MASTER DISTRIBUTORSHIP AGREEMENT
THIS MASTER DISTRIBUTORSHIP AGREEMENT (hereinafter called "Agreement")
dated this 23rd day of January, 1996, between DERMA SCIENCES, INC. a corporation
organized under the laws of the state of Colorado (hereinafter "DSI") and
InnerQuest Sales, a corporation organized under the laws of the state of
________________ (hereinafter "IS").
WHEREAS, DSI is engaged in the manufacture, sale and distribution of
various proprietary and non-proprietary pharmaceutical products,
WHEREAS, DSI desires to retain the services of X.X. as a distributor of its
pharmaceutical products,
WHEREAS, IS is skilled in the distribution of pharmaceutical products and
desires to perform distribution services for the account of DSI,
NOW, THEREFORE, the parties hereto, in consideration of the mutual promises
and covenants herein contained, and intending to be legally bound, hereby agree
as follows:
Article 1
Appointment and General Terms
1.01 Appointment. DSI hereby appoints IS as a "Master Distributor" with
respect to its pharmaceutical products, and IS hereby accepts such appointment,
upon the terms and conditions hereinafter set forth.
1.02 Term. The term on this Agreement shall begin on the date hereof and
end on December 31, 1998.
1.03 Products. Pursuant to this Agreement, IS shall assume responsibility
for the sale and marketing, within the Territory below defined, of such
pharmaceutical and related products marketed by DSI as the parties shall, from
time to time, mutually determine (hereinafter "Products"). Without limiting the
generality of the foregoing, IS shall engage in the sale and distribution of
those pharmaceutical and other products marketed by DSI as are enumerated in
Exhibit A attached hereto.
1.04 Territory. This Appointment shall be effective with respect to the
territory described in Exhibit B attached hereto (hereinafter "Territory"). The
Territory is exclusive and DSI warrants that it shall not sell any products to
any third party in the Territory.
1.05 Distributor's Rights and Duties. IS shall have the right and duty to
market, sell and distribute the Products in accordance with sound marketing and
sales practices and in accordance with the terms and conditions of this
Agreement. IS shall sell and deliver the Products exclusively to dealers
(resellers) who DSI and IS shall determine to satisfy the following standards
(hereinafter "Authorized Dealer" or "Dealer"):
(a) The Dealer stocks and actively markets reasonable quantities
of the Products;
(b) The Dealer employs sales personnel knowledgeable in the
marketing, sale and use of the Products;
(c) The Dealer possesses technical expertise relative to
applications of the Products;
(d) The Dealer provides, on a regular basis, pre-sale and
post-sale support to end users of the Products;
(e) All of the end users to whom the Dealer markets and sells
the Products are located within the Territory;
[Those firms listed on Exhibit C hereto are Authorized Dealers.] - [Not
Applicable] IS may, from time to time, approve additional firms as Authorized
Dealers. Upon determination that such firms satisfy the criteria set forth
above, such firms shall become Authorized Dealers for purposes of this
Agreement. Likewise, DSI and IS may "deauthorize" any Authorized Dealer for
failure to maintain the foregoing standards. Deauthorization of an Authorized
Dealer is effective immediately upon notification thereof by either DSI or IS.
1.06 Product Purchases. IS shall purchase Products from DSI at the rate,
and in the amounts, set forth in Exhibit D hereto (the "Annual Purchase Quota").
Not later than the first day of October prior to the term of this Agreement, DSI
and IS shall review the Annual Purchase Quota and endeavor mutually to agree on
the Annual Purchase Quota for the following year. Upon failure of the parties to
so agree, this Agreement, at the option of either party, shall terminate at a
point to be negotiated.
1.07 Product Prices. DSI's prices to IS relative to the Products are
subject to change at any time subject to DSI's sole discretion. Price increases
shall be effective with respect to Products shipped not earlier than thirty (30)
days prior to notification to IS of such price increase(s). Price decreases
shall be effective with respect to Products shipped on and after the date of
such prices decrease(s). In no event shall the price charged by DSI to a
national account located within the Territory be less than the published Dealer
cost at the time of sale.
1.08 Distributor's Marketing and Sales. IS shall maintain a program for the
effective marketing, sale and delivery of the Products. Without limiting the
generality of the foregoing, IS shall undertake the following:
(a) Sales Activities:
(1) Maintain an effective and aggressive sales and service
organization skilled in the marketing and sale of the
Products and in the provision of advisory and support
services relative to the Products to Authorized Dealers;
(2) Cooperate with DSI in the training of IS sales personnel;
(3) Cooperate with DSI in the conduct of seminars for IS
Dealers;
(4) Actively solicit Dealers for the Products;
(5) Cooperate with DSI relative to all matters pertaining to
sales of the Products and post-sale support services;
(6) Conduct such other and further support activities as may be
necessary to effectuate the purposes of this Agreement.
(7) IS shall not market any products which DSI regards as
competitive to any DSI products.
(b) Authorized Dealers Support:
(1) Where applicable, conduct in store merchandising
activities;
(2) Where applicable, advise on display placement and
arrangement;
(3) Provide sales support;
(4) Encourage enrollment by Authorized Dealers in IS
conducted seminars and programs;
(5) Distribute DSI's literature and technical data on a
regular basis;
(6) Provide technical support;
(7) Stock such quantities of the Products as reasonably
required to meet delivery requirements of Authorized
Dealers and end users;
(8) Conduct such other and further support activities as
may be necessary to effectuate the purposes of this
Agreement.
1.09 Packaging and Shipping. DSI will determine, in its sole discretion,
the packaging and routing of the Products purchased by IS.
1.10 Risk of Loss and Title. Risk of loss and title to all Products shall
pass to IS F.O.B. DSI's designated shipping facility unless otherwise
specifically agreed in writing by DSI.
1.11 Distributor's Literature. IS shall deliver to DSI for its review and
approval all printed materials to be used by IS in connection with the marketing
or sale of the Products, including therein, without limitation, catalogs,
advertising, brochures and price lists.
1.12 DSI Support. DSI, in support of the activities of IS in furtherance of
this Agreement, shall provide to IS, in such form and amounts as DSI shall
determine, sales assistance, technical support, product seminars, product
literature and samples.
Article 2
National Accounts
2.01 Establishment. DSI may at anytime, in its discretion, designate a
given Authorized Dealer, a potential dealer, reseller, former Dealer, managed
care account, cooperative, buying group, wholesaler, institution, government
agency, end user or other entity, as a "National Account", providing that DSI
has determined that any of the above accounts ships Products across IS's
territorial boundaries. Prior to the above mentioned designation DSI will
consult with each affected Master Distributor as to various aspects of the
designation.
2.02 Sales Administration. Sales administration relative to all National
Accounts shall be effected exclusively by DSI and shall include:
(a) Acceptance and processing of orders;
(b) Tracking;
(c) Warehousing;
(d) Billing;
(e) Commission payment;
DSI shall require that all National Accounts provide it with timely
information concerning the identity and location of the ultimate purchaser or
end user of Products sold to such Accounts for use in computing the commission
due to Master Distributor as provided in paragraph 2.03. All Sales by National
Accounts to any Account within the Territory shall be credited toward the
satisfaction by IS of its Annual Purchase Quota described in Exhibit D. The
amount of such credit(s) shall be the number of cases of subject Products.
2.03 Distributor's Commission. DSI shall pay to IS a commission on all
sales made by DSI to X.X. at the rate of 10% of the sales price, exclusive of
insurance costs, upon receipt of paid invoices from IS to DSI. In the event that
DSI designates any account as a National Account, DSI shall pay to IS a
commission on sales made by DSI to National Accounts of Products ultimately
utilized in Master Distributor's Territory. The amount of this Commission shall
be the difference between the sale price of the Products, exclusive of insurance
costs, and the price thereof currently in effect for IS.
2.04 Duties of Distributor. IS shall have those duties relative to National
Accounts, and their distributees, as enumerated in paragraph 1.05, excepting
therefrom the duties of DSI enumerated in paragraph 2.02.
2.05 Distributor's Responsibilities Relative to National Accounts: IS shall
be responsible to identify all National Accounts within the Territory as they
are brought to IS attention, at which time IS must notify DSI of the situation.
At that time, DSI will determine the Account's status.
Article 3
Territorial Rights and Obligations
3.01 Sales Out of Territory. IS shall not, without the prior written
consent of DSI, (1) effect sales of the Products to dealers located outside the
Territory, or (2) effect sales of the Products to dealers for resale to end
users located outside the Territory.
3.02 Distributor's Enforcement Obligations. In the event IS becomes aware
of resales of the Products to end users located outside the Territory in
violation of paragraph 3.01, IS shall utilize its best efforts to prevent such
resales; provided, however, nothing contained herein shall be deemed to require
IS to bring legal action against any dealer, reseller or other entity.
3.03 Sales Into Territory. DSI shall utilize its best efforts to prevent
sales by other distributors or dealers to end users located within the
Territory; provided, however, nothing contained herein shall be deemed to
require DSI to bring legal action against any dealer, reseller or other entity.
Article 4
Events of Default
4.01 Enumeration. Any one of the following acts or omissions on the part of
IS shall constitute an Event of Default and shall justify the immediate
termination of this Agreement by DSI "for cause":
(a) Failure of IS to perform any of its obligations hereunder which
failure shall continue for a period of thirty (30) days after
notice thereof, and demand for cure, to IS from DSI;
(b) Failure of IS to pay any invoice of DSI in accordance with its
terms which failure shall continue for a period of fifteen (15)
days after notice thereof, and demand for payment, to IS from
DSI;
(c) Filing by IS for protection under the Federal Bankruptcy Code or
similar statute of any jurisdiction;
(d) Admission by IS of its inability to pay its debts as they mature
or the making by DSI of an assignment for the benefit of
creditors;
(e) Sale by DSI of substantially all of its assets outside the normal
course of its business;
(f) Change, or agreement to change, the ownership or control of DSI,
to the extend of over 50% thereof, whether by sale of stock,
merger, consolidation, liquidation or other means;
(g) Sale by IS of any of the Products to a person or entity who has
not been designated an Authorized Dealer in accordance with
paragraph 1.05.
(h) Publication or distribution by IS, regardless of means or extent,
of proprietary information, trade secrets, confidential data,
internal memoranda or like documents or information of DSI;
(i) Publication or distribution by IS, regardless of means or extent,
of information defamatory or harmful to the reputation or
business interests of DSI;
(j) Failure of IS to purchase that "Annual Purchase Quota" of
Products specified in Exhibit D, as from time to time amended.
(k) Failure of IS to notify DSI of any account that is shipping
products outside of the Territory.
4.02 Performance Excused. During the pendency of any act or omission of IS
as enumerated above, DSI shall be relieved of any obligations imposed upon it
under this Agreement.
Article 5
Remedies and Damages
5.01 Exclusive Remedy. In the event either DSI or IS breaches this
Agreement, regardless of whether such breach is willful, and including therein
the abrogation or cancellation of this Agreement prior to the expiration
thereof, the breaching party shall immediately forfeit all rights to future
benefits under this Agreement saving and excepting therefrom benefits to which
the breaching party has theretofore become entitled. In the event of breach, the
sole and exclusive remedy of the non-breaching party against the breaching party
shall be to withhold further performance hereunder. Without limiting the
foregoing, neither party shall be liable to the other party for monetary damages
based upon any claim arising from the performance or non-performance of this
Agreement or the breach of any warranty, express or implied, associated
therewith, including therein damages for loss of opportunity or profits or any
other special or consequential damages of whatsoever nature. Furthermore, in the
event of breach, no equitable action shall lie by the non-breaching party
against the breaching party including therein an action for specific
performance.
5.02 Independent Causes of Action Not Barred. Nothing contained in this
Article shall preclude either party from bringing suit against the other for
damages arising independently of the rights and obligations created by this
Agreement.
Article 6
Warranties, Defense and Indemnity
6.01 Limited Nature of Warranties. DSI warrants that the Products, when
properly utilized and applied in accordance with the directives furnished
therewith, are safe and will not cause or contribute to sickness or injury to
the users of the Product or associated medical personnel. DSI shall promptly
replace any Product or Products which, in the opinion of DSI, are defective. The
foregoing represents the sole warranties of DSI relative to the Products. DSI
makes no other warranties with respect to the Products, or any of them,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6.02 Duty to Indemnify and Defend. IS shall indemnify DSI and hold DSI
harmless from and against, and shall defend DSI against, any and all claims and
damages of every kind for injury or death to any person or persons and for
damages to or loss of property arising out of or attributed, directly or
indirectly, to the conduct, operations or performance of IS relative to the
Products.
6.03 DSI's Duty to Indemnify and Defend. DSI shall indemnify IS and hold IS
harmless from and against, and shall defend IS against, any and all claims and
damages of every kind arising out of any defects, failures or malfunctions of
any of the Products, saving and excepting those caused by IS or otherwise
arising out of or attributed, directly or indirectly, to the conduct, operations
or performance of IS.
Article 7
Miscellaneous
7.01 Independent Contractor Relationship. The relationship between DSI and
IS created and contemplated hereby is that of independent contractors. Nothing
contained herein shall be construed to create any other relationship, including
therein employer-employee, agency, joint venture or partnership. Neither DSI nor
IS shall have authority to act for or bind the other to any extent or in any
manner whatsoever.
7.02 No Waiver. Failure of DSI to insist upon strict performance of any
term of this Agreement, or the waiver by DSI of any breach of this Agreement by
IS, shall not constitute a waiver by DSI of the subsequent strict enforcement by
DSI on any such term or terms.
7.03 Written Notices. All written notices required hereunder shall be
deemed delivered if delivered by hand or if mailed by United States certified
mail, return receipt requested, postage pre-paid and addressed as follows or to
such other address as maybe specified by notice by either party specifically
referring to this paragraph:
To DSI:
Derma Sciences, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000
To IS:
InnerQuest Sales
000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
7.04 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the Commonwealth of Pennsylvania. Any
and all actions to determine or enforce any rights or obligations created under
this Agreement shall be initiated in the court of Common Pleas of Lackawanna
County, Pennsylvania. The parties hereby irrevocably consent to the exclusive
jurisdiction of the court of Common Pleas of Lackawanna County, Pennsylvania,
relative to the adjudication of any and all disputes arising under this
Agreement or any alleged breach thereof.
7.05 Assignment. IS shall not assign any of its rights or obligations
hereunder without the prior written consent of DSI which consent may be withheld
in the sole and unfettered discretion of DSI.
7.06 Entire Agreement. This Agreement sets forth the entire Agreement and
understanding of the parties with respect to the subject matter treated herein
and supersedes all prior and contemporaneous agreements, understandings,
representations and warranties, whether oral or written, save that neither party
shall be relieved hereby from making payment of any amounts due and owing under
any agreement entered into prior to the date hereof. This Agreement may not be
amended, modified or altered, nor may any of its provisions be waived, except by
writing signed by the party against whom such amendment or modification is
sought to be enforced.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized Presidents the day and year first hereinabove written.
DERMA SCIENCES, INC. INNERQUEST SALES
BY /s/ Xxx XxXxxx BY /s/ Xxxxx Xxxxxxxxxx
---------- ----------------
Xxx XxXxxx Xxxxx Xxxxxxxxxx
Vice President,Sales & Marketing
EXHIBIT A
1. Dermagran Ointment (all sizes)
2. Dermagran Spray (all sizes)
3. Dermagran Wet Saline Dressing
4. Dermagran Zinc-Saline Dressing
5. Dermagran Hydrophilic Wound Dressing (all sizes)
6. Wound Care Kits Containing Any Of
The Above Products
7. Dermagran Wound Cleanser with Zinc
EXHIBIT B
TERRITORY
States of: NEBRASKA
IOWA
MISSOURI
KANSAS
ILLINOIS
MICHIGAN
INDIANA
WISCONSIN
MINNESOTA
NORTH DAKOTA
SOUTH DAKOTA
EXHIBIT C
[NOT APPLICABLE]
1. ____________________ 16. ____________________
2. ____________________ 17. ____________________
3. ____________________ 18. ____________________
4. ____________________ 19. ____________________
5. ____________________ 20. ____________________
6. ____________________ 21. ____________________
7. ____________________ 22. ____________________
8. ____________________ 23. ____________________
9. ____________________ 24. ____________________
10. ____________________ 25. ____________________
11. ____________________ 26. ____________________
12. ____________________ 27. ____________________
13. ____________________ 28. ____________________
14. ____________________ 29. ____________________
15. ____________________ 30. ____________________
EXHIBIT D
Total Cases
1996 - 350 cases a month/4,200 cases annually
1997 - 500 cases a month/6,000 cases annually
1998 - 650 cases a month/7,800 cases annually
