CERTAIN INFORMATION IN THIS EXHIBIT IS SUBJECT TO A REQUEST FOR CONFIDENTIAL
TREATMENT. IN ACCORDANCE WITH RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED, SUCH INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF SUCH OMITTED
INFORMATION HAS BEEN INDICATED WITH AN ASTERISK[*].
1999 NURSING HOME/LONG TERM CARE/HOME HEALTH CARE DISTRIBUTOR
GLUCOMETER ELITE-Registered Trademark- METER AND TEST STRIP AGREEMENT
SOLE SOURCE - CONTRACT X
This Agreement is made by and between Bayer Corporation, acting through its
Diagnostics Division at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
(hereinafter "Bayer"), and Mediquik Services, Inc., located at 000 Xxxxx Xxxx
Xxx #000, Xxxxxxx, XX 00000 (hereinafter "Distributor").
In consideration of the mutual promises and covenants contained herein, the
parties agree as follows:
1. INTRODUCTION
1.1. Pursuant to this Agreement, Bayer agrees to sell and Distributor
agrees to purchase "For Professional Use Only" labeled
GLUCOMETER ELITE Blood Glucose Test Strips 50's ("Test Strips")
for resale exclusively to nursing homes/long term care
facilities, and home health care agencies (End-users).
1.1.1. Bayer will provide one GLUCOMETER ELITE-Registered
Trademark- Meter (Meter) at no charge to each nursing
station in each of the Distributor's nursing home/long
term care facility it services, if needed.
1.1.2. Distributor may purchase Single-Let-TM- Lancets,
FINGERSTIX-Registered Trademark- Lancets, and/or
GLUCOLET-Registered Trademark- 2 Automatic Lancing
Devices (individually or collectively "Lancet Products")
as set forth in paragraph 2.3.1.
1.2. The End-user facilities serviced by the Distributor must sign
and the Distributor must keep on file, an own use certificate
specifying the Meters, Test Strips and/or Lancet Products
acquired under this contract may not be resold to other
End-users or any other channels of distribution.
1.3. Distributor is currently an Authorized Distributor of Bayer
products, pursuant to a separate Agreement between Bayer and
Distributor, the terms of which are incorporated herein by
reference.
1.4. Distributor agrees to provide training, in-service and ongoing
support for all nursing staff of Bayer Meters and Test Strips at
End-user facilities.
1.4.1. Distributor agrees to communicate the unique features of
Meters, Test Strips and/or Lancet Products via
newsletters, formulary letters, flyers, management
meetings, telemarketing and sales representative support.
1.5. Under the conditions of paragraph 1.6 hereof, Bayer will issue a
credit to the Distributor in accordance with paragraph 2.4 for
the credit amount set forth on Attachment A for sales of Test
Strips and/or the credit amount set forth in 2.3.1 for sales of
Lancet Products made to End-users for which Distributor
maintains End-user information in a format acceptable to Bayer.
1.5.1. Distributor must refrain from debiting on current or past
due statements for proper issuance of credit by Bayer
Corporation. Debiting Bayer prior to issuance of credit
1
as stated in paragraph 2.4 will result in immediate
termination of contract upon written notice to
Distributor.
1.6. In consideration of the issuance of the credit to the
Distributor by Bayer, Distributor agrees to provide name,
address, Distributor customer number, invoice number, product
sold, quantity of product sold, and date of sale ("End-user
information") for each End-user to whom Test Strips and/or
Lancet Products are sold. Distributor shall forward such
information to Bayer on a monthly basis as set forth in
paragraph 2.4. Such End-user Information monthly submissions
should be substantially similar in format to the format set
forth in Attachment X. Xxxxx will issue credit to the
Distributor only for those sales for which End-user Information
is provided.
1.7. Distributor remains responsible for the accuracy of all End-user
Information submitted to Bayer. Distributor agrees that Bayer
has the right to perform random audits of Distributor's records
in support of credit claims to determine that credits have been
issued in accordance with provisions of this Agreement. Such
audits will be performed by Bayer at a reasonable time and in a
reasonable manner upon ten (10) days prior written notice to
Distributor. Bayer will not use the Distributor's End-user
Information for any purpose other than to verify contract
eligibility. If the audit discloses any cases wherein credits
were issued to the Distributor for non-qualifying purchases, the
Distributor shall reimburse Bayer for such credit issued within
thirty (30) days of receipt of notice from Bayer, whether or not
such credits were issued as a result of an error by Distributor.
1.8. Distributor agrees to purchase Test Strips listed in paragraph
2.1.1 directly from Bayer in the quantity committed to in
Attachment A, per contract year.
1.9. Distributor agrees to represent Bayer Meters and Test Strips as
their exclusive system of choice for a minimum of 5 years.
1.9.1. Exclusive shall mean the Distributor agrees and warrants
it will represent Bayer as its sole and only manufacturer
of Test Strips for End-user facilities and Distributor's
total of Bayer Test Strip sales will represent 90% of
their End-user business 12 months from the date of
acceptance of this contract by Bayer.
1.9.2. Bayer will evaluate compliance with Attachment A at
twelve month intervals. Should purchases fail to meet
Committed Yearly Volumes, Bayer has the right to invoice
the Distributor for failure to meet the yearly committed
volume as set forth on Attachment A and immediately
terminate this Agreement.
1.9.3. Quarterly Reviews will be conducted by a Bayer
representative based on Distributor reports of market
share attainment. Distributor shall provide Bayer with a
Quarterly Market Share Report in a format similar to that
shown in Attachment B no later than thirty (30) days
following the close of each calendar quarter.
2. CREDITS
2.1. Distributor agrees to purchase Test Strips directly from Bayer
at the prices and quantities designated in subparagraph 2.1.1.
Bayer has no control over the prices for which the Test Strips
are sold by the Distributor to the End-users.
2
PRODUCT UNIT EFFECTIVE
2.1.1. TEST STRIP NUMBER PRICE DATE*
---------- ------- ----- ---------
"For Professional Use 3873 * 1/1/99
Only GLUCOMETER ELITE"
Test Strips 50s
Minimum case quantities
(24 Boxes/Case)
*Price may change with 30 days' written notice.
2.2. Bayer will credit the Distributor's account the amount as per
the pricing level committed to as set forth on Attachment A, for
Test Strips sold by the Distributor to End-users.
2.3. Distributor may also purchase directly from Bayer Single-Let
Lancets. FINGERSTIX Lancets, and GLUCOLET 2 Automatic Lancing
Devices at the price and quantities designated in subparagraph
2.3.1.. These Lancet Products are not price protected and price
increases will be based on annual increases in the Average
Wholesale Price as reflected in Bayer's Distributor Price Lists.
PRODUCT UNIT UNIT NET PRICE EFFECTIVE
2.3.1. LANCET PRODUCTS NUMBER PRICE CREDIT AFTER CREDIT DATE*
--------------- ------- ----- ------ ------------ ---------
Single-let Disposable 6568 * * * 1/1/99
Lancets, 200/Box
FINGERSTIX Lancets, 5965 * * * 1/1/99
200/Box
GLUCOLET 2 Automatic 5976 * * * 1/1/99
Lancing Device, 10/Box
*Price may change with 30 days' written notice.
Order requirements for Lancet Products are found in Bayer's 1999 Distributor
Price Lists.
2.4. Distributor shall claim credits on a monthly basis by submitting
End-user information as defined in paragraph 1.6 in a format
acceptable tot he Bayer Customer Order Services Chargeback
Department not later than the tenth day of the month following
the month for which sales were made to End-users. Such End-user
Information monthly submissions should be substantially similar
in format to the format set forth in Attachment C. If the
End-user Information submitted by Distributor is satisfactory,
Bayer will issue a credit to the Distributor's account. Claims
for credits will not be honored if submitted to the Bayer
Customer Order Services Chargeback Department 90 or more days
after Distributor's sale to End-users.
2.5. If the documentation submitted by Distributor is insufficient to
support the claimed credits, Bayer will so notify the
Distributor who will have ten (10) days from the date of such
notification to provide the necessary documentation. If Bayer
does not receive the documentation within this period, the
credit will not be granted.
----------------
*This information has been omitted from this exhibit and is subject to a
request for confidential treatment. In accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended, such information has been filed
separately with the Securities and Exchange Commission.
3
2.6. To the extent that it may be required, any credits or other
price reductions issued by Bayer to Distributor under this
Agreement may constitute a discount under Section 1128B(b)(3)
(A) of the Social Security Act [42 USC 1320a-7b(b)(3)(A)].
Accordingly, Distributor agrees to properly disclose and
appropriately reflect the credit or reduction in price in any
costs claimed or charges made to Medicare, Medicaid, or other
federal or state health insurance programs which reimburse the
Meters and Test Strips and require such disclosure. Distributor
shall retain all credit or other price reduction information and
make it available to Medicare, Medicaid or other government
agencies in compliance with the discount disclosure requirement.
2.7. For Meters provided at no charge, Distributor shall not make any
claims for reimbursement under Medicare/Medicaid or any other
third party insurance and, Meters are not eligible for any
manufacturer's mail-in/trade-in offer. Distributor will insure
completed warranty cards are returned to Bayer.
2.8. Test Strips and Lancet Products are for distribution in the
United States and District of Columbia only.
2.9. Meters provided under this Agreement to Distributor by Bayer at
no charge for End-user use can only be supplied to End-users in
the United States and District of Columbia.
3. TERM
3.1. This Agreement will commence on the date of counter signature by
Bayer in accord with provisions as stated in paragraph 7 and
shall terminate on 12/31/00. It may be extended or modified
only upon execution of a writing by authorized representatives
of both parties.
3.2. Bayer may terminate this Agreement immediately upon written
notice to the Distributor if Bayer, in its sole judgment,
determines that the Distributor has:
3.2.1. knowingly claimed credits for sales that were not made to
End-users; or
3.2.2. sold the Test Strips and/or Lancet Products provided to
Distributor under this Agreement to parties other than
End-users and the Distributor has submitted credit claims
to Bayer for such uses; or
3.2.3. acquired Test Strips and/or Lancet Products at a Unit
Price other than listed in 2.1.1 and 2.3.1; or
3.2.4. failed to keep and provide access to Bayer of End-user
Information set forth in paragraphs 1.6, 1.7, and 2.4; or
3.2.5. sold the Meters provided at no charge to Distributor
under this Agreement.
3.3. If Distributor violates any terms of this Agreement (including
without limitation the failure to make any payment required
under this Agreement when such payment becomes due) Bayer may,
in its discretion and without further liability whatsoever,
immediately terminate this Agreement. Distributor waives prior
notice, service of process and preseizure hearing as prior
conditions to repossessions of all Meters, Test Strips and
Lancet Products still in
4
Distributor's possession provided hereunder and shall pay all
costs incurred by Bayer in connection with such repossession
(including reasonable attorney fees).
3.4. Bayer may terminate this Agreement for any reason upon sixty
(60) days prior written notice to Distributor.
3.5. Either Party may terminate this Agreement upon thirty (30) days
prior written notice upon the happening of any of the following
events:
3.5.1. the adjudication of either party to be bankrupt or
insolvent;
3.5.2. the filing by either party of a petition in bankruptcy or
insolvency;
3.5.3. the filing by either party of a petition or answer
seeking reorganization or readjustment under any law
relating to insolvency or bankruptcy;
3.5.4 the appointment of a receiver with respect to all or
substantially all of the property of either party;
3.5.5 any assignment by either party of its assets for the
benefit of creditors;
3.5.6 the institution by either party of any proceedings for
liquidation or the winding up of its business other than
for purposes of reorganization, consolidation or merger.
3.6. For the term of this Agreement, Distributor agrees to provide
one hundred per cent (100%) of their Bayer Test Strip
requirements to End-users who utilize the Bayer Blood Glucose
monitor.
3.7. If Distributor diverts or sells any Test Strips, Meters, or
Lancet Products intended for Distributor's End-users to any
other Distributor or third party such action shall constitute
grounds for termination of this Agreement immediately upon
written notice and removal of Distributor as an Authorized
Distributor of Bayer. Bayer has the right to recover all credits
issued to the Distributor under this Agreement. Bayer also
reserves the right to recover the Average Wholesale Price
published in the 1999 Bayer Distributor Price List for all no
charge meters shipped to the Distributor under the terms of this
Agreement.
4. WARRANTY
4.1. Bayer's standard warranty terms shall apply to Meters, Test
Strips, and Lancet Products provided under this Agreement.
5. GENERAL
5.1. GOVERNING LAW: This Agreement will be governed by the laws of
the State of New York.
5.2. ASSIGNMENT: This Agreement shall not be assigned by Distributor
without the prior written consent of Bayer.
5
5.3. MODIFICATION: This Agreement contains all the Agreements and
conditions applicable to this undertaking. All prior oral and
written Agreements of any kind are excluded. The terms and
conditions of this Agreement shall not be added to, modified,
superseded or otherwise altered except by a written modification
signed by authorized representatives of both parties.
5.4. NO WAIVER OF CONDITION: Failure of Bayer to insist on strict
performance shall not constitute a waiver of any of the
provisions of this Agreement or waiver or any other default of
the Distributor.
5.5. INDEPENDENT CONTRACTOR AND INDEMNIFICATION
5.5.1. This Agreement does not create a special or fiduciary
relationship between the parties; Distributor is an
independent contractor, and nothing in this Agreement is
intended to constitute either party an agent, legal
representative, subsidiary, joint venturer, partner,
employee, or servant of the other for any purpose
whatsoever.
5.5.2. Nothing in this Agreement authorizes Distributor to make
any contract, warranty, or representation on Bayer's
behalf or to incur any debt or other obligation in
Bayer's name. Distributor shall indemnify and hold Bayer,
and Bayer's affiliates and parent company's officers,
directors, shareholders, employees and representatives,
harmless against any and all claims, losses, costs,
expenses, liabilities, damages arising directly or
indirectly from, as a result of, or in connection with
Distributor's performance of its obligations under this
Agreement including the costs, including attorney's fees,
of defending against them.
5.6. Distributor and Bayer shall maintain the confidentiality of all
the terms and conditions of the Agreement throughout the
duration hereof and for a period of two (2) years following the
effective date of expiration or termination.
6. All notices to the respective parties shall be in writing and shall be
sent via certified mail return receipt requested to the following
addresses:
TO BAYER CORPORATION: TO DISTRIBUTOR:
Bayer Corporation, Diagnostics Division MediQuik Services, Inc.
000 Xxxxx Xxxxxx Xxxxxx 000 Xxxxx Xxxx Xxx Xxxx #000
Xxxxxxxxx, Xxxxxxx 00000 Xxxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxxx
Contract Administrator
7. This Agreement will be effective only upon receipt of the
requisite information on Attachment's A and counter signature of
Bayer hereon. Distributor should acknowledge their acceptance
of this Agreement by signing both copies and returning them to
Bayer Corporation by the close of business February 28, 1999,
after which time this proposal will be considered null and void.
If the required information is acceptable to Bayer, Bayer will
countersign both copies of this Agreement and return one to
Distributor for its records.
6
BAYER CORPORATION DISTRIBUTOR
By: /s/ By: /s/
---------------------------- ---------------------------
Authorized Signature Authorized Signature
Xxxx X. Xxxxxx, Manager,
Contract Administration Xxxxx Xxxxxxxxxxx
-------------------------------- ---------------------------
Print Name and Title Print Name and Title
2/9/99 2/4/99
-------------------------------- ---------------------------
Date Date
7
ATTACHMENT A FOR CONTRACT X
a) If DISTRIBUTOR not meet Committed Yearly Volume, as set forth below,
the Distributor will be charged back the price difference which is equal to
the price at the Committed Yearly Volume level minus the price at the volume
level achieved in the given contract year, multiplied by the quantity of
Distributor's actual product purchases in the given contract year. In
addition, if purchase levels fall below * yearly volume in 50s, then
price to which chargeback will be assessed is the GLUCOMETER-Registered
Trademark- ELITE Test Strip Base Pricing of * /box of 50s.
GLUCOMETER ELITE Net GLUCOMETER ELITE
Committed Yearly Test Strip 50s Test Strip 50s
Volume in 50s Credit Value Price After Credit
--------------- ---------------- --------------------
56,000 * *
80,000 * *
104,000 * *
128,000 * *
152,000 * *
176,000 * *
208,000 * *
232,000 * *
256,000 * *
280,000 * *
b) If Distributor agrees to purchase * GLUCOMETER ELITE Test Strips
(50s) in a given contract year and does not meet such committed volume in the
given contract year, the Distributor will be charged back the price
difference which is equal to the price at the Committed Yearly Volume level
minus the price of the volume achieved as per the following schedule,
multiplied by the quantity of Distributor's actual product purchases in the
given contract year.
GLUCOMETER ELITE
Yearly Test Strip 50s Chargeback to
Volume in 50s Base Pricing Distributor
------------- ---------------- --------------
less than * * *
MediQuik Services, Inc. agrees to purchase directly from Bayer the Committed
Yearly Volume of * boxes of "For Professional Use Only GLUCOMETER
ELITE" Test Strips 50s per contract year.
/s/ Xxxxx Xxxxxxxxxxx, COO
----------------------------------------
Distributor's Authorized Signature
----------------
*This information has been omitted from this exhibit and is subject to a
request for confidential treatment. In accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended, such information has been filed
separately with the Securities and Exchange Commission.
ATTACHMENT B FOR CONTRACT X
QUARTERLY MARKET SHARE REPORT FORMAT
DISTRIBUTOR NAME AND ADDRESS ACCOUNT NUMBER: ____________
___________________________________ CONTRACT NUMBER: ___________
___________________________________
___________________________________
REPORTING PERIOD: ____________ TO ____________
TOTAL SUMMARY
---------------------------------------------------------------------------------------------------------------------
Product Product Description Package Total # of Quarterly Unit
Code Size Packages Market Share %
---------------------------------------------------------------------------------------------------------------------
3873 "For Professional Use Only GLUCOMETER ELITE-Registered 50s
Trademark-" Test Strips
---------------------------------------------------------------------------------------------------------------------
Competitive Product Unit Sale 50's
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BRANCH DETAILS
BRANCH LOCATION:
---------------------------------------------------------------------------------------------------------------------
Product Product Description Package Total # of Quarterly Unit
Code Size Packages Market Share %
---------------------------------------------------------------------------------------------------------------------
3873 "For Professional Use Only GLUCOMETER ELITE-Registered 50s
Trademark-" Test Strips
---------------------------------------------------------------------------------------------------------------------
Competitive Product Unit Sale 50's
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SEND SUMMARY REPORT AND BACK-UP DETAIL TO:
Bayer Corporation, Diagnostics Division
Contract Administration
Attn: Xxxx X. Xxxxxx
XX Xxx 0000
Xxxxxxxxx, XX 00000-0000
ATTACHMENT C FOR CONTRACT X
END USER INFORMATION
MONTHLY REPORT(S) FORMAT
DISTRIBUTOR NAME AND ADDRESS ACCOUNT NUMBER: ____________
___________________________________ CONTRACT NUMBER:
___________________________________
___________________________________
REPORTING PERIOD: ____________ TO ____________
PRODUCT LEVEL SUMMARY
-----------------------------------------------------------------------------------------------------------------------------
Product Product Description Package Quantity Credit Total
Code Size (Units) Amount $ Credit $
-----------------------------------------------------------------------------------------------------------------------------
3873 "For Professional Use Only GLUCOMETER ELITE-Registered 50s
Trademark-" Test Strips
-----------------------------------------------------------------------------------------------------------------------------
6568 Single-Let-TM- Disposable Lancets 200s
-----------------------------------------------------------------------------------------------------------------------------
5965 FINGERSTIX-TM- Lancets 200s
-----------------------------------------------------------------------------------------------------------------------------
5976 GLUCOLET-Registered Trademark- 2 Automatic Lancing Device 10s
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THE SUMMARY REPORT(s) MUST BE ACCOMPANIED BY ALL APPLICABLE BACK-UP DETAIL
DATA (INCLUDING DISTRIBUTOR'S CUSTOMER'S NAME AND ADDRESS, DISTRIBUTOR'S
CUSTOMER NUMBER, INVOICE NUMBER, PRODUCT CODE, QUANTITY OF PRODUCT
SOLD, AND DATE OF SALE) IN A FORMAT SIMILAR TO THAT SHOWN BELOW.
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END-USER BACK-UP DETAIL
-----------------------------------------------------------------------------------------------------------------------------
Distributor's Distributor's Distributor's Invoice Product Quantity Date of
Customer's Customer's Address Customer Number Code of Product Sale
Name Number Sold
-----------------------------------------------------------------------------------------------------------------------------
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SEND SUMMARY REPORT AND BACK-UP DETAIL TO:
Bayer Corporation, Diagnostics Division
Contract Administration
Attn: Xxxx X. Xxxxxx
XX Xxx 0000
Xxxxxxxxx, XX 00000-0000
204042.1
