Exhibit 10.1
Execution Copy
EXCLUSIVE SALES AND MARKETING AGREEMENT
This AGREEMENT made the 5th day of October, 2000 (the "Effective Date") by
HOSPITAL SPECIALTY COMPANY, (hereinafter "HSC"), a Division of The Tranzonic
Companies, an Ohio corporation with principal offices at 000 Xxxxx Xxxxx,
Xxxxxxxx Xxxxxxx, Xxxx 00000 and RMED International, Inc., (hereinafter
"Contractor"), a Colorado corporation, with principal offices at 0000 X.
Xxxxxxxx Xxx, Xxx Xxxxxx, XX 00000.
RECITALS:
WHEREAS, HSC desires to purchase certain designated quantities of private
label (product packaged in packages containing the name provided by the
customer) and control label (brand name used by the manufacturer/marketer as its
own product name) baby diapers as described in Exhibit 1 attached hereto
(hereinafter the "Products" or "Units"), from a manufacturer who will
manufacture said Units in accordance with the agreed upon specifications;
WHEREAS, Contractor is in the business of manufacturing baby diapers as
well as other items for its customers and desires to manufacture and assemble
Units for HSC, as per the terms and conditions hereinafter set forth.
NOW THEREFORE, the parties agree as follows:
1. MANUFACTURE AND SUPPLY.
Contractor shall sell the Products to HSC in accordance with the
specifications provided herein and in the specifications attached hereto as
Exhibit I (the "Specifications") (including, without limitation, Product
description, manufacturing specification, any packaging and labeling
specifications and shipping instructions) agreed upon by the parties from time
to time. The Units shall be manufactured by Contractor in its own facilities in
Eau Claire, WI pursuant to the terms and conditions set forth herein and in the
Specifications. Hereafter, from time to time, HSC may request and may order,
through formal purchase orders, various quantities of the Products. Upon its
acceptance of each such purchase order, Contractor shall be obligated to
manufacture and ship the Products described therein in accordance with the
terms, conditions, schedules for delivery and purchase prices reflected therein
and as set forth in this Agreement.
Contractor will maintain sufficient inventory quantities to meet HSC's
customer delivery requirements pursuant to instructions from HSC. Contractor
will be liable for any penalties associated with shipping delays to HSC or HSC's
customers unless such delay can be attributed to untimely or incomplete
instructions from HSC.
2. SALES AND MARKETING.
HSC shall use reasonable commercial efforts to market and sell the
Products in North America (USA, Canada, Mexico). HSC will provide Contractor
with a written marketing plan outlining HSC's efforts to market and sell the
Products. The parties will review together such
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marketing plan at least quarterly in order to determine the acceptability of the
marketing plan and to provide information to Contractor for the most
cost-effective manufacture of the Products at levels necessary to meet the
demand of HSC and its customers. HSC shall be responsible for all costs related
to sales and marketing efforts.
Contractor will have no direct contact with HSC's customers unless
instructed to do so by HSC and then only to the extent expressly authorized by
HSC.
3. EXCLUSIVITY.
It is agreed to by the parties that HSC shall have the exclusive right to
market and sell private label baby diapers and its own control label baby
diapers (e.g., "Precious") in North America (USA, Canada, Mexico) which are
manufactured by Contractor. In addition, Contractor agrees to offer HSC the
right of first refusal to market or sell any new products that Contractor
manufactures during term of this Agreement for the private label market. Terms
of sale of the new products to be negotiated and subject to the conditions of
this agreement.
Provided that Contractor is able to supply the Products pursuant to the
Specifications contained herein and at the quantities required by HSC, HSC
agrees to purchase baby diapers exclusively from Contractor. If and only if
Contractor is unable to supply all of HSC's requirements for Products, then HSC
and Contractor will seek and agree on the manufacturer to cover such shortfall.
Contractor maintains the right to manufacture baby diapers for diaper
manufacturers provided that such baby diapers are brand name and not for private
label retail. In addition, this Agreement shall not preclude Contractor from
manufacturing and selling its "TenderCare", "Tushies", "Rock-A-Bye" or "Bumpies"
brand baby diapers. Notwithstanding the foregoing, HSC's production requirements
will take precedence over Contractor's manufacturing for other diaper
manufacturers.
If both parties agree to terminate the exclusive sales and marketing
provisions of this Agreement, but continue the supply relationship, then
Contractor agrees not to compete against HSC for a period of three (3) years in
those baby diapers accounts that HSC has sold baby diapers during the 12 months
prior to termination of this exclusivity. An HSC customer is defined as whomever
HSC invoices.
4. DESIGN AND SPECIFICATION.
(a) Contractor shall be responsible for the engineering and
manufacture in compliance with the National Brand Equivalent
Specifications as agreed to and attached hereto and as may change
from time to time.
(b) Contractor shall provide samples of the Products to HSC and HSC
shall approve or (disapprove) such samples in writing upon execution
of this agreement and in the future when both parties agree to
change specifications.
(c) Contractor shall also submit any and all drawings and component
specifications, and any subsequent changes thereto, to be used in
manufacturing
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Products for HSC. HSC shall approve in writing any changes to the
drawings or component or other specifications or any changes to the
Specifications prior to the commencement of production of any
Product incorporating such changes. Contractor agrees not to make
any changes to the Specifications without the prior written
authorization from HSC and agreed upon samples will be provided.
Contractor owns the specifications but HSC has the right to use the
specifications after termination. HSC is not precluded from using
the specifications with other contractors when we need to use other
contractors under this agreement.
5. PURCHASE PRICES AND PAYMENT TERMS
The prices to be paid by HSC to Contractor for the Units purchased
pursuant to this Agreement shall be as set forth in the Specifications for all
relevant SKU's, and pursuant to the specific purchase orders to be issued during
the term of the Agreement. Contractor will determine base-line costs immediately
upon execution of this Agreement and provide such information to HSC at such
time. The prices of Units will be fixed for a six (6) month period from the
Effective Date of this Agreement and cannot be changed thereafter unless
Contractor provides HSC with sixty (60) days notice of production cost increases
of at least five percent (5%) and only to the extent of actual increases in such
costs. Contractor shall provide reasonable documentation to HSC supporting such
production cost increases. Subsequent price adjustments shall be fixed for a six
month period from the date of price adjustment. Contractor will use its best
efforts to provide pricing that allows HSC to compete effectively in the retail
baby diaper market and make a reasonable margin of profit. In furtherance of
this obligation, Contractor agrees to notify HSC of production cost decreases of
five percent (5%) or more and will decrease its prices immediately upon and to
the extent of such actual cost decreases.
Payment terms shall be net thirty (30) days from date of receipt at HSC's
plant or shipping date to the customer, with a 2% discount for payment made
within fifteen (15) days of receipt at HSC's plant or shipping date to the
customer.
Such prices shall represent the total cost of the Products to HSC from
Contractor, including, but not limited to, the price of the Products, the
packaging, warehousing, literature, any applicable taxes or assessments and all
delivery costs up to the time that HSC takes title to the goods. Contractor
agrees to warehouse and drop ship the Products for HSC at no additional cost to
HSC. Upon instruction from HSC, the Products shall be delivered by Contractor to
the carrier chosen by HSC. All outbound shipments to HSC customers will indicate
HSC as the shipper. Freight will be billed third party to HSC.
Contractor shall, at its own cost, inventory and transport to its
production facility all raw materials and component parts (if applicable) for
the completed assembly of the Units.
It is further agreed and understood as follows: (i) any modifications to
purchase orders, including, but not limited to, modifications to the purchase
price set forth in the Specifications, issued pursuant to this Agreement must be
in writing and executed by authorized officers of both HSC and Contractor; (ii)
the specifications and purchase price for any additional items added to the
Products, which items are added after the date of this Agreement ("New Items"),
shall be established by written agreement of the parties and (iii) all New
Items, the specifications
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therefor and the agreed upon purchase price therefor shall be added to this
Agreement as an exhibit, amendment or supplement and upon the addition of New
Items to this Agreement, (a) the New Items shall become "Products" or "Units" as
defined in this Agreement, (b) the specifications for the New Items shall become
"Specifications" as defined in this Agreement and (c) such "Products" and
"Specifications" shall thereafter be subject to all of the provisions of this
Agreement and all of the rights and remedies of the parties conferred hereby.
Prices are FOB Contractor's plant.
6. TERM.
a. The term of this Agreement (the "Term") shall begin on October 5,
2000 and shall extend through October 4, 2003 unless such Term is
terminated prior to such date in accordance with the terms of this
Agreement.
b. The term of this Agreement will automatically renew for
additional one year terms unless either party gives at least one
year's prior notice of its intention to not renew this Agreement.
Neither Notice of termination nor expiration of the Term shall
affect the obligations of the parties under this Agreement with
respect to any pending purchase orders which have been issued and
accepted prior to the effective date of termination or expiration
date of this Agreement and the terms of this Agreement shall remain
effective until all such purchase orders shall have been satisfied
or terminated in writing by the parties.
c. Notwithstanding the termination of this Agreement by any party
hereto (including termination under this Section or any other
Section) or the expiration of this Agreement pursuant to its terms,
the obligations of Contractor pursuant to Sections 12
(indemnification), 9 (warranty), and 13 (patents, trademarks and
other conditions relating to intellectual property rights) shall
survive.
d. After notice and at HSC's request and directions, Contractor
shall ship all HSC property, including, but not limited to, any and
all materials bearing Proprietary Marks (as defined in Section 13 of
this Agreement) and all materials constituting Trade Secrets and
Confidential Information of HSC, directly to HSC or to any other
location as may be designated at such time by HSC. HSC will pay for
such materials provided that they had not been previously paid and
shipping cost will be paid by HSC.
7. PACKAGING.
All Products shall be packaged at Contractor's sole expense in strict
accordance with the following:
a. Specifications annexed hereto as Exhibit "1".
b. HSC shall supply, at no charge, all color separations, films
and/or camera ready art necessary to produce all packaging.
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c. Contractor shall not commence production or reproduction of any
packaging without supplying HSC with samples of all such materials
and receiving written approval from HSC prior to production. Once
any such material is approved, Contractor shall make no changes in
such material without the prior written approval of HSC.
d. Contractor shall be responsible for all reasonable costs
associated with printing, production or fabrication of such
packaging.
e. All separations, films, camera ready art and other packaging and
literature provided by HSC shall at all times remain the property of
HSC and shall be subject to the provisions of this Agreement,
including Section 13 hereof. Use of any materials provided by HSC
for the production of any packaging or Product literature pursuant
to this Agreement for any other purpose is expressly prohibited.
HSC and Contractor will agree to the minimum monthly/yearly case
requirement for a private label. HSC will use commercially reasonable efforts to
execute private label packaging agreements with all customers. Contractor will
bear the risk of loss on all private label packaging in inventory greater than
an amount equal to ninety (90) days sales if HSC has a private label packaging
agreement or Contractor and HSC have otherwise agreed in writing. HSC will be
responsible for inventory in amounts up to the equivalent of ninety (90) days
private label sales.
8. INSPECTION AND ACCEPTANCE OF FINISHED PRODUCT.
HSC reserves the right to sample, inspect, and test Products delivered to
its plant or its customers' location, as well as the packaging, labeling,
product literature and enclosures therefore, in accordance with the
Specifications set forth in Exhibit 1, and in accordance with the inspection
procedures adopted by HSC and agreed to in writing by Contractor. HSC may, at
its option, reject any production run, lot or part thereof which does not
reasonably satisfy such Specifications and inspection procedures. HSC shall not
be deemed to have accepted any individual shipment of Products if it specifies
in writing to Contractor that the relevant production run or lot has failed to
meet the Specifications or inspection standards of HSC. Upon such failure,
Contractor shall have the right to promptly cure the defect. If such defect is
due to Contractor's failure and is not cured within a reasonable period of time,
HSC shall be entitled to terminate all or part of the purchase order pursuant to
which such defective Product was produced and be reimbursed for the cost of any
rejected Products and other costs directly related to the return (i.e. freight
to and from, and/or charges or penalties that may be levied by the customer) or
other nonconforming product. Contractor shall follow good manufacturing practice
at all times and will provide HSC with comparative independent lab tests of each
of its products at minimum every six (6) months or as may be required by private
label proposals at Contractor's cost.
The acceptance of any part of a shipment of Units shall not constitute
acceptance of the whole shipment, nor does acceptance of one shipment constitute
acceptance of any subsequent shipment. The acceptance of any shipment or portion
thereof does not limit any warranty,
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indemnification or other obligations of Contractor hereunder. Payment of any
amount under any purchase order shall not constitute acceptance of any Products
delivered pursuant to such purchase order.
9. WARRANTY.
a. Contractor hereby warrants that the Units, any and all
replacements thereof and replacement parts or components thereof
will be of good and merchantable quality, fit for their intended
purpose, free of defects in material and workmanship, and shall
strictly conform to all Specifications as contained in this
Agreement or in any Exhibit or purchase order delivered pursuant to
this Agreement.
The provisions of this Section 9 and the obligations of
Contractor hereunder shall survive the termination or expiration of
this Agreement.
10. FORCE MAJEURE.
No party hereto, however, shall be responsible for delays caused by Acts
of God, labor disputes, governmental action, civil disturbances or War
(collectively "force majeure"). HSC agrees to negotiate modified shipping
schedules with Contractor in the event of a force majeure, but it is the intent
of this paragraph to identify the importance of adhering to schedules agreed
upon between HSC and Contractor. Notwithstanding the foregoing, in the event
that a force majeure shall cause or be likely to cause a delay of more than
ninety (90) days, HSC shall have the right, in its sole discretion to terminate
any purchase order or to terminate this Agreement.
11. CONFORMANCE WITH LAWS.
It is agreed between the parties that the Units and their packaging
purchased pursuant to this Agreement and subsequent purchase orders shall be
marked with the "Country of Origin" in accordance with the laws governing
importation into the United States and shall be produced, packaged and delivered
in accordance with all applicable laws including, but not limited to,
environmental laws, intellectual property laws, employee safety and welfare
laws, consumer protection laws and any other laws, regulations, of the United
States or any state, local laws or regulations and any and all applicable laws
of any other jurisdiction, domestic or foreign.
12. INDEMNIFICATION.
Contractor and all its wholly-owned or controlled subsidiaries agree to
protect, hold harmless, defend and indemnify, at its own expense HSC and its
customers from and against all liability, costs and expenses (including the fees
and expenses of attorneys and other experts or consultants) arising out of (1)
the breach of any provision of this Agreement, including those resulting from a
breach of any agreement or warranty set forth in Section 13 or (2) the death or
injury to any person, or damage to property, by whosoever suffered, resulting,
or claimed to have resulted from any purchase, sale, use or operation of any
Unit furnished hereunder, solely due to defects and/or negligence in the total
design and manufacturing process including but not limited to the components,
materials and workmanship. HSC shall promptly notify Contractor of any such
claim or lawsuit. HSC shall have the right, at its expense, to retain counsel to
participate in
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the defense of any suit. Contractor may not settle or admit liability with
respect to any such claim without the prior written consent of HSC.
Pursuant to this indemnification, Contractor shall purchase product
liability insurance with limits of not less than $2,000,000. HSC shall be "an
additional named insured" under Contractor's product liability insurance for
products manufactured for HSC. Contractor shall provide a Certificate of
Insurance showing proof of such product liability insurance and proof that HSC
is name "an additional named insured" thereunder.
HSC agrees to indemnify Contractor against any claims related to sales
promotion or warranties in excess of Contractor's warranties to HSC related to
the Products and such Products' performance.
13. PATENTS, TRADEMARKS AND OTHER CONDITIONS RELAT1NG TO INTELLECTUAL PROPERTY
RIGHTS; CONFIDENTIALITY.
a. In the event that HSC and Contractor jointly develop a patentable
item, in consideration of HSC's agreement to purchase from
Contractor hereunder Contractor agrees to irrevocably assign all
patent rights to HSC unless otherwise agreed to in writing by HSC,
except for Contractor's own branded names, patents, trademarks and
improvements, new patents, new trademarks re: those brands.
Contractor is prohibited from applying for any patents without prior
written consent from HSC.
b. Contractor shall affix to the Units trademarks, trade names,
copyrighted names and other identifying symbols of HSC, whether in
existence as of the execution of this Agreement or arising, created
or implemented after the date hereof (the "HSC Proprietary Marks")
strictly in accordance with HSC's instructions and in no other
manner. All such Proprietary Marks relating to the Units shall at
all times remain the property of HSC, and Contractor shall not at
any time acquire any rights thereto. Contractor shall not use any
such Proprietary Marks in connection with any other party's
trademark, trade name, symbol, copyrighted name or copyrighted
material or take any other action which might dilute any Proprietary
Xxxx. It is understood that this Agreement is not to be construed as
a license to Contractor to use the Proprietary Marks as described
herein and the same shall not be used in connection with any goods
other than those produced for and sold to HSC pursuant to the terms
of this Agreement. Contractor shall maintain and implement the
Quality Control Standards established by HSC. Contractor will not
sell any Product using any HSC Proprietary Marks or any marks of
HSC's customers if such Product does not conform with the
Specifications or is otherwise non-conforming as determined by HSC
in accordance with Section 8. HSC retains right of first refusal to
sell non-conforming goods as "seconds". In any event non-conforming
goods cannot be sold in original packaging without the permission of
HSC, which will not be unreasonably withheld. HSC's customer may
preclude any such disposition.
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c. In addition, each party acknowledges that, in the course of its
performance pursuant to this Agreement, it will be made aware of, be
exposed to or otherwise receive Trade Secrets or Confidential
Information (as defined below) of the other party and such Trade
Secrets or Confidential Information may not be the subject of
trademark or copyright protection. Accordingly, unless the receiving
party shall have been notified by the other party in writing that an
item is not a Trade Secret or Confidential Information, the
receiving party shall treat all information received from the other
party as a Trade Secret or Confidential Information. For the
purposes hereof, the phrase "Trade Secrets or Confidential
Information" shall have the meaning generally ascribed to these
words in common business usage, including, but not limited to, all
or any portion of (1) any business, scientific, technical or
manufacturing information, (2) any product design, process,
procedure, formula or improvement, (3) any marketing material,
Production information, or system, (4) any Product defect, design
defect, pending recall or similar information or (5) any business
plan, marketing strategy, new product line, product improvement,
financial information, cost information, profit information, listing
of names, addresses or customers.
Each party agrees that it shall use the Trade Secrets and
Confidential information strictly in conformance with the terms of
this Agreement, and shall not, without the prior written consent of
the other party, disclose or use any time, any Trade Secrets or
Confidential Information, except (1) to the extent necessary to
fulfill its obligations hereunder, (2) to the extent any such
information shall become generally available in writing to the
general public (other than through the actions of the receiving
party) or (3) to the extent required by a court of competent
jurisdiction or necessary to comply with any applicable law,
regulation or order.
d. In the event of a termination of commercial relations between the
parties hereto and/or cancellation, expiration or termination of
this Agreement for any reason whatsoever, Contractor shall not
thereafter make, use, exercise or sell any product bearing
Proprietary Xxxx or any colorable imitation thereof, and shall
promptly return to HSC all design drawings, tool drawings, tooling,
and other property belonging to HSC.
e. Contractor warrants that neither the Products nor any process
related to the Product violates or infringes any other patents,
existing or pending and that Contractor possesses any and all
licenses or other permits to use the proprietary information of
third parties incorporated in the Products or any process related to
the Products. Pursuant to this warranty, Contractor agrees to hold
and save HSC, its successors, assigns, customers and users harmless
from loss and/or liability of any nature of kind arising out of or
existing because of the infringement or alleged infringement of any
patent or the violation of any license of permit of proprietary
information for or on account of the manufacture, sale or use of any
Products furnished hereunder. HSC shall notify Contractor in writing
of any suit filed against it or its customers, on account of any
such infringement or alleged infringement, and at Contractor's
request shall give Contractor control of the
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defense of such suit, insofar as HSC has the authority to do so, and
information and assistance for the same, all at Contractor's
expense. HSC and the party against whom suit is brought, may, at
their own expense, be represented by their own counsel in any such
suit. Furthermore, in the event that HSC or its customers should be
enjoined in such suit or proceeding from using any part of the
Products delivered hereunder, Contractor, at HSC's option, shall
promptly either: (a) secure termination of the injunction or
liability; or (b) replace said Products with non-infringing Products
or modify them to become non-infringing, all at Contractor's
expense. Contractor is responsible for all product related due
diligence and all technical and production issues.
Similarly HSC warrants to Contractor that HSC or its customers
owns or has authorization to use all of the intellectual property in
the artwork and slogans that it provides to Contractor for
packaging.
f. The provisions of this Section 13 shall survive the termination
or expiration of this Agreement indefinitely.
14. RISK OF LOSS.
Unless otherwise specified herein or in any purchase order issued
hereunder, risk of loss shall remain with Contractor until the title of the
Units passes to HSC upon delivery to freight carriers. Passing does not restrict
HSC rights to non-conforming product per paragraph 8 herein.
15. SUBCONTRACTING.
It is understood between the parties that Contractor may subcontract
manufacture of the Units provided that said subcontractor is a U.S.
manufacturer. It is agreed that any such subcontracting arrangement between
Contractor and subcontractor shall in no way affect or relieve Contractor of its
obligations, representations and warranties to HSC pursuant to this Agreement;
nor shall any of HSC's rights pursuant to this Agreement be affected thereby.
16. WAIVERS.
No action taken pursuant to this Agreement, shall be deemed to constitute
a waiver by the party taking such action of the obligations to comply with any
representation, warranty, covenant or agreement contained herein. The waiver by
any party hereto of any condition or provision, or of a breach of any condition
or provision, of this Agreement shall not operate or be construed as a waiver of
any other condition or provision, or of any subsequent breach. The waiver by any
party of any of the conditions precedent to its obligations under this Agreement
shall not preclude it from seeking redress for breach of this Agreement other
than with respect to the condition so waived.
17. DEFAULT; REMEDIES; TERMINATION.
a. If any of the "events of default" listed in (i) through (vi) of
this subsection shall occur, the non-defaulting party may, at its
option, with not less than six (6) months notice to the party in
default and provided that an agreed upon corrective
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action has not been taken within 30 days notice of default,
terminate this Agreement and all prospective rights of the
defaulting party hereunder. The "events of default" are as follows:
i. Non-conforming Products;
ii. Inability to provide National Brand Equivalent
Specifications;
iii. Inability to meet shipping requirements;
iv. Insolvency or bankruptcy;
v. Predatory marketing practices; or
vi. Non-competitive pricing.
In the event of termination due to an event of default on the
part of Contractor, Contractor agrees not to compete at those baby
diaper accounts sold by HSC for a period of three years after
expiration of this Agreement.
b. The termination of this Agreement for any reason whatsoever shall
not relieve either party of any obligation due to the other party
on, or accrued as of, the date of such termination. Notwithstanding
the termination of this Agreement by any party hereto the
obligations of Contractor pursuant to Sections 12 (indemnification),
9 (warranty), and 13 (patents, trademarks and other conditions
relating to intellectual property rights; confidentiality) shall
survive.
c. In the event Contractor shall, at any time, act with respect to
the Products in any manner other than as expressly permitted hereby,
HSC shall be entitled to immediate injunctive relief to prevent the
continuation or recurrence of such use.
d. All remedies specified herein or otherwise available shall be
cumulative and in addition to any and every other remedy provided
hereunder or now or hereafter available under applicable law.
e. HSC shall have no liability to Contractor for any costs, expenses
or damages, including, but not limited to, consequential or
incidental damages, arising out of or in connection with any
exercise by HSC of any of its rights hereunder, including, but not
limited to, any actions of HSC pursuant to Sections 6, 8, or 9.
f. Contractor has the right to terminate for non-payment by HSC
provided that HSC does not cure within 30 days of notice of
delinquency.
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18. NOTICES.
Any notices and other communications provided for hereunder or in any of
the Ancillary Agreements shall be in writing (including telegraphic, telex or
cable communication) and shall become effective (i) when manually delivered on a
business day during normal business hours at the place of receipt to the party
to be given such notice, (ii) on the third business day following the day when
deposited, if mailed by certified or registered mail with return receipt
requested and postage thereon fully prepaid, (iii) on the business day following
the day when deposited, if sent by overnight courier, fully prepaid, or (iv) on
the business day such notice shall have been sent by telex, telegram, telecopy,
cable or similar electronic device, fully prepaid. The addresses for such notice
shall be:
To HSC: Hospital Specialty Company
000 Xxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxx 00000
Attn: Xxxx Xxxxxx
To Contractor: Rmed International, Inc.
0000 X. Xxxxxxxx Xxx
Xxx Xxxxxx, XX 00000
Attn: Xx Xxxxx
19. ASSIGNMENT.
a. This Agreement is assignable by HSC in the event that HSC or its parent
company is sold or the retail business of HSC's parent company is sold unless
the sale is to another baby diaper manufacturer. In the event that such sale is
to another baby diaper manufacturer, then the successor company shall have the
right to continue this Agreement or to terminate with one year's notice. During
this one year period, the successor company must honor all provisions of this
Agreement. Should the successor company terminate this Agreement pursuant to its
terms, then the Contractor is relieved of all non-compete provisions upon
termination and will pay Contractor a three percent (3%) commission on any baby
diaper business previously performed by Contractor to HSC at the time of
acquisition and transferred to the successor company upon termination.
b. In the event that Contractor is sold or sells its baby diaper business,
this Agreement and all obligations contained herein must be assigned to the
acquiring party.
20. CONTRACTOR OBLIGATIONS UPON TERMINATION.
Should Contractor or Contractor's successors and assigns terminate this
Agreement without cause, then Contractor or its successors or assigns, as the
case may be, shall pay HSC an amount equal to four times HSC's gross profit for
its private label baby diaper business during the preceding twelve (12) months.
At the sole discretion of HSC, Contractor or Contractor's
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successors or assigns, as the case may be, shall supply HSC's control label baby
diapers on a non-exclusive basis under the same pricing terms contained in this
Agreement for a period of at least twelve (12) months. In addition, HSC or HSC's
successors or assigns, as the case may be, agrees not to compete in the private
label baby diaper business for a period of two (2) years unless HSC is sold to
another baby diaper manufacturer.
21. HSC OBLIGATIONS UPON TERMINATION.
Should HSC or HSC's successors and assigns terminate this Agreement
without cause, then HSC or its successors or assigns, as the case may be, shall
provide six (6) months notice and shall assist Contractor to transition or
assign its private label baby diaper business to Contractor. Contractor shall
pay HSC or its successors or assigns a commission of two percent (2%) of net
sales of private label baby diaper business that HSC has transitioned or
assigned to Contractor for a period of two (2) years from the expiration of this
Agreement. If HSC or its successors or assigns wish to terminate only the
exclusivity provision of this Agreement, then Contractor agrees not to compete
against HSC for those private label accounts maintained by HSC.
22. HSC'S RIGHT OF FIRST REFUSAL.
Should Contractor decide to sell its baby diaper business then HSC shall
be given a first option to buy at a negotiated price of not more than the price
Contractor could sell to a bona-fide third party purchaser. Contractor has no
obligation to sell if it decides that such third party purchaser's bid is
inadequate.
23. CONFIDENTIALITY.
During or after the term of this Agreement and for a period of three (3)
years after its termination, neither party shall communicate, divulge, or use
for the benefit of another person or entity, any confidential or proprietary
information or knowledge disclosed by the other party, including, without
limitation: (i) present or prospective customer lists, (ii) management
information reports, (iii) details of contracts, (iv) acquisition plans, (v) new
personnel acquisition plans, (vi) trade secrets, (vii) financial information,
(viii) product designs, details or specifications, and (ix) any other
information or materials of any kind which the disclosing party may designate as
confidential or proprietary ("confidential information"). Each party shall only
divulge confidential information to its employees to the limited extent
necessary for such party to comply with its obligations under this Agreement.
Each party shall require all persons to whom such confidential information is
disclosed to agree, to the same extent as each party has agreed under this
Agreement, to maintain the confidentiality of such confidential information and
not disclose it to others. The receiving party shall be liable to the disclosing
party for all damages of any kind caused by any breach of this Section 23 or by
any unauthorized disclosure of the disclosing party's confidential information
by the receiving party or its employee(s), representative(s) or other person to
whom the receiving party has disclosed such information. In addition, both HSC
and Contractor must agree in writing to any public disclosure or press release
of financial or other business information to the public or to the financial
community.
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24. MISCELLANEOUS.
a. During the term of this Agreement and any renewal period and for a
period of two (2) years after the expiration or termination hereof, the parties
agree not to solicit or hire each other's employees. Each party acknowledges
that such soliciting or hiring employees under contract to the other party could
constitute tortuous interference with business relations. (E.g., All HSC
non-union employees are employed pursuant to an employment agreement containing
a non-compete provision.)
b. This Agreement shall inure to the benefit of and shall be binding upon
the parties hereto and their respective heirs, legal representatives, successors
and permitted assigns.
c. The Section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
d. This Agreement may be executed in any number of counterparts, each of
which, when executed, shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
e. In this Agreement, unless the context otherwise requires, words in the
singular or in the plural shall each include the singular and the plural, and
words of the masculine gender shall include the feminine and the neuter, and,
when the sense so indicates, words of the neuter gender may refer to any gender.
f. This Agreement shall be governed by the laws of the State of Ohio. The
rights and obligations of the parties under this Agreement shall not be governed
by the provisions of the 1980 U.N. Convention on Contracts for the International
Sales of Goods; rather, these rights and obligations shall be governed by the
laws of the State of Ohio, United States of America, including the provisions of
the Uniform Commercial Code as enacted in the State of Ohio.
g. Any term or provision of this Agreement which is invalid or
unenforceable shall be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement.
h. This Agreement embodies the entire agreement between the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements
and understandings, oral or written, with respect thereof. This Agreement may
not be changed orally, but may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by an instrument in writing
signed by each of the parties, or, in the case of a waiver, signed by the party
against whom enforcement of such waiver is being sought. In the event that any
terms and conditions of the Specifications or any other invoice, acknowledgment
or other purchase document conflict with the terms and conditions contained
herein, the terms and conditions of this Agreement shall govern.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
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HOSPITAL SPECIALTY COMPANY, a
Division of The Tranzonic Companies
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxx
--------------------- ------------------------
Witness By: Xxxxxxx X. Xxxxxx
--------------------
Its: Vice-President
--------------------
RMED INTERNATIONAL, INC.
/s/ Xxxxxxx Xxxxxxx /s/ Xxxx X. Xxxxxx
------------------- ------------------------
Witness By: Xxxx X. Xxxxxx
--------------------
Its: Vice-President
--------------------
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HOSPITAL SPECIALTY COMPANY, a
Division of The Tranzonic Companies
/s/ Xxxxxxx X. Xxxxxx
--------------------- ------------------------------------------
Witness By: Xxxxxxx X. Xxxxxx
--------------------------------------
Its: Vice-President
--------------------------------------
RMED INTERNATIONAL, INC.
/s/ Xxxxxx Xxxxx
------------------- ------------------------------------------
Witness By: Xxxxxx Xxxxx
--------------------------------------
Its: Chairman of the Board; V.P. Sales CEO
--------------------------------------
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