Exhibit 10.12
SHARED REVENUE CONTRACT
This Agreement is made this __________, 2005 by and between ______________
company with its usual place of business at ____________________ ("Distributor")
and Ivivi Technologies, Inc., a New Jersey Corporation with its usual place of
business at 000-X Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("Ivivi").
RECITALS
WHEREAS, Ivivi is in the business of promoting, renting and selling various
medical devices, including but not limited to the SofPulse 912, 912-M10, Coil
Applicators and the Foot Applicator (collectively, the "Equipment"), which are
utilized by health care facilities throughout the United States; and
WHEREAS, Distributor is in the business of promoting, renting and selling
various medical devices to health care facilities within a specific geographic
territory; and
WHEREAS, Distributor and Ivivi have agreed to enter into an arrangement
whereby Ivivi will consign certain quantities of the Equipment to Distributor
and Distributor will rent/sell said Equipment to customers ("Customers") of
Distributor and/or Ivivi within a designated geographic territory, and within
specified markets, upon the terms and conditions set herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises set
forth herein, Ivivi and Distributor hereby agree as follows:
1. TERM
The initial term of this Agreement shall start ______, 2005 and shall be
for a period of two (2) years thereafter. This agreement shall
automatically renew for an additional term of one (1) year unless either
party provides to the other written notice of its intent to terminate at
least ninety (90) days prior to the expiration date.
2. EXCLUSIVE GRANT; TERRITORY
(a) Subject to the terms and conditions set forth herein, Ivivi hereby
grants to Distributor, throughout the term hereof, the exclusive right to
rent/sell the Equipment to Customers within each of the specifically
designated markets (as defined herein) located in the following geographic
area: SEE EXHIBIT B.
FOR PURPOSES OF THIS AGREEMENT EACH OF THE FOLLOWING SEGMENTS OF THE HEALTH
CARE PROVIDER SYSTEM THAT IS CHECKED BELOW SHALL BE CONSIDERED A DISTINCT
MARKET:
o [X] LTACH/Sub-Acute
o [X] Acute Care
o [X] Rehab Centers/Wound Centers
o [X] Nursing Homes
o [X] Skilled Nursing Facilities
o _________________________[Other: to be filled in as appropriate]
Each of the foregoing is separately referred to herein as a "Market"
and collectively as the "Markets."
(b) Throughout the term of this Agreement, Ivivi agrees not to sell units
of the Equipment to any commercial entity that Ivivi knows (or reasonably
should know) is in the business of renting medical equipment similar to the
Equipment to any of the Markets in the Territory. The parties acknowledge
and agree that the list of Equipment covered by this agreement may be
expanded in the future to include other electro-therapeutic products
through the mutual written consent of Distributor and Ivivi. In entering
into this Agreement, Distributor acknowledges its understanding that Ivivi
and/or its affiliates has previously made sales of the Equipment to other
companies and entities throughout the United States and Ivivi has no
control over when and where that Equipment is rented or sold in the United
States. Such rentals or sales by third parties shall in no way constitute a
breach of the grant of exclusivity contained herein.
(c) Ivivi shall review Distributor's results in the Territory and in each
Market on a quarterly basis throughout the term of this Agreement and may
determine after such review, to terminate Distributor's exclusive rights in
any geographic area and/or Market taken individually or as a whole.
3. MINIMUM RENTAL REVENUE GOALS
As a material part of this Agreement, the parties agree that throughout the
term hereof Distributor shall be required to meet or exceed certain rental
revenue objectives. These rental revenue objectives are set forth on
"Exhibit A" attached hereto. In the event that at the end of any specified
time period, Distributor fails to meet the rental revenue objectives for
the period in question, upon fifteen (15) days prior written notice Ivivi
may, at its option, terminate this entire Agreement or, in the alternative
may elect to terminate the exclusive nature of this Agreement with respect
to a portion of the Territory and/or one or more of the Markets.
Distributor hereby acknowledges that Ivivi has not made any representations
as to the profits or rental volume that may be expected to be realized as a
result of the contractual relationship entered into herein.
4. CONSIGNMENT AND DELIVERY OF EQUIPMENT; TRIAL EVALUATIONS
(a) Throughout the term hereof, Ivivi shall consign to Distributor various
quantities of the Equipment. All consigned Equipment shall be delivered at
Ivivi's sole expense (F.O.B. Ivivi's shipping origination point), to
Distributor's main facility. Any consigned Equipment that is to be returned
to Ivivi shall be returned to Ivivi at the sole expense of Distributor. All
shipping and insurance expenses, while the Equipment is in the possession
of Distributor, shall be the sole responsibility of Distributor or the
Customer.
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(b) Ivivi may prepare and file one or more UCC-1 forms covering the
Equipment consigned by Ivivi to Distributor for rental hereunder or may
electronically have such a UCC-1 financing statement filing made covering
the Equipment. Distributor agrees to execute any and all such UCC-1 Forms
and take whatever steps Ivivi may reasonably require to protect Ivivi's
interest in such Equipment.
(c) Throughout the term of this Agreement Ivivi agrees to supply to
Distributor such amounts of demonstration units and additional units of
Equipment for trial evaluations by Customers as Ivivi deems appropriate.
These units will reside at Distributor's facilities and will serve to fill
demonstrations, rentals, and service needs as required from time to time.
Until such time as the number of units of Equipment consigned by Ivivi to
Distributor is more than twenty (20) units, Distributor will provide to
Ivivi on a monthly basis a status report identifying Equipment, by serial
number, used for demonstration purposes; Equipment placed with Customers
for demonstration purposes; and Equipment returned stating the reason why
such Equipment was returned. Once the number of units of Equipment
consigned by Ivivi to Distributor exceeds twenty (20) units, this status
report shall be provided to Ivivi on a weekly basis.
(d) Trial evaluations of the Equipment by Customers in the Territory will
only be permitted with the prior written approval of Ivivi. At the
commencement of every approved Customer trial evaluation, Distributor shall
provide to Ivivi a "no cost" purchase order for a specified, agreed-upon
period of time containing such terms and conditions as Ivivi shall
reasonably require. Distributor shall provide initial in-service
information to the Customer regarding the Equipment and shall be in contact
with the evaluating Customer on at least a weekly basis throughout the
duration of the trial evaluation regarding the progress of the evaluation.
In addition, throughout the trial evaluation Ivivi shall provide such
clinical support and contact with the evaluating Customer as it deems
appropriate.
5. INVOICING; RENTAL RATES AND COMMISSIONS
(a) Ivivi, or its designated agents or representatives, will have the sole
responsibility for invoicing the Customers for rental and sale of the
Equipment. The rental rates contemplated to be charged for the rental of
the Equipment are set forth in subparagraph 5(b) and any change to those
rental rates shall be mutually agreed upon in writing by Distributor and
Ivivi prior to the delivery of the Equipment to the Customer. All accounts
generated by the rental of the Equipment to Customers shall be the sole
property of Ivivi.
(b) The parties agree that the rental rates to be invoiced by Ivivi to the
Customer for the rental of the Equipment shall be as follows:
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TYPE CURRENT MONTHLY RENTAL RATE TO BE
BILLED BY THE FIRST OF EACH MONTH
SofPulse Model 912 & 912-M10
Long Term Acute Care $____________ for each day when a unit
is not rented for the entire month,
____________ for each day when a unit
is not rented for the entire month,
i.e., ________________.
CURRENT SALES PRICES
Foot Applicator $____ a unit
Coil Applicator $____ a unit
Distributor must obtain Ivivi's prior written approval before
negotiating any lower rental rates or sales pricing other than those
identified in this subparagraph 5(b).
(c) On or by the fifteenth (15th) day of each month, Ivivi will remit to
Distributor a commission statement and corresponding commission based upon the
following average rental rates for the preceding month. The rental rates (and
corresponding commissions) will be calculated and applied separately to the
fleet of Equipment on rent in each of the separate Markets as previously defined
in subparagraph 2(a):
TYPE MONTHLY RENTAL/SALE RATE
SofPulse Model
912/912-M10 If the average rental rate for all
units of Equipment rented during the
preceding calendar month in a
particular Market in the Territory
is:
(i) $_____ or less, Distributor will
be paid a commission of ___% of the
amount invoiced by Ivivi for the
rental of Equipment in that Market;
(ii) Greater than $_____ and less
than $_____, Distributor will be
paid a commission of ___% of the
amount invoiced by Ivivi for the
rental of Equipment in that Market
up to $____ (i.e. ___%) and ___% of
the amount invoiced by Ivivi for the
rental of Equipment in that Market
greater than $____;
(iii) $_____ or greater,
Distributor will be paid a
commission of ___% of the amount
invoiced by Ivivi for the rental of
Equipment in that Market up to
$____ plus ___% of the amount
invoiced by Ivivi for the rental of
Equipment in that Market greater
than $____ but less than $____
(i.e. in the aggregate $___) and
___% of the amount invoiced by Ivivi
for the rental of Equipment in that
Market greater than $____.
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Foot Applicator
Sold for $___ a unit, Distributor
will receive a commission of ___%
Coil Applicator Sold for $___ a unit, Distributor
will receive a commission of ___%
(d) Ivivi may, in its sole discretion from time to time, offer for sale
certain models of its Equipment in addition to or in lieu of rental. In
such an event, Ivivi will notify Distributor of the sales price for the
unit of Equipment and if such a sale occurs in the Territory and within a
Market as a result of the efforts of Distributor, the commission due to
Distributor as a result of that sales transaction shall be ___% of the
amount invoiced by Ivivi (subject to the provisions regarding Bad Debt
contained in section 5(g) of this Agreement). In the event that the
purchasing Customer requires purchase money lease financing, Ivivi will use
its best efforts to arrange such financing for the Customer and an
equitable adjustment shall be made in the commission due to Distributor as
a result.
(e) In the event the Customer is part of a national account such as a Group
Purchasing Organization or a nationwide healthcare provider, and as a
result Ivivi is required to pay the national account or any other entity an
administrative fee, marketing fee or similar payment, the applicable
commissions payable to the Distributor in each such case will be reduced by
the amount paid to the national account or other entity, but in no event
will such deduction exceed five (5%) of the base amount of the calculation.
(f) In case of ______________________________ the Distributor will receive
a ___% commission of the amount invoiced by Ivivi (subject to the
provisions regarding Bad Debt contained in section 5(g) of this Agreement).
No other commission will be paid to the Distributor on these two Customers.
(g) In the event that a Customer in the Territory has not remitted payment
to Ivivi for the rental of Equipment within ninety (90) days of the date of
invoice ("Bad Debt"), Ivivi may deduct from future commissions due to
Distributor an amount equal to the amount of commissions previously paid to
the Distributor with respect to the Bad Debt. In the event that no further
commissions are due to Distributor, then the amount of the deduction shall
be paid back by Distributor to Ivivi within thirty (30) days of the date an
invoice for same is sent by Ivivi to Distributor. If such a deduction (or
invoice for payment) has been made and the Customer subsequently remits to
Ivivi an amount with respect to all or some of the Bad Debt, then the
amount so remitted shall be included in the calculation of commissions to
be paid to Distributor in the subsequent month. Notwithstanding the prior
sentence, in the event that Ivivi (or its billing agent) elects to utilize
the services of an outside collection agency or collection attorney in
order to collect the amount of Bad Debt due from the Customer than no
commission shall be paid to the Distributor in connection with that Bad
Debt.
6. INITIAL DOCUMENTATION; AUDIT RIGHTS.
(a) Within one (1) business day after the initial installation of
Equipment, Distributor will provide Ivivi with documentation containing the
following:
(i) The serial numbers of the Equipment installed and the meter
reading;
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(ii) The facility Market type, name and address where the
Equipment was installed and all billing address information; and
(iii) The best estimate (if available from the Customer) of the
period of time that the Equipment will remain at each facility.
(b) Upon five (5) business days prior written notice, Ivivi shall be
permitted, during normal business hours, to review Distributor's records
with regard to the Equipment that has been consigned to it and all
documentation and records concerning any rentals of the Equipment. Unless
such an inspection indicates that Distributor is in breach of its
obligations hereunder, this audit right shall be limited to one such
inspection during every six (6) month period.
7. INSTALLATION AND SERVICE OF EQUIPMENT
Throughout the term hereof, Distributor shall be responsible for the
initial delivery and installation of the Equipment. Ivivi will provide to
Distributor, free of charge, the parts, documentation and support needed by
Distributor to perform these installations. All service and repair work
regarding the SofPulse Models 912 and 912-M10 will be performed by Ivivi.
Distributor's responsibility with respect to the service of the SofPulse
Models 912 and 912-M10 is limited to picking up a unit needing service and
sending it back to Ivivi, and replacing the damaged unit with a replacement
unit. Ivivi will also provide service training to Distributor's personnel
at no cost to Distributor, according to a training schedule to be mutually
agreed upon by the parties.
8. TRAINING
Distributor agrees that it shall be obligated to attend, at its own
expense, a training session of no more than three (3) days to be conducted
by Ivivi regarding the Equipment.
9. REGULATORY REPORTING
To the extent required for compliance with the FDA medical device tracking
regulations, and other regulatory requirements, and to the extent not
otherwise readily available to Ivivi, Ivivi may, from time to time, require
the Distributor to furnish a report listing the units of Equipment, by
serial number and location, situated in the Territory. In addition, in the
event Distributor becomes aware of an incident involving failure of
performance (or alleged failure of performance) by a unit of Equipment in
the Territory, Distributor shall promptly report same to Ivivi.
10. RESTRICTIVE COVENANT
(a) Throughout the term of this Agreement, and for a period of one (1)
year after its termination for any reason, Distributor, and its
shareholders, officers, directors, and affiliates, agree that within the
Markets in the Territory they shall not market, distribute, rent or sell
(or be employed by, associated with, consult to or enter into a joint
venture or partnership or other commercial arrangement with any other
entity that markets, distributes, rents or sells) any products designed for
wound healing (other than therapeutic beds and support surfaces) and/or for
use in the reduction of pain and edema.
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(b) Distributor understands and acknowledges that the provisions of Section
10(a) are designed to preserve and are necessary to protect the legitimate
business interests, goodwill and other proprietary interests of Ivivi.
Accordingly, Distributor hereby acknowledges that any breach or threatened
breach of the provisions of Section 10(a) hereof will result in irreparable
harm and injury and continuing damage to Ivivi. Distributor agrees that in
the event of a breach or threatened breach of the provisions of Section
10(a) hereof, Ivivi shall be entitled to, without limiting any other
remedies which may exist for any breach of Section 10(a) and without bond
and without the necessity of showing damages, a temporary restraining
order, preliminary injunction and permanent injunction to enjoin such
breach or threatened breach; and recover from Distributor the reasonable
attorneys' fees and costs incurred by Ivivi in enforcing the provisions of
Section 10(a). Distributor hereby waives the claim or defense that an
adequate remedy at law for such a breach exists. For any time period that
Distributor is in violation of the restrictive covenant, such time period
shall not be included in calculating the duration of the restrictive
covenant set forth in Section 10(a). The parties also agree that the
existence of any claim or cause of action by Distributor against Ivivi,
whether predicated upon this Agreement or otherwise, shall not constitute a
defense to the enforcement of the restrictive covenant set forth herein,
but shall be litigated separately. All of Ivivi's affiliates and all
successors and assigns of Ivivi and all successors and assigns of Ivivi's
affiliates are express and intended third-party beneficiaries of the
restrictive covenant set forth in Section 10(a). The restrictive covenant
is intended for the benefit of, and may be enforced by Ivivi or such
affiliates, successors and assigns.
11. RISK OF LOSS; TITLE; RECALL OF EQUIPMENT
(a) Distributor shall bear the risk of loss, theft or destruction of the
Equipment while it is in possession of Distributor. Ivivi shall bear the
risk of loss, theft or destruction of the Equipment while it is in
possession of the Customer. The possession time period of the Equipment by
Distributor shall be deemed to be the time between when Distributor
receives Equipment from Ivivi to the time the Equipment is signed for by a
properly authorized person at the Customer location. The possession time
period of the Equipment by the Customer shall be deemed to be the time
between when the Equipment is signed for by a properly authorized person at
the Customer location and its delivery back to Distributor. If the
Equipment is lost, damaged or destroyed at a Customer location, Distributor
shall cooperate with Ivivi to supply such information as Ivivi may require
in order for Ivivi to invoice the Customer for same. At all times, title to
the Equipment shall remain with Ivivi. Distributor shall bear the
responsibility for ensuring that the Equipment is returned to Ivivi in its
original condition (minus reasonable wear and tear) in its original
shipping cartons, if any. Any deviations from these requirements will cause
Distributor to be immediately financially responsible for the needed
Equipment repairs.
(b) Ivivi will retain the right to recall Equipment from Distributor upon
ninety (90) days written notice, if the units are not producing adequate
rental income flow for Ivivi. Distributor further agrees that it shall pay
to Ivivi the amount of the list price for each unit of Equipment which is
not returned to Ivivi within the aforesaid ninety (90) days period.
12. REPRESENTATIONS AND WARRANTIES REGARDING THE EQUIPMENT
Distributor agrees that it shall make no representations or warranties of
any kind regarding the Equipment, its use or specifications, except for
those representations and warranties that have been approved and authorized
in advance by Ivivi.
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13. TERMINATION
(a) Ivivi may terminate this Agreement at any time upon five (5) days prior
written notice in the event that Distributor, without the prior written
approval of Ivivi, invoices for and/or collects any fees with respect to
any unit of Equipment provided on a test or trial basis or with respect to
any rental of any unit of Equipment.
(b) In the addition to the rights of termination set forth elsewhere in
this Agreement, either party shall have the right to terminate this
Agreement if:
(i) The other party fails to pay any amount owed hereunder and
such failure continues for a period of ninety (90) days or more;
(ii) There is a material violation by the other party of any
provision of this Agreement (other than non-payment of monies) which
violation continues uncured for a period of forty-five (45) days or
more after written notice to the other party specifying such
violation; or
(iii) The other party makes an assignment for the benefit of
creditors, files a voluntary petition for bankruptcy, is adjudicated
insolvent or bankrupt, a proceeding is filed against said party to
declare said party a bankrupt and said proceeding is not dismissed
within thirty (30) days, or said party commences any proceeding under
any reorganization, arrangement, readjustment of debt or similar law
or statute of any jurisdiction.
(c) Any termination of this Agreement shall not affect any obligations
which accrued prior to the effective date of termination.
(d) At the time of the termination of this Agreement, all Equipment
shall be made available for return to Ivivi. Any failure on Distributor's part
to directly facilitate the return of all Equipment belonging to Ivivi will
result in Distributor immediately becoming financially responsible to pay Ivivi
the list price for each unit of Equipment that is not returned within thirty
(30) days of the date of the termination of this Agreement.
(e) At the time of termination of this Agreement, all monies owed by
either party to the other party shall become immediately payable.
14. INSURANCE
Throughout the term of this Agreement both Ivivi and Distributor shall each
maintain such insurance coverages as they normally maintain with respect to
their normal business operations.
15. INDEMNIFICATION
Ivivi hereby agrees to indemnify, defend and hold harmless Distributor, its
officers, directors, employees, subsidiaries and parent company, from and
against any and all claims, liabilities or damages, including reasonable
attorney's fees and costs, to the extent that they arise from the failure
of the Equipment to perform to its published specifications or from a
breach of this Agreement by Ivivi. Distributor hereby agrees to indemnify,
defend and hold harmless Ivivi, its officers, directors, employees,
subsidiaries and affiliates from and against any and all claims,
liabilities or damages, including reasonable attorneys' fees and costs, to
the extent that they arise from the negligence or willful misconduct of
Distributor, or from a breach of this Agreement by Distributor.
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16. RELATIONSHIP OF THE PARTIES
Distributor is an independent contractor and nothing in this Agreement
shall be deemed or construed to create any agency relationship between the
parties. Neither Ivivi nor Distributor, nor any of their employees, shall
be construed to be the agents, employers, representatives or servants of
the other.
17. NOTICES
All notices required to be given by one party to the other shall be sent by
certified mail, return receipt requested, or overnight delivery service
addressed as follows:
If to Distributor: at the address set forth in the preamble to
this Agreement.
If to Ivivi: Ivivi Technologies, Inc.
000-X Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xx Xxxxxx
Fax: 000 000 0000
18. NON ASSIGNABILITY
This Agreement may not be assigned by either party without the prior
written consent of the other party, which consent shall not be unreasonably
withheld, conditioned or delayed.
19. GOVERNING LAW
This Agreement shall be deemed to have been entered into in New Jersey and,
as such, shall be governed by the laws of the State of New Jersey.
Exclusive jurisdiction with respect to any dispute pursuant to this
Agreement shall be in the federal or state courts in Bergen County, New
Jersey.
20. DISPUTE RESOLUTION
In the event of any dispute arising out of or related to this Agreement,
the affected party shall notify the other party, and the parties shall
attempt in good faith to resolve the matter within thirty (30) days after
the date notice is received by the other party. If the parties fail to
resolve the dispute through negotiation, each party shall have the right to
pursue any remedies legally available to resolve the dispute, provided,
however, that the parties expressly waive any right to a jury trial in any
legal proceeding related to this Agreement.
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21. FORCE MAJEURE
If a party's obligation to perform any duty hereunder is rendered
impossible of performance or observance due to any cause beyond such
party's reasonable control, including, but not limited to, an act of God,
war, civil disturbance, fire or other casualty, strike or other labor
dispute, governmental rule, lack of availability of parts or other
supplies, then said party, for so long as such condition exists, shall be
excused from such performance or observance.
22. HEADINGS
The headings or titles of the various paragraphs of this Agreement are
inserted merely for the purpose of convenience and do not expressly or by
implication or intention, limit, extend or affect the meaning or
interpretation of this Agreement or the specific terms or text of the
paragraph so designated.
23. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be deemed as an original, but such counterparts together shall
constitute but one and the same instrument.
24. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the parties hereto
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
oral or written. There are no other agreements between the parties in
connection with the subject matter hereof except as specifically set forth
herein. No supplement to or modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the party to be
bound thereby. In the event any provision of this Agreement shall be held
invalid, such provision shall be deleted from the Agreement, which shall
then be construed to give effect to the remaining provisions thereof.
25. EXECUTION BY IVIVI
This Agreement shall be binding upon Ivivi only if executed by the
President, Chief Financial Officer or Vice President of Ivivi on its
behalf.
In witness whereof, this Agreement has been executed by the duly authorized
officers of the above-referenced parties on the date set forth above.
[Name of Distributor] Ivivi Technologies, Inc.
By By:
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Title: Title: Executive Vice President
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