EXHIBIT 10.1
MARKETING AGREEMENT
This Marketing Agreement (this "Agreement") is made and entered into as
of this 27th day of July, 1998 by and between Nutrition Medical, Inc., a
Minnesota corporation ("NMI") and ZEVEX, Inc., a Delaware corporation
("ZEVEX"), collectively referred to hereinafter as the "Parties" or
individually as a "Party."
1. PURPOSE OF AGREEMENT
The purpose of this Agreement is to set forth the relationship of NMI
and ZEVEX in the marketing and sale of enteral feeding pumps, delivery sets,
and enteral feeding tubes that are currently being marketed and sold by the
enteral feeding pump and disposable division of NMI (the "Division"). The
products of NMI that are subject to this Agreement are all of the products of
the Division listed on the Inventory Schedule that is attached hereto as
Exhibit "A" (the "Products"), which excludes enteral feeding pump replacement
parts. This Inventory Schedule is a list of NMI's inventory of enteral
feeding pumps, delivery sets, and feeding tubes as of June 28, 1998. The
Parties acknowledge that this Agreement is entered into in contemplation of
the acquisition by ZEVEX of all of the assets of the Division pursuant to an
Asset Purchase Agreement, of even date herewith, between the Parties ("Asset
Purchase Agreement"). The transactions contemplated by the Asset Purchase
Agreement are hereafter collectively referred to as the "Acquisition."
2. TERM
The term of this Agreement shall be from the effective date hereof until
December 31, 1998, unless sooner terminated upon the closing of the
Acquisition, or pursuant to Section 10 herein (the "Term").
3. GRANT OF DISTRIBUTION RIGHTS AND ASSIGNMENT OF CONTRACTS
NMI hereby grants to ZEVEX an exclusive, worldwide license during the
Term of this Agreement to market, sell, distribute, and service the Products
subject to the terms and conditions set forth in this Agreement. For
purposes of this Agreement, "exclusive" shall mean (i) that NMI shall not
engage any third party with respect to the marketing, sale, distribution, or
service of the Products and (ii) NMI, its employees, and agents, shall not
directly or indirectly market, sell, distribute, or service any of the
Products other than through ZEVEX as set forth in this Agreement. NMI
represents that it does not currently have any agreement with any third party
with respect to the marketing, sales, distribution, or service of the
Products. In connection with this license grant, NMI hereby assigns to ZEVEX
all outstanding purchase orders or other contracts relating to the Products,
including the contract to sell pumps to Nestle Clinical Nutrition, Inc.
("Nestle"), which order is approximately
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750 pumps as of July 24, 1998.
4. LICENSE TO USE TRADEMARK
NMI hereby grants to ZEVEX a royalty-free, exclusive, worldwide license
to use any trademark, trade names, or identifying slogans of NMI affixed to
the Products or any accompanying labels, containers, cartons, or technical or
promotional literature, whether or not registered, in connection with the
marketing, sale, distribution, or service of the Products pursuant to this
Agreement.
5. PURCHASE PRICE; MANNER OF PAYMENT
For each Product sold by ZEVEX pursuant to this Agreement, ZEVEX agrees
to pay to NMI the cost of each Product as shown in the third column on
Exhibit A; provided that, with respect to 750 pumps (model no. CL2200) that
are to be sold to Nestle, ZEVEX will pay to NMI any amounts that it receives
from Nestle. Payment shall be made within forty-five (45) days of ZEVEX's
receipt of notice from NMI of actual shipment to the end purchaser of the
Product. Such payment shall include ZEVEX's reimbursement to NMI for the
shipping and related charges described in Section 6.1 below.
6. SHIPMENT AND DELIVERY
6.1 CUSTOMER ORDERS. ZEVEX shall promptly notify NMI of all orders of
Products. NMI shall promptly deliver all Products ordered by a customer
directly to the end purchaser of such Products ("drop ship") or to ZEVEX
after receipt of an order, as specified by ZEVEX. Delivery of the Products
shall be F.O.B. the destination specified in the related Product order.
ZEVEX shall reimburse NMI for all shipping charges, insurance charges, custom
duties, and all applicable sales taxes as may be applicable in the delivery
and sale of the Products, including 12% of the cost of the Products, which is
intended to cover NMI's overhead expenses relating to the shipment and
handling of the Products.
6.2 INVOICING. NMI shall inform ZEVEX promptly of all shipments of
Products. All invoices in connection with sales of the Products by ZEVEX
shall be rendered by ZEVEX direct to purchasers, it being expressly
understood that full responsibility for all collection of invoices rests with
ZEVEX which shall exercise complete control over the approval of all
purchaser credits, orders, change orders, and contracts.
6.3 VOLUME AND INVENTORY. ZEVEX shall not be required to purchase any
minimum amount or quantity of the Products. NMI agrees to use its reasonable
efforts to maintain sufficient inventory to permit it to fill orders
generated by ZEVEX (including those assigned by NMI to ZEVEX hereunder) on a
timely basis.
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7. WARRANTY CLAIMS AND SERVICE.
Warranty Claims and Service shall be handled in accordance with Section
6(i) of the Asset Purchase Agreement.
8. PRODUCT LIABILITY.
All product liability claims shall be handled as set forth in Section
6(h) of the Asset Purchase Agreement.
9. OBLIGATIONS OF THE PARTIES.
9.1 OBLIGATIONS OF ZEVEX. ZEVEX shall:
(a) use reasonable efforts to promote the sale of the Products and
to solicit and obtain orders for the same;
(b) keep accurate books and records relating to the sale of the
Products; and
(c) promote the sale of the Products in a manner consistent with
the specifications, features or capabilities of the Products as
described in the technical and marketing literature provided by NMI and
make no false or misleading representations with regard to the Products.
9.2 OBLIGATIONS OF NMI. NMI shall:
(a) upon signing this Agreement, immediately deliver to ZEVEX all
Product samples, technical specifications, Product lists, price lists,
Product inventory and availability information, sales literature,
customer lists, customer order history, and all other information useful
or necessary to ZEVEX to carry out its obligations under this Agreement;
(b) provide ZEVEX with the time and cooperation of NMI's personnel
as may be reasonably useful or necessary for ZEVEX to carry out its
obligations under this Agreement;
(c) use reasonable efforts to promptly deliver the Products when
requested by ZEVEX and to promptly deliver to ZEVEX such related
shipment information; and
(d) keep accurate books and records relating to the sale of the
Products.
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10. EXPIRATION AND TERMINATION OF AGREEMENT
10.1 AUTOMATIC TERMINATION. This Agreement shall automatically
terminate on December 31, 1998 or upon the earlier consummation of the
Acquisition or the termination of the purchase agreement relating to the
Acquisition, whichever is the first to occur.
10.2 OPTION TO TERMINATE. This Agreement may be sooner terminated in
accordance with any of the following:
(a) by a written agreement signed by the Parties hereto;
(b) by either Party at any time if the other Party defaults in the
performance of any material term or condition of this Agreement, and if
such default shall continue unremedied for a period of ten (10) days
after written notice thereof is given to the defaulting Party by the
other Party;
(c) immediately, by either Party upon the liquidation,
dissolution, reorganization, merger, the closing of sale of
substantially all the assets or change in the voting control or
corporate form of the other Party; or
(d) immediately, by either Party:
(i) if a receiver is appointed for the other Party or its
property;
(ii) if the other Party becomes insolvent or unable to pay
its debts as they mature or ceases to pay its debts as they mature
in the ordinary course of business or makes an assignment for the
benefit of its creditors; or
(iii) if any proceedings are commenced by or for the other
Party under any bankruptcy, insolvency, or debtor's relief law.
10.3 EFFECT OF TERMINATION. In the event of expiration or termination
of this Agreement:
(a) neither NMI nor ZEVEX shall be liable to the other because of
such expiration or termination for compensation, reimbursement or
damages for the loss of prospective profits or anticipated sales, on
account of any expenditures, investments, leases or commitments made by
either NMI or ZEVEX in connection with the business or goodwill of NMI
or ZEVEX or for any other reason whatsoever based upon or growing out of
such expiration or termination. Notwithstanding the foregoing, in the
event of the termination of this Agreement, NMI shall not delay any
shipment with respect to Product orders already placed with NMI.
(b) adjustment and payment of all claims (excluding any warranty
or product
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liability claims) between ZEVEX and NMI arising from orders accepted and
shipped by NMI under this Agreement shall occur no later than sixty (60)
days after the effective date of expiration or termination of the
Agreement;
(c) each Party shall return to the other all property and
proprietary information of the other.
10.4 SURVIVAL. Upon the termination of this Agreement, all privileges,
rights and obligations herein shall expire, except that each Party's
obligations under Sections 11 through 18 shall survive the termination or
expiration of this Agreement and shall continue in full force and effect.
11. RELATIONSHIP OF PARTIES
Neither Party shall have the power to act for, bind, or otherwise create
or assume any obligation on behalf of the other Party, express or implied,
for any purpose whatsoever.
12. NOTICES
Any notice required hereunder to be given by either Party shall be in
writing and shall be delivered personally or sent by certified or registered
mail, postage prepaid, or by private courier, with written verification of
delivery, or by facsimile transmission to the other Party to the address or
telephone number set forth below or to such other address or telephone number
as either Party may designate from time to time according to this provision.
A notice delivered personally shall be effective upon receipt. A notice sent
by facsimile transmission shall be effective twenty-four hours after the
dispatch thereof. A notice delivered by mail or by private courier shall be
effective on the third day after the day of mailing.
If to NMI: with a copy to:
Nutrition Medical, Inc. Xxxxxx & Xxxxxxx LLP
0000 00xx Xxx X. 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx Attention: Xxxxxxx X. Xxxxxx
If to ZEVEX: with a copy to:
ZEVEX, Inc. Jones, Waldo, Xxxxxxxx & XxXxxxxxx
0000 XXXXX Xxxx Xxxx 000 Xxxxx Xxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, Xxxx 00000 Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxxxxxx Attention: Xxxxxx X. Xxxxxxx, Esq.
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13. SEVERABILITY
If any provision of this Agreement is found to be unenforceable by a
court of competent jurisdiction, the remaining provisions shall nevertheless
remain in full force and effect.
14. WAIVER OR MODIFICATION
Any waiver, modification, or amendment of any provision of this
Agreement shall be effective only if in writing in a document that
specifically refers to this Agreement and such document is signed by the
Parties hereto.
15. ENTIRE AGREEMENT
This Agreement constitutes the full and complete understanding and
agreement of the Parties hereto with respect to the subject matter covered
herein and supersedes all prior oral or written understandings and agreements
with respect thereto.
16. PROPRIETARY INFORMATION
The Parties recognize that certain technical information which may be
disclosed pursuant to this Agreement represents confidential and valuable
proprietary information and, therefore, each Party will not, without the
written consent of the other Party, disclose or use such information to any
other person other than those of its employees who have a need to know such
information in order to utilize it for the purposes of this Agreement.
17. SUCCESSORS
The rights and liabilities of the Parties hereto shall bind and inure to
the benefit of their respective successors, heirs, executors, and
administrators, as the case may be, except that neither this Agreement nor
the rights or obligations hereunder shall be assignable or transferable by
either Party, either in whole or in part, without the prior written consent
of the other Party.
18. GOVERNING LAW; VENUE
This Agreement shall be governed by and construed in accordance with the
laws of the State of Utah without regard to the conflict of laws. Should NMI
institute any action or proceeding against ZEVEX in connection with this
Agreement, the Parties agree that proper venue and jurisdiction for such
action or proceeding shall be the courts in the State of Utah. Should ZEVEX
institute any action or proceeding against NMI in connection with this
Agreement, the Parties agree that proper venue and jurisdiction for such
action or proceeding shall be the courts in the State of Minnesota.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives to be effective as of the
date first given above.
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NUTRITION MEDICAL, INC. ZEVEX, INC.
/S/ XXXXXXX X. XXXX /S/ XXXX X. XXXXXXXXXXX
------------------------------------- ---------------------------------
Xxxxxxx X. Xxxx Xxxx X. Xxxxxxxxxxx
President and Chief Executive Officer President and Chief Executive Officer
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