Professional Services Contract between Volu-Sol Reagents, Inc. and VPI Engineering, dated as of September 27, 2007, together with addenda

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THIS AGREEMENT (this “Agreement”) is made as of this ____ day of _________, 2007, between VPI Engineering, a Utah corporation (“VPI”) and _______________________________, a _________________ corporation (the “Client”).

In consideration of the Services to be performed and the payments to be made as described herein, the parties agree as follows:

This Agreement shall govern all Services provided to Client by VPI and shall remain in effect until this Agreement is terminated in writing pursuant to Section 3.0.

Services shall be defined to be all services desired by the Client and requested either verbally or as defined in any applicable definition of work or similar means (the “Services”). These services shall include, but not be limited to, management activities such as scheduling, budgeting, and resource allocation, engineering activities such as research, design, testing, and design documentation, and manufacturing activities such as management of contract manufacturing, inspection, quality assurance, documentation, and procurement.

Client agrees to provide any necessary information, materials, documents and approvals needed by VPI to perform the Services outlined in a timely manner, and not to delay the efforts of VPI by withholding such information, materials, documents and approvals.

All Services shall be billed based on an hourly rate. These rates shall include all applicable Services including management, engineering, and manufacturing and any other services as needed to perform requested tasks.

VPI shall issue an invoice to Client (an “Invoice”) for the amount equal to the hourly rate multiplied by the total man hours accrued through the date of the Invoice, plus all expenses (as defined in Subsection 2.3) incurred by VPI in connection with the Services during the period covered by such Invoice.

Unless other arrangements are made with the accounting office, invoices shall be issued on a monthly basis and any outstanding balances shall be due NET 30.

Client shall pay to VPI the amount set forth in each Invoice per indicated terms. Any amount that is not paid when due shall bear interest at the rate of 1.5% per month or portion thereof from the date such amount became due through the date on which payment is received by VPI. All payments are to be made to Visionary Products, Inc. at the address provided in Section 5.11 herein.  Client shall pay all expenses incurred for collection of past due amounts.

Client shall pay VPI for all direct expenses incurred by VPI in connection with the Services and this Agreement, all shipping, delivery, messenger, materials, travel costs and any other expenses that are not considered normal operating expenses and are specific to meeting Client’s needs (collectively, the “Expenses”).  VPI shall have the right to require Client to directly pay any unusual or extraordinary Expenses.

VPI must obtain prior written approval from Client before incurring any expenses in excess of approved expenses in a definition of work or similar document.

This Agreement may be terminated by Client and/or VPI at any time provided that the party terminating this Agreement has given the other party a fifteen (15) days advance written notice of termination (a “Termination Notice”).

Following termination of this Agreement, Client shall pay to VPI all amounts due and unpaid, including an amount equal to the total man hours accrued multiplied by the hourly rate as of the date of termination of this Agreement, as determined by VPI, plus all Expenses and non-cancelable commitments incurred by VPI prior to or in connection with the termination of this Agreement (collectively, the “Termination Payment”).

VPI shall prepare an Invoice with respect to the Termination Payment as soon as is practicable following termination of this Agreement.

In the event that Client terminates Services with less than thirty (30) days advance written notice, VPI will retain any deposit/retainer made by Client for Services.

VPI will use reasonable efforts to minimize continuing charges and expenses associated with any termination of this Agreement and the Services provided, however, that VPI shall have the right to disassemble, organize, and return all materials and equipment in connection with the Services.

Client and VPI have entered into a separate mutual non-disclosure agreement, attached hereto, that shall govern the sharing of confidential information between the parties.

Provided the Client has paid all amounts due to VPI, VPI will promptly disclose to Client all inventions and discoveries made pursuant to the Services.

All reports, designs, information, inventions, discoveries, and materials (“Project Information”) developed for Client by VPI shall be property of VPI until the completion or termination of the Services and payment in full of all amounts due to VPI, at which time, all Project Information shall become property of Client.

Following completion or termination of the Services and payment by Client of all amounts due to VPI, VPI shall deliver to Client all Project Information, data, drawings, specifications, reports, estimates, summaries, and other information and materials that were created or obtained by VPI in performing the Services. VPI shall have the right to retain for its records copies of all such Project Information, data, drawings, specifications, reports, estimates, summaries, and other information and materials.

VPI will not knowingly incorporate any invention, improvement, development, concept, discovery or other proprietary information owned by any third party (a “Third Party Component”) into any Invention without Client’s prior written permission.  If, in the performance of the Services and without notice to the Client, VPI incorporates into any Invention a product, process, machine, technology, or invention that was already owned by VPI (a “Pre-Existing Material”), the Client shall have, upon completion of the project and payment in full, a nonexclusive, royalty-free, irrevocable, perpetual, transferable, sublicensable, worldwide license to make, have made, modify, use and sell such prior invention as part of or in connection with such product, process or machine.

At Client’s sole cost and expense, VPI will perform all lawful and necessary acts, sign all patent, trademark and copyright application processes and the assignment thereof to Client. VPI shall assist Client in all such activities provided that Client shall pay VPI an amount equal to VPI’s applicable hourly rate multiplied by the total man hours expended by VPI personnel in connection with such assistance and any Expenses incurred.

 

Client shall have the right, upon reasonable prior notice to VPI and during VPI’s normal business hours, to inspect and review VPI’s facilities and pertinent technical, project and financial records with respect to the Services; provided, however, that Client shall execute such confidentially agreements as are required by VPI. All such inspections and reviews shall be subject to VPI’s security and safety requirements.

VPI guarantees to the Client that the Services provided will be in accordance with industry standards (the “Guarantee”). The Guarantee shall not apply if the Client has breached the terms of this Agreement or any definition of work or similar document.  The Guarantee is limited to modifying the design, research, engineering, and prototyping services as necessary and appropriate.  THE GUARANTEE IS IN LIEU OF ANY AND ALL OTHER GUARANTEES AND WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. All Guarantee claims for Services rendered hereunder shall be deemed unconditionally waived by Client unless Client notifies VPI in writing of a claim within ninety (90) days after completion of the Services. VPI will not be liable for incidental, special, exemplary, consequential, or punitive damages. VPI’s liability under this paragraph shall in no event exceed the amount of Fees actually received by VPI for the specific Services rendered.

VPI makes no representations or warranties (1) regarding any actual or potential infringement of any invention, discovery, design or product produced pursuant to the Services (collectively, the “Products”) on any intellectual property or other rights of any person or entity, or (2) regarding any prior development or the current existence of any invention, discovery, design, or product similar to the Products. VPI expressly disclaims all liability and responsibility regarding (A) safety testing or warnings necessary or desirable in connection with any of the Products, and (B) compliance with any federal, state, or local laws with respect to the Products. VPI shall have no liability or responsibility to conduct any investigation or inquiry with respect to the foregoing; provided, however, that VPI shall disclose to the Client any infringements upon the rights or patents of others and any violations of federal, state, or local laws of which VPI has actual knowledge.

Client hereby releases and forever discharges VPI and shall indemnify, protect, defend, and hold VPI and its shareholders, directors, officers, employees, and agents harmless from and against any and all claims, actions, suits, proceedings, obligations, liabilities, orders, damages, costs, and expenses (including attorneys’ and paralegals’ fees and expenses) resulting from, arising out of, relating to, or in connection with (1) any violation or infringements upon the rights or patents, trademarks, trade designs, copyrights, or any other intellectual property rights of any individual or entity or,  (2) any bodily injury or property damage with respect to the Services or any invention, discovery, design, or product in connection with the Services provided, however, that the foregoing indemnity shall not apply in the event  that such claims, actions, suits, proceedings, obligations, liabilities, orders, damages, costs and expenses were caused by the gross negligence or willful misconduct of VPI in performing the Services.  The provisions of this Section 5.4 shall survive any termination of this Agreement.

All deliveries from VPI to Client shall be F.O.B. shipping point and title and risk of loss with respect to such deliveries shall pass to Client at the shipping point.

Client acknowledges and agrees that VPI has invested significant time and resources in the recruitment and training of its employees.  Therefore, to the extent permitted by law, Client agrees that during the term of this Agreement and for a period of two years following the termination of this Agreement, Client will not directly or indirectly solicit or seek to employ any person who is or has been an employee of VPI at any time during the term of this agreement except with the written permission of the other party. In the event that Client breaches the foregoing restriction, Client will pay to VPI, as liquidated damages and not a penalty, within thirty (30) days of receipt of a notice of breach, a sum equal to one (1) year of salary or fees VPI would pay to such employee.

Any waiver by any party of its rights under this Agreement shall be in writing and signed by the party waiving such right. The failure of either party to enforce any of the provisions of this Agreement or any rights in respect thereto, or to exercise any election herein provided, shall not waive such provisions, rights, or elections or subsequent breaches thereof.

VPI shall not be liable for delays in or non-performance of the Services as a result of strikes, lockouts, fires, acts of terrorism or war conditions, accidents, foreign or domestic government controls or other actions (including controls or actions related to heightened terrorism alert status), embargoes or other causes beyond VPI's control.

This Agreement and the rights and obligations in connection herewith and therewith may not be assigned by either party without the prior written consent of the other party; provided, however, that either party may, without such consent, assign this Agreement and its rights and obligations hereunder in connection with the transfer or sale of all or substantially all of its business, or in the event of its merger, consolidation, change in control or similar transaction.  Any permitted assignee shall assume all obligations of its assignor under this Agreement. Any purported assignment or transfer in violation of this Section 5.9 shall be null and void. This Agreement shall be binding upon and inure to the benefit of the parties and their respective representatives, successors, and assigns.

 

Any notice, demand, request or other communication permitted or required under this Agreement shall be in writing and shall be deemed to have been given as of the date so delivered, if personally served; as of the date so sent if transmitted by facsimile and receipt is confirmed by the facsimile operator of the recipient; as of the date of sent if sent by electronic mail and receipt is acknowledged by the recipient; one day after the date so sent if delivered by overnight courier service; or three days after the date so mailed if mailed by certified mail, return receipt requested, addressed as follows:

If to VPI:	VPI Engineering
	11814 South Election Road, Suite 200
	Draper, UT  84020
	(801) 495-2310
	Facsimile: (801) 495-2255
	E-mail: __________________
If to Client:	____________________________________
	____________________________________
	____________________________________
	Facsimile: ____________________________
	E-mail: ______________________________

or such other addresses, facsimile numbers, or electronic mail address as shall be furnished in writing by any party in the manner for giving notices hereunder.

This Agreement constitutes the entire agreement and understanding between the parties with respect to the Services and supercedes all previous negotiations, agreements, and representations between the parties, written or oral, all of which shall be deemed to be merged into this Agreement. In the event of any conflict between the terms of this Agreement and any subsequent signed agreements between both parties, the latter shall govern.  If any provisions of this Agreement are determined to be invalid or unenforceable, the validity and effect of the other provisions of this Agreement shall not be affected thereby.

This Agreement shall be governed and construed in accordance with the laws of the State of Utah. In the event of any dispute, action, or proceeding in connection with this Agreement, the Services or any documents, instruments or transactions in connection therewith, the non-prevailing party shall pay all costs and expenses (including reasonable attorneys’ and paralegals’ fees and expenses and arbitration fees and expenses) incurred by the prevailing party in connection with such dispute, action, or proceeding.

This section of the Agreement includes each party’s obligations in an effort to minimize disputes arising out of this Agreement and to aid in a mutually satisfactory resolution of such disputes.

(a)           Informal Dispute Resolution.  Client and VPI agree, in good faith, to attempt to resolve disputes, controversies, or claims arising out of this Agreement (“Claim”) prior to pursuing outside intervention.  If the parties cannot come to a mutually agreeable resolution of the Claim within ten (10) business days following commencement of such negotiations, then such Claim will be referred to members of each party's executive management (each such member a "Representative") for resolution, which referral shall be evidenced by a written notice from either party to the other (the “Referral”). The parties' Representatives shall promptly meet following such a Referral to attempt to resolve the Claim.  If the Representatives have not reached a mutually agreeable resolution of the Claim within ten (10) business days after their initial meeting on the subject of such Claim, then such Claim may, by way of written notice of either party to the other, be submitted to arbitration as set forth below.

(b)           Arbitration.  Any Claim arising out of or relating to the provision of the Services shall be settled by binding arbitration administered by the American Arbitration Association (“AAA”) in accordance with its Commercial Arbitration Rules and, for claims of $250,000 or greater, it’s Optional Procedures for Large, Complex Commercial Disputes.  For Claims less than $250,000, the arbitration shall be heard and determined by a single arbitrator with experience with technology disputes in accordance with the rules of the AAA. For disputes $250,000 or greater, the arbitration shall be heard and determined by a panel of three (3) arbitrators selected as described below, two of whom are specifically engaged in the practice of law with the third possessing special knowledge and experience in the subject matter of the claim. During arbitration the parties shall equally share the arbitrators’ fees. The arbitration and all related proceedings and discovery shall take place pursuant to a protective order entered by the arbitrators that adequately protects the confidential nature of the parties’ proprietary and confidential information.  Either party may, without waiving any remedy under this Agreement, seek from any court of competent jurisdiction any interim or provisional relief that such party deems necessary to protect its Confidential Information and property rights pending the establishment of the arbitral tribunal (or pending the arbitral tribunal's determination of the merits of the Claim).

 (c)           Where three (3) arbitrators will be appointed, each party to this contract shall appoint an arbitrator, specifically engaged in the practice of law, in accordance with the AAA rules.  The two arbitrators so appointed shall thereupon select a third arbitrator possessing special knowledge and experience in the subject matter of the claim.  If the arbitrators appointed by the parties shall fail to select a third arbitrator within two weeks of their appointment, a third arbitrator shall be selected in accordance with the then current rules and regulations of the AAA. The written decision of the three (3) arbitrators, or any two of them, shall be final and binding upon the parties thereto, and judgment may be entered thereon in the applicable district court of the State of Utah.

 

A signed original of this Agreement, any applicable purchase order or definition of work and any retainer payment required by VPI shall be required before VPI shall commence performing the Services.

 

__________________________ (Client)		VPI Engineering (VPI)
Signature:_____________________________		Signature:_____________________________
Authorizing Agent: ______________________		Authorizing Agent: Morgan Taylor
Title: ________________________________		Title: President
Date: (MM/DD/YY)_____________________		Date: (MM/DD/YY)_____________________