Exhibit 10(d)
EXECUTION COPY
SUPPLY AGREEMENT
by and among
XXXXXX HEALTHCARE CORPORATION
and
VWR CORPORATION
September 15, 1995
TABLE OF CONTENTS
1. Definitions 1
2. VWR's Supply Obligation 2
3. Term 2
4. Prices 2
5. Xxxxxx'x Duties 4
6. VWR's Duties 4
7. Termination 5
8. Procedures on Expiration or Termination 6
9. Force Majeure 6
10. Third Party Claims 6
11. Miscellaneous Provisions 8
12. Assignment 10
13. Counterparts 11
LIST OF EXHIBITS
Exhibit 4.1 Variable Overhead Calculation
i
SUPPLY AGREEMENT
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This SUPPLY AGREEMENT ("Agreement"), dated as of September 15, 1995,
by and among XXXXXX HEALTHCARE CORPORATION, a Delaware corporation with its
principal offices at Xxx Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (hereinafter
called "Baxter") and VWR CORPORATION, a Pennsylvania corporation with its
principal office at 0000 Xxxxxx Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000
(hereinafter called "VWR").
RECITALS
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1. Baxter, VWR, and EM Laboratories, Incorporated, a New York
corporation ("EM"), have entered into an Asset Purchase Agreement dated as of
May 24, 1995, as amended on September 15, 1995, pursuant to which Baxter has
sold to VWR, and VWR has purchased from Baxter, certain of the assets and
business of Xxxxxx'x "Industrial Distribution Business," as defined in the Asset
Purchase Agreement.
2. Pursuant to Section 6.5 of the Asset Purchase Agreement, Baxter
and VWR have agreed that VWR will supply to Baxter and its Affiliates certain
equipment and supplies manufactured by third parties and have agreed to execute
this Agreement.
AGREEMENT
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In consideration of the Asset Purchase Agreement and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Baxter and VWR agree as
follows:
1. Definitions.
1.1 "Affiliate" shall mean any person, firm or corporation
controlling, controlled by or under direct or indirect common control with a
party hereto. For the purpose of this definition, the term "control" means the
power to direct the management or policies of a party, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
1.2 "Facilities" shall mean any or all of Xxxxxx'x and its
Affiliates' facilities as specified in writing which such initial list shall be
provided within two (2) days after the date hereof.
1.3 "Person" shall mean an individual, corporation, partnership,
limited liability company, unincorporated syndicate, unincorporated
organization, trust, trustee, executor, administrator or other legal
representative, governmental authority or agency, or any group or combination
thereof.
1.4 "Products" shall mean (a) the products and accessories listed in
VWR's catalog from time to time, and (b) any other products and accessories
provided by VWR to Baxter (upon Xxxxxx'x request) related to Xxxxxx'x research
and development or quality control functions.
1.5 "Term" shall mean the period of time specified in Section 3
hereof, including any and all renewals thereof.
2. VWR's Supply Obligation.
During the Term, as defined herein, VWR shall supply Products to
Facilities for Xxxxxx'x and its Affiliates' internal use only and not for
resale. VWR shall supply such Products in amounts and as requested by Baxter
and its Affiliates from time to time at a cost as provided below.
3. Term.
The initial term ("Term") of this Agreement shall begin on the date of
this Agreement and end on September 30, 2000; provided that the Term shall be
automatically renewed for additional and successive periods of one year each,
unless and until such initial or additional Term is terminated as provided in
Section 7 of this Agreement.
4. Prices.
4.1 The price to Baxter and its Affiliates for each Product shall
be the sum of (a) subject to the restrictions contained in the following
sentence, the lesser of file cost or special vendor cost (taking into account
rebates, discounts, allowances, and other adjustments related solely to Xxxxxx'x
order for such Product) to VWR (or in the case of EM or EM's affiliates in the
event this Agreement has been assigned pursuant to Section 12.4, local
distributor cost) for such Product; plus (b) subject to adjustment as provided
below, 6.6% of such file cost, special vendor cost or local distributor cost;
plus (c) inbound, outbound, and/or Baxter-related freight costs incurred by VWR
in providing the Product to Baxter or its Affiliates,
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provided that such direct costs shall not include any of VWR's overhead costs.
VWR shall provide to Baxter at least six months prior written notice of any
increase or decrease of file cost or special vendor cost with respect to any
Product, and such file costs and special vendor costs may not be changed for the
purposes of this agreement on less than such six months notice. The 6.6% charge
in subsection (b) above represents VWR's variable direct overhead costs and is
based upon the calculation set forth in Exhibit 4.1 which is attached hereto and
made a part hereof. Such direct overhead charge shall be subject to review and
adjustment by the parties every six months during the Term based upon changes in
VWR's overhead costs (including, without limitation, cost savings through the
use of electronic data interchange "EDI"). In the event that Baxter shall
utilize EDI for any orders placed hereunder the then applicable direct overhead
charge otherwise payable by Baxter with respect to such order shall be reduced
by 3.2 percentage points. VWR shall rebate to Baxter within 30 days of the end
of each quarter any amounts due Baxter as a result of the utilization of EDI
with respect to orders placed during such quarter.
At least once every six months during the Term, VWR shall provide to
Baxter vendor verification of VWR's price for each of the 250 Products that
Baxter purchases in the highest dollar volume from VWR.
4.2 The prices for the Products sold by VWR to Baxter shall not
include any transportation expenses, customs duties, sales tax, goods and
services tax or any other sales, use, inventory, delivery, value added or like
taxes of any federal, state or local government, however imposed. Baxter shall
be responsible for all such expenses, duties and taxes and shall pay VWR any and
all taxes which VWR is required to collect or pay with respect to the sale to
Baxter, of the Products pursuant to this Agreement.
4.3 VWR shall maintain and keep records of the costs incurred by
VWR in connection with its provision of Products to Baxter and its Affiliates
pursuant to this Agreement. Such records shall be maintained in sufficient
detail to enable such costs to be verified. Upon no less than 5 business days
advance written notice to VWR, VWR's records shall be made available for
inspection by Baxter or any of its Affiliates or any firm of certified public
accountants selected by Baxter or any of its Affiliates, for the purpose of
verifying such costs.
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5. Xxxxxx'x Duties.
During the Term, Baxter shall:
5.1 submit its orders for the Products on its standard purchase
order form, provided that notwithstanding any terms or provisions of such
purchase order, the terms and conditions of this Agreement shall apply to each
such purchase order;
5.2 pay for such orders net 30 days from the date of invoice; and
5.3 shall indemnify and hold harmless VWR, its Affiliates and:
(a) their respective directors, officers, employees, agents and counsel; and (b)
the successors, assigns, heirs and personal representatives of any of the
foregoing (all of the foregoing being collectively referred to in Section 10 as
"Indemnified Persons") with respect to all claims, liabilities, damages, and
expenses, including reasonable attorneys' fees and expenses, arising out of
claims by third parties caused by the breach by Baxter or its Affiliates (or
their employees or other agents) of the terms of this Agreement; provided that
Section 10 shall apply to any claim, arbitration proceeding or suit made or
brought by any third party as to which any Indemnified Person intends to claim
indemnification under this Section 5.3.
6. VWR's Duties.
6.1 VWR shall ship all Products to Baxter and its Affiliates
F.O.B. Origin VWR, Prepaid and Add, to the relevant Facility and by the carrier
designated pursuant to the relevant Purchase Order. Title and risk of loss of
all Products shall pass to Baxter upon VWR's delivery of such Products to the
carrier.
6.2 VWR shall deliver to Baxter Products that have an expiration
date with a minimum shelf life acceptable to Baxter;
6.3 VWR shall adequately package and deliver the Products to the
carrier;
6.4 VWR shall comply (or cause compliance) with all existing and
future laws and regulations applicable to the sale to Baxter of Products
pursuant to this Agreement, including, without limitation, the following:
6.5 give prompt written notice to Baxter if VWR should become
aware of any defect or condition (actual or alleged) which may alter the quality
of the Products in any
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material respect or may render any of the Products in violation of any
applicable law or regulation, including, without limitation, any violation which
could require any alteration of the specifications of any Product, affect the
sale of any Product, cause revocation of any federal, state or other regulatory
approval with respect to any Product or its sale hereunder or give rise to a
claim against Baxter by any person; and
6.6 Give prompt written notice to Baxter of any and all Products
affected by holds or recalls and, if VWR requests Baxter to return any of such
Products to VWR, promptly reimburse Baxter for the price of such returned
Products paid by Baxter under this Agreement and the variable overhead, freight
and any other direct cost incurred by Baxter in returning such Products to VWR;
6.7 VWR shall assign to Baxter and its Affiliates the benefits of
all third party manufacturers' warranties relating to the Products.
6.8 VWR shall indemnify and hold harmless Baxter, its Affiliates
and: (a) their respective directors, officers, employees, agents and counsel;
and (b) the successors, assigns, heirs and personal representatives of any of
the foregoing (all of the foregoing being collectively referred to in Section 10
as "Indemnified Persons") with respect to all claims, liabilities, damages, and
expenses, including reasonable attorney's fees and expenses, arising out of
claims by third parties caused by the breach by VWR (or its employees or agents)
of the terms of this Agreement; provided that Section 10 shall apply to any
claim, arbitration proceeding or suit made or brought by any third party as to
which any Indemnified Person intends to claim indemnification under this Section
6.6.
7. Termination.
7.1 VWR and Baxter shall each have the right to terminate this
Agreement effective upon delivery of written notice to the other party if the
other party: (a) makes an assignment for the benefit of creditors, or becomes
bankrupt or insolvent, or is petitioned into bankruptcy, or takes advantage of
any state, federal or foreign bankruptcy or insolvency act, or if a receiver or
receiver/manager is appointed for all or any substantial part of its property
and business and such receiver or receiver/manager remains undischarged for a
period of 30 days, or if the corporate existence of the other party is
terminated by voluntary or involuntary dissolution; or (b) defaults in the
performance of any of its covenants or obligations contained in this Agreement
and such default (x) is not remedied to the non-defaulting party's reasonable
satisfaction within 30 days after
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written notice to the defaulting party of such default, or (y) is not capable of
rectification within 30 days and the defaulting party has not promptly commenced
to rectify the default within such 30 day period and thereafter proceeded
diligently to rectify same. Notwithstanding the foregoing provisions of this
Section 7, VWR may suspend its performance under this Agreement if Baxter has
not made any uncontested payment due under Section 5.2 within 30 days following
the date on which such payment is due until such payments have been received by
VWR, and any such failure to pay within such 30 day period shall be considered a
default under this Agreement.
7.2 In the event that this Agreement is terminated pursuant to
this Section 7, VWR and Baxter shall comply fully with this Agreement until such
termination becomes effective.
8. Procedures on Expiration or Termination.
On the expiration or termination of this Agreement for any reason, VWR
shall continue to xxxxx Xxxxxx'x orders for Products placed up to the effective
date of termination and for a period of 60 days thereafter and Baxter shall pay
for such Products on the terms and conditions set forth in this Agreement.
9. Force Majeure.
The obligations of either party to perform under this Agreement shall
be excused during each period of delay caused by matters (not including lack of
funds or other financial causes) such as strikes, supplier delays, shortages of
raw materials, government orders or acts of God, which are reasonably beyond the
control of the party obligated to perform. Any delay occasioned thereby shall
not constitute a default under this Agreement, and the obligations of the
parties shall be suspended during the period of delay so occasioned.
10. Third Party Claims.
If any third party shall make any claim or commence any arbitration
proceeding or suit against any one or more of the Indemnified Persons with
respect to which an Indemnified Person intends to make any claim for
indemnification against Baxter under Section 5.3 or against VWR under Section
6.6, such Indemnified Persons shall promptly give written notice to Baxter or
VWR, as the case may be, of such third party claim, arbitration proceeding or
suit and the following provisions shall apply:
10.1 Subject to Section 10.2, such Indemnified Persons shall have
the right to conduct and control, through counsel of their choosing, the defense
of any third party claim,
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arbitration proceeding or suit, and such Indemnified Persons may settle the
same; provided that such Indemnified Persons shall give the indemnifying party
advance notice of any proposed settlement. Such Indemnified Persons shall permit
the indemnifying party to participate in the defense of any such action or suit
through counsel chosen by it, provided that the fees and expenses of such
counsel shall be borne by the indemnifying party. Any settlement with respect
to a claim for money damages effected by such Indemnified Persons after the
indemnifying party has notified such Indemnified Persons in writing of the
indemnifying party's disapproval of such settlement, shall discharge the
indemnifying party from liability with respect to the subject matter thereof
under this Agreement, and no claim for indemnification therefor shall be claimed
by such Indemnified Persons under Section 5.3 or Section 6.6, as the case may
be.
10.2 Notwithstanding Section 10.1, if the remedy sought in any
claim, arbitration proceeding or suit referred to in this Section 10 is solely
money damages, the indemnifying party shall have 15 business days after receipt
of the notice referred to above in this Section 10 to notify such Indemnified
Persons that it elects to conduct and control the defense of such claim,
proceeding or suit. If the indemnifying party does not give the foregoing
notice, such Indemnified Persons shall have the right to defend or settle such
claim, proceeding or suit in the exercise of their exclusive discretion, and the
indemnifying party shall, upon request from any of such Indemnified Persons,
promptly pay to them in accordance with Section 5.3 or Section 6.6, as the case
may be, the amount of any liabilities, damages, losses and expenses, including
reasonable attorney's fees, resulting from such claim, proceeding or suit. If
the indemnifying party gives the foregoing notice, the indemnifying party shall
have the right to undertake, conduct and control, through counsel of its own
choosing and at the sole expense of the indemnifying party, the conduct and
control of the defense and any settlement of such claim, proceeding or suit, and
such Indemnified Persons shall cooperate with the indemnifying party in
connection therewith; provided that: (a) the indemnifying party shall not
thereby permit to exist any lien, encumbrance or other adverse charge upon any
asset of any of such Indemnified Persons; (b) the indemnifying party shall
permit such Indemnified Persons to participate in such defense or settlement
through counsel chosen by such Indemnified Persons, but the fees and expenses of
such counsel shall be borne by such Indemnified Persons except as provided in
clause (c) below; and (c) the indemnifying party shall agree to reimburse
promptly under Section 5.3 or Section 6.6, as the case may be, such Indemnified
Persons for the full amount of any liabilities, damages, losses and expenses,
including reasonable attorneys' fees, resulting from such claim, proceeding or
suit, except in each case for any
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fees and expenses of counsel for such Indemnified Persons incurred after the
assumption of the conduct and control of such claim, proceeding or suit by the
indemnifying party. So long as the indemnifying party is contesting any such
claim, proceeding or suit in good faith, such Indemnified Persons shall not pay
or settle any such claim, proceeding or suit; provided, however, that such
Indemnified Persons shall have the right to pay or settle any such claim,
proceeding or suit; provided, further, that in such event such Indemnified
Persons shall be deemed to have waived any right to indemnity therefor by the
indemnifying party under Section 5.3 or Section 6.6, as the case may be.
11. Miscellaneous Provisions.
11.1 All notices and other communications required under this
Agreement shall be in writing and shall be deemed to have been given if
delivered by hand, or sent by courier or facsimile transmission (provided that
in the case of facsimile transmission, a confirmation copy of the notice shall
be delivered by hand or sent by courier within 2 days of transmission),
addressed:
if to Baxter to:
Xxxxxx Healthcare Corporation
Xxx Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
(facsimile number: (000) 000-0000)
with copies to:
Xxxxxxx X. Xxxxxxx, Esq.
Assistant General Counsel
MPN-02
U.S. Healthcare/Law
Xxxxxx Healthcare Corporation
0000 Xxxxxxxx Xxxx
XxXxx Xxxx, Xxxxxxxx 00000
(facsimile number: (000) 000-0000)
and
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. X'Xxxx
(facsimile number: (000) 000-0000)
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if to VWR to:
VWR Corporation
0000 Xxxxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
(facsimile number: (000) 000-0000)
with a copy to:
Drinker Xxxxxx & Xxxxx
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxx
(facsimile number: (000) 000-0000)
until notice of a change is given as provided in this Section 11.1. All notices
given in accordance with this Section 11.1 shall be effective, if delivered by
hand or by courier, at the time of delivery, and, if communicated by facsimile
transmission, at the time of transmission.
11.2 This Agreement is the entire agreement between the parties
hereto with respect to the subject matter hereof, there being no prior written
or oral promises or representations not incorporated herein or therein.
11.3 This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Illinois and the federal
laws of the United States of America applicable therein. Any lawsuit arising
from or related to this Agreement shall be brought before the United States
District Court for the Northern District of Illinois or the Eastern District of
Pennsylvania or an Illinois state court sitting in Lake County, Illinois, or any
Commonwealth Court sitting in Xxxxxxx County, Pennsylvania. The parties hereby
consent to the jurisdiction of such courts.
11.4 No amendment or modification of the terms of this
Agreement shall be binding on either party unless reduced to writing and signed
by an authorized officer of the party to be bound. The waiver by either party
of any particular default by the other party shall not affect or impair the
rights of the party so waiving with respect to any subsequent default of the
same or a different kind; nor shall any delay or omission by either party to
exercise any right arising from any default by the other affect or impair any
rights which the non-defaulting party may have with respect to the same or any
future default.
11.5 Each party represents and warrants that the terms of this
Agreement do not violate any existing obligations
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or contracts of, or any law, rule, regulation, judgment or order binding on,
such party. Each party shall indemnify and hold harmless the other party from
and against any and all liabilities, damages, losses and expenses (including
reasonable attorney's fees) resulting from any third party claim, arbitration
proceeding or suit which is hereafter made or brought against the other party
and which alleges any such violation, all as provided in Section 10 herein with
respect to the indemnification provided in Section 5.3 and Section 6.6.
11.6 Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without affecting, impairing or invalidating the
remaining provisions or the enforceability of this Agreement.
11.7 By virtue of this Agreement, neither party constitutes the
other as its agent, partner, joint venturer, or legal representative and neither
party has express or implied authority to bind the other in any manner
whatsoever.
12. Assignment.
12.1 This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
provided, however, that neither party shall have the right to transfer or assign
its interest in this Agreement without the prior written consent of the other
party, which consent shall not be unreasonably withheld.
12.2 Notwithstanding the foregoing provisions of this Section 12,
Baxter may assign its rights and obligations under this Agreement to any
corporation or other entity that shall acquire all or substantially all of
Xxxxxx'x business and assets and who shall assume in writing all of Xxxxxx'x
obligations hereunder and deliver a signed copy of such assumption instrument to
VWR; provided, further, that upon VWR's receipt of such assumption instrument,
Baxter shall be fully released and discharged from its obligations under this
Agreement.
12.3 Notwithstanding the foregoing provisions of this Section
12, to the extent that any Person shall acquire all or substantially all of
Xxxxxx'x business and assets relating to any Facility, Baxter may assign a
corresponding portion of its rights hereunder to such corporation or entity,
provided that any such Person shall assume in writing all of Xxxxxx'x
obligations hereunder which correspond to the portion of rights assigned, and
shall deliver a signed copy of such assumption instrument to VWR; provided
further that upon VWR's receipt of such assumption instrument, Baxter shall be
fully released and discharged from
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all of the obligations under this Agreement that are assumed by such a
corporation or entity.
12.4 Notwithstanding the provisions of Section 12.1, VWR may
assign a portion of its rights and obligations under this Agreement to EM or
EM's Affiliates who shall assume in writing corresponding obligations of VWR
hereunder and deliver a signed copy of such assumption instrument to Baxter;
provided, that (a) VWR shall continue to be liable to Baxter for all of the
obligations of VWR hereunder notwithstanding any such assignment; and (b) the
price to Baxter and its Affiliates for the Products shall be based upon VWR's
costs in accordance with Section 4.
13. Counterparts.
For convenience of the parties hereto, this Agreement may be executed
in one or more counterparts, each of which shall be deemed an original for all
purposes.
* * * * * * *
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IN WITNESS WHEREOF, the parties have by their duly authorized officers
executed this Agreement as of the date first above written.
XXXXXX HEALTHCARE CORPORATION VWR CORPORATION
By:/s/ Xxxxx X. Xxxxx By: /s/Xxxxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxx
Title: Vice President Title: President and Chief
Strategic Initiatives Executive Officer
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