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EXHIBIT 10.37
SABRATEK CORPORATION AND CORAM HEALTHCARE
EXCLUSIVE SUPPLY AGREEMENT FOR IV INFUSION PUMPS,
IV DISPOSABLE SETS AND RELATED ITEMS
This Agreement is entered into as of February 26, 1997, by and between
Sabratek Corporation, Inc. of 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000
(Telephone: 000-000-0000/Fax: 000-000-0000) ("Sabratek") and Coram Healthcare
Corporation located at 0000 00xx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 (Telephone:
000-000-0000/Fax: 000-000-0000) ("Coram").
RECITALS
Coram provides healthcare and offsite intravenous ("IV") equipment and
services for patients through approximately 120 branches in the United States.
Sabratek is in the business of manufacturing and selling pump actuated IV
equipment and disposable IV infusion sets, including central monitoring systems
for IV activity using its pump sets. Coram desires to purchase from Sabratek
and Sabratek desires to sell these products to Coram pursuant to the terms of
this Agreement. Accordingly, the parties agree as follows:
AGREEMENT
1. Products. Sabratek shall sell to Coram and Coram shall
purchase from Sabratek its requirements for the following products (the
"Products") during the stated term of this Agreement: IV Pumps, IV disposable
pump sets, IV pump monitoring systems, related software, and IV pump diagnostic
equipment. Coram will use best efforts to order products from Sabratek as
listed on Exhibit A. Sabratek also offers modems and cables as listed on
Exhibit A for its MediVIEW remote monitoring systems, but Coram is not required
to make purchases of these items from Sabratek.
2. * Confidential Treatment Requested.
3. * Confidential Treatment Requested.
4. Additional Purchases. Coram may purchase disposable IV pump
sets and additional Products from Sabratek at any time during the
Implementation Period and, for the contract term, at the pricing set forth on
Exhibit A to this Agreement. All orders shall be filled as per Section 17.
Coram also agrees to purchase and implement Sabratek's MediVIEW data management
software systems in all its branches by November 1, 1997.
5. Stocking Requirement. Sabratek will maintain a 90 days supply
of disposable IV pumps sets for Coram.
6. Pump Changes. Sabratek agrees not to make any significant
functional modifications to the software of its 3030 or 6060 IV pumps sold and
shipped to Coram, without
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the consent of Coram.
7. Demo Pool. Sabratek will make available during the
Implementation Period a demo pool of 100 Sabratek 3030 and 6060 IV pumps for
training purposes.
8. Loaner Pool. Sabratek will maintain at its premises a pool of
100 pumps for coram as loaners for Sabratek 3030 and 6060 IV pumps purchased
from Sabratek which are out of service due to repair. These loaner pumps are
available for next day delivery.
9. Terms of Sale. All purchase orders for Products shall be
governed by the terms and conditions of this Agreement and Sabratek's general
terms and conditions of sale, attached as Exhibit B, both of which shall
override any inconsistent terms on any purchase order or other communication of
Coram unless expressly agreed to in writing by Sabratek. The terms and
conditions of Exhibit B are part of this Agreement as though set forth in it,
but in the event of a conflict between the terms and conditions of Exhibit B
and the terms of this Agreement, the terms of this Agreement shall control.
The term "Master Contract" whenever used in Exhibit B shall mean this
Agreement, and the term "Buyer" whenever used in Exhibit B shall mean Coram.
10. Contract Term. Coram shall be required to make purchases of
Products from Sabratek and Sabratek shall be required to maintain the pricing
for the Products under the terms of this Agreement for the Implementation
Period and for the shorter of a period of five (5) years (the combined period
referred to as the "Contract Term") or as such time as Coram achieving
$25 million dollars in gross dollar purchases of IV set disposables.
11. * Confidential Treatment Requested.
12. Pricing. The prices for the Products are set forth on Exhibit
A to this Agreement. So long as Coram is not in breach of its payments
obligations and other obligations under this Agreement, the pricing for the
Products will remain firm throughout the Contract Term. Contract pricing will
immediately be reinstated following the cure of any breach.
13. Payment. All purchased by Coram shall be paid within 60 days
after receipt of invoice accompanying a shipment or otherwise delivered to
Coram. Any costs or expenses including Sabratek's attorneys' fees, incurred in
collecting unpaid amounts for Products or enforcing the terms of this Agreement
in the event of its breach by Coram, shall be paid by Coram.
14. Credits. The identification and terms and conditions of
credits available to Coram are set forth on Exhibit A to this Agreement.
Credits offered by Sabratek shall not be used except as and to the extent
expressly authorized by Sabratek. Credits are earned only on the purchase of
IV disposable sets and not on the purchase of IV pumps, MediVIEW Data
Management Software, cables and modems or Pump Masters. Data Management
Software, cables and modems or Pump Masters. Credits are taken only against
the gross sales price of the Products, i.e., the prices listed on Exhibit A.
Each "year" described in the credit notes of Exhibit A means a year beginning
with the first day of the month following the end of the Implementation Period.
In the
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event of a breach of this Agreement by Coram, all credits shall cease to be
available to Coram. Coram acknowledges that an integral condition of any
credit being earned is Coram's due performance of this Agreement for the full
Contract Term.
15. Deleted.
16. * Confidential Treatment Requested.
17. Shortages/Unexpected Increases in Purchases. In the event of
a shortage of Product due to a force majeure or excusable delay event, Sabratek
reserves the right to apportion delivery of Product to its customers in any
manner Sabratek determines reasonable. In all other circumstances, Sabratek
will use its best efforts to accommodate all purchase orders of Coram. If
Coram experiences by acquisition or growth a substantial increase in its
business, Coram shall give Sabratek a reasonable time to increase its
production to meet such additional business, such reasonable time not to exceed
six months, provided however, Sabratek must let Coram know within 30 days after
Sabratek receives notice of Coram's requirements for increased quantities,
whether Sabratek will need more than 60 days to meet Coram's requirements for
additional quantities of the Products. If for any reason Sabratek cannot meet
the purchase order needs of Coram, Sabratek shall give Coram notice thereof as
soon as practical, in writing, specifying the portion of the orders that it
cannot meet and the expected date on which it will be able to meet such orders.
Until such date, Coram shall be entitled to make purchases elsewhere for the
Products not able to be fulfilled timely by Sabratek.
18. MediVIEW Software Data. Coram agrees that all data obtained
from use of Sabratek's MediVIEW Products and in particular the Sabratek Data
Management Software is the property of Sabratek, except that Sabratek grants
Coram a nonexclusive license of such data to use in servicing its patients.
Coram shall maintain the confidence of such data and shall not disclose or
license its use to any third party without Sabratek's prior written consent.
Coram acknowledges that Sabratek intends to use such data on an aggregate basis
to develop and market its products and such data is material consideration to
Sabratek's granting to Coram the pricing and credit terms of this Agreement.
Coram agrees to render reasonable assistance requested by Sabratek to obtain
such data. Sabratek agrees to maintain the confidentiality of individual
patient records.
19. Confidentiality. All negotiations, quotations and terms
relating to the Products or this Agreement and the proposals of Sabratek to
Coram shall be treated as highly confidential, shall not be disclosed to any
other parties by Coram and shall only be retained by senior management of
Coram. This Agreement and the documents leading up to its negotiation shall be
marked "Confidential" and kept in a separate location which is not accessible
by personnel other than senior management of Coram. Coram agrees that it will
not disclose the pricing of the Products under or in connection with this
Agreement to third parties and that the release of such information will cause
serious and irreparable harm to Sabratek. Sabratek acknowledges that IHS has
had and will have access to this Agreement before and after the proposed merger
agreement between Coram and IHS.
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20. New Branches. If Coram opens new IV branches, it will
purchase the Products to service the customers and patients of those branches
in accordance with the exclusivity paragraphs of this Agreement. Coram agrees
to notify Sabratek of each new branch it intends to open.
21. * Confidential Treatment Requested.
22. Support. Sabratek will assign one individual for the duration
of the Implementation Period to be exclusively available to Coram for
implementation and coordination of Coram's purchases of Sabratek's Products
under this Agreement. Coram agrees likewise to assign one individual for the
duration of the Implementation Period to be exclusively available to Sabratek
for implementation and coordination of Product purchases under this Agreement.
Each party shall bear the travel and lodging expenses for its own personnel
assigned to this Agreement. Sabratek must obtain the consent of Coram to the
formal implementation plan provided by Sabratek, but Coram shall not
unreasonably withhold such consent.
23. Warranty. Sabratek warrants that its pumps, pump disposable
sets, pump master and MediVIEW systems to be free from defects in material and
workmanship for a period of five years from the date of delivery, if properly
installed and used in accordance with Sabratek's requirements, guidelines and
instructions, and not subject to abuse, misuse, improper environment or lack of
proper maintenance and service. The sole remedy for breach of this warranty is
return of the part or Product claimed defective to Sabratek transportation
charges prepaid for repair or replacement. All parts and labor incurred by
Sabratek to repair warranted defects or replace warranted pumps shall be free
of charge to Coram. Sabratek is not liable for costs of removal,
transportation costs, Coram's labor costs, reinstallation costs, reinstallation
costs, or for the rental or purchase of substitute equipment or Products.
Coram shall not return Products to Sabratek without Sabratek's prior written or
facsimile authorization. If the loaner pool is exhausted because of defective
Sabratek pumps, Sabratek will increase the loaner pool so that Coram does not
incur rental charges.
24. No Resale. Coram warrants and agrees that the Products will
be purchased exclusively for use and consumption by Coram in its healthcare
activities for patients it services. Coram shall not purchase the Products for
resale or resell them without the prior written consent of Sabratek for the
term of this Agreement, including any extension or renewal terms.
25. Compliance with Laws. Coram and Sabratek will comply with all
federal, state and local laws and regulations governing use of the Products and
their respective operations in connection with the Products. Coram also agrees
to use the Products strictly in accordance with the manuals, instructions,
guidelines, medical precautions and other warnings regarding their use, care,
storage, maintenance, and disposal.
26. Entire Agreement. This Agreement is the complete Agreement
between the parties covering the Products and the other subject matter of this
Agreement. There are no prior written or oral agreements, promises, warranties
or representations which survive this Agreement, all of which are superseded by
the terms of this Agreement. Any such terms which are inconsistent with the
terms of this Agreement in any writing, purchase order or other document of
either party
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not expressly agreed to in writing by both parties shall be disregarded and not
part of this Agreement.
27. Amendments. This Agreement may not be amended or modified
unless it is in writing signed by facsimile or written authorized
representative of each party to be bound.
28. Governing Law. All aspects of this Agreement and each sale of
the Products shall be governed by the internal laws of the State of Colorado
without regard to choice of law rules.
29. Arbitration. Any controversy or claim arising out of or
relating to this Agreement, the Products, or the breach, termination or
validity of this Agreement, shall be settled by arbitration in accordance with
the CPR Non-Administered Arbitration Rules, by a sole arbitrator. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
Section 1-16, and judgment upon the award rendered by the arbitrator may be
entered by any court having jurisdiction thereof. The place of the arbitration
shall be Denver, Colorado. The arbitrator will reduce his or her findings of
fact and conclusions of law to writing.
30. Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. This
Agreement may not be assigned or transferred by Coram without the prior written
consent of Sabratek, which consent shall not unreasonably be withheld.
31. Severability. Each provision of this Agreement shall be valid
and enforced to the fullest extent permitted by law without regard to the
invalidity or unenforceability of any other provision of this Agreement.
32. Independent Status. Sabratek and Coram are not agents for or
partners with one another. Their relationship is solely seller and buyer.
Neither party is authorized or empowered to enter into any obligation or assume
any liability on behalf of the other party without the express written consent
of the other party.
33. Representations/Indemnity. Each party represents to the other
that they are duly incorporated in the state of their respective jurisdictions
of incorporation, validly existing and have the requisite corporate power and
authority to enter into and perform this Agreement. Each party represents to
the other that the entry into and performance of this Agreement and the
transactions contemplated by it will not breach, interfere with or give rise to
a claim under any other agreement, obligation or duty to which the representing
party is subject, other than to the extent that Coram must obtain consent and
approval from IHS under the terms of the Merger Agreement dated October 19,
1996. In the event of a breach of any of the representations or warranties by
one party to the other, or any other obligation under this Agreement, the
breaching party shall defend, indemnify and hold harmless the nonbreaching
party from and against all asserted or resulting suits, proceedings,
liabilities, damages and expenses, including costs of defense and attorneys'
fees. Each party agrees to notify the other promptly by confirmed facsimile or
in writing of any claim by a third party concerning this Agreement or the
Products.
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34. Counterparts. This Agreement may be executed in one or more
counterparts by facsimile signature, each of which shall be deemed an original
and binding for all purposes. Notwithstanding the binding nature of the
execution of this Agreement in facsimile counterparts, each party agrees to
mail an originally signed counterpart of this Agreement to the other promptly
after facsimile execution.
SABRATEK CORPORATION, INC. CORAM HEALTHCARE CORPORATION
By s\ Xxxxx X. Xxxxx By s\ Xxxxxxx X. Xxxxx
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Its Chief Executive Officer Its Chief Financial Officer
------------------------- --------------------------
Dated as of 2/26/97 .
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EXHIBIT A
* CONFIDENTIAL TREATMENT REQUESTED.
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EXHIBIT B
TERMS AND CONDITIONS OF SALE
The following terms and conditions shall be deemed a part of every order
quoted, accepted or acknowledged by Sabratek Corporation, Inc. ("Seller"):
1. DEFINITIONS: As used herein, the term "Buyer" shall mean the
purchaser of any of the Products from Seller, and all others liable for the
purchase price; the term "Products" shall mean all IV pumps, IV disposable pump
sets, IV pump masters, MediVIEW systems and any related items, sold to Buyer by
Seller, whether by direct purchase, shipment to third parties, on consignment
or otherwise.
2. ACCEPTANCE: SELLER'S ACCEPTANCE OF BUYER'S PURCHASE ORDER
RELATING TO THE PRODUCTS IS EXPRESSLY MADE CONDITIONAL ON BUYER'S ACCEPTANCE OF
THESE TERMS AND CONDITIONS, WHICH ARE IN LIEU OF AND SUPERSEDE ANY ADDITIONAL
OR DIFFERENT TERMS CONTAINED IN BUYER'S PURCHASE ORDER OR OTHER DOCUMENT OR
COMMUNICATION PERTAINING TO BUYER'S ORDER OR THE PRODUCTS, WHICH ADDITIONAL OR
DIFFERENT TERMS SHALL BE DEEMED INEFFECTIVE AND REJECTED.
3. CANCELLATION; RETURNS: Orders are not subject to cancellation
by Buyer without the written consent of an authorized officer of Seller. No
products may be returned to Seller for credit or replacement without Seller's
written permission.
4. LATE PAYMENT: [Section eliminated.]
5. TAXES: Prices quoted do not include taxes or other
assessments with respect to the Products. Buyer shall pay any and all use,
sales, privilege, or other taxes or license fees or assessments imposed by
foreign, federal, state or local governments.
6. SHIPMENT: All shipments are F.O.B. Seller's shipping point
with freight charges prepaid and added to Seller's invoice, i.e., Seller
prepays costs of freight and then invoices and obtains reimbursement for same
from Buyer. Unless otherwise indicated in an Order and agreed to by Seller,
selection of the means of transportation for shipment of the Products shall be
at Seller's sole discretion. All packing, crating, storage, shipping,
insurance and other incidental costs with respect to the Products shall be for
the account of or paid directly by Buyer. Buyer's claims for damage to the
Products in transit must be settled with or filed against the carrier and not
Seller. All claims for damages or shortages or other nonconformities of
shipments must be reported to Seller in writing within ten days after receipt
of each shipment of the Products. The description and quantity or weight
contained on the xxxx of lading or other transport document of the Products
shall control in the absence of manifest error.
7. DELAYS: Any delivery date for the Products acknowledged by
Seller is a desired and not a promised date. Seller will undertake reasonable
efforts to meet the delivery schedule
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set forth in an Order but shall not be liable for failure to do so. Seller
shall not be liable for any damage to or loss of the Products or any delay in
or failure to deliver, service, repair or replace the Products arising from
shortage of raw materials, failure of suppliers to make timely delivery, labor
difficulties of any kind, fire, windstorm, flood, theft, war embargoes,
governmental acts or rulings, loss or damage or delays in carriage, acts of
God, or any other circumstances reasonably beyond Seller's control. Products
stored at the request of Buyer or because Buyer refuses or delays shipment
shall be at the risk and expense of Buyer, except for the Products in any demo
pool.
8. PROCESSING: Unless otherwise stated in a Order, the Products
are sold for installation and processing by Buyer. Buyer will perform all
necessary processing and supply all necessary labor, material, and permits to
properly install the Products in accordance with Seller's specific instructions
and the requirements of Buyer's customers.
9. WARRANTY: EXCEPT FOR THE WARRANTY IN ANY MASTER CONTRACT
BETWEEN SELLER AND BUYER AND THAT THE PRODUCTS COMPLY WITH THEIR DESCRIPTION
SET FORTH IN SELLER'S ORDER ACKNOWLEDGMENT, ALL OTHER WARRANTIES PERTAINING TO
THE PRODUCTS OR THEIR SALE, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE,
ARE DISCLAIMED.
10. LIMITATION OF LIABILITY: SELLER SHALL NOT BE LIABLE WHETHER
IN CONTRACT, IN TORT, UNDER ANY WARRANTY, IN NEGLIGENCE, OR OTHERWISE, FOR
CONSEQUENTIAL, SPECIAL OR INCIDENTAL DAMAGES OF A PECUNIARY OR ECONOMIC NATURE,
INCLUDING COSTS OF REMOVAL, REINSTALLATION OR SHIPMENT, DOWNTIME, LOST PROFITS,
OR LOST SALES. UNDER NO CIRCUMSTANCE SHALL SELLER'S LIABILITY OR BUYER'S
REMEDY FOR PECUNIARY DAMAGES AGAINST SELLER EXCEED THE AMOUNT OF THE PURCHASE
PRICE OF SELLER'S PRODUCTS DESCRIBED ON A PARTICULAR ORDER INVOLVING A BREACH
OR CLAIM. IN THE EVENT OF ANY ACCIDENT, OCCURRENCE OR WARRANTY CLAIM
CONCERNING THE PRODUCTS, BUYER MUST NOTIFY SELLER PROMPTLY IN WRITING AND
PERMIT SELLER TO PRESERVE EVIDENCE , TEST THE PRODUCTS, AND INVESTIGATE THE
CAUSE THEREOF. BUYER SHALL GIVE SELLER PROMPT AND CONTINUING ACCESS TO THE
PRODUCTS FOR INSPECTION AND TESTING, TO THE ENVIRONMENT AND LOCATION OF THE
PRODUCTS, AND SHALL COOPERATE WITH SELLER BY PROMPTLY FURNISHING OR GRANTING
SELLER ACCESS TO ITS EMPLOYEES, ALL RELEVANT INFORMATION, DATA, TEST RESULTS,
REPORTS, WITNESSES, AND OTHER INFORMATION RELATIVE TO ANY OCCURRENCE, ACCIDENT
OR CLAIMED DEFECT IN THE PRODUCTS. FAILURE OF BUYER TO GIVE PROMPT NOTICE AS
REQUIRED HEREIN OR TO COOPERATE IN THE INVESTIGATION OF AN OCCURRENCE, CLAIM OR
ACCIDENT CONCERNING THE PRODUCTS, SHALL BAR BUYER FROM ANY REMEDY AGAINST
SELLER. EVEN THOUGH PERSONAL INJURY AND/OR PHYSICAL PROPERTY DAMAGES ARE NOT
DISCLAIMED OR LIMITED
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HEREIN, BUYER AGREES THAT THE DISCLAIMER OF PECUNIARY OR ECONOMIC CONSEQUENTIAL
AND INCIDENTAL DAMAGES SHALL NEVERTHELESS BE FULLY ENFORCEABLE. SELLER
DISCLAIMS ALL RESPONSIBILITIES FOR AND BUYER AGREES TO INDEMNIFY SELLER FROM
ANY CLAIMS, DAMAGES, OR EXPENSES (INCLUDING ATTORNEYS' FEES AND EXPENSES)
RELATING TO ENVIRONMENTAL DAMAGE, POLLUTION, WASTE OR CLEAN-UPS ARISING OUT OF
OR RELATING TO THE PRODUCTS OR THE MAINTENANCE THEREOF OR BUYER'S FAILURE TO
COMPLY WITH ALL APPLICABLE ENVIRONMENTAL OR OTHER LAWS.
11. APPLICABLE LAWS; ARBITRATION: All matters pertaining to the
Products shall be governed by the internal laws of the State of Illinois. Any
controversy or claim arising out of any Order or its breach or pertaining to
the Products shall be settled by arbitration in Chicago, Illinois, in
accordance with the CPR Non-Administered Rules, by a sole arbitrator. The
arbitration shall be governed by the United States U.S.C. Section 1-16, and
judgment upon the award rendered by the arbitrator may be entered by any court
having award rendered by the arbitrator may be entered by any court having
jurisdiction thereof. The place of the arbitration shall be Chicago, Illinois.
The arbitrator shall reduce findings of fact and conclusions of law to writing
in his award.
12. INVALID TERM: The invalidity of any term contained in any
Order or these terms shall not affect any other of its terms.
13. NONWAIVER: Seller's or Buyer's failure to enforce or declare
a default or breach with respect to any particular term or condition of the
Order or these terms shall not be considered a waiver of Seller's or Buyer's
right to enforce or be protected by any other term or condition or, on a
subsequent occasion, with respect to that particular term or condition.
14. ALTERATION OF TERMS AND PAROL EVIDENCE: None of the terms and
conditions contained in any Order may modify these terms and conditions except
by a written instrument signed by an authorized officer of Seller delivered to
Buyer.
