Distribution and Service Center Agreement between Bovie and Symbol
Distribution and Service Center Agreement between Bovie and
Symbol
Bovie
Medical Corporation (hereinafter referred to as “Bovie”) is the manufacturer and
provider of Bovie’s electrosurgical RF generators (the “Products”); and wishes
to set up its distribution and service center named Bovie Medical Limited
(hereinafter referred to as the “Bovie-HK”) to provide distribution which
includes marketing, support and servicing of the Products for sale in the
Markets (see Appendix 1).
WHEREAS,
Bovie wishes to appoint and authorize Symbol Medical Limited (hereinafter
referred to as “Symbol”) and Symbol wishes to accept such appointment, to set up
Bovie-HK in Hong Kong on the terms and conditions set forth herein.
NOW,
THEREFORE, Bovie and Symbol agree as follows:
Section 1 |
Operations
of Bovie-HK |
1.1.1 |
Symbol
agrees to set-up Bovie-HK upon the effective day of this agreement.
Bovie-HK will be operated and managed by Symbol independently in this
phase. In this phase, the Products will be assembled at Bovie and sold to
Bovie-HK. Bovie-HK will function as a distribution and service center of
the Products in Markets. |
1.1.2 |
Subsequent
to the commencement of this agreement, Bovie and Symbol will further
negotiate with the intent to form a Joint Venture transforming Bovie-HK,
from independent ownership by Symbol to a possible co-ownership by both
parties. |
1.1.3 |
The
parties agree that prior to the commencement of business pursuant to this
agreement non-disclosure / confidentiality agreements, agreeable to Bovie,
shall be executed by Modern Medical Equipment Manufacturing LTD, Symbol
Medical Limited, PSC Corporation and their affiliates, if
any. |
Section 2 |
Appointment
of Distribution Center |
2.1 |
Distribution
Center for Existing Customers |
2.1.1 |
Grant
of Distribution Right - Bovie hereby appoints Bovie-HK as the distributor
to solicit and collect orders and service for the products use within the
Markets. Bovie-HK shall serve as a distribution center and be responsible
for re-distribution and inquiries of the Products and carry out marketing
of the Products in the Markets. |
Bovie
agrees that within thirty (30) days of the signing of this agreement it will
notify existing distributors of the agreement’s execution. Under no
circumstances shall Symbol or any of its affiliates provide such notification
without Bovie’s consent.
Bovie-HK
agrees that Bovie can continue to carry on relationships between Bovie and its
Far East Distributors as described in Appendix B. All distribution relationships
between Bovie and its existing distributors shall not be changed during the
effectiveness of their agreements. Bovie agrees to provide the cooperation time
of each of the current distributors to Bovie-HK as reference.
Bovie and
Symbol agree that any change in business relationships between Bovie and its
existing creditors must be mutually agreed upon.
Bovie
shall have the right to ship the Products directly to its existing distributors
in the Markets or through Bovie-HK for final inspection, as it chooses. Bovie-HK
will receive minimum 5% handling charge from Bovie for all shipments executed
and delivered by Bovie or Bovie-HK to existing customers after effectiveness of
this agreement.
2.1.2 |
Management
of Loaner Units |
Bovie
will provide Bovie-HK, at its expense, reasonable quantities of Product to be
used as loaner units for customers during any repair period. Bovie-HK shall
provide equivalent loaner units to customers for temporary operation or
replacement of defective Products, depends on individual case and customer’s
need. Such defective Products which are superseded by replacement loaner units
shall be exchanged by Bovie-HK at additional charge, if functional or physical
condition of the replacement unit is superior to the defective Product. Bovie-HK
will execute a Product Traceability System for documentation of serial number,
lot number and relevant information supporting the instant replacement
service.
Bovie-HK
shall furnish to Bovie a business plan for determination of service fee and
handling charge paid to and received by Bovie-HK., for the management of its
loaner unit service of the Products.
2.1.3 |
Purchase
Orders |
During
the first year of execution of this Agreement, all Purchase Orders from existing
customers for the Products in the Markets are to be addressed to Bovie. After
the first year of execution, Bovie will ship Bovie-HK several sets of Product as
inventory depends on the sales quantity of the first year and the forecast of
coming annual. Bovie will notify Bovie-HK if any Product to be shipped via
Bovie-HK for final inspection and Bovie-HK will be responsible to arrange
shipment of such products to customers after its final inspection.
2.2 |
Distribution
Centre for Marketing of New
Customers |
2.2.1 |
Marketing
of Products |
Bovie-HK
shall sign distribution agreements, only if mutually agreed upon by Bovie, to
sell the Products to new customers in the Markets. Bovie-HK shall prepare,
adopt, and implement a business, marketing and sales plan of reasonable scope
and detail, and shall dedicate sufficient personnel and resources for the
advancement and accomplishment of such plan.
2.2.2 |
Products
and Services, Promotional Materials |
Bovie
will supply Bovie-HK with a reasonable quantity of promotional materials, such
as literature, catalogues, leaflets, and other advertising material relating to
the Products. Bovie-HK shall have the right to incorporate Bovie’s literature.
Bovie agrees to xxxxx Xxxxx-HK a license to use “Bovie” and “Bovie-Asia” on
Bovie-HK’s literature during the effective period of this agreement. Bovie shall
be responsible to review in advance and comment on the combined promotional
Product in the interest of assuring accuracy and completeness of the information
therein. Any change, other than strict translation of promotional materials
shall be submitted to Bovie for final approval. The cost of establishing
promotion materials and translations will be at Bovie-HK’s expense or their
assigned distributor’s expense. Under no circumstances shall Bovie be
responsible for these costs.
Copyrights,
patent rights, trademark rights, trade name rights or other similar rights under
Chinese law shall inure to the sole benefit of Bovie, and Symbol and Bovie-HK,
or its affiliates, will not contest Bovie’s right title and interest to any of
the above anywhere in the world.
2.2.3 |
Bovie’s
pricing to Bovie-HK |
The Price
of the Products paid by Bovie-HK to Bovie shall be determined by suggested list
prices as described in Appendix C.
The
suggested list prices shall generally apply and discount terms to Bovie-HK shall
be reviewed and considered for adjustment.
2.2.4 |
Bovie-HK’s
pricing to Customers in the Markets |
Prices
charged new customers for the Products distributed by Bovie-HK in the Markets
shall be mutually agreed upon between Bovie and Bovie-HK. Price quotations shall
include, in addition to prices for the Products, prices for supporting services
provided by Bovie-HK.
2.2.5 |
Purchase
Orders from new customers for the Products in the Markets are to be
addressed to Bovie-HK. Bovie-HK shall in turn place a purchase order of
Bovie-HK to Bovie with the suggested list price between Bovie and
Bovie-HK. |
2.3 |
PSC
Corporation |
2.3.1 |
Registration
and applying documents |
Bovie
approves Symbol’s designation of its affiliate PSC Corporation, a corporation
organized and existing under the Laws of the People’s Republic of China with its
principal place of business at Room 2004-05, 00/X, Xxxxxx Xxxxxxxx Xxxx, Xxxxxxx
Xxxx No. 2, DongShan District, Guangzhou (hereinafter referred to as “PSC”) for
the registration of sales and distributions, repairing and assembling of the
Products in China. The cost of registration will be at Symbol’s own
expense.
Bovie
will issue a warrant of attorney to appoint PSC as its exclusive representative
of distribution, repairing and assembling of the Products in China. PSC will use
its best efforts to apply and obtain licenses necessary for distribution,
repairing and assembly of the Products within nine (9) months after receipt of
Authorization Notification and all others relevant documents from
Bovie.
Upon
incorporation, PSC will serve as the exclusive distribution and service center
of Bovie in China to establish distribution channel and support the Markets for
Products and accessories.
2.3.2 |
Accessories
Pricing |
Bovie
shall offer Bovie-HK Prefer Pricing Schedule for all accessories. Bovie-HK shall
offer Bovie’s existing customers all accessories at its existing pricing.
Neither the existing customers nor new customers shall pay Bovie-HK a pricing
higher than the Listed-Price provided by Bovie.
2.4 |
Other
Obligations |
2.4.1 |
Warranties |
Symbol
and Bovie-HK will hold itself out to customers as a distribution and service
center of Bovie. Symbol and Bovie-HK shall make no warranties with respect to
the Products which exceed the Warranties made by Bovie.
2.4.2 |
Modification
in Pricing |
If Bovie
changes list prices, Bovie shall give Sixty (60) days written notice to
Bovie-HK. However, outstanding customer quotations based upon the price list in
effect prior to a price change shall be honored for up to Ninety (90) days from
the date of notice of the price change.
2.4.3 |
Payment
Collection |
Bovie-HK
shall collect full payment for all orders received from new customers and keep
accounting records of costs and sales. Bovie-HK shall pay Bovie within 30 days
upon receipt of payment from customers. Any payment term offered by Bovie-HK to
new customers beyond net 30 days shall be mutually agreed upon by Bovie and
Bovie-HK.
Bovie
shall pay Bovie-HK within 30 days after shipment of inspected goods or for
providing management and/or repairing services.
2.4.4 |
Product
Shipment |
Bovie
shall ship the Products to fulfill orders of customers in the Markets to
Bovie-HK or according to Bovie-HK instructions pursuant to the purchase order
submitted to Bovie by Bovie-HK.
2.4.5 |
Export
Control Regulation |
Bovie
will use its best efforts to assist Bovie-HK to facilitate any import processing
by Bovie-HK with regard to all required documents and information. In the event
that the Products and the Components parts and materials thereof are the object
of export regulations of the Markets, Bovie-HK will use its best effort to apply
or and obtain the license necessary for Bovie-HK’s export of such Products to
the Markets (with Bovie’s authorization). Bovie agrees to comply with all
applicable export control laws and regulations relating to the Products. Bovie
will also use its best efforts to provide information necessary for Bovie-HK to
comply with all applicable export control laws and regulations relating to the
Products.
Bovie
represents and warrants that the Products supplies hereunder are produced and
delivered in accordance with all applicable laws, rules and regulations,
including but not limited to those laws, rules and regulations governing Product
Safety.
Section 3 |
Appointment
of Repairing Services Center |
3.1 |
During
the terms of Agreement, Bovie-HK will provide the following service to the
Products for the Markets: |
a. |
repair
service; |
b. |
technical
support relating to the use, operation and general knowledge of the
Products; |
c. |
insuring
the repaired Products can meet quality
standards. |
3.2 |
Cost
and Expenses of Repairing |
The
warranty period of Products extends for 24 months after the purchase
date.
The
replacement of PC Boards or components shall be provided by Bovie-HK free of
charge upon evidence of acknowledgement by a user within the warranty period.
The replacement of any parts or components shall be provided by Bovie at
customer’s own expense beyond the warranty period.
Any
expense of examination or inspection provided within warranty period of the
Products shall be paid by Bovie to Bovie-HK. The expense of repairing services
provided within the warranty period of the Products shall be paid by Bovie to
Bovie-HK in accordance with the actual repair work provided by Bovie-HK. The
actual costs of inspection tests and components may be requested for such
products repaired and shall be listed specifically, case by case, in Hong Kong
Dollars and United States Currency, and provided to Bovie on a quarterly basis.
Any expense of repair services provided beyond the warranty period of the
Products shall be at the customer’s expense ( The suggested repair prices as
described in Appendix D.)
3.3 |
Maintenance
of Quality and Safety standards |
3.3.1 |
Quality
Standard |
Bovie
will provide Bovie-HK, at its expense, the specification, detail requirements,
technical standard drawings of all parts, components and equipment used for
assuring the various kinds of technological specifications of the Products after
repair and all tools that are required to use in the repair work.
Bovie-HK
hereby agrees to strictly comply with quality standards of the Products for
repair work of the Products hereunder. At the request of Bovie-HK, Bovie agrees
to submit to Bovie-HK its quality control and inspection data for Bovie-HK’S
inspection. Bovie shall give Bovie-HK pertinent advice or instruction for
Bovie-HK’s reference and compliance.
In the
event problems arise out of the Procedure of Acceptance of the Products, Bovie
shall assist Bovie-HK to solve the problems and complete the procedure or
Acceptance.
3.3.2 |
Repair
and Product Warranty |
Bovie
warrants that the Products manufactured meets Bovie’s requirements for
production at its manufacturing facilities with final checking in Bovie-HK’s
facilities.
Bovie
shall assist Bovie-HK to repair or fix any breakdown in Products, and provide
the PC Board for repair at its expense and at a fixed price beyond the warranty
period.
3.3.3 |
Technical
Information |
Bovie
shall use its best efforts to provide Bovie-HK with copy of specification and
instruction manuals for each Product.
Bovie may
make any modification of specifications and keep Bovie-HK informed of the
modifications with reasons for such changes.
3.3.4 |
Technical
Support and Training |
For the
purpose of improving the repair technique of technicians in Bovie-HK, Bovie
shall provide training for repair work by Bovie-HK as Bovie-HK requires. In
addition, Bovie shall send its staff to guide Bovie-HK technicians in their
repair work and to furnish them with the latest technological know-how necessary
to properly train them. Bovie shall certify Bovie-HK’s repair service quality
and capabilities when they meet Bovie’s standards.
3.3.5 |
Indemnity |
Assembly,
sale, use or other disposition of the Products as well as quality guarantee to
customers, responsibility for product liability, advertising and servicing of
the Products, obtaining approval(s) for the Products pursuant to any standard,
legal or otherwise applicable to the Product, shall be made by Bovie at its
expense. Symbol and Bovie-HK and its subsidiaries and/or affiliates shall not be
responsible therefore to Bovie or any third party. Bovie shall indemnify
Bovie-HK for and hold Symbol and Bovie-HK (or all of the above subsidiaries and
affiliates) harmless from any liabilities, damages and costs and expenses
arising out of or in connection with its operations.
In
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.
Agreed
and Accepted By: Agreed
and Accepted By:
___________________ ____________________
Xxxxx
Citronowicz Xxxx
Xxxx
Vice
President/COO Shareholder
and Director
Bovie
Medical Corporation Symbol
Medical Limited
Appendix
B
Existing
distributors of Bovie assigned in the Markets
The
Markets covered by this Agreement and the existing Exclusive Asia Distributors
in each of those Markets are as follows:
Country |
Tier |
Models |
Distributor |
Contract
Until |
Thailand |
One |
ALL |
AFTA
Service & Supply Company |
Dec
0000 |
Xxxxx |
One |
IDS |
Air
Water Inc. |
Dec
0000 |
Xxxxxxxxxxx |
Two |
ALL |
Biomedica
Health care |
To
be advised |
Korea |
Two |
ALL
excepts IDS |
Hyup-Jin
Trading Co Ltd |
Dec
2005 |
Taiwan
|
One |
ALL |
Kingjing
International |
Dec
0000 |
Xxxxxxxx |
One |
ALL |
Labo-medica
Pte, Ltd |
Dec
0000 |
Xxxxxxxxx |
One |
ALL |
Labo-medica
Pte, Ltd |
Dec
2005 |
Indonesia |
One |
ALL |
Labo-medica
Pte, Ltd |
Dec
0000 |
Xxxxx |
One
|
ALL
excepts IDS |
Medical
U & A Inc. |
Dec
2005 |
Vietnam |
Two |
ALL |
VIMEC |
Dec
2005 |
Hong
Kong |
One |
ALL |
VITA |
Dec
2005 |
India
|
To
be Advised |
IDS |
Edifice |
To
be advised |
Appendix
C
Suggested
Purchasing Price
The
Suggested Price of the Products purchasing from Bovie-HK to Bovie and suggested
price from Bovie-HK to new customers:
Model |
Descriptions | ||||
Xxxxx
A900 |
Xxxxx
900 High Frequency Desiccator | ||||
Xxxxx
A950 |
Xxxxx
950 High Frequency Electrosurgical Generator | ||||
Xxxxx
A1250 |
Xxxxx
1250 High Frequency Electrosurgical Generator | ||||
Bovie
IDS-200 |
Electrosurgical
Generator | ||||
Bovie
IDS-300 |
High
Frequency Electrosurgical Generator | ||||
Model |
The
Highest Unit Price from Bovie-HK to customer
(FOB
HK) |
Discount
offered
By
Bovie to
Bovie-HK |
Depot
Price from
Bovie
to
Bovie-HK
(Door
to Door) | ||
A900 |
USD666.75 |
Minimum
5% |
USD633.41 | ||
A950 |
USD1286.25 |
Minimum
5% |
USD1221.94 | ||
A1250 |
USD1758.75 |
Minimum
5% |
USD1670.81 | ||
IDS-200 |
USD3144.75 |
Minimum
5% |
USD2987.51 | ||
IDS-300 |
USD3984.75 |
Minimum
5% |
USD3785.51 |
The final
pricing and discount offered for any shipment by Bovie to Bovie-HK will be
further determined by both parties.
Appendix
D
Suggested
Price of Repairing Services
The
suggested price for repairing services from Bovie-HK to customers equal
to:
[The
material cost of replacement parts] multiplier
two (2)
or three (3) plus [Labor cost of repairing in Bovie-HK] plus
[Overhead cost of Bovie-HK] plus
[Transportation cost from Bovie-HK to customer].
Appendix
1
The
Markets
The
“Markets” referenced in the agreement are as follows:
Far East
Australia
New
Zealand