SUPPLY AGREEMENT
This AGREEMENT made as of the 9th day of January, 2004 by and between Derma
Sciences, Inc., a Pennsylvania corporation having offices at 000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 (hereinafter referred to as "Buyer") and
Xxxxxxxx-Xxxxx Corporation, a Delaware corporation having offices at 0000
Xxxxxxx Xxxxxx Xxxx, Xxxxxxx, XX 00000 (hereinafter referred to as "K-C" or
"Seller").
W I T N E S S E T H:
--------------------
WHEREAS, K-C represents that it is capable of manufacturing and packaging
wound care products in accordance with specifications as furnished by K-C to
Buyer on the date first above written (the "Specifications") in the quantities
described below; and
WHEREAS, K-C desires to manufacture, package and sell the wound care
products to Buyer and Buyer desires to purchase the wound care products from K-C
under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing premises, which are
hereby incorporated into and hereby made a part of the terms and conditions of
this Agreement, and the mutual covenants recited hereinafter, it is agreed as
follows:
SECTION 1
DEFINITIONS
As used throughout this Agreement, each of the following terms shall have
the meaning set forth in this Section 1:
1.01 "Purchase Agreement" shall mean the Purchase Agreement between the
parties dated the Effective Date.
1.02 "Effective Date" shall mean the date first above written.
1.03 "Finished Goods" shall mean the finished goods described in Exhibit C.
1.04 "Product(s)" shall mean wound care products described in Exhibit B
manufactured, packaged and displaying the Trademark in accordance with the
Specifications.
1.05 "Raw Materials" shall mean materials, ingredients, and packaging
required to manufacture and package the Products described in Exhibit D.
1.06 "Trademark" shall mean the trademark(s) identified on Exhibit A
attached hereto.
SECTION 2
SUPPLY OF THE PRODUCT
K-C shall manufacture and make available for sale to Buyer and Buyer shall
purchase from K-C Products in accordance with the terms hereinafter set forth.
K-C shall apply Buyer's Trademarks to the Products and maintain quality levels
for the goods existing as of the above date.
1
SECTION 3
PRICE/PAYMENT
3.01 Price: The price to be paid by Buyer to K-C for the Product purchased
hereunder is set forth on Exhibit B attached hereto and made a part of this
Agreement (the "Price").
3.02 Payment: Buyer shall pay, by check or electronic transfer, K-C for the
Product purchased hereunder as described in Exhibit E.
SECTION 4
WARRANTY/DEFECTIVE PRODUCT
4.01 Warranty: K-C warrants that the Products sold to Buyer are free from
defects in material and workmanship and shall comply in all respects with the
Specifications. EXCEPT AS EXPRESSLY PROVIDED HEREIN, SELLER MAKES NO EXPRESS OR
IMPLIED WARRANTY INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR FROM ANY COURSE OF DEALING
OR TRADE USAGE REGARDING THE PRODUCT.
SECTION 5
ORDER VOLUME; ORDER PROCEDURE AND RAW MATERIAL PURCHASE
5.01 Order Volume. Except as otherwise provided herein, K-C shall supply
and Buyer shall purchase the Product in amounts equal to +/- 10% of the volumes
set forth in Exhibit C during the term of this Agreement (the "Order Volume").
5.02 Order Volume Revisions. In the event that market demand for the
Products during the term of this Agreement varies by more than +/- 10% of the
Order Volumes described in Exhibit C, then the parties shall discuss in good
faith adjusting such Order Volumes to satisfy such demand, provided that neither
party shall have an obligation to do so.
5.03 Inventory Purchase. Upon expiration or termination of this Agreement,
K-C shall (a) sell to Buyer and Buyer shall purchase the Finished Goods
described in Exhibit C, to the extent that K-C holds such inventory, in amounts
not to exceed 110% of the amounts described in each line item in Exhibit C and
(b) sell to Buyer and Buyer shall purchase the Raw Materials described in
Exhibit D, to the extent that K-C holds such inventory, in an aggregate amount
not to exceed $250,476. In order to achieve the aggregate Raw Material inventory
described above, K-C shall notify Buyer of any Raw Material purchase that would
cause Raw Material Inventories to exceed the amounts described in Exhibit D. The
price for the Finished Goods and Raw Materials shall be calculated as set forth
in Exhibits B and D. Seller shall pay K-C for the Raw Material and Finished
Goods within thirty (30) days after expiration or termination of this Agreement.
K-C warrants that the Raw Material and Finished Goods supplied pursuant to
this Section 5.03 are free from defects in material and workmanship. EXCEPT AS
EXPRESSLY PROVIDED HEREIN, K-C MAKES NO EXPRESS OR IMPLIED WARRANTY INCLUDING,
WITHOUT LIMITATION, THE WARRANTIES OR MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR FROM ANY COURSE OF DEALING OF TRADE USAGE REGARDING THE PRODUCT.
2
SECTION 6
DELIVERY
Seller shall deliver the Product, Raw Material and Finished Goods F.O.B
K-C's facility in Fort Worth, Texas.
SECTION 7
TERM AND TERMINATION
7.01 Term: This Agreement shall be effective as of the Effective Date and,
unless sooner terminated as hereinafter provided, shall terminate on April 30,
2004.
7.02 Termination: This Agreement also may be terminated:
(a) Upon the mutual written agreement of the parties;
(b) By either party for material breach of any of the terms hereof by the
other party if the breach is not corrected within thirty (30) days after the
giving of written notice of breach to the defaulting party;
(c) By either party, upon written notice to the other party, if either
party shall become insolvent or shall make an assignment for the benefit of
creditors, or shall be placed in receivership, reorganization, liquidation or
bankruptcy (voluntary or involuntary);
(d) By either party, upon written notice to the other party, if for any
reason there is a change in the ownership, management or control of either
party, or all or any part of either party's business subject to the terms of
this Agreement by law, decree, ordinance or other governmental action, is vested
in, or is made subject to, the control or direction of any governmental agent,
officer, appointee, designee or any other person, firm or company not a party to
this Agreement;
(e) By either party, if any law, decree, ordinance or other governmental
action would change the relationship created by this Agreement or would grant
rights to either party not granted under this Agreement, such termination to
become effective one day prior to the date such law, decree, ordinance or other
governmental action would become effective;
(f) By K-C, upon written notice to Buyer, in the event Buyer fails to take
timely delivery and make timely payment of the Equipment pursuant to the
Purchase Agreement; or
(g) By Buyer, upon written notice to K-C, in the event K-C fails to make
the Equipment available in a timely manner pursuant to the terms of the Purchase
Agreement.
3
SECTION 8
CONFIDENTIAL INFORMATION
8.01 Confidentiality. The parties anticipate that it may be necessary for
one or both parties to transfer to the other information of a confidential or
proprietary nature under this Agreement.
a. The parties shall treat all written information marked as "Confidential"
or "Proprietary" and all information disclosed orally or visually that the
disclosed party confirms as confidential in writing to the receiving party
within thirty (30) days after the original oral or visual disclosure as secret
or confidential (the "Proprietary Information"). Proprietary Information shall
also include but is not limited to, information pertaining to the conduct or
details of each other's business, its processes, formulas, machines, devices,
products, and materials, whether or not identified as "Confidential" or
"Proprietary." The terms and conditions of this Agreement shall be considered
Proprietary Information.
b. The parties agree not to disclose, either during the term of this
Agreement or for a period of three (3) years thereafter, any Proprietary
Information. Each party agrees that it will use the same reasonable effort to
protect the other party's proprietary information as is used to protect its own
proprietary information.
c. The obligations of a party regarding non-disclosure and non-use of the
other party's Proprietary Information shall not apply to information which: (1)
is or becomes publicly known through no fault of its own; (2) was in its
possession prior to obtaining access hereunder; (3) is received from a third
party as a matter of right and without restrictions on disclosure or use; (4)
was independently developed by the receiving party without using the Proprietary
Information of the disclosing party.
d. Proprietary information shall be used only in connection with this
Agreement and disclosed to personnel on a need-to-know basis only.
e. Proprietary information disclosed hereunder shall remain the property of
the disclosing party and shall be returned to the disclosing party promptly upon
written request. Neither this nor the furnishing of any information hereunder by
either party to the other shall be construed as granting any license under or
right in any invention, patent, trade secret, trademark, copyright, data or
information of the disclosing party.
f. Except as expressly stated herein, this Agreement shall not affect
either party's present or future rights under any country's patent laws.
8.02 Notwithstanding the expiration of other portions of this Agreement,
the obligations of the parties under this Section 8 shall continue for a period
of three (3) years from the termination or expiration of this Agreement.
4
SECTION 9
INDEMNIFICATION
Each party (an "Indemnitor") agrees to indemnify, defend and hold harmless
the other party and its respective subsidiaries, parents, affiliates, directors,
officers and employees (each an "Indemnitee") from any loss, liability, damages,
costs or expense (including reasonable attorneys' fees) ("Losses"), arising out
of any claim for property damage, personal injury or death (a "Claim") where a
product or service supplied under this Agreement, or the negligence or willful
misconduct of the Indemnitor, is alleged to have caused or contributed to the
damage, injury or death, but only to the extent such Losses are caused by the
negligence or willful misconduct of the Indemnitor. Notwithstanding the
foregoing, this indemnification does not apply to Losses to the extent caused by
the negligence or willful misconduct of an Indemnitee or any of its employees or
agents.
An Indemnitor's indemnity obligation pursuant to this section shall be
conditioned upon (a) Indemnitee providing the Indemnitor timely written notice
of the Claim, (b) Indemnitee providing complete and timely assistance in
investigating and defending such Claim, (c) Indemnitee not settling, releasing
or otherwise disposing of such Claim without Indemnitor's prior written consent,
and (d) Indemnitor having exclusive control of the defense of any such Claim, if
it so elects, including selection of counsel. If Indemnitee objects to
Indemnitor's selection of counsel, Indemnitee may hire counsel of its own
choosing, and Indemnitor's obligation to Indemnitee pursuant to this section
shall cease. Prior to the settlement, release or other disposition
("Disposition") of any such Claim as it relates to Indemnitee, Indemnitor shall
give written notice to Indemnitee of the proposed terms and conditions of the
proposed Disposition. Within 10 days of Indemnitor's notice, Indemnitee shall
either give written notice to Indemnitor of its consent to the proposed
Disposition or its objection to the proposed Disposition. If Indemnitee objects
to the proposed Disposition of such Claim, Indemnitor shall not settle, release,
or otherwise dispose of such Claim as it relates to Indemnitee, but shall
withdraw from and promptly surrender to Indemnitee the defense of such Claim, as
it relates to Indemnitee. Upon such withdrawal, Indemnitor's obligation to
Indemnitee pursuant to this section shall cease.
SECTION 10
Intentionally Deleted
SECTION 11
SERVICES
11.01 Customer Support: Beginning on the Effective Date and for a period of
ninety (90) days thereafter (the "Transition Period"), Seller shall perform the
customer support services described in Exhibit E ("Customer Support Services")
within such time parameters as are mutually agreed to by the parties. Seller
shall retain and utilize a sufficient number of qualified personnel to perform
the Services; provided, however, that nothing herein shall require Seller to
perform customer support services for Buyer that are materially beyond the scope
of services heretofore provided by Seller for customer support of its wound care
business. Seller shall be obligated to provide the Customer Support Services
only during normal business hours. In consideration of Seller's performance of
the Customer Support Services, Buyer shall pay Seller Two Thousand Five Hundred
Dollars ($2,500), which amount shall become due and payable on or before ninety
(90) days following the Effective Date.
5
11.02 Equipment Operation Training: Seller shall train and instruct Buyer
as to the operation of the Equipment (as defined in the Purchase Agreement) and
support the installation and start-up of such Equipment at Buyer's facility in a
manner mutually agreed to by the parties (the "Equipment Support Services"). In
order to perform the Equipment Support Services, Seller shall provide Buyer with
two qualified, mutually agreed upon personnel who will each perform eighty (80)
hours of Equipment Support Services (total of one hundred and sixty (160) hours)
at a location to be determined by Buyer. Travel time shall be included in the
calculation of hours worked by the personnel. In consideration of Seller's
performance of the Equipment Support Services, Buyer shall pay Seller an amount
equal to the number of hours worked by the personnel multiplied by the straight
time wage rate of the personnel, plus all reasonable travel expenses. Seller
shall submit an invoice for such amounts after completion of the Equipment
Support Services and Buyer shall pay such invoice within thirty (30) days after
receipt.
11.03 Service Warranty: Seller agrees to perform the services described in
this Section 11 in a professional and competent manner, using at least the same
standard of care that they use in performing such services in its own affairs.
EXCEPT AS PROVIDED IN THIS SECTION 11.03, SELLER MAKES NO WARRANTIES, EXPRESS OR
IMPLIED. INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY
OR FINTNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE TRANSITION SERVICES TO
BE PROVIDED HEREUNDER.
SECTION 12
GENERAL
12.01 Assignment: Neither party shall assign or transfer any right,
obligation or interest under this Agreement to any person, firm or corporation,
without the prior written consent of the other party. Any purported assignment
or transfer in violation of this Agreement shall be void and constitute a
material breach of this Agreement.
12.02 Independent Contractor: K-C shall be an independent contractor in its
performance of this Agreement and shall not be deemed, expressly or by
implication, to be an agent, employee, representative or servant of Buyer for
any purpose whatsoever. Buyer shall not have the power to control the manner in
which K-C performs its obligations under this Agreement but shall look to K-C
only for the results achieved.
12.03 Contracts With Others: Unless otherwise provided in Section 11.01 or
Exhibit E, neither Buyer nor any of its agents, employees, representatives or
servants shall have any authority to bind K-C in any contract with any third
party, including, but not limited to, purchasers, customers, prospective
purchasers or customers, or any person who contemplates any business
relationship with K-C.
6
12.04 Force Majeure: Neither party to this Agreement shall be liable for
delay or failure to perform under this Agreement which results from any
occurrence or event which could not have been reasonably avoided including, but
not limited to, accident, action of the elements, act of God, civil commotion,
enemy action, epidemic, explosion, fire, flood, insurrection, strike, lockout or
other labor trouble or shortage, natural catastrophe, riot, unavailability or
shortage of material, equipment or transportation, war, act, demand or
requirement of law or of the Government of the United States of America or any
other competent governmental authority, or any other similar cause beyond such
party's control, if the party in default makes reasonable efforts to remove or
overcome the effects of such occurrence or event. If a party believes that any
one or more of the above occurrences or events shall cause a delay or prevent
its performance hereunder, it shall promptly notify the other in writing of such
fact.
12.05 Governing Law: This Agreement shall be construed and performed
according to the laws of the State of Texas, U.S.A.
12.06 Notices: All notices and communications in connection with this
Agreement shall be in writing and shall be deemed sufficient and delivery
thereof shall be deemed complete on the fifth (5th) day after mailing, on the
part of K-C, if sent by registered or certified mail to:
Xxxxxxxx-Xxxxx Corporation
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
ATTENTION: President, Health Care
and on the part of Buyer, if sent by registered or certified mail to:
Derma Sciences, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
ATTENTION: President
or any other address and to the attention of any other person as either of the
parties may specify hereafter by written notice to the other.
12.08 Severability of Provisions: If any provision of this Agreement or the
Exhibits hereto shall be determined to be invalid, illegal or unenforceable
under law, the validity and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
12.09 Waiver of Breach: No waiver of breach of any of the provisions of
this Agreement shall be construed to be a waiver of any succeeding breach of the
same or any other provision.
12.10 Section Headings: Section headings used in this Agreement are for the
purpose of reference only and shall not be considered in construing this
Agreement.
12.11 Counterparts: This document shall be executed in two (2)
counterparts, each of which shall constitute an original Agreement.
12.12 Entire Agreement: This Agreement and its Exhibits constitutes the
entire agreement between the parties related to the subject matter hereof, and
cancels and supersedes all prior or contemporaneous agreements, whether oral or
written, relating to the subject matter of this Agreement. No amendment or
change in this Agreement shall be valid unless made in writing and signed by
both parties.
7
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.
Xxxxxxxx-Xxxxx Corporation
By:____________________________
Title: President, Business-to-Business
Derma Sciences, Inc.
By:____________________________
Title: President and Chief Executive Officer
Supply Agreement Exhibit A (Trademark Estate)
Trademark Trademark Type Stock Code Material Description
--------- -------------- ---------- --------------------
SHUR-CONFORM* Common Law 77041 "SHUR-CONFORM* Oil Emulsion Dressings, 3"" X 0"""
XXXX-XXXXXXX* Common Law 77042 "SHUR-CONFORM* Oil Emulsion Dressings, 3"" X 0"""
XXXX-XXXXXXX* Common Law 77043 "SHUR-CONFORM* Oil Emulsion Dressings, 3"" X 16"""
SHUR-CONFORM* Common Law 77044 "SHUR-CONFORM* Oil Emulsion Dressings, 3"" X 8"""
COVERALL* 5 N' 1 Common Law 20017 "COVERALL* 5 'n 1 Border Gauze, Non-Sterile, 6"" X 6"""
COVERALL* 5 N' 1 Common Law 77045 "COVERALL* 5 'n 1 Dressing, Sterile, 4"" X 4"""
COVERALL* 5 N' 1 Common Law 77046 "COVERALL* 5 'n 1 Dressing, Sterile, 6"" X 6"""
COVERALL* 5 N' 1 Common Law 77047 "COVERALL* 5 'n 1 Dressing, Sterile, 6"" X 0"""
XXXX-XXXXX(X) "US Reg. 1,156,937 " 81117 "S101 Shur Strips (1/8"" x 3"")"
SHUR-STRIP(R) "US Reg. 1,156,937 " 81118 "S102 Shur Strips (1/4"" x 3"")"
SHUR-STRIP(R) "US Reg. 1,156,937 " 81119 "S103 Xxxx Xxxxxx (0/0"" x 0 0/0"")"
XXXX-XXXXX(X) "US Reg. 1,156,937 " 81120 "S105 Shur Strips (1/4"" x 4"")"
SHUR-STRIP(R) "US Reg. 1,156,937 " 81121 "S106 Shur Strips (1/2"" x 4"")"
SHUR-STRIP(R) "US Reg. 1,156,937 " 81122 "S107 Shur Strips (1"" x 4"")"
SHUR-STRIP(R) "US Reg. 1,156,937 " 71149 NS101 Nonsterile bulk
SHUR-STRIP(R) "US Reg. 1,156,937 " 71150 NS102 Nonsterile bulk
SHUR-STRIP(R) "US Reg. 1,156,937 " 71151 NS103 Nonsterile bulk
SHUR-STRIP(R) "US Reg. 1,156,937 " 71152 NS105 Nonsterile bulk
SHUR-STRIP(R) "US Reg. 1,156,937 " 71153 NS106 Nonsterile bulk
SHUR-STRIP(R) "US Reg. 1,156,937 " 71154 NS107 Nonsterile bulk
Supply Agreement Exhibit B (Transfer Prices)
Xxxxxxxx- Xxxxxxxx- Xxxxxxxx-
Xxxxx Derma Xxxxx Derma Xxxxx Derma
Stock Inventory Cost Stock Inventory Cost Stock Inventory Cost
Code ($/CASE) Code ($/CASE) Code ($/CASE)
20017 $56.87 81122 $54.56 10503 $44.00
20049 $48.00 99815 $31.77 10505 $63.20
20053 $28.00 99816 $22.30 10506 $43.20
20056 $27.89 99817 $27.30 10507 $90.40
20059 $27.36 99818 $18.33 10539 $38.47
20062 $32.60 99819 $20.17 10549 $59.20
20065 $43.21 99820 $40.52 10559 $16.81
20068 $72.96 99821 $24.72 10560 $21.82
71149 $57.09 99822 $22.59 10561 $14.40
71150 $57.09 99823 $34.41 10563 $14.48
71151 $57.09 13082 $17.28 10564 $16.90
71152 $67.65 13083 $22.56 10565 $23.04
71153 $67.65 20046 $29.76 10567 $16.26
71154 $74.44 10223 $61.60 10568 $15.67
71164 $84.00 10224 $96.00 10569 $46.40
71165 $128.00 10239 $124.80 10570 $64.96
77030 $61.12 10364 $23.12 10578 $50.05
77034 $50.80 20016 $63.83 10579 $53.76
77041 $124.66 20019 $40.11 10580 $53.76
77042 $59.50 20024 $81.35 10590 $31.20
77043 $135.24 20027 $22.68 10599 $17.89
77044 $106.73 20030 $24.68 10600 $30.03
77045 $73.71 20033 $29.11 10607 $38.69
77046 $115.20 20036 $36.71 10611 $91.94
77047 $136.80 20039 $42.16 10614 $34.11
77051 $15.28 20043 $49.85 10617 $62.40
77052 $15.28 10426 $52.00 99988 $38.94
77053 $17.12 10427 $52.00 99989 $51.52
77054 $19.84 10428 $52.00 99990 $58.41
77061 $16.16 10429 $80.00 10619 $45.60
77062 $16.96 10431 $80.00 68799 $26.40
77063 $19.84 10432 $80.00 99970 $9.97
77064 $28.48 10472 $112.00 20071 $50.16
81117 $52.60 10474 $112.00 20074 $43.22
81118 $50.22 10477 $62.40 20077 $74.02
81119 $46.60 10489 $45.60 20082 $67.54
81120 $60.54 10499 $32.80
81121 $71.26 10501 $72.80
Supply Agreement Exhibit C
During
Transition
Period Derma OK'd
Stock Projected OEM & KC
Code Sales(CS) Inventory(CS)
----- --------- -------------
20017 0.0 0.0
20049 65.8 87.7
20053 34.3 45.7
20056 357.0 476.0
20059 165.5 220.7
20062 133.8 178.3
20065 83.5 111.3
20068 351.0 468.0
71149 0.0 0.0
71150 1.0 1.3
71151 0.0 0.0
71152 0.0 0.0
71153 87.5 116.7
71154 1.0 1.3
71164 2.0 2.7
71165 14.3 19.0
77030 31.8 42.3
77034 221.5 295.3
77041 80.8 107.7
77042 142.8 190.3
77043 10.5 14.0
77044 11.3 15.0
77045 68.5 91.3
77046 30.8 41.0
77047 7.8 10.3
77051 709.8 946.3
77052 547.5 730.0
77053 320.0 426.7
77054 55.3 73.7
77061 685.0 913.3
77062 480.3 640.3
77063 319.3 425.7
77064 108.5 144.7
81117 82.3 109.7
81118 360.8 481.0
81119 30.3 40.3
81120 70.0 93.3
81121 229.0 305.3
81122 3.5 4.7
99815 10.8 14.3
99816 0.0 0.0
99817 5.3 7.0
99818 3.3 4.3
99819 0.0 0.0
99820 0.8 1.0
99821 6.0 8.0
99822 164.8 219.7
99823 8.8 11.7
13082 330.0 330.0
13083 0.0 0.0
20046 812.3 837.0
10223 0.0 0.0
10224 0.0 0.0
10239 0.0 0.0
10364 0.0 0.0
20016 0.0 1,000.0
20019 150.0 0.0
20024 1,082.5 0.0
Exhibit C (Projected Volumes) Page 1 of 2
During
Transition
Period Derma OK'd
Stock Projected OEM & KC
Code Sales(CS) Inventory(CS)
----- --------- -------------
20027 150.0 0.0
20030 1,299.0 0.0
20033 0.0 500.0
20036 160.0 350.0
20039 108.3 0.0
20043 129.9 0.0
10426 0.0 63.0
10427 0.0 63.0
10428 126.0 315.0
10429 0.0 252.0
10431 0.0 252.0
10432 0.0 0.0
10472 0.0 0.0
10474 0.0 0.0
10477 0.0 0.0
10489 0.0 0.0
10499 0.0 0.0
10501 0.0 0.0
10503 0.0 0.0
10505 0.0 0.0
10506 0.0 0.0
10507 0.0 0.0
10539 0.0 0.0
10549 0.0 0.0
10559 0.0 0.0
10560 0.0 0.0
10561 0.0 0.0
10563 0.0 0.0
10564 0.0 0.0
10565 0.0 0.0
10567 0.0 0.0
10568 0.0 0.0
10569 0.0 0.0
10570 0.0 0.0
10578 0.0 0.0
10579 0.0 0.0
10580 0.0 0.0
10590 150.0 350.0
10599 150.0 150.0
10600 0.0 0.0
10607 0.0 50.0
10609 0.0 0.0
10611 0.0 10.0
10614 120.0 268.0
10617 30.0 0.0
99987 0.0 0.0
99988 0.0 0.0
99989 30.0 30.0
99990 25.0 25.0
10619 300.0 300.0
68799 400.0 400.0
99970 0.0 0.0
20071 194.9 0.0
20074 0.0 60.0
20077 220.0 0.0
20082 43.3 40.0
TOTAL 12,113.9 13,782.0
Exhibit C (Projected Volumes) Page 2 of 2
Supply Agreement Exhibit D (RM Inventory & Cost)
Ending Inventory 3/29/04 Derma to
Part UM (includes purchases) Cost Ext. Cost take
---- -- ------------------------ ---- --------- --------
0001703274 EA 4990 $0.02 $84.83 Yes
0001735813 RL 97 $44.62 $4,327.91 Yes
016004 LY 2583 $0.07 $173.84 Yes
0160095000 EA 2004 $0.45 $901.80 Yes
0000000000 EA 1269 $0.45 $571.05 Yes
0160109000 EA 2639 $1.01 $2,677.27 Yes
0160110000 EA 6115 $0.62 $3,810.26 Yes
0160111000 EA 5519 $0.44 $2,420.63 Yes
0160112000 EA 838 $1.11 $933.53 Yes
0160778000 EA 2364 $0.88 $2,090.49 Yes
022000 EA 0 $0.01 $0.00 Yes
022975 EA 2717 $0.44 $1,195.48 Yes
000000 XX 000 $0.84 $401.63 Yes
000000 XX 00000 $0.08 $4,895.19 Yes
025900 EA 0 $0.03 $0.00 Yes
0260769000 EA 343 $0.76 $260.92 Yes
0260770000 EA 1185 $0.65 $768.00 Yes
0260771000 EA 353 $0.84 $295.81 Yes
0260813000 EA 610 $0.54 $331.84 Yes
0260865000 EA 1019 $0.46 $469.56 Yes
0260903000 EA 10 $0.73 $7.33 Yes
0260904000 EA 214 $0.58 $123.63 Yes
000000 XX 000 $0.58 $256.94 Yes
000000 XX 000 $0.88 $242.22 Yes
027061 FT 17323 $0.06 $1,122.53 Yes
000000 XX 000 $0.63 $534.89 Yes
000000 XX 000 $0.63 $378.72 Yes
029100 FT 34606 $0.18 $6,312.13 Yes
0000000000 EA 66500 $0.09 $6,197.80 Yes
0000000000 EA 58900 $0.06 $3,551.67 yes
R10238 LB 454 $1.75 $794.50 Yes
R10254 KG 172.5 $50.49 $8,709.49 Yes
R10283 EA 172 $0.59 $101.84 Yes
R10298 EA 72 $0.56 $40.05 Yes
R10306 EA 67300 $0.01 $444.18 Yes
R10324 FT 19980 $0.05 $999.00 Yes
R10342 LY 47193 $0.02 $811.72 Yes
R10343 LY 141001.5 $0.05 $7,120.58 Yes
R10344 LY 143708 $0.09 $12,373.26 Yes
R10345 LY 622 $0.10 $62.82 Yes
R10359 LB 55.1 $44.00 $2,424.40 Yes
R10360 LY 33796 $0.03 $953.05 Yes
R10361 LY 57566 $0.03 $1,963.00 Yes
R10362 LY 66700 $0.05 $3,428.38 Yes
R10363 LY 38180 $0.09 $3,352.20 Yes
R10381 FT 12895 $0.13 $1,663.46 Yes
R10382 FT 3490 $0.11 $369.24 Yes
R10405 LB 7.2 $7.05 $50.74 Yes
R10406 LB 60.4 $6.15 $371.46 Yes
R10407 GL 20.8 $5.38 $111.90 Yes
R10410 FT 139242 $0.01 $1,935.46 Yes
R10430 LB 328 $0.97 $318.16 Yes
R10431 LB 1520 $0.86 $1,307.05 Yes
R10618 LB 40.2 $1.14 $45.68 Yes
R10687 EA 95200 $0.03 $2,760.80 Yes
R10717 EA 348 $0.31 $108.05 Yes
R10731 EA 965 $0.27 $264.41 Yes
R10732 EA 1142 $0.44 $501.68 Yes
R10733 EA 588 $0.65 $379.85 Yes
R10737 FT 1862 $0.25 $459.91 Yes
Exhibit D (RM Volumes Cost) Page 1 of 2
Ending Inventory 3/29/04 Derma to
Part UM (includes purchases) Cost Ext. Cost take
---- -- ------------------------ ---- --------- --------
R10739 FT 5162 $0.05 $237.97 Yes
R10740 FT 5000 $0.05 $231.50 Yes
R10751 EA 347 $0.60 $207.16 Yes
R10755 EA 817 $0.47 $384.40 Yes
R10759 EA 137 $0.41 $56.51 Yes
R10763 EA 562 $0.49 $274.37 Yes
R14086 EA 2435 $0.87 $2,128.92 Yes
R14128 LY 31858 $0.08 $2,389.35 Yes
R14138 EA 907 $0.58 $526.06 Yes
R14139 EA 1104 $0.51 $567.46 Yes
R14140 EA 873 $0.48 $417.29 Yes
R14141 EA 745 $0.44 $330.78 Yes
R14150 FT 151128 $0.05 $7,465.72 Yes
R15395 EA 24900 $0.04 $888.93 Yes
R15816 EA 10890 $0.12 $1,280.66 Yes
R15838 LB 53 $16.96 $898.88 Yes
R15839 KG 30 $56.82 $1,704.55 Yes
R15841 EA 1800 $0.14 $247.50 Yes
R15842 EA 5590 $0.28 $1,565.20 Yes
R15868 FT 27949 $0.04 $1,218.58 Yes
R16062 LB 6.8 $33.16 $225.49 Yes
R16063 GL 3.6 $8.35 $30.06 Yes
R16064 LB 474 $0.73 $345.64 Yes
R16113 LB 37.3 $166.28 $6,202.24 Yes
R16114 LB 129.8 $1.28 $166.20 Yes
R16658 EA 1148 $0.42 $479.29 Yes
R16659 EA 421 $0.51 $213.95 Yes
R16691 FT 80318 $0.04 $3,429.58 Yes
R16692 FT 47634 $0.03 $1,228.96 Yes
R17182 EA 988 $0.45 $447.56 Yes
R17232 FT 68418 $0.08 $5,254.50 Yes
R17493 EA 524 $0.33 $172.87 Yes
R17496 FT 20890 $0.03 $714.44 Yes
R17501 FT 9259 $0.03 $273.14 Yes
R17510 LY 23267 $0.03 $663.11 Yes
R17511 LY 61911 $0.03 $2,043.06 Yes
R17512 LY 51065 $0.05 $2,711.55 Yes
R17526 FT 57572 $0.05 $2,878.60 Yes
R17588 FT 70800 $0.11 $7,788.00 Yes
R17589 EA 241 $0.54 $129.71 Yes
R17590 EA 534 $0.46 $246.71 Yes
R17591 EA 434 $1.45 $629.73 Yes
R17592 EA 842 $0.63 $531.30 Yes
R17593 EA 475 $0.39 $186.63 Yes
R17594 EA 327 $0.47 $153.98 Yes
R17595 EA 98 $0.58 $57.09 Yes
R17596 EA 281 $0.51 $141.99 Yes
R17609 EA 3391 $0.44 $1,492.04 Yes
R17611 EA 550 $0.58 $319.00 Yes
R17786 EA 4731 $0.12 $586.64 Yes
R17788 EA 1016 $0.52 $528.32 Yes
R17789 EA 446 $0.61 $272.10 Yes
R18211 EA 686 $0.30 $207.65 Yes
R18469 EA 40700 $0.985 $40,089.50 Yes
R18471 EA 20000 $1.16 $23,200.00 Yes
R18468 EA 37500 $0.42 $15,750.00 Yes
R18470 EA 5000 $1.62 $8,100.00 Yes
$250,476.63
Exhibit D (RM Volumes Cost) Page 2 of 2
EXHIBIT E
DESCRIPTION OF SERVICES
-----------------------
Order Processing/Customer Service, Invoicing/Accounts Receivable, Rebate
--------------------------------------------------------------------------------
Processing, Partners in Quality:
-------------------------------
o Seller will continue providing these services during the Transition
Period. Except as noted below, all of these services will end upon the
same date. The termination of these services will occur immediately
following a month end.
o For a period of up to one hundred and twenty (120) days following the
transition of the Invoicing, Order Processing, Customer Service and
Partners in Quality functions, Seller shall maintain the collection and
accounts receivable functions.
o When errant orders or returns are received after the customers have
been notified of the change in purchasing instructions, Seller and the
Buyer will work with their respective customers to instruct them as to
how to correct the process of placing orders and processing returns
with their counter part. Buyer and Seller will cooperate to encourage
all current customers to effect the change in ordering pattern.
o All orders that are taken by Seller during the Transition Period will
be consistent with Seller's existing terms and conditions.
o All returns of values less than $10,000 shall be managed using Seller's
existing returns policy. Returns valued at $10,000 or higher shall
require authorization from Buyer. All restocking fees shall belong to
Buyer.
o Seller shall provide data gathered for any Product related complaint to
Buyer. Buyer will be responsible for required regulatory filing.
Warehousing and Order Fulfillment:
---------------------------------
o Seller will provide these services to the Buyer for a period of up to
one hundred and twenty (120) days after the date hereof.
o Warehousing and order fulfillment will only be provided for orders
taken through K-C's order entry process. o Seller will fill all orders
received through its Order Processing System. Buyer will fill all
orders received through its Order Processing System.
o Seller will administer the services in a manner consistent with its
policies.
Management Information Systems:
------------------------------
o Seller will provide these services during the Transition Period.
o Services will be limited to production of those reports that Seller has
normally used in connection with the Activity and also providing the
necessary transfer of data necessary to get all records to the Buyer
for the Buyer's input into Buyer's information systems.
o Seller will cooperate with Buyer to transition these services to the
mutual benefit of both parties and to facilitate the data exchange in
an efficient manner.
o Requests for reports or services outside those already produced in
managing the product line will result in incremental charges to the
Buyer. Such requests will be evaluated by the Seller and a quote for
the cost and timing will be provided to the Buyer.
Remittance of Interim Sales:
---------------------------
K-C will provide Derma with an income statement for the sales of Product within
8 business days of a month's end. The statement will provide Gross Profits
derived by reducing the value of Gross Sales for the month by a Cash Discount
(agreed to be 1% of Gross Sales), Rebates (agreed to be 3% of Gross Sales), Cost
of Goods Sold (at the prices described in Exhibit B) and Distribution Expense
(agreed to be 1.5% of Gross Sales). K-C will pay to Derma the resulting Gross
Profit less the change in receivables occurring in the month. The change in
receivables is agreed to be the Net Sales (defined as Gross Sales less the 1%
Cash Discount and 3% Rebates), for the current month less the Net Sales for the
prior month. The following table is provided for illustration:
-----------------------|-----------------------------------------------------------------------
| January February March April
-----------------------|-----------------------------------------------------------------------
Gross Sales | $ 100,000 $ 90,000 $ 120,000
| $ 1,000 $ 900 $ 1,200
Rebates (3%) | $ 3,000 $ 2,700 $ 3,600
Net Sales | $ 96,000 $ 86,400 $ 115,200
|
COGS | $ 70,000 $ 63,000 $ 84,000
| $ 1,500 $ 1,350 $ 1,800
Gross Profit (24.5%) | $ 24,500 $ 22,050 $ 29,400
-----------------------|-----------------------------------------------------------------------
|
TRANSACTIONS |
------------ |
Created Receivables | $ (96,000) $ (86,400) $ (115,200) -
| $ - $ 96,000 $ 86,400 $ 115,200
Profit Due to Derma | $ 24,500 $ 22,050 $ 29,400 -
=======================|=======================================================================
TOTAL PAYMENT TO DERMA | $ (71,500) $ 31,650 $ 600 $ 115,200
-----------------------------------------------------------------------------------------------
Payment of moneys due shall be made within 30 days of the end of month being
reported.
Should K-C have any uncollected receivables related to sales of Product made
under this agreement as of July 1, 2004, K-C will invoice Derma for the amount
of the uncollected debts. Derma will pay K-C for the invoice within 30 days and
will assume responsibility for the collection of the receivable.
