EXHIBIT 10.21
MANUFACTURING, DISTRIBUTION AND ASSIGNMENT AGREEMENT
This Agreement is made effective the 19 day of June, 1998 by and
between National Boston Medical, Inc., hereafter call "NBM," a Delaware
corporation, with its principal place of business at 00 Xxxxxxx Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxxxx, 00000, represented by Xxxxxx X. Xxxxx, its President,
duly authorized by corporate resolution dated June 18, 1998 attached hereto and
DermaGuard, Inc., hereafter called "DermaGuard", a Louisiana corporation with
its principal place of business at 0000 Xx. Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxx 00000, represented by Xxxxxx X. Xxxx, its President, duly
authorized by corporate resolution dated June 18, 1998 attached hereto.
1. Appointment and Acceptance
Subject to the terms and conditions contained herein, NBM appoints
DermaGuard, and DermaGuard hereby accepts said appointment, as a manufacturer,
distributor and seller of products, now or in the future, owned, secured,
distributed and/or marketed by or on behalf of NBM, hereinafter sometimes
referred to collectively as "Products" including, though not limited to,
ViruShield. Pursuant hereto, DermaGuard shall enjoy a right of first refusal on
any new Product offerings by NBM that are within the scope of "the Products" as
hereinabove defined and under the terms and conditions otherwise contained
herein.
2. Distribution Rights
DermaGuard shall have the exclusive right to manufacture, distribute
and sell the Products to or for the following customers: (1) any and all local,
state and federal governmental agencies and/or institutions, including
municipalities, state governments and the United States of America, its/their
political subdivisions, departments and/or agencies, and (2) all quasi-public
and/or controlled entities, including but not limited to hospitals, schools,
military facilities/installations, and any and all other public oriented and/or
publicly supported officers and/or agencies (all of the foregoing customers
being hereinafter collectively referred to as the "Exclusive Customers").
Nothing herein shall limit DermaGuard's right to accept any orders for Products
and handle any business related to the Products including sale of the Products
to customers in addition to the Exclusive Customers; it being further agreed
DermaGuard shall have the non-exclusive right to manufacture, distribute and
sell the Products to or for any and all other customers in addition to the
Exclusive Customers. Nothing herein shall prevent NBM form accepting any orders
for the Products or handling business related to the Products directly and/or
through other distributors appointed by the company for the customers other than
Exclusive Customers.
3. NBM's Representations, Warranties and Covenants NBM represents,
warrants and covenants as follows:
A. NBM shall, at its sole cost and expense, supply DermaGuard with
reasonable quantities of catalogs, brochures and samples of the Products as
requested by DermaGuard from time to time; except that, NBM shall be allowed to
charge to DermaGuard the actual cost to NBM of printing DermaGuard's catalogs,
brochures and product samples, including those costs incidental to said cost.
B. NBM representatives and direct factory sales personnel shall, when
requested by DermaGuard, (i) train DermaGuard's sales staff in Product line
features, and (ii) accompany DermaGuard sales representatives on sales calls on
DermaGuard customers;
C. NBM shall refer all inquiries and purchase order form the
Exclusive Customers to DermaGuard and shall refer to DermaGuard all such other
inquiries and purchase orders from any other customers within the State of
Louisiana; except that, nothing herein shall be inferred as limiting the right
of NBM to market, sell, distribute and/or contract directly with national
end-user accounts.
D. NBM shall secure any and all FDA registrations for Products and
all such other licensing and permits necessary for the manufacture, distribution
and sale of the Products by DermaGuard.
E. NBM shall conduct periodic on-site inspections (not less than 1
(one) time per year) of DermaGuard's manufacturing and distribution facilities
and provide written recommendations to enhance quality control of the Products
manufactured, distributed or sold by DermaGuard.
F. NBM shall at its sole cost and expense provide to DermaGuard, all
Product labels, Product brochures, artwork and design for advertising and
marketing on the Products by DermaGuard, except as is otherwise set forth
herein.
G. DermaGuard hereby agrees to use NBM as its exclusive sales agent
and representative for the purpose of securing the manufacturing of DermaGuard's
products.
4. DermaGuard Representations and Covenants
A. DermaGuard shall withing three (3) days of execution of this
Agreement make an initial purchase of beginning inventory of the Product
ViruShield at a cost of not less than $75,000.00. NBM hereby represents and
warrants that the unit cost of any Products sold to DermaGuard shall not exceed
the lowest unit cost of identical Products sold or distributed to any other
manufacturer, distributor or retailer of the respective Products.
B. DermaGuard shall actively promote the sale of the Products through
direct selling activities.
C. DermaGuard shall permit NBM to review its inventory at a regular
intervals (but no more than 4 (four) times per year) on thirty (30) days prior
written notice, provided such review shall not adversely affect any business
operations of DermaGuard.
D. DermaGuard shall upon request of NBM, provide NBM with quarterly
updates of DermaGuard's Product sales reports for the previous fiscal year,
provided that NBM shall not disclose said sales reports or any portion thereof
to any third parties and shall maintain the confidentiality of such reports.
5. Promotional Campaign
A. DermaGuard shall conduct such promotional campaigns of the
Products as it determines in its sole and absolute direction, and DermaGuard
shall have the right to participate in any Product promotional campaigns or
programs conducted by or on behalf of NBM. NBM shall have the right to
contribute a portion of the costs of any promotional campaigns or programs
conducted by DermaGuard provided however such contribution shall not entitle NBM
to direct or control the content or quality of said promotional campaign or
program.
B. NBM shall continually promote the Products through trade show
participation, and such other marketing efforts and promotional methods designed
to enhance sale of the Products
6. Warranty
NBM's responsibility with respect to any claimed defect in the
Products is limited to replacement of the claimed defective Products and NBM
shall not be liable to DermaGuard for any indirect, special or consequential
damages of any kind whatsoever with respect to any such defects.
Without in any way limiting the foregoing, in no case shall the liability of NBM
under any warranty, expressed or implied, of or for any reason arising out of a
Product sold to DermaGuard, exceed the value of the Product sold. NBM makes no
warranties regarding Products manufactured by it or by others, including without
limitation, warranties as to merchantability, or fitness for a particular
purpose, either expressed or implied, except as provided herein.
7. Returns
A. Products may be returned to NBM for Product defects, shipment
errors or as provided in Section 8 below, and all such returns must have a
Return Material Authorization number ("RMA") obtained from the NBM customer
service department prominently displayed on the outside of all packing materials
containing returned products. The RMA shall also be included on any
correspondence and documents accompanying any such return shipments.
B. NBM shall, unless otherwise requested by DermaGuard, credit
DermaGuard for the full cost to DermaGuard of all Products returned. Upon
request of DermaGuard, NBM shall, upon receipt of the Products returned, deliver
to DermaGuard a cash refund equal to the full cost to DermaGuard of the Products
returned.
8. Stock Adjustment
DermaGuard shall have the option of adjusting its inventory once per
calendar year by returning to NBM an amount of Products up to a maximum of five
percent (5%) of the prior calendar year's sales. Any such inventory adjustment
must be conducted during the second quarter of the calendar year. All Product
returns made pursuant to this section shall be returned in original stock
packages and consist solely of Products received by DermaGuard within twelve
(12) months of the date of return.
9. Pricing/Ordering Terms
A. NBM shall confirm receipt of all Product order from DermaGuard
within three (3) business days of NBM's receipt. No Product order shall be
binding on NBM until received and confirmed by NBM.
B. All Product orders shall be subject to a minimum cost of $300.00.
C. Products shall be shipped F.O.B. Factory, Tamarac, Massachusetts
collect. Products shall be shipped by the best and most economical means
available. All air shipments must be requested in writing and shall be at the
sole cost and expense of DermaGuard.
D. Payment terms are ne 30-days; except that, payment in full shall
accompany DermaGuard's initial order and any orders requiring delivery to a
foreign port (outside the United States of America and/or its controlled
territories); and, excepting further, any orders over One Hundred Thousand
Dollars ($100,000.00) placed by DermaGuard shall require fifty percent (50%) of
the purchase price to accompany said orders.
E. On each Product order made by DermaGuard where the cost of such
Products is $5,000.00 or more, DermaGuard shall receive a credit equal to one
percent (1%) of the total amount of such order, which credit may be used to
purchase additional Products from NBM.
10. Duration and Termination
This Agreement shall be for a primary term of three (3) years,
commencing on the date of execution hereof. This agreement shall be
automatically renewable for successive three (3) year periods, subject to
mutually agreed upon annual performance requirements. Should the parties hereto
fail to agree on annual performance requirements for any extended term of this
contract, the same shall be established by binding arbitration within the State
of Louisiana or in such other manner as is mutually agreeable to the parties.
DermaGuard shall place orders for ViruShield totaling Two Hundred
Fifty Thousand Dollars ($250,000.00) in the first year of this agreement
(including the initial order); One Million Dollars ($1,000,000.00) in the second
year; and, Two Million Dollars ($2,000,000.00) in the third year. Orders for
ViruShield under DermaGuard's private label shall constitute orders for
ViruShield under this agreement.
This agreement shall become effective on the date first written above
and shall continue in full force and effect unless terminated by either party
for cause upon ninety (90) days prior written notice, any such termination
notices shall be pursuant to material breaches of one or more obligations as set
forth herein by either party. DermaGuard's failure to comply with its
performance requirements under this section shall constitute a material breach
of this contract.
11. Review
Notwithstanding anything herein written to the contrary, the parties
hereto agree, once every six (6) months, to meet to review the reasonableness,
adequacy and sufficiency of the performance quotas as specified herein/or
subsequent hereto, and to amend by mutual agreement said requirements as needed.
However, the failure of said parties to so meet and/or agree to proposed
amendments to this agreement, shall not in any way affect the validity of this
agreement.
12. Notices
All notices permitted or required herein shall be made in writing by
certified mail, return receipt requested as follows:
If to DermaGuard: DermaGuard, Inc.
000 Xx. Xxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Xx. Xxxxxxx Xxxxxxxxxxx
If to NBM: National Boston Medical, Inc.
00 Xxxxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx
P.O. Box 1161
Xxxxxxx, XX 00000
Attn: Xx. Xxxxxx Xxxxx
Either party may change its address for notices by ten (10) days prior
written notice to the other party.
13. Assignment of Patent Rights
A. NBM does hereby assign, transfer, convey and deliver to Dermaguard
the exclusive right and the ability to use all rights, statements or claims made
by, for or on behalf of VIRUSHIELD as evidenced by and pursuant to NBM's patent
or patent-pending (Application No.______________), including, though not limited
to, the trademarks and service marks associated therewith. Further, this
assignment shall automatically extend and apply to any further patents,
patent-pending applications or related rights obtained by NBM relative to any of
its Products including, though not limited to, VIRUSHIELD.
B. NBM hereby represents, warrants and covenants that it has executed
no other or prior assignment or transfer of said Patent or Patent-Pending Rights
or any portion thereof for any rights associated therewith.
14. Private Labeling
DermaGuard shall have the right to manufacture, distribute, market
and sell any and all of the Products under a DermaGuard private label, including
the right to identify and name or change the name, including the trade name of
any and all such Products as DermaGuard in its sole discretion elects. NBM
agrees not to execute any further agreements to private label its products,
including though not limited to, VIRUSHIELD, so long as this agreement remains
in full force and effect; except that, nothing herein shall prevent NBM from
establishing private label agreements relative to any or all of its Products,
including VIRUSHIELD, for:
(1) the private limited benefit of its national accounts
and/or venders, including direct marketing companies, which
use or sell said Product(s) within their respective
establishments or to their respective direct marketing
audiences; and,
(2) distributors which access to limited or specified
market groups who solely or usually, within their normal
course of business, market to said groups only Products
bearing their (distributor's) private label;
it being the express intent of the parties hereto, that no entity, other than
DermaGuard, shall be granted the right to compete generally with NBM utilizing
NBM Private labeled Products or derivatives thereof.
15. Board of Directors Appointment
The President of NBM or his/her designee may, at the pleasure of the
Board of Directors of DermaGuard, be allowed to serve on said Board of
Directors.
16. Entire Agreement
This Agreement sets forth the entire agreement and understanding
between the parties relating to the subject matter contained herein and
supersedes all prior agreements, oral and written, heretofore made between the
parties; and this Agreement shall be construed in accordance with the laws of
the State of Louisiana. No modification hereof shall be valid unless in writing
and duly signed by an officer of NBM officer of NBM and DermaGuard. The captions
herein are for convenience only and shall not be construed as part of the
agreement between the parties hereto.
IN WITNESS WHEREOF, the parties have cause this Agreement to be
executed effective the day and year first written above.
WITNESSES: NATIONAL BOSTON MEDICAL, INC.
/s/Xxxxxxx X. Laynd
-----------------------
/s/ Xxxxxx X. Xxxx By: /s/Xxxxxx X. Xxxxx
----------------------- -------------------------
Xxxxxx X. Xxxxx, President
DERMAGUARD, INC.
/s/Xxxxxxxx Xxxxx
-----------------------
/s/ Xxxx Xxxxxx By: /s/Xxxxxx X. Xxxx
----------------------- -------------------------
Xxxxxx X. Xxxx, President
A C K N O W L E D G E M E N T
STATE OF MASSACHUSETTS
COUNTY OF BRISTOL
BEFORE ME, Shabha Kunar, a Notary in and for the said state and parish,
this day personally appeared: XXXXXX X. XXXXX appearing herein in his capacity
as President of National Boston Medical, Inc. to me personally known to be the
identical person whose name is subscribed to the foregoing Manufacturing,
Distribution and Assignment Agreement as representing National Boston Medical,
Inc., and acknowledged to me in the presence of the undersigned witnesses that
he executed the same on the date hereof on behalf of said corporation, and that
it was executed for the uses, purposes and considerations therein expressed by
authority of the Board of Directors of said corporation, as the free act and
deed of said corporation.
IN WITNESS WHEREOF, I have hereunto signed this acknowledgment with the
said appearer and the two competent witnesses at Taunton , Massachusetts, on the
23rd day of June, 1998, after due reading of the whole.
WITNESSES:
/s/Xxxxxxx X. Laynd
-----------------------
/s/ Xxxxxx X. Xxxx By: /s/Xxxxxx X. Xxxxx
----------------------- -------------------------
/s/ Shaliha Kumar
----------------------
NOTARY PUBLIC
MY COMMISSION EXPIRES AUGUST 9, 2002
A C K N O W L E D G E M E N T
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, A.T. Ferrouillet, a Notary in and for the said state and parish,
this day personally appeared: XXXXXX X. XXXX appearing herein in his capacity as
President of DermaGuard, Inc. to me personally known to be the identical person
whose name is subscribed to the foregoing Manufacturing, Distribution and
Assignment Agreement as representing DermaGuard, Inc., and acknowledged to me in
the presence of the undersigned witnesses that he executed the same on the date
hereof on behalf of said corporation, and that it was executed for the uses,
purposes and considerations therein expressed by authority of the Board of
Directors of said corporation, as the free act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto signed this acknowledgment with the
said appearer and the two competent witnesses at New Orleans, Louisiana, on the
18th day of June, 1998, after due reading of the whole.
WITNESSES:
/s/Xxxxxxxx Xxxxx
-----------------------
/s/ Xxxx Xxxxxx By: /s/Xxxxxx X. Xxxx
----------------------- -------------------------
/s/Alvany Ferroviller, Jr.
------------------------------
NOTARY PUBLIC
