EXHIBIT 10.4
SUPPLY AND DISTRIBUTION AGREEMENT
---------------------------------
THIS AGREEMENT, is made this 15th day of September, 1995, by and between
MEDICAL POLYMERS, INC., a corporation duly organized and existing under the laws
of the State of Delaware, having its principal place of business at 0000 Xxxxxx
Xxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 (hereafter referred to as "MPI") and
Xxxxxxxxxx Laboratories, Inc., a corporation duly organized and existing under
the laws of the State of Texas having its principal place of business at 0000
Xxxxxx Xxxx Xxxx, Xxxxxx, Xxxxx 00000 (hereinafter referred to as "Xxxxxxxxxx").
BACKGROUND:
MPI is a biomedical company engaged in developing unique polymer-based
products for use by the OTC markets which have developed products known as
Miracle Grip(TM), QUITCH(R), Alpha Hy(TM) stick, QUITZIT(TM) and Relaxor(TM)
which are more particularly described on Exhibit A attached hereto and is
developing other OTC products. MPI desires to sell such products to Xxxxxxxxxx
and to appoint Xxxxxxxxxx as a distributor of such product and to xxxxx
Xxxxxxxxxx a right to become a distributor of other products which may from time
to time be developed by MPI, all in accordance with the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises and undertakings
hereinafter set forth, MPI and Xxxxxxxxxx hereby agree as follows:
1. Definitions. For purposes hereof, the following terms shall have the
------------
following meanings:
1.1. The term "MPI" shall mean Medical Polymers, Inc., and its successors
and assigns.
1.2. The term "Xxxxxxxxxx" shall mean Xxxxxxxxxx Laboratories, Inc. and
its successors and assigns.
1.3. The term "Other Products" shall mean any product (other than the
Products listed in Exhibit A) developed from time to time during the term of
this Agreement by MPI for use in the OTC market.
1
1.4. The term "Product" shall mean Miracle Grip(TM), QUITCH!(R),
QUITCH(R)D, QUITZIT(TM), Alpha Hy(TM) stick, or Relaxor(TM), descriptions of
which is set forth on Exhibit A attached hereto as used by consumers with
dentures.
1.5 The term "Territory" shall mean the United States of America and
Canada, South America, Mainland China, and their respective territories.
2. Appointment.
------------
2.1. MPI hereby appoints Xxxxxxxxxx as a distributor of the Product within
the Territory.
3. Duties of MPI; Ordering Product.
--------------------------------
3.1. During the Term, MPI shall manufacture or cause to be manufactured
the Products in accordance with all applicable laws, rules and regulations and
in accordance with good manufacturing practices and those practices utilized by
MPI in the production of any of its other products. Such completed Products
shall be sold to Xxxxxxxxxx in accordance with the terms of this Agreement. MPI
shall use its best efforts to obtain, at its expense, all necessary approvals
for the production of Products, including without limitation, any required
approval of the FDA.
3.2. Throughout the term of this Agreement, Xxxxxxxxxx shall deliver
purchase orders for any Product and Products it shall desire to distribute
hereunder and MPI shall manufacture or cause to be manufactured the Product and
Other Products to fill such purchase orders. The parties acknowledge and agree
that no minimum shall be required for the first Contract Year. Thereafter, the
minimum amount of units of any of the Product purchased by Xxxxxxxxxx for any
calendar subsequent year during the term of this Agreement shall not be less
than the amount specified on Exhibit B attached hereto.
4. Duties of Xxxxxxxxxx.
---------------------
4.1. Throughout the term of this Agreement, Xxxxxxxxxx shall use its best
efforts to market aggressively the Products through the Emprise company, the
Home Shopping Network and Xxxxxxxxxx'x catalog program. In connection
therewith, Xxxxxxxxxx shall employ and maintain sufficient staff and sales
personnel to meet its obligation hereunder.
4.2. Xxxxxxxxxx shall make such filings and take such actions as may be
required to qualify to transact business under applicable state and local laws,
and any laws required by an countries outside the Territory, in order to perform
its services hereunder.
2
4.3. At Xxxxxxxxxx'x request, private labeling of the Products shall occur
as quickly as possible, as mutually agreed upon by the Parties. Should such
private labeling be required, Xxxxxxxxxx shall be responsible for preparing the
labeling for the Product and shall submit such labeling to MPI for its approval.
Xxxxxxxxxx shall retain the title to and right to use all such labeling.
Regarding non-exclusive sales to Home Shopping Network, Xxxxxxxxxx will
represent (package) MPI's products in conjunction with other Xxxxxxxxxx
products. The sale of MPI's products through the Home Shopping Network without
Xxxxxxxxxx products will be done only with the expressed assistance of MPI
marketing representatives. If Xxxxxxxxxx is unsuccessful at achieving a test
market for MPI's products through the Home Shopping Network, product sales of
MPI products would revert back to MPI.
5. Price and Terms of Payment.
---------------------------
5.1. Xxxxxxxxxx agrees to pay MPI a price the price set for in Exhibit C
for the first 1,000,000 units ordered per each Product. MPI agrees that such
prices paid by Xxxxxxxxxx will be no greater than that paid by other parties
distributing the Product in the Territory. Both MPI and Xxxxxxxxxx acknowledge
and agree that a mechanism must be established to provide Xxxxxxxxxx with ample
incentive to sell greater volumes of Products and that such mechanism will
include an increase in the applicable gross margin generated by Xxxxxxxxxx by
selling the products. Both parties agree that discussions to devise such a
mechanism will be held prior to such time as the order, the fulfillment of which
will complete the first million ounces sold to Xxxxxxxxxx, is placed with MPI.
5.2. Xxxxxxxxxx shall pay MPI for all Products purchased by Xxxxxxxxxx
hereunder on a net thirty (30) day basis, with Xxxxxxxxxx receiving a one
percent (1%) credit for any payments mailed within twenty-two (22) days.
5.3. If the terms and conditions which are set forth in any purchase order
or one blanket purchase order provided by Xxxxxxxxxx hereunder are inconsistent
with the provisions of this Agreement, then such terms and conditions shall not
apply to any purchases and sales of the Products hereunder unless agreed to in
writing by MPI.
6. Delivery and Acceptance. The Products shall be delivered to
------------------------
Xxxxxxxxxx F.O.B. Grand Prairie, Texas. Title to and ownership of the Products
shall be transferred to Xxxxxxxxxx upon shipment of such Products from MPI or
MPI's agent and Xxxxxxxxxx shall assume the risk of loss and damage to such
Product and Other Products thereafter. Xxxxxxxxxx shall have the
3
right to reject any or all of the Products upon arrival and for a period of
five (5) days thereafter for any of the following reasons: (i) any printing on
the labels which contains the Products is not legible and smudge-free; (ii) the
package containing the Products is damaged or is not full or no date code
appears on such container. In the event of such rejection, Xxxxxxxxxx shall
notify MPI in writing within five (5) days of Xxxxxxxxxx'x receipt thereof.
Upon such notice, MPI shall replace all defective or unaccepted Products in
accordance with the terms of Section 13, below.
7. Licenses and Permits. At its sole expense, MPI shall obtain, if
---------------------
necessary and applicable, all licenses, approvals, registrations and
qualifications required under all applicable laws, rules, regulations and
ordinances from all federal, state, local or foreign governmental agencies
relating to the manufacture or sale of the Products within the Territory which
may be subject to this Agreement. In connection therewith, Xxxxxxxxxx shall
provide, at no cost to Xxxxxxxxxx, such assistance as may be reasonable
requested by MPI to assist in such process.
8. Market Information. Xxxxxxxxxx shall keep MPI informed of any
-------------------
information which it obtains concerning the Products, particularly with regard
to market conditions, and new market opportunities. Xxxxxxxxxx will develop
with MPI a market introduction plan for each of the Products and a market "roll
out" plan for the introduction of the Products. This plan will be jointly
renewed or reviewed at three (3) month intervals during the first year of this
Agreement and at four (4) month intervals in any renewal years of this
Agreement.
9. Inventory. MPI shall maintain at all times during the term of this
----------
Agreement and inventory of the Products in such quantities as is necessary in
order to fill the monthly purchase order commitments calculated with reference
to the minimum quantities specified on Exhibit B attached hereto. Xxxxxxxxxx
will provide, on a quarterly basis dated from the initial order, written
forecasts to MPI as to Xxxxxxxxxx'x projected demand for the Products.
10. Warranty. Xxxxxxxxxx warrants to MPI that the Products distributed
---------
by Xxxxxxxxxx hereunder shall be free from defects in material and workmanship
and shall be produced using good manufacturing practices and in accordance with
all applicable laws, rules and regulations and such quality standards as is
appropriate in the industry. In the event that any recall of any of the Products
is instituted either at the request of MPI or as mandated by any governmental
agency or authority, MPI shall bear all costs regarding such recall. In the
event that any Product is found to be defective or is not otherwise accepted by
Xxxxxxxxxx hereunder in accordance with the provisions of Section 6, above, such
defective or unaccepted Product shall be replaced within
4
ten (10) business days by MPI at no additional cost to Xxxxxxxxxx. In the event
that Xxxxxxxxxx shall change its labeling procedures without the consent of MPI
hereunder, or takes any other action which results directly in the recall of any
Products, Xxxxxxxxxx shall be responsible for all costs relating to such recall.
11. Indemnification.
----------------
11.1. MPI shall indemnify, defend and hold harmless Xxxxxxxxxx and all of
Xxxxxxxxxx'x officers, directors, shareholders, employees and agents from and
against any and all losses, damages, costs and expenses, including attorney's
fees and expenses, which Xxxxxxxxxx may, at any time, sustain or incur which
relates to or arises out of in any manner the Products (other than losses,
damages, costs and expenses) which arise as a result of the negligence of
Xxxxxxxxxx or its employees or conduct by Xxxxxxxxxx or its employees which are
in breach of this Agreement including, but not limited to, any claim or action
for patent or trademark infringement in connection with any of the Products.
11.2. Xxxxxxxxxx shall indemnify, defend and hold harmless MPI for any
fraud or misrepresentation of Xxxxxxxxxx, its representatives or agents in
connection with the sale or marketing of Products hereunder.
11.3. If any action with respect to which indemnity may be sought
hereunder by either party shall be brought against such party, the other party
shall be entitled to participate in the defense thereof at its own expense or to
settle any such action only with the consent of the party against whom such
action is brought. In such event, each party shall cooperates with the other in
providing full and complete access to all relevant and non-privileged records of
the other.
12. Confidentiality.
----------------
12.1. The technical and other information furnished or disclosed by either
party to the other hereunder is to be used by the parties solely for the
activities related to this Agreement.
12.2. During the term of this Agreement, and for a period of five (5)
years thereafter, each party shall take all reasonable care to insure that
information, whether written, printed, oral or other form, received by either
party from the other under this Agreement shall not be disclosed or used for
any purposes other than as intended by this Agreement by the parties or their
agents or anyone acting on their behalf. The restrictions set forth in the
preceding sentence apply with equal force to disclosure of information by
directors, officers or employees of either party in their individual capacities.
The restrictions set forth in this Paragraph 12.2 shall not apply to any
5
information which comes into the public domain without disclosure by a party in
violation of the terms of this Paragraph 12.2 or to any information which either
party is required by law to disclose.
13. Insurance. During the term of this Agreement, MPI shall secure and
----------
maintain a minimum of Two Million Dollars ($2,000,000) per occurrence of
products liability insurance and agrees to name Xxxxxxxxxx as an additional
insured on such policy. In addition, such policy shall contain a clause which
prohibits the product liability insurance carrier from canceling or modifying
the insurance coverage without a minimum of thirty (30) days' prior written
notice to Xxxxxxxxxx. MPI shall provide Xxxxxxxxxx with evidence of such
insurance coverage within fifteen (15) days of the date of this Agreement.
14. Force Majeure. Neither party shall be responsible for any failure,
--------------
default or delay under this Agreement is such failure, default or delay is the
result of any fire, strike, labor dispute, war, extraordinary governmental
action, accident, act of God or any other cause of like character unforeseeable
by, or beyond the control of, the party whose performance is delayed as a result
thereof. In the event that either party's performance hereunder is suspended
for any of the foregoing reasons for a period in excess of thirty (30) days, the
other party may terminate this Agreement immediately upon written notice to the
other.
15. Term and Termination.
---------------------
15.1. This Agreement shall commence on the date hereof and shall remain in
effect from the date hereof until December 31, 1997, unless sooner terminated as
provided for elsewhere herein; provided, however, that at the expiration of the
initial and each renewal term, this Agreement shall be renewed for an additional
period of three (3) years unless either party shall deliver to the other party
notice of its intention not to renew at least one hundred eighty (180) days
prior to the expiration of the then-current term.
15.2. Notwithstanding the terms of Section 15.1, in addition to any other
rights either party may have to terminate this Agreement under other sections of
this Agreement, this Agreement may be terminated as follows: (a) by Xxxxxxxxxx
at any time prior to December 31, 1997 upon thirty (30) days' written notice if
Xxxxxxxxxx, in its sole discretion, determine that its targeted sales volumes of
the Products are not attainable; (b) by either party if the other party breaches
any of its covenants, obligations or warranties hereunder and fails to cure any
such breach within thirty (30) days after its receipt of notice of such breach
in writing, which notice
6
shall specify the term or terms of this Agreement which have been breached; or
(c) by either party, to the extent permitted by applicable law, if the other
party shall (i) become insolvent or take or fail to take any action which
constitutes its admission or inability to pay its debts as they mature; (ii)
make an assignment for the benefit of creditors, file a petition in bankruptcy,
petition or apply to any tribunal for the appointment of a custodian, receiver
or any trustee for all or a substantial part of its assets; (iii) commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution or liquidation law or statute of any jurisdiction, whether now
or hereafter in effect; (iv) have filed against it any such petition or
application for which an order for relief is entered or which remains
undismissed for a period of thirty (30) days or more; or (v) indicate its
consent to, approval of or acquiescence in any such petition, application or
proceeding or order of relief or the appointment of a custodian receiver or
trustee for a substantial part of tits properties, or shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of thirty (30) days or more.
15.3. The termination of this Agreement for any reason shall not affect
any obligation of the parties which has already accrued as of the date of
termination or those obligations which, from the context hereof, are intended to
survive the termination of this Agreement.
16. Patents and Trademarks. Except as otherwise provided in Paragraph 2.2
-----------------------
herein, MPI shall bear all costs for the filing fees of patents, trademarks,
licenses, grants and other requirements for the manufacture, sale or marketing
of the Products and the protection of the patents, trademarks, registrations and
other proprietary properties relating to the Products. MPI represents, to its
best knowledge and belief, that none of the Products will infringe any
proprietary rights of others, that no third party is infringing any intellectual
property rights of MPI and that MPI owns the intellectual property rights used
in the Products free and clear of any liens, claims, encumbrances or
restrictions.
17. Assignment. This Agreement shall not be assignable by either party
-----------
without the prior written consent of the other party.
18. Entire Agreement. This Agreement constitutes the entire agreement
-----------------
between the parties and there are no other understandings, representations,
conditions or warranties of any kind, written or oral, expressed or implied, not
set forth herein. No alteration or modification of this Agreement, or any
waiver of any rights of either party hereunder shall be binding unless signed in
writing by authorized representatives of both parties.
7
19. Enforceability. By its execution hereof, each party represents and
---------------
warrants to the other that this Agreement has been duly and validly authorized
by all necessary corporate action on its part, that this Agreement, when
executed and delivered, will be duly and validly executed and delivered and
binding on such party, enforceable in accordance with its terms and that its
execution of this Agreement or its performance of its terms will not conflict
with any other instrument or agreement to which it is a party or is subject or
require the consent of any third party.
20. Governing Law. This Agreement shall be governed by and construed in
--------------
accordance with the laws of the State of Texas without regard to principles of
conflicts of law thereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day, month and year set forth above.
MEDICAL POLYMERS, INC.
By:___________________________________________
Xxx Xxxxx, President & C.E.O.
XXXXXXXXXX LABORATORIES, INC.
By:___________________________________________
Xx. Xxxxxxx X. Xxxxxx, President & C.E.O.
8
EXHIBIT A
DESCRIPTION OF PRODUCTS
-----------------------
EXHIBIT B
MINIMUM GUARANTIES OF PRODUCT
-----------------------------
First calendar year 1,000,000 ounces
