NON-EXCLUSIVE DISTRIBUTION AGREEMENT
Exhibit 10.1
NON-EXCLUSIVE DISTRIBUTION AGREEMENT
THIS NON-EXCLUSIVE DISTRIBUTION AGREEMENT (this “Agreement”) is entered into as of this 1st day of June, 2007 (the “Effective Date”) by and between AutovaxID, Inc., a Florida corporation with its principal offices located at 1701 Macklind Avenue, St. Louis, MO 63110(“SUPPLIER”), and VWR INTERNATIONAL, INC., a Delaware corporation with its principal offices located at 1310 Goshen Parkway, West Chester, Pennsylvania 19380 (“DISTRIBUTOR”).
Intending to be legally bound, the parties hereto agree as follows:
| 1. | Products |
| (a) | Products Covered by this Agreement |
The products covered by this Agreement are those products and accessories set forth in the attached Addendum A, together with the parts and components necessary for the repair and replacement thereof, and all modifications, improvements, developments, upgrades and replacements pertaining thereto (collectively, the “Products”). Addendum A shall be amended automatically from time to time without any further act of the parties to delete any Products the sale of which has been generally discontinued by SUPPLIER. Products may also be added to this Agreement pursuant to Section 1(b).
| (b) | New Products |
| (1) | SUPPLIER shall submit to DISTRIBUTOR specifications and, where feasible, samples of each new product (which is not a Product hereunder) which SUPPLIER intends to manufacture for sale. Within 60 days after such submission, DISTRIBUTOR shall have the right to acquire non-exclusive rights to promote, market, sell and distribute such new products in the Territory (as that term is defined in Section 2(a)), upon terms to be negotiated and agreed upon in good faith by DISTRIBUTOR and SUPPLIER, by advising SUPPLIER that DISTRIBUTOR is electing to add such new products to the Products set forth in Addendum A. Upon agreement as to distribution terms and the giving of notice of election described herein, such new product shall be a Product for the purposes of this Agreement. If DISTRIBUTOR elects to acquire the rights described above to such new product, SUPPLIER shall complete, to DISTRIBUTOR’s satisfaction, DISTRIBUTOR’s most recently available product add form regarding such product. |
Page 1 of 23
| (2) | Upon DISTRIBUTOR’s election not to promote, market, sell and distribute such new product pursuant to this Agreement, SUPPLIER shall be free to market such new product as it deems fit; provided, however, that SUPPLIER shall not during the term of this Agreement offer a third party the right to promote, market, sell and distribute such new product on terms and conditions more favorable than those set forth herein without first giving DISTRIBUTOR the opportunity, on 30 days’ prior notice, to accept such revised terms and conditions, and provided further that any modification, improvement, development, upgrade or replacement of such new product shall be subject to Section 1(b)(1). |
| 2. | Grant of Non-Exclusive Distributorship |
| (a) | SUPPLIER hereby grants to DISTRIBUTOR, and DISTRIBUTOR hereby accepts, on the terms and conditions stated in this Agreement, the non- exclusive right during the term of this Agreement to promote, market, sell and distribute the Products throughout North America (the “Territory”). |
| (b) | Nothing in this Agreement shall prohibit DISTRIBUTOR from promoting, marketing, selling and distributing other articles, including ones that compete with the Products, whether in the Territory or otherwise. |
| (c) | DISTRIBUTOR shall have the right to appoint sub-distributors to promote, market, sell and distribute the Products in the Territory. |
| (d) | Notwithstanding the non-exclusive nature of this Agreement, SUPPLIER agrees that it shall not distribute Products in the Territory through Fisher Scientific or Invitrogen at any time during the Term of this Agreement |
| 3. | Term and Renewal |
The initial term of this Agreement shall begin on the date set forth in the first paragraph of this Agreement and shall continue for a term of 24 months, and, unless earlier terminated as set forth in Section 12 or by either party at the expiration of the then current term upon not less than 90 days’ prior notice, shall thereafter renew automatically for additional and successive terms of 12 months each.
| 4. | Price |
| (a) | The price to DISTRIBUTOR for the Products shall be as set forth on Addendum A or as accepted by DISTRIBUTOR and included in the DISTRIBUTOR’s system. Any additional products that shall be added as Products hereunder as described in Section 1(b) will be subject to the pricing terms negotiated by DISTRIBUTOR and SUPPLIER at the time |
Page 2 of 23
| that they are added as Products. After the first anniversary of the date of this Agreement, SUPPLIER may increase the prices for the Products, provided, that (i) price increases may occur no more than once in any 12 month period, (ii) SUPPLIER shall give DISTRIBUTOR at least 90 days prior written notice of price increases, (iii) the effective date of any price increases shall be the January 1st occurring after notice is received by SUPPLIER, (iv) price increases shall be limited to commercially reasonable increases given market conditions and increases in SUPPLIER’s costs, and (v) DISTRIBUTOR shall have the right to request and receive written explanation of SUPPLIER’s basis for price increases, including without limitation any increased costs supporting such proposed price increases. SUPPLIER may decrease prices for Products, at any time at its option, or to comply with mutually agreed price deflation objectives. Costing on new Products shall be determined based on SUPPLIER’s cost, increased to reflect SUPPLIER’s profit margin consistent with existing Products. All pricing information regarding the Products shall be treated as “confidential” in accordance with Section 11 hereof. |
| (b) | In recognition of the substantial investment by DISTRIBUTOR in SUPPLIER’s products and the value DISTRIBUTOR adds through its extensive sales efforts and channels, the prices, discounts, rebates, payment terms and other terms and conditions (collectively, the “Commercial Terms”) provided to DISTRIBUTOR hereunder shall in all cases be no less favorable to DISTRIBUTOR than the Commercial Terms offered to any other distributor of any of SUPPLIER’s products and accessories. In addition, SUPPLIER hereby grants to DISTRIBUTOR the right to continue to supply accessories to any of SUPPLIER’s Products to any customer to which DISTRIBUTOR makes sales of such products during the term of this Agreement, including any extensions thereto, for a period of Five (5) years from the date of such Product sale, notwithstanding the earlier termination of this Agreement. Pricing of such accessories shall be determined in accordance with the terms set forth herein. |
| (c) | DISTRIBUTOR shall be responsible for collecting all domestic, foreign, state or local sales, use, value added or other taxes as well as custom duties, tariffs, levies fees or other charges from customers. |
Page 3 of 23
| 5. | DISTRIBUTOR’s Duties |
DISTRIBUTOR shall:
| (a) | Submit orders for Products using DISTRIBUTOR’s standard purchase order form, via electronic data interchange or other method of electronic commerce. All purchase orders shall be governed only by the terms and conditions of this Agreement, notwithstanding any inconsistent or additional terms or conditions appearing elsewhere on any other DISTRIBUTOR or SUPPLIER document. |
| (b) | Pay all invoiced amounts within 45 days of the receipt of the Products by DISTRIBUTOR’s warehouse receiving system; provided, that DISTRIBUTOR shall be given a two percent discount on any invoiced amounts paid within 10 days of receipt and a one percent discount on any invoiced amounts paid within 30 days of receipt. |
| (c) | Communicate to SUPPLIER any material modifications, design changes or improvements respecting the Products suggested by any customer. |
| (d) | Advertise, promote, market, sell and distribute the Products by methods which in DISTRIBUTOR’s judgment are appropriate for the sale of the Products, in accordance with the marketing plan attached hereto as Addendum B . |
| (e) | Provide instructions to DISTRIBUTOR’s customers regarding the use and routine maintenance of the Products. |
| (f) | During the term of this Agreement, DISTRIBUTOR shall procure and maintain insurance, at its sole cost and expense, in accordance with the following: |
| (1) | DISTRIBUTOR shall procure and maintain commercial general liability insurance, providing coverage for bodily injury and property damage and coverage for product and completed operations, personal and advertising injury, and contractual liability in an amount of not less than $1,000,000 per occurrence and $2,000,000 aggregate; |
| (2) | workers’ compensation coverage as required by applicable Laws. |
| 6. | SUPPLIER’s Duties |
SUPPLIER shall:
| (a) | Ship all Products as directed by DISTRIBUTOR in accordance with the following: |
| (1) | All Products shipped by SUPPLIER shall be shipped FOB Ex-Works to DISTRIBUTOR’s designated location(s) within the Territory via DISTRIBUTOR’s specified carriers (DISTRIBUTOR shall enter into and bear the costs relating to the contract of carriage). in accordance with DISTRIBUTOR’s most recently published routing guides and Global Logistics Delivery Requirements. |
Page 4 of 23
| (2) | For all shipments, any applicable UPS (or any successor or alternative shipper utilized by DISTRIBUTOR) accessorial charges shall be borne by the DISTRIBUTOR. |
| (3) | Title of all Products and risk of loss will pass to DISTRIBUTOR upon SUPPLIER’s delivery of such Products to the carrier. Proof of delivery will be required upon DISTRIBUTOR’s request. |
| (4) | Any deviation from the delivery terms of this Section 6(a) must be agreed upon in writing by authorized representatives of both SUPPLIER’s and DISTRIBUTOR’s Transportation Departments, respectively, prior to shipment. Failure by SUPPLIER to comply with DISTRIBUTOR’s most recently published routing guides and Global Logistics Delivery Requirements may result in freight, handling and administrative chargebacks. |
| (5) | For all export shipments, cross border shipments, and shipments to Puerto Rico, SUPPLIER shall furnish a Shippers Export Declaration, commercial invoice, and Product HTS number to DISTRIBUTOR. |
| (6) | SUPPLIER will drop ship directly to DISTRIBUTOR’s customers as requested by DISTRIBUTOR within 45 days of date of accepted written order (unless different terms are expressly agreed upon in the acceptance of any such order), at no incremental expense to DISTRIBUTOR. Any Product shipped directly by SUPPLIER to any customer at DISTRIBUTOR’s request shall have a minimum of 85% remaining shelf life, if applicable. |
| (b) | Pack, package, mark and otherwise prepare all Products for shipment in accordance with the standards of the International Safe Transit Association and good commercial practice, acceptable to common carriers for shipment, and adequate to insure their safe arrival at the ultimate destination. SUPPLIER shall mark all containers with necessary lifting, handling and shipping information, purchase order number, date of shipment and the names of SUPPLIER and DISTRIBUTOR. |
Page 5 of 23
| (c) | Promptly furnish to DISTRIBUTOR, when reasonably requested from time to time, at SUPPLIER’s cost, reasonable quantities of original factory outer cartons and packaging materials. |
| (d) | Submit invoices to DISTRIBUTOR via electronic data interchange or other method of electronic commerce with each shipment of Products which shall include: purchase order numbers, Product numbers, descriptions of Products, quantities, unit price and complete billing address for the Products so delivered. |
| (e) | Promptly resolve billing disputes with DISTRIBUTOR and provide DISTRIBUTOR with such information or assistance as DISTRIBUTOR may reasonably require to resolve billing disputes with its customers or freight claims with carriers. |
| (f) | Promptly refer to DISTRIBUTOR any inquiries or orders SUPPLIER may receive respecting the promotion, sale, marketing or distribution of the Products in the Territory which are reasonably identifiable as having been generated by DISTRIBUTOR’s advertising or sales promotion efforts. |
| (g) | During the term of this Agreement, procure and maintain insurance, at its sole cost and expense, in accordance with the following: |
| (1) | SUPPLIER shall procure and maintain: |
| (i) | commercial general liability insurance, providing coverage for bodily injury and property damage and coverage for product and completed operations, personal and advertising injury, and contractual liability in an amount of not less than $1,000,000 per occurrence and $2,000,000 aggregate; |
| (ii) | automobile liability coverage for bodily injury and property damage for all SUPPLIER vehicles operated on premises owned or leased by DISTRIBUTOR or its subsidiary or other affiliated or related companies with minimum combined single limits of $2,000,000 protecting DISTRIBUTOR from claims for personal injury (including bodily injury and death) and property damage which may arise from or in connection with SUPPLIER’s, or its officers, directors, employees, agents or subcontractors performance hereunder; and |
| (iii) | workers’ compensation coverage as required by applicable Laws. |
| (2) | If the SUPPLIER is providing services to the DISTRIBUTOR, or as may otherwise be required at the sole discretion of the |
Page 6 of 23
| DISTRIBUTOR, SUPPLIER shall also procure and maintain professional liability, errors and omissions insurance or similar coverage providing coverage in an amount of not less than $1,000,000 per occurrence and $2,000,000 aggregate for bodily injury and property damage for errors and omissions pertaining to any and all services provided to DISTRIBUTOR. |
| (3) | Each of the foregoing policies of insurance shall name DISTRIBUTOR, its officers, officials, agents and employees as an additional insured or loss payee thereunder. |
| (4) | DISTRIBUTOR shall be covered to the full limits of liability purchased by SUPPLIER, even if those limits of liability are in excess of those required by this Agreement. SUPPLIER’s insurance shall be the primary and non-contributing to any insurance procured by DISTRIBUTOR. Coverage(s) shall not be suspended, voided, canceled, or reduced in coverage or in limits except after 30 days prior written notice has been given directly to DISTRIBUTOR. |
| (5) | SUPPLIER shall furnish DISTRIBUTOR proof of coverage evidenced by certificates of insurance reasonably acceptable to DISTRIBUTOR. DISTRIBUTOR reserves the right to require complete, certified copies of all insurance policies required by this Agreement at any time. Failure to maintain the insurance policies as required by this Agreement, or to provide evidence of renewal, is a material breach of this Agreement. |
| (6) | SUPPLIER shall maintain insurance with duly licensed or approved non-admitted insurers in with an “A.M. Best” rating of not less than “A-”. |
| (7) | SUPPLIER shall furnish to DISTRIBUTOR on or before the Effective Date a certificate of insurance evidencing the foregoing endorsements, coverages and limits. |
| (h) | Timely furnish DISTRIBUTOR, at SUPPLIER’s cost, with material safety data sheets and any other documentation reasonably necessary to enable DISTRIBUTOR to comply with all then prevailing applicable federal, state, municipal, local, and other laws and regulations (collectively, “Laws”) relating to the Products, reasonable quantities of SUPPLIER’s sales literature in compliance with DISTRIBUTOR’s Marketing Guidelines, product insert sheets and customer instruction manuals and catalogs for each Product, and, upon request, suitable copy and photographs for use by DISTRIBUTOR in advertising and cataloging. |
Page 7 of 23
| (i) | Cooperate with DISTRIBUTOR for DISTRIBUTOR created SUPPLIER literature and catalog modules by completing DISTRIBUTOR artwork approval forms upon request in a timely manner. |
| (j) | For each Product sold to DISTRIBUTOR, provide DISTRIBUTOR with a current and accurate Certificate of Origin pursuant to Article 504 of the North American Free Trade Agreement NAFTA in the format set forth at www.vwr.com. DISTRIBUTOR shall have the right to refuse to export Products within the NAFTA region and/or may withhold payment for Products until SUPPLIER complies with all its obligations hereunder. |
| (k) | Comply (or cause compliance) in all material respects with all applicable Laws. |
| (l) | Immediately notify DISTRIBUTOR in writing upon becoming aware of holds or recalls with respect to any Product(s), or any defect or condition (actual or alleged) which in any way may alter the specifications or quality of any Products, render any Products in violation of any Laws including, without limitation, the Federal Food, Drug and Cosmetic Act, as amended from time to time, or the regulations issued thereunder (the “Act”) or as applicable, the Food and Drugs Act (Canada) (the “Canadian Act”), cause revocation of any regulatory approval with respect to any Products or their sale, give rise to a claim against DISTRIBUTOR by any third party, or otherwise negatively affect the salability of any Products (a “Notification Letter”). A Notification Letter shall include catalog and lot/serial numbers(s) of such Product(s), and in the event of a corrective action or recall, shall contain a description of the issue(s) and the corrective action(s), as mailed to all customers that purchased the Product(s) subject to such corrective action or recall. DISTRIBUTOR shall review the information mailed to customers by SUPPLIER to determine if the information is adequate for the purpose of notifying DISTRIBUTOR’s customers. SUPPLIER shall promptly reimburse DISTRIBUTOR for the full price paid for any Products returned to DISTRIBUTOR by a customer, or to SUPPLIER by DISTRIBUTOR, and any costs due to a corrective action or recall, including, but not limited to, the replacement, repair, modification, adjustment, relabeling, destruction, or disposal of any such Product. All Products subject to corrective action or recall shall be sent directly from DISTRIBUTOR’s customers to SUPPLIER. |
| (m) | Assist DISTRIBUTOR’s promotion activities including, without limitation, having SUPPLIER’s personnel accompany DISTRIBUTOR’s sales personnel on sales presentations at such times, at such places and with expenses allocated as may be agreed upon from time to time by DISTRIBUTOR and SUPPLIER. SUPPLIER’s assistance shall focus particularly on promoting the technical features, capabilities and benefits of the Products. SUPPLIER shall also provide DISTRIBUTOR’s |
Page 8 of 23
| customers from time to time with reasonable quantities of sample Products at no charge, and make demonstration Products owned by SUPPLIER available from time to time for demonstrations at the facilities of DISTRIBUTOR’s customers. |
| (n) | Develop and conduct training programs for DISTRIBUTOR’s employees with respect to the Products at such times and places as may be agreed upon from time to time by DISTRIBUTOR and SUPPLIER. |
| (o) | Make any claims for unpaid invoices in writing within one year of the date Products are shipped by SUPPLIER. DISTRIBUTOR shall not be obligated to make payments for, or investigate, claims arising more than one year prior to SUPPLIER’s written claim or request for investigation. |
| (p) | SUPPLIER shall keep and maintain accurate records, books of account, reports and other data (collectively, “Records”) related to SUPPLIER’s sales of Products to DISTRIBUTOR or otherwise necessary for DISTRIBUTOR to verify SUPPLIER’s compliance with this Agreement. SUPPLIER shall make such Records reasonably available to DISTRIBUTOR or its representative, under appropriate confidentiality provisions, to enable DISTRIBUTOR to verify SUPPLIER’s compliance with this Agreement. SUPPLIER shall maintain such Records for not less than three years or such longer period as required by law. |
| (q) | Issue return goods authorizations without any restocking charges for Products purchased by DISTRIBUTOR as part of DISTRIBUTOR’s initial stocking order, if such Products remain unsold by DISTRIBUTOR after a period of twelve months from the date of SUPPLIER’s invoice therefor. |
| (r) | Issue return goods authorizations, in an amount up to one percent of DISTRIBUTOR’s annual purchases, without any restocking charges for Products purchased by DISTRIBUTOR. For the sake of clarity, this amount is in addition to any returns pursuant to Section 6(q). |
| (s) | Notify DISTRIBUTOR, in writing, no less than 60 days prior to cancellation or renewal, whenever SUPPLIER reduces DISTRIBUTOR’s margin percent on Special Price Quotation (SPQ’s) renewals or replacements. In all instances, SPQ’s shall remain in place and unchanged for a period of at least 12 months. In the event that any of the terms contained in this Agreement conflict with any of the terms contained in any SPQ’s, the terms of this Agreement shall govern. |
| (t) | Notify DISTRIBUTOR, in writing, no less than six months before discontinuing any Product. DISTRIBUTOR will communicate to SUPPLIER the quantity of discontinued Products on hand at the time of notification and will use commercially reasonable efforts during the six |
Page 9 of 23
| month period to sell such discontinued Products. At the end of the six month period, SUPPLIER will issue return goods authorization without restocking charges for any remaining inventory of the discontinued Products. SUPPLIER will also pay all freight charges for the return of any such discontinued Products. |
| (u) | Notify DISTRIBUTOR in writing no less than six months before making any material change to any Product or to the process for manufacturing any Product. A material change shall mean any change that may affect the form, fit, function, reliability, stability, product labeling, appearance or interchangeability of any Products or components thereof. |
| (v) | Not, during the term of this Agreement and for a period of three years after termination of this Agreement (for any reason), directly or indirectly: |
| (1) | solicit, entice or induce any client, customer, distributor or sub-distributor of DISTRIBUTOR to cease doing business with DISTRIBUTOR; or |
| (2) | without DISTRIBUTOR’s prior consent, solicit, recruit or hire any employee (or any person that was an employee of DISTRIBUTOR within the previous 12 month period), independent contractor or consultant of DISTRIBUTOR or engage in any activity that would cause any such person or entity to terminate his, her or its relationship with DISTRIBUTOR or violate any agreement with DISTRIBUTOR. |
| (w) | Notify DISTRIBUTOR in writing at least six months before the interruption of the supply of any Product where the SUPPLIER is temporarily unable to deliver the Product to DISTRIBUTOR. |
| (x) | And hereby does, represent and warrant to DISTRIBUTOR that: |
| (1) | it is authorized to enter into this Agreement and that in so doing it is not in violation of any Law or any terms or conditions of any contract or other agreement to which it may be a party; |
| (2) | it is entitled to grant the license provided by Section 8(c); and |
| (3) | neither the license granted in Section 8(c), nor the purchase, sale, distribution or use of any Product, shall violate any patent, trade name, trade dress, trademark, service mark, copyright, or other proprietary rights of any third party. |
Page 10 of 23
| 7. | Force Majeure |
| (a) | If either party is prevented from performing its obligations under this Agreement solely by circumstances beyond the reasonable control and without the fault or negligence of the party obligated to perform (including, without limitation, strikes or other labor difficulties (except those involving either party), war, shortages of power or raw material, Laws or acts of God), upon the prompt giving of notice to the other party detailing such force majeure event and its anticipated duration, the obligations of the party so prevented shall be excused during such period of delay, and such party shall take whatever reasonable steps are necessary to relieve the effect of such cause as rapidly as possible. The party invoking a force majeure event shall notify the other party promptly upon the termination of such event. |
| (b) | During the period that the performance by one of the parties of its obligations under this Agreement has been suspended by reason of a force majeure event, the other party may likewise suspend the performance of all or part of its obligations hereunder to the extent that such suspension is commercially reasonable. |
| 8. | Proprietary Rights |
| (a) | Patents and Infringement |
SUPPLIER shall: (1) prosecute diligently each application for United States and Canadian patent which is now or hereafter pending covering any of the Products and on issuance diligently prosecute each infringer thereof; and (2) repurchase from DISTRIBUTOR, at a price equal to the full purchase price paid by DISTRIBUTOR, any Products in DISTRIBUTOR’s inventory which DISTRIBUTOR reasonably believes it should not or cannot sell, based on an opinion of DISTRIBUTOR’s counsel that future sales by DISTRIBUTOR may result in a claim of patent, trade name, trade dress, trademark, service mark or copyright infringement, or violation of any other proprietary right, or because of a decision, whether interlocutory or final, rendered in an action alleging any such infringement or violation.
| (b) | Ownership of Proprietary Rights |
| (1) | SUPPLIER recognizes that DISTRIBUTOR is the owner of certain brand names, trademarks, trade names, logos and other intellectual property, including the VWR Marks, connoting DISTRIBUTOR which are proprietary to DISTRIBUTOR and which DISTRIBUTOR may elect to use in the promotion, marketing, sale and distribution of the Products, and that SUPPLIER has no right or interest in or to any of such intellectual property. |
Page 11 of 23
| (2) | Except as otherwise contemplated by this Agreement, neither SUPPLIER nor DISTRIBUTOR, shall, without the prior written consent of the other party, use any of such other party’s brand names, trademarks, trade names or logos, or adopt, use or register any words, phrases or symbols so nearly resembling any of such other party’s brand names, trademarks, trade names or logos as to be likely to lead to confusion or uncertainty, or to impair or infringe the same in any manner, or otherwise imply any endorsement by one party of the other party or its products or services. |
| (c) | License |
SUPPLIER hereby grants to DISTRIBUTOR a royalty-free, irrevocable (during the term of this Agreement) and paid-up right and license to use SUPPLIER’s manuals, logos, copyrighted information, brand names, trademarks and trade names on, and in the promotion, marketing, sale and distribution of, the Products during the term of this Agreement within the Territory, it being expressly understood that DISTRIBUTOR shall discontinue, in a commercially reasonable time, the use thereof upon depletion of DISTRIBUTOR’s inventory of the Products following any expiration or termination of this Agreement. SUPPLIER shall use reasonable commercial efforts to register such brand names, trademarks, trade names and logos where reasonably necessary or useful to the successful distribution of the Products.
| 9. | Product Warranties |
| (a) | As a condition of this Agreement, SUPPLIER specifically represents and warrants to DISTRIBUTOR that all Products shipped by SUPPLIER to or on the order of DISTRIBUTOR, its subsidiaries, affiliates, divisions, subdistributors, agents, representatives or customers, and all goods used or embodied in such Products, as of the date of such shipment: |
| (1) | Shall be free from defects in design, operation, workmanship and materials, conform in all respects with all labeling and product insert sheets and other product specifications and claims made by SUPPLIER for them and shall be produced consistently with good manufacturing practices and good quality control practices. |
| (2) | Shall be transferred with good and marketable title, free and clear of any liens or encumbrances. |
| (3) | Except as otherwise agreed, shall have at least 12 months of shelf-life remaining following the date of delivery. |
Page 12 of 23
| (4) | Shall not infringe upon any patent, trade name, trade dress, trademark, service mark, copyright, or other proprietary rights of third parties. |
| (5) | Shall have been manufactured, packaged, and labeled and priced and shall be sold in compliance with all Laws, including without limitation, and as applicable, the W.H.M.I.S., Workplace Safety and Insurance Act, 1997 (Ontario) and the Transportation of Dangerous Goods Act, 1992 (Canada), as amended from time to time. |
| (6) | Are not adulterated or misbranded within the meaning of the Act, or the Canadian Act, as applicable, or any applicable Law, and are not articles which may not, under the provisions of section 404, 505, or 512 of the Act, be introduced into interstate commerce. |
| (7) | To the extent such Products are subject to the Hazardous Products Act (Canada), as amended from time to time, and regulations thereunder, have reasonably and representatively been tested as prescribed by the Consumer Product Safety Bureau (CPSB) within Health Canada to ensure conformity, at the time of shipment, to the flammability standards in effect under the Hazardous Products Act, as amended from time to time, any applicable codes of the National Fire Code of Canada, and any other Laws relating to flammable substances. |
| (8) | Comply with all import and export laws, and comply with all government laws and regulations in the Territory that apply or are related to such Products. |
| (b) | SUPPLIER authorizes DISTRIBUTOR to pass through all warranties to DISTRIBUTOR’s customers, as well as DISTRIBUTOR’s rights to indemnification in Section 10(a)(1). |
| (c) | SUPPLIER shall promptly replace, at no cost to DISTRIBUTOR, any Product that is, or that a customer returns to DISTRIBUTOR as, defective or non-conforming, with a non-defective or conforming Product (as applicable) or, at DISTRIBUTOR’s option, credit DISTRIBUTOR’s account for all amounts paid with respect to such Product. SUPPLIER shall pay all taxes, transportation and other costs and expenses incurred by DISTRIBUTOR in the replacement of any defective or non-conforming Product. |
Page 13 of 23
| 10. | Indemnification by SUPPLIER |
| (a) | Indemnification |
| (1) | SUPPLIER shall indemnify, defend, and hold harmless DISTRIBUTOR, each of its subsidiaries, affiliates, divisions and subdistributors, and its and their respective agents, directors, officers, employees and representatives, and its and their respective successors and assigns (each, a “DISTRIBUTOR Indemnified Party”) from and against, and in respect of, any and all actions, proceedings, claims, suits, judgments, damages, liabilities, losses, penalties, costs and expenses (including, without limitation, attorneys’ fees) of every kind whatsoever (collectively, “Damages”) arising in any manner out of or from, or in connection with any actual or alleged (i) breach by SUPPLIER of any term or provision of this Agreement, including, without limitation, any breach or violation of any representation, warranty, or covenant of SUPPLIER, as well as any non-performance of any obligations hereunder, (ii) use or operation of the Products, including, without limitation, any Damages involving personal injury, death or property damage based on any theory, including strict liability theories, or warranty claim, defect or nonconformity as to any Product, and (iii) wrongful or negligent act or omission by SUPPLIER or its officers, directors, stockholders, agents, servants, employees, representatives or subcontractors relating to the purchase and sale of Products pursuant to this Agreement; provided, that this Section 10(a)(1) shall not obligate SUPPLIER to indemnify any DISTRIBUTOR Indemnified Party for any portion of Damages that DISTRIBUTOR is required to indemnify the SUPPLIER Indemnified Parties for such Damages pursuant to Section 10(a)(2). |
| (2) | DISTRIBUTOR shall indemnify, defend, and hold harmless SUPPLIER, each of its subsidiaries, affiliates, and divisions, and its and their respective agents, directors, officers, employees and representatives, and its and their respective successors and assigns (each, a “SUPPLIER Indemnified Party” and together with the DISTRIBUTOR Indemnified Parties, the “Indemnified Parties”) from and against, and in respect of, any and all Damages arising in any manner out of or from, or in connection with any actual or alleged (i) breach by DISTRIBUTOR of any term or provision of this Agreement, including, without limitation, any breach or violation of any representation, warranty, or covenant of DISTRIBUTOR, as well as any non-performance of any obligations hereunder, and (ii) wrongful or negligent act or omission by DISTRIBUTOR or its officers, directors, shareholders, agents, servants, employees, representatives or subcontractors relating to the purchase and sale of Products pursuant to this Agreement; provided, that this Section 10(a)(2) shall not obligate DISTRIBUTOR to indemnify any SUPPLIER Indemnified Party for any portion of Damages that SUPPLIER is required to indemnify the DISTRIBUTOR Indemnified Parties for such Damages pursuant to Section 10(a)(1). |
Page 14 of 23
| (b) | Procedure |
Each Indemnified Party shall notify the party responsible for providing indemnification (as the case may be, the “Indemnifying Party”) of any third party claim for which such Indemnified Party seeks indemnification under this Agreement; provided, that the failure to deliver such notice shall not affect the Indemnifying Party’s obligations under this Section 10 except to the extent that the Indemnifying Party is adversely affected thereby. The Indemnifying Party may, but is not obligated to, assume the defense of any claim to which this Section 10 relates or may relate, and may appoint legal counsel responsible for such defense; provided, that if the Indemnifying Party chooses to assume such defense (w) the Indemnifying Party agrees that the Indemnified Party shall be entitled to recover from the Indemnifying Party all Damages arising out of such third party claim, (x) any Indemnified Party may, at its own expense, select its own counsel to represent it, (y), the Indemnifying Party may not settle any such claim against an Indemnified Party without the prior written consent of such Indemnified Party, and (z) the Indemnifying Party shall keep the Indemnified Party promptly informed of all developments in the defense of the action. If the Indemnifying Party elects not to assume such defense, such Indemnified Party may elect to do so and the Indemnifying Party shall pay all costs and expenses of counsel selected by such Indemnified Party in connection with such defense. Any legal counsel appointed by the Indemnifying Party to defend such a claim shall be experienced in the type of litigation involved and shall be reasonably satisfactory to the Indemnified Party. The Indemnifying Party and each Indemnified Party shall cooperate fully in connection with all matters related to the defense of any such claim.
| 11. | Confidentiality |
| (a) | Information |
During the term of this Agreement, each party may have or may be provided access to the other party’s confidential information and materials (including, without limitation, technical information, marketing, sales, the terms and conditions of this Agreement and new product development information). All such information which, if in written or other tangible form, is clearly designated as “confidential” or, if disclosed orally, is designated as “confidential” in a written memorandum delivered by the party disclosing the confidential information (the “Disclosing Party”) to the party receiving the confidential information (the “Receiving Party”)
Page 15 of 23
promptly following such oral disclosure, shall be retained in confidence in accordance with the terms of this Agreement and any applicable separate nondisclosure agreement between SUPPLIER and DISTRIBUTOR. Further, the Receiving Party shall not (except as expressly authorized herein during the term of this Agreement), either during the term of this Agreement or for three years after its termination or expiration, use, publish or disclose or cause or permit anyone else to use, publish or disclose any such information unless (i) such information was known to the Receiving Party at the time of receipt thereof from the Disclosing Party as evidenced by written documentation, (ii) such information becomes publicly available through no fault of the Receiving Party, or (iii) such information was lawfully obtained by the Receiving Party from any third party without violation of this Agreement. Nothing in this Section shall prevent a Receiving Party from disclosing confidential information of the Disclosing Party pursuant to a request of any court, government or governmental agency or as required by applicable Law; provided, however, that the Receiving Party shall give the Disclosing Party prompt notice of the required disclosure, and shall provide the Disclosing Party with reasonable assistance to the extent the Disclosing Party seeks a protective order or other means to preserve the confidentiality of the information required to be disclosed.
| (b) | Termination |
Upon termination or expiration of this Agreement, each party shall either return or destroy all copies of any confidential information of the other party described in Section 11(a) in such first party’s possession or control, and certify in writing that all copies of such information have been returned or destroyed.
| 12. | Termination |
| (a) | Either party shall have the right to terminate this Agreement, effective immediately upon notice and without prejudice to any of its other rights or remedies, if the other party: |
| (1) | Bankruptcy or Insolvency |
Becomes insolvent, bankrupt or shall generally fail to pay its debts as such debts become due; admits in writing its inability to pay its debts; has a receiver or trustee or other similar official appointed by any court, governmental or public authority or agency having jurisdiction for it or its property; makes an assignment for the benefit of its creditors; has commenced by, for or against it any proceedings under any Law related to bankruptcy, insolvency or the reorganization or the release of debtors; or becomes liquidated or dissolved.
Page 16 of 23
| (2) | Force Majeure |
Is affected by a force majeure event which continues for more than six (6) consecutive months.
| (3) | Default or Breach |
Defaults or is in breach of any material term or provision of this Agreement, and fails (i) within ten days following delivery by the terminating party of a notice specifying such default or breach, to notify the terminating party that such default or breach has been cured or shall be cured within 30 days following delivery of such notice, or (ii) within 30 days following delivery by the terminating party of such notice, to remedy such default or breach to the terminating party’s reasonable satisfaction.
| (b) | Termination for Convenience |
DISTRIBUTOR may terminate this Agreement at any time with or without cause and without liability, upon 180 days written notice to SUPPLIER.
| 13. | Procedures on Termination or Expiration |
| (a) | Windup |
For a period of 60 days following the effective date of termination of this Agreement by DISTRIBUTOR, SUPPLIER shall continue to honor DISTRIBUTOR’s orders for Products, and DISTRIBUTOR shall pay for the Products on the terms and conditions of this Agreement.
| (b) | Repurchase of Inventory |
Within 60 days after the effective date of termination or expiration of this Agreement for any reason, upon written request from DISTRIBUTOR, SUPPLIER shall repurchase DISTRIBUTOR’s inventory of the Products, at the full price paid by DISTRIBUTOR therefor.
| (c) | Survival |
The provisions of Sections, 5(b), 6(a)(4), 6(e), 6(g), 6(j), 6(k), 6(n), 6(o), 8, 9, 10, 11 and this 13 shall remain in full force and effect following the termination or expiration of this Agreement.
Page 17 of 23
| 14. | Miscellaneous |
| (a) | Notices |
All notices required by this Agreement shall be in writing, and shall be effective on receipt if delivered personally, on the first business day following the date of mailing if sent by a nationally recognized courier guaranteeing next day delivery, or on the third business day following the date of mailing if sent by certified mail, postage prepaid, addressed as follows (or to such other addresses as may be designated by similar notice from time to time delivered to the other party):
If to SUPPLIER, to:
AutovaxID Inc.
1701 Macklind Avenue
St. Louis, MO 63110
Attention: Steven Arikian, M.D. CEO
With a copy to:
324 S. Hyde Park Avenue, Suite 350
Tampa FL 33606
Attention: Legal Department
If to DISTRIBUTOR, to:
VWR International, Inc.
1310 Goshen Parkway
West Chester, PA 19380
Attention: General Counsel
| (b) | US Government Procurement Regulations |
If the Products to be furnished by SUPPLIER are to be used in the performance of a U.S. government contract or subcontract, those clauses of the applicable U.S. Government procurement regulation which are required by Federal Statute to be included in U.S. Government subcontracts shall be incorporated herein by reference including, without limitation, the Fair Labor Standards Act of 1938, as amended.
| (c) | Merger, Modification and Waiver |
This Agreement and the attached Addendum, as well as DISTRIBUTOR’s most recently published routing guides and Global Logistics Delivery Requirements constitute the entire agreement between the parties with respect to the subject matter hereof and supersede all prior agreements
Page 18 of 23
and understandings, oral and written among the parties with respect to the subject matter hereof. No amendment, modification or waiver 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 and, in the case of a waiver, shall be effective only in the specific instance, and for the specific purpose for which given, and shall not be construed as a waiver of any subsequent breach. The failure of either party to enforce at any time or for any period of time any of the provisions of this Agreement shall not be construed as a waiver of such provisions or of the right of such party thereafter to enforce each and every such provision.
| (d) | Construction and Interpretation |
The captions in this Agreement have been inserted for convenience of reference only and do not constitute a part of, and shall not be considered in construing, this Agreement. If any portion of this Agreement is held by a court of competent jurisdiction to be invalid for any reason, the remainder of this Agreement shall not be deemed invalid but shall remain in full force and effect. No course of dealing, usage of trade or course of performance shall supplement, explain or amend any term, condition or instruction of this Agreement, or any shipment of Products hereunder.
| (e) | Applicable Law and Venue |
This Agreement is made pursuant to, and shall be construed and enforced exclusively in accordance with, the internal laws of the Commonwealth of Pennsylvania (and United States federal law, to the extent applicable), without giving effect to otherwise applicable principles of conflicts of law. The United Nations Convention on Contracts for the International Sales of Goods expressly shall not apply.
| (f) | Assignment |
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns and designees. Neither party may transfer, assign or delegate its rights or obligations under this Agreement or any portion thereof without the prior written consent of the other party, except for any transfer, assignment or delegation, in whole or in part, to its respective parent, subsidiaries or other affiliates, or to a successor entity.
| (g) | VWR Affiliates |
Any Affiliate of DISTRIBUTOR may participate in this Agreement to the same extent as DISTRIBUTOR, and, without limiting the generality of the foregoing, shall have the right to purchase Products directly from
Page 19 of 23
SUPPLIER pursuant to Section 5 and to promote, market, sell and distribute Products pursuant to Section 2. For the purposes of this Agreement an Affiliate of DISTRIBUTOR shall mean any entity which is directly or indirectly controlled by DISTRIBUTOR; DISTRIBUTOR shall be deemed to control another entity if DISTRIBUTOR has the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting equity, by contract or otherwise, including, but not limited to, ownership of at least thirty percent (30%) of the outstanding voting equity of such entity.
| (h) | Nature of Relationship |
Neither party, its agents or employees shall, under any circumstances, be considered to be an agent, partner, joint venturer or representative of the other party, or anything other than an independent contractor for all purposes of this Agreement, and except as may be authorized specifically in writing, neither party has express or implied authority to bind the other in any manner whatsoever by virtue of this Agreement.
| (i) | Counterparts |
For convenience of the parties, this Agreement may be executed in one or more counterparts, each of which shall be deemed an original for all purposes. A facsimile or photocopied signature shall be deemed to be the functional equivalent of an original for all purposes.
| (j) | Severability |
If any term or provision of this Agreement, or the application thereof to any person or circumstance, shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or application to other persons or circumstances, shall not be affected thereby, and each term and provision of this Agreement shall be enforced to the fullest extent permitted by Law.
| (k) | Equitable Remedies |
The parties hereto agree that irreparable harm would occur in the event that any of the agreements and provisions of Section 2 (Grant of Non-Exclusive Distribution) or Section 11 (Confidentiality) were not performed fully by the parties hereto in accordance with their specific terms or conditions or were otherwise breached, and that money damages are an inadequate remedy for breach of such Sections because of the difficulty of ascertaining and quantifying the amount of damage that will be suffered by the parties hereto in the event that those Sections are not performed in accordance with their terms or conditions or are otherwise breached. It is accordingly hereby agreed that the parties hereto shall be entitled to an
Page 20 of 23
injunction or injunctions to restrain, enjoin and prevent breaches of Section 2 (Grant of Non-Exclusive Distribution) and Section 11 (Confidentiality) by the other parties and to enforce specifically such terms and provisions provided in such Sections, such remedy being in addition to and not in lieu of, any other rights and remedies to which the other parties are entitled to at law or in equity.
| (l) | Release of Information |
Without the prior written consent of the other party, neither party shall disclose to any third person the existence or purpose of this Agreement, its terms or conditions, or the fact that discussions are taking place and that Confidential Information is being shared, except as may be required by Law or court order and then only after first notifying in writing the other party of such required disclosure.
[Signature Page Follows]
Page 21 of 23
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.
| [SUPPLIER] | ||
| By: | /s/ Steven Arikian | |
| Authorized Officer | ||
| Name: | Steven Arikian, M.D. | |
| Title: | Chairman & CEO | |
| VWR INTERNATIONAL, INC. | ||
| By: | /s/ Kevin Leak | |
| Authorized Officer | ||
| Name: | Kevin Leak | |
| Title: | SVP-Category Management | |
Page 22 of 23
Addendum A
Product Listing
AutovaxID™ Products and Services
US Ordering Information, 2007
5/16/2007
| Part Number | Description | Price, USD | VWR | ||||
| Instrument | 25 | % | |||||
| 600285-120 | AutovaxID™ Automated Cell Culture System | 39,950.00 | 29,962.50 | ||||
| Includes instrument, barcode scanner, power cord, gas connection fittings, and refrigerator rack for factor bags. | |||||||
| Flowpath Options | 25 | % | |||||
| 600290-211 | AutovaxID Flowpath with one 1.1m2 bioreactor | 3,450.00 | 2,587.50 | ||||
| 600290-221 | AutovaxID Flowpath with one 2.1m2 bioreactor | 3,500.00 | 2,625.00 | ||||
| Optional Disposables | 25 | % | |||||
| 600017-000 | 10 L Glass Media Bottle (package of four) | 1,608.00 | 1,206.00 | ||||
| 600022-000 | Cap Assembly, Fluid Delivery, for 10 L Media Bottle (package of four) | 243.00 | 182.25 | ||||
| 600023-000 | Cap Assembly, Fluid Collection, for all Media Bottles (package of four) | 243.00 | 182.25 | ||||
| 600063-000 | Sterile In-line Media Filters, mid-volume (four each, one per sterile pack) | 406.00 | 304.50 | ||||
| 600063-001 | Sterile In-line Media Filters, high-volume (four each, one per sterile pack) | 879.00 | 659.25 | ||||
| 600100-072 | 1/16” Sterile Tubing Extension, recommend 5 per AutovaxID flowpath | 47.00 | 35.25 | ||||
| 600101-072 | 1/8” Sterile Tubing Extension, recommend 1 per AutovaxID flowpath | 59.00 | 44.25 | ||||
| 600294-000 | Supernatant Sterile Tubing Extension, recommend 1 per AutovaxID flowpath | 45.00 | 33.75 | ||||
| UHGW00026 | 20L Bag, ICS (basal medium) feed or spent medium collection. Quantity of six. Single-use to eliminate cleaning requirements. | 109.00 | 81.75 | ||||
| 600288-000 | AutovaxID Factor Bag Set. Spare Set. | 710.00 | 532.50 | ||||
| Optional Services | 25 | % | |||||
| 500077-000 | AutovaxID installation and initial operator training (1 day on site.) | 3,500.00 | 2,625.00 | ||||
| 500078-000 | In house operator training (3 days on site, training for up to 4 persons) | 4,500.00 | 3,375.00 | ||||
| 500074-000 | Installation Qualification and Operational Qualification | 6,600.00 | 4,950.00 | ||||
| 500073-000 | Full Service Contract | 8,000.00 | 6,000.00 | ||||
| Full Service Contract: One-year coverage for one AutovaxID for workmanship and materials of the instrument during normal use. Includes repair or replacement of defective parts at Biovest’s discretion. Labor is included if installation of repaired/replaced part is not routine. Includes up to two trips per year per facility for service. Parts shipment costs are not included. If no repair service has been necessary near the end of the contract coverage, one trip may be used for annual calibration. | |||||||
| 500079-000 | Laboratory system demonstration | 13,500.00 | 10,125.00 | ||||
| 30 day AutovaxID run at Minnesota facility. Customer provides media and supplements. | |||||||
Page 23 of 23
Addendum B
VWR Marketing Plan
1. Differentiated Supplier Status: As a differentiated supplier at VWR, Biovest will have the highest possible profile within our organization. Our executive management and sales team is given a higher focus and visibility on the sale of Biovest products, than other non-differentiated suppliers. The number of suppliers in this top tier is limited by VWR.
2. VWR Life Science: The Biovest product range will be part of our “Preferred Supplier” program within the VWR Life Science Category. This program is supported by 31 Life Science Sales Specialists in North America, 3 Sales Directors, 1 Category Manager and 1 Marketing Manager. The Life Science sales team has a higher compensation rate on our “Preferred Suppliers”.
3. Web Site: Preferred placement of Biovest products with supporting literature, application notes and technical information on VWR.com. Biovest products will be given a priority “weighting” during product searches, so that the Biovest products come up first in all related product searches.
4. Publications: VWR will promote AutovaxID products in their publications described in a presentation sent to Biovest on May 16, 2007
5. Sales Conversion Programs: Participation in sales conversion programs at VWR target accounts including Pharma, Biotech, Academic and Medical Research customers.
6. Priority Training and Meeting Participation: Biovest will be invited to participate in all VWR sales meeting (National, regional and local) as well as having the opportunity to provide training to the 450 VWR sales associates and 31 Life Science Specialists in North America.
