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EXHIBIT 10.17
CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS ENCLOSED BY BRACKETS AND UNDERLINED. THE
CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
AMERINET, INC.
GROUP PURCHASING AGREEMENT
Between
AMERINET, INC.
And
SPECIALTY LABORATORIES
("Supplier")
This
Group Purchasing Agreement (the "Agreement") is entered into effective as of the date set forth on the signature page hereof, between AmeriNet, Inc. ("AmeriNet"), and the
Supplier named above ("Supplier").
WHEREAS,
AmeriNet is a Delaware corporation, representing the member Institutions served by its Shareholders (which member institutions are hereinafter referred to as the
"Institutions" or Participating Institutions"); and
WHEREAS,
AmeriNet's Shareholders are Hospital Shared Services, Warrendale, PA; Intermountain ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇; and Vector Healthsystems, Providence, RI. Supplier
acknowledges that any Institution meeting the membership requirements of those Shareholders shall be eligible for AmeriNet programs and pricing, and shall be entitled to place purchase orders under
the terms of this Agreement for the duration of this Agreement; and
WHEREAS,
AmeriNet heretofore delivered its Request for Proposal to Supplier, and Supplier has agreed to the terms of the Request for Proposal and this Agreement; and
WHEREAS,
the philosophy of AmeriNet is to secure Agreements with suppliers that provide to the Participating Institutions products and services which are of optimum quality, at
appropriate pricing and with appropriate service.
NOW,
THEREFORE, Supplier and AmeriNet agree as follows:
- 1.
- The
term of this Agreement is for a term of THIRTY-SIX (36) months, commencing on SEPTEMBER 1, 1998, and ending on AUGUST 31, 2001 (the "Contract Period").
| RESPONSE: |
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AGREED. PLEASE SEE SPECIALTY'S "CONTRACT TERMS AND RESTRICTIONS". |
- 2.
- Execution
of this Agreement shall be construed as a guarantee by the Supplier of its ability to supply any products included within this Agreement to all Participating Institutions
for the duration of the Agreement. Should the Supplier fail to make any delivery within customary time periods, and should such failure cause any Institution purchase in the open market in order to
obtain items not delivered, then the Supplier shall provide reimbursement to said Institution for the difference between contract costs and excess costs occasioned by such open-market purchases.
Multiple delinquencies in delivery by the Supplier may be construed as the Supplier's inability to
meet
the reasonable requirements of AmeriNet's Institutions, and shall constitute a material breach of contract sufficient to cause cancellation of the Agreement by AmeriNet. Such cancellation shall
not relieve the Supplier of any liability for damages resulting.
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SPECIALTY GUARANTEES THE ABILITY TO PERFORM SERVICES INCLUDED WITHIN THIS AGREEMENT. SPECIALTY SHALL NOT BE LIABLE FOR ANY FAILURE TO DELIVER ITS DUTIES UNDER THIS AGREEMENT DUE TO ACTS OF GOD; ACTS, REGULATIONS OR LAWS
OF ANY GOVERNMENT; WAR OR ANY OTHER CONDITION OR CAUSE BEYOND REASONABLE CONTROL. |
- 3.
- If
in AmeriNet's sole judgment, the Supplier is unable to supply Institutions' reasonable requirements for the duration of this agreement, AmeriNet reserves the right at any time,
or from time to time, to select an alternate or additional supplier in order to supplant or supplement Supplier.
- 4.
- If
in AmeriNet's sole judgment, Supplier does not maintain adequate equipment, inventory or personnel to properly service Institutions' requirements, then this Agreement shall be
subject to cancellation by AmeriNet upon thirty (30) days written notice.
- 5.
- AmeriNet
reserves the right to terminate this Agreement on twenty-four (24) hours notice in the event Supplier files for bankruptcy, for reorganization or for protection from its
creditors under federal law or the laws of any state or nation. AmeriNet further reserves the right to cancel this Agreement on twenty-four (24) hours notice in situations where the Supplier transfers
assets in fraud of its creditors and in situations where AmeriNet, in its sole discretion, believes that the Supplier is financially unable to adequately carry out its obligations under this
Agreement.
- 6.
- Attached
as Addendum A to this Agreement is a current AmeriNet membership list. AmeriNet shall further provide the Supplier with any membership additions or deletions on a routine
basis. The Supplier shall guarantee that all the benefits of this Agreement shall be granted to all AmeriNet member Institutions, but only to authorized AmeriNet member Institutions.
- 7.
- The
Supplier, upon receipt from AmeriNet of membership deletions, shall immediately make those deleted Institutions ineligible for contract benefits, and will charge those deleted
Institutions pricing consistent with lesser volume purchases than those represented by the Group (AmeriNet).
- 8.
- Should
the Supplier distribute its products directly to Institutions, rather than through dealers, each Institution shall place its purchase orders directly with the Supplier. It
will be the Supplier's responsibility to obtain payment from Institutions. All disputes and controversies concerning any purchase order, invoice, products, shipments or delivery dates shall be handled
by Supplier on a direct basis with the Institutions. With respect to all products supplied by Suppliers, title shall pass from the Supplier to the Institution at the point of delivery, and if any
sales tax is due, it shall be Supplier's sole responsibility to collect and pay such tax. Supplier shall defend, indemnify and hold harmless AmeriNet against any and all suits, claims and expenses
arising out of any failure to pay sales tax on said purchased products.
- 9.
- Should
the Supplier distribute its products in part or in total through dealers, Supplier shall agree to allow access to these special terms and pricing only to those dealers
approved by AmeriNet.
Furthermore,
Supplier agrees to provide written notification of contract terms and pricing to AmeriNet authorized dealers at least 30 working days prior to their effective date. Supplier shall be
liable for compensation to AmeriNet authorized dealers for any and all costs incurred by the dealer for credit and rebilling, or any cost otherwise incurred by the dealer as a result of Supplier's
failure to comply with this provision.
- 10.
- In
accordance with state and federal mandates, Supplier is expected to furnish to all AmeriNet Institutions, affiliates and participants the most current Material Safety Data Sheet
(MSDS) for any hazardous substance purchased through this Agreement. Failure to comply with this stipulation may subject the Agreement to cancellation.
- 11.
- Supplier
shall present to Institutions a packing slip or invoice copy upon delivery of products. Information to be contained on these documents shall include, but not be limited to:
purchase order number, date of shipment, description of products and quantities shipped.
- 12.
- Supplier
shall furnish only those brands specified in this Agreement or in subsequent contract addenda and shall not be allowed to furnish alternate or substitute brands to any
Institution without receiving the prior approval of said Institutions.
- 13.
- All
products furnished by Supplier shall be packaged and labeled in accordance with good manufacturing practices and shall be shipped in containers that conform to all shipping
regulations. No product which has been repackaged from original containers or which has been relabeled or which contains any effacement reducing its value shall be acceptable without the express prior
consent of the Institutions.
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AGREED. PLEASE SEE SPECIALTY'S "SHIPPING INSTRUCTIONS". |
- 14.
- Supplier
shall provide for the reporting of all contract sales, by Participating Institution, to AmeriNet on a monthly basis unless other arrangements are specified in this
Agreement.
In
addition, Supplier shall be required to submit an administrative fee equal to [***]* of all gross sales realized under this Agreement to AmeriNet.
- *
- PORTIONS
OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Supplier
shall include the following information when submitting administrative fees and contract activity reports:
I. Administrative
Fees:
- A.
- Checks
are to be made payable to "AmeriNet Inc." And NOT to a division or person's name.
- B.
- Check
stubs must include AmeriNet's contract number and period for which administrative fees are being paid, i.e. 1/1/99 - 1/31/99. If a payment is being made on behalf of Supplier
by a parent corporation, the contract Supplier's name should be identified on the face of the check stub.
- B.
- Reporting
period must be identified, i.e. 1/1/99 - 1/31/99.
- C.
- Total
product sales volume (not line item detail) must be identified for each member Institution, along with the Institution's name, address and zip code (Note: Zip code is
mandatory information). Each Institution's HIN number may be substituted for name, address and zip code.
- D.
- At
the end of all reports, total sales volume of all member Institutions must be included.
- E.
- Reports
may be submitted in printed form, but submission via electronic media such as magnetic tape or diskette is preferred. Please refer to the enclosed specification sheet
(Addendum C) for details.
All
Supplier reports and administrative fee payments are due at AmeriNet within 30 days of the close of the reporting period. A quick-payment discount of 1% of the net AmeriNet
payment due will be allowed for all checks and reports received within fifteen (15) days of the close of the reporting period. A late payment penalty surcharge of 1-1/2% per month of all net
AmeriNet payments due may be assessed by AmeriNet for all checks and/or reports received more than thirty (30) days past the close of the reporting period.
Suppliers
more than sixty (60) days past the close of the reporting period in submission of either checks or reports will be subject to cancellation of this Agreement by AmeriNet.
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SPECIALTY AGREES TO ALL THE SPECIFICATIONS OF ITEM 14 WITH ONE EXCEPTION, 1) SUPPLIER SHALL BE REQUIRED TO SUBMIT AN ADMINISTRATIVE FEE EQUAL TO [***]* OF ALL GROSS SALES REALIZED UNDER THIS AGREEMENT TO
AMERINET, INC. |
- *
- PORTIONS
OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
- 15.
- During
the term of this Agreement, AmeriNet retains the right to audit or to have audited Supplier's records, such audits to include but not be limited to tracking of administrative
contract fees, Supplier's costs and Supplier's freight charges. Should any audit produce evidence that proper credit for administrative contract fees was not given to AmeriNet, or overcharges were
incurred by Institutions, then Supplier shall respond to such evidence and cure the default within fifteen (15) days. Failure to cure shall be sufficient cause for AmeriNet to seek actual
damages.
- 16.
- Upon
request by AmeriNet, Supplier shall provide, at no charge, AmeriNet or its Institutions with representative samples of its products in quantities which are adequate for
purposes of evaluation by the Institutions.
- 17.
- All
risk of damage to or loss of products shall be assumed by Supplier until deliveries are made to, and accepted by, AmeriNet's Institutions.
- 18.
- Supplier
acknowledges the Institution's right to return, without penalty, cost or delay, excess or unnecessary products for full original purchase price credit.
- 19.
- In
the performance of its duties and obligations under this Agreement, SUPPLIER shall at all times be in compliance with all applicable Federal, State and Local laws, regulations
and ordinances now in effect or as hereafter amended or promulgated.
- 20.
- All
products supplied by Supplier shall be warranted to be free from defects and imperfections in design, material, and workmanship, to be merchantable, and if intended for a
particular purpose, to be fit for such purpose.
- 21.
- Upon
request of AmeriNet, Supplier shall provide evidence of insurance for a) Worker's Compensation covering its full liability under the appropriate states' statutes and b)
sufficient comprehensive general (and professional, if applicable) liability insurance. Supplier shall keep and maintain the foregoing insurance during the term of the Agreement. Supplier shall
immediately (and no later than fifteen (15) days prior to the effective date of any change) notify AmeriNet in writing of any changes in the foregoing insurance, including, but not limited to,
cancellation, material change or change in coverage, AmeriNet shall have the right to change the Agreement on thirty (30) days notice in the event of any material change in insurance coverage.
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AGREED. CERTIFICATE OF INSURANCE LIABILITY WILL BE FORWARDED UPON REQUEST. |
- 22.
- Supplier
shall defend, indemnify and hold harmless AmeriNet, its Shareholders and Institutions against any and all suits, claims and expenses (including attorneys' fees) for damage
to property or for injury to or death of persons caused by, or in any way arising out of, Supplier's furnishing of products, equipment or services thereunder, except those which result from the
negligent act or omission of a purchasing Institution, its officers, agents or employees.
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EACH PARTY AGREES TO MUTUALLY INDEMNIFY AND HOLD HARMLESS, THEIR DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS, OR LIABILITIES OF ANY NATURE WHICH MAY BE ASSESSED AGAINST THEM BY
THIRD PARTIES IN CONNECTION WITH THE PERFORMANCE OF SERVICES UNDER THIS AGREEMENT. |
- 23.
- Supplier
shall defend, indemnify and hold harmless AmeriNet, its Shareholders and Participating Institutions against any and all suits, claims and expenses (including attorneys'
fees) arising out of the use or sale of any product thereunder being in violation of any rights under patent, trademark or copyright laws.
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EACH PARTY AGREES TO MUTUALLY INDEMNIFY AND HOLD HARMLESS, THEIR DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM AND AGAINST ANY AND ALL CLAIMS, ACTIONS, OR LIABILITIES OF ANY NATURE WHICH MAY BE ASSESSED AGAINST THEM BY
THIRD PARTIES IN CONNECTION WITH THE PERFORMANCE OF SERVICES UNDER THIS AGREEMENT. |
- 24.
- Supplier
shall not assign, transfer, convey, sublet or otherwise dispose of any of its right title or interest in this Agreement without the prior written approval of AmeriNet.
- 25.
- It
is hereby understood and agreed that for the term of this Agreement, the total price paid by any Institution for products or services under this Agreement shall be
[***]*. Supplier furthermore
agrees
to adjust the terms and pricing provided under this Agreement to comply with the terms set forth in this section should any group or entity with [***]*
- *
- PORTIONS
OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
- 26.
- In
the event PRICE INCREASES occur during the term of this Agreement, which are permitted under the terms of this Agreement, Supplier shall give AmeriNet at least sixty (60) days
prior written notice before implementing the increases.
- 27.
- Supplier
guarantees that it will not persuade or induce any Institution to terminate its status or relationship with AmeriNet or its Shareholders by offering more attractive
contract prices, terms or conditions to the Institution directly or to another group purchasing program. Violation of that guarantee will constitute sufficient cause for AmeriNet to seek damages from
Supplier for loss of all prospective contract administration fees.
- 28.
- Should
Supplier offer to any AmeriNet Institution a price lower than the contract price, or terms more attractive than the terms stipulated in this Agreement, then the same offer
shall be considered to have been made to AmeriNet, and if accepted, will constitute an amendment to this Agreement.
- 29.
- Upon
the release of new products, Supplier agrees to add such products to the Agreement within thirty (30) days, subject to AmeriNet's approval.
- 30.
- It
is understood that new clinical developments in patient care or new regulatory agency restrictions may result in changed conditions, and if in AmeriNet's sole discretion, this
Agreement or Supplier's products do not adequately meet such conditions, AmeriNet shall have the option to pursue alternate or additional contracts.
- 31.
- This
Agreement shall be signed by a duly authorized representative or agent of Supplier, such signature to constitute proof of that person's authority to bind the Supplier.
- 32.
- Supplier
represents that it prepared its proposal to AmeriNet without any collusion whatsoever among or between any other potential or actual contractors of AmeriNet.
- 33.
- In
that many AmeriNet member facilities are providers under the federal Medicare programs, the provisions of Section 952 of the Omnibus Reconciliation Act of 1980 {42 U.S.C. Section
1395X(V0(1)} (the "Act") may be in force. Supplier hereby agrees to abide by the terms of the Act and its interpretative regulations including, but not limited to, maintenance of records concerning
services and cost incurred under said Agreement for four (4) years, and obtaining such a written contractual commitment from any of the Supplier's subcontractors.
- 34.
- The
attached "AmeriNet Proposal Data Sheet" (Addendum B) must be completed and attached to this Agreement, and shall be a part of this Agreement, binding on Supplier.
- 35.
- The
enclosed addendum's referenced as:
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AmeriNet ValuLab Membership List |
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| B. |
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Proposal Data Sheet |
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| C. |
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Supplier Contract Reporting |
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| D. |
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Supplier Proposal dated: |
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- 37.
- This
document, along with the AmeriNet Request For Proposal, and the Addendums B and C (Parts A&B) attached, and the Supplier Proposal when properly executed by authorized parties
of AmeriNet and the Supplier, will constitute the full complete Agreement between the parties as to the terms outlined herein.
I
have read and understand AmeriNet's general terms and conditions and any special terms and conditions contained herein, and agree to supply the products and services for which prices are proposed in
accordance with all provisions, terms and conditions stated herein.
Agreement Accepted By:
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| SUPPLIER NAME: |
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Specialty Laboratories |
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| ADDRESS: |
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▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ |
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▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ |
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| AUTHORIZED REPRESENTATIVE: |
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| SIGNED: |
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/s/ ▇▇▇▇ ▇▇▇ |
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| NAME (print): |
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▇▇▇▇ ▇▇▇ |
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| TITLE: |
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Contract Administration Supervisor |
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| DATE: |
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June 19, 1998 |
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Agreement Accepted By:
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| NAME: |
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AmeriNet, Inc, |
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| ADDRESS: |
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▇.▇. ▇▇▇ ▇▇▇▇▇ |
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▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
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| AUTHORIZED REPRESENTATIVE: |
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| SIGNED: |
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/s/ ▇▇▇▇ ▇▇▇ ▇▇▇▇ |
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| NAME (print): |
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▇▇▇▇ ▇▇▇ ▇▇▇▇ |
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| TITLE: |
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Director of Operations |
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| DATE: |
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July 15, 1998 |
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| AMERINET SHAREHOLDERS: |
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| [LOGO] |
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[LOGO] |
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[LOGO] |
| Hospital Shared Services |
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Intermountain Health Care |
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Vector Healthsystems |
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS ENCLOSED BY BRACKETS AND UNDERLINED. THE
CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
May 2,
2001
▇▇. ▇▇▇▇
▇▇▇▇▇▇▇▇
Account Executive Business Development
Specialty Laboratories
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dear
▇▇▇▇,
This
letter acknowledges receipt and acceptance of your contract renewal proposal for Reference Laboratory Services for a period of three (3) years beginning June 1, 2001 and ending
May 31, 2004.
AmeriNet
has assigned contract number [***]* to this agreement. Please reference this contract number on all correspondence, sales reports and checks for payment of
[***]* administrative fees that are to be paid quarterly.
Enclosed
with this letter are two (2) copies of the signature page to execute this agreement. Please sign both copies and return one to my attention.
We
are pleased to enter into this venture with Specialty Laboratories and we look forward to working with you on this contract.
Sincerely,
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
Senior Contract Manager
Enclosure
- *
- PORTIONS
OF THIS PAGE HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILLED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
QuickLinks
EXHIBIT 10.17 
