Exhibit 10.29
STRATEGIC ALLIANCE AGREEMENT
This Strategic Alliance Agreement (the "AGREEMENT") is entered into as
of the 7th day of May, 1999 by and between JORE CORPORATION, a Montana
corporation ("JORE"), and INTERNATIONAL TOOL MACHINES OF FLORIDA, INC., a
Florida corporation ("ITM"), with reference to the following facts:
RECITALS
A. JORE and ITM have collaborated in the design, development and
manufacture of certain machines used in the manufacture of drill bits and
other power tool accessories and components thereof.
B. JORE and ITM desire to formalize their relationship.
AGREEMENT
Now, therefore, in consideration of the foregoing and the mutual
promises contained herein, the parties do hereby agree as follows:
1. EXCLUSIVE SALES TO JORE. For the term of the Agreement, ITM shall
manufacture and sell or otherwise make available the drill bit manufacturing
machine known as the 2020DPC, only to JORE and to no other persons or
entities. The 2020DPC machine refers to that machine which has been sold and
delivered by ITM to JORE prior to the date of execution of this agreement, or
similar equipment using rotary transfer drill grinding design.
2. MINIMUM ORDER OF THE 2020DPC MACHINE. During the term hereof, JORE
shall order a minimum of 15 of the Machines per year and the terms shall be
pursuant to ITM's standard terms (EXHIBIT A, attached hereto.)
3. PRICING. During the first year of this Agreement, JORE shall pay
ITM the sum of $350,000 per 2020DPC Machine that it orders exclusive of any
accessories it orders, which shall be paid for separately. The terms of
payment and shipping shall be pursuant to EXHIBIT A, attached hereto. 60
prior to each anniversary of this Agreement, ITM may request that the price
it charges JORE for the upcoming year be increased based on the Consumer
Price Index.
4. EXCLUSIVE PURCHASES BY JORE. Without the express written consent of
ITM, during the term hereof, JORE shall not purchase any machines
substantially similar to those manufactured by ITM from any competitors of
ITM so long as the price of the machines are equivalent.
5. TERM.
(a) Unless sooner terminated pursuant to Section Six (6), the term of
this Agreement shall commence on the date hereof and continue in full
force and effect for a period of five years.
(b) Either party shall have an option to renew this Agreement for a
period of five (5) years by providing written notice to each other at least
three-hundred sixty-five (365) days prior to the expiration hereof. The price
of the machines during any renewal of this Agreement shall by re-negotiated.
6. TERMINATION. This Agreement may be terminated as follows:
(a) By the mutual agreement of the parties as evidenced by a signed
instrument executed by both Parties.
(b) By either party if
(i) the other party materially and substantially breaches this
Agreement and does not cure or remedy such breach within sixty (60) days of
receipt of the first party's notification of its intention to terminate this
Agreement. The failure to purchase 15 of the 2020DPC Machines per year shall
constitute a material and substantial breach of this agreement. A material
and substantial breach of any agreement between JORE and ITM shall constitute
a breach of this Agreement.
(ii) upon the institution by or against the other party of
insolvency, receivership or bankruptcy proceedings or any other proceedings
for the settlement of the other party's debts, provided, with respect to
involuntary proceedings, that such proceedings are not dismissed within
thirty (30) days, (ii) upon the other party's making an assignment for the
benefit of creditors, or (iii) upon the other party's dissolution or ceasing
to do business.
7. SALE OR TRANSFER. In the event of a sale or transfer of a
controlling interest in ITM this Agreement shall be binding on any subsequent
buyer or transferee.
8. MISCELLANEOUS.
(a) Each of the parties agrees to execute a Non-Disclosure Agreement in
substantially the form of EXHIBIT B hereto.
(b) In the event the Parties are unable to resolve any dispute, any
controversy or dispute shall be settled by binding arbitration in Palm Coast,
Florida, pursuant to the Rules of the American Arbitration Association.
(c) This Agreement shall be governed, controlled, interpreted and
defined by and under the laws of the State of Florida.
(d) Each party agrees that its rights and obligations under this
Agreement may not be transferred or assigned directly or indirectly
without the prior written consent of the other party, which consent shall not
be unreasonably withheld. Subject to the foregoing sentence, this Agreement
shall be binding upon and inure to, the benefit of the parties hereto, their
successors and assigns.
(e) If any provision of this Agreement is held to be invalid by a court
of competent jurisdiction, then the remaining provisions shall remain,
nevertheless, in full force and effect.
(f) No waiver of any term or condition of this Agreement shall be valid
or binding on either party unless agreed in writing by the party to be
charged. The failure of either party to enforce at any time any of the
provisions of this Agreement, or the failure to require at any time
performance by the other party of any of the provisions of this Agreement,
shall in no way be construed to be a present or future waiver of such
provisions.
(g) This Agreement, including the Exhibits attached hereto, constitutes
the entire agreement of the parties with respect to the subject matter
hereof, and supersedes all prior or contemporaneous understandings or
agreements. No amendment or modification hereof shall be valid or binding
upon the parties unless made in writing.
(h) The Parties to this Agreement are independent contractors. There is
no relationship of agency, partnership, joint venture, employment or
franchise among the parties and no party shall have any authority to bind any
other party or incur any obligation on the other party's behalf.
INTERNATIONAL TOOL MACHINES
OF FLORIDA, INC.
/s/ Karl H. Giebmanns
- ------------------------------
BY: Karl H. Giebmanns, President
JORE CORPORATION
/s/ Matt Jore
- ------------------------------
BY: Matt Jore, President
INTERNATIONAL TOOL MACHINES OF FLORIDA, INC
5 INDUSTRY DRIVE Tel: (904) 446-0500
PALM COAST, FLORIDA 32137 Fax: (904) 445-5700
TERMS AND CONDITIONS OF SALES
ALL PROPOSALS AND QUOTATIONS FOR THE ORIGINAL SALE OF OUR PRODUCTS AND OUR
ACCEPTANCE OF PURCHASE ORDERS FOR OUR PRODUCTS ARE EXPRESSLY CONDITIONAL UPON
PURCHASER'S ASSENT TO THE FOLLOWING TERMS AND CONDITIONS:
1. ACCEPTANCE: All orders are subject to acceptance in writing by Seller at
its office listed above.
2. PRICES: Prices are E.X.W. ITM Palm Coast, Florida.
3. VALIDITY OF QUOTATION: Any quotation shall be valid for ninety (90) days
from quotation date unless specified otherwise.
4. PAYMENT TERMS: Seller's normal terms are 30% DUE WITH RECEIPT OF PURCHASE
ORDER, 60% DUE AFTER ACCEPTANCE OF THE MACHINE IN ACCORDANCE TO TERMS AGREED
UPON IN THE PURCHASE ORDER AND PRIOR TO SHIPMENT, 10% AFTER FINAL ACCEPTANCE
AT YOUR FACILITY AS DEFINED IN ITM'S QUOTATION OR 30 DAYS NET AFTER SHIPMENT,
WHICHEVER COMES FIRST. Seller reserves the right to ask for progress payment
when noted specifically in its quotations. Invoices are payable in cash
without any deductions. Invoices past due are subject to a 1-1/2% PER MONTH
SERVICE CHARGE. Instead of a downpayment, ITM will also accept an irrevocable
letter of credit in favor to ITM opened by a bank specified by ITM. The
letter of credit has to be opened to the value of the purchase order and
based upon conditions that it can be collected with presentation of shipping
document when the machine is picked up at ITM's location.
5. SECURITY INTEREST: Seller shall retain a security interest in products
sold until Purchaser has performed all of its obligations hereunder and
Seller shall have all rights of a secured party with respect thereto,
including the right to repossess same without legal process. Upon the request
of Seller, Purchaser shall execute and deliver to Seller such UCC Financing
Statements and other documents as Seller may reasonably request in order to
perfect Seller's security interest. Each order accepted by Seller shall be
deemed a security agreement executed by Purchaser and Seller for purposes of
the Uniform Commercial Code of the State of Florida.
6. TAXES: Prices DO NOT include taxes. If any sales, use or similar tax is
payable by Seller in connection with any transaction or part thereof between
the Seller and Purchaser with respect to products delivered, Purchaser will,
upon demand, pay to Seller the amount of any such tax.
7. DELIVERY: Any proposed shipment date is an estimate only and is subject to
change due to accidents, fire, strikes, or other causes beyond Seller's
control. Under no circumstances shall Seller have any liability whatsoever
for loss of use of goods ordered, or for any direct or consequential damages
resulting from delay in delivery.
8. CANCELLATION: Each order is considered an irrevocable offer to purchase
and is noncancelable after it has been accepted by Seller. Any deviation from
this policy must have written approval of Seller and any cancellation accepted
shall be deemed to have damaged Seller to extent of, but not limited to, the
amount held as non-refundable deposit and Seller shall be entitled to retain
any such deposit. Purchaser will be held responsible for all charges
including, but not limited to, any additional charges which may arise as a
result of any cancellation.
9. PRODUCTION: Production figures furnished by Seller are estimates only and
are based on Seller's understanding of accuracy and finish required,
machinability of the material, amount of material to be removed and
Purchaser's operating conditions.
10. SHIPMENT: Unless otherwise requested by Purchaser, shipment will be made
by the carrier of Seller's choice. It is important to request at all times
proper handling of the machine, such as airride truck, etc., to avoid
abnormal shocks to the machine.
11. LOSS OR DAMAGE IN TRANSIT: Seller's liability for loss or damage to the
machine and equipment covered by this order is limited to events which have
occurred prior to its delivery to the carrier at the E.X.W. point shown on
Seller's order acknowledgement. Any loss subsequent to such delivery is to be
at the risk of Purchaser.
12. WARRANTY: Warranty shall be in effect after all Payment Terms are met.
Seller warrants that its products shall be free from defects in materials and
workmanship for a period of twelve (12) months from the date of arrival
thereof at Purchaser's plant, substantiated by return copy of signed and
dated consignee's freight invoice attached to the warranty card, provided
such products are used only one [illegible] shift per day. Such warranty
period shall be reduced prorated to the extent the products are used on more
than one shift per day, the warranty period thus being four (4)
months if the products are used on three shifts per day during the entire
period. For the ITM Series 2003 machines the warranty period will be (6) months
from the date of arrival thereof at Purchaser's plant. Any part or parts which
upon examination Seller finds defective in workmanship or material shall, at
Seller's option, be repaired or replaced free of charge, provided that (i) the
products are in possession of Purchaser; (ii) on Seller's request the parts are
returned to Seller's plant freight prepaid; and (iii) the products have been
maintained and operated in accordance with instructions in Seller's manual.
Parts furnished under warranty "free of charge" shall be made available to
Purchaser E.X.W. ITM Palm Coast, Florida. Purchaser shall pay all delivery
costs to his plant.
The parties agree that the warranty stated herein, along with the maintenance
service contained in paragraph 13, is the entirety of the warranty given form
Seller to Purchaser. The parties expressly agree that in no event does the
seller warrant to the Buyer for any incidental or consequential damages
caused by any failure in the product, regardless of the cause of the failure.
This limitation includes, but is not limited to, any damages related to:
lost production, lost sales, increased overhead, mobilization, finance
charges or any other damages beyond what is expressly warranted in this
paragraph and paragraph 13 herein. THE PURCHASER EXPRESSLY WAIVES ITS RIGHT
TO ANY DAMAGES OTHER THAN AS SET FORTH HEREIN.
13. MAINTENANCE SERVICE WITHIN WARRANTY PERIOD: During the warranty period, as
defined, remedial service assistance on Seller's products will be furnished at
no charge by Seller. Service beyond warranty period will be furnished by Seller
at Seller's then prevailing rates.
IT IS EXPRESSLY UNDERSTOOD THAT THE WARRANTY MADE BY SELLER HEREIN SHALL BE IN
LIEU OF ANY AND ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR USE.
If Purchaser accepts the products and does not notify Seller of any defect or
breach of warranty within 30 DAYS FROM DATE OF SHIPMENT. Purchaser shall be
deemed to have waived any claim with respect thereto. No claim shall be made
for any damages, including incidental and consequential damages or damages to
any product of Purchaser or damages due to Purchaser's inability to perform its
contracts with others.
PURCHASER AGREES TO INDEMNIFY, HOLD HARMLESS, AND DEFEND SELLER FROM ANY AND ALL
CLAIMS AND LIABILITIES CAUSED BY THE NEGLIGENCE OF PURCHASER, ITS AGENTS,
SERVANTS AND EMPLOYEES AND THOSE WHO MAY ACQUIRE FROM PURCHASER PRODUCTS
PURCHASED FROM SELLER.
14. INDEMNITY: Purchaser shall notify Seller promptly and in any event
WITHIN 30 DAYS, of any accident or malfunction involving Seller's products
which results in personal injury or damage to property, and shall cooperate
fully with Seller in investigating and determining the cause of such accident
or malfunction. In the event that Purchaser fails to give such notice to
Seller and to so cooperate, Purchaser shall indemnify and save Seller
harmless from any claims from such accident or malfunction.
15. OSHA: Purchaser acknowledges that due to the large variety of sizes and
geometric shapes of grinding wheels, it is virtually impossible to completely
guard the grinding wheel and that it is Purchaser's responsibility, by law,
to provide an appropriate point of operation protection as described in the
ANSI Standard B11.9, Section 4.5.
Coolant guards (housing), as provided with a machine, are designed only to
contain the coolant in the machine and are not constructed as guards to protect
against wheel breakage.
Purchaser acknowledges that it is Purchaser's obligation to comply with the
Federal Occupational Safety and Health Act of 1970 (OSHA) and agrees to do so
with respect to the use of Seller's products.
Seller will be ready to quote any modifications or additions which Purchaser may
need to meet OSHA requirements. If during the time between the order and the
actual delivery of a machine or other product of Seller any specific OSHA
requirement comes to Purchaser's attention. Purchaser shall promptly notify
Seller in writing requesting said modification. Upon receipt of such request, a
quotation will be given for modification in compliance with Purchaser's request.
Seller shall not be responsible for any failure to so comply which results from
the location, operation, design, use, or maintenance of Seller's products or
from alteration of such products by persons other than Seller or from any
optional accessories to the equipment which were available to Purchaser, but
omitted at Purchaser's direction from design or instructions furnished by the
Purchaser or its agents. To ensure Purchaser's compliance with the safety
regulations of OSHA as they pertain to grinding equipment. Seller encourages
Purchaser to review the complete ANSI B11.9 Standards.
16. DISPUTES: Any disputes arising from this agreement shall be governed by
the laws of the State of Florida. The parties agree that the proper venue for
any litigation will be in Flagier County, Florida. In the event that the
parties engage in any litigation, the prevailing party will be entitled to
recover its attorneys fees and costs.
ALL CONDITIONS RESPECTING WARRANTY MADE HEREIN SHALL BE APPLICABLE TO THOSE
WHO MAY PURCHASE, LEASE, OR OTHERWISE ACQUIRE MACHINERY OR OTHER PRODUCTS, OF
SELLER FROM PURCHASER, AND PURCHASER SHALL INFORM ANY SUCH PERSON THAT SELLER
DOES NOT MAKE ANY WARRANTY RESPECTING SAME OTHER THAN AS HEREIN PROVIDED.