AGREEMENT
BY AND BETWEEN
BIG SKY LASER TECHNOLOGIES, INC.
AND
CELL ROBOTICS INTERNATIONAL, INC.
AGREEMENT
BY AND BETWEEN
BIG SKY LASER TECHNOLOGIES, INC.
AND
CELL ROBOTICS INTERNATIONAL, INC.
THIS AGREEMENT is made and entered into as of the 20th day of May, 1998,
by and between BIG SKY LASER TECHNOLOGIES, INC., a Montana corporation
("BSLT"), with principal offices at X.X. Xxx 0000, Xxxxxxx, Xxxxxxx 00000-0000
and CELL ROBOTICS INTERNATIONAL, INC, a Colorado corporation ("CRII"), with
principal offices at 0000 Xxxxxxxxx Xxxxxxx X.X., Xxxxxxxxxxx, Xxx Xxxxxx
00000. BSLT and CRII may hereinafter individually be referred to as a "Party"
or collectively be referred to as the "Parties."
RECITALS
WHEREAS, CRII and BSLT have designed and developed a laser skin
perforation device to be used for capillary blood sampling; and
WHEREAS, subject to the terms and conditions of this Agreement, the
parties desire to provide for CRII to have and exercise the sole right to
market and distribute for its own account the Product (as hereafter defined),
and to provide for BSLT to have the sole and exclusive right to manufacture,
for its own account, the Product.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliates" as used herein shall mean any person that directly or
indirectly controls or is controlled by or is under common control with BSLT
or CRII, their officers, directors, employees, agents, independent contractors
and/or servants, or a person that beneficially owns, directly or indirectly,
five percent (5%) or more of the equity of BSLT or CRII.
1.2 "Product" shall mean laser skin perforation devices to be used for
sampling of capillary blood in its current design configuration and with the
current dimensions and external features defined on Exhibit I hereto.
1.3 "Territory" means the entire geographical area of the world.
ARTICLE 2
MANUFACTURING
2.1 EXCLUSIVE GRANT. Subject to the terms hereof, BSLT shall have the
sole and exclusive right to manufacture the Product in the Territory at BSLT's
sole cost and expense.
2.2 OBLIGATIONS OF BSLT. BSLT agrees to maintain its manufacturing
capabilities to be able to manufacture Product, and BSLT agrees to so
manufacture the Product in accordance with specifications provided by CRII in
sufficient quantities and to the best of its abilities, meet all of CRII's
requirements pursuant to this Agreement. Except as may be expressly provided
for herein, all costs incurred by BSLT to manufacture Product shall be the
sole obligation of BSLT. For the term of this Agreement, CRII shall have the
right to place orders with BSLT for such quantities of Product as it, in its
discretion, may require from time to time, subject to the provisions of
Sections 2.3 and 4.2 hereof. BSLT agrees that for the term of this Agreement,
it will not transfer, assign, license or sublicense to any other third person
or entity, any of BSLT's right, title or interest in and to this Agreement or
otherwise undertake any delegation of BSLT's obligations hereunder, without
the express written consent of CRII. BSLT shall be responsible for the
maintenance of and compliance with all regulatory standards and requirements
necessary for the worldwide manufacture of the product.
2.3 PURCHASE ORDERS. During the term of this Agreement, CRII shall
provide BSLT with a rolling monthly 6-12-month forecast for the delivery of
Product. The first three (3) months of each such forecast shall serve as the
delivery schedule for Product to CRII. CRII shall execute and deliver to BSLT
Purchase Orders providing for the manufacture by BSLT and purchase by CRII of
quantities of the Product, as specified and defined in said Purchase Orders.
Such Purchase Orders shall identify the quantity and delivery date for such
Product which shall not be less than sixty (60) days of the Purchase Order.
BSLT agrees to manufacture and deliver Product in accordance with each
Purchase Order delivered by CRII unless, within five (5) days following
receipt by BSLT of such Purchase Order, BSLT serves written notice upon CRII
that BSLT will be unable to comply with the quantity and delivery dates
specified in such Purchase Order, and the reasons therefor. In such event,
the parties shall exercise good faith best efforts to agree upon a
modification of such Purchase Order which shall satisfy the requirements of
both CRII and BSLT.
2.4 OBLIGATIONS OF CRII. CRII shall be responsible for procuring and
delivering to BSLT, at CRII's sole cost and expense, the laser rods,
reflectors and lenses to be incorporated into the Product. Further, CRII
shall provide at its sole cost and expense final packaging, lense cleaning
kits, carrying cases, disposables, user manuals and battery chargers to be
used in conjunction with the Product. CRII agrees that for the term of this
Agreement, it shall not transfer, assign, license or sublicense to any third
person or entity, any of CRII's rights, title, interest or obligations
hereunder with respect to the Product without the express written consent of
BSLT.
2.5 PRICE. The purchase price to be paid to BSLT by CRII for the
Product shall be the lesser of (i) Eight Hundred Dollars ($800) per unit, or
(ii) the quotient of (a) BSLT's Material Cost of Parts ("MCOP") divided by (b)
six tenths (.6). For the purposes of this Agreement, BSLT's MCOP shall
include BSLT's direct out-of-pocket expenses for parts and raw materials used
in connection with the manufacture of the Product. MCOP shall not include any
costs incurred for tooling, molds and castings, nor any expense for salaries,
general and administrative costs, overhead or direct or indirect labor. CRII
shall have the right to review BSLT's MCOP and to request that BSLT purchase
parts and raw materials from vendors identified by CRII to the extent such
alternative sources provide parts and raw materials that meet BSLT's vendor
qualification guidelines at preferred prices. Upon delivery and acceptance by
CRII of Product pursuant to each Purchase Order, BSLT shall prepare and
deliver to CRII a billing invoice payable on a net thirty (30) day basis.
CRII shall pay each invoice for all accepted product not later than thirty
(30) days from the date of billing and, if such invoice is not paid in a
timely manner, a late payment fee equal to one percent (1%) per month may be
added by BSLT to the net amount due and owing.
2.6 DEMONSTRATION UNITS. Notwithstanding the provisions of 2.5 above,
BSLT agrees to provide CRII with demonstration units of Product up to a
maximum quantity of one hundred (100) units, at a price equal to BSLT's MCOP.
Manufacture and delivery of demonstration units shall be in accordance with
the other provisions of this Agreement.
2.7 DELIVERIES. Deliveries shall be made by BSLT at CRII's expense to
CRII in Albuquerque, NM. All risk of loss of Product during transit shall be
borne by CRII, it being expressly agreed that terms of shipment are F.O.B.
carrier. IF CRII fails to pay any invoice within thirty (30) days following
the due date, BSLT shall have the right to suspend further deliveries until
all delinquent invoices have been paid in full. BSLT shall not be liable for
any delays or failures in delivery due to circumstances beyond its reasonable
control.
2.8 ACCEPTANCE. All deliveries under this Agreement shall be subject to
acceptance by CRII. Any objections shall be in writing by CRII and shall set
forth in detail the reasons therefor. If CRII does not reject any delivery
within twenty (20) days of receipt, it shall be deemed to be accepted and BSLT
will be paid for the accepted product in accordance to 2.7 of this Agreement.
If CRII rejects any merchandise or a portion thereof, it shall be deemed
rejected for all purposes of this Agreement and BSLT will issue a credit memo
to CRII for the rejected Product.
ARTICLE 3
MARKETING
3.1 EXCLUSIVE GRANT. Subject to the terms and conditions hereof, CRII
shall have the sole and exclusive right to promote, market, sell and
distribute the Product throughout the Territory, at CRII's sole cost and
expense, either directly or by engaging the services of independent sales
representatives, dealers and distributors. For the term hereof and except as
provided for in Section 4.3 hereof, BSLT shall not promote, market, sell
and/or distribute the Product in any location within the Territory, nor grant
to any other party the right to so promote, market and/or distribute the
Product in the Territory, without the express written consent of CRII. BSLT
shall refer all inquiries for product to CRII without charge. All expenses
incurred by CRII in connection with the promotion, marketing, sales and
distribution of Product shall be the sole and exclusive responsibility of
CRII.
3.2 REGULATORY CLEARANCES. CRII shall have the right to apply for and
maintain all regulatory clearances and other governmental approval required to
market, sell and distribute the Product. All such regulatory approvals and
clearances obtained by CRII throughout the term shall be the sole and
exclusive property of CRII.
3.3 TRADEMARKS. Throughout the term of this Agreement, CRII shall have
the right to develop, utilize and affix such trademarks, copyrights,
tradenames, service marks, as well as associated designs and logos, as it may
desire for use in connection with the sale of Product. Any and all such
trademarks, copyrights, tradenames, service marks, designs and logos, if and
to the extent developed by CRII, shall be the sole, separate and exclusive
property of CRII. CRII shall have the exclusive right to apply for, hold and
maintain any and all registrations of such trademarks, copyrights, tradenames,
service marks, as well as associated designs and logos developed by it
throughout the term in connection with the marketing, sale and distribution of
Product.
3.4 CUSTOMER SUPPORT. During the term of this Agreement, CRII shall be
responsible for all customer interaction and support, as well as technical
support for customers and end users. All costs incurred by CRII in connection
with customer service and support shall be borne solely by CRII.
ARTICLE 4
PERFORMANCE REQUIREMENTS
4.1 INITIAL ORDER. Upon execution of this Agreement, CRII shall place
an initial order for Product consisting of a minimum of seventy-five (75)
units which shall be manufactured by BSLT and sold to CRII at a price of Eight
Hundred Dollars ($800) per unit. The pricing provisions of Section 2.5 shall
apply to all subsequent orders of units.
4.2 SUBSEQUENT MINIMUM ORDERS. During the first twelve (12) month
period following the execution of this Agreement, CRII agrees to purchase from
BSLT a minimum of one thousand five hundred (1,500) units of Product. During
the second year of the term of this Agreement and for each year thereafter,
CRII agrees to purchase from BSLT a minimum of three thousand (3,000) units of
Product. These minimum quantities shall be calculated based upon Purchase
Orders executed by CRII within each twelve (12) month period during the term
hereof. Orders shall be placed in minimum quantities of 500 units. The
delivery schedule of each order will be determined by the monthly forecast
described in Section 2.3 above.
4.3 FAILURE TO SATISFY MINIMUM. The minimum purchase quantity to keep
this agreement in effect will be 1,500 units during the first twelve months
following the date of this agreement and 3,000 units during the second year of
the agreement. If these quantities are met, BSLT agrees not to compete while
this Agreement is in effect. BSLT will not compete the first year if CRII
fulfills the minimum purchase quantity. After the first eighteen months
following the execution of this agreement, BSLT may compete with CRII if
either of the two following events happen: 1. CRII is manufacturing and/or
selling another laser finger perforator and 2. Purchases from BSLT are less
than 500 units per quarter. BSLT nevertheless shall continue to be subject to
its agreement to manufacture Product for CRII in accordance with this
Agreement.
ARTICLE 5
WARRANTY AND SERVICE WORK
5.1 MANUFACTURER'S WARRANTY. BSLT shall warrant that all Product
manufactured by it for CRII shall be free from defects in material or
workmanship. BSLT shall provide an express warranty that should any Product
prove to be defective in workmanship or materials within a period of twelve
(12) months from the delivery thereof, BSLT shall repair or replace at its own
discretion and subject to CRI acceptance, without cost to CRII or the end
user.
5.2 WARRANTY CLAIMS. Throughout the term of this Agreement, CRII shall
be responsible for all costs incurred in connection with warranty claims
arising from an alleged failure or defect in the laser rods, lenses and
reflectors provided by CRII. All costs associated in connection with or
incurred by virtue of claims based upon an alleged failure in coatings will be
shared equally by the parties, providing, however, that BSLT shall have the
right to approve vendors selected to provide such coatings. All other
warranty claims based upon alleged defects in materials or workmanship in
connection with the marketing and sale of Product shall be the sole and
exclusive responsibility of BSLT.
5.3 PRODUCT REPAIRS. BSLT shall be responsible to perform any and all
repairs or replacements outside of Product warranty and shall be entitled to
reimbursement from CRII of all costs and reasonable profit therefor, within 10
days after CRII receives payment from the end user or customer.
ARTICLE 6
PROPRIETARY RIGHTS
6.1 FUTURE PRODUCTS. Nothing contained in this Agreement shall grant to
either party any right, title or interest in and to any future design or
configuration of a laser skin perforator which may be developed by either
party in the future, including future generations of Lasette.
ARTICLE 7
DISPOSABLES
The parties acknowledge that the proper use of the Product requires the
use of disposable plastic xxxxxxx. CRII shall be responsible for obtaining the
xxxxxxx which will be provided to end users both on the initial unit purchase
and thereafter re-supplied on an ongoing basis. CRII will be entitled to
recoup the manufacturing cost for the xxxxxxx less tooling for molds and the
accumulated revenue loss from disposable sales, prior to the equal division of
gross profits from the sales of xxxxxxx which will be dispersed on a quarterly
basis by CRII. CRII will have the exclusive rights to sell, market and
manufacture the xxxxxxx.
ARTICLE 8
TERM AND TERMINATION
8.1 TERM. The term of this Agreement shall commence upon the date
hereof and shall terminate upon the first to occur of any of the following
("Event of Termination"):
8.1.1 Either Party may terminate this Agreement with cause upon
sixty (90) days' written notice and the breaching party will have a 30 day
opportunity to cure in the event of a material breach of any term, covenant,
representation or warranty by the other Party.
8.1.2 Five (5) years from the date hereof.
8.2 TERMINATION PROVISIONS. Upon termination of this Agreement, the
following provisions shall control the respective rights and obligations of
the parties:
8.2.1 All outstanding Purchase Orders for Product shall be
fulfilled by the Parties in accordance with their respective responsibilities
and obligations under this Agreement.
8.2.2 All confidential information of each Party made or
developed during the term of this Agreement shall be held in strictest
confidence by the other and may not be used, disclosed or otherwise exploited
by the other Party for any purpose whatsoever.
ARTICLE 9
MISCELLANEOUS
9.1 NO ASSIGNMENT. Neither Party may transfer, sell or assign to any
third party its respective rights, duties or obligations hereunder without the
express written consent of the other Party.
9.2 NOTICES. Any notice to be given or to be served upon any Party
hereto in connection with this Agreement must be in writing, may be given by
registered or certified mail, and shall be deemed to have been given and
received when a registered or certified letter containing such notice,
properly addressed, with postage prepaid is deposited in the United States
mails. If given otherwise than by registered or certified mail, it shall be
deemed to have been given when delivered in hand to the Party to whom it is
addressed. Such notices shall be given to the parties hereto at the addresses
set forth on the signature page of this Agreement.
9.3 BINDING EFFECT. This Agreement and the covenants, obligations,
undertakings, rights and benefits hereof shall be binding upon, and shall
inure to the benefit of, the respective parties hereto and their respective
heirs, executors, administrators, representatives, successors and assigns.
9.4 INTERPRETATION. Words of any gender used in this Agreement shall be
held and construed to include any other gender, and words in the singular
number shall be held and construed to include the plural, unless the context
requires otherwise.
9.5 ARBITRATION. Should a dispute over this Agreement or any of its
terms or provisions arise, the Parties now agree that such situation shall be
submitted to arbitration in the Albuquerque, New Mexico area, under the rules
of the American Arbitration Association then in effect and that the decision
or opinion thereby obtained shall be binding on the Parties. Failure of
either Party to either submit to arbitration hereunder or to abide by the
decision or opinion of the arbitrators shall be a substantial breach of this
Agreement. The prevailing Party in any such arbitration, or any other legal
proceeding, shall be entitled to its costs, attorneys' fees and all expenses
of such action.
9.6 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Mexico.
9.7 MODIFICATION. This Agreement may not be amended or modified except
in writing executed by the unanimous consent of all parties.
9.8 EXECUTION IN COUNTERPARTS. This Agreement may be executed telex,
telecopy or facsimile transmission and by one or more parties in several
counterparts and all such counterparts so executed shall together be deemed to
constitute one final agreement as if signed by all parties and each such
counterpart shall be deemed to be an original.
9.9 HEADINGS. Descriptive headings are for convenience only and shall
not control or affect the meaning or construction of any provisions of this
Agreement.
9.10 ENTIRE AGREEMENT. This Agreement contains the entire understanding
between the parties and supersedes any prior understandings and agreements
among them. There are no representations, agreements, arrangements or
understandings, oral or written, between and among the parties hereto relating
to any of the provisions of this Agreement which are not fully expressed or
incorporated by reference herein.
9.11 NO THIRD PARTY BENEFICIARIES; NO AGENCY. Except as expressly
provided herein to the contrary, no provisions of this Agreement, expressed or
implied, are intended or will be construed to confer rights, remedies, or
other benefits to any third Party under or by reason of this Agreement. This
Agreement will not be construed as creating an agency, partnership or any
other form of legal association (other than as expressly set out herein)
between the Parties. CRII and BSLT shall at all times and for all purposes
hereunder be deemed independent of one another, and no Party shall directly or
indirectly imply or represent to others, or permit their agents or employees
to imply or represent to others that it has the authority to act for,
represent or bind the other in any manner by virtue of this Agreement.
9.12 GOVERNMENT RESTRICTIONS. Each Party agrees to comply with all laws,
both present and future, including those of any governmental agency or court
having jurisdiction over any Party hereto, and to orders, regulations,
directions or requests of any such government agency or court. The Parties
hereto shall be excused from any failure to perform any obligation hereunder
to the extent such failure is caused by any such law, order, regulation,
direction or request. In addition, each Party will (I) comply with all United
States Department of Commerce and other United States export controls with
respect to the subject matter hereof, and (ii) not produce or distribute any
Products in any country where such production or distribution would be
unlawful.
9.13 NON-WAIVER. The waiver of any Party hereto of a breach or default
of any of the provisions of this Agreement by another Party, shall not be
construed as a waiver of any succeeding breach of the same or other provisions
of this Agreement, nor shall any delay or omission on the part of a Party
hereto to exercise or avail itself of any right, power or privilege that it
has or may have hereunder, operate as a waiver of any such right, power or
privilege by such Party.
9.15 PAYMENT OF EXPENSES OF PREVAILING PARTY IN DISPUTE. Unless
otherwise specifically provided for herein, in the event that there is a
dispute concerning this Agreement, including, without limitation, the issue of
compliance with any term of this Agreement, the prevailing Party shall be
entitled to reimbursement from the other Party or Parties, of reasonable
attorneys' fees and other expenses incurred in resolving the dispute.
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement
on the day and date first above written.
CELL ROBOTICS INTERNATIONAL, INC.,
a Colorado corporation
0000 Xxxxxxxxx Xxxxxxx X.X.
Xxxxxxxxxxx, Xxx Xxxxxx 00000
By:*
-----------------------------------------
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BIG SKY LASER TECHNOLOGIES, INC.,
a Montana corporation
X.X. Xxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
By:
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* Subject to approval by CRII Board of Directors
