to equitable relief, including
injunctive relief and specific performance, as a remedy for any
such breach of this Agreement.
9. Inventions.
9.1 Ownership of Inventions. The parties hereby
agree that all inventions, patent applications, patents,
copyrights, trademarks, mask works, trade secrets and any
information embodying proprietary data such as technical data and
computer software first developed or generated during the
performance of this Agreement (referred to herein as the
"Invention") shall be jointly owned by the parties unless
otherwise agreed in writing. Both parties shall have the right
to use and to apply for patents, copyrights or other statutory or
common law protection for such Invention in any country.
Furthermore, each party agrees to assist the other party in every
proper way (at the other party's expense) to obtain patents,
copyrights, and other statutory common law protection for such
Inventions in any country and to enforce such rights from time to
time. Specifically, each party agrees to execute all documents
as the other party may reasonably request for use in applying for
and in obtaining or enforcing such patents, copyrights, and other
statutory or common law protection.
9.2 Disclosure of Inventions. The parties agree if
they or their employees or agents, directors, consultants or
representatives conceive, learn, make, or first reduce to
practice, either alone or jointly with others, an Invention
during the Term or any Renewed Term of this Agreement, it or they
will promptly disclose such Invention to the other party or to
any person designated by the other party, notwithstanding the
fact that it is determined that the other party has no right to
such Invention and that such Invention may be the disclosing
party's proprietary information.
9.3 Background Proprietary Property. The parties
further agree that any property and the legal right therein of
either party developed before or independent of this Agreement,
including inventions, patent applications, patents, copyrights,
trademarks, mask works, trade secrets and any information
embodying proprietary data such as technical data and computer
software shall remain the property of the developing party.
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10. Miscellaneous.
10.1 Entire Agreement. This Agreement constitutes
the entire agreement and understanding of the parties with
respect to the subject matter hereof, and supersedes all prior
agreements, arrangements and understandings related to the
subject matter hereof. No representation, promise, inducement or
statement of intention has been made by either of the parties
that is not embodied in this Agreement or in the documents
referred to herein, and neither of the parties shall be bound by
or be liable for any alleged representation, promise, inducement
or statement of intention not set forth or referred to herein.
10.2 Governing Law. This Agreement shall be
governed by and construed and enforced in accordance with the
laws of the State of California.
10.3 Amendments; Waiver. This Agreement may not be
amended, modified, superseded or canceled, nor may any of the
terms, covenants, representations, warranties, conditions or
agreements herein be waived, except by a written instrument
executed by the party against whom such amendment, modification,
supersedure, cancellation or waiver is charged. The failure of
either of the parties at any time or times to require performance
of any provision hereof shall in no manner affect the right at a
later time to enforce the same. No waiver by either of the
parties of any condition, or of any breach of any term, covenant,
representation, warranty, condition or agreement contained
herein, shall be deemed to be or shall be construed to be a
waiver or continuing waiver of any such condition or breach or a
waiver of any other condition or of the breach of any other term,
covenant, representation, warranty, condition or agreement
hereof.
10.4 Headings; Construction. The captions and
headings contained herein are for convenience of reference only,
and shall not in any way affect the meaning or interpretation of
this Agreement. Notwithstanding any rule or maxim of construction
to the contrary, any ambiguity or uncertainty in this Agreement
shall not be construed against either of the parties based upon
authorship of any of the provisions hereof.
10.5 Counterparts. This Agreement may be executed
by facsimile and may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which, when
taken together, shall constitute one and the same instrument.
10.6 Attorneys' Fees. In the event either of the
parties shall bring an action in connection with the performance,
breach or interpretation of this Agreement, or in any action
related to the subject matter hereof, the prevailing party in
such action shall be entitled to recover from the non-prevailing
party in such action all reasonable costs and expenses of such
action, including, without limitation, attorneys' fees, costs of
investigation, accounting and other costs reasonably incurred or
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related to such action, in such amount as may be determined in
the discretion of the arbitrator(s).
10.7 Severability. In the event any provision hereof
is determined to be illegal or unenforceable for any reason
whatsoever, such determination shall not affect the validity or
enforceability of the remaining provisions hereof, all of which
shall remain in full force and effect.
10.8 Further Assurances. The parties each hereby
covenant and agree that, from time to time, after the date
hereof, at the reasonable request of either party, and without
further consideration, they will execute and deliver such other
documents and instruments and take such other action as may be
reasonably required to carry out in all respects the subject
matter hereof and the intent of this Agreement.
10.9 Notices. All notices, demands and other
communications required or permitted to be given hereunder shall
be in writing and shall be deemed to have been duly given and
received (a) immediately if delivered personally, (b) seventy-two
(72) hours after deposit in the United States Mail, first class,
postage prepaid, registered or certified mail, return receipt
requested, if so mailed, (c) upon completed transmission, if
faxed, or (d) the following business day, if sent by overnight
courier. All such notices shall be addressed to the parties at
the addresses and/or fax numbers listed below. Either party may
change the address and/or the fax number to which communications
are to be directed by giving written notice to the other party in
the manner provided herein.
TO PARADIGM: PARADIGM MEDICAL INDUSTRIES, INC.
0000 Xxxx 0000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attn: Xxxxxx X. Xxxxxx, President
Fax No. (000) 000-0000
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Mackey Price & Xxxxxxxx
000 Xxxxx Xxxxxxxxxx Xxxxx
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Fax No. (000) 000-0000
TO MANUFACTURER: SUNRISE TECHNOLOGIES, INC.
00000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Light, President
Fax No. (000) 000-0000
With a copy to: Xxx X. Xxxxxxxxx, Esq.
Thelan, Marrin, Xxxxxxx & Xxxxxxx LLP
17th Floor
000 Xxxx Xxx Xxxxxx Xxxxxx
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Xxx Xxxx, Xxxxxxxxxx 00000-0000
Fax No. (000) 000-0000
10.10 No Third-Party Beneficiaries. Nothing in this
Agreement, whether express or implied, is intended to confer any
rights or remedies under or by reason of this Agreement on any
person other than the parties and their respective successors or
permitted assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third
person to either of the parties, nor shall any provision hereof
give any third person any right of subrogation or action over or
against either of the parties.
10.11 Force Majeure. Neither party shall be
responsible or liable to the other hereunder for failure or delay
in performance of the Agreement due to any war, fire, accident or
other casualty, or any labor disturbance or act of God or the
public enemy, or any other contingency beyond such party's
reasonable control. In addition, in the event of the
applicability of this Section 11.11, the party failing or
delaying performance shall use its best efforts to expeditiously
eliminate, cure and overcome any of such causes and resume
performance of its obligations.
10.12 Relationship of the Parties. Notwithstanding
any provision hereof, for all purposes of this Agreement, each
party shall be and act as an independent contractor and not as a
partner, joint venturer or agent of the other party and shall not
bind nor attempt to bind the other party to any contract or
agreement.
10.13 Successors and Assigns. This agreement shall
be binding on all successors and assigns of the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed as of the day and year first above written.
PARADIGM MEDICAL INDUSTRIES, INC.,
a Delaware corporation
By: Xxxxxx X. Xxxxxx
Title: Vice President
SUNRISE TECHNOLOGIES, INC.,
a Delaware corporation
By: Xxxxx X. Light
Title: Chairman & CEO
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