EXHIBIT 10.8.6
EXCLUSIVE DISTRIBUTOR AGREEMENT
This AGREEMENT is made this 20th day of November, 1996, by and between:
XXX
XXXX
XXXXXXX
CHRONIMED INC.
00000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000, XXX
(hereinafter called "DISTRIBUTOR" )
WITNESSETH
WHEREAS XXX is the manufacturer of the product (hereinafter called "THE
PRODUCT"), and desires competent assistance in distribution of THE PRODUCT in
"THE TERRITORY" as described below
WHEREAS DISTRIBUTOR represents its capabilities of rendering such assistance;
NOW THEREFORE, in consideration of the cooperation of both parties, agree as
follows:
ARTICLE 1: DEFINITIONS
1-1 "THE PRODUCT" shall mean the product to be manufactured under "XXX"
label, or under the distributor designated private label and
exclusively supplied by XXX to DISTRIBUTOR with specifications as
described in Exhibit A attached hereto, and made a part hereof this
Agreement. The product would include current chemistry tests for
glucose, and future chemistry tests including cholesterol and lactate.
"THE TERRITORY" shall mean, and be limited to the United States of
America, Canada, and Mexico. South America and Latin America will be
reviewed for approval on a separate proposal.
ARTICLE 2: APPOINTMENT AND OBLIGATIONS
2-1 XXX hereby appoints DISTRIBUTOR as a sole, and exclusive distributor
for sales of THE PRODUCT in THE TERRITORY under the terms and
conditions of this Agreement.
2-2 XXX shall not during the term of this Agreement appoint any other party
regarding the distribution of THE PRODUCT in THE TERRITORY unless with
the written consent of the DISTRIBUTOR.
2-3 XXX shall hereinafter during the terms of this Agreement refer all
inquiries and business proposals relating to THE PRODUCTS from THE
TERRITORY to DISTRIBUTOR. As soon as advised, DISTRIBUTOR shall pay
immediate attention to the inquiries as to look for business
establishment.
2-4 DISTRIBUTOR shall not during the term of this Agreement sell THE
PRODUCT to areas other than THE TERRITORY, unless with the written
consents of XXX.
2-5 DISTRIBUTOR shall do its best to promote, maintain, and increase the
sales of THE PRODUCT in THE TERRITORY, and shall provide XXX with
quarterly reports of update information regarding the sales of THE
PRODUCT, user's reaction, competitor's activities, as well as other
relevant information.
2-6 DISTRIBUTOR shall help XXX to apply for Food and Drug Administration of
the United States (FDA) 510K registration and with obligations to
facilitate FDA requirements during the application processes. The 510K
application shall appear under the XXX and DISTRIBUTOR's respective
names. XXX agrees to reimburse DISTRIBUTOR for its equal share of
related costs associated with the FDA, 510K registration.
2-7 In the event that XXX does not wish to have the DISTRIBUTOR's name
appear on the 510K registration, DISTRIBUTOR agrees to manage up front
costs, and pay for expenses related to 510K submission. XXX agrees to
reimburse DISTRIBUTOR 100% for related costs in 510K submission.
ARTICLE 3: PRICE AND PAYMENT
3-1 DISTRIBUTOR shall pay for THE PRODUCT purchased hereunder at XXX'S
distributor prices in effect at the time of ordering.
3-2 XXX'S prices in effect at the time of this Agreement are as set forth
in Exhibit B attached hereto and made a part hereof.
3-3 In the event of a price change, XXX shall provide DISTRIBUTOR with
written notice of the revised prices to be effective in sixty (60) days
from the date of which the notice was forwarded by express airmail and,
or facsimile transmission to DISTRIBUTOR. XXX agrees that there will
not exist a price change for at least twelve (12) months following the
receipt of the first shipment of product from XXX which has been
purchased for the sole purposes of resale by DISTRIBUTOR.
Furthermore, XXX agrees that price increases will not exceed a
percentage rate of five (5) percent during any twelve month period of
time, and justification for this annual increase must be tied to local
inflation rate and, or, changes in production componentry.
3-4 Alternatively, XXX agrees that DISTRIBUTOR will receive a price
decrease in the event that purchased quantities by the DISTRIBUTOR
afford XXX with production efficiencies which provide a decrease in
production costs. XXX and DISTRIBUTOR agree to negotiate various levels
of volume price discount in the period of (12) months after the first
shipment.
3-5 Unless otherwise agreed, DISTRIBUTOR shall establish an irrevocable /
confirmed letter of credit at sight in favor of XXX payable in U.S.
dollars in terms acceptable to XXX after first order shipment. After
the performance of 1st order shipment, DISTRIBUTOR shall establish
letter of credit at 30 days for subsequent orders.
3-6 In the event that DISTRIBUTOR fails to fulfill the terms of payment,
XXX may treat such a default as a breach of this entire Agreement and
terminate this Agreement unless DISTRIBUTOR shall in good faith proceed
to cure such default. The DISTRIBUTOR shall not be deemed to have
breached this agreement if non-payment is related to a failure by XXX
to fulfill any part of "Section 4.4."
ARTICLE 4: PURCHASE AND DELIVERY
4-1 After filing the application for FDA, 510K registration the DISTRIBUTOR
shall issue an initial purchase order for no less than XX meters and XX
packs (50's) of electrodes. Delivery will be subject to the successful
completion of the 510K registration. A "proforma forecast" with
subsequent quarterly revisions, and delivery schedule for initial
purchase, and the remainder of 1996 shall be provided when initial
order is shipped.
4-2 DISTRIBUTOR shall submit its firm purchase order in writing sixty (60)
days prior to desired delivery time for XXX'S confirmation and
preparation of the shipment accordingly.
4-3 XXXshall ship the goods in accordance with the terms as specified and
agreed in the purchase order as acknowledged by DISTRIBUTOR, and shall
advise in writing details of shipment as soon as shipment effected.
4-4 After receipt of the PRODUCT, DISTRIBUTOR may reject or return any of
the aforementioned PRODUCT which fails to be in salable condition, or
which customers return due to the PRODUCT not meeting DISTRIBUTOR and,
or, XXX'S performance standards. It is expected that the PRODUCT shall
meet or exceed those performance standards which have been specified in
the 510K registration with the FDA. DISTRIBUTOR will notify XXX of
problems within 30 days of receipt that product does not meet
standards.
DISTRIBUTOR will send XXX notice of the lot, or serial numbers of
rejected, or returned PRODUCT, together with an indication of the
specified basis for rejection. Promptly after receiving any such notice
of rejection, XXX shall cause the rejected PRODUCT to be inspected, and
issue a return authorization number. DISTRIBUTOR shall return to XXX,
at XXX'S expense, any properly rejected PRODUCT. XXX will respond
within ten (10) days with a return authorization number, or with a
written statement that details their contested position regarding the
rejection. DISTRIBUTOR shall not be required to pay XXX for such
rejected PRODUCT, however, agrees to accept either a replacement
shipment or refund of the same dollar amount of rejected PRODUCT with,
or from subsequent shipments or payments to XXX.
ARTICLE 5: QUALITY AND WARRANTY
5-1 XXX shall manufacture THE PRODUCT in compliance with specifications as
set forth in Exhibit A, or with that as may be required by DISTRIBUTOR
and agreed upon by XXX itself, and shall warrant THE PRODUCTS are free
from defects in workmanship and materials at the time of shipment. XXX
warrants that operation manuals, log books and printings on kit cases
shall be in proper English and accurately describe the correct
operation of THE PRODUCT, subject to review by DISTRIBUTOR.
5-2 XXX shall subsequently provide four (4) years warranty unless otherwise
specified for quality in normal operation of THE PRODUCT from that the
date shipment is made, for which XXX shall be responsible for providing
replacement, or repair for the defective parts and materials as
informed by DISTRIBUTOR in writing
5-3 XXX agrees to indemnify, defend and hold harmless DISTRIBUTOR, its
successors, subcontractors, agents, employees, officers and directors,
from and against any and all claims, costs, demands, liabilities,
losses, damages (including consequential damages) and expenses of
whatever nature, including reasonable attorney's fees (collectively
"Losses") arising out of or due to a failure of PRODUCTS manufactured
by XXX to conform to the Specifications; provided, however, that such
indemnification shall not apply to the extent the Losses are due to
DISTRIBUTOR's negligence or intentional misconduct.
5-4 XXX warrants that it has all rights, title and interest in all Patents
and trademarks relating to THE PRODUCT, and agrees to indemnify,
defend, and hold harmless the DISTRIBUTOR, its successors, agents,
employees, officers, and directors from, and against any and all
claims, costs, demands, liabilities, losses, damages, (including
consequential damages) and expenses of whatever nature, including
reasonable attorney's fees, arising out of or in any way related to a
claim that the technical design of the XXX Product infringes upon or
violates the patent, trade secret or other rights of any third party.
ARTICLE 6: TRADEMARKS AND CONFIDENTIALITY
6-1 Trademarks and trade names of THE PRODUCT used by XXX shall remain the
property of XXX.
6-2 Display of the XXX trade xxxx and name shall remain on all packaging
and promotional materials used by the DISTRIBUTOR for the marketing of
THE PRODUCT; however, DISTRIBUTOR will have the right to promote THE
PRODUCT under a brand name which is suitable to the DISTRIBUTOR, but
also denotes that the product is manufactured for DISTRIBUTOR by XXX.
6-3 DISTRIBUTOR and XXX'S shall treat all technical and business
information as confidential, and shall not disclose such information to
any third parties, or utilize as for any purpose, unless with the
consent of XXX or DISTRIBUTOR either before or after the termination of
this Agreement. "Confidential Information" shall mean any confidential
information or trade secrets disclosed to the other party and
designated confidential in writing. Items of information that are not
written or physical, such as, but not limited to disclosed orally, by
demonstration,
or by observation, shall be designated as confidential at the time of
disclosure. All topics considered Confidential shall be so stamped.
6-4 The obligations imposed by Section 6-3 shall not apply with respect to
any CONFIDENTIAL INFORMATION or part thereof which is in the public
domain at the time of disclosure, which is known to the recipient at
the time of disclosure, which becomes known to the recipient from a
source other than the party disclosing the CONFIDENTIAL INFORMATION
without breach of this Agreement by the recipient and provided that
such source is not known by the recipient to be bound by a
confidentiality agreement with the party disclosing the Confidential
Information, or which is developed by the recipient independently of
the disclosing party's CONFIDENTIAL INFORMATION.
6-5 In case of action against such confidentiality breach, DISTRIBUTOR or
XXX shall indemnify the afflicted party from potential damage or loss
(including reasonable attorney's fees which may arise).
ARTICLE 7: DURATION
7-1 This Agreement shall be valid for two (2) years effective from the
execution dated herein stated before.
7-2 After the first twelve month period of distribution, the targeted
quantities for the second twelve month period of time will be proposed
by the DISTRIBUTOR for mutual agreement ninety (90) days before the end
of the calendar year and acknowledged in writing by XXX.
7-3 The minimum targeted quantities of each year should be no less than the
previous calendar year for the first three years of distribution, or in
the event of XXX manufacturing issues which cause a PRODUCT short fall.
After the first three years of distribution, it is understood that
product / market maturation may prohibit additional market growth, and
therefore, annual sales targets beginning in year four (4) do not
necessarily need to reflect PRODUCT growth forecasts.
7-4 In the event that the DISTRIBUTOR has successfully achieved the sales
and marketing expectations of THE PRODUCT in THE TERRITORY in
compliance with terms and conditions of this Agreement, both parties
agree to automatically renew this Agreement for an additional two (2)
year period, with ninety (90) days prior written notice, and agreement
either in the same terms or revised terms of this Agreement as both
shall agree.
ARTICLE 8: SUPPORT
8-1 XXX will provide DISTRIBUTOR with one (1) procedure and correction at
no charge. These testing stations will consist of the necessary
equipment (excluding personal computers) to facilitate a quality check
of THE PRODUCT, and monitor the performance of blood glucose sensors
provided to DISTRIBUTOR by XXX.
ARTICLE 9: TERMINATION
9-1 Both parties shall hereto have the right to terminate this Agreement by
written notice to the other, if the other party commits or suffers any
act of bankruptcy or insolvency; or fails in performance of this
Agreement and does not cure any breach within ninety (90) days after
receipt of written notice of such action by the other party.
9-2 Upon termination of this Agreement, DISTRIBUTOR shall be liable to
settle any outstanding payment due on the date of termination, and as
may be requested, shall immediately return at its own cost, all
information received from XXX. However, XXX will at the request of
DISTRIBUTOR agrees to still supply DISTRIBUTOR with the quantities of
sensor electrodes requested by DISTRIBUTOR for one year providing that
the DISTRIBUTOR makes a formal announcement of its discontinuation of
this product line when termination is effected. XXX agrees to provide
the DISTRIBUTOR with the same prices which it will supply to the new
distributor, and the DISTRIBUTOR agrees not to lower the selling prices
as executed during the prior year.
ARTICLE 10: ASSIGNMENT
10-1 Any right or obligation under this Agreement shall be not assignable or
transferable by any party unless with prior written consents of the
other party.
ARTICLE 11: FORCE MAJEURE
11-1 Neither party shall be responsible for the failure or delay in
performance of any of its obligations hereunder due to force majeure
such as war, insurrection, strikes, acts of God, governmental action,
or any other contingency beyond control.
ARTICLE 12: APPLICABLE LAW
12-1 This Agreement shall be governed by and pursuant to the laws of XXX.
ARTICLE 13: OTHER CONDITIONS
13-1 This Agreement shall be effected, and interpreted with the plain
meaning of English language.
13-2 All expressions of intention and notices of both parties shall be made
in English in written form.
13-3 The addresses first above referred to shall be the registered addresses
of respective offices of both parties; any change of such address shall
be notified to the other in writing.
13-4 Any matters not sufficiently provided herein shall be subject to a
revision by both parties in writing to be attached hereto and made a
part hereof this Agreement.
ARTICLE 14: ENTIRE AGREEMENT
This Agreement represents the entire understanding, as of the effective date
hereof, between the parties with respect to the subject matter hereof and shall
supersede all previous agreements, negotiations, understandings,
representations, statements, and writings between the parties relating thereto,
and shall be controlling over terms and conditions contained in any purchase
order, acknowledgment form or any attachment thereto or any other document
issued by the parties which are in conflict with this Agreement.
No modification, alteration, waiver, or change in any of the terms of this
Agreement shall be valid or binding upon the parties hereto unless made in
writing and duly agreed and signed by both parties hereto.
IN WITNESS WHEREOF, the parties have made this Agreement in duplicate, of which
each party shall hold one copy to be deemed as an original as of the day and
year first above written.
CHRONIMED INC. XXX
EXCLUSIVE DISTRIBUTOR AGREEMENT
ADDENDUM
This AGREEMENT ADDENDUM is made this 13"' day of June, 1997, by and between:
XXX
XXXXX
XXXXXXX
CHRONIMED INC.
00000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000, XXX
(hereinafter called "DISTRIBUTOR ")
ARTICLE 1: DEFINITIONS
"THE TERRITORY" shall mean, and be limited to the United States of America,
Canada, Mexico, South America and Latin America.
All other aspects of the EXCLUSIVE DISTRIBUTOR AGREEMENT made on the 20" day of
November, 1996, remain unchanged.
IN WITNESS WHEREOF, the parties have made this Agreement Addendum in duplicate,
of which each party shall hold one copy to be deemed as an original as of the
day and year first above written.
CHRONIMED INC. XXX
