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Supply and License Agreement - SheerVision inc.

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CONFIDENTIAL TREATMENT REQUEST

[*] indicates information that has been omitted pursuant to a confidential
treetment request and this information has been filed under Separate Cover with
the Commission.

[*]

                          SUPPLY AND LICENSE AGREEMENT

THIS IS AN AGREEMENT, ("Agreement") dated 4/7/03 ("Effective Date") between [*]
located at [*] ("[*]") and SheerVision, Inc., located at 4276 Admirable Drive,
Rancho Palos Verdes, California 91275 ("SheerVision").

                                  WITNESSTHETH

WHEREAS, [*] distributes and sells optical products for the medical products
market; and

WHEREAS, SheerVision designs and manufactures premium quality optical products;
and

WHEREAS, [*] and SheerVision wish to enter into a relationship wherein
SheerVision develops and manufactures premium quality optical products under the
[*] label, for [*] to market and distribute.

NOW THEREFORE, in consideration of mutual promises and agreements set forth
herein, the parties agree as follows:

1.    PRODUCT

      SheerVision will develop and manufacture certain products for [*] under
      the terms and conditions of this Agreement. The products contemplated by
      this Agreement are further described in SCHEDULE A (the "Product(s)").
      Products may be added or deleted from this Agreement with mutual written
      agreement by [*] and SheerVision.

2.    TERMS OF THIS AGREEMENT

      A.    PAYMENT.

            (i)   TERMS OF PAYMENT

            Terms of payment will be net thirty (30) days from the receipt of
            invoice. Notwithstanding the foregoing, for the first order placed
            under this agreement, dated April 8, 2003 for 500 Products, one half
            of the total invoice amount shall be paid upon the issuance of said
            purchase order with the remaining balance due net thirty (30) days
            from receipt of invoice.

            (ii)  SET OFF

            [*] shall be entitled at all times to set off any amount owing to
            SheerVision from [*] against any amount due or owing [*] from
            SheerVision.

      B.    DELIVERY

            FOB [*]'s USA location as listed above.

      C.    ADDITIONAL TERMS & CONDITIONS

            [*] standard Terms and Conditions as stated above shall apply to all
            transactions hereunder unless otherwise modified by this Agreement.

* Portions of this exhibit have been omitted and filed separately pursuant to an
application for confidential treatment filed with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended.

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SUPPLY AND LlCENSE AGREEMENT
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3.    QUANTITY, PRICING AND STANDARDS OF PERFORMANCE

      A.    QUANTITY / ROLLING FORECAST/ ORDERS

            i.    There is no fixed minimum or maximum quantity per annum.

            ii.   The quantity of Product to be purchased during this Agreement
            is based on a rolling forecast, provided for every six-month period
            under this Agreement, beginning on the Effective Date. Orders will
            be for a minimum of 300 Products.

            iii.  Orders will be placed through standard [*] purchase order. [*]
            may make changes to orders up to 45 days before delivery without
            penalty.

      B.    PRICING

            The price per unit for the Products during the Term of this
            Agreement is set forth in SCHEDULE A.

      C.    TIMING

            SheerVision acknowledges that in providing the Products to [*] time
            is of the essence. If SheerVision fails to provide the Products
            within ten (10) days of the date specified on the monthly Purchase
            Order, it will pay or credit to [*] [*] of the specified order and
            [*] for each additional ten (10) days which the delivery of the
            Product is delayed.

      D.    QUALITY

            All Product delivered under this Agreement must meet all applicable
            requirements to include performance specifications, workmanship
            standards and suitability for its intended purpose. Product shall be
            undamaged and in "new" condition. Final acceptance of all Product
            shall take place at [*]'s location prior to use. Product shall

            include test data where required including certification to all
            applicable standards and specifications.

            Products must be coded to permit tracking by batch, lot, date or
            similar identifying number to allow for efficient methods of
            identification once sold into the market.

      E.    PRODUCT SPECIFICATIONS

            SheerVision will provide detailed Product specifications and will
            provide Product as per those specifications, as attached in SCHEDULE
            C. [*] may change specifications according to the Engineering Change
            Order ("ECO") process to be mutually developed by the parties within
            eight (8) weeks of the Effective Date. After completion, the ECO
            process will be incorporated herein as SCHEDULE D (not yet
            completed). SheerVision will notify [*] (verbally followed by
            written notice within twenty-four (24) hours) if possible at the
            time of ordering/release or earlier and prior to the shipment of any
            specification, optical or cosmetic changes from what has been
            previously agreed upon which may affect form, fit, function or
            cosmetic issues. [*] will notify SheerVision (verbally followed by
            written notice within twenty-four(24) hours) if the Product in its
            modified form is acceptable to [*]. Any costs associated with
            correcting any material received at [*]'s possession without prior
            notice and approval of specification changes will be the
            responsibility of SheerVision.

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SUPPLY AND LICENSE AGREEMENT
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      F.    MARKETING MATERIALS

            [*] will provide marketing materials and specifications for the same
            as needed. SheerVision will make all marketing materials for the
            Product available in digital format to [*] including without
            limitation, including images, user manuals and training materials.

      G.    PACKAGING AND SHIPMENT

            SheerVision will ship Product to [*]'s location in accordance with
            good commercial practice, acceptable to common carriers for shipment
            in the specified manner and adequate to insure safe arrival of the
            goods at [*]'s place of business. Individual Product packaging will
            be those wooden boxes SheerVision currently provides customers.
            Changes to Product packaging can be made at [*]'s request upon at
            least sixty (60) days' notice and reasonable price changes to
            accommodate either lower or higher costs of such packaging changes
            will be subject to mutual negotiation.

      H.    COST REDUCTION/CONTINUOUS PROCESS IMPROVEMENT

            SheerVision and [*] will conduct regular joint Product review
            process to provide a basis for future cost reductions and Product
            improvements. These price reductions can be implemented at any time
            during the Term, upon mutual agreement of the parties. SheerVision
            also agrees to pursue actively a process improvement program aimed
            at reducing cycle time and improve quality. The parties will meet at
            least once every 18 months under this Agreement, for the purpose of
            reviewing quantities and pricing. The parties will work in good
            faith to reach mutual agreements as to the foregoing.

      I.    COMPLIANCE WITH LAWS

            SheerVision will conduct all activities under this Agreement in full
            compliance with the laws and regulations of the United States as
            well as those required for obtaining and maintaining CE mark
            approval in the European market. SheerVision will provide [*] a copy
            of its CE mark certification book.

4.    WARRANTY

      A.    WARRANTY

            SheerVision warrants that all Products delivered hereunder shall be
            free from defects in workmanship, material and manufacture, of
            merchantable quality, fit for their generally intended use, and
            shall comply with the requirements of this Agreement, including any
            drawings or specifications incorporated herein or samples furnished
            by SheerVision, and, where design is SheerVision's responsibility,
            be free from defects in design, for a period of 18 months after
            purchase.

            SheerVision warrants that it shall at all times faithfully,
            industriously, and to the best of its ability, experience, and
            talents, render all of the services that may be required of
            SheerVision pursuant to the express and implied terms of this
            Agreement.

            The foregoing warranties shall constitute conditions and are in
            addition to all other warranties, whether expressed or implied, and
            shall survive any delivery, inspection, acceptance, or payment by
            [*].

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SUPPLY AND LICENSE AGREEMENT
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      B.    FAILURE TO COMPLY

            If any Product delivered hereunder does not meet the warranties
            specified herein or otherwise applicable, [*] may at its option (i)
            require SheerVision to correct at no cost to [*] any defective or
            nonconforming Product by repair or replacement, or (ii) return such
            defective nonconforming Product at SheerVision's expense to
            SheerVision and recover from the SheerVision the order price
            thereof, or (iii) if SheerVision has failed to correct the problem
            within 30 days from the date the nonconforming Product is returned,
            correct the defective or nonconforming Product itself and charge
            SheerVision with the cost of such correction. The foregoing remedies
            are in addition to all other remedies at law or in equity or under
            this Agreement and shall not be deemed to be inclusive. All
            warranties shall run to the [*] and to its customers.

      C.    RESPONSIBILITY

            [*]'s approval of the SheerVision's Product or design shall not
            relieve SheerVision of the warranties set forth herein, nor shall it
            constitute a waiver by [*] of any drawing or specification
            requirements for one or more of the remaining Product to be
            delivered hereunder unless so stated by [*] in writing. The
            provisions of this Paragraph shall not limit or affect the rights of
            [*] under the Paragraph entitled "INSPECTION".

5.    INSPECTION

      A.    INCOMING INSPECTION

            All Products shall be subject to inspection and test by [*] to the
            extent practicable at all times and places, including, but not
            limited to, the period of manufacture and prior to final acceptance.
            If inspection or test is made by [*] on SheerVision's premises,
            SheerVision, without additional charge, shall provide all reasonable
            facilities and assistance for the safety and convenience of [*]'s
            inspectors. [*] shall notify SheerVision no less than forty-eight
            (48) hours in advance of an inspection at SheerVision's location. No
            inspection or test made prior to the final inspection and acceptance
            shall relieve SheerVision from responsibility for defects or other
            failure to meet the requirements of this Agreement or any Purchase
            Order hereunder.

      B.    DEFECTIVE PRODUCTS - MANUFACTURER'S DEFECTS

            If any Products are defective in material or workmanship or
            otherwise not in conformity with the requirements of a Purchase
            Order, [*] shall have the right to reject it, require its
            correction, or accept it with an adjustment in price. If [*] so
            requests, any Products which have been rejected or required to be
            corrected shall be replaced or corrected by and at the expense of
            SheerVision promptly after notice from [*]. If, after being
            requested by [*], SheerVision fails to promptly replace or correct
            any defective Products within its delivery schedule, [*] may in its
            sole discretion, (i) by contract or otherwise, replace such Products
            and charge to SheerVision the cost occasioned thereby, (ii) without
            further notice, terminate this Agreement for default in accordance
            with the Paragraph herein entitled "TERMINATION", or, (iii) may
            require an appropriate reduction in price.

      C.    FINAL INSPECTION

            Not withstanding any prior inspections or payments hereunder, all
            Products shall be subject to final inspection and acceptance at
            [*]'s location within a reasonable time after delivery. The
            SheerVision shall provide and maintain a quality system which is
            acceptable to [*] during the performance of a Purchase Order and for
            such further period as the [*] may determine.

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SUPPLY AND LICENSE AGREEMENT
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6.    ACCEPTANCE

      This Agreement, along with the terms and conditions of any Purchase Order
      generated by [*], is the sole Agreement between the parties covering
      Product ordered by [*] when a Purchase Order is accepted by acknowledgment
      or commencement of performance by SheerVision. A PURCHASE ORDER CAN BE
      ACCEPTED ONLY ON THESE TERMS AND CONDITIONS. Additional terms proposed by
      SheerVision will not be applicable unless accepted in a signed writing by
      the [*]. No change, modification or revision of a Purchase Order shall be
      effective unless in writing and signed by [*].

7.    EXCLUSIVITY

      SheerVision will not contract with any other party for furnishing the
      Products, nor will it distribute the Products itself. Further, SheerVision
      agrees that as of the Effective Date, it will not enter into any new
      relationships with third parties for providing private label products
      similar to the Products.

      When [*] purchases 1500 or more Products per annum, [*] will become the
      exclusive reseller of all SheerVision products within the applicable
      market for the Products. Thereafter, SheerVision will not contract with
      any other party for the distribution or manufacture of products similar to
      the Products. However, SheerVision may sell similar products directly to
      end users, but not to parties for resale.

8.    DEVELOPMENT

      [*] reserves a right of first refusal to distribute under private-label,
      all new loupe products developed by SheerVision. Within eight (8) weeks of
      the introduction of the new product to [*], including technical, prototype
      and business plans, [*] will confirm in writing whether it will distribute
      the proposed new product. If [*] rejects the proposed new product,
      SheerVision. will not offer the same to a third party under terms
      materially different from those offered to [*].

9.    LIMITED LICENSE / NON-DISCLOSURE OF CONFIDENTIAL INFORMATION

      A.    LIMITED LICENSE

      [*] hereby grants to SheerVision a non-exclusive right and license to use,
      solely for the purposes and duration of this Agreement, the trademarks and
      logo set forth on SCHEDULE E (the "Trademark(s)"). The exact placement and
      use of the Trademark(s) will be in accordance with [*]'s policies and
      procedures for use of the same, as provided to SheerVision, and will be
      subject to approval by [*]. The foregoing license and all right to use the
      Trademark(s) will automatically terminate upon termination of this
      Agreement.

      B.    NON-DISCLOSURE OF CONFIDENTIAL INFORMATION

      Any specifications, drawings, sketches, models, samples, data, computer
      programs or documentation, or technical or business information
      ("Information") furnished or disclosed between the parties hereunder shall
      be deemed Confidential and, when in tangible form, shall be returned to
      the disclosing party upon completion or termination of authorized work or
      this Agreement unless otherwise indicated by the disclosing party. Unless
      such information was previously known to the parties free of any
      obligation to keep it confidential, or has been or is subsequently made
      public, either by the parties or by a third party, it shall be held in
      confidence by the parties, and shall be used only for the purposes
      hereunder, and may be used for other purposes only upon such terms and
      conditions as may be mutually agreed upon in writing.

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SUPPLY AND LICENSE AGREEMENT
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      Neither party shall advertise, market or otherwise make known to others
      any Information relating to the work performed under this Agreement,
      including mentioning or implying the name of either party, their
      subsidiaries or affiliates, except as expressly provided for herein. In
      the event of a material breach of the obligations in this paragraph 12,
      either party may have the right to terminate this Agreement pursuant to
      paragraph 12 (b).

10.   INSURANCE

      SheerVision and [*] agree to maintain in force general and product
      liability insurance, in amounts reasonably deemed necessary to cover the
      risks hereunder.

11.   INDEMNIFICATION

      A. SheerVision agrees to indemnify [*], its agents, customers, successors,
      and assigns against any loss, damage and liability, including costs and
      expenses, including attorneys fees, for actual or alleged infringement of
      any patent, copyright or trademark arising out of the use or sale by [*],
      its agents or customers, of the Products. [*] shall notify the SheerVision
      of any suit, claim or demand involving such infringement and shall permit
      SheerVision to defend against or settle the same. If any injunction is
      issued as the result of any infringement, SheerVision agrees, at [*]'s
      sole option, to (i) refund to [*] the amounts paid to SheerVision
      hereunder as may be reasonably attributed to the infringement, or (ii)
      furnish [*] with an acceptable and non-infringing product.

      B. SheerVision agrees to protect, defend, hold harmless and indemnify [*],
      its agents, customers, successors and assigns from and against any and all
      claims, liability and expense resulting from any alleged or claimed defect
      in Products, whether latent or patent, including allegedly improper
      construction and design, or from the failure of Products to comply with
      specifications.

      C. SheerVision further agrees that all Products supplied will be free from
      liability of royalties, mechanics liens, or other encumbrances, and
      SheerVision agrees to indemnify and hold [*] harmless from these
      liabilities.

12.   TERM AND TERMINATION

      A.    TERM

      This Agreement will become effective as of the Effective Date and shall
      remain in effect for a period of three (3) year(s) at which time it shall
      Terminate automatically, or until Terminated as set forth hereunder.

      B.    TERMINATION UPON NOTICE

      This Agreement may be terminated at any time, without cause, by either
      party upon giving the other party one-hundred and eighty (180) days
      written notice. In the event of termination under this paragraph,
      SheerVision and [*] shall work together in good faith to minimize the
      adverse impact of a disruption in the supply chain, as set forth generally
      under paragraph 6 D herein.

      C.    TERMINATION FOR CAUSE

      Both parties may terminate this Agreement with immediate effect upon
      breach of any material provision of this Agreement by the other party,
      after provision of notice and ten (10) days opportunity to cure said
      breach.

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      D.    TERMINATION PHASE-OUT OBLIGATIONS

      During the termination notice period the parties shall continue under
      their obligations under this Agreement, and shall act in accordance with
      the requirements herein to minimize the financial and operation impact of
      the termination upon the other party.

      i.    If SheerVision initiates termination, it will continue to perform
      its obligations under this Agreement and, at [*]'s request, shall increase
      production of the Product in order to allow [*] to fulfill its own
      manufacturing requirements during transition.

      ii.   If [*] initiates termination:

      a)    SheerVision shall immediately assess its current inventory of the
      Product and raw materials and take immediate action to minimize the
      financial impact on itself and, [*] including without limitation, stopping
      production. SheerVision shall notify [*] in writing within ten (10) days
      of the termination notice, of the total amount of inventory that can not
      be used for any other purpose in a commercially reasonable manner. [*]
      shall be responsible for the costs such inventory.

      The extent of [*]'s responsibility by part number will be determined only
      by those items set forth on SCHEDULE A. [*] shall not be responsible for
      commonly used material that will be consumed in the SheerVision's normal
      production for the satisfaction of other customers' requirements.
      SheerVision shall, after consultation with [*], use its best efforts to
      dispose of the unique inventory items by rework or restocking.

13.   MISCELLANEOUS

      A.    APPLICABLE LAW

      This Agreement shall be governed by, subject to, and construed in
      accordance with the Laws of the State of New York. Jurisdiction and venue
      for any and all claims or disputes arising out of the terms and conditions
      of this Agreement shall lie with the courts of Westchester County, New
      York, unless otherwise specified herein.

      B.    DISPUTES

      In the event of a dispute, both parties shall negotiate in good faith to
      reach an amiable settlement. If the parties, through their senior
      management representatives, are unable to reach a settlement within sixty
      (60) days of the commencement of discussions, then, at the request of
      either party, any dispute arising out of this Agreement shall be settled
      by expedited arbitration under a sole arbiter, in accordance with the
      Commercial Arbitration Rules of American Arbitration Association ("AAA")
      in effect at the time of the arbitration (the "Rules"), except as such
      Rules may be modified herein. If there is any inconsistency between the
      Rules and this Article, this Article shall govern. Awards from arbitration
      shall be binding and enforceable in any court of competent jurisdiction.
      All proceedings under this Article shall be held in New York City, New
      York. Each party shall be given at least fifteen (15) days advance notice
      of the time and place of arbitration.

      C.    WAIVER

      Either parties' failure to enforce at any time any of the provisions of
      this Agreement, to exercise any election or option provided herein, or to
      not require at any time performance by the SheerVision of any of the
      provisions hereof shall in no way be construed to be a waiver of such
      provisions, nor in any way affect the validity of this Agreement or any
      part thereof, or the right of [*] thereafter to enforce each and every
      provision.

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SUPPLY AND LICENSE AGREEMENT
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      D.    INDEPENDENT CONTRACTOR STATUS

      The relationship between [*] and SheerVision is that of independent
      contractors, and not of employer-employee or principal-agent. SheerVision
      is not the legal representative of [*], nor is [*] the legal
      representative of SheerVision. Neither SheerVision nor [*] has the right
      or authority to assume or undertake any obligations or make any
      representation on behalf of the other, and neither shall hold itself out
      as having such right to authority.

      E.    FORCE MAJEURE

      No party shall be responsible for any failures or delays from causes
      beyond its control, including, without limitation, acts of God, acts of
      government, war, fires, floods, strikes, or failure by third parties (not
      an Affiliate or Subsidiary) to comply with their obligations to that
      party.

      F.    ENTIRE AGREEMENT

      This Agreement along with any terms or conditions contained in a Purchase
      Order issued by [*] constitutes the final and complete agreement between
      the parties and supersedes all prior agreements and understandings,
      whether written or oral. If there is a conflict between the terms and
      conditions printed on any subsequent documents between the parties, unless
      otherwise agreed to by the parties in writing, the terms of this Agreement
      shall control.

      G.    PARTIAL INVALIDITY

      In the event of a finding by any tribunal that any provision herein is
      illegal or invalid or otherwise unenforceable, the remaining provisions of
      this Agreement shall not be invalidated thereby and this Agreement shall
      then be read as if such invalid provision were not contained herein.

      H.    COUNTERPARTS

      This Agreement may be executed in any number of counterparts, each of
      which shall be deemed an original and all of which shall constitute one
      and the same Agreement.

      I.    HEADINGS

      Headings in this Agreement are for convenience only and shall not be used
      to interpret or construe its provisions.

      J.    AMENDMENTS

      This Agreement may not be modified in any respect except by a writing
      signed by both parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed the Effective Date first above written.

[*]                                                  SHEERVISION GROUP, INC.

By: /s/ [*]                                          By: /s/ Suzanne Lewsadder
--------------                                       ---------------------------
    [*]                                              SUZANNE LEWSADDER
--------------                                       ---------------------------
Name                                                 Name

Vice President                                       President
--------------                                       ---------------------------
Title                                                Title

<PAGE>

                          SCHEDULE A: PRODUCT & PRICING

                                     PRODUCT

                             PRIVATE LABELED FOR [*]:

      A.    2.5x Galilean Loupe, regular working distance (R-2.5x)
      B.    2.5x Galilean Loupe, long working distance (L-2.5x)
      C.    2.5x Galilean Loupe, short working distance (S-2.5x)

      D.    3.0x Galilean Loupe, regular working distance (R-3.0x)
      E.    3.0x Galilean Loupe, long working distance (L-3.0x)

      F.    3.5x Galilean Loupe, regular working distance (R-3.5x)
      G.    3.5x Galilean Loupe, long working distance (L-3.5x)

                                    PRICING

               [*] Cost              Suggested Manufacturer's List Price (SMLP)

      A.       [*]                   [*]
      B.       [*]                   [*]
      C.       [*]                   [*]
      D.       [*]                   [*]
      E.       [*]                   [*]
      F.       [*]                   [*]
      G.       [*]                   [*]

<PAGE>

                             SCHEDULE E: TRADEMARKS

[*] R-2.5X

[*]

LOUPES

[*]