Exhibit 10.1
DISTRIBUTION AGREEMENT
BETWEEN
LIFESTREAM TECHNOLOGIES, INC.
AND
POLYMER TECHNOLOGY SYSTEMS, INC.
NOTE: PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED UNDER A CONFIDENTIAL TREATMENT
REQUEST FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMITTED PORTIONS,
WHICH ARE SHOWN IN THIS DOCUMENT AS [ * ], HAVE BEEN FILED WITH THE COMMISSION
AS PART OF THE CONFIDENTIAL TREATMENT REQUEST.
TABLE OF CONTENTS
1. TERMS..................................................................1
2. SCOPE..................................................................1
3. PRICING................................................................1
4. PAYMENT TERMS..........................................................1
5. PURCHASE ORDERS........................................................2
5.1 Purchase Orders.................................................2
5.2 Forecasts and Lead-times........................................2
6. DELIVERY AND ACCEPTANCE................................................2
6.1 Delivery........................................................2
6.2 Acceptance......................................................2
7. CHANGES................................................................3
8. WARRANTY...............................................................3
8.1 POLYMER Warranty................................................3
8.2 RGA Procedure...................................................3
8.3 Exclusions From Warranty........................................3
8.4 Remedy..........................................................3
9. INDEMNIFICATION AND LIMITATION OF LIABILITY............................4
9.1 POLYMER'S Indemnification.......................................4
9.2 LIFESTREAM's Indemnification....................................4
9.3 Procedure.......................................................4
9.4 Limitation of Liability.........................................5
10. TERMINATION............................................................5
10.1 Termination for Cause...........................................5
10.2 Termination For Convenience.....................................5
10.3 Termination by Operation of Law.................................5
10.4 Consequences of Termination.....................................5
11. QUALITY................................................................6
11.1 Specifications..................................................6
11.2 Content of Specifications.......................................6
11.3 Quality of Material.............................................6
11.4 Quality Specifications..........................................6
11.5 Inspection of Facility..........................................6
12. FORCE MAJEURE..........................................................6
12.1 Force Majeure Event.............................................6
12.2 Notice of Force Majeure Event...................................7
12.3 Termination of Force Majeure Event..............................7
12.4 Limitations.....................................................7
12.5 Termination for Convenience.....................................7
13. CONFIDENTIALITY........................................................7
13.1 Definitions.....................................................7
13.2 Nondisclosure/Non-Circumvent Covenants..........................8
14. INSURANCE..............................................................9
15. INTELLECTUAL PROPERTY..................................................9
16. MISCELLANEOUS..........................................................9
16.1 Integration Clause..............................................9
ii
16.2 Regulatory.....................................................10
16.3 Expansion of Agreement.........................................10
16.4 Order of Precedence............................................10
16.5 Assignment.....................................................10
16.6 Notices........................................................10
16.7 Disputes/Arbitration/Choice of Law.............................11
16.8 Import/Export..................................................11
16.9 Electronic Data Interchange....................................11
EXHIBITS
EXHIBIT A, PRICING............................................................13
EXHIBIT B, SPECIFICATIONS.....................................................14
EXHIBIT C, SHIPPING LABELING..................................................15
EXHIBIT D, THE QUALITY PLAN...................................................16
iii
DISTRIBUTION AGREEMENT
THIS AGREEMENT (the "Agreement") is effective as of December ____, 2005 (the
"Commencement Date"), by and between LIFESTREAM TECHNOLOGIES, INC., a Nevada
corporation, having its principal place of business at 570 S. Clearwater Loop,
Bldg. 1000, Ste. D, Post Falls, ID 83854 ("LIFESTREAM" or "Customer") and
POLYMER TECHNOLOGY SYSTEMS, INC., a corporation having its principal place of
business at 7736 Zionsville Rd., Indianapolis, IN 46268 ("POLYMER"), each
referred to herein as a Party or together as the Parties.
1. TERMS
The initial term of this Agreement shall commence on the Commencement
Date and shall continue through the third anniversary of the Commencement Date
unless sooner terminated by mutual agreement or in accordance with this
Agreement. Upon the expiration of the initial term, unless stated otherwise in
writing by one of the Parties at least 180 days prior to expiration, this
Agreement shall renew for an additional five (5) years. Notwithstanding the
foregoing, the term of this Agreement shall automatically extend to accommodate
any purchase order ("Order") accepted hereunder and outstanding upon any
termination date, but POLYMER shall have no obligation to accept new purchase
orders during such extension.
2. SCOPE
This Agreement shall initially address the supply of test strips for
Total Cholesterol and HDL Cholesterol by POLYMER to LIFESTREAM (the "Products").
Such Products shall be in the same configuration as test strips currently
manufactured by POLYMER. Subject to Polymer meeting specifications and otherwise
performing pursuant to this Agreement, LIFESTREAM shall purchase its
requirements for the Products solely from POLYMER. POLYMER shall not sell ROM
keys or MEMo chip(TM)s that function with LIFESTREAM's meters, nor shall
LIFESTREAM sell ROM keys or MEMo chips that function with POLYMER's meters.
3. PRICING
During the term, LIFESTREAM shall have the right to purchase from
POLYMER the products specified in Exhibit A (the "Products") as such Exhibit may
be amended from time to time, at the prices set forth in Exhibit A (the
"Prices"). Prices (a) are in U.S. Dollars, (b) are based on (i) the
configuration set forth in the specifications attached hereto as Exhibit B (the
"Specifications") and (ii) the projected volumes, minimum run rates and other
assumptions set forth in Exhibit A. The Prices shall remain fixed for the term
of this Agreement, unless an increase is required due to causes beyond the
control of POLYMER.
4. PAYMENT TERMS
[ * ]
Lifestream _____
Polymer _____
1
5. PURCHASE ORDERS
5.1 PURCHASE ORDERS
(a) LIFESTREAM will issue to POLYMER specific Orders for
Product covered by this Agreement. Each Order shall be in the form of a
written or electronic communication and shall contain the following
information: (i) a description of the Product by part number; (ii) the
quantity of the Product; (iii) the estimated delivery date or shipping
schedule; (iv) the location to which the Product is to be shipped; and
(v) transportation instructions. Each Order shall provide an order
number for billing purposes, and may include other instructions as may
be appropriate under the circumstances.
(b) All Orders shall be confirmed by POLYMER within five (5)
business days of receipt. If POLYMER does not accept or reject the
Order within the five-day period, the Order shall be deemed accepted.
In the event POLYMER is unable to meet the delivery schedule set forth
in a proposed Order, or finds the schedule to be unacceptable for some
other reason, the parties shall negotiate in good faith to resolve the
disputed matter(s). POLYMER shall not be deemed to have accepted the
Order until such dispute is resolved and set forth in writing.
5.2 Forecasts and Lead-times
Within thirty (30) days of the execution of this Agreement,
LIFESTREAM shall provide a non-binding forecast of monthly purchases
for the following twelve months. This forecast shall be updated at
least quarterly throughout the Term. POLYMER's standard lead-time shall
be eight (8) weeks from acceptance of an Order, provided the order is
in conformity with the previous forecast provided by LIFESTREAM.
6. DELIVERY AND ACCEPTANCE
6.1 DELIVERY
All Product shipments will be from POLYMER'S facility of
manufacture and freight collect. Title to and risk of loss or damage to
the Product shall pass to LIFESTREAM upon POLYMER'S tender of the
Product to LIFESTREAM's carrier. POLYMER shall use reasonable means to
mark, pack, package, crate, transport, ship and store Product to ensure
(a) delivery of the Product to its ultimate destination in a safe
condition, (b) compliance with all requirements of the carrier and
destination authorities, and (c) compliance with any reasonable special
instructions of LIFESTREAM. POLYMER shall use reasonable efforts to
deliver the Products on the agreed-upon delivery dates and shall use
reasonable efforts to notify LIFESTREAM of any anticipated delays;
provided, however, that POLYMER shall not be liable for any failure to
meet LIFESTREAM delivery dates and/or any failure to give notice of
anticipated delays.
6.2 ACCEPTANCE
Acceptance of the Product shall occur no later than fifteen
(15) days after the arrival of the shipment of Product and shall be
based solely on whether the Product passes a mutually agreeable
Acceptance Test Procedure or Inspection designed to demonstrate
compliance with the Specifications, which may include a mutually agreed
third party audit of the finished goods as part of the quality plan
(Exhibit D). Product cannot be rejected based on criteria that were
unknown to POLYMER or based on test procedures that POLYMER does not
conduct. Product shall be deemed accepted if not rejected within this
fifteen-day period. Once a Product is accepted, all Product returns
shall be handled in accordance with Article 8 (Warranty). Prior to
returning any rejected Product, LIFESTREAM shall obtain a Returned
Goods Approval ("RGA") number from POLYMER, and shall return such
Product in accordance with POLYMER'S instructions; LIFESTREAM shall
specify the reason for such rejection in all RGA's. In the event a
Product is rejected, POLYMER shall have a reasonable opportunity to
cure any defect that led to such rejection.
Lifestream _____
Polymer _____
2
7. CHANGES
LIFESTREAM and POLYMER, upon mutual agreement, may make changes within
the general scope of this Agreement. Such changes may include, but are not
limited to, changes in (1) designs, procedures, Specifications, test
specifications, (2) methods of packaging and shipment, (3) quantities of Product
to be furnished, and/or (4) delivery schedule. If any such change causes either
an increase or decrease in POLYMER'S cost or the time required for performance
of any part of the work under this Agreement, the Prices and/or delivery
schedules shall be adjusted by mutual agreement in a manner that would
adequately compensate the parties for such change, and shall be set forth in a
written amendment, executed by both parties.
8. WARRANTY
8.1 POLYMER WARRANTY
POLYMER'S warranty period is equal to the expiration dating of
the relevant chemistry, and is limited to correction of defects in
POLYMER'S workmanship and performance. POLYMER shall, at its option and
at its expense, replace or issue a credit for Product found defective
during the warranty period.
8.2 RGA PROCEDURE
POLYMER shall concur in advance on all Product to be returned
for replacement. LIFESTREAM will obtain a Returned Goods Approval (RGA)
number from POLYMER prior to return shipment. All returns shall state
the specific reason for such return, and will be processed in
accordance with POLYMER'S RGA Procedure, a copy of which is available
from POLYMER upon request, and which includes a provision that POLYMER
shall review and approve or deny any returns prior to shipment and such
approval will not be unreasonably withheld. POLYMER shall pay all
transportation costs for valid returns of Product to POLYMER and for
the shipment of the repaired or replacement Products to LIFESTREAM, and
shall bear all risk of loss or damage to such Products until tender to
LIFESTREAM's carrier; LIFESTREAM shall pay these charges, plus a
handling charge, for invalid or "no defect found" returns. Any replaced
Product shall be warranted as set forth in this Article for a period
equal to the remainder of the original warranty.
8.3 EXCLUSIONS FROM WARRANTY
This warranty does not include Products that have defects or
failures resulting from (a) LIFESTREAM's handling or packaging in
LIFESTREAM's environment; and (b) accident, disaster, neglect, abuse,
misuse, improper handling, storage, shipping, or installation,
including improper handling.
8.4 REMEDY
THE SOLE REMEDY UNDER THIS WARRANTY SHALL BE REPLACEMENT OR
CREDIT FOR DEFECTIVE PARTS AS STATED ABOVE. THIS WARRANTY IS IN LIEU OF
ANY OTHER WARRANTIES EITHER EXPRESS OR IMPLIED, INCLUDING
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
Lifestream _____
Polymer _____
3
9. INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 POLYMER'S INDEMNIFICATION
POLYMER shall indemnify, defend, and hold LIFESTREAM and
LIFESTREAM affiliates, shareholders, directors, officers, employees,
contractors, agents and other representatives (the
"LIFESTREAM-Indemnified Parties") harmless from all Claims (i) based
upon personal injury or death or injury to property to the extent any
of the foregoing is proximately caused either by a defective Product,
by the reckless or willful acts or omissions of POLYMER or its
officers, employees, subcontractors or agents, and/or (ii) arising from
or relating to any allegation that the Product has a design defect(s),
and/or (iii) arising from any violation of regulations regarding the
manufacture, distribution, marketing, or labeling of medical devices,
and/or (iv) arising from or relating to any actual or alleged
infringement or misappropriation of any patent, trademark, mask work,
copyright, trade secret or any actual or alleged violation of any other
intellectual property rights arising from or in connection with the
Product, except to the extent that such infringement exists as a result
of use by POLYMER of LIFESTREAM specifications. POLYMER shall have no
obligation to indemnify the LIFESTREAM-Indemnified Parties to the
extent such Claim results from actions or events described in Section
8.3, Exclusions from Warranty, or would not exist except for compliance
with specifications particular to LIFESTREAM.
9.2 LIFESTREAM'S INDEMNIFICATION
LIFESTREAM shall indemnify, defend, and hold POLYMER and
POLYMER'S affiliates, shareholders, directors, officers, employees,
contractors, agents and other representatives (the "POLYMER-Indemnified
Parties") harmless from all Claims (i) based upon personal injury or
death or injury to property to the extent any of the foregoing is
proximately caused either by a defective Product, by the negligent or
willful acts or omissions of LIFESTREAM or its officers, employees,
subcontractors or agents, and/or (ii) arising from or relating to any
allegation that the Product has a design defect(s), and/or (iii)
arising from any violation of regulations regarding the manufacture,
distribution, marketing, or labeling of medical devices, and/or (iv)
arising from or relating to any actual or alleged infringement or
misappropriation of any patent, trademark, mask work, copyright, trade
secret or any actual or alleged violation of any other intellectual
property rights arising from or in connection with the Product, except
to the extent that such infringement exists as a result of use by
LIFESTREAM of POLYMER'S manufacturing processes.
9.3 PROCEDURE
A Party entitled to indemnification pursuant to this Article
(the "Indemnitee") shall promptly notify the other Party (the
"Indemnitor") in writing of any Claims covered by this indemnity.
Promptly after receipt of such notice, the Indemnitor shall assume the
defense of such Claim with counsel reasonably satisfactory to the
Indemnitee. If the Indemnitor fails, within a reasonable time after
receipt of such notice, to assume the defense with counsel reasonably
satisfactory to the Indemnitee or, if in the reasonable judgment of the
Indemnitee, a direct or indirect conflict of interest exists between
the parties with respect to the Claim, the Indemnitee shall have the
right to undertake the defense, compromise and settlement of such Claim
for the account and at the expense of the Indemnitor. Notwithstanding
the foregoing, if the Indemnitee in its sole judgment so elects, the
Indemnitee may also participate in the defense of such action by
employing counsel at its expense, without waiving the Indemnitor's
obligation to indemnify and defend. The Indemnitor shall not compromise
any Claim or consent to the entry of any judgment without an
unconditional release of all liability of the Indemnitee to each
claimant or plaintiff.
Lifestream _____
Polymer _____
4
9.4 LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY
INDIRECT, CONSEQUENTIAL, INCIDENTIAL, PUNITIVE OR SPECIAL DAMAGES, OR
ANY DAMAGES WHATSOEVER RESULTING FROM LOSS OF USE, DATA OR PROFITS,
EVEN IF SUCH OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES; PROVIDED, HOWEVER, THAT THIS SECTION SHALL NOT PREVENT A PARTY
FROM INCURRING THE LIABILITIES SET FORTH IN SECTION 9 (INDEMNIFICATION)
OR SECTION 10 (TERMINATION). IN NO EVENT, SHALL POLYMER'S LIABILITY
UNDER THIS AGREEMENT (WHETHER ASSERTED AS A TORT CLAIM OR CONTRACT
CLAIM) EXCEED THE AMOUNTS PAID TO POLYMER HEREUNDER. IN NO EVENT WILL
POLYMER BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS BY
LIFESTREAM. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE
OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
10. TERMINATION
10.1 TERMINATION FOR CAUSE
Either Party may terminate this Agreement or an Order
hereunder for default if the other Party materially breaches this
Agreement; provided, however, no right to terminate shall accrue until
thirty (30) days after the defaulting Party is notified in writing of
the Material Breach and has failed to cure or give adequate assurances
of performance within the thirty (30)-day period after notice of a
Material Breach. For the purposes of this Agreement, "Material Breach"
shall be any act or omission by either Party that may materially
threaten or destroy the value of this Agreement and/or give a basis for
an action for breach of contract.
10.2 TERMINATION FOR CONVENIENCE
Lifestream may terminate this Agreement hereunder for any
reason upon one hundred eighty (180) days' prior written notice.
Polymer may terminate this Agreement for any reason upon three hundred
sixty (360) days' prior written notice.
10.3 TERMINATION BY OPERATION OF LAW
This Agreement shall immediately terminate should either Party
(a) become insolvent; (b) enter into or file a petition, arraignment or
proceeding seeking on order for relief under the bankruptcy laws of its
respective jurisdiction; (c) enter into a receivership of any of its
assets, or (d) enter into a dissolution or liquidation of its assets or
an assignment for the benefit of its creditors. If any of the foregoing
(a) through (d) should occur to LIFESTREAM, POLYMER shall have the
right, at its sole discretion, to discontinue shipment of any test
strips on order by LIFESTREAM.
10.4 CONSEQUENCES OF TERMINATION
A. TERMINATION FOR REASONS OTHER THAN POLYMER'S MATERIAL
BREACH
In the event this Agreement or an Order hereunder is
terminated for any reason other than a Material Breach by
POLYMER (including, but not limited to, a force majeure),
LIFESTREAM shall pay POLYMER'S termination charges equal to
(1) the contract price for all finished Product existing at
the time of termination, and (2) the value of POLYMER'S
Product-related inventory.
Lifestream _____
Polymer _____
5
B. TERMINATION RESULTING FROM POLYMER'S MATERIAL BREACH
In the event LIFESTREAM terminates this Agreement or
any Order hereunder as a result of a Material Breach by
POLYMER, LIFESTREAM shall pay POLYMER, termination charges
equal to the contract price for all finished Product existing
at the time of termination.
11. QUALITY
11.1 SPECIFICATIONS
Product shall be manufactured by POLYMER in accordance with
the Specifications set forth in Exhibit B. Neither Party shall make any
change to the Specifications, or to the Products (including, without
limitation, changes in form, fit, function, design, appearance or place
of manufacture of the Products or changes which would affect the
reliability of any of the Products) unless such change is made with the
written consent of both parties. Notwithstanding the foregoing, POLYMER
shall be permitted to make changes in its manufacturing processes at
any time, so long as such changes do not affect the form, fit or
function of the Products.
11.2 CONTENT OF SPECIFICATIONS
The Specifications shall include, but shall not be limited to,
performance and appearance specifications for the Product.
11.3 QUALITY OF MATERIAL
POLYMER shall use in its production of Products such material
of a type, quality, and grade suitable to LIFESTREAM performance and
appearance standards.
11.4 QUALITY SPECIFICATIONS
POLYMER shall comply with the quality specifications set forth
in its Quality Manual, which is incorporated by reference herein, a
copy of which is available from POLYMER upon request.
11.5 INSPECTION OF FACILITY
Upon reasonable advance written notice, within 30 days of
execution of this Agreement, and within 30 days of a shipment of
Products agreed by POLYMER to be defective, LIFESTREAM may inspect
facilities during POLYMER's regular business hours, provided, that,
such inspection does not unduly affect POLYMER's operations. LIFESTREAM
and its representatives shall observe all security and handling
measures of POLYMER while on POLYMER's premises. LIFESTREAM and its
representatives acknowledge that their presence on POLYMER's property
is at their sole risk.
12. FORCE MAJEURE
12.1 FORCE MAJEURE EVENT
For purposes of this Agreement, a "Force Majeure Event" shall
mean the (i) occurrence of unforeseen circumstances beyond a Party's
control and without such Party's negligence or intentional misconduct,
including, but not limited to, any act by any governmental authority,
act of war, natural disaster, strike, boycott, embargo, shortage, riot,
lockout, labor dispute, civil commotion, and (ii) failure of a Vendor
to timely deliver a Component to POLYMER.
Lifestream _____
Polymer _____
6
12.2 NOTICE OF FORCE MAJEURE EVENT
Neither Party shall be responsible for any failure to perform
due to a Force Majeure Event, provided, that, such Party gives notice
to the other Party of the Force Majeure Event as soon as reasonably
practicable, but not later than five (5) days after the date on which
such Party knew or should reasonably have known of the commencement of
the Force Majeure Event, specifying the nature and particulars thereof
and the expected duration thereof; provided, however, that the failure
of a Party to give notice of a Force Majeure Event shall not prevent
such Party from relying on this Section except to the extent that the
other Party has been prejudiced thereby.
12.3 TERMINATION OF FORCE MAJEURE EVENT
The Party claiming a Force Majeure Event shall use reasonable
efforts to mitigate the effect of any such Force Majeure Event and to
cooperate to develop and implement a plan of remedial and reasonable
alternative measures to remove the Force Majeure Event; provided,
however, that neither Party shall be required under this provision to
settle any strike or other labor dispute on terms it considers to be
unfavorable to it. Upon the cessation of the Force Majeure Event, the
Party affected thereby shall immediately notify the other Party of such
fact, and use its commercially reasonable efforts to resume normal
performance of its obligations under the Agreement as soon as possible.
12.4 LIMITATIONS
Notwithstanding that a Force Majeure Event otherwise exists,
the provisions of this Article shall not excuse (i) any obligation of
either Party, including the obligation to pay money in a timely manner
for Product actually delivered or other liabilities actually incurred,
that arose before the occurrence of the Force Majeure Event causing the
suspension of performance; or (ii) any late delivery of Product,
equipment, materials, supplies, tools, or other items caused solely by
negligent acts or omissions on the part of such Party.
12.5 TERMINATION FOR CONVENIENCE
In the event a Party fails to perform any of its obligations
for reasons defined in this Section 12 for a cumulative period of
ninety (90) days or more from the date of such notification to the
other Party then the other Party at its option may extend the
corresponding delivery period for the length of the delay, or terminate
this Agreement for Convenience in accordance with Paragraph 10.2.
13. CONFIDENTIALITY
13.1 DEFINITIONS
For the purpose of this Agreement:
(a) "Confidential Information" means information (in any form
or media) regarding a Party's customers, prospective customers
(including lists of customers and prospective customers), methods of
operation, engineering methods and processes (including any information
which may be obtained by a Party by reverse engineering, decompiling,
decoding or examining any software or hardware provided by the other
Party under this Agreement), programs and databases, patents and
designs, billing rates, billing procedures, vendors and suppliers,
business methods, finances, management, or any other business
information relating to such Party (whether constituting a trade secret
or proprietary or otherwise), which has value to such Party and is
treated by such Party as being confidential. Confidential Information
in documentary or other tangible form will be clearly and conspicuously
marked as `Confidential' or some similar marking. Verbal disclosures
must be identified as confidential at the time of disclosure and must
be confirmed in writing as confidential within thirty (30) days of the
initial disclosure.
Lifestream _____
Polymer _____
7
Confidential Information does not include information that (i)
is known to the other Party prior to receipt from the disclosing Party
hereunder, which knowledge shall be evidenced by written records, (ii)
is independently developed as evidenced by written records, (iii) is or
becomes in the public domain through no breach of this Agreement, or
(iv) is received from a third Party without breach of any obligation of
confidentiality; and, provided further, that Confidential Information
does not include any information provided by LIFESTREAM to POLYMER
regarding the manufacturing process.
(b) "Person" shall mean and include any individual,
partnership, association, corporation, trust, unincorporated
organization, limited liability company or any other business entity or
enterprise.
(c) "Representative" shall mean a Party's employees, agents,
or representatives, including, without limitation, financial advisors,
lawyers, accountants, experts, and consultants.
13.2 NONDISCLOSURE/NON-CIRCUMVENT COVENANTS
(a) In connection with this Agreement, each Party (the
"Disclosing Party") may furnish to the other Party (the "Receiving
Party") or its Representatives certain Confidential Information. During
the Term of this Agreement, and for a period of three (3) years from
the Termination Date of this Agreement, the Receiving Party (a) shall
maintain as confidential all Confidential Information heretofore or
hereafter disclosed to it by the Disclosing Party, (b) shall not,
directly or indirectly, disclose any such Confidential Information to
any Person other than those Representatives of the Receiving Party
whose duties justify the need to know such Confidential Information and
then only after each Representative has agreed to be bound by this
Confidentiality Agreement and clearly understands his or her obligation
to protect the confidentiality of such Confidential Information and to
restrict the use of such Confidential Information, and (c) shall treat
such Confidential Information with the same degree of care as it treats
its own Confidential Information (but in no case with less than a
reasonable degree of care).
(b) The disclosure of any Confidential Information is solely
for the purpose of enabling each Party to perform under this Agreement,
and the Receiving Party shall not use any Confidential Information
disclosed by the Disclosing Party for any other purpose.
(c) Except as otherwise set forth in this Agreement, all
Confidential Information supplied by the Disclosing Party shall remain
the property of the Disclosing Party, and will be promptly returned by
the Receiving Party upon receipt of written request therefore.
(d) If the Receiving Party or its Representative is requested
or becomes legally compelled to disclose any of the Confidential
Information, it will provide the Disclosing Party with prompt written
notice. If a protective order or other remedy is not obtained, then
only that part of the Confidential Information that is legally required
to be furnished will be furnished, and best efforts will be made to
obtain reliable assurances of confidentiality.
13.3 Disclosure of this Agreement
Disclosure of the existence and/or nature of this Agreement
shall only be made by mutual consent of the Parties, and such consent
shall not be unreasonably denied.
Lifestream _____
Polymer _____
8
14. INSURANCE
POLYMER agrees to maintain, during the term of this Agreement, (a)
workers' compensation insurance as prescribed by the law of the country/state in
which POLYMER'S services are performed; (b) employer's liability insurance with
limits of at least $500,000 per occurrence; (c) comprehensive automobile
liability insurance, if the use of motor vehicles is required, with limits of at
least $1,000,000 for bodily injury and property damage for each occurrence; (d)
comprehensive general liability insurance, including POLYMER'S contractual
liability and broad form property damage, with limits of at least $1,000,000
combined single limit for personal injury and property damage for each
occurrence; and (e) comprehensive general liability insurance endorsed to
include products liability and completed operations coverage in the amount of
$1,000,000 for each occurrence. POLYMER shall furnish to LIFESTREAM certificates
or evidence of the foregoing insurance indicating the amount and nature of such
coverage and the expiration date of each policy. Each Party agrees that it, its
insurer(s) and anyone claiming by, through, under or in its behalf shall have no
claim, right of action or right of subrogation against the other Party and the
other Party's affiliates, directors, officers, employees and customers based on
any loss or liability insured against under the insurance required by this
Agreement.
15. INTELLECTUAL PROPERTY
15.1 Nothing herein shall be deemed to grant to LIFESTREAM any
rights to any Intellectual Property (Intellectual Property includes,
but is not limited to, any letters patent, patent applications, trade
secrets, manufacturing processes, product concepts, regulatory
dossiers, designs, software, vendor lists, or know-how, any where in
the world) other than the non-exclusive, limited license to market and
sell Product(s) manufactured solely by POLYMER during the Term of this
Agreement. Nothing herein shall be deemed to grant to POLYMER any
rights to any LIFESTREAM Intellectual Property other than the
non-exclusive, limited license that may be required to design and
manufacture Product(s) contemplated herein during the Term of this
Agreement.
15.2 Any Intellectual Property that is invented solely by a
Party hereto shall be the property of that Party. Any Intellectual
Property that arises from or is related to the design, functionality,
manufacture, or testing of Products that is invented jointly, as
defined by the laws of the United States of America, by POLYMER and
LIFESTREAM shall be jointly owned. The Parties shall cooperate in all
matters relating to the filing and prosecution of any corresponding
patent applications. POLYMER shall cooperate fully in providing
information, including information relating to its Intellectual
Property, which is required in submissions to regulatory authorities
for Product(s) marketing approval(s).
15.3 Each sales unit of strips shall bear the PTS Panels
Trademark, as well as be marked with POLYMER patent numbers as
appropriate to preserve POLYMER's patent rights, including, but not
limited to, the right to obtain damages. POLYMER shall provide
LIFESTREAM with such appropriate patent numbers.
16. MISCELLANEOUS
16.1 INTEGRATION CLAUSE
This Agreement (including the Exhibits and Schedules to this
Agreement) constitutes the entire agreement of the parties, superseding
all previous Agreements covering the subject matter. This Agreement
shall not be changed or modified except by written Agreement,
specifically amending, modifying and changing this Agreement, signed by
authorized executive officers of POLYMER and LIFESTREAM.
Lifestream _____
Polymer _____
9
16.2 REGULATORY
LIFESTREAM will be responsible for all regulatory affairs
related to its sales and distribution of the Product(s) within the
markets in which they are involved in the distribution of the Products,
including, but not limited to, clearance by Food and Drug
Administration for meters and other ancillary devices, compliance with
all Federal Trade Commission regulations, and compliance with Federal,
State and Local tax laws, and POLYMER will assist and supply all
necessary information in their possession requested by LIFESTREAM to be
in compliance related to the sales and distribution of the LIFESTREAM
product(s). Notwithstanding the foregoing, POLYMER shall remain the
manufacturer of Products for regulatory purposes, and shall maintain
and be sole owner all 510(k) clearances on same. LIFESTREAM shall be a
distributor only.
16.3 EXPANSION OF AGREEMENT
The Parties agree to negotiate in good faith the expansion or
supplementation of this Agreement to include final packaging of
LIFESTREAM's Test Strips by POLYMER, as well as the supply of the
following by LIFESTREAM to POLYMER:
a. Combination Blood Pressure Monitor/Lipid Tester for professional uses
worldwide. b. Cholesterol Mouse for professional uses worldwide.
16.4 ORDER OF PRECEDENCE
All quotations, Orders, acknowledgments and invoices issued
pursuant to this Agreement are issued for convenience of the Parties
only and shall be subject to the provisions of this Agreement and the
Exhibits hereto. When interpreting this Agreement, precedence shall be
given to the respective parts in the following descending order: (a)
this Agreement; (b) Schedules and Exhibits to this Agreement; and (c)
if Orders are used to release product, those portions of the Order that
are not pre-printed and which are accepted by POLYMER. The Parties
acknowledge that the preprinted provisions on the reverse side of any
such quotation, Purchase Order, acknowledgment or invoice and all terms
other than the specific terms of LIFESTREAM's Purchase Order set forth
in Section 5.1(a)(i)-(v) shall be deemed deleted and of no effect
whatsoever. No modification to this Agreement, the Exhibits or any
Order shall be valid without the prior written consent of the Purchase
Agreement Coordinators of POLYMER and LIFESTREAM. Until modified by
them in writing, the Purchase Agreement Coordinators for each Party
shall be their respective Chief Executive Officer.
16.5 ASSIGNMENT
Neither this Agreement nor any rights or obligations hereunder
shall be transferred or assigned by either Party without the written
consent of the other Party, which consent shall not be unreasonably
withheld or delayed.
16.6 NOTICES
Wherever one Party is required or permitted or required to
give written notice to the other under this Agreement, such notice will
be given by hand, by certified U.S. mail, return receipt requested, by
overnight courier, or by fax and addressed as follows:
Lifestream _____
Polymer _____
10
IF TO LIFESTREAM: WITH A COPY TO:
Lifestream Technologies, Inc. Elsaesser Jarzabek Anderson Marks & Elliott
570 S. Clearwater Loop 123 S. Third St., Post Office Box 1049
Building 1000, Suite D Sandpoint, ID 83864
Post Falls, ID 83854 Attention: Ford Elsaesser
Attention: Chief Financial Officer
IF TO POLYMER: WITH A COPY TO:
Polymer Technology Systems, Inc. Sommer Barnard, PC
Attn: Robert Huffstodt One Indiana Square, Ste 3500
7736 Zionsville Road Indianapolis, IN 46204
Indianapolis, IN 46268 Attn: Regina M. Sharrow
Hand-delivered and faxed notices shall be effective upon receipt;
notice via U.S. mail shall be effective three days from deposit with
the U.S. Postal Service; notice via overnight courier shall be
effective the day after such notice is deposited with the overnight
carrier service. Either Party may designate a different notice address
from time to time upon giving ten (10) days' prior written notice
thereof to the other Party.
16.7 DISPUTES/ARBITRATION/CHOICE OF LAW
The parties shall attempt to resolve any disputes between them
arising out of this Agreement through good faith negotiations. If an
amicable agreement cannot be achieved through such negotiations, or the
dispute requires urgent settlement, the dispute will be submitted to
binding arbitration by either party. Arbitration shall take place in
the State of Indiana in accordance with the rules and regulations of
the Rules of the American Arbitration Assocation then in force and
effect. The case shall be presented to an arbitrator chosen from a list
supplied by the American Arbitration Association acceptable to both
parties. Any arbitration award shall be deemed to be final and binding
upon the parties and neither party shall seek recourse to a law court
or other authorities to appeal or request the revision of the award.
The arbitration expenses (excluding legal fees) shall be borne by the
losing party.
This Agreement shall be construed in accordance with the
substantive laws of the State of Indiana (excluding its conflicts of
laws principles).
16.8 IMPORT/EXPORT
Unless otherwise agreed, LIFESTREAM shall be the exporter of
record for any Products and/or Product documentation exported from the
country, and shall comply with all applicable country of manufacture
export control statutes and regulations.
16.9 ELECTRONIC DATA INTERCHANGE
The parties agree that transmission of data by electronic data
interchange ("EDI") will not occur until a separate agreement governing
such transmissions is executed. Upon execution, such EDI agreement will
become an attachment to this Agreement.
Lifestream _____
Polymer _____
11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
effective as of the date on page one, by their officers, duly authorized.
POLYMER TECHNOLOGY SYSTEMS, INC. LIFESTREAM TECHNOLOGIES, INC.
By: ________________________________ By: ______________________________
Signature Signature
____________________________________ ___________________________________
Typed Name Typed Name
____________________________________ ___________________________________
Title Title
____________________________________ ___________________________________
Date Date
12
EXHIBIT A
PRICING
The Parties agree to the pricing and other terms as set forth in this Exhibit A,
which supersedes any previous communications between the Parties. Both Parties
agree that continuous cost reductions will be carried out using their respective
commercially reasonable efforts under the terms of this agreement.
[ * ]
Lifestream _____
Polymer _____
13
EXHIBIT B
SPECIFICATIONS
PACKAGING
Strips packaged in bulk, sealed in dessicated foil bags, vials or canisters.
PERFORMANCE (DATA REQUESTED BY LIFESTREAM)
o Performance
o CV, fingerstick, controls, venous blood
o Range
o Bias
o Correlation to POLYMER's standard reference methods
o Qualified for plasma, controls, fingerstick, venous?
o Sample size range and impact on performance
o Post Production Clinical A/K Accuracy audit
o Sample of a Declaration of Conformance and Certificate of Analysis
o POLYMER package insert data
Lifestream _____
Polymer _____
14
EXHIBIT C
SHIPPING LABELING
Each shipment of finished goods for the product shall have the following shipper
/ Bill of Lading information and contents:
SHIPPING ADDRESS:
Lifestream Technologies, Inc
570 S. Clearwater Loop
Building 1000, Suite D
Post Falls, Idaho, USA 83854
FDA device establishment: 3023826
208-457-9409
ON THE SHIPPING CONTAINER AND ON THE BILL OF LADING:
Product Code: 75 CHH Clinical Chemistry
EACH SHIPMENT TO CONTAIN:
Certificate of Analysis
Lifestream _____
Polymer _____
15
EXHIBIT D
THE QUALITY PLAN
[ * ]
Lifestream _____
Polymer _____
16